Exhibit 10.A
Agreement and Plan of Merger
by and between
Morgan Keegan, Inc.
and
Regions Financial Corporation
Dated as of December 17, 2000
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Table of Contents
Page
Agreement and Plan of Merger A-6
Preamble A-6
ARTICLE 1-TRANSACTIONS AND TERMS OF MERGER A-7
1.1 Merger A-7
1.2 Time and Place of Closing A-7
1.3 Effective Time A-7
1.4 Execution of Support Agreements A-7
1.5 Execution of the Termination Fee Agreement A-7
ARTICLE 2-TERMS OF MERGER A-7
2.1 Certificate of Incorporation A-7
2.2 Bylaws A-8
2.3 Directors and Officers A-8
ARTICLE 3-MANNER OF CONVERTING SHARES A-8
3.1 Conversion of Shares A-8
3.2 Anti-Dilution Provisions A-10
3.3 Shares Held by Morgan or Regions A-10
3.4 Fractional Shares A-11
3.5 Conversion of Stock Rights A-11
ARTICLE 4-EXCHANGE OF SHARES A-12
4.1 Exchange Procedures A-12
4.2 Rights of Former Morgan Stockholders A-13
ARTICLE 5-REPRESENTATIONS AND WARRANTIES OF MORGAN A-14
5.1 Organization, Standing, and Power A-14
5.2 Authority; No Breach of Agreement A-14
5.3 Capital Stock A-15
5.4 Morgan Subsidiaries A-15
5.5 SEC Filings; Financial Statements A-16
5.6 Absence of Undisclosed Liabilities A-17
5.7 Absence of Certain Changes or Events A-17
5.8 Tax Matters A-17
5.9 Assets A-18
5.10 Environmental Matters A-18
5.11 Permits A-19
5.12 Compliance with Laws A-20
5.13 Labor Relations A-21
5.14 Employee Benefit Plans A-21
5.15 Material Contracts A-23
5.16 Legal Proceedings A-24
5.17 Reports A-24
5.18 Statements True and Correct A-24
5.19 Tax and Regulatory Matters A-25
5.20 Intellectual Property A-25
5.21 State Takeover Laws A-25
5.22 Charter Provisions A-25
5.23 Derivatives A-26
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5.24 Fairness Opinion A-26
5.25 Contracts with Clients A-26
5.26 Investment Advisory Activities A-26
ARTICLE 6-REPRESENTATIONS AND WARRANTIES OF REGIONS A-27
6.1 Organization, Standing, and Power A-27
6.2 Authority; No Breach of Agreement A-27
6.3 Capital Stock A-28
6.4 Regions Subsidiaries A-28
6.5 SEC Filings; Financial Statements A-29
6.6 Absence of Undisclosed Liabilities A-29
6.7 Absence of Certain Changes or Events A-30
6.8 Compliance with Laws A-30
6.9 Tax Matters A-30
6.10 Legal Proceedings A-31
6.11 Reports A-31
6.12 Statements True and Correct A-31
6.13 Tax and Regulatory Matters A-32
6.14 Derivatives A-32
6.15 Funds A-32
6.16 Ownership of Morgan Capital Stock A-32
ARTICLE 7-CONDUCT OF BUSINESS PENDING CONSUMMATION A-32
7.1 Affirmative Covenants of Both Parties A-32
7.2 Negative Covenants of Morgan A-33
7.3 Adverse Changes in Condition A-35
7.4 Reports A-35
ARTICLE 8-ADDITIONAL AGREEMENTS A-35
8.1 Registration Statement; Proxy Statement;
Stockholder Approval A-35
8.2 Applications A-36
8.3 Filings with State Offices A-36
8.4 Agreement as to Efforts to Consummate A-36
8.5 Investigation and Confidentiality A-37
8.6 Press Releases A-37
8.7 No Solicitation A-37
8.8 Tax Treatment A-38
8.9 Agreement of Affiliates A-38
8.10 Employee Benefits and Contracts A-39
8.11 Indemnification A-39
8.12 Exemption from Liability Under Section 16(b) A-41
8.13 Investment Companies A-41
8.14 Management Contract Consents A-42
8.15 Retention Program A-43
ARTICLE 9-CONDITIONS PRECEDENT TO OBLIGATIONS
TO CONSUMMATE A-43
9.1 Conditions to Obligations of Each Party A-43
9.2 Conditions to Obligations of Regions A-44
9.3 Conditions to Obligations of Morgan A-45
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ARTICLE 10-TERMINATION A-46
10.1 Termination A-46
10.2 Effect of Termination A-46
10.3 Non-Survival of Representations
and Covenants A-47
ARTICLE 11-MISCELLANEOUS A-47
11.1 Definitions A-47
11.2 Expenses A-55
11.3 Brokers and Finders A-55
11.4 Entire Agreement A-56
11.5 Amendments A-56
11.6 Waivers A-56
11.7 Assignment A-56
11.8 Notices A-57
11.9 Governing Law A-57
11.10 Counterparts A-57
11.11 Captions A-57
11.12 Interpretations A-57
11.13 Enforcement of Agreement A-58
11.14 Severability A-58
Signatures A-58
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List of Exhibits
Exhibit Number Description
1. Form of Support Agreement. (1.4).
2. Form of Termination Fee Agreement. (1.4).
3. Form of Affiliate Agreement. (8.11).
</TALBE>
[Exhibits Omitted]
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Agreement and Plan of Merger
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of December 17, 2000, by and between MORGAN KEEGAN,
INC. ("Morgan"), a corporation organized and existing under the Laws
of the State of Tennessee, with its principal office located in
Memphis, Tennessee; and REGIONS FINANCIAL CORPORATION ("Regions"),
a corporation organized and existing under the Laws of the State
of Delaware, with its principal office located in Birmingham, Alabama.
Preamble
The Boards of Directors of Morgan and Regions are of the opinion
that the transactions described herein are in the best interests of
the parties to this Agreement and their respective stockholders.
This Agreement provides for the acquisition of Morgan by Regions
pursuant to the merger of Morgan with and into Regions. At the
effective time of the merger, the outstanding shares of the
capital stock of Morgan shall be converted into shares of the
common stock of Regions (except as provided herein). As a
result, stockholders of Morgan shall become stockholders
of Regions, and each of the subsidiaries of Morgan shall
continue to conduct its business and operations as a
subsidiary of Regions.
The transactions described in this Agreement are subject
to the approvals of the stockholders of Morgan, the Board
of Governors of the Federal Reserve System, the National
Association of Securities Dealers, Inc., and certain state
regulatory authorities, and the satisfaction of certain
other conditions described in this Agreement. It is the
intention of the parties to this Agreement that the Merger
for federal income tax purposes 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.
As a condition and inducement to Regions' willingness
to enter into this Agreement, (i) Morgan's directors and
certain executive officers are executing and delivering to
Regions an agreement (a "Support Agreement"), in
substantially the form of Exhibit 1, and (ii) Morgan and
Regions are entering into a termination fee agreement
(the "Termination Fee Agreement"), in substantially the
form of Exhibit 2.
In addition, Regions and Morgan have agreed, in
connection with the transactions contemplated hereby,
to establish a retention program on substantially the
terms described herein, the purpose of which is to retain
the services of certain employees of Morgan following the
consummation of the transactions contemplated hereby.
Certain terms used in this Agreement are defined in
Section 11.1 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:
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ARTICLE 1
Transactions and Terms of Merger
1.1 Merger. Subject to the terms and conditions
of this Agreement, at the Effective Time, Morgan shall be
merged with and into Regions in accordance with the provisions
of Section 48-21-109 of the TBCA and Sections 252 and 258 of
the DGCL and with the effect provided in Section 48-21-108 of
the TBCA and Section 259 of the DGCL, respectively (the "Merger").
Regions shall be the Surviving Corporation resulting from the
Merger and shall continue to be governed by the Laws of the
State of Delaware. The Merger shall be consummated pursuant
to the terms of this Agreement, which has been approved and
adopted by the respective Boards of Directors of Morgan and
Regions.
1.2 Time and Place of Closing. The consummation of
the Merger (the "Closing") shall take place at 9:00 A.M. on
the date that the Effective Time occurs (or the immediately
preceding day if the Effective Time is earlier than 9:00 A.M.),
or at such other time as the Parties, acting through their duly
authorized officers, may mutually agree. The place of Closing
shall be at such location as may be mutually agreed upon by the
Parties.
1.3 Effective Time. The Merger and the other
transactions contemplated by this Agreement shall become
effective on the date and at the time the Tennessee Articles
of Merger reflecting the Merger shall become effective with
the Secretary of State of the State of Tennessee and the Delaware
Certificate of Merger reflecting the Merger shall become
effective with the Secretary of State of the State of Delaware
(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 use their
reasonable efforts to cause the Effective Time to occur on
such date as may be designated by Regions within 10 days
following the later to occur of (i) the effective date of
the last required Consent of any Regulatory Authority having
authority over and approving or exempting the Merger (without
regard to any requisite waiting period in respect thereof),
and (ii) the date on which the stockholders of Morgan approve
the matters relating to this Agreement, such date to be
designated by Regions within two business days after the
later to occur of
the foregoing events.
1.4 Execution of Support Agreements. Simultaneously
with the execution of this Agreement and as a condition hereto,
the directors and certain executive officers of Morgan are
executing and delivering to Regions a Support Agreement.
1.5 Execution of the Termination Fee Agreement.
Simultaneously with the execution of this Agreement and as
a condition hereto, Morgan is executing and delivering to
Regions the Termination Fee Agreement.
ARTICLE 2
Terms of Merger
2.1 Certificate of Incorporation. The Certificate
of Incorporation of Regions in effect immediately prior to
the Effective Time shall be the Certificate of Incorporation
of the Surviving Corporation after the Effective Time until
otherwise amended or repealed.
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2.2 Bylaws. The Bylaws of Regions in effect
immediately prior to the Effective Time shall be the Bylaws
of the Surviving Corporation after the Effective Time until
otherwise amended or repealed.
2.3 Directors and Officers. The directors of
Regions in office immediately prior to the Effective Time,
together with such additional persons as may thereafter be
elected, shall serve as the directors of the Surviving
Corporation from and after the Effective Time in accordance
with the Bylaws of the Surviving Corporation. The officers
of Regions in office immediately prior to the Effective Time,
together with such additional persons as may thereafter be
elected, shall serve as the officers of the Surviving
Corporation from and
after the Effective Time in accordance with the Bylaws
of the Surviving Corporation.
ARTICLE 3
Manner of Converting Shares
3.1 Conversion of Shares. Subject to the
provisions of this Article 3, at the Effective Time,
by virtue of the Merger and without any action on the
part of Regions or Morgan, or the stockholders of either
of the foregoing, the shares of the constituent corporations
shall be converted as follows:
(a) Each share of Regions Common Stock issued and
outstanding immediately prior to the Effective Time
shall remain issued and outstanding from and after
the Effective Time.
(b) Each share of Morgan Common Stock, excluding
shares held by any Morgan Company or any Regions Company,
in each case other than in a fiduciary
capacity or as a result of debts previously contracted
("Treasury Shares"), issued and outstanding at the
Effective Time shall cease to be outstanding and shall
be converted into a multiple (rounded to three decimal
places) of a share of Regions Common Stock (the "Merger
Shares") equal to the quotient obtained by dividing
(i) $27.00 by (ii) the Average Price (the "Exchange
Ratio"); provided, subject to the election rights set
forth in Section 3.1(c) of this Agreement, each holder
of Morgan Common Stock shall be provided with an
opportunity to elect to receive cash consideration
for such holder's shares of Morgan Common Stock in
lieu of receiving any Merger Shares.
(c) Holders of Morgan Common Stock shall be
provided with an opportunity to elect to receive cash
consideration in lieu of receiving Merger Shares in
the Merger, in accordance with the election procedures
set forth below. Holders who are to receive cash in
lieu of exchanging their shares of Morgan Common Stock
for Merger Shares as specified below shall receive an
amount in cash (the "Per Share Cash Consideration") in
respect of each share of Morgan Common Stock that is so
converted equal to $27.00. The aggregate amount of cash
that shall be issued in the Merger to satisfy such elections,
together with the cash amounts to be paid pursuant to
Sections 3.4 and 3.5 of this Agreement, shall not exceed
30%, unless and to the extent Regions determines in its
sole discretion to increase such amount to a number not
in excess of 45%, of the sum of (i) the aggregate
consideration paid in exchange for all shares of Morgan
Common Stock in the Merger, and (ii) the cash amounts to
be paid pursuant to Section 3.5(d) of this Agreement
(as possibly increased, the "Aggregate Cash Amount").
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An election form and other appropriate and customary
transmittal materials (which shall specify that delivery
shall be effected, and risk of loss and title to the
certificates theretofore representing Morgan Common Stock
(the "Old Certificates") shall pass, only upon proper
delivery of such Old Certificates to an exchange agent
designated by Regions (the "Exchange Agent")) in such
form as Regions and Morgan shall mutually agree (the
"Election Form") shall be mailed 25 days prior to the
anticipated Effective Time or on such other date as
Morgan and Regions shall mutually agree (the "Mailing
Date") to each holder of record of Morgan Common Stock
as of five business days prior to the Mailing Date (the
"Election Form Record Date").
Each Election Form shall permit a holder (or the
beneficial owner through appropriate and customary
documentation and instructions) of Morgan Common
Stock to elect to receive cash with respect to all
or a portion of such holder's Morgan Common Stock
(shares as to which the election is made being
referred to as "Cash Election Shares").
Any shares of Morgan Common Stock with respect to which the holder (or the
beneficial owner, as the case may be) shall not have
submitted to the Exchange
Agent an effective, properly completed Election Form
on or before 5:00 p.m. on the 20th day following the
Mailing Date (or such other time and date as Regions
and Morgan may mutually agree) (the "Election Deadline")
shall be converted into
Merger Shares as set forth in Section 3.1(b) of this
Agreement (such shares being referred to as "No Election
Shares").
Regions shall make available one or more Election
Forms as may be reasonably requested by all persons who
become holders (or beneficial owners) of Morgan Common
Stock between the Election Form Record Date and the close
of business on the business day prior to the Election
Deadline, and Morgan shall provide to the Exchange Agent
all information reasonably necessary for it to perform
as specified herein.
Any such election shall have been properly made only
if the Exchange Agent
shall have actually received a properly completed Election
Form by the Election
Deadline. An Election Form shall be deemed properly
completed only if accompanied by one or more certificates
(or customary affidavits and indemnification regarding
the loss or destruction of such certificates or the
guaranteed delivery of such certificates) representing
all shares of Morgan Common Stock covered by such Election
Form, together with duly executed transmittal materials
included in the Election Form. Any Election Form may be
revoked or changed by the person submitting such Election
Form at or prior to the Election Deadline. In the event
an Election Form is revoked prior to the Election Deadline,
the shares of Morgan Common Stock represented by such
Election Form shall become No Election Shares and Regions
shall cause the
certificates representing Morgan Common Stock to be promptly
returned without
charge to the person submitting the Election Form upon
written request to that effect from the person who submitted
the Election Form. Subject to the terms of this Agreement
and of the Election Form, the Exchange Agent shall have
reasonable discretion to determine whether any election,
revocation or change has been properly or timely made
and to disregard immaterial defects in the Election Forms,
and any good faith decisions of the Exchange Agent
regarding such matters shall be binding and conclusive.
Neither Regions nor the Exchange Agent shall be under
any obligation to notify any person of any defect in
an Election Form.
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Within five business days after the Election
Deadline, unless the Effective Time has not yet
occurred, in which case as soon thereafter as practicable,
Regions shall cause the Exchange Agent to effect the
allocation among the holders of Morgan Common Stock in
accordance with the Election Forms as follows:
(i) Cash Elections Less Than or Equal To the
Aggregate Cash Amount. If the amount of cash that
would be issued upon conversion in the Merger of
the Cash Election Shares, together with the cash
amounts to be paid pursuant to Sections 3.4 and 3.5
of this Agreement, is less than or equal to the
Aggregate Cash Amount, then:
(1) all Cash Election Shares shall be converted
into the right to receive
the Per Share Cash Consideration, and
(2) the No Election Shares shall be converted
into the right to receive
the Merger Shares.
(ii) Cash Elections More Than the Aggregate Cash
Amount. If the amount
of cash that would be issued upon the conversion in
the Merger of the Cash
Election Shares, together with the cash amounts to
be paid pursuant to
Sections 3.4 and 3.5 of this Agreement, is greater
than the Aggregate Cash
Amount, then:
(1) all No Election Shares shall be converted
into the right to receive
the Merger Shares,
(2) the Exchange Agent shall select from among
the holders of Cash
Election Shares, by random selection (as described below),
holders of a
sufficient number of shares ("Stock Designees") such that
the amount of
cash that will be issued in the Merger equals as closely
as practicable the
Aggregate Cash Amount, and all shares held by the Stock
Designees shall
be converted into the right to receive the Merger Shares,
and
(3) the Cash Election Shares not held by Stock
Designees shall be
converted into the right to receive the Per Share
Cash Consideration.
The random selection process to be used by the
Exchange Agent shall consist of such processes as shall b
e mutually determined by Regions and Morgan.
3.2 Anti-Dilution Provisions. In the event Morgan
changes the number of shares of Morgan Common Stock issued
and outstanding prior to the Effective Time as a result of
a stock split, reverse stock split, stock dividend, or similar
recapitalization with respect to such stock, the Exchange
Ratio and the Per Share Cash Consideration shall be
proportionately adjusted. In the event Regions changes the
number of shares of Regions Common Stock issued and
outstanding prior to the Effective Time as a result of
a stock split, reverse stock split, stock dividend, or
similar recapitalization with respect to such
stock and the record date therefor (in the case of a
stock dividend) or the effective date thereof (in the
case of a stock split or similar recapitalization for
which a record date is not established) shall be prior
to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
3.3 Shares Held by Morgan or Regions. Each
of the shares of Morgan Common Stock held by any Morgan
Company or by any Regions Company, in each case other than
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in a fiduciary capacity or as a result of debts previously
contracted, shall be canceled and retired at the Effective
Time and no consideration shall be issued in exchange therefor.
