Exhibit 2.2
EXECUTION COPY
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
AMSOUTH BANCORPORATION
AND
REGIONS FINANCIAL CORPORATION
DATED AS OF MAY 24, 2006
TABLE OF CONTENTS
PAGE
Parties......................................................................1
RECITALS.....................................................................1
Article 1 THE MERGER......................................................1
1.1 Merger.........................................................1
1.2 Time and Place of Closing......................................1
1.3 Effective Time.................................................2
1.4 Conversion of AmSouth Common Stock.............................2
1.5 Effects on Common Stock........................................3
1.6 AmSouth Stock Options and Other Equity-Based Awards............3
Article 2 EXCHANGE OF SHARES..............................................6
2.1 Exchange Procedures............................................6
2.2 Rights of Holders..............................................7
Article 3 REPRESENTATIONS AND WARRANTIES..................................8
3.1 Disclosure Letters.............................................8
3.2 Standards......................................................8
3.3 Representations and Warranties of the Parties..................9
Article 4 COVENANTS AND ADDITIONAL AGREEMENTS............................21
4.1 Conduct of Business Prior to Effective Time...................21
4.2 Forbearances..................................................21
4.3 Dividends.....................................................23
4.4 Reasonable Best Efforts.......................................23
4.5 Shareholders' and Stockholders' Approvals.....................24
4.6 Registration Statement; Joint Proxy Statement/Prospectus......24
4.7 Applications and Consents.....................................25
4.8 Notification of Certain Matters...............................26
4.9 Investigation and Confidentiality.............................26
4.10 Press Releases; Publicity.....................................27
4.11 Acquisition Proposals.........................................27
4.12 Takeover Laws; No Rights Triggered............................28
4.13 Exemption from Liability Under Section 16(b)..................28
4.14 Agreement of Affiliates.......................................29
4.15 Employee Benefits and Contracts...............................29
4.16 Indemnification...............................................30
4.17 Corporate Governance..........................................31
4.18 Change of Method..............................................33
4.19 Restructuring Efforts.........................................34
Article 5 CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE..............34
5.1 Conditions to Obligations of Each Party.......................34
-i-
5.2 Conditions to Obligations of Regions..........................34
5.3 Conditions to Obligations of AmSouth..........................35
Article 6 TERMINATION....................................................36
6.1 Termination...................................................36
6.2 Effect of Termination.........................................37
Article 7 MISCELLANEOUS..................................................37
7.1 Definitions...................................................37
7.2 Non-Survival of Representations and Covenants.................45
7.3 Expenses......................................................46
7.4 Entire Agreement..............................................46
7.5 Amendments....................................................46
7.6 Waivers.......................................................46
7.7 Assignment....................................................47
7.8 Notices.......................................................47
7.9 Governing Law.................................................47
7.10 Counterparts..................................................48
7.11 Captions......................................................48
7.12 Interpretations...............................................48
7.13 Severability..................................................48
7.14 Waiver of Jury Trial..........................................48
-ii-
LIST OF EXHIBITS
EXHIBIT DESCRIPTION
1. Amendment to AmSouth Rights Plan (ss. 3.3(b)(iii))
2. Form of AmSouth Affiliate Letter (ss. 4.14)
3. Form of Regions Option Agreement
4. Form of AmSouth Option Agreement
-iii-
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "AGREEMENT") is made and entered
into as of May 24, 2006, by and between AMSOUTH BANCORPORATION, a Delaware
corporation ("AMSOUTH"), and REGIONS FINANCIAL CORPORATION, a Delaware
corporation ("REGIONS").
RECITALS
A. APPROVALS. The Boards of Directors of AmSouth and Regions have each
determined that the transactions described herein are consistent with, and will
further, their respective business strategies and goals, and are in the best
interests of AmSouth and Regions, respectively, and their respective
stockholders.
B. OPTION AGREEMENTS. As an inducement and condition to the entrance of
AmSouth into this Agreement, Regions is granting to AmSouth an option pursuant
to a stock option agreement in the form set forth in EXHIBIT 3 (the "REGIONS
OPTION AGREEMENT"). As an inducement and condition to the entrance of Regions
into this Agreement, AmSouth is granting to Regions an option pursuant to a
stock option agreement in the form set forth in EXHIBIT 4 (the "AMSOUTH OPTION
AGREEMENT" and, together with the Regions Option Agreement, the "OPTION
AGREEMENTS").
C. INTENTION OF THE PARTIES. It is the intention of the Parties that, for
federal income Tax purposes, the Merger shall qualify as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code and that this
Agreement shall constitute a "plan of reorganization" for purposes of Sections
354 and 361 of the Internal Revenue Code.
D. DEFINED TERMS. Certain capitalized terms used in this Agreement are
defined in 7.1 of this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual warranties,
representations, covenants, and agreements set forth herein, and intending to be
legally bound hereby, the Parties agree as follows:
ARTICLE 1
THE MERGER
1.1 MERGER. Subject to the terms and conditions of this Agreement, at the
Effective Time, AmSouth shall be merged with and into Regions in accordance with
the provisions of Section 251 of the DGCL (the "MERGER"). Regions shall be the
surviving corporation in the Merger (the "SURVIVING CORPORATION") and shall
continue to be governed by the Laws of the State of Delaware. Upon consummation
of the Merger, the separate corporate existence of AmSouth shall cease.
1.2 TIME AND PLACE OF CLOSING. The closing of the Merger (the "CLOSING")
shall take place at such time and place as Regions and AmSouth shall agree, on
the date when the Effective Time (as defined in Section 1.3) is to occur (the
"CLOSING DATE").
1.3 EFFECTIVE TIME. Subject to the terms and conditions of this Agreement,
on the Closing Date, the Parties will cause a certificate of merger to be filed
with the Secretary of State of the State of Delaware (the "DELAWARE SECRETARY")
as provided in Section 251 of the DGCL to effect the Merger. The Merger shall
take effect when such certificate of merger is filed, or at such other time as
may be specified therein (the "EFFECTIVE TIME"). Subject to the terms and
conditions hereof, unless otherwise mutually agreed upon by the duly authorized
officers of each Party, the Parties shall cause the Effective Time to occur on
the third business day following the date on which satisfaction or waiver of the
last of the conditions set forth in Article 5 has occurred (other than those
conditions that by their nature are to be satisfied at the Closing, but subject
to the fulfillment or waiver of those conditions), or such earlier date mutually
agreed upon by the Parties.
1.4 CONVERSION OF AMSOUTH COMMON STOCK. At the Effective Time, in each case
subject to Section 1.5, by virtue of the Merger and without any action on the
part of the Parties or the holder of any securities of the parties:
(a) Each share of AmSouth Common Stock (including the AmSouth
Stockholder Rights) that is Outstanding immediately prior to the Effective
Time (other than shares of AmSouth Common Stock held by either Party (in
each case other than in a fiduciary or agency capacity or on behalf of
third parties or as a result of debts previously contracted)) shall be
converted into 0.7974 fully paid and nonassessable shares of Regions Common
Stock (the "EXCHANGE RATIO").
(b) All shares of AmSouth Common Stock (including the AmSouth
Stockholder Rights) converted pursuant to this Section 1.4 shall no longer
be outstanding and shall automatically be cancelled and retired and shall
cease to exist as of the Effective Time, and each certificate previously
representing any such shares of AmSouth Common Stock (the "OLD AMSOUTH
CERTIFICATES") shall cease to represent any rights except the right to
receive with respect to each underlying share of AmSouth Common Stock (i) a
certificate representing the number of whole shares of Regions Common Stock
into which the shares of AmSouth Common Stock represented by such Old
AmSouth Certificate have been converted pursuant to this Section 1.4, (ii)
in accordance with Section 1.4(c), cash in lieu of fractional shares of
Regions Common Stock represented by such Old AmSouth Certificate which have
been converted pursuant to this Section 1.4; and (iii) any dividends or
distributions which the holder thereof has the right to receive pursuant to
Section 2.1(a).
(c) Notwithstanding any other provision of this Agreement, each
holder of shares of AmSouth Common Stock exchanged pursuant to the Merger
which would otherwise have been entitled to receive a fraction of a share
of Regions Common Stock (after taking into account all Old AmSouth
Certificates delivered by such holder) shall receive, in lieu thereof, cash
(without interest and rounded to the nearest cent) in an amount equal to
such fractional part of a share of Regions Common Stock multiplied by the
closing sale price of Regions Common Stock on the NYSE Composite
Transaction Tape on the trading day immediately preceding the Closing Date
as reported by THE WALL STREET JOURNAL or, if not reported therein, in
another authoritative source .
-2-
(d) If, following the date of this Agreement and prior to the
Effective Time, the outstanding shares of Regions Common Stock or AmSouth
Common Stock shall have been increased, decreased, changed into or
exchanged for a different number or kind of shares or securities as a
result of a reorganization, recapitalization, reclassification, stock
dividend, stock split, reverse stock split, or other similar change in
capitalization, then an appropriate and proportionate adjustment shall be
made to the number of shares of Regions Common Stock that each share of
AmSouth Common Stock shall represent the right to receive upon conversion.
1.5 EFFECTS ON COMMON STOCK.
(a) At and after the Effective Time, each share of Regions Common
Stock issued and outstanding immediately prior to the Effective Time shall
remain an issued and outstanding share of common stock of the Surviving
Corporation and shall not be affected by the Merger; provided that any shares of
Regions Common Stock held by AmSouth or its Subsidiaries prior to the Effective
Time (other than in a fiduciary or agency capacity or on behalf of third parties
or as a result of debts previously contracted) shall be cancelled and retired
and shall resume the status of authorized and unissued shares of Regions Common
Stock, and no shares of Regions Common Stock or other securities of Regions
shall be issued in respect thereof.
(b) Each of the shares of AmSouth Common Stock held by either Party
(in each case other than in a fiduciary or agency capacity or on behalf of third
parties as a result of debts previously contracted) shall be cancelled and
retired and shall cease to exist at the Effective Time and no consideration
shall be issued in exchange therefor.
1.6 AMSOUTH STOCK OPTIONS AND OTHER EQUITY-BASED AWARDS.
(a) Each option to purchase shares of AmSouth Common Stock (an
"AMSOUTH STOCK OPTION") granted under an equity or equity-based compensation
plan of AmSouth (an "AMSOUTH STOCK PLAN"), whether vested or unvested, that is
outstanding and unexercised immediately prior to the Effective Time shall cease,
at the Effective Time, to represent a right to acquire shares of AmSouth Common
Stock and shall be converted at the Effective Time, without any action on the
part of any holder of any AmSouth Stock Option, into an option to purchase a
share of Regions Common Stock (a "REGIONS STOCK OPTION") on the same terms and
conditions as were applicable under such AmSouth Stock Option (but taking into
account any changes thereto, including any acceleration thereof, provided for in
the relevant AmSouth Stock Plan, or in the related award document by reason of
the transactions contemplated hereby). The number of shares of Regions Common
Stock subject to each such Regions Stock Option shall be equal to the number of
shares of AmSouth Common Stock subject to each such AmSouth Stock Option
multiplied by the Exchange Ratio, rounded, if necessary, to the nearest whole
share of Regions Common Stock, and such Regions Stock Option shall have an
exercise price per share (rounded to the nearest cent) equal to the per share
exercise price specified in such AmSouth Stock Option divided by the Exchange
Ratio; provided that, in the case of any AmSouth Stock Option to which Section
421 of the Internal Revenue Code applies as of the Effective Time (after taking
into account the effect of any accelerated vesting thereof, if applicable) by
reason of its qualification under Section 422 or Section 423 of the Internal
-3-
Revenue Code, the exercise price, the number of shares of Regions Common Stock
subject to such option and the terms and conditions of exercise of such option
shall be determined in a manner consistent with the requirements of Section
424(a) of the Internal Revenue Code; provided, further, that, in the case of any
AmSouth Stock Option to which Section 409A of the Internal Revenue Code applies
as of the Effective Time, the exercise price, the number of shares of Regions
Common Stock subject to such option and the terms and conditions of exercise of
such option shall be determined in a manner consistent with the requirements of
Section 409A of the Internal Revenue Code.
(b) At the Effective Time, each Right consisting of, based on or
relating to shares of AmSouth Common Stock granted under an AmSouth Stock Plan,
other than AmSouth Stock Options (each, an "AMSOUTH STOCK-BASED AWARD"), whether
contingent or accrued, which is outstanding immediately prior to the Effective
Time shall cease, at the Effective Time, to represent a Right with respect to
shares of AmSouth Common Stock and shall be converted without any action on the
part of any holder of a Right, at the Effective Time, into a Right consisting
of, based on or relating to shares of Regions Common Stock granted under a
Regions Stock Plan, other than Regions Stock Options (each, a "REGIONS
STOCK-BASED AWARD"), on the same terms and conditions as were applicable under
the AmSouth Stock-Based Awards (but taking into account any changes thereto,
including any acceleration thereof, provided for in the relevant AmSouth Stock
Plan or in the related award document by reason of the transactions contemplated
hereby). The number of shares of Regions Common Stock subject to each such
Regions Stock-Based Award shall be equal to the number of shares of AmSouth
Common Stock subject to the AmSouth Stock-Based Award multiplied by the Exchange
Ratio, rounded, if necessary, to the nearest whole share of Regions Common Stock
and, if applicable, such Regions Stock-Based Award shall have an exercise price
per share (rounded to the nearest cent) equal to the per share exercise price
specified in the AmSouth Stock-Based Award divided by the Exchange Ratio. Any
dividend equivalents credited to the account of each holder of an AmSouth
Stock-Based Award as of the Effective Time shall remain credited to such
holder's account immediately following the Effective Time, subject to adjustment
in accordance with the foregoing.
(c) As soon as practicable after the Effective Time, Regions shall
deliver to the holders of AmSouth Stock Options and AmSouth Stock-Based Awards
any required notices setting forth such holders' rights pursuant to the relevant
AmSouth Stock Plans and award documents and stating that such AmSouth Stock
Options and AmSouth Stock-Based Awards have been assumed by Regions and shall
continue in effect on the same terms and conditions (subject to the adjustments
required by this Section 1.6 after giving effect to the Merger and the terms of
the relevant AmSouth Stock Plans).
(d) Following the Effective Time, Regions may maintain the AmSouth
Stock Plans for purposes of granting future awards in accordance with the NYSE
rules. If so, the provisions of the AmSouth Stock Plans, including the
respective terms of such plans, will be unchanged, except that (i) all Rights
issued by Regions pursuant to the AmSouth Stock Plans following the Effective
Time shall be Rights in respect of Regions Common Stock, (ii) all references to
AmSouth (other than any references relating to a "change in control" of AmSouth)
in each AmSouth Stock Plan and in each agreement evidencing any award thereunder
shall be
-4-
deemed to refer to Regions, unless Regions determines otherwise, and (iii) the
number of shares of Regions Common Stock available for future issuance pursuant
to each AmSouth Stock Plan following the Effective Time (the "AVAILABLE AMSOUTH
STOCK PLAN SHARES") shall be equal to the number of shares of AmSouth Common
Stock so available immediately prior to the Effective Time multiplied by the
Exchange Ratio, rounded, if necessary, down to the nearest whole share of
Regions Common Stock.
(e) Prior to the Effective Time, AmSouth shall take all necessary
action for the adjustment of AmSouth Stock Options and AmSouth Stock-Based
Awards under this Section 1.6. Regions shall reserve for future issuance a
number of shares of Regions Common Stock at least equal to the number of shares
of Regions Common Stock that will be subject to Regions Stock Options and
Regions Stock-Based Awards as a result of the actions contemplated by this
Section 1.6, plus the number of Available AmSouth Stock Plan Shares in the event
that Regions maintains the AmSouth Stock Plans as contemplated by this Section
1.6. As soon as practicable following the Effective Time, Regions shall file a
registration statement on Form S-8 or S-3, as the case dictates (or any
successor form, or if Form S-8 or S-3 is not available, other appropriate
forms), with respect to the shares of Regions Common Stock subject to such
Regions Stock Options and Regions Stock-Based Awards (and the Available AmSouth
Stock Plan Shares, as the case dictates) and shall maintain the effectiveness of
such registration statement or registration statements (and maintain the current
status of the prospectus or prospectuses contained therein) for so long as such
Regions Stock Options and Regions Stock-Based Awards remain outstanding.
