AGREEMENT AND PLAN OF MERGER
BY AND BETWEEN
TWIN CITY BANCORP, INC.,
TWIN CITY FEDERAL SAVINGS BANK,
CITCO COMMUNITY BANCSHARES, INC.,
AND
CITIZENS BANK
DATED AS OF JULY 18, 2000
TABLE OF CONTENTS
Page
----
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 Support Agreements . . 2
1.5 Right to Revise Transaction . . . . 2
ARTICLE 2
EFFECT OF MERGER . . . . . . . . . . . . 2
2.1 Charters. . . . . . . . . . . . . . 2
2.2 Bylaws. . . . . . . . . . . . . . . 3
2.3 Directors and Officers. . . . . . . 3
ARTICLE 3
MANNER OF CONVERTING SHARES AND OPTIONS. 3
3.1 Conversion of Shares and Options. . 3
3.2 Anti-Dilution Provisions. . . . . . 4
3.3 Shares Held by TCB or Citco . . . . 4
3.4 Dissenting Shareholders . . . . . . 4
ARTICLE 4
EXCHANGE OF SHARES . . . . . . . . . . . 4
4.1 Exchange Procedures . . . . . . . . 4
4.2 Rights of Former TCB Shareholders . 5
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF TCB. . 5
5.1 Organization, Standing, and Power . 5
5.2 Authority; No Breach By Agreement . 6
5.3 Capital Stock . . . . . . . . . . . 7
5.4 TCB Subsidiaries. . . . . . . . . . 7
5.5 Financial Statements. . . . . . . . 8
5.6 Absence of Undisclosed Liabilities. 8
5.7 Absence of Certain Changes
or Events . . . . . . . . . . . . 8
5.8 Tax Matters . . . . . . . . . . . . 9
5.9 Assets. . . . . . . . . . . . . . .10
5.10 Environmental Matters . . . . . . .11
5.11 Compliance with Laws. . . . . . . .12
i
5.12 Labor Relations . . . . . . . . . .12
5.13 Employee Benefit Plans. . . . . . .13
5.14 Material Contracts. . . . . . . . .15
5.15 Legal Proceedings . . . . . . . . .16
5.16 Reports . . . . . . . . . . . . . .16
5.17 Statements True and Correct . . . .16
5.18 Regulatory Matters. . . . . . . . .16
5.19 State Takeover Laws . . . . . . . .17
5.20 Charter Provisions. . . . . . . . .17
5.21 Support Agreements. . . . . . . . .17
5.22 Derivatives . . . . . . . . . . . .17
5.23 Year 2000 . . . . . . . . . . . . .17
5.24 Stock Records . . . . . . . . . . .17
5.25 Certain Interests . . . . . . . . .18
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF CITCO
AND CITIZENS BANK. . . . . . . . . . . .18
6.1 Organization, Standing, and Power .18
6.2 Authority; No Breach By Agreement .18
6.3 Citco Subsidiaries. . . . . . . . .19
6.4 Compliance with Laws. . . . . . . .19
6.5 Statements True and Correct . . . .20
6.6 Regulatory Matters. . . . . . . . .20
ARTICLE 7
CONDUCT OF BUSINESS PENDING
CONSUMMATION . . . . . . . . . . . . .21
7.1 Affirmative Covenants of
Both Parties . . . . . . . . . . .21
7.2 Negative Covenants of TCB and TCF .21
7.3 Adverse Changes in Condition. . . .23
7.4 Reports . . . . . . . . . . . . . .23
ARTICLE 8
ADDITIONAL AGREEMENTS. . . . . . . . . .24
8.1 Proxy Statement; Shareholder
Approval. . . . . . . . . . . . .24
8.2 Applications. . . . . . . . . . . .24
8.3 Filings with State Offices. . . . .24
8.4 Agreement as to Efforts to
Consummate. . . . . . . . . . . .25
8.5 Investigation and Confidentiality .25
8.6 State Takeover Laws . . . . . . . .26
8.7 Press Releases. . . . . . . . . . .26
8.8 Charter Provisions. . . . . . . . .26
8.9 Employee Benefits and Contracts . .26
ii
8.10 Indemnification and Insurance . . .27
8.11 Certain Modifications . . . . . . .28
8.12 Termination of Plans. . . . . . . .29
8.13 ESOP. . . . . . . . . . . . . . . .29
8.14 Sole Agreement to Merge or Sell . .30
ARTICLE 9
CONDITIONS PRECEDENT TO OBLIGATIONS TO
CONSUMMATE . . . . . . . . . . . . . . .30
9.1 Conditions to Obligations of
Each Party. . . . . . . . . . . .30
9.2 Conditions to Obligations of
Citco and Citizens Bank . . . . .31
9.3 Conditions to Obligations of TCB
and TCF . . . . . . . . . . . . .32
ARTICLE 10
TERMINATION. . . . . . . . . . . . . . .33
10.1 Termination . . . . . . . . . . . .33
10.2 Effect of Termination . . . . . . .34
10.3 Non-Survival of Representations
and Covenants . . . . . . . . . .35
ARTICLE 11
MISCELLANEOUS. . . . . . . . . . . . . .35
11.1 Definitions . . . . . . . . . . . .35
11.2 Expenses. . . . . . . . . . . . . .41
11.3 Brokers and Finders . . . . . . . .42
11.4 Entire Agreement. . . . . . . . . .42
11.5 Amendments. . . . . . . . . . . . .42
11.6 Waivers . . . . . . . . . . . . . .42
11.7 Assignment. . . . . . . . . . . . .43
11.8 Notices . . . . . . . . . . . . . .43
11.9 Governing Law . . . . . . . . . . .44
11.10 Counterparts . . . . . . . . . .44
11.11 Captions . . . . . . . . . . . .44
11.12 Interpretations. . . . . . . . .44
11.13 Enforcement of Agreement . . . .44
11.14 Severability . . . . . . . . . .44
Signatures . . . . . . . . . . . . . . . . . . . . .48
iii
AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is
made and entered into as of July 18, 2000, by and between TWIN
CITY BANCORP, INC. ("TCB "), a corporation organized and
existing under the Laws of the State of Tennessee, with its
principal office located in Bristol, Tennessee; TWIN CITY
FEDERAL SAVINGS BANK ("TCF"), a federal savings bank organized
and existing under the Laws of the United States, with its
principal office located in Bristol, Tennessee; CITCO COMMUNITY
BANCSHARES, INC. ("Citco"), a corporation organized and existing
under the Laws of the State of Tennessee, with its principal
office located in Elizabethton, Tennessee; and CITIZENS BANK, a
corporation organized and existing under the Laws of the State
of Tennessee with its principal office located in Elizabethton,
Tennessee.
PREAMBLE
--------
The Boards of Directors of TCB, TCF, Citco, and Citizens
Bank are of the opinion that the transactions described herein
are in the best interests of the parties to this Agreement and
their respective shareholders. This Agreement provides first
for the acquisition of TCB by Citco pursuant to the merger of
TCB with and into Citco. Immediately thereafter, TCF shall be
merged with and into Citizens Bank. Both mergers are
collectively referred to herein as the "Merger." At the
effective time of the Merger, the outstanding shares of and
options to purchase the capital stock of TCB shall be converted
into the right to receive the cash purchase price described
below. The transactions described in this Agreement are subject
to the approvals of the shareholders of TCB, TCF, and Citizens
Bank; certain federal and state regulatory authorities; and the
satisfaction of certain other conditions described in this
Agreement. It is the intent of Citco to maintain the good will
established by TCB by involving the directors of TCB and TCF in
the operations of the surviving corporations.
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. Subject to the terms and conditions of this
------
Agreement, at the Effective Time, TCB shall be merged with and
into Citco in accordance with the provisions of
Section 00-00-000 of the TBCA. Citco shall be the Surviving
Corporation resulting from this merger and shall continue to be
governed by the Laws of the State of Tennessee. After the
merger of TCB into Citco, and at such time as Citco deems
appropriate, TCF shall be merged with and into Citizens Bank,
with Citizens Bank being the Surviving Corporation from this
merger and continuing to be governed by
1
the Laws of the State of Tennessee. The Merger shall be
consummated pursuant to the terms of this Agreement, which has
been approved and adopted by the respective Boards of Directors
of TCB, TCF, Citco, and Citizens Bank.
1.2 Time and Place of Closing. The consummation of the
-------------------------
Merger (the "Closing") shall take place at 9:00 A.M. eastern
time 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 duly authorized officers, may mutually agree. The place
of Closing shall be at such location as may be mutually agreed
upon by the Parties.
1.3 Effective Time. The Merger and the other
--------------
transactions contemplated by this Agreement shall become
effective on the date and at the time the Tennessee Articles of
Merger reflecting the Merger shall become effective with the
Secretary of State of the State of Tennessee (the "Effective
Time"). Subject to the terms and conditions hereof, unless
otherwise mutually agreed upon by the duly authorized officers
of each Party, the Parties shall use their reasonable efforts to
cause the Effective Time to occur on the last business day of
the month in which the last of the following occurs: (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 TCB and TCF approve
the matters relating to this Agreement required to be approved
by such shareholders by applicable Law; or such later day within
30 days thereof as may be mutually agreed upon by the Parties.
1.4 Execution of Support Agreements. Immediately prior
-------------------------------
to the execution of this Agreement and as a condition hereto,
each of the directors of TCB and TCF is executing and delivering
to Citco a Support Agreement in substantially the form of
Exhibit 1. In addition, Xxxxxx X. Xxxxxx is executing and
delivering a similar Support Agreement with the noncompete
provisions limited to financial institutions in operation three
(3) years or less.
1.5 Right to Revise Transaction. Citco, with the
---------------------------
concurrence of TCB, may at any time change the method of
effecting the acquisition of TCB and TCF (including without
limitation the provisions of this Article 1) if and to the
extent it deems such change to be desirable; provided, however,
that no such change shall (i) alter the type of consideration to
be issued to the holders of TCB Common Stock, or options to
purchase such shares, as provided for in this Agreement, (ii)
reduce the value of such consideration, (iii) Materially impair
the ability to receive the regulatory approvals, or (iv)
Materially delay the Closing.
ARTICLE 2
EFFECT OF MERGER
----------------
2.1 Charters. The Charter of Citco and Citizens Bank,
--------
respectively, in effect immediately prior to the Effective Time
shall be the Charter of each Surviving Corporation after the
Effective Time until otherwise amended or repealed.
2
2.2 Bylaws. The Bylaws of Citco and Citizens Bank,
------
respectively, in effect immediately prior to the Effective Time
shall be the Bylaws of each Surviving Corporation after the
Effective Time until otherwise amended or repealed.
2.3 Directors and Officers. The directors of Citco and
----------------------
Citizens Bank, respectively, in office immediately prior to the
Effective Time, together with such additional persons as may
thereafter be elected, shall serve as the directors of each
Surviving Corporation from and after the Effective Time in
accordance with the Bylaws of the Surviving Corporation. The
officers of Citco and Citizens Bank, respectively, in office
immediately prior to the Effective Time, together with such
additional persons as may thereafter be elected, shall serve as
the officers of each Surviving Corporation from and after the
Effective Time in accordance with the Bylaws of each Surviving
Corporation.
ARTICLE 3
MANNER OF CONVERTING SHARES AND OPTIONS
---------------------------------------
3.1 Conversion of Shares and Options. 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 Citco,
Citizens Bank, TCB, or TCF, or the shareholders of any of the
foregoing, the shares of the constituent corporations shall be
converted as follows:
(a) Each share of Citizens Bank Common Stock and
Citco Common Stock and issued and outstanding immediately prior
to the Effective Time shall remain issued and outstanding from
and after the Effective Time.
(b) Each share of TCB Common Stock (excluding
shares held by any TCB Company or any Citco 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 be converted into $17.15 cash payable by check as
soon after the Effective Time as is feasible.
(c) Each option to purchase shares of TCB Common
Stock (excluding options held by any TCB Company or any Citco
Company, and in each case other than in a fiduciary capacity or
as a result of debts previously contracted) which has not been
exercised at the Effective Time shall be converted into $17.15
cash less the applicable exercise price per option and shall be
payable by check as soon after the Effective Date as is feasible
(the purchase price per share of TCB Common Stock identified in
Sections 3.1(b) and 3.1(c), subject to any adjustments otherwise
required by Section 8.12 in this Agreement, are herein after
referred to collectively as the "Exchange Price").
(d) Each share of TCF Common Stock shall be
canceled and retired at the Effective Time and no consideration
shall be issued in exchange therefor.
3
3.2 Anti-Dilution Provisions. In the event TCB changes
------------------------
the number of shares, or options to purchase shares, of TCB
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, the Exchange Price
shall be proportionately adjusted provided that no adjustment
shall be made as the result of an increase in the number of
outstanding shares as the result of the exercise of an option to
purchase TCB Common Stock which option was outstanding on the
date hereof.
3.3 Shares Held by TCB or Citco. Each of the shares, or
---------------------------
options to purchase shares, of TCB Common Stock held by any TCB
Company or by any Citco 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 Dissenting Shareholders. Any holder of shares of
-----------------------
TCB Common Stock who perfects such holder's dissenters' rights
of appraisal in accordance with and as contemplated by
Section 00-00-000 et seq. of the TBCA 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 TBCA. In the event that a dissenting
shareholder of TCB fails to perfect, or effectively withdraws or
loses, his right to appraisal and of payment for his shares
under these provisions, as of the Effective Time, the shares of
TCB Common Stock held by such Person shall be exchanged as
determined under Section 3.1 of this Agreement, and the delivery
of the Exchange Price to which such holder may be entitled shall
be governed by Section 4.1 of this Agreement.
ARTICLE 4
EXCHANGE OF SHARES
------------------
4.1 Exchange Procedures. Immediately prior to the
-------------------
Effective Time, Citco shall deposit with the exchange agent (the
"Exchange Agent") for the benefit of holders of shares of TCB
Common Stock and holders of options to purchase TCB Common
Stock, sufficient cash to satisfy its obligations under Section
3.1 of this Agreement. Within five days after the Effective
Time, Citco and TCB shall cause the Exchange Agent to mail to
the former shareholders and option holders of TCB appropriate
transmittal materials (which shall specify that delivery shall
be effected, and risk of loss and title to the certificates
theretofore representing shares, or options to purchase shares,
of TCB Common Stock shall pass, only upon proper delivery of
such certificates to the Exchange Agent). After the Effective
Time, each holder of shares, or options to purchase shares, of
TCB Common Stock (other than shares to be canceled pursuant to
Section 3.3 of this Agreement or as to which dissenters' rights
of appraisal have been perfected and not withdrawn or forfeited
under Section 3.4 of this Agreement) issued and outstanding at
the Effective Time promptly upon surrender the certificate or
certificates representing such shares, or options to purchase
shares, to the Exchange Agent, shall receive in exchange
therefor the consideration provided in Section 3.1 of this
Agreement, together with all undelivered dividends and other
distributions in respect of such shares
4
(without interest thereon) pursuant to Section 4.2 of this
Agreement. Until so surrendered, each outstanding certificate
of TCB Common Stock, or options to purchase shares, shall be
deemed for all purposes, to represent the consideration into
which the number of shares, or options to purchase shares, of
TCB Common Stock represented thereby prior to the Effective Time
shall have been converted without interest. Citco shall not be
obligated to deliver the consideration to which any former
holder of TCB Common Stock is entitled as a result of the Merger
until such holder surrenders such holder's certificate or
certificates representing the shares, or options to purchase
shares, of TCB Common Stock for exchange as provided in this
Section 4.1. The certificate or certificates of TCB Common
Stock, or options to purchase shares, so surrendered shall be
duly endorsed as the Exchange Agent may require. Any other
provision of this Agreement notwithstanding, neither the
Surviving Corporation, TCB, nor the Exchange Agent shall be
liable to a holder of TCB Common Stock, or options to purchase
shares, for any amounts paid or property delivered in good faith
to a public official pursuant to any applicable abandoned
property Law.
4.2 Rights of Former TCB Shareholders. At the Effective
---------------------------------
Time, the stock transfer books of TCB shall be closed as to
holders of TCB Common Stock immediately prior to the Effective
Time and no transfer of TCB 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, or options to purchase shares, of TCB Common Stock
(other than shares to be canceled pursuant to Section 3.3 of
this Agreement or as to which dissenters' rights of appraisal
have been perfected and not withdrawn or forfeited under Section
3.4 of this Agreement) shall from and after the Effective Time
represent for all purposes only the right to receive the
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 TCB in respect of such
shares of TCB Common Stock in accordance with the terms of this
Agreement and which remain unpaid at the Effective Time.
ARTICLE 5
REPRESENTATIONS AND WARRANTIES OF TCB
-------------------------------------
TCB and TCF hereby represent and warrant to Citco and
Citizens Bank as follows:
5.1 Organization, Standing, and Power. TCB is a
---------------------------------
corporation duly organized, validly existing, and in good
standing under the Laws of the State of Tennessee, and has the
corporate power and authority to carry on its business as now
conducted and to own, lease, and operate its Assets. TCB 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 TCB or as disclosed in Section 5.2 of the TCB
Disclosure Memorandum.
