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EXHIBIT 2.1
AGREEMENT AND PLAN OF MERGER
BY AND AMONG
CITI-BANCSHARES, INC.,
HUNTINGTON BANCSHARES FLORIDA, INC.
AND
HUNTINGTON BANCSHARES, INCORPORATED
DATED AS OF OCTOBER 31, 1996
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of October 31, 1996, by and among CITI-BANCSHARES, INC.,
("Citi-Bancshares"), a Florida corporation having its principal office located
in Leesburg, Florida; HUNTINGTON BANCSHARES INCORPORATED ("Huntington"), a
Maryland corporation having its principal office located in Columbus, Ohio; and
HUNTINGTON BANCSHARES FLORIDA, INC. ("Huntington-Florida"), an Ohio corporation
and a wholly owned subsidiary of Huntington having its principal office located
in Columbus, Ohio.
PREAMBLE
The Boards of Directors of Citi-Bancshares, Huntington-Florida, and
Huntington are of the opinion that the transactions described herein are in the
best interests of the parties and their respective shareholders. This Agreement
provides for the acquisition of Citi-Bancshares by Huntington pursuant to the
merger of Citi-Bancshares with and into Huntington-Florida. At the Effective
Time of such merger, the outstanding shares of the capital stock of Citi-
Bancshares shall be converted (except as provided herein) into the right to
receive the common stock of Huntington, cash, or a combination thereof. As a
result of the Merger, Citi-Bancshares' shareholders, who so elect or are
otherwise entitled to receive shares of Huntington Common Stock in exchange for
their shares of Citi-Bancshares Common Stock, shall become shareholders of
Huntington, and Huntington-Florida as the Surviving Corporation shall continue
to conduct its business and operations as a wholly-owned subsidiary of
Huntington. The transactions described in this Agreement are subject to the
approvals of the shareholders of Citi-Bancshares, the Board of Governors of the
Federal Reserve System, the Office of the Comptroller of the Currency, and the
Florida State Banking Department and other applicable Regulatory Authorities,
and the satisfaction of certain other conditions described in this Agreement. It
is the intention of the parties to this Agreement that for federal income tax
purposes, the Merger shall qualify as a "reorganization" within the meaning of
Section 368(a) of the Internal Revenue Code, and for accounting purposes shall
qualify for treatment as a purchase.
Certain terms used in this Agreement are defined in Section 11.1 of
this Agreement.
NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants and agreements set forth herein, the
parties agree as follows:
ARTICLE 1
TRANSACTIONS AND TERMS OF MERGER
1.1 MERGER. Citi-Bancshares shall be merged (the "Merger") with
and into Huntington-Florida in accordance with the provisions of and with the
effect provided in Sections 607.1101, 607.1103, 607.1105, 607.1106 and 607.1107
of the FBCA, Sections 1701.78, 1701.81
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and 1701.82 of the ORC and subject to the provisions of this Agreement. The
transactions contemplated in this Agreement shall be consummated at the
Effective Time. Subject the terms and conditions hereof, the Board of Directors
of Citi-Bancshares shall recommend that Citi-Bancshares' shareholders vote in
favor of this Agreement and the Merger. The Merger shall be consummated
pursuant to the terms of this Agreement, which has been approved and adopted by
a majority of the respective Boards of Directors of Citi-Bancshares, Huntington,
and Huntington-Florida.
1.2 TIME AND PLACE OF CLOSING. The Closing will take place at
9:00 A.M. on the date that the Effective Time occurs (or the immediately
preceding day if the Effective Time is earlier than 9:00 A.M.), or at such
other time as the Parties, acting through their chief executive officers or
chief financial officers, may mutually agree. The Closing shall be held at
such place as may be mutually agreed upon by the Parties.
1.3 EFFECTIVE TIME. The Merger and other transactions
contemplated by this Agreement shall become effective on the date and at the
time specified in the Articles of Merger filed with the Florida Department of
State and in the Certificate of Merger filed with the Secretary of the State of
Ohio (the "Effective Time"), and not prior to January 15, 1997. Subject to the
terms and conditions hereof, unless otherwise mutually agreed upon in writing by
the chief executive officers or chief financial officers of each Party, the
Parties shall use their reasonable efforts to cause the Effective Time to occur
within five business days following the last to occur of (i) the effective date
(including expiration of any applicable waiting period) of the last required
Consent of any Regulatory Authority having authority over and approving or
exempting the Merger, and (ii) the date on which the shareholders of
Citi-Bancshares approve this Agreement as required by applicable Law.
1.4 EXECUTION OF STOCK OPTION AGREEMENT. On the first calendar
day following the execution and delivery of this Agreement by the Parties and as
a condition and inducement to Huntington's entering into this Agreement,
Citi-Bancshares shall execute and deliver to Huntington a stock option agreement
(the "Stock Option Agreement"), in substantially the form of Exhibit 1, pursuant
to which Citi-Bancshares shall grant to Huntington an option to purchase shares
of Citi-Bancshares Common Stock not to exceed 19.9% of the outstanding shares of
Citi-Bancshares Common Stock.
ARTICLE 2
TERMS OF MERGER
2.1 CHARTER. The Articles of Incorporation of Huntington-Florida
in effect immediately prior to the Effective Time shall be the Articles of
Incorporation of the Surviving Corporation until otherwise amended or repealed.
2.2 REGULATIONS. The Regulations of Huntington-Florida in
effect immediately prior to the Effective Time shall be the Regulations of the
Surviving Corporation until otherwise amended or repealed.
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2.3 DIRECTORS AND OFFICERS. The directors of Huntington-Florida
in office immediately prior to the Effective Time, together with such additional
persons as may thereafter be elected, shall serve as the directors of the
Surviving Corporation from and after the Effective Time in accordance with the
Regulations of the Surviving Corporation. The officers of Huntington-Florida in
office immediately prior to the Effective Time, together with such additional
persons as may thereafter be elected, shall serve as the officers of the
Surviving Corporation from and after the Effective Time in accordance with the
Regulations of the Surviving Corporation.
2.4 NAME. The name of the Surviving Corporation shall be
"Huntington Bancshares Florida, Inc."
ARTICLE 3
MANNER OF CONVERTING SHARES
3.1 CONVERSION OF SHARES. Subject to the provisions of this Article 3,
at the Effective Time, by virtue of the Merger and without any action on the
part of Huntington, Citi-Bancshares, Huntington-Florida or the shareholders of
any of the foregoing, the shares of the constituent corporations shall be
converted as follows:
(a) Each share of Huntington Capital Stock issued and
outstanding immediately prior to the Effective Time shall remain issued
and outstanding from and after the Effective Time.
(b) Each share of Huntington-Florida Common Stock issued and
outstanding at the Effective Time shall remain issued and outstanding
from and after the Effective Time.
(c) Each share of Citi-Bancshares Common Stock (excluding shares
held by any Citi-Bancshares Company or any Huntington Company, in each
case other than in a fiduciary capacity or as a result of debts
previously contracted) issued and outstanding at the Effective Time shall
cease to be outstanding and shall be converted into by virtue of the
Merger and without further action on the part of the holders thereof, and
exchanged for the right to receive, pursuant to Section 4.1, any one of
the following, payable to the holder of such shares of Citi-Bancshares
Common Stock without interest thereon, less any required withholding of
taxes, upon surrender of the certificate formerly representing such share
(a "Certificate") in accordance with Section 4.1, in each case as such
holder shall elect in accordance with Section 4.1:
(i) a number of shares of Huntington Common Stock equal
to the product of $30.00 and the Exchange Ratio (as defined below)
(the "Stock Consideration");
(ii) $30.00 (the "Cash Price") in cash (the "Cash
Consideration"); and
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(iii) (x) a number of shares of Huntington Common Stock
(the "Mixed Stock Amount") equal to the product of $18.00 and the
Exchange Ratio, plus (y) $12.00 in cash (the "Mixed
Consideration");
provided, that the aggregate amount of cash payments that shall be issued in the
Merger to satisfy elections to receive the Cash Consideration (a "Cash
Election") or the Mixed Consideration (a "Mixed Election") together with any
cash paid for fractional shares pursuant to Section 3.4 hereof or for dissenting
shareholders pursuant to Section 3.5 hereof, if any, shall not exceed 40% of the
Aggregate Merger Consideration paid in the Merger (the "Cash Limitation"); and
provided further, that holders of record of fewer than 100 shares of
Citi-Bancshares Common Stock are not entitled to elect the "Mixed
Consideration".
(d) Each of any such form of consideration elected by a holder of
shares of Citi-Bancshares Common Stock is referred to herein as the "Merger
Consideration," and the aggregate of all Merger Consideration to be paid to
holders of shares of Citi-Bancshares Common Stock in connection with the Merger
is referred to hereinafter as the "Aggregate Merger Consideration."
(e) Within ten business days after the Election Deadline, Huntington
shall cause the exchange agent selected by Huntington (the "Exchange Agent") to
effect the allocation among the holders of Citi-Bancshares Common Stock as
follows:
(i) if the amount of cash that would be issued upon
conversion in the Merger of shares in respect of which Mixed
Elections ("Mixed Election Shares") and Cash Elections ("Cash
Election Shares") have been made is less than or equal to the Cash
Limitation, then all Cash Election Shares shall be converted into
the right to receive the Cash Consideration, and all Mixed
Election Shares shall be converted into the right to receive the
Mixed Consideration;
(ii) If the amount of cash that would be issued upon the
conversion of the Cash Election Shares, without regard to cash
that would be issued upon the conversion of the Mixed Election
Shares, is greater than the Cash Limitation, then (1) all Mixed
Election Shares shall be converted into the right to receive the
Stock Consideration, (2) the Exchange Agent shall select from
among the holders of Cash Election Shares (other than shares as to
which dissenters rights are asserted), by random selection, a
sufficient number of such holders ("Stock Designees") such that
the amount of cash that will be issued in the Merger equals as
closely as practicable the Cash Limitation, and all shares held by
the Stock Designees shall be converted into the right to receive
the Stock Consideration, and (3) the Cash Election Shares not held
by Stock Designees shall be converted into the right to receive
the Cash Consideration; and
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(iii) If the amount of cash that would be issued upon the
conversion of the Cash Election Shares is less than the Cash
Limitation, but the amount of cash that would be issued upon the
conversion of the Cash Election Shares and the Mixed Election
Shares is greater than the Cash Limitation, then (1) all Cash
Election Shares (other than shares as to which dissenters rights
are asserted) shall be converted into the right to receive the
Cash Consideration, (2) the Exchange Agent shall select from among
the holders of Mixed Election Shares, by random selection, a
sufficient number of Stock Designees such that the amount of cash
that will be issued in the Merger equals as closely as practicable
the Cash Limitation, and all shares held by the Stock Designees
shall be converted into the right to receive the Stock
Consideration, and (3) the Mixed Election Shares not held by Stock
Designees shall be converted into the right to receive the Mixed
Consideration.
(f) The exchange ratio (the "Exchange Ratio") for determining
the number of shares of Huntington Common Stock to be issued in exchange for
each share of Citi-Bancshares Common Stock held by any holder of shares of
Citi-Bancshares Common Stock who elects to receive the Stock Consideration (a
"Stock Election") or who makes a Mixed Election, as the case may be, shall be
determined by dividing $1.00 by the average of the last sale prices for the
Huntington Common Stock as reported in the Nasdaq National Market for the five
trading days ending on the fifth trading day immediately prior to the Effective
Time (the "Average Closing Price").
(g) Pursuant to the Huntington Rights Agreement, each share of
Huntington Common Stock issued in connection with the Merger upon conversion of
Citi-Bancshares Common Stock shall be accompanied by a Huntington Right.
3.2 ANTI-DILUTION PROVISIONS. In the event Huntington changes the
number of shares of Huntington Common Stock issued and outstanding prior to the
Effective Time as a result of a stock split, stock dividend, or similar
recapitalization with respect to such stock and the record date therefor (in
the case of a stock dividend) or the effective date thereof (in the case of a
stock split or similar recapitalization for which a record date is not
established) shall be prior to the Effective Time, the Exchange Ratio shall be
proportionately adjusted.
3.3 SHARES HELD BY CITI-BANCSHARES OR HUNTINGTON. Each of the shares
of Citi-Bancshares Common Stock held by any Citi-Bancshares Company or by any
Huntington Company, in each case other than in a fiduciary capacity or as a
result of debts previously contracted, shall be canceled and retired at the
Effective Time and no consideration shall be issued in exchange therefor.
3.4 FRACTIONAL SHARES. Notwithstanding any other provision of this
Agreement, each holder of shares of Citi-Bancshares Common Stock exchanged
pursuant to the Merger who would otherwise have been entitled to receive a
fraction of a share of Huntington Common Stock (after taking into account all
certificates delivered by such holder) shall receive, in lieu thereof,
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cash (without interest) in an amount equal to such fractional part of a share
of Huntington Common Stock multiplied by the Average Closing Price. No such
holder will be entitled to dividends, voting rights, or any other rights as a
shareholder in respect of any fractional shares.
3.5 DISSENTING SHAREHOLDERS. The Parties agree that Citi-Bancshares
shareholders are not entitled to any dissenters' rights of appraisal under the
FBCA because Citi-Bancshares Common Stock is traded on the Nasdaq National
Market. In the event that the Citi-Bancshares Common Stock fails to remain so
traded on the Nasdaq National Market, then any holder of shares of
Citi-Bancshares Common Stock who perfects his dissenters' rights in accordance
with and as contemplated by Section 607.1301 et seq. of the FBCA shall be
entitled to receive the value of such shares in cash as determined pursuant to
such provision of Law; provided, that no such payment shall be made to any
dissenting shareholder unless and until such dissenting shareholder has complied
with the applicable provisions of the FBCA and surrendered to Citi-Bancshares
the certificate or certificates representing the shares for which payment is
being made. In the event that after the Effective Time, a dissenting
shareholder of Citi-Bancshares fails to perfect, or effectively withdraws or
loses, his right to appraisal and of payment for his shares, CBI shall issue and
deliver the consideration to which such holder of shares of Citi-Bancshares
Common Stock is entitled under this Article 3 (without interest) upon surrender
by such holder of the certificate or certificates representing shares of
Citi-Bancshares Common Stock held by him.
ARTICLE 4
ELECTION; EXCHANGE OF SHARES
4.1 ELECTION AND EXCHANGE PROCEDURES.
(a) Each record holder of shares of Citi-Bancshares Common
Stock (other than shares held by any Citi-Bancshares Company or any Huntington
Company, in each case other than in a fiduciary capacity or as a result of debts
previously contracted, and excluding shares held by shareholders who perfect
their statutory dissenters' rights, if any, as provided in Section 3.4 of this
Agreement) issued and outstanding immediately prior to the Effective Time shall
be entitled to submit a request specifying one of the following elections to
convert such record holder's shares of Citi-Bancshares Common Stock into (i)
the Cash Consideration, in the case of a shareholder making a Cash Election,
(ii) the Stock Consideration, in the case of a shareholder making a Stock
Election, or (iii) the Mixed Consideration, in the case of a shareholder making
a Mixed Election, or to indicate that such record holder has no preference as to
the receipt of Cash Consideration, Stock Consideration or Mixed Consideration
for such Shares (a "Non-Election"). Shares in respect of which a Non-Election is
made (including shares of Citi-Bancshares Common Stock in respect of which no
election is made prior to the Election Deadline (as defined below) or shares in
respect of which a Non-Election is deemed to have been made pursuant to this
Section 4.1(a) (collectively, "Non-Election Shares") shall be deemed to be
Shares in respect of which a Stock Election has been made; provided that if a
record holder holds less than 100 shares of record and such record holder's
shares are Non-Election Shares, then such record holder shall be deemed to have
made a Cash Election.
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(b) Elections pursuant to Section 4.1(a) shall be made on
the form of letter of transmittal and form of election (the "Letter of
Transmittal and Form of Election") to be provided by the Exchange Agent to
holders of record of Shares, together with instructions for use in effecting the
surrender of the Certificates for payment therefor, as soon as practicable
following the Effective Time. The Letter of Transmittal and Form of Election
shall specify that delivery shall be effected, and risk of loss and title to the
Certificates transmitted therewith shall pass, only upon proper delivery of the
Certificates to the Exchange Agent. Elections shall be made by mailing to the
Exchange Agent a duly completed Letter of Transmittal and Form of Election in
accordance with this Section 4.1(b). To be effective as an election, a Letter
of Transmittal and Form of Election must be (i) properly completed, signed and
submitted to the Exchange Agent at its designated office (and so received by the
Exchange Agent by the date specified in such Letter of Transmittal and Form of
Election (the "Election Deadline"), which shall not be less than 20 business
days after the date such Letter of Transmittal and Form of Election is first
mailed to former holders of Citi-Bancshares Common Stock) and (ii) accompanied
by the Certificates representing the shares of Citi-Bancshares Common Stock as
to which the election is being made (or by an appropriate guarantee of delivery
of such Certificates by a commercial bank or trust Citi-Bancshares in the United
States or a member of a registered national security exchange or of the National
Association of Securities Dealers, Inc., provided such Certificates are in fact
delivered to the Exchange Agent within eight business days after the date of
execution of such guarantee of delivery). Huntington shall determine, in its
sole and absolute discretion, which authority it may delegate in whole or in
part to the Exchange Agent, whether any Letter of Transmittal and Form of
Election has been properly completed, signed and submitted or revoked. The
decision of Huntington (or the Exchange Agent, as the case may be) in such
matters shall be conclusive and binding. Neither Huntington nor the Exchange
Agent will be under any obligation to notify any person of any defect in a
Letter of Transmittal and Form of Election submitted to the Exchange Agent.