3.4 Fractional Shares. Notwithstanding any other
provision of this Agreement, each holder of shares of
Morgan Common Stock exchanged pursuant to the Merger who
would otherwise have been entitled to receive a fraction
of a share of Regions Common Stock (after taking into
account all Old Certificates delivered by such holder)
shall receive, in lieu thereof, cash (without interest)
in an amount equal to a fractional part of a share of
Regions Common Stock multiplied by the market value of
one share of Regions Common Stock at the Effective Time.
The market value of one share of Regions Common Stock at
the Effective Time shall be the last sale price of
Regions Common Stock at the close of regular trading on
the Nasdaq NMS (as reported by <IT>The Wall Street
Journal or, if not reported thereby, any other authoritative
source agreed to by Morgan and Regions) on the last trading
day preceding the Effective Time. No such holder will be
entitled to dividends, voting rights, or any other rights
as a stockholder in respect of any fractional shares.
3.5 Conversion of Stock Rights.
(a) At the Effective Time, each award, option, or other
right to purchase or acquire shares of Morgan Common Stock
pursuant to stock options, stock appreciation rights, or
stock awards ("Morgan Rights"), in each case granted by
Morgan under the Morgan Stock Plans, which is outstanding
at the Effective Time, whether or not exercisable, shall,
except as provided in Section 3.5(d) with respect to the
2000 Non-Employee Director Stock Option Plan (the "2000
Director Stock Option Plan"), be converted into and become
rights with respect to Regions Common Stock, and Regions
shall assume each Morgan Right, in accordance with the terms
of the Morgan Stock Plan and stock option agreement by which
it is evidenced, except that from and after the Effective
Time, (i) Regions and its Compensation Committee shall be
substituted for Morgan and the Committee of Morgan's Board
of Directors (including, if applicable, the entire Board of
Directors of Morgan) administering such Morgan Stock Plan,
and (ii) (A) each Morgan Right assumed by Regions may be
exercised solely for shares of Regions Common Stock, (B)
the number of shares of Regions Common Stock subject to
such Morgan Right shall be equal to the number of shares
of Morgan Common Stock subject to such Morgan Right
immediately prior to the Effective Time multiplied by the
Exchange Ratio, and (C) the per share exercise price (or
similar threshold price, in the case of stock awards) under
each such Morgan Right shall be adjusted by dividing the per
share exercise (or threshold) price under each such Morgan
Right by the Exchange Ratio and rounding up to the nearest
cent. Notwithstanding the provisions of clause (ii)(B) of
the preceding sentence, Regions shall not be obligated to
issue any fraction of a share of Regions Common Stock upon
exercise of Morgan Rights and any fraction of a share of
Regions Common Stock that otherwise would be subject to a
converted Morgan Right shall represent the right to receive
a cash payment equal to the product of such fraction and
the difference between the market value of one share of
Regions Common Stock and the per share exercise price of
such Right. The market value of one share of Regions
Common Stock shall be the last sale price of Regions
Common Stock on the Nasdaq NMS (as reported by <IT>The
Wall Street Journal or, if not reported thereby, any
other authoritative source agreed to by Morgan and Regions)
on the last trading day preceding the date of exercise of
the Morgan Right. In addition, notwithstanding the
provisions of clauses (ii)(A) and (ii)(C) of the first
sentence of this Section 3.5, each Morgan Right which is
an "incentive stock option" shall be adjusted as required
by Section 424 of the Internal Revenue Code and the
regulations promulgated thereunder, so as not to
constitute a modification, extension, or renewal of the option,
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within the meaning of Section 424(h) of the Internal
Revenue Code. Regions agrees to take all necessary steps
to effectuate the foregoing provisions of this Section 3.5.
(b) As soon as reasonably practicable after the
Effective Time, Regions shall deliver to the participants
in each Morgan Stock Plan an appropriate notice setting
forth such participant's rights pursuant thereto and the
grants pursuant to such Morgan Stock Plan shall continue
in effect on the same terms and conditions (subject to
the adjustments required by Section 3.5(a) of this
Agreement after giving effect to the Merger), and
Regions shall comply with the terms of each Morgan
Stock Plan to ensure, to the extent required by, and
subject to the provisions of, such Morgan Stock Plan,
that Morgan Rights which qualified as incentive stock
options prior to the Effective Time continue to qualify
as incentive stock options after the Effective Time.
At or prior to the Effective Time, Regions shall take
all corporate action necessary to reserve for issuance
sufficient shares of Regions Common Stock for delivery
upon exercise of Morgan Rights assumed by it in accordance
with this Section 3.5. As soon as reasonably practicable
(but in no event more than 45 days) after the Effective
Time, Regions shall file a registration statement on Form
S-3 or Form S-8, as the case may be (or any successor or
other appropriate forms), with respect to the shares of
Regions Common Stock subject to such options and shall
use its reasonable efforts to maintain the effectiveness
of such registration statements (and maintain the current
status of the prospectus or prospectuses contained therein)
for so long as such options remain outstanding. With
respect to those individuals who subsequent to the Merger
will be subject to the reporting requirements under
Section 16(a) of the 1934 Act, where applicable, Regions
shall administer the Morgan Stock Plan assumed pursuant
to this Section 3.5 in a manner that complies with Rule
16b-3 promulgated under the 1934 Act.
(c) All restrictions or limitations on transfer
with respect to Morgan Common Stock awarded under
the Morgan Stock Plans or any other plan, program,
or arrangement of any Morgan Company, to the extent
that such restrictions or limitations shall not have
already lapsed, and except as otherwise expressly
provided in such plan, program, or arrangement, shall
remain in full force and effect with respect to shares
of Regions Common Stock into which such restricted
stock is converted pursuant to Section 3.1 of this Agreement.
(d) At the Effective Time, each holder of a Morgan
Right granted by Morgan under the 2000 Director Stock
Option Plan which is outstanding at the Effective Time,
whether or not exerciseable, shall be entitled to receive
upon surrender of such Morgan Right a check in the amount
equal to the difference (if positive) between (i) the
"Change of Control Price" as defined in Section 6 of the
2000 Director Stock Option Plan, and (ii) the exercise
price of such Morgan Right. The Parties agree that the
"Change of Control Price" shall equal the Per Share
Cash Consideration.
ARTICLE 4
Exchange of Shares
4.1 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 Certificates, for exchange in
accordance with Article 3 of this Agreement and this
Article 4, certificates representing the Merger Shares
("New Certificates") and an estimated amount of cash
(such cash and New Certificates, together with any
dividends or distributions with respect thereto (without
any interest thereon), being hereinafter
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referred to as
the "Exchange Fund") to be paid pursuant to Article 3 of
this Agreement and this Article 4 in exchange for
outstanding shares of Morgan 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 (other than
Cash Election Shares or Treasury Shares) of Morgan
Common Stock immediately prior to the Effective Time,
transmittal materials for use in exchanging such
stockholder's Old Certificates for the consideration
set forth in Article 3 of this Agreement (which shall
specify that delivery shall be effected, and risk of
loss and title to the certificates theretofore
representing shares of Morgan Common Stock shall pass,
only upon proper delivery of such certificates to the
Exchange Agent). Regions shall cause the New Certificates
or check in respect of the Per Share Cash Consideration
into which shares of a stockholder's Morgan Common Stock
are converted at the Effective Time and any fractional
share interests or dividends or distributions which
such person shall be entitled to receive to be delivered
to such stockholder upon delivery to the Exchange Agent
of Old Certificates representing such shares of Morgan
Common Stock. No interest will be paid on any such cash
to be paid pursuant to Article 3 and this Article 4
upon such delivery.
(c) Notwithstanding the foregoing, neither the
Exchange Agent nor any Party hereto shall be liable to
any former holder of Morgan Common Stock for any amount
properly delivered to a public official pursuant to
applicable abandoned property, escheat or similar laws.
(d) Any portion of the Exchange Fund that remains
unclaimed by the stockholders of Morgan for 12 months
after the Effective Time shall be paid to Regions. Any
stockholders of Morgan who have not theretofore complied
with this Article 4 shall thereafter look only to Regions
for payment of the consideration deliverable in respect of
each share of Morgan Common Stock such stockholder holds as
determined pursuant to this Agreement, in each case, without
any interest thereon.
4.2 Rights of Former Morgan Stockholders. At the
Effective Time, the stock transfer books of Morgan shall be
closed as to holders of Morgan Common Stock immediately prior
to the Effective Time and no transfer of Morgan Common Stock
by any such holder shall thereafter be made or recognized.
Until surrendered for exchange in accordance with the
provisions of Section 4.1 of this Agreement, each certificate
theretofore representing shares of Morgan Common Stock (other
than shares to be canceled pursuant to Section 3.3 of this
Agreement) shall from and after the Effective Time represent
for all purposes only the right to receive the consideration
provided in Sections 3.1 and 3.4 of this Agreement in exchange
therefor, subject, however, to the Surviving Corporation's
obligation to pay any dividends or make any other distributions
with a record date prior to the Effective Time which have been
declared or made by Morgan in respect of such shares of Morgan
Common Stock in accordance with the terms of this Agreement
and which remain unpaid at the Effective Time. To the extent
permitted by Law, former stockholders of record of Morgan 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 Morgan
Common Stock are converted, regardless of whether such holders
have exchanged their certificates representing Morgan Common
Stock for New Certificates representing Regions Common Stock
in accordance with the provisions of this Agreement. Whenever
a dividend or other distribution is declared by Regions on
the 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 issuable
pursuant to this Agreement,
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but beginning 30 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 any certificate
representing shares of Morgan Common Stock issued and
outstanding at the Effective Time until such holder surrenders
such certificate for exchange as provided in Section 4.1 of
this Agreement. However, upon surrender of the Old Certificate,
both the New Certificate (together with all such undelivered
dividends or other distributions without interest) and any
undelivered
dividends and cash payments to be paid for fractional share
interests (without interest) shall be delivered and paid with
respect to each share represented by such certificate. In
the event any Morgan Common Stock certificate shall have
been lost, stolen, or destroyed, upon the making of an
affidavit of that fact by the person claiming such certificate
to be lost, stolen, or destroyed and, if required by Regions,
the posting by such person of a bond in such amount as
Regions may reasonably direct as indemnity against any claim
that may be made against it with respect to such certificate,
the Exchange Agent shall issue in
exchange for such lost, stolen, or destroyed certificate,
the consideration deliverable in respect thereof pursuant
to this Agreement.
ARTICLE 5
Representations and Warranties of Morgan
Morgan hereby represents and warrants, except as specifically
disclosed in a section of the Morgan Disclosure Memorandum
corresponding to the relevant section of this Article 5, to
Regions as follows:
5.1 Organization, Standing, and Power. Morgan is a
corporation duly organized, validly existing, and in good standing
under the Laws of the State of Tennessee, and has the corporate
power and authority to carry on its business as now conducted and
to own, lease, and operate its material assets. Morgan is duly
qualified or licensed to transact business as a foreign corporation
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, except for such jurisdictions in which the
failure to be so qualified or licensed is not reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on Morgan.
5.2 Authority; No Breach of Agreement. (a) Morgan
has the corporate power and authority necessary to execute,
deliver, and perform its obligations under this Agreement and
to consummate the transactions contemplated hereby. The execution,
delivery, and performance of this Agreement, and the consummation
of the transactions contemplated herein, including the Merger,
have been duly and validly authorized by all necessary corporate
action (including valid authorization and adoption of this
Agreement by Morgan's duly constituted Board of Directors) in
respect thereof on the part of Morgan, subject to the approval
of this Agreement by the holders of a majority of the shares of
Morgan Common Stock entitled to vote thereon, which is the only
stockholder vote required for approval of this Agreement and
consummation of the Merger by Morgan.
Subject to such requisite stockholder approval and assuming
due authorization, execution, and delivery of this Agreement
by Regions, this Agreement represents a legal, valid, and
binding obligation of Morgan, enforceable against Morgan 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
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the equitable remedy of specific performance or injunctive
relief is subject to the discretion
of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement
by Morgan, nor the consummation by Morgan of the transactions
contemplated hereby, nor compliance by Morgan with any of the
provisions hereof, will (i) conflict with or result in a breach
of any provision of Morgan's Restated Charter or Bylaws, or (ii)
constitute or result in a Default under, or require any Consent
pursuant to, or result in the creation of any Lien on any asset
of any Morgan Company under, any Contract or Permit of any Morgan
Company, where such Default or Lien, or any failure to obtain
such Consent, is reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Morgan, or (iii)
subject to receipt of the requisite Consents referred to in
Section 9.1(b) of this Agreement, violate any Law or Order
applicable to any Morgan Company or any of their respective
material assets, which violation is reasonably likely to
have, individually or in the aggregate, a Material Adverse
Effect on Morgan.
(c) Other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate
and securities Laws, and other than Consents required from
Regulatory Authorities, and other than notices to or filings
with the Internal Revenue Service or the Pension Benefit
Guaranty Corporation or both with respect to any employee
benefit plans, or under the HSR Act, and other than Consents,
filings, or notifications which, if not obtained or made, are
not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on Morgan, no notice to, filing with,
or Consent of, any public body or authority is necessary for
the consummation by Morgan of the Merger and the other
transactions contemplated in this Agreement.
5.3 Capital Stock. (a) The authorized capital
stock of Morgan consists, as of the date of this Agreement,
of 100,000,000 shares of Morgan Common Stock, of which, as
of the date of this Agreement, (i) 28,562,566 shares were
issued and outstanding, including 2,009,935 shares of
restricted Morgan Common Stock, and (ii) 666,625 shares of
Morgan Common Stock were issuable pursuant to outstanding
awards under Morgan's Stock Plans, and not more than
29,229,191 shares of Morgan Common Stock (excluding shares
issued pursuant to Permitted Issuances) will be issued and
outstanding at the Effective Time. All
of the issued and outstanding shares of Morgan Common Stock
are duly and validly issued and outstanding and are fully
paid and, except as expressly provided otherwise under
applicable Law, nonassessable under the TBCA. None of the
outstanding shares of Morgan Common Stock has been issued
in violation of any preemptive rights of the current or
past stockholders of Morgan.
(b) Except as set forth in Section 5.3(a) of this
Agreement or Section 5.3(b) of the Morgan Disclosure Memorandum,
there are no shares of capital stock or other equity
securities of Morgan outstanding and no outstanding Rights
relating to the capital stock of Morgan.
5.4 Morgan Subsidiaries. Morgan has disclosed
in Section 5.4 of the Morgan Disclosure Memorandum all of
the Morgan Subsidiaries as of the date of this Agreement.
Except as set forth in Section 5.4 of the Morgan Disclosure
Memorandum, Morgan or one of its Subsidiaries owns all of
the issued and outstanding shares of capital stock of each
Morgan Subsidiary. No equity securities of any Morgan Subsidiary
are or may become required to be issued (other than to another
Morgan Company) by reason of any Rights, and there are no
Contracts by which any Morgan Subsidiary is bound to issue
(other than to another Morgan Company) additional shares of
its capital stock or Rights or by which
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any Morgan Company
is or may be bound to transfer any shares of the
capital stock of any Morgan Subsidiary (other than
to another Morgan Company). There are no Contracts relating
to the rights of any Morgan Company to vote or to dispose
of any shares of the capital stock of any Morgan Subsidiary.
All of the shares of capital stock of each Morgan
Subsidiary held by a Morgan Company are fully paid and,
except as expressly provided otherwise under applicable
Law, nonassessable under the applicable corporate or
banking Law of the jurisdiction in which such Subsidiary
is incorporated or organized and are owned by the Morgan
Company free and clear of any Lien. Each Morgan Subsidiary
is either a savings and loan association or a corporation,
and is duly organized, validly
existing, and (as to corporations) in good standing under
the Laws of the jurisdiction in which it is incorporated
or organized, and has the corporate power and authority
necessary for it to own, lease, and operate its assets and
to carry on its business as now conducted. Each Morgan
Subsidiary is duly qualified or licensed to transact business
as a foreign corporation 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, except
for such jurisdictions in which the failure to be so qualified
or licensed is not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Morgan.
Each Morgan Subsidiary that is a depository institution is
an "insured depository institution" as defined in the Federal
Deposit Insurance Act and applicable regulations thereunder,
and the deposits in which are insured by the Bank Insurance
Fund or Savings Association Insurance Fund to the fullest
extent permitted by Law. The minute book and other
organizational documents (and all amendments thereto) for
Morgan and each Morgan Subsidiary that is a "Significant
Subsidiary" (as such term is defined in Regulation S-X
promulgated under the 1934 Act) have been or will be made
available to Regions for its review, and are true and complete
as in effect as of November 30, 2000. No material actions
have been taken by Morgan's Board of Directors since such
date, other than such actions taken in contemplation of
the execution of this Agreement and the consummation of
the transactions contemplated herein, and actions related
to matters described in the Morgan Disclosure Memorandum.
Except for (i) interests in the Morgan Subsidiaries, (ii)
trading account securities, securities held available for
sale, client margin agreements, securities acquired
pursuant to underwriting
agreements in which Morgan participated as an underwriter
or dealer and securities acquired as a result of debts
owing to Morgan or the Morgan Subsidiaries by their
customers, securities acquired in arbitrage, hedging,
options or forward or futures contracts, or transactions
or arrangements or securities clearance and settlement
activities, or (iii) as set forth in Section 5.4 of the
Morgan Disclosure Memorandum, Morgan does not own,
directly or indirectly (through any Morgan Subsidiary or
otherwise), any capital stock,
membership interest, partnership interest, joint venture
interest or other equity interest in any Person.
5.5 SEC Filings; Financial Statements. (a) Morgan
and each Morgan Subsidiary has filed and made available to
Regions all forms, reports, and documents required to be
filed by Morgan or such Morgan Subsidiary with the SEC since
December 31, 1995 (collectively, the "Morgan SEC Reports").
The Morgan SEC Reports (i) at the time filed, complied in all
material respects with the applicable requirements of the
Securities Laws, and (ii) did not at the time they were filed
(or if amended or superseded by a filing prior to the date of
this Agreement, then on the date of such filing) contain any
untrue statement of a material fact or omit to state a material
fact required to be stated in such
Morgan SEC Reports or necessary in order to make the statements
in such Morgan SEC Reports, in light of the circumstances under
which they were made, not misleading.
