Execution Copy 6/23/97
Exhibit 2
AGREEMENT AND PLAN OF REORGANIZATION
among
CRESTAR FINANCIAL CORPORATION,
CRESTAR BANK,
AMERICAN NATIONAL BANCORP, INC.
and
AMERICAN NATIONAL SAVINGS BANK, F.S.B.
June 23, 1997
INDEX
Page
ARTICLE I
General
1.1. Holding Company Merger 2
1.2. Bank Merger 2
1.3. Issuance of Crestar Common Stock and Payment of Cash 2
1.4. Taking of Necessary Action 2
ARTICLE II
Effect of Transaction on Common Stock, Assets,
Liabilities and Capitalization of Crestar,
Crestar Bank, American National and Savings Bank
2.1. Conversion of Stock; Exchange Ratio; Cash Election 3
2.2. Manner of Exchange 4
2.3. No Fractional Shares 6
2.4. Dissenting Shares 6
2.5. Assets 6
2.6. Liabilities 7
ARTICLE III
Representations and Warranties
3.1. Representations and Warranties of American National 7
(a) Organization, Standing and Power 7
(b) Capital Structure 8
(c) Authority 8
(d) Investments 10
(e) Financial Statements 10
(f) Absence of Undisclosed Liabilities 11
(g) Tax Matters 11
(h) Options, Warrants and Related Matters 12
(i) Property 12
(j) Additional Schedules Furnished to Crestar 13
(k) Agreements in Force and Effect 14
(l) Legal Proceedings; Compliance with Laws 14
(m) Employee Benefit Plans 15
(n) Insurance 17
(o) Loan Portfolio 18
(p) Absence of Changes 19
(q) Brokers and Finders 19
(r) Subsidiaries 19
(s) Reports 20
(t) Environmental Matters 20
(u) Disclosure 21
(v) Accounting; Tax; Regulatory Matters 22
(w) Regulatory Approvals 22
3.2. Representations and Warranties of Crestar and
Crestar Bank 22
(a) Organization, Standing and Power 22
(b) Capital Structure 22
(c) Authority 23
(d) Financial Statements 24
(e) Absence of Undisclosed Liabilities 24
(f) Absence of Changes 24
(g) Brokers and Finders 25
(h) Subsidiaries 25
(i) Reports 25
(j) Tax Matters 25
(k) Property 26
(l) Agreements in Force and Effect 26
(m) Legal Proceedings; Compliance with Laws 27
(n) Employee Benefit Plans 27
(o) Regulatory Approvals 28
(p) Environmental Matters 28
(q) Disclosure 29
ARTICLE IV
Conduct and Transactions Prior to
Effective Time of the Merger
4.1. Access to Records and Properties of Crestar, Crestar Bank,
American National and Savings Bank; Confidentiality 29
4.2. Registration Statement, Proxy Statement, Shareholder
Approval 30
4.3. Operation of the Business of American National 31
4.4. No Solicitation 32
4.5. Dividends 32
4.6. Regulatory Filings; Best Efforts 33
4.7. Public Announcements 33
4.8. Operating Synergies; Conformance to Reserve
Policies, Etc. 33
4.9. Crestar Rights Agreement 34
4.10. Agreement as to Efforts to Consummate 34
4.11. Adverse Changes in Condition 34
4.12. NYSE Listing 34
4.13. Updating of Schedules 34
4.14. Transactions in Crestar Common Stock 35
4.15. Branch Closing Law 35
ARTICLE V
Conditions of Merger
5.1. Conditions of Obligations of Crestar and Crestar Bank 35
(a) Representations and Warranties; Performance of
Obligations 35
(b) Authorization of Transaction 36
(c) Opinion of Counsel 36
(d) The Registration Statement 36
(e) Tax Opinion 36
(f) Regulatory Approvals 37
(g) Affiliate Letters 37
(h) NYSE Listing 37
(i) Acceptance by Crestar and Crestar Bank Counsel 37
5.2. Conditions of Obligations of American National and Savings
Bank 37
(a) Representations and Warranties; Performance of
Obligations 38
(b) Authorization of Transaction 38
(c) Opinion of Counsel 38
(d) The Registration Statement 38
(e) Regulatory Approvals 39
(f) Tax Opinion 39
(g) NYSE Listing 40
(h) Fairness Opinion 40
(i) Acceptance by American National's Counsel 40
ARTICLE VI
Closing Date; Effective Time
6.1. Closing Date 40
6.2. Filings at Closing 40
6.3. Effective Time 41
ARTICLE VII
Termination; Survival of Representations,
Warranties and Covenants; Waiver and Amendment
7.1. Termination 41
7.2. Effect of Termination 43
7.3. Survival of Representations, Warranties and Covenants 43
7.4. Waiver and Amendment 43
ARTICLE VIII
Additional Covenants
8.1. Indemnification of American National Officers and
Directors; Liability Insurance 44
8.2. Employment and Severance Agreements 44
8.3. Employee Benefit Matters 44
8.4. Stock Options 46
ARTICLE IX
Miscellaneous
9.1. Expenses 46
9.2. Entire Agreement 46
9.3. Descriptive Headings 46
9.4. Notices 46
9.5. Counterparts 47
9.6. Governing Law 47
Exhibit A - Stock Option Agreement
Exhibit B - Holding Company Plan of Merger of American
National into Crestar
Exhibit C - Bank Plan of Merger of Savings Bank into Crestar
Bank
Exhibit D - Opinion of Luse, Lehman, Xxxxxx, Xxxxxxxx &
Xxxxxx, counsel to American National and Savings
Bank
Exhibit E - Opinion of Hunton & Xxxxxxxx, counsel to Crestar
and Crestar Bank
Exhibit F - Form of Affiliate's Undertaking
INDEX TO SCHEDULES
Schedule Description
-------- -----------
A-1 Securities owned by American National Savings Bank
A-2 American National and Savings Bank Financial
Statements
B American National Taxes Being Contested, etc.
C Salary Rates, American National Common Stock Held
by Certain Employees and Directors of American
National and Savings Bank, Options and Restricted
Stock Awards
D Notes, Bonds, Mortgages, Indentures, Licenses,
Lease Agreements and Other Contracts of American
National and Savings Bank
E Employment Contracts and Related Matters of
American National and Savings Bank
F Real Estate Owned or Leased by American National
and Savings Bank
G Affiliates of American National
H Legal Proceedings of American National
I Insurance of American National
J American National Loans
K Certain Changes
L Environmental Matters
M Crestar Taxes Being Contested, etc.
N American National Subsidiaries and Joint Ventures
O Authority
X Permitted Contracts
AGREEMENT AND PLAN OF REORGANIZATION
This Agreement and Plan of Reorganization (the "Agreement")
dated as of June 23, 1997 among CRESTAR FINANCIAL CORPORATION, a
Virginia corporation ("Crestar"), CRESTAR BANK, a Virginia
banking corporation wholly-owned by Crestar ("Crestar Bank"),
AMERICAN NATIONAL BANCORP, INC. a Delaware corporation (together
with its subsidiaries, "American National") and AMERICAN NATIONAL
SAVINGS BANK, F.S.B., a federal savings bank (together with its
subsidiaries, "Savings Bank"), recites and provides:
A. American National and Crestar have agreed that Crestar
will acquire American National in a statutory merger in exchange
for Crestar Common Stock and cash, and pursuant to a Stock Option
Agreement (the "Option Agreement") attached as Exhibit A,
American National has granted an option to Crestar to purchase
shares of American National Common Stock in certain events. The
Option Agreement shall survive execution of the Agreement for the
term provided in the Option Agreement.
B. The boards of directors of Crestar and American
National deem it advisable to merge American National into
Crestar (the "Holding Company Merger") pursuant to this Agreement
and the Holding Company Plan of Merger attached as Exhibit B (the
"Holding Company Plan of Merger") whereby the holders of shares
of Common Stock ("American National Common Stock") of American
National will receive Common Stock of Crestar ("Crestar Common
Stock") and/or cash in exchange therefor.
C. The boards of directors of Crestar, American National,
Crestar Bank and Savings Bank deem it advisable that after the
Holding Company Merger, Crestar shall cause Savings Bank to be
merged into Crestar Bank (the "Bank Merger"). The boards of
directors deem it advisable that the Bank Merger be accomplished
by the merger of Savings Bank into Crestar Bank pursuant to this
Agreement and the Plan of Merger attached as Exhibit C (the "Bank
Plan of Merger"). The Holding Company Merger and the Bank Merger
are referred to herein collectively as the "Transaction."
D. To effectuate the foregoing, the parties desire to
adopt this Agreement and the Holding Company Plan of Merger,
which shall represent a plan of reorganization in accordance with
the provisions of Section 368(a) of the United States Internal
Revenue Code, as amended (the "Code"), and the Bank Plan of
Merger, which also shall represent a plan of reorganization.
NOW, THEREFORE, in consideration of the mutual benefits to
be derived from this Agreement, and of the representations,
warranties, conditions and promises herein contained, Crestar,
Crestar Bank, American National and Savings Bank hereby adopt
this Agreement whereby at the "Effective Time of the Holding
Company Merger" (as defined in Article VI hereof)
American National shall be merged into Crestar in accordance with
the Holding Company Plan of Merger. At the Effective Time of the
Bank Merger (as defined in Article VI hereof), Savings Bank will
merge directly into Crestar Bank in accordance with the Bank Plan
of Merger. The Bank Merger is intended to qualify as an "Oakar"
transaction to avoid the payment of Federal Deposit Insurance
Corporation ("FDIC") exit and entrance fees in accordance with
Section 5(d)(3) of the Federal Deposit Insurance Act ("FDIA").
The outstanding shares of American National Common Stock shall be
converted into shares of Crestar Common Stock and/or cash as
provided in this Agreement on the basis, terms and conditions
contained herein and in the Holding Company Plan of Merger. At
the Effective Time of the Bank Merger, the outstanding shares of
Savings Bank Common Stock shall be canceled.
In connection therewith, the parties hereto agree as
follows:
ARTICLE I
General
1.1. Holding Company Merger. Subject to the provisions of
this Agreement and the Holding Company Plan of Merger, at the
Effective Time of the Holding Company Merger the separate
existence of American National shall cease and American National
shall be merged with and into Crestar ("Crestar" or the
"Surviving Company").
1.2. Bank Merger. Subject to the provisions of this
Agreement and the Bank Plan of Merger, immediately following the
Effective Time of the Holding Company Merger Crestar shall cause
Savings Bank to merge into Crestar Bank ("Crestar Bank" or the
"Surviving Bank"), which merger shall qualify as an "Oakar"
transaction in accordance with Section 5(d)(3)(A) of the FDIA and
the separate existence of Savings Bank shall cease.
1.3. Issuance of Crestar Common Stock and Payment of Cash.
Crestar agrees that at the Effective Time of the Holding Company
Merger it will issue Crestar Common Stock and/or pay cash to the
extent set forth in, and in accordance with, the terms of this
Agreement and the Holding Company Plan of Merger.
1.4. Taking of Necessary Action. In case at any time after
the Effective Time of the Holding Company Merger any further
action is necessary or desirable to carry out the purposes of
this Agreement and to vest the Surviving Company and/or Surviving
Bank with full title to all properties, assets, rights,
approvals, immunities and franchises of American National and/or
Savings Bank, the officers and directors of the Surviving Company
and/or Surviving Bank shall take all such necessary action.
ARTICLE II
Effect of Transaction on Common Stock, Assets,
Liabilities and Capitalization of Crestar,
Crestar Bank, American National and Savings Bank
2.1. Conversion of Stock; Exchange Ratio; Cash Election. At
the Effective Time of the Holding Company Merger:
(a) Conversion of Stock. Each share of American
National Common Stock issued and outstanding at the
Effective Time of the Holding Company Merger (other than
shares held directly by Crestar, which shall be canceled
without payment therefore and shares to be exchanged for
cash) shall, without any action by the holder thereof, be
converted into the number of shares of Crestar Common Stock
determined in accordance with subsection 2.1(b). All such
shares shall be validly issued, fully paid and
nonassessable.
(b) Exchange Ratio. Each share of American National
Common Stock (other than shares held directly by Crestar and
shares to be exchanged for cash) shall be converted into a
fraction of a share of Crestar Common Stock, determined in
accordance with the Exchange Ratio. The "Exchange Ratio"
shall be calculated as follows:
(i) if the Average Closing Price (as defined below) is
between $30 and $50, the Exchange Ratio shall be
the quotient (rounded to the nearest one-
thousandth) of (A) $20.25 (the "Common Stock Price
Per Share") divided by (B) the Average Closing
Price;
(ii) if the Average Closing Price is $50 or greater,
the Exchange Ratio shall be 0.405; and
(iii)if the Average Closing Price is $30 or less, the
Exchange Ratio shall be 0.675.
As used herein, "Average Closing Price" shall mean the
average closing price of Crestar Common Stock as reported on
the New York Stock Exchange for each of the 10 trading days
ending on the tenth day prior to the Effective Time of the
Holding Company Merger.
The Exchange Ratio at the Effective Time of the Holding
Company Merger shall be adjusted to reflect any
consolidation, split-up, other subdivisions or combinations
of Crestar Common Stock, any dividend payable in Crestar
Common Stock, or any capital reorganization involving the
reclassification of Crestar Common Stock subsequent to the
date of this Agreement.
(c) Cash Election. Holders of shares of American
National Common Stock will be given the option of exchanging
their shares for the Common Stock Price Per Share in cash
(subject to all applicable withholding taxes), provided that
in the aggregate the number of shares that may be exchanged
for cash shall not exceed 40% of the number of outstanding
shares of American National Common Stock immediately prior
to the Effective Time of the Holding Company Merger. The
cash election must be made at or prior to the time American
National shareholders vote on the Holding Company Merger,
and once such vote has been taken, cash elections shall be
irrevocable. If the aggregate number of shares for which a
cash election is made exceeds 40% of the outstanding shares
of American National Common Stock immediately prior to the
Effective Time of the Holding Company Merger, Crestar first
will pay cash for shares submitted for cash exchange by each
holder of 100 or fewer American National shares (if such
holder has submitted all his shares for cash exchange) and
then will pay cash for the remaining shares submitted for
cash pro rata. Shares not exchanged for cash after
proration will be exchanged for Crestar Common Stock at the
Exchange Ratio.
2.2. Manner of Exchange.
(a) Shareholders who elect to exchange some or all of
their shares of American National Common Stock for cash must
submit to American National certificates for the shares being
exchanged for cash at or prior to the meeting of American
National's shareholders referred to in Section 4.2. If the
Holding Company Merger is approved by American National's
shareholders at this meeting, a shareholder's election to receive
cash is irrevocable and American National will retain
certificates for shares submitted for cash purchase until either
(i) termination of this Agreement, upon which American National
will return such certificates, or (ii) the Effective Time of the
Holding Company Merger, when Xxxxx Xxxxxx Shareholder Services
(the "Exchange Agent") will exchange such certificates for cash
to the extent required by this Agreement and the Holding Company
Plan of Merger.
(b) After the Effective Time of the Holding Company
Merger, each holder of a certificate for theretofore outstanding
shares of American National Common Stock, upon surrender of such
certificate to the Exchange Agent (unless previously surrendered
to American National in connection with exercise of the cash
option), accompanied by a Letter of Transmittal, shall be
entitled to receive in exchange therefor the number of full
shares of Crestar Common Stock for which shares of American
National Common Stock shall have been exchanged or cash if
the cash option is properly elected, or a combination of Crestar
Common Stock and cash if the cash option is elected for part of a
holder's American National shares. In the event of proration, a
combination of cash and Crestar Common Stock shall be issued in
exchange for American National Common Stock. Until so
surrendered, each outstanding certificate which, prior to the
Effective Time of the Holding Company Merger, represented
American National Common Stock will be deemed to evidence the
right to receive either (i) the number of full shares of Crestar
Common Stock into which the shares of American National Common
Stock represented thereby may be converted in accordance with the
Exchange Ratio or (ii) the Common Stock Price Per Share
multiplied by the number of shares of American National Common
Stock represented by such certificate (subject to all applicable
withholding taxes) in cash if the cash option provided in
subsection 2.1(c) was properly elected by a holder of American
National Common Stock, or (iii) a combination thereof; and, after
the Effective Time of the Holding Company Merger (unless the cash
option was properly elected) will be deemed for all corporate
purposes of Crestar to evidence ownership of the number of full
shares of Crestar Common Stock into which the shares of American
National Common Stock represented thereby were converted.
(c) Until outstanding certificates formerly
representing American National Common Stock are surrendered in
exchange for Crestar Common Stock, no dividend payable to holders
of record of Crestar Common Stock for any period as of any date
subsequent to the Effective Time of the Holding Company Merger
shall be paid to the holder of such outstanding certificates in
respect thereof. After the Effective Time of the Holding Company
Merger, there shall be no further registry of transfer on the
records of American National of shares of American National
Common Stock. If a certificate representing such shares is
presented to Crestar, it shall be canceled and exchanged for a
certificate representing shares of Crestar Common Stock as herein
provided. Upon surrender of certificates of American National
Common Stock in exchange for Crestar Common Stock, there shall be
paid to the recordholder of the certificates of Crestar Common
Stock issued in exchange therefor (i) the amount of dividends
theretofore paid for such full shares of Crestar Common Stock as
of any date subsequent to the Effective Time of the Holding
Company Merger which have not yet been paid to a public official
pursuant to abandoned property laws and (ii) at the appropriate
payment date the amount of dividends with a record date after the
Effective Time of the Holding Company Merger but prior to
surrender and a payment date subsequent to surrender. No
interest shall be payable on such dividends upon surrender of
outstanding certificates.
