Exhibit 1
[Conformed Copy]
AGREEMENT AND PLAN OF MERGER
dated as of June 18, 1995
by and among
FIRST FIDELITY BANCORPORATION,
FIRST UNION CORPORATION
and
PKC, INC.
TABLE OF CONTENTS
Page
I. THE MERGER; EFFECTS OF THE MERGER.................................. 3
1.01. The Merger.............................................. 3
1.02. Effective Date and Effective Time....................... 3
1.03. Deposit Agreement....................................... 3
1.04. Amendment of FUNC Articles.............................. 4
II. CONSIDERATION...................................................... 4
2.01. Merger Consideration.................................... 4
2.02. Stockholder Rights; Stock Transfers..................... 6
2.03. Fractional Shares....................................... 6
2.04. Exchange Procedures..................................... 6
2.05. Dissenting Stockholders................................. 7
2.06. Anti-Dilution Provisions................................ 7
2.07. Treasury Shares......................................... 7
2.08. Options................................................. 8
III. ACTIONS PENDING MERGER............................................. 8
3.01. Ordinary Course......................................... 8
3.02. Capital Stock........................................... 9
3.03. Dividends, Etc.......................................... 9
3.04. Compensation; Employment Agreements; Etc................ 9
3.05. Benefit Plans........................................... 10
3.06. Acquisitions and Dispositions........................... 10
3.07. Amendments.............................................. 11
3.08. Accounting Methods...................................... 11
3.09. Adverse Actions......................................... 11
3.10. Agreements.............................................. 11
IV. REPRESENTATIONS AND WARRANTIES................................. 11
4.01. Disclosure Letters...................................... 11
4.02. Standard................................................ 12
4.03. Representations and Warranties.......................... 12
V. COVENANTS...................................................... 23
5.01. Reasonable Best Efforts................................. 23
5.02. Stockholder Approvals................................... 23
5.03. Registration Statement.................................. 24
5.04. Press Releases.......................................... 24
5.05. Access; Information..................................... 24
5.06. Acquisition Proposals................................... 25
5.07. Affiliate Agreements.................................... 25
5.08. Certain Modifications; Restructuring Charges............ 26
5.09. Takeover Laws........................................... 26
5.10. No Rights Triggered..................................... 27
5.11. Shares Listed........................................... 27
5.12. Regulatory Applications................................. 27
5.13. Indemnification......................................... 28
5.14. Benefit Plans........................................... 29
5.15. Accountants' Letters.................................... 30
5.16. Registration Rights..................................... 30
5.17. Certain Director and Officer Positions.................. 30
5.18. Notification of Certain Matters......................... 31
VI. CONDITIONS TO CONSUMMATION OF THE MERGER....................... 31
6.01. Shareholder Vote........................................ 31
6.02. Regulatory Approvals.................................... 31
6.03. Third Party Consents.................................... 31
6.04. No Injunction, Etc...................................... 31
6.05. Pooling Letters......................................... 31
6.06. Representations, Warranties and
Covenants of FUNC.................................. 31
6.07. Representations, Warranties and
Covenants of FFB................................... 32
6.08. Effective Registration Statement........................ 32
6.09. Blue-Sky Permits........................................ 32
6.10. Tax Opinion............................................. 32
6.11. Articles of Amendment................................... 32
6.12. NYSE Listing............................................ 33
6.13. Rights Agreements....................................... 33
VII. TERMINATION.................................................... 33
7.01. Termination............................................. 33
7.02. Effect of Termination and Abandonment................... 37
VIII. OTHER MATTERS.................................................... 37
8.01. Survival................................................ 37
8.02. Waiver; Amendment....................................... 37
8.03. Counterparts............................................ 37
8.04. Governing Law........................................... 37
8.05. Expenses................................................ 37
8.06. Confidentiality......................................... 37
8.07. Notices................................................. 38
8.08. Definitions............................................. 39
8.09. Entire Understanding; No Third
Party Beneficiaries................................ 39
8.10. Headings................................................ 40
LIST OF EXHIBITS
EXHIB DESCRIPTION
A FORM OF FFB STOCK OPTION AGREEMENT
B FORM OF VOTING AND SUPPORT AGREEMENT
C FORM OF FUNC STOCK OPTION AGREEMENT
D FORM OF THIRD SUPPLEMENT TO FFB RIGHTS PLAN
E FORM OF THIRD AMENDMENT TO FUNC RIGHTS PLAN
F FORM OF FFB AFFILIATE LETTER
G FORM OF FUNC AFFILIATE LETTER
H REGISTRATION RIGHTS
AGREEMENT AND PLAN OF MERGER, dated as of the 18th day of June,
1995 (this "Plan"), by and among First Fidelity Bancorporation ("FFB"), First
Union Corporation ("FUNC") and PKC, Inc. ("Merger Sub").
RECITALS:
(A) FFB. FFB is a corporation duly organized and existing in
good standing under the laws of the State of New Jersey, with its principal
executive offices located in Philadelphia, Pennsylvania and Newark, New
Jersey. As of the date hereof, FFB has 150,000,000 authorized shares of
common stock, each of $1.00 par value ("FFB Common Stock"), and 10,000,000
authorized shares of preferred stock, each of $1.00 par value ("FFB Preferred
Stock"; and, together with the FFB Common Stock, "FFB Stock"), being composed
of 4,892,837 authorized shares of Series B Convertible Preferred Stock ("FFB
Series B Preferred Stock"), 350,000 authorized shares of Series D Adjustable
Rate Cumulative Preferred Stock ("FFB Series D Preferred Stock"), 1,500,000
authorized shares of Series E Junior Participating Preferred Stock ("FFB
Series E Preferred Stock") and 75,000 authorized shares of Series F 10.64%
Preferred Stock ("FFB Series F Preferred Stock") (no other class or series of
capital stock being authorized), of which 78,824,512 shares of FFB Common
Stock, 4,662,248 shares of FFB Series B Preferred Stock, 350,000 shares of FFB
Series D Preferred Stock, no shares of FFB Series E Preferred Stock and 75,000
shares of FFB Series F Preferred Stock (represented by depositary shares, each
representing a one one-fortieth interest in a share of FFB Series F Preferred
Stock ("FFB Depositary Shares")) were issued and outstanding as of May 31,
1995.
(B) FUNC. FUNC is a corporation duly organized and existing
in good standing under the laws of the State of North Carolina, with its
principal executive offices located in Charlotte, North Carolina. As of the
date hereof, FUNC has 750,000,000 authorized shares of common stock, each of
$3.33 1/3 par value ("FUNC Common Stock"), 40,000,000 authorized shares of
Class A Preferred Stock, no par value ("FUNC Class A Preferred Stock"), and
10,000,000 authorized shares of Preferred Stock, no par value ("FUNC No Par
Preferred Stock"; and, together with the FUNC Class A Preferred Stock, "FUNC
Preferred Stock"; and, together with the FUNC Common Stock and FUNC Class A
Preferred Stock, "FUNC Stock") (no other class or series of capital stock
being authorized), of which 171,065,333 shares of FUNC Common Stock and no
shares of FUNC Preferred Stock were issued and outstanding as of May 31, 1995.
(C) Merger Sub. Merger Sub is a corporation duly organized
and existing in good standing under the laws of the State of New Jersey. As
of the date hereof, Merger Sub has 2,500 authorized shares of common stock,
without par value ("Merger Sub Common Stock"), of which 1,000 shares are
issued and outstanding (no other class of capital stock being authorized).
(D) Stock Option Agreements; Voting and Support Agreement.
As a condition and inducement to FUNC's willingness to enter into this
Plan, following execution and delivery of this Plan, (i) FFB is entering
into a Stock Option Agreement with FUNC (the "FFB Stock Option Agreement")
in substantially the form attached hereto as Exhibit A, pursuant to which
FFB shall grant to FUNC an option to purchase, under certain circumstances,
shares of FFB Common Stock, and (ii) Banco Santander, S.A. (together with
certain of its affiliates, the "Investor") is entering into an agreement
with FFB and FUNC (the "Voting and Support Agreement") in the form attached
hereto as Exhibit B, pursuant to which the Investor, among other things,
has agreed to vote its shares of FFB Stock in favor of the transactions
contemplated hereby. As a condition and inducement to FFB's willingness to
enter into this Plan, following execution and delivery of this Plan, FUNC
is entering into a Stock Option Agreement with FFB (the "FUNC Stock Option
Agreement"; and, together with the FFB Stock Option Agreement, the "Stock
Option Agreements") in substantially the form attached hereto as Exhibit C,
pursuant to which FUNC shall grant to FFB an option to purchase, under
certain circumstances, shares of FUNC Common Stock.
(E) Intention of the Parties. It is the intention of the
parties to this Plan that the Merger (as defined in Section 1.01) shall (i)
be accounted for as a "pooling of interests" under generally accepted
accounting principles and (ii) qualify as a reorganization under Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code").
(F) Approvals. The Board of Directors of each of FFB and
FUNC (i) has determined that this Plan and the transactions contemplated
hereby are in the best interests of FFB and FUNC, respectively, and in the
best interests of their respective stockholders, (ii) has determined that
this Plan and the transactions contemplated hereby are consistent with, and
in furtherance of, its respective business strategies and (iii) has
approved, at meetings of each of such Boards of Directors, this Plan. The
Board of Directors of Merger Sub and FUNC, as the sole stockholder of
Merger Sub, have approved this Plan.
NOW, THEREFORE, in consideration of their mutual promises and
obligations, the parties hereto approve, adopt and make this Plan and
prescribe the terms and conditions hereof and the manner and basis of carrying
it into effect, which shall be as follows:
I. THE MERGER; EFFECTS OF THE MERGER
1.01. The Merger. At the Effective Time (as defined in
Section 1.02):
(A) The Continuing Corporation. FFB shall merge with
and into Merger Sub (the "Merger"), the separate existence of FFB
shall cease and Merger Sub shall survive and continue to exist as
a New Jersey corporation (Merger Sub sometimes being referred to
herein as the "Continuing Corporation" after the Effective Time).
(B) Effect of the Merger. Subject to the satisfaction
or waiver of the conditions set forth in Article VI in accordance
with the terms of this Plan, the Merger shall become effective upon
the filing in the office of the Secretary of State of New Jersey of a
certificate of merger (the "Certificate of Merger"), or such later
date and time as may be set forth in the Certificate of Merger, in
accordance with Section 14A:10-4.1 of the New Jersey Business
Corporation Act (the "NJBCA"). The Merger shall have the effects
prescribed in Section 14A:10-6 of the NJBCA.
(C) Certificate of Incorporation and By-laws. The
certificate of incorporation and by-laws of the Continuing
Corporation shall be those of Merger Sub, as in effect immediately
prior to the Effective Time.
1.02. Effective Date and Effective Time. Subject to the
conditions to the obligations of the parties to effect the Merger as set forth
in Article VI, the parties shall cause the effective date of the Merger (the
"Effective Date") to occur on (1) the third business day to occur after the
last of the conditions set forth in Sections 6.01, 6.02, 6.03 and 6.12 have
been satisfied or waived in accordance with the terms of this Plan or (2) such
other date to which the parties may agree in writing. The time on the
Effective Date when the Merger shall become effective is referred to as the
"Effective Time."
1.03. Deposit Agreement. Unless FUNC shall have entered
into a new deposit agreement with respect to the New FUNC Depositary Shares
(as defined below) at the Effective Time, FUNC shall assume the obligations
of FFB under the Deposit Agreement, dated as of June 28, 1991 (the "Deposit
Agreement"), between FFB and First Fidelity Bank, N.A., as Depositary (the
"Depositary"), and shall execute an instrument confirming such assumption
in form and substance mutually acceptable to FUNC and FFB. The Continuing
Corporation shall instruct the Depositary to treat the shares of New FUNC
Series 3 Preferred Stock (as defined in Section 2.01(F)) received by the
Depositary in exchange for and upon conversion of the shares of FFB Series
F Preferred Stock as new deposited securities under the Deposit Agreement.
In accordance with clause (ii) of the first sentence of Section 4.06 of the
Deposit Agreement, the Receipts (as defined in the Deposit Agreement) then
outstanding shall thereafter represent the shares of New FUNC Series 3
Preferred Stock so received upon conversion and exchange for the shares of
FFB Series F Preferred Stock; and, in accordance with the second sentence
of such Section 4.06, the Continuing Corporation shall, at the request of
FUNC, request that the Depositary call for the surrender of all outstanding
Receipts to be exchanged for new Receipts ("New FUNC Depositary Shares")
specifically describing the New FUNC Series 3 Preferred Stock.
1.04. Amendment of FUNC Articles. At the Effective Time, the
articles of incorporation of FUNC shall be amended to fix the preferences,
limitations and relative rights of the series of FUNC Class A Preferred Stock
the shares of which are to be issued in the Merger pursuant to Article II. On
or prior to the Effective Date, FUNC shall deliver to the Secretary of State
of North Carolina for filing, pursuant to Section 55-10-06 of the Business
Corporation Act of North Carolina (the "NCBCA"), articles of amendment, in
form mutually acceptable to FUNC and FFB, giving effect to the foregoing and
containing any other provisions with respect to the aforementioned series of
FUNC Class A Preferred Stock necessary to permit consummation of the Merger in
accordance with the terms of this Plan (the "Articles of Amendment").
II. CONSIDERATION
2.01. Merger Consideration. Subject to the provisions of this
Plan, at the Effective Time, automatically by virtue of the Merger and without
any action on the part of any stockholder:
(A) Outstanding FUNC Common Stock and Preferred Stock.
Each share of FUNC Common Stock (and each attached right (a "FUNC
Right") issued pursuant to the Shareholder Protection Rights
Agreement, dated December 18, 1990 (as amended, the "FUNC Rights
Agreement"), between FUNC and First Union National Bank of North
Carolina, as Rights Agent) issued and outstanding immediately prior
to the Effective Time shall be unchanged and shall remain issued and
outstanding.
(B) Outstanding Merger Sub Common Stock. Each share of
Merger Sub Common Stock issued and outstanding immediately prior to
the Effective Time shall be unchanged and shall remain issued and
outstanding.
(C) Outstanding FFB Common Stock. Each share
(excluding shares held by FFB or any of its subsidiaries (as
defined in Section 8.08) or by FUNC or any of its subsidiaries, in
each case other than in a fiduciary capacity or as a result of
debts previously contracted ("Treasury Shares")) of FFB Common
Stock (including each attached right (a "FFB Right") issued
pursuant to the Rights Agreement, dated as of August 17, 1989 (as
amended, the "FFB Rights Agreement"), between FFB and First
Fidelity Bank, N.A., as Rights Agent) issued and outstanding
immediately prior to the Effective Time shall become and be
converted into the right to receive 1.35 shares (subject to
possible adjustment as set forth in Sections 2.06 and 7.01(E), the
"Exchange Ratio") of FUNC Common Stock (with the appropriate
number of FUNC Rights, which shall be attached thereto or
represented by Rights Certificates in accordance with the FUNC
Rights Agreement).
