Exhibit 2
AGREEMENT AND PLAN OF MERGER
by and between
NATIONAL CITY CORPORATION
and
ALLEGIANT BANCORP, INC.
dated as of November 19, 2003
TABLE OF CONTENTS
PAGE
I. THE MERGER
1.1 Merger 1
1.2 Effective Time 1
1.3 Effect of Merger 2
1.4 Certificate of Incorporation and By-laws 2
1.5 Directors and Officers 2
1.6 Additional Actions 2
II. CONVERSION OF SHARES
2.1 Conversion of Shares 3
(a) Conversion Options 3
(b) Election of Common Stock Payment and Cash Payments 3
(c) Procedure of Election 4
(d) Allocation 5
2.2 Assumption of Stock Options 8
2.3 Exchange of Certificates 9
(a) Exchange Agent 9
(b) Notice of Exchange 9
(c) Transfer 9
(d) Right to Merger Consideration 10
(e) Distribution with Respect to Unexchanged Certificates 10
(f) Lost or Destroyed Exchanged Certificates 10
(g) Voting With Respect to Unexchanged Certificates 11
(h) No Fractional Shares 11
2.4 Closing of Allegiant's Transfer Books 11
2.5 Changes in National City Common Stock 11
2.6 Tax Consequences 11
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PAGE
III. REPRESENTATIONS AND WARRANTIES OF NATIONAL CITY
3.1 Corporate Organization 12
3.2 Authority 12
3.3 Capitalization 12
3.4 Subsidiaries 13
3.5 Information in Disclosure Documents,
Registration Statement, Etc. 13
3.6 Consents and Approvals; No Violation 14
3.7 Reports and Financial Statements 14
3.8 Taxes 15
3.9 Employee Plans 15
3.10 Material Contracts 16
3.11 Absence of Certain Changes or Events 17
3.12 Litigation 17
3.13 Compliance with Laws and Orders 17
3.14 Agreements with Bank Regulators, Etc. 18
3.15 National City Ownership of Stock 18
3.16 Tax Treatment 18
3.17 Fees 18
3.18 National City Action 18
3.19 Material Interests of Certain Persons 19
3.20 Environmental Matters 19
3.21 National City Disclosure Letter 20
3.22 Notice of Breach of Potential Breach 20
3.23 Disclosure 21
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PAGE
IV. REPRESENTATIONS AND WARRANTIES OF ALLEGIANT
4.1 Corporate Organization 21
4.2 Authority 21
4.3 Capitalization 21
4.4 Subsidiaries 22
4.5 Information in Disclosure Documents,
Registration Statement, Etc. 22
4.6 Consent and Approvals; No Violation 23
4.7 Reports and Financial Statements 23
4.8 Taxes 24
4.9 Employee Plans 24
4.10 Material Contracts 25
4.11 Absence of Certain Changes or Events 26
4.12 Litigation 26
4.13 Compliance with Laws and Orders 26
4.14 Agreements with Bank Regulators, Etc. 26
4.15 Tax Treatment 27
4.16 Fees 27
4.17 Allegiant Action 27
4.18 Vote Required 27
4.19 Environmental Matters 28
4.20 Labor 28
4.21 Material Interests of Certain Persons 28
4.22 Allegiant Disclosure Letter 28
4.23 Notice of Breach or Potential Breach 28
4.24 Disclosure 29
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PAGE
V. COVENANTS
5.1 Acquisition Proposals 29
5.2 Interim Operations of Allegiant 29
(a) Conduct of Business 30
(b) Articles and By-laws 30
(c) Capital Stock 30
(d) Dividends 30
(e) Employee Plans, Compensation, Etc. 31
(f) Certain Policies 31
5.3 Interim Operations of National City 31
5.4 Employee Matters 31
(a) Benefit Agreements 31
(b) Retirement and Benefit Plans 31
(c) Transition 32
5.5 Access and Information 32
5.6 Certain Filings, Consents and Arrangements 33
5.7 State Takeover Statutes 33
5.8 Indemnification 33
5.9 Additional Agreements 33
5.10 Publicity 34
5.11 Registration Statement 34
5.12 Proxy 34
5.13 Stock Exchange Listings 34
5.14 Shareholders' Meeting 34
5.15 Tax-Free Reorganization Treatment 34
5.16 Provisions of Shares 35
5.17 Adverse Action 35
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PAGE
VI. CLOSING MATTERS
6.1 The Closing 35
6.2 Documents and Certificates 35
VII. CONDITIONS
7.1 Conditions to Each Party's Obligations to Effect the Merger 36
7.2 Conditions to Obligation of Allegiant to Effect the Merger 37
7.3 Conditions to Obligation of National City to Effect the Merger 37
VIII. MISCELLANEOUS
8.1 Termination 38
8.2 Non-Survival of Representations, Warranties and Agreements 39
8.3 Waiver and Amendment 39
8.4 Entire Agreement 39
8.5 Applicable Law; Consent to Jurisdiction 39
8.6 Certain Definitions; Headlines 40
8.7 Notices 41
8.8 Counterparts 42
8.9 Parties in Interest; Assignment 42
8.10 Effect of Termination; Expenses and Breakup Fee 42
8.11 Enforcement of the Agreement 44
8.12 Severability 44
8.13 Update and Supplement to Disclosure Letters 44
Signatures 45
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INDEX TO DEFINITIONS
Definitions Sections
Acquisition Transaction Section 5.1
Affiliate Section 8.6(a)(i)
Agreement Preamble
Allegiant Preamble
Allegiant Common Stock Section 1.1
Allegiant Contracts Section 4.10
Allegiant Disclosure Letter Section 4.3
Allegiant Employee Plans Section 4.9
Allegiant Meeting Section 5.14
Allegiant Option Plans Section 2.2
Allegiant Reports Section 4.7
Allegiant Subsidiaries Section 4.4
Allocation Date Section 2.1(d)
Benefit Agreements Section 3.10
BHCA Section 3.1
Breakup Fee Section 8.10(b)
Cash Election Shares Section 2.1(b)(i)
Cash Payments Section 2.1(a)(i)
Certificate Section 2.3(a)
Closing Section 6.1
Closing Date Section 6.1
Combined Election Shares Section 2.1(b)(iii)
Combined Payment Section 2.1(a)(iii)
Commission Section 2.2
Common Stock Election Shares Section 2.1(b)(ii)
Common Stock Payment Section 2.1(a)(ii)
Competing Proposal Section 8.1(f)
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Code Preamble
Consents Section 7.1(c)
Constituent Corporations Section 1.2
Control Section 8.6(a)(ii)
Conversion Ratio Section 2.1(a)(ii)
Delaware Certificate of Merger Section 1.2
Dissenting Shares Section 2.1(d)(i)
DGCL Section 1.1
DPC Shares Section 2.1(a)
Effective Time Section 1.2
Election Deadline Section 2.1(c)
Election Form Section 2.1(b)
Environmental Law Section 3.20
ERISA Section 3.9
Exchange Act Section 3.5
Exchange Agent Section 2.1(c)
FDIA Section 3.14
Fed Approval Date Section 8.6(a)(iii)
FRB Section 3.6
Governmental Entity Section 3.6
Hazardous Substance Section 3.20
HSR Act Section 3.6
Indemnitees Section 5.8
IRS Section 3.9
Loan Portfolio Properties, Trust Properties and
Other Properties Owned Section 3.20
Losses Section 8.10(b)(ii)
Major Deal Section 8.10(b)(i)
Market Price Section 8.6(a)(iv)
Material Adverse Effect Section 8.6(a)(v)
MDF Section 3.6
MGBL Section 1.1
Merger Section 1.1
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Merger Consideration Section 2.1(a)(iii)
Missouri Articles of Merger Section 1.2
National City Preamble
National City Common Stock Section 2.1(a)(ii)
National City Contracts Section 3.10
National City Disclosure Letter Section 1.4
National City Employee Plans Section 3.9
National City Out Of Pocket Expenses Section 8.10(b)(i)
National City Reports Section 3.7
No-Election Shares Section 2.1(b)
PBGC Section 3.9
PCBs Section 3.20
Person Section 8.6(a)(vi)
Post-Termination Period Section 8.10(b)(i)
Proxy Statement Section 3.5
Registration Statement Section 3.5
SBIA Section 3.6
Securities Act Section 3.5
Significant Subsidiaries Section 8.6(a)(i)
State Entities Section 3.6
Stock Conversion Shares Section 2.1(d)(i)
Subsidiary Section 8.6(a)(vii)
Surviving Corporation Section 1.3
Trust Account Shares Section 2.1(a)
Unexercised Options Section 2.2
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of November 19, 2003
("Agreement"), is made by and between National City Corporation, a Delaware
corporation ("National City"), and Allegiant Bancorp, Inc., a Missouri
corporation ("Allegiant").
WHEREAS, National City and Allegiant have each determined that it is in
the best interests of their respective stockholders and shareholders for
Allegiant to merge with and into National City upon the terms and subject to the
conditions set forth in this Agreement;
WHEREAS, the respective Boards of Directors of National City and Allegiant
have each approved this Agreement and the consummation of the transactions
contemplated hereby and approved the execution and delivery of this Agreement;
WHEREAS, for Federal income tax purposes, it is intended that the merger
shall qualify as a reorganization under the provisions of Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code"); and
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties and agreements contained herein, the parties hereto
hereby agree as follows:
I. THE MERGER
1.1 Merger. Subject to the terms and conditions of this Agreement, at the
Effective Time (as defined in Section 1.2 below), Allegiant will be merged with
and into National City and the separate corporate existence of Allegiant will
thereupon cease (the "Merger") in accordance with the applicable provisions of
The Missouri General and Business Corporation Law ("MGBL") and the Delaware
General Corporation Law ("DGCL").
National City may at any time change the method of effecting the
combination with Allegiant (including, without limitation, the provisions of
this Article I) if and to the extent it reasonably deems such change to be
desirable, including, without limitation, to provide for a merger of Allegiant
into a wholly-owned subsidiary of National City; provided, however, that no such
change shall (A) alter or change the amount or kind of consideration to be
issued to holders of shares of common stock, par value $0.01 per share
("Allegiant Common Stock"), of Allegiant as provided for in this Agreement, (B)
adversely affect the tax treatment of Allegiant's shareholders as a result of
receiving the Merger Consideration (as hereinafter defined) or (C) materially
impede or delay consummation of the transactions contemplated by this Agreement.
1.2 Effective Time. As soon as practicable after satisfaction or waiver of
all conditions to the Merger and immediately prior to the Closing (as defined
below) which shall occur at the time set forth in Section 6.1 below, National
City and Allegiant (sometimes together referred to herein as the "Constituent
Corporations") shall cause a certificate of merger complying with the
requirements of the DGCL (the " Delaware Certificate of Merger") to be filed
with the
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Secretary of State of the State of Delaware and Articles of Merger complying
with the requirements of the MGBL to be filed with the Secretary of State of the
State of Missouri (the "Missouri Articles of Merger"). The Merger will become
effective at the time the later of the following to occur: (a) the filing of the
Delaware Certificate of Merger; (b) the filing of the Missouri Articles of
Merger; or (c) such later time as shall be specified in such filings ("Effective
Time").
1.3 Effect of Merger. The Merger will have the effects specified in MGBL
and DGCL. Without limiting the generality of the foregoing, National City will
be the surviving corporation in the Merger (sometimes hereinafter referred to as
the "Surviving Corporation") and will continue to be governed by the laws of the
State of Delaware, and the separate corporate existence of National City and all
of its rights, privileges, powers and franchises, public as well as private, and
all its debts, liabilities and duties as a corporation organized under the DGCL,
will continue unaffected by the Merger.
1.4 Certificate of Incorporation and By-laws. The Certificate of
Incorporation and By-laws of National City in effect immediately prior to the
Effective Time, which shall be in the form set forth in a disclosure letter
executed by National City and dated and delivered by National City to Allegiant
as of the date hereof (the "National City Disclosure Letter"), shall be the
Certificate of Incorporation and By-laws of the Surviving Corporation, until
amended in accordance with applicable law.
1.5 Directors and Officers. The directors and officers of National City
immediately prior to the Effective Time will be the directors and officers,
respectively, of the Surviving Corporation, from and after the Effective Time,
until their successors have been duly elected or appointed and qualified or
until their earlier death, resignation or removal in accordance with the terms
of the Surviving Corporation's Certificate of Incorporation and By-laws and the
DGCL.
1.6 Additional Actions. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any further deeds,
assignments or assurances in law or any other acts are necessary or desirable to
(i) vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of Allegiant, or (ii) otherwise carry out the purposes of
this Agreement, Allegiant and its officers and directors shall be deemed to have
granted to the Surviving Corporation an irrevocable power of attorney to execute
and deliver all such deeds, assignments or assurances in law or any other acts
as are necessary or desirable to (a) vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation its right, title or interest in, to or
under any of the rights, properties or assets of Allegiant or (b) otherwise
carry out the purposes of this Agreement, Allegiant and its officers and
directors shall be deemed to have granted to the Surviving Corporation an
irrevocable power of attorney to execute and deliver all such deeds, assignments
or assurances in law and to all acts necessary or proper to vest, perfect or
confirm title to and possession of such rights, properties or assets in the
Surviving Corporation and otherwise to carry out the purposes of this Agreement,
and the officers and directors of the Surviving Corporation are authorized in
the name of Allegiant or otherwise to take any and all such action.
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II. CONVERSION OF SHARES
2.1 Conversion of Shares.
2.1 (a) Conversion Options. Subject to Section 2.2 below, at the Effective
Time, each then outstanding share of Allegiant Common Stock not owned by
National City or any direct or indirect wholly-owned subsidiary of National City
(except for any such shares of Allegiant Common Stock held in trust accounts,
managed accounts or in any similar manner as trustee or in a fiduciary capacity
("Trust Account Shares") or acquired in satisfaction of debts previously
contracted ("DPC Shares")), excluding those shares of Allegiant Common Stock
held in the treasury of Allegiant, and excluding shares with respect to which a
written demand for payment of fair value has been made pursuant to Section
2.1(c)(v) below and not withdrawn or waived will be canceled, retired and
converted into one of the following as hereinafter provided (subject to the
provisions of Section 2.1(d) below):
(i) a right to receive cash in the amount of Twenty-Seven and 25/100
Dollars ($27.25) ("Cash Payment");
(ii) a right to receive 0.833 shares of common stock (the
"Conversion Ratio"), par value $4.00 per share ("National City Common
Stock"), of National City ("Common Stock Payment"); or
(iii) a right to receive a combination of a portion of Cash Payment
and a portion of Common Stock Payment ("Combined Payment", which along
with the Cash Payment and Common Stock Payment is referred to as "Merger
Consideration").
(b) Election of Common Stock Payment and Cash Payments. Not more than
fifteen (15) days after the Allegiant Meeting (as hereinafter defined) where the
Merger has been approved, National City will cause to be sent to each record
holder of shares of Allegiant Common Stock (as of a record date as close as
practicable to the date of mailing) an election form (an "Election Form") and
other appropriate materials providing for such holders (subject to the
provisions of Section 2.1(d) below):
(i) to elect to receive the Cash Payment with respect to all of
their shares of Allegiant Common Stock as hereinabove provided (the "Cash
Election Shares"),
(ii) to elect to receive the Common Stock Payment with respect to
all of their shares of Allegiant Common Stock (the "Common Stock Election
Shares"), or
(iii) to elect to receive the Combined Payment with respect to their
shares of Allegiant Common Stock (the "Combined Election Shares"). If the
holder chooses a Combined Payment, then the holder shall specify on the
Election Form the percentage of the Combined Payment requested to be
received as a Common Stock Payment and the holder shall be deemed to have
elected that the balance of his Combined Election Shares shall be
converted into the right to receive Cash Payment.
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As of the Election Deadline (as hereinafter defined) any shares of Allegiant
Common Stock with respect to which there shall not have been an election
submission to the Exchange Agent (as hereinafter defined) of an effective,
properly completed Election Form, shall be deemed to be "No-Election Shares."
Except as specifically provided herein, all No-Election Shares shall be deemed
to be Cash Election Shares and references to Cash Election Shares shall be
deemed to include No-Election Shares. The Exchange Agent will use reasonable
efforts to make Election Forms available to all persons who become record
holders of Allegiant Common Stock after the record date set for the mailing of
Election Forms and before the Election Deadline.
(c) Procedure for Election. Any election to receive Common Stock Payment,
Cash Payment or Combined Payment shall have been validly made only if National
City Bank, as Exchange Agent, or such other national or state bank with which
National City may enter into an agreement whereby such bank shall agree to act
as agent for purposes of mailing and receiving Election Forms, tabulating the
results, determining any allocation and distributing consideration to
Allegiant's shareholders (the "Exchange Agent"), shall have received by 4:00
P.M. Cleveland Time on a day (which must be a business day) selected by National
City, but not less than twenty (20) days after the initial mailing of the
Election Forms (the "Election Deadline"), an Election Form properly completed.
An election by a holder of Allegiant Common Stock shall be validly made only if
the Exchange Agent shall have received an Election Form properly completed and
executed (with the signature or signatures thereon guaranteed as required by the
Election Form) by such shareholder accompanied either by the certificate or
certificates representing all Allegiant Common Stock owned by such shareholder,
duly endorsed in blank or otherwise in form acceptable for transfer on the books
of Allegiant, or by an appropriate guaranty of delivery in the form customarily
used in transactions of this nature from a member of a national securities
exchange or a member of the National Association of Securities Dealers, Inc. or
a commercial bank or trust company in the United States. National City shall
have the right to make reasonable determinations and to establish reasonable
procedures (not inconsistent with the terms of this Agreement) in guiding the
Exchange Agent in its determination as to validity of Election Forms.
(i) Two or more holders of Allegiant Common Stock who are determined
to constructively own the shares of Allegiant Common Stock owned by each
other by virtue of Section 318(a) of the Code and who so certify to
National City's satisfaction, and any single holder of shares of Allegiant
Common Stock who holds his shares in two or more different names and who
so certifies to National City's satisfaction, may submit a joint Election
Form covering the aggregate shares of Allegiant Common Stock owned by all
such holders or by such single holder as the case may be. For all purposes
of this Agreement (including any lottery), each such group of holders
which, and each such single holder who, submits a joint Election Form
shall be treated as a single holder of Allegiant Common Stock.
(ii) Record holders of Allegiant Common Stock who are nominees only
may submit a separate Election Form for each beneficial owner for whom
such record holder is a nominee; provided, however, that on the request of
National City, such record holder shall certify to the satisfaction of
National City that such record holder holds such
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Allegiant Common Stock as nominee for the beneficial owner thereof. For
purposes of this Agreement, each beneficial owner for which an Election
Form is submitted will be treated as a separate holder of Allegiant Common
Stock, subject, however, to the immediately preceding sub-paragraph (i)
dealing with joint Election Forms.
(iii) Any holder of Allegiant Common Stock who has made an election
by submitting an Election Form to the Exchange Agent may at any time prior
to the Election Deadline change such holder's election by submitting a
revised Election Form, properly completed and signed, that is received by
the Exchange Agent prior to the Election Deadline. Any holder of Allegiant
Common Stock may at any time prior to the Election Deadline revoke his
election and withdraw his certificates for Allegiant Common Stock
deposited with the Exchange Agent by written notice to the Exchange Agent
received by the close of business on the day prior to the Election
Deadline.
(iv) In the event of the termination of this Agreement after holders
of Allegiant Common Stock have deposited their shares with the Exchange
Agent, National City and Allegiant shall promptly instruct the Exchange
Agent to return all Allegiant Common Stock to the persons who deposited
the same. Holders of Allegiant Common Stock shall continue to have the
right to vote and to receive all dividends paid on Allegiant Common Stock
deposited by them with the Exchange Agent until the Effective Time.
(v) No holder of Allegiant Common Stock who at the Election Deadline
is entitled to relief as a dissenting shareholder in compliance with
Section 351.455 of the MGBL, shall be entitled to submit an Election Form
and any Election Form submitted by such a dissenting shareholder shall be
invalid. In the event, that subsequent to the Election Deadline, such
shareholder ceases to be a dissenting shareholder, the shareholder shall
be treated the same as a non-dissenting shareholder who failed to submit a
valid Election Form and shall be deemed to hold No-Election Shares.
(d) Allocation. As soon as practicable after the Election Deadline, but
not more than ten (10) business days after the Effective Time (the "Allocation
Date"), the Exchange Agent shall effectuate the allocation among holders of
Allegiant Common Stock of rights to receive Common Stock Payment, Cash Payment
or Combined Payment in the Merger as follows:
(i) If the aggregate number of shares of National City Common Stock
that the holders of the Stock Election Shares and the portion of the
Common Stock Payment specified on the Election Forms by holders of
Combined Election Shares are entitled to receive in the Merger is equal to
or greater than the Stock Conversion Shares, then no reallocation is to be
made. The "Stock Conversion Shares" means the number of shares of National
City Common Stock which, when multiplied by the Market Price, is equal to
51% of the value of the Merger Consideration (including payments for
fractional shares) and an assumed payment of $27.25 per share for the
number of shares (the "Dissenting Shares") held by any shareholder who is
a dissenting shareholder pursuant to Section 2.1(c)(v).
(ii) If the aggregate number of shares of National City Common Stock
that
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the holders of the Stock Election Shares and the portion of the Common
Stock Payment specified on the Election Forms by holders of Combined
Election Shares are entitled to receive in the Merger is less than the
Stock Conversion Shares, then the following reallocation steps shall be
used (in the order presented) until the number of shares of National City
Common Stock to be issued in the Merger equals the Stock Conversion
Shares:
(A) First, all of the Common Stock Election Shares and
the portion of the Common Stock Payment specified on the
Election Forms by holders of Combined Election Shares shall be
converted into the right to receive the number of shares of
National City Common Stock elected pursuant to the applicable
Election Forms;
(B) Second, the Exchange Agent shall reallocate the
portion of the Cash Payment deemed specified by holders of
No-Election Shares such that the Allegiant Common Stock held
by the holders of No-Election Shares will be converted into
the right to receive in the aggregate the lesser of (a) the
total number of shares of National City Common Stock into
which all No-Election Shares are convertible, and (b) the
number of shares of National City Common Stock which, when
added to the number of shares of National City Common Stock
issuable in the Merger in respect of the Common Stock Election
Shares and the portion of the Common Stock Payment specified
on the Election Forms by holders of Combined Election Shares,
will equal the number of Stock Conversion Shares, such shares
to be allocated to each holder of No-Election Shares based
upon the amount of Cash Payment deemed requested by such
holder compared to the total amount of Cash Payments deemed
requested by all holders of No-Election Shares. The Allegiant
Common Stock held by such holders of No-Election Shares shall
receive cash for the balance of the Merger Consideration, if
any, to which each such holder is entitled (determined by (x)
dividing the total Common Stock Payment to be received by such
holder after giving effect to the reallocation described in
this Section 2.1(d)(ii)(B) by 0.833, (y) subtracting the
result in (x) from the number of shares of Allegiant Common
Stock owned by such holder at the Effective Time, and (z)
multiplying the difference determined in (y) by $27.25 per
share); and
(C) Third, the Exchange Agent shall reallocate the Cash
Payment portion specified in the Election Forms by holders of
Combined Election Shares such that the Allegiant Common Stock
held by the holders of Combined Election Shares will be
converted into the right to receive in the aggregate the
lesser of (a) the total number of shares of National City
Common Stock into which all Combined Election Shares are
convertible, and (b) the number of shares of National City
Common Stock which, when added to the number of shares of
National City Common Stock
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issuable in the Merger in respect of the Common Stock Election
Shares, the portion of the Common Stock Payment specified on
the Election Forms by holders of Combined Election Shares and
the No-Election Shares converted pursuant to Section
2.1(d)(ii)(B) above, will equal the number of Stock Conversion
Shares, such shares to be allocated to each holder of Combined
Election Shares based upon the total amount of Cash Payment
requested by such holder compared to the total amount of Cash
Payments requested by all holders of Combined Election Shares.
The Allegiant Common Stock held by such holders shall receive
cash for the balance of the Merger Consideration, if any, to
which each such holder is entitled to receive pursuant to the
Merger (determined by (x) dividing the total Common Stock
Payment to be received by such holder after giving effect to
the reallocation described in this Section 2.1(d)(ii)(C) by
0.833, (y) subtracting the result in (x) from the number of
shares of Allegiant Common Stock owned by such holder at the
Effective Time, and (z) multiplying the difference determined
in (y) by $27.25 per share); and
(D) Fourth, the Exchange Agent shall reallocate the
portion of the Cash Payment payable to each holder of Cash
Election Shares (other than No-Election Shares and Dissenting
Shares) based upon the number of Cash Election Shares (other
than No-Election Shares and Dissenting Shares) owned by such
holder compared to the total number of Cash Election Shares
(other than No-Election Shares and Dissenting Shares) owned by
all such holders, such that the Allegiant Common Stock held by
the holders of Cash Election Shares will be converted into the
right to receive in the aggregate the number of shares of
National City Common Stock which will equal the number of
shares of National City Common Stock which, when added to the
number of shares of National City Common Stock issuable in the
Merger in respect of the Common Stock Election Shares, the
portion of the Common Stock Payment specified on the Election
Forms by holders of Combined Election Shares, the No-Election
Shares converted pursuant to Section 2.1(d)(ii)(B) above, and
the Combined Election Shares converted pursuant to Section
2.1(d)(ii)(C) above, will equal the number of Stock Conversion
Shares, and such holders of Cash Election Shares shall receive
in cash the balance of the Merger Consideration, if any, to
which each such holder is entitled pursuant to the Merger
(determined by (x) dividing the total Common Stock Payment to
be received by such holder after giving effect to the
reallocation described in this Section 2.1(d)(ii)(D) by 0.833,
(y) subtracting the result in (x) from the number of shares of
Allegiant Common Stock owned by such holder at the Effective
Time, and (z) multiplying the difference determined in (y) by
$27.25 per share).
National City shall have the right to make reasonable determinations
and to establish reasonable procedures in connection with the allocation
contemplated by this
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Section 2.1(d)(ii).
(iii) As soon as practicable, after completion of the allocation
procedure described above, the Exchange Agent shall distribute the Common
Stock Payments and the Cash Payments as provided herein. Each share of
Allegiant Common Stock for which such distribution is made shall be
canceled. National City will deliver to the Exchange Agent the number of
shares of National City Common Stock and the amount of Cash Payments
payable in the Merger in sufficient time for the Exchange Agent to make
such distribution. The Exchange Agent shall not be entitled to vote or
exercise any rights of ownership with respect to the shares of National
City Common Stock held by it from time to time hereunder, except that it
shall receive and hold all dividends or other distributions paid or
distributed with respect to such shares for the account of the persons
entitled thereto.
(e) Each holder of Allegiant Common Stock who would otherwise have been
entitled to receive a fraction of a share of National City Common Stock shall
receive, in lieu thereof, cash in an amount equal to such fractional part of a
share of National City Common Stock multiplied by a ratio, the numerator of
which is $27.25, and the denominator of which is the Conversion Ratio.
(f) At the Effective Time each share of Allegiant Common Stock held in
Allegiant's treasury immediately prior to the Effective Time shall, by virtue of
the Merger, automatically and without any action on the part of the holder
thereof be cancelled.
(g) At the Effective Time, each then-outstanding share of Allegiant Common
Stock owned by National City or any direct or indirect wholly-owned subsidiary
of National City (except for any shares that are Trust Account Shares or DPC
Shares) will be canceled and retired.
(h) Each share of National City Common Stock issued and outstanding
immediately prior to the Effective Time shall continue to be an issued and
outstanding share of common stock, par value $4.00 per share, of the Surviving
Corporation from and after the Effective Time.
2.2 Assumption of Stock Options. Except as expressly provided in this
Section 2.2 and subject to any required consents by individual option holders,
all rights under any stock option granted by Allegiant or its predecessors
pursuant to Allegiant's existing stock option plans (collectively, the
"Allegiant Option Plans") that remain outstanding and unexercised, whether
vested or unvested, immediately prior to the Effective Time ("Unexercised
Options") shall cease to represent a right to acquire shares of Allegiant Common
Stock and shall be converted into the right to acquire that number of shares of
National City Common Stock equal to (a) the number of shares of Allegiant Common
Stock subject to the Unexercised Option, multiplied by (b) the Conversion Ratio
(rounded to the nearest whole share). The exercise price per share of National
City Common Stock under the new option shall be equal to the exercise price per
share of Allegiant Common Stock which was purchasable under each Unexercised
Option divided by the Conversion Ratio (rounded to the nearest whole cent)
necessary to assure that the rights and benefits of the optionee under such
option shall not be increased or decreased by reason of this Section 2.2, and,
in addition, each option which is an "incentive stock option" as defined in
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Section 422 of the Code shall be adjusted as required by Section 424 of the Code
and the regulations promulgated thereunder so as not to constitute a
modification, extension or renewal of the option within the meaning of Section
424(h) of the Code. On or before the Effective Time, National City shall file,
and maintain the effectiveness of, a registration statement with the Securities
and Exchange Commission (the "Commission") covering such options and the sale of
the National City Common Stock issued upon exercise of such options. At the
Effective Time all Allegiant Option Plans shall be terminated with respect to
the granting of any additional options or option rights. The duration and other
terms and conditions of the new options shall be the same as the original
Allegiant options, except that reference to Allegiant shall be deemed to be
references to National City.
2.3 Exchange of Certificates.
(a) Exchange Agent. Prior to the Effective Time, National City shall
designate National City Bank to act as Exchange Agent in connection with the
Merger pursuant to an exchange agent agreement providing for, among other
things, the matters set forth in this Section 2.3. Except as set forth herein,
from and after the Effective Time, each holder of a certificate that immediately
prior to the Effective Time represented outstanding shares of Allegiant Common
Stock ("Certificate") shall be entitled to receive in exchange therefor, upon
surrender thereof to the Exchange Agent, the Merger Consideration for each share
of Allegiant Common Stock so represented by the Certificate surrendered by such
holder thereof. The certificates representing shares of National City Common
Stock which constitute the Merger Consideration shall be properly issued and
countersigned and executed and authenticated, as appropriate.
(b) Notice of Exchange. Promptly after the Effective Time, National City
and the Surviving Corporation shall cause the Exchange Agent to mail and/or make
available to each record holder of a Certificate for which no Election Form was
received a notice and letter of transmittal (which shall specify that delivery
shall be effected, and risk of loss and title to the Certificate shall pass,
only upon proper delivery of the Certificate to the Exchange Agent) advising
such holder of the effectiveness of the Merger and the procedures to be used in
effecting the surrender of the Certificate for exchange therefore. Upon
surrender to the Exchange Agent of a Certificate, together with such letter of
transmittal duly executed and completed in accordance with the instructions
thereon, and such other documents as may reasonably be requested, the Exchange
Agent shall promptly deliver to the person entitled thereto the appropriate
Merger Consideration for each share of Allegiant Common Stock so represented by
the Certificate surrendered by such holder thereof, and such Certificate shall
forthwith be canceled.
(c) Transfer. If delivery of all or part of the Merger Consideration is to
be made to a person other than the person in whose name a surrendered
Certificate is registered, it shall be a condition to such delivery or exchange
that the Certificate surrendered shall be properly endorsed or shall be
otherwise in proper form for transfer and that the person requesting such
delivery or exchange shall have paid any transfer and other taxes required by
reason of such delivery or exchange in a name other than that of the registered
holder of the Certificate surrendered or shall have established to the
reasonable satisfaction of the Exchange Agent that such tax either has
9
been paid or is not payable.
(d) Right to Merger Consideration. Subject to Section 2.3(e) below, until
surrendered and exchanged in accordance with Section 2.1 or 2.3, each
Certificate shall, after the Effective Time, represent solely the right to
receive the Merger Consideration, payable to the holder of the shares of
Allegiant Common Stock evidenced by such Certificate, together with any
dividends or other distributions as provided in Sections 2.3(e) and 2.3(f)
below, and shall have no other rights. From and after the Effective Time,
National City and Surviving Corporation shall be entitled to treat such
Certificates that have not yet been surrendered for exchange as evidencing the
right to receive the aggregate Merger Consideration into which the shares of
Allegiant Common Stock represented by such Certificates may be converted,
notwithstanding any failure to surrender such Certificates. One hundred eighty
(180) days following the Effective Time, the Exchange Agent shall deliver to the
Surviving Corporation any shares of National City Common Stock and funds
(including any interest received with respect thereto) which National City has
made available to the Exchange Agent and which have not been disbursed to
holders of Certificates, and thereafter such holders shall be entitled to look
only to the Surviving Corporation (subject to abandoned property, escheat or
other similar laws) with respect to the shares of National City Common Stock and
cash in lieu of fractional shares deliverable or payable upon due surrender of
their Certificates. Neither the Exchange Agent nor any party hereto shall be
liable to any holder of shares of Allegiant Common Stock for any Merger
Consideration (or dividends, distributions or interest with respect thereto)
delivered in good faith to a public official pursuant to any applicable
abandoned property, escheat or similar law.
(e) Distributions with Respect to Unexchanged Certificates. Whenever a
dividend or other distribution is declared by National City on National City
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, provided that no dividends or other
distributions declared or made with respect to National City Common Stock shall
be paid to the holder of any unsurrendered Certificate with respect to the share
of National City Common Stock represented thereby until the holder of such
Certificate shall surrender such Certificate in accordance with this Article II.
The Surviving Corporation shall pay any dividends or make any other
distributions with a record date prior to the Effective Time which may have been
declared or made by Allegiant on Allegiant Common Stock in accordance with the
terms of this Agreement on or prior to the Effective Time and which remain
unpaid at the Effective Time.
(f) Lost or Destroyed Exchanged Certificates. In the event that any
Certificate shall have been lost, stolen or destroyed, the Exchange Agent shall
deliver in exchange for such lost, stolen or destroyed certificate, upon the
making of an affidavit of that fact by the holder thereof in form satisfactory
to the Exchange Agent, the Merger Consideration, as may be required pursuant to
this Agreement; provided, however, that the Exchange Agent may, in its sole
discretion and as a condition precedent to the delivery of the Merger
Consideration to which the holder of such certificate is entitled as a result of
the Merger, require the owner of such lost, stolen or destroyed certificate to
deliver a bond in such sum as it may direct as indemnity against any claim that
may be made against Allegiant, National City or the Exchange Agent or any other
party with respect to the certificate alleged to have been lost, stolen or
destroyed.
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(g) Voting With Respect to Unexchanged Certificates. Holders of
unsurrendered Certificates will not be entitled to vote at any meeting of
National City stockholders.
(h) No Fractional Shares. No certificates or scrip representing fractional
shares of National City Common Stock shall be issued upon the surrender for
exchange of a Certificate or Certificates. No dividends or distributions of
National City shall be payable on or with respect to any fractional share and
any such fractional share interest will not entitle the owner thereof to vote or
to any rights of stockholders of National City. In lieu of any such fractional
shares, holders of Certificates otherwise entitled to fractional shares shall be
entitled to receive promptly from the Exchange Agent a cash payment in an amount
equal to the fraction of such share of National City Common Stock to which such
holder would otherwise be entitled multiplied by a ratio, the numerator of which
is $27.25, and the denominator of which is the Conversion Ratio.
2.4 Closing of Allegiant's Transfer Books. The stock transfer books of
Allegiant shall be closed at the close of business on the business day
immediately preceding the date of the Effective Time. In the event of a transfer
of ownership of Allegiant Common Stock which is not registered in the transfer
records of Allegiant, the Merger Consideration to be distributed pursuant to
this Agreement may be delivered to a transferee, if a Certificate is presented
to the Exchange Agent, accompanied by all documents required to evidence and
effect such transfer and by payment of any applicable stock transfer taxes.
National City and the Exchange Agent shall be entitled to rely upon the stock
transfer books of Allegiant to establish the identity of those persons entitled
to receive the Merger Consideration specified in this Agreement for their shares
of Allegiant Common Stock, which books shall be conclusive with respect to the
ownership of such shares. In the event of a dispute with respect to the
ownership of any such shares, the Surviving Corporation and the Exchange Agent
shall be entitled to deposit any Merger Consideration not already paid
represented thereby in escrow with an independent party and thereafter be
relieved with respect to any claims to such Merger Consideration.
2.5 Changes in National City Common Stock. If between the date of this
Agreement and the Effective Time, the shares of National City Common Stock shall
be changed into a different number of shares by reason of any reclassification,
recapitalization, split-up, combination or exchange of shares, or if a stock
dividend thereon shall be declared with a record date within said period, the
Merger Consideration shall be adjusted proportionately such that the holders
entitled to receive a Common Stock Payment will receive the same form and amount
of National City Common Stock as if the National City Common Stock issuable
pursuant to the Merger had been outstanding at the record date for such
reclassification, recapitalization, split-up, combination, exchange of shares,
or dividend.
2.6 Tax Consequences. This Agreement shall constitute a "plan of
reorganization" for purposes of Section 368 of the Code. National City and
Allegiant agree to file any and all tax returns in a manner consistent with the
qualification as such.
III. REPRESENTATIONS AND WARRANTIES OF NATIONAL CITY
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National City hereby represents and warrants to Allegiant that:
3.1 Corporate Organization. National City is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and is duly qualified to do business as a foreign corporation in each
jurisdiction in which its ownership or lease of property or the nature of the
business conducted by it makes such qualification necessary, except for such
jurisdictions in which the failure to be so qualified would not have a Material
Adverse Effect (as defined below). National City is registered as a bank holding
company under the Bank Holding Company Act of 1956, as amended (the "BHCA").
National City has the requisite corporate power and authority to own, lease and
operate its properties and assets and to carry on its business as it is now
being conducted. National City has heretofore delivered to Allegiant true and
complete copies of its Certificate of Incorporation and By-laws as currently in
effect.
3.2 Authority. National City has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have been
duly approved by the Board of Directors of National City and no other corporate
or stockholder proceedings on the part of National City are necessary to
authorize this Agreement or to consummate the transactions so contemplated. This
Agreement has been duly executed and delivered by, and constitutes valid and
binding obligations of National City enforceable against National City in
accordance with its terms, except as enforceability thereof may be limited by
applicable bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium and other 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 proceedings may be brought.
3.3 Capitalization. As of the date hereof, the authorized capital stock of
National City consists of 1,400,000,000 shares of National City Common Stock and
5,000,000 shares of National City preferred stock. As of the close of business
on November 18, 2003 (i) 607,647,267 shares of National City Common Stock were
validly issued and outstanding, fully paid and nonassessable and (ii) no shares
of preferred stock were issued and outstanding. As of the date hereof, except as
set forth in this Section 3.3, pursuant to the exercise of employee stock
options under National City's various stock option plans in effect, National
City's dividend reinvestment plan and stock grants made pursuant to the National
City's various restricted stock plans or set forth in the National City
Disclosure Letter, there are no other shares of capital stock of National City
authorized, issued or outstanding and there are no outstanding subscriptions,
options, warrants, rights, convertible securities or any other agreements or
commitments of any character relating to the issued or unissued capital stock or
other securities of National City obligating National City to issue, deliver or
sell, or cause to be issued, delivered or sold, additional shares of capital
stock of National City or obligating National City to grant, extend or enter
into any subscription, option, warrant, right, convertible security or other
similar agreement or commitment. As of the date hereof, except as provided in
this Agreement, there are no voting trusts or other agreements or understandings
to which National City or any National City subsidiary is a party with respect
to the voting of the capital stock of National City. All of the shares of
National City Common Stock issuable in exchange for Allegiant Common
12
Stock at the Effective Time in accordance with this Agreement and all of the
shares of National City Common Stock issuable upon exercise of Unexercised
Options will be, when so issued, duly authorized, validly issued, fully paid and
nonassessable and will not be subject to preemptive rights.
3.4 Subsidiaries. The name and state of incorporation of each Significant
Subsidiary (as defined below) of National City is set forth in the National City
Disclosure Letter. Each of the Significant Subsidiaries is a bank, a corporation
or a limited liability company duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation or
organization and is duly qualified to do business as a foreign corporation in
each jurisdiction in which its ownership or lease of property or the nature of
the business conducted by it makes such qualification necessary, except for such
jurisdictions in which the failure to be so qualified would not have a Material
Adverse Effect. Each Significant Subsidiary has the requisite corporate power
and authority to own, lease and operate its properties and assets and to carry
on its businesses as they are now being conducted. Except as set forth in the
National City Disclosure Letter, all outstanding shares of capital stock of each
Significant Subsidiary are owned by National City or another of National City's
subsidiaries and are validly issued, fully paid and (except pursuant to 12
U.S.C. Section 55 in the case of each national bank subsidiary and applicable
state law in the case of each state bank subsidiary) nonassessable, are not
subject to preemptive rights and are owned free and clear of all liens, claims
and encumbrances. Except as set forth in the National City Disclosure Letter,
there are no outstanding subscriptions, options, warrants, rights, convertible
securities or any other agreements or commitments of any character relating to
the issued or unissued capital stock or other securities of any Significant
Subsidiary obligating any Significant Subsidiary to issue, deliver or sell, or
cause to be issued, delivered or sold additional shares of its capital stock or
obligating any Significant Subsidiary to grant, extend or enter into any
subscription, option, warrant, right, convertible security or other similar
agreement or commitment.
3.5 Information in Disclosure Documents, Registration Statement, Etc. None
of the information with respect to National City or any of National City's
subsidiaries provided by National City for inclusion in (i) the registration
statement to be filed with the Commission by National City on Form S-4 under the
Securities Act of 1933, as amended (the "Securities Act"), for the purpose of
registering the shares of National City Common Stock to be issued in the Merger
(the "Registration Statement") and (ii) any proxy statement of Allegiant ("Proxy
Statement") required to be mailed to Allegiant's shareholders in connection with
the Merger will, in the case of the Proxy Statement or any amendments or
supplements thereto, at the time of the mailing of the Proxy Statement and any
amendments or supplements thereto, and at the time of the Allegiant Meeting, or,
in the case of the Registration Statement, at the time it becomes effective,
contain any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Registration Statement will comply as to form in all material
respects with the provisions of the Securities Act and the rules and regulations
promulgated thereunder. The Proxy Statement will comply as to form in all
material respects with the provisions of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and the rules and regulations promulgated
thereunder.
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3.6 Consents and Approvals; No Violation. Except as set forth in the
National City Disclosure Letter, neither the execution and delivery of this
Agreement by National City nor the consummation by National City of the
transactions contemplated hereby will (a) conflict with or result in any breach
of any provision of its Certificate of Incorporation or By-laws of National
City, (b) violate, conflict with, constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in the
creation of any lien or other encumbrance upon any of the properties or assets
of National City or any of National City's subsidiaries under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which National
City or any of National City's subsidiaries is a party or to which they or any
of their respective properties or assets are subject, except for such
violations, conflicts, breaches, defaults, terminations, accelerations or
creations of liens or other encumbrances, which will not have a Material Adverse
Effect or (c) require any consent, approval, authorization or permit of or from,
or filing with or notification to, any court, governmental authority or other
regulatory or administrative agency or commission, domestic or foreign (a
"Governmental Entity"), except (i) pursuant to the Exchange Act and the
Securities Act, (ii) filing the Delaware Certificate of Merger pursuant to the
DGCL, (iii) filing the Missouri Articles of Merger, (iv) filings required under
the securities or blue sky laws of the various states, (v) filings under the
Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as amended (the "HSR
Act"), (vi) filings with, and approval by, the Federal Reserve Board (the
"FRB"), (vii) filings with, and approvals by the State of Missouri Department of
Economic Development, Division of Finance ("MDF"), (viii) filings with, and
approvals by, the Ohio Superintendent of Banks, the Arizona Director of
Insurance and such other state regulatory agencies as may be required
(collectively, the "State Entities"), (ix) filings and approvals pursuant to any
applicable state takeover law, (x) filings and approvals under the Small
Business Investment Act of 1958 and the rules and regulations thereunder
("SBIA") or (xi) consents, approvals, authorizations, permits, filings or
notifications which, if not obtained or made will not, individually or in the
aggregate, have a Material Adverse Effect.
3.7 Reports and Financial Statements. Since January 1, 1998, National
City and each of National City's subsidiaries have filed all reports,
registrations and statements, together with any required amendments thereto,
that they were required to file with the Commission under Section 12(b), 12(g),
13(a) or 14(a) of the Exchange Act, including, but not limited to Forms 10-K,
Forms 10-Q and proxy statements (the "National City Reports"). National City has
previously furnished or will promptly furnish Allegiant with true and complete
copies of each of National City's annual reports on Form 10-K for the years 1998
through 2002 and its quarterly reports on Form 10-Q for the quarters ended March
31, 2003, June 30, 2003 and September 30, 2003. As of their respective dates,
the National City Reports complied in all material respects with the
requirements of the Commission and did not 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 therein, in light of the circumstance under
which they were made, not misleading. The audited consolidated financial
statements and unaudited interim financial statements of National City included
in the National City Reports have been prepared in accordance with generally
accepted accounting principles applied on a consistent basis (except as may be
indicated therein or in the notes thereto) and fairly present the consolidated
financial position of National City and National
14
City's subsidiaries as of the dates thereof and the results of their operations
and cash flows for the periods then ended subject, in the case of the unaudited
interim financial statements, to normal year-end and audit adjustments and any
other adjustments described therein. There exist no material liabilities of
National City and its consolidated subsidiaries, contingent or otherwise of a
type required to be disclosed in accordance with generally accepted accounting
practices, except as disclosed in the National City Reports. National City's
reserve for possible loan losses as shown in its Quarterly Report on Form 10-Q
for the fiscal quarter ended September 30, 2003 was adequate, within the meaning
of generally accepted accounting principles and safe and sound banking
practices.
3.8 Taxes. National City will promptly make available to Allegiant, upon
request by Allegiant, true and correct copies of the federal, state and local
income tax returns, and state and local property and sales tax returns and any
other tax returns filed by National City and any of National City's subsidiaries
for each of the fiscal years that remains open, as of the date hereof, for
examination or assessment of tax. National City and each National City
subsidiary have prepared in good faith and duly and timely filed, or caused to
be duly and timely filed, all federal, state, local and foreign income,
estimated tax, withholding tax, franchise, sales and other tax returns or
reports required to be filed by them on or before the date hereof, except to the
extent that all such failures to file, taken together, would not have a Material
Adverse Effect. National City and each of its subsidiaries have paid, or have
made adequate provision or set up an adequate accrual or reserve for the payment
of, all taxes, shown or required to be shown to be owing on all such returns or
reports, together with any interest, additions or penalties related to any such
taxes or to any open taxable year or period. Except as set forth in the National
City Disclosure Letter, neither National City nor any of National City's
subsidiaries has consented to extend the statute of limitations with respect to
the assessment of any tax. Except as set forth in the National City Disclosure
Letter, neither National City nor any of National City's subsidiaries is a party
to any action or proceeding, nor to the best of National City's knowledge is any
such action or proceeding threatened, by any Governmental Entity in connection
with the determination, assessment or collection of any taxes, and no deficiency
notices or reports have been received by National City or any of National City's
subsidiaries in respect of any material deficiencies for any tax, assessment, or
government charges.
3.9 Employee Plans. Except as set forth in the National City Disclosure
Letter, all employee benefit, welfare, bonus, deferred compensation, pension,
profit sharing, stock option, employee stock ownership, consulting, severance,
or fringe benefit plans, formal or informal, written or oral, and all trust
agreements related thereto, relating to any present or former directors,
officers or employees of National City or its subsidiaries ("National City
Employee Plans") have been maintained, operated, and administered in substantial
compliance with their terms and currently comply, and have at all relevant times
complied, in all material respects with the applicable requirements of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), the Code,
and any other applicable laws. With respect to each National City Employee Plan
which is a pension plan (as defined in Section 3(2) of ERISA): (a) except for
recent amendment(s) to the plans not materially affecting the qualified status
of the plans (which are disclosed in, and copies of which are attached to, the
National City Disclosure Letter), each pension plan as amended (and any trust
relating thereto) intended to be a qualified plan under Section 401(a) of the
Code either: (i) has been determined by the Internal Revenue
15
Service ("IRS") to be so qualified or (ii) is the subject of a pending
application for such determination that was timely filed, (b) there is no
accumulated funding deficiency (as defined in Section 302 of ERISA and Section
412 of the Code), whether or not waived, and no waiver of the minimum funding
standards of such sections has been requested from the IRS, (c) neither National
City nor any of its subsidiaries has provided, or is required to provide,
security to any pension plan pursuant to Section 401(a)(29) of the Code, (d) no
reportable event described in Section 4043 of ERISA for which the 30-day
reporting requirement has not been waived has occurred, (e) except as disclosed
in the National City Disclosure Letter, no defined benefit plan has been
terminated, nor has the Pension Benefit Guaranty Corporation ("PBGC") instituted
proceedings to terminate a defined benefit plan or to appoint a trustee or
administrator of a defined benefit plan, and no circumstances exist that
constitute grounds under Section 4042(a)(2) of ERISA entitling the PBGC to
institute any such proceedings and (f) no pension plan is a "multiemployer plan"
within the meaning of Section 3(37) of ERISA or a "multiple employer plan"
within the meaning of 413(c) of the Code. Neither National City nor any of its
subsidiaries has incurred any liability to the PBGC with respect to any
"single-employer plan" within the meaning of Section 4001(a)(15) of ERISA
currently or formerly maintained by any entity considered one employer with it
under Section 4001 of ERISA or Section 414 of the Code, except for premiums all
of which have been paid when due. Neither National City nor any of its
subsidiaries has incurred any withdrawal liability with respect to a
multiemployer plan under Subtitle E of Title IV of ERISA. Except as set forth in
the National City Disclosure Letter, there is no basis for any person to assert
that National City or any of its subsidiaries has an obligation to institute any
Employee Plan or any such other arrangement, agreement or plan. With respect to
any insurance policy that heretofore has or currently does provide funding for
benefits under any National City Employee Plan, (A) there is no liability on the
part of National City or any of its subsidiaries in the nature of a retroactive
or retrospective rate adjustment, loss-sharing arrangement, or other actual or
contingent liability, nor would there be any such liability if such insurance
policy was terminated, and (B) no insurance company issuing such policy is in
receivership, conservatorship, liquidation or similar proceeding and, to the
knowledge of National City, no such proceeding with respect to any such insurer
is imminent. Except as set forth in the National City Disclosure Letter, neither
the execution of this Agreement, nor the consummation of the transactions
contemplated thereby will (y) constitute a stated triggering event under any
National City Employee Plan that will result in any payment (whether of
severance pay or otherwise) becoming due from National City or any of its
subsidiaries to any present or former officer, employee, director, shareholder,
consultant or dependent of any of the foregoing or (z) accelerate the time of
payment or vesting, or increase the amount of compensation due to any present or
former officer, employee, director, shareholder, consultant, or dependent of any
of the foregoing. Neither National City nor any of its subsidiaries has any
obligations for retiree health and life benefits under any National City
Employee Plan, except as set forth in the National City Disclosure Letter. There
are no restrictions on the rights of National City or its subsidiaries to amend
or terminate any such National City Employee Plan without incurring any
liability thereunder.
3.10 Material Contracts. Except as set forth in the National City
Disclosure Letter or disclosed in the National City Reports, neither National
City nor any of its subsidiaries is a party to, or is bound or affected by, or
receives benefits under (a) any employment, severance,
16
termination, consulting or retirement agreement (collectively, "Benefit
Agreements") providing for aggregate payments to any person in any calendar year
in excess of $1,000,000, (b) any material agreement, indenture or other
instrument relating to the borrowing of money by National City or any of its
subsidiaries or the guarantee by National City or any of its subsidiaries of any
such obligation (other than trade payables and instruments relating to
borrowings or guaranties made in the ordinary course of business) or (c) any
other contract or agreement or amendment thereto that would be required to be
filed as an exhibit to a Form 10-K filed by National City with the Commission as
of the date of this Agreement (collectively, the "National City Contracts").
Neither National City nor any of National City's subsidiaries is in default
under any of the National City Contracts, which default is reasonably likely to
have, either individually or in the aggregate, a Material Adverse Effect and
there has not occurred any event that with the lapse of time or the giving of
notice or both would constitute such a default. Neither National City nor any of
National City's subsidiaries is a party to, or is bound by, any collective
bargaining agreement, contract, or other agreement or understanding with a labor
union or labor organization, nor is National City or any of National City's
subsidiaries the subject of a proceeding asserting that it or any such
subsidiary has committed an unfair labor practice or seeking to compel it or
such subsidiary to bargain with any labor organization as to wages and
conditions of employment, nor is there any strike or other labor dispute
involving it or any of its subsidiaries pending or threatened.
3.11 Absence of Certain Changes or Events. Except as set forth in the
National City Disclosure Letter or disclosed in the National City Reports filed
by National City with the Commission prior to the date of this Agreement, since
December 31, 2002, there has not been any change in the financial condition,
results of operations or business of National City and its subsidiaries which
would or in the future will have a Material Adverse Effect.
3.12 Litigation. Except as disclosed in the National City Disclosure
Letter or the National City Reports filed by National City with the Commission
prior to the date of this Agreement, there is no suit, action or proceeding
pending, or, to the knowledge of National City, threatened against or affecting
National City or any of National City's subsidiaries which, if decided adversely
to National City, would be reasonably expected to result in a Material Adverse
Effect, nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator, outstanding against National City or any of
National City's subsidiaries having, or which, insofar as reasonably can be
foreseen, in the future would have, a Material Adverse Effect.
3.13 Compliance with Laws and Orders. Except as set forth in the National
City Disclosure Letter or disclosed in the National City Reports filed by
National City with the Commission prior to the date of this Agreement, the
businesses of National City and of National City's subsidiaries are not being
conducted in violation of any law, ordinance, regulation, judgment, order,
decree, license or permit of any Governmental Entity (including, without
limitation, in the case of National City's subsidiaries that are banks, all
statutes, rules and regulations pertaining to the conduct of the banking
business and the exercise of trust powers), except for violations which
individually or in the aggregate do not, and, insofar as reasonably can be
foreseen, in the future will not, have a Material Adverse Effect. Except as set
forth in the National City Disclosure Letter, no investigation or review by any
Governmental
17
Entity with respect to National City or any of National City's subsidiaries is
pending or, to the knowledge of National City, threatened, nor has any
Governmental Entity indicated an intention to conduct the same in each case
other than those the outcome of which will not have a Material Adverse Effect.
3.14 Agreements with Bank Regulators, Etc. Except as set forth in the
National City Disclosure Letter, neither National City nor any National City
subsidiary is a party to any written agreement or memorandum of understanding
with, or a party to any commitment letter, board resolution or similar
undertaking to, or is subject to any order or directive by, or is a recipient of
any extraordinary supervisory letter from, any Governmental Entity which
restricts materially the conduct of its business, or in any manner relates to
its capital adequacy, its credit or reserve policies or its management, nor has
National City been advised by any Governmental Entity that it is contemplating
issuing or requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of understanding,
extraordinary supervisory letter, commitment letter or similar submission.
Neither National City nor any of National City's subsidiaries is required by
Section 32 of the Federal Deposit Insurance Act ("FDIA") to give prior notice to
a Federal banking agency of the proposed addition of an individual to its board
of directors or the employment of an individual as a senior executive officer.
National City knows of no reason why the regulatory approvals referred to in
Section 3.6(c) above should not be obtained.
3.15 National City Ownership of Stock. As of the date of this Agreement,
neither National City nor any of its affiliates or "associates" (as such term is
defined in Rule 14a-1 under the Exchange Act) (i) beneficially owns, directly or
indirectly, or (ii) are parties to any agreement, arrangement or understanding
for the purpose of acquiring, holding, voting or disposing of, Allegiant Common
Stock (other than DPC Shares or Trust Account Shares), which in the aggregate,
represent five percent (5%) or more of the outstanding shares of Allegiant
Common Stock.
3.16 Tax Treatment. As of the date hereof, National City is aware of no
reason why the Merger will fail to qualify as a reorganization under Section
368(a) of the Code. As of the date hereof and through the Effective Date,
National City will not have taken any action that would prevent the Merger from
qualifying as a reorganization within the meaning of Section 368 of the Code.
3.17 Fees. Neither National City nor any of National City's subsidiaries
has paid or will become obligated to pay any fee or commission to any broker,
finder or intermediary in connection with the transactions contemplated by this
Agreement.
3.18 National City Action. The Board of Directors of National City (at a
meeting duly called, constituted and held) has by the requisite vote of all
directors present (a) determined that the Merger is advisable and in the best
interests of National City and its stockholders and (b) approved this Agreement
and the transactions contemplated hereby, including the Merger. The Board of
Directors of National City has approved the transactions contemplated by this
Agreement and the Allegiant Option Agreement such that the provisions of Section
203 of the DGCL and any other applicable state business combination or
anti-takeover provisions of
18
National City Certificate of Incorporation or By-laws shall not be triggered by
the Merger, execution of this Agreement or the Allegiant Option Agreement or any
transaction contemplated by such Agreements.
3.19 Material Interests of Certain Persons. Except as disclosed in
National City's Proxy Statement for its 2003 Annual Meeting of Stockholders, no
officer or director of National City, or any "associate" (as such term is
defined in Rule 14a-1 under the Exchange Act) of any such officer or director,
has any material interest in any material contract or property (real or
personal), tangible or intangible, used in or pertaining to the business of
National City or any of its subsidiaries.
3.20 Environmental Matters. For purposes of this Agreement, the following
terms shall have the indicated meanings:
"Environmental Law" means any federal, state or local law, statute,
ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, order, determination, judgment, decree, injunction or
agreement with any governmental entity relating to (i) the health,
protection, preservation, containment or restoration of the environment
including, without limitation, air, water vapor, surface water,
groundwater, drinking water supply, surface soil, subsurface soil,
wetlands, plant and animal life or any other natural resource,
conservation, and/or (ii) the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, production,
release or disposal of Hazardous Substances. The term Environmental Law
includes, without limitation, (x) the Comprehensive Environmental
Response, Compensation and Liability Act, as amended, 42 U.S.C. Section
9601, et seq.; the Superfund Amendments and Reauthorization Act of 1986,
42 U.S.C. 9601(2)(D); the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. Section 6901, et seq.; the Clean Air Act, as amended,
42 U.S.C. Section 7401, et seq.; the Federal Water Pollution Control Act,
as amended by the Clean Water Act, 33 U.S.C. Section 1251, et seq.; the
Toxic Substances Control Act, as amended, 15 U.S.C. Section 9601, et seq.;
the Emergency Planning and Community Right to Know Act, 42 U.S.C. Section
11001, et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f, et
seq.; and all comparable state and local laws, ordinances, rules,
regulations respecting the interpretation or enforcement of same and (y)
any common law (including without limitation common law that may impose
strict liability) that may impose liability for injuries or damages due to
the release of any Hazardous Substance.
"Hazardous Substance" means (i) any hazardous wastes, toxic
chemicals, materials, substances or wastes as defined by or for the
purposes of any Environmental Law; (ii) any "oil," as defined by the Clean
Water Act, as amended from time to time, and regulations promulgated
thereunder (including crude oil or any fraction thereof and any petroleum
products or derivatives thereof); (iii) any substance, the presence of
which is prohibited, regulated or controlled by any applicable federal,
state or local laws, regulations, statutes or ordinances now in force or
hereafter enacted relating to waste disposal or environmental protection
with respect to the exposure to, or manufacture, possession, presence,
use, generation, storage, transportation, treatment, release,
19
emission, discharge, disposal, abatement, cleanup, removal, remediation or
handling of any such substance; (iv) any asbestos or asbestos-containing
materials, polychlorinated biphenyls ("PCBs") in the form of electrical
equipment, fluorescent light fixtures with ballasts, cooling oils or any
other form, urea formaldehyde, atmospheric radon; (v) any solid, liquid,
gaseous or thermal irritant or contaminant, such as smoke, vapor, soot,
fumes, alkalis, acids, chemicals, pesticides, herbicides, sewage,
industrial sludge or other similar wastes; (vi) industrial, nuclear or
medical by-products; (vii) any lead based paint or coating and (viii) any
underground storage tank(s).
"Loan Portfolio Properties, Trust Properties and Other Properties"
means any real property, interest in real property, improvements,
appurtenances, rights and personal property attendant thereto, which is
owned, leased as a landlord or a tenant, licensed as a licensor or
licensee, managed or operated or upon which is held a mortgage, deed of
trust, deed to secure debt or other security interest by National City or
Allegiant, as the case may be, or any of their subsidiaries whether
directly, as an agent, as trustee or other fiduciary or otherwise.
Except as set forth in the National City Disclosure Letter, (a) to the
best of National City's knowledge, neither National City nor any of its
subsidiaries is in violation of or has any liability, absolute or contingent, in
connection with or under any Environmental Law, except any such violations or
liabilities which would not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect; (ii) to the best of National
City's knowledge, none of the Loan Portfolio Properties, Trust Properties and
Other Properties of National City or its subsidiaries is in violation of or has
any liability, absolute or contingent, under any Environmental Law, except any
such violations or liabilities which, individually or in the aggregate would not
have a Material Adverse Effect; and (iii) to the best of National City's
knowledge, there are no actions, suits, demands, notices, claims, investigations
or proceedings pending or threatened relating to any Loan Portfolio Properties,
Trust Properties and Other Properties including, without limitation, any
notices, demand letters or requests for information from any federal or state
environmental agency relating to any such liability under or violation of
Environmental Law, which would impose a liability upon National City or its
subsidiaries pursuant to any Environmental Law, except such as would not,
individually or in the aggregate have a Material Adverse Effect.
3.21 National City Disclosure Letter. The National City Disclosure Letter
is arranged in a format in which the disclosures made therein are arranged in
paragraphs or sections corresponding to the numbered and lettered sections and
subsections of this Agreement and the matters expressly disclosed in the
National City Disclosure Letter shall be specifically limited to the
corresponding representation and warranty to which such disclosure paragraph or
section relates and no implication or inference shall be made in any other
representation or warranty.
3.22 Notice of Breach or Potential Breach. National City shall promptly
notify Allegiant of any change, circumstance or event which would cause any of
the representations or warranties made by National City pursuant to this
Agreement to be untrue as of the date hereof or at Closing Date or which
prevents National City from complying with any of its obligations hereunder.
There is no fact or development known to National City which would have a
20
Material Adverse Effect, or which might in the future, in National City's
reasonable judgment, have a Material Adverse Effect, on National City's or its
Subsidiaries' continuing business, which has not been set forth in this
Agreement.
3.23 Disclosure. No representation or warranty by National City in this
Agreement after giving effect to the disclosures set forth in the National City
Disclosure Letter, contains any untrue statement of a material fact or omits to
state a material fact required to be stated herein or therein or necessary to
make any statement herein or therein not materially misleading. Any claim by
Allegiant for a breach of representation, warranty, covenant, agreement or
obligation of Allegiant hereunder will not be affected by any investigation
conducted by Allegiant with respect to, or knowledge acquired (or capable of
being acquired), with respect to the accuracy or inaccuracy of or compliance
with any such representation, warranty, covenant, agreement or obligation.
IV. REPRESENTATIONS AND WARRANTIES OF ALLEGIANT
Allegiant hereby represents and warrants to National City that:
4.1 Corporate Organization. Allegiant is a corporation duly organized,
validly existing and in good standing under the laws of the State of Missouri
and is duly qualified to do business as a foreign corporation in each
jurisdiction in which its ownership or lease of property or the nature of the
business conducted by it makes such qualification necessary, except for such
jurisdictions in which the failure to be so qualified would not have a Material
Adverse Effect. Allegiant is registered as a bank holding company under the
BHCA. Allegiant has the requisite corporate power and authority to own, lease
and operate its properties and assets and to carry on its business as it is now
being conducted. Allegiant has heretofore delivered to National City true and
complete copies of its Articles of Incorporation and By-laws as currently in
effect.
4.2 Authority. Allegiant has the requisite corporate power and authority
to execute and deliver this Agreement and, except for any required approval of
Allegiant's shareholders, to consummate the transactions contemplated by such.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated herein have been duly approved by the Board of
Directors of Allegiant and no other corporate proceedings on the part of
Allegiant are necessary to authorize this Agreement or to consummate the
transactions so contemplated, subject only to approval by the shareholders of
Allegiant as provided in Section 5.14 below. This Agreement has been duly
executed and delivered by, and constitutes valid and binding obligations of
Allegiant, enforceable against Allegiant in accordance with its terms, except as
the enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and other 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 proceedings may be brought.
4.3 Capitalization. As of the date hereof, the authorized capital stock
of Allegiant consists of 30,000,000 shares of Allegiant Common Stock. As of the
close of business on November 18, 2003, 17,496,778 shares of Allegiant Common
Stock were validly issued and
21
outstanding, fully paid and nonassessable and no shares of preferred stock were
issued or outstanding. As of the date of this Agreement except as set forth in
this Section 4.3, pursuant to Allegiant's Option Plans, pursuant to the
Allegiant Option Agreement or set forth in a disclosure letter executed by
Allegiant and dated and delivered by Allegiant to National City as of the date
hereof (the "Allegiant Disclosure Letter"), there are no shares of capital stock
of Allegiant authorized, issued or outstanding and there are no outstanding
subscriptions, options, warrants, rights, convertible securities or any other
agreements or commitments of any character relating to the issued or unissued
capital stock or other securities of Allegiant obligating Allegiant to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
capital stock of Allegiant or obligating Allegiant to grant, extend or enter
into any subscription, option, warrant, right, convertible security or other
similar agreement or commitment. Except as set forth in the Allegiant Disclosure
Letter, there are no voting trusts or other agreements or understandings to
which Allegiant or any of Allegiant's subsidiaries is a party with respect to
the voting of the capital stock of Allegiant. As of the date of this Agreement,
there were outstanding under Allegiant Option Plans options to purchase
1,016,603 shares of Allegiant Common Stock, which Allegiant stock options had a
weighted average exercise price of $14.20 and for which adequate shares of
Allegiant Common Stock have been reserved for issuance under Allegiant Option
Plans.
4.4 Subsidiaries. The Allegiant Disclosure Letter sets forth the name
and state of incorporation of each subsidiary of Allegiant (collectively,
"Allegiant Subsidiaries" and each an "Allegiant Subsidiary"). Each Allegiant
Subsidiary is a bank, a corporation or other business entity duly organized,
validly existing and in good standing under the laws of its respective
jurisdiction of incorporation or organization and is duly qualified to do
business as a foreign corporation or foreign business entity in each
jurisdiction in which its ownership or lease of property or the nature of the
business conducted by it makes such qualification necessary, except for such
jurisdictions in which the failure to be so qualified would not have a Material
Adverse Effect. Each Allegiant Subsidiary has the requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its businesses as they are now being conducted. All outstanding shares of
capital stock of each Allegiant Subsidiary is owned by Allegiant or another
Allegiant Subsidiary and are validly issued, fully paid and (except pursuant to
12 U.S.C. Section 55 in the case of each national bank subsidiary and applicable
state law in the case of each state bank subsidiary) nonassessable, are not
subject to preemptive rights and are owned free and clear of all liens, claims
and encumbrances. There are no outstanding subscriptions, options, warrants,
rights, convertible securities or any other agreements or commitments of any
character relating to the issued or unissued capital stock or other securities
of any Allegiant Subsidiary obligating any Allegiant Subsidiary to issue,
deliver or sell, or cause to be issued, delivered or sold additional shares of
its capital stock or obligating any Allegiant Subsidiary to grant, extend or
enter into any subscription, option, warrant, right, convertible security or
other similar agreement or commitment.
4.5 Information in Disclosure Documents, Registration Statement, Etc.
None of the information with respect to Allegiant or any Allegiant Subsidiary
provided by Allegiant for inclusion in the Proxy Statement or the Registration
Statement will, in the case of the Proxy Statement or any amendments or
supplements thereto, at the time of the mailing of the Proxy Statement and any
amendments or supplements thereto, and at the time of the Allegiant
22
Meeting, or, in the case of the Registration Statement, at the time it becomes
effective, contain any untrue statement of material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations
promulgated thereunder.
4.6 Consent and Approvals; No Violation. Except as set forth in the
Allegiant Disclosure Letter, neither the execution and delivery of this
Agreement by Allegiant nor the consummation by Allegiant of the transactions
contemplated hereby will (a) conflict with or result in any breach of any
provision of its Amended and Restated Articles of Incorporation or By-laws of
Allegiant, (b) violate, conflict with, constitute a default (or an event which,
with notice or lapse of time or both, would constitute a default) under, or
result in the termination of, or accelerate the performance required by, or
result in the creation of any lien or other encumbrance upon any of the
properties or assets of Allegiant or any Allegiant Subsidiary under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, deed of
trust, license, lease, agreement or other instrument or obligation to which
Allegiant or any Allegiant Subsidiary is a party or to which they or any of
their respective properties or assets are subject, except for such violations,
conflicts, breaches, defaults, terminations, accelerations or creations of liens
or other encumbrances, which will not have a Material Adverse Effect or (c)
require any consent, approval, authorization or permit of or from, or filing
with or notification to, any Governmental Entity, except (i) pursuant to the
Exchange Act and the Securities Act, (ii) filing the Delaware Certificate of
Merger, (iii) filing the Missouri Articles of Merger, (iv) filings required
under the securities or blue sky laws of the various states, (v) filing under
the HSR Act, (vi) filings with, and approval by, the FRB, (vii) filings with,
and approval by, the MDF, (viii) filings with, and approvals by, the State
Entities, (ix) filings and approvals pursuant to any applicable state takeover
law, (x) filings and approvals under the SBIA or (xi) consents, approvals,
authorizations, permits, filings or notifications which, if not obtained or made
will not, individually or in the aggregate, have a Material Adverse Effect.
4.7 Reports and Financial Statements. Since January 1, 1998, Allegiant
and each Allegiant Subsidiary have filed all reports, registrations and
statements, together with any required amendments thereto, that they were
required to file with the Commission under Section 12(b), 12(g), 13(a) or 14(a)
of the Exchange Act, including, but not limited to Forms 10-K, Forms 10-Q and
proxy statements (the "Allegiant Reports"). Allegiant has previously furnished
or will promptly furnish National City with true and complete copies of each of
Allegiant's annual reports on Form 10-K for the years 1998 through 2002 and its
quarterly reports on Form 10-Q for the quarters ended March 31, 2003, June 30,
2003 and September 30, 2003. As of their respective dates, the Allegiant Reports
complied in all material respects with the requirements of the Commission and
did not 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
therein, in light of the circumstance under which they were made, not
misleading. The audited consolidated financial statements and unaudited interim
financial statements of Allegiant included in the Allegiant Reports have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis (except as may be indicated therein or in the notes thereto)
and fairly present the financial position of Allegiant and Allegiant
Subsidiaries taken
23
as a whole as at the dates thereof and the consolidated results of their
operations and cash flows for the periods then ended subject, in the case of the
unaudited interim financial statements, to normal year-end and audit adjustments
and any other adjustments described therein. There exist no material liabilities
of Allegiant and its consolidated subsidiaries, contingent or otherwise of a
type required to be disclosed in accordance with generally accepted accounting
practices, except as disclosed in the Allegiant Reports. Allegiant's reserve for
possible loan losses as shown in its Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 2003 was adequate, within the meaning of
generally accepted accounting principles and safe and sound banking practices.
4.8 Taxes. Allegiant will promptly make available to National City, upon
request by National City, true and correct copies of the federal, state and
local income tax returns, and state and local property and sales tax returns
filed by Allegiant and any of Allegiant Subsidiaries for each of the fiscal
years that remains open, as of the date hereof, for examination or assessment of
tax. Except as set forth in the Allegiant Disclosure Letter, Allegiant and each
Allegiant Subsidiary have prepared in good faith and duly and timely filed, or
caused to be duly and timely filed, all federal, state, local and foreign
income, estimated tax, withholding tax, franchise, sales and other tax returns
or reports required to be filed by them on or before the date hereof, except to
the extent that all such failures to file, taken together, would not have a
Material Adverse Effect. Except as set forth in the Allegiant Disclosure Letter,
Allegiant and each Allegiant Subsidiary have paid, or have made adequate
provision or set up an adequate accrual or reserve for the payment of, all taxes
shown or required to be shown to be owing on all such returns or reports,
together with any interest, additions or penalties related to any such taxes or
to any open taxable year or period. Except as set forth in the Allegiant
Disclosure Letter, neither Allegiant nor any of Allegiant's Subsidiaries has
consented to extend the statute of limitations with respect to the assessment of
any tax. Except as set forth in the Allegiant Disclosure Letter, neither
Allegiant nor any of Allegiant Subsidiaries is a party to any action or
proceeding, nor to the best of Allegiant's knowledge is any such action or
proceeding threatened, by any Governmental Entity in connection with the
determination, assessment or collection of any taxes, and no deficiency notices
or reports have been received by Allegiant or any of Allegiant Subsidiaries in
respect of any material deficiencies for any tax, assessment, or government
charge.
4.9 Employee Plans. Except as set forth in the Allegiant Disclosure
Letter, all employee benefit, welfare, bonus, deferred compensation, pension,
profit sharing, stock option, employee stock ownership, consulting, severance,
or fringe benefit plans, formal or informal, written or oral and all trust
agreements related thereto, relating to any present or former directors,
officers or employees of Allegiant or Allegiant Subsidiaries ("Allegiant
Employee Plans") have been maintained, operated, and administered in substantial
compliance with their terms and currently comply, and have at all relevant times
complied, in all material respects with the applicable requirements of ERISA,
the Code, and any other applicable laws. Except as set forth in the Allegiant
Disclosure Letter, with respect to each Allegiant Employee Plan which is a
pension plan (as defined in Section 3(2) of ERISA): (a) except for recent
amendment(s) to the plans not materially affecting the qualified status of the
plans (which are disclosed in, and copies of which are attached to, the
Allegiant Disclosure Letter), each pension plan as amended (and any trust
relating thereto) intended to be a qualified plan under Section 401(a) of the
Code either (i) has been determined by the IRS to be so qualified or (ii) is the
subject of a pending
24
application for such determination that was timely filed, (b) there is no
accumulated funding deficiency (as defined in Section 302 of ERISA and Section
412 of the Code), whether or not waived, and no waiver of the minimum funding
standards of such sections has been requested from the IRS, (c) neither
Allegiant nor any of the Allegiant Subsidiaries has provided, or is required to
provide, security to any pension plan pursuant to Section 401(a)(29) of the
Code, (d) no reportable event described in Section 4043 of ERISA for which the
30-day reporting requirement has not been waived has occurred, (e) no defined
benefit plan has been terminated, nor has the PBGC instituted proceedings to
terminate a defined benefit plan or to appoint a trustee or administrator of a
defined benefit plan, and no circumstances exist that constitute grounds under
Section 4042(a)(2) of ERISA entitling the PBGC to institute any such proceedings
and (f) no pension plan is a "multiemployer plan" within the meaning of Section
3(37) of ERISA or a "multiple employer plan" within the meaning of Section
413(c) of the Code. Neither Allegiant nor any Allegiant Subsidiary has incurred
any liability to the PBGC with respect to any "single-employer plan" within the
meaning of Section 4001(a)(15) of ERISA currently or formerly maintained by any
entity considered one employer with it under Section 4001 of ERISA or Section
414 of the Code, except for premiums all of which have been paid when due.
Neither Allegiant nor any of its subsidiaries has incurred any withdrawal
liability with respect to a multiemployer plan under Subtitle E of Title IV of
ERISA. There is no basis for any person to assert that Allegiant or any of its
subsidiaries has an obligation to institute any Employee Plan or any such other
arrangement, agreement or plan. With respect to any insurance policy that
heretofore has or currently does provide funding for benefits under any
Allegiant Employee Plan, (A) there is no liability on the part of Allegiant or
any of its subsidiaries in the nature of a retroactive or retrospective rate
adjustment, loss-sharing arrangement, or other actual or contingent liability,
not would there be any such liability if such insurance policy was terminated,
and (B) no insurance company issuing such policy is in receivership,
conservatorship, liquidation or similar proceeding and, to the knowledge of
Allegiant, no such proceeding with respect to any such insurer is imminent.
Except as set forth in the Allegiant Disclosure Letter, neither the execution of
this Agreement, nor the consummation of the transactions contemplated thereby
will (A) constitute a stated triggering event under any Allegiant Employee Plan
that will result in any payment (whether of severance pay or otherwise) becoming
due from Allegiant or any of its subsidiaries to any present or former officer,
employee, director, shareholder, consultant or dependent of any of the foregoing
or (B) accelerate the time of payment or vesting, or increase the amount of
compensation due to any present or former officer, employee, director,
shareholder, consultant, or dependent of any of the foregoing. Neither Allegiant
nor any of its Subsidiaries has any obligations for retiree health and life
benefits under any Allegiant Employee Plan, except as set forth in the Allegiant
Disclosure Letter. Except as set forth in the Allegiant Disclosure Letter, there
are no restrictions on the rights of Allegiant or Allegiant Subsidiaries to
amend or terminate any such Allegiant Employee Plan without incurring any
liability thereunder.
4.10 Material Contracts. Except as set forth in the Allegiant Disclosure
Letter or disclosed in the Allegiant Reports, neither Allegiant nor any
Allegiant Subsidiary is a party to, or is bound or affected by, or receives
benefits under (a) any Benefit Agreements providing for aggregate payments to
any person in any calendar year in excess of $50,000, (b) any material
agreement, indenture or other instrument relating to the borrowing of money by
Allegiant or any Allegiant Subsidiary or the guarantee by Allegiant or any
Allegiant Subsidiary of any such
25
obligation (other than trade payables and instruments relating to transactions
entered into in the ordinary course of business) or (c) any other contract or
agreement or amendment thereto that would be required to be filed as an exhibit
to a Form 10-K filed by Allegiant with the Commission as of the date of this
Agreement (collectively, the "Allegiant Contracts"). Neither Allegiant nor any
Allegiant Subsidiary is in default under any Allegiant Contract, which default
is reasonably likely to have, either individually or in the aggregate, a
Material Adverse Effect, and there has not occurred any event that with the
lapse of time or the giving of notice or both would constitute such a default.
Except as set forth in Allegiant Disclosure Letter, neither Allegiant nor any
Allegiant Subsidiary is a party to, or is bound by, any collective bargaining
agreement, contract, or other agreement or understanding with a labor union or
labor organization, nor is Allegiant or any Allegiant Subsidiary the subject of
a proceeding asserting that is or any Allegiant Subsidiary has committed an
unfair labor practice or seeking to compel it or such subsidiary to bargain with
any labor organization as to wages and conditions of employment, nor is there
any strike or other labor dispute involving it or any Allegiant Subsidiary
pending or threatened.
4.11 Absence of Certain Changes or Events. Except as set forth in the
Allegiant Disclosure Letter or disclosed in the Allegiant Reports filed by
Allegiant with the Commission prior to the date of this Agreement, since
December 31, 2002, there has not been any change in the financial condition,
results of operations or business of Allegiant or any Allegiant Subsidiary which
would or in the future will have a Material Adverse Effect.
4.12 Litigation. Except as disclosed in the Allegiant Reports filed by
Allegiant with the Commission prior to the date of this Agreement, there is no
suit, action or proceeding pending, or, to the knowledge of Allegiant,
threatened against or affecting Allegiant or any Allegiant Subsidiary which, if
determined adversely to Allegiant, would be reasonably expected to have a
Material Adverse Effect, nor is there any judgment, decree, injunction, rule or
order of any Governmental Entity or arbitrator, outstanding against Allegiant or
any Allegiant Subsidiary having, or which, insofar as reasonably can be
foreseen, in the future would have, a Material Adverse Effect on the banking
industry generally.
4.13 Compliance with Laws and Orders. Except as set forth in the
Allegiant Disclosure Letter or as disclosed in the Allegiant Reports filed by
Allegiant with the Commission prior to the date of this Agreement, the
businesses of Allegiant and each Allegiant Subsidiary are not being conducted in
violation of any law, ordinance, regulation, judgment, order, decree, license or
permit of any Governmental Entity (including, without limitation, in the case of
an Allegiant Subsidiary that is a bank, all statutes, rules and regulations
pertaining to the conduct of the banking business and the exercise of trust
powers), except for violations which individually or in the aggregate do not,
and, insofar as reasonably can be foreseen, in the future will not, have a
Material Adverse Effect. Except as set forth in the Allegiant Disclosure Letter,
no investigation or review by any Governmental Entity with respect to Allegiant
or any Allegiant Subsidiary is pending or, to the knowledge of Allegiant
threatened, nor has any Governmental Entity indicated an intention to conduct
the same in each case other than those the outcome of which will not have a
Material Adverse Effect.
4.14 Agreements with Bank Regulators, Etc. Neither Allegiant nor any
26
Allegiant Subsidiary is a party to any written agreement or memorandum of
understanding with, or a party to any commitment letter, board resolution or
similar undertaking to, or is subject to any order or directive by, or is a
recipient of any extraordinary supervisory letter from, any Governmental Entity
which restricts materially the conduct of its business, or in any manner relates
to its capital adequacy, its credit or reserve policies or its management,
except for those the existence of which has been disclosed in the Allegiant
Disclosure Letter, nor has Allegiant been advised by any Governmental Entity
that it is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree, agreement,
memorandum of understanding, extraordinary supervisory letter, commitment letter
or similar submission, except as set forth in the Allegiant Disclosure Letter.
Neither Allegiant nor any Allegiant Subsidiary is required by Section 32 of the
Federal Deposit Insurance Act to give prior notice to a Federal banking agency
of the proposed addition of an individual to its board of directors or the
employment of an individual as a senior or executive officer. Allegiant knows of
no reason why the regulatory approvals referred to in Section 4.6(c) above
should not be obtained.
4.15 Tax Treatment. As of the date hereof, Allegiant is aware of no
reason why the Merger will fail to qualify as a reorganization under Section
368(a) of the Code. As of the date hereof and through the Effective Date,
Allegiant will not have taken any action that would prevent the Merger from
qualifying as a reorganization within the meaning of Section 368 of the Code.
4.16 Fees. Except for fees paid and payable to Xxxx Xxxxx Xxxx Xxxxxx,
Inc., neither Allegiant nor any Allegiant Subsidiary has paid or will become
obligated to pay any fee (including any break-up or termination fee) or
commission to any broker, finder, intermediary or any other person in connection
with, or as a result of, the transactions contemplated by this Agreement.
4.17 Allegiant Action. The Board of Directors of Allegiant (at a meeting
duly called, constituted and held) has by the requisite vote of all directors
present (a) determined that the Merger is advisable and in the best interests of
Allegiant and its shareholders, (b) approved this Agreement and the transactions
contemplated hereby, including the Merger, and (c) has directed that the Merger
be submitted for consideration by Allegiant's shareholders at the Allegiant
Meeting. The Board of Directors of Allegiant has approved the transactions
contemplated by this Agreement and the Allegiant Option Agreement and taken all
steps necessary to exempt (i) the execution of this Agreement, the Allegiant
Stock Option, (ii) the Merger and (iii) the transactions contemplated hereby and
thereby from, any statute of the MGBL that purports to limit or restrict
business combinations or the ability to acquire or to vote shares and any other
applicable state business combination or anti-takeover provisions of Allegiant's
Amended and Restated Articles of Incorporation or Amended and Restated By-laws
as currently in effect.
4.18 Vote Required. The affirmative votes of holders of at least
two-thirds of the outstanding shares of Allegiant Common Stock entitled to vote
thereon are the only votes of the holders of any class or series of Allegiant
capital stock necessary to approve this Agreement and the transactions
contemplated by the Agreement.
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4.19 Environmental Matters. (i) To the best of Allegiant's knowledge,
neither Allegiant nor any of its subsidiaries is in violation of or has any
liability, absolute or contingent, in connection with or under any Environmental
Law, except any such violations or liabilities which would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect;
(ii) to the best of Allegiant's knowledge, none of the Loan Portfolio
Properties, Trust Properties and Other Properties of Allegiant or any Allegiant
Subsidiaries is in violation of or has any liability, absolute or contingent,
under any Environmental Law, except any such violations or liabilities which,
individually or in the aggregate would not have a Material Adverse Effect; and
(iii) to the best of Allegiant's knowledge, there are no actions, suits,
demands, notices, claims, investigations or proceedings pending or threatened
relating to any Loan Portfolio Properties, Trust Properties and Other Properties
including, without limitation, any notices, demand letters or requests for
information from any federal or state environmental agency relating to any such
liability under or violation of Environmental Law, which would impose a
liability upon Allegiant or any Allegiant Subsidiary pursuant to any
Environmental Law, except such as would not, individually or in the aggregate
have a Material Adverse Effect.
4.20 Labor. (a) Allegiant or its Subsidiaries are not engaged in, and
have not engaged in, any unfair labor practice; (b) there is no labor strike,
dispute, slowdown or stoppage actually pending threatened against or directly
affecting Allegiant or its Subsidiaries; (c) no union is currently certified,
and there is no union representation question and no union or other
organizational activity that would be subject to the National Labor Relations
Act (29 U.S.C. Section 151 et seq.) exists or is threatened; (d) no grievance or
arbitration proceeding arising out of or under collective bargaining agreements
is pending and no claims therefore exist or to the best of Allegiant's and its
Subsidiaries knowledge, are threatened; (e) no collective bargaining agreement
exists which is binding on Allegiant and/or its Subsidiaries; (f) neither
Allegiant nor its Subsidiaries have experienced any material work stoppage or
other material labor difficulty; and (g) neither Allegiant nor its Subsidiaries
are delinquent in any payments to any of its current or former officers,
directors, employees or agents for any wages, salaries, commissions, bonuses,
benefits or other compensation for any services performed by them or amounts
required to be reimbursed to them.
4.21 Material Interests of Certain Persons. Except as disclosed in
Allegiant's Proxy Statement for its 2003 Annual Meeting of Stockholders, no
officer or director of Allegiant, or any "associate" (as such term is defined in
Rule 14a-1 under the Exchange Act) of any such officer or director, has any
material interest in any material contract or property (real or personal),
tangible or intangible, used in or pertaining to the business of Allegiant or
any of its subsidiaries.
4.22 Allegiant Disclosure Letter. The Allegiant Disclosure Letter is
arranged in a format in which the disclosures made therein are arranged in
paragraphs or sections corresponding to the numbered and lettered sections and
subsections of this Agreement and the matters expressly disclosed in the
Allegiant Disclosure Letter shall be specifically limited to the corresponding
representation and warranty to which such disclosure paragraph or section
relates and no implication or inference shall be made in any other
representation or warranty.
4.23 Notice of Breach or Potential Breach. Allegiant shall promptly
notify National City of any change, circumstance or event which would cause any
of the representations
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or warranties made by Allegiant pursuant to this Agreement to be untrue as of
the date hereof or at Closing Date or which prevents Allegiant from complying
with any of its obligations hereunder. There is no fact or development known to
Allegiant which would have a Material Adverse Effect, or which might in the
future, in Allegiant's reasonable judgment, have a Material Adverse Effect, on
Allegiant's or its Subsidiaries' continuing business, which has not been set
forth in this Agreement.
4.24 Disclosure. No representation or warranty by Allegiant in this
Agreement after giving effect to the disclosures set forth in the Allegiant
Disclosure Letter, contains any untrue statement of a material fact or omits to
state a material fact required to be stated herein or therein or necessary to
make any statement herein or therein not materially misleading. Any claim by
National City for a breach of representation, warranty, covenant, agreement or
obligation of Allegiant hereunder will not be affected by any investigation
conducted by National City with respect to, or knowledge acquired (or capable of
being acquired), with respect to the accuracy or inaccuracy of or compliance
with any such representation, warranty, covenant, agreement or obligation.
V. COVENANTS
5.1 Acquisition Proposals. Allegiant and each Allegiant Subsidiary shall
not, directly or indirectly, and shall instruct and otherwise use its best
efforts to cause their respective officers, directors, employees, agents or
advisors or other representatives or consultants not to, directly or indirectly,
(i) solicit or initiate any proposals or offers from any person relating to any
acquisition or purchase of all or a material amount of the assets of (other than
purchases or sales of loans or securities in the ordinary course of business
consistent with past practice), or any securities of, or any merger,
consolidation or business combination with, Allegiant or any Allegiant
Subsidiary (such transactions are referred to herein as "Acquisition
Transactions") or (ii) except to the extent that the Board of Directors of
Allegiant is required, in a written opinion of counsel to the Board of Directors
of Allegiant, in the exercise of its fiduciary duties in accordance with
applicable law, to participate in any discussion or negotiation regarding, or
furnish to any other person any information with respect to, an Acquisition
Transaction; provided, however, that nothing contained in this Section 5.1 shall
restrict or prohibit any disclosure by Allegiant that is required in any
document to be filed with the Commission after the date of this Agreement or any
disclosure that, in the written opinion of counsel to the Board of Directors of
Allegiant, is otherwise required under applicable law. Allegiant will, and cause
each Allegiant Subsidiary to, immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing. Allegiant will notify National
City immediately if any such inquiries or proposals are received by, any such
information is requested from, or any such negotiation or discussion are sought
to be initiated or continued with Allegiant or any Allegiant Subsidiary with
respect to a proposed Acquisition Transaction.
5.2 Interim Operations of Allegiant. During the period from the date of
this Agreement to the Effective Time, except as specifically contemplated by
this Agreement, set forth in the Allegiant Disclosure Letter or as otherwise
approved expressly in writing by National
29
City (which approval will not be unreasonably withheld or delayed):
(a) Conduct of Business. Allegiant shall, and shall cause each
Allegiant Subsidiary to, conduct their respective businesses only in, and
not take any action except in, the ordinary course of business consistent
with past practice. Allegiant shall use reasonable efforts to preserve
intact the business organization of Allegiant and each Allegiant
Subsidiary, to keep available the services of its and their present key
officers and employees and to preserve the goodwill of those having
business relationships with Allegiant or any Allegiant Subsidiary. Other
than in the ordinary course of business consistent with past practice,
Allegiant shall not (i) incur any indebtedness for borrowed money (it
being understood and agreed that incurrence of indebtedness in the
ordinary course of business shall include, without limitation, the
creation of deposit liabilities, purchases of federal funds, sales of
certificates of deposit and entering into repurchase agreements), (ii)
assume, guarantee, endorse or otherwise as an accommodation become
responsible for the obligations of any other individual, corporation or
other entity, or (iii) make any loan or advance.
(b) Articles and By-laws. Allegiant shall not and shall not permit
any Allegiant Subsidiary to make any change or amendment to their
respective Articles of Incorporation or By-laws (or comparable governing
instruments) in a manner that would materially and adversely effect either
party's ability to consummate the Merger or the economic benefits of the
Merger to either party.
(c) Capital Stock. Allegiant shall not, and shall not permit any
Allegiant Subsidiary to, issue or sell any shares of capital stock or any
other securities of any of them (other than pursuant to outstanding
exercisable stock options granted pursuant to one of Allegiant Option
Plans or open-market purchases pursuant to Allegiant's dividend
reinvestment plans) or issue any securities convertible into or
exchangeable for, or options, warrants to purchase, scrip, rights to
subscribe for, calls or commitments of any character whatsoever relating
to, or enter into any contract, understanding or arrangement with respect
to the issuance of, any shares of capital stock or any other securities of
any of them (other than open-market purchases pursuant to Allegiant Option
Plans) or enter into any arrangement or contract with respect to the
purchase or voting of shares of their capital stock, or adjust, split,
combine or reclassify any of their capital stock or other securities or
make any other changes in their capital structures. Neither Allegiant nor
any Allegiant Subsidiary shall grant any additional stock options after
the date hereof.
(d) Dividends. Allegiant shall not, and shall not permit any
Allegiant Subsidiary to, declare, set aside, pay or make any dividend or
other distribution or payment (whether in cash, stock or property) with
respect to, or purchase or redeem, any shares of the capital stock of any
of them other than (i) regular quarterly cash dividends in an amount not
to exceed $0.11 per share of Allegiant Common Stock payable on the regular
historical payment dates, (ii) dividends paid by any Allegiant Subsidiary
to Allegiant or another Allegiant Subsidiary with respect to its capital
stock between the date hereof and the Effective Time and (iii) dividends
paid by Allegiant Capital Trust I or Allegiant Capital Trust II with
respect to issued and outstanding Trust Preferred
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Securities. It is agreed by the parties hereto that they will cooperate to
assure that, during any quarter, there shall not be a duplication of nor
omission of payment of dividends to shareholders of Allegiant in
connection with consummation of the Merger.
(e) Employee Plans, Compensation, Etc. Except as otherwise
provided in this Agreement, Allegiant shall not, and shall not permit any
Allegiant Subsidiary to, adopt or amend (except as required by law or
other contractual obligations existing on the date hereof) any bonus,
profit sharing, compensation, severance, termination, stock option,
pension, retirement, deferred compensation, employment or other employee
benefit agreements, trusts, plans, funds or other arrangements for the
benefit or welfare of any director, officer or employee, or (except for
normal merit increases in the ordinary course of business consistent with
past practice not to exceed 2.0% for any individual) increase the
compensation or fringe benefits of any director, officer or employee or
pay any benefit not required by any existing plan, agreement or
arrangement (including, without limitation, the granting of stock options
or stock appreciation rights) or take any action or grant any benefit not
required under the terms of any existing agreements, trusts, plans, funds
or other such arrangements or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing.
(f) Certain Policies. Allegiant will modify and change its loan,
litigation, real estate valuation, asset, liquidity and investment
portfolio policies and practices (including loan classifications and level
of reserves) prior to the Effective Time so as to be consistent on a
mutually satisfactory basis with those of National City and generally
accepted accounting principles, at the earlier of (i) such time as
National City acknowledges that all conditions to its obligations to
consummate the Merger set forth in Sections 7.1 and 7.3 below have been
waived or satisfied or (ii) immediately prior to the Effective Time.
Allegiant's representations, warranties or covenants contained in this
Agreement shall not be deemed to be untrue or breached in any respect for
any purpose as a consequence of any such modifications or changes.
5.3 Interim Operations of National City. During the period from the date
of this Agreement to the Effective Time, without the prior written consent of
Allegiant, National City will not declare or pay any extraordinary or special
dividend on the National City Common Stock or take any action that would (a)
materially delay or adversely affect the ability of National City to obtain any
approvals of Governmental Authorities required to permit consummation of the
Merger or (b) materially adversely affect its ability to perform its obligations
under this Agreement or to consummate the transaction contemplated hereby.
5.4 Employee Matters.
(a) Benefit Agreements. Surviving Corporation and National City
shall honor, maintain and perform on and after the Effective Time, without
deduction, counterclaims, interruptions or deferment (other than
withholding under applicable law), all vested benefits of any person under
all existing plans or agreements.
(b) Retirement and Benefit Plans. For purposes of all employee
benefit plans,
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programs or arrangements maintained or contributed to by National City or
Surviving Corporation, National City shall credit or shall cause Surviving
Corporation to credit employees of Allegiant and Allegiant Subsidiaries
who become employees of National City or Surviving Corporation as a result
of the Merger with all service with Allegiant; any Allegiant Subsidiaries;
or any predecessor employer (to the extent such service has been
recognized by Allegiant under Allegiant Employee Plans) for purposes of
eligibility and vesting as if such service, and compensation from, had
been performed for National City or a subsidiary thereof but not for
purposes of benefit accrual; provided, however, that this provision shall
not change the treatment under the National City Non-Contributory
Retirement Plan and Trust of service with National City or any of National
City's subsidiaries prior to the Closing Date. From and after the
Effective Time, National City shall, or shall cause Surviving Corporation
to, cause any and all pre-existing condition limitations under any health
plans or long-term disability plans to be waived with respect to Allegiant
Employees and; with respect to health plans their eligible dependents; to
the extent that such conditions were covered by Allegiant's health and
disability plans. National City shall credit, or cause the Surviving
Corporation to credit, employees of Allegiant and Allegiant Subsidiaries
and their eligible dependents with year-to-date deductibles and
out-of-pocket expenses incurred under Allegiant's health plan toward
satisfaction of applicable deductibles and out-of-pocket expenses under
any applicable National City or Surviving Corporation health plan for the
plan year in which the Merger occurs.
(c) Transition. Upon and after the Merger, Allegiant Employees
shall have benefits that in the aggregate are no less favorable than the
benefits enjoyed generally by National City employees working in similar
business lines.
5.5 Access and Information. Upon reasonable notice, Allegiant shall, and
shall cause each Allegiant Subsidiary to, afford to National City and its
representatives (including, without limitation, directors, officers and
employees of National City and its affiliates, and counsel, accountants and
other professionals retained) such access during normal business hours
throughout the period prior to the Effective Time to the books, records
(including, without limitation, tax returns and work papers of independent
auditors), properties, personnel and to such other information as National City
may reasonably request; provided, however, that Allegiant shall not be required
to provide access to any such information or properties if the providing of such
access (i) would be reasonably likely, in the written opinion of counsel, to
result in the loss or impairment of any privilege generally recognized under law
with respect to such information or (ii) would be precluded by any lease,
contract or legally enforceable agreement in existence prior to the date hereof
or by any law, ordinance, regulation, judgment, order, decree, license or permit
of any Governmental Entity. All information furnished by one party to the other
party in connection with this Agreement or the transactions contemplated hereby
shall be kept confidential by such other party (and shall be used by it only in
connection with this Agreement and the transactions contemplated hereby) except
to the extent that such information (x) already is known to such other party
when received from a source not known by the receiving party to be under an
obligation of confidentiality, (y) thereafter becomes lawfully obtainable from
other sources or (z) is required to be disclosed in any non-confidential
document filed with the Commission, the FRB, the Department of Justice or any
other agency or
32
any government. In the event that the transactions contemplated by this
Agreement shall fail to consummate, each party shall promptly cause all copies
of documents or extracts thereof containing information and data as to another
party hereto to be returned to the party that furnished the same or be
destroyed.
5.6 Certain Filings, Consents and Arrangements. National City and
Allegiant shall (a) as soon as practicable make any required filings and
applications required to be filed with Governmental Entities between the date of
this Agreement and the Effective Time, (b) cooperate with one another (i) in
promptly determining whether any other filings are required to be made or
consents, approvals, permits or authorizations are required to be obtained under
any other relevant federal, state or foreign law or regulation and (ii) in
promptly making any such filings, furnishing information required in connection
therewith and seeking timely to obtain any such consents, approvals, permits or
authorizations and (c) deliver to the other parties to this Agreement copies of
the publicly available portions of all such reports promptly after they are
filed.
5.7 State Takeover Statutes. Allegiant shall take all reasonable steps
to (i) exempt Allegiant and the Merger from the requirements of any state
takeover law by action of Allegiant's Board of Directors or otherwise and (ii),
upon the request of National City, assist in any challenge by National City to
the applicability to the Merger of any state takeover law.
5.8 Indemnification. From and after the Effective Time, National City
will assume and honor any obligation as provided for and permitted by applicable
federal and state law Allegiant had immediately prior to the Effective Time with
respect to the indemnification of each person who is now, or has been at any
time prior to the date hereof or who becomes prior to the Effective Time, a
director or officer of Allegiant or any Allegiant Subsidiary (collectively, the
"Indemnitees") arising out of Allegiant's Amended and Restated Articles of
Incorporation or By-laws or any indemnification (to the maximum extent available
thereunder and permitted by applicable law or regulation) against any and all
Losses in connection with or arising out of any claim which is based upon,
arises out of or in any way relates to any actual or alleged condition, act or
omission occurring at or prior to the Effective Time, including any actions
taken to approve and implement this Agreement and the transactions contemplated
hereby, in the Indemnitee's capacity as a director or officer (whether elected
or appointed), of Allegiant or any Allegiant Subsidiary. This Section 5.8 will
be construed as an agreement, as to which the Indemnitees are intended to be
third-party beneficiaries. In addition, at National City's election, for a
period of two years after the Effective Time, National City will provide for
coverage of Indemnitees under National City's directors and officers insurance
policy or, alternatively, cause Allegiant to purchase tail coverage under its
directors and officers insurance policy for such period.
5.9 Additional Agreements. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its reasonable efforts to
take promptly, or cause to be taken promptly, all actions and to do promptly, or
cause to be done promptly, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, including using its
best efforts to obtain all necessary actions or non-actions, extensions,
waivers,
33
consents and approvals from all applicable Governmental Entities, effecting all
necessary registrations, applications and filings and obtaining any required
contractual consents and regulatory approvals.
5.10 Publicity. The initial press release announcing this Agreement shall
be a joint press release and thereafter Allegiant and National City shall
consult with each other in issuing any press releases or otherwise making public
statements with respect to the transactions contemplated hereby and in making
any filings with any Governmental Entity or with any national securities
exchange with respect thereto.
5.11 Registration Statement. National City shall prepare and file the
Registration Statement with the Commission as soon as is reasonably practicable
following receipt of final comments from the Staff of the Commission on the
Proxy Statement (or advice that such Staff will not review such filing) and
shall use all reasonable efforts to have the Registration Statement declared
effective by the Commission as promptly as practicable and to maintain the
effectiveness of such Registration Statement. National City shall also take any
action required to be taken under state blue sky or securities laws in
connection with the issuance of the National City Common Stock pursuant to the
Merger, and Allegiant shall furnish National City all information concerning
Allegiant and the holders of its capital stock and shall take any action as
National City may reasonably request in connection with any such action.
5.12 Proxy. As soon as practicable after the date hereof, Allegiant shall
prepare the Proxy Statement, file it with the Commission, respond to any
comments of the Staff of the Commission, clear the Proxy Statement with the
Staff of the Commission and promptly thereafter mail the Proxy Statement to all
holders of shares of Allegiant Common Stock. National City and Allegiant shall
cooperate with each other in the preparation of the Proxy Statement.
5.13 Stock Exchange Listings. National City shall use its best efforts to
list on the New York Stock Exchange, upon official notice of issuance, the
National City Common Stock to be issued pursuant to the Merger and the
transactions contemplated hereby.
5.14 Shareholders' Meeting. Allegiant shall take all action necessary, in
accordance with applicable law and its Articles of Incorporation and Bylaws, to
convene a special meeting of the holders of Allegiant Common Stock (the
"Allegiant Meeting") as promptly as practicable for the purpose of considering
and taking action upon this Agreement and the transactions contemplated hereby.
Unless the Board of Directors of Allegiant shall have received the written
advice of counsel, reasonably acceptable to National City, to the effect that
making such a recommendation would cause the Board of Directors of Allegiant to
violate its fiduciary duty under applicable law and provided that such advice is
not predicated solely upon the market price of National City Common Stock, the
Board of Directors of Allegiant shall recommend that the holders of Allegiant
Common Stock vote in favor of and approve the Merger and the transactions
contemplated hereby and adopt this Agreement at the Allegiant Meeting.
5.15 Tax-Free Reorganization Treatment. Neither National City nor
Allegiant shall take or cause to be taken any action, whether before or after
the Effective Time, which would
34
disqualify the Merger as a "reorganization" within the meaning of Section 368 of
the Code. Prior to the Effective Time, each party shall cooperate with the other
party to cause the Merger to qualify as a reorganization under Section 368 of
the Code and shall use its reasonable best efforts to obtain the opinion
referred to in Section 7.1(f) and, in connection therewith, each of Allegiant,
National City, and any wholly-owned subsidiary of National City, to the extent
Allegiant is merged into such subsidiary, shall deliver to counsel referred to
in Section 7.1(f) customary and reasonable representation letters in form and
substance reasonably satisfactory to such counsel and National City, as
applicable.
5.16 Provision of Shares. National City shall issue and provide the
shares of National City Common Stock deliverable upon the conversion of
Allegiant Common Stock pursuant to this Agreement, and will provide the cash for
Cash Payments and to be paid in lieu of fractional shares of National City
Common Stock as provided in Section 2.1 above. The shares of National City
Common Stock to be issued and exchanged for shares of Allegiant Common Stock
pursuant to this Agreement will, at the Effective Time, be duly authorized,
validly issued, fully paid and nonassessable and subject to no preemptive
rights.
5.17 Adverse Action. From the date hereof until the Effective Time,
except as expressly contemplated by the Agreement, neither party will, without
the written consent of the other party (which consent will not be unreasonably
withheld or delayed) knowingly take any action that would, or would be
reasonably likely to result in (a) any of its representations and warranties set
forth in the Agreement being or becoming untrue, (b) any of the conditions to
the Merger set forth in Article VII below not being satisfied or (c) a material
violation of any provision of the Agreement except, in each case, as may be
required by applicable law.
VI. CLOSING MATTERS
6.1 The Closing. Subject to satisfaction or waiver of all conditions
precedent set forth in Article VII below, the closing (the "Closing") shall
occur at such location mutually agreeable to the parties and on a date (the
"Closing Date") which is on the first business day after the later of:
(a) the first date on which the Merger may be consummated in
accordance with the approvals of any Governmental Entities; or
(b) the date the required approvals of Allegiant's shareholders
have been obtained; or
(c) such other date to which the parties agree in writing.
If all conditions are determined to be satisfied in all material respects (or
are duly waived) at the Closing, the Closing shall be consummated by the making
of all necessary filings required by all Governmental Entities.
6.2 Documents and Certificates. National City and Allegiant shall use
their respective best efforts, on or prior to Closing, to execute and deliver
all such instruments, documents or certificates as may be necessary or
advisable, on the advice of counsel, for the consummation
35
at the Closing of the transactions contemplated by this Agreement to occur as
soon as practicable.
VII. CONDITIONS
7.1 Conditions to Each Party's Obligations to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of the following conditions:
(a) The Merger and the transactions contemplated hereby shall have
been approved and adopted by the requisite vote of the holders of
Allegiant Common Stock.
(b) The National City Common Stock issuable in the Merger and the
transactions contemplated hereby shall have been authorized for listing on
the New York Stock Exchange, upon official notice of issuance.
(c) All authorizations, consents, orders or approvals of, and all
expirations of waiting periods imposed by, any Governmental Entity
(collectively, "Consents") which are necessary for the consummation of the
Merger, (other than immaterial Consents, the failure to obtain which would
not be materially adverse to, National City and National City's
subsidiaries or Allegiant and Allegiant Subsidiaries taken as a whole)
shall have been obtained or shall have occurred and shall be in full force
and effect at the Effective Time; provided, however, that no such
authorization, consent, order or approval shall be deemed to have been
received if it shall include any conditions or requirements which would so
materially adversely impact the economic or business benefits of the
transactions contemplated by this Agreement so as to render inadvisable in
the reasonable opinion of National City the consummation of the Merger.
(d) The Registration Statement shall have become effective in
accordance with the provisions of the Securities Act. No stop order
suspending the effectiveness of the Registration Statement shall have been
issued by the Commission and remain in effect.
(e) No temporary restraining order, preliminary or permanent
injunction or other order by any federal or state court in the United
States which prevents the consummation of the Merger shall have been
issued and remain in effect.
(f) Xxxxxxxx Xxxxxx LLP counsel to Allegiant, shall have delivered
to Allegiant and National City their opinion, dated the day of the
Effective Time, which shall provide that it may be relied upon by National
City and the shareholders of Allegiant substantially to the effect that,
on the basis of facts, representations and assumptions set forth in such
opinion which are consistent with the state of facts existing at the
Effective Time, the Merger will be treated for federal income tax purposes
as a reorganization within the meaning of Section 368(a) of the Code and
that, accordingly: (i) each of Allegiant, National City and any
wholly-owned subsidiary of National City, to the extent Allegiant is
merged into such subsidiary, are each parties to a reorganization within
the meaning of Section 368(a) of the Code; (ii) no gain or loss will be
recognized by National
36
City or Allegiant as a result of the Merger; (iii) no gain or loss will be
recognized by the shareholders of Allegiant pursuant to the Merger (except
with respect to consideration received as a result of cash paid in lieu of
fractional shares, cash paid as a result of the exercise of dissenters
rights or Cash Payments made to such shareholders); (iv) the tax basis of
the shares of National City Common Stock received by shareholders who
exchange all of their shares of Allegiant Common Stock solely for shares
of National City Common Stock in the Merger will be the same as the tax
basis of the shares of Allegiant Common Stock surrendered in exchange
therefor (reduced by any cash received and increased by the amount treated
as a dividend, if any, and by the amount of gain recognized on the
exchange (not including any portion of the gain treated as a dividend);
and (v) the holding period of the shares of National City Common Stock
received in the Merger will include the period during which the shares of
Allegiant Common Stock surrendered in exchange therefore were held,
provided such shares of Allegiant Common Stock were held as capital assets
at the Effective Time. In rendering such opinion, counsel may rely upon
representations contained in certificates of officers of Allegiant,
National City, and others.
7.2 Conditions to Obligation of Allegiant to Effect the Merger. The
obligation of Allegiant to effect the Merger shall be subject to the fulfillment
or waiver at or prior to the Effective Time of the additional following
conditions:
(a) National City shall have performed in all material respects
its covenants contained in this Agreement required to be performed at or
prior to the Effective Time.
(b) The representations and warranties of National City contained
in this Agreement shall be true and correct when made and the
representations and warranties set forth in Article III above shall be
true and correct as of the Effective Time as if made at and as of such
time, except: (i) as expressly contemplated or permitted by this
Agreement; (ii) for representations and warranties relating to a time or
times other than the Effective Time which were or will be true and correct
at such time or times; and (iii) where the failure or failures of such
representations and warranties to be so true and correct, individually or
in the aggregate, does not result or would not result in a Material
Adverse Effect.
(c) National City shall have furnished Allegiant a certificate
dated the date of the Closing, signed by the Chief Executive Officer and
Chief Financial Officer of National City that, to the best of their
knowledge and belief after due inquiry, the conditions set forth in
Subsections 7.2(a) and 7.2(b) above have been satisfied.
7.3 Conditions to Obligation of National City to Effect the Merger. The
obligation of National City to effect the Merger shall be subject to the
fulfillment or waiver at or prior to the Effective Time of the additional
following conditions:
(a) Allegiant shall have performed in all material respects its
covenants contained in this Agreement required to be performed at or prior
to the Effective Time.
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(b) The representations and warranties of Allegiant contained in
this Agreement shall be true and correct when made and the representations
and warranties set forth in Article IV above shall be true and correct as
of the Effective Time as if made on and as of such time, except: (i) as
expressly contemplated or permitted by this Agreement; (ii) for
representations and warranties relating to a time or times other than the
Effective Time which were or will be true and correct at such time or
times; and (iii) where the failure or failures of such representations and
warranties to be so true and correct, individually or in the aggregate,
does not result or would not result in a Material Adverse Effect.
(c) Allegiant shall have furnished National City a certificate
dated the date of the Closing signed by the Chief Executive Officer and
Chief Financial Officer of Allegiant that, to the best of their knowledge
and belief after due inquiry, the conditions set forth in Subsections
7.3(a) and 7.3(b) above have been satisfied.
VIII. MISCELLANEOUS
8.1 Termination. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval by the shareholders of
Allegiant:
(a) by mutual consent of the Board of Directors of National City
and the Board of Directors of Allegiant;
(b) by National City or Allegiant if the Merger shall not have
been consummated on or before September 30, 2004;
(c) by National City if this Agreement was not approved at the
Allegiant Meeting or any adjournment thereof;
(d) by Allegiant if any of the conditions specified in Sections
7.1 and 7.2 above have not been met or waived by Allegiant at such time as
such condition can no longer be satisfied, provided that with respect to
any breach by National City of any of its representations, warranties or
covenants hereunder cannot be or is not cured within fifteen (15) days
after written notice of such breach is given by Allegiant to National
City;
(e) by National City if any of the conditions specified in
Sections 7.1 and 7.3 above have not been met or waived by National City at
such time as such condition can no longer be satisfied, provided that with
respect to any breach by Allegiant of any of its representations,
warranties or covenants hereunder and such breach cannot be or is not
cured within fifteen (15) days after written notice of such breach is
given by National City to Allegiant; or
(f) by National City if (i) the management of Allegiant or its
board of directors, for any reason, fails to call and hold within 40 days
of the approval for use of the Proxy Statement the Allegiant Meeting to
consider and approve this Agreement and the transactions contemplated
hereby or if such Allegiant Meeting is adjourned, then
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within 20 days of such adjournment, (ii) the board of directors of
Allegiant does not publicly recommend in the Proxy Statement that
Allegiant's shareholders approve and adopt this Agreement, (iii) after
recommending in the Proxy Statement that such shareholders approve and
adopt this Agreement, the board of directors of Allegiant shall have
withdrawn, modified or amended such recommendation in any manner adverse
to National City, or (iv) the board of directors of Allegiant shall have
authorized, recommended, proposed or publicly announced its intention to
authorize recommend or propose, to engage in any of the following
involving Allegiant or any Allegiant Subsidiary: any disclosure of
confidential information (as described in Section 5.5 above) concerning
Allegiant or any Allegiant subsidiaries to any third person, proposal or
offer from any person relating to any direct or indirect acquisition or
purchase by such person of Allegiant, any Allegiant Subsidiary or any
business line of Allegiant or any equity securities of Allegiant or of any
Allegiant Subsidiary, any tender offer or exchange offer that if
consummated would result in any person beneficially owning 10% or more of
any class of equity securities of Allegiant or any Allegiant Subsidiary,
any merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving Allegiant or any
Allegiant Subsidiary, other than the transactions contemplated by this
Agreement ("Competing Proposal").
8.2 Non-Survival of Representations, Warranties and Agreements. The
representations and warranties or covenants in this Agreement will terminate at
the Effective Time or the earlier termination of this Agreement pursuant to
Section 8.1 above, as the case may be; provided, however, that if the Merger is
consummated, Sections 1.6, 2.1 through 2.4, 5.4, 5.8, 8.2 and 8.5 hereof will
survive the Effective Time to the extent contemplated by such Sections;
provided, further, that the last two sentences of Section 5.5 and all of
Sections 8.5 and 8.10 hereof will in all events survive any termination of this
Agreement.
8.3 Waiver and Amendment. Subject to applicable provisions of the DGCL
and MRS, any provision of this Agreement may be waived at any time by the party
which is, or whose stockholders or shareholders are, entitled to the benefits
thereof, and this Agreement may be amended or supplemented at any time, provided
that no amendment will be made after any shareholder approval of the Merger
which reduces or changes the form of the Merger Consideration without further
shareholder approval. No such waiver, amendment or supplement will be effective
unless in a writing that makes express reference to this Section 8.3 and is
signed by the party or parties sought to be bound thereby.
8.4 Entire Agreement. This Agreement together with the National City
Disclosure Letter and Allegiant Disclosure Letter contain the entire agreement
among National City and Allegiant with respect to the Merger and the other
transactions contemplated hereby and thereby, and supersedes all prior
agreements among the parties with respect to such matters.
8.5 Applicable Law; Consent to Jurisdiction. This Agreement will be
governed by and construed in accordance with the laws of the State of Delaware
except to the extent laws of the State of Missouri govern the Merger. National
City and Allegiant consent to personal jurisdiction in any action brought in any
federal or state court within the city of Cleveland, Ohio, having subject matter
jurisdiction in the matter for purposes of any action arising out of this
39
Agreement.
8.6 Certain Definitions; Headlines. (a) For purposes of this Agreement,
the term:
(i) "Affiliate", "associate" and "Significant Subsidiary" shall
have the respective meanings ascribed to such terms in Rule 12b-2 of the
General Rules and Regulations under the Exchange Act, as in effect on the
date hereof.
(ii) "Control" (including the terms "controlled by" and "under
common control with") means the possession, directly or indirectly or as
trustee or executor, of the power to direct or cause the direction of the
management or policies of a person, whether through the ownership of
stock, as trustee or executor, by contract or credit arrangement or
otherwise.
(iii) "Fed Approval Date" means the day the FRB issues an order
approving consummation of the Merger.
(iv) "Market Price" means the average of the per share closing
prices on the New York Stock Exchange of National City Common Stock for
the ten (10) consecutive trading days ending at the end of the third
trading day immediately preceding the Effective Time.
(v) "Material Adverse Effect" means an event, change or occurrence
which has a material negative impact on the financial condition,
businesses or results of operations of Allegiant and its subsidiaries,
taken as a whole, or National City and its subsidiaries, taken as a whole,
as the case may be, or the ability of Allegiant or National City, as the
case may be, to consummate the transactions contemplated hereby provided,
however, a Material Adverse Effect does not include a material adverse
change in general economic, political or financial conditions, including
without limitation as a result of terrorist activities after the date
hereof (or the effect of international conditions on the financial markets
in the United States) that effects the banking industry generally. The
effect of any action taken by Allegiant solely pursuant to Subsection
5.2(f) above shall not be taken into consideration in determining whether
any Material Adverse Effect has occurred.
(vi) "Person" means an individual, corporation, partnership,
association, trust limited liability company or unincorporated
organization;
(vii) "Subsidiary" of Allegiant, National City or any other person
means, except where the context otherwise requires, any corporation,
partnership, trust or similar association of which Allegiant, National
City or any other person, as the case may be (either alone or through or
together with any other subsidiary), owns, directly or indirectly, more
than 50% of the stock or other equity interests, the holders of which are
generally entitled to vote for the election of the board of directors or
other governing body of such corporation.
(b) The descriptive headings contained in this Agreement are for
40
convenience and reference only and will not affect in any way the meaning or
interpretation of this Agreement.
(c) Unless the context of this Agreement expressly indicates otherwise,
(i) any singular term in this Agreement will include the plural and any plural
term will include the singular and (ii) the term section or schedule will mean a
section or schedule of or to this Agreement.
8.7 Notices. All notices, consents, requests, demands and other
communications hereunder will be in writing and will be deemed to have been duly
given or delivered if delivered personally, telexed with receipt acknowledged,
mailed by registered or certified mail return receipt requested, sent by
facsimile with confirmation of receipt, or delivered by a recognized commercial
courier addressed as follows:
If to Allegiant to:
Allegiant Bancorp, Inc.
00000 Xxxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: President and Chief Executive Officer
Fax No. (000) 000-0000
With a copy to:
Xxxxxxxx Xxxxxx LLP
One XX Xxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx, Esq.
Fax No. (000) 000-0000
If to National City to:
National City Corporation
P. O. Xxx 0000
Xxxxxxxxx, Xxxx 00000-0000
Attention: Chairman of the Board
Fax No. (000) 000-0000
With a copy to:
National City Corporation
Law Department
P. O. Xxx 0000
Xxxxxxxxx, Xxxx 00000-0000
Attention: General Counsel
Fax No. (000) 000-0000
or to such other address as any party may have furnished to the other
parties in writing in accordance with this Section 8.7.
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8.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original but all of which
together will constitute but one agreement.
8.9 Parties in Interest; Assignment. Except for Sections 2.1 through 2.4
above (which is intended to be for the benefit of the shareholders of Allegiant
and holders of Outstanding Options under Allegiant Option Plans to the extent
contemplated thereby and their beneficiaries, and may be enforced by such
persons) and Sections 5.4 and 5.8 hereof (which are intended to be for the
benefit of directors, officers or employees to the extent contemplated thereby
and their beneficiaries, and may be enforced by such persons), this Agreement is
not intended to nor will it confer upon any other person (other than the parties
hereto) any rights or remedies. Except as herein expressly provided, without the
prior written consent of the other parties to this Agreement neither National
City nor Allegiant shall assign any rights or delegate any obligations under
this Agreement. Any such purported assignment or delegation made without prior
consent of the other parties hereto shall be null and void.
8.10 Effect of Termination; Expenses and Breakup Fee.
(a) In the event of termination of this Agreement by either
National City or Allegiant as provided in Section 8.1 hereof, this
Agreement shall forthwith become void and have no effect except (i) as set
forth in this Section 8.10, Section 8.5 and the last two sentences of
Section 5.5, which shall survive any termination of this Agreement, and
(ii) notwithstanding anything to the contrary contained in this Agreement,
no party shall be relieved or released from any liabilities or damages
arising out of its willful or intentional breach of any provision of this
Agreement.
(b) In recognition of the efforts, expenses and other
opportunities foregone by National City while structuring and pursuing the
Merger, the parties hereto agree that Allegiant shall pay to National City
a termination fee of $25.0 million (the "Breakup Fee") in the manner set
forth below, and shall reimburse National City for reasonable expenses
incurred in connection with this Agreement and the transactions
contemplated herein, if:
(i) this Agreement is terminated by National City pursuant
to Section 8.1(c) above, then within two (2) business days after the
effective date of termination, Allegiant shall reimburse National
City for reasonable expenses incurred in connection with this
Agreement and the transactions contemplated herein (the "National
City Out Of Pocket Expenses"). If within twenty-four (24) months
following the effective date of termination (the "Post-Termination
Period"), Allegiant or any Allegiant Subsidiary enters into any
agreement, contract, letter of intent or understanding with a third
person relating to any direct or indirect acquisition or purchase by
such person of Allegiant, any Allegiant Subsidiary or any business
line of Allegiant or any equity securities of Allegiant or of any
Allegiant Subsidiary, any tender offer or exchange offer that if
consummated would result in any person beneficially owning 10% or
more of any class of equity securities of Allegiant or any Allegiant
Subsidiary, any
42
merger, consolidation, business combination, recapitalization,
liquidation, dissolution or similar transaction involving Allegiant
or any Allegiant Subsidiary (a "Major Deal"), then within two
business days after Allegiant or any Allegiant Subsidiary enters
into such agreement, contract, letter of intent or understanding for
a Major Deal, Allegiant shall remit to National City an amount equal
to the Breakup Fee less the amount of National City Out of Pocket
Expenses actually received by National City pursuant to this Section
8.10(b)(i);
(ii) this Agreement is terminated by National City pursuant
to Section 8.1(e) above, then Allegiant shall indemnify National
City from and against all costs or expenses (including, without
limitation, reasonable attorneys' and advisor fees), losses and
damages actually suffered or incurred by National City and its
subsidiaries (collectively, "Losses") arising from or in connection
with the termination of this Agreement. If within the
Post-Termination Period, Allegiant or any Allegiant Subsidiary
enters into any agreement, contract, letter of intent or
understanding with a third person relating to any Major Deal, then
within two business days after Allegiant or any Allegiant Subsidiary
enters into such agreement, contract, letter of intent or
understanding for a Major Deal, Allegiant shall remit to National
City an amount equal to the Breakup Fee less the amount paid by
Allegiant to National City for Losses pursuant to this Section
8.10(b)(ii);
(iii) after a Competing Proposal has been publicly announced
or otherwise communicated or made known to the senior management of
Allegiant or the Allegiant Board of Directors (or any person shall
have publicly announced, communicated or made known an intention,
whether or not conditional, to make a Competing Proposal) at any
time after the date of this Agreement and prior to the taking of the
vote of the shareholders of Allegiant contemplated by this Agreement
at the Allegiant Meeting and this Agreement is terminated by
National City pursuant to Section 8.1(f)(i), (ii) or (iii) above,
then within two (2) business days after the effective date of
termination, Allegiant shall remit to National City the Breakup Fee;
and
(iv) after a Competing Proposal has been publicly announced
or otherwise communicated or made known to the senior management of
Allegiant or the Allegiant Board of Directors (or any person shall
have publicly announced, communicated or made known an intention,
whether or not conditional, to make a Competing Proposal) at any
time after the date of this Agreement and prior to the taking of the
vote of the shareholders of Allegiant contemplated by this Agreement
at the Allegiant Meeting and this Agreement is terminated by
National City pursuant to Section 8.1(f)(iv) above and the
shareholders of Allegiant do not approve the Merger at the Allegiant
Meeting or any adjournment thereof as contemplated hereunder, then
within two (2) business days after the effective date of
termination, Allegiant shall remit to National City the Breakup Fee.
Any amount that becomes payable pursuant to this Section 8.10(b)
shall be paid
43
by wire transfer of immediately available funds to an account designated
by National City.
(c) If the Merger is consummated, all costs and expenses incurred
in connection with this Agreement and the transactions contemplated hereby
will be paid by the Surviving Corporation.
(d) Nothing contained in Section 8.10(b) above shall constitute or
shall be deemed to constitute liquidated damages for the willful breach by
a party of the terms of this Agreement or otherwise limit the rights of
the non-breaching party.
8.11 Enforcement of the 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 their specific terms or were
otherwise breached. It is accordingly agreed that the parties hereto will be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof.
8.12 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement will nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party hereto. Upon any such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto will
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated by this Agreement are consummated to the
extent possible.
8.13 Update and Supplement to Disclosure Letters. Allegiant and National
City shall be permitted to update and supplement their respective Disclosure
Letters so as to disclose exceptions to one or more representations or
warranties contained in Article III hereof in the case of National City and
Article IV hereof in the case of Allegiant which are a result of events which
occur after the date hereof; provided, however, that, anything herein to the
contrary notwithstanding, (i) no exceptions or other information set forth on
any such updated or supplemented Disclosure Letter shall be deemed to cure any
representation or warranty which was not true and correct as of the date of this
Agreement, and (ii) the exceptions and other information set forth on any such
updated or supplemented Disclosure Letter shall not be taken into consideration
in determining, for purposes of this Agreement, whether the conditions set forth
in Section 7.3 in the case of National City, and Section 7.2 hereof in the case
of Allegiant shall have been satisfied, and (iii) this Section 8.13 shall not
relieve any party of its obligations under any covenant set forth herein.
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IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
representatives to execute this Agreement as of the date first above written.
ALLEGIANT BANCORP, INC. ("Allegiant")
By: /s/ Xxxxx X. Xxxxx
________________________________
Xxxxx X. Xxxxx
Its: CEO
NATIONAL CITY CORPORATION ("National City")
By: /s/ J. Xxxxxxx Xxxxxxx
________________________________
J. Xxxxxxx Xxxxxxx
Its: Executive Vice President
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