(d) At the Effective Time of the Holding Company
Merger, each share of American National Common Stock held by
Crestar shall be canceled, retired and cease to exist.
(e) At the Effective Time of the Holding Company
Merger and as provided in the Holding Company Plan of Merger,
outstanding options to acquire American National Common Stock
that were granted under the 1993 Stock Option Plan for Outside
Directors, the 1993 Stock Incentive Plan, and the 1996 Stock
Option Plan ("American National Options," as defined in Section
3.1(j)(1) hereof), and which are identified on Schedule C, shall
be converted, based on the Exchange Ratio, into options to
acquire Crestar Common Stock ("Crestar Options"). The exercise
price per share of Crestar Common Stock under a Crestar Option
shall be equal to the exercise price per share of American
National Common Stock under the American National Option divided
by the Exchange Ratio (rounded up to the nearest cent). The
number of shares of Crestar Common Stock subject to a Crestar
Option shall be equal to the number of shares of American
National Common Stock subject to the American National Option
multiplied by the Exchange Ratio (rounded down to the nearest
whole share). Except as provided in the preceding sentences
regarding the price of, and number of shares of Crestar Common
Stock subject to a Crestar Option, the terms of the Crestar
Option shall be the same as the terms of the American National
Option.
(f) At the Effective Time of the Holding Company
Merger and as provided in the Holding Company Plan of Merger,
outstanding awards of restricted stock (including accumulated
dividends payable in stock, if any) that were granted under the
1993 Recognition and Retention Plan for Outside Directors, the
1993 Employees Recognition and Retention Plan, the 1996
Recognition and Retention Plan and any other restricted stock
award granted to an employee or director of American National or
Savings Bank ("American National Restricted Stock Awards" as
defined in Section 3.1(j)(1) hereof), and which are identified on
Schedule C, shall be converted, based on the Exchange Ratio, into
restricted awards of Crestar Common Stock equal to the number of
shares of American National Common Stock subject to the American
National Restricted Awards multiplied by the Exchange Ratio
(rounded down to the nearest whole share). Except as provided in
the preceding sentence, the terms of the American National
Restricted Stock Awards shall not be changed.
2.3. No Fractional Shares. No certificates or scrip for
fractional shares of Crestar Common Stock will be issued. In
lieu thereof, Crestar will pay the value of such fractional
shares in cash on the basis of the Average Closing Price.
2.4. Dissenting Shares. Holders of American National Common
Stock do not have the right to demand and receive payment of the
fair value of his shares of American National Common Stock in
accordance with the provisions of Section 262(b)(1) of the
Delaware General Corporation Law.
2.5. Assets. At the Effective Time of the Holding Company
Merger, the corporate existence of American National shall be
merged into and continued in Crestar as the Surviving Company.
At the Effective Time of the Bank Merger, the corporate existence
of Savings Bank shall be merged into and continued in Crestar
Bank as the Surviving Bank. All rights, franchises and interests
of American National and of Savings Bank in and to any type of
property and choses in action shall be transferred to and vested
in the Surviving Company or the Surviving Bank, as applicable, by
virtue of the Holding Company Merger and the Bank Merger without
any deed or other transfer. The Surviving Company or the
Surviving Bank, as applicable, without any order or other action
on the part of any court or otherwise, shall hold and enjoy all
rights of property, franchises and interests, including
appointments, designations and nominations, and all other rights
and interests as trustee, executor, administrator, transfer agent
or registrar of stocks and bonds, guardian of estates, assignee,
receiver and committee, and in every other fiduciary capacity, in
the same manner and to the same extent as such rights, franchises
and interests were held or enjoyed by American National or
Savings Bank at the Effective Time of the Holding Company Merger
and the Effective Time of the Bank Merger, respectively, as
provided in Section 13.1-721 of Virginia Stock Corporation Act
("VSCA") and Section 259 of the Delaware General Corporation Law
with respect to the Holding Company Merger and Section 6.1-44 of
the Virginia Banking Act ("VBA") with respect to the Bank Merger.
2.6. Liabilities. At the Effective Time of the Holding
Company Merger, the Surviving Company shall be liable for all
liabilities of American National, as provided in Section 13.1-721
of the VSCA. At the Effective Time of the Bank Merger, the
Surviving Bank shall be liable for all liabilities of Savings
Bank, as provided in Section 13.1-721 of the VSCA and Section
6.1-44 of the VBA. All deposits, debts, liabilities and
obligations of American National and Savings Bank, accrued,
absolute, contingent or otherwise, and whether or not reflected
or reserved against on balance sheets, books of accounts, or
records of American National or Savings Bank shall be those of
the Surviving Company or the Surviving Bank, respectively, and
shall not be released or impaired by the Holding Company Merger
or the Bank Merger. All rights of creditors and other obligees
and all liens on property of American National or of Savings Bank
shall be preserved unimpaired.
ARTICLE III
Representations and Warranties
3.1. Representations and Warranties of American National and
Savings Bank. American National and Savings Bank represent and
warrant to Crestar and Crestar Bank as follows:
(a) Organization, Standing and Power. American
National is a corporation duly organized, validly existing and in
good standing under the laws of Delaware and has all requisite
corporate power and authority to own, lease and operate its
properties and to carry on its business, as now being conducted
and to perform this Agreement and the Holding Company Plan of
Merger and to effect the transactions contemplated hereby and
thereby. American National has delivered to Crestar complete and
correct copies of (i) its Certificate of Incorporation and (ii)
its By-laws.
Savings Bank is a federal savings bank duly organized,
validly existing and in good standing under the laws of the
United States and has all requisite corporate power and authority
to own, lease and operate its properties and to carry on its
business as now being conducted and to perform this Agreement and
the Bank Plan of Merger and to effect the transactions
contemplated hereby and thereby. Savings Bank's deposits are
insured by the Savings Association Insurance Fund of the FDIC to
the maximum extent permitted by law. Savings Bank has delivered
to Crestar complete and correct copies of (i) its Charter and
(ii) its By-laws.
(b) Capital Structure. The authorized capital stock
of American National consists of 8,000,000 shares of American
National Common Stock, par value $0.01, and 1,000,000 shares of
serial preferred stock. On the date hereof, 3,613,011 shares of
American National Common Stock and no shares of preferred stock
were outstanding. All of the outstanding shares of American
National Common Stock were validly issued and are fully paid and
nonassessable.
The authorized capital stock of Savings Bank consists
of 20,000,000 shares of Common Stock and 10,000,000 shares of
Serial Preferred Stock. On the date hereof, 100 shares of
Savings Bank Common Stock were outstanding and all of such
outstanding shares were validly issued, fully paid and
nonassessable. No shares of Serial Preferred Stock are
outstanding. American National owns all of the issued and
outstanding Common Stock of Savings Bank free and clear of any
liens, claims, encumbrances, charges or rights of third parties
of any kind whatsoever.
Except as disclosed on Schedule C, American National
knows of no person who beneficially owns 5% or more of the
outstanding American National Common Stock as of the date hereof.
(c) Authority. Subject to the approval of this
Agreement and the Holding Company Plan of Merger by the
shareholders of American National as contemplated by Section 4.2,
the execution and delivery of this Agreement and the consummation
of the transactions contemplated hereby and by the Holding
Company Plan of Merger have been duly and validly authorized by
all necessary action on the part of American National, and this
Agreement is a valid and binding obligation of American National,
enforceable in accordance with its terms, except as
enforceability may be limited by laws affecting the enforcement
of creditors' rights generally and subject to any equitable
principles limiting the right to obtain specific performance.
The execution and delivery of this Agreement, the consummation of
the transactions contemplated hereby and by the Holding Company
Plan of Merger and compliance by American National with any of
the provisions hereof or thereof will not (i) except as disclosed
on Schedule O, conflict with or result in a breach of any
provision of its Certificate of Incorporation or By-laws or a
default (or give rise to any right of termination, cancellation
or acceleration) under any of the terms, conditions or provisions
of any note, bond, debenture, mortgage, indenture, license,
material agreement or other material instrument or obligation to
which American National is a party, or by which it or any of its
properties or assets may be bound, or (ii) violate any order,
writ, injunction, decree, statute, rule or regulation applicable
to American National or any of its properties or assets. No
consent or approval by any governmental authority, other than
compliance with applicable federal and state securities and
banking laws, and regulations of the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board"), the FDIC
and the Office of Thrift Supervision ("OTS"), is required in
connection with the execution and delivery by American National
of this Agreement or the consummation by American National of the
transactions contemplated hereby or by the Holding Company Plan
of Merger.
The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and by the
Bank Plan of Merger, as applicable, have been duly and validly
authorized by all necessary action on the part of Savings Bank,
and this Agreement is a valid and binding obligation of Savings
Bank, enforceable in accordance with its terms except as
enforceability may be limited by laws affecting insured
depository institutions and similar laws affecting the
enforcement of creditors' rights generally and subject to any
equitable principles limiting the right to obtain specific
performance. The execution and delivery of this Agreement, the
consummation of the transactions contemplated
hereby and by the Bank Plan of Merger, as applicable, and
compliance by Savings Bank with any of the provisions hereof will
not (i) except as disclosed on Schedule O, conflict with or
result in a breach of any provision of its Charter or By-laws or
a default (or give rise to any right of termination, cancellation
or acceleration) under any of the terms, conditions or provisions
of any note, bond, debenture, mortgage, indenture, license,
material agreement or other material instrument or obligation to
which Savings Bank is a party, or by which it or any of its
properties or assets may be bound, or (ii) violate any order,
writ, injunction, decree, statute, rule or regulation applicable
to Savings Bank or any of its properties or assets. No consent
or approval by any governmental authority, other than compliance
with applicable federal and state banking laws, and regulations
of the Federal Reserve Board, the FDIC and the OTS, is required
in connection with the execution and delivery by Savings Bank of
this Agreement or the consummation by Savings Bank of the
transactions contemplated hereby or by the Bank Plan of Merger.
(d) Investments. All securities owned by American
National and Savings Bank of record and beneficially are free and
clear of all mortgages, liens, pledges, encumbrances or any other
restriction, whether contractual or statutory, which would
materially impair the ability of American National or Savings
Bank freely to dispose of any such security at any time, except
as noted on Schedule A-1. Any securities owned of record by
American National and Savings Bank in an amount equal to 5% or
more of the issued and outstanding voting securities of the
issuer thereof have been noted on such Schedule A-1. There are
no voting trusts or other agreements or undertakings of which
American National or Savings Bank is a party with respect to the
voting of such securities. With respect to all repurchase
agreements to which American National or Savings Bank is a party,
American National or Savings Bank has a valid, perfected first
lien or security interest in the government securities or other
collateral securing the repurchase agreement, and the value of
the collateral securing each such repurchase agreement equals or
exceeds the amount of the debt secured by such collateral under
such agreement.
(e) Financial Statements. Schedule A-2 contains
copies of the following financial statements of American National
(the "American National Financial Statements"):
(i) Consolidated Statements of Financial
Condition as of July 31, 1996 and 1995 (audited) and as of April
30, 1997 (unaudited);
(ii) Consolidated Statements of Operations for
each of the three years ended July 31, 1996, 1995 and 1994
(audited) and the three months and nine months ended April 30,
1997 and 1996 (unaudited);
(iii) Consolidated Statements of Changes in
Stockholders' Equity for each of the three years ended July 31,
1996, 1995 and 1994 (audited) and nine months ended April 30,
1997 (unaudited); and
(iv) Consolidated Statements of Cash Flows for
each of the three years ended July 31, 1996, 1995 and 1994
(audited) and the nine months ended April 30, 1997 and 1996
(unaudited).
Such financial statements and the notes thereto have been
prepared in accordance with generally accepted accounting
principles applied on a consistent basis throughout the periods
indicated unless otherwise noted in the American National
Consolidated Financial Statements. Each of such consolidated
statements of financial condition, together with the notes
thereto, presents fairly as of its date (subject in the case of
unaudited interim financial statements to normal year end
adjustments) the consolidated financial condition and assets and
liabilities of American National. The consolidated statements of
operations, changes in stockholders' equity and cash flows,
together with the notes thereto, present fairly the results of
consolidated operations, consolidated changes in stockholders'
equity and consolidated cash flows of American National or
Savings Bank for the periods indicated in accordance with
generally accepted accounting principles ("GAAP").
Except as disclosed in the American National Financial
Statements, and in the case of Savings Bank, compliance with and
subject to the requirements of 12 C.F.R. Section 563.134, there
are no restrictions precluding American National or Savings Bank
from paying dividends when, as and if declared by their
respective Boards of Directors.
(f) Absence of Undisclosed Liabilities. At July 31,
1996 and April 30, 1997, American National had no material
obligations or liabilities (contingent or otherwise) of any
nature which were not reflected in the American National
Financial Statements or in the American National periodic reports
filed with the Securities and Exchange Commission ("SEC") under
the Securities Exchange Act of 1934 (the "1934 Act") as of such
dates, or disclosed in the notes thereto, except for those which
are disclosed in Schedules specifically referred to herein or
which in the aggregate are immaterial.
(g) Tax Matters. Savings Bank and all other
subsidiaries of American National are members of the same
"affiliated group," as defined in Section 1504(a)(1) of the Code,
as American National (collectively, the "American National
Group"). Each member of the American National Group has filed or
caused to be filed or (in the case of returns or reports not yet
due) will file all tax returns and reports required to have been
filed by or for them before the Effective
Time of the Holding Company Merger, and all information set forth
in such returns or reports is or (in the case of such returns or
reports not yet due) will be accurate and complete in all
material respects. Each member of the American National Group
has paid or made adequate provision for, or (with respect to
returns or reports not yet filed) before the Effective Time of
the Holding Company Merger will pay or make adequate provision
for, all taxes, additions to tax, penalties, and interest for all
periods covered by those returns or reports. There are, and at
the Effective Time of the Holding Company Merger will be, no
unpaid taxes, additions to tax, penalties, or interest due and
payable by any member of the American National Group that are or
could become a lien on any asset, or otherwise materially
adversely affect the business, property or financial condition,
of any member of the American National Group except for taxes and
any such related liability being contested in good faith and
disclosed in Schedule B. Each member of the American National
Group has collected or withheld, or will collect or withhold
before the Effective Time of the Holding Company Merger, all
amounts required to be collected or withheld by it for any taxes,
and all such amounts have been, or before the Effective Time of
the Holding Company Merger will have been, paid to the
appropriate governmental agencies or set aside in appropriate
accounts for future payment when due. Each member of the
American National Group is in material compliance with, and its
records contain all information and documents (including, without
limitation, properly completed IRS Forms W-9) necessary to comply
in all material respects with, all applicable information
reporting and tax withholding requirements under federal, state,
and local laws, rules, and regulations, and such records identify
with specificity all accounts subject to backup withholding under
Section 3406 of the Code. The consolidated statements of
financial condition contained in the American National Financial
Statements fully and properly reflect, as of the dates thereof,
the aggregate liabilities of the members of the American National
Group for all accrued taxes, additions to tax, penalties and
interest in accordance with GAAP. For periods ending after July
31, 1996, the books and records of each member of the American
National Group fully and properly reflect their liability for all
accrued taxes, additions to tax, penalties and interest in
accordance with GAAP. Except as disclosed in Schedule B, no
member of the American National Group has granted (nor is it
subject to) any waiver of the period of limitations for the
assessment of tax for any currently open taxable period, and no
unpaid tax deficiency has been asserted in writing against or
with respect to any member of the American National Group by any
taxing authority. No member of the American National Group has
made or entered into, or holds any asset subject to, a consent
filed pursuant to Section 341(f) of the Code and the regulations
thereunder or a "safe harbor lease" subject to former Section
168(f)(8) of the Code and the regulations thereunder. Schedule B
describes all tax elections, consents and agreements affecting
any member of the American National Group. To the best knowledge
of American
National, no American National shareholder is a "foreign person"
for purposes of Section 1445 of the Code.
(h) Options, Warrants and Related Matters. There are
no outstanding unexercised options, warrants, calls, commitments
or agreements of any character to which American National or
Savings Bank is a party or by which it is bound, calling for the
issuance of securities of American National or Savings Bank or
any security representing the right to purchase or otherwise
receive any such security, except (i) as set forth on Schedule C
and (ii) the Option Agreement.
(i) Property. American National and Savings Bank own
(or enjoy use of under capital or operating leases) all property
reflected on the American National Financial Statements as of
July 31, 1996 (except property sold or otherwise disposed of in
the ordinary course of business). All property shown as being
owned is owned free and clear of all mortgages, liens, pledges,
charges or encumbrances of any nature whatsoever, except those
referred to in such American National Financial Statements or the
notes thereto, liens for current taxes not yet due and payable,
any unfiled mechanics' liens and such encumbrances and
imperfections of title, if any, as are not substantial in
character or amount or otherwise materially impair American
National's consolidated business operations. The leases relating
to leased property are fairly reflected in such American National
Financial Statements.
Except for Other Real Estate Owned ("OREO"), all
property and assets material to the business or operations of
American National and Savings Bank are in substantially good
operating condition and repair and such property and assets are
adequate for the business and operations of American National and
Savings Bank as currently conducted.
