AGREEMENT
AND
PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (hereinafter sometimes referred to as
the "Agreement"), made and entered into as of the 16th day of December, 1997, by
and between One Valley Bancorp, Inc. ("One Valley") and FFVA Financial
Corporation ("FFVA Financial").
WITNESSETH:
RECITALS
A. One Valley is a West Virginia corporation duly organized and
validly existing under the laws of the State of West Virginia.
B. FFVA Financial is a Virginia corporation duly organized and validly
existing under the laws of the State of Virginia.
C. The Boards of Directors of FFVA Financial and of One Valley have
each approved this Agreement, authorized the execution hereof in counterparts,
and directed that it be submitted for shareholder approval.
D. As a condition and inducement to One Valley's willingness to enter
into this Agreement, immediately after the execution and delivery of this
Agreement, One Valley and
FFVA Financial will enter into a Stock Option Agreement, dated as of the date
hereof (the "Option Agreement"), in the form attached hereto as Exhibit A,
pursuant to which FFVA Financial will grant to One Valley an option to purchase
authorized but unissued shares of FFVA Financial's common stock, par value $.10
per share, upon the terms and conditions therein contained.
E. One Valley and FFVA Financial intend, and it is a condition hereof,
that the Merger (as defined below) constitute a tax-free reorganization.
AGREEMENT
Now, therefore, for and in consideration of the premises and the mutual
agreements hereinafter set forth, and in accordance with the provisions of
applicable law, the parties agree as follows:
SECTION 1
THE PLAN OF MERGER
1.1 The Merger. On the Closing Date, FFVA Financial shall merge with
and into One Valley, under the Articles of Incorporation of One Valley (the
"Merger"). One Valley shall be the surviving corporation (hereinafter sometimes
called the "Surviving Corporation").
1.2 Effects of Merger. On the Closing Date, the corporate name and
existence of FFVA Financial shall cease and all of its purposes, powers and
objects, and all of its rights,
2
assets, liabilities and obligations, shall pass to and vest in One Valley as the
Surviving Corporation without any conveyance or transfer, and One Valley as the
Surviving Corporation shall continue to be governed by the laws of the State of
West Virginia and shall also succeed to all rights, assets, liabilities and
obligations of FFVA Financial in accordance with the West Virginia Corporation
Act. Upon the Closing Date of the Merger, the separate existence and corporate
organization of FFVA Financial shall cease.
SECTION 2
ARTICLES OF INCORPORATION; BYLAWS;
BOARD OF DIRECTORS AND OFFICERS
2.1 Articles of Incorporation. The Articles of Incorporation of One
Valley shall continue unchanged as the Articles of Incorporation of One Valley
as the Surviving Corporation. From and after the Closing Date, said Articles of
Incorporation, as the same may be amended from time to time as provided by law,
shall be the Articles of Incorporation of the Surviving Corporation.
2.2 Bylaws. The Bylaws of One Valley as in effect on the Closing Date
shall continue as the Bylaws of the Surviving Corporation until the same shall
thereafter be altered, amended or repealed in accordance with law, its Articles
of Incorporation, or said Bylaws.
2.3 Directors and Officers. Except as provided in Section 11.3, the
directors and officers of One Valley on the Closing Date shall continue as the
directors and officers of the Surviving Corporation and shall hold office as
prescribed in the Bylaws of the Surviving Corporation and applicable law until
their successors shall have been elected and shall qualify.
3
SECTION 3
CONVERSION OF SHARES AND OPTIONS
3.1 Conversion of Shares. On the Closing Date:
(a) All issued and outstanding shares of common stock of One Valley
shall remain issued and outstanding.
(b) Each share of common stock of FFVA Financial then issued and
outstanding, excluding any shares held in the treasury of FFVA Financial shall
be converted by the Merger into 1.05 (one and five hundredths) shares of common
stock of One Valley ("Fixed Exchange Ratio"). Each person who, but for the
provisions of this Section 3.1 (b), would be entitled to a fractional share
interest in the common stock of One Valley as a result of the conversion, upon
surrender of certificates theretofore representing shares of common stock of
FFVA Financial, shall receive in lieu thereof an amount in cash equal to such
fraction multiplied by the closing price for the common stock of One Valley
reported on the New York Stock Exchange on the business day immediately prior to
the Closing Date. Shares of One Valley common stock shall be issued with
associated rights pursuant to the terms of its Shareholder Protection Rights
Agreement, dated as of October 18, 1995, between One Valley Bancorp, Inc., and
One Valley Bank, National Association (as rights agent).
(c) Shareholders of One Valley asserting dissenters' rights under the
laws of the State of West Virginia shall have their rights determined pursuant
to W. Va. Code ss.ss.31-1-122 and 123 and shall be entitled to cash payment
pursuant to the terms and provisions of said law with funds to be provided by
One Valley.
4
(d) From and after the Closing Date, the holders of the certificates
representing common stock of FFVA Financial shall cease to have any rights with
respect to such shares and their sole right shall be to receive cash and common
stock of One Valley as herein provided.
(e) If One Valley shall, at any time prior to the Closing Date, (i)
issue a dividend in shares of One Valley common stock, (ii) combine the
outstanding shares of One Valley common stock into a smaller number of shares,
(iii) subdivide the outstanding shares of One Valley common stock, or (iv)
reclassify the shares of One Valley common stock, then, in any such event, the
Fixed Exchange Ratio (as set forth in Section 3.1(b) hereof) shall be adjusted
by multiplying the Fixed Exchange Ratio by a fraction the numerator of which is
equal to the number of shares of One Valley common stock outstanding immediately
after the happening of such event and the denominator of which is equal to the
number of shares of One Valley common stock outstanding immediately prior to the
happening of such event.
3.2 Exchange of Certificates. As soon as practicable after the Closing
Date, the certificates representing the outstanding shares of FFVA Financial
shall be surrendered to Xxxxxx Trust and Savings Bank, or to such other entity
as One Valley may direct, as agent ("Exchange Agent") for One Valley and, upon
such surrender, the Exchange Agent shall issue and deliver in substitution
therefore, certificates representing the number of shares of common stock of One
Valley into which such surrendered shares have been converted as hereinbefore
provided, and cash in lieu of fractional shares (without interest). Certificates
representing shares of FFVA Financial which are not surrendered shall be deemed
for all purposes to evidence the ownership of the number of shares of common
stock of One Valley into which said shares of FFVA Financial shall have been
converted as hereinbefore set forth and the right to receive cash in the amount
determined pursuant to Section 3.1; provided, however, that One Valley will not
5
distribute to the holder of an unsurrendered certificate for common stock of
FFVA Financial dividends declared with respect to common stock of One Valley
until such owner shall surrender such certificate, at which time the holder
thereof shall be paid the amount of the dividends having a record date on or
after the Closing Date theretofore declared with respect to common stock without
interest. All such dividends unclaimed at the end of one year from the Closing
Date shall be repaid by the Exchange Agent to One Valley, and thereafter the
holders of such outstanding certificates shall look, subject to applicable
escheat, unclaimed funds and other laws, as general creditors only to One Valley
for payment thereof.
3.3 Closing of Stock Transfer Books. At the close of business on the
business day immediately preceding the Closing Date, the stock transfer books of
FFVA Financial shall be deemed closed, and no shares of common stock of FFVA
Financial shall thereafter be transferred.
3.4 Conversion of Options. At the Closing Date, each option granted by
FFVA Financial to purchase shares of its common stock pursuant to the "FFVA
Financial Corporation 1994 Stock Option Plan" (the "Stock Option Plan"), which
is outstanding and unexercised immediately prior thereto, shall be converted
into an option to purchase shares of One Valley's common stock on the same terms
and conditions as are in effect immediately prior to the Merger as adjusted as
set forth below. Each such option that is converted shall be converted into an
option to purchase such number of shares of One Valley's common stock at such
exercise price as is determined as provided below (and otherwise having the same
duration and other terms as the original option):
6
(a) the number of shares of One Valley's common stock to be subject to
the new option shall be equal to 1.05 times the number of shares of FFVA
Financial's common stock subject to the original option, rounded, if necessary,
up to the nearest whole share; and
(b) the exercise price per share of One Valley's common stock under the
new option shall be equal to the exercise price per share of FFVA Financial's
common stock under the original option divided by 1.05, rounded, if necessary,
up to the nearest cent. The adjustment provided herein with respect to any
options which are "incentive stock options" (as defined in Section 422 of the
Internal Revenue Code) shall be effected in a manner consistent with Section 424
(a) of the Internal Revenue Code.
FFVA shall take, or shall cause to be taken, all appropriate action
pursuant to the Stock Option Plan prior to the Closing Date to provide for the
conversion of options provided in this Section. One Valley will register the
shares to be issued pursuant to the Stock Option Plan in the Registration
Statement to be filed pursuant to Section 5.11 of this Agreement, and after the
Closing Date will take such other steps, including the filing of a Form S-8, as
may be necessary or appropriate.
SECTION 4
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF FFVA FINANCIAL
Except as set forth in the disclosure schedule to be delivered by FFVA
Financial to One Valley on or before 30 days from the date of this Agreement
(the "Disclosure Schedule"), FFVA Financial represents and warrants to and
covenants with One Valley that:
7
4.1 Organization and Qualification of FFVA Financial and its
Subsidiary. FFVA Financial is duly organized, validly existing and in good
standing as a corporation under the laws of the State of Virginia and has the
corporate power to own all of its properties and assets and to carry on its
business as it is now being conducted. FFVA Financial is qualified to do
business in each jurisdiction in which such qualification is required. FFVA
Financial owns 100% of the issued and outstanding shares of stock of First
Federal Savings Bank of Lynchburg (the "Bank" or the "Subsidiary"), free and
clear of all liens, claims and encumbrances. The Bank is duly organized, validly
existing and in good standing as a federal savings bank under the laws of the
United States and has the corporate power to own all of its assets and to carry
on its business as it is now being conducted. The issued and outstanding shares
of stock of the Bank are all duly authorized, validly issued, fully paid and
nonassessable. Except for its Subsidiary, FFVA Financial has no other direct or
indirect subsidiaries, and does not own 5% or more of the shares of stock of any
other corporation.
4.2 Authorization of Agreement. The Board of Directors of FFVA
Financial has authorized the execution of this Agreement as set forth herein,
and subject to the approval of this Agreement and an amendment to Article 10 of
the FFVA Financial Restated Articles of Incorporation ("Articles Amendment") by
the shareholders of FFVA Financial and all appropriate regulatory authorities as
provided in Virginia Stock Corporation Act (the "VSCA") and the Rules and
Regulations of the Office of Thrift Supervision ("OTS"), FFVA Financial has the
corporate power and is duly authorized to merge with One Valley pursuant to this
Agreement, and upon its execution and delivery (and assuming due execution and
delivery by One Valley) this Agreement is a valid and binding agreement of FFVA
Financial enforceable in accordance with its terms.
