AGREEMENT AND PLAN OF REORGANIZATION
BY AND BETWEEN
PREMIER BANCSHARES, INC.,
PMB ACQUISITION CORP.
AND
FARMERS & MERCHANTS BANK
DATED AS OF APRIL 20, 1999
TABLE OF CONTENTS
Page
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Preamble................................................................ 1
ARTICLE I
THE MERGER......................................................... 2
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Merger............................................................. 2
Time and Place of Closing.......................................... 2
Effective Time..................................................... 2
ARTICLE II
TERMS OF MERGER.................................................... 2
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Name............................................................... 2
Incorporation...................................................... 2
Bylaws............................................................. 3
Directors and Officers............................................. 3
Business of Surviving Bank......................................... 3
Assumption of Rights............................................... 3
Assumption of Liabilities.......................................... 3
ARTICLE III
MANNER OF CONVERTING SHARES........................................ 3
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Conversion of Shares............................................... 3
Anti-Dilution Provisions........................................... 4
Shares Held By Farmers or Premier.................................. 4
Fractional Shares.................................................. 4
ARTICLE IV
EXCHANGE OF SHARES................................................. 5
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Exchange Procedures................................................ 5
Rights of Former Farmers Shareholders.............................. 5
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF FARMERS.......................... 6
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Organization, Standing, and Power.................................. 6
Authority; No Breach By Agreement.................................. 6
Capital Stock...................................................... 7
Farmers Subsidiaries............................................... 7
Financial Statements............................................... 7
Absence of Undisclosed Liabilities................................. 8
Absence of Certain Changes or Events............................... 8
i
Tax Matters........................................................ 8
Allowance for Possible Loan Losses................................. 9
Assets............................................................. 9
Environmental Matters.............................................. 10
Compliance with Laws............................................... 10
Labor Relations.................................................... 11
Employee Benefit Plans............................................. 11
Material Contracts................................................. 13
Legal Proceedings.................................................. 13
Reports............................................................ 13
Statements True and Correct........................................ 13
Accounting, Tax and Regulatory Matters............................. 14
Charter Provisions................................................. 14
Millennium Compliance.............................................. 14
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF PREMIER AND PMB.................. 15
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Organization, Standing, and Power.................................. 15
Authority; No Breach By Agreement.................................. 15
Capital Stock...................................................... 16
Financial Statements............................................... 17
Absence of Undisclosed Liabilities................................. 17
Absence of Certain Changes or Events............................... 17
Compliance with Laws............................................... 17
Legal Proceedings.................................................. 18
Statements True and Correct........................................ 18
Accounting, Tax and Regulatory Matters............................. 19
Premier Subsidiaries............................................... 19
Reports............................................................ 20
Millennium Compliance.............................................. 20
ARTICLE VII
CONDUCT OF BUSINESS PENDING CONSUMMATION........................... 20
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Affirmative Covenants of Farmers................................... 20
Negative Covenants of Farmers...................................... 21
Affirmative Covenants of Premier................................... 22
Adverse Changes in Condition....................................... 23
Reports............................................................ 23
ARTICLE VIII
ADDITIONAL AGREEMENTS.............................................. 23
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Registration Statement; Proxy Statement; Shareholder Approval...... 23
Exchange Listing................................................... 24
ii
Applications.............................................................. 24
Agreement as to Efforts to Consummate..................................... 24
Investigation and Confidentiality......................................... 24
Press Releases............................................................ 25
Acquisition Proposals..................................................... 25
Accounting and Tax Treatment.............................................. 25
Agreement of Affiliates................................................... 26
Employee Benefits and Contracts........................................... 26
Other Acquisitions, Mergers, or Combinations involving a Premier Company.. 26
ARTICLE IX
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE.................... 27
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Conditions to Obligations of Each Party.............................. 27
Conditions to Obligations of Premier................................. 28
Conditions to Obligations of Farmers................................. 29
ARTICLE X
TERMINATION.......................................................... 31
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Termination.......................................................... 31
Effect of Termination................................................ 32
Non-Survival of Representations and Covenants........................ 32
ARTICLE XI
MISCELLANEOUS........................................................ 32
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Definitions.......................................................... 32
Expenses............................................................. 39
Brokers and Finders.................................................. 40
Entire Agreement..................................................... 40
Amendments........................................................... 40
Waivers.............................................................. 40
Assignment........................................................... 41
Notices.............................................................. 41
Governing Law........................................................ 42
Counterparts......................................................... 42
Captions............................................................. 42
Enforcement of Agreement............................................. 43
Severability......................................................... 43
iii
LIST OF EXHIBITS
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Exhibit Number Description
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1. Form of Agreement of Affiliates of Farmers. (Section 8.9).
2. Matters as to which Counsel for Farmers will opine. (Section 9.2(d)).
3. Form of Claims/Indemnification Letter (Section 9.2(e)).
4. Matters as to which Counsel for Premier will opine. (Section 9.3(d)).
iv
AGREEMENT AND PLAN OF REORGANIZATION
------------------------------------
THIS AGREEMENT AND PLAN OF REORGANIZATION (this "Agreement") is made and
entered into as of April 20, 1999 by and between PREMIER BANCSHARES, INC.
("Premier"), a corporation organized and existing under the laws of the State of
Georgia, with its principal office located in Atlanta, Georgia; PMB ACQUISITION
CORP. ("PMB"), a corporation organized and existing under the laws of the State
of Georgia and a wholly owned subsidiary of Premier; and FARMERS & MERCHANTS
BANK ("Farmers"), a commercial bank organized and existing under the laws of the
State of Georgia, with its principal office located in Summerville, Georgia.
PREAMBLE
--------
The Boards of Directors of Farmers and Premier are of the opinion that the
transactions described herein are in the best interests of the parties and their
respective shareholders. This Agreement provides for the acquisition of Farmers
by Premier pursuant to the merger (the "Merger") of PMB with and into Farmers,
and following the merger Farmers will become a wholly-owned subsidiary of
Premier. At the effective time of the Merger, the outstanding shares of the
common stock of Farmers shall be converted into the right to receive shares of
the common stock of Premier. As a result, shareholders of Farmers will become
shareholders of Premier. The transactions described in this Agreement are
subject to the approvals of the Boards of Directors of Farmers, Premier and PMB,
the shareholders of Farmers and PMB, the Georgia Department of Banking and
Finance, the Board of Governors of the Federal Reserve System (or the Federal
Reserve Bank of Atlanta acting pursuant to delegated authority), the Federal
Deposit Insurance Corporation and the satisfaction of certain other conditions
described in this Agreement. It is the intention of the parties to this
Agreement that the Merger (i) for federal income tax purposes shall qualify as a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code and (ii) for accounting purposes shall be accounted for as a "pooling of
interests" transaction.
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, the receipt and
legal sufficiency of which are hereby acknowledged, the Parties hereto agree as
follows:
ARTICLE I
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THE MERGER
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1.1 MERGER. Subject to the terms and conditions of this Agreement, at the
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Effective Time, PMB shall be merged with and into Farmers as authorized by
Section 7-1-530 of the Financial Institutions Code of Georgia and in accordance
with the provisions of Sections 7-1-531, 7-1-532, and 7-1-533 of the Financial
Institutions Code of Georgia. Farmers shall be the Surviving Bank resulting from
the Merger and shall be operated as a wholly owned subsidiary of Premier. At the
Effective Time, the separate existence of PMB shall cease. 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 Farmers, Premier, and PMB.
1.2 TIME AND PLACE OF CLOSING. The Closing will take place at 10:00 a.m. on
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the date that the Effective Time occurs (or the immediately preceding day if the
Effective Time is earlier than 10:00 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 the offices of Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx,
PLLC, Atlanta, Georgia, or such other place 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 Georgia
Certificate of Merger reflecting the Merger shall become effective with the
Secretary of State of the State of Georgia (the "Effective Time"). Subject to
the terms and conditions hereof, unless otherwise mutually agreed upon in
writing by the duly authorized officers of each Party, the Parties shall use
their reasonable efforts to cause the Effective Time to occur on the last
business day of the month in which occurs the last to occur of (a) the effective
date (including expiration of any applicable waiting period) of the last
required Consent of any Regulatory Authority having authority over and approving
or exempting the Merger, and (b) the date on which the shareholders of Farmers
approve this Agreement to the extent such approval is required by applicable
Law; or such later date as may be mutually agreed upon in writing by the duly
authorized officers of each Party.
ARTICLE II
----------
TERMS OF MERGER
---------------
2.1 NAME. The name of the Surviving Bank resulting from the Merger shall be
----
"Farmers & Merchants Bank" or any other legally permissible name as Premier may
in its sole discretion select.
2.2 ARTICLES OF INCORPORATION. The Articles of Incorporation of Farmers in
-------------------------
effect immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Bank from and after the Effective Time until
otherwise amended or repealed.
2
2.3 BYLAWS. The Bylaws of Farmers in effect immediately prior to the
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Effective Time shall be the Bylaws of the Surviving Bank from and after the
Effective Time until otherwise amended or repealed.
2.4 DIRECTORS AND OFFICERS. The directors of Farmers 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 Bank from
and after the Effective Time in accordance with the Articles of Incorporation
and Bylaws of the Surviving Bank. The officers of Farmers 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 Bank from
and after the Effective Time in accordance with the Bylaws of the Surviving
Bank. In addition, as of the Effective Time, Premier may elect additional
directors to the board of directors of the Surviving Bank and the board of
directors may elect additional officers.
2.5 BUSINESS OF SURVIVING BANK. The business of the Surviving Bank from
--------------------------
and after the Effective Time shall continue to be that of a commercial bank
organized under the laws of the State of Georgia. The business of the Surviving
Bank shall be conducted from its main office located in Summerville, Georgia.
2.6 ASSUMPTION OF RIGHTS. At the Effective Time, the separate existence and
--------------------
corporate organization of PMB shall be merged into and continued in the
Surviving Bank. All rights, franchises, and interests of both PMB and Farmers in
and to every type of property (real, personal, and mixed), and all choses in
action of both PMB and Farmers shall be transferred to and vested in the
Surviving Bank without any deed or other transfer. The Surviving Bank, upon
consummation of the Merger and without any order or other action on the part of
any court or otherwise, shall hold and enjoy all rights of property, franchises,
and interests, including appointments, designations, and nominations, and all
other rights and interests as trustee, executor, administrator, registrar of
stocks and bonds, guardian of estates, assignee, receiver, and committee of
estates of incompetent persons, and in every other fiduciary capacity, in the
same manner and to the same extent as such rights, franchises and interests were
held or enjoyed by either PMB or Farmers at the Effective Time.
2.7 ASSUMPTION OF LIABILITIES. All liabilities and obligations of both PMB
-------------------------
and Farmers of every kind and description shall be assumed by the Surviving
Bank, and the Surviving Bank shall be bound thereby in the same manner and to
the same extent that PMB and Farmers were so bound at the Effective Time.
ARTICLE III
-----------
MANNER OF CONVERTING SHARES
---------------------------
3.1 CONVERSION OF SHARES. Subject to the provisions of this Article III,
--------------------
at the Effective Time, by virtue of the Merger and without any action on the
part of the holders thereof, the shares of the constituent corporations or
banks, as applicable, shall be converted as follows:
3
(a) Each share of Premier 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 PMB Common Stock issued and outstanding immediately
prior to the Effective Time shall be converted into one fully paid and non-
assessable share of Surviving Bank Common Stock.
(c) Each share of Farmers Common Stock (excluding shares held by
Farmers or by any Premier Company, which shares shall be canceled as provided in
Section 3.3 of this Agreement, in each case other than in a fiduciary capacity
or in satisfaction of debts previously contracted) issued and outstanding at the
Effective Time shall cease to be outstanding and shall be converted into and
exchanged for the right to receive 4.028 shares of Premier Common Stock (the
"Exchange Ratio").
3.2 ANTI-DILUTION PROVISIONS. In the event Premier or Farmers changes the
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number of shares of Premier Common Stock or Farmers Common Stock, respectively,
issued and outstanding prior to the Effective Time as a result of a 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
therefor (in the case of a stock split or similar recapitalization) shall be
prior to the Effective Time, the Exchange Ratio shall be proportionately
adjusted.
3.3 SHARES HELD BY FARMERS OR PREMIER. Each of the shares of Farmers
---------------------------------
Common Stock held by Farmers or by any Premier Company, in each case other than
in a fiduciary capacity or in satisfaction 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 Farmers Common Stock exchanged pursuant to
the Merger, who would otherwise have been entitled to receive a fraction of a
share of Premier Common Stock (after taking into account all certificates
delivered by such holder) shall receive, in lieu thereof, cash (without
interest) in an amount equal to such fractional part of a share of Premier
Common Stock multiplied by the market value of one share of Premier Common Stock
at the Effective Time. The market value of one share of Premier Common Stock at
the Effective Time shall be the last sale price of the Premier Common Stock on
the American Stock Exchange (as reported by The Wall Street Journal or, if not
reported thereby, any other authoritative source) 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 shareholder in respect of any fractional
shares.
