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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
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THIS AGREEMENT AND PLAN OF MERGER, dated as of November 30, 1997
("Agreement"), is made by and between National City Corporation, a Delaware
corporation ("National City") and First of America Bank Corporation, a Michigan
corporation ("Company").
WHEREAS, National City and Company have each determined that it is in
the best interests of their respective stockholders and shareholders for Company
to merge with and into National City upon the terms and subject to the
conditions set forth in this Agreement;
WHEREAS, the respective Boards of Directors of National City and
Company have each approved this Agreement and the consummation of the
transactions contemplated hereby and approved the execution and delivery of this
Agreement;
WHEREAS, for Federal income tax purposes, it is intended that the
merger shall qualify as a reorganization under the provisions of Section 368 of
the Internal Revenue Code of 1986, as amended (the "Code");
WHEREAS, for accounting purposes, it is intended that the merger shall
be accounted for as a "pooling-of-interests";
WHEREAS, as a condition to, and contemporaneously with the execution of
this Agreement, the parties have entered into a stock option agreement, with the
Company as issuer and National City as grantee (the "Company Option Agreement")
in the form attached hereto as Exhibit A (as hereinafter defined); and
WHEREAS, as a condition to, and contemporaneously with the execution of
this Agreement, the parties have entered into a stock option agreement, with
National City as issuer and the Company as grantee (the "National City Option
Agreement") in the form attached hereto as Exhibit B.
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties and agreements contained herein, the parties hereto
hereby agree as follows:
I. THE MERGER
1.1 MERGER. Subject to the terms and conditions of this Agreement, at
the Effective Time (as defined in Section 1.3), Company will be merged with and
into National City and the separate corporate existence of the Company will
thereupon cease (the "Merger") in accordance
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with the applicable provisions of the Michigan Business Corporation Act ("MBCA")
and the Delaware General Corporation Law ("DGCL").
National City may at any time change the method of effecting the
combination with the Company (including without limitations the provisions of
this Article I) if and to the extent it deems such change to be desirable,
including without limitation to provide for a merger of the Company into a
wholly-owned subsidiary of National City; provided, however, that no such change
shall (A) alter or change the amount or kind of consideration to be issued to
holders of shares of common stock, par value $10.00 per share, of Company
("Company Common Stock") as provided for in this Agreement, (B) adversely affect
the tax treatment of the Company's stockholders as a result of receiving the
Merger Consideration (as hereinafter defined) or (C) materially impede or delay
consummation of the transactions contemplated by this Agreement.
1.2 EFFECTIVE TIME. As soon as practicable after satisfaction or waiver
of all conditions to the Merger and immediately prior to the Closing which shall
occur at the time set forth in Section 6.1, National City and Company (the
"Constituent Corporations") shall cause a certificate of merger complying with
the requirements of the DGCL (the " Delaware Certificate of Merger") to be filed
with the Secretary of State of the State of Delaware and the Certificate of
Merger complying with the requirements of the MBCA to be filed with the Michigan
Department of Consumer and Industry Services("Michigan Certificate of Merger").
The Merger will become effective at the time the later of the following to
occur: (a) the filing of the Delaware Certificate of Merger and (b) the filing
of the Michigan Certificate of Merger or such later time as shall be specified
in such filings ("Effective Time").
1.3 EFFECT OF MERGER. The Merger will have the effects specified in
MBCA and DGCL. Without limiting the generality of the foregoing, National City
will be the surviving corporation in the Merger (sometimes hereinafter referred
to as the "Surviving Corporation") and will continue to be governed by the laws
of the State of Delaware, and the separate corporate existence of National City
and all of its rights, privileges, powers and franchises, public as well as
private, and all its debts, liabilities and duties as a corporation organized
under the DGCL, will continue unaffected by the Merger.
1.4 CERTIFICATE OF INCORPORATION AND BY-LAWS. The Certificate of
Incorporation and By-laws of National City in effect immediately prior to the
Effective Time, which shall be in the form set forth in a disclosure letter
executed by National City and dated and delivered by National City to Company as
of the date hereof ("National City Disclosure Letter"), shall be the Certificate
of Incorporation and By-laws of the Surviving Corporation, until amended in
accordance with applicable law.
1.5 DIRECTORS AND OFFICERS.
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(a) SURVIVING CORPORATION. The directors and officers of
National City immediately prior to the Effective Time will be the
directors and officers, respectively, of the Surviving Corporation,
from and after the Effective Time, until their successors have been
duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the terms of the Surviving
Corporation's Certificate of Incorporation and By-laws and the DGCL.
(b) NATIONAL CITY. Promptly after the Effective Time, in
accordance with the Bylaws of National City, the Board of Directors of
National City shall increase its size to such number as is necessary to
create 5 vacancies and shall elect 5 Company directors to fill such
vacancies. The identity of the Company directors to be elected to
National City's Board of Directors shall be mutually agreed upon by
Company and National City prior to the Effective Time.
1.6 ADDITIONAL ACTIONS. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any further deeds,
assignments or assurances in law or any other acts are necessary or desirable to
(i) vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of Company, or (ii) otherwise carry out the purposes of
this Agreement, Company and its officers and directors shall be deemed to have
granted to the Surviving Corporation an irrevocable power of attorney to execute
and deliver all such deeds, assignments or assurances in law or any other acts
as are necessary or desirable to (i) vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation its right, title or interest in, to or
under any of the rights, properties or assets of Company or (ii) otherwise carry
out the purposes of this Agreement, Company and its officers and directors shall
be deemed to have granted to the Surviving Corporation an irrevocable power of
attorney to execute and deliver all such deeds, assignments or assurances in law
and to all acts necessary or proper to vest, perfect or confirm title to and
possession of such rights, properties or assets in the Surviving Corporation and
otherwise to carry out the purposes of this Agreement, and the officers and
directors of the Surviving Corporation are authorized in the name of Company or
otherwise to take any and all such action.
II. CONVERSION OF SHARES
2.1 CONVERSION OF SHARES. Subject to Section 2.3, at the Effective
Time,
(a) each then-outstanding share of Company Common Stock,
including each attached right issued pursuant to the Rights Agreement
between the Registrant and First of America Bank-Michigan, NA, dated as
of July 18, 1990 (Company Rights Agreement), not owned by National City
or any direct or indirect wholly-owned
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subsidiary of National City (except for any such shares of Company
Common Stock held in trust accounts, managed accounts or in any similar
manner as trustee or in a fiduciary capacity ("Trust Account Shares")
or acquired in satisfaction of debts previously contracted ("DPC
Shares") other than those shares of Company Common Stock held in the
treasury of the Company, will be canceled, retired and converted into
1.2 shares of common stock, par value $4.00 per share, of National City
("National City Common Stock") ( "Conversion Ratio"). The number of
shares of National City Common Stock that each share of Company Common
Stock will be converted into is sometimes referred to herein as the
"Merger Consideration";
(b) each then-outstanding share of Company Common Stock owned
by National City or any direct or indirect wholly-owned subsidiary of
National City (except for any shares that are Trust Account Shares or
DPC Shares) will be canceled and retired;
(c) each share of Company Common Stock issued and held in
Company's treasury will be canceled and retired; and
(d) each share of National City Common Stock issued and
outstanding immediately prior to the Effective Time shall continue to
be an issued and outstanding share of common stock, par value $4.00 per
share, of the Surviving Corporation from and after the Effective Time.
2.2 ASSUMPTION OF EMPLOYEE AND DIRECTOR STOCK OPTIONS. Except as
expressly provided in this Section 2.2, all rights under any stock option
granted by Company or its predecessors pursuant to The Restated First of America
Bank Corporation 1987 Stock Option Plan, First of America Bank Corporation
Director Stock Compensation Plan ("Director Option Plan") and the First of
America Bank Corporation Stock Compensation Plan, (collectively, the "Company
Option Plans") that remain outstanding and unexercised, whether vested or
unvested, immediately prior to the Effective Time ("Unexercised Options") shall
cease to represent a right to acquire shares of Company Common Stock and shall
be converted into the right to acquire that number of shares of National City
Common Stock equal to (a) the number of shares of Company Common Stock subject
to the Unexercised Option, multiplied by (b) the Conversion Ratio(rounded to the
nearest whole share). The exercise price per share of National City Common Stock
under the new option shall be equal to the exercise price per share of the
Company Common Stock which was purchasable under each Unexercised Option divided
by the Conversion Ratio (rounded to the nearest whole cent) necessary to assure
that the rights and benefits of the optionee under such option shall not be
increased or decreased by reason of this Section 2.2, and, in addition, each
option which is an "incentive stock option" as defined in Section 422 of the
Code shall be adjusted as required by section 424 of the Code and the
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regulations promulgated thereunder so as not to constitute a modification,
extension or renewal of the option within the meaning of section 424(h) of the
Code. On or before the Effective Time National City shall file, and maintain the
effectiveness of, a registration statement with the Securities and Exchange
Commission covering such options and the sale of the National City Common Stock
issued upon exercise of such options. At the Effective Time all Company Option
Plans shall be terminated with respect to the granting of any additional options
or option rights. The duration and other terms and conditions of the new options
shall be the same as the original Company options, except that reference to
Company shall be deemed to be references to National City.
2.3 EXCHANGE OF CERTIFICATES.
(a) EXCHANGE AGENT. Prior to the Effective Time, National City
shall designate National City Bank to act as exchange agent (the
"Exchange Agent") and First of America Bank - Michigan NA to act as
forwarding agent in connection with the Merger pursuant to an exchange
agent agreement providing for, among other things, the matters set
forth in this Section 2.3. Except as set forth herein, from and after
the Effective Time each holder of a certificate that immediately prior
to the Effective Time represented outstanding shares of Company Common
Stock ("Certificate") shall be entitled to receive in exchange
therefor, upon surrender thereof to the Exchange Agent, the Merger
Consideration for each share of Company Common Stock so represented by
the Certificate surrendered by such holder thereof. The certificates
representing shares of
National City Common Stock which constitute the Merger
Consideration shall be properly issued and countersigned and executed
and authenticated, as appropriate.
(b) Notice of Exchange. Promptly after the Effective Time,
National City and the Surviving Corporation shall cause the Exchange
Agent to mail and/or make available to each record holder of a
Certificate a notice and letter of transmittal (which shall specify
that delivery shall be effected, and risk of loss and title to the
Certificate shall pass, only upon proper delivery of the Certificate to
the Exchange Agent or its forwarding agent) advising such holder of the
effectiveness of the Merger and the procedures to be used in effecting
the surrender of the Certificate for exchange therefor. Upon surrender
to the Exchange Agent of a Certificate, together with such letter of
transmittal duly executed and completed in accordance with the
instructions thereon, and such other documents as may reasonably be
requested, the Exchange Agent shall promptly deliver to the person
entitled thereto the appropriate Merger Consideration for each share of
Company Common Stock so represented by the Certificate surrendered by
such holder thereof, and such Certificate shall forthwith be canceled.
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(c) TRANSFER. If delivery of all or part of the Merger
Consideration is to be made to a person other than the person in whose
name a surrendered Certificate is registered, it shall be a condition
to such delivery or exchange that the Certificate surrendered shall be
properly endorsed or shall be otherwise in proper form for transfer and
that the person requesting such delivery or exchange shall have paid
any transfer and other taxes required by reason of such delivery or
exchange in a name other than that of the registered holder of the
Certificate surrendered or shall have established to the reasonable
satisfaction of the Exchange Agent that such tax either has been paid
or is not payable.
(d) RIGHT TO MERGER CONSIDERATION. Subject to Subsection
2.3(e), until surrendered and exchanged in accordance with this Section
2.3, each Certificate shall, after the Effective Time, represent solely
the right to receive the Merger Consideration, multiplied by the number
of shares of Company Common Stock evidenced by such Certificate,
together with any dividends or other distributions as provided in
Sections 2.3(e) and 2.3(f), and shall have no other rights. From and
after the Effective Time, National City and Surviving Corporation shall
be entitled to treat such Certificates that have not yet been
surrendered for exchange as evidencing the ownership of the aggregate
Merger Consideration into which the shares of Company Common Stock
represented by such Certificates may be converted, notwithstanding any
failure to surrender such Certificates. One hundred eighty (180) days
following the Effective Time, the Exchange Agent shall deliver to the
Surviving Corporation any shares of National City Common Stock and
funds (including any interest received with respect thereto) which
National City has made available to the Exchange Agent and which have
not been disbursed to holders of Certificates, and thereafter such
holders shall be entitled to look to the Surviving Corporation (subject
to abandoned property, escheat or other similar laws) with respect to
the shares of National City Common Stock and cash in lieu of fractional
shares deliverable or payable upon due surrender of their Certificates.
