EXHIBIT 99.1
CITIZENS FEDERAL SAVINGS BANK
AGREEMENT AND PLAN OF REORGANIZATION
THIS AGREEMENT AND PLAN OF REORGANIZATION, dated November 20, 1997, by and
among CITIZENS FEDERAL SAVINGS BANK, a federal stock savings bank ("Citizens
Federal"); CFS Bancshares, Inc., a to-be-formed savings and loan holding company
("Holding Company"), and CITIZENS FEDERAL INTERIM SAVINGS BANK, a to-be-formed
interim stock savings bank ("Interim Savings").
The parties hereto desire to enter into an Agreement and Plan of
Reorganization whereby the corporate structure of Citizens Federal will be
reorganized into the holding company form of ownership. The result of such
reorganization will be that, immediately after the Effective Date (as defined in
Article V below), all of the issued and outstanding shares of common stock,
$1.00 par value per share, of Citizens Federal ("Citizens Federal Common Stock")
will be held by Holding Company, and the holders of the issued and outstanding
shares of Citizens Federal Common Stock will become the holders of the issued
and outstanding shares of the common stock, $0.01 par value per share, of
Holding Company ("Holding Company Common Stock").
The reorganization of Citizens Federal will be accomplished by the
following steps: (1) the formation by Citizens Federal of a wholly-owned,
service corporation or operating subsidiary, Holding Company, incorporated under
the laws of either the State of Alabama or the State of Delaware for the primary
purpose of becoming the sole stockholder of a newly formed interim federal stock
savings bank, and subsequently becoming the sole holder of the capital stock of
Citizens Federal, which formation shall include the issuance of up to 100,000
shares of Holding Company Common Stock to Citizens Federal for a price of $1.00
per share or for such other consideration in excess of the aggregate par value
of such 100,000 shares as the Office of Thrift Supervision ("OTS") shall
approve; (2) the formation of an interim federal stock savings association,
Interim Savings, which will be wholly-owned by Holding Company; and (3) the
merger of Interim Savings into Citizens Federal, with Citizens Federal as the
surviving corporation. Pursuant to such merger: (i) all of the issued and
outstanding shares of Citizens Federal Common Stock (other than shares as to
which dissenters' rights of appraisal have been elected and perfected) will
automatically be converted by operation of law on a one-for-one basis into an
equal number of issued and outstanding shares of Holding Company Common Stock;
and (ii) all of the issued and outstanding shares of common stock of Interim
Savings will automatically be converted by operation of law on a one-for-one
basis into an equal number of issued and outstanding shares of Citizens Federal
Common Stock, which will be all of the issued and outstanding capital stock of
Citizens Federal.
NOW, THEREFORE, in order to consummate this Agreement and Plan of
Reorganization, and in consideration of the mutual covenants herein set forth,
the parties agree as follows:
ARTICLE I
MERGER OF INTERIM SAVINGS INTO
ILLINOIS GUARANTEE AND RELATED MATTERS
--------------------------------------
1.1 The Merger. On the Effective Date, Interim Savings will be merged
with and into Citizens Federal (the "Merger") and the separate existence of
Interim Savings shall cease, and all assets and property (real, personal and
mixed, tangible and intangible, chooses in action, rights and credits) then
owned by Interim Savings, or which would inure to it, shall immediately and
automatically, by operation of law and without any conveyance, transfer, or
further action, become the property of Citizens Federal. Citizens Federal shall
be deemed to be a continuation of Interim Savings, and Citizens Federal shall
succeed to the rights and obligations of Interim Savings.
1.2 Continued Existence of Citizens Federal. Following the Merger, the
existence of Citizens Federal shall continue unaffected and unimpaired by the
Merger, with all the rights, privileges, immunities and powers, and subject to
all the duties and liabilities, of a corporation organized under the laws of the
United States with a Federal Stock Charter and Bylaws in the form approved by
the OTS. The Federal Charter and Bylaws of Citizens Federal,
1
as presently in effect, shall continue in full force and effect and shall not be
changed in any manner whatsoever by the Merger.