(D) Outstanding FFB Series B Preferred Stock. If,
immediately prior to the Effective Time, there shall be issued and
outstanding any shares of FFB Series B Preferred Stock, then each
such share (excluding any Treasury Shares) of FFB Series B Preferred
Stock shall become and be converted into the right to receive one
share of a newly created series of FUNC Class A Preferred Stock ("New
FUNC Series 1 Preferred Stock") having terms (to be set forth in the
Articles of Amendment) substantially identical to those of the FFB
Series B Preferred Stock (but containing a mutually agreed upon
provision limiting FUNC's creation or issuance of shares of FUNC
Preferred Stock to 10,000,000 shares in the aggregate after the
Effective Time for so long as any shares of New FUNC Series 1
Preferred Stock shall be outstanding).
(E) Outstanding FFB Series D Preferred Stock. If,
immediately prior to the Effective Time, there shall be issued and
outstanding any shares of FFB Series D Preferred Stock, then each
such share (excluding any Treasury Shares) of FFB Series D Preferred
Stock shall become and be converted into the right to receive one
share of a newly created series of FUNC Class A Preferred Stock ("New
FUNC Series 2 Preferred Stock") having terms (to be set forth in the
Articles of Amendment) substantially identical to those of the FFB
Series D Preferred Stock.
(F) Outstanding FFB Series F Preferred Stock. If,
immediately prior to the Effective Time, there shall be issued and
outstanding any shares of FFB Series F Preferred Stock, then each
such share (excluding any Treasury Shares and any shares the
recordholder of which properly exercises dissenters' rights of
appraisal to the extent available) of FFB Series F Preferred Stock
shall become and be converted into the right to receive one share of
a newly created series of FUNC Class A Preferred Stock ("New FUNC
Series 3 Preferred Stock"; and, together with the New FUNC Series 1
Preferred Stock and New FUNC Series 2 Preferred Stock, "New FUNC
Preferred Stock") having terms (to be set forth in the Articles of
Amendment) substantially identical to those of the FFB Series F
Preferred Stock.
2.02. Stockholder Rights; Stock Transfers. At the Effective
Time, holders of FFB Common Stock and FFB Preferred Stock shall cease to be,
and shall have no rights as, stockholders of FFB, other than to receive the
consideration provided under this Article II. After the Effective Time, there
shall be no transfers on the stock transfer books of FFB or the Continuing
Corporation of shares of FFB Stock.
2.03. Fractional Shares. Notwithstanding any other provision
hereof, no fractional shares of FUNC Common Stock and no certificates or scrip
therefor, or other evidence of ownership thereof, will be issued in the
Merger; instead, FUNC shall pay to each holder of FFB Common Stock who would
otherwise be entitled to a fractional share an amount in cash determined by
multiplying such fraction by the average of the last sale prices of FUNC
Common Stock, as reported by the New York Stock Exchange (the "NYSE")
Composite Transactions reporting system (as reported in The Wall Street
Journal or, if not reported therein, in another authoritative source), for the
five NYSE trading days immediately preceding the Effective Date.
2.04. Exchange Procedures. (1) As promptly as practicable
after the Effective Date, FUNC shall send or cause to be sent to each former
holder of shares (other than Treasury Shares) of FFB Stock of record
immediately prior to the Effective Date transmittal materials for use in
exchanging such stockholder's certificates formerly representing FFB Stock
("Old Certificates") for the consideration set forth in this Article II. The
certificates representing the shares of FUNC Stock ("New Certificates") into
which shares of such stockholder's FFB Stock are converted on the Effective
Date and any check in respect of fractional share interests or dividends or
distributions which such person shall be entitled to receive will be delivered
to such stockholder only upon delivery to First Union National Bank of North
Carolina, as Exchange Agent (the "Exchange Agent") of Old Certificates
representing all of such shares of FFB Stock (or indemnity satisfactory to
FUNC and the Exchange Agent, if any of such certificates are lost, stolen or
destroyed) owned by such stockholder. No interest will be paid on any such
cash to be paid in lieu of fractional share interests or dividends or
distributions which any such person shall be entitled to receive pursuant to
this Article II upon such delivery. Old Certificates surrendered for exchange
by any Affiliate (as defined in Section 5.07) of FFB shall not be exchanged
for New Certificates until FUNC has received a written agreement from such
person as specified in Section 5.07.
(2) Notwithstanding the foregoing, neither the Exchange Agent
nor the Depositary nor any party hereto shall be liable to any former holder
of FFB Stock or FFB Depositary Shares for any amount properly delivered to a
public official pursuant to applicable abandoned property, escheat or similar
laws.
(3) Notwithstanding any other provisions of this Plan, no
dividends or other distributions with a record date following the 30th day to
occur after the Effective Time shall be paid to any person holding Old
Certificates representing FFB Common Stock until such Old Certificates have
been surrendered for exchange for New Certificates. Subject to the effect of
applicable laws, (i) until such 30th day, there shall be paid to each former
holder of shares of FFB Common Stock, the amount of dividends or other
distributions with a record date after the Effective Time but on or before
such 30th day payable with respect to the shares of FUNC Common Stock into
which such FFB Common Stock has been converted pursuant to Section 2.01 and
(ii) following surrender of any such Old Certificates, there shall be paid to
the holder of the New Certificates issued in exchange therefor, without
interest, at the time of such surrender, the amount of dividends or other
distributions with a record date after such 30th day theretofore payable with
respect to the shares represented thereby.
2.05. Dissenting Stockholders. (1) In accordance with
Section 14A:11-1(1)(a) of the NJBCA, except as set forth in Section
2.05(2), no dissenters' rights of appraisal are available to any holder of
shares of FFB Stock, or to any holder of FFB Depositary Shares. To the
extent necessary to avoid the existence of any such rights, FFB hereby
agrees to use its reasonable best efforts to continue the listing on the
NYSE or another national securities exchange of the shares of FFB Stock
(other than the FFB Series F Preferred Stock), and the FFB Depositary
Shares.
(2) If any record holder of shares of FFB Series F Preferred
Stock shall be entitled to be paid the "fair value" of such shares
("Dissenter's Shares"), as provided in Chapter 14A:11 of the NJBCA, FFB shall
give FUNC notice thereof and FUNC shall have the right to participate in all
negotiations and proceedings with respect to any such demands. FFB shall not,
except with the prior written consent of FUNC, voluntarily make any payment
with respect to, or settle or offer to settle, any such demand for payment.
If any dissenting holder of FFB Series F Preferred Stock shall fail to perfect
or shall have effectively withdrawn or lost any right to dissent that such
holder may have, the shares of FFB Series F Preferred Stock held by such
person shall thereupon be treated as though such shares of FFB Series F
Preferred Stock had been converted into shares of FUNC Series 3 Preferred
Stock pursuant to Section 2.01(F).
2.06. Anti-Dilution Provisions. In the event FUNC changes (or
establishes a record date for changing) the number of shares of FUNC Common
Stock issued and outstanding prior to the Effective Date as a result of a
stock split, stock dividend, recapitalization or similar transaction with
respect to the outstanding FUNC Common Stock and the record date therefor
shall be prior to the Effective Date, the Exchange Ratio shall be
proportionately adjusted.
2.07. Treasury Shares. Each of the shares of FFB Stock
held as Treasury Shares immediately prior to the Effective Time, shall be
canceled and retired at the Effective Time and no consideration shall be
issued in exchange therefor.
2.08. Options. From and after the Effective Time, all
employee and director stock options to purchase shares of FFB Common Stock
(each, an "FFB Stock Option"), which are then outstanding and unexercised,
shall be converted into and become options to purchase shares of FUNC Common
Stock, and FUNC shall assume each such FFB Stock Option in accordance with the
terms of the plan and agreement by which it is evidenced; provided, however,
that from and after the Effective Time (i) each such FFB Stock Option assumed
by FUNC may be exercised solely to purchase shares of FUNC Common Stock, (ii)
the number of shares of FUNC Common Stock purchasable upon exercise of such
FFB Stock Option shall be equal to the number of shares of FFB Common Stock
that were purchasable under such FFB Stock Option immediately prior to the
Effective Time multiplied by the Exchange Ratio and rounding down to the
nearest whole share, with cash being paid for any fractional share interest
that otherwise would be purchasable, and (iii) the per share exercise price
under each such FFB Stock Option shall be adjusted by dividing the per share
exercise price of each such FFB Stock Option by the Exchange Ratio, and
rounding up to the nearest cent. The terms of each FFB Stock Option shall, in
accordance with its terms, be subject to further adjustment as appropriate to
reflect any stock split, stock dividend, recapitalization or other similar
transaction with respect to FUNC Common Stock on or subsequent to the
Effective Date. It is intended that the foregoing assumption shall be
effected in a manner which is consistent with the requirements of Section 424
of the Code, as to any FFB Stock Option that is an "incentive stock option"
(as defined in Section 422 of the Code).
III. ACTIONS PENDING MERGER
From the date hereof until the Effective Time, except as
expressly contemplated in this Plan, (i) without the prior written consent of
FUNC (which consent shall not be unreasonably withheld or delayed) FFB will
not, and (except with respect to Section 3.07) will cause each of its
subsidiaries not to, and (ii) without the prior written consent of FFB (which
consent shall not be unreasonably withheld or delayed) FUNC will not, and
(except with respect to Section 3.07) will cause each of its subsidiaries not
to:
3.01. Ordinary Course. Conduct the business of it and its
subsidiaries other than in the ordinary and usual course or, to the extent
consistent therewith, fail to use reasonable efforts to preserve intact
their business organizations and assets and maintain their rights,
franchises and existing relations with customers, suppliers, employees and
business associates, or take any action that would (i) adversely affect the
ability of any party to obtain any necessary approvals of any Regulatory
Authorities (as defined in Section 4.03(I)) required for the transactions
contemplated hereby without the imposition of a condition or restriction of
the type referred to in the proviso to Section 6.02 or (ii) adversely
affect its ability to perform any of its material obligations under this
Plan.
3.02. Capital Stock. Other than (i) as Previously Disclosed
in Section 4.03(C) of its Disclosure Letter (as defined in Section 4.02), (ii)
in connection with acquisitions of businesses permitted in Section 3.06 or
(iii) under the Deposit Agreement or the relevant Stock Option Agreement, (x)
issue, sell or otherwise permit to become outstanding any additional shares of
capital stock, any stock appreciation rights, or any Rights (as defined in
Section 8.08), (y) enter into any agreement with respect to the foregoing, or
(z) permit any additional shares of capital stock to become subject to new
grants of employee stock options, stock appreciation rights, or similar
stock-based employee rights.
3.03. Dividends, Etc. (1) Make, declare or pay any dividend
(other than (i) in the case of FFB, quarterly cash dividends on FFB Common
Stock payable at a rate not to exceed $0.50 per share (or, beginning with the
first dividend payable during 1996, at a rate not to exceed $.55 per share)
dividends payable on FFB Preferred Stock at a rate not exceeding the rate
provided for in the terms thereof, and dividends from subsidiaries to FFB or
another subsidiary of FFB, as applicable, and (ii) in the case of FUNC
quarterly cash dividends on FUNC Common Stock and dividends from subsidiaries
to FUNC or another subsidiary of FUNC, as applicable) on or in respect of, or
declare or make any distribution on any shares of its capital stock, (2)
except as Previously Disclosed in Section 3.03 of its Disclosure Letter or as
contemplated by Section 5.08(2), directly or indirectly combine, redeem,
reclassify, purchase or otherwise acquire, any shares of its capital stock or
(3) other than as Previously Disclosed in Section 4.03(C) of its Disclosure
Letter or as required by the relevant Stock Option Agreement (or in the case
of FUNC, intercorporate transactions), authorize the creation or issuance of,
or issue, any additional shares of its capital stock or any Rights with
respect thereto. Notwithstanding the foregoing, in all events FFB and FUNC
shall agree to coordinate (on a mutually agreeable basis that will not
materially impair KPMG Peat Marwick LLP's ability to deliver the letters
referred to in Section 6.05) the declaration of dividends (and the record and
payment dates therefor) payable during the period preceding and including the
quarter in which the Effective Date occurs so that FFB and FUNC stockholders
will receive fair dividends and in no event shall FFB and FUNC stockholders
fail to receive a fair dividend during any quarter up to and including the
quarter immediately following the Effective Date.
3.04. Compensation; Employment Agreements; Etc. In the
case of FFB and its subsidiaries, enter into or amend any written
employment, severance or similar agreements or arrangements with any of its
directors, officers or employees, or grant any salary or wage increase or
increase any employee benefit (including incentive or bonus payments),
except for (i) normal individual increases in compensation to employees in
the ordinary course of business consistent with past practice or consistent
with individual increases by FUNC for similarly situated employees of FUNC
(but not exceeding the compensation levels of such FUNC employees) or (ii)
other changes as may be required by law or to satisfy contractual
obligations existing as of the date hereof or additional grants of awards
to newly hired employees consistent with past practice, which to the extent
practicable have been Previously Disclosed in Section 3.04 of its
Disclosure Letter.
3.05. Benefit Plans. In the case of FFB and its subsidiaries,
enter into or modify (except as may be required by applicable law or to
satisfy contractual obligations existing as of the date hereof, which to the
extent practicable have been Previously Disclosed in Section 3.05 of its
Disclosure Letter) any pension, retirement, stock option, stock purchase,
savings, profit sharing, deferred compensation, consulting, bonus, group
insurance or other employee benefit, incentive or welfare contract, plan or
arrangement, or any trust agreement related thereto, in respect of any of its
directors, officers, or other employees, including without limitation taking
any action that accelerates the vesting or exercise of any benefits payable
thereunder.