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(b) Each of the Morgan Financial Statements (including,
in each case, any related notes) contained in the Morgan SEC
Reports, including any Morgan SEC Reports filed after the
date of this Agreement until the Effective Time, complied or
will comply as to form in all material respects with the
applicable requirements of the Securities Laws with respect
thereto, was prepared or will be prepared in accordance with
GAAP throughout the periods involved (except as may be
indicated in the notes to such financial statements, or,
in the case of unaudited statements, as permitted by Form
10-Q of the SEC), and fairly presented or will fairly
present the consolidated financial position of Morgan
and its Subsidiaries as at the respective dates and the
consolidated results of its operations and cash flows for
the periods indicated, except that the unaudited interim
financial statements were or are subject to normal and
recurring year-end adjustments which were not or are not
expected to be material in amount or effect.
5.6 Absence of Undisclosed Liabilities. No
Morgan Company has any Liabilities that are reasonably
likely to have, individually or in the aggregate, a
Material Adverse Effect on Morgan, except Liabilities
which are accrued or reserved against in the consolidated
balance sheets of Morgan as of October 31, 2000,
included in the Morgan Financial Statements or reflected
in the notes thereto, Liabilities incurred in the
ordinary course of business subsequent to October 31, 2000,
and Liabilities to be incurred in connection with the
transactions contemplated by this Agreement. No Morgan
Company has incurred or paid any Liability since October
31, 2000, except for such Liabilities incurred or paid
in the ordinary course of business consistent with past
business practices and which are not reasonably likely
to have, individually or in the aggregate, a Material
Adverse Effect on Morgan.
5.7 Absence of Certain Changes or Events. Since
October 31, 2000, except as disclosed in the Morgan
Financial Statements delivered prior to the date of
this Agreement or as otherwise disclosed in the Morgan
Disclosure Memorandum, there have been no events,
changes, or occurrences which have had, or are reasonably
likely to have, individually or in the aggregate, a
Material Adverse Effect on Morgan.
5.8 Tax Matters. Except as set forth in Section
5.8 of the Morgan Disclosure Memorandum:
(a) Since December 31, 1994, all material Tax Returns
required to be filed by or on behalf of any of the Morgan
Companies have been timely filed, or requests for extensions
have been timely filed, granted, and have not expired for
periods ended on or before December 31, 1999, and all Tax
Returns filed are complete and accurate in all material
respects. All Tax Returns for periods ending on or before
the date of the most recent fiscal year end immediately
preceding the Effective Time will be timely filed or requests
for extensions will be timely filed. All Taxes shown on
filed Tax Returns have been paid. There is no audit
examination, deficiency, or refund Litigation with respect
to any Taxes, that is reasonably likely to result in a
determination that would have, individually or in the aggregate,
a Material Adverse Effect on Morgan, except to the extent
reserved against in the Morgan Financial Statements dated
prior to the date of this Agreement. All material Taxes due
with respect to completed and settled examinations or
concluded Litigation with respect to Taxes have been paid.
(b) None of the Morgan Companies has executed an
extension or waiver of any statute of limitations on the
assessment or collection of any Tax due (excluding such
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statutes that relate to years currently under examination
by the Internal Revenue Service or other applicable taxing
authorities) that is currently in effect.
(c) Adequate provision for any material Taxes due for
any of the Morgan
Companies for the period or periods through and including
the date of the respective Morgan Financial Statements
has been made in accordance with GAAP and is reflected
on such Morgan Financial Statements.
(d) Each of the Morgan Companies is in material compliance
with, and its
records contain the information and documents (including properly
completed IRS
Forms W-9) necessary to comply with, in all material respects,
applicable information reporting and Tax withholding requirements
under federal, state, and local Tax Laws, and such records
identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code.
(e) None of the Morgan Companies has made any payments,
is obligated to
make any payments, or is a party to any contract, agreement,
or other arrangement that could obligate it to make any payments
that would be disallowed as a deduction under Section 280G of
the Internal Revenue Code.
(f) There are no Material Liens with respect to Taxes
upon any of the assets of the Morgan Companies.
(g) No Morgan Company has filed any consent under
Section 341(f) of the
Internal Revenue Code concerning collapsible corporations.
5.9 Assets. The Morgan Companies have good and
marketable title, free and clear of all Liens, to all of their
respective assets other than such defects and liens which are
not reasonably likely to have a Material Adverse Effect on
Morgan. All tangible properties used in the businesses of the
Morgan Companies are in good condition, reasonable wear and
tear excepted, and are usable in the ordinary course of business
consistent with Morgan's past practices, except as would not be
reasonably likely to have a Material
Adverse Effect on Morgan. All assets which are material to
Morgan's business on a consolidated basis, held under leases
or subleases by any of the Morgan Companies, are held under
valid Contracts enforceable in accordance with their respective
terms (except as enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or other
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 proceedings may be brought),
and each such Contract is in full force and effect. The
Morgan Companies currently maintain insurance in amounts,
scope and coverage reasonably necessary for their
operations. Except as set forth in Section 5.9 of the Morgan
Disclosure Memorandum, none of the Morgan Companies has received
notice from any insurance carrier that (i) such insurance
will be canceled or that coverage thereunder will be
materially reduced or eliminated, or (ii) premium costs
with respect to such policies of insurance will be
substantially
increased. The assets of the Morgan Companies include
all material
assets required to operate the business of the Morgan
Companies as presently conducted.
5.10 Environmental Matters. (a) Each Morgan
Company is and has been, in compliance with all Environmental
Laws, except those instances of non-compliance which are not
reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on Morgan.
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(b) There is no Litigation pending or, to the
Knowledge of Morgan, threatened before any court, governmental
agency, or authority, or other forum in which any Morgan Company
or site owned, leased, or operated by any Morgan Company (the
"Morgan Properties") has been or, with respect to threatened
Litigation, may reasonably be expected to be named as a
defendant (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law, or (ii) relating
to the release into the environment of any Hazardous Material,
whether or not occurring at, on, under, or involving a Morgan
Property, except for such Litigation pending or threatened
that is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on
Morgan.
(c) There is no Litigation pending, or to the Knowledge
of Morgan, threatened before any court, governmental agency, or
board, or other forum in which any of the Morgan Properties
has been or, with respect to threatened Litigation, may reasonably
be expected to be named as a defendant or potentially responsible
party (i) for alleged noncompliance (including by any predecessor)
with any Environmental Law, or (ii) relating to the release into
the environment of any Hazardous Material, whether or not occurring
at, on, under, or involving a Morgan Property, except for such
Litigation pending or threatened that is not reasonably likely
to have, individually or in the aggregate, a Material Adverse
Effect on Morgan.
(c) To the Knowledge of Morgan, there is no reasonable
basis
for any Litigation of a type described in subsections (b)
or (c), except such as is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Morgan.
(d) To the Knowledge of Morgan, during the period of
any Morgan Company's
ownership or operation of any of the Morgan Properties,
there have been no releases of Hazardous Material in, on,
under, or affecting (or potentially affecting) such properties,
except such as are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Morgan.
Prior to the period of any Morgan Company's ownership or
operation of any of the Morgan Properties, to the Knowledge
of Morgan, there were no releases of Hazardous Material in,
on, under, or affecting any such property, except such as
are not reasonably likely to have, individually or in the
aggregate, a
Material Adverse Effect on Morgan.
5.11 Permits. (a) Each Morgan Company has
in effect all Permits necessary for it to own, lease,
or operate its material assets and to carry on its
business as now conducted, except for those Permits the
absence of which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse
Effect on Morgan, and there has occurred no Default under
any such Permit, other than Defaults which are not reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on Morgan.
(b) All officers, directors, and employees of Morgan
and the Morgan Subsidiaries that are required, as a result
of their positions with Morgan and/or the Morgan Subsidiaries,
to be registered or licensed with the SEC, the NASD, or the
NYSE are currently registered or licensed in the appropriate
capacity with the SEC, the NASD, or the NYSE and all such
registrations and licenses are in full force and effect and
no suspension or cancellation of any of them is pending or,
to the Knowledge of Morgan, threatened. Morgan has delivered
or made available to Regions a true and complete copy of each
Form ADV or BD of Morgan and each Morgan Subsidiary as most
recently filed or amended prior to the date of this Agreement
(the "Current Forms") with the SEC, all
other state and federal registration forms filed with the SEC,
the NASD, or the NYSE, all
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reports and all material correspondence
filed by Morgan or any Morgan Subsidiary with the SEC, the NASD,
or the NYSE under the Investment Company Act or the Investment
Advisers Act and the rules promulgated thereunder and under
similar state and federal statutes since January 1, 1998, and
Morgan will deliver or make available to Regions such forms
and reports as are filed from and after the date hereof and
prior to the Effective Time. The information contained in
such forms and reports was (or will be, in the case of any
forms and reports filed after the date of this Agreement)
complete and accurate in all material respects as of the
time of filing thereof.
(c) Section 5.11 of the Morgan Disclosure Memorandum sets
forth all Permits held by Morgan or a Morgan Subsidiary that
are issued or granted by (i) the AMEX, the CBOE, the CSE, the
NASD, the NYFE, the NYSE, the PHLX, the SEC, the SIA, or the
SIPC, (ii) any state securities or blue sky authority,
or (iii) any other Regulatory Authority, and which, in any
case, the absence of which is reasonably likely to have a
Material Adverse Effect on Morgan.
(d) Morgan has made available to Regions true and
correct copies of (i) each Form G-37/G-38 filed with the MSRB
since January 1, 1998, and (ii) all records required to be kept
by Morgan and the Morgan Subsidiaries under Rule G-8(a)(xvi) of
the MSRB. Since January 1, 1998, there have been no contributions
or payments, and there is no other information, that would be
required to be disclosed by Morgan or any of the Morgan Subsidiaries
on any such Form G-37/G-38 or recorded by Morgan or any such
Morgan Subsidiary pursuant to such rule.
5.12 Compliance with Laws. (a) None of the Morgan
Companies is in violation of any Laws, Orders, or Permits
applicable to its business or employees conducting its business,
except for violations which are not reasonably likely to have,
individually or in
the aggregate, a Material Adverse Effect on Morgan.
(b) None of the Morgan Companies has received any
notification or communication from any agency or department
of federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that any Morgan
Company is not in compliance with any of the Laws or Orders
which such governmental authority or Regulatory Authority
enforces, where such noncompliance is reasonably likely to
have, individually or in the aggregate, a Material Adverse
Effect on Morgan, (ii) threatening to revoke any Permits,
the revocation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect
on Morgan, or (iii) requiring any Morgan Company (x) to enter
into or consent to the issuance of a cease and desist order,
formal agreement, directive, commitment, or memorandum of
understanding, or (y) to adopt any board resolution or similar
undertaking, which restricts materially the conduct of its
business, or in any material manner relates to its capital
adequacy, its credit or reserve policies, its management, or
the payment of dividends.
(c) Neither Morgan nor any of the Morgan Subsidiaries,
nor, to Morgan's
Knowledge, any of their respective officers, directors, or
employees, has been the subject of any disciplinary proceeding
or order of any Regulatory Authority which would be required to
be disclosed on SEC Forms ADV or BD except as disclosed therein,
and no such disciplinary proceeding or order is pending or, to
the Knowledge of Morgan, threatened; and, except as disclosed
on the Current
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Forms, neither Morgan nor any of the Morgan Subsidiaries, nor
any of their respective officers, directors or employees, has
been permanently enjoined by any Regulatory Authority from engaging
in or continuing any conduct or practice in connection with any
activity required to be disclosed in the Current Forms or in
connection with the purchase or sale of any security. Except as
disclosed on the Current Forms, neither Morgan nor any of the
Morgan Subsidiaries, nor any of their respective officers, directors
or employees, is or has been ineligible to serve as, or subject to
any disqualification which would result in any denial, suspension
or revocation of the registration of, or any limitation on the
activities of Morgan or any of the Morgan Subsidiaries as, an
investment adviser under the provisions of the Investment Advisers
Act, or as a broker-dealer under the 1934 Act, or ineligible to
serve in, or subject to any disqualification which would be the
basis for any limitation on serving in, any of the capacities
specified in Section 9(a) or 9(b) of the Investment Company Act.
(d) Neither Morgan nor any of the Morgan Subsidiaries,
nor any "associated person" (as defined in the 1934 Act) thereof,
is subject to a "statutory disqualification" as defined in
Section 3(a)(39) of the 1934 Act or otherwise ineligible to
serve as a broker-dealer or as an associated person to a
registered broker-dealer.
5.13 Labor Relations. No Morgan Company is the subject
of any Litigation asserting that it or any other Morgan Company
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 other Morgan Company to bargain with any
labor organization as to wages or conditions of employment, nor
is any Morgan Company 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 any Morgan Company, pending or,
to the Knowledge of Morgan, threatened, or to the Knowledge of
Morgan, is there any activity involving any Morgan Company's
employees seeking to certify a collective bargaining unit or
engaging in any
other organization activity.
5.14 Employee Benefit Plans. (a) Morgan has
disclosed in Section 5.14 of the Morgan Disclosure Memorandum,
and has delivered or made available to Regions prior to the
execution of this Agreement correct and complete copies in each
case of, all Morgan Benefit Plans. For purposes of this Agreement,
"Morgan Benefit Plans" means all material written pension,
retirement, profit-sharing, deferred compensation, stock option,
employee stock ownership, severance pay, vacation, bonus, or
other incentive plan, all other material written employee
programs or agreements, all medical, vision, dental, or other
written health plans, all life insurance plans, and all other
material written employee benefit plans or fringe benefit plans,
including written "employee benefit plans" as that term is
defined in Section 3(3) of ERISA maintained by, sponsored in
whole or in part by, or contributed to by, any Morgan Company
for the benefit of employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries and
under which employees, retirees, dependents, spouses, directors,
independent contractors, or other beneficiaries are eligible to
participate. Any of the Morgan Benefit Plans 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, is referred
to herein as a "Morgan ERISA Plan." Any Morgan ERISA Plan which
is also subject to Section 412 of the Internal Revenue Code or
Section 302 of ERISA, is referred to herein as a "Morgan Pension
Plan." Neither Morgan nor any Morgan Company has an "obligation
to contribute" (as defined in ERISA Section 4212) 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, ever maintained by any Morgan Company,
that was intended to qualify under Section 401(a) of the Internal
Revenue Code is disclosed as such in Section 5.14 of the Morgan
Disclosure Memorandum.
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(b) Morgan has delivered or made available to Regions
prior to the execution of this Agreement correct and complete
copies of the following documents: (i) all trust agreements or
other funding arrangements for such Morgan Benefit Plans (
including insurance contracts), and all amendments thereto,
(iii) with respect to any such Morgan 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 Pension Benefit Guaranty Corporation
after December 31, 1994, (iii) annual reports or returns, audited
or unaudited financial statements, actuarial valuations and reports,
and summary annual reports prepared for any Morgan Benefit Plan
with respect to the most recent plan year and (iv) the most recent
summary plan descriptions and any material modifications thereto.
(c) All Morgan Benefit Plans are in compliance with the
applicable terms of ERISA, the Internal Revenue Code, and any
other applicable Laws, other than instances of noncompliance which
are not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on Morgan. Each Morgan ERISA Plan 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, and to the Knowledge of Morgan, there are
no circumstances likely to result in revocation of any such favorable
determination letter. Each trust created under any Morgan ERISA Plan
has been determined to be exempt from Tax under Section 501(a) of the
Internal Revenue Code and Morgan is not aware of any circumstance
which will or could reasonably result in revocation of such exemption.
With respect to each Morgan Benefit Plan to the Knowledge of Morgan,
no event has occurred which will or could reasonably give rise to a
loss of any
intended Tax consequences under the Internal Revenue Code or to any
Tax under
Section 511 of the Internal Revenue Code that is reasonably likely,
individually or in the aggregate, to have a Material Adverse Effect
on Morgan. There is no material pending or, to the Knowledge of Morgan, threatened Litigation relating to any Morgan ERISA Plan.
(d) No Morgan Company has engaged in a transaction with
respect to any Morgan Benefit Plan that, assuming the Taxable
Period of such transaction expired as of the date of this Agreement,
would subject any Morgan Company to a material tax or penalty
imposed by either Section 4975 of the Internal Revenue Code or
Section 502(i) of ERISA in amounts which are reasonably likely
to have, individually or in the aggregate, a Material Adverse
Effect on Morgan. Neither Morgan nor, any administrator or fiduciary
of any Morgan Benefit Plan (or any agent of any of the foregoing)
has engaged in any transaction, or acted or failed to act in any
manner with respect to any Morgan Benefit Plan which could subject
Morgan to any direct or indirect Liability (by indemnity or
otherwise) for breach of any fiduciary, co-fiduciary, or other
duty under ERISA, where such Liability, individually or in the
aggregate, is reasonably likely to have a Material Adverse Effect
on Morgan. No oral or written representation or communication
with respect to any aspect of the Morgan Benefit Plans has been
made to employees of any Morgan Company which is not in conformity
with the written or otherwise preexisting terms and provisions of
such plans, where any Liability resulting from such non-conformity
is reasonably likely to have a Material Adverse Effect on Morgan.
(e) No Morgan Pension Plan has any "unfunded current
liability," as that term is defined in Section 302(d)(8)(A) of
ERISA, and the fair market value of the assets of any such plan
is equal to or exceeds the actuarial present value of all accrued
benefits under such plans (whether vested or not), based upon the
actuarial assumptions used to
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prepare the most recent actuarial
reports for such pans and to the Knowledge of Morgan,
since the date of the most recent actuarial valuation,
no event has occurred which would be reasonably expected
to change any such funded status in a way that is
reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on Morgan. Neither any Morgan
Pension Plan nor any "single-employer plan," within the
meaning of Section 4001(a)(15) of ERISA, currently
maintained by any Morgan Company, or the single-employer
plan of any entity which is considered one employer with
Morgan under
Section 4001 of ERISA or Section 414 of the Internal Revenue
Code or Section 302 of ERISA (whether or not waived)
(a "Morgan ERISA Affiliate") has an "accumulated funding
deficiency" within the meaning of Section 412 of the Internal
Revenue Code or Section 302 of ERISA. All required contributions
with respect to an Morgan Pension Plan or any single-employer
plan of an Morgan ERISA Affiliate have been timely made and
there is no lien or 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. No Morgan Company has provided, or
is required to provide, security to an Morgan Pension Plan or
to any single-employer plan of an Morgan ERISA Affiliate pursuant
to Section 401(a)(29)
of the Internal Revenue Code. All premiums required to be paid
under ERISA
Section 4006 have been timely paid by Morgan, except to the
extent any failure to timely pay would not have a Material
Adverse Effect on Morgan.
