<PAGE> 1
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 26, 1994
REGISTRATION NO. 33-55491
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
FIRST BANCORPORATION OF OHIO
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
OHIO 6711 34-1339938
(State or other (Primary Standard (I.R.S. Employer
jurisdiction of Industrial Identification No.)
incorporation or Classification Code No.)
organization)
</TABLE>
106 S. MAIN STREET, AKRON OHIO 44308 (216) 384-8000
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
TERRY E. PATTON
SENIOR VICE PRESIDENT AND SECRETARY
FIRST BANCORPORATION OF OHIO
106 S. MAIN STREET, AKRON, OHIO 44308 (216) 384-8000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
COPIES TO:
<TABLE>
<S> <C>
Kevin C. O'Neil, Esq. Jeffrey J. Margulies, Esq.
Brouse & McDowell Squire, Sanders & Dempsey
500 First National Tower 4900 Society Center, 127 Public Square
Akron, Ohio 44308 Cleveland, Ohio 44114
(216) 535-5711 (216) 479-8500
</TABLE>
Approximate date of commencement of proposed sale of securities to the public:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THE REGISTRATION STATEMENT.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box: / /
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
FIRST BANCORPORATION OF OHIO
CROSS REFERENCE SHEET
<TABLE>
<CAPTION>
ITEM CAPTION OR LOCATION IN PROSPECTUS AND
NO. FORM S-4 CAPTION PROXY STATEMENT
---- ------------------------------------------- -----------------------------------------
<C> <S> <C>
1. Forepart of Registration Statement and Facing Page of Registration Statement;
Outside Front Cover Page of Prospectus Cross-Reference Sheet; Outside front
cover page of Prospectus and Joint Proxy
Statement
2. Inside Front and Outside Back Cover Pages Inside front cover page of Prospectus and
of Prospectus Joint Proxy Statement; Available
Information; Incorporation of Certain
Documents by Reference; Table of Contents
3. Risk Factors, Ratio of Earnings to Fixed Summary; Terms of Merger; Pro Forma
Charges and Other Information Condensed Combined Financial Statements
(Unaudited)
4. Terms of the Transaction Summary; Background of and Reasons for
Merger; Terms of Merger; Description of
Bancorporation Capital Stock; Comparison
of Bancorporation and CIVISTA Capital
Stock
5. Pro Forma Financial Information Pro Forma Condensed Combined Financial
Statements (Unaudited)
6. Material Contacts with the Company Being Summary; Background of and Reasons for
Acquired Merger; Terms of Merger
7. Additional Information Required for the Not Applicable
Reoffering by Persons and Parties Deemed to
be Underwriters
8. Interests of Named Experts and Counsel Not Applicable
</TABLE>
<TABLE>
<C> <S> <C>
9. Disclosure of Commission Position on Comparison of Bancorporation and CIVISTA
Indemnification for Securities Act Capital Stock; Terms of Merger; Part
Liabilities II -- Undertakings
10. Information with Respect to S-3 Registrants Available Information; Incorporation of
Certain Documents by Reference
11. Incorporation of Certain Information by Incorporation of Certain Documents by
Reference Reference
12. Information with Respect to S-2 or S-3 Not Applicable
Registrants
13. Incorporation of Certain Information by Not Applicable
Reference
14. Information with Respect to Registrants Not Applicable
Other than S-2 or S-3 Registrants
15. Information with Respect to S-3 Companies Available Information; Incorporation of
Certain Documents by Reference
16. Information with Respect to S-2 or S-3 Not Applicable
Companies
17. Information with Respect to Companies Other Not Applicable
than S-2 or S-3 Companies
18. Information if Proxies, Consents or Summary; Introduction; Special Meeting of
Authorizations are to be Solicited CIVISTA Stockholders; Special Meeting of
Bancorporation Stockholders; Rights of
Dissenting Stockholders; Interests of
Certain Persons in Merger; Terms of
Merger
19. Information if Proxies, Consents or Not Applicable
Authorization are not to be Solicited, or
in an Exchange Offer
</TABLE>
<PAGE> 3
THE CIVISTA CORPORATION
100 Central Plaza South
Canton, Ohio 44702
November 2, 1994
Dear Stockholder:
You are cordially invited to attend the special meeting of stockholders of
The CIVISTA Corporation ("CIVISTA") to be held on Thursday, December 15, 1994,
at 10:00 A.M. (local time) at 100 Central Plaza South, Canton, Ohio. At the
special meeting, holders of CIVISTA Common Stock will be asked to adopt the
Agreement of Affiliation and Plan of Merger dated as of August 10, 1994, by and
between First Bancorporation of Ohio ("Bancorporation") and CIVISTA. On the date
upon which the merger of CIVISTA with and into Bancorporation (the "Merger")
becomes effective, as a general matter, each outstanding share of CIVISTA Common
Stock will be cancelled and exchanged for 1.723 shares of Bancorporation Common
Stock (the "Exchange Ratio"). Bancorporation Common Stock is quoted on the
NASDAQ National Market System.
Your Board of Directors believes that the Merger is in the best interests
of CIVISTA's stockholders and will provide significant value to all CIVISTA
stockholders. Additional information is contained in the accompanying Prospectus
and Joint Proxy Statement, which I urge you to read carefully.
The Board of Directors has received an opinion from McDonald & Company
Securities, Inc., CIVISTA's financial advisor, to the effect that, as of the
date the Agreement of Affiliation and Plan of Merger was signed and as of the
date of the accompanying Prospectus and Joint Proxy Statement, the Exchange
Ratio was fair to the holders of CIVISTA Common Stock from a financial point of
view.
YOUR BOARD OF DIRECTORS HAS APPROVED THE MERGER AND UNANIMOUSLY RECOMMENDS
THAT YOU VOTE "FOR" THE MERGER. TO APPROVE THE PROPOSED MERGER, IT WILL BE
NECESSARY TO OBTAIN THE AFFIRMATIVE VOTE OF THE HOLDERS OF TWO-THIRDS OF THE
OUTSTANDING SHARES OF CIVISTA COMMON STOCK. AN ABSTENTION OR FAILURE TO VOTE HAS
THE SAME EFFECT AS A VOTE AGAINST THE PROPOSED MERGER. IT IS, THEREFORE,
IMPORTANT THAT YOU VOTE ON THE MERGER.
A Proxy is enclosed for your use. Please indicate your voting instructions
and sign, date and mail this Proxy promptly in the return envelope provided.
Whether or not you plan to attend the special meeting in person, it is important
that you return the enclosed Proxy so that your shares of CIVISTA Common Stock
will be voted.
Sincerely,
Richard G. Gilbert
Chairman and Chief Executive
Officer
<PAGE> 4
THE CIVISTA CORPORATION
100 Central Plaza South
Canton, Ohio 44702
-----------------------------------------------------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
DECEMBER 15, 1994
-----------------------------------------------------------------
A special meeting of stockholders of The CIVISTA Corporation ("CIVISTA")
will be held on Thursday, December 15, 1994, at 10:00 A.M. (local time) at 100
Central Plaza South, Canton, Ohio, for the following purposes:
1. To adopt the Agreement of Affiliation and Plan of Merger dated as of
August 10, 1994 (the "Agreement"), by and between First
Bancorporation of Ohio ("Bancorporation") and CIVISTA; and
2. To transact such other business as may properly come before the
meeting or any adjournment(s) thereof.
CIVISTA stockholders of record as of the close of business on October 24,
1994, will be entitled to receive notice of and vote at the special meeting and
any adjournment(s) thereof.
The Agreement provides for the merger of CIVISTA with and into
Bancorporation, as described in the accompanying Prospectus and Joint Proxy
Statement. The accompanying document constitutes the Proxy Statement of CIVISTA
for the special meeting. A copy of the Agreement of Affiliation and Plan of
Merger is attached to the Prospectus and Joint Proxy Statement as Appendix A.
You are cordially invited to attend the meeting in person. Whether or not
you plan to attend the meeting, you are urged to complete, date, sign, and
return the enclosed Proxy in the envelope provided as soon as possible.
By Order of the Board of Directors
Janice R. Van Voorhis
Secretary
Canton, Ohio
November 2, 1994
ANY PROXY GIVEN BY A STOCKHOLDER MAY BE REVOKED BY SUBMITTING A DULY
EXECUTED PROXY BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE
SPECIAL MEETING MAY REVOKE HIS OR HER PROXY AND VOTE PERSONALLY ON EACH
MATTER BROUGHT BEFORE THE SPECIAL MEETING.
PLEASE DO NOT RETURN YOUR CIVISTA STOCK CERTIFICATES
WITH THE ENCLOSED PROXY.
<PAGE> 5
FIRST BANCORPORATION OF OHIO
First National Tower
Akron, Ohio 44308
November 2, 1994
To Our Stockholders:
You are cordially invited to attend the special meeting of stockholders to
be held on Thursday, December 15, 1994 at 10:00 A.M. at the Quaker Square Hilton
Inn, 135 South Broadway, Akron, Ohio 44308. At the special meeting, holders of
First Bancorporation of Ohio ("Bancorporation") Common Stock will be asked to
adopt the Agreement of Affiliation and Plan of Merger dated as of August 10,
1994, by and between Bancorporation and The CIVISTA Corporation ("CIVISTA"). On
the date upon which the merger of CIVISTA with and into Bancorporation (the
"Merger") becomes effective, each outstanding share of CIVISTA Common Stock will
be cancelled and exchanged for 1.723 shares of Bancorporation Common Stock. You
will also be asked to approve a change of name of Bancorporation to "FirstMerit
Corporation," as well as to consider and vote upon an increase in the authorized
shares of Common and Preferred Stock.
Your Board of Directors believes that the Merger, the name change and the
increase in shares is in the best interests of Bancorporation's stockholders and
will provide significant value to them. Additional information is contained in
the accompanying Prospectus and Joint Proxy Statement, which I urge you to read
carefully.
The Board of Directors has received opinions from Alex. Brown & Sons
Incorporated, Bancorporation's financial advisor, to the effect that, as of the
date the Agreement of Affiliation and Plan of Merger was signed and as of the
date of the accompanying Prospectus and Joint Proxy Statement, the exchange
ratio for exchanging the CIVISTA Common Stock for Bancorporation Common Stock
pursuant to the Agreement of Affiliation and Plan of Merger was fair to the
holders of Bancorporation Common Stock.
YOUR BOARD OF DIRECTORS HAS APPROVED THE MERGER, THE PROPOSAL TO CHANGE THE
NAME AND THE PROPOSALS TO INCREASE THE AUTHORIZED SHARES AND UNANIMOUSLY
RECOMMENDS THAT YOU VOTE "FOR" ALL OF THE PROPOSALS. TO APPROVE EACH OF THE
PROPOSALS, IT WILL BE NECESSARY TO OBTAIN THE AFFIRMATIVE VOTE OF THE HOLDERS OF
TWO-THIRDS OF THE BANCORPORATION OUTSTANDING COMMON STOCK. AN ABSTENTION OR
FAILURE TO VOTE HAS THE SAME EFFECT AS A VOTE AGAINST THE PROPOSALS. IT IS,
THEREFORE, IMPORTANT THAT YOU VOTE ON EACH OF THESE PROPOSALS.
A Proxy is enclosed for your use. Please indicate your voting instructions
and sign, date and mail this Proxy promptly in the return envelope provided.
Whether or not you plan to attend the special meeting in person, it is important
that you return the enclosed Proxy so that your shares of Bancorporation Common
Stock will be voted.
Sincerely,
Howard L. Flood
President and Chief Executive
Officer
IMPORTANT: IF YOUR BANCORPORATION SHARES ARE HELD IN THE NAME OF A BROKERAGE
FIRM OR NOMINEE, ONLY THEY CAN EXECUTE A PROXY ON YOUR BEHALF. TO ASSURE THAT
YOUR SHARES ARE VOTED, WE URGE YOU TO TELEPHONE TODAY THE INDIVIDUAL RESPONSIBLE
FOR YOUR ACCOUNT AT YOUR BROKERAGE FIRM AND OBTAIN INSTRUCTIONS ON HOW TO DIRECT
HIM OR HER TO EXECUTE A PROXY.
<PAGE> 6
FIRST BANCORPORATION OF OHIO
First National Tower
Akron, Ohio 44308
-----------------------------------------------------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
DECEMBER 15, 1994
-----------------------------------------------------------------
A Special Meeting of Stockholders of First Bancorporation of Ohio, an Ohio
corporation ("Bancorporation"), will be held at the Quaker Square Hilton Inn,
135 South Broadway, Akron, Ohio 44308, on Thursday, December 15, 1994, at 10:00
A.M. (local time), for the following purposes:
1. To adopt the Agreement of Affiliation and Plan of Merger dated as
of August 10, 1994 (the "Agreement"), by and between Bancorporation
and The CIVISTA Corporation ("CIVISTA");
2. To change the name of Bancorporation to "FirstMerit Corporation" by
amending Article First of Bancorporation's Amended and Restated
Articles of Incorporation ("Bancorporation's Articles").
3. To amend Bancorporation's Articles to increase the authorized
Common Stock from 40,000,000 to 80,000,000 shares;
4. To amend Bancorporation's Articles to increase the authorized
Preferred Stock from 3,500,000 to 7,000,000 shares; and
5. To transact such other business as may properly come before the
meeting or any adjournments thereof.
Pursuant to the Code of Regulations of Bancorporation, only Bancorporation
stockholders of record as of the close of business on October 24, 1994, have the
right to receive notice of, and to vote at, the special meeting and any
adjournment(s) thereof.
The Agreement provides for the merger of CIVISTA with and into
Bancorporation, as described in the accompanying Prospectus and Joint Proxy
Statement. The accompanying document constitutes the Proxy Statement of
Bancorporation for the special meeting. A copy of the Agreement of Affiliation
and Plan of Merger is attached to the Prospectus and Joint Proxy Statement as
Appendix A.
By Order of the Board of Directors
Terry E. Patton
Secretary
Akron, Ohio
November 2, 1994
WHETHER OR NOT YOU PLAN TO ATTEND THIS MEETING, PLEASE COMPLETE,
SIGN, DATE AND PROMPTLY RETURN THE ACCOMPANYING PROXY
IN THE ENCLOSED ENVELOPE.
ANY PROXY GIVEN BY A STOCKHOLDER MAY BE REVOKED BY SUBMITTING A DULY
EXECUTED PROXY BEARING A LATER DATE. ANY STOCKHOLDER PRESENT AT THE
SPECIAL MEETING MAY REVOKE HIS OR HER PROXY AND VOTE PERSONALLY ON EACH
MATTER BROUGHT BEFORE THE SPECIAL MEETING.
<PAGE> 7
JOINT PROXY STATEMENT
FIRST BANCORPORATION
OF OHIO
AND
THE CIVISTA CORPORATION
SPECIAL MEETINGS OF STOCKHOLDERS
TO BE HELD ON DECEMBER 15, 1994
PROSPECTUS
FIRST BANCORPORATION
OF OHIO
COMMON STOCK, NO PAR VALUE
(NOT TO EXCEED 6,513,119 SHARES)
This Prospectus and Joint Proxy Statement is being furnished to the holders
of common stock of The CIVISTA Corporation, an Ohio corporation ("CIVISTA"), in
connection with the solicitation of proxies by the Board of Directors of CIVISTA
for use at a special meeting of CIVISTA's stockholders to be held at 10:00 A.M.
on Thursday, December 15, 1994, at 100 Central Plaza South, Canton, Ohio, and at
any adjournments thereof (the "CIVISTA Special Meeting"). This Prospectus and
Joint Proxy Statement is also being furnished to the holders of common stock of
First Bancorporation of Ohio, an Ohio corporation ("Bancorporation"), in
connection with the solicitation of proxies by the Board of Directors of
Bancorporation for use at a special meeting of Bancorporation's stockholders to
be held at 10:00 A.M. on Thursday, December 15, 1994, at the Quaker Square
Hilton Inn, 135 South Broadway, Akron, Ohio 44308, and at any adjournments
thereof (the "Bancorporation Special Meeting")
This Prospectus and Joint Proxy Statement also constitutes a Prospectus of
Bancorporation in respect of up to 6,513,119 shares of Bancorporation common
stock, no par value ("Bancorporation Common Stock"), to be issued in connection
with the proposed merger (the "Merger") of CIVISTA with and into Bancorporation.
Upon consummation of the Merger, each outstanding share of CIVISTA common stock,
without par value ("CIVISTA Common Stock"), other than shares held by CIVISTA
stockholders who properly perfect dissenters' rights, will be exchanged for
1.723 shares of Bancorporation Common Stock. See "TERMS OF MERGER -- Conversion
of CIVISTA Capital Stock into Bancorporation Capital Stock."
The outstanding shares of Bancorporation Common Stock are, and the shares
of Bancorporation Common Stock offered hereby will be, quoted on the NASDAQ
National Market System ("NASDAQ"). The closing sales price of Bancorporation
Common Stock reported on NASDAQ on October 21, 1994, was $26.75 per share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS AND PROXY STATEMENT. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
THE SECURITIES OF FIRST BANCORPORATION OF OHIO OFFERED HEREBY ARE NOT
SAVINGS ACCOUNTS, DEPOSITS, OR OTHER OBLIGATIONS OF A BANK OR SAVINGS
ASSOCIATION AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY.
This Prospectus and Joint Proxy Statement shall not constitute a prospectus for
public reoffering of the Bancorporation Common Stock issuable pursuant to the
Merger.
THE DATE OF THIS PROSPECTUS AND JOINT PROXY STATEMENT IS NOVEMBER 2, 1994.
<PAGE> 8
AVAILABLE INFORMATION
Each of Bancorporation and CIVISTA is subject to the informational
requirements of the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), and in accordance therewith files reports, proxy statements, and other
information with the Securities and Exchange Commission (the "Commission").
Bancorporation has filed with the Commission a Registration Statement on Form
S-4 (the "Registration Statement") under the Securities Act of 1933, as amended
(the "Securities Act"), covering the Bancorporation securities to be issued to
CIVISTA stockholders in the Merger. As permitted by the rules and regulations of
the Commission, this Prospectus and Joint Proxy Statement omits certain
information, exhibits and undertakings contained in the Registration Statement.
Reference is made to the Registration Statement and to the exhibits thereto for
further information. Statements contained herein concerning such documents are
not necessarily complete and, in each instance, reference is made to the copy of
such document filed as an exhibit to the Registration Statement. Each such
statement is qualified in its entirety by such reference.
The Registration Statement and the exhibits thereto, as well as the
reports, proxy statements and other information filed with the Commission by
Bancorporation and CIVISTA under the Exchange Act, may be inspected and copied
at the public reference facilities maintained by the Commission at Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
regional offices of the Commission located at the Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661 and 7 World Trade
Center, 13th Floor, New York, New York 10048. Copies of such material may also
be obtained at prescribed rates from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549. In addition,
reports, proxy statements and other information concerning Bancorporation may be
inspected at the offices of the National Association of Securities Dealers,
Inc., 1735 K Street, N.W., Washington, D.C. 20006.
ALL INFORMATION CONTAINED OR INCORPORATED IN THIS PROSPECTUS AND JOINT
PROXY STATEMENT WITH RESPECT TO BANCORPORATION WAS SUPPLIED BY BANCORPORATION
AND ALL INFORMATION CONTAINED OR INCORPORATED IN THIS PROSPECTUS AND JOINT PROXY
STATEMENT WITH RESPECT TO CIVISTA WAS SUPPLIED BY CIVISTA. ALTHOUGH NEITHER
BANCORPORATION NOR CIVISTA HAS ANY KNOWLEDGE THAT WOULD INDICATE THAT ANY
STATEMENTS OR INFORMATION RELATING TO THE OTHER PARTY CONTAINED HEREIN IS
INACCURATE OR INCOMPLETE, NEITHER BANCORPORATION NOR CIVISTA CAN WARRANT THE
ACCURACY OR COMPLETENESS OF SUCH STATEMENTS OR INFORMATION AS THEY RELATE TO THE
OTHER PARTY.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
THIS PROSPECTUS AND JOINT PROXY STATEMENT INCORPORATES CERTAIN DOCUMENTS OF
BANCORPORATION BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED
HEREWITH. THESE DOCUMENTS (WITHOUT EXHIBITS, UNLESS SUCH EXHIBITS ARE
SPECIFICALLY INCORPORATED BY REFERENCE INTO THIS PROSPECTUS AND JOINT PROXY
STATEMENT) ARE AVAILABLE WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL
OWNER, TO WHOM A COPY OF THIS PROSPECTUS AND JOINT PROXY STATEMENT IS DELIVERED,
UPON WRITTEN OR ORAL REQUEST. REQUESTS FOR SUCH DOCUMENTS SHOULD BE DIRECTED TO
TERRY E. PATTON, SECRETARY, FIRST BANCORPORATION OF OHIO, 106 S. MAIN STREET,
AKRON, OHIO 44308 (TELEPHONE (216) 384-8000). IN ORDER TO ENSURE TIMELY DELIVERY
OF SUCH DOCUMENTS, ANY REQUEST SHOULD BE MADE NO LATER THAN DECEMBER 8, 1994.
THIS PROSPECTUS AND JOINT PROXY STATEMENT INCORPORATES CERTAIN DOCUMENTS OF
CIVISTA BY REFERENCE WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE
DOCUMENTS (WITHOUT EXHIBITS, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED
BY REFERENCE INTO THIS PROSPECTUS AND JOINT PROXY STATEMENT) ARE AVAILABLE
WITHOUT CHARGE TO EACH PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM A COPY OF
THIS PROSPECTUS AND JOINT PROXY STATEMENT IS DELIVERED, UPON WRITTEN OR ORAL
REQUEST. REQUESTS FOR SUCH DOCUMENTS SHOULD BE DIRECTED TO JANICE R. VAN
VOORHIS, SECRETARY, THE CIVISTA CORPORATION, 100 CENTRAL PLAZA SOUTH, CANTON,
OHIO 44702 (TELEPHONE (216) 456-7757). IN ORDER TO ENSURE TIMELY DELIVERY OF
SUCH DOCUMENTS, ANY REQUEST SHOULD BE MADE NO LATER THAN DECEMBER 8, 1994.
-i-
<PAGE> 9
The following documents filed with the Commission under the Exchange Act by
Bancorporation are hereby incorporated by reference into this Prospectus and
Joint Proxy Statement: (a) Bancorporation's Annual Report on Form 10-K for the
year ended December 31, 1993; (b) Bancorporation's Quarterly Reports on Form
10-Q for the quarters ended March 31, 1994 and June 30, 1994; and (c)
Bancorporation's Current Report on Form 8-K filed on August 16, 1994.
The following documents filed with the Commission under the Exchange Act by
CIVISTA are hereby incorporated by reference into this Prospectus and Joint
Proxy Statement: (a) CIVISTA's Annual Report on Form 10-K for the year ended
September 30, 1993; (b) CIVISTA's Quarterly Reports on Form 10-Q for the
quarters ended December 31, 1993, March 31, 1994 and June 30, 1994; and (c)
CIVISTA's Current Report on Form 8-K filed on August 16, 1994.
All documents filed by Bancorporation and CIVISTA under Sections 13(a),
13(c), 14, or 15 (d) of the Exchange Act after the date of this Prospectus and
Joint Proxy Statement and prior to the date of the Bancorporation and CIVISTA
Special Meetings shall be deemed to be incorporated by reference in this
Prospectus and Joint Proxy Statement and to be a part hereof from the date of
filing such documents. Any statement contained herein or in a document
incorporated or deemed to be incorporated by reference herein shall be deemed to
be modified or superseded for purposes of this Prospectus and Joint Proxy
Statement to the extent that a statement contained herein or in any other
subsequently filed document which is also incorporated or deemed to be
incorporated by reference herein modifies or supersedes such statement. Any such
statement, as so modified or superseded, shall not be deemed, except as so
modified or superseded, to constitute a part of this Prospectus and Joint Proxy
Statement.
The information relating to Bancorporation and CIVISTA contained in this
Prospectus and Joint Proxy Statement should be read together with the
information in the documents incorporated by reference.
------------------------------------------------------
NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS AND JOINT PROXY STATEMENT AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON
AS HAVING BEEN AUTHORIZED BY BANCORPORATION OR CIVISTA. THIS PROSPECTUS AND
JOINT PROXY STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF
AN OFFER TO PURCHASE, THE SECURITIES OFFERED BY THIS PROSPECTUS AND JOINT PROXY
STATEMENT OR THE SOLICITATION OF A PROXY IN ANY JURISDICTION IN WHICH IT IS
UNLAWFUL TO MAKE SUCH AN OFFER, SOLICITATION OF AN OFFER, OR PROXY SOLICITATION.
NEITHER THE DELIVERY OF THIS PROSPECTUS AND JOINT PROXY STATEMENT, NOR ANY
DISTRIBUTION OF THE SECURITIES OFFERED PURSUANT TO THIS PROSPECTUS AND JOINT
PROXY STATEMENT SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY IMPLICATION THAT
THERE HAS BEEN NO CHANGE IN THE INFORMATION SET FORTH HEREIN OR IN THE AFFAIRS
OF BANCORPORATION OR CIVISTA OR ANY OF THEIR RESPECTIVE SUBSIDIARIES SINCE THE
DATE OF THIS PROSPECTUS AND JOINT PROXY STATEMENT.
-ii-
<PAGE> 10
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION................ i
INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE.......................... i
SUMMARY.............................. 1
INTRODUCTION......................... 12
SPECIAL MEETING OF CIVISTA
STOCKHOLDERS
Date, Time, and Place.............. 12
Purpose of Meeting................. 12
Record Date; Shares Outstanding and
Entitled to Vote................ 12
Vote Required...................... 12
Voting; Solicitation and Revocation
of Proxies...................... 12
SPECIAL MEETING OF BANCORPORATION
STOCKHOLDERS
Date, Time, and Place.............. 13
Purpose of Meeting................. 13
Record Date; Shares Outstanding and
Entitled to Vote................ 13
Second Proposal to Change
Bancorporation's Name........... 13
Third Proposal to Increase the
Authorized Number of Shares of
Common Stock.................... 14
Fourth Proposal to Increase the
Authorized Number of Shares of
Preferred Stock................. 14
Matters Common to Both Stock
Increase Proposals.............. 14
Vote Required for All Proposals.... 16
Voting; Solicitation and Revocation
of Proxies...................... 16
BACKGROUND OF AND REASONS FOR MERGER
Background of Merger -- CIVISTA.... 17
Reasons for Merger -- CIVISTA...... 18
Opinion of CIVISTA's Financial
Advisor......................... 18
Recommendation of CIVISTA's Board
of Directors.................... 21
Reasons for Merger --
Bancorporation.................. 22
Opinion of Bancorporation's
Financial Advisor............... 22
Recommendation of Bancorporation's
Board of Directors.............. 25
TERMS OF MERGER
General............................ 25
Conversion of CIVISTA Capital Stock
into Bancorporation Capital
Stock........................... 25
<CAPTION>
PAGE
----
<S> <C>
Conduct of Bancorporation's
Business Pending the Merger..... 27
Conduct of CIVISTA's Business
Pending the Merger.............. 27
Conditions to Merger............... 28
Regulatory Approvals............... 30
Actions Required for Regulatory
Approval........................ 30
Waiver of Conditions, Amendment, or
Termination of the Merger
Agreement....................... 30
Effective Time..................... 31
CIVISTA Stock Option............... 32
Interests of Certain Persons in
Merger.......................... 34
Employees of CIVISTA............... 36
Certain Federal Income Tax
Consequences.................... 36
Accounting Treatment of Merger..... 37
Resales of Bancorporation Common
Stock Received in Merger........ 37
Bancorporation's Articles of
Incorporation and Code of
Regulations..................... 38
RIGHTS OF DISSENTING STOCKHOLDERS.... 38
PRO FORMA CONDENSED COMBINED
FINANCIAL STATEMENTS (UNAUDITED)... 39
BUSINESS OF BANCORPORATION........... 43
BUSINESS OF CIVISTA.................. 45
REGULATORY MATTERS................... 46
DESCRIPTION OF BANCORPORATION CAPITAL
STOCK.............................. 55
COMPARISON OF BANCORPORATION AND
CIVISTA CAPITAL STOCK.............. 55
LEGAL OPINION........................ 62
EXPERTS.............................. 62
APPENDICES
A. Agreement of Affiliation and
Plan of Merger
B. Fairness Opinion of Alex. Brown
& Sons Incorporated
C. Fairness Opinion of McDonald &
Company Securities, Inc.
D. The CIVISTA Corporation Stock
Purchase Option
E. Ohio Dissenters' Rights Statute
</TABLE>
-iii-
<PAGE> 11
SUMMARY
THE FOLLOWING IS A SUMMARY OF CERTAIN INFORMATION CONTAINED ELSEWHERE IN
THIS PROSPECTUS AND JOINT PROXY STATEMENT AND IS NOT INTENDED TO BE A COMPLETE
STATEMENT OF ALL MATERIAL FACTS REGARDING THE MATTERS TO BE CONSIDERED AT THE
SPECIAL MEETINGS OF STOCKHOLDERS OF BANCORPORATION AND CIVISTA. THIS SUMMARY IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MORE DETAILED INFORMATION
CONTAINED ELSEWHERE IN THIS PROSPECTUS AND JOINT PROXY STATEMENT, THE APPENDICES
HERETO AND THE DOCUMENTS REFERRED TO AND INCORPORATED HEREIN.
INTRODUCTION
The Boards of Directors of Bancorporation and CIVISTA have each approved
the Agreement of Affiliation and Plan of Merger dated as of August 10, 1994, by
and between Bancorporation and CIVISTA (the "Merger Agreement"). A copy of the
Merger Agreement is attached hereto as Appendix A. The Merger Agreement provides
for the proposed merger of CIVISTA with and into Bancorporation. The terms of
the Merger and information regarding the Bancorporation and CIVISTA Special
Meetings are summarized below.