3.06. Acquisitions and Dispositions. Except as Previously
Disclosed in Section 3.06 of its Disclosure Letter and except for dispositions
and acquisitions of assets in the ordinary and usual course of business
consistent with past practice, dispose of or discontinue any portion of its
assets, business or properties, which is material to it and its subsidiaries
taken as a whole, or merge or consolidate with, or acquire (other than by way
of foreclosures or acquisitions of control in a bona fide fiduciary capacity
or in satisfaction of debts previously contracted in good faith, in each case
in the ordinary and usual course of business consistent with past practice)
all or any portion of, the business or property of any other entity which is
material to it and its subsidiaries taken as a whole (any of the foregoing, a
"Business Combination Transaction"); it being understood, for purposes of this
Section 3.06, that: (1) in the case of FFB (i) Business Combination
Transactions in which the purchase price to be paid or received by FFB and/or
its subsidiaries consists solely of cash in an amount not exceeding $150
million in any one case shall be considered not to be material to FFB and its
subsidiaries taken as a whole and (ii) no Business Combination Transaction
involving the issuance by FFB and/or its subsidiaries of shares of capital
stock would be permissible without FUNC's prior consent; and (2) in the case
of FUNC, (i) Business Combination Transactions in which the purchase price to
be paid or received by FUNC and/or its subsidiaries includes cash in an amount
not exceeding $300 million in any one case or (ii) Business Combination
Transactions in which the purchase price paid by FUNC and/or its subsidiaries
includes shares of FUNC Common Stock in a number not exceeding 4.0% of the
number of such shares outstanding on May 31, 1995 in any one case, shall be
considered not to be material to FUNC and its subsidiaries taken as a whole.
3.07. Amendments. Except, in the case of FUNC, by filing the
Articles of Amendment, amend its articles or certificate of incorporation or
by-laws (or similar constitutive documents) or, except as contemplated in
Section 4.03(P)(2), the FUNC Rights Agreement or FFB Rights Agreement, as the
case may be, redeem the FUNC Rights or FFB Rights, as the case may be, or
adopt any plan or arrangement similar to or as a substitute for the FFB Rights
Agreement or FUNC Rights Agreement, as the case may be.
3.08. Accounting Methods. Implement or adopt any change in
its accounting principles, practices or methods, other than as may be
required by generally accepted accounting principles.
3.09. Adverse Actions. (1) Knowingly take any action that
would, or is reasonably likely to, prevent or impede the Merger from
qualifying (i) for pooling-of-interests accounting treatment or (ii) as a
reorganization within the meaning of Section 368(a) of the Code; provided,
however, that nothing contained herein shall limit the ability of FFB or FUNC
to exercise its rights under either Stock Option Agreement; or (2) knowingly
take any action that is intended or is reasonably likely to result in (x) any
of its representations and warranties set forth in this Plan being or becoming
untrue in any material respect at any time prior to the Effective Time, (y)
any of the conditions to the Merger set forth in Article VI not being
satisfied or (z) a material violation of any provision of this Plan except, in
every case, as may be required by applicable law.
3.10. Agreements. Agree or commit to do anything
prohibited by Sections 3.01 through 3.09.
IV. REPRESENTATIONS AND WARRANTIES
4.01. Disclosure Letters. On or prior to the date hereof,
FUNC has delivered to FFB and FFB has delivered to FUNC a letter (as the case
may be, its "Disclosure Letter") setting forth, among other things, items the
disclosure of which is necessary or appropriate in relation to any or all of
its representations and warranties; provided, that (i) no such item is
required to be set forth in a Disclosure Letter as an exception to a
representation or warranty (it being understood that items to be set forth in
response to Sections 4.03(C), (D)(1) and (2) and (M)(1) are intended as
informational disclosures and not to constitute exceptions to the applicable
representation or warranty) if its absence is not reasonably likely to result
in the related representation or warranty being deemed untrue or incorrect
under the standards established by Section 4.02, and (ii) the mere inclusion
of an item in a Disclosure Letter shall not be deemed an admission by a party
that such item represents a material exception or fact, event or circumstance
or that such item is reasonably likely to result in a Material Adverse Effect
(as defined in Section 8.08).
4.02. Standard. No representation or warranty of FUNC or FFB
contained in Section 4.03 (other than the representations and warranties
contained in (i) Sections 4.03(A) (with respect to the facts set forth in
Recitals A and B), (C) and (U)(ii), which shall be true and correct (except
for inaccuracies which are de minimis in amount) and (ii) Sections
4.03(D)(1)(i)-(iv), (F), (P) and (U)(i), which shall be true and correct in
all material respects) shall be deemed untrue or incorrect, and no party
hereto shall be deemed to have breached a representation or warranty, as a
consequence of the existence of any fact, circumstance or event if such fact,
circumstance or event, individually or taken together with all other facts,
circumstances or events inconsistent with any paragraph of Section 4.03 is not
reasonably likely to, have a Material Adverse Effect.
4.03. Representations and Warranties. Subject to Sections
4.01 and 4.02, FFB hereby represents and warrants to FUNC, and FUNC hereby
represents and warranties to FFB, as follows:
(A) Recitals. In the case of the representations and
warranties of FFB, the facts set forth in Recitals A, E and F of this Plan
with respect to it are true and correct. In the case of the representations
and warranties of FUNC, the facts set forth in Recitals B, C, E and F of this
Plan with respect to it and Merger Sub are true and correct.
(B) Organization, Standing and Authority. It is duly
qualified to do business and is in good standing in the states of the United
States and foreign jurisdictions where its ownership or leasing of property or
the conduct of its business requires it to be so qualified. It has in effect
all federal, state, local, and foreign governmental authorizations necessary
for it to own or lease its properties and assets and to carry on its business
as it is now conducted.
(C) Shares. (1) The outstanding shares of its capital stock
are validly issued and outstanding, fully paid and nonassessable, and subject
to no preemptive rights (and were not issued in violation of any preemptive
rights). Except as Previously Disclosed in Section 4.03(C) of its Disclosure
Letter, there are no shares of its capital stock authorized and reserved for
issuance, it does not have any Rights issued or outstanding with respect to
its capital stock, and it does not have any commitment to authorize, issue or
sell any such shares or Rights, except pursuant to this Plan, the relevant
Stock Option Agreement and the FUNC Rights Agreement or FFB Rights Agreement,
as the case may be. Since May 31, 1995, it has issued no shares of its
capital stock except pursuant to plans or commitments Previously Disclosed in
Section 4.03(C) of its Disclosure Letter.
(2) In the case of the representations and warranties of FFB,
the number of shares of FFB Common Stock which are issuable upon exercise of
FFB Stock Options as of the date hereof are Previously Disclosed in Section
4.03(C) of FFB's Disclosure Letter.
(3) In the case of the representations and warranties of
FUNC: (i) the outstanding shares of Merger Sub Common Stock are validly
issued and outstanding, fully paid and nonassessable, and subject to no
preemptive rights; and (ii) the shares of FUNC Stock to be issued in exchange
for shares of FFB Stock in the Merger, when issued in accordance with the
terms of this Plan will be duly authorized, validly issued, fully paid and
nonassessable.
(D) Subsidiaries. (1) In the case of the representations and
warranties of FFB, (i) it has Previously Disclosed in Section 4.03(d) of FFB's
Disclosure Letter a list of all its subsidiaries together with state of
incorporation for each such subsidiary and the states or jurisdictions in
which such subsidiary is qualified to conduct business, (ii) no equity
securities of any of its significant subsidiaries (as defined in Section 8.08)
are or may become required to be issued (other than to it or a subsidiary of
it) by reason of any Rights, (iii) there are no contracts, commitments,
understandings, or arrangements by which any of such significant subsidiaries
is or may be bound to sell or otherwise transfer any shares of the capital
stock of any such significant subsidiary (other than to it or a subsidiary of
it), (iv) there are no contracts, commitments, understandings, or arrangements
relating to its rights to vote or to dispose of such shares (other than to it
or a subsidiary of it), and (v) all of the shares of capital stock of each
such significant subsidiary held by it or its subsidiaries are fully paid and
(except pursuant to 12 U.S.C. Section 55 or equivalent state statutes in
the case of banking subsidiaries) nonassessable and are owned by it or its
subsidiaries free and clear of any charge, mortgage, pledge, security
interest, restriction, claim, lien, or encumbrance ("Liens").
(2) In the case of the representations and warranties of FFB,
except as Previously Disclosed in Section 4.03(D) of FFB's Disclosure Letter,
FFB does not own (other than in a bona fide fiduciary capacity or in
satisfaction of a debt previously contracted) beneficially, directly or
indirectly, any shares of any equity securities or similar interests of any
person, or any interest in a partnership or joint venture of any kind.
(3) Each of its significant subsidiaries has been duly
organized and is validly existing in good standing under the laws of the
jurisdiction in which it is incorporated or organized, and is duly qualified
to do business and in good standing in the jurisdictions where its ownership
or leasing of property or the conduct of its business requires it to be so
qualified.
(E) Corporate Power. It and each of its significant
subsidiaries has the corporate power and authority to carry on its business as
it is now being conducted and to own all its properties and assets; and it
(and, in the case of the representations and warranties of FUNC, Merger Sub)
has the corporate power and authority to execute, deliver and perform its
obligations under this Plan and the Stock Option Agreements.
(F) Corporate Authority. Subject to receipt of the requisite
approval of its stockholders referred to in Section 6.01, this Plan, the Stock
Option Agreements and the Voting and Support Agreement, and the transactions
contemplated hereby and thereby have been, authorized by all necessary
corporate action of it and this Plan is a valid and binding agreement of it
(and, in the case of FUNC, Merger Sub) enforceable in accordance with its
terms, (except as may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by general equity
principles).
(G) No Defaults. Except as Previously Disclosed in Section
4.03(G) of its Disclosure Letter, subject to receipt of the regulatory
approvals, and expiration of the waiting periods, referred to in Section 6.02
and the required filings under federal and state securities laws, the
execution, delivery and performance of this Plan and the consummation of the
transactions contemplated hereby by it, do not and will not (i) constitute a
breach or violation of, or a default under, any law, rule or regulation or any
judgment, decree, order, governmental permit or license, or agreement,
indenture or instrument of it or of any of its significant subsidiaries or to
which it or any of its significant subsidiaries or properties is subject or
bound, (ii) constitute a breach or violation of, or a default under, its
articles or certificate of incorporation or by-laws, or (iii) require any
consent or approval under any such law, rule, regulation, judgment, decree,
order, governmental permit or license agreement, indenture or instrument.
(H) Financial Reports and SEC Documents. Its Annual Report
on Form 10-K for the fiscal year ended December 31, 1994, and all other
reports, registration statements, definitive proxy statements or
information statements filed or to be filed by it or any of its
subsidiaries subsequent to December 31, 1994 under the Securities Act of
1933, as amended (together with the rules and regulations thereunder, the
"Securities Act") or under Sections 13(a), 13(c), 14 and 15(d) of the
Securities Exchange Act of 1934, as amended (together with the rules and
regulations thereunder, the "Exchange Act"), in the form filed, or to be
filed (collectively, its "SEC Documents"), with the Securities and Exchange
Commission (the "SEC") (i) complied or will comply in all material
respects as to form with the applicable requirements under the Exchange Act
and (ii) did not and 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 made therein, in light of the
circumstances under which they were made, not misleading; and each of the
balance sheets in or incorporated by reference into any such SEC Documents
(including the related notes and schedules thereto) fairly presents and
will fairly present the financial position of the entity or entities to
which it relates as of its date and each of the statements of income and
changes in stockholders' equity and cash flows or equivalent statements in
such report and documents (including any related notes and schedules
thereto) fairly presents and will fairly present and results of operations,
changes in stockholders' equity and changes in cash flows, as the case may
be, of the entity or entities to which it relates for the periods set forth
therein, in each case in accordance with generally accepted accounting
principles consistently applied during the periods involved, except in each
case as may be noted therein, subject to normal and recurring year-end
audit adjustments in the case of unaudited statements.
(I) Litigation; Regulatory Action. Except as Previously
Disclosed in Section 4.03(I) of its Disclosure Letter;
(1) no litigation, proceeding or controversy before any
court or governmental agency is pending against it or any of its
subsidiaries and, to the best of its knowledge, no such litigation,
proceeding or controversy has been threatened;
(2) neither it nor any of its subsidiaries or
properties is a party to or is subject to any order, decree,
agreement, memorandum of understanding or similar arrangement with,
or a commitment letter or similar submission to, any federal or state
governmental agency or authority charged with the supervision or
regulation of financial institutions or issuers of securities or
engaged in the insurance of deposits (including, without limitation,
the Office of the Comptroller of the Currency, the Board of Governors
of the Federal Reserve System and the Federal Deposit Insurance
Corporation) or the supervision or regulation of it or any of its
subsidiaries (collectively, the "Regulatory Authorities"); and
(3) neither it nor any of its subsidiaries has been
advised by any Regulatory Authority that such Regulatory Authority is
contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree,
agreement, memorandum or understanding, commitment letter or similar
submission.
(J) Compliance with Laws. Except as Previously Disclosed in
Section 4.03(J) of its Disclosure Letter, it and each of its subsidiaries:
(1) is in compliance, in the conduct of its business,
with all applicable federal, state, local and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees
applicable thereto or to the employees conducting such businesses,
including, without limitation, the Equal Credit Opportunity Act, the
Fair Housing Act, the Community Reinvestment Act, the Home Mortgage
Disclosure Act and all other applicable fair lending laws and other
laws relating to discriminatory business practices;
(2) has all permits, licenses, authorizations, orders
and approvals of, and have made all filings, applications and
registrations with, all Regulatory Authorities that are required in
order to permit them to conduct their businesses substantially as
presently conducted; all such permits, licenses, certificates of
authority, orders and approvals are in full force and effect and, to
the best of its knowledge, no suspension or cancellation of any of
them is threatened; and
(3) has received, since December 31, 1994, no
notification or communication from any Regulatory Authority (i)
asserting that it or any of its subsidiaries is not in compliance
with any of the statutes, regulations, or ordinances which such
Regulatory Authority enforces or (ii) threatening to revoke any
license, franchise, permit, or governmental authorization or (iii)
threatening or contemplating revocation or limitation of, or which
would have the effect of revoking or limiting, federal deposit
insurance (nor, to its knowledge, do any grounds for any of the
foregoing exist).
(K) Defaults; Properties. (1) Except as Previously Disclosed
in Section 4.03(K) of its Disclosure Letter, neither it nor any of its
subsidiaries is in default under any contract, agreement, commitment,
arrangement, lease, insurance policy, or other instrument to which it is a
party, by which its respective assets, business, or operations may be bound or
affected, or under which it or its respective assets, business, or operations
receives benefits, and there has not occurred any event that, with the lapse
of time or the giving of notice or both, would constitute such a default.