(f) No Liability under Title IV of ERISA has been or
is expected to be incurred by any Morgan Company with respect
to any defined benefit plan currently or formerly maintained
by any of them or by any Morgan ERISA Affiliate that has not
been satisfied in full (other than Liability for Pension
Benefit Guaranty Corporation premiums, which have been paid
when due, except for Liabilities that, individually or in
the aggregate, would not have a Material Adverse Effect on Morgan).
(g) No Morgan Company has any obligations for retiree
health and retiree life benefits under any of the Morgan
Benefit Plans other than with respect to benefit coverage
mandated by applicable Law.
(h) Except as set forth in Section 5.14 of the Morgan
Disclosure Memorandum, neither the execution and delivery of
this Agreement nor the consummation of the transactions
contemplated hereby will, by themselves, (i) result in any
payment (including, without limitation, severance, golden
parachute, or otherwise) becoming due to any director or any
employee of any Morgan Company from any Morgan Company under
any Morgan Benefit Plan or otherwise, other than by operation
of Law, (ii) increase any benefits otherwise payable under any
Morgan Benefit Plan, or (iii) result in any acceleration of the
time of payment or vesting of any such benefit.
5.15 Material Contracts. (a) Except as set forth in
the Morgan Disclosure Memorandum and except for Contracts filed
as exhibits to Morgan's Form 10-K for the fiscal year ended July
31, 2000, as of the date of this Agreement, none of the Morgan
Companies, nor any of their respective assets, businesses, or
operations, is a party to, or is bound or affected by, or receives
benefits under, (i) any employment, severance, termination,
consulting, or retirement Contract providing for aggregate
payments to any
Person in any calendar year in excess of $150,000, (ii) any
Contract relating to the borrowing of money by any Morgan Company
or the guarantee by any Morgan Company 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),
and (iii) any other Contract or amendment thereto that would
be required to be filed as an exhibit to a Form 10-K filed by
Morgan with the
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SEC that has not been filed as an exhibit to Morgan's Form
10-K filed for the fiscal year ended July 31, 2000 or on another
SEC Document and identified to Regions (together with all
Contracts referred to in Sections 5.9 and 5.14 (a) of this
Agreement, the "Morgan Contracts"). With respect to each Morgan
Contract: (i) the Contract is in full force and effect; (ii) no
Morgan Company is in Default thereunder, other than Defaults
which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Morgan; (iii) no Morgan
Company has repudiated or waived any material provision of any
such Contract; and (iv) no other party to any such Contract is,
to the Knowledge of Morgan, in Default in any material respect,
other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Morgan.
Except as set forth in Section 5.15 of the Morgan Disclosure
Memorandum, all of the indebtedness of any Morgan Company for
money borrowed is prepayable at any time by such Morgan Company
without penalty or premium.
5.16 Legal Proceedings. (a) There is no Litigation
instituted or pending, or, to the Knowledge of Morgan, threatened
against any Morgan Company, or against any asset, interest, or
right of any of them, that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect
on Morgan, nor are there any Orders of any Regulatory Authorities,
other governmental authorities, or arbitrators outstanding
against any Morgan Company, that are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Morgan.
(b) Section 5.16(b) of the Morgan Disclosure Memorandum
includes a summary
report of all Litigation as of the date of this Agreement
to which any Morgan Company is a party and which names a
Morgan Company as a defendant or cross-defendant.
5.17 Reports. Since December 31, 1995, or the date
of organization if later, each Morgan Company has timely filed
all reports and statements, together with any amendments
required to be made with respect thereto, that it was required
to file with any Regulatory Authorities, except failures to
file which are not reasonably likely to have, individually
or in the aggregate,
a Material Adverse Effect on Morgan.
5.18 Statements True and Correct. None of the
information supplied or to be supplied by any Morgan Company
or any Affiliate thereof regarding Morgan or such Affiliate
for inclusion in the Registration Statement to be filed by
Regions with the SEC will, when the Registration Statement
becomes effective, contain any untrue statement of a material
fact, or omit to state any material fact required to be stated
thereunder or necessary to make the statements therein, in
light of the circumstances under which they were made, not
misleading. None of the information supplied or to be supplied
by any Morgan Company or any Affiliate thereof for inclusion in
the Proxy Statement to be
mailed to Morgan's stockholders in connection with the
Stockholders' Meeting will, when first mailed to the
stockholders of Morgan, contain any misstatement of
material fact, or omit to state any material fact required
to be stated thereunder or necessary to make the statements
therein, in light of the circumstances under which they were
made, not misleading, or, in the case of the Proxy Statement
or any amendment thereof or supplement thereto, at the time
of the Stockholders' Meeting, omit to state any material fact
required to be stated thereunder or necessary to correct any
material statement in any earlier communication with respect
to the solicitation of any proxy for the Stockholders'
Meeting. All documents that any Morgan Company or any
Affiliate thereof is responsible for filing with any Regulatory
Authority in connection with the transactions contemplated
hereby will comply as to form in all material respects with
the provisions of applicable Law.
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5.19 Tax and Regulatory Matters. No Morgan Company
or any Affiliate thereof has taken or agreed to take any
action, and Morgan has no Knowledge of any fact or circumstance
that is reasonably likely 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 delay receipt of any Consents of Regulatory Authorities
referred to in Section 9.1(b) of this Agreement. To the
Knowledge of Morgan there exists no fact, circumstance, or
reason why the requisite Consents referred to in
Section 9.1(b) of this
Agreement cannot be received in a timely manner.
5.20 Intellectual Property. All of the Intellectual
Property rights of Morgan and the Morgan Subsidiaries are in
full force and effect and, if applicable, constitute legal,
valid, and binding obligations of the respective parties
thereto, and there have not been, and, to the Knowledge
of Morgan, there currently are not, any Defaults thereunder
by Morgan or a Morgan Subsidiary. Morgan or a Morgan
Subsidiary owns or is the valid licensee of all such
Intellectual Property rights free and clear of all Liens
or claims of infringement, except for such Liens or claims
of infringement which would not reasonably be expected to
have a Material Adverse Effect on Morgan. Neither Morgan
nor any of the Morgan Subsidiaries nor, to the Knowledge
of Morgan, their respective predecessors has infringed the
Intellectual Property rights of others and, to the Knowledge
of Morgan, none of the Intellectual Property rights as used
in the business conducted by Morgan or the Morgan
Subsidiaries infringes upon or otherwise violates the
rights of any Person, nor has any Person asserted a
claim of such infringement, in each case, except as
would not reasonably
be expected to have a Material Adverse Effect on Morgan.
Except as disclosed in
Section 5.20 of the Morgan Disclosure Memorandum, neither
Morgan nor any of the
Morgan Subsidiaries is obligated to pay any royalties to
any Person with respect to any such Intellectual Property
other than in the ordinary course of business. Morgan or
a Morgan Subsidiary owns or has the valid right to use all
of the Intellectual Property rights which it is presently
using, or in connection with performance of any material
Contract to which it is a party. No officer, director, or
employee of Morgan or the Morgan Subsidiaries is party to
any Contract which requires such officer, director, or
employee to assign any
interest in any Intellectual Property or keep confidential
any trade secrets, proprietary data, customer information,
or other business information or, except as disclosed in
Section 5.20 of the Morgan Disclosure Memorandum, which
restricts or prohibits such officer, director, or employee
from engaging in activities competitive with any Person,
in each case, other than with Morgan or any of the Morgan
Subsidiaries.
5.21 State Takeover Laws. Subject to Morgan's
right to alter its recommendation in accordance with the
proviso set forth in the fourth sentence of Section 8.1 of
this Agreement, each Morgan Company has taken all necessary
action to exempt the transactions contemplated by this
Agreement from any applicable "moratorium," "control share,"
"fair price," "business combination," or other anti-takeover
laws and regulations of the State of Tennessee (collectively,
"Takeover Laws") including the relevant provisions of
Chapter 48 of the TBCA.
5.22 Charter Provisions. Each Morgan Company has
taken all action so that the entering into of this Agreement
and the consummation of the Merger and the other transactions
contemplated by this Agreement do not and will not result in the
grant of any rights to any Person under the Articles of
Incorporation or Bylaws or, subject to Morgan's right to
alter its recommendation in accordance with the proviso
set forth in the fourth sentence of Section 8.1 of this
Agreement, restrict or impair the ability of Regions to vote,
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or otherwise to exercise the rights of a stockholder with
respect to, shares of any Morgan
Company that may be directly or indirectly acquired or
controlled by it.
5.23 Derivatives. All interest rate swaps,
caps, floors, option agreements, futures and forward
contracts, and other similar risk management arrangements,
whether entered into for Morgan's own account, or for the
account of one or more the Morgan Subsidiaries or their
customers, were entered into (i) in accordance with prudent
business practices and all applicable Laws, and (ii) with
counterparties believed to be financially responsible; and
each of them is enforceable in accordance with its terms
(except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or
by general equity principles), and are in full force and
effect. Neither Morgan nor a Morgan Subsidiary, nor to
Morgan's Knowledge, any other party thereto, is in breach
of any of its obligations under any such agreement or
arrangement. The Morgan Financial Statements disclose
the value of such agreements and arrangements on a
mark-to-market basis in accordance with GAAP and, since
October 31, 2000, there has not been a change
in such value that, individually or in the aggregate, has
resulted in a Material Adverse Effect on Morgan.
5.24 Fairness Opinion. Morgan has received an
opinion of Lazard Frires & Co. LLC to the effect that, in
the opinion of such firm, the Exchange Ratio is fair, from
a financial point of view, to the stockholders of Morgan.
5.25 Contracts with Clients. (a) Each of Morgan
and the Morgan Subsidiaries is in compliance with the terms
of each Contract with any customer to whom Morgan or any
Morgan Subsidiary provides services under any Contract
(a "Client"), and each such Contract is in full force and
effect with respect to the applicable Client.
(b) Each extension of credit by Morgan or any of the
Morgan Subsidiaries to any Client (i) is in full compliance
with Regulation T of the Federal Reserve Board or any
substantially similar regulation of any Regulatory Authority,
(ii) is fully secured, and (iii) Morgan or a Morgan Subsidiary,
as the case may be, has a first priority perfected security
interest in the collateral securing such extension.
5.26 Investment Advisory Activities. (a) Morgan
or certain of the Morgan Subsidiaries have sponsored or
organized or provide investment management, investment
advisory, sub-advisory, administration, distribution or
certain other services to Investment Companies. All such
Investment Companies are disclosed in Section 5.26 of the
Morgan Disclosure Memorandum (each such Investment Company,
a "Morgan Investment Company"). Each of the Morgan Investment
Companies (or the trust of which it is a series) is duly
organized and existing in good standing under the laws of the
jurisdiction under which it is organized as previously disclosed.
Each of the Morgan Investment
Companies is governed by a Fund Board consisting of at least 40%
of trustees or directors who are not "interested persons" (as
defined in the Investment Company Act) of the Morgan Investment
Companies or Morgan. The Fund Boards operate in all material
respects in conformity with the requirements and restrictions
of Sections 10 and 16 of the Investment Company Act.
(b) Each of the Morgan Investment Companies is in
compliance in all material respects with all applicable
Securities Laws and the Laws of any Regulatory Authorities,
having jurisdiction over such entity and the Laws of any state
in which such Morgan Investment Company is registered,
qualified, or sold. Morgan has provided or made
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available to Regions true and complete copies of all the
constituent documents and related advisory agreements of
all of the Morgan Investment Companies.
(c) Except as disclosed in Section 5.26 of the Morgan
Disclosure Memorandum, neither Morgan nor any Morgan Subsidiary
is or has been during the past five years an "investment adviser"
within the meaning of the Investment Advisers Act, required to be
registered, licensed or qualified as an investment adviser under
the Investment Advisers Act or subject to any material Liability
or disability by reason of any failure to be so registered,
licensed or qualified, except for any such failure to be so
registered, licensed, or
qualified that would not reasonably likely have, individually
or in the aggregate, a Material Adverse Effect on Morgan.
(d) Each Morgan Investment Company has been operated
in compliance with its respective objectives, policies, and
restrictions, including without limitation, those set forth
in the applicable registration statement for that Morgan
Investment Company or governing instruments for a Client,
except where lack of compliance would not reasonably likely
have, individually or in the aggregate, a Material Adverse
Effect on Morgan.
(e) Each Morgan Investment Company has duly adopted
procedures pursuant to
Rules 17a-7, 17e-1, and 10f-3 under the Investment Company
Act, to the extent
applicable.
ARTICLE 6
Representations and Warranties of Regions<CF>
Regions hereby represents and warrants to Morgan as follows:
6.1 Organization, Standing, and Power. Regions
is a corporation duly organized, validly existing, and in
good standing under the Laws of the State of Delaware, and
has the corporate power and authority to carry on its business
as now conducted and to own, lease, and operate its material assets.
Regions is duly qualified or licensed to transact business as a
foreign corporation 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, except for such jurisdictions in which
the
failure to be so qualified or licensed is not reasonably likely
to have, individually or in the aggregate, a Material Adverse
Effect on Regions.
6.2 Authority; No Breach of Agreement. (a) Regions
has the corporate power and authority necessary to execute,
deliver, and perform its obligations under this Agreement and
to consummate the transactions contemplated hereby. The execution,
delivery, and performance of this Agreement and the consummation
of the transactions contemplated herein, including the Merger, have
been duly and validly authorized by all necessary corporate action
in respect thereof on the part of Regions. This Agreement represents
a legal, valid, and binding obligation of Regions, enforceable against
Regions 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).
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(b) Neither the execution and delivery of this Agreement by
Regions, nor the consummation by Regions of the transactions
contemplated hereby, nor compliance by Regions with any of the
provisions hereof, will (i) conflict with or result in a breach
of any provision of Regions' Certificate of Incorporation or
Bylaws, (ii) constitute or result in a Default under, or require
any Consent pursuant to, or result in the creation of any Lien on
any asset of any Regions Company under, any Contract or Permit of
any Regions Company, where such Default or Lien, or any failure to
obtain such Consent, is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Regions, or
(iii) subject to receipt of the requisite Consents referred to in
Section 9.1(b) of this Agreement, violate any Law or Order
applicable to any Regions Company or any of their respective
material assets.
(c) Other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate
and securities Laws, and rules of the NASD, and other than
Consents required from Regulatory Authorities, and other than
notices to or filings with the Internal Revenue Service or the
Pension Benefit Guaranty Corporation with respect to any employee
benefit plans, or under the HSR Act, and other than Consents,
filings, or notifications which, if not obtained or made, are not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions, no notice to, filing
with, or Consent of, any public body or authority is necessary
for the consummation by Regions of the Merger and the other
transactions contemplated in this Agreement.
6.3 Capital Stock. The authorized capital stock of
Regions consists, as of the date of this Agreement, of 500,000,000
shares of Regions Common Stock, of which 222,445,291 shares were
issued and outstanding as of September 30, 2000. All of the issued
and outstanding shares of Regions Common Stock are, and all of the
shares of Regions Common Stock to be issued in exchange for shares
of Morgan Common Stock upon consummation of the Merger, when issued
in accordance with the terms of this Agreement, will be, duly and
validly issued and outstanding and fully paid and, except as expressly
provided otherwise under applicable Law, nonassessable under the DGCL.
None of the outstanding shares of Regions Common Stock has been, and
none of the shares of Regions Common Stock to be issued in exchange
for shares of Morgan Common Stock upon consummation of the Merger
will be, issued in violation of any preemptive rights of the current
or past stockholders of Regions.
6.4 Regions Subsidiaries. Regions or one of its Subsidiaries
owns all of the issued and outstanding shares of capital stock of
each Regions Subsidiary. No equity securities of any Regions
Subsidiary are or may become required to be issued (other than
to another Regions Company) by reason of any Rights, and there
are no Contracts by which any Regions Subsidiary is bound to
issue (other than to another Regions Company) additional shares
of its capital stock or Rights or by which any Regions Company
is or may be bound to transfer any shares of the capital stock
of any Regions Subsidiary (other than to another
Regions Company). There are no Contracts relating to the rights
of any Regions Company to vote or to dispose of any shares of
the capital stock of any Regions Subsidiary. All of the shares
of capital stock of each Regions Subsidiary held by a Regions
Company are fully paid and, except as provided in statutes
pursuant to which depository institution Subsidiaries are
organized, except as expressly provided otherwise under
applicable Law, nonassessable under the applicable corporate
or banking Law of the jurisdiction in which such Subsidiary
is incorporated or organized and are owned by the Regions
Company free
and clear of any Lien. Each Regions Subsidiary is either a
bank or a corporation, and is duly organized, validly existing,
and (as to corporations) in good standing under the Laws
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of the
jurisdiction in which it is incorporated or organized, and has
the corporate power and authority necessary for it to own, lease,
and operate its assets and to carry on its business as now
conducted. Each Regions Subsidiary is duly qualified or licensed
to transact business as a foreign corporation 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,
except for such jurisdictions in which the failure to be so
qualified or licensed is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect
on Regions. Each Regions Subsidiary that is a depository
institution is an "insured depository institution" as defined
in the Federal Deposit Insurance Act and applicable
regulations thereunder, and the deposits in which are insured
by the Bank Insurance Fund or Savings Association Insurance
Fund to the fullest
extent permitted by Law. The minute book and other
organizational documents (and all amendments thereto)
for Regions and each Regions Subsidiary that is a
"Significant Subsidiary" (as such term is defined in
Regulation S-X promulgated under the 1934 Act) have been
or will be made available to Morgan for its review, and
are true and complete as in effect as of November 30, 2000.
No material actions have been taken by Regions' Board of
Directors since such date, other than such actions taken
in contemplation of the execution of this Agreement and the
consummation of the transactions contemplated herein.