(c) Upon surrender of Certificates for cancellation to
the Exchange Agent, together with such Letter of Transmittal and Form of
Election duly completed and executed and any other documents required by such
instructions, the holder of such Certificates shall be entitled to receive for
each of the Shares formerly represented by such Certificates (x) the Merger
Consideration elected by such holder pursuant to Section 3.1(c), (y) cash in
lieu of any fractional shares of Huntington Common Stock to which such holder
is entitled pursuant to Section 3.4, and (z) any dividends or distributions to
which such holder may be entitled pursuant to Section 4.2, in each such case
without any interest thereon and less any required withholding of taxes, and
the Certificates so surrendered shall forthwith be canceled. If payment is to
be made to a person other than the person in whose name a Certificate so
surrendered is registered on the stock transfer books of Citi-Bancshares, it
shall be a condition of payment that the Certificate so surrendered shall be
properly endorsed and otherwise in proper form for transfer and that the person
requesting such payment shall pay to the Exchange Agent any transfer or other
taxes required by reason of the payment to a person other than the registered
holder of the Certificate surrendered, or shall establish to the satisfaction
of the Exchange Agent that such tax has been paid or is not applicable.
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(d) Huntington shall not be obligated to deliver the
consideration to which any former holder of Citi-Bancshares Common Stock is
entitled as a result of the Merger until such holder surrenders such holder's
Certificate or Certificates for exchange as provided in this Section 4.1. The
Certificates so surrendered shall be duly endorsed as the Exchange Agent may
reasonably require. Any other provision of this Agreement notwithstanding,
neither Huntington, the Surviving Corporation nor the Exchange Agent shall be
liable to a holder of Citi-Bancshares Common Stock for any amounts paid or
property delivered in good faith to a public official pursuant to any
applicable abandoned property Law. Approval of this Agreement by the
shareholders of Citi-Bancshares shall constitute ratification of the
appointment of the Exchange Agent.
4.2 RIGHTS OF FORMER CITI-BANCSHARES SHAREHOLDERS. At the
Effective Time, the stock transfer books of Citi-Bancshares shall be closed as
to holders of Citi-Bancshares Common Stock as of the close of business on the
day that is one (1) business day prior to the Effective Time and no transfer of
Citi-Bancshares Common Stock by any such holder shall thereafter be made or
recognized. Until surrendered for exchange in accordance with the provisions
of Section 4.1 of this Agreement, each Certificate theretofore representing
shares of Citi-Bancshares Common Stock (other than shares to be canceled
pursuant to Section 3.3 of this Agreement) shall from and after the Effective
Time represent for all purposes only the right to receive the Merger
Consideration provided in Section 3.1 of this Agreement in exchange therefor,
subject, however, to the Surviving Corporation's obligation to pay any
dividends or make any other distributions with a record date prior to the
Effective Time which have been declared or made by Citi-Bancshares in respect
of such shares of Citi-Bancshares Common Stock in accordance with the terms of
this Agreement and which remain unpaid at the Effective Time. To the extent
required by Law, former shareholders of record of Citi-Bancshares shall be
entitled to vote after the Effective Time at any meeting of Huntington
shareholders the number of whole shares of Huntington Common Stock into which
their respective shares of Citi-Bancshares Common Stock are converted,
regardless of whether such holders have exchanged their certificates
representing Citi-Bancshares Common Stock for certificates representing
Huntington Common Stock in accordance with the provisions of this Agreement.
Whenever a dividend or other distribution is declared by Huntington on the
Huntington Common Stock, the record date for which is at or after the Effective
Time, the declaration shall include dividends or other distributions on all
shares of Huntington Common Stock issuable pursuant to this Agreement, no
dividend or other distribution payable to the holders of record of Huntington
Common Stock as of any time subsequent to the Effective Time shall be delivered
to the holder of any certificate representing shares of Citi-Bancshares Common
Stock issued and outstanding at the Effective Time until such holder surrenders
such certificate for exchange as provided in Section 4.1 of this Agreement.
However, upon surrender of such Citi-Bancshares Common Stock Certificate, both
the Huntington Common Stock certificate (together with all such undelivered
dividends or other distributions, without interest) and any undelivered cash
payments payable hereunder (without interest) shall be delivered and paid with
respect to each share represented by such Certificate.
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ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF CITI-BANCSHARES
Citi-Bancshares hereby represents and warrants to Huntington as
follows:
5.1 ORGANIZATION, STANDING, AND POWER. Citi-Bancshares is a
corporation duly organized, validly existing, and in good standing under the
Laws of the State of Florida, and has the corporate power and authority to
carry on its business as now conducted and to own, lease and operate its
material Assets. Citi-Bancshares does not conduct any business or own any
assets outside the State of Florida that require it to be qualified or licensed
to transact business as a foreign corporation in any such other States of the
United States or any foreign jurisdictions.
5.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Citi-Bancshares has the corporate power and authority
necessary to execute, deliver, and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. The execution,
delivery, and performance of this Agreement and the consummation of the
transactions contemplated herein, including the Merger, have been duly and
validly authorized by all necessary corporate action in respect thereof on the
part of Citi-Bancshares, subject to the approval of this Agreement by a
majority of the outstanding Citi-Bancshares Common Stock, which is the only
shareholder vote required for approval of this Agreement and consummation of
the Merger by Citi-Bancshares. Subject to such requisite shareholder
approval, this Agreement represents a legal, valid, and binding obligation of
Citi-Bancshares, enforceable against Citi-Bancshares in accordance with its
terms (except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, receivership, conservatorship, reorganization,
moratorium, or similar Laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceeding may be brought).
(b) Except as provided in Section 5.2(b) of the
Citi-Bancshares Disclosure Memorandum, neither the execution and delivery of
this Agreement by Citi-Bancshares, nor the consummation by Citi-Bancshares of
the transactions contemplated hereby, nor compliance by Citi-Bancshares with
any of the provisions hereof, will (i) conflict with or result in a breach of
any provision of Citi-Bancshares' Articles of Incorporation or Bylaws, or (ii)
constitute or result in a Default under, or require any Consent pursuant to, or
result in the creation of any Lien on any Asset of any Citi-Bancshares Company
under, any Contract or Permit of any Citi-Bancshares Company, where such
Default or Lien, or any failure to obtain such Consent, is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
Citi-Bancshares, or, (iii) subject to receipt of the requisite approvals
referred to in Section 9.1(b) of this Agreement, violate any Law or Order
applicable to any Citi-Bancshares Company or any of their respective material
Assets.
(c) Other than in connection or compliance with the
provisions of applicable state corporate and securities Laws, rules of the NASD
and other than Consents required from
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Regulatory Authorities, and other than notices to or filings with the Internal
Revenue Service or the Pension Benefit Guaranty Corporation with respect to any
employee benefit plans, or under the HSR Act, and other than Consents, filings,
or notifications which, if not obtained or made, are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
Citi-Bancshares, no notice to, filing with, or Consent of, any public body or
authority is necessary for the consummation by Citi-Bancshares of the Merger
and the other transactions contemplated in this Agreement.
5.3 CAPITAL STOCK.
(a) The authorized capital stock of Citi-Bancshares
consists of 10,000,000 shares of Citi-Bancshares Common Stock, of which
4,472,414 shares are issued and outstanding as of the date of this Agreement.
Citi-Bancshares has no shares of preferred stock authorized, issued or
outstanding. All of the issued and outstanding shares of capital stock of
Citi-Bancshares are duly and validly issued and outstanding and are fully paid
and nonassessable. None of the outstanding shares of capital stock of
Citi-Bancshares has been issued in violation of any preemptive rights of the
current or past shareholders of Citi-Bancshares. Citi-Bancshares has reserved
111,025 shares of Citi-Bancshares Common Stock for issuance under the
Citi-Bancshares Stock Plans, pursuant to which options to purchase not more
than 67,525 shares of Citi-Bancshares Common Stock will be outstanding as of
the Effective Time. Citi-Bancshares has no outstanding stock appreciation
rights under the Citi-Bancshares Stock Option Plans.
(b) Except for the Stock Option Agreement and as set
forth in Section 5.3(a) of this Agreement, or as disclosed in Section 5.3 of
the Citi-Bancshares Disclosure Memorandum, there are no shares of capital stock
or other equity securities of Citi-Bancshares outstanding and no outstanding
Rights relating to the capital stock of Citi-Bancshares.
5.4 CITI-BANCSHARES SUBSIDIARIES. Citi-Bancshares has disclosed
in Section 5.4 of the Citi-Bancshares Disclosure Memorandum all of the
Citi-Bancshares Subsidiaries that are corporations (identifying its
jurisdiction of incorporation, each jurisdiction in which it is qualified
and/or licensed to transact business, and the number of shares owned and
percentage ownership interest represented by such share ownership) and all of
the Citi-Bancshares Subsidiaries that are general or limited partnerships,
limited liability companies, or other non-corporate entities (identifying the
Law under which such entity is organized, each jurisdiction in which it is
qualified and/or licensed to transact business, and the amount and nature of
the ownership interest therein). Except as disclosed in Section 5.4 of the
Citi-Bancshares Disclosure Memorandum, Citi-Bancshares or one of its
Subsidiaries owns all of the issued and outstanding shares of capital stock (or
other equity interests) of each Citi-Bancshares Subsidiary. Except as
disclosed in the Disclosure Memorandum, no capital stock (or other equity
interest) of any Citi-Bancshares Subsidiary is or may become required to be
issued (other than to another Citi-Bancshares Company) by reason of any Equity
Rights, and there are no Contracts by which any Citi-Bancshares Subsidiary is
bound to issue (other than to another Citi-Bancshares Company) additional
shares of its capital stock (or other equity interests) or Equity Rights or by
which any Citi-Bancshares Company is or may be bound to transfer any shares of
the capital stock (or other equity interests) of any Citi-Bancshares
Subsidiary (other than to another Citi-Bancshares
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Company). There are no Contracts relating to the rights of any Citi-Bancshares
Company to vote or to dispose of any shares of the capital stock (or other
equity interests) of any Citi-Bancshares Subsidiary. All of the shares of
capital stock (or other equity interests) of each Citi-Bancshares Subsidiary
held by a Citi-Bancshares Company are fully paid and (except pursuant to 12
U.S.C. Section 55 in the case of national banks and comparable, applicable
state Law, if any, in the case of state depository institutions) nonassessable
under the applicable corporation Law of the jurisdiction in which such
Subsidiary is incorporated or organized and are owned by the Citi-Bancshares
Company free and clear of any Lien. Except as disclosed in Section 5.4 of the
Citi-Bancshares Disclosure Memorandum, each Citi-Bancshares Subsidiary is
either a bank, a savings association, or a corporation, and each such
Subsidiary is duly organized, validly existing, and (as to corporations) in
good standing under the Laws of the jurisdiction in which it is incorporated or
organized, and has the corporate power and authority necessary for it to own,
lease, and operate its Assets and to carry on its business as now conducted.
Each Citi-Bancshares Subsidiary is duly qualified or licensed to transact
business as a foreign corporation in good standing in the States of the United
States and foreign jurisdictions where the character of its Assets or the
nature or conduct of its business requires it to be so qualified or licensed,
except for such jurisdictions in which the failure to be so qualified or
licensed is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Citi-Bancshares. Each Citi-Bancshares Subsidiary
that is a depository institution is an "insured institution" as defined in the
Federal Deposit Insurance Act and applicable regulations thereunder, and the
deposits in which are insured by the Bank Insurance Fund ("BIF"). The minute
books and other organizational documents for each Citi-Bancshares Subsidiary
have been made available to Huntington for its review.
5.5 FINANCIAL STATEMENTS. Citi-Bancshares has previously
provided or included in Section 5.5 of the Citi-Bancshares Disclosure
Memorandum copies of all Citi-Bancshares Financial Statements for periods ended
prior to the date hereof and will deliver to Huntington copies of all
Citi-Bancshares Financial Statements prepared subsequent to the date hereof.
The Citi-Bancshares Financial Statements (as of the dates thereof and for the
periods covered thereby) (i) are, or if dated after the date of this Agreement,
will be in accordance with the books and records of Citi-Bancshares, which are
or will be, as the case may be, complete and correct and which have been or
will have been, as the case may be, maintained in accordance with good business
practices, and (ii) present or will present, as the case may be, fairly the
consolidated financial position of Citi-Bancshares as of the dates indicated
and the consolidated results of operations, changes in shareholders' equity,
and cash flows of Citi-Bancshares for the periods indicated, in accordance with
GAAP or regulatory accounting principles applicable to banks (subject to any
exceptions as to consistency specified therein or as may be indicated in the
notes thereto or, in the case of interim financial statements, to normal
recurring year-end adjustments that are not material in amount of effect).
5.6 ABSENCE OF UNDISCLOSED LIABILITIES. Except as disclosed in
Section 5.6 of the Citi-Bancshares Disclosure Memorandum, no Citi-Bancshares
Company has any Liabilities that are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Citi-Bancshares, except
Liabilities which are accrued or reserved against in the consolidated balance
sheets of Citi-Bancshares as of December 31, 1995 and June 30, 1996, included
in the Citi-Bancshares Financial Statements delivered prior to the date of this
Agreement or reflected in the
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notes thereto. Except as may be disclosed in Section 5.6 of the Citi-Bancshares
Disclosure Memorandum, Citi-Bancshares has not incurred or paid any Liability
since June 30, 1996, except for (i) such Liabilities incurred or paid in the
ordinary course of business consistent with past business practice and which are
not reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on Citi-Bancshares or that are permitted hereunder and (ii) such
Liabilities incurred in connection with the sale of Citi-Bancshares.
5.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31,
1995, except as disclosed in the Citi-Bancshares Financial Statements
delivered prior to the date of this Agreement or as disclosed in Section 5.7 of
the Citi-Bancshares Disclosure Memorandum, (i) there have been no events,
changes, or occurrences which have had, or are reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Citi-Bancshares,
and (ii) Citi-Bancshares has not taken any action, or failed to take any
action, prior to the date of this Agreement, which action or failure, if taken
after the date of this Agreement, would represent or result in a material
breach or violation of any of the covenants and agreements of Citi-Bancshares
provided in Article 7 of this Agreement.
5.8 TAX MATTERS. Except as may be disclosed in Section 5.8 of
the Citi-Bancshares Disclosure Memorandum:
(a) All Tax returns required to be filed by or on behalf
of any of the Citi-Bancshares Companies have been timely filed or requests for
extensions have been timely filed, granted, and have not expired for periods
ended on or before December 31, 1995, and on or before the date of the most
recent fiscal year end immediately preceding the Effective Time, except to the
extent that all such failures to file, taken together, are not reasonably
likely to have a Material Adverse Effect on Citi-Bancshares, and all returns
filed are complete and accurate to the Knowledge of Citi-Bancshares. All Taxes
shown on filed returns have been paid. As of the date of this Agreement, there
is no audit examination, deficiency, or refund Litigation with respect to any
Taxes that is reasonably likely to result in a determination that would have,
individually or in the aggregate, a Material Adverse Effect on Citi-Bancshares,
except as reserved against in the Citi-Bancshares Financial Statements
delivered prior to the date of this Agreement or as disclosed in Section 5.8 of
the Citi-Bancshares Disclosure Memorandum. All Taxes and other Liabilities due
with respect to completed and settled examinations or concluded Litigation have
been paid.
(b) Citi-Bancshares has not executed an extension or
waiver of any statute of limitations on the assessment or collection of any Tax
due (excluding such statutes that relate to years currently under examination
by the Internal Revenue Service or other applicable taxing authorities) that is
currently in effect.
(c) Adequate provision for any Taxes due or to become due
for any of the Citi-Bancshares Companies for the period or periods through and
including the date of the respective Citi-Bancshares Financial Statements has
been made and is reflected on such Citi-Bancshares Financial Statements.
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(d) Deferred Taxes of the Citi-Bancshares Companies have
been provided for in accordance with GAAP.
