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EXHIBIT 2
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AGREEMENT AND PLAN OF MERGER
BETWEEN
SOUTHSIDE BANCSHARES CORP.,
A MISSOURI CORPORATION,
AND
ALLEGIANT BANCORP, INC.,
A MISSOURI CORPORATION
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APRIL 30, 2001
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TABLE OF CONTENTS
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ARTICLE I THE MERGER......................................................................................1
1.01 The Merger......................................................................................1
1.02 Closing.........................................................................................1
1.03 Effective Time..................................................................................2
1.04 Additional Actions..............................................................................2
1.05 Articles of Incorporation and By-Laws...........................................................2
1.06 Board of Directors and Officers; Executive Offices..............................................2
1.07 Conversion of Securities........................................................................3
1.08 Conversion Election Procedures..................................................................3
1.09 Exchange Procedures.............................................................................8
1.10 No Fractional Shares...........................................................................10
1.11 Dissenting Shares..............................................................................10
1.12 Closing of Stock Transfer Books................................................................10
1.13 Anti-Dilution..................................................................................11
1.14 Tax Consequences...............................................................................11
1.15 Material Adverse Effect........................................................................11
1.16 Knowledge......................................................................................11
1.17 Disclosure Schedules; Standard.................................................................12
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SOUTHSIDE....................................................12
2.01 Organization and Authority.....................................................................12
2.02 Subsidiaries...................................................................................13
2.03 Capitalization.................................................................................13
2.04 Authorization..................................................................................14
2.05 Southside Financial Statements.................................................................15
2.06 Southside Reports..............................................................................15
2.07 Title to and Condition of Assets...............................................................16
2.08 Real Property..................................................................................16
2.09 Taxes..........................................................................................18
2.10 Material Adverse Effect........................................................................18
2.11 Loans, Commitments and Contracts...............................................................18
2.12 Absence of Defaults............................................................................20
2.13 Litigation and Other Proceedings...............................................................20
2.14 Directors' and Officers' Insurance.............................................................21
2.15 Compliance with Laws...........................................................................21
2.16 Labor..........................................................................................22
2.17 Material Interests of Certain Persons..........................................................22
2.18 Allowance for Loan and Lease Losses; Non-Performing Assets; Financial Assets...................22
2.19 Employee Benefits Plans........................................................................23
2.20 Conduct of Southside Since December 31, 2000...................................................25
2.21 Absence of Undisclosed Liabilities.............................................................25
2.22 Joint Proxy Statement/Prospectus...............................................................25
2.23 Registration Obligations.......................................................................26
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2.24 Tax and Regulatory Matters.....................................................................26
2.25 Brokers and Finders............................................................................26
2.26 Interest Rate Risk Management Instruments......................................................26
ARTICLE III REPRESENTATIONS AND WARRANTIES OF ALLEGIANT....................................................26
3.01 Organization and Authority.....................................................................27
3.02 Subsidiaries...................................................................................27
3.03 Capitalization of Allegiant....................................................................27
3.04 Authorization..................................................................................28
3.05 Allegiant Financial Statements.................................................................29
3.06 Allegiant Reports..............................................................................29
3.07 Environmental Matters..........................................................................29
3.08 Taxes..........................................................................................29
3.09 Loans, Commitments and Contracts...............................................................30
3.10 Absence of Defaults............................................................................32
3.11 Litigation and Other Proceedings...............................................................32
3.12 Compliance with Laws...........................................................................32
3.13 Allowance for Loan and Lease Losses; Non-Performing Assets; Financial Assets...................34
3.14 Absence of Undisclosed Liabilities.............................................................34
3.15 Material Adverse Effect........................................................................35
3.16 Joint Proxy Statement/Prospectus...............................................................35
3.17 Tax and Regulatory Matters.....................................................................35
3.18 Brokers and Finders............................................................................35
3.19 No Negotiations................................................................................35
3.20 Change of Control Payments.....................................................................35
ARTICLE IV CONDUCT OF BUSINESS PRIOR TO THE EFFECTIVE TIME................................................36
4.01 Conduct of Businesses Prior to the Effective Time..............................................36
4.02 Forbearances of Southside......................................................................36
4.03 Acquisition Proposals; Board Recommendation....................................................38
4.04 Forbearances of Allegiant......................................................................40
ARTICLE V ADDITIONAL AGREEMENTS..........................................................................40
5.01 Access and Information; Due Diligence..........................................................40
5.02 Regulatory Matters.............................................................................41
5.03 Shareholder Approval...........................................................................41
5.04 Current Information............................................................................42
5.05 Conforming Entries.............................................................................42
5.06 Agreements of Affiliates.......................................................................43
5.07 Expenses.......................................................................................43
5.08 Miscellaneous Agreements and Consents..........................................................43
5.09 Employee Agreements and Benefits...............................................................44
5.10 Press Releases.................................................................................45
5.11 State Takeover Statutes........................................................................45
5.12 Directors' and Officers' Indemnification and Insurance.........................................45
5.13 Tax Matters....................................................................................46
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5.14 Employee Stock Options.........................................................................46
5.15 Exemption from Liability under Section 16(b): Allegiant Insiders..............................47
5.16 Exemption from Liability under Section 16(b): Southside Insiders..............................47
5.17 No Negotiations................................................................................48
ARTICLE VI CONDITIONS.....................................................................................48
6.01 Conditions to Each Party's Obligation To Effect the Merger.....................................48
6.02 Conditions to Obligations of Southside.........................................................48
6.03 Conditions to Obligations of Allegiant.........................................................49
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER..............................................................50
7.01 Termination....................................................................................50
7.02 Effect of Termination..........................................................................51
7.03 Amendment......................................................................................52
7.04 Waiver.........................................................................................53
ARTICLE VIII GENERAL PROVISIONS.............................................................................53
8.01 Non-Survival of Representations, Warranties and Agreements.....................................53
8.02 Indemnification................................................................................53
8.03 No Assignment; Successors and Assigns..........................................................56
8.04 Severability...................................................................................56
8.05 No Implied Waiver..............................................................................56
8.06 Headings.......................................................................................56
8.07 Entire Agreement...............................................................................56
8.08 Counterparts...................................................................................56
8.09 Notices........................................................................................56
8.10 Governing Law..................................................................................57
APPENDIX I - Defined Terms
LIST OF EXHIBITS
Exhibits A-1 and A-2 - Voting Agreements
Exhibit B - Agreement of Affiliates
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this "Agreement"), is made and
entered into as of April 30, 2001 by and between SOUTHSIDE BANCSHARES CORP., a
Missouri corporation ("Southside"), and ALLEGIANT BANCORP, INC., a Missouri
corporation ("Allegiant").
WHEREAS, each of Southside and Allegiant is registered as a bank
holding company under the Bank Holding Company Act of 1956, as amended (the
"BHCA"); and
WHEREAS, the respective Boards of Directors of Southside and Allegiant
have approved the merger of Allegiant with and into Southside (the "Merger")
pursuant to the terms and subject to the conditions contained in this Agreement;
and
WHEREAS, as an inducement to Allegiant to enter into this Agreement,
concurrently with the execution hereof, each director and/or executive officer
of Southside in his or her capacity as a shareholder of Southside has entered
into a Voting Agreement with Allegiant substantially in the form attached hereto
as Exhibit A-1 (each a "Southside Voting Agreement" and, together, the
"Southside Voting Agreements"), pursuant to which, among other things, each such
shareholder has agreed to vote in favor of this Agreement, the Merger and the
transactions contemplated hereby and thereby; and
WHEREAS, as an inducement to Southside to enter into this Agreement,
concurrently with the execution hereof, each director and/or executive officer
of Allegiant in his or her capacity as a shareholder of Allegiant, has entered
into a Voting Agreement with Southside substantially in the form attached hereto
as Exhibit A-2 (each a "Allegiant Voting Agreement;" and, together, the
"Allegiant Voting Agreements" and, together with the Southside Voting
Agreements, the "Voting Agreements"), pursuant to which, among other things,
each such shareholder has agreed to vote in favor of this Agreement, the Merger
and the transactions contemplated hereby; and
WHEREAS, all terms defined herein are set forth on Appendix I hereto;
and
WHEREAS, the parties desire to provide certain undertakings,
conditions, representations, warranties and covenants in connection with the
transactions contemplated by this Agreement.
NOW THEREFORE, in consideration of the premises and the
representations, warranties and agreements herein contained, the parties agree
as follows:
ARTICLE I
THE MERGER
1.01 The Merger. Subject to the terms and conditions of this Agreement,
Allegiant shall be merged with and into Southside in accordance with Chapter 351
of the Missouri Revised Statutes (the "Missouri Statute"), and the separate
corporate existence of Allegiant shall cease. Southside shall be the surviving
corporation in the Merger (sometimes hereinafter referred to as the "Surviving
Corporation") and shall continue to be governed by the laws of the State of
Missouri.
1.02 Closing. The closing (the "Closing") of the Merger, unless the
parties hereto shall otherwise mutually agree, shall take place at the offices
of Xxxxxxxx Xxxxxx LLP in St. Louis, Missouri, at 10:00 a.m., local time, on the
date that the Effective Time occurs (the "Closing Date").
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1.03 Effective Time. The Merger shall become effective (the "Effective
Time") upon the filing of Articles of Merger with the Office of the Secretary of
State of the State of Missouri. Unless otherwise mutually agreed in writing by
Allegiant and Southside, subject to the terms and conditions of this Agreement,
the Effective Time shall occur on such date as Allegiant shall notify Southside
in writing (such notice to be at least five (5) business days in advance of the
Effective Time) but (A) not earlier than the satisfaction or waiver of all
conditions set forth in Article VI (the "Approval Date") and (B) not later than
the last business day of the calendar month during which the Approval Date
occurs; provided, however, that Allegiant may postpone the Effective Time to the
earliest time which will result in shareholders of Southside receiving a
quarterly dividend only from Southside or only from Surviving Corporation (in
the case of those shareholders of Southside who receive Surviving Corporation
Common Stock in the Merger), but not from both, for the calendar quarter in
which the Effective Time occurs. On the Closing Date, Southside and Allegiant
will cause the Merger to be consummated by delivering to the Secretary of State
of the State of Missouri, for filing, Articles of Merger, in such form as
required by, and executed and acknowledged in accordance with, the relevant
provisions of the Missouri Statute.
1.04 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
(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 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 do 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.
1.05 Articles of Incorporation and By-Laws. Subject to the terms and
conditions of this Agreement, the Articles of Incorporation and By-Laws of the
Surviving Corporation shall be in the form to be mutually agreed upon by the
parties hereto as promptly as practicable following the date hereof and in any
event prior to the mailing of the Joint Proxy Statement/Prospectus; provided,
that such Articles of Incorporation and By-Laws shall be substantially identical
to the Articles of Incorporation and By-Laws of Allegiant, with such changes as
approved by Allegiant; provided, further, that the Articles of Incorporation
shall provide that the number of authorized shares of common stock shall be
30,000,000, par value $0.01 per share.
1.06 Board of Directors and Officers; Executive Offices. At the
Effective Time, the directors and officers of Allegiant immediately prior to the
Effective Time shall be the directors and officers, respectively, of the
Surviving Corporation following the Merger, and such directors and officers
shall hold office in accordance with Surviving Corporation's By-Laws and
applicable law. Effective as of the Effective Time, the two persons (a) who are
directors of Southside as of the date hereof, (b) who, immediately after the
Effective Time, hold the greatest number of shares of Surviving Corporation
Common Stock among all of the directors of Southside (which, for this purpose,
shall include shares of Surviving Corporation Common Stock issuable upon the
exercise of the Southside Employee Stock Options immediately after the Effective
Time) and (c) who are approved by Allegiant, such approval not to be
unreasonably withheld, shall be elected to serve on Surviving Corporation's
Board of Directors for terms expiring at Surviving Corporation's annual meetings
in 2003 and 2004, respectively. Southside may replace either or both of the
nominees prior to the Effective Date, subject to Allegiant's consent, not to be
unreasonably withheld. Immediately after the Effective Time, the locations of
the headquarters and principal executive offices of the Surviving Corporation
shall be those of Allegiant prior to the Effective Time.
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1.07 Conversion of Securities. At the Effective Time, by virtue of the
Merger and without any action on the part of Allegiant, Southside or the holder
of any of the following securities:
(a) subject to Sections 1.08(f), 1.10, 1.11 and 1.13 hereof,
each share of common stock, $1.00 par value, of Southside and the
associated "Rights" under the Rights Agreement (the "Southside Rights
Agreement"), dated as of May 27, 1993, as amended, by and between
Mellon Investor Services LLC (as successor to Boatmen's Trust Company)
as Rights Agent and Southside (collectively, the "Southside Common
Stock") issued and outstanding at the Effective Time shall cease to be
outstanding and shall be converted into and become one of the
following:
(i) the right to receive an amount in cash equal to
$14.00 (the "Cash Distribution"); or
(ii) the right to receive 1.39 shares of common
stock, $0.01 par value, of Surviving Corporation (the
"Surviving Corporation Common Stock") (the "Stock
Distribution"); or
(iii) the right to receive a combination of the Cash
Distribution and Stock Distribution (the "Combined
Distribution");
as the holder thereof shall elect or be deemed to have elected pursuant
to Section 1.08 of this Agreement (the aggregate of the Cash
Distributions, Stock Distributions and the Combined Distributions,
payable and/or issuable upon conversion of the Southside Common Stock
pursuant to this Agreement at the Effective Time is referred to as the
"Southside Merger Consideration");
(b) subject to Section 1.11, each share of the common stock,
$0.01 par value, of Allegiant (the "Allegiant Common Stock") issued and
outstanding immediately prior to the Effective Time, shall be converted
into one share of the Surviving Corporation Common Stock (the shares of
Surviving Corporation Common Stock issuable at the Effective Time
pursuant to the conversion of the Allegiant Common Stock pursuant to
this Agreement is referred to as the "Allegiant Merger Consideration"
and, together with the Southside Merger Consideration, the "Merger
Consideration"); and
(c) shares of Southside Common Stock or Allegiant Common Stock
held by Southside or any of its wholly owned "Subsidiaries" (as defined
in Rule 1-02 of Regulation S-X promulgated by the Securities and
Exchange Commission (the "SEC")), or by Allegiant or any of its wholly
owned Subsidiaries, in each case other than in a fiduciary capacity or
as a result of debts previously contracted, shall be canceled and shall
not be exchanged at or after the Effective Time for the Merger
Consideration. In addition, no Dissenting Shares shall be converted
pursuant to this Section 1.07 but shall be treated in accordance with
the procedures set forth in Section 1.11 of this Agreement.
1.08 Conversion Election Procedures.
(a) Concurrently with the mailing to the shareholders of
Southside and Allegiant of the Joint Proxy Statement/Prospectus,
including the prospectus contained in the Registration Statement on
Form S-4 to be filed with the SEC by Southside for the purpose of
registering the shares of Surviving Corporation Common Stock to be
exchanged for Southside and Allegiant
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Common Stock pursuant to the provisions of this Agreement (the
"Registration Statement"), Allegiant shall cause the Exchange Agent to
mail to each holder of record of Southside Common Stock a form of
election (an "Election Form") on which such holder shall make the
election as provided for in Section 1.08(b) of this Agreement.
Allegiant also shall cause an Election Form and other appropriate
materials for the purpose of making the election provided for in
Section 1.08(b) of this Agreement to be sent to each holder of
Southside Common Stock who Southside advises Allegiant (pursuant to
Section 1.12(b)) has become a holder of Southside Common Stock after
the record date of the special meeting of shareholders of Southside
called pursuant to Section 5.03(a). "Exchange Agent" shall mean UMB
Bank, N.A. or such other bank or trust company or affiliate thereof
selected by Allegiant and reasonably acceptable to Southside to effect
the exchange of certificates formerly representing shares of Southside
Common Stock (the "Certificates") for the Southside Merger
Consideration.
(b) Each Election Form shall specify the amount of each type
of Southside Merger Consideration elected by each holder of Southside
Common Stock in the form of either the Cash Distribution, the Stock
Distribution or the Combined Distribution and shall permit each such
holder to propose to receive, as provided in Section 1.07 of this
Agreement, (i) the Cash Distribution (in which case, such holder's
shares of Southside Common Stock shall be deemed to be and shall be
referred to herein as "Cash Election Shares"), (ii) the Stock
Distribution (in which case, such holder's shares of Southside Common
Stock shall be deemed to be and shall be referred to herein as "Stock
Election Shares"), or (iii) the Combined Distribution (in which case,
such holder's shares of Southside Common Stock shall be deemed to be
and shall be referred to herein as "Combined Election Shares"). If a
holder chooses a Combined Distribution, then the holder shall specify
on the Election Form the percentage of the Combined Distribution
requested to be received as a Cash Distribution and the percentage of
the Combined Distribution to be received as a Stock Distribution.
(c) Any shares of Southside Common Stock with respect to which
the holder thereof shall not, as of the Election Deadline, have made an
election to receive either the Cash Distribution, the Stock
Distribution or the Combined Distribution (such holder's shares being
deemed to be and shall be referred to herein as "No Election Shares")
by submitting to the Exchange Agent an effective, properly completed
Election Form, shall be deemed to be Stock Election Shares, except as
set forth in Section 1.08(f) of this Agreement. "Election Deadline"
shall mean 5:00 P.M., local time, on the date of the special meeting of
shareholders of Southside called to vote upon this Agreement, the
Merger and the transactions contemplated thereby.
(d) For purposes of Section 1.08(f) of this Agreement, (i) any
Southside Dissenting Shares shall be deemed to be Cash Election Shares;
provided, however, that such Southside Dissenting Shares shall in all
cases be payable in cash and shall not be subject to pro rata
reduction, if required, of the Cash Distribution payable in conversion
of the other Cash Election Shares as set forth in Section 1.08(f) of
this Agreement, and (ii) Southside Common Stock that is issuable upon
the exercise of any stock options granted by Southside (the "Southside
Employee Stock Options") that are unexercised as of the Effective Time
shall not be converted into cash or Surviving Corporation Common Stock
in connection with the Merger, but shall instead be converted into
stock options to acquire shares of Surviving Corporation Common Stock
as described in Section 5.14 hereof. Notwithstanding the foregoing,
nothing in this Agreement shall be deemed to prohibit the exercise of
Southside Employee Stock Options prior to the Effective Time in
accordance with their terms (in which case the shares of Southside
Common Stock issued upon such exercise shall be converted into cash or
Surviving Corporation Common Stock as provided herein).
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(e) Any election for purposes of Section 1.08(b) of this
Agreement shall be effective only if the Exchange Agent shall have
received the properly completed Election Form by the Election Deadline.
Any Election Form may be revoked or changed by the person submitting
such Election Form or any other person to whom the shares that are the
subject of an Election Form are subsequently transferred. Such
revocation or change shall be effected by written notice by such person
to the Exchange Agent; provided such notice is received by the Exchange
Agent at or prior to the Election Deadline. All Election Forms shall be
deemed to be revoked if the Exchange Agent is notified in writing by
either Allegiant or Southside that this Agreement has been terminated
in accordance with its terms. The Exchange Agent shall have reasonable
discretion to determine when any election, modification or revocation
is received or whether any such election, modification or revocation is
effective, consistent with the duty of the Exchange Agent to give
effect to such elections, modifications or revocations to the maximum
extent possible.
(f) As soon as practicable after the Election Deadline,
Allegiant, after consulting with Southside, shall cause the Exchange
Agent to allocate among the holders of Southside Common Stock the
rights to receive the Cash Distribution, the Stock Distribution and/or
the Combined Distribution, pursuant to the Merger after the Effective
Time, under the circumstances set forth below (provided, if there is no
reallocation of any form of Southside Merger Consideration resulting
from the following, then the holder shall receive that form of
Southside Merger Consideration designated in such holder's Election
Form):
(i) If the number of shares of Surviving Corporation
Common Stock issuable in respect of the Stock Election Shares
and the Stock Distribution portion of the Combined Election
Shares is less than the Stock Conversion Number, then:
(A) First, all of the Stock Election Shares
(including No Election Shares) and the portion of the
Stock Distribution specified or deemed specified on
the Election Forms by holders of Combination Election
Shares shall be converted into the right to receive
the number of shares of Surviving Corporation Common
Stock elected pursuant to the applicable Election
Forms; and
(B) Second, the Exchange Agent shall
reallocate the portion of the Cash Distribution
specified or deemed specified in the Election Forms
by holders of Combined Election Shares such that all
of the holders of Combined Election Shares will
receive in the aggregate the lesser of (a) the total
number of shares of Surviving Corporation Common
Stock into which all Combined Election Shares are
convertible, and (b) the number of shares of
Surviving Corporation Common Stock which will equal
the number of shares by which the Stock Election
Shares and Combined Election Shares are less than the
Stock Conversion Number, to be allocated among each
holder based upon the total amount of Cash
Distribution requested to be received by such holder
of Combined Election Shares as compared with the
total amount of Cash Distribution requested to be
received by all such holders. Such holders shall
receive the balance of the Southside Merger
Consideration, if any, to which each such holder is
entitled to receive pursuant to the Merger in cash
(determined by (x) dividing the total Stock
Distribution to be received by such holder after
giving effect to the reallocation described in this
Section 1.08(f) by 1.39, (y) subtracting the result
in (x) from the number of shares of Southside Common
Stock owned by such holder at the Effective Time, and
(z) multiplying the difference determined in (y) by
$14.00 per share); and
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(C) Third, if any portion of the Stock
Distribution remains unallocated pursuant to clauses
(A) and (B), the Exchange Agent shall reallocate the
portion of the Southside Merger Consideration payable
to each holder of Cash Election Shares (other than
Dissenting Shares) (based upon the number of Cash
Election Shares (other than Dissenting Shares) owned
by such holder as compared with the total number of
Cash Election Shares (other than Dissenting Shares)
owned by all such holders), such that all of the
holders of Cash Election Shares will receive in the
aggregate the number of shares of Surviving
Corporation Common Stock which will equal the number
of shares by which the Stock Election Shares and the
Combined Election Shares (including the Combined
Election Shares converted pursuant to clause (B)
above) are less than the Stock Conversion Number, and
such holders shall receive the balance of the
Southside Merger Consideration, if any, to which each
such holder is entitled to receive pursuant to the
Merger in cash (determined by (x) dividing the total
Stock Distribution to be received by such holder
after giving effect to the reallocation described in
this Section 1.08(f) by 1.39, (y) subtracting the
result in (x) from the number of shares of Southside
Common Stock owned by such holder at the Effective
Time, and (z) multiplying the difference determined
in (y) by $14.00 per share).
