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EXHIBIT 2.2
AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
NATIONAL CITY CORPORATION,
AND
FORT ▇▇▇▇▇ NATIONAL CORPORATION
DATED AS OF JANUARY 12, 1998
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TABLE OF CONTENTS
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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 of Surviving Corporation................................. 2
1.6 Additional Actions.............................................................. 2
II. CONVERSION OF SHARES
2.1 Conversion of Shares............................................................ 2
2.2 Assumption of Employee and Director Stock Options............................... 3
2.3 Exchange of Certificates........................................................ 3
(a) Exchange Agent.............................................................. 3
(b) Notice of Exchange.......................................................... 4
(c) Transfer.................................................................... 4
(d) Right to Merger Consideration............................................... 4
(e) Distribution with Respect to Unexchanged Certificates....................... 5
(f) Lost or Destroyed Exchanged Certificates................................... 5
(g) Voting With Respect to Unexchanged Certificates............................. 5
(h) No Fractional Shares........................................................ 5
2.4 Closing of the Company's Transfer Books......................................... 5
2.5 Changes in National City Common Stock........................................... 6
III. REPRESENTATIONS AND WARRANTIES OF NATIONAL CITY
3.1 Corporate Organization.......................................................... 6
3.2 Authority....................................................................... 6
3.3 Capitalization.................................................................. 6
3.4 Subsidiaries.................................................................... 7
3.5 Information in Disclosure Documents, Registration Statement, Etc................ 7
3.6 Consents and Approvals; No Violation............................................ 7
3.7 Reports and Financial Statements................................................ 8
3.8 Taxes........................................................................... 8
3.9 Employee Plans.................................................................. 9
3.10 Material Contracts.............................................................. 10
3.11 Absence of Certain Changes or Events............................................ 10
3.12 Litigation...................................................................... 10
3.13 Compliance with Laws and Orders................................................. 10
3.14 Agreements with Bank Regulators, Etc............................................ 11
3.15 National City Ownership of Stock................................................ 11
3.16 Tax Treatment................................................................... 11
3.17 Fees............................................................................ 11
3.18 National City Action............................................................ 11
3.19 Material Interests of Certain Persons........................................... 11
3.20 Environmental Matters........................................................... 11
IV. REPRESENTATIONS AND WARRANTIES OF COMPANY
4.1 Corporate Organization.......................................................... 13
4.2 Authority....................................................................... 13
4.3 Capitalization.................................................................. 13
4.4 Subsidiaries.................................................................... 14
4.5 Information in Disclosure Documents, Registration Statement, Etc................ 14
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4.6 Consent and Approvals; No Violation............................................. 14
4.7 Reports and Financial Statements................................................ 14
4.8 Taxes........................................................................... 15
4.9 Employee Plans.................................................................. 15
4.10 Material Contracts.............................................................. 16
4.11 Absence of Certain Changes or Events............................................ 17
4.12 Litigation...................................................................... 17
4.13 Compliance with Laws and Orders................................................. 17
4.14 Agreements with Bank Regulators, Etc............................................ 17
4.15 Tax Treatment................................................................... 17
4.16 Fees............................................................................ 18
4.17 Company Action.................................................................. 18
4.18 Vote Required................................................................... 18
4.19 Material Interests of Certain Persons........................................... 18
4.20 Environmental Matters........................................................... 18
V. COVENANTS
5.1 Acquisition Proposals........................................................... 18
5.2 Interim Operations of Company................................................... 19
(a) Conduct of Business......................................................... 19
(b) Articles and By-laws........................................................ 19
(c) Capital Stock............................................................... 19
(d) Dividends................................................................... 19
(e) Employee Plans, Compensation, Etc........................................... 20
(f) Certain Policies........................................................... 20
5.3 Interim Operations of National City............................................. 20
5.4 Employee Matters................................................................ 20
(a) Benefit Agreements.......................................................... 20
(b) Retirement and Benefit Plans................................................ 20
(c) Transition.................................................................. 21
(d) General..................................................................... 21
5.5 Access and Information.......................................................... 21
5.6 Certain Filings, Consents and Arrangements...................................... 21
5.7 State Takeover Statutes......................................................... 21
5.8 Indemnification and Insurance................................................... 21
(a) Indemnification............................................................. 21
(b) Insurance................................................................... 22
5.9 Additional Agreements........................................................... 22
5.10 Publicity....................................................................... 22
5.11 Registration Statement.......................................................... 22
5.12 Stock Exchange Listings......................................................... 22
5.13 Proxy........................................................................... 22
5.14 Shareholders' Meeting........................................................... 23
5.15 Tax-Free Reorganization Treatment............................................... 23
5.16 Provision of Shares............................................................. 23
5.17 Adverse Action.................................................................. 23
VI. CLOSING MATTERS
6.1 The Closing..................................................................... 23
6.2 Documents and Certificates...................................................... 23
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VII. CONDITIONS
7.1 Conditions to Each Party's Obligations to Effect the Merger..................... 24
7.2 Conditions to Obligation of Company to Effect the Merger........................ 25
7.3 Conditions to Obligation of National City to Effect the Merger.................. 25
VIII. MISCELLANEOUS
8.1 Termination..................................................................... 25
8.2 Non-Survival of Representations, Warranties and Agreements...................... 26
8.3 Waiver and Amendment............................................................ 26
8.4 Entire Agreement................................................................ 27
8.5 Applicable Law; Consent to Jurisdiction......................................... 27
8.6 Certain Definitions; Headlines.................................................. 27
8.7 Notices......................................................................... 28
8.8 Counterparts.................................................................... 28
8.9 Parties in Interest; Assignment................................................. 28
8.10 Expenses........................................................................ 29
8.11 Enforcement of the Agreement.................................................... 29
8.12 Severability.................................................................... 29
Signatures................................................................................
Index to Definitions...................................................................... i
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER, dated as of January 12, 1998
("Agreement"), is made by and between National City Corporation, a Delaware
corporation ("National City") and Fort ▇▇▇▇▇ National Corporation , an Indiana
corporation ("Company").
WHEREAS, National City and Company have each determined that it is in the
best interests of their respective stockholders and shareholders for Company to
merge with and into National City upon the terms and subject to the conditions
set forth in this Agreement;
WHEREAS, the respective Boards of Directors of National City and Company
have each approved this Agreement and the consummation of the transactions
contemplated hereby and approved the execution and delivery of this Agreement;
WHEREAS, for Federal income tax purposes, it is intended that the merger
shall qualify as a reorganization under the provisions of Section 368 of the
Internal Revenue Code of 1986, as amended (the "Code"); and
WHEREAS, as a condition to, and contemporaneously with the execution of
this Agreement, the parties are entering into a stock option agreement, with the
Company as issuer and National City as grantee (the "Option Agreement") in the
form attached hereto as Exhibit A (as hereinafter defined); and
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties and agreements contained herein, the parties hereto
hereby agree as follows:
I. THE MERGER
1.1 Merger. Subject to the terms and conditions of this Agreement, at the
Effective Time (as defined in Section 1.3), Company will be merged with and into
National City and the separate corporate existence of the Company will thereupon
cease (the "Merger") in accordance with the applicable provisions of Title 23 of
the Indiana Code ("IC") and the Delaware General Corporation Law ("DGCL").
National City may at any time change the method of effecting the
combination with the Company (including without limitations the provisions of
this Article I) if and to the extent it deems such change to be desirable,
including without limitation to provide for a merger of the Company into a
wholly-owned subsidiary of National City; provided, however, that no such change
shall (A) alter or change the amount or kind of consideration to be issued to
holders of shares of common stock, without par value, of Company ("Company
Common Stock") and holders of shares of 6% Cumulative Convertible Class B
Preferred Stock, Series 1, without par value, of Company ("Company Series 1
Stock"), in each case as provided for in this Agreement, (B) adversely affect
the tax treatment of the Company's stockholders as a result of receiving the
Merger Consideration (as hereinafter defined) or (C) materially impede or delay
consummation of the transactions contemplated by this Agreement.
1.2 Effective Time. As soon as practicable after satisfaction or waiver of
all conditions to the Merger and immediately prior to the Closing which shall
occur at the time set forth in Section 6.1, National City and Company (the
"Constituent Corporations") shall cause a certificate of merger complying with
the requirements of the DGCL (the "Certificate of Merger") and the Certificate
of Designation (as hereinafter defined) to be filed with the Secretary of State
of the State of Delaware and the Plan of Merger complying with the requirements
of the IC to be filed with Secretary of State of the State of Indiana ("Plan of
Merger"). The Merger will become effective at the time the later of the
following to occur: (a) the filing of the Certificate of Merger and (b) the
filing of the Plan of Merger or such later time as shall be specified in such
filings ("Effective Time").
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1.3 Effect of Merger. The Merger will have the effects specified in IC and
DGCL. Without limiting the generality of the foregoing, National City will be
the surviving corporation in the Merger (sometimes hereinafter referred to as
the "Surviving Corporation") and will continue to be governed by the laws of the
State of Delaware, and the separate corporate existence of National City and all
of its rights, privileges, powers and franchises, public as well as private, and
all its debts, liabilities and duties as a corporation organized under the DGCL,
will continue unaffected by the Merger.
1.4 Certificate of Incorporation and By-laws. The Certificate of
Incorporation and By-laws of National City in effect immediately prior to the
Effective Time, which shall be in the form set forth in a disclosure letter
executed by National City and dated and delivered by National City to Company as
of the date hereof ("National City Disclosure Letter"), shall be the Certificate
of Incorporation and By-laws of the Surviving Corporation, until amended in
accordance with applicable law.
1.5 Directors and Officers of Surviving Corporation. The directors and
officers of National City immediately prior to the Effective Time will be the
directors and officers, respectively, of the Surviving Corporation, from and
after the Effective Time, until their successors have been duly elected or
appointed and qualified or until their earlier death, resignation or removal in
accordance with the terms of the Surviving Corporation's Certificate of
Incorporation and By-laws and the DGCL.
1.6 Additional Actions. If, at any time after the Effective Time, the
Surviving Corporation shall consider or be advised that any further deeds,
assignments or assurances in law or any other acts are necessary or desirable to
(i) vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation its right, title or interest in, to or under any of the rights,
properties or assets of Company, or (ii) otherwise carry out the purposes of
this Agreement, Company and its officers and directors shall be deemed to have
granted to the Surviving Corporation an irrevocable power of attorney to execute
and deliver all such deeds, assignments or assurances in law or any other acts
as are necessary or desirable to (i) vest, perfect or confirm, of record or
otherwise, in the Surviving Corporation its right, title or interest in, to or
under any of the rights, properties or assets of Company or (ii) otherwise carry
out the purposes of this Agreement, Company and its officers and directors shall
be deemed to have granted to the Surviving Corporation an irrevocable power of
attorney to execute and deliver all such deeds, assignments or assurances in law
and to all acts necessary or proper to vest, perfect or confirm title to and
possession of such rights, properties or assets in the Surviving Corporation and
otherwise to carry out the purposes of this Agreement, and the officers and
directors of the Surviving Corporation are authorized in the name of Company or
otherwise to take any and all such action.
II. CONVERSION OF SHARES
2.1 Conversion of Shares. Subject to Section 2.3, at the Effective Time,
(a) each then-outstanding share of Company Common Stock not owned by
National City or any direct or indirect wholly-owned subsidiary of National
City (except for any such shares of Company Common Stock held in trust
accounts, managed accounts or in any similar manner as trustee or in a
fiduciary capacity ("Trust Account Common Shares") or acquired in
satisfaction of debts previously contracted ("DPC Common Shares")), other
than those shares of Company Common Stock held in the treasury of the
Company, will be canceled, retired and converted into 0.75 shares of common
stock, par value $4.00 per share, of National City ("National City Common
Stock") ( "Conversion Ratio"). The number of shares of National City Common
Stock that each share of Company Common Stock will be converted into is
sometimes referred to herein as the "Common Merger Consideration";
(b) each then-outstanding share of Company Series 1 Stock not owned by
National City or any direct or indirect wholly owned subsidiary of National
City (except for any such shares of Company Series 1 Stock held in trust
accounts, managed accounts or in any similar manner as trustee or in a
fiduciary capacity ("Trust Account Preferred Shares" and, together with
Trust Account Common Shares, "Trust Account
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Shares") or acquired in satisfaction of debts previously contracted ("DPC
Preferred Shares" and, together with DPC Common shares, "DPC Shares")),
other than those shares of Company Series 1 Stock held in the treasury of
the Company, will be canceled, retired and converted into one share of
preferred stock, without par value, of National City which will be
designated National City's 6% Cumulative Convertible Preferred Stock,
Series 1 ("National City Preferred Stock") and be initially convertible
into 1.51455 shares of National City Common Stock and otherwise have the
designation, preferences and rights set forth in the Form of Certificate of
Designation, Preferences and Rights of National City 6% Cumulative
Convertible Preferred Stock, Series 1 attached hereto as Exhibit B (the
"Certificate of Designation"). The number of shares of National City
Preferred Stock that each share of Company Series 1 Stock will be converted
into is sometimes referred to herein as the "Preferred Merger
Consideration" and, together with the Common Merger Consideration, as the
"Merger Consideration";
(c) each then-outstanding share of Company Common Stock owned by
National City or any direct or indirect wholly-owned subsidiary of National
City (except for any shares that are Trust Account Shares or DPC Shares)
will be canceled and retired;
(d) each share of Company Common Stock issued and held in Company's
treasury will be canceled and retired; and
(e) each share of National City Common Stock issued and outstanding
immediately prior to the Effective Time shall continue to be an issued and
outstanding share of common stock, par value $4.00 per share, of the
Surviving Corporation from and after the Effective Time.
