EXHIBIT 2.2
STOCK OPTION AGREEMENT
EXHIBIT 2.2
STOCK OPTION AGREEMENT
This Stock Option Agreement ("Agreement"), dated as of May 1, 1999, is
between National Commerce Bancorporation ("NCBC") and First Financial
Corporation ("FFC").
RECITALS
FFC and NCBC have executed an Agreement and Plan of Merger ("Merger
Agreement"), of even date with this Agreement, under which FFC will be merged
into NCBC upon completion of the merger ("Merger") contemplated in the Merger
Agreement.
By negotiating and executing the Merger Agreement and by taking actions
necessary or appropriate to effect the transactions contemplated by the Merger
Agreement, NCBC has incurred and will incur substantial direct and indirect
costs (including, without limitation, the costs and management and employee
time) and will forgo the pursuit of certain alternative investments and
transactions.
AGREEMENT
THEREFORE, in consideration of the promises set forth in this Agreement and
in the Merger Agreement, the parties agree as follows:
1. Grant of Option. Subject to the terms and conditions set forth in this
Agreement, FFC irrevocably grants an option ("Option") to NCBC to purchase that
number of authorized but unissued shares of FFC's common stock, $2.50 par value
per share ("FFC Common Stock"), such that immediately following such purchase
NCBC would own 19.5% of the then issued and outstanding shares (as adjusted as
set forth herein) of FFC Common Stock after giving effect to the exercise of
the Option at a per share price in cash (or immediately available funds) equal
to two times the book value of a share of FFC Common Stock as of March 31, 1999
("Option Price").
2. Exercise of Option. Subject to the provisions of this Section 2 and of
Section 13(a) of this Agreement, this Option may be exercised by NCBC as set
forth in Section 5 of this Agreement, in whole only, at any time, in any of the
following circumstances:
(a) FFC or its board of directors enters into an agreement or
recommends to FFC shareholders an agreement (other than the Merger
Agreement) under which any entity, person or group (collectively "Person"),
within the meaning of Section 13(d)(3) of the Securities Exchange Act of
1934, as amended ("Exchange Act"), would: (1) merge or consolidate with,
acquire 9.9% or more of the assets or liabilities of, or enter into any
similar transaction with FFC, or (2) purchase or otherwise acquire
(including by merger, reorganization, consolidation, share exchange or any
similar transaction) securities representing 9.9% or more of FFC's voting
shares;
(b) any Person (other than NCBC or any of its subsidiaries) acquires
the beneficial ownership or the right to acquire beneficial ownership of
securities which, when aggregated with other such securities owned by such
Person, represents 25% or more of the voting shares of FFC (the term
"beneficial ownership" for purposes of this Agreement has the meaning set
forth in Section 13(d) of the Exchange Act, and the regulations promulgated
under the Exchange Act);
(c) after having received a fairness opinion from its financial advisor
that the transaction is fair to FFC shareholders from a financial point of
view, failure of the board of directors of FFC to recommend the Merger to
the shareholders at the time of the calling of the special meeting of the
shareholders pursuant to the Merger Agreement; or
(d) failure of the shareholders to approve by the earliest of (1) the
termination of the Merger Agreement or (2) November 30, 1999, the Merger by
the required affirmative vote at a meeting of the shareholders, because a
third Person (other than NCBC or a subsidiary of NCBC) announces publicly
or communicates, in writing, to FFC a proposal to (1) acquire FFC(by
merger, reorganization, consolidation, the purchase of 9.9% or more of its
assets or liabilities, or any other similar transaction), (2) purchase or
otherwise acquire securities representing 9.9% or more of the voting shares
of FFC or (3) change the composition of the board of directors of FFC.
It is understood and agreed that the Option will become exercisable on the
occurrence of any of the above-described circumstances even though the
circumstance occurred as a result, in part or in whole, of the board of FFC
complying with its fiduciary duties.
Notwithstanding the foregoing, the Option may not be exercised if either (1)
any applicable and required governmental approvals have not been obtained with
respect to such exercise or if such exercise would violate any applicable
regulatory restrictions, or (2) at the time of exercise, NCBC is failing in any
material respect to perform or observe its material covenants or conditions
under the Merger Agreement, unless the reason for such failure is that FFC is
failing to perform or observe its covenants or conditions under the Merger
Agreement.
