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THIRD AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION
This Third Amendment to Agreement and Plan of Reorganization is made and
entered into this 26th day of January, 1998 by and between First Citizens Banc
Corp ("First Citizens") and The Farmers State Bank of New Washington, Ohio
("Farmers").
WHEREAS, First Citizens and Farmers have entered into an Agreement and Plan
of Reorganization dated July 3, 1997, as amended November 25, 1997 and November
26, 1997, respectively (as amended, the "Reorganization Agreement"), providing
for the merger ("Merger") of Farmers Interim Bank, a wholly-owned subsidiary of
First Citizens, with and into Farmers; and
WHEREAS, the Reorganization Agreement is terminable by either party upon
written notice to the other party in the event that the Merger is not
consummated by February 28, 1998 ("Right of Termination Date");
WHEREAS, the parties desire to amend the Reorganization Agreement to extend
the Right of Termination Date to April 30, 1998.
NOW THEREFORE, in consideration of the foregoing and the mutual agreements
set forth herein, the parties agree as follows:
1. The last sentence of Section 17(a) of the Reorganization Agreement is
hereby amended to read as follows:
"In addition to the other grounds for termination of this
Agreement set forth herein, this Agreement can be terminated
by written notice by either party to the other, in each case
authorized by its Board of Directors, if the Merger shall not
have been consummated by April 30, 1998, or the date of such
notice, whichever is later."
2. Notwithstanding anything to the contrary in the Reorganization Agreement
or in any other instrument or agreement executed and delivered by First Citizens
or Farmers, the Right of Termination Date shall be April 30, 1998.
3. Except as provided herein, the Reorganization Agreement shall remain in
full force and effect and the remaining provisions thereof are hereby ratified
and confirmed.
4. Each of the parties shall execute such documents and take such further
actions as may be reasonably required or desirable to carry out the provisions
of this Third Amendment to Agreement and Plan of Reorganization.
IN WITNESS WHEREOF, the parties have executed this Third Amendment to
Agreement and Plan of Reorganization as of the date and year first above
written.
THE FARMERS STATE BANK OF NEW
FIRST CITIZENS BANC CORP WASHINGTON, OHIO
/s/ XXXXX X. XXXXXX /s/ XXXXXXX XXXXXXXX
---------------------------------- -----------------------------------
Xxxxx X. Xxxxxx, President Xxxxxxx Xxxxxxxx, Interim President
and Chief Executive Officer
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SECOND AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION
This Second Amendment to Agreement and Plan of Reorganization is made and
entered into this 26th day of November, 1997 by and between First Citizens Banc
Corp ("First Citizens") and The Farmers State Bank of New Washington, Ohio
("Farmers").
WHEREAS, First Citizens and Farmers have entered into an Agreement and Plan
of Reorganization dated July 3, 1997 ("Reorganization Agreement"), providing for
the merger ("Merger") of Farmers Interim Bank, a wholly-owned subsidiary of
First Citizens, with and into Farmers; and
WHEREAS, the Reorganization Agreement (i) provides for an exchange ratio of
6.5 shares of First Citizens Common Stock for each share of Farmers Common Stock
(the "Exchange Ratio"), (ii) requires the Merger to be consummated within a
specified period after the occurrence of certain events ("Consummation
Deadline") and (iii) is terminable by either party upon written notice to the
other party in the event that the Merger is not consummated by February 1, 1998
("Right of Termination Date");
WHEREAS, the parties desire to amend the Reorganization Agreement to (i)
change the Exchange Ratio to 6.06, (ii) eliminate the Consummation Deadline and
(iii) extend the Right of Termination Date to February 28, 1998.
NOW THEREFORE, in consideration of the foregoing and the mutual agreements
set forth herein, the parties agree as follows:
1. The last sentence of Section 1 of the Reorganization Agreement is hereby
amended to read as follows:
"Upon consummation of the Merger, each share of Farmers Common Stock (other
than Dissenter Shares, as defined in Section 5) shall be converted into the
right to receive 6.06 duly authorized, validly issued, fully paid and
non-assessable First Citizens Common Shares, in accordance with the
provisions regarding the
exchange of shares set forth in the Merger Agreement."
2. The last sentence of Section 4(e) of the Reorganization Agreement is
hereby deleted in its entirety.
3. The last sentence of Section 17(a) of the Reorganization Agreement is
hereby amended to read as follows:
"In addition to the other grounds for termination of this Agreement set
forth herein, this Agreement can be terminated by written notice by either
party to the other, in each case authorized by its Board of Directors, if
the Merger shall not have been consummated by February 28, 1998, or the
date of such notice, whichever is later."
4. Notwithstanding anything to the contrary in the Reorganization Agreement
or in any other instrument or agreement executed and delivered by First Citizens
or Farmers, the Right of Termination Date shall be February 28, 1998.
5. Except as provided herein, the Reorganization Agreement shall remain in
full force and effect and the remaining provisions thereof are hereby ratified
and confirmed.
6. Each of the parties shall execute such documents and take such further
actions as may be reasonably required or desirable to carry out the provisions
of this Amendment to Agreement and Plan of Reorganization.
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EXHIBIT NO. 10ii
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IN WITNESS WHEREOF, the parties have executed this Amendment to Agreement
and Plan of Reorganization as of the date and year first above written.
FIRST CITIZENS BANC CORP
/s/ XXXXX X. XXXXXX
----------------------------------------
Xxxxx X. Xxxxxx, President
THE FARMERS STATE BANK OF NEW
WASHINGTON, OHIO
/s/ XXXXXXX XXXXXXXX
----------------------------------------
Xxxxxxx Xxxxxxxx, Executive Vice
President
and Chief Executive Officer
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AMENDMENT NO. 1 TO AGREEMENT AND PLAN OF REORGANIZATION
THIS AMENDMENT TO AGREEMENT AND PLAN OF REORGANIZATION dated July 3, 1997
between First Citizens Banc Corp (hereinafter called "First Citizens") and The
Farmers State Bank (hereinafter called "Farmers"), dated November 25, 1997;
WITNESSETH:
First Citizens and Farmers have determined that it will be in their mutual
best interests to amend Agreement to provide that the effective date of the
Merger, provided for in said Agreement, shall be not earlier than February 28,
1998.
THEREFORE, in consideration of the mutual covenants and agreements herein
contained, First Citizens and Farmers hereby agree as follows:
(1) Paragraph 4.(e) of Agreement shall be amended to read as follows:
"(e) After (i) receipt of the Board's prior approval of First Citizens'
acquisition of Farmers; (ii) the approval of the Stockholders of
Farmers and First Citizens; and (iii) the regulatory waiting period(s)
have expired, First Citizens shall designate the date as of which
First Citizens desires the Merger to become effective and the time the
Merger shall become effective shall occur at the time and on the date
so designated. However, any date so specified unless otherwise agreed
to by Farmers and First Citizens, shall not be later than either (a)
the first of the month immediately following the month in which the
last of the events described above (i-iii) occurs if said event occurs
before the twenty first day of such month or (b) the first day of the
second month immediately following such month if the last of the
events described above occurs after the twentieth day of such month;
provided, however, that in no event, shall such date so specified be
earlier than February 28, 1998."
(2) In all respects, Agreement is hereby ratified and confirmed.
IN WITNESS WHEREOF, the Amendment to Agreement has been executed the day
and year first above written.
SIGNED IN THE PRESENCE OF: FIRST CITIZENS BANC CORP
[illegible] By: /s/ XXXXX XXXXXX
--------------------------------------------- ------------------------------------------
Witness Xxxxx Xxxxxx, President
[illegible]
---------------------------------------------
Witness
THE FARMERS STATE BANK
[illegible] By: /s/ XXXXXXX XXXXXXXX
--------------------------------------------- ------------------------------------------
Witness Xxxxxxx Xxxxxxxx,
Executive Vice President
[illegible]
---------------------------------------------
Witness
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AGREEMENT AND PLAN OF REORGANIZATION
This is an AGREEMENT dated July 3, 1997, between First Citizens Banc Corp.
(hereinafter called "First Citizens") and The Farmers State Bank (hereinafter
called "Farmers").
WITNESSETH:
First Citizens is a corporation duly organized under the laws of the State
of Ohio. Its principal office is located at 000 Xxxx Xxxxx Xx., Xxxxxxxx, Xxxx.
As of the date hereof, First Citizens had authorized capital stock consisting of
10,000,000 shares of common stock, without par value ("First Citizens Common
Shares") of which a total of 3,051,504 shares are issued and outstanding and
none are shares of treasury stock owned by First Citizens. First Citizens owns
all of the outstanding capital stock of The Castalia Banking Company, The
Citizens Banking Company, X. X. Xxxxxxxx Appraisal Service, Inc. and SCC
Resources, Inc. (hereinafter referred to as the "Subsidiaries").
Farmers is an Ohio state banking corporation duly organized under the laws
of the State of Ohio. Its principal office is located at 102 X. Xxxxxx St., New
Washington, Xxxxxxxx County, Ohio. As of the date hereof, Farmers has authorized
capital stock consisting of 200,000 authorized shares of common stock, $20 par
value per share ("Farmers Common Stock"), all of which shares are issued and
outstanding and none are shares of treasury stock owned by Farmers.