Neither Exchange Agent nor any party hereto shall be liable to any
holder of shares of Company Common Stock for any Merger Consideration
(or dividends, distributions or interest with respect thereto)
delivered to a public official pursuant to any applicable abandoned
property, escheat or similar law.
(e) DISTRIBUTION WITH RESPECT TO UNEXCHANGED CERTIFICATES.
Whenever a dividend or other distribution is declared by National City
on the National City Common Stock, the record date for which is at or
after the Effective Time, the declaration shall include dividends or
other distributions on all shares issuable pursuant to this Agreement,
provided that no dividends or other distributions declared or made with
respect to National City Common Stock shall be paid to the holder of
any unsurrendered Certificate with respect to
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the share of National City Common Stock represented thereby until the
holder of such Certificate shall surrender such Certificate in
accordance with this Article II. The Surviving Corporation shall pay
any dividends or make any other distributions with a record date prior
to the Effective Time which may have been declared or made by the
Company on Company Common Stock in accordance with the terms of this
Agreement on or prior to the Effective Time and which remain unpaid at
the Effective Time.
(f) LOST OR DESTROYED EXCHANGED CERTIFICATES. In the event that
any Certificate shall have been lost, stolen or destroyed, the Exchange
Agent shall deliver in exchange for such lost, stolen or destroyed
certificate, upon the making of an affidavit of that fact by the holder
thereof in form satisfactory to the Exchange Agent, the Merger
Consideration, as may be required pursuant to this Agreement; provided,
however, that the Exchange Agent may, in its sole discretion and as a
condition precedent to the delivery of the Merger Consideration to
which the holder of such certificate is entitled as a result of the
Merger, require the owner of such lost, stolen or destroyed certificate
to deliver a bond in such sum as it may direct as indemnity against any
claim that may be made against Company, National City or the Exchange
Agent or any other party with respect to the certificate alleged to
have been lost, stolen or destroyed.
(g) VOTING WITH RESPECT TO UNEXCHANGED CERTIFICATES. Holders
of unsurrendered Certificates will not be entitled to vote at any
meeting of National City stockholders.
(h) NO FRACTIONAL SHARES. No certificates or scrip
representing fractional shares of National City Common Stock shall be
issued upon the surrender for exchange of a Certificate or
Certificates. No dividends or distributions of National City shall be
payable on or with respect to any fractional share and any such
fractional share interest will not entitle the owner thereof to vote or
to any rights of stockholders of National City. In lieu of any such
fractional shares, holders of Certificates otherwise entitled to
fractional shares shall be entitled to receive promptly from the
Exchange Agent a cash payment in an amount equal to the fraction of
such share of National City Common Stock to which such holder would
otherwise be entitled multiplied by the Market Price (as hereinafter
defined).
2.4 CLOSING OF THE COMPANY'S TRANSFER BOOKS. The stock transfer books
of Company shall be closed at the close of business on the business day
immediately preceding the date of the Effective Time. In the event of a transfer
of ownership of Company Common Stock which is not registered in the transfer
records of Company, the Merger Consideration to be distributed
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pursuant to this Agreement may be delivered to a transferee, if a Certificate is
presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and by payment of any applicable stock
transfer taxes. National City and The Exchange Agent shall be entitled to rely
upon the stock transfer books of Company to establish the identity of those
persons entitled to receive the Merger Consideration specified in this Agreement
for their shares of Company Common Stock, which books shall be conclusive with
respect to the ownership of such shares. In the event of a dispute with respect
to the ownership of any such shares, the Surviving Corporation and the Exchange
Agent shall be entitled to deposit any Merger Consideration represented thereby
in escrow with an independent party and thereafter be relieved with respect to
any claims to such Merger Consideration.
2.5 CHANGES IN NATIONAL CITY COMMON STOCK. If between the date of this
Agreement and the Effective Time, the shares of National City Common Stock shall
be changed into a different number of shares by reason of any reclassification,
recapitalization, split-up, combination or exchange of shares, or if a stock
dividend thereon shall be declared with a record date within said period, the
Merger Consideration shall be adjusted accordingly.
III. REPRESENTATIONS AND WARRANTIES OF NATIONAL CITY
National City hereby represents and warrants to Company that:
3.1 CORPORATE ORGANIZATION. National City is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Delaware and is duly qualified to do business as a foreign corporation in each
jurisdiction in which its ownership or lease of property or the nature of the
business conducted by it makes such qualification necessary, except for such
jurisdictions in which the failure to be so qualified would not have a Material
Adverse Effect. National City is registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended (the "BHCA"). National City has the
requisite corporate power and authority to own, lease and operate its properties
and assets and to carry on its business as it is now being conducted. National
City has heretofore delivered to Company true and complete copies of its
certificate of incorporation and By-laws.
3.2 AUTHORITY. National City has the requisite corporate power and
authority to execute and deliver this Agreement and, except for any required
approval of National City's stockholders, to consummate the transactions
contemplated by this Agreement. The execution and delivery of this Agreement and
the consummation of the transactions contemplated herein have been duly approved
by the Board of Directors of National City and no other corporate proceedings on
the part of National City are necessary to authorize this Agreement or to
consummate the transactions so contemplated, subject only to approval by the
stockholders of National City as
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provided in Subsection 5.15(b) of this Agreement. This Agreement has been duly
executed and delivered by, and constitutes valid and binding obligations of
National City enforceable against National City in accordance with its terms,
except as enforceability thereof may be limited by applicable bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and other similar
laws affecting the enforcement of creditors' rights generally and except that
the availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceedings
may be brought.
3.3 CAPITALIZATION. As of the date hereof, the authorized capital stock
of National City consists of 700,000,000 shares of National City Common Stock
and 5,000,000 shares of National City preferred stock. As of the close of
business on November 28, 1997 (i) 211,108,844 shares of National City Common
Stock were validly issued and outstanding, fully paid and nonassessable and (ii)
no shares of preferred stock were issued and outstanding. As of the date hereof,
except as set forth in this Section 3.3, pursuant to the exercise of employee
stock options under National City's various stock option plans in effect,
National City's dividend reinvestment plan and stock grants made pursuant to the
National City 1991 Restricted Stock Plan, pursuant to the National City Option
Agreement or set forth in the National City Disclosure Letter, there are no
other shares of capital stock of National City authorized, issued or outstanding
and there are no outstanding subscriptions, options, warrants, rights,
convertible securities or any other agreements or commitments of any character
relating to the issued or unissued capital stock or other securities of National
City obligating National City to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock of National City or
obligating National City to grant, extend or enter into any subscription,
option, warrant, right, convertible security or other similar agreement or
commitment. As of the date hereof, except as provided in this Agreement, there
are no voting trusts or other agreements or understandings to which National
City or any National City subsidiary is a party with respect to the voting of
the capital stock of National City. All of the shares of National City Common
Stock issuable in exchange for the Company Common Stock at the Effective Time in
accordance with this Agreement and all of the shares of National City Common
Stock issuable upon exercise of Unexercised Options will be, when so issued,
duly authorized, validly issued, fully paid and nonassessable and will not be
subject to preemptive rights.
3.4 SUBSIDIARIES. The name and state of incorporation of each
significant subsidiary (as defined in Paragraph 8.6(i) hereof) of National City
(collectively, the "Significant Subsidiaries") is set forth in the National City
Disclosure Letter. Each of the Significant Subsidiaries is a bank or a
corporation duly organized, validly existing and in good standing under the laws
of its respective jurisdiction of incorporation or organization and is duly
qualified to do business as a
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foreign corporation in each jurisdiction in which its ownership or lease of
property or the nature of the business conducted by it makes such qualification
necessary, except for such jurisdictions in which the failure to be so qualified
would not have a Material Adverse Effect. Each of the Significant Subsidiaries
has the requisite corporate power and authority to own, lease and operate its
properties and assets and to carry on its businesses as they are now being
conducted. Except as set forth in the National City Disclosure Letter, all
outstanding shares of capital stock of each of the Significant Subsidiaries are
owned by National City or another of National City's subsidiaries and are
validly issued, fully paid and (except pursuant to 12 USC Section 55 in the case
of each national bank subsidiary and applicable state law in the case of each
state bank subsidiary) nonassessable, are not subject to preemptive rights and
are owned free and clear of all liens, claims and encumbrances. There are no
outstanding subscriptions, options, warrants, rights, convertible securities or
any other agreements or commitments of any character relating to the issued or
unissued capital stock or other securities of any Significant Subsidiary
obligating any of the Significant Subsidiaries to issue, deliver or sell, or
cause to be issued, delivered or sold additional shares of its capital stock or
obligating any of the Significant Subsidiaries to grant, extend or enter into
any subscription, option, warrant, right, convertible security or other similar
agreement or commitment.
3.5 INFORMATION IN DISCLOSURE DOCUMENTS, REGISTRATION STATEMENT, ETC.
None of the information with respect to National City or any of National City's
subsidiaries provided by National City for inclusion in (i) the Registration
Statement to be filed with the Securities and Exchange Commission (the
"Commission") by National City on Form S-4 under the Securities Act of 1933, as
amended (the "Securities Act"), for the purpose of registering the shares of
National City Common Stock to be issued in the Merger (the "Registration
Statement") and (ii) any joint proxy statement of Company and National City
("Proxy Statement") required to be mailed to Company's shareholders and National
City's stockholders in connection with the Merger will, in the case of the Proxy
Statement or any amendments or supplements thereto, at the time of the mailing
of the Proxy Statement and any amendments or supplements thereto, and at the
time of the Company Meeting and the National City Meeting (as hereinafter
defined), or, in the case of the Registration Statement, at the time it becomes
effective, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading. The Registration Statement will comply as to form in all material
respects with the provisions of the Securities Act and the rules and regulations
promulgated thereunder. The Proxy Statement will comply as to form in all
material respects with the
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provisions of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder.
3.6 CONSENTS AND APPROVALS; NO VIOLATION. Except as set forth in the
National City Disclosure Letter, neither the execution and delivery of this
Agreement by National City nor the consummation by National City of the
transactions contemplated hereby will (a) conflict with or result in any breach
of any provision of its certificate of incorporation or By-laws of National
City, (b) violate, conflict with, constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in the
creation of any lien or other encumbrance upon any of the properties or assets
of National City or any of National City's subsidiaries under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which National
City or any of National City's subsidiaries is a party or to which they or any
of their respective properties or assets are subject, except for such
violations, conflicts, breaches, defaults, terminations, accelerations or
creations of liens or other encumbrances, which will not have a Material Adverse
Effect or (c) require any consent, approval, authorization or permit of or from,
or filing with or notification to, any court, governmental authority or other
regulatory or administrative agency or commission, domestic or foreign
("Governmental Entity"), except (i) pursuant to the Exchange Act and the
Securities Act, (ii) filing the Delaware Certificate of Merger and a designation
pursuant to the DGCL, (iii) filing the Michigan Certificate of Merger, (iv)
filings required under the securities or blue sky laws of the various states,
(v) filings under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (vi) filings with, and approval by, the Federal Reserve
Board (the "FRB"), (vii) filings with and approval by the Office of Thrift
Supervision ("OTS"), (viii) filings with, and approvals by, the Ohio
Superintendent of Banks, the Arizona Director of Insurance and such other state
regulatory agencies as may be required (collectively, the "State Entities"),
(ix) filings and approvals pursuant to any applicable state takeover law, (x)
filings and approvals under the Small Business Investment Act of 1958 and the
rules and regulations thereunder ("SBIA") or (xi) consents, approvals,
authorizations, permits, filings or notifications which, if not obtained or made
will not, individually or in the aggregate, have a Material Adverse Effect.
3.7 REPORTS AND FINANCIAL STATEMENTS. Since January 1, 1992, National
City and each of National City's subsidiaries have filed all reports,
registrations and statements, together with any required amendments thereto,
that they were required to file with the Commission under Section 12(b), 12(g),
13(a) or 14(a) of the Securities Exchange Act of 1934, including, but not
limited to Forms 10-K, Forms 10-Q and proxy statements (the "National City
Reports"). National City has
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previously furnished or will promptly furnish Company with true and complete
copies of each of National City's annual reports on Form 10-K for the years 1992
through 1996 and its quarterly reports on Form 10-Q for March 31, 1997, June 30,
1997 and September 30, 1997. As of their respective dates, the National City
Reports complied with the requirements of the Commission and did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstance under which they were made, not misleading. The audited
consolidated financial statements and unaudited interim financial statements of
National City included in the National City Reports have been prepared in
accordance with generally accepted accounting principles applied on a consistent
basis (except as may be indicated therein or in the notes thereto) and fairly
present the consolidated financial position of National City and National City's
subsidiaries as of the dates thereof and the results of their operations and
cash flows for the periods then ended subject, in the case of the unaudited
interim financial statements, to normal year-end and audit adjustments and any
other adjustments described therein. There exist no material liabilities of
National City and its consolidated subsidiaries, contingent or otherwise of a
type required to be disclosed in accordance with generally accepted accounting
practices, except as disclosed in the National City Reports. National City's
reserve for possible loan losses as shown in its Quarterly Report on Form 10-Q
for the fiscal quarter ended September 30, 1997 was adequate, within the meaning
of generally accepted accounting principles and safe and sound banking
practices.