(j) Additional Schedules Furnished to Crestar. In
addition to any Schedules furnished to Crestar pursuant to other
provisions of this Agreement, American National has furnished to
Crestar the following Schedules which are correct and complete as
of the date hereof:
(1) Employees. Schedule C lists as of the date
hereof (A) the names of and current annual salary rates for all
present employees of American National and Savings Bank who
received, respectively, $80,000 or more in aggregate
compensation, whether in salary or otherwise as reported or would
be reported on Form W-2, during the year ended July 31, 1996, or
are presently scheduled to receive salary in excess of $60,000
during the year ending July 31, 1997; (B) the number of shares of
American National Common Stock owned beneficially by each
director
and five highest compensated officers of American National or
Savings Bank as of the date hereof, (C) the names of and the
number of shares of American National Common Stock owned by each
person known to American National who beneficially owns 5% or
more of the outstanding American National Common Stock as of the
date hereof, (D) each agreement to make stock awards granted to
each person under the 1996 Stock Option Plan or any option
granted to a director of American National or Savings Bank
(collectively, "American National Options") naming the grantee,
the number of outstanding options he owns, and the exercise price
of each such American National Option and (E) the names of the
recipients, the number of outstanding shares of restricted stock
(and accumulated dividends payable in stock, if any), and the
vesting date or dates for each American National Restricted Stock
Award.
(2) Certain Contracts. Schedule D lists all
notes, bonds, mortgages, indentures, licenses, lease agreements
and other contracts and obligations to which American National or
Savings Bank is an indebted party or a lessee, licensee or
obligee as of the date hereof except (i) for those entered into
by American National or Savings Bank in the ordinary course of
its business consistent with its prior practice and (ii) that do
not involve an amount remaining greater than $100,000.
(3) Employment Contracts and Related Matters.
Except in all cases as set forth on Schedule E, neither American
National nor Savings Bank is a party to any employment contract
not terminable at the option of American National or Savings Bank
without liability. Except in all cases as set forth on Schedule
E, neither American National nor Savings Bank is a party to
(A) any retirement, profit sharing or pension plan or thrift plan
or agreement or employee benefit plan (as defined in Section 3 of
the Employee Retirement Income Security Act of 1974 ("ERISA")),
(B) any management or consulting agreement not terminable at the
option of American National or Savings Bank without liability or
(C) any union or labor agreement.
(4) Real Estate. Schedule F describes, as of the
date hereof, all interests in real property owned, leased or
otherwise claimed by American National and Savings Bank,
including OREO.
(5) Affiliates. Schedule G sets forth the names
and number of shares of American National Common Stock owned as
of the date hereof beneficially or of record by any persons
American National considers to be affiliates of American National
("American National Affiliates") as that
term is defined for purposes of Rule 145 under the Securities Act
of 1933 (the "1933 Act").
(k) Agreements in Force and Effect. All contracts,
agreements, plans, leases, policies and licenses referred to in
any Schedule of American National or Savings Bank referred to
herein are valid and in full force and effect, and neither
American National nor Savings Bank has breached any provision of,
nor is in default in any respect under the terms of, any such
contract, agreement, lease, policy or license, the effect of
which breach or default would have a material adverse effect upon
either the financial condition, results of operations, or
business of American National on a consolidated basis.
(l) Legal Proceedings; Compliance with Laws. Schedule
H describes all legal, administrative, arbitration or other
proceeding or governmental investigation known to American
National or Savings Bank pending or, to the knowledge of American
National's and Savings Bank's management, threatened or probable
of assertion against American National or Savings Bank. Except
as set forth on Schedule H, no such proceeding or investigation,
if decided adversely, would have a material adverse effect on
either the financial condition, results of operations or business
of American National on a consolidated basis. Except as set
forth in Schedule H, American National and Savings Bank have
complied in all material respects with any laws, ordinances,
requirements, regulations or orders applicable to its business
except where noncompliance would not have a material adverse
effect on either the financial condition, results of operations
or business of American National on a consolidated basis.
American National and Savings Bank have all licenses, permits,
orders or approvals (collectively, the "Permits") of any federal,
state, local or foreign governmental or regulatory body that are
necessary for the conduct of its business and the absence of
which would have a material adverse effect on the financial
condition, results of operations or business of American National
on a consolidated basis; the Permits are in full force and
effect; no violations are or have been recorded in respect of any
Permits nor has American National or Savings Bank received
written notice of any violations; and no proceeding is pending
or, to the knowledge of American National and Savings Bank,
threatened to revoke or limit any Permit. Except as set forth in
Schedule H, neither American National nor Savings Bank has
entered into any agreements or written understandings with the
Federal Reserve Board, the OTS, the FDIC or any other regulatory
agency having authority over it. Neither American National nor
Savings Bank is subject to any judgment, order, writ, injunction
or decree which materially adversely affects, or might reasonably
be expected materially adversely to affect either the financial
condition, results of operations, or business of American
National on a consolidated basis.
(m) Employee Benefit Plans.
(1) Schedule E includes a correct and complete
list of, and Crestar has been furnished a true and correct copy
of (or an accurate written description thereof in the case of
oral agreements or arrangements) (A) all qualified pension and
profit-sharing plans, all deferred compensation, consultant,
severance, thrift, option, bonus and group insurance contracts
and all other incentive, welfare and employee benefit plans,
trust, annuity or other funding agreements, and all other
agreements (including oral agreements) that are presently in
effect, or have been approved prior to the date hereof,
maintained for the benefit of employees or former employees of
American National or Savings Bank or the dependents or
beneficiaries of any employee or former employee of American
National or Savings Bank, whether or not subject to ERISA (the
"Employee Plans"), (B) the most recent actuarial and financial
reports prepared or required to be prepared with respect to any
Employee Plan and (C) the most recent annual reports filed with
any governmental agency, the most recent favorable determination
letter issued by the Internal Revenue Service, and any open
requests for rulings or determination letters, that pertain to
any such Employee Plan that is intended to be qualified under
Section 401(c) of the Code. Schedule E identifies each Employee
Plan that is intended to be qualified under Section 401(a) of the
Code and each such plan is qualified.
(2) Neither American National, Savings Bank nor
any employee pension benefit plan (as defined in Section 3(2) of
ERISA (a "Pension Plan")) maintained or previously maintained by
it, has incurred any material liability to the Pension Benefit
Guaranty Corporation ("PBGC") or to the Internal Revenue Service
with respect to any Pension Plan. There is not currently pending
with the PBGC any filing with respect to any reportable event
under Section 4043 of ERISA nor has any reportable event occurred
as to which a filing is required and has not been made.
(3) Full payment has been made (or proper
accruals have been established) of all contributions which are
required for periods prior to the Closing Date, as defined in
Section 6.1 hereof, under the terms of each Employee Plan, ERISA,
or a collective bargaining agreement, no accumulated funding
deficiency (as defined in Section 302 of ERISA or Section 412 of
the Code) whether or not waived, exists with respect to any
Pension Plan (including any Pension Plan previously maintained by
American National or Savings Bank), and except as set forth on
Schedule
E, there is no "unfunded current liability" (as defined in
Section 412 of the Code) with respect to any Pension Plan.
(4) No Employee Plan is a "multiemployer plan"
(as defined in Section 3(37) of ERISA). Neither American
National nor Savings Bank has incurred any liability under
Section 4201 of ERISA for a complete or partial withdrawal from a
multi-employer plan (as defined in Section 3(37) of ERISA).
Neither American National nor Savings Bank has participated in or
agreed to participate in, a multiemployer plan (as defined in
Section 3(37) of ERISA).
(5) All Employee Plans that are "employee benefit
plans," as defined in Section 3(3) of ERISA, that are maintained
by American National or Savings Bank or previously maintained by
American National or Savings Bank comply and have been
administered in compliance in all material respects with ERISA
and all other applicable legal requirements, including the terms
of such plans, collective bargaining agreements and securities
laws. Neither American National nor Savings Bank has any
material liability under any such plan that is not reflected in
the American National Financial Statements or on Schedule E
hereto.
(6) Except as set forth on Schedule E, no
prohibited transaction has occurred with respect to any Employee
Plan that is an "employee benefit plan" (as defined in Section
3(3) of ERISA) maintained by American National or Savings Bank or
previously maintained by American National or Savings Bank that
would result, directly or indirectly, in material liability under
ERISA or in the imposition of a material excise tax under Section
4975 of the Code.
(7) Schedule E identifies each Employee Plan that
is an "employee welfare benefit plan" (as defined in Section 3(1)
of ERISA) and its funding status, whether through insurance, a
trust, or from an employee's general assets. The funding under
each such plan does not exceed the limitations under Section
419A(b) or 419A(c) of the Code. Neither American National nor
Savings Bank is subject to taxation on the income of any such
plan or any such plan previously maintained by American National
or Savings Bank.
(8) Schedule E identifies the method of funding
(including any individual accounting) for all post-retirement
medical or life insurance benefits for the employees of American
National and Savings Bank. Schedule E also discloses the funded
status of these Employee Plans.
(9) Schedule E identifies each corporate owned
life insurance policy, including any key man insurance policy and
policy insuring the life of any director or employee of American
National or Savings Bank, and indicates for each such policy, the
face amount of coverage, cash surrender value, if any, and annual
premiums.
(10) No trade or business is, or has ever been,
treated as a single employer with American National or Savings
Bank for employee benefit purposes under ERISA and the Code.
(n) Insurance. All policies or binders of fire,
liability, product liability, workmen's compensation, vehicular
and other insurance held by or on behalf of American National or
Savings Bank are described on Schedule I and are valid and
enforceable in accordance with their terms, are in full force and
effect, and are deemed appropriate and sufficient by American
National and Savings Bank. Neither American National nor Savings
Bank is in default in any material respect with respect to any
provision contained in any such policy or binder and has not
failed to give any notice or present any claim under any such
policy or binder in due and timely fashion. Neither American
National nor Savings Bank has received notice of cancellation or
non-renewal of any such policy or binder. Neither American
National nor Savings Bank has knowledge of any material
inaccuracy in any application for such policies or binders, any
failure to pay premiums when due or any similar state of facts
that might form the basis for termination of any such insurance.
Neither American National nor Savings Bank has knowledge of any
state of facts or of the occurrence of any event that is
reasonably likely to form the basis for any material claim
against it not fully covered (except to the extent of any
applicable deductible) by the policies or binders referred to
above. Neither American National nor Savings Bank has received
notice from any of its insurance carriers that any insurance
premiums will be materially increased in the future or that any
such insurance coverage will not be available in the future on
substantially the same terms as now in effect.
(o) Loan Portfolio. Each loan outstanding on the
books of American National and Savings Bank is in all respects
what it purports to be, was made in the ordinary course of
business, was not known to be uncollectible at the time it was
made, accrues interest (except for loans recorded on Savings
Bank's books as non-accrual) in accordance with the terms of the
loan, and with respect to loans originated by Savings Bank was
made in accordance with Savings Bank's standard loan policies as
in effect at the time in all material respects the loan was
negotiated except for loans to facilitate the sale of OREO or
loans with renegotiated terms and conditions. The records of
Savings Bank regarding all loans outstanding and OREO by Savings
Bank on its books are accurate in all material respects and the
risk classifications for the loans outstanding are, in the best
judgment of the management of American National and Savings Bank,
appropriate. The reserves for possible loan losses on the
outstanding loans of Savings Bank, as reflected in the American
National Financial Statements, have been established in
accordance with generally accepted accounting principles and with
the requirements of the OTS and the FDIC. In the best judgment
of the management of American National and Savings Bank, such
reserves are adequate as of the date hereof and will be adequate
as of the Effective Time of the Holding Company Merger to absorb
all known and anticipated loan losses in the loan portfolio of
Savings Bank. Except as identified on Schedule J, no loan in
excess of $50,000 has been classified by examiners (regulatory or
internal) as "Special Mention", "Substandard", "Doubtful",
"Loss", or words of similar import. Except as disclosed on
Schedule F, the OREO included in any nonperforming asset of
Savings Bank is recorded at the lower of cost or fair value less
estimated costs to sell based on independent appraisals that
comply with the requirements of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989 and Uniform
Standards of Professional Appraisal Practice. Except as
identified on Schedule J, to the best knowledge of the management
of American National and Savings Bank, each loan reflected as an
asset on the American National Financial Statements is the legal,
valid and binding obligation of the obligor and any guarantor,
subject to bankruptcy, insolvency, fraudulent conveyance and
other laws of general applicability relating to or affecting
creditors' rights and to general principles of equity, and no
defense, offset or counterclaim has been asserted with respect to
any such loan, which if successful would have a material adverse
effect on the financial condition, results of operation or
business of American National on a consolidated basis.
(p) Absence of Changes. Except as identified on
Schedule K, since April 30, 1997, there has not been any material
adverse change in the aggregate assets or liabilities, earnings
or business of American National, other than changes resulting
from or attributable to (i) changes since such date in laws or
regulations, generally accepted accounting principles or
interpretations of either thereof that affect the banking or
savings and loan industries generally, (ii) changes since such
date in the general level of interest rates, (iii) expenses
including brokers' and finders' fees disclosed in subsection
3.1(q) since such date incurred or to be incurred in connection
with the transactions contemplated by this Agreement (estimated
at $850,000), (iv) accruals and reserves incurred or to be
incurred by American National or Savings Bank since such date
pursuant to the terms of Section 4.8 hereof, or (v) any other
accruals, reserves or expenses incurred or to be incurred by
American National or Savings Bank since such date with Crestar's
prior written consent. Since July 31, 1996, the business of
American National has been conducted only in the ordinary course.
(q) Brokers and Finders. Neither American National,
Savings Bank nor any of their officers, directors or employees
have employed any broker or finder or incurred any liability for
any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated herein except for the
engagement of Xxxxx, Xxxxxxxx & Xxxxx, Inc., whose fee for its
engagement shall not exceed approximately $390,000, excluding
out-of-pocket expenses.
(r) Subsidiaries; Partnerships and Joint Ventures.
American National's only subsidiaries, direct or indirect, other
than Savings Bank, are set forth in Schedule N. Such
corporations are duly organized, validly existing and in good
standing under the laws of their jurisdiction of incorporation
and have all requisite corporate power and authority to own,
lease and operate their properties and to carry on their business
as now being conducted in all material respects. American
National owns, directly or indirectly, all of the issued and
outstanding common stock of its subsidiaries free and clear of
any liens, claims, encumbrances, charges or rights of third
parties of any kind whatsoever and is not a party to any joint
venture agreement or partnership except as set forth in Schedule
N.
(s) Reports. Since January 1, 1992, American National
and Savings Bank have filed all material reports and statements,
together with any amendments required to be made with respect
thereto, that were required to be filed with (i) the Federal
Reserve Board, (ii) the FDIC, (iii) the OTS, (iv) the SEC and
(v) any other governmental or regulatory authority or agency
having jurisdiction over their operations. Each of such reports
and documents, including the financial statements, exhibits and
schedules thereto, filed with the SEC pursuant to the 1934 Act
was in form and substance in compliance in all material respects
with the 1934 Act. No such report or statement, or any
amendments thereto, contains any statement which, at the time and
in light of the circumstances under which it was made, was false
or misleading with respect to any material fact necessary in
order to make the statements contained therein not false or
misleading. American National is a reporting company under
Section 12(g) or 15(d) of the 1934 Act and the regulations of the
SEC.
(t) Environmental Matters. For purposes of this
subsection, the following terms shall have the indicated meaning:
"Environmental Law" means any federal, state or local
law, statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, judgment, decree,
injunction or agreement with any governmental entity relating to
(i) the protection, preservation or restoration of the
environment (including, without limitation, air, water vapor,
surface water, groundwater, drinking water supply, surface soil,
subsurface soil, plant and animal life or any
other natural resource), and/or (ii) the use, storage, recycling,
treatment, generation, transportation, processing, handling,
labeling, production, release or disposal of Hazardous
Substances. The term "Environmental Law" includes without
limitation (i) the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C.
Section 9601, et seq; the Resource Conservation and Recovery Act,
as amended, 42 U.S.C. Section 6901, et seq; the Clean Air Act, as
amended, 42 U.S.C. Section 7401, et seq; the Federal Water
Pollution Control Act, as amended, 33 U.S.C. Section 1251, et
seq; the Toxic Substances Control Act, as amended, 15 U.S.C.
Section 9601, et seq; the Emergency Planning and Community Right
to Know Act, 42 U.S.C. Section 11001, et seq; the Safe Drinking
Water Act, 42 U.S.C. Section 300f, et seq; and all comparable
state and local laws, and (ii) any common law (including without
limitation common law that may impose strict liability) that may
impose liability or obligations for injuries or damages due to,
or threatened as a result of, the presence of or exposure to any
Hazardous Substance.
"Hazardous Substance" means any substance presently
listed, defined, designated or classified as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, under any
Environmental Law, whether by type or by quantity, including any
material containing any such substance as a component. Hazardous
Substances include without limitation petroleum or any derivative
or by-product thereof, asbestos, radioactive material, and
polychlorinated biphenyls.
"Loan Portfolio Properties and Other Properties Owned"
means those properties owned or operated by American National or
Savings Bank or any of their subsidiaries, including those
properties serving as collateral for any loans made and retained
by American National or Savings Bank or for which American
National or Savings Bank serves in a trust relationship for the
loans retained in portfolio.
Except as disclosed in Schedule L, to the best
knowledge of American National and Savings Bank,
(i) Neither American National nor Savings Bank
has been or is in violation of or liable under any Environmental
Law;
(ii) none of the Loan Portfolio Properties and
Other Properties Owned has been or is in violation of or liable
under any Environmental Law; and
(iii) there are no actions, suits, demands,
notices, claims, investigations or proceedings pending or
threatened relating to the liability
of the Loan Portfolio Properties and Other Properties Owned under
any Environmental Law, including without limitation any notices,
demand letters or requests for information from any federal or
state environmental agency relating to any such liabilities under
or violations of Environmental Law.