(f) AmSouth shall take such action as is necessary to provide that as
of no later than three business days prior to the Closing Date no further shares
of AmSouth Common Stock will be purchased under the AmSouth Direct Stock
Purchase and Dividend Reinvestment Plan (the "AMSOUTH DRIP"); provided, that
such cessation of further purchases following the Closing Date shall be
conditioned upon the consummation of the Merger. Immediately prior to and
effective as of the Effective Time and subject to the consummation of the
Merger, AmSouth shall terminate the AmSouth DRIP.
1.7 CERTIFICATE OF INCORPORATION AND BYLAWS. At the Effective Time, (1) the
Regions Restated Certificate of Incorporation shall be the certificate of
incorporation of the Surviving Corporation until thereafter amended in
accordance with applicable law and (2) the Regions Bylaws, as amended in a
manner consistent with Section 4.17, shall be the bylaws of the Surviving
Corporation until thereafter amended in accordance with applicable law.
1.8 EFFECTS OF THE MERGER. At and after the Effective Time, the merger
shall have the effects set forth in Section 259 of the DGCL.
1.9 HEADQUARTERS. At the Effective Time, the location of the corporate
headquarters and of the principal executive offices of the Surviving Corporation
shall be the City of Birmingham in the State of Alabama, United States of
America.
-5-
ARTICLE 2
EXCHANGE OF SHARES
2.1 EXCHANGE PROCEDURES.
(a) At or prior to the Effective Time, Regions shall deposit, or shall
cause to be deposited, with the Exchange Agent, for the benefit of the holders
of Old AmSouth Certificates, for exchange in accordance with Article 1 and this
Article 2, certificates representing Regions Common Stock ("NEW CERTIFICATES")
(together with any dividends or distributions with respect thereto and any cash
to be paid hereunder in lieu of fractional shares of Regions Common Stock
(without any interest thereon), the "EXCHANGE FUND") to be paid pursuant to
Article 1 and this Article 2 in exchange for outstanding shares of AmSouth
Common Stock.
(b) As promptly as practicable after the Effective Time, Regions shall
send or cause to be sent to each former holder of record of shares of AmSouth
Common Stock immediately prior to the Effective Time (each, a "HOLDER"),
transmittal materials for use in exchanging such Holder's Old AmSouth
Certificates for the consideration set forth in Article 1 (which shall specify
that delivery shall be effected, and risk of loss and title to the certificates
theretofore representing such shares of AmSouth Common Stock shall pass, only
upon proper delivery of such certificates to the Exchange Agent). Regions shall
cause the New Certificates for shares of Regions Common Stock into which shares
of a Holder's AmSouth Common Stock are converted at the Effective Time or
dividends or distributions which such Person shall be entitled to receive and
any fractional share interests to be delivered to such Person upon delivery to
the Exchange Agent of Old AmSouth Certificates representing such shares of
AmSouth Common Stock, together with the transmittal materials, duly executed and
completed in accordance with the instructions thereto. No interest will accrue
or be paid on any such cash to be paid pursuant to Article 1 and this Article 2
upon such delivery. If any New Certificate is to be issued or any cash payment
is to be made in a name other than that in which the Old AmSouth Certificate
surrendered in exchange therefor is registered, it shall be a condition of such
exchange that the Person requesting such exchange shall pay any transfer or
other Taxes required by reason of the issuance of such New Certificate or the
making of such cash payment in a name other than that of the registered Holder
of the Old AmSouth Certificate surrendered, or shall establish to the
satisfaction of Regions and the Exchange Agent that any such Taxes have been
paid or are not applicable. Any Person who the Parties reasonably believe to be
an "affiliate" of AmSouth for purposes of Rule 145 of the 1933 Act shall not be
entitled to receive any New Certificate or payment pursuant to Article 1 or this
Article 2 until such Person shall have duly executed and delivered an
appropriate agreement as described in Section 4.14.
(c) Notwithstanding the foregoing, none of the Exchange Agent, any of
the Parties or any of their respective Subsidiaries shall be liable to any
former Holder for any amount properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar Laws.
(d) If any Old AmSouth Certificate shall have been lost, stolen or
destroyed, upon the making of an affidavit of that fact by the Person claiming
such Old AmSouth Certificate to be lost, stolen or destroyed and, if required by
Regions or the Exchange Agent, the
-6-
posting by such Person of a bond in such reasonable amount as Regions or the
Exchange Agent may direct as indemnity against any claim that may be made
against it with respect to such Old AmSouth Certificate, Regions or the Exchange
Agent shall, in exchange for the shares of AmSouth Common Stock represented by
such lost, stolen or destroyed Old AmSouth Certificate, issue or cause to be
issued a New Certificate and pay or cause to be paid the amounts, if any,
deliverable in respect to the shares of AmSouth Common Stock formerly
represented by such Old AmSouth Certificate pursuant to this Agreement.
(e) Any portion of the Exchange Fund that remains unclaimed by the
Holders of AmSouth Common Stock for six months after the Effective Time shall be
returned to Regions (together with any dividends or earnings in respect
thereof). Any Holders of AmSouth Common Stock who have not theretofore complied
with this Article 2 shall thereafter be entitled to look only to Regions, and
only as a general creditor thereof, for payment of the consideration deliverable
in respect of each share of AmSouth Common Stock such Holder holds as determined
pursuant to this Agreement, without any interest thereon.
(f) The Exchange Agent and Regions shall be entitled to deduct and
withhold from any cash in lieu of fractional shares of Regions Common Stock,
cash dividends or distributions payable pursuant to Section 2.1(a) and any other
cash amounts otherwise payable pursuant to this Agreement to any Holder such
amounts as the Exchange Agent or Regions, as the case may be, is required to
deduct and withhold under the Internal Revenue Code, or any provision of state,
local or foreign Tax law, with respect to the making of such payment. To the
extent the amounts are so withheld by the Exchange Agent or Regions, as the case
may be, such withheld amounts shall be treated for all purposes of this
Agreement as having been paid to the Holder in respect of whom such deduction
and withholding was made by the Exchange Agent or Regions, as the case may be.
2.2 RIGHTS OF HOLDERS. At the Effective Time, the stock transfer books of
AmSouth shall be closed and no transfer by any Holder shall thereafter be made
or recognized. Until surrendered for exchange in accordance with the provisions
of Section 2.1 and except as provided in this Section 2.2, each Old AmSouth
Certificate (other than shares to be cancelled pursuant to Section 2.1(b))
shall, from and after the Effective Time, represent for all purposes only the
right to receive the consideration provided in Section 1.4, as the case may be,
and any dividends or any other distributions with a record date prior to the
Effective Time which have been declared or made by AmSouth in respect of such
shares of AmSouth Common Stock in accordance with the terms of this Agreement
and which remain unpaid at the Effective Time. To the extent permitted by Law,
Holders shall be entitled to vote after the Effective Time at any meeting of
Regions stockholders the number of whole shares of Regions Common Stock into
which their respective shares of AmSouth Common Stock are converted, regardless
of whether such Holders have exchanged their certificates representing AmSouth
Common Stock for New Certificates representing Regions Common Stock in
accordance with the provisions of this Agreement, but beginning 60 days after
the Effective Time no such Holder shall be entitled to vote on any matter until
such Holder surrenders such Old AmSouth Certificate for exchange as provided in
Section 2.1. Whenever a dividend or other distribution is declared by Regions on
Regions Common Stock, the record date for which is at or after the Effective
Time, the declaration shall include dividends or other distributions on all
shares of Regions Common Stock
-7-
issuable pursuant to this Agreement, but beginning 60 days after the Effective
Time no dividend or other distribution payable to the holders of record of
Regions Common Stock as of any time subsequent to the Effective Time shall be
delivered to the Holder of an Old AmSouth Certificate until such Holder
surrenders such Old AmSouth Certificate for exchange as provided in Section 2.1.
However, upon surrender of the Old AmSouth Certificate, both the New
Certificate, together with all such undelivered dividends or other distributions
(without interest) and any undelivered cash payments to be paid for fractional
share interests (without interest), shall be delivered and paid with respect to
each share represented by such New Certificate.
ARTICLE 3
REPRESENTATIONS AND WARRANTIES
3.1 DISCLOSURE LETTERS. Prior to the execution and delivery of this
Agreement, each Party has delivered to the other Party a letter (its "DISCLOSURE
LETTER") 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 of such
Party's representations or warranties contained in Section 3.3 or to one or more
of its covenants contained in Article 4; provided, that (i) no such item is
required to be set forth in a Party's Disclosure Letter as an exception to any
representation or warranty of such Party if its absence would not result in the
related representation or warranty being deemed untrue or incorrect under the
standard established by Section 3.2, and (ii) the mere inclusion of an item in a
Party's Disclosure Letter as an exception to a representation or warranty shall
not be deemed an admission by that 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 with respect to such Party. Any
disclosures made with respect to a subsection of Section 3.3 shall be deemed to
qualify (a) any subsections of Section 3.3 specifically referenced or
cross-referenced and (b) other subsections of Section 3.3 to the extent it is
clear (notwithstanding the absence of a specific cross reference) from a reading
of the disclosure that such disclosure (i) applies to such other subsections and
(ii) contains sufficient detail to enable a reasonable Person to recognize the
relevance of such disclosure to such other subsections.
3.2 STANDARDS.
(a) No representation or warranty of any Party hereto contained in
Section 3.3 (other than the representations and warranties in (i) Sections
3.3(b)(i), 3.3(c)(i) and (ii), and 3.3(r) which shall be true and correct in all
material respects with respect to it, and (ii) Sections 3.3(b)(ii)(A) and
3.3(e)(ii) which shall be true and correct in all respects) shall be deemed
untrue or incorrect, and no Party hereto shall be deemed to have breached a
representation or warranty, as a consequence of the existence or absence of any
fact, circumstance or event unless such fact, circumstance or event,
individually or taken together with all other facts, circumstances or events
inconsistent with any representation or warranty contained in Section 3.3, has
had or is reasonably likely to have a Material Adverse Effect on such Party.
(b) The term "MATERIAL ADVERSE EFFECT," as used with respect to a
Party, means an effect which (i) is materially adverse to the business,
properties, financial condition or results of operations of such Party and its
Subsidiaries, taken as a whole, or (ii) materially
-8-
impairs the ability of such Party to consummate the Merger and the transactions
contemplated hereby on a timely basis; provided that, in determining whether a
Material Adverse Effect has occurred, there shall be excluded any effect to the
extent attributable to or resulting from (A) any changes in Laws, regulations or
interpretations of Laws or regulations generally affecting the banking, bank
holding company or financial holding company businesses, (B) any change in GAAP
or regulatory accounting requirements, generally affecting the banking, bank
holding company or financial holding company businesses, (C) events, conditions
or trends in economic, business or financial conditions generally affecting the
banking, bank holding company or financial holding company businesses
specifically, (D) changes in national or international political or social
conditions including the engagement by the United States in hostilities, whether
or not pursuant to the declaration of a national emergency or war, or the
occurrence of any military or terrorist attack upon or within the United States,
or any of its territories, possessions or diplomatic or consular offices or upon
any military installation, equipment or personnel of the United States, or due
to natural disasters, (E) the effects of the actions expressly permitted or
required by this Agreement or that are taken with the prior informed written
consent of the other Party in contemplation of the transactions contemplated
hereby, and (F) the announcement of this Agreement and the transactions
contemplated hereby.
3.3 REPRESENTATIONS AND WARRANTIES OF THE PARTIES. Subject to and giving
effect to Sections 3.1 and 3.2 and except as set forth in the relevant
Disclosure Letter, Regions hereby represents and warrants to AmSouth and AmSouth
hereby represents and warrants to Regions, that:
(a) ORGANIZATION, STANDING, AND POWER; SUBSIDIARIES. It, and each of
its Subsidiaries, is duly organized, validly existing, and (to the extent
applicable) in good standing under the Laws of the jurisdiction in which it is
organized. It, and each of its Subsidiaries, has the requisite corporate power
and authority to own, lease, and operate its properties and assets and to carry
on its business as now conducted. It, and each of its Subsidiaries, is duly
qualified or licensed to do business and (to the extent applicable) in good
standing in the States of the United States and foreign jurisdictions where the
character of its assets or the nature or conduct of its business requires it to
be so qualified or licensed. It has made available to the other Party hereto a
complete and correct copy of its Organizational Documents, each as amended to
the date hereof and as in full force and effect as of the date hereof. A true
and complete list of its direct and indirect Subsidiaries as of the date hereof
is set forth in Section 3.3(a) of its Disclosure Letter.
(b) AUTHORITY; NO BREACH OF AGREEMENT.
(i) It has the corporate power and authority necessary to
execute, deliver, and perform its obligations under this Agreement and the
Option Agreements and to consummate the transactions contemplated hereby
and thereby. The execution, delivery, and performance of this Agreement and
the Option Agreements, and the consummation of the transactions
contemplated hereby and thereby, including the Merger, by it, have been
duly and validly authorized by all necessary corporate action (including
valid authorization and unanimous adoption of this Agreement and valid
authorization of the Option Agreements, in each case, by its duly
constituted Board of Directors), subject only to the receipt of
-9-
(A)in the case of AmSouth, the approval of this Agreement by the holders of
a majority of the Outstanding shares of AmSouth Common Stock (the "AMSOUTH
STOCKHOLDER APPROVAL"), and (B)in the case of Regions, approval of this
Agreement by the holders of a majority of the Outstanding shares of Regions
Common Stock (the "REGIONS STOCKHOLDER APPROVAL"). The amendment of the
Regions Bylaws as set forth in Section 4.17 has been duly and validly
authorized by all necessary corporate action (including valid authorization
and unanimous adoption of a resolution, not to be withdrawn, providing for
such Regions Bylaws amendment contingent on the Effective Time by Regions's
duly constituted Board of Directors). Subject to the AmSouth Stockholder
Approval in the case of AmSouth and the Regions Stockholder Approval in the
case of Regions and assuming due authorization, execution, and delivery of
this Agreement and the Option Agreements by the other Party, this Agreement
and the Option Agreements represent legal, valid, and binding obligations
of it, enforceable against it in accordance with their terms (except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship, moratorium, or
similar Laws affecting the enforcement of creditors' rights generally and
except that the availability of the equitable remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding may be brought). The Regions Common Stock to be
issued in the Merger, when issued, will be validly issued, fully paid and
nonassessable, and no current or past stockholder of Regions will have any
preemptive right or similar rights in respect thereof.
(ii) Neither the execution and delivery of this Agreement nor the
Option Agreements by it, nor the consummation by it of the transactions
contemplated hereby or thereby, nor compliance by it with any of the
provisions hereof or thereof, will (A)conflict with or result in a breach
or violation of any provision of its Organizational Documents, (B)
constitute or result in a Default under, or require any Consent pursuant
to, or result in the creation or acceleration of any Lien (with or without
the giving of notice, the lapse of time or both) on any material asset of
it or its Subsidiaries under, any Contract or Permit of it or its
Subsidiaries, or any change in the rights or obligations under any
Contract, or (C) subject to receipt of the Regulatory Consents and the
expiration of any waiting period required by Law, violate any Law, Order or
governmental license applicable to it or its Subsidiaries or any of their
respective material assets.
(iii) In the case of AmSouth only, it has taken all action
necessary or appropriate so that the entering into of this Agreement and
the AmSouth Option Agreement, and the consummation of the transactions
contemplated hereby and thereby (individually or in conjunction with any
other event), do not and will not result in the ability of any Person to
exercise any rights under the AmSouth Rights Plan or enable or require the
AmSouth Shareholder Rights to separate from the shares of AmSouth Common
Stock to which they are attached or to be triggered or become exercisable
or unredeemable. No "Separation Time" (as such term is defined in the
AmSouth Rights Plan) has occurred or will occur as a result of the
transactions contemplated hereby. AmSouth has duly adopted an amendment to
the AmSouth Rights Plan substantially in the form attached hereto as
Exhibit 1.
-10-
(iv) Other than in connection or compliance with the provisions
of the Securities Laws, and other than (A) the Regulatory Consents, (B)
notices to or filings with the Internal Revenue Service or the Pension
Benefit Guaranty Corporation (the "PBGC") or both with respect to any
Compensation and Benefit Plans, (C) the filing of the certificate of merger
described in Section 1.3 and (D) as set forth in Section 3.3(b)(iv) of its
Disclosure Letter, no notice to, application or filing with, or Consent of,
any Governmental Authority is necessary in connection with the execution,
delivery or performance of this Agreement or the Option Agreements and the
consummation by it of the Merger and the other transactions contemplated by
this Agreement or the Option Agreements.