PARTIES TO THE MERGER
FIRST BANCORPORATION OF OHIO. Bancorporation is a bank holding company
organized in 1981 under the laws of the State of Ohio and registered under the
Bank Holding Company Act of 1956, as amended ("BHCA"). As of September 30, 1994,
Bancorporation had total consolidated assets of approximately $4.8 billion and
total stockholders' equity of approximately $432.7 million. Bancorporation's
subsidiaries include First National Bank of Ohio, The Old Phoenix National Bank
of Medina, Elyria Savings & Trust National Bank, The First National Bank in
Massillon, Peoples National Bank, Peoples Bank, N.A., Life Savings Bank, FSB,
Bancorp Trust Company, N.A., FBOH Credit Life Insurance Company and FBOH
Community Development Corporation. On September 30, 1994, Bancorporation and its
subsidiaries employed approximately 2,967 full and part-time employees. See
"BUSINESS OF BANCORPORATION."
Bancorporation's principal business consists of owning and supervising its
subsidiaries which primarily operate in Ashtabula, Cuyahoga, Erie, Geauga, Knox,
Lake, Lorain, Medina, Portage, Richland, Stark, Summit and Wayne Counties in
Ohio. Although Bancorporation is principally a banking organization, its direct
and indirect nonbanking subsidiaries also provide securities brokerage services,
corporate and personal trust services, equipment lease financing and other
financial services. Bancorporation directs the overall policies and financial
resources of the subsidiaries, but the day-to-day affairs, including lending
practices, services, and interest rates, are managed by the officers and
directors of the subsidiaries, some of whom are also officers and directors of
Bancorporation. Through Bancorp Trust Company, N.A., with its principal office
in Naples, Florida, and Life Savings Bank, FSB, with its principal office in
Clearwater, Florida, Bancorporation also serves customers throughout
southwestern Florida. FBOH Credit Life Insurance engages in underwriting of
credit life and credit accident and health insurance directly related to the
extension of credit by the subsidiary banks to their customers. The principal
executive offices of Bancorporation are located at 106 S. Main Street, Akron,
Ohio 44308, and its telephone number is (216) 384-8000.
THE CIVISTA CORPORATION. CIVISTA is a unitary savings and loan holding
company incorporated under the laws of the State of Ohio in 1987 and registered
under the Home Owners' Loan Act of 1933 ("HOLA"). Headquartered in Canton, Ohio,
CIVISTA owns all of the outstanding shares of Citizens Savings Bank of Canton, a
savings and loan association formed under Ohio law ("Citizens"). As of June 30,
1994, CIVISTA had total consolidated assets of $808.2 million and total
stockholders' equity of $89.5 million. Citizens conducts business through 11
offices located in Stark County, Ohio. On September 30, 1994, CIVISTA and its
subsidiaries employed approximately 416 full and part-time employees. See
"BUSINESS OF CIVISTA." The principal executive offices of CIVISTA are located at
100 Central Plaza South, Canton, Ohio 44702, and its telephone number is (216)
456-7757.
1
<PAGE> 12
TERMS OF MERGER
<TABLE>
<S> <C>
FORMAT CIVISTA will be merged with and into Bancorporation, and
Bancorporation will be the surviving corporation. See
"TERMS OF MERGER -- General." After consummation of the
Merger, Citizens will be merged with and into The First
National Bank in Massillon, a national bank subsidiary
of Bancorporation ("First National-Massillon"), under
the charter of First National-Massillon, but operated
under the name "Citizens National Bank," or a similar
name ("Citizens Bank").
CONVERSION OF CIVISTA Upon consummation of the Merger, each outstanding share
COMMON STOCK of CIVISTA Common Stock will be cancelled and exchanged
for the right to receive 1.723 shares of Bancorporation
Common Stock (the "Exchange Ratio"). If the application
of the Exchange Ratio would result in the right to
receive a fraction of Bancorporation Common Stock, cash
will be paid by Bancorporation to CIVISTA stockholders
in lieu of such fractional share. See "TERMS OF
MERGER -- Conversion of CIVISTA Capital Stock into
Bancorporation Capital Stock," "DESCRIPTION OF
BANCORPORATION CAPITAL STOCK" and "COMPARISON OF
BANCORPORATION AND CIVISTA CAPITAL STOCK."
VALUE OF THE MERGER If the Merger had been consummated on October 21, 1994,
based on the Exchange Ratio and the closing sales price
of Bancorporation Common Stock as reported on NASDAQ on
that date, the Merger would have had a per share value
of $46.09 to holders of CIVISTA Common Stock and the
approximate total value of all of the Bancorporation
Common Stock issued in the Merger would have equalled
approximately $174.2 million.
TAX AND ACCOUNTING Consummation of the Merger is conditioned upon the
TREATMENT receipt by Bancorporation of an opinion of counsel to
the effect that the Merger will constitute a tax-free
reorganization under Section 368(a)(1)(A) of the
Internal Revenue Code of 1986, as amended ("Code").
Consummation of the Merger is also conditioned upon
receipt by Bancorporation of a letter from its
independent auditors that the Merger will be accounted
for as a "pooling-of-interests." See "TERMS OF
MERGER -- Certain Federal Income Tax Consequences" and
"Accounting Treatment of Merger."
CONDITIONS In addition to those conditions listed under "Tax and
Accounting Treatment" immediately above, consummation of
the Merger is conditioned upon the adoption of the
Merger Agreement by the requisite vote of the
Bancorporation and CIVISTA stockholders; the receipt of
all necessary approvals of the Merger from government
regulatory agencies; the absence of a material adverse
change in the consolidated financial condition, results
of operations, or business of Bancorporation or CIVISTA;
the truth and accuracy of the representations and
warranties of each party as set forth in the Merger
Agreement; the performance of obligations by each party;
and certain other conditions. See "TERMS OF
MERGER -- Conditions to Merger" and "Regulatory
Approvals."
</TABLE>
2
<PAGE> 13
<TABLE>
<S> <C>
EFFECTIVE TIME The time that the Merger is consummated is referred to
herein as the "Effective Time." See "TERMS OF
MERGER -- Effective Time." It is currently anticipated
that the Merger will be consummated during the first
quarter of 1995.
RIGHT OF CIVISTA CIVISTA may terminate the Merger Agreement if: (i) the
TO TERMINATE MERGER average per share daily closing price of Bancorporation
AGREEMENT BASED UPON PRICE Common Stock as reported on NASDAQ for a specified
20-day period preceding the Effective Time is less than
$21.875; and (ii) when compared to $25.00 (the closing
price of Bancorporation Common Stock on August 9, 1994),
such average per share price reflects a decline that is
10% greater than the decline in a weighted average index
of 18 identified financial institution holding company
stocks between August 9, 1994 and the average during a
specified 20-day period prior to the Closing Date of the
Merger. See "TERMS OF MERGER -- Waiver of Conditions,
Amendment, or Termination of the Merger Agreement."
NO SOLICITATION CIVISTA has agreed, subject to certain conditions, that
neither it nor any of its subsidiaries will solicit or
initiate any offers from any person to acquire CIVISTA
or any of its subsidiaries or any material amount of its
assets or any of its equity securities. See "TERMS OF
MERGER -- Conduct of CIVISTA's Business Pending the
Merger."
CIVISTA STOCK OPTION CIVISTA has granted Bancorporation an option to purchase
shares of CIVISTA Series A Preferred Stock under certain
circumstances set forth in The CIVISTA Corporation Stock
Purchase Option dated as of August 10, 1994 (the
"CIVISTA Stock Option"). The CIVISTA Stock Option
provides Bancorporation an option to purchase up to
350,655 shares of CIVISTA Series A Preferred Stock at
$33.50 per share, subject to certain adjustments. See
"TERMS OF MERGER -- CIVISTA Stock Option."
</TABLE>
BACKGROUND OF MERGER -- CIVISTA
Over the past several years as the problems of the thrift industry have
been the subject of national discussion, the directors and senior management of
CIVISTA have monitored the applicability of a number of industry-wide concerns
that could affect the long-term prosperity of CIVISTA. These potential concerns
included interest rate risk, the prospect of savings and loan associations
paying significantly higher deposit insurance premiums than commercial banks,
increased regulation, and the practical hurdles to offering commercial bank-type
services to its customers. (See "BACKGROUND OF AND REASONS FOR MERGER -- Reasons
for Merger -- CIVISTA.")
Although CIVISTA has been consistently profitable over the years and the
capital of CIVISTA has met or exceeded all regulatory requirements, these
potential concerns prompted the CIVISTA Board of Directors to discuss the future
prospects of CIVISTA, particularly in relation to the manner by which
stockholder value could be maximized. In November, 1992, the directors met with
McDonald & Company Securities, Inc. ("McDonald & Company"), an investment
banking company, to review strategic alternatives available to CIVISTA including
the option of remaining as an independent entity and the option of combining
with another financial institution. After several months of review, the
directors decided to remain as an independent entity and to continue to focus on
operating CIVISTA on a profitable basis. The directors, however, continued to
discuss their concerns about the long-term viability and desirability of CIVISTA
operating as an independent thrift institution and the limited market liquidity
of CIVISTA's Common Stock. As a result of these discussions, in January, 1994,
the Board of Directors authorized the retention of McDonald & Company
3
<PAGE> 14
to assist CIVISTA in exploring strategic alternatives to enhance stockholder
value, including the possibility of a merger with another financial institution.
Following a strategic review by McDonald & Company, the directors decided
to pursue the possibility of a merger with another financial institution. The
Board of Directors provided McDonald & Company with a set of criteria for
considering potential merger partners and in May, 1994, instructed McDonald &
Company to conduct a confidential inquiry into the possible interest of a number
of entities in pursuing an acquisition of CIVISTA. Following such inquiry, on
June 21, 1994, three bank holding companies submitted preliminary indications of
interest and were offered the opportunity to conduct a due diligence review of
CIVISTA. Upon the completion of such due diligence review, on August 1, 1994,
Bancorporation and another bank holding company submitted proposals to the
CIVISTA Board of Directors in respect of the acquisition of CIVISTA. At an
extensive meeting on August 3, 1994, the CIVISTA directors carefully reviewed
each of the proposals. Such review included separate discussions among those
directors not otherwise affiliated with CIVISTA, constituting an Outside
Directors Committee that previously had been established to independently
consider proposals from potential merger partners. The Bancorporation proposal
contemplated an exchange of Bancorporation Common Stock for CIVISTA Common Stock
at the Exchange Ratio. The second proposal also offered an exchange of CIVISTA
Common Stock for common stock of such bidder at a proposed fixed exchange ratio.
Following extensive review and discussion of the two proposals, including
consultations with McDonald & Company and legal counsel, the Board of Directors
of CIVISTA elected to pursue negotiations exclusively with Bancorporation. Such
decision was based primarily on the belief by the directors that there was a
material difference between the aggregate value of the Bancorporation proposal
and the aggregate value of the second proposal. Late on August 3, 1994, CIVISTA
received a revised second proposal from the other bidder. The directors compared
the proposed Bancorporation transaction to the revised second proposal submitted
by the other bidder and determined that there remained a material difference
between the aggregate value of the Bancorporation proposal and the aggregate
value of the revised second proposal.
The directors provided specific guidelines to senior management for the
negotiation with Bancorporation of certain terms and conditions. During the
period of August 3 through August 9, 1994, senior management of CIVISTA
negotiated with senior management of Bancorporation regarding the material terms
of the Merger Agreement and the CIVISTA Stock Option. At a meeting held on
August 9, 1994, the CIVISTA directors, with the assistance of McDonald & Company
and legal counsel, reviewed in detail the terms and conditions contained in the
forms of the proposed Merger Agreement, the CIVISTA Stock Option and related
transaction matters. After detailed discussion among the directors, including a
separate meeting of the Outside Directors Committee, and after receiving the
oral opinion of McDonald & Company that, as of that date, the Exchange Ratio was
fair to the stockholders of CIVISTA from a financial point of view, the
directors concluded that the terms and conditions contained in the form of the
Merger Agreement and the CIVISTA Stock Option would provide for a transaction
which was fair to and in the best interests of the CIVISTA stockholders.
Accordingly, the Board of Directors approved the terms and conditions of the
Merger Agreement and the CIVISTA Stock Option and authorized the execution of
those documents by the senior management of CIVISTA.
REASONS FOR MERGER
CIVISTA. After careful review and consideration, and after discussions
with McDonald & Company, CIVISTA's Board of Directors determined that the terms
of the Merger are fair to, and in the best interests of, CIVISTA and its
stockholders. CIVISTA's directors believe that the Merger will provide
significant value to all CIVISTA stockholders and, at the same time, enable
holders of CIVISTA Common Stock to obtain increased liquidity for their shares
and to participate in the expanded opportunities for growth that the Merger will
make possible. See "BACKGROUND OF AND REASONS FOR MERGER -- Reasons for
Merger -- CIVISTA" and "Recommendation of CIVISTA's Board of Directors."
ACCORDINGLY, CIVISTA'S DIRECTORS UNANIMOUSLY RECOMMEND THAT CIVISTA
STOCKHOLDERS VOTE FOR THE MERGER.
4
<PAGE> 15
BANCORPORATION. After careful review and consideration, and after
discussions with Alex. Brown & Sons Incorporated ("Alex. Brown"), an investment
banking company, Bancorporation's Board of Directors determined that the terms
of the Merger would be fair to and in the best interests of the stockholders of
Bancorporation. The Merger with CIVISTA represents the continued realization of
Bancorporation's long-standing philosophy of acquiring retail oriented financial
institutions with dominant market share for continued customer growth.
The Merger represents a continuation of Bancorporation's acquisition
strategy of combining with banking institutions in Ohio and contiguous states
where Bancorporation already has or intends to obtain a significant market
position. The Merger will expand Bancorporation's existing operations in its
major northern Ohio market, providing both stronger market positions and
opportunities to achieve efficiencies for the combined operations in that
market. Bancorporation will draw on its experience with previous acquisitions in
seeking to achieve an effective consolidation of CIVISTA's operations with those
of Bancorporation. See "BACKGROUND OF AND REASONS FOR MERGER -- Reasons for
Merger -- Bancorporation" and "Recommendation of Bancorporation's Board of
Directors."
ACCORDINGLY, BANCORPORATION'S DIRECTORS UNANIMOUSLY RECOMMEND THAT
BANCORPORATION STOCKHOLDERS VOTE FOR THE MERGER.
5
<PAGE> 16
BANCORPORATION AND
CIVISTA SPECIAL MEETINGS
<TABLE>
<S> <C>
MEETING DATE, TIME The Bancorporation and CIVISTA Special Meetings will
AND PLACE each be held on Thursday, December 15, 1994, at 10:00
A.M. (local time). The Bancorporation Special Meeting
will be held at the Quaker Square Hilton Inn, 135 South
Broadway, Akron, Ohio. The CIVISTA Special Meeting will
be held at 100 Central Plaza South, Canton, Ohio.
PURPOSE OF MEETINGS The primary purpose of the Bancorporation and CIVISTA
Special Meetings is to vote on the adoption of the
Merger Agreement. At the Bancorporation Special Meeting,
the Bancorporation stockholders will also be asked to
consider and vote upon a change of Bancorporation's name
and an increase in the authorized number of shares of
capital stock of Bancorporation. See "SPECIAL MEETING OF
CIVISTA STOCKHOLDERS -- Purpose of Meeting" and "SPECIAL
MEETING OF BANCORPORATION STOCKHOLDERS -- Purpose of
Meeting."
SHARES ENTITLED TO VOTE Shares of CIVISTA Common Stock are the only shares
entitled to vote at the CIVISTA Special Meeting and
shares of Bancorporation Common Stock are the only
shares entitled to vote at the Bancorporation Special
Meeting.
REQUIRED VOTES TO ADOPT The affirmative vote of the holders of two-thirds of the
PROPOSALS outstanding shares of CIVISTA Common Stock is required
to adopt the Merger Agreement at the CIVISTA Special
Meeting. The affirmative vote of the holders of
two-thirds of the outstanding shares of Bancorporation
Common Stock is required to adopt the Merger Agreement
and the proposals to change Bancorporation's name and to
increase the authorized capital stock of Bancorporation
at the Bancorporation Special Meeting.
SHARES OUTSTANDING AND October 24, 1994, is the record date for the CIVISTA
RECORD DATE Special Meeting. On such date, there were 3,498,904
shares of CIVISTA Common Stock outstanding. Only CIVISTA
stockholders of record as of such date are entitled to
notice of, and to vote at, the CIVISTA Special Meeting.
October 24, 1994, is the record date for the
Bancorporation Special Meeting. On such date, there were
27,163,171 shares of Bancorporation Common Stock
outstanding. Only Bancorporation stockholders of record
as of such date are entitled to notice of, and to vote
at, the Bancorporation Special Meeting.
</TABLE>
6
<PAGE> 17
<TABLE>
<S> <C>
SHARES OWNED BY DIRECTORS, As of October 24, 1994, CIVISTA's directors and
OFFICERS AND AFFILIATES OF executive officers and their affiliates beneficially
CIVISTA AND BANCORPORATION owned 265,070 shares of CIVISTA Common Stock (excluding
any shares that may be acquired by the exercise of
outstanding options to acquire CIVISTA Common Stock),
which represents 7.57% of the outstanding shares of
CIVISTA Common Stock entitled to vote at the CIVISTA
Special Meeting. As of the same date, Bancorporation's
directors and executive officers and their affiliates
beneficially owned 404,553 shares of Bancorporation
Common Stock (excluding any shares that may be acquired
by the exercise of outstanding stock options to acquire
Bancorporation Common Stock), which represents 1.48% of
the outstanding shares of Bancorporation Common Stock
entitled to vote at the Bancorporation Special Meeting.
As of October 24, 1994, certain subsidiaries of
Bancorporation, acting as fiduciaries, custodians, or
agents, had sole or shared voting power as to 1,492,605
shares of Bancorporation Common Stock or 5.49% of the
outstanding Bancorporation Common Stock entitled to vote
at the Bancorporation Special Meeting and 11,280 shares
of CIVISTA Common Stock, which is less than one percent
of the outstanding shares of CIVISTA Common Stock
entitled to vote at the CIVISTA Special Meeting. See
"SPECIAL MEETING OF CIVISTA STOCKHOLDERS -- Vote
Required" and "SPECIAL MEETING OF BANCORPORATION
STOCKHOLDERS -- Vote Required."
DISSENTERS' RIGHTS Any stockholder of Bancorporation or CIVISTA who does
not vote in favor of the approval of the Merger
Agreement and who delivers a written demand for
appraisal of such stockholder's shares in the manner
provided by Section 1701.85 of the Ohio General
Corporation Law (a copy of which is attached hereto as
Appendix D), shall be entitled, if and when the Merger
becomes effective, and upon strict compliance with
certain procedures set forth in Section 1701.85, to
receive the fair cash value of the CIVISTA Common Stock
if such dissenter is a stockholder of CIVISTA, or the
fair cash value of the Bancorporation Common Stock if
such dissenter is a stockholder of Bancorporation. See
"RIGHTS OF DISSENTING STOCKHOLDERS."
</TABLE>
INTERESTS OF CERTAIN PERSONS IN MERGER
Mr. Howard L. Flood, the President and Chief Executive Officer of
Bancorporation, will continue as the President and Chief Executive Officer of
Bancorporation, as the surviving corporation. The persons currently serving as
directors of Bancorporation will continue to serve on the Board of Directors of
the surviving entity.
Promptly after the Merger, Mr. Richard G. Gilbert, the Chairman and Chief
Executive Officer of CIVISTA and a board member of CIVISTA and Citizens, will be
appointed as a member of the Board of Directors of Bancorporation and Citizens
Bank. Mr. Gilbert will not become an officer of Bancorporation. In addition,
promptly after the Merger, Mr. Jack R. Gravo, the President of CIVISTA and the
Executive Vice President, Chief Operating Officer and Chief Financial Officer of
Citizens, and a board member of CIVISTA and Citizens, will become an Executive
Vice President of Bancorporation and the President and Chief Executive Officer
of Citizens Bank. The persons currently serving on the Board of Directors of
Citizens will be appointed as directors of Citizens Bank to serve with the
existing directors of First National-Massillon.
7
<PAGE> 18
Certain of the executive officers of CIVISTA, some of whom also serve as
directors of CIVISTA and/or its subsidiaries, have interests in the Merger as a
result of severance agreements which they entered into with CIVISTA or one of
its subsidiaries (the "Severance Agreements"). These Severance Agreements
contain provisions which are activated upon a termination of employment of such
executive officer after a "change of control" of CIVISTA. Bancorporation has
agreed to assume the obligations under the Severance Agreements as of the
Effective Time. In the event any such executive officer is terminated during the
period specified in the applicable Severance Agreement, which period may range
from one to three years after the Merger depending upon the applicable Severance
Agreement, such officer would be entitled to compensation for salary and
benefits for such period. The maximum aggregate value of the compensation under
the Severance Agreements for all 20 of the executive officers who have Severance
Agreements is approximately $5.0 million. This value was determined based on the
assumptions that all such executive officers' employment would be terminated and
that they would be entitled to the payment as of the Effective Time. It is
unlikely that all such executive officers would be terminated. Bancorporation
has also agreed to assume the obligations under CIVISTA's indemnification
provisions currently provided to the officers, directors and employees of
CIVISTA for matters occurring prior to the Effective Time, and to provide such
persons with indemnification for activities after the Effective Time to the same
extent it is provided to persons working in similar capacities for
Bancorporation after the Effective Time. See "TERMS OF MERGER -- Interests of
Certain Persons in Merger."
RECOMMENDATION OF DIRECTORS
The Board of Directors of Bancorporation has approved the Merger Agreement
and unanimously recommends the adoption of the Merger Agreement by the
Bancorporation stockholders. The Board of Directors of CIVISTA has approved the
Merger Agreement and unanimously recommends the adoption of the Merger Agreement
by the CIVISTA stockholders. See "BACKGROUND OF AND REASONS FOR
MERGER -- Recommendation of CIVISTA's Board of Directors" and "BACKGROUND OF AND
REASONS FOR MERGER -- Recommendation of Bancorporation's Board of Directors."
INVESTMENT BANKERS' OPINIONS
Alex. Brown has delivered its written opinions to Bancorporation's Board of
Directors to the effect that, as of the date the Merger Agreement was signed and
as of the date of this Prospectus and Joint Proxy Statement, the terms of the
Merger Agreement, in respect of the Exchange Ratio, are fair to the holders of
Bancorporation Common Stock, from a financial point of view. A copy of the
opinion of Alex. Brown dated as of the date of this Prospectus and Joint Proxy
Statement is attached hereto as Appendix B. The opinion should be read in its
entirety for a description of the procedures followed, assumptions and
qualifications made and matters considered by Alex. Brown, and the limitations
of the opinion. See "BACKGROUND OF AND REASONS FOR MERGER -- Opinion of
Bancorporation's Financial Advisor."
McDonald & Company has delivered its written opinions to CIVISTA's Board of
Directors to the effect that, as of the date the Merger Agreement was signed and
as of the date of this Prospectus and Joint Proxy Statement, the Exchange Ratio
was fair to the holders of CIVISTA Common Stock, from a financial point of view.
A copy of the opinion of McDonald & Company dated as of the date of this
Prospectus and Joint Proxy Statement is attached hereto as Appendix C. The
opinion should be read in its entirety for a description of the procedures
followed, assumptions and qualifications made and matters considered by McDonald
& Company, and the limitations of the opinion. See also "BACKGROUND OF AND
REASONS FOR MERGER -- Opinion of CIVISTA's Financial Advisor."
COMPARISON OF RIGHTS OF HOLDERS OF BANCORPORATION CAPITAL STOCK AND CIVISTA
CAPITAL STOCK
The rights of the holders of CIVISTA Common Stock are governed by Ohio
General Corporation Law, CIVISTA's Amended Articles of Incorporation ("CIVISTA's
Articles") and CIVISTA's Code of Regulations ("CIVISTA's Regulations"). At the
Effective Time, CIVISTA's stockholders (except holders who perfect dissenters'
rights) will become Bancorporation stockholders and their rights will be
governed thereafter by Ohio General Corporation Law and by Bancorporation's
Amended and Restated Articles of Incorporation
8
<PAGE> 19
("Bancorporation Articles") and its Code of Regulations, as amended
("Bancorporation Regulations") (as both further amended pursuant to the Merger
Agreement filed as of the Effective Time).
The rights of a holder of CIVISTA Common Stock are similar in most respects
to the rights of a holder of Bancorporation Common Stock. Holders of
Bancorporation Common Stock, however, do not have preemptive rights, as do the
holders of CIVISTA Common Stock, and Bancorporation Common Stock has associated
rights which trade with the Common Stock, which arise pursuant to the terms of
the First Bancorporation of Ohio Shareholders Rights Agreement dated October 21,
1993 ("Bancorporation Rights Agreement"). Each share of Bancorporation Common
Stock issued to stockholders of CIVISTA in the Merger represents an interest in
the Bancorporation Rights Agreement. The rights provide a stockholder of
Bancorporation with the ability to acquire shares of preferred stock of
Bancorporation in the event of an attempted "takeover" of Bancorporation. The
rights are not currently exercisable. All references to the Bancorporation
Common Stock in this Prospectus and Joint Proxy Statement include the associated
rights ("Bancorporation Rights"). See "COMPARISON OF BANCORPORATION AND CIVISTA
CAPITAL STOCK."
MARKET PRICES
Bancorporation Common Stock is included for quotation on NASDAQ. CIVISTA
Common Stock is traded over-the-counter and although it is not actively traded,
it has an established public market through two brokerage firms which make a
market in the CIVISTA Common Stock. The information presented in the table below
sets forth the high and low sale prices as reported on NASDAQ for Bancorporation
Common Stock on June 21, 1994 (the date of the last sale price of CIVISTA Common
Stock known to CIVISTA prior to the announcement of the Merger) and on August 9,
1994 (the date preceding the public announcement of the Merger Agreement),
together with the last sale price known to CIVISTA prior to the announcement of
the Merger as reported by a brokerage firm making a market in CIVISTA's Common
Stock. In addition, the table indicates the high and low sale prices as reported
on NASDAQ for Bancorporation Common Stock on October 21, 1994 and the last sale
price known to CIVISTA before the date of this Prospectus and Joint Proxy
Statement, being on October 4, 1994, as reported by a brokerage firm making a
market in CIVISTA's Common Stock.
<TABLE>
<CAPTION>
BANCORPORATION CIVISTA EQUIVALENT
COMMON COMMON VALUE
STOCK STOCK PER SHARE(1)
-------------- ------- ------------
<S> <C> <C> <C>
Sales Prices, June 21, 1994
High........................................... $25.50 N/A N/A
Low............................................ $24.50 N/A N/A
Last........................................... N/A 32.50 N/A
Sales Prices, August 9, 1994
High........................................... $25.25 N/A 43.51
Low............................................ $24.75 N/A 42.64
Sales Prices
High (October 21, 1994)........................ $26.75 N/A 46.09
Low (October 21, 1994)......................... $25.50 N/A 43.94
Last (October 4, 1994)......................... N/A 38.75 N/A
</TABLE>
- ---------------
(1) The Equivalent Value Per Share is calculated by multiplying the high and low
sale prices of Bancorporation Common Stock on such dates by the Exchange
Ratio.
NO ASSURANCE CAN BE GIVEN AS TO THE MARKET PRICE OF SHARES OF BANCORPORATION
COMMON STOCK IF AND WHEN THE MERGER IS CONSUMMATED, OR WHEN THE SHARES OF
BANCORPORATION COMMON STOCK ARE ACTUALLY DELIVERED.
9
<PAGE> 20
SELECTED CONSOLIDATED FINANCIAL DATA
The following table presents selected consolidated financial data for (a)
Bancorporation on a historical basis, (b) CIVISTA on a historical basis, and (c)
Bancorporation and CIVISTA on a pro forma combined basis. The selected annual
historical data for each entity coincides with their respective fiscal years,
which is December 31 for Bancorporation and September 30 for CIVISTA and the
selected unaudited interim historical financial data for each entity is based on
the six month periods ended June 30, 1994 and 1993. It is anticipated that upon
consummation of the Merger, the fiscal year of the combined company will be
December 31. Accordingly, historical financial statements of the combined
company subsequent to the Merger will include the financial information of
CIVISTA on a calendar year basis.
The pro forma combined data includes the financial data of Bancorporation
for its five fiscal years ended December 31, 1993 and the financial data of
CIVISTA for its five fiscal years ended September 30, 1993, and the financial
data of Bancorporation and CIVISTA for their respective six month periods ended
June 30, 1994 and 1993. The unaudited pro forma combined financial data do not
reflect expenses expected to be incurred by Bancorporation and CIVISTA in
connection with the Merger. This information should be read in conjunction with
the historical financial statements of Bancorporation and CIVISTA incorporated
herein by reference in this Prospectus and Joint Proxy Statement and the pro
forma condensed combined financial information giving effect to the Merger
included elsewhere in this Prospectus and Joint Proxy Statement. THE INFORMATION
PRESENTED BELOW IS NOT NECESSARILY INDICATIVE OF THE RESULTS WHICH ACTUALLY
WOULD HAVE BEEN OBTAINED IF THE MERGER HAD BEEN CONSUMMATED IN THE PAST OR WHICH
MAY BE OBTAINED IN THE FUTURE.