(2) Except as disclosed or reserved against in its SEC
Documents, it and its subsidiaries have good and marketable title, free and
clear of all Liens (other than Liens for current taxes not yet delinquent or
pledges to secure deposits) to all of the material properties and assets,
tangible or intangible, reflected in its SEC Documents as being owned by it or
its subsidiaries as of the dates thereof. To its knowledge, all buildings and
all fixtures, equipment and other property and assets that are material to its
business on a consolidated basis and are held under leases or subleases by it
or its subsidiaries are held under valid leases or subleases enforceable in
accordance with their respective terms (except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer and
similar laws of general applicability affecting creditors' rights or by
general equity principles).
(L) No Brokers. All negotiations relative to this Plan and
the transactions contemplated hereby have been carried on by it directly
with the other parties hereto and no action has been taken by it that would
give rise to any valid claim against any party hereto for a brokerage
commission, finder's fee or other like payment, excluding, in the case of
FFB, a fee to be paid to Xxxxxxx, Xxxxx & Co., and, in the case of FUNC, a
fee to be paid to Lazard Freres & Co. LLC, which, in each case, has been
heretofore disclosed to the other party.
(M) Employee Benefit Plans. (1) In the case of the
representations and warranties of FFB, Section 4.03(M) of FFB's Disclosure
Letter contains a complete list of all bonus, vacation, deferred compensation,
pension, retirement, profit-sharing, thrift, savings, employee stock
ownership, stock bonus, stock purchase, restricted stock and stock option
plans, all employment or severance contracts, all medical, dental, disability,
health and life insurance plans, all other employee benefit and fringe benefit
plans, contracts or arrangements and any applicable "change of control" or
similar provisions in any plan, contract or arrangement maintained or
contributed to by it or any of its subsidiaries for the benefit of officers,
former officers, employees, former employees, directors, former directors, or
the beneficiaries of any of the foregoing ("Compensation and Benefit Plans").
(2) True and complete copies of its Compensation and Benefit
Plans, including, but not limited to, any trust instruments and/or insurance
contracts, if any, forming a part thereof, and all amendments thereto have
been supplied to the other party.
(3) Each of its Compensation and Benefit Plans has been
administered in compliance with the terms thereof. All "employee benefit
plans" within the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), other than "multiemployer plans"
within the meaning of Section 3(37) of ERISA ("Multiemployer Plans"), covering
employees or former employees of it and its subsidiaries (its "Plans"), to the
extent subject to ERISA, are in compliance with ERISA, the Code, the Age
Discrimination in Employment Act and other applicable laws. Each Plan of it
or its subsidiaries which is an "employee pension benefit plan" within the
meaning of Section 3(2) of ERISA ("Pension Plan") and which is intended to be
qualified under Section 401(a) of the Code has received a favorable
determination letter from the Internal Revenue Service, and it is not aware of
any circumstances reasonably likely to result in the revocation or denial of
any such favorable determination letter. Except as Previously Disclosed in
Section 4.03(M) of its Disclosure Letter, there is no pending or, to its
knowledge, threatened litigation or governmental audit, examination or
investigation relating to the Plans. Neither it nor any of its subsidiaries
has engaged in a transaction with respect to any Plan that, assuming the
taxable period of such transaction expired as of the date hereof, could
subject it or any of its subsidiaries to a tax or penalty imposed by either
Section 4975 of the Code or Section 502(i) of ERISA.
(4) No liability under Subtitle C or D of Title IV of ERISA
has been or is expected to be incurred by it or any of its subsidiaries 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 any of them, or the single-employer plan of any entity which is considered
one employer with it under Section 4001(a)(15) of ERISA or Section 414 of the
Code (an "ERISA Affiliate"). Neither it nor any of its subsidiaries presently
contributes to a Multiemployer Plan, nor have they contributed to such a plan
within the past five calendar years. 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 any Pension
Plan of it or any of its subsidiaries or by any ERISA Affiliate within the
past 12 months.
(5) All contributions, premiums and payments required to be
made under the terms of any Plan of it or any of its subsidiaries have been
made. Neither any Pension Plan of it or any of its subsidiaries nor any
single-employer plan of an ERISA Affiliate of it or any of its subsidiaries
has an "accumulated funding deficiency" (whether or not waived) within the
meaning of Section 412 of the Code or Section 302 of ERISA. Neither it nor
any of its subsidiaries has provided, or is required to provide, security to
any Pension Plan or to any single-employer plan of an ERISA Affiliate pursuant
to Section 401(a)(29) of the Code.
(6) Under each Pension Plan of it or any of its subsidiaries
which is a single-employer plan, as of the last day of the most recent plan
year ended prior to the date hereof, 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 Plan's most recent actuarial valuation) did not exceed the then current
value of the assets of such Plan, and there has been no adverse change in the
financial condition of such Plan (with respect to either assets or benefits)
since the last day of the most recent Plan year.
(7) In the case of the representations and warranties of FFB,
neither FFB nor any of its subsidiaries has any obligations for retiree health
and life benefits under any plan, except as Previously Disclosed in Section
4.03(M) of FFB's Disclosure Letter.
(8) In the case of the representations and warranties of FFB,
except as Previously Disclosed in Section 4.03(M) of FFB's Disclosure Letter,
neither the execution and delivery of this Plan nor the consummation of the
transactions contemplated hereby will (i) result in any payment (including,
without limitation, severance, unemployment compensation, golden parachute or
otherwise) becoming due to any director or any employee of FFB or any of its
subsidiaries under any Compensation and Benefit Plan or otherwise from FFB or
any of its subsidiaries, (ii) increase any benefit otherwise payable under any
Compensation and Benefit Plan or (iii) result in any acceleration of the time
of payment or vesting of any such benefit.
(N) Labor Matters. Neither it nor any of its subsidiaries is
a party to, or is bound by any collective bargaining agreement, contract or
other agreement or understanding with a labor union or labor organization, nor
is it or any of its subsidiaries the subject of a proceeding asserting that it
or any such subsidiary has committed an unfair labor practice (within the
meaning of the National Labor Relations Act) or seeking to compel it or such
subsidiary to bargain with any labor organization as to wages and conditions
of employment, nor is there any strike or other labor dispute involving it or
any of its subsidiaries, pending or, to the best of its knowledge, threatened,
nor is it aware of any activity involving it or any of its subsidiaries'
employees seeking to certify a collective bargaining unit or engaging in any
other organization activity.
(O) Insurance. It and its subsidiaries have taken all
requisite action (including without limitation the making of claims and the
giving of notices) pursuant to its directors' and officers' liability
insurance policy or policies in order to preserve all rights thereunder with
respect to all matters (other than matters arising in connection with this
Plan and the transactions contemplated hereby) that are known to it.
(P) Takeover Laws; Rights Plans. (1) It has taken all action
required to be taken by it in order to exempt this Plan, the relevant Stock
Option Agreement and the Voting and Support Agreement, and the transactions
contemplated hereby and thereby, from, and this Plan, the Voting and Support
Agreement and the relevant Stock Option Agreement and the transactions
contemplated hereby and thereby are exempt from, the requirements of any
"moratorium", "control share", "fair price" or other anti-takeover laws and
regulations (collectively, "Takeover Laws") of the States (i) of North
Carolina in the case of the representations and warranties of FUNC, including
Articles 9 and 9A of the NCBCA, and (ii) of New Jersey in the case of the
representations and warranties of FFB, including Article 14A:10A of the NJBCA.
(2) It has (i) in the case of the representations and
warranties of FFB, duly entered into an amendment to the FFB Rights Agreement
in substantially the form of Exhibit D, (ii) in the case of the
representations and warranties of FUNC, duly entered into an amendment to the
FUNC Rights Agreement in substantially the form of Exhibit E and (iii) taken
all other action necessary or appropriate so that, the entering into of this
Plan and the Stock Option Agreements (and, in the case of the representations
and warranties of FFB, the Voting and Support Agreement), and the consummation
of the transactions contemplated hereby and thereby (including without
limitation the Merger and the exercise of the Option (as defined in the
relevant Stock Option Agreement)) do not and will not result in the ability of
any person to exercise any Rights under, in the case of FFB, the FFB Rights
Agreement, and in the case of FUNC, the FUNC Rights Agreement, or enable or
require in the case of FFB, the FFB Rights and in the case of FUNC, the FUNC
Rights, to separate from the shares of common stock to which they are attached
or to be triggered or become exercisable.
(3) In the case of the representations and warranties of FFB,
no "Distribution Date", "Shares Acquisition Date" or "Trigger Event" (as such
terms are defined in the FFB Rights Plan) has occurred; and, in the case of
the representations and warranties of FUNC, no "Separation Time", "Stock
Acquisition Date" or "Flip-in Date" (as such terms are defined in the FUNC
Rights Agreement) has occurred.
(Q) Environmental Matters. Except as Previously Disclosed in
Section 4.03(O) of its Disclosure Letter:
(1) To its knowledge, it and each of its subsidiaries,
the Participation Facilities and the Loan/Fiduciary Properties (each
as defined below) are, and have been, in compliance with all
Environmental Laws (as defined below) and it has no knowledge of any
circumstances that with the passage of time or the giving of notice
would be reasonably likely to result in noncompliance.
(2) There is no proceeding pending or, to its
knowledge, threatened before any court, governmental agency or
board or other forum in which it or any of its subsidiaries or any
Participation Facility has been, or with respect to threatened
proceedings, reasonably would be expected to be, named as a
defendant or potentially responsible party (i) for alleged
noncompliance (including by any predecessor) with any
Environmental Law, or (ii) relating to the presence, release or
threatened release into the environment of any Hazardous Material
(as defined below), whether or not occurring at or on a site
owned, leased or operated by it or any of its subsidiaries or any
Participation Facility.
(3) There is no proceeding pending or, to its
knowledge, threatened before any court, governmental agency or
board or other forum in which any Loan/Fiduciary Property (or it
or any of its subsidiaries in respect of any Loan/Fiduciary
Property) has been, or with respect to threatened proceedings,
reasonably would be expected to be, named as a defendant or
potentially responsible party (i) for alleged noncompliance
(including by any predecessor) with any Environmental Law, or (ii)
relating to the release or threatened release into the environment
of any Hazardous Material, whether or not occurring at or on a
Loan/Fiduciary Property.
(4) To its knowledge, there is no reasonable basis for
any proceeding of a type described in Section 4.03(Q) (2) or (3).
(5) To its knowledge, during the period of (i) its or
any of its subsidiaries' ownership or operation of any of their
respective current properties, (ii) its or any of its subsidiaries'
participation in the management of any Participation Facility, or
(iii) its or any of its subsidiaries' holding of a security or other
interest in a Loan/Fiduciary Property, there have been no releases or
threatened releases of Hazardous Material in, on, from, under or
affecting any such property, Participation Facility or Loan/Fiduciary
Property.
(6) To its knowledge, prior to the period of (i) its or
any of its subsidiaries' ownership or operation of any of their
respective current properties, (ii) its or any of its subsidiaries'
participation in the management of any Participation Facility, or
(iii) its or any of its subsidiaries' holding of a security or other
interest in a Loan/Fiduciary Property, there were no releases or
threatened releases of Hazardous Material in, on, under or affecting
any such property, Participation Facility or Loan/Fiduciary Property.
(7) With respect to either FFB or FUNC, the following
definitions apply for purposes of this Section 4.03(O):
"Loan/Fiduciary Property" means any property owned or operated by it
or any of its subsidiaries or in which it or any of its subsidiaries
holds a security or other interest (including, without limitation, a
fiduciary interest), and, where required by the context, includes any
such property where it or any of its subsidiaries constitutes the
owner or operator of such property; "Participation Facility" means
any facility in which it or any of its subsidiaries participates in
the management and, where required by the context, includes the owner
or operator of such property; "Environmental Law" means (i) any
federal, state and local law, statute, ordinance, rule, regulation,
code, license, permit, authorization, approval, consent, legal
doctrine, order, judgment, decree, injunction, requirement or
agreement with any governmental entity, relating to (a) the
protection, preservation or restoration of the environment,
(including, without limitation, air, water vapor, surface water,
groundwater, drinking water supply, surface land, subsurface land,
plant and animal life or any other natural resource), or to human
health or safety, or (b) the exposure to, or the use, storage,
recycling, treatment, generation, transportation, processing,
handling, labeling, production, release or disposal of Hazardous
Material, in each case as amended and as now in effect and includes,
without limitation, the federal Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act, the Federal Water Pollution Control Act of 1972,
the federal Clean Air Act, the federal Clean Water Act, the federal
Resource Conservation and Recovery Act of 1976 (including the
Hazardous and Solid Waste Amendments thereto), the federal Solid
Waste Disposal Act, the federal Toxic Substances Control Act, the
Federal Insecticide, Fungicide and Rodenticide Act, the Federal
Occupational Safety and Health Act of 1970, and any similar state or
local laws each as amended and as now in effect, and (ii) any common
law or equitable doctrine (including, without limitation, injunctive
relief and tort doctrines such as negligence, nuisance, trespass and
strict liability) that may impose liability or obligations for
injuries or damages due to, or threatened as a result of, the
presence of or exposure to any Hazardous Material; "Hazardous
Material" means any substance presently listed, defined, designated
or classified as hazardous, toxic, radioactive or dangerous or
otherwise regulated, under any Environmental Law, whether by type or
quantity, and includes, without limitation, any oil or other
petroleum product, toxic waste, pollutant, contaminant, hazardous
substance, toxic substance, hazardous waste, special waste, solid
waste or petroleum or any derivative or by-product thereof, radon,
radioactive material, asbestos, asbestos containing material, urea
formaldehyde foam insulation, lead and polychlorinated biphenyl.
(R) Tax Reports. Except as Previously Disclosed in Section
4.03(R) of its Disclosure Letter: (i) all reports and returns with respect to
Taxes (as defined below) that are required to be filed by or with respect to
it or its subsidiaries, including without limitation consolidated federal
income tax returns of it and its subsidiaries (collectively, the "Tax
Returns"), have been timely filed, or requests for extensions have been timely
filed and have not expired, and such tax Returns were true, complete and
accurate; (ii) all taxes (which shall include federal, state, local or foreign
income, gross receipts, windfall profits, severance, property, production,
sales, use, license, excise, franchise, employment, withholding or similar
taxes imposed on the income, properties or operations of it or its
subsidiaries, together with any interest, additions, or penalties with respect
thereto and any interest in respect of such additions or penalties,
collectively the "Taxes") shown to be due on such Tax Returns have been paid
in full; (iii) all taxes due with respect to completed and settled
examinations have been paid in full; (iv) no issues have been raised by the
relevant taxing authority in connection with the examination of any of such
Tax Returns; and (v) no waivers of statutes of limitations (excluding such
statutes that relate to years currently under examination by the Internal
Revenue Service) have been given by or requested with respect to any Taxes of
it or any of its subsidiaries.