8
4.3 No Violation of Other Instruments. Subject to the receipt of the
authorizations set forth in Section 4.2, the execution and delivery of this
Agreement do not, and the consummation of the Merger in accordance with this
Agreement will not, (i) violate any provisions of FFVA Financial's Restated
Articles of Incorporation or Bylaws, (ii) violate any provision of, or result in
the acceleration of any obligation under or in the termination, if applicable,
of, any mortgage, deed of trust, note, lien, lease, franchise, license, permit,
agreement, instrument, order, arbitration award, judgment or decree to which
either FFVA Financial or its Subsidiary is a party or by which any of them is
bound except for such as would not have a material adverse effect on the
financial condition, business, properties, or results of operations of FFVA
Financial and its Subsidiary, taken as a whole, or the transactions contemplated
hereby, (iii) violate or conflict with any other material restriction of any
kind or character by which FFVA Financial or its Subsidiary is bound, or (iv)
enable any person to enjoin the transactions contemplated hereby. After the
approval of this Agreement and the Articles Amendment by the shareholders of
FFVA Financial, FFVA Financial will have taken all action required by law, the
Restated Articles of Incorporation of FFVA Financial, its Bylaws or otherwise to
authorize the execution and delivery of this Agreement and to authorize the
Merger of FFVA Financial with One Valley pursuant to this Agreement and the
consummation of the transactions contemplated hereby.
4.4 Financial Statements. The consolidated balance sheets of FFVA
Financial as of December 31, 1994, 1995 and 1996, and its statements of income
and cash flows for each of the twelve month periods ended on such dates,
heretofore delivered to One Valley, were prepared in accordance with generally
accepted accounting principles consistently applied and those financial
statements, as well as the unaudited balance sheet as of September 30, 1997, and
the statement of income and cash flows for the nine-month period ended September
30, 1997, both of which have been delivered to One Valley, fairly present its
financial condition and results of operations as of such date and for such
period, subject to normal year-end audit adjustments.
9
4.5 No Material Adverse Change. There has been no material adverse
change, or development involving a reasonably foreseeable prospective material
adverse change, in or affecting the financial condition, businesses, properties,
results of operations or prospects of FFVA Financial or its Subsidiary, taken as
a whole, since December 31, 1996.
4.6 Form 10-K Annual Report and Other Reports. FFVA Financial's Annual
Report on Form 10-K filed with the Securities and Exchange Commission for the
fiscal year ended December 31, 1996, heretofore delivered to One Valley, does
not contain, as of the date thereof, an untrue statement of a material fact or
omit to state a material fact necessary to make the statements therein, in light
of the circumstances under which such statements were made, not misleading.
Since January 1, 1995, FFVA Financial has filed with the Securities and Exchange
Commission and the OTS all documents and reports required to be filed and such
reports do not contain, as of their respective dates, an untrue statement of a
material fact or omit to state a material fact necessary to make the statements
therein, in light of the circumstances under which such statements were made,
not misleading. The Bank has filed with the OTS and the Federal Deposit
Insurance Corporation all documents and reports required to be filed and such
reports are accurate and complete in all material respects.
4.7 No Actions, Etc. There are no actions, suits, claims, proceedings
or investigations pending or, to the knowledge of the executive officers or
directors of FFVA Financial or its Subsidiary, threatened or contemplated
against or relating to FFVA Financial or its Subsidiary or any of their
properties which, individually or in the aggregate, could materially and
adversely affect the financial condition, businesses, properties or results of
operations of FFVA Financial and its Subsidiary, taken as a whole, or the
ability of FFVA Financial to consummate the transactions contemplated hereby,
and such officers and directors do not know of any basis for
10
any such action or proceeding. Neither FFVA Financial nor its Subsidiary is
transacting business in violation of any applicable law or regulation which
could materially adversely affect the financial condition, businesses,
properties or results of operations of FFVA Financial or its Subsidiary, taken
as a whole, or the ability of FFVA Financial to consummate the transactions
contemplated hereby.
4.8 Capitalization. The authorized capital stock of FFVA Financial
consists of (i) 11,500,000 shares of common stock, par value of $.10 per share,
4,523,885 of which as of the date hereof are issued and outstanding and are duly
authorized, validly issued, fully paid and nonassessable, and have not been
issued in violation of preemptive rights, and (ii) 500,000 shares of preferred
stock, par value of $.10 per share, none of which is issued. Other than stock
options granted under all of the stock option plan listed in the Disclosure
Schedule covering 603,862 shares of common stock of FFVA Financial (as listed
thereon), there are no options, warrants, calls, reservations for issuance or
commitments of any kind relating to, or securities convertible into, the common
stock of FFVA Financial or its Subsidiary.
4.9 Copies of All Contracts, Leases, Etc. FFVA Financial has furnished
or made available or will promptly furnish or make available to One Valley true
and complete copies of all material contracts, leases and other agreements to
which FFVA Financial or its Subsidiary is a party or by which any of them is
bound, and has listed on the Disclosure Schedule and will furnish to One Valley
true and complete copies of all employment, pension, retirement, stock option,
employee stock option, profit sharing, deferred compensation, consultant, bonus,
group insurance or similar plans with respect to any of the directors, officers
or other employees of FFVA Financial or its Subsidiary.
11
4.10 Undisclosed Liabilities. Neither FFVA Financial nor its Subsidiary
has any material liabilities other than those liabilities disclosed on or
provided for in the balance sheet as of December 31, 1996, and liabilities
incurred since such date in the ordinary course of business consistent with past
practices.
4.11 Title to Properties. FFVA Financial and its Subsidiary have good
and marketable title to all their property and assets set forth in their balance
sheets as of December 31, 1996, except property and assets sold or otherwise
disposed of since December 31, 1996, in the ordinary course of business, subject
to no liens, mortgages, pledges, encumbrances or charges of any kind except
liens reflected on said balance sheet and except liens for taxes and assessments
not delinquent, pledges to secure deposits and such other liens and encumbrances
and imperfections of title as do not materially affect the value of such
property as reflected on said balance sheet and which do not interfere with or
impair its present or continued use, and all of their material leases are in
full force and effect and neither FFVA Financial nor its Subsidiary is in
default in any material respect thereunder.
4.12 Proxy Statement. The information pertaining to FFVA Financial
which has been or will be furnished by or on behalf of FFVA Financial or its
management for inclusion in the Proxy Statement referred to in Section 10 and
the Registration Statement referred to in Section 5.11 or any amendment or
supplement thereto will not contain any untrue statement of a material fact or
omit to state a material fact required to be stated therein or necessary to make
the statements contained therein, in light of the circumstances under which they
are made, not misleading.
4.13 Good Faith. FFVA Financial shall use its reasonable best efforts
in good faith to take or cause to be taken all action required under this
Agreement on its part to be taken as
12
promptly as practicable so as to permit the consummation of this Agreement at
the earliest practicable date and cooperate fully with the other parties to that
end.
4.14 Absence of Regulatory Actions. Neither FFVA Financial nor its
Subsidiary is a party to any cease and desist order, written agreement or
memorandum of understanding with, or a party to any commitment letter or similar
undertaking to, or is subject to any order or directive by, or is a recipient of
any extraordinary supervisory letter from, federal governmental authorities
charged with the supervision or regulation of the operations of any of them nor
has it been advised by any such governmental authority that it is contemplating
issuing or requesting (or is considering the appropriateness of issuing or
requesting) any such order, directive, written agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter, board
resolutions or similar undertaking.
4.15 Employee Benefits.
(a) For purposes of this Agreement the following definitions shall
apply:
1. "Employee Pension Benefit Plan" has the meaning as set forth in
ERISA ss.3(2).
2. "Employee Welfare Benefit Plan" has the meaning set forth in
ERISA ss.3(1).
3. "ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.
4. "Multiemployer Plan" shall mean a plan described in ss.3(37)
and/or ss.4001(a)(3) of ERISA.
5. "FFVA ESOP" shall mean the Bank's Employee Stock Ownership Plan.
13
6. "FFVA Retirement Plan" shall mean the Financial Institutions
Retirement Fund as adopted by the Bank.
7. "FFVA Employee" means an employee of either FFVA Financial or
the Bank.
8. "Employee Benefit Plan(s)" means any one or more of the
following in which a FFVA Employee is a participant in or benefits from as a
result of his employment (whether current or past with either FFVA Financial or
Bank): (a) Employee Pension Benefit Plan, (b) Employee Welfare Benefit Plan or
(c) any other deferred compensation plan, bonus plan, incentive, disability or
group insurance plan, stock option plan, employee stock purchase plan, vacation
plan, severance plan, sick leave plan or policy, holiday plan or policy,
maternity leave or policy, or any other benefit plan, program, agreement
(including employment and severance agreements), arrangements or commitments of
any kind whether or not subject to the requirements of ERISA.
9. "One Valley 401(k) Plan" shall mean the Xxx Xxxxxx Xxxxxxx xx
Xxxx Xxxxxxxx, Inc., 401(k) Plan.
10. "Code" means the Internal Revenue Code of 1986, as amended.
11. "Control Group" shall mean a controlled group of corporations
within the meaning of ss.414(b) of the Internal Revenue Code and entities under
common control within the meaning of ss.414 (c) of the Internal Revenue Code.
(b) Neither currently nor at any time during the preceding five
calendar years has FFVA Financial, or any entity which was in the same Control
Group with FFVA Financial at any time during such five-year period, or its
Subsidiary contributed to or had any obligation to contribute to any
Multiemployer Plan.
14
(c) Neither currently nor in the past has FFVA Financial (i) had any
employees (who were not also employees of the Bank), or (ii) had any direct
obligation to fund or contribute to any Employee Benefit Plan.
(d) Each Employee Benefit Plan will be listed in the Disclosure
Schedule, and copies of such plans and accompanying Summary Plan Descriptions,
if required, have been furnished to One Valley.
(e) Each of the Employee Benefit Plans has been administered in all
material respects in compliance with the applicable requirements of ERISA, the
Code, other federal statutes, applicable federal regulations, applicable State
law (including without limitation State insurance law) and in accordance with
its terms. Each of the FFVA Retirement Plan and the FFVA ESOP has received a
favorable determination letter from the Internal Revenue Service with respect to
"TRA" (as defined in Section 1 of Rev. Proc. 93-39), and FFVA Financial is not
aware of any circumstances likely to result in revocation of such favorable
determination letters. All reports required by any governmental agency with
respect to each such Employee Benefit Plan has been timely and properly filed
and to the extent required, furnished to the participants in such plan. Bank has
paid all costs, benefits, premiums, contributions and any other amounts required
or coming due in connection with the Employee Benefit Plans and no accumulated
funding deficiency, as defined in ss.302(a)(2) of ERISA, exists with respect to
any Employee Benefit Plan. To the best of its knowledge, neither FFVA Financial
nor the Bank nor any fiduciary of any Employee Benefit Plan, has engaged in (i)
a transaction that would subject FFVA Financial or the Bank to any tax, penalty
or liability for prohibited transactions imposed by ERISA or by ss.4975 of the
Code, or (ii) any transaction in violation of ss.406(a) or ss.406(b) of ERISA
(for which no exemption exists under ss.408 of ERISA).