5
5.2 Authority; No Breach By Agreement.
---------------------------------
(a) TCB and TCF have the corporate power and
authority necessary to execute, deliver, and perform their
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 TCB and TCF, subject to
the approval of this Agreement by the holders of a majority of
the shares of TCB Common Stock present at the Shareholders
Meeting and approval by TCB as the sole shareholder of TCF,
which are the only shareholder votes required for approval of
this Agreement and consummation of the Merger by TCB and TCF.
Subject to such requisite shareholder approval and Consents of
applicable Regulatory Authorities, this Agreement represents a
legal, valid, and binding obligation of TCB and TCF, enforceable
against TCB and TCF in accordance with its terms (except in all
cases as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, receivership,
conservatorship, 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 and except to the
extent that indemnification and contribution may be contrary to
public policy).
(b) Except as disclosed in Section 5.2(b) of the
TCB Disclosure Memorandum, neither the execution and delivery of
this Agreement by TCB and TCF, nor the consummation by TCB and
TCF of the transactions contemplated hereby, nor compliance by
TCB and TCF with any of the provisions hereof, will (i) conflict
with or result in a breach of any provision of TCB's or TCF's
Charter 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 TCB Company under, any
Contract or Permit of any TCB 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 TCB or TCF, or (iii) subject to receipt of the
requisite Consents referred to in Section 9.1(b) of this
Agreement, violate any Law or Order applicable to any TCB
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, banking, 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 or both 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
the TCB Companies, no notice to, filing with, or Consent of, any
public body or authority is necessary for the consummation by
TCB or TCF of the Merger and the other transactions contemplated
in this Agreement.
6
5.3 Capital Stock.
-------------
(a) The authorized capital stock of TCB consists,
as of the date of this Agreement, of 8,000,000 shares of TCB
Common Stock, of which 1,121,388 shares are issued and
outstanding as of the date of this Agreement and (excluding
125,632 shares which may be issued pursuant to currently
outstanding options to acquire TCB Common Stock as disclosed in
Section 5.3(a) of the TCB Disclosure Memorandum listing each
option holder, number of options granted, strike price, and
grant date) not more than 1,121,388 shares will be issued and
outstanding at the Effective Time, and 2,000,000 shares of TCB
Serial Preferred Stock, $1.00 par value per share, none of which
is or will be issued or outstanding. All of the issued and
outstanding shares of TCB Common Stock are duly and validly
issued and outstanding and are fully paid and nonassessable
under the TBCA. None of the outstanding shares of TCB Common
Stock has been issued in violation of any preemptive rights of
the current or past shareholders of TCB.
(b) Except as set forth in Section 5.3(a) of this
Agreement or Section 5.3(b) of the TCB Disclosure Memorandum,
there are no shares of capital stock or other equity securities
of TCB outstanding and no outstanding Rights relating to the
capital stock of TCB.
5.4 TCB Subsidiaries. TCB has disclosed in Section 5.4
----------------
of the TCB Disclosure Memorandum all of the TCB Subsidiaries as
of the date of this Agreement. TCB or one of its Subsidiaries
owns all of the issued and outstanding shares of capital stock
of each TCB Subsidiary. No equity securities of any TCB
Subsidiary are or may become required to be issued (other than
to another TCB Company) by reason of any Rights, and there are
no Contracts by which any TCB Subsidiary is bound to issue
(other than to another TCB Company) additional shares of its
capital stock or Rights or by which any TCB Company is or may be
bound to transfer any shares of the capital stock of any TCB
Subsidiary (other than to another TCB Company). There are no
Contracts relating to the rights of any TCB Company to vote or
to dispose of any shares of the capital stock of any TCB
Subsidiary. All of the shares of capital stock of each TCB
Subsidiary held by a TCB Company are fully paid and,
nonassessable under the applicable corporation or banking Law of
the jurisdiction in which such Subsidiary is incorporated or
organized and are owned by the TCB Company free and clear of any
Lien. Each TCB Subsidiary is either a federal savings bank or a
corporation, and 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 TCB 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
TCB. Each TCB Subsidiary that is a depository institution is an
"insured depository institution" as defined in the Federal
Deposit Insurance Act and applicable regulations thereunder, and
the deposits in which are insured to the applicable limits by
the Bank Insurance Fund or Savings Association Insurance Fund.
7
5.5 Financial Statements.
--------------------
(a) TCB has filed and made available to Citco all forms,
reports, and documents required to be filed by TCB with the SEC
since January 1 of the third fiscal year preceding the date of
this Agreement (collectively, the "SEC Reports"). Except as
disclosed in Section 5.5(a) of the TCB Disclosure Memorandum,
the SEC Reports (i) at the time filed, complied in all Material
respects with the applicable requirements of the 1933 Act and
the 1934 Act, as the case may be, and (ii) did not at the time
they were filed (or if amended or superseded by a filing prior
to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a Material fact or omit to state
a Material fact required to be stated in such SEC Reports or
necessary in order to make the statements in such SEC Reports,
in light of the circumstances under which they were made, not
misleading. Except for TCB Subsidiaries that are registered as
a broker, dealer or investment advisor, none of TCB Subsidiaries
is required to file any forms, reports, or other documents with
the SEC.
(b) TCB has disclosed in Section 5.5 of the TCB
Disclosure Memorandum, and has delivered to Citco copies of, all
TCB Financial Statements prepared for periods ended prior to the
date hereof and will deliver to Citco copies of all TCB
Financial Statements prepared subsequent to the date hereof.
The TCB 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 TCB, 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 past business
practices, and (ii) present or will present, as the case may be,
fairly the consolidated financial position of TCB as of the
dates indicated and the consolidated results of operations,
changes in shareholders' equity, and cash flows of TCB for the
periods indicated, in accordance with GAAP (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
which were not or are not expected to be Material in amount or
effect).
5.6 Absence of Undisclosed Liabilities. Except as
----------------------------------
disclosed in Section 5.6 of the TCB Disclosure Memorandum, no
TCB Company has any Liabilities that are reasonably likely to
have, individually or in the aggregate, a Material Adverse
Effect on TCB, except Liabilities which are accrued or reserved
against in the consolidated balance sheets of TCB as of March
31, 2000, included in the TCB Financial Statements or reflected
in the notes thereto and except for Liabilities incurred in the
ordinary course of business subsequent to March 31, 2000.
Except as disclosed in Section 5.6 of the TCB Disclosure
Memorandum, no TCB Company has incurred or paid any Liability
since March 31, 2000, 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
TCB or (ii) in connection with the transactions contemplated by
this Agreement.
5.7 Absence of Certain Changes or Events. Since March
------------------------------------
31, 2000, except as disclosed in the TCB Financial Statements
delivered prior to the date of the Agreement or as otherwise
8
disclosed in the TCB 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 TCB, and (ii) the TCB Companies have
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 TCB or TCF provided in Article 7 of this
Agreement, other than conducting the process that has led up to
the execution and consummation of this Agreement including the
incurrence of expenses and liabilities resulting therefrom.
5.8 Tax Matters.
-----------
(a) All Tax Returns required to be filed by or on
behalf of any of the TCB 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,
1999, and, to the Knowledge of TCB and TCF, all Tax Returns
filed are complete and accurate in all Material respects. All
Tax Returns for periods ending on or before the date of the most
recent fiscal year end immediately preceding the Effective Time
will be timely filed or requests for extensions will be timely
filed. All Taxes shown on Tax Returns filed as of the date of
this Agreement have been paid. 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 the TCB Companies taken as a whole, except to the
extent reserved against in the TCB Financial Statements dated
prior to the date of this Agreement. All Taxes and other
Liabilities due with respect to completed and settled
examinations or concluded Litigation have been paid.
(b) None of the TCB Companies has 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 TCB Companies for the period or
periods through and including the date of the respective TCB
Financial Statements has been made and is reflected on such TCB
Financial Statements.
(d) Each of the TCB Companies is in compliance
with, and its records contain the information and documents
(including properly completed IRS Forms W-9) necessary to comply
with, in all material respects, applicable information reporting
and Tax withholding requirements under federal, state, and local
Tax Laws, and, to the Knowledge of TCB and TCF, such records
identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code.
(e) None of the TCB Companies has made any
payments, is obligated to make any payments, or is a party to
any contract, agreement, or other arrangement that could
obligate it
9
to make any payments that would be disallowed as a deduction
under Section 280G or 162(m) of the Internal Revenue Code.
(f) There are no Material Liens with respect to
Taxes upon any of the Assets of the TCB Companies except for
Liens for Taxes not yet due or being contested in good faith and
for which adequate provision has been made.
(g) There has not been an ownership change, as
defined in Internal Revenue Code Section 382(g), of the TCB
Companies that occurred during or after any Taxable Period in
which the TCB Companies incurred a net operating loss that
carries over to any Taxable Period ending after December 31,
1999.
(h) No TCB Company has filed any consent under
Section 341(f) of the Internal Revenue Code concerning
collapsible corporations.
(i) After the date of this Agreement, no Material
election with respect to Taxes will be made without the prior
consent of Citco, which consent will not be unreasonably
withheld.
(j) No TCB Company has or has had a permanent
establishment in any foreign country, as defined in any
applicable tax treaty or convention between the United States
and such foreign country.
5.9 Assets. Except as disclosed in Section 5.9 of the
------
TCB Disclosure Memorandum, the TCB Companies have good and
marketable title, free and clear of all Liens, to all of their
respective Assets. All tangible properties used in the
businesses of the TCB Companies are in good condition,
reasonable wear and tear excepted, and are usable in the
ordinary course of business consistent with the TCB Company's
past practices. All Assets which are Material to TCB's business
on a consolidated basis, held under leases or subleases by any
of the TCB Companies, 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. The TCB Companies
currently maintain insurance in amounts, scope, and coverage
reasonably necessary for their operations. None of the TCB
Companies has received notice from any insurance carrier that
(i) such insurance will be 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 any TCB
Company under such policies. The Assets of the TCB Companies
include all Material Assets required to operate the business of
the TCB Companies as presently conducted.
10
5.10 Environmental Matters.
---------------------
(a) To the Knowledge of TCB and TCF, and except as
set forth in Section 5.10(a) of the TCB Disclosure Memorandum,
each TCB Company, its Participation Facilities, and its Loan
Properties are, and have been, in compliance with all
Environmental Laws, except those instances of non-compliance
which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on the TCB Companies, taken
as a whole.
(b) There is no Litigation pending or, to the
Knowledge of TCB and TCF, threatened before any court,
governmental agency, or authority, or other forum in which any
TCB Company or any of its Participation Facilities has been or,
with respect to threatened Litigation, may reasonably be
expected to 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 Material, whether or not occurring
at, on, under, or involving a site owned, leased, or operated by
any TCB Company 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 the TCB Companies, taken as a whole.
(c) To the Knowledge of TCB and TCF, there is no
Litigation pending, threatened before any court, governmental
agency, or board, or other forum in which any of its Loan
Properties (or the TCB Companies in respect of such Loan
Property) has been or, with respect to threatened Litigation,
may reasonably be expected to 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 Material, 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 the TCB
Companies.
(d) To the Knowledge of TCB and TCF, 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 the TCB Companies, taken as a whole.
(e) To the Knowledge of TCB and TCF, during the
period of (i) any TCB Company's ownership or operation of any of
their respective current properties, (ii) any TCB Company's
participation in the management of any Participation Facility,
or (iii) any TCB Company's holding of a security interest in a
Loan Property, there have been no releases of Hazardous Material
in, on, under, or affecting (or potentially affecting) such
properties, except such as are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
the TCB Companies, taken as a whole. Prior to the period of
(i) any TCB Company's ownership or operation of any of their
respective current properties, (ii) any TCB Company's
participation in the management of any Participation Facility,
or (iii) any TCB Company's holding of a security interest in a
Loan Property, to the Knowledge of TCB and except as disclosed
in Section 5.10(e) of the TCB
11
Disclosure Memorandum, there were no releases of Hazardous
Material 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 the TCB Companies, taken as a whole.
5.11 Compliance with Laws. TCB is duly registered as a
--------------------
savings and loan holding company under the Home Owners' Loan
Act. Each TCB 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 the TCB
Companies, 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 the TCB Companies. None of the TCB Companies:
(a) is in violation of 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 the TCB Companies; and
(b) except as set forth in Section 5.11 of the TCB
Disclosure Memorandum, 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 TCB Company is not in compliance
with any of the Laws or Orders 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 TCB, (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
the TCB Companies, or (iii) requiring any TCB Company (x) to
enter into or consent to the issuance of a cease and desist
order, formal agreement, directive, commitment, or memorandum of
understanding, or (y) to adopt any Board resolution or similar
undertaking, which restricts materially the conduct of its
business, or in any material manner relates to its capital
adequacy, its credit or reserve policies, its management, or the
payment of dividends.
5.12 Labor Relations. No TCB Company is the subject of
---------------
any Litigation asserting that it or any other TCB Company has
committed an unfair labor practice (within the meaning of the
National Labor Relations Act or comparable state Law) or seeking
to compel it or any other TCB Company to bargain with any labor
organization as to wages or conditions of employment, nor is any
TCB Company a party to or bound by any collective bargaining
agreement, Contract, or other agreement or understanding with a
labor union or labor organization, nor is there any strike or
other labor dispute involving any TCB Company, pending or, to
the Knowledge of TCB and TCF, threatened, or to the Knowledge of
TCB and TCF, is there any activity involving any TCB Company's
employees seeking to certify a collective bargaining unit or
engaging in any other organization activity.
12
5.13 Employee Benefit Plans.
---------------------
(a) TCB and TCF have disclosed to Citco in writing
prior to the execution of the Agreement and in Section 5.13 of
the TCB Disclosure Memorandum, and has delivered or made
available to Citco prior to the execution of this Agreement
correct and complete copies in each case of, all Material TCB
Benefits Plans. For purposes of this Agreement, "TCB Benefit
Plans" means all written, or to the Knowledge of TCB unwritten
or verbal, pension, retirement, profit-sharing, deferred
compensation, stock option, employee stock ownership, severance
pay, vacation, bonus, or other incentive plan, all other
written, or to the Knowledge of TCB unwritten or verbal,
employee programs 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 maintained by, sponsored in whole or in
part by, or contributed to by, any TCB Company 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.
Any of the TCB Benefit Plans which is an "employee welfare
benefit plan," as that term is defined in Section 3(l) of ERISA,
or an "employee pension benefit plan," as that term is defined
in Section 3(2) of ERISA, is referred to herein as a "TCB ERISA
Plan." Any TCB ERISA Plan which is also a "defined benefit
plan" (as defined in Section 414(j) of the Internal Revenue Code
or Section 3(35) of ERISA) is referred to herein as a "TCB
Pension Plan." Each "employee pension benefit plan," as defined
in Section 3(2) of ERISA, ever maintained by any TCB Company
that was intended to qualify under Section 401(a) of the
Internal Revenue Code, is disclosed as such in Section 5.13 of
the TCB Disclosure Memorandum.
(b) TCB and TCF have delivered or made available
to Citco prior to the execution of this Agreement correct and
complete copies of the following documents: (i) all trust
agreements or other funding arrangements for such TCB Benefit
Plans (including insurance contracts), and all amendments
thereto, (ii) with respect to any such TCB Benefit Plans or
amendments, all determination letters, Material rulings,
Material opinion letters, Material information letters, or
Material advisory opinions issued by the Internal Revenue
Service, the United States Department of Labor, or the Pension
Benefit Guaranty Corporation after December 31, 1994,
(iii) annual reports or returns, audited or unaudited financial
statements, actuarial valuations and reports, and summary annual
reports prepared for any TCB Benefit Plan with respect to the
most recent plan year, and (iv) the most recent summary plan
descriptions and any Material modifications thereto.
(c) All TCB Benefit Plans are in compliance with
the applicable terms of ERISA, the Internal Revenue Code, any
other applicable Laws, and all terms of the TCB Benefit Plans,
except for any breach or violation which would not be reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on the TCB Companies. Each TCB ERISA Plan which
is intended to be qualified under Section 401(a) of the Internal
Revenue Code has received a currently effective favorable
determination letter from the Internal Revenue Service, and TCB
and TCF are not aware of any circumstances likely to result in
revocation of any such favorable determination letter. Each
trust created under any TCB ERISA Plan, which is intended to be
qualified under
13
Section 401(a) of the Internal Revenue Code, has been determined
to be exempt from Tax under Section 501(a) of the Internal
Revenue Code and TCB and TCF are not aware of any circumstance
which will or could reasonably result in revocation of such
exemption. With respect to each TCB Benefit Plan to the
Knowledge of TCB and TCF, no event has occurred which will or
could reasonably give rise to a loss of any intended Tax
consequences under the Internal Revenue Code or to any Tax under
Section 511 of the Internal Revenue Code that is reasonably
likely, individually or in the aggregate, to have a Material
Adverse Effect on the TCB Companies. There is no Material
pending or, to the Knowledge of TCB and TCF, threatened
Litigation relating to any TCB Benefit Plan.