(e) Each of the Citi-Bancshares Companies is in compliance
with, and its records contain all information and documents (including properly
completed IRS Forms W-9) necessary to comply with, all applicable information
reporting and Tax withholding requirements under federal, state, and local Tax
Laws, and such records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code, except for such
instances of noncompliance and such omissions as are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
Citi-Bancshares.
(f) To the Knowledge of Citi-Bancshares, the federal
income tax returns of Citi-Bancshares have not been audited by the Internal
Revenue Service.
5.9 ALLOWANCE FOR POSSIBLE LOAN LOSSES. In the opinion of
management of Citi-Bancshares, the allowance for possible loan or credit losses
(the "Allowance") shown on the June 30, 1996 consolidated balance sheets of
Citi-Bancshares included in the Citi-Bancshares Financial Statements dated
prior to the date of this Agreement was, and the Allowance shown on the
consolidated balance sheets of Citi-Bancshares included in the Citi-Bancshares
Financial Statements as of dates subsequent to the execution of this Agreement
will be, as of the dates thereof, adequate (within the meaning of GAAP and
applicable regulatory requirements or guidelines) to provide for all known or
reasonably anticipated losses relating to or inherent in the loan and lease
portfolios (including accrued interest receivables) of the Citi-Bancshares
Companies and other extensions of credit (including letters of credit and
commitments to make loans or extend credit) by the Citi-Bancshares Companies as
of the dates thereof, except where the failure of such Allowance to be so
adequate is not reasonably likely to have a Material Adverse Effect on
Citi-Bancshares.
5.10 ASSETS. Except as disclosed in Section 5.10 of the
Citi-Bancshares Disclosure Memorandum, the normal exceptions to the real
property title insurance commitments to be delivered pursuant to Section 7.1(b)
hereof (the "Title Insurance Commitments") and/or as disclosed or reserved
against in the Citi-Bancshares Financial Statements delivered prior to the date
of this Agreement, Citi-Bancshares has good and marketable title, free and clear
of all Liens, to all of its Assets. All tangible properties used in the
businesses of Citi-Bancshares are in good condition, reasonable wear and tear
excepted, and are usable in the ordinary course of business consistent with
Citi-Bancshares' past practices. All Assets which are material to
Citi-Bancshares' business, held under leases or subleases by Citi-Bancshares,
are held under valid Contracts enforceable in accordance with their respective
terms (except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or other Laws affecting the enforcement
of creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the discretion
of the court before which any proceedings may be brought), and each such
Contract is in full force and effect. Citi-Bancshares currently maintains
insurance and blanket bonds (collectively, "Insurance") similar in amounts,
scope, and coverage to that maintained by other peer banking organizations.
Citi-Bancshares has not received notice from any Insurance carrier that (i) such
Insurance will be
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canceled or that coverage thereunder will be reduced or eliminated, or (ii)
premium costs with respect to such policies of insurance will be substantially
increased. There are presently no claims pending under such policies of
Insurance and no notices have been given by Citi-Bancshares under such policies
and Citi-Bancshares has no Knowledge of any events that require any such notice
to be given. Section 5.10 of the Citi-Bancshares Disclosure Memorandum sets
forth a list of all material real property owned or leased by Citi-Bancshares
(the "Real Property"). Except as disclosed in Section 5.10 of the
Citi-Bancshares Disclosure Memorandum, normal exceptions to the Title Insurance
Commitments or as disclosed in the Citi-Bancshares Financial Statements prior
to the date hereof, to the Knowledge of Citi-Bancshares, (i) the Real Property
and the use of such Real Property does not violate zoning, land use laws,
government regulations or restrictive covenants, (ii) the Real Property and the
use thereof does not encroach upon any property owned by any other person, and
(iii) no property owned by any other person encroaches upon any of the Real
Property, in any manner that would have an Material Adverse Effect on
Citi-Bancshares.
5.11 ENVIRONMENTAL MATTERS.
(a) To the Knowledge of Citi-Bancshares, Citi-Bancshares'
Participation Facilities, and its Loan Properties are, and have been, in
compliance with all Environmental Laws, except for violations which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Citi-Bancshares.
(b) To the Knowledge of Citi-Bancshares, there is no
Litigation pending or threatened before any court, governmental agency, or
authority or other forum in which Citi-Bancshares or any of its Participation
Facilities has been or, with respect to threatened Litigation, may be named as
a defendant (i) for alleged noncompliance (including by any predecessor) with
any Environmental Law or (ii) relating to the release into the environment of
any Hazardous Substance, whether or not occurring at, on, under, or involving a
site owned, leased, or operated by Citi-Bancshares or any of its Participation
Facilities, except for such Litigation pending or threatened that is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Citi-Bancshares.
(c) To the Knowledge of Citi-Bancshares, there is no
Litigation pending or threatened before any court, governmental agency, or
board or other forum in which any of its Loan Properties (or Citi-Bancshares in
respect of such Loan Property) has been or, with respect to threatened
Litigation, may be named as a defendant or potentially responsible party (i)
for alleged noncompliance (including by any predecessor) with any Environmental
Law or (ii) relating to the release into the environment of any Hazardous
Substance, whether or not occurring at, on, under, or involving a Loan
Property, except for such Litigation pending or threatened that is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Citi-Bancshares.
(d) To the Knowledge of Citi-Bancshares, there is no
reasonable basis for any Litigation of a type described in subsections (b) or
(c), except such as is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Citi-Bancshares.
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(e) During the period of (i) Citi-Bancshares' ownership or
operation of any of their respective current properties, (ii) Citi-Bancshares'
participation in the management of any Participation Facility, or (iii)
Citi-Bancshares' holding of a security interest in a Loan Property, there have
been no releases of Hazardous Substance in, on, under, or affecting such
properties, except such as are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Citi-Bancshares. Prior to the
period of (i) Citi-Bancshares ownership or operation of any of their respective
current properties, (ii) Citi-Bancshares participation in the management of any
Participation Facility, or (iii) Citi-Bancshares holding of a security interest
in a Loan Property, to the Knowledge of Citi-Bancshares, there were no releases
of Hazardous Substance in, on, under, or affecting any such property,
Participation Facility or Loan Property, except such as are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Citi-Bancshares.
5.12 COMPLIANCE WITH LAWS. Citi-Bancshares is duly registered as
a bank holding company under the BHC Act. Each Citi-Bancshares Company has in
effect all Permits necessary for it to own, lease, or operate its material
Assets and to carry on its business as now conducted, except for those Permits,
the absence of which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Citi-Bancshares, and there has occurred
no Default under any such Permit, other than Defaults which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Citi-Bancshares. Except as disclosed in Section 5.12 of the Citi-Bancshares
Disclosure Memorandum, Citi-Bancshares:
(a) is not in Default under its Certificate of Incorporation or
Bylaws (or other governing instrument); or
(b) is not in violation of, or Default under, any Laws, Orders,
or Permits applicable to its business or employees conducting its business,
except for violations which are not reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Citi-Bancshares; and
(c) has not received any notification or communication from any
agency or department of federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that Citi-Bancshares is not in
compliance with any of the Laws or Orders, including the CRA, which such
governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Citi-Bancshares, (ii) threatening to revoke any
Permits, the revocation of which is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Citi-Bancshares, or (iii)
requiring Citi-Bancshares to enter into or consent to the issuance of a cease
and desist order, formal agreement, directive, commitment, or memorandum of
understanding, or to adopt any Board resolution or similar undertaking, which
restricts materially the conduct of its business, or in any manner relates to
its capital adequacy, its credit or reserve policies, its management, or the
payment of dividends, or which are reasonably likely to delay or prevent the
consummation of the transactions contemplated herein.
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5.13 LABOR RELATIONS. Citi-Bancshares is not the subject of any
Litigation asserting that it has committed an unfair labor practice (within the
meaning of the National Labor Relations Act or comparable state law) or seeking
to compel it to bargain with any labor organization as to wages or conditions
of employment, nor is there any strike or other labor dispute involving
Citi-Bancshares, pending or threatened, or to the Knowledge of Citi-Bancshares,
is there any activity involving any Citi-Bancshares' employees seeking to
certify a collective bargaining unit or engaging in any other organization
activity.
5.14 EMPLOYEE BENEFIT PLANS.
(a) Citi-Bancshares has disclosed in Section 5.14 of the
Citi-Bancshares Disclosure Memorandum, and has delivered or made available to
Huntington prior to the execution of this Agreement copies in each case of, all
pension, retirement, profit-sharing, deferred compensation, stock option,
employee stock ownership, severance pay, vacation, bonus, or other incentive
plan, all other written employee programs, arrangements, or agreements, all
medical, vision, dental, or other health plans, all life insurance plans, and
all other employee benefit plans or fringe benefit plans, including "employee
benefit plans" as that term is defined in Section 3(3) of ERISA, currently
adopted, maintained by, sponsored in whole or in part by, or contributed to by
any Citi-Bancshares Company or Subsidiary thereof for the benefit of employees,
retirees, dependents, spouses, directors, independent contractors, or other
beneficiaries and under which employees, retirees, dependents, spouses,
directors, independent contractors, or other beneficiaries are eligible to
participate (collectively, the "Citi-Bancshares Benefit Plans"). Any of the
Citi-Bancshares Benefit Plans which is an "employee pension benefit plan," as
that term is defined in Section 3(2) of ERISA, is referred to herein as a
"Citi-Bancshares ERISA Plan." Each Citi-Bancshares ERISA Plan which is also a
"defined benefit plan" (as defined in Section 414(j) of the Internal Revenue
Code) is referred to herein as a "Citi-Bancshares Pension Plan." No Citi-
Bancshares Pension Plan is or has been a multiemployer plan within the meaning
of Section 3(37) of ERISA.
(b) Except as disclosed in Section 5.14 of the
Citi-Bancshares Disclosure Memorandum, all Citi-Bancshares Benefit Plans are
in compliance with the applicable terms of ERISA, the Internal Revenue Code
including the 1986 amendments thereto and any other applicable Laws, the breach
or violation of which are reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Citi-Bancshares. Except as disclosed
in Section 5.14(b) of the Citi-Bancshares Disclosure Memorandum, each
Citi-Bancshares ERISA Plan which is intended to be qualified under Section
401(a) of the Internal Revenue Code has received a favorable determination
letter which takes into account the Tax Reform Act of 1986 and subsequent
legislation for which a determination letter is available from the Internal
Revenue Service, and Citi-Bancshares is not aware of any circumstances likely
to result in revocation of any such favorable determination letter. To the
Knowledge of Citi-Bancshares, no Citi-Bancshares Company has engaged in a
transaction with respect to any Citi-Bancshares Benefit Plan that, assuming the
taxable period of such transaction expired as of the date hereof, would subject
any Citi-Bancshares Company to a Tax imposed by either Section 4975 of the
Internal Revenue Code or Section 502(i) of ERISA in amounts which are
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Citi-Bancshares.
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MERGER.DOC
18
(c) Except as disclosed in Section 5.14 of the
Citi-Bancshares Disclosure Memorandum, as of January 1, 1996, no Citi-Bancshares
Pension Plan has any "unfunded current liability," as that term is defined in
Section 302(d)(8)(A) of ERISA, and the fair market value of the assets of any
such plan exceeds the plan's "benefit liabilities," as that term is defined in
Section 4001(a)(16) of ERISA, when determined under actuarial factors that would
apply if the plan terminated in accordance with all applicable legal
requirements and assuming the adoption of interest rates and mortality tables
described in Section 417(e)(3)(A)(i) and the use of such interest rates
published in October 1996, and assuming that all participants who were eligible
for a lump sum (assuming the plan were terminated on January 1, 1996), being
those currently eligible to elect normal or early retirement under the
Citi-Bancshares Pension Plan, take a lump sum distribution of their vested
accrued benefits on January 1, 1996. Since the date of the most recent
actuarial valuation, there has been (i) no material change in the financial
position of any Citi-Bancshares Pension Plan, (ii) no change in the actuarial
assumptions with respect to any Citi-Bancshares Pension Plan, and (iii) no
increase in benefits under any Citi-Bancshares Pension Plan as a result of plan
amendments or changes in applicable Law which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Citi-Bancshares
or materially adversely affect the funding status of any such plan. Neither any
Citi-Bancshares Pension Plan nor any "single-employer plan," within the meaning
of Section 4001(a)(15) of ERISA, currently or formerly maintained by any
Citi-Bancshares Company, or the single-employer plan of any entity which is
considered one employer with Citi-Bancshares under Section 4001 of ERISA or
Section 414 of the Internal Revenue Code (an "ERISA Affiliate") has an
"accumulated funding deficiency" within the meaning of Section 412 of the
Internal Revenue Code or Section 302 of ERISA, which is reasonably likely to
have a Material Adverse Effect on Citi-Bancshares. No Citi-Bancshares Company
has provided, or is required to provide, security to a Citi-Bancshares Pension
Plan or to any single-employer plan of an ERISA Affiliate pursuant to Section
401(a)(29) of the Code.
(d) Within the six-year period preceding the Effective
Time, no Liability under Subtitle C or D of Title IV of ERISA has been or is
expected to be incurred by any Citi-Bancshares Company with respect to any
ongoing, frozen, or terminated single-employer plan or the single-employer plan
of any ERISA Affiliate, which Liability is reasonably likely to have a Material
Adverse Effect on Citi-Bancshares. No Citi-Bancshares Company has incurred any
withdrawal Liability with respect to a multiemployer plan under Subtitle B of
Title IV of ERISA (regardless of whether based on contributions of an ERISA
Affiliate), which Liability is reasonably likely to have a Material Adverse
Effect on Citi-Bancshares. No notice of a "reportable event," within the
meaning of Section 4043 of ERISA for which the 30-day reporting requirement has
not been waived or for which penalties for failure to report a reportable event
have not been waived under PBGC Technical Update 95-3, has been required to be
filed for any Citi-Bancshares Pension Plan or by any ERISA Affiliate within the
12-month period ending on the date hereof.
(e) Except as disclosed in Section 5.14 of the
Citi-Bancshares Disclosure Memorandum, no Citi-Bancshares Company has any
Liability for retiree health and life benefits under any of the Citi-Bancshares
Benefit Plans.
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(f) Except as disclosed in Section 5.14 of the
Citi-Bancshares Disclosure Memorandum, neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby will
(i) result in any payment (including severance, unemployment compensation,
golden parachute, or otherwise) becoming due to any director or any employee of
any Citi-Bancshares Company from any Citi-Bancshares Company under any
Citi-Bancshares Benefit Plan or otherwise, (ii) increase any benefits otherwise
payable under any Citi-Bancshares Benefit Plan, or (iii) result in any
acceleration of the time of payment or vesting of any such benefit, where such
payment, increase, or acceleration is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Citi-Bancshares.
(g) All liabilities under any Citi-Bancshares benefit
plan, other than benefits accrued pursuant to funded retirement plans subject
to the provisions of Section 412 of the Internal Revenue Code or Section 302 of
ERISA, have been fully reflected on the audited Citi-Bancshares Financial
Statements to the extent required by and in accordance with GAAP.
5.15 MATERIAL CONTRACTS. Except as disclosed in Section 5.15 of
the Citi-Bancshares Disclosure Memorandum or otherwise reflected in the
Citi-Bancshares Financial Statements, none of Citi-Bancshares, nor any of its
respective Assets, businesses or operations, is a party to, or is bound or
affected by, or receives benefits under, (i) any employment, severance,
termination, consulting, or retirement or other Contract providing for
aggregate payments to any Person in any calendar year in excess of $50,000, and
(ii) any Contract relating to the borrowing of money by Citi-Bancshares or the
guarantee by Citi-Bancshares of any such obligation (other than Contracts
evidencing deposit liabilities, purchases of federal funds, fully-secured
repurchase agreements, and Federal Reserve Bank advances, Federal Home Loan
Bank advances, trade payables, and Contracts relating to borrowings or
guarantees made in the ordinary course of business) (together with all
Contracts referred to in Sections 5.10 and 5.14(a) of this Agreement, the
"Citi-Bancshares Contracts"). With respect to each Citi-Bancshares Contract
and except as disclosed in Section 5.15 of the Citi-Bancshares Disclosure
Memorandum: (i) the Contract is in full force and effect; (ii) Citi-Bancshares
is not in Default thereunder, other than Defaults which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
Citi-Bancshares; (iii) Citi-Bancshares has not repudiated or waived any
material provision of any such Contract; and (iv) no other party to any such
Contract is, to the Knowledge of Citi-Bancshares, in Default in any respect,
other than Defaults which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Citi-Bancshares, or has repudiated
or waived any material provision thereunder.