1.3 Continued Business of Citizens Federal. From and after the Effective
Date, and subject to the actions of the Board of Directors of Citizens Federal,
the business presently conducted by Citizens Federal (whether directly or
through its subsidiary) will continue to be conducted by it, as a wholly-owned
subsidiary of Holding Company and the present directors and officers of Citizens
Federal will continue in their present positions. The number of directors shall
be 7. The offices of Citizens Federal in existence immediately prior to the
Effective Date shall continue to be the offices of Citizens Federal from and
after the Effective Date.
1.4 Savings Accounts. The issuance of savings accounts and other
instruments and obligations by Citizens Federal shall not be affected by the
Merger.
1.5 Liquidation Account. The liquidation account for the benefit of
Citizens Federal's savings account holders, created in connection with the
conversion of Citizens Federal from mutual to stock form, shall not be affected
by the Merger.
1.6 Further Assurances. Citizens Federal and Interim Savings each agree
that at any time, or from time to time, as and when requested by Citizens
Federal or by its successors or assigns, Interim Savings will execute and
deliver, or cause to be executed and delivered, in its name by its last acting
officers or by the corresponding officers of Citizens Federal (Interim Savings
hereby authorizing such officer so to act in its name), all such conveyances,
assignments, transfers, deeds and other instruments, and will take or cause to
be taken such further or other action as Citizens Federal or its successors or
assigns may deem necessary or desirable in order to carry out the vesting,
perfecting, confirming, assignment, devolution or other transfer of the
interests, property, privileges, powers, immunities, franchises and other rights
referred to in this Article I, or otherwise to carry out the intents and
purposes of this Agreement.
ARTICLE II
CONVERSION OF STOCK
-------------------
2.1 Conversion of Stock. The terms and conditions of the Merger, the mode
of carrying the same into effect, and the manner and basis of converting the
respective shares of common stock of the parties to this Agreement shall be as
follows:
2.1.1 Holding Company Common Stock. On the Effective Date, all shares of
Holding Company Common Stock held by Citizens Federal immediately prior to the
Effective Date shall be canceled and shall no longer be deemed outstanding for
any purposes.
2.1.2 Citizens Federal Common Stock. On the Effective Date, each share of
Citizens Federal Common Stock issued and outstanding immediately prior to the
Effective Date (other than shares as to which the holders thereof have properly
exercised dissenters' rights of appraisal under Section 552.14 of the
Regulations for Federal Savings Associations (the "Appraisal Regulation") shall
automatically by operation of law and without any action on the part of the
holder thereof be converted into and shall become one share of Holding Company
Common Stock. On the Effective Date, each share of Citizens Federal Common
Stock issued and outstanding as to which the dissenters' rights of appraisal
shall have been elected and perfected shall not be converted into shares of
Holding Company Common Stock but shall thereafter represent only the right to
receive the fair or appraised value of such shares in accordance with the
Appraisal Regulation. If any such holder shall have failed to perfect or shall
have effectively withdrawn or otherwise lost such appraisal rights, such shares
of Citizens Federal Common Stock shall thereupon be deemed to have been
converted into and to have become shares of Holding Company Common Stock as to
the Effective Date.
2.1.3 Interim Savings Common Stock. Each share of common stock of Interim
Savings issued and outstanding immediately prior to the Effective Date shall, on
the Effective Date, automatically by operation of law and without any action on
the part of the holder thereof be converted into and shall become one share of
Citizens Federal Common Stock and shall not be further converted into shares of
Holding Company Common Stock, so that from and
2
after the Effective Date, all of the issued and outstanding shares of Citizens
Federal Common Stock shall be held by Holding Company.