SELECTED FINANCIAL DATA
<TABLE>
<CAPTION>
SIX MONTHS ENDED
(DOLLARS IN THOUSANDS) JUNE 30, YEAR ENDED DECEMBER 31,
- -------------------------------------- ----------------------- --------------------------------------------------------------
HISTORICAL 1994 1993 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
BANCORPORATION
Income Statement Data:
Net Interest Income................. $ 97,301 97,353 194,802 189,486 161,142 149,458 145,408
Provision for Loan Losses........... 2,167 3,879 7,239 17,657 11,827 11,979 8,892
Net Income.......................... $ 29,872 28,940 55,560 53,273 42,126 37,016 28,999
Balance Sheet Data (period end):
Assets.............................. $4,530,430 4,276,463 4,380,283 4,305,342 4,118,295 4,055,892 3,936,569
Deposits............................ 3,734,074 3,660,975 3,743,599 3,701,923 3,726,207 3,507,336 3,391,022
Loans............................... 2,807,587 2,590,649 2,631,216 2,531,038 2,476,986 2,408,932 2,400,440
Shareholders' Equity................ 428,228 402,111 417,160 383,876 351,232 329,793 311,919
Capital Ratios:
Shareholders' Equity to Total
Assets............................ 9.45% 9.40% 9.52% 8.92% 8.53% 8.13% 7.92%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED SEPTEMBER 30,
----------------------- --------------------------------------------------------------
CIVISTA 1994 1993 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Net Interest Income................. $ 14,809 15,600 31,257 28,197 21,799 20,393 18,810
Provision for Loan Losses........... 85 416 817 1,308 923 1,417 668
Net Income.......................... $ 5,425 7,210 13,072 9,557 6,214 4,360 4,101
Balance Sheet Data (period end):
Assets.............................. $ 808,210 777,768 799,015 750,680 741,587 706,456 685,619
Deposits............................ 689,088 677,626 684,069 661,887 651,211 626,997 616,688
Loans............................... 505,557 505,420 504,650 499,757 517,372 502,020 502,389
Shareholders' Equity................ 89,464 80,305 82,961 71,468 63,178 58,005 54,923
Capital Ratios:
Shareholders' Equity to Total
Assets............................ 11.07% 10.33% 10.38% 9.52% 8.52% 8.21% 8.01%
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED IN
----------------------- --------------------------------------------------------------
PRO FORMA COMBINED 1994 1993 1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
Income Statement Data:
Net Interest Income................. $ 112,110 112,953 226,059 217,683 182,941 169,851 164,218
Provision for Loan Losses........... 2,252 4,295 8,056 18,965 12,750 13,396 9,560
Net Income.......................... $ 35,297 36,150 68,632 62,830 48,340 41,376 33,100
Balance Sheet Data (period end):
Assets.............................. $5,338,640 5,054,231 5,179,298 5,056,022 4,859,882 4,762,348 4,622,188
Deposits............................ 4,423,162 4,338,601 4,427,668 4,363,810 4,377,418 4,134,333 4,007,710
Loans............................... 3,313,144 3,096,069 3,135,866 3,030,795 2,994,358 2,910,952 2,902,829
Shareholders' Equity................ 517,692 482,416 500,121 455,344 414,410 387,798 366,842
Capital Ratios:
Shareholders' Equity to Total
Assets............................ 9.70% 9.54% 9.66% 9.01% 8.53% 8.14% 7.94%
</TABLE>
10
<PAGE> 21
COMPARATIVE PER SHARE DATA
The following table sets forth per common share book value, cash dividends
paid and net income of (a) Bancorporation on a historical basis, (b) CIVISTA on
a historical basis, (c) Bancorporation on a pro forma basis adjusted to give
effect to the Merger as if the Merger had been effected for the period
presented, and (d) CIVISTA on a pro forma equivalent basis for one share of
Bancorporation Common Stock, in each case as adjusted for all applicable stock
splits. The following information should be read in conjunction with the
historical financial statements of Bancorporation and CIVISTA incorporated by
reference in this Prospectus and Joint Proxy Statement and the pro forma
condensed consolidated combined financial information giving effect to the
Merger included elsewhere in the Prospectus and Joint Proxy Statement. THE
INFORMATION PRESENTED BELOW IS NOT NECESSARILY INDICATIVE OF THE RESULTS WHICH
ACTUALLY WOULD HAVE BEEN OBTAINED IF THE MERGER HAD BEEN CONSUMMATED IN THE PAST
OR WHICH MAY BE OBTAINED IN THE FUTURE.
COMPARATIVE PER SHARE DATA
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
--------------- ------------------------------------------
1994 1993 1993 1992 1991 1990 1989
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
HISTORICAL PER SHARE DATA
BANCORPORATION
Net Income per Common Share............. $ 1.10 1.07 2.05 1.97 1.56 1.37 1.07
Cash Dividends Paid per Common Share.... .48 .41 .87 .79 .77 .71 .66
Book Value per Common Share
(at period end)......................... 15.77 14.84 15.38 14.18 13.01 12.22 11.56
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED SEPTEMBER 30,
--------------- ------------------------------------------
1994 1993 1993 1992 1991 1990 1989
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
CIVISTA
Net Income per Common Share............. $1.47 2.00 3.64 2.71 1.80 1.26 1.19
Cash Dividends Paid per Common Share.... .20 .17 .50 .41 .34 .35 .25
Book Value per Common Share
(at period end)......................... 25.61 23.07 23.80 20.63 18.35 16.82 15.91
</TABLE>
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
JUNE 30, YEAR ENDED IN
--------------- ------------------------------------------
1994 1993 1993 1992 1991 1990 1989
------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
PRO FORMA COMBINED
Net Income per Common Share............. $1.06 1.09 2.07 1.90 1.47 1.26 1.01
Cash Dividends Paid per Common Share.... .41 .35 .76 .69 .67 .62 .57
Book Value per Common Share
(at period end)......................... 15.61 14.58 15.10 13.78 12.58 11.77 11.14
EQUIVALENT PRO FORMA COMBINED
PER CIVISTA SHARE
Net Income per Common Share............. $1.83 1.88 3.57 3.28 2.53 2.16 1.73
Cash Dividends Paid per Common Share.... .71 .61 1.31 1.19 1.15 1.06 .97
Book Value per Common Share
(at period end)......................... 26.89 25.12 26.01 23.74 21.68 20.29 19.19
</TABLE>
11
<PAGE> 22
INTRODUCTION
This Prospectus and Joint Proxy Statement is being furnished in connection
with the solicitation of proxies by the Boards of Directors of Bancorporation
and CIVISTA for use at each of the respective Bancorporation and CIVISTA Special
Meetings. This Prospectus and Joint Proxy Statement also serves as a Prospectus
for the issuance of Bancorporation Common Stock at the Effective Time. This
Prospectus and Joint Proxy Statement is being mailed to stockholders of
Bancorporation and CIVISTA commencing on or about November 2, 1994.
ALL INFORMATION CONTAINED IN THIS PROSPECTUS AND JOINT PROXY STATEMENT
RELATING TO BANCORPORATION HAS BEEN FURNISHED BY BANCORPORATION, AND ALL
INFORMATION CONTAINED IN THIS PROSPECTUS AND JOINT PROXY STATEMENT RELATING TO
CIVISTA HAS BEEN FURNISHED BY CIVISTA. THE PARTY FURNISHING ANY SUCH INFORMATION
IS RESPONSIBLE FOR THE ACCURACY THEREOF.
SPECIAL MEETING OF CIVISTA STOCKHOLDERS
DATE, TIME, AND PLACE
The CIVISTA Special Meeting will be held on Thursday, December 15, 1994,
commencing at 10:00 A.M., (local time), at 100 Central Plaza South, Canton,
Ohio.
PURPOSE OF MEETING
The purpose of the CIVISTA Special Meeting is to consider and vote upon the
adoption of the Merger Agreement.
RECORD DATE; SHARES OUTSTANDING AND ENTITLED TO VOTE
The record date for the determination of holders of shares of CIVISTA
Common Stock entitled to notice of and to vote at the CIVISTA Special Meeting
has been fixed by the Board of Directors of CIVISTA at the close of business on
October 24, 1994. As of October 24, 1994, there were approximately 3,498,904
shares of CIVISTA Common Stock issued and outstanding, held by approximately 500
stockholders of record. Holders of record of CIVISTA Common Stock on the record
date are entitled to one vote per share and are entitled to exercise dissenters'
rights. See "RIGHTS OF DISSENTING STOCKHOLDERS."
VOTE REQUIRED
The affirmative vote of the holders of two-thirds of the shares of CIVISTA
Common Stock outstanding on the record date is required to adopt the Merger
Agreement. As of October 24, 1994, CIVISTA's directors and executive officers
and their affiliates beneficially owned 265,070 shares of CIVISTA Common Stock
(excluding any shares that may be acquired by exercise of outstanding options to
acquire CIVISTA Common Stock), which represents 7.57% of the outstanding shares
of CIVISTA Common Stock entitled to vote at the CIVISTA Special Meeting.
VOTING; SOLICITATION AND REVOCATION OF PROXIES
The enclosed CIVISTA proxy may be used by CIVISTA stockholders to vote at
the CIVISTA Special Meeting. The proxy may be revoked at any time prior to the
voting thereof by giving notice in writing to the Secretary of CIVISTA of the
revocation, by filing with the Secretary another proxy duly executed and bearing
a later date, or by giving written notice of the proxy revocation at the CIVISTA
Special Meeting. Shares represented by valid proxies will be voted at the
CIVISTA Special Meeting in accordance with the instructions noted thereon, but
in the absence of such instructions, will be voted in favor of the adoption of
the Merger Agreement.
CIVISTA will bear the cost of any solicitation of proxies from CIVISTA
stockholders. Officers and employees of CIVISTA and its subsidiary, Citizens,
may, without special compensation, request the return of proxies by further
mailings, personal conversations, telephone or telecopier. Banks, brokerage
houses, other
12
<PAGE> 23
institutions, nominees and fiduciaries will be requested to forward their proxy
soliciting material to their principals and obtain authorizations for the
execution of proxies. Upon request, CIVISTA will pay the standard expenses for
such activities.
SPECIAL MEETING OF BANCORPORATION STOCKHOLDERS
DATE, TIME, AND PLACE
The Bancorporation Special Meeting will be held on Thursday, December 15,
1994, commencing at 10:00 A.M. (local time), at the Quaker Square Hilton Inn,
135 South Broadway, Akron, Ohio.
PURPOSE OF MEETING
The purpose of the Bancorporation Special Meeting is to consider and vote
upon four proposals. The First Proposal is the adoption of the Merger Agreement.
The Second Proposal involves the change of Bancorporation's name to "FirstMerit
Corporation." The Third and Fourth Proposals involve the amendment of
Bancorporation's Articles to increase the authorized Common Stock from
40,000,000 to 80,000,000 shares and to increase the authorized Bancorporation
preferred stock, without par value ("Bancorporation Preferred Stock"), from
3,500,000 to 7,000,000 shares. The Second, Third and Fourth Proposals are
discussed below, while the First Proposal is discussed throughout this
Prospectus and Joint Proxy Statement.
RECORD DATE; SHARES OUTSTANDING AND ENTITLED TO VOTE
The close of business on October 24, 1994, has been fixed by the Board of
Directors of Bancorporation as the record date for the determination of holders
of shares of Bancorporation Common Stock entitled to notice of and to vote at,
the Bancorporation Special Meeting. As of October 24, 1994, there were
approximately 27,163,171 shares of Bancorporation Common Stock issued and
outstanding, and held by approximately 6,521 stockholders of record. Holders of
record of Bancorporation Common Stock on the record date are entitled to one
vote per share and are entitled to exercise dissenters' rights. See "RIGHTS OF
DISSENTING STOCKHOLDERS."
SECOND PROPOSAL TO CHANGE BANCORPORATION'S NAME
On September 8, 1994, the Board of Directors adopted a resolution to amend
Article First of Bancorporation's Articles to change Bancorporation's name to
"FirstMerit Corporation" ("FirstMerit"), subject to approval by the
Bancorporation's stockholders. This proposal is intended by the Board to provide
Bancorporation and its subsidiaries with a more recognizable corporate identity
and to better reflect the geographic location of Bancorporation's subsidiaries.
The determination to change Bancorporation's name has been made after a
significant amount of review and study by management regarding the need for and
benefits of adopting FirstMerit, as well as the availability of this specific
corporate identity.
Historically, Bancorporation has operated each of its subsidiaries under
that subsidiary's name without reference to Bancorporation. In conducting
various studies, Bancorporation's management has concluded that in today's
competitive financial institution market, it would provide Bancorporation with a
significant marketing advantage to use, in addition to the subsidiary's name, an
"overall" highly recognizable corporate identity name.
The new name incorporates the familiar "First," which has been a part of
Bancorporation's name for many years, with the name "Merit," which exemplifies
the excellence and quality which Bancorporation has established as a financial
institution over the years. The Board believes that this new name and corporate
identity are necessary, will be unique to the Bancorporation's market areas, and
will result in a more distinct and recognizable corporate identity, better
reflecting the geographic diversity, financial strength and supercommunity
banking orientation of Bancorporation. The Board also believes that the name
change will enhance future marketing capabilities, acquisitions and other
strategic plans, as these arise and are consistent with the overall
supercommunity banking strategy which Bancorporation has historically followed.
13
<PAGE> 24
It is proposed that Article First of the Bancorporation Articles be amended
as follows:
FIRST: The name of the corporation shall be "FirstMerit Corporation."
Assuming Proposal Two is approved, the officers of Bancorporation will
promptly complete the necessary actions to implement the name change. The Board
and management have already taken the necessary action to register the name as a
federal service mark and have reserved its exclusive use in seven states,
including the states of Ohio and Florida where Bancorporation currently has
operating subsidiaries. In addition, the stock symbol "FMER" has been reserved
with NASDAQ to reflect the new company name. The name change will, if approved
by the stockholders, be effective regardless of whether the Merger or other
proposals are adopted.
The change of name will not affect in any way the validity of the
transferability of stock certificates currently outstanding, the capital
structure of Bancorporation or the listing of any of its securities.
Bancorporation stockholders will not be required to surrender for exchange any
certificates currently held by them. Stock certificates will be changed to
reflect the FirstMerit name upon a subsequent sale or transfer of shares by a
stockholder. Please do not return your Bancorporation stock certificates with
the enclosed proxy.
THIRD PROPOSAL TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF COMMON STOCK
The Board of Directors has approved and determined to submit to the
Bancorporation stockholders a proposal to amend Bancorporation's Articles to
increase the number of shares of authorized Common Stock from 40,000,000 to
80,000,000 shares. For the discussion regarding items common to the Third and
Fourth Proposals, see "Matters Common to Both Stock Increase Proposals," below.
As of October 24, 1994, there were issued and outstanding 27,163,171 shares
of Common Stock (including 22,751 shares of Common Stock held as treasury shares
by Bancorporation). In addition, as of that date, approximately 1,311,130 shares
of Common Stock were reserved for issuance under the various Bancorporation
stock option and employee stock purchase plans. In addition to the shares
reserved above, assuming the Merger is approved, approximately 6,513,119 shares
of Bancorporation Common Stock will be reserved for issuance to the CIVISTA
stockholders upon consummation of the Merger and for issuance to optionees
pursuant to outstanding options granted under The CIVISTA Corporation Stock
Option Plan ("CIVISTA Option Plan") and the 1993 CIVISTA Corporation Stock
Option Plan ("CIVISTA 1993 Option Plan") (collectively "CIVISTA Option Plans"),
which are being assumed by Bancorporation under the terms of the Merger. As
such, the balance of unreserved shares of Bancorporation Common Stock otherwise
available for issuance would be approximately 5,000,000 shares.
FOURTH PROPOSAL TO INCREASE THE AUTHORIZED NUMBER OF SHARES OF PREFERRED STOCK
The Board of Directors has approved and determined to submit to the
Bancorporation stockholders a proposal to amend Bancorporation's Articles to
increase the number of shares of authorized Bancorporation Preferred Stock, from
3,500,000 to 7,000,000 shares. There are 3,500,000 shares of Bancorporation
Preferred Stock authorized, but none has been issued. As of October 24, 1994,
300,000 shares of Series A Preferred Stock were designated by the Board of
Directors for issuance under the Bancorporation Rights Agreement. Assuming the
Merger is consummated, the Board will increase the number of designated shares
of Series A Preferred Stock to 500,000 shares. No such Bancorporation Rights are
currently outstanding. For the discussion regarding items common to the Third
and Fourth Proposals, see "Matters Common to Both Stock Increase Proposals,"
below.
MATTERS COMMON TO BOTH STOCK INCREASE PROPOSALS
DISCUSSION. The Board of Directors of Bancorporation is of the opinion
that the present balance of shares of Common and Preferred Stock available for
issuance is insufficient to enable Bancorporation to provide for its employee
stock option and purchase plans and the Bancorporation Rights Agreement, as well
as to take advantage of business opportunities that may arise. In April, 1993,
at the Annual Meeting of Shareholders, the stockholders approved an increase in
authorized shares of Common Stock from 20,000,000 to 40,000,000 shares and of
Preferred Stock from 1,000,000 to 3,500,000 shares. Since that time, Bancorpora-
14
<PAGE> 25
tion has declared a two-for-one stock split in September, 1993, and completed
the acquisition of Great Northern Financial Corporation for an exchange of stock
in early 1994. These two actions, in conjunction with the proposed stock
exchange acquisition of CIVISTA, have significantly reduced the number of shares
of Bancorporation Common Stock available for future transactions. The increase
in authorized shares would give Bancorporation the flexibility to take advantage
of various business opportunities, including acquisitions, financings, stock
splits and stock dividends, the sale of shares of Common and/or Preferred Stock
in the open market or otherwise, for other corporate purposes, as well as
providing for future employee stock option and purchase plans and the
Bancorporation Rights Agreement.
Authorized but unissued shares may be issued at some later date upon
authorization by the Bancorporation Board of Directors, except as may be limited
by the Bancorporation Articles, law, or by the rules of the National Association
of Securities Dealers, Inc. The holders of shares of Bancorporation Common and
Preferred Stock are not entitled to preemptive rights to purchase or have
offered to them any shares of Common or Preferred Stock whether now or hereafter
authorized. Although the proposed amendments would increase the number of shares
of Bancorporation Common and Preferred Stock available for issuance, the
directors currently have the authority described above and the amendment would
not increase the authority of the Board to take such actions. The Board has no
present plans, except under the Merger Agreement, to issue shares of
Bancorporation Common and/or Preferred Stock for such purposes.
POSSIBLE ANTI-TAKEOVER EFFECT OF THE THIRD AND FOURTH PROPOSALS. The Board
of Directors does not believe that an increase in the number of authorized
shares of Bancorporation Common and/or Preferred Stock will have a significant
impact on any attempt to gain control of Bancorporation. It is possible,
however, that the availability of authorized but unissued shares of
Bancorporation Common and/or Preferred Stock could discourage third parties from
attempting to gain such control since the Board could authorize the issuance of
shares of Common and/or Preferred Stock in a private placement or otherwise to
one or more persons. In addition, the Bancorporation Preferred Stock could be
issued with terms and conditions differing from the Common Stock, including
dividend rates, conversion rights, redemption prices and other terms as the
Board determines. Such an issuance of shares of either Common and/or Preferred
Stock could dilute the voting power of a person attempting to acquire control of
Bancorporation, increase the cost of acquiring such control, affect the
accounting treatment thereof or otherwise hinder such efforts.
Bancorporation's Articles and Regulations, as amended by the stockholders
at the 1988 Annual Shareholders Meeting, contain certain provisions that can be
viewed as having anti-takeover effects. Under these provisions, Bancorporation's
Board of Directors is divided into three classes with approximately one-third of
the members of the Board nominated for election each year, directors may be
removed only for cause, the maximum number of directors is fixed in the Articles
at 24 (although it is currently set at 16 by the stockholders) and advance
notice is required from stockholders nominating a director. In addition, the
affirmative vote of 80% of Bancorporation's outstanding voting power is required
to approve certain business transactions (such as mergers or disposition of
substantially all of its assets) involving another entity owning ten percent or
more of the outstanding capital stock of Bancorporation, unless (a) the
transaction is structured to provide a "fair price" to all stockholders; and (b)
the transaction has been approved by (i) a majority of the Board prior to the
entity acquiring ten percent, or (ii) by two-thirds of the Board and by a
majority of the continuing directors any time before consummation. If such
approval is received, the affirmative vote of only two-thirds of
Bancorporation's outstanding voting power is required.
Bancorporation is also subject to two sets of provisions under Ohio General
Corporation Law which are referred to as the "Control Share Acquisition Act" and
the "Merger Moratorium Statute." The Control Share Acquisition Act prescribes
certain notice and informational filings, and special meeting and voting
procedures, which must be followed prior to consummation by an acquirer of a
company's voting shares within any of the following ranges: 20% or more but less
than 33 1/3%; 33 1/3% but less than a majority; and a majority or more. The
acquisition may be made if it is approved by both a majority of the voting power
of Bancorporation and a majority of the voting power remaining after excluding
the voting power of the acquirer and certain affiliated parties. The Merger
Moratorium Statute regulates certain business combinations between a "public
company" and an "interested stockholder," such as mergers or disposition of
substantially all of the acquired company's assets. Subject to certain
exceptions, these transactions are prohibited for a three-year period. Prior
15
<PAGE> 26
to the end of the three-year period, a prohibited transaction may take place
provided certain conditions are satisfied. Also see the discussions under
"COMPARISON OF BANCORPORATION AND CIVISTA CAPITAL STOCK -- Shareholder Rights
Plan" and "-- Ohio Anti-Takeover Statutes."
The Board of Directors is not aware of any present threat or attempt to
gain control of Bancorporation and the Proposals described herein are not in
response to any such action. These Proposals are not part of a plan by
Bancorporation to adopt a series of provisions with an anti-takeover purpose and
Bancorporation does not have any intent to propose other such measures in future
proxy solicitations.
FORM OF AMENDMENT TO ARTICLES. It is proposed that the first paragraph of
Article Fourth of the Bancorporation Articles be amended as follows:
FOURTH: The maximum number of shares which the Corporation is
authorized to issue and to have outstanding at any time shall be
Eighty Seven Million, which shall be classified as follows:
(a) Eighty Million (80,000,000) of said shares shall be
Common Stock, without par value; and
(b) Seven Million (7,000,000) of said shares shall be
Series Preferred Stock, without par value ("no par value
Preferred Stock");
VOTE REQUIRED FOR ALL PROPOSALS
The affirmative vote of the holders of two-thirds of the shares of
Bancorporation Common Stock outstanding on the record date is required to adopt
each of the four Proposals. As of October 24, 1994, Bancorporation's directors
and executive officers and their affiliates beneficially owned 404,553 shares of
Bancorporation Common Stock (excluding any shares that may be acquired by the
exercise of outstanding options to acquire Bancorporation Common Stock), which
represent 1.48% of the outstanding shares of Bancorporation Common Stock
entitled to vote at the Bancorporation Special Meeting. Also as of such date,
certain subsidiaries of Bancorporation, acting as fiduciaries, custodians, or
agents, have sole or shared voting power as to: 1,492,605 shares of
Bancorporation Common Stock or 5.49% of the outstanding Bancorporation Common
Stock entitled to vote at the Bancorporation Special Meeting; and 11,280 shares
of CIVISTA Common Stock, which is less than one percent of the outstanding
shares of CIVISTA Common Stock entitled to vote at the CIVISTA Special Meeting.
VOTING; SOLICITATION AND REVOCATION OF PROXIES
A holder of Bancorporation Common Stock may use the enclosed Bancorporation
proxy to vote such stockholder's shares if he is unable to attend the
Bancorporation Special Meeting in person or wishes to have his shares voted by
proxy even if he does attend the meeting. Any proxy given pursuant to this
solicitation may be revoked at any time before it is exercised by notice of such
revocation to the Secretary of Bancorporation or by submitting a proxy having a
later date, or by such person appearing at the Bancorporation Special Meeting
and voting in person. All proxies validly submitted and not revoked will be
voted in the manner specified therein. If no specification is made, the proxies
will be voted in favor of the adoption of all four Proposals.
The accompanying proxy is solicited by and on behalf of the Board of
Directors of Bancorporation, whose notice of meeting is attached to this
Prospectus and Joint Proxy Statement, and the entire cost of such solicitation
will be borne by Bancorporation. In addition to the use of the mails, proxies
may be solicited by personal interview, telephone and telegram by directors,
officers and employees of Bancorporation. Arrangements will be made with
brokerage houses and other custodians, nominees and fiduciaries for the
forwarding of solicitation material to the beneficial owners of stock held of
record by such persons, and Bancorporation will reimburse them for reasonable
out-of-pocket expenses incurred by them in connection therewith. Bancorporation
has engaged Georgeson & Company, Inc. to aid it in the solicitation of proxies
in order to assure a sufficient return of votes on the Proposals to be presented
at the meeting. It is expected that Georgeson & Company, Inc. will primarily
solicit institutional investors and owners not of record who are non-objecting
beneficial owners of Bancorporation's Common Stock. Georgeson & Company, Inc.
may also be requested to solicit other stockholders of record. The costs of such
services are estimated at $15,000 plus an additional cost of $6.00 per
stockholder solicited.
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BACKGROUND OF AND REASONS FOR MERGER
BACKGROUND OF MERGER -- CIVISTA
Over the past several years as the problems of the thrift industry have
been the subject of national discussion, the directors and senior management of
CIVISTA have monitored the applicability of a number of industry-wide concerns
that could affect the long-term prosperity of CIVISTA. These potential concerns
included interest rate risk, the prospect of savings and loan associations
paying significantly higher deposit insurance premiums than commercial banks,
increased regulation, and the practical hurdles to offering commercial bank-type
services to its customers.
Although CIVISTA has been consistently profitable over the years and the
capital of CIVISTA has met or exceeded all regulatory requirements, these
potential concerns prompted the CIVISTA Board of Directors to discuss the future
prospects of CIVISTA, particularly in relation to the manner by which
stockholder value could be maximized. In November, 1992, the directors met with
McDonald & Company, an investment banking company, to review strategic
alternatives available to CIVISTA including the option of remaining as an
independent entity and the option of combining with another financial
institution. After several months of review, the directors decided to remain as
an independent entity and to continue to focus on operating CIVISTA on a
profitable basis. The directors, however, continued to discuss their concerns
about the long-term viability and desirability of CIVISTA operating as an
independent thrift institution and the limited market liquidity of CIVISTA's
Common Stock. As a result of these discussions, in January, 1994, the Board of
Directors authorized the retention of McDonald & Company to assist CIVISTA in
exploring strategic alternatives to enhance stockholder value, including the
possibility of a merger with another financial institution.
Following a strategic review by McDonald & Company, the directors decided
to pursue the possibility of a merger with another financial institution. The
Board of Directors provided McDonald & Company with a set of criteria for
considering potential merger partners and in May, 1994, instructed McDonald &
Company to conduct a confidential inquiry into the possible interest of a number
of entities in pursuing an acquisition of CIVISTA. Following such inquiry, on
June 21, 1994, three bank holding companies submitted preliminary indications of
interest and were offered the opportunity to conduct a due diligence review of
CIVISTA. Upon the completion of such due diligence review, on August 1, 1994,
Bancorporation and another bank holding company submitted proposals to the
CIVISTA Board of Directors in respect of the acquisition of CIVISTA. At an
extensive meeting on August 3, 1994, the CIVISTA directors carefully reviewed
each of the proposals. Such review included separate discussions among those
directors not otherwise affiliated with CIVISTA, constituting an Outside
Directors Committee that previously had been established to independently
consider proposals from potential merger partners. The Bancorporation proposal
contemplated an exchange of Bancorporation Common Stock for CIVISTA Common Stock
at the Exchange Ratio. The second proposal also offered an exchange of CIVISTA
Common Stock for common stock of such bidder at a proposed fixed exchange ratio.
Following extensive review and discussion of the two proposals, including
consultations with McDonald & Company and legal counsel, the Board of Directors
of CIVISTA elected to pursue negotiations exclusively with Bancorporation. Such
decision was based primarily on the belief by the directors that there was a
material difference between the aggregate value of the Bancorporation proposal
and the aggregate value of the second proposal. Late on August 3, 1994, CIVISTA
received a revised second proposal from the other bidder. The directors compared
the proposed Bancorporation transaction to the revised second proposal submitted
by the other bidder and determined that there remained a material difference
between the aggregate value of the Bancorporation proposal and the aggregate
value of the revised second proposal.
The directors provided specific guidelines to senior management for the
negotiation with Bancorporation of certain terms and conditions. During the
period of August 3 through August 9, 1994, senior management of CIVISTA
negotiated with senior management of Bancorporation regarding the material terms
of the Merger Agreement and the CIVISTA Stock Option. At a meeting held on
August 9, 1994, the CIVISTA directors, with the assistance of McDonald & Company
and legal counsel, reviewed in detail the terms and conditions contained in the
forms of the proposed Merger Agreement, the CIVISTA Stock Option and related
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transaction matters. After detailed discussion among the directors, including a
separate meeting of the Outside Directors Committee, and after receiving the
oral opinion of McDonald & Company that, as of that date, the Exchange Ratio was
fair to the stockholders of CIVISTA from a financial point of view, the
directors concluded that the terms and conditions contained in the form of the
Merger Agreement and the CIVISTA Stock Option would provide for a transaction
which was fair to and in the best interests of the CIVISTA stockholders.
Accordingly, the Board of Directors approved the terms and conditions of the
Merger Agreement and the CIVISTA Stock Option and authorized the execution of
those documents by the senior management of CIVISTA.
REASONS FOR MERGER -- CIVISTA
The terms of the Merger Agreement and the CIVISTA Stock Option were the
result of arms-length negotiation between CIVISTA and Bancorporation and their
respective representatives. In the course of reaching its decision to approve
the Merger Agreement and the CIVISTA Stock Option, the Board of Directors of
CIVISTA considered numerous factors, including the following:
(a) CIVISTA's interest rate risk due to its concentration of long-term,
fixed rate mortgage loans;
(b) CIVISTA's prospects in an uncertain future environment for savings and
loan associations due to: (i) increased governmental dominance of the
residential mortgage market, (ii) the prospect of savings and loan
associations paying significantly higher deposit insurance premiums
than commercial banks, and (iii) increased regulation;
(c) the practical hurdles to offering commercial bank-type services such as
commercial loans, trust and expanded consumer loans to its customers;
(d) the prospect for higher dividends and increased market liquidity that
would be provided by Bancorporation Common Stock;
(e) the business, results of operations, asset quality, and financial
condition of Bancorporation; and
(f) the oral opinion rendered by McDonald & Company to the effect that, as
of August 9, 1994, the Exchange Ratio was fair to the holders of
CIVISTA Common Stock from a financial point of view. See "BACKGROUND OF
AND REASONS FOR MERGER -- Opinion of CIVISTA's Financial Advisor."