2.2 Assumption of Employee and Director Stock Options. Except as expressly
provided in this Section 2.2, all rights under any stock option granted by
Company or its predecessors pursuant to the Fort ▇▇▇▇▇ National Corporation 1985
Stock Incentive Plan, the Fort ▇▇▇▇▇ National Corporation 1994 Stock Incentive
Plan and the Fort ▇▇▇▇▇ National Corporation 1994 Nonemployee Director Stock
Incentive Plan (the "Company Option Plans") that remain outstanding and
unexercised, whether vested or unvested, immediately prior to the Effective Time
("Unexercised Options") shall cease to represent a right to acquire shares of
Company Common Stock and shall be converted into the right to acquire that
number of shares of National City Common Stock equal to (a) the number of shares
of Company Common Stock subject to the Unexercised Option, multiplied by (b) the
Conversion Ratio (rounded to the nearest whole share). The exercise price per
share of National City Common Stock under the new option shall be equal to the
exercise price per share of the Company Common Stock which was purchasable under
each Unexercised Option divided by the Conversion Ratio (rounded to the nearest
whole cent) necessary to assure that the rights and benefits of the optionee
under such option shall not be increased or decreased by reason of this Section
2.2, and, in addition, each option which is an "incentive stock option" as
defined in Section 422 of the Code shall be adjusted as required by section 424
of the Code and the regulations promulgated thereunder so as not to constitute a
modification, extension or renewal of the option within the meaning of section
424(h) of the Code. On or before the Effective Time, National City shall file,
and maintain the effectiveness of, a registration statement with the Securities
and Exchange Commission covering such options and the sale of the National City
Common Stock issued upon exercise of such options. At the Effective Time the
Company Option Plans shall be terminated with respect to the granting of any
additional options or option rights. The duration and other terms and conditions
of the new options shall be the same as the original Company options, except
that reference to Company shall be deemed to be references to National City.
2.3 Exchange of Certificates.
(a) EXCHANGE AGENT. Prior to the Effective Time, National City shall
designate National City Bank to act as exchange agent (the "Exchange
Agent") and Fort ▇▇▇▇▇ National Bank to act as forwarding agent in
connection with the Merger pursuant to an exchange agent agreement
providing for, among other things, the matters set forth in this Section
2.3. Except as set forth herein, from and after the Effective Time each
holder of a certificate that immediately prior to the Effective Time
represented outstanding shares of
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Company Common Stock ("Common Certificate") shall be entitled to receive in
exchange therefor, upon surrender thereof to the Exchange Agent, the Common
Merger Consideration for each share of Company Common Stock so represented
by the Certificate surrendered by such holder thereof. The certificates
representing shares of National City Common Stock which constitute the
Common Merger Consideration shall be properly issued and countersigned and
executed and authenticated, as appropriate. Except as set forth herein,
from and after the Effective Time each holder of a certificate that
immediately prior to the Effective Time represented outstanding shares of
Company Series 1 Stock ("Preferred Certificate" and, together with the
Common Certificates, "Certificates") shall be entitled to receive in
exchange therefor, upon surrender thereof to the Exchange Agent, the
Preferred Merger Consideration for each share of Company Series 1 Stock so
represented by the Certificate surrendered by such holder thereof. The
certificates representing shares of National City Preferred Stock which
constitute the Preferred Merger Consideration shall be properly issued and
countersigned and executed and authenticated, as appropriate.
(b) NOTICE OF EXCHANGE. Promptly after the Effective Time, National
City and the Surviving Corporation shall cause the Exchange Agent to mail
and/or make available to each record holder of a Certificate a notice and
letter of transmittal (which shall specify that delivery shall be effected,
and risk of loss and title to the Certificate shall pass, only upon proper
delivery of the Certificate to the Exchange Agent or its forwarding agent)
advising such holder of the effectiveness of the Merger and the procedures
to be used in effecting the surrender of the Certificate for exchange
therefor. Upon surrender to the Exchange Agent of a Certificate, together
with such letter of transmittal duly executed and completed in accordance
with the instructions thereon, and such other documents as may reasonably
be requested, the Exchange Agent shall promptly deliver to the person
entitled thereto the appropriate Merger Consideration for each share of
Company Common Stock or Company Series 1 Stock, as the case may be, 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.
(d) RIGHT TO MERGER CONSIDERATION. Subject to Subsection 2.3(e),
until surrendered and exchanged in accordance with this Section 2.3, each
Certificate shall, after the Effective Time, represent solely the right to
receive the appropriate Merger Consideration, multiplied by the number of
shares of Company Common Stock or Company Series 1 Stock, as the case may
be, evidenced by such Certificate, together with any dividends or other
distributions as provided in Sections 2.3(e) and 2.3(f), and shall have no
other rights. From and after the Effective Time, National City and
Surviving Corporation shall be entitled to treat such Certificates that
have not yet been surrendered for exchange as evidencing the ownership of
the aggregate Merger Consideration into which the shares of Company Common
Stock or Company Series 1 Stock, as the case may be, 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 National City Preferred Stock and
funds (including any interest received with respect thereto) which National
City has made available to the Exchange Agent and which have not been
disbursed to holders of Certificates, and thereafter such holders shall be
entitled to look to the Surviving Corporation (subject to abandoned
property, escheat or other similar laws) with respect to the shares of
National City Common Stock (and cash in lieu of fractional shares) and
shares of National City Preferred Stock deliverable or payable upon due
surrender of their Certificates. Neither Exchange Agent nor any party
hereto shall be liable to any holder of
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shares of Company Common Stock or Company Series 1 Stock, as the case may
be, for any Merger Consideration (or dividends, distributions or interest
with respect thereto) delivered to a public official pursuant to any
applicable abandoned property, escheat or similar law.
(e) DISTRIBUTION WITH RESPECT TO UNEXCHANGED CERTIFICATES. Whenever a
dividend or other distribution is declared by National City on the National
City Common Stock, the record date for which is at or after the Effective
Time, the declaration shall include dividends or other distributions on all
shares issuable pursuant to this Agreement, provided that no dividends or
other distributions declared or made with respect to National City Common
Stock shall be paid to the holder of any unsurrendered Certificate with
respect to the share of National City Common Stock represented thereby
until the holder of such Certificate shall surrender such Certificate in
accordance with this Article II. The Surviving Corporation shall pay any
dividends or make any other distributions with a record date prior to the
Effective Time which may have been declared or made by the Company on
Company Common Stock or on Company Series 1 Stock in accordance with the
terms of this Agreement on or prior to the Effective Time and which remain
unpaid at the Effective Time.
(f) LOST OR DESTROYED EXCHANGED CERTIFICATES. In the event that any
Certificate shall have been lost, stolen or destroyed, the Exchange Agent
shall deliver in exchange for such lost, stolen or destroyed certificate,
upon the making of an affidavit of that fact by the holder thereof in form
satisfactory to the Exchange Agent, the Merger Consideration, as may be
required pursuant to this Agreement; provided, however, that the Exchange
Agent may, in its sole discretion and as a condition precedent to the
delivery of the Merger Consideration to which the holder of such
certificate is entitled as a result of the Merger, require the owner of
such lost, stolen or destroyed certificate to deliver a bond in such sum as
it may direct as indemnity against any claim that may be made against
Company, National City or the Exchange Agent or any other party with
respect to the certificate alleged to have been lost, stolen or destroyed.
(g) VOTING WITH RESPECT TO UNEXCHANGED CERTIFICATES. Holders of
unsurrendered Certificates will not be entitled to vote at any meeting of
National City stockholders.
(h) NO FRACTIONAL SHARES. No certificates or scrip representing
fractional shares of National City Common Stock shall be issued upon the
surrender for exchange of a Certificate or Certificates. No dividends or
distributions of National City shall be payable on or with respect to any
fractional share and any such fractional share interest will not entitle
the owner thereof to vote or to any rights of stockholders of National
City. In lieu of any such fractional shares, holders of Certificates
otherwise entitled to fractional shares shall be entitled to receive
promptly from the Exchange Agent a cash payment in an amount equal to the
fraction of such share of National City Common Stock to which such holder
would otherwise be entitled multiplied by the Market Price (as hereinafter
defined).
2.4 Closing of the Company's Transfer Books. The stock transfer books of
Company shall be closed at the close of business on the business day immediately
preceding the date of the Effective Time. In the event of a transfer of
ownership of Company Common Stock or Company Series 1 Stock which is not
registered in the transfer records of Company, 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 Company to establish the identity of those
persons entitled to receive the Merger Consideration specified in this Agreement
for their shares of Company Common Stock or Company Series 1 Stock, which books
shall be conclusive with respect to the ownership of such shares. In the event
of a dispute with respect to the ownership of any such shares, the Surviving
Corporation and the Exchange Agent shall be entitled to deposit any Merger
Consideration represented thereby in escrow with an independent party and
thereafter be relieved with respect to any claims to such Merger Consideration.
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2.5 Changes in National City Common Stock. If between the date of this
Agreement and the Effective Time, the shares of National City Common Stock shall
be changed into a different number of shares by reason of any reclassification,
recapitalization, split-up, combination or exchange of shares, or if a stock
dividend thereon shall be declared with a record date within said period, the
Merger Consideration shall be adjusted accordingly.
III. REPRESENTATIONS AND WARRANTIES OF NATIONAL CITY
National City hereby represents and warrants to Company that:
3.1 Corporate Organization. National City is a corporation duly organized,
validly existing and in good standing under the laws of the State of Delaware
and is duly qualified to do business as a foreign corporation in each
jurisdiction in which its ownership or lease of property or the nature of the
business conducted by it makes such qualification necessary, except for such
jurisdictions in which the failure to be so qualified would not have a Material
Adverse Effect. National City is registered as a bank holding company under the
Bank Holding Company Act of 1956, as amended (the "BHCA"). National City has the
requisite corporate power and authority to own, lease and operate its properties
and assets and to carry on its business as it is now being conducted. National
City has heretofore delivered to Company true and complete copies of its
Certificate of Incorporation and By-laws.
3.2 Authority. National City has the requisite corporate power and
authority to execute and deliver this Agreement and to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated herein have been
duly approved by the Board of Directors of National City and no other corporate
proceedings on the part of National City are necessary to authorize this
Agreement or to consummate the transactions so contemplated. This Agreement has
been duly executed and delivered by, and constitutes valid and binding
obligations of National City enforceable against National City in accordance
with its terms, except as enforceability thereof may be limited by applicable
bankruptcy, insolvency, fraudulent transfer, reorganization, moratorium and
other similar laws affecting the enforcement of creditors' rights generally and
except that the availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceedings may be brought.
3.3 Capitalization. As of the date hereof, the authorized capital stock of
National City consists of 700,000,000 shares of National City Common Stock and
5,000,000 shares of National City preferred stock. As of the close of business
on January 9, 1998 (i) 211,097,837 shares of National City Common Stock were
validly issued and outstanding, fully paid and nonassessable and (ii) no shares
of preferred stock were issued and outstanding. As of the date hereof, except as
set forth in this Section 3.3, pursuant to the exercise of employee stock
options under National City's various stock option plans in effect, National
City's dividend reinvestment plan and stock grants made pursuant to the National
City 1991 Restricted Stock Plan 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 and National City Preferred Stock issuable in exchange for the
Company Common Stock and Company Series 1 Stock, respectively, 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
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will be, when so issued, duly authorized, validly issued, fully paid and
nonassessable and will not be subject to preemptive rights.