3.8 TAXES. National City will promptly make available to Company, upon
request by Company, true and correct copies of the federal, state and local
income tax returns, and state and local property and sales tax returns and any
other tax returns filed by National City and any of National City's subsidiaries
for each of the fiscal years that remains open, as of the date hereof, for
examination or assessment of tax. National City and each National City
subsidiary have prepared in good faith and duly and timely filed, or caused to
be duly and timely filed, all federal, state, local and foreign income,
estimated tax, withholding tax, franchise, sales and other tax returns or
reports required to be filed by them on or before the date hereof, except to the
extent that all such failures to file, taken together, would not have a Material
Adverse Effect. National City and each of its subsidiaries have paid, or have
made adequate provision or set up an adequate accrual or reserve for the payment
of, all taxes, shown or required to be shown to be owing on all such returns or
reports, together with any interest, additions or penalties related to any such
taxes or to any open taxable year or period. Except as set forth in
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the National City Disclosure Letter, neither National City nor any of National
City's subsidiaries has consented to extend the statute of limitations with
respect to the assessment of any tax. Except as set forth in the National City
Disclosure Letter, neither National City nor any of National City's subsidiaries
is a party to any action or proceeding, nor to the best of National City's
knowledge is any such action or proceeding threatened, by any Governmental
Entity in connection with the determination, assessment or collection of any
taxes, and no deficiency notices or reports have been received by National City
or any of National City's subsidiaries in respect of any material deficiencies
for any tax, assessment, or government charges.
3.9 EMPLOYEE PLANS. Except as set forth in the National City Disclosure
Letter, all employee benefit, welfare, bonus, deferred compensation, pension,
profit sharing, stock option, employee stock ownership, consulting, severance,
or fringe benefit plans, formal or informal, written or oral, and all trust
agreements related thereto, relating to any present or former directors,
officers or employees of National City or its subsidiaries ("National City
Employee Plans") have been maintained, operated, and administered in substantial
compliance with their terms and currently comply, and have at all relevant times
complied, in all material respects with the applicable requirements of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), the Code,
and any other applicable laws. With respect to each National City Employee Plan
which is a pension plan (as defined in Section 3(2) of ERISA): (a) except for
recent amendment(s) to the plans not materially affecting the qualified status
of the plans (which are disclosed in, and copies of which are attached to, the
National City Disclosure Letter), each pension plan as amended (and any trust
relating thereto) intended to be a qualified plan under Section 401(a) of the
Code either: (i) has been determined by the Internal Revenue Service ("IRS") to
be so qualified, (ii) is the subject of a pending application for such
determination that was timely filed, or (iii) will be submitted for such a
determination prior to end of the "remedial amendment period" within the meaning
of Section 401(b) of the Code, (b) there is no accumulated funding deficiency
(as defined in Section 302 of ERISA and Section 412 of the Code), whether or not
waived, and no waiver of the minimum funding standards of such sections has been
requested from the IRS, (c) neither National City nor any of its subsidiaries
has provided, or is required to provide, security to any pension plan pursuant
to Section 401(a)(29) of the Code, (d) the fair market value of the assets of
each defined benefit plan (as defined in Section 3(35) of ERISA) exceeds the
value of the "benefit liabilities" within the meaning of Section 4001(a)(16) of
ERISA under such defined benefit plan as of the end of the most recent plan year
thereof ending prior to the date hereof, calculated on the basis of the
actuarial assumptions used in the most recent actuarial valuation for such
defined benefit plan as of the date hereof, (e) no reportable event described in
Section 4043 of ERISA for which the 30 day reporting requirement has not been
waived has occurred, (f) except as disclosed in the National City Disclosure
Letter, no defined benefit plan has been terminated, nor has the Pension Benefit
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Guaranty Corporation ("PBGC") instituted proceedings to terminate a defined
benefit plan or to appoint a trustee or administrator of a defined benefit plan,
and no circumstances exist that constitute grounds under Section 4042(a)(2) of
ERISA entitling the PBGC to institute any such proceedings and (g) no pension
plan is a "multiemployer plan" within the meaning of Section 3(37) of ERISA or a
"multiple employer plan" within the meaning of 413(c) of the Code. Neither
National City nor any of its subsidiaries has incurred any liability to the PBGC
with respect to any "single-employer plan" within the meaning of Section
4001(a)(15) of ERISA currently or formerly maintained by any entity considered
one employer with it under Section 4001 of ERISA or Section 414 of the Code,
except for premiums all of which have been paid when due. Neither National City
nor any of its subsidiaries has incurred any withdrawal liability with respect
to a multiemployer plan under Subtitle E of Title IV of ERISA. Except as set
forth in the National City Disclosure Letter, there is no basis for any person
to assert that National City or any of its subsidiaries has an obligation to
institute any Employee Plan or any such other arrangement, agreement or plan.
With respect to any insurance policy that heretofore has or currently does
provide funding for benefits under any National City Employee Plan, (A) there is
no liability on the part of National City or any of its subsidiaries in the
nature of a retroactive or retrospective rate adjustment, loss sharing
arrangement, or other actual or contingent liability, nor would there be any
such liability if such insurance policy was terminated, and (B) no insurance
company issuing such policy is in receivership, conservatorship, liquidation or
similar proceeding and, to the knowledge of National City, no such proceeding
with respect to any such insurer is imminent. Except as set forth in the
National City Disclosure Letter, neither the execution of this Agreement, nor
the consummation of the transactions contemplated thereby will (A) constitute a
stated triggering event under any National City Employee Plan that will result
in any payment (whether of severance pay or otherwise) becoming due from
National City or any of its subsidiaries to any present or former officer,
employee, director, shareholder, consultant or dependent of any of the foregoing
or (B) accelerate the time of payment or vesting, or increase the amount of
compensation due to any present or former officer, employee, director,
shareholder, consultant, or dependent of any of the foregoing. Neither National
City nor any of its subsidiaries has any obligations for retiree health and life
benefits under any National City Employee Plan, except as set forth in the
National City Disclosure Letter. There are no restrictions on the rights of
National City or its subsidiaries to amend or terminate any such National City
Employee Plan without incurring any liability thereunder.
3.10 MATERIAL CONTRACTS. Except as set forth in the National City
Disclosure Letter or disclosed in the National City Reports, neither National
City nor any of its subsidiaries is a party to, or is bound or affected by, or
receives benefits under (a) any employment, severance,
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termination, consulting or retirement agreement (collectively, "Benefit
Agreements") providing for aggregate payments to any person in any calendar year
in excess of $100,000, (b) any material agreement, indenture or other instrument
relating to the borrowing of money by National City or any of its subsidiaries
or the guarantee by National City or any of its subsidiaries of any such
obligation (other than trade payables and instruments relating to borrowings or
guaranties made in the ordinary course of business) or (c) any other contract or
agreement or amendment thereto that would be required to be filed as an exhibit
to a Form 10-K filed by National City with the Commission as of the date of this
Agreement (collectively, the "National City Contracts"). Neither National City
nor any of National City's subsidiaries is in default under any of the National
City Contracts, which default is reasonably likely to have, either individually
or in the aggregate, a Material Adverse Effect and there has not occurred any
event that with the lapse of time or the giving of notice or both would
constitute such a default. Neither National City nor any of National City's
subsidiaries is a party to, or is bound by, any collective bargaining agreement,
contract, or other agreement or understanding with a labor union or labor
organization, nor is National City or any of National City's subsidiaries the
subject of a proceeding asserting that it or any such subsidiary has committed
an unfair labor practice or seeking to compel it or such subsidiary to bargain
with any labor organization as to wages and conditions of employment, nor is
there any strike or other labor dispute involving it or any of its subsidiaries
pending or threatened.
3.11 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in the
National City Disclosure Letter or disclosed in the National City Reports filed
by National City with the Commission prior to the date of this Agreement, since
December 31, 1996, there has not been any change in the financial condition,
results of operations or business of National City and its subsidiaries which
would or in the future will have a Material Adverse Effect.
3.12 LITIGATION. Except as disclosed in the National City Reports filed
by National City with the Commission prior to the date of this Agreement, there
is no suit, action or proceeding pending, or, to the knowledge of National City,
threatened against or affecting National City or any of National City's
subsidiaries which, if decided adversely to National City, would be reasonably
expected to result in a Material Adverse Effect, nor is there any judgment,
decree, injunction, rule or order of any Governmental Entity or arbitrator,
outstanding against National City or any of National City's subsidiaries having,
or which, insofar as reasonably can be foreseen, in the future would have, a
Material Adverse Effect.
3.13 COMPLIANCE WITH LAWS AND ORDERS. Except as set forth in the
National City Disclosure Letter or disclosed in the National City Reports filed
by National City with the Commission prior to the date of this Agreement, the
businesses of National City and of National
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City's subsidiaries are not being conducted in violation of any law, ordinance,
regulation, judgment, order, decree, license or permit of any Governmental
Entity (including, without limitation, in the case of National City's
subsidiaries that are banks, all statutes, rules and regulations pertaining to
the conduct of the banking business and the exercise of trust powers), except
for violations which individually or in the aggregate do not, and, insofar as
reasonably can be foreseen, in the future will not, have a Material Adverse
Effect. Except as set forth in the National City Disclosure Letter, no
investigation or review by any Governmental Entity with respect to National City
or any of National City's subsidiaries is pending or, to the knowledge of
National City, threatened, nor has any Governmental Entity indicated an
intention to conduct the same in each case other than those the outcome of which
will not have a Material Adverse Effect.
3.14 AGREEMENTS WITH BANK REGULATORS, ETC. Neither National City nor
any National City subsidiary is a party to any written agreement or memorandum
of understanding with, or a party to any commitment letter, board resolution or
similar undertaking to, or is subject to any order or directive by, or is a
recipient of any extraordinary supervisory letter from, any Governmental Entity
which restricts materially the conduct of its business, or in any manner relates
to its capital adequacy, its credit or reserve policies or its management, nor
has National City been advised by any Governmental Entity that it is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, decree, agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter or similar
submission. Neither National City nor any of National City's subsidiaries is
required by Section 32 of the Federal Deposit Insurance Act ("FDIA") to give
prior notice to a Federal banking agency of the proposed addition of an
individual to its board of directors or the employment of an individual as a
senior executive officer. National City knows of no reason why the regulatory
approvals referred to in Subsection 3.6(c) should not be obtained.
3.15 NATIONAL CITY OWNERSHIP OF STOCK. As of the date of this
Agreement, neither National City nor any of its affiliates or associates (i)
beneficially owns, directly or indirectly, or (ii) are parties to any agreement,
arrangement or understanding for the purpose of acquiring, holding, voting or
disposing of, Company Common Stock (other than DPC Shares or Trust Account
Shares), which in the aggregate, represent 5% or more of the outstanding shares
of Company Common Stock.
3.16 ACCOUNTING TREATMENT; TAX TREATMENT. Neither National City nor, to
its best knowledge, any of its affiliates, has, through the date of this
Agreement, taken or agreed to take any action or knows of any reason that with
respect to National City and its affiliates would prevent National City from
accounting for the business combination to be effected by the Merger
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as a "pooling-of-interests." As of the date hereof, National City is aware of no
reason why the Merger will fail to qualify as a reorganization under Section
368(a) of the Code.
3.17 FEES. Except for the fees paid and payable to UBS Securities LLC
and NationsBank/Xxxxxxxxxx Securities, neither National City nor any of National
City's subsidiaries has paid or will become obligated to pay any fee or
commission to any broker, finder or intermediary in connection with the
transactions contemplated by this Agreement.
3.18 NATIONAL CITY ACTION. The Board of Directors of National City (at
a meeting duly called, constituted and held) has by the requisite vote of all
directors present (a) determined that the Merger is advisable and in the best
interests of National City and its stockholders and (b) approved this Agreement
and the transactions contemplated by this Agreement and (c) has directed that
the Merger be submitted for consideration by National City's stockholders at the
National City Meeting, as herein defined. The Board of Directors of National
City has approved the transactions contemplated by this Agreement, the National
City Option Agreement and the Company Option Agreement such that the provisions
of Section 203 of the DGCL and any other applicable state business combination
or anti-takeover provisions of National City Certificate of Incorporation or
By-laws shall not be triggered by the Merger, execution of this Agreement, the
National City Option Agreement or the Company Option Agreement or any
transactions contemplated by such Agreements.