OPINION OF CIVISTA'S FINANCIAL ADVISOR
CIVISTA has retained McDonald & Company as its financial advisor in
connection with the Merger and requested that McDonald & Company render its
opinion with respect to the fairness, from a financial point of view, of the
Exchange Ratio to the holders of CIVISTA Common Stock. McDonald & Company
rendered its oral opinion to the CIVISTA Board of Directors on August 9, 1994,
which it subsequently confirmed in writing dated August 10, 1994, that, as of
the date of such opinion, the Exchange Ratio pursuant to the Merger was fair,
from a financial point of view, to the holders of CIVISTA Common Stock.
THE FULL TEXT OF THE OPINION OF MCDONALD & COMPANY UPDATED AS OF THE DATE
OF THIS PROSPECTUS AND JOINT PROXY STATEMENT, WHICH SETS FORTH CERTAIN
ASSUMPTIONS MADE, MATTERS CONSIDERED AND LIMITATIONS ON THE REVIEWS UNDERTAKEN,
IS ATTACHED AS APPENDIX C TO THIS PROSPECTUS AND JOINT PROXY STATEMENT, AND
SHOULD BE READ IN ITS ENTIRETY. THE SUMMARY OF THE OPINION OF MCDONALD & COMPANY
SET FORTH IN THIS PROSPECTUS AND JOINT PROXY STATEMENT IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO THE OPINION. MCDONALD & COMPANY'S OPINION SHOULD NOT BE
CONSTRUED BY HOLDERS OF CIVISTA'S COMMON STOCK AS A RECOMMENDATION AS TO HOW
SUCH HOLDERS SHOULD VOTE AT THE SPECIAL MEETING.
In arriving at its opinion, McDonald & Company reviewed, among other
things, the Merger Agreement together with exhibits and schedules thereto,
certain publicly available information relating to the business, financial
condition and operations of CIVISTA and Bancorporation as well as certain other
non-public information, primarily financial in nature, furnished to it by
CIVISTA and Bancorporation relating to the respective businesses, earnings,
assets and prospects of CIVISTA and Bancorporation. McDonald & Company also held
discussions with members of senior management of CIVISTA and Bancorporation
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concerning their respective businesses, assets, financial forecasts and
prospects. McDonald & Company also reviewed certain publicly available
information concerning the trading of, and the trading market for, CIVISTA
Common Stock and Bancorporation Common Stock and certain publicly available
information concerning comparable companies and transactions, all as more fully
set forth in McDonald & Company's opinion.
McDonald & Company did not conduct a physical inspection of any of the
assets, properties or facilities of either CIVISTA or Bancorporation, and has
not made, obtained or been furnished with any independent evaluation or
appraisal of any of such assets, properties or facilities or any of the
liabilities of CIVISTA or Bancorporation. McDonald & Company has assumed and
relied, without independent investigation, upon the accuracy and completeness of
the financial and other information provided to it or publicly available, has
relied upon the representations and warranties of CIVISTA and Bancorporation
contained in the Merger Agreement, and has not independently attempted to verify
any of such information. McDonald & Company has also assumed that all of the
conditions to the Merger as set forth in the Merger Agreement, including the
tax-free treatment of the Merger to the holders of CIVISTA Common Stock, would
be satisfied and that the Merger would be consummated on a timely basis in the
manner contemplated by the Merger Agreement. No limitations were imposed by
CIVISTA upon McDonald & Company with respect to the scope of its investigation
nor were any specific instructions given to McDonald & Company in connection
with its fairness opinion.
In connection with rendering its opinion dated August 10, 1994, McDonald &
Company considered a variety of financial analyses, some of which focused on the
banking subsidiaries of CIVISTA only, as summarized below. McDonald & Company
believes that its analyses must be considered as a whole and that selecting
portions of such analyses and of the factors considered by McDonald & Company
without considering all such analyses and factors may create an incomplete view
of the analytical process underlying McDonald & Company's opinion. In its
analyses, McDonald & Company made numerous assumptions with respect to industry
performance, business and economic conditions, and other matters. Any estimates
contained in McDonald & Company's analyses are not necessarily indicative of
future results or values, which may be significantly more or less favorable than
such estimates. With respect to the non-banking subsidiaries of CIVISTA,
McDonald & Company relied on CIVISTA management's estimates of the net
realizable value of those assets.
The following is a summary of selected analyses considered by McDonald &
Company and discussed with the CIVISTA Board of Directors, in connection with
McDonald & Company's opinion dated August 10, 1994:
COMPARISON WITH SELECTED COMPANIES. McDonald & Company compared the
financial performance and stock market valuation of CIVISTA with corresponding
data for the following selected thrifts: Ameriana Bancorp, Charter One
Financial, Inc., Chester Valley Bancorp Inc., Eagle Bancorp, Inc., First
Harrisburg Bancorp, First Franklin Corporation, Falls Financial, Inc.,
FirstFederal Financial Services Corp, First Indiana Corporation, Home Federal
Bancorp, Indiana Federal Corporation, Peoples Bancorp, Prime Bancorp, Inc., Park
View Federal Savings Bank, Security First Corp., UF Bancorp, Inc., and York
Financial Corp. In addition, McDonald & Company compared such data of
Bancorporation with the following selected banking companies: Citizens Banking
Corporation, CNB Bancshares, Inc., Dauphin Deposit Corporation, First Michigan
Bank Corp., Fulton Financial Corporation, Fort Wayne National Corp., Keystone
Financial, Inc., Old National Bancorp, One Valley Bancorp of W.Va., Inc.,
Provident Bancorp, Inc., and Star Banc Corp. At the time, none of the companies
listed above had announced a merger transaction or disclosed a possible interest
in pursuing a possible merger transaction.
CONTRIBUTION ANALYSIS. McDonald & Company analyzed the contribution of
each of CIVISTA and Bancorporation to, among other things, the shareholders'
equity and after-tax net income of the pro forma combined company. This analysis
showed that, among other factors, CIVISTA would have contributed 17.3% of the
shareholders' equity of the pro forma combined company as of June 30, 1994, and
15.4% of the pro forma net income for the combined company for the six months
ended June 30, 1994, compared with a proposed ownership, assuming the exercise
of options on CIVISTA Common Stock, of 19.5% of the combined company to be held
by holders of CIVISTA Common Stock.
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PRO FORMA MERGER ANALYSIS. McDonald & Company analyzed certain pro forma
effects resulting from the Merger on the pro forma combined company over a five
year period from 1995 through 1999. This analysis, based upon the projections of
management of CIVISTA and median published estimates of earnings per share for
Bancorporation, and including estimates of cost savings/revenue enhancements
provided by the management of CIVISTA and Bancorporation, showed approximately
4.0% dilution in pro forma earnings per share in 1995 and approximately 1.0%
dilution in pro forma earnings per share in 1996. McDonald & Company also
analyzed the changes in the per share amount of earnings, book value and
indicated dividend represented by one share of CIVISTA Common Stock after the
Merger. The analysis was performed on the basis of financial information for
both companies as of and for the six months ended June 30, 1994, and for the two
twelve month periods ended December 31, 1992 and 1993. The analysis indicated,
among other things, that exchanging one share of CIVISTA Common Stock at the
Exchange Ratio for shares of Bancorporation Common Stock on a pro forma basis
would have resulted in a 23.6% increase in earnings per share for each share of
CIVISTA Common Stock for the six months ended June 30, 1994, a 5.2% increase in
book value per share for each share of CIVISTA Common Stock and a 165.1%
increase in dividends per share for each share of CIVISTA Common Stock based on
Bancorporation's and CIVISTA's indicated annual dividend rate (adjusted for
CIVISTA's regular extra dividend) as of August 9, 1994.
ANALYSIS OF SELECTED MERGER TRANSACTIONS. McDonald & Company reviewed five
groups of selected pending thrift acquisition transactions involving (i) mergers
with transaction values of between $50.0 million and $250.0 million, (ii)
selling thrifts having equity to assets ratios between 7.0% and 10.0%, (iii)
selling thrifts having a return on average assets greater than 1.0%, (iv)
selling thrifts having non-performing assets as a percent of total assets less
than 1.0% and (v) selling thrifts headquartered in the Midwest region of Iowa,
Illinois, Indiana, Kansas, Kentucky, Michigan, Minnesota, Missouri, North
Dakota, Nebraska, Ohio, South Dakota, and Wisconsin. McDonald & Company reviewed
the ratios of the offer value to stated book value and tangible book value, the
multiple of the last 12 months earnings of the acquired company, and the ratio
of offer value to assets in each such transaction and computed the mean and
median ratios and multiples for each group. The calculations yielded ranges of
median ratios of price to stated book value and tangible book value of 151.0% to
156.0%, and 154.0% to 170.0%, respectively. Median multiples of earnings among
the five groups ranged from 12.5x to 15.9x; and median ratios of offer value to
assets ranged from 13.0% to 17.0%. This analysis showed an imputed reference
range of $37.25 to $44.00 per share of CIVISTA Common Stock.
NO COMPANY OR TRANSACTION USED IN THE ABOVE ANALYSES AS A COMPARISON IS
IDENTICAL TO CIVISTA, BANCORPORATION, OR THE MERGER. ACCORDINGLY, AN ANALYSIS OF
THE RESULTS OF THE FOREGOING NECESSARILY INVOLVES COMPLEX CONSIDERATIONS AND
JUDGMENTS CONCERNING THE DIFFERENCES IN FINANCIAL AND OPERATING CHARACTERISTICS
OF THE COMPANIES AND OTHER FACTORS THAT COULD AFFECT THE PUBLIC TRADING VALUES
OR ACQUISITION VALUES OF THE COMPANIES TO WHICH THEY ARE BEING COMPARED.
MATHEMATICAL ANALYSIS (SUCH AS DETERMINING THE MEAN OR MEDIAN) IS NOT, IN
ITSELF, A MEANINGFUL METHOD OF USING COMPARABLE COMPANY OR COMPARABLE
TRANSACTION DATA.
DISCOUNTED CASH FLOW ANALYSIS. Using discounted cash flow analysis,
McDonald & Company estimated the present value of the future streams of
after-tax cash flows that the banking subsidiaries of CIVISTA (including the
holding company) could produce over a five year period from 1995 through 1999,
under various assumptions, based upon CIVISTA management's forecasts. McDonald &
Company estimated the terminal value of the banking subsidiaries after the five
year period by two methods: (i) projecting a perpetual growth rate of the
terminal year's after-tax cash flows, and (ii) applying multiples ranging from
9x to 12x the terminal year's earnings. The cash flow streams and terminal
values were then discounted to present values using different discount rates
chosen to reflect different assumptions regarding the required rates of return
of prospective buyers of CIVISTA. On the basis of such varying assumptions, this
discounted cash flow analysis indicated a reference range of $31.00 to $44.00
per share of CIVISTA Common Stock. This analysis was based upon management
projections including variations and assumptions made by McDonald & Company
which included adjustments to reflect the anticipated effects of potential
merger related cost savings estimated by CIVISTA and Bancorporation, as well as
the effects of the potential tax liability for conversion of Citizens Savings
Bank to a commercial bank charter and the potential cash flow liability of
CIVISTA's management contracts. Management's projections are based upon many
factors and assumptions, many of which are beyond the control of CIVISTA or
Bancorporation. As indicated above, this analysis is not necessarily
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indicative of actual values or actual future results and does not purport to
reflect the prices at which any securities may trade at the present time or at
any time in the future.
In performing its analyses, McDonald & Company made numerous assumptions
with respect to industry performance, general business and economic conditions
and other matters. The analyses performed by McDonald & Company are not
necessarily indicative of actual values, which may be significantly more or less
favorable than the values suggested by such analyses. Such analyses were
prepared solely as part of McDonald & Company's opinion. The term "fair from a
financial point of view" is a standard phrase contained in investment banker
fairness opinions and refers to the fact that McDonald & Company's opinion as to
the fairness of the Exchange Ratio is addressed solely to the financial
attributes of the Exchange Ratio. The analyses do not purport to be appraisals
or to reflect the prices at which a company might actually be sold. In addition,
as described above, McDonald & Company's opinion and related presentation to the
CIVISTA Board was one of many factors taken into consideration by the CIVISTA
Board in making its determination to approve the Merger Agreement. Consequently,
the McDonald & Company analyses described above should not be viewed as
determinative of the CIVISTA Board's conclusions with respect to the value of
CIVISTA or of the decision of the CIVISTA Board to agree to the Exchange Ratio.
McDonald & Company's opinion is based on economic and market conditions and
other circumstances existing on, and information made available as of, the date
of the opinion. In addition, the opinion does not address CIVISTA's underlying
business decision to effect the Merger or any other terms of the Merger.
McDonald & Company's opinion does not represent its opinion as to what the value
of CIVISTA Common Stock or Bancorporation Common Stock may be at the Effective
Time.
McDonald & Company, as part of its investment banking business, is
customarily engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, secondary
distributions of listed and unlisted securities, private placements and
valuations for estate, corporate and other purposes. McDonald & Company has
extensive experience with the valuation of financial institutions. CIVISTA's
Board of Directors selected McDonald & Company as its financial advisor because
of McDonald & Company's industry expertise with respect to financial
institutions and because of its substantial experience in transactions similar
to the Merger. McDonald & Company is not affiliated with either CIVISTA or
Bancorporation.
In the ordinary course of business, McDonald & Company makes a market in
CIVISTA Common Stock and Bancorporation Common Stock and, accordingly, may
actively trade securities of CIVISTA and Bancorporation for its own account and
for the accounts of its customers. At any time McDonald & Company may hold a
short or long position in such securities. In addition, McDonald & Company from
time to time has provided investment banking services to Bancorporation and may
do so in the future.
For its services as financial advisor, CIVISTA has paid McDonald & Company
a retainer of $30,000 and a fee of $100,000 upon execution of the Merger
Agreement. Assuming the consummation of the Merger as of October 21, 1994 and
based upon the value of the Merger at such time, additional fees equal to
approximately $2.1 million would have been payable to McDonald & Company, with
$100,000 due upon stockholder approval and the remainder due upon consummation
of the Merger. CIVISTA has also agreed to reimburse McDonald & Company for its
reasonable out-of-pocket expenses and to indemnify McDonald & Company against
certain liabilities, including certain liabilities under federal securities
laws.
RECOMMENDATION OF CIVISTA'S BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF CIVISTA UNANIMOUSLY RECOMMENDS THAT ITS
STOCKHOLDERS VOTE FOR THE ADOPTION OF THE MERGER AGREEMENT.
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REASONS FOR MERGER -- BANCORPORATION
After careful review and consideration, and after discussions with Alex.
Brown, Bancorporation's Board of Directors determined that the terms of the
Merger would be fair to and in the best interests of the stockholders of
Bancorporation. The Merger with CIVISTA represents the continued realization of
Bancorporation's long-standing philosophy of acquiring retail oriented financial
institutions with dominant market share for continued customer growth. The
Merger will expand Bancorporation's existing banking operations in its major
Northern Ohio markets, providing both stronger market positions and
opportunities to achieve efficiencies for the combined operations in those
markets.
In approving the Merger, Bancorporation's Board of Directors reviewed a
number of factors, including certain risks of the Merger, with a view to
increasing stockholder value in the intermediate and long term. These factors
included the reports of Bancorporation's management on the due diligence review
of CIVISTA and their reports on the strategic implications of the Merger. In
addition, the Board reviewed the financial analysis and fairness opinion
provided by Alex. Brown, including the information provided by such firm at
several Board and Board Executive Committee meetings. Some of significant
strategic matters considered by Bancorporation's Board of Directors and
management included the reports that the Merger will result in (a) anticipated
cost savings attributable to consolidation of operations, increased
efficiencies, economies of scale, and related factors, (b) improved positions in
Bancorporation's major markets, and (c) a combined entity with increased
financial resources. Bancorporation believes that its prior successful
experience in effecting mergers will assist it in achieving the anticipated cost
savings and enhanced revenues. Certain risks of the Merger considered by
Bancorporation's Board and senior management included CIVISTA's loan quality,
litigation, regulatory, and other legal contingencies, the uncertainties
inherent in any combination of two companies, immediate book value and short
term earnings dilution for Bancorporation Common Stock, and the effort that
would be necessary to achieve the anticipated cost savings and enhanced
revenues.
During the review process, Bancorporation's senior management believed it
could achieve cost reductions over time through consolidating the operations of
CIVISTA, especially where those operations will overlap or become redundant, and
by achieving greater efficiencies. See "TERMS OF MERGER -- Conduct of CIVISTA's
Business Pending the Merger." The cost reductions are expected to result from
consolidation of certain facilities, elimination of duplicate data processing
and other corporate overhead, and consolidation of other operations. While
Bancorporation believes that these anticipated cost reductions are realistic and
achievable, no assurance can be given that the cost reductions, in fact, will be
achieved, or will be achieved within the time frame planned by Bancorporation,
or that any cost savings which are achieved will not be offset by declining
revenues or other charges to earnings. In the event that such cost reductions
are not achieved, or are not achieved within the time frame planned by
Bancorporation, there would be a reduction, although not believed to be material
in amount, in Bancorporation's anticipated earnings on a combined basis after
the Merger.
After consummation of the Merger, Citizens, the principal operating
subsidiary of CIVISTA, will be merged with and into First National-Massillon.
The merged entity will continue under the charter of First National-Massillon,
but will be operated under the name "Citizens National Bank," or a similar name.
The principal offices of Citizens Bank will be the offices formerly used by
Citizens.
OPINION OF BANCORPORATION'S FINANCIAL ADVISOR
Bancorporation has retained Alex. Brown to act as Bancorporation's
financial advisor in connection with the Merger and related matters. Alex. Brown
was selected to act as Bancorporation's financial advisor based upon its
qualifications, expertise and reputation, as well as Alex. Brown's prior
investment banking relationship and familiarity with Bancorporation. Alex. Brown
regularly publishes research reports regarding the financial services industry
and the businesses and securities of publicly owned companies in that industry.
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On August 10, 1994, the day upon which Bancorporation executed the Merger
Agreement, Alex. Brown delivered an opinion (the "Opinion") to the
Bancorporation Board that as of such date the Exchange Ratio of 1.723 shares of
Bancorporation Common Stock to be paid by Bancorporation for each share of the
CIVISTA Common Stock, was fair to the holders of Bancorporation Common Stock
from a financial point of view. Such Opinion was updated as of the date of this
Prospectus and Joint Proxy Statement. No limitations were imposed by the
Bancorporation Board upon Alex. Brown with respect to the investigations made or
procedures followed by them in rendering the Opinion.
The full text of the Opinion, which sets forth assumptions made, matters
considered and limits on the review undertaken, is attached hereto as Appendix B
to this Prospectus and Joint Proxy Statement and is incorporated herein by
reference. Bancorporation's stockholders are urged to read the Opinion in its
entirety. The following summary of the Opinion is qualified in its entirety by
reference to the full text of such Opinion.
The Exchange Ratio was determined pursuant to a competitive bidding process
conducted by CIVISTA and its financial advisor, McDonald & Company, and was
approved by Bancorporation's Board of Directors. During the bidding process,
Alex. Brown advised Bancorporation with respect to potential exchange ratios
that were discussed and the effects of such ratios on the stockholders of
Bancorporation from a financial point of view. In rendering its Opinion, Alex.
Brown (a) reviewed the Merger Agreement, certain publicly available business and
financial information concerning Bancorporation and CIVISTA, and certain
internal financial analyses and forecasts for Bancorporation and CIVISTA
prepared by their respective managements; (b) held discussions with members of
senior management of Bancorporation and CIVISTA regarding the past and current
business operations, financial condition, and future prospects of Bancorporation
and CIVISTA; (c) reviewed with members of the senior management of
Bancorporation the results of their due diligence examination of CIVISTA and the
expected cost savings and revenue enhancements relating to the Merger; (d)
reviewed the reported price and trading activity for Bancorporation Common Stock
and CIVISTA Common Stock and compared certain financial and stock market
information for Bancorporation and CIVISTA with similar information for certain
other financial institutions, the securities of which are publicly traded; (e)
reviewed the financial terms of certain recent business combinations which Alex.
Brown deemed comparable in whole or in part; and (f) performed such other
studies and analyses as Alex. Brown considered appropriate.
Alex. Brown relied upon, without independent verification, the accuracy and
completeness of all of the financial and other information reviewed by and
discussed with it for purposes of its Opinion. With respect to Bancorporation's
financial forecasts for Bancorporation and CIVISTA and the underlying
assumptions, including the financial impact of the projected cost savings,
operating synergies and revenue enhancements from the Merger, Alex. Brown
assumed that such financial forecasts were reasonably prepared on bases
reflecting the best currently available estimates and judgments of
Bancorporation's management as to Bancorporation's future financial performance
and that the financial forecasts provided a reasonable basis upon which Alex.
Brown could form its Opinion. Alex. Brown did not make independent evaluations
or appraisals of the assets or liabilities of Bancorporation or CIVISTA nor was
it furnished with any such appraisals.
The summary set forth below does not purport to be a complete description
of the analyses performed by Alex. Brown in this regard. The preparation of a
fairness opinion involves various determinations as to the most appropriate and
relevant methods of financial analysis and the application of these methods to
the particular circumstances and, therefore, such an opinion is not readily
susceptible to summary description. Accordingly, notwithstanding the separate
factors discussed below, Alex. Brown believes that its analyses must be
considered as a whole and that selecting portions of its analyses and of the
factors considered by it, without considering all analyses and factors, could
create an incomplete view of the evaluation process underlying its opinion. No
one of the analyses performed by Alex. Brown was assigned a greater significance
than any other. In performing its analyses, Alex. Brown made numerous
assumptions with respect to industry performance, business and economic
conditions and other matters, many of which are beyond Bancorporation's or
CIVISTA's control. The analyses performed by Alex. Brown are not necessarily
indicative of actual values or future results, which may be significantly more
or less favorable than suggested by such analyses. Additionally, analyses
relating to the values of businesses do not purport to be appraisals or to
reflect the prices at which businesses actually may be sold.
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DILUTION ANALYSIS. Using securities analysts' consensus earnings estimates
and those prepared by Bancorporation's management, and the earnings estimates of
CIVISTA prepared by Bancorporation's management and discussed with Alex. Brown
for 1995, 1996 and 1997, Alex. Brown compared the earnings per share of
Bancorporation Common Stock to the earnings per share of the common stock of the
combined company on a pro forma basis. Based on such analysis and assuming that
projected cost savings and revenue enhancements aggregating $1.9 million, $5.8
million and $6.7 million, respectively, for the calendar years 1995, 1996 and
1997 are achieved, the proposed transaction would dilute Bancorporation's
earnings per share by $0.10 and $0.01 in 1995 and 1996 respectively, and add to
Bancorporation's earnings per share by $0.02 in 1997. In addition, the pro forma
merger analysis showed the Merger would be accretive to Bancorporation's capital
ratios.
CONTRIBUTION ANALYSIS. Alex. Brown analyzed the balance sheet and income
statement contribution of CIVISTA to the combined company on a pro forma basis
for the year ended December 31, 1993, and for the quarter ended March 31, 1994.
Of the combined company, CIVISTA would have represented between 16.6% and 19.8%
in the balance sheet categories of assets, loans, deposits, stated equity and
tangible equity as of December 31, 1993, and March 31, 1994. On a pro forma
basis (assuming fully phased-in projected cost savings and revenue enhancements
were achieved in 1993), CIVISTA would have contributed 26.4% of the combined
company's calendar 1993 net income. Based on the Exchange Ratio, the
shareholders of CIVISTA would own 19.1% of the combined company.
ANALYSIS OF SELECTED SAVINGS BANK MERGER TRANSACTIONS. Alex. Brown also
compared the Merger on the basis of multiples of latest twelve months ("LTM")
earnings, stated book value, tangible book value, total assets and core deposits
of CIVISTA implied by the aggregate consideration to be paid in the Merger
considered as of the date of its oral opinion, with the same ratios in recent
acquisitions of savings banks which Alex. Brown deemed comparable. In conducting
the analysis, Alex. Brown emphasized in-market transactions as well as recent
transactions (announced since January 1, 1994) in which the seller possessed an
asset base in excess of $500 million, as these transactions are most comparable
to the Merger. Such comparable acquisitions numbered 20 and include: Astoria
Financial Corporation's acquisition of Fidelity New York (NY); First Interstate
Corporation's acquisition of University Savings Bank (WA); New York Bancorp's
acquisition of Hamilton Bancorp (NY); North Fork Bancorp's acquisition of Metro
Bancshares (NY); Citizens Financial Group's acquisition Quincy Savings Bank
(MA); Shawmut National Corporation's acquisition of Northeast Federal
Corporation (CT); First Interstate Corporation's acquisition of Sacramento
Savings Bank (CA); Fleet Financial Group's acquisition of NBB Bancorp, Inc.
(MA); McAndrews & Forbes acquisition of First Nationwide FSB (CA); American
Federal Bank's acquisition of United Financial of SC (SC); AMFED Financial
Inc.'s acquisition of First Western Financial (NV); NBD Bancorp's acquisition of
AmeriFed Financial Corp. (IL); Sovereign Bancorp's acquisition of Shadow Lawn
SB, SLA (NJ); Anchor Bancorp's acquisition of Lincorp Holdings (NY); CoreStates
Financial Corp's acquisition of Germantown Savings Bank (PA); Bank of Boston
Corporation's acquisition of Pioneer Financial Co-Op Bank (MA); Summit Bancorp's
acquisition of Crestmont Financial (NJ); First Fidelity Bancorporation's
acquisition of First Inter-Bancorp (NY); First Union Corporation's acquisition
of BancFlorida Financial Corporation (FL); and Fifth Third Bancorp's acquisition
of Cumberland Federal Bancorp (KY) (the "National Transactions"). The National
Transactions group was further segmented into transactions in which the selling
savings bank generated superior profitability, defined as a return on average
assets exceeding 1.25% during the year of an announced acquisition
("Profitability-Segmented Transactions"). A total of five transactions fell
within this segmented group.
Based on the closing stock price of Bancorporation Common Stock on August
9, 1994 ($25.00 per share), the Exchange Ratio implied merger consideration of
$43.08 per CIVISTA share (the "Comparison Value"). The relative multiples of the
Comparison Value and each of the comparable acquisition transaction groupings
are provided in the following table:
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<PAGE> 35
<TABLE>
<CAPTION>
PURCHASE PRICE AS A MULTIPLE OF
- -------------------------------------------------------------------------------------------------
STATED TANGIBLE LTM TOTAL
BOOK VALUE BOOK VALUE EARNINGS ASSETS
---------- ---------- -------- ------
CORE
DEPOSIT
PREMIUM
-------
<S> <C> <C> <C> <C> <C>
COMPARISON VALUE................. 172.4% 172.4% 12.5x 19.2% 10.7%
TRANSACTIONS GROUP
NATIONAL
Mean........................ 150.0% 165.0% 13.2x 12.5% 6.1%
High........................ 262.4% 263.5% 28.5x 18.8% 12.7%
Low......................... 65.0% 110.9% 7.7x 3.7% 0.2%
PROFITABILITY-SEGMENTED
Mean........................ 166.2% 183.3% 13.7x 17.2% 8.3%
High........................ 182.9% 206.0% 18.0x 18.8% 10.4%
Low......................... 142.4% 161.8% 8.8x 14.0% 3.4%
</TABLE>
Pursuant to the terms of an engagement letter dated August 1, 1994,
Bancorporation has agreed to pay Alex. Brown $35,000 for acting as financial
advisor in connection with the Merger (including rendering its opinions) and for
its acting as financial advisor in certain other transactions. In addition,
Bancorporation has agreed to pay Alex. Brown an additional fee of $375,000 to be
paid at and contingent upon the consummation of the Merger. Whether or not the
Merger is consummated, Bancorporation also has agreed to indemnify Alex. Brown
and certain related persons against certain liabilities relating to or arising
out of its engagement.
ALEX. BROWN'S OPINION IS DIRECTED TO THE BOARD OF DIRECTORS OF
BANCORPORATION ONLY AND ONLY TO THE EXCHANGE RATIO AND DOES NOT CONSTITUTE A
RECOMMENDATION TO ANY BANCORPORATION STOCKHOLDER AS TO HOW SUCH STOCKHOLDER
SHOULD VOTE AT THE BANCORPORATION SPECIAL MEETING.
RECOMMENDATION OF BANCORPORATION'S BOARD OF DIRECTORS
THE BOARD OF DIRECTORS OF BANCORPORATION UNANIMOUSLY RECOMMENDS THAT ITS
STOCKHOLDERS VOTE FOR THE ADOPTION OF THE MERGER AGREEMENT AND FOR THE OTHER
PROPOSALS.
TERMS OF MERGER
This portion of the Prospectus and Joint Proxy Statement describes various
aspects of the Merger. The following description does not purport to be complete
and is qualified in its entirety by reference to the Merger Agreement attached
hereto as Appendix A and incorporated herein by reference. The stockholders of
Bancorporation and CIVISTA are urged to read the Merger Agreement in its
entirety.
GENERAL
The Merger Agreement provides that, subject to the satisfaction or waiver
of certain conditions (including, among other things, the adoption of the Merger
Agreement by the stockholders of CIVISTA and Bancorporation and the receipt of
all necessary regulatory approvals), CIVISTA will be merged with and into
Bancorporation at the Effective Time. The separate corporate existence of
CIVISTA will cease at the Effective Time, Bancorporation will be the surviving
corporation in the Merger and the stockholders of CIVISTA will become
stockholders of Bancorporation. See "TERMS OF MERGER -- Effective Time."
CONVERSION OF CIVISTA CAPITAL STOCK INTO BANCORPORATION CAPITAL STOCK
CONVERSION OF CIVISTA COMMON STOCK. At the Effective Time, each share of
CIVISTA Common Stock then issued and outstanding (other than shares of CIVISTA
Common Stock (a) owned by Bancorporation for its own account, (b) held in the
treasury of CIVISTA, and (c) shares as to which dissenters' rights have been
perfected) will be cancelled and exchanged for the right to receive 1.723 shares
of Bancorporation Common
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Stock. See "DESCRIPTION OF BANCORPORATION CAPITAL STOCK" and "COMPARISON OF
BANCORPORATION AND CIVISTA CAPITAL STOCK."