(c) CAPITAL STOCK.
(i) In the case of AmSouth only, the authorized capital stock of
AmSouth consists of 750,000,000 shares of AmSouth Common Stock and
2,000,000 shares of AmSouth Preferred Stock, of which, as of the date of
this Agreement, (A)346,873,580 shares of AmSouth Common Stock were issued
and outstanding, (B) no shares of AmSouth Preferred Stock were issued and
outstanding, and not more than 382,873,580 shares of AmSouth Common Stock
and no shares of AmSouth Preferred Stock will be issued and outstanding
immediately prior to the Effective Time. As of the date of this Agreement,
no more than 36,000,000 shares of AmSouth Common Stock, in the aggregate,
were subject to (A) AmSouth Stock Options granted under AmSouth Stock Plans
(B) outstanding Rights under the AmSouth Stock Plans. As of the date of
this Agreement, no more than 69,027,842 shares of AmSouth Common Stock were
reserved for issuance pursuant to the AmSouth Option Agreement. Except as
set forth in this Section 3.3(c)(i), as contemplated by the AmSouth Rights
Plan or the AmSouth DRIP or as specifically set forth in Section 3.3(c)(i)
of AmSouth's Disclosure Letter (which shall set forth in detail (including
exercise prices) all outstanding (i) stock options, (ii) stock appreciation
rights and (iii) restricted stock and restricted stock units under AmSouth
Stock Plans), there are no shares of AmSouth Capital Stock or other equity
securities of AmSouth outstanding and no outstanding Rights relating to the
AmSouth Capital Stock, and no Person has any Contract or any right or
privilege (whether pre-emptive or contractual) capable of becoming a
Contract or Right for the purchase, subscription or issuance of any
securities of AmSouth. All of the Outstanding shares of AmSouth Capital
Stock are duly and validly authorized, issued and outstanding and are fully
paid and nonassessable. None of the outstanding shares of AmSouth Capital
Stock has been issued in violation of any preemptive or similar rights of
the current or past stockholders of AmSouth.
(ii) In the case of Regions only, the authorized capital stock of
Regions consists of 1,500,000,000 shares of Regions Common Stock and
10,000,000 shares of Regions Preferred Stock, of which, as of the date of
this Agreement, (A) 456,116,552 shares of Regions Common Stock were issued
and outstanding, and (B) no shares of Regions Preferred Stock were issued
and outstanding, and not more than 485,916,552 shares of Regions Common
Stock will be issued and outstanding immediately prior to the Effective
Time. As of the date of this Agreement, no more than 29,800,000 shares of
-11-
Regions Common Stock, in the aggregate, were subject to (A) Regions Stock
Options granted under the Regions Stock Plans and (B) outstanding Rights
under the Regions Stock Plans. As of the date of this Agreement, no more
than 90,767,194 shares of Regions Common Stock were reserved for issuance
pursuant to the Regions Option Agreement. Except as set forth in this
Section 3.3(c)(ii), as contemplated by the Equiserve Investment Plan for
Regions (the "REGIONS DRIP") or as specifically set forth in Section
3.3(c)(ii) of Regions's Disclosure Letter (which shall set forth in detail
(including exercise prices) all outstanding (i) stock options, (ii) stock
appreciation rights and (iii) restricted stock and restricted stock units
under Regions Stock Plans), there are no shares of Regions Capital Stock or
other equity securities of Regions outstanding and no outstanding Rights
relating to the Regions Capital Stock, and no Person has any Contract or
any right or privilege (whether pre-emptive or contractual) capable of
becoming a Contract or Right for the purchase, subscription or issuance of
any securities of Regions. All of the Outstanding shares of Regions Capital
Stock are duly and validly authorized, issued and outstanding and are fully
paid and nonassessable. None of the outstanding shares of Regions Capital
Stock has been issued in violation of any preemptive or similar rights of
the current or past stockholders of Regions.
(iii) All the outstanding shares of capital stock of each of its
Subsidiaries owned by it or a Subsidiary of it have been duly authorized
and validly issued and are fully paid and (except, with respect to bank
Subsidiaries, as provided under applicable state Law) nonassessable, and
are owned by it or a Subsidiary of it free and clear of all Liens or
Rights.
(d) SEC FILINGS; FINANCIAL STATEMENTS.
(i) Each Party has filed and made available to the other Party
all SEC Documents required to be filed by it with the SEC since December
31, 2002 (collectively, the "SEC REPORTS"). Its SEC Reports, including the
Financial Statements, exhibits and schedules contained therein, (A) at the
time filed, complied (and any SEC Reports filed after the date of this
Agreement will comply) in all material respects with the applicable
requirements of the Securities Laws, and (B) at the time they were filed
(or if amended or superseded by another SEC Report filed prior to the date
of this Agreement, then on the date of such filing), did not (and any SEC
Reports filed after the date of this Agreement will not) contain any untrue
statement of a material fact or omit to state a material fact required to
be stated in such SEC Reports or necessary in order to make the statements
made in such SEC Reports, in light of the circumstances under which they
were made, not misleading.
(ii) Each of its Financial Statements contained in its SEC
Reports (including any SEC Reports filed after the date of this Agreement)
complied (or, in the case of SEC Reports filed after the date of this
Agreement, will comply) in all material respects with the applicable
requirements of the Securities Laws with respect thereto, fairly presented
(or, in the case of SEC Reports filed after the date of this Agreement,
will fairly present) the consolidated financial position of it and its
Subsidiaries as at the respective dates and the consolidated results of its
operations and cash flows for the periods indicated, in each case in
accordance with GAAP consistently applied during the
-12-
periods indicated, except in each case as may be noted therein, and subject
to normal year-end audit adjustments and as permitted by Form 10-Q in the
case of unaudited Financial Statements.
(e) ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 2005,
except as disclosed in its SEC Reports filed prior to the date of this
Agreement, it and its Subsidiaries have conducted their respective businesses
only in the ordinary course of such businesses and there have been no events,
changes, developments or occurrences which have had, or are reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on it.
(f) TAX MATTERS. All Tax Returns required to be filed by or on behalf
of it or any of its Subsidiaries have been timely filed or requests for
extensions have been timely filed and any such extension has been granted and
has not expired, and all such filed returns are complete and accurate in all
material respects. It has made available to the other Party true and correct
copies of the United States federal income Tax Returns filed by it or its
Subsidiaries for the fiscal years ending on or after 2000, and all income Tax
Returns of it and its Subsidiaries have been examined by the Internal Revenue
Service and any applicable state and local Tax authorities for all years to and
including 2000. Except as disclosed in its SEC Reports filed prior to the date
of this Agreement, all Taxes attributable to it or any of its Subsidiaries that
are or were due or payable (without regard to whether such Taxes have been
assessed) have been paid in full or have been adequately provided for on its
consolidated balance sheet and consolidated statement of earnings or income in
accordance with GAAP. As of the date of this Agreement and except as disclosed
in its SEC Reports filed prior to the date of this Agreement, there is no
outstanding audit, examination, deficiency, refund or other Tax Litigation or
outstanding waiver or agreement extending the applicable statute of limitations
for the assessment or collection of any Taxes for any period with respect to any
Taxes of it or its Subsidiaries, and no such waiver or agreement has been
requested in writing. All Taxes due with respect to completed and settled
examinations or concluded Tax Litigation relating to it or any of its
Subsidiaries have been paid in full or have been recorded in accordance with
GAAP on its or its Subsidiaries' balance sheet and consolidated statement of
earnings or income. Neither it nor any of its Subsidiaries is a party to any Tax
sharing, indemnification or similar agreement or any agreement pursuant to which
it or any of its Subsidiaries has any obligation to any Person (other than it or
one of its Subsidiaries) with respect to Taxes. Neither it nor any of its
Subsidiaries has been a United States real property holding corporation within
the meaning of Section 897(c)(2) of the Internal Revenue Code during the
applicable period specified in Section 897(c)(1)(A)(ii) of the Internal Revenue
Code. The proper and accurate amounts have been withheld from all employees,
creditors, or third parties (and timely paid to the appropriate Governmental
Authority or set aside in an account for such purposes) for all periods through
the Effective Time in compliance with all Tax withholding provisions of
applicable federal, state, local and foreign Tax Laws (including income, social
security and employment Tax withholding for all types of compensation). Neither
it nor any of its Subsidiaries has been a party to any distribution occurring
during the last two years, or otherwise as part of a plan (or series of related
transactions) of which the Merger is a part, in which the parties to such
distribution treated the distribution as one to which
-13-
Section 355 of the Internal Revenue Code applied. Neither it nor any of its
Subsidiaries is a party to any "reportable transaction" or "listed transaction"
as defined in Treasury Regulation ss. 1.6011-4(b)(2). No Liens for Taxes exist
with respect to it or its Subsidiaries, except for statutory Liens for Taxes not
yet due and payable or that are being contested in good faith and reserved for
in accordance with GAAP.
(g) CERTAIN ACTIONS. Neither it nor any of its Subsidiaries or any
Affiliates thereof has taken or agreed to take any action, and it has no
knowledge of any fact or circumstance, that would or would reasonably be
expected to (i) prevent the Merger from qualifying as a reorganization within
the meaning of Section 368(a) of the Internal Revenue Code, or (ii) materially
impede or materially delay receipt of any Regulatory Consents. To its knowledge,
as of the date hereof, there exists no fact, circumstance, or reason that would
cause any Regulatory Consents not to be received in a timely manner.
(h) ENVIRONMENTAL MATTERS. Except as described in the Disclosure
Letter: (i) no Hazardous Material is contained in or has been used at or
released from its Facilities other than in compliance with, and as would not
reasonably be expected to result in liability under, any Environmental Laws;
(ii) all Hazardous Materials used by it or stored on its Properties have been
disposed of in accordance with, and as would not reasonably be expected to
result in liability under, any Environmental Laws; (iii) neither it nor any of
its Subsidiaries is potentially liable as a responsible party under any
Environmental Law, including the federal Comprehensive Environmental Response,
Compensation and Liability Act, as amended ("CERCLA"), or state analog statute,
arising out of events occurring prior to the Effective Time; (iv) there have not
been in the past, and are not now, any Hazardous Materials that have been
released on or under or are migrating to or from the Facilities or any Property;
(v) there have not been in the past, and are not now, any underground tanks or
physical structures or vessels holding Hazardous Materials at, on or under any
Property including treatment or storage tanks, sumps, lagoons, basins, or water,
gas or oil xxxxx; there are no polychlorinated biphenyls ("PCBS") deposited,
stored, disposed of or located on any Property or Facilities or any equipment on
any Property containing PCBs at levels in excess of levels permitted by law;
(vii) it and its Subsidiaries and Affiliates are not subject to any consent
orders, decrees, notices of violation, injunctions, directives or orders from
any Governmental Authority or any indemnity or other agreement with any third
party relating to obligations, costs or liabilities arising under any
Environmental Law; (viii) the Facilities and its and its Subsidiaries'
activities and operations have at all times complied with all Environmental
Laws; (ix) it and its Subsidiaries have received no notice of any noncompliance
with, or liability under, any Environmental Laws regarding the Facilities or any
Property or its past or present operations and (x) no claims, notices,
administrative actions, information requests or suits are pending or, to its
knowledge, threatened relating to any actual or potential violation, liability
or obligation by it or any of its Subsidiaries with respect to any Environmental
Laws.
(i) COMPLIANCE WITH PERMITS, LAWS AND ORDERS.
(i) It and each of its Subsidiaries has in effect all Permits and
has made all filings, applications, and registrations with Governmental
Authorities that are required for it to own, lease, or operate its material
assets and to carry on its business as
-14-
now conducted and there has occurred no Default under any Permit applicable
to its business or employees conducting its business.
(ii) Neither it nor any of its Subsidiaries is in Default under
any Laws or Orders applicable to it, its business or employees conducting
its business. Each of its Subsidiaries that is an insured depository
institution has a Community Reinvestment Act rating of "satisfactory" or
better.
(iii) Since January 1, 2003, neither it nor any of its
Subsidiaries has received any notification or communication from any
Governmental Authority, (A) asserting that it or any of its Subsidiaries is
in Default under any Permits, Laws or Orders, (B) threatening to revoke any
Permits, (C) requiring it or any of its Subsidiaries to enter into or
consent to the issuance of a cease and desist order, formal or written
agreement, directive, commitment, memorandum of understanding, board
resolution, or other formal or informal enforcement action of any kind, or
(D) threatening or contemplating revocation or limitation of, or which
would have the effect of revoking or limiting, Federal Deposit Insurance
Corporation ("FDIC") deposit insurance; neither it nor any of its
Subsidiaries has received any notice from a Governmental Authority that it
is considering issuing any of the foregoing.
(iv) There (A) is no unresolved violation, criticism, or
exception by any Governmental Authority with respect to any report or
statement relating to any examinations or inspections of it or any of its
Subsidiaries and (B) have been no formal or informal inquiries by, or
disagreements or disputes with, any Governmental Authority with respect to
its or any of its Subsidiaries' business, operations, policies or
procedures since January 1, 2003.
(v) There is no Order, circumstance or condition relevant or
applicable to it that would prevent, or is reasonably likely to prevent,
Regions from satisfying the criteria for "financial holding company" status
under the BHC Act after the Effective Time.
(vi) Neither it nor any of its Subsidiaries is in Default under
applicable consumer lending and compliance Laws, the Bank Secrecy Act, the
Patriot Act or any Order issued with respect to anti-money laundering by
the U.S. Department of the Treasury's Office of Foreign Assets Control.
(j) LABOR RELATIONS. Neither it nor any of its Subsidiaries is the
subject of any Litigation asserting that it or any of its Subsidiaries has
committed an unfair labor practice (within the meaning of the National Labor
Relations Act or comparable state Law) or seeking to compel it or any of its
Subsidiaries to bargain with any labor organization as to wages or conditions of
employment, nor is it or any of its Subsidiaries a party to or bound by any
collective bargaining agreement, Contract, or other agreement or understanding
with a labor union or labor organization, nor is there any strike or other labor
dispute involving it or any of its Subsidiaries pending or, to its knowledge,
threatened, nor, to its knowledge, is there any activity involving its or any of
its Subsidiaries' employees seeking to certify a collective bargaining unit or
engaging in any other organization activity.
-15-
(k) EMPLOYEE COMPENSATION AND BENEFIT PLANS.
(i) It has disclosed in Section 3.3(k) of its Disclosure Letter,
and has delivered or made available to the other Party prior to the date of
this Agreement correct and complete copies of, all of its Compensation and
Benefit Plans. Neither it nor any of its Subsidiaries has an "obligation to
contribute" (as defined in ERISA Section 4212) nor have they ever had an
obligation to contribute to a "multiemployer plan" (as defined in ERISA
Sections 4001(a)(3) and 3(37)(A)). Each "employee pension benefit plan," as
defined in Section 3(2) of ERISA, that was ever maintained by it or any of
its Subsidiaries and that was intended to qualify under Section 401(a) of
the Internal Revenue Code, is disclosed as such in Section 3.3(k) of its
Disclosure Letter.
(ii) It has delivered or made available to the other Party prior
to the date of this Agreement correct and complete copies of the following
applicable documents: (A) all trust agreements or other funding
arrangements for its Compensation and Benefit Plans (including insurance
Contracts), and all amendments thereto (all such trust agreements and other
funding arrangements are disclosed in Section 3.3(k) of its Disclosure
Letter), (B) with respect to any such Compensation and Benefit Plans or
amendments, the most recent determination letters, and all material
rulings, material opinion letters, material information letters, or
material advisory opinions issued by the Internal Revenue Service, the
United States Department of Labor, or the PBGC after December 31, 1994, (C)
annual reports or returns, audited or unaudited financial statements,
actuarial valuations and reports, and summary annual reports prepared for
any Compensation and Benefit Plans with respect to the most recent plan
year, and (D) the most recent summary plan descriptions and any material
modifications thereto.