4
ARTICLE IV
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EXCHANGE OF SHARES
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4.1 EXCHANGE PROCEDURES. Promptly after the Effective Time, Premier shall
-------------------
cause SunTrust Bank, Atlanta, or such other exchange agent selected by Premier
(the "Exchange Agent") to mail to the former holders of Farmers Common Stock
appropriate transmittal materials which shall specify that delivery shall be
effected, and risk of loss and title to the certificates theretofore
representing shares of Farmers Common Stock shall pass, only upon proper
delivery of such certificates to the Exchange Agent. After the Effective Time,
each holder of shares of Farmers Common Stock (other than shares to be canceled
pursuant to Section 3.3 of this Agreement) issued and outstanding at the
Effective Time shall surrender the certificate or certificates representing such
shares to the Exchange Agent and shall promptly upon surrender thereof receive
in exchange therefor the consideration provided in Article III of this
Agreement, together with all undelivered dividends or distributions in respect
of such shares (without interest thereon) pursuant to Section 4.2 of this
Agreement. Premier shall not be obligated to deliver the consideration to which
any former holder of Farmers Common Stock is entitled as a result of the Merger
until such holder surrenders his or her certificate or certificates representing
the shares of Farmers Common Stock for exchange as provided in this Section 4.1.
The certificate or certificates of Farmers Common Stock so surrendered shall be
duly endorsed as the Exchange Agent may require. Any other provision of this
Agreement notwithstanding, neither Premier, the Surviving Bank, nor the Exchange
Agent shall be liable to a holder of Farmers Common Stock for any amounts paid
or property delivered in good faith to a public official pursuant to any
applicable abandoned property Law.
4.2 RIGHTS OF FORMER FARMERS SHAREHOLDERS. At the Effective Time, the
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stock transfer books of Farmers shall be closed as to holders of Farmers Common
Stock immediately prior to the Effective Time and no transfer of Farmers 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 Farmers
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 Article III of this
Agreement in exchange therefor. To the extent permitted by Law, former holders
of record of Farmers Common Stock shall be entitled to vote after the Effective
Time at any meeting of Premier shareholders the number of whole shares of
Premier Common Stock into which their respective shares of Farmers Common Stock
are converted, regardless of whether such holders have exchanged their
certificates representing Farmers Common Stock for certificates representing
Premier Common Stock in accordance with the provisions of this Agreement.
Whenever a dividend or other distribution is declared by Premier on the Premier
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
issuable pursuant to this Agreement, but no dividend or other distribution
payable to the holders of record of Premier Common Stock as of any time
subsequent to the Effective Time shall be delivered to the holder of any
certificate representing shares of Farmers Common Stock issued and outstanding
at the Effective Time until such holder surrenders such certificate for exchange
as
5
provided in Section 4.1 of this Agreement. However, upon surrender of such
Farmers Common Stock certificate, both the Premier Common Stock certificate
(together with all such undelivered dividends or other distributions without
interest) and any undelivered cash payments to be paid for fractional share
interests (without interest) shall be delivered and paid with respect to each
share represented by such certificate.
ARTICLE V
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REPRESENTATIONS AND WARRANTIES
------------------------------
OF FARMERS
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Farmers hereby represents and warrants to Premier and PMB as follows:
5.1 ORGANIZATION, STANDING, AND POWER. Farmers is a commercial bank duly
---------------------------------
organized, validly existing, and in good standing under the Laws of the State of
Georgia. Farmers has the power and authority to carry on its business as now
conducted and to own, lease and operate its Assets. Farmers 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 Farmers. Farmers is an "insured
institution" as such term is defined in the Federal Deposit Insurance Act and
applicable regulations thereunder, and the deposits therein are insured by the
Bank Insurance Fund to the maximum extent permitted by Law.
5.2 AUTHORITY; NO BREACH BY AGREEMENT.
---------------------------------
(a) Farmers has the power and authority necessary to execute, deliver
and perform its obligations under this Agreement and to consummate the
transactions contemplated hereby and thereby, subject to the approval of this
Agreement by the holders of two-thirds of the outstanding shares of Farmers
Common Stock. 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 Farmers, subject to the approval of this Agreement by the
holders of two-thirds of the outstanding shares of Farmers Common Stock, which
is the only shareholder vote required for approval of this Agreement and
consummation of the Merger by Farmers. Subject to such requisite shareholder
approval, this Agreement represents a legal, valid and binding obligation of
Farmers, enforceable against Farmers in accordance with its terms (except in all
cases as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, 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).
6
(b) Except as disclosed in Section 5.2(b) of the Farmers Disclosure
----------
Memorandum, neither the execution and delivery of this Agreement by Farmers, nor
----------
the consummation by Farmers of the transactions contemplated hereby, nor
compliance by Farmers with any of the provisions hereof will (i) conflict with
or result in a breach of any provision of Farmers' Articles of Incorporation 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 Farmers
under, any Contract or Permit of Farmers, 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 Farmers, or (iii) subject to receipt
of the requisite approvals referred to in Section 9.1(b) of this Agreement,
violate any Law or Order applicable to Farmers or any of its 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,
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 Farmers, no notice to, filing with, or Consent of any
public body or authority is necessary for the consummation by Farmers of the
Merger and the other transactions contemplated in this Agreement.
5.3 CAPITAL STOCK.
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(a) The authorized capital stock of Farmers consists of 2,000,000
shares of Farmers Common Stock, of which 720,000 shares are issued and
outstanding as of the date of this Agreement and not more than 720,000 shares
will be issued and outstanding at the Effective Time. All of the issued and
outstanding shares of common stock of Farmers are duly and validly issued and
outstanding and are fully paid and nonassessable. None of the outstanding shares
of Farmers Common Stock has been issued in violation of any preemptive rights of
the current or past shareholders of Farmers.
(b) Except as set forth in Section 5.3(a) of this Agreement, or as
disclosed in Section 5.3 of the Farmers Disclosure Memorandum, there are no
---------------------
shares of capital stock or other equity securities of Farmers outstanding and no
outstanding Rights relating to the capital stock of Farmers.
5.4 FARMERS SUBSIDIARIES. Farmers has no Subsidiaries.
--------------------
5.5 FINANCIAL STATEMENTS. Farmers has disclosed in Section 5.5 of the
--------------------
Farmers Disclosure Memorandum, and has delivered to Premier copies of, all
---------------------
Farmers Financial Statements prepared for periods ended prior to the date hereof
and will deliver to Premier copies of all Farmers Financial Statements prepared
subsequent to the date hereof. The Farmers Financial Statements (as of the dates
thereof and for the periods covered thereby) (a) are, or if dated after the date
of this Agreement will be, in accordance with the books and records of Farmers,
which are or will be, as
7
the case may be, complete and correct and which have been or will have been, as
the case may be, maintained in accordance with good business practices, and (b)
present or will present, as the case may be, fairly, the financial position of
Farmers as of the dates indicated and the results of operations, changes in
shareholders' equity, and cash flows of Farmers for the periods indicated, in
accordance with GAAP (subject to any exceptions as to consistency specified
therein or as may be indicated in the notes thereto or, in the case of interim
financial statements, to normal recurring year-end adjustments that are not
material in amount or effect).
5.6 ABSENCE OF UNDISCLOSED LIABILITIES. Farmers does not have any
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Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Farmers except Liabilities which are
accrued or reserved against in the balance sheets of Farmers as of December 31,
1998 and March 31, 1999, included in the Farmers Financial Statements or
reflected in the notes thereto. Farmers has not incurred or paid any Liability
since March 31, 1999, 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 Farmers.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since March 31, 1999, except as
------------------------------------
disclosed in Section 5.7 of the Farmers Disclosure Memorandum, (a) 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 Farmers,
and (b) Farmers has not taken any action, or failed to take any action, prior to
the date of this Agreement, which action or failure, if taken after the date of
this Agreement, would represent or result in a material breach or violation of
any of the covenants and agreements of Farmers provided in Article VII of this
Agreement.
5.8 TAX MATTERS.
-----------
(a) All Tax returns required to be filed by or on behalf of Farmers
have been timely filed or requests for extensions have been timely filed,
granted, and have not expired for periods ended on or before March 31, 1999, and
on or before the date of the most recent fiscal year end immediately preceding
the Effective Time, except to the extent that all such failures to file, taken
together, are not reasonably likely to have a Material Adverse Effect on
Farmers, and all returns filed are complete and accurate to the Knowledge of
Farmers. All Taxes shown on filed returns have been paid. As of the date of this
Agreement, 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
Farmers, except as reserved against in the Farmers Financial Statements
delivered prior to the date of this Agreement or as disclosed in Section 5.8(a)
of the Farmers Disclosure Memorandum. All Taxes and other Liabilities due with
---------------------
respect to completed and settled examinations or concluded Litigation have been
paid.
(b) Except as disclosed in Section 5.8(b) of the Farmers Disclosure
----------
Memorandum, Farmers has not executed an extension or waiver of any statute of
----------
limitations on the assessment or collection of any Tax due that is currently in
effect, and no unpaid tax deficiency has been asserted
8
in writing against or with respect to Farmers, which deficiency is reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Farmers.
(c) Adequate provision for any Taxes due or to become due for Farmers
for the period or periods through and including the date of the respective
Farmers Financial Statements has been made and is reflected on such Farmers
Financial Statements.
(d) Deferred Taxes of Farmers have been provided for in accordance
with GAAP.
(e) Farmers is in compliance with, and its records contain all
information and documents (including, without limitation, properly completed IRS
Forms W-9) necessary to comply with, all 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, except for such instances of
noncompliance and such omissions as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Farmers.
(f) There are no Liens with respect to Taxes upon any of the assets
of Farmers.
5.9 ALLOWANCE FOR POSSIBLE LOAN LOSSES. The allowance for possible loan or
----------------------------------
credit losses (the "Allowance") shown on the balance sheets of Farmers included
in the most recent Farmers Financial Statements dated prior to the date of this
Agreement was, and the Allowance shown on the balance sheets of Farmers included
in the Farmers Financial Statements as of dates subsequent to the execution of
this Agreement will be, as of the dates thereof, adequate (within the meaning of
GAAP and applicable regulatory requirements or guidelines) to provide for losses
relating to or inherent in the loan and lease portfolios (including accrued
interest receivables) of Farmers and other extensions of credit (including
letters of credit and commitments to make loans or extend credit) by Farmers as
of the dates thereof except where the failure of such Allowance to be so
adequate is not reasonably likely to have a Material Adverse Effect on Farmers.
5.10 ASSETS. Except as disclosed in Section 5.10 of the Farmers Disclosure
------ ----------
Memorandum or as disclosed or reserved against in the Farmers Financial
----------
Statements, Farmers has good and marketable title, free and clear of all Liens,
to all of its Assets. All material tangible properties used in the businesses of
Farmers are in good condition, reasonable wear and tear excepted, and are usable
in the ordinary course of business consistent with Farmers' past practices. All
Assets which are material to Farmers' business or held under leases or subleases
by Farmers, 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 policies of fire, theft,
liability and other insurance maintained with respect to the Assets or
businesses of Farmers provide adequate coverage under current industry practices
against loss or Liability, and the fidelity
9
and blanket bonds in effect as to which Farmers is a named insured are
reasonably sufficient. The Assets of Farmers include all assets required to
operate the business of Farmers as presently conducted.
5.11 ENVIRONMENTAL MATTERS. Except as disclosed in Section 5.11 of the
---------------------
Farmers Disclosure Memorandum:
---------------------
(a) to the Knowledge of Farmers, Farmers, its Participation Facilities
and its Loan Properties are, and have been, in compliance with all Environmental
Laws, except for noncompliance which is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Farmers.
(b) to the Knowledge of Farmers, there is no Litigation pending or
threatened before any court, governmental agency or authority or other forum in
which Farmers or any of its Loan Properties or Participation Facilities has been
or, with respect to threatened Litigation, may be named as a defendant or
potentially responsible party (i) for alleged noncompliance 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 site
owned, leased or operated by Farmers or any of its Loan Properties or
Participation Facilities, except for such Litigation pending or threatened the
resolution of which is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Farmers and to the Knowledge of Farmers,
there is no reasonable basis for any such Litigation.
(c) to the Knowledge of Farmers, there have been no releases of
Hazardous Material in, on, under or affecting any Participation Facility or Loan
Property, except such as are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Farmers.
5.12 COMPLIANCE WITH LAWS. Farmers has in effect all Permits necessary for
--------------------
it to own, lease or operate its 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
Farmers, 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 Farmers. Except as disclosed in Section
5.12 of the Farmers Disclosure Memorandum, Farmers:
---------------------
(a) is not 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 Farmers; and
(b) has not 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 Farmers 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,
10
individually or in the aggregate, a Material Adverse Effect on Farmers, (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 Farmers,
or (iii) requiring Farmers to enter into or consent to the issuance of a cease
and desist order, formal agreement, directive, commitment or memorandum of
understanding, or 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.
5.13 LABOR RELATIONS. Farmers is not the subject of any Litigation
---------------
asserting that it has committed an unfair labor practice (within the meaning of
the National Labor Relations Act or comparable state law) or seeking to compel
it to bargain with any labor organization as to wages or conditions of
employment, nor is there any strike or other labor dispute involving Farmers,
pending or, to its Knowledge, threatened, nor, to its Knowledge, is there any
activity involving Farmers' employees seeking to certify a collective bargaining
unit or engaging in any other organization activity.