3.19 VOTE REQUIRED. The affirmative vote of the holders of a majority
of the outstanding shares of National City Common Stock entitled to vote thereon
is the only vote of the holders of any class or series of National City capital
stock necessary to approve this Agreement and the transactions contemplated
herein.
3.20 MATERIAL INTERESTS OF CERTAIN PERSONS. Except as disclosed in
National City's Proxy Statement for its 1997 Annual Meeting of Stockholders, no
officer or director of National City, or any "associate" (as such term is
defined in Rule 14a-1 under the 0000 Xxx) of any such officer or director, has
any material interest in any material contract or property (real or personal),
tangible or intangible, used in or pertaining to the business of National City
or any of its subsidiaries.
3.21 ENVIRONMENTAL MATTERS. For purposes of this Agreement, the
following terms shall have the indicated meanings:
"ENVIRONMENTAL LAW" means any federal, state or local law,
statute, ordinance, rule, regulation, code, license, permit,
authorization, approval, consent, order, determination, judgment,
decree, injunction or agreement with any governmental entity relating
to (1) the health, protection, preservation, containment or restoration
of the environment including, without limitation, air, water vapor,
surface water, groundwater, drinking water
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supply, surface soil, subsurface soil, wetlands, plant and animal life
or any other natural resource, conservation, and/or (2) the use,
storage, recycling, treatment, generation, transportation, processing,
handling, labeling, production, release or disposal of Hazardous
Substances. The term Environmental Law includes without limitation (1)
the Comprehensive Environmental Response, Compensation and Liability
Act, as amended, 42 U.S.C. Section 9601, ET SEQ.; the Superfund
Amendments and Reauthorization Act of 1986, 42 U.S.C. 9601(2)(D); the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. Section
6901, ET SEQ.; the Clean Air Act, as amended, 42 U.S.C. Section 7401,
et seq.; the Federal Water Pollution Control Act, as amended by the
Clean Water Act, 33 U.S.C. Section 1251, ET SEQ.; the Toxic Substances
Control Act, as amended, 15 U.S.C. Section 9601, ET SEQ.; the Emergency
Planning and Community Right to Know Act, 42 U.S.C. Section 11001, ET
SEQ.; the Safe Drinking Water Act, 42 U.S.C. Section 300f, et seq.; and
all comparable state and local laws, ordinances, rules, regulations
respecting the interpretation or enforcement of same and (2) any common
law (including without limitation common law that may impose strict
liability) that may impose liability for injuries or damages due to the
release of any Hazardous Substance.
"HAZARDOUS SUBSTANCE" means (i) any hazardous wastes, toxic
chemicals, materials, substances or wastes as defined by or for the
purposes of any Environmental Law; (ii) any "oil", as defined by the
Clean Water Act, as amended from time to time, and regulations
promulgated thereunder (including crude oil or any fraction thereof and
any petroleum products or derivatives thereof); (iii) any substance,
the presence of which is prohibited, regulated or controlled by any
applicable federal, state or local laws, regulations, statutes or
ordinances now in force or hereafter enacted relating to waste disposal
or environmental protection with respect to the exposure to, or
manufacture, possession, presence, use, generation, storage,
transportation, treatment, release, emission, discharge, disposal,
abatement, cleanup, removal, remediation or handling of any such
substance; (iv) any asbestos or asbestos-containing materials,
polychlorinated biphenyls ("PCBs") in the form of electrical equipment,
fluorescent light fixtures with ballasts, cooling oils or any other
form, urea formaldehyde, atmospheric radon; (v) any solid, liquid,
gaseous or thermal irritant or contaminant, such as smoke, vapor, soot,
fumes, alkalis, acids, chemicals, pesticides, herbicides, sewage,
industrial sludge or other similar wastes; (vi) industrial, nuclear or
medical by-products; (vii) any lead based paint or coating and (viii)
any underground storage tank(s).
"LOAN PORTFOLIO PROPERTIES, TRUST PROPERTIES AND OTHER
PROPERTIES" means any real property, interest in real property,
improvements, appurtenances, rights and personal
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property attendant thereto, which is owned, leased as a landlord or a
tenant, licensed as a licensor or licensee, managed or operated or upon
which is held a mortgage, deed of trust, deed to secure debt or other
security interest by National City or Company, as the case may be, or
any of their subsidiaries whether directly, as an agent, as trustee or
other fiduciary or otherwise.
Except as set forth in the National City Disclosure Letter, (i)
to the best of National City's knowledge, neither National City nor any
of its subsidiaries is in violation of or has any liability, absolute
or contingent, in connection with or under any Environmental Law,
except any such violations or liabilities which would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse
Effect; (ii) to the best of National City's knowledge, none of the Loan
Portfolio Properties, Trust Properties and Other Properties of National
City or its subsidiaries is in violation of or has any liability,
absolute or contingent, under any Environmental Law, except any such
violations or liabilities which, individually or in the aggregate would
not have a Material Adverse Effect; and (iii) to the best of National
City's knowledge, there are no actions, suits, demands, notices,
claims, investigations or proceedings pending or threatened relating to
any Loan Portfolio Properties, Trust Properties and Other Properties
including, without limitation any notices, demand letters or requests
for information from any federal or state environmental agency relating
to any such liability under or violation of Environmental Law, which
would impose a liability upon National City or its subsidiaries
pursuant to any Environmental Law, except such as would not,
individually or in the aggregate have a Material Adverse Effect.
IV. REPRESENTATIONS AND WARRANTIES OF COMPANY
Company hereby represents and warrants to National City that:
4.1 CORPORATE ORGANIZATION. Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Michigan
and is duly qualified to do business as a foreign corporation in each
jurisdiction in which its ownership or lease of property or the nature of the
business conducted by it makes such qualification necessary, except for such
jurisdictions in which the failure to be so qualified would not have a Material
Adverse Effect. Company is registered as a bank holding company under the BHCA
and a savings association holding company under the Federal Homeowners Loan Act
of 1933, as Amended ("HOLA"). Company has the requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its business as it is now being conducted. Company has heretofore delivered to
National City true and complete copies of its Articles of Incorporation and
Bylaws.
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4.2 AUTHORITY. Company has the requisite corporate power and authority
to execute and deliver this Agreement and, except for any required approval of
Company's shareholders, to consummate the transactions contemplated by such. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated herein have been duly approved by the Board of
Directors of Company and no other corporate proceedings on the part of Company
are necessary to authorize this Agreement or to consummate the transactions so
contemplated, subject only to approval by the shareholders of Company as
provided in Section 5.15 (a) of this Agreement. This Agreement has been duly
executed and delivered by, and constitute valid and binding obligations of
Company, enforceable against Company in accordance with its terms, except as the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and other similar laws affecting
the enforcement of creditors' rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is subject
to the discretion of the court before which any proceedings may be brought.
4.3 CAPITALIZATION. As of the date hereof, the authorized capital stock
of Company consists of 200,000,000 shares of Company Common Stock and 10,000,000
shares of Company preferred stock. As of the close of business on November 28,
1997, 87,153,571 shares of Company Common Stock were validly issued and
outstanding, fully paid and nonassessable and no shares of preferred stock were
issued or outstanding. As of the date of this Agreement except as set forth in
this Section 4.3, pursuant to Company's Option Plans, pursuant to the Company
Option Agreement or set forth in a disclosure letter executed by Company and
dated and delivered by Company to National City as of the date hereof ("Company
Disclosure Letter"), there are no shares of capital stock of Company authorized,
issued or outstanding and there are no outstanding subscriptions, options,
warrants, rights, convertible securities or any other agreements or commitments
of any character relating to the issued or unissued capital stock or other
securities of Company obligating Company to issue, deliver or sell, or cause to
be issued, delivered or sold, additional shares of capital stock of Company or
obligating Company to grant, extend or enter into any subscription, option,
warrant, right, convertible security or other similar agreement or commitment.
Except as set forth in the Company Disclosure Letter, there are no voting trusts
or other agreements or understandings to which Company or any of Company's
subsidiaries is a party with respect to the voting of the capital stock of
Company. As of the date of this Agreement, there were outstanding under the
Company Option Plans options to purchase 2,968,618 shares of Company Common
Stock, which Company stock options had a weighted average exercise price of
$33.78 and for which adequate shares of Company Common Stock have been reserved
for issuance under the Company Option Plans.
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4.4 SUBSIDIARIES. The Company Disclosure Letter sets forth the name and
state of incorporation of each subsidiary of Company (collectively, "Company
Subsidiaries"). Each of Company Subsidiaries is a bank, a corporation or other
business entity duly organized, validly existing and in good standing under the
laws of its respective jurisdiction of incorporation or organization and is duly
qualified to do business as a foreign corporation or foreign business entity in
each jurisdiction in which its ownership or lease of property or the nature of
the business conducted by it makes such qualification necessary, except for such
jurisdictions in which the failure to be so qualified would not have a Material
Adverse Effect. Each of Company Subsidiaries has the requisite corporate power
and authority to own, lease and operate its properties and assets and to carry
on its businesses as they are now being conducted. Except as set forth in the
Company Disclosure Letter, all outstanding shares of capital stock of each
Company Subsidiary is owned by Company or another Company Subsidiary and are
validly issued, fully paid and (except pursuant to 12 USC Section 55 in the case
of each national bank subsidiary and applicable state law in the case of each
state bank subsidiary) nonassessable, are not subject to preemptive rights and
are owned free and clear of all liens, claims and encumbrances. There are no
outstanding subscriptions, options, warrants, rights, convertible securities or
any other agreements or commitments of any character relating to the issued or
unissued capital stock or other securities of any Company Subsidiary obligating
any Company Subsidiary to issue, deliver or sell, or cause to be issued,
delivered or sold additional shares of its capital stock or obligating any
Company Subsidiary to grant, extend or enter into any subscription, option,
warrant, right, convertible security or other similar agreement or commitment.
4.5 INFORMATION IN DISCLOSURE DOCUMENTS, REGISTRATION STATEMENT, ETC.
None of the information with respect to Company or any Company Subsidiary
provided by Company for inclusion in the Proxy Statement or the Registration
Statement will, in the case of the Proxy Statement or any amendments or
supplements thereto, at the time of the mailing of the Proxy Statement and any
amendments or supplements thereto, and at the time of the Company Meeting (as
hereinafter defined) and the National City Meeting, or, in the case of the
Registration Statement, at the time it becomes effective, contain any untrue
statement of material fact or omit to state any material fact required to be
stated therein or necessary in order to make the statements therein, in light of
the circumstances under which they are made, not misleading. The Proxy Statement
will comply as to form in all material respects with the provisions of the
Exchange Act and the rules and regulations promulgated thereunder.
4.6 CONSENT AND APPROVALS; NO VIOLATION. Except as set forth in the
Company Disclosure Letter neither the execution and delivery of this Agreement
by Company nor the
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consummation by Company of the transactions contemplated hereby will (a)
conflict with or result in any breach of any provision of its articles of
incorporation or Bylaws of Company, (b) violate, conflict with, constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in the creation of any lien or other
encumbrance upon any of the properties or assets of Company or any of Company
Subsidiaries under, any of the terms, conditions or provisions of any note,
bond, mortgage, indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which Company or any Company Subsidiary is a party
or to which they or any of their respective properties or assets are subject,
except for such violations, conflicts, breaches, defaults, terminations,
accelerations or creations of liens or other encumbrances, which will not have a
Material Adverse Effect or (c) require any consent, approval, authorization or
permit of or from, or filing with or notification to, any Governmental Entity,
except (i) pursuant to the Exchange Act and the Securities Act, (ii) filing the
Delaware Certificate of Merger, (iii) filing the Michigan Certificate of Merger,
(iv) filings required under the securities or blue sky laws of the various
states, (v) filing under the HSR Act, (vi) filings with, and approval by, the
FRB, (vii) filings with, and approval by, the OTS, (viii) filings with, and
approvals by, the State Entities, (ix) filings and approvals pursuant to any
applicable state takeover law, (x) filings and approvals under the SBIA or (xi)
consents, approvals, authorizations, permits, filings or notifications which, if
not obtained or made will not, individually or in the aggregate, have a Material
Adverse Effect.