(iii) All of its Compensation and Benefit Plans are in compliance
with the applicable terms of ERISA, the Internal Revenue Code, and any
other applicable Laws. Except as disclosed in Section 3.3(k) of its
Disclosure Letter, each of its ERISA Plans which is intended to be
qualified under Section 401(a) of the Internal Revenue Code has received a
favorable determination letter from the Internal Revenue Service covering
all Tax Law changes prior to the Economic Growth and Tax Relief
Reconciliation Act of 2001 and, to its knowledge, there are no
circumstances likely to result in revocation of any such favorable
determination letter. Except as disclosed in Section 3.3(k) of its
Disclosure Letter, each trust created under any of its ERISA Plans has been
determined to be exempt from Tax under Section 501(a) of the Internal
Revenue Code and it is not aware of any circumstance which will or could
reasonably result in revocation of such exemption. Any voluntary employees'
beneficiary association within the meaning of Section 501(c)(9) of the
Internal Revenue Code which provides benefits under a Compensation and
Benefit Plan has (i) received an opinion letter from the Internal Revenue
Service recognizing its exempt status under Section 501(c)(9) of the
Internal Revenue Code and (ii) filed a timely notice with the Internal
Revenue Service pursuant to Section 505(c) of the Internal Revenue Code,
and it is not aware of circumstances likely to result in the loss of such
exempt status under Section 501(c)(9) of the Internal Revenue Code. There
is no pending or, to its knowledge, threatened Litigation relating to any
of its ERISA Plans.
-16-
(iv) Neither it nor any of its Subsidiaries has engaged in a
transaction with respect to any of its Compensation and Benefit Plans that,
assuming the Taxable Period of such transaction expired as of the date of
this Agreement or the Effective Time, would subject it or any of its
Subsidiaries to a Tax or penalty imposed by either Section 4975 of the
Internal Revenue Code or Section 502(i) of ERISA.
(v) Except as disclosed in Section 3.3(k) of its Disclosure
Letter, each of its Pension Plans had, as of the date of its most recent
actuarial valuation, assets measured at fair market value at least equal to
its "current liability," as that term is defined in Section 302(d)(7) of
ERISA. To its knowledge, since the date of the most recent actuarial
valuation, no event has occurred which would adversely change any such
funded status. None of its Pension Plans nor any "single-employer plan,"
within the meaning of Section 4001(a)(15) of ERISA, currently maintained by
it or any of its Subsidiaries, or the single-employer plan of any entity
which is considered one employer with it under Section 4001 of ERISA or
Section 414 of the Internal Revenue Code (an "ERISA AFFILIATE") has an
"accumulated funding deficiency" within the meaning of Section 412 of the
Internal Revenue Code or Section 302 of ERISA (whether or not waived). All
required contributions with respect to any of its Pension Plans or any
single-employer plan of any of its ERISA Affiliates have been timely made
and there is no lien, nor is there expected to be a lien, under Internal
Revenue Code Section 412(n) or ERISA Section 302(f) or Tax under Internal
Revenue Code Section 4971. Neither it nor any of its Subsidiaries has
provided, or is required to provide, security to any of its Pension Plans
or to any single-employer plan of any of its ERISA Affiliates pursuant to
Section 401(a)(29) of the Internal Revenue Code.
(vi) No Liability under Title IV of ERISA has been or is expected
to be incurred by it or any of its Subsidiaries with respect to any defined
benefit plan currently or formerly maintained by any of them or by any of
its ERISA Affiliates that has not been satisfied in full (other than
Liability for PBGC premiums, which have been paid when due).
(vii) Except as disclosed in Section 3.3(k) of its Disclosure
Letter, neither it nor any of its Subsidiaries has any obligations for
retiree health and retiree life benefits under any of its Compensation and
Benefit Plans other than with respect to benefit coverage mandated by
applicable Law. It or its subsidiaries may amend or terminate any such plan
at any time without incurring any liability thereunder other than in
respect of claims incurred prior to such amendment or termination.
(viii) There has been no amendment to, announcement by it or any
of its Subsidiaries relating to, or change in employee participation or
coverage under, any Compensation and Benefit Plan which would increase the
expense of maintaining such plan above the level of the expense incurred
therefor for the most recent fiscal year. None of the execution and
delivery of this Agreement or the Option Agreements, the stockholder
approval of the transactions contemplated hereby or the consummation of the
transactions contemplated hereby or thereby (A) results in any payment or
increase in payment (including severance, golden parachute, or otherwise),
whether or not in conjunction with a termination of employment, becoming
due to any director or any
-17-
employee of it or any of its Subsidiaries from it or any of its
Subsidiaries under any of its Compensation and Benefit Plans or otherwise,
(B)increases any benefits otherwise payable under any of its Compensation
and Benefit Plans, (C) results in any acceleration of the time of payment
or vesting or result in any payment or funding (through a grantor trust or
otherwise) of any such payment or benefit, (D) limits or restrict the right
of it to merge, amend or terminate any of the Compensation and Benefit
Plans or (E) results in payments under any Compensation and Benefit Plans
which would not be deductible under Section 280G of the Internal Revenue
Code.
(l) MATERIAL CONTRACTS.
(i) Except for Contracts reflected as exhibits to its SEC Reports
filed prior to the date of this Agreement, as of the date of this
Agreement, neither it nor any of its Subsidiaries, nor any of their
respective assets, businesses, or operations, is a party to, or is bound or
affected by, or receives benefits under, (A) any Contract relating to the
borrowing of money by it or any of its Subsidiaries or the guarantee by it
or any of its Subsidiaries of any such obligation (other than Contracts
pertaining to fully-secured repurchase agreements, and trade payables, and
Contracts relating to borrowings or guarantees made in the ordinary course
of business), (B) any Contract containing covenants that limit the ability
of it or any of its Subsidiaries to compete in any line of business or with
any Person, or that involve any restriction of the geographic area in
which, or method by which, it or any of its Subsidiaries may carry on its
business (other than as may be required by Law or any Governmental
Authority), or any Contract that requires it or any of its Subsidiaries to
deal exclusively or on a "sole source" basis with another party to such
Contract with respect to the subject matter of such Contract, (C) any
Contract for, with respect to, or that contemplates, a possible merger,
consolidation, reorganization, recapitalization or other business
combination, or asset sale or sale of equity securities not in the ordinary
course of business consistent with past practice, with respect to it or any
of its Subsidiaries, (D) any other Contract or amendment thereto that would
be required to be filed as an exhibit to any SEC Report (as described in
Items 601(b)(4) and 601(b)(10) of Regulation S-K under the 0000 Xxx) that
has not been filed as an exhibit to or incorporated by reference in its SEC
Reports filed prior to the date of this Agreement or (E) any Contract that
involves expenditures or receipts of it or any of its Subsidiaries in
excess of $1,000,000 per year not entered into in the ordinary course of
business consistent with past practice. The Contracts of the type described
in the preceding sentence, whether or not in effect as of the date of this
Agreement, shall be deemed "Material Contracts" hereunder. With respect to
each of its Material Contracts (A) that is reflected as an exhibit to any
SEC Report, (B) would be required under Items 601(b)(4) and 601(b)(10) of
Regulation S-K under the 1933 Act to be filed as an exhibit to any of its
SEC Reports or (C) that is disclosed in its Disclosure Letter, or would be
required to be so disclosed if in effect on the date of this Agreement: (w)
each such Contract is in full force and effect; (x) neither it nor any of
its Subsidiaries is in Default thereunder; (y) neither it nor any of its
Subsidiaries has repudiated or waived any material provision of any such
Contract; and (z) no other party to any such Contract is, to its knowledge,
in Default in any material respect.
-18-
(ii) All interest rate swaps, caps, floors, option agreements,
futures and forward contracts, and other similar risk management
arrangements, whether entered into for its own account or for the account
of one or more of its Subsidiaries or their respective customers, were
entered into (A) in accordance with prudent business practices and all
applicable Laws and (B) with counterparties believed to be financially
responsible, and each of them is enforceable against it or its Subsidiaries
in accordance with its terms (except in all cases as such enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
receivership, conservatorship, moratorium, or similar Laws affecting the
enforcement of creditors' rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is
subject to the discretion of the court before which any proceeding may be
brought), and is in full force and effect. Neither it nor any of its
Subsidiaries, nor to its knowledge, any other party thereto, is in Default
of any of its obligations under any such agreement or arrangement. Its
Financial Statements disclose the value of such agreements and arrangements
on a xxxx-to-market basis in accordance with GAAP (including but not
limited to Financial Accounting Statement 133) and, since March 31, 2006,
there has not been a change in such value that, individually or in the
aggregate, has resulted in a Material Adverse Effect on it.
(m) LEGAL PROCEEDINGS. There is no Litigation pending or, to its
knowledge, threatened against it or any of its Subsidiaries, or against any
asset, interest, or right of any of them nor are there any Orders of any
Governmental Authority or arbitrators outstanding against it or any of its
Subsidiaries.
(n) REPORTS. Since January 1, 2003, or the date of organization if
later, it and each of its Subsidiaries has filed all reports and statements,
together with any amendments required to be made with respect thereto, that it
was required to file with any Governmental Authority and all other reports and
statements required to be filed by them since January 1, 2003, including any
report or statement required to be filed pursuant to any Law have been so filed,
and it and each of its Subsidiaries have paid all fees and assessments due and
payable in connection therewith.
(o) INTELLECTUAL PROPERTY.
(i) It and its Subsidiaries own, or are licensed or otherwise
possess sufficient legally enforceable rights to use, all Intellectual
Property (including the Technology Systems) that is used by it and its
Subsidiaries in their respective businesses as currently conducted. Neither
it nor any of its Subsidiaries has (A) licensed any Intellectual Property
owned by it or its Subsidiaries in source code form to any Person or (B)
entered into any exclusive agreements relating to Intellectual Property
owned by it or its Subsidiaries.
(ii) It and its Subsidiaries have not infringed or otherwise
violated the Intellectual Property rights of any third Person since January
1, 2003. There is no claim asserted, or to its knowledge threatened,
against it and its Subsidiaries or any indemnitee thereof concerning the
ownership, validity, registerability, enforceability, infringement, use or
licensed right to use any Intellectual Property.
-19-
(iii) No third Person has infringed, misappropriated or otherwise
violated it or its Subsidiaries' Intellectual Property rights since January
1, 2003. There are no claims asserted or threatened by it or its
Subsidiaries, or decided by them to be asserted or threatened, that (A) a
third Person infringed or otherwise violated any of their Intellectual
Property rights; or (B) a third Person's owned or claimed Intellectual
Property interferes with, infringes, dilutes or otherwise xxxxx any of
their Intellectual Property rights.
(iv) It and its Subsidiaries have taken reasonable measures to
protect the confidentiality of all Trade Secrets that are owned, used or
held by them.
(p) STATE TAKEOVER LAWS. It has taken all action required to be taken
by it in order to exempt this Agreement and the Option Agreements and the
transactions contemplated hereby and thereby from, and this Agreement and the
Option Agreements and the transactions contemplated hereby and thereby are
exempt from, the requirements of any "moratorium," "control share," "fair
price," "affiliate transaction," "anti-greenmail," "business combination" or
other antitakeover Laws of any jurisdiction, including but not limited to
Section 203 of the DGCL (collectively, "TAKEOVER LAWS"). It has taken all action
required to be taken by it in order to make this Agreement and the Option
Agreements and the transactions contemplated hereby and thereby comply with, and
this Agreement and the Option Agreements and the transactions contemplated
hereby and thereby do comply with, the requirements of any provisions of its
Organizational Documents concerning "business combination," "fair price,"
"voting requirement," "constituency requirement" or other related provisions,
including but not limited to (i) in the case of AmSouth, the provisions of
Section VIII of the AmSouth Restated Charter and (ii) in the case of Regions,
the provisions of Article Seventh of the Regions Restated Certificate of
Incorporation.
(q) BROKERS AND FINDERS. Except for Xxxxxxx, Xxxxx & Co. as to AmSouth
and Xxxxxxx, Xxxxx & Co., Inc. as to Regions (in each case pursuant to
engagement letters true and complete copies of which have been previously
provided to the other party), neither it nor any of its officers, directors,
employees, or Affiliates has employed any broker or finder or incurred any
Liability for any financial advisory fees, investment bankers' fees, brokerage
fees, commissions, or finders' fees in connection with this Agreement or the
transactions contemplated hereby.
(r) FAIRNESS OPINION. Prior to the execution of this Agreement,
AmSouth has received an opinion of Xxxxxxx, Sachs & Co. and Regions has received
an opinion of Xxxxxxx, Xxxxx & Co., Inc., each to the effect that as of the date
thereof and based upon and subject to the matters set forth therein, (i) in the
case of Regions, the Exchange Ratio is fair, from a financial point of view, to
Regions, and (ii) in the case of AmSouth, the Exchange Ratio is fair, from a
financial point of view, to the stockholders of AmSouth. Such opinions have not
been amended or rescinded as of the date of this Agreement.
(s) INSURANCE. It and its Subsidiaries are insured with reputable
insurers against such risks and in such amounts as its management reasonably has
determined to be prudent in accordance with industry practices.
-20-
ARTICLE 4
COVENANTS AND ADDITIONAL AGREEMENTS
4.1 CONDUCT OF BUSINESS PRIOR TO EFFECTIVE TIME. During the period from the
date of this Agreement through the Effective Time, except as set forth in its
Disclosure Letter, except as expressly contemplated or permitted by this
Agreement and except as Consented to in writing by the other Party (which
Consent shall not be unreasonably withheld or delayed), each of the Parties
shall, and shall cause each of their respective Subsidiaries to, (a) conduct its
business in the ordinary course, (b) use reasonable best efforts to maintain and
preserve intact its business organization, assets, employees and relationships
with customers, suppliers, employees and business associates, and (c) take no
action that would adversely affect or delay the ability of either Party to
obtain any Required Consents, to perform its covenants and agreements under this
Agreement, or to consummate the transactions contemplated hereby on a timely
basis.
4.2 FORBEARANCES. During the period from the date of this Agreement through
the Effective Time, except as set forth in its Disclosure Letter and except as
expressly contemplated or permitted by this Agreement, neither Party shall, and
neither Party shall permit any of its Subsidiaries to, without the prior written
Consent of the other Party (which Consent shall not be unreasonably withheld or
delayed):
(a) amend its Organizational Documents (except as provided
herein);
(b) except for Permitted Issuances and Permitted Repurchases and
except as provided in Section 4.3, (i) adjust, split, combine or reclassify
any capital stock, (ii) make, declare or pay any dividend, or make any
other distribution on, or directly or indirectly redeem, purchase or
otherwise acquire, any shares of its capital stock or any securities or
obligations convertible (whether currently convertible or convertible only
after the passage of time or the occurrence of certain events) into or
exchangeable for any shares of its capital stock, (iii) grant or issue any
Rights, (iv) issue any additional shares of capital stock, or (v) make any
change in any instrument or Contract governing the terms of any of its
securities;
(c) other than in the ordinary course of business or pursuant to
Contracts in force at the date of or permitted by this Agreement and other
than in satisfaction of debts previously contracted in good faith, make any
material investment in or acquisition of (either by purchase of stock or
securities, contributions to capital, property transfers, or purchase of
any property or assets) any other Person other than its wholly owned
Subsidiaries;
(d) enter into any new line of business, or change its lending,
investment, underwriting, risk and asset liability management and other
banking and operating policies that are material to it and its
Subsidiaries, taken as a whole, except as required by applicable Law or any
regulations or policies imposed on it by any Governmental Authority;
(e) sell, transfer, mortgage, encumber or otherwise dispose of
any part of its business or any of its properties or assets to any Person
other than a wholly owned
-21-
Subsidiary, or cancel, release or assign any indebtedness to any Person
other than a wholly owned Subsidiary or any claims against any Person other
than a Subsidiary, except in the ordinary course of business or pursuant to
Contracts in force as of the date of this Agreement and disclosed in
Section 4.2(e) of its Disclosure Letter or as may be required in connection
with complying with its respective obligations under Section 4.4;
(f) other than in the ordinary course of business: incur any
indebtedness for borrowed money; assume, guarantee, endorse or otherwise as
an accommodation become responsible for the obligations of any Person; or
make any loan or advance;
(g) other than in consultation with the other Party, restructure
or make any material change to its investment securities portfolio, its
derivatives portfolio or its interest rate exposure, through purchases,
sales or otherwise, or the manner in which the portfolio is classified or
reported, in any material respect;
(h) other than in the ordinary course of business, terminate or
waive, or knowingly fail to use reasonable best efforts to enforce, any
material provision of any Material Contract other than normal renewals of
Contracts without materially adverse changes, additions or deletions of
terms;
(i) other than as required by Compensation and Benefit Plans and
Contracts as in effect at the date of this Agreement or applicable law, (i)
increase in any manner the compensation or fringe benefits of any of its
officers, employees or directors other than with respect to employees who
are not directors or executive officers and then only in the ordinary
course of business consistent with past practice, (ii) pay any pension or
retirement allowance not required by any existing Compensation and Benefit
Plan or Contract to any such officers, employees or directors, (iii) become
a party to, amend or commit itself to any Compensation and Benefit Plan or
Contract (or any individual Contracts evidencing grants or awards
thereunder) or employment agreement with or for the benefit of any officer,
employee or director other than with respect to employees who are not
directors or executive officers and then only in the ordinary course of
business consistent with past practice, or (iv) accelerate the vesting of,
or the lapsing of restrictions with respect to, Rights pursuant to Regions
Stock Plans in the case of Regions, and Rights pursuant to AmSouth Stock
Plans in the case of AmSouth;
(j) settle any Litigation, except for any Litigation involving
solely money damages in an amount, individually or in the aggregate for all
such settlements, that is not material to such Party and its Subsidiaries,
taken as a whole, and that does not involve or create precedent for
Litigation that is reasonably likely to be material to it and its
Subsidiaries taken as a whole;
(k) implement or adopt any change in its Tax or financial
accounting principles, practices or methods, including reserving
methodologies, other than as may be required by GAAP, regulatory accounting
guidelines or applicable Law;
-22-
(l) file or amend any Tax Return except in the ordinary course of
business; settle or compromise any material Tax Liability; make, change or
revoke any material Tax election; agree to an extension of the statute of
limitations with respect to the assessment or collection of material Taxes;
or make or surrender any claim for a material refund of Taxes;
(m) knowingly take, or knowingly omit to take, any action that is
reasonably likely to result in any of the conditions to the Merger set
forth in Article 5 not being satisfied on a timely basis except as may be
required by applicable Law; provided, that nothing in this Section 4.2(m)
shall preclude any Party from exercising its respective rights under
Section 4.11;
(n) take any action that would reasonably be expected to prevent
the Merger from qualifying as a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code; or
(o) agree to take any of the actions prohibited to it by this
Section 4.2.
