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AGREEMENT AND PLAN OF MERGER
dated as of November 17, 1997
by and between
Wachovia Corporation,
The American Bank of Hollywood
and
Ameribank Bancshares, Inc.
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TABLE OF CONTENTS
Page
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RECITALS......................................................................1
ARTICLE 1 Certain Definitions................................................2
1.1 Certain Definitions................................................2
ARTICLE 2 The Merger and Bank Merger.........................................7
2.1 The Merger.........................................................7
2.2 Effective Date and Effective Time..................................7
2.3 Plan of Merger.....................................................8
2.4 Bank Merger........................................................8
ARTICLE 3 Consideration; Exchange Procedures.................................8
3.1 Merger Consideration...............................................8
3.2 Rights as Stockholders; Stock Transfers............................8
3.3 Fractional Shares..................................................9
3.4 Exchange Procedures................................................9
3.5 Anti-Dilution Provisions...........................................10
ARTICLE 4 Actions Pending Acquisition........................................10
4.1 Forbearances of X..................................................10
4.2 Forbearances of YZ.................................................13
ARTICLE 5 Representations and Warranties.....................................13
5.1 Disclosure Schedules...............................................13
5.2 Standard...........................................................13
5.3 Representations and Warranties of X................................13
5.4 Representations and Warranties of YZ...............................24
ARTICLE 6 Covenants..........................................................27
6.1 Reasonable Best Efforts............................................27
6.2 Stockholder Approvals..............................................28
6.3 Registration Statement/Exemption...................................28
6.4 Press Releases.....................................................29
6.5 Access; Information................................................29
6.6 Acquisition Proposals..............................................30
6.7 Affiliate Agreements...............................................31
6.8 Takeover Laws......................................................31
6.9 Certain Policies...................................................31
6.10 NYSE Listing.......................................................32
6.11 Regulatory Applications............................................32
6.12 Indemnification....................................................32
6.13 Benefit Plans......................................................33
6.14 Accountants' Letters...............................................34
6.15 Notification of Certain Matters....................................34
6.17 Dividend Coordination..............................................34
ARTICLE 7 Conditions to Consummation of the Merger...........................35
7.1 Conditions to Each Party's Obligation to Effect the Merger.........35
7.2 Conditions to Obligation of X......................................36
7.3 Conditions to Obligation of YZ.....................................36
ARTICLE 8 Termination........................................................37
8.1 Termination........................................................37
8.2 Effect of Termination and Abandonment..............................38
ARTICLE 9 Miscellaneous......................................................39
9.1 Survival...........................................................39
9.2 Waiver; Amendment..................................................39
9.3 Counterparts.......................................................39
9.4 Governing Law......................................................39
9.5 Expenses...........................................................39
9.6 Notices............................................................40
9.7 Entire Understanding; No Third Party Beneficiaries.................41
9.8 Interpretation; Effect.............................................41
EXHIBIT A Form of Stock Option Agreement
EXHIBIT B Form of Shareholder Agreement
EXHIBIT C Form of Plan of Merger
EXHIBIT D Form of Bank Merger Agreement
EXHIBIT E Form of Non-Competition Agreement
AGREEMENT AND PLAN OF MERGER, dated as of November 17, 1997 (this
"Agreement") by and between Ameribank Bancshares, Inc. ("Bancshares"), The
American Bank of Hollywood ("American") and Wachovia Corporation ("Wachovia").
RECITALS
A. Ameribank Bancshares. Bancshares is a Florida corporation, having its
principal place of business in Hollywood, Florida and the owner of 100% of the
issued and outstanding shares of American, a Florida chartered bank.
B. Wachovia Corporation. Wachovia is a North Carolina corporation, having
its principal place of business in Winston-Salem, North Carolina and Atlanta,
Georgia and the owner of 100% of the issued and outstanding shares of 1st United
Bank ("1st United").
C. Stock Option Agreement. As a condition and an inducement to Wachovia's
entering into this Agreement, Bancshares has granted to Wachovia an option
pursuant to a stock option agreement, in substantially the form of Exhibit A.
D. Shareholder Agreement. As a further condition and inducement to the
willingness of Wachovia to enter into this Agreement, shareholders of Bancshares
who own not less than 50% of the Bancshares Common Stock issued and outstanding
have entered into agreements (a "Voting Agreement") with Wachovia, in the form
of Exhibit B hereto, under which each shareholder has agreed to vote in favor of
this Agreement.
E. Non-Competition Agreements. As a further condition and inducement to the
willingness of Wachovia to enter into this Agreement, the directors and certain
of the senior officers of Bancshares and American have entered into
Non-Competition Agreements in the form of Exhibit "E" hereto.
F. Intentions of the Parties. It is the intention of the parties to this
Agreement that the business combination contemplated hereby be accounted for
under the pooling of interest accounting method (but such accounting treatment
shall not be a condition precedent to closing) and be treated as a
"reorganization" under Section 368 of the Internal Revenue Code of 1986 (the
"Code").
G. Board Action. The respective Boards of Directors of each of Wachovia,
American and Bancshares have determined that it is in the best interests of
their respective companies and their stockholders to consummate the strategic
business combination transactions provided for herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements contained herein the
parties agree as follows:
ARTICLE 1
Certain Definitions
1.1. Certain Definitions. The following terms are used in this Agreement
with the meanings set forth below:
"1st United" has the meaning set forth in the preamble to this Agreement.
"Acquisition Proposal" has the meaning set forth in Section 6.6.
"Agreement" means this Agreement, as amended or modified from time to time
in accordance with Section 9.2.
"American" has the meaning set forth in the preamble to this Agreement.
"American Board" means the Board of Directors of American.
"American By-Laws" means the By-Laws of American.
"American Certificate" means the Articles of Incorporation of American.
"Bancshares" has the meaning set forth in the preamble to this Agreement.
"Bancshares Affiliate" has the meaning set forth in Section 6.7(a).
"Bancshares Board" means the Board of Directors of Bancshares.
"Bancshares By-Laws" means the By-laws of Bancshares.
"Bancshares Certificate" means the Articles of Incorporation of Bancshares.
"Bancshares Common Stock" means the common stock, par value $5.00 per
share, of Bancshares.
"Bancshares Meeting" has the meaning set forth in Section 6.2.
"Bank Merger" means the merger of American with and into 1st United.
"Bank Merger Agreement" has the meaning set forth in Section 2.4.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Compensation and Benefit Plans" has the meaning set forth in Section
5.3(m).
"Costs" has the meaning set forth in Section 6.12(a).
"Disclosure Schedule" has the meaning set forth in Section 5.1.
"Effective Date" means the date on which the Effective Time occurs.
"Effective Time" means the effective time of the Merger, as provided for in
Section 2.2.
"Environmental Laws" means all applicable local, state and federal
environmental, health and safety laws and regulations, including, without
limitation, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation, and Liability Act, the Clean Water Act,
the Federal Clean Air Act, and the Occupational Safety and Health Act, each as
amended, regulations promulgated thereunder, and state counterparts.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" has the meaning set forth in Section 5.3(m).
"Exchange Act" means the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder.
"Exchange Agent" has the meaning set forth in Section 3.4.
"Exchange Ratio" has the meaning set forth in Section 3.1.
"Exemption" has the meaning set forth in Section 6.3.
"FBCA" means the Florida Business Corporation Act.
"Fairness Order" has the meaning set forth in Section 6.3.
"FDIC" means the Federal Deposit Insurance Corporation.
"Financial Statements" has the meaning set forth in Section 5.3(g).
"Florida Department of State" has the meaning set forth in Section 2.1(b).
"Florida Comptroller" means the Comptroller of the State of Florida acting
as the head of the Florida Department of Banking and Finance.
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"Governmental Authority" means any court, administrative agency or
commission or other federal, state or local governmental authority or
instrumentality.
"Indemnified Party" has the meaning set forth in Section 6.12(a).
"Insurance Amount" has the meaning set forth in Section 6.12(b).
"Insurance Policy" has the meaning set forth in Section 5.3(t).
"Lien" means any charge, mortgage, pledge, security interest, restriction,
claim, lien, or encumbrance.
"Material Adverse Effect" means, with respect to Wachovia, Bancshares or
the Surviving Corporation, any effect that (i) is material and adverse to the
financial position, results of operations or business of Wachovia and its
Subsidiaries taken as a whole, Bancshares and its Subsidiaries taken as a whole,
or the Surviving Corporation and its Subsidiaries taken as a whole,
respectively, or (ii) would materially impair the ability of Wachovia or
Bancshares or their Subsidiaries to perform their obligations under this
Agreement or the Bank Merger Agreement or otherwise materially threaten or
materially impede the consummation of the Merger, the Bank Merger and the other
transactions contemplated by this Agreement; 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 their
holding companies generally, (c) any modifications or changes to valuation
policies and practices in connection with the Merger or the Bank Merger or
restructuring charges taken in connection with the Merger or the Bank Merger, in
each case in accordance with generally accepted accounting principles, (d)
effects of any action taken with the prior written consent of Wachovia and (e)
changes in conditions or circumstances that affect the banking industry
generally.
"Merger" has the meaning set forth in Section 2.1.
"Merger Consideration" has the meaning set forth in Section 2.1.
"Multiemployer Plans" has the meaning set forth in Section 5.3(m).
"NCBCA" means the North Carolina Business Corporation Act.
"New Certificate" has the meaning set forth in Section 3.4.
"North Carolina Secretary" has the meaning set forth in Section 2.1(b).
"NYSE" means the New York Stock Exchange, Inc.
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"Offering Circular" has the meaning set forth in Section 6.3.
"Old Certificate" has the meaning set forth in Section 3.4.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Pension Plan" has the meaning set forth in Section 5.3(m).
"Person" means any individual, bank, corporation, partnership, association,
joint-stock company, business trust or unincorporated organization.
"Plans" has the meaning set forth in Section 5.3(m).
"Previously Disclosed" by a party shall mean information set forth in its
Disclosure Schedule.
"Proxy Statement" has the meaning set forth in Section 6.3.
"Registration Statement" has the meaning set forth in Section 6.3.
"Regulatory Authority" has the meaning set forth in Section 5.3(i).
"Representatives" means, with respect to any Person, such Person's
directors, officers, employees, legal or financial advisors or any
representatives of such legal or financial advisors.
"Rights" means, with respect to any Person, securities or obligations
convertible into or exercisable or exchangeable for, or giving any person any
right to subscribe for or acquire, or any options, calls or commitments relating
to, or any stock appreciation right or other instrument the value of which is
determined in whole or in part by reference to the market price or value of,
shares of capital stock of such person.
"SEC" means the Securities and Exchange Commission.
"SEC Documents" has the meaning set forth in Section 5.4(g).
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations thereunder.
"Stock Option Agreement" has the meaning set forth in Recital C.
