Section 424. Amendments of Other Indentures .............................. 46
Section 424. Reserved................................................. 43
Section 424. Mandatory Redemption Upon Sale of Equity............... 41
Section 424. [] The compensation to be paid by BancGroup or Acquired Corporation to the officers and employees of Acquired Corporation under any stock option, employment, or noncompete agreement will be at a rate equal to the fair market value of the services actually performed and will be commensurate with amounts paid to third parties bargaining at arm's length for similar services. In addition none of the compensation to be received by the shareholder-employees of Acquired Corporation will be part of the consideration for their target stock. [] At the time of the merger, Acquired Corporation will not have outstanding any warrants, convertible securities, or any other right pursuant to which any person could acquire stock in Acquired Corporation except for the 138,000 shares of Acquired Corporation stock subject to the Stock Option Agreement. [] The Merger will be consummated in compliance with the material terms of the Agreement and none of the material terms and conditions therein have been waived or modified and BancGroup has no plan or intention to waive or modify any such material condition TAX CONSEQUENCES TO ACQUIRED CORPORATION AND BANCGROUP
Section 424. If the cashless exercise feature constitutes a material modification, such modifications will result in the deemed granting of new options to all holders of incentive stock options. The new options will be subject to the requirements of I.R.C. Section 424 at the date of material modification. The exercise of a disqualified incentive stock option will entitle Acquired Corporation to a compensation deduction when the option is exercised.
Section 424. Colonial Bank will acquire "substantially all" of the assets of Acquired Bank as part of the merger. Generally, the "substantially all" requirement will be satisfied if there is a transfer of assets representing at least 90% of the fair market value of the net assets and at least 70% of the fair market value of the gross assets held by Acquired Bank immediately prior to the transfer. TAX CONSEQUENCES TO ACQUIRED BANK, COLONIAL BANK, AND BANCGROUP
Section 424. Reserved.
Section 424. 4 and Part 426 are revised to clarify that nonsubscriber rates are the same as regular rates.