(u) Disclosure. Except to the extent of any
subsequent correction or supplement with respect thereto
furnished prior to the date hereof, no written statement,
certificate, schedule, list or other written information
furnished by or on behalf of American National at any time to
Crestar, in connection with this Agreement, when considered as a
whole, contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact
necessary in order to make the statements herein or therein, in
light of the circumstances under which they were made, not
misleading. Each document delivered or to be delivered by
American National to Crestar is or will be a true and complete
copy of such document, unmodified except by another document
delivered by American National.
(v) Accounting; Tax; Regulatory Matters. Subject to
action taken by the Board of Directors of American National
pursuant to or as a result of the exception clause to the first
sentence of Section 4.4 hereof, American National has not taken
or agreed to take any action or has any knowledge of any fact or
circumstance that would prevent the Holding Company Merger or
the Bank Merger from qualifying as a reorganization within the
meaning of Section 368 of the Code, or materially impede or delay
receipt of any approval referred to in Section 4.6.
(w) Regulatory Approvals. Neither American National
nor Savings Bank knows of any reason why the approvals, consents
and waivers of governmental authorities referred to in Sections
5.1(f) and 5.2(e) hereof should not be obtained on a timely basis
without the imposition of any condition of the type referred to
in Section 5.1(f) hereof.
3.2. Representations and Warranties of Crestar and Crestar
Bank. Crestar and Crestar Bank represent and warrant to American
National and Savings Bank as follows:
(a) Organization, Standing and Power. Crestar is a
corporation duly organized, validly existing and in good standing
under the laws of Virginia and has all requisite corporate power
and authority to own, lease and operate its properties and to
carry on its business as now being conducted. Crestar has
delivered to American National complete and correct copies of its
Articles of Incorporation and all amendments thereto to the date
hereof and its By-laws as amended to the date
hereof. Crestar Bank is a banking corporation duly organized,
validly existing and in good standing under the laws of Virginia
and has all requisite corporate power and authority to own, lease
and operate its properties and to carry on its business as now
being conducted.
(b) Capital Structure. The authorized capital stock
of Crestar consists of 200,000,000 shares of Common Stock and
2,000,000 shares of Preferred Stock, of which 110,299,785 shares
of Common Stock and no shares of Preferred Stock were issued and
outstanding as of March 31, 1997. All of such issued and
outstanding shares of Crestar Common Stock were validly issued,
fully paid and nonassessable at such date.
The authorized capital stock of Crestar Bank consists
of 2,500,000 shares of common stock, $100 par value, of which
1,725,721 shares were issued and outstanding as of March 31,
1997. All of such shares are owned by Crestar free and clear of
any liens, claims, encumbrances, charges or rights of third
parties of any kind whatsoever. All such issued and outstanding
shares of common stock of Crestar Bank were validly issued, fully
paid and nonassessable.
(c) Authority. The execution and delivery of this
Agreement and the consummation of the transactions contemplated
hereby have been duly and validly authorized by all necessary
action on the part of Crestar; and this Agreement is a valid and
binding obligation of Crestar, enforceable in accordance with its
terms. The execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby and
compliance by Crestar with any of the provisions hereof will not
(i) conflict with or result in a breach of any provision of its
Articles of Incorporation or By-laws or a default (or give rise
to any right of termination, cancellation or acceleration) under
any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, license, agreement or other instrument or
obligation to which Crestar is a party, or by which it or any of
its properties or assets may be bound or (ii) violate any order,
writ, injunction, decree, statute, rule or regulation applicable
to Crestar or any of its properties or assets. No consent or
approval by any governmental authority, other than compliance
with applicable federal and state securities and banking laws,
the rules of the New York Stock Exchange and regulations of the
Federal Reserve Board, the OTS, the FDIC, the Maryland Bank
Commissioner, and the Bureau of Financial Institutions of the
State Corporation Commission of Virginia ("SCC") is required in
connection with the execution and delivery by Crestar of this
Agreement or the consummation by Crestar of the transactions
contemplated hereby or by the Holding Company Plan of Merger.
The execution and delivery of this Agreement and the
consummation of the transactions contemplated hereby and by the
Bank Plan of Merger have been duly and validly authorized by all
necessary action on the part of Crestar Bank, and this Agreement
is a valid and binding obligation of Crestar Bank, enforceable in
accordance with its terms. The execution and delivery of this
Agreement, the consummation of the transactions contemplated
hereby and by the Bank Plan of Merger and compliance by Crestar
Bank with any of the provisions hereof or thereof will not
(i) conflict with or result in a breach of any provision of its
Articles of Incorporation or By-laws or a default (or give rise
to any right of termination, cancellation or acceleration) under
any of the terms, conditions or provisions of any note, bond,
mortgage, indenture, license, agreement or other instrument or
obligation to which Crestar Bank is a party, or by which it or
any of its properties or assets may be bound, or (ii) violate any
order, writ, injunction, decree, statute, rule or regulation
applicable to Crestar Bank or any of its properties or assets.
No consent or approval by any government authority, other than
compliance with applicable federal and state securities and
banking laws, and regulations of the Federal Reserve Board, the
OTS, the FDIC and the SCC, is required in connection with the
execution and delivery by Crestar Bank of this Agreement or the
consummation by Crestar Bank of the transactions contemplated
hereby or by the Bank Plan of Merger.
(d) Financial Statements. Crestar has on or prior to
the date hereof delivered to American National copies of the
following consolidated financial statements of Crestar (the
"Crestar Financial Statements"):
(i) Consolidated Balance Sheets as of December
31, 1996 and 1995 (audited) and as of March 31, 1997 and 1996
(unaudited);
(ii) Consolidated Income Statements for each of
the three years ended December 31, 1996, 1995, and 1994 (audited)
and the three months ended March 31, 1997 and 1996 (unaudited);
(iii) Consolidated Statements of Changes in
Shareholders' Equity for each of the three years ended December
31, 1996, 1995 and 1994 (audited) and the three months ended
March 31, 1997 (unaudited); and
(iv) Consolidated Statements of Cash Flows for
each of the three years ended December 31, 1996, 1995 and 1994
(audited) and the three months ended March 31, 1997 and 1996
(unaudited).
Such consolidated financial statements and the notes thereto have
been prepared in accordance with generally accepted accounting
principles applied on a consistent
basis throughout the periods indicated unless otherwise noted in
the Crestar Financial Statements. Each of such consolidated
balance sheets, together with the notes thereto, presents fairly
as of its date (subject in the case of unaudited interim
financial statements to normal year end adjustments) the
financial condition and assets and liabilities of Crestar. The
consolidated income statements, statements of changes in
shareholders' equity and statements of cash flows, together with
the notes thereto, present fairly the results of operations,
shareholders' equity and cash flows of Crestar for the periods
indicated.
Except as disclosed in the Crestar Financial
Statements, there are no restrictions precluding Crestar or
Crestar Bank from paying dividends when, as and if declared by
their respective Board of Directors.
(e) Absence of Undisclosed Liabilities. At March 31,
1997 and December 31, 1996, Crestar and its consolidated
subsidiaries had no material obligations or liabilities,
(contingent or otherwise) of any nature which were not reflected
in the Crestar Financial Statement as of such dates, or disclosed
in the notes thereto, except for those which are disclosed in
Schedules specifically referred to herein or which in the
aggregate are immaterial.
(f) Absence of Changes. Since March 31, 1997, there
has not been any material adverse change in the condition
(financial or otherwise), aggregate assets or liabilities,
earnings or business of Crestar, other than changes resulting
from or attributable to (i) changes since such date in laws or
regulations, generally accepted accounting principles or
interpretations of either thereof that affect the banking or
savings and loan industries generally, (ii) changes since such
date in the general level of interest rates, and (iii) expenses
since such date incurred in connection with the transactions
contemplated by this Agreement. Since March 31, 1997 the
business of Crestar has been conducted only in the ordinary
course.
(g) Brokers and Finders. Neither Crestar, Crestar
Bank nor any of their respective officers, directors or employees
has employed any broker or finder or incurred any liability for
any brokerage fees, commissions or finders' fees in connection
with the transactions contemplated herein.
(h) Subsidiaries. Crestar's first-tier subsidiaries
are Crestar Bank, Crestar Insurance Agency, Inc., and Crestar
Securities Corporation. Such corporations are duly organized,
validly existing and in good standing under the laws of their
respective jurisdictions of incorporation and have all requisite
corporate power and authority to own, lease and operate their
properties and to carry on their business as now being conducted
in all material respects. As of the date hereof, Crestar and
Crestar Bank (other than in a fiduciary capacity) do not
own directly or indirectly, or have any rights to acquire, any
shares of American National Common Stock, other than pursuant to
the Option Agreement.
(i) Reports. Since January 1, 1992, Crestar has filed
all material reports and statements, together with any amendments
required to be made with respect thereto, that were required to
be filed with (i) the Federal Reserve Board, (ii) the FDIC, (iii)
the SCC, (iv) the SEC and (v) any other governmental or
regulatory authority or agency having jurisdiction over their
operations. Each of such reports and documents, including the
financial statements, exhibits and schedules thereto, filed with
the SEC pursuant to the 1934 Act was in form and substance in
compliance with the 1934 Act. No such report or statement, or
any amendments thereto, contains any statement which, at the time
and in light of the circumstances under which it was made, was
false or misleading with respect to any material fact necessary
in order to make the statements contained therein not false or
misleading.
(j) Tax Matters. Each of Crestar, Crestar Bank, and
all other corporations that are members of the same "affiliated
group," as defined in Section 1504(a)(1) of the Code, as Crestar
(collectively, the "Crestar Group") has filed or caused to be
filed or (in the case of returns or reports not yet due) will
file all tax returns and reports required to have been filed by
or for it before the Effective Time of the Holding Company
Merger. Each member of the Crestar Group has paid or made
adequate provision for or (with respect to returns or reports not
yet filed) before the Effective Time of the Holding Company
Merger will pay or make adequate provision for all taxes,
additions to tax, penalties, and interest for all periods covered
by those returns or reports. The consolidated balance sheets
contained in the Crestar Financial Statements fully and properly
reflect, as of the dates thereof, the aggregate liabilities of
the members of the Crestar Group for all accrued taxes, additions
to tax, penalties and interest in accordance with GAAP. For
periods ending after December 31, 1996, the books and records of
each member of the Crestar Group fully and properly reflect its
liability for all accrued taxes, additions to tax, penalties and
interest in accordance with GAAP. Except as disclosed in
Schedule M, no member of the Crestar Group has granted (nor is it
subject to) any waiver of the period of limitations for the
assessment of tax for any currently open taxable period, and no
unpaid tax deficiency has been asserted in writing against or
with respect to any member of the Crestar Group by any taxing
authority.
(k) Property. Crestar and Crestar Bank own (or enjoy
use of under capital or operating leases) all property reflected
on the Crestar Financial Statements as of March 31, 1997 and
December 31, 1996 as being owned by them (except property sold or
otherwise disposed of in the ordinary course of business).
All property shown as being owned is owned free and clear of
mortgages, liens, pledges, charges or encumbrances of any nature
whatsoever, except those referred to in such Crestar Financial
Statements or the notes thereto, liens for current taxes not yet
due and payable, any unfiled mechanic's liens and such
encumbrances and imperfections of title, if any, as are not
substantial in character or amount or otherwise would materially
impair Crestar's consolidated business operations. The leases
relating to leased property are fairly reflected in such Crestar
Financial Statements.
All property and assets material to the business or
operations of Crestar and Crestar Bank are in substantially good
operating condition and repair, and such property and assets are
adequate for the business and operations of Crestar and Crestar
Bank.
(l) Agreements in Force and Effect. All material
contracts, agreements, plans, leases, policies and licenses of
Crestar and Crestar Bank are valid and in full force and effect;
and Crestar and Crestar Bank have not breached any material
provision of, or are in default in any material respect under the
terms of, any such contract, agreement, lease, policy or license,
the effect of which breach or default would have a material
adverse effect upon the financial condition, results of
operations or business of Crestar and its subsidiaries taken as a
whole.
(m) Legal Proceedings; Compliance with Laws. Other
than as disclosed in the Notes to the Crestar Financial
Statements, there is no legal, administrative, arbitration or
other proceeding or governmental investigation pending, or, to
the knowledge of Crestar's and Crestar Bank's management,
threatened or probable of assertion which, if decided adversely,
would have a material adverse effect on the financial condition,
results of operations, business or prospects of Crestar on a
consolidated basis. Crestar and Crestar Bank have complied with
any laws, ordinances, requirements, regulations or orders
applicable to their respective businesses, except where
noncompliance would not have a material adverse effect on the
financial condition, results of operations, business or prospects
of Crestar on a consolidated basis. Crestar and Crestar Bank
have all licenses, permits, orders or approvals of any federal,
state, local or foreign governmental or regulatory body that are
necessary for the conduct of the respective businesses of Crestar
and Crestar Bank and the absence of which would have a material
adverse effect on the financial condition, results of operations,
business or prospects of Crestar on a consolidated basis; the
Permits are in full force and effect; neither Crestar nor Crestar
Bank is aware of any material violations that are or have been
recorded in respect of any Permit nor has Crestar or Crestar Bank
received notice of any violations; and no proceeding is pending
or, to the knowledge of Crestar or Crestar Bank, threatened to
revoke or limit any
Permit. Neither Crestar nor Crestar Bank has entered into any
agreements or written understandings with the Federal Reserve
Board, the SCC, the FDIC, or any other regulatory agency having
authority over it. Neither Crestar nor Crestar Bank is subject
to any judgment, order, writ, injunction or decree which
materially adversely affects, or might reasonably be expected to
materially adversely affect, the financial condition, results of
operations, business or prospects of Crestar on a consolidated
basis.
(n) Employee Benefit Plans.
(1) Neither Crestar nor any of its subsidiaries,
nor any employee benefit pension plan (as defined in Section 3(2)
of ERISA (a "Pension Plan")) maintained by it, has incurred any
material liability to the PBGC or to the Internal Revenue Service
with respect to any Pension Plan, deferred compensation,
consultant, severance, thrift, option, bonus and group insurance
contract or any other incentive, welfare and employee benefit
plan and agreement presently in effect, or approved prior to the
date hereof, for the benefit of employees or former employees of
Crestar and its subsidiaries or the dependents or beneficiaries
of any employee or former employee of Crestar or any subsidiary
(the "Crestar Employee Plans"). There is not currently pending
with the PBGC any filing with respect to any reportable event
under Section 4043 of ERISA nor has any reportable event occurred
as to which a filing is required and has not been made.
(2) Full payment has been made (or proper
accruals have been established) of all contributions which are
required for periods prior to the Closing Date under the terms of
each Crestar Employee Plan, ERISA, or a collective bargaining
agreement, and no accumulated funding deficiency (as defined in
Section 302 of ERISA or Section 412 of the Code) whether or not
waived, exists with respect to any Pension Plan.
(3) No Crestar Employee Plan is a "multiemployer
plan" (as defined in Section 3(37) of ERISA). Neither Crestar
nor Crestar Bank has incurred any material liability under
Section 4201 of ERISA for a complete or partial withdrawal from a
multiemployer plan (as defined in Section 3(37) of ERISA).
Neither Crestar nor Crestar Bank has participated in or agreed to
participate in, a multiemployer plan (as defined in Section 3(37)
of ERISA).
(4) All "employee benefit plans," as defined in
Section 3(3) of ERISA, that are maintained by Crestar comply and
have been
administered in compliance in all material respects with ERISA
and all other applicable legal requirements, including the terms
of such plans, collective bargaining agreements and securities
laws. Neither Crestar nor Crestar Bank has any material
liability under any such plan that is not reflected in the
Crestar Financial Statements.
(5) No prohibited transaction has occurred with
respect to any "employee benefit plan" (as defined in Section
3(3) of ERISA) maintained by Crestar or Crestar Bank that would
result, directly or indirectly, in material liability under ERISA
or in the imposition of a material excise tax under Section 4975
of the Code.
(o) Regulatory Approvals. Neither Crestar nor Crestar
Bank knows of any reason why the approvals, consents and waivers
of governmental authorities referred to in Sections 5.1(f) and
5.2(e) hereof should not be obtained on a timely basis without
the imposition of any condition of the type referred to in
Section 5.1(f) hereof.
(p) Environmental Matters. To the knowledge of the
Manager, Environmental Compliance, of Crestar Bank, there are no
actions, suits, demands, notices, claims, investigations or
proceedings pending relating to the liability of properties owned
or operated by Crestar Bank or any of its subsidiaries excluding
properties serving as collateral for loans under any
Environmental Law (as defined in subsection 3.1(t)), including
without limitation any notices, demand letters or requests for
information from any federal or state environmental agency
relating to any such liabilities under or violations of
Environmental Law.
(q) Disclosure. Except to the extent of any
subsequent correction or supplement with respect thereto
furnished prior to the date hereof, no written statement,
certificate, schedule, list or other written information
furnished by or on behalf of Crestar at any time to American
National, in connection with this Agreement when considered as a
whole, contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact
necessary in order to make the statements herein or therein, in
light of the circumstances under which they were made, not
misleading. Each document delivered or to be delivered by
Crestar to American National is or will be a true and complete
copy of such document, unmodified except by another document
delivered by Crestar.
ARTICLE IV
Conduct and Transactions Prior to
Effective Time of the Merger
4.1. Access to Records and Properties of Crestar, Crestar
Bank, American National and Savings Bank; Confidentiality.