15
(f) With the exception of Employee Pension Benefit Plans and except as
set forth in the Disclosure Schedule, none of the benefits provided under any of
the Employee Benefit Plans are vested, and the Bank retains full authority to
terminate or amend any of the Employee Benefit Plans.
(g) Each Employee Benefit Plan, other than the FFVA Retirement Plan, is
either fully insured and all premiums have been timely paid or, if not fully
insured, adequate reserves have been established on the books of the Bank in
connection with such benefits, and all required contributions have been made to
such plans.
(h) With the exception of the FFVA Retirement Plan, no Employee Benefit
Plan is subject to the provisions of Title IV of ERISA. No liability under
Subtitle C or D of Title IV of ERISA has been or is expected to be incurred by
FFVA Financial or its Subsidiary with respect to any ongoing, frozen or
terminated "single-employer plan', within the meaning of Section 4001 (a) (15)
of ERISA, currently or formerly maintained by either of them, or the
single-employer plan of any entity which is or was in the same Control Group as
FFVA Financial. No notice of a "reportable event", within the meaning of Section
4043 of ERISA for which the 30-day reporting requirement has not been waived,
has been required to be filed for the FFVA Retirement Plan within the 12-month
period ending on the date hereof.
(i) FFVA Financial and the Bank represent and warrant that as of
December 31, 1996, the actuarially determined present value of all "benefit
liabilities", within the meaning of Section 4001 (a) (16) of ERISA (as
determined on the basis of the actuarial assumptions contained in the FFVA
Retirement Plan's most recent actuarial valuation), did not exceed the then
current value of the assets of the FFVA Retirement Plan. FFVA Financial and Bank
further warrant and represent that they have taken no action since that date by
amendment of that plan or
16
otherwise, to increase the actuarially determined present value of the benefit
liabilities of the FFVA Retirement Plan except with respect to changes in normal
eligibility resulting from increased terms of service or compensation changes.
(j) As of the Closing Date the FFVA Retirement Plan will be either (i)
terminated, (ii) amended to cease all future benefit accruals, or (iii) merged
into the One Valley Retirement Plan. The parties agree that the preferred option
is merger of the FFVA Retirement Plan into the One Valley Retirement Plan, if
the merger of the plans can be accomplished without increasing the total
unfunded liability of the One Valley Retirement Plan (as to former FFVA
Employees) in excess of such unfunded liability in the FFVA Retirement Plan as
set forth in Section 4.15(i). The parties agree that at a minimum, participants
in the FFVA Retirement Plan will be entitled to their vested accrued benefit
under that plan as of the Closing Date plus such additional vested accrued
benefit to which they shall be entitled to for years of service with the Bank
subsequent to the Closing Date under the One Valley Retirement Plan.
(k) There has not been any (i) termination of the FFVA Retirement Plan
or (ii) the commencement of any proceeding to terminate such plan pursuant to
ERISA, or otherwise, or (iii) written notice given to FFVA Financial or Bank of
the intention to commence or seek the commencement of any such proceeding.
(l) Within 90 days following the Closing Date, the Bank shall
cause the FFVA ESOP to be terminated in accordance with its provisions. It is
understood that prior to the Closing Date, the Bank may make a final cash
contribution equal to the maximum amount allowable without penalty pursuant to
sections 404 and 415 of the Code with respect to the FFVA ESOP plan year ending
on or before June 30, 1998; provided, however, that the final cash contribution
shall not exceed the greater of the contributions made by the Bank for either
the year
17
1996 or 1997. It is expressly warranted that such termination shall not result
in any additional funding obligation, including but not limited to any
obligation to pay off all stock obligations, to such ESOP and that sufficient
shares of stock held in the FFVA ESOP's Unallocated Stock Fund will be sold
pursuant to the provisions of the plan to fully pay off any stock obligation to
the extent that prior Bank contributions and dividend income on unallocated
stock are not sufficient to pay off such Stock Obligation as of the Closing
Date. Thereafter, any remaining unallocated ESOP assets shall be allocated as
trust earnings based upon account balances. Participants eligible to receive
distributions from the FFVA ESOP upon its termination shall be given the
opportunity to have such distribution transferred to the One Valley 401(k) Plan
pursuant to the provisions of ss.401(a)(31) of ERISA. Notwithstanding the
foregoing, FFVA Financial and the Bank shall make such amendments to the ESOP as
deemed appropriate to effectuate the purposes of the FFVA ESOP Plan and this
Section of the Agreement.
(m) From and after Closing, One Valley shall authorize the Bank to
adopt the One Valley 401(k) Plan and the One Valley Retirement Plan
(collectively "OVB Qualified Plans"). In adopting the OVB Qualified Plans it is
understood that such plans will recognize FFVA Employees years of employment
with Bank only for purposes of eligibility to participate in and vest under such
plans. It is specifically understood that FFVA Employees shall not be entitled
to any past service for benefit accrual purposes under any Employee Pension
Benefit Plans of One Valley, except that if the FFVA Retirement Plan and the One
Valley Retirement Plan are merged pursuant to Section 4.15(j), and in connection
with such merger it is decided that such past service can be granted without
increasing the unfunded liability of the One Valley Retirement Plan in excess of
such amount described in Section 4.15(j). It is further specifically understood
that, notwithstanding any provision hereof to the contrary, FFVA Employees shall
be employees at-will and that after the Closing Date, One Valley and/or the Bank
may alter, amend, or terminate any of its benefit programs covering such
employees.
18
(n) Except as specifically provided elsewhere in this Agreement, Bank
shall continue for the calendar years 1997 and 1998 those Employee Benefits
Plans in existence as of the date of the execution of this Agreement and shall
not adopt any other such plans nor otherwise amend such plans except as
authorized by One Valley. Except as expressly provided for elsewhere in this
Agreement, Bank shall terminate or amend each such plan effective December 31,
1998. Bank shall adopt and One Valley shall authorize such adoption effective
January 1, 1999, of life, disability insurance, health, welfare, vacation and
other fringe benefits (collectively "fringe benefit programs") of the types and
in the amounts and at the contribution levels provided to other similarly
situated employees of One Valley. In determining eligibility, benefit levels and
required contributions under such fringe benefit programs all full time years of
employment with Bank shall be counted and preexisting conditions shall be
treated as such conditions were treated under any such predecessor plan.
(o) Notwithstanding the limitation in (n) above it is understood that
FFVA employees employed by the Bank as of the Closing Date shall (as long as
they otherwise remain eligible under the terms of the Bank's vacation policy) be
entitled to annual vacation and sick leave for 1998 and thereafter equal to the
greater of (i) the number of days of vacation and sick leave to which they were
entitled to in 1997 or (ii) such vacation and sick leave to which they are
entitled to under Bank's policies then in effect.
4.16 Labor Disputes. Neither FFVA Financial nor its Subsidiary is
directly or indirectly involved in or to the knowledge of them threatened
with any labor dispute or trouble or organizational effort, including, without
limitation, matters regarding actual or alleged discrimination by reason of
race, creed, sex, disability or national origin, which might materially and
adversely affect the financial condition, assets, businesses or results of
operations of any of
19
them. Neither FFVA Financial nor its Subsidiary is a party to, nor has ever been
a party to, any collective bargaining agreement.
4.17 Reserve for Possible Loan Losses. The reserve for possible loan
losses shown on the consolidated balance sheet of FFVA Financial as of December
31, 1996, and shown on the unaudited balance sheet of FFVA Financial dated
September 30, 1997, is adequate as of the dates thereof. The reserve for
possible loan losses to be shown on the consolidated balance sheet of FFVA
Financial as of December 31, 1997, and future periods, if any, will be adequate
as of the dates thereof.
4.18 Knowledge as to Conditions. As of the date hereof:
(a) FFVA Financial knows of no reason relating to FFVA Financial
why the approvals, consents and waivers of governmental authorities referred to
in Sections 8.1 (b) and 8.1 (c) should not be obtained in a timely manner and
without the imposition of a condition of the type referred to in Section 8.1(g);
(b) FFVA Financial and its Subsidiary are not aware of any
conditions or provisions of any actions, reports of examinations or similar
regulatory reports or findings which is anticipated to delay or precludes FFVA
Financial or its Subsidiary from entering into the Agreement or obtaining prompt
regulatory approval of all applications to be filed in connection with the
transaction contemplated by this Agreement, including but not limited to
compliance with the Community Reinvestment Act ("CRA"); and
(c) Provided that shares of common stock of FFVA Financial held by
FFVA Financial as authorized but unissued shares are reissued before the Closing
Date pursuant to
20
Section 4.22 (i), FFVA Financial and its Subsidiary are not aware of any reason
relating to FFVA Financial why the Merger will not be treated as a "pooling of
interests" for accounting purposes.
4.19 Taxes.
(a) FFVA Financial and Subsidiary have each filed on a timely
basis all Federal Income Tax Returns and all other federal, state, municipal and
other tax returns which each of them is required to file, and each has paid all
taxes shown to be due on such returns and, in the opinion of its respective
Chief Executive and Financial Officers, has adequately reserved for all current
taxes;
(b) Neither the Internal Revenue Service nor any other taxing
authority is now asserting against FFVA Financial or Subsidiary, or, to the
knowledge of either of them, threatening to assert against any of them, any
deficiency or claim for additional taxes, interest or penalty;
(c) There is no pending, or to the knowledge of FFVA Financial or
its Subsidiary, threatened examination of the Federal Income Tax Returns of FFVA
Financial or its Subsidiary and, except for tax years still subject to the
assessment and collection of additional federal income taxes under the
three-year period of limitations prescribed in Section 6501(a) of the Internal
Revenue Code, no tax year of FFVA Financial or its Subsidiary remains open to
the assessment and collection of additional Federal Income Taxes; and
(d) There is no pending or, to the knowledge of FFVA Financial or
Subsidiary, threatened examination of State Tax (the "Virginia Taxes") returns
of FFVA
21
Financial or any of its Subsidiary and, except for tax years still subject to
the assessment and collection of additional Virginia Taxes under the applicable
statutes of limitations, no tax year of FFVA Financial or its Subsidiary remains
open to the assessment and collection of additional taxes.