"Subsidiary" and "Significant Subsidiary" have the meanings ascribed to
them in Rule 1-02 of Regulation S-X of the SEC.
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"Surviving Corporation" has the meaning set forth in Section 2.1.
"Takeover Laws" has the meaning set forth in Section 5.3(o).
"Tax" and "Taxes" means all federal, state, local or foreign taxes,
charges, fees, levies or other assessments, however denominated, including,
without limitation, all net income, gross income, gross receipts, gains, sales,
use, ad valorem, goods and services, capital, production, transfer, franchise,
windfall profits, license, withholding, payroll, employment, disability,
employer health, excise, estimated, severance, stamp, occupation, property,
environmental, unemployment or other taxes, custom duties, fees, assessments or
charges of any kind whatsoever, together with any interest and any penalties,
additions to tax or additional amounts imposed by any taxing authority whether
arising before, on or after the Effective Date.
"Tax Returns" means any return, amended return or other report (including
elections, declarations, disclosures, schedules, estimates and information
returns) required to be filed with respect to any Tax.
"Treasury Stock" shall mean shares of Bancshares Common Stock held by
Bancshares or any of its Subsidiaries or by Wachovia or any of its Subsidiaries,
in each case other than in a fiduciary capacity or as a result of debts
previously contracted in good faith.
"Voting Agreement" has the meaning set forth in the preamble to this
Agreement.
"Wachovia" has the meaning set forth in the preamble to this Agreement.
"Wachovia Board" means the Board of Directors of Wachovia.
"Wachovia Common Stock" means the common stock, par value $5.00 per share,
of Wachovia.
"Wachovia Preferred Stock" means the preferred stock, par value $5.00 per
share, of Wachovia.
"Wachovia Stock" means, collectively, Wachovia Common Stock and Wachovia
Preferred Stock.
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ARTICLE 2
The Merger and Bank Merger
2.1. The Merger. (a) At the Effective Time, Bancshares shall merge with and
into Wachovia (the "Merger"), the separate corporate existence of Bancshares
shall cease and Wachovia shall survive and continue to exist as a North Carolina
corporation (Wachovia, as the surviving corporation in the Merger, sometimes
being referred to herein as the "Surviving Corporation"). Wachovia may at any
time prior to the Effective Time change the method of effecting the combination
with Bancshares (including, without limitation, the provisions of this Article
II) or the Bank Merger Agreement or the method of effecting the combination of
American and 1st United pursuant to the Bank Merger Agreement if and to the
extent it deems such change to be necessary or appropriate; provided, however,
that no such change shall (i) alter or change the amount or kind of
consideration to be issued to holders of Bancshares Common Stock as provided for
in this Agreement (the "Merger Consideration"), (ii) adversely affect the tax
treatment of Bancshares's stockholders as a result of receiving the Merger
Consideration or (iii) materially impede or delay consummation of the
transactions contemplated by this Agreement.
(b) Subject to the satisfaction or waiver of the conditions set forth in
Article VII, the Merger shall become effective upon the occurrence of the filing
in the office of the Florida Department of State of articles of merger in
accordance with Section 607.1105 of the FBCA and the filing in the Office of the
Secretary of State of the State of North Carolina (the "North Carolina
Secretary") of articles of merger in accordance with Section 55-11-05 of the
NCBCA or such later date and time as may be set forth in such articles. The
Merger shall have the effects prescribed in the NCBCA and the FBCA.
(c) Articles of Incorporation and By-Laws. The articles of incorporation
and by-laws of Wachovia immediately after the Merger shall be those of Wachovia
as in effect immediately prior to the Effective Time.
(d) Directors and Officers of Wachovia. The directors and officers of
Wachovia immediately after the Merger shall be the directors and officers of
Wachovia immediately prior to the Effective Time, until such time as their
successors shall be duly elected and qualified.
2.2. Effective Date and Effective Time. Subject to the satisfaction or
waiver of the conditions set forth in Article VII, the parties shall cause the
effective date of the Merger (the "Effective Date") to occur on (i) the tenth
business day to occur after the last of the conditions set forth in Article VII
shall have been satisfied or waived in accordance with the terms of this
Agreement (or, at the election of Wachovia, on another business day prior to
such tenth business
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day) or (ii) 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."
2.3. Plan of Merger. Wachovia and Bancshares hereby adopt a separate plan
of merger, in substantially the form of Exhibit C, for purposes of any filing
requirement.
2.4. Bank Merger. Promptly after execution of this Agreement, Wachovia and
Bancshares shall cause 1st United and American to enter into the merger
agreement in the form attached hereto as Exhibit D (the "Bank Merger Agreement")
pursuant to which, immediately after the Effective Time, American will be merged
with and into 1st United on the terms of the Bank Merger Agreement.
ARTICLE 3.
Consideration; Exchange Procedures
3.1. Merger Consideration. Subject to the provisions of this Agreement, at
the Effective Time, automatically by virtue of the Merger and without any action
on the part of any Person:
(a) Outstanding Bancshares Common Stock. Each share, excluding
Treasury Stock, of Bancshares Common Stock, issued and outstanding
immediately prior to the Effective Time shall become and be converted into
the number of shares of Wachovia Common Stock equal to the Exchange Ratio
(as defined in the following sentence). The "Exchange Ratio" shall mean
3.5019 shares of Wachovia Common Stock for each share of Bancshares Common
Stock.
(b) Outstanding Wachovia Stock. Each share of Wachovia Stock issued
and outstanding immediately prior to the Effective Time shall remain issued
and outstanding and unaffected by the Merger.
(c) Treasury Shares. Each share of Bancshares Stock held as Treasury
Stock immediately prior to the Effective Time shall be canceled and retired
at the Effective Time and no consideration shall be issued in exchange
therefor.
3.2. Rights as Stockholders; Stock Transfers. At the Effective Time,
holders of Bancshares Stock shall cease to be, and shall have no rights as,
stockholders of Bancshares, other than to receive any dividend or other
distribution with respect to such Bancshares Stock with a record date occurring
prior to the Effective Time and the consideration provided under this Article
III. After the Effective Time, there shall be no transfers on the stock transfer
books of Bancshares or the Surviving Corporation of shares of Bancshares Stock.
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3.3. Fractional Shares. Notwithstanding any other provision hereof, no
fractional shares of Wachovia Common Stock and no certificates or scrip
therefor, or other evidence of ownership thereof, will be issued in the Merger;
instead, Wachovia shall pay to each holder of Bancshares Common Stock who would
otherwise be entitled to a fractional share of Wachovia Common Stock (after
taking into account all Old Certificates delivered by such holder) an amount in
cash (without interest) determined by multiplying such fraction by the average
of the last sale prices of Wachovia Common Stock, as reported by 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.
3.4. Exchange Procedures. (a) As promptly as practicable but in no event
more than 20 days after the Effective Date, Wachovia or Wachovia Bank, N.A. (in
such capacity, the "Exchange Agent"), shall send or cause to be sent to each
former holder of record of shares of Bancshares Common Stock immediately prior
to the Effective Time transmittal materials for use in exchanging such
stockholder's certificates formerly representing shares of Bancshares Common
Stock ("Old Certificates") for the consideration set forth in this Article III.
Wachovia shall cause the certificates representing the shares of Wachovia Common
Stock ("New Certificates") into which shares of a stockholder's Bancshares
Common Stock are converted on the Effective Date and/or any check in respect of
any fractional share interests or dividends or distributions which such person
shall be entitled to receive to be delivered to such stockholder upon delivery
to the Exchange Agent of Old Certificates representing such shares of Bancshares
Common Stock (or indemnity reasonably satisfactory to Wachovia 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 in respect of dividends or distributions which any
such person shall be entitled to receive pursuant to this Article III upon such
delivery.
(b) Notwithstanding the foregoing, neither the Exchange Agent nor any
party hereto shall be liable to any former holder of Bancshares Common
Stock for any amount properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.
(c) At the election of Wachovia, no dividends or other distributions
with respect to Wachovia Common Stock with a record date occurring after
the Effective Time shall be paid to the holder of any unsurrendered Old
Certificate representing shares of Bancshares Common Stock converted in the
Merger into the right to receive shares of such Wachovia Common Stock until
the holder thereof shall be entitled to receive New Certificates in
exchange therefor in accordance with the procedures set forth in this
Section 3.4, and no such shares of Bancshares Common Stock shall be
eligible to vote until the holder of Old Certificates is entitled to
receive New Certificates in accordance with the procedures set forth in
this Section 3.4. After becoming so entitled in accordance with this
Section 3.4, the record holder thereof also shall be entitled to receive
any such dividends or other distributions, without any interest thereon,
which theretofore
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had become payable with respect to shares of Wachovia Common Stock such
holder had the right to receive upon surrender of the Old Certificate.
3.5. Anti-Dilution Provisions. In the event Wachovia changes (or
establishes a record date for changing) the number of shares of Wachovia 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 Wachovia Common Stock and the record date therefor shall be
prior to the Effective Date, the Exchange Ratio shall be proportionately
adjusted.
ARTICLE 4.
Actions Pending Acquisition
4.1. Forbearances of Bancshares. From the date hereof until the Effective
Time, except as expressly contemplated by this Agreement, without the prior
written consent of Wachovia, Bancshares will not, and will cause each of its
Subsidiaries not to:
(a) Ordinary Course. Conduct the business of Bancshares and its
Subsidiaries other than in the ordinary and usual course or 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
reasonably likely to have an adverse affect upon Bancshares's or its
Subsidiaries' ability to perform any of its material obligations under this
Agreement or the Bank Merger Agreement.
(b) Capital Stock. Issue, sell or otherwise permit to become
outstanding, or authorize the creation of, any additional shares of
Bancshares Common Stock or any Rights, (B) enter into any agreement with
respect to the foregoing, (C) permit any additional shares of Bancshares
Common Stock to become subject to new grants of employee or director stock
options, other Rights or similar stock-based employee rights, (D)
repurchase any shares of Bancshares Common Stock, (E) declare or pay a
dividend in Bancshares Common Stock or Rights for Bancshares Common Stock
or (F) except as Previously Disclosed enter into contracts with officers,
directors or shareholders pursuant to which such officers, directors or
shareholders will receive cash payments, Bancshares Common Stock or other
valuable consideration from Bancshares or its Subsidiaries.
(c) Dividends, Etc. (a) Make, declare, pay or set aside for payment
any dividend (other than (A) quarterly cash dividends on Bancshares Common
Stock in an amount not to exceed $.75 per share (the "Permitted Dividend
Amount") with record and payment dates consistent with past practice if
such payment dates occur before the Effective Time and the payment of the
dividend will not result in the Bancshares Shareholders receiving the
Bancshares dividend and the corresponding Wachovia quarterly dividend and
(B) dividends from American to Bancshares on or in respect of, or
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declare or make any distribution on any shares of Bancshares common Stock
or (b) directly or indirectly adjust, split, combine, redeem, reclassify,
purchase or otherwise acquire, any shares of its capital stock or Rights
thereto.