6.5 SEC Filings; Financial Statements.
(a) Regions has filed and made available to Morgan
all forms, reports, and documents required to be filed by
Regions with the SEC since January 1 of the second complete
fiscal year preceding the date of this Agreement (collectively,
the "Regions SEC Reports"). The Regions SEC Reports (i) at
the time filed, complied in all material respects with the
applicable requirements of the 1933 Act and the 1934 Act,
as the case may be, and (ii) did not at the time they were
filed (or if amended or superseded by a filing prior to the
date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to
state a material fact required to be stated in such Regions
SEC Reports or necessary in order to make the statements in
such Regions SEC Reports, in light of the circumstances under
which they were made, not misleading. Except for Regions
Subsidiaries that are registered as a broker,
dealer, or investment adviser or filings required due to
fiduciary holdings of the Regions Subsidiaries, none of
Regions Subsidiaries is required to file any forms, reports,
or other documents with the SEC.
(b) Each of the Regions Financial Statements (including,
in each case, any related notes) contained in the Regions SEC
Reports, including any Regions SEC Reports filed after the date
of this Agreement until the Effective Time, complied or will
comply as to form in all material respects with the applicable
published rules and regulations of the SEC with respect thereto,
was or will be prepared in accordance with GAAP applied on a
consistent basis throughout the periods involved (except as
may be indicated in the notes to such financial statements or,
in the case of unaudited statements, as permitted by Form 10-Q
of the SEC), and fairly presented or will fairly present the
consolidated financial position of Regions and its Subsidiaries
as at the respective dates and the
consolidated results of its operations and cash flows for the
periods indicated, except that the unaudited interim financial
statements were or are subject to normal and recurring year-end
adjustments which were not or are not expected to be material
in amount or effect.
6.6 Absence of Undisclosed Liabilities. No Regions
Company has any Liabilities that are reasonably likely to have,
individually or in the aggregate, a Material Adverse
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Effect on
Regions, except Liabilities which are accrued or reserved against
in the consolidated balance sheets of Regions as of September
30, 2000, included in the Regions Financial Statements or
reflected in the notes thereto, Liabilities incurred in the
ordinary course of business subsequent to September 30, 2000,
and Liabilities to be incurred in connection with the
transactions contemplated by the Agreement. No Regions Company
has incurred or paid any Liability since September 30, 2000,
except for such Liabilities incurred or paid in the ordinary
course of business consistent with past business practice and
which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Regions.
6.7 Absence of Certain Changes or Events. Since
September 30, 2000, except as disclosed in the Regions Financial
Statements delivered prior to the date of this Agreement, there
have been no events, changes or occurrences which have had, or
are reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on Regions.
6.8 Compliance with Laws. Regions is duly registered
as a bank holding company under the BHC Act. Each Regions Company
has in effect all Permits necessary for it to own, lease, or
operate its material assets and to carry on its business as now
conducted, except for those Permits the absence of which are not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions, and there has occurred no
Default under any such Permit, other than Defaults which are not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Regions.
None of the Regions Companies:
(a) is in violation of any Laws, Orders, or Permits
applicable to its business or employees conducting its business,
except for violations which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Regions; and
(b) has received any notification or communication from
any agency or
department of federal, state, or local government or any
Regulatory Authority or the staff thereof (i) asserting that
any Regions Company is not in compliance with any of the Laws
or Orders which such governmental authority or Regulatory
Authority enforces, where such noncompliance is reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on Regions, (ii) threatening to revoke any
Permits, the revocation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect
on Regions, or (iii) requiring any Regions Company (x) to
enter into or consent to the issuance of a cease and desist
order, formal agreement, directive, commitment, or memorandum
of understanding, or (y) to adopt any Board resolution or
similar undertaking, which restricts materially the conduct
of its business, or in any manner relates to its capital
adequacy, its credit or reserve policies, its management,
or the payment of dividends.
6.9 Tax Matters. (a) Since December 31, 1994,
all material Tax Returns required to be filed by or on behalf
of each Regions Company have been timely filed, or requests
for extensions have been timely filed, granted, and have not
expired for periods ended on or before December 31, 1999, and
all Tax Returns filed are complete and accurate in all material
respects. All Tax Returns for periods ending on or before the
date of the most recent fiscal year end immediately preceding
the Effective Time will be timely filed or requests for
extensions will be timely filed. All Taxes shown on filed
Tax Returns have
been paid. There is no audit examination, deficiency, or
refund Litigation with respect to
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any Taxes, that is reasonably
likely to result in a determination that would have,
individually or in the aggregate, a Material Adverse Effect
on Regions, except to the extent reserved against in the Regions Financial
Statements dated prior to the date of this Agreement. All
material Taxes and other material Liabilities due with respect
to completed and settled examinations or concluded Litigation
have been paid.
(c) Adequate provision for any material Taxes due or to
become due for each Regions Company for the periods or periods
through and including the date of the respective Regions Financial
Statements has been made and is reflected on such Regions Financial
Statements.
(d) Each of the Regions Companies is in material compliance
with, and its records contain the information and documents
(including properly completed IRS Forms W-9) necessary to comply
with, in all material respects, applicable information reporting
and Tax withholding requirements under federal, state, and local
Tax Laws, and such records identify with specificity all accounts
subject to backup withholding under Section 3406 of the Internal
Revenue Code.
(e) There are no material Liens with respect to Taxes upon
any of the assets of any Regions Companies.
(f) No Regions Company has filed any consent under Section
341(f) of the Internal Revenue Code concerning collapsible corporations.
6.10 Legal Proceedings. There is no Litigation instituted
or pending, or, to the Knowledge of Regions, threatened against
any Regions Company, or against any asset, employee benefit plan,
interest, or right of any of them, that is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect
on Regions, nor are there any Orders of any Regulatory
Authorities, other governmental authorities, or arbitrators
outstanding against any Regions Company, that are reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on Regions.
6.11 Reports. Since December 31, 1995, or the date
of organization if later, each Regions Company has timely filed
all reports and statements, together with any amendments
required to be made with respect thereto, that it was required
to file with any Regulatory Authorities, except failures to
file which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Regions. As of
their respective dates, each of such reports and documents,
including the financial statements, exhibits, and schedules
thereto, complied in all material respects with all applicable Laws.
6.12 Statements True and Correct. None of the
information supplied or to be supplied by any Regions Company
or any Affiliate thereof regarding Regions or such Affiliate
for inclusion in the Registration Statement to be filed by
Regions with the SEC will, when the Registration Statement
becomes effective, contain any untrue statement of a material
fact, or omit to state any material fact required to be
stated thereunder or necessary to make the statements
therein not misleading. None of the information supplied
or to be supplied by any Regions Company or any Affiliate
thereof for inclusion in the Proxy Statement to be mailed
to Morgan's stockholders in connection with the
Stockholders' Meeting, will, when first mailed to the
stockholders of Morgan, contain any misstatement of material
fact, or omit to state any material fact required to be
stated thereunder or necessary to make the statements therein,
in light of the circumstances under which they were made,
not misleading, or, in the case of the Proxy Statement or
any amendment thereof or supplement thereto, at the time of
the Stockholders' Meeting,
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omit to state any material fact
required to be stated thereunder or necessary to correct any
material statement in any earlier communication with respect
to the solicitation of any proxy for the Stockholders'
Meeting. All documents that any Regions Company or any
Affiliate thereof is responsible for filing with any Regulatory
Authority in connection with the transactions contemplated
hereby will comply as to form in all material respects with
the provisions of applicable Law.
6.13 Tax and Regulatory Matters. No Regions Company
or any Affiliate thereof has taken or agreed to take any action,
and Regions has no Knowledge of any fact or circumstance that
is reasonably likely 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 delay
receipt of any Consents of Regulatory Authorities referred
to in Section 9.1(b) of this Agreement. To the Knowledge of
Regions there exists no fact, circumstance, or reason why the
requisite Consents referred to in Section 9.1(b) of this
Agreement cannot be received in a timely manner.
6.14 Derivatives. All interest rate swaps, caps,
floors, option agreements, futures and forward contracts,
and other similar risk management arrangements, whether entered
into for Regions' own account, or for the account of one or
more the Regions Subsidiaries or their customers, were entered
into (i) in accordance with prudent business practices and all
applicable Laws, and (ii) with counterparties believed to be
financially responsible; and each of them is enforceable in
accordance with its terms (except as enforceability may be
limited by applicable bankruptcy, insolvency, reorganization,
moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by
general equity principles), and are in full force and effect.
Neither Regions nor a Regions Subsidiary, nor to Regions' Knowledge,
any other party thereto, is in breach of any of its obligations
under any such agreement or arrangement. The Regions Financial
Statements disclose the value of such agreements and arrangements
on a mark-to-market basis in accordance with GAAP and, since
September 30, 2000, there has not been a
change in such value that, individually or in the aggregate,
has resulted in a Material Adverse Effect on Regions.
6.15 Funds. At the Effective Time, Regions will
have the funds necessary to consummate the Merger and pay the
Aggregate Cash Amount in accordance with the terms of this Agreement.
6.16 Ownership of Morgan Capital Stock. Neither
Regions nor any of its Subsidiaries, Affiliates, or "Associates"
as defined in Section 48-103-203 or Section 48-103-302 of the
TBCA) beneficially owns, directly or indirectly, any capital
stock of Morgan or is a party to any agreement, arrangement,
or understanding for the purpose of acquiring, holding, voting,
or disposing of any capital stock of Morgan that in the
aggregate equals or exceeds 5.0% of the outstanding shares o
f Morgan Common Stock, other than as contemplated by this Agreement.
ARTICLE 7
Conduct of Business Pending Consummation
7.1 Affirmative Covenants of Both Parties. Unless
the prior written consent of the other Party shall have been
obtained, and except as otherwise expressly contemplated herein
or set forth in Section 7.1 or Section 7.2 of the Morgan
Disclosure Memorandum, each Party shall and shall cause each
of its Subsidiaries to (i) operate its business only in
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the
usual, regular, and ordinary course, (ii) use its reasonable
efforts to preserve intact its
business organization and assets and maintain its rights and
franchises, (iii) use its reasonable efforts to maintain its
current employee relationships, and (iv) take no action which
would (a) adversely affect the ability of any Party to obtain
any Consents required for the transactions contemplated hereby,
or (b) adversely affect the ability of any Party to perform
its covenants and agreements under this Agreement; <IT>provided,
that the foregoing shall not prevent any Regions Company from
discontinuing or disposing of any of its assets
or business, or from acquiring or agreeing to acquire any
other Person or any assets thereof, if such action is, in
the reasonable good faith judgment of Regions, desirable in
the conduct of the business of Regions and its Subsidiaries
and such action would not jeopardize the receipt of Consents
required to consummate the transaction contemplated hereby or
delay the Effective Time beyond the date set forth in Section
10.1(e) of this Agreement. Morgan shall use all reasonable
efforts to purchase all shares of Morgan
Common Stock to be issued prior to the Effective Time pursuant
to Permitted Issuances, to the extent practicable and permitted
by the Morgan Stock Plans, in the open market, subject to all
applicable requirements of the Securities Laws.
7.2 Negative Covenants of Morgan. From the date
of this Agreement until the earlier of the Effective Time or
the termination of this Agreement, except as specifically
contemplated by this Agreement or as set forth in Section
7.2 of the Morgan Disclosure Memorandum, Morgan covenants
and agrees that it will not do or agree or commit to do, or
permit any of its Subsidiaries to do or agree or commit to
do, any of the following without the prior written consent
of Regions, which consent shall not be unreasonably withheld:
(a) amend the Articles of Incorporation, Bylaws, or
other governing instruments of any Morgan Company; or
(b) incur, guarantee, or otherwise become responsible
for, any additional debt obligation or other obligation for
borrowed money (other than indebtedness of a Morgan Company to
another Morgan Company) in excess of an aggregate of
$5,000,000 (for the Morgan Companies on a consolidated basis),
except in the
ordinary course of business consistent with past practices
(which shall include entry into repurchase agreements or other
fully secured securities), or impose, or suffer the imposition,
on any asset of any Morgan Company of any material Lien,
except in the ordinary course of business consistent with past
practices; or
(c) except as contemplated by Section 7.1 of this
Agreement, repurchase,
redeem, or otherwise acquire or exchange (other than exchanges
in the ordinary
course under employee benefit plans), directly or indirectly,
any shares, or any
securities convertible into any shares, of the capital stock
of any Morgan Company, or declare or pay any dividend or make
any other distribution in respect of Morgan's capital stock;
provided that Morgan may (to the extent legally able to do so),
but shall not be obligated to declare and pay regular quarterly
cash dividends on the Morgan Common Stock in an amount per share
and with the usual and regular record and payment dates as
disclosed in Section 7.2(c) of the Morgan Disclosure Memorandum,
and provided, that, notwithstanding the provisions of Section 1.3
of this Agreement, the Parties shall cooperate in selecting the
Effective Time to ensure that, with respect to the quarterly period
in which the Effective Time occurs, the holders of Morgan Common
Stock do not become entitled to receive both a dividend in respect
of their Morgan Common Stock and a dividend in respect of their
Regions Common Stock or fail to be entitled to receive any dividends;
or
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(d) except (i) for this Agreement, (ii) for Permitted Issuances,
or (iii) pursuant to the exercise of Rights outstanding as of the
date of this Agreement and pursuant to the terms thereof in existence
on the date of this Agreement, (1) issue, sell, pledge, encumber,
authorize the issuance of, (2) enter into any Contract to issue, sell,
pledge, encumber, or authorize the issuance of, or (3) otherwise
permit to become outstanding, any additional shares of Morgan Common
Stock or any capital stock of any Morgan Company, or any stock
appreciation rights, or any option, warrant, conversion, or other
right to acquire any such stock, or any security convertible into
any such stock; or
(e) adjust, split, combine, or reclassify any capital stock
of any Morgan
Company or issue or authorize the issuance of any other securities
in respect of or in substitution for shares of Morgan Common Stock
(other than upon the exercise of existing Rights), or sell, lease,
mortgage, or otherwise dispose of or otherwise encumber (i) any
shares of capital stock of any Morgan Subsidiary (unless any such
shares of stock are sold or otherwise transferred to another
Morgan Company), or (ii) any asset other than in the ordinary
course of business for reasonable and adequate consideration
and other than dispositions in the ordinary course of business
consistent with past practice; or
(f) purchase any securities or make any material investment
in any Person,
except for (i) investments in trading account securities,
venture capital, or other funds, (ii) securities held available
for sale, (iii) client margin agreements, (iv) securities
acquired pursuant to underwriting agreements in which Morgan
participated as an underwriter or dealer, (v) securities acquired
as a result of debts owing to Morgan or the Morgan Subsidiaries
by their customers, (vi) securities lending, or borrowing
arrangements, (vii) securities acquired in arbitrage, hedging,
forward, or futures transactions, and (viii) acquisitions of
money managers, in each case, in the ordinary course of business
and consistent with past practice, either by purchase of stock
or securities, contributions to capital, asset transfers, or
purchase of any assets, in any Person other than a wholly-owned
Morgan Subsidiary, or otherwise acquire direct or indirect control
over any Person, other than in connection with (1) acquisitions
of control by a depository institution Subsidiary in its fiduciary
capacity, or (2) the creation of new Subsidiaries or funds organized
to conduct or continue activities in the ordinary course of business;
or
(g) (i) grant any increase in compensation or benefits to
the employees, officers, or directors of any Morgan Company,
except as required by Law, (ii) pay any severance or termination
pay or any bonus other than pursuant to written policies or written
Contracts in effect on the date of this Agreement, or (iii) enter
into or amend any severance agreements with officers of any Morgan
Company; or
(h) enter into or amend any employment Contract between any
Morgan
Company and any Person (unless such amendment is required by Law)
that the
Morgan Company does not have the unconditional right to terminate
without Liability (other than Liability for services already
rendered and in accordance with the Morgan Benefit Plans), at any
time on or after the Effective Time; or
(i) adopt any new employee benefit plan of any Morgan Company
or make any
material change in or to any existing employee benefit plans of
any Morgan Company other than any such change that is required by
Law or that, in the opinion of counsel, is necessary or advisable
to maintain the tax qualified status of any such plan; or
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(j) make any significant change in any Tax or accounting
methods, material
elections, or systems of internal accounting controls,
except as may be appropriate to conform to changes in Tax
Laws or regulatory accounting requirements or GAAP; or
(k) except as Morgan may deem necessary to enforce
its rights under this
Agreement, commence any Litigation other than as deemed
necessary or advisable in the good faith judgment of
management for the prudent operation of its business or
settle any Litigation involving any Liability of any Morgan
Company for material money damages or restrictions upon the
operations of any Morgan Company; or
(l) except in the ordinary course of business, modify,
amend, or terminate any material Contract or waive, release,
compromise, or assign any material rights or claims; or
(m) except as and to the extent required, based upon the
written advice of
counsel, in the exercise of the fiduciary obligations of
Morgan or a Morgan Subsidiary to any Morgan Investment Company,
request that any action be taken by any Fund Board, other than
routine actions that would not reasonably likely have, individually
or in the aggregate, a Material Adverse Effect on Morgan or any
Morgan Investment Company; or
(n) (i) enter into any new line of business, or (ii)
except in the ordinary course of business, materially restructure
or materially change (1) its investment securities portfolio
(except as a result of maturities, redemptions, calls, or
similar events affecting the securities held, provided that
any such restructuring change does not result in a material
change to the credit or risk concentrations of Morgan and the
Morgan Subsidiaries), (2) its hedging strategy, or (3) its gap
position (except as a result of maturities, redemptions, calls,
or other similar events affecting the securities held, provided
that any such restructuring or change does not result in a
material change to the credit or risk concentrations of Morgan
and the Morgan Subsidiaries as of the date of such restructuring
or change), through purchases, sales, or otherwise.
7.3 Adverse Changes in Condition. Each Party agrees
to give written notice promptly to the other Party upon becoming
aware of the occurrence or impending occurrence of any event or
circumstance relating to it or any of its Subsidiaries which (i)
is reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on it, or (ii) would cause or constitute
a material breach of any of its representations, warranties, or
covenants
contained herein, and to use its reasonable efforts to prevent or
promptly to remedy the same.
7.4 Reports. Each Party and its Subsidiaries shall
file all reports required to be filed by it with Regulatory
Authorities between the date of this Agreement and the Effective
Time and shall deliver to the other Party copies of all such
reports promptly after the same are filed.