3. Notice, Time and Place of Exercise. When NCBC wishes to exercise the
Option, NCBC will give written notice of its intention to exercise the Option
and the place and date for the closing of the exercise (which date may not be
later than ten business days from the date such notice is mailed). If any law,
regulation or other restriction will not permit such exercise to be consummated
during this ten-day period, the date for the closing of such exercise will be
within five days following the cessation of the restriction on consummation.
4. Payment and Delivery of Certificate(s). At the closing for the exercise of
the Option or any portion thereof, (a) NCBC and FFC will each deliver to the
other certificates as to the accuracy, as of the closing date, of their
respective representations and warranties under this Agreement, (b) NCBC will
pay the aggregate purchase price for the shares of FFC Common Stock to be
purchased by delivery of a certified or bank cashier's check in immediately
available funds payable to the order of FFC, and (c) FFC will deliver to NCBC a
certificate or certificates representing the shares so purchased.
5. Transferability of the Option and Option Shares. Before the Option, or a
portion of the Option, becomes exercisable in accordance with the provisions of
Section 2 of this Agreement, neither the Option nor any portion of the Option
will be transferable.
6. Representations, Warranties and Covenants of FFC. FFC represents and
warrants to NCBC as follows:
(a) Due Authorization. This Agreement has been duly authorized by all
necessary corporate action on the part of FFC, has been duly executed by a
duly authorized officer of FFC and constitutes a valid and binding
obligation of FFC. No shareholder approval by FFC shareholders is required
by applicable law or otherwise before the exercise of the Option in whole
or in part.
(b) Option Shares. FFC has taken all necessary corporate and other
action to authorize and reserve and to permit it to issue and, at all times
from the date of this Agreement to such time as the obligation to deliver
shares under this Agreement terminates, will have reserved for issuance, at
the closing(s) upon exercise of the Option, the Option Shares (subject to
adjustment, as provided in Section 8 below), all of which, upon issuance
under this Agreement, will be duly and validly issued, fully paid and
nonassessable, and will be delivered free and clear of all claims, liens,
encumbrances and security interests, including any preemptive right of any
of the shareholders of FFC.
(c) No Conflicts. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated by it will violate or
result in any violation of or be in conflict with or constitute a default
under any term of the charter or bylaws of FFC or any agreement,
instrument, judgment, decree, law, rule or order applicable to FFC or any
subsidiary of FFC or to which FFC or any such subsidiary is a party.
(d) Notification of Record Date. At any time from and after the date of
this Agreement until the Option is no longer exercisable, FFC will give
NCBC 30 days prior written notice before setting the record date for
determining the holders of record of the FFC Common Stock entitled to vote
on any matter, to receive any dividend or distribution or to participate in
any rights offering or other matters, or to receive any other benefit or
right, with respect to the FFC Common Stock.
7. Representations, Warranties and Covenants of NCBC. NCBC represents and
warrants to FFC as follows:
(a) Due Authorization. This Agreement has been duly authorized by all
necessary corporate action on the part of NCBC, has been duly executed by a
duly authorized officer of NCBC and constitutes a valid and binding
obligation of NCBC.
(b) Transfers of Common Stock. No shares of FFC Common Stock acquired
upon exercise of the Option will be transferred except in a transaction
registered or exempt from registration under any applicable securities
laws.
(c) No Conflicts. Neither the execution and delivery of this Agreement
nor the consummation of the transactions contemplated by it will violate or
result in any violation of or be in conflict with or constitute a default
under any term of the charter or bylaws of NCBC or any agreement,
instrument, judgment, decree, law, rule or order applicable to NCBC or any
subsidiary of NCBC or to which NCBC or any such subsidiary is a party.
8. Adjustment Upon Changes in Capitalization. In the event of any change in
the FFC Common Stock by reason of stock dividends, split-ups, mergers,
reorganizations, recapitalizations, combinations, exchanges of shares or the
like, the number and kind of shares or securities subject to the Option and the
purchase price per share of Common Stock will be appropriately adjusted. If,
before the Option terminates or is exercised, FFC is acquired by another party,
consolidates with or merges into another corporation or liquidates, NCBC will
thereafter receive, upon exercise of the Option, the securities or properties
to which a holder of the number of shares of Common Stock then deliverable upon
the exercise thereof would have been entitled upon such acquisition,
consolidation, merger, reorganization or liquidation, and FFC will take all
steps in connection with such acquisition, consolidation, merger,
reorganization or liquidation as may be necessary to assure that the provisions
of this Agreement will thereafter be applicable, as nearly as reasonably may be
practicable, in relation to any securities or property thereafter deliverable
upon exercise of the Option.