5.16 LEGAL PROCEEDINGS. Except as may be disclosed in Section
5.16 of the Citi-Bancshares Disclosure Memorandum, there is no Litigation
instituted or pending, or, to the Knowledge of Citi-Bancshares, threatened (or
unasserted but considered probable of assertion and which if asserted would
have at least a reasonable probability of an unfavorable outcome) against any
Citi-Bancshares Company, or against any Asset, interest, or right of any of
them, nor are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against Citi-Bancshares
that is reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect. Section 5.16 of the Citi-Bancshares Disclosure
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Memorandum includes a summary report of all Litigation as of the date of this
Agreement to which Citi-Bancshares is a party and which names Citi-Bancshares
as a defendant or cross-defendant.
5.17 REPORTS. Since December 31, 1992, or the date of
organization if later, each Citi-Bancshares Company has timely filed all
reports and statements, together with any amendments required to be made with
respect thereto, that it was required to file with (i) the SEC, including, but
not limited to, Forms 10-K, Forms 10-Q, Forms 8-K, and proxy statements, (ii)
other Regulatory Authorities, and (iii) any applicable state securities or
banking authorities (except, in the case of state securities authorities,
failures to file which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Citi-Bancshares). As of their
respective dates, each of such reports and documents, including the financial
statements, exhibits, and schedules thereto, complied in all material respects
with all applicable Laws. As of its respective date, each such report and
document did not, in all material respects, contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.
5.18 STATEMENTS TRUE AND CORRECT. No statement, certificate,
instrument, or other writing furnished or to be furnished by Citi-Bancshares or
any Affiliate thereof to Huntington pursuant to this Agreement or any other
document, agreement, or instrument referred to herein contains or will contain
any untrue statement of material fact or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. None of the information supplied or to
be supplied by any Citi-Bancshares Company or any Affiliate thereof for
inclusion in the Registration Statement to be filed by Huntington with the SEC
will, when the Registration Statement becomes effective, be false or misleading
with respect to any material fact, or omit to state any material fact necessary
to make the statements therein not misleading. None of the information
supplied or to be supplied by any Citi-Bancshares Company or any Affiliate
thereof for inclusion in the Proxy Statement to be mailed to Citi-Bancshares'
shareholders in connection with the Shareholders' Meeting, and any other
documents to be filed by a Citi-Bancshares Company or any Affiliate thereof
with the SEC or any other Regulatory Authority in connection with the
transactions contemplated hereby, will, at the respective time such documents
are filed, and with respect to the Proxy Statement, when first mailed to the
shareholders of Citi-Bancshares, be false or misleading with respect to any
material fact, or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or, in the case of the Proxy Statement or any amendment thereof
or supplement thereto, at the time of the Shareholders' Meeting, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary to correct any statement in any earlier communication with
respect to the solicitation of any proxy for the Shareholders' Meeting. All
documents that any Citi-Bancshares Company or any Affiliate thereof is
responsible for filing with any Regulatory Authority in connection with the
transactions contemplated hereby will comply as to form in all material
respects with the provisions of applicable Law.
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5.19 TAX AND REGULATORY MATTERS. Neither Citi-Bancshares nor any
Affiliate thereof has taken any action or has any Knowledge of any fact or
circumstance that is reasonably likely to (i) prevent the transactions
contemplated hereby, including the Merger, from qualifying as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, or that (ii)
would materially impede or delay receipt of any Consents of Regulatory
Authorities referred to in Section 9.1(b) of this Agreement or result in the
imposition of a condition or restriction of the type referred to in the last
sentence of such Section.
5.20 STATE TAKEOVER LAWS. Each Citi-Bancshares Company shall
take all necessary steps to exempt the transactions contemplated by this
Agreement from, or if necessary challenge the validity or applicability of, any
applicable state takeover Law.
5.21 CHARTER PROVISIONS. Citi-Bancshares has taken all action so
that the entering into of this Agreement and the consummation of the Merger and
the other transactions contemplated by this Agreement do not and will not
result in the grant of any rights to any Person under the Articles of
Incorporation, Bylaws or other governing instruments of Citi-Bancshares or
restrict or impair the ability of Huntington or any of its Subsidiaries to
vote, or otherwise to exercise the rights of a shareholder with respect to,
shares of Citi-Bancshares that may be directly or indirectly acquired or
controlled by it.
5.22 SHAREHOLDER'S AGREEMENTS. Each of the 10 Citi-Bancshares
directors holding of record the largest number of shares of Citi-Bancshares
Common Stock has executed and delivered to Huntington an agreement in
substantially the form of Exhibit 2.
5.23 COMPLIANCE WITH CERTAIN LAWS. Citi-Bancshares is in
compliance with all currently applicable capital requirements and guidelines
prescribed by all appropriate federal or state bank Regulatory Authorities.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF HUNTINGTON
Huntington hereby represents and warrants to Citi-Bancshares as
follows:
6.1 ORGANIZATION, STANDING, AND POWER. Huntington is a
corporation duly organized, validly existing, and in good standing under the
Laws of the State of Maryland, and has the corporate power and authority to
carry on its business as now conducted and to own, lease and operate its
material Assets. Huntington is duly qualified or licensed to transact business
as a foreign corporation in good standing in the States of the United States
and foreign jurisdictions where the character of its Assets or the nature or
conduct of its business requires it to be so qualified or licensed, except for
such jurisdictions in which the failure to be so qualified or licensed is not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on Huntington.
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6.2 AUTHORITY; NO BREACH BY AGREEMENT.
(a) Huntington has the corporate power and authority
necessary to execute, deliver and perform its obligations under this Agreement
and to consummate the transactions contemplated hereby. The execution,
delivery and performance of this Agreement and the consummation of the
transactions contemplated herein, including the Merger, have been duly and
validly authorized by all necessary corporate action in respect thereof on the
part of Huntington. This Agreement represents a legal, valid, and binding
obligation of Huntington, enforceable against Huntington in accordance with its
terms (except in all cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium, or similar Laws affecting
the enforcement of creditors' rights generally and except that the availability
of the equitable remedy of specific performance or injunctive relief is subject
to the discretion of the court before which any proceeding may be brought).
(b) Neither the execution and delivery of this Agreement
by Huntington, nor the consummation by Huntington of the transactions
contemplated hereby, nor compliance by Huntington with any of the provisions
hereof, will (i) conflict with or result in a breach of any provision of
Huntington's Articles of Incorporation or Bylaws, or (ii) constitute or result
in a Default under, or require any Consent pursuant to, or result in the
creation of any Lien on any Asset of any Huntington Company under, any Contract
or Permit of any Huntington Company, where such Default or Lien, or any failure
to obtain such Consent, is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Huntington, or, (iii) subject to
receipt of the requisite approvals referred to in Section 9.1(b) of this
Agreement, violate any Law or Order applicable to any Huntington Company or any
of their respective material Assets.
(c) Other than in connection or compliance with the
provisions of the Securities Laws, applicable state corporate and securities
Laws, and rules of the NASD, and other than Consents required from Regulatory
Authorities, and other than notices to or filings with the Internal Revenue
Service or the Pension Benefit Guaranty Corporation with respect to any
employee benefit plans, and other than Consents, filings, or notifications
which, if not obtained or made, are not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on Huntington, no notice to,
filing with, or Consent of, any public body or authority is necessary for the
consummation by Huntington of the Merger and the other transactions
contemplated in this Agreement.
6.3 CAPITAL STOCK. The authorized capital stock of Huntington
consists of (i) 300,000,000 shares of Huntington Common Stock, of which
144,740,515 shares are issued and outstanding as of October 28, 1996, and (ii)
6,617,808 shares of Huntington Preferred Stock, none of which are designated,
issued or outstanding. All of the issued and outstanding shares of Huntington
Capital Stock are, and all of the shares of Huntington Common Stock to be
issued in exchange for shares of Citi-Bancshares Common Stock upon consummation
of the Merger, when issued in accordance with the terms of this Agreement, will
be, duly and validly issued and outstanding and fully paid and nonassessable.
None of the outstanding shares of Huntington Capital Stock has been, and none
of the shares of Huntington Common Stock to be issued in
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exchange for shares of Citi-Bancshares Common Stock upon consummation of the
Merger will be, issued in violation of any preemptive rights of the current or
past shareholders of Huntington.
6.4 FINANCIAL STATEMENTS. Huntington has delivered to
Citi-Bancshares all Huntington Financial Statements for periods ended prior to
the date hereof and will deliver to Citi-Bancshares copies of all Huntington
Financial Statements prepared subsequent to the date hereof. The Huntington
Financial Statements (as of the dates thereof and for the periods covered
thereby) (i) are or, if dated after the date of this Agreement, will be in
accordance with the books and records of the Huntington Companies, which are or
will be, as the case may be, complete and correct and which have been or will
have been, as the case may be, maintained in accordance with good business
practices, and (ii) present or will present, as the case may be, fairly the
consolidated financial position of the Huntington Companies as of the dates
indicated and the consolidated results of operations, changes in shareholders'
equity, and cash flows of the Huntington Companies for the periods indicated,
in accordance with GAAP (subject to exceptions as to consistency specified
therein or as may be indicated in the notes thereto or, in the case of interim
financial statements, to normal recurring year-end adjustments that are not
material in amount or effect).
6.5 RIGHTS AGREEMENT. The execution and delivery of this
Agreement and the consummation of the Merger and the other transactions
contemplated by this Agreement will not result in the grant of any rights to
any Person under the Huntington Rights Agreement (other than to Citi-Bancshares
Stockholders as contemplated by Section 3.1 of this Agreement) or enable or
require the Huntington Rights to be exercised, distributed or triggered.
6.6 ABSENCE OF CERTAIN CHANGES OR EVENTS. Since December 31,
1995, except as disclosed in the Huntington Financial Statements delivered
prior to the date of this Agreement or as disclosed in Section 6.6 of the
Huntington Disclosure Memorandum, (i) there have been no events, changes or
occurrences which have had, or are reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on Huntington.
6.7 COMPLIANCE WITH LAWS. Huntington and Huntington-Florida are
each duly registered as a bank holding company under the BHC Act and with the
Florida State Banking Department. Each Huntington Company has in effect all
Permits necessary for it to own, lease or operate its material Assets and to
carry on its business as now conducted, except for those Permits the absence of
which are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Huntington, and there has occurred no Default under
any such Permit, other than Defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Huntington.
Except as disclosed in Section 6.7 of the Huntington Disclosure Memorandum, no
Huntington Company:
(a) is in Default under its Articles of Incorporation or Bylaws
(or other governing instruments); or
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(b) is in violation of, or in Default under, any Laws, Orders or
Permits applicable to its business or employees conducting its business, except
for violations which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on Huntington; and
(c) has received any notification or communication from any
agency or department of federal, state, or local government or any Regulatory
Authority or the staff thereof (i) asserting that any Huntington Company is not
in compliance with any of the Laws or Orders, including the CRA, which such
governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Huntington or which would prevent or delay the
consummation of the transactions contemplated herein, (ii) threatening to
revoke any Permits, the revocation of which is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on Huntington,
(iii) requiring any Huntington Company to enter into or consent to the issuance
of a cease and desist order, formal agreement, directive, commitment or
memorandum of understanding, or to adopt any Board resolution or similar
undertaking, which restricts materially the conduct of its business, or in any
manner relates to its capital adequacy, its credit or reserve policies, its
management, or the payment of dividends, or which are reasonably likely to
delay or prevent the consummation of the transactions contemplated herein.
6.8 LEGAL PROCEEDINGS. There is no Litigation pending, or to
the Knowledge of Huntington, threatened against Huntington or any Huntington
Company that seeks to enjoin, delay or prevent the execution, delivery or
performance of this Agreement or the completion of the transactions
contemplated herein.
6.9 REPORTS. Since December 31, 1992, Huntington has filed all
reports and statements, together with any amendments required to be made with
respect thereto, that it was required to file with (i) the SEC, including, but
not limited to, Forms 10-K, Forms 10-Q, Forms 8-K, and proxy statements, (ii)
other Regulatory Authorities, and (iii) any applicable state securities or
banking authorities (except, in the case of state securities authorities,
failures to file which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on Huntington). As of their
respective dates, each of such reports and documents, including the financial
statements, exhibits, and schedules thereto, complied in all material respects
with all applicable Laws. As of its respective date, each such report and
document did not, contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading.
6.10 STATEMENTS TRUE AND CORRECT. No statement, certificate,
instrument or other writing furnished or to be furnished by Huntington or any
Affiliate thereof to Citi-Bancshares pursuant to this Agreement or any other
document, agreement or instrument referred to herein contains or will contain
any untrue statement of material fact or will omit to state a material fact
necessary to make the statements therein, in light of the circumstances under
which they were made, not misleading. None of the information supplied or to
be supplied by Huntington or any
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25
Affiliate thereof for inclusion in the Registration Statement to be filed by
Huntington with the SEC, will, when the Registration Statement becomes
effective, be false or misleading with respect to any material fact, or omit to
state any material fact necessary to make the statements therein not
misleading. None of the information supplied or to be supplied by Huntington
or any Affiliate thereof for inclusion in the Proxy Statement to be mailed to
Citi-Bancshares' shareholders in connection with the Shareholders' Meeting, and
any other documents to be filed by Huntington or any Affiliate thereof with the
SEC or any other Regulatory Authority in connection with the transactions
contemplated hereby, will, at the respective time such documents are filed, and
with respect to the Proxy Statement, when first mailed to the shareholders of
Citi-Bancshares, be false or misleading with respect to any material fact, or
omit to state any material fact necessary to make the statements therein, in
light of the circumstances under which they were made, not misleading, or, in
the case of the Proxy Statement or any amendment thereof or supplement thereto,
at the time of the Shareholders' Meeting, be false or misleading with respect
to any material fact, or omit to state any material fact necessary to correct
any statement in any earlier communication with respect to the solicitation of
any proxy for the Shareholders' Meeting. All documents that Huntington or any
Affiliate thereof is responsible for filing with any Regulatory Authority in
connection with the transactions contemplated hereby will comply as to form in
all material respects with the provisions of applicable Law.
6.11 AUTHORITY OF HUNTINGTON-FLORIDA. Huntington-Florida is an
Ohio corporation, duly organized, validly existing and in good standing under
the Laws of the State of Ohio as a wholly owned Subsidiary of Huntington, with
its principal office located in Columbus, Florida. The authorized capital stock
of Huntington-Florida consists of 850 shares of Huntington-Florida Common Stock,
all of which is validly issued and outstanding, fully paid and nonassessable and
is owned by Huntington free and clear of any Lien. Huntington-Florida has the
corporate power and authority necessary to execute, deliver and perform its
obligations under this Agreement and to consummate the transactions contemplated
hereby, subject to the receipt of the necessary Consents of the applicable
Regulatory Authorities. The execution, delivery and performance of this
Agreement and the consummation of the transactions contemplated herein,
including the Merger, has been duly and validly authorized by all necessary
corporate action in respect thereof on the part of Huntington-Florida. This
Agreement represents a legal, valid, and binding obligation of
Huntington-Florida, enforceable against Huntington-Florida in accordance with
its terms (except in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium, or similar Laws
affecting the enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or injunctive
relief is subject to the discretion of the court before which any proceeding may
be brought).
6.12 TAX AND REGULATORY MATTERS. No Huntington Company or any
Affiliate thereof has taken any action or has any Knowledge of any fact or
circumstance that is reasonably likely to (i) prevent the transactions
contemplated hereby, including the Merger, from qualifying as a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, or (ii)
materially impede or delay receipt of any Consents of Regulatory Authorities
referred to in
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Section 9.1(b) of this Agreement or result in the imposition of a condition or
restriction of the type referred to in the last sentence of such Section.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
7.1 AFFIRMATIVE COVENANTS OF CITI-BANCSHARES.
(a) Unless the prior written consent of Huntington shall have
been obtained, and except as otherwise expressly contemplated herein,
Citi-Bancshares shall and shall cause each of its Subsidiaries to (i) operate
its business only in the usual, regular, and ordinary course, (ii) preserve
intact its business organization and Assets and maintain its rights and
franchises, and (iii) take no action which would (A) adversely affect the
ability of any Party to obtain any Consents required for the transactions
contemplated hereby without imposition of a condition or restriction of the
type referred to in the last sentences of Section 9.1(b) or 9.1(c) of this
Agreement, or (B) adversely affect the ability of any Party to perform its
covenants and agreements under this Agreement.
(b) Citi-Bancshares shall obtain surveys of, Title Insurance
Commitments and title insurance from reputable insurers on all Real Property
comprising the main offices and branches of Citizens National Bank of Leesburg
on forms customarily used for commercial property in the areas where such Real
Property is located.