2.1.4 Exchange of Citizens Federal Common Stock. From and after the
Effective Date, each holder of an outstanding certificate or certificates which,
prior thereto, represented shares of Citizens Federal Common Stock, shall, upon
surrender of the same to the designated agent of Citizens Federal ("Exchange
Agent"), be entitled to receive, in exchange therefore, a certificate or
certificates representing the number of whole shares of Holding Company Common
Stock into which the shares theretofore represented by the certificate or
certificates so surrendered shall have been converted, as provided in the
foregoing provisions of this Article II. Until so surrendered, each such
outstanding certificate which, prior to the Effective Date, represented shares
of Citizens Federal Common Stock shall be deemed for all corporate purposes to
evidence the ownership of the number of whole shares of Holding Company Common
Stock (other than shares as to which the holders thereof have properly exercised
dissenter's rights of appraisal shall have been elected and perfected) into
which such shares of Citizens Federal Common Stock shall have been so converted.
2.1.5 Full Satisfaction. All shares of Holding Company Common Stock into
which shares of Citizens Federal Common Stock shall have been converted pursuant
to this Article II shall be deemed to have been issued in full satisfaction of
all rights pertaining to such converted shares.
2.1.6 Sole Rights, Etc. On the Effective Date, the holders of
certificates formerly representing Citizens Federal Common Stock outstanding on
the Effective Date shall cease to have any rights with respect to the Citizens
Federal Common Stock, and their sole rights shall be with respect to the Holding
Company Common Stock into which their shares of Citizens Federal Common Stock
shall have been converted by the Merger or, in the case of shares as to which
the holders thereof have properly exercised dissenters' rights of appraisal, the
right to receive the fair or appraised value of such shares in accordance with
the Appraisal Regulation.
2.2. Continued Effectiveness of All Stock Option and Stock-Based Plans. On
the Effective Date, all Citizens Federal stock option and incentive plans (the
"Option Plans"), and other stock-based compensation plans (the "Stock Plans"),
if any, shall automatically, by operation of law, be continued as and become the
stock option plans and the stock-based compensation plans of Holding Company.
On the Effective Date, each unexercised option to purchase shares of Citizens
Federal Common Stock under the Option Plans outstanding at that time will be
automatically converted into an unexercised option, with identical price, terms
and conditions, to purchase an identical number of shares of Holding Company
Common Stock in lieu of shares of Citizens Federal Common Stock, shares of
Citizens Federal Common Stock in the Stock Plans shall represent an equal number
of shares of Holding Company Common Stock, and Holding Company shall assume all
of Citizens Federal's obligations with respect to the Option Plans and the Stock
Plans. By approving this Agreement, stockholders of Citizens Federal will be
approving the adoption by Holding Company of the Option Plans as the stock
option plans of Holding Company and the Stock Plans, as the stock-based
compensation plans of the Holding Company.
3
ARTICLE III
CONDITIONS TO THE OBLIGATIONS
OF CITIZENS FEDERAL,
HOLDING COMPANY AND INTERIM SAVINGS
-----------------------------------
3.1 Conditions. The obligations of Citizens Federal, Holding Company and
Interim Savings to effect the Merger and otherwise consummate the transactions
which are the subject matter hereof shall be subject to satisfaction of the
following conditions:
3.1.1 Stockholder Approvals. To the extent required by applicable law,
rules, and regulations, the holders of the outstanding shares of Citizens
Federal Common Stock shall, at a meeting of the stockholders of Citizens Federal
duly called, have approved this Agreement by the affirmative vote of fifty
percent of the outstanding shares of Citizens Federal Common Stock plus one
affirmative vote.
3.1.2 Registration. The shares of Holding Company Common Stock to be
issued to holders of Citizens Federal Common Stock pursuant to the Merger shall,
to the extent required under applicable law, have been duly registered pursuant
to Section 5 of the Securities Act of 1933, as amended, or qualify for exemption
from such registration, and Holding Company shall have complied with all
applicable state securities or "blue sky" laws relating to the issuance of the
Holding Company Common Stock.
