Exhibit 2
AGREEMENT AND PLAN OF MERGER
dated as of
November 1, 2001
by and between
FIRST CITIZENS BANC CORP.
and
INDEPENDENT COMMUNITY BANC CORP.
TABLE OF CONTENTS
PAGE
RECITALS..........................................................................................................1
ARTICLE I - CERTAIN DEFINITIONS...................................................................................1
1.01 Certain Definitions.................................................................................1
ARTICLE II - THE MERGER...........................................................................................7
2.01 The Parent Merger...................................................................................7
2.02 The Subsidiary Merger...............................................................................7
2.03 Effectiveness of Parent Merger......................................................................7
2.04 Effective Date and Effective Time...................................................................7
ARTICLE III - CONSIDERATION; EXCHANGE PROCEDURES..................................................................8
3.01 Merger Consideration................................................................................8
3.02 Rights as Shareholders; Share Transfers.............................................................8
3.03 Fractional Shares...................................................................................8
3.04 Exchange Procedures.................................................................................9
3.05 Anti-Dilution Provisions; Other Adjustments........................................................10
ARTICLE IV - ACTIONS PENDING CONSUMMATION OF MERGER..............................................................10
4.01 Forbearances of ICBC...............................................................................10
4.02 Forbearances of First Citizens.....................................................................12
ARTICLE V - REPRESENTATIONS AND WARRANTIES.......................................................................13
5.01 Disclosure Schedules...............................................................................13
5.02 Standard...........................................................................................14
5.03 Representations and Warranties of ICBC.............................................................14
5.04 Representations and Warranties of First Citizens...................................................26
ARTICLE VI - COVENANTS...........................................................................................31
6.01 Reasonable Best Efforts............................................................................31
6.02 Shareholder Approvals..............................................................................31
6.03 Registration Statement.............................................................................32
6.04 Press Releases.....................................................................................33
6.05 Access; Information................................................................................33
6.06 Acquisition Proposals; Break Up Fee................................................................34
6.07 Affiliate Agreements...............................................................................34
6.08 Certain Policies...................................................................................35
6.09 NASDAQ Listing.....................................................................................35
6.10 Regulatory Applications............................................................................35
6.11 Employment Matters; Employee Benefits..............................................................36
6.12 Notification of Certain Matters....................................................................36
6.13 Dividend Coordination..............................................................................36
6.14 Accounting and Tax Treatment.......................................................................36
6.15 No Breaches of Representations and Warranties......................................................36
6.16 Consents...........................................................................................36
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6.17 Insurance Coverage.................................................................................37
6.18 Correction of Information..........................................................................37
6.19 Confidentiality....................................................................................37
6.20 Supplemental Assurances............................................................................37
6.21 Regulatory Matters.................................................................................38
6.22 Employment Agreements and Retention Arrangements...................................................38
6.23 Financial Statements...............................................................................38
6.24 First Citizens Board of Directors Structure Following the Parent Merger............................38
6.25 First Citizens Bank Board of Directors Following the Subsidiary Merger.............................38
6.26 Establishment of Bank Community Board..............................................................38
6.27 Bank Signage.......................................................................................38
6.28 Voting Agreements..................................................................................39
6.29 Indemnification; Directors' and Officers' Liability Insurance......................................39
ARTICLE VII - CONDITIONS TO CONSUMMATION OF THE MERGER...........................................................39
7.01 Conditions to Each Party's Obligation to Effect the Merger.........................................39
7.02 Conditions to Obligation of ICBC...................................................................40
7.03 Conditions to Obligation of First Citizens.........................................................41
ARTICLE VIII - TERMINATION.......................................................................................41
8.01 Termination........................................................................................41
8.02 Effect of Termination and Abandonment, Enforcement of Agreement....................................42
ARTICLE IX - MISCELLANEOUS.......................................................................................43
9.01 Survival...........................................................................................43
9.02 Waiver; Amendment..................................................................................43
9.03 Counterparts.......................................................................................43
9.04 Governing Law......................................................................................43
9.05 Expenses...........................................................................................43
9.06 Notices............................................................................................43
9.07 Entire Understanding; No Third Party Beneficiaries.................................................45
9.08 Interpretation; Effect.............................................................................45
9.09 Waiver of Jury Trial...............................................................................45
EXHIBIT A Form of Voting Agreement
EXHIBIT B Form of ICBC Affiliate Agreement
</Table>
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AGREEMENT AND PLAN OF MERGER, dated as of November 1, 2001 (this
"Agreement"), by and between First Citizens Banc Corp. ("First Citizens") and
Independent Community Banc Corp. ("ICBC").
RECITALS
A. Independent Community Banc Corp. ICBC is an Ohio corporation, having its
principal place of business in Norwalk, Ohio.
B. First Citizens Banc Corp. First Citizens is an Ohio corporation, having
its principal place of business in Sandusky, Ohio.
C. Voting Agreements. As an inducement to the willingness of First Citizens
to continue to pursue the transactions contemplated by this Agreement, First
Citizens has entered into a Voting Agreement with each of certain shareholders
of ICBC named therein (the "Shareholders"), in substantially the form of Exhibit
A (collectively, the "Voting Agreements"), pursuant to which the Shareholders
have agreed, among other things, to vote all of ICBC Common Shares (as defined
below) owned by the Shareholders (i) in favor of the Parent Merger (as defined
below) and (ii) against any Acquisition Proposal (as defined below), or any
other action or agreement that would result in a breach of any of the terms of
this Agreement by ICBC.
D. Intentions of the Parties. It is the intention of the parties to this
Agreement that the business combinations contemplated hereby be accounted for
under the purchase accounting method and that each be treated as a
"reorganization" under Section 368 of the Code (as defined below).
E. Board Action. The respective Boards of Directors of each of First
Citizens and ICBC have determined that it is in the best interests of their
respective companies and their respective shareholders to consummate the
strategic business combinations provided for herein.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants, representations, warranties and agreements contained herein the
parties agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01 CERTAIN DEFINITIONS. The following terms are used in this Agreement
with the meanings set forth below:
"Acquisition Proposal" means any tender or exchange offer, proposal
for a merger, consolidation or other business combination involving ICBC or
any of its Subsidiaries or any proposal or offer to acquire in any manner a
substantial equity interest in, or a substantial portion of the assets or
deposits of, ICBC or any of its Subsidiaries, other than the transactions
contemplated by this Agreement.
"Agreement" means this Agreement, as amended or modified from time to
time in accordance with Section 9.02.
"Agreement to Merge" has the meaning set forth in Section 2.02.
"Average First Citizens Price" has the meaning set forth in Section
8.01(e).
"Bank" means Citizens National Bank of Norwalk, a wholly owned
subsidiary of ICBC.
"BHCA" means the Bank Holding Company Act of 1956, as amended.
"Code" means the Internal Revenue Code of 1986, as amended.
"Compensation and Benefit Plans" has the meaning set forth in Section
5.03(m)(i).
"Consultants" has the meaning set forth in Section 5.03(m)(i).
"Directors" has the meaning set forth in Section 5.03(m)(i).
"Disclosure Schedule" has the meaning set forth in Section 5.01.
"Dissenting Shares" means any ICBC Common Shares held by a holder who
properly demands and perfects appraisal rights with respect to such shares
in accordance with applicable provisions of the OGCL.
"Effective Date" has the meaning set forth in Section 2.04.
"Effective Time" has the meaning set forth in Section 2.04.
"Employees" has the meaning set forth in Section 5.03(m)(i).
"Environmental Laws" means all applicable local, state and federal
environmental, health and safety laws and regulations, including, without
limitation, the Resource Conservation and Recovery Act, the Comprehensive
Environmental Response, Compensation, and Liability Act, the Clean Water
Act, the Federal Clean Air Act, and the Occupational Safety and Health Act,
each as amended, the regulations promulgated thereunder, and any state
counterparts.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Affiliate" has the meaning set forth in Section 5.03(m)(iii).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder.
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"Exchange Agent" has the meaning set forth in Section 3.04(a).
"Exchange Fund" has the meaning set forth in Section 3.04(a).
"Exchange Ratio" has the meaning set forth in Section 3.01(a).
"FDIA" means the Federal Deposit Insurance Act.
"FDIC" means the Federal Deposit Insurance Corporation.
"FFIEC" means Federal Financial Institutions Examination Committee.
"First Citizens" has the meaning set forth in the preamble to this
Agreement.
"First Citizens 2001 Financial Statements" has the meaning set forth
in Section 6.23.
"First Citizens Articles" means the Articles of Incorporation of First
Citizens, as amended.
"First Citizens Bank" means The Citizens Banking Company, an Ohio
banking corporation which is a wholly owned subsidiary of First Citizens.
"First Citizens Board" means the Board of Directors of First Citizens.
"First Citizens Code" means the Code of Regulations of First Citizens,
as amended.
"First Citizens Common Shares" means the common shares, without par
value per share, of First Citizens.
"First Citizens Meeting" has the meaning set forth in Section 6.02.
"First Citizens SEC Documents" has the meaning set forth in Section
5.04(h)(i).
"GAAP" means generally accepted accounting principles.
"Governmental Authority" means any court, administrative agency or
commission or other federal, state or local governmental authority or
instrumentality.
"ICBC" has the meaning set forth in the preamble to this Agreement.
"ICBC 2001 Financial Statements" has the meaning set forth in Section
6.23.
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"ICBC Affiliate" has the meaning set forth in Section 6.07.
"ICBC Articles" means the Articles of Incorporation of ICBC, as
amended.
"ICBC Board" means the Board of Directors of ICBC.
"ICBC Code" means the Code of Regulations of ICBC.
"ICBC Common Shares" means the common shares, without par value, of
ICBC.
"ICBC DRIP" means ICBC's Dividend Reinvestment and Stock Purchase
Plan.
"ICBC Meeting" has the meaning set forth in Section 6.02.
"IRS" has the meaning set forth in Section 5.03(m)(ii).
The term "knowledge" means, with respect to First Citizens, actual
knowledge of any officer of First Citizens with the title of not less than
a senior vice president and, with respect to ICBC, actual knowledge of any
officer of ICBC with the title of not less than vice president.
"Lien" means any charge, mortgage, pledge, security interest,
restriction, claim, lien, or encumbrance.
"Material Adverse Effect" means, with respect to First Citizens or
ICBC, any effect that (i) is material and adverse to the financial
position, results of operations or business of First Citizens and its
Subsidiaries taken as a whole or ICBC and its Subsidiaries taken as a
whole, respectively, or (ii) would materially impair the ability of either
First Citizens or ICBC to perform its obligations under this Agreement or
otherwise materially threaten or materially impede the consummation of the
Merger and the other transactions contemplated by this Agreement; provided,
however, that Material Adverse Effect shall not be deemed to include the
impact of (a) changes in banking and similar laws of general applicability
or interpretations thereof by courts or governmental authorities or other
changes affecting depository institutions generally, including changes in
general economic conditions and changes in prevailing interest and deposit
rates and changes as a result of the terrorist attack on the United States
on September 11, 2001, (b) any modifications or changes to valuation
policies and practices in connection with the Merger or restructuring
charges taken in connection with the Merger, in each case in accordance
with GAAP, (c) changes resulting from expenses (such as legal, accounting
and investment bankers' fees) incurred in connection with this Agreement or
the transactions contemplated herein, or (d) actions or omissions of a
party which have been waived in accordance with Section 9.02.
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"Merger" collectively refers to the Parent Merger and the Subsidiary
Merger, as set forth in Section 2.02.
"Merger Consideration" has the meaning set forth in Section 2.01.
"NASD" means The National Association of Securities Dealers.
"NASDAQ" means The Nasdaq Stock Market, Inc.'s SmallCap Market System.
"New Certificate" has the meaning set forth in Section 3.04(a).
"OCC" means The Office of the Comptroller of the Currency.
"OGCL" means the Ohio General Corporation Law.
"Old Certificate" has the meaning set forth in Section 3.04(a).
"ORC" means the Ohio Revised Code.
"OSS " means the Office of the Secretary of State of the State of
Ohio.
"Parent Merger" has the meaning set forth in Section 2.01.
"PBGC" means the Pension Benefit Guaranty Corporation.
"Person" means any individual, bank, corporation, partnership,
association, joint-stock company, business trust, limited liability company
or unincorporated organization.
"Pension Plan" has the meaning set forth in Section 5.03(m)(ii).
"Previously Disclosed" by a party shall mean information set forth in
its Disclosure Schedule.
"Proxy/Prospectus" has the meaning set forth in Section 6.03(a).
"Proxy Statement" has the meaning set forth in Section 6.03(a).
"Registration Statement" has the meaning set forth in Section 6.03(a).
"Regulatory Authority" has the meaning set forth in Section
5.03(i)(i).
"Representatives" means, with respect to any Person, such Person's
directors, officers, employees, managers, legal or financial advisors or
any representatives of such legal or financial advisors.
"Resulting Bank" has the meaning set forth in Section 2.02.
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"Rights" means, with respect to any Person, securities or obligations
convertible into or exercisable or exchangeable for, or giving any person
any right to subscribe for or acquire, or any options, warrants, calls or
commitments relating to, or any stock appreciation right or other
instrument the value of which is determined in whole or in part by
reference to the market price or value of, shares of capital stock of such
Person.
"SEC" means the Securities and Exchange Commission.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder.
"Shareholders" has the meaning set forth in Recital C.
"Subsidiary" and "Significant Subsidiary" have the meanings ascribed
to them in Rule 1-02 of Regulation S-X of the SEC.
"Surviving Corporation" has the meaning set forth in Section 2.01.
"Tax" and "Taxes" means all federal, state, local or foreign taxes,
charges, fees, levies or other assessments, however denominated, including,
without limitation, all net income, gross income, gains, gross receipts,
sales, use, ad valorem, goods and services, capital, production, transfer,
franchise, windfall profits, license, withholding, payroll, employment,
disability, employer health, excise, estimated, severance, stamp,
occupation, property, environmental, unemployment or other taxes, custom
duties, fees, assessments or charges of any kind whatsoever, together with
any interest and any penalties, additions to tax or additional amounts
imposed by any taxing authority whether arising before, on or after the
Effective Date.
"Tax Returns" means any return, amended return or other report
(including elections, declarations, disclosures, schedules, estimates and
information returns) required to be filed with respect to any Tax.
"Treasury Shares", with respect to ICBC, shall mean ICBC Common Shares
held by ICBC or any of its Subsidiaries or, with respect to First Citizens,
shall mean First Citizens Common Shares held by First Citizens or any of
its Subsidiaries, in each case other than in a fiduciary capacity or as a
result of debts previously contracted in good faith.
"Valuation Period" has the meaning set forth in Section 8.01(e).
"Voting Agreements" has the meaning set forth in Recital C.
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ARTICLE II
THE MERGER
2.01 THE PARENT MERGER. At the Effective Time, ICBC shall merge with
and into First Citizens (the "Parent Merger"), the separate corporate existence
of ICBC shall cease and First Citizens shall survive and continue to exist as an
Ohio corporation (First Citizens, as the surviving corporation in the Parent
Merger, sometimes being referred to herein as the "Surviving Corporation").
Notwithstanding the provisions of Section 9.02, but subject to the final clause
thereof, First Citizens may at any time prior to the Effective Time change the
method of effecting the Merger (including, without limitation, the provisions of
this Article II) if and to the extent it deems such change to be necessary,
appropriate or desirable; provided, however, that no such change shall (i) alter
or change the amount or kind of consideration to be issued to holders of ICBC
Common Shares as provided for in Article III of this Agreement (the "Merger
Consideration"), (ii) adversely affect the tax treatment of ICBC's shareholders
as a result of receiving the Merger Consideration; or (iii) materially impede or
delay consummation of the transactions contemplated by this Agreement.