(d) Compensation; Employment Agreements; Etc. Except as Previously
Disclosed enter into or amend or renew any employment, consulting,
severance or similar agreements or arrangements with any director, officer
or employee of Bancshares or its Subsidiaries, or, other than as Previously
Disclosed, grant any salary or wage increase or increase any employee
benefit (including incentive or bonus payments), except (i) for normal
individual increases in compensation to employees or officers in the
ordinary course of business consistent with past practice, (ii) for other
changes that are required by applicable law, (iii) to satisfy Previously
Disclosed contractual obligations existing as of the date hereof, or (iv)
for grants of awards to newly hired employees consistent with past
practice.
(e) Benefit Plans. Except as Previously Disclosed enter into,
establish, adopt or amend (except (i) as may be required by applicable law
or (ii) to satisfy Previously Disclosed contractual obligations existing as
of the date hereof) 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 (or similar arrangement) related
thereto, in respect of any director, officer or employee of Bancshares or
its Subsidiaries, or take any action to accelerate the vesting or
exercisability of stock options, restricted stock or other compensation or
benefits payable thereunder.
(f) Dispositions. Except as Previously Disclosed, sell, transfer,
mortgage, encumber or otherwise dispose of or discontinue any of its
assets, deposits, business or properties except in the ordinary course of
business and in a transaction that is not material to it and its
Subsidiaries taken as a whole and further except that in the ordinary
course of business and with Wachovia's prior approval which will not be
unreasonably withheld or delayed Bancshares and its Subsidiaries may sell
assets now or hereafter owned by Bancshares or its Subsidiaries which have
been acquired in the realization of security for debts previously
contracted even though such sales may be material to Bancshares and its
Subsidiaries taken as a whole.
(g) Acquisitions. Except as Previously Disclosed, 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 assets, business, deposits or
properties of any other entity except in the ordinary course of business
and in a transaction that is not material to it and its Subsidiaries taken
as a whole.
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(h) Governing Documents. Amend the Bancshares Certificate, Bancshares
By-laws or the certificate of incorporation or by-laws (or similar
governing documents) of any of Bancshares's Subsidiaries.
(i) 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.
(j) Contracts. Except as Previously Disclosed and except in the
ordinary course of business consistent with past practice, enter into or
terminate any material contract (as defined in Section 5.3(k)) or amend or
modify in any material respect any of its existing material contracts.
(k) Claims. Except in the ordinary course of business consistent with
past practice, settle any claim, action or proceeding, except for any
claim, action or proceeding involving solely money damages in an amount,
individually or in the aggregate for all such settlements, that is not
material to Bancshares and its Subsidiaries taken as a whole.
(l) Adverse Actions. (a) Except as Previously Disclosed take any
action reasonably likely to prevent or impede the Merger from qualifying
for accounting treatment as a pooling of interests and as a reorganization
within the meaning of Section 368 of the Code; or (b) knowingly take any
action that is intended or is reasonably likely to result in (i) any of its
representations and warranties set forth in this Agreement being or
becoming untrue in any material respect at any time at or prior to the
Effective Time, (ii) any of the conditions to the Merger set forth in
Article VII not being satisfied or (iii) a material violation of any
provision of this Agreement except, in each case, as may be required by
applicable law or regulation.
(m) Risk Management. Except as required by applicable law or
regulation, (i) implement or adopt any material change in its interest rate
and other risk management policies, procedures or practices; (ii) fail to
follow its existing policies or practices with respect to managing its
exposure to interest rate and other risk; or (iii) fail to use commercially
reasonable means to avoid any material increase in its aggregate exposure
to interest rate risk.
(n) Indebtedness. Incur any indebtedness for borrowed money other than
in the ordinary course of business.
(o) Commitments. Agree or commit to do any of the foregoing.
4.2. Forbearances of Wachovia. From and after the date hereof until the
Effective Time, except as expressly contemplated by this Agreement, without the
prior written consent of Bancshares, Wachovia will not, and will cause each of
its Subsidiaries not to, take any action
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reasonably likely to prevent or impede the Merger from qualifying as a
reorganization within the meaning of Section 368 of the Code.
ARTICLE 5.
Representations and Warranties
5.1. Disclosure Schedules. On or prior to the date hereof, Wachovia has
delivered to Bancshares a schedule and Bancshares has delivered to Wachovia a
schedule (respectively, its "Disclosure Schedule") setting forth, among other
things, items the disclosure of which is necessary or appropriate either in
response to an express disclosure requirement contained in a provision hereof or
as an exception to one or more representations or warranties contained in
Section 5.3 or 5.4 or to one or more of its covenants contained in Article IV;
provided, that (a) no such item is required to be set forth in a Disclosure
Schedule as an exception to a representation or warranty if its absence would
not be reasonably likely to result in the related representation or warranty
being deemed untrue or incorrect under the standard established by Section 5.2,
and (b) the mere inclusion of an item in a Disclosure Schedule as an exception
to a representation or warranty 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.
5.2. Standard. No representation or warranty of Bancshares or Wachovia
contained in Section 5.3 or 5.4 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, event or circumstance unless such
fact, circumstance or event, individually or taken together with all other
facts, events or circumstances inconsistent with any representation or warranty
contained in Section 5.3 or 5.4 has had or is reasonably likely to have a
Material Adverse Effect except for the representations and warranties in Section
5.3(b), (c), (d), (e), (g), (m)(i) and (v) which shall be true, correct and
complete in all material respects.
5.3. Representations and Warranties of Bancshares. Subject to Sections 5.1
and 5.2 and except as Previously Disclosed in a paragraph of its Disclosure
Schedule corresponding to the relevant paragraph below, Bancshares hereby
represents and warrants to Wachovia:
(a) Organization, Standing and Authority. Bancshares is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Florida. Bancshares is duly qualified to do business and is in
good standing in the states of the United States and any foreign
jurisdictions where its ownership or leasing of property or assets or the
conduct of its business requires it to be so qualified.
(b) Bancshares Stock. As of the date hereof, the authorized capital
stock of Bancshares consists solely of 400,000 shares of Bancshares Common
Stock, of which 270,328 shares were outstanding as of the date hereof. As
of the date hereof, 29,672
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shares of Bancshares Common Stock were held in treasury by Bancshares or
otherwise owned by Bancshares or its Subsidiaries ("Treasury Stock"). The
outstanding shares of Bancshares Common Stock have been duly authorized and
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). As of the date hereof, except as Previously Disclosed
in its Disclosure Schedule, there are no shares of Bancshares Common Stock
authorized and reserved for issuance, Bancshares does not have any Rights
issued or outstanding with respect to Bancshares Stock, and Bancshares does
not have any commitment to authorize, issue or sell any Bancshares Common
Stock or Rights, except pursuant to this Agreement and the Stock Option
Agreement.
(c) Subsidiaries. (i)(A) Bancshares has Previously Disclosed a list of
all of its Subsidiaries together with the jurisdiction of organization of
each such Subsidiary, (ii) except as Previously Disclosed, it owns,
directly or indirectly, all the issued and outstanding equity securities of
each of its Subsidiaries, (iii) no equity securities of any of its
Subsidiaries are or may become required to be issued (other than to it or
its wholly-owned Subsidiaries) by reason of any Right or otherwise, (iv)
there are no contracts, commitments, understandings or arrangements by
which any of such Subsidiaries is or may be bound to sell or otherwise
transfer any equity securities of any such Subsidiaries (other than to it
or its wholly-owned Subsidiaries), (v) there are no contracts, commitments,
understandings, or arrangements relating to its rights to vote or to
dispose of such securities and (vi) all the equity securities of each
Subsidiary held by Bancshares or its Subsidiaries are fully paid and
nonassessable and are owned by Bancshares or its Subsidiaries free and
clear of any Liens.
(ii) Bancshares does not own beneficially, directly or indirectly, any
equity securities or similar interests of any Person, or any interest in a
partnership or joint venture of any kind, other than its Subsidiaries.
(iii) Each of Bancshares's Subsidiaries has been duly organized and is
validly existing in good standing under the laws of the jurisdiction of its
organization, 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.
(d) Corporate Power. Bancshares and each of its 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 Bancshares and
American each has the corporate power and authority to execute, deliver and
perform its obligations under this Agreement, the Bank Merger Agreement and
the Stock Option Agreement and to consummate the transactions contemplated
hereby and thereby.
(e) Corporate Authority. Subject in the case of this Agreement to
receipt of the requisite approval of the Merger set forth in this Agreement
and the requisite approval
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of the Bank Merger as set forth in the Bank Merger Agreement by the holders
of a majority of the outstanding shares of Bancshares Common Stock entitled
to vote on the Merger unless Wachovia is the beneficial owner of more than
10% of the Bancshares Common Stock in which event the required percentage
of outstanding shares of Bancshares Common Stock will be 80%, and the vote
of Bancshares as the sole shareholder as American on the Bank Merger (which
are the only shareholder votes required thereon), this Agreement, the Bank
Merger Agreement, the Stock Option Agreement and the transactions
contemplated hereby and thereby have been authorized by all necessary
corporate action of Bancshares and the Bancshares Board and American and
the American Board prior to the date hereof. This Agreement is a valid and
legally binding obligation of Bancshares and the Bank Merger Agreement is
the valid and legally binding obligation of American, each enforceable in
accordance with its terms (except as enforceability 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). The Bancshares Board of
Directors has received the written opinion of Xxxxx X. Xxxxx & Co. to the
effect that as of the date hereof the Exchange Ratio is fair to the holders
of Bancshares Common Stock from a financial point of view.
(f) Regulatory Filings; No Defaults. (i) No consents or approvals of,
or filings or registrations with, any Governmental Authority or with any
third party are required to be made or obtained by Bancshares or any of its
Subsidiaries in connection with the execution, delivery or performance by
Bancshares of this Agreement or the Stock Option Agreement or by American
of the Bank Merger Agreement or to consummate the Merger and the Bank
Merger except for (A) the filing of a notice under the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 0000 (xxx "XXX Xxx"), (X) filings of
applications or notices with federal and Florida banking authorities, (C)
filings with the SEC and state securities authorities, (D) the filing of
articles of merger with the North Carolina Secretary pursuant to the NCBCA
and the Florida Department of State pursuant to the FBCA, and (E) the
approvals set forth in Section 7.1(b). As of the date hereof, Bancshares is
not aware of any reason why the approvals set forth in Section 7.1(b) will
not be received without the imposition of a condition, restriction or
requirement of the type described in Section 7.1(b).