Between the date of this Agreement and the Effective Time of the
Holding Company Merger, each of Crestar and Crestar Bank on the
one hand, and each of American National and Savings Bank on the
other, agree to give to the other reasonable access to all the
premises and books and records (including tax returns filed and
those in preparation) of it and its subsidiaries and to cause its
officers to furnish the other with such financial and operating
data and other information with respect to the business and
properties as the other shall from time to time request for the
purposes of verifying the representations and warranties set
forth herein, preparing the Registration Statement (as defined in
Section 4.2) and applicable regulatory filings (as set forth in
Section 4.6), and preparing unaudited financial statements of
American National as of a date prior to the Effective Time of the
Holding Company Merger in order to facilitate Crestar in
performance of its post-Closing Date financial reporting
requirements. Crestar and American National shall each maintain
the confidentiality of all confidential information furnished to
it by the other party hereto concerning the business, operations,
and financial condition of the party furnishing such information,
and shall not use any such information except in furtherance of
the Transaction. If this Agreement is terminated, each party
hereto shall promptly return all documents and copies of, and all
workpapers containing, confidential information received from the
other party hereto. The obligations of confidentiality under
this Section 4.1 and the Confidentiality Agreements dated March
3, 1997 and June 16, 1997 between Crestar and American National
shall survive any such termination of this Agreement and shall
remain in effect, except to the extent that (a) one party shall
have directly or indirectly acquired the assets and business of
the other party; (b) as to any particular confidential
information with respect to one party, such information (i) shall
become generally available to the public other than as a result
of an unauthorized disclosure by the other party or (ii) was
available to the other party on a nonconfidential basis prior to
its disclosure by the first party; (c) disclosure by any party is
required by subpoena or order of a court of competent
jurisdiction or by order of a regulatory authority of competent
jurisdiction; or (d) disclosure is required by the SEC or bank or
thrift regulatory authorities in connection with the Transactions
contemplated by this Agreement, provided that the disclosing
party has, prior to such disclosure, advised the other party of
the circumstances necessitating such disclosure and have reached
mutually agreeable arrangements relating to such disclosure.
4.2. Registration Statement, Proxy Statement, Shareholder
Approval. American National will duly call and will hold a
meeting of its shareholders as soon as practicable for the
purpose of approving the Holding Company Merger and will comply
fully with the provisions of the 1933 Act and the 1934 Act and
the rules and regulations of the SEC under such acts to the
extent applicable, and the Certificate of Incorporation and By-
laws of American National relating to the call and holding of a
meeting of shareholders for such purpose. Subject
to action taken by its Board of Directors pursuant to or as a
result of the exception clause to the first sentence of Section
4.4 hereof, the Board of Directors of American National will
recommend to and actively encourage shareholders that they vote
in favor of the Holding Company Merger. Crestar and American
National will jointly prepare the proxy statement-prospectus to
be used in connection with such meeting (the "Proxy Statement-
Prospectus") and Crestar will prepare and file with the SEC a
Registration Statement on Form S-4 (the "Registration
Statement"), of which such Proxy Statement-Prospectus shall be a
part, and use its best efforts promptly to have the Registration
Statement declared effective. In connection with the foregoing,
Crestar will comply with the requirements of the 1933 Act, the
1934 Act, the New York Stock Exchange and the rules and
regulations of the SEC under such acts with respect to the
offering and sale of Crestar Common Stock in connection with the
Transaction and with all applicable state Blue Sky and securities
laws. The notices of such meetings and the Proxy Statement-
Prospectus shall not be mailed to American National shareholders
until the Registration Statement shall have become effective
under the 1933 Act. American National covenants that none of the
information supplied by American National and Crestar covenants
that none of the information supplied by Crestar in the Proxy
Statement-Prospectus will, at the time of the mailing of the
Proxy Statement-Prospectus to American National shareholders,
contain any untrue statement of a material fact nor will any such
information omit any material fact required to be stated therein
or necessary in order to make the statements therein, in light of
the circumstances in which they were made, not misleading; and at
all times subsequent to the time of the mailing of the Proxy
Statement-Prospectus, up to and including the date of the meeting
of American National shareholders to which the Proxy Statement-
Prospectus relates, none of such information in the Proxy
Statement-Prospectus, as amended or supplemented, will contain an
untrue statement of a material fact or omit any material fact
required to be stated therein in order to make the statements
therein, in light of the circumstances in which they were made,
not misleading.
American National, as the sole shareholder of Savings
Bank, and Crestar, as the sole shareholder of Crestar Bank,
hereby approve this Agreement and the Bank Plan of Merger.
4.3. Operation of the Business of American National and
Savings Bank. American National and Savings Bank agree that from
April 30, 1997 to the Effective Time of the Merger, they have
operated, and they will operate, their respective businesses
substantially as presently operated and only in the ordinary
course and in general conformity with applicable laws and
regulations, and, consistent with such operation, they will use
their best efforts to preserve intact its present business
organizations and its relationships with persons having business
dealings with it. Without limiting the generality of the
foregoing, American National and Savings Bank, from the date of
this Agreement, agree that they will not, without the prior
written consent of Crestar, (i) make any change in the salaries,
bonuses or title of any officer; (ii) make any change in the
title, salaries or bonuses of any other employee, other than
those permitted by current employment policies in the ordinary
course of business, any of which changes shall be reported
promptly to Crestar; (iii) enter into any bonus, incentive
compensation, deferred compensation, profit sharing, thrift,
retirement, pension, group insurance or other benefit plan or any
employment or consulting agreement or increase benefits under
existing plans; (iv) create or otherwise become liable with
respect to any indebtedness for money borrowed or purchase money
indebtedness except in the ordinary course of business; (v) amend
its Certificate of Incorporation or By-laws; (vi) issue or
contract to issue any shares of American National capital stock
or securities exchangeable for or convertible into capital stock
except (y) up to 345,357 shares of American National Common Stock
issuable pursuant to American National Options outstanding as of
May 31, 1997, or (z) up to 792,000 shares of American National
Common Stock pursuant to the Option Agreement; (vii) purchase any
shares of American National capital stock; (viii) except as set
forth in Schedule X, enter into, renew, extend or assume any
material contract or obligation, including, but not limited to,
any outsourcing agreements or licenses, leases or purchases of
data processing products or services; (ix) other than as provided
in (a) below with respect to the work-out of nonperforming
assets, waive, release, compromise or assign any right or claim
involving $75,000 or more; (x) propose or take any other action
which would make any representation or warranty in Section 3.1
hereof untrue; (xi) introduce any new products or services or
change the rate of interest on any deposit instrument to above-
market interest rates; (xii) make any change in policies
respecting extensions of credit or loan charge-offs; (xiii)
change reserve requirement policies; (xiv) change securities
portfolio policies; (xv) acquire a policy or enter into any new
agreement, amendment or endorsement or make any changes relating
to insurance coverage, including coverage for its directors and
officers, which would result in an additional payment obligation
of $50,000 or more; (xvi) propose or take any action with respect
to the closing of any branches; (xvii) amend the terms of the
American National Options; (xviii) amend the terms of the written
severance or employment agreements identified in Schedule E; or
(xix) make any change in any tax election or accounting method or
system of internal accounting controls, except as may be
appropriate to conform to any change in regulatory accounting
requirements or generally accepted accounting principles.
American National and Savings Bank further agree that, between
the date of this Agreement and the Effective Time of the Holding
Company Merger, they will consult with Crestar regarding (a) loan
portfolio management, including management and work-out of
nonperforming assets, and credit review and approval procedures,
including notice to Crestar's Credit Review Department Management
of any new nonresidential loans in excess of $500,000, and
(b) securities portfolio and funds management, including
management of interest rate risk.
4.4. No Solicitation. Unless and until this Agreement shall
have been terminated pursuant to its terms, neither American
National, Savings Bank nor any of their executive officers,
directors, representatives, agents or affiliates shall, directly
or indirectly, encourage, solicit or initiate discussions or
negotiations (with any person other than Crestar) concerning any
merger, sale of substantial assets, tender offer, sale of shares
of stock or similar Transaction involving American National or
Savings Bank or disclose, directly or indirectly, any information
not customarily disclosed to the public concerning American
National or Savings Bank, afford to any other person access to
the properties, books or records of American National or Savings
Bank or otherwise assist any person preparing to make or who has
made such an offer, or enter into any agreement with any third
party providing for a business combination transaction,
equity investment or sale of significant amount of assets, except
in a situation in which a majority of the full Board of Directors
of American National has determined in good faith, upon advice of
counsel, that such Board has a fiduciary duty to consider and
respond to a bona fide proposal by a third party (which proposal
was not directly or indirectly solicited by American National or
Savings Bank or any of their officers, directors,
representatives, agents or affiliates) and provides written
notice of its intention to consider such proposal and the
material terms thereof to Crestar at least five days before
responding to the proposal. American National and Savings Bank
will promptly communicate to Crestar the terms of any proposal
which it may receive in respect to any of the foregoing
transactions.
4.5. Dividends. American National agrees that subsequent to
April 30, 1997, and until the Effective Time of the Holding
Company Merger, it will declare cash dividends consistent (in
terms of amount and timing of record and payment dates) with its
practice in effect in its fiscal quarter ending April 30, 1997.
American National agrees not to pay any cash dividends in the
fiscal quarter in which the closing occurs unless the Closing
Date occurs after the record date for payment of the Crestar cash
dividend in the Crestar quarter most closely corresponding to
such American National fiscal quarter, since it is the intention
of American National and Crestar that American National
shareholders not be paid cash dividends both on American National
Common Stock and cash dividends on Crestar Common Stock received
in exchange therefor in corresponding quarters. If the Closing
Date occurs after the record date for payment of Crestar's cash
dividend in the Crestar quarter most closely corresponding to the
American National fiscal quarter in which the closing occurs,
American National may declare a cash dividend complying with the
conditions of this Section 4.5 for such fiscal quarter payable to
American National shareholders of record at the Effective Time of
the Holding Company Merger.
4.6. Regulatory Filings; Best Efforts. Crestar and American
National shall jointly prepare all regulatory filings required to
consummate the transactions contemplated by the Agreement and the
Plan of Merger and submit the filings for approval with the
Federal Reserve Board, the OTS, the FDIC, the SCC and the
Maryland Banking Commissioner as soon as practicable after the
date hereof. Crestar and American National shall use their best
efforts to obtain approvals of such filings.
4.7. Public Announcements. Each party will consult with the
other before issuing any press release or otherwise making any
public statements with respect to the Transaction and shall not
issue any press release or make any such public statement prior
to such consultations and approval of the other party, which
approval shall not be unreasonably withheld, except as may be
required by law.
4.8. Operating Synergies; Conformance to Reserve Policies,
Etc. Between the date hereof and the Effective Time of the
Holding Company Merger, American National's and Savings Bank's
management will work with Crestar Bank to achieve appropriate
operating efficiencies following the Closing Date. Subject to
Savings Bank's approval, which will not be
unreasonably withheld, Crestar notification to Savings Bank's
customers and Crestar's direct contact with customers will
commence following receipt of Federal Reserve Board approval but
not earlier than 60 days prior to the Closing Date. At the
request of Crestar Bank and upon receipt by American National and
Savings Bank of written confirmation from Crestar and Crestar
Bank that there are no conditions to the obligations of Crestar
and Crestar Bank under this Agreement set forth in Article V
which will not be fulfilled so as to permit them to consummate
the Holding Company Merger and the other transactions
contemplated hereby, not more than three days before the
Effective Time of the Holding Company Merger American National
shall establish such additional accruals, reserves and charge-
offs, through appropriate entries in its accounting books and
records (provided such adjustments are in accordance with GAAP
and applicable law and regulation) as may be necessary to conform
American National's accounting and credit loss reserve practices
and methods to those of Crestar Bank (as such practices and
methods are to be applied from and after the Effective Time of
the Holding Company Merger) and to Crestar Bank's plans with
respect to the conduct of the business of American National and
Savings Bank following the Transaction, as well as the costs and
expenses relating to the consummation by American National and
Savings Bank of the Transaction and the other transactions
contemplated hereby. Any such accruals, reserves and charge-offs
shall not be deemed to cause any representation and warranty of
American National and Savings Bank to be untrue or inaccurate as
of the Effective Time of the Holding Company Merger.
At the same time that the accruals referred to in the
two immediately preceding sentences are established, American
National and Savings Bank will convey any OREO properties that
are titled in its name to an American National subsidiary to be
identified by Crestar. Such subsidiary will be merged into a
Crestar or Crestar Bank subsidiary at the time of the Bank
Merger.
4.9. Crestar Rights Agreement. Crestar agrees that any
rights issued pursuant to the Rights Agreement adopted by it in
1989 shall be issued with respect to each share of Crestar Common
Stock issued pursuant to the terms hereof and the Holding Company
Plan of Merger, regardless whether there has occurred a
Distribution Date under the terms of such Rights Agreement prior
to the occurrence of the Effective Time of the Holding Company
Merger.
4.10. Agreement as to Efforts to Consummate. Subject to
action taken by the Board of Directors of American National
pursuant to or as a result of the exception clause to the first
sentence of Section 4.4 hereof and to the other terms and
conditions of this Agreement, each of Crestar and American
National agrees to use all reasonable efforts to take, or cause
to be taken, all actions, and to do, or cause to be done, all
things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective, as soon as
practicable after the date of this Agreement, the transactions
contemplated by this Agreement, including, without limitation,
using reasonable effort to lift or rescind any injunction or
restraining order or other order adversely affecting the ability
of the parties to consummate the transactions contemplated
herein. Each of Crestar and American National shall use its best
efforts to obtain consents of all
third parties and governmental bodies necessary or desirable for
the consummation of the transactions contemplated by this
Agreement.
4.11. Adverse Changes in Condition. Crestar and
American National each agrees to give written notice promptly to
the other concerning any event or circumstance which would cause
or constitute a breach of any of the representations, warranties
or covenants of such party contained herein. Each of Crestar and
American National shall use its best efforts to prevent or
promptly to remedy the same.
4.12. NYSE Listing. If the shares of Crestar Common
Stock to be issued in the Holding Company Merger are not
repurchased on the open market, Crestar will file with the New
York Stock Exchange a Supplemental Listing Application for the
shares of Crestar Common Stock to be issued in the Holding
Company Merger and have such shares approved for listing on the
New York Stock Exchange prior to the Effective Time of the
Merger.
4.13. Updating of Schedules. American National shall
notify Crestar, and Crestar shall notify American National, of
any changes, additions or events which may cause any change in or
addition to any Schedules delivered by it under this Agreement,
promptly after the occurrence of same and at the Closing Date by
delivery of updates of all Schedules, including future quarterly
and annual American National Financial Statements. No
notification made pursuant to this Section 4.13 shall be deemed
to cure any breach of any representation or warranty made in this
Agreement or any Schedule unless Crestar or American National, as
the case may be, specifically agree thereto in writing, nor shall
any such notification be considered to constitute or give rise to
a waiver by American National or Savings Bank on the one hand, or
Crestar or Crestar Bank on the other hand of any condition set
forth in this Agreement.
4.14. Transactions in Crestar Common Stock. Other than
the issuance or acquisition of Crestar Common Stock pursuant to
Crestar employee benefit plans, or the purchase or sale of
Crestar Common Stock by Crestar Bank in its capacity as trustee
under Crestar employee benefit plans or in any other fiduciary
capacity in which it is directed to sell or purchase Crestar
Common Stock, none of Crestar, Crestar Bank, American National or
Savings Bank will, directly or indirectly, purchase, publicly
sell or publicly acquire any shares of Crestar Common Stock
during the 10 trading days ending on the 10th day prior to the
Effective Time of the Holding Company Merger.
4.15. Branch Closing Law. Crestar expects to close and
relocate the business of certain Savings Bank branches in
connection with the Bank Merger. If any of these
closing/relocations do not constitute "relocations" as that term
is defined in the Joint Policy Statement of September 2, 1993,
Concerning Branch Closings issued by the Federal Reserve Board,
the Office of the Comptroller of the Currency and the FDIC, and
instead is considered a branch closing for purposes of Section 42
of the Federal Deposit Insurance Act, American National will,
following receipt of all required regulatory approvals of the
Holding Company
Merger, take all necessary action under Section 42 and any
regulations promulgated thereunder by notifying customers and
otherwise complying with the branch closing law and regulations.
ARTICLE V
Conditions of Merger
5.1. Conditions of Obligations of Crestar and Crestar Bank.
The obligations of Crestar and Crestar Bank to perform this
Agreement are subject to the satisfaction at or prior to the
Effective Time of the Merger of the following conditions unless
waived by Crestar and Crestar Bank.
(a) Representations and Warranties; Performance of
Obligations. The representations and warranties of American
National and Savings Bank set forth in Section 3.l hereof shall
be true and correct in all material respects as of the date of
this Agreement and as of the Effective Time of the Merger as
though made on and as of the Effective Time of the Merger (or on
the date when made in the case of any representation and warranty
which specifically relates to an earlier date); American National
and Savings Bank shall have in all material respects performed
all obligations required to be performed by them and satisfied
all conditions required to be satisfied by them under this
Agreement prior to the Effective Time of the Merger; and Crestar
and Crestar Bank shall have received a certificate signed by the
Chief Executive Officer and by the Chief Financial Officer of
American National and Savings Bank, without personal liability,
which may be to their best knowledge after due inquiry, to such
effects. The foregoing notwithstanding, Crestar and Crestar Bank
agree not to exercise their rights under this subsection 5.1(a)
because of a breach of a representation and warranty by American
National or Savings Bank unless the Crestar Board of Directors,
acting reasonably, concludes that any such breach could have a
material adverse effect on the consolidated financial condition
or consolidated results of operations of American National.