At least a majority of the entire Board of Directors of First Citizens and
at least a majority of the entire Board of Directors of Farmers, respectively,
have approved the entering into of this Agreement and have authorized the
execution and delivery of this Agreement. The Boards of Directors of First
Citizens and Farmers have determined that it is in the best interests of their
respective corporations and Stockholders that Farmers become a wholly owned
subsidiary corporation of First Citizens. After the execution of this Agreement,
First Citizens will undertake to cause the formation of a new banking
corporation to be organized under the laws of the State of Ohio ("New Bank"),
and thereafter First Citizens and Farmers will cause, subject to the terms and
conditions set forth in this Agreement, the merger of New Bank with and into
Farmers, in accordance with the terms set forth in the Merger Agreement attached
hereto and designated Appendix A (the "Merger Agreement"). From and after the
time the merger of Farmers and New Bank shall become effective, (the "Merger")
and as and when required by this Agreement and the Merger Agreement, First
Citizens will issue its Common Shares in exchange for all of the issued and
outstanding shares of Farmers Common Stock.
In consideration of mutual covenants and agreements herein contained, First
Citizens and Farmers hereby make this Agreement and prescribe the terms and
conditions of the Merger and the mode of carrying the Merger into effect as
follows:
1. Formation of New Bank. As soon as practicable after the date
hereof, First Citizens shall commence and proceed with due diligence in the
formation of the New Bank, all of the outstanding shares of which will be
acquired by First Citizens prior to the merger of Farmers and the New Bank.
The New Bank will merge with and into Farmers as the surviving bank
corporation thereof, pursuant to the Merger Agreement. Upon consummation of
the Merger, each share of Farmers Common Stock, (other than Dissenter
Shares, as defined in Section 5) shall be converted into the right to
receive 6.5 duly authorized, validly issued, fully paid and non-assessable
First Citizens Common Shares, in accordance with the provisions regarding
the exchange of shares set forth in the Merger Agreement.
2. The Merger Agreement. Promptly following the commencement of the
corporate existence of the New Bank, Farmers and First Citizens shall enter
into, and First Citizens shall cause the New Bank to enter into, the Merger
Agreement.
3. Discussions with Others; Other Offers. On and after the date
hereof, except with the written consent of First Citizens, Farmers shall
not directly or indirectly solicit or encourage (nor shall Farmers permit
any of its officers, directors, employees or agents directly or indirectly
to solicit or encourage), including by way of furnishing information, any
inquiries or proposals for a merger, consolidation, share exchange or
similar transaction involving Farmers or for the acquisition of the stock
or all or substantially all
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of the assets or business of Farmers, or discuss with or enter into
conversations with any person, other than Farmers stockholders or
employees, concerning any such merger, consolidation, share exchange,
acquisition or other transaction, other than the share exchange with First
Citizens; provided, however, that Farmers may communicate information about
any such proposals or inquiries to its stockholders if and to the extent
that it is required to do so in order to reasonably comply with its legal
obligations. Farmers will promptly notify First Citizens orally (to be
confirmed in writing as soon as practicable thereafter) of all of the
relevant details relating to any inquiries or proposals that it may receive
relating to any such matters, including actions it intends to take with
respect to such matters.
In order to induce First Citizens to enter into this Agreement and
incur the substantial expenses involved in effectuating the transactions
contemplated herein, Farmers agrees and does hereby promise to pay to First
Citizens the sum of $500,000, upon First Citizens' demand therefor, in the
event that the Farmers stockholders fail to approve this Agreement or the
Merger Agreement as a result of Xxxxxx'x decision to entertain offers from
and negotiate with a bona fide offeree other than First Citizens.
4. Undertakings of the Parties. First Citizens and Farmers further
covenant and agree as follows:
(a) As soon as the Registration Statement referenced in (c) below
shall become effective, this Agreement and the Merger Agreement shall be
submitted to the Stockholders of Farmers for approval and adoption at a
special meeting of Stockholders to be called and held in accordance with
law and the Articles of Incorporation and Code of Regulations of
Farmers.
(b) As promptly as possible after the date hereof, each of First
Citizens and Farmers shall use its best efforts, separately and jointly
with the other party, in good faith to take or cause to be taken all
such steps as shall be necessary or advisable to obtain all consents and
approvals of governmental authorities as are required by law or
otherwise to effect the share exchange, including without limitation the
approval of the Federal Reserve Board (the "Board"), the approval of the
Ohio Department of Commerce (Division of Financial Institutions Office
of Banks and Savings & Loans) and the approval of the Federal Deposit
Insurance Corporation, and shall do any and all acts and things
reasonably necessary or advisable in order to cause the share exchange
to be consummated on the terms provided in this Agreement and the Merger
Agreement as promptly as practicable. First Citizens and Farmers will
cooperate in complying with and in the preparation of proxy and
registration statements under federal and state securities laws so as to
facilitate the exchange of shares as contemplated by this Agreement and
the Merger Agreement.
(c) Each party will assume and pay all of its fees and expenses
incurred by it incident to the negotiation, preparation and execution of
this Agreement, obtaining of the requisite regulatory and shareholder
consents and approvals and all other acts incidental to, contemplated by
or in pursuance of this Agreement. First Citizens shall be responsible
for preparing and filing at no expense to Farmers: (i) any and all
required regulatory applications necessary in connection with the
transactions contemplated by this Agreement; and (ii) an S-4
Registration Statement to be filed with the Securities and Exchange
Commission to register the First Citizens Common Shares to be issued in
connection with the transactions contemplated by this Agreement;
provided, however, that such registration statement will not cover
resales by any persons who may be considered "underwriters" under Rule
145(c) of the Securities Act of 1933, as amended (the "1933 Act") and
(iii) any documents to be filed or action required to be taken under any
applicable state securities or "Blue Sky" laws in connection with the
Merger.
(d) Between the date of this Agreement and the effective time of
the Merger, Farmers will afford to the representatives of First
Citizens, including its counsel and auditors, during normal business
hours, full access to any and all assets of, or information with respect
to, Farmers to the end that First Citizens may have full opportunity to
make an investigation, in advance of the effective time as it shall
reasonably desire in order to effectuate the purposes of this Agreement.
To the extent reasonable under the circumstances, the officers of
Farmers will confer with the representatives of First Citizens and will
furnish to First Citizens either orally or by means of such records,
documents, and memoranda as are reasonably available or capable of
preparation (all of which First Citizens will be permitted to make
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copies of) and such other information as First Citizens may reasonably
request. All information furnished by one party to another party in
connection with this Agreement and the transactions contemplated hereby
will be kept confidential by such other party and will be used only in
connection with this Agreement and the transactions contemplated hereby,
except to the extent that such information: (i) is already known to such
other party when received; (ii) thereafter becomes lawfully obtainable
from other sources; or (iii) is required to be disclosed in any document
filed with the Securities and Exchange Commission, the Board, or any
other governmental agency or authority. In the event that this Agreement
is terminated, each party will return to the other party or destroy any
documents received by it from the other party that contain any such
confidential information.
(e) After (i) receipt of the Board's prior approval of First
Citizens' acquisition of Farmers; (ii) the approval of the Stockholders
of Farmers and First Citizens; and (iii) the regulatory waiting
period(s) have expired, First Citizens shall designate the date as of
which First Citizens desires the Merger to become effective and the time
the Merger shall become effective shall occur at the time and on the
date so designated. However, any date so specified unless otherwise
agreed to by Farmers and First Citizens, shall not be later than either
(a) the first of the month immediately following the month in which the
last of the events described above (i-iii) occurs if said event occurs
before the twenty-first day of such month or (b) the first day of the
second month immediately following such month if the last of the events
described above occurs after the twentieth day of such month.
(f) Subject to the terms and conditions of this Agreement, First
Citizens and Farmers each agree that, subject to applicable laws and to
the fiduciary duties of its respective directors, each will promptly
take or cause to be taken all action, and promptly do or cause to be
done all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the Merger and other
transactions contemplated by this Agreement.
(g) First Citizens shall offer the existing employees of Farmers
the opportunity to become employees of Farmers (i.e. the surviving
corporation under the Merger Agreement) following consummation of the
Merger; provided, however, that nothing in this section or elsewhere in
this Agreement shall be deemed to be a contract of employment or be
construed to give said employees any rights other than as employees at
will under Ohio law and said employees shall not be deemed to be
third-party beneficiaries of this provision. Farmers' employees who
become employees of Farmers after the Merger will have their years of
service credited toward eligibility and vesting in Pension Plan for the
Employees of First Citizens Banc Corp. and its Affiliates and the
Savings and Retirement Plan for First Citizens Banc Corp. and its
Affiliates and will be entitled to participate in a variety of on-going
educational and training programs offered by First Citizens and its
Subsidiaries.
(h) Farmers shall, prior to the time the Merger shall become
effective, take such actions, in consultation with First Citizens, as
shall be necessary or desirable to cause termination of any qualified
retirement plans of Farmers at or after the effective date of Merger.
(i) Two (2) member(s) of Farmers' current Board of Directors shall
have the right to serve on the Board of Directors of First Citizens.