(d) To the Knowledge of TCB, no TCB Company has
engaged in a transaction with respect to any TCB Benefit Plan
that, assuming the Taxable Period of such transaction has not
expired as of the date of this Agreement, would subject any TCB
Company to a Material tax or penalty imposed by either
Section 4975 of the Internal Revenue Code or Section 502(i) of
ERISA. To the Knowledge of TCB, neither TCB, TCF, nor any
administrator or fiduciary of any TCB Benefit Plan (or any agent
of any of the foregoing) has engaged in any transaction, or
acted or failed to act in any manner which could subject TCB to
any direct or indirect Liability (by indemnity or otherwise) for
breach of any fiduciary, co-fiduciary, or other duty under
ERISA, where such Liability, individually or in the aggregate,
is reasonably likely to have a Material Adverse Effect on the
TCB Companies. Except as disclosed in Section 5.13(d) of the
TCB Disclosure Memorandum, to the Knowledge of TCB, no oral or
written representation or communication with respect to any
aspect of the TCB Benefit Plans has been made to employees of
any TCB Company which is not in accordance with the written or
otherwise preexisting terms and provisions of such plans, where
any Liability with respect to such representation or disclosure
is reasonably likely to have a Material Adverse Effect on the
TCB Companies.
(e) As of the date of the most recent actuarial
valuation, no TCB 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. Since the
date of the most recent actuarial valuation, there has been
(i) no Material change in the financial position or funded
status of any TCB Pension Plan to the Knowledge of TCB,, (ii) no
change in the actuarial assumptions with respect to any TCB
Pension Plan to the Knowledge of TCB,, and (iii) no increase in
benefits under any TCB Pension Plan as a result of plan
amendments or changes in applicable Law. Neither any TCB Pension
Plan nor any "single-, multiple-, or multi-employer plan,"
within the meaning of Section 4001(a)(15) or 4001(a)(3) of
ERISA, currently or formerly maintained by any TCB Company, or
the single-, multiple-, or multi-employer plan of any entity
which is or was considered one employer with TCB under
Section 4001 of ERISA or Section 414 of the Internal Revenue
Code or Section 302 of ERISA (whether or not waived) (a "TCB
ERISA Affiliate") has an "accumulated funding deficiency" within
the meaning of Section 412 of the Internal Revenue Code or
Section 302 of ERISA or any withdrawal liability within the
contemplation of Title IV of ERISA. All contributions with
respect to a TCB Pension Plan or any single-, multiple-, or
multi-employer
14
plan of a TCB ERISA Affiliate have or will be timely made, and
there is no lien or expected lien under Internal Revenue Code
Section 412(n) or ERISA Section 302(f) or Tax under Internal
Revenue Code Section 4971. No TCB Company has provided, or is
required to provide, security to a TCB Pension Plan or to any
single-, multiple-, or multi-employer plan of a TCB ERISA
Affiliate pursuant to Section 401(a)(29) of the Internal Revenue
Code. All premiums required to be paid under ERISA Section 4006
have been timely paid by TCB, except to the extent any failure
would not have a Material Adverse Effect on the TCB Companies.
(f) No Liability under Title IV of ERISA has been
or is expected to be incurred by any TCB Company with respect to
any defined benefit plan currently or formerly maintained by any
of them or by any TCB ERISA Affiliate that has not been
satisfied in full (other than Liability for Pension Benefit
Guaranty Corporation premiums, which have been paid when due,
except to the extent any failure would not have a Material
Adverse Effect on the TCB Companies).
(g) Except as disclosed in Section 5.13(g) of the
TCB Disclosure Memorandum, no TCB Company has any obligations
for retiree health and retiree life benefits under any of the
TCB Benefit Plans other than with respect to benefit coverage
mandated by applicable Law.
(h) Except as set forth in Section 5.13 of the TCB
Disclosure Memorandum, neither the execution and delivery of
this Agreement nor the consummation of the transactions
contemplated hereby will, by themselves, (i) result in any
payment (including, without limitation, severance, unemployment
compensation, golden parachute, or otherwise) becoming due to
any director or any employee of any TCB Company from any TCB
Company under any TCB Benefit Plan or otherwise, (ii) increase
any benefits otherwise payable under any TCB Benefit Plan, or
(iii) result in any acceleration of the time of payment or
vesting of any such benefit. In no event shall any such payment
described in Section 5.13 of the TCB Disclosure Memorandum
result in a "excess parachute" payment as defined in Section
280G of the IRC.
(i) TCF will continue to accrue at least $4,000
per month to its SERP plan until the Effective Time. The total
SERP Liability at the Effective Time will not exceed $375,000.
5.14 Material Contracts. Except as set forth in
------------------
Section 5.14 of the TCB Disclosure Memorandum, none of the TCB
Companies, nor any of their 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 Contract providing for
aggregate payments to any Person in any calendar year in excess
of $50,000, (ii) any Contract relating to the borrowing of money
by any TCB Company or the guarantee by any TCB Company of any
such obligation (other than Contracts evidencing deposit
liabilities, purchases of federal funds, fully-secured
repurchase agreements, and Federal Home Loan Bank advances of
depository institution Subsidiaries, trade payables, and
Contracts relating to borrowings or guarantees made in the
ordinary course of business), and (iii) any other Contract or
amendment thereto that would be required to be filed as an
exhibit to a Form 10-KSB filed by TCB with the SEC as of the
date of this Agreement that was not filed or incorporated by
reference as an exhibit to TCB's Form 10-KSB for the fiscal year
ended
15
December 31, 1999 (together with all Contracts referred to
in Sections 5.9 and 5.13(a) of this Agreement, the "TCB
Contracts"). With respect to each TCB Contract: (i) the
Contract is in full force and effect; (ii) no TCB Company is in
Default thereunder, other than Defaults which are not reasonably
likely to have, individually or in the aggregate, a Material
Adverse Effect on TCB; (iii) no TCB Company has repudiated or
waived any Material provision of any such Contract; and (iv) no
other party to any such Contract is, to the Knowledge of TCB and
TCF, 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 the TCB Companies, or has
repudiated or waived any Material provision thereunder. Except
for Federal Home Loan Bank advances, all of the indebtedness of
any TCB Company for money borrowed is prepayable at any time by
such TCB Company without penalty or premium.
5.15 Legal Proceedings. Except as set forth in Section
-----------------
5.15 of the TCB Disclosure Memorandum, there is no Litigation
instituted or pending, or, to the Knowledge of TCB and TCF,
threatened against any TCB Company, or against any Asset,
employee benefit plan, interest, or right of any of them, nor
are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against any
TCB Company.
5.16 Reports. Since December 31, 1994, or the date of
-------
organization if later, each TCB 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
any Regulatory Authorities, except failures to file which are
not reasonably likely to have, individually or in the aggregate,
a Material Adverse Effect on the TCB Companies. 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 and
has been made available for review by representatives of Citco.
5.17 Statements True and Correct. None of the
---------------------------
information supplied or to be supplied by any TCB Company or any
Affiliate thereof for inclusion in the Proxy Statement to be
mailed to TCB's shareholders in connection with the
Shareholders' Meeting will, when first mailed to the
shareholders of TCB, be false or misleading with respect to any
Material fact, or contain any misstatement of Material fact, or
omit to state any Material fact required to be stated thereunder
or 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 required to be stated thereunder or
necessary to correct any Material statement in any earlier
communication with respect to the solicitation of any proxy for
the Shareholders' Meeting. All documents that any TCB 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.
5.18 Regulatory Matters. Except as specifically
------------------
contemplated by this Agreement, no TCB Company or any Affiliate
thereof has taken or agreed to take any action, and TCB has no
Knowledge of any fact or circumstance that is reasonably likely
to materially impede or delay receipt of any
16
Consents of Regulatory Authorities referred to in Section 9.1(b)
of this Agreement. To the Knowledge of TCB and TCF, there
exists no fact, circumstance, or reason why the requisite
Consents referred to in Section 9.1(b) of this Agreement cannot
be received in a timely manner without imposition of any
condition of the type described in the last sentence of such
Section 9.1(b).
5.19 State Takeover Laws. Each TCB Company has taken all
-------------------
necessary action to exempt the transactions contemplated by this
Agreement from any applicable "moratorium," "control share,"
"fair price," "business combination," or other anti-takeover
laws and regulations of the State of Tennessee (collectively,
"Takeover Laws") including those Laws contained within
Sections 00-000-000 et seq. of the TBCA.
5.20 Charter Provisions. Each TCB Company 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 Charter, Bylaws, or
other governing instruments of any TCB Company or restrict or
impair the ability of Citco or any of its Subsidiaries to vote,
or otherwise to exercise the rights of a shareholder with
respect to, shares of any TCB Company that may be directly or
indirectly acquired or controlled by it.
5.21 Support Agreements. Each of the directors of TCB
------------------
and TCF has executed and delivered to Citco a Support Agreement
in substantially the form as Exhibit 1 to this Agreement. In
addition, Xxxxxx X. Xxxxxx is executing and delivering a similar
Support Agreement with the noncompete provisions limited to
financial institutions in operation three (3) years or less.
5.22 Derivatives. All interest rate swaps, caps, floors,
-----------
option agreements, futures and forward contracts, and other
similar risk management arrangements, whether entered into for
TCB's own account, or for the account of one or more the TCB
Subsidiaries or their customers, were entered into (i) in
accordance with prudent business practices and all applicable
Laws, and (ii) with counterparties believed to be financially
responsible.
5.23 Year 2000. To the Knowledge of TCB and TCF, all
---------
critical computer software necessary for the conduct of its
business (the "Software") has been tested and is designed to be
used prior to, during, and after the calendar year 2000 A.D.,
and critical Software will operate during each such time period
without error relating to the year 2000, specifically including
any error relating to, or the product of, date data which
represents or references different centuries or more than one
century. TCB and TCF further represent and warrant that
critical Software has been tested and accepts, calculates,
sorts, extracts and otherwise processes date inputs and date
values, and returns and displays date values, in a consistent
manner regardless of the dates used, whether before, on, or
after January 1, 2000.
5.24 Stock Records. To the Knowledge of TCB, the stock
-------------
transfer books and stock ledgers of TCB and TCF are in good
order, complete, accurate and up to date, and with all necessary
signatures on the assignments of certificates representing
shares previously transferred, and set forth
17
all stock and securities issued, transferred and surrendered.
Except as described in Section 5.24 of the TCB Disclosure
Memorandum, to the Knowledge of TCB, no transfer has been made
without surrender of the proper certificate, duly endorsed, or
the completion of a lost certificate affidavit, and all
certificates so surrendered have been duly canceled and are
attached thereto.
5.25 Certain Interests. Except in arm's length
-----------------
transactions pursuant to standard commercial terms and
conditions or as set forth in Section 5.25 of the TCB Disclosure
Memorandum, no officer or director of any TCB Company has any
material interest in any property, real or personal, tangible or
intangible, used in or pertaining to the business of any TCB
Company. No such person is indebted to any TCB Company except
for indebtedness arising in the ordinary course of business
except as disclosed in Section 5.25 of the TCB Disclosure
Memorandum and TCB Company is not indebted to any such person
except for amounts due under normal salary or reimbursement of
ordinary business expenses.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES OF CITCO AND CITIZENS BANK
---------------------------------------------------------
Citco and Citizens Bank hereby represent and warrant to
TCB and TCF as follows:
6.1 Organization, Standing, and Power. Citco is a
---------------------------------
corporation duly organized, validly existing, and in good
standing under the Laws of the State of Tennessee, and has the
corporate power and authority to carry on its business as now
conducted and to own, lease, and operate its Material Assets.
Citco and Citizens Bank are 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 their respective Assets or the nature or
conduct of their respective 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 Citco.
6.2 Authority; No Breach By Agreement.
---------------------------------
(a) Citco and Citizens Bank have 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 Citco and Citizens
Bank. This Agreement represents a legal, valid, and binding
obligation of Citco and Citizens Bank, enforceable against them
in accordance with its terms (except in all cases as such
enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, receivership, conservatorship,
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).
18
(b) Neither the execution and delivery of this
Agreement by Citco and Citizens Bank, nor the consummation by
Citco of the transactions contemplated hereby, nor compliance by
Citco with any of the provisions hereof, will (i) conflict with
or result in a breach of any provision of their Charters or
Bylaws, (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 Citco Company under, any Contract or Permit
of any Citco 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
Citco, or (iii) subject to receipt of the requisite Consents
referred to in Section 9.1(b) of this Agreement, violate any Law
or Order applicable to any Citco 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, 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 Citco, no notice to,
filing with, or Consent of, any public body or authority is
necessary for the consummation by Citco of the Merger and the
other transactions contemplated in this Agreement.
6.3 Citco Subsidiaries. Citco or one of its
------------------
Subsidiaries owns all of the issued and outstanding shares of
capital stock of each Citco Subsidiary. There are no Contracts
relating to the rights of any Citco Company to vote or to
dispose of any shares of the capital stock of any Citco
Subsidiary. All of the shares of capital stock of each Citco
Subsidiary held by a Citco Company are fully paid and, except as
provided in statutes pursuant to which depository institution
Subsidiaries are organized, nonassessable under the applicable
corporation Law of the jurisdiction in which such Subsidiary is
incorporated or organized and are owned by the Citco Company
free and clear of any Lien. Each Citco Subsidiary is either a
bank or a corporation, and 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 Citco 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
Citco. Each Citco Subsidiary that is a depository institution
is an "insured depository 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 or
Savings Association Insurance Fund. As of the date of this
Agreement, Citco does not own beneficially any shares of the
capital stock of TCB.
6.4 Compliance with Laws. Citco is duly registered as a
--------------------
bank holding company under the BHC Act. Each Citco Company has
in effect all Permits necessary for it to own, lease, or operate
19
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 Citco, 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 Citco. None of the Citco Companies:
(a) is in violation of 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 Citco; and
(b) 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 Citco Company is not in compliance with
any of the Laws or Orders 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 Citco, (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
Citco, or (iii) requiring any Citco Company (x) to enter into or
consent to the issuance of a cease and desist order, formal
agreement, directive, commitment, or memorandum of
understanding, or (y) 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.
6.5 Statements True and Correct. None of the information
---------------------------
supplied or to be supplied by any Citco Company or any Affiliate
thereof for inclusion in the Proxy Statement to be mailed to
TCB's shareholders in connection with the Shareholders' Meeting,
will, when first mailed to the shareholders of TCB, be false or
misleading with respect to any Material fact, or contain any
misstatement of Material fact, or omit to state any Material
fact required to be stated thereunder or 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
required to be stated thereunder or necessary to correct any
Material statement in any earlier communication with respect to
the solicitation of any proxy for the Shareholders' Meeting.
All documents that any Citco 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.
6.6 Regulatory Matters. No Citco Company or any
------------------
Affiliate thereof has taken or agreed to take any action, and
Citco has no Knowledge of any fact or circumstance that is
reasonably likely to 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. To the Knowledge of Citco, there exists no fact,
circumstance or reason why the requisite Consents referred to in
Section 9.1(b) of this Agreement
20
cannot be received in a timely manner without imposition of any
condition of the type described in the last sentence of such
Section 9.1(b). Based upon the funding of the loan commitment
letter received by Citco, at the Closing, Citco will have
sufficient capital resources available to allow it to consummate
the Merger on the terms provided herein.
ARTICLE 7
CONDUCT OF BUSINESS PENDING CONSUMMATION
----------------------------------------
7.1 Affirmative Covenants of Both Parties. Unless the
-------------------------------------
prior written consent of the other Party shall have been
obtained, and except as otherwise expressly contemplated herein,
each Party 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, (iii) use its
reasonable efforts to maintain its current employee
relationships, and (iv) 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
sentence of Section 9.1(b) of this Agreement, or (b) adversely
affect the ability of any Party to perform its covenants and
agreements under this Agreement; provided, that the foregoing
shall not prevent any Citco Company from discontinuing or
disposing of any of its Assets or business, or from acquiring or
agreeing to acquire any other Person or any Assets thereof, if
such action is, in the judgment of Citco, desirable in the
conduct of the business of Citco and its Subsidiaries and such
action will not have a Material Adverse Effect on Citco.