(b) Authorization of Transaction. All action
necessary to authorize the execution, delivery and performance of
this Agreement by American National and Savings Bank and the
consummation of the transactions contemplated herein (including
the shareholder action referred to in Section 4.2) shall have
been duly and validly taken by the Boards of Directors of
American National and Savings Bank and by the shareholders of
American National and Savings Bank, and American National and
Savings Bank shall have full power and right to merge into
Crestar and Crestar Bank, respectively, on the terms provided
herein.
(c) Opinion of Counsel. Crestar and Crestar Bank
shall have received an opinion of Luse, Lehman, Xxxxxx, Xxxxxxxx
& Xxxxxx, counsel to American National and Savings Bank, dated
the Closing Date and satisfactory in form and substance to
counsel to Crestar and Crestar Bank, in the form attached hereto
as Exhibit D.
(d) The Registration Statement. The Registration
Statement shall be effective under the 1933 Act and Crestar shall
have received all state securities laws or "blue sky" permits and
other authorizations or there shall be exemptions from
registration requirements necessary to offer and issue the
Crestar Common Stock in connection with the Holding Company
Merger, and neither the Registration Statement nor any such
permit, authorization or exemption shall be subject to a stop
order or threatened stop order by the SEC or any state securities
authority.
(e) Tax Opinion. Crestar and Crestar Bank shall have
received, in form and substance satisfactory to them, an opinion
of Hunton & Xxxxxxxx to the effect that, for federal income tax
purposes, each of the Holding Company Merger and the Bank Merger
will qualify as a "reorganization" under Section 368(a) of the
Code, and no taxable gain will be recognized by Crestar, Crestar
Bank, American National or Savings Bank (i) in the Holding
Company Merger (a) upon the transfer of American National's
assets to Crestar in exchange for Crestar Common Stock, cash and
the assumption of American National's liabilities or (b) upon the
distribution of such Crestar Common Stock and cash to American
National shareholders or (ii) in the Bank Merger, (a) upon the
transfer of Savings Bank's assets to Crestar Bank in exchange for
the assumption of Savings Bank's liabilities and in constructive
exchange for Crestar Bank common stock (but Savings Bank or
Crestar Bank may be required to include certain amounts in income
as a result of the termination of any bad-debt reserve maintained
by Savings Bank for federal income tax purposes and other
possible required changes in tax accounting methods) or (b) upon
the constructive distribution of such Crestar Bank common stock
to Crestar.
(f) Regulatory Approvals. All required approvals from
federal and state regulatory authorities having jurisdiction to
permit Crestar and Crestar Bank to consummate the Transaction and
to issue Crestar Common Stock to American National shareholders
shall have been received and shall have contained no conditions
deemed in good faith to be materially disadvantageous by Crestar,
including such approval necessary to consummate the Bank Merger
in an "Oakar" transaction as described in Section 1.1 hereof.
Notwithstanding the foregoing, no condition or requirement which
does no more than subject Crestar or Crestar Bank or American
National or Savings Bank to legal requirements generally
applicable
to entities and transactions of the same type as a matter of law
or regulatory policy shall be deemed to be materially
disadvantageous.
(g) Affiliate Letters. Within 60 days of the date
hereof, each shareholder of American National who is a American
National Affiliate shall have executed and delivered a commitment
and undertaking in the form of Exhibit F to the effect that
(1) such shareholder will dispose of the shares of Crestar Stock
received by him in connection with the Holding Company Merger
only in accordance with the provisions of paragraph (d) of Rule
145 under the 1933 Act; (2) such shareholder will not dispose of
any of such shares until Crestar has received, at its expense, an
opinion of counsel acceptable to it that such proposed
disposition will not violate the provisions of paragraph (d) of
Rule 145 and any applicable securities laws which opinion shall
be rendered promptly following counsel's receipt of such
shareholder's written notice of its intent to sell shares of
Crestar Common Stock; and (3) the certificates representing said
shares may bear a legend referring to the foregoing restrictions.
(h) NYSE Listing. If the shares of Crestar Common
Stock to be issued in the Holding Company Merger are not
repurchased on the open market, such shares to be issued in the
Merger shall have been approved for listing, upon notice of
issuance, on the New York Stock Exchange.
(i) Acceptance by Crestar and Crestar Bank Counsel.
The form and substance of all legal matters contemplated hereby
and of all papers delivered hereunder shall be reasonably
acceptable to counsel for Crestar and Crestar Bank.
5.2. Conditions of Obligations of American National and
Savings Bank. The obligations of American National and Savings
Bank to perform this Agreement are subject to the satisfaction at
or prior to the Effective Time of the Merger of the following
conditions unless waived by American National and Savings Bank:
(a) Representations and Warranties; Performance of
Obligations. The representations and warranties of Crestar and
Crestar Bank set forth in Section 3.2 hereof shall be true and
correct in all material respects as of the date of this Agreement
and as of the Effective Time of the Merger as though made on and
as of the Effective Time of the Merger (or on the date when made
in the case of any representation and warranty which specifically
relates to an earlier date); Crestar and Crestar Bank shall have
in all material respects performed all obligations required to be
performed by them and satisfied all conditions required to be
satisfied by them under this Agreement prior to the Effective
Time of the Holding Company Merger; and American National and
Savings Bank shall have received a certificate signed by the
Chief Executive Officer and by the Chief Financial
Officer of Crestar and Crestar Bank, without personal liability,
which may be to their best knowledge after due inquiry, to such
effects. The foregoing notwithstanding, American National and
Savings Bank agree not to exercise their rights under this
subsection 5.2(a) because of a breach of a representation and
warranty by Crestar or Crestar Bank unless the American National
Board of Directors, acting reasonably, concludes that any such
breach could have a material adverse effect on the consolidated
financial condition or consolidated results of operations of
Crestar.
(b) Authorization of Transaction. All action
necessary to authorize the execution, delivery and performance of
this Agreement by Crestar and Crestar Bank and the consummation
of the transactions contemplated hereby shall have been duly and
validly taken by the Boards of Directors of Crestar and Crestar
Bank and the shareholders of American National and the sole
shareholder of Savings Bank, and Crestar and Crestar Bank shall
have full power and right to merge with American National and
Savings Bank, respectively, on the terms provided herein.
(c) Opinion of Counsel. American National and Savings
Bank shall have received an opinion of Hunton & Xxxxxxxx, counsel
to Crestar and Crestar Bank, dated the Closing Date and
satisfactory in form and substance to counsel to American
National and Savings Bank, in the form attached hereto as Exhibit
E.
(d) The Registration Statement. The Registration
Statement shall be effective under the 1933 Act and Crestar shall
have received all state securities laws or "blue sky" permits and
other authorizations or there shall be exemptions from
registration requirements necessary to offer and issue the
Crestar Common Stock in connection with the Holding Company
Merger, and neither the Registration Statement nor any such
permit, authorization or exemption shall be subject to a stop
order or threatened stop order by the SEC or any state securities
authority.
(e) Regulatory Approvals. All required approvals from
federal and state regulatory authorities having jurisdiction to
permit American National and Savings Bank to consummate the
Transaction and to permit Crestar to issue Crestar Common Stock
to American National shareholders shall have been received,
including such approval necessary to consummate the Bank Merger
in an "Oakar" transaction as described in Section 1.1 hereof.
(f) Tax Opinion. American National and Savings Bank
shall have received, in form and substance reasonably
satisfactory to them, an opinion of Hunton & Xxxxxxxx to the
effect that, for federal income tax purposes, each of the Holding
Company Merger and the Bank Merger will qualify as a
"reorganization" under Section 368(a) of the Code; no taxable
gain will be recognized by Crestar,
Crestar Bank, American National or Savings Bank (i) in the
Holding Company Merger (a) upon the transfer of American
National's assets to Crestar in exchange for Crestar Common
Stock, cash and the assumption of American National's liabilities
or (b) upon the distribution of such Crestar Common Stock and
cash to American National shareholders or (ii) in the Bank
Merger, (a) upon the transfer of Savings Bank's assets to Crestar
Bank in exchange for the assumption of Savings Bank's liabilities
and in constructive exchange for Crestar Bank stock (but Savings
Bank or Crestar Bank may be required to include certain amounts
in income as a result of the termination of any bad-debt reserve
maintained by Savings Bank for federal income tax purposes and
other possible required changes in tax accounting methods) or (b)
upon the constructive distribution of such Crestar Bank stock to
Crestar; no taxable gain will be recognized by an American
National shareholder on the exchange by such shareholder of
shares of American National Common Stock solely for shares of
Crestar Common Stock (including any fractional share interest) in
the Holding Company Merger; an American National shareholder who
receives cash and shares of Crestar Common Stock (including any
fractional share interest) for shares of American National Common
Stock in the Holding Company Merger pursuant to the cash election
will recognize any gain realized (including any gain treated as a
dividend) up to the amount of cash received (excluding cash in
lieu of a fractional share of Crestar Common Stock), but will not
recognize any loss; an American National shareholder's basis in
Crestar Common Stock (including any fractional share interest)
received in the Holding Company Merger will be the same as the
shareholder's basis in the American National Common Stock
surrendered in exchange therefor, decreased by the amount of any
cash received (excluding cash in lieu of a fractional share of
Crestar Common Stock) and increased by the amount of any gain
recognized (including any gain treated as a dividend) by the
shareholder; the holding period of such Crestar Common Stock
(including any fractional share interest) for an American
National shareholder will include the holding period of the
American National Common Stock surrendered in exchange therefor,
if such American National Common Stock is held as a capital asset
by the shareholder at the Effective Time of the Holding Company
Merger; and an American National shareholder who receives cash in
lieu of a fractional share of Crestar Common Stock will recognize
gain or loss equal to any difference between the amount of cash
received and the shareholder's basis in the fractional share
interest.
(g) NYSE Listing. If the shares of Crestar Common
Stock to be issued in the Holding Company Merger are not
repurchased on the open market, such shares to be issued in the
Holding Company Merger shall have been approved for listing, upon
notice of issuance, on the New York Stock Exchange.
(h) Fairness Opinion. The opinion of Xxxxx, Xxxxxxxx
& Xxxxx, Inc., dated the date hereof, to the effect that the
consideration to be received by the shareholders of American
National as a result of the Holding Company Merger is fair to the
shareholders of American National from a financial point of view,
and shall not have been withdrawn prior to the mailing of the
Proxy Statement for the meeting of shareholders of American
National referred to in Section 4.2 hereof.
(i) Acceptance by American National's Counsel.
The form and substance of all legal matters contemplated hereby
and of all papers delivered hereunder shall be acceptable to
counsel for American National.
ARTICLE VI
Closing Date; Effective Time
6.1. Closing Date. Unless another date or place is agreed
to in writing by the parties, the closing of the transactions
contemplated in this Agreement shall take place at the offices of
Crestar, 000 Xxxx Xxxx Xxxxxx, Xxxxxxxx, Xxxxxxxx, at 10:00
o'clock A.M., local time, on such date as Crestar shall designate
to American National at least 10 days prior to the designated
Closing Date and as reasonably acceptable to American National;
provided, that the date so designated shall not be earlier than
15 days after Federal Reserve Board approval, and shall not be
later than 60 days after such approval and, in no event, shall be
later than March 31, 1998 (the "Closing Date"). The parties
agree to use their best efforts to make the Merger effective on
or before December 31, 1997, and not earlier than November 6,
1997.
6.2. Filings at Closing. Subject to the provisions of
Article V, at the Closing Date, Crestar shall cause Articles of
Merger relating to the Holding Company Plan of Merger to be filed
in accordance with the VSCA and Articles of Merger to be filed
relating to the Bank Plan of Merger in accordance with the VSCA,
the Delaware Corporation Law, the rules and regulations of the
OTS and the SCC, and each of Crestar and American National shall
take any and all lawful actions to cause the Holding Company
Merger and the Bank Merger to become effective.
6.3. Effective Time. Subject to the terms and conditions
set forth herein, including receipt of all required regulatory
approvals, the Holding Company Merger shall become effective at
the time Articles of Merger filed with the SCC are made effective
(the "Effective Time of the Holding Company Merger") and the Bank
Merger shall become effective at the time the Articles of Merger
filed with the SCC are made effective.
ARTICLE VII
Termination; Survival of Representations,
Warranties and Covenants; Waiver and Amendment
7.1. Termination. This Agreement shall be terminated, and
the Transaction abandoned, if the shareholders of American
National shall not have given the approval required by Section
4.2. Notwithstanding such approval by such shareholders, this
Agreement may be terminated at any time prior to the Effective
Time of the Holding Company Merger, by:
(a) The mutual consent of Crestar, Crestar Bank,
American National and Savings Bank, as expressed by their
respective Boards of Directors;
(b) Either Crestar or Crestar Bank on the one hand or
American National or Savings Bank on the other hand, as expressed
by their respective Boards of Directors, if the Holding Company
Merger has not occurred by March 31, 1998, provided that the
failure of the Holding Company Merger to so occur shall not be
due to a willful breach of any representation, warranty, covenant
or agreement by the party seeking to terminate this Agreement;
(c) By Crestar in writing authorized by its Board of
Directors if American National or Savings Bank has, or by
American National in writing authorized by its Board of
Directors, if Crestar or Crestar Bank has, in any material
respect, breached (i) any covenant or agreement contained herein,
or (ii) any representation or warranty contained herein, in any
case if such breach has not been cured by the earlier of 30 days
after the date on which written notice of such breach is given to
the party committing such breach or the Closing Date, provided
that it is understood and agreed that either party may terminate
this Agreement on the basis of any such material breach of any
representation or warranty which is not cured within 30 days of
written notice thereof contained herein notwithstanding any
qualification therein relating to the knowledge of the other
party. The foregoing notwithstanding, each of Crestar on the one
hand and American National on the other hand agree not to
exercise its respective rights under this subsection 7.1(c)
because of a breach of a representation and warranty by the other
(including by its subsidiary which is a party to this Agreement)
unless its Board of Directors, acting reasonably, concludes that
any such breach could have a material adverse effect on the
consolidated financial condition or consolidated results of
operations of the other;
(d) Either Crestar or Crestar Bank on the one hand or
American National or Savings Bank on the other hand, as expressed
by their respective Boards of Directors, in the event that any of
the conditions precedent to the obligations of such parties to
consummate the Transaction have not been satisfied
or fulfilled or waived by the party entitled to so waive on or
before the Closing Date, provided that no party shall be entitled
to terminate this Agreement pursuant to this subparagraph (d) if
the condition precedent or conditions precedent which provide the
basis for termination can reasonably be and are satisfied within
a reasonable period of time, in which case, the Closing Date
shall be appropriately postponed;
(e) Crestar and Crestar Bank, if the Boards of
Directors of Crestar and Crestar Bank shall have determined in
their sole discretion, exercised in good faith, that the
Transaction, has become inadvisable or impracticable by reason of
(A) the issuance of any order, decree or advisory letter of
regulatory authority containing conditions or requirements
reasonably deemed objectionable to Crestar, (B) the threat or the
institution by any governmental authority of any litigation,
proceeding or investigation (including under federal antitrust
laws) to restrain or prohibit the consummation of the Transaction
or to obtain other relief in connection with this Agreement or an
injunction has been obtained by any person restraining or
prohibiting consummation of the Holding Company Merger or (C)
commencement of a competing offer for American National Common
Stock which is significantly better than Crestar's offer, and
which Crestar certifies to American National, in writing, it is
unwilling to meet;
(f) American National and Savings Bank, if the Boards
of Directors of American National and Savings Bank shall have
determined in their sole discretion, exercised in good faith,
that the Transaction has become inadvisable or impracticable by
reason of (A) the issuance of any order, decree or advisory
letter of regulatory authority containing conditions or
requirements reasonably deemed objectionable to American
National, (B) the threat or the institution by any governmental
authority of any litigation, proceeding or investigation
(including under federal antitrust laws) to restrain or prohibit
the consummation of the Transaction or to obtain other relief in
connection with this Agreement or an injunction has been obtained
by any person restraining or prohibiting consummation of the
Holding Company Merger, or (C) commencement of a competing offer
for American National Common Stock which is significantly better
than Crestar's offer, and which Crestar has certified to American
National, in writing, it is unwilling to meet;
(g) Crestar, Crestar Bank, American National or
Savings Bank, if the Federal Reserve Board, the OTS, the FDIC,
the Maryland Bank Commissioner, or the SCC deny approval of the
Transaction and the time period for all appeals or requests for
reconsideration has run;
(h) Crestar if there has been a material adverse
change in the results of operations or consolidated financial
condition or consolidated results of operations of American
National from that shown by the American National Financial
Statements as of April 30, 1997. For purposes of this paragraph
(h), the term "material adverse change" shall not include the
following: (i) changes resulting from movements in general
market interest rates, (ii) changes in laws, rules and
regulations and accounting principles, and (iii) any other
matters mutually agreed to by the parties to this Agreement;
(i) American National if there has been a material
adverse change in the business operations or consolidated
financial condition of Crestar from that shown by the Crestar
Financial Statements as of March 31, 1997. For purposes of this
paragraph (i), the term "material adverse change" shall not
include the following: (i) changes resulting from movements in
general market interest rates, (ii) changes in laws, rules and
regulations and accounting principles, and (iii) any other
matters mutually agreed to by the parties to this Agreement.