Farmers hereby agrees to cause its Board of Directors to provide First
Citizens, at least seventy-five (75) days prior to the annual meeting of
First Citizens, with nominees, subject to First Citizens' approval, to
serve as directors of First Citizens effective at or prior to First
Citizens' 1998 annual shareholder meeting. Pursuant to the Merger
Agreement, all of the current directors of Farmers shall continue as
directors thereof after the Merger.
(j) First Citizens and Farmers acknowledge that the transactions
contemplated hereby are subject to the provisions of the Securities Act
of 1933, as amended (the "Act") and Rule 145 thereunder. First Citizens
agrees to prepare and file, as soon as practicable after the execution
of this Agreement, the Registration Statement under and pursuant to the
provisions of the Act for the purposes of registering the First Citizens
Common Shares to be issued in connection with the transactions
contemplated hereby. Farmers agrees to provide promptly to First
Citizens information concerning the business and financial condition and
affairs of Farmers as may be required or appropriate for inclusion in
the Registration Statement and to cause its counsel and auditors to
cooperate with First Citizens counsel
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and auditors in the preparation of such Registration Statement. First
Citizens agrees to use its best efforts to have such Registration
Statement declared effective under the Act as soon as may be
practicable, and Farmers agrees to distribute the prospectus/proxy
statement (to be prepared by and furnished at First Citizen's expense)
contained in such Registration Statement (the Farmers "Prospectus/Proxy
Statement") to Farmers stockholders not less than ten (10) days prior to
the scheduled meeting of Farmers stockholders that will be held to
consider approval of this Agreement and the Merger Agreement. Except to
the extent permitted by Rule 145(b), First Citizens and Farmers agree
not to publish any communication other than the Prospectus/Proxy
Statement, in respect of this Agreement, the Merger Agreement, or the
transactions contemplated therein. Any communication by either party
under Rule 145(b) will be made only upon the written approval of the
other. First Citizens and Farmers agree that, between the date the
Registration Statement becomes effective and the effective time of the
Merger, they will keep each other advised on a current basis of material
developments concerning their respective businesses, including any event
which would cause the Prospectus/proxy Statement to contain an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein not misleading. First Citizens
shall not be required to maintain the effectiveness of the Registration
Statement for the purpose of resale of First Citizens Common Shares by
Farmers stockholders who may be deemed to be affiliates of Farmers, as
such term is defined in Rule 144 promulgated under the Act (the
"Affiliates").
(k) Each Affiliate of Farmers shall furnish to First Citizens a
certificate representing that such Affiliate will not sell, assign, or
transfer any of the First Citizens Common Shares received by such
Affiliate as a result of the transactions contemplated by this
Agreement, except pursuant to (a) registration under the act or (b) a
transaction permitted by Rule 145 under the Act, or (c) a transaction in
which, in the opinion of Squire, Xxxxxxx & Xxxxxxx or other counsel
satisfactory to First Citizens, or in accordance with a "no action"
letter from the staff of the Securities and Exchange Commission, the
First Citizens Common Shares are not required to be registered under the
Act; and in the event of sale or other disposition pursuant to Rule 145
such Affiliate will supply satisfactory evidence of compliance with such
Rule to First Citizens. With respect to such representations, each
Affiliate shall agree to hold harmless and indemnify First Citizens and
First Citizens' officers and directors from and against any losses,
claims, damages, expenses (including reasonable attorneys' fees), or
liabilities to which First Citizens or any officer or director of First
Citizens may become subject under the Act or otherwise as a result of
the untruth, breach, or failure of such representations. Each Affiliate
shall further agree that the certificate or certificates representing
the First Citizens Common Shares issued to such Affiliate upon the
consummation of the Share Exchange may bear the following restrictive
legend:
"The shares represented by this certificate have been
issued or transferred to the registered holder as a
result of a transaction to which Rule 145 under the
Securities Act of 1933, as amended (the "Act"), applies.
The shares represented by this certificate may not be
sold, transferred or assigned, and the issuer shall not
be required to give effect to any attempted sale,
transfer or assignment, except pursuant to (i) current
registration under the Act, (ii) a transaction permitted
by Rule 145 and as to which the issuer has received
reasonable and satisfactory evidence of compliance with
the provisions of Rule 145, or (iii) a transaction in
which, in the opinion of Squire, Xxxxxxx & Xxxxxxx or
other counsel satisfactory to the issuer or in accordance
with a "no action" letter from the staff of the
Securities and Exchange Commission, such shares are not
required to be registered under the Act."
First Citizens covenants and agrees to remove the foregoing
restrictive legend from the certificate or certificates representing the
First Citizens Common Shares issued to an Affiliate and to cancel any
stop order instructions with respect thereto upon (i) receipt of advice
from its counsel that such actions are appropriate under the then
existing circumstances, or (ii) upon request of the holder thereof at
anytime after that period ending two years following the Merger,
provided that the holder thereof is not,
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and has not for at least the thirty day period ending prior to the
request been an affiliate of First Citizens.
(l) First Citizens shall, to the extent required by applicable
state securities or "blue sky" laws, as promptly as practicable after
the furnishing by Farmers of all information regarding Farmers required
or desirable to be reflected therein file with applicable state
securities or blue sky administrators, use its best efforts to cause to
become effective or be approved, all registration statements or
applications required to be so filed with respect to the issuance of the
First Citizens Common Shares in connection with the Agreement of Merger.
(m) On the date the Registration Statement becomes effective and at
the effective time of the Merger, Farmers shall deliver to First
Citizens a certificate signed by the principal executive officer and by
the principal financial officer of Farmers to the effect that the
information contained in the Registration Statement relating to the
business and financial condition and affairs of Farmers does not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
therein not misleading. On the date the Registration Statement becomes
effective and at the effective time of the Merger, First Citizens shall
deliver to Farmers a certificate signed by the chief executive officer
and by the chief financial officer of First Citizens to the effect that
the Registration Statement (other than the information contained therein
relating to the business and financial condition and affairs of Farmers)
does not contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein not misleading.
(n) First Citizens will maintain "current public information"
within the meaning of Rule 144 of the Securities and Exchange Commission
for two (2) years following the effective date.
5. Dissenting Stockholders. Holders of Farmers Common Stock, who do
not vote their shares in favor of the Merger and otherwise comply in all
respects to perfect dissenters' rights, will be entitled to dissenters' or
appraisal rights, if any, pursuant to and solely upon strict compliance
with, the applicable provisions of Ohio law (collectively, the "Dissenting
Shares").
6. Tax Opinion. Farmers, for the benefit of its Stockholders, shall
obtain a written opinion of it's counsel, to the effect that:
(a) The statutory merger of New Bank with and into Farmers will
constitute a reorganization within the meaning of Section 368(a)(1)(A)
and (a)(2)(E) of the Internal Revenue Code;
(b) No gain or loss will be recognized by Farmers as a consequence
of the transactions herein contemplated;
(c) No gain or loss will be recognized by the Stockholders of
Farmers on the exchange of their shares of Farmers Common Stock for
First Citizens Common Shares (disregarding for this purpose any cash
received for fractional share interests to which they may be entitled);
(d) The federal income tax basis of the First Citizens Common
Shares received by the Stockholders of Farmers for their shares of
Farmers Common Stock will be the same as the federal income tax basis of
the Farmers Common Stock surrendered in exchange therefor; and
(e) The holding period of the First Citizens Common Shares received
by a shareholder of Farmers in exchange for shares of Farmers Common
Stock will include the period for which the Farmers Common Stock
exchanged therefor was held, provided the exchanged Farmers Common Stock
was held as a capital asset by such shareholder on the date of the
exchange.
7. Representations and Warranties of First Citizens. First Citizens
represents and warrants to Farmers as follows:
(a) First Citizens is a corporation duly organized and validly
existing under the laws of the State of Ohio, is a registered bank
holding company under the Bank Holding Company Act of 1956, as amended,
and is qualified to do business in the State of Ohio, together with all
other jurisdictions where
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it is both required to so qualify and the failure to so qualify would
have material and adverse consequences to First Citizens. First Citizens
has full power and authority (including all licenses, franchises,
permits and other governmental authorizations which are legally
required) to engage in the businesses and activities now conducted by
it. As of March 31, 1997, the authorized capital stock of First Citizens
consisted of 10,000,000 shares of common stock, without par value, of
which a total of 3,051,504 shares were issued and outstanding and no
shares were held by First Citizens as treasury stock. All of said shares
of capital stock are fully paid and nonassessable and are not issued in
violation of the preemptive rights of any shareholder.
(b) First Citizens has furnished to Farmers copies of the following
financial statements relating to First Citizens and its consolidated
subsidiaries: (i) the audited Consolidated Balance Sheets of First
Citizens as of December 31, 1996, and 1995, and the Consolidated
Statements of Income, Stockholders' Equity and Statements of Cash Flows
for the three years ended December 31, 1996, 1995 and 1994, together
with the notes thereto; and (ii) the unaudited Consolidated Balance
Sheet of First Citizens as of March 31, 1997, and the unaudited
Consolidated Statements of Income and Stockholders' equity for the
period then ended. Each of the aforementioned financial statements was
prepared in accordance with Generally Accepted Accounting Principles,
consistently applied and is true and correct in all material respects
and together present fairly the consolidated financial position and
results of operations of First Citizens as of the dates and for the
periods therein set forth (subject, in the case of such interim
financial statements, to normal year-end audit adjustments). Such
financial statements do not, as of the dates thereof, include any
material asset or omit any material liability, absolute or contingent,
or other fact, the inclusion or omission of which renders such financial
statements, in light of the circumstances under which they were made,
misleading in any material respect. Since December 31, 1996, there has
not been any material adverse change in the financial condition, results
of operations, business or prospects of First Citizens and the
Subsidiaries on a consolidated basis.
(c) The Board of Directors of First Citizens has authorized
execution of this Agreement and the Merger Agreement and approved the
merger of the New Bank and Farmers as contemplated herein and therein.
First Citizens has all requisite power and authority to enter into this
Agreement and the Merger Agreement and First Citizens has the authority
to consummate the transactions contemplated hereby. This Agreement
constitutes the valid and legally binding obligation of First Citizens
and this Agreement and the consummation of the transactions contemplated
herein have been duly authorized and approved on behalf of First
Citizens by all requisite corporate action. Provided the required
approvals are obtained from the Board, neither the execution and
delivery of this Agreement or the Merger Agreement nor the consummation
of the Merger will conflict with, result in the breach of, constitute a
default under or accelerate the performance provided by the terms of any
law, or any rule or regulation of any governmental agency or authority
or any judgment, order or decree of any court or other governmental
agency to which First Citizens may be subject, any contract, agreement
or instrument to which First Citizens is a party or by which First
Citizens is bound or committed, or the Articles of Incorporation or Code
of Regulations of First Citizens, or constitute an event which with the
lapse of time or action by a third party, could, to the best of First
Citizens' knowledge, result in the default under any of the foregoing or
result in the creation of any lien, charge or encumbrance upon any of
the assets or properties of First Citizens or upon any of the stock of
First Citizens; except, however, in the case of contracts, agreements or
instruments, such defaults, conflicts or breaches which either (i) will
be cured or waived prior to the time the Merger becomes effective, or
(ii) if not so cured or waived would not, in the aggregate, have any
material adverse effect on the financial condition, results of
operations or business of First Citizens on a consolidated basis.
(d) There is no litigation, action, suit, investigation or
proceeding pending or, to the best of the knowledge after due inquiry of
First Citizens and its executive officers, threatened, against or
affecting First Citizens and/or the Subsidiaries or involving any of
their respective properties or assets, at law or in equity, before any
federal, state, municipal, local or other governmental authority,
involving a material amount which, if resolved adversely to the interest
of First Citizens and the Subsidiaries, would materially affect the
financial conditions or operations of First Citizens and the
Subsidiaries
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and/or its ability to perform under this Merger Agreement, and to the
best of the knowledge and belief after due inquiry of First Citizens and
its executive officers, no one has asserted and no one has reasonable or
valid grounds on which it reasonably can be expected that anyone will
assert any such claims against First Citizens and the Subsidiaries based
upon the wrongful action or inaction of First Citizens and the
Subsidiaries or any of their respective officers, directors or
employees.
(e) At the time the Merger shall become effective and on such
subsequent date when the former Stockholders of Farmers surrender their
Farmers share certificates for cancellation, the First Citizens Common
Shares to be received by Stockholders of Farmers will have been duly
authorized and validly issued by First Citizens and will be fully paid
and nonassessable.
(f) Except for a fee to XxXxxxxx & Company Securities, Inc., First
Citizens has not incurred and will not incur directly or indirectly any
liability for brokerage, finders', agents' or investment bankers' fees
or commissions in connection with this Agreement or the transactions
contemplated thereby.
(g) The Pension Plan for the Employees of First Citizens Banc Corp.
and its Affiliates and the Savings and Retirement Plan for First
Citizens Banc and its Affiliates (hereinafter referred to collectively
as the "plans") which purport to be qualified plans under Section 401(a)
of the Internal Revenue Code is so qualified and is in compliance in all
material respects with the applicable requirements of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"). All
material notices, reports and other filings required under applicable
law to be given or made to or with any governmental agency with respect
to the plans have been timely filed or delivered where failure to file
will result in a penalty or result in disqualification of the plan.
First Citizens has no knowledge either of any circumstances which would
adversely affect the qualifications of the plans or their compliance
with the applicable requirements of ERISA, or of any "reportable event"
(as such term is defined in Section 4043(b) of ERISA) or any "prohibited
transaction" (as such term is defined in Section 406 of ERISA and
Section 4975(c) of the Internal Revenue Code) which has occurred since
the date on which said section became applicable to the plans. With
respect to those plans which are defined benefit plans within the
meaning of ERISA, such plans meet the minimum funding standards set
forth in the Internal Revenue Code and ERISA.
(h) First Citizens has delivered to Farmers copies of the Annual
Report on Form 10-K filed with the Securities and Exchange Commission by
First Citizens for its fiscal years ended December 31, 1996, 1995, and
1994 including exhibits and all documents incorporated by reference
therein, and the proxy materials disseminated by First Citizens to its
Shareholders in connection with the 1997 Annual Meeting of Shareholders
of First Citizens. Such Annual Report and proxy materials do not
misstate a material fact or omit to state a material fact necessary in
order to make the statements contained therein, in light of the
circumstances under which they are made, not misleading.
(i) Since December 31, 1996, each of First Citizens and the
Subsidiaries has conducted business only in the ordinary course, and has
preserved its corporate existence, business and goodwill intact.
(j) First Citizens and the Subsidiaries each have good and
marketable title to all assets and properties, whether real or personal,
tangible or intangible, including without limitation the capital stock
of the Subsidiary Banks and all other assets and properties reflected in
First Citizens' Balance Sheet of December 31, 1996 or acquired
subsequent thereto (except to the extent that such assets and properties
have been disposed of for fair value in the ordinary course of business
since December 31, 1996) subject to no liens, mortgages, security
interests, encumbrances, pledges or charges of any kind, except: (i)
those items that secure liabilities that are reflected in said Balance
Sheet; (ii) statutory liens for taxes not yet delinquent; and (iii)
minor defects and irregularities in title and encumbrances which do not
materially impair the use thereof for the purposes for which they are
held; and such liens, mortgages, security interests, encumbrances and
charges are not in the aggregate, material to the assets and properties
of First Citizens. First Citizens or one of the Subsidiaries as lessee
has the contractual right under valid leases to occupy, use, possess and
control all material property leased by First Citizens or one of the
Subsidiaries.
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(k) To the best of the knowledge after due inquiry of First
Citizens and its executive officers, First Citizens and the Subsidiaries
have complied with all laws, regulations and orders applicable to them
and to the conduct of their respective businesses, including without
limitation, all statutes, rules and regulations pertaining to the
conduct of banking activities except for possible technical violations
which together with any penalty which results therefrom are or will be
of no material consequence to either First Citizens or the Subsidiaries.
Neither First Citizens nor any of the Subsidiaries is the subject of,
nor a party to, any regulatory action or agreement such as letter
agreements, memorandum of understanding, cease and desist orders or like
agreements. Neither First Citizens nor the Subsidiaries are in default
under, and no event has occurred which, with the lapse of time or action
by a third party, could, to the best of First Citizens' knowledge after
due inquiry, result in the default under the terms of any judgment,
decree, order, writ, rule or regulation of any governmental authority or
court, whether federal, state or local and whether at law or in equity,
where the default(s) could reasonably be expected to have a material
adverse effect on the financial conditions, results of operations or
business of First Citizens and the Subsidiaries on a consolidated basis.
(l) First Citizens has duly filed all federal, state, county and
local income, excise, real and personal property and other tax returns
and reports (including, but not limited to, social security,
withholding, unemployment insurance, and sales and use taxes) required
to have been filed by First Citizens up to the date hereof. To the best
of the knowledge and belief of First Citizens all such returns are true
and correct in all material respects, and First Citizens has paid or,
prior to the time the Merger shall become effective, will pay all taxes,
interest and penalties shown on such return or reports or claimed (other
than those claims being contested in good faith and which have been
disclosed to Farmers) to be due to any federal, state, county, local or
other taxing authority, and there is, and at the time the Merger shall
become effective will be, no basis for any additional claim or
assessment which might materially and adversely affect First Citizens or
the Subsidiaries, and for which an adequate reserve has not been
established. To the best of its knowledge and belief, First Citizens has
paid or made adequate provision in its financial statements or its books
and records for all taxes payable in respect of all periods ending as of
the date thereof. To the best of its knowledge and belief First Citizens
has, or at the time the Merger shall become effective will have, no
material liability for any taxes, interest or penalties of any nature
whatsoever, except for those taxes which may have arisen up to the time
the Merger shall become effective in the ordinary course of business and
are properly accrued on the books of First Citizens as of the time the
Merger shall become effective.
(m) To the best of its knowledge and belief, but without having
undertaken an environmental audit, First Citizens has no knowledge of
any underground storage tanks, any hazardous substances, hazardous
waste, pollutant or contaminant, including, but not limited to, asbestos
(except as previously disclosed to Farmers in a letter of even date
herewith), PCB's or urea formaldehyde, having been generated, released
into, stored or deposited over, upon or below (in storage tanks or
otherwise) First Citizens' premises or any other real property owned or
leased by First Citizens other than other real estate owned, for which
no investigation was conducted by First Citizens, but for which First
Citizens has no knowledge of such, or into any water systems on or below
the surface of the First Citizens premises or any other real property
owned or leased by First Citizens other than other real estate owned,
for which no investigation was conducted by First Citizens, but for
which First Citizens has no knowledge of such from any source
whatsoever. As used in this Agreement, the terms "hazardous substance,"
"hazardous waste," pollutant" and "contaminant" mean any substance,
waste, pollutant or contaminant included within such terms under any
applicable Federal, state or local statute or regulation.
8. Representations and Warranties of Farmers. Farmers represents and
warrants to First Citizens that, except as set forth in the disclosure
letter dated of even date herewith (the "Disclosure Letter") and attached
hereto and made a part hereof, as follows:
(a) Farmers is a banking corporation duly organized and validly
existing in good standing under the laws of the State of Ohio. Farmers
has full power and authority (including all licenses, franchises,
permits and other governmental authorizations which are legally
required) to engage in the businesses
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and activities now conducted by it. As of the date of this Agreement,
the authorized capital stock of Farmers consists of 200,000 shares of
common stock with $20 par value, all of which shares are issued and
outstanding and none are shares of treasury stock owned by Farmers. All
of said shares of capital stock are fully paid and nonassessable and are
not issued in violation of the preemptive rights of any shareholder.
There are no outstanding options, warrants or commitments of any kind
relating to Xxxxxx'x capital stock.
(b) Farmers has furnished to First Citizens copies of all financial
statements relating to Farmers, as filed with the appropriate regulatory
agencies, as of and for the years ended December 31, 1996 and 1995.
Farmers has furnished to First Citizens copies of all financial
statements relating to Farmers, as filed with the appropriate regulatory
agencies, as of and for the period ended March 31, 1997 and will furnish
to First Citizens monthly financial statements for the period thereafter
through the effective time of the Merger. Each of the aforementioned
financial statements is and shall be prepared in accordance with
Generally Accepted Accounting Principles or applicable regulatory
accounting principles applicable to Farmers consistently applied and is
and shall be true and correct in all material respects and together
present fairly the consolidated financial position and results of
operations of Farmers as of the dates and for the periods therein set
forth (subject, in the case of such interim financial statements, to
normal year-end adjustments). Farmers financial statements do not and
will not, as of the dates thereof, include any asset in excess of $5,000
or omit any liability in excess of $5,000, absolute or contingent, or
other fact, the inclusion or omission of which renders such financial
statements, in light of the circumstances under which they were made,
misleading in any material respect. Since December 31, 1996, there has
not been any change in the financial condition, results of operations,
business or prospects of Farmers (including, without limitation, any
adverse trend in the loan loss experience of Farmers) which in the
aggregate, has had a material adverse effect on Xxxxxx'x condition.
(c) The Board of Directors of Farmers has authorized execution of
this Agreement. Subject to the approval by the Stockholders of Farmers,
Farmers has all requisite power and authority to enter in this Agreement
and the Merger Agreement. Farmers has the authority to consummate the
transactions contemplated hereby so that, provided all required
corporate and regulatory approvals are obtained, neither the execution
and delivery of this Agreement, the Merger Agreement nor the
consummation of the Merger will conflict with, result in the breach of,
constitute a default under or accelerate the performance provided by the
terms of any law, or any rule or regulation of any governmental agency
or authority or any judgment, order or decree of any court or other
governmental agency to which Farmers may be subject, any contract,
agreement or instrument to which Farmers is a party or by which Farmers
is bound or committed, or the Articles of Incorporation or Code of
Regulations of Farmers, or constitute an event which with the lapse of
time or action by a third party, could, to the best of Xxxxxx'x
knowledge, result in the default under any of the foregoing or result in
the creation of any lien, charge, encumbrance upon any of the assets,
property or capital stock of Farmers, except, however, in the case of
contracts, agreements or instruments, such defaults, conflicts or
breaches which either (i) will be cured or waived prior to the time the
Merger becomes effective, or (ii) if not so cured or waived would not,
in the aggregate, have any material adverse effect on the financial
condition, results of operations or business of Farmers.
(d) Except as disclosed in Subsection (d) of the Disclosure Letter,
there is no litigation, action, suit, investigation or proceeding
pending or, to the best of their knowledge after due inquiry of Farmers
and its executive officers, overtly threatened, against or affecting
Farmers or involving any of their respective properties or assets, at
law or in equity, before any federal, state, municipal, local or other
governmental authority, involving in excess of $5,000, and to the best
of the knowledge and belief after due inquiry of Farmers and its
executive officers, no one has asserted and no one has reasonable or
valid ground on which it reasonably can be expected that anyone will
assert any such claims against Farmers based upon the wrongful action or
inaction of Farmers or its respective officers, directors or employees.
(e) Farmers has good and marketable title to all assets and
properties, whether real or personal, tangible or intangible reflected
in Xxxxxx'x Balance Sheet of December 31, 1996 or acquired subsequent
thereto (except to the extent that such assets and properties have been
disposed of for fair
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value in the ordinary course of business since December 31, 1996)
subject to no liens, mortgages, security interests, encumbrances,
pledges or charges of any kind, except: (i) those items that secure
liabilities that are reflected in said Balance Sheet; (ii) statutory
liens for taxes not yet delinquent; and (iii) minor defects and
irregularities in title and encumbrances which do not impair the use
thereof for the purposes for which they are held; and such liens,
mortgages, security interests, encumbrances and charges are not in the
aggregate, material to the assets and properties of Farmers. Farmers as
lessee has the contractual right under valid leases to occupy, use,
possess and control all material property leased by Farmers.
(f) To the best of the knowledge after due inquiry of Farmers and
its executive officers, Farmers has complied with all laws, regulations
and orders applicable to it and to the conduct of its business,
including without limitation, all statutes, rules and regulations
pertaining to the conduct of its banking activities except for possible
technical violations which together with any penalty which results
therefrom are or will be of no material consequence to Farmers. Except
as disclosed in Subsection (f) of the Disclosure Letter, Farmers is not
the subject of, nor is a party to, any regulatory actions or agreement
such as letter agreements, memorandum of understanding, cease and desist
order or like agreements. Farmers is not in default under, and no event
has occurred which, with the lapse of time or action by a third party,
could, to the best of Xxxxxx'x knowledge after due inquiry, result in
the default under the terms of any judgment, decree, order, writ, rule
or regulation of any governmental authority or court, whether federal,
state or local and whether at law or in equity.
(g) Except as disclosed in Subsection (g) of the Disclosure Letter,
Farmers has not, since December 31, 1996 to the date hereof: (i) issued
or sold any of its capital stock or any corporate debt securities; (ii)
granted any option for the purchase of capital stock; (iii) declared or
set aside or paid any dividend or other distribution in respect of its
capital stock except as permitted pursuant to Section 9(a) hereof or,
directly or indirectly, purchased, redeemed or otherwise acquired any
shares of such stock; (iv) incurred any obligation or liability
(absolute or contingent), except for obligations reflected in this
Agreement or the Merger Agreement, and except for obligations or
liabilities incurred in the ordinary course of business, or mortgaged,
pledged or subjected to lien or encumbrance (other than statutory liens
for taxes not yet delinquent) any of its assets or properties; (v)
discharged or satisfied any lien or encumbrance or paid any obligation
or liability (absolute or contingent), other than the current portion of
any long term liabilities which become due after December 31, 1996,
current liabilities included in its financial statements as of December
31, 1996, current liabilities incurred since the date thereof in the
ordinary course of business and liabilities incurred in carrying out the
transactions contemplated by this Agreement or the Merger Agreement;
(vi) sold, exchanged or otherwise disposed of any of its capital assets
worth in excess of $5,000 outside the ordinary course of business; (vii)
made any officers' salary increase or wage increase other than in the
ordinary course of business, entered into any employment contract with
any officer or salaried employee or, instituted any employee welfare,
bonus, stock option, profit-sharing, retirement or similar plan or
arrangement; (viii) suffered any damage, destruction or loss, whether or
not covered by insurance, involving in excess of $5,000, affecting its
business, property or assets or waived (except for fair consideration)
any rights of value which are material in the aggregate, considering its
business taken as a whole; or (ix) entered or agreed to enter into any
agreement or arrangement granting any preferential right to purchase any
of its assets, properties or rights or requiring the consent of any
party to the transfer and assignment of any such assets, properties or
rights.
(h) Except as disclosed in Subsection (h) of the Disclosure Letter,
Farmers is not a party to or bound by any written or oral: (i)
employment or consulting contract which is not terminable by it on 60
days or less notice, (ii) employee bonus, deferred compensation,
pension, stock bonus or purchase, profit-sharing, retirement or stock
option plan, (iii) other employee benefit or welfare plan, or (iv) other
executory material agreements which in any case obligate Farmers to make
any payment(s) which in the aggregate exceed $5,000 per year except for
contracts terminable on 60 days notice. All such pension, stock bonus or
purchase, profit-sharing, defined benefit and retirement plans set forth
under the caption "Qualified Plans" in the Farmers Document List
(hereinafter referred to collectively as the
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"plan") are qualified plans under Section 401(a) of the Internal Revenue
Code and in compliance in all material respects with ERISA. All material
notices, reports and other filings required under applicable law to be
given or made to or with any governmental agency with respect to the
plans have been timely filed or delivered where failure to file would
result in a penalty and/or result in disqualification of the plan.
Farmers has no knowledge either of any circumstances which would
adversely affect the qualification of the plans or their compliance with
ERISA, or of any unreported "reportable event" (as such term is defined
in Section 4043(b) of ERISA) or, any "prohibited transaction" (as such
term is defined in Section 406 of ERISA and Section 4975(c) of the
Internal Revenue Code) which has occurred since the date on which said
sections became applicable to the plans. The plans meet the minimum
funding standards set forth in the Internal Revenue Code and ERISA.
(i) Farmers has duly filed all federal, state, county and local
income, excise, real and personal property and other tax returns and
reports (including, but not limited to, social security, withholding,
unemployment insurance, and sales and use taxes) required to have been
filed by Farmers up to the date hereof. Except as set forth in
Subsection (i) of the Disclosure Letter, to the best of the knowledge
and belief of Farmers all such returns are true, are correct in all
material respects, and Farmers has paid or, prior to the time the Merger
shall become effective, will pay all taxes, interest and penalties shown
on such return or reports or claimed together than those claims being
contested in good faith and which have been disclosed to First Citizens
to be due to any federal, state, county, local or other taxing
authority, and there is, and at the time the Merger shall become
effective will be, no basis for any additional claim or assessment in
excess of $5,000 and for which an adequate reserve has not been
established. To the best of its knowledge and belief, Farmers has paid,
made or will make adequate provision in its financial statements or its
books and records for all taxes payable in respect of all periods ending
as of the date thereof. To the best of its knowledge and belief, Farmers
has, or at the time the Merger shall become effective will have, no
liability for any taxes, interest or penalties of any nature whatsoever,
in excess of $5,000 except for those taxes which may have arisen up to
the time the Merger shall become effective in the ordinary course of
business and are properly accrued on the books of Farmers as of the time
the Merger shall become effective.
(j) To the best of its knowledge and belief, but without having
undertaken an environmental audit, Farmers has no knowledge of any
underground storage tanks, any hazardous substances, hazardous waste,
pollutant or contaminant, including, but not limited to, asbestos
(except as disclosed in Subsection (j) of the Disclosure Letter), PCB's
or urea formaldehyde, having been generated, released into, stored or
deposited over, upon or below (in storage tanks or otherwise) Xxxxxx'x
premises or any other real property owned or leased by Farmers other
than other real estate owned, for which no investigation was conducted
by Farmers, but for which Farmers has no knowledge of such, or into any
water systems on or below the surface of the Farmers premises or any
other real property owned or leased by Farmers other than other real
estate owned, for which no investigation was conducted by Farmers, but
for which Farmers has no knowledge of such from any source whatsoever.
As used in this Agreement, the terms "hazardous substance," "hazardous
waste," pollutant" and "contaminant" mean any substance, waste,
pollutant or contaminant included within such terms under any applicable
Federal, state or local statute or regulation.
(k) Except for its obligation to its financial advisor Austin
Associates, Inc., as previously disclosed to First Citizens, Farmers has
not incurred and will not incur any liability for brokerage, finders',
agents', or investment bankers' fees or commissions in connection with
this Agreement or the Merger Agreement or the transactions contemplated
hereby and thereby.
(l) Subject to their fiduciary duties, the directors of Farmers
executing this Agreement shall vote the shares of Farmers held directly
by them in favor of adoption of the Agreement.
(m) All contracts and commitments (whether written or oral) that
may have a material effect on the business of Farmers are disclosed in
subsection (m) of the Disclosure Letter and copies of any such written
contracts or commitments have been provided to First Citizens. All
contracts and commitments for the lease or purchase of equipment or
services have been entered into on an arm's length basis.
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(n) The deposits of Farmers are insured by the Federal Deposit
Insurance Corporation in accordance with the Federal Deposit Insurance
Act ("FDIA"). Farmers has paid all assessments and filed all reports
required under the FDIA and is in compliance, in all material respects,
with all regulatory requirements imposed in connection with the
insurance of its deposits.
(o) To the best of Xxxxxx'x knowledge and belief, the reserves for
possible loan losses on the outstanding loans of Farmers (if any, as
reflected in the balance sheet of Farmers as of December 31, 1996 (the
"1996 Balance Sheet") are adequate to absorb all known and anticipated
loan losses in the loan portfolio of Farmers, net of recoveries relating
to loans previously charged off. Except as set forth in subsection (o)
of the Disclosure Letter, there are no loans of Farmers the present
principal balance of which is in excess of $5,000 that have been
classified orally or in writing by bank examiners (regulatory or
internal) as "Other Loans Specifically Mentioned," "Substandard,"
"Doubtful," or "Loss," as of the last examination date (which shall
include the date on which any examination prior to the effective time is
concluded). To the best of Xxxxxx'x knowledge and belief, each loan in
the principal amount of $5,000 or greater reflected as an asset of
Farmers in the 1996 Balance Sheet or acquired by Farmers since December
31, 1996, is the legal, valid and binding obligation of the obligor and
any guarantor named therein, and no such loan is subject to any defense,
offset or counterclaim. Except for pledges to secure public and trust
deposits, to the best of Xxxxxx'x knowledge and belief, none of the
investments reflected in the 1996 Balance Sheet under the heading
"Investment Securities," and none of the investments made by Farmers
since December 31, 1996, is subject to any restriction, whether
contractual or statutory, which impairs the ability of Farmers freely to
dispose of such investment at any time. Farmers is not a party to any
repurchase agreements. Except as set forth in subsection (o) of the
Disclosure Letter, and except for transactions aggregating less than
$5,000, Farmers has not sold or otherwise disposed of any assets in a
transaction in which the acquirer of such assets or any other person has
the right, either conditionally or absolutely, to require Farmers to
repurchase or otherwise re acquire any such assets.
(p) Prior to the Closing, Farmers will have provided First Citizens
with a list of all certificates of deposit or checking, savings or other
deposits and a list of all certificates of deposit or checking, savings
or other deposits owned by directors and officers of Farmers and their
affiliates as of the last day of the calendar month immediately prior to
the Closing. In addition, Farmers shall provide First Citizens with a
list of (i) all certificates of deposit, checking, savings or other
deposits in excess of $100,000 and (ii) all customers with aggregate
deposits in excess of $100,000.
(q) Subsection (q) of the Disclosure Letter contains a list and a
brief description of all insurance policies currently in force with
respect to Farmers. All premiums due on such policies have been paid,
and such policies will continue to remain in force through the Effective
Time. Subsection (q) the disclosure letter also contains a description
of all claims in excess of $1,000 currently pending under such insurance
policies, together with a list of all other claims in excess of $1,000
which have been filed during the last three (3) years and a description
of the disposition thereof.
(r) Except to the extent reflected or reserved against in the 1996
Balance Sheet or in the notes thereto, as of the date of such Balance
Sheet, Farmers has no liabilities or obligations, secured or unsecured,
whether accrued, absolute, contingent or otherwise, which would
materially and adversely affect the financial condition, results of
operations, assets, or business of Farmers.
(s) Except for loans made in the ordinary course of business,
Farmers has no business relationships, business transactions or
indebtedness with or to any of its officers and directors.
9. Action by Farmers Pending Effective Time. Farmers agrees that from
the date of this Agreement until the time the Merger shall become
effective, except with prior written permission of First Citizens:
(a) Beginning with the date hereof and until such time as the
Merger shall become effective, Farmers will not declare or pay any
dividends or make any distributions other than regular cash dividends,
payable at such times and in amounts consistent with past practice and
not to exceed the per share rate paid in the prior calendar year,
provided that if the merger shall occur prior to the payment of
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the regular annual cash dividend of Farmers, Farmers may pay a cash
dividend in an amount equal to the per share rate paid in the prior
calendar year, prorated to the date of the Merger. If, prior to the
consummation of the Merger, Farmers shall declare a stock dividend or
make distributions upon or subdivide, split up, reclassify or combine
its shares of common stock in any security convertible into its common
stock, appropriate adjustment or adjustments will be made in the
foregoing per share dividend rate.
(b) Farmers will not issue, sell, grant any option for, or acquire
for value any shares of its capital stock or otherwise effect any change
in connection with its capitalization.
(c) Except as otherwise set forth in or contemplated by this
Agreement or the Merger Agreement, Farmers will carry on its businesses
in substantially the same manner as heretofore, keep in full force and
effect insurance comparable in amount and scope of coverage to that now
maintained by it and use its best efforts to maintain and preserve its
business organization intact.
(d) Farmers will not: (i) enter into any transaction other than in
the ordinary course of business or incur or agree to incur any
obligation or liability except liabilities incurred and obligations
entered into in the ordinary course of business; (ii) change its
lending, investment, liability management and other policies in any
respect; (iii) except as committed for adjustment as of the date hereof
and consistent with prior practice, grant any general or uniform
increase in the rates of pay of employees; (iv) incur or commit to any
capital expenditures other than in the ordinary course of business, or
(v) merge into, consolidate with or sell its assets to any other
corporation or person, or permit any other corporation to be merged or
consolidated with it or acquire all of the assets of any other
corporation or person.