3.4 Subsidiaries. The name and state of incorporation of each significant
subsidiary (as defined in Paragraph 8.6(i) hereof) of National City
(collectively, the "Significant Subsidiaries") is set forth in the National City
Disclosure Letter. Each of the Significant Subsidiaries is a bank or a
corporation duly organized, validly existing and in good standing under the laws
of its respective jurisdiction of incorporation or organization and is duly
qualified to do business as a foreign corporation in each jurisdiction in which
its ownership or lease of property or the nature of the business conducted by it
makes such qualification necessary, except for such jurisdictions in which the
failure to be so qualified would not have a Material Adverse Effect. Each of the
Significant Subsidiaries has the requisite corporate power and authority to own,
lease and operate its properties and assets and to carry on its businesses as
they are now being conducted. Except as set forth in the National City
Disclosure Letter, all outstanding shares of capital stock of each of the
Significant Subsidiaries are owned by National City or another of National
City's subsidiaries and are validly issued, fully paid and (except pursuant to
12 USC Section 55 in the case of each national bank subsidiary and applicable
state law in the case of each state bank subsidiary) nonassessable, are not
subject to preemptive rights and are owned free and clear of all liens, claims
and encumbrances. There are no outstanding subscriptions, options, warrants,
rights, convertible securities or any other agreements or commitments of any
character relating to the issued or unissued capital stock or other securities
of any Significant Subsidiary obligating any of the Significant Subsidiaries to
issue, deliver or sell, or cause to be issued, delivered or sold additional
shares of its capital stock or obligating any of the Significant Subsidiaries to
grant, extend or enter into any subscription, option, warrant, right,
convertible security or other similar agreement or commitment.
3.5 Information in Disclosure Documents, Registration Statement, Etc. None
of the information with respect to National City or any of National City's
subsidiaries provided by National City for inclusion in (i) the Registration
Statement to be filed with the Securities and Exchange Commission (the
"Commission") by National City on Form S-4 under the Securities Act of 1933, as
amended (the "Securities Act"), for the purpose of registering the shares of
National City Common Stock and National City Preferred Stock to be issued in the
Merger (the "Registration Statement") and (ii) any proxy statement of Company
("Proxy Statement") required to be mailed to Company'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
Company Meeting (as hereinafter defined), or, in the case of the Registration
Statement, at the time it becomes effective, contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. The Registration
Statement will comply as to form in all material respects with the provisions of
the Securities Act and the rules and regulations promulgated thereunder. The
Proxy Statement will comply as to form in all material respects with the
provisions of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and the rules and regulations promulgated thereunder.
3.6 Consents and Approvals; No Violation. Except as set forth in the
National City Disclosure Letter, neither the execution and delivery of this
Agreement by National City nor the consummation by National City of the
transactions contemplated hereby will (a) conflict with or result in any breach
of any provision of its certificate of incorporation or By-laws of National
City, (b) violate, conflict with, constitute a default (or an event which, with
notice or lapse of time or both, would constitute a default) under, or result in
the termination of, or accelerate the performance required by, or result in the
creation of any lien or other encumbrance upon any of the properties or assets
of National City or any of National City's subsidiaries under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust,
license, lease, agreement or other instrument or obligation to which National
City or any of National City's subsidiaries is a party or to which they or any
of their respective properties or assets are subject, except for such
violations, conflicts, breaches, defaults,
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terminations, accelerations or creations of liens or other encumbrances, which
will not have a Material Adverse Effect or (c) require any consent, approval,
authorization or permit of or from, or filing with or notification to, any
court, governmental authority or other regulatory or administrative agency or
commission, domestic or foreign ("Governmental Entity"), except (i) pursuant to
the Exchange Act and the Securities Act, (ii) filing the Certificate of Merger
and the Certificate of Designation pursuant to the DGCL, (iii) filing the Plan
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
Ohio Superintendent of Banks, the Arizona Director of Insurance and such other
state regulatory agencies as may be required (collectively, the "State
Entities"), (viii) filings and approvals pursuant to any applicable state
takeover law, (ix) filings and approvals under the Small Business Investment Act
of 1958 and the rules and regulations thereunder ("SBIA") or (x) consents,
approvals, authorizations, permits, filings or notifications which, if not
obtained or made will not, individually or in the aggregate, have a Material
Adverse Effect.
3.7 Reports and Financial Statements. Since January 1, 1992, National City
and each of National City's subsidiaries have filed all reports, registrations
and statements, together with any required amendments thereto, that they were
required to file with the Commission under Section 12(b), 12(g), 13(a) or 14(a)
of the Securities Exchange Act of 1934, including, but not limited to Forms
10-K, Forms 10-Q and proxy statements (the "National City Reports"). National
City has previously furnished or will promptly furnish Company with true and
complete copies of each of National City's annual reports on Form 10-K for the
years 1992 through 1996 and its quarterly reports on Form 10-Q for March 31,
1997, June 30, 1997 and September 30, 1997. As of their respective dates, the
National City Reports complied with the requirements of the Commission and did
not contain any untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstance under which they were made, not misleading. The
audited consolidated financial statements and unaudited interim financial
statements of National City included in the National City Reports have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis (except as may be indicated therein or in the notes thereto)
and fairly present the consolidated financial position of National City and
National City's subsidiaries as of the dates thereof and the results of their
operations and cash flows for the periods then ended subject, in the case of the
unaudited interim financial statements, to normal year-end and audit adjustments
and any other adjustments described therein. There exist no material liabilities
of National City and its consolidated subsidiaries, contingent or otherwise of a
type required to be disclosed in accordance with generally accepted accounting
practices, except as disclosed in the National City Reports. National City's
reserve for possible loan losses as shown in its Quarterly Report on Form 10-Q
for the fiscal quarter ended September 30, 1997 was adequate, within the meaning
of generally accepted accounting principles and safe and sound banking
practices.
3.8 Taxes. National City will promptly make available to Company, upon
request by Company, true and correct copies of the federal, state and local
income tax returns, and state and local property and sales tax returns and any
other tax returns filed by National City and any of National City's subsidiaries
for each of the fiscal years that remains open, as of the date hereof, for
examination or assessment of tax. National City and each National City
subsidiary have prepared in good faith and duly and timely filed, or caused to
be duly and timely filed, all federal, state, local and foreign income,
estimated tax, withholding tax, franchise, sales and other tax returns or
reports required to be filed by them on or before the date hereof, except to the
extent that all such failures to file, taken together, would not have a Material
Adverse Effect. National City and each of its subsidiaries have paid, or have
made adequate provision or set up an adequate accrual or reserve for the payment
of, all taxes, shown or required to be shown to be owing on all such returns or
reports, together with any interest, additions or penalties related to any such
taxes or to any open taxable year or period. Except as set forth in 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
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the National City Disclosure Letter, neither National City nor any of National
City's subsidiaries is a party to any action or proceeding, nor to the best of
National City's knowledge is any such action or proceeding threatened, by any
Governmental Entity in connection with the determination, assessment or
collection of any taxes, and no deficiency notices or reports have been received
by National City or any of National City's subsidiaries in respect of any
material deficiencies for any tax, assessment, or government charges.
3.9 Employee Plans. Except as set forth in the National City Disclosure
Letter, all employee benefit, welfare, bonus, deferred compensation, pension,
profit sharing, stock option, employee stock ownership, consulting, severance,
or fringe benefit plans, formal or informal, written or oral, and all trust
agreements related thereto, relating to any present or former directors,
officers or employees of National City or its subsidiaries ("National City
Employee Plans") have been maintained, operated, and administered in substantial
compliance with their terms and currently comply, and have at all relevant times
complied, in all material respects with the applicable requirements of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), the Code,
and any other applicable laws. With respect to each National City Employee Plan
which is a pension plan (as defined in Section 3(2) of ERISA): (a) except for
recent amendment(s) to the plans not materially affecting the qualified status
of the plans (which are disclosed in, and copies of which are attached to, the
National City Disclosure Letter), each pension plan as amended (and any trust
relating thereto) intended to be a qualified plan under Section 401(a) of the
Code either: (i) has been determined by the Internal Revenue Service ("IRS") to
be so qualified, (ii) is the subject of a pending application for such
determination that was timely filed, or (iii) will be submitted for such a
determination prior to end of the "remedial amendment period" within the meaning
of Section 401(b) of the Code, (b) there is no accumulated funding deficiency
(as defined in Section 302 of ERISA and Section 412 of the Code), whether or not
waived, and no waiver of the minimum funding standards of such sections has been
requested from the IRS, (c) neither National City nor any of its subsidiaries
has provided, or is required to provide, security to any pension plan pursuant
to Section 401(a)(29) of the Code, (d) the fair market value of the assets of
each defined benefit plan (as defined in Section 3(35) of ERISA) exceeds the
value of the "benefit liabilities" within the meaning of Section 4001(a)(16) of
ERISA under such defined benefit plan as of the end of the most recent plan year
thereof ending prior to the date hereof, calculated on the basis of the
actuarial assumptions used in the most recent actuarial valuation for such
defined benefit plan as of the date hereof, (e) no reportable event described in
Section 4043 of ERISA for which the 30 day reporting requirement has not been
waived has occurred, (f) except as disclosed in the National City Disclosure
Letter, no defined benefit plan has been terminated, nor has the Pension Benefit
Guaranty Corporation ("PBGC") instituted proceedings to terminate a defined
benefit plan or to appoint a trustee or administrator of a defined benefit plan,
and no circumstances exist that constitute grounds under Section 4042(a)(2) of
ERISA entitling the PBGC to institute any such proceedings and (g) no pension
plan is a "multiemployer plan" within the meaning of Section 3(37) of ERISA or a
"multiple employer plan" within the meaning of 413(c) of the Code. Neither
National City nor any of its subsidiaries has incurred any liability to the PBGC
with respect to any "single-employer plan" within the meaning of Section
4001(a)(15) of ERISA currently or formerly maintained by any entity considered
one employer with it under Section 4001 of ERISA or Section 414 of the Code,
except for premiums all of which have been paid when due. Neither National City
nor any of its subsidiaries has incurred any withdrawal liability with respect
to a multiemployer plan under Subtitle E of Title IV of ERISA. Except as set
forth in the National City Disclosure Letter, there is no basis for any person
to assert that National City or any of its subsidiaries has an obligation to
institute any Employee Plan or any such other arrangement, agreement or plan.
With respect to any insurance policy that heretofore has or currently does
provide funding for benefits under any National City Employee Plan, (A) there is
no liability on the part of National City or any of its subsidiaries in the
nature of a retroactive or retrospective rate adjustment, loss sharing
arrangement, or other actual or contingent liability, nor would there be any
such liability if such insurance policy was terminated, and (B) no insurance
company issuing such policy is in receivership, conservatorship, liquidation or
similar proceeding and, to the knowledge of National City, no such proceeding
with respect to any such insurer is imminent. Except as set forth in the
National City Disclosure Letter, neither the execution of this Agreement, nor
the consummation of the transactions contemplated thereby will
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(A) constitute a stated triggering event under any National City Employee Plan
that will result in any payment (whether of severance pay or otherwise) becoming
due from National City or any of its subsidiaries to any present or former
officer, employee, director, shareholder, consultant or dependent of any of the
foregoing or (B) accelerate the time of payment or vesting, or increase the
amount of compensation due to any present or former officer, employee, director,
shareholder, consultant, or dependent of any of the foregoing. Neither National
City nor any of its subsidiaries has any obligations for retiree health and life
benefits under any National City Employee Plan, except as set forth in the
National City Disclosure Letter. There are no restrictions on the rights of
National City or its subsidiaries to amend or terminate any such National City
Employee Plan without incurring any liability thereunder.