7.2 NEGATIVE COVENANTS OF CITI-BANCSHARES. Except as provided
in this Agreement or as disclosed in the Citi-Bancshares Disclosure Memorandum,
from the date of this Agreement until the earlier of the Effective Time or the
termination of this Agreement, Citi-Bancshares covenants and agrees that it
will not do or agree or commit to do, or permit any of its Subsidiaries to do
or agree or commit to do, any of the following without the prior written
consent of the chief executive officer, president or chief financial officer of
Huntington, which consent shall not be unreasonably withheld:
(a) amend the Articles of Incorporation, Bylaws or other
governing instruments of any Citi-Bancshares Company, or
(b) incur any additional debt obligation or other obligation for
borrowed money except in the ordinary course of the business of Citi-Bancshares
and its Subsidiaries consistent with past practices (which shall include
creation of deposit liabilities, purchases of federal funds, advances from the
Federal Reserve Bank or Federal Home Loan Bank, and entry into repurchase
agreements fully secured by U.S. government or agency securities), or impose,
or suffer the imposition, on any Asset of Citi-Bancshares of any Lien or permit
any such Lien to exist (other than in connection with deposits, repurchase
agreements, bankers acceptances, "treasury tax and loan" accounts established
in the ordinary course of business, the satisfaction of legal requirements in
the exercise of trust powers, and Liens in effect as of the date hereof that
are disclosed in the Citi-Bancshares Disclosure Memorandum); or
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(c) repurchase, redeem, or otherwise acquire or exchange (other
than exchanges in the ordinary course under employee benefit plans), directly
or indirectly, any shares, or any securities convertible into any shares, of
the capital stock of Citi-Bancshares, or declare or pay any dividend or make
any other distribution in respect of Citi-Bancshares' capital stock, provided
that Citi-Bancshares may (to the extent legally and contractually permitted to
do so), but is not obligated hereunder, to declare and pay its customary
quarterly cash dividends on the shares of Citi-Bancshares Common Stock not in
excess of $0.12 per share of Citi-Bancshares Common Stock with usual and
regular record and payment dates in accordance with past practice and a special
dividend in the fourth quarter of 1996 not in excess of $.06 per share of
Citi-Bancshares Common Stock as disclosed in Section 7.2(c) of the
Citi-Bancshares Disclosure Memorandum, and provided further that if the Closing
and the Effective Time has not occurred prior to the record dates for any
regular quarterly dividends on Citi-Bancshares Common Stock in 1997, then
Citi-Bancshares may continue to declare and pay regular quarterly dividends on
Citi-Bancshares Common Stock (the "1997 Dividends"). The 1997 Dividends shall
be determined by Citi-Bancshares' Board of Directors and shall be payable from
funds lawfully available therefor, in an amount not to exceed $0.15 per share
of Citi-Bancshares Common Stock per quarter.; provided that in no event shall
holders of Citi-Bancshares Common Stock be entitled to receive a dividend from
both Citi-Bancshares and Huntington in the same quarter with respect to shares
of Citi-Bancshares Common Stock and Huntington Common Stock issued or issuable
for such Citi-Bancshares Common Stock; or
(d) except for this Agreement, the Stock Option Agreement or
pursuant to the exercise of options to purchase shares of Citi-Bancshares
Common Stock and the transactions contemplated herein, issue, sell, pledge,
encumber, authorize the issuance of, enter into any Contract to issue, sell,
pledge, encumber, or authorize the issuance of, or otherwise permit to become
outstanding, any additional shares of Citi-Bancshares Common Stock or any other
capital stock of any Citi-Bancshares Company, or any Rights; or
(e) adjust, split, combine or reclassify any capital stock of
any Citi-Bancshares Company, or issue or authorize the issuance of any other
securities in respect of or in substitution for shares of Citi-Bancshares
Common Stock, or sell, lease, mortgage or otherwise dispose of any Asset (other
than Assets acquired as a result of debts previously contracted) other than in
the ordinary course of business for reasonable and adequate consideration; or
(f) except for purchases of U.S. Treasury securities or U.S.
Government agency (including FNMA and FHLMC) securities in the ordinary course
of business, which in either case have maturities of three years or less,
purchase any securities or make any material investment, either by purchase of
stock of securities, contributions to capital, Asset transfers, or purchase of
any Assets, in any Person other than a wholly owned Citi-Bancshares Subsidiary,
or otherwise acquire direct or indirect control over any Person, other than in
connection with (i) foreclosures in the ordinary course of business, (ii)
acquisitions of control by a depository institution Subsidiary in its fiduciary
capacity, or
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(iii) the creation of new wholly owned Subsidiaries organized to conduct or
continue activities otherwise permitted by this Agreement; or
(g) except as disclosed in Section 7.2(g) of the Citi-Bancshares
Disclosure Memorandum or as a result of the transactions contemplated herein,
(i) grant any increase in compensation or benefits to the employees or officers
of any Citi-Bancshares Company or as required by Law, (ii) pay any severance or
termination pay or any bonus other than pursuant to written policies or written
Contracts in effect on the date of this Agreement, (iii) enter into or amend
any severance agreements with officers of Citi-Bancshares, (iv) grant any
increase in fees or other increases in compensation or other benefits to the
directors of Citi-Bancshares, (v) voluntarily accelerate the vesting of any
employee benefits, or (vi) grant any stock appreciation rights or other Rights
to acquire Citi-Bancshares securities under any Citi-Bancshares Stock Option
Plan; or
(h) except as disclosed in Section 7.2(h) of the Citi-Bancshares
Disclosure Memorandum, enter into or amend any employment Contract between
Citi-Bancshares and any Person (unless such amendment is required by Law) that
Citi-Bancshares does not have the unconditional right to terminate without
Liability (other than Liability for services already rendered), at any time on
or after the Effective Time;
(i) adopt any new employee benefit plan of Citi-Bancshares' or
any Citi-Bancshares Company or terminate or withdraw from, or make any material
change in or to, any existing employee benefit plans of Citi-Bancshares or any
Citi-Bancshares Company other than any such change that is required by Law, or
that, in the opinion of counsel, is necessary or advisable to maintain the tax
qualified status of any such plan, or that is disclosed or contemplated in
Section 7.2(i) of the Citi-Bancshares Disclosure Memorandum, or make any
distributions from such employee benefit plans except as required by Law, the
terms of such plans or consistent with Citi-Bancshares' past practice; or
(j) make any significant change in any Tax or accounting methods
or systems of internal accounting controls, except as may be appropriate to
conform to changes in Tax Laws or regulatory accounting requirements or GAAP;
or
(k) commence any Litigation other than in accordance with past
practice, settle any Litigation involving any Liability of Citi-Bancshares for
material money damages or restrictions upon the operations of Citi-Bancshares;
or
(l) except in the ordinary course of business, enter into,
modify, amend or terminate any material Contract or waive, release, compromise
or assign any material rights or claims.
7.3 COVENANTS OF HUNTINGTON. From the date of this Agreement
until the earlier of the Effective Time or the termination of this Agreement,
Huntington covenants and agrees that it shall take no action which to its
knowledge at the time of such action, would (i) materially adversely affect the
ability of any Party to obtain any Consents required for the transactions
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contemplated hereby without imposition of a condition or restriction of the
type referred to in the last sentences of Section 9.1(b) or 9.1(c) of this
Agreement, or (ii) materially adversely affect the ability of any Party to
perform its covenants and agreements under this Agreement. Huntington further
covenants and agrees that it will not or agree or commit to, amend the Articles
of Incorporation or Bylaws or Regulations of Huntington or Huntington-Florida
or the Huntington Rights Agreement, in each case, in any manner adverse to the
holders of Citi-Bancshares Common Stock as compared to rights of holders of
Huntington Common Stock generally as of the date of this Agreement, without the
prior written consent of the chairman or president of Citi-Bancshares, which
consent shall not be unreasonably withheld.
7.4 ADVERSE CHANGES IN CONDITION. Each Party agrees to give
written notice promptly to the other Party upon becoming aware of the
occurrence or impending occurrence of any event or circumstance relating to it
or any of its Subsidiaries which (i) is reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on it or (ii) would cause or
constitute a material breach of any of its representations, warranties, or
covenants contained herein, and to use its reasonable efforts to prevent or
promptly to remedy the same.
7.5 REPORTS. Each Party and its Subsidiaries shall file all
reports required to be filed by it with Regulatory Authorities between the date
of this Agreement and the Effective Time and shall deliver to the other Party
copies of all such reports promptly after the same are filed. If financial
statements are contained in any such reports filed with the SEC, such financial
statements will fairly present the consolidated financial position of the
entity filing such statements as of the dates indicated and the consolidated
results of operations, changes in shareholders' equity, and cash flows for the
periods then ended in accordance with GAAP (subject in the case of interim
financial statements to normal recurring year-end adjustments that are not
material). As of their respective dates, such reports filed with the SEC will
comply in all material respects with the Securities Laws and will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading. Any financial statements contained in any other reports to another
Regulatory Authority shall be prepared in accordance with Laws applicable to
such reports.
ARTICLE 8
ADDITIONAL AGREEMENTS
8.1 REGISTRATION STATEMENT; PROXY STATEMENT; SHAREHOLDER
APPROVAL. As soon as reasonably practicable after execution of this Agreement,
Huntington shall file the Registration Statement with the SEC, and shall use
its reasonable efforts to cause the Registration Statement to become effective
under the 1933 Act and take any action required to be taken under the
applicable state Blue Sky or securities Laws in connection with the issuance of
the shares of Huntington Common Stock upon consummation of the Merger.
Citi-Bancshares shall furnish all information concerning it and the holders of
its capital stock as Huntington may reasonably request in connection with such
action. Citi-Bancshares shall call a Shareholders' Meeting, to be held as soon
as reasonably practicable after the Registration Statement is declared
effective by the
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SEC, for the purpose of voting upon approval of this Agreement, Merger and such
other related matters as it deems appropriate. In connection with the
Shareholders' Meeting, (i) Citi-Bancshares and Huntington shall prepare, as
part of the Registration Statement filed with the SEC, a Proxy Statement and
mail such Proxy Statement to Citi-Bancshares' shareholders, (ii) the Parties
shall furnish to each other all information concerning them that they may
reasonably request in connection with such Proxy Statement, (iii) the Board of
Directors of Citi-Bancshares shall recommend (subject to compliance with their
fiduciary duties as advised by counsel) to Citi-Bancshares' shareholders the
approval of this Agreement, and (iv) the Board of Directors and officers of
Citi-Bancshares shall (subject to compliance with their fiduciary duties as
advised by counsel) use its reasonable efforts to obtain such shareholders'
approval.
8.2 NASDAQ LISTING. Huntington shall use its reasonable efforts
to list, prior to the Effective Time, on the Nasdaq National Market the shares
of Huntington Common Stock to be issued to the holders of Citi-Bancshares
Common Stock pursuant to the Merger, and Huntington shall give all notices and
make all filings with the NASD, required in connection with the transactions
contemplated herein.
8.3 APPLICATIONS. Huntington shall promptly prepare and file,
and Citi-Bancshares shall cooperate in the preparation and, where appropriate,
the filing of, applications with all Regulatory Authorities having jurisdiction
over the transactions contemplated by this Agreement, including the Federal
Reserve, Florida State Banking Department, seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement.
8.4 [RESERVED.]
8.5 AGREEMENT AS TO EFFORTS TO CONSUMMATE. Subject to the terms
and conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries to use, their respective reasonable efforts to take, or cause to
be taken, all actions, and to do, or cause to be done, all things necessary,
proper, or advisable under applicable Laws to consummate and make effective, as
soon as reasonably practicable after the date of this Agreement, the
transactions contemplated by this Agreement, including using its reasonable
efforts to lift or rescind any Order adversely affecting its ability to
consummate the transactions contemplated herein and to cause to be satisfied
the conditions referred to in Article 9 of this Agreement; provided, that
nothing herein shall preclude either Party from exercising its rights under
this Agreement. Each Party shall use, and shall cause each of its Subsidiaries
to use, its reasonable efforts to obtain all Consents necessary or desirable
for the consummation of the transactions contemplated by this Agreement on or
prior to March 15, 1997. The Parties shall deliver to each other, copies of
all filings, correspondence and orders to and from all Regulatory Authorities
in connection with the transactions contemplated hereby.
8.6 INVESTIGATION AND CONFIDENTIALITY.
(a) Prior to the Effective Time, each Party shall keep
the other Party advised of all material developments relevant to its business
and to consummation of the Merger and shall permit the other Party to make or
cause to be made such investigation of the business and
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properties of it and its Subsidiaries and of their respective financial and
legal conditions as the other Party reasonably requests, provided that such
investigation shall be reasonably related to the transactions contemplated
hereby and shall not interfere unnecessarily with normal operations. No
investigation by a Party shall affect the representations and warranties of the
other Party.
(b) Each Party shall, and shall cause its advisers and
agents to, maintain the confidentiality of all confidential information
furnished to it by the other Party concerning its and its Subsidiaries'
businesses, operations, and financial positions and shall not use such
information for any purpose except in furtherance of the transactions
contemplated by this Agreement. If this Agreement is terminated prior to the
Effective Time, each Party shall promptly return or certify the destruction of
all documents and copies thereof, and all work papers containing confidential
information received from the other Party. The Parties are subject to a
Confidentiality Agreement dated as of October 20, 1996, which is hereby
reaffirmed and adopted, and which shall remain in full force and effect
unmodified hereby and which shall survive any termination of this Agreement.
(c) Each Party agrees to give the other Party notice as
soon as practicable after any determination by it of any fact or occurrence
relating to the other Party which it has discovered through the course of its
investigation and which represents, or is reasonably likely to represent,
either a material breach of any representation, warranty, covenant or agreement
of the other Party or which has had or is reasonably likely to have a Material
Adverse Effect on the other Party.
8.7 PRESS RELEASES. Prior to the Effective Time,
Citi-Bancshares and Huntington shall consult with each other and their
respective counsel as to the form and substance of any press release or other
public disclosure materially related to this Agreement or any other transaction
contemplated hereby; provided, that nothing in this Section 8.7 shall be deemed
to prohibit any Party from making any disclosure which its counsel deems
necessary or advisable in order to satisfy such Party's disclosure obligations
imposed by Law.
8.8 CERTAIN ACTIONS. Except with respect to this Agreement and
the transactions contemplated hereby, neither Citi-Bancshares nor any Affiliate
or any Representatives thereof retained by Citi-Bancshares shall directly or
indirectly solicit or encourage any Acquisition Proposal by any Person. Except
to the extent necessary to comply with the fiduciary duties of Citi-Bancshares'
Board of Directors as advised by counsel, neither Citi-Bancshares nor any
Affiliate or Representative thereof shall furnish any non-public information
that it is not legally obligated to furnish, negotiate with respect to, or
enter into any Contract with respect to, any Acquisition Proposal, but Citi-
Bancshares may communicate information about such an Acquisition Proposal to
its shareholders if and to the extent that it is required to do so in order to
comply with its legal obligations as advised by counsel. Citi-Bancshares shall
promptly notify Huntington orally and in writing in the event that it receives
any inquiry or proposal relating to any such transaction. Citi-Bancshares
shall (i) immediately cease and cause to be terminated any existing activities,
discussions or negotiations with any Persons conducted heretofore with respect
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to any of the foregoing, and (ii) direct and use its reasonable efforts to
cause all of its Representatives not to engage in any of the foregoing.
8.9 TAX TREATMENT. Each of the Parties undertakes and agrees to
use its reasonable efforts to cause the Merger, and to take no action which
would cause the Merger not, to qualify for treatment as a "reorganization"
within the meaning of Section 368(a) of the Internal Revenue code for federal
income tax purposes.
8.10 AGREEMENTS WITH RESPECT TO AFFILIATES. Citi-Bancshares has
disclosed in Section 8.10 of the Citi-Bancshares Disclosure Memorandum all
Persons whom it reasonably believes is an "affiliate" of Citi-Bancshares for
purposes of Rule 145 under the 1933 Act. Citi-Bancshares shall use its
reasonable efforts to cause each such Person to deliver to Huntington not later
than 30 days prior to the Effective Time, a written agreement, substantially in
the form of Exhibit 3, providing that such Person will not sell, pledge,
transfer, or otherwise dispose of the shares of Citi-Bancshares Common Stock
held by such Person except as contemplated by such agreement or by this
Agreement and will not sell, pledge, transfer, or otherwise dispose of the
shares of Huntington Common Stock to be received by such Person upon
consummation of the Merger except in compliance with applicable provisions of
the 1933 Act.