4.3 DIVIDENDS.
(a) Each Party agrees that, from and after the date of this Agreement
until the Effective Time, (i) AmSouth may (to the extent legally and
contractually permitted to do so), but shall not be obligated to, declare and
pay quarterly dividends on outstanding shares of AmSouth Common Stock at a rate
not to exceed $0.26 per share per quarter, (ii) Regions may (to the extent
legally and contractually permitted to do so), but shall not be obligated to,
declare and pay quarterly dividends on outstanding shares of Regions Common
Stock at a rate not to exceed $0.35 per share per quarter and (iii) its direct
and indirect Subsidiaries may (to the extent legally and contractually permitted
to do so), but shall not be obligated to, declare and pay dividends on their
capital stock in cash, stock or other property to the Parties or their wholly
owned Subsidiaries and to the holders of any trust preferred securities and of
any REIT preferred securities issued by Subsidiaries of the Parties.
(b) After the date of this Agreement, each Party shall coordinate with
the other with respect to the declaration of any dividends in respect of Regions
Common Stock and AmSouth Common Stock and the record dates and payment dates
relating thereto, it being the intention of the Parties that holders of AmSouth
Common Stock shall not receive two dividends, or fail to receive one dividend,
for any quarter with respect to their shares of AmSouth Common Stock and any
shares of Regions Common Stock any such holder receives in exchange therefor in
the Merger.
4.4 REASONABLE BEST EFFORTS.
(a) Subject to the terms and conditions of this Agreement, the Parties
will use their reasonable best efforts to take, or cause to be taken, in good
faith, all actions, and to do, or cause to be done, all things necessary, proper
or desirable, or advisable under applicable Laws, including using its reasonable
best efforts to lift or rescind any Order adversely affecting its ability to
consummate the transactions contemplated hereby on a timely basis and to cause
to be
-23-
satisfied the conditions in Article 5, to permit consummation of the Merger as
promptly as practicable and otherwise to enable consummation of the transactions
contemplated hereby, and each will cooperate fully with and furnish information
to, the other Party to that end; provided that nothing contained herein shall
preclude any Party from exercising its rights under this Agreement.
(b) AmSouth shall take all actions necessary or required to ensure
that the entering into of this Agreement or of the AmSouth Option Agreement, and
the consummation of the transactions contemplated hereby or thereby
(individually or in conjunction with any other event), do not and will not
result in (i) Regions or any Affiliate of Regions or any other Person becoming
an "Acquiring Person" for purposes of the AmSouth Rights Plan or the occurrence
of a "Separation Time" under the AmSouth Rights Plan or (ii) the ability of any
Person to exercise any AmSouth Shareholder Rights under the AmSouth Rights Plan
or enable or require the AmSouth Shareholder Rights to separate from the shares
of AmSouth Common Stock to which they are attached or to be triggered or become
exercisable, distributable or unredeemable.
(c) Each Party undertakes and agrees to use its reasonable best
efforts to cause the Merger to qualify for treatment as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue Code for federal
income Tax purposes.
4.5 STOCKHOLDERS' APPROVALS.
(a) Regions shall call a meeting of its stockholders to be held as
soon as reasonably practicable for the purpose of obtaining the Regions
Stockholder Approval and shall use its reasonable best efforts to cause such
meeting to occur as soon as reasonably practicable. The Board of Directors of
Regions shall use its reasonable best efforts to obtain the Regions Stockholder
Approval.
(b) AmSouth shall call a meeting of its stockholders to be held as
soon as reasonably practicable for the purpose of obtaining the AmSouth
Stockholder Approval and shall use its reasonable best efforts to cause such
meeting to occur as soon as reasonably practicable. The Board of Directors of
AmSouth shall use its reasonable best efforts to obtain the AmSouth Stockholder
Approval.
(c) Regions and AmSouth shall use their reasonable best efforts to
hold their respective stockholder meetings on the same day.
4.6 REGISTRATION STATEMENT; JOINT PROXY STATEMENT/PROSPECTUS; LISTING.
(a) Each Party agrees to cooperate with the other Party, and their
Representatives, in the preparation of the Registration Statement and the Joint
Proxy Statement/Prospectus. Neither the Joint Proxy Statement/Prospectus nor the
Registration Statement shall be filed, and, prior to the termination of this
Agreement, no amendment or supplement to the Joint Proxy Statement/Prospectus or
the Registration Statement shall be filed, by Regions or AmSouth without
consultation with the other Party and its counsel, except that the opinion of
Wachtell, Lipton, Xxxxx & Xxxx contemplated by Section 5.2(c) shall be filed
with the SEC by post-effective amendment to the Registration Statement. Regions
agrees to use all
-24-
reasonable efforts, in which AmSouth shall reasonably cooperate as necessary, to
cause the Registration Statement to be declared effective under the 1933 Act as
promptly as practicable after filing thereof. The Parties agree to use all
reasonable efforts to obtain all Consents required by the Securities Laws to
carry out the transactions contemplated by this Agreement, and each Party agrees
to furnish all information concerning it and the holders of its capital stock as
may be reasonably requested in connection with any such action.
(b) Each Party 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 and supplement thereto, if any, become
effective under the 1933 Act, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading, and (ii) the Joint Proxy
Statement/Prospectus and any amendment or supplement thereto, at the date of
mailing to stockholders and at the times of the meetings of Regions stockholders
and AmSouth stockholders, will contain an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements, in
light of the circumstances under which they were made, not misleading, or
necessary to correct any statement in any earlier statement in the Joint Proxy
Statement/Prospectus or any amendment or supplement thereto. Each Party further
agrees that if it shall become aware prior to the Effective Time of any
information furnished by it that would cause any of the statements in the Joint
Proxy Statement/Prospectus or the Registration 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 Joint Proxy Statement/Prospectus or the Registration Statement.
(c) Regions shall cause the shares of Regions Common Stock to be
issued in the Merger to be approved for listing on the NYSE, subject to official
notice of issuance, as promptly as practicable, and in any event before the
Effective Time.
4.7 APPLICATIONS AND CONSENTS.
(a) The Parties shall cooperate and use their reasonable best efforts
in seeking all Consents of Governmental Authorities and other Persons necessary
to consummate the transactions contemplated hereby as promptly as practicable.
(b) Without limiting the foregoing, the Parties shall cooperate with
the other and use their reasonable best efforts to promptly (i) file
applications and notices, as applicable, with the Board of Governors of the
Federal Reserve System under the BHC Act, as amended, and obtaining approval of
such applications and notices, (ii) file any required applications or notices
with any foreign or state banking, insurance or other Regulatory Authorities and
obtaining approval of such applications and notices, (iii) make any notices to
or filings with the Small Business Administration, (iv) make any notices or
filings under the HSR Act, and (v) make any filings with and obtaining any
Consents in connection with compliance with the applicable provisions of the
rules and regulations of any applicable industry self-regulatory organization,
including approvals from the NASD and any relevant state regulator in connection
-25-
with a change of control of the AmSouth broker-dealers, or that are required
under consumer finance, mortgage banking and other similar Laws (collectively,
the "REGULATORY CONSENTS").
(c) Each Party will promptly furnish to the other Party copies of
applications filed with all Governmental Authorities and copies of written
communications received by such Party from any Governmental Authorities with
respect to the transactions contemplated hereby. Each Party agrees that it will
consult with the other Party with respect to the obtaining of all Regulatory
Consents and other material Consents advisable to consummate the transactions
contemplated by this Agreement and each Party will keep the other Party apprised
of the status of material matters relating to completion of the transactions
contemplated hereby, and will use reasonable efforts to include representatives
of the other Party in any meetings or discussions with Governmental Authorities.
All documents that the Parties or their respective Subsidiaries are responsible
for filing with any Governmental Authority in connection with the transactions
contemplated hereby (including to obtain Regulatory Consents) will comply as to
form in all material respects with the provisions of applicable Law.
4.8 NOTIFICATION OF CERTAIN MATTERS. Each Party will give prompt notice to
the other Party (and subsequently keep the other Party informed on a current
basis) upon its becoming aware of the occurrence or existence of any fact, event
or circumstance that (a) is reasonably likely to result in any Material Adverse
Effect on it, or (b) would cause or constitute a material breach of any of its
representations, warranties, covenants, or agreements contained herein;
provided, that any failure to give notice in accordance with the foregoing with
respect to any breach shall not be deemed to constitute a violation of this
Section 4.8 or the failure of any condition set forth in Sections 5.2(b) or
5.3(b) to be satisfied, or otherwise constitute a breach of this Agreement by
the Party failing to give such notice, in each case unless the underlying breach
would independently result in a failure of the conditions set forth in Section
5.2(a), 5.2(b), 5.3(a) or 5.3(b), to be satisfied or give rise to such
termination right.
4.9 INVESTIGATION AND CONFIDENTIALITY.
(a) Each Party shall permit the other Party to make or cause to be
made such investigation of the business and Properties of it and its
Subsidiaries and of their respective financial and legal conditions as the other
Party reasonably requests; provided, that such investigation shall be reasonably
related to the transactions contemplated hereby and shall not interfere
unnecessarily with normal operations; and provided further, that neither Party
nor any of their respective Subsidiaries shall be required to provide access to
or to disclose information where such access or disclosure would jeopardize the
attorney-client or other privilege with respect to such information or
contravene any Law, Order, or Contract and the Parties will use their reasonable
efforts to make appropriate substitute disclosure arrangements, to the extent
practicable, in circumstances in which the restrictions of this proviso apply.
No investigation by a Party shall affect the representations and warranties of
the other Party.
(b) Each Party shall, and shall cause its Representatives to, maintain
the confidentiality of all confidential information or Evaluation Material
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions to the extent required by, and
in accordance with the Confidentiality Agreement, and shall not use such
information for any purpose except in furtherance of the transactions
contemplated by this
-26-
Agreement. If this Agreement is terminated prior to the Effective Time, each
Party shall promptly return or certify the destruction of all documents and
copies and extracts thereof, and all work papers containing confidential
information received from the other Party.
4.10 PRESS RELEASES; PUBLICITY. Prior to the Effective Time, the Parties
shall consult with each other as to the form and substance of any press release
or other public statement materially related to this Agreement and the
transactions contemplated hereby prior to issuing such press release or public
statement or making any other public disclosure related thereto (including any
broad-based employee communication that is reasonably likely to become the
subject of public disclosure); provided, that nothing in this Section 4.10 shall
be deemed to prohibit any Party from making any disclosure necessary in order to
satisfy such Party's disclosure obligations imposed by Law or the NYSE or any
other self-regulatory organization.
4.11 ACQUISITION PROPOSALS.
(a) Each Party agrees that it will not, and will cause its
Subsidiaries and its and its Subsidiaries' officers, directors, Representatives
and Affiliates not to, directly or indirectly, (i) initiate, solicit, encourage
or knowingly facilitate inquiries or proposals with respect to, (ii) engage or
participate in any negotiations concerning, or (iii) provide any confidential or
nonpublic information or data to, or have, or engage or participate in, any
discussions with, any Person relating to, any Acquisition Proposal; provided
that, in the event either Party receives an unsolicited bona fide written
Acquisition Proposal with respect to such Party, such Party may, and may permit
its Subsidiaries and its and its Subsidiaries' Representatives to, furnish or
cause to be furnished nonpublic information or data and participate in such
negotiations or discussions to the extent that the Board of Directors of such
Party concludes in good faith (after receiving the advice of its outside counsel
and its financial advisors) that failure to take such actions would result in a
violation of its fiduciary duties under applicable Law; provided further that,
prior to providing any nonpublic information permitted to be provided pursuant
to the foregoing proviso, it shall have entered into a confidentiality agreement
with such third party on terms no less favorable to it than those of the
Confidentiality Agreement. Each Party will immediately cease and cause to be
terminated any activities, discussions or negotiations conducted before the date
of this Agreement with any Persons other than AmSouth or Regions, as the case
dictates, with respect to any Acquisition Proposal. Each Party will promptly
(within one day) advise the other Party following receipt of any Acquisition
Proposal or any inquiry which could reasonably be expected to lead to an
Acquisition Proposal, and the substance thereof (including the identity of the
Person making such Acquisition Proposal), and will keep the other Party apprised
of any related developments, discussions and negotiations on a current basis.
Each of the Parties shall use its reasonable best efforts to enforce any
existing confidentiality or standstill agreements to which it or any of its
Subsidiaries is a party in accordance with the terms thereof.
(b) Nothing contained in this Agreement shall prevent a Party or its
Board of Directors from complying with Rule 14d-9 and Rule 14e-2 under the 1934
Act with respect to an Acquisition Proposal; provided, that such Rules will in
no way eliminate or modify the effect that any action pursuant to such Rules
would otherwise have under this Agreement.
-27-
4.12 TAKEOVER LAWS; NO RIGHTS TRIGGERED. If any Takeover Law may become, or
may purport to be, applicable to the transactions contemplated hereby or by the
Option Agreements, each Party and the members of their respective Boards of
Directors will grant such approvals and take such actions as are necessary
(other than any action requiring the approval of its stockholders (other than as
contemplated by Section 4.5)) so that the transactions contemplated by this
Agreement and by the Option Agreements may be consummated as promptly as
practicable on the terms contemplated hereby and thereby and otherwise act to
eliminate or minimize the effects of any Takeover Law on any of the transactions
contemplated by this Agreement or by the Option Agreements. AmSouth shall take
all action necessary to ensure that, so long as this Agreement shall not have
been terminated pursuant to the terms hereof, that no Person shall become able
to exercise any rights under the AmSouth Rights Plan or enable or require the
AmSouth Shareholder Rights to separate from the shares of AmSouth Common Stock
to which they are attached or to be triggered or become exercisable or
unredeemable as a result of entering into this Agreement or consummating the
transactions contemplated hereby. The Parties agree that none of AmSouth's
representations, warranties, covenants or agreements set forth in this Agreement
shall be deemed to be inaccurate, untrue or breached in any respect for any
purpose as a result of the redemption of the AmSouth Shareholder Rights with the
prior written consent of Regions.