3.10 Material Contracts. Except as set forth in the National City
Disclosure Letter or disclosed in the National City Reports, neither National
City nor any of its subsidiaries is a party to, or is bound or affected by, or
receives benefits under (a) any employment, severance, termination, consulting
or retirement agreement (collectively, "Benefit Agreements") providing for
aggregate payments to any person in any calendar year in excess of $100,000, (b)
any material agreement, indenture or other instrument relating to the borrowing
of money by National City or any of its subsidiaries or the guarantee by
National City or any of its subsidiaries of any such obligation (other than
trade payables and instruments relating to borrowings or guaranties made in the
ordinary course of business) or (c) any other contract or agreement or amendment
thereto that would be required to be filed as an exhibit to a Form 10-K filed by
National City with the Commission as of the date of this Agreement
(collectively, the "National City Contracts"). Neither National City nor any of
National City's subsidiaries is in default under any of the National City
Contracts, which default is reasonably likely to have, either individually or in
the aggregate, a Material Adverse Effect and there has not occurred any event
that with the lapse of time or the giving of notice or both would constitute
such a default. Neither National City nor any of National City's subsidiaries is
a party to, or is bound by, any collective bargaining agreement, contract, or
other agreement or understanding with a labor union or labor organization, nor
is National City or any of National City's subsidiaries the subject of a
proceeding asserting that it or any such subsidiary has committed an unfair
labor practice or seeking to compel it or such subsidiary to bargain with any
labor organization as to wages and conditions of employment, nor is there any
strike or other labor dispute involving it or any of its subsidiaries pending or
threatened.
3.11 Absence of Certain Changes or Events. Except as set forth in the
National City Disclosure Letter or disclosed in the National City Reports filed
by National City with the Commission prior to the date of this Agreement, since
December 31, 1996, there has not been any change in the financial condition,
results of operations or business of National City and its subsidiaries which
would or in the future will have a Material Adverse Effect.
3.12 Litigation. Except as disclosed in the National City Reports filed by
National City with the Commission prior to the date of this Agreement, there is
no suit, action or proceeding pending, or, to the knowledge of National City,
threatened against or affecting National City or any of National City's
subsidiaries which, if decided adversely to National City, would be reasonably
expected to result in a Material Adverse Effect, nor is there any judgment,
decree, injunction, rule or order of any Governmental Entity or arbitrator,
outstanding against National City or any of National City's subsidiaries having,
or which, insofar as reasonably can be foreseen, in the future would have, a
Material Adverse Effect.
3.13 Compliance with Laws and Orders. Except as set forth in the National
City Disclosure Letter or disclosed in the National City Reports filed by
National City with the Commission prior to the date of this Agreement, the
businesses of National City and of National 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
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violations which individually or in the aggregate do not, and, insofar as
reasonably can be foreseen, in the future will not, have a Material Adverse
Effect. Except as set forth in the National City Disclosure Letter, no
investigation or review by any Governmental Entity with respect to National City
or any of National City's subsidiaries is pending or, to the knowledge of
National City, threatened, nor has any Governmental Entity indicated an
intention to conduct the same in each case other than those the outcome of which
will not have a Material Adverse Effect.
3.14 Agreements with Bank Regulators, Etc. Neither National City nor any
National City subsidiary is a party to any written agreement or memorandum of
understanding with, or a party to any commitment letter, board resolution or
similar undertaking to, or is subject to any order or directive by, or is a
recipient of any extraordinary supervisory letter from, any Governmental Entity
which restricts materially the conduct of its business, or in any manner relates
to its capital adequacy, its credit or reserve policies or its management, nor
has National City been advised by any Governmental Entity that it is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, decree, agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter or similar
submission. Neither National City nor any of National City's subsidiaries is
required by Section 32 of the Federal Deposit Insurance Act ("FDIA") to give
prior notice to a Federal banking agency of the proposed addition of an
individual to its board of directors or the employment of an individual as a
senior executive officer. National City knows of no reason why the regulatory
approvals referred to in Subsection 3.6(c) should not be obtained.
3.15 National City Ownership of Stock. As of the date of this Agreement,
neither National City nor any of its affiliates or associates (i) beneficially
owns, directly or indirectly, or (ii) are parties to any agreement, arrangement
or understanding for the purpose of acquiring, holding, voting or disposing of,
Company Common Stock (other than DPC Shares or Trust Account Shares), which in
the aggregate, represent 5% or more of the outstanding shares of Company Common
Stock or Company Series 1 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.
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 by this Agreement. The Board of Directors of
National City has approved the transactions contemplated by this Agreement and
the Option Agreement such that the provisions of Section 203 of the DGCL and any
other applicable state business combination or anti-takeover provisions of
National City Certificate of Incorporation or By-laws shall not be triggered by
the Merger, execution of this Agreement or the Option Agreement or any
transactions contemplated by such Agreements.
3.19 Material Interests of Certain Persons. Except as disclosed in
National City's Proxy Statement for its 1997 Annual Meeting of Stockholders, no
officer or director of National City, or any "associate" (as such term is
defined in Rule 14a-1 under the ▇▇▇▇ ▇▇▇) 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
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agreement with any governmental entity relating to (1) the health,
protection, preservation, containment or restoration of the environment
including, without limitation, air, water vapor, surface water,
groundwater, drinking water supply, surface soil, subsurface soil,
wetlands, plant and animal life or any other natural resource,
conservation, and/or (2) the use, storage, recycling, treatment,
generation, transportation, processing, handling, labeling, production,
release or disposal of Hazardous Substances. The term Environmental Law
includes without limitation (1) the Comprehensive Environmental Response,
Compensation and Liability Act, as amended, 42 U.S.C. Section 9601, et
seq.; the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C.
9601(2)(D); the Resource Conservation and Recovery Act, as amended, 42
U.S.C. Section 6901, et seq.; the Clean Air Act, as amended, 42 U.S.C.
Section 7401, et seq.; the Federal Water Pollution Control Act, as amended
by the Clean Water Act, 33 U.S.C. Section 1251, et seq.; the Toxic
Substances Control Act, as amended, 15 U.S.C. Section 9601, et seq.; the
Emergency Planning and Community Right to Know Act, 42 U.S.C. Section
11001, et seq.; the Safe Drinking Water Act, 42 U.S.C. Section 300f, et
seq.; and all comparable state and local laws, ordinances, rules,
regulations respecting the interpretation or enforcement of same and (2)
any common law (including without limitation common law that may impose
strict liability) that may impose liability for injuries or damages due to
the release of any Hazardous Substance.
"HAZARDOUS SUBSTANCE" means (i) any hazardous wastes, toxic chemicals,
materials, substances or wastes as defined by or for the purposes of any
Environmental Law; (ii) any "oil", as defined by the Clean Water Act, as
amended from time to time, and regulations promulgated thereunder
(including crude oil or any fraction thereof and any petroleum products or
derivatives thereof); (iii) any substance, the presence of which is
prohibited, regulated or controlled by any applicable federal, state or
local laws, regulations, statutes or ordinances now in force or hereafter
enacted relating to waste disposal or environmental protection with respect
to the exposure to, or manufacture, possession, presence, use, generation,
storage, transportation, treatment, release, emission, discharge, disposal,
abatement, cleanup, removal, remediation or handling of any such substance;
(iv) any asbestos or asbestos-containing materials, polychlorinated
biphenyls ("PCBs") in the form of electrical equipment, fluorescent light
fixtures with ballasts, cooling oils or any other form, urea formaldehyde,
atmospheric radon; (v) any solid, liquid, gaseous or thermal irritant or
contaminant, such as smoke, vapor, soot, fumes, alkalis, acids, chemicals,
pesticides, herbicides, sewage, industrial sludge or other similar wastes;
(vi) industrial, nuclear or medical by-products; (vii) any lead based paint
or coating and (viii) any underground storage tank(s).
"LOAN PORTFOLIO PROPERTIES, TRUST PROPERTIES AND OTHER PROPERTIES"
means any real property, interest in real property, improvements,
appurtenances, rights and personal property attendant thereto, which is
owned, leased as a landlord or a tenant, licensed as a licensor or
licensee, managed or operated or upon which is held a mortgage, deed of
trust, deed to secure debt or other security interest by National City or
Company, as the case may be, or any of their subsidiaries whether directly,
as an agent, as trustee or other fiduciary or otherwise.
Except as set forth in the National City Disclosure Letter, (i) to the
best of National City's knowledge, neither National City nor any of its
subsidiaries is in violation of or has any liability, absolute or
contingent, in connection with or under any Environmental Law, except any
such violations or liabilities which would not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect; (ii)
to the best of National City's knowledge, none of the Loan Portfolio
Properties, Trust Properties and Other Properties of National City or its
subsidiaries is in violation of or has any liability, absolute or
contingent, under any Environmental Law, except any such violations or
liabilities which, individually or in the aggregate would not have a
Material Adverse Effect; and (iii) to the best of National City's
knowledge, there are no actions, suits, demands, notices, claims,
investigations or proceedings pending or threatened relating to any Loan
Portfolio Properties, Trust Properties and Other Properties including,
without limitation any notices, demand letters or requests for information
from any federal or state environmental agency relating to any
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such liability under or violation of Environmental Law, which would impose
a liability upon National City or its subsidiaries pursuant to any
Environmental Law, except such as would not, individually or in the
aggregate have a Material Adverse Effect.
IV. REPRESENTATIONS AND WARRANTIES OF COMPANY
Company hereby represents and warrants to National City that:
4.1 Corporate Organization. Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of Indiana and
is duly qualified to do business as a foreign corporation in each jurisdiction
in which its ownership or lease of property or the nature of the business
conducted by it makes such qualification necessary, except for such
jurisdictions in which the failure to be so qualified would not have a Material
Adverse Effect. Company is registered as a bank holding company under the BHCA.
Company has the requisite corporate power and authority to own, lease and
operate its properties and assets and to carry on its business as it is now
being conducted. Company has heretofore delivered to National City true and
complete copies of its Articles of Incorporation and By-laws.
4.2 Authority. Company has the requisite corporate power and authority to
execute and deliver this Agreement and, except for any required approval of
Company's shareholders, to consummate the transactions contemplated by such. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated herein have been duly approved by the Board of
Directors of Company and no other corporate proceedings on the part of Company
are necessary to authorize this Agreement or to consummate the transactions so
contemplated, subject only to approval by the shareholders of Company as
provided in Section 5.15 (a) of this Agreement. This Agreement has been duly
executed and delivered by, and constitute valid and binding obligations of
Company, enforceable against Company in accordance with its terms, except as the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization, fraudulent transfer, moratorium and other similar laws affecting
the enforcement of creditors' rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is subject
to the discretion of the court before which any proceedings may be brought.
4.3 Capitalization. As of the date hereof, the authorized capital stock of
Company consists of 50,000,000 shares of Company Common Stock, 2,000,000 shares
of Company Class A Voting Preferred stock and 2,000,000 shares of Company Class
B Nonvoting stock. As of the close of business on January 9, 1998, 17,103,431
shares of Company Common Stock were validly issued and outstanding, fully paid
and nonassessable and 739,976 shares of Company Series 1 Stock were issued or
outstanding. As of the date of this Agreement except as set forth in this
Section 4.3, pursuant to the Company Option Plans, pursuant to the Option
Agreement or set forth in a disclosure letter executed by Company and dated and
delivered by Company to National City as of the date hereof ("Company Disclosure
Letter"), there are no shares of capital stock of Company authorized, issued or
outstanding and there are no outstanding subscriptions, options, warrants,
rights, convertible securities or any other agreements or commitments of any
character relating to the issued or unissued capital stock or other securities
of Company obligating Company to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock of Company or obligating
Company to grant, extend or enter into any subscription, option, warrant, right,
convertible security or other similar agreement or commitment. Except as set
forth in the Company Disclosure Letter, there are no voting trusts or other
agreements or understandings to which Company or any of Company's subsidiaries
is a party with respect to the voting of the capital stock of Company. As of the
date of this Agreement, there were outstanding under the Company Option Plans
options to purchase 951,487 shares of Company Common Stock, which Company stock
options had a weighted average exercise price of $22.78 and for which adequate
shares of Company Common Stock have been reserved for issuance under the Company
Option Plans.