(S) Pooling, Reorganization. As of the date hereof, it is
aware of no reason why the Merger will fail to qualify (i) for
pooling-of-interests accounting treatment or (ii) as a reorganization under
Section 368(a) of the Code.
(T) Regulatory Approvals. As of the date hereof, it is aware
of no reason why the regulatory approvals and consents referred to in Section
6.02 will not be received without the imposition of a condition or requirement
described in the proviso thereto.
(U) No Material Adverse Effect. Since December 31, 1994,
except as Previously Disclosed in its SEC Documents filed with the SEC on or
before the date hereof or in any Section of its Disclosure Letter, (i) it and
its subsidiaries have conducted their respective businesses in the ordinary
and usual course (excluding the incurrence of expenses related to this Plan
and the transactions contemplated hereby) and (ii) no event has occurred or
circumstance arisen that, individually or taken together with all other facts,
circumstances and events (described in any paragraph of Section 4.03 or
otherwise), is reasonably likely to have a Material Adverse Effect with
respect to it.
V. COVENANTS
FFB hereby covenants to and agrees with FUNC, and FUNC hereby
covenants to and agrees with FFB, that:
5.01. Reasonable Best Efforts. Subject to the terms and
conditions of this Plan, it shall use its reasonable best efforts in good
faith to take, or cause to be taken, all actions, and to do, or cause to be
done, all things necessary, proper or desirable, or advisable under applicable
laws, so as to permit consummation of the Merger as promptly as reasonably
practicable and to otherwise enable consummation of the transactions
contemplated hereby and shall cooperate fully with the other parties hereto to
that end.
5.02. Stockholder Approvals. Each of them shall take, in
accordance with applicable law, NYSE rules and its respective articles or
certificate of incorporation and by-laws, all action necessary to convene,
respectively, an appropriate meeting of stockholders of FUNC to consider and
vote upon the issuance of the shares of FUNC Stock to be issued in the Merger
pursuant to this Plan and to vote on any other stockholder approval matters
required for consummation of the Merger (the "FUNC Meeting"), and an
appropriate meeting of stockholders of FFB to consider and vote upon the
approval of this Plan and to vote on any other stockholder approval matters
required for consummation of the Merger (the "FFB Meeting"; each of the FUNC
Meeting and the FFB Meeting, a "Meeting"), respectively, as promptly as
practicable after the Registration Statement (as defined in Section 5.03) is
declared effective. Subject to the next succeeding sentence, the Board of
Directors of each of FUNC and FFB will recommend such approval, and each of
FUNC and FFB will take all reasonable lawful action to solicit such approval
by its respective stockholders. The Board of Directors of FUNC or FFB, acting
on behalf of FUNC or FFB, respectively, may fail to make such recommendation,
or withdraw, modify or change any such recommendation if and only if such
Board of Directors, after having consulted with and considered the advice of
outside counsel, has determined that the making of such recommendation, or the
failure so to withdraw, modify or change its recommendation, would constitute
a breach of the fiduciary duties of such directors under applicable law.
5.03. Registration Statement. (1) Each of FUNC and FFB
agrees to cooperate in the preparation of a registration statement on Form S-4
(the "Registration Statement") to be filed by FUNC with the SEC in connection
with the issuance of FUNC Common Stock (and, to the extent necessary, New FUNC
Preferred Stock and New FUNC Depositary Shares) in the Merger (including the
joint proxy statement and prospectus and other proxy solicitation materials of
FUNC and FFB constituting a part thereof (the "Joint Proxy Statement")). Each
of FFB and FUNC agrees to use all reasonable efforts to cause the Registration
Statement to be declared effective under the Securities Act as promptly as
reasonably practicable after filing thereof. FUNC also agrees to use all
reasonable efforts to obtain all necessary state securities law or "Blue Sky"
permits and approvals required to carry out the transactions contemplated by
this Agreement. FFB agrees to furnish to FUNC all information concerning FFB,
its subsidiaries, officers, directors and stockholders as may be reasonably
requested in connection with the foregoing.
(2) Each of FFB and FUNC agrees, as to itself and its
subsidiaries, that none of the information supplied or to be supplied by it
for inclusion or incorporation by reference in (i) the Registration Statement
will, at the time the Registration Statement and each amendment or supplement
thereto, if any, becomes effective under the Securities Act, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein not
misleading, and (ii) the Joint Proxy Statement and any amendment or supplement
thereto will, at the date of mailing to stockholders and at the times of the
FUNC Meeting and the FFB Meeting, contain any statement which, in the light of
the circumstances under which such statement is made, will be false or
misleading with respect to any material fact, or which will omit to state any
material fact necessary in order to make the statements therein not false or
misleading or necessary to correct any statement in any earlier statement in
the Joint Proxy Statement or any amendment or supplement thereto.
(3) In the case of FUNC, FUNC will advise FFB, promptly after
FUNC receives notice thereof, of the time when the Registration Statement has
become effective or any supplement or amendment has been filed, of the
issuance of any stop order or the suspension of the qualification of the FUNC
Stock or New FUNC Depositary Shares for offering or sale in any jurisdiction,
of the initiation or threat of any proceeding for any such purpose, or of any
request by the SEC for the amendment or supplement of the Registration
Statement or for additional information.
5.04. Press Releases. It will not, without the prior approval
of the other, issue any press release or written statement for general
circulation relating to the transactions contemplated hereby, except as
otherwise required by applicable law.
5.05. Access; Information. (1) Upon reasonable notice, it
shall afford the other parties and their officers, employees, counsel,
accountants and other authorized representatives, access, during normal
business hours throughout the period prior to the Effective Date, to all of
its properties, books, contracts, commitments and records and, during such
period, it shall furnish promptly to it (i) a copy of each material report,
schedule and other document filed by it pursuant to the requirements of
federal or state securities or banking laws, and (ii) all other information
concerning the business, properties and personnel of it as the other may
reasonably request; and (2) it will not use any information obtained pursuant
to this Section 5.05 for any purpose unrelated to the consummation of the
transactions contemplated by this Plan and, if this Plan is terminated, will
hold all information and documents obtained pursuant to this paragraph in
confidence (as provided in Section 8.06) unless and until such time as such
information or documents become publicly available other than by reason of any
action or failure to act by it or as it is advised by counsel that any such
information or document is required by law or applicable stock exchange rule
to be disclosed. No investigation by either party of the business and affairs
of another shall affect or be deemed to modify or waive any representation,
warranty, covenant or agreement in this Plan, or the conditions to either
party's obligation to consummate the transactions contemplated by this Plan.
5.06. Acquisition Proposals. Without the prior written
consent of the other, neither FFB nor FUNC shall, and each of them shall cause
its respective subsidiaries not to, solicit or encourage inquiries or
proposals with respect to, or engage in any negotiations concerning, or
provide any confidential information to, or have any discussions with, any
such person relating to, any tender offer or exchange offer for, or any
proposal for the acquisition of a substantial equity interest in, or a
substantial portion of the assets of, such party or any of its significant
subsidiaries; provided, however, that the Board of Directors of FFB or FUNC,
on behalf of FFB or FUNC, respectively, may furnish or cause to be furnished
information and may participate in such discussions and negotiations directly
or through its representatives if such Board of Directors, after having
consulted with and considered the advice of outside counsel, has determined
that the failure to provide such information or participate in such
negotiations and discussions would cause the members of such Board of
Directors to breach their fiduciary duties under applicable laws. It shall
instruct its and its subsidiaries' officers, directors, agents, advisors and
affiliates to refrain from doing any of the foregoing.
5.07. Affiliate Agreements. (1) Not later than the 15th day
prior to the mailing of the Joint Proxy Statement, FUNC shall deliver to FFB,
and FFB shall deliver to FUNC, a schedule of each person that, to the best of
its knowledge, is or is reasonably likely to be, as of the date of the
relevant Meeting, deemed to be an "affiliate" of it (each, an "Affiliate") as
that term is used in Rule 145 under the Securities Act or SEC Accounting
Series Releases 130 and 135.
(2) Each of FFB and FUNC shall use its respective reasonable
best efforts to cause each person who may be deemed to be an Affiliate of FFB
or FUNC, as the case may be, to execute and deliver to FFB and FUNC on or
before the date of mailing of the Joint Proxy Statement an agreement in the
form attached hereto as Exhibit F or Exhibit G, respectively.
5.08. Certain Modifications; Restructuring Charges. (1) FFB
and FUNC shall consult with respect to their loan, litigation and real estate
valuation policies and practices (including loan classifications and levels of
reserves) and FFB shall make such modifications or changes to its policies and
practices, if any, and at such date prior to the Effective Time, as may be
mutually agreed upon. FFB and FUNC shall also consult with respect to the
character, amount and timing of restructuring charges to be taken by each of
them in connection with the transactions contemplated hereby and shall take
such charges in accordance with generally accepted accounting principles, as
may be mutually agreed upon. No party's representations, warranties and
covenants contained in this Plan shall be deemed to be untrue or breached in
any respect for any purpose as a consequence of any modifications or changes
to such policies and practices which may be undertaken on account of this
Section 5.08.
(2) Each of FFB and FUNC agrees to cooperate with the other
in effecting, prior to the Effective Time, repurchases of shares of FUNC
Common Stock and/or FFB Common Stock; provided, however, that no such
redemption or repurchase shall be effected by either party (i) if KPMG Peat
Marwick LLP concludes that, as a result thereof, such firm may be unable to
deliver the letters referred to in Section 6.05, (ii) if Xxxxxxxx &
Xxxxxxxx, special tax counsel to FUNC and FFB, concludes that, as a result
thereof, such firm may be unable to deliver the opinion referred to in
Section 6.10, (iii) except in accordance with the Exchange Act and other
applicable law or (iv) on any day which FFB and FUNC reasonably conclude
may fall within the period for determining the Average Closing Price (as
defined in Section 7.01(E)).
(3) In the case of FFB, FFB agrees to amend its Dividend
Reinvestment Plan ("DRP") so that after the execution of this Plan, no
original issue shares of FFB Common Stock will be issued under the DRP.
5.09. Takeover Laws. No party shall take any action that
would cause the transactions contemplated by this Plan, the Voting and Support
Agreement and/or the Stock Option Agreements to be subject to requirements
imposed by any Takeover Law and each of them shall take all necessary steps
within its control to exempt (or ensure the continued exemption of) the
transactions contemplated by this Plan, the Voting and Support Agreement and
the Stock Option Agreement from, or if necessary challenge the validity or
applicability of, any applicable Takeover Law, as now or hereafter in effect,
including, without limitation, Articles 9 and 9A of the NCBCA, Article 14A:10A
of the NJBCA, other Takeover Laws of the States of North Carolina or New
Jersey or Takeover Laws of any other State that purport to apply to this Plan
or the transactions contemplated hereby or thereby.
5.10. No Rights Triggered. Each of FFB and FUNC shall take all
necessary steps to ensure that the entering into of this Plan, the Voting
and Support Agreement and the Stock Option Agreements and the consummation
of the transactions contemplated hereby and thereby and any other action or
combination of actions, or any other transactions contemplated hereby or
thereby, do not and will not result in the grant of any rights to any
person (1) under its articles or certificate of incorporation or by-laws,
(2) under any material agreement to which it or any of its subsidiaries is
a party (including without limitation, in the case of FFB, the FFB Rights
Agreement, and in the case of FUNC, the FUNC Rights Agreement) or (3) to
exercise or receive certificates for Rights, or acquire any property in
respect of Rights, under the FFB Rights Agreement or FUNC Rights Agreement,
as the case may be.
5.11. Shares Listed. In the case of FUNC, FUNC shall use its
reasonable best efforts to list, prior to the Effective Date, on the NYSE,
upon official notice of issuance, the shares of FUNC Stock and New FUNC
Depositary Shares to be issued to the holders of FFB Stock and FFB Depositary
Shares in the Merger (but only to the extent that the corresponding class or
series of FFB Stock and/or the FFB Depositary Shares were so listed
immediately prior to the Effective Time).
5.12. Regulatory Applications. (1) Each party shall promptly
(i) prepare and submit applications to the appropriate Regulatory Authorities
and (ii) make all other appropriate filings to secure all other approvals,
consents and rulings, which are necessary for it to consummate the Merger.
(2) Each of FUNC and FFB agrees to cooperate with the other
and, subject to the terms and conditions set forth in this Agreement, use its
reasonable best efforts to prepare and file all necessary documentation, to
effect all necessary applications, notices, petitions, filings and other
documents, and to obtain all necessary permits, consents, orders, approvals
and authorizations of, or any exemption by, all third parties and Regulatory
Authorities necessary or advisable to consummate the transactions contemplated
by this Plan, including without limitation the regulatory approvals referred
to in Section 6.02. Each of FUNC and FFB shall have the right to review in
advance, and to the extent practicable each will consult with the other, in
each case subject to applicable laws relating to the exchange of information,
with respect to all material written information submitted to, any third party
or any Regulatory Authorities in connection with the transactions contemplated
by this Plan. In exercising the foregoing right, each of the parties hereto
agrees to act reasonably and as promptly as practicable. Each party hereto
agrees that it will consult with the other party hereto with respect to the
obtaining of all material permits, consents, approvals and authorizations of
all third parties and Regulatory Authorities necessary or advisable to
consummate the transactions contemplated by this Plan and each party will keep
the other parties apprised of the status of material matters relating to
completion of the transactions contemplated hereby.
(3) Each party agrees, upon request, to furnish the other
parties with all information concerning itself, its subsidiaries, directors,
officers and stockholders and such other matters as may be reasonably
necessary or advisable in connection with any filing, notice or application
made by or on behalf of such other party or any of its subsidiaries to any
Regulatory Authority.
5.13. Indemnification. (A) For six years after the Effective
Date, FUNC shall indemnify, defend and hold harmless the present and former
directors, officers and employees of FFB and its subsidiaries (each, an
"Indemnified Party") against all costs or expenses (including reasonable
attorneys' fees), judgments, fines, losses, claims, damages or liabilities
(collectively, "Costs") incurred in connection with any claim, action, suit,
proceeding or investigation, whether civil, criminal, administrative or
investigative, arising out of actions or omissions occurring at or prior to
the Effective Time (including, without limitation, the transactions
contemplated by this Plan, the Voting and Support Agreement and the FFB Stock
Option Agreement) to the fullest extent that such persons are indemnified
under the laws of the State of New Jersey and FFB's certificate of
incorporation and by-laws as in effect on the date hereof (and during such
period FUNC shall also advance expenses (including expenses constituting Costs
described in Section 5.13(E)) as incurred to the fullest extent permitted
under applicable law, provided that the person to whom expenses are advanced
provides an undertaking to repay such advances if it is ultimately determined
that such person is not entitled to indemnification with no bond or security
to be required); provided that any determination required to be made with
respect to whether an officer's or director's conduct complies with the
standards set forth under New Jersey law and such certificate of incorporation
and by-laws shall be made by independent counsel (which shall not be counsel
that provides material services to FUNC) selected by FUNC and reasonably
acceptable to such officer or director; and provided, further, that in the
absence of applicable New Jersey judicial precedent to the contrary, such
counsel, in making such determination, shall presume such officer's or
director's conduct complied with such standard and FUNC shall have the burden
to demonstrate that such officer's or director's conduct failed to comply with
such standard.