(ii) If the number of shares of Surviving Corporation
Common Stock issuable in respect of the Stock Election Shares
(including No Election Shares) and the Stock Distribution
portion of the Combined Election Shares is greater than the
Stock Conversion Number, then the Exchange Agent shall
determine the aggregate number of shares of Surviving
Corporation Common Stock issuable pursuant to the Stock
Distribution portion of the Combined Distribution and to the
Stock Distribution and shall subtract from such number the
Stock Conversion Number (the difference is hereinafter
referred to as the "Excess Shares"), and then:
(A) First, all of the Cash Election Shares
and the portion of the Cash Distribution specified or
deemed specified on the Election Forms by holders of
Combination Election Shares shall be converted into
the right to receive the Cash Distribution elected
pursuant to the applicable Election Forms; and
(B) Second, the Exchange Agent shall
reallocate the Southside Merger Consideration payable
to the holders of the No Election Shares so as to
reduce the number of Excess Shares to zero, or as
close as possible to zero. The number of shares of
Surviving Corporation Common Stock to be received by
each such holder shall be reduced by the lesser of
the total number of shares of Surviving Corporation
Common Stock issuable to such holder as Southside
Merger Consideration, and a number determined by (x)
multiplying the number of Excess Shares outstanding
by (y) the holder's pro rata percentage of the
aggregate No Election Shares (based upon the number
of No Election Shares owned by such holder as
compared with the total number of No Election
Shares). In lieu of the issuance of such shares of
Surviving Corporation Common Stock, the holders of No
Election Shares shall receive a cash payment equal to
$14.00 for each such share of Southside Common Stock
not so converted into the right to receive Surviving
Corporation Common Stock; and
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(C) Third, if the reallocation set forth in
clause (B) immediately above is not sufficient to
reduce the number of Excess Shares to zero, then the
Exchange Agent shall thereafter reallocate the
Southside Merger Consideration payable to each holder
of Combined Election Shares so as to reduce the
number of Excess Shares to zero, or as close as
possible to zero. The number of shares of Surviving
Corporation Common Stock to be received by each such
holder shall be reduced by the lesser of the total
number of shares of Surviving Corporation Common
Stock issuable to such holder as Southside Merger
Consideration, and a number determined by (x)
multiplying the number of Excess Shares deemed
outstanding after giving effect to the reallocation
set forth in clause (B) immediately above by (y) the
holder's pro rata percentage of the aggregate Stock
Distribution requested by all of the holders of the
Combined Election Shares (based upon the total amount
of Stock Distribution requested to be received by
such holder of Combined Election Shares as compared
with the total amount of Stock Distribution requested
to be received by all holders of Combined Election
Shares). In lieu of the issuance of such shares of
Surviving Corporation Common Stock, the holders of
Combined Election Shares shall receive a cash payment
equal to $14.00 for each such share of Southside
Common Stock not converted into the right to receive
Surviving Corporation Common Stock; and
(D) Fourth, if the reallocation set forth in
clause (C) immediately above is not sufficient to
reduce the number of Excess Shares to zero, then the
Exchange Agent shall thereafter reallocate the
Southside Merger Consideration payable to the holders
of the Stock Election Shares so as to reduce the
number of Excess Shares to zero. The number of shares
of Surviving Corporation Common Stock to be received
by each such holder shall be reduced by a number
determined by (x) multiplying the number of Excess
Shares deemed outstanding after giving effect to the
reallocation described in clauses (B) and (C)
immediately above by (y) the holder's pro rata
percentage of the aggregate Stock Election Shares
(not including the No Election Shares) (based upon
the number of Stock Election Shares (not including
the No Election Shares) owned by such holder as
compared with the total number of Stock Election
Shares (not including the No Election Shares) owned
by all holders). In lieu of the issuance of such
shares of Surviving Corporation Common Stock, the
holders of Stock Election Shares shall receive a cash
payment equal to $14.00 for each such share of
Southside Common Stock not converted into the right
to receive Surviving Corporation Common Stock.
The term "Stock Conversion Number" shall mean a number of shares of
Surviving Corporation Common Stock determined by dividing the number of
shares of Southside Common Stock outstanding immediately prior to the
Effective Time by two, and multiplying the resulting number by 1.39 (as
such exchange ratio may be adjusted herein).
(g) The computation of Excess Shares, the pro rata
computations utilized in the reallocations and the reallocated payments
of the Southside Merger Consideration contemplated by Section 1.08(f)
of this Agreement shall be made by the Exchange Agent in the reasonable
exercise of its discretion.
(h) Each separate entry on the Southside Shareholder List
shall be presumed to represent a separate and distinct holder of record
of Southside Common Stock. Shares held of
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record by a bank, trust company, broker, dealer or other recognized
nominee shall be deemed to be held by a single holder unless the
nominee advises the Exchange Agent otherwise in writing. In such case,
each of the beneficial owners will be treated as a separate holder and
either directly or through such nominee may submit a separate Election
Form for shares of Southside Common Stock that are beneficially owned.
(i) Any provisions of the preceding clauses of this Section
1.08 to the contrary notwithstanding, if a holder of Southside Common
Stock in two or more different names so certifies in writing on or
before the Election Deadline, such shareholder may submit a single
Election Form for all such shares subject to the certification and
shall be treated for purposes of this Section 1.08 as a single holder.
1.09 Exchange Procedures.
(a) Immediately prior to the Effective Time, (i) Allegiant
shall deliver to the Exchange Agent cash, in immediately available
funds, equal to the aggregate Cash Distribution; and (ii) Southside
shall deliver to the Exchange Agent irrevocable instructions consistent
with this Agreement to issue shares of Surviving Corporation Common
Stock equal to the aggregate Stock Distribution. Such cash shall be
held in trust by the Exchange Agent in an interest bearing account for
disbursement to holders of Southside Common Stock or return to the
Surviving Corporation as set forth herein.
(b) At the Effective Time, Southside and Allegiant shall be
deemed to have granted the Exchange Agent the requisite power and
authority to effect for Southside and Allegiant the issuance of the
number of shares of Surviving Corporation to be issued in the Merger
and the payment of the amount of cash to be paid in the Merger.
(c) Within five (5) business days after the Effective Time,
Allegiant shall cause the Exchange Agent to mail or cause to be mailed
to holders of Certificates, as identified on the Southside Shareholder
List, letters advising such holders of the effectiveness of the Merger
and instructing such holders to tender such Certificates to the
Exchange Agent, or in lieu thereof, such evidence of lost, stolen or
mutilated Certificates and such surety bond or other security as the
Exchange Agent may reasonably require (the "Required Documentation").
(d) Subject to Section 1.12, after the Effective Time, each
holder of a Certificate that surrenders such Certificate or in lieu
thereof, the Required Documentation, to the Exchange Agent, with a
properly completed and executed letter of transmittal with respect to
such Certificate (in form reasonably satisfactory to Allegiant and
Southside), will be entitled to a certificate or certificates
representing the stock component of the Southside Merger Consideration
and/or a payment representing the cash component of the Southside
Merger Consideration as set forth in Sections 1.07 and 1.08.
(e) After the Effective Time, each outstanding Certificate,
until duly surrendered to the Exchange Agent, shall be deemed to
evidence ownership of the Southside Merger Consideration into which the
stock previously represented by such Certificate shall have been
converted pursuant to this Agreement.
(f) After the Effective Time, holders of Certificates shall
cease to have rights with respect to the stock previously represented
by such Certificates, and their sole rights shall be to exchange such
Certificates for the Southside Merger Consideration to which the
shareholder may
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be entitled pursuant to the provisions of Sections 1.07 and 1.08
hereof. After the closing of the transfer books as described in Section
1.12(a) hereof, there shall be no further transfer on the records of
Southside of Certificates, and if such Certificates are presented to
Southside for transfer, they shall be canceled against delivery of the
Southside Merger Consideration. Neither Surviving Corporation nor the
Exchange Agent shall be obligated to deliver the Southside Merger
Consideration until such holder surrenders the Certificates or
furnishes the Required Documentation as provided herein. Surviving
Corporation shall have the right to withhold any applicable taxes. No
interest shall accrue on Cash Distributions or the cash portion of the
Combined Distributions specified in the Election Forms pursuant to
Section 1.08(b). No dividends or distributions declared after the
Effective Time on the Surviving Corporation Common Stock will be
remitted to any person entitled to receive Surviving Corporation Common
Stock under this Agreement until such person surrenders the Certificate
representing the right to receive such Surviving Corporation Common
Stock or furnishes the Required Documentation, at which time such
dividends or distributions shall be remitted to such person, without
interest and less any taxes that may have been imposed thereon.
Certificates surrendered for exchange by an "affiliate" of Southside as
determined pursuant to Section 5.06, shall not be exchanged until
Surviving Corporation has received a written agreement from such
affiliate if required pursuant to Section 5.06 hereof.
(g) At any time following the sixth (6th) month after the
Effective Time, the Surviving Corporation shall be entitled to require
the Exchange Agent to deliver to it any portion of the funds which had
been made available to the Exchange Agent pursuant to Section 1.09(a)
and not disbursed to holders of shares of Southside Common Stock
(including, without limitation, all interest and other income received
by the Exchange Agent in respect of all amounts of funds made available
to it), and thereafter each such holder shall be entitled to look only
to the Surviving Corporation (subject to abandoned property, escheat
and other similar laws), and only as general creditors thereof, with
respect to any Southside Merger Consideration that may be payable upon
due surrender of the Certificates held by such holder (or the Required
Documentation). If any Certificates (or the Required Documentation)
shall not have been surrendered immediately prior to such date on which
the Southside Merger Consideration in respect of such Certificate would
otherwise escheat to or become the property of any Regulatory
Authority, any such cash, shares, dividends or distributions payable in
respect of such Certificate shall, to the extent permitted by
applicable law or regulation, become the property of the Surviving
Corporation, free and clear of all claims or interest of any person
previously entitled thereto. Notwithstanding the foregoing, neither the
Surviving Corporation nor the Exchange Agent shall be liable to any
holder of a share of Southside Common Stock for any Southside Merger
Consideration delivered in respect of such share of Southside Common
Stock to a public official pursuant to any abandoned property, escheat
or other similar laws.
(h) Unless otherwise required by Allegiant or Surviving
Corporation, holders of certificates formerly representing Allegiant
Common Stock shall not be required to exchange such certificates for
certificates representing Surviving Corporation Common Stock; provided,
however, that if an exchange of such certificates is required by law or
applicable rule or regulation, Allegiant will cause the Surviving
Corporation to arrange for such exchange in accordance with the other
provisions of this Agreement.
(i) Surviving Corporation will pay to the applicable taxing
authority in strict accordance with applicable laws all taxes withheld
by Surviving Corporation in accordance with this Agreement.
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1.10 No Fractional Shares. Notwithstanding any other provision of this
Agreement, neither certificates nor scrip for fractional shares of Surviving
Corporation Common Stock shall be issued in the Merger. Each holder of Southside
Common Stock who otherwise would have been entitled to a fraction of a share of
Surviving Corporation Common Stock (after taking into account all shares of
Southside Common Stock held by such holder) shall receive (by check from the
Exchange Agent, mailed to the shareholder with the certificate(s) for Surviving
Corporation Common Stock which such holder is to receive pursuant to the Merger)
in lieu thereof, cash (without interest and subject to the payment of any
applicable withholding taxes) in an amount determined by multiplying the
fractional share interest to which such holder would otherwise be entitled by
$14.00. No such holder shall be entitled to dividends, voting rights or any
other rights in respect of any fractional share.
1.11 Dissenting Shares.
(a) "Dissenting Shares" means any shares of Southside Common
Stock or Allegiant Common Stock held by any holder who becomes entitled
to payment of the fair value of such shares under Section 351.455 of
the Missouri Statute. Any holders of Dissenting Shares shall be
entitled to payment for such shares only to the extent permitted by and
in accordance with the provisions of the Missouri Statute; provided,
however, that if, in accordance with the Missouri Statute, any holder
of Dissenting Shares shall forfeit such right to payment of the fair
value of such Dissenting Shares, (i) each such share which represented
Southside Common Stock shall thereupon be No Election Shares and (ii)
each such share which represented Allegiant Common Stock shall be
deemed to have been converted into and to have become exchangeable for,
as of the Effective Time, the right to receive one share of Surviving
Corporation Common Stock.
(b) Southside shall give to Allegiant (i) prompt notice of any
written objections to the Merger and/or any written demands for the
payment of the fair value of any shares of Southside Common Stock,
withdrawals of such demands, and any other instruments served pursuant
to Section 351.455 of the Missouri Statute received by Southside, and
(ii) the opportunity to participate in all negotiations and proceedings
with respect to such demands under the Missouri Statute. Southside
shall not voluntarily make any payment with respect to demands for
payment of fair value and shall not, except with the prior consent of
Allegiant (which shall not be unreasonably withheld, delayed or
conditioned), settle or offer to settle any such demands.
1.12 Closing of Stock Transfer Books.
(a) The stock transfer books of Southside shall be closed at
the end of business on the business day immediately preceding the
Closing Date. In the event of a transfer of ownership of Southside
Common Stock that is not registered in the transfer records prior to
the closing of such record books, the Southside Merger Consideration
issuable or payable with respect to such stock may be delivered to the
transferee, if the Certificate or Certificates representing such stock
(or the Required Documentation) is presented to the Exchange Agent
accompanied by all documents required to evidence and effect such
transfer and all applicable stock transfer taxes are paid.
(b) At the Effective Time, Southside shall cause its transfer
agent to provide Allegiant and the Exchange Agent with a complete and
verified list of registered holders of Southside Common Stock based
upon its stock transfer books or corporate records as of the closing of
said transfer books, including the names, addresses, certificate
numbers and taxpayer identification numbers of such holders (the
"Southside Shareholder List"). Allegiant and the Exchange Agent shall
be entitled to rely upon the Southside Shareholder List to establish
the
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identity of those persons entitled to receive the Southside Merger
Consideration, which list shall be conclusive with respect thereto. In
the event of a dispute with respect to ownership of stock represented
by any Certificate, the Exchange Agent shall be entitled to deposit any
Southside Merger Consideration represented thereby in escrow with an
independent third party and thereafter be relieved with respect to any
claims thereto.
1.13 Anti-Dilution. If between the date of this Agreement and the
Effective Time a share of Allegiant Common Stock shall be changed into a
different number of shares of Allegiant Common Stock or a different class of
shares (or if a record date is established within such period for such purpose)
by reason of reclassification, recapitalization, split-up, combination, exchange
of shares or readjustment, or if a stock dividend thereon shall be declared with
a record date within such period, then appropriate and proportionate adjustment
or adjustments will be made to the Stock Distribution and the Surviving
Corporation Common Stock portion of the Combined Distributions as specified in
the Election Forms pursuant to Section 1.08(b) or as further adjusted pursuant
to Section 1.08(f) such that each holder of Southside Common Stock shall be
entitled to receive such number of shares of Surviving Corporation Common Stock
or other securities as such shareholder would have received pursuant to such
reclassification, recapitalization, split-up, combination, exchange of shares or
readjustment or as a result of such stock dividend if such had been declared by
the Surviving Corporation and had the record date therefor been immediately
following the Effective Time.
1.14 Tax Consequences. It is intended that the Merger will constitute a
reorganization within the meaning of Section 368(a)(1)(A) of the Code and that
this Agreement shall constitute a "plan of reorganization" for purposes of
Section 368 of the Code. Each of Southside and Allegiant hereby agree to file
any and all tax returns in a manner consistent with the qualification as such.
1.15 Material Adverse Effect. As used in this Agreement, the term
"Material Adverse Effect" with respect to either Southside or Allegiant, as the
case may be, means any condition, event, change or occurrence that has a
material adverse effect on the condition (financial or otherwise), properties,
business or results of operations, of such entity and its Subsidiaries, taken as
a whole, as reflected, respectively, in the Southside Financial Statements or
the Allegiant Financial Statements, as the case may be; it being understood that
a Material Adverse Effect shall not include: (i) a change with respect to, or
effect on, such entity and its Subsidiaries resulting from a change in law,
rule, regulation, generally accepted accounting principles or regulatory
accounting principles; (ii) a change with respect to, or effect on, such entity
and its Subsidiaries resulting from any other matter affecting depository
institutions generally including, without limitation, changes in general
economic conditions and changes in prevailing interest and deposit rates; (iii)
a change disclosed in, respectively, the Southside Financial Statements or the
Allegiant Financial Statements, as the case may be; or (iv) in the case of
Southside, any financial change resulting from adjustments made pursuant to
Section 5.05 or 5.08(b) hereof.
1.16 Knowledge. As used in this Agreement, the term "knowledge" or
"best knowledge" shall mean those facts known by the executive officers of
Allegiant or Southside, as the case may be.
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1.17 Disclosure Schedules; Standard.
(a) Southside has delivered to Allegiant a confidential
schedule and Allegiant has delivered to Southside a confidential
schedule (respectively, its "Disclosure Schedule"), executed by
Southside and Allegiant concurrently with the delivery and execution
hereof, setting forth, among other things, items the disclosures of
which shall be necessary or appropriate either in response to an
express disclosure requirement contained in a provision hereof or as an
exception to one or more representations or warranties contained in
Article II hereof, in the case of Southside, or Article III hereof, in
the case of Allegiant; provided that (i) no such item shall be required
to be set forth in the Disclosure Schedule as an exception to a
representation or warranty if its absence would not be reasonably
likely to result in the related representation or warranty being deemed
untrue or incorrect under the standard established by Section 1.17(b)
hereof, and (ii) the mere inclusion of an item in the Disclosure
Schedule as an exception to a representation or warranty shall not be
deemed an admission by Southside or Allegiant, as the case may be, that
such item represents a material exception or a fact, event or
circumstance or that such item is reasonably likely to result in a
Material Adverse Effect.
(b) No representation or warranty of Southside contained in
Article II hereof or Allegiant contained in Article III hereof shall be
deemed untrue or incorrect, and Southside and Allegiant, as the case
may be, shall not be deemed to have breached a representation or
warranty, as a consequence of the existence of any fact, event or
circumstance unless such fact, event or circumstance, individually or
taken together with all other facts, events or circumstances
inconsistent with any representation or warranty contained in Article
II hereof, in the case of Southside, or Article III hereof, in the case
of Allegiant, has had a Material Adverse Effect on the party making
such representation or warranty.
(c) Southside and Allegiant shall be permitted to update and
supplement their respective Disclosure Schedules so as to disclose
exceptions to one or more representations or warranties contained in
Article II hereof in the case of Southside and Article III 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 Schedule 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 Schedule shall not be taken into consideration in
determining, for purposes of this Agreement, whether the conditions set
forth in Section 6.02(a) in the case of Southside, and Section 6.03(a)
hereof in the case of Allegiant shall have been satisfied, and (iii)
this Section 1.17(c) shall not relieve any party of its obligations
under any covenant set forth herein.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF SOUTHSIDE
As an inducement to Allegiant to enter into and perform its obligations
under this Agreement, and notwithstanding any examinations, inspections, audits
or other investigations made by Allegiant, subject to Section 1.17 hereof and
except as set forth in a section of the Disclosure Schedule corresponding to the
relevant Section of Article II set forth below, Southside hereby represents and
warrants to Allegiant as follows:
2.01 Organization and Authority. Southside is a corporation duly
organized, validly existing
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and in good standing under the laws of the State of Missouri, is duly qualified
to do business and is in good standing in all jurisdictions where its ownership
or leasing of property or the conduct of its business requires it to be so
qualified and has the corporate power and authority to own its properties and
assets and to carry on its business as it is now being conducted. Southside is
registered as a bank holding company with the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board") under the BHCA. True and complete
copies of the Articles of Incorporation, charter and By-Laws of Southside, and
the Articles of Association and By-Laws of each Southside Subsidiary, each as in
effect on the date of this Agreement, are attached hereto as Schedule 2.01.
2.02 Subsidiaries.
(a) Schedule 2.02 sets forth a complete and correct list of
all of Southside's Subsidiaries (each a "Southside Subsidiary" and,
collectively, the "Southside Subsidiaries"), and all outstanding Equity
Securities of each Southside Subsidiary, all of which are owned
directly or indirectly by Southside. "Equity Securities" of an issuer
means capital stock or other equity securities of such issuer, options,
warrants, scrip, rights to subscribe to, calls or commitments of any
character whatsoever relating to, or securities or rights convertible
into, shares of any capital stock or other equity securities of such
issuer, or contracts, commitments, understandings or arrangements by
which such issuer is or may become bound to issue additional shares of
its capital stock or other equity securities of such issuer, or
options, warrants, scrip or rights to purchase, acquire, subscribe to,
calls on or commitments for any shares of its capital stock or other
equity securities. All of the outstanding shares of capital stock of
the Southside Subsidiaries owned directly or indirectly by Southside
are validly issued, fully paid and nonassessable and are owned free and
clear of any lien, claim, charge, option, encumbrance, agreement,
mortgage, pledge, security interest or restriction (a "Lien") with
respect thereto. Each of the Southside Subsidiaries is a corporation,
bank or savings bank duly incorporated or organized and validly
existing under the laws of its jurisdiction of incorporation or
organization, and has corporate power and authority to own or lease its
properties and assets and to carry on its business as it is now being
conducted. Each of the Southside Subsidiaries is duly qualified to do
business in each jurisdiction where its ownership or leasing of
property or the conduct of its business requires it to be so qualified.
Neither Southside nor any Southside Subsidiary owns beneficially,
directly or indirectly, any shares of any class of Equity Securities or
similar interests of any corporation, bank, business trust, association
or organization, or any interest in a partnership or joint venture of
any kind, other than those identified as Southside Subsidiaries in
Schedule 2.02 hereof.
(b) SOUTH SIDE NATIONAL BANK ("SNB") is a national banking
association duly organized and validly existing under the laws of the
United States of America. Each of the Southside Subsidiaries, except
SNB, are commercial banks duly organized, validly existing and in good
standing under the laws of the State of Missouri. The deposits of the
Southside Subsidiaries are insured by the Federal Deposit Insurance
Corporation (the "FDIC") under the Federal Deposit Insurance Act of
1950, as amended (the "FDI Act").
2.03 Capitalization. The authorized capital stock of Southside consists
of 15,000,000 shares of Southside Common Stock, of which, as of December 31,
2000, 8,393,528 shares were issued and outstanding and 1,000,000 shares of
cumulative preferred stock, no par value, of which no shares were issued and
outstanding. As of December 31, 2000, Southside had reserved 1,281,000 shares of
Southside Common Stock for issuance under Southside's stock option and incentive
plans (including grants reflected in the Southside Board of Directors' minutes),
a list of which is set forth on Schedule 2.03 (the "Southside Stock Plans"),
pursuant to which options ("Southside Employee Stock Options") covering
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531,000 shares of Southside Common Stock were outstanding as of December 31,
2000. Since December 31, 2000, no Equity Securities of Southside have been
issued, other than shares of Southside Common Stock which may have been issued
upon the exercise of Southside Stock Options. Except for the Southside Stock
Plans and the Southside Rights Agreement, Southside does not have and is not
bound by any outstanding subscriptions, options, warrants, calls, commitments or
agreements of any character calling for the issuance of any share of Southside
Common Stock or any other Equity Securities of Southside. No shares of Southside
Common Stock have been issued nor are any shares of Southside Common Stock
issuable in violation of any preemptive rights. All of the issued and
outstanding shares of Southside Common Stock are validly issued, fully paid and
nonassessable, and have not been issued in violation of any preemptive right of
any shareholder of Southside. At the Effective Time, the Surviving Corporation
Common Stock to be issued in the Merger will be duly authorized, validly issued,
fully paid and nonassessable, and will not be issued in violation of any
preemptive right of any shareholder of Southside.
2.04 Authorization.
(a) Southside has the corporate power and authority to enter
into this Agreement and the Southside and Allegiant Voting Agreements,
and to carry out its obligations under the Southside and Allegiant
Voting Agreements and, subject to the approval of this Agreement, the
Merger and the transactions contemplated thereby by the shareholders of
Southside and the Regulatory Authorities, to carry out its obligations
under this Agreement. The only shareholder vote required for Southside
to approve this Agreement, the Merger and the transactions contemplated
hereby and thereby is the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Southside Common Stock entitled
to vote at a meeting called for such purpose. The execution, delivery
and performance of this Agreement and the Southside and Allegiant
Voting Agreements by Southside and the consummation by Southside of the
transactions contemplated hereby and thereby in accordance with and
subject to the terms of this Agreement and the Southside and Allegiant
Voting Agreements have been duly authorized by the Board of Directors
of Southside. Each of the Southside and Allegiant Voting Agreements
and, subject to the approval of Southside's shareholders and subject to
the receipt of such approvals of the Regulatory Authorities as may be
required by statute or regulation, this Agreement, is a valid and
binding obligation of Southside enforceable against Southside in
accordance with its respective terms. Southside's Board of Directors
has taken all actions so that none of the Rights, Article Twelve of
Southside's Articles of Incorporation, Sections 351.407 and 351.459 of
the Missouri Statutes or any other Missouri antitakeover measure,
whether pursuant to Southside's Articles of Incorporation or Bylaws,
applicable Missouri law, or otherwise will apply to the Merger or this
Agreement or the transactions contemplated hereby.