7.2. Effect of Termination. In the event of the termination
and abandonment of this Agreement and the Transaction pursuant to
Section 7.1, this Agreement, other than the provisions of
Sections 4.1 (last three sentences) and 9.1, shall become void
and have no effect, without any liability on the part of any
party or its directors, officers or shareholders, provided that
nothing contained in this Section 7.2 shall relieve any party
from liability for any willful breach of this Agreement.
7.3. Survival of Representations, Warranties and Covenants.
The respective representations and warranties, obligations,
covenants and agreements (except for those contained in Sections
1.2, 1.3, 2.1, 2.2, 2.3, 2.4, 2.5, 2.6, 4.1 (second sentence),
8.1, 8.2, 8.3, 8.4, and 9.1, which shall survive the
effectiveness of the Holding Company Merger) of Crestar, Crestar
Bank, American National and Savings Bank contained herein shall
expire with, and be terminated and extinguished by, the
effectiveness of the Holding Company Merger.
7.4. Waiver and Amendment. Any term or provision of this
Agreement may be waived in writing at any time by the party which
is, or whose shareholders are, entitled to the benefits thereof
and this Agreement may be amended or supplemented by written
instructions duly executed by all parties hereto at any time,
whether before or after the meeting of American National
shareholders referred to in Section 4.2 hereof, excepting
statutory requirements and requisite approvals of shareholders
and regulatory authorities, provided that any such amendment or
waiver executed after shareholders of American National have
approved this Agreement and the Holding Company Plan of Merger
shall not modify either the amount or form of the consideration
to be received by such shareholders for their shares of American
National Common Stock or otherwise materially adversely affect
such shareholders without their approval.
ARTICLE VIII
Additional Covenants
8.1. Indemnification of American National Officers and
Directors; Liability Insurance. After the Effective Time of the
Holding Company Merger, Crestar agrees to provide indemnification
to the directors, employees and officers of American National and
Savings Bank and the subsidiaries thereof for events occurring
prior to or subsequent to the Effective Time of the Holding
Company Merger as if they had been directors, employees or
officers of Crestar prior to the Effective Time of the Holding
Company Merger, to the extent permitted under the VSCA and the
Articles of Incorporation and Bylaws of Crestar as in effect as
of the date of this Agreement. Such indemnification shall
continue for six years after the Effective Time of the Holding
Company Merger, provided that any right to indemnification in
respect of any claim asserted or made within such six year period
shall continue until final disposition of such claim. Crestar
will provide officers and directors liability insurance coverage
to all American National and Savings Bank and subsidiaries
thereof directors and officers, whether or not they become part
of the Crestar organization after the Effective Time of the
Holding Company Merger, to the same extent it is provided to
Crestar's officers and directors, provided that coverage will not
extend to acts as to which notice has been given prior to the
Effective Time of the Holding Company Merger. The right to
indemnification and insurance provided in this Section 8.1 is
intended to be for the benefit of directors, employees and
officers of American National and Savings Bank and the
subsidiaries thereof and as such may be personally enforced by
them at law or in equity.
8.2. Employment and Severance Agreements. Crestar will
honor the terms of American National's and/or Savings Bank's
employment agreements with A. Xxxxx Xxxxxx, Xxxxxx X. Xxxxxxx,
Xxxxx X. Xxxxxx and Xxxx X. Xxxxxx described on Schedule E.
8.3. Employee Benefit Matters. Transferred Employees.
All employees of American National or Savings Bank (including
subsidiaries) immediately prior to the Effective Time of the
Holding Company Merger who are employed by Crestar, Crestar Bank
or another Crestar subsidiary immediately following the Effective
Time of the Holding Company Merger ("Transferred Employees") will
be covered by Crestar's employee benefit plans as to which they
are eligible based on their length of service, compensation, job
classification, and position, including, where applicable, any
incentive compensation plan. Notwithstanding the foregoing,
Crestar may determine to continue any of the American National or
Savings Bank benefit plans for Transferred Employees in lieu of
offering participation in Crestar's benefit plans providing
similar benefits (e.g., medical and hospitalization benefits or
401(k) or pension benefits), to terminate any of the American
National or Savings Bank benefit plans, or to merge any such
benefit plans with Crestar's benefit plans. Except as
specifically provided in this Section 8.3 and as otherwise
prohibited by law, with respect to Crestar benefit plans for
which Transferred Employees are otherwise eligible, Transferred
Employees' service with American National or Savings Bank which
is recognized by the applicable benefit plan of American National
or Savings Bank at the Effective Time of the Holding Company
Merger shall be recognized as service with
Crestar for purposes of eligibility to participate and vesting,
if applicable (but not for purposes of benefit accrual) under the
corresponding Crestar benefit plan, if any, subject to applicable
break-in-service rules.
(b) Health Plans. Crestar agrees that any pre-
existing condition, limitation or exclusion in its health plans
shall not apply to Transferred Employees or their covered
dependents who are covered under a medical or hospitalization
indemnity plan maintained by American National or Savings Bank on
the date of the Holding Company Merger and who then change that
coverage to Crestar's medical or hospitalization indemnity health
plan at the time such Transferred Employees are first given the
option to enroll in Crestar's health plans.
(c) Pension Plans. Crestar agrees to assume the
Pension Plan of Savings Bank (the "Savings Bank Pension Plan") as
of the Effective Time of the Holding Company Merger. Crestar, at
its option, may continue the Savings Bank Pension Plan as a
frozen plan or may terminate the Savings Bank Pension Plan and
pay out or annuitize benefits, or may merge the Savings Bank
Pension Plan into the Retirement Plan for Employees of Crestar
Financial Corporation and Affiliated Corporations ("Crestar's
Retirement Plan"). If the Savings Bank Pension Plan is
terminated or if benefit accruals are suspended, or if the
Savings Bank Pension Plan is merged into Crestar's Retirement
Plan, each Transferred Employee who becomes a participant in
Crestar's Retirement Plan will begin to accrue benefits under
Crestar's Retirement Plan on and after the date of such
termination, suspension or merger in accordance with the terms of
Crestar's Retirement Plan and Crestar's Retirement Plan will
recognize for purposes of eligibility to participate, vesting and
eligibility for early retirement, but not for benefit accrual
purposes, all Transferred Employees' service which is recognized
under the Savings Bank Pension Plan as of the date of such
termination, suspension or merger of the Savings Bank Pension
Plan.
(d) 401(k) Plan. Transferred Employees' service with
American National or Savings Bank for purposes of eligibility to
participate in the Crestar Employees' Thrift and Profit Sharing
Plan shall not be recognized until, if applicable, the later of
January 1, 1998 (assuming the Holding Company Merger occurs in
1997) or the date the American National 401(k) Plan is frozen as
to eligibility to participate and future contributions, merged or
terminated.
(e) Cooperation. American National and Savings Bank
agree to cooperate with Crestar in implementing any decision made
by Crestar with respect to employee benefit plans and to provide
to Crestar on or before the Effective Time of the Holding Company
Merger a schedule of service credit for prospective Transferred
Employees.
8.4. Stock Options. Holders of outstanding American
National Options shall (a) exercise the American National Options
for American National Common Stock prior to the Closing Date (if
such options are by their terms then exercisable) and convert
such Common Stock held as of the Effective Time of the Holding
Company Merger into Crestar Common Stock or (b) have the American
National Options converted into options to purchase Crestar
Common Stock
as set forth in subsection 2.2(e) hereof. American National
agrees not to amend any outstanding option agreement to extend
the period following termination of employment during which
American National Options may be exercised, or, except with the
consent of Crestar, to otherwise amend the terms of any
outstanding option agreement.
ARTICLE IX
Miscellaneous
9.1. Expenses. Each party hereto shall bear and pay the
costs and expenses incurred by it relating to the transactions
contemplated hereby.
9.2. Entire Agreement. This Agreement contains the entire
agreement among Crestar, Crestar Bank, American National and
Savings Bank with respect to the Transaction and the related
transactions and supersedes all prior agreements, arrangements or
understandings with respect thereto (other than as specifically
agreed).
9.3. Descriptive Headings. Descriptive headings are for
convenience only and shall not control or affect the meaning or
construction of any provisions of this Agreement.
9.4. Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and
sufficient if delivered personally or sent by registered or
certified mail, postage prepaid, addressed as follows:
If to Crestar or Crestar Bank:
Crestar Financial Corporation
P. O. Box 26665
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxx X. Xxxxxx
Senior Vice President,
and Corporate Secretary
Copy to:
Xxxxxx X. Xxxxx, Xx.
Hunton & Xxxxxxxx
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxxx 00000
If to American National or Savings Bank:
American National Bancorp Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: A. Xxxxx Xxxxxx,
President and Chief Executive Officer
Copy to:
Xxxx X. Xxxxxx
Xxxx Xxxx
Xxxx, Lehman, Gorman, Xxxxxxxx & Xxxxxx
0000 Xxxxxxxxx Xxxxxx,XX
Xxxxxxxxxx, XX 00000
9.5. Counterparts. This Agreement may be executed in any
number of counterparts, and each such counterpart hereof shall be
deemed to be an original instrument, but all such counterparts
together shall constitute but one agreement.
9.6. Governing Law. Except as may otherwise be required by
the laws of the United States, this Agreement shall be governed
by and construed in accordance with the laws of Virginia.
IN WITNESS WHEREOF, each of the parties hereto has caused
this Agreement to be executed on its behalf and its corporate
seal to be hereunto affixed and attested by its officers
thereunto duly authorized, all as of the day and year first above
written.
CRESTAR FINANCIAL CORPORATION
By /s/ C. Xxxxxxx Xxxxx
-----------------------------------
Name: C. Xxxxxxx Xxxxx
Title: Corporate Executive
Vice President
CRESTAR BANK
By /s/ C. Xxxxxxx Xxxxx
-----------------------------------
Name: C. Xxxxxxx Xxxxx
Title: Corporate Executive
Vice President
AMERICAN NATIONAL BANCORP, INC.
By /s/ A. Xxxxx Xxxxxx
-----------------------------------
Name: A. Xxxxx Xxxxxx
Title: President and Chief
Executive Officer
AMERICAN NATIONAL SAVINGS BANK, F.S.B.
By /s/ A. Xxxxx Xxxxxx
-----------------------------------
Name: A. Xxxxx Xxxxxx
Title: President and Chief
Executive Officer
/s/ Xxxxxx X. Xxxxxxxx /s/ Xxxxxx X. Xxxxx
------------------------------ ------------------------------
Xxxxxx X. Xxxxxxxx Xxxxxx X. Xxxxx
/s/ Xxxxxxx X. Xxxx /s/ A. Xxxxx Xxxxxx
------------------------------ ------------------------------
Xxxxxxx X. Xxxx A. Xxxxx Xxxxxx
/s/ Xxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxxxx
------------------------------ ------------------------------
Xxxxx X. Xxxxx Xxxxxx X. Xxxxxxx
/s/ Xxxxx X. Xxxxxxxxx
------------------------------
Xxxxx X. Xxxxxxxxx
All of the Directors of American National have signed solely
above to agree to vote all their shares of American National
Common Stock beneficially owned by them and with respect to which
they have power to vote in favor of the Holding Company Merger
and, subject to their fiduciary duties described in Section 4.4
of the Agreement, to cause the Holding Company Merger to be
recommended by the Board of Directors of American National to the
shareholders of American National in the proxy statement sent to
shareholders in connection with such shareholders' meeting.
Exhibit A
Execution Copy 6/23/97
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT ("Option Agreement") dated as of
June 23, 1997, between AMERICAN NATIONAL BANCORP, INC. ("American
National"), a Delaware corporation, and CRESTAR FINANCIAL
CORPORATION ("Crestar"), a Virginia corporation, recites and
provides:
A. The Boards of Directors of American National and
Crestar have approved an Agreement and Plan of Reorganization
dated as of June 23, 1997 (the "Merger Agreement") providing for
the merger (the "Merger") of American National with and into
Crestar.
B. As a condition to and as consideration for Crestar's
entry into the Merger Agreement and to induce such entry,
American National has agreed to grant to Crestar the option set
forth herein to purchase authorized but unissued shares of
American National Common Stock.
NOW, THEREFORE, the parties agree as follows:
1. Definitions.
Capitalized terms defined in the Merger Agreement and used
herein shall have the same meanings as in the Merger Agreement.
2. Grant of Option.
Subject to the terms and conditions set forth herein,
American National hereby grants to Crestar an option (the
"Option") to purchase up to 792,000 shares of American National
Common Stock at an exercise price of $16.125 per share payable in
cash as provided in Section 4; provided, however, that in the
event American National issues or agrees to issue any shares of
American National Common Stock (other than as permitted under the
Merger Agreement) at a price less than $16.125 per share (as
adjusted pursuant to Section 6), the exercise price shall be such
lesser price.
3. Exercise of Option.
(a) Unless Crestar shall have breached in any material
respect any material covenant or representation contained in the
Merger Agreement and such breach has not been cured, Crestar may
exercise the Option, in whole or part, at any time or from time
to time if a Purchase Event (as defined below) shall have
occurred and be continuing; provided that to the
extent the Option shall not have been exercised, it shall
terminate and be of no further force and effect (i) on the
Effective Date of the Merger, or (ii) upon termination of the
Merger Agreement in accordance with the provisions thereof (other
than a termination resulting from a willful breach by American
National of any Specified Covenant or, following the occurrence
of a Purchase Event, failure of American National's stockholders
to approve the Merger Agreement by the vote required under
applicable law or under American National's Charter), or (iii) 12
months after termination of the Merger Agreement due to a willful
breach by American National of any Specified Covenant or,
following the occurrence of a Purchase Event, failure of American
National's stockholders to approve the Merger Agreement by the
vote required under applicable law or under American National's
Charter. Any exercise of the Option shall be subject to
compliance with applicable provisions of law.
(b) As used herein, a "Purchase Event" shall mean any of
the following events or transactions occurring after the date
hereof:
(i) American National or any banking subsidiary of
American National (a "Bank"), without having received Crestar's
prior written consent, shall have entered into an agreement with
any person (x) to merge or consolidate, or enter into any similar
transaction, except as contemplated in the Merger Agreement, (y)
to purchase, lease or otherwise acquire all or substantially all
of the assets of American National or a Bank, or (z) to purchase
or otherwise acquire (including by way of merger, consolidation,
share exchange or any similar transaction) securities
representing 10% or more of the voting power of American National
or a Bank;
(ii) any person (other than American National or a Bank
in a fiduciary capacity, or Crestar or Crestar Bank in a
fiduciary capacity) shall have acquired beneficial ownership or
the right to acquire beneficial ownership of 15% or more of the
outstanding shares of American National Common Stock after the
date hereof (the term "beneficial ownership" for purposes of this
Option Agreement having the meaning assigned thereto in Section
13(d) of the Securities Exchange Act of 1934 (the "Exchange Act")
and the regulations promulgated thereunder);
(iii) any person shall have made a bona fide proposal
to American National by public announcement or written
communication that is or becomes the subject of public disclosure
to acquire American National or a Bank by merger, consolidation,
purchase of all or substantially all of its assets or any other
similar transaction, and following such bona fide proposal the
stockholders of American National vote not to adopt the Merger
Agreement; or
(iv) American National shall have willfully breached
any Specified Covenant following a bona fide proposal to American
National or a Bank to acquire American National or a Bank by
merger, consolidation, purchase of all or substantially all of
its assets or any other similar transaction, which breach would
entitle Crestar to terminate the Merger Agreement (without regard
to the cure periods provided for therein) and such breach shall
not have been cured prior to the Notice Date (as defined below).
If more than one of the transactions giving rise to a
Purchase Event under this Section 3(b) is undertaken or effected,
then all such transactions shall give rise only to one Purchase
Event, which Purchase Event shall be deemed continuing for all
purposes hereunder until all such transactions are abandoned. As
used in this Option Agreement, "person" shall have the meanings
specified in Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
(c) In the event Crestar wishes to exercise the Option, it
shall send to American National a written notice (the date of
which being herein referred to as the "Notice Date") specifying
(i) the total number of shares it will purchase pursuant to such
exercise, and (ii) a place and date not earlier than three
business days nor later than 60 business days after the Notice
Date for the closing of such purchase ("Closing Date"); provided
that if prior notification to or approval of any federal or state
regulatory agency is required in connection with such purchase,
Crestar shall promptly file the required notice or application
for approval and shall expeditiously process the same and the
period of time that otherwise would run pursuant to this sentence
shall run instead from the date on which any required
notification period has expired or been terminated or such
approval has been obtained and any requisite waiting period shall
have passed.
(d) As used herein, "Specified Covenant" means any covenant
contained in Sections 4.1, 4.2, 4.3, 4.4, 4.5, 4.6, 4.8, 4.10,
4.11, 4.13, or 6.1 of the Merger Agreement.
4. Payment and Delivery of Certificates.
(A) At the closing referred to in Section 3, Crestar shall
pay to American National the aggregate purchase price for the
shares of American National Common Stock purchased pursuant to
the exercise of the Option in immediately available funds by a
wire transfer to a bank account designated by American National.
(B) At such closing, simultaneously with the delivery of
funds as provided in subsection (a), American National shall
deliver to Crestar a certificate or certificates representing the
number of shares of American National Common Stock purchased by
Crestar, and Crestar shall deliver to American National a letter
agreeing that Crestar will not offer to sell or otherwise dispose
of such shares in violation of applicable law or the provisions
of this Option Agreement.
(C) Certificates for American National Common Stock
delivered at a closing hereunder may be endorsed with a
restrictive legend which shall read substantially as follows:
"The transfer of the shares represented by this certificate
is subject to certain provisions of a Stock Option Agreement
between the registered holder hereof and American National
Bancorp and to resale restrictions arising under the Securities
Act of 1933, as amended, a copy of which agreement is on file at
the principal office of American National Bancorp. A copy
of such agreement will be provided to the holder hereof without
charge upon receipt by American National Bancorp of a written
request."