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4.4 Subsidiaries. The Company Disclosure Letter sets forth the name and
state of incorporation of each subsidiary of Company (collectively, "Company
Subsidiaries"). Each of Company Subsidiaries is a bank, a corporation or other
business entity duly organized, validly existing and in good standing under the
laws of its respective jurisdiction of incorporation or organization and is duly
qualified to do business as a foreign corporation or foreign business entity in
each jurisdiction in which its ownership or lease of property or the nature of
the business conducted by it makes such qualification necessary, except for such
jurisdictions in which the failure to be so qualified would not have a Material
Adverse Effect. Each of Company Subsidiaries has the requisite corporate power
and authority to own, lease and operate its properties and assets and to carry
on its businesses as they are now being conducted. Except as set forth in the
Company Disclosure Letter, all outstanding shares of capital stock of each
Company Subsidiary is owned by Company or another Company Subsidiary and are
validly issued, fully paid and (except pursuant to 12 USC Section 55 in the case
of each national bank subsidiary and applicable state law in the case of each
state bank subsidiary) nonassessable, are not subject to preemptive rights and
are owned free and clear of all liens, claims and encumbrances. There are no
outstanding subscriptions, options, warrants, rights, convertible securities or
any other agreements or commitments of any character relating to the issued or
unissued capital stock or other securities of any Company Subsidiary obligating
any Company Subsidiary to issue, deliver or sell, or cause to be issued,
delivered or sold additional shares of its capital stock or obligating any
Company Subsidiary to grant, extend or enter into any subscription, option,
warrant, right, convertible security or other similar agreement or commitment.
4.5 Information in Disclosure Documents, Registration Statement, Etc. None
of the information with respect to Company or any Company Subsidiary provided by
Company for inclusion in the Proxy Statement or the Registration Statement will,
in the case of the Proxy Statement or any amendments or supplements thereto, at
the time of the mailing of the Proxy Statement and any amendments or supplements
thereto, and at the time of the Company Meeting (as hereinafter defined) or, in
the case of the Registration Statement, at the time it becomes effective,
contain any untrue statement of material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they are made, not
misleading. The Proxy Statement will comply as to form in all material respects
with the provisions of the Exchange Act and the rules and regulations
promulgated thereunder.
4.6 Consent and Approvals; No Violation. Except as set forth in the
Company Disclosure Letter neither the execution and delivery of this Agreement
by Company nor the consummation by Company of the transactions contemplated
hereby will (a) conflict with or result in any breach of any provision of its
articles of incorporation or By-laws of Company, (b) violate, conflict with,
constitute a default (or an event which, with notice or lapse of time or both,
would constitute a default) under, or result in the termination of, or
accelerate the performance required by, or result in the creation of any lien or
other encumbrance upon any of the properties or assets of Company or any of
Company Subsidiaries under, any of the terms, conditions or provisions of any
note, bond, mortgage, indenture, deed of trust, license, lease, agreement or
other instrument or obligation to which Company or any Company Subsidiary is a
party or to which they or any of their respective properties or assets are
subject, except for such violations, conflicts, breaches, defaults,
terminations, accelerations or creations of liens or other encumbrances, which
will not have a Material Adverse Effect or (c) require any consent, approval,
authorization or permit of or from, or filing with or notification to, any
Governmental Entity, except (i) pursuant to the Exchange Act and the Securities
Act, (ii) filing the Certificate of Merger and the Certificate of Designation,
(iii) filing the Plan 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 approvals by, the State
Entities, (viii) filings and approvals pursuant to any applicable state takeover
law, (ix) filings and approvals under the SBIA or (x) consents, approvals,
authorizations, permits, filings or notifications which, if not obtained or made
will not, individually or in the aggregate, have a Material Adverse Effect.
4.7 Reports and Financial Statements. Since January 1, 1992, Company and
each Company Subsidiary have filed all reports, registrations and statements,
together with any required amendments thereto, that they
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were required to file with the Commission under Sections 12(b), 12(g), 13(a) or
14(a) of the Securities Exchange Act of 1934, including, but not limited to
Forms 10-K, Forms 10-Q and proxy statements (the "Company Reports"). Company has
previously furnished or will promptly furnish National City with true and
complete copies of each of Company's annual reports on Form 10-K for the years
1992 through 1996 and its quarterly reports on Form 10-Q for March 31, 1997,
June 30, 1997 and September 30, 1997. As of their respective dates, Company
Reports complied with the requirements of the Commission and did not contain any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstance under which they were made, not misleading. The audited
consolidated financial statements and unaudited interim financial statements of
Company included in the Company Reports have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis (except
as may be indicated therein or in the notes thereto) and fairly present the
financial position of Company and Company Subsidiaries taken as a whole as at
the dates thereof and the consolidated results of their operations and cash
flows for the periods then ended subject, in the case of the unaudited interim
financial statements, to normal year-end and audit adjustments and any other
adjustments described therein. There exist no material liabilities of Company
and its consolidated subsidiaries, contingent or otherwise of a type required to
be disclosed in accordance with generally accepted accounting practices, except
as disclosed in the Company Reports. Company's reserve for possible loan losses
as shown in its Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1997 was adequate, within the meaning of generally accepted
accounting principles and safe and sound banking practices.
4.8 Taxes. Company will promptly make available to National City, upon
request by National City, true and correct copies of the federal, state and
local income tax returns, and state and local property and sales tax returns
filed by Company and Company Subsidiaries for each of the fiscal years that
remains open, as of the date hereof, for examination or assessment of tax.
Company and each Company Subsidiary have prepared in good faith and duly and
timely filed, or caused to be duly and timely filed, all federal, state, local
and foreign income, franchise, sales and other tax returns or reports required
to be filed by them on or before the date hereof, except to the extent that all
failures to file, taken together, would not have a Material Adverse Effect.
Company and each Company Subsidiary have paid, or have made adequate provision
or set up an adequate accrual or reserve for the payment of, all taxes shown or
required to be shown to be owing on all such returns or reports, together with
any interest, additions or penalties related to any such taxes or to any open
taxable year or period. Except as set forth in the Company Disclosure Letter,
neither Company nor any Company Subsidiary has consented to extend the statute
of limitations with respect to the assessment of any tax. Except as set forth in
the Company Disclosure Letter, neither Company nor any of Company Subsidiaries
is a party to any action or proceeding, nor to the best of Company's knowledge
is any such action or proceeding threatened, by any Governmental Entity in
connection with the determination, assessment or collection of any taxes, and no
deficiency notices or reports have been received by Company or any of Company
Subsidiaries in respect of any material deficiencies for any tax, assessment, or
government charge.
4.9 Employee Plans. Except as set forth in the Company Disclosure Letter,
all employee benefit, welfare, bonus, deferred compensation, pension, profit
sharing, stock option, employee stock ownership, consulting, severance, or
fringe benefit plans, formal or informal, written or oral and all trust
agreements related thereto, relating to any present or former directors,
officers or employees of Company or Company Subsidiaries ("Company Employee
Plans") have been maintained, operated, and administered in substantial
compliance with their terms and currently comply, and have at all relevant times
complied, in all material respects with the applicable requirements of ERISA,
the Code, and any other applicable laws. Except as set forth in the Company
Disclosure Letter, with respect to each Company Employee Plan which is a pension
plan (as defined in Section 3(2) of ERISA): (a) except for recent amendment(s)
to the plans not materially affecting the qualified status of the plans (which
are disclosed in the Company Disclosure Letter, and copies of which were
previously made available to National City), each pension plan as amended (and
any trust relating thereto) intended to be a qualified plan
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under Section 401(a) of the Code either has been determined by the IRS to be so
qualified or is the subject of a pending application for such determination that
was timely filed, (b) there is no accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Code), whether or not waived, and no
waiver of the minimum funding standards of such sections has been requested from
the IRS, (c) neither Company nor any of the Company Subsidiaries has provided,
or is required to provide, security to any pension plan pursuant to Section
401(a)(29) of the Code, (d) the fair market value of the assets of each defined
benefit plan (as defined in Section 3(35) of ERISA) exceeds the value of the
"benefit liabilities" within the meaning of Section 4001(a)(16) of ERISA under
such defined benefit plan as of the end of the most recent plan year thereof
ending prior to the date hereof, calculated on the basis of the actuarial
assumptions used in the most recent actuarial valuation for such defined benefit
plan as of the date hereof, (e) no reportable event described in Section 4043 of
ERISA for which the 30 day reporting requirement has not been waived has
occurred, (f) no defined benefit plan has been terminated, nor has the PBGC
instituted proceedings to terminate a defined benefit plan or to appoint a
trustee or administrator of a defined benefit plan, and no circumstances exist
that constitute grounds under Section 4042(a)(2) of ERISA entitling the PBGC to
institute any such proceedings and (g) no pension plan is a "multiemployer plan"
within the meaning of Section 3(37) of ERISA or a "multiple employer plan"
within the meaning of 413(c) of the Code. Neither Company nor any Company
Subsidiary has incurred any liability to the PBGC with respect to any
"single-employer plan" within the meaning of 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 Company nor any of its subsidiaries
has incurred any withdrawal liability with respect to a multiemployer plan under
Subtitle E of Title IV of ERISA. Except as set forth in the Company Disclosure
Letter, there is no basis for any person to assert that Company or any of its
subsidiaries has an obligation to institute any Employee Plan or any such other
arrangement, agreement or plan. With respect to any insurance policy that
heretofore has or currently does provide funding for benefits under any Company
Employee Plan, (A) there is no liability on the part of Company or any of its
subsidiaries in the nature of a retroactive or retrospective rate adjustment,
loss sharing arrangement, or other actual or contingent liability, 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 Company, no such
proceeding with respect to any such insurer is imminent. Except as set forth in
the Company Disclosure Letter, neither the execution of this Agreement, nor the
consummation of the transactions contemplated thereby will (A) constitute a
stated triggering event under any Company Employee Plan that will result in any
payment (whether of severance pay or otherwise) becoming due from Company or any
of its subsidiaries to any present or former officer, employee, director,
shareholder, consultant or dependent of any of the foregoing or (B) accelerate
the time of payment or vesting, or increase the amount of compensation due to
any present or former officer, employee, director, shareholder, consultant, or
dependent of any of the foregoing. Neither Company nor any Company Subsidiary
has any obligations for retiree health and life benefits under any Company
Employee Plan, except as set forth in the Company Disclosure Letter. Except as
set forth in the Company Disclosure Letter, there are no restrictions on the
rights of Company or Company Subsidiaries to amend or terminate any such Company
Employee Plan without incurring any liability thereunder.
4.10 Material Contracts. Except as set forth in the Company Disclosure
Letter or disclosed in the Company Reports, neither Company nor any Company
Subsidiary is a party to, or is bound or affected by, or receives benefits under
(a) any Benefit Agreements providing for aggregate payments to any person in any
calendar year in excess of $100,000, (b) any material agreement, indenture or
other instrument relating to the borrowing of money by Company or any Company
Subsidiary or the guarantee by Company or any Company Subsidiary of any such
obligation (other than trade payables and instruments relating to transactions
entered into in the ordinary course of business) or (c) any other contract or
agreement or amendment thereto that would be required to be filed as an exhibit
to a Form 10-K filed by Company with the Commission as of the
date of this Agreement (collectively, the "Company Contracts"). Neither Company
nor any Company Subsidiary is in default under any
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Company Contract, which default is reasonably likely to have, either
individually or in the aggregate, a Material Adverse Effect, and there has not
occurred any event that with the lapse of time or the giving of notice or both
would constitute such a default. Except as set forth in the Company Disclosure
Letter, neither Company nor any of Company Subsidiary is a party to, or is bound
by, any collective bargaining agreement, contract, or other agreement or
understanding with a labor union or labor organization, nor is Company or any
Company Subsidiary the subject of a proceeding asserting that is or any Company
Subsidiary has committed an unfair labor practice or seeking to compel it or
such subsidiary to bargain with any labor organization as to wages and
conditions of employment, nor is there any strike or other labor dispute
involving it or any Company Subsidiary pending or threatened.
4.11 Absence of Certain Changes or Events. Except as set forth in the
Company Disclosure Letter or disclosed in Company Reports filed by Company with
the Commission prior to the date of this Agreement, since December 31, 1996,
there has not been any change in the financial condition, results of operations
or business of Company and Company Subsidiaries which would or in the future
will have a Material Adverse Effect.
4.12 Litigation. Except as disclosed in Company Reports filed by Company
with the Commission prior to the date of this Agreement, there is no suit,
action or proceeding pending, or, to the knowledge of Company, threatened
against or affecting Company or any Company Subsidiary which, if determined
adversely to Company, would be reasonably expected to have a Material Adverse
Effect, nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator, outstanding against Company or any Company
Subsidiary having, or which, insofar as reasonably can be foreseen, in the
future would have, a Material Adverse Effect.