4.7 REPORTS AND FINANCIAL STATEMENTS. Since January 1, 1992, Company
and each Company Subsidiary have filed all reports, registrations and
statements, together with any required amendments thereto, that they were
required to file with the Commission under Sections 12(b), 12(g), 13(a) or 14(a)
of the Securities Exchange Act of 1934, including, but not limited to Forms
10-K, Forms 10-Q and proxy statements (the "Company Reports"). Company has
previously furnished or will promptly furnish National City with true and
complete copies of each of Company's annual reports on Form 10-K for the years
1992 through 1996 and its quarterly reports on Form 10-Q for March 31, 1997,
June 30, 1997 and September 30, 1997. As of their respective dates, Company
Reports complied with the requirements of the Commission and did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstance under which they were made, not misleading. The audited
consolidated financial statements and unaudited interim financial statements of
Company included in the Company Reports have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis (except
as may be indicated therein or in the notes thereto) and fairly
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present the financial position of Company and Company Subsidiaries taken as a
whole as at the dates thereof and the consolidated results of their operations
and cash flows for the periods then ended subject, in the case of the unaudited
interim financial statements, to normal year-end and audit adjustments and any
other adjustments described therein. There exist no material liabilities of
Company and its consolidated subsidiaries, contingent or otherwise of a type
required to be disclosed in accordance with generally accepted accounting
practices, except as disclosed in the Company Reports. Company's reserve for
possible loan losses as shown in its Quarterly Report on Form 10-Q for the
fiscal quarter ended September 30, 1997 was adequate, within the meaning of
generally accepted accounting principles and safe and sound banking practices.
4.8 TAXES. Company will promptly make available to National City, upon
request by National City, true and correct copies of the federal, state and
local income tax returns, and state and local property and sales tax returns
filed by Company and Company Subsidiaries for each of the fiscal years that
remains open, as of the date hereof, for examination or assessment of tax.
Company and each Company Subsidiary have prepared in good faith and duly and
timely filed, or caused to be duly and timely filed, all federal, state, local
and foreign income, franchise, sales and other tax returns or reports required
to be filed by them on or before the date hereof, except to the extent that all
failures to file, taken together, would not have a Material Adverse Effect.
Company and each Company Subsidiary have paid, or have made adequate provision
or set up an adequate accrual or reserve for the payment of, all taxes shown or
required to be shown to be owing on all such returns or reports, together with
any interest, additions or penalties related to any such taxes or to any open
taxable year or period. Except as set forth in the Company Disclosure Letter,
neither Company nor any Company Subsidiary has consented to extend the statute
of limitations with respect to the assessment of any tax. Except as set forth in
the Company Disclosure Letter, neither Company nor any of Company Subsidiaries
is a party to any action or proceeding, nor to the best of Company's knowledge
is any such action or proceeding threatened, by any Governmental Entity in
connection with the determination, assessment or collection of any taxes, and no
deficiency notices or reports have been received by Company or any of Company
Subsidiaries in respect of any material deficiencies for any tax, assessment, or
government charge.
4.9 EMPLOYEE PLANS. Except as set forth in the Company Disclosure
Letter, all employee benefit, welfare, bonus, deferred compensation, pension,
profit sharing, stock option, employee stock ownership, consulting, severance,
or fringe benefit plans, formal or informal, written or oral and all trust
agreements related thereto, relating to any present or former directors,
officers or employees of Company or Company Subsidiaries ("Company Employee
Plans") have been maintained, operated, and administered in substantial
compliance with their terms and currently
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comply, and have at all relevant times complied, in all material respects with
the applicable requirements of ERISA, the Code, and any other applicable laws.
Except as set forth in the Company Disclosure Letter, with respect to each
Company Employee Plan which is a pension plan (as defined in Section 3(2) of
ERISA): (a) except for recent amendment(s) to the plans not materially affecting
the qualified status of the plans (which are disclosed in the Company Disclosure
Letter, and copies of which were previously made available to National City),
each pension plan as amended (and any trust relating thereto) intended to be a
qualified plan under Section 401(a) of the Code either has been determined by
the IRS to be so qualified or is the subject of a pending application for such
determination that was timely filed, (b) there is no accumulated funding
deficiency (as defined in Section 302 of ERISA and Section 412 of the Code),
whether or not waived, and no waiver of the minimum funding standards of such
sections has been requested from the IRS, (c) neither Company nor any of the
Company Subsidiaries has provided, or is required to provide, security to any
pension plan pursuant to Section 401(a)(29) of the Code, (d) the fair market
value of the assets of each defined benefit plan (as defined in Section 3(35) of
ERISA) exceeds the value of the "benefit liabilities" within the meaning of
Section 4001(a)(16) of ERISA under such defined benefit plan as of the end of
the most recent plan year thereof ending prior to the date hereof, calculated on
the basis of the actuarial assumptions used in the most recent actuarial
valuation for such defined benefit plan as of the date hereof, (e) no reportable
event described in Section 4043 of ERISA for which the 30 day reporting
requirement has not been waived has occurred, (f) no defined benefit plan has
been terminated, nor has the PBGC instituted proceedings to terminate a defined
benefit plan or to appoint a trustee or administrator of a defined benefit plan,
and no circumstances exist that constitute grounds under Section 4042(a)(2) of
ERISA entitling the PBGC to institute any such proceedings and (g) no pension
plan is a "multiemployer plan" within the meaning of Section 3(37) of ERISA or a
"multiple employer plan" within the meaning of 413(c) of the Code. Neither
Company nor any Company Subsidiary has incurred any liability to the PBGC with
respect to any "single-employer plan" within the meaning of action 4001(a)(15)
of ERISA currently or formerly maintained by any entity considered one employer
with it under Section 4001 of ERISA or Section 414 of the Code, except for
premiums all of which have been paid when due. Neither Company nor any of its
subsidiaries has incurred any withdrawal liability with respect to a
multiemployer plan under Subtitle E of Title IV of ERISA. Except as set forth in
the Company Disclosure Letter, there is no basis for any person to assert that
Company or any of its subsidiaries has an obligation to institute any Employee
Plan or any such other arrangement, agreement or plan. With respect to any
insurance policy that heretofore has or currently does provide funding for
benefits under any Company Employee Plan, (A) there is no
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liability on the part of Company or any of its subsidiaries in the nature of a
retroactive or retrospective rate adjustment, loss sharing arrangement, or other
actual or contingent liability, not would there be any such liability if such
insurance policy was terminated, and (B) no insurance company issuing such
policy is in receivership, conservatorship, liquidation or similar proceeding
and, to the knowledge of Company, no such proceeding with respect to any such
insurer is imminent. Except as set forth in the Company Disclosure Letter,
neither the execution of this Agreement, nor the consummation of the
transactions contemplated thereby will (A) constitute a stated triggering event
under any Company Employee Plan that will result in any payment (whether of
severance pay or otherwise) becoming due from Company or any of its subsidiaries
to any present or former officer, employee, director, shareholder, consultant or
dependent of any of the foregoing or (B) accelerate the time of payment or
vesting, or increase the amount of compensation due to any present or former
officer, employee, director, shareholder, consultant, or dependent of any of the
foregoing. Neither Company nor any Company Subsidiary has any obligations for
retiree health and life benefits under any Company Employee Plan, except as set
forth in the Company Disclosure Letter. Except as set forth in the Company
Disclosure Letter, there are no restrictions on the rights of Company or Company
Subsidiaries to amend or terminate any such Company Employee Plan without
incurring any liability thereunder.
4.10 MATERIAL CONTRACTS. Except as set forth in the Company Disclosure
Letter or disclosed in the Company Reports, neither Company nor any Company
Subsidiary is a party to, or is bound or affected by, or receives benefits under
(a) any Benefit Agreements providing for aggregate payments to any person in any
calendar year in excess of $100,000, (b) any material agreement, indenture or
other instrument relating to the borrowing of money by Company or any Company
Subsidiary or the guarantee by Company or any Company Subsidiary of any such
obligation (other than trade payables and instruments relating to transactions
entered into in the ordinary course of business) or (c) any other contract or
agreement or amendment thereto that would be required to be filed as an exhibit
to a Form 10-K filed by Company with the Commission as of the date of this
Agreement (collectively, the "Company Contracts"). Neither Company nor any
Company Subsidiary is in default under any Company Contract, which default is
reasonably likely to have, either individually or in the aggregate, a Material
Adverse Effect, and there has not occurred any event that with the lapse of time
or the giving of notice or both would constitute such a default. Except as set
forth in the Company Disclosure Letter, neither Company nor any of Company
Subsidiary is a party to, or is bound by, any collective bargaining agreement,
contract, or other agreement or understanding with a labor union or labor
organization, nor is Company or any Company Subsidiary the subject of a
proceeding asserting
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that is or any Company Subsidiary has committed an unfair labor practice or
seeking to compel it or such subsidiary to bargain with any labor organization
as to wages and conditions of employment, nor is there any strike or other labor
dispute involving it or any Company Subsidiary pending or threatened.
4.11 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as set forth in the
Company Disclosure Letter or disclosed in Company Reports filed by Company with
the Commission prior to the date of this Agreement, since December 31, 1996,
there has not been any change in the financial condition, results of operations
or business of Company and Company Subsidiaries which would or in the future
will have a Material Adverse Effect.
4.12 LITIGATION. Except as disclosed in Company Reports filed by
Company with the Commission prior to the date of this Agreement, there is no
suit, action or proceeding pending, or, to the knowledge of Company, threatened
against or affecting Company or any Company Subsidiary which, if determined
adversely to Company, would be reasonably expected to have a Material Adverse
Effect, nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator, outstanding against Company or any Company
Subsidiary having, or which, insofar as reasonably can be foreseen, in the
future would have, a Material Adverse Effect.
4.13 COMPLIANCE WITH LAWS AND ORDERS. Except as set forth in the
Company Disclosure Letter or as disclosed in Company Reports filed by Company
with the Commission prior to the date of this Agreement, the businesses of
Company and Company Subsidiaries are not being conducted in violation of any
law, ordinance, regulation, judgment, order, decree, license or permit of any
Governmental Entity (including, without limitation, in the case of Company
Subsidiaries that are banks, all statutes, rules and regulations pertaining to
the conduct of the banking business and the exercise of trust powers), except
for violations which individually or in the aggregate do not, and, insofar as
reasonably can be foreseen, in the future will not, have a Material Adverse
Effect. Except as set forth in the Company Disclosure Letter, no investigation
or review by any Governmental Entity with respect to Company or any Company
Subsidiary is pending or, to the knowledge of Company threatened, nor has any
Governmental Entity indicated an intention to conduct the same in each case
other than those the outcome of which will not have a Material Adverse Effect.
4.14 AGREEMENTS WITH BANK REGULATORS, ETC. Neither Company nor any
Company Subsidiary is a party to any written agreement or memorandum of
understanding with, or a party to any commitment letter, board resolution or
similar undertaking to, or is subject to any order or directive by, or is a
recipient of any extraordinary supervisory letter from, any Governmental Entity
which restricts materially the conduct of its business, or in any manner relates
to its capital
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adequacy, its credit or reserve policies or its management, except for those the
existence of which has been disclosed in the Company Disclosure Letter, nor has
Company been advised by any Governmental Entity that it is contemplating issuing
or requesting (or is considering the appropriateness of issuing or requesting)
any such order, decree, agreement, memorandum of understanding, extraordinary
supervisory letter, commitment letter or similar submission, except as set forth
in the Company Disclosure Letter. Neither Company nor any Company Subsidiary is
required by Section 32 of the Federal Deposit Insurance Act to give prior notice
to a Federal banking agency of the proposed addition of an individual to its
board of directors or the employment of an individual as a senior or executive
officer. Company knows of no reason why the regulatory approvals referred to in
Subsections 4.6(c) should not be obtained.
4.15 ACCOUNTING TREATMENT; TAX TREATMENT. Neither Company nor, to its
best knowledge, any of its affiliates, has, through the date of this Agreement,
taken or agreed to take any action or knows of any reason that with respect to
Company and its affiliates would prevent National City from accounting for the
business combination to be effected by the Merger as a "pooling-of-interests."
As of the date hereof, Company is aware of no reason why the Merger will fail to
qualify as a reorganization under Section 368(a) of the Code.
4.16 FEES. Except for fees paid and payable to Xxxxxxx Xxxxx & Co.,
neither Company nor any Company Subsidiary has paid or will become obligated to
pay any fee or commission to any broker, finder or intermediary in connection
with the transactions contemplated by this Agreement.