7.2 Negative Covenants of TCB and TCF. From the date of
---------------------------------
this Agreement until the earlier of the Effective Time or the
termination of this Agreement, TCB and TCF covenant and agree
that they 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 Citco, which
consent shall not be unreasonably withheld:
(a) amend the Charter, Bylaws, or other governing
instruments of any TCB Company, or
(b) incur, guarantee, or otherwise become
responsible for, any additional debt obligation or other
obligation for borrowed money (other than indebtedness of a TCB
Company to another TCB Company), except in the ordinary course
of the business consistent with past practices (which shall
include, for TCB Subsidiaries that are depository institutions,
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 any TCB Company 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 TCB Disclosure Memorandum); or
21
(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 any TCB Company, or declare or pay any dividend, special or
regular, (except that TCB may declare and pay its standard
quarterly dividends of $.10 per share prior to the Effective
Time) or make any other distribution in respect of TCB's capital
stock; or
(d) except for this Agreement or pursuant to the
exercise of Rights outstanding as of the date of this Agreement
and pursuant to the terms thereof in existence on the date of
this Agreement, 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 TCB Common Stock or
any other capital stock of any TCB Company, or any stock
appreciation rights, or any option, warrant, conversion, or
other right to acquire any such stock, or any security
convertible into any such stock; or
(e) adjust, split, combine, or reclassify any
capital stock of any TCB Company or issue or authorize the
issuance of any other securities in respect of or in
substitution for shares of TCB Common Stock, or sell, lease,
mortgage, or otherwise dispose of or otherwise encumber (i) any
shares of capital stock of any TCB Subsidiary (unless any such
shares of stock are sold or otherwise transferred to another TCB
Company), (ii) investment securities, (iii) loans, including
dispositions thereof through loan participation agreements, and
(iv) other real estate owned by any TCB Company (except for the
sale of foreclosed real estate) other than in all instances, 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 securities, which in either
case have maturities of three years or less, purchase any
securities or make any Material investment, either by purchase
of stock or securities, contributions to capital, Asset
transfers, or purchase of any Assets, in any Person other than a
wholly-owned TCB 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 (iii) the creation of
new wholly-owned Subsidiaries organized to conduct or continue
activities otherwise permitted by this Agreement provided that
nothing herein shall prevent TCF from selling residential
mortgage loans which have been held for less than one year. It
is understood that TCF will not swap residential mortgage loans
for mortgage-backed securities issued by the Federal Home Loan
Mortgage Corporation without Citco's permission; or
(g) except as otherwise permitted or required in
this Agreement, grant any increase in compensation or benefits
to the employees or officers of any TCB Company, except as
required by Law or in accordance with past practices as
described in Section 7.2(g) of the TCB Disclosure Memorandum;
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; enter into or amend any severance
agreements with officers of any TCB Company; grant any increase
in fees or other
22
increases in compensation or other benefits to directors of any
TCB Company; or voluntarily accelerate the vesting of any stock
options or other stock-based compensation or employee benefits;
or
(h) enter into or amend any employment Contract
between any TCB Company and any Person (unless such amendment is
required by Law) that the TCB Company 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; or
(i) adopt any new employee benefit plan of any TCB
Company or make any Material change in or to any existing
employee benefit plans of any TCB Company other than any such
change that is required by Law or as contemplated by this
Agreement or that, in the opinion of counsel, is necessary or
advisable to maintain the tax qualified status of any such plan;
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 as
necessary for the prudent operation of its business or settle
any Litigation involving any Liability of any TCB Company for
Material money damages or restrictions upon the operations of
any TCB Company; or
(l) except in the ordinary course of business,
modify, amend, or terminate any Material Contract or waive,
release, compromise, or assign any Material rights or claims; or
(m) sell any mortgage loans from their portfolio
(any loans which have been held for at least one year or
construction loans one year after they have become permanent),
and it is understood that TCF will not swap residential mortgage
loans for mortgage-backed securities issued by the Federal Home
Loan Mortgage Corporation without Citco's permission; or
(n) make any loan or other extension of credit, or
grant any increase in an extension of credit, in the aggregate
amount of $250,000 to any borrower or its Affiliates.
7.3 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.
7.4 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
23
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 Proxy Statement; Shareholder Approval. As soon as
-------------------------------------
reasonably practicable after execution of this Agreement, TCB
shall prepare the Proxy Statement to be filed with the SEC.
Citco shall furnish all information concerning it as TCB may
reasonably request in connection with such action. TCB shall
call a Shareholders' Meeting, to be held as soon as reasonably
practicable, for the purpose of voting upon approval of this
Agreement and such other related matters as it deems
appropriate. In connection with the Shareholders' Meeting,
(i) TCB shall mail such Proxy Statement to its 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 TCB
shall recommend to its shareholders the approval of the matters
submitted for approval (subject to compliance with the Board's
fiduciary duties and the receipt from Trident Securities, a
Division of McDonald Investments Inc., of a letter dated not
more than three days prior to the date of the mailing of the
Proxy Statement confirming the opinion given to the Board prior
to execution of this Agreement to the effect that the
consideration to be received in the Merger by the holders of TCB
Common Stock is fair, from a financial point of view, to such
holders), and (iv) the Board of Directors and officers of TCB
shall use their reasonable efforts to obtain such shareholders'
approval. In addition, nothing in this Section 8.1 or elsewhere
in this Agreement shall prohibit accurate disclosure by TCB of
information that is required to be disclosed in the Proxy
Statement or in any other document required to be filed with the
SEC (including, without limitation, a
Solicitation/Recommendation Statement on Schedule 14D-9) or
otherwise required to be publicly disclosed by applicable Law or
regulations or rules of the NASD.
8.2 Applications. Citco shall promptly prepare and
------------
file, and TCB and TCF shall cooperate in the preparation and,
where appropriate, filing of, applications with all Regulatory
Authorities having jurisdiction over the transactions
contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this
Agreement. Citco shall permit TCB and its counsel to review
(and approve with respect to information relating to TCB) such
applications prior to filing same.
24
8.3 Filings with State Offices. Upon the terms and
--------------------------
subject to the conditions of this Agreement, Citco shall
execute and file the Tennessee Certificate of Merger with the
Secretary of State of the State of Tennessee and the Tennessee
Articles of Merger with the Secretary of State of the State of
Tennessee in connection with the Closing. Citizens Bank shall
execute and file similar documents as required for its merger
with TCF.
8.4 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, its reasonable best
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, without
limitation, 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.
8.5 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.
Each Party shall permit the other Party to make or cause to be
made such investigation of its business and properties and of
its 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.
(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. In the event that a Party is required by applicable
Law or valid court process to disclose any such confidential
information, then such Party shall provide the other Party with
prompt written notice of any such requirement so that the other
Party may seek a protective order or other appropriate remedy
and/or waive compliance with this Section 8.5 If in the absence
of a protective order or other remedy or the receipt of a waiver
by the other Party, a Party is nonetheless, in the opinion of
counsel, legally compelled to disclose any such confidential
information to any tribunal or else stand liable for contempt or
suffer other censure or penalty, a Party may, without liability
hereunder, disclose to such tribunal only that portion of the
confidential information which such counsel advises such Party
is legally required to be disclosed; provided that such
disclosing Party use its best efforts to preserve the
confidentiality of such confidential information, including
without limitation, by cooperating with the other Party to
obtain an appropriate protective order or other reliable
assurance that confidential treatment will be accorded such
confidential information by such tribunal. If this
25
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.
(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.
(d) Neither Party nor any of their respective
Subsidiaries shall be required to provide access to or to
disclose information where such access or disclosure would
violate or prejudice the rights of its customers, jeopardize the
attorney-client or similar privilege with respect to such
information or contravene any Law, rule, regulation, Order,
judgment, decree, fiduciary duty, or agreement entered into
prior to the date of this Agreement. The Parties will use their
reasonable efforts to make appropriate substitute disclosure
arrangements, to the extent practicable, in circumstances in
which the restrictions of the preceding sentence apply.
8.6 State Takeover Laws. Each TCB 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 Takeover Laws.
8.7 Press Releases. Prior to the Effective Time, Citco
--------------
and TCB shall consult with each other 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 Charter Provisions. Each TCB Company shall take all
------------------
necessary action to ensure that the entering into of this
Agreement and the consummation of the Merger and the other
transactions contemplated hereby do not and will not result in
the grant of any rights to any Person under the Charter, Bylaws,
or other governing instruments of any TCB Company or restrict or
impair the ability of Citco or any of its Subsidiaries to vote,
or otherwise to exercise the rights of a shareholder with
respect to, shares of any TCB Company that may be directly or
indirectly acquired or controlled by it.
8.9 Employee Benefits and Contracts. Following the
-------------------------------
Effective Time, Citco shall provide generally to officers and
employees of the TCB Companies, who at or after the Effective
Time become employees of a Citco Company, employee benefits
under employee benefit plans (other than stock option or other
plans involving the potential issuance of Citco Common Stock
except as set forth in this Section 8.9), on terms and
conditions which when taken as a whole are substantially similar
to those currently provided by the Citco Companies to their
similarly situated officers and employees. For purposes of
participation and vesting (but not accrual of benefits) under
such
26
employee benefit plans, (i) service under any qualified
defined benefit plans of the TCB Companies shall be treated as
service under Citco's qualified defined benefit plans, (ii)
service under any qualified defined contribution plans of the
TCB Companies shall be treated as service under Citco's
qualified defined contribution plans, and (iii) service under
any other employee benefit plans of the TCB Companies shall be
treated as service under any similar employee benefit plans
maintained by Citco. Except as otherwise described in this
Agreement, Citco also shall honor and cause each of its
Subsidiaries to honor all employment, severance, consulting, and
other compensation Contracts disclosed in Section 8.9 of the TCB
Disclosure Memorandum to Citco between any TCB Company and any
current or former director, officer, or employee thereof, and
all provisions for vested benefits or other vested amounts
earned or accrued through the Effective Time under the TCB
Benefit Plans. Subject to the provisions of Section 9.2(f),
Citco and Citizens Bank expressly acknowledge that as a result
of the transaction contemplated by this Agreement, Xxxx X.
Xxxxxx, Xxxxxx X. Xxxxxx, and Xxxxx X. Xxxxx will become
entitled to the payments provided for under their respective
employment and severance agreements upon their termination in
connection with a change in control. TCB and TCF shall use
their reasonable best efforts to obtain the consents of Xx.
Xxxxxx, Xx. Xxxxxx, and Xx. Xxxxx to the termination of their
respective employment and severance agreements as of the
Effective Time and shall pay Xx. Xxxxxx, Xx. Xxxxxx, and Xx.
Xxxxx the amounts to which they would be entitled under such
agreements upon their termination in connection with a change in
control.
8.10 Indemnification and Insurance.
-----------------------------
(a) Subject to the conditions set forth in
paragraph (b) below, for a period of six (6) years after the
Effective Time, Citco and Citizens Bank shall indemnify,
defend, and hold harmless each officer and director of a TCB
Company entitled to indemnification from a TCB Company (each,
an "Indemnified Party") against all Liabilities arising out of
actions or omissions occurring at or prior to the Effective Time
(including, without limitation, the transactions contemplated by
this Agreement) to the fullest extent permitted, but as may be
limited, by Tennessee Law, in each case as in effect on the date
hereof, including provisions relating to advances of expenses
incurred in the defense of any Litigation; provided, however,
that all rights to indemnification in respect of any claim
asserted or made against an Indemnified Party within such six
(6) year period shall continue until the final disposition of
such claim. Without limiting the foregoing, in any case in
which approval by TCB is required to effectuate any
indemnification, Citco shall 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 Citco and the Indemnified Party.
(b) Any Indemnified Party wishing to claim
indemnification under paragraph (a) above, upon learning of any
such Liability or Litigation, shall promptly notify Citco
thereof. In the event of any such Litigation (whether arising
before or after the Effective Time), (i) Citco shall have the
right to assume the defense thereof and Citco shall not be
liable to such Indemnified Parties for any legal expenses of
other counsel or any other expenses subsequently incurred by
such Indemnified Parties in connection with the defense thereof
(employing counsel reasonably satisfactory to the Indemnified
Parties), except that if Citco elects not to assume such defense
or counsel for the
27
Indemnified Parties advises in writing that there are Material
substantive issues which raise conflicts of interest between
Citco and the Indemnified Parties, the Indemnified Parties may
retain counsel satisfactory to them, and Citco shall pay all
reasonable fees and expenses of such counsel for the Indemnified
Parties promptly as statements therefor are received; provided,
however, that (i) Citco shall be obligated pursuant to this
paragraph (b) to pay for only one firm of counsel for all
Indemnified Parties in any jurisdiction, unless counsel for any
Indemnified Party advises in writing that there are Material
substantive issues which raise conflicts of interest between the
Indemnified Parties, (ii) the Indemnified Parties will cooperate
(to the extent reasonably appropriate under the circumstances)
in the defense of any such Litigation, and (iii) Citco shall not
be liable for any settlement effected without its prior written
consent; and provided further that Citco shall not have any
obligation hereunder to any Indemnified Party when and if a
court of competent jurisdiction shall determine, and such
determination shall have become final, that the indemnification
of such Indemnified Party in the manner contemplated hereby is
prohibited by applicable Law.
(c) If Citco or any of its successors or assigns
shall consolidate with or merge into any other Person and shall
not be the continuing or surviving Person of such consolidation
or merger or shall transfer all or substantially all of its
Assets to any Person, then and in each case, proper provision
shall be made so that the successors and assigns of Citco shall
assume the obligations set forth in this Section 8.10.
(d) The provisions of this Section 8.10 are
intended to be for the benefit of and shall be enforceable by,
each Indemnified Party, his or her heirs and representatives.
(e) At the Effective Time, Citco shall provide
directors and officers insurance coverage for TCB's directors
and officers by purchasing continuation coverage under TCB's
existing directors' and officers' liability insurance policy (or
provide a policy providing comparable coverage and amounts and
terms no less favorable to the persons currently covered by
TCB's existing policy) covering persons who are currently
covered by such insurance on a prior acts basis for a period of
six years after the Effective Time and as long as the one-time
premium for such policy does not exceed $15,000 and such
insurance can reasonably be obtained.
8.11 Certain Modifications. Citco and TCB shall consult
---------------------
with respect to their loan, litigation, and real estate
valuation policies and practices (including loan classifications
and levels of reserves) and the TCB Companies shall make such
modifications or changes to their policies and practices, if
any, immediately prior to the Effective Time, as may be mutually
agreed upon provided such modifications or changes are in
accordance with GAAP and all applicable Laws. Citco and TCB
also shall consult with respect to the character, amount, and
timing of restructuring and Merger-related expense charges to be
taken by each of the Parties in connection with the transactions
contemplated by this Agreement and shall take such charges in
accordance with GAAP and all applicable Laws as may be mutually
agreed upon by the Parties. In no event, however, shall TCB or
TCF be obligated to take any such actions unless and until it
shall have received from Citco written confirmation that all
conditions precedent to Citco's obligation to close shall have
been satisfied or waived. Neither Party's representations,
warranties, and covenants contained in this
28
Agreement shall be deemed to be inaccurate or breached in any
respect or deemed to have a Material Adverse Effect on TCB as a
consequence of any modifications or charges undertaken solely on
account of this Section 8.11.
8.12 Termination of Plans.
--------------------
(a) Prior to the Effective Time, TCF shall give
written notice to the Financial Institutions Retirement Fund
("FIRF") of its withdrawal from participation in FIRF effective
as of the earliest practicable date after the Effective Time.
TCB and/or TCF shall accrue and pay all contributions due and
payable to FIRF, including all contributions payable because of
withdrawal from TCF's participation in FIRF. Within sixty (60)
days after the execution of this Agreement, Citco and TCB will
use their reasonable best efforts to determine the costs
associated with withdrawing from participation in FIRF. To the
extent it is determined that such costs and any similar costs
associated with the previous termination of the MRP Plan will be
in excess of the anticipated annual funding cost of $75,000, an
adjustment will be made to decrease the Exchange Price so that
the aggregate amount payable by Citco to holders of TCB Common
Stock and options to acquire TCB Common Stock pursuant to
Section 3.1 of this Agreement will be reduced by the amount by
which such costs exceed $75,000.
(b) With respect to the TCB 401(k) plan, TCB will
cooperate with Citco prior to the Effective Time to prepare for
either the termination of such plan or the merger of such plan
into a similar plan offered by Citco to its employees.
(c) With respect to the maximum of $375,000 in
SERP Liability outstanding as of the Effective Time, Citco or
the Citco Companies shall pay such Liability within ten days
after the Effective Time. To the extent any additional SERP
Liability is determined by Citco to be due and payable, an
adjustment will be made to decrease the Exchange Price so that
the aggregate amount payable by Citco to holders of TCB Common
Stock and options to acquire TCB Common Stock pursuant to
Section 3.1 of this Agreement will be reduced by the amount by
which such costs exceed $375,000.
8.13 ESOP. As soon as practicable after the execution of
----
this Agreement, Citco and TCB will use their reasonable best
efforts to take such actions as may be necessary or advisable to
terminate the TCB Employee Stock Ownership Plan ("ESOP") at the
Effective Time. Between the date hereof and the Effective Time,
the existing TCB ESOP indebtedness will be paid in accordance
with the current debt repayment schedule, and TCB or TCF may
make the contributions to the TCB ESOP as is allowable under
applicable provisions of the Internal Revenue Code to fund such
payments which must be approved by Citco. Any indebtedness of
the TCB ESOP remaining as of the Effective Time shall be repaid
from the related trust, in accordance with Section 17.3 of the
TCB ESOP provided, however, that (i) any related sale or
distribution of shares by the TCB ESOP shall be effected in
accordance with the requirements of federal and any applicable
state securities laws and regulations, and (ii) all
distributions from the TCB ESOP after the Effective Time shall
be in cash. Upon the repayment of the TCB ESOP loan, the
remaining funds in the TCB ESOP suspense
29
account will be allocated (to the extent permitted by Sections
401(a), 415, 4975, and other applicable provisions of the
Internal Revenue Code) to TCB ESOP participants, as determined
under the terms of the TCB ESOP. TCB and TCF are authorized to
file as soon as possible a determination application with the
Internal Revenue Service regarding the tax qualification of the
TCB ESOP upon termination. TCB and Citco agree that, subject to
the conditions described herein and the receipt of a favorable
Internal Revenue Service determination letter as soon as
practicable after the Effective Time and repayment of the TCB
ESOP loan, participants in the TCB ESOP shall be entitled at
their election to have the amounts in the TCB ESOP accounts
either distributed to them in a lump sum or rolled over to
another tax-qualified plan (including Citco plans to the extent
permitted by Citco) or individual retirement account. The
actions relating to termination of the TCB ESOP will be adopted
conditioned upon the consummation of the Merger. As of and
following the Effective Time, Citco shall cause the TCB ESOP to
be maintained for the exclusive benefit of employees and other
persons who are participants or beneficiaries therein prior to
the Effective Time and proceed with termination of the TCB ESOP
through distribution of its assets in accordance with this
Section 8.14 and as otherwise may be required to comply with
applicable law.