9. Nonassignability. This Agreement binds and inures to the benefit of the
parties and their successors. This Agreement is not assignable by either party.
10. Regulatory Restrictions. FFC will use its best efforts to obtain or to
cooperate with NCBC in obtaining all necessary regulatory consents, approvals,
waivers or other action (whether regulatory, corporate or other) to permit the
acquisition of any or all Option Shares by NCBC.
11. Remedies. For the purposes of this Agreement, NCBC's sole remedy
hereunder shall be limited to the exercise of the option herein granted.
12. No Rights as Shareholder. This Option, before it is exercised, will not
entitle its holder to any rights as a shareholder of FFC at law or in equity.
Specifically, this Option, before it is exercised, will not entitle the holder
to vote on any matter presented to the shareholders of FFC or, except as
provided in this Agreement, to any notice of any meetings of shareholders or
any other proceedings of FFC.
13. Miscellaneous.
(a) Termination. This Agreement and the Option will terminate upon the
earliest of (1) the mutual agreement of the parties to this Agreement; (2)
the 30th day following the termination of the Merger Agreement for any
reason other than a material noncompliance or default by NCBC with respect
to its obligations under it; or (3) the date of termination of the Merger
Agreement if the termination is due to a
material noncompliance or default by NCBC with respect to its obligations
under it; but if the Option has been exercised before the termination of
this Agreement, then the exercise will close under Section 4 of this
Agreement, even though that closing date is after the termination of this
Agreement. The option granted under this Agreement shall only be
exercisable one (1) time.
(b) Amendments. This Agreement may not be modified, amended, altered or
supplemented, except upon the execution and delivery of a written agreement
executed by the parties.
(c) Severability of Terms. Any provision of this Agreement that is
invalid, illegal or unenforceable is ineffective only to the extent of the
invalidity, illegality or unenforceability without affecting in any way the
remaining provisions or rendering any other provisions of this Agreement
invalid, illegal or unenforceable. Without limiting the generality of the
foregoing, if the right of NCBC to exercise the Option in full for the
total number of shares of FFC Common Stock or other securities or property
issuable upon the exercise of the Option is limited by applicable law, or
otherwise, NCBC may, nevertheless, exercise the Option to the fullest
extent permissible.
(d) Notices. All notices, requests, claims, demands and other
communications under this Agreement must be in writing and must be given
(and will be deemed to have been duly received if so given) by delivery, by
cable, telecopies or telex, or by registered or certified mail, postage
prepaid, return receipt requested, to the respective parties at the
addresses below, or to such other address as either party may furnish to
the other in writing. Change of address notices will be effective upon
receipt.
If to FFC to: First Financial Corporation
0000 Xx. Xxxxxx Xxxx
Xx. Xxxxxx, XX 00000
Attn: Xxxxx Xxxxx, President and
Chief Executive Officer
Fax: (000) 000-0000
Phone: (000) 000-0000
with a copy to: Xxxxxx X. Small
Attorney at Law
000 Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000-0000
Fax: (000) 000-0000
Phone: (000) 000-0000
If to NCBC to: National Commerce Bancorporation
Xxx Xxxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx
Fax: (000) 000-0000
Phone: (000) 000-0000
and
Xxxxxxx X. Xxxxx
Vice President and General Counsel
Fax: (000) 000-0000
Phone: (000) 000-0000
(a) Governing Law and Venue. The parties intend this Agreement and the
Option, in all respects, including all matters of construction, validity
and performance, to be governed by the laws of the State of Tennessee,
without giving effect to conflicts of law principles. Any actions brought
by either party against the other arising under this Agreement must be
filed in Xxxxxx County, Tennessee, and each party consents to personal
jurisdiction in Xxxxxx County.
(b) Counterparts. This Agreement may be executed in several
counterparts, including facsimile counterparts, each of which is an
original, and all of which together constitute one and the same agreement.
(c) Effects of Headings. The section headings in this Agreement are for
convenience only and do not affect the meaning of its provisions.
NATIONAL COMMERCE BANCORPORATION
/s/ Xxxxxxx X. Xxxx, Xx.
By: ___________________________________
Xxxxxxx X. Xxxx, Xx
Vice Chairman
FIRST FINANCIAL CORPORATION.
/s/ Xxxxx Xxxxx
By: ___________________________________
Xxxxx Xxxxx
President and Chief Executive
Officer