4.13 EXEMPTION FROM LIABILITY UNDER SECTION 16(B). Regions and AmSouth
agree that, in order to most effectively compensate and retain AmSouth Insiders
(as defined below) in connection with the Merger, both prior to and after the
Effective Time, it is desirable that AmSouth Insiders not be subject to a risk
of liability under Section 16(b) of the 1934 Act to the fullest extent permitted
by applicable Law in connection with the conversion of shares of AmSouth Common
Stock into shares of Regions Common Stock in the Merger and the conversion of
AmSouth Stock Options and AmSouth Stock-Based Awards into Regions Stock Options
or Regions Stock-Based Awards in the Merger, and for that compensatory and
retentive purposes agree to the provisions of this Section 4.13. Assuming
AmSouth delivers to Regions in a reasonably timely fashion prior to the
Effective Time accurate information regarding those officers and directors of
AmSouth subject to the reporting requirements of Section 16(a) of the 1934 Act
(the "AMSOUTH INSIDERS"), the number of shares of AmSouth Common Stock to be
held by each such AmSouth Insider expected to be exchanged for Regions Common
Stock in the Merger, and the number and description of AmSouth Stock Options and
AmSouth Stock-Based Awards held by each such AmSouth Insider and expected to be
converted into Regions Stock Options or Regions Stock-Based Awards, the Board of
Directors of Regions, or a committee of non-employee directors thereof (as such
term is defined for purposes of Rule 16b-3(d) under the 1934 Act), shall
reasonably promptly thereafter, and in any event prior to the Effective Time,
adopt a resolution providing in substance that the receipt by the AmSouth
Insiders of Regions Common Stock in exchange for shares of AmSouth Common Stock,
and of Regions Stock Options upon conversion of AmSouth Stock Options, or
Regions Stock-Based Awards upon conversion of AmSouth Stock-Based Awards, in
each case pursuant to the transactions contemplated by this Agreement, are
approved by such Board of Directors or by such committee thereof, and are
intended to be exempt from Liability pursuant to Section 16(b) of the 1934 Act
to the fullest extent permitted by applicable Law.
-28-
4.14 AGREEMENT OF AFFILIATES. AmSouth shall use its reasonable efforts to
cause each Person whom it reasonably believes may be deemed an "affiliate" of
AmSouth, for purposes of Rule 145 under the 1933 Act, to deliver to Regions not
later than the Effective Time, a written agreement in substantially the form of
Exhibit 2.
4.15 EMPLOYEE BENEFITS AND CONTRACTS.
(a) Following the Effective Time, Regions at its election shall either
provide generally to officers and employees of AmSouth and its Subsidiaries, who
at or after the Effective Time become employees of Regions or its Subsidiaries
("AMSOUTH CONTINUING EMPLOYEES"), employee benefits under Compensation and
Benefit Plans maintained by Regions, on terms and conditions which are the same
as for similarly situated officers and employees of Regions and its
Subsidiaries, or (ii) maintain for the benefit of the AmSouth Continuing
Employees, the Compensation and Benefit Plans maintained by AmSouth immediately
prior to the Effective Time; provided that Regions may amend any Compensation
and Benefit Plan maintained by AmSouth immediately prior to the Effective Time
to comply with any Law or as necessary and appropriate for other business
reasons. For purposes of this Section 4.15, Compensation and Benefit Plans
maintained by Regions or AmSouth are deemed to include Compensation and Benefit
Plans maintained by their respective Subsidiaries. As soon as practicable
following the Effective Time, Regions and AmSouth shall cooperate in reviewing,
evaluating and analyzing the Regions Compensation and Benefit Plans and the
AmSouth Compensation and Benefit Plans with a view towards developing
appropriate and effective Compensation and Benefit Plans for employees of
Regions and AmSouth and their Subsidiaries after the Effective Time.
(b) For purposes of participation, vesting and benefit accrual (except
not for purposes of benefit accrual with respect to any plan in which such
credit would result in a duplication of benefits) under Regions's Compensation
and Benefit Plans, service with or credited by AmSouth or any of its
Subsidiaries shall be treated as service with Regions; provided that this
provision shall not cause Regions's tax-qualified defined benefit pension plan
(which is not open to new participants) to be opened to new participants. To the
extent permitted under applicable Law, Regions shall cause welfare Compensation
and Benefit Plans maintained by Regions that cover the AmSouth Continuing
Employees after the Effective Time to (i) waive any waiting period and
restrictions and limitations for preexisting conditions or insurability (except
for pre-existing conditions that were excluded, or restrictions or limitations
that were applicable, under welfare Compensation and Benefit Plans maintained by
AmSouth), and (ii) cause any deductible, co-insurance, or maximum out-of-pocket
payments made by the AmSouth Continuing Employees under welfare Compensation and
Benefit Plans maintained by AmSouth to be credited to such Continuing Employees
under welfare Compensation and Benefit Plans maintained by Regions, so as to
reduce the amount of any deductible, co-insurance, or maximum out-of-pocket
payments payable by such AmSouth Continuing Employees under welfare Compensation
and Benefit Plans maintained by Regions.
(c) Nothing in this Section 4.15 shall be interpreted as preventing
Regions, from and after the Effective Time, from amending, modifying or
terminating any Compensation and Benefit Plans maintained by Regions,
Compensation and Benefit Plans maintained by
-29-
AmSouth, or other Contracts, arrangements, commitments or understandings, in
accordance with their terms and applicable Law.
4.16 INDEMNIFICATION.
(a) From and after the Effective Time, in the event of any threatened
or actual claim, action, suit, proceeding, or investigation, whether civil,
criminal, or administrative, in which any Person who is now, or has been at any
time prior to the date of this Agreement, or who becomes prior to the Effective
Time, a director or officer of AmSouth or any of its Subsidiaries (the
"INDEMNIFIED PARTIES") is, or is threatened to be, made a party based in whole
or in part on, or arising in whole or in part out of, or pertaining to (i) the
fact that he is or was a director, officer, or employee of AmSouth, any of its
Subsidiaries, or any of its predecessors, or (ii)this Agreement, the Option
Agreements or any of the transactions contemplated hereby or thereby, whether in
any case asserted or arising before or after the Effective Time, Regions shall
indemnify and hold harmless, to the fullest extent permitted by applicable Law
each such Indemnified Party against any Liability (including advancement of
reasonable attorneys' fees and expenses prior to the final disposition of any
claim, suit, proceeding, or investigation to each Indemnified Party to the
fullest extent permitted by Law upon receipt of any undertaking required by
applicable Law), judgments, fines, and amounts paid in settlement in connection
with any such threatened or actual claim, action, suit, proceeding, or
investigation.
(b) Regions agrees that all rights to indemnification and all
limitations on Liability existing in favor of the directors, officers, and
employees of AmSouth and its Subsidiaries (the "COVERED PARTIES") as provided in
their respective Organizational Documents as in effect as of the date of this
Agreement or in any indemnification agreement in existence on the date of this
Agreement with AmSouth or its Subsidiaries and disclosed in AmSouth's Disclosure
Letter with respect to matters occurring prior to the Effective Time shall
survive the Merger and shall continue in full force and effect, and shall be
honored by such entities or their respective successors as if they were the
indemnifying party thereunder, without any amendment thereto; provided, that
nothing contained in this Section 4.16(b) shall be deemed to preclude any
liquidation, consolidation, or merger after the Effective Time of any AmSouth
Subsidiaries, in which case all of such rights to indemnification and
limitations on Liability shall be deemed to so survive and continue
notwithstanding any such liquidation, consolidation, or merger. Without limiting
the foregoing, in any case in which approval by Regions is required to
effectuate any indemnification, Regions shall direct, at the election of the
Indemnified Party, that the determination of any such approval shall be made by
independent counsel mutually agreed upon between Regions and the Indemnified
Party.
(c) Regions, from and after the Effective Time, will directly or
indirectly cause the Persons who served as directors or officers of AmSouth
immediately prior to the Effective Time to be covered by Regions's existing
directors' and officers' liability insurance policy with respect to acts or
omissions occurring prior to the Effective Time which were committed by such
officers and directors in their capacity as such; provided, that (i) Regions may
substitute therefor policies of at least the same coverage and amounts
containing terms and conditions which are not less advantageous than such
policy, (ii) in no event shall Regions be required to expend more than 250% per
year of coverage of the amount currently expended by AmSouth per year of
coverage as of the date of this Agreement (the "MAXIMUM AMOUNT") to
-30-
maintain or procure insurance coverage pursuant hereto, and (iii) if
notwithstanding the use of reasonable best efforts to do so, Regions is unable
to maintain or obtain the insurance called for by this Section 4.16(c), Regions
shall obtain as much comparable insurance as available for the Maximum Amount.
Such insurance coverage shall commence at the Effective Time and will be
provided for a period of no less than six years after the Effective Time.
(d) Any Indemnified Party wishing to claim indemnification under
Section 4.16(a), upon learning of any claim, action, suit, proceeding or
investigation described above, shall promptly notify Regions thereof; provided
that the failure so to notify shall not affect the obligations of Regions under
Section 4.16(a) unless and to the extent that Regions is prejudiced as a result
of such failure.
(e) The provisions of this Section 4.16 are intended to be for the
benefit of and shall be enforceable by, each Indemnified Party and his or her
heirs and representatives.
4.17 CORPORATE GOVERNANCE.
(a) Immediately prior to the execution and delivery of this Agreement,
the Board of Directors of Regions adopted a resolution (not to be withdrawn)
providing for the amendment of the Regions Bylaws, effective as of the Effective
Time, to insert an Article IV, Section 11 as set forth below, which Article IV,
Section 11 shall fully replace and supersede the Article III, Section 10 and
Article IV, Section 11 in effect as of immediately before such amendment. The
provisions of this by-law shall also be considered an agreement of the Parties
in this Agreement MUTATIS MUTANDIS.
BY-LAW
Section 11. CHAIRMAN AND CEO POSITIONS; BOARD COMPOSITION.
(a) The Board of Directors of the Corporation has resolved
that, effective as of the Effective Time (as defined in
the Agreement and Plan of Merger, dated as of May 24,
2006, by and between Regions Financial Corporation and
AmSouth Bancorporation, as the same may be amended from
time to time (the "MERGER AGREEMENT")), and
notwithstanding any other provision of these By-Laws
that may be to the contrary, X. Xxxx Xxxxxx shall serve
as President and Chief Executive Officer of the
Corporation and Xxxxxxx X. Xxxxx shall serve as the
Chairman of the Board of Directors of the Corporation.
During the period that Xxxxxxx X. Xxxxx is serving as
Chairman of the Board of Directors of the Corporation,
and notwithstanding any other provision of these
By-Laws that may be to the contrary, the Chairman of
the Board of Directors shall, in addition to any other
duties that usually devolve upon his office and such
other duties as are prescribed by the By-Laws and by
the Board of Directors, preside at all meetings of the
Board of Directors and stockholders (subject to the
third sentence of Section 2 of this Article IV), shall,
subject to applicable law or stock exchange rule,
attend all meetings of committees of the Board of
Directors and shall participate in any regular meetings
of management
-31-
of the Corporation; and the President and Chief
Executive Officer of the Corporation shall have the
authority and duties contemplated for the Chief
Executive Officer of the Corporation by Section 3 of
this Article IV. In the event that, prior to the third
anniversary of the Closing Date, Xxxxxxx X. Xxxxx
resigns or retires from his position as Chairman of the
Board of Directors of the Corporation and X. Xxxx
Xxxxxx is then continuing to serve as the President and
Chief Executive Officer of the Corporation, X. Xxxx
Xxxxxx will also assume the position of Chairman of the
Board of Directors of the Corporation.
(b) Effective as of the Effective Time, the Board of
Directors of the Corporation shall be comprised of
twenty-one (21) directors (plus up to two additional
directors solely as contemplated by the following
parenthetical phrases), of which twelve (12) (plus up
to one additional director to be added after the date
of the Merger Agreement and prior to the Effective Time
with the mutual agreement of Regions and AmSouth) shall
be members of the Board of Directors of the Corporation
prior to the Effective Time (as defined in the Merger
Agreement) chosen by the Corporation prior to the
Effective Time (the "FORMER REGIONS DIRECTORS") and
nine (9) (plus up to one additional director to be
added after the date of the Merger Agreement and prior
to the Effective Time with the mutual agreement of
Regions and AmSouth) of which shall be former members
of the Board of Directors of AmSouth chosen by AmSouth
prior to the Effective Time (the "FORMER AMSOUTH
DIRECTORS") and the Former Regions Directors and the
Former AmSouth Directors shall be apportioned among the
three classes of the Board of Directors in a manner as
nearly equal as possible. From and after the Effective
Time through the third anniversary of the Closing Date
(as defined in the Merger Agreement), all vacancies on
the Board of Directors of the Corporation created by
the cessation of service of a Former Regions Director
shall be filled by a nominee proposed to the nominating
committee of the Board of Directors of the Corporation
by a majority of the remaining Former Regions
Directors, and all vacancies on the Board of Directors
of the Corporation created by the cessation of service
of a Former AmSouth Director shall be filled by a
nominee proposed to the nominating committee of the
Board of Directors of the Corporation by a majority of
the remaining Former AmSouth Directors, and all
directors so nominated and appointed or elected to the
Board of Directors of the Corporation by proposal of
the Former Regions Directors shall be considered
"Former Regions Directors" for purposes of this Section
11 and all directors so nominated and appointed or
elected to the Board of Directors of the Corporation by
proposal of the Former AmSouth Directors shall be
considered "Former AmSouth Directors" for purposes of
this Section 11.
(c) The removal of X. Xxxx Xxxxxx or Xxxxxxx X. Xxxxx from,
or the failure to appoint or re-elect X. Xxxx Xxxxxx or
Xxxxxxx X. Xxxxx to, any of the
-32-
positions specifically provided for in this Section 11,
and any amendment to or termination of any employment
agreement with X. Xxxx Xxxxxx or Xxxxxxx X. Xxxxx or of
the authorities or duties thereof pursuant to Section
(a) hereof, prior to the third anniversary of the
Closing Date and any determination not to nominate X.
Xxxx Xxxxxx or Xxxxxxx X. Xxxxx as a Director of the
Corporation, prior to the third anniversary of the
Closing Date, shall each require the affirmative vote
of at least 75% of the full Board of Directors.
(d) Until the third anniversary of the Closing Date, each
of the Applicable Committees shall be chaired by one
member of the Board of Directors (each, a "Committee
Chairman"), and, subject to any relevant independence
and expertise requirements under applicable law or
stock exchange rule, at any particular time two
Committee Chairmen shall have been selected from among
the Former Regions Directors and two Committee Chairmen
shall have been selected from among the Former AmSouth
Directors. For purposes of this Section 11(d),
"Applicable Committees" shall mean the Audit Committee,
the Nominating and Corporate Governance Committee, the
Compensation Committee and the Risk Management
Committee of the Board of Directors (or any successor
committee to any such committee). Until the third
anniversary of the Closing Date, subject to any
relevant independence and expertise requirements under
applicable law or stock exchange rule, the membership
of the Nominating and Corporate Governance Committee
shall include an equal number of Former Regions
Directors and Former AmSouth Directors.
(e) The provisions of this Section 11 may be modified,
amended or repealed, and any By-law provision
inconsistent with the provisions of this Section 11 may
be adopted, only by an affirmative vote of at least 75%
of the full Board of Directors. In the event of any
inconsistency between any provision of this Section 11
and any other provision of these By-laws or the
Corporation's other constituent documents, the
provisions of this Section 11 are intended to control.
4.18 CHANGE OF METHOD. AmSouth and Regions shall be empowered, upon their
mutual agreement and without additional approval of their respective Boards of
Directors, at any time prior to the Effective Time, to change the method or
structure of effecting the combination of AmSouth and Regions (including the
provisions of Article 1), if and to the extent they both deem such change to be
necessary, appropriate or desirable; provided, however, that no such change
shall (i) alter or change the Exchange Ratio or the number of shares of Regions
Common Stock received by AmSouth stockholders in exchange for each share of
AmSouth Common Stock, (ii) adversely affect the Tax treatment of AmSouth's
stockholders or Regions's stockholders pursuant to this Agreement, (iii)
adversely affect the Tax treatment of AmSouth or Regions pursuant to this
Agreement or (iv) materially impede or delay the consummation of the
transactions contemplated by this Agreement in a timely manner. The Parties
agree to reflect
-33-
any such change in an appropriate amendment to this Agreement executed by both
Parties in accordance with Section 7.6.
4.19 RESTRUCTURING EFFORTS. If either Regions or AmSouth shall have failed
to obtain the requisite vote or votes of its Holders for the consummation of the
transactions contemplated by this Agreement at a duly held meeting of its
Holders or at any adjournment or postponement thereof, each of the parties shall
in good faith use its reasonable best efforts to negotiate a restructuring of
the transaction provided for herein (it being understood that neither Party
shall have any obligation to alter or change the amount or kind of the merger
consideration in a manner adverse to such party or its Holders) and/or to
resubmit the transaction to their respective Holders for approval.
ARTICLE 5
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
5.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective obligations of
each Party to perform this Agreement and to consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by each Party pursuant to Section 7.6:
(a) STOCKHOLDER APPROVAL. AmSouth shall have obtained the AmSouth
Stockholder Approval and Regions shall have obtained the Regions Stockholder
Approval.
(b) REGULATORY APPROVALS. All Regulatory Consents required to
consummate the Merger (the "REQUIRED CONSENTS") shall (i) have been obtained or
made and be in full force and effect and all waiting periods required by Law
shall have expired and (ii) not be subject to any term or condition that would,
after the Effective Time, have or be reasonably likely to have, a Material
Adverse Effect on Regions (after giving effect to the Merger).
(c) NO ORDERS OR RESTRAINTS; ILLEGALITY. No Order issued by any
Governmental Authority (whether temporary, preliminary, or permanent) preventing
the consummation of the Merger shall be in effect and no Law or Order shall have
been enacted, entered, promulgated or enforced by any Governmental Authority
that prohibits, restrains, or makes illegal the consummation of the Merger.
(d) REGISTRATION STATEMENT. The Registration Statement shall be
effective under the 1933 Act, no stop orders suspending the effectiveness of the
Registration Statement shall have been issued, and no action, suit, proceeding,
or investigation by the SEC or any other Governmental Authority to suspend the
effectiveness thereof shall have been initiated and be continuing or be
threatened.
(e) LISTING OF REGIONS COMMON STOCK. The shares of Regions Common
Stock to be issued to the holders of AmSouth Common Stock upon consummation of
the Merger shall have been authorized for listing on the NYSE, subject to
official notice of issuance.
5.2 CONDITIONS TO OBLIGATIONS OF REGIONS. The obligations of Regions to
perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are
-34-
subject to the satisfaction of the following conditions, unless waived by
Regions pursuant to Section 7.6:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of AmSouth set forth in this Agreement, after giving effect to Sections 3.1 and
3.2, shall be true and correct as of the date of this Agreement and as of the
Closing Date as though made at and as of the Closing Date (except that
representations and warranties that by their terms speak specifically as of the
date of this Agreement or some other date shall be true and correct as of such
date) and Regions shall have received a certificate, dated the Closing Date,
signed on behalf of AmSouth by the Chief Executive Officer and Chief Financial
Officer of AmSouth to such effect.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. AmSouth shall have duly
performed and complied with the agreements and covenants required to be
performed and complied with by it pursuant to this Agreement prior to the
Effective Time in all material respects and Regions shall have received a
certificate, dated the Closing Date, signed on behalf of AmSouth by the Chief
Executive Officer and Chief Financial Officer of AmSouth to such effect.
(c) TAX OPINION. Regions shall have received a written opinion from
Wachtell, Lipton, Xxxxx & Xxxx, dated the Closing Date, to the effect that, on
the basis of facts, representations and assumptions set forth or referred to in
such opinion, the Merger will constitute a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code. In rendering such opinion, such
counsel shall be entitled to rely upon representations of officers of Regions
and AmSouth reasonably satisfactory in form and substance to such counsel.
5.3 CONDITIONS TO OBLIGATIONS OF AMSOUTH. The obligations of AmSouth to
perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following conditions,
unless waived by AmSouth pursuant to Section 7.6:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
of Regions set forth in this Agreement, after giving effect to Sections 3.1 and
3.2, shall be true and correct as of the date of this Agreement and as of the
Closing Date as though made at and as of the Closing Date (except that
representations and warranties that by their terms speak specifically as of the
date of this Agreement or some other date shall be true and correct as of such
date) and AmSouth shall have received a certificate, dated the Closing Date,
signed on behalf of Regions by the Chief Executive Officer and Chief Financial
Officer of Regions to such effect.
(b) PERFORMANCE OF AGREEMENTS AND COVENANTS. Regions shall have duly
performed and complied with the agreements and covenants required to be
performed and complied with by it pursuant to this Agreement prior to the
Effective Time in all material respects and AmSouth shall have received a
certificate, dated the Closing Date, signed on behalf of Regions by the Chief
Executive Officer and Chief Financial Officer of Regions to such effect.
-35-
(c) TAX OPINION. AmSouth shall have received a written opinion from
Xxxxxxxx & Xxxxxxxx LLP, dated the Closing Date, to the effect that, on the
basis of facts, representations and assumptions set forth or referred to in such
opinion, the Merger will constitute a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code. In rendering such opinion, such
counsel shall be entitled to rely upon representations of officers of Regions
and AmSouth reasonably satisfactory in form and substance to such counsel.
ARTICLE 6
TERMINATION
6.1 TERMINATION. Notwithstanding any other provision of this Agreement, and
notwithstanding the AmSouth Stockholder Approval and Regions Stockholder
Approval, this Agreement may be terminated and the Merger abandoned at any time
prior to the Effective Time:
(a) By mutual consent of the Board of Directors of both Parties;
or
(b) By the Board of Directors of either Party in the event of a
breach of any representation, warranty, covenant or agreement contained in
this Agreement on the part of the other Party, which breach would result
in, if occurring or continuing on the Closing Date, the failure of the
conditions to the terminating Party's obligations set forth in Section 5.2
or 5.3, as the case dictates, and which cannot be or has not been cured
within 30 days after the giving of written notice to the breaching Party of
such breach; or
(c) By the Board of Directors of either Party in the event that
any Required Consent has been denied by final nonappealable action of such
authority; or
(d) By the Board of Directors of either Party in the event that
the Merger has not been consummated by May 31, 2007 (the "TERMINATION
DATE"), if the failure to consummate the transactions contemplated hereby
on or before such date is not caused by any breach of this Agreement by the
Party electing to terminate pursuant to this Section 6.1; or
(e) By the Board of Directors of either Party in the event that
the Board of Directors of the other Party has failed to recommend that its
stockholders vote in favor of this Agreement or has withdrawn, modified or
qualified such recommendation in a manner adverse to the terminating Party,
the other Party has failed to substantially comply with its obligations
under Section 4.5 or 4.11, (iii) the other Party negotiates or authorizes
the conduct of negotiations (and twenty business days have elapsed without
such negotiations being discontinued) with a third party (it being
understood and agreed that "negotiate" shall not be deemed to include the
request and receipt of information from, any person that submits an
Acquisition Proposal or discussions regarding such information for the sole
purpose of ascertaining the terms of such Acquisition Proposal) regarding
an Acquisition Proposal other than the Merger, or (iv) the Board of
Directors of the other Party has recommended or endorsed an Acquisition
Proposal; or
-36-
(f) By the Board of Directors of either Party, if it
determines in good faith by a majority vote that the other Party has
substantially engaged in bad faith in breach of its obligations under
Section 4.19 of this Agreement.
6.2 EFFECT OF TERMINATION. In the event of the termination and abandonment
of this Agreement pursuant to Section 6.1, this Agreement shall become void and
have no effect, and none of Regions, AmSouth, any of their respective
Subsidiaries, or any of the officers or directors of any of them, shall have any
Liability of any nature whatsoever hereunder or in conjunction with the
transactions contemplated hereby, except that (a) the provisions of Sections
3.3(q) and 4.9(b), this Section 6.2, and Article 7 shall survive any such
termination and abandonment, and (b) a termination of this Agreement shall not
relieve a breaching Party from Liability for any uncured willful breach of a
representation, warranty, covenant, or agreement of such Party contained in this
Agreement. Notwithstanding the foregoing, in the event of any termination of
this Agreement, each of the Option Agreements shall remain in full force and
effect to the extent provided therein.
ARTICLE 7
MISCELLANEOUS
7.1 DEFINITIONS.
(a) Except as otherwise provided herein, the capitalized terms set
forth below shall have the following meanings:
"1933 ACT" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.
"ACQUISITION PROPOSAL" shall mean, other than the transactions
contemplated by this Agreement, any offer, proposal or inquiry relating to,
or any third party indication of interest in, (i) any acquisition or
purchase, direct or indirect, of 25% or more of the consolidated assets of
a Party and its Subsidiaries or 25% or more of any class of equity or
voting securities of a Party or its Subsidiaries whose assets, individually
or in the aggregate, constitute more than 25% of the consolidated assets of
the Party, (ii) any tender offer (including a self-tender offer) or
exchange offer that, if consummated, would result in such third party
beneficially owning 25% or more of any class of equity or voting securities
of a Party or its Subsidiaries whose assets, individually or in the
aggregate, constitute more than 25% of the consolidated assets of the
Party, or (iii) a merger, consolidation, share exchange, business
combination, reorganization, recapitalization, liquidation, dissolution or
other similar transaction involving a Party or its Subsidiaries whose
assets, individually or in the aggregate, constitute more than 25% of the
consolidated assets of the Party.
-37-
"AFFILIATE" of a Person shall mean any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by
or under common control with such Person.
"AMSOUTH RESTATED CHARTER" shall mean the Restated Certificate of
Incorporation of AmSouth in effect as of the date of this Agreement and as
amended from time to time thereafter.
"AMSOUTH CAPITAL STOCK" shall mean the AmSouth Common Stock and
the AmSouth Preferred Stock.
"AMSOUTH COMMON STOCK" shall mean the $1.00 par value per share
common stock of AmSouth, together with the AmSouth Shareholder Rights
attached thereto pursuant to the AmSouth Rights Plan.
"AMSOUTH PREFERRED STOCK" shall mean the preferred stock, no par
value, of AmSouth.
"AMSOUTH RIGHTS PLAN" shall mean that certain Stockholder
Protection Rights Agreement, dated as of December 18, 1997, between AmSouth
Bancorporation and AmSouth Bank, as Rights Agent.
"AMSOUTH STOCKHOLDER RIGHTS" shall mean the preferred stock
purchase rights issued pursuant to the AmSouth Rights Plan.
"BANK SECRECY ACT" shall mean the Bank Secrecy Act of 1970, as
amended, and any rules or regulations promulgated thereunder.
"BHC ACT" shall mean the federal Bank Holding Company Act of
1956, as amended.
"COMPENSATION AND BENEFIT PLAN" shall mean any pension,
retirement, profit-sharing, deferred compensation, stock option, employee
stock ownership, severance pay, vacation, bonus, or other incentive plan,
any other employee program or agreement, any medical, vision, dental, or
other written health plan, any life insurance plan, and any other employee
benefit plan or fringe benefit plan, including any "employee benefit plan"
(as that term is defined in Section 3(3) of ERISA), maintained by,
sponsored in whole or in part by, or contributed to by a Party for the
benefit of its and its Subsidiaries' employees, retirees, dependents,
spouses, directors, independent contractors, or other beneficiaries and
under which such employees, retirees, dependents, spouses, directors,
independent contractors, or other beneficiaries are eligible to participate
and, except for the purposes of Section 4.15, any employment, severance,
termination, consulting or retirement Contract with its or its
Subsidiaries' current or former employees.
"CONFIDENTIALITY AGREEMENT" shall mean that certain
Confidentiality Agreement, dated May 18, 2006, by and between Regions and
AmSouth.
-38-
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person pursuant
to any Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement, arrangement,
commitment, contract, indenture, instrument, lease, understanding, or
undertaking of any kind or character to which any Person is a party or that
is binding on any Person or its capital stock, assets, or business.
"DEFAULT" shall mean (i) any breach or violation of or default
under any Contract, Law, Order, or Permit, (ii) any occurrence of any event
that with the passage of time or the giving of notice or both would
constitute a breach or violation of or default under any Contract, Law,
Order, or Permit, or (iii) any occurrence of any event that with or without
the passage of time or the giving of notice would give rise to a right to
terminate or revoke, change the current terms of, or renegotiate, or to
accelerate, increase, or impose any Liability under, any Contract, Law,
Order, or Permit.
"DGCL" shall mean the Delaware General Corporation Law, as
amended.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to pollution or
protection of human health or the environment (including ambient air,
surface water, ground water, land surface, or subsurface strata) and which
are administered, interpreted, or enforced by the United States
Environmental Protection Agency and state and local agencies with
jurisdiction over, and including common Law in respect of, pollution or
protection of the environment, including CERCLA, the Resource Conservation
and Recovery Act, as amended, 42 U.S.C. 6901, ET SEQ., and any other Laws
relating to emissions, discharges, releases, or threatened releases of any
Hazardous Material, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport, or handling of
any Hazardous Material.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA PLAN" shall mean any Compensation and Benefit Plan which
is an "employee welfare benefit plan," as that term is defined in Section
3(l) of ERISA, or an "employee pension benefit plan," as that term is
defined in Section 3(2) of ERISA.
"EVALUATION MATERIAL" shall have the meaning set forth in the
Confidentiality Agreement.
"EXCHANGE AGENT" shall mean an exchange agent mutually agreed
upon by Regions and AmSouth, which may be an Affiliate of Regions or
AmSouth.
"EXHIBITS" 1 through 4, inclusive, shall mean the Exhibits so
marked, copies of which are attached to this Agreement. Such Exhibits are
hereby incorporated by reference herein and made a part hereof, and may be
referred to in this Agreement and any other related instrument or document
without being attached hereto.
-39-
"FACILITIES" shall mean all buildings and improvements on the
Property of any Person and any of its Subsidiaries.
"FINANCIAL STATEMENTS" shall mean (i) the consolidated statements
of condition or balance sheets (including related notes and schedules, if
any) of a Party included in any SEC Report filed by a Party, and the
related statements of income, changes in shareholders' equity, and cash
flows (including related notes and schedules, if any) included in any SEC
Report filed by a Party, and (ii) the consolidated statements of condition
or balance sheets of a Party (including related notes and schedules, if
any), and related statement of income, change in shareholders' equity, and
cash flows (including related notes and schedules, if any) included in its
SEC Reports.
"GAAP" shall mean United States generally accepted accounting
principles, consistently applied during the periods involved.
"GOVERNMENTAL AUTHORITY" shall mean each Regulatory Authority and
any other domestic or foreign court, administrative agency, commission or
other governmental authority or instrumentality (including the staff
thereof), or any industry self-regulatory authority (including the staff
thereof).
"HAZARDOUS MATERIAL" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable Environmental
Laws), and (ii) any chemicals, pollutants, contaminants, petroleum,
petroleum products that are or become regulated under any applicable local,
state, or federal Law (and specifically shall include asbestos requiring
abatement, removal, or encapsulation pursuant to the requirements of
governmental authorities, black mold and any polychlorinated biphenyls).
"HSR ACT" shall mean Section 7A of the Xxxxxxx Act, as added by
Title II of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.
"INTELLECTUAL PROPERTY" shall mean all patents, trademarks, trade
names, service marks, domain names, database rights, copyrights, and any
applications therefor, mask works, technology, know-how, Trade Secrets,
inventory, ideas, algorithms, processes, computer software programs or
applications (in both source code and object code form), and tangible or
intangible proprietary information or material and all other intellectual
property or proprietary rights.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of
1986, as amended, and the rules and regulations promulgated thereunder.
"JOINT PROXY STATEMENT/PROSPECTUS" shall mean the joint proxy
statement and prospectus and other proxy solicitation materials of Regions
and AmSouth constituting a part of the Registration Statement.
-40-
"LAW" shall mean any code, law (including common law), ordinance,
regulation, rule, or statute applicable to a Person or its assets,
Liabilities, or business, including those promulgated, interpreted, or
enforced by any Governmental Authority.
"LIABILITY" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost, or expense
(including costs of investigation, collection, and defense), claim,
deficiency, or guaranty of any type, whether accrued, absolute or
contingent, liquidated or unliquidated, matured or unmatured, or otherwise.
"LIEN" shall mean any mortgage, pledge, reservation, restriction
(other than a restriction on transfers arising under the Securities Laws),
security interest, lien, or encumbrance of any nature whatsoever of, on, or
with respect to any property or property interest, other than (i) Liens for
property Taxes not yet due and payable and (ii) in the case of depository
institution Subsidiaries of a Party, pledges to secure deposits.
"LITIGATION" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, demand letter, governmental or
other examination or investigation, hearing, inquiry, administrative or
other proceeding, suit or notice (written or oral) by any Person alleging
potential Liability, but shall not include regular, periodic examinations
by Regulatory Authorities.
"NASD" shall mean the National Association of Securities Dealers,
Inc.
"NYSE" shall mean the New York Stock Exchange, Inc.