5.14 EMPLOYEE BENEFIT PLANS.
----------------------
(a) Farmers has disclosed in Section 5.14 of the Farmers Disclosure
----------
Memorandum and delivered or made available to Premier prior to the execution of
----------
this Agreement copies in each case of all pension, retirement, profit-sharing,
deferred compensation, stock option, employee stock ownership, severance pay,
vacation, bonus, or other incentive plans, all other written employee programs,
arrangements, or agreements, all medical, vision, dental, or other health plans,
all life insurance plans, and all other employee benefit plans or fringe benefit
plans, including, without limitation, "employee benefit plans" as that term is
defined in Section 3(3) of ERISA, currently adopted, maintained by, sponsored in
whole or in part by, or contributed to by Farmers or any Affiliate thereof 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 (collectively, the "Farmers Benefit Plans"). Any of
the Farmers Benefit Plans which is an "employee pension benefit plan," as that
term is defined in Section 3(2) of ERISA, is referred to herein as a "Farmers
ERISA Plan." Each Farmers ERISA Plan which is also a "defined benefit plan" (as
defined in Section 414(j) of the Internal Revenue Code) is referred to herein as
a "Farmers Pension Plan." No Farmers Pension Plan is or has been a multi-
employer plan within the meaning of Section 3(37) of ERISA.
(b) All Farmers Benefit Plans are in compliance with the applicable
terms of ERISA, the Internal Revenue Code, and any other applicable Laws the
breach or violation of which are reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Farmers. Each Farmers 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 Farmers is not aware of any circumstances likely to result in
revocation of any such favorable determination letter. To the Knowledge of
Farmers, neither Farmers nor any other party has engaged
11
in a transaction with respect to any Farmers Benefit Plan that, assuming the
taxable period of such transaction expired as of the date hereof, would subject
Farmers to a 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 Farmers.
(c) Neither Farmers nor any ERISA Affiliate of Farmers has any past,
present or future obligation or liability to contribute to any multi-employer
plan, as defined in Section 3(37) of ERISA.
(d) Except as disclosed in Section 5.14(d) of the Farmers Disclosure
----------
Memorandum, (i) Farmers does not have any obligations for retiree health and
----------
life benefits under any of the Farmers Benefit Plans, except as required by
Section 6.01 of ERISA and Section 4980B of the Internal Revenue Code; (ii) there
are no restrictions on the rights of Farmers to amend or terminate any such
Plan; and (iii) any amendment or termination of any such Plan will not cause
Farmers to incur any Liability that is reasonably likely to have a Material
Adverse Effect on Farmers.
(e) Except as disclosed in Section 5.14(e) of the Farmers Disclosure
----------
Memorandum, neither the execution and delivery of this Agreement nor the
----------
consummation of the transactions contemplated hereby or thereby will (i) result
in any payment (including, without limitation, severance, unemployment
compensation, golden parachute or otherwise) becoming due to any director or any
employee of Farmers from Farmers under any Farmers Benefit Plan or otherwise,
(ii) increase any benefits otherwise payable under any Farmers Benefit Plan, or
(iii) result in any acceleration of the time of payment or vesting of any such
benefit.
(f) The actuarial present values of all accrued deferred compensation
entitlements (including, without limitation, entitlements under any executive
compensation, supplemental retirement, or employment agreement) of employees and
former employees of Farmers and their respective beneficiaries have been fully
reflected on the Farmers Financial Statements to the extent required by and in
accordance with GAAP.
(g) Farmers and each ERISA Affiliate of Farmers has complied with the
continuation of coverage requirements of Section 1001 of the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended, and ERISA Sections 601
through 608.
(h) Neither Farmers nor any ERISA Affiliate of Farmers is obligated,
contingently or otherwise, under any agreement to pay any amount which would be
treated as a "parachute payment," as defined in Section 280G(b) of the Internal
Revenue Code (determined without regard to Section 280G(b)(2)(A)(ii) of the
Internal Revenue Code).
(i) Other than routine claims for benefits, there are no actions,
audits, investigations, suits or claims pending, or threatened against any
Farmers Benefit Plan, any trust or other funding agency created thereunder, or
against any fiduciary of any Farmers Benefit Plan or against the assets of any
Farmers Benefit Plan.
12
5.15 MATERIAL CONTRACTS. Except as disclosed in Section 5.15 of the
------------------
Farmers Disclosure Memorandum or otherwise reflected in the Farmers Financial
---------------------
Statements, Farmers is not, nor are any of its respective Assets, businesses or
operations, a party to, or bound or affected by, or receives benefits under, (a)
any employment, severance, termination, consulting or retirement Contract
providing for aggregate payments to any Person in any calendar year in excess of
$10,000, excluding "at will" employment arrangements, (b) any Contract relating
to the borrowing of money by Farmers or the guarantee by Farmers of any such
obligation (other than Contracts evidencing deposit liabilities, purchases of
federal funds, Federal Home Loan Bank advances, fully-secured repurchase
agreements, trade payables, and Contracts relating to borrowings or guarantees
made in the ordinary course of business), and (c) any other Contract (excluding
this Agreement) or amendment thereto that is required to be filed as an exhibit
to a Form 10-K or Form 10-Q filed by Farmers with the SEC as of the date of this
Agreement if Farmers were required to file a Form 10-K or Form 10-Q with the SEC
(together with all Contracts referred to in Sections 5.10 and 5.14(a) of this
Agreement, the "Farmers Contracts"). Farmers is not in Default under any Farmers
Contract, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Farmers. All of
the indebtedness of Farmers for money borrowed is prepayable at any time by
Farmers without penalty or premium.
5.16 LEGAL PROCEEDINGS. Except as disclosed in Section 5.16 of the
-----------------
Farmers Disclosure Memorandum, there is no Litigation instituted or pending, or,
---------------------
to the Knowledge of Farmers, threatened (or unasserted but considered probable
of assertion and which if asserted would have at least a reasonable probability
of an unfavorable outcome) against Farmers, or against any Asset, interest, or
right of Farmers, that is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Farmers, nor are there any Orders of any
Regulatory Authorities, other governmental authorities, or arbitrators
outstanding against Farmers, that are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Farmers.
5.17 REPORTS. Since January 1, 1997, Farmers has timely filed all reports
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and statements, together with any amendments required to be made with respect
thereto, that it was required to file with (a) the Regulatory Authorities, and
(b) any applicable state securities or banking authorities (except failures to
file which are not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on Farmers). 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.
As of its respective date, each such report and document to Farmers' Knowledge
did not, in any material respects, contain any untrue statement of a material
fact or omit to state a material fact required to be stated therein or necessary
to make the statements made therein, in light of the circumstances under which
they were made, not misleading.
5.18 STATEMENTS TRUE AND CORRECT. No statement, certificate, instrument
---------------------------
or other writing furnished or to be furnished by Farmers or any Affiliate
thereof to Premier pursuant to this Agreement or any other document, agreement
or instrument referred to herein contains or will contain any untrue statement
of material fact or will omit to state a material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading.
13
None of the information supplied or to be supplied by Farmers or any Affiliate
thereof for inclusion in the Registration Statement to be filed by Premier with
the SEC will, when the Registration Statement becomes effective, be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to make the statements therein not misleading. None of the information
supplied or to be supplied by Farmers or any Affiliate thereof for inclusion in
the Proxy Statement to be mailed to Farmers' shareholders in connection with the
Farmers Shareholders' Meeting, and any other documents to be filed by Farmers or
any Affiliate thereof with the SEC or any other Regulatory Authority in
connection with the transactions contemplated hereby, will, at the respective
time such documents are filed, and with respect to the Proxy Statement, when
first mailed to the shareholders of Farmers, be false or misleading with respect
to any material fact, or omit to state any material fact 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 Farmers Shareholders' Meeting, be
false or misleading with respect to any material fact, or omit to state any
material fact necessary to correct any statement in any earlier communication
with respect to the solicitation of any proxy for the Farmers Shareholders'
Meeting. All documents that Farmers 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.
5.19 ACCOUNTING, TAX AND REGULATORY MATTERS. Neither Farmers nor any
--------------------------------------
Affiliate thereof has taken any action, or agreed to take any action, or has any
Knowledge of any fact or circumstance that is reasonably likely to (a) prevent
the transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or treatment as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, or (b)
materially impede or delay receipt of any Consents of Regulatory Authorities
referred to in Section 9.1(b) of this Agreement or result in the imposition of a
condition or restriction of the type referred to in the second sentence of such
Section. To the Knowledge of Farmers, there exists no fact, circumstance, or
reason why the requisite Consents referred to in Sections 9.1(b) and (c) of this
Agreement cannot be received in a timely manner without the imposition of any
condition or restriction of the type described in the second sentence of such
Sections 9.1(b) and (c).
5.20 CHARTER PROVISIONS. Farmers 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, Bylaws or
other governing instruments of Farmers or restrict or impair the ability of
Premier to vote, or otherwise to exercise the rights of a shareholder with
respect to, shares of Farmers that may be acquired or controlled by it.
5.21 MILLENNIUM COMPLIANCE. Farmers represents and warrants that it has
---------------------
tested and assessed its software, hardware, and other computer equipment to
ensure that there will not be a Year 2000 Problem. Farmers further represents
and warrants that it has prepared and implemented a written plan of action to
ensure that the software, hardware, and other computer equipment owned,
licensed, or used by Farmers will not be the subject of a failure in any such
software, hardware, or
14
other computer equipment as a result of a Year 2000 Problem. Farmers further
represents and warrants that it has contacted and received assurances from all
key suppliers of goods and services to Farmers, including but not limited to
suppliers of computer software, computer hardware, and other computer equipment,
that each of the software, hardware, and other computer equipment owned,
licensed, or used by such suppliers will not be the subject of failures in any
such software, hardware, or other computer equipment as a result of a Year 2000
Problem.
ARTICLE VI
----------
REPRESENTATIONS AND WARRANTIES OF PREMIER AND PMB
-------------------------------------------------
Premier, and where applicable, PMB, hereby represents and warrants to
Farmers as follows:
6.1 ORGANIZATION, STANDING, AND POWER. Premier is a corporation duly
---------------------------------
organized, validly existing, and in good standing under the Laws of the State of
Georgia, and is duly registered as a bank holding company under the BHC Act. PMB
is a corporation duly organized, validly existing, and in good standing under
the laws of the State of Georgia. Premier has the corporate power and authority
to carry on its business as now conducted and to own, lease and operate its
Assets. Premier 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 Premier.
6.2 AUTHORITY; NO BREACH BY AGREEMENT.
---------------------------------
(a) Premier and PMB have the corporate power and authority necessary
to execute, deliver and perform their respective 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 Premier and PMB. This Agreement represents a legal, valid and binding
obligation of both Premier and PMB, enforceable against Premier and PMB in
accordance with its terms (except in all cases as such enforceability may be
limited by applicable bankruptcy, insolvency, reorganization, 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).
(b) Except as set forth in Section 6.2(b) of the Premier Disclosure
----------
Memorandum, neither the execution and delivery of this Agreement by Premier, nor
----------
the consummation by Premier of the transactions contemplated hereby, nor
compliance by Premier with any of the provisions hereof will (i) conflict with
or result in a breach of any provision of Premier's Articles of Incorporation or
Bylaws, or (ii) constitute or result in a Default under, or require any Consent
15
pursuant to, or result in the creation of any Lien on any Asset of any Premier
Company under, any Contract or Permit of any Premier 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 Premier, or (iii)
subject to receipt of the requisite approvals referred to in Section 9.1(b) of
this Agreement, violate any Law or Order applicable to any Premier Company or
any of their respective 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,
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 Premier, no notice to, filing with, or Consent of any
public body or authority is necessary for the consummation by Premier and PMB of
the Merger and the other transactions contemplated in this Agreement.
(d) Neither the execution and delivery of this Agreement by PMB, nor
the consummation by PMB of the transactions contemplated hereby, nor compliance
by PMB with any of the provisions thereof, will conflict with or result in a
breach of any provision of PMB's Articles of Incorporation or Bylaws, or
Contract or agreement by which it or its Assets is bound, the breach of which
would have a Material Adverse Effect on PMB.
6.3 CAPITAL STOCK.
-------------
(a) The authorized capital stock of Premier consists of (i)
60,000,000 shares of Premier Common Stock, of which 26,106,350 shares were
issued and outstanding as of the date of this Agreement, and (ii) 2,000,000
shares of Premier Preferred Stock, of which 40,770 shares are issued and
outstanding as of the date of this Agreement. All of the issued and outstanding
shares of Premier Common Stock are, and all of the shares of Premier Common
Stock to be issued in exchange for shares of Farmers Common Stock upon
consummation of the Merger, when issued in accordance with the terms of this
Agreement and the Registration Statement, will be duly and validly issued and
outstanding and fully paid and nonassessable under the GBCC. None of the
outstanding shares of Premier Common Stock has been, and none of the shares of
Premier Common Stock to be issued in exchange for shares of Farmers Common Stock
upon consummation of the Merger will be issued in violation of any preemptive
rights of the current or past shareholders of Premier.
(b) The authorized capital stock of PMB consists of 1,000 shares of
PMB Common Stock, of which 100 shares were issued and outstanding as of the date
of this Agreement.