(b) Neither the execution nor delivery nor performance by
Southside of this Agreement or the Southside or Allegiant Voting
Agreements, nor the consummation by Southside of the transactions
contemplated hereby or thereby, nor compliance by Southside with any of
the provisions hereof or thereof, will (i) violate, conflict with, or
result in a breach of any provisions of, or 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 a right of termination or
acceleration of, or result in the creation of, any Lien upon any of the
properties or assets of Southside or any of the Southside Subsidiaries
under any of the terms, conditions or provisions of (x) its Articles of
Incorporation, charter or By-Laws or (y) any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument
or obligation to which Southside or any of the Southside Subsidiaries
is a party or by which it may be bound, or to which Southside or any of
the Southside Subsidiaries or any of the properties or
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assets of Southside or any of the Southside Subsidiaries may be
subject, or (ii) subject to compliance with the statutes and
regulations referred to in subsection (c) of this Section 2.04, violate
any judgment, ruling, order, writ, injunction, decree, statute, rule or
regulation applicable to Southside or any of the Southside Subsidiaries
or any of their respective properties or assets.
(c) Other than in connection or in compliance with the
provisions of the Missouri Statute, the Securities Act of 1933, as
amended, and the rules and regulations thereunder (collectively, the
"Securities Act"), the Securities Exchange Act of 1934, as amended, and
the rules and regulations thereunder (the "Exchange Act"), the
securities or blue sky laws of the various states or filings, consents,
reviews, authorizations, approvals or exemptions required under the
BHCA, the FDI Act or any required approvals of any other Regulatory
Authority, no notice to, filing with, exemption or review by, or
authorization, consent or approval of, any public body or authority is
necessary for the consummation by Southside of the transactions
contemplated by this Agreement.
2.05 Southside Financial Statements.
(a) Attached hereto as Schedule 2.05(a) is a copy of
Southside's Form 10-K for the year ended December 31, 2000, and the
consolidated unaudited balance sheets, statements of operations, and
changes in shareholders' equity for each month ended and as of January
31, 2001, February 28, 2001, and March 31, 2001.
(b) The financial statements contained in the documents
referenced in Schedule 2.05(a) are referred to collectively as the
"Southside Financial Statements." The Southside Financial Statements
have been prepared in accordance with generally accepted accounting
principles ("GAAP"), consistently applied, during the periods involved,
and present fairly the consolidated financial position of Southside and
the Southside Subsidiaries at the dates thereof and the consolidated
results of operations, changes in shareholders' equity and cash flows,
as applicable, of Southside and the Southside Subsidiaries for the
periods stated therein, subject to the exclusion in the monthly
financial statements of footnotes required by GAAP and to normal
year-end adjustments which are not individually or in the aggregate
material. The Southside Financial Statements are derived from the books
and records of Southside and the Southside Subsidiaries, which are
complete and accurate in all respects and have been maintained in
accordance with good business practices.
2.06 Southside Reports. Since January 1, 1997, each of Southside and
the Southside Subsidiaries has timely filed any and all Southside Reports,
together with any required amendments thereto, that it was required to file with
any Regulatory Authority. As of each of their respective dates, the Southside
Reports complied in all material respects with all the rules and regulations
promulgated by the (i) the SEC, (ii) the Federal Reserve Board, (iii) the FDIC
and (iv) any federal, state, municipal or local government, securities, banking,
savings and loan, environmental, insurance and other governmental or regulatory
authority, and the agencies and staffs thereof (the entities in the foregoing
clauses (i) through (iv) being referred to herein collectively as the
"Regulatory Authorities" and individually as a "Regulatory Authority"), having
jurisdiction over the affairs of it, and the Southside Reports did not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. All material reports and statements filed with any such Regulatory
Authority are collectively referred to herein as the "Southside Reports." With
respect to Southside Reports filed with the Regulatory Authorities, there is no
material unresolved violation, criticism or exception by any Regulatory
Authority with respect to any report or statement filed by, or any examinations
of, Southside or any of the Southside Subsidiaries.
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2.07 Title to and Condition of Assets.
(a) Except as may be reflected in the Southside Financial
Statements and with the exception of all "Real Property" (which is the
subject of Section 2.08 hereof), Southside and the Southside
Subsidiaries have, and at the Closing Date will have, good and
marketable title to their owned properties and assets, including,
without limitation, those reflected in the Southside Financial
Statements (except those disposed of in the ordinary course of business
since the date thereof), free and clear of any Liens, except for Liens
for (i) taxes, assessments or other governmental charges not yet
delinquent, (ii) as set forth or described in the Southside Financial
Statements, prior to the Effective Time, and (iii) pledge to secure
deposits and other immaterial Liens incurred in the ordinary course of
business.
(b) No material properties or assets that are reflected as
owned by Southside or any of the Southside Subsidiaries in the
Southside Financial Statements as of December 31, 2000, have been sold,
leased, transferred, assigned or otherwise disposed of since such date,
except in the ordinary course of business.
(c) The operation by Southside or the Southside Subsidiaries
of all furniture, fixtures, vehicles, machinery and equipment and
computer software owned or used by Southside or the Southside
Subsidiaries is in compliance in all material respects with all
applicable laws, ordinances and rules and regulations of any
governmental authority having jurisdiction over such use.
2.08 Real Property.
(a) A list of each parcel of real property owned by Southside
or any of the Southside Subsidiaries (other than real property acquired
in foreclosure or in lieu of foreclosure in the course of the
collection of loans and being held by Southside or a Southside
Subsidiary for disposition as required by law) is set forth in Schedule
2.08(a) under the heading "Owned Real Property" (such real property
being herein referred to as the "Owned Real Property"). A list of each
parcel of real property leased by Southside or any of the Southside
Subsidiaries is also set forth in Schedule 2.08(a) under the heading
"Leased Real Property" (such real property being herein referred to as
the "Leased Real Property"). Southside shall update Schedule 2.08(a)
within ten (10) days of acquiring any Owned Real Property or leasing
any Leased Real Property after the date hereof. Collectively, the Owned
Real Property and the Leased Real Property are herein referred to as
the "Real Property."
(b) There is no pending action involving Southside or any of
the Southside Subsidiaries as to the title of or the right to use any
of the Real Property.
(c) Neither Southside nor any of the Southside Subsidiaries
has any interest in any real property other than as described above in
Section 2.08(a) except interests as a mortgagee, any real property
acquired in foreclosure or in lieu of foreclosure and being held for
disposition as required by law and property held by any Southside
Subsidiary in its fiduciary capacity.
(d) To the knowledge of Southside, none of the buildings,
structures or other improvements located on the Real Property
encroaches upon or over any adjoining parcel of real estate or any
easement or right-of-way or "setback" line and all such buildings,
structures and
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improvements are located and constructed in conformity with all
applicable zoning ordinances and building codes.
(e) None of the buildings, structures or improvements located
on the Owned Real Property are the subject of any official complaint or
notice by any governmental authority of violation of any applicable
zoning ordinance or building code, and there is no zoning ordinance,
building code, use or occupancy restriction or condemnation action or
proceeding pending, or, to the knowledge of Southside, threatened, with
respect to any such building, structure or improvement.
(f) Southside and the Southside Subsidiaries have, and at the
Closing Date will have, good and marketable title to their respective
Owned Real Properties, except (i) as may be reflected in the Southside
Financial Statements, (ii) such easements, Liens, defects or
encumbrances as do not individually or in the aggregate materially
adversely affect the use or value of the parcel of the Owned Real
Property, (iii) taxes, assessments or other governmental charges not
yet delinquent, (iv) Liens arising out of deposits in connection with
workmen's compensation, unemployment insurance, old age pensions or
other social security or retirement benefits legislation, (v) deposits
or pledges to secure bids, tenders, contracts (other than contracts for
the payment of money), leases, statutory obligations, surety and appeal
bonds or other obligations of a like nature arising in the ordinary
course of business, (vi) Liens imposed by law, such as mechanics',
workmen's, materialmen's, landlord's, carriers' or other like Liens
arising in the ordinary course of business which secure payment of
obligations which are not past due, and (vi) other immaterial Liens and
encumbrances incurred in the ordinary course of business.
(g) Neither Southside nor any of the Southside Subsidiaries
has caused or allowed the generation, treatment, storage, disposal or
release at any Real Property of any Toxic Substance, except in
accordance in all material respects with all applicable federal, state
and local laws and regulations. "Toxic Substance" means any hazardous,
toxic or dangerous substance, pollutant, waste, gas or material,
including, without limitation, petroleum and petroleum products,
metals, liquids, semi-solids or solids, that are regulated under any
federal, state or local statute, ordinance, rule, regulation or other
law pertaining to environmental protection, contamination, quality,
waste management or cleanup. There are no underground storage tanks
located on, in or under any Owned Real Property or Leased Real
Property.
(h) Each of the leases for the Leased Real Property is in full
force and effect on the date hereof and has not been modified or
amended in any respect from the forms heretofore provided to Allegiant.
Neither Southside, nor to the knowledge of Southside, any third party
is in default under any leases for Southside Leased Property nor has
any event occurred which, through the passage of time or the giving of
notice (including, without limitation, the consummation of the
transactions contemplated by this Agreement), or both, would constitute
a default thereunder or would cause the acceleration of any obligation
of any party thereto or the creation of a lien or encumbrance upon any
of Southside's assets. The leases for the Leased Real Property are the
valid and binding obligations of Southside and the Southside
Subsidiaries thereto and, to the knowledge of Southside, the other
parties thereto in accordance with their terms and conditions, except
as the enforceability thereof against the parties thereto may be
limited by bankruptcy, insolvency, reorganization, moratorium and other
laws now or hereafter in effect relating to the enforcement of
creditors' rights generally, and except that equitable principles may
limit the right to obtain specific performance or other equitable
remedies. Southside has delivered complete and correct copies of all
the leases for the Leased Real Property to Allegiant.
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2.09 Taxes. Southside and each Southside Subsidiary have timely filed
all material income tax returns required to be filed ("Southside Returns"). Each
of Southside and the Southside Subsidiaries has paid, or set up adequate
reserves on the Southside Financial Statements for the payment of, all income
taxes shown on the Southside Returns required to be paid in respect of the
periods covered by such Southside Returns. Neither Southside nor any Southside
Subsidiary has any material liability for any such income taxes in excess of the
amounts so paid or reserves so established and, to the knowledge of Southside,
no material deficiencies for any such income tax, have been proposed, asserted
or assessed in writing (tentatively or definitely) against Southside or any of
the Southside Subsidiaries which have not been settled or would not be covered
by existing reserves. Neither Southside nor any of the Southside Subsidiaries is
delinquent in the payment of any material income tax nor has it requested any
extension of time within which to file any income tax returns in respect of any
fiscal year which have not since been filed and no requests for waivers of the
time to assess any tax are pending. No federal or state income tax return of
Southside or any Southside Subsidiaries has been audited by the IRS or any state
tax authority for the three (3) most recent full calendar years. There is no
deficiency or refund litigation with respect to the Southside Returns. Neither
Southside nor any of the Southside Subsidiaries has extended or waived any
statute of limitations that is currently in effect on the assessment of any tax
due.
2.10 Material Adverse Effect. Since December 31, 2000, there has been
no Material Adverse Effect on Southside and the Southside Subsidiaries, taken as
a whole.
2.11 Loans, Commitments and Contracts.
(a) Schedule 2.11(a) contains a complete and accurate listing
of all contracts entered into with respect to deposits and repurchase
agreements of $5,000,000 or more, as of March 31, 2001, by account, and
all loan agreements, notes, security agreements, bankers' acceptances,
outstanding letters of credit, participation agreements, and other
documents relating to or involving extensions of credit by Southside or
any of the Southside Subsidiaries and all loan commitments and
commitments to issue letters of credit and other commitments to extend
credit with respect to any one entity in excess of $5,000,000 to which
Southside or any of the Southside Subsidiaries is a party or by which
it is bound, by account.
(b) Except for the contracts and agreements required to be
listed on Schedule 2.11(b) and the loans required to be listed on
Schedule 2.11(f), neither Southside nor any of the Southside
Subsidiaries is a party to or is bound by any:
(i) agreement, contract, arrangement, understanding
or commitment with any labor union;
(ii) material franchise or license agreement,
excluding software license agreements entered into in the
ordinary course of business;
(iii) employment, severance, termination pay, agency,
consulting or similar agreement or commitment in respect of
personal services;
(iv) material agreement, arrangement or commitment
(A) not made in the ordinary course of business, and (B)
pursuant to which Southside or any of the Southside
Subsidiaries is or may become obligated to invest in or
contribute to any Southside Subsidiary other than pursuant to
Southside Employee Plans or agreements relating to joint
ventures or partnerships set forth in Schedule 2.02, true and
complete copies of which have been furnished to Allegiant;
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(v) agreement, indenture or other instrument not
disclosed in the Southside Financial Statements relating to
the borrowing of money by Southside or any of the Southside
Subsidiaries or the guarantee by Southside or any of the
Southside Subsidiaries of any such obligation (other than
trade payables or instruments related to transactions entered
into in the ordinary course of business by Southside or any of
the Southside Subsidiaries, such as deposits, Federal Home
Loan Bank ("FHLB") and Federal Funds borrowings and repurchase
and reverse repurchase agreements), other than such
agreements, indentures or instruments providing for annual
payments of less than $200,000;
(vi) contract containing covenants which limit the
ability of Southside or any of the Southside Subsidiaries to
compete in any line of business or with any person or which
involves any restrictions on the geographical area in which,
or method by which, Southside or any of the Southside
Subsidiaries may carry on their respective businesses (other
than as may be required by law or any applicable Regulatory
Authority);
(vii) lease with annual rental payments aggregating
$100,000 or more;
(viii) loans or other obligations payable or owing to
any officer, director or employee except (A) salaries, wages
and directors' fees or other compensation incurred and accrued
in the ordinary course of business and (B) obligations due in
respect of any depository accounts maintained by any of the
foregoing with Southside or any of the Southside Subsidiaries
in the ordinary course of business; or
(ix) other agreement, contract, arrangement,
understanding or commitment involving an obligation by
Southside or any of the Southside Subsidiaries of more than
$250,000 that cannot be canceled without cost or penalty upon
notice of 30 days or less, other than contracts entered into
in respect of deposits, loan agreements and commitments,
notes, security agreements, repurchase and reverse repurchase
agreements, bankers' acceptances, outstanding letters of
credit and commitments to issue letters of credit,
participation agreements and other documents relating to
transactions entered into by Southside or any of the Southside
Subsidiaries in the ordinary course of business.
(c) Southside and/or the Southside Subsidiaries carry
property, liability, director and officer errors and omissions,
products liability and other insurance coverage as set forth in
Schedule 2.11(c) under the heading "Insurance."
(d) True, correct and complete copies of the agreements,
contracts, leases, insurance policies and other documents referred to
in Schedules 2.11(a), (b) and (c) have been or shall be furnished or
made available to Allegiant.
(e) Except as set forth on the applicable schedule, each of
the agreements, contracts, leases, insurance policies and other
documents referred to in Schedules 2.11 (a), (b) and (c) is a valid,
binding and enforceable obligation of Southside or the Southside
Subsidiary who is a party thereto and to Southside's knowledge, the
other parties sought to be bound thereby, except as the enforceability
thereof against the parties thereto may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws now or hereafter
in effect relating to the enforcement of creditors' rights generally,
and except that equitable principles may limit the right to obtain
specific performance or other equitable remedies.
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(f) Schedule 2.11(f) under the heading "Loans" contains a
true, correct and complete listing, as of March 31, 2001, by account,
of (i) all loans in excess of $500,000 of Southside or any of the
Southside Subsidiaries that have been accelerated during the past three
months; (ii) all loan commitments or lines of credit of Southside or
any of the Southside Subsidiaries in excess of $500,000 which have been
terminated by Southside or any of the Southside Subsidiaries during the
past three months by reason of default or adverse developments in the
condition of the borrower or other events or circumstances affecting
the credit of the borrower; (iii) all loans, lines of credit and loan
commitments in excess of $500,000, as to which Southside or any of the
Southside Subsidiaries has given written notice of its intent to
terminate during the past three months; (iv) with respect to all loans
in excess of $500,000 all notification letters and other written
communications from Southside or any of the Southside Subsidiaries to
any of their respective borrowers, customers or other parties during
the past three months wherein Southside or any of the Southside
Subsidiaries has requested or demanded that actions be taken to correct
existing defaults or facts or circumstances which may become defaults;
(v) each borrower, customer or other party which has notified Southside
or any of the Southside Subsidiaries during the past three months of,
or has asserted against Southside or any of the Southside Subsidiaries,
in each case in writing, any "lender liability" or similar claim, and,
to the knowledge of Southside, each borrower, customer or other party
which has given Southside or any of the Southside Subsidiaries any oral
notification of, or orally asserted to or against Southside or any of
the Southside Subsidiaries, any such claim; or (vi) all loans in excess
of $250,000 (A) that are contractually past due 90 days or more in the
payment of principal and/or interest, (B) that are on non-accrual
status, (C) that have been classified "doubtful," "loss" or the
equivalent thereof by any Regulatory Authority, (D) where a reasonable
doubt exists as to the timely future collectibility of principal and/or
interest, whether or not interest is still accruing or the loan is less
than 90 days past due, (E) the interest rate terms have been reduced
and/or the maturity dates have been extended subsequent to the
agreement under which the loan was originally created due to concerns
regarding the borrower's ability to pay in accordance with such initial
terms, or (F) where a specific reserve allocation exists in connection
therewith.
2.12 Absence of Defaults. Neither Southside nor any of the Southside
Subsidiaries is in violation of its Articles of Incorporation, charter or
By-Laws or in default under any material agreement, commitment, arrangement,
lease, insurance policy or other instrument, whether entered into in the
ordinary course of business or otherwise and whether written or oral, and, to
the knowledge of Southside, no third party is in default thereunder, nor has any
event occurred which, through the passage of time or the giving of notice
(including, without limitation, the consummation of the transactions
contemplated by this Agreement), or both, would constitute a default thereunder
or would cause the acceleration of any obligation of any party thereto or the
creation of a lien or encumbrance upon Southside or any of the Southside
Subsidiaries' assets.
2.13 Litigation and Other Proceedings. Except as otherwise disclosed in
the Southside Financial Statements, neither Southside nor any of the Southside
Subsidiaries is a party to any pending or, to the knowledge of Southside,
threatened claim, action, suit, investigation or proceeding, or is subject to
any order, judgment or decree. Without limiting the generality of the foregoing,
there are no actions, suits or proceedings pending or, to the knowledge of
Southside, threatened against Southside or any of the Southside Subsidiaries or
any of their respective officers or directors by any shareholder of Southside or
any of the Southside Subsidiaries (or any former shareholder of Southside or any
of the Southside Subsidiaries) or involving claims under the Community
Reinvestment Act of 1977, as amended, the Bank Secrecy Act, the fair lending
laws or any other similar laws.
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2.14 Directors' and Officers' Insurance. Each of Southside and the
Southside Subsidiaries has taken or will take all requisite action (including,
without limitation, the making of claims and the giving of notices) pursuant to
its directors' and officers' liability insurance policy or policies in order to
preserve all rights thereunder with respect to all matters (other than matters
arising in connection with this Agreement and the transactions contemplated
hereby) occurring prior to the Effective Time that are known to Southside.
2.15 Compliance with Laws.
(a) Southside and each of the Southside Subsidiaries have all
permits, licenses, authorizations, orders and approvals of, and have
made all filings, applications and registrations with, all Regulatory
Authorities that are required in order to permit them to own or lease
their respective properties and assets and to carry on their respective
businesses as presently conducted; all such permits, licenses,
certificates of authority, orders and approvals are in full force and
effect and, to the knowledge of Southside, no suspension or
cancellation of any of them is threatened; and all such filings,
applications and registrations are current.
(b) (i) Each of Southside and the Southside Subsidiaries has
complied with all laws, regulations and orders (including, without
limitation, zoning ordinances, building codes, Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), and securities, tax,
environmental, civil rights, and occupational health and safety laws
and regulations including, without limitation, in the case of Southside
or any Southside Subsidiary that is a bank or savings association,
banking organization, banking corporation or trust company, all
statutes, rules, regulations and policy statements pertaining to the
conduct of a banking, deposit-taking, lending or related business, or
to the exercise of trust powers) and governing instruments applicable
to it and to the conduct of its business, and (ii) neither Southside
nor any of the Southside Subsidiaries is in default under, and no event
has occurred which, with the lapse of time or notice or both, could
result in the default under, the terms of any judgment, order, writ,
decree, permit, or license of any Regulatory Authority or court,
whether federal, state, municipal or local, and whether at law or in
equity.
(c) Neither Southside nor any of the Southside Subsidiaries is
subject to or reasonably likely to incur a liability as a result of its
ownership, operation, or use of any Southside Property of Southside
(whether directly or, to the knowledge of Southside, as a consequence
of such Southside Property being acquired in foreclosure or in lieu of
foreclosure or being part of the investment portfolio of Southside or
any of the Southside Subsidiaries) (A) that is contaminated by or
contains any Toxic Substance, including, without limitation, petroleum
and petroleum products, asbestos, PCBs, pesticides, herbicides and any
other substance or waste that is hazardous to human health or the
environment and regulated by federal, state or local law, or (B) on
which any Toxic Substance has been stored, disposed of, placed or used
at the Southside Property or in the construction of structures thereon.
"Southside Property" shall include all property (real or personal,
tangible or intangible) owned or controlled by Southside or any of the
Southside Subsidiaries, including, without limitation, property
acquired under foreclosure or in lieu of foreclosure, property in which
any venture capital or similar unit of Southside or any of the
Southside Subsidiaries has an interest and, to the knowledge of
Southside, property held by Southside or any of the Southside
Subsidiaries in its capacity as a trustee. No claim, action, suit or
proceeding is pending or, to the knowledge of Southside, threatened,
and no material claim has been asserted against Southside or any of the
Southside Subsidiaries relating to Southside Property of Southside or
any of the Southside Subsidiaries before any court or other Regulatory
Authority or arbitration tribunal relating to Toxic Substances,
pollution or the environment, and
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there is no outstanding judgment, order, writ, injunction, decree or
award against or affecting Southside or any of the Southside
Subsidiaries with respect to the same.
(d) Neither Southside nor any of the Southside Subsidiaries
has received any notification or communication that has not been
finally resolved from any Regulatory Authority (i) asserting that
Southside or any of the Southside Subsidiaries or any Southside
Property is not in substantial compliance with any of the statutes,
regulations or ordinances that such Regulatory Authority enforces, (ii)
threatening to revoke any license, franchise, permit or governmental
authorization, including, without limitation, such company's status as
an insured depository institution under the FDI Act, or (iii) requiring
or threatening to require Southside or any of the Southside
Subsidiaries, or indicating that Southside or any of the Southside
Subsidiaries may be required, to enter into a cease and desist order,
agreement or memorandum of understanding or any other agreement
restricting or limiting or purporting to direct, restrict or limit in
any manner the operations of Southside or any of the Southside
Subsidiaries, including, without limitation, any restriction on the
payment of dividends. No such cease and desist order, agreement or
memorandum of understanding or other agreement is currently in effect.
