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
-------------------------
APRIL 30, 2001
TABLE OF CONTENTS
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ARTICLE I THE MERGER......................................................................................2
1.01 The Merger......................................................................................2
1.02 Closing.........................................................................................2
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..............................................3
1.07 Conversion of Securities........................................................................3
1.08 Conversion Election Procedures..................................................................4
1.09 Exchange Procedures.............................................................................9
1.10 No Fractional Shares...........................................................................11
1.11 Dissenting Shares..............................................................................12
1.12 Closing of Stock Transfer Books................................................................12
1.13 Anti-Dilution..................................................................................13
1.14 Tax Consequences...............................................................................13
1.15 Material Adverse Effect........................................................................13
1.16 Knowledge......................................................................................13
1.17 Disclosure Schedules; Standard.................................................................14
ARTICLE II REPRESENTATIONS AND WARRANTIES OF SOUTHSIDE....................................................15
2.01 Organization and Authority.....................................................................15
2.02 Subsidiaries...................................................................................15
2.03 Capitalization.................................................................................16
2.04 Authorization..................................................................................16
2.05 Southside Financial Statements.................................................................17
2.06 Southside Reports..............................................................................18
2.07 Title to and Condition of Assets...............................................................18
2.08 Real Property..................................................................................19
2.09 Taxes..........................................................................................21
2.10 Material Adverse Effect........................................................................21
2.11 Loans, Commitments and Contracts...............................................................21
2.12 Absence of Defaults............................................................................24
2.13 Litigation and Other Proceedings...............................................................24
2.14 Directors' and Officers' Insurance.............................................................24
2.15 Compliance with Laws...........................................................................24
2.16 Labor..........................................................................................26
2.17 Material Interests of Certain Persons..........................................................26
2.18 Allowance for Loan and Lease Losses; Non-Performing Assets; Financial Assets...................26
2.19 Employee Benefits Plans........................................................................28
2.20 Conduct of Southside Since December 31, 2000...................................................29
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2.21 Absence of Undisclosed Liabilities.............................................................30
2.22 Joint Proxy Statement/Prospectus...............................................................30
2.23 Registration Obligations.......................................................................30
2.24 Tax and Regulatory Matters.....................................................................31
2.25 Brokers and Finders............................................................................31
2.26 Interest Rate Risk Management Instruments......................................................31
ARTICLE III REPRESENTATIONS AND WARRANTIES OF ALLEGIANT....................................................31
3.01 Organization and Authority.....................................................................31
3.02 Subsidiaries...................................................................................32
3.03 Capitalization of Allegiant....................................................................32
3.04 Authorization..................................................................................32
3.05 Allegiant Financial Statements.................................................................34
3.06 Allegiant Reports..............................................................................34
3.07 Environmental Matters..........................................................................34
3.08 Taxes..........................................................................................34
3.09 Loans, Commitments and Contracts...............................................................35
3.10 Absence of Defaults............................................................................38
3.11 Litigation and Other Proceedings...............................................................38
3.12 Compliance with Laws...........................................................................38
3.13 Allowance for Loan and Lease Losses; Non-Performing Assets; Financial Assets...................40
3.14 Absence of Undisclosed Liabilities.............................................................41
3.15 Material Adverse Effect........................................................................41
3.16 Joint Proxy Statement/Prospectus...............................................................41
3.17 Tax and Regulatory Matters.....................................................................41
3.18 Brokers and Finders............................................................................42
3.19 No Negotiations................................................................................42
3.20 Change of Control Payments.....................................................................42
ARTICLE IV CONDUCT OF BUSINESS PRIOR TO THE EFFECTIVE TIME................................................42
4.01 Conduct of Businesses Prior to the Effective Time..............................................42
4.02 Forbearances of Southside......................................................................43
4.03 Acquisition Proposals; Board Recommendation....................................................45
4.04 Forbearances of Allegiant......................................................................47
ARTICLE V ADDITIONAL AGREEMENTS..........................................................................47
5.01 Access and Information; Due Diligence..........................................................47
5.02 Regulatory Matters.............................................................................48
5.03 Shareholder Approval...........................................................................48
5.04 Current Information............................................................................49
5.05 Conforming Entries.............................................................................49
5.06 Agreements of Affiliates.......................................................................50
5.07 Expenses.......................................................................................50
5.08 Miscellaneous Agreements and Consents..........................................................51
5.09 Employee Agreements and Benefits...............................................................51
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5.10 Press Releases.................................................................................53
5.11 State Takeover Statutes........................................................................53
5.12 Directors' and Officers' Indemnification and Insurance.........................................53
5.13 Tax Matters....................................................................................54
5.14 Employee Stock Options.........................................................................54
5.15 Exemption from Liability under Section 16(b): Allegiant Insiders..............................55
5.16 Exemption from Liability under Section 16(b): Southside Insiders..............................56
5.17 No Negotiations................................................................................56
ARTICLE VI CONDITIONS.....................................................................................56
6.01 Conditions to Each Party's Obligation To Effect the Merger.....................................56
6.02 Conditions to Obligations of Southside.........................................................57
6.03 Conditions to Obligations of Allegiant.........................................................58
ARTICLE VII TERMINATION, AMENDMENT AND WAIVER..............................................................59
7.01 Termination....................................................................................59
7.02 Effect of Termination..........................................................................61
7.03 Amendment......................................................................................62
7.04 Waiver.........................................................................................62
ARTICLE VIII GENERAL PROVISIONS.............................................................................62
8.01 Non-Survival of Representations, Warranties and Agreements.....................................62
8.02 Indemnification................................................................................63
8.03 No Assignment; Successors and Assigns..........................................................65
8.04 Severability...................................................................................66
8.05 No Implied Waiver..............................................................................66
8.06 Headings.......................................................................................66
8.07 Entire Agreement...............................................................................66
8.08 Counterparts...................................................................................66
8.09 Notices........................................................................................66
8.10 Governing Law..................................................................................67
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;
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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
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THE MERGER
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1.01 The Merger. Subject to the terms and conditions of this
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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
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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").
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
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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
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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.
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");
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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 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
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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).
(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
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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 Xxxxxxxxx
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Xxxxxx Xxxxx owned by such holder at the Effective
Time, and (z) multiplying the difference
determined in (y) by $14.00 per share); and
(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
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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
(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
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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 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.
- 9 -
(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 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.
- 10 -
(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.
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.
- 11 -
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 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
- 12 -
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.
- 13 -
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.
- 14 -
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 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,
- 15 -
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 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
- 16 -
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 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,
- 17 -
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.
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,
- 18 -
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 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
- 19 -
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
- 20 -
equitable remedies. Southside has delivered complete and correct
copies of all the leases for the Leased Real Property to Allegiant.
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;
- 21 -
(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;
(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.
- 22 -
(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.
(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
- 23 -
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.
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
- 24 -
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 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
- 25 -
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 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
- 26 -
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).
----------------
- 27 -
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, 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.
- 28 -
(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.
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
- 29 -
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 Registration Statement; (ii)
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
- 30 -
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:
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.
-------------
- 31 -
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.
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
- 32 -
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
- 33 -
approval of, any public body or authority is necessary for the
consummation by Allegiant of the transactions contemplated by this
Agreement.
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
- 34 -
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 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
- 35 -
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);
(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."
----------------
- 36 -
(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 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.
- 37 -
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 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.
- 38 -
(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.
- 39 -
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.
- 40 -
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
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.
- 41 -
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 (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
- 42 -
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 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;
- 43 -
(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;
(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
- 44 -
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.
(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
- 45 -
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
- 46 -
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 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
- 47 -
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 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
- 48 -
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
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
- 49 -
(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.
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.
- 50 -
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.
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.
- 51 -
(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 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
- 52 -
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
- 53 -
directors of the 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
- 54 -
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 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
- 55 -
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
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.
- 56 -
(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 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
- 57 -
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 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.
- 58 -
(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 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;
- 59 -
(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.
- 60 -
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 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
- 61 -
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; 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.
- 62 -
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
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
- 63 -
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 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;
- 64 -
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.
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
- 65 -
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):
- 66 -
(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.]
- 67 -
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:
------------------------------
- 68 -
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
- 2 -
Election Deadline...........................................................................1.08(c)
Election Form...............................................................................1.08(a)
Equity Securities...........................................................................2.02(a)
ERISA.......................................................................................2.15(b)
ESOP........................................................................................5.09(d)
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
- 3 -
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)
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
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