2.02 THE SUBSIDIARY MERGER. At the time specified by First Citizens
Bank in its Certificate of Merger filed with the OSS (which shall not be earlier
than the Effective Time), Bank shall merge with and into First Citizens Bank
(the "Subsidiary Merger") pursuant to an agreement to merge (the "Agreement to
Merge") to be executed by Bank and First Citizens Bank and filed with the OSS
and the OCC, as required. Upon consummation of the Subsidiary Merger, the
separate corporate existence of Bank shall cease and First Citizens Bank shall
survive and continue to exist as a state banking corporation (First Citizens
Bank, as the resulting bank in the Subsidiary Merger, sometimes being referred
to herein as the "Resulting Bank"). (The Parent Merger and the Subsidiary Merger
shall sometimes collectively be referred to as the "Merger".) Notwithstanding
the foregoing, it is understood and agreed that First Citizens shall reserve the
right to change the method of effecting the Subsidiary Merger.
2.03 EFFECTIVENESS OF PARENT MERGER. Subject to the satisfaction or
waiver, in accordance with the terms of this Agreement, of the conditions set
forth in Article VII, the Parent Merger shall become effective upon the
occurrence of the filing in the office of the OSS of a certificate of merger in
accordance with Section 1701.81 of the OGCL or such later date and time as may
be set forth in such filing. The Parent Merger shall have the effects prescribed
in the OGCL.
2.04 EFFECTIVE DATE AND EFFECTIVE TIME. Subject to the satisfaction or
waiver, in accordance with the terms of this Agreement, of the conditions set
forth in Article VII, the parties shall cause the effective date of the Parent
Merger (the "Effective Date") to occur (i) as soon as practicable after the last
of the conditions set forth in Article VII shall have been satisfied or waived,
or (ii) on such other date to which the parties may agree in writing. The time
on the Effective Date when the Parent Merger shall become effective is referred
to as the "Effective Time."
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ARTICLE III
CONSIDERATION; EXCHANGE PROCEDURES
3.01 MERGER CONSIDERATION. Subject to the provisions of this
Agreement, at the Effective Time, automatically by virtue of the Parent Merger
and without any action on the part of any Person:
(a) OUTSTANDING ICBC COMMON SHARES AND ICBC RIGHTS. Each ICBC
Common Share (including those ICBC Common Shares that have been issued to ICBC
shareholders pursuant to the ICBC DRIP but excluding Treasury Shares, Dissenting
Shares and ICBC Common Shares held by First Citizens immediately prior to the
Effective Time), issued and outstanding immediately prior to the Effective Time
shall become and be converted into 1.7 First Citizens Common Shares (the
"Exchange Ratio"). The Exchange Ratio shall be subject to adjustment as set
forth in Section 3.05.
(b) TREASURY SHARES. Each ICBC Common Share held as Treasury
Shares and each ICBC Common Share held by First Citizens immediately prior to
the Effective Time shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.
(c) DISSENTING SHARES. Dissenting Shares shall not be
exchanged for First Citizens Common Shares but rather shall be entitled to the
rights set forth in Sections 1701.84 and 1701.85 of the OGCL. Notwithstanding
any other provision of this Agreement, any Dissenting Shares shall not, after
the Effective Time, be entitled to vote for any purpose or receive any dividends
or other distributions (except dividends or other distributions payable to
shareholders of record of ICBC at a date which is prior to the Effective Date)
and shall be entitled only to such rights as are afforded in respect of
Dissenting Shares pursuant to the OGCL.
(d) OUTSTANDING FIRST CITIZENS COMMON SHARES. Each First
Citizens Common Share issued and outstanding immediately prior to the Effective
Time shall remain issued and outstanding and be unaffected by the Parent Merger.
3.02 RIGHTS AS SHAREHOLDERS; SHARE TRANSFERS. At the Effective Time,
holders of ICBC Common Shares shall cease to be, and shall have no rights as,
shareholders of ICBC, other than to receive any dividend or other distribution
with respect to such ICBC Common Shares with a record date occurring prior to
the Effective Time and the consideration provided under this Article III, and
appraisal rights in the case of Dissenting Shares. After the Effective Time,
there shall be no transfers on the stock transfer books of ICBC or the Surviving
Corporation of any ICBC Common Shares.
3.03 FRACTIONAL SHARES. Notwithstanding any other provision hereof, no
fractional First Citizens Common Shares and no certificates or scrip therefor,
or other evidence of ownership thereof, will be issued in the Parent Merger.
Instead, First Citizens shall pay to each holder of ICBC Common Shares who would
otherwise be entitled to a fractional First Citizens Common Share (after taking
into account all Old Certificates delivered by such holder) an amount in cash
(without interest) determined
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by multiplying such fractional First Citizens Common Share to which the holder
would be entitled by the last sale price of First Citizens Common Shares, as
reported by the NASDAQ (as reported in The Wall Street Journal or, if not
reported therein, in another authoritative source), for the NASDAQ trading day
immediately preceding the Effective Date.
3.04 EXCHANGE PROCEDURES.
(a) At or prior to the Effective Time, First Citizens shall
deposit, or shall cause to be deposited, with Illinois Stock Transfer Company
(in such capacity, the "Exchange Agent"), for the benefit of the holders of
certificates formerly representing ICBC Common Shares ("Old Certificates"), for
exchange in accordance with this Article III, certificates representing First
Citizens Common Shares ("New Certificates") and an estimated amount of cash
(such cash and New Certificates, together with any dividends or distributions
with a record date occurring on or after the Effective Date with respect thereto
(without any interest on any such cash, dividends or distributions), being
hereinafter referred to as the "Exchange Fund") to be paid pursuant to this
Article III in exchange for outstanding ICBC Common Shares.
(b) As promptly as practicable after the Effective Date, First
Citizens shall send or cause to be sent to each former holder of record of ICBC
Common Shares immediately prior to the Effective Time transmittal materials for
use in exchanging such shareholder's Old Certificates for the Merger
Consideration. First Citizens shall cause the New Certificates into which ICBC
Common Shares are converted on the Effective Date and/or any check in respect of
any fractional share interests or dividends or distributions which such
shareholder shall be entitled to receive to be delivered to such shareholder
upon delivery to the Exchange Agent of Old Certificates representing such ICBC
Common Shares (or indemnity reasonably satisfactory to First Citizens and the
Exchange Agent, if any of such certificates are lost, stolen or destroyed) owned
by such shareholder. No interest will be paid on any such cash to be paid in
lieu of fractional share interests or in respect of dividends or distributions
which any such shareholder shall be entitled to receive pursuant to this Article
III upon such delivery.
(c) Notwithstanding the foregoing, neither the Exchange Agent,
nor any party hereto shall be liable to any former holder of ICBC Common Shares
for any amount properly delivered to a public official pursuant to applicable
abandoned property, escheat or similar laws.
(d) No dividends or other distributions with respect to First
Citizens Common Shares with a record date occurring on or after the Effective
Date shall be paid to the holder of any unsurrendered Old Certificate converted
in the Parent Merger into the right to receive First Citizens Common Shares
until the holder thereof shall be entitled to receive New Certificates in
exchange therefor in accordance with the procedures set forth in this Section
3.04. After becoming so entitled in accordance with this Section 3.04, the
record holder thereof also shall be entitled to receive any such dividends or
other distributions, without any interest thereon, which theretofore had become
payable with respect to First Citizens Common Shares such holder had the right
to receive upon surrender of the Old Certificates.
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(e) Any portion of the Exchange Fund that remains unclaimed by
the shareholders of ICBC for six months after the Effective Time shall be paid
to First Citizens. Any shareholders of ICBC who have not theretofore complied
with this Article III shall thereafter look only to First Citizens for payment
of the First Citizens Common Shares, cash in lieu of any fractional shares and
unpaid dividends and distributions on First Citizens Common Shares deliverable
in respect of each ICBC Common Share such shareholder holds as determined
pursuant to this Agreement, in each case, without any interest thereon.
3.05 ANTI-DILUTION PROVISIONS; OTHER ADJUSTMENTS.
(a) In the event First Citizens changes (or establishes a
record date for changing) the number of First Citizens Common Shares issued and
outstanding between the date hereof and the Effective Date as a result of a
stock split, stock dividend, recapitalization, reclassification, split up,
combination, exchange of shares, readjustment or similar transaction with
respect to the outstanding First Citizens Common Shares and the record date
therefor shall be prior to the Effective Date, the Exchange Ratio shall be
proportionately adjusted.
(b) In the event that the Average First Citizens Price during
the Valuation Period (as such terms are defined in Section 8.01(e) of this
Agreement) exceeds $29.50 (the "Base Value"), then First Citizens, at its
option, may adjust the Exchange Ratio payable to the ICBC shareholders and pay
an adjusted Exchange Ratio in accordance with the following formula: (Base Value
x 1.7) divided by Average First Citizens Price = Adjusted Exchange Ratio.
ARTICLE IV
ACTIONS PENDING CONSUMMATION OF MERGER
4.01 FORBEARANCES OF ICBC. From the date hereof until the Effective
Time, except as expressly contemplated by this Agreement, without the prior
written consent of First Citizens, ICBC will not, and will cause each of its
Subsidiaries not to:
(a) Ordinary Course. Except as Previously Disclosed, conduct
the business of ICBC and its Subsidiaries other than in the ordinary and usual
course or fail to use reasonable efforts to preserve intact their business
organizations and assets and maintain their rights, franchises and existing
relations with customers, suppliers, employees and business associates, or
voluntarily take any action which, at the time taken, is reasonably likely to
have an adverse effect upon ICBC's ability to perform any of its material
obligations under this Agreement.
(b) Capital Stock. Other than pursuant to Rights Previously
Disclosed and outstanding on the date hereof, (i) issue, sell or otherwise
permit to become outstanding, or authorize the creation of, any additional ICBC
Common Shares or any Rights, (ii) enter into any agreement with respect to the
foregoing, or (iii) permit any additional ICBC Common Shares to become subject
to new grants of Rights to any employee or director of ICBC or any of its
Subsidiaries.
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(c) Dividends, Etc. (i) Make, declare, pay or set aside for
payment any dividend, other than (A) semi-annual cash dividends to holders of
ICBC Common Shares in an amount not to exceed, on an annualized basis, the
aggregate per share amount declared and paid with respect to 2000 (which was
$.60 per share), with record and payment dates consistent with past practice,
and (B) dividends from wholly owned Subsidiaries of ICBC to ICBC, or (ii)
directly or indirectly adjust, split, combine, redeem, reclassify, purchase or
otherwise acquire, any shares of its capital stock.
(d) Compensation; Employment Agreements; Etc. Enter into or
amend or renew any employment, consulting, severance, retention, change in
control, or similar agreements or arrangements with any director, officer or
employee of ICBC or any of its Subsidiaries, or grant any salary or wage
increase or increase any employee benefit, (including incentive or bonus
payments) except (i) for normal individual increases in compensation to
employees in the ordinary course of business consistent with past practice as
Previously Disclosed to First Citizens, (ii) for other changes that are required
by applicable law, or (iii) to satisfy Previously Disclosed contractual
obligations existing as of the date hereof.
(e) Benefit Plans. Except as Previously Disclosed, enter into,
establish, adopt or amend (except (i) as may be required by applicable law, (ii)
to satisfy Previously Disclosed contractual obligations existing as of the date
hereof or (iii) the regular annual renewal of insurance contracts) any pension,
retirement, stock option, stock purchase, savings, profit sharing, deferred
compensation, change in control, consulting, bonus, group insurance or other
employee benefit, incentive or welfare contract, plan or arrangement, or any
trust agreement (or similar arrangement) related thereto, in respect of any
director, officer or employee of ICBC or any of its Subsidiaries, or take any
action to accelerate the payment of benefits, or the vesting or exercisability
of stock options, restricted stock or other compensation or benefits payable
thereunder.
(f) Dispositions. Sell, transfer, mortgage, encumber or
otherwise dispose of or discontinue any of its assets, deposits, business or
properties except in the ordinary course of business.
(g) Acquisitions. Acquire (other than by way of foreclosures
or acquisitions of control in a bona fide fiduciary capacity or in satisfaction
of debts previously contracted in good faith, in each case in the ordinary and
usual course of business consistent with past practice) all or any portion of,
the assets, business, deposits or properties of any other entity.
(h) Governing Documents. Amend the ICBC Articles, ICBC Code
or the articles of incorporation or bylaws (or similar governing documents) of
any of ICBC's Subsidiaries.
(i) Accounting Methods. Implement or adopt any change in its
accounting principles, practices or methods, other than as may be required by
GAAP.
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(j) Contracts. Except in the ordinary course of business
consistent with past practice, enter into or terminate any material contract (as
defined in Section 5.03(k)) or amend or modify in any material respect any of
its existing material contracts.
(k) Claims. Except in the ordinary course of business
consistent with past practice, settle any claim, action or proceeding, except
for any claim, action or proceeding which does not involve precedent for other
material claims, actions or proceedings and which involves solely money damages
in an amount, individually or in the aggregate for all such settlements, that is
not material to ICBC and its Subsidiaries, taken as a whole.
(l) Adverse Actions. (a) Take any action while knowing that
such action would, or is reasonably likely to, prevent or impede the Merger from
qualifying as a reorganization within the meaning of Section 368 of the Code; or
(b) knowingly take any action that is intended or is reasonably likely to result
in (i) any of its representations and warranties set forth in this Agreement
being or becoming untrue in any material respect at any time at or prior to the
Effective Time, (ii) any of the conditions to the Merger set forth in Article
VII not being satisfied or (iii) a material violation of any provision of this
Agreement except, in each case, as may be required by applicable law or
regulation.
(m) Risk Management. Except pursuant to applicable law or
regulation, (i) implement or adopt any material change in its interest rate and
other risk management policies, procedures or practices; (ii) fail to follow its
existing policies or practices with respect to managing its exposure to interest
rate and other risk; (iii) fail to use commercially reasonable means to avoid
any material increase in its aggregate exposure to interest rate risk; or (iv)
fail to follow its existing policies or practices with respect to managing its
fiduciary risks.
(n) Indebtedness. Incur any indebtedness for borrowed money
other than in the ordinary course of business.
(o) Indirect and Brokered Loans. Except as Previously
Disclosed, make or purchase any indirect or brokered loans.
(p) Commitments. Agree or commit to do any of the foregoing.
4.02 FORBEARANCES OF FIRST CITIZENS. From the date hereof until the
Effective Time, except as expressly contemplated by this Agreement, without the
prior written consent of ICBC, First Citizens will not, and will cause each of
its Subsidiaries not to:
(a) Ordinary Course. Conduct the business of First Citizens
and its Subsidiaries other than in the ordinary and usual course or fail to use
reasonable efforts to preserve intact their business organizations and assets
and maintain their rights, franchises and existing relations with customers,
suppliers, employees and business associates, or voluntarily take any action
which, at the time taken, is reasonably likely
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to have an adverse effect upon First Citizens' ability to perform any of its
material obligations under this Agreement.
(b) Preservation. Fail to use reasonable efforts to preserve
intact in any material respect their business organizations and assets and
maintain their rights, franchises and existing relations with customers,
suppliers, employees and business associates.
(c) Extraordinary Dividends. Make, declare, pay or set aside
for payment any extraordinary dividend, except for special dividends paid in
accordance with past practice.
(d) Accounting Methods. Implement or adopt any change in its
accounting principles, practices or methods, other than as may be required by
GAAP.
(e) Claims. Except in the ordinary course of business
consistent with past practice, settle any claim, action or proceeding, except
for any claim, action or proceeding which does not involve precedent for other
material claims, actions or proceedings and which involve solely money damages
in an amount, individually or in the aggregate for all such settlements, that is
not material to First Citizens and its Subsidiaries, taken as a whole.