(ii) Except as Previously Disclosed, subject to receipt of the
regulatory approvals referred to in the preceding paragraph, and expiration
of related waiting periods, and required filings under federal and state
securities laws, the execution, delivery and performance of this Agreement,
the Bank Merger Agreement and the Stock Option Agreement and the
consummation of the transactions contemplated hereby and thereby do not and
will not (A) constitute a breach or violation of, or a default under, or
give rise to any Lien, any acceleration of remedies or any right of
termination under, any law, rule or regulation or any judgment, decree,
order, governmental permit or license, or agreement, indenture or
instrument of Bancshares or of any of its Subsidiaries or to which
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Bancshares or any of its Subsidiaries or properties is subject or bound,
(B) constitute a breach or violation of, or a default under, the American
Certificate, the American By-Laws, the Bancshares Certificate or the
Bancshares By-Laws, or (C) require any consent or approval under any such
law, rule, regulation, judgment, decree, order, governmental permit or
license, agreement, indenture or instrument.
(g) Financial Reports; No Material Adverse Effect. (i) Bancshares's
audited annual consolidated financial statements for the fiscal years ended
December 31, 1994, 1995 and 1996, and the unaudited consolidated financial
statement prepared by Bancshares for the period January 1, 1997 through
September 30, 1997, copies of which have been provided to Wachovia (the
"Financial Statements") (A) have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis through the
periods involved and fairly present the financial position of Bancshares
and its Subsidiaries as of its date, and each of the statements of income
and changes in stockholders' equity and cash flows or equivalent statements
in such financial statements (including any related notes and schedules
thereto) fairly presents the results of operations, changes in
stockholders' equity and changes in cash flows, as the case may be, of
Bancshares and its Subsidiaries for the periods to which they relate, in
each case in accordance with generally accepted accounting principles
consistently applied during the periods involved, except unaudited
statements are subject to normal year-end audit adjustments, and (B) 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 therein, in the light of the circumstances under which they
were made, not misleading.
(ii) Except as Previously Disclosed, since December 31, 1996,
Bancshares and its Subsidiaries have not incurred any liability other than
in the ordinary course of business consistent with past practice.
(iii) Except as Previously Disclosed, since December 31, 1996, (A)
Bancshares and its Subsidiaries have conducted their respective businesses
in the ordinary and usual course consistent with past practice (excluding
the incurrence of expenses related to this Agreement and the transactions
contemplated hereby) and (B) 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 5.3 or otherwise), is
reasonably likely to have a Material Adverse Effect with respect to
Bancshares.
(h) Litigation. Except as Previously Disclosed, no litigation, claim
or other proceeding before any court or governmental agency is pending
against Bancshares or any of its Subsidiaries and, to Bancshares's
knowledge, no such litigation, claim or other proceeding has been
threatened.
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(i) Regulatory Matters. (i) Neither Bancshares 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, or extraordinary
supervisory letter from, 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 Federal Reserve Board and the
FDIC) or the supervision or regulation of it or any of its Subsidiaries
(collectively, the "Regulatory Authorities").
(ii) Neither Bancshares 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 of understanding,
commitment letter, supervisory letter or similar submission.
(j) Compliance with Laws. Bancshares and each of its Subsidiaries:
(i) Except as Previously Disclosed, is in compliance 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;
(ii) Has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations
with, all Governmental Authorities that are required in order to
permit them to own or lease their properties and to conduct their
businesses as presently conducted; all such permits, licenses,
certificates of authority, orders and approvals are in full force and
effect and, to Bancshares's knowledge, no suspension or cancellation
of any of them is threatened; and
(iii) Except as Previously Disclosed, has received no
notification or communication from any Governmental Authority (A)
asserting that Bancshares or any of its Subsidiaries is not in
substantial compliance with any of the statutes, regulations, or
ordinances which such Governmental Authority enforces or (B)
threatening to revoke any license, franchise, permit, or governmental
authorization (nor, to Bancshares's knowledge, do any grounds for any
of the foregoing exist).
(k) Material Contracts; Defaults. Except as Previously Disclosed,
neither Bancshares nor any of its Subsidiaries is a party to, bound by or
subject to any agreement,
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contract, arrangement, commitment or understanding (whether written or
oral) (i) that is a "material contract" within the meaning of Item
601(b)(10) of the SEC's Regulation S-K or (ii) that in any respect
restricts the conduct of business by it or any of its Subsidiaries. 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.
(l) No Brokers. No action has been taken by Bancshares that would give
rise to any valid claim against any party hereto for a brokerage
commission, finder's fee or other like payment with respect to the
transactions contemplated by this Agreement, excluding a fee of not more
than $15,000.00 to be paid to Xxxxx X. Xxxxx & Co. for its fairness
opinion.
(m) Employee Benefit Plans. (i) Section 5.3(m)(i) of Bancshares's
Disclosure Schedule contains a complete and accurate list of all existing
bonus, incentive, deferred compensation, pension, retirement,
profit-sharing, thrift, savings, employee stock ownership, stock bonus,
stock purchase, restricted stock, stock option, severance, welfare and
fringe benefit plans, employment or severance agreements and all similar
practices, policies and arrangements in which any employee or former
employee (the "Employees"), consultant or former consultant (the
"Consultants") or director or former director (the "Directors") of
Bancshares or any of its Subsidiaries participates or to which any such
Employees, Consultants or Directors are a party (the "Compensation and
Benefit Plans"). Except as Previously Disclosed, neither Bancshares nor any
of its Subsidiaries has any commitment to create any additional
Compensation and Benefit Plan or to modify or change any existing
Compensation and Benefit Plan.
(ii) Each Compensation and Benefit Plan has been operated and
administered in all material respects in accordance with its terms and with
applicable law, including, but not limited to, ERISA, the Code, the
Securities Act, the Exchange Act, the Age Discrimination in Employment Act,
and any regulations or rules promulgated thereunder, and all filings,
disclosures and notices required by ERISA, the Code, the Securities Act,
the Exchange Act, the Age Discrimination in Employment Act or any other
applicable law have been timely made. Each Compensation and Benefit Plan
which is an "employee pension benefit plan" within the meaning of Section
3(2) of ERISA (a "Pension Plan") and which is intended to be qualified
under Section 401(a) of the Code has received a favorable determination
letter (including, if such plan is other than a "prototype" plan, a
determination that the related trust under such Compensation and Benefit
Plan is exempt from tax under Section 501(a) of the Code) from the Internal
Revenue Service ("IRS") for "TRA" (as defined in Rev. Proc. 93-39), or will
file for such determination letter prior to the expiration of the remedial
amendment period for such Compensation and Benefit
-18-
Plan, and Bancshares is not aware of any circumstances likely to result in
revocation of any such favorable determination letter. There is no material
pending or, to the knowledge of Bancshares, threatened legal action, suit
or claim relating to the Compensation and Benefit Plans, other than routine
claims for benefits. Neither Bancshares nor any of its Subsidiaries has
engaged in a transaction, or omitted to take any action, with respect to
any Compensation and Benefit Plan that would reasonably be expected to
subject Bancshares or any of its Subsidiaries to a material tax or penalty
imposed by either Section 4975 of the Code or Section 502 of ERISA,
assuming for purposes of Section 4975 of the Code that the taxable period
of any such transaction expired as of the date hereof.
(iii) No material liability (other than for payment of premiums to the
PBGC which have been made or will be made on a timely basis) under Title IV
of ERISA has been or is expected to be incurred by Bancshares 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 any single-employer
plan of any entity (an "ERISA Affiliate") which is considered one employer
with Bancshares under Section 4001(a)(14) of ERISA or Section 414(b) or (c)
of the Code (an "ERISA Affiliate Plan"). None of Bancshares, any of its
Subsidiaries or any ERISA Affiliate has contributed, or has been obligated
to contribute, to a multiemployer plan under Subtitle E of Title IV of
ERISA at any time since September 26, 1980. 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 Compensation and Benefit Plan or by any ERISA Affiliate Plan within
the 12-month period ending on the date hereof, and to the knowledge of
Bancshares no such notice will be required to be filed as a result of the
transactions contemplated by this Agreement. The PBGC has not instituted
proceedings to terminate any Pension Plan or ERISA Affiliate Plan and, to
Bancshares's knowledge, no condition exists that presents a material risk
that such proceedings will be instituted. To the knowledge of Bancshares,
there is no pending investigation or enforcement action by the PBGC, the
Department of Labor (the "DOL") or IRS or any other governmental agency
with respect to any Compensation and Benefit Plan. Under each Pension Plan
and ERISA Affiliate Plan, as of the date of the most recent actuarial
valuation performed prior to the date of this Agreement, 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 such actuarial valuation of such Pension
Plan or ERISA Affiliate Plan), did not exceed the then current value of the
assets of such Pension Plan or ERISA Affiliate Plan and since such date
there has been neither an adverse change in the financial condition of such
Pension Plan or ERISA Affiliate Plan nor any amendment or other change to
such Pension Plan or ERISA Affiliate Plan that would increase the amount of
benefits thereunder which reasonably could be expected to change such
result.
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(iv) All contributions required to be made under the terms of any
Compensation and Benefit Plan or ERISA Affiliate Plan or any employee
benefit arrangements under any collective bargaining agreement to which
Bancshares or any of its Subsidiaries is a party have been timely made or
have been reflected on Bancshares's financial statements. Neither any
Pension Plan nor any ERISA Affiliate Plan has an "accumulated funding
deficiency" (whether or not waived) within the meaning of Section 412 of
the Code or Section 302 of ERISA and all required payments to the PBGC with
respect to each Pension Plan or ERISA Affiliate Plan have been made on or
before their due dates. None of Bancshares, any of its Subsidiaries or any
ERISA Affiliate (x) has provided, or would reasonably be expected to be
required to provide, security to any Pension Plan or to any ERISA Affiliate
Plan pursuant to Section 401(a)(29) of the Code, and (y) has taken any
action, or omitted to take any action, that has resulted, or would
reasonably be expected to result, in the imposition of a lien under Section
412(n) of the Code or pursuant to ERISA.
(v) Except as Previously Disclosed, neither Bancshares nor any of its
Subsidiaries has any obligations to provide retiree health and life
insurance or other retiree death benefits under any Compensation and
Benefit Plan, other than benefits mandated by Section 4980B of the Code,
and each such Compensation and Benefit Plan may be amended or terminated
without incurring liability thereunder. Except as Previously Disclosed,
there has been no communication to Employees by Bancshares or any of its
Subsidiaries that would reasonably be expected to promise or guarantee such
Employees retiree health or life insurance or other retiree death benefits
on a permanent basis.
(vi) With respect to each Compensation and Benefit Plan, if
applicable, Bancshares has provided, or made available to Wachovia, true
and complete copies of existing: (A) Compensation and Benefit Plan
documents and amendments thereto; (B) trust instruments and insurance
contracts; (C) two most recent Forms 5500 filed with the IRS; (D) most
recent actuarial report and financial statement; (E) the most recent
summary plan description; (F) forms filed with the PBGC (other than for
premium payments); (G) most recent determination letter issued by the IRS;
(H) any Form 5310 or Form 5330 filed with the IRS; and (I) most recent
nondiscrimination tests performed under ERISA and the Code (including
401(k) and 401(m) tests).