8.14 Sole Agreement to Merge or Sell. Except as required
-------------------------------
by applicable law, rules, or regulations (including the
fiduciary duties of the TCB and TCF directors under applicable
law), no TCB Company has been, is, will become, or will be
allowed to become, a party to any merger or business combination
agreement, letter of intent, agreement of sale, or other
agreement obligating any TCB Company to sell or authorize the
sale or transfer of any capital stock , or to allow any TCB
Company to merge or consolidate with, or to be acquired in any
other manner by, any entity or person other than Citco. Until
such time, if any, as this Agreement is terminated pursuant to
Section 10, except as required by applicable law, rules, or
regulations (including the fiduciary duties of the TCB and TCF
directors under applicable law), the TCB Companies will not, and
will cause each of their representatives or agents not to,
directly or indirectly solicit, initiate, or encourage any
inquiries or proposals from, discuss or negotiate with, provide
any non-public information to, or consider the merits of any
unsolicited inquiries or proposals from, any Person (other than
Citco) relating to any transaction involving the sale of the
business or assets (other than in the ordinary course of
business) of any TCB Company, or any of the capital stock of any
TCB Company, or any merger, consolidation, business combination,
or similar transaction involving any TCB Company.
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 to 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 TCB
--------------------
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.
30
(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 (excluding
requirements relating to the raising of additional capital or
the disposition of Assets or deposits) which in the reasonable
good faith judgment of the Board of Directors of Citco would so
materially adversely impact the economic or business benefits 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 obtained
which is necessary to consummate the transactions contemplated
hereby shall be conditioned or restricted in a manner which in
the reasonable good faith judgment of the Board of Directors of
Citco would so materially adversely impact the economic or
business benefits of the transactions contemplated by this
Agreement so as to render inadvisable the consummation of the
Merger.
(d) Legal Proceedings. No court or governmental
-----------------
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) Proxy Statement. The Proxy Statement shall be
---------------
effective under the 1934 Act, no stop orders suspending the
effectiveness of the Proxy Statement shall have been issued, and
no action, suit, proceeding, or investigation by the SEC to
suspend the effectiveness thereof shall have been initiated and
be continuing.
(f) Fairness Opinion. Trident Securities, a
----------------
Division of McDonald Investments Inc., shall have issued at
the time described in Section 8.1 an opinion to TCB as to the
fairness, from a financial point of view, of the Merger.
9.2 Conditions to Obligations of Citco and Citizens Bank.
----------------------------------------------------
The obligations of Citco and Citizens Bank 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 Citco and Citizens
Bank 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 TCB and TCF 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
31
representations and warranties which are confined to a specified
date shall speak only as of such date). The representations and
warranties of TCB and TCF set forth in this Agreement shall be
true and correct (except for inaccuracies which are de minimis
in amount).
(b) Performance of Agreements and Covenants. Each
---------------------------------------
and all of the agreements and covenants of TCB and TCF 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. TCB shall have delivered to
------------
Citco (i) a certificate, dated as of the Effective Time and
signed on its behalf by its duly authorized officers, 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 TCB's
and TCF'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 Citco and its counsel shall request.
(d) Claims Letters. Each of the directors and
--------------
executive officers of TCB and TCF shall have executed and
delivered to Citco, letters in substantially the form of Exhibit
2.
(e) Legal Opinion. Citco shall have received a
-------------
written opinion, dated as of the Effective Time, of counsel to
TCB, in substantially the form of Exhibit 3.
(f) Amendment to Severance Agreements. Citco shall
---------------------------------
have entered into written agreements in the form attached as
Exhibit 8 with base compensation terms similar to those
currently in effect with Xxxxxxx X. Xxxxxx, Xxxx X. Xxxxxxx, and
Xxxxxx X. Xxxxxx. Immediately prior to the Effective Time, Xxxx
Xxxxxx, Xxxxxx X. Xxxxxx, and Xxxxx X. Xxxxx will terminate
their employment, and any outstanding employment or severance
agreements, with the TCB Companies with the maximum severance,
golden parachute, or other payments (excluding payments which
may be due such persons under the SERP, but only to the extent
necessary to keep all such payments below the definition of the
"golden parachute" under the IRC, or upon the conversion of
shares of TCB Common Stock to Article 3 of this Agreement)
payable to such employees in the amounts of $564,712, $97,241,
and $122,159, respectively, for a total severance, golden
parachute, or other payment of no more than $784,112 (provided
that the Effective Time shall have occurred prior to December
31, 2000).
(g) Contractor Letter. Citco shall have received
-----------------
a written confirmation, in a form acceptable to Citco, from the
contractor for TCF's Xxxxxxxx xxxxxx that all Liabilities to the
contractor and all subcontractors have been satisfied in full
and no liens or encumbrances have been placed on the branch
property.
(h) Stock Option Agreement. Citco and TCB shall
----------------------
have entered into the Stock Option Agreement, in the form
attached as Exhibit 7, within 24 hours after the execution of
this Agreement.
32
9.3 Conditions to Obligations of TCB and TCF. The
----------------------------------------
obligations of TCB and TCF 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 TCB and TCF 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 Citco and Citizens Bank 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 Citco and
Citizens Bank set forth in this Agreement shall be true and
correct (except for inaccuracies which are de minimis in
amount).
(b) Performance of Agreements and Covenants. Each
---------------------------------------
and all of the agreements and covenants of Citco and Citizens
Bank 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. Citco shall have delivered to
------------
TCB (i) a certificate, dated as of the Effective Time and signed
on its behalf by its duly authorized officers, 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 Citco's
and Citizens Bank's Board of Directors 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 TCB and its counsel shall request.
(d) Legal Opinion. TCB shall have received a
-------------
written opinion, dated as of the Effective Time, of counsel to
Citco, in substantially the form of Exhibit 4.
(e) Exchange Agent Certificate. The Exchange
--------------------------
Agent shall have delivered to TCF a certificate dated as of the
Effective Time certifying to its receipt of sufficient cash to
pay for the aggregate Exchange Price.
ARTICLE 10
TERMINATION
-----------
10.1 Termination. Notwithstanding any other provision of
-----------
this Agreement, and notwithstanding the approval of this
Agreement by the shareholders of TCB, 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
Citco and the Board of Directors of TCB each so determined by
majority vote of the respective Boards; or
33
(b) By the Board of Directors of any Party
(provided that the terminating Party is not then in breach of
any representation or warranty contained in this Agreement under
the applicable standard set forth in Section 9.2(a) of this
Agreement in the case of TCB and TCF and Section 9.3(a) of this
Agreement in the case of Citco and Citizens Bank or in Material
breach of any covenant or other agreement contained in this
Agreement) in the event of an inaccuracy of any representation
or warranty of the other Party 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 inaccuracy and
which inaccuracy would provide the terminating 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 TCB
and TCF and Section 9.3(a) of this Agreement in the case of
Citco and Citizens Bank; or
(c) By the Board of Directors of any Party
(provided that the terminating Party is not then in breach of
any representation or warranty contained in this Agreement under
the applicable standard set forth in Section 9.2(a) of this
Agreement in the case of TCB and TCF and Section 9.3(a) in the
case of Citco and Citizens Bank) 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 any Party 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 TCB fail to vote their approval of
the matters submitted for the approval by such shareholders at
the Shareholders' Meeting where the transactions were presented
to such shareholders for approval and voted upon; or
(e) By the Board of Directors of any Party in the
event that the Merger shall not have been consummated by
December 31, 2000, or such later date, as may be necessary to
finalize any required regulatory approvals or waiting periods,
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 any Party
(provided that the terminating Party is not then in breach of
any representation or warranty contained in this Agreement under
the applicable standard set forth in Section 9.2(a) of this
Agreement in the case of TCB and TCF and Section 9.3(a) of this
Agreement in the case of Citco and Citizens Bank or in Material
breach of any 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.
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 8.5(b) of this
34
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.
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 of
this Agreement.
ARTICLE 11
MISCELLANEOUS
-------------
11.1 Definitions.
-----------
(a) Except as otherwise provided herein, the
capitalized terms set forth below shall have the following
meanings:
"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.
"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.
"CITCO COMPANIES" shall mean, collectively, Citco
and all Citco Subsidiaries.
"CITCO SUBSIDIARIES" shall mean the Subsidiaries of
Citco and any corporation, bank, savings association, or other
organization acquired as a Subsidiary of Citco in the future and
owned by Citco at the Effective Time.
"CONFIDENTIALITY AGREEMENT" shall mean that certain
Confidentiality Agreement, entered into prior to the date of
this Agreement, between TCB and Citco.
35
"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.
"ENVIRONMENTAL LAWS" shall mean all Laws relating to
pollution or protection of human health or the environment
(including ambient air, surface water, ground water, 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 Material, or
otherwise relating to the manufacture, processing, distribution,
use, treatment, storage, disposal, transport, or handling of any
Hazardous Material.
"ERISA" shall mean the Employee Retirement Income
Security Act of 1974, as amended.
"EXHIBITS" 1 through C-2, 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 MATERIAL" 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
36
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.
"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 the personal knowledge of the chairman,
president, or chief financial officer of such Person.
"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.
"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 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; (iii) such standard exceptions to title
as are pre-printed in Schedule B to the ALTA Form B title
commitment;(iv) Liens which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on a
Party; and (v) Liens which have been disclosed in either the
Citco Disclosure Memorandum or the TCB Disclosure Memorandum.
"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.
37
"LOAN PROPERTY" shall mean any property owned,
leased, or operated by the Party in question or by any of its
Subsidiaries or in which such Party or Subsidiary holds a
security or other interest (including an interest in a fiduciary
capacity), and, where required by the context, includes the
owner or operator of such property, but only with respect to
such property.
"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 condition, results of
operations, or business 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 (a) changes in banking and similar Laws of
general applicability or interpretations thereof by courts or
governmental authorities, (b) changes in GAAP or regulatory
accounting principles generally applicable to banks and their
holding companies, (c) actions and omissions of a Party (or any
of its Subsidiaries) taken with the prior informed consent of
the other Party in contemplation of the transactions
contemplated hereby, (d) the Merger and compliance with the
provisions of this Agreement on the operating performance of the
Parties; and (e) changes in economic conditions generally
affecting financial institutions.
"NASD" shall mean the National Association of
Securities Dealers, Inc.
"1933 ACT" shall mean the Securities Act of 1933, as
amended.
"1934 ACT" shall mean the Securities Exchange Act of
1934, as amended.
"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 (including, but not
limited to, participating in a fiduciary capacity) 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 TCB, TCF, Citizens Bank,
or Citco, and "PARTIES" shall mean TCB, TCF, Citizens Bank, and
Citco.
"PERMIT" shall mean any federal, state, local, and
foreign governmental approval, authorization, certificate,
easement, filing, franchise, license, notice, permit, or right
to which any
38
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 TCB to solicit the approval of its shareholders of the
transactions contemplated by this Agreement.
"REGULATORY AUTHORITIES" shall mean, collectively,
the Federal Trade Commission, the United States Department of
Justice, the Board of the Governors of the Federal Reserve
System, the Federal Deposit Insurance Corporation, the Office
of Thrift Supervision, all 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, 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" shall mean the United States Securities and
Exchange Commission.
"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 TCB 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
39
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 Citco with
respect to the merger of Citco and TCB and Citizens Bank with
respect to the merger of Citizens Bank and TCF.
"TAX" or "TAXES" shall mean all federal, state,
local, and foreign taxes, charges, fees, levies, imposts,
duties, or other assessments, including income, gross receipts,
excise, employment, sales, use, transfer, license, payroll,
franchise, severance, stamp, occupation, windfall profits,
environmental, federal highway use, commercial rent, customs
duties, capital stock, paid-up capital, profits, withholding,
Social Security, single business and unemployment, disability,
real property, personal property, registration, ad valorem,
value added, alternative or add-on minimum, estimated, or other
tax or governmental fee of any kind whatsoever, imposed or
required to be withheld by the United States or any state,
local, or foreign government or subdivision or agency thereof,
including any interest, penalties, or additions thereto.
"TAXABLE PERIOD" shall mean any period prescribed by
any governmental authority, including the United States or any
state, local, or foreign government or subdivision or agency
thereof for which a Tax Return is required to be filed or Tax is
required to be paid.
"TAX RETURN" shall mean any report, return,
information return, or other information required to be supplied
to a taxing authority in connection with Taxes, including any
return of an affiliated or combined or unitary group that
includes a Party or its Subsidiaries.
"TBCA" shall mean the Tennessee Business Corporation
Act as amended.
"TBL" shall mean the Tennessee Banking Law as
amended.
"TCB COMMON STOCK" shall mean the $1.00 par value
common stock of TCB.
"TCB COMPANIES" shall mean, collectively, TCB and
all TCB Subsidiaries.
"TCB DISCLOSURE MEMORANDUM" shall mean the written
information entitled "TCB Disclosure Memorandum" delivered prior
to the execution of this Agreement to Citco describing in
reasonable detail the matters contained therein and, with
respect to each disclosure made therein, specifically
referencing each Section or subsection of this Agreement under
which such disclosure is being made. The inclusion of any
matter in this document shall not be deemed an admission or
otherwise to imply that any such matter is Material for purposes
of this Agreement.
"TCB FINANCIAL STATEMENTS" shall mean (i) the
consolidated statements of condition (including related notes
and schedules, if any) of TCB as of March 31, 2000, and as of
December 31, 1999 and 1998, and the related statements of
income, changes in shareholders' equity, and cash flows
40
(including related notes and schedules, if any) for the three
months ended March 31, 2000, and for each of the three years
ended December 31, 1999, 1998, and 1997, included in the TCB
Disclosure Memorandum, and (ii) the consolidated statements of
condition of TCB (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) with respect to periods ended subsequent to March 31,
2000.
"TCB SUBSIDIARIES" shall mean the Subsidiaries of
TCB, which shall include the TCB Subsidiaries described in
Section 5.4 of this Agreement and any corporation, bank, savings
association, or other organization acquired as a Subsidiary of
TCB in the future and owned by TCB at the Effective Time.
"TCF COMMON STOCK" shall mean the $1.00 par value
Common Stock of TCF.
"TENNESSEE ARTICLES OF MERGER" shall mean
collectively the Articles of Merger to be executed by Citco and
TCB as well as the Articles of Merger to be executed by Citizens
Bank and TCB and filed with the Secretary of State of the State
of Tennessee relating to the Merger as contemplated by
Section 1.1 of this Agreement.
(b) The terms set forth below shall have the
meanings ascribed thereto in the referenced sections:
Closing. . . . . . . . . . . . . . Section 1.2
Effective Time . . . . . . . . . . Section 1.3
Exchange Agent . . . . . . . . . . Section 4.1
Exchange Price . . . . . . . . . . Section 3.1(c)
Indemnified Party. . . . . . . . . Section 8.10
Merger . . . . . . . . . . . . . . Section 1.1
TCB Benefit Plans. . . . . . . . . Section 5.13(a)
TCB Contracts. . . . . . . . . . . Section 5.14
TCB ERISA Affiliate. . . . . . . . Section 5.13(e)
TCB ERISA Plan . . . . . . . . . . Section 5.13(a)
TCB Pension Plan . . . . . . . . . Section 5.13(a)
TCB SEC Reports. . . . . . . . . . Section 5.5(a)
Takeover Laws. . . . . . . . . . . Section 5.19
(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.
--------
(a) Except as otherwise provided in this
Section 11.2, 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
41
fees, and fees and expenses of its own financial or other
consultants, investment bankers, accountants, and counsel.
(b) Nothing contained in this Section 11.2 shall
constitute or shall be deemed to constitute liquidated damages
for the willful breach by a Party of the terms of this Agreement
or otherwise limit the rights of the nonbreaching Party.
11.3 Brokers and Finders. Except for Trident Securities
-------------------
as to TCB and Xxxxxx, Xxxxxxxx and Company as to Citco, 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, her, or its
representing or being retained by or allegedly representing or
being retained by TCB , TCF, Citco, or Citizens Bank, each of
the Parties, 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 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, other than
the Confidentiality Agreement, which shall remain in effect.
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 Sections 8.12 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 TCB Common Stock,
there shall be no amendment decreasing the Exchange Price or
changing the form of consideration without the further approval
of such holders.
11.6 Waivers.
-------
(a) Prior to or at the Effective Time, Citco,
acting through its Board of Directors, chief executive officer,
chief financial officer, or other authorized officer, shall have
the right to waive any Default in the performance of any term of
this Agreement by TCB or TCF, to waive or extend the time for
the compliance or fulfillment by TCB or TCF of any and all of
their obligations under this Agreement, and to waive any or all
of the conditions precedent to the obligations of Citco and
Citizens Bank 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
42
authorized officer of Citco except that any unfulfilled
conditions shall be deemed to have been waived at the Effective
Time.