NO EFFECT ON BANCORPORATION COMMON STOCK. At the Effective Time, each share
of Bancorporation Common Stock then issued and outstanding will continue to be
one share of Bancorporation Common Stock.
NO FRACTIONAL SHARES OF BANCORPORATION COMMON STOCK TO BE ISSUED. No
fractional shares of Bancorporation Common Stock will be issued in the Merger.
In lieu of fractional shares, each holder of shares of CIVISTA Common Stock who
otherwise would have been entitled to a fraction of a share of Bancorporation
Common Stock, upon surrender of his certificates representing shares of CIVISTA
Common Stock, will be paid the cash value (without interest) of such fraction,
which will be equal to such fraction multiplied by the average of the high and
low sales prices of Bancorporation Common Stock as reported on NASDAQ on the
trading day immediately preceding the Effective Time.
MANNER OF EXCHANGING CIVISTA CERTIFICATES FOR BANCORPORATION CERTIFICATES.
Bancorporation has selected First National Bank of Ohio ("First National") as
the exchange agent (the "Exchange Agent") to effect the exchange of certificates
in connection with the Merger. Promptly after the Effective Time, the Exchange
Agent will mail to each stockholder of record (other than holders of CIVISTA
Common Stock who have demanded and perfected dissenters' rights) a notice
advising the holder of the effectiveness of the Merger, accompanied by a
transmittal form (the "Transmittal Form"). The Transmittal Form will contain
instructions with respect to the surrender of certificates representing CIVISTA
Common Stock to be exchanged for Bancorporation Common Stock (together with cash
in lieu of any fractional share) and will specify that delivery will be
effected, and risk of loss and title to such certificates will pass, only upon
proper delivery of the certificates to the Exchange Agent.
CIVISTA STOCK CERTIFICATES SHOULD NOT BE FORWARDED TO THE EXCHANGE AGENT
UNTIL A CIVISTA STOCKHOLDER HAS RECEIVED A TRANSMITTAL FORM AND SHOULD NOT BE
RETURNED WITH THE ENCLOSED PROXY.
RIGHTS OF HOLDERS OF CIVISTA STOCK CERTIFICATES PRIOR TO SURRENDER. Upon
surrender to the Exchange Agent of certificates representing shares of CIVISTA
Common Stock, the holder thereof will be entitled to receive in exchange
therefor a certificate(s) representing the appropriate number of shares of
Bancorporation Common Stock to which such holder is entitled and cash in lieu of
any fractional shares of Bancorporation Common Stock. Unless and until the
certificates representing shares of CIVISTA Common Stock are so surrendered, no
dividend or other distribution declared or payable to holders of record of
Bancorporation Common Stock as of any time subsequent to the consummation of the
Merger will be paid to the holder of any such unsurrendered certificate. Holders
of unsurrendered certificates are entitled to vote after the Effective Time at
any meeting of Bancorporation stockholders regardless of whether such holders
have exchanged their certificates, provided that no holder of unsurrendered
certificates may vote at any meeting of Bancorporation stockholders that is held
more than 30 days after the mailing of the notice and Transmittal Form. Upon
surrender of certificates to the Exchange Agent, the former CIVISTA stockholder
will receive certificates representing the Bancorporation Common Stock into
which such stockholder's shares of CIVISTA Common Stock were converted and the
dividends or other distributions (without interest) that have theretofore become
payable with respect to such Bancorporation Common Stock.
LOST CERTIFICATES. Any CIVISTA stockholder who has lost or misplaced a
certificate for any shares of CIVISTA Common Stock should immediately contact
Janice R. Van Voorhis, Secretary, at CIVISTA at (216) 456-7757, to begin the
process for replacing the lost certificate prior to the Effective Time. The
Merger Agreement provides for a special exchange procedure for stockholders of
CIVISTA who are unable to deliver the certificate(s) which represents their
shares of CIVISTA Common Stock and such procedure will be explained in the
Transmittal Form, but such stockholders will find it easier to complete the
exchange process if they obtain a replacement certificate(s) from CIVISTA prior
to the Effective Time.
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<PAGE> 37
TREATMENT OF STOCK OPTIONS OUTSTANDING UNDER CIVISTA EMPLOYEE STOCK OPTION
PLANS. As of October 24, 1994, there were unexercised options outstanding under
the CIVISTA Option Plans to purchase 281,200 shares of CIVISTA Common Stock at
prices varying from $7.4375 to $21.00 per share. As of that date, all
outstanding options to purchase shares of CIVISTA Common Stock were exercisable.
Under the Merger Agreement, CIVISTA has agreed not to grant additional options
under the CIVISTA Option Plans without the consent of Bancorporation. See "TERMS
OF MERGER -- Interests of CIVISTA Executive Officers and Directors."
Each CIVISTA stock option outstanding will be assumed at the Effective Time
by Bancorporation and will continue to be an issued and outstanding stock option
of Bancorporation in accordance with the terms of the respective CIVISTA Option
Plans, except that: (a) Bancorporation and its Compensation Committee will be
substituted for CIVISTA and the committee administering such CIVISTA Option
Plans, (b) from and after the Effective Time, each such CIVISTA stock option may
be exercised only for Bancorporation Common Stock, (c) each CIVISTA stock option
will become an option to purchase a number of shares of Bancorporation Common
Stock equal to the product arrived at by multiplying the Exchange Ratio by the
number of shares of CIVISTA Common Stock subject to such option immediately
prior to the Effective Time, and (d) the exercise price per share of
Bancorporation Common Stock at which each such CIVISTA stock option is
exercisable will be the amount arrived at by dividing the exercise price per
share of Bancorporation Common Stock at which such CIVISTA stock option is
exercisable immediately prior to the Effective Time by the Exchange Ratio.
Bancorporation will, however, not issue or pay for any fractional share
otherwise issuable upon any exercise of a CIVISTA stock option. Prior to the
Closing, Bancorporation will reserve for issuance (and, if not previously
registered pursuant to the Securities Act, register) the number of shares of
Bancorporation Common Stock necessary to satisfy Bancorporation's obligations
with regard to CIVISTA stock options.
CONDUCT OF BANCORPORATION'S BUSINESS PENDING THE MERGER
The Merger Agreement requires Bancorporation (including its subsidiaries)
to conduct its business, during the period from the date the Merger Agreement
was signed until the Effective Time, in such a manner so as not to materially
interfere with the ability to consummate the Merger, to delay the Effective Time
or to have a material adverse effect upon the transaction.
CONDUCT OF CIVISTA'S BUSINESS PENDING THE MERGER
GENERAL. The Merger Agreement requires CIVISTA (including its subsidiaries)
to conduct its business, during the period from the date the Merger Agreement
was signed until the Effective Time, in the ordinary course substantially
consistent with its practices in effect on the date the Merger Agreement was
signed. In addition, the Merger Agreement restricts CIVISTA from engaging in
certain transactions, except as agreed by Bancorporation, during the interim
period from the date the Merger Agreement was signed until the Effective Time,
including, among other things, (a) amending, repealing, or otherwise modifying
the CIVISTA Articles or Regulations, or comparable organizational documents of
any of the subsidiaries of CIVISTA, (b) entering into any loan or credit
commitment to, or investing or agreeing to invest in, any person or entity if
such commitment or investment would exceed $250,000 as a residential loan or
$500,000 as a commercial loan, without first consulting with Bancorporation,
except that CIVISTA and its subsidiaries may honor contractual obligations in
existence on the date of the Merger Agreement, (c) selling, assigning or
disposing of certain of its significant assets to a third party or purchasing or
acquiring certain significant assets from a third party, (d) entering into any
transaction, agreement, or commitment outside the ordinary course of its
business which is material to CIVISTA and its subsidiaries taken as a whole, (e)
issuing or selling any capital stock or other securities (with certain limited
exceptions, including pursuant to the exercise of employee stock options
outstanding on the date of the Merger Agreement), (f) acquiring beneficial
ownership of more than 5% of any class of equity securities of any corporation,
(g) declaring a dividend, except for a regular quarterly cash dividend on
CIVISTA Common Stock not in excess of 10c per share and its regular extra cash
dividend in the amount of 25c per share, or (h) adopting or amending (with
certain limited exceptions) any of its employee compensation, bonus, or benefit
plans or, except in amounts generally consistent with past practice, increasing
the compensation or fringe benefits of any present or former director, officer,
or employee or paying any bonus, compensation, or benefit not required by any
existing plan or arrangement.
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<PAGE> 38
NO SOLICITATION OF ALTERNATIVE ACQUISITION TRANSACTIONS. The Board of
Directors of CIVISTA is recommending unanimously that the holders of CIVISTA
Common Stock vote in favor of adoption of the Merger Agreement at the CIVISTA
Special Meeting. CIVISTA has agreed that neither it nor any of its subsidiaries
will solicit or initiate any proposals or offers from any person, or discuss or
negotiate with any such person, to acquire CIVISTA, any of its subsidiaries, any
material amount of its assets, any of its equity securities, or consider any
merger or business consolidations, except that CIVISTA and/or its subsidiaries
may furnish information to and discuss or negotiate with any person making an
unsolicited proposal if (i) the Board of Directors of CIVISTA determines in good
faith that such action is required for the directors of CIVISTA to fulfill their
fiduciary duties and obligations to the CIVISTA stockholders and other
constituencies under Ohio law, and (ii) prior to furnishing such information to,
or entering into discussions or negotiations with, such person or entity,
CIVISTA provides immediate written notice to Bancorporation to the effect that
it is furnishing information to, or entering into discussions or negotiations
with, such a person or entity. In addition, the Merger Agreement provides that
the CIVISTA Board of Directors may not withdraw or modify its recommendation to
the CIVISTA stockholders following receipt of a proposal for any such
transaction unless the Board of Directors of CIVISTA determines in good faith
that such action is required for the directors of CIVISTA to fulfill their
fiduciary duties and obligations to the CIVISTA stockholders and other
constituencies under Ohio law.
ADDITIONAL CIVISTA RESERVES, ACCRUALS, CHARGES, AND EXPENSES. The Merger
Agreement provides that Bancorporation and CIVISTA will consult and cooperate
with each other prior to the Effective Time (a) to conform CIVISTA's approach to
determining the level of the allowance for loan losses to the approach used by
Bancorporation, (b) to determine appropriate accruals, reserves and charges for
CIVISTA to establish and take in respect of excess facilities and equipment
capacity, separation and release costs, write-down or write-off of various
assets, and other appropriate accounting adjustments, taking into account
Bancorporation's business plan following the Merger, and (c) to determine the
amount and timing for recognizing, for financial accounting purposes, the
expenses of the Merger and the restructuring charges related to or to be
incurred in connection with the Merger. CIVISTA will, on a basis mutually
satisfactory to CIVISTA and Bancorporation, establish and take all such
reserves, accruals and charges and recognize, for financial accounting purposes,
such expenses and charges, provided that all conditions to Bancorporation's and
CIVISTA's obligations to consummate the Merger have been satisfied or waived and
that such reserves, accruals and changes are consistent with generally accepted
accounting principles.
CONDITIONS TO MERGER
CONDITIONS FOR BOTH BANCORPORATION AND CIVISTA. The obligations of each of
Bancorporation and CIVISTA to consummate the Merger are subject to the
fulfillment or waiver of certain conditions, including, but not limited to, the
following significant conditions:
(a) the Merger Agreement shall have been approved and adopted by the
requisite vote of the stockholders of Bancorporation and CIVISTA;
(b) there shall have been received all necessary approvals of the
transactions contemplated by the Merger Agreement from governmental agencies
(other than immaterial approvals), and such approvals shall not include any
conditions or requirements which, in the reasonable opinion of the Board of
Directors of Bancorporation, would have a Material Adverse Effect (as defined
below) on the anticipated economic and business benefits to Bancorporation,
taken as a whole;
(c) the Registration Statement shall have been declared effective by the
Commission and shall not be subject to a stop order;
(d) Bancorporation shall have received a written opinion from its legal
counsel as to certain federal income tax consequences of the Merger; and
(e) no temporary restraining order, injunction, or other order by any
federal or state court or agency which enjoins or prohibits consummation of the
Merger shall have been issued and remain in effect.
CONDITIONS FOR BANCORPORATION. The obligation of Bancorporation to
consummate the Merger is also subject to the fulfillment or waiver of additional
conditions including, but not limited to, the following:
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<PAGE> 39
(a) CIVISTA shall have performed in all material respects all of its
obligations contained in the Merger Agreement required to be performed at or
prior to the Effective Time;
(b) the representations and warranties of CIVISTA contained in the Merger
Agreement shall be true and correct as of the Effective Time, except (among
other exceptions) as expressly contemplated by the Merger Agreement and to the
extent that the inaccuracy of CIVISTA's representations or warranties,
individually or in the aggregate, shall not have a Material Adverse Effect on
CIVISTA;
(c) there shall not have been any change in the financial condition,
results of operations, or business of CIVISTA and its subsidiaries that either
individually or in the aggregate would have a Material Adverse Effect on
CIVISTA, other than as a result of any action taken by CIVISTA at the written
request of Bancorporation pursuant to the Merger Agreement to establish
specified additional reserves, accruals, charges, or expenses, or to divest
certain of the nonbanking subsidiaries or assets;
(d) the consolidated net worth of CIVISTA as of December 31, 1994, shall
not be less than $90.0 million, as increased by $1.5 million for each full
quarter in 1995 (or a pro rata amount per month if less than a full quarter)
before the Effective Time, unless the failure to meet this requirement results
from action taken by CIVISTA at the written request of Bancorporation pursuant
to the Merger Agreement to establish specified additional reserves, accruals,
charges, or expenses, or the impact thereof on the operating performance of
CIVISTA;
(e) Bancorporation shall have received a letter from Bancorporation's
independent auditors, Coopers & Lybrand, stating that, for financial reporting
purposes, the Merger qualifies for pooling-of-interests accounting treatment;
and
(f) receipt by Bancorporation of an opinion of CIVISTA's legal counsel
regarding certain customary legal matters.
CONDITIONS FOR CIVISTA. The obligation of CIVISTA to consummate the Merger
is also subject to the fulfillment or waiver of additional conditions including,
but not limited to, the following:
(a) Bancorporation shall have performed in all material respects all of its
obligations contained in the Merger Agreement required to be performed at or
prior to the Effective Time;
(b) the representations and warranties of Bancorporation contained in the
Merger Agreement shall be true and correct as of the Effective Time except
(among other exceptions) as expressly contemplated by the Merger Agreement and
to the extent that the inaccuracy of Bancorporation's representations or
warranties, individually or in the aggregate, shall not have a Material Adverse
Effect on Bancorporation;
(c) there shall not have been any change in the financial condition,
results of operations, or business of Bancorporation and its subsidiaries that
either individually or in the aggregate would have a Material Adverse Effect on
Bancorporation; and
(d) receipt by CIVISTA of an opinion of Bancorporation's legal counsel
regarding certain customary legal matters.
"Material Adverse Effect" is defined in the Merger Agreement to mean a
material adverse effect (other than as a result of changes (1) in banking laws
or regulations of general applicability or interpretations thereof by courts or
governmental entities, (2) in generally accepted accounting principles, or (3)
that should, under the circumstances, reasonably have been anticipated in light
of disclosures made in certain reports filed with the Commission by
Bancorporation or CIVISTA prior to the date of the Merger Agreement or in
writings delivered by one party to the other party prior to the date of the
Merger Agreement) on the respective condition (financial and otherwise), results
of operations, or business of Bancorporation and its subsidiaries, or CIVISTA
and its subsidiaries, as the case may be, taken as a whole, or on the ability of
Bancorporation or CIVISTA, as the case may be, to consummate the transactions
contemplated by the Merger Agreement, provided that the effect of any action
taken by CIVISTA, at the written request of Bancorporation pursuant to the
Merger Agreement to establish specified additional reserves, accruals, charges,
or expenses, or to divest certain nonbanking subsidiaries or assets, shall not
be taken into consideration in determining whether any Material Adverse Effect
has occurred. See "TERMS OF MERGER -- Conduct of CIVISTA's Business Pending the
Merger."
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<PAGE> 40
REGULATORY APPROVALS
Consummation of the Merger is subject to and conditioned upon receipt by
Bancorporation and CIVISTA of all necessary and material regulatory approvals.
Approvals must be obtained from the Board of Governors of the Federal Reserve
System ("Federal Reserve"), the Office of the Comptroller of the Currency
("OCC"), the Office of Thrift Supervision ("OTS"), and the Ohio Division of
Savings and Loan Associations ("Division"). Applications for these approvals
have all been filed, but to date approvals have not been granted by any of the
agencies. The Merger may not be consummated until all of these regulatory
approvals are received and until the 30th day after approval is received from
the latest of the Federal Reserve, OCC or the OTS.
ACTIONS REQUIRED FOR REGULATORY APPROVAL
MERGER AGREEMENT PROVISIONS. The Merger Agreement provides that each of
Bancorporation and CIVISTA shall use its diligent efforts to resolve any
objections asserted with respect to the Merger by the Federal Reserve, the
Department of Justice or any other governmental entity (including, without
limitation, objections under any antitrust and banking laws). In the event a
suit is threatened or instituted challenging the Merger as violative of the
antitrust laws, the Merger Agreement requires each of Bancorporation and CIVISTA
to use its diligent efforts to avoid the filing of, resist, or resolve such
suit. Bancorporation and CIVISTA must use their diligent efforts to take such
action as may be required (a) by the Federal Reserve, the Department of Justice
or any other governmental entity in order to resolve such objections as any of
them may have to the Merger, or (b) by any federal or state court of the United
States, in any suit brought by a private party or governmental entity
challenging the Merger as violative of any antitrust laws, in order to avoid the
entry of, or to effect the dissolution of, any injunction, temporary restraining
order, or other order, which has the effect of preventing the consummation of
the Merger.
DIVESTITURES. Bancorporation anticipates that it will be required to divest
certain of CIVISTA's nonbanking subsidiaries and assets in order to obtain
regulatory approvals for the Merger. The Federal Reserve in the past has
generally required that any divestitures of this type be accomplished by the
acquiror within a period of two years after the effective time of the merger.
Bancorporation and CIVISTA believe that any requirement for divestiture made by
the Federal Reserve would not, under the present policies of the Federal
Reserve, have a material adverse effect on the combined operations of
Bancorporation and CIVISTA, and would not adversely affect the ability of the
Merger to qualify as a pooling-of-interests for accounting and financial
reporting purposes. As part of its application filed with the Federal Reserve
for approval of the Merger, Bancorporation has proposed that it will divest the
following nonbanking subsidiaries or assets of CIVISTA: Crest Investments, Inc.,
Crest Insurance Agency, Inc., Citizens Investment Corporation, The CASNET Group,
Inc., Citizens Savings Corporation, and certain real estate assets held by a
division of CIVISTA. Bancorporation and CIVISTA do not believe there will be any
delay in the approval process based upon the requirements for the divestitures
as provided in the application to the Federal Reserve. Bancorporation and
CIVISTA have agreed to cooperate in arranging for the divestitures.
WAIVER OF CONDITIONS, AMENDMENT, OR TERMINATION OF THE MERGER AGREEMENT
WAIVER. The Merger Agreement provides that either Bancorporation or CIVISTA
may extend the time for the performance of the obligations of the other, waive
any inaccuracies in the representations or warranties of the other party
contained in the Merger Agreement or in any document delivered pursuant thereto,
waive compliance with any of the conditions or covenants of the other party
contained in the Merger Agreement, or waive or modify performance of any of the
obligations of the other party under the Merger Agreement. Notwithstanding these
provisions, the Merger cannot be completed unless the approvals of the Merger by
the Federal Reserve, OCC, OTS and the Division, and certain other regulatory
authorities are obtained and unless the stockholders of Bancorporation and
CIVISTA adopt the Merger Agreement by the requisite affirmative vote. See "TERMS
OF MERGER -- Regulatory Approvals," "SPECIAL MEETING OF BANCORPORATION
STOCKHOLDERS -- Vote Required" and "SPECIAL MEETING OF CIVISTA STOCKHOLDERS --
Vote Required."
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<PAGE> 41
AMENDMENT. The Merger Agreement may be amended, either before or after its
adoption by the stockholders of Bancorporation and CIVISTA, upon authorization
by the respective Boards of Directors of CIVISTA and Bancorporation. Any such
amendment, however, made subsequent to the adoption of the Merger Agreement by
the stockholders of CIVISTA may not (a) alter the amount or change the form of
the consideration contemplated by the Merger Agreement, or (b) alter or change
any of the terms of the Merger Agreement if such alteration or change would
adversely affect the holders of Bancorporation or CIVISTA Common Stock.
TERMINATION. The Merger Agreement may be terminated at any time prior to
the consummation of the Merger, whether before or after adoption of the Merger
Agreement by the stockholders of Bancorporation or CIVISTA, under the following
circumstances:
(a) by the Boards of Directors of each of Bancorporation and CIVISTA;
(b) by the Board of Directors of either Bancorporation or CIVISTA if the
Merger shall not have been consummated on or before April 30, 1995, unless the
failure to consummate by such date is related to the action or inaction of the
"Regulatory Authorities," as that term is defined in the Merger Agreement, and
such action or inaction is not directly related to either Bancorporation's or
CIVISTA's breach of their respective obligations, then on or before June 30,
1995;
(c) by the Board of Directors of CIVISTA if any of the conditions to
CIVISTA's obligation to consummate the Merger have not been met or waived by
CIVISTA at such time as such conditions can no longer be satisfied;
(d) by the Board of Directors of Bancorporation if any of the conditions to
Bancorporation's obligation to consummate the Merger have not been met or waived
by Bancorporation at such time as such conditions can no longer be satisfied;
(e) by the Board of Directors of either Bancorporation or CIVISTA if any
regulatory agency has denied approval of the Merger and neither Bancorporation
nor CIVISTA has timely filed a request for reconsideration or a petition seeking
review of such order;
(f) by CIVISTA if: (i) the average per share daily closing price of
Bancorporation Common Stock as reported on NASDAQ for a specified 20-day period
preceding the Effective Time is less than $21.875; and (ii) when compared to
$25.00 (the closing price of Bancorporation Common Stock on August 9, 1994),
such average per share price reflects a decline that is 10% greater than the
decline in a weighted average index of 18 identified financial institution
holding company stocks between August 9, 1994 and the average during a specified
20-day period prior to the Closing Date of the Merger; or
(g) by the Board of Directors of either Bancorporation or CIVISTA in the
event of a material breach by the other party of any representation, warranty,
covenant, or agreement contained in the Merger Agreement, which breach is not
cured within 30 days after written notice thereof is given to the party
committing such breach.
EXPENSES. If the Merger Agreement is terminated by Bancorporation or
CIVISTA because of the material breach by the other party of any representation,
warranty, covenant, undertaking, or restriction contained in the Merger
Agreement and if the terminating party is not in material breach of any
representation, warranty, covenant, undertaking, or restriction contained in the
Merger Agreement, then the breaching party shall pay all costs and expenses of
the terminating party; provided, however, that if the Merger Agreement is
terminated under other circumstances, all costs and expenses incurred in
connection with the Merger Agreement and the transactions contemplated thereby,
will be paid by the party incurring such costs and expenses.
EFFECTIVE TIME
Upon satisfaction of all conditions under the Merger Agreement that have
not been waived, Bancorporation and CIVISTA will file appropriate certificates
with the Secretary of State of the State of Ohio. The Merger will become
effective when such filing has been made, whereupon Bancorporation will be the
surviving corporation and the separate existence of CIVISTA will cease. The
Effective Time will occur as promptly as practicable after the date all of the
conditions to the Merger are satisfied or duly waived or at such other time
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and date as Bancorporation and CIVISTA may agree. Bancorporation and CIVISTA
currently anticipate that the Merger will be completed during the first quarter
of 1995, although delays in obtaining the necessary regulatory approvals, which
approvals cannot be waived and have the greatest possibility of being delayed,
could delay such completion of the Merger. See "TERMS OF MERGER -- Regulatory
Approvals" and "Actions Required for Regulatory Approval."
CIVISTA STOCK OPTION
GENERAL. Concurrently with the execution of the Merger Agreement,
Bancorporation and CIVISTA entered into the CIVISTA Stock Option so as to induce
Bancorporation to enter into the Merger Agreement. One effect of the CIVISTA
Stock Option is to increase the likelihood that the Merger will be consummated
in part by making it both more difficult and more expensive for another party to
attempt to obtain control of or acquire CIVISTA.
Pursuant to the CIVISTA Stock Option, CIVISTA granted Bancorporation an
option to purchase up to 350,655 authorized but unissued shares of CIVISTA
Series A Preferred Stock ("CIVISTA Preferred Stock"), representing approximately
10% of the number of shares of CIVISTA Common Stock outstanding as of August 9,
1994 (without giving effect to the issuance of any shares subject to the CIVISTA
Option Plans and the CIVISTA Stock Option). The purchase price is $33.50 per
share.
PURCHASE EVENTS; EXERCISE OF OPTION. The CIVISTA Stock Option provides that
Bancorporation may exercise the CIVISTA Stock Option upon the occurrence of one
or more of the following "Purchase Events:"
(a) CIVISTA or any of its subsidiaries, without the prior written consent
of Bancorporation, authorizes, recommends, proposes, or publicly announces an
intention to authorize, recommend, or propose, or enters into an agreement to
effect (i) a merger, consolidation, or other business combination involving
CIVISTA or any of its significant subsidiaries with or into any person (other
than a merger, consolidation, joint venture, or other business combination with
or into Bancorporation or any of Bancorporation's subsidiaries, or a merger or
consolidation of any of CIVISTA's subsidiaries with or into CIVISTA or any of
its other subsidiaries), (ii) a sale, lease, or other disposition of assets or
earning power of CIVISTA or any of its subsidiaries, in one or more
transactions, representing 25% or more of the consolidated assets or earning
power of CIVISTA and its subsidiaries to any person (other than Bancorporation
or any of its subsidiaries), or (iii) an issuance, sale, or other disposition
(whether by means of a merger, consolidation, share exchange, or other
transaction) of securities representing 20% or more of the voting power of
CIVISTA or any of its significant subsidiaries to any person (other than
Bancorporation or any of its subsidiaries) (any of the foregoing being an
"Acquisition Transaction;" except that, if Bancorporation has given its prior
written consent to any such transaction, such transaction will not be considered
an "Acquisition Transaction");
(b) any person (other than Bancorporation or any of its subsidiaries)
commences or files a registration statement under the Securities Act with
respect to, a tender offer or exchange offer to acquire shares of either CIVISTA
Common Stock or Preferred Stock ("CIVISTA Capital Stock") such that, upon
consummation of the offer, that person would beneficially own 25% or more of the
CIVISTA Capital Stock then outstanding;
(c) any person (other than Bancorporation or any of its subsidiaries, any
of CIVISTA's subsidiaries in a fiduciary capacity in the ordinary course of its
business, any employee benefit plan or employee stock ownership plan of CIVISTA
or any of its subsidiaries, or any person organized, appointed, or established
by CIVISTA or any of its subsidiaries for or pursuant to any such plan), alone
or together with such person's affiliates, acquires beneficial ownership of 20%
or more of the CIVISTA Capital Stock then outstanding, or any group (other than
a group of which Bancorporation or any of its subsidiaries, any of CIVISTA's
subsidiaries in a fiduciary capacity in the ordinary course of its business, any
employee benefit plan or employee stock ownership plan of CIVISTA or any of its
subsidiaries, or any person organized, appointed, or established by CIVISTA or
any of its subsidiaries for or pursuant to any such plan is a member) has been
formed that beneficially owns 20% or more of the CIVISTA Capital Stock then
outstanding; or
(d) the holders of CIVISTA Capital Stock do not approve the Merger
Agreement at the meeting of such holders (or any adjournment or postponement
thereof) held for the purpose of voting on the Merger Agreement, such meeting is
not held or is canceled (and not rescheduled) prior to termination of the Merger
Agreement, or CIVISTA's Board of Directors withdraws or modifies in a manner
adverse to Bancorporation
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<PAGE> 43
the recommendation of CIVISTA's Board of Directors that CIVISTA's stockholders
approve the Merger and adopt the Merger Agreement, in each case after any person
(other than Bancorporation or any of its subsidiaries), after August 10, 1994,
(i) publicly announces a bona fide proposal, or publicly discloses a bona fide
intention to make a bona fide proposal, to engage in an Acquisition Transaction
(or CIVISTA publicly discloses receipt of such a proposal) or (ii) files an
application or gives notice under the BHCA or the Change in Bank Control Act of
1978 for approval to engage in an Acquisition Transaction.
Generally, the right to exercise the CIVISTA Stock Option terminates upon
the earliest of (a) the completion of the Merger, (b) 12 months after the first
occurrence of a Purchase Event, and (c) termination of the Merger Agreement in
accordance with its terms before the occurrence of a Purchase Event.
In the event of any change in the CIVISTA Capital Stock by reason of a
stock dividend, split-up, recapitalization, combination, exchange of shares, or
similar transaction, the type and number of shares or securities subject to the
CIVISTA Stock Option and the purchase price therefor will be adjusted
appropriately.
REPURCHASE OF OPTION. During the 12-month period following the first
occurrence of a Repurchase Event (as described below), Bancorporation will have
the right to require CIVISTA to repurchase the CIVISTA Stock Option and all
shares of CIVISTA Preferred Stock purchased upon exercise of the CIVISTA Stock
Option that are beneficially owned by Bancorporation at the time the repurchase
is requested. The aggregate repurchase price will be the sum of (a) the
aggregate purchase price paid by Bancorporation for all shares of CIVISTA
Preferred Stock purchased upon exercise of the CIVISTA Stock Option that are
beneficially owned by Bancorporation at the time the repurchase is requested,
(b) the excess, if any, of the Applicable Price (as described below) over the
purchase price paid by Bancorporation for each share of CIVISTA Preferred Stock
purchased upon exercise of the CIVISTA Stock Option that is beneficially owned
by Bancorporation at the time the repurchase is requested, multiplied by the
number of such shares, and (c) the excess, if any, of the Applicable Price over
the purchase price payable upon exercise of the CIVISTA Stock Option multiplied
by the number of shares with respect to which the CIVISTA Stock Option has not
been exercised.