4.20 Absence of Certain Changes. Since December 31, 1996:
(a) There has not been any damage, destruction or loss by reason
of fire, flood, accident or other casualty (whether insured or not insured)
materially and adversely affecting the assets, financial condition or operations
of FFVA Financial or its Subsidiary;
(b) Except in the ordinary course of business, neither FFVA
Financial nor its Subsidiary has disposed of, or agreed to dispose of, any of
its material properties or assets, nor has any of them leased to others, or
agreed to so lease, any of such material properties or assets;
(c) Except for the exercise of stock options there has not been
any change in the authorized, issued or outstanding capital stock of FFVA
Financial or its Subsidiary, except as provided for in this Agreement, or any
material change in the outstanding debt of FFVA Financial or its Subsidiary,
other than changes due to payments in accordance with the terms of such debt and
FHLB advances and reverse repurchase agreements to meet funding needs of the
Bank in the ordinary course of business;
(d) No change has occurred in the personnel who are key personnel
with respect to the operations of FFVA Financial or Subsidiary, nor has there
been any increase in the compensation or fees payable by either FFVA Financial
or its Subsidiary to their directors or officers other than increases in the
ordinary course of business in accordance with the personnel
22
policies of FFVA Financial or its Subsidiary, or any material increase in any
bonus, insurance, pension or other Employee Benefit Plan, payment or arrangement
for or with any of such directors or officers;
(e) Neither FFVA Financial nor its Subsidiary has made any material
loan or advance other than in the ordinary course of business;
(f) Neither FFVA Financial nor its Subsidiary has made any expenditure
or major commitment for the purchase, acquisition, construction or improvement
of any material asset or assets which in the aggregate would be material;
(g) Neither FFVA Financial nor its Subsidiary has entered into any
other material transaction, contract or lease or incurred any other material
obligation or liability;
(h) The Bank has not incurred any unusual or extraordinary loan losses;
(i) There has not been any other event, condition or development of any
kind which materially and adversely affects the assets, financial condition or
results of operations of FFVA Financial and its Subsidiary, taken as a whole,
and neither FFVA Financial nor its Subsidiary has knowledge of any such event,
condition or development which may materially and adversely affect the assets,
financial condition or operations of FFVA Financial and its Subsidiary, taken as
a whole; and
(j) FFVA Financial and its Subsidiary are, and have been, in
substantial compliance with all environmental laws and regulations, and there is
no suit, claim, action, demand, executive or administrative order, directive,
investigation or proceeding pending, or, to
23
the knowledge of FFVA Financial or its Subsidiary, threatened, before any court,
governmental agency or board or other forum against FFVA Financial or its
Subsidiary for alleged noncompliance with, or liability under, any environmental
law or relating to the release into the environment of any hazardous material or
oil.
4.21 Negative Covenants. Except as otherwise expressly contemplated
hereby, between the date hereof and the Closing Date, or the time when this
Agreement terminates as provided herein, neither FFVA Financial nor its
Subsidiary, respectively, will, without the prior written consent of One Valley,
which consent shall not be unreasonably withheld:
(a) Make any change in its authorized capital stock or corporate
structure;
(b) Issue any shares of its capital stock, securities convertible
into its common stock or any long-term debt securities of FFVA Financial or its
Subsidiary, other than shares of capital stock issued pursuant to the exercise
of outstanding stock options granted prior to the date of this Agreement under
the Stock Option Plan; provided, however, that FFVA Financial shall, following
approval of the Merger by its shareholders and receipt of all requisite
regulatory approvals, issue shares of its common stock held as authorized but
unissued shares, which issuance is necessary in order that the Merger be treated
as a "pooling of interests" for accounting purposes pursuant to Section 4.22
(i);
(c) Issue or grant any options, warrants or other rights to
purchase shares of its common stock or preferred stock;
(d) Declare or pay any dividends or other distributions on any
shares of common stock, except a cash dividend in an amount not to exceed
fifteen cents ($.15) per share
24
per quarter, in accordance with past practice, for each quarter prior to the
Closing Date, to be paid on or before the Closing Date;
(e) Purchase, redeem or otherwise acquire, or agree to purchase, redeem
or acquire, for consideration any shares of its capital stock, securities
convertible into its common stock or any long-term debt securities of FFVA
Financial or its Subsidiary;
(f) Enter into or amend (except as otherwise specifically contemplated
by this Agreement or disclosed in the Disclosure Schedule) any Employee Benefit
Plan, consultant, or similar plan in respect of any of its directors, officers
or other employees or increase its contribution to any Employee Benefit Plan;
(g) Take any action materially and adversely affecting the transactions
contemplated hereby or this Agreement or the financial condition, businesses,
properties or results of operations of FFVA Financial and its Subsidiary, taken
as a whole;
(h) Acquire any other company or acquire any branch or deposits or,
other than in the ordinary course of business, any assets of any other company;
(i) Mortgage, pledge or subject to a lien or any other encumbrance any
of its assets, dispose of any of its assets, incur or cancel any debts or claims
or take any other action not in the ordinary course of its business as
heretofore conducted;
(j) Except as may be necessary to comply with this Agreement, amend its
Restated Articles of Incorporation or Bylaws;
25
(k) Sell, pledge or otherwise dispose of or encumber any of its stock,
or any of the stock of its Subsidiary or change the capital structure of any of
them;
(l) Sell any securities from its investment portfolio, except in the
ordinary course of business;
(m) Increase the compensation of or pay any benefit to any director,
officer or employee during or for the calendar years 1997 or 1998 other than in
the ordinary course of business and, in any event, in the aggregate not in
excess of 5% of the total salary expense of the Bank; or
(n) Enter into any agreement to do any of the foregoing.
4.22 Additional Covenants. Except as otherwise contemplated by this
Agreement, FFVA Financial covenants and agrees:
(a) That, subsequent to the date of this Agreement and prior to the
Closing Date, it will operate its business and the businesses of its Subsidiary
only in the normal course and in a normal manner consistent with past practices;
(b) That it will take no action which would adversely affect or delay
the ability of One Valley, FFVA Financial or its Subsidiary to obtain any
necessary approvals, consents or waivers of any governmental authority required
for the transaction contemplated hereby or to perform its covenants and
agreements on a timely basis under this Agreement;
26
(c) That immediately upon the execution of this Agreement it will
direct its accountants and attorneys to give One Valley access, upon reasonable
notice, to all relevant and material information, documents and working papers
pertaining to FFVA Financial and Subsidiary that it may reasonably request;
(d) That it will use its reasonable best efforts in good faith to take
or cause to be taken all action required under this Agreement on its part to be
taken as promptly as practicable so as to permit the consummation of the Merger
at the earliest possible date and cooperate fully with the other parties to that
end;
(e) That neither FFVA Financial nor its directors, officers or
representatives or agents will, directly or indirectly, take any action to
solicit, support or encourage any offer or proposal from any other person to
acquire FFVA Financial or its assets, or shares of its common stock, or of its
Subsidiary, or engage in negotiations with or provide information to such person
with respect to such offer or proposal; provided, however that FFVA Financial
may engage in negotiations or provide information if the Board of Directors of
FFVA Financial concludes after receipt of legal advice from its counsel, that
their fiduciary duties to the shareholders of FFVA Financial so require;
provided further, however, in the case of any action pursuant to the immediately
preceeding proviso regarding the specific terms and structure of a possible
Acquisition Transaction (as hereinafter defined) (but excluding actions taken to
determine whether an unsolicited offer by a third party is a bona fide offer),
One Valley may, in its sole discretion, terminate this Agreement at any time
before the Closing Date. FFVA Financial will immediately notify One Valley if
any such negotiations occur, if such information is provided, or if such offer
or proposal is made, and will keep One Valley informed of any such negotiations,
offers, proposals, or transactions. Nothing contained in this Section 4.22 (e)
shall prohibit the
27
Board of Directors of FFVA Financial from complying with Rule 14e-2 promulgated
under the Securities Exchange Act of 1934;
(f) That it will promptly advise One Valley of any material adverse
change in the financial condition, assets, businesses, results of operations or
prospects of FFVA Financial or its Subsidiary, and any material breach of any
representation, warranty, covenant or agreement made by FFVA Financial or its
Subsidiary in this Agreement known to FFVA Financial;
(g) That it will maintain in full force and effect adequate fire,
casualty, public liability, employer fidelity and other insurance coverage in
accordance with prudent practices to protect FFVA Financial and Subsidiary
against losses for which insurance can reasonably be obtained;
(h) That it will consult with One Valley as to the form and substance
of any press release or other public disclosure concerning matters related
hereto, and, except as required by law or within good faith, shall not issue
such release or disclosure without the reasonable consent of One Valley;
(i) That it will issue approximately 750,000 shares of its common stock
held as authorized but unissued shares, or such other amount as the parties may
agree, at such time as is necessary in order that the Merger be treated as a
"pooling of interests" for accounting purposes, and shall take no action which
would have the effect of precluding treatment of the Merger as a "pooling of
interests" for accounting purposes, and will cooperate fully with One Valley to
assure that the Merger can be treated as a "pooling of interests" for accounting
purposes;
28
(j) That it will immediately after the execution of this Agreement
enter into the Option Agreement with One Valley granting to One Valley the right
to purchase a specified number of shares of common stock of FFVA Financial under
certain specified conditions;
(k) That it will enforce its rights under, and the provisions of, all
confidentiality agreements it has or may have with third parties; and
(l) That it will take, in accordance with applicable law or NASDAQ
rules and its Restated Articles of Incorporation and Bylaws, all action
necessary to convene an appropriate meeting of its shareholders to consider and
vote upon the approval and adoption of this Agreement, the Articles Amendment,
and any other matters required to be approved by its shareholders for
consummation of the Merger (including any adjournment or postponement) as
promptly as practicable after the registration statement is declared effective.
Except to the extent that its Board of Directors concludes after receipt of
legal advice from its counsel that its fiduciary duties require otherwise, its
Board of Directors shall recommend such approval and it shall take all
reasonable, lawful action to solicit such approval by its shareholders.
4.23. Dissenters' Rights. The shareholders of FFVA Financial do not
have dissenters' rights pursuant to Virginia Code ss. 13.1 - 730.c.
4.24 Takeover Law FFVA Financial has taken all action required to be
taken by it in order to exempt this Agreement, the Stock Option Agreement and
the transactions contemplated hereby and thereby from, and this Agreement, the
Stock Option Agreement and the transactions contemplated hereby and thereby (the
"Covered Transactions") are exempt from, the requirements of any "moratorium",
"control share", "fair price", "affiliate transaction", "business combination"
or other antitakeover laws and regulations of any state (collectively, "Takeover
29
Laws"), including, without limitation, the Commonwealth of Virginia, and
including, without limitation, Sections 13.1-725 through 13.1-728 of the VSCA
(because a majority of FFVA Financial's disinterested directors approved such
transactions for such purposes prior to any "determination date" with respect to
One Valley) and Sections 13.1-728.1 through 13.1-728.9 of the VSCA.
SECTION 5
REPRESENTATIONS, WARRANTIES AND COVENANTS
OF ONE VALLEY
One Valley represents and warrants to and covenants with FFVA Financial that:
5.1 Organization and Qualification of One Valley. One Valley is a
corporation duly organized, validly existing and in good standing under the laws
of the State of West Virginia and has the corporate power to own all of its
properties and assets and to carry on its business as it is now being conducted.
Each of the banking subsidiary companies owned by One Valley is duly organized,
validly existing and in good standing as either a state banking corporation
under the laws of West Virginia or a national bank under the laws of the United
States and each has the corporate power to own all of its assets and to carry on
its business as it is now being conducted. One Valley is duly registered as a
bank holding company with the Board of Governors of the Federal Reserve. One
Valley owns directly or indirectly 100% of the issued and outstanding capital
sock of each of its Significant Subsidiaries (as defined in Regulation S-X),
free and clear of all liens, claims and encumbrances.