4.13 Compliance with Laws and Orders. Except as set forth in the Company
Disclosure Letter or as disclosed in Company Reports filed by Company with the
Commission prior to the date of this Agreement, the businesses of Company and
Company Subsidiaries are not being conducted in violation of any law, ordinance,
regulation, judgment, order, decree, license or permit of any Governmental
Entity (including, without limitation, in the case of Company Subsidiaries that
are banks, all statutes, rules and regulations pertaining to the conduct of the
banking business and the exercise of trust powers), except for violations which
individually or in the aggregate do not, and, insofar as reasonably can be
foreseen, in the future will not, have a Material Adverse Effect. Except as set
forth in the Company Disclosure Letter, no investigation or review by any
Governmental Entity with respect to Company or any Company Subsidiary is pending
or, to the knowledge of Company threatened, nor has any Governmental Entity
indicated an intention to conduct the same in each case other than those the
outcome of which will not have a Material Adverse Effect.
4.14 Agreements with Bank Regulators, Etc. Neither Company nor any Company
Subsidiary is a party to any written agreement or memorandum of understanding
with, or a party to any commitment letter, board resolution or similar
undertaking to, or is subject to any order or directive by, or is a recipient of
any extraordinary supervisory letter from, any Governmental Entity which
restricts materially the conduct of its business, or in any manner relates to
its capital adequacy, its credit or reserve policies or its management, except
for those the existence of which has been disclosed in the Company Disclosure
Letter, nor has Company been advised by any Governmental Entity that it is
contemplating issuing or requesting (or is considering the appropriateness of
issuing or requesting) any such order, decree, agreement, memorandum of
understanding, extraordinary supervisory letter, commitment letter or similar
submission, except as set forth in the Company Disclosure Letter. Neither
Company nor any Company Subsidiary is required by Section 32 of the Federal
Deposit Insurance Act to give prior notice to a Federal banking agency of the
proposed addition of an individual to its board of directors or the employment
of an individual as a senior or executive officer. Company knows of no reason
why the regulatory approvals referred to in Subsections 4.6(c) should not be
obtained.
4.15 Tax Treatment. As of the date hereof, Company is aware of no reason
why the Merger will fail to qualify as a reorganization under Section 368(a) of
the Code.
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4.16 Fees. Except for fees paid and payable to ▇▇▇▇▇, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇,
Inc., neither Company nor any Company Subsidiary has paid or will become
obligated to pay any fee or commission to any broker, finder or intermediary in
connection with the transactions contemplated by this Agreement.
4.17 Company Action. The Board of Directors of Company (at a meeting duly
called, constituted and held) has by the requisite vote of all directors present
(a) determined that the Merger is advisable and in the best interests of Company
and its shareholders, (b) approved this Agreement and the transactions
contemplated hereby, including the Merger, and (c) has directed that the Merger
be submitted for consideration by the Company's shareholders at the Company
Meeting. The Company has taken all steps necessary to exempt (i) the execution
of this Agreement and the Stock Option, (ii) the Merger and (iii) the
transactions contemplated hereby and thereby from any statute of the State of
Indiana that purports to limit or restrict business combinations or the ability
to acquire or to vote shares, and any applicable provision of the Company's
Articles of Incorporation or By-Laws containing change of control or
anti-takeover provisions.
4.18 Vote Required. The affirmative votes of a majority of the outstanding
shares of Company Common Stock entitled to vote thereon are the only votes of
the holders of any class or series of Company capital stock necessary to approve
this Agreement and the transactions contemplated by the Agreement.
4.19 Material Interests of Certain Persons. Except as disclosed in
Company's Proxy Statement for its 1997 Annual Meeting of Shareholders or as set
forth in the Company Disclosure Letter, no officer or director of Company, or
any "associate" (as such term is defined in Rule 14a-1 under the ▇▇▇▇ ▇▇▇) of
any such officer or director, has any material interest in any material
contracts or property (real or personal), tangible or intangible, used in or
pertaining to the business of Company or any Company Subsidiaries.
4.20 Environmental Matters. (i) To the best of Company's knowledge,
neither Company nor any of its subsidiaries is in violation of or has any
liability, absolute or contingent, in connection with or under any Environmental
Law, except any such violations or liabilities which would not reasonably be
expected, individually or in the aggregate, to have a Material Adverse Effect;
(ii) to the best of Company's knowledge, none of the Loan Portfolio Properties,
Trust Properties and Other Properties of Company or its subsidiaries is in
violation of or has any liability, absolute or contingent, under any
Environmental Law, except any such violations or liabilities which, individually
or in the aggregate would not have a Material Adverse Effect; and (iii) to the
best of Company's knowledge, there are no actions, suits, demands, notices,
claims, investigations or proceedings pending or threatened relating to any Loan
Portfolio Properties, Trust Properties and Other Properties including, without
limitation any notices, demand letters or requests for information from any
federal or state environmental agency relating to any such liability under or
violation of Environmental Law, which would impose a liability upon Company or
its subsidiaries pursuant to any Environmental Law, except such as would not,
individually or in the aggregate have a Material Adverse Effect.
V. COVENANTS
5.1 Acquisition Proposals. Each of Company and Company Subsidiaries shall
not, directly or indirectly, and shall instruct and otherwise use its best
efforts to cause their respective officers, directors, employees, agents or
advisors or other representatives or consultants not to, directly or indirectly,
(i) solicit or initiate any proposals or offers from any person relating to any
acquisition or purchase of all or a material amount of the assets of, or any
securities of, or any merger, consolidation or business combination with,
Company or any of Company Subsidiaries (such transactions are referred to herein
as "Acquisition Transactions") or (ii) except to the extent that the Board of
Directors of Company is required, in a written opinion of counsel to the Board
of Directors of Company, in the exercise of its fiduciary duties in accordance
with applicable law, to participate in any discussions or negotiation regarding,
or furnish to any other person any information with respect to, an Acquisition
Transaction; provided, however, that nothing contained in this Section 5.1 shall
restrict or prohibit any disclosure by Company that is required in any document
to be filed with the Commission after the date of this
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Agreement or any disclosure that, in the written opinion of counsel to the Board
of Directors of the Company, is otherwise required under applicable law. Company
will immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any parties conducted heretofore with respect
to any of the foregoing. Company will notify National City immediately if any
such inquiries or proposals are received by, any such information is requested
from, or any such negotiations or discussions are sought to be initiated or
continued with Company.
5.2 Interim Operations of Company. During the period from the date of this
Agreement to the Effective Time, except as specifically contemplated by this
Agreement, set forth in the Company Disclosure Letter or as otherwise approved
expressly in writing by National City (which approval will not be unreasonably
withheld or delayed):
(a) CONDUCT OF BUSINESS. Company shall, and shall cause each of
Company Subsidiaries to, conduct their respective businesses only in, and
not take any action except in, the ordinary course of business consistent
with past practice. Company shall use reasonable efforts to preserve intact
the business organization of Company and each of Company Subsidiaries, to
keep available the services of its and their present key officers and
employees and to preserve the goodwill of those having business
relationships with Company or Company Subsidiaries. Other than in the
ordinary course of business consistent with past practice, Company shall
not (i) incur any indebtedness for borrowed money (it being understood and
agreed that incurrence of indebtedness in the ordinary course of business
shall include, without limitation, the creation of deposit liabilities,
purchases of federal funds, borrowings pursuant to existing lines of
credit, sales of certificates of deposit and entering into repurchase
agreements), (ii) assume, guarantee, endorse or otherwise as an
accommodation become responsible for the obligations of any other
individual, corporation or other entity, or (iii) make any loan or advance
other than in the ordinary course of business consistent with past
practice;
(b) ARTICLES AND BY-LAWS. Company shall not and shall not permit any
Company 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. Company shall not, and shall not permit any
Company Subsidiary to, issue or sell any shares of capital stock or any
other securities of any of them (other than pursuant to outstanding
exercisable stock options granted pursuant to the Company Option Plans or
conversion of any shares of Company Series 1 Stock) or issue any securities
convertible into or exchangeable for, or options, warrants to purchase,
scrip, rights to subscribe for, calls or commitments of any character
whatsoever relating to, or enter into any contract, understanding or
arrangement with respect to the issuance of, any shares of capital stock or
any other securities of any of them (other than pursuant to the Company
Option Plans or the Company's dividend reinvestment plan) or enter into any
arrangement or contract with respect to the purchase or voting of shares of
their capital stock, or adjust, split, combine or reclassify any of their
capital stock or other securities or make any other changes in their
capital structures. Neither Company nor any Company Subsidiaries shall
grant any additional stock options.
(d) DIVIDENDS. Company shall not and shall not permit any Company
Subsidiary to, declare, set aside, pay or make any dividend or other
distribution or payment (whether in cash, stock or property) with respect
to, or purchase or redeem, any shares of the capital stock of any of them
other than (a) regular quarterly cash dividends in an amount not to exceed
$.20 per share of Company Common Stock payable on the regular historical
payment dates (b) regular dividends on Company Series 1 Stock payable
consistent with past practice and (c) dividends paid by any Company
Subsidiary to Company or another Company Subsidiary with respect to its
capital stock between the date hereof and the Effective Time. It is agreed
by
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the parties hereto that they will cooperate to assure that, during any
quarter, there shall not be a duplication of nor omission of payment of
dividends to shareholders of Company.
(e) EMPLOYEE PLANS, COMPENSATION, ETC. Except as otherwise provided
in this Agreement, Company shall not, and shall not permit any Company
Subsidiary to, adopt or amend (except as required by law or other
contractual obligations existing on the date hereof) any bonus, profit
sharing, compensation, severance, termination, stock option, pension,
retirement, deferred compensation, employment or other employee benefit
agreements, trusts, plans, funds or other arrangements for the benefit or
welfare of any director, officer or employee, or (except for normal merit
increases in the ordinary course of business consistent with past practice)
increase the compensation or fringe benefits of any director, officer or
employee or pay any benefit not required by any existing plan, agreement or
arrangement (including, without limitation, the granting of stock options
or stock appreciation rights) or take any action or grant any benefit not
required under the terms of any existing agreements, trusts, plans, funds
or other such arrangements or enter into any contract, agreement,
commitment or arrangement to do any of the foregoing.
(f) CERTAIN POLICIES. Company will modify and change its loan,
litigation, real estate valuation asset, liquidity and investment portfolio
policies and practices (including loan classifications and level of
reserves) prior to the Effective Time so as to be consistent on a mutually
satisfactory basis with those of National City and generally accepted
accounting principles, at the earlier of (i) such time as National City
acknowledges that all conditions to its obligations to consummate the
Merger set forth in Sections 7.1 and 7.3 have been waived or satisfied or
(ii) immediately prior to the Effective Time. Company's representations,
warranties or covenants contained in this Agreement shall not be deemed to
be untrue or breached in any respect for any purpose as a consequence of
any such modifications or changes.
5.3 Interim Operations of National City. During the period from the date
of this Agreement to the Effective Time, without the prior written consent of
Company, National City will not declare or pay any extraordinary or special
dividend on the National City Common Stock or take any action that would (a)
materially delay or adversely affect the ability of National City to obtain any
approvals of Governmental Authorities required to permit consummation of the
Merger or (b) materially adversely affect its ability to perform its obligations
under this Agreement or to consummate the transaction contemplated hereby.
5.4 Employee Matters.
(a) BENEFIT AGREEMENTS. Surviving Corporation and National City shall
honor, maintain and perform on and after the Effective Time, without
deduction, counterclaims, interruptions or deferment (other than
withholding under applicable law), all vested benefits of any person under
the Company Employee Plans.
(b) RETIREMENT AND BENEFIT PLANS. For purposes of all employee
benefit plans, programs or arrangements maintained or contributed to by
National City or Surviving Corporation, National City shall credit or shall
cause Surviving Corporation to credit employees of Company and Company
Subsidiaries who become employees of National City or Surviving Corporation
as a result of the Merger ("Company Employees") with all service with
Company or any Company Subsidiaries for purposes of eligibility and vesting
as if such service, and compensation from, had been performed for National
City, and, for purposes of benefit accruals under any severance sick leave
and other similar employee benefit plans (but not under any qualified
retirement plan maintained by National City), provided, however, that this
provision shall not change the treatment under the National City
Non-Contributory Retirement Plan and Trust of service with National City or
any of National City's subsidiaries prior to the Closing Date. From and
after the Effective Time, National City shall, or shall cause Surviving
Corporation to, cause any and all pre-existing condition limitations under
any health plans to be waived with respect to Company Employees and their
eligible dependents to the extent that such conditions were covered by
Company's health plans. To the extent that any Company Employees and their
eligible dependents have, before the Effective Time, satisfied in whole or
in part any annual deductible or paid any out of pocket or co-payment
expenses under the applicable plan
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of the Company, such individual shall be credited therefor under the
corresponding plan of National City or Surviving Corporation in which such
individual participates after the Effective Time.