(B) FUNC shall maintain FFB's existing directors' and
officers' liability insurance policy (or a policy providing comparable
coverage amount on terms no less favorable, including FUNC's existing policy
if it meets the foregoing standard) covering persons who are currently covered
by such insurance for a period of three years after the Effective Date.
(C) Any Indemnified Party wishing to claim indemnification
under Section 5.13(A), upon learning of any claim, action, suit, proceeding or
investigation described above, shall promptly notify FUNC thereof; provided
that the failure so to notify shall not affect the obligations of FUNC under
Section 5.13(A) unless and to the extent such failure materially increases
FUNC's liability under such subsection (A).
(D) If FUNC or any of its successors or assigns shall
consolidate with or merge into any other entity and shall not be the
continuing or surviving entity of such consolidation or merger or shall
transfer all or substantially all of its assets to any entity, then and in
each case, proper provision shall be made so that the successors and assigns
of FUNC shall assume the obligations set forth in this Section 5.13.
(E) FUNC shall pay all reasonable Costs, including attorneys'
fees, that may be incurred by any Indemnified Party in enforcing the indemnity
and other obligations provided for in this Section 5.13. The rights of each
Indemnified Party hereunder shall be in addition to any other rights such
Indemnified Party may have under applicable law.
5.14. Benefit Plans. As soon as administratively practicable
after the Effective Date (and unless administratively impracticable, no
earlier than January 1, 1997), FUNC shall take all reasonable action so that
employees of FFB and its subsidiaries shall be generally entitled to
participate in the pension, severance, benefit, vacation, sick pay and similar
plans on substantially the same terms and conditions as employees of FUNC and
its subsidiaries, and until such time, the plans of FFB shall remain in
effect; provided, that no employee of FFB who becomes an employee of FUNC and
who elects coverage by FUNC's medical insurance plans shall be excluded
coverage thereunder (for such employee or any other covered person) on the
basis of a preexisting condition that was not also excluded under FFB's
medical insurance plans, but to the extent such preexisting condition was
excluded from coverage under FFB's medical insurance plans, this proviso shall
not require coverage for such preexisting condition. For the purpose of
determining eligibility to participate in such plans, eligibility for benefit
forms and subsidies, the vesting of benefits under such plans and the accrual
of benefits under such plans (including, but not limited to, any pension,
severance, 401(K), vacation and sick pay), FUNC shall give effect to years of
service (and for purposes of qualified and nonqualified pension plans, prior
earnings) with FFB or its subsidiaries, as the case may be, as if they were
with FUNC or its subsidiaries. Retirees prior to January 1, 1998, shall have
their retiree welfare benefits grandfathered at the level in effect at FFB on
December 31, 1996. FUNC also shall cause the Continuing Corporation and its
subsidiaries to honor in accordance with their terms all employment,
severance, consulting and other compensation contracts, disclosed in Section
4.03(M) of the FFB Disclosure Letter, between FFB or any of its subsidiaries
and any current or former director, officer or employee thereof.
5.15. Accountants' Letters. Each of FFB and FUNC shall use
its reasonable best efforts to cause to be delivered to the other party,
and such other party's directors and officers who sign the Registration
Statement, a letter of KPMG Peat Marwick LLP, independent auditors, dated
(i) the date on which the Registration Statement shall become effective and
(ii) a date shortly prior to the Effective Date, and addressed to such
other party, and such directors and officers, in form and substance
customary for "comfort" letters delivered by independent accountants in
accordance with Statement of Accounting Standards No. 72.
5.16. Registration Rights. Each person (including its
"affiliates" and "associates", as defined under the Securities Act) who is
precluded by Rule 145 under the Securities Act from selling or disposing of
all of the shares of FUNC Common Stock received by such person in the Merger
within one calendar quarter in the absence of an effective registration
statement therefor, or another exemption from registration, under the
Securities Act (each, together with such affiliates and associates, a "Large
Shareholder") shall be entitled to registration rights for such shares as set
forth in Exhibit H.
5.17. Certain Director and Officer Positions. (1) FUNC agrees
to cause six members of FFB's Board of Directors, which members shall be
nominated by FFB and willing so to serve (subject to any applicable legal
restrictions) ("Former FFB Directors") and shall include Xx. Xxxxxxx X.
Xxxxxxxxxxx and Xx. Xxxx Xxxxxxxxx Xxxxxxxx, to be elected or appointed as
directors of FUNC at, or as promptly as practicable after, the Effective Time.
At the first annual meeting of stockholders of FUNC subsequent to the
Effective Time, FUNC shall take all corporate action necessary to, and shall,
renominate Xx. Xxxxxxxxxxx and Xx. Xxxxxxxx for election as directors of FUNC
for in each case three-year terms and shall recommend that the FUNC
stockholders vote for the election of such individuals as directors.
(2) FUNC agrees to cause three Former FFB Directors to be
elected or appointed as members of the Executive Committee of the Board of
Directors of FUNC at, or as promptly as practicable after, the Effective Time
(which Executive Committee shall at such time consist of not more than ten
members) and shall include Xx. Xxxxxxxxxxx and two other Former FFB Directors
agreed upon by the Chief Executive Officers of FFB and FUNC prior to the
Effective Time.
(3) At the Effective Time, FUNC's Board of Directors shall
elect or appoint Xx. Xxxxxxxxxxx as President of FUNC.
5.18. Notification of Certain Matters. Each of FFB and FUNC
shall give prompt notice to the other of any fact, event or circumstance known
to it that (i) is reasonably likely, individually or taken together with all
other facts, events and circumstances known to it, to result in any Material
Adverse Effect with respect to it or (ii) would cause or constitute a material
breach of any of its representations, warranties, covenants or agreements
contained herein.
VI. CONDITIONS TO CONSUMMATION OF THE MERGER
The obligations of each of the parties to consummate the Merger is
conditioned upon the satisfaction at or prior to the Effective Time of each of
the following:
6.01. Shareholder Vote. Approval of this Plan by the
requisite votes of the stockholders of FFB and FUNC;
6.02. Regulatory Approvals. Procurement by FUNC, FFB and the
Investor of all requisite approvals and consents of Regulatory Authorities and
the expiration of the statutory waiting period or periods relating thereto;
provided, however, that no such approval or consent shall have imposed any
condition or requirement which would so materially and adversely impact the
economic or business benefits to FUNC or FFB of the transactions contemplated
by this Plan that, had such condition or requirement been known, such party
would not, in its reasonable judgment, have entered into this Plan;
6.03. Third Party Consents. All consents or approvals of all
persons (other than Regulatory Authorities) required for the consummation of
the Merger shall have been obtained and shall be in full force and effect,
unless the failure to obtain any such consent or approval is not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
FFB or FUNC.
6.04. No Injunction, Etc. No order, decree or injunction of
any court or agency of competent jurisdiction shall be in effect, and no law,
statute or regulation shall have been enacted or adopted, that enjoins,
prohibits or makes illegal consummation of any of the transactions
contemplated hereby;
6.05. Pooling Letters. FUNC and FFB shall have received from
KPMG Peat Marwick LLP, independent auditors for both FFB and FUNC, letters,
dated the date of or shortly prior to each of the mailing date of the Joint
Proxy Statement and the Effective Date, to the effect that such auditors are
not aware of any facts or circumstances which might cause the Merger not to
qualify for pooling of interests accounting treatment;
6.06. Representations, Warranties and Covenants of FUNC. (i)
Each of the representations and warranties contained herein of FUNC shall be
true and correct as of the date of this Plan and upon the Effective Date with
the same effect as though all such representations and warranties had been
made on the Effective Date, except for any such representations and warranties
made as of a specified date, which shall be true and correct as of such date,
in any case subject to the standards established by Section 4.02, (ii) each
and all of the agreements and covenants of FUNC to be performed and complied
with pursuant to this Plan on or prior to the Effective Date shall have been
duly performed and complied with in all material respects, and (iii) FFB shall
have received a certificate signed by the Chief Financial Officer of FUNC,
dated the Effective Date, to the effect set forth in clauses (i) and (ii);
6.07. Representations, Warranties and Covenants of FFB. (i)
Each of the representations and warranties contained herein of FFB shall be
true and correct as of the date of this Plan and upon the Effective Date with
the same effect as though all such representations and warranties had been
made on the Effective Date, except for any such representations and warranties
made as of the specified date, which shall be true and correct as of such
date, in any case subject to the standards established by Section 4.02, (ii)
each and all of the agreements and covenants of FFB to be performed and
complied with pursuant to this Plan on or prior to the Effective Date shall
have been duly performed and complied with in all material respects, and (iii)
FUNC shall have received a certificate signed by the Chief Financial Officer
of FFB, dated the Effective Date, to the effect set forth in clauses (i) and
(ii);
6.08. Effective Registration Statement.The Registration
Statement shall have become effective and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the
SEC or any other Regulatory Authority;
6.09. Blue-Sky Permits. FUNC shall have received all state
securities laws and "blue sky" permits necessary to consummate the Merger;
6.10. Tax Opinion.FUNC and FFB shall have received an opinion
from Xxxxxxxx & Xxxxxxxx, special tax counsel to FUNC and FFB, to the effect
that (i) the Merger constitutes a reorganization under Section 368 of the
Code, and (ii) no gain or loss will be recognized by stockholders of FFB who
receive shares of FUNC Stock, or New FUNC Depositary Shares, in exchange for
their shares of FFB Stock, and FFB Depositary Shares, except that gain or loss
may be recognized as to cash received in lieu of fractional share interests;
in rendering their opinion, Xxxxxxxx & Xxxxxxxx may require and rely upon
representations and agreements contained in certificates of officers of FUNC,
FFB, the Investor and other;
6.11. Articles of Amendment. The Articles of Amendment shall
have become effective in accordance with the NCBCA;
6.12. NYSE Listing. The shares of FUNC Stock and the New FUNC
Depositary Shares, issuable pursuant to this Plan shall have been approved for
listing on the NYSE (but only to the extent that the corresponding class or
series of FFB Stock and/or the FFB Depositary Shares were so listed
immediately prior to the Effective Time), subject to official notice of
issuance; and
6.13. Rights Agreements.There shall exist no "Acquiring
Person" and no "Shares Acquisition Date" or "Trigger Event" (as each of
such terms are defined in the FFB Rights Plan) shall have occurred; and
there shall exist no "Acquiring Person" and no "Stock Acquisition Date" or
"Flip-in-Date" (as each of such terms are defined in the FUNC Rights
Agreement) shall have occurred;
provided, however, that a failure to satisfy any of the conditions set forth
in Section 6.07 shall only constitute conditions if asserted by FUNC, and a
failure to satisfy any of the conditions set forth in Section 6.06 shall only
constitute conditions if asserted by FFB.
VII. TERMINATION
7.01. Termination.This Plan may be terminated, and the Merger
may be abandoned:
(A) Mutual Consent. At any time prior to the Effective Time,
by the mutual consent of FUNC and FFB, if the Board of Directors of each so
determines by vote of a majority of the members of its entire Board.
(B) Breach. At any time prior to the Effective Time, by FUNC
or FFB, if its Board of Directors so determines by vote of a majority of the
members of its entire Board, in the event of either: (i) a breach by the other
party of any representation or warranty contained herein (subject to the
standard established by Section 4.02), which breach cannot be or has not been
cured within 30 days after the giving of written notice to the breaching party
of such breach; or (ii) a material breach by the other party of any of the
covenants or agreements contained herein, which breach cannot be or has not
been cured within 30 days after the giving of written notice to the breaching
party of such breach.
(C) Delay. At any time prior to the Effective Time, by FUNC
or FFB, if its Board of Directors so determines by vote of a majority of the
members of its entire Board, in the event that the Merger is not consummated
by June 30, 1996, except to the extent that the failure of the Merger then to
be consummated arises out of or results from the knowing action or inaction of
the party seeking to terminate pursuant to this Section 7.01 (C).
(D) No Approval. By FFB or FUNC, if its Board of Directors
so determines by a vote of a majority of the members of its entire Board,
in the event (i) the consent of the Board of Governors of the Federal
Reserve System for consummation of the Merger and the other transactions
contemplated by the Merger shall have been denied by final nonappealable
action of such Regulatory Authority or (ii) any stockholder approval
required by Section 6.01 herein is not obtained at the FFB Meeting or the
FUNC Meeting.
(E) Possible Adjustment. By FFB, if its Board of Directors
so determines by a vote of a majority of the members of its entire Board,
at any time during the ten-day period commencing two days after the
Determination Date, if either (x) both of the following conditions are
satisfied:
(1) the Average Closing Price on the Determination Date of
shares of FUNC Common Stock shall be less than $40.48; and
(2) (i) the number obtained by dividing the Average Closing
Price on such Determination Date by $47.625 (such number being
referred to herein as the "FUNC Ratio") shall be less than (ii) the
number obtained by dividing the Index Price on the Determination Date
by the Index Price on the Starting Date and subtracting 0.15 from the
quotient in this clause (x) (2) (ii) (such number being referred to
herein as the "Index Ratio");
or (y) the Average Closing Price on the Determination Date of shares of FUNC
Common Stock shall be less than the product of 0.75 and the Starting Price;
subject, however, to the following four sentences. If FFB elects to exercise
its termination right pursuant to the immediately preceding sentence, it shall
give prompt written notice to FUNC which notice shall specify which of clauses
(x) or (y) is applicable (or if both would applicable, which clause is being
invoked); provided that such notice of election to terminate may be withdrawn
at any time within the aforementioned ten-day period. During the five-day
period commencing with its receipt of such notice, FUNC shall have the option
in the case of a failure to satisfy the condition in clause (x), of adjusting
the Exchange Ratio to equal the lesser of (i) a number equal to a quotient
(rounded to the nearest one-thousandth), the numerator of which is the product
of $40.48 and the Exchange Ratio (as then in effect) and the denominator of
which is the Average Closing Price, and (ii) a number equal to a quotient
(rounded to the nearest one-thousandth), the numerator of which is the Index
Ratio multiplied by the Exchange Ratio (as then in effect) and the denominator
of which is the FUNC Ratio. During such five-day period, FUNC shall have the
option, in the case of a failure to satisfy the condition in clause (y), to
elect to increase the Exchange Ratio to equal a number equal to a quotient
(rounded to the nearest one-thousandth), the numerator of which is the product
of 0.75, the Starting Price and the Exchange Ratio (as then in effect) and the
denominator of which is the Average Closing Price. If FUNC makes an election
contemplated by either of the two preceding sentences, within such five-day
period, it shall give prompt written notice to FFB to such election and the
revised Exchange Ratio, whereupon no termination shall have occurred pursuant
to this Section 7.01 (E) and this Plan shall remain in effect in accordance
with its terms (except as the Exchange Ratio shall have been so modified), and
any references in this Agreement to "Exchange Ratio" shall thereafter be
deemed to refer to the Exchange Ratio as adjusted pursuant to this Section
7.01 (E).
