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