8.11 EMPLOYEE BENEFITS AND CONTRACTS.
(a) Except as set forth in this Agreement, including Section
8.13, following the Effective Time, Huntington shall provide to officers and
employees of Citi-Bancshares employee benefits under employee benefit and
welfare plans, incentive plans and stock option and other plans involving the
potential issuance of Huntington Common Stock, on terms and conditions which
when taken as a whole are substantially similar to those currently provided
generally by Huntington and its Affiliates to their similarly situated officers
and employees. For purposes of participation and vesting under such employee
benefit plans, the service of the employees of the Citi-Bancshares Companies
prior to the Effective Time shall be treated as service with a Huntington
Company participating in such employee benefit plans. Furthermore, officers
and employees of Citi-Bancshares Companies (and their spouses and dependents,
if applicable) may, upon the cessation of their participation in a
Citi-Bancshares Benefit Plan, immediately participate in the corresponding
Benefit Plan maintained by Huntington without regard to pre-existing conditions
or waiting periods and all claims paid under a Citi-Bancshares Benefit Plan
shall be counted under a Huntington Benefit Plan for purposes of annual
deductibles and annual out of pocket expenses. Benefit accruals under any
Huntington defined benefit pension plan ("Huntington Plan") will not be offset
by benefit accruals under the "Citizens National Bank of Leesburg Defined
Benefit Pension Plan (the "Pension Plan"); however, in the event the Pension
Plan merges with the Huntington Plan, and if benefit accruals under the Pension
Plan cease, the Huntington Plan will provide future benefit accruals under the
Huntington Plan that are no less than those benefits that would accrue assuming
the Huntington Plan implements a "fresh start formula without wear away" (as
described in Treasury Regulation Section 1.401(a)(4)-13(c)(4)(i)). To the
extent a participant has a vested benefit or other vested amount earned or
accrued through the Effective Time under a Citi-Bancshares Benefit Plans,
Huntington agrees to pay such benefits in accordance with the terms of such
Citi-Bancshares Benefit Plans; provided, however, that (i) with
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respect to the Citizens National Bank of Leesburg Profit Sharing Plan & Trust
and the Pension Plan (other than death benefits and interest rates as set forth
below), compliance with section 411(d)(6) of the Code will constitute
satisfaction of the requirements of this sentence; (ii) with respect to a
participant's accrued benefit under the Pension Plan, Huntington agrees, for
twenty-four months following the Effective Time (to the extent permitted by
applicable law), to continue to pay death benefits and compute benefits using
the death benefit provisions and interest rate factors set forth in the Pension
Plan as of the Effective Time.
(b) Section 8.11 of the Citi-Bancshares Disclosure Memorandum sets
forth certain Citi-Bancshares Benefit Plans, employment agreements and other
arrangements. Among those listed include severance benefits, employment
agreements, change in control agreements, retention agreements, consulting
contracts, compensation contracts (collectively, "Continuation Benefits").
After the Effective Time, Huntington shall provide to officers and employees of
Citi-Bancshares Companies benefits in accordance with either (i) the
Continuation Benefits or (ii) in the absence of any such contracts, plans or
policies giving rise to such Continuation Benefits, in accordance with the
Huntington's policies generally.
8.12 INDEMNIFICATION.
(a) For a period of four years after the Effective Time,
Huntington shall, and shall cause its Subsidiaries, including the Surviving
Corporation to, indemnify, defend and hold harmless the present and former
directors, officers, employees and agents of the Citi-Bancshares Companies
(each, an "Indemnified Party") against all Liabilities arising out of actions
or omissions arising out of the Indemnified Party's service or services as
directors, officers, employees or agents of Citi-Bancshares or, at
Citi-Bancshares' request, of another corporation, partnership, joint venture,
trust or other enterprise occurring at or prior to the Effective Time
(including the transactions contemplated by this Agreement) to the full extent
permitted under Federal and/or Florida Law, or by Citi-Bancshares' Articles of
Incorporation and Bylaws consistent with Florida Law as in effect on the date
hereof, whether or not any Huntington Company is insured against such matter,
including provisions relating to advances of expenses incurred in the defense
of any Litigation, with respect to any Liability, claim, demand, action or
Litigation asserted or made prior to or at any time after the Effective Time.
All such rights to indemnification with respect to any such Liability, claim,
demand, or action shall continue until the final disposition of such
Litigation, claims, Liability, demands and actions regardless of when such
claim, demand, action Litigation and/or Liability was made or asserted;
provided, however, that nothing contained herein shall increase or lengthen the
duration of obligations with respect to such indemnification by the Huntington,
the Surviving Corporation or any other Huntington Company over that to which
Citi-Bancshares would have been subject had the Merger not been consummated.
The provisions of this Section 8.12 shall survive the Effective Time and the
Closing Date. Without limiting the foregoing, in any case in which approval by
the Surviving Corporation is required to effectuate any indemnification,
Huntington shall cause the Surviving Corporation to direct, at the election of
the Indemnified Party, that the determination of any such approval shall be
made by independent counsel mutually agreed upon between Huntington and the
Indemnified Party.
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8.13 STOCK OPTIONS.
(a) At the Effective Time, each outstanding option to purchase shares of
Citi-Bancshares Common Stock (a "Citi-Bancshares Stock Option") issued
pursuant to any Citi-Bancshares Stock Plan shall be fully vested and shall be
converted into an option under the Huntington Stock Option Plan (the
"Huntington Stock Option Plan") to acquire, on the same terms and conditions as
were applicable to vested rights under such Citi-Bancshares Stock Option, the
same number of shares of Huntington Common Stock as the holder of such
Citi-Bancshares Stock Option would have been entitled to receive pursuant to
the Merger had such holder exercised such option in full immediately prior to
the Effective Time and elected to receive the Stock Consideration, at an
exercise price per share of Huntington Common Stock equal to (y) the aggregate
exercise price for the shares of Citi-Bancshares Common Stock otherwise
purchasable pursuant to such Citi-Bancshares Stock Option immediately prior to
the Effective Time divided by (z) the number of full shares of Huntington
Common Stock deemed purchasable pursuant to such Citi-Bancshares Stock Option
immediately prior to the Effective Time.
(b) As soon as practicable after the Effective Time,
Huntington shall deliver to the holders of such converted Citi-Bancshares Stock
Options appropriate notices setting forth such holders' rights pursuant to the
Huntington Stock Option Plan and the agreements evidencing such converted
Citi-Bancshares Stock Options and the original grants of such Citi-Bancshares
Stock Options shall continue in effect on the same terms and conditions
(subject to the adjustments required by this Section 8.13 after giving effect
to the Merger and the conversion as set forth above).
(c) Huntington shall take all corporate action necessary
to reserve for issuance a sufficient number of shares of Huntington Common
Stock for delivery upon exercise of Citi-Bancshares Stock Options converted in
accordance with this Section 8.13. As soon as practicable after the Effective
Time, Huntington shall include the shares of Huntington Common Stock issuable
under the converted Citi-Bancshares Stock Options under an existing effective
registration statement or shall file a registration statement on Form S-3 or
Form S-8, as the case may be (or any successor or other appropriate forms made
available by the SEC), or another appropriate form with respect to the shares
of Huntington Common Stock subject to such options and shall use all reasonable
efforts to maintain the effectiveness of such registration statement or
registration statements (and maintain the current status of the prospectus or
prospectuses contained therein) for so long as such options remain outstanding.
With respect to those individuals who subsequent to the Merger will be subject
to the reporting requirements under Section 16(a) of the Exchange Act, where
applicable, Huntington shall administer the Huntington Stock Option Plan in a
manner that complies with Rule 16b-3 promulgated under the Exchange Act to the
extent the Citi-Bancshares Plan complied with such rule prior to the Merger.
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ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE
9.1 CONDITIONS TO OBLIGATIONS OF EACH PARTY. The respective
obligations of each Party to perform this Agreement and consummate the Merger
and the other transactions contemplated hereby are subject to the satisfaction
of the following conditions, unless waived by both Parties pursuant to Section
11.6 of this Agreement:
(A) SHAREHOLDER APPROVAL. The shareholders of Citi-Bancshares
shall have approved this Agreement, and the consummation of the transactions
contemplated hereby, including the Merger, as and to the extent required by Law
and by the provisions of any governing instruments.
(B) REGULATORY APPROVALS. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities required
for consummation of the Merger shall have been obtained or made and shall be in
full force and effect and all waiting periods required by Law shall have
expired. No Consent obtained from any Regulatory Authority which is necessary
to consummate the transactions contemplated hereby shall be conditioned or
restricted in a manner (including requirements relating to the raising of
additional capital or the disposition of Assets) which in the reasonable
judgment of the Board of Directors of either Party would so materially
adversely impact the economic or business assumptions of the transactions
contemplated by this Agreement so as to render inadvisable the consummation of
the Merger.
(C) CONSENTS AND APPROVALS. Each Party shall have obtained any
and all Consents required for consummation of the Merger (other than those
referred to in Section 9.1(b) of this Agreement) or for the preventing of any
Default under any Contract or Permit of such Party which, if not obtained or
made, is reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on such Party. No Consent so obtained which is
necessary to consummate the transactions contemplated hereby shall be
conditioned or restricted in a manner which in the reasonable judgment of the
Board of Directors of either Party would so materially adversely impact the
economic or business assumptions of the transactions contemplated by this
Agreement so as to render inadvisable the consummation of the Merger.
(D) LEGAL PROCEEDINGS. No court or governmental authority or
Regulatory Authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced or entered any Law or Order (whether temporary,
preliminary or permanent) or taken any other action which prohibits, restricts
or makes illegal consummation of the transactions contemplated by this
Agreement.
(E) REGISTRATION STATEMENT. The Registration Statement shall be
effective under the 1933 Act, no stop orders suspending the effectiveness of
the Registration Statement shall have been issued, no action, suit, proceeding
or investigation by the SEC to suspend the effectiveness thereof shall have
been initiated and be continuing, and all
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necessary approvals under state securities Laws or the 1933 Act or 1934 Act
relating to the issuance or trading of the shares of Huntington Common Stock
issuable pursuant to the Merger shall have been received.
(F) NASDAQ NATIONAL MARKET LISTING. The shares of Huntington
Common Stock issuable pursuant to the Merger shall have been approved for
listing on the Nasdaq National Market.
(G) TAX MATTERS. Each Party shall have received a written
opinion of counsel from Huntington's Counsel, in form reasonably satisfactory
to such Parties (the "Tax Opinion"), to the effect that (i) the Merger will
constitute a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code, (ii) the exchange in the Merger of Citi-Bancshares
Common Stock for Huntington Common Stock will not give rise to gain or loss to
the shareholders of Citi-Bancshares with respect to such exchange (except to
the extent of any cash received), and (iii) none of Citi-Bancshares,
Huntington-Florida or Huntington will recognize gain or loss as a consequence
of the Merger (except for amounts resulting from any required change in
accounting methods and any income and deferred gain recognized pursuant to
Treasury regulations issued under Section 1502 of the Internal Revenue Code).
In rendering such Tax Opinion, such counsel shall be entitled to rely upon
representations of Citi-Bancshares' officers, directors and those Persons that
have executed Shareholder's Agreements and officers of Huntington reasonably
satisfactory in form and substance to such counsel.
(H) EMPLOYMENT AGREEMENTS. Huntington shall have affirmed those
certain employment agreements between Citi-Bancshares, Huntington,
Huntington-Florida and each of the persons identified in Section 9.1(h) of the
Citi-Bancshares Disclosure Memorandum, which have been entered into on or
prior to the date hereof.
9.2 CONDITIONS TO OBLIGATIONS OF HUNTINGTON. The obligations of
Huntington to perform this Agreement and consummate the Merger and the other
transactions contemplated hereby are subject to the satisfaction of the
following conditions, unless waived by Huntington pursuant to Section 11.6(a)
of this Agreement:
(A) REPRESENTATIONS AND WARRANTIES. For purposes of this
Section 9.2(a), the accuracy of the representations and warranties of
Citi-Bancshares set forth in this Agreement shall be assessed as of the date of
this Agreement and as of the Effective Time with the same effect as though all
such representations and warranties had been made on and as of the Effective
Time (provided that representations and warranties which are confined to a
specified date shall speak only as of such date). The representations and
warranties of Citi-Bancshares set forth in Section 5.3 of this Agreement shall
be true and correct (except for inaccuracies which are de minimis in amount).
The representations and warranties of Citi-Bancshares set forth in Sections
5.19, 5.20, and 5.21 of this Agreement shall be true and correct in all
material respects. There shall not exist inaccuracies in the representations
and warranties of Citi-Bancshares set forth in this Agreement (including the
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representations and warranties set forth in Sections 5.3, 5.19, 5.20, and 5.21)
such that the aggregate effect of such inaccuracies has, or is reasonably
likely to have, a Material Adverse Effect on Citi-Bancshares; provided that,
for purposes of this sentence only, those representations and warranties which
are qualified by references to "material" or "Material Adverse Effect" shall be
deemed not to include such qualifications.
(B) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
the agreements and covenants of Citi-Bancshares to be performed and complied
with pursuant to this Agreement and the other agreements contemplated hereby
prior to the Effective Time shall have been duly performed and complied with in
all material respects.
(C) CERTIFICATES. Citi-Bancshares shall have delivered to
Huntington (i) a certificate, dated as of the Effective Time and signed on its
behalf by its chief executive officer and its chief financial officer, to the
effect that the conditions of its obligations set forth in Section 9.2(a) and
9.2(b) of this Agreement have been satisfied, and (ii) certified copies of
resolutions duly adopted by Citi-Bancshares' Board of Directors and
shareholders evidencing the taking of all corporate action necessary to
authorize the execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby, all in such reasonable
detail as Huntington and its counsel shall request.
(D) OPINION OF COUNSEL. Huntington shall have received an
opinion of XxXxx Xxxxxxx Xxxxxxxx Xxxxxxx Xxxxxx & Xxx, counsel to
Citi-Bancshares, and Xxxxxx & Bird, special counsel to Citi-Bancshares, dated
as of the Closing, in form reasonably satisfactory to Huntington, as to the
matters set forth in Exhibit 4.
(E) ACCOUNTANT'S LETTERS. Huntington shall have received from
Citi-Bancshares' Auditors letters dated not more than five days prior to the
date of the Proxy Statement with respect to certain financial information
regarding Citi-Bancshares, in form and substance reasonably satisfactory to
Huntington, which letters shall be based upon customary specified procedures
undertaken by such firm in accordance with Statement of Auditing Standard No.
72.
(F) AFFILIATES' AGREEMENTS. Huntington shall have received from
each Affiliate of Citi-Bancshares, the affiliate's agreement as and to the
extent specified in Section 8.10 of this Agreement.
(G) SHAREHOLDERS' EQUITY. Citi-Bancshares' shareholders' equity
as of the end of last fiscal quarter preceding Closing shall not be less than
Citi-Bancshares' shareholders' equity as of June 30, 1996, excluding for
purposes of the calculation of such shareholders' equity, the effects of (i)
all dividends declared and/or payable by Citi-Bancshares consistent with terms
of this Agreement, (ii) all net changes resulting from application of FASB
Statement No. 115 with respect to unrealized securities gains and losses, or
other changes in Laws, GAAP or RAP not in effect for the Citi-Bancshares'
Companies for periods prior to June 30, 1996, (iii) all costs, fees and
charges, including fees and charges of Citi-Bancshares' accountants, counsel
and investment bankers, whether or not accrued or paid, that are
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related to the sale of Citi-Bancshares, and (iv) any reductions in
Citi-Bancshares' shareholders' equity resulting from any actions or changes in
policies of Citi-Bancshares taken at the request of Huntington.
9.3 CONDITIONS TO OBLIGATIONS OF CITI-BANCSHARES. The
obligations of Citi-Bancshares to perform this Agreement and consummate the
Merger and the other transactions contemplated hereby are subject to the
satisfaction of the following conditions, unless waived by Citi-Bancshares
pursuant to Section 11.6(b) of this Agreement:
(A) REPRESENTATIONS AND WARRANTIES. For purposes of this
Section 9.3(a), the accuracy of the representations and warranties of
Huntington set forth in this Agreement shall be assessed as of the date of this
Agreement and as of the Effective Time with the same effect as though all such
representations and warranties had been made on and as of the Effective Time
(provided that representations and warranties which are confined to a specified
date shall speak only as of such date). The representations and warranties of
Huntington set forth in Section 6.3 of this Agreement shall be true and correct
(except for inaccuracies which are de minimis in amount). The representations
and warranties of Huntington set forth in Section 6.12 of this Agreement shall
be true and correct in all material respects. There shall not exist
inaccuracies in the representations and warranties of Huntington set forth in
this Agreement (including the representations and warranties set forth in
Sections 6.3 and 6.12 such that the aggregate effect of such inaccuracies has,
or is reasonably likely to have, a Material Adverse Effect on Huntington;
provided that, for purposes of this sentence only, those representations and
warranties which are qualified by references to "material" or "Material Adverse
Effect" shall be deemed not to include such qualifications.