(e) Neither Southside nor any of the Southside Subsidiaries is
required by Section 32 of the FDI Act to give prior notice to any
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.
2.16 Labor. No work stoppage involving Southside or any of the
Southside Subsidiaries is pending or, to the knowledge of Southside, threatened.
Neither Southside nor any of the Southside Subsidiaries is involved in, or, to
the knowledge of Southside, threatened with or affected by, any labor dispute,
arbitration, lawsuit or administrative proceeding. None of the employees of
Southside or the Southside Subsidiaries are represented by any labor union or
any collective bargaining organization.
2.17 Material Interests of Certain Persons. Except as set forth in
Southside's Form 10-K for the year ended December 31, 2000, no officer or
director of Southside or any of the Southside Subsidiaries, or any "associate"
(as such term is defined in Rule 14a-1 under the Exchange Act) of any such
officer or director, has any interest in any contract or property (real or
personal, tangible or intangible), used in, or pertaining to the business of,
Southside or any of the Southside Subsidiaries, which would be material to
Southside or any of the Southside Subsidiaries.
2.18 Allowance for Loan and Lease Losses; Non-Performing Assets;
Financial Assets.
(a) All of the accounts, notes and other receivables that are
reflected in the Southside Financial Statements as of December 31,
2000, were acquired in the ordinary course of business and were
collectible in full in the ordinary course of business, except for
probable loan and lease losses that are adequately provided for in the
allowance for loan and lease losses reflected in such Southside
Financial Statements, and the collection experience of Southside and
the Southside Subsidiaries since December 31, 2000 to the date hereof,
has not deviated in any material and adverse manner from the credit and
collection experience of Southside and the Southside Subsidiaries,
taken as a whole, for the year ended December 31, 2000.
(b) The allowances for loan losses contained in the Southside
Financial Statements were established in accordance with the past
practices and experiences of Southside and the Southside Subsidiaries,
and the allowance for loan and lease losses shown on the consolidated
balance sheet of Southside and the Southside Subsidiaries as of
December 31, 2000, was adequate
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in all material respects under the requirements of GAAP, or regulatory
accounting principles, as the case may be, to provide for probable
losses on loans and leases (including, without limitation, accrued
interest receivable) and credit commitments (including, without
limitation, stand-by letters of credit) as of the date of such balance
sheet.
(c) Schedule 2.18(c) sets forth as of March 31, 2001 all
assets classified by Southside as real estate acquired through
foreclosure or repossession, including foreclosed assets.
(d) As of December 31, 2000, the aggregate amount of all
Non-Performing Assets on the books of Southside and the Southside
Subsidiaries did not exceed $6,500,000. "Non-Performing Assets" shall
mean (i) all loans (A) that are contractually past due 90 days or more
in the payment of principal and/or interest, (B) that are on nonaccrual
status, (C) that have been classified "doubtful," "loss" or the
equivalent thereof by any Regulatory Agency or (D) where the interest
rate terms have been reduced and/or the maturity dates have been
extended subsequent to the agreement under which the loan was
originally created due to concerns regarding the borrower's ability to
pay in accordance with such initial terms, and (ii) all assets
classified by Southside or its Subsidiaries, for purposes of this
Section 2.18, or Allegiant or its Subsidiaries, for purposes of Section
3.13, as real estate acquired through foreclosure or in lieu of
foreclosure, including in-substance foreclosures, and all other assets
acquired through foreclosure or in lieu of foreclosure.
(e) All loans receivable (including discounts) and accrued
interest entered on the books of Southside and the Southside
Subsidiaries arose out of bona fide arm's length transactions, were
made for good and valuable consideration in the ordinary course of
Southside's or the appropriate Southside Subsidiary's respective
business, and the notes or other evidences of indebtedness with respect
to such loans or discounts are true and genuine and are what they
purport to be. To the knowledge of Southside, the loans, discounts and
the accrued interest reflected on the books of Southside and the
Southside Subsidiaries are subject to no defenses, set-offs or
counterclaims (including, without limitation, those afforded by usury
or truth-in-lending laws), except as may be provided by bankruptcy,
insolvency or similar laws affecting creditors' rights generally or by
general principles of equity.
(f) The notes and other evidences of indebtedness evidencing
the loans described in Section 2.18(e) above, and all pledges,
mortgages, deeds of trust and other collateral documents or security
instruments relating thereto are and will be, in all material respects,
valid, true, genuine and enforceable, and what they purport to be.
Southside and each of the Southside Subsidiaries has good and valid
title to the investment securities shown on the Southside Financial
Statements and all securities entered on the books of Southside or the
appropriate Southside Subsidiary subsequent to March 31, 2001, except
for those sold or redeemed in the ordinary course of business. A
complete and accurate list of such investment securities as of March
31, 2001 is attached as Schedule 2.18(f).
2.19 Employee Benefit Plans.
(a) Schedule 2.19(a) lists all pension, retirement,
supplemental retirement, stock option, stock purchase, stock ownership,
savings, stock appreciation right, profit sharing, deferred
compensation, consulting, bonus, medical, disability, workers'
compensation, vacation, group insurance, severance and other employee
benefit, incentive and welfare policies, contracts, plans and
arrangements, and all trust agreements related thereto, maintained by
or contributed to by Southside or any of the Southside Subsidiaries in
respect of any of the present or former directors,
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officers, or other employees of and/or consultants to Southside or any
of the Southside Subsidiaries (collectively, "Southside Employee
Plans"). Southside has furnished Allegiant with the following documents
with respect to each Southside Employee Plan: (i) a true and complete
copy of all written documents comprising such Southside Employee Plan
(including amendments and individual agreements relating thereto) or,
if there is no such written document, an accurate and complete
description of the Southside Employee Plan; (ii) the most recently
filed Form 5500 or Form 5500-C/R (including all schedules thereto), if
applicable; (iii) the most recent financial statements and actuarial
reports, if any; (iv) the summary plan description currently in effect
and all material modifications thereof, if any; and (v) the most recent
IRS determination letter, if any.
(b) All Southside Employee Plans have been maintained and
operated in all material respects in accordance with their terms and
the material requirements of all applicable statutes, orders, rules and
final regulations, including, without limitation, to the extent
applicable, ERISA and the Internal Revenue Code of 1986, as amended
(the "Code"). All contributions required to be made to Southside
Employee Plans have been made or reserved on the Southside Financial
Statements with respect to periods ending on or prior to the date of
the Southside Financial Statements.
(c) With respect to each of the Southside Employee Plans which
is a pension plan (as defined in Section 3(2) of ERISA)(the "Pension
Plans"): (i) each Pension Plan which is intended to be "qualified"
within the meaning of Section 401(a) of the Code has been determined to
be so qualified by the IRS and such determination letter may still be
relied upon, and each related trust is exempt from taxation under
Section 501(a) of the Code; (ii) the present value of all benefits
vested and all benefits accrued under each Pension Plan which is
subject to Title IV of ERISA did not, in each case, as of the last
applicable annual valuation date (as indicated on Schedule 2.19(a)),
exceed the value of the assets of the Pension Plan allocable to such
vested or accrued benefits; (iii) there has been no "prohibited
transaction," as such term is defined in Section 4975 of the Code or
Section 406 of ERISA, which could subject any Pension Plan or
associated trust, or Southside or any of the Southside Subsidiaries, to
any material tax or penalty; (iv) no defined benefit Pension Plan or
any trust created thereunder has been terminated, nor has there been
any "reportable events" with respect to any Pension Plan, as that term
is defined in Section 4043 of ERISA since January 1, 1990; and (v) no
Pension Plan or any trust created thereunder has incurred any
"accumulated funding deficiency," as such term is defined in Section
302 of ERISA (whether or not waived). No Pension Plan is a
"multiemployer plan," as that term is defined in Section 3(37) of
ERISA.
(d) Except as reflected on the Southside Financial Statements
or the notes thereto, neither Southside nor any of the Southside
Subsidiaries has any liability for any post-retirement health, medical
or similar benefit of any kind whatsoever, except as required by
statute or regulation.
(e) Neither Southside nor any of the Southside Subsidiaries
has any material liability under ERISA or the Code as a result of its
being a member of a group described in Sections 414(b), (c), (m) or (o)
of the Code.
(f) Neither the execution nor delivery of this Agreement, nor
the consummation of any of the transactions contemplated hereby, will
(i) result in any payment (including, without limitation, severance,
unemployment compensation or golden parachute payment) becoming due to
any director or employee of Southside or any of the Southside
Subsidiaries from any of such entities, (ii) increase any benefit
otherwise payable under any of the Southside Employee Plans or (iii)
result in the acceleration of the time of payment of any such benefit.
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2.20 Conduct of Southside Since December 31, 2000. From and after
December 31, 2000 through the date hereof, except as set forth in the Southside
Financial Statements or the Southside Reports: (i) Southside and the Southside
Subsidiaries have conducted their respective businesses in the ordinary and
usual course consistent with past practices; (ii) except upon the exercise of
Southside Stock Options, neither Southside nor any of the Southside Subsidiaries
has issued, sold, granted, conferred or awarded any of its Equity Securities, or
any corporate debt securities which would be classified under GAAP as long-term
debt on the balance sheets of Southside or the Southside Subsidiaries; (iii)
Southside has not effected any stock split or adjusted, combined, reclassified
or otherwise changed its capitalization; (iv) Southside has not declared, set
aside or paid any dividend (other than its regular quarterly dividends in
amounts not exceeding the last quarterly dividend prior to December 31, 2000 and
with normal record and payment dates consistent with prior practice) or other
distribution in respect of its capital stock, or purchased, redeemed, retired,
repurchased or exchanged, or otherwise acquired or disposed of, directly or
indirectly, any of its Equity Securities, whether pursuant to the terms of such
Equity Securities or otherwise; (v) neither Southside nor any of the Southside
Subsidiaries has incurred any obligation or liability (absolute or contingent),
except liabilities incurred in the ordinary course of business or in connection
with the transactions contemplated by this Agreement, or subjected to Lien any
of its assets or properties other than in the ordinary course of business
consistent with past practice; (vi) neither Southside nor any of the Southside
Subsidiaries has discharged or satisfied any Lien or paid any obligation or
liability (absolute or contingent), other than in the ordinary course of
business; (vii) neither Southside nor any of the Southside Subsidiaries has
sold, assigned, transferred, leased, exchanged, or otherwise disposed of any of
its properties or assets other than for a fair consideration in the ordinary
course of business; (viii) except as required by contract or law, neither
Southside nor any of the Southside Subsidiaries has (A) increased the rate of
compensation of, or paid any bonus to, any of its directors, officers, or other
employees, except normal increases in the ordinary course consistent with past
practice, (B) entered into any new, or amended or supplemented any existing,
employment, management, consulting, deferred compensation, severance, or other
similar contract, (C) entered into, terminated, or substantially modified any of
the Southside Employee Plans or (D) agreed to do any of the foregoing; (ix)
neither Southside nor any Southside Subsidiary has suffered any material damage,
destruction, or loss, whether as the result of fire, explosion, earthquake,
accident, casualty, labor trouble, requisition, or taking of property by any
Regulatory Authority, flood, windstorm, embargo, riot, act of God or the enemy,
or other casualty or event, and whether or not covered by insurance; (x) neither
Southside nor any of the Southside Subsidiaries has canceled or compromised any
debt, except for debts charged off or compromised in accordance with the past
practice of Southside and the Southside Subsidiaries; and (xi) neither Southside
nor any of the Southside Subsidiaries has entered into any material transaction,
contract or commitment outside the ordinary course of its business, except in
connection with the transactions contemplated by this Agreement.
2.21 Absence of Undisclosed Liabilities. Neither Southside nor any of
the Southside Subsidiaries has any debts, liabilities or obligations
individually, or in the aggregate, whether accrued, absolute, contingent or
otherwise and whether due or to become due, which would be required to be
reflected in the Southside Financial Statements or the notes thereto in
accordance with GAAP except: (i) debts, liabilities or obligations reflected on
the Southside Financial Statements and the notes thereto; (ii) operating leases
reflected on Schedule 2.11(b); and (iii) debts, liabilities or obligations
incurred since December 31, 2000 in the ordinary and usual course of their
respective businesses, none of which are for breach of contract, breach of
warranty, torts, infringements or lawsuits.
2.22 Joint Proxy Statement/Prospectus. None of the information
regarding Southside or any of the Southside Subsidiaries to be supplied by
Southside for inclusion or included in (i) the Xxxxxxxxxxxx
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Xxxxxxxxx; (xx) the Joint Proxy Statement/Prospectus to be mailed to Southside's
shareholders in connection with the meeting to be called to consider this
Agreement and the Merger (the "Joint Proxy Statement/Prospectus") or (iii) any
other documents to be filed with any Regulatory Authority in connection with the
transactions contemplated hereby will, at the respective times such documents
are filed with any Regulatory Authority and, with respect to the Registration
Statement, when it becomes effective and with respect to the Joint Proxy
Statement/Prospectus, when mailed to the shareholders of Southside or Allegiant,
be false or misleading with respect to any material fact, or omit to state any
material fact necessary in order to make the statements therein (in the case of
the Proxy Statement/Prospectus, in light of the circumstances under which such
statements were made) not misleading or any amendment thereof or supplement
thereto, at the time of the meeting of Southside's or Allegiant's shareholders
referred to in Section 5.03, be false or misleading with respect to any material
fact, or omit to state any material fact necessary to correct any statement in
any earlier communication with respect to the solicitation of any proxy for such
meeting (in the case of the Proxy Statement/Prospectus, in light of the
circumstances under which such statements were made). All documents which
Southside or any of the Southside Subsidiaries is responsible for filing with
any Regulatory Authority in connection with the Merger will comply as to form in
all material respects with the provisions of applicable law.
2.23 Registration Obligations. Neither Southside nor any of the
Southside Subsidiaries is under any obligation, contingent or otherwise, which
will survive the Effective Time by reason of any agreement to register any
transaction involving any of its securities under the Securities Act.
2.24 Tax and Regulatory Matters. Neither Southside nor any of the
Southside Subsidiaries has taken, agreed to take or will take any action or has
any knowledge of any fact or circumstance that would (i) prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a)(1)(A) of the
Code, or (ii) materially impede or delay receipt of any approval referred to in
Section 6.01(b) or the consummation of the transactions contemplated by this
Agreement.
2.25 Brokers and Finders. Except for Xxxxxx, Xxxxxxxx & Company,
Incorporated, whose fees will be paid by Southside, neither Southside nor any of
the Southside Subsidiaries nor any of their respective officers, directors or
employees has employed any broker or finder or incurred any liability for any
financial advisory fees, brokerage fees, commissions or finder's fees, and no
broker or finder has acted directly or indirectly for Southside or any of the
Southside Subsidiaries in connection with this Agreement or the transactions
contemplated hereby.
2.26 Interest Rate Risk Management Instruments. Neither Southside nor
any Southside Subsidiary has any interest rate swaps, caps, floors and option
agreements and other interest rate risk management arrangements to which
Southside or any of the Southside Subsidiaries is a party or by which any of
their properties or assets may be bound.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ALLEGIANT
As an inducement to Southside to enter into and perform its obligations
under this Agreement, and notwithstanding any examinations, inspections, audits
or other investigations made by Southside, subject to Section 1.17 hereof and
except as set forth in a section of the Disclosure Schedule corresponding to the
relevant Section of Article III set forth below, Allegiant hereby represents and
warrants to Southside as follows:
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3.01 Organization and Authority. Allegiant is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Missouri, is duly qualified to do business and is in good standing in all
jurisdictions where its ownership or leasing of property or the conduct of its
business requires it to be so qualified and has corporate power and authority to
own its properties and assets and to carry on its business as it is now being
conducted. Allegiant is registered as a bank holding company with the Federal
Reserve Board under the BHCA. True and complete copies of the Articles of
Incorporation, charter and By-Laws of Allegiant, and the Articles of Association
and By-Laws of each Allegiant Subsidiary, each as in effect on the date of this
Agreement, are attached hereto as Schedule 3.01.
3.02 Subsidiaries.
(a) Schedule 3.02 sets forth a complete and correct list of
all of Allegiant's Subsidiaries (each a "Allegiant Subsidiary" and,
collectively, the "Allegiant Subsidiaries"), and all outstanding Equity
Securities of each Allegiant Subsidiary, all of which are owned
directly or indirectly by Allegiant. All of the outstanding shares of
capital stock of the Allegiant Subsidiaries owned directly or
indirectly by Allegiant are validly issued, fully paid and
nonassessable and are owned free and clear of any Lien with respect
thereto. Each of the Allegiant Subsidiaries is a corporation, bank or
savings bank duly incorporated or organized and validly existing under
the laws of its jurisdiction of incorporation or organization, and has
corporate power and authority to own or lease its properties and assets
and to carry on its business as it is now being conducted. Each of the
Allegiant Subsidiaries is duly qualified to do business in each
jurisdiction where its ownership or leasing of property or the conduct
of its business requires it to be so qualified.
(b) ALLEGIANT BANK ("AB") is a banking association duly
organized and validly existing under the laws of the State of Missouri.
The deposits of AB are insured by the FDIC under the FDI Act.
3.03 Capitalization of Allegiant. The authorized capital stock of
Allegiant consists of 20,000,000 shares of Allegiant Common Stock, of which, as
of March 31, 2001, 8,897,111 shares were issued and outstanding. As of March 31,
2001, Allegiant had reserved 711,700 shares of Allegiant Common Stock for
issuance under various employee and/or director stock option, incentive and/or
benefit plans (collectively, "Allegiant Employee/Director Stock Grants"). From
March 31, 2001 through the date of this Agreement, no shares of Allegiant Common
Stock have been issued, excluding any such shares which may have been issued in
connection with the Investment Plan or Allegiant Employee/Director Stock Grants.
Except for the Allegiant Dividend Reinvestment Plan (the "Investment Plan"),
Allegiant does not have and is not bound by any outstanding subscriptions,
options, warrants, calls, commitments or agreements of any character calling for
the issuance of any share of Allegiant Common Stock or any other Equity
Securities of Allegiant. Neither Allegiant nor any Allegiant Subsidiary has
taken or agreed to take any action or has any knowledge of any fact or
circumstance and neither Allegiant nor Allegiant will take any action that would
(i) prevent the transactions contemplated hereby from qualifying as a
reorganization within the meaning of Section 368(a)(1)(A) of the Code, or (ii)
materially impede or delay receipt of any approval referred to in Section
6.01(b) or the consummation of the transactions contemplated by this Agreement.
Except as set forth above, there are no other Equity Securities of Allegiant
outstanding. All of the issued and outstanding shares of Allegiant Common Stock
are validly issued, fully paid, and nonassessable, and have not been issued in
violation of any preemptive right of any shareholder of Allegiant.
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3.04 Authorization.
(a) Allegiant has the corporate power and authority to enter
into this Agreement and the Southside and Allegiant Voting Agreements
and to carry out its obligations under the Southside and Allegiant
Voting Agreements and, subject to the approval of this Agreement, the
Merger and the transactions contemplated thereby by the shareholders of
Allegiant and the Regulatory Authorities, to carry out its obligations
under this Agreement. The only shareholder vote required for Allegiant
to approve this Agreement, the Merger and the transactions contemplated
hereby and thereby is the affirmative vote of the holders of at least
two-thirds of the outstanding shares of Allegiant Common Stock entitled
to vote at a meeting called for such purpose. The execution, delivery
and performance of this Agreement and the Southside and Allegiant
Voting Agreements by Allegiant and the consummation by Allegiant of the
transactions contemplated hereby and thereby and the consummation by
Allegiant of the transactions contemplated hereby and thereby in
accordance with and subject to the terms of this Agreement and the
Southside and Allegiant Voting Agreements have been duly authorized by
all requisite corporate action of Allegiant, except, in the case of
this Agreement, for the approval of this Agreement and the transactions
contemplated hereby by the Allegiant shareholders. The Southside and
Allegiant Voting Agreements are and, subject to the receipt of such
approvals of the Allegiant shareholders and the Regulatory Authorities
as may be required by statute or regulation, this Agreement is, a valid
and binding obligation of Allegiant enforceable against it in
accordance with their respective terms. Allegiant's Board of Directors
has taken all actions so that no Missouri antitakeover measure, whether
pursuant to Allegiant's Articles of Incorporation or Bylaws, applicable
Missouri law, or otherwise will apply to the Merger or this Agreement
or the transactions contemplated hereby.
(b) Neither the execution, delivery and performance by
Allegiant of this Agreement or the Southside or Allegiant Voting
Agreements, nor the consummation by Allegiant of the transactions
contemplated hereby or thereby, nor compliance by Allegiant with any of
the provisions hereof or thereof, will (i) violate, conflict with or
result in a breach of any provisions of, or constitute a default (or an
event which, with notice or lapse of time or both, would constitute a
default) or result in the termination of, or accelerate the performance
required by, or result in a right of termination or acceleration of, or
result in the creation of, any Lien upon any of the properties or
assets of Allegiant or any of the Allegiant Subsidiaries under any of
the terms, conditions or provisions of (x) its Articles of
Incorporation, charter or By-Laws, or (y) any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument
or obligation to which Allegiant or any of the Allegiant Subsidiaries
is a party or by which it may be bound, or to which Allegiant or any of
the Allegiant Subsidiaries or any of the properties or assets of
Allegiant or the Allegiant Subsidiaries may be subject, or (ii) subject
to compliance with the statutes and regulations referred to in
subsection (c) of this Section 3.04, violate any judgment, ruling,
order, writ, injunction, decree, statute, rule or regulation applicable
to Allegiant or any of the Allegiant Subsidiaries or any of their
respective properties or assets.
(c) Other than in connection with or in compliance with the
provisions of the Missouri Statute, the Securities Act, the Exchange
Act, the securities or blue sky laws of the various states or filings,
consents, reviews, authorizations, approvals or exemptions required
under the BHCA, the FDI Act or any required approvals of any other
Regulatory Authority, no notice to, filing with, exemption or review
by, or authorization, consent or approval of, any public body or
authority is necessary for the consummation by Allegiant of the
transactions contemplated by this Agreement.
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3.05 Allegiant Financial Statements.
(a) Attached hereto as Schedule 3.05(a) is a copy of
Allegiant's Form 10-K for the year ended December 31, 2000, and the
consolidated unaudited balance sheets, statements of operations,
changes in shareholders' equity for the each month ended and as of
January 31, 2001, February 28, 2001, and March 31, 2001.
(b) The financial statements contained in the documents
referenced in Schedule 3.05(a) are referred to collectively as the
"Allegiant Financial Statements." The Allegiant Financial Statements
have been prepared in accordance with GAAP, consistently applied,
during the periods involved, and present fairly the consolidated
financial position of Allegiant and the Allegiant Subsidiaries at the
dates thereof and the consolidated results of operations, changes in
shareholders' equity and cash flows, as applicable, of Allegiant and
the Allegiant Subsidiaries for the periods stated therein, subject to
the exclusion in the monthly financial statements of footnotes required
by GAAP and to normal year-end adjustments which are not individually
or in the aggregate material. The Allegiant Financial Statements are
derived from the books and records of Allegiant and the Allegiant
Subsidiaries, which are complete and accurate in all respects and have
been maintained in accordance with good business practices.