For purposes of this section, "Repurchase Event" has the same meaning as
"Acquisition Transaction," except that the percentage referred to in
subparagraph (a)(ii) of the definition of Acquisition Transaction above in the
paragraph captioned "Purchase Events; Exercise of Option" is 50%, and the
percentage referred to in subparagraph (a)(iii) of the definition is 40%. For
purposes of this section, "Applicable Price" means the highest of (x) the
highest price per share to be paid by any person (other than Bancorporation or
any of its subsidiaries) for CIVISTA Capital Stock or the highest consideration
per share to be received by the holders of CIVISTA Capital Stock, in each case
pursuant to an agreement for a merger, consolidation, joint venture, or other
business combination with CIVISTA that is entered into after August 10, 1994 and
before the repurchase is requested, (y) the highest closing sales price per
share of CIVISTA Common Stock reported on NASDAQ (or, if transactions in CIVISTA
Common Stock are not reported on NASDAQ, the highest bid price quoted on the
principal trading market on which the CIVISTA Common Stock is traded as reported
by a recognized source) during the 60 business days before the repurchase is
requested, and (z) in the event of the sale by CIVISTA or its subsidiaries, in
one or more transactions, of assets or earning power aggregating more than 50%
of the consolidated assets or earning power of CIVISTA and its subsidiaries to
any person (other than Bancorporation or any of its subsidiaries), the sum of
the price paid for such assets or earning power and the current value of the
remaining assets of CIVISTA and its subsidiaries, divided by the number of
shares of CIVISTA Common Stock outstanding at the time of the sale.
Notwithstanding any other provision, the consideration payable to Bancorporation
shall be adjusted so that the maximum payable to Bancorporation under this
provision will not exceed the aggregate price paid by Bancorporation pursuant to
the CIVISTA Stock Option, plus $4.0 million.
Except to the extent that Bancorporation has exercised its right to require
CIVISTA to repurchase the CIVISTA Stock Option and the CIVISTA Preferred Stock
purchased upon exercise of the CIVISTA Stock Option, as described in the
preceding paragraph, during the six-month period beginning 12 months after the
first occurrence of a Repurchase Event, CIVISTA will have the right to
repurchase from Bancorporation all of the shares of CIVISTA Preferred Stock
purchased upon exercise of the CIVISTA Stock Option that are
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<PAGE> 44
beneficially owned by Bancorporation at the time the repurchase is requested.
The aggregate price will be the greater of (a) 110% of the average closing sales
price per share of CIVISTA Common Stock reported on NASDAQ (or, if transactions
in CIVISTA Common Stock are not reported on NASDAQ, the highest bid price quoted
on the principal trading market on which the CIVISTA Common Stock is traded as
reported by a recognized source) for the 10 business days before the repurchase
is requested and (b) the sum of (x) the purchase price per share paid by
Bancorporation for such shares and (y) Bancorporation's "pre-tax per share
carrying cost" (as defined in the CIVISTA Stock Option) for such shares,
multiplied in either case by the number of shares being repurchased.
REGISTRATION RIGHTS; RIGHT OF FIRST REFUSAL. Upon request by Bancorporation
within the three-year period following the first exercise of the CIVISTA Stock
Option (or later in the event of a delay in obtaining certain regulatory
approvals), CIVISTA will prepare and file a registration statement with the
Commission if such registration is necessary to permit the sale or other
disposition of the shares of CIVISTA Preferred Stock purchased upon exercise of
the CIVISTA Stock Option. CIVISTA will also permit Bancorporation to include the
shares in certain registration statements initiated by CIVISTA.
Until the later of (a) 24 months following the first exercise of the
CIVISTA Stock Option and (b) termination of the CIVISTA Stock Option, CIVISTA
will have a right of first refusal with respect to the sale or other disposition
of shares of CIVISTA Preferred Stock purchased upon exercise of the CIVISTA
Stock Option. This right of first refusal will not, however, apply to (x) any
disposition in which the proposed transferee will receive not more than two
percent of the outstanding CIVISTA Capital Stock, (y) any registered public
offering in which steps are taken to reasonably ensure that no purchaser will
acquire more than two percent of the outstanding CIVISTA Capital Stock, and (z)
any transfer to a wholly owned subsidiary of Bancorporation that agrees to be
bound by the terms of the CIVISTA Stock Option.
TERMINATION OF OPTION. Bancorporation may not exercise the CIVISTA Stock
Option if, at the time of exercise, it is in material breach of the Merger
Agreement. Moreover, CIVISTA's obligations under the CIVISTA Stock Option will
terminate and the CIVISTA Stock Option will no longer be exercisable if the
Merger Agreement is terminated and Bancorporation is in material breach of the
Merger Agreement when it is terminated; provided that, for this purpose, if the
Merger Agreement is to be terminated by Bancorporation, CIVISTA must upon
request notify Bancorporation if a material breach by Bancorporation exists and,
if the Merger Agreement is terminated by CIVISTA and all of the material
breaches are curable, CIVISTA must provide Bancorporation with notice of the
material breaches and an opportunity to cure.
ADDITIONAL PROVISIONS. Certain rights and obligations of CIVISTA and
Bancorporation under the CIVISTA Stock Option are subject to receipt of required
regulatory approvals. Among others things, regulatory approvals are required for
the acquisition by Bancorporation of more than five percent of the outstanding
CIVISTA Capital Stock.
INTERESTS OF CERTAIN PERSONS IN MERGER
DIRECTORS AND OFFICERS. Mr. Howard L. Flood, the President and Chief
Executive Officer of Bancorporation, will continue as the President and Chief
Executive Officer of Bancorporation, as the surviving corporation. The persons
currently serving as directors of Bancorporation will continue to serve on the
Board of Directors of the surviving entity.
Promptly after the Merger, Mr. Richard G. Gilbert, the Chairman and Chief
Executive Officer of CIVISTA and a board member of CIVISTA and Citizens, will be
appointed as a member of the Board of Directors of Bancorporation and Citizens
Bank. Mr. Gilbert will not become an officer of Bancorporation. In addition,
promptly after the Merger, Mr. Jack R. Gravo, the President of CIVISTA and the
Executive Vice President, Chief Operating Officer and Chief Financial Officer of
Citizens, and a board member of CIVISTA and Citizens, will become an Executive
Vice President of Bancorporation and the President and Chief Executive Officer
of Citizens Bank. The persons currently serving on the Board of Directors of
Citizens will be appointed as directors of Citizens Bank to serve with the
existing directors of First National-Massillon.
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SEVERANCE AGREEMENTS. Certain of the executive officers of CIVISTA, some of
whom also serve as directors of CIVISTA and/or its subsidiaries, have interests
in the Merger as a result of the Severance Agreements which they entered into
with CIVISTA or one of its subsidiaries. These Severance Agreements contain
provisions which are activated upon a termination of employment of such
executive officer after a "change of control" of CIVISTA. Bancorporation has
agreed to assume the obligations under the Severance Agreements as of the
Effective Time. In the event any such executive officer is terminated during the
period specified in the applicable Severance Agreement, which period may range
from one to three years after the Merger depending upon the applicable Severance
Agreement, such officer would be entitled to compensation for salary and
benefits for such period. The maximum aggregate value of the compensation under
the Severance Agreements for all 20 of the executive officers who have Severance
Agreements is approximately $5.0 million. This value was determined based on the
assumptions that all such executive officers' employment would be terminated and
that they would be entitled to the payment as of the Effective Time. It is
unlikely that all such executive officers would be terminated.
STOCK OPTION PLANS. The following table sets forth, for each executive
officer of CIVISTA as of October 24, 1994, the number of shares of CIVISTA
Common Stock subject to options held by each of the following executive officers
under the CIVISTA Option Plan and the CIVISTA 1993 Option Plan:
<TABLE>
<CAPTION>
CIVISTA PLAN 1993 PLAN
------------ ---------
<S> <C> <C>
Richard G. Gilbert................... 59,400 6,000
Paul G. Basner....................... 60,000 5,600
Jack R. Gravo........................ 43,800 4,200
Emmanuel D. Paradeses................ 43,200 4,200
James T. Harbert..................... 11,800 3,200
Jane A. Pope......................... 2,400 2,200
David A. Sarver...................... 1,000 2,400
Thomas L Tuersley.................... 18,200 2,800
Janice R. Van Voorhis................ 8,800 2,000
------------ ---------
248,600 32,600
============= =========
</TABLE>
All options were granted at the then fair market value as follows: the
CIVISTA Option Plan -- a range from $7.4375 per share to $14.25 per share; the
CIVISTA 1993 Option Plan -- $21.00 per share. Each of the options under the
CIVISTA Option Plans are currently exercisable pursuant to the terms of the
applicable Plan. The CIVISTA Stock Option Plans will be assumed by
Bancorporation as of the Effective Time. See "TERMS OF MERGER -- Conversion of
CIVISTA Capital Stock into Bancorporation Capital Stock."
INDEMNIFICATION. Except as may be limited by applicable law, Bancorporation
has agreed to assume and honor the terms of the indemnification provisions of
Article IV of CIVISTA's Code of Regulations, which are provided to CIVISTA's
directors, officers and employees as contractual rights, for matters occurring
prior to the Effective Time. Indemnification of directors, officers and
employees of CIVISTA and its subsidiaries for activities following the Effective
Time will be provided to the same extent it is provided to other persons working
in similar capacities for Bancorporation after the Effective Time.
DIRECTORS' AND OFFICERS' LIABILITY INSURANCE. For a period of at least two
years following the Effective Time, Bancorporation has agreed to maintain in
effect the current insurance policies maintained by CIVISTA (or substitute
policies with substantially the same coverage and terms) covering directors' and
officers' liability with respect to claims which arise from factors or events
which occurred before the Effective Time, except that Bancorporation's insurance
obligation for the second year following the Effective Time will be based upon
its ability to obtain such insurance at a commercially reasonable cost.
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EMPLOYEES OF CIVISTA
Bancorporation intends, to the extent possible, to maintain the current
employee base of CIVISTA and Citizens. After the Effective Time, Bancorporation
will cause each of its subsidiaries to use its diligent efforts to minimize
terminations of employees of CIVISTA and Citizens and to give priority to any
displaced employees of CIVISTA and Citizens equal to that given to employees of
Bancorporation and its subsidiaries in filling positions within Bancorporation
and its subsidiaries. It is also Bancorporation's intent, to the extent
possible, to retain the employees of each of CIVISTA's non-banking subsidiaries
during the pendency of the disposition of such subsidiary or its assets.
Employees of CIVISTA and Citizens, other than the persons with Severance
Agreements, who do not become employees of Bancorporation or its subsidiaries,
or who become employees of Bancorporation or its subsidiaries but whose
employment is terminated during the 180-day period after the Effective Time
(except if such termination is for cause), will be entitled to receive
separation monies in consideration for a standard release of Bancorporation
regarding matters related to employment and termination of employment. The
separation monies will be calculated as follows: (i) all such employees will
receive a minimum of four weeks' salary (net of required taxes), and (ii)
employees with more than two years of service will receive two weeks of salary
(net of required taxes) for each full year of service up to a maximum severance
benefit equal to 26 weeks of salary. Such employees will also be entitled to any
other benefits, if any, required by law. In lieu of the above separation
amounts, employees of CIVISTA's nonbanking subsidiaries will receive separation
benefits as provided in the disposition document for their subsidiary or its
assets.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Bancorporation will receive an opinion of Brouse & McDowell as of the
Effective Time substantially to the effect that the federal income tax
consequences of the Merger will be as follows:
(a) the Merger will qualify as a tax-free reorganization within the meaning
of Section 368(a)(1)(A) of the Code;
(b) no gain or loss will be recognized by Bancorporation as a result of the
consummation of the Merger;
(c) no gain or loss will be recognized by a stockholder of CIVISTA upon the
exchange of the shares of CIVISTA Common Stock for Bancorporation Common Stock
(including the Bancorporation Rights) pursuant to the Merger, except that gain
or loss will be recognized by a stockholder of CIVISTA Common Stock on receipt
of cash in lieu of a fractional share interest in Bancorporation Common Stock;
and
(d) a stockholder of CIVISTA who receives cash in lieu of a fractional
interest in Bancorporation Common Stock will be treated as if the fractional
share were distributed as part of the exchange and then as having received a
cash distribution in redemption of such fractional share, resulting in gain or
loss upon receipt of such cash taxed as provided in Section 302 of the Code.
The above tax opinion will be given solely to Bancorporation and cannot be
relied upon by any other party. The tax opinion will be based upon certain
customary representations and assumptions referred to in the opinion letter and
will be expressly contingent upon satisfaction of the continuity of interest
requirement of certain Treasury Regulations. This requirement will be satisfied
if the stockholders of CIVISTA receive and retain Bancorporation Common Stock
equal in value, as of the effective date of the Merger, to at least 50% of the
value of all of the formerly outstanding shares of CIVISTA Common Stock, as of
that date. The management of CIVISTA has advised Bancorporation that, to the
best of its knowledge, there is no plan or intention on the part of the CIVISTA
stockholders to sell, exchange, or otherwise dispose of Bancorporation Common
Stock received in the Merger that would result in failure to satisfy the
continuity of interest requirement. It is a condition to consummation of the
Merger that Bancorporation receive the above tax opinion as of the Effective
Time.
In addition, any cash payment to a stockholder who exercises his
dissenter's rights will be a taxable transaction. Any cash payment received by a
dissenting holder of Bancorporation or CIVISTA Common Stock who has perfected
appraisal rights in exchange for such holder's shares will be treated as having
been received as a distribution in redemption of such holder's shares the
consequences of which will be determined in accordance with Section 302 of the
Code.
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THE FEDERAL INCOME TAX DISCUSSION SET FORTH ABOVE IS BASED UPON CURRENT
LAW. SUCH DISCUSSION MAY NOT BE APPLICABLE TO A CIVISTA STOCKHOLDER WHO ACQUIRED
SHARES OF CIVISTA COMMON STOCK PURSUANT TO THE EXERCISE OF A STOCK OPTION OR
OTHERWISE AS COMPENSATION. BECAUSE EACH STOCKHOLDER'S TAX CIRCUMSTANCES MAY
DIFFER, EACH STOCKHOLDER MUST CONSULT HIS OWN TAX ADVISOR CONCERNING THE
SPECIFIC TAX CONSEQUENCES OF THE MERGER TO SUCH STOCKHOLDER, INCLUDING THE
APPLICABILITY AND EFFECT OF STATE, LOCAL, AND OTHER TAX LAWS AND ANY PROPOSED
CHANGES IN SUCH TAX LAWS.
ACCOUNTING TREATMENT OF MERGER
It is anticipated that the Merger, if completed as proposed, will qualify
as a pooling-of-interests for accounting and financial reporting purposes.
Accordingly, under generally accepted accounting principles, the assets and
liabilities of CIVISTA will be combined with those of Bancorporation and carried
forward at book values. In addition, the statements of operations of CIVISTA
will be combined with the statements of operations of Bancorporation on a
retroactive basis. The obligation of Bancorporation to consummate the Merger is
conditioned, among other matters, upon its receipt of a letter from Coopers &
Lybrand, L.L.P., independent auditors, that the Merger will qualify for
pooling-of-interests accounting treatment under generally accepted accounting
principles. See "PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)."
RESALES OF BANCORPORATION COMMON STOCK RECEIVED IN MERGER
The Bancorporation Common Stock that will be issued upon the consummation
of the Merger will have been registered under the Securities Act and will be
freely transferable, except for shares received by persons, including directors
and executive officers of CIVISTA, who may be deemed to be affiliates of
CIVISTA, as that term is defined in (i) Rule 145 promulgated under the Rules and
Regulations of the Securities Act, and/or (ii) Accounting Series Releases 130
and 135, as amended, of the Commission.
Affiliates may not sell, pledge, transfer or otherwise dispose of the
shares of Bancorporation Common Stock issued to them in exchange for their
shares of CIVISTA Common Stock, unless the requirements of Rule 145(d) are
satisfied or the sale, pledge, transfer, or disposition is otherwise in
compliance with the Securities Act and the rules and regulations promulgated
thereunder. Generally, under Rule 145(d) an affiliate of CIVISTA will be
permitted to sell, pledge, transfer, or otherwise dispose of his or her shares
of Bancorporation Common Stock received pursuant to the Merger if either of the
following is satisfied:
(a) The shares are sold in "brokers' transactions" or in transactions
directly with a "market maker," the affiliate does not solicit or arrange for
the solicitation of purchase orders or make any payments in connection with the
sale to anyone other than the broker or market maker, the number of shares sold,
together with all other sales of Bancorporation Common Stock by such affiliate
within the preceding three months, does not exceed one percent of the
outstanding shares of Bancorporation Common Stock, and there is publicly
available certain information regarding Bancorporation; or
(b) The affiliate is not or does not become an affiliate of Bancorporation
and has been the beneficial owner of the Bancorporation Common Stock for at
least two years, and there is publicly available certain information regarding
Bancorporation.
In addition, and in order for the Merger to qualify as a
pooling-of-interests for accounting and financial reporting purposes, shares of
Bancorporation Common Stock issued to affiliates in the Merger may not be sold,
pledged, transferred or otherwise disposed of until such time as financial
results covering at least 30 days of combined operations of Bancorporation and
CIVISTA have been published within the meaning of Section 201.01 of the
Commission's Codification of Financial Reporting Policies. Share certificates
for Bancorporation Common Stock issued to affiliates of CIVISTA will bear a
restrictive legend.
AS THIS IS A GENERAL STATEMENT OF THE RESTRICTIONS ON THE DISPOSITION OF
THE SHARES OF BANCORPORATION COMMON STOCK TO BE ISSUED IN THE MERGER, THOSE
STOCKHOLDERS OF CIVISTA WHO MAY BE AFFILIATES OF CIVISTA SHOULD CONFER WITH
LEGAL COUNSEL WITH RESPECT TO THESE RESALE RESTRICTIONS.
This Prospectus and Joint Proxy Statement does not cover any reoffers or
resales of Bancorporation Common Stock received by affiliates of CIVISTA.
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BANCORPORATION'S ARTICLES OF INCORPORATION AND CODE OF REGULATIONS
The Articles of Bancorporation in effect immediately prior to the Merger
will be the articles of incorporation of Bancorporation as the surviving
corporation after the Merger. The Regulations of Bancorporation in effect
immediately prior to the Merger will be the regulations of Bancorporation after
the Merger.
RIGHTS OF DISSENTING STOCKHOLDERS
Holders of Bancorporation Common Stock who so desire and holders of CIVISTA
Common Stock who so desire are entitled to relief as dissenting stockholders
under Section 1701.84 of the Ohio Revised Code. A stockholder of either
Bancorporation or CIVISTA, however, will be entitled to such relief only if he
complies strictly with all of the procedural and other requirements of Section
1701.85 of the Ohio Revised Code. The following summary does not purport to be a
complete statement of the method of compliance with Section 1701.85 and is
qualified in its entirety by reference to the copy of Section 1701.85 attached
hereto as Appendix E.
A Bancorporation stockholder or a CIVISTA stockholder who wishes to perfect
his rights as a dissenting stockholder in the event the Merger Agreement is
adopted:
(a) must have been a record holder of the Bancorporation Common Stock or
the CIVISTA Common Stock as to which he seeks relief as of the date fixed for
the determination of stockholders entitled to notice of the Bancorporation
Special Meeting or the CIVISTA Special Meeting;
(b) must not have voted his Bancorporation Common Stock or his CIVISTA
Common Stock in favor of adoption of the Merger Agreement; and
(c) must deliver to the company for which he is a stockholder, not later
than 10 days after the appropriate Special Meeting, a written demand for payment
of the fair cash value of the shares as to which he seeks relief. This written
demand must state the name of the stockholder, his address, the number of shares
as to which he seeks relief, and the amount claimed as the fair cash value
thereof.
A vote against adoption of the Merger Agreement will not satisfy the
requirements of a written demand for payment. Any written demand for payment
should be mailed or delivered, (i) in the case of a dissenting Bancorporation
stockholder, to: First Bancorporation of Ohio, 106 South Main Street, Akron,
Ohio 44308, Attention: Terry E. Patton, and (ii) in the case of a dissenting
CIVISTA stockholder, to: The CIVISTA Corporation, 100 Central Plaza South,
Canton, Ohio 44702, Attention: Janice R. Van Voorhis. As the written demand must
be delivered within the 10-day period following the appropriate company's
Special Meeting, it is recommended, although not required, that a stockholder
using the mails should use certified or registered mail, return receipt
requested, to confirm that he has made a timely delivery.
If Bancorporation or CIVISTA, respectively, sends the dissenting
stockholder at the address specified in his demand, a request for the
certificate(s) representing his shares, the stockholder must deliver the
certificate(s) within 15 days of the sending of such request. The company may
endorse the certificate(s) with a legend to the effect that the stockholder has
demanded the fair cash value of the shares represented by the certificate(s).
Failure to deliver the certificate(s) within 15 days of the request terminates
the stockholder's rights as a dissenting stockholder. Bancorporation and
CIVISTA, respectively, must notify the stockholder of its election to terminate
his rights as a dissenting stockholder within 20 days after the lapse of the 15
day period.
Unless the dissenting stockholder and Bancorporation or CIVISTA,
respectively, shall agree on the fair cash value per share of the appropriate
company's Common Stock, either may, within three months after the service of the
written demand by the stockholder, file a petition in the Court of Common Pleas
of Summit County, Ohio in the case of Bancorporation, and in the Court of Common
Pleas of Stark County, Ohio in the case of CIVISTA. If the court finds that the
stockholder is entitled to be paid the fair cash value of any shares, the court
may appoint one or more appraisers to receive evidence and to recommend a
decision on the amount of the fair cash value.
Fair cash value: (a) will be determined as of the day prior to the
appropriate company's Special Meeting, (b) will be the amount a willing seller
and willing buyer would accept or pay with neither being under
38
<PAGE> 49
compulsion to sell or buy, (c) will not exceed the amount specified in the
stockholder's written demand, and (d) will exclude any appreciation or
depreciation in market value resulting from the Merger. The court shall make a
finding as to the fair cash value of a share and render judgment against
Bancorporation or CIVISTA, respectively, for its payment with interest at such
rate and from such date as the court considers equitable. The costs of
proceedings shall be assessed or apportioned as the court considers equitable.
The rights of any dissenting stockholder will terminate if (a) he has not
complied with Section 1701.85, unless Bancorporation or CIVISTA, respectively,
by its Board of Directors waives such failure, (b) Bancorporation or CIVISTA,
respectively, abandons or is finally enjoined or prevented from carrying out, or
the stockholders of Bancorporation or CIVISTA, respectively, rescind their
adoption of, the Merger, (c) the dissenting stockholder withdraws his written
demand, with the consent of the appropriate company, by its Board of Directors,
or (d) Bancorporation or CIVISTA, respectively, and the dissenting stockholder
shall not have agreed upon the fair cash value per share of the Bancorporation
Common Stock or the CIVISTA Common Stock, respectively, and neither shall have
timely filed or joined in a petition in an appropriate court for a determination
of the fair cash value of the shares. For a discussion of the tax consequences
to a stockholder exercising dissenters' rights, see "TERMS OF MERGER -- Certain
Federal Income Tax Consequences."
Because a proxy which does not contain voting instructions will be voted
for adoption of the Merger Agreement, a stockholder who wishes to exercise his
dissenters' rights must either not sign and return his proxy or, if he signs and
returns his proxy, vote against or abstain from voting on the adoption of the
Merger Agreement.
PRO FORMA CONDENSED COMBINED FINANCIAL STATEMENTS (UNAUDITED)
The following unaudited pro forma condensed combined financial statements
are presented assuming the Merger will be accounted for using the
pooling-of-interests method. Historical financial data of Bancorporation and
CIVISTA included in the following data have been taken from the financial
statements and other financial information of Bancorporation and CIVISTA
incorporated herein by reference. The pro forma condensed combined balance sheet
includes the historical accounts of Bancorporation and CIVISTA as of June 30,
1994 and the related pro forma condensed combined statements of income for the
six months ended June 30, 1994 and 1993 include the historical accounts of
Bancorporation and CIVISTA for the periods indicated. The pro forma condensed
combined statements of income for years ended in 1993, 1992 and 1991 include the
financial data of Bancorporation for its fiscal years ended December 31 and the
financial data of CIVISTA for its fiscal years ended September 30. The unaudited
pro forma combined financial data do not reflect expenses expected to be
incurred by Bancorporation and CIVISTA in connection with the Merger. THE PRO
FORMA INFORMATION PRESENTED BELOW IS NOT NECESSARILY INDICATIVE OF THE RESULTS
WHICH ACTUALLY WOULD HAVE BEEN OBTAINED IF THE MERGER HAD BEEN CONSUMMATED IN
THE PAST OR WHICH MAY BE OBTAINED IN THE FUTURE.
39
<PAGE> 50
PRO FORMA CONDENSED COMBINED BALANCE SHEET (UNAUDITED)(1)
JUNE 30, 1994
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
PRO FORMA
ADJUSTMENTS PRO FORMA
BANCORPORATION CIVISTA DR/(CR) COMBINED
-------------- -------- ----------- ----------
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks.................. $ 195,138 14,735 209,873
U.S. government and its agencies......... 913,120 140,534 1,053,654
State and municipal obligations.......... 155,787 155,787
Mortgage-backed securities............... 234,083 96,601 330,684
Other securities......................... 98,817 10,280 109,097
Federal funds sold and securities
purchased under agreement to resell... 5,528 8,270 13,798
Loans (net of unearned income)........... 2,807,587 505,557 3,313,144
Less: Allowance for loan and lease losses (33,122) (2,757 ) (35,879 )
Premises and equipment................... 74,232 6,053 80,285
Other assets............................. 79,260 28,937 108,197
-------------- -------- ----------- ----------
Total assets..................... $4,530,430 808,210 0 5,338,640
============= ========= =========== =========
LIABILITIES
Non-interest-bearing deposits............ $ 656,890 656,890
Interest-bearing deposits................ 3,077,184 689,088 3,766,272
-------------- -------- ----------- ----------
Total deposits................... 3,734,074 689,088 4,423,162
Federal funds purchased, securities sold
under agreements to repurchase and
other borrowings...................... 342,089 18,473 360,562
Interest, taxes and other liabilities.... 26,039 11,185 37,224
-------------- -------- ----------- ----------
Total liabilities................ 4,102,202 718,746 4,820,948
CAPITAL
Shareholders' equity:
Preferred stock....................... -- -- --
Common stock.......................... 87,849 11,820 99,669
Net unrealized holding gains (losses)
on available for sale securities.... (9,492) (50 ) (9,542 )
Retained profits...................... 349,871 77,694 427,565
-------------- -------- ----------- ----------
Total equity capital............. 428,228 89,464 517,692
-------------- -------- ----------- ----------
Total liabilities and equity
capital........................ $4,530,430 808,210 0 5,338,640
============= ========= =========== =========
</TABLE>
- ---------------
(1) The Pro Forma Condensed Combined Balance Sheet (Unaudited) assumes the
issuance of 6,513,119 shares of Bancorporation Common Stock in exchange for
all of the outstanding shares and options of CIVISTA Common Stock. This
assumes an exchange ratio of 1.723 shares of Bancorporation Common Stock for
each share of CIVISTA Common Stock.