For purposes of this Section 7.01 (E), the following terms
shall have the meanings indicated:
"Average Closing Price" means the average of the daily last
sale prices of FUNC Common Stock as reported on the NYSE Composite
Transactions reporting system (as reported in The Wall Street Journal
or, if not reported therein, in another mutually agreed upon
authoritative source) for the ten consecutive full trading days in
which such shares are traded on the NYSE ending at the close of
trading on the Determination Date.
"Determination Date" means the date of which the approval of
the Federal Reserve Board required for consummation of the Merger
shall be received.
"Index Group" means the group of each of the 13 bank holding
companies listed below, the common stock 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, an announcement of a
proposal for the acquisition or sale of such company. In the event
that the common stock of any such company ceases to be publicly
traded or any such announcement is made with respect to any such
company, such company will be removed from the Index Group, and the
weights (which have been determined based on the number of
outstanding shares of common stock) redistributed proportionately for
purposes of determining the Index Price. The 13 bank holding
companies and the weights attributed to them are as follows:
Bank Holding Company Weighting
-------------------- ---------
Banc One Corp. (ONE) 15.17%
Norwest Corporation (NOB) 10.91
SunTrust Banks, Inc. (STI) 7.87
KeyCorp (KEY) 8.63
Fleet Financial Group, Inc. (FLT) 6.19
NBD Bancorp, Inc. (NBD) 5.91
PNC Financial Corp (PNC) 7.34
Wachovia Corporation (WB) 7.38
First Bank System, Inc. (FBS) 6.70
Xxxxxxx Xxxxx, Inc. (BBI) 6.10
National City Corporation (NCC) 5.22
Mellon Bank Corporation (XXX) 7.43
Boatmen's Bancshares, Inc. (BOAT) 5.15
-------
100.00%
"Index Price" on a given date means the weighted average
(weighted in accordance with the factors listed above) of the closing
prices of the companies composing the Index Group.
"Starting Date" means June 16, 1995.
"Starting Price" shall mean the last sale price per share of
FUNC Common Stock on June 19, 1995, as reported by the NYSE Composite
Transactions reporting system (as reported in The Wall Street Journal
or, if not reported therein, in another mutually agreed upon
authoritative source).
If any company belonging to the Index Group or FUNC declares or
effects a stock dividend, reclassification, recapitalization, split-up,
combination, exchange of shares or similar transaction between the Starting
Date and the Determinate Date, the prices for the common stock of such company
or FUNC shall be appropriately adjusted for the purposes of applying this
Section 7.01 (E).
(F) Stock Option Agreements; Voting and Support Agreement.
By FFB, if the FUNC Stock Option Agreement shall not have been executed and
delivered by FUNC by the close of business on the day following the date of
execution of this Plan; or by FUNC, (i) if the FFB Stock Option Agreement or
the Voting and Support Agreement shall not have been executed and delivered by
FFB or, in the case of the Voting and Support Agreement, by the Investor, by
the close of business on the day following the date of execution of this Plan
or (ii) at any time prior to the Effective Time, if the Investor materially
breaches any of its representations, warranties, covenants and agreements,
which breach has not and cannot reasonably be cured within 30 days after the
giving of written notice to the Investor of such breach, under the Voting and
Support Agreement.
(G) Failure to Recommend, Etc. At any time prior to the
FFB Meeting, by FUNC if the Board of Directors of FFB shall have failed to
make its recommendation referred to in Section 5.02, withdrawn such
recommendation or modified or changed such recommendation in a manner
adverse to the interests of FUNC; or at any time prior to the FUNC Meeting,
by FFB if the Board of Directors of FUNC shall have failed to make its
recommendation referred to in Section 5.02, withdrawn such recommendation
or modified or changed such recommendation in a manner adverse to the
interests of FFB.
7.02. Effect of Termination and Xxxxxxxxxxx.Xx the event of
termination of this Plan and the abandonment of the Merger pursuant to this
Article VII, no party to this Plan shall have any liability or further
obligation to any other party hereunder except (i) as set forth in Section
8.01, (ii) that each of the Stock Option Agreements shall be governed by its
own terms as to termination and (iii) that termination will not relieve a
breaching party from liability for any willful breach of this Plan giving rise
to such termination.
VIII. OTHER MATTERS
8.01. Survival. All representations, warranties, agreements
and covenants contained in this Plan shall not survive the Effective Time or
termination of this Plan if this Plan is terminated prior to the Effective
Time; provided, however, if the Effective Time occurs, the agreements of the
parties in Sections 5.13, 5.16, 5.17, 8.01, 8.04 and 8.09 shall survive the
Effective Time, and if this Plan is terminated prior to the Effective Time,
the agreements of the parties in Sections 5.05(2), 7.02, 8.01, 8.02, 8.04,
8.05, 8.06, 8.07 and 8.09, shall survive such termination.
8.02. Waiver; Amendment. Prior to the Effective Time, any
provision of this Plan may be (i) waived by the party benefitted by the
provision, or (ii) amended or modified at any time, by an agreement in writing
among the parties hereto approved by their respective Boards of Directors and
executed in the same manner as this Plan, except that, after the FFB Meeting
the consideration to be received by the stockholders of FFB for each share of
FFB Stock, or FFB Depository Shares, shall not thereby be decreased.
8.03. Counterparts. This Plan may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
8.04. Governing Law. This Plan shall be governed by, and
interpreted in accordance with, the laws of the State of North Carolina,
without regard to the conflict of law principles thereof (except to the extent
that mandatory provisions of New Jersey law govern).
8.05. Expenses. Each party hereto will bear all expenses
incurred by it in connection with this Plan and the transactions contemplated
hereby, except that printing expenses and SEC registration fees shall be
shared equally between FFB and FUNC.
8.06. Confidentiality. Except as otherwise provided in
Section 5.05(2), each of the parties hereto and their respective agents,
attorneys and accountants will maintain the confidentiality of all
information provided in connection herewith which has not been publicly
disclosed or as it is advised by counsel that any such information or
document is required by law or applicable stock exchange rule to be
disclosed.
8.07. Notices. All notices, requests and other communications
hereunder to a party shall be in writing and shall be deemed given if
personally delivered, telecopied (with confirmation) or mailed by registered
or certified mail (return receipt requested) to such party at its address set
forth below or such other address as such party may specify by notice to the
parties hereto.
If to FUNC, to: First Union Corporation
Xxx Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxxxxx
Chairman and Chief
Executive Officer
With a copy to: Xxxxxx X. Xxxxxx, Xx.
General Counsel
First Union Corporation
Xxx Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
If to FFB, to: First Fidelity Bancorporation
000 Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxxxxx
Chairman, President and
Chief Executive Officer
With copies to: Xxxxx X. Xxxxxxxx
General Counsel
First Fidelity Bancorporation
000 Xxxxx Xxxxxx
Xxxxxx, Xxx Xxxxxx 00000
and: Cleary, Gottlieb, Xxxxx & Xxxxxxxx
Xxx Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxxx
8.08. Definitions.Any term defined anywhere in this Plan shall
have the meaning ascribed to it for all purposes of this Plan (unless
expressly noted to the contrary). In addition:
(1) the term "Material Adverse Effect" shall mean, with
respect to FFB or FUNC, respectively, any effect that (i) is material
and adverse to the financial position, results of operations or
business of FFB and its subsidiaries taken as a whole, or FUNC and
its subsidiaries taken as a whole, respectively, or (ii) materially
impairs the ability of FFB or FUNC, respectively, to perform its
obligations under this Plan or the consummation of the Merger and the
other transactions contemplated by this Plan; provided, however, that
Material Adverse Effect shall not be deemed to include the impact of
(a) changes in banking and similar laws of general applicability or
interpretations thereof by courts or governmental authorities, (b)
changes in generally accepted accounting principles or regulatory
accounting requirements applicable to banks and bank holding
companies generally, (c) actions or omission of FFB, FUNC or Merger
Sub taken with the prior informed consent of FFB or FUNC, as
applicable, in contemplation of the transactions contemplated hereby,
(d) circumstances affecting regional bank holding companies
generally, and (e) the effects of the Merger and of the actions
contemplated by Section 5.08;
(2) the term "person" shall mean any individual, bank savings
association, corporation, partnership, association, joint-stock
company, business trust or unincorporated organization;
(3) the term "Previously Disclosed" by a party shall mean
information set forth in its Disclosure Letter or a schedule that is
delivered by that party to the other parties prior to the execution
of this Plan and specifically designated as information "Previously
Disclosed" pursuant to this Plan;
(4) the term "Rights" means, with respect to any person,
securities or obligations convertible into or exchangeable for, or
giving any person any right to subscribe for or acquire, or any
options, calls or commitments relating to, shares of capital stock of
such person; and
(5) the terms "subsidiary" and "significant subsidiary" shall
have the meanings set forth in Rule 10-02 of Regulation S-X of the
SEC; provided that for purposes of Article IV, Merger Sub shall be
deemed a significant subsidiary of FUNC.
8.09. Entire Understanding; No Third Party Beneficiaries.
This Plan, the Stock Option Agreements and the Voting and Support Agreement
together represent the entire understanding of the parties hereto with
reference to the transactions contemplated hereby and thereby and supersede
any and all other oral or written agreements heretofore made. Except for
Sections 5.13, 5.16 and 5.17, nothing in this Plan expressed or implied, is
intended to confer upon any person, other than the parties hereto or their
respective successors, any rights, remedies, obligations or liabilities under
or by reason of this Plan.
8.10. Headings. The headings contained in this Plan are for
reference purposes only and are not part of this Plan.
IN WITNESS WHEREOF, the parties hereto have caused this
instrument to be executed in counterparts by their duly authorized officers,
all as of the day and year first above written.
FIRST FIDELITY BANCORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxxxx
Xxxxxxx X. Xxxxxxxxxxx
Chairman, President and Chief
Executive Officer
FIRST UNION CORPORATION
By: /s/ Xxxxxx X. Xxxxxxxxxxx
Xxxxxx X. Xxxxxxxxxxx
Chairman and Chief Executive
Officer
PKC, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxxx
Xxxxxx X. Xxxxxxxxxxx
President
Exhibit H
REGISTRATION RIGHTS
I. DEFINITIONS
1.1. Definitions. Terms defined in the Agreement and Plan of
Merger, dated as of June 18, 1995 (the "Plan"), by and among First Fidelity
Bancorporation ("FFB"), First Union Corporation ("FUNC") and PKC, Inc.
("Merger Sub"), are used herein as therein defined. In addition, the
following terms, as used herein, have the following meanings:
"Demand Registration" means a Demand Registration as defined in
Section 2.1.
"Piggyback Registration" means a Piggyback Registration as defined in
Section 2.2.
"Registrable Securities" means shares of FUNC Common Stock owned from
time to time by the Large Shareholder and its Affiliates.
"Underwriter" means a securities dealer who purchases any Registrable
Securities as principal and not as part of such dealer's market-making
activities.
II. REGISTRATION RIGHTS
2.1 Demand Registration. (a) A Large Shareholder may make a
written request for registration under the Securities Act of all or part of
its Registrable Securities (a "Demand Registration"); provided that FUNC shall
not be obligated (i) to effect more than one Demand Registration in any
12-month period, (ii) to effect a Demand Registration for less than two
million shares of FUNC Common Stock or (iii) to effect a Demand Registration
within 6 months of Large Shareholder selling any Registrable Securities
pursuant to a Piggyback Registration under Section 2.2. Such request will
specify the number of shares of Registrable Securities proposed to be sold and
will also specify the intended method of disposition thereof. A registration
will not count as a Demand Registration until it has become effective.
(b) If such Large Shareholder so elects, the offering of such
Registrable Securities pursuant to such Demand Registration shall be in the
form of an underwritten offering. Such Large Shareholder shall select the
book-running and other managing Underwriters in connection with such offering
and any additional investment bankers and managers to be used in connection
with the offering. Such book-running and other managing Underwriters shall be
reasonably satisfactory to FUNC.
2.2. Piggyback Registration. If FUNC proposes to file a
registration statement under the Securities Act with respect to an offering of
FUNC Common Stock (i) for FUNC's own account (other than a registration
statement on Form S-4 or S-8) or relating solely to securities issued pursuant
to any benefit plan (or any substitute form that may be adopted by the
Commission) or (ii) for the account of any of the holders of FUNC Common
Stock, then FUNC shall give written notice of such proposed filing to the
Large Shareholder as soon as practicable (but in no event less than 10 days
before the anticipated filing date), and such notice shall offer subject to
the terms and conditions hereof, Large Shareholder the opportunity to register
such Registrable Securities as such Large Shareholder may request on the same
terms and conditions as FUNC's or such holders' FUNC Common Stock (a
"Piggyback Registration").
2.3 Reduction of Offering. Notwithstanding anything contained
herein, if the managing Underwriter or Underwriters of an offering described
in Section 2.1 or 2.2 shall advise FUNC that (i) the size of the offering that
Large Shareholder, FUNC and any other persons intend to make or (ii) the kind
of securities that Large Shareholder, FUNC and such other persons intend to
include in such offering are such that the success of the offering would be
materially and adversely affected, then (A) if the size of the offering is the
basis of such Underwriter's advice, the amount of Registrable Securities to be
offered for the account of such Large Shareholder shall be reduced to the
extent necessary to reduce the total amount of securities to be included in
such offering to the amount recommended by such managing Underwriter or
Underwriters; provided that (x) in the case of a Demand Registration, the
amount of Registrable Securities to be offered for the account of such Large
Shareholder shall be reduced only after the amount of securities to be offered
for the account of FUNC and such other persons has been reduced to zero, and
(y) in the case of a Piggyback Registration, if securities are being offered
for the account of persons other than FUNC, then the proportion by which the
amount of such Registrable Securities intended to be offered for the account
of such Large Shareholder is reduced shall not exceed the proportion by which
the amount of such securities intended to be offered for the account of such
other persons is reduced; and (B) if the combination of securities to be
offered is the basis of such Underwriter's advice, (x) the Registrable
Securities to be included in such offering shall be reduced as described in
clause (A) above (subject to the proviso in clause (A)), or (y) in the case of
a Piggyback Registration, if the actions described in sub-clause (x) of this
clause (B) would, in the judgment of the managing Underwriter, be insufficient
to eliminate the adverse effect that inclusion of the Registrable Securities
requested to be included would have on such offering, such Registrable
Securities will be excluded from such offering.