(f) Adverse Actions. (a) Take any action while knowing that
such action would, or is reasonably likely to, prevent or impede the Merger from
qualifying as a reorganization within the meaning of Section 368 of the Code; or
(b) knowingly take any action that is intended or is reasonably likely to result
in (i) any of its representations and warranties set forth in this Agreement
being or becoming untrue in any material respect at any time at or prior to the
Effective Time, (ii) any of the conditions to the Merger set forth in Article
VII not being satisfied or (iii) a material violation of any provision of this
Agreement except, in each case, as may be required by applicable law or
regulation; provided, however, that nothing contained herein shall limit the
ability of First Citizens to exercise its rights under the Voting Agreements.
(g) Risk Management. Except pursuant to applicable law or
regulation, (i) fail to follow its existing policies or practices with respect
to managing its exposure to interest rate and other risk, or (ii) fail to use
commercially reasonable means to avoid any material increase in its aggregate
exposure to interest rate risk.
(h) Commitments. Agree or commit to do any of the foregoing.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.01 DISCLOSURE SCHEDULES. On or prior to the date hereof, First
Citizens has delivered to ICBC a schedule and ICBC has delivered to First
Citizens a schedule (respectively, its "Disclosure Schedule") setting forth,
among other things, items, the disclosure of which are necessary or appropriate
either in response to an express
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disclosure requirement contained in a provision hereof or as an exception to one
or more representations or warranties contained in Section 5.03 or 5.04 or to
one or more of its respective covenants contained in Article IV; provided, that
(a) no such item is required to be set forth in a Disclosure Schedule as an
exception to a representation or warranty if its absence would not be reasonably
likely to result in the related representation or warranty being deemed untrue
or incorrect under the standard established by Section 5.02, and (b) the mere
inclusion of an item in a Disclosure Schedule as an exception to a
representation or warranty shall not be deemed an admission by a party that such
item represents a material exception or fact, event or circumstance or that such
item is reasonably likely to have or result in a Material Adverse Effect on the
party making the representation. ICBC's representations, warranties and
covenants contained in this Agreement shall not be deemed to be untrue,
incorrect or to have been breached as a result of effects on ICBC arising solely
from actions taken in compliance with a written request of First Citizens.
5.02 STANDARD. No representation or warranty of ICBC or First Citizens
contained in Section 5.03 or 5.04 shall be deemed untrue or incorrect, and no
party hereto shall be deemed to have breached a representation or warranty, as a
consequence of the existence of any fact, event or circumstance unless such
fact, circumstance or event (either individually or taken together with all
other facts, events or circumstances inconsistent with such or with any
representation or warranty contained in Section 5.03 or 5.04) has had, or is
reasonably likely to have, a Material Adverse Effect.
5.03 REPRESENTATIONS AND WARRANTIES OF ICBC. Subject to Sections 5.01
and 5.02 and except as Previously Disclosed in a paragraph of its Disclosure
Schedule corresponding to the relevant paragraph below, ICBC hereby represents
and warrants to First Citizens:
(a) ORGANIZATION, STANDING AND AUTHORITY. ICBC is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Ohio and any foreign jurisdictions where its ownership or
leasing of property or assets or the conduct of its business requires it to be
so qualified. ICBC is registered as a bank holding company under the BHCA. Bank
is a national banking association duly organized, validly existing and in good
standing under the laws of the United States of America.
(b) CAPITAL STRUCTURE OF ICBC. As of the date hereof, the
authorized capital stock of ICBC consists solely of 1,400,000 ICBC Common
Shares, of which 614,281.308 shares are outstanding. As of the date hereof,
15,160.692 Treasury Shares were held by ICBC or otherwise owned by ICBC or its
Subsidiaries. The outstanding ICBC Common Shares have been duly authorized, are
validly issued and outstanding, fully paid and nonassessable, and are not
subject to any preemptive rights (and were not issued in violation of any
preemptive rights). As of the date hereof, except as Previously Disclosed, (i)
there are no ICBC Common Shares authorized and reserved for issuance, (ii) ICBC
does not have any Rights issued or outstanding with respect to ICBC Common
Shares, and (iii) other than pursuant to the ICBC DRIP, ICBC does not have any
commitment to authorize, issue or sell any ICBC Common Shares or
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Rights. ICBC has an option plan pursuant to which Rights to purchase ICBC Common
Shares are outstanding and there are outstanding options to purchase 17,000 ICBC
Common Shares under such option plan.
(c) SUBSIDIARIES.
(i)(A) Bank is ICBC's only subsidiary, (B) ICBC owns,
directly or indirectly, all the issued and outstanding equity
securities of each of its Subsidiaries, (C) no equity securities of any
of its Subsidiaries are or may become required to be issued (other than
to ICBC or any of its wholly-owned Subsidiaries) by reason of any Right
or otherwise, (D) there are no contracts, commitments, understandings
or arrangements by which any of such Subsidiaries is or may be bound to
sell or otherwise transfer any equity securities of any such
Subsidiaries (other than to ICBC or any of its wholly-owned
Subsidiaries), (E) there are no contracts, commitments, understandings,
or arrangements relating to its rights to vote or to dispose of such
securities and (F) all the equity securities of each Subsidiary held by
ICBC or any of its Subsidiaries are fully paid and nonassessable
(except pursuant to 12 U.S.C. Section 55) and are owned by ICBC or its
Subsidiaries, except as Previously Disclosed, free and clear of any
Liens.
(ii) ICBC does not own beneficially, directly or
indirectly, any equity securities or similar interests of any Person,
or any interest in a partnership or joint venture of any kind, other
than its Subsidiaries.
(d) CORPORATE AUTHORITY. Each of ICBC and Bank has full
corporate power and authority to carry on its business as it is now being
conducted and to own all its properties and assets. Subject to the receipt by
ICBC of the approval of this Agreement and the Merger from their respective
shareholders and the approval of applicable federal and state banking
authorities, as set forth in subsection (f) below, ICBC has the corporate power
and authority to execute, deliver and perform its obligations under this
Agreement, and Bank has the corporate power and authority to consummate the
Subsidiary Merger in accordance with the terms of this Agreement.
(e) CORPORATE POWER; AUTHORIZED AND EFFECTIVE AGREEMENT.
Subject to receipt of the requisite adoption of this Agreement and the Parent
Merger by the holders of the outstanding ICBC Common Shares entitled to vote
thereon, this Agreement and the transactions contemplated hereby have been
authorized by all necessary corporate action of ICBC and the ICBC Board on or
prior to the date hereof. This Agreement is a valid and legally binding
obligation of ICBC, enforceable against ICBC in accordance with its terms
(except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by general equity
principles, and except to the extent such enforceability may be limited by laws
relating to safety and soundness of insured depository institutions as set forth
in 12 U.S.C. Section 1818(b) or by appointment of a conservator by the FDIC).
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(f) REGULATORY APPROVALS; NO DEFAULTS.
(i) Except as Previously Disclosed, no consents or
approvals of, or filings or registrations with, any Governmental
Authority or with any third party are required to be made or obtained
by ICBC or any of its Subsidiaries in connection with the execution,
delivery or performance by ICBC of this Agreement or the consummation
of the Merger, except for (A) the filings of applications, notices and
the Agreement to Merge, as applicable, with federal and state banking
authorities to approve the transactions contemplated by this Agreement
and to continue ICBC's trust powers and trust activities, (B) the
filings with the SEC and state securities authorities, (C) the filing
of the certificate of merger with the OSS pursuant to the OGCL, and (D)
receipt of approvals set forth in Section 7.01(b). As of the date
hereof, ICBC is not aware of any reason why the approvals set forth in
Section 7.01(b) will not be received without the imposition of a
condition, restriction or requirement of the type described in Section
7.01(b).
(ii) Subject to receipt of the regulatory and
shareholder approvals referred to above and expiration of related
regulatory waiting periods, and required filings under federal and
state securities laws, the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby
do not and will not (A) except as Previously Disclosed, constitute a
breach or violation of, or a default under, or give rise to any Lien,
any acceleration of remedies or any right of termination under, any
law, rule or regulation or any judgment, decree, order, governmental
permit or license, or agreement, indenture or instrument of ICBC or of
any of its Subsidiaries or to which ICBC or any of its Subsidiaries or
properties is subject or bound, (B) constitute a breach or violation
of, or a default under, the ICBC Articles or the ICBC Code or (C)
except as Previously Disclosed, require any consent or approval under
any such law, rule, regulation, judgment, decree, order, governmental
permit or license, agreement, indenture or instrument.
(g) FINANCIAL STATEMENTS; MATERIAL ADVERSE EFFECT.
(i) ICBC has delivered or will deliver to First
Citizens (a) financial statements for each of the fiscal years ended
December 31, 1996, 1997, 1998, 1999 and 2000, respectively, consisting
of balance sheets and the related statements of income and retained
earnings and cash flows for the fiscal years ended on such date, all as
certified by Crowe, Chizek, L.L.P., ICBC's independent auditors, and
(b) unaudited consolidated financial statements for the interim periods
ended March 31, 2001 and June 30, 2001, consisting of balance sheets
and the related statements of income. The aforesaid financial
statements, as of the dates thereof and for the periods covered
thereby, have been prepared in conformity with GAAP, consistently
applied throughout the periods indicated, and fairly present the
financial position of ICBC as of the dates thereof and the results of
operations and cash flows for the periods indicated, except in the case
of the interim financial statements, normal year-end adjustments and
the absence of notes thereto.
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(ii) Since June 30, 2001, ICBC and its Subsidiaries
have not incurred any material liability not disclosed in ICBC's
financial statements that would be required to be disclosed therein
pursuant to GAAP.
(iii) Since June 30, 2001, (A) ICBC and its
Subsidiaries have conducted their respective businesses in the ordinary
and usual course consistent with past practice (excluding matters
related to this Agreement and the transactions contemplated hereby) and
(B) no event has occurred or circumstance arisen that, individually or
taken together with all other facts, circumstances and events
(described in any paragraph of Section 5.03 or otherwise), is
reasonably likely to have a Material Adverse Effect with respect to
ICBC.
(iv) The ICBC 2001 Financial Statements will not (i)
reveal one or more matters that are inconsistent with any of the
representations and warranties of ICBC and which constitute or are
reasonably likely to have a Material Adverse Effect on ICBC or any of
its Subsidiaries or (ii) deviate materially and adversely from the
financial statements for the fiscal year ended December 31, 2000 or the
three (3) months ended March 31, 2001 or six (6) months ended June 30,
2001, respectively, of ICBC.
(h) LITIGATION. Except as Previously Disclosed, no litigation,
claim or other proceeding before any court or governmental agency is pending
against ICBC or any of its Subsidiaries and, to ICBC's knowledge, no such
litigation, claim or other proceeding has been threatened.
(i) REGULATORY MATTERS.
(i) Neither ICBC nor any of its Subsidiaries or
properties is a party to or is subject to any order, decree, agreement,
memorandum of understanding or similar arrangement with, or a
commitment letter or similar submission to, or extraordinary
supervisory letter from, any federal or state governmental agency or
authority charged with the supervision or regulation of financial
institutions (or their holding companies) or issuers of securities or
engaged in the insurance of deposits (including, without limitation,
the Office of the Comptroller of the Currency, the Federal Reserve
System and the FDIC) or engaged in the supervision or regulation of
ICBC or any of its Subsidiaries (collectively, the "Regulatory
Authorities").
(ii) Neither ICBC nor any of its Subsidiaries has
been advised by any Regulatory Authority that such Regulatory Authority
is contemplating issuing or requesting (or is considering the
appropriateness of issuing or requesting) any such order, decree,
agreement, memorandum of understanding, commitment letter, supervisory
letter or similar submission.
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(j) COMPLIANCE WITH LAWS. Except as Previously Disclosed,
each of ICBC and its Subsidiaries:
(i) is in compliance in all material respects with
all applicable federal, state, local and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees applicable
thereto, including those relating to the conduct of trust activities or
to the employees conducting such businesses, including, without
limitation, the Equal Credit Opportunity Act, the Fair Housing Act, the
Community Reinvestment Act, the Home Mortgage Disclosure Act, the
Financial Services Modernization Act and all other applicable fair
lending laws and other laws relating to discriminatory business
practices;
(ii) has all material permits, licenses,
authorizations, orders and approvals of, and has made all material
filings, applications and registrations with, all Governmental
Authorities that are required in order to permit them to own or lease
their properties and to conduct their businesses as presently
conducted; all such permits, licenses, certificates of authority,
orders and approvals are in full force and effect and, to ICBC's
knowledge, no suspension or cancellation of any of them is threatened;
and
(iii) has not received, since June 30, 2001, any
notification or communication from any Governmental Authority (A)
asserting that ICBC or any of its Subsidiaries is not in compliance
with any of the statutes, regulations, or ordinances which such
Governmental Authority enforces or (B) threatening to revoke any
license, franchise, permit, or governmental authorization (nor, to
ICBC's knowledge, do any grounds for any of the foregoing exist).
(k) MATERIAL CONTRACTS; DEFAULTS. Except for this Agreement
and those agreements and contracts Previously Disclosed, neither ICBC nor any of
its Subsidiaries is a party to, bound by or subject to any agreement, contract,
arrangement, commitment or understanding (whether written or oral) (i) that
would constitute a "material contract" within the meaning of Item 601(b)(10) of
the SEC's Regulation S-K, (ii) that is a "material contract" (as defined above)
and is up for renewal or extension (either by notice, lack of notice or
otherwise) between the date of this Agreement and the Effective Date, or (iii)
that restricts or limits in any way the conduct of business by ICBC or any of
its Subsidiaries (including without limitation a non-compete or similar
provision). Neither ICBC nor any of its Subsidiaries is in default in any
material respect under any contract, agreement, commitment, arrangement, lease,
insurance policy or other instrument to which it is a party, by which its
respective assets, business, or operations may be bound or affected in any way,
or under which it or its respective assets, business, or operations receive
benefits, 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.
(l) BROKERAGE AND FINDER'S FEES. Except for fees payable to
Young & Associates, Inc., ICBC has not employed any broker, finder, or agent, or
agreed to pay or incurred any brokerage fee, finder's fee, commission or other
similar form of
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compensation in connection with this Agreement or the transactions contemplated
hereby.
(m) EMPLOYEE BENEFIT PLANS.
(i) Section 5.03(m) of ICBC's Disclosure Schedule
contains a complete and accurate list of all existing bonus, incentive,
deferred compensation, pension, retirement, profit-sharing, thrift,
savings, employee stock ownership, stock bonus, stock purchase,
restricted stock, stock option, severance, welfare and fringe benefit
plans, employment, retention, change in control, severance agreements,
and all similar practices, policies and arrangements in which any
employee or former employee (the "Employees"), consultant or former
consultant (the "Consultants") or director or former director (the
"Directors") of ICBC or any of its Subsidiaries participates, sponsors
or contributes, or to which any such Employees, Consultants or
Directors are a party (the "Compensation and Benefit Plans"), other
than individual retirement arrangements or HR 10 plans maintained
solely by the Employee, Consultant or Director, programs sponsored by
previous employers or any program described in DOL Regulation Section
2510.3-1(b). Neither ICBC nor any of its Subsidiaries has any
commitment to create any additional Compensation and Benefit Plan or to
modify or change any existing Compensation and Benefit Plan.
(ii) Each Compensation and Benefit Plan has been
operated and administered in all material respects in accordance with
its terms and with applicable law, including, but not limited to,
ERISA, the Code, the Securities Act, the Exchange Act, the Age
Discrimination in Employment Act, or any regulations or rules
promulgated thereunder, and all filings, disclosures and notices
required by ERISA, the Code, the Securities Act, the Exchange Act, the
Age Discrimination in Employment Act and any other applicable law have
been timely made. Each Compensation and Benefit Plan which is an
"employee pension benefit plan" within the meaning of Section 3(2) of
ERISA (a "Pension Plan") and which is intended to be qualified under
Section 401(a) of the Code has received a favorable determination
letter (including a determination that the related trust under such
Compensation and Benefit Plan is exempt from tax under Section 501(a)
of the Code) from the Internal Revenue Service ("IRS"), and ICBC is not
aware of any circumstances likely to result in revocation of any such
favorable determination letter. There is no material pending or, to the
knowledge of ICBC, threatened legal action, suit or claim relating to
the Compensation and Benefit Plans, other than routine claims for
benefits. Neither ICBC nor any of its Subsidiaries has engaged in a
transaction, or omitted to take any action, with respect to any
Compensation and Benefit Plan that would reasonably be expected to
subject ICBC or any of its Subsidiaries to a tax or penalty imposed by
either Section 4975 of the Code or Section 502 of ERISA.
(iii) None of the Compensation and Benefits Plans
currently in effect is subject to Title IV of ERISA. No liability under
Title IV of ERISA has been or is expected to be incurred by ICBC or any
of its Subsidiaries with respect to any terminated "single-employer
plan", within the meaning of
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Section 4001(a)(15) of ERISA, formerly maintained by any of them, or
any single-employer plan of any entity (an "ERISA Affiliate") which is
considered one employer with ICBC under Section 4001(a)(14) of ERISA or
Section 414(b) or (c) of the Code (an "ERISA Affiliate Plan"). Except
as listed in Section 5.03(m) of ICBC's Disclosure Schedule, none of
ICBC, any of its Subsidiaries or any ERISA Affiliate has contributed,
or has been obligated to contribute, to either a defined benefit
pension plan subject to Title IV of ERISA or to a multiemployer plan
under Subtitle E of Title IV of ERISA at any time since September 26,
1980. No notice of a "reportable event", within the meaning of Section
4043 of ERISA, has been required to be filed for any Compensation and
Benefit Plan or by any ERISA Affiliate Plan. Except as Previously
Disclosed, to the knowledge of ICBC, there is no pending investigation
or enforcement action by the U.S. Department of Labor (the "DOL") or
the IRS or any other Governmental Authority with respect to any
Compensation and Benefit Plan.
(iv) All contributions required to be made under the
terms of any Compensation and Benefit Plan or ERISA Affiliate Plan or
any employee benefit arrangements under any collective bargaining
agreement to which ICBC or any of its Subsidiaries was or is a party
have been timely made or have been reflected on ICBC's financial
statements. Neither any Pension Plan nor any ERISA Affiliate Plan has
an "accumulated funding deficiency" (whether or not waived) within the
meaning of Section 412 of the Code or Section 302 of ERISA and all
required payments to the PBGC with respect to each Pension Plan or
ERISA Affiliate Plan have been made on or before their due dates. None
of ICBC, any of its Subsidiaries or any ERISA Affiliate (x) has
provided, or would reasonably be expected to be required to provide,
security to any Pension Plan or to any ERISA Affiliate Plan pursuant to
Section 401(a)(29) of the Code, and (y) has taken any action, or
omitted to take any action, that has resulted, or would reasonably be
expected to result, in the imposition of a Lien under Section 412(n) of
the Code or pursuant to ERISA.
(v) Neither ICBC nor any of its Subsidiaries has any
obligations to provide retiree health and life insurance or other
retiree death benefits under any Compensation and Benefit Plan, other
than benefits mandated by Section 4980B of the Code, and each such
Compensation and Benefit Plan may be amended or terminated without
incurring liability thereunder. There has been no communication to
Employees by ICBC or any of its Subsidiaries that would reasonably be
expected to promise or guarantee such Employees retiree health or life
insurance or other retiree death benefits on a permanent basis.
(vi) ICBC and its Subsidiaries do not maintain any
Compensation and Benefit Plans covering foreign (i.e., non-United
States) Employees.
(vii) With respect to each Compensation and Benefit
Plan, if applicable, ICBC has provided or made available to First
Citizens, true and complete copies of existing: (A) Compensation and
Benefit Plan documents and amendments thereto; (B) trust instruments
and insurance contracts; (C) the two most recent Forms 5500 filed with
the IRS; (D) the most recent actuarial report
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and financial statement; (E) the most recent summary plan description;
(F) forms filed with the PBGC (other than for premium payments); (G)
the most recent determination letter issued by the IRS; (H) any Form
5310 or Form 5330 filed with the IRS; and (I) the most recent
nondiscrimination tests performed under ERISA and the Code (including
401(k) and 401(m) tests).
(viii) Except as disclosed on Section 5.03(m) of
ICBC's Disclosure Schedule, the consummation of the transactions
contemplated by this Agreement would not, directly or indirectly
(including, without limitation, as a result of any termination of
employment prior to or following the Effective Time) reasonably be
expected to (A) entitle any Employee, Consultant or Director to any
payment (including severance pay or similar compensation) or any
increase in compensation, (B) result in the vesting or acceleration of
any benefits under any Compensation and Benefit Plan or (C) result in
any material increase in benefits payable under any Compensation and
Benefit Plan.
(ix) Except as disclosed on Section 5.03(m) of ICBC's
Disclosure Schedule, neither ICBC nor any of its Subsidiaries maintains
any compensation plans, programs or arrangements the payments under
which would not reasonably be expected to be deductible as a result of
the limitations under Section 162(m) of the Code and the regulations
issued thereunder.
(x) Except as disclosed on Section 5.03(m) of ICBC's
Disclosure Schedule, as a result, directly or indirectly, of the
transactions contemplated by this Agreement (including, without
limitation, as a result of any termination of employment prior to or
following the Effective Time), none of First Citizens, ICBC or the
Surviving Corporation, or any of their respective Subsidiaries will be
obligated to make a payment that would be characterized as an "excess
parachute payment" to an individual who is a "disqualified individual"
(as such terms are defined in Section 280G of the Code) of ICBC on a
consolidated basis, without regard to whether such payment is
reasonable compensation for personal services performed or to be
performed in the future.
(n) LABOR MATTERS. Neither ICBC nor any of its 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 ICBC
or any of its Subsidiaries the subject of a proceeding asserting that it or any
such Subsidiary has committed an unfair labor practice (within the meaning of
the National Labor Relations Act) or seeking to compel ICBC or any such
Subsidiary to bargain with any labor organization as to wages or conditions of
employment, nor is there any strike or other labor dispute involving it or any
of its Subsidiaries pending or, to ICBC's knowledge, threatened, nor is ICBC
aware of any activity involving its or any of its Subsidiaries' employees
seeking to certify a collective bargaining unit or engaging in other
organizational activity.
(o) FIRST CITIZENS COMMON SHARE OWNERSHIP. Except as
Previously Disclosed, neither ICBC nor any of its "affiliates" or "associates,"
as the terms "affiliates" and "associates" are defined in Section 1704.01(C)(1)
and (C)(3) of the ORC, are
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"beneficial owners," as the term "beneficial owners" is defined in Section
1704.01(C)(4) of the ORC, of any of the outstanding First Citizens Common
Shares.
(p) ENVIRONMENTAL MATTERS. To ICBC's knowledge, neither the
conduct nor operation of ICBC or its Subsidiaries nor any condition of any
property presently owned, leased or operated by any of them (including, without
limitation, in a fiduciary or agency capacity), or on which any of them holds a
Lien, violates Environmental Laws and to ICBC's knowledge, no condition has
existed or event has occurred with respect to any of them or any such property
that is reasonably likely to result in liability under Environmental Laws. To
ICBC's knowledge, neither ICBC nor any of its Subsidiaries has received any
notice from any person or entity that ICBC or its Subsidiaries or the operation
or condition of any property owned, leased, operated, or held as collateral or
in a fiduciary capacity by any of them are or were in violation of or otherwise
are alleged to have liability under any Environmental Law, including, but not
limited to, responsibility (or potential responsibility) for the cleanup or
other remediation of any pollutants, contaminants, or hazardous or toxic wastes,
substances or materials at, on, beneath, or originating from any such property.
(q) TAX MATTERS.
(i)(A) All Tax Returns that are required to be filed
by or with respect to ICBC and its Subsidiaries have been duly and
timely filed and all such Tax Returns are true, correct and complete in
all material respects, (B) all Taxes shown to be due on the Tax Returns
referred to in clause (i)(A) have been paid in full, (C) the Tax
Returns referred to in clause (i)(A) have been examined by the Internal
Revenue Service or the appropriate state, local or foreign taxing
authority or the period for assessment of the Taxes in respect of which
such Tax Returns were required to be filed has expired for all tax
years ending on or before December 31, 1997, (D) all deficiencies
asserted or assessments made as a result of any examination of the Tax
Returns of ICBC and its Subsidiaries for tax years ending on or before
December 31, 1997 have been paid in full, and (E) no waivers of
statutes of limitation have been given by or requested with respect to
any Taxes of ICBC or its Subsidiaries. ICBC has provided or made
available to First Citizens true and correct copies of the United
States federal income Tax Returns filed by ICBC and its Subsidiaries
for each of the three most recent fiscal years ended on or before
December 31, 2000. Neither ICBC nor any of its Subsidiaries has any
liability with respect to income, franchise or similar Taxes in excess
of the amounts accrued with respect thereto that are reflected in
ICBC's June 30, 2001 financial statements. As of the date hereof,
neither ICBC nor any of its Subsidiaries has any reason to believe that
any conditions exist that might prevent or impede the Parent Merger
from qualifying as a reorganization within the meaning of Section
368(a) of the Code.
(ii) No Tax is required to be withheld pursuant to
Section 1445 of the Code as a result of the transfer contemplated by
this Agreement.
(iii) No claim has ever been made by an authority in
a jurisdiction where ICBC or any of its Subsidiaries does not file Tax
Returns that ICBC or
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such Subsidiary is or may be subject to taxation by that jurisdiction
nor, to the knowledge of ICBC, is there any factual basis for any such
claim.
(iv) Neither ICBC nor any of its Subsidiaries has
applied for any ruling from any Tax authority with respect to Taxes nor
entered into a closing agreement (or similar arrangement) since
December 31, 1996 with any Tax authority.
(v) Except as Previously Disclosed, neither ICBC nor
any of its Subsidiaries has been audited by any Tax authority for
taxable years ending on or subsequent to December 31, 1995.
(vi) Neither ICBC nor any of its Subsidiaries is a
party to any Tax allocation or sharing agreement (other than a Tax
sharing agreement with each other), nor do ICBC or any of its
Subsidiaries have any liability for the Taxes of any person (other than
ICBC or any of its Subsidiaries) as a transferee or successor, by
contract, or otherwise.
(vii) Neither ICBC nor any of its Subsidiaries has
waived any statute of limitations in respect of Taxes or agreed to any
extension of time with respect to a Tax assessment or deficiency.
(viii) Neither ICBC nor any of its Subsidiaries is a
United States real property holding corporation within the meaning of
Section 897(c)(2) of the Code during the applicable period specified in
Code Section 897(c)(1)(A)(ii).
(ix) ICBC (and each of its Subsidiaries, to the
extent applicable) has disclosed on its federal income Tax Return all
positions taken therein that could give rise to a substantial
understatement of income Tax within the meaning of Code Section 6662.
(x) Neither ICBC nor any of its Subsidiaries has
agreed, nor is it required, to make any adjustment under Section 481(a)
of the Code by reason of a change in accounting method or otherwise
that will affect its liability for Taxes.
(xi) Neither ICBC nor any of its Subsidiaries has
made an election, nor is it required, to treat any asset as owned by
another person pursuant to the provisions of Section 168(f) of the Code
or as tax-exempt bond financed property or tax-exempt use property
within the meaning of Section 168 of the Code.
(xii) Neither ICBC nor any of its Subsidiaries has
filed an election under Section 338(g) or 338(h)(10) of the Code.
(xiii) Neither ICBC nor any of its Subsidiaries owns
an interest in any (A) domestic international sales corporation, (B)
foreign sales corporation, (C) controlled foreign corporation, or (D)
passive foreign investment company, as such terms are defined in the
Code.
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(xiv) There are no joint ventures, partnerships,
limited liability companies, or other arrangements or contracts to
which ICBC or any of its Subsidiaries is a party that could be treated
as a partnership for Tax purposes.
(xv) All tax returns, of any kind relating to trust
activities, that are required to be filed by ICBC, have been duly
filed, taxes timely paid and no issues have been raised, by the
relevant taxing authority, in connection with the examination of any
said tax returns.
(r) RISK MANAGEMENT INSTRUMENTS. Neither ICBC nor any of its
Subsidiaries has any interest rate swaps, caps, floors, option agreements,
futures and forward contracts or other similar risk management arrangements.
(s) BOOKS AND RECORDS. The books of account, minute books,
(except minutes relating to the process leading to this Agreement and the
transactions contemplated hereunder) stock record books, and other records of
ICBC and its Subsidiaries, are complete and correct in all material respects and
have been maintained in accordance with sound business practices and, in
reasonable detail, accurately and fairly reflect the transactions and
dispositions of the assets of the issuer, including the maintenance of an
adequate system of internal controls that is sufficient to provide reasonable
assurances that transactions are executed in accordance with management's
authorization, that transactions are recorded as necessary, that access to
assets is permitted only in accordance with management's authorization, and that
the recorded accountability for assets is compared at reasonable intervals and
appropriate action is taken with respect to any differences. All of the books of
account, minute books, stock record books, and other records of ICBC and its
Subsidiaries have been or will be made available to First Citizens promptly upon
their completion. The minute books of ICBC contain accurate and complete records
of all meetings held of, and corporate action taken by, the shareholders, the
Board of Directors, and committees of the Board of Directors of Bank, and no
meeting of any such shareholders, Board of Directors, or committee has been held
for which minutes have been prepared and are not contained in such minute books,
except for the minutes related to the process leading to and approving this
Agreement and the transactions contemplated hereunder. The fiduciary books and
records of ICBC, from trust activities, have been fully, properly and accurately
maintained in all material respects, have been maintained in accordance with
applicable fiduciary accounting practices and there are no material inaccuracies
or discrepancies of any kind contained or reflected therein, and they fairly
present, in all material respects, the substance of trust events and
transactions included therein.
(t) INSURANCE. ICBC's Disclosure Schedule sets forth all of
the insurance policies, binders, or bonds maintained by ICBC or its
Subsidiaries. ICBC and its Subsidiaries are insured with reputable insurers
against such risks and in such amounts as the management of ICBC reasonably has
determined to be prudent in accordance with industry practices. All such
insurance policies are in full force and effect; ICBC and its Subsidiaries are
not in material default thereunder; and all claims thereunder have been filed in
due and timely fashion.
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(u) DISCLOSURE. The representations and warranties contained
in this Section 5.03 do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements and
information contained in this Section 5.03 not misleading.
(v) MATERIAL ADVERSE CHANGE. ICBC has not, on a consolidated
basis, suffered a change in its business, financial condition or results of
operations since June 30, 2001, that has had a Material Adverse Effect on ICBC.
(w) ABSENCE OF UNDISCLOSED LIABILITIES. Neither ICBC nor any
of its Subsidiaries has any liability (contingent or otherwise) that is material
to ICBC on a consolidated basis, or that, when combined with all liabilities as
to similar matters would be material to ICBC on a consolidated basis, except as
disclosed in the ICBC Financial Statements.
(x) PROPERTIES. ICBC and its Subsidiaries have good and, as to
real estate, marketable title, free and clear of all Liens, defaults or
equitable interests to all of the properties and assets, real and personal,
reflected on the ICBC Financial Statements as being owned by ICBC as of June 30,
2001, or acquired after such date, except (i) statutory Liens for amounts not
yet due and payable, (ii) pledges to secure deposits and other Liens incurred in
the ordinary course of banking business, (iii) such Liens, if any, as do not
materially adversely impair the value of such properties or the business
operations conducted at such properties, (iv) dispositions and encumbrances in
the ordinary course of business, (v) Liens on properties acquired in foreclosure
or on account of debts previously contracted, and (vi) the Lien as Previously
Disclosed in the paragraph of the Disclosure Schedules corresponding to Section
5.03(c). All leases pursuant to which ICBC or any of its Subsidiaries, as
lessee, leases real or personal property (except for leases that have expired by
their terms or that ICBC or any such Subsidiary has agreed to terminate since
the date hereof) are valid without default thereunder by the lessee or, to
ICBC's knowledge, the lessor.
(y) LOANS; CERTAIN TRANSACTIONS. Each loan reflected as an
asset in the ICBC Financial Statements as of June 30, 2001, and each balance
sheet date subsequent thereto, other than loans the unpaid balance of which does
not exceed $50,000 in the aggregate, (i) is evidenced by notes, agreements or
other evidences of indebtedness which are true, genuine and what they purport to
be, (ii) to the extent secured, has been secured by valid Liens and security
interests which have been perfected, and (iii) is the legal, valid and binding
obligation of the obligor named therein, enforceable in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent conveyance and other laws
of general applicability relating to or affecting creditors' rights and to
general equity principles. Except as Previously Disclosed, as of June 30, 2001,
Bank is not a party to a loan, including any loan guaranty, with any director,
executive officer or 5% shareholder of ICBC or any of its Subsidiaries or any
person, corporation or enterprise controlling, controlled by or under common
control with any of the foregoing. All loans and extensions of credit that have
been made by Bank and that are subject to Section 22(b) of the Federal Reserve
Act, as amended, comply therewith.
-25-
(z) ALLOWANCE FOR LOAN LOSSES. The allowance for loan losses
reflected on the ICBC financial statements, as of their respective dates, is, in
the opinion of ICBC's management, adequate in all material respects under the
requirements of GAAP to provide for reasonably anticipated losses on outstanding
loans, net of recoveries.
(aa) REPURCHASE AGREEMENTS. With respect to all agreements
pursuant to which ICBC or any of its Subsidiaries has purchased securities
subject to an agreement to resell, if any, ICBC or such Subsidiary, as the case
may be, has a valid, perfected first Lien or security interest in or evidence of
ownership in book entry form of the government securities or other collateral
securing the repurchase agreement, and the value of such collateral equals or
exceeds the amount of the debt secured thereby.
(bb) DEPOSIT INSURANCE. The deposits of Bank are insured by
the FDIC in accordance with The Federal Deposit Insurance Act ("FDIA"), and Bank
has paid all assessments and filed all reports required by the FDIA and under
the National Housing Act prior to the enactment of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989.
5.04 REPRESENTATIONS AND WARRANTIES OF FIRST CITIZENS. Subject to
Sections 5.01 and 5.02 and except as Previously Disclosed in a paragraph of its
Disclosure Schedule corresponding to the relevant paragraph below, First
Citizens hereby represents and warrants to ICBC as follows:
(a) ORGANIZATION, STANDING AND AUTHORITY. First Citizens is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Ohio. First Citizens is duly qualified to do business and is in
good standing in the State of Ohio and any foreign jurisdictions where its
ownership or leasing of property or assets or the conduct of its business
requires it to be so qualified. First Citizens is registered as a bank holding
company under the BHCA. First Citizens Bank is a state banking association duly
organized, validly existing and in good standing under the laws of the State of
Ohio. First Citizens Bank is duly qualified to do business and is in good
standing in the State of Ohio and any foreign jurisdictions where its ownership
or leasing of property or assets or the conduct of its business requires it to
be so qualified.
(b) FIRST CITIZENS COMMON SHARES.
(i) As of the date hereof, the authorized capital
stock of First Citizens consists solely of First Citizens Common
Shares, of which 4,263,401 shares were outstanding. As of the date
hereof, except as Previously Disclosed, First Citizens does not have
any Rights issued or outstanding with respect to First Citizens Common
Shares and First Citizens does not have any commitment to authorize,
issue or sell any First Citizens Common Shares or Rights, except
pursuant to this Agreement. The outstanding First Citizens Common
Shares have been duly authorized and are validly issued and
outstanding, fully paid and nonassessable. Under the First Citizens
Articles, First Citizens Common Shares are subject to preemptive rights
under certain circumstances.
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(ii) The First Citizens Common Shares to be issued in
exchange for ICBC Common Shares in the Parent Merger, when issued in
accordance with the terms of this Agreement, will be duly authorized,
validly issued, fully paid and nonassessable, will be subject to
preemptive rights, but will not be issued in violation of such
preemptive rights.
(c) ICBC COMMON SHARE OWNERSHIP. Except as Previously
Disclosed, neither First Citizens nor any of its "affiliates" or "associates,"
as the terms "affiliates" and "associates" are defined in Section 1704.01(C)(1)
and (C)(3) of the ORC, are "beneficial owners," as the term "beneficial owners"
is defined in Section 1704.01(C)(4) of the ORC, of any of the outstanding ICBC
Common Shares.
(d) SIGNIFICANT SUBSIDIARIES. Each of First Citizens'
Significant Subsidiaries has been duly organized and is validly existing in good
standing under the laws of the jurisdiction of its organization, and is duly
qualified to do business and is in good standing in the jurisdictions where its
ownership or leasing of property or the conduct of its business requires it to
be so qualified and First Citizens owns, directly or indirectly, all the issued
and outstanding equity securities of each of its Significant Subsidiaries.
(e) CORPORATE AUTHORITY. Each of First Citizens and its
Significant Subsidiaries has the corporate power and authority to carry on its
business as it is now being conducted and to own all its properties and assets.
Subject to the receipt by First Citizens of the approval of this Agreement and
the Merger from their respective shareholders and the approval of applicable
federal and state banking authorities, First Citizens has the corporate power
and authority to execute, deliver and perform its obligations under this
Agreement, and the Voting Agreements and to consummate the transactions
contemplated hereby and thereby, and First Citizens Bank has the corporate power
and authority to consummate the Subsidiary Merger in accordance with the terms
of this Agreement.
(f) CORPORATE AUTHORITY; AUTHORIZED AND EFFECTIVE AGREEMENT.
Subject to the receipt of the requisite adoption of this Agreement and the
Parent Merger by the holders of the outstanding First Citizens Common Shares
entitled to vote thereon, this Agreement and the Voting Agreements and the
transactions contemplated hereby and thereby have been authorized by all
necessary corporate action of First Citizens and the First Citizens Board on or
prior to the date hereof. This Agreement is a valid and legally binding
agreement of First Citizens, enforceable in accordance with its terms (except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer and similar laws of general
applicability relating to or affecting creditors' rights or by general equity
principles, and except to the extent such enforceability may be limited bylaws
relating to safety and soundness of insured depository institutions as set forth
in 12 U.S.C. Section 1818(b) or by appointment of a conservator by the FDIC).
-27-
(g) REGULATORY APPROVALS; NO DEFAULTS.
(i) No consents or approvals of, or filings or
registrations with, any Governmental Authority or with any third party
are required to be made or obtained by First Citizens or any of its
Significant Subsidiaries in connection with the execution, delivery or
performance by First Citizens of this Agreement or to consummate the
Merger except for (A) the filing of applications, notices, and the
Agreement to Merge, as applicable, with the federal and state banking
authorities to approve the transactions contemplated by this Agreement
and to continue ICBC's trust powers and trust activities; (B) the
filing and declaration of effectiveness of the Registration Statement;
(C) the filing of the certificate of merger with the OSS pursuant to
the OGCL; (D) such filings as are required to be made or approvals as
are required to be obtained under the securities or "Blue Sky" laws of
various states in connection with the issuance of First Citizens Common
Shares in the Parent Merger; and (E) receipt of the approvals set forth
in Section 7.01(b). As of the date hereof, First Citizens is not aware
of any reason why the approvals set forth in Section 7.01(b) will not
be received without the imposition of a condition, restriction or
requirement of the type described in Section 7.01(b).
(ii) Subject to the satisfaction of the requirements
referred to in the preceding paragraph and expiration of the related
waiting periods, and required filings under federal and state
securities laws, the execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated hereby
do not and will not (A) constitute a breach or violation of, or a
default under, or give rise to any Lien, any acceleration of remedies
or any right of termination under, any law, rule or regulation or any
judgment, decree, order, governmental permit or license, or agreement,
indenture or instrument of First Citizens or of any of its Significant
Subsidiaries or to which First Citizens or any of its Significant
Subsidiaries or properties is subject or bound, (B) constitute a breach
or violation of, or a default under, the First Citizens Articles or
First Citizens Code, or (C) require any consent or approval under any
such law, rule, regulation, judgment, decree, order, governmental
permit or license, agreement, indenture or instrument.
(h) FINANCIAL REPORTS AND SEC DOCUMENTS; MATERIAL
ADVERSE EFFECT.
(i) First Citizens' Annual Reports on Form 10-K for
the fiscal years ended December 31, 1999 and 2000, Quarterly Reports on
Form 10-Q for the quarters ended March 31, 2001 and June 30, 2001 and
all other reports, registration statements, definitive proxy statements
or other statements filed or to be filed by it or any of its
Significant Subsidiaries with the SEC subsequent to June 30, 2001 under
the Securities Act, or under Section 13(a), 13(c) 14 or 15(d) of the
Exchange Act, in the form filed or to be filed (collectively, "First
Citizens SEC Documents") as of the date filed, (A) complied or will
comply in all material respects with the applicable requirements under
the Securities Act or the Exchange Act, as the case may be, and (B) did
not and will not contain any untrue statement of a material fact or
omit to state a material fact required to be
-28-
stated therein or necessary to make the statements therein, in light of
the circumstances under which they were made, not misleading; and each
of the balance sheets or statements of condition contained in or
incorporated by reference into any such First Citizens SEC Document
(including the related notes and schedules thereto) fairly presents, or
will fairly present, the financial position of First Citizens and its
Significant Subsidiaries as of its date, and each of the statements of
income or results of operations and changes in shareholders' equity and
cash flows or equivalent statements in such First Citizens SEC
Documents (including any related notes and schedules thereto) fairly
presents, or will fairly present, the results of operations, changes in
shareholders' equity and cash flows, as the case may be, of First
Citizens and its Significant Subsidiaries for the periods to which they
relate, in each case in accordance with GAAP consistently applied
during the periods involved, except in each case as may be noted
therein, subject to normal year-end audit adjustments in the case of
unaudited statements.
(ii) Since June 30, 2001, First Citizens and its
Subsidiaries have not incurred any material liability not disclosed in
First Citizens' financial statements that would be required to be
disclosed therein pursuant to GAAP.
(iii) Since June 30, 2001, (A) First Citizens and its
Subsidiaries have conducted their respective businesses in the ordinary
and usual course consistent with past practice (excluding matters
related to this Agreement and the transactions contemplated hereby),
and (B) no event has occurred or circumstance arisen that, individually
or taken together with all other facts, circumstances and events
(described in any paragraph of Section 5.04 or otherwise), is
reasonably likely to have a Material Adverse Effect with respect to
First Citizens.
(i) LITIGATION; REGULATORY ACTION.
(i) No litigation, claim or other proceeding before
any Governmental Authority is pending against First Citizens or any of
its Significant Subsidiaries and, to First Citizens' knowledge, no such
litigation, claim or other proceeding has been threatened.
(ii) Neither First Citizens nor any of its
Significant Subsidiaries or properties is a party to or is subject to
any order, decree, agreement, memorandum of understanding or similar
arrangement with, or a commitment letter or similar submission to, or
extraordinary supervisory letter from a Regulatory Authority, nor has
First Citizens or any of its Significant Subsidiaries been advised by a
Regulatory Authority that such agency is contemplating issuing or
requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of
understanding, commitment letter, supervisory letter or similar
submission.
(j) COMPLIANCE WITH LAWS. Each of First Citizens and
its Significant Subsidiaries:
-29-
(i) is in compliance in all material respects with
all applicable federal, state, local and foreign statutes, laws,
regulations, ordinances, rules, judgments, orders or decrees applicable
thereto or to the employees conducting such businesses, including,
without limitation, the Equal Credit Opportunity Act, the Fair Housing
Act, the Community Reinvestment Act, the Home Mortgage Disclosure Act,
the Financial Services Modernization Act and all other applicable fair
lending laws and other laws relating to discriminatory business
practices; and
(ii) has all material permits, licenses,
authorizations, orders and approvals of, and has made all material
filings, applications and registrations with, all Governmental
Authorities that are required in order to permit them to conduct their
businesses substantially as presently conducted; all such permits,
licenses, certificates of authority, orders and approvals are in full
force and effect and, to the best of its knowledge, no suspension or
cancellation of any of them is threatened; and
(iii) has not received, since June 30, 2001, any
notification or communication from any Governmental Authority (A)
asserting that First Citizens or any of its Significant Subsidiaries is
not in compliance with any of the statutes, regulations, or ordinances
which such Governmental Authority enforces or (B) threatening to revoke
any license, franchise, permit, or governmental authorization (nor, to
First Citizens' knowledge, do any grounds for any of the foregoing
exist).
(k) BROKERAGE AND FINDER'S FEES. Except for fees payable to
Keefe, Bruyette & Woods, First Citizens has not employed any broker, finder, or
agent, or agreed to pay or incurred any brokerage fee, finder's fee, commission
or other similar form of compensation in connection with this Agreement or the
transactions contemplated hereby.
(l) TAX MATTERS. Except as Previously Disclosed, (i) all Tax
Returns that are required to be filed by or with respect to First Citizens and
its Subsidiaries have been duly filed, (ii) all Taxes shown to be due on the Tax
Returns referred to in clause (i) have been paid in full, (iii) the Tax Returns
referred to in clause (i) have been examined by the Internal Revenue Service or
the appropriate state, local or foreign taxing authority or the period for
assessment of the Taxes in respect of which such Tax Returns were required to be
filed has expired for all tax years ending on or before December 31, 1997, (iv)
all deficiencies asserted or assessments made as a result of such examinations
have been paid in full, (v) no issues that have been raised by the relevant
taxing authority in connection with the examination of any of the Tax Returns
referred to in clause (i) that would have a material impact on the financial
condition of First Citizens or any of its Subsidiaries are currently pending,
and (vi) no waivers of statutes of limitation have been given by or requested
with respect to any Taxes of First Citizens or its Significant Subsidiaries.
Neither First Citizens nor any of its Subsidiaries has any liability with
respect to income, franchise or similar Taxes that accrued on or before the end
of the most recent period covered by First Citizens SEC Documents filed prior to
the date hereof in excess of the amounts accrued with respect thereto that are
reflected in the financial statements included in First Citizens SEC Documents
filed on
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or prior to the date hereof. As of the date hereof, First Citizens has no reason
to believe that any conditions exist that might prevent or impede the Parent
Merger from qualifying as reorganization with the meaning of Section 368(a) of
the Code.
(m) BOOKS AND RECORDS. The books and records of First Citizens
and its Subsidiaries have been fully, properly and accurately maintained in all
material respects, have been maintained in accordance with sound business
practices and the requirements of Section 13(b)(2) of the Exchange Act and there
are no material inaccuracies or discrepancies of any kind contained or reflected
therein, and they fairly present the substance of events and transactions
included therein.
(n) DISCLOSURE. The representations and warranties contained
in this Section 5.04 do not contain any untrue statement of a material fact or
omit to state any material fact necessary in order to make the statements and
information contained in this Section 5.04 not misleading.
(o) MATERIAL ADVERSE CHANGE. First Citizens has not, on a
consolidated basis, suffered a change in its business, financial condition or
results of operations since June 30, 2001, that has had a Material Adverse
Effect on First Citizens.
(p) DEPOSIT INSURANCE. The deposits of First Citizens Bank are
insured by the FDIC in accordance with the FDIA, and First Citizens Bank has
paid all assessments and filed all reports required by the FDIA and under the
National Housing Act prior to the enactment of the Financial Institutions
Reform, Recovery, and Enforcement Act of 1989.
ARTICLE VI
COVENANTS
6.01 REASONABLE BEST EFFORTS. Subject to the terms and conditions of
this Agreement, each of ICBC and First Citizens agrees to use its reasonable
best efforts in good faith to take, or cause to be taken, all actions, and to
do, or cause to be done, all things necessary, proper or desirable, or advisable
under applicable laws, so as to permit consummation of the Merger as promptly as
practicable and otherwise to enable consummation of the transactions
contemplated hereby and shall cooperate fully with the other party hereto to
that end.
6.02 SHAREHOLDER APPROVALS. ICBC and First Citizens each agree to take,
in accordance with applicable law, the ICBC Articles and ICBC Code, and the
First Citizens Articles and First Citizens Code, respectively, all action
necessary to convene an appropriate meeting of its shareholders to consider and
vote upon the adoption of this Agreement and any other matters required to be
approved or adopted by ICBC's and First Citizens' shareholders for consummation
of the Parent Merger (including any adjournment or postponement, the "ICBC
Meeting" and the "First Citizens Meeting," respectively), as promptly as
practicable after the Registration Statement is declared effective. The ICBC
Board shall recommend that its shareholders adopt this Agreement at the ICBC
Meeting, unless otherwise necessary under the applicable fiduciary duties
-31-
of the ICBC Board, as determined by the ICBC Board in good faith after
consultation with and based upon advice of independent legal counsel. The First
Citizens Board shall recommend that its shareholders adopt this Agreement at the
First Citizens Meeting, unless otherwise necessary under the applicable
fiduciary duties of the First Citizens Board, as determined by the First
Citizens Board in good faith after consultation with and based upon advice of
independent legal counsel.
6.03 REGISTRATION STATEMENT.
(a) First Citizens agrees to prepare pursuant to all
applicable laws, rules and regulations a registration statement on Form S-4 (the
"Registration Statement") to be filed by First Citizens with the SEC in
connection with the issuance of First Citizens Common Shares in the Parent
Merger (including the proxy statement and prospectus and other proxy
solicitation materials of ICBC and of First Citizens constituting a part thereof
(the "Proxy Statement") and all related documents). ICBC agrees to cooperate,
and to cause its Subsidiaries to cooperate, with First Citizens, its counsel and
its accountants, in preparation of the Registration Statement and the Proxy
Statement; and provided that ICBC and its Subsidiaries have cooperated as
required above, First Citizens agrees to file the Proxy Statement and the
Registration Statement (together, the "Proxy/Prospectus") with the SEC as
promptly as reasonably practicable. Each of ICBC and First Citizens agrees to
use all reasonable efforts to cause the Proxy/Prospectus to be declared
effective under the Securities Act as promptly as reasonably practicable after
filing thereof. First Citizens also agrees to use all reasonable efforts to
obtain, prior to the effective date of the Registration Statement, all necessary
state securities law or "Blue Sky" permits and approvals required to carry out
the transactions contemplated by this Agreement. ICBC agrees to furnish to First
Citizens all information concerning ICBC, its Subsidiaries, officers, directors
and shareholders as may be reasonably requested in connection with the
foregoing.
(b) Each of ICBC and First Citizens agrees, as to itself and
its Subsidiaries, that none of the information supplied or to be supplied by it
for inclusion or incorporation by reference in (i) the Registration Statement
will, at the time the Registration Statement and each amendment or supplement
thereto, if any, becomes effective under the Securities Act, contain any untrue
statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading, and
(ii) the Proxy Statement and any amendment or supplement thereto will, at the
date of mailing and at the time of the First Citizens Meeting and the ICBC
Meeting, as the case may be, contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading or any statement which, in the light
of the circumstances under which such statement is made, will be false or
misleading with respect to any material fact, or which will omit to state any
material fact necessary in order to make the statements therein not false or
misleading or necessary to correct any statement in any earlier statement in the
Proxy Statement or any amendment or supplement thereto. Each of ICBC and First
Citizens further agrees that if it shall become aware prior to the Effective
Date of any information furnished by it that would cause any of the statements
in the Proxy Statement to be false or misleading with respect to any material
fact, or to omit to state any material fact necessary to make the
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statements therein not false or misleading, to promptly inform the other party
thereof and to take the necessary steps to correct the Proxy Statement.
(c) First Citizens agrees to advise ICBC, promptly after First
Citizens receives notice thereof, of the time when the Registration Statement
has become effective or any supplement or amendment has been filed, of the
issuance of any stop order or the suspension of the qualification of First
Citizens Common Shares for offering or sale in any jurisdiction, of the
initiation or threat of any proceeding for any such purpose, or of any request
by the SEC for the amendment or supplement of the Registration Statement or for
additional information.
6.04 PRESS RELEASES. Each of ICBC and First Citizens agrees that it
will not, without the prior approval of the other party, issue any press release
or written statement for general circulation relating to the transactions
contemplated hereby, except as otherwise required by applicable law or
regulation or the NASDAQ rules.
6.05 ACCESS; INFORMATION.
(a) Each of ICBC and First Citizens agrees that upon
reasonable notice and subject to applicable laws relating to the exchange of
information, it shall afford the other party and the other party's officers,
employees, counsel, accountants and other authorized representatives, 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 and, during such period, it
shall furnish promptly to such other party (i) a copy of each material report,
schedule and other document filed by it pursuant to federal or state securities
or banking laws, and (ii) all other information concerning the business,
properties and personnel of it as the other may reasonably request. In addition,
ICBC agrees to (i) provide First Citizens with notice and copies of written
materials provided to ICBC and Bank directors in connection with all of their
board meetings held after the date of this Agreement, other than any information
relating to the transactions contemplated hereunder, and (ii) invite
representatives of First Citizens to attend ICBC and Bank directors' meetings,
as mutually agreed upon by First Citizens and ICBC.
(b) Each of ICBC and First Citizens agrees that it will not,
and will cause its representatives not to, use any information obtained pursuant
to this Section 6.05 (as well as any other information obtained prior to the
date hereof in connection with the entering into of this Agreement) for any
purpose unrelated to the consummation of the transactions contemplated by this
Agreement. Subject to the requirements of law, each party will keep
confidential, and will cause its representatives to keep confidential, all
information and documents obtained pursuant to this Section 6.05 (as well as any
other information obtained prior to the date hereof in connection with the
entering into of this Agreement) unless such information (i) was already known
to such party, (ii) becomes available to such party from other sources not known
by such party to be bound by a confidentiality obligation, (iii) is disclosed
with the prior written approval of the party to which such information pertains
or (iv) is or becomes readily ascertainable from published information or trade
sources. In the event that this
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Agreement is terminated or the transactions contemplated by this Agreement shall
otherwise fail to be consummated, 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. No
investigation by either party of the business and affairs of the other shall
affect or be deemed to modify or waive any representation, warranty, covenant or
agreement in this Agreement, or the conditions to either party's obligation to
consummate the transactions contemplated by this Agreement.
(c) During the period from the date of this Agreement to the
Effective Time, each party shall promptly furnish the other with copies of all
monthly and other interim financial statements produced in the ordinary course
of business as the same shall become available.
6.06 ACQUISITION PROPOSALS; BREAK UP FEE.
(a) ICBC shall not, and shall cause its Subsidiaries and its
and its Subsidiaries' officers, directors, employees, advisors and other agents
not to, directly or indirectly, take any action to solicit, initiate, engage or
negotiate any proposals or offers from any person or entity, other than First
Citizens, or provide any confidential information to, discuss or negotiate with
any such person or entity, other than First Citizens, any Acquisition Proposal;
provided, however, that nothing contained in this section shall prohibit ICBC
from furnishing information to, or entering into discussion, negotiations or an
agreement with, any person or entity which makes an unsolicited Acquisition
Proposal if and to the extent that (a) the ICBC Board, after consultation with
and based upon the advice of counsel, determines in good faith that such action
is required to fulfill its fiduciary duties to the shareholders of ICBC under
applicable law and (b) before furnishing such information to, or entering into
discussions or negotiations with, such person or entity, ICBC provides immediate
written notice to First Citizens of such action, the identity of the bidder and
the substance of such Acquisition Proposal.
(b) In the event ICBC executes a definitive agreement in
respect of, or closes, an Acquisition Proposal, within two (2) years after the
date of termination of this Agreement pursuant to the provisions of Section
8.01(f), ICBC shall pay to First Citizens in immediately available funds the sum
of One Million Three Hundred Thousand Dollars ($1,300,000) within ten (10) days
after the earlier of such execution or closing.
6.07 AFFILIATE AGREEMENTS. Not later than the 15th day prior to the
mailing of the Proxy Statement, ICBC shall deliver to First Citizens a schedule
of each person that, to its knowledge, is or is reasonably likely to be, as of
the date of the ICBC Meeting, deemed to be an "affiliate" of ICBC (each, an
"ICBC Affiliate") as that term is used in Rule 145 under the Securities Act or
SEC Accounting Series Releases 130 and 135. ICBC shall use its reasonable best
efforts to cause each person who may be deemed to be an ICBC Affiliate to
execute and deliver to ICBC on or before the date of mailing of the Proxy
Statement an agreement in the form attached hereto as Exhibit B.
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6.08 CERTAIN POLICIES. Prior to the Effective Date, ICBC shall,
consistent with GAAP and on a basis mutually satisfactory to it and First
Citizens, (i) modify and change its loan, investment portfolio and real estate
valuation policies and practices (including loan classifications and levels of
reserves) so as to be applied on a basis that is consistent with that of First
Citizens and (ii) evaluate the need for any reserves including, but not limited
to, reserves relating to any outstanding litigation, any tax audits or any
liabilities to be incurred upon cancellation of any contracts as a result of the
Merger; provided, however, that ICBC shall not be obligated to take any such
action pursuant to this Section 6.08 unless and until First Citizens
acknowledges that all conditions to its obligation to consummate the Merger have
been satisfied and certifies to ICBC that First Citizens' representations and
warranties, subject to Section 5.02, are true and correct as of such date and
that First Citizens is otherwise material in compliance with this Agreement.
ICBC's representations, warranties and 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 modifications or changes undertaken solely on account of this
Section 6.08.
6.09 NASDAQ LISTING. First Citizens shall file a listing application,
or a NASDAQ Notification Form for Change in the Number of Shares Outstanding, as
required by NASDAQ, with respect to the First Citizens Common Shares to be
issued to the holders of ICBC Common Shares in the Merger.
6.10 REGULATORY APPLICATIONS.
(a) First Citizens and ICBC and their respective Subsidiaries
shall cooperate and use their respective reasonable best efforts to prepare all
documentation, to timely effect all filings and to obtain all permits, consents,
approvals and authorizations of all third parties and Governmental Authorities
necessary to consummate the transactions contemplated by this Agreement. Each of
First Citizens and ICBC shall have the right to review in advance, and to the
extent practicable each will consult with the other, in each case subject to
applicable laws relating to the exchange of information, with respect to, and
shall be provided in advance so as to reasonably exercise its right to review in
advance, all material written information submitted to any third party or any
Governmental Authority in connection with the transactions contemplated by this
Agreement. In exercising the foregoing right, each of the parties hereto agrees
to act reasonably and as promptly as practicable. Each party hereto agrees that
it will consult with the other party hereto with respect to the obtaining of all
material permits, consents, approvals and authorizations of all third parties
and Governmental Authorities necessary or advisable to consummate the
transactions contemplated by this Agreement and each party will keep the other
party apprised of the status of material matters relating to completion of the
transactions contemplated hereby.
(b) Each party agrees, upon request, to furnish the other
party with all information concerning itself, its Subsidiaries, directors,
officers and shareholders and such other matters as may be reasonably necessary
or advisable in connection with any filing, notice or application made by or on
behalf of such other party or any of its Subsidiaries to any third party or
Governmental Authority.
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6.11 EMPLOYMENT MATTERS; EMPLOYEE BENEFITS. It is understood and agreed
that nothing in this Section 6.11 or elsewhere in this Agreement shall be deemed
to be a contract of employment or be construed to give said employees any rights
other than as employees at will under applicable law and said employees shall
not be deemed to be third-party beneficiaries of this Agreement. Employees of
ICBC who become employees of First Citizens as a result of the Merger shall, as
determined by First Citizens, participate in either ICBC's Compensation and
Benefit Plans (for so long as First Citizens determines necessary or
appropriate) or in the employee benefit plans sponsored by First Citizens for
First Citizens' employees (with credit for their years of service with ICBC for
participation and vesting purposes under First Citizens' applicable plans),
including credit for years of service and for seniority under vacation and sick
pay plans and programs. In addition, to the extent ICBC employees participate in
First Citizens' group health plan (instead of continued participation in ICBC's
group health plan), First Citizens agrees to waive all restrictions and
limitations for pre-existing conditions under First Citizens' group health plan.
In the event an ICBC employee is terminated by First Citizens, other than for
cause, within a reasonable period of time after the Merger, such terminated ICBC
employee shall be entitled to receive up to a maximum of six (6) months of
severance pay based upon a formula of two (2) weeks' base pay for each year of
service.
6.12 NOTIFICATION OF CERTAIN MATTERS. Each of ICBC and First Citizens
shall give prompt notice to the other of any fact, event or circumstance known
to it that (i) is reasonably likely, individually or taken together with all
other facts, events and circumstances known to it, to result in any Material
Adverse Effect with respect to it or (ii) would cause or constitute a material
breach of any of its representations, warranties, covenants or agreements
contained herein.
6.13 DIVIDEND COORDINATION. It is agreed by the parties hereto that
they will cooperate to assure that as a result of the Parent Merger, during any
applicable period, there shall not be a payment of both a First Citizens and an
ICBC dividend to the ICBC shareholders.
6.14 ACCOUNTING AND TAX TREATMENT. Each of First Citizens and ICBC
agrees not to take any actions subsequent to the date of this Agreement that
would adversely affect (i) the ability of First Citizens and ICBC to treat the
Merger as a purchase in accordance with GAAP, or (ii) adversely affect the
ability of ICBC and the ability of the shareholders of ICBC to characterize the
Merger as a tax-free reorganization under Section 368(a) of the Code.
6.15 NO BREACHES OF REPRESENTATIONS AND WARRANTIES. Between the date of
this Agreement and the Effective Time, without the written consent of the other
party, each of First Citizens and ICBC will not do any act or suffer any
omission of any nature whatsoever which would cause any of the representations
or warranties made in Article V of this Agreement to become untrue or incorrect
in any material respect.
6.16 CONSENTS. Each of First Citizens and ICBC shall use its reasonable
best efforts to obtain any required consents to the transactions contemplated by
this Agreement.
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6.17 INSURANCE COVERAGE. ICBC shall use its best efforts to cause the
policies of insurance listed in the Disclosure Schedule to remain in effect
between the date of this Agreement and the Effective Date.
6.18 CORRECTION OF INFORMATION. Each of First Citizens and ICBC shall
promptly correct and supplement any information furnished under this Agreement
so that such information shall be correct and complete in all material respects
at all times, and shall include all facts necessary to make such information
correct and complete in all material respects at all times.
6.19 CONFIDENTIALITY. Except for the use of information in connection
with the Registration Statement described in Section 6.03 hereof and any other
governmental filings required in order to complete the transactions contemplated
by this Agreement, all information (collectively, the "Information") received by
each of ICBC and First Citizens, pursuant to the terms of this Agreement shall
be kept in strictest confidence; provided that, subsequent to the filing of the
Registration Statement with the Securities and Exchange Commission, this Section
6.19 shall not apply to information included in the Registration Statement or to
be included in the Proxy Statement to be sent to the shareholders of ICBC and
First Citizens under Section 6.03. ICBC and First Citizens agree that the
Information will be used only for the purpose of completing the transactions
contemplated by this Agreement. ICBC and First Citizens agree to hold the
Information in strictest confidence and shall not use, and shall not disclose
directly or indirectly any of such Information except when, after and to the
extent such Information (i) is or becomes generally available to the public
other than through the failure of ICBC or First Citizens to fulfill its
obligations hereunder, (ii) was already known to the party receiving the
Information on a nonconfidential basis prior to the disclosure or (iii) is
subsequently disclosed to the party receiving the Information on a
nonconfidential basis by a third party having no obligation of confidentiality
to the party disclosing the Information. In the event the transactions
contemplated by this Agreement are not consummated, ICBC and First Citizens
agree to return all copies of the Information provided to the other promptly.
6.20 SUPPLEMENTAL ASSURANCES.
(a) On the date the Registration Statement becomes effective
and on the Effective Date, ICBC shall deliver to First Citizens a certificate
signed by its principal executive officer and its principal financial officer to
the effect, to such officers' knowledge, that the information contained in the
Registration Statement relating to the business and financial condition and
affairs of ICBC, does not contain any untrue statement of a material fact or
omit to state any material fact required to be stated therein or necessary to
make the statements therein not misleading.
(b) On the date the Registration Statement becomes effective
and on the Effective Date, First Citizens shall deliver to ICBC a certificate
signed by its chief executive officer and its chief financial officer to the
effect, to such officers' knowledge, that the Registration Statement (other than
the information contained therein relating to the business and financial
condition and affairs of ICBC) does not contain any untrue
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statement of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein not misleading.
6.21 REGULATORY MATTERS. First Citizens, ICBC and each of their
respective Subsidiaries shall cooperate and each of them agrees to use its
reasonable best efforts to remediate any order, decree, agreement, memorandum of
understanding or similar agreement by First Citizens, ICBC or any of their
respective Subsidiaries with, or a commitment letter, board resolution or
similar submission by First Citizens, ICBC or any of their respective
Subsidiaries to, or supervisory letter from any Regulatory Authority to First
Citizens, ICBC or any of their respective Subsidiaries, to the satisfaction of
such Regulatory Authority.
6.22 EMPLOYMENT AGREEMENTS AND RETENTION ARRANGEMENTS. First Citizens
shall assume all of ICBC's obligations pursuant to those employment agreements
and retention bonus agreements, set out in the paragraph of ICBC's Disclosure
Schedule corresponding to Section 5.03(m).
6.23 FINANCIAL STATEMENTS. ICBC shall deliver to First Citizens,
promptly upon their completion, the financial statements of ICBC for the fiscal
year ended December 31, 2001 (the "ICBC 2001 Financial Statements"), and First
Citizens shall deliver to ICBC, promptly upon their completion, the financial
statements of First Citizens for the fiscal year ended December 31, 2001 (the
"First Citizens 2001 Financial Statements").
6.24 FIRST CITIZENS BOARD OF DIRECTORS STRUCTURE FOLLOWING THE PARENT
MERGER. At the Effective Time of the Parent Merger, First Citizens shall take
such actions as are necessary to increase the number of directors comprising the
First Citizens Board by two (2) members and shall fill the vacancies resulting
from such increase with two (2) members of the ICBC Board recommended by ICBC
and selected by First Citizens.
6.25 FIRST CITIZENS BANK BOARD OF DIRECTORS FOLLOWING THE SUBSIDIARY
MERGER. At the Effective Time of the Subsidiary Merger, First Citizens shall
take such actions as are necessary to increase the number of directors
comprising First Citizens Bank's Board of Directors by two (2) members and shall
fill the vacancies resulting from such increase with (2) members of the ICBC
Board recommended by ICBC and selected by First Citizens.
6.26 ESTABLISHMENT OF BANK COMMUNITY BOARD. First Citizens will
establish a Bank Community Board to be comprised of all current members of the
ICBC Board who wish to participate (other than those ICBC directors serving as
First Citizens or First Citizens Bank directors as provided for in Sections 6.24
and 6.25 above).
6.27 BANK SIGNAGE. Following the Effective Time, First Citizens would
anticipate, given the notable recognition associated with the "Citizens" and
"Norwalk" names, that it would continue to be featured in all signage at Bank
branches.
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6.28 VOTING AGREEMENTS. On the date of this Agreement, ICBC shall
forward to First Citizens Voting Agreements which have been executed by each of
the persons listed on the Form of Voting Agreement set forth on Exhibit A
hereto.
6.29 INDEMNIFICATION; DIRECTORS' AND OFFICERS' LIABILITY INSURANCE.
First Citizens shall indemnify each Person who served as a director or officer
of ICBC or Bank, as the case may be, on or before the Effective Time to the
fullest extent permitted pursuant to the ICBC Articles and the ICBC Code, and
the articles of association and bylaws of Bank, as the case may be, and
applicable provisions of Ohio and federal law from and against expenses,
including attorneys' fees, judgments, fines and amounts paid in settlement in
connection with any action, suit, claim or proceeding threatened, filed, pending
or completed during the three (3) year period after the Effective Time, by
reason of the fact that such Person was a director or officer of ICBC or Bank,
as the case may be; provided, however, that the individual making the request
for indemnification under this Section 6.29 provides First Citizens with written
notice of any such action, suit, claim or proceeding. First Citizens agrees to
purchase directors' and officers' liability insurance for a period of three
years from the Effective Date under commercially reasonable terms for such
insurance that serves to reimburse the present and former officers and directors
of ICBC or any of its Subsidiaries (determined at the Effective Time) with
respect to claims against such directors and officers arising from facts or
events which occurred before the Effective Time.
ARTICLE VII
CONDITIONS TO CONSUMMATION OF THE MERGER
7.01 CONDITIONS TO EACH PARTY'S OBLIGATION TO EFFECT THE MERGER. The
respective obligation of each of First Citizens and ICBC to consummate the
Merger is subject to the fulfillment or written waiver by First Citizens and
ICBC prior to the Effective Time of each of the following conditions:
(a) SHAREHOLDER APPROVALS. This Agreement and the Parent
Merger shall have been duly adopted by the requisite vote of (i) the
shareholders of ICBC and (ii) the shareholders of First Citizens.
(b) REGULATORY APPROVALS. All regulatory approvals required to
consummate the transactions contemplated hereby shall have been obtained and
shall remain in full force and effect and all statutory waiting periods in
respect thereof shall have expired and no such approvals shall contain (i) any
conditions, restrictions or requirements which the First Citizens Board
reasonably determines would either before or after the Effective Time have a
Material Adverse Effect on First Citizens and its Subsidiaries taken as a whole
after giving effect to the consummation of the Merger, or (ii) any conditions,
restrictions or requirements that are not customary and usual for approvals of
such type and which the First Citizens Board reasonably determines would either
before or after the Effective Time be unduly burdensome.
(c) NO INJUNCTION. No Governmental Authority of competent
jurisdiction shall have enacted, issued, promulgated, enforced or entered any
statute, rule, regulation, judgment, decree, injunction or other order (whether
temporary, preliminary
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or permanent) which is in effect and prohibits consummation of the transactions
contemplated by this Agreement.
(d) REGISTRATION STATEMENT. The Registration Statement shall
have become effective under the Securities Act and no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been initiated or threatened by the SEC.
(e) BLUE SKY APPROVALS. All permits and other authorizations
under state securities laws necessary to consummate the transactions
contemplated hereby and to issue the First Citizens Common Shares to be issued
in the Parent Merger shall have been received and be in full force and effect.
7.02 CONDITIONS TO OBLIGATION OF ICBC. The obligation of ICBC to
consummate the Merger is also subject to the fulfillment or written waiver by
ICBC prior to the Effective Time of each of the following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of First Citizens set forth in this Agreement shall be true and
correct, subject to Section 5.02, as of the date of this Agreement and as of the
Effective Date as though made on and as of the Effective Date (except that
representations and warranties that by their terms speak as of the date of this
Agreement or some other date shall be true and correct as of such date), and
ICBC shall have received a certificate, dated the Effective Date, signed on
behalf of First Citizens by the Chief Executive Officer and the Chief Financial
Officer of First Citizens to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF FIRST CITIZENS. First
Citizens shall have performed in all material respects all obligations required
to be performed by First Citizens under this Agreement at or prior to the
Effective Time, and ICBC shall have received a certificate, dated the Effective
Date, signed on behalf of First Citizens by the Chief Executive Officer and the
Chief Financial Officer of First Citizens to such effect.
(c) TAX OPINION. ICBC shall have received an opinion of Vorys,
Sater, Seymour and Pease LLP, counsel to ICBC, dated the Effective Date, to the
effect that, on the basis of facts, representations and assumptions set forth in
such opinion, (i) the Parent Merger constitutes a "reorganization" within the
meaning of Section 368 of the Code and (ii) no gain or loss will be recognized
by shareholders of ICBC who receive First Citizens Common Shares in exchange for
ICBC Common Shares, and cash in lieu of fractional share interests, other than
the gain or loss to be recognized as to cash received in lieu of fractional
share interests. In rendering its opinion, counsel to ICBC may require and rely
upon representations contained in letters from ICBC.
(d) OPINION OF YOUNG & ASSOCIATES, INC. ICBC shall have
received the written opinion of Young & Associates, Inc., dated the date of the
Proxy/Prospectus, to the effect that the Merger Consideration is fair to the
holders of ICBC Common Shares from a financial point of view as of such date.
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7.03 CONDITIONS TO OBLIGATION OF FIRST CITIZENS. The obligation of
First Citizens to consummate the Merger is also subject to the fulfillment or
written waiver by First Citizens prior to the Effective Time of each of the
following conditions:
(a) REPRESENTATIONS AND WARRANTIES. The representations and
warranties of ICBC set forth in this Agreement shall be true and correct,
subject to Section 5.02, as of the date of this Agreement and as of the
Effective Date as though made on and as of the Effective Date (except that
representations and warranties that by their terms speak as of the date of this
Agreement or some other date shall be true and correct as of such date) and
First Citizens shall have received a certificate, dated the Effective Date,
signed on behalf of ICBC by the Chief Executive Officer and the Chief Financial
Officer of ICBC to such effect.
(b) PERFORMANCE OF OBLIGATIONS OF ICBC. ICBC shall have
performed in all material respects all obligations required to be performed by
it under this Agreement at or prior to the Effective Time, and First Citizens
shall have received a certificate, dated the Effective Date, signed on behalf of
ICBC by the Chief Executive Officer and the Chief Financial Officer of ICBC to
such effect.
(c) AFFILIATE AGREEMENTS. First Citizens shall have received
the agreements referred to in Section 6.07 from each affiliate of ICBC.
ARTICLE VIII
TERMINATION
8.01 TERMINATION. This Agreement may be terminated, and the Merger
may be abandoned:
(a) MUTUAL CONSENT. At any time prior to the Effective Time,
by the mutual consent of First Citizens and ICBC, if the Board of Directors of
each so determines by vote of a majority of the members of its entire Board.
(b) BREACH; MATERIAL ADVERSE EFFECT. At any time prior to the
Effective Time, by First Citizens or ICBC, if its respective Board of Directors
so determines by vote of a majority of the members of its entire Board, in the
event of either: (i) a breach by the other party of any representation or
warranty contained herein (subject to the standard set forth in Section 5.02),
which breach cannot be or has not been cured within 30 days after the giving of
written notice to the breaching party of such breach; or (ii) a breach by the
other party of any of the covenants or agreements contained herein, which breach
cannot be or has not been cured within 30 days after the giving of written
notice to the breaching party of such breach, provided that such breach (whether
under (i) or (ii)) would be reasonably likely, individually or in the aggregate
with other breaches, to result in a Material Adverse Effect.
(c) DELAY. At any time prior to the Effective Time, by First
Citizens or ICBC, if its respective Board of Directors so determines by vote of
a majority of the members of its entire Board, in the event that the Parent
Merger is not consummated by April 30, 2002, except to the extent that the
failure of the Parent Merger then to be
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consummated arises out of or results from the knowing action or inaction of the
party seeking to terminate pursuant to this Section 8.01(c).
(d) NO APPROVAL. By ICBC or First Citizens, if its Board of
Directors so determines by a vote of a majority of the members of its entire
Board, in the event (i) the approval of any Governmental Authority required for
consummation of the Merger and the other transactions contemplated by this
Agreement shall have been denied by final nonappealable action of such
Governmental Authority or (ii) the ICBC shareholders or the First Citizens
shareholders fail to adopt this Agreement and the Parent Merger at the ICBC
Meeting or First Citizens Meeting, as applicable.
(e) AVERAGE PRICE OF FIRST CITIZENS COMMON SHARES DURING
VALUATION PERIOD. If the Average First Citizens Price (as defined below) of
First Citizens Common Shares is less than $19.50, then either ICBC or First
Citizens may, at its option, terminate this Agreement; provided, however, that
in the event that ICBC notifies First Citizens of its intent to terminate under
this Section 8.01(e) then prior to ICBC exercising any right of termination
hereunder, First Citizens may, at its option, for a period of ten (10) business
days, offer to distribute to ICBC shareholders, in connection with the share
exchange under Section 3.01 hereof, an additional number of First Citizens
Common Shares to offset the amount by which the Average First Citizens Closing
Price is below $19.50 ("First Citizens' Offer"). Thereafter, for a period of ten
(10) business days, ICBC shall have the opportunity to accept or reject First
Citizens' Offer. If ICBC rejects First Citizens' Offer, ICBC may terminate this
Agreement in accordance with the provisions hereof. For purposes of this
Agreement, the term "First Citizens Price" shall mean either (i) the price per
share of the last sale of First Citizens Common Shares or (ii) as to those
trading days in which no sales of First Citizens Common Shares are made, the
average of the bid and ask price for a First Citizens Common Share, all as
reported on NASDAQ at the close of the trading day by the NASD. The term
"Average First Citizens Price" shall mean the arithmetic mean of the First
Citizens Prices for the twenty (20) trading days immediately preceding the fifth
(5th) trading day prior to the consummation of the Merger (the "Valuation
Period").
(f) ACQUISITION PROPOSAL. By ICBC, if in compliance with the
provisions of Section 6.06(a), ICBC executes a definitive agreement in
connection with, or closes, an Acquisition Proposal.
8.02 EFFECT OF TERMINATION AND ABANDONMENT, ENFORCEMENT OF AGREEMENT.
In the event of termination of this Agreement and the abandonment of the Merger
pursuant to this Article VIII, no party to this Agreement shall have any
liability or further obligation to any other party hereunder except (i) as set
forth in Section 9.01 and (ii) that termination will not relieve a breaching
party from liability for any willful breach of this Agreement giving rise to
such termination. Notwithstanding anything contained herein to the contrary, the
parties hereto agree that irreparable damage will occur in the event that a
party breaches any of its obligations, duties, covenants and agreements
contained herein. It is accordingly agreed that the parties shall be entitled to
an injunction or injunctions to prevent breaches or threatened breaches of this
Agreement and to enforce specifically the terms and provisions of this Agreement
in any court of
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the United States or any state having jurisdiction, this being in addition to
any other remedy to which they are entitled by law or in equity.
ARTICLE IX
MISCELLANEOUS
9.01 SURVIVAL. No representations, warranties, agreements and covenants
contained in this Agreement shall survive the Effective Time (other than
Sections 6.11, 6.24, 6.25, 6.26, 6.27, and 6.29 and this Article IX which shall
survive the Effective Time) or the termination of this Agreement if this
Agreement is terminated prior to the Effective Time (other than Sections 6.04,
6.05(b), 6.06(b), 6.19, and 8.02, and this Article IX which shall survive such
termination).