(c) Premier has issued $29,639,175 of 9.00% Subordinated Debentures
to Premier Capital Trust I, a statutory business trust organized and existing
under the laws of the State of Delaware. The Subordinated Debentures will mature
on December 31, 2027. The Subordinated
16
Debentures were purchased by Premier Capital Trust I with the proceeds of the
public offering of 1,150,000 shares of 9.00% Cumulative Trust Preferred
Securities and sale of Common Securities to Premier. Premier owns all of the
Common Securities issued by Premier Capital Trust I. The Common Securities and
the Preferred Securities represent undivided beneficial interests in the assets
of Premier Capital Trust I.
(d) Except as set forth in Section 6.3(a) of this Agreement, or as
disclosed in Section 6.3(c) of the Premier Disclosure Memorandum there are no
---------------------
shares of capital stock or other equity securities of Premier outstanding and no
outstanding Rights relating to the capital stock of Premier.
6.4 FINANCIAL STATEMENTS. The Premier Financial Statements (as of the
--------------------
dates thereof and for the periods covered thereby) (a) are, or if dated after
the date of this Agreement will be, in accordance with the books and records of
the Premier Companies, which are or will be, as the case may be, complete and
correct and which have been or will have been, as the case may be, maintained in
accordance with good business practices, and (b) present or will present, as the
case may be, fairly the consolidated financial position of the Premier Companies
as of the dates indicated and the consolidated results of operations, changes in
shareholders' equity, and cash flows of the Premier Companies for the periods
indicated, in accordance with GAAP (subject to exceptions as to consistency
specified therein or as may be indicated in the notes thereto or, in the case of
interim financial statements, to normal recurring year-end adjustments that are
not Material in amount or effect).
6.5 ABSENCE OF UNDISCLOSED LIABILITIES. No Premier Company has any
----------------------------------
Liabilities that are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Premier, except Liabilities which are
accrued or reserved against in the consolidated balance sheets of Premier as of
December 31, 1998, included in the Premier Financial Statements or reflected in
the notes thereto. No Premier Company has incurred or paid any Liability since
December 31, 1998, 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 Premier.
6.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31, 1998, except
------------------------------------
as disclosed in SEC Documents filed by Premier prior to the date of this
Agreement and except as disclosed in Section 6.6 of the Premier Disclosure
----------
Memorandum, (a) 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 Premier, and (b) the Premier Companies have not taken
any action, or failed to take any action, prior to the date of this Agreement,
which action or failure, if taken after the date of this Agreement, would
represent or result in a Material breach or violation of any of the covenants
and agreements of Premier provided in Article VII of this Agreement.
6.7 COMPLIANCE WITH LAWS. Premier is duly registered as a bank holding
--------------------
company under the BHC Act. Each Premier Company has in effect all Permits
necessary for it to own, lease
17
or operate its 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 Premier, 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 Premier. Except as disclosed in Section 6.7 of the Premier
Disclosure Memorandum, none of the Premier 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 Premier; 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 Premier 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 Premier, (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 Premier,
or (iii) requiring any Premier Company to enter into or consent to the issuance
of a cease and desist order, formal agreement, directive, commitment or
memorandum of understanding, or 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.
6.8 LEGAL PROCEEDINGS. Except as disclosed in Section 6.8 of the Premier
-----------------
Disclosure Memorandum, there is no Litigation instituted or pending, or, to the
---------------------
Knowledge of Premier, threatened (or unasserted but considered probable of
assertion and which if asserted would have at least a reasonable probability of
an unfavorable outcome) against any Premier 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 Premier, nor are
there any Orders of any Regulatory Authorities, other governmental authorities,
or arbitrators outstanding against any Premier Company, that are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Premier.
6.9 STATEMENTS TRUE AND CORRECT. No statement, certificate, instrument or
---------------------------
other writing furnished or to be furnished by any Premier Company or any
Affiliate thereof to Farmers pursuant to this Agreement or any other document,
agreement or instrument referred to herein contains or will contain any untrue
statement of material fact or will omit to state a material fact 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
Premier Company or any Affiliate thereof for inclusion in the Registration
Statement to be filed by Premier with the SEC, will, when the Registration
Statement becomes effective, be false or misleading with respect to any material
fact, or omit to state any material fact necessary to make the statements
therein not misleading. None of the information supplied or to be supplied by
any Premier Company or any Affiliate thereof for
18
inclusion in any documents to be filed by any Premier Company or any Affiliate
thereof with the SEC or any other Regulatory Authority in connection with the
transactions contemplated hereby, will, at the respective time such documents
are filed, be false or misleading with respect to any material fact, or omit to
state any material fact necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading. All documents that
any Premier 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.
6.10 ACCOUNTING, TAX AND REGULATORY MATTERS. No Premier Company or any
--------------------------------------
Affiliate thereof has taken any action, or agreed to take any action, or has any
Knowledge of any fact or circumstance that is reasonably likely to (a) prevent
the transactions contemplated hereby, including the Merger, from qualifying for
pooling-of-interests accounting treatment or treatment as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, or (b)
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 Premier,
there exists no fact, circumstance, or reason why the requisite Consents
referred to in Sections 9.1(b) and (c) of this Agreement cannot be received in a
timely manner without the imposition of any condition or restriction of the type
described in the second sentence of such Sections 9.1(b) and (c).
6.11 PREMIER SUBSIDIARIES. Premier has disclosed in Section 6.11 of the
--------------------
Premier Disclosure Memorandum all of the Premier Subsidiaries as of the date of
---------------------
this Agreement. Except as disclosed in Section 6.11 of the Premier Disclosure
----------
Memorandum, Premier or one of its Subsidiaries owns all of the issued and
----------
outstanding shares of capital stock of each Premier Subsidiary. No equity
securities of any Premier Subsidiary are or may become required to be issued
(other than to another Premier Company) by reason of any Rights, and there are
no Contracts by which any Premier Subsidiary is bound to issue (other than to
another Premier Company) additional shares of its capital stock or Rights, or by
which any Premier Company is or may be bound to transfer any shares of the
capital stock of any Premier Subsidiary (other than to another Premier Company).
There are no Contracts relating to the rights of any Premier Company to vote or
to dispose of any shares of the capital stock of any Premier Subsidiary. All of
the shares of capital stock of each Premier Subsidiary held by a Premier Company
are fully paid and nonassessable under the applicable Law of the jurisdiction in
which such Subsidiary is incorporated or organized. Each Premier Subsidiary is
either a bank, a savings association, a corporation or a limited liability
company and is duly organized, validly existing, and (as to corporations) in
good standing under the Laws of the jurisdiction in which it is 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 Premier
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 Premier. Each Premier Subsidiary that is a depository institution is
an "insured institution" as defined in the Federal Deposit Insurance Act
19
and applicable regulations thereunder, and the deposits in which are insured by
the Bank Insurance Fund or the Savings Association Insurance Fund, as
appropriate.
6.12 REPORTS. Since January 1, 1997, each Premier 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 (a) the SEC,
including, but not limited to, Forms 10-K, Forms 10-Q, Forms 8-K, and Proxy
Statements, (b) other Regulatory Authorities, and (c) any applicable state
securities or banking authorities (except failures to file which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Premier). As of their respective dates, each of such reports and
documents, including the financial statements, exhibits, and schedules thereto,
complied in all material respect with all applicable Laws. As of its respective
date, each such report and document to Premier's Knowledge did not, in any
material respects, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
6.13 MILLENNIUM COMPLIANCE. Premier represents and warrants that it has
---------------------
tested and assessed its software, hardware, and other computer equipment to
ensure that there will not be a Year 2000 Problem. Premier further represents
and warrants that it has prepared and implemented a written plan of action to
ensure that the software, hardware, and other computer equipment owned,
licensed, or used by Premier will not be the subject of a failure in any such
software, hardware, or other computer equipment as a result of a Year 2000
Problem. Premier further represents and warrants that it has contacted and
received assurances from all key suppliers of goods and services to Premier,
including but not limited to suppliers of computer software, computer hardware,
and other computer equipment, that each of the software, hardware, and other
computer equipment owned, licensed, or used by such suppliers will not be the
subject of failures in any such software, hardware, or other computer equipment
as a result of a Year 2000 Problem.
ARTICLE VII
-----------
CONDUCT OF BUSINESS PENDING CONSUMMATION
----------------------------------------
7.1 AFFIRMATIVE COVENANTS OF FARMERS. Unless the prior written consent
--------------------------------
of Premier shall have been obtained, and except as otherwise contemplated herein
or disclosed in the Farmers Disclosure Memorandum, Farmers shall from the date
---------------------
of this Agreement until the Effective Time or termination of this Agreement: (a)
operate its business in the usual, regular and ordinary course; (b) preserve
intact its business organization and Assets and maintain its rights and
franchises; (c) use its reasonable efforts to cause its representations and
warranties to be correct at all times; and (d) take no action which would (i)
adversely affect the ability of any Party to obtain any Consents required for
the transactions contemplated hereby without imposition of a condition or
restriction of the type referred to in the last sentence of Section 9.1(b) or
9.1(c) of this Agreement or (ii) adversely affect in any material respect the
ability of either Party to perform its covenants and agreements under this
Agreement.
20
7.2 NEGATIVE COVENANTS OF FARMERS. Except as disclosed in the Farmers
-----------------------------
Disclosure Memorandum, from the date of this Agreement until the earlier of the
---------------------
Effective Time or the termination of this Agreement, Farmers covenants and
agrees that it will not do or agree or commit to do any of the following without
the prior written consent of the chief executive officer of Premier, which
consent shall not be unreasonably withheld:
(a) amend the Articles of Incorporation, Bylaws or other governing
instruments of Farmers, or
(b) incur any additional debt obligation or other obligation for
borrowed money in excess of an aggregate of $50,000 except in the ordinary
course of the business of Farmers consistent with past practices (which shall
include creation of deposit liabilities, purchases of federal funds, advances
from the Federal Reserve Bank or Federal Home Loan Bank, and entry into
repurchase agreements fully secured by U.S. government or agency securities), or
impose, or suffer the imposition, on any Asset of Farmers of any material Lien
or permit any such Lien to exist (other than in connection with deposits,
repurchase agreements, bankers acceptances, Federal Home Loan Bank advances,
"treasury tax and loan" accounts established in the ordinary course of business,
the satisfaction of legal requirements in the exercise of trust powers, and
Liens in effect as of the date hereof that are disclosed in the Farmers
Disclosure Memorandum); or
---------------------
(c) 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 Farmers, or declare or pay any dividend or make any other
distribution in respect of the Farmers Common Stock, provided, however, that
Farmers may (to the extent legally able to do so) declare and pay, prior to the
Effective Time, quarterly dividends in accordance with its usual and customary
past practices; or
(d) except for this Agreement, or as disclosed in Section 7.2(d) of
the Farmers Disclosure Memorandum, issue, sell, pledge, encumber, authorize the
---------------------
issuance of or enter into any Contract to issue, sell, pledge, encumber, or
authorize the issuance of or otherwise permit to become outstanding, any
additional shares of Farmers Common Stock or any other shares of capital stock
of Farmers, 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) except as disclosed in Section 7.2(e) of the Farmers Disclosure
----------
Memorandum, adjust, split, combine or reclassify any capital stock of Farmers or
----------
issue or authorize the issuance of any other securities in respect of or in
substitution for shares of Farmers Common Stock or sell, lease, mortgage or
otherwise dispose of or otherwise encumber any Asset having a book value in
excess of $50,000 other than in the ordinary course of business for reasonable
and adequate consideration; or
21
(f) except for purchases of U.S. Treasury securities or U.S.
Government agency securities or securities of like maturity or grade or general
obligations of states and municipalities, purchase any securities or make any
material investment, either by purchase of stock or securities, contributions to
capital, Asset transfers, or purchase of any Assets, in any Person; or otherwise
acquire direct or indirect control over any Person, other than in connection
with (i) foreclosures in the ordinary course of business, or (ii) acquisitions
of control by Farmers in its fiduciary capacity; or
(g) grant any increase in compensation or benefits to any employee of
Farmers whose annual salary exceeds $35,000 (including such discretionary
increases as may be contemplated by existing employment agreements), except in
accordance with past practice or previously approved by the Board of Directors
of Farmers, in each case as disclosed in Section 7.2(g) of the Farmers
Disclosure Memorandum or as required by Law; 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 and disclosed in Section 7.2(g) of the
Farmers Disclosure Memorandum; enter into or amend any severance agreements with
---------------------
officers of Farmers; grant any general increase in compensation to all
employees; grant any increase in fees or other increases in compensation or
other benefits to directors of Farmers; or voluntarily accelerate the vesting of
any stock options or other stock-based compensation or employee benefits; or
(h) enter into or amend any employment Contract between Farmers and
any Person (unless such amendment is required by Law) that Farmers does not have
the unconditional right to terminate without Liability (other than Liability for
services already rendered), at any time on or after the Effective Time; or
(i) adopt any new employee benefit plan of Farmers or make any
material change in or to any existing employee benefit plans of Farmers 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
(j) make any significant change in any Tax or accounting methods 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) commence any Litigation other than in accordance with past
practice, settle any Litigation involving any Liability of Farmers for money
damages in excess of $50,000 or which imposes material restrictions upon the
operations of Farmers; 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.