5.2 Authorization of Agreement. The Board of Directors of One Valley
has authorized the execution of this
30
Agreement as set forth herein, and subject to the approval of this Agreement by
the shareholders of One Valley and all appropriate regulatory authorities, One
Valley has the corporate power to execute and deliver this Agreement, and has
taken all action required by law, its Articles of Incorporation, its Bylaws or
otherwise to authorize such execution and delivery, the Merger and the
consummation of the transactions contemplated hereby, and upon its execution and
delivery (and assuming due execution and delivery by FFVA Financial) this
Agreement is a valid and binding agreement of One Valley enforceable in
accordance with its terms.
5.3 No Violation of Other Instruments. Subject to the receipt of the
authorizations set forth in Section 5.2, the execution and delivery of this
Agreement do not, and the consummation of the Merger will not, (i) violate any
provision of the Articles of Incorporation or Bylaws of One Valley, (ii) violate
any provision of, or result in the acceleration of any obligation under or in
the termination, if applicable, of, any mortgage, deed of trust, note, lien,
lease, franchise, license, permit, agreement, instrument, order, arbitration
award, judgment or decree to which One Valley or any of its subsidiaries is a
party or by which it is bound except for such as would not have a material
adverse effect on the financial condition, business, properties, or results of
operations of One Valley and its subsidiaries, taken as a whole, or the
transactions contemplated hereby, (iii) violate or conflict with any other
material restriction of any kind or character to which One Valley or any of its
Subsidiaries is subject, or (iv) enable any person to enjoin the transactions
contemplated hereby. After approval of this Agreement by the shareholders of One
Valley, by the Board of Governors of the Federal Reserve, the West Virginia
Board of Banking and Financial Institutions, and the State Corporation
Commission of the Commonwealth of Virginia, One Valley will have taken all
action required by law and its Articles of Incorporation and Bylaws necessary to
authorize the execution and delivery of this Agreement and to authorize the
Merger of FFVA Financial with One Valley and the consummation of the
transactions contemplated hereby.
31
5.4 Regulatory Approvals. Prior to the Closing Date, One Valley,
separately and jointly with FFVA Financial, shall use its reasonable best
efforts in good faith to take or cause to be taken as promptly as practicable
all such steps as shall be necessary to obtain: (i) the prior approval of the
Merger by the Board of Governors of the Federal Reserve System under the Bank
Holding Company Act of 1956, as amended, the State Corporation Commission of the
Commonwealth of Virginia, and the West Virginia Board of Banking and Financial
Institutions; and (ii) all other consents and approvals of governmental agencies
as are required by law or otherwise, and shall do any and all things deemed by
One Valley and FFVA Financial to be necessary or appropriate in order to cause
the Merger to be consummated on the terms provided herein.
5.5 Financial Statements. One Valley's consolidated balance sheets as
of December 31, 1994, 1995 and 1996, and its statement of income for each of the
twelve months ended on such dates, heretofore delivered to FFVA Financial, were
prepared in accordance with generally accepted accounting principles
consistently applied and those financial statements, as well as the unaudited
balance sheet as of September 30, 1997, and the statement of income for the
nine-month period ended September 30, 1997, fairly present its financial
condition and results of operations as of such respective dates and for such
respective periods, subject to normal year-end audit adjustments.
5.6 No Material Adverse Change. There has been no material adverse
change, or development involving a reasonably foreseeable prospective material
adverse change, in or affecting the financial condition, businesses, properties
or results of operations of One Valley and its subsidiaries, taken as a whole,
since December 31, 1996.
32
5.7 Form 10-K Annual Report and Other Reports. One Valley's Annual
Report on Form 10-K filed with the Securities and Exchange Commission for the
year ended December 31, 1996, heretofore delivered to FFVA Financial, does not
contain, as of the date thereof, any untrue statement of a material fact or omit
to state any material fact necessary to make the statements therein, in light of
the circumstances under which such statements were made, not misleading. Since
January 1, 1994, One Valley has filed with the Securities and Exchange
Commission all documents and reports required to be filed and such reports do
not contain, as of their respective dates, an untrue statement of a material
fact or omit to state a material fact necessary to make the statements therein,
in light of the circumstances under which such statements were made, not
misleading.
5.8 No Actions, Etc. There are no actions, proceedings or
investigations pending or, to the knowledge of the executive officers or
directors of One Valley, threatened or contemplated against or relating to One
Valley or any of its subsidiaries or any of its properties, which, individually
or in the aggregate, could materially and adversely affect the financial
condition, businesses, properties or operations of One Valley and its
subsidiaries, taken as a whole, or the ability of One Valley to consummate the
transactions contemplated hereby, and such officers and directors do not know of
any basis for any action or proceeding. Neither One Valley, nor any of its
subsidiaries, is transacting business in violation of any applicable law or
regulation which could materially adversely affect the financial condition,
businesses, properties or operations of One Valley and its subsidiaries, taken
as a whole, or the ability of One Valley to consummate the transactions
contemplated hereby.
5.9 Capitalization. As of the date hereof, the authorized capital stock
of One Valley consists of (i) Forty Million shares of common stock, par value of
$10 per share, of which 27,172,342 are, as of December 9, 1997, issued and
outstanding and are fully paid and
33
nonassessable, and (ii) One Million shares of preferred stock, par value of $10
per share, none of which is issued.
5.10 Good Faith. One Valley shall use its reasonable best efforts in
good faith to take or cause to be taken all action required under this Agreement
on its part to be taken as promptly as practicable so as to permit the
consummation of this Agreement at the earliest practicable date and cooperate
fully with the other parties to that end, including obtaining the approval of
the New York Stock Exchange ("NYSE") for the listing of the One Valley common
stock issuable hereunder, subject to official notice of issuance.
5.11 Registration. One Valley will cause a Registration Statement (or
other appropriate form) to be filed with and declared effective by the
Securities and Exchange Commission, appropriate agencies regulating securities,
and other governmental agencies having jurisdiction, with respect to the
securities to be issued in conjunction with the Merger. The information
pertaining to One Valley which will appear in the Registration Statement and
Proxy Statement will contain no untrue statement of any material fact or omit to
state any material fact required to be stated therein or necessary to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
5.12 Copies of Public Information One Valley has made or will make
available for review by FFVA Financial all information publicly available
concerning One Valley and all pension, retirement, thrift, group insurance or
similar plans with respect to any of the directors, officers or other employees
of One Valley or its subsidiaries.
5.13 Undisclosed Liabilities; Taxes. One Valley has no material
liabilities other than those liabilities disclosed on or provided for in its
balance sheet as of December 31, 1996, and
34
liabilities incurred since such date in the ordinary course of business. One
Valley has paid all federal, state and local taxes now due and payable and there
are no material tax items now in dispute or anticipated to be disputed.
5.14 Title to Properties. One Valley has good and marketable title to
all its property and assets set forth on its balance sheet as of December 31,
1996, except property and assets sold or otherwise disposed of since December
31, 1996, in the ordinary course of business, subject to no liens, mortgages,
pledges, encumbrances or charges of any kind except liens reflected on said
balance sheet and except liens for taxes and assessments not delinquent, pledges
to secure deposits, and such other liens and encumbrances and imperfections of
title as do not materially affect the value of such property as reflected on
said balance sheet and which do not interfere with or impair its present or
continued use, and all of its leases are in full force and effect and One Valley
is not in default thereunder.
5.15 Absence of Regulatory Actions. Neither One Valley nor any of its
banking subsidiaries is a party to any cease and desist order, written agreement
or memorandum of understanding with, or a party to any commitment letter or
similar undertaking to, or is subject to any order or directive by, or is a
recipient of any extraordinary supervisory letter from, or has adopted any board
resolutions at the request of, federal or state governmental authorities charged
with the supervision or regulation of the operations of any of them nor has it
been advised by any such government authority that it is contemplating issuing
or requesting (or is considering the appropriateness of issuing or requesting)
any such order, directive, written agreement, memorandum of understanding,
extraordinary supervisory letter, commitment letter, board resolutions or
similar undertaking.
35
5.16 Labor Disputes. One Valley is not directly or indirectly involved
in or threatened with any labor dispute or trouble or organizational effort,
including, without limitation, matters regarding actual or alleged
discrimination by reason of race, creed, sex, disability or national origin,
which might materially and adversely affect its financial condition, assets,
businesses or results of operations.
5.17 Reserve for Possible Loan Losses. The reserve for possible loan
losses shown on the consolidated balance sheet of One Valley as of December 31,
1996, and shown on the unaudited balance sheet of One Valley dated September 30,
1997, is adequate as of the dates thereof. The reserve for possible loan losses
to be shown on the consolidated balance sheet of One Valley as of December 31,
1997, and future periods, if any, will be adequate as of the dates thereof.
5.18 Knowledge as to Conditions. As of the date hereof, One Valley
knows of no reason relating to One Valley why the approvals, consents and
waivers of governmental authorities referred to in Sections 8.1 (b) and 8.1 (c)
should not be obtained in a timely manner; One Valley and One Valley
Subsidiaries are not aware of any conditions or provisions of any actions,
reports of examinations or similar regulatory reports or findings which is
anticipated to delay or precludes One Valley or any of One Valley Subsidiaries
from entering into the Agreement or obtaining prompt regulatory approval of all
applications to be filed in connection with the transaction contemplated by this
Agreement, including but not limited to compliance with the Community
Reinvestment Act ("CRA").
5.19 Other Transactions. One Valley has had, and will continue to have,
negotiations for the acquisition of other organizations. Nothing contained
herein shall in any manner limit the ability of One Valley to acquire additional
banking institutions or other corporations or entities,
36
either before or after the Closing Date, for such consideration (cash, notes,
common or preferred stock) and upon such terms and conditions as One Valley
deems appropriate. Notwithstanding the foregoing, One Valley will not, and will
cause its subsidiaries to not, make or agree to make any acquisition or take any
action that materially adversely affects its ability to consummate the
transaction contemplated hereby in a reasonably timely manner.
5.20 Press Release. One Valley will consult with FFVA Financial as to
the form and substance of any press release or other public disclosure
concerning matters related hereto, and, except as required by law or within good
faith, shall not issue such release or disclosure without the consent of FFVA
Financial.
5.21 Indemnification. One Valley shall indemnify, and advance expenses
(including legal fees and expenses) in matters that may be subject to
indemnification to, persons who served as directors and officers of FFVA
Financial and its Subsidiary on or before the Closing Date of the Merger with
respect to liabilities and claims (and related expenses) made against them
resulting from their service as such prior to the Closing Date of the Merger in
accordance with and subject to the requirements and other provisions of One
Valley's Articles of Incorporation and Bylaws in effect on the date of this
Agreement and applicable provisions of law to the same extent as One Valley is
obliged thereunder to indemnify and advance expenses to its own directors and
officers with respect to liabilities and claims made against them resulting from
their service as such to One Valley.