(b) Prior to or at the Effective Time, TCB, acting
through its Board of Directors, chief executive officer, chief
financial officer, or other authorized officer, shall have the
right to waive any Default in the performance of any term of
this Agreement by Citco or Citizens Bank, to waive or extend the
time for the compliance or fulfillment by Citco or Citizens Bank
of any and all of their obligations under this Agreement, and to
waive any or all of the conditions precedent to the obligations
of TCB and TCF 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 TCB except that any unfulfilled
conditions shall be deemed to have been waived at the Effective
Time.
(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:
TCB or TCF: Twin City Bancorp, Inc.
000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxxx X. Xxxxxx
President
43
Copy to Counsel: Xxxxxxxx Ronon Housley Kantarian
& Xxxxxxxxx, LLP
0000 00xx Xxxxxx, X.X., Xxxxx 000
Telecopy Number: (000) 000-0000
Attention: Xxxxx X. Xxxxxxx, Esq.
Citco or Citizens Bank: Citco Community Bancshares, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxx XxXxxxx, III
Chairman of the Board
Copy to Counsel: Baker, Donelson, Bearman & Xxxxxxxx
A Professional Corporation
000 Xxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Telecopy Number: (000) 000-0000
Attention: Xxxxxx X. Xxxxx, Esq.
11.9 Governing Law. This Agreement shall be governed by
-------------
and construed in accordance with the Laws of the State of
Tennessee, without regard to any applicable conflicts of Laws,
except to the extent that federal Laws relate to the
consummation of the Merger.
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 the
Parties.
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
44
terms and provisions hereof in any court of the United States or
any state having jurisdiction, this being in addition to any
other remedy to which they are entitled at law or in equity.
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.
IN WITNESS WHEREOF, each of the Parties has caused this
Agreement to be executed on its behalf and attested by officers
thereunto as of the day and year first above written.
ATTEST: TWIN CITY BANCORP, INC.
By:/s/ Xxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxx
---------------------- -------------------------
Senior Vice President Xxxx X. Xxxxxx, President
ATTEST: TWIN CITY FEDERAL SAVINGS BANK
By:/s/ Xxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxxx
---------------------- -------------------------
Senior Vice President Xxxx X. Xxxxxx
Title:President
ATTEST: CITCO COMMUNITY BANCSHARES, INC.
By:/s/ Xxx XxXxxxx By: /s/ Xxx XxXxxxx, III
---------------------- -------------------------
Secretary Xxx XxXxxxx, III
Chairman of the Board
ATTEST: CITIZENS BANK
By:/s/ Xxxxxxx Xxxxxxx By: /s/ Xxx XxXxxxx, III
---------------------- -------------------------
Secretary Xxx XxXxxxx, III
Chairman of the Board
45
LIST OF EXHIBITS
----------------
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
1. Form of Support Agreement.(Section 1.4 and
5.21).
2. Form of Claims Letter. (Section 9.2(d)).
3. Opinion of TCB Counsel (Section 9.2(e)).
4. Opinion of Citco Counsel (Section 9.3(d)).
5. Articles of Merger with Plan of Merger
(Section 1.3).
6. Reserved.
7. Stock Option Agreement (Section 9.2(h)).
8. Employment Agreements (Section 9.2(f)).
CONFIDENTIAL
EXHIBIT NUMBER DESCRIPTION
-------------- -----------
C-1. TCB's Disclosure Memorandum
46
EXHIBIT 1
SUPPORT AGREEMENT
THIS SUPPORT AGREEMENT ("Agreement") is made and
entered into as of the ____ day of July, 2000, by and between
the undersigned, _______________________, a resident of
__________, __________________, and Citco Community Bancshares,
Inc., a corporation organized and existing under the laws of the
State of Tennessee ("Citco").
Citco, its subsidiary Citizens Bank, Twin City
Bancorp, Inc. a corporation organized and existing under the
laws of the State of Tennessee ("TCB") and its subsidiary Twin
City Federal Savings Bank ("TCF"), have entered into an
Agreement and Plan of Merger, dated as of July___, 2000 (the
"Merger Agreement"). The Merger Agreement generally provides
for the merger of TCB into Citco and the merger of TCF into
Citizens Bank (collectively, the "Merger"), and the conversion
of the issued and outstanding shares, and options to purchase
shares, of the $1.00 par value common stock of TCB ("TCB Common
Stock") into cash. The Merger Agreement is subject to the
approval of the shareholders of TCB and TCF as and to the extent
required by law or by the provisions of any governing
instruments and to the receipt of certain regulatory approvals,
and the satisfaction of other conditions.
The undersigned is a member of the Board of
Directors of TCB or TCF and/or is the owner of _________ shares
of TCB Common Stock (the "Shares"). In order to induce Citco to
enter into the Merger Agreement, the undersigned is entering
into this Agreement with Citco to set forth certain terms and
conditions governing the actions to be taken by the undersigned
solely in his capacity as a shareholder of TCB with respect to
the Shares until consummation of the Merger.
NOW, THEREFORE, in consideration of the transactions
contemplated by the Merger Agreement and the mutual promises and
covenants contained herein, the parties agree as follows:
1. Without the prior written consent of Citco,
which consent shall not be unreasonably withheld, the
undersigned shall not transfer, sell, assign, convey, or
encumber (except for such encumbrances that are made with
recourse) any of the Shares during the term of this Agreement
except for transfers (i) by operation of law, by will, or
pursuant to the laws of descent and distribution, or (ii) in
which the transferee shall agree in writing to be bound by the
provisions of paragraphs 1, 2, and 3 of this Agreement as fully
as the undersigned, (iii) by a bona fide gift to a family
member, or (iv) to Citco pursuant to the terms of the Merger
Agreement. Without limiting the generality of the foregoing,
the undersigned shall not grant to any party any option or right
to purchase the Shares or any interest therein. Also, it is not
the intent of the undersigned prior to the Effective Time of the
Merger to exercise any options to purchase Shares currently
issued to the undersigned except in the case of such options
which might expire prior to the Effective Time.
1-1
2. The undersigned intends to, and will, vote (or
cause to be voted) all of the Shares over which the undersigned
has voting authority (other than in a fiduciary capacity) in
favor of the Merger Agreement and the Merger at any meeting of
shareholders of TCB called to vote on the Merger Agreement or
the Merger or the adjournment thereof or in any other
circumstance upon which a vote, consent, or other approval with
respect to the Merger Agreement or the Merger is sought. Except
as required by applicable law, rules, or regulations (including
the fiduciary duties of the TCB and TCF directors under
applicable law), the undersigned will vote as a director, if
applicable, to recommend the approval by the shareholders at any
meeting of shareholders of TCB called to vote on the Merger
Agreement or the Merger or the adjournment thereof or in any
other circumstance upon which a vote, consent, or other approval
with respect to the Merger Agreement or the Merger is sought.
Finally, the undersigned intends to, and will, surrender the
certificate or certificates representing the Shares, or options
to purchase Shares, over which the undersigned has dispositive
authority to Citco upon consummation of the Merger as described
in the Merger Agreement and hereby waives any rights of
appraisal, or rights to dissent from the Merger, that the
undersigned may have.
3. Except as otherwise provided in this
Agreement, at any meeting of shareholders of TCB or at any
adjournment thereof or any other circumstances upon which their
vote, consent, or other approval is sought, the undersigned will
vote (or cause to be voted) all of the Shares over which the
undersigned has voting authority (other than in a fiduciary
capacity) against (i) any merger agreement, share exchange, or
merger (other than the Merger Agreement and the Merger),
consolidation, combination, sale of substantial assets, merger,
recapitalization, dissolution, liquidation, or winding-up of or
by TCB or TCF or (ii) any amendment of TCB's or TCF's Charter or
Bylaws or other proposal or transaction involving TCB or any of
its subsidiaries, which amendment or other proposal or
transaction would in any manner impede, frustrate, prevent, or
nullify the Merger, the Merger Agreement, or any of the other
transactions contemplated thereby.
4. The undersigned covenants and agrees with
Citco that for a period of eighteen (18) months after the
effective time of the Merger, the undersigned shall not, without
the prior written consent of Citco, directly or indirectly serve
as a consultant to, serve as a management official of, or be or
become a major shareholder of any financial institution [Xxxxxx
Insert: in operation three years or less] having an office in
any county in the State of Tennessee or Commonwealth of Virginia
in which TCB or any of its subsidiaries maintains an office as
of the date of this Agreement. It is expressly understood that
the covenants contained in this paragraph 4 do not apply to
(i) "management official" positions which the undersigned holds
with financial institutions other than TCB or any of its
subsidiaries as of the date of this Agreement, (ii) securities
holdings which cause the undersigned to be deemed a major
shareholder of a financial institution other than TCB as of the
date of this Agreement, or (iii) advisory relationships with a
financial institution which the undersigned has as of the date
of this Agreement or may have after the date hereof solely in
the capacity as legal counsel, accountants or investment
advisor. For the purposes of the covenants contained in this
paragraph 4, the following terms shall have the following
respective meanings:
1-2
(a) The term "management official" shall refer to
service of any type which gives the
undersigned the authority to participate,
directly or indirectly, in policy-making
functions of the financial institution. This
includes, but is not limited to, service as an
organizer, officer, director, or advisory
director of the financial institution. It is
expressly understood that the undersigned may
be deemed a management official of the
financial institution whether or not the
undersigned holds any official, elected, or
appointed position with such financial
institution.
(b) The term "financial institution" shall refer
to any bank, bank holding company, savings and
loan association, savings and loan holding
company, or any other similar financial
institution which engages in the business of
accepting deposits or making loans or which
owns or controls a company which engages in
the business of accepting deposits or making
loans. It is expressly understood that the
term financial institution shall include any
financial institution as defined herein that
after the date of this Agreement makes
application to an appropriate federal or state
regulatory authority for approval to organize.
(c) The term "major shareholder" shall refer to
the beneficial ownership of 10% or more of any
class of voting securities of such company or
the ownership of 10% or more of the total
equity interest in such company, however
denominated.
5. The undersigned acknowledges and agrees that
Citco could not be made whole by monetary damages in the event
of any default by the undersigned of the terms and conditions
set forth in this Agreement. It is accordingly agreed and
understood that Citco, in addition to any other remedy which it
may have at law or in equity, shall be entitled to an injunction
or injunctions to prevent breaches of this Agreement and
specifically to enforce the terms and provisions hereof in any
action instituted in any state or federal court having
appropriate jurisdiction located in Tennessee.
6. 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.
7. Except with respect to the covenants contained
in paragraph 4 of this Agreement, which shall be governed by the
terms set forth therein and shall be effective only upon
consummation of the Merger, the covenants and obligations set
forth in this Agreement shall expire and be of no further force
and effect on the earlier of: (i) December 31, 2000, or such
date to which
1-3
the Merger Agreement is extended; or (ii) the date on which the
Merger Agreement is terminated under Section 10.1
thereof.
IN WITNESS WHEREOF, this Agreement has been duly
executed and delivered by the undersigned as of the day and year
first above written.
As to the undersigned,
signed in the presence of:
__________________________ ________________________________
Name:___________________________
(Please print or type)
CITCO COMMUNITY BANCSHARES, INC.
By:____________________________
Title:_________________________
1-4
EXHIBIT 2
CLAIMS LETTER
____ ____ ____, 0000
Xxxxx Community Bancshares, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, Xxxxxxxxx 00000
Re: Twin City Bancorp, Inc.
----------------------
Ladies and Gentlemen:
This letter is delivered pursuant to Section 9.2(d) of the
Agreement and Plan of Merger, dated as of July ___, 2000, by and
between Citco Community Bancshares, Inc. ("Citco"), Citizens
Bank, Twin City Bancorp, Inc. ("TCB"), and Twin City Federal
Savings Bank ("TCF").
In my capacity as an officer or a director of TCB or TCF,
as of the date of this letter, I do not, to the best of my
knowledge, have any claims, and I am not aware of any facts or
circumstances that I believe are likely to give rise to any
claim, for indemnification under TCB's or TCF's Charter or
Bylaws as existing on _____ ___, 2000, or as may be afforded by
the laws of Tennessee.
Sincerely,
____________________________________________
Signature of Officer or Director
____________________________________________
Name of Officer or Director (Please Print)
2-1
EXHIBIT 3
OPINION OF TCB COUNSEL
Citco Community Bancshares, Inc.
000 Xxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Re: Agreement and Plan of Merger
Gentlemen:
We have acted as special counsel to Twin City Bancorp, Inc.
(the "Company"), a Tennessee corporation, and Twin City Federal
Savings Bank (the "Bank"), a federally chartered stock savings
bank, in connection with the negotiation, execution and
consummation of the Agreement and Plan of Merger dated as of
June ___, 2000 (the "Agreement"), by and between the Company,
the Bank, Citco Community Bancshares, Inc. and Citizens Bank.
The term "Agreement" as used herein shall refer only to the
contractual agreement itself, exclusive of any exhibits or
schedules attached thereto, and shall not include any other
documents, contracts or matters referred to or described in the
Agreement. Capitalized terms used herein and not otherwise
defined herein shall have the meanings ascribed to them in the
Agreement. While this firm represents the Company and the Bank
in connection with specific legal matters as to which we are
consulted by them, we do not provide legal services to the
Company and the Bank in connection with the day-to-day
operations of their business or routine legal proceedings
related thereto. We are rendering this opinion pursuant to
Section 9.2(e) of the Agreement.
In our capacity as special counsel, we have been requested by
the Company to render the opinions set forth in this letter, and
in connection therewith, we have reviewed the following
documents: (i) an executed original of the Agreement; (ii) the
Company's Charter, certified as true and correct by the
Secretary of State of the State of Tennessee as of _________,
2000, and bylaws, certified as true and correct by the Company's
Secretary; (iii) the Bank's Charter, certified as true and
correct by the Office of Thrift Supervision of the U.S.
Department of the Treasury ("OTS") as of _______, 2000 and
bylaws, certified as true and correct by the Bank's Secretary;
(iv) incumbency certificates signed by certain officers of the
Company and the Bank; (v) resolutions of the Boards of Directors
and shareholders of the Company and the Bank, authorizing
certain actions taken in connection with the transactions
contemplated by the Agreement, certified as true and correct by
the Secretaries of the Company and the Bank, respectively; (vi)
a good standing certificate issued by the Secretary of State of
the State of Tennessee with respect to the Company on
___________, 2000; (vii) a certificate of existence issued by
the OTS with respect to the Bank on ___________, 2000; (viii)
the application/notice filed by Citco on _________, 2000 with
the Board of Governors of the Federal Reserve System
("FRB") with respect to its acquisition of the Company; (ix) the
order of the FRB, dated _______, 2000, approving such
application; (x) the application filed by Citco with
3-1
the Tennessee Department of Financial Institutions on ________,
2000 with respect to its acquisition of the Company; (xi) the
order issued by the Tennessee Commissioner of Financial
Institutions on ______, 2000 approving such application; (xii)
the proxy statement ("Proxy Statement")for the Special Meeting
of the Company's Shareholders held _________, 2000("the
Special Meeting"); (xiii) an affidavit from Registrar and
Transfer Company as to the mailing of the Proxy Statement; (xiv)
the Certificate and Report of the Inspector of Election for the
Special Meeting; (xv) Articles of Merger as proposed to be filed
with the Secretary of State of the State of Tennessee; (xvi) the
Plan of Merger; and (xvii) certificates of the Presidents of the
Company and the Bank dated the date hereof ("Officers'
Certificates"). Other than our review of the documents
described in clauses (i) through (xvii) above, we have not
reviewed any other documents or made any independent
investigation for the purpose of rendering this opinion and
we make no representation as to the scope or sufficiency of our
document review for your purposes. With your consent, our
opinion is qualified in all respects by the scope of such
document examination.
We have relied, without independent investigation, upon the
certifications of governmental officials and private
organizations having access to and regularly reporting on
government files and records, including certificates and
articles of incorporation, charters and certificates as to good
standing. In addition, as to certain matters, we have relied
without independent investigation, upon certain oral
representations of officers of the Company and the Bank, upon
the Officers' Certificates and upon the representations and
warranties of the Company and the Bank contained in the
Agreement, in each case, for the truth, accuracy and
completeness of the matters contained therein.
We express no opinion as to the remedies conferred upon you by
the Agreement and other agreements referred to therein or the
remedy which any court, other government body, agency or
arbitrator may grant, impose or render. With your consent,
this letter is governed by, and shall be interpreted in
accordance with the assumptions, qualifications, exceptions,
definitions, limitations on coverage and other limitations
provided for and specified in Sections 4, 6-A, 6-B, 7, 9, 11
through 14, 18 and 19 (other than subsection (e) but only as to
paragraph (4) below) of the Legal Opinion Accord (the
"Accord") of the American Bar Association's Section of Business
Law (1991), included in the Third Party Legal Opinion Report, 47
Bus. Law 167 (1991) and we expressly incorporate the provisions
of such Sections herein by reference. Each of the opinions
expressed herein is subject to the General Qualifications as
defined in the Accord.