ARTICLE 8
Additional Agreements
8.1 Registration Statement; Proxy Statement; Stockholder
Approval. As soon as reasonably practicable after execution
of this Agreement, Regions shall file the Registration Statement
with the SEC, and shall use its reasonable efforts to cause the
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Registration Statement to become effective under the 1933 Act and
take any action required to be taken under the applicable state
Blue Sky or securities Laws in connection with the issuance of
the shares of Regions Common Stock upon consummation of the
Merger. Morgan shall furnish all information concerning it
and the holders of its capital stock as Regions may reasonably
request for inclusion in the Registration Statement. Morgan
shall call a Stockholders' Meeting, to be held as soon as
reasonably practicable
after the Registration Statement is declared effective by the
SEC, for the purpose of voting upon approval of this Agreement
and such other related matters as it deems appropriate. In
connection with the Stockholders' Meeting, (i) Morgan shall
prepare and file with the SEC a Proxy Statement and mail such
Proxy Statement to its stockholders, (ii) the Parties shall
furnish to each other all information concerning them that they
may reasonably request in connection with such Proxy
Statement, (iii) the Board of Directors of Morgan shall
recommend to its stockholders the approval of the matters
submitted for approval, and (iv) the Board of Directors of
Morgan shall use its reasonable efforts to obtain such
stockholders' approval, provided that Morgan may withdraw,
modify, or change in an adverse manner to Regions its
recommendations if the Board of Directors of Morgan, after
having consulted with and based upon the advice of outside
counsel, determines in good faith that the failure to so
withdraw, modify, or change its recommendation could reasonably
constitute a breach of the fiduciary duties of Morgan's Board
of Directors under applicable Law. In addition, nothing in
this Section 8.1 or elsewhere in this Agreement shall prohibit
accurate disclosure by Morgan of information that is required
to be disclosed
in the Registration Statement or the Proxy Statement or in any
other document required to be filed with the SEC (including,
without limitation, a Solicitation/<SO,0>Recommendation
Statement on Schedule 14D-9) or otherwise required to be
publicly disclosed by applicable Law or regulations or rules
of the NASD.
8.2 Applications. Regions shall promptly prepare
and file, and Morgan shall cooperate in the preparation
and, where appropriate, filing of, applications with all
Regulatory Authorities having jurisdiction over the transactions
contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by
this Agreement. Regions will promptly furnish to Morgan copies
of applications filed with all Regulatory Authorities and copies
of written communications received by Regions from any Regulatory
Authorities with respect to the transactions contemplated hereby.
Each of Regions and Morgan agrees that it will consult with the
other Party thereto with respect to the obtaining of all material
Consents necessary or
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.
8.3 Filings with State Offices. Upon the terms and
subject to the conditions of this Agreement, Regions shall
execute and file the Delaware Certificate of Merger with the
Secretary of State of the State of Delaware and the Tennessee
Articles of Merger with the Secretary of State of the State of
Tennessee in connection with the Closing.
8.4 Agreement as to Efforts to Consummate. Subject
to the terms and conditions of this Agreement, each Party agrees
to use, and to cause its Subsidiaries to use, its reasonable
efforts to take, or cause to be taken, all actions, and to do,
or cause to be done, all things necessary, proper, or advisable
under applicable Laws to consummate and make effective, as soon
as reasonably practicable after the date of this Agreement, the
transactions contemplated by this Agreement, including, without
limitation, using its reasonable efforts to lift or rescind any
Order adversely affecting its ability to consummate
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the transactions contemplated herein and to cause to be
satisfied the conditions referred to in Article 9 of this
Agreement; <IT>provided, that nothing herein shall preclude
either Party from exercising its rights under this Agreement.
Each Party shall use, and shall cause each
of its Subsidiaries to use, its reasonable efforts to obtain
as promptly as practicable all Consents necessary or desirable
for the consummation of the transactions contemplated by this
Agreement.
8.5 Investigation and Confidentiality. (a) Prior
to the Effective Time, each Party shall keep the other Party
advised of all material developments relevant to its business
and to consummation of the Merger and 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. No
investigation by a Party shall affect the representations and
warranties of the other Party.
(b) Each Party shall, and shall cause its advisers and
agents to, maintain the confidentiality of all confidential
information 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
confidentiality agreements between the Parties, and shall not
use such information for any purpose except in furtherance of
the transactions contemplated by this 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 thereof, and all work papers containing confidential
information received from the other Party.
(c) Each Party agrees to give the other Party notice
as soon as practicable after any determination by it of any
fact or occurrence relating to the other Party which it has
discovered through the course of its investigation and which
represents, or is reasonably likely to represent, either a
material breach of any representation, warranty, covenant, or
agreement of the other Party or which has had or is reasonably
likely to have a Material Adverse Effect on the other Party;
<IT>provided, however, that the giving of such notice shall
not be dispositive of the occurrence of such breach or a
Material Adverse Effect.
(d) 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 violate or prejudice the rights of its customers,
jeopardize the attorney-client or similar privilege with
respect to such information or contravene any Law, rule,
regulation, Order, judgment, decree, fiduciary duty, or
agreement entered into prior to the date of this Agreement.
The Parties will use their reasonable efforts to make
appropriate substitute disclosure
arrangements, to the extent practicable, in circumstances
in which the restrictions of the preceding sentence apply.
8.6 Press Releases. Prior to the Effective Time,
Regions and Morgan shall consult with each other as to the
form and substance of any press release materially related
to this Agreement or any other transaction contemplated
hereby; <IT>provided, that nothing in this Section 8.6
shall be deemed to prohibit any Party from making any
disclosure which its counsel deems necessary or advisable
in order to satisfy such Party's disclosure obligations
imposed by Law.
8.7 No Solicitation. Except with respect to
this Agreement and the transactions contemplated hereby,
Morgan agrees that it shall not, and shall use its
reasonable efforts
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to cause its officers, directors,
agents, Affiliates, and Representatives not to, directly
or indirectly, initiate, solicit, encourage or knowingly
facilitate (including by way of furnishing confidential
information) any inquiries or the making of any
Acquisition Proposal. Notwithstanding anything herein
to the contrary, Morgan and its Board of Directors shall
be permitted (i) to the extent applicable, to comply
with Rule 14d-9 and Rule 14e-2 promulgated under the
1934 Act with regard to an Acquisition Proposal, (ii)
to engage in any discussions or negotiations with, or
provide any information to, any Person in response to
an unsolicited bona fide written Acquisition Proposal
by any such Person, if and only to the extent that
(a) Morgan's Board of Directors concludes in good
faith and consistent with its fiduciary duties to
Morgan's stockholders under applicable Law that such
Acquisition Proposal could reasonably be expected to
result in a Superior Proposal, (b) prior to providing
any information or data to any Person in connection
with an Acquisition Proposal by any such Person,
Morgan's Board of Directors receives from such Person
an executed confidentiality agreement containing terms
at least as stringent as those contained in the Morgan
Confidentiality Agreement, and (c) prior to providing
any information or data to any Person or entering into
discussions or negotiations with any Person, Morgan's
Board of Directors notifies Regions promptly of such
inquiries, proposals, or offers received by, any such
information requested from, or any such discussions or
negotiations sought to be initiated or continued with,
any of its Representatives indicating, in connection with
such notice, the name of such Person and the material terms
and conditions of any inquiries, proposals or offers. Morgan
agrees that it will promptly keep Regions informed of the
status and terms of any such proposals or offers and the
status and terms of any such discussions or negotiations.
Morgan agrees that it will, and will cause its officers,
directors and Representatives to, immediately cease and
cause to be
terminated any activities, discussions, or negotiations
existing as of the date of this Agreement with any parties
conducted heretofore with respect to any Acquisition Proposal.
Morgan agrees that it will use reasonable best efforts to
promptly inform its directors, officers, key employees,
agents, and Representatives of the obligations undertaken
in this Section 8.7. Nothing in this Section 8.7 shall
(i) permit Morgan to terminate this Agreement (except
as specifically provided in Article 10 of this Agreement)
or (ii) affect any other obligation of Regions or Morgan
under this Agreement.
8.8 Tax Treatment. Each of the Parties undertakes
and agrees to use its reasonable efforts to cause the Merger,
and to take no action which would cause the Merger not, to
qualify for treatment as a "reorganization" within the meaning
of Section 368(a) of the Internal Revenue Code for federal
income tax purposes.
8.9 Agreement of Affiliates. Morgan has disclosed
in Section 8.9 of the Morgan Disclosure Memorandum each
Person whom it reasonably believes may be deemed an
"affiliate" of Morgan for purposes of Rule 145 under the
1933 Act. Morgan shall use its reasonable efforts to cause
each such Person to deliver to Regions not later than the
Effective Time, a written agreement, in substantially the
form of Exhibit 3, providing that such Person will not sell,
pledge, transfer, or otherwise dispose of the shares of
Morgan Common Stock held by such Person except as contemplated
by such agreement or by this Agreement and will not sell,
pledge, transfer, or otherwise dispose of the shares of Regions
Common Stock to be received by such Person upon consummation
of the Merger except in compliance with applicable provisions
of the 1933 Act and the rules and regulations thereunder.
Shares of Regions Common Stock issued to such affiliates of
Morgan in exchange for shares of Morgan Common Stock shall
not be transferable, regardless of whether each such
affiliate has provided the written agreement referred to
in this Section 8.9 (and Regions shall be entitled to
place restrictive legends upon certificates for
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shares
of Regions Common Stock issued to affiliates of Morgan
pursuant to this Agreement to enforce the provisions of
this Section 8.9), except as provided herein. Regions
shall not be required to maintain the effectiveness of
the Registration Statement under the 1933 Act for the
purposes of resale of Regions Common Stock by such affiliates.
8.10 Employee Benefits and Contracts. (a) Following
the Effective Time, Regions at its election shall
either (i) provide generally to officers and employees
of the Morgan Companies, who at or after the Effective
Time become employees of a Regions Company ("Continuing
Employees"), employee benefits under employee benefit
plans, on terms and conditions which when taken as a
whole are substantially similar to those currently
provided by the Regions Companies to their similarly
situated officers and employees, or (ii) maintain for
the benefit of the Continuing Employees, the employee
benefits plans maintained by Morgan and/or any Morgan
Subsidiary immediately prior to the Effective
Time, provided that after the Effective Time there is no
material reduction (determined on an overall basis) in
the benefits provided under the Morgan employee benefit
plans.
(b) In the case of Regions' election to provide
employee benefits under
Section 8.10(a)(i) of this Agreement, for purposes of
participation and vesting (but not accrual of benefits)
under Regions' employee benefit plans, (i) service under
any qualified defined benefit plans of any Morgan Company
or any of its predecessors shall be treated as service
under Regions' qualified defined benefit plans, (ii) service
under any qualified defined contribution plans of any Morgan
Company or any of its predecessors shall be treated as
service under Regions' qualified defined contribution plans,
and (iii) service under any other employee benefit plans of
any Morgan Company or any of its predecessors shall be treated
as service under any similar employee benefit plans maintained
by
Regions. Regions shall cause the Regions welfare benefit plans
that cover the 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 under Morgan's
welfare benefit plans), and (ii) cause any deductible, co-insurance,
or maximum out-of-pocket payments made by the Continuing
Employees under Morgan's welfare benefit plans to be credited
to such Continuing Employees under the Regions welfare benefit
plans, so as to reduce the amount of any deductible, co-insurance,
or maximum out-of-pocket payments payable by the Continuing
Employees under the
Regions welfare benefit plans. The continued coverage of
the Continuing Employees under the employee benefits plans
maintained by Morgan and/<so,0>or any Morgan Subsidiary
immediately prior to the Effective Time during a transition
period continuing for a reasonable period of time after the
Effective Time shall be deemed to provide the Continuing
Employees with benefits that are no less favorable than
those offered to other employees of Regions and its Subsidiaries,
provided that after the Effective Time there is no material
reduction (determined on an overall basis) in the benefits
provided under the
Morgan employee benefit plans.
(c) Regions shall and shall cause Morgan and its
Subsidiaries to honor all
employment, severance, consulting, and other compensation
Contracts disclosed in
Sections 7.2 or 8.10 of the Morgan Disclosure Memorandum to
Regions between any
Morgan Company and any current or former director, officer,
or employee thereof, and all provisions for vested benefits
or other vested amounts earned or accrued through the
Effective Time under the Morgan Benefit Plans. Regions
shall be responsible for the fees related to the
termination of the Morgan Benefit Plans.
8.11 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,
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or administrative, including, without limitation, any
such claim, action, suit, proceeding or investigation
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
Morgan or any Morgan Subsidiary (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 Morgan, any of the Morgan Subsidiaries,
or any of their respective predecessors, or (ii) this
Agreement or any of the transactions contemplated hereby,
whether in any case asserted or arising before or after the
Effective Time, Regions shall indemnify and hold harmless,
as and to the fullest extent permitted by Law, each such
Indemnified Party against any Liability (including reasonable
attorneys' fees and expenses in advance of 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,
and in the event of any such threatened or actual claim,
action, suit, proceeding, or investigation (whether
asserted or arising before or after the Effective Time),
the Indemnified Parties may retain counsel reasonably
satisfactory to them; <IT>provided, however, that (a) Regions
shall have the right to assume the defense thereof and upon
such assumption Regions shall not be liable to any Indemnified
Party for any legal expenses of other counsel or any other
expenses subsequently incurred by any Indemnified Party in
connection with the defense thereof, except that if Regions
elects not to assume such defense or counsel for the
Indemnified Parties reasonably advises the Indemnified Parties
that there are issues which raise conflicts of interest
between Regions and the Indemnified Parties, the Indemnified
Parties may retain counsel reasonably satisfactory to them,
and Regions shall pay the reasonable
fees and expenses of such counsel for the Indemnified
Parties, (b) Regions shall not be liable for any settlement
effected without its prior written consent (which consent
shall not be unreasonably withheld), and (c) Regions shall
have no obligation hereunder to any Indemnified Party when
and if a court of competent jurisdiction shall ultimately
determine, and such determination shall have become final
and nonappealable, that indemnification of such Indemnified
Party in the manner contemplated hereby is prohibited by
applicable Law. Regions' obligations under this
Section 8.11(a) continue in full force and effect for a
period of six years after the Effective Time; <IT>provided,
however, that all rights to indemnification in respect of
any claim (a "Claim") asserted or made within such period
shall continue until the final disposition of such Claim.
(b) Regions agrees that all rights to indemnification
and all limitations on Liability existing in favor of the
directors, officers, and employees of Morgan and its
Subsidiaries (the "Covered Parties") as provided in their
respective Articles of Incorporation, Bylaws, or similar
governing instruments as in effect as of the date of this
Agreement 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, for a period of six years
after the Effective Time; <IT>provided, however, that all
rights to indemnification in respect of any Claim asserted
or made within such period shall continue until the final
disposition of such Claim; <IT>provided, further, however,
that nothing
contained in this Section 8.11(b) shall be deemed to preclude
the liquidation,
consolidation, or merger of Morgan or any Morgan Subsidiary,
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
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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 Morgan at or before the Effective
Time to be covered by Morgan's existing directors' and
officers' liability insurance policy (provided that 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). Such insurance
coverage, shall commence at the Effective Time and will be
provided for a
period of no less than three years after the Effective Time.
(d) If Regions or any of its successors or assigns
shall consolidate with or merge into any other Person and
shall not be the continuing or surviving Person of such
consolidation or merger or shall transfer all or substantially
all of its assets to any Person, then and in each case, proper
provision shall be made so that the successors and assigns of
Regions shall assume the obligations set forth in this
Section 8.11.
(e) The provisions of this Section 8.11 are intended
to be for the benefit of and shall be enforceable by, each
Indemnified Party, his or her heirs and representatives.
8.12 Exemption from Liability Under Section 16(b).
If Morgan delivers to Regions in a timely fashion prior to the
Effective Time accurate information regarding those officers
and directors of Morgan subject to the reporting requirements
of Section 16(a) of the 1934 Act (the "Morgan Insiders"), the
number of shares of Morgan Common Stock held or to be held by
each such Morgan Insider expected to be exchanged for the Regions
Common Stock in the Merger, and the number and description of
the options to purchase shares of Morgan Common Stock held by
each such Morgan Insider and expected to be converted into
options to purchase the Regions Common Stock in the Merger,
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 that the
receipt by the Morgan Insiders of the Regions Common Stock in
exchange for shares of Morgan Common Stock, and of options to
purchase shares of the Regions Corporation Common Stock upon
conversion of options to purchase Morgan Common Stock, in each
case pursuant to the transactions contemplated by this Agreement
and to the extent such securities are listed in the information
provided by Morgan, 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,
such that any such receipt shall be so exempt.
Morgan shall take all such steps as may be required
to cause the transactions
contemplated by Section 3.5 of this Agreement and any
other dispositions of Morgan equity securities
(including derivative securities) in connection
with this Agreement by each individual who is a
director or officer of Morgan to be exempt under
Rule 16b-3 promulgated under the 1934 Act.
8.13 Investment Companies. If the Merger
and the transactions contemplated hereby constitute
a deemed "assignment" (as defined in the Investment
Company Act and the investment Advisers Act) of the
advisory agreement with any Morgan Investment Company:
(a) Morgan shall, and shall use all reasonable
efforts to cause the Morgan
Subsidiaries to, use all reasonable efforts to obtain
approval of each Fund Board,
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pursuant to and in conformity with, Section 15(a)(4) of
the Investment Company Act and SEC Rule 15a-4 promulgated
under the Investment Company Act of an interim investment
advisory agreement for such Investment Company with a Regions
Subsidiary serving as adviser or subadviser, having the same
advisory fees in effect as of the date hereof and becoming
effective prior to the Effective Time, and which agreement
will be in a form satisfying the requirements of Rule
15a-4(b)(2)(iv)&(vi).
(b) In addition to taking the actions specified in
Section 8.13(a), Morgan shall, and shall use all reasonable
efforts to cause the Morgan Subsidiaries to cooperate with
Regions and use all reasonable efforts to obtain, at the sole
expense of Regions, and to cause each Morgan Investment Company
to obtain, as promptly as practicable but in no case later than
150 days after the execution of the interim investment advisory
agreement, the approval of such Fund Board and its stockholders,
pursuant to and in conformity with the provisions of Section 15
of the Investment Company Act and SEC rules thereunder applicable
thereto, of a new Investment Company advisory agreement for such
Morgan Investment Company with a Regions Subsidiary serving
as adviser or subadviser, such agreement having the terms that
are in the aggregate no less favorable to Regions than the
existing agreement.