(B) PERFORMANCE OF AGREEMENTS AND COVENANTS. Each and all of
the agreements and covenants of Huntington to be performed and complied with
pursuant to this Agreement and the other agreements contemplated hereby prior
to the Effective Time shall have been duly performed and complied with in all
material respects, and the Registration Statement shall have been declared and
shall remain effective.
(C) CERTIFICATES. Huntington shall have delivered to
Citi-Bancshares (i) a certificate, dated as of the Effective Time and signed on
its behalf by its chief executive officer and its chief financial officer, to
the effect that the conditions of its obligations set forth in Section 9.3(a)
and 9.3(b) of this Agreement have been satisfied, and (ii) certified copies of
resolutions duly adopted by Huntington's Board of Directors and
Huntington-Florida's Board of Directors and shareholders evidencing the taking
of all corporate action necessary to authorize the execution, delivery and
performance of this Agreement, and the consummation of the transactions
contemplated hereby, all in such reasonable detail as Citi-Bancshares and its
counsel shall request.
(D) OPINION OF COUNSEL. Citi-Bancshares shall have received an
opinion of Porter, Wright, Xxxxxx & Xxxxxx, counsel to Huntington, dated as of
the Effective Time, in form reasonably acceptable to Citi-Bancshares, as to the
matters set forth in Exhibit 5.
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(E) FAIRNESS OPINION. Citi-Bancshares shall have received from
The Xxxxxx Xxxxxx Company or such other investment banking firm retained by
Citi-Bancshares, a letter, dated not more than five business days prior to the
date of the Proxy Statement, to the effect that, in the opinion of such firm,
the consideration to be received by Citi-Bancshares shareholders in connection
with the Merger is fair, from a financial point of view, to such shareholders.
ARTICLE 10
TERMINATION
10.1 TERMINATION. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
shareholders of Citi-Bancshares, this Agreement may be terminated and the
Merger abandoned at any time prior to the Effective Time:
(a) By mutual consent of the Board of Directors of Huntington
and the Board of Directors of Citi-Bancshares; or
(b) By the Board of Directors of either Party (provided that the
terminating Party is not then in material breach of any representation,
warranty, covenant, or other agreement contained in this Agreement) in the
event of an inaccuracy of any representation or warranty contained in this
Agreement of the other Party which cannot be or has not been cured within 30
days after the giving of written notice to such Party of such inaccuracy and
which inaccuracy would provide the other Party the ability to refuse to
consummate the Merger under the applicable standard set forth in Section 9.2(a)
of this Agreement in the case of any termination by Huntington and Section
9.3(a) of this Agreement in the case of any termination by Citi-Bancshares; or
(c) By the Board of Directors of either Party (provided that the
terminating Party is not then in material breach of any representation,
warranty, covenant, or other agreement contained in this Agreement) in the
event of a material breach by the other Party of any covenant or agreement
contained in this Agreement which cannot be or has not been cured within 30
days after the giving of written notice to the breaching Party of such breach;
or
(d) By the Board of Directors of either Party (provided that the
terminating Party is not then in material breach of any representation,
warranty, covenant, or other agreement contained in this Agreement) in the
event (i) any Consent of any Regulatory Authority required for consummation of
the Merger and the other transactions contemplated hereby shall have been
denied by final nonappealable action of such authority or if any action taken
by such authority is not appealed within the time limit for appeal, or (ii) the
shareholders of Citi-Bancshares fail to vote their approval of this Agreement
and the transactions contemplated hereby as required by the FBCA at the
Shareholders' Meeting where the transactions were presented to such
shareholders for approval and voted upon; or
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(e) By the Board of Directors of either Party in the event that
the Merger shall not have been consummated by May 31, 1997, if the failure to
consummate the transactions contemplated hereby on or before such date is not
caused by any breach of this Agreement by the Party electing to terminate
pursuant to this Section 10.1(e); or
(f) By the Board of Directors of either Party (provided that the
terminating Party is not then in material breach of any representation,
warranty, covenant, or other agreement contained in this Agreement) in the
event that any of the conditions precedent to the obligations of such Party to
consummate the Merger cannot be satisfied or fulfilled by the date specified in
Section 10.1(e) of this Agreement; or
(g) By Huntington, in the event that the Board of Directors of
Citi-Bancshares shall have failed to reaffirm its approval of the Merger and
the transactions contemplated by this Agreement (to the exclusion of any other
Acquisition Proposal), or shall have resolved not to reaffirm the Merger, or
shall have affirmed, recommended or authorized entering into any other
Acquisition Proposal or other transaction involving a merger, share exchange,
consolidation or transfer of substantially all of the Assets of
Citi-Bancshares.
10.2 EFFECT OF TERMINATION. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement shall become void and have no effect, except that (i) the provisions
of this Section 10.2 and Article 11 and Section 8.6(b) of this Agreement shall
survive any such termination and abandonment, and (ii) a termination pursuant
to Sections 10.1(b), 10.1(c) or 10.1(f) of this Agreement shall not relieve the
breaching Party from Liability for an uncured willful breach of a
representation, warranty, covenant, or agreement giving rise to such
termination. The Stock Option Agreement and the Confidentiality Agreement
shall be governed by their own terms and as to termination and not by this
Section 10.2.
10.3 NON-SURVIVAL OF REPRESENTATIONS AND COVENANTS. The
respective representations, warranties, obligations, covenants, and agreements
of the Parties shall not survive the Effective Time except this Section 10.3
and Articles 2, 3, 4 and 11 and Sections 8.10, 8.11, and 8.12.
ARTICLE 11
MISCELLANEOUS
11.1 DEFINITIONS.
(a) Except as otherwise provided herein, the capitalized
terms set forth below shall have the following meanings:
"ACQUISITION PROPOSAL" with respect to a Party shall mean any
tender offer or exchange offer or any proposal for a merger, acquisition of all
of the stock or assets of, or
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other business combination involving such Party or any of its Subsidiaries or
the acquisition of a substantial equity interest in, or a substantial portion
of the assets of, such Party or any of its Subsidiaries.
"AFFILIATE" of a Person shall mean: (i) any other Person directly,
or indirectly through one or more intermediaries, controlling, controlled by or
under common control with such Person; (ii) any officer, director, partner,
employer, or direct or indirect beneficial owner of any 10% or greater equity
or voting interest of such Person; or (iii) any other Person for which a Person
described in clause (ii) acts in any such capacity.
"AGREEMENT" shall mean this Agreement and Plan of Merger,
including the Exhibits delivered pursuant hereto and incorporated herein by
reference.
"ARTICLES OF MERGER" shall mean Articles of Merger or a
Certificate of Merger executed by Huntington-Florida and Citi-Bancshares, and
filed with the Secretary of States of the States of Florida and Ohio relating
to the Merger as contemplated by Section 1.1 of this Agreement.
"ASSETS" of a Person shall mean all of the assets, properties,
businesses and rights of such Person of every kind, nature, character and
description, whether real, personal or mixed, tangible or intangible, accrued
or contingent, or otherwise relating to or utilized in such Person's business,
directly or indirectly, in whole or in part, whether or not carried on the
books and records of such Person, and whether or not owned in the name of such
Person or any Affiliate of such Person and wherever located.
"BHC ACT" shall mean the federal Bank Holding Company Act of 1956, as amended.
"CITI-BANCSHARES COMMON STOCK" shall mean the $.01 par value
common stock of Citi-Bancshares.
"CITI-BANCSHARES COMPANIES" shall mean, collectively,
Citi-Bancshares and all Citi-Bancshares Subsidiaries.
"CITI-BANCSHARES DISCLOSURE MEMORANDUM" shall mean the written
information entitled "Citi-Bancshares, Inc. Disclosure Memorandum" delivered
prior to the date of this Agreement to Huntington describing in reasonable
detail the matters contained therein and, with respect to each disclosure made
therein, specifically referencing each Section of this Agreement under which
such disclosure is being made. Information disclosed with respect to one
Section shall not be deemed to be disclosed for purposes of any other Section
not specifically referenced with respect thereto.
"CITI-BANCSHARES FINANCIAL STATEMENTS" shall mean (i) the
consolidated balance sheets (including related notes and schedules, if any) of
Citi-Bancshares as of June 30, 1996, and as of December 31, 1995 and 1994, and
the related statements of income,
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42
changes in shareholders' equity, and cash flows (including related notes and
schedules, if any) for the six months ended June 30, 1996, and for each of the
three fiscal years ended December 31, 1995, 1994 and 1993, and (ii) the
consolidated balance sheets of Citi-Bancshares (including related notes and
schedules, if any) and related statements of income, changes in shareholders'
equity, and cash flows (including related notes and schedules, if any) included
in the Call Reports filed with the FDIC with respect to periods ended
subsequent to June 30, 1996.
"CITI-BANCSHARES STOCK PLANS" shall mean the stock option and
other stock-based compensation plans and agreements of Citi-Bancshares.
"CITI-BANCSHARES SUBSIDIARIES" shall mean the Subsidiaries of
Citi-Bancshares, if any, which shall include the Citi-Bancshares Subsidiaries
described in Section 5.4 of this Agreement and any corporation, bank, savings
association, or other organization acquired as a Subsidiary of Citi-Bancshares
in the future and owned by Citi-Bancshares at the Effective Time.
"CLOSING DATE" shall mean the date on which the Closing occurs.
"CONSENT" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person pursuant to
any Contract, Law, Order, or Permit.
"CONTRACT" shall mean any written or oral agreement, arrangement,
authorization, commitment, contract, indenture, instrument, lease, obligation,
plan, practice, restriction, understanding or undertaking of any kind or
character, or other document to which any Person is a party or that is binding
on any Person or its capital stock, Assets or business.
"DEFAULT" shall mean (i) any breach or violation of or default
under any Contract, Order or Permit, (ii) any occurrence of any event that with
the passage of time or the giving of notice or both would constitute a breach
or violation of or default under any Contract, Order or Permit, or (iii) any
occurrence of any event that with or without the passage of time or the giving
of notice would give rise to a right to terminate or revoke, change the current
terms of, or renegotiate, or to accelerate, increase, or impose any Liability
under, any Contract, Order or Permit, where, in any such event, such Default is
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on a Party.
"FBCA" shall mean the Florida Business Corporation Act.
"FDIC" shall mean the Federal Deposit Insurance Corporation.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to pollution or
protection of human health or the environment (including ambient air, surface
water, ground water,
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43
land surface or subsurface strata) and which are administered, interpreted or
enforced by the United States Environmental Protection Agency and state and
local agencies with jurisdiction over, and including common law in respect of,
pollution or protection of the environment, including the Comprehensive
Environmental Response Compensation and Liability Act, as amended, 42 U.S.C.
9601 et seq. ("CERCLA"), the Resource Conservation and Recovery Act, as
amended, 42 U.S.C. 6901 et seq. ("RCRA"), and other Laws relating to emissions,
discharges, releases or threatened releases of any Hazardous Substance, or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of any Hazardous Substance.
"EQUITY RIGHTS" shall mean all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings, warrants, or
other binding obligations of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares of the
capital stock of a Person or by which a Person is or may be bound to issue
additional shares of its capital stock or other Equity Rights.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended.
"ERISA AFFILIATE" shall have the meaning provided in Section 5.14
of this Agreement.
"EXHIBITS" 1 through 5, inclusive, shall mean the Exhibits so
marked, copies of which are attached to this Agreement. Such Exhibits are
hereby incorporated by reference herein and made a part hereof, and may be
referred to in this Agreement and any other related instrument or document
without being attached hereto.
"GAAP" shall mean generally accepted accounting principles,
consistently applied during the periods involved.
"HAZARDOUS SUBSTANCE" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance or toxic substance (as
those terms are defined by any applicable Environmental Laws) and (ii) any
chemicals, pollutants, contaminants, petroleum, petroleum products, or oil (and
specifically shall include asbestos requiring abatement, removal or
encapsulation pursuant to the requirements of governmental authorities and any
polychlorinated biphenyls).
"HSR ACT" shall mean Section 7A of the Xxxxxxx Act, as added by
Title II of the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended, and the rules and regulations promulgated thereunder.
"HUNTINGTON CAPITAL STOCK" shall mean, collectively, the
Huntington Common Stock, the Huntington Preferred Stock and any other class or
series of capital stock of Huntington.
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00
"XXXXXXXXXX XXXXXX XXXXX" shall mean the no par value common stock
of Huntington.
"HUNTINGTON COMPANIES" shall mean, collectively, Huntington and
all Huntington Subsidiaries.
"HUNTINGTON FINANCIAL STATEMENTS" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if any) of
Huntington as of June 30, 1996, and as of December 31, 1995 and 1994, and the
related statements of income, changes in shareholders' equity, and cash flows
(including related notes and schedules, if any) for the three months ended June
30, 1996, and for each of the three years ended December 31, 1995, 1994 and
1993, as filed by Huntington in SEC Documents, and (ii) the consolidated
statements of condition of Huntington (including related notes and schedules,
if any) and related statements of income, changes in shareholders' equity, and
cash flows (including related notes and schedules, if any) included in SEC
Documents filed with respect to periods ended subsequent to June 30, 1996.
"HUNTINGTON PREFERRED STOCK" shall mean the "blank" serial
preferred stock of Huntington without par value.
"HUNTINGTON RIGHTS" shall mean the preferred stock purchase rights
issued pursuant to the Huntington Rights Agreement.
"HUNTINGTON RIGHTS AGREEMENT" shall mean that certain Rights
Agreement; dated as of February 22, 1990, as amended and or restated, between
Huntington and The Huntington Trust Company, N.A., as Rights Agent.
"HUNTINGTON-FLORIDA COMMON STOCK" shall mean the no par value
common stock of Huntington-Florida.
"INTERNAL REVENUE CODE" shall mean the Internal Revenue Code of
1986, as amended, and the rules and regulations promulgated thereunder.
"KNOWLEDGE" as used with respect to a Person (including references
to such Person being aware of a particular matter) shall mean those facts that
are known or should reasonably have been known after due inquiry by the
Chairman, President, Chief Financial Officer, Chief Accounting Officer, Chief
Credit Officer, General Counsel, any Assistant or Deputy General Counsel, or
any Senior or Executive Vice President of such Person and the knowledge of any
such persons obtained or which would have been obtained from a reasonable
investigation.
"LAW" shall mean any code, law, ordinance, regulation, reporting
or licensing requirement, rule, or statute applicable to a Person or its
Assets, Liabilities or business, including those promulgated, interpreted or
enforced by any Regulatory Authority.
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45
"LIABILITY" shall mean any direct or indirect, primary or
secondary, liability, indebtedness, obligation, penalty, cost or expense
(including costs of investigation, collection and defense), claim, deficiency,
guaranty or endorsement of or by any Person (other than endorsements of notes,
bills, checks, and drafts presented for collection or deposit in the ordinary
course of business) of any type, whether accrued, absolute or contingent,
liquidated or unliquidated, matured or unmatured, or otherwise.
"LIEN" shall mean any conditional sale agreement, default of
title, easement, encroachment, encumbrance, hypothecation, infringement, lien,
mortgage, pledge, reservation, restriction, security interest, title retention
or other security arrangement, or any adverse right or interest, charge, or
claim of any nature whatsoever of, on, or with respect to any property or
property interest, other than (i) Liens for current property Taxes not yet due
and payable, (ii) for depository institution Subsidiaries of a Party, pledges
to secure deposits and other Liens incurred in the ordinary course of the
banking business, and (iii) Liens which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on a Party.
"LITIGATION" shall mean any action, arbitration, cause of action,
claim, complaint, criminal prosecution, demand letter, governmental or other
examination or investigation, hearing, inquiry, administrative or other
proceeding, or notice (written or oral) by any Person alleging potential
Liability or requesting information relating to or affecting a Party, its
business, its Assets (including Contracts related to it), or the transactions
contemplated by this Agreement, but shall not include regular, periodic
examinations of depository institutions and their Affiliates by Regulatory
Authorities.
"LOAN PROPERTY" shall mean any property owned by the Party in
question or by any of its Subsidiaries or in which such Party or Subsidiary
holds a security interest, and, where required by the context, includes the
owner or operator of such property, but only with respect to such property.
"MATERIAL" OR "MATERIAL" for purposes of this Agreement shall be
determined in light of the facts and circumstances of the matter in question;
provided that any specific monetary amount stated in this Agreement shall
determine materiality in that instance.
"MATERIAL ADVERSE EFFECT" on a Party shall mean an event, change
or occurrence which, individually or together with any other event, change or
occurrence, has a material adverse impact on (i) the financial position,
business, or results of operations of such Party and its Subsidiaries, taken as
a whole, or (ii) the ability of such Party to perform its obligations under
this Agreement or to consummate the Merger or the other transactions
contemplated by this Agreement, provided that "material adverse effect" shall
not be deemed to include the impact of (x) changes in banking and similar Laws
of general applicability or interpretations thereof by courts or governmental
authorities, (y) changes in generally accepted accounting principles or
regulatory accounting principles generally applicable to banks and their
holding companies, and (z) the Merger and compliance with the provisions of
this Agreement on the operating performance of the Parties.