The law covered by the opinions expressed herein is limited to
the Home Owners' Loan Act ("HOLA") and OTS regulations
thereunder and the law of the State of Tennessee. With respect
to all matters of Tennessee law, we have with your permission
relied exclusively on the opinion of Xxxxxxxxxx, Xxxxxxxx &
Xxxxx, P.C. delivered herewith.
Based upon, and subject to, the foregoing, we are of the
opinion, as of the date hereof, that:
3-2
(1) The Company is a corporation organized, validly existing
and, as of the date set forth on the good standing certificate
issued with respect to the Company, in good standing under the
Tennessee Business Corporation Act, and has corporate power to
perform its obligations under the Agreement.
(2) The Bank is a federal savings bank, organized and validly
existing under the HOLA and has the corporate power to own or
lease its properties and assets and to carry on its business
as described in the Proxy Statement.
(3) The execution, delivery and performance of the Agreement
by the Company have been duly and validly approved by all
requisite corporate action on the part of the Company.
(4) To our actual knowledge, no consent or approval, which
has not already been obtained, from any federal or Tennessee
regulatory authority is required for execution and delivery by
the Company and Bank of the Agreement and the consummation of
the Merger.
(5) The Agreement has been duly and validly executed and
delivered by the Company and constitutes a valid and binding
obligation of the Company enforceable in accordance with its
terms.
The foregoing is rendered solely for your benefit in
connection with the above-described transactions. You may not,
without our prior express written approval, deliver copies
of this letter or extracts therefrom to any other person, and no
one other than you is entitled to rely on the foregoing.
STRADLEY, RONON, XXXXXXX & YOUNG, LLP
By:___________________________________
Xxxxx X. Xxxxxxx, A Partner
3-3
EXHIBIT 4
OPINION OF CITCO COUNSEL
We have acted as legal counsel to Citco Community
Bancshares, Inc. (collectively with Citizens Bank, the
"Company") in connection with the Agreement and Plan of Merger
(the "Agreement") entered into on _________, 2000, between the
Company, Twin City Federal Savings Bank ("TCF") and Twin City
Bancorp, Inc. ( together with TCF, the "Other Company"). This is
the opinion contemplated by Section 9.3(d) of the Agreement.
All capitalized terms used in the opinion without definition
have the respective meanings given to them in this Agreement or
the Accord referred to below.
This opinion letter is governed by, and shall be interpreted
in accordance with, the Legal Opinion Accord (the "Accord") of
the American Bar Association Section of Business Law (1991). As
a consequence, it is subject to a number of qualifications,
exceptions, definitions, limitations on coverage and other
limitations, all as more particularly described in the Accord,
and this opinion letter should be read in conjunction
therewith.
By your acceptance and use of this letter, you agree that
none of its contents will be quoted, paraphrased, or otherwise
disclosed, either tangibly, verbally, or otherwise, to any other
person or entity, or used for any other purpose except to the
extent provided in the Accord, without the explicit prior
written consent of a partner of this Firm.
To render this Opinion, we have made the investigation
described below. We have not independently verified information
obtained from third persons, except as set forth below. As to
matters of fact, we have made inquiry as stated herein, and have
relied solely upon:
(a) our Actual Knowledge;
(b) the information obtained from public officials
and public records that is set forth below; and
(c) representations contained in the Agreement and
the representations of responsible officers of the Company
contained in the certificates identified below.
In the course of our representation of the Company,
nothing has come to our attention which would lead us to believe
that any of the factual matters upon which this Opinion is
premised are inaccurate in any material respect.
4-1
In so acting, and with your permission, we have based our
Opinion upon a review of the following documents, and such other
documents as we deemed necessary or advisable as a basis for the
opinion expressed:
A. The Agreement and all exhibits thereto.
B. Copies of the Charter and Bylaws of Company and its
subsidiaries certified to us by the Tennessee Secretary of
State, OTS, and/or representatives of Company to be true and
correct copies of such Charter and Bylaws.
C. Minutes of the Board of Directors and shareholders
of Company approving the Agreement and certified to us by
representatives of Company to be true, correct and complete.
D. Certificate of Existence of Company and its
subsidiaries issued by the Secretary of State of Tennessee,
dated __________, 2000, and OTS dated ____________, 2000.
E. The Officers' Certificate of Company dated as of
this date.
In addition to the General Qualifications of the Accord,
the Opinions rendered herein are, with your consent, subject to
the following assumptions, limitations, qualifications and
exceptions:
(1) The Opinions and other representations contained
herein are limited to the effects of the presently existing Laws
and the constitutional laws of the State of Tennessee and its
subordinate counties and municipalities, and of the United
States of America. Otherwise, with respect to any matter
addressed herein which may be governed by, other than Tennessee
or federal Law, we assume, but disclaim any Opinion, that such
other law is sufficiently similar such that its application
would produce the same conclusion as may be set forth herein.
(2) We express no Opinion as to the Company's Financial
Statements, and no inference should be drawn that we have
expressed any Opinion on matters relating to the ability of the
Company to perform its obligations with respect to the Financial
Statements under the transactions described herein.
Under the laws of the United States of America and the
State of Tennessee, all as presently in effect, it is our
opinion, subject to the assumptions, limitations, qualifications
and exceptions set forth herein, that:
(a) The Company is a corporation duly organized, validly
existing, and in good standing under the laws of the State of
Tennessee with full corporate power and authority to carry on
the business in which it is engaged as described as being
carried on by it in the proxy statement used to solicit the
approval by the shareholders of TCB of the transactions
contemplated by the Agreement ("Proxy Statement").
4-2
(b) The execution and delivery of the Agreement and
compliance with its terms, and consummation of the transactions
contemplated thereby, do not and will not violate or contravene
any provision of the Charter or Bylaws of the Company.
(c) In accordance with the laws of Tennessee, the Charter of
the Company and the Bylaws of the Company and pursuant to
resolutions duly adopted by its Board of Directors, the
Agreement has been duly adopted and approved by the Board of
Directors of the Company.
(d) All proceedings required by law or by provisions of the
Agreement to be taken by the Company in connection with the due
consummation of the transactions contemplated by the Agreement
have been duly and validly taken.
(e) The Agreement has been duly and validly executed and
delivered by the Company, and assuming valid authorization,
execution and delivery by TCB, constitutes a valid and binding
agreement of the Company enforceable in accordance with its
terms, except as enforceability may be limited by bankruptcy,
insolvency, reorganization, or similar laws affecting creditors'
rights generally, provided, however, that we express no opinion
as to the availability of the equitable remedy of specific
performance.
Our Opinions are as of the date hereof and are subject to
future changes of law or fact. We expressly disclaim any duty
to update our Opinions or to advise you as to the effect of
future events or any change in facts upon which these Opinions
are based.
Very truly yours,
4-3
EXHIBIT 5
ARTICLES OF MERGER
OF DOMESTIC CORPORATION
INTO CITCO COMMUNITY BANCSHARES, INC.
Pursuant to the provisions of Section 00-00-000 of
theTennessee Business Corporation Act (the "TBCA"), the
undersigned corporations adopt the following Articles of Merger
for the purpose of merging into a single corporation:
1. The name and state of incorporation of each of the
constituent corporations are:
(a) Twin City Bancorp, Inc., a Tennessee corporation;
and
(b) Citco Community Bancshares, Inc., a Tennessee
corporation.
2. An Agreement and Plan of Merger and the attached Plan of
Merger was approved by each of the undersigned
corporations in the manner prescribed by the TBCA. The
name of the surviving corporation is Citco Community
Bancshares, Inc., and it will be governed by the laws of
the State of Tennessee. The Charter of Citco Community
Bancshares, Inc. shall be the Charter of the Surviving
Corporation.
3. As to Citco Community Bancshares, Inc., the Plan was duly
adopted at a meeting of the Board of Directors (since
shareholder approval is not required under the TBCA) on
_______________, 2000.
4. As to Twin City Bancorp, Inc., the Plan was duly adopted
at a meeting of the shareholders of Common Stock on
___________________, 2000, where _________ undisputed
votes were cast for the Agreement and Plan of Merger,
such amount being sufficient for approval by that voting
group. The only outstanding shares are 1,121,388 shares
of Common Stock which represent a like number of votes to
be cast.
5. The effective date of these Articles of Merger is
_____________, 2000.
Dated: _______________, 2000
5-1
ATTEST: CITCO COMMUNITY BANCSHARES,
INC.
__________________________ By: ___________________________
Secretary
Title:_________________________
ATTEST: TWIN CITY BANCORP, INC.
__________________________ By: ___________________________
Secretary
Title:_________________________
5-2
PLAN OF MERGER
THIS PLAN OF MERGER (the "Plan") is made and entered into
this _______ day of _____________, 2000, between Twin City
Bancorp, Inc., a Tennessee corporation ("TCB"), whose principal
offices are at 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx 00000; and
Citco Community Bancshares, Inc., a Tennessee corporation
("Citco"), whose principal offices are at 000 Xxxxx Xxxxxx,
Xxxxxxxxxxxx, Xxxxxxxxx 00000. None of the names of the
constituent corporations have changed.
W I T N E S S E T H:
WHEREAS, TCB and Citco are parties to the Agreement and
Plan of Merger dated ____________________, 2000 (the "Merger
Agreement"); and
WHEREAS, the authorized capital stock of TCB consists of
8,000,000 shares of Common Stock ("TCB Common Stock"), $1.00 par
value, of which 1,121,388 shares are issued and outstanding and
2,000,000 shares of preferred stock, $1.00 par value per share,
none of which are issued or outstanding; and
WHEREAS, the Board of Directors and shareholders of TCB on
________ 2000, and _________, 2000, respectively; and the Board
of Directors of Citco on __________________, 2000, have
approved that TCB be merged with and into Citco (the "Merger")
and, by resolutions duly adopted, have approved and adopted this
Plan.
NOW, THEREFORE, in consideration of the premises, mutual
covenants and agreements herein contained, and for the purpose
of stating the method, terms and conditions of the Merger
provided for herein, the mode of carrying the same into effect
as hereinafter provided, and such other provisions relating to
the Merger as the parties deem necessary or desirable, the
parties hereto agree as follows:
ARTICLE I
MERGER
Subject to the terms and conditions of this Plan and the
Merger Agreement, at the Effective Time (as hereinafter
defined), TCB shall be merged with and into Citco pursuant to
the provisions of, and with the effect provided in, Section
_________ of the Tennessee Business Corporation Act (said
transaction being hereinafter referred to as the "Merger"). At
the Effective Time, the separate existence of TCB shall cease
and Citco, as the surviving entity, shall continue unaffected
and unimpaired by the Merger (Citco as existing at and after the
Effective Time, being sometimes referred to as the "Surviving
Corporation"). At the Effective Time, the Surviving Corporation
shall succeed to, without other transfer, and shall possess and
enjoy, all the rights, privileges, immunities, powers and
franchises both of a public and a private nature, and be subject
to all the restrictions, disabilities and duties of each of the
constituent corporations. All the rights, privileges,
immunities,
5-3
powers and franchises of each of the constituent corporations
and all property, real, personal and mixed, and all debts due to
either of said constituent corporations on whatever account, for
stock descriptions as well as for all other things in action or
belonging to each of said corporations, shall be vested in the
Surviving Corporation. All property, rights, privileges,
immunities, powers and franchises and all and every other
interest shall be thereafter the property of the Surviving
Corporation as they were of the respective constituent
corporations. The title to any real estate vested by deed or
otherwise in either of said constituent corporations shall not
revert or be in any way impaired by reason of the Merger;
provided, however, that all rights of creditors and all liens
upon any property of either of said constituent corporations
shall be preserved unimpaired, limited in lien to the property
affected by such liens at the effective time of the Merger, and
all debts, liabilities and duties of said constituent
corporations, respectively, shall thenceforth attach to the
Surviving Corporation and may be enforced against it to the same
extent as if said debts, liabilities and duties had been
incurred or contracted by the Surviving Corporation.
ARTICLE II
CHARTER, BYLAWS, AND NAME
Upon and after the Effective Time, the Charter and Bylaws
of Citco in effect immediately prior to the Effective Time shall
be the Charter and Bylaws of the Surviving Corporation, in each
case until further amended in accordance with applicable law.
ARTICLE III
BOARD OF DIRECTORS AND OFFICERS
As of the Effective Time, the Board of Directors and
officers of the Surviving Corporation shall consist respectively
of the following persons until their successors are elected and
qualified:
_______________ _______________ __________
_______________ _______________ __________
_______________ _______________ __________
ARTICLE IV
CAPITAL
Each share of capital stock of Citco issued and
outstanding immediately prior to the Effective Time shall, at
the Effective Time, continue to be issued and outstanding.
5-4
ARTICLE V
CONVERSION AND EXCHANGE OF TCB COMMON STOCK
1. As of the Effective Time of the Merger, each share
of TCB Common Stock issued and outstanding immediately prior to
the Effective Time shall, by virtue of the Merger becoming
effective and without any action on the part of anyone, be
canceled and converted as provided in Section 2 hereof.
2. At the Effective Time, by virtue of the Merger and
without any action on the part of Citco or TCB, or the
shareholders of any of the foregoing, the shares of the
constituent corporations shall be converted as follows:
(i) Each share of Citco Common Stock issued
and outstanding immediately prior to the Effective Time shall
remain issued and outstanding from and after the Effective Time.
(ii) Each share of TCB Common Stock
(excluding shares held by TCB or its subsidiaries or Citco or
its subsidiaries, in each case other than in a fiduciary
capacity or as a result of debts previously contracted or shares
as to which dissenters' rights of appraisal have been perfected
and not withdrawn or forfeited under Section 5 of this Article
V) issued and outstanding at the Effective Time shall be
converted into $17.15 cash payable by check as soon after the
Effective Time as is feasible.
(iii) Each option to purchase shares of TCB
Common Stock (excluding options held by TCB or its subsidiaries
or Citco or its subsidiaries, and in each case other than a
fiduciary capacity or as a result of debts previously
contracted) which are not exercised at the Effective Time shall
be converted into $17.15 cash less the applicable exercise price
per option and shall be payable by check as soon after the
Effective Date as is feasible (the purchase price per share of
TCB Common Stock identified in Sections 2(ii) and 2(iii) are
herein after referred to collectively as the "Exchange Price.")
3. In the event TCB changes the number of shares of TCB
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, the Exchange Price
shall be proportionately adjusted.
4. Each of the shares, or options to purchase shares,
of TCB Common Stock held by TCB or its subsidiaries or by Citco
or its subsidiaries, 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.
5. Any holder of shares of TCB Common Stock, who
perfects such holder's dissenters' rights of appraisal in
accordance with and as contemplated by Section 00-00-000 et seq.
of the TBCA shall be entitled to receive the value of such
shares in cash as determined pursuant to such provision
5-5
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
TBCA. In the event that a dissenting shareholder of TCB fails
to perfect, or effectively withdraws or loses, his right to
appraisal and of payment for his shares under these provisions,
as of the Effective Time, the shares of TCB Common Stock held by
such person shall be exchanged as determined under Section 2.
6. Immediately prior to the Effective Time, Citco shall
deposit with the exchange agent (the "Exchange Agent") for the
benefit of holders of shares of TCB Common Stock and holders of
options to purchase TCB Common Stock, sufficient cash to satisfy
its obligations under Section 3.1 of this Agreement. Within
five days after the Effective Time, Citco and TCB shall cause
the Exchange Agent to mail to the former shareholders and option
holders of TCB appropriate transmittal materials (which shall
specify that delivery shall be effected, and risk of loss and
title to the certificates theretofore representing shares, or
options to purchase shares, of TCB Common Stock shall pass, only
upon proper delivery of such certificates to the Exchange
Agent). Until so surrendered, each outstanding certificate of
TCB Common Stock shall be deemed for all purposes, to represent
the consideration into which the number of shares of TCB Common
Stock represented thereby prior to the Effective Time shall have
been converted without interest. Citco shall not be obligated
to deliver the consideration to which any former holder of TCB
Common Stock is entitled as a result of the Merger until such
holder surrenders such holder's certificate or certificates
representing the shares of TCB Common Stock for exchange. The
certificate or certificates of TCB Common Stock so surrendered
shall be duly endorsed as the Exchange Agent may require. Any
other provision of this Agreement notwithstanding, neither the
Surviving Corporation, TCB, nor the Exchange Agent shall be
liable to a holder of TCB Common Stock for any amounts paid or
property delivered in good faith to a public official pursuant
to any applicable abandoned property law.
7. At the Effective Time, the stock transfer books of
TCB shall be closed as to holders of TCB Common Stock
immediately prior to the Effective Time and no transfer of TCB
Common Stock by any such holder shall thereafter be made or
recognized. Until surrendered for exchange, each certificate
theretofore representing shares of TCB Common Stock (other than
shares to be canceled pursuant to Section 4 of this Article V or
shares as to which dissenters' rights of appraisal have been
perfected and not withdrawn or forfeited under Section 5 of this
Article V) shall from and after the Effective Time represent for
all purposes only the right to receive the consideration
provided in Section 2 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 TCB in
respect of such shares of TCB Common Stock and which remain
unpaid at the Effective Time.