9.02 WAIVER; AMENDMENT. Prior to the Effective Time, any provision of
this Agreement may be (i) waived by the party benefited by the provision, or
(ii) amended or modified at any time, by an agreement in writing between the
parties hereto executed in the same manner as this Agreement, except that after
the ICBC Meeting, this Agreement may not be amended if it would violate the OGCL
or the federal securities laws.
9.03 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to constitute an original.
9.04 GOVERNING LAW. This Agreement shall be governed by, and
interpreted in accordance with, the laws of the State of Ohio applicable to
contracts made and to be performed entirely within such State (except to the
extent that mandatory provisions of Federal law are applicable).
9.05 EXPENSES. Each party hereto will bear all expenses incurred by it
in connection with this Agreement and the transactions contemplated hereby,
except that printing and mailing expenses shall be shared between ICBC and First
Citizens in proportion to the number of shareholders of each to whom the
Proxy/Prospectus is delivered. All fees to be paid to Regulatory Authorities and
the SEC in connection with the transactions contemplated by this Agreement shall
be borne by First Citizens.
9.06 NOTICES. All notices, requests and other communications hereunder
to a party shall be in writing and shall be deemed given if personally
delivered, telecopied (with confirmation) or mailed by registered or certified
mail (return receipt requested) to such party at its address set forth below or
such other address as such party may specify by notice to the parties hereto.
-43-
If to ICBC, to:
Independent Community Banc Corp.
16 Executive Drive
Norwalk, Ohio 44857
Phone: (419) 744-3100
Fax: (419) 663-7745
Attention: Michael N. Clemens, President
James D. Heckelman, Chairman
With a copy to:
Vorys, Sater, Seymour and Pease LLP
2100 One Cleveland Center
1375 East Ninth Street
Cleveland, Ohio 44114-1724
Phone: (216) 479-6100
Fax: (216) 479-6060
Attention: John M. Saganich, Esq.
If to First Citizens, to:
First Citizens Banc Corp.
100 East Water Street
Sandusky, Ohio 44870
Phone: (419) 625-4121
Fax: (419) 627-3359
Attention: David A. Voight, President
With a copy to:
Buckingham, Lucal, McGookey & Zeiher Co., L.P.A.
414 Wayne Street
P.O. Box 929
Sandusky, Ohio 44870
Phone: (800) 410-0414
Fax: (419) 627-0009
Attention: James E. McGookey, Esq.
Squire, Sanders & Dempsey L.L.P.
4900 Key Tower
127 Public Square
Cleveland, Ohio 44114-1304
Phone: (216) 479-8500
Fax: (216) 479-8780
Attention: M. Patricia Oliver, Esq.
-44-
9.07 ENTIRE UNDERSTANDING; NO THIRD PARTY BENEFICIARIES. This
Agreement, the Voting Agreements and any separate agreement entered into by the
parties on even date herewith represent the entire understanding of the parties
hereto with reference to the transactions contemplated hereby and thereby and
this Agreement supersedes any and all other oral or written agreements
heretofore made (other than such Voting Agreements or any such separate
agreement). Except as provided in Section 6.29, nothing in this Agreement,
whether express or implied, is intended to confer upon any person, other than
the parties hereto or their respective successors, any rights, remedies,
obligations or liabilities under or by reason of this Agreement.
9.08 INTERPRETATION; EFFECT. When a reference is made in this Agreement
to Sections, Exhibits or Schedules, such reference shall be to a Section of, or
Exhibit or Schedule to, this Agreement unless otherwise indicated. The table of
contents and headings contained in this Agreement are for reference purposes
only and are not part of this Agreement. Whenever the words "include",
"includes" or "including" are used in this Agreement, they shall be deemed to be
followed by the words "without limitation."
9.09 WAIVER OF JURY TRIAL. Each of the parties hereto hereby
irrevocably waives any and all right to trial by jury in any legal proceeding
arising out of or related to this Agreement or the transactions contemplated
hereby.
[REST OF THIS PAGE HAS BEEN LEFT INTENTIONALLY BLANK]
-45-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed in counterparts by their duly authorized officers, all as of the day
and year first above written.
INDEPENDENT COMMUNITY BANC CORP.
By
-----------------------------------------------
Michael N. Clemens
President
By
-----------------------------------------------
James D. Heckelman
Chairman
FIRST CITIZENS BANC CORP.
By
-----------------------------------------------
David A. Voight
President
-46-
EXHIBIT A - FORM OF VOTING AGREEMENT
VOTING AGREEMENT
This Voting Agreement is entered into on __________, 2001 (this
"Agreement") by and between First Citizens Banc Corp. ("First Citizens") and
__________________ (the "Shareholder").
WHEREAS, the Shareholder owns _____________ common shares, without par
value (the "Common Shares"), of Independent Community Banc Corp., a corporation
organized and existing under the laws of the State of Ohio ("ICBC") and a bank
holding company registered under the Bank Holding Company Act of 1956, as
amended (all such Common Shares now owned and which may hereafter be acquired by
the Shareholder prior to the termination of this Agreement shall be referred to
herein as the ("Shares");
WHEREAS, First Citizens and ICBC propose to enter into an Agreement and
Plan of Merger, dated as of the date hereof (the "Merger Agreement"), which
provides, among other things, that ICBC will merge with and into First Citizens
and ICBC's wholly-owned bank subsidiary will merge with and into First Citizens'
bank subsidiary (this and other capitalized terms used and not defined herein
shall have the meanings given to such terms in the Merger Agreement);
WHEREAS, it is a condition to First Citizens entering into the Merger
Agreement that the Shareholder agree, and in order to induce First Citizens to
enter into the Merger Agreement, the Shareholder has agreed, to enter into this
Agreement; and
NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements contained herein, and intending to be legally bound
hereby, the parties hereby agree as follows:
ARTICLE 1
VOTING OF CONTROL SHARES
1.1 VOTING AGREEMENT. The Shareholder hereby agrees that during the
time this Agreement is in effect, at any meeting of the shareholders of ICBC,
however called, and in any action by consent of the shareholders of ICBC, the
Shareholder shall, subject to the Shareholder's fiduciary duty under Ohio law,
vote the Shares: (i) in favor of the Parent Merger and the Merger Agreement (as
amended from time to time) and (ii) against any proposal for any
recapitalization, merger, sale of assets or other business combination between
ICBC and any person or entity other than First Citizens or any other action or
agreement that would result in a breach of any covenant, representation or
warranty or any other obligation or agreement of ICBC under the Merger Agreement
or that would result in any of the conditions to the obligations of ICBC under
the Merger Agreement not being fulfilled.
ARTICLE 2
REPRESENTATION AND WARRANTIES
The Shareholder hereby represents and warrants to First Citizens as
follows:
2.1 AUTHORITY RELATIVE TO THIS AGREEMENT. The Shareholder has all
necessary power and authority or capacity, as the case may be, to execute and
deliver this Agreement, to perform the Shareholder's obligations hereunder and
to consummate the transactions contemplated hereby. This Agreement has been duly
and validly executed and delivered by the Shareholder and constitutes a legal,
valid and binding obligation of the Shareholder, enforceable against the
Shareholder in accordance with its terms.
2.2 % VOTING POWER. The Shares represent ___% of the voting power of
the outstanding shares of capital stock of ICBC.
2.3 NO CONFLICT.
(a) The execution and delivery of this Agreement by the
Shareholder does not, and the performance of this Agreement by the
Shareholder will not (i) conflict with or violate any law, rule,
regulation, order, judgment or decree applicable to the Shareholder or
by which the Shares are bound, or (ii) result in any breach of or
constitute a default (or event that with notice or lapse of time or
both would become a default) under, or give to others any rights of
termination, amendment, acceleration or cancellation of, or result in
the creation of a lien or encumbrance on any of the Shares pursuant to,
any note, bond, mortgage, indenture, contract, agreement, lease,
license, permit, franchise or other instrument or obligation to which
the Shareholder is a party or by which the Shareholder is or any of the
Shares are bound, except, in the case of clauses (i) and (ii), for any
such conflicts, violations, breaches, defaults or other occurrences
which would not prevent or delay the performance by the Shareholder of
the Shareholder's obligations under this Agreement.
(b) The execution and delivery of this Agreement by the
Shareholder does not, and the performance of this Agreement by the
Shareholder will not, require any consent, approval, authorization or
permit of, or filing with or notification to, any federal, state, local
or foreign regulatory body.
2.4 TITLE TO THE SHARES. The Shareholder is the sole owner of the
number and class of shares of the capital stock of ICBC specified on Exhibit A
hereto, free and clear of all security interests, liens, claims, pledges,
options, rights of first refusal, agreements, limitations on voting rights,
charges and other encumbrances of any nature whatsoever. The Shareholder has not
appointed or granted any proxy, which appointment or grant is still effective,
with respect to the Shares. The Shareholder has sole voting power with respect
to the Shares.
2
ARTICLE 3
MISCELLANEOUS
3.1 TERMINATION. This Agreement shall terminate on the earlier to occur
of (i) the date of consummation of the Merger and (ii) the date of the
termination of the Merger Agreement.
3.2 SPECIFIC PERFORMANCE. The Shareholder agrees that irreparable
damage would occur in the event any provision of this Agreement was not
performed in accordance with the terms hereof and that First Citizens shall be
entitled to specific performance of the terms hereof, in addition to any other
remedy at law or in equity.
3.3 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties and supersedes all prior agreements and understandings with
respect to the subject matter hereof.
3.4 AMENDMENT. This Agreement may not be amended except by an
instrument in writing signed by both of the parties hereto.
3.5 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 conditions and provisions of this Agreement shall 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 materially
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
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 hereby are fulfilled to the fullest extent
possible.
3.6 GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio.
3.7 COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original, but all of which shall constitute
one and the same agreement.
3.8 ASSIGNMENTS. This Agreement shall not be assigned by operation of
law or otherwise.
3.9 PARTIES IN INTEREST. This Agreement shall be binding upon and inure
solely to the benefit of each party hereto, and nothing in this Agreement,
express or implied, is intended to or shall confer upon any person, any right,
benefit or remedy of any nature whatsoever under or by reason of this Agreement.
3
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed on the day first written above.
FIRST CITIZENS BANC CORP.
By:
-------------------------------------
Name:
-------------------------------
Title:
------------------------------
SHAREHOLDER
Name:
-----------------------------------
[ATTACHED TO THIS EXHIBIT A IS A LIST OF SHAREHOLDERS WHO WILL EXECUTE
A VOTING AGREEMENT AND THE NUMBER OF SHARES THAT THEY EACH OWN]
4
SHAREHOLDERS WHO WILL EXECUTE A VOTING AGREEMENT
AND THE NUMBER OF SHARES THAT THEY EACH OWN
SHAREHOLDER SHARES
----------- ------
William F. Boose 4,872
Michael L. Clemens 690.32183627
Robin L. Degraff 60
James D. Heckelman 6,325.12795408
John M. Kovesdi, Jr. 545.73466461
Leslie D. Stoneham 818.76065961
Jerry E. Stover 2,519.08926835
Richard C. Westhofen 358.13951878
Daniel J. White 306.77256439
5
EXHIBIT B - FORM OF ICBC AFFILIATE AGREEMENT
_____________, 200_
First Citizens Banc Corp.
100 East Water Street
Sandusky, Ohio 44870
Ladies and Gentlemen:
I have been advised that as of the date hereof I may be deemed to be an
"affiliate" of Independent Community Banc Corp. ("ICBC"), as that term is
defined for purposes of Paragraphs (c) and (d) of Rule 145 of the Rules and
Regulations (the "Rules and Regulations") of the Securities and Exchange
Commission (the "Commission") promulgated under the Securities Act of 1933, as
amended (the "Act").
Pursuant to the terms of the Agreement and Plan of Merger by and
between First Citizens Banc Corp. ("First Citizens") and ICBC dated as of
November 1, 2001 (the "Merger Agreement"), providing for the merger of ICBC with
and into First Citizens (the "Merger"), and as a result of the Merger, I will
receive shares of First Citizens common shares ("First Citizens Common Shares")
in exchange for ICBC common shares ("ICBC Stock") owned by me at the Effective
Time (as defined and determined pursuant to the Merger Agreement). This letter
is being delivered pursuant to Section 6.07 of the Merger Agreement. I represent
and warrant to First Citizens that in such event:
A. I will not sell, assign or transfer the First Citizens Common Shares
which I receive as aforesaid in violation of the Act or the Rules and
Regulations.
B. I have carefully read this letter and the Merger Agreement and have
discussed their requirements and other applicable limitations upon my ability to
sell, transfer or otherwise dispose of the First Citizens Common Shares, to the
extent I feel necessary, with my counsel or counsel for ICBC. I understand that
First Citizens is relying on the representations I am making in this letter and
I hereby agree to hold harmless and indemnify First Citizens and its officers
and directors from and against any losses, claims, damages, expenses (including
reasonable attorneys' fees), or liabilities ("Losses") to which First Citizens
or any officer or director of First Citizens may become subject under the Act or
otherwise as a result of the untruth, breach, or failure of such
representations.
C. I have been advised that the issuance of the First Citizens Common
Shares issued to me pursuant to the Merger will have been registered with the
Commission under
__________, 200_
Page 2
the Act on a Registration Statement on Form S-4. However, I have also been
advised that since I may be deemed to be an affiliate under the Rules and
Regulations at the time the Merger was submitted for a vote of the shareholders
of ICBC, that the First Citizens Common Shares must be held by me indefinitely
unless (i) my subsequent distribution of First Citizens Common Shares has been
registered under the Act; (ii) a sale of the First Citizens Common Shares is
made in conformity with the volume and other applicable limitations of a
transaction permitted by Rule 145 promulgated by the Commission under the Act
and as to which First Citizens has received satisfactory evidence of the
compliance and conformity with said Rule, or (iii) a transaction in which, in
the opinion of Squire, Sanders & Dempsey L.L.P. (or other counsel reasonably
acceptable to First Citizens) or in accordance with a no-action letter from the
Commission, some other exemption from registration is available with respect to
any such proposed sale, transfer or other disposition of the First Citizens
Common Shares.
D. I also understand that stop transfer instructions will be given to
First Citizens' transfer agent with respect to any First Citizens Common Shares
which I receive in the Merger and that there will be placed on the certificates
for such First Citizens Common Shares, a legend stating in substance:
"The shares represented by this certificate have been
issued or transferred to the registered holder as a result of
a transaction to which Rule 145 under the Securities Act of
1933, as amended (the "Act"), applies. The shares represented
by this certificate may not be sold, transferred or assigned,
and the issuer shall not be required to give effect to any
attempted sale, transfer or assignment, except pursuant to (i)
an effective registration statement under the Act, (ii) a
transaction permitted by Rule 145 and as to which the issuer
has received reasonable and satisfactory evidence of
compliance with the provisions of Rule 145, or (iii) a
transaction in which, in the opinion of Squire, Sanders &
Dempsey L.L.P. or other counsel satisfactory to the issuer or
in accordance with a "no action" letter from the staff of the
Securities and Exchange Commission, such shares are not
required to be registered under the Act."
__________, 200_
Page 3
It is understood and agreed that the legend set forth in Paragraph D
above shall be removed and any stop order instructions with respect thereto
shall be canceled upon receipt of advice from Squire, Sanders & Dempsey L.L.P.
or other counsel satisfactory to First Citizens that such actions are
appropriate under the then-existing circumstances.
Very truly yours,
Date: , 200_
------------------------------ ----------------------------
(Name of Affiliate)
PLEASE PRINT YOUR NAME HERE:
----------------------------
Accepted this _____ day of
__________, 200_
FIRST CITIZENS BANC CORP.
By
-------------------------------------------------
David A. Voight, President