40
<PAGE> 51
PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
YEAR ENDED IN
-----------------------------------------------------------------------------------
1993 1992
--------------------------------------- ---------------------------------------
PRO PRO
FORMA FORMA
BANCORPORATION CIVISTA COMBINED BANCORPORATION CIVISTA COMBINED
-------------- ------- -------- -------------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on
loans..................... $219,692 44,305 263,997 229,776 48,421 278,197
Interest on investment
securities................ 82,205 11,219 93,424 90,426 11,205 101,631
Interest on federal funds
sold...................... 2,692 1,095 3,787 3,395 1,865 5,260
-------------- ------- -------- -------------- ------- --------
Total interest income... 304,589 56,619 361,208 323,597 61,491 385,088
INTEREST EXPENSE:
Interest on deposits........ 102,905 24,342 127,247 126,707 31,803 158,510
Interest on securities sold
under agreements to
repurchase and other
borrowings................ 6,882 1,020 7,902 7,404 1,491 8,895
-------------- ------- -------- -------------- ------- --------
Total interest
expense............... 109,787 25,362 135,149 134,111 33,294 167,405
NET INTEREST INCOME......... 194,802 31,257 226,059 189,486 28,197 217,683
Provision for loan losses... 7,239 817 8,056 17,657 1,308 18,965
Net interest income after
provision for loan
losses.................... 187,563 30,440 218,003 171,829 26,889 198,718
Other income................ 55,320 16,589 71,909 51,951 16,641 68,592
Other expense............... 160,960 27,178 188,138 146,790 28,496 175,286
-------------- ------- -------- -------------- ------- --------
Income before federal income
taxes..................... 81,923 19,851 101,774 76,990 15,034 92,024
Federal income taxes........ 26,363 6,779 33,142 23,717 5,477 29,194
-------------- ------- -------- -------------- ------- --------
Net income.............. $ 55,560 13,072 68,632 53,273 9,557 62,830
========= ======= ======== ========= ======= ========
Income Per Common Share..... $ 2.05 3.64 1.97 2.71
========= ======= ========= =======
Pro Forma Net Income Per
Common Share, Conversion
Ratio of 1.723............ $ 2.07 1.90
======== ========
<CAPTION>
1991
---------------------------------------
PRO
FORMA
BANCORPORATION CIVISTA COMBINED
-------------- ------- --------
<S> <C> <C> <C>
INTEREST INCOME:
Interest and fees on
loans..................... 243,943 50,220 294,163
Interest on investment
securities................ 95,140 10,373 105,513
Interest on federal funds
sold...................... 8,305 2,853 11,158
-------------- ------- --------
Total interest income... 347,388 63,446 410,834
INTEREST EXPENSE:
Interest on deposits........ 175,976 40,352 216,328
Interest on securities sold
under agreements to
repurchase and other
borrowings................ 10,270 1,295 11,565
-------------- ------- --------
Total interest
expense............... 186,246 41,647 227,893
NET INTEREST INCOME......... 161,142 21,799 182,941
Provision for loan losses... 11,827 923 12,750
Net interest income after
provision for loan
losses.................... 149,315 20,876 170,191
Other income................ 45,696 20,158 65,854
Other expense............... 136,130 31,365 167,495
-------------- ------- --------
Income before federal income
taxes..................... 58,881 9,669 68,550
Federal income taxes........ 16,755 3,455 20,210
-------------- ------- --------
Net income.............. 42,126 6,214 48,340
========= ======= ========
Income Per Common Share..... 1.56 1.80
========= =======
Pro Forma Net Income Per
Common Share, Conversion
Ratio of 1.723............ 1.47
========
</TABLE>
41
<PAGE> 52
PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME (UNAUDITED)
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
--------------------------------------------------------------------
1994 1993
--------------------------------- ---------------------------------
PRO PRO
FORMA FORMA
BANCORPORATION CIVISTA COMBINED BANCORPORATION CIVISTA COMBINED
-------------- ------- -------- -------------- ------- --------
<S> <C> <C> <C> <C> <C> <C>
INTEREST INCOME:
Interest and fees on loans............. $108,306 20,185 128,491 110,373 22,344 132,717
Interest on investment securities...... 38,387 6,313 44,700 42,582 5,020 47,602
Interest on federal funds sold......... 1,434 318 1,752 1,223 680 1,903
-------------- ------- -------- -------------- ------- --------
Total interest income........ 148,127 26,816 174,943 154,178 28,044 182,222
INTEREST EXPENSE:
Interest on deposits................... 46,638 11,428 58,066 53,467 11,955 65,422
Interest on securities sold under
agreements to repurchase and other
borrowings........................... 4,188 579 4,767 3,358 489 3,847
-------------- ------- -------- -------------- ------- --------
Total interest expense....... 50,826 12,007 62,833 56,825 12,444 69,269
NET INTEREST INCOME.................... 97,301 14,809 112,110 97,353 15,600 112,953
Provision for loan losses.............. 2,167 85 2,252 3,879 416 4,295
Net interest income after provision for
loan losses.......................... 95,134 14,724 109,858 93,474 15,184 108,658
Other income........................... 28,062 7,373 35,435 27,307 8,814 36,121
Other expense.......................... 80,566 13,761 94,327 79,207 13,172 92,379
-------------- ------- -------- -------------- ------- --------
Income before federal income taxes..... 42,630 8,336 50,966 41,574 10,826 52,400
Federal income taxes................... 12,758 2,911 15,669 12,634 3,616 16,250
-------------- ------- -------- -------------- ------- --------
Net income................... 29,872 5,425 35,297 28,940 7,210 36,150
========== ======= ======== ========== ======= ========
Income Per Common Share................ $ 1.10 1.47 1.07 2.00
========== ======= ========== =======
Pro Forma Net Income Per Common Share,
Conversion Ratio of 1.723............ $ 1.06 1.09
======== ========
</TABLE>
42
<PAGE> 53
BUSINESS OF BANCORPORATION
OVERVIEW
Bancorporation is a bank holding company organized in 1981 under the laws
of the State of Ohio and registered under the BHCA. At September 30, 1994,
Bancorporation had total consolidated assets of approximately $4.8 billion and
total shareholders' equity of $432.7 million. Although principally a regional
banking organization, Bancorporation's subsidiaries provide a wide range of
banking, fiduciary and financial services to corporate, institutional and
individual customers throughout northern Ohio and southwestern Florida. At
September 30, 1994, Bancorporation's subsidiaries operated 143 full service
banking offices, had 159 automated teller machines located in 14 counties in the
States of Ohio and Florida and employed approximately 2,967 full-and part-time
employees.
Bancorporation's principal business consists of owning and supervising its
subsidiaries which primarily operate in Ashtabula, Cuyahoga, Erie, Geauga, Knox,
Lake, Lorain, Medina, Portage, Richland, Stark, Summit and Wayne Counties, Ohio.
Bancorporation directs the overall policies and financial resources of the
subsidiaries, but the day-to-day affairs, including lending practices, services,
and interest rates, are managed by their own officers and directors, some of
whom are also officers and directors of Bancorporation. Through Bancorp Trust
Company, N.A., with its principal office in Naples, Florida, and Life Savings
Bank, FSB, with its principal office in Clearwater, Florida, Bancorporation also
serves customers throughout southwestern Florida. FBOH Credit Life Insurance
Company was formed in 1985 to engage in underwriting of credit life and credit
accident and health insurance directly related to the extension of credit by the
Banks to their customers. FBOH Community Development Corporation was organized
in 1994 to further Bancorporation's ability to meet the credit needs of its
lending communities.
SUBSIDIARIES
Bancorporation's wholly-owned subsidiaries include First National Bank of
Ohio, The Old Phoenix National Bank of Medina, Elyria Savings & Trust National
Bank, The First National Bank in Massillon, Peoples National Bank, Peoples Bank,
N.A. (collectively, the "Banks"), Life Savings Bank, FSB, Bancorp Trust Company,
N.A., FBOH Credit Life Insurance Company and FBOH Community Development
Corporation (all, collectively, the "Subsidiaries").
In addition to the customary services of accepting funds for deposit and
making loans, the Banks provide a wide range of specialized services tailored to
specific markets, including personal and corporate trust services, personal
financial services, cash management services and international banking services.
Bancorporation's savings association subsidiary provides demand, savings and
time deposit accounts, consumer and commercial loans, while its nonbanking
direct and indirect subsidiaries provide insurance sales services, reinsurance
of credit life and accident and health insurance on loans made by the Banks,
securities brokerage services, equipment lease financing, and other financial
services.
43
<PAGE> 54
Presented in the following schedule is further specific information
concerning each of the material operating Subsidiaries:
<TABLE>
<CAPTION>
COUNTIES TYPE NUMBER
OF DATE OF DATE OF OF OF
SUBSIDIARY OPERATION* ORGANIZATION BUSINESS AFFILIATION CHARTER OFFICES
- ------------------- ----------- ------------ --------------- --------- -------- -----
<S> <C> <C> <C> <C> <C> <C>
First National Stark, 1947 Commercial 12/31/81 Federal 67
Bank of Ohio Summit, bank with
Cuyahoga trust services
and
Portage
The Old Phoenix Medina 1873 Commercial 12/31/81 Federal 15
National Bank and bank with
of Medina Cuyahoga trust services
Elyria Savings Lorain, 1901 Commercial 12/12/83 Federal 23
& Trust National Cuyahoga bank with
Bank and trust services
Erie
Peoples National Knox, 1892 Commercial 10/26/88 Federal 12
Bank Medina, bank with
Richland, trust services
Summit
and Wayne
The First Stark 1933 Commercial 3/21/89 Federal 8
National Bank bank with
in Massillon trust services
Bancorp Trust Collier 1990 National 2/17/90 Federal 2
Company, N.A. and Lee, Trust
Florida Company
Peoples Bank, N.A. Ashtabula, 1890 Commercial 9/30/90 Federal 15
Geauga bank with
and Lake trust services
Life Savings Bank, Pinellas, 1994 Savings 3/11/94 Federal 3
FSB Florida association
</TABLE>
- ---------------
*Ohio unless otherwise noted.
Each Bank is engaged in commercial banking in its respective geographical
market. Commercial banking includes the acceptance of demand, savings and time
deposits and the granting of commercial and consumer loans for the financing of
both real and personal property. Other services include automated banking
programs, credit cards, the rental of safe deposit boxes, letters of credit,
leasing, discount brokerage and credit life insurance. The Banks also operate
trust departments which offer estate and trust services. Each Bank offers its
services primarily to consumers and small and medium size businesses in its
respective geographical market. None of the Banks are engaged in lending outside
the continental United States. None of the Banks are dependent upon any one
significant customer or a specific industry.
Life Savings Bank, FSB, operates as a savings association in its
geographical market. As a savings association, its business includes the
acceptance of demand, savings and time deposit accounts and the granting of
consumer loans primarily secured by real property. Life Savings Bank, FSB,
offers its services principally to consumers and small businesses located in its
geographical market. It is not engaged in lending outside the continental United
States and is not dependent upon any one significant customer or a specific
industry.
44
<PAGE> 55
Bancorp Trust Company, N.A. is engaged in providing personal trust services
in its geographical markets. These services include acting as trustee in
personal trusts, custodial and investment agency services, guardianships and
service as personal representative in decedent estates.
RECENT ACQUISITIONS
Bancorporation engages on a regular basis in discussions concerning
possible acquisitions of other financial institutions. In 1994, Bancorporation
acquired control of Life Savings Bank, FSB, a federal savings association with
its principal offices located in Clearwater, Florida, and Great Northern Savings
Co., an Ohio savings association with its principal offices formerly located in
Barberton, Ohio. Life Savings Bank, FSB was chartered by Bancorporation in 1994
to acquire the assets and deposit liabilities of Life Federal Savings Bank, a
federal savings association under the conservatorship of the Resolution Trust
Corporation. Great Northern Savings Co. was acquired on April 22, 1994 through
the merger of its parent corporation, Great Northern Financial Corporation, with
and into Bancorporation. Bancorporation then effected a merger of Great Northern
Savings Co. with and into First National.
BUSINESS OF CIVISTA
CIVISTA, headquartered in Canton, Ohio, is a unitary savings and loan
holding company whose principal asset is the common stock of its wholly-owned
subsidiary, Citizens Savings Bank of Canton. In addition, CIVISTA owns all of
the common stock of Citizens Savings Corporation of Stark County ("CSC"), The
CASNET Group, Inc. ("CASNET"), Citizens Investment Corporation ("CIC") and Crest
Investments, Inc., as well as owning directly two apartment complexes, and
certain short-term investments.
CIVISTA was organized in March, 1987 and remained inactive until August 17,
1988. On that date, Citizens stockholders became CIVISTA stockholders in a
tax-free and regulatory reorganization. This transaction was accounted for as a
pooling-of-interests. As a savings and loan holding company, CIVISTA is
principally engaged in management of Citizens. Citizens is an Ohio-chartered
savings and loan association headquartered in Canton, Ohio. It has operated
continuously under the capital stock form of ownership since its organization in
1899. Citizens conducts its activities from a lending office and a network of 11
full service offices located in Stark County, Ohio. Citizens is a member of the
Federal Home Loan Bank ("FHLB") of Cincinnati and its deposits are insured by
the Federal Deposit Insurance Corporation ("FDIC") through the Savings
Association Insurance Fund ("SAIF") up to the maximum amount permitted by law.
Citizens operates in Canton and adjacent communities. Its principal
business is utilizing savings deposits from the general public to originate
residential mortgage loans. Citizens is engaged, to a limited extent, in making
first mortgage loans on income-producing real estate, second mortgage loans on
one-to-two-family residences, secured home improvement loans, savings deposit
secured loans, education loans, consumer loans and credit card loans. Citizens'
authorized lending area is the entire United States. However, Citizens'
principal lending activity is in the areas in which its offices are located,
which encompasses almost all of Stark County, Ohio. Funds for lending activities
are obtained largely from savings deposits, loan repayments, advances from the
FHLB of Cincinnati and other borrowings.
Mortgage loans on single-family dwellings are typically for terms of ten to
30 years. These loans are often repaid prior to their contractual maturity date
by a sale by the borrower, by refinancing the property or by the borrower's
acceleration of periodic payments. Over the last several years, most of
Citizens' customers selected fixed rate loans. Few borrowers were willing to
finance using an adjustable rate loan and Citizens has been unwilling to offer
"teaser" rates to obtain adjustable rate loans. Generally the loan-to-value
ratio does not exceed 95% of the appraised value of improved real estate.
To the extent that local loan demand has not met loan production goals,
loans and loan participations have been purchased from other financial
institutions and brokers throughout the United States. As of June 30, 1994,
Citizens owned approximately $32.6 million of purchased loans and loan
participations. The properties securing these loans are located throughout the
United States. As a result of the availability of mortgage-backed securities,
purchases of loans and loan participations have been minimal in the last five
45
<PAGE> 56
years. CIVISTA and Citizens invest in various types of liquid assets, including
short-term United States Government and agency obligations, mortgage-backed
securities, certain certificates of deposits at insured banks and savings
institutions, certain bankers' acceptances and federal funds.
Citizens offers programs designed to attract short-term and long-term
savings deposits at rates and terms consistent with profitable investment
activities. Rather than pay unprofitable deposit rates, Citizens has been
willing, if necessary, to permit deposit balances to shrink. The deposit
programs include passbook savings accounts, statement savings accounts, club
accounts, certificate of deposit accounts, money market fund-competitive
accounts, retirement accounts and interest-paying, negotiable order of
withdrawal ("NOW") checking accounts. Citizens has never utilized brokered
deposits.
CSC owns and manages approximately 350 residential rental units in
apartment and duplex complexes which are primarily in the suburban Canton area.
CSC owns a large portion of the Lakeview Office Condominium located in the
Belden Village area of Stark County, Ohio. Through its division, CIVISTA Real
Estate Company, CSC is engaged in property management for third parties.
CIC was incorporated in 1981 for residential real estate development in La
Quinta, California. During 1990, CIC acquired title to 40 acres of land in La
Quinta, California which are contiguous to the land developed by a
CIVISTA-managed joint venture. Approximately 28 acres have been developed into
54 residential lots. As of June 30, 1994, 17 lots have been sold and closed. No
plans have been finalized for the remaining acreage. In addition, CIC is
managing partner of a joint venture in La Quinta, California. In 1991, the joint
venture completed the sellout of its real estate inventory; however, the joint
venture will not be terminated until a remaining warranty issue is resolved.
CIVISTA also owns CASNET, Crest Investments, Inc. and the Woodlawn Village
and London Square apartments. CASNET provides data processing services for
Citizens and six other savings and loan associations in three states through a
service center in Canton, Ohio. During 1993, CASNET closed its Charlotte, North
Carolina data center and transferred the processing back to Canton. In addition,
CASNET develops and markets computer software for financial institutions,
provides microfiche services, interactive voice response technology and personal
computer consulting. During 1992, CASNET entered the credit union on-line
servicing market by purchasing nine credit union contracts from Cascade
Financial Services. Crest Investments, Inc. owns Crest Insurance Agency, Inc.,
which sells securities and tax-deferred annuities under an agreement with a
registered broker/dealer. Woodlawn Village and London Square are residential
apartment complexes in suburban Canton. The complexes contain 422 units.
REGULATORY MATTERS
GENERAL
Bank holding companies, savings and loan holding companies, banks, and
savings associations are regulated extensively under federal and state law. To
the extent the following information describes statutory or regulatory
provisions, it is qualified in its entirety by reference to the particular
statutory or regulatory provisions.
The operations of financial institutions are significantly affected by
general economic conditions, the monetary and fiscal policies of the federal
government and the policies of federal and state regulatory authorities.
Citizens is a savings association organized under the laws of the State of Ohio
and, as a member of the SAIF, its deposits are insured by the FDIC. As such,
Citizens is subject to regulation, examination and oversight by the Division,
OTS and the FDIC. Citizens must file periodic reports with these governmental
agencies concerning its activities and financial condition. Joint examinations
are conducted periodically by the Division and OTS to determine whether Citizens
is in compliance with various regulatory requirements. Citizens is also subject
to certain reserve requirements under regulations of the Federal Reserve. After
the Merger, Citizens will be merged with and into First National-Massillon and
will cease to exist as a separate chartered institution and therefore will not
be subject to separate regulation.
Bancorporation's financial institution subsidiaries are First National Bank
of Ohio, The Old Phoenix National Bank of Medina, Elyria Savings & Trust
National Bank, The First National Bank in Massillon,
46
<PAGE> 57
Peoples National Bank ("Peoples National"), Peoples Bank, N.A. ("Peoples N.A.")
(collectively, the "Banks"), Life Savings Bank, FSB ("Life Savings") and Bancorp
Trust Company, N.A. ("Bancorp Trust").
The Banks, as national banks and members of the Federal Reserve System, are
subject to the supervision of and regular examination by OCC and the Federal
Reserve. As insured banks under the Federal Deposit Insurance Act, all of the
Banks except Peoples National and Peoples N.A. are members of the Bank Insurance
Fund ("BIF"). All of the Banks are regulated by the FDIC. The affairs and
records of the Banks are examined regularly by OCC and the Banks must furnish
quarterly and annual reports to OCC.
Peoples National and Peoples N.A. were converted in 1994 into national
banks from a federal savings association and a state savings association,
respectively. As converted savings associations, they remained members of SAIF
and their deposits are insured thereunder.
Life Savings is a federal savings association and its deposits are insured
under SAIF. Life Savings is subject to regulation and supervision by OTS and the
FDIC and is obligated to make periodic reports to OTS.
Bancorp Trust is a national trust company subject to the supervision of and
regular examination by OCC. Its activities, which consist primarily of making
trust services available in the State of Florida, are also subject to regulation
by the laws of the State of Florida. Bancorp Trust is a member of the Federal
Reserve System and owns stock in the Federal Reserve Bank of Atlanta.
The periodic examinations by the regulatory agencies are intended to test
institutions' compliance with various regulatory requirements and to determine
if operations are conducted in a safe and sound manner. The regulatory structure
also gives the regulatory authorities extensive discretion in connection with
their supervisory and enforcement activities and examination policies, including
policies with respect to the classification of nonperforming and other assets
and the establishment of adequate loan loss reserves for regulatory purposes.
Any change in such regulation, whether by OTS, OCC, the FDIC, the Division, the
Federal Reserve or Congress, could materially and adversely impact the
operations of Bancorporation, CIVISTA or any of their respective subsidiary
financial institutions.
REGULATION OF BANK HOLDING COMPANIES
Bancorporation is registered as a bank holding company under the BHCA. Bank
holding companies are subject to regulation by the Federal Reserve. Under
Federal Reserve policy, a bank holding company is expected to act as a source of
financial strength to each subsidiary bank and to commit resources to support
such subsidiary banks.
The BHCA requires the prior approval of the Federal Reserve in any case
where a bank holding company proposes to acquire direct or indirect ownership or
control of more than 5% of the voting shares of any bank that is not already
majority-owned by it, or to merge or consolidate with any other bank holding
company. The BHCA prohibits the Federal Reserve from approving an application
from a bank holding company to acquire shares of a bank located outside the
state in which the operations of the holding company's banking subsidiaries are
principally conducted, unless such an acquisition is specifically authorized by
statute of the state in which the bank whose shares are to be acquired is
located. At present, many states, including Ohio, have adopted legislation
permitting such acquisitions by bank holding companies and such legislation is
pending in the legislatures of other states.
The BHCA also prohibits a bank holding company, with certain exceptions,
from acquiring more than 5% of the voting shares of any company that is not a
bank and from engaging in any business other than banking or managing or
controlling banks. Under the BHCA, the Federal Reserve is authorized to approve
the ownership of shares by a bank holding company in any company the activities
of which the Federal Reserve has determined to be so closely related to banking
or to managing or controlling banks as to be a proper incident thereto. The
Federal Reserve has by regulation determined that certain activities are closely
related to banking within the meaning of the BHCA. These activities include:
operating a savings association, mortgage company, finance company, credit card
company or factoring company; performing certain data processing operations;
providing investment and financial advice; and acting as an insurance agent for
certain types of credit-related insurance.
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Subsidiary banks of a bank holding company are subject to certain
restrictions imposed by the Federal Reserve Act on extensions of credit to the
bank holding company or any of its subsidiaries, on investments in the stock or
other securities of the bank holding company or its subsidiaries and on the
taking of such stock or securities as collateral for loans to any borrower.
Further, a bank holding company and its subsidiaries are prohibited from
engaging in certain tie-in arrangements in connection with any extension of
credit, lease or sale of property or furnishing of any services.
Bancorporation is also under the jurisdiction of the Commission and certain
state securities commissions for matters relating to the offering and sale of
its securities. Bancorporation is subject to the disclosure and regulatory
requirements of the Securities Act and the Exchange Act, as administered by the
Commission.
REGULATION OF SAVINGS AND LOAN HOLDING COMPANIES
Bancorporation and CIVISTA are registered as savings and loan holding
companies under HOLA, due to their control of savings associations. The
regulation of savings and loan holding companies is the province of OTS.
With certain exceptions, a savings and loan holding company must obtain
prior written approval of OTS before acquiring control of an insured institution
or savings and loan holding company through the acquisition of stock or through
a merger or some other business combination. HOLA prohibits OTS from approving
an acquisition by a savings and loan holding company which would result in the
holding company controlling savings associations in more than one state, subject
to certain exceptions, including where the statutes of the state in which the
savings association to be acquired is located specifically permit a savings
association chartered by such state to be acquired by an out-of-state savings
association or savings and loan holding company. Ohio presently has legislation
permitting such an interstate acquisition by a savings and loan association or
savings and loan holding company. HOLA also prohibits savings and loan holding
companies and their subsidiaries which are not savings associations from
engaging in unrelated business activities other than those specifically exempted
by statute or regulation.
REGULATION OF NATIONAL BANKS
As national banks and members of the Federal Reserve System, the Banks are
subject to the supervision of and regular examination by OCC and the Federal
Reserve. As insured banks under the Federal Deposit Insurance Act, all of the
Banks are regulated by the FDIC and, with the exception of Peoples National and
Peoples N.A., are members of BIF. Areas of operation subject to regulation by
federal laws, regulations and regulatory agencies include reserves on deposits,
interest rates and other terms of deposits, investments, loans, fiduciary
activities, mergers and acquisitions, issuance of securities, payment of
dividends, establishment of branches, transactions with officers and principal
stockholders, and other aspects of bank operations. Representatives of OCC
regularly conduct examinations of the affairs and records of national banks, and
all national banks must furnish quarterly and annual reports to OCC.
STATE REGULATION OF SAVINGS ASSOCIATIONS
Regulation by the Division affects the internal organization of Citizens as
well as its savings, mortgage lending and other investment activities. Ohio law
prescribes the permissible investments and activities of Ohio savings
associations, including the types of lending that such associations may engage
in and the investments in real estate, subsidiaries and corporate or government
securities that such associations may make. The ability of Ohio savings
associations to engage in these state-authorized investments is subject to
oversight and approval by the FDIC, if such investments or activities are not
permissible for a federally chartered savings association.
The Division must approve any mergers involving or acquisitions of control
of Ohio savings associations. The Division may initiate certain supervisory
measures or formal enforcement actions against Ohio savings associations.
Ultimately, if the grounds provided by law exist, the Division may place an Ohio
savings association in conservatorship or receivership.
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In addition to being governed by the laws of Ohio specifically governing
savings associations, Citizens is governed by Ohio General Corporation Law, to
the extent such law does not conflict with the laws specifically governing
savings associations.
FEDERAL REGULATION OF SAVINGS ASSOCIATIONS
OTS. OTS is an office in the Department of Treasury and is subject to the
general oversight of the Secretary of the Treasury. The Director of OTS is
responsible for the regulation and supervision of all savings associations, the
deposits of which are insured by the FDIC. Among other functions, OTS issues and
enforces regulations affecting federally-insured savings associations and
regularly examines such institutions. OTS imposes assessments on associations
based on asset size to defray the costs of general supervision and examination.
QUALIFIED THRIFT LENDER TEST. Savings associations are required to maintain
a specified level of investments in assets that are designated as qualifying
thrift investments ("QTL Test"). Such investments are generally related to
residential real estate and manufactured housing. To meet the QTL Test, the
qualified thrift investments of an association must equal or exceed 65% of the
association's portfolio assets.
If a savings association fails to meet the QTL Test, the association may be
subject to certain regulatory restrictions. A savings association which fails to
meet the QTL Test will not be eligible for FHLB advances to the fullest possible
extent and its holding company will become subject to bank holding company
limits. At June 30, 1994, Citizens and Life Savings had qualified thrift
investments adequate to satisfy the QTL test.
FEDERAL HOME LOAN BANKS
The FHLBs, now under the jurisdiction of the Federal Housing Finance Board,
serve as credit sources for their members. As a member of the FHLB of
Cincinnati, Citizens is required to maintain an investment in the capital stock
of the FHLB of Cincinnati in an amount equal to the greater of 1.0% of the
aggregate outstanding principal amount of their respective residential mortgage
loans, home purchase contracts and similar obligations at the beginning of each
year, or 5.0% of advances from the FHLB of Cincinnati. Citizens was in
compliance with this requirement at June 30, 1994. At June 30, 1994, Citizens
had $9.4 million in advances outstanding from the FHLB of Cincinnati.
FEDERAL DEPOSIT INSURANCE CORPORATION
The FDIC is an independent federal agency which insures the deposits, up to
prescribed statutory limits, of federally-insured banks and savings associations
and safeguards the safety and soundness of the financial institution industry.
Two separate insurance funds are maintained and administered by the FDIC. In
general, banking institutions are members of BIF and savings associations are
SAIF members. The insurance fund conversion provisions do not prohibit a SAIF
member from either converting to a bank charter, as long as the resulting bank
remains a SAIF member, or merging with a bank, as long as the bank continues to
pay the SAIF insurance assessments on the deposits acquired. Exit and entrance
fees must be paid to the FDIC in full conversions.
For each semi-annual assessment period beginning January 1, 1994, a
permanent risk-based insurance system was implemented by the FDIC for all SAIF
and BIF members. Under the new premium system, the FDIC assigns an institution
to one of three capital categories: (1) well capitalized, (2) adequately
capitalized or (3) undercapitalized. An institution is also assigned by the FDIC
to one of three supervisory subgroups within each capital group. The supervisory
subgroup to which an institution is assigned is based on a supervisory
evaluation provided to the FDIC by the institution's primary federal regulator
and information which the FDIC determines to be relevant to the institution's
financial condition and the risk posed to the deposit insurance funds (which may
include, if applicable, information provided by the institution's state
supervisor). An institution's assessment rate depends on the capital category
and supervisory category to which it is assigned. Under the transitional system,
there are nine assessment risk classifications (i.e., combinations of capital
groups and supervisory subgroups) to which differing assessment rates are
applied. Assessment rates range from 0.23% of deposits for an institution in the
highest category (i.e., well capitalized
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and "financially sound") to 0.31% of deposits for an institution in the lowest
category (i.e., undercapitalized and "substantial probability of loss"). The
assessment rates for Citizens and the financial institution subsidiaries of
Bancorporation generally remained at the same level as imposed under the former
transition rule.
The FDIC is also authorized to raise insurance premiums for SAIF members in
certain circumstances. If the FDIC determines to increase the assessment rate
for all SAIF institutions, institutions in all risk categories could be
affected. Any increase in premiums could adversely affect earnings of Citizens
and Life Savings.
Insurance of deposits may be terminated by the FDIC upon a finding that the
institution has engaged in unsafe or unsound practices, is in an unsafe or
unsound condition to continue operations, or has violated any applicable law,
regulation, rule, order or condition imposed by the FDIC or OTS.
CAPITAL
The Federal Reserve has adopted risk-based capital guidelines for bank
holding companies. The guidelines became fully phased in at the end of 1992.
Capital levels as measured by these standards also are used to categorize
financial institutions for purposes of the new prompt corrective action
provisions. See "REGULATORY MATTERS -- Prompt Corrective Regulatory Action." The
minimum guideline for the ratio of total capital ("Total Capital") to
risk-weighted assets (including certain off-balance sheet items such as standby
letters of credit) is 8% ("Total Risk-Based Capital"). The Total Risk-Based
Capital ratio must be at least 10% to be considered well capitalized.
At least half of the minimum Total Risk-Based Capital ratio (4%) must be
composed of common stockholders' equity, minority interests in the equity
accounts of consolidated subsidiaries and a limited amount of perpetual
preferred stock, less goodwill and certain other intangibles ("Tier 1 Risk-Based
Capital"). To be considered well capitalized, the Tier 1 Risk-Based Capital
ratio must be at least 6%. See "REGULATORY MATTERS -- Prompt Corrective
Regulatory Action." The remainder of Total Risk-Based Capital may consist of
subordinated debt, other preferred stock and a limited amount of loan and lease
loss allowance.
The Federal Reserve also has established minimum leverage ratio guidelines
for bank holding companies. The guidelines provide for a minimum ratio of Tier 1
Risk-Based Capital to average assets (excluding the loan and lease loss
allowance, goodwill and certain other intangibles) ("Leverage Ratio") of 3% for
bank holding companies that meet certain criteria, including having the highest
regulatory rating. To be considered well capitalized, the Leverage Ratio must be
at least 5%. The guidelines further provide that bank holding companies making
acquisitions will be expected to maintain strong capital positions substantially
above the minimum levels. OTS has not imposed capital requirements on savings
and loan holding companies.
The following tables set forth the Total Risk-Based Capital, Tier 1
Risk-Based Capital, and Leverage Ratios for Bancorporation and Citizens,
individually and on a pro forma combined basis, as of June 30, 1994:
<TABLE>
<CAPTION>
TOTAL TIER 1 LEVERAGE
RISK-BASED RISK-BASED RATIO
---------- ---------- --------
<S> <C> <C> <C>
Bancorporation....................... 15.96% 14.79% 9.45%
Citizens............................. 18.45% 17.64% 7.77%
Pro Forma Combined................... 16.23% 15.10% 9.20%
</TABLE>
Each of the subsidiary financial institutions of Bancorporation and CIVISTA
is subject to similar capital requirements adopted by OCC or OTS, as the case
may be. OTS also imposes a tangible capital requirement, which requires savings
associations to maintain "tangible capital" of not less than 1.5% of the
association's adjusted total assets. "Tangible capital" is defined as core
capital minus any "intangible assets," such as goodwill. At June 30, 1994, each
financial institution subsidiary of Bancorporation and CIVISTA satisfied the
minimum capital ratio requirements under the capital ratio guidelines. Failure
by any financial institution subsidiary of Bancorporation or CIVISTA to comply
in the future with applicable capital standards may be subject to sanctions and
limitations upon operations.