4.17 COMPANY ACTION. The Board of Directors of Company (at a meeting
duly called, constituted and held) has by the requisite vote of all directors
present (a) determined that the Merger is advisable and in the best interests of
Company and its shareholders, (b) approved this Agreement and the transactions
contemplated hereby, including the Merger, and (c) has directed that the Merger
be submitted for consideration by the Company's shareholders at the Company
Meeting. The Company has taken all steps necessary to exempt (i) the execution
of this Agreement, the National City Stock Option and the Company Stock Option,
(ii) the Merger and (iii) the transactions contemplated hereby and thereby from,
(x) any statute of the State of Michigan that purports to limit or restrict
business combinations or the ability to acquire or to vote shares, (y) the
Company Rights Agreement dated as of July 18, 1990 by and between First of
America Bank Corporation and First of America Bank - Michigan, NA as rights
agent and (z) any applicable provision of the Company's restated articles of
incorporation containing change of control or anti-takeover provisions. The
Company has (A) duly entered into an appropriate amendment to the Company Rights
Agreement and (B) taken all other action necessary or appropriate so that the
execution of this Agreement, and the consummation of the transactions
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contemplated hereby (including, without limitation, the Merger) do not and will
not result in the ability of any person to exercise any rights under the Company
Rights Agreement or enable or require the rights to separate from the shares of
the Company Common Stock to which they are attached or to be triggered or become
exercisable.
4.18 VOTE REQUIRED. The affirmative votes of a majority of the
outstanding shares of Company Common Stock entitled to vote thereon are the only
votes of the holders of any class or series of Company capital stock necessary
to approve this Agreement and the transactions contemplated by the Agreement.
4.19 MATERIAL INTERESTS OF CERTAIN PERSONS. Except as disclosed in
Company's Proxy Statement for its 1997 Annual Meeting of Shareholders or as set
forth in the Company Disclosure Letter, no officer or director of Company, or
any "associate" (as such term is defined in Rule 14a-1 under the 0000 Xxx) of
any such officer or director, has any material interest in any material
contracts or property (real or personal), tangible or intangible, used in or
pertaining to the business of Company or any Company Subsidiaries.
4.20 ENVIRONMENTAL MATTERS. (i) To the best of Company's knowledge,
neither Company nor any of its subsidiaries is in violation of or has any
liability, absolute or contingent, in connection with or under any Environmental
Law, except any such violations or liabilities which would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect;
(ii) to the best of Company's knowledge, none of the Loan Portfolio Properties,
Trust Properties and Other Properties of Company or its subsidiaries is in
violation of or has any liability, absolute or contingent, under any
Environmental Law, except any such violations or liabilities which, individually
or in the aggregate would not have a Material Adverse Effect; and (iii) to the
best of Company's knowledge, there are no actions, suits, demands, notices,
claims, investigations or proceedings pending or threatened relating to any Loan
Portfolio Properties, Trust Properties and Other Properties including, without
limitation any notices, demand letters or requests for information from any
federal or state environmental agency relating to any such liability under or
violation of Environmental Law, which would impose a liability upon Company or
its subsidiaries pursuant to any Environmental Law, except such as would not,
individually or in the aggregate have a Material Adverse Effect.
V. COVENANTS
5.1 ACQUISITION PROPOSALS. Each of Company and Company Subsidiaries
shall not, directly or indirectly, and shall instruct and otherwise use its best
efforts to cause their respective officers, directors, employees, agents or
advisors or other representatives or consultants not to, directly or indirectly,
(i) solicit or initiate any proposals or offers from any person relating to any
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acquisition or purchase of all or a material amount of the assets of, or any
securities of, or any merger, consolidation or business combination with,
Company or any of Company Subsidiaries (such transactions are referred to herein
as "Acquisition Transactions") or (ii) except to the extent that the Board is
required, in a written opinion of counsel to the Board, in the exercise of its
fiduciary duties in accordance with applicable law, to participate in any
discussions or negotiation regarding, or furnish to any other person any
information with respect to, an Acquisition Transaction; PROVIDED, HOWEVER, that
nothing contained in this Section 5.1 shall restrict or prohibit any disclosure
by Company that is required in any document to be filed with the Commission
after the date of this Agreement or any disclosure that, in the written opinion
of counsel to the Board of Directors of the Company, is otherwise required under
applicable law. Company will immediately cease and cause to be terminated any
existing activities, discussions or negotiations with any parties conducted
heretofore with respect to any of the foregoing. Company will notify National
City immediately if any such inquiries or proposals are received by, any such
information is requested from, or any such negotiations or discussions are
sought to be initiated or continued with Company.
5.2 INTERIM OPERATIONS OF COMPANY. During the period from the date of
this Agreement to the Effective Time, except as specifically contemplated by
this Agreement, set forth in the Company Disclosure Letter or as otherwise
approved expressly in writing by National City (which approval will not be
unreasonably withheld or delayed):
(a) CONDUCT OF BUSINESS. Company shall, and shall cause each of
Company Subsidiaries to, conduct their respective businesses only in,
and not take any action except in, the ordinary course of business
consistent with past practice. Company shall use reasonable efforts to
preserve intact the business organization of Company and each of
Company Subsidiaries, to keep available the services of its and their
present key officers and employees and to preserve the goodwill of
those having business relationships with Company or Company
Subsidiaries. Other than in the ordinary course of business consistent
with past practice, Company shall not (i) incur any indebtedness for
borrowed money (it being understood and agreed that incurrence of
indebtedness in the ordinary course of business shall include, without
limitation, the creation of deposit liabilities, purchases of federal
funds, borrowings pursuant to existing lines of credit, sales of
certificates of deposit and entering into repurchase agreements), (ii)
assume, guarantee, endorse or otherwise as an accommodation become
responsible for the obligations of any other individual, corporation or
other entity, or (iii) make any loan or advance other than in the
ordinary course of business consistent with past practice;
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(b) ARTICLES AND BYLAWS. Company shall not and shall not
permit any Company Subsidiary to make any change or amendment to their
respective articles of incorporation or Bylaws (or comparable governing
instruments) in a manner that would materially and adversely effect
either party's ability to consummate the Merger or the economic
benefits of the Merger to either party.
(c) CAPITAL STOCK. Company shall not, and shall not permit any
Company Subsidiary to, issue or sell any shares of capital stock or any
other securities of any of them (other than pursuant to outstanding
exercisable stock options granted pursuant to one of the Company Option
Plans, pursuant to the Director Option Plan or the Company's
Shareholders Investment Plan) or issue any securities convertible into
or exchangeable for, or options, warrants to purchase, scrip, rights to
subscribe for, calls or commitments of any character whatsoever
relating to, or enter into any contract, understanding or arrangement
with respect to the issuance of, any shares of capital stock or any
other securities of any of them (other than pursuant to the Company
Option Plans or the Company's dividend reinvestment plan) or enter into
any arrangement or contract with respect to the purchase or voting of
shares of their capital stock, or adjust, split, combine or reclassify
any of their capital stock or other securities or make any other
changes in their capital structures. Neither Company nor any Company
Subsidiaries shall grant any additional stock options, except for stock
option grants made in accordance with existing elections by
participants in the Director Option Plan under any Company Option
Plans.
(d) DIVIDENDS. Company shall not and shall not permit any
Company Subsidiary to, declare, set aside, pay or make any dividend or
other distribution or payment (whether in cash, stock or property) with
respect to, or purchase or redeem, any shares of the capital stock of
any of them other than (a) regular quarterly cash dividends in an
amount not to exceed $.35 per share of Company Common Stock payable on
the regular historical payment dates and (b) dividends paid by any
Company Subsidiary to Company or another Company Subsidiary with
respect to its capital stock between the date hereof and the Effective
Time. It is agreed by the parties hereto that they will cooperate to
assure that, during any quarter, there shall not be a duplication of
nor omission of payment of dividends to shareholders of Company.
(e) EMPLOYEE PLANS, COMPENSATION, ETC. Except as otherwise
provided in this Agreement, Company shall not, and shall not permit any
Company Subsidiary to, adopt or amend (except as required by law or
other contractual obligations existing on the date hereof) any bonus,
profit sharing, compensation, severance, termination, stock option,
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pension, retirement, deferred compensation, employment or other
employee benefit agreements, trusts, plans, funds or other arrangements
for the benefit or welfare of any director, officer or employee, or
(except for normal merit increases in the ordinary course of business
consistent with past practice) increase the compensation or fringe
benefits of any director, officer or employee or pay any benefit not
required by any existing plan, agreement or arrangement (including,
without limitation, the granting of stock options or stock appreciation
rights) or take any action or grant any benefit not required under the
terms of any existing agreements, trusts, plans, funds or other such
arrangements or enter into any contract, agreement, commitment or
arrangement to do any of the foregoing. Notwithstanding the foregoing,
the Company may amend the Company's Employees' Health Care Plan to
adopt the amendments to the plan previously approved by Company's
management and communicated to Company's employees.
(f) CERTAIN POLICIES. Company will modify and change its loan,
litigation, real estate valuation asset, liquidity and investment
portfolio policies and practices (including loan classifications and
level of reserves) prior to the Effective Time so as to be consistent
on a mutually satisfactory basis with those of National City and
generally accepted accounting principles, at the earlier of (i) such
time as National City acknowledges that all conditions to its
obligations to consummate the Merger set forth in Sections 7.1 and 7.3
have been waived or satisfied or (ii) immediately prior to the
Effective Time. Company's representations, warranties or covenants
contained in this Agreement shall not be deemed to be untrue or
breached in any respect for any purpose as a consequence of any such
modifications or changes.
5.3 INTERIM OPERATIONS OF NATIONAL CITY. During the period from the
date of this Agreement to the Effective Time, without the prior written consent
of Company, National City will not declare or pay any extraordinary or special
dividend on the National City Common Stock or take any action that would (a)
materially delay or adversely affect the ability of National City to obtain any
approvals of Governmental Authorities required to permit consummation of the
Merger or (b) materially adversely affect its ability to perform its obligations
under this Agreement or to consummate the transaction contemplated hereby.
5.4 EMPLOYEE MATTERS.
(a) BENEFIT AGREEMENTS. Surviving Corporation and National
City shall honor, maintain and perform on and after the Effective Time,
without deduction, counterclaims, interruptions or deferment (other
than withholding under applicable law), all vested benefits of any
person under all plans or agreements.
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(b) RETIREMENT AND BENEFIT PLANS. For purposes of all employee
benefit plans, programs or arrangements maintained or contributed to by
National City or Surviving Corporation National City shall credit or
shall cause Surviving Corporation to credit employees of Company and
Company Subsidiaries who become employees of National City or Surviving
Corporation as a result of the Merger with all service with Company or
any Company Subsidiaries for purposes of eligibility and vesting as if
such service, and compensation from, had been performed for National
City but not for purposes of benefit accrual, provided, however, that
this provision shall not change the treatment under the National City
Non-Contributory Retirement Plan and Trust of service with National
City or any of National City's subsidiaries prior to the Closing Date.
From and after the Effective Time, National City shall, or shall cause
Surviving Corporation to, cause any and all pre-existing condition
limitations under any health plans to be waived with respect to Company
Employees and their eligible dependents to the extent that such
conditions were covered by Company's health plans. To the extent that
any Company Employees and their eligible dependents have, before the
Effective Time, satisfied in whole or in part any annual deductible or
paid any out of pocket or co-payment expenses under the applicable plan
of the Company, such individual shall be credited therefor under the
corresponding plan of National City or Surviving Corporation in which
such individual participates after the Effective Time.
(c) TRANSITION. Upon and after the Merger, Company Employees
shall have benefits that in the aggregate are no less favorable than
the benefits enjoyed generally by National City employees working in
similar business lines.
(d) GENERAL. Notwithstanding anything to the contrary
contained in this Agreement, Company and National City shall take all
actions necessary to enact the items set forth on Schedule 5.4 of the
Company Disclosure Letter, and Schedule 5.4 of the Company Disclosure
Letter shall be deemed incorporated into this Section 5.4(d)
5.5 ACCESS AND INFORMATION. Upon reasonable notice, each of the parties
shall (and shall cause each of the parties' subsidiaries to) afford to the other
parties and their representatives (including, without limitation, directors,
officers and employees of the parties and their affiliates, and counsel,
accountants and other professionals retained) such access during normal business
hours throughout the period prior to the Effective Time to the books, records
(including, without limitation, tax returns and work papers of independent
auditors), properties, personnel and to such other information as any party may
reasonably request; PROVIDED, HOWEVER, that no party shall be required to
provide access to any such information if the providing of such access (i) would
be reasonably likely, in the written opinion of counsel, to result in the loss
or impairment
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of any privilege generally recognized under law with respect to such information
or (ii) would be precluded by any law, ordinance, regulation, judgment, order,
decree, license or permit of any Governmental Entity. All information furnished
by one party to any of the others in connection with this Agreement or the
transactions contemplated hereby shall be kept confidential by such other party
(and shall be used by it only in connection with this Agreement and the
transactions contemplated hereby) except to the extent that such information (i)
already is known to such other party when received from a source not known by
the receiving party to be under an obligation of confidentiality, (ii)
thereafter becomes lawfully obtainable from other sources or (iii) is required
to be disclosed in any non-confidential document filed with the Commission, the
FRB, the Department of Justice or any other agency or any government. In the
event that the transactions contemplated by this Agreement shall fail to
consummate, each party shall promptly cause all copies of documents or extracts
thereof containing information and data as to another party hereto to be
returned to the party which furnished the same or destroyed.