(c) Morgan and the Morgan Subsidiaries shall cooperate
with Regions and
(i) use all reasonable efforts to cause to be obtained
all
consents and approvals necessary to be obtained by Morgan,
any Morgan Subsidiary or each Morgan Investment Company in
order for the Parties to consummate the transactions
contemplated by this Section 8.13, (ii) use all reasonable
efforts to cause each Morgan Investment Company and its
stockholders to give or obtain any such consents or approvals
relating to such Morgan Investment Company and to use all
reasonable efforts to cause each Morgan Investment Company
to prepare, file with and obtain clearance from the SEC and
all other Regulatory Authorities having jurisdiction, as
promptly as practicable after the date hereof, all proxy
solicitation material required to be filed with the SEC and
all other Regulatory Authorities and distributed to the
stockholders of such Morgan Investment Company with respect
to the actions to be approved by the stockholders of such
Morgan Investment Company in connection with this Agreement,
and (iii) use all reasonable efforts to cause such Morgan
Investment Company to mail such proxy solicitation materials
to such stockholders promptly after clearance thereof by the
SEC and to convene a meeting of the stockholders of such
Morgan Investment Company as soon as reasonably practicable
after the mailing of the proposal as described in
subsection (ii) hereof, all such consents and proxy
solicitation materials to be in form reasonably
satisfactory to Regions, which shall reimburse, as
incurred, all expenses of Morgan and the Morgan
Subsidiaries in connection with such matters. The
Parties shall use all reasonable efforts to assure
the satisfaction of the conditions set forth in
Section 15(f) of the
Investment Company Act with respect to each Morgan
Investment Company.
8.14 Management Contract Consents. As soon
as reasonably practicable after the date hereof,
Morgan shall, and shall cause any Morgan Subsidiary
that is a registered investment adviser (each an
"Adviser") to inform its investment advisory clients
of the transactions contemplated by this Agreement
and request each such client's written consent to the
deemed assignment of its management contract resulting
from the change in ownership of Morgan and the relevant
Adviser resulting from the transactions contemplated by
this Agreement and use all reasonable efforts to obtain
such consent on or before
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the Effective Time. While Morgan shall request
affirmative written consents from each Adviser's
clients to such deemed assignment, a negative consent
will constitute valid
consent to the extent permitted by applicable Law and
the applicable management
contract if (i) a negative consent is not expressly
prohibited by the management contract (for purposes
of this Agreement, it is assumed that, unless an agreement
expressly requires written consent to an "assignment" as
defined under the Investment Advisers Act, then such
"negative consent" or "silence" is permissible hereunder
and thereunder), (ii) a notice describing the change in
control and the negative consent substantially in form
reasonably acceptable to Regions and Morgan is sent to
each client, and (iii) 60 days elapse from the date that
notice is received at the client's office during which
period the
client continues to have its account managed by the
applicable Adviser.
8.15 Retention Program. At the Effective Time,
Regions will establish a retention pool to be used to
retain key employees of Morgan as set forth in Section
8.15 of the Morgan Disclosure Memorandum.
ARTICLE 9
Conditions Precedent to Obligations to Consummate
9.1 Conditions to Obligations of Each Party.
The respective obligations of each Party to perform
this Agreement and to consummate the Merger and the
of the following conditions, unless waived by both
Parties pursuant to Section 11.6 of this Agreement:
(a) Stockholder Approval. The stockholders
of Morgan shall have approved this Agreement as and to
the extent required by Law and by the provisions of any
governing instruments.
(b) Regulatory Approvals. All Consents of,
filings and registrations with, and notifications to
(including the effectiveness of the declaration of
election of financial holding company status by Regions),
all Regulatory Authorities required for consummation of
the Merger shall have been obtained or made and shall
be in full force and effect and all waiting periods
required by Law shall have expired. No Consent obtained
from any Regulatory Authority which is necessary to
consummate the transactions contemplated hereby shall
be conditioned or restricted in a manner which would be
reasonably expected to have a Material Adverse Effect
on the Surviving Corporation after the Effective Time.
(c) Consents and Approvals. Each Party shall
have obtained any and all Consents required for
consummation of the Merger (other than those referred
to in Section 9.1(b) of this Agreement) or for the
preventing of any Default under any Contract or Permit
of such Party which, if not obtained or made, is
reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on such Party
after the Effective Time.
(d) Legal Proceedings. No court or governmental
or Regulatory Authority of competent jurisdiction shall
have enacted, issued, promulgated, enforced, or entered
any Law or Order (whether temporary, preliminary, or
permanent) which is then in effect which prohibits,
restrains, or makes illegal consummation of the
transactions contemplated by this Agreement.
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(e) 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, no action, suit,
proceeding, or investigation by the SEC to suspend the
effectiveness thereof shall have been initiated and be
continuing.
(f) Tax Opinion. Regions and Morgan shall have
received a written opinion from Alston & Bird LLP and
Wachtell, Lipton, Rosen & Katz, respectively, in a form
reasonably satisfactory to such Party (the "Tax Opinions"),
dated the date of the Effective Time, substantially to
the effect that, (i) the Merger will constitute a
reorganization within the meaning of Section 368(a) of
the Internal Revenue Code, (ii) no gain or loss will be
recognized by holders of Morgan Common Stock who exchange
all of their Morgan Common Stock solely for Regions Common
Stock pursuant to the Merger (except with respect to any
cash received in lieu of a fractional share interest in
Regions Common Stock), (iii) the tax basis of the Regions
Common Stock received (including fractional shares deemed
received and redeemed) by holders of Morgan Common Stock
who exchange all of their Morgan Common Stock solely for
Regions Common Stock in the Merger will be the same as the
tax basis of the Morgan Common Stock surrendered in exchange
for the Regions Common Stock, and (iv) the holding period
of the Regions Common Stock received (including fractional
shares deemed received and redeemed) by holders who exchange
all of their Morgan Common Stock solely for Regions Common
Stock in the Merger will be the same as the holding period
of the Morgan Common Stock surrendered in exchange therefor,
provided that such Morgan Common Stock is held as a capital
asset at the Effective Time. In rendering such Tax Opinions,
such counsel shall be entitled to rely upon representations
of officers of Morgan and Regions reasonably satisfactory
in form and substance to such counsel.
9.2 Conditions to Obligations of Regions. The
obligations of Regions to perform this Agreement and
consummate the Merger and the other transactions contemplated
hereby are subject to the satisfaction of the following
conditions, unless waived by Regions pursuant to
Section 11.6(a) of this Agreement:
(a) Representations and Warranties. For purposes
of this Section 9.2(a), the accuracy of the representations
and warranties of Morgan set forth in this Agreement shall
be assessed as of the date of this Agreement and as of the
Effective Time with the same effect as though all such
representations and warranties had been made on and as
of the Effective Time (provided that representations and
warranties which speak as of the date of this Agreement or
some other date shall speak only as of such date). The
representations and warranties of Morgan set forth in
Sections 5.2(a) and 5.3 of this Agreement shall be true
and correct (except for inaccuracies which are <IT>de
minimis in amount). The representations and warranties
of Morgan set forth in Sections 5.19, 5.21, and 5.22 of
this Agreement shall be true and correct in all material
respects. There shall not exist inaccuracies in the
representations and
warranties of Morgan set forth in this Agreement (including
the representations and warranties set forth in
Sections 5.2(a), 5.3, 5.19, 5.21, and 5.22 of this
Agreement) such that the aggregate effect of such
inaccuracies has, or is reasonably likely to have,
a Material Adverse Effect on Morgan; provided that,
for purposes of this sentence only, those representations
and warranties which are qualified by references to
"material," "Material Adverse Effect," or variations
thereof, or to the "Knowledge" of Morgan or to a matter
being "known" by Morgan shall be deemed not to include
such qualifications.
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(b) Performance of Agreements and Covenants.
Each and all of the agreements and covenants of Morgan to
be performed and complied with pursuant to this Agreement
and the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied
with in all material respects.
(c) Certificates. Morgan shall have delivered to
Regions (i) a certificate, dated as of the Effective Time and
signed on Morgan's behalf by its duly authorized officers, to
the effect that the conditions set forth in Sections 9.2(a)
and 9.2(b) of this Agreement have been satisfied, and (ii)
certified copies of resolutions duly adopted by (1) Morgan's
Board of Directors evidencing the taking of all corporate action
necessary to authorize the execution, delivery, and performance
of this Agreement, and the consummation of the transactions
contemplated hereby, and (2) Morgan's stockholders evidencing
the approval of this Agreement, all in such reasonable detail
as Regions and its counsel shall request.
9.3 Conditions to Obligations of Morgan. The
obligations of Morgan 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 Morgan pursuant to
Section 11.6(b) of this Agreement:
(a) Representations and Warranties. For purposes
of this Section 9.3(a), the accuracy of the representations
and warranties of Regions set forth in this Agreement shall
be assessed as of the date of this Agreement and as of the
Effective Time with the same effect as though all such
representations and warranties had been made on and as
of the Effective Time (provided that representations and
warranties which speak as of the date of this Agreement or
some other date shall speak only as of such date). The
representations and warranties of Regions set forth in
Sections 6.2(a) and 6.3 of this Agreement shall be true
and correct (except for inaccuracies which are <IT>de
minimis in amount). The representations and warranties
of Regions set forth in Sections 6.13, 6.15, and 6.16 of
this Agreement shall be true and correct in all material
respects. There shall not exist inaccuracies in the
representations and
warranties of Regions set forth in this Agreement
(including the representations and warranties set forth
in Sections 6.2(a), 6.3, 6.13, 6.15, and 6.16 of this
Agreement) such that the aggregate effect of such
inaccuracies has, or is reasonably likely to have,
a Material Adverse Effect on Regions; provided that,
for purposes of this sentence only, those representations
and warranties which are qualified by references to
"material," "Material Adverse Effect," or variations
thereof, or to the "Knowledge" of Regions or to a
matter being "known" by Regions shall be deemed not
to include such qualifications.
(b) Performance of Agreements and Covenants. Each
and all of the agreements and covenants of Regions to be
performed and complied with pursuant to this Agreement and
the other agreements contemplated hereby prior to the
Effective Time shall have been duly performed and complied
with in all material respects.
(c) Certificates. Regions shall have delivered
to Morgan (i) a certificate, dated as of the Effective Time
and signed on Regions' behalf by its duly authorized officers,
to the effect that the conditions set forth in Sections 9.3(a)
and 9.3(b) of this Agreement have been satisfied,
and (ii) certified copies of resolutions duly adopted by
Regions' Board of Directors evidencing the taking of all
corporate action necessary to authorize the execution,
delivery, and performance of this Agreement, and the
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consummation of the transactions contemplated hereby, all
in such reasonable detail as Morgan and its counsel shall
request.
ARTICLE 10
Termination
10.1 Termination. Notwithstanding any other
provision of this Agreement, and notwithstanding the approval
of this Agreement by the stockholders of Morgan, 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
Regions and the Board of Directors of Morgan; or
(b) By the Board of Directors of either Party
(provided that the terminating Party is not then in breach
of any representation or warranty contained in this Agreement
under the applicable standard set forth in Section 9.2(a) of
this Agreement in the case of Morgan and Section 9.3(a) of
this Agreement in the case of Regions or in material breach
of any covenant or other agreement contained in this Agreement)
in the event of an inaccuracy of any representation or
warranty of the other Party contained in this Agreement
which cannot be or has not been cured within 30 days after
the giving of written notice to the breaching Party of such
inaccuracy and which inaccuracy would provide the terminating
Party the ability to refuse to consummate the Merger under
the applicable standard set forth in Section 9.2(a) of this
Agreement in the case of Morgan and Section 9.3(a) of this
Agreement in the case of Regions; or
(c) By the Board of Directors of either Party
(provided that the terminating Party is not then in breach
of any representation or warranty contained in this
Agreement under the applicable standard set forth in
Section 9.2(a) of this Agreement in the case of Morgan
and Section 9.3(a) in the case of Regions or in material
breach of any covenant or other agreement contained in
this Agreement) in the event of a material breach by the
other Party of any covenant or agreement contained in this
Agreement 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
(d) By the Board of Directors of either Party in the
event (i) any Consent of any Regulatory Authority required
for consummation of the Merger and the other transactions
contemplated hereby shall have been denied by final
nonappealable action of such authority, or (ii) the stockholders
of Morgan fail to vote their approval of this Agreement at the
Stockholders' Meeting where this Agreement was presented to
such stockholders for approval and voted upon; or
(e) By the Board of Directors of either Party in the
event that the Merger shall not have been consummated by
August 31, 2001, 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 10.1(e).
10.2 Effect of Termination. In the event of the
termination and abandonment of this Agreement pursuant to
Section 10.1 of this Agreement, this Agreement shall become
void and have no effect, and none of Regions, Morgan, any of
their respective Subsidiaries, or
A-46
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 (i) the
provisions of Section 8.5(b) of this Agreement, this Section
10.2, Section 10.3, and Article 11 of this Agreement
shall survive any such termination and
abandonment, and (ii) a termination of this Agreement
shall not relieve the breaching Party from Liability
for an uncured willful breach of a representation,
warranty, covenant, or agreement of such Party contained
in this Agreement. The Termination Fee Agreement shall be
governed by its terms as to its termination.
10.3 Non-Survival of Representations and Covenants.
The respective representations, warranties, obligations,
covenants, and agreements of the Parties shall not survive
the Effective Time, except for those covenants and agreements
which by their terms apply in whole or in part after the
Effective Time.
ARTICLE 11
Miscellaneous
11.1 Definitions. (a) Except as otherwise
provided herein, the capitalized terms set forth below
shall have the following meanings:
<BI>"Acquisition Proposal" with respect to a Party
shall mean any tender offer or exchange offer or any
proposal for a merger, acquisition of all of the stock
or assets of, or other business combination involving such
Party or any of its Subsidiaries or the acquisition of a
substantial equity interest in, or a substantial portion
of the assets of, such Party or any of its Subsidiaries.
<BI>"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.
<BI>"Agreement" shall mean this Agreement and Plan
of Merger, including the
Exhibits delivered pursuant hereto and incorporated
herein by reference.
<BI>"AMEX" shall mean this American Stock Exchange.
<BI>"Average Price" shall mean the average of the daily
volume weighted averages of the trading prices of Regions
Common Stock as reported on the Nasdaq NMS (as reported by
<IT>The Wall Street Journal or, if not reported thereby,
another authoritative source agreed to by Morgan and Regions)
for the ten consecutive full trading days in which such shares
are traded on the Nasdaq NMS ending at the close of trading on
the second full trading day immediately preceding the Effective
Time. If the price of Regions Common Stock is adjusted at any
time following the first day of such period and prior to the
Effective Time by reason of any action by Regions of the nature
described in the second sentence of Section 3.2 of this Agreement,
then all prices preceding such adjustment shall themselves be
adjusted so as to be comparable with those following such adjustment.
<BI>"BHC Act" shall mean the federal Bank Holding Company
Act of 1956, as
amended.
<BI>"CBOE" shall mean the Chicago Board Options Exchange.
<BI>"CFTC" shall mean the Commodities Futures Trading Commission.
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<BI>"Confidentiality Agreement" shall mean that certain
Confidentiality Agreement, dated November 22, 2000, by and
between Morgan and Regions.
<BI>"Consent" shall mean any consent, approval,
authorization, clearance, exemption, waiver, or similar
affirmation by any Person pursuant to any Contract, Law,
Order, or Permit.
<BI>"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.
<BI>"CSE" shall mean the Chicago Stock Exchange.
<BI>"Default" shall mean (i) any breach or violation
of or default under any Contract, 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, 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, Order, or
Permit, where, in any such event, such Default is reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on a Party.
<BI>"Delaware Certificate of Merger" shall mean the
certificate of merger to be executed by Regions and filed
with the Secretary of State of the State of Delaware, relating
to the Merger as contemplated by Section 1.1 of this Agreement.
<BI>"DGCL" shall mean the Delaware General Corporation Law.
<BI>"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 the Comprehensive
Environmental Response Compensation and Liability Act, as
amended, 42 U.S.C. 9601 <IT>et seq. ("CERCLA"), the Resource
Conservation and Recovery Act, as amended, 42 U.S.C. 6901
<IT>et seq.,
and 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.
<BI>"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
<BI>"Exhibits" 1 through 3, 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.
<BI>"Fund Board" shall mean board of trustees or directors
of each Morgan Investment Company.
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<BI>"GAAP" shall mean generally accepted accounting
principles, consistently applied during the periods involved.
<BI>"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 and any polychlorinated biphenyls).
<BI>"HSR Act" shall mean Section 7A of the Clayton Act,
as added by Title II of the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and the rules and
regulations promulgated thereunder.
<BI>"Intellectual Property" shall mean copyrights,
patents, trademarks, service marks, service names, trade
names, applications therefor, technology rights and licenses,
computer software (including any source or object codes
therefor or documentation relating thereto), trade secrets,
franchises, know-how, inventions and other intellectual
property rights.
<BI>"Internal Revenue Code" shall mean the Internal
Revenue Code of 1986, as amended, and the rules and
regulations promulgated thereunder.
<BI>"Investment Advisers Act" shall mean the Investment
Advisers Act of 1940, as amended, and the rules and
regulations promulgated thereunder.
<BI>"Investment Company" shall have the meaning set
forth in the Investment
Company Act.
<BI>"Investment Company Act" shall mean the Investment
Company Act of 1940, as amended, and the rules and regulations
promulgated thereunder.
<BI>"Knowledge" as used with respect to a Person
(including references to such Person being aware of a
particular matter) shall mean the personal knowledge of
the chairman, president, or chief financial officer of such Person.
<BI>"Law" shall mean any code, law, ordinance, regulation,
rule, or statute applicable to a Person or its assets,
Liabilities, or business, including those promulgated,
interpreted, or enforced by any Regulatory Authority.
<BI>"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.