5.22 Employee Benefits. Each of One Valley's employee benefit plans has
been administered in all material respects in compliance with the applicable
requirements of ERISA, the Code, other federal statutes, applicable federal
regulations, applicable state law (including without limitation state insurance
law) and in accordance with its terms. All reports required by
37
any governmental agency with respect to each such employee benefit plan has been
timely and properly filed and to the extent required furnished to the
participants in such plan. One Valley has paid all costs, benefits, premiums and
any other amounts coming due in connection with the employee benefit plans and
no accumulated funding deficiency, as defined in ss.302(a)(2) of ERISA, exists
with respect to any employee benefit plan. One Valley has not engaged in a
transaction that would subject One Valley to any tax, penalty or liability for
prohibited transactions imposed by ERISA or by ss.4975 of ERISA. One Valley has
not engaged in any transaction in violation of ss.406(a) or ss.406(b) of ERISA
(for which no exemption exists under ss.408 of ERISA).
5.23 Environmental Matters. One Valley is, and has been, in substantial
compliance with all environmental laws and regulations, and there is no suit,
claim, action, demand, executive or administrative order, directive,
investigation or proceeding pending, or, to the knowledge of One Valley,
threatened, before any court, governmental agency or board or other forum
against One Valley for alleged noncompliance with, or liability under, any
environmental law or relating to the release into the environment of any
hazardous material or oil.
5.24 Shareholder Approval. One Valley will take, in accordance with
applicable law or NYSE rules and its Articles of Incorporation and Bylaws, all
action necessary to convene an appropriate meeting of its shareholders to
consider and vote upon the approval and adoption of this Agreement and any other
appropriate matters to be approved by its shareholders for consummation of the
Merger (including any adjournment or postponement) as promptly as practicable
after the registration statement is declared effective. Except to the extent
that its Board of Directors concludes after receipt of legal advice from its
counsel that its fiduciary duties require otherwise, its Board of Directors
shall recommend such approval and it shall take all reasonable, lawful action to
solicit such approval by its shareholders.
38
SECTION 6
INVESTIGATION AND CONFIDENTIALITY
6.1 Investigation. Prior to the Closing Date, either party may directly
and through its representatives, make such reasonable investigation of the
assets and business of the other party and its subsidiaries as deemed necessary
or advisable. Each party and its representatives shall have, at reasonable times
after the date of execution hereof, during normal business hours and upon
reasonable request, full access to the premises and to all the relevant and
material books and records of the other party and its subsidiaries.
6.2 Confidentiality. One Valley and FFVA Financial each agree to treat
as strictly confidential and agree not to divulge to any other person, natural
or corporate (other than employees of, and attorneys and accountants for, such
party) any proprietary financial statements, schedules, contracts, agreements,
instruments, papers, documents and other information relating to FFVA Financial
or One Valley (as the case may be) by which it may come to know or which may
come into its possession during the course of its investigation in connection
with the transaction contemplated hereby, of FFVA Financial or One Valley, as
the case may be, and, if the Merger contemplated hereby are not consummated for
any reason, One Valley agrees promptly to return to FFVA Financial (and FFVA
Financial to One Valley) all written proprietary material furnished in
connection with such investigation; and thereafter all such information shall
continue to not be disclosed by One Valley and FFVA Financial and their
directors, officers, employees, or advisors to third parties without One
Valley's or FFVA Financial's written consent, as the case may be.
39
SECTION 7
NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES
Other than Section 5.21 hereof, the representations and warranties
included or provided herein shall not survive the Closing Date.
SECTION 8
CONDITIONS PRECEDENT; CLOSING DATE
8.1 Conditions Precedent. The consummation of this Agreement and the
Merger is conditioned upon the following:
(a) The shareholders of FFVA Financial and One Valley shall have
approved this Agreement and any required charter amendments by such vote as may
be required by law or the rules of any stock exchange;
(b) No governmental authority of competent jurisdiction shall have
enacted, issued, promulgated, enforced or entered any statute, rule, regulation,
judgment, decree, injunction or other order (whether temporary, preliminary or
permanent) which is in effect and prohibits consummation of the transactions
contemplated by this Agreement.
(c) The Federal Reserve, the State Corporation Commission of the
Commonwealth of Virginia, and the Board of Banking and Financial Institutions of
the State of West Virginia shall have approved the acquisition of control of
FFVA Financial and Subsidiary by One Valley;
40
(d) The Registration Statement shall have become effective under
the 1933 Act, no stop order suspending the effectiveness of such Registration
Statement shall be in effect and no proceedings for such purpose shall have been
initiated or threatened by or before the Securities and Exchange Commission. All
state securities and "blue sky" permits or approvals required (in the opinion of
One Valley) to carry out the transactions contemplated by this Agreement shall
have been received;
(e) All other consents, approvals and permissions and the
satisfaction of all the requirements prescribed by law which are necessary to
the carrying out of the transactions contemplated hereby shall have been
procured;
(f) All delay periods and all periods for review, objection or
appeal of or to any of the consents, approvals or permissions required with
respect to the consummation of the Merger and this Agreement shall have expired;
(g) Unless waived by One Valley, the approvals referred to in
subparagraphs (b), (c) and (d) hereof shall not have required the divestiture or
cessation of any significant part of the present operations conducted by One
Valley, FFVA Financial, and their respective subsidiaries, taken as a whole, and
shall not have imposed any other condition which One Valley reasonably deems to
be materially disadvantageous or burdensome;
(h) Unless waived by One Valley, the representations and
warranties of FFVA Financial contained in this Agreement shall be correct on and
as of the Closing Date in all material respects with the same effect as though
made on and as of such date, except as affected by the transactions contemplated
by this Agreement and except for changes which are not, in the
41
aggregate, material and adverse to the financial condition, businesses,
properties or operations of FFVA Financial, and FFVA Financial shall have
performed in all material respects all its obligations and agreements hereunder
theretofore to be performed by it; and One Valley shall have received on the
Closing Date an appropriate certificate to the foregoing effect dated the
Closing Date and executed on behalf of FFVA Financial by one or more appropriate
executive officers of FFVA Financial;
(i) Unless waived by FFVA Financial, the representations and
warranties of One Valley contained in this Agreement shall be correct on and as
of the Closing Date in all material respects with the same effect as though made
on and as of such date, except as affected by the transactions contemplated by
this Agreement and except for changes which are not, in the aggregate, material
and adverse to the financial condition, businesses, properties, results of
operations or prospects of One Valley, and One Valley shall have performed in
all material respects all of its obligations and agreements hereunder
theretofore to be performed by it; and FFVA Financial shall have received on the
Closing Date an appropriate certificate to the foregoing effect dated the
Closing Date and executed on behalf of One Valley by one or more appropriate
executive officers;
(j) One Valley shall have received from legal counsel to FFVA
Financial a written opinion pertaining to the transactions herein provided for,
dated the Closing Date, in form and substance acceptable to counsel for One
Valley, and FFVA Financial shall have received from legal counsel to One Valley
a customary written opinion pertaining to the transactions herein provided for,
dated the Closing Date, in form and substance acceptable to counsel for FFVA
Financial;
42
(k) Unless waived by One Valley, One Valley shall have received an
opinion of Xxxxxxxx & Xxxxxxxx, special counsel to One Valley, dated the Closing
Date, to the effect that, on the basis of facts, representations and assumptions
set forth in such opinion, the Merger constitutes a reorganization under Section
368 of the Internal Revenue Code. In rendering its opinion, Xxxxxxxx & Xxxxxxxx
may require and rely upon representations contained in letters from FFVA
Financial, One Valley and shareholders of FFVA Financial;
(l) Unless waived by FFVA Financial, FFVA Financial shall have
obtained an opinion of counsel to the effect that, as to each holder of FFVA
Financial common stock who receives One Valley common stock in exchange for his
or her FFVA Financial common stock, no gain will be recognized by such
shareholder on such exchange; the basis of the One Valley common stock to be
received by such FFVA Financial shareholders will be the same as the basis of
the FFVA Financial common stock surrendered in exchange therefor; and the
holding period of the One Valley common stock to be received by such FFVA
Financial shareholders includes the holding period of the FFVA Financial common
stock surrendered in exchange therefor, provided their FFVA Financial common
stock was held as a capital asset at the time of the exchange;
(m) FFVA Financial shall have delivered to One Valley a list of
all persons known to FFVA Financial who may be deemed to be "affiliates" of FFVA
under Rule 145 of the Securities Act of 1933, as amended, and shall use its best
efforts to cause each affiliate to deliver to One Valley prior to the Closing
Date a letter substantially in the form attached hereto as Exhibit B;
(n) Unless waived by One Valley, FFVA Financial shall have issued
up to 750,000 shares of its common stock held as authorized but unissued shares;
43
(o) The shares of One Valley common stock to be issued in the
Merger shall have been approved for listing on the NYSE, subject to official
notice of issuance; and
(p) The Board of Directors of FFVA Financial shall have received
an opinion at the time of the mailing of the proxy statement to the FFVA
Financial shareholders from Sandler X'Xxxxx & Partners, L.P., to the effect that
as of the day of the mailing of such proxy statement that the consideration to
be received by the holders of FFVA Financial common stock in the Merger is fair
to such holders from a financial point of view.
8.2 Closing Date. The time and date of closing (the "Closing Date")
shall be selected by One Valley and shall be within thirty (30) days of
approvals of this Agreement by the shareholders of FFVA Financial or the receipt
of all of the approvals (including any statutory waiting periods) referred to in
Section 8.1(b), (c), (d), (e) and (f), whichever is later. One Valley shall
cause the Articles of Merger with respect to the Merger to be filed with the
Secretary of State of West Virginia and of the Commonwealth of Virginia.