(e) Farmers will not change its method of accounting in effect at
December 31, 1996 except as required by changes in generally accepted
accounting principles and concurred in by Xxxxxx'x independent auditors,
or change any of its methods of reporting income and deductions for
Federal income tax purposes from those employed in the preparation of
Xxxxxx'x Federal income tax returns for the taxable year ending December
31, 1996, except for changes required by law.
(f) Farmers will promptly advise First Citizens in writing of all
material actions taken by the directors and Stockholders of Farmers,
furnish First Citizens with copies of all minutes of such action and
monthly interim financial statements of Farmers as they become
available, commencing with the April 1997 statements, and keep First
Citizens fully informed concerning all developments which in the opinion
of Farmers may have a material effect upon the business, properties or
condition (either financial or otherwise) of Farmers.
10. Action by First Citizens Pending Effective Time. First Citizens
agrees that from the date of this Agreement until the time the Merger shall
become effective:
(a) First Citizens will carry on its business in substantially the
same manner as heretofore except as otherwise set forth in or
contemplated by this Agreement, and First Citizens will keep in full
force and effect insurance comparable in amount and scope of coverage to
that now maintained by it and use its best efforts to maintain and
preserve its business organization intact.
(b) First Citizens will not change its methods of accounting in
effect at December 31, 1996, except as required by changes in generally
accepted accounting principles as concurred in by First Citizens'
independent auditors, or change any of its methods of reporting income
and deductions for Federal income tax purposes from those employed in
the preparation of the Federal income tax returns of First Citizens'
Subsidiaries for the taxable year ended December 31, 1996, except for
changes required by law or take any action which could jeopardize the
tax free nature of the Merger or the pooling of interests accounting
treatment for the Merger.
(c) First Citizens will furnish Farmers with copies of interim
financial statements of First Citizens and all reports, schedules and
statements filed by or delivered for First Citizens pursuant to the
Securities and Exchange Act of 1934 and the rules and regulations
promulgated thereunder, as they become available, and keep Farmers fully
informed concerning all developments which in the opinion
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of First Citizens may have a material effect upon the business,
properties or condition (either financial or otherwise) of First
Citizens.
11. Conditions to Obligations of First Citizens. The obligations of
First Citizens under this Agreement and the Merger Agreement are subject,
unless waived by First Citizens, to the satisfaction of the following
conditions on or prior to the time the Merger shall become effective:
(a) There shall not have been any material adverse change or
discovery of a condition or the occurrence of an event which has or is
likely to result in such a change, in the financial condition, aggregate
net assets, Stockholders' equity, business or operating results of
Farmers from December 31, 1996 to the time the Merger shall become
effective.
(b) Farmers shall not have paid cash dividends from the date hereof
to the time the Merger shall become effective except as permitted under
this Agreement.
(c) All representations by Farmers contained in this Agreement and
the Merger Agreement shall be true in all material respects at, or as
of, the time the Merger shall become effective as though such
representations were made at and as of said date, except for changes
contemplated by this Agreement or the Merger Agreement and except also
for representations as of a specified time other than the time the
Merger shall become effective, which shall be true in all material
respects at such specified time. In addition, all amendments to the
Disclosure Letter shall have been approved by First Citizens in
accordance with Section 19.
(d) First Citizens shall have received the opinion of legal counsel
for Farmers, dated the time the Merger shall become effective,
substantially to the effect set forth in Exhibit A hereto.
(e) Farmers shall have performed or satisfied in all material
respects all undertakings, agreements and conditions required by this
Agreement or the Merger Agreement to be performed or satisfied by it at
or prior to the time the Merger shall become effective.
(f) At the time the Merger shall become effective, no suit, action
or proceeding shall be pending or overtly threatened before any court or
other governmental agency by the federal or state government in which it
is sought to restrain or prohibit the consummation of the Merger, and no
other suit, action or proceeding shall be pending or overtly threatened
and no liability or claim shall have been asserted against Farmers which
First Citizens shall in good faith determine, with advice of counsel:
(i) has a reasonable likelihood of being successfully prosecuted and
(ii) if successfully prosecuted, would materially and adversely affect
the benefits hereunder intended for First Citizens.
(g) Prior to the time the Merger shall become effective, First
Citizens shall not have been deprived of adequate opportunity to conduct
such review and examination of the business, properties, and condition
(financial or otherwise) of Farmers as First Citizens shall have deemed
prudent. In the event Farmers receives a written examination report or
written agreement with a state or federal banking regulatory agency,
First Citizens shall have an opportunity to review such examination
report or written agreement for a period of thirty days and may, at its
option, elect to terminate its obligations under this Agreement during
such review period.
(h) Holders of Farmers Common Stock who are entitled to exercise in
the aggregate not more than 10% of the voting power of the issued and
outstanding Farmers Common Stock as of the time the Merger shall become
effective shall have taken steps to perfect their rights as dissenting
Stockholders pursuant to the provisions the Sections 1115.19 and 1701.85
of the Ohio Revised Code so that if, at the time the Merger shall become
effective, holders of more than 10% of such shares shall have taken such
steps, First Citizens may, at its option, refuse to consummate the
Merger.
(i) Farmers shall have furnished First Citizens certificates,
signed on its behalf by the Chairman or President and the Secretary or
an Assistant Secretary of Farmers and dated the time the Merger shall
become effective, to the effect that to the best of their knowledge,
after due inquiry, the conditions described in Paragraphs (a), (b), (c),
and (f) of this Section 11 have been fully satisfied.
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(j) First Citizens shall have received from each Affiliate a
certificate in the form specified by First Citizens.
(k) First Citizens shall have received from Farmers the officers'
certificates required pursuant to Section 4 (m) hereof.
(l) Each of (i) the Board of Directors of Farmers, (ii) Farmers'
stockholders and (iii) First Citizens' shareholders shall have approved
this Agreement and the Agreement of Merger.
(m) First Citizens shall have received from Xxxxx, Xxxxxx and
Company, a letter dated the effective time, in substance reasonably
acceptable to First Citizens, stating its opinion that based upon the
information furnished that the transactions contemplated by this
Agreement should be accounted for by First Citizens as a "pooling of
interests" for financial statement reporting purposes and that such
accounting treatment is in accordance with generally accepted accounting
principles.
(n) Pursuant to Section 4(1) hereof, First Citizens shall have
filed such registration statements or applications as may be required
under applicable blue sky laws and such registration statements or
applications shall have become effective or approved and no stop order
shall be threatened or in effect with respect thereto.
12. Conditions to Obligations of Farmers. The obligations of Farmers
under this Agreement or the Merger Agreement are subject, unless waived by
Farmers, to the satisfaction on or prior to the time the Merger shall
become effective of the following conditions:
(a) There shall not have been any material adverse change or
discovery of a condition or the occurrence of an event which has or is
likely to result in such a change, in the financial condition, aggregate
net assets, Stockholders' equity, business, or operating results of
First Citizens from December 31, 1996, to the time the Merger shall
become effective.
(b) All representations by First Citizens contained in this
Agreement and the Merger Agreement shall be true in all material
respects at, or as of, the time the Merger shall become effective as
though such representations were made at and as of said date, except for
changes contemplated by this Agreement and the Merger Agreement, and
except also for representations as of a specified time other than the
time the Merger shall become effective, which shall be true in all
material respects at such specified time.
(c) Farmers shall have received the opinion of Counsel for First
Citizens dated the time the Merger shall become effective substantially
to the effect set forth in Exhibit B hereto.
(d) First Citizens shall have performed or satisfied in all
material respects all undertakings, agreements and conditions required
by this Agreement and the Merger Agreement to be performed or satisfied
by it at or prior to the time the Merger shall become effective.
(e) At the time the Merger shall become effective, no suit, action
or proceeding shall be pending or overtly threatened before any court or
other governmental agency of the federal or state government in which it
is sought to restrain, prohibit or set aside consummation of the Merger
and no other suit, action or proceeding shall be pending or overtly
threatened and no liability or claim shall have been asserted against
First Citizens which Farmers shall in good faith determine, with advice
of counsel: (i) has a reasonable likelihood of being successfully
prosecuted and (ii) if successfully prosecuted, would materially and
adversely affect the benefits hereunder intended for Farmers and its
Stockholders.
(f) First Citizens shall have furnished Farmers a certificate,
signed by the Chairman or President and by the Secretary or Assistant
Secretary of First Citizens and dated the time the Merger shall become
effective to the effect that to the best of their knowledge after due
inquiry the conditions described in Paragraphs (a), (b), and (e) of this
Section 12 have been fully satisfied.
(g) First Citizens and Farmers shall have received the opinion
called for pursuant to Section 6 of this Agreement and there shall exist
as of, at or immediately prior to the time the Merger shall become
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effective no facts or circumstances which would render such opinion
inapplicable in any respect to the transactions to be consummated
hereunder.