(vii) Except as Previously Disclosed, the consummation of the
transactions contemplated by this Agreement would not, directly or
indirectly (including, without limitation, as a result of any termination
of employment prior to or following the Effective Time) reasonably be
expected to (A) entitle any Employee, Consultant or Director to any payment
(including severance pay or similar compensation) or any increase in
compensation, (B) result in the vesting or acceleration of any benefits
under any Compensation and Benefit Plan or (C) result in any material
increase in benefits payable under any Compensation and Benefit Plan.
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(viii) Neither Bancshares nor any of its Subsidiaries maintains any
compensation plans, programs or arrangements the payments under which would
not reasonably be expected to be deductible as a result of the limitations
under Section 162(m) of the Code and the regulations issued thereunder.
(ix) Except as Previously Disclosed, as a result, directly or
indirectly, of the transactions contemplated by this Agreement (including,
without limitation, as a result of any termination of employment prior to
or following the Effective Time), none of Wachovia, Bancshares or the
Surviving Corporation, or any of their respective Subsidiaries will be
obligated to make a payment that would be characterized as an "excess
parachute payment" to an individual who is a "disqualified individual" (as
such terms are defined in Section 280G of the Code), without regard to
whether such payment is reasonable compensation for personal services
performed or to be performed in the future.
(n) Labor Matters. Neither Bancshares 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 Bancshares 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 Bancshares or any such Subsidiary to bargain with any
labor organization as to wages or conditions of employment, nor is there
any strike or other labor dispute involving it or any of its Subsidiaries
pending or, to Bancshares's knowledge, threatened, nor is Bancshares aware
of any activity involving its or any of its Subsidiaries' employees seeking
to certify a collective bargaining unit or engaging in other organizational
activity.
(o) Takeover Laws; Dissenters Rights. Bancshares has taken all action
required to be taken by it in order to exempt this Agreement, the Bank
Merger Agreement, the Stock Option Agreement and the transactions
contemplated hereby and thereby from, and this Agreement, the Bank Merger
Agreement, the Stock Option Agreement and the transactions contemplated
hereby and thereby are exempt from, the requirements of any "moratorium",
"control share", "fair price" "affiliate transaction", "business
combination" or other antitakeover laws and regulations of any state
(collectively, "Takeover Laws"), including, without limitation, the State
of Florida, and including, without limitation, Sections 607.0901 and
607.0902 of the FBCA. Holders of Bancshares Common Stock do have dissenters
rights in connection with the Merger. which rights and the procedure for
exercise of which will be fully disclosed in the Proxy Statement.
(p) Environmental Matters. Except as Previously Disclosed, to the
knowledge of Bancshares and its Subsidiaries, neither the conduct nor
operation of Bancshares or its
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Subsidiaries nor any condition of any property presently or previously
owned, leased or operated by any of them (including, without limitation, in
a fiduciary or agency capacity), or on which any of them holds a Lien,
violates or violated Environmental Laws and no condition has existed or
event has occurred with respect to any of them or any such property that,
with notice or the passage of time, or both, is reasonably likely to result
in liability under Environmental Laws. Except as Previously Disclosed,
neither Bancshares nor any of its Subsidiaries has received any notice from
any person or entity that Bancshares or its Subsidiaries or the operation
or condition of any property ever owned, leased, operated, or held as
collateral or in a fiduciary capacity by any of them are or were in
violation of or otherwise are alleged to have liability under any
Environmental Law, including, but not limited to, responsibility (or
potential responsibility) for the cleanup or other remediation of any
pollutants, contaminants, or hazardous or toxic wastes, substances or
materials at, on, beneath, or originating from any such property.
(q) Tax Matters. Except as Previously Disclosed, (i) all Tax Returns
that are required to be filed by or with respect to Bancshares and its
Subsidiaries have been duly filed, (ii) all Taxes shown to be due on the
Tax Returns referred to in clause (i) have been paid in full, (iii) no
audits of or to Bancshares knowledge inquiries into the Tax Returns
referred to in clause (i) by the Internal Revenue Service or the
appropriate state, local or foreign taxing authority are ongoing, (iv) all
deficiencies asserted or assessments made as a result of such examinations
have been paid in full, (v) no issues that have been raised by the relevant
taxing authority in connection with the examination of any of the Tax
Returns referred to in clause (i) are currently pending, and (vi) no
waivers of statutes of limitation have been given by or requested with
respect to any Taxes of Bancshares or its Subsidiaries. Bancshares has made
available to Wachovia true and correct copies of the United States federal
income Tax Returns filed by Bancshares and its Subsidiaries for each of the
three most recent fiscal years ended on or before December 31, 1996.
Neither Bancshares nor any of its Subsidiaries has any liability with
respect to income, franchise or similar Taxes that accrued on or before the
end of the most recent period covered by the Financial Statement in excess
of the amounts accrued with respect thereto that are reflected in the
Financial Statements. Neither Bancshares nor any of its Subsidiaries has
any reason to believe that any conditions exist that might prevent or
impede the Merger from qualifying as a reorganization within the meaning of
Section 368(a) of the Code.
(r) Risk Management Instruments. Bancshares has not entered into any
interest rate swaps, caps, floors, option agreements, futures and forward
contracts and other similar risk management arrangements, whether entered
into for Bancshares's own account, or for the account of one or more of
Bancshares's Subsidiaries or their customers.
(s) Books and Records. The books and records of Bancshares and its
Subsidiaries have been fully, properly and accurately maintained in all
material respects,
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and there are no material inaccuracies or discrepancies of any kind
contained or reflected therein, and they fairly present the financial
position of Bancshares and its Subsidiaries.
(t) Insurance. Bancshares's Disclosure Schedule sets forth all of the
insurance policies, binders, or bonds maintained by Bancshares or its
Subsidiaries or under which Bancshares pays the premiums ("Insurance
Policies"). Bancshares and its Subsidiaries are insured with reputable
insurers against such risks and in such amounts as the management of
Bancshares reasonably has determined to be prudent in accordance with
industry practices. All the Insurance Policies are in full force and
effect; Bancshares and its Subsidiaries are not in material default
thereunder; and all claims thereunder have been filed in due and timely
fashion.
(u) Asset Classification. Bancshares has Previously Disclosed a list,
accurate and complete in all material respects, of the aggregate amounts of
loans, extensions of credit or other assets of it and its Subsidiaries that
have been classified by it as of September 30, 1997 (the "Asset
Classification"); and no amounts of loans, extensions of credit or other
assets that have been classified as of September 30, 1997 by any Regulatory
Authority as "Other Loans Specially Mentioned", "Substandard", "Doubtful",
"Loss", or words of similar import are excluded from the amounts disclosed
in the Asset Classification, other than amounts of loans, extensions of
credit or other assets that were charged off by it or a Subsidiary prior to
September 30, 1997.
(v) Related Party Transactions. Bancshares has Previously Disclosed a
list, accurate and complete in all material respects, of all loans,
extensions of credit and contracts between Bancshares or its Subsidiaries
and any officer or director of Bancshares or its Subsidiaries or the
spouse, parents, children or siblings of any such officer or director.
(w) Prior Actions. Except as Previously Disclosed Bancshares and
American have not during the period beginning June 1, 1995 (i) repurchased
any Bancshares Common Stock or Rights, (ii) issued any Bancshares Common
Stock or Rights, (iii) declared or paid a dividend in Bancshares Common
Stock or (iv) implemented any significant increase or decrease in cash
dividends inconsistent with prior practices.
(x) Disclosure. The representations and warranties contained in this
Section 5.3 do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained in this Section 5.3 not misleading.
5.4. Representations and Warranties of Wachovia. Subject to Sections 5.1
and 5.2 and except as Previously Disclosed in a paragraph of its Disclosure
Schedule corresponding to the relevant paragraph below, Wachovia hereby
represents and warrants to Bancshares as follows:
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(a) Organization, Standing and Authority. Wachovia is duly organized,
validly existing and in good standing under the laws of the State of North
Carolina. Wachovia 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 assets or the conduct of its business
requires it to be so qualified. Wachovia 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.
(b) Wachovia Stock. (i) As of the date hereof, the authorized capital
stock of Wachovia consists solely of 500,000,000 shares of Wachovia Common
Stock, of which ___________ shares were outstanding as of November 14, 1997
and 50,000,000 shares of Wachovia Preferred Stock, of which no shares were
outstanding as of the date hereof. As of the date hereof, except as set
forth in its Disclosure Schedule and except in connection with its publicly
disclosed acquisitions, Wachovia does not have any Rights issued or
outstanding with respect to Wachovia Stock, and Wachovia does not have any
commitment to authorize, issue or sell any Wachovia Stock or Rights, except
pursuant to this Agreement.
(ii) The shares of Wachovia Common Stock to be issued in exchange for
shares of Bancshares Common Stock in the Merger, when issued in accordance
with the terms of this Agreement, will be duly authorized, validly issued,
fully paid and nonassessable.
(c) Subsidiaries. Each of Wachovia's Significant Subsidiaries has been
duly organized and is validly existing in good standing under the laws of
the jurisdiction of its organization, 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 and
it owns, directly or indirectly, all the issued and outstanding equity
securities of each of its Significant Subsidiaries.
(d) Corporate Power. Wachovia 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 Wachovia and
1st United each has the corporate power and authority to execute, deliver
and perform its obligations under this Agreement and the Bank Merger
Agreement and to consummate the transactions contemplated hereby and
thereby.
(e) Corporate Authority. This Agreement and the transactions
contemplated hereby have been authorized by all necessary corporate action
of Wachovia and its Board of Directors and does not require any vote of
stockholders. This Agreement and the Bank Merger Agreement are valid and
legally binding agreements of Wachovia and 1st United respectively
enforceable in accordance with their terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium,
fraudulent
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transfer and similar laws of general applicability relating to or affecting
creditors' rights or by general equity principles).
(f) Regulatory Approvals; No Defaults. (i) No consents or approvals
of, or filings or registrations with, any court, administrative agency or
commission or other governmental authority or instrumentality or with any
third party are required to be made or obtained by Wachovia or any of its
Subsidiaries in connection with the execution, delivery or performance by
Wachovia of this Agreement or to consummate the Merger except for (A) the
filing of applications and notices, as applicable, with the federal and
state banking authorities; (B) approval of the listing on the NYSE of
Wachovia Common Stock to be issued in the Merger; (C) the filing and
declaration of effectiveness of the Registration Statement or the receipt
by Wachovia of the Fairness Order; (D) the filing of articles of merger
with the North Carolina Secretary pursuant to the NCBCA and the Florida
Department of State pursuant to the FBCA; (E) such filings as are required
to be made or approvals as are required to be obtained under the securities
or "Blue Sky" laws of various states in connection with the issuance of
Wachovia Stock in the Merger; and (F) receipt of the approvals set forth in
Section 7.1(b). As of the date hereof, Wachovia is not aware of any reason
why the approvals set forth in Section 7.1(b) will not be received without
the imposition of a condition, restriction or requirement of the type
described in Section 7.1(b).