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LIMITS ON DIVIDENDS AND OTHER PAYMENTS
Bancorporation and CIVISTA are legal entities separate and distinct from
their respective subsidiary financial institutions. There are various legal
limitations on the extent to which such subsidiary banks and savings
associations may finance or otherwise supply funds to their parent holding
companies. Under federal law, subsidiary banks may not, subject to certain
limited exceptions, make loans or extensions of credit to, or investments in the
securities of, their bank holding companies. Subsidiary banks are also subject
to collateral security requirements for any loans or extension of credit
permitted by such exceptions.
Each national bank subsidiary of Bancorporation is required by federal law
to obtain the prior approval of OCC for the declaration and payment of dividends
if the total of all dividends declared by the board of directors of the bank in
any year will exceed the total of (i) the bank's net profits for that year, plus
(ii) the retained net profits for the preceding two years, less any required
transfers to surplus. In addition, these banks may only pay dividends to the
extent that retained net profits (including any portion transferred to surplus)
exceed bad debts. Similar limitations are imposed upon capital distributions,
including cash dividends, by Citizens and Life Savings as savings associations.
On May 15, 1989, CIVISTA entered into a dividend agreement with the Federal
Savings and Loan Insurance Corporation which governs the receipt by CIVISTA of
dividends from Citizens. Under the dividend agreement, as long as Citizens
exceeds its fully phased-in capital requirement, CIVISTA can receive dividends
of up to 100% of Citizens' net income for the prior eight quarters, less
cumulative dividends paid for such prior eight quarters. The dividend agreement
terminates the earlier of ten years from the date CIVISTA acquired control of
Citizens or upon the transfer of all of CIVISTA's shares in a transaction
approved by all applicable regulatory agencies.
As of June 30, 1994, the financial institution subsidiaries of
Bancorporation, without obtaining governmental approvals, could declare
aggregate dividends of approximately $37.7 million. As of June 30, 1994,
Citizens, without obtaining governmental approval, could declare dividends of
approximately $12.5 million.
PROMPT CORRECTIVE REGULATORY ACTION
On December 19, 1992, a major banking bill entitled the Federal Deposit
Insurance Corporation Improvement Act of 1991 ("FDICIA") was enacted. FDICIA
substantially revised the bank regulatory and funding provisions of the Federal
Deposit Insurance Act and revised several other federal banking statutes.
Among other things, FDICIA established a system of prompt corrective action
to resolve the problems of undercapitalized institutions. The federal banking
agencies have established five capital levels for insured depository
institutions -- "well capitalized," "adequately capitalized,"
"undercapitalized," "significantly undercapitalized," and "critically
undercapitalized." FDICIA requires or permits such agencies to take certain
supervisory actions depending upon an insured institution's capital level.
FDICIA requires the banking agencies to appoint a receiver or conservator for an
institution within 90 days after it becomes "critically undercapitalized" unless
the institution's primary regulator determines, with the concurrence of the
FDIC, that other action would better achieve FDICIA's purposes.
Under the final rules implementing the prompt corrective action provisions,
a financial institution that has a Total Risk-Based Capital of 10% or greater, a
Tier 1 Risk-Based Capital ratio of 6% or greater and a Leverage Ratio of 5% or
greater is deemed to be "well capitalized." An institution with a Total
Risk-Based Capital ratio of 8% or greater, a Tier 1 Risk-Based Capital ratio of
4% or greater and a Leverage Ratio of 4% or greater (or a Leverage Ratio of 3%
or greater and a CAMEL 1 rating), is considered to be "adequately capitalized."
An institution that has a Total Risk-Based Capital of less than 8%, a Tier 1
Risk-Based Capital ratio of less than 4%, and a Leverage Ratio that is less than
4% (or a Leverage Ratio of less than 3% and a CAMEL 1 rating), is considered
"undercapitalized." An institution that has a Total Risk-Based Capital less than
6%, a Tier 1 Risk-Based Capital ratio of less than 3% or a Leverage Ratio that
is less than 3% is considered to be "significantly undercapitalized." An
institution that has tangible equity (core capital minus intangible assets other
than qualifying supervisory goodwill and purchased mortgage servicing rights) to
total assets ratio equal to or less than 2% is deemed to be "critically
undercapitalized." At June 30, 1994, the financial institution subsidiaries of
Bancorporation and CIVISTA were considered "well capitalized" under the prompt
corrective action rules.
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An institution that is not "well capitalized" generally is prohibited from
accepting brokered deposits and offering interest rates on deposits higher than
the prevailing rate in its market. Also, "pass through" insurance coverage may
not be available for certain employee benefit accounts. FDICIA requires the
holding company of any undercapitalized depository institution to guarantee, in
part, certain aspects of such depository institution's capital plan for such
plan to be acceptable.
An undercapitalized institution is required to submit an acceptable capital
restoration plan to its appropriate federal banking agency. The plan must
specify (i) the steps the institution will take to become adequately
capitalized, (ii) the capital levels to be attained each year, (iii) how the
institution will comply with any regulatory sanctions then in effect against the
institution and (iv) the types and levels of activities in which the institution
will engage. The banking agency may not accept a capital restoration plan unless
the agency determines, among other things, that the plan "is based on realistic
assumptions, and is likely to succeed in restoring the institution's capital"
and "would not appreciably increase the risk . . . to which the institution is
exposed."
FDICIA also authorizes the appropriate federal banking agency, after notice
and an opportunity for a hearing, to treat a well capitalized, adequately
capitalized or undercapitalized insured depository institution as if it had a
lower capital-based classification, if the institution is in an unsafe or
unsound condition or engaging in an unsafe or unsound practice. Thus, an
adequately capitalized institution can be subjected to the restrictions of
undercapitalized institutions (provided that a capital restoration plan cannot
be required of the institution) and an undercapitalized institution can be
subjected to the restrictions applicable to significantly undercapitalized
institutions.
FDICIA contains numerous other provisions and operational restrictions,
including accounting, audit and reporting requirements, termination of the "too
big to fail" doctrine beginning in 1995 (except in special cases), limitations
on the FDIC's payment of deposits at foreign branches, new regulatory standards
in such areas as asset quality, earnings, capital distributions and
compensation, and revised regulatory standards for, among other things, power of
state banks, real estate lending and capital adequacy. FDICIA also requires that
a depository institution provide 90 days' prior notice of the closing of any
branch.
The FDIC is required, by regulation or order, to "restrict the activities"
of critically undercapitalized institutions. The restrictions must include
prohibitions on the institution's doing any of the following without prior FDIC
approval: entering into any material transactions not in the usual course of
business, extending credit for any highly leveraged transaction, engaging in any
covered transaction (as defined in Section 23A of the Federal Reserve Act) with
an affiliate, paying excessive compensation or bonuses, and paying interest on
new or renewed liabilities that would increase the institution's average cost of
funds to a level significantly exceeding prevailing rates in the market.
TRANSACTIONS WITH AFFILIATES
Sections 23A and 23B of the Federal Reserve Act (the "FRA") restrict
transactions by insured depository institutions and their subsidiaries with
their affiliates. An affiliate of an institution is any company or entity which
controls, is controlled by or is under common control with the institution.
Generally, Sections 23A and 23B (i) limit the extent to which an institution or
its subsidiaries may engage in "covered transactions" with any one affiliate to
an amount equal to 10% of such institution's capital stock and surplus (i.e.,
tangible capital) and (ii) require that all such transactions be on terms
substantially the same, or at least as favorable to the institution or
subsidiary, as those provided to a non-affiliate. The term "covered transaction"
includes the making of loans, purchase of assets, issuance of a guarantee and
other similar types of transactions. Certain additional restrictions apply to
savings associations.
A financial institution's authority to extend credit to executive officers,
directors and greater than 10% stockholders, as well as entities such persons
control, is subject to Sections 22(g) and 22(h) of the FRA and Regulation O
promulgated thereunder by the Federal Reserve. Among other things, such loans
must be made on terms substantially similar to those offered to unaffiliated
individuals, the amount of loans an institution may make to such persons is
based, in part, on the institution's capital position, and certain approval
procedures must be followed in making such loans.
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STANDARDS FOR SAFETY AND SOUNDNESS
FDICIA requires the federal bank regulatory agencies to prescribe, by
regulation, standards for all insured depository institutions and depository
institution holding companies relating to: (i) internal controls, information
systems and audit systems; (ii) loan documentation; (iii) credit underwriting;
(iv) interest rate risk exposure; (v) asset growth; and (vi) compensation, fees
and benefits. The compensation standards would prohibit employment contracts,
compensation or benefit arrangements, stock option plans, fee arrangements or
other compensatory arrangements that would provide excessive compensation, fees
or benefits or could lead to material financial loss. In addition, the federal
banking regulatory agencies would be required to prescribe by regulation
standards specifying: (i) maximum classified assets to capital ratios; (ii)
minimum earnings sufficient to absorb losses without impairing capital; and
(iii) to the extent feasible, a minimum ratio of market value to book value for
publicly traded shares of depository institutions and depository institution
holding companies. Regulations implementing these standards were to have been
effective by December 1, 1993. The regulatory agencies released for public
comment proposed regulations in November 1993, but they have not been finalized
and the impact, if any, of these standards on the operations of depository
insured institutions cannot be determined until the regulations are issued in
final form.
UNIFORM LENDING STANDARDS
Pursuant to FDICIA, the federal banking agencies have adopted uniform
regulations and guidelines prescribing standards for extensions of credit that
are secured by liens on interests in real estate or made for the purpose of
financing the construction of a building or other improvements to real estate,
which became effective March 19, 1993. Under those regulations and guidelines,
financial institutions must adopt and maintain written policies that establish
appropriate limits and standards for extensions of credit that are secured by
liens or interests in real estate or are made for the purpose of financing
permanent improvements to real estate. These policies must establish loan
portfolio diversification standards, prudent underwriting standards (including
loan-to-value limits) that are clear and measurable, loan administration
procedures and documentation, approval and reporting requirements.
COMMUNITY REINVESTMENT
Under the Community Reinvestment Act ("CRA"), a financial institution has a
continuing and affirmative obligation consistent with its safe and sound
operation to help meet the credit needs of its entire community, including low
and moderate income neighborhoods. CRA does not establish specific lending
requirements or programs for financial institutions nor does it limit an
institution's discretion to develop the types of products and services that it
believes are best suited to its particular community, consistent with CRA. CRA
requires the appropriate federal banking agencies, in connection with their
examination of financial institutions, to assess the institutions' records of
meeting the credit needs of their communities and to take such records into
account in its evaluation of certain applications by each such institution. CRA
also requires public disclosure of an institution's CRA rating and requires that
the appropriate federal banking agency provide a written evaluation of an
institution's CRA performance utilizing a four-tiered descriptive rating system.
ENFORCEMENT
Under FDICIA, OTS has primary enforcement responsibility over savings
associations and savings and loan holding companies, OCC has primary enforcement
responsibility over national banks, the Federal Reserve has primary enforcement
responsibility over bank holding companies and state member banks, and the FDIC
has primary enforcement responsibility over state nonmember banks. The FDIC has
the authority to recommend that enforcement action be taken with respect to
institutions over which it does not have primary enforcement authority. If
action is not taken, the FDIC has authority to take such action under certain
circumstances. These agencies have the authority to bring enforcement actions
against those institutions and certain "institution-related parties," including
stockholders, and any attorneys, appraisers and accountants who knowingly or
recklessly participate in wrongful action likely to have an adverse effect on an
insured institution. Such enforcement actions can take the form of capital
directives, cease-and-desist orders, removal and prohibition orders and civil
penalties, which can range from $25,000 per day to as high as $1 million per
day, if a finding of reckless disregard is made. Federal criminal penalties for
most financial
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institution crimes, which are enforced by the Department of Justice, include
fines of up to $1 million and imprisonment for up to 30 years. In addition to
the prompt corrective action system, any financial institution that fails to
satisfy any of its capital requirements is subject to possible enforcement
actions by its appropriate federal banking agency. In this regard, the
appropriate federal banking agency could require one or more of the following
corrective actions: (i) increasing the amount of the institution's regulatory
capital to a specified level or levels; (ii) convening a meeting or meetings
with the agency's supervision staff; (iii) reducing the rate of earnings that
may be paid on accounts; (iv) limiting the receipt of deposits to those made to
existing accounts; (v) ceasing or limiting the issuance of new accounts of any
or all classes or categories, except in exchange for existing accounts; (vi)
ceasing or limiting lending or the making of a particular type or category of
loan; (vii) ceasing or limiting the purchase of loans or the making of specified
other investments; (viii) limiting operational expenditures to specified levels;
(ix) increasing liquid assets and maintaining such increased liquidity at
specified levels; or (x) taking such other action or actions as the agency may
deem necessary or appropriate for the safety and soundness of the institution,
or depositors or investors in the institution. The agency also could impose
harsher measures such as the appointment of a receiver or conservator or a
forced merger into another institution.
FDICIA amends the grounds for the appointment of a conservator or receiver
for an insured depository institution to include the following events: (i)
consent by the board of directors of the institution; (ii) cessation of the
institution's status as an insured depository institution; (iii) the institution
is undercapitalized and has no reasonable prospect of becoming adequately
capitalized when required to do so, fails to submit an acceptable capital plan
or materially fails to implement an acceptable capital plan; or (iv) the
institution is critically undercapitalized or otherwise has substantially
insufficient capital. FDICIA provides that an institution's directors shall not
be liable to its stockholders or creditors for acquiescing in or consenting to
the appointment of the FDIC or RTC as receiver or conservator or to a
supervisory acquisition of the institution.
The imposition of any of these measures on Bancorporation, CIVISTA or any
of their financial institution subsidiaries could have a substantial adverse
effect on operations and profitability. The appropriate federal banking agency
may also require the institution to raise additional capital through the
issuance of stock or other capital instruments.
INTERSTATE BANKING AND COMMUNITY DEVELOPMENT LENDING LEGISLATION
On September 29, 1994, President Clinton signed the Interstate Banking and
Branching Efficiency Act of 1994 ("Interstate Act"). The Interstate Act
generally permits nationwide interstate banking and branching commencing one
year after enactment. After that time an "adequately capitalized" and "well
managed" bank holding company may acquire a bank in any state, subject to
certain concentration limitations. No banking organization may control more than
ten percent of deposits nationwide or more than 30.0% of deposits in any one
state. Individual states may waive the 30.0% limitation. Beginning June 1, 1997,
interstate bank holding companies may consolidate banks they own in multiple
states into a single branch network, or acquire out-of-state banks as branches.
States may authorize interstate branching earlier than June 1, 1997, or may opt
out of the process altogether. De novo interstate branching is not authorized by
the Interstate Act, but states may specifically authorize it. States may also
limit the acquisition of newly-formed banks for a period of up to five years to
restrict effective de novo branching. The Interstate Act requires CRA compliance
by out-of-state branches and prohibits "deposit production offices" to ensure
that local savings are not diverted to other states. Institutions must maintain
a loan activity-to-deposit ratio within a host state at least equal to one-half
of the average percentage for all banks in the host state, otherwise the
institution's federal regulator may close the out-of-state branch and restrict
the institution from opening new branches in that state. Certain state laws,
such as those on intrastate branching, consumer protection and fair lending,
will still apply to out-of-state banks or branches. The Interstate Act is
expected to stimulate an already active merger environment in the banking
industry.
On September 23, 1994, President Clinton signed the Community Development,
Credit Enhancement and Regulatory Improvement Act of 1994 ("Community
Development Act"). The Community Development Act is intended to stimulate
community lending through the use of Community Development Financial
Institutions ("CDFIs") and make additional credit available in urban and rural
depressed communities. Both private investors and commercial banks are eligible
to participate in CDFIs by matching government contributions authorized by the
Community Development Act.
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DESCRIPTION OF BANCORPORATION CAPITAL STOCK
BANCORPORATION COMMON STOCK
Bancorporation's Articles have authorized 40,000,000 shares of Common
Stock, no par value, of which 27,163,171 were outstanding as of October 24,
1994. Of the authorized shares of Bancorporation Common Stock, 11,525,699 shares
are currently unreserved and available for issuance. These shares may be issued
and sold without further stockholder action provided that the issuance and sale
is made in compliance with the corporate governance documents of Bancorporation
and Ohio General Corporation Law. Each share of Bancorporation Common Stock is
accompanied by one Bancorporation Right pursuant to the Bancorporation Rights
Agreement.
Each share of Bancorporation Common Stock is entitled to (a) dividends when
and as declared by the directors, but after payment of dividends to any
Bancorporation Preferred Stock that may hereafter be issued, (b) to one vote per
share on each matter properly submitted to stockholders for their vote, and (c)
to participate ratably in the net assets of Bancorporation in the event of
liquidation, after any Bancorporation Preferred Stock that may hereafter be
issued.
On October 24, 1994, Bancorporation had 6,521 stockholders of record.
Holders of Bancorporation Common Stock have no preemptive rights for the
purchase of additional shares of any class of Bancorporation capital stock, nor
do they have the right to cumulate their voting power.
BANCORPORATION PREFERRED STOCK
Bancorporation has authorized 3,500,000 shares of Preferred Stock, no par
value, of which no shares were outstanding as of October 24, 1994.
Bancorporation has created a class of Preferred Stock entitled the "Series A
Preferred Stock" and has currently designated 300,000 shares for issuance
thereunder. The Series A Preferred Stock was created pursuant to the
Bancorporation's Rights Agreement. The remaining 3,200,000 shares of Preferred
Stock may be issued and sold without further stockholder action provided that
the issuance and sale is made in compliance with the corporate governance
documents of Bancorporation and Ohio General Corporation Law.
The holders of Bancorporation Preferred Stock are entitled to one vote per
share on matters on which they are entitled to vote, and the other terms thereof
may be fixed by Bancorporation's Board of Directors, including dividend rate,
liquidation price, redemption price, sinking fund provisions, conversion rights,
and restrictions on issuance of shares of the same series or any other class or
series as may be determined by the directors. As to dividend, redemption, and
liquidation rights, each series of Bancorporation Preferred Stock will be senior
to Bancorporation Common Stock. See "COMPARISON OF BANCORPORATION AND CIVISTA
CAPITAL STOCK."
COMPARISON OF BANCORPORATION AND CIVISTA CAPITAL STOCK
BANCORPORATION COMMON STOCK AND CIVISTA COMMON STOCK
If the Merger is consummated, all stockholders of CIVISTA (except holders
of CIVISTA Common Stock who perfect their dissenters' rights) will become
stockholders of Bancorporation. Bancorporation is a corporation organized under,
and governed by the Ohio General Corporation Law, the Bancorporation Articles
and the Bancorporation Regulations. CIVISTA is also a corporation organized
under Ohio law, and is governed by Ohio General Corporation Law, the CIVISTA
Articles, and the CIVISTA Regulations. The rights of a holder of CIVISTA Common
Stock are similar in most respects and different in other respects from the
rights of a holder of Bancorporation Common Stock. Certain of the most
significant similarities and differences are summarized below.
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE OHIO GENERAL
CORPORATION LAW, BANCORPORATION'S ARTICLES AND REGULATIONS, AND CIVISTA'S
ARTICLES AND REGULATIONS.
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VOTING RIGHTS
CUMULATIVE VOTING AND PREEMPTIVE RIGHTS. Each stockholder of
Bancorporation and CIVISTA has the right to cast one vote for each share owned
on all matters submitted to a vote of stockholders. No holder of shares of any
class of capital stock of Bancorporation or CIVISTA is entitled to the right of
cumulative voting. No holder of shares of any class of capital stock of
Bancorporation is entitled to preemptive rights; however, holders of shares of
CIVISTA Common Stock are entitled to preemptive rights.
NOMINATIONS. Any stockholder of Bancorporation who determines to nominate
a person for election as a director must deliver written notice to the Secretary
of Bancorporation not later than (a) with respect to an election to be held at
an Annual Meeting of Stockholders for the election of directors, 90 days in
advance of such meeting, and (b) with respect to such an election to be held at
a Special Meeting of Stockholders, the close of business on the seventh day
following the date on which notice of such meeting is first given to
stockholders. The notice must set forth specific information regarding the
nominating stockholder and nominee, and must be accompanied by a consent of the
nominee to serve as a director if so elected. The chairman of the meeting may
refuse to acknowledge the nomination of any person not made in compliance with
this procedure. CIVISTA's nomination provisions are similar except that
nominations for both Annual Meetings and Special Meetings must be made not less
than 60 nor more than 90 days in advance of such meeting, or in certain
circumstances within a shorter period of time.
SPECIAL MEETINGS. A special meeting of the stockholders of Bancorporation
can be called by the President, by the Board of Directors acting at a meeting,
by a majority of the Board when not in a meeting, or by stockholder(s) owning
one-half or more of the outstanding shares of Common Stock. A special meeting of
the stockholders of CIVISTA can be called by the Chairman or Vice-Chairman of
its Board of Directors, its President, by a majority of the Board, or by
stockholder(s) owning one-half or more of all of the outstanding shares of
capital stock of CIVISTA.
MERGERS, CONSOLIDATIONS, DISSOLUTIONS, COMBINATIONS, AND OTHER
TRANSACTIONS. Subject to the provisions discussed in "State Takeover Statutes"
below, Ohio law requires a merger, consolidation, dissolution, disposition of
all or substantially all of a corporation's assets, and a "majority share
acquisition" or "combination" involving issuance of shares with one-sixth or
more of the voting power of the corporation be adopted by the affirmative vote
of the holders of shares entitled to exercise at least two-thirds of the voting
power of the corporation on such proposal, unless the articles of incorporation
specify a different proportion (but not less than a majority). Adoption by the
affirmative vote of the holders of two-thirds of any class of shares, unless
otherwise provided in the articles, may also be required if the rights of
holders of that class are affected in certain respects by the merger or
consolidation. Except for the "Fair Price and Supermajority Vote Provisions"
discussed below, neither Bancorporation's Articles nor CIVISTA's Articles modify
such voting requirements.
FAIR PRICE AND SUPERMAJORITY VOTE PROVISIONS. Article Seventh of
Bancorporation's Articles requires that a merger or consolidation of
Bancorporation into or with a corporation, person, or entity that is the
beneficial owner of 10% or more of the issued and outstanding shares of a class
of Bancorporation capital stock ("Interested Party"), or the sale, lease or
other disposition of all or substantially all of the assets of Bancorporation to
an Interested Party, requires the approval of 80% of the outstanding voting
shares of each class of Bancorporation stock entitled to vote as a class. This
supermajority vote requirement is waived in the event the transaction has been
approved (i) by the Board of Directors prior to the time the Interested Party
beneficially owns 10% or more of the outstanding capital stock of
Bancorporation, or (ii) at any time before its consummation by two-thirds vote
of the total members of the Bancorporation Board of Directors and a majority of
the directors who either were appointed prior to the time the party beneficially
owned 4% or more of an outstanding class of capital stock or were recommended to
succeed such a director by a majority of such directors; provided, that the
transaction is structured in such a manner that the price to be paid by the
Interested Party is fair to all stockholders of Bancorporation. A Bancorporation
stockholder must receive a price equal to the highest price per share previously
paid to a stockholder by the Interested Party for a share of Bancorporation
capital stock of the same class. If that supermajority vote requirement is
waived, the transaction may be approved by the holders of at least two-thirds of
the outstanding capital stock.
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CIVISTA's Articles do not include fair price or supermajority vote
provisions. Instead, CIVISTA has elected to opt out of Ohio's Control Share
Acquisition Act (discussed in "Ohio Anti-Takeover Statutes" below), and has
adopted its own form of control share acquisition provision which includes a
simple majority stockholder authorization provision. CIVISTA's control share
acquisition provision is contrasted to Ohio's Control Share Acquisition Act in
"Ohio Anti-Takeover Statutes" below.
SHAREHOLDER RIGHTS PLAN
Pursuant to the terms of the Bancorporation Rights Agreement, between
Bancorporation and First National, as rights agent, a dividend of one preferred
share purchase right (a "Right") for each outstanding share of Bancorporation
Common Stock (sometimes hereinafter "Common Stock") was declared by the
Bancorporation Board of Directors. Each Right entitles the registered holder to
purchase from the Bancorporation one 1/100th of a share of the Series A
Preferred Stock at a price of $90 ("Purchase Price"), subject to adjustment.
On the earlier to occur of (i) ten days following a public announcement
that a person or group (an "Acquiring Person") has acquired beneficial ownership
of 15% or more of the outstanding Common Stock or (ii) ten business days (or
such later date as may be determined by action of the Board of Directors prior
to such time as any person becomes an Acquiring Person) following the
commencement or announcement of a tender offer or exchange offer by a person or
group for 15% or more of the outstanding Common Stock (the earlier of such dates
being called the "Distribution Date"), the Rights will be distributed.
The Bancorporation Rights Agreement provides that, until the Distribution
Date, the Rights will be transferred with and only with the Bancorporation
Common Stock. Until the Distribution Date the shares of Common Stock will
contain a notation incorporating the Rights Agreement by reference. As soon as
practicable following the Distribution Date, separate certificates evidencing
the Rights ("Right Certificates") will be mailed to holders of record of the
Common Stock. The Rights are not exercisable until the Distribution Date. The
Rights will expire on October 20, 2003 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed by
Bancorporation.
Shares of Bancorporation Preferred Stock purchasable upon exercise of the
Rights will not be redeemable. Each share of Preferred Stock will be entitled to
a minimum preferential quarterly dividend payment of $1.00 per share but will be
entitled to an aggregate dividend of 100 times the dividend declared per share
of Bancorporation Common Stock. In the event of liquidation, the holders of the
Preferred Shares will be entitled to a minimum preferential liquidation payment
of $1.00 per share but will be entitled to an aggregate payment of 100 times the
payment made per share of Common Stock. Each share of Preferred Stock will have
100 votes, voting together with the Common Stock. Finally, in the event of any
merger, consolidation or other transaction in which shares of Common Stock are
exchanged, each share of Preferred Stock will be entitled to receive 100 times
the amount received per share of Common Stock. These rights are protected by
customary antidilution provisions.
In the event that any person or group of affiliated or associated persons
becomes the beneficial owner of 15% or more of the outstanding Bancorporation
Common Stock (except pursuant to a tender offer for all of the Common Stock at a
price and on terms determined by a majority of the continuing directors to be
fair to and otherwise in the best interests of Bancorporation and its
stockholders), proper provision shall be made so that each holder of a Right,
other than Rights beneficially owned by the Acquiring Person (which will
thereafter be void), will thereafter have the right to receive upon exercise
that number of shares of Common Stock (or cash, other securities or property)
having a market value of two times the Purchase Price of the Right.
In the event that, after the Rights become exercisable, Bancorporation is
acquired in a merger or other business combination transaction with an Acquiring
Person or an affiliate thereof, or 50% or more of its consolidated assets or
earning power are sold to an Acquiring Person or an affiliate thereof, proper
provision will be made so that each holder of a Right will thereafter have the
right to receive, upon exercise thereof at the then current Purchase Price of
the Right, that number of shares of common stock of the acquiring company which
at the time of such transaction will have a market value of two times the
Purchase Price of the Right.
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At any time after the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 15% or more of the outstanding
Bancorporation Common Stock and prior to the acquisition by such person or group
of 50% or more of the outstanding Common Stock, the Board of Directors of
Bancorporation may exchange the Rights (other than Rights owned by such person
or group which have become void), in whole or in part, at an exchange ratio of
one share of Common Stock (or a fraction of a share of Preferred Stock having
equivalent market value) per Right (subject to adjustment).
With certain exceptions, no adjustment in the Purchase Price will be
required until cumulative adjustments require an adjustment of at least 1% in
such Purchase Price. No fractional share of Bancorporation Preferred Stocks will
be issued (other than fractions which are interest multiples of one-hundredth of
a share of Preferred Stock, which may, at the election of Bancorporation, be
evidenced by depositary receipts) and, in lieu thereof, an adjustment in cash
will be made based on the market price of the Preferred Shares on the last
trading day prior to the date of exercise.
At any time within ten days after a person or group of affiliated or
associated persons acquire beneficial ownership of 15% or more of the
outstanding Bancorporation Common Stock (unless the Board of Directors extends
such ten-day period), the Board of Directors of Bancorporation may redeem the
rights in whole, but not in part, at a price of $.01 per Right (the "Redemption
Price"), upon the approval of a majority of the Continuing Directors. The
redemption of the rights may be made effective at such time on such basis and
with such conditions as the Board of Directors in its sole discretion may
establish. Immediately upon any redemption of the Rights, the right to exercise
the Rights will terminate and the only right of the holders of Rights will be to
receive the Redemption Price. The Rights are also redeemable under other
circumstances as specified in the Rights Agreement.
The terms of the Rights may be amended by the Board of Directors of
Bancorporation without the consent of the holders of the Rights upon the
approval of a majority of the Continuing Directors, including an amendment to
lower certain thresholds described above to not less than the greater of (i) any
percentage greater than the largest percentage of the outstanding shares of
Common Stock then known to Bancorporation to be beneficially owned by any person
or group of affiliated or associated persons and (ii) 10%, except that from and
after such time as any person becomes an Acquiring Person no such amendment may
adversely affect the interests of the holders of the Rights. Until a Right is
exercised, the holder thereof, as such, will have no rights as a stockholder of
Bancorporation, including, without limitation, the right to vote or to receive
dividends.
A copy of the Bancorporation Rights Agreement is included as an exhibit to
the Form 8-A filed by Bancorporation with the Commission on November 4, 1993.
The foregoing description of the Rights Agreement does not purport to be
complete and is qualified in its entirety by reference to the Rights Agreement.
CIVISTA has not adopted a shareholder rights or similar plan.
OHIO ANTI-TAKEOVER STATUTES
Except as otherwise noted, the statutes described below apply to both
Bancorporation and CIVISTA.
OHIO CONTROL SHARE ACQUISITION ACT. The Ohio Control Share Acquisition Act
provides that certain notice and informational filings and special stockholder
meeting and voting procedures must be followed prior to consummation of a
proposed "control share acquisition," which is defined as any acquisition of an
issuