EXHIBIT A
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT, dated as of the 3rd day of February, 1999
(the "Agreement"), is by and between FFBS BANCORP, INC., a Delaware corporation
("Issuer"), and NBC CAPITAL CORPORATION, a Mississippi corporation ("Grantee").
WHEREAS, Issuer and Grantee have entered into an Agreement and Plan of
Merger, (the "Merger Agreement"), which agreement has been executed by the
parties hereto immediately prior to this Stock Option Agreement (the
"Agreement"); and
WHEREAS, as a condition and inducement to Grantee's execution of the
Merger Agreement, Grantee has required that Issuer agree, and Issuer has
agreed, to grant Grantee the Option (as defined below);
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, covenants and agreements set forth herein and in
the Merger Agreement, and intending to be legally bound hereby, Issuer and
Grantee agree as follows:
1. Defined Terms. Capitalized terms which are used but not defined herein
shall have the meanings ascribed to such terms in the Merger Agreement.
2. Grant of Option. Subject to the terms and conditions set forth herein,
Issuer hereby grants to Grantee an irrevocable option (the "Option") to
purchase up to 313,551 shares (the "Option Shares") of Common Stock of Issuer,
par value $.01 per share ("Issuer Common Stock"), at a purchase price per
Option Share (the "Purchase Price") equal to $27.00; provided, however, that in
no event shall the number of shares of Issuer Common Stock for which this
Option is exercisable exceed 19.9% of the Issuer's issued and outstanding
shares of Common Stock. The number of shares of Issuer Common Stock that may be
received upon the exercise of the Option and the Purchase Price are subject to
adjustment as herein set forth.
3. Exercise of Option.
(a) Provided that (i) Grantee shall not be in material breach of the
agreements or covenants contained in this Agreement or the Merger Agreement, or
(ii) no preliminary or permanent injunction or other order against the delivery
of the Option Shares issued by any court of competent jurisdiction in the
United States shall be in effect, Grantee may exercise the Option, in whole or
in part, at any time and from time to time, but only following the occurrence
of a Purchase Event (as defined below); provided that the Option shall
terminate and be of no further force or effect upon the earlier to occur of (A)
the Effective Time of the Merger, (B) the termination of the Merger Agreement
in accordance with the terms thereof before the occurrence of a Purchase Event
or a Preliminary Purchase Event (other than a termination of the Merger
Agreement by Grantee pursuant to Section 11.1(g) of the Merger Agreement (an
"Issuer Default Termination"); (C) the close of business on the 365th day after
the occurrence of a termination of the Merger Agreement by an Issuer Default
Termination; and (D) the close of business on the 365th day after termination
of the Merger Agreement following the occurrence of a Purchase Event or a
Preliminary Purchase Event (hereinafter sometimes referred to as the
"Termination Date"); provided that any purchase of Option Shares upon the
exercise of the Option shall be subject to compliance with applicable law,
including, without limitation, the Bank Holding Company Act of 1956 (the
"BHCA"), and any required consent of any regulatory authority. The rights set
forth in Section 8 of this Agreement shall terminate when the right to exercise
the Option terminates (other than as a result of a complete exercise of the
Option) as set forth herein.
(b) As used herein, a "Purchase Event" means any of the following events:
(i) without Grantee's prior written consent, Issuer shall have
authorized, recommended, publicly proposed or publicly announced an
intention to authorize, recommend or propose, or entered into an agreement
with any person (other than Grantee or any subsidiary of Grantee) to effect
an Acquisition Transaction (as defined below). As used herein, the term
"Acquisition Transaction" shall mean (A) a
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merger, consolidation or similar transaction involving Issuer or any of its
subsidiaries (other than transactions solely between Issuer's
subsidiaries), (B) the disposition, by sale, lease, exchange or otherwise,
of assets of Issuer or any of its subsidiaries representing in either case
30% or more of the consolidated assets of Issuer and its subsidiaries or
(C) the issuance, sale or other disposition of (including by way of merger,
consolidation, share exchange or any similar transaction) securities
representing 30% or more of the voting power of Issuer or any of its
significant subsidiaries; or
(ii) any person (other than Grantee or any subsidiary of Grantee)
shall have acquired beneficial ownership (as such term is defined in Rule
13d-3 promulgated under the Securities Exchange Act of 1934, as amended
(the "Exchange Act")) of, or the right to acquire beneficial ownership of,
or any "group" (as such term is defined under the Exchange Act) shall have
been formed which beneficially owns or has the right to acquire beneficial
ownership of, 30% or more (or, if such person or group is the beneficial
owner of 30% of more on the date hereof, such person or group acquires an
additional 5% or more) of the voting power of Issuer or any of its
significant subsidiaries.
(c) As used herein, a "Preliminary Purchase Event" means any of the
following events:
(i) any person (other than Grantee or any subsidiary of Grantee) shall
have commenced (as such term is defined in Rule 14d-2 under the Exchange
Act) or shall have filed a registration statement under the Securities Act
of 1933, as amended (the "Securities Act"), with respect to a tender offer
or exchange offer to purchase any shares of Issuer Common Stock such that,
upon consummation of such offer, such person would own or control 20% or
more of the then outstanding shares of Issuer Common Stock (such an offer
being referred to herein as a "Tender Offer" or an "Exchange Offer,"
respectively); or
(ii) the holders of Issuer Common Stock shall not have approved the
Merger Agreement at the meeting of such shareholders held for the purpose
of voting on the Merger Agreement, such meeting shall not have been held or
shall have been canceled prior to termination of the Merger Agreement or
Issuer's Board of Directors shall have withdrawn or modified in a manner
adverse to Grantee the recommendation of Issuer's Board of Directors with
respect to the Merger Agreement, in each case, after it shall have been
publicly announced that any person (other than Grantee or any subsidiary of
Grantee) shall have (A) made, or disclosed an intention to make, a proposal
to engage in an Acquisition Transaction, (B) commenced a Tender Offer or
filed a registration statement under the Securities Act with respect to an
Exchange Offer or (C) filed an application (or given a notice), whether in
draft or final form, under banking or corporate law or any other applicable
law seeking, including, without limitation, the BHCA, approval to engage in
an Acquisition Transaction.
As used in this Agreement, "person" shall have the meaning specified in
Sections 3(a)(9) and 13(d)(3) of the Exchange Act.
(d) Notwithstanding the foregoing, the obligation of Issuer to issue
Option Shares upon exercise of the Option shall be deferred (but shall not be
terminated): (i) until the receipt of all required governmental or regulatory
approvals or consents necessary for Issuer to issue the Option Shares or Holder
to exercise the Option, or until the expiration or termination of any waiting
period required by law, or (ii) so long as any injunction or other order,
decree or ruling issued by any federal or state court of competent jurisdiction
is in effect which prohibits the sale or delivery of the Option Shares.
(e) Issuer shall notify Grantee promptly in writing of the occurrence of
any Preliminary Purchase Event or Purchase Event, it being understood that the
giving of such notice by Issuer shall not be a condition to the right of
Grantee to exercise the Option.
(f) In the event Grantee wishes to exercise the Option, it shall send to
Issuer a written notice (the date of which being herein referred to as the
"Notice Date") specifying (i) the total number of Option Shares it intends to
purchase pursuant to such exercise and (ii) subject to the next sentence, a
place and date not earlier than three (3) business days nor later than fifteen
(15) business days after the Notice Date for the closing (the "Closing") of
such purchase (the "Closing Date"). If prior notification to or consent of any
regulatory
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authority is required in connection with such purchase, then, notwithstanding
the prior occurrence of the Termination Date, the Closing Date shall be
extended for such period as shall be necessary to enable such prior
notification or consent to occur or to be obtained (and the expiration of any
mandatory waiting period). Issuer shall cooperate with Grantee in the filing of
any applications or documents necessary to obtain any required consent or in
connection with any required prior notification and the Closing shall occur not
earlier than three (3) business days nor later than fifteen (15) business days
following receipt of such consent (or the filing of any such prior notification
and the expiration of any mandatory waiting periods).
4. Payment and Delivery of Certificates.
(a) On each Closing Date, Grantee shall (i) pay to Issuer, in immediately
available funds by wire transfer to a bank account designated by Issuer, an
amount equal to the Purchase Price multiplied by the number of Option Shares to
be purchased on such Closing Date, and (ii) present and surrender this
Agreement to the Issuer at the address of the Issuer specified herein.
(b) At each Closing, simultaneously with the delivery of immediately
available funds and surrender of this Agreement as provided in Section 4(a)
above, (i) Issuer shall deliver to Grantee (A) a certificate or certificates
representing the Option Shares to be purchased at such Closing, which Option
Shares shall be free and clear of all liens, claims, charges and encumbrances
of any kind whatsoever and subject to no pre-emptive rights, and (B) if the
Option is exercised in part only, a new Stock Option Agreement, executed by
Issuer, with the same terms as this Agreement evidencing the right to purchase
the balance of the shares of Issuer Common Stock purchasable hereunder, and
(ii) Grantee shall deliver to Issuer a letter agreeing that Grantee shall not
offer to sell or otherwise dispose of such Option Shares in violation of
applicable federal and state law or of the provisions of this Agreement.
(c) In addition to any other legend that is required by applicable law,
certificates for the Option Shares delivered at each Closing shall be endorsed
with a restrictive legend which shall read substantially as follows:
THE TRANSFER OF THE STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT TO
RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND PURSUANT
TO THE TERMS OF A STOCK OPTION AGREEMENT DATED AS OF FEBRUARY 3, 1999. A COPY
OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER HEREOF WITHOUT CHARGE UPON
RECEIPT BY THE ISSUER OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that (i) the references to the trade
restrictions of the Securities Act in the above legend shall be removed by
delivery of substitute certificate(s) without such legend if Grantee shall have
delivered to Issuer an opinion of counsel in form and substance reasonably
satisfactory to Issuer and its counsel, to the effect that such legend is not
required for purposes of the Securities Act; (ii) the references to the
provisions of this Agreement in the above legend shall be removed by delivery
of substitute certificate(s) without such reference if the shares have been
sold or transferred in compliance with the provisions of this Agreement and
under circumstances that do not require the retention of such reference; and
(iii) the legend shall be removed in its entirety if the conditions in the
preceding clauses (i) and (ii) are both satisfied. In addition, such
certificates shall bear any other legend as may be required by law.
(d) Upon the giving by Grantee to Issuer of the written notice of exercise
of the Option provided for under Section 3(e) of this Agreement, the tender of
the applicable Purchase Price in immediately available funds and the tender of
this Agreement to Issuer, Grantee shall be deemed to be the holder of record of
the shares of Issuer Common Stock issuable upon such exercise, notwithstanding
that the stock transfer books of Issuer shall then be closed or that
certificates representing such shares of Issuer Common Stock shall not then be
actually delivered to Grantee. Issuer shall pay all expenses, and any and all
United States federal, state, and local taxes and other charges that may be
payable in connection with the preparation, issuance and delivery of stock
certificates under this Section in the name of Grantee or its assignee,
transferee, or designee.
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(e) Issuer agrees (i) that it shall at all times maintain, free from pre-
emptive rights, sufficient authorized but unissued or treasury shares of Issuer
Common Stock so that the Option may be exercised without additional
authorization of Issuer Common Stock after giving effect to all other options,
warrants, convertible securities and other rights to purchase Issuer Common
Stock, (ii) that it will not, by amendment to its Articles of Incorporation or
Bylaws or through reorganization, consolidation, merger, dissolution or sale of
assets, or by any other voluntary act, avoid or seek to avoid the observance or
performance of any of the covenants, stipulations or conditions to be observed
or performed hereunder by Issuer, (iii) promptly to take all action as may from
time to time be required (including (A) complying (if applicable) with all
premerger notification, reporting and waiting period requirements specified in
15 U.S.C. (S) 18a and regulations promulgated thereunder and (B) in the event
under any federal or state law, prior notice to consent of any regulatory
authority is necessary before the Option may be exercised, cooperating fully
with Grantee in preparing any required application or notice and providing such
information to such regulatory authority as such regulatory authority may
require) in order to permit Grantee to exercise the Option and Issuer duly and
effectively to issue shares of Issuer Common Stock pursuant hereto, and (iv)
promptly to take all action provided herein to protect the rights of Grantee
against dilution.
5. Representations and Warranties of Issuer. Issuer hereby represents and
warrants to Grantee as follows:
(a) Due Authorization. Issuer has all requisite corporate power and
authority to enter into this Agreement and, subject to any approvals referred
to herein, to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized by all necessary corporate action
on the part of Issuer. This Agreement has been duly executed and delivered by
Issuer.
(b) Authorized Stock. Issuer has taken all necessary corporate and other
action to authorize and reserve and to permit it to issue, and, at all times
from the date hereof until the obligation to deliver Issuer Common Stock upon
the exercise of the Option terminates, will have reserved for issuance, upon
exercise of the Option, the number of shares of Issuer Common Stock necessary
for Grantee to exercise the Option, and Issuer will take all necessary
corporate action to authorize and reserve for issuance all additional shares of
Issuer Common Stock or other securities which may be issued pursuant to Section
7 of this Agreement upon exercise of the Option. The shares of Issuer Common
Stock to be issued upon due exercise of the Option, including all additional
shares of Issuer Common Stock or other securities which may be issuable
pursuant to Section 7 of this Agreement, upon issuance pursuant hereto, shall
be duly and validly issued, fully paid and nonassessable, and shall be
delivered free and clear of all liens, claims, charges and encumbrances of any
kind or nature whatsoever, including any pre-emptive right of any shareholder
of Issuer, but subject to the voting restrictions contained in the Certificate
of Incorporation of Issuer.
(c) No Violation. Except as disclosed pursuant to the Merger Agreement,
the execution and delivery of this Agreement does not, and the consummation of
the transactions contemplated hereby will not, conflict with, or result in any
violation pursuant to any provisions of the Certificate of Incorporation,
Charter or Bylaws of Issuer or any subsidiary of Issuer or, subject to
obtaining any approvals or consents contemplated hereby, result in any
violation of any loan or credit agreement, note, mortgage, indenture, lease,
plan or other agreement, obligation, instrument, permit, concession, franchise,
license, judgment, order, decree, statute, law, ordinance, rule or regulation
applicable to Issuer or any subsidiary of Issuer or their respective properties
or assets which violation would have a material adverse effect on the condition
of Issuer on a consolidated basis.
6. Representations and Warrants of Grantee. Grantee hereby represents and
warrants to Issuer that:
(a) Due Authorization. Grantee has all requisite corporate power and
authority to enter into this Agreement and, subject to any approvals or
consents referred to herein, to consummate the transactions contemplated
hereby. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of Grantee. This Agreement has been duly executed
and delivered by Grantee.
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(b) Purchase Not for Distribution. This Option is not being, and any
Option Shares or other securities acquired by Grantee upon exercise of the
Option will not be, acquired with a view to the public distribution thereof and
will not be transferred or otherwise disposed of except in a transaction
registered or exempt from registration under the Securities Act.
7. Adjustment Upon Changes in Capitalization, Etc.
(a) In the event of any change in Issuer Common Stock by reason of a stock
dividend stock split, split-up, recapitalization, combination, exchange of
shares or similar transaction, the type and number of shares or securities
subject to the Option, and the Purchase Price therefor, shall be adjusted
appropriately, and proper provision shall be made in the agreements governing
such transaction so that Grantee shall receive, upon exercise of the Option,
the number and class of shares or other securities or property that Grantee
would have received in respect of Issuer Common Stock if the Option had been
exercised immediately prior to such event, or the record date therefor, as
applicable. If any additional shares of Issuer Common Stock are issued after
the date of this Agreement (other than pursuant to an event described in the
first sentence of this Section 7(a)), the number of shares of Issuer Common
Stock subject to the Option shall be adjusted so that, after such issuance, the
Option, together with any shares of Issuer Common Stock previously issued
pursuant hereto, equals 19.9% of the number of shares of Issuer Common Stock
then issued and outstanding, without giving effect to any shares subject to or
issued pursuant to the Option.
(b) In the event that, prior to the Termination Date, Issuer shall enter
into an agreement: (i) to consolidate with or merge into any person, other than
Grantee or one of its subsidiaries, and shall not be the continuing or
surviving corporation of such consolidation or merger, (ii) to permit any
person, other than Grantee or one of its subsidiaries, to merge into Issuer
where Issuer shall be the continuing or surviving corporation, but, in
connection with such merger, the then outstanding shares of Issuer Common Stock
shall be changed into or exchanged for stock or other securities of Issuer or
any other person or cash or any other property or the outstanding shares of
Issuer Common Stock immediately prior to such merger shall after such merger
represent less than 50% of the outstanding shares and share equivalents of the
merged company, or (iii) to sell or otherwise transfer all or substantially all
of its assets to any person, other than Grantee or one of its subsidiaries,
then, and in each such case, the agreement governing such transaction shall
make proper provisions so that, upon the consummation of any such transaction
and upon the terms and conditions set forth herein, the Option, notwithstanding
the fact that as of the date of consummation of such transaction the
Termination Date shall have occurred, shall be converted into, or exchanged
for, an option (the "Substitute Option"), at the election of Grantee, of either
(x) the Acquiring Corporation (as defined below), (y) any person that controls
the Acquiring Corporation, or (z) in the case of a merger described in clause
(ii), the Issuer (in each case, such entity being referred to as the
"Substitute Option Issuer").
(c) The Substitute Option shall have the same terms as the Option,
provided that, if the terms of the Substitute Option cannot, because of the
applicability of any law or regulation, have the exact terms as the Option,
such terms shall be as similar as possible and in no event less advantageous to
Grantee. The Substitute Option Issuer shall also enter into an agreement with
the then-holder or holders of the Substitute Option in substantially the same
form as this Agreement, which shall be applicable to the Substitute Option.
(d) The Substitute Option shall be exercisable for such number of shares
of the Substitute Common Stock (as hereinafter defined) as is equal to the
Assigned Value (as hereinafter defined) multiplied by the number of shares of
the Issuer Common Stock for which the Option was theretofore exercisable,
divided by the Average Price (as hereinafter defined). The exercise price of
each share of Substitute Common Stock subject to the Substitute Option (the
"Substitute Purchase Price") shall be equal to the Purchase Price multiplied by
a fraction in which the numerator is the number of shares of the Issuer Common
Stock for which the Option was theretofore exercisable and the denominator is
the number of shares for which the Substitute Option is exercisable.
(e) The following terms have the meanings indicated:
(i) "Acquiring Corporation" shall mean (x) the continuing or surviving
corporation of a consolidation or merger with (if other than Issuer), (y)
the Issuer in a consolidation or merger or in which
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the Issuer is the continuing or surviving corporation, and (z) the
transferee of all or any substantial part of the Issuer's assets (or the
assets of its subsidiaries).
(ii) "Assigned Value" shall mean the highest of (x) the price per
share of the Issuer Common Stock at which a Tender Offer or Exchange Offer
therefor has been made by any person (other than Grantee), (y) the price
per share of the Issuer Common Stock to be paid by any person (other than
the Grantee) pursuant to an agreement with Issuer, and (z) the highest last
sales price per share of Issuer Common Stock quoted on any national
securities exchange (including the NASDAQ--National Market System) (or if
Issuer Common Stock is not quoted on any such national securities exchange,
the highest bid price per share on any day as quoted on the principal
trading market or securities exchange on which such shares are traded as
reported by a recognized source chosen by Grantee) within the six-month
period immediately preceding the agreement described in Section 7(b) above;
provided, however, that in the event of a sale of less than all of Issuer's
assets, the Assigned Value shall be the sum of the price paid in such sale
for such assets and the current market value of the remaining assets of
Issuer as determined by a nationally recognized investment banking firm
selected by Grantee, divided by the number of shares of the Issuer Common
Stock outstanding at the time of such sale. In the event a Tender Offer or
Exchange Offer is made for the Issuer Common Stock or an agreement is
entered into for a merger or consolidation involving consideration other
than cash, the value of the securities or other property issuable or
deliverable in exchange for the Issuer Common Stock shall be determined by
a nationally recognized investment banking firm mutually selected by
Grantee and Issuer (or if applicable, Acquiring Corporation), provided that
if a mutual selection cannot be made as to such investment banking firm, it
shall be selected by Grantee.
(iii) "Average Price" shall mean the average last sales price of a
share of the Substitute Common Stock for the one year immediately preceding
the consolidation, merger or sale in question, as quoted on any national
securities exchange (including the NASDAQ National Market System), and if
the Substitute Common Stock is not quoted on any such national securities
exchange, the average of the bid price for the one year period described
above, as quoted on the principal trading market or securities exchange on
which such Substitute Common Stock is traded, as reported by a recognized
source, as chosen by Grantee, but in no event higher than the last sales
price or closing price or the bid price of the shares of the Substitute
Common Stock on the day preceding such consolidation, merger, or sale;
provided that if Issuer is the issuer of the Substitute Option, the Average
Price shall be computed with respect to a share of common stock issued by
Issuer, the person merging into Issuer or by any company which controls or
is controlled by such person, as Grantee may elect.
(iv) "Substitute Common Stock" shall mean the common stock issued by
the Substitute Option Issuer upon the exercise of the Substitute Option.
(f) In no event pursuant to any of the foregoing paragraphs shall the
Substitute Option be exercisable for more than 19.9% of the aggregate of the
shares of the Substitute Common Stock outstanding prior to exercise of the
Substitute Option. In the event that the Substitute Option would be exercisable
for more than 19.9% of the aggregate of the shares of the Substitute Common
Stock but for this clause (f), the Substitute Option Issuer shall make a cash
payment to Grantee equal to the amount of (i) the value of the Substitute
Option without giving effect to the limitation in this clause (f) in excess of
(ii) the value of the Substitute Option after giving effect to the limitation
in this clause (f). This difference in value shall be determined by a
nationally recognized investment banking firm selected by Grantee.
(g) Issuer shall not enter into any transaction described in subsection
(b) of this Section 7 unless the Acquiring Corporation and any person that
controls the Acquiring Corporation assumes in writing all of the obligations of
Issuer hereunder and takes all other actions that may be necessary so that the
provisions of this Section 7 are given full force and effect (including,
without limitation, any action that may be necessary so that the shares of
Substitute Common Stock are in no way distinguished from or have lesser
economic value (other than any diminution resulting from the fact that the
Substitute Common Stock is "restricted securities" within the meaning of Rule
144 under the Securities Act) than other shares of common stock issued by the
Substitute Option Issuer).
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(h) The provisions of Sections 8, 9 and 10 shall apply, with appropriate
adjustments, to any securities for which the Option becomes exercisable
pursuant to this Section 7 and, as applicable, references in such sections to
"Issuer," "Option," "Purchase Price," and "Issuer Common Stock" shall be deemed
to be references to "Substitute Option Issuer," "Substitute Option,"
"Substitute Purchase Price," and "Substitute Common Stock," respectively.
8. Repurchase at the Option of Grantee.
(a) Subject to the last sentence of Section 3(a) of this Agreement, at the
request of Grantee at any time commencing upon the first occurrence of a
Repurchase Event (as defined in Section 8(d)) and ending at the close of
business 365 days thereafter, Issuer shall repurchase from Grantee the Option
and all shares of Issuer Common Stock purchased by Grantee pursuant hereto with
respect to which Grantee then has beneficial ownership. The date on which
Grantee exercises its rights under this Section 8 is referred to as the
"Request Date." Such repurchase shall be at an aggregate price (the "Section 8
Repurchase Consideration") equal to the sum of:
(i) the aggregate Purchase Price paid by Grantee for any shares of
Issuer Common Stock acquired pursuant to complete or partial exercise of
the Option with respect to which Grantee then has beneficial ownership;
(ii) the excess, if any, of (x) the Applicable Price (as defined
below) for each share of Issuer Common Stock over (y) the Purchase Price
(subject to adjustment pursuant to Section 7), multiplied by the number of
shares of Issuer Common Stock with respect to which the Option has not been
exercised; and
(iii) the excess, if any, of the Applicable Price over the Purchase
Price (subject to adjustment pursuant to Section 7) paid (or, in the case
of Option Shares with respect to which the Option has been exercised but
the Closing Date has not occurred, payable) by Grantee for each share of
Issuer Common Stock with respect to which the Option has been exercised and
with respect to which Grantee then has beneficial ownership, multiplied by
the number of such shares.
(b) If Grantee exercises its rights under this Section 8, Issuer shall,
within ten (10) business days after the Request Date, pay the Section 8
Repurchase Consideration to Grantee in immediately available funds, and
contemporaneously with such payment Grantee shall surrender to Issuer the
Option and the certificates evidencing the shares of Issuer Common Stock
purchased thereunder with respect to which Grantee then has beneficial
ownership, and Grantee shall warrant that it has sole record and beneficial
ownership of such shares and that the same are then free and clear of all
liens, claims, charges and encumbrances of any kind whatsoever. Notwithstanding
the foregoing, to the extent that prior notification to or Consent of any
Regulatory Authority is required in connection with the payment of all or any
portion of the Section 8 Repurchase Consideration, or Issuer is prohibited
under applicable law or regulation, or as a consequence of administrative
policy, from repurchasing the Option and/or the Option Shares in full, Issuer
shall immediately so notify Grantee and thereafter deliver from time to time,
and as permitted by applicable law or regulation, that portion of the Section 8
Repurchase Consideration that it is not then so prohibited from paying within
five business days after the date on which Issuer is no longer prohibited;
provided, however, that if Issuer at any time is prohibited under applicable
law or regulation, or as a consequence of administrative policy, from
delivering to the Grantee the Section 8 Repurchase Consideration, in full (and
Issuer hereby undertakes to use its best efforts to obtain all required
consents of regulatory authorities and to file any required notices as promptly
as practicable in order to accomplish such repurchase), the Grantee may, at its
option, revoke its request that Issuer repurchase the Option or the Option
Shares either in whole or to the extent of the prohibition, whereupon, in the
latter case, Issuer shall promptly (i) deliver to the Grantee that portion of
the Section 8 Repurchase Consideration that Issuer is not prohibited from
delivering; and (ii) deliver, to the Grantee either (A) a new Stock Option
Agreement evidencing the right of Issuer to purchase that number of shares of
Common Stock obtained by multiplying the number of shares of Common Stock for
which the surrendered Stock Option Agreement was exercisable at the time of
delivery of the notice of repurchase by a fraction, the numerator of which is
the Section 8 Repurchase Consideration less the portion thereof theretofore
delivered to
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the Grantee and the denominator of which is the Section 8 Repurchase
Consideration, or (B) a certificate for the Option Shares it is then prohibited
from repurchasing.
Notwithstanding anything herein to the contrary, all of Grantee's rights
under this Section 8 shall terminate on the Termination Date of this Option
pursuant to Section 3(a) of this Agreement.
(c) For purposes of this Agreement, the "Applicable Price" means the
highest of: (i) the highest price per share of Issuer Common Stock paid for any
such share by the person or groups described in Section 8(d)(i) below; (ii) the
price per share of Issuer Common Stock received by holders of Issuer Common
Stock in connection with any merger or other business combination transaction
described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii) above; or (iii) the highest
last sales price per share of Issuer Common Stock quoted on any national
securities exchange (including the NASDAQ--National Market System) (or if
Issuer Common Stock is not quoted on any such national securities exchange, the
highest bid price per share as quoted on the principal trading market or
securities exchange on which such shares are traded as reported by a recognized
source chosen by Grantee) during the sixty (60) business days preceding the
Request Date; provided, however, that in the event of a sale of less than all
of Issuer's assets, the Applicable Price shall be the sum of the price paid in
such sale for such assets and the current market value of the remaining assets
of Issuer as determined by a nationally recognized investment banking firm
selected by Grantee, divided by the number of shares of the Issuer Common Stock
outstanding at the time of such sale. If the consideration to be offered, paid
or received pursuant to either of the foregoing clauses (i) or (ii) shall be
other than in cash, the value of such consideration shall be determined in good
faith by an independent nationally recognized investment banking firm selected
by Grantee and reasonably acceptable to Issuer and reasonably acceptable to
Issuer, which determination shall be conclusive for all purposes of this
Agreement.
(d) As used herein, a "Repurchase Event" shall occur if (i) any person
(other than Grantee or any subsidiary of Grantee) shall have acquired
beneficial ownership of (as such term is defined in Rule 13d-3 promulgated
under the Exchange Act), or the right to acquire beneficial ownership of, or
any "group" (as such term is defined under the Exchange Act) shall have been
formed which beneficially owns or has the right to acquire beneficial ownership
of, 50% or more of the then outstanding shares of Issuer Common Stock, or (ii)
any of the transactions described in Section 7(b)(i), 7(b)(ii) or 7(b)(iii) of
this Agreement shall be consummated.
9. Registration Rights.
(a) Demand Registration Rights. Issuer shall, subject to the conditions of
subparagraph (c) below, if requested by Grantee, as expeditiously as possible
prepare and file a registration statement under the Securities Act if such
registration is necessary in order to permit the sale or other disposition of
any or all shares of Issuer Common Stock or other securities that have been
acquired by or are issuable to Grantee upon exercise of the Option in
accordance with the intended method of sale or other disposition stated by
Grantee in such request, including without limitation a "shelf" registration
statement under Rule 415 under the Securities Act or any successor provision,
and Issuer shall use its best efforts to qualify such shares or other
securities for sale under any applicable state securities laws.
(b) Additional Registration Rights. If Issuer at any time after the
exercise of the Option proposes to register any shares of Issuer Common Stock
under the Securities Act in connection with an underwritten public offering of
such Issuer Common Stock, Issuer will promptly give written notice to Grantee
(any permitted transferee) of its intention to do so and, upon the written
request of Grantee (or any such permitted transferee of Grantee) given within
30 days after receipt of any such notice (which request shall specify the
number of shares of Issuer Common Stock intended to be included in such
underwritten public offering by Grantee (or such permitted transferee)), Issuer
will cause all such shares, the holders of which shall have requested
participation in such registration, to be so registered and included in such
underwritten public offering; provided, that the Issuer may elect not to cause
all of the shares for which the Grantee has requested participation in such
registration to be registered and included in such underwritten public offering
(i) if the
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underwriters, for good business reasons and in good faith, object to such
inclusion or (ii) in the case of a registration solely to implement a dividend
reinvestment or similar plan, an employee benefit plan or a registration filed
on Form S-4 or any successor form, or a registration filed on a form which
does not permit registration of resales; provided further, that such election
pursuant to clause (i) may be made only one time. If some but not all the
shares of Issuer Common Stock, with respect to which Issuer shall have
received requests for registration pursuant to this subparagraph (b), shall be
excluded from such registration, Issuer shall make appropriate allocation of
shares to be registered among selling holders of Option Shares and any other
person (other than Issuer or any person exercising demand registration rights
in connection with such registration) who or which is permitted to register
their shares of Issuer Common Stock in connection with such registration pro
rata in the proportion that the number of shares requested to be registered by
each selling holder of Option Shares bears to the total number of shares
requested to be registered by all persons then desiring to have Issuer Common
Stock registered for sale.
(c) Conditions to Required Registration. Issuer shall use all reasonable
efforts to cause each registration statement referred to in subparagraph (a)
above to become effective and to obtain all consents or waivers of other
parties which are required therefor and to keep such registration statement
effective, provided, however, that Issuer may delay any registration of Option
Shares required pursuant to subparagraph (a) above for a period not exceeding
90 days in the event that Issuer shall in good faith determine that any such
registration would adversely affect an offering or contemplated offering of
other securities by Issuer, and Issuer shall not be required to register
Option Shares under the Securities Act pursuant to subparagraph (a) above:
(i) prior to the earliest of (a) termination of the Merger Agreement,
and (b) a Purchase Event;
(ii) on more than two occasions;
(iii) more than once during any calendar year; and
(iv) within 90 days after the effective date of a registration
referred to in subparagraph (b) above pursuant to which the holder or
holders of the Option Shares concerned were afforded the opportunity to
register such shares under the Securities Act and such shares were
registered as requested.
(v) unless a request therefor is made to Issuer by selling holders of
Option Shares holding at least 25% or more of the aggregate number of
Option Shares then outstanding.
In addition to the foregoing, Issuer shall not be required to maintain
the effectiveness of any registration statement after the expiration of 180
days from the effective date of such registration statement. Issuer shall use
all reasonable efforts to make any filings, and take all steps, under all
applicable state securities laws to the extent necessary to permit the sale or
other disposition of the Option Shares so registered in accordance with the
intended method of distribution for such shares, provided, that Issuer shall
not be required to consent to general jurisdiction or qualify to do business
in any state where it is not otherwise required to so consent to such
jurisdiction or to so qualify to do business.
(d) Expenses. Except where applicable state law prohibits such payments,
Issuer will pay all of its expenses (including, without limitation,
registration fees, qualification fees, blue sky fees and expenses, legal
expenses, printing expenses and the costs of special audits or "cold comfort"
letters, expenses of underwriters, excluding discounts and commissions but
including liability insurance if Issuer so desires or the underwriters so
require, and the reasonable fees and expenses of any necessary special
experts) in connection with each registration pursuant to subparagraph (a) or
(b) above (including the related offerings and sales by holders of Option
Shares) and all other qualifications, notifications or exemptions pursuant to
subparagraph (a) or (b) above; provided, however, that fees and expenses of
counsel to the selling holders of Option Shares and any other expenses
(including underwriting discounts and commissions relating to the sale of
Option Shares) incurred by the selling holders of Option Shares in connection
with such registration shall be borne by the selling holders of Option Shares.
(e) Indemnification. In connection with any registration under
subparagraph (a) or (b) above Issuer hereby indemnifies the holder of the
Option Shares, and each underwriter thereof, including each person, if any,
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who controls such holder or underwriter within the meaning of Section 15 of the
Securities Act, against all expenses, losses, claims, damages and liabilities
caused by any untrue, or alleged untrue, statement of a material fact contained
in any registration statement or prospectus or notification or offering
circular (including any amendments or supplements thereto) or any preliminary
prospectus, or caused by any omission, or alleged omission, to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such expenses, losses, claims,
damages or liabilities of such indemnified party are caused by any untrue
statement or alleged untrue statement that was included by Issuer in any such
registration statement or prospectus or notification or offering circular
(including any amendments or supplements thereto) in reliance upon and in
conformity with, information furnished in writing to Issuer by such indemnified
party expressly for use therein, and Issuer and each officer, director and
controlling person of Issuer shall be indemnified by such holder of the Option
Shares, or by such underwriter, as the case may be, for all such expenses,
losses, claims, damages and liabilities caused by any untrue, or alleged
untrue, statement, that was included by Issuer in any such registration
statement or prospectus or notification or offering circular (including any
amendments or supplements thereto) in reliance upon, and in conformity with,
information furnished in writing to Issuer by such holder or such underwriter,
as the case may be, expressly for such use.
Promptly upon receipt by a party indemnified under this subparagraph (e)
of notice of the commencement of any action against such indemnified party in
respect of which indemnity or reimbursement may be sought against any
indemnifying party under this subparagraph (e), such indemnified party shall
notify the indemnifying party in writing of the commencement of such action,
but the failure so to notify the indemnifying party shall not relieve it of any
liability which it may otherwise have to any indemnified party under this
subparagraph (e) provided such failure does not prejudice Issuer. In case
notice of commencement of any such action shall be given to the indemnifying
party as above provided, the indemnifying party shall be entitled to
participate in and, to the extent it may wish, jointly with any other
indemnifying party similarly notified, to assume the defense of such action at
its own expense, with counsel chosen by it and satisfactory to such indemnified
party. The indemnified party shall have the right to employ separate counsel in
any such action and participate in the defense thereof, but the fees and
expenses of such counsel (other than reasonable costs of investigation) shall
be paid by the indemnified party unless (i) the indemnifying party either
agrees to pay the same, (ii) the indemnifying party fails to assume the defense
of such action with counsel satisfactory to the indemnified party, or (iii) the
indemnified party has been advised by counsel that one or more legal defenses
may be available to the indemnifying party that may be contrary to the interest
of the indemnified party, in which case the indemnifying party shall be
entitled to assume the defense of such action notwithstanding its obligation to
bear fees and expenses of such counsel. No indemnifying party shall be liable
for any settlement entered into without its consent, which consent may not be
unreasonably withheld.
If the indemnification provided for in this subparagraph (e) is
unavailable to a party otherwise entitled to be indemnified in respect of any
expenses, losses, claims, damages or liabilities referred to herein, then the
indemnifying party, in lieu of indemnifying such party otherwise entitled to be
indemnified, shall contribute to the amount paid or payable by such party to be
indemnified as a result of such expenses, losses, claims, damages or
liabilities in such proportion as is appropriate to reflect the relative
benefits received by Issuer, the selling shareholders and the underwriters from
the offering of the securities and also the relative fault of Issuer, the
selling shareholders and the underwriters in connection with the statements or
omissions which resulted in such expenses, losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The amount
paid or payable by a party as a result of the expenses, losses, claims, damages
and liabilities referred to above shall be deemed to include any legal or other
fees or expenses reasonably incurred by such party in connection with
investigating or defending any action or claim; provided, however, that in no
case shall the holders of the Option Shares be responsible, in the aggregate,
for any amount in excess of the net offering proceeds attributable to its
Option Shares included in the offering. No person guilty of fraudulent
misrepresentation (with the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. Any obligation by any holder to indemnify shall
be several and not joint with other holders.
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In connection with any registration pursuant to subparagraph (a) or (b)
above, Issuer and each holder of any Option Shares (other than Grantee) shall
enter into an agreement containing the indemnification provisions of this
subparagraph (e).
(f) Miscellaneous Reporting. Issuer shall comply with all reporting
requirements and will do all such other things as may be necessary to permit
the expeditious sale at any time of any Option Shares by the holder thereof in
accordance with and to the extent permitted by any rule or regulation
promulgated by the SEC from time to time. Issuer shall at its expense provide
the holder of any Option Shares with any information necessary in connection
with the completion and filing of any reports or forms required to be filed by
them under the Securities Act or the Exchange Act, or required pursuant to any
state securities laws or the rules of any stock exchange.
10. Quotation; Listing. If Issuer Common Stock or any other securities to
be acquired upon exercise of the Option are then authorized for quotation or
trading or listing on the NASDAQ National Market or any other securities
exchange or any automated quotations system maintained by a self-regulatory
organization, Issuer will promptly file an application, if required, to
authorize for quotation or trading or listing the shares of Issuer Common Stock
or other securities to be acquired upon exercise of the Option on the NASDAQ
National Market or any other securities exchange or any automated quotations
system maintained by a self-regulatory organization and will use its best
efforts to obtain approval, if required, of such quotation or listing as soon
as practicable.