5.6 CERTAIN FILINGS, CONSENTS AND ARRANGEMENTS. National City and
Company shall (a) as soon as practicable make any required filings and
applications required to be filed with Governmental Authorities between the date
of this Agreement and the Effective Time, (b) cooperate with one another (i) in
promptly determining whether any other filings are required to be made or
consents, approvals, permits or authorizations are required to be obtained under
any other relevant federal, state or foreign law or regulation and (ii) in
promptly making any such filings, furnishing information required in connection
therewith and seeking timely to obtain any such consents, approvals, permits or
authorizations and (c) deliver to the other parties to this Agreement copies of
the publicly available portions of all such reports promptly after they are
filed.
5.7 STATE TAKEOVER STATUTES. Company shall take all reasonable steps to
(i) exempt Company and the Merger from the requirements of any state takeover
law by action of the Company's Board of Directors or otherwise and (ii), upon
the request of National City, assist in any challenge by National City to the
applicability to the Merger of any state takeover law.
5.8 INDEMNIFICATION AND INSURANCE.
(a) Indemnification. From and after the Effective Time,
National City will assume and honor any obligation as provided for and
permitted by applicable federal and state law Company had immediately
prior to the Effective Time with respect to the indemnification of each
person who is now, or has been at any time prior to the date hereof or
who becomes prior to the Effective Time, a director or officer of
Company or any Company Subsidiary or was serving at the request of
Company as a director, officer of any domestic or foreign corporation
joint venture, trust, employee benefit plan or other
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enterprise (collectively, the "Indemnitees") arising out of Company's
Articles of Incorporation or Bylaws or any indemnification (to the
maximum extent available thereunder and permitted by applicable law or
regulation) against any and all Losses in connection with or arising
out of any claim which is based upon, arises out of or in any way
relates to any actual or alleged act or omission occurring at or prior
to the Effective Time, including any actions taken to approve and
implement this Agreement and the transactions contemplated hereby, in
the Indemnitee's capacity as a director or officer (whether elected or
appointed), of Company or any Company Subsidiary. This Section 5.8 will
be construed as an agreement, as to which the Indemnitees are intended
to be third-party beneficiaries.
(b) INSURANCE. For a period of six years after the Effective
Time, National City shall use all reasonable efforts to maintain in
effect current directors' and officers' liability insurance in an
aggregate limit at least equal to the aggregate limit of Company's
insurance that is in place on the date of this Agreement, which will
insure Company's directors and officers for events which occurred prior
to the Effective Time but were undiscovered at the Effective Time
provided, however, that in no event shall National City be obligated to
expend, in order to maintain or provide insurance coverage pursuant to
this Subsection 5.8(b), any amount per annum in excess of 200% of the
amount of the annual premium paid as of the date hereof by National
City for its current director's and officers' liability insurance.
5.9 ADDITIONAL AGREEMENTS. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its reasonable efforts to
take promptly, or cause to be taken promptly, all actions and to do promptly, or
cause to be done promptly, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, including using its
best efforts to obtain all necessary actions or non-actions, extensions,
waivers, consents and approvals from all applicable Governmental Entities,
effecting all necessary registrations, applications and filings (including,
without limitation, filings under any applicable state securities laws) and
obtaining any required contractual consents and regulatory approvals.
5.10 PUBLICITY. The initial press release announcing this Agreement
shall be a joint press release and thereafter Company and National City shall
consult with each other in issuing any press releases or otherwise making public
statements with respect to the transactions contemplated hereby and in making
any filings with any Governmental Entity or with any national securities
exchange with respect thereto.
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5.11 REGISTRATION STATEMENT. National City shall prepare and file the
Registration Statement with the Commission as soon as is reasonably practicable
following receipt of final comments from the Staff of the Commission on the
Proxy Statement (or advice that such Staff will not review such filing) and
shall use all reasonable efforts to have the Registration Statement declared
effective by the Commission as promptly as practicable and to maintain the
effectiveness of such Registration Statement. National City shall also take any
action required to be taken under state blue sky or securities laws in
connection with the issuance of the National City Common Stock pursuant to the
Merger, and Company shall furnish National City all information concerning
Company and the holders of its capital stock and shall take any action as
National City may reasonably request in connection with any such action.
5.12 SECURITIES ACT; POOLING-OF-INTERESTS.
(a) Prior to the Effective Time, Company shall identify to
National City all persons who were, at the time of the Company Meeting
(as herein later defined), possible "affiliates" of Company as that
term is used in paragraphs (c) and (d) of Rule 145 under the Securities
Act (at the minimum, all those persons subject to the reporting
requirements of Rule 16(a) under the Exchange Act) and for purposes of
qualifying for "pooling-of-interests" accounting treatment (the
"Affiliates").
(b) Company shall use its best efforts to obtain a written
agreement from each person who is identified as a possible Affiliate
pursuant to clause (a) above providing that such person will not sell,
pledge, transfer or otherwise dispose of any shares of Company Common
Stock held by such "affiliate" and the Merger Consideration to be
received by such "affiliate" in the Merger: (1) in the case of shares
of National City Common Stock only, except in compliance with the
applicable provisions of the Securities Act and the rules and
regulations thereunder; and (2) during the periods during which any
such sale, pledge, transfer or other disposition would, under generally
accepted accounting principles or the rules, regulations or
interpretations of the Commission, disqualify the Merger for
"pooling-of-interests" accounting treatment. The parties understand
that such periods in general encompass the period commencing thirty
(30) days prior to the Merger and ending at the time of the publication
of financial results covering at least 30 days of combined operations
of National City and Company within the meaning of Section 201.01 of
the Commission's Codification of Financial Reporting Policies. National
City shall file such financial results within 90 days of the Effective
Time. Company shall deliver such written agreements to National City at
or prior to the Effective Time.
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5.13 STOCK EXCHANGE LISTINGS. National City shall use its best efforts
to list on the New York Stock Exchange, upon official notice of issuance, the
National City Common Stock to be issued pursuant to the Merger.
5.14 PROXY. As soon as practicable after the date hereof, Company and
National City shall prepare the Proxy Statement, file it with the Commission,
respond to comments of the Staff of the Commission, clear the Proxy Statement
with the Staff of the Commission and promptly thereafter mail the Proxy
Statement to all holders of shares of Company Common Stock and National City
Common Stock. National City and Company shall cooperate with each other in the
preparation of the Proxy Statement.
5.15 SHAREHOLDERS' AND STOCKHOLDERS' MEETINGS.
(a) Company shall take all action necessary, in accordance with
applicable law and its Articles of Incorporation and Bylaws, to convene
a special meeting of the holders of Company Common Stock (the "Company
Meeting") as promptly as practicable for the purpose of considering and
taking action upon this Agreement. Unless the Board of Directors of
Company shall have received the written advice of counsel, reasonably
acceptable to National City, to the effect that making such a
recommendation would cause the Board of Directors of Company to violate
its fiduciary duty under applicable law and provided that such advice
is not predicated solely upon the price of National City Common Stock,
the Board of Directors of Company shall recommend that the holders of
the Company Common Stock vote in favor of and approve the Merger and
adopt this Agreement at the Company Meeting.
(b) National City shall take all action necessary, in
accordance with applicable law and its certificate of incorporation and
By-laws, to convene a meeting of the holders of National City Common
Stock (the "National City Meeting") for the purpose of considering and
taking action upon this Agreement. The Board of Directors of National
City shall recommend that holders of National City Common Stock vote in
favor of and approve the Merger and adopt this Agreement at the
National City Meeting.
5.16 POOLING-OF-INTERESTS AND TAX-FREE REORGANIZATION TREATMENT.
Neither National City nor Company shall intentionally take or cause to be taken
any action, whether before or after the Effective Time, which would disqualify
the Merger as a "pooling of interests" for accounting purposes or as a
"reorganization" within the meaning of Section 368 of the Code.
5.17 PROVISION OF SHARES. National City shall issue and provide the
shares of National City Common Stock deliverable upon the conversion of the
Company Common Stock pursuant to this Agreement, and will provide the cash to be
paid in lieu of fractional shares of National City Common Stock as provided in
Subsection 2.3(f). The shares of National City Common
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Stock to be issued and exchanged for shares of Company Common Stock pursuant to
this Agreement will, at the Effective Time, be duly authorized, validly issued,
fully paid and nonassessable and subject to no preemptive rights.
5.18 ADVERSE ACTION. From the date hereof until the Effective Time,
except as expressly contemplated by the Agreement neither party will, without
the written consent of the other party (which consent will not be unreasonably
withheld or delayed) knowingly take any action that would, or would be
reasonably likely to result in (a) any of its representations and warranties set
forth in the Agreement being or becoming untrue in any material respect, (b) any
of the conditions to the Merger set forth in Article VII not being satisfied or
(c) a material violation of any provision of the Agreement except, in each case,
as may be required by applicable law.
VI. CLOSING MATTERS
6.1 THE CLOSING. Subject to satisfaction or waiver of all conditions
precedent set forth in Article VII of this Agreement, the closing ("Closing") at
such location mutually agreeable to the parties and on a date ("Closing Date")
which is on (1) the third business day after the later of:
(a) the first date on which the Merger may be consummated in
accordance with the approvals of any Governmental Entities or
(b) the date the required approvals of Company's shareholders
and National City's stockholders have been obtained or
(2) such other date to which the parties agree in writing.
If all conditions are determined to be satisfied in all material respects (or
are duly waived) at the Closing, the Closing shall be consummated by the making
of all necessary filing required by all Governmental Entities.
6.2 DOCUMENTS AND CERTIFICATES. National City and Company shall use
their respective best efforts, on or prior to Closing, to execute and deliver
all such instruments, documents or certificates as may be necessary or
advisable, on the advice of counsel, for the consummation at the Closing of the
transactions contemplated by this Agreement to occur as soon as practicable.
VII. CONDITIONS
7.1 CONDITIONS TO EACH PARTY'S OBLIGATIONS TO EFFECT THE MERGER. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of the following conditions:
(a) The Merger shall have been approved and adopted by the
requisite vote of the holders of Company Common Stock and by the
requisite vote of the holders of National City Common Stock.
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(b) The National City Common Stock issuable in the Merger
shall have been authorized for listing on the New York Stock Exchange,
upon official notice of issuance.
(c) All authorizations, consents, orders or approvals of, and
all expirations of waiting periods imposed by, any Governmental Entity
(collectively, "Consents") which are necessary for the consummation of
the Merger, (other than immaterial Consents, the failure to obtain
which would not be materially adverse to the combined businesses of
National City, Company, National City's subsidiaries and Company
Subsidiaries taken as a whole) shall have been obtained or shall have
occurred and shall be in full force and effect at the Effective Time.
(d) The Registration Statement shall have become effective in
accordance with the provisions of the Securities Act. No stop order
suspending the effectiveness of the Registration Statement shall have
been issued by the Commission and remain in effect.
(e) National City and Company shall have received a letter,
dated the date of the Closing, from Ernst and Young or its successor,
National City's independent accountants, to the effect that, for
financial reporting purposes, the Merger qualifies for
pooling-of-interests accounting treatment under generally accepted
accounting principles if consummated in accordance with this Agreement.
(f) No temporary restraining order, preliminary or permanent
injunction or other order by any federal or state court in the United
States which prevents the consummation of the Merger shall have been
issued and remain in effect.
(g) Wachtell, Lipton, Xxxxx & Xxxx counsel to Company, shall
have delivered to Company and National City their opinion, dated the
day of the Effective Time, substantially to the effect that, on the
basis of facts, representations and assumptions set forth in such
opinion which are consistent with the state of facts existing at the
Effective Time, the Merger will be treated for federal income tax
purposes as a reorganization within the meaning of Section 368(a) of
the Code and that, accordingly: (i) no gain or loss will be recognized
by National City or Company as a result of the Merger; (ii) no gain or
loss will be recognized by the shareholders of Company who exchange
their shares of the Company Common Stock solely for shares of National
City Common Stock pursuant to the Merger (except with respect to cash
received in lieu of a fractional share interest in National City Common
Stock); (iii) the tax basis of the shares of National City Common Stock
received by shareholders who exchange all of their shares of Company
Common Stock solely for shares of National City Common Stock in the
Merger will be the same as the tax basis of the shares of Company
Common Stock surrendered in exchange therefor (reduced by any amount
allocable to a fractional share interest for
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which cash is received); and (iv) the holding period of the shares of
National City Common Stock received in the Merger will include the
period during which the shares of Company Common Stock surrendered in
exchange therefor were held, provided such shares of Company Common
Stock were held as capital assets at the Effective Time. In rendering
such opinion, counsel may require and rely upon representations
contained in certificates of officers of Company, National City, and
others.