<BI>"Lien" shall mean any mortgage, pledge, reservation,
restriction (other than a restriction on transfers arising
under the Securities Laws), security interest, or claim, 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) for depository
institution Subsidiaries of a Party, pledges to secure deposits,
and other Liens incurred in the ordinary course of the banking
business.
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<BI>"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, or notice (written or oral) by any Person
alleging potential Liability, but shall not include regular,
periodic examinations of depository institutions and their
Affiliates by Regulatory Authorities.
<BI>"Material Adverse Effect" on a Party shall mean an
event, change, or occurrence which, individually or together
with any other event, change, or occurrence, has a material
adverse impact on (i) the financial condition, results of
operations, or business of such Party and its Subsidiaries,
taken as a whole, or (ii) the ability of such Party to
perform its obligations under this Agreement or to consummate
the Merger or the other transactions contemplated by this
Agreement, provided that "Material Adverse Effect" shall not
be deemed to include the impact of (a) changes in banking and
similar Laws of general applicability or interpretations
thereof by courts or governmental authorities, (b) changes
in GAAP or regulatory accounting principles generally applicable
to banks, investment banks, broker-dealers, and their holding
companies, (c) actions and omissions of a Party (or any of its
Subsidiaries) taken with the prior informed consent of the
other Party in contemplation of the transactions contemplated
hereby, (d) general economic or market conditions or the
securities industry in general, and (e) this Agreement or
the announcement thereof.
<BI>"Morgan Common Stock" shall mean the $.625 par value
common stock of Morgan.
<BI>"Morgan Companies" shall mean, collectively, Morgan
and all Morgan
Subsidiaries.
<BI>"Morgan Disclosure Memorandum" shall mean the
written information entitled "Morgan Disclosure Memorandum"
delivered prior to the execution of this
Agreement to Regions describing in reasonable detail the
matters contained therein and, with respect to each
disclosure made therein, specifically referencing each
Section or subsection of this Agreement under which such
disclosure is being made. Information disclosed with respect
to one Section or subsection shall not be deemed to be
disclosed for any other Section or subsection of this
Agreement. The inclusion of any matter in this document
shall not be deemed an admission or otherwise to imply
that any such matter is material for purposes of this Agreement.
<BI>"Morgan Financial Statements" shall mean (i) the
consolidated statements of condition (including related
notes and schedules, if any) of Morgan as of October 31,
2000, and as of July 31, 2000, and 1999, and the related
statements of income, changes in stockholders' equity, and
cash flows (including related notes and schedules, if any)
for the three months ended October 31, 2000 and for each
of the three years ended July 31, 2000, 1999, and 1998,
as filed by Morgan in SEC Documents, and (ii) the
consolidated statements of condition of Morgan (including
related notes and schedules, if any) and related
statement of income, change in stockholders equity,
and cash flows (including related notes and schedules,
if any) included in SEC Documents filed with respect
to periods ended subsequent to October 31, 2000.
<BI>"Morgan Stock Plans" shall mean the existing
stock option and other stock-based compensation plans
of Morgan, including, without limitation, the stock
option plans and programs of any Persons acquired by
Morgan or a Morgan Subsidiary.
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<BI>"Morgan Subsidiaries" shall mean the Subsidiaries
of Morgan, which shall include the Morgan Subsidiaries
described in Section 5.4 of this Agreement and any corporation,
bank, savings association, or other organization acquired
as a Subsidiary of Morgan in the future and owned by Morgan
at the Effective Time.
<BI>"MSRB" shall mean the Municipal Securities
Rulemaking Board.
<BI>"NASD" shall mean the National Association of
Securities Dealers, Inc.
<BI>"Nasdaq NMS" shall mean the National Market
System of The Nasdaq Stock
Market.
<BI>"1933 Act" shall mean the Securities Act of
1933, as amended, and the rules and regulations promulgated
thereunder.
<BI>"1934 Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
<BI>"NYFE" shall mean the New York Futures Exchange, Inc.
<BI>"NYSE" shall mean the New York Stock Exchange, Inc.
<BI>"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 Regulatory Authority.
<BI>"Party" shall mean either Morgan or Regions, and
"Parties" shall mean both Morgan and Regions.
<BI>"Permit" shall mean any federal, state, local,
and foreign governmental approval, authorization,
certificate, easement, filing, franchise, license, or
permit from governmental authorities that are required
for the operation of a Party's respective businesses.
<BI>"Permitted Issuances" shall mean issuances of
Morgan Common Stock pursuant to and in accordance
with (i) the Morgan Deferred Compensation Plan, (ii) the
Morgan 2000 Employee Stock Purchase Plan, (iii) the Morgan
2000 Equity
Compensation Plan which, in the aggregate for the plans
described in clauses (ii) and (iii), are currently estimated
to be 640,000 shares of Morgan Common Stock prior to the
Effective Time, or (iv) issuances of Rights or of Morgan
Common Stock otherwise permitted by Regions.
<BI>"Person" shall mean a natural person or any legal,
commercial, or governmental entity, such as, but not limited
to, 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.
<BI>"PHLX" shall mean the Philadelphia Stock Exchange, Inc.
<BI>"Proxy Statement" shall mean the proxy statement
used by Morgan to solicit the approval of its stockholders
of the transactions contemplated by this Agreement, which
shall include the prospectus of Regions relating to the
issuance of the Regions Common Stock to holders of Morgan
Common Stock.
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<BI>"reasonable efforts" shall mean the reasonable
best efforts of a Party, but shall not require any Party
to take any commercially unreasonable action.
<BI>"Regions Common Stock" shall mean the $.625 par
value common stock of
Regions.
<BI>"Regions Companies" shall mean, collectively,
Regions and all Regions
Subsidiaries.
<BI>"Regions Financial Statements" shall
mean (i) the consolidated statements of condition
(including related notes and schedules, if any) of
Regions as of September 30, 2000 and as of December
31, 1999 and 1998, and the related statements of income,
changes in stockholders' equity, and cash flows
(including related notes and schedules, if any) for the
nine months ended September 30, 2000 and for each of the
three years ended December 31, 1999, 1998, and 1997, as
filed by Regions in SEC Documents, and (ii) the consolidated
statements of condition of Regions (including related notes
and schedules, if any) and related statements of income,
changes in stockholders' equity, and cash flows (including
related notes and schedules, if any) included in SEC
Documents filed with respect to periods ended subsequent
to September 30, 2000.
<BI>"Regions Subsidiaries" shall mean the Subsidiaries
of Regions and any
corporation, bank, savings association, or other organization
acquired as a Subsidiary of Regions in the future and owned
by Regions at the Effective Time.
<BI>"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 Morgan in connection with the
transactions contemplated by this Agreement.
<BI>"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, all state regulatory agencies having jurisdiction
over the Parties and their respective Subsidiaries, the
NASD, the NYSE, and the SEC.
<BI>"Representative" shall mean any investment
banker, financial advisor, attorney, accountant,
consultant, or other representative of a Person.
<BI>"Rights" shall mean, with respect to any
Person, securities, or obligations convertible into
or exercisable for, or giving any Person any right to
subscribe for or acquire, or any options, calls, or
commitments relating to, or any stock appreciation
right or other instrument the value of which is determined
in whole or in part by reference to the market price or
value of, shares of capital stock of such Person.
<BI>"SEC" shall mean the United States Securities
and Exchange Commission.
<BI>"SEC Documents" shall mean all forms, proxy
statements, registration statements, reports, schedules,
and other documents filed, or required to be filed, by a
Party or any of its Subsidiaries with the SEC.
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<BI>"Securities Laws" shall mean the 1933 Act,
the 1934 Act, the Investment
Company Act, the Investment Advisers Act, the Trust
Indenture Act of 1939, as
amended, and the rules and regulations of any Regulatory
uthority promulgated
thereunder.
<BI>"SIA" shall mean the Securities Industry Association.
<BI>"SIPC" shall mean the Securities Investor Protection
Corporation.
<BI>"Stockholders' Meeting" shall mean the meeting of
the stockholders of Morgan to be held pursuant to Section
8.1 of this Agreement, including any adjournment or
adjournments thereof.
<BI>"Subsidiaries" shall have the meaning assigned
in Rule 1-02(x) of Regulation S-X of the SEC; <IT>provided,
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.
<BI>"Superior Proposal" means, with respect to Morgan,
any written Acquisition Proposal made by a Person other
than Regions which is for (i) (a) a merger, reorganization,
consolidation, share exchange, business combination,
recapitalization, liquidation, dissolution, or similar
transaction involving Morgan as a result of which either
(1) Morgan's stockholders prior to such transaction
(by virtue of their ownership of Morgan's shares) in the
aggregate cease to own at least 50% of the voting
securities of the entity surviving or resulting from
such transaction (or the ultimate parent entity thereof)
or (2) the individuals comprising the Board of Directors
of Morgan prior to such transaction do not constitute
a majority of the board of directors of such ultimate
parent entity, (b) a sale, lease, exchange, transfer,
or other disposition of at least 50% of the assets of
Morgan and its Subsidiaries, taken
as a whole, in a single transaction or a series of
related transactions, or (c) the acquisition, directly
or indirectly, by a Person of beneficial ownership of
25% or more of the common stock of Morgan whether by
merger, consolidation, share exchange, business
combination, tender, or exchange offer or otherwise,
and (ii) which is otherwise on terms which the Board
of Directors of Morgan in good faith concludes (after
consultation with its financial advisors and outside
counsel), taking into account, among other things,
all legal, financial, regulatory, and other aspects
of the proposal (including the impact of the Termination
Fee Agreement) and the Person making the proposal,
(a) would, if consummated, result in a transaction
that is more favorable to its stockholders (in their
capacities as stockholders), from a financial point of
view, than the transactions contemplated by this
Agreement, and (b) is reasonably capable of being completed.
<BI>"Support Agreement" shall mean the various
support agreements, each in
substantially the form of Exhibit 1.
<BI>"Surviving Corporation" shall mean Regions
as the surviving corporation resulting from the Merger.
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<BI>"Tax" or <BI>"Taxes" shall mean 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, imposed or required to be
withheld by the United States or any state, local, or
foreign government or subdivision or agency thereof,
including any related interest and penalties, or
additions thereto.
<BI>"Tax Return" shall mean any report, return,
information return, or other information 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.
<BI>"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.
<BI>"TBCA" shall mean the Tennessee Business
Corporation Act.
<BI>"Tennessee Articles of Merger" shall mean
the Articles of Merger executed by Regions and filed
with the Secretary of State of the State of Tennessee
relating to the Merger as contemplated by Section 1.1
of this Agreement.
<BI>"Termination Fee Agreement" shall mean that
certain termination fee agreement by and between Morgan
and Regions substantially in the form of Exhibit 2.
(b) The terms set forth below shall have the
meanings ascribed thereto in the referenced sections:
AdviserSection 8.14
Aggregate Cash Amount Section 3.1(c)
Cash Election Shares Section 3.1(c)
Claim Section 8.11(a)
Client Section 5.25(a)
Closing Section 1.2
Continuing Employees Section 8.10
Covered Parties Section 8.11(b)
Current Forms Section 5.11(c)
Effective Time Section 1.3
Election Deadline Section 3.1(c)
Election Form Section 3.1(c)
Election Form Record Date Section 3.1(c)
Exchange Agent Section 3.1(b)
Exchange Fund Section 4.1(a)
Ratio Section 3.1(b)
Indemnified Parties Section 8.11(a)
Mailing Date Section 3.1(c)
Merger Section 1.1
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Merger Shares Section 3.1(b)
Morgan Benefit Plans Section 5.14(a)
Morgan Contracts Section 5.15(a)
Morgan ERISA Affiliate Section 5.14(e)
Morgan ERISA Plan Section 5.14(a)
Morgan Insiders Section 8.12
Morgan Investment Company Section 5.26(a)
Morgan Pension Plan Section 5.14(a)
Morgan Property Section 5.10(b)
Morgan Rights Section 3.5(a)
Morgan SEC Reports Section 5.5(a)
New Certificates Section 4.1(a)
No Election Shares Section 3.1(c)
Old Certificates Section 3.1(c)
Per Share Cash Consideration Section 3.1(c)
Regions SEC Reports Section 6.5(a)
Stock Designees Section 3.1(c)
Takeover Laws Section 5.21
Tax Opinions Section 9.1(f)
Treasury Shares Section 3.1(b)
(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."
11.2 Expenses. (a) Except as otherwise
provided in this Section 11.2, each of the Parties
shall bear and pay all direct 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 Regions shall bear and pay
the filing fees payable in connection with the
Registration Statement and the
Proxy Statement and one half of the printing costs
incurred in connection with the printing of the
Registration Statement and the Proxy Statement.
(b) Nothing contained in this Section 11.2 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
nonbreaching Party.
11.3 Brokers and Finders. Except for Lazard
Frires & Co. LLC as to Morgan and Salomon Smith Barney
as to Regions, each of the Parties represents and warrants
that neither it nor any of its officers, directors,
employees, or Affiliates has employed any broker or
finder or incurred any Liability for any
advisory fees, investment bankers' fees, brokerage fees,
commissions, or finders' fees in connection with this
Agreement or the transactions contemplated hereby. In
the event of a claim by any broker or finder based
upon his, her, or its representing or being retained
by or allegedly representing or being retained by Morgan
or Regions, each of Morgan and Regions, as the case may
be, agrees
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to indemnify and hold the other Party harmless
of and from any Liability in respect of any such claim.
11.4 Entire Agreement. Except as otherwise
expressly provided herein, this Agreement (including
the Morgan Disclosure Memorandum) 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, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement,
other than as provided in Section 8.13 of this Agreement.
11.5 Amendments. To the extent permitted by Law,
this Agreement may be amended by a subsequent writing signed
by each of the Parties upon the approval of the Boards of
Directors of each of the Parties, whether before or after
stockholder approval of this Agreement has been obtained;
<IT>provided, that the provisions of this Agreement relating
to the manner or basis in which shares of Morgan Common Stock
will be exchanged for Regions Common Stock or cash shall
not be amended after the Stockholders' Meeting without the
requisite approval of the holders of the issued and
outstanding shares of Morgan Common Stock entitled to vote thereon.
11.6 Waivers.
(a) Prior to or at the Effective Time, Regions,
acting through its
Board of Directors, chief executive officer, chief
financial officer, or other authorized officer, shall
have the right to waive any Default in the performance
of any term of this Agreement by Morgan, to waive or
extend the time for the compliance or fulfillment by
Morgan of any and all of its obligations under this Agreement,
and to waive any or all of the conditions precedent to the
obligations of Regions under this Agreement, except any
condition which, if not satisfied, would result in the
violation of any Law. No such waiver shall be effective
unless in writing signed by a duly authorized officer of
Regions except that any unfulfilled conditions shall be
deemed to have been waived at the Effective Time.
(b) Prior to or at the Effective Time, Morgan, acting
through its Board of Directors, chief executive officer,
chief financial officer, or other authorized officer, shall
have the right to waive any Default in the performance of
any term of this Agreement by Regions, to waive or extend
the time for the compliance or fulfillment by Regions of any
and all of its obligations under this Agreement, and to waive
any or all of the conditions precedent to the obligations of
Morgan under this Agreement, except any condition which, if
not
satisfied, would result in the violation of any Law. No such
waiver shall be effective unless in writing signed by a duly
authorized officer of Morgan except that any unfulfilled
conditions shall be deemed to have been waived at the
Effective Time.
(c) 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.
11.7 Assignment. Except as expressly contemplated
hereby, neither this Agreement nor any of the rights,
interests, or obligations hereunder shall be assigned by
any Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party. Subject
to the preceding sentence, this Agreement will be binding upon,
inure
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to the benefit of, and be enforceable by the Parties
and their respective successors and
assigns.
11.8 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:
Morgan: Morgan Keegan, Inc.
Fifty North Front Street
Memphis, Tennessee 38103
Telecopy Number: (901) 529-5344
Attention: Allen B. Morgan, Jr.
Chairman and Chief Executive Officer
Copy to Counsel: Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019-6150
Telecopy Number: (212) 403-2000
Attention: Edward D. Herlihy, Esq.
Regions: Regions Financial Corporation
417 North 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7571
Attention: Richard D. Horsley
Vice Chairman and Executive
Financial Officer
Copy to Counsel: Regions Financial Corporation
417 North 20th Street
Birmingham, Alabama 35203
Telecopy Number: (205) 326-7751
Attention: Samuel E. Upchurch, Jr.
General Counsel
11.9 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, except to the extent that
the Laws of the State of Tennessee relate to the
consummation of the Merger.
11.10 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.
11.11 Captions. The captions contained in this
Agreement are for reference purposes only and are not part
of this Agreement.
11.12 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,
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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.
11.13 Enforcement of Agreement. The Parties
hereto agree that irreparable damage would occur in the
event that any of the provisions of this Agreement was not
performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the
Parties shall be entitled to an injunction or injunctions
to prevent breaches of this Agreement and to enforce
specifically the terms and provisions hereof in any
court of the
United States or any state having jurisdiction, this
being in addition to any other remedy to which they
are entitled at law or in equity.
11.14 Severability. Any term or provision of this
Agreement which is invalid or unenforceable in any jurisdiction
shall, as to that jurisdiction, be ineffective to the extent
of such invalidity or unenforceability without rendering
invalid or unenforceable the remaining terms and provisions
of this Agreement or affecting the validity or enforceability
of any of the terms or provisions of this Agreement in any
other jurisdiction. 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.
IN WITNESS WHEREOF, each of the Parties has caused
this Agreement to be
executed on its behalf and its corporate seal to be
hereunto affixed and attested by officers thereunto as
of the day and year first above written.
ATTEST: MORGAN KEEGAN, INC.
By: /s/ JOSEPH C. WELLER By: /s/ ALLEN B. MORGAN, JR.
--------------------------- ----------------------------------
Joseph C. Weller Allen B. Morgan, Jr.
Secretary Chairman and Chief Executive Officer
[CORPORATE SEAL]
ATTEST: REGIONS FINANCIAL CORPORATION
By: /s/ SAMUEL E. UPCHURCH, JR. By: /s/ CARL E. JONES, JR.
----------------------------- ---------------------------------
Samuel E. Upchurch, Jr. Carl E. Jones, Jr.
Corporate Secretary Executive Officer
President and Chief
[CORPORATE SEAL]
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