(c) TRANSITION. Upon and after the Merger, Company Employees shall
have benefits that in the aggregate are comparable to the benefits enjoyed
generally by National City employees working in similar business lines.
(d) GENERAL. Notwithstanding anything to the contrary contained in
this Agreement, Company and National City shall take all actions necessary
to enact the items set forth on Schedule 5.4 of the Company Disclosure
Letter, and Schedule 5.4 of the Company Disclosure Letter shall be deemed
incorporated into this Section 5.4(d)
5.5 Access and Information. Upon reasonable notice, each of the parties
shall (and shall cause each of the parties' subsidiaries to) afford to the other
parties and their representatives (including, without limitation, directors,
officers and employees of the parties and their affiliates, and counsel,
accountants and other professionals retained) such access during normal business
hours throughout the period prior to the Effective Time to the books, records
(including, without limitation, tax returns and work papers of independent
auditors), properties, personnel and to such other information as any party may
reasonably request; provided, however, that no party shall be required to
provide access to any such information if the providing of such access (i) would
be reasonably likely, in the written opinion of counsel, to result in the loss
or impairment of any privilege generally recognized under law with respect to
such information or (ii) would be precluded by any law, ordinance, regulation,
judgment, order, decree, license or permit of any Governmental Entity. All
information furnished by one party to any of the others in connection with this
Agreement or the transactions contemplated hereby shall be kept confidential by
such other party (and shall be used by it only in connection with this Agreement
and the transactions contemplated hereby) except to the extent that such
information (i) already is known to such other party when received from a source
not known by the receiving party to be under an obligation of confidentiality,
(ii) thereafter becomes lawfully obtainable from other sources or (iii) is
required to be disclosed in any non-confidential document filed with the
Commission, the FRB, the Department of Justice or any other agency or any
government. In the event that the transactions contemplated by this Agreement
shall fail to consummate, each party shall promptly cause all copies of
documents or extracts thereof containing information and data as to another
party hereto to be returned to the party which furnished the same or destroyed.
5.6 Certain Filings, Consents and Arrangements. National City and Company
shall (a) as soon as practicable make any required filings and applications
required to be filed with Governmental Authorities between the date of this
Agreement and the Effective Time, (b) cooperate with one another (i) in promptly
determining whether any other filings are required to be made or consents,
approvals, permits or authorizations are required to be obtained under any other
relevant federal, state or foreign law or regulation and (ii) in promptly making
any such filings, furnishing information required in connection therewith and
seeking timely to obtain any such consents, approvals, permits or authorizations
and (c) deliver to the other parties to this Agreement copies of the publicly
available portions of all such reports promptly after they are filed.
5.7 State Takeover Statutes. Company shall take all reasonable steps to
(i) exempt Company and the Merger from the requirements of any state takeover
law by action of the Company's Board of Directors or otherwise and (ii), upon
the request of National City, assist in any challenge by National City to the
applicability to the Merger of any state takeover law.
5.8 Indemnification and Insurance.
(a) INDEMNIFICATION. From and after the Effective Time, National City
will assume and honor any obligation as provided for and permitted by
applicable federal and state law Company had immediately prior to the
Effective Time with respect to the indemnification of each person who is
now, or has been at any time
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prior to the date hereof or who becomes prior to the Effective Time, a
director or officer of Company or any Company Subsidiary or was serving at
the request of Company as a director, officer of any domestic or foreign
corporation joint venture, trust, employee benefit plan or other enterprise
(collectively, the "Indemnitees") arising out of Company's 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
act or omission occurring at or prior to the Effective Time, including any
actions taken to approve and implement this Agreement and the transactions
contemplated hereby, in the Indemnitee's capacity as a director or officer
(whether elected or appointed), of Company or any Company Subsidiary. This
Section 5.8 will be construed as an agreement, as to which the Indemnities
are intended to be third-party beneficiaries.
(b) INSURANCE. For a period of four years after the Effective Time,
National City shall use all reasonable efforts to maintain in effect
current directors' and officers' liability insurance in an aggregate limit
at least equal to the aggregate limit of Company's insurance that is in
place on the date of this Agreement, which will insure Company's directors
and officers for events which occurred prior to the Effective Time but were
undiscovered at the Effective Time provided, however, that in no event
shall National City be obligated to expend, in order to maintain or provide
insurance coverage pursuant to this Subsection 5.8(b), any amount per annum
in excess of 100% of the amount of the annual premium paid as of the date
hereof by National City for its current director's and officers' liability
insurance.
5.9 Additional Agreements. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its reasonable efforts to
take promptly, or cause to be taken promptly, all actions and to do promptly, or
cause to be done promptly, all things necessary, proper or advisable under
applicable laws and regulations to consummate and make effective as promptly as
practicable the transactions contemplated by this Agreement, including using its
best efforts to obtain all necessary actions or non-actions, extensions,
waivers, consents and approvals from all applicable Governmental Entities,
effecting all necessary registrations, applications and filings (including,
without limitation, filings under any applicable state securities laws) and
obtaining any required contractual consents and regulatory approvals.
5.10 Publicity. The initial press release announcing this Agreement shall
be a joint press release and thereafter Company and National City shall consult
with each other in issuing any press releases or otherwise making public
statements with respect to the transactions contemplated hereby and in making
any filings with any Governmental Entity or with any national securities
exchange with respect thereto.
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 and National City
Preferred Stock pursuant to the Merger, and Company shall furnish National City
all information concerning Company and the holders of its capital stock and
shall take any action as National City may reasonably request in connection with
any such action.
5.12 Stock Exchange Listings. National City shall use its best efforts to
list on the New York Stock Exchange, upon official notice of issuance, the
National City Common Stock to be issued pursuant to the Merger.
5.13 Proxy. As soon as practicable after the date hereof, Company and
National City shall prepare the Proxy Statement, file it with the Commission,
respond to comments of the Staff of the Commission, clear the Proxy Statement
with the Staff of the Commission and promptly thereafter mail the Proxy
Statement to all holders
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of shares of Company Common Stock. National City and Company shall cooperate
with each other in the preparation of the Proxy Statement.
5.14 Shareholders' Meeting. Company shall take all action necessary, in
accordance with applicable law and its Articles of Incorporation and By-laws, to
convene a special meeting of the holders of Company Common Stock (the "Company
Meeting") as promptly as practicable for the purpose of considering and taking
action upon this Agreement. Unless the Board of Directors of Company shall have
received the written advice of counsel, reasonably acceptable to National City,
to the effect that making such a recommendation would cause the Board of
Directors of Company to violate its fiduciary duty under applicable law and
provided that such advice is not predicated solely upon the price of National
City Common Stock, the Board of Directors of Company shall recommend that the
holders of the Company Common Stock vote in favor of and approve the Merger and
adopt this Agreement at the Company Meeting.
5.15 Tax-Free Reorganization Treatment. Neither National City nor Company
shall intentionally take or cause to be taken any action, whether before or
after the Effective Time, which would disqualify the Merger as a
"reorganization" within the meaning of Section 368 of the Code.
5.16 Provision of Shares. National City shall issue and provide the shares
of National City Common Stock and National City Preferred Stock deliverable upon
the conversion of the Company Common Stock and Series 1 Stock, respectively,
pursuant to this Agreement, and will provide the cash to be paid in lieu of
fractional shares of National City Common Stock as provided in Subsection
2.3(f). The shares of National City Common Stock and National City Preferred
Stock to be issued and exchanged for shares of Company Common Stock pursuant to
this Agreement will, at the Effective Time, be duly authorized, validly issued,
fully paid and nonassessable and subject to no preemptive rights.
5.17 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 in any material respect, (b) any
of the conditions to the Merger set forth in Article VII not being satisfied or
(c) a material violation of any provision of the Agreement except, in each case,
as may be required by applicable law.
VI. CLOSING MATTERS
6.1 The Closing. Subject to satisfaction or waiver of all conditions
precedent set forth in Article VII of this Agreement, the closing ("Closing")
shall occur at such location mutually agreeable to the parties and on a date
("Closing Date") which is on (1) the third business day after the later of:
(a) the first date on which the Merger may be consummated in
accordance with the approvals of any Governmental Entities or
(b) the date the required approvals of Company's shareholders have
been obtained or
(2) such other date to which the parties agree in writing.
If all conditions are determined to be satisfied in all material respects
(or are duly waived) at the Closing, the Closing shall be consummated by the
making of all necessary filings required by all Governmental Entities.
6.2 Documents and Certificates. National City and Company shall use their
respective best efforts, on or prior to Closing, to execute and deliver all such
instruments, documents or certificates as may be necessary or advisable, on the
advice of counsel, for the consummation at the Closing of the transactions
contemplated by this Agreement to occur as soon as practicable.
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VII. CONDITIONS
7.1 Conditions to Each Party's Obligations to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment at or prior to the Effective Time of the following conditions:
(a) The Merger shall have been approved and adopted by the requisite
vote of the holders of Company Common Stock.
(b) The National City Common Stock issuable in the Merger shall have
been authorized for listing on the New York Stock Exchange, upon official
notice of issuance.
(c) All authorizations, consents, orders or approvals of, and all
expirations of waiting periods imposed by, any Governmental Entity
(collectively, "Consents") which are necessary for the consummation of the
Merger, (other than immaterial Consents, the failure to obtain which would
not have a Material Adverse Effect) 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 material
conditions or requirements which would so adversely impact the economic or
business benefits of the transactions contemplated by this Agreement so as
to render inadvisable in the reasonable opinion of the Board of Directors
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) Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇ counsel to Company, shall have
delivered to Company and National City their opinion, dated the day of the
Effective Time, substantially to the effect that, on the basis of facts,
representations and assumptions set forth in such opinion which are
consistent with the state of facts existing at the Effective Time, the
Merger will be treated for federal income tax purposes as a reorganization
within the meaning of Section 368(a) of the Code and that, accordingly: (i)
no gain or loss will be recognized by National City or Company as a result
of the Merger; (ii) no gain or loss will be recognized by the shareholders
of Company who exchange their shares of the Company Common Stock or Company
Series 1 Stock solely for shares of National City Common Stock or National
City Preferred Stock, respectively pursuant to the Merger (except with
respect to cash received in lieu of a fractional share interest in National
City Common Stock); (iii) the aggregate tax basis of the shares of National
City Common Stock and National City Preferred Stock received by
shareholders who exchange all of their shares of Company Common Stock and
Company Series 1 Stock solely for shares of National City Common Stock and
National City Preferred Stock in the Merger will be the same as the
aggregate tax basis of the shares of Company Common Stock and Company
Series 1 Stock surrendered in exchange therefor (reduced by any amount
allocable to a fractional share interest for which cash is received); and
(iv) the holding period of the shares of National City Common Stock or
National City Preferred Stock received in the Merger will include the
period during which the shares of Company Common Stock or Company Series 1
Stock, respectively surrendered in exchange therefor were held, provided
such shares of Company Common Stock or Company Series 1 Stock were held as
capital assets at the Effective Time. In rendering such opinion, counsel
may require and rely upon representations contained in certificates of
officers of Company, National City, and others.
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7.2 Conditions to Obligation of Company to Effect the Merger. The
obligation of Company to effect the Merger shall be subject to the fulfillment
or waiver at or prior to the Effective Time of the additional following
conditions:
(a) National City shall have performed in all material respects its
covenants contained in this Agreement required to be performed at or prior
to the Effective Time.
(b) The representations and warranties of National City contained in
this Agreement shall be true and correct when made and the representations
and warranties set forth in Article 3 shall be true and correct as of the
Effective Time as if made at and as of such time, except as expressly
contemplated or permitted by this Agreement, except for representations and
warranties relating to a time or times other than the Effective Time which
were or will be true and correct at such time or times and except where the
failure or failures of such representations and warranties to be so true
and correct, individually or in the aggregate, does not result or would not
result in a Material Adverse Effect.
(c) National City shall have furnished Company a Certificate dated the
date of the Closing, signed by the Chief Executive Officer and Chief
Financial Officer of National City that, to the best of their knowledge and
belief after due inquiry, the conditions set forth in Subsections 7.2(a)
and 7.2(b) have been satisfied.
7.3 Conditions to Obligation of National City to Effect the Merger. The
obligation of National City to effect the Merger shall be subject to the
fulfillment or waiver at or prior to the Effective Time of the additional
following conditions:
(a) Company shall have performed in all material respects its
covenants contained in this Agreement required to be performed at or prior
to the Effective Time.
(b) The representations and warranties of Company contained in this
Agreement shall be true and correct when made and the representations and
warranties set forth in Article 4 shall be true and correct as of the
Effective Time as if made on and as of such time, except as expressly
contemplated or permitted by this Agreement, except for representations and
warranties relating to a time or times other than the Effective Time which
were or will be true and correct at such time or times and except where the
failure or failures of such representations and warranties to be so true
and correct, individually or in the aggregate, does not result or would not
result in a Material Adverse Effect.
(c) Company shall have furnished National City a Certificate dated the
date of the Closing signed by the Chief Executive Officer and Chief
Financial Officer of Company that, to the best of their knowledge and
belief after due inquiry, the conditions set forth in subsections 7.3(a)
and 7.3(b) have been satisfied.
VIII. MISCELLANEOUS
8.1 Termination. This Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval by the shareholders of Company:
(a) by mutual consent of the Board of Directors of National City and
the Board of Directors of Company;
(b) by either National City or Company if the Merger shall not have
been consummated on or before June 30, 1998 or if this Agreement was not
approved at the Company Meeting (provided the terminating party is not
otherwise in material breach of its obligations under this Agreement);
(c) by Company if any of the conditions specified in Sections 7.1 and
7.2 have not been met or waived by Company at such time as such condition
can no longer be satisfied;
(d) by National City if any of the conditions specified in Sections
7.1 and 7.3 have not been met or waived by National City at such time as
such condition can no longer be satisfied;
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(e) by Company, during the 15-day period commencing on the Fed
Approval Date, if both of the following conditions are satisfied:
(i) the average of the daily closing prices on the New York Stock
Exchange of a share of National City Common Stock for the 20 consecutive
trading days ending at the end of the third trading day immediately
preceding the Fed Approval is less than $47.40; and
(ii) the number obtained by dividing the average of the daily
closing prices on the New York Stock Exchange of a share of National
City Common Stock for the 20 consecutive trading days ending at the end
of the third trading day immediately preceding the Fed Approval Date by
the closing price of National City Common Stock on the trading day
immediately preceding the public announcement of this Agreement is less
than the number obtained by dividing the Final Index Price (as defined
below) by the Initial Index Price (as defined below) and subtracting .20
from the quotient.
For purposes of this Subsection 8.1(e):
The "Index Group" shall mean all those companies listed in the
National City Disclosure Letter the common stock of which is publicly
traded and as to which there has not been a publicly announced proposal
at any time for such company to be acquired. In the event that any such
company or companies are so removed from the Index Group, the weights
attributed to the remaining companies shall be adjusted proportionately
for purposes of determining both the Initial Index Price and the Final
Index Price;
The "Initial Index Price" shall mean the weighted average (weighted
in accordance with the factors listed in the National City Disclosure
Letter) of the closing prices on the trading day immediately preceding
the public announcement of this Agreement of the common stock of the
companies comprising the Index Group;
The "Final Price" of any company belonging to the Index Group shall
mean the average of the daily closing sale prices of a share of the
common stock of such company, as reported in the consolidated
transaction reporting system for the market or exchange on which such
common stock is principally traded, during the period of 20 consecutive
trading days ending at the end of the third trading day immediately
preceding the Fed Approval Date; and
The "Final Index Price" shall mean the weighted average (weighted
in accordance with the factors listed in the National City Disclosure
Letter) of the Final Prices for all of the companies comprising the
Index Group.
If National City or any company belonging to the Index Group declares
a stock dividend or effects a reclassification, recapitalization, split-up,
combination, exchange or shares or similar transaction between the date of
this Agreement and the Fed Approval Date, the closing prices for the common
stock of such company shall be appropriately adjusted for the purposes of
the definitions above so as to be comparable to the price on the date of
this Agreement.
8.2 Non-Survival of Representations, Warranties and Agreements. The
representations and warranties or covenants in this Agreement will terminate at
the Effective Time or the earlier termination of this Agreement pursuant to
Section 8.1, as the case may be; provided, however, that if the Merger is
consummated, Sections 1.6, 2.1 through 2.4, 5.4, 5.5, 5.8, 5.16, 5.17 and 8.2
hereof will survive the Effective Time to the extent contemplated by such
Sections; provided, further, that the last sentence of Section 5.5 and all of
Section 8.10 hereof will in all events survive any termination of this
Agreement.
8.3 Waiver and Amendment. Subject to applicable provisions of the DGCL and
IC, 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
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amendment will be made after any stockholder or shareholder approval of the
Merger which reduces or changes the form of the Merger Consideration without
further stockholder or shareholder approval. No such waiver, amendment or
supplement will be effective unless in a writing which makes express reference
to this Section 8.3 and is signed by the party or parties sought to be bound
thereby.
8.4 Entire Agreement. This Agreement together with the Option Agreement
and the Confidentiality Agreement by and between National City and the Company
dated December 30, 1997 contain the entire agreement among National City and
Company with respect to the Merger and the other transactions contemplated
hereby and thereby, and supersedes all prior agreements among the parties with
respect to such matters.
8.5 Applicable Law; Consent to Jurisdiction. This Agreement will be
governed by and construed in accordance with the laws of the State of Indiana
except to the extent laws of the state of Delaware govern the Merger. National
City and Company consent to personal jurisdiction in any action brought in any
federal or state court within the State of Indiana having subject matter
jurisdiction in the matter for purposes of any action arising out of this
Agreement.
8.6 Certain Definitions; Headlines. (a) For purposes of this Agreement,
the term:
(i) "affiliate", "associate" and "significant subsidiary" shall have
the respective meanings ascribed to such terms in Rule 12b-2 of the General
Rules and Regulations under the Exchange Act, as in effect on the date
hereof.
(ii) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the
management or policies of a person, whether through the ownership of stock,
as trustee or executor, by contract or credit arrangement or otherwise;
(iii) "Fed Approval Date" means the day the FRB issues an order
approving consummation of the Merger.
(iv) "Market Price" means the average of the per share closing prices
on the New York Stock Exchange of National City Common Stock for the 20
consecutive trading days ending at the end of the third trading day
immediately preceding the Effective Time.
(v) "Material Adverse Effect" means an event, change or occurrence
which has a material negative impact on the financial condition, businesses
or results of operations of Company and its subsidiaries, taken as a whole,
or National City and its subsidiaries, taken as a whole, as the case may
be, or the ability of Company or National City, as the case may be, to
consummate the transactions contemplated hereby. The effect of any action
taken by Company solely pursuant to Subsection 5.2(f) shall not be taken
into consideration in determining whether any Material Adverse Effect has
occurred.
(vi) "person" means an individual, corporation, partnership,
association, trust or unincorporated organization; and
(vii) "subsidiary" of Company, National City or any other person
means, except where the context otherwise requires, any corporation,
partnership, trust or similar association of which Company, National City
or any other person, as the case may be (either alone or through or
together with any other subsidiary), owns, directly or indirectly, more
than 50% of the stock or other equity interests, the holders of which are
generally entitled to vote for the election of the board of directors or
other governing body of such corporation.
(b) The descriptive headings contained in this Agreement are for
convenience and reference only and will not affect in any way the meaning or
interpretation of this Agreement.
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(c) Unless the context of this Agreement expressly indicates otherwise, (i)
any singular term in this Agreement will include the plural and any plural term
will include the singular and (ii) the term section or schedule will mean a
section or schedule of or to this Agreement.
8.7 Notices. All notices, consents, requests, demands and other
communications hereunder will be in writing and will be deemed to have been duly
given or delivered if delivered personally, telexed with receipt acknowledged,
mailed by registered or certified mail return receipt requested, sent by
facsimile with confirmation of receipt, or delivered by a recognized commercial
courier addressed as follows:
If to Company to:
Fort ▇▇▇▇▇ National Corporation
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
attn: Chief Executive Officer
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
With copies to:
Wachtell, Lipton, ▇▇▇▇▇ & ▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
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.
8.8 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original but all of which
together will constitute but one agreement.
8.9 Parties in Interest; Assignment. Except for Section 2.2, (which is
intended to be for the benefit of the holders of Outstanding Options under the
Company Option Plans to the extent contemplated thereby and their beneficiaries,
and may be enforced by such persons) and Sections 5.4 and 5.8 hereof (which are
intended to be for the benefit of directors, officers or employees to the extent
contemplated thereby and their beneficiaries, and may be enforced by such
persons), this Agreement is not intended to nor will it confer upon any other
person (other than the parties hereto) any rights or remedies. Without the prior
written consent of the other parties to this Agreement neither National City nor
Company shall assign any rights or delegate any obligations under this
Agreement. Any such purported assignment or delegation made without prior
consent of the other parties hereto shall be null and void.
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8.10 Expenses. Each party will bear all expenses incurred by it in
connection with this Agreement and the transactions contemplated hereby, except
that printing expenses and Commission filing and registration fees shall be
shared equally between Company and National City.
8.11 Enforcement of the Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties hereto will be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
8.12 Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement will nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party hereto. Upon any such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto will
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated by this Agreement are consummated to the
extent possible.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
representatives to execute this Agreement as of the date first above written.
FORT ▇▇▇▇▇ NATIONAL CORPORATION
By: /s/ M. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
--------------------------------------
M. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Chairman of the Board and
Chief Executive Officer
NATIONAL CITY CORPORATION
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Vice Chairman
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INDEX TO DEFINITIONS
DEFINITIONS SECTIONS
---------------------------------------------------------------------- -----------------
Acquisition Transaction Section 5.1
affiliate Section 8.6(i)
Agreement Introduction
Articles of Merger Section 1.2
Benefit Agreements Section 3.10
BHCA Section 3.1
Certificate Section 2.3(a)
Closing Section 6.1
Closing Date Section 6.1
Commission Section 3.5
Company Introduction
Company Common Stock Section 2.1(a)
Company Contracts Section 4.10
Company Disclosure Letter Section 4.3
Company Employees Section 5.4(b)
Company Employee Plans Section 4.9
Company Meeting Section 5.15(a)
Company Option Plans Section 2.2
Company Reports Section 4.7
Company Subsidiaries Section 4.4
Code Introduction
Consents Section 7.1(c)
Constituent Corporations Section 1.2
Control Section 8.6(ii)
Conversation Ratio Section 2.1(a)
Certificate of Merger Section 1.2
DGCL Section 1.1
DPC Common Shares Section 2.1(a)
Effective Time Section 1.2
Environmental Law Section 3.21
ERISA Section 3.9
Exchange Act Section 3.5
Exchange Agent Section 2.3(a)
FDIA Section 3.14
Fed Approval Date Section 8.6(iii)
Final Index Price Section 8.1(c)
Final Price Section 8.1(e)
FRB Section 3.6
Governmental Entity Section 3.6
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DEFINITIONS SECTIONS
---------------------------------------------------------------------- -----------------
Hazardous Substance Section 3.21
HSR Act Section 3.6
IC Section 1.1
Indemnitees Section 5.8
Index Group Section 8.1(e)
Initial Indies Price Section 8.1(e)
IRS Section 3.9
Loan Portfolio Properties and Other Properties Owned Section 3.21
Market Price Section 2.3(g)
Material Adverse Effect Section 3.1
Merger Section 1.1
Common Merger Consideration Section 2.1(a)
National City Introduction
National City Common Stock Section 2.1(a)
National City Contracts Section 3.10
National City Disclosure Letter Section 1.4
National City Employee Plans Section 3.9
National City Meeting Section 5.15(b)
National City Preferred Stock Section 3.3
National City Reports Section 3.7
Option Agreement Introduction
OTS Section 3.6
PBGC Section 3.9
PCBs Section 3.21
Person Section 8.6(vi)
Plan of Merger Section 1.2
Proxy Statement Section 3.5
Registration Statement Section 3.5
SBIA Section 3.6
Securities Act Section 3.5
Significant Subsidiaries Section 3.4
State Entities Section 3.6
Subsidiary Section 8.6(i)
Surviving Corporation Section 1.3
Trust Account Common Shares Section 2.1(a)
Unexercised Options Section 2.2
ii