11. Division of Option. This Agreement (and the Option granted hereby) are
exchangeable, without expense, at the option of Grantee, upon presentation and
surrender of this Agreement at the principal office of Issuer for other
Agreements providing for Options of different denominations entitling the
holder thereof to purchase in the aggregate the same number of shares of Issuer
Common Stock purchasable hereunder. The terms "Agreement" and "Option" as used
herein include any other Agreements and related Options for which this
Agreement (and the Option granted hereby) may be exchanged. Upon receipt by
Issuer of evidence reasonably satisfactory to it of the loss, theft,
destruction or mutilation of this Agreement, and (in the case of loss, theft or
destruction) of reasonably satisfactory indemnification, and upon surrender and
cancellation of this Agreement, if mutilated, Issuer will execute and deliver a
new Agreement of like tenor and date. Any such new Agreement executed and
delivered shall constitute an additional contractual obligation on the part of
Issuer, whether or not the Agreement so lost, stolen, destroyed or mutilated
shall at any time be enforceable by anyone.
12. Miscellaneous.
(a) Expenses. Except as otherwise provided in Section 9 of this Agreement,
each of the parties hereto shall bear and pay all costs and expenses incurred
by it or on its behalf in connection with the transactions contemplated
hereunder, including fees and expenses of its own financial consultants,
investment bankers, accountants and counsel.
(b) Waiver and Amendment. Any provision of this Agreement may be waived at
any time by the party that is entitled to the benefits of such provision if
such waiver is in writing. This Agreement may not be modified, amended, altered
or supplemented except upon the execution and delivery of a written agreement
executed by the parties hereto.
(c) Entire Agreement; No Third-Party Beneficiary; Severability. This
Agreement, together with the Merger Agreement and the other documents and
instruments referred to herein and therein, between Grantee and Issuer (a)
constitutes the entire agreement and supersedes all prior agreements and
understandings, both written and oral, between the parties with respect to the
subject matter hereof and (b) is not intended to confer upon any person other
than the parties hereto (other than any transferees of the Option Shares or any
permitted transferee of this Agreement pursuant to Section 12(h)) any rights or
remedies hereunder. If any term, provision, covenant or restriction of this
Agreement is held by a court of competent jurisdiction or a
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federal or state regulatory agency to be invalid, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions of this
Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated. If for any reason such court or regulatory
agency determines that the Option does not permit Grantee to acquire, or does
not require Issuer to repurchase, the full number of shares of Issuer Common
Stock as provided in Sections 3 and 8 (as adjusted pursuant to Section 7), it
is the express intention of Issuer to allow Grantee to acquire or to require
Issuer to repurchase such lesser number of shares as may be permissible without
any amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Delaware without regard to any
applicable conflicts of law rules.
(e) Descriptive Headings. The descriptive headings contained herein are
for convenience of reference only and shall not affect in any way the meaning
or interpretation of this Agreement, except to the extent that federal law may
apply.
(f) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation) or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
for a party as shall be specified by like notice):
If to Issuer to:E. Xxxxx Xxxxxxx, III
First Federal Bank for Savings
Post Xxxxxx Xxx 000
Xxxxxxxx XX 00000-0000
With a copy to:Xxxxxxx X. Xxxxxx
Xxxxxxx, Spidi, Sloane & Xxxxx, P.C.
One Franklin Square
0000 X. Xxxxxx, X.X.
Xxxxx 000 Xxxx
Xxxxxxxxxx, XX 00000
If to Grantee to:Xxxxx X. Xxxxxxx
National Bank of Commerce
Xxxx Xxxxxx Xxx 0000
Xxxxxxxxxx XX 00000
With a copy to:Hunter X. Xxxxxxx
Xxxxxxx, Xxxxx & Xxxxxxx
Xxxx Xxxxxx Xxx 0000
Xxxxxxxx XX 00000-0000
(g) Counterparts. This Agreement and any amendments hereto may be executed
in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed,
it being understood that both parties need not sign the same counterpart.
(h) Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder or under the Option shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party, except that Grantee may assign this
Agreement to a wholly owned subsidiary of Grantee and Grantee may assign its
rights hereunder in whole or in part after the occurrence of a Purchase Event;
provided, however, that until the Federal Reserve has approved an application
by Grantee to acquire the shares of Issuer Common Stock subject to the Option,
Grantee may not assign its rights under the Option except in (i) a widely
dispersed public distribution, (ii) a private placement in which no one party
acquires the right to purchase in excess of 2% of the voting shares of Issuer,
(iii) an assignment to a
A-12
single party (e.g., a broker or investment banker) for the purpose of
conducting a widely dispersed public distribution on Grantee's behalf or (iv)
any other manner approved by the Federal Reserve. Any such assignment shall be
in compliance with all applicable laws. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
(i) Further Assurances. In the event of any exercise of the Option by
Grantee, Issuer and Grantee shall execute and deliver all other documents and
instruments and take all other action that may be reasonably necessary in order
to consummate the transactions provided for by such exercise.
(j) Specific Performance. The parties hereto agree that this Agreement may
be enforced by either party through specific performance, injunctive relief and
other equitable relief. Both parties further agree to waive any requirement for
the securing or posting of any bond in connection with the obtaining of any
such equitable relief and that this provision is without prejudice to any other
rights that the parties hereto may have for any failure to perform this
Agreement.
IN WITNESS WHEREOF, Issuer and Grantee have caused this Agreement to be
signed by their respective officers thereunto duly authorized, all as of the
day and year first written above.
FFBS BANCORP, INC., a Delaware
corporation
BY: /s/ E. Xxxxx Xxxxxxx, III
-------------------------------------
NBC CAPITAL CORPORATION, a
Mississippi
corporation
BY: /s/ Xxxxx X. Xxxxxxx, Xx.
-------------------------------------
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