It is understood and agreed that the above legend shall be
removed by delivery of substitute certificate(s) without such
legend if Crestar shall have delivered to American National a
copy of a letter from the staff of the Commission, or an opinion
of counsel, in form and substance satisfactory to American
National, to the effect that such legend is not required for
purposes of the Securities Act of 1933, as amended.
5. Representations.
American National represents, warrants and covenants to
Crestar as follows:
(A) American National shall at all times maintain
sufficient authorized but unissued shares of American National
Common Stock so that the Option may be exercised without
authorization of additional shares of American National Common
Stock.
(B) The shares to be issued upon due exercise, in whole or
in part, of the Option, when paid for as provided herein, will be
duly authorized, validly issued, fully paid and nonassessable.
6. Adjustment Upon Changes in Capitalization.
In the event of any change in American National Common Stock
by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, exchanges of shares or the like,
the type and number of shares subject to the Option, and the
purchase price per share, as the case may be, shall be adjusted
appropriately. In the event that any additional shares of
American National Common Stock are issued or otherwise become
outstanding after the date of this Option Agreement (other than
pursuant to this Option Agreement), the number of shares of
American National Common Stock subject to the Option shall be
adjusted so that, after such issuance, it equals 19.9% of the
number of shares of American National Common Stock then issued
and outstanding without giving effect to any shares subject or
issued pursuant to the Option. Nothing contained in this Section
6 shall be deemed to authorize American National to breach any
provision of the Merger Agreement.
7. Registration Rights.
If requested by Crestar, American National shall as
expeditiously as possible file a registration statement on a form
of general use under the Securities Act if necessary in order to
permit the sale or other disposition of the shares of American
National Common Stock that have been acquired upon exercise of
the Option in accordance with the intended method of sale or
other disposition requested by Crestar. Crestar shall provide
all information reasonably requested by American National for
inclusion in any registration statement to be filed hereunder.
American
National will use its best efforts to cause such registration
statement first to become effective and then to remain effective
for such period not in excess of 270 days from the day such
registration statement first becomes effective as may be
reasonably necessary to effect such sales or other dispositions.
The first registration effected under this Section 7 shall be at
American National's expense except for underwriting commissions
and the fees and disbursements of Crestar's counsel attributable
to the registration of such American National Common Stock. A
second registration may be requested hereunder at Crestar's
expense. In no event shall American National be required to
effect more than two registrations hereunder. The filing of any
registration statement hereunder may be delayed for such period
of time as may reasonably be required to facilitate any public
distribution by American National of American National Common
Stock. If requested by Crestar, in connection with any such
registration, American National will become a party to any
underwriting agreement relating to the sale of such shares, but
only to the extent of obligating itself in respect of
representations, warranties, indemnities and other agreements
customarily included in such underwriting agreements. Upon
receiving any request from Crestar or assignee thereof under this
Section 7, American National agrees to send a copy thereof to
Crestar and to any assignee thereof known to American National,
in each case by promptly mailing the same, postage prepaid, to
the address of record of the persons entitled to receive such
copies.
8. Severability.
If any term, provision, covenant or restriction contained in
this Option Agreement is held by a court or a federal or state
regulatory agency of competent jurisdiction to be invalid, void
or unenforceable, the remainder of the terms, provisions and
covenants and restrictions contained in this Option 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 will not permit
the holder to acquire the full number of shares of American
National Common Stock provided in Section 2 (as adjusted pursuant
to Section 6), it is the express intention of American National
to allow the holder to acquire such lesser number of shares as
may be permissible, without any amendment or modification hereof.
9. Miscellaneous.
(a) Expenses. Except as otherwise provided herein, each of
the parties hereto shall bear and pay all costs and expenses
incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including fees and expenses
of its own financial consultants, investment bankers, accountants
and counsel.
(b) Entire Agreement. Except as otherwise expressly
provided herein, this Option Agreement contains the entire
agreement between the parties with respect to the transactions
contemplated hereunder and supersedes all prior arrangements or
understandings with respect thereto, written or oral. The terms
and conditions of this Option Agreement shall inure to the
benefit of and be binding upon the parties hereto and their
respective successors and assigns. Nothing in this Option
Agreement, expressed or implied, is intended to confer upon any
party,
other than the parties hereto, and their respective successors
and assigns, any rights, remedies, obligations or liabilities
under or by reason of this Option Agreement, except as expressly
provided herein.
(c) Assignment. Neither of the parties hereto may assign
any of its rights or obligations under this Option Agreement or
the Option created hereunder to any other person, without the
express written consent of the other party, except that in the
event a Purchase Event shall have occurred and be continuing
Crestar may assign in whole or in part its rights and obligations
hereunder; provided, however, that to the extent required by
applicable regulatory authorities, Crestar may not assign its
rights under the Option except in (i) a widely dispersed public
distribution, (ii) a private placement in which no one party
acquires the right to purchase in excess of 2% of the voting
shares of American National, (iii) an assignment to a single
party (e.g., a broker or investment banker) for the purpose of
conducting a widely dispersed public distribution on Crestar's
behalf, or (iv) any other manner approved by applicable
regulatory authorities.
(d) Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and
sufficient if delivered in the manner and to the addresses
provided for in or pursuant to Section 9.4 of the Merger
Agreement.
(e) Counterparts. This Option Agreement may be executed in
any number of counterparts, and each such counterpart shall be
deemed to be an original instrument, but all such counterparts
together shall constitute but one agreement.
(f) Specific Performance. The parties agree that damages
would be an inadequate remedy for a breach of the provisions of
this Option Agreement by either party hereto and that this Option
Agreement may be enforced by either party hereto through
injunctive or other equitable relief.
(g) Governing Law. This Option Agreement shall be governed
by and construed in accordance with the laws of Virginia
applicable to agreements made and entirely to be performed within
such state and such federal laws as may be applicable.
IN WITNESS WHEREOF, each of the parties hereto has executed
this Option Agreement as of the day and year first written above.
AMERICAN NATIONAL BANCORP, INC.
By: /s/ A. Xxxxx Xxxxxx
-----------------------------------
A. Xxxxx Xxxxxx
President and Chief
Executive Officer
CRESTAR FINANCIAL CORPORATION
By: /s/ C. Xxxxxxx Xxxxx
-----------------------------------
C. Xxxxxxx Xxxxx
Corporate Executive
Vice President
Exhibit B
PLAN OF MERGER
OF
AMERICAN NATIONAL BANCORP, INC.
INTO
CRESTAR FINANCIAL CORPORATION
Section 1. Merger. American National BanCorp, Inc.
("American National") shall, upon the time that Articles of
Merger are made effective by the State Corporation Commission of
Virginia (the "Effective Time of the Holding Company Merger"), be
merged (the "Holding Company Merger") into Crestar Financial
Corporation ("Crestar"), which shall be the "Surviving
Corporation".
Section 2. Conversion of Stock. At the Effective Time of
the Holding Company Merger:
(i) Each share of Crestar Financial Corporation Common
Stock outstanding immediately prior to the Effective Time of the
Merger shall continue unchanged as an outstanding share of Common
Stock of the Surviving Corporation.
(ii) Subject to Section 4, each share of American
National Common Stock which is issued and outstanding immediately
prior to the Effective Time of the Holding Company Merger (other
than shares held of record by Crestar and shares to be
exchanged for cash) and which, under the terms of Section 3, is
to be converted into Crestar Common Stock, shall be converted
into a fraction of a share of Crestar Common Stock, determined in
accordance with the Exchange Ratio. The "Exchange Ratio" shall
be calculated as follows:
(A) if the Average Closing Price (as defined
below) is between $30 and $50, the Exchange Ratio shall be the
quotient (rounded to the nearest one-thousandth) of (A) $20.25
divided by (B) the Average Closing Price;
(B) if the Average Closing Price is $50 or
greater, the Exchange Ratio shall be 0.405; and
(C) if the Average Closing Price is $30 or less,
the Exchange Ratio shall be 0.675.
As used herein, "Average Closing Price" shall mean the
average closing price of Crestar Common Stock as reported on the
New York Stock Exchange for each of the 10 trading days ending on
the tenth day prior to the Effective Time of the Holding Company
Merger.
The Exchange Ratio at the Effective Time of the Holding
Company Merger shall be adjusted to reflect any consolidation,
split-up, other subdivisions or combinations of Crestar Common
Stock, any dividend payable in Crestar Common Stock, or any
capital reorganization involving the reclassification of Crestar
Common Stock subsequent to the date of this Agreement.
(iii) Subject to Section 4, each share of American
National Common Stock outstanding immediately prior to the
Effective Time of the Holding Company Merger which, under the
terms of Section 3, is to be converted into the right to receive
cash, shall be converted into the right to receive the Price Per
Share in cash (subject to all applicable withholding taxes).
(iv) At the Effective Time of the Holding Company
Merger, American National's transfer books shall be closed and no
further transfer of American National Common Stock or Series A
shall be permitted.
(vi) Outstanding American National Options shall be
converted into options to purchase Crestar Common Stock as set
forth in subsection 2.2(e) of the Agreement and Plan of
Reorganization dated June 23, 1997 among Crestar, Crestar Bank,
American National and American National Savings Bank, F.S.B. (the
"Agreement"). American National agrees not to amend any
outstanding option agreement to extend the period following
termination of employment during which
American National Options may be exercised, or, except with the
consent of Crestar, to otherwise amend the terms of any
outstanding option agreement.
Section 3. Manner of Conversion. The manner in which each
outstanding share of American National Common Stock shall be
converted into Crestar Common Stock or cash, as specified in
Section 2 hereof, after the Effective Time of the Holding Company
Merger, shall be as follows:
(i) All shares for which cash elections shall have
been made and for which certificates representing such shares
shall have been delivered to American National subject to the
terms of the Agreement at or prior to the meeting of American
National shareholders at which the Holding Company Merger is
considered, shall be converted into the right to receive the
Price Per Share in cash. If the Holding Company Merger is
approved by American National's shareholders, a shareholder's
election to receive the Price Per Share in cash shall be
irrevocable. American National shall retain certificates for
shares submitted for cash purchase until either (i) termination
of the Agreement upon which American National shall return such
certificates, or (ii) the Effective Time of the Holding Company
Merger, when Xxxxx Xxxxxx Shareholder Services (the "Exchange
Agent") shall exchange such certificates for cash, at the Price
Per Share, subject to Section 4. Certificates for shares of
American National Common Stock shall be submitted in exchange for
cash accompanied by a Letter of Transmittal (to be promptly
furnished by the Exchange Agent, to American National
shareholders
of record as of the Effective Time of the Holding Company
Merger). Until so surrendered, each outstanding certificate
which prior to the Effective Time of the Holding Company Merger
represented American National Common Stock shall be deemed to
evidence only the right to receive the Price Per Share (less
applicable withholding taxes) multiplied by the number of shares
evidenced by the certificates, without interest thereon.
(ii) Each share of American National Common Stock,
other than shares held of record by Crestar and shares for which
a cash election has been made (and are not exchanged for cash
because of Section 4), shall be exchanged for shares of Crestar
Common Stock as determined by the Exchange Ratio.
(iii) No fractional shares of Crestar Common Stock
shall be issued, but instead the value of fractional shares shall
be paid in cash (subject to all applicable withholding taxes),
for which purpose the Average Closing Price shall be employed.
(iv) Certificates for shares of American National
Common Stock shall be submitted in exchange for Crestar Common
Stock and/or cash accompanied by a Letter of Transmittal (to be
promptly furnished by the Exchange Agent to American National's
shareholders of record as of the Effective Time of the Holding
Company Merger). Until so surrendered, each outstanding
certificate which, prior to the Effective Time of the Holding
Company Merger, represented American National
Common Stock, shall be deemed to evidence only the right to
receive (a) shares of Crestar Common Stock as determined by the
Exchange Ratio, or (b) in the case of shares for which cash
elections shall have been made, the Price Per Share in cash
(subject to all applicable withholding taxes) multiplied by the
number of shares evidenced by the certificates, without interest.
Until such outstanding shares formerly representing American
National Common Stock are so surrendered, no dividend payable to
holders of record of Crestar Common Stock as of any date
subsequent to the Effective Time of the Merger shall be paid to
the holder of such outstanding certificates in respect thereof.
Upon such surrender, dividends accrued or declared on Crestar
Common Stock shall be paid in accordance with Section 2.2 of the
Agreement.
Section 4. Proration of Shares Purchased with Cash. The
number of shares of American National Common Stock to be
exchanged for cash cannot exceed 40% of the outstanding shares of
American National Common Stock immediately prior to the Effective
Time of the Holding Company Merger. If the number of shares that
shareholders of American National elect to exchange for cash
exceed this percentage of such American National Common Stock,
Crestar shall purchase all shares submitted by holders of 100 or
fewer shares (if such holder has submitted all his shares for
cash exchange) and then purchase shares submitted by other
holders pro rata so as to require Crestar to pay cash (including
payments for Dissenting Shares) for no more than 40% of the
shares of American National Common Stock. A shareholder
submitting shares for cash purchase, all of whose shares are not
exchanged for cash because of the proration provisions of this
Section 4, shall receive shares of Crestar
Common Stock at the Exchange Ratio for all shares of American
National Common Stock not exchanged for cash.
Section 5. Dissenting Shares. Holders of American National
Common Stock do not have the right to demand and receive payment
of the fair value of his shares of American National Common Stock
in accordance with the provisions of Section 262(b)(1) of the
Delaware General Corporation Law.
Section 6. Articles of Incorporation, Bylaws and Directors
of the Surviving Corporation. At the Effective Time of the
Holding Company Merger, there shall be no change caused by the
Holding Company Merger in the Articles of Incorporation (except
any change caused by the filing of Articles of Merger relating to
the Holding Company Merger), By-laws, or Board of Directors of
the Surviving Corporation.
Section 7. Conditions to Merger. Consummation of the
Merger is subject to the following conditions:
(i) The approving vote of the holders of a majority of
the outstanding shares of American National Common Stock entitled
to vote.
(ii) The approval of the Merger by the Board of
Governors of the Federal Reserve System, the Office of Thrift
Supervision, the Maryland Banking Commissioner and the State
Corporation Commission of Virginia.
(iii) The satisfaction of the conditions contained in
the Agreement or the waiver of such conditions by the party for
whose benefit they were imposed.
Section 8. Effect of the Merger. The Merger shall have the
effect provided by Section 13.1-721 of the Code of Virginia and
Section 261 of the Delaware General Corporation Law.
Section 9. Amendment. Pursuant to Section 13.1-718(I) of
the Virginia Stock Corporation Act, the Board of Directors of
Crestar reserves the right to amend this Plan of Merger (with
American National's consent) at any time prior to issuance of the
certificate of merger by the State Corporation Commission of
Virginia, provided, however, that any such amendment made
subsequent to the submission of this Plan of Merger to the
shareholders of American National may not: (i) alter or change
the amount or kind of shares, securities, cash, property or
rights to be received in exchange for or in conversion of all or
any of the shares of American National Common Stock; (ii) alter
or change any of the terms and conditions of this Plan of Merger
if such alteration or change would adversely affect the shares of
American National Common Stock; or (iii) alter or change any term
of the certificate of incorporation of American National (except
as provided herein).
Exhibit C
PLAN OF MERGER
OF
AMERICAN NATIONAL SAVINGS BANK, F.S.B.
INTO
CRESTAR BANK
Section 1. American National Savings Bank, F.S.B. ("Savings
Bank") shall, upon the issuance of certificates of merger by the
State Corporation Commission of Virginia and the Office of Thrift
Supervision (the "Effective Time of the Bank Merger"), be merged
(the "Bank Merger") into Crestar Bank, which shall be the
Surviving Bank.
Section 2. Conversion of Stock. At the Effective Time of
the Bank Merger:
(i) Each share of Crestar Bank Common Stock
outstanding immediately prior to the Effective Time of the Bank
Merger shall continue unchanged as a share of Common Stock of the
Surviving Bank.
(ii) Each share of Savings Bank Common Stock
outstanding immediately prior to the Effective Time of the Bank
Merger shall be canceled, the transfer books of Savings Bank
shall be closed, and no further transfer of Savings Bank Common
Stock shall be permitted.
Section 3. Articles of Incorporation, Bylaws and Directors
of the Surviving Bank. At the Effective Time of the Bank Merger,
there shall be no change caused by the Bank Merger in
the Articles of Incorporation (except any change caused by the
filing of Articles of Merger relating to the Bank Merger),
Bylaws, or Board of Directors of the Surviving Bank.
Section 4. Conditions to Bank Merger. Consummation of the
Bank Merger is subject to the following conditions:
(i) The approving vote of the sole shareholder of the
outstanding shares of Savings Bank Common Stock entitled to vote.
(ii) The approval of the Bank Merger by the State
Corporation Commission of Virginia, the Maryland Banking
Commissioner, the Board of Governors of the Federal Reserve
System and the Office of Thrift Supervision.
(iii) The satisfaction of the conditions contained in
the Agreement and the Plan of Reorganization dated June 23, 1997
among Crestar Financial Corporation, Crestar Bank, American
National Bancorp Inc. and Savings Bank, or the waiver of such
conditions by the party for whose benefit they were imposed.
Section 5. Effect of the Bank Merger. The Bank Merger,
upon the Effective Time of the Bank Merger, shall have the effect
provided by Sections 13.1-721 and 6.1-44 of the Code of Virginia.