3.06 Allegiant Reports. Since January 1, 1997, each of Allegiant and
its Subsidiaries has timely filed any and all Allegiant Reports, together with
any required amendments thereto, that it was required to file with any
Regulatory Authority. All such reports and statements filed with any such
Regulatory Authority are collectively referred to herein as the "Allegiant
Reports." As of its respective date, each Allegiant Report complied in all
material respects with all the rules and regulations promulgated by the
applicable Regulatory Authority 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 in order to make the statements therein, in light of the circumstances
under which they were made, not misleading. With respect to Allegiant Reports
filed with the Regulatory Authorities, there is no material unresolved
violation, criticism or exception by any Regulatory Authority with respect to
any report or statement filed by, or any examinations of, Allegiant or any of
the Allegiant Subsidiaries.
3.07 Environmental Matters. Neither Allegiant nor any of the Allegiant
Subsidiaries has caused or allowed the generation, treatment, storage, disposal
or release at any of its owned or leased real properties of any Toxic Substance,
except in accordance in all material respects with all applicable federal, state
and local laws and regulations. There are no underground storage tanks located
on, in or under any real property owned or leased by Allegiant or any Allegiant
Subsidiary.
3.08 Taxes. Allegiant and each Allegiant Subsidiary have timely filed
all material income tax returns required to be filed ("Allegiant Returns"). Each
of Allegiant and the Allegiant Subsidiaries has paid, or set up adequate
reserves on the Allegiant Financial Statements for the payment of, all income
taxes shown on the Allegiant Returns required to be paid in respect of the
periods covered by such Allegiant Returns. Neither Allegiant nor any Allegiant
Subsidiary has any material liability for any such income taxes in excess of the
amounts so paid or reserves so established and, to the knowledge of Allegiant,
no material deficiencies for any such income tax, have been proposed, asserted
or assessed in writing (tentatively or definitely) against Allegiant or any of
the Allegiant Subsidiaries which have not been settled or would not be covered
by existing reserves. Neither Allegiant nor any of the Allegiant Subsidiaries is
delinquent in the payment of any material income tax nor has it requested any
extension of time within which to file any income tax returns in respect of any
fiscal year which have not since been filed and no requests for waivers of the
time to assess any tax are pending. No federal or state income tax return of
Allegiant or any Allegiant Subsidiaries has been audited by the IRS or any state
tax authority for
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the three (3) most recent full calendar years. There is no deficiency or refund
litigation with respect to the Allegiant Returns. Neither Allegiant nor any of
the Allegiant Subsidiaries has extended or waived any statute of limitations
that is currently in effect on the assessment of any tax due.
3.09 Loans, Commitments and Contracts.
(a) Schedule 3.09(a) contains a complete and accurate listing
of all contracts entered into with respect to deposits and repurchase
agreements of $5,000,000 or more, as of March 31, 2001, by account, and
all loan agreements, notes, security agreements, bankers' acceptances,
outstanding letters of credit, participation agreements, and other
documents relating to or involving extensions of credit by Allegiant or
any of the Allegiant Subsidiaries and all loan commitments and
commitments to issue letters of credit and other commitments to extend
credit with respect to any one entity in excess of $5,000,000 to which
Allegiant or any of the Allegiant Subsidiaries is a party or by which
it is bound, by account.
(b) Except for the contracts and agreements required to be
listed on Schedule 3.09(a) and the loans required to be listed on
Schedule 3.09(f), neither Allegiant nor any of the Allegiant
Subsidiaries is a party to or is bound by any:
(i) agreement, contract, arrangement, understanding
or commitment with any labor union;
(ii) material franchise or license agreement,
excluding software license agreements entered into in the
ordinary course of business;
(iii) employment, severance, termination pay, agency,
consulting or similar agreement or commitment in respect of
personal services;
(iv) material agreement, arrangement or commitment
(A) not made in the ordinary course of business, and (B)
pursuant to which Allegiant or any of the Allegiant
Subsidiaries is or may become obligated to invest in or
contribute to any Allegiant Subsidiary other than pursuant to
Allegiant employee benefit plans or agreements relating to
joint ventures or partnerships set forth in Schedule 3.02,
true and complete copies of which have been furnished to
Southside;
(v) agreement, indenture or other instrument not
disclosed in the Allegiant Financial Statements relating to
the borrowing of money by Allegiant or any of the Allegiant
Subsidiaries or the guarantee by Allegiant or any of the
Allegiant Subsidiaries of any such obligation (other than
trade payables or instruments related to transactions entered
into in the ordinary course of business by Allegiant or any of
the Allegiant Subsidiaries, such as deposits, FHLB and Federal
Funds borrowings and repurchase and reverse repurchase
agreements), other than such agreements, indentures or
instruments providing for annual payments of less than
$200,000;
(vi) contract containing covenants which limit the
ability of Allegiant or any of the Allegiant Subsidiaries to
compete in any line of business or with any person or which
involves any restrictions on the geographical area in which,
or method by which, Allegiant or any of the Allegiant
Subsidiaries may carry on their respective businesses (other
that as may be required by law or any applicable Regulatory
Authority);
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(vii) lease with annual rental payments aggregating
$100,000 or more;
(viii) loans or other obligations payable or owing to
any officer, director or employee except (A) salaries, wages
and directors' fees or other compensation incurred and accrued
in the ordinary course of business and (B) obligations due in
respect of any depository accounts maintained by any of the
foregoing with Allegiant or any of the Allegiant Subsidiaries
in the ordinary course of business; or
(ix) other agreement, contract, arrangement,
understanding or commitment involving an obligation by
Allegiant or any of the Allegiant Subsidiaries of more than
$250,000 that cannot be canceled without cost or penalty upon
notice of 30 days or less, other than contracts entered into
in respect of deposits, loan agreements and commitments,
notes, security agreements, repurchase and reverse repurchase
agreements, bankers' acceptances, outstanding letters of
credit and commitments to issue letters of credit,
participation agreements and other documents relating to
transactions entered into by Allegiant or any of the Allegiant
Subsidiaries in the ordinary course of business and not
involving extensions of credit with respect to any one entity
or related group of entities in excess of $1,000,000.
(c) Allegiant and/or the Allegiant Subsidiaries carry
property, liability, director and officer errors and omissions,
products liability and other insurance coverage as set forth in
Schedule 3.09(c) under the heading "Insurance."
(d) True, correct and complete copies of the agreements,
contracts, leases, insurance policies and other documents referred to
in Schedules 3.09(a), (b) and (c) have been or shall be furnished or
made available to Southside.
(e) Except as set forth on the applicable schedule, each of
the agreements, contracts, leases, insurance policies and other
documents referred to in Schedules 3.09 (a), (b) and (c) is a valid,
binding and enforceable obligation of the Allegiant or the Allegiant
Subsidiary who is a party thereto and to Allegiant's knowledge, the
other parties sought to be bound thereby, except as the enforceability
thereof against the parties thereto may be limited by bankruptcy,
insolvency, reorganization, moratorium and other laws now or hereafter
in effect relating to the enforcement of creditors' rights generally,
and except that equitable principles may limit the right to obtain
specific performance or other equitable remedies.
(f) Schedule 3.09(f) under the heading "Loans" contains a
true, correct and complete listing, as of March 31, 2001, by account,
of (i) all loans in excess of $500,000 of Allegiant or any of the
Allegiant Subsidiaries that have been accelerated during the past three
months; (ii) all loan commitments or lines of credit of Allegiant or
any of the Allegiant Subsidiaries in excess of $500,000 which have been
terminated by Allegiant or any of the Allegiant Subsidiaries during the
past three months by reason of default or adverse developments in the
condition of the borrower or other events or circumstances affecting
the credit of the borrower; (iii) all loans, lines of credit and loan
commitments in excess of $500,000, as to which Allegiant or any of the
Allegiant Subsidiaries has given written notice of its intent to
terminate during the past three months; (iv) with respect to all loans
in excess of $500,000 all notification letters and other written
communications from Allegiant or any of the Allegiant Subsidiaries to
any of their respective borrowers, customers or other parties during
the past three months wherein Allegiant or any of the Allegiant
Subsidiaries has requested or demanded that actions be taken to correct
existing defaults or facts or circumstances which may become defaults;
(v) each borrower, customer or
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other party which has notified Allegiant or any of the Allegiant
Subsidiaries during the past three months of, or has asserted against
Allegiant or any of the Allegiant Subsidiaries, in each case in
writing, any "lender liability" or similar claim, and, to the knowledge
of Allegiant, each borrower, customer or other party which has given
Allegiant or any of the Allegiant Subsidiaries any oral notification
of, or orally asserted to or against Allegiant or any of the Allegiant
Subsidiaries, any such claim; or (vi) all loans in excess of $250,000
(A) that are contractually past due 90 days or more in the payment of
principal and/or interest, (B) that are on non-accrual status, (C) that
have been classified "doubtful," "loss" or the equivalent thereof by
any Regulatory Authority, (D) where a reasonable doubt exists as to the
timely future collectibility of principal and/or interest, whether or
not interest is still accruing or the loan is less than 90 days past
due, (E) the interest rate terms have been reduced and/or the maturity
dates have been extended subsequent to the agreement under which the
loan was originally created due to concerns regarding the borrower's
ability to pay in accordance with such initial terms, or (F) where a
specific reserve allocation exists in connection therewith.
3.10 Absence of Defaults. Neither Allegiant nor any of the Allegiant
Subsidiaries is in violation of its Articles of Incorporation, charter or
By-Laws or in default under any material agreement, commitment, arrangement,
lease, insurance policy or other instrument, whether entered into in the
ordinary course of business or otherwise and whether written or oral, and, to
the knowledge of Allegiant, no third party is in default thereunder, nor has any
event occurred which, through the passage of time or the giving of notice
(including, without limitation, the consummation of the transactions
contemplated by this Agreement), or both, would constitute a default thereunder
or would cause the acceleration of any obligation of any party thereto or the
creation of a lien or encumbrance upon Allegiant or any of the Allegiant
Subsidiaries' assets.
3.11 Litigation and Other Proceedings. Except as otherwise disclosed in
the Allegiant Financial Statements, neither Allegiant nor any of the Allegiant
Subsidiaries is a party to any pending or, to the knowledge of Allegiant,
threatened claim, action, suit, investigation or proceeding, or is subject to
any order, judgment or decree. Without limiting the generality of the foregoing,
there are no actions, suits or proceedings pending or, to the knowledge of
Allegiant, threatened against Allegiant or any of the Allegiant Subsidiaries or
any of their respective officers or directors by any shareholder of Allegiant or
any of the Allegiant Subsidiaries (or any former shareholder of Allegiant or any
of the Allegiant Subsidiaries) or involving claims under the Community
Reinvestment Act of 1977, as amended, the Bank Secrecy Act, the fair lending
laws or any other similar laws.
3.12 Compliance with Laws.
(a) Allegiant and each of the Allegiant Subsidiaries have all
permits, licenses, authorizations, orders and approvals of, and have
made all filings, applications and registrations with, all Regulatory
Authorities that are required in order to permit them to own or lease
their respective properties and assets and to carry on their respective
businesses as presently conducted; all such permits, licenses,
certificates of authority, orders and approvals are in full force and
effect and, to the knowledge of Allegiant, no suspension or
cancellation of any of them is threatened; and all such filings,
applications and registrations are current.
(b) (i) Each of Allegiant and the Allegiant Subsidiaries has
complied with all laws, regulations and orders (including, without
limitation, zoning ordinances, building codes, ERISA, and securities,
tax, environmental, civil rights, and occupational health and safety
laws and regulations including, without limitation, in the case of
Allegiant or any Allegiant Subsidiary that is a bank or savings
association, banking organization, banking corporation or trust
company, all
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statutes, rules, regulations and policy statements pertaining to the
conduct of a banking, deposit-taking, lending or related business, or
to the exercise of trust powers) and governing instruments applicable
to it and to the conduct of its business, and (ii) neither Allegiant
nor any of the Allegiant Subsidiaries is in default under, and no event
has occurred which, with the lapse of time or notice or both, could
result in the default under, the terms of any judgment, order, writ,
decree, permit, or license of any Regulatory Authority or court,
whether federal, state, municipal or local, and whether at law or in
equity.
(c) Neither Allegiant nor any of the Allegiant Subsidiaries is
subject to or reasonably likely to incur a liability as a result of its
ownership, operation, or use of any Allegiant Property of Allegiant
(whether directly or, to the knowledge of Allegiant, as a consequence
of such Allegiant Property being acquired in foreclosure or in lieu of
foreclosure or being part of the investment portfolio of Allegiant or
any of the Allegiant Subsidiaries) (A) that is contaminated by or
contains any Toxic Substance, including, without limitation, petroleum
and petroleum products, asbestos, PCBs, pesticides, herbicides and any
other substance or waste that is hazardous to human health or the
environment and regulated by federal, state or local law, or (B) on
which any Toxic Substance has been stored, disposed of, placed or used
at the Allegiant Property or in the construction of structures thereon.
"Allegiant Property" shall include all property (real or personal,
tangible or intangible) owned or controlled by Allegiant or any of the
Allegiant Subsidiaries, including, without limitation, property
acquired under foreclosure or in lieu of foreclosure, property in which
any venture capital or similar unit of Allegiant or any of the
Allegiant Subsidiaries has an interest and, to the knowledge of
Allegiant, property held by Allegiant or any of the Allegiant
Subsidiaries in its capacity as a trustee. No claim, action, suit or
proceeding is pending or, to the knowledge of Allegiant, threatened,
and no material claim has been asserted against Allegiant or any of the
Allegiant Subsidiaries relating to Allegiant Property of Allegiant or
any of the Allegiant Subsidiaries before any court or other Regulatory
Authority or arbitration tribunal relating to Toxic Substances,
pollution or the environment, and there is no outstanding judgment,
order, writ, injunction, decree or award against or affecting Allegiant
or any of the Allegiant Subsidiaries with respect to the same.
(d) Neither Allegiant nor any of the Allegiant Subsidiaries
has received any notification or communication that has not been
finally resolved from any Regulatory Authority (i) asserting that
Allegiant or any of the Allegiant Subsidiaries or any Allegiant
Property is not in substantial compliance with any of the statutes,
regulations or ordinances that such Regulatory Authority enforces, (ii)
threatening to revoke any license, franchise, permit or governmental
authorization, including, without limitation, such company's status as
an insured depository institution under the FDI Act, or (iii) requiring
or threatening to require Allegiant or any of the Allegiant
Subsidiaries, or indicating that Allegiant or any of the Allegiant
Subsidiaries may be required, to enter into a cease and desist order,
agreement or memorandum of understanding or any other agreement
restricting or limiting or purporting to direct, restrict or limit in
any manner the operations of Allegiant or any of the Allegiant
Subsidiaries, including, without limitation, any restriction on the
payment of dividends. No such cease and desist order, agreement or
memorandum of understanding or other agreement is currently in effect.
(e) Neither Allegiant nor any of the Allegiant Subsidiaries is
required by Section 32 of the FDI Act to give prior notice to any
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.
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3.13 Allowance for Loan and Lease Losses; Non-Performing Assets;
Financial Assets.
(a) All of the accounts, notes and other receivables that are
reflected in the Allegiant Financial Statements as of December 31,
2000, were acquired in the ordinary course of business and were
collectible in full in the ordinary course of business, except for
probable loan and lease losses that are adequately provided for in the
allowance for loan and lease losses reflected in such Allegiant
Financial Statements, and the collection experience of Allegiant and
the Allegiant Subsidiaries since December 31, 2000 to the date hereof,
has not deviated in any material and adverse manner from the credit and
collection experience of Allegiant and the Allegiant Subsidiaries,
taken as a whole, for the three months ended December 31, 2000.
(b) The allowances for loan losses contained in the Allegiant
Financial Statements were established in accordance with the past
practices and experiences of Allegiant and the Allegiant Subsidiaries,
and the allowance for loan and lease losses shown on the consolidated
balance sheet of Allegiant and the Allegiant Subsidiaries as of
December 31, 2000, were adequate in all material respects under the
requirements of GAAP, or regulatory accounting principles, as the case
may be, to provide for probable losses on loans and leases (including,
without limitation, accrued interest receivable) and credit commitments
(including, without limitation, stand-by letters of credit) as of the
date of such balance sheet.
(c) Schedule 3.13(c) sets forth as of March 31, 2001 all
assets classified by Allegiant as real estate acquired through
foreclosure or repossession, including foreclosed assets.
(d) As of December 31, 2000, the aggregate amount of all
Non-Performing Assets on the books of Allegiant and the Allegiant
Subsidiaries did not exceed $3,400,000.
(e) All loans receivable (including discounts) and accrued
interest entered on the books of Allegiant and the Allegiant
Subsidiaries arose out of bona fide arm's length transactions, were
made for good and valuable consideration in the ordinary course of
Allegiant's or the appropriate Allegiant Subsidiary's respective
business, and the notes or other evidences of indebtedness with respect
to such loans or discounts are true and genuine and are what they
purport to be. To the knowledge of Allegiant, the loans, discounts and
the accrued interest reflected on the books of Allegiant and the
Allegiant Subsidiaries are subject to no defenses, set-offs or
counterclaims (including, without limitation, those afforded by usury
or truth-in-lending laws), except as may be provided by bankruptcy,
insolvency or similar laws affecting creditors' rights generally or by
general principles of equity.
(f) The notes and other evidences of indebtedness evidencing
the loans described in Section 3.13 above, and all pledges, mortgages,
deeds of trust and other collateral documents or security instruments
relating thereto are and will be, in all material respects, valid,
true, genuine and enforceable, and what they purport to be. Allegiant
and each of the Allegiant Subsidiaries has good and valid title to the
investment securities shown on the Allegiant Financial Statements and
all securities entered on the books of Allegiant or the appropriate
Allegiant Subsidiary subsequent to December 31, 2000, except for those
sold or redeemed in the ordinary course of business. A complete and
accurate list of such investment securities as of December 31, 2000 is
attached as Schedule 3.13(f). Such list shall be updated each month in
writing until the Closing.
3.14 Absence of Undisclosed Liabilities. Neither Allegiant nor any of
the Allegiant Subsidiaries has any debts, liabilities or obligations equal to or
exceeding $50,000 individually, or $100,000 in the aggregate, whether accrued,
absolute, contingent or otherwise and whether due or to
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become due, which would be required to be reflected in the Allegiant Financial
Statements or the notes thereto in accordance with GAAP except: (i) debts,
liabilities or obligations reflected on the Allegiant Financial Statements and
the notes thereto; (ii) operating leases reflected on Schedule 3.09(b); and
(iii) debts, liabilities or obligations incurred since December 31, 2000 in the
ordinary and usual course of their respective businesses, none of which are for
breach of contract, breach of warranty, torts, infringements or lawsuits.
3.15 Material Adverse Effect. Since December 31, 2000, there has been
no Material Adverse Effect on Allegiant and the Allegiant Subsidiaries, taken as
a whole.
3.16 Joint Proxy Statement/Prospectus. None of the information
regarding Allegiant or any of the Allegiant Subsidiaries to be supplied by
Allegiant for inclusion or included in (i) the Registration Statement, (ii) the
Joint Proxy Statement/Prospectus, or (iii) any other documents to be filed with
any Regulatory Authority in connection with the transactions contemplated hereby
will, at the respective times such documents are filed with any Regulatory
Authority and, with respect to the Registration Statement, when it becomes
effective and, with respect to the Joint Proxy Statement/Prospectus, when mailed
to the shareholders of Southside or Allegiant, be false or misleading with
respect to any material fact, or omit to state any material fact necessary in
order to make the statements therein (in the case of the Proxy
Statement/Prospectus, in light of the circumstances under which such statements
were made) not misleading or, in the case of the Joint Proxy
Statement/Prospectus or any amendment thereof or supplement thereto, at the time
of the meeting of Southside's or Allegiant's shareholders referred to in Section
5.03, be false or misleading with respect to any material fact, or omit to state
any material fact necessary to correct any statement in any earlier
communication with respect to the solicitation of any proxy for such meeting (in
the case of the Proxy Statement/Prospectus, in light of the circumstances under
which such statements were made). All documents which Allegiant is responsible
for filing with any Regulatory Authority in connection with the Merger will
comply as to form in all material respects with the provisions of applicable
law.
3.17 Tax and Regulatory Matters. Neither Allegiant nor any of the
Allegiant Subsidiaries has taken, agreed to take or will take any action or has
any knowledge of any fact or circumstance that would (i) prevent the Merger from
qualifying as a reorganization within the meaning of Section 368(a)(1)(A) of the
Code, or (ii) materially impede or delay receipt of any approval referred to in
Section 6.01(b) or the consummation of the transactions contemplated by this
Agreement.
3.18 Brokers and Finders. Except for Xxxx Xxxxx Xxxx Xxxxxx,
Incorporated, neither Allegiant nor any of the Allegiant Subsidiaries nor any of
their respective officers, directors or employees has employed any broker or
finder or incurred any liability for any financial advisory fees, brokerage
fees, commissions or finder's fees, and no broker or finder has acted directly
or indirectly for Allegiant in connection with this Agreement or the
transactions contemplated hereby.
3.19 No Negotiations. The parties hereto acknowledge that Allegiant has
engaged in certain preliminary discussions with First Banks, Inc., a Missouri
corporation ("First Banks"), regarding a possible transaction which could have
resulted in the disposition of certain Southside Subsidiaries to First Banks in
connection with the Merger. Allegiant hereby represents and warrants to
Southside that such discussions have been terminated and Allegiant has no
agreement, arrangement or understanding with First Banks with respect to such
possible transaction or other similar transaction involving First Banks, its
associates or its affiliates.
3.20 Change of Control Payments. Neither the execution nor delivery of
this Agreement, nor the consummation of any of the transactions contemplated
hereby, will (i) result in any payment
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(including, without limitation, severance, unemployment compensation or golden
parachute payment) becoming due to any director or employee of Allegiant or any
of the Allegiant Subsidiaries from any of such entities, (ii) increase any
benefit otherwise payable under any of the Allegiant Employee Plans or (iii)
result in the acceleration of the time of payment of any such benefit; provided,
however, employees or directors of Allegiant may be paid merit based
discretionary awards based upon job performance related to the transactions
contemplated hereby.
ARTICLE IV
CONDUCT OF BUSINESSES PRIOR TO THE EFFECTIVE TIME
4.01 Conduct of Businesses Prior to the Effective Time. During the
period from the date of this Agreement to the Effective Time, Southside and each
of the Southside Subsidiaries shall conduct their businesses according to the
ordinary and usual course consistent with past and current practices and shall
use their best efforts to maintain and preserve their business organization,
employees and advantageous business relationships and retain the services of
their officers and key employees. During the period from the date of this
Agreement to the Effective Time, Allegiant and each of the Allegiant
Subsidiaries shall conduct their businesses according to the ordinary and usual
course consistent with past and current practices and shall use their best
efforts to maintain and preserve their business organization, employees and
advantageous business relationships and retain the services of their officers
and key employees; provided, however, Allegiant may take such actions as are
necessary or desirable to finance its obligations under the Merger (although the
obligations of Allegiant to consummate the transactions contemplated hereby are
not contingent or conditioned upon Allegiant's receipt of any such financing)
and nothing herein shall prevent Allegiant from entertaining, negotiating or
entering into any agreement with respect to the possible acquisition of
Allegiant by a third party (provided that Allegiant shall promptly advise
Southside with respect to any such matters and, in the event of any such
agreement or transaction with a third party prior to the Effective Time and as a
condition thereto, mutually satisfactory amendments shall be made to this
Agreement to place the Southside shareholders in the same position (economic or
otherwise) they would have been in had such agreement or transaction been
entered into after the Effective Time). Allegiant covenants and agrees that
prior to the Effective Time, it shall not enter into any agreement pursuant to
which Allegiant agrees to acquire a third party business which would be deemed
to be "significant" to Allegiant on a consolidated basis under any of the
conditions of Rule 1-02(w) of SEC Regulation S-X. The parties acknowledge that
the taking by Allegiant of any actions permitted pursuant to this Section 4.01
shall not be deemed a breach, for any purpose, of a representation or warranty
hereunder that relates to the subject matter of such actions.