(ii) Subject to receipt of the regulatory approvals referred to in the
preceding paragraph and expiration of the related waiting periods, and
required filings or satisfaction of the requirements for exemptions from
filing under federal and state securities laws, the execution, delivery and
performance of this Agreement and the consummation of the transactions
contemplated hereby do not and will not (A) constitute a breach or
violation of, or a default under, or give rise to any Lien, any
acceleration of remedies or any right of termination under, any law, rule
or regulation or any judgment, decree, order, governmental permit or
license, or agreement, indenture or instrument of Wachovia or of any of its
Subsidiaries or to which Wachovia or any of its Subsidiaries or properties
is subject or bound, (B) constitute a breach or violation of, or a default
under, the certificate of incorporation or by-laws (or similar governing
documents) of Wachovia or any of its Subsidiaries, or (C) require any
consent or approval under any such law, rule, regulation, judgment, decree,
order, governmental permit or license, agreement, indenture or instrument.
(g) Financial Reports and SEC Documents; Material Adverse Effect. (i)
Wachovia's Annual Reports on Form 10K and all other reports, registration
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
or under Section 13(a), 13(c), 14 or 15(d) of the Exchange Act, in the form
filed or to be filed (collectively, the "SEC Documents"), as of the date
filed, (A) complied or will comply in all material respects as to form with
the applicable requirements under the Securities Act or the Exchange Act,
as the case may
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be, and (B) 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 therein, in the light of the circumstances
under which they were made, not misleading; and each of the balance sheets
contained in or incorporated by reference into any such SEC Document
(including the related notes and schedules thereto) fairly presents, or
will fairly present, the financial position of Wachovia and its
Subsidiaries as of its date, and each of the statements of income and
changes in stockholders' equity and cash flows or equivalent statements in
such SEC Documents (including any related notes and schedules thereto)
fairly presents, or will fairly present, the results of operations, changes
in stockholders' equity and changes in cash flows, as the case may be, of
Wachovia and its Subsidiaries for the periods to which they relate, 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 year-end audit adjustments in the
case of unaudited statements.
(ii) Since December 31, 1996, 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 5.4 or
otherwise), is reasonably likely to have a Material Adverse Effect with
respect to Wachovia.
(h) Litigation; Regulatory Action. (i) No litigation, claim or other
proceeding before any Governmental Authority is pending against Wachovia or
any of its Subsidiaries and, to the best of Wachovia's knowledge, no such
litigation, claim or other proceeding has been threatened.
(ii) Neither Wachovia 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, or extraordinary supervisory letter from a
Regulatory Authority, nor has Wachovia or any of its Subsidiaries been
advised by a Regulatory Authority that such agency is contemplating issuing
or requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of understanding,
commitment letter, supervisory letter or similar submission.
(i) Compliance with Laws. Wachovia and each of its Subsidiaries:
(i) in the conduct of its business, is in compliance 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; and
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(ii) has all permits, licenses, authorizations, orders and
approvals of, and has made all filings, applications and registrations
with, all Governmental 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.
(j) No Brokers. No action has been taken by Wachovia that would give
rise to any valid claim against any party hereto for a brokerage
commission, finder's fee or other like payment with respect to the
transactions contemplated by this Agreement.
(k) Tax Treatment. As of the date hereof, Wachovia has no reason to
believe that any conditions exist that might prevent or impede the Merger
from qualifying as a reorganization within the meaning of Section 368(a) of
the Code.
(l) Disclosure. The representations and warranties contained in this
Section 5.4 do not contain any untrue statement of a material fact or omit
to state any material fact necessary in order to make the statements and
information contained in this Section 5.4 not misleading.
(m) Transferability. The offer and sale of Wachovia Common Stock
constituting the Merger Consideration will either be registered under the
Securities Act pursuant to the Registration Statement or exempt from such
registration pursuant to the Exemption. If such Wachovia Common Stock is
offered and sold pursuant to the Exemption, it will be transferable under
applicable Federal securities laws as set forth in SEC Staff Legal Bulletin
#3 (CF) dated July 25, 1997.
ARTICLE 6.
Covenants
6.1. Reasonable Best Efforts. Subject to the terms and conditions of this
Agreement, each of Bancshares and Wachovia agrees to 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
practicable and otherwise to enable consummation of the transactions
contemplated hereby and shall cooperate fully with the other party hereto to
that end (it being understood that any amendments to the Registration Statement
or the Offering Circular or a resolicitation of proxies as a consequence of an
acquisition or other agreement involving Wachovia or any of its Subsidiaries
shall not violate this covenant).
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6.2. Stockholder Approvals. Bancshares agrees to take, in accordance with
applicable law and its articles of incorporation and by-laws, all action
necessary to convene an appropriate meeting of stockholders of Bancshares to
consider and vote upon the approval and adoption of this Agreement and any other
matters required to be approved by Bancshares's stockholders for consummation of
the Merger (including any adjournment or postponement, the "Bancshares Meeting")
as promptly as practicable after the Fairness Order is obtained or the
Registration Statement is declared effective. Except to the extent legally
required for the discharge by the Bancshares Board of its fiduciary duties as
advised in writing by its counsel, the Bancshares Board shall recommend such
approval, and Bancshares shall take all reasonable, lawful action to solicit
such approval by its stockholders. At the request of Wachovia, Bancshares will
utilize a professional proxy solicitation firm to assist it in procuring the
necessary stockholder vote.
6.3. Registration Statement/Exemption. (a) Wachovia, in Wachovia's sole
discretion, agrees to either (i) prepare a registration statement on Form S-4
(the "Registration Statement") to be filed by Wachovia with the SEC in
connection with the issuance of Wachovia Stock in the Merger (including the
proxy statement and prospectus and other proxy solicitation materials of
Bancshares constituting a part thereof (the "Proxy Statement") and all related
documents) or (ii) take such steps as are necessary to qualify the Wachovia
Stock to be issued in the Merger for an exemption (the "Exemption") from
registration with the SEC pursuant to Section 3(a)(10) of the Securities Act
including, without limitation, a determination by the Florida Comptroller of the
fairness of the Merger and the Bank Merger to the shareholders of Bancshares
(the "Fairness Order") and prepare an offering circular (including the Proxy
Statement (the "Offering Circular")) . Each of the parties hereto agrees to
cooperate, and to cause its Subsidiaries to cooperate, with the other, its
counsel and its accountants, in preparation of the Registration Statement, Proxy
Statement and Offering Circular and, if chosen by Wachovia, in the process of
obtaining the Fairness Order and the Exemption. If Wachovia elects to file a
Registration Statement, Wachovia agrees to file the Registration Statement with
the SEC as soon as reasonably practicable. Each of Bancshares and Wachovia and
their subsidiaries agrees to use all reasonable efforts to cause the Fairness
Order and Exemption to be obtained or the Registration Statement to be declared
effective under the Securities Act as promptly as reasonably practicable after
filing thereof. Wachovia 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. Bancshares agrees to
furnish to Wachovia all information concerning Bancshares, its Subsidiaries,
officers, directors and stockholders as may be reasonably requested in
connection with the foregoing.
(b) Each of Bancshares and Wachovia 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
Offering Circular and/or Proxy Statement and any amendment or supplement thereto
will, at the date of mailing to
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stockholders and at the time of the Bancshares Meeting, 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 or 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 Proxy Statement or any amendment or supplement thereto.
Each of Bancshares and Wachovia further agrees that if it shall become aware
prior to the Effective Date of any information furnished by it that would cause
any of the statements in the Offering Circular and/or Proxy Statement to be
false or misleading with respect to any material fact, or to omit to state any
material fact necessary to make the statements therein not false or misleading,
to promptly inform the other party thereof and to take the necessary steps to
correct the Proxy Statement.
(a) Wachovia agrees to advise Bancshares, promptly after Wachovia
receives notice thereof, of the time when the Fairness Order has been
obtained or 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 Wachovia Stock 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.
6.4. Press Releases. Each of Bancshares and Wachovia agrees that it will
not, without the prior approval of the other party, issue any press release or
written statement for general circulation relating to the transactions
contemplated hereby, except as otherwise required by applicable law or
regulation or NYSE rules.
6.5. Access; Information. (a) Each of Bancshares and Wachovia agrees that
upon reasonable notice and subject to applicable laws relating to the exchange
of information, it shall afford the other party and the other party's officers,
employees, counsel, accountants and other authorized representatives, such
access during normal business hours throughout the period prior to the Effective
Time to the books, records (including, without limitation, tax returns and work
papers of independent auditors), properties, personnel and to such other
information as any party may reasonably request and, during such period, it
shall furnish promptly to such other party (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.
(b) Each agrees that it will not, and will cause its representatives
not to, use any information obtained pursuant to this Section 6.5 (as well
as any other information obtained prior to the date hereof in connection
with the entering into of this Agreement) for any purpose unrelated to the
consummation of the transactions contemplated by this Agreement. Subject to
the requirements of law, each party will keep confidential, and will cause
its representatives to keep confidential, all information and documents
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obtained pursuant to this Section 6.5 (as well as any other information
obtained prior to the date hereof in connection with the entering into of
this Agreement) unless such information (i) was already known to such
party, (ii) becomes available to such party from other sources not known by
such party to be bound by a confidentiality obligation, (iii) is disclosed
with the prior written approval of the party to which such information
pertains or (iv) is or becomes readily ascertainable from published
information or trade sources. In the event that this Agreement is
terminated or the transactions contemplated by this Agreement shall
otherwise fail to be consummated, each party shall promptly cause all
copies of documents or extracts thereof containing information and data as
to another party hereto to be returned to the party which furnished the
same. No investigation by either party of the business and affairs of the
other shall affect or be deemed to modify or waive any representation,
warranty, covenant or agreement in this Agreement, or the conditions to
either party's obligation to consummate the transactions contemplated by
this Agreement.