"ORDER" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or
writ of any federal, state, local, or foreign or other court, arbitrator,
mediator, tribunal, administrative agency, or Governmental Authority.
"ORGANIZATIONAL DOCUMENTS" shall mean the articles of
incorporation, certificate of incorporation, charter, by-laws or other
similar governing instruments, in each case as amended as of the date
specified, of any Person, including the AmSouth Restated Charter and the
Regions Restated Certificate of Incorporation.
"OUTSTANDING" shall mean, with respect to shares of capital stock
of a Party, shares of such capital stock that are issued and outstanding at
a particular time.
"PARTY" shall mean either Regions or AmSouth, and "PARTIES" shall
mean both Regions and AmSouth.
"PATRIOT ACT" means the USA Patriot Act of 2001, as amended, and
any rules or regulations promulgated thereunder.
"PENSION PLAN" shall mean any ERISA Plan which is also subject to
Section 412 of the Internal Revenue Code or Section 302 of ERISA.
-41-
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, order or permit from Governmental Authorities that are
required for the operation of a Party's respective businesses.
"PERMITTED ISSUANCES" shall mean (a) in the case of Regions, (i)
issuances of Regions Common Stock upon exercise of Rights outstanding as of
the date hereof issued under the Regions Stock Plans, and (ii) issuances of
Regions Common Stock pursuant to the Regions DRIP to the extent permitted
hereunder; and (b) in the case of AmSouth, (i) issuances of AmSouth Common
Stock upon exercise of Rights outstanding as of the date hereof issued
under the AmSouth Stock Plans, and (ii) issuances of AmSouth Common Stock
pursuant to the AmSouth DRIP to the extent permitted hereunder.
"PERMITTED REPURCHASES" shall mean (a) in the case of Regions,
repurchases of Regions Capital Stock in accordance with any stock
repurchase program announced prior to the date of this Agreement by
Regions, or any extension or renewal of such program, in accordance with
Rule 10b-18 promulgated by the SEC and Regulation M promulgated by the SEC
and (b) in the case of AmSouth, repurchases of AmSouth Capital Stock in
accordance with any stock repurchase program announced prior to the date of
this Agreement by AmSouth, or any extension or renewal of such program, in
accordance with Rule 10b-18 promulgated by the SEC and Regulation M
promulgated by the SEC.
"PERSON" shall mean a natural person or any legal, commercial, or
governmental entity, including, a corporation, general partnership, joint
venture, limited partnership, limited liability company, trust, business
association, group acting in concert, or any person acting in a
representative capacity.
"PROPERTY" shall mean all real property leased or owned by any
Person and its Subsidiaries, either currently or in the past.
"REGIONS BYLAWS" shall mean the By-Laws of Regions in effect as
of the date of this Agreement and amended from time to time thereafter.
"REGIONS CAPITAL STOCK" shall mean Regions Common Stock and
Regions Preferred Stock.
"REGIONS COMMON STOCK" shall mean the $0.01 par value per share
common stock of Regions.
"REGIONS PREFERRED STOCK" shall mean the $1.00 par value per
share preferred stock of Regions.
"REGIONS RESTATED CERTIFICATE OF INCORPORATION" shall mean the
amended and restated certificate of incorporation of Regions in effect as
of the date of this Agreement and amended from time to time thereafter.
-42-
"REGIONS STOCK PLAN" shall mean any equity compensation plan of
Regions.
"REGISTRATION STATEMENT" shall mean the Registration Statement on
Form S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by
Regions under the 1933 Act with respect to the shares of Regions Common
Stock to be issued to the stockholders of AmSouth in connection with the
transactions contemplated by this Agreement.
"REGULATORY AUTHORITIES" shall mean, collectively, the Federal
Trade Commission, the United States Department of Justice, the Board of the
Governors of the Federal Reserve System, the Office of the Comptroller of
the Currency, the Federal Deposit Insurance Corporation, the Office of
Thrift Supervision, the Internal Revenue Service, the PBGC, all state
regulatory agencies having jurisdiction over the Parties and their
respective Subsidiaries, the NASD, the NYSE, and the SEC (including, in
each case, the staff thereof).
"REPRESENTATIVE" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, agent or other representative of
a Person.
"RIGHTS" shall mean, 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,
restricted stock, deferred stock awards, stock units, phantom awards,
dividend equivalents, 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
or earnings of such Person, and shall include the Regions Stock Options,
Regions Stock-Based Awards, AmSouth Stock Options and AmSouth Stock-Based
Awards, but shall not include the AmSouth Shareholder Rights.
"SEC" shall mean the United States Securities and Exchange
Commission.
"SEC DOCUMENTS" shall mean all forms, proxy statements,
registration statements, offering circulars, information statements,
reports, schedules, and other documents filed, or required to be filed, by
a Party or any of its Subsidiaries with the SEC.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Company Act, the Investment Advisers Act, the Trust Indenture Act of 1939,
each as amended, state securities and "Blue Sky" Laws, including in each
case the rules and regulations of any Governmental Authority promulgated
thereunder.
"SUBSIDIARY" or "SUBSIDIARIES" shall have the meaning assigned in
Rule 1-02(x) of Regulation S-X of the SEC; provided that there shall not be
included any such entity acquired through foreclosure or any such entity
the equity securities of which are owned or controlled in a fiduciary
capacity.
-43-
"TAX" or "TAXES" shall mean (i) any and all federal, state,
local, and foreign taxes, levies, imposts, duties, or other like
assessments, including income, gross receipts, excise, employment, sales,
use, transfer, license, payroll, franchise, severance, stamp, occupation,
windfall profits, environmental, federal highway use, commercial rent,
customs duties, capital stock, paid-up capital, profits, withholding,
Social Security, single business and unemployment, disability, real
property, personal property, registration, ad valorem, value added,
alternative or add-on minimum, estimated, or other tax of any kind
whatsoever, including any related interest and penalties, or additions
thereto, and (ii) any liability for any items described in clause (i) above
under Treasury Regulation Section 1.1502-6 (or any similar provision of
state, local or foreign law), as a successor or transferee, by contract or
otherwise.
"TAX RETURN" shall mean any report, return, information return,
or other information (including any amendments, schedules or attachments
thereto) required to be supplied to a Taxing authority in connection with
Taxes, including any return of an Affiliated or combined or unitary group
that includes a Party or its Subsidiaries.
"TAXABLE PERIOD" shall mean any period prescribed by any
governmental authority, including the United States or any state, local, or
foreign government or subdivision or agency thereof for which a Tax Return
is required to be filed or Tax is required to be paid.
"TECHNOLOGY SYSTEMS" shall mean the electronic data processing,
information, record keeping, communications, telecommunications, hardware,
third party software, networks, peripherals, portfolio trading and computer
systems, including any outsourced systems and processes, and Intellectual
Property which are used by Person and its Subsidiaries.
"TRADE SECRETS" means all trade secrets and confidential
information and know-how, including without limitation processes,
schematics, business methods, formulae, drawings, prototypes, models,
designs, customer lists and supplier lists.
(b) The terms set forth below shall have the meanings ascribed thereto
in the referenced sections:
Agreement................................. Preamble
Available AmSouth Stock Plan Shares....... Section 1.6(d)
AmSouth................................... Preamble
AmSouth Continuing Employees.............. Section 4.15(a)(i)
AmSouth DRIP.............................. Section 1.6(f)
AmSouth Insiders.......................... Section 4.13
AmSouth Option Agreement.................. Recitals
AmSouth Stockholder Approval.............. Section 3.3(b)(i)(A)
AmSouth Stock Option...................... Section 1.6(a)
AmSouth Stock Plan........................ Section 1.6(a)
AmSouth Stock-Based Award................. Section 1.6(b)
CERCLA.................................... Section 3.3(h)
-44-
Closing................................... Section 1.2
Closing Date.............................. Section 1.2
Covered Parties........................... Section 4.16(b)
Delaware Secretary........................ Section 1.3
Disclosure Letter......................... Section 3.1
Effective Time............................ Section 1.3
ERISA Affiliate........................... Section 3.3(k)(v)
Exchange Fund............................. Section 2.1(a)
Exchange Ratio............................ Section 1.4(a)
FDIC...................................... Section 3.3(i)(iii)(D)
Holder.................................... Section 2.1(b)
Indemnified Parties....................... Section 4.16(a)
Material Contract......................... Section 3.3(l)(i)(E)
Material Adverse Effect................... Section 3.2(b)
Maximum Amount............................ Section 4.16(c)
Merger.................................... Section 1.1
New Certificates.......................... Section 2.1(a)
Old AmSouth Certificates.................. Section 1.4(b)
Option Agreements......................... Recitals
PBGC...................................... Section 3.3(b)(iv)
PCBs...................................... Section 3.3(h)(vi)
Regulatory Consents....................... Section 4.7(b)
Regions................................... Preamble
Regions DRIP.............................. Section 3.3(c)(ii)
Regions Option Agreement.................. Recitals
Regions Stockholder Approval.............. Section 3.3(b)(i)(B)
Required Consents......................... Section 5.1(b)
SEC Reports............................... Section 3.3(d)(i)
Surviving Corporation..................... Section 1.1
Takeover Laws............................. Section 3.3(p)
Termination Date.......................... Section 6.1(d)
(c) Any singular term in this Agreement shall be deemed to include the
plural, and any plural term the singular. Whenever the words "include,"
"includes," or "including" are used in this Agreement, they shall be deemed
followed by the words "without limitation." The words "hereby," "herein,"
"hereof" or "hereunder," and similar terms are to be deemed to refer to this
Agreement as a whole and not to any specific section.
7.2 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. Except for Article 1,
and Article 2, Sections 4.4(c), 4.9(b), 4.16 and 4.17, and this Article 7, the
respective representations, warranties, obligations, covenants, and agreements
of the Parties shall be deemed only to be conditions of the Merger and shall not
survive the Effective Time.
-45-
7.3 EXPENSES.
(a) Except as otherwise provided in this Section 7.3, each of the
Parties shall bear and pay all costs and expenses incurred by it or on its
behalf in connection with the transactions contemplated hereunder, including
filing, registration, and application fees, printing fees, and fees and expenses
of its own financial or other consultants, investment bankers, accountants, and
counsel, except that the Parties shall each bear and pay one-half of the filing
fees payable in connection with the Registration Statement and the Joint Proxy
Statement/Prospectus and one half of the printing costs incurred in connection
with the printing of the Registration Statement and the Joint Proxy
Statement/Prospectus.
(b) Nothing contained in this Section 7.3 shall constitute or shall be
deemed to constitute liquidated damages for the willful breach by a Party of the
terms of this Agreement or otherwise limit the rights of the non-breaching
Party.
7.4 ENTIRE AGREEMENT. Except as otherwise expressly provided herein, this
Agreement (including the Disclosure Letters and Exhibits), together with the
Option Agreements, constitutes the entire agreement between the Parties with
respect to the transactions contemplated hereunder and supersedes all prior
arrangements or understandings with respect thereto, written or oral, other than
the Confidentiality Agreement, which shall remain in effect. Nothing in this
Agreement expressed or implied, is intended to confer upon any Person, other
than the Parties or their respective successors or assigns, any rights,
remedies, obligations, or liabilities under or by reason of this Agreement
except as provided in Sections 4.16 and 4.17.
7.5 AMENDMENTS. Before the Effective Time, this Agreement may be amended by
a subsequent writing signed by each of the Parties, whether before or after the
AmSouth Stockholder Approval or Regions Stockholder Approval has been obtained,
except to the extent that any such amendment would violate applicable Law or
would require the approval of the stockholders of AmSouth or stockholders of
Regions, unless such required approval is obtained.
7.6 WAIVERS.
(a) Prior to or at the Effective Time, either Party shall have the
right to waive any Default in the performance of any term of this Agreement by
the other Party, to waive or extend the time for the compliance or fulfillment
by the other Party of any and all of such other Party's obligations under this
Agreement, and to waive any or all of the conditions precedent to its
obligations under this Agreement, except any condition which, if not satisfied,
would result in the violation of any Law. No waiver by a Party shall be
effective unless in writing signed by a duly authorized officer of such Party.
(b) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the right of such
Party at a later time to enforce the same or any other provision of this
Agreement. No waiver of any condition or of the breach of any term contained in
this Agreement in one or more instances shall be deemed to be or construed as a
further or continuing waiver of such condition or breach or a waiver of any
other condition or of the breach of any other term of this Agreement.
-46-
7.7 ASSIGNMENT. Except as expressly contemplated hereby, neither this
Agreement nor any of the rights, interests, or obligations hereunder shall be
assigned by any Party (whether by operation of Law or otherwise) without the
prior written consent of each other party. Subject to the preceding sentence,
this Agreement will be binding upon, inure to the benefit of, and be enforceable
by the parties and their respective successors and assigns.
7.8 NOTICES. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, by registered or certified mail, postage pre-paid, or by
courier or overnight carrier, to the Persons at the addresses set forth below
(or at such other address as may be provided hereunder), and shall be deemed to
have been delivered as of the date so delivered:
AmSouth: AmSouth Bancorporation
0000 Xxxxx Xxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Telecopy Number: (000) 000-0000
Attention: X. Xxxx Xxxxxx
Chief Executive Officer
Copy to Counsel: Xxxxxxxx & Xxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy Number: (000) 000-0000
Attention: H. Xxxxxx Xxxxx, Esq.
Xxxxxxxx X. Xxxxx, Esq.
Regions: Regions Financial Corporation
000 Xxxxx 00xx Xxxxxx
Xxxxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxx
Chief Executive Officer
Copy to Counsel: Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, XX 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Xxxxxxxx X. Xxxxx, Esq.
7.9 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the Laws of the State of Delaware, without regard to any
applicable principles of conflicts of Laws.
-47-
7.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument, and which counterparts
may be delivered by facsimile.
7.11 CAPTIONS. The captions contained in this Agreement are for reference
purposes only and are not part of this Agreement.
7.12 INTERPRETATIONS. Neither this Agreement nor any uncertainty or
ambiguity herein shall be construed or resolved against any Party, whether under
any rule of construction or otherwise. No party to this Agreement shall be
considered the draftsman. The Parties acknowledge and agree that this Agreement
has been reviewed, negotiated, and accepted by all Parties and their attorneys
and shall be construed and interpreted according to the ordinary meaning of the
words used so as fairly to accomplish the purposes and intentions of the
Parties. Nothing contained herein shall require any Party or person to take any
action of any type in violation of applicable law.
7.13 SEVERABILITY. If any term or provision of this Agreement is determined
by a court of competent jurisdiction to be invalid, void or unenforceable, the
remaining provisions hereof, or the application of such provision to Persons or
circumstances other than those as to which it has been held invalid or
unenforceable, shall remain in full force and effect and in no way be affected,
impaired or invalidated thereby, so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner materially
adverse to any Party. Upon such determination, the Parties shall negotiate in
good faith in an effort to agree upon a suitable and equitable substitute
provision to effect the original intent of the Parties. If any provision of this
Agreement is so broad as to be unenforceable, the provision shall be interpreted
to be only so broad as is enforceable.
7.14 WAIVER OF JURY TRIAL. Each Party acknowledges and agrees that any
controversy which may arise under this Agreement is likely to involve
complicated and difficult issues, and therefore each Party hereby irrevocably
and unconditionally waives any right such Party may have to a trial by jury in
respect of any Litigation, directly or indirectly, arising out of, or relating
to, this Agreement, or the transactions contemplated by this Agreement. Each
Party certifies and acknowledges that (a) no representative, agent or attorney
of the other Party has represented, expressly or otherwise, that such other
Party would not, in the event of Litigation, seek to enforce the foregoing
waiver, (b) each Party understands and has considered the implications of this
waiver, (c) each Party makes this waiver voluntarily, and (d) each Party has
been induced to enter into this Agreement by, among other things, the mutual
waivers and certifications in this Section 7.14.
-48-
IN WITNESS WHEREOF, each of the Parties has caused this Agreement to
be duly executed and delivered on its behalf by its duly authorized officers as
of the day and year first above written.
REGIONS FINANCIAL CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
----------------------------------
Name: Xxxxxxx X. Xxxxx
Title: Chairman, President and
Chief Executive Officer
AMSOUTH BANCORPORATION
By: /s/ X. Xxxx Xxxxxx
----------------------------------
Name: X. Xxxx Xxxxxx
Title: Chairman, President and
Chief Executive Officer
[SIGNATURE PAGE TO MERGER AGREEMENT]