SECTION 9
TERMINATION OF AGREEMENT
9.1 Grounds for Termination. This Agreement and the transactions
contemplated hereby may be terminated at any time prior to the Closing Date
either before or after the meeting of the shareholders of FFVA Financial:
(a) By mutual consent of FFVA Financial and One Valley;
44
(b) By One Valley if there has been a material misrepresentation
or breach of warranty in the representations and warranties of FFVA Financial
set forth herein, or by FFVA Financial if there has been a material
misrepresentation or breach of warranty in the representations and warranties of
One Valley set forth herein, which material misrepresentation or breach of
warranty has not been cured to the satisfaction of the non-breaching party
within 30 days thereof;
(c) By either FFVA Financial or One Valley upon written notice to
the other, if the Closing Date does not occur on or before midnight on October
1, 1998;
(d) By either FFVA Financial or One Valley if the Merger shall
violate any nonappealable final order, decree or judgment of any court or
governmental body having competent jurisdiction;
(e) In the event that the Disclosure Schedule or One Valley's
investigation of FFVA Financial and Subsidiary discloses matters which One
Valley in good faith believes either (i) to be inconsistent in any material and
adverse respect with any of the representations or warranties of FFVA Financial
(without giving effect to the Disclosure Schedule) or (ii) in the reasonable
judgment of the Board of Directors of One Valley either (A) to be of such
significance as to materially and adversely affect the financial condition or
results of operations of FFVA Financial and the Subsidiary, taken as a whole, or
(B) to deviate materially and adversely from the financial statements for the
year ended December 31, 1996, of FFVA Financial, the Board of Directors of One
Valley may elect to terminate this Agreement by giving notice of termination to
FFVA Financial within or at the end of the 30 day period following the date of
the delivery by FFVA Financial to One Valley of the Disclosure Schedule;
provided, however, that actions taken by FFVA Financial as contemplated in this
Agreement concerning
45
the FFVA ESOP, FFVA Retirement Plan, or the Stock Option Plan shall not trigger
One Valley's right to terminate hereunder or otherwise violate any term of this
Agreement and that matters or items disclosed in material reviewed by One Valley
prior to the execution hereof as listed in a pre-signing disclosure letter may
not serve as a basis for any right of One Valley to terminate hereunder;
(f) In the event that FFVA Financial's investigation of One Valley
and its subsidiaries discloses matters which FFVA Financial in good faith
believes either (i) to be inconsistent in any material and adverse respect with
any of the representations or warranties of One Valley or (ii) in the reasonable
judgment of the Board of Directors of FFVA Financial either (A) to be of such
significance as to materially and adversely affect the financial condition or
results of operations of One Valley and its subsidiaries taken as a whole, or
(B) to deviate materially and adversely from the financial statements for the
year ended December 31, 1996, of One Valley, the Board of Directors of FFVA
Financial may elect to terminate this Agreement by giving notice of termination
to One Valley within or at the end of the 30 day period following the date of
this Agreement; provided, however that matters or items disclosed in material
reviewed by FFVA Financial prior to the execution hereof as listed in a
pre-signing disclosure letter may not serve as a basis for any right of FFVA
Financial to terminate hereunder;
(g) By One Valley in accordance with the provisions of Section
4.22(e);
(h) By One Valley in the event FFVA Financial fails to execute the
Option Agreement specified in ss.4.22(k) of this Agreement within twenty-four
hours following the execution of this Agreement;
46
(i) By FFVA Financial at any time during the five-day period
commencing after the Determination Date if both of the following conditions are
satisfied:
(1) the Converted Value shall be less than $36.54; and
(2) (i) the quotient obtained by dividing the Closing Value by
$40.94 (such number being referred to herein as the "One Valley Ratio") shall be
less than (ii) 90% of the quotient obtained by dividing the Index Price on the
Determination Date by the Index Price on the Starting Date;
subject, however, to the following three sentences. If FFVA Financial determines
not to consummate the Merger pursuant to this Subsection, it shall give prompt
written notice of election to terminate to One Valley, which notice may be
withdrawn at any time prior to the close of the ten-day period commencing after
the Determination Date. During the five-day period commencing with its receipt
of such notice, One Valley shall have the option to elect to increase the Fixed
Exchange Ratio to a number such that the Converted Value is no less than $36.54.
The election contemplated by the preceding sentence shall be made by giving
notice to FFVA Financial of such election and the revised Fixed Exchange Ratio,
whereupon no termination shall have occurred pursuant to this Subsection and
this Agreement shall remain in effect in accordance with its terms (except as
the Fixed Exchange Ratio shall have been so modified), and any references in
this Agreement to "Fixed Exchange Ratio" shall thereafter be deemed to refer to
the Fixed Exchange Ratio as adjusted pursuant to this Subsection. If the Closing
Date shall occur during the five-day period such option is in effect, the
Closing Date shall be extended until the fifth business day following the close
of such five-day period.
For purposes of this Subsection, the following terms shall have the
meanings indicated:
47
"Converted Value" shall mean the product of the Closing Value
multiplied by the Fixed Exchange Ratio of 1.05.
"Closing Value" shall mean the average of the closing prices per share
of the One Valley common stock on the NYSE Composite Transactions Tape (as
reported by The Wall Street Journal) for the ten trading days (determined by
excluding days on which the NYSE is closed) immediately preceding the
Determination Date (the tenth day to be determined by counting the day preceding
the Determination Date as the first day).
"Determination Date" shall mean the tenth calendar day preceding the
date designated by One Valley as the Closing Date.
"Index Group" shall mean the nineteen (19) bank holding companies
listed below, the common stocks of all of which shall be publicly traded and as
to which there shall not have been, since the Starting Date and before the
Determination Date, any public announcement of a proposal for such company to be
acquired or for such company to acquire another company or companies in
transactions with a value exceeding 25% of the acquirior's market
capitalization. In the event that any such company or companies are removed from
the Index Group, the weights (which have been determined based upon the number
of shares of outstanding common stock) shall be redistributed proportionately
for purposes of determining the Index Price. The 19 bank holding companies and
the weights attributed to them as follows:
-------------- ----------------------------------------------------------------
Bank Holding Companies % Weighting
-------------- ----------------------------------------------------------------
FMER FirstMerit Corp. 10.48%
-------------- ----------------------------------------------------------------
FVB First Xxxxxxxx Xxxxx Inc. 8.26%
-------------- ----------------------------------------------------------------
48
-------------- ----------------------------------------------------------------
KSTN Keystone Financial Inc. 8.16%
-------------- ----------------------------------------------------------------
NCBC National Commerce Bancorp. 8.00%
-------------- ----------------------------------------------------------------
FULT Xxxxxx Financial Corp. 7.56%
-------------- ----------------------------------------------------------------
PFGI Provident Financial Group Inc. 6.92%
-------------- ----------------------------------------------------------------
VLY Valley National Bancorp 6.66%
-------------- ----------------------------------------------------------------
BNK CNB Bancshares Inc. 5.34%
-------------- ----------------------------------------------------------------
WILM Wilmington Trust Corp. 5.30%
-------------- ----------------------------------------------------------------
RIGS Xxxxx National Corp. 4.79%
-------------- ----------------------------------------------------------------
HUBC HUBCO Inc. 4.45%
-------------- ----------------------------------------------------------------
OLDB Old National Bancorp 4.37%
-------------- ----------------------------------------------------------------
CBC Centura Banks Inc. 4.17%
-------------- ----------------------------------------------------------------
SUSQ Susquehanna Bancshares Inc. 3.55%
-------------- ----------------------------------------------------------------
CCB CCB Financial Corp. 3.27%
-------------- ----------------------------------------------------------------
FMBI First Midwest Bancorp Inc. 2.64%
-------------- ----------------------------------------------------------------
FFBC First Financial Bancorp. 2.61%
-------------- ----------------------------------------------------------------
FCNCA First Citizens BancShares Inc. 2.00%
-------------- ----------------------------------------------------------------
PRK Park National Corp. 1.49%
--------------
-------------- ----------------------------------------------------------------
Total 100.00%
==============
-------------- ----------------------------------------------------------------
"Index Price" on a given date shall mean the weighted average (weighted
in accordance with the "% Weighting" listed above) of the closing sales prices
of the companies composing the Index Group (determined as provided with respect
to the Determination Value).
"Starting Date" shall mean the date prior to the date of this
Agreement.
If any company belonging to the Index Group or One Valley declares or
effects a stock dividend, reclassification, recapitalization, split-up,
combination, exchange of shares, or similar
49
transaction between the Starting Date and the Determination Date, the prices for
the common stock of such company or One Valley and any calculations hereunder
shall be appropriately adjusted for the purposes of applying this Subsection.
9.2 Effect of Termination; Right to Proceed. In the event this
Agreement shall be terminated pursuant to Section 9.1, all further obligations
of One Valley and FFVA Financial under this Agreement shall terminate (other
than this Section 9.2 and Sections 6.2, 9.3, 18.2, 18.3, and 18.4 hereof, all of
which shall remain in full force and effect) without further liability of the
parties to one another, except for any liability arising out of any uncured
willful breach of any covenant or other agreement contained in this Agreement or
any fraudulent breach of a representation or warranty.
9.3 Return of Documents in Event of Termination. In the event of the
termination of this Agreement for any reason, each party shall forthwith deliver
to the other all documents, work papers and other material obtained from it
relating to the transactions contemplated hereby, whether obtained before or
after the execution hereof, including information obtained pursuant to Section 6
hereof, and will take reasonable steps to have any information so obtained kept
confidential.
SECTION 10
MEETINGS OF SHAREHOLDERS
FFVA Financial and One Valley shall each take all steps necessary to
call and hold a special meeting of shareholders, in accordance with applicable
law and the respective Certificate of Incorporation, Restated Articles of
Incorporation, and Bylaws of each of them, as soon as practicable for the
purpose of submitting this Agreement and, in the case of FFVA Financial, the
50
Articles Amendment, to its shareholders for their consideration and approval.
FFVA Financial and One Valley will each prepare and send to its shareholders for
purposes of such meetings a proxy statement, which will be in the form contained
in the Registration Statement on Form S-4, or any amendments thereto, prepared
and filed by One Valley (the "Proxy Statement"). The Boards of Directors of FFVA
Financial and One Valley will each recommend shareholder approval of this
Agreement and will not withdraw such recommendation unless such Board of
Directors concludes (after receipt of legal advice from its counsel) that the
fiduciary duties such persons owe to the shareholders of FFVA Financial or One
Valley, respectively, require otherwise.
SECTION 11
OTHER AGREEMENTS
11.1 Post-Merger Operation of the Bank. Upon the Closing Date or as
soon thereafter as is practicable, it is anticipated that the Bank will be
merged into and become a part of Xxx Xxxxxx Xxxx - Xxxxxxx Xxxxxxxx, National
Association.
11.2 Directors of the Bank. The directors of the Bank on the Closing
Date shall be elected to the Board of Directors of Xxx Xxxxxx Xxxx - Xxxxxxx
Xxxxxxxx, National Association, and shall hold office as prescribed in the
Bylaws and applicable law until their successors shall have been elected and
shall qualify. Directors' fees of those directors shall not be changed for the
first eighteen months following the Closing Date, but thereafter all policies
applicable to directors of One Valley generally (including board fees and
mandatory retirement) shall apply; provided, however, that the mandatory
retirement policy shall be implemented incrementally so as to require the
retirement of not more than two of the former FFVA Financial directors in any
one year.
51
11.3 Director of One Valley. Promptly after the Closing Date, One
Valley shall, by action of its Board of Directors, elect Xxxxx X. Xxxxxxxx, Xx.,
and one other additional person to be designated by FFVA Financial, as members
of the Board of Directors of One Valley, each for a term expiring on the date of
the next Annual Meeting of Shareholders of One Valley. In addition, at its
Annual Meeting of Shareholders to be held in April, 1999, One Valley shall
nominate and recommend Xxxxx X. Xxxxxxxx, Xx., and one other additional person
to be designated by FFVA Financial, each for a three-year term as members of the
Board of Directors of One Valley.
SECTION 12
BROKERS, ETC.
FFVA Financial represents and warrants to One Valley, that no broker,
or finder, or financial analyst except Sandler X'Xxxxx & Partner, L.P., pursuant
to an agreement previously provided to One Valley, has been employed by FFVA
Financial or its Subsidiary, or is entitled to a fee, commission or other
compensation from FFVA Financial or its Subsidiary, with respect to this
Agreement or the transactions contemplated hereby. One Valley represents and
warrants to FFVA Financial, that no broker, or finder, or financial analyst
except Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx, Incorporated, has been employed by
One Valley, or is entitled to a fee, commission or other compensation from One
Valley, with respect to this Agreement or the transactions contemplated hereby.