7.3 AFFIRMATIVE COVENANTS OF PREMIER. Unless the prior written consent of
--------------------------------
Farmers shall have been obtained, and except as otherwise contemplated herein or
as disclosed in the Premier
22
Disclosure Memorandum, Premier shall, and shall cause each of its Subsidiaries,
---------------------
from the date of this Agreement until the Effective Time or termination of this
Agreement: (a) to operate its business in the usual, regular and ordinary
course; (b) to preserve intact its business organization and Assets and maintain
its rights and franchises; (c) to use its reasonable efforts to cause its
representations and warranties to be correct at all times; and (d) to take no
action which would (i) adversely affect the ability of any Party to obtain any
Consents required for the transactions contemplated hereby without imposition of
a condition or restriction of the type referred to in the last sentence of
Section 9.1(b) or 9.1(c) of this Agreement or (ii) adversely affect in any
material respect the ability of either Party to perform its covenants and
agreements under this Agreement.
7.4 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 (a) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (b) is reasonably likely to 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.
7.5 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 VIII
------------
ADDITIONAL AGREEMENTS
---------------------
8.1 REGISTRATION STATEMENT; PROXY STATEMENT; SHAREHOLDER APPROVAL.
-------------------------------------------------------------
(a) As soon as reasonably practicable after execution of this
Agreement, Premier shall file the Registration Statement with the SEC, provided
Farmers has provided, on a reasonably timely basis, all information concerning
Farmers necessary for inclusion in the Registration Statement, and shall use its
reasonable efforts to cause the Registration Statement to become effective under
the 1933 Act as soon as reasonably practicable after the filing thereof 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 Premier Common
Stock upon consummation of the Merger. Farmers shall furnish all information
concerning it and the holders of its capital stock as Premier may reasonably
request in connection with such action.
(b) Farmers shall call a Shareholders' Meeting, to be held within
forty-five (45) days 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 Farmers deems appropriate.
(c) In connection with the Farmers Shareholders' Meeting, (i) Premier
shall prepare and file with the SEC, on Farmers' behalf, a Proxy Statement
(which shall be included in
23
the Registration Statement); (ii) Farmers shall mail the Proxy Statement to all
of its shareholders; (iii) the Parties shall furnish to each other all
information concerning them that they may reasonably request in connection with
such Proxy Statement; (iv) the Board of Directors of Farmers shall recommend
(subject to compliance with the fiduciary duties of the members of the Board of
Directors as advised by counsel) to its shareholders the approval of this
Agreement; and (v) the Board of Directors and officers of Farmers shall use
their reasonable efforts to obtain such shareholders' approval (subject to
compliance with their fiduciary duties as advised by counsel).
8.2 EXCHANGE LISTING. Premier shall use its reasonable efforts to list,
----------------
prior to the Effective Time, on the American Stock Exchange the shares of
Premier Common Stock to be issued to the holders of Farmers Common Stock
pursuant to the Merger.
8.3 APPLICATIONS. Premier shall promptly prepare and file, and Farmers
------------
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.
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 best 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, as promptly as practicable so as to permit
consummation of the Merger at the earliest possible date and to otherwise enable
consummation of the transactions contemplated hereby and shall cooperate fully
with the other Parties hereto to that end (it being understood that any
amendments to the Registration Statement filed by Premier in connection with the
Premier Common Stock to be issued in the Merger shall not violate this
covenant), including, without limitation, using its reasonable best efforts to
lift or rescind any Order adversely affecting its ability to consummate the
transactions contemplated herein and to cause to be satisfied the conditions
referred to in Article IX of this Agreement. Each Party shall use, and shall
cause each of its Subsidiaries to use, its reasonable best efforts to obtain 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 will keep the other
Parties advised of all material developments relevant to its business and to
consummation of the Merger and shall permit the other Parties 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
Parties reasonably request, 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 Parties.
(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 Parties concerning its and
24
its Subsidiaries' businesses, operations, and financial positions 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 all documents and copies
thereof and all work papers containing confidential information received from
the other Parties.
(c) Each Party agrees to give the other Parties notice as soon as
practicable after any determination by it of any fact or occurrence relating to
the other Parties which it has discovered and which represents, or is reasonably
likely to represent, either a material breach of any representation, warranty,
covenant or agreement of the other Parties or which has had or is reasonably
likely to have a Material Adverse Effect on the other Parties.
8.6 PRESS RELEASES. Prior to the Effective Time, Premier and Farmers
--------------
shall agree with each other as to the form and substance of any press release or
other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, however, 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 ACQUISITION PROPOSALS. Except with respect to this Agreement and the
---------------------
transactions contemplated hereby, neither Farmers nor any Affiliate of Farmers
nor any investment banker, attorney, accountant or other representative
(collectively, "Representatives") retained by Farmers shall directly or
indirectly solicit any Acquisition Proposal by any Person. Except to the extent
necessary to comply with the fiduciary duties of Farmers' Board of Directors as
advised by counsel, Farmers or any Affiliate or Representative of Farmers shall
not furnish any non-public information that it is not legally obligated to
furnish, negotiate with respect to, or enter into any Contract with respect to,
any Acquisition Proposal, but Farmers may communicate information about such an
Acquisition Proposal to its shareholders if and to the extent that it is
required to do so in order to comply with its legal obligations as advised by
counsel. Farmers shall promptly notify Premier orally and in writing in the
event that Farmers receives any inquiry or proposal relating to any such
transaction. Unless the prior written consent of Premier is obtained, Farmers
shall (a) immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any Persons conducted heretofore with respect
to any of the foregoing, and (b) direct and use its reasonable efforts to cause
all of its Representatives not to engage in any of the foregoing.
8.8 ACCOUNTING AND TAX TREATMENT. Each of the Parties undertakes and
----------------------------
agrees to use its reasonable best efforts to cause the Merger to qualify, 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. Each of the Parties further undertakes and
agrees to use its reasonable best efforts to cause the Merger to be eligible,
and to take no action which would cause the Merger not to be eligible, to be
accounted for as a "pooling of interests."
25
8.9 AGREEMENT OF AFFILIATES. Farmers has disclosed in Section 8.9 of the
-----------------------
Farmers Disclosure Memorandum all Persons whom it reasonably believes is an
---------------------
"affiliate" of Farmers for purposes of Rule 145 under the 1933 Act. Farmers
shall use its reasonable best efforts to cause each such Person to deliver to
Premier and Farmers, not later than thirty (30) days after the date of this
Agreement, a written agreement, substantially in the form of Exhibit "1",
-----------
providing that such Person will not sell, pledge, transfer or otherwise dispose
of the shares of Farmers 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 Premier 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. Premier
shall be entitled to place restrictive legends upon certificates for shares of
Premier Common Stock issued to Affiliates of Farmers pursuant to this Agreement
to enforce the provisions of this Section 8.9. Premier shall not be required to
maintain the effectiveness of the Registration Statement under the 1933 Act for
the purposes of resale of Premier Common Stock by such Affiliates.
8.10 EMPLOYEE BENEFITS AND CONTRACTS.
-------------------------------
(a) Following the Effective Time, Premier shall provide generally to
officers and employees of Farmers who, at or after the Effective Time, become
employees of a Premier Company, 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 Premier Companies to their similarly situated
officers and employees. For purposes of participation under such employee
benefit plans, the service of the employees of Farmers prior to the Effective
Time shall be treated as service with a Premier Company participating in such
employee benefit plans, provided that, with respect to any employee benefit plan
where the benefits are funded through insurance, the granting of such service
shall be subject to the consent of the appropriate insurer and may be
conditioned upon an employee's participation in a Farmers Benefit Plan of the
same type immediately prior to the Effective Time.
(b) Premier and its Subsidiaries also shall honor in accordance with
their terms all employment, severance, consulting and other compensation
Contracts disclosed in Section 8.10(b) of the Farmers Disclosure Memorandum
---------------------
between Farmers and any current or former director, officer, or employee thereof
and all provisions for vested benefits accrued through the Effective Time under
the Farmers Benefit Plans.
8.11 OTHER ACQUISITIONS, MERGERS, OR COMBINATIONS INVOLVING A PREMIER
----------------------------------------------------------------
COMPANY. Notwithstanding anything contained in this Agreement to the contrary,
-------
Premier or any Premier Company may enter into and consummate an acquisition,
merger, or combination of, with, or involving any bank, bank holding company,
thrift, thrift holding company, mortgage company, or other financial services
company without the prior consent of Farmers.
26
ARTICLE IX
----------
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 consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by both Parties pursuant to Section 11.6 of
this Agreement:
(a) Shareholder Approval. The shareholders of Farmers shall have
--------------------
approved this Agreement, and the consummation of the transactions contemplated
hereby, including the Merger, as and to the extent required by Law, the American
Stock Exchange, Inc. or by the provisions of any governing instruments.
(b) Regulatory Approvals. All Consents of, filings and registrations
--------------------
with, and notifications to 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
(including, without limitation, requirements relating to the raising of
additional capital or the disposition of Assets) which in the reasonable
judgment of the Board of Directors of either Party would so materially adversely
impact the economic or business benefits of the transactions contemplated by
this Agreement as to render inadvisable the consummation of the Merger.
(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. No Consent so obtained which is necessary to consummate
the transactions contemplated hereby shall be conditioned or restricted in a
manner which in the reasonable judgment of the Board of Directors of either
Party would so materially adversely impact the economic or business benefits of
the transactions contemplated by this Agreement as to render inadvisable the
consummation of the Merger.
(d) Registration Statement. The Registration Statement shall be
----------------------
effective under the 1933 Act, no stop orders suspending the effectiveness of the
Registration Statement shall have been issued, no action, suit, proceeding or
investigation by the SEC to suspend the effectiveness thereof shall have been
initiated and be continuing, and all necessary approvals under state securities
Laws or the 1933 Act or 1934 Act relating to the issuance or trading of the
shares of the Premier Common Stock issuable pursuant to the Merger shall have
been received.
(e) Exchange Listing. The shares of Premier Common Stock issuable
----------------
pursuant to the Merger shall have been approved for listing on the American
Stock Exchange.
27
(f) Tax Matters. Premier and Farmers shall have received a written
-----------
opinion of counsel from Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC, in form
reasonably satisfactory to them (the "Tax Opinion"), to the effect that for
federal income tax purposes (i) the Merger will constitute a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, (ii) the
exchange in the Merger of Farmers Common Stock for Premier Common Stock will not
give rise to gain or loss to the shareholders of Farmers with respect to such
exchange (except to the extent of any cash received), and (iii) neither Premier
nor Farmers will recognize gain or loss as a consequence of the Merger. In
rendering such Tax Opinion, counsel shall be entitled to rely upon
representations of officers of Premier and Farmers reasonably satisfactory in
form and substance to such counsel.
(g) Affiliate Agreements. The Parties shall have received from each
--------------------
affiliate of Farmers the affiliates agreement referred to in Section 8.9 hereof.
(h) Pooling of Interests Letter. The Parties shall have received a
---------------------------
letter from Ernst & Young, L.L.P., and from Read, Xxxxxx & Xxxxxxxx dated as of
the Effective Time, to the effect that the Merger will qualify for pooling-of-
interests accounting treatment under Accounting Principles Board Opinion No. 16
if closed and consummated in accordance with this Agreement.
9.2 CONDITIONS TO OBLIGATIONS OF PREMIER. The obligations of Premier 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 Premier 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 Farmers set forth
or referred to 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 are confined to a specified
date shall speak only as of such date). The representations and warranties of
Farmers set forth in Section 5.3 of this Agreement shall be true and correct
(except for inaccuracies which are de minimis in amount). Each and every other
representation and warranty of Farmers set forth in Article V of this Agreement
shall be true and correct in all Material respects.
(b) Performance of Agreements and Covenants. Each and all of the
---------------------------------------
agreements and covenants of Farmers 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. Farmers shall have delivered to Premier (i) a
------------
certificate, dated as of the Effective Time and signed on its behalf by its
president and its chief financial officer, to the effect that the conditions of
its obligations set forth in Sections 9.2(a) and 9.2(b) of this Agreement have
been satisfied, and (ii) a certificate, dated as of the Effective Time and
signed on its behalf by its Secretary, which certificate shall include certified
copies of resolutions duly adopted
28
by Farmers' Board of Directors and shareholders 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,
certified copies of Farmers' Articles of Incorporation, and certified copies of
Farmers' Bylaws, all in such reasonable detail as Premier and its counsel shall
request.
(d) Opinion of Counsel. Farmers shall have delivered to Premier an
------------------
opinion of Xxxxxxxxxx Xxxxxxxx, LLP, counsel to Farmers, dated as of the
Effective Time, in form reasonably satisfactory to Premier, as to the matters
set forth in Exhibit "2" hereto.
-----------
(e) Claims/Indemnification Letters. Each of the directors and
------------------------------
officers of Farmers shall have executed and delivered to Premier letters in
substantially the form of Exhibit "3" hereto.
-----------
(f) Premier Fairness Opinion. Premier shall have received from The
------------------------
Xxxxxxxx-Xxxxxxxx Company, LLC, a letter, dated not more than five (5) business
days prior to the date of the Registration Statement, to the effect that, in the
opinion of such firm, the consideration to be paid to Farmers shareholders in
connection with the Merger is fair, from a financial point of view, to the
shareholders of Premier.