3.1.3 Approvals, Consents. Any and all approvals from the OTS, the
Federal Deposit Insurance Corporation, the Securities and Exchange Commission
and any other governmental agency having jurisdiction necessary for the lawful
consummation of the Merger and the issuance and delivery of Holding Company
Common Stock as contemplated by this Agreement shall have been obtained.
Furthermore, any approvals from the OTS necessary, to the extent required by the
Federal Stock Charter or otherwise, to effect the amendment of the Federal Stock
Charter specified in this Article III shall have been obtained.
3.1.4 Tax Status. Citizens Federal shall have received either (i) a
ruling from the Internal Revenue Service or (ii) an opinion from its legal
counsel or independent auditors, to the effect that the Merger will be treated
as a non-taxable transaction under applicable provisions of the Internal Revenue
Code of 1986, as amended and that no gain or loss will be recognized by the
holders of Citizens Federal Common Stock upon the exchange of Citizens Federal
Common Stock held by them solely for Holding Company Common Stock.
3.1.5 Dissenter and Appraisal Rights. The holders of not more than ten
percent (10%) of the outstanding shares of Citizens Federal Common Stock shall
have elected to exercise dissenting shareholder rights under the Appraisal
Regulation unless waived by the parties hereto, to the extent such rights are
available.
ARTICLE IV
TERMINATION; EXPENSES
---------------------
4.1 Termination. This Agreement may be terminated at any time prior to
the Effective Date, at the election of any of the parties hereto if any one or
more of the conditions to the obligations of any of them hereunder shall not
have been satisfied and shall have become incapable of fulfillment and shall not
be waived. This Agreement may also be terminated at any time prior to the
Effective Date by the mutual consent of the respective Boards of Directors of
the parties.
4.2 No Further Obligation. In the event of the termination of this
Agreement pursuant to this Article IV, this Agreement shall be void and of no
further force or effect, and there shall be no further liability or obligation
of any nature by reason of this Agreement or the termination hereof on the part
of any of the parties hereto or their respective directors, officers, employees,
agents or stockholders.
4
4.3 Costs and Expenses. Citizens Federal shall pay all costs and expenses
incurred by it, Holding Company and Interim Savings in connection with this
Agreement and the transactions contemplated hereunder.
ARTICLE V
EFFECTIVE DATE OF MERGER
------------------------
Upon satisfaction or waiver (in accordance with the provisions of this
Agreement) of each of the conditions set forth in Article III, the parties
hereto shall execute and cause to be filed Articles of Combination, and such
certificates or further documents as shall be required by the OTS, with the
Secretary of the OTS and shall cause to be filed with such other federal or
state regulatory agencies all such certificates and other documents as may be
required in the opinion of counsel to Citizens Federal and Holding Company.
Upon approval by the OTS and endorsement of such Articles of Combination by the
Secretary of the OTS, the Merger and other transactions contemplated by this
Agreement shall become effective. The Effective Date for all purposes hereunder
shall be the date of such endorsement by the Secretary of the OTS.
ARTICLE VI
MISCELLANEOUS
-------------
6.1 Waiver. Any of the terms or conditions of this Agreement which may
legally be waived may be waived at any time by any party hereto which is
entitled to the benefit thereof, or any of such terms or conditions may be
amended or modified in whole or in part at any time, to the extent authorized by
applicable law, by an agreement in writing, executed in the same manner as this
Agreement.
