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Exhibit 2.1
AGREEMENT AND PLAN OF MERGER
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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 2
1.3 Effect of Merger 2
1.4 Certificate of Incorporation and By-laws 2
1.5 Directors and Officers of Surviving Corporation 3
1.6 Additional Actions 3
II. CONVERSION OF SHARES
2.1 Conversion of Shares 4
2.2 Assumption of Employee Stock Options 4
2.3 Exchange of Certificates 5
(a) Exchange Agent 5
(b) Notice of Exchange 5
(c) Transfer 6
(d) Right to Merger Consideration 6
(e) Distribution with Respect to Unexchanged
Certificates 7
(f) Lost or Destroyed Exchanged Certificates 7
(g) Voting With Respect to Unexchanged Certificates 8
(h) No Fractional Shares 8
2.4 Closing of the Company's Transfer Books 8
2.5 Changes in National City Common Stock 8
PAGE
III. REPRESENTATIONS AND WARRANTIES OF NATIONAL CITY
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3.1 Corporate Organization 9
3.2 Authority 9
3.3 Capitalization 9
3.4 Subsidiaries 10
3.5 Information in Disclosure Documents,
Registration Statement, Etc. 11
3.6 Consents and Approvals; No Violation 11
3.7 Reports and Financial Statements 12
3.8 Taxes 13
3.9 Employee Plans 14
3.10 Material Contracts 16
3.11 Absence of Certain Changes or Events 16
3.12 Litigation 16
3.13 Compliance with Laws and Orders 17
3.14 Agreements with Bank Regulators, Etc. 17
3.15 National City Ownership of Stock 18
3.16 Tax Treatment 18
3.17 Fees 18
3.18 National City Action 18
3.19 Vote Required 18
3.20 Material Interests of Certain Persons 19
3.21 Environmental Matters 19
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PAGE
IV. REPRESENTATIONS AND WARRANTIES OF COMPANY
4.1 Corporate Organization 21
4.2 Authority 21
4.3 Capitalization 22
4.4 Subsidiaries 22
4.5 Information in Disclosure Documents,
Registration Statement, Etc. 23
4.6 Consent and Approvals; No Violation 23
4.7 Reports and Financial Statements 24
4.8 Taxes 25
4.9 Employee Plans 25
4.10 Material Contracts 27
4.11 Absence of Certain Changes or Events 28
4.12 Litigation 28
4.13 Compliance with Laws and Orders 28
4.14 Agreements with Bank Regulators, Etc. 29
4.15 Tax Treatment 29
4.16 Fees 29
4.17 Company Action 29
4.18 Vote Required 30
4.19 Material Interests of Certain Persons 30
4.20 Environmental Matters 30
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PAGE
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V. COVENANTS
5.1 Acquisition Proposals 31
5.2 Interim Operations of Company 31
(a) Conduct of Business 32
(b) Articles and By-laws 32
(c) Capital Stock 32
(d) Dividends 33
(e) Employee Plans, Compensation, Etc. 33
(f) Certain Policies 33
5.3 Interim Operations of National City 34
5.4 Employee Matters 34
(a) Benefit Agreements 34
(b) Retirement and Benefit Plans 34
(c) Transition 34
(d) General 34
5.5 Access and Information 34
5.6 Certain Filings, Consents and Arrangements 35
5.7 State Takeover Statutes 35
5.8 Indemnification and Insurance 35
(a) Indemnification 36
(b) Insurance 36
5.9 Additional Agreements 36
5.10 Publicity 36
5.11 Registration Statement 37
5.12 Stock Exchange Listings 38
5.13 Proxy 38
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PAGE
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5.14 Shareholders' Meeting 38
5.15 Tax-Free Reorganization Treatment 39
5.16 Provision of Shares 39
5.17 Adverse Action 39
VI. CLOSING MATTERS
6.1 The Closing 39
6.2 Documents and Certificates 40
VII. CONDITIONS
7.1 Conditions to Each Party's Obligations to Effect the Merger 40
7.2 Conditions to Obligation of Company to Effect the Merger 41
7.3 Conditions to Obligation of National City to Effect the Merger 42
VIII. MISCELLANEOUS
8.1 Termination 43
8.2 Non-Survival of Representations, Warranties and Agreements 44
8.3 Waiver and Amendment 45
8.4 Entire Agreement 45
8.5 Applicable Law; Consent to Jurisdiction 45
8.6 Certain Definitions; Headlines 45
8.7 Notices 46
8.8 Counterparts 47
8.9 Parties in Interest; Assignment 48
8.10 Expenses 48
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8.11 Enforcement of the Agreement 48
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8.12 Severability 48
Signatures 49
Index to Definitions
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INDEX TO DEFINITIONS
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DEFINITIONS SECTIONS
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Acquisition Transaction Section 5.1
affiliate Section 8.6(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
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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
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
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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
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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
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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
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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").
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 OFFICER 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
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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
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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
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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 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 ▇▇▇▇▇
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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 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
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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
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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 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
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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
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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.
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.
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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
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and all of the shares of National City Common Stock issuable upon exercise of
Unexercised Options will be, when so issued, duly authorized, validly issued,
fully paid and nonassessable and will not be subject to preemptive rights.
3.4 SUBSIDIARIES. The name and state of incorporation of each
significant subsidiary (as defined in Paragraph 8.6(i) hereof) of National City
(collectively, the "Significant Subsidiaries") is set forth in the National City
Disclosure Letter. Each of the Significant Subsidiaries is a bank or a
corporation duly organized, validly existing and in good standing under the laws
of its respective jurisdiction of incorporation or organization and is duly
qualified to do business as a 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
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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, 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
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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.
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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 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
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(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
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currently does provide funding for benefits under any National City Employee
Plan, (A) there is no liability on the part of National City or any of its
subsidiaries in the nature of a retroactive or retrospective rate adjustment,
loss sharing arrangement, or other actual or contingent liability, nor would
there be any such liability if such insurance policy was terminated, and (B) no
insurance company issuing such policy is in receivership, conservatorship,
liquidation or similar proceeding and, to the knowledge of National City, no
such proceeding with respect to any such insurer is imminent. Except as set
forth in the National City Disclosure Letter, neither the execution of this
Agreement, nor the consummation of the transactions contemplated thereby will
(A) constitute a stated triggering event under any National City Employee Plan
that will result in any payment (whether of severance pay or otherwise) becoming
due from National City or any of its subsidiaries to any present or former
officer, employee, director, shareholder, consultant or dependent of any of the
foregoing or (B) accelerate the time of payment or vesting, or increase the
amount of compensation due to any present or former officer, employee, director,
shareholder, consultant, or dependent of any of the foregoing. Neither National
City nor any of its subsidiaries has any obligations for retiree health and life
benefits under any National City Employee Plan, except as set forth in the
National City Disclosure Letter. There are no restrictions on the rights of
National City or its subsidiaries to amend or terminate any such National City
Employee Plan without incurring any liability thereunder.
3.10 MATERIAL CONTRACTS. Except as set forth in the National City
Disclosure Letter or disclosed in the National City Reports, neither National
City nor any of its subsidiaries is a party to, or is bound or affected by, or
receives benefits under (a) any employment, severance, 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
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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 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
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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
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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 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
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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
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Other Properties of National City or its subsidiaries is in violation
of or has any liability, absolute or contingent, under any
Environmental Law, except any such violations or liabilities which,
individually or in the aggregate would not have a Material Adverse
Effect; and (iii) to the best of National City's knowledge, there are
no actions, suits, demands, notices, claims, investigations or
proceedings pending or threatened relating to any Loan Portfolio
Properties, Trust Properties and Other Properties including, without
limitation any notices, demand letters or requests for information from
any federal or state environmental agency relating to any such
liability under or violation of Environmental Law, which would impose a
liability upon National City or its subsidiaries pursuant to any
Environmental Law, except such as would not, individually or in the
aggregate have a Material Adverse Effect.
IV. REPRESENTATIONS AND WARRANTIES OF COMPANY
Company hereby represents and warrants to National City that:
4.1 CORPORATE ORGANIZATION. Company is a corporation duly organized,
validly existing and in good standing under the laws of the State of 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
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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.
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
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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)
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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 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
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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
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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 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
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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
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ordinary course of business) or (c) any other contract or agreement or amendment
thereto that would be required to be filed as an exhibit to a Form 10-K filed by
Company with the Commission as of the date of this Agreement (collectively, the
"Company Contracts"). Neither Company nor any Company Subsidiary is in default
under any Company Contract, which default is reasonably likely to have, either
individually or in the aggregate, a Material Adverse Effect, and there has not
occurred any event that with the lapse of time or the giving of notice or both
would constitute such a default. Except as set forth in the Company Disclosure
Letter, neither Company nor any of Company Subsidiary is a party to, or is bound
by, any collective bargaining agreement, contract, or other agreement or
understanding with a labor union or labor organization, nor is Company or any
Company Subsidiary the subject of a proceeding asserting 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
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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.
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
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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
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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 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
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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
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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 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
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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 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.
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(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)
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cooperate with one another (i) in promptly determining whether any other filings
are required to be made or consents, approvals, permits or authorizations are
required to be obtained under any other relevant federal, state or foreign law
or regulation and (ii) in promptly making any such filings, furnishing
information required in connection therewith and seeking timely to obtain any
such consents, approvals, permits or authorizations and (c) deliver to the other
parties to this Agreement copies of the publicly available portions of all such
reports promptly after they are filed.
5.7 STATE TAKEOVER STATUTES. Company shall take all reasonable steps to
(i) exempt Company and the Merger from the requirements of any state takeover
law by action of the Company's Board of Directors or otherwise and (ii), upon
the request of National City, assist in any challenge by National City to the
applicability to the Merger of any state takeover law.
5.8 INDEMNIFICATION AND INSURANCE
(a) INDEMNIFICATION. From and after the Effective Time,
National City will assume and honor any obligation as provided for and
permitted by applicable federal and state law Company had immediately
prior to the Effective Time with respect to the indemnification of each
person who is now, or has been at any time prior to the date hereof or
who becomes prior to the Effective Time, a director or officer of
Company or any Company Subsidiary or was serving at the request of
Company as a director, officer of any domestic or foreign corporation
joint venture, trust, employee benefit plan or other 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 Indemnitees 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
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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.
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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 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.
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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.
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.
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(b) The National City Common Stock issuable in the Merger shall
have been authorized for listing on the New York Stock Exchange, upon
official notice of issuance.
(c) All authorizations, consents, orders or approvals of, and
all expirations of waiting periods imposed by, any Governmental Entity
(collectively, "Consents") which are necessary for the consummation of
the Merger, (other than immaterial Consents, the failure to obtain
which would not 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
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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.
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:
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(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;
(e) by Company, during the 15-day period commencing on the Fed
Approval Date, if both of the following conditions are satisfied:
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(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.
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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 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:
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(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.
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(b) The descriptive headings contained in this Agreement are
for convenience and reference only and will not affect in any way the
meaning or interpretation of this Agreement.
(c) Unless the context of this Agreement expressly indicates
otherwise, (i) any singular term in this Agreement will include the
plural and any plural term will include the singular and (ii) the term
section or schedule will mean a section or schedule of or to this
Agreement.
8.7 NOTICES. All notices, consents, requests, demands and other
communications hereunder will be in writing and will be deemed to have been duly
given or delivered if delivered personally, telexed with receipt acknowledged,
mailed by registered or certified mail return receipt requested, sent by
facsimile with confirmation of receipt, or delivered by a recognized commercial
courier addressed as follows:
If to Company to:
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. (▇▇▇) ▇▇▇-▇▇▇▇
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or to such other address as any party may have furnished to the other parties in
writing in accordance with this Section 8.7.
8.8 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original but all of which
together will constitute but one agreement.
8.9 PARTIES IN INTEREST; ASSIGNMENT. Except for Section 2.2, (which is
intended to be for the benefit of the holders of Outstanding Options under the
Company Option Plans to the extent contemplated thereby and their beneficiaries,
and may be enforced by such persons) and Sections 5.4 and 5.8 hereof (which are
intended to be for the benefit of directors, officers or employees to the extent
contemplated thereby and their beneficiaries, and may be enforced by such
persons), this Agreement is not intended to nor will it confer upon any other
person (other than the parties hereto) any rights or remedies. Without the prior
written consent of the other parties to this Agreement neither National City nor
Company shall assign any rights or delegate any obligations under this
Agreement. Any such purported assignment or delegation made without prior
consent of the other parties hereto shall be null and void.
8.10 EXPENSES. Each party will bear all expenses incurred by it in
connection with this Agreement and the transactions contemplated hereby, except
that printing expenses and 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
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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:
--------------------------------------
M. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Chairman of the Board and
Chief Executive Officer
NATIONAL CITY CORPORATION
By:
--------------------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇
Vice Chairman
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