ARTICLE VI
EFFECTIVE TIME OF THE MERGER
The Merger shall be effective at the time and on the date
that this Plan is filed with the Tennessee Secretary of State
pursuant to and together with the other documents specified in
5-6
Section 00-00-000 of the Tennessee Business Corporation Act or
such later time and date as the parties may agree and cause to
be set forth in the following space in this Plan as so filed:
__________________________ (such date and time being herein
referred to as "Effective Time").
ARTICLE VII
CONDITIONS PRECEDENT
The obligations of TCB and Citco to effect the Merger as
herein provided shall be subject to satisfaction, unless duly
waived, of the conditions set forth in the Merger Agreement and
Plan of Merger, including without limitation, the approval of
the Federal Reserve Board and other banking regulators and the
approval of the shareholders of TCB in accordance with Tennessee
law.
ARTICLE VIII
TERMINATION
Anything contained in this Plan to the contrary
notwithstanding, and notwithstanding adoption hereof by the
shareholders of TCB, this Plan may be terminated and the Merger
abandoned as provided in the Merger Agreement.
ARTICLE IX
MISCELLANEOUS
1. This Plan may be amended or supplemented at any time
by mutual agreement of TCB and Citco. Any such amendment or
supplement must be in writing and approved by their respective
Boards of Directors and shall be subject to the provisions of
Article 10 of the Merger Agreement.
2. Any notice or other communication required or
permitted under this Plan shall be given, and shall be
effective, in accordance with the provisions of the Merger
Agreement.
3. The headings of the several Articles herein are
inserted for convenience of reference only and are not intended
to be a part of or to affect the meaning or interpretation of
this Plan.
4. This Plan may be executed in several counterparts,
each of which shall be deemed the original, but all of which
together shall constitute one and the same instrument.
5. This Plan shall be governed by and construed in
accordance with the laws of the State of Tennessee applicable to
agreements made and entirely to be performed in such state,
except to the extent federal law may be applicable.
5-7
IN WITNESS WHEREOF, the parties hereto have caused this
Plan to be executed in counterparts by their duly authorized
officers and their corporate seals to be hereunto affixed and
attested by their officers thereunto duly authorized, all as of
the day and year first above written.
ATTEST: CITCO COMMUNITY BANCSHARES,
INC.
__________________________ By: ___________________________
Secretary
Title:_________________________
ATTEST: TWIN CITY BANCORP, INC.
__________________________ By: ___________________________
Secretary
Title:_________________________
5-8
EXHIBIT 6
Reserved
6-1
EXHIBIT 7
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT (the "Option Agreement") is
made and entered into this ____ day of _______, 2000, between
Twin City Bancorp, Inc., a Tennessee corporation ("TCB"), whose
principal offices are at 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxx
00000; and Citco Community Bancshares, Inc., a Tennessee
corporation ("Citco"), whose principal offices are at 000 Xxxxx
Xxxxxx, Xxxxxxxxxxxx, Xxxxxxxxx 00000.
W I T N E S S E T H:
WHEREAS, TCB and Citco are parties to the Agreement and
Plan of Merger dated ___________________, 2000 (the "Merger
Agreement") and terms not otherwise defined herein are as
defined in the Merger Agreement.
NOW, THEREFORE, in consideration of the premises, mutual
covenants and agreements contained herein and in the Merger
Agreement, and for the purpose of protecting the interests of
Citco in proceeding with the Merger, the parties hereto agree as
follows:
1. Option. Subject to the terms and conditions set
------
forth in this Option Agreement, TCB hereby grants to Citco an
irrevocable option ("Option") to purchase up to 223,156 shares
("Option Shares") of Common Stock, $1.00 par value, of TCB
("Shares"), being 19.9% of the number of Shares outstanding on
the date of this Agreement before such issuance, at a purchase
price of $15.50 per Option Share (such price, as adjusted as
applicable, the "Purchase Price"). The number of Option Shares
that may be received upon the exercise of the Option and the
Purchase Price are subject to adjustment and other conditions as
follows:
(a) If not in Material breach of the Merger
Agreement and provided that no preliminary or permanent
injunction or other order against delivery of the Option Shares
issued by any court of competent jurisdiction shall be in
effect, Citco may exercise the Option, in whole or in part, at
any time or from time to time following the occurrence of a
Purchase Event (as defined below); provided that, except as
otherwise provided in this Option Agreement, the Option shall
terminate and be of no further force and effect upon the
earliest to occur of (i) the Effective Time, (ii) 15 months
after the first occurrence of a Purchase Event (or if, at the
expiration of such 15 months, after the first occurrence of a
Purchase Event, the Option cannot be exercised by reason of any
applicable judgement, decree, order, law, or regulation, thirty
(30) business days after such impediment to exercise shall have
been removed), or (iii) 18 months after the date of this
Agreement, although in the event a court or regulatory authority
order is in place that would prevent the exercise of the Option,
such date shall be extended for the period that such order is in
place. Termination of the Option shall not effect any rights
under the Merger Agreement which by their terms extend beyond
the date of such termination. As used herein, a "Purchase
Event" means the termination of this Agreement under any
circumstance which would or could entitle Citco to terminate
this Agreement pursuant to Sections 10.1 (b), (c), (d)(ii), or
(f) of the Merger Agreement; provided, that a Purchase Event
shall not occur unless and until TCB shall have entered into a
definitive agreement
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with a third party with respect to an Acquisition Proposal or an
Acquisition Proposal shall have been consummated during the 12
months following such termination of this Agreement.
(b) In the event Citco wishes to exercise the
Option, it shall send written notice to TCB of the date of the
closing of the exercise, which shall be not later than 20
business days from the date of the notice; provided, that such
closing shall be held only if (i) such purchase would not
otherwise violate or cause the violation of any applicable law,
rule, or regulation or any restraining order injunction, decree
or ruling issued by court or other governmental authority
prohibiting the delivery of such Option Shares, and (ii) any
prior notification to or approval of any regulatory authority
required in connection with such purchase shall have been made
or obtained. If the closing cannot be consummated by reason of
the restrictions set forth in this paragraph, the closing shall
be held within 10 days following the elimination of such
restriction.
2. Reserved Shares. TCB hereby represents and warrants
---------------
to Citco that it is taking all necessary corporate and other
action to authorize and reserve and permit it to issue, and will
have reserved issuance at all times from the date of this Option
Agreement until the obligation to deliver Shares upon the
exercise of the Option terminates, upon exercise of Option,
Shares necessary for Citco to exercise the Option, and TCB will
take all necessary corporate action to authorize and reserve for
issuance all additional Shares or other securities which may be
issued pursuant to any change in the capitalization of TCB. The
shares to be issued upon due exercise of the Option, including
all additional Shares or other securities which may be issuable
upon exercise of Option pursuant to any change in
capitalization, upon issuance pursuant to this Option Agreement,
shall be duly issued, fully paid and non assessable, and shall
be delivered free and clear of all liens, including any pre-
emptive rights of any shareholder of TCB. In the event of any
recapitalization of TCB, appropriate adjustments will be made in
the Option Shares.
3. Repurchase. Not withstanding the other provisions
----------
of this Option Agreement, at any time commencing upon the first
occurrence of a Repurchase Event (as defined below) and ending
12 months thereafter, TCB (or any successor entity) shall:
(a) At the request of Citco, repurchase from Citco
the Option (if and to the extent not previously exercised or
terminated) at a price equal to the excess, if any, of (x) the
Applicable Price (as defined below) as of the Request Date (as
defined below) for a Share over (y) the Purchase Price (subject
to adjustment for any recapitalizations as described above),
multiplied by the number of Shares with respect to which the
Option had not been exercised (the "Option Repurchase Price");
and
(b) At the request of Citco, from time to time,
repurchase, all but not less than all of the Option Shares owned
directly or indirectly by Citco at a price equal to the
Applicable Price as of the Request Date multiplied by number of
Option Shares owned directly or indirectly by Citco (the "Option
Share Repurchase Price").
At any time following the occurrence of Purchase Event, TCB (or
any successor entity) may at its election, repurchase the Option
(if and to the extent not previously exercised or terminated) or
all but not less than all of the Option Shares at the Option
Repurchase Price or the Option Share Repurchase Price, as the
case may be. Any repurchase contemplated in this Option
Agreement shall
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be subject to receipt of any necessary regulatory approvals for
which the Parties shall use their reasonable efforts to obtain
promptly.
4. Definitions. For purposes of this Option
-----------
Agreement, the following terms have the following meanings:
(a) "Acquisition Proposal" with respect to a Party
shall mean any tender offer or exchange offer for more than 25%
of the outstanding equity securities of such Party or any
proposal for a merger, acquisition of all of the stock or Assets
of, or other business combination involving such Party or any of
its Subsidiaries or the acquisition of 25% equity interest in,
or 25% of the Assets of, such Party or any of its Subsidiaries.
(b) "Applicable Price" as of any date means the
highest of (A) the highest price per Share paid pursuant to a
tender offer or exchange offer for Shares after the date of this
Agreement and on or prior to such date, (B) the highest price
per Share to be paid by any third party for Shares and each case
pursuant to an agreement with respect to an Acquisition Proposal
with TCB entered into on or prior to such date, or (C) the
highest bid price per Share as quoted on the National
Association of Securities Dealers Automated Quotations System,
or, if the Shares are not quoted thereon, on the principal
trading market on which the Shares are traded as reported by a
recognized source during the 60 days preceding such date. If
the consideration to be offered, paid, or received pursuant to
the foregoing clauses (A) or (B) shall be other than in cash,
the value of such consideration shall be determined in good
faith by an independent nationally recognized investment banking
firm selected by Citco and reasonably acceptable to TCB.
(c) "Repurchase Event" means the date that Citco
is entitled to terminate the Merger Agreement pursuant to
Sections 10.1 (b), (c), (d)(ii), or (f); provided, that a
Repurchase Event shall not occur unless and until TCB shall have
entered into a definitive agreement with a third party with
respect to an Acquisition Proposal or an Acquisition Proposal
shall have been consummated during the 12-month period following
such date.
(d) "Request Date" means the date on which TCB or
Citco, as the case may be, exercises its rights under this
Option Agreement.
5. Registration Rights. TCB shall, if requested by
-------------------
Citco at any time and from time to time within two years of the
first exercise of the Option, as expeditiously as possible,
prepare and file up to two registration statements under the
1933 Act if such registration is necessary in order to permit
the sale or other disposition of any or all Shares that have
been acquired by or are issuable to Citco upon exercise Option
in accordance with the intended method of sale or other
disposition stated by Citco, including a "shelf" registration
statement under Rule 415 under the 1933 Act or any successor
provision, and TCB shall use all reasonable efforts to qualify
such shares or other securities under any applicable state
securities laws. Any registration statement prepared and filed
under this Option Agreement shall be at TCB's expense except for
underwriting discounts or commissions, brokers' fees, and the
reasonable fees and disbursements of Citco's counsel related
thereto. TCB also will take reasonable efforts to list such
shares on any securities exchange or market where TCB's shares
are traded.
7-3
6. Representation of Citco. This Option is not being,
-----------------------
and any Option Shares or other securities acquired by Citco upon
exercise of the Option will not be, acquired with a view to the
public distribution thereof and will not be transferred or
otherwise disposed of except in a transaction registered or
exempt from registration under the Securities Laws.
7. Amendment. This Option Agreement may be amended or
---------
supplemented at any time by mutual agreement of TCB and Citco.
Any such amendment or supplement must be in writing and approved
by their respective Boards of Directors and shall be subject to
the provisions of Article 10 of the Merger Agreement.
8. Entire Agreement. This Option Agreement, together
----------------
with the Merger Agreement, constitutes the entire agreement
between the Parties hereto with respect thereto, written or
oral. Nothing in this Option 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 Option Agreement.
9. Assignment. Neither this Option 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 Option Agreement will be
binding upon, inure to the benefit of, and be enforceable by the
Parties and their respective successors and assigns.
10. Governing Law. This Option Agreement shall be
-------------
governed by and construed in accordance with the laws of the
State of Tennessee applicable to agreements made and entirely to
be performed in such state, except to the extent federal law may
be applicable.
IN WITNESS WHEREOF, the parties hereto have caused this
Option Agreement to be executed in counterparts by their duly
authorized officers and their corporate seals to be hereunto
affixed and attested by their officers thereunto duly
authorized, all as of the day and year first above written.
CITCO COMMUNITY BANCSHARES, INC.
By: ____________________________
Title:__________________________
TWIN CITY BANCORP, INC.
By: ____________________________
Title:__________________________
7-4
EXHIBIT 8
AMENDMENT TO SEVERANCE AGREEMENT
--------------------------------
THIS AMENDMENT is entered into this ___ day of _____, 2000,
by and between Citizens Bank of Elizabethton (the "Bank") and
_______ (the "Employee"), effective on the date of the merger of
Twin City Bancorp, Inc. ("TCB") with and into Citco Community
Bancshares, Inc. (the "Merger").
WHEREAS, the Employee is currently employed by Twin City
Federal Savings Bank ("TCF") as [Executive/Senior] Vice
President and is party to a Severance Agreement, dated April 28,
1995 and renewed February 1, 2000, with TCF (the "Severance
Agreement") which provides, among other things, for certain
payments to the Employee in the event his employment is
terminated under certain circumstances in connection with or
within twelve months following a "change in control"; and
WHEREAS, the Bank is party to that certain Agreement and
Plan of Merger, dated July __, 2000 (the "Merger Agreement")
pursuant to which a "change in control" of TCF within the
meaning of Section 1(a) of the Severance Agreement shall occur
and the Bank shall become the successor to TCF; and
WHEREAS, the Bank desires, upon becoming successor to TCF,
to retain the services of the Employee as [Executive/Senior]
Vice President following the Merger with the duties and
responsibilities set forth in the Job Description attached as
Exhibit A hereto and to provide the Employee with protection in
the event of a subsequent change in control of the Bank; and
WHEREAS, it is the desire of the parties to set forth their
understanding that employment on such terms herein shall not
trigger the payments provided under the Severance Agreement and
to confirm their respective rights and obligations following the
Merger.
NOW, THEREFORE, IT IS AGREED upon Bank becoming successor
to TCF as follows:
1. Terms of Employment.
-------------------
The Bank agrees to employ the Employee as [Executive/
Senior] Vice President with the duties and responsibilities
described in the Job Description attached as Exhibit A hereto.
Employee agrees that the assignment to the Employee of the
duties and responsibilities as described in Exhibit A hereto:
(i) shall not constitute the assignment of duties and
responsibilities other than those normally associated with his
position referenced in the recitals introducing the Severance
Agreement within the meaning of Section 1(b)(iv) of the
Severance Agreement; (ii) shall not result in a material
diminution or reduction of the Employee's responsibilities or
authority (including reporting responsibilities) in connection
with his employment within the meaning of Section 1(b)(vi) of
the Severance Agreement; and (iii) provides benefits
substantially similar to those provided by TCF.
2. Rights of Employee.
------------------
The Bank expressly agrees and acknowledges that the Merger
will constitute a change in control within the meaning of
Section 1(a) of the Severance Agreement. Concurrently, the Bank
8-1
and the Employee expressly agree and acknowledge that the
"change in control" as a result of the Merger shall not trigger,
or cause to trigger, payment under the Severance Agreement in
and of itself. The Bank and the Employee agree that in the
event there is a material change in the Employee's duties and
responsibilities from those described in Exhibit A during the
twelve (12) months following the effective date of the Merger,
the Employee shall be entitled to the payment provided for in
Section 1 of the Severance Agreement (unless such change in
duties has been expressly agreed to by Employee).
3. Subsequent Change in Control.
----------------------------
The Bank agrees that upon a change in control of the Bank
following the Merger, the Employee shall be entitled to receive
the termination payment provided for in Section 1 of the
Severance Agreement subject to the terms and conditions therein
provided that no transfer of shares of the Bank or of any
company controlling the Bank by any of the XxXxxxx Brothers to
another entity controlled by them will constitute a change in
control under Section 1(a) thereof even if such transfer
involves 25% of more of the voting stock of the Bank or such
company;
4. Additional Agreements.
---------------------
The Bank hereby agrees to assume all other obligations of
TCF under the Severance Agreement and Employee expressly
acknowledges the current and prospective responsibilities and
covenants under the Severance Agreement subject to the following
changes to which the Employee hereby agrees: (i) the automatic
eighteen (18) month extension of the Severance Agreement upon a
change in control shall begin on the effective date of the
Merger; (ii) the term of the Severance Agreement shall not be
extended by the Board pursuant to Section 2 thereof without the
written consent of the Employee; and (iii) all references to the
Director of the Office of Thrift Supervision and OTS in Section
3 of Severance Agreement are amended to refer to the Tennessee
Commissioner of Banking and other applicable regulatory
authorities. All other terms of the Severance Agreement shall
remain in effect. This Agreement and the Severance Agreement
shall constitute the entire agreement of the parties with
respect to the subject matter thereof.
IN WITNESS WHEREOF, the parties have executed this
Agreement on the day and year first hereinabove written.
ATTEST: CITIZENS BANK OF ELIZABETHTON
_______________________ By: ____________________________
Secretary Chairman of the Board
WITNESS:
_______________________ __________________________________
Employee
8-2