SECTION 13
GOVERNING LAW; SUCCESSORS AND ASSIGNS;
COUNTERPARTS; ENTIRE AGREEMENT
52
This Agreement (a) shall be governed by and construed under and in
accordance with the laws of the State of West Virginia; (b) shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns, provided, however, that this Agreement may not be
assigned by any party without the written consent of the other parties hereto;
(c) may be executed in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become effective and binding
when one or more counterparts shall have been signed and delivered; and (d)
embodies the entire agreements and understandings between FFVA Financial and One
Valley relating to the subject matter hereof. One Valley shall not enter into
any agreement providing for the acquisition of One Valley unless in connection
with such acquisition the entity effecting such acquisition agrees to assume One
Valley's obligations under this Agreement.
SECTION 14
EFFECT OF CAPTIONS
The captions in this Agreement are included for convenience only and
shall not in any way affect the interpretation or construction of any of the
provisions hereof.
SECTION 15
SEVERABILITY
The Parties expressly agree that it is not the intention of any party
to violate any public policy, law, rule, regulation, treaty or decision of any
government or agency thereof of any state or country. If any provision of this
Agreement is judicially or administratively interpreted to be in violation of
any such provision in any state or country, such provisions, sentences, words,
53
clauses or combination thereof shall be inoperative in each such state or
country; and the remainder of this Agreement shall remain binding upon the
parties hereto in each such state or country with this Agreement as a whole
unaffected elsewhere.
SECTION 16
NOTICES
Any notices or other communications required or permitted hereunder
shall be sufficiently given if sent by registered mail, postage prepaid,
addressed as follows:
To FFVA Financial:
FFVA Financial Corporation
000 Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Xx., President and CEO
With a copy to:
Xxxxxxx X. Xxxxxx, Esquire
Xxxxxxx, Spidi, Sloane & Xxxxx, P.C.
One Franklin Square
0000 X. Xxxxxx, X.X., Xxxxx 000 Xxxx
Xxxxxxxxxx, XX 00000
To One Valley:
One Valley Bancorp, Inc.
Xxx Xxxxxx Xxxxxx
X. X. Xxx 0000
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
Attention: X. Xxxxxx Xxxxxxxx
With a copy to:
Xxxxxxx X. XxXxxxxx, Esquire
One Valley Bancorp of West Virginia, Inc.
Xxx Xxxxxx Xxxxxx
X. X. Xxx 0000
Xxxxxxxxxx, Xxxx Xxxxxxxx 00000
54
or such other addresses as shall be furnished in writing by either party to the
other party. Any such notice or communication shall be deemed to have been given
as of the date so mailed.
SECTION 17
AMENDMENTS
This Agreement may be amended by the written agreement of One Valley
and FFVA Financial and without the approval of the shareholders before or after
the meeting of shareholders at any time prior to the Closing Date with respect
to any of the terms contained herein; provided, however, that if amended after
such meeting of shareholders, no such amendment shall be materially adverse to
the shareholders of FFVA Financial.
SECTION 18
EXPENSES
18.1 General. Except as otherwise provided herein, each of the parties
hereto agrees to pay, without a right of reimbursement from the other party and
whether or not the transactions contemplated by this Agreement shall be
consummated, the costs incurred by it incident to the performance of its
obligations under this Agreement and to the consummation of the Merger and the
other transactions contemplated herein, including the fees and disbursements of
counsel, accountants and consultants employed by such party in connection
therewith; provided, however, that One Valley shall bear the full expense of the
printing and mailing of the proxy statement to be used in connection with the
special meeting of shareholders referenced in Section 10.
55
18.2 Expenses of One Valley. FFVA Financial hereby agrees that if this
Agreement or the transactions contemplated hereby are terminated by One Valley
pursuant to Sections 9.1(b) or 9.1(e) as a result of a willful breach by FFVA
Financial, FFVA Financial shall promptly (and in any event within ten (10)
business days after such termination) pay all Expenses of One Valley. "Expenses
of One Valley" as used in this Section 18.2 shall include all reasonable in
amount and reasonably incurred out-of-pocket expenses of One Valley (including
all fees and expenses of counsel, accountants, investment bankers, experts and
consultants to One Valley and its Affiliates) incurred by it or on its behalf in
connection with its preparations regarding the transactions contemplated by this
Agreement.
18.3 Expenses of FFVA Financial. One Valley hereby agrees that if this
Agreement or the transactions contemplated hereby are terminated by FFVA
Financial pursuant to Section 9.1(b) or 9.1(f) as a result of a willful breach
by One Valley, One Valley shall promptly (and in any event within ten (10)
business days after such termination) pay all Expenses of FFVA Financial. For
purposes of this Section 18.3, the "Expenses of FFVA Financial" shall include
all reasonable out-of-pocket expenses (including all fees and expenses of
counsel, accountants, investment bankers, experts and consultants to FFVA
Financial and its Affiliates) incurred by it or on its behalf in connection with
its preparations regarding the transactions contemplated by this Agreement.
18.4 Termination Fee. (a) FFVA Financial hereby agrees to pay One
Valley and One Valley shall be entitled to payment of, a fee (the "Termination
Fee") of $3.5 million following the occurrence of a Fee Event (as defined
below), provided that One Valley shall have sent written notice of such
entitlement within 90 days after One Valley actually becomes aware of such
occurrence. Such payment shall be made in immediately available funds within
five business days after delivery of a notice from One Valley requesting such
payment. The right to
56
receive the Termination Fee shall terminate if any of the following (a "Fee
Termination Event") occurs prior to a Fee Event: (i) the Closing Date, (ii)
termination of this Agreement in accordance with the provisions hereof if such
termination occurs prior to the occurrence of a Preliminary Fee Event (as
defined below), except termination by One Valley pursuant to Section 9.1(b) or
Section 9.1(g), (iii) termination of this Agreement following the occurrence of
a Preliminary Fee Event and the passage of 18 months after such termination; or
(iv) termination of the Agreement by One Valley pursuant to Section 9.1(b) or
Section 9.1(g) and the passage of 18 months after such termination.
(b) The term "Preliminary Fee Event" shall mean any of the following
events or transactions occurring after the date hereof:
(1) FFVA Financial or its Subsidiary without having received One
Valley's prior written consent, shall have entered into an agreement to engage
in any Acquisition Transaction (as defined below) with any person (the term
"person" for purposes of this Agreement having the meaning assigned thereto in
Section 3(a)(9) of the Securities Exchange Act of 1934, as amended ("Exchange
Act")) other than One Valley or any of its subsidiaries or affiliates or the
Board of Directors of FFVA Financial shall have approved, recommended, publicly
proposed or publicly announced an intention to authorize, recommend, propose or
accept any Acquisition Transaction with any person other than One Valley or any
of its subsidiaries or affiliates. For purposes of this Agreement, "Acquisition
Transaction" shall mean (A) a merger or consolidation, or similar transaction,
involving FFVA Financial or the Bank, (B) a purchase, lease or other acquisition
of all or substantially all of the assets or deposits of FFVA Financial or the
Bank, (C) a purchase or other acquisition (including by way of merger,
consolidation, share exchange or otherwise) of securities representing 10% or
more of the voting power of FFVA Financial or the Bank; provided that the term
"Acquisition Transaction" does
57
not include any internal merger or consolidation involving only FFVA Financial
and its Subsidiary;
(2) (A) any person (other than One Valley or any of its
subsidiaries or affiliates) shall have acquired beneficial ownership or the
right to acquire beneficial ownership of 10% or more of the outstanding FFVA
Financial common stock (the term "beneficial ownership" for purposes of this
Agreement having the meaning assigned thereto in Section 13(d) of the Securities
Exchange Act), or (B) any group (as such term "group" is defined in Section
13(d)(3) of the Securities Exchange Act), other than a group of which any of One
Valley or any of its subsidiaries or affiliates is a member, shall have been
formed that beneficially owns 10% or more of FFVA Financial common stock then
outstanding;
(3) any person other than One Valley or any of its subsidiaries or
affiliates shall have made a bona fide proposal to FFVA Financial or its
shareholders, by public announcement or written communication that is or becomes
the subject of public disclosure, to engage in a Acquisition Transaction
(including, without limitation, any situation in which any person other than One
Valley or any of its subsidiaries or affiliates shall have commenced (as the
term is defined in Rule 14d-2 under the Exchange Act) or shall have filed a
registration statement under the Securities Act of 1933, as amended, with
respect to, a tender offer or exchange offer to purchase any FFVA Financial
common stock such that, upon consummation of such offer, such person would own
or control 10% or more of the then outstanding FFVA Financial common stock (such
an offering referred to herein as a "Tender Offer" or an "Exchange Offer,"
respectively);
(4) after a proposal is made by a third party to FFVA Financial or
its shareholders to engage in an Acquisition Transaction, or such third party
states its intention to
58
FFVA Financial to make such a proposal if this Agreement terminates, FFVA
Financial shall have breached any representation, covenant or obligation
contained in this Agreement and such breach would entitle One Valley to
terminate this Agreement under Section 9.1(b) (without regard to the cure period
provided for therein unless such cure is promptly effected without jeopardizing
consummation of the Merger); or
(5) the holders of FFVA common stock shall not have approved this
Agreement at the meeting of shareholders set forth in Section 10 hereof or the
meeting of shareholders shall not have been held or shall have been canceled
prior to termination of this Agreement, in each case only after any person
(other than One Valley or any of its subsidiaries or affiliates) shall have (A)
made, or disclosed an intention to make, a bona fide proposal to engage in an
Acquisition Transaction or (B) commenced a Tender Offer or filed a registration
statement under the Securities Act of 1933, as amended, with respect to an
Exchange Offer.
(c) The term "Fee Event" shall mean either of the following events
or transactions occurring after the date hereof:
(1) the acquisition by any person, other than One Valley or any of
its subsidiaries or affiliates, alone or together with such person's affiliates
and associates, or group (as defined in Section 13(d)(3) of the Securities
Exchange Act), of beneficial ownership of 30% or more of the outstanding shares
of FFVA Financial common stock; or
(2) the occurrence of a Preliminary Fee Event described in clause
(b)(1) above, except that the percentage referred to in clause (C) shall be 30%
or more of the outstanding shares of FFVA Financial common stock.
59
SECTION 19
AGREEMENT TO TAKE NECESSARY AND DESIRABLE ACTIONS
FFVA Financial and One Valley each agree to use their reasonable best
efforts to execute and deliver such other documents, certificates, agreements
and other writings and to take such other actions as may be necessary or
desirable in order to consummate or implement expeditiously the transactions
contemplated by this Agreement.
IN WITNESS WHEREOF, One Valley and FFVA Financial have each caused this
Agreement to be executed on its behalf by its officers thereunto duly authorized
all as of the day and year first written above.
ONE VALLEY BANCORP, INC.
By____________________________________________
Its President and Chief Executive Officer
FFVA FINANCIAL CORPORATION
By____________________________________________
Its President and Chief Executive Officer
60