6.6. Acquisition Proposals. Bancshares agrees that neither it nor any of
its Subsidiaries nor any of the respective officers and directors of Bancshares
or its Subsidiaries shall, and Bancshares shall direct and use its reasonable
best efforts to cause its employees, agents and representatives (including,
without limitation, any investment banker, attorney or accountant retained by it
or any of its Subsidiaries) not to, initiate, solicit or encourage, directly or
indirectly, any enquiries or the making of any proposal or offer (including,
without limitation, any proposal or offer to stockholders of Bancshares) with
respect to a merger, consolidation or similar transaction involving, or any
purchase of all or any significant portion of the assets or any equity
securities of, Bancshares or its Significant Subsidiary (any such proposal or
offer being hereinafter referred to as an "Acquisition Proposal") or, except to
the extent legally required for the discharge by the Bancshares Board of its
fiduciary duties as advised in writing by its counsel, engage in any
negotiations concerning, or provide any confidential information or data to, or
have any discussions with, any person relating to an Acquisition Proposal, or
otherwise facilitate any effort or attempt to implement an Acquisition Proposal.
Bancshares shall immediately cease and cause to be terminated any activities,
discussions or negotiations conducted prior to the date of this Agreement with
any parties other than Wachovia with respect to any of the foregoing and shall
use its reasonable best efforts to enforce any confidentiality or similar
agreement relating to an Acquisition Proposal. Bancshares shall promptly (within
24 hours) advise Wachovia following the receipt by Bancshares of any Acquisition
Proposal and the substance thereof (including the identity of the person making
such Acquisition Proposal), and advise Wachovia of any developments with respect
to such Acquisition Proposal immediately upon the occurrence thereof.
6.7. Affiliate Agreements. (a) Not later than the 15th day prior to the
mailing of the Proxy Statement, Bancshares shall deliver to Wachovia 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 Bancshares Meeting, deemed to be an "affiliate" of
Bancshares (each, an "Bancshares Affiliate") as that term is used in Rule 145
under the Securities Act or SEC Accounting Series Releases 130 and 135.
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(b) Bancshares shall use its reasonable best efforts to cause each
person who may be deemed to be an Bancshares Affiliate, to execute and
deliver to Wachovia on or before the date of mailing of the Proxy Statement
an agreement in form and substance reasonably satisfactory to Wachovia.
6.8. Takeover Laws. No party hereto shall take any action that would cause
the transactions contemplated by this Agreement, the Bank Merger Agreement or
the Stock Option Agreement 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
Agreement from, or if necessary challenge the validity or applicability of, any
applicable Takeover Law, as now or hereafter in effect.
6.9. Certain Policies. Prior to the Effective Date, Bancshares shall,
consistent with generally accepted accounting principles and on a basis mutually
satisfactory to it and Wachovia, modify and change its loan, litigation and real
estate valuation policies and practices (including loan classifications and
levels of reserves) so as to be applied on a basis that is consistent with those
of Wachovia; provided, however, that Bancshares shall not be obligated to book
any accruals earlier than 7 days prior to closing and take any other such action
pursuant to this Section 6.9 unless and until Wachovia acknowledges that all
conditions to its obligation to consummate the Merger have been satisfied. Prior
to the Effective Time all accruals for compensation and benefit plans will be
made in accordance with generally accepted accounting principles and the
retirement bonus to Xxxxxxx X. Xxxxxxxx will be paid. The July, 1998 portion of
the 25th Anniversary Bonus to be paid to employees and officers of Bancshares
who are employees or officers on the date of this Agreement will be paid by
Wachovia to the Bancshares employees or officers in July, 1998 if the employee
or officer is still employed by Wachovia at that time or at such earlier time as
the employment of that employee or officer is terminated by Wachovia, in which
event the December, 1997 and July, 1998 installments of the 25th Anniversary
Bonus will be credited against any severance benefits to which the employee or
officer might otherwise be entitled under Wachovia's policies.
6.10. NYSE Listing. Wachovia agrees to use its reasonable best efforts to
list, prior to the Effective Date, on the NYSE, subject to official notice of
issuance, the shares of Wachovia Common Stock to be issued to the holders of
Bancshares Common Stock in the Merger.
6.11. Regulatory Applications. (a) Wachovia and Bancshares and their
respective Subsidiaries shall cooperate and use their respective reasonable best
efforts to prepare all documentation, to effect all filings and to obtain all
permits, consents, approvals and authorizations of all third parties and
Governmental Authorities necessary to consummate the transactions contemplated
by this Agreement. Each of Wachovia and Bancshares 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
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written information submitted to any third party or any Governmental Authority
in connection with the transactions contemplated by this Agreement. 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 Governmental Authorities necessary or advisable to consummate the
transactions contemplated by this Agreement and each party will keep the other
party appraised of the status of material matters relating to completion of the
transactions contemplated hereby.
(b) Each party agrees, upon request, to furnish the other party 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 third party
or Governmental Authority.
6.12. Indemnification. (a) Following the Effective Date and for a period of
six years thereafter, Wachovia shall indemnify, defend and hold harmless the
present directors and officers of Bancshares 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 and advance legal expenses incurred by an
Indemnified Party 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 Agreement)
to the fullest extent that Bancshares is permitted to indemnify (and advance
expenses to) its directors and officers under the laws of the State of Florida,
the Bancshares Certificate and the Bancshares By-Laws as in effect on the date
hereof; 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 Florida law, the Bancshares Certificate and the Bancshares By-Laws shall
be made by independent counsel (which shall not be counsel that provides
material services to Wachovia) selected by Wachovia and reasonably acceptable to
such officer or director; and provided, further, that in the absence of
applicable 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 Wachovia shall have the burden to demonstrate that such
officer's or director's conduct failed to comply with such standard.
(b) For a period of three years from the Effective Time, Wachovia
shall use its reasonable best efforts to provide that portion of director's
and officer's liability insurance that serves to reimburse the present and
former officers and directors of Bancshares or any of its Subsidiaries
(determined as of the Effective Time) (as opposed to Bancshares) with
respect to claims against such directors and officers arising from facts or
events which occurred before the Effective Time, which insurance shall
contain at least the same coverage and amounts, and contain terms and
conditions no less advantageous, as that coverage currently provided by
Bancshares; provided, however, that
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in no event shall Wachovia be required to expend for coverage for the
entire three year period more than 300 percent of the current amount
expended by Bancshares per year (the "Insurance Amount") to maintain or
procure such directors and officers insurance coverage; provided, further,
that if Wachovia is unable to maintain or obtain the insurance called for
by this Section 6.12(b), Wachovia shall use its reasonable best efforts to
obtain as much comparable insurance as is available for the Insurance
Amount; provided, further, that officers and directors of Bancshares or any
Subsidiary may be required to make application and provide customary
representations and warranties to Wachovia's insurance carrier for the
purpose of obtaining such insurance.
(c) Any Indemnified Party wishing to claim indemnification under
Section 6.12(a), upon learning of any claim, action, suit, proceeding or
investigation described above, shall promptly notify Wachovia thereof;
provided that the failure so to notify shall not affect the obligations of
Wachovia under Section 6.12(a) unless and to the extent that Wachovia is
actually prejudiced as a result of such failure.
(d) If Wachovia 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
Wachovia shall assume the obligations set forth in this Section 6.12.
6.13. Benefit Plans. As soon as practicable following the Effective Time
(but, with respect to tax qualified employee pension plans within the meaning of
Section 3(2) of ERISA for which earlier participation is not possible under the
plan documents, in no event later than July 1, 1998 if the Effective Time occurs
prior to July 1, 1998) (i) Wachovia will provide employees of Bancshares who
become employees of Wachovia with employee benefit plans no less favorable in
the aggregate than those provided to similarly situated employees of Wachovia;
(ii) any such employees will receive credit for service with Bancshares or any
of its Subsidiaries or predecessors prior to the Effective Time for the purpose
of determining eligibility and vesting; (iii) Wachovia shall cause any and all
pre-existing condition limitations (to the extent such limitations do not apply
to a pre-existing condition under the Bancshares Compensation and Benefits
Plans) and eligibility waiting periods under group health plans to be waived
with respect to such participants and their eligible dependents; and (iv)
Wachovia shall extend its Retirement Medical Plan to employees of Bancshares who
become employees of Wachovia and retire following December 31, 1997 or the
Effective Date, if later; and would qualify for retirement under the Bancshares
Retirement Savings Plan and; provided, further, that a maximum of 20 years of
service with Bancshares shall be recognized for benefit accrual purposes under
the Retirement Medical Plan. All discretionary awards and benefits under any
employee benefit plans of Wachovia shall be subject to the discretion of the
persons or committee administering such plans. Wachovia shall honor, pursuant to
the terms of the Bancshares Compensation and Benefit Plans Previously Disclosed,
all employee benefit obligations to current and former employees of Bancshares
under such Plans.
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6.14. Accountants' Letters. Each of Bancshares and Wachovia shall use its
reasonable best efforts to cause to be delivered to the other party, and to
Wachovia's directors and officers who sign the Registration Statement, letters
of Xxxxx, Brackins, Koffler, CPA independent auditors for Bancshares and Ernst &
Young, LLP, independent auditors for Wachovia, 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.
6.15. Notification of Certain Matters. Each of Bancshares and Wachovia
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.
6.16. Dividend Coordination. If necessary to avoid missing a dividend
payment by Bancshares in accordance with its regular dividend payment schedule,
the Board of Directors of Bancshares may cause its regular quarterly dividend
record dates and payment dates for Bancshares Common Stock to be the same as
Wachovia's regular quarterly dividend record dates and payment dates for
Wachovia Common Stock, and Bancshares shall not thereafter change its regular
dividend payment dates and record dates.
6.17. Noncompetition Agreements. Simultaneously with the execution of this
Agreement, Bancshares shall cause each director and Officer of Bancshares, other
than Xxxxxx Xxxxxx during the period he is incapacitated, and its Significant
Subsidiary ranking above Senior Vice President on the date of this Agreement to
execute and deliver to Wachovia a noncompetition agreement in the form attached
hereto as Exhibit "E"
ARTICLE 7.
Conditions to Consummation of the Merger
7.1. Conditions to Each Party's Obligation to Effect the Merger. The
respective obligation of each of Wachovia and Bancshares to consummate the
Merger is subject to the fulfillment or written waiver by Wachovia and
Bancshares prior to the Effective Time of each of the following conditions:
(a) Stockholder Approval. This Agreement shall have been duly adopted
by the affirmative vote of the holders of a number of the outstanding
shares of Bancshares Common Stock entitled to vote thereon in accordance
with Section 607.1103 of the
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FBCA, other applicable law and the Bancshares Certificate and the
Bancshares By-Laws sufficient to approve the plan of merger and the Merger.
(b) Regulatory Approvals. All regulatory approvals required to
consummate the transactions contemplated hereby, including, without
limitation, the Bank Merger, shall have been obtained and shall remain in
full force and effect and all statutory waiting periods in respect thereof
shall have expired and no such approvals shall contain any conditions,
restrictions or requirements which the Wachovia Board reasonably determines
in good faith would (i) following the Effective Time, have a Material
Adverse Effect on the Surviving Corporation and its Subsidiaries taken as a
whole or (ii) reduce the benefits of the transactions contemplated hereby
to such a degree that Wachovia would not have entered into this Agreement
had such conditions, restrictions or requirements been known at the date
hereof.