6.2 Amendment. Any of the terms or conditions of this Agreement may be
amended or modified in whole or in part at any time, to the extent permitted by
applicable law, rules, and regulations, by an amendment in writing, provided
that any such amendment or modification is not materially adverse to Citizens
Federal, Holding Company or their stockholders. In the event that any
governmental agency requests or requires that the transactions contemplated
herein be modified in any respect as a condition of providing a necessary
regulatory approval or favorable ruling, or that in the opinion of counsel to
Citizens Federal such modification is necessary to obtain such approval or
ruling, this Agreement may be modified, at any time before or after adoption
thereof by the stockholders of Citizens Federal, by an instrument in writing,
provided that the effect of such amendment would not be materially adverse to
Citizens Federal, Holding Company or their stockholders.
6.3 Counterparts. This Agreement may be executed by the parties hereto in
any number of separate counterparts, each of which shall be an original, but
such counterparts together shall constitute but one and the same instrument.
6.4 Headings. The section and other headings contained in this Agreement
are for reference purposes only and shall not be deemed to be part of this
Agreement.
6.5 Execution by Interim Savings. Citizens Federal and Holding Company
acknowledge that, as of the date hereof, the charter of Interim Savings has not
been issued by the OTS and therefore Interim Savings does not have the legal
capacity to execute this Agreement. Holding Company, as the organizer and sole
shareholder of Interim Savings, agrees to cause Interim Savings to execute this
Agreement promptly following the issuance of Interim Savings's charter by the
OTS. Citizens Federal and Holding Company agree to be bound by this Agreement
prior to and following such execution by Interim Savings.
6.6 Offices. A list of the locations of the offices of Citizens Federal
is attached hereto as Schedule A and is incorporated herein by reference.
5
6.7 Directors. A list of the directors of Citizens Federal, their
residence addresses, and terms of office is attached hereto as Schedule B and is
incorporated herein by reference.
6.8 Governing Law. This Agreement shall be governed by and construed
under the laws of the State of Alabama, except insofar as the federal law of the
United States is deemed to preempt such law or otherwise apply.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
and Plan of Reorganization as of the date first above written.
CITIZENS FEDERAL SAVINGS BANK
By: /s/Xxxxx Xxxxxx, Xx.
-----------------------------------
Xxxxx Xxxxxx, Xx.
President
CITIZENS FEDERAL INTERIM SAVINGS BANK
(in formation)
By: /s/Xxxxx Xxxxxx, Xx.
----------------------------------
Xxxxx Xxxxxx, Xx.
President
CFS Bancshares, Inc.
By: /s/Xxxxx Xxxxxx, Xx.
-----------------------------------
Xxxxx Xxxxxx, Xx.
President
6
SCHEDULE A
OFFICES OF CITIZENS FEDERAL
Main Office: Citizens Federal Savings Bank
0000 0xx Xxxxxx Xxxxx
Xxxxxxxxxx, Xxxxxxx 00000
Telephone: (000) 000-0000
Branch Offices: Five Points West Branch
0000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxx 00000
(000) 000-0000
Eutaw Branch
000 Xxxx Xxxxxx
Xxxxx, Xxxxxxx 00000
(000) 000-0000
7
SCHEDULE B
Directors Of Citizens Federal
Name Business Address
---- ----------------
Xxxxx Xxxxxx, Xx. 0000 0xx Xxxxxx Xxxxx, Xxxxxxxxxx, XX 00000
Xxxxxxx X. Lett 0000 0xx Xxxxxx Xxxxx, Xxxxxxxxxx, XX 00000
Xxxxxx Xxxxxxxx 0000 0xx Xxxxxx Xxxxx, Xxxxxxxxxx, XX 00000
X.X. Xxxxxxx 0000 0xx Xxxxxx Xxxxx, Xxxxxxxxxx, XX 00000
Xxxxxxxx Xxxxxx 0000 0xx Xxxxxx Xxxxx, Xxxxxxxxxx, XX 00000
Xxxxx X. Xxxxxxx 0000 0xx Xxxxxx Xxxxx, Xxxxxxxxxx, XX 00000
Xxxx X. Xxxxxx 0000 0xx Xxxxxx Xxxxx, Xxxxxxxxxx, XX 00000
8