III. REGISTRATION PROCEDURES
3.1 Filings; Information. Whenever a Large Shareholder requests
that any Registrable Securities be registered pursuant to Section 2.1 hereof,
FUNC will use its reasonable efforts to effect the registration of such
Registrable Securities as soon as reasonably practicable, and in connection
with any such request:
(a) FUNC will as soon as reasonably practicable prepare and
file with the SEC a registration statement on any form for which FUNC
then qualifies and which counsel for FUNC shall deem appropriate and
available for the sale of the Registrable Securities to be registered
thereunder in accordance with the intended method of distribution
thereof, and use reasonable efforts to cause such filed registration
statement to become and remain effective for a period of not less
than 90 days; provided that if FUNC shall furnish to such Large
Shareholder a certificate signed by its Chairman, Chief Executive
Officer, Chief Financial Officer or any Executive Vice President
stating that in his or her good faith judgment it would be
detrimental or otherwise disadvantageous to FUNC or its shareholders
for such a registration statement to be filed, or, in the case of an
effective registration statement, for sales to be effected
thereunder, FUNC shall have a period of not more than 120 days within
which to file such registration statement measured from the date of
receipt of such request in accordance with Section 2.1 or, in the
case of an effective registration statement, FUNC shall be entitled
to require such Large Shareholder to refrain from selling Registrable
Securities under such registration statement for a period of up to
120 days. If FUNC furnishes a notice under this paragraph at a time
when a registration statement filed pursuant to this Agreement is
effective, FUNC shall extend the period during which such
registration statement shall be maintained effective as provided in
this Section 3.1(a) hereof by the number of days during the period
from and including the date of the giving of notice under this
paragraph to the date when sales under the registration statement may
recommence.
(b) FUNC will, if requested, prior to filing such
registration statement or any amendment or supplement thereto,
furnish to the Large Shareholder requesting registration and each
managing Underwriter, if any, copies thereof, and thereafter furnish
to such Large Shareholder and each such Underwriter, if any, such
number of copies of such registration statement, each amendment and
supplement thereto (in each case including all exhibits thereto and
documents incorporated by reference therein) and the prospectus
included in such registration statement (including each preliminary
prospectus) as such Large Shareholder or such Underwriter may
reasonably request in order to facilitate the sale of the Registrable
Securities.
(c) After the filing of the registration statement, FUNC will
promptly notify such Large Shareholder of any stop order issued or,
to the knowledge of FUNC, threatened to be issued by the SEC and take
all necessary actions required to prevent the entry of such stop
order or to remove it if entered.
(d) FUNC will use its reasonable efforts to qualify the
Registrable Securities for offer and sale under such other securities
or blue sky laws of such jurisdictions in the United States as such
Large Shareholder reasonably (in light of such Large Shareholder's
intended plan of distribution) requests; provided that FUNC will not
be required to (i) qualify generally to do business in any
jurisdiction where it would not otherwise be required to qualify but
for this paragraph (d), (ii) subject itself to taxation in any
jurisdiction or (iii) consent to service of process in any such
jurisdiction.
(e) FUNC shall, as promptly as reasonably practicable, notify
each Large Shareholder that has sold, or is selling, Registrable
Securities hereunder, at any time when a prospectus relating to the
sale of the Registrable Securities is required by law to be delivered
in connection with sales by an Underwriter or dealer, of the
occurrence of an event requiring the preparation of a supplement or
amendment to such prospectus so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus will not
contain an untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which
they were made, not misleading, and as promptly as practicable make
available to each such Large Shareholder and to the Underwriters any
such supplement or amendment. Each Large Shareholder, by requesting
a registration or selling Registrable Securities hereunder, shall be
deemed to agree with FUNC that, upon receipt of any notice from FUNC
of the happening of any event of the kind described in the preceding
sentence, such Large Shareholder will forthwith discontinue the offer
and sale of Registrable Securities pursuant to the registration
statement covering such Registrable Securities until receipt of the
copies of such supplemented or amended prospectus and, if so directed
by FUNC, such Large Shareholder will deliver to FUNC all copies,
other than permanent file copies then in Large Shareholder's
possession, of the most recent prospectus covering such Registrable
Securities at the time of receipt of such notice. In the event FUNC
shall give such notice, FUNC shall extend the period during which any
registration statement shall be maintained effective as provided in
Section 3.1(a) hereof by the number of days during the period from
and including the date of the giving of such notice to the date when
FUNC shall make available such supplemented or amended prospectus.
(f) FUNC will enter into customary agreements (including an
underwriting agreement in customary form and satisfactory in form and
substance to FUNC in its reasonable judgment) and take such other
actions as are reasonably required in order to expedite or facilitate
the sale of such Registrable Securities.
(g) FUNC will furnish to each Large Shareholder that sells
Registrable Securities hereunder and to each managing Underwriter, if
any, a signed counterpart, addressed to such Large Shareholder and
each Underwriter, of (i) an opinion or opinions of counsel to FUNC
and (ii) a comfort letter or comfort letters from FUNC's independent
auditors pursuant to SAS 72, each in customary form and covering such
matters of the type customarily covered by opinions or comfort
letters delivered to such parties.
(h) FUNC will make generally available to its
securityholders, as soon as reasonably practicable, an earnings
statement covering a period of 12 months, beginning within three
months after the effective date of the registration statement, which
earnings statement shall satisfy the provisions of Section 11(a) of
the Securities Act and the rules and regulations of the SEC
thereunder.
(i) FUNC will use reasonable efforts to cause all such
Registrable Securities to be listed on each securities exchange on
which similar securities issued by FUNC are then listed.
FUNC may require each Large Shareholder that requests a registration
or is selling Registrable Securities hereunder promptly to furnish in writing
to FUNC such information regarding such Large Shareholder, the plan of
distribution of the Registrable Securities and other information as FUNC may
from time to time reasonably request or as may be legally required in
connection with such registration.
3.2 Registration Expenses. In connection with any Demand
Registration or Piggyback Registration by or for a Large Shareholder, FUNC
shall pay the following expenses incurred in connection with such registration
(the "Registration Expenses"): (i) all filing fees with the SEC, (ii) fees
and expenses of compliance with securities or blue sky laws (including
reasonable fees and disbursements of counsel in connection with blue sky
qualifications of the Registrable Securities), (iii) printing expenses, (iv)
the fees and expenses incurred in connection with the listing of the
Registrable Securities, (v) fees and expenses of counsel and independent
certified public accountants for FUNC (including the expenses of any comfort
letters pursuant to Section 3.1(g) hereof) and (vi) the reasonable fees and
expenses of any additional experts retained by FUNC in connection with such
registration. Such Large Shareholder shall pay any underwriting fees,
discounts or commissions attributable to the sale of Registrable Securities,
and any out-of-pocket expenses of Large Shareholder, including such Large
Shareholder's counsel's fees and expenses. FUNC shall pay internal FUNC
expenses (including, without limitation, all salaries and expenses of its
officers and employees performing legal or accounting duties).
IV. INDEMNIFICATION AND CONTRIBUTION
4.1 Indemnification by FUNC. FUNC agrees to indemnify and hold
harmless each Large Shareholder, its officers and directors, and each person,
if any, who controls Large Shareholder within the meaning of either Section 15
of the Securities Act or Section 20 of the Exchange Act from and against any
and all losses, claims, damages and liabilities caused by any untrue statement
or alleged untrue statement of a material fact contained in any registration
statement or prospectus relating to the Registrable Securities (as amended or
supplemented if FUNC shall have furnished any amendments or supplements
thereto) or any preliminary prospectus, or caused by any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are caused by any such untrue
statement or omission or alleged untrue statement or omission based upon
information furnished in writing to FUNC by or on behalf of any Large
Shareholder or Underwriter for any Large Shareholder expressly for use
therein; provided that the foregoing indemnity agreement with respect to any
preliminary prospectus shall not inure to the benefit of any Large Shareholder
if a copy of the current prospectus was not provided to purchaser and such
current prospectus would have cured the defect giving rise to such loss,
claim, damage or liability or for any sales occurring after FUNC has informed
such Large Shareholder under Section 3.1(e) and prior to the delivery by FUNC
of any supplement or amendment to such prospectus. FUNC also agrees to
indemnify any Underwriters of the Registrable Securities, their officers and
directors and each person who controls such underwriters on substantially the
same basis as that of the indemnification of such Large Shareholder provided
in this Section 4.1.
4.2 Indemnification by Large Shareholders. Each Large Shareholder,
by requesting any registration or making any Sale of Registrable Securities
hereunder, shall be deemed to agree to indemnify and hold harmless FUNC, its
officers and directors, and each person, if any, who controls FUNC within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act to the same extent as the foregoing indemnity from FUNC to Large
Shareholder, but only with reference to information furnished in writing by or
on behalf of Large Shareholder expressly for use in any registration statement
or prospectus relating to such Registrable Securities, or any amendment or
supplement thereto, or any preliminary prospectus. Each such Large
Shareholder also shall be deemed to agree to indemnify and hold harmless
Underwriters of the Registrable Securities, their officers and directors and
each person who controls such Underwriters on substantially the same basis as
that of the indemnification of FUNC provided in this Section 4.2.
4.3 Conduct of Indemnification Proceedings. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to Section 4.1 or
4.2, such Person (the "Indemnified Party") shall promptly notify the Person
against whom such indemnity may be sought (the "Indemnifying Party") in
writing and the Indemnifying Party, upon the request of the Indemnified Party,
shall retain counsel reasonably satisfactory to such Indemnified Party to
represent such Indemnified Party and any others the Indemnifying Party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any Indemnified
Party shall have the right to retain its own counsel, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party
unless (i) the Indemnifying Party and the Indemnified Party shall have
mutually agreed to the retention of such counsel or (ii) the named parties to
any such proceeding (including any impleaded parties) include both the
Indemnified Party and the Indemnifying Party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the Indemnifying
Party shall not, in connection with any proceeding or related proceedings in
the same jurisdiction, be liable for the fees and expenses of more than one
separate firm of attorneys (in addition to any local counsel) at any time for
all such Indemnified Parties, and that all such fees and expenses shall be
reimbursed as they are incurred. In the case of any such separate firm for
the Indemnified Parties, such firm shall be designated in writing by the
Indemnified Parties. The Indemnifying Party shall not be liable for any
settlement of any proceeding effected without its written consent, but if
settled with such consent, or if there be a final judgment for the plaintiff,
the Indemnifying Party shall indemnify and hold harmless such Indemnified
Parties from and against any loss or liability (to the extent stated above) by
reason of such settlement or judgment.
4.4 Contribution. If the indemnification provided for in this
Article IV is unavailable to the Indemnified Parties in respects of any
losses, claims, damages or liabilities referred to herein, then each such
Indemnifying Party, in lieu of indemnifying such Indemnified Party, shall
contribute to the amount paid or payable by such Indemnified Party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by FUNC, any Large
Shareholder and the Underwriters from the offering of the securities, or (ii)
if the allocation provided by clause (i) above is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in clause (i) but also the relative fault of FUNC, such
Large Shareholder and the Underwriters in connection with the statements or
omissions which resulted in such losses, claims, damages or liabilities, as
well as any other relevant equitable considerations. The relative benefits
received by FUNC, such Large Shareholder and the Underwriters shall be deemed
to be in the same proportion as the total proceeds from the offering (net of
underwriting discounts and commissions but before deducting expenses) received
by each of FUNC and such Large Shareholder and the total underwriting
discounts and commissions received by the Underwriters, in each case as set
forth in the table on the cover page of the prospectus, bear to the aggregate
public offering price of the securities. The relative fault of FUNC, a Large
Shareholder and the Underwriters shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material
fact or the omission or alleged omission to state a material fact relates to
information supplied by or on behalf of such party and the parties' relative
intent, knowledge, access to information and opportunity to correct or prevent
such statement or omission.
FUNC and each Large Shareholder shall be deemed to agree that it
would not be just and equitable if contribution pursuant to this Section 4.4
were determined by pro rata allocation (even if the Underwriters were treated
as one entity for such purpose) or by any other method of allocation which
does not take account of the equitable considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an Indemnified
Party as a result of the losses, claims, damages or liabilities referred to in
the immediately preceding paragraph shall be deemed to include, subject to the
limitations set forth above, any legal or other expenses reasonably incurred
by such Indemnified Party in connection with investigating or defending any
such action or claim. Notwithstanding the provisions of this Section 4.4, no
Underwriters shall be required to contribute any amount in excess of the
amount by which the total price at which the Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission, and
Large Shareholder shall not be required to contribute any amount in excess of
the amount by which the net proceeds of the offering (before deducting
expenses) received by Large Shareholder exceeds the amount of any damages
which Large Shareholder has otherwise been required to pay by reason of such
untrue or alleged untrue statement or omission or alleged omission. No person
guilty or fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
V. MISCELLANEOUS
5.1 Participation in Underwritten Registrations. No person may
participate in any underwritten registered offering contemplated hereunder
unless such person (a) agrees to sell its securities on the basis provided in
any underwriting arrangements and (b) completes and executes all
questionnaires, powers of attorney, indemnities, underwriting arrangements and
other documents reasonably required under the terms of such underwriting
arrangements and these Registration Rights.
5.2 Rule 144. FUNC covenants that it will use reasonable efforts
to file any reports required to be filed by it under the Securities Act and
the Exchange Act and that it will take such further action as any Large
Shareholder may reasonably request, all to the extent required from time to
time to enable such Large Shareholder to sell Registrable Securities without
registration under the Securities Act within the limitation of the exemptions
provided by Rule 144 under the Securities Act, as such Rule may be amended
from time to time, or any similar rule or regulation hereafter adopted by the
Commission. Upon the request of any Large Shareholder, FUNC will deliver to
such Large Shareholder a written statement as to whether it has complied with
such requirements.