(g) Litigation. No preliminary or permanent injunction or other
----------
order by any federal or state court which prevents the consummation of the
Merger shall have been issued and shall remain in effect, nor any action
therefor initiated which, in the good faith judgment of the Board of Directors
of Premier, it is not in the best interests of the shareholders of Premier to
contest; and there shall not have been instituted or be pending any action or
proceeding by any United States federal or state government or governmental
agency or instrumentality (i) challenging or seeking to restrain or prohibit the
consummation of the Merger or seeking material damages in connection with the
Merger; or (ii) seeking to prohibit Premier's ownership or operation of all or a
material portion of Premier's or Farmers' business or assets, or compel Premier
to dispose of or hold separate all or a material portion of Premier's or
Farmers' business or assets as a result of the Merger, which, in any case, in
the reasonable judgment of Premier based upon a legal opinion from counsel,
could result in the relief sought being obtained.
9.3 CONDITIONS TO OBLIGATIONS OF FARMERS. The obligations of Farmers 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 Farmers 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 Premier and PMB
set forth or referred to 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 are confined to a
specified date shall speak only as of such date). The representations and
warranties of Premier set forth in Section
29
6.3 of this Agreement shall be true and correct (except for inaccuracies which
are de minimis in amount). Each and every other representation and warranty of
Premier or PMB set forth in Article VI of this Agreement shall be true and
correct in all Material respects.
(b) Performance of Agreements and Covenants. Each and all of the
---------------------------------------
agreements and covenants of Premier 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. Premier shall have delivered to Farmers (i) a
------------
certificate, dated as of the Effective Time and signed on its behalf by its
chief executive officer and its chief financial officer, to the effect that the
conditions of its obligations set forth in Section 9.3(a) and 9.3(b) of this
Agreement have been satisfied, and (ii) a certificate, dated as of the Effective
Time and signed on its behalf by its Secretary, which certificate shall include
certified copies of resolutions duly adopted by Premier'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, certified copies of Premier's Articles of
Incorporation, and certified copies of Premier's Bylaws, all in such reasonable
detail as Farmers and its counsel shall request.
(d) Opinion of Counsel. Premier shall have delivered to Farmers an
------------------
opinion of Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC, counsel to Premier, dated as
of the Effective Time, in form reasonably acceptable to Farmers, as to matters
set forth in Exhibit "4" hereto.
-----------
(e) Litigation. No preliminary or permanent injunction or other
----------
order by any federal or state court which prevents the consummation of the
Merger shall have been issued and shall remain in effect, nor any action
therefor initiated which, in the good faith judgment of the Board of Directors
of Farmers, it is not in the best interests of the shareholders of Farmers to
contest; and there shall not have been instituted or be pending any action or
proceeding by any United States federal or state government or governmental
agency or instrumentality (i) challenging or seeking to restrain or prohibit the
consummation of the Merger or seeking material damages in connection with the
Merger; or (ii) seeking to prohibit Premier's ownership or operation of all or a
material portion of Premier's or Farmers' business or assets, or compel Premier
to dispose of or hold separate all or a material portion of Premier's or
Farmers' business or assets as a result of the Merger, which, in any case, in
the reasonable judgment of Farmers based upon a legal opinion from counsel,
could result in the relief sought being obtained.
(f) Farmers Fairness Opinion. Xxxxxx shall have received from an
------------------------
investment banking firm to be selected by Farmers, a letter, dated not more than
five (5) business days prior to the date of the Registration Statement, to the
effect that, in the opinion of such firm, the consideration to be paid to
Farmers shareholders in connection with the Merger is fair, from a financial
point of view, to the shareholders of Farmers.
30
ARTICLE X
---------
TERMINATION
-----------
10.1 TERMINATION. Notwithstanding any other provision of this Agreement,
-----------
and notwithstanding the approval of this Agreement by the shareholders of
Farmers, 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 Farmers and the
Board of Directors of Premier; or
(b) By the Board of Directors of either Party in the event of a
material breach by the other Party of any representation or warranty contained
in this Agreement which cannot be or has not been cured within thirty (30) days
after the giving of written notice to the breaching Party of such breach and
which breach would provide the non-breaching Party the ability to refuse to
consummate the Merger; or
(c) By the Board of Directors of either Premier or Farmers 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 thirty
(30) days after the giving of written notice to the breaching Party of such
breach; or
(d) By the Board of Directors of either Premier or Farmers 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 if any action taken by such
authority is not appealed within the time limit for appeal, or (ii) if the
shareholders of Farmers fail to vote their approval of this Agreement and the
transactions contemplated hereby as required by the Financial Institutions Code
of Georgia and the GBCC at the Shareholders' Meeting where the transactions were
presented to such shareholders for approval and voted upon; or
(e) By the Board of Directors of either Premier or Farmers in the
event that the Merger shall not have been consummated on or before November 30,
1999, but only 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); or
(f) By the Board of Directors of either Premier or Farmers (provided
that the terminating Party is not then in breach of any representation or
warranty contained in this Agreement or in the material breach of any covenant
or other agreement contained in this Agreement) in the event that any of the
conditions precedent to the obligations of such Party to consummate the Merger
(other than as contemplated by Section 10.1(d) of this Agreement) cannot be
satisfied or fulfilled by the date specified in Section 10.1(e) of this
Agreement; or
31
(g) By the Board of Directors of Premier, at any time, if it is
determined by Ernst & Young, LLP or Read, Xxxxxx & Xxxxxxxx that the Merger
cannot be accounted for as a "pooling of interests" transaction; or
(h) By the Board of Directors of either Party, at any time on or
prior to April 30, 1999, without any Liability, in the event that the review of
the Assets, business, financial condition, results of operations, and prospects
of the other Party or any of the disclosures contained in the other Party's
Disclosure Memorandum causes the Board of Directors of the Party seeking to
---------------------
terminate to determine, in its reasonable good faith judgment, that a fact or
circumstance exists or is likely to exist or result which materially and
adversely impacts one or more of the economic benefits to such Party of the
transactions contemplated by this Agreement so as to render inadvisable the
consummation of the Merger; or
(i) By the Board of Directors of either Party, if, after the date
hereof, a Material adverse change in the financial condition or business of the
other Party shall have occurred or the other Party shall have suffered a
Material loss or damage to any of its properties or Assets, which change, loss
or damage will result in a Material Adverse Effect on the ability of such Party
to conduct its business.
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, except that the provisions of this Section
10.2 and Article XI and Section 8.5(b) of this Agreement shall survive any such
termination and abandonment.
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 this Section 10.3 and
Articles II, III, IV and XI and Section 8.9 of this Agreement.
ARTICLE XI
----------
MISCELLANEOUS
-------------
11.1 DEFINITIONS. Except as otherwise provided herein, the capitalized
-----------
terms set forth below (in their singular and plural forms as applicable) shall
have the following meanings:
"1933 Act" shall mean the Securities Act of 1933, as amended.
"1934 Act" shall mean the Securities Exchange Act of 1934, as amended.
"ACQUISITION PROPOSAL" shall mean any tender offer or exchange offer or any
--------------------
proposal for a merger (other than the Merger), acquisition of all of the stock
or Assets of, or other business combination involving Farmers or the acquisition
of a substantial equity interest in, or a substantial portion of the Assets of
Farmers.
32
"AFFILIATE" of a Person shall mean: (i) any other Person directly, or
indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person; (ii) any officer, director, partner,
employer, or direct or indirect beneficial owner of any 10% or greater equity or
voting interest of such Person; or (iii) any other Person for which a Person
described in clause (ii) acts in such capacity.
"AGREEMENT" shall mean this Agreement and Plan of Reorganization and the
other Exhibits delivered pursuant hereto and incorporated herein by reference.
"ALLOWANCE" shall have the meaning provided in Section 5.9 of this
Agreement.
"ASSETS" of a Person shall mean all of the assets, properties, businesses
and rights of such Person of every kind, nature, character and description,
whether real, personal or mixed, tangible or intangible, accrued or contingent,
or otherwise relating to or utilized in such Person's business, directly or
indirectly, in whole or in part, whether or not carried on the books and records
of such Person, and whether or not owned in the name of such Person or any
Affiliate of such Person and wherever located.
"BHC ACT" shall mean the federal Bank Holding Company Act of 1956, as
amended.
"CLOSING" shall mean the closing of the transactions contemplated hereby,
as described in Section 1.2 of this Agreement.
"CLOSING DATE" shall mean the date on which the Closing occurs.
"CONSENT" shall mean any consent, approval, authorization, clearance,
exemption, waiver, or similar affirmation by any Person pursuant to any
Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease, obligation,
plan, practice, restriction, understanding or undertaking of any kind or
character, or other document to which any Person is a party or that is binding
on any Person or its capital stock, Assets or business.
"DEFAULT" shall mean (a) any breach or violation of or default under any
Contract, Order or Permit, (b) 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 (c) 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.
"EFFECTIVE TIME" shall mean the date and time at which the Merger becomes
effective as defined in Section 1.3 of this Agreement.
33
"ENVIRONMENT" shall have the meaning specified in the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. (S) 9601(8).
"ENVIRONMENTAL LAWS" shall mean all Laws pertaining to pollution or
protection of the environment and which are administered, interpreted or
enforced by the United States Environmental Protection Agency and state and
local agencies with primary jurisdiction over pollution or protection of the
environment, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act, 42 U.S.C. (S) 9601 et. seq., the
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Resource, Conservation and Recovery Act, 42 U.S.C. (S) 6901 et. seq., the Toxic
-------
Substance Control Act, 15 U.S.C. (S) 2601, et. seq., and all implementing
regulations and state counterparts of such acts.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" shall refer to a relationship between entities such that
the entities would, now or at any time in the past, constitute a "single
employer" within the meaning of Section 414 of the Internal Revenue Code.
"EXCHANGE RATIO" shall have the meaning provided in Section 3.1 of this
Agreement.
"EXHIBITS" 1 through 4, inclusive, shall mean the Exhibits so marked,
copies of which are attached to this Agreement. Such Exhibits are hereby
incorporated by reference herein and made a part hereof and may be referred to
in this Agreement and any other related instrument or document without being
attached hereto or thereto.
"FARMERS BENEFIT PLANS" shall have the meaning set forth in Section 5.14 of
this Agreement.
"FARMERS COMMON STOCK" shall mean the $5.00 par value common stock of
Farmers.
"FARMERS DISCLOSURE MEMORANDUM" shall mean the written information entitled
"Farmers Disclosure Memorandum" delivered to Premier on or prior to the date
---------------------
specified in Section 10.1(h) of this Agreement describing in reasonable detail
the matters contained therein, specifically referencing each Section of this
Agreement under which such disclosure is being made.
"FARMERS ERISA PLAN" shall have the meaning provided in Section 5.14 of
this Agreement.
"FARMERS FINANCIAL STATEMENTS" shall mean (a) the balance sheets (including
related notes and schedules, if any) of Farmers as of March 31, 1999 and as of
December 31, 1998 and as of December 31, 1997, and the related statements of
income, changes in shareholders' equity, and cash flows (including related notes
and schedules, if any) for the three months ended March 31, 1999, and for each
of the two fiscal years ended December 31, 1998 included in the Farmers
Disclosure Memorandum, and (b) the balance sheets (including related notes and
---------------------
schedules, if any) of Farmers and related statements of income, changes in
shareholders' equity, and cash flows (including related notes and schedules, if
any) filed with respect to periods ended subsequent to March 31, 1999.
34
"FARMERS STOCK PLANS" shall mean the existing stock option and other stock-
based compensation plans of Farmers disclosed in Section 5.14 of the Farmers
Disclosure Memorandum.
---------------------
"GAAP" shall mean generally accepted accounting principles, consistently
applied during the periods involved.
"GBCC" shall mean the Georgia Business Corporation Code (Chapter 2 of Title
14 of the Official Code of Georgia).
"GEORGIA CERTIFICATE OF MERGER" shall mean the Certificate of Merger to be
executed by the Surviving Bank and filed with the Secretary of State of the
State of Georgia relating to the Merger as contemplated by Sections 1.1 and 1.3
of this Agreement.
"HAZARDOUS MATERIAL" shall mean any substance which is a "hazardous
substance"or "toxic substance" as defined in the Comprehensive Environmental
Response, Compensation, and Liability Act, 42 U.S.C. (S) 9601 et seq., or any
------
other substance or material defined, designated, classified or regulated as
hazardous or toxic under any Environmental Law, specifically including asbestos
requiring abatement, removal or encapsulation pursuant to the requirements of
Environmental Laws, polychlorinated biphenyls, and petroleum and petroleum
products).
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of 1986, as
amended, and the rules and regulations promulgated thereunder.
"Knowledge" as used with respect to a Person shall mean the knowledge after
due inquiry of the Chairman, President, Chief Financial Officer, Chief
Accounting Officer, Chief Credit Officer, or any Senior or Executive Vice
President of such Person.
"LAW" shall mean any code, law, ordinance, regulation, reporting or
licensing requirement, rule, or statute applicable to a Person or its Assets,
Liabilities or business, including, without limitation, those promulgated,
interpreted or enforced by any of the Regulatory Authorities.
"LIABILITY" shall mean any direct or indirect, primary or secondary,
liability, indebtedness, obligation, penalty, cost or expense (including,
without limitation, costs of investigation, collection and defense), claim,
deficiency, guaranty or endorsement of or by any Person (other than endorsements
of notes, bills, checks, and drafts presented for collection or deposit in the
ordinary course of business) of any type, whether accrued, absolute or
contingent, liquidated or unliquidated, matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, easement, encroachment,
encumbrance, hypothecation, infringement, lien, mortgage, pledge, reservation,
restriction, security interest, title retention or other security arrangement,
or any adverse right or interest, charge, or claim of any nature whatsoever on,
or with respect to, any property or property interest, other than (i) Liens for
current property Taxes not yet due and payable; (ii) for depository institution
Subsidiaries of a Party,
35
pledges to secure deposits and (iii) other Liens incurred in the ordinary course
of the banking business.
"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 or requesting information relating to or affecting a Party, its
business, its Assets (including, without limitation, Contracts related to it),
or the transactions contemplated by this Agreement, but shall not include
regular, periodic examinations of depository institutions and their Affiliates
by Regulatory Authorities.
"LOAN PROPERTY" shall mean any property owned by the Party in question or
by any of its Subsidiaries or in which such Party or Subsidiary holds a security
interest, and, where required by the context, includes the owner or operator of
such property, but only with respect to such property.
"MATERIAL" for purposes of this Agreement shall be determined in light of
the facts and circumstances of the matter in question; provided that any
specific monetary amount stated in this Agreement shall determine materiality in
that instance.
"MATERIAL ADVERSE EFFECT" on a Party shall mean an event, change or
occurrence which has a material adverse impact on (a) the financial position,
business, or results of operations of such Party and its Subsidiaries, taken as
a whole, or (b) 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 impact" shall not be deemed to
include the impact of (w) changes in banking and similar Laws of general
applicability or interpretations thereof by courts or governmental authorities,
(x) changes in GAAP or regulatory accounting principles generally applicable to
banks and their holding companies, (y) 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, or (z) the Merger and
compliance with the provisions of this Agreement on the operating performance of
the Parties.
"MERGER" shall mean the merger of PMB with and into Farmers referred to in
Section 1.1 of this Agreement.
"NASD" shall mean the National Association of Securities Dealers, Inc.
"ORDER" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or writ
of any federal, state, local or foreign or other court, arbitrator, mediator,
tribunal, administrative agency or Regulatory Authority.
"PARTICIPATION FACILITY" shall mean any facility or property in which the
Party in question or any of its Subsidiaries participates in the management
(including any property or facility held in
36
a joint venture) and, where required by the context, said term means the owner
or operator of such facility or property, but only with respect to such facility
or property.
"PARTY" shall mean either Premier, PMB or Farmers, and "Parties" shall mean
all of Premier, PMB and Farmers.
"PERMIT" shall mean any federal, state, local, and foreign governmental
approval, authorization, certificate, easement, filing, franchise, license,
notice, permit, or right to which any Person is a party or that is or may be
binding upon or inure to the benefit of any Person or its securities, Assets,
Liabilities, or business.
"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.
"PMB COMMON STOCK" shall mean the no par value common stock of PMB.
"PREMIER COMMON STOCK" shall mean the $1.00 par value common stock of
Premier.
"PREMIER COMPANIES" shall mean, collectively, Premier and all Premier
Subsidiaries.
"PREMIER DISCLOSURE MEMORANDUM" shall mean the written information entitled
"Premier Disclosure Memorandum" delivered to Farmers on or prior to the date
---------------------
specified in Section 10.1(h) of this Agreement describing in reasonable detail
the matters contained therein, specifically referencing each Section of this
Agreement under which such disclosure is being made.
"PREMIER FINANCIAL STATEMENTS" shall mean (a) the consolidated balance
sheets (including related notes and schedules, if any) of Premier as of December
31, 1998, 1997 and 1996, and the related statements of income, changes in
shareholders' equity, and cash flows (including related notes and schedules, if
any) for each of the three years ended December 31, 1998, as filed by Premier in
SEC Documents and (b) the consolidated balance sheets (including related notes
and schedules, if any) of Premier and related statements of income, changes in
shareholders' equity, and cash flows (including related notes and schedules, if
any) included in SEC Documents filed with respect to periods ended subsequent to
December 31, 1998.
"PREMIER SUBSIDIARIES" shall mean the Subsidiaries of Premier at the
Effective Time.
"PROXY STATEMENT" shall mean the proxy statement used by Farmers to solicit
the approval of its shareholders of the transactions contemplated by this
Agreement, which shall be included in the Registration Statement of Premier
relating to shares of Premier Common Stock to be issued to the shareholders of
Farmers.
37
"REGISTRATION STATEMENT" shall mean the Registration Statement on Form S-4,
or other appropriate form, filed with the SEC by Premier under the 1933 Act with
respect to the shares of Premier Common Stock to be issued to the shareholders
of Farmers in connection with the transactions contemplated by this Agreement
and which shall include the Proxy Statement.
"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 Thrift Supervision (including its
predecessor, the Federal Home Loan Bank Board), the Office of the Comptroller of
the Currency, the Federal Deposit Insurance Corporation, all state regulatory
agencies having jurisdiction over the Parties and their respective Subsidiaries,
the NASD and the SEC.
"REPRESENTATIVES" shall have the meaning provided in Section 8.7 of this
Agreement.
"RIGHTS" shall mean all arrangements, calls, commitments, Contracts,
options, rights to subscribe to, scrip, understandings, warrants or other
binding obligations of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of the capital stock of a
Person or by which a Person is or may be bound to issue additional shares of its
capital stock or other Rights.
"SEC" shall mean the United States Securities and Exchange Commission.
"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 any Regulatory Authority
pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the Investment
Company Act of 1940, as amended, the Investment Advisors Act of 1940, as
amended, the Trust Indenture Act of 1939, as amended, and the rules and
regulations of any Regulatory Authority promulgated thereunder.
"SHAREHOLDERS' MEETING" shall mean the meeting of the shareholders of
Farmers to be held pursuant to Section 8.1 of this Agreement, including any
adjournment or adjournments thereof.
"SUBSIDIARIES" shall mean all those corporations, banks, associations or
other entities of which the entity in question owns or controls 50% or more of
the outstanding equity securities either directly or through an unbroken chain
of entities as to each of which 50% or more of the outstanding equity securities
is owned directly or indirectly by its parent; provided, however, 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.
"SURVIVING BANK" shall mean Farmers, as the surviving bank resulting from
the Merger.
38
"TAX" or "TAXES" shall mean any federal, state, county, local or foreign
income, profits, franchise, gross receipts, payroll, sales, employment, use,
property, withholding, excise, occupancy and other taxes, assessments, charges,
fares or impositions, including interest, penalties and additions imposed
thereon or with respect thereto.
"YEAR 2000 PROBLEM" shall mean any problem affecting the ability of a Party
to continue operation as an ongoing business or to provide its usual and
customary services, relating to the failure of software, hardware or other
computer equipment to: (a) store all date-related information and process all
data interfaces involving dates in a manner that unambiguously identifies the
century, for all date values before, during or after the Year 2000; (b)
calculate, sort, report and otherwise operate correctly and in a consistent
manner for all date information processed by any software, hardware or other
computer equipment, whether before, during or after the Year 2000; (c)
calculate, sort, report and otherwise operate correctly, in a consistent manner
and without interruption regardless whether the date on which the software,
hardware or other computer equipment is operated or executed is before, during
or after the Year 2000; (d) report and display all dates with a four-digit date
so that the century is unambiguously identified; and (e) handle all leap years,
including but not limited to the Year 2000 leap year, correctly.
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.
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(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 each of the Parties shall bear and pay (i) one-half of the
filing fees payable in connection with the Registration Statement and the
applications filed with other Regulatory Authorities, and (ii) one-half of the
costs incurred in connection with the printing or copying of the Proxy Statement
and the Registration Statement.
(b) Notwithstanding the provisions of Section 11.2(a) of this
Agreement, if for any reason this Agreement is terminated pursuant to Sections
10.1(b) or 10.1(c) of this Agreement, the breaching Party agrees to pay the non-
breaching Party (i) an amount equal to the reasonable and documented fees and
expenses incurred by such non-breaching Party in connection with the examination
and investigation of the breaching Party, the preparation and negotiation of
this Agreement and related agreements, regulatory filings and other documents
related to the transactions contemplated hereunder, including, without
limitation, fees and expenses of investment banking consultants, accountants,
attorneys and other agents and (ii) (x) $50,000 if the breach is not willful or
(y) $300,000 if the breach is willful or this Agreement is terminated in
contemplation of an Acquisition Proposal, which sums represent compensation for
the non-breaching Party's loss as a
39
result of the transactions contemplated by this Agreement not being consummated.
Final settlement with respect to payment of such fees and expenses shall be made
within thirty (30) days after the termination of this Agreement.
11.3 BROKERS AND FINDERS. 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 financial
advisory fees, investment bankers' fees, brokerage fees, commissions, or
finders' fees in connection with this Agreement or the transactions contemplated
hereby, other than The Xxxxxxxx-Xxxxxxxx Company, LLC, employed by Premier, and
the investment banking firm selected by Farmers for the purpose of rendering the
fairness opinion referred to in Section 9.3(f). In the event of a claim by any
broker or finder based upon his or its representing or being retained by or
allegedly representing or being retained by Premier or Farmers, each of Premier
and Farmers, as the case may be, agrees 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 documents and instruments referred to herein)
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. 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 8.10 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; provided, however, that after
any such approval by the holders of Farmers Common Stock, there shall be made no
amendment that pursuant to the Financial Institutions Code of Georgia or the
GBCC requires further approval by such shareholders without the further approval
of such shareholders.
11.6 WAIVERS.
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(a) Prior to or at the Effective Time, Premier, acting through its
Board of Directors, chief executive officer or other authorized officer, shall
have the right to waive any Default in the performance of any term of this
Agreement by Farmers, to waive or extend the time for the compliance or
fulfillment by Farmers of any and all of its obligations under this Agreement,
and to waive any or all of the conditions precedent to the obligations of
Premier 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 and signed by a duly authorized officer of Premier.
(b) Prior to or at the Effective Time, Farmers, acting through its
Board of Directors, president or other authorized officer, shall have the right
to waive any Default in the
40
performance of any term of this Agreement by Premier, to waive or extend the
time for the compliance or fulfillment by Premier of any and all of its
obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of Farmers 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 and signed by a duly authorized
officer of Farmers.
(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 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
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permitted hereunder shall be in writing and sufficient if delivered by hand, by
facsimile transmission, 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:
Premier: Premier Bancshares, Inc.
0000 Xxxxxxx Xxxxx
000 Xxxx Xxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
Copy to Counsel: Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
41
PMB: PMB Acquisition Corp.
0000 Xxxxxxx Xxxxx
000 Xxxx Xxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxxx
Chairman and Chief Executive Officer
Copy to Counsel: Xxxxxx Xxxxxxx Xxxxxxxxx & Xxxx, PLLC
One Atlantic Center
0000 Xxxx Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Farmers: Farmers & Merchants Bank
0000 Xxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxxx X. Xxxxxxx
President and Chief Executive Officer
Copy to Counsel: Xxxxxxxxxx Xxxxxxxx, LLP
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: X. Xxxxxxxxx Xxxx, Esq.
11.9 GOVERNING LAW. This Agreement shall be governed by and construed in
-------------
accordance with the Laws of the State of Georgia, without regard to any
applicable conflicts of Laws, except to the extent that the federal laws of the
United States may apply to the Merger.
11.10 COUNTERPARTS. This Agreement may be executed in one 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.
42
11.12 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that irreparable
------------------------
damage would occur in the event that any of the provisions of this Agreement
were not performed in accordance with its specific terms or were 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.
11.13 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.
[Signatures contained on following page]
43
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: PREMIER BANCSHARES, INC.
/s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------- --------------------------------------
Xxxxxxx X. Xxxxx Xxxxxxx X. Xxxxxxx
Secretary Chairman and Chief Executive Officer
[CORPORATE SEAL]
ATTEST: FARMERS & MERCHANTS BANK
/s/ W. E. Xxxxxxxxx, Jr. By: /s/ Xxxx X. Xxxxxxx
-------------------------- --------------------------------------
Name: W. E. Xxxxxxxxx, Jr. Xxxx X. Xxxxxxx
Title: Sr. Vice President President and Chief Executive Officer
[BANK SEAL]
ATTEST: PMB ACQUISITION CORP.
/s/ Xxxxxxx X. Xxxxx By: /s/ Xxxxxxx X. Xxxxxxx
-------------------------- --------------------------------------
Xxxxxxx X. Xxxxx Xxxxxxx X. Xxxxxxx
Secretary Chairman and Chief Executive Officer
[CORPORATE SEAL]
44
EXHIBIT 1
---------
AFFILIATE AGREEMENT
Premier Bancshares, Inc.
0000 Xxxxxxx Xxxxx
000 Xxxx Xxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Farmers & Merchants Bank
0000 Xxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
The undersigned is a shareholder of Farmers & Merchants Bank ("Farmers"), a
commercial bank organized and existing under the laws of the State of Georgia,
and will become a shareholder of Premier Bancshares, Inc. ("Premier") pursuant
to the transactions described in the Agreement and Plan of Reorganization, dated
as of April 20, 1999 (the "Agreement"), by and between Farmers, Premier and PMB
Acquisition Corp. ("PMB"). Under the terms of the Agreement, PMB and Farmers
will be merged (the "Merger") and the shares of common stock of Farmers
("Farmers Common Stock") will be converted into shares of common stock of
Premier ("Premier Common Stock"). This Affiliate Agreement represents an
agreement between the undersigned and Premier regarding certain rights and
obligations of the undersigned in connection with the shares of Premier to be
received by the undersigned as a result of the Merger.
In consideration of the Merger and the mutual covenants contained herein,
the undersigned and Premier hereby agree as follows:
Affiliate Status. The undersigned understands and agrees that as to
----------------
Farmers the undersigned is an "affiliate" under Rule 145(c) as defined in Rule
405 of the Rules and Regulations of the Securities and Exchange Commission
("SEC") under the Securities Act of 1933, as amended ("1933 Act"), and the
undersigned anticipates that the undersigned will be such an "affiliate" at the
time of the Merger.
Initial Restriction on Disposition. The undersigned agrees that the
----------------------------------
undersigned will not, except by operation of law, by will or under the laws of
descent and distribution, sell, transfer, or otherwise dispose of the
undersigned's interests in, or reduce the undersigned's risk relative to, any of
the shares of Premier Common Stock into which the undersigned's shares of
Farmers Common Stock are converted upon consummation of the Merger until such
time as Premier notifies the undersigned that the requirements of SEC Accounting
Series Release Nos. 130 and 135 ("ASR 130 and 135") have been met. The
undersigned understands that ASR 130 and 135 relate to
publication of financial results of post-Merger combined operations of Premier
and Farmers. Premier agrees that it will publish such results within 45 days
after the end of the first fiscal quarter of Premier containing the required
period of post-Merger combined operations and that it will notify the
undersigned promptly following such publication.
Covenants and Warranties of Undersigned. The undersigned represents,
---------------------------------------
warrants and agrees that:
(a) During the 30 days immediately preceding the effective time
of the Merger, the undersigned will not, except by operation of law, by
will, or under the laws of descent and distribution, sell, transfer, or
otherwise dispose of the undersigned's interests in, or reduce the
undersigned's risk relative to, any of the shares of Farmers Common Stock
beneficially owned by the undersigned as of the date of the shareholders'
meeting of Farmers held to approve the Merger.
(b) The Premier Common Stock received by the undersigned as a
result of the Merger will be taken for the undersigned's own
account and not for others, directly or indirectly, in whole or in part.
(c) The undersigned understands that any distribution by the
undersigned of the Premier Common Stock has not been registered under the
1933 Act and that shares of Premier Common Stock received pursuant to the
Merger can only be sold by the undersigned (1) following registration under
the 1933 Act, or (2) in conformity with the volume and other requirements
of Rule 145(d) promulgated by the SEC as the same now exist or may
hereafter be amended, or (3) to the extent some other exemption from
registration under the 1933 Act might be available. The undersigned
---------------
understands that Premier is under no obligation to file a registration
----------------------------------------------------------------------
statement with the SEC covering the disposition of the undersigned's shares
---------------------------------------------------------------------------
of Premier Common Stock.
-----------------------
4. Restrictions on Transfer. The undersigned understands and agrees that
------------------------
stop transfer instructions with respect to the shares of Premier Common Stock
received by the undersigned pursuant to the Merger will be given to Premier's
transfer agent and that there will be placed on the certificates for such
shares, or shares issued in substitution thereof, a legend stating in substance:
"The shares represented by this certificate were issued
pursuant to a business combination which is accounted for as
a "pooling of interests" and may not be sold, nor may the
owner thereof reduce his risks relative thereto in any way,
until such time as Premier has published the financial
results covering at least 30 days of combined operations
after the effective date of the merger through which the
business combination was effected. In addition, the shares
represented by this certificate may not be sold, transferred
or otherwise disposed of except or unless (a) covered by an
effective registration statement under the Securities Act of
1933, as amended, (b) in accordance with (i) Rule
2
145(d) (in the case of shares issued to an individual who is
not an affiliate of Premier) or (ii) Rule 144 (in the case
of shares issued to an individual who is an affiliate of
Premier) of the Rules and Regulations of such Act, or (c) in
accordance with a legal opinion satisfactory to counsel for
Premier that such sale or transfer is otherwise exempt from
the registration requirements of such Act."
Such legend will also be placed on any certificate representing Premier
securities issued subsequent to the original issuance of Premier Common Stock
pursuant to the Merger as a result of any stock dividend, stock split or other
recapitalization as long as Premier Common Stock issued to the undersigned
pursuant to the Merger has not been transferred in such manner to justify the
removal of the legend therefrom. If the provisions of Rules 144 and 145 are
amended to eliminate restrictions applicable to the Premier Common Stock
received by the undersigned pursuant to the Merger, or at the expiration of the
restrictive period set forth in Rule 145(d), Premier, upon the request of the
undersigned, will cause the certificates representing the shares of Premier
Common Stock issued to the undersigned in connection with the Merger to be
reissued free of any legend relating to the restrictions set forth in Rules 144
and 145(d) upon receipt by Premier of an opinion of its counsel to the effect
that such legend may be removed.
5. Understanding of Restrictions on Dispositions. The undersigned has
---------------------------------------------
carefully read the Agreement and this Affiliate Agreement and discussed their
requirements and impact upon his or her ability to sell, transfer or otherwise
dispose of the shares of Premier Common Stock received by the undersigned, to
the extent the undersigned believes necessary, with the undersigned's counsel or
counsel for Farmers.
6. Filing of Reports by Premier. Premier agrees, for a period of two
----------------------------
years after the effective date of the Merger, to file on a timely basis all
reports required to be filed by it pursuant to Section 13 of the Securities
Exchange Act of 1934, as amended, so that the public information provisions of
Rule 145(d) promulgated by the SEC as the same are presently in effect will be
available to the undersigned in the event the undersigned desires to transfer
any shares of Premier Common Stock issued to the undersigned pursuant to the
Merger.
7. Transfer Under Rule 145(d). If the undersigned desires to sell or
--------------------------
otherwise transfer the shares of Premier Common Stock received by the
undersigned in connection with the Merger at any time during the restrictive
period set forth in Rule 145(d), the undersigned will provide the necessary
representation letter to the transfer agent for the Premier Common Stock
together with such additional information as the transfer agent may reasonably
request. If Premier's counsel concludes that such proposed sale or transfer
complies with the requirements of Rule 145(d), Premier shall cause such counsel
to provide such opinions as may be necessary to Premier's transfer agent so that
the undersigned may complete the proposed sale or transfer.
8. Acknowledgments. The undersigned recognizes and agrees that the
---------------
foregoing provisions also apply to (a) the undersigned's spouse, (b) any
relative of the undersigned or of the
3
undersigned's spouse who has the same home as the undersigned, (c) any trust or
estate in which the undersigned, the undersigned's spouse, and any such relative
collectively own at least a 10% beneficial interest or of which any of the
foregoing serves as trustee, executor or in any similar capacity and (d) any
corporation or other organization in which the undersigned, the undersigned's
spouse and any such relative who collectively owns at least 10% of any class of
equity securities or of the equity interest. The undersigned further recognizes
that, in the event that the undersigned is a director or officer of Premier or
becomes a director or officer of Premier upon consummation of the Merger, among
other things, any sale of Premier Common Stock by the undersigned within a
period of less than six months following the effective time of the Merger may
subject the undersigned to liability pursuant to Section 16(b) of the Securities
Exchange Act of 1934, as amended.
9. Miscellaneous. This Affiliate Agreement is the complete agreement
-------------
between Premier and the undersigned concerning the subject matter hereof. Any
notice required to be sent to any party hereunder shall be sent by registered or
certified mail, return receipt requested, using the addresses set forth herein
or such other address as shall be furnished in writing by the parties. This
Affiliate Agreement shall be governed by the laws of the State of Georgia.
4
This Affiliate Agreement is executed as of the_____ day of April, 1999.
Very truly yours,
___________________________________
Signature
___________________________________
Print Name
AGREED TO AND ACCEPTED as of
April __, 1999.
PREMIER BANCSHARES, INC.
By:__________________________________
Xxxxxxx X. Xxxxxxx, Chairman and
Chief Executive Officer
AGREED TO AND ACCEPTED as of
April __, 1999.
FARMERS & MERCHANTS BANK
By:________________________________
Xxxx X. Xxxxxxx, President and
Chief Executive Officer
5
EXHIBIT 2
---------
MATTERS AS TO WHICH
COUNSEL TO FARMERS WILL OPINE*
1. Farmers is a commercial bank existing and in good standing under the
laws of the State of Georgia with corporate power and authority to conduct its
business as now conducted and to own and use its Assets.
2. Farmers' authorized capital stock consists of 2,000,000 shares of
Farmers Common Stock, of which 720,000 shares were outstanding as of the date
hereof. The outstanding shares of Farmers Common Stock have been duly
authorized, validly issued, and are fully paid and nonassessable. None of the
outstanding shares of Farmers Common Stock has been issued in violation of any
statutory preemptive rights. Except as disclosed in Farmers' Disclosure
----------
Memorandum to our knowledge, there are no options, subscriptions, warrants,
----------
calls, rights or commitments obligating Farmers to issue equity securities or
acquire its equity securities.
3. The execution and delivery by Farmers of the Agreement do not, and if
Farmers were now to perform its obligations under the Agreement such performance
would not, result in any violation of the Articles of Incorporation or Bylaws of
Farmers, or, to our knowledge, result in any breach of, or default or
acceleration under, any material Contract or Order to which Farmers is a party
or by which Farmers is bound.
4. Farmers has duly authorized the execution and delivery of the
Agreement and all performance by Farmers thereunder, and has duly executed and
delivered the Agreement.
5. The Agreement is enforceable against Farmers in accordance with its
respective terms.
______________________
*Pursuant to the January 1, 1992 edition of the Interpretive Standards
Applicable to Legal Opinions to Third Parties in Corporate Transactions adopted
by the Legal Opinion Committee of the Corporate and Banking Law Section of the
State Bar of Georgia.
EXHIBIT 3
---------
CLAIMS/INDEMNIFICATION LETTER
April __, 1999
Premier Bancshares, Inc.
0000 Xxxxxxx Xxxxx
000 Xxxx Xxxxx Xxxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Ladies and Gentlemen:
This letter is delivered pursuant to Section 9.2(e) of the Agreement and
Plan of Reorganization (the "Agreement"), dated as of April 20, 1999, by and
between Farmers & Merchants Bank ("Farmers"), Premier Bancshares, Inc.
("Premier") and PMB Acquisition Corp. ("PMB") which provides for the merger (the
"Merger") of PMB with and into Farmers.
Concerning claims which I may have against Farmers in my capacity as an
officer or director:
(a) Premier shall assume all liability (to the extent Farmers
was so liable) for claims for indemnification arising under Farmers'
Articles of Incorporation or Bylaws or under any indemnification contract
disclosed to Premier, as existing on April 20, 1999, and for claims for
salaries, wages or other compensation, employee benefits, reimbursement of
expenses, or worker's compensation arising out of employment through the
effective time of the Merger;
(b) In my capacity as an officer or a director, I am not aware
that I have any claims (other than those referred to in paragraph (a)
above) against Farmers (other than routine deposit, loan and other banking
services conducted in the ordinary course of business with Farmers); and
(c) I hereby release Farmers from any and all claims which I am
aware that I have against it in my capacity as an officer or a director,
other than those referred to in paragraph (a) above.
By executing this letter on behalf of Premier, you shall acknowledge the
assumption by Premier of the liabilities described in paragraph (a) above.
Sincerely,
__________________________________
Signature of Officer or Director
__________________________________
Printed Name of Officer or Director
On behalf of Premier, I hereby acknowledge receipt of this letter and
affirm the assumption by Premier of the liabilities described in paragraph (a)
above, as of this ___ day of April, 1999.
PREMIER BANCSHARES, INC.
By: _______________________________________
Xxxxxxx X. Xxxxxxx, Chairman and Chief
Executive Officer
2
EXHIBIT 4
---------
MATTERS AS TO WHICH
COUNSEL TO PREMIER WILL OPINE*
1. Premier is a corporation in existence under the laws of the State of
Georgia with corporate power to carry on its business as now conducted.
2. Premier's authorized capital stock consists of 60,000,000 common
shares, of which 26,106,350 shares are issued and outstanding as of the date
hereof and 2,000,000 preferred shares of which 40,770 shares are issued and
outstanding as of the date hereof. The outstanding shares of Premier Common
Stock are duly authorized by all necessary corporate action on the part of
Premier and are validly issued, fully paid and nonassessable. None of the
outstanding shares of Premier Common Stock has been issued in violation of any
statutory preemptive rights.
3. The shares of Premier Common Stock to be issued in exchange for North
Xxxxxx Common Stock upon consummation of the Merger have been duly authorized by
all necessary corporate action and, when issued as provided for in the
Agreement, will be validly issued, fully paid and nonassessable. None of the
shares of Premier Common Stock to be exchanged for North Xxxxxx Common Stock
upon consummation of the Merger will be issued in violation of any statutory
preemptive rights.
4. The execution and delivery by Premier of the Agreement and the
consummation by Premier of the transactions provided in the Agreement: (a) do
not violate any provision of the Articles of Incorporation or Bylaws of any
Premier Company, and (b) do not violate or constitute a breach of, or a default
under, any material Contract or Order to which a Premier Company is a party.
5. The Agreement has been duly executed and delivered by Premier and is
enforceable against Premier.
* subject to customary assumptions and limitations