4.02 Forbearances of Southside. Except as set forth in Schedule 4.02,
and except to the extent required by law, regulation or Regulatory Authority or
contemplated by or expressly permitted pursuant to the terms of this Agreement,
or with the prior written consent of Allegiant during the period from the date
of this Agreement to the Effective Time (which consent shall not be unreasonably
withheld, delayed or conditioned), Southside shall not and shall not permit any
of the Southside Subsidiaries to:
(a) declare, set aside or pay any dividends or other
distributions, directly or indirectly, in respect of its capital stock,
other than its regular quarterly dividends in amounts not exceeding the
last quarterly dividend and with normal record and payment dates
consistent with prior practice;
(b) except as otherwise set forth in Section 5.09(d), enter
into or amend any employment, severance or similar agreement or
arrangement with any director, officer or
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employee, or materially modify any of the Southside Employee Plans or
grant any salary or wage increase or materially increase any employee
benefit (including incentive or bonus payments), except (i) normal
individual increases in compensation to employees who are not directors
or officers consistent with past practice or, with the consent of
Allegiant not to be unreasonably withheld, to directors and officers,
and (ii) as required by law or contract;
(c) propose or adopt any amendments to its Articles of
Incorporation or other charter document or By-Laws, except as
contemplated hereby;
(d) issue, sell, grant, confer or award any of its Equity
Securities, except that the Southside may issue shares of Southside
Common Stock upon exercise of the Southside Stock Options outstanding
on the date of this Agreement, or effect any stock split or adjust,
combine, reclassify or otherwise change its capitalization as it
existed on the date of this Agreement, other than with respect to its
KSOP;
(e) purchase, redeem, retire, repurchase or exchange, or
otherwise acquire or dispose of, directly or indirectly, any of its
Equity Securities, whether pursuant to the terms of such Equity
Securities or otherwise;
(f) cause or permit any Southside Subsidiary to enter into,
renew or increase any loan or credit commitment (including stand-by
letters of credit) to, or invest or agree to invest in any person or
entity or modify any of the material provisions or renew or otherwise
extend the maturity date of any existing loan or credit commitment
(collectively, "Lend to") in an amount equal to or in excess of
$5,000,000 or in any amount which, when aggregated with any and all
loans or credit commitments of Southside and the Southside Subsidiaries
to such person or entity, would be equal to or in excess of $5,000,000
without the prior written consent of Allegiant; provided, however, that
nothing in this paragraph shall prohibit Southside or any Southside
Subsidiary from honoring any contractual obligation in existence on the
date of this Agreement. Notwithstanding this Section 4.02(f), Southside
shall be authorized without first consulting with Allegiant or
obtaining Allegiant's prior written consent, to cause or permit
Southside and the Southside Subsidiaries to increase the aggregate
amount of any credit facilities theretofore established in favor of any
particular person or entity (each a "Pre-Existing Facility"), provided
that the aggregate amount of any and all such increases to any
particular person or entity shall not be in excess of $500,000;
(g) take any action that would (i) prevent or impede the
Merger from qualifying as a reorganization within the meaning of
Section 368(a)(1)(A) of the Code, or (ii) materially impede or delay
the consummation of the transactions contemplated by this Agreement or
the ability of Allegiant or Southside to obtain any approval of any
Regulatory Authority required for the transactions contemplated by this
Agreement or to perform its covenants and agreements under this
Agreement;
(h) other than in the ordinary course of business consistent
with past practice, incur any indebtedness for borrowed money or
assume, guarantee, endorse or otherwise as an accommodation become
responsible or liable for the obligations of any other individual,
corporation or other entity;
(i) materially restructure or change its investment securities
portfolio, through purchases, sales or otherwise, or the manner in
which the portfolio is classified or reported, or execute individual
investment transactions for its own account of greater than $2,000,000
for U.S. Treasury or Federal Agency Securities and $500,000 for all
other investment instruments;
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(j) agree in writing or otherwise to take any of the foregoing
actions or engage in any activity, enter into any transaction or
intentionally take or omit to take any other act which would make any
of the representations and warranties in Article II of this Agreement
untrue or incorrect in any material respect if made anew after engaging
in such activity, entering into such transaction, or taking or omitting
such other act; or
(k) enter into, increase or renew any loan or credit
commitment (including standby letters of credit) to any executive
officer or director of Southside or any of the Southside Subsidiaries,
any holder of 10% or more of the outstanding shares of Southside Common
Stock, or any entity controlled, directly or indirectly, by any of the
foregoing or engage in any transaction with any of the foregoing which
is of the type or nature sought to be regulated in 12 U.S.C. Section
371c and 12 U.S.C. Section 371c-1. For purposes of this subsection (k),
"control" shall have the meaning associated with that term under 12
U.S.C. Section 371c.
4.03 Acquisition Proposals; Board Recommendation.
(a) Southside agrees that it shall not, nor shall it authorize
or knowingly permit any officer, director, employee, investment banker,
attorney, accountant, agent or other advisor or representative of
Southside, directly or indirectly, to (i) solicit, initiate or
knowingly facilitate or encourage the submission of any Acquisition
Proposal for Southside from and after the date hereof, (ii) participate
in any discussions or negotiations regarding, or furnish to any person
any information with respect to, or take any other action knowingly to
facilitate any inquiries or the making of any proposal that constitutes
an Acquisition Proposal for Southside from and after the date hereof,
(iii) grant any waiver or release under any standstill or similar
agreement with respect to any class of Southside Equity Securities or
(iv) enter into any agreement with respect to any Acquisition Proposal
for Southside; provided, however, that if, at any time prior to the
Southside shareholder approval pursuant to Section 5.03(a), Southside's
Board of Directors reasonably determines in good faith, after
consultation with and receipt of advice from outside counsel and
independent financial advisor of Southside, that failing to take such
action would be inconsistent with its fiduciary duties to Southside's
shareholders under applicable law, Southside may, in response to an
Acquisition Proposal for Southside made after the date of this
Agreement which was not solicited by Southside or its representatives
or agents and which did not otherwise result from a breach of this
Section 4.03, and which is reasonably likely to lead to a Superior
Proposal, and subject to compliance with Section 4.03(c); (x) furnish
information with respect to Southside to any person pursuant to a
customary confidentiality agreement including customary standstill
provisions (as determined by Southside after consultation with its
outside counsel) and (y) participate in negotiations regarding such
Acquisition Proposal for Southside. "Acquisition Proposal" means any
inquiry, proposal or offer relating to any direct or indirect
acquisition or purchase, in one transaction or a series of related
transactions, of 15% or more of the assets of Southside or any of the
Southside Subsidiaries or 15% or more of any class of Equity Securities
of Southside or any of its Subsidiaries, any tender offer or exchange
offer that if consummated would result in any person beneficially
owning 15% or more of any class of Equity Securities of Southside or
any of the Southside Subsidiaries, any merger, consolidation, share
exchange, business combination, recapitalization, liquidation,
dissolution or similar transaction involving Southside or any of the
Southside Subsidiaries, other than the negotiations with Allegiant, or
any other transaction the consummation of which could reasonably be
expected to impede, interfere with, prevent or materially delay the
Merger or which could reasonably be expected to dilute materially the
benefits to Allegiant of the Merger.
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(b) Neither the Board of Directors of Southside nor any
committee thereof shall (i) withdraw, or propose publicly to withdraw,
in a manner adverse to Allegiant, the approval or recommendation by
such Board of Directors or such committee of the Merger or this
Agreement, (ii) subject to Section 4.03(d), modify, or propose publicly
to modify, in a manner adverse to Allegiant the approval or
recommendation by such Board of Directors or such committee of the
Merger or this Agreement, (iii) approve or recommend, or propose
publicly to approve or recommend, any Acquisition Proposal for
Southside or (iv) approve or recommend, or propose to approve or
recommend, or execute or enter into, any letter of intent, agreement in
principle, merger agreement, acquisition agreement, option agreement or
other similar agreement or propose publicly or agree to do any of the
foregoing related to any Acquisition Proposal for Southside.
Notwithstanding the foregoing, if at any time prior to receipt of
Southside shareholder approval of this Agreement, the Merger and the
transactions contemplated hereby, the Board of Directors of Southside
reasonably determines, in good faith after consultation with the
independent financial advisor of Southside, that it has received an
Acquisition Proposal for Southside that constitutes a Superior Proposal
which did not result from a breach of Southside's obligations under
this Section 4.03 and also reasonably determines that failure to do one
of the following would be inconsistent with its fiduciary duties to
Southside's shareholders under applicable law, the Board of Directors
of Southside may (subject to this and the following sentences), after
paying to Allegiant the Southside Termination Fee, (x) withdraw or
modify its approval or recommendation of this Agreement, the Merger and
the transactions contemplated hereby, (y) approve or recommend the
Superior Proposal or (z) terminate this Agreement (and concurrently
with or after such termination, if it so chooses, cause Southside to
enter into any agreement with respect to the Superior Proposal), but in
each of the cases set forth in clause (x), (y) or (z), only at a time
prior to the Southside shareholder approval pursuant to Section 5.03(a)
and only at a time that is after the tenth (10th) calendar day
following Allegiant's receipt of written notice advising Allegiant that
the Board of Directors of Southside has received a Superior Proposal,
specifying the material terms and conditions of such Superior Proposal
and identifying the person making such Superior Proposal. For all
purposes of this Agreement, a "Superior Proposal" means any bona fide
proposal made by a third party to acquire, directly or indirectly, for
consideration consisting of cash and/or securities, 100% of the
Southside Securities then outstanding (whether pursuant to a tender or
exchange offer, merger, consolidation, share exchange, or other
business combination) or all or substantially all the assets of
Southside and otherwise on terms which the Board of Directors of
Southside determines in its good faith judgment (based on a written
opinion of Southside's financial advisor) to be materially more
favorable to Southside and its shareholders than the Merger (taking
into account any changes to the financial and other contractual terms
of this Agreement proposed by Allegiant in response to such proposal,
the person making the proposal, any legal or regulatory considerations
and all other relevant financial and strategic considerations,
including the timing of the consummation of such transactions) and for
which financing, to the extent required, is then committed or which, in
the good faith judgment of the Board of Directors of Southside, is
reasonably capable of being obtained by such third party, provided that
such proposal is reasonably determined by the Board of Directors of
Southside, in good faith and after due inquiry, to be likely to be
consummated.
(c) In addition to the obligations of Southside set forth in
paragraphs (a) and (b) of this Section 4.03, Southside shall promptly
(meaning within 48 hours) advise Allegiant orally and in writing of any
request for information or of any Acquisition Proposal for Southside,
the material terms and conditions of such request or Acquisition
Proposal for Southside and the identity of the person making such
request or Acquisition Proposal for Southside. Southside will keep
Allegiant reasonably informed of the status and details (including
amendments or proposed
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amendments) of any such request or Acquisition Proposal for Southside.
If, after Southside receives a Superior Proposal, Allegiant desires to
continue negotiations with Southside with respect to the transactions
provided for in this Agreement, Southside agrees to negotiate in good
faith with Allegiant.
(d) Nothing contained in this Section 4.03 shall prohibit
Southside from taking and disclosing to its shareholders a position
contemplated by Rules 14d-9 and 14e-2(a) promulgated under the Exchange
Act or from making any disclosure to Southside's shareholders if, in
the good faith judgment of the Board of Directors of Southside, after
consultation with outside counsel, failure to so disclose would be
inconsistent with its fiduciary duties to Southside's shareholders
under the Missouri Statute; provided, however, neither Southside nor
its Board of Directors nor any committee thereof shall, except as
permitted by Section 4.03(b), withdraw or modify, or propose publicly
to withdraw or modify, its position with respect to the Merger or this
Agreement or approve or recommend, or propose publicly to approve or
recommend, an Acquisition Proposal for Southside.
4.04 Forbearances of Allegiant. During the period from the date of this
Agreement to the Closing Date, Allegiant shall not, without the prior consent of
Southside, agree in writing or otherwise to engage in any activity, enter into
any transaction or take or omit to take any other action:
(a) that would (i) prevent or impede the Merger from
qualifying as a reorganization within the meaning of Section
368(a)(1)(A) of the Code or (ii) materially impede or delay the
consummation of the transactions contemplated by this Agreement or the
ability of Allegiant or Southside to obtain any necessary approvals of
any Regulatory Authority required for the transactions contemplated by
this Agreement or to perform its covenants and agreements under this
Agreement; or
(b) except to the extent required by law, regulation or any
Regulatory Authority or contemplated by or expressly permitted pursuant
to the terms of this Agreement, which would make any of the
representations and warranties of Article III of this Agreement untrue
or incorrect in any material respect if made anew after engaging in
such activity, entering into such transaction, or taking or omitting
such other action.
ARTICLE V
ADDITIONAL AGREEMENTS
5.01 Access and Information; Due Diligence. Allegiant and Southside
shall each afford to the other, and to the other's accountants, counsel and
other representatives, full access during normal business hours, during the
period prior to the Effective Time, to all their respective properties, books,
contracts, commitments and records and, during such period, each shall furnish
promptly to the other (i) a copy of each report, schedule and other document
filed or received by it during such period pursuant to the requirements of
federal and state securities laws and (ii) all other information concerning its
business, properties and personnel as the other may reasonably request. Each
party shall, and shall cause its advisors and representatives to, (A) hold
confidential all information obtained in connection with any transaction
contemplated hereby with respect to the other party and its Subsidiaries which
is not otherwise public knowledge; (B) in the event of a termination of this
Agreement, return all documents (including copies thereof) obtained hereunder
from the other party or any of its Subsidiaries to such other party or its
Subsidiaries and (C) use its best efforts to cause all information obtained
pursuant to this Agreement or in connection with the negotiation of this
Agreement to be treated as confidential and not use, or knowingly
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permit others to use, any such information unless such information becomes
generally available to the public.
5.02 Regulatory Matters.
(a) Within forty-five (45) days after the date hereof and so
long as Southside and its accountants and advisors have cooperated with
the preparation of the Registration Statement, Allegiant shall prepare
and, subject to the review and consent of Southside, Southside shall
file with the SEC the Registration Statement (or the equivalent in the
form of preliminary proxy materials) with respect to the shares of
Surviving Corporation Common Stock to be issued in the Merger and the
exercise of the Allegiant Stock Options after the Effective Time and
shall use its best efforts to cause the Registration Statement to
become effective. Within forty-five (45) days after the date hereof and
so long as Southside and its accountants and advisors have cooperated
with the preparation of such applications, Allegiant shall prepare and,
subject to the review and consent of Southside, file an application for
approval of the Merger with the Federal Reserve Board, and such
additional Regulatory Authorities as may require an application.
Southside shall take any action required to be taken under any
applicable state blue sky or securities laws in connection with the
issuance of such shares and the exercise of such options, and Allegiant
and the Allegiant Subsidiaries shall furnish Southside all information
concerning Allegiant and the Allegiant Subsidiaries and the
shareholders thereof as Southside may reasonably request in connection
with any such action.
(b) Southside and Allegiant shall cooperate and use their
respective best efforts to prepare all documentation, to effect all
filings and to obtain all permits, consents, approvals and
authorizations of all third parties and Regulatory Authorities
necessary to consummate the transactions contemplated by this
Agreement.
5.03 Shareholder Approval.
(a) Southside shall call a special meeting of its shareholders
to be held as soon as is reasonably possible for the purpose of voting
upon this Agreement, the Merger and the transactions contemplated
hereby, including, but not limited to, the issuance of the Surviving
Corporation Common Stock in the Merger. In connection with such
meeting, Allegiant shall prepare, subject to the review and consent of
Southside, the Joint Proxy Statement/Prospectus (which shall be part of
the Registration Statement to be filed with the SEC by Southside) and
mail the same to the shareholders of Southside. The Board of Directors
of Southside shall submit for approval of Southside's shareholders the
matters to be voted upon at such meeting. The Board of Directors of
Southside hereby does and will recommend this Agreement, the Merger and
the transactions contemplated hereby to the shareholders of Southside
and use its reasonable best efforts to obtain any vote of Southside's
shareholders necessary for the approval of this Agreement, subject to
Section 4.03.
(b) Allegiant shall call a special meeting of its shareholders
to be held as soon as is reasonably possible for the purpose of voting
upon this Agreement, the Merger and the transactions contemplated
hereby. In connection with such meeting, Allegiant shall prepare,
subject to the review and consent of Southside, the Joint Proxy
Statement/Prospectus (which shall be part of the Registration Statement
to be filed with the SEC by Southside) and mail the same to the
shareholders of Allegiant. The Board of Directors of Allegiant shall
submit for approval of Allegiant's shareholders the matters to be voted
upon at such meeting. The Board of Directors of Allegiant hereby does
and will recommend this Agreement, the Merger and the transactions
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contemplated hereby to the shareholders of Allegiant and use its
reasonable best efforts to obtain any vote of Allegiant's shareholders
necessary for the approval of this Agreement.
5.04 Current Information. During the period from the date of this
Agreement to the Closing Date, (i) Southside and Allegiant will promptly furnish
the other party with copies of all monthly and other interim financial
statements as the same become available and shall cause one or more of its
designated representatives to confer on a regular and frequent basis with
representatives of the other party, and (ii) Allegiant shall promptly furnish to
Southside copies of all filings by Allegiant with each of the Federal Reserve
Board, any other Regulatory Authority and the SEC. Each party shall promptly
notify the other party of the following events immediately upon learning of the
occurrence thereof, describing the same and, if applicable, the steps being
taken by the affected party with respect thereto: (a) the occurrence of any
event which could cause any representation or warranty of such party or any
schedule, statement, report, notice, certificate or other writing furnished by
such party to be untrue or misleading in any material respect; (b) any Material
Adverse Effect to Southside or Allegiant; (c) the issuance or commencement of
any governmental and/or regulatory agency complaint, investigation or hearing or
any communications indicating that the same may be contemplated and, as to any
such matter which shall now or hereafter be in effect, any communications
pertaining thereto; or (d) the institution or the threat of any material
litigation involving Southside or Allegiant. Until the Effective Time, Southside
shall deliver to Allegiant monthly reports in form and pursuant to past timing
as Southside has historically provided to its board members.
5.05 Conforming Entries.
(a) Notwithstanding that Southside believes that Southside and
Southside Subsidiaries have established all reserves and taken all
provisions for probable loan losses required by GAAP and applicable
laws, rules and regulations, Southside recognizes that Allegiant may
have adopted different loan, accrual and reserve policies (including
loan classifications and levels of reserves for probable loan losses).
From and after the date of this Agreement, Southside and Allegiant
shall consult and cooperate with each other with respect to conforming
the loan, accrual and reserve policies of Southside and the Southside
Subsidiaries, to those policies of Allegiant, as specified in each case
in writing to Southside, based upon such consultation and as
hereinafter provided.
(b) In addition, from and after the date of this Agreement,
Southside and Allegiant shall consult and cooperate with each other
with respect to determining appropriate Southside accruals, reserves
and charges to establish and take in respect of excess equipment
write-off or write-down of various assets and other appropriate charges
and accounting adjustments taking into account the parties' business
plans following the Merger, as specified in each case in writing to
Southside, based upon such consultation and as hereinafter provided.
(c) Southside and Allegiant shall consult and cooperate with
each other with respect to determining the amount and the timing for
recognizing for financial accounting purposes Southside's expenses of
the Merger and the restructuring charges, if any, related to or to be
incurred in connection with the Merger.
(d) With respect to clauses (a) through (c) of this Section
5.05, it is the objective of Allegiant and Southside that such
reserves, accruals, charges and divestitures, if any, to be taken shall
be consistent with GAAP and shall be taken no earlier than immediately
prior to the Merger on the Closing Date.
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5.06 Agreements of Affiliates. Allegiant shall use its best efforts to
cause each person who is determined to be an "affiliate" of Allegiant for
purposes of Rule 145 under the Securities Act to deliver to Allegiant, as of the
date hereof, or as soon as practicable hereafter, a written agreement in
substantially the form set forth as Exhibit B to this Agreement providing that
each such person will agree not to sell, pledge, transfer or otherwise dispose
of the shares of Surviving Corporation Common Stock to be received by such
person in the Merger during the period designated in such letter and thereafter
in compliance with the applicable provisions of the Securities Act. Upon
reasonable request of Allegiant, Southside shall use its best efforts to cause
each person who is determined to be an "affiliate" of Southside to deliver to
Allegiant, as of the date hereof, or as soon as practicable hereafter, a written
agreement in substantially the form set forth as Exhibit B to this Agreement
providing that each such person will agree not to sell, pledge, transfer or
otherwise dispose of the shares of Surviving Corporation Common Stock to be
received by such person in the Merger during the period designated in such
letter and thereafter in compliance with the applicable provisions of the
Securities Act.
5.07 Expenses. Each party hereto shall bear its own expenses incident
to preparing, entering into and carrying out this Agreement and to consummating
the Merger; provided, however, that Allegiant shall pay all printing expenses
and filing fees incurred in connection with this Agreement, the Registration
Statement and the Joint Proxy Statement/Prospectus.
5.08 Miscellaneous Agreements and Consents.
(a) Subject to the terms and conditions herein provided, each
of the parties hereto agrees to use its respective best efforts to
take, or cause to be taken, all commercially reasonable actions, and to
do, or cause to be done, all commercially reasonable things necessary,
proper or advisable under applicable laws and regulations to consummate
and make effective the transactions contemplated by this Agreement as
expeditiously as possible, including, without limitation, using its
respective best efforts to take all commercially reasonable actions to
lift or rescind any injunction or restraining order or other order
adversely affecting the ability of the parties to consummate the
transactions contemplated hereby. Each party shall, and shall cause
each of its respective Subsidiaries to, use its best efforts to obtain
consents of all third parties and Regulatory Authorities necessary or,
in the opinion of Allegiant, desirable for the consummation of the
transactions contemplated by this Agreement. Notwithstanding the
foregoing, no party shall be obligated to agree to a material
restriction or condition in order to obtain such approvals and
consents.
(b) Southside, prior to the Effective Time, shall (i) consult
and cooperate with Allegiant regarding the implementation on or after
the Effective Time of those policies and procedures established by
Allegiant for the governance of Southside's Subsidiaries and not
otherwise referenced in Section 5.05 hereof, including, without
limitation, policies and procedures pertaining to the accounting,
asset/liability management, audit, credit, human resources, treasury
and legal functions, and (ii) at the reasonable request of Allegiant,
conform on or after the Effective Time Southside's existing policies
and procedures in respect of such matters to Allegiant's policies and
procedures or, in the absence of any existing Southside policy or
procedure regarding any such function, introduce Allegiant's policies
or procedures in respect thereof, unless to do so would cause Southside
or any of the Southside Subsidiaries to be in violation of any law,
rule or regulation or requirement of any Regulatory Authority having
jurisdiction over Southside and/or the Southside Subsidiary affected
thereby.
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5.09 Employee Agreements and Benefits.
(a) Following the Effective Time, Allegiant and Southside
agree that they shall cause the Surviving Corporation to assume and
honor in accordance with their terms all employment, severance,
deferred compensation, split-dollar insurance and other compensation
contracts set forth on Schedule 2.11(b) between Southside, any of the
Southside Subsidiaries, and any current or former director, officer,
employee or agent thereof, and all provisions for vested benefits or
other vested amounts earned or accrued through the Effective Time under
the Southside Employee Plans.
(b) Subject to Sections 5.09(d) and 5.14, the provisions of
the Southside Stock Plans and any other plan, program or arrangement
providing for the issuance or grant of any other interest in respect of
the Equity Securities of Southside or any of the Southside Subsidiaries
shall be deleted and terminated as of the Effective Time.
(c) Allegiant and Southside agree that, except as set forth in
Sections 5.09(b) and 5.09(d) hereof, the Southside Employee Plans shall
not be terminated by reason of the Merger but shall continue thereafter
as plans of the Surviving Corporation until such time as the employees
of Southside and the Southside Subsidiaries are integrated into
Surviving Corporation's employee benefit plans (which plans, to the
extent practicable, shall be the same as Allegiant's employee benefit
plans) available to other employees of Surviving Corporation, subject
to the terms and conditions specified in such plans and to such changes
therein as may be necessary to reflect the consummation of the Merger.
Allegiant and Southside agree that Surviving Corporation shall take
such steps as are necessary or required to integrate the employees of
Southside and the Southside Subsidiaries into Surviving Corporation's
employee benefit plans available to other employees of Surviving
Corporation and its Subsidiaries as soon as practicable after the
Effective Time, with (i) full credit for prior service with Southside
or any of the Southside Subsidiaries for purposes of vesting and
eligibility for participation and benefit allocation (but not benefit
accruals under any defined benefit plan), and co-payments and
deductibles, (ii) waiver of all waiting periods, evidence of
insurability and pre-existing condition exclusions or penalties, (iii)
full credit for claims arising prior to the Effective Time for purposes
of deductibles, out-of-pocket maximums, benefit maximums and all other
similar limitations for the applicable plan year in which the Merger is
consummated, and (iv) full credit for vacation accrued by employees of
Southside and the Southside Subsidiaries on or before the Effective
Time. Allegiant and Southside agree that Surviving Corporation shall
provide COBRA coverage for the periods and otherwise to the extent
required by applicable law for employees and former employees of
Southside and the Southside Subsidiaries (and their dependents and
qualified beneficiaries) who are eligible for COBRA coverage under the
group health plans of Southside and the Southside Subsidiaries.
Allegiant and Southside agree that Surviving Corporation shall provide
severance benefits for employees of Southside and the Southside
Subsidiaries who terminate employment within six (6) months following
the Effective Time equal to one week of salary for each year of
service, vesting after three (3) years, not to exceed a total of ten
(10) weeks of salary, and thereafter such employees shall receive the
same severance benefits that Surviving Corporation provides to all
other employees of Surviving Corporation and the Surviving Corporation
Subsidiaries and shall receive credit for their years of service with
Southside and the Southside Subsidiaries. Surviving Corporation shall
not take any action which will adversely affect the participation of
the employees of Southside and the Southside Subsidiaries in any
Section 125 plan maintained by Southside and the Southside Subsidiaries
during the calendar year in which the Closing occurs.
(d) Prior to the Effective Time, Southside shall split the
Southside Employee Stock
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Ownership Plan with 401(k) Provisions (the "KSOP") into two plans, one
plan to consist of the employee stock ownership plan portion of the
KSOP (the "ESOP") and one plan to consist of the 401(k) portion of the
KSOP (the "401(k)"). As of the Effective Time, the ESOP shall be
terminated and immediately following the Effective Time each
Acquisition Loan (as defined in the KSOP) shall be repaid in full with
an amount of unallocated cash or shares of Surviving Corporation stock
held in the ESOP having an aggregate fair market value equal to the
unpaid balance of any such Loan at the time of payment. All ESOP
accounts shall fully vest and be nonforfeitable as of the termination
of the ESOP. Following the date of this Agreement, Southside shall
amend the KSOP to provide for its division into two plans and for the
termination of the ESOP consistent with the foregoing provisions,
subject to Allegiant's review and consent, not to be unreasonably
withheld.
As soon as practicable after the receipt of a favorable
determination letter from the Internal Revenue Service ("IRS") as to
the tax qualified status of the ESOP upon its termination under the
Code (the "Final Determination Letter"), distributions of the benefits
under the ESOP shall be made. From and after the date of this
Agreement, in anticipation of such termination and distribution,
Southside and its representatives before the Effective Time and
Allegiant and Southside agree that Surviving Corporation and its
representatives after the Effective Time shall use their best efforts
to apply for and to obtain such favorable Final Determination Letter
from the IRS.
5.10 Press Releases. Except to the extent disclosure may be required by
applicable law, Southside and Allegiant shall consult with each other as to the
form and substance of any proposed press release or other proposed public
disclosure of matters related to this Agreement or any of the transactions
contemplated hereby, and each party shall have the right to reasonably approve
any proposed press release.
5.11 State Takeover Statutes. Southside and Allegiant will take all
steps necessary to exempt the transactions contemplated by this Agreement from
any applicable Missouri state takeover law.
5.12 Directors' and Officers' Indemnification and Insurance.
(a) Allegiant and Southside agree that the Merger shall not
affect or diminish any of the duties and obligations of indemnification
of Southside, Allegiant or any of their respective Subsidiaries
existing as of the Effective Time in favor of employees, agents,
directors or officers of Southside, Allegiant or any of their
respective Subsidiaries arising by virtue of their respective Articles
of Incorporation, charters or By-Laws in the form in effect at the date
of this Agreement or arising by operation of law or arising by virtue
of any contract, resolution or other agreement or document existing at
the date of this Agreement, and Allegiant and Southside agree that
Surviving Corporation shall continue such duties and obligations in
full force and effect for so long as they would (but for the Merger)
otherwise survive and continue in full force and effect. To the extent
that Southside's or Allegiant's respective existing directors' and
officers' liability insurance policy would provide coverage for any
action or omission occurring prior to the Effective Time, Southside or
Allegiant, as applicable, agrees to give proper notice to the insurance
carrier and to Surviving Corporation of any potential claim thereunder
so as to preserve Southside's or Allegiant's, as applicable, rights to
such insurance coverage.
(b) After the Effective Time, Allegiant and Southside agree
that Surviving Corporation will provide, or cause to be provided, such
coverage to the officers and directors of Southside and the Southside
Subsidiaries who shall continue as officers and directors of the
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Surviving Corporation and its Subsidiaries to the same extent that
Allegiant provides or causes to be provided such coverage to the other
officer and directors of Surviving Corporation and its Subsidiaries.
(c) For a period of six (6) years after the Effective Time,
Allegiant and Southside agree that Surviving Corporation shall cause to
be maintained in effect the current policies of directors' and
officers' liability insurance maintained by Southside covering past or
future claims with respect to periods before the Effective Time
(provided that Allegiant and Southside agree that Surviving Corporation
may substitute therefor policies of comparable coverage with respect to
claims arising from facts or events which occurred before the Effective
Time); provided, however, that Surviving Corporation shall not be
required to pay premiums for such insurance which exceed in the
aggregate 150% of the last annual premium paid prior to the date
hereof, but in such case shall purchase as much coverage as possible
for such amount. Prior to the Effective Time, Allegiant may request
Southside to, and Southside shall, purchase insurance coverage, on such
terms and conditions as shall be acceptable to Allegiant. Southside may
purchase, as it deems necessary or appropriate, insurance coverage of
directors and officers or a rider or endorsement to its existing
policy, providing for coverage for securities laws claims and similar
claims which could result from the transactions contemplated hereby;
provided, however, any amount of such coverage in excess of $20,000
shall be counted against the 150% limit provided above and Allegiant
shall have the opportunity to provide similar coverage through its
insurance carrier if it is determined that such premiums will be lower
than those available to Southside.
5.13 Tax Matters.
(a) Prior to the Effective Time, each party shall cooperate
with the other party and shall use its reasonable best efforts to cause
the Merger to qualify as a reorganization under Section 368(a)(1)(A) of
the Code, and will not take any action reasonably likely to cause the
Merger not so to qualify. Allegiant and Southside agree that Surviving
Corporation, for the benefit of the Southside shareholders, shall not
take any action after the Effective Time that would cause the Merger
not to so qualify.
(b) Each party shall cooperate with the other party and shall
use its reasonable best efforts to obtain the opinion referred to in
Section 6.02(e) and in connection therewith, each of Southside and
Allegiant shall deliver to such counsel customary and reasonable
representation letters in form and substance reasonably satisfactory to
such counsel.
5.14 Employee Stock Options.
(a) At the Effective Time, without any action on the part of
any holder of any such option, each Southside Stock Option that is
outstanding and unexercised immediately prior thereto shall cease to
represent a right to acquire shares of Southside Common Stock and shall
be converted automatically into an option to purchase shares of
Surviving Corporation Common Stock in an amount and at an exercise
price determined as provided below (and otherwise subject to the terms
of the Southside Stock Plan under which it was issued and the Southside
Stock Option Agreement by which it is evidenced and the agreements
evidencing grants thereunder, provided that all SouthSide Stock Options
shall be exercisable throughout their stated terms regardless of any
provisions therein pursuant to which they would otherwise terminate or
expire at an earlier time due to the termination of employment of the
holder thereof):
(i) The number of shares of Surviving Corporation
Common Stock to be
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subject to each such Southside Stock Option shall be equal to
the product of (A) the number of shares of Southside Common
Stock purchasable upon exercise of the Southside Stock Option
immediately prior to the Effective Time and (B) 1.39 (as such
exchange ratio may be adjusted as provided herein), the
product being rounded, if necessary, up or down, to the
nearest whole share; provided, however, that each Southside
Stock Option shall, in accordance with its terms, be subject
to further adjustment as appropriate to reflect any stock
split, stock dividend, recapitalization or other similar
transaction subsequent to the Effective Time; and
(ii) The exercise price per share of Surviving
Corporation Common Stock under the new option shall be equal
to the exercise price per share of Southside Common Stock
under the Southside Stock Option immediately prior to the
Effective Time divided by 1.39 (as such exchange ratio may be
adjusted as provided herein), provided that such exercise
price shall be rounded to the nearest whole cent.
(b) At the Effective Time, by virtue of the Merger and without
any action on the part of any holder of any such option, each option to
purchase shares of Allegiant Common Stock (each, an "Allegiant Option")
that is outstanding and unexercised immediately prior thereto shall be
assumed by the Surviving Corporation and shall cease to represent the
right to acquire shares of Allegiant Common Stock and shall be
converted into an option to purchase shares of Surviving Corporation
Common Stock, on the same terms and conditions as are in effect
immediately prior to the Effective Time, except that all references to
Allegiant shall be deemed to be references to the Surviving
Corporation.
5.15 Exemption from Liability under Section 16(b): Allegiant Insiders.
Assuming that Allegiant delivers to Southside the Allegiant Section 16
Information (as defined below) in a timely fashion prior to the Effective Time,
the board of directors of Southside, or a committee of Non-Employee Directors
thereof (as such term is defined for purposes of Rule 16b-3(d) under the
Exchange Act), shall reasonably promptly thereafter and in any event prior to
the Effective Time adopt a resolution providing in substance that the receipt by
the Allegiant Insiders (as defined below) of Surviving Corporation Common Stock
in exchange for shares of Allegiant Common Stock, and of options to purchase
shares of Surviving Corporation Common Stock upon conversion of options to
purchase shares of Allegiant Common Stock, in each case pursuant to the
transactions contemplated hereby and to the extent such securities are listed in
the Allegiant Section 16 Information, are intended to be exempt from liability
pursuant to Section 16(b) under the Exchange Act such that any such receipt
shall be so exempt. "Allegiant Section 16 Information" shall mean information
accurate in all respects regarding the Allegiant Insiders, the number of shares
of Allegiant Common Stock held by each such Allegiant Insider and expected to be
exchanged for Surviving Corporation Common Stock in the Merger, and the number
and description of the options to purchase shares of Allegiant Common Stock held
by each such Allegiant Insider and expected to be converted into options to
purchase shares of Surviving Corporation Common Stock in connection with the
Merger. "Allegiant Insiders" shall mean those officers and directors of
Allegiant who are subject to the reporting requirements of Section 16(a) of the
Exchange Act and who are listed in the Allegiant Section 16 Information.
5.16 Exemption from Liability under Section 16(b): Southside Insiders.
The board of directors of Southside, or a committee of Non-Employee Directors
thereof (as such term is defined for purposes of Rule 16b-3(d) under the
Exchange Act), may, as it deems necessary or advisable, adopt a resolution
providing in substance that the receipt by the Southside Insiders (as defined
below) of Surviving Corporation Common Stock in exchange for shares of Southside
Common Stock, and of options to purchase shares of Surviving Corporation Common
Stock upon conversion of options to
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purchase shares of Southside Common Stock, in each case pursuant to the
transactions contemplated hereby and to the extent such securities are listed in
the Southside Section 16 Information, are intended to be exempt from liability
pursuant to Section 16(b) under the Exchange Act such that any such receipt
shall be so exempt. "Southside Section 16 Information" shall mean information
accurate in all respects regarding the Southside Insiders, the number of shares
of Southside Common Stock held by each such Southside Insider and expected to be
exchanged for Surviving Corporation Common Stock in the Merger, and the number
and description of the options to purchase shares of Southside Common Stock held
by each such Southside Insider and expected to be converted into options to
purchase shares of Surviving Corporation Common Stock in connection with the
Merger. "Southside Insiders" shall mean those officers and directors of
Southside who are subject to the reporting requirements of Section 16(a) of the
Exchange Act and who are listed in the Southside Section 16 Information.
5.17 No Negotiations. Allegiant covenants and agrees that, prior to the
Effective Time, it will not enter into any negotiations, discussions,
agreements, arrangements or understandings with First Banks regarding a possible
transaction which would result in the disposition of any Southside Subsidiaries
to First Banks.
ARTICLE VI
CONDITIONS
6.01 Conditions to Each Party's Obligation To Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment or waiver at or prior to the Effective Time of the following
conditions:
(a) Shareholder Approval. The approval of this Agreement, the
Merger and the transactions contemplated thereby shall have received
the requisite vote of shareholders of Southside and Allegiant at the
special meetings of shareholders or any adjournment thereof called
pursuant to Section 5.03 hereof.
(b) Regulatory Approval. This Agreement and the transactions
contemplated hereby shall have been approved by the Federal Reserve
Board and any other Regulatory Agencies whose approval is required for
consummation of the transactions contemplated hereby and all requisite
waiting periods imposed by the foregoing shall have expired.
(c) Effectiveness of Registration Statement. The Registration
Statement shall have been declared effective and shall not be subject
to a stop order or any threatened stop order.
(d) No Judicial Prohibition. Neither Southside nor Allegiant
shall be subject to any order, decree or injunction of a court or
agency of competent jurisdiction which enjoins or prohibits the
consummation of the Merger.
6.02 Conditions to Obligations of Southside. The obligations of
Southside to effect the Merger shall be subject to the fulfillment or waiver at
or prior to the Effective Time of the following additional conditions:
(a) Representations and Warranties. The representations and
warranties of Allegiant set forth in Article III of this Agreement
(subject to the standard set forth in Section 1.17(b)) shall be true
and correct as of the date of this Agreement and as of the Effective
Time (as though made on and as of the Effective Time, except (i) to the
extent such representations and warranties are by their express
provisions made as of a specified date or period, and (ii) for the
effect of
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transactions contemplated by this Agreement), and Southside shall have
received a certificate of any authorized officer of Allegiant, signing
solely in his capacity as an officer of Allegiant, to such effect.
(b) Performance of Obligations. Allegiant shall have performed
in all material respects all obligations required to be performed by it
under this Agreement prior to the Effective Time, and Southside shall
have received a certificate of the Chief Executive Officer and Chief
Financial Officer of Allegiant, signing solely in their capacities as
officers of Allegiant, to such effect.
(c) Permits, Authorizations, etc. Allegiant shall have
obtained any and all material permits, authorizations, consents,
waivers and approvals required for the lawful consummation of the
Merger.
(d) No Material Adverse Effect. Since the date of this
Agreement, there shall have been no Material Adverse Effect on
Allegiant and its Subsidiaries, taken as a whole.
(e) Tax Opinion of Allegiant's Counsel. Southside shall have
received an opinion of counsel to Allegiant which provides that it may
be relied upon by the shareholders of Southside, in form and substance
reasonably satisfactory to Southside, on the basis of relevant facts,
the representations referred to in Section 5.13 and reasonable
assumptions set forth in such opinion, dated as of the date of the
Effective Time, to the effect that (i) the Merger will qualify for
federal income tax purposes as a reorganization under Section
368(a)(1)(A) of the Code, (ii) both Southside and Allegiant are each
parties to the reorganization within the meaning of Section 368 of the
Code, (iii) no gain or loss will be recognized by Southside as a result
of the Merger, and (iv) no gain or loss will be recognized by the
shareholders of Southside who exchange all of their Southside Common
Stock solely for Allegiant Common Stock pursuant to the Merger (except
with respect to cash received pursuant to a Cash Distribution or a
Combination Distribution, the exercise of Dissenters Rights or in lieu
of a fractional share interest in Allegiant Common Stock).
(f) Election of Designees. Surviving Corporation's Board of
Directors shall have elected the designees of Southside to Surviving
Corporation's Board of Directors pursuant to Section 1.06.
(g) Reaffirmation of Opinion. Southside shall have received,
on or shortly before the date of the mailing of the Joint Proxy
Statement/Prospectus, from its investment banker, Xxxxxx, Xxxxxxxx &
Company, Incorporated, the reaffirmation of the opinion of such
investment banker, originally rendered and delivered to Southside at
the meeting of the Board of Directors of Southside at which this
Agreement was approved by such Board of Directors, to the effect that
the transactions contemplated by this Agreement, including the Merger,
are fair to Southside and its shareholders from a financial point of
view.
6.03 Conditions to Obligations of Allegiant. The obligations of
Allegiant to effect the Merger shall be subject to the fulfillment at or prior
to the Effective Time of the following additional conditions:
(a) Representations and Warranties. The representations and
warranties of Southside set forth in Article II of this Agreement
(subject to the standard set forth in Section 1.17(b)) shall be true
and correct as of the date of this Agreement and as of the Effective
Time (as though made on and as of the Effective Time, except (i) to the
extent such representations and warranties are by their express
provisions made as of a specific date or period, and (ii) for the
effect of
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transactions contemplated by this Agreement) and Allegiant shall have
received a certificate of the Chief Executive Officer and Chief
Financial Officer of Southside, signing solely in their capacities as
officers of Southside, to such effect.
(b) Performance of Obligations. Southside shall have performed
in all material respects all obligations required to be performed by it
under this Agreement prior to the Effective Time, and Allegiant shall
have received a certificate of the Chief Executive Officer and Chief
Financial Officer, signing solely in their capacities as officers of
Southside, to that effect.
(c) Permits, Authorizations, etc. Southside shall have
obtained any and all material permits, authorizations, consents,
waivers and approvals required for the lawful consummation by it of the
Merger.
(d) No Material Adverse Effect. Since the date of this
Agreement, there shall have been no Material Adverse Effect on
Southside and the Southside Subsidiaries, taken as a whole.
(e) Reaffirmation of Opinion. Allegiant shall have received,
on or shortly before the date of the mailing of the Joint Proxy
Statement/Prospectus, from its investment banker, Xxxx Xxxxx Xxxx
Xxxxxx, Incorporated, the reaffirmation of the opinion of such
investment banker, originally rendered and delivered to Allegiant at
the meeting of the Board of Directors of Allegiant at which this
Agreement was approved by such Board of Directors, to the effect that
the transactions contemplated by this Agreement, including the Merger,
are fair to Allegiant and its shareholders from a financial point of
view.
ARTICLE VII
TERMINATION, AMENDMENT AND WAIVER
7.01 Termination. This Agreement may be terminated at any time prior to
the Closing Date, whether before or after approval by the shareholders of
Southside, only:
(a) by mutual written consent by the Board of Directors of
Allegiant and by the Board of Directors of Southside;
(b) by the Board of Directors of Allegiant or the Board of
Directors of Southside at any time after March 31, 2002, if the Merger
shall not theretofore have been consummated (provided that the
terminating party is not then in material breach of any representation,
warranty, covenant or other agreement contained herein);
(c) by the Board of Directors of Allegiant or the Board of
Directors of Southside if (i) the Federal Reserve Board or any other
federal and/or state Regulatory Authority whose approval is required
for the consummation of the transactions contemplated hereby has denied
approval of the Merger and such denial has become final and
nonappealable, (ii) the shareholders of Southside shall not have
approved this Agreement at the meeting referred to in Section 5.03(a)
or at any adjournment thereof, or (iii) the shareholders of Allegiant
shall not have approved this Agreement at the meeting referred to in
Section 5.03(b) or at any adjournment thereof;
(d) by the Board of Directors of Southside, in the event (i)
of a breach by Allegiant of any representation or warranty of Allegiant
contained herein (subject to the standard set forth in Section 1.17(b))
or a material volitional breach by Allegiant of any covenant or
agreement to
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Southside contained herein, which breach of representation, warranty,
covenant or agreement is not cured within 30 days after written notice
thereof is given to Allegiant by Southside or is not waived by
Southside during such period, or (ii) any of the conditions set forth
in Sections 6.01 or 6.02 hereof shall have become incapable of
fulfillment;
(e) by the Board of Directors of Allegiant, in the event (i)
of a breach by Southside of any representation or warranty of Southside
contained herein (subject to the standard set forth in Section 1.17(b))
or a material volitional breach by Southside of any covenant or
agreement to Allegiant contained herein, which breach of
representation, warranty, covenant or agreement is not cured within 30
days after written notice thereof is given to Southside by Allegiant or
is not waived by Allegiant during such period, or (ii) any of the
conditions set forth in Sections 6.01 or 6.03 hereof shall have become
incapable of fulfillment;
(f) by Allegiant, (i) if there shall have occurred an adverse
change in the Southside Recommendation (or the Board of Directors of
Southside have resolved to take such action); (ii) if there shall have
occurred a material breach of Section 4.03 by Southside or any of its
officers, directors, employees, advisors or agents, including, without
limitation, by failing to promptly notify Allegiant as required
thereunder; (iii) Southside shall have failed to include in the Joint
Proxy Statement/Prospectus the recommendation of the Board of Directors
of Southside in favor of the adoption and approval of this Agreement
and the approval of the Merger; (iv) the Board of Directors of
Southside shall have approved, endorsed or recommended any Acquisition
Proposal of Southside; (v) a tender or exchange offer relating to
securities of Southside shall have been commenced and Southside shall
not have sent to its shareholders, within ten (10) business days after
the commencement of such tender or exchange offer, a statement
disclosing that Southside recommends rejection of such tender or
exchange offer; or (vi) Southside or Southside's Board of Directors or
any committee thereof shall have resolved to do or permit any of the
foregoing;
(g) by Southside, pursuant to the provisions of Section
4.03(b), provided that it has complied with all provisions thereof,
including the notice provisions therein, and that it complies with
applicable requirements relating to the payment (including the timing
of any payment) of the Southside Termination Fee (provided in no event
shall Southside be required to pay the Southside Termination Fee under
more than one provision of this Agreement);
(h) by Southside in the event that, immediately prior to the
Effective Time, Allegiant shall not have delivered to the Exchange
Agent pursuant to Section 1.09(a) hereof, cash, in immediately
available funds, equal to the aggregate Cash Distribution; and
(i) by Southside if the holders of 10% or more of the
outstanding shares of Southside Common Stock shall, as of the time
immediately after the Southside shareholders' meeting held pursuant to
Section 5.03(a), have taken all actions then required under Missouri
law to exercise and perfect their dissenter's rights.
The party desiring to terminate this Agreement pursuant to the preceding
paragraph (b), (c), (d), (e), (f), (g), (h) or (i) shall give written notice of
such termination to the other parties hereto in accordance with Section 8.09
below.
7.02 Effect of Termination.
(a) In the event of termination of this Agreement as provided
in Section 7.01 above, this Agreement shall forthwith become void and
there shall be no liability on the part of Allegiant
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or Southside or their respective officers or directors except as set
forth in the second sentence of Section 5.01 and in Sections 5.07,
7.02(b) and 7.02(c) which obligations shall survive such termination.
(b) In the event that (A) an Acquisition Proposal shall have
been made known to Southside or any of the Southside Subsidiaries or
has been made directly to holders of Southside Common Stock generally
or any person shall have publicly announced an intention (whether or
not conditional) to make an Acquisition Proposal and such Acquisition
Proposal or announced intention shall not have been withdrawn and
thereafter this Agreement is terminated by any party pursuant to
Section 7.01(b), or (B) this Agreement is terminated by (x) Southside
pursuant to Section 7.01(g), or (y) by Allegiant pursuant to Section
7.01(e)(i) or 7.01(f), then Southside shall promptly, but in no event
later than two (2) days after the date of such termination, pay
Allegiant a fee equal to the greater of 5% of the aggregate value of
the Merger Consideration (determined as of the date of such
termination) and $5 million (the "Southside Termination Fee"), payable
by wire transfer of same day funds. Anything to the contrary in this
Agreement notwithstanding, the Southside Termination Fee shall be the
only liability that Southside shall have to Allegiant in the event that
this Agreement is terminated under the circumstances described in this
Section 7.02(b). Southside acknowledges that the agreements contained
in this 7.02 are an integral part of the transactions contemplated by
this Agreement, and that, without these agreements, Allegiant would not
enter into this Agreement; accordingly, if Southside fails to promptly
pay any amount due pursuant to this Section 7.02, and in order to
obtain such payment, Allegiant commences a suit which results in a
judgment against Southside for the Southside Termination Fee, Southside
shall also pay to Allegiant its costs and expenses (including
attorneys' fees) in connection with such suit, together with interest
on the amount of the Southside Termination Fee at the prime rate of
Bank of America, N.A. in effect on the date such payment was required
to be made.
(c) In the event that this Agreement is terminated (x) by
Southside pursuant to Section 7.01(d)(i) or Section 7.01(h), (y) by
Allegiant or Southside pursuant to Section 7.01(c)(iii) or (z) by
Allegiant pursuant to Section 7.01(b) or 7.01(e)(ii) or Southside
pursuant to Section 7.01(d)(ii) (provided, for purposes of this clause
(z), only if such termination is a result of failure to fulfill the
condition with respect to Allegiant shareholder approval in Section
6.01(a)), then Allegiant shall promptly, but in no event later than two
(2) days after the date of such termination, pay Southside a fee equal
to the greater of 5% of the aggregate value of the Merger Consideration
(determined as of the date of such termination) and $5 million (the
"Allegiant Termination Fee"), payable by wire transfer of same day
funds. Anything to the contrary in this Agreement notwithstanding, the
Allegiant Termination Fee shall be the only liability that Allegiant
shall have to Southside in the event that this Agreement is terminated
under the circumstances described in this Section 7.02(c). Allegiant
acknowledges that the agreements contained in this 7.02 are an integral
part of the transactions contemplated by this Agreement, and that,
without these agreements, Southside would not enter into this
Agreement; accordingly, if Allegiant fails to promptly pay any amount
due pursuant to this Section 7.02, and in order to obtain such payment,
Southside commences a suit which results in a judgment against
Allegiant for the Allegiant Termination Fee, Allegiant shall also pay
to Southside its costs and expenses (including attorneys' fees) in
connection with such suit, together with interest on the amount of the
Allegiant Termination Fee at the prime rate of Bank of America, N.A. in
effect on the date such payment was required to be made.
7.03 Amendment. This Agreement, the Exhibits and the Schedules hereto
may be amended by the parties hereto, by action taken by or on behalf of the
respective Boards of Directors of Allegiant and Southside, at any time before or
after approval of this Agreement by the shareholders of Southside;
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provided, however, that after any such approval by the shareholders of Southside
no such modification shall (A) alter or change the amount of Merger
Consideration to be received by holders of Southside Common Stock as provided in
this Agreement or (B) adversely affect the tax treatment to holders of Southside
Common Stock as a result of the receipt of the Merger Consideration; and
provided, further, however, that after any such approval by the shareholders of
Allegiant no such modification shall (A) alter or change the amount of Merger
Consideration to be received by holders of Allegiant Common Stock as provided in
this Agreement or (B) adversely affect the tax treatment to holders of Allegiant
Common Stock as a result of the receipt of the Merger Consideration. This
Agreement, the Exhibits and the Schedules hereto may not be amended except by an
instrument in writing signed on behalf of each of Allegiant and Southside.
7.04 Waiver. Any term, condition or provision of this Agreement may be
waived in writing at any time by the party which is, or whose shareholders or
stockholders, as the case may be, are, entitled to the benefits thereof.
ARTICLE VIII
GENERAL PROVISIONS
8.01 Non-Survival of Representations, Warranties and Agreements. No
investigation by the parties hereto made heretofore or hereafter shall affect
the representations and warranties of the parties which are contained herein and
each such representation and warranty shall survive such investigation. Except
as set forth below, all representations, warranties and agreements in this
Agreement of Allegiant and Southside or in any instrument delivered by Allegiant
or Southside pursuant to or in connection with this Agreement shall expire at
the Effective Time. In the event of consummation of the Merger, the agreements
contained in or referred to in Sections 1.04-1.13, 5.07, 5.09, 5.12, 5.13(a),
5.14, 8.01 and 8.02 shall survive the Effective Time.
8.02 Indemnification.
(a) Allegiant and Southside shall, and Allegiant and Southside
agree that Surviving Corporation shall (hereinafter, in such capacity
being referred to as the "Indemnifying Party") agree to indemnify and
hold harmless each other and their officers, directors and controlling
persons (each such other party being hereinafter referred to,
individually and/or collectively, as the "Indemnified Party") against
any and all losses, claims, damages or liabilities, joint or several,
to which the Indemnified Party may become subject under the Securities
Act, the Exchange Act or other federal or state law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof): (i) arise primarily out of
any information furnished by the Indemnifying Party and included in the
Registration Statement as originally filed or in any amendment therefor
and supplement thereof, or in the Joint Proxy Statement/Prospectus, or
in any amendment therefor or supplement thereof, or are based primarily
upon any untrue statement or alleged untrue statement of a material
fact contained in the Registration Statement as originally filed or in
any amendment therefor and supplement thereof, or in the Joint Proxy
Statement/Prospectus, or in any amendment therefor or supplement
thereof, and provided for inclusion thereof by the Indemnifying Party
or (ii) arise primarily out of or are based primarily upon the omission
or alleged omission by the Indemnifying Party in supplying information
to be included in the Registration Statement as originally filed or in
any amendment therefor and supplement thereof, or in the Joint Proxy
Statement/Prospectus, or in any amendment therefor and supplement
thereof, a material fact required to be stated therein or necessary to
make the statements made therein not misleading, and agrees to
reimburse each such
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Indemnified Party, as incurred, for any legal or other expenses
reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided,
however, no Indemnified Party shall be entitled to be indemnified or
held harmless hereunder for such party's gross negligence or willful
misconduct.
(b) Allegiant and Southside agree that Surviving Corporation
agrees to indemnify and hold harmless each shareholder of Southside who
is a shareholder at the Effective Time for any federal, state or local
income tax (including interest, additions to tax, and penalties) that
is assessed or otherwise becomes due and owing with respect to
Surviving Corporation Common Stock received by such shareholder of
Southside with respect to Stock Election Shares or the Stock
Distribution portion of Combination Election Shares pursuant to the
Merger to the extent that the receipt by such shareholder of such
Surviving Corporation Common Stock in the Merger is taxable to such
shareholder with respect to the receipt by such shareholder of Stock
Election Shares or the Stock Distribution portion of Combination
Election Shares for federal, state or local income tax purposes (a "Tax
Loss"). In the case of any Tax Loss that is indemnifiable pursuant to
this Section 8.02(b), the amount that shall be paid by Surviving
Corporation pursuant to the foregoing provisions of this Section
8.02(b) (the "Amount") shall be increased, in addition to the Amount,
by an additional cash payment (the "Additional Payment") sufficient to
put the recipient shareholder in the position such that the Amount plus
the Additional Payment shall, after deduction of all net income and
other taxes required to be paid by such shareholder in respect of the
receipt of the Amount and the Additional Payment (taking into account
any allowable credits or deductions arising therefrom), be equal to the
Amount (such increase being deemed to mean that the Amount is paid on
an "After-Tax Basis"). Such calculations shall be made with respect to
all such income taxes on the assumption that the recipient is subject
to net income taxation at the highest applicable federal, state and
local combined marginal income tax rate (the "Combined Tax Rate").
If as a result of a Tax Loss occurring with respect to any taxable year
under circumstances that require Surviving Corporation to make any
payments described in this Section 8.02(b) with respect to such Tax
Loss, any shareholder entitled to such payments shall recognize with
respect to any taxable year in which such Tax Loss occurs or any
subsequent year ending within three (3) years after the Effective Time
any deduction, loss, credit, increased loss or reduced gain as a result
of an increase in adjusted basis of the Surviving Corporation shares
received pursuant to the Merger or other benefit that would not
otherwise have been recognized but for such Tax Loss, such benefit
shall either be taken into account in determining the amount payable to
such shareholder pursuant to this Section 8.02(b), or to the extent
such benefit was not so taken into account at the time the Amounts and
Additional Amounts were paid pursuant to this Section 8.02(b) and if
such benefits are recognized and taken into account in a year
subsequent to a year with respect to which the Tax Loss occurs, but
within three (3) years thereof, then such shareholder shall pay to
Surviving Corporation (without adjustment for time value of money) an
amount equal on an After-Tax Basis to the sum of (i) the reduction in
federal, state and local income taxes, if any (computed on the
assumption that such taxes are paid at the Combined Tax Rate),
recognized by such shareholder attributable to any Tax Loss previously
indemnified by Surviving Corporation hereunder and (ii) the reduction
in federal, state and local income taxes realized by such shareholder
as a direct result of any payment pursuant to this sentence.
If the IRS proposes in writing in a 30-day letter or notice of
deficiency an adjustment which may result in a Tax Loss, such affected
shareholder shall, within sixty (60) days of its receipt, notify
Surviving Corporation in writing of such adjustment and any reason
stated therefor and of all action taken or proposed to be taken by the
IRS and the proposed date for the commencement of
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such action (it being understood, however, that a defective notice
shall not be cause for Surviving Corporation not to make any payment
hereunder unless Surviving Corporation is actually prejudiced thereby).
If Surviving Corporation shall request in writing within thirty (30)
days after the date of such notification of Surviving Corporation that
such matter be contested, the shareholder, at Surviving Corporation's
sole cost and expense, shall be obligated to contest such proposed
adjustment, including in any appropriate court of law (provided,
however, that such shareholder shall not be obligated to appeal any
adverse determination to the United States Supreme Court) and such
shareholder and its counsel (who shall be selected at the sole
discretion of Surviving Corporation) shall consult in good faith with
Surviving Corporation regarding the conduct of such contest; provided,
however, if there are issues being contested with the IRS in addition
to the one giving rise to the Tax Loss, the shareholder may retain
counsel of his choice. Counsel selected by such shareholder and counsel
selected by Surviving Corporation shall cooperate in contesting the
merger; provided, further, that such shareholder shall not settle or
otherwise compromise any such issue giving rise to any Tax Loss without
the prior written consent of Surviving Corporation, if the effect of
such settlement or compromise would be to impose liability on Surviving
Corporation hereunder. Otherwise, any Amount and Additional Payment
payable to any shareholder in the event of an unfavorable resolution of
a contest shall be payable no sooner than ten (10) days after the Final
Determination (as hereinafter defined) with respect to such contest.
Any Amount and Additional Amount payable to any shareholder hereunder
shall be paid no later than thirty (30) days after receipt of a written
demand therefor from such shareholder, setting forth in detail the
computation of such amount, but such payment shall not be due prior to
the earlier of (i) the date such shareholder would pay additional
income taxes on account of such Tax Loss (including any estimated taxes
with respect thereto) or (ii) the date such shareholder shall suffer a
reduction in the amount of any refund of income taxes that the
shareholder would have been entitled to receive but for such Tax Loss.
"Final Determination" with respect to a Tax Loss shall mean the earlier
of (i) a decision, judgment, decree or other order by any court of
competent jurisdiction, which decision, judgment, decree or other order
has become final (e.g., when all allowable appeals thereof have been
exhausted by either party to the action or the time for filing such
appeal has expired) or the acceptance of the terms of an administrative
determination if Surviving Corporation consents in writing to such
acceptance, or (ii) the date of execution of a closing agreement
entered into under Section 7121 of the Code or any other settlement
agreement entered into in connection with an administrative or judicial
proceeding.
Notwithstanding the foregoing, Surviving Corporation shall not
indemnify any shareholder pursuant to this Section 8.02(b) to the
extent that the Tax Loss is attributable, in whole or in part, to (i)
any change in statute, code, ordinance or regulation occurring after
the Effective Time which causes a Tax Loss, (ii) any failure by any
shareholder to report the Merger in accordance with the intended
treatment under this Agreement as a transaction under Section
368(a)(1)(A) of the Code, (iii) a knowing failure by a shareholder to
take reasonable action or to furnish reasonable cooperation to
Surviving Corporation which prevents Allegiant from diligently
fulfilling its obligations under this Section 8.02(b), (iv) any knowing
and material written misrepresentation made by Southside or any officer
or employee thereof to Surviving Corporation's counsel in connection
with the rendering of the tax opinion contemplated by Section 6.02(e)
hereof or (v) any material breach by Southside or any Southside
Subsidiary of its representation and warranty under Section 2.24
hereof.
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8.03 No Assignment; Successors and Assigns. This Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors (including any corporation deemed to be a successor corporation of
any of the parties by operation of law) and assigns, but neither this Agreement
nor any right or obligation set forth in any provision hereof may be transferred
or assigned (except by operation of law) by any party hereto without the prior
written consent of the other party, and any purported transfer or assignment in
violation of this Section 8.03 shall be void and of no effect. Surviving
Corporation shall be deemed to be a successor to Allegiant and Southside
hereunder. There shall not be any third party beneficiaries of any provisions
hereof except for Sections 1.06, 1.08, 1.09, 1.10, 5.09, 5.12, 5.13, 5.14 and
8.02 which may be enforced against Allegiant or Southside, as the case may be,
by the parties therein identified or described.
8.04 Severability. Nothing in this Agreement shall be construed to
require any party (or any subsidiary of a party) to take any action or fail to
take any action in violation of any applicable law, rule or regulation. Whenever
possible, each provision of this Agreement shall be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement shall be held to be prohibited by or invalid under applicable law,
such provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remaining provisions of this Agreement.
8.05 No Implied Waiver. No failure or delay on the part of any party
hereto to exercise any right, power or privilege hereunder or under any
instrument executed pursuant hereto shall operate as a waiver nor shall any
single or partial exercise of any right, power or privilege preclude any other
or further exercise thereof or the exercise of any other right, power or
privilege.
8.06 Headings. Article, section, subsection and paragraph titles,
captions and headings herein are inserted only as a matter of convenience and
for reference, and in no way define, limit, extend or describe the scope of this
Agreement or the intent of any provision hereof.
8.07 Entire Agreement. This Agreement and the Schedules and Exhibits
hereto constitute the entire agreement between the parties with respect to the
subject matter hereof and supersede all prior negotiations, representations,
warranties, commitments, offers, letters of interest or intent, proposal
letters, contracts, writings or other agreements or understandings with respect
thereto. No waiver, and no modification or amendment, of any provision of this
Agreement, shall be effective unless specifically made in writing and duly
signed by all parties thereto.
8.08 Counterparts. This Agreement may be executed in one or more
counterparts, and any party to this Agreement may execute and deliver this
Agreement by executing and delivering any of such counterparts, each of which
when executed and delivered shall be deemed to be an original and all of which
taken together shall constitute one and the same instrument.
8.09 Notices. All notices, requests, demands, claims or other
communications hereunder shall be in writing and shall be deemed to be duly
received (a) on the date given if delivered personally or by cable, telegram,
telex or facsimile or (b) on the date received if mailed by registered or
certified mail (return receipt requested), to the parties at the following
addresses (or at such other address for a party as shall be specified by like
notice):
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(i) if to Southside:
Southside Bancshares Corp.
0000 Xxxxxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxxxx
Facsimile: 314-776-2332
Copy to:
Xxxxx, Rice & Xxxxxxxx, X.X.
000 X. Xxxxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxxx
Facsimile: 000-000-0000
(ii) if to Allegiant
Allegiant Bancorp, Inc.
0000 Xxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxx
Facsimile: (000) 000-0000
Copy to:
Xxxxxxxx Xxxxxx, LLP
Xxx Xxxxxxx Xxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxx
Facsimile: (000) 000-0000
8.10 Governing Law. This Agreement shall be governed by and controlled
as to validity, enforcement, interpretation, effect and in all other respects by
the internal laws of the State of Missouri applicable to contracts made in that
state.
* * *
[Remainder of page intentionally left blank.]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement and
Plan of Merger to be signed by their respective officers thereunto duly
authorized and their respective corporate seals to be affixed hereto, all as of
the date first written above.
Attest: Southside BANCSHARES CORP.
By
------------------------------ --------------------------------------
Name: Name:
------------------------ -----------------------------------
Title:
-----------------------------------
Attest: ALLEGIANT BANCORP, INC.
By
------------------------------ --------------------------------------
Name: Name:
------------------------ -----------------------------------
Title:
-----------------------------------
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APPENDIX I
The following terms are defined in the following sections:
Term: Section
---- -------
401(k)......................................................................................5.09(d)
AB..........................................................................................3.02(b)
Accumulated Funding Deficiency..............................................................2.19(c)
Acquisition Proposal........................................................................4.03(a)
Additional Payment..........................................................................8.02
After-Tax Basis.............................................................................8.02(b)
Agreement...................................................................................Recitals
Allegiant Common Stock......................................................................1.07(b)
Allegiant Employee Stock Options............................................................1.08(d)
Allegiant Employee/Director Stock Grants....................................................3.03
Allegiant Financial Statements..............................................................3.05(b)
Allegiant Insiders..........................................................................5.15
Allegiant Merger Consideration..............................................................1.07(b)
Allegiant Option............................................................................5.14(b)
Allegiant Property..........................................................................3.12(c)
Allegiant Reports...........................................................................3.06
Allegiant Returns...........................................................................3.08
Allegiant Section 16 Information............................................................5.15
Allegiant Subsidiary/Subsidiaries...........................................................3.02(a)
Allegiant Termination Fee...................................................................7.02(c)
Allegiant Voting Agreement/Agreements.......................................................Recitals
Allegiant...................................................................................Recitals
Amount......................................................................................8.02(b)
Approval Date...............................................................................1.03
Associate...................................................................................2.17
Best Knowledge..............................................................................1.16
BHCA........................................................................................Recitals
Cash Distribution...........................................................................1.07(a)(i)
Cash Election Shares........................................................................1.08(b)
Certificates................................................................................1.08(a)
Closing Date................................................................................1.02
Closing.....................................................................................1.02
Code........................................................................................2.19(b)
Combined Distribution.......................................................................1.07(a)(iii)
Combined Election Shares....................................................................1.08(b)
Combined Tax Rate...........................................................................8.02(b)
Disclosure Schedule.........................................................................1.17(a)
Dissenting Shares...........................................................................1.11(a)
Doubtful....................................................................................2.11(f)
Effective Time..............................................................................1.03
Election Deadline...........................................................................1.08(c)
Election Form...............................................................................1.08(a)
Equity Securities...........................................................................2.02(a)
ERISA.......................................................................................2.15(b)
ESOP........................................................................................5.09(d)
64
Excess Shares...............................................................................1.08(f)(ii)
Exchange Act................................................................................2.04(c)
Exchange Agent..............................................................................1.08(a)
FDI Act.....................................................................................2.02(b)
FDIC........................................................................................2.02(b)
Federal Reserve Board.......................................................................2.01
FHLB........................................................................................2.11(b)(v)
Final Determination Letter..................................................................5.09
Final Determination.........................................................................8.02
First Banks.................................................................................3.19
GAAP........................................................................................2.05(b)
Indemnified Party...........................................................................8.02(a)
Indemnifying Party..........................................................................8.02(a)
Insurance...................................................................................2.11(c); 3.09(c)
Investment Plan.............................................................................3.03
IRS.........................................................................................5.09(d)
Joint Proxy Statement/Prospectus............................................................2.22
Knowledge...................................................................................1.16
KSOP........................................................................................5.09(d)
Leased Real Property........................................................................2.08(a)
Lender Liability............................................................................2.11(f)
Lend to.....................................................................................4.02(f)
Lien........................................................................................2.02(a)
Loans.......................................................................................2.11(f); 3.09(f)
Loss........................................................................................2.11(f)
Material Adverse Effect.....................................................................1.15
Merger Consideration .......................................................................1.07(b)
Merger......................................................................................Recitals
Missouri Statute............................................................................1.01
Multiemployer Plan..........................................................................2.19(c)
No Election Shares..........................................................................1.08(c)
Non-Performing Assets.......................................................................2.18(d)
Owned Real Property.........................................................................2.08(a)
Pension Plans...............................................................................2.19(c)
Plan of Reorganization......................................................................1.14
Pre-Existing Facility.......................................................................4.02(f)
Prohibited Transaction......................................................................2.19(c)
Qualified...................................................................................2.19(c)
Real Property...............................................................................2.08(a)
Registration Statement......................................................................1.08(a)
Regulatory Authorities/Authority............................................................2.06
Required Documentation......................................................................1.09(c)
Reportable Events...........................................................................2.19(c)
Rights......................................................................................1.07(a)
SEC.........................................................................................1.07(c)
Securities Act..............................................................................2.04(c)
Service.....................................................................................8.02
Significant Event...........................................................................4.01
SNB.........................................................................................2.02(b)
Southside Common Stock......................................................................1.07(a)
Southside Employee Plans....................................................................2.19(a)
65
Southside Employee Stock Options............................................................2.03
Southside Financial Statements..............................................................2.05(b)
Southside Insiders..........................................................................5.6
Southside Merger Consideration..............................................................1.07(a)(iii)
Southside Property..........................................................................2.15(c)
Southside Reports...........................................................................2.06
Southside Returns...........................................................................2.09
Southside Rights Agreement..................................................................1.07(a)
Southside Section 16 Information............................................................5.16
Southside Shareholder List..................................................................1.12(b)
Southside Stock Plans.......................................................................2.03
Southside Subsidiary/Subsidiaries...........................................................2.02(a)
Southside Termination Fee...................................................................7.02(b)
Southside Voting Agreement/Agreements.......................................................Recitals
Southside...................................................................................Recitals
Stock Conversion Number.....................................................................1.08(f)(ii)
Stock Distribution..........................................................................1.07(a)(ii)
Stock Election Shares.......................................................................1.08(b)
Subsidiaries................................................................................1.07(c)
Superior Proposal ..........................................................................4.03(b)
Surviving Corporation Common Stock..........................................................1.07(a)(ii)
Surviving Corporation.......................................................................1.01
Tax Loss....................................................................................8.02(b)
Toxic Substance.............................................................................2.08(g)
Voting Agreements ..........................................................................Recitals