13. Conditions to Obligations of All Parties. In addition to the
provisions of Sections 11 and 12 hereof, the obligations of First Citizens
and Farmers to cause the transactions contemplated herein to be consummated
shall be subject to the satisfaction of the following conditions on or
prior to the time the Merger shall become effective:
(a) The parties hereto shall have received all necessary approvals
of governmental agencies and authorities of the transactions
contemplated by this Agreement and each of such approvals shall remain
in full force and effect at the time the Merger shall become effective
and such approvals and the transactions contemplated thereby shall not
have been contested by any federal or state governmental authority by
formal proceeding, or contested by any other third party by formal
proceeding which the Board of Directors or the party asserting a failure
of a condition under this Section 13(a) shall in good faith determine,
with the advice of counsel: (i) has a reasonable likelihood of being
successfully prosecuted and (ii) if successfully prosecuted, would
materially and adversely affect the benefits hereunder intended for such
party. It is understood that, if any contest as aforesaid is brought by
formal proceedings, First Citizens may, but shall not be obligated to,
answer and defend such contest. First Citizens shall notify Farmers
promptly upon receipt of all necessary governmental approvals.
(b) The registration statement required to be filed by First
Citizens pursuant to Section 4(c) of this Agreement shall have become
effective by an order of the Securities and Exchange Commission, the
shares of First Citizens Common Shares to be exchanged in the Merger
shall have been qualified or exempted under all applicable state
securities laws, and there shall have been no stop order issued or
threatened by the Securities and Exchange Commission that suspends or
would suspend the effectiveness of the registration statement, and no
proceeding shall have been commenced, pending or overtly threatened for
such purpose.
(c) This Agreement and the Merger Agreement shall have been duly
adopted, ratified and confirmed by the requisite affirmative votes of
the Stockholders of Farmers.
14. Non-survival of Representations and Warranties. The respective
representations and warranties of First Citizens and Farmers set forth
shall expire at the effective time of the Merger.
15. Governing Law. This Agreement shall be construed and interpreted
according to the applicable laws of the State of Ohio.
16. Assignment. This Agreement and the Merger Agreement and all of
the provisions hereof and thereof shall be binding upon and inure to the
benefit of the parties hereto and their respective successors and permitted
assigns, but neither this Agreement nor the Merger Agreement nor any of the
rights, interest, or obligations hereunder or thereunder shall be assigned
by either of the parties hereto without the prior written consent of the
other party.
17. Satisfaction of Conditions; Termination.
(a) First Citizens agrees to use its best effort to obtain
satisfaction of the conditions insofar as they relate to First Citizens,
and Farmers agrees to use its best efforts to obtain the satisfaction of
the conditions insofar as they relate to Farmers. If any material
condition to the obligations of First Citizens set forth in Section 11
or 13 is not substantially satisfied at the time or times contemplated
thereby and such condition is not waived by First Citizens, or if any
material condition to the obligations of Farmers set forth in Section 12
or 13 is not substantially satisfied at the time or times contemplated
thereby and such condition is not waived by Farmers, or if at any time
prior to the time the Merger shall become effective, it shall become
reasonably certain that such condition will not be substantially
satisfied and such condition is not waived by First Citizens or Farmers,
as the case may be, either First Citizens or Farmers may terminate this
Agreement by written notice to the other party after the expiration of
fifteen (15) days written notice to the other party during which time
such other party shall have an opportunity to cure such defect in said
condition. This Agreement may be terminated and abandoned (either before
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or after the meetings of Stockholders contemplated hereby) by mutual
written consent of First Citizens and Farmers authorized by their
respective Boards of Directors. In the event of such termination caused
otherwise than by breach of this Agreement by any of the parties hereto,
this Agreement shall cease and terminate, the acquisition of Farmers as
provided herein shall not be consummated, and neither First Citizens nor
Farmers shall have any further liability under this Agreement of any
nature whatever, including any liability for damages. In the event this
Agreement is terminated, the duties of both parties with respect to
confidential information set forth in Sections 4(d) shall survive any
such termination. In addition to the other grounds for termination of
this Agreement set forth herein, this Agreement can be terminated by
written notice by either party to the other, in each case authorized by
its Board of Directors, if the Merger shall not have been consummated by
February 1, 1998, or the date of such notice, whichever is later.
(b) If termination of this Agreement shall be judicially determined
to have been caused by breach of this Agreement, then, in addition to
other remedies at law or equity for breach of this Agreement, the party
so found to have breached this Agreement shall indemnify the other
parties for their respective costs, fees and expenses of its counsel,
accountants and other experts and advisors as well as fees and expenses
incident to negotiation, preparation and execution of this Agreement and
related actions and its Stockholders' meetings and actions.
18. Waivers, Amendments. Any of the provisions of this Agreement may
be waived at any time by the party which is, or the Stockholders of which
are, entitled to the benefit thereof, by resolution of the Board of
Directors of such party. This Agreement may be amended or modified in whole
or in part by an agreement in writing executed in the same manner (but not
necessarily by the same person) as this Agreement and which makes reference
to this Agreement, pursuant to a resolution, adopted by the Boards of
Directors of the respective parties, provided, however, such amendment or
modification may be made in this manner by the respective Boards of
Directors of First Citizens and Farmers at anytime prior to a favorable
vote of such party's Stockholders, but may be made after a favorable vote
by the Stockholders of such party, only if, in the opinion of its Board of
Directors, such amendment or modification will not have any material
adverse effect on the benefits intended under this Agreement for the
Stockholders of such party and will not require resolicitation of any
proxies from such Stockholders.
19. Entire Agreement. This Agreement supersedes any other agreement,
whether written or oral, that may have been made or entered into by First
Citizens and Farmers or by any officer or officers of such parties relating
to the acquisition of the business or the capital stock of Farmers by First
Citizens. This Agreement, including the exhibits and schedules hereto
(which shall include the Disclosure Letter and the Merger Agreement)
together constitute the entire agreement of the parties, and there are no
agreements or commitments except as set forth herein and therein. This
Agreement and the Merger Agreement may only be amended in a writing signed
by the parties hereto and thereto. The Disclosure Letter may be amended by
Farmers from time to time after the date hereof upon the prior written
consent of First Citizens.
20. Captions; Counterparts. The captions in this Agreement are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Agreement. This
Agreement may be executed in several counterparts, each of which shall
constitute one and the same instrument.
21. Notices. All notices and other communications hereunder shall be
deemed to have been duly given if forwarded by regular First Class United
States Mail, postage prepaid, or a nationally recognized overnight courier
service. All notices and other communications hereunder given to any party
shall be communicated to the remaining party to this Agreement by mail in
the same manner as herein provided.
a) If to First Citizens, to:
Xxxxx Xxxxxx, President
First Citizens Banc Corp.
000 Xxxx Xxxxx Xxxxxx
Xxxxxxxx, XX 00000
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With copies to:
Xxxx X. Xxxxx, Esq.
Lucal & XxXxxxxx
000 Xxxx Xxxxxxxxxx Xx.
Xxxxxxxx, XX 00000
and
M. Xxxxxxxx Xxxxxx, Esq.
Squire, Xxxxxxx & Xxxxxxx, LLP
0000 Xxx Xxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000-0000
(b) If to Farmers, to:
Xx. Xxxxxxx X. Xxxxx
The Farmers State Bank
000 X. Xxxxxx
Xxx Xxxxxxxxxx, XX 00000-0000
With copies to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxx & Blank Co., L.P.A.
0000 X. Xxxxxxx Xxxxxx
Xxxxxx, Xxxx 00000
22. Publicity. First Citizens and Farmers agree to consult with and
obtain the consent of the other, prior to any media release or other public
disclosures as to the matters covered by this Agreement, except as may be
required by law.
24. Whenever a representation or warranty is made herein as being "to
the knowledge of" a party hereto or the officers or directors thereof, it
is understood that an officer has made or caused to be made by personnel or
representatives competent to determine the accuracy thereof (and the
results thereof reported to him) an investigation which is appropriate to
determine the accuracy of such representation or warranty.
25. The corporate trust department of Fifth Third Bank, as transfer
agent for the First Citizens Common Shares (or such other bank or trust
company as First Citizens selects) shall act as exchange agent in respect
of the conversion of Farmers common stock into First Citizens common
shares.
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IN WITNESS WHEREOF, this Agreement has been executed the day and year first
above written.
ATTEST: First Citizens Banc Corp.
----------------------------------------- By: /s/ XXXXX XXXXXX
By: /s/ XXXXX XXXXXX -------------------------------------
------------------------------------- Xxxxx Xxxxxx, President
Its: Senior Vice President
------------------------------------- The Farmers State Bank
ATTEST: By: /s/ XXXXXXX XXXXX
----------------------------------------- -------------------------------------
By: /s/ XXXXXXX XXXXXXXX Xxxxxxx Xxxxx, President
-------------------------------------
Its: Vice President
-------------------------------------
As individuals and with respect solely to the understanding made in Section 8(l)
of this Agreement.
/s/ XXXXXXX XXXXX /s/ XXXXXX XXXXXXXXX
----------------------------------------- -----------------------------------------
/s/ XXXXXX X. XXXXXXX /s/ XXXXXX X. XXXXXXXX
----------------------------------------- -----------------------------------------
/s/ XXXXXXX XXXXXXXXXX
----------------------------------------- -----------------------------------------
/s/ XXXXXX XXXXXXXX
----------------------------------------- -----------------------------------------
/s/ XXXXXXX XXXXXXXX
----------------------------------------- -----------------------------------------
/s/ XXXXXX XXXXXX
----------------------------------------- -----------------------------------------
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