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46
"NASD" shall mean the National Association of Securities Dealers,
Inc.
"NASDAQ NATIONAL MARKET" shall mean the National Market System of
the National Association of Securities Dealers Automated Quotations System.
"1933 ACT" shall mean the Securities Act of 1933, as amended.
"1934 ACT" shall mean the Securities Exchange Act of 1934, as
amended.
"ORC" shall mean the Ohio Revised Code.
"ORDER" shall mean any administrative decision or award, decree,
injunction, judgment, order, quasi-judicial decision or award, ruling, or writ
of any federal, state, local or foreign or other court, arbitrator, mediator,
tribunal, administrative agency or Regulatory Authority.
"PARTICIPATION FACILITY" shall mean any facility or property in
which the Party in question or any of its Subsidiaries participates in the
management and, where required by the context, said term means the owner or
operator of such facility or property, but only with respect to such facility
or property.
"PARTY" shall mean either Citi-Bancshares or Huntington, and
"PARTIES" shall mean both Citi-Bancshares and Huntington.
"PERMIT" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing, franchise,
license, notice, permit, or right to which any Person is a party or that is or
may be binding upon or inure to the benefit of any Person or its securities,
Assets or business.
"PERSON" shall mean a natural person or any legal, commercial or
governmental entity, such as, but not limited to, a corporation, general
partnership, joint venture, limited partnership, limited liability company,
trust, business association, group acting in concert, or any person acting in a
representative capacity.
"PROXY STATEMENT" shall mean the proxy statement used by
Citi-Bancshares to solicit the approval of its shareholders of the transactions
contemplated by this Agreement, which shall include the prospectus of
Huntington relating to the issuance of the Huntington Common Stock to holders
of Citi-Bancshares Common Stock.
"REGISTRATION STATEMENT" shall mean the Registration Statement on
Form S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC by
Huntington under the 1933 Act with respect to the shares of Huntington Common
Stock to be issued to the shareholders of Citi-Bancshares in connection with
the transactions contemplated by this Agreement.
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47
"REGULATORY AUTHORITIES" shall mean, collectively, the United
States Department of Justice, the Board of the Governors of the Federal Reserve
System, the Office of the Comptroller of the Currency, the Federal Deposit
Insurance Corporation, the Florida State Banking Department, all other state
regulatory agencies having jurisdiction over the Parties and their respective
Subsidiaries, the NASD, and the SEC.
"REPRESENTATIVE" shall mean any investment banker, financial
advisor, attorney, accountant, consultant, or other representative of a Person.
"RIGHTS" shall mean all arrangements, calls, commitments,
Contracts, options, rights to subscribe to, scrip, understandings, warrants,
stock appreciation rights or other binding obligations of any character
whatsoever relating to, or securities or rights convertible into or
exchangeable for, shares of the capital stock of a Person or by which a Person
is or may be bound to issue additional shares of its capital stock or other
Rights.
"SEC DOCUMENTS" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents filed, or
required to be filed, by a Party or any of its Subsidiaries with any Regulatory
Authority pursuant to the Securities Laws.
"SECURITIES LAWS" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors Act of
1940, as amended, the Trust Indenture Act of 1939, as amended, and the rules
and regulations of any Regulatory Authority promulgated thereunder.
"SHAREHOLDERS' MEETING" shall mean the meeting of the shareholders
of Citi-Bancshares to be held pursuant to Section 8.1 of this Agreement,
including any adjournment or adjournments thereof.
"SUBSIDIARIES" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns or
controls 50% or more of the outstanding equity securities either directly or
through an unbroken chain of entities as to each of which 50% or more of the
outstanding equity securities is owned directly or indirectly by its parent;
provided, there shall not be included any such entity acquired through
foreclosure or any such entity the equity securities of which are owned or
controlled in a fiduciary capacity.
"SURVIVING CORPORATION" shall mean Huntington-Florida as the
surviving corporation resulting from the Merger.
"TAX" or "TAXES" shall mean any federal, state, county, local, or
foreign income, profits, franchise, gross receipts, payroll, sales, employment,
use, property, withholding, excise, occupancy, and other taxes, assessments,
charges, fares, or impositions, including interest, penalties, and additions
imposed thereon or with respect thereto.
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48
(b) The terms set forth below shall have the meanings
ascribed thereto in the referenced sections:
Aggregate Merger Consideration Section 3.1(d)
Allowance Section 5.9
Average Closing Price Section 3.1(f)
BIF Section 5.4
Cash Consideration Section 3.1(c)
Cash Election Section 3.1(c)
Cash Limitation Section 3.1(c)
Cash Price Section 3.1(c)
Certificate Section 3.1(c)
Citi-Bancshares Contracts Section 5.10
Citi-Bancshares ERISA Plan Section 5.154
Closing Section 1.2
Effective Time Section 1.3
Election Deadline Section 4.1(b)
ERISA Affiliate Section 5.14(c)
Exchange Agent Section 4.1(e)
Exchange Ratio Section 3.1(f)
Indemnified Party Section 8.12(a)
Insurance Section 5.10
Letter of Transmittal and Form of Election Section 4.1(b)
Merger Section 1.1
Mixed Consideration Section 3.1(c)
Mixed Election Shares Section 3.1(c)
Mixed Stock Amount Section 3.1(c)
Non-Election Shares Section 4.1(a)
Pension Plan Section 8.11
Real Property Section 5.10
Stock Consideration Section 3.1(c)
Stock Designees Section 3.1(d)
Stock Election Section 3.1(f)
Tax Opinion Section 9.1(g)
Title Insurance Commitment Section 5.10
(c) Any singular term in this Agreement shall be deemed
to include the plural, and any plural term the singular. Whenever the words
"include," "includes" or "including" are used in this Agreement, they shall be
deemed followed by the words "without limitation."
11.2 EXPENSES. Each of the Parties shall bear and pay all direct
costs and expenses incurred by it or on its behalf in connection with the
transactions contemplated hereunder, including filing, registration and
application fees, printing fees, and fees and expenses of its own financial or
other consultants, investment bankers, accountants, and counsel, except that
each of the Parties shall bear and pay one-half of the filing fees payable in
connection with the
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49
Registration Statement and the Proxy Statement and printing costs incurred in
connection with the printing of the Registration Statement and the Proxy
Statement and Huntington shall pay all expenses of obtaining surveys of Citi-
Bancshares' Real Property.
11.3 BROKERS AND FINDERS. Except for The Xxxxxx Xxxxxx Company
or other investment banker retained by Citi-Bancshares, each of the Parties
represents and warrants that neither it nor any of its officers, directors,
employees, or Affiliates has employed any broker or finder or incurred any
Liability for any financial advisory fees, investment bankers' fees, brokerage
fees, commissions, or finders' fees in connection with this Agreement or the
transactions contemplated hereby. In the event of a claim by any broker or
finder based upon his or its representing or being retained by or allegedly
representing or being retained by Citi-Bancshares or Huntington, each of
Citi-Bancshares and Huntington, as the case may be, agrees to indemnify and
hold the other Party harmless of and from any Liability in respect of any such
claim.
11.4 ENTIRE AGREEMENT. Except for the Confidentiality Agreement
between Citi-Bancshares and Huntington, and as otherwise expressly provided
herein, this Agreement (including the documents and instruments referred to
herein) constitutes the entire agreement between the Parties with respect to
the transactions contemplated hereunder and supersedes all prior arrangements
or understandings with respect thereto, written or oral. Nothing in this
Agreement expressed or implied, is intended to confer upon any Person, other
than the Parties or their respective successors, any rights, remedies,
obligations, or liabilities under or by reason of this Agreement, other than as
provided in Section 8.13 and 8.14 of this Agreement.
11.5 AMENDMENTS. To the extent permitted by Law, this Agreement
may be amended by a subsequent writing signed by each of the Parties upon the
approval of the Boards of Directors of each of the Parties, whether before or
after shareholder approval of this Agreement has been obtained; provided, that
after any such approval by the holders of Citi-Bancshares Common Stock, there
shall be made no amendment that pursuant to Florida Law requires further
approval by such shareholders without the further approval of such
shareholders.
11.6 WAIVERS.
(a) Prior to or at the Effective Time, Huntington, acting
through its Board of Directors, chairman, chief executive officer or other
authorized officer, shall have the right to waive any Default in the
performance of any term of this Agreement by Citi-Bancshares, to waive or
extend the time for the compliance or fulfillment by Citi-Bancshares of any and
all of its obligations under this Agreement, and to waive any or all of the
conditions precedent to the obligations of Huntington under this Agreement,
except any condition which, if not satisfied, would result in the violation of
any Law. No such waiver shall be effective unless in writing signed by a duly
authorized officer of Huntington.
(b) Prior to or at the Effective Time, Citi-Bancshares,
acting through its Board of Directors, chief executive officer or other
authorized officer, shall have the right to waive any Default in the
performance of any term of this Agreement by Huntington, to waive or extend the
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50
time for the compliance or fulfillment by Huntington of any and all of its
obligations under this Agreement, and to waive any or all of the conditions
precedent to the obligations of Citi-Bancshares under this Agreement, except
any condition which, if not satisfied, would result in the violation of any
Law. No such waiver shall be effective unless in writing signed by a duly
authorized officer of Citi-Bancshares.
(c) The failure of any Party at any time or times to
require performance of any provision hereof shall in no manner affect the right
of such Party at a later time to enforce the same or any other provision of
this Agreement. No waiver of any condition or of the breach of any term
contained in this Agreement in one or more instances shall be deemed to be or
construed as a further or continuing waiver of such condition or breach or a
waiver of any other condition or of the breach of any other term of this
Agreement.
11.7 ASSIGNMENT. Except as expressly contemplated hereby,
neither this Agreement nor any of the rights, interests or obligations
hereunder shall be assigned by any Party hereto (whether by operation of Law or
otherwise) without the prior written consent of the other Party. Subject to
the preceding sentence, this Agreement will be binding upon, inure to the
benefit of and be enforceable by the Parties and their respective successors
and assigns.
11.8 NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
by hand, by facsimile transmission, by registered or certified mail, postage
pre- paid, or by courier or overnight carrier, to the persons at the addresses
set forth below (or at such other address as may be provided hereunder), and
shall be deemed to have been delivered as of the date so delivered:
Citi-Bancshares: Citi-Bancshares, Inc.
0000 Xxxxx Xxxxxxxxx Xxxx
Xxxxxxxx, XX 00000-0000
Telecopy Number: (000) 000-0000
Attention: Xxxxxxx X. Xxxxxx
Copy to Counsel: McLin, Burnsed, Morrison, Johnson, Xxxxxx and Ray
000 Xxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxxxxx
Telecopy Number (000) 000-0000
Attention: Xxxxxx X. XxXxx, III, Esq.
Copy to Counsel: Xxxxxx & Bird
One Atlantic Center
0000 X. Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Telecopy Number: (000) 000-0000
Attention: Xxxxx X. XxxXxxxxx, III, Esq.
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51
Huntington: Zuheir Sofia
President
Huntington Bancshares Incorporated
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Telecopy number: (000) 000-0000
Copy to Counsel: Xxxxx X. Xxxxxxx, Esq.
General Counsel and Secretary
Huntington Bancshares Incorporated
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Telecopy number: (000) 000-0000
Copy to Counsel: Xxxxxxx X. Xxxxxxxxx, Esq.
Porter, Wright, Xxxxxx & Xxxxxx
00 Xxxxx Xxxx Xxxxxx
Xxxxxxxx, Xxxx 00000
Telecopy number: (000) 000-0000
11.9 GOVERNING LAW. This Agreement shall be governed by and
construed in accordance with the Laws of the State of Ohio, without regard to
any applicable conflicts of Laws.
11.10 COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.
11.11 CAPTIONS. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.
11.12 INTERPRETATIONS. Neither this Agreement nor any uncertainty
or ambiguity herein shall be construed or resolved against any party, whether
under any rule of construction or otherwise. No party to this Agreement shall
be considered the draftsman. The parties acknowledge and agree that this
Agreement has been reviewed, negotiated and accepted by all parties and their
attorneys and shall be construed and interpreted according to the ordinary
meaning of the words used so as fairly to accomplish the purposes and
intentions of all parties hereto.
11.13 ENFORCEMENT OF AGREEMENT. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be
entitled to an injunction or injunctions to prevent breaches of this Agreement
and to enforce specifically the terms and provisions hereof in any court of the
United States or any
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52
state having jurisdiction, this being in addition to any other remedy to which
they are entitled at law or in equity.
11.14 SEVERABILITY. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.
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53
IN WITNESS WHEREOF, each of the Parties has caused this Agreement
to be executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.
ATTEST: CITI-BANCSHARES, INC.
/s/ T. XXXXXXX XXXXXXXXXXXXX By: /s/ XXXXXXX X. XXXXXX
---------------------------------- -------------------------
Secretary Xxxxxxx X. Xxxxxx
President and Chief
Executive Officer
[CORPORATE SEAL]
ATTEST: HUNTINGTON BANCSHARES
INCORPORATED
/s/ XXXXX X. XXXXXXX By: /s/ XXXXX XXXXX
---------------------------------- -------------------------
Secretary Xxxxx Xxxxx
Chairman
[CORPORATE SEAL]
ATTEST: HUNTINGTON BANCSHARES
FLORIDA, INC.
/s/ XXXX X. XXXXXXXXXXX By: /s/ XXXXX XXXXX
---------------------------------- -------------------------
Secretary Xxxxx Xxxxx
Chairman
[CORPORATE SEAL]
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TABLE OF CONTENTS
CONTENTS PAGE
-------- ----
Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Preamble . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Time and Place of Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Execution of Stock Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2 - TERMS OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
2.4 Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
ARTICLE 3 - MANNER OF CONVERTING SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.1 Conversion of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.2 Anti-Dilution Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.3 Shares Held by Citi-Bancshares or Huntington . . . . . . . . . . . . . . . . . . . . . . . . 5
3.4 Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.5 Dissenting Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 4 - ELECTION; EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.1 Election and Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
4.2 Rights of Former Citi-Bancshares Shareholders . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF CITI-BANCSHARES . . . . . . . . . . . . . . . . . . . . . . 9
5.1 Organization, Standing, and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.2 Authority; No Breach By Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.4 Citi-Bancshares Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.5 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.6 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.7 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.8 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.9 Allowance for Possible Loan Losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.10 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
5.11 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
5.12 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
5.13 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.14 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
5.15 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.16 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
5.17 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
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5.18 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.19 Tax and Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.20 State Takeover Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.21 Charter Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.22 Directors' Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.23 Compliance with Certain Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF HUNTINGTON . . . . . . . . . . . . . . . . . . . . . . . . 20
6.1 Organization, Standing, and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
6.2 Authority; No Breach By Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
6.4 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.5 Rights Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.6 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.7 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
6.8 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.9 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.10 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
6.11 Authority of Huntington-Florida . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
6.12 Tax and Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.1 Affirmative Covenants of Citi-Bancshares . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.2 Negative Covenants of Citi-Bancshares . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
7.3 Covenants of Huntington . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
7.4 Adverse Changes in Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
7.5 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE 8 - ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
8.1 Registration Statement; Proxy Statement; Shareholder Approval . . . . . . . . . . . . . . . . 28
8.2 Nasdaq Listing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.3 Applications; Antitrust Notification . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.4 Reserved . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.5 Agreement as to Efforts to Consummate . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.6 Investigation and Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
8.7 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.8 Certain Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
8.9 Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.10 Agreements with respect to Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.11 Employee Benefits and Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
8.12 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
8.13 Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE . . . . . . . . . . . . . . . . . . . . . . 34
9.1 Conditions to Obligations of Each Party . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.2 Conditions to Obligations of Huntington . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.3 Conditions to Obligations of Citi-Bancshares . . . . . . . . . . . . . . . . . . . . . . . . 37
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ARTICLE 10 - TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
10.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
10.3 Non-Survival of Representations and Covenants . . . . . . . . . . . . . . . . . . . . . . . . 39
ARTICLE 11 - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.3 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
11.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
11.5 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
11.6 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
11.7 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
11.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.10 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.11 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.12 Interpretations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.13 Enforcement of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
11.14 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
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LIST OF EXHIBITS
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
1. Stock Option Agreement. (Section 1.4).
2. Form of Shareholder's Agreement. (Section 5.22).
3. Form of Affiliates' Agreement of Citi-Bancshares. (Section
8.10).
4. Matters as to which Xxxxxx & Bird will opine. (Section
9.2(d)).
5. Matters as to which Porter, Wright, Xxxxxx & Xxxxxx will
opine. (Section 9.3(d)).
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EXHIBIT 1
STOCK OPTION AGREEMENT