7.2 CONDITIONS TO OBLIGATION OF COMPANY TO EFFECT THE MERGER. The
obligation of Company to effect the Merger shall be subject to the fulfillment
or waiver at or prior to the Effective Time of the additional following
conditions:
(a) National City shall have performed in all material
respects its covenants contained in this Agreement required to be
performed at or prior to the Effective Time.
(b) The representations and warranties of National City
contained in this Agreement shall be true and correct when made and the
representations and warranties set forth in Article 3 shall be true and
correct as of the Effective Time as if made at and as of such time,
except as expressly contemplated or permitted by this Agreement, except
for representations and warranties relating to a time or times other
than the Effective Time which were or will be true and correct at such
time or times and except where the failure or failures of such
representations and warranties to be so true and correct, individually
or in the aggregate, does not result or would not result in a Material
Adverse Effect.
(c) National City shall have furnished Company a Certificate
dated the date of the Closing, signed by the Chief Executive Officer
and Chief Financial Officer of National City that, to the best of their
knowledge and belief after due inquiry, the conditions set forth in
Subsections 7.2(a) and 7.2(b) have been satisfied.
7.3 CONDITIONS TO OBLIGATION OF NATIONAL CITY TO EFFECT THE MERGER. The
obligation of National City to effect the Merger shall be subject to the
fulfillment or waiver at or prior to the Effective Time of the additional
following conditions:
(a) Company shall have performed in all material respects its
covenants contained in this Agreement required to be performed at or
prior to the Effective Time.
(b) The representations and warranties of Company contained in
this Agreement shall be true and correct when made and the
representations and warranties set forth in Article 4 shall be true and
correct as of the Effective Time as if made on and as of such time,
except as expressly contemplated or permitted by this Agreement, except
for representations and warranties relating to a time or times other
than the Effective Time which were or will be true and correct at such
time or times and except where the failure
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or failures of such representations and warranties to be so true and
correct, individually or in the aggregate, does not result or would not
result in a Material Adverse Effect.
(c) Company shall have furnished National City a Certificate
dated the date of the Closing signed by the Chief Executive Officer and
Chief Financial Officer of Company that, to the best of their knowledge
and belief after due inquiry, the conditions set forth in subsections
7.3(a) and 7.3(b) have been satisfied.
VIII. MISCELLANEOUS
8.1 TERMINATION. This Agreement may be terminated at any time prior to
the Effective Time, whether before or after approval by the shareholders of
Company and/or the stockholders of National City:
(a) by mutual consent of the Board of Directors of National
City and the Board of Directors of Company;
(b) by either National City or Company if the Merger shall not
have been consummated on or before June 30, 1998 or if this Agreement
was not approved at either the Company Meeting or the National City
Meeting (provided the terminating party is not otherwise in material
breach of its obligations under this Agreement);
(c) by Company if any of the conditions specified in Sections
7.1 and 7.2 have not been met or waived by Company at such time as such
condition can no longer be satisfied;
(d) by National City if any of the conditions specified in
Sections 7.1 and 7.3 have not been met or waived by National City at
such time as such condition can no longer be satisfied;
(e) by Company, during the 15-day period commencing on the Fed
Approval Date, if both of the following conditions are satisfactory:
(i) the average of the daily closing prices on the New
York Stock Exchange of a share of National City Common Stock for the
20 consecutive trading days ending at the end of the third trading
day immediately preceding the Fed Approval is less than $53.375; and
(ii) the number obtained by dividing the average of the
daily closing prices on the New York Stock Exchange of a share of
National City Common Stock for the 20 consecutive trading days ending
at the end of the third trading day immediately preceding the Fed
Approval Date by the closing price of National City Common Stock on the
trading day immediately preceding the public announcement of this
Agreement is less than the number obtained by dividing the Final Index
Price (as defined below) by the
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Initial Index Price (as defined below) and subtracting .20 from the
quotient.
For purposes of this Subsection 8.1(e):
The "Index Group" shall mean all those companies listed in the
National City Disclosure Letter the common stock of which is publicly
traded and as to which there has not been a publicly announced proposal
at any time for such company to be acquired. In the event that any such
company or companies are so removed from the Index Group, the weights
attributed to the remaining companies shall be adjusted proportionately
for purposes of determining both the Initial Index Price and the Final
Index Price;
The "Initial Index Price" shall mean the weighted average
(weighted in accordance with the factors listed in the National City
Disclosure Letter) of the closing prices on the trading day immediately
preceding the public announcement of this Agreement of the common stock
of the companies comprising the Index Group;
The "Final Price" of any company belonging to the Index Group
shall mean the average of the daily closing sale prices of a share of
the common stock of such company, as reported in the consolidated
transaction reporting system for the market or exchange on which such
common stock is principally traded, during the period of 20 consecutive
trading days ending at the end of the third trading day immediately
preceding the Fed Approval Date; and
The "Final Index Price" shall mean the weighted average
(weighted in accordance with the factors listed in the National City
Disclosure Letter) of the Final Prices for all of the companies
comprising the Index Group.
If National City or any company belonging to the Index Group
declares a stock dividend or effects a reclassification,
recapitalization, split-up, combination, exchange or shares or similar
transaction between the date of this Agreement and the Fed Approval
Date, the closing prices for the common stock of such company shall be
appropriately adjusted for the purposes of the definitions above so as
to be comparable to the price on the date of this Agreement.
8.2 NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. The
representations and warranties or covenants in this Agreement will terminate at
the Effective Time or the earlier termination of this Agreement pursuant to
Section 7.1, as the case may be; provided, however, that if the Merger is
consummated, Sections 1.6, 2.1 through 2.4, 5.4, 5.5, 5.8, 5.17 and 8.2 hereof
will survive the Effective Time to the extent contemplated by such Sections;
provided, further, that the last sentence of Section 5.5 and all of Section 8.10
hereof will in all events survive any termination of this Agreement.
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8.3 WAIVER AND AMENDMENT. Subject to applicable provisions of the DGCL
and MBCA, any provision of this Agreement may be waived at any time by the party
which is, or whose stockholders or shareholders are, entitled to the benefits
thereof, and this Agreement may be amended or supplemented at any time, provided
that no amendment will be made after any stockholder or shareholder approval of
the Merger which reduces or changes the form of the Merger Consideration without
further stockholder or shareholder approval. No such waiver, amendment or
supplement will be effective unless in a writing which makes express reference
to this Section 8.3 and is signed by the party or parties sought to be bound
thereby.
8.4 ENTIRE AGREEMENT. This Agreement together with the Option Agreement
contain the entire agreement among National City and Company with respect to the
Merger and the other transactions contemplated hereby and thereby, and
supersedes all prior agreements among the parties with respect to such matters.
8.5 APPLICABLE LAW; CONSENT TO JURISDICTION. This Agreement will be
governed by and construed in accordance with the laws of the State of Michigan
except to the extent laws of the state of Delaware govern the merger. National
City and Company consent to personal jurisdiction in any action brought in any
federal or state court within the State of Michigan having subject matter
jurisdiction in the matter for purposes of any action arising out of this
Agreement.
8.6 CERTAIN DEFINITIONS; HEADLINES. (a) For purposes of this Agreement,
the term:
(i) "affiliate", "associate" and "significant subsidiary"
shall have the respective meanings ascribed to such terms in Rule
12b-2 of the General Rules and Regulations under the Exchange Act,
as in effect on the date hereof.
(ii) "control" (including the terms "controlled by" and
"under common control with") means the possession, directly or
indirectly or as trustee or executor, of the power to direct or
cause the direction of the management or policies of a person,
whether through the ownership of stock, as trustee or executor, by
contract or credit arrangement or otherwise;
(iii) "Fed Approval Date" means the day the FRB issues an
order approving consummation of the Merger.
(iv) "Market Price" means the average of the per share
closing prices on the New York Stock Exchange of National City
Common Stock for the 20 consecutive trading days ending at the end
of the third trading day immediately preceding the Effective Time.
(v) "Material Adverse Effect" means an event, change or
occurrence which has a material negative impact on the financial
condition, businesses or results of
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operations of Company and its subsidiaries, taken as a whole, or
National City and its subsidiaries, taken as a whole, as the case may
be, or the ability of Company or National City, as the case may be, to
consummate the transactions contemplated hereby. The effect of any
action taken by Company solely pursuant to Subsection 5.2(f) shall not
be taken into consideration in determining whether any Material Adverse
Effect has occurred.
(vi) "person" means an individual, corporation,
partnership, association, trust or unincorporated organization; and
(vii) "subsidiary" of Company, National City or any other
person means, except where the context otherwise requires, any
corporation, partnership, trust or similar association of which
Company, National City or any other person, as the case may be (either
alone or through or together with any other subsidiary), owns, directly
or indirectly, more than 50% of the stock or other equity interests,
the holders of which are generally entitled to vote for the election of
the board of directors or other governing body of such corporation.
(b) The descriptive headings contained in this Agreement are
for convenience and reference only and will not affect in any way the
meaning or interpretation of this Agreement.
(c) Unless the context of this Agreement expressly indicates
otherwise, (i) any singular term in this Agreement will include the
plural and any plural term will include the singular and (ii) the term
section or schedule will mean a section or schedule of or to this
Agreement.
8.7 NOTICES. All notices, consents, requests, demands and other
communications hereunder will be in writing and will be deemed to have been duly
given or delivered if delivered personally, telexed with receipt acknowledged,
mailed by registered or certified mail return receipt requested, sent by
facsimile with confirmation of receipt, or delivered by a recognized commercial
courier addressed as follows:
If to Company to:
First of America Bank Corporation
000 Xxxxx Xxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxxxx
Chairman, President and
Chief Executive Officer
Fax No. (000) 000-0000
With copies to:
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
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Attention: Xxxxxx Xxxxxxx, Esq.
Fax No. (000) 000-0000
and
Xxxxxx & Xxxxxx Attorneys, P.C.
000 X. Xxxxxxxx Xxxxxx
Xxxx 000
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx X. Xxxxxx
Fax No. (000) 000-0000
If to National City to:
National City Corporation
P. O. Xxx 0000
Xxxxxxxxx, Xxxx 00000-0000
Attention: Chairman of the Board
Fax No. (000) 000-0000
With a copy to:
National City Corporation
Law Department
P. O. Xxx 0000
Xxxxxxxxx, Xxxx 00000-0000
Attention: General Counsel
Fax No. (000) 000-0000
or to such other address as any party may have furnished to the other parties in
writing in accordance with this Section 8.7.
8.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original but all of which
together will constitute but one agreement.
8.9 PARTIES IN INTEREST; ASSIGNMENT. Except for Section 2.2, (which is
intended to be for the benefit of the holders of Outstanding Options under the
Company Option Plans to the extent contemplated thereby and their beneficiaries,
and may be enforced by such persons) and Sections 5.4 and 5.8 hereof (which are
intended to be for the benefit of directors, officers or employees to the extent
contemplated thereby and their beneficiaries, and may be enforced by such
persons), this Agreement is not intended to nor will it confer upon any other
person (other than the parties hereto) any rights or remedies. Without the prior
written consent of the other parties to this Agreement neither National City nor
Company shall assign any rights or delegate any obligations under this
Agreement. Any such purported assignment or delegation made without prior
consent of the other parties hereto shall be null and void.
8.10 EXPENSES. Each party will bear all expenses incurred by it in
connection with this Agreement and the transactions contemplated hereby, except
that printing expenses and
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Commission filing and registration fees shall be shared equally between Company
and National City.
8.11 ENFORCEMENT OF THE AGREEMENT. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties hereto will be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
8.12 SEVERABILITY. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement will nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party hereto. Upon any such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto will
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated by this Agreement are consummated to the
extent possible.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized representatives to execute this Agreement as of the date first above
written.
FIRST OF AMERICA BANK CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Xxxxxxx X. Xxxxxxxx
Chairman, President and
Chief Executive Officer
NATIONAL CITY CORPORATION
By: /s/ Xxxxxxx X. XxXxxxxxxx
------------------------------------
Xxxxxxx X. XxXxxxxxxx
Vice Chairman
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