(c) No Injunction. No Governmental Authority of competent jurisdiction
shall have enacted, issued, promulgated, enforced or entered any statute,
rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and prohibits
consummation of the transactions contemplated by this Agreement.
(d) Registration Statement/Exemption. The Fairness Order has been
entered or the Registration Statement shall have become effective under the
Securities Act 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.
(e) Blue Sky Approvals. All permits and other authorizations under
state securities laws necessary to consummate the transactions contemplated
hereby and to issue the shares of Wachovia Common Stock to be issued in the
Merger shall have been received and be in full force and effect.
(f) Listing. The shares of Wachovia Common Stock to be issued in the
Merger shall have been approved for listing on the NYSE, subject to
official notice of issuance.
7.2. Conditions to Obligation of Bancshares. The obligation of Bancshares
to consummate the Merger is also subject to the fulfillment or written waiver by
Bancshares prior to the Effective Time of each of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Wachovia set forth in this Agreement shall be true and correct as of the
date of this, after giving effect to Sections 5.1 and 5.2, Agreement and as
of the Effective Date as though made on and as of the Effective Date
(except that representations and warranties that by
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their terms speak as of the date of this Agreement or some other date shall
be true and correct as of such date), and Bancshares shall have received a
certificate, dated the Effective Date, signed on behalf of Wachovia by the
Chief Executive Officer and the Chief Financial Officer of Wachovia to such
effect.
(b) Performance of Obligations of Wachovia. Wachovia shall have
performed in all material respects all obligations required to be performed
by them under this Agreement at or prior to the Effective Time, and
Bancshares shall have received a certificate, dated the Effective Date,
signed on behalf of Wachovia by the Chief Executive Officer and the Chief
Financial Officer of Wachovia to such effect.
(c) Opinion of Bancshares's Counsel. Bancshares shall have received an
opinion of Luse, Lehman, Xxxxxx, Xxxxxxxx & Xxxxxx, counsel to Bancshares,
to the effect that, on the basis of facts, representations and assumptions
set forth in such opinion, (i) the Merger constitutes a "reorganization"
within the meaning of Section 368 of the Code and (ii) no gain or loss will
be recognized by stockholders of Bancshares who receive shares of Wachovia
Common Stock in exchange for shares of Bancshares Common Stock, except that
gain or loss may be recognized as to cash received in lieu of fractional
share interests. In rendering its opinion, Luse, Lehman, Xxxxxx, Xxxxxxxx &
Xxxxxx may require and rely upon representations contained in letters from
Bancshares and others.
(d) Accountants' Letters. Bancshares shall have received the letters
referred to in Section 6.14 from Ernst & Young, LLP, Wachovia's independent
auditors.
7.3. Conditions to Obligation of Wachovia. The obligation of Wachovia to
consummate the Merger is also subject to the fulfillment or written waiver by
Wachovia prior to the Effective Time of each of the following conditions:
(a) Representations and Warranties. The representations and warranties
of Bancshares set forth in this Agreement, after giving effect to Sections
5.1 and 5.2, shall be true and correct as of the date of this Agreement and
as of the Effective Date as though made on and as of the Effective Date
(except that representations and warranties that by their terms speak as of
the date of this Agreement or some other date shall be true and correct as
of such date) and Wachovia shall have received a certificate, dated the
Effective Date, signed on behalf of Bancshares by the Chief Executive
Officer and the Chief Financial Officer of Bancshares to such effect.
(b) Performance of Obligations of Bancshares. Bancshares shall have
performed in all material respects all obligations required to be performed
by it under this Agreement at or prior to the Effective Time, and Wachovia
shall have received a certificate, dated the Effective Date, signed on
behalf of Bancshares by the Chief Executive Officer and the Chief Financial
Officer of Bancshares to such effect.
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(c) Opinion of Wachovia's Counsel. Wachovia shall have received an
opinion of Akerman, Senterfitt & Xxxxxx, P.A., special counsel to Wachovia,
dated the Effective Date, to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion, the Merger
constitutes a reorganization under Section 368 of the Code. In rendering
its opinion, Akerman, Senterfitt & Xxxxxx, P.A. may require and rely upon
representations contained in letters from Wachovia and others.
(d) Accountants' Letters. Wachovia and its directors and officers who
sign the Registration Statement shall have received the letters referred to
in Section 6.14 from Xxxxx, Brackins, Koffler, CPA, Bancshares's
independent auditors.
(e) Bank Merger. The Bank Merger may be effected and is expected to be
effected immediately following the Effective Time.
ARTICLE 8.
Termination
8.1. Termination. This Agreement may be terminated, and the Acquisition may
be abandoned:
(a) Mutual Consent. At any time prior to the Effective Time, by the
mutual consent of Wachovia and Bancshares, if the Board of Directors of
Bancshares so determines by vote of a majority of the members of its entire
Board and the Chief Executive Officer or the Chief Financial Officer of
Wachovia so determines.
(b) Breach. At any time prior to the Effective Time, by Wachovia if
its Chief Executive Officer or Chief Financial Officer so determines or
Bancshares, 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 set forth in Section 5.2), 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 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, provided that such breach (whether under
(i) or (ii)) would be reasonably likely, individually or in the aggregate
with other breaches, to result in a Material Adverse Effect.
(c) Delay. At any time prior to the Effective Time, by Wachovia if its
Chief Executive Officer or Chief Financial Officer so determines or
Bancshares, 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 September 30, 1998, except to the extent that the failure of
the Merger then to be consummated arises out of or results from the
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knowing action or inaction of the party seeking to terminate pursuant to
this Section 8.01(c).
(d) No Approval. By Bancshares if its Chief Executive Officer or Chief
Financial Officer so determines or Wachovia, 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 approval of any Governmental Authority required for
consummation of the Merger and the other transactions contemplated by this
Agreement shall have been denied by final nonappealable action of such
Governmental Authority or (ii) the stockholder approval required by Section
7.1(a) herein is not obtained at the Bancshares Meeting.
(e) Failure to Recommend, Etc. At any time prior to the Bancshares
Meeting, by Wachovia if its Chief Executive Officer or Chief Financial
Officer so determines if Bancshares Board shall have failed to make its
recommendation referred to in Section 6.2, withdrawn such recommendation or
modified or changed such recommendation in a manner adverse in any respect
to the interests of Wachovia.
8.2. Effect of Termination and Abandonment. In the event of termination of
this Agreement and the abandonment of the Acquisition pursuant to this Article
VIII, no party to this Agreement shall have any liability or further obligation
to any other party hereunder except (i) as set forth in Section 9.1 and (ii)
that termination will not relieve a breaching party from liability for any
willful breach of this Agreement giving rise to such termination.
ARTICLE 9.
Miscellaneous
9.1. Survival. No representations, warranties, agreements and covenants
contained in this Agreement shall survive the Effective Time (other than
Sections 5.4(m) and 6.12 and this Article IX which shall survive the Effective
Time) or the termination of this Agreement if this Agreement is terminated prior
to the Effective Time (other than Sections 6.3(b), 6.5(b), 8.2 and this Article
IX which shall survive such termination).
9.2. Waiver; Amendment. Prior to the Effective Time, any provision of this
Agreement may be (i) waived by the party benefited by the provision, or (ii)
amended or modified at any time, by an agreement in writing between the parties
hereto executed in the same manner as this Agreement, except that, after the
Bancshares Meeting, this Agreement may not be amended if it would violate the
FBCA.
9.3. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
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9.4. Governing Law. This Agreement shall be governed by, and interpreted in
accordance with, the laws of the State of North Carolina applicable to contracts
made and to be performed entirely within such State (except to the extent that
mandatory provisions of Federal law or of the FBCA are applicable).
9.5. Expenses. Each party hereto will bear all expenses incurred by it in
connection with this Agreement and the transactions contemplated hereby, except
that printing expenses shall be shared equally between Bancshares and Wachovia.
9.6. 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 Bancshares, to:
Ameribank Bancshares, Inc.
0000 Xxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxx, President
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Luse, Lehman, Xxxxxx, Xxxxxxxx & Xxxxxx
0000 Xxxxxxxxx Xxxxxx, X.X., Xxxxx 000
Xxxxxxxxxx, X.X. 00000
Attention: Xxxxxxx Xxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Wachovia, to:
Wachovia Corporation
000 Xxxxx Xxxx Xxxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Chairman of the Board
Telephone: (000) 000-0000
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Facsimile: (000) 000-0000
With a copy to:
Wachovia Corporation
000 Xxxxx Xxxx Xxxxxx
Xxxxxxx-Xxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxxxx X. XxXxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Akerman, Senterfitt & Xxxxxx, P.A.
Xxxxxxxx Point - East Tower
000 Xxxxx Xxxxxxx Xxxxx, Xxxxx 000
Xxxx Xxxx Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxx, Esquire
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
With a copy to:
Xxxxxxxx & Xxxxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx X. Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
9.7. Entire Understanding; No Third Party Beneficiaries. This Agreement and
the Stock Option Agreement entered into represent the entire understanding of
the parties hereto with reference to the transactions contemplated hereby and
thereby and this Agreement supersedes any and all other oral or written
agreements heretofore made (other than the Stock Option Agreement). Except for
Section 6.12, nothing in this Agreement 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 Agreement.
9.8. Interpretation; Effect. When a reference is made in this Agreement to
Sections, Exhibits or Schedules, such reference shall be to a Section of, or
Exhibit or Schedule to, this
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Agreement unless otherwise indicated. The table of contents and headings
contained in this Agreement are for reference purposes only and are not part of
this Agreement. Whenever the words "include," "includes" or "including" are used
in this Agreement, they shall be deemed to be followed by the words "without
limitation."
9.9. JURY TRIAL. THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE THE RIGHT ANY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
CLAIMS MADE BETWEEN THEM WHETHER NOW EXISTING OR ARISING IN THE FUTURE,
INCLUDING, WITHOUT LIMITATION, ANY AND ALL CLAIMS, DEFENSES, COUNTERCLAIMS,
THIRD PARTY CLAIMS AND INTERVENOR'S CLAIMS BASED HEREON OR ARISING OUT OF, UNDER
OR IN CONNECTION WITH THIS AGREEMENT, ANY DOCUMENTS EXECUTED PURSUANT TO THIS
AGREEMENT, OR ANY AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH,
OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF THE PARTIES HERETO IN CONJUNCTION THEREWITH.
* * *
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
AMERIBANK BANCSHARES, INC
By:______________________________________
Print Name:______________________________
Title:___________________________________
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XXXXXXXX XXXXXXXXXXX
By:______________________________________
Print Name:______________________________
Title:___________________________________
AMERICAN BANK OF HOLLYWOOD
By:______________________________________
Print Name:______________________________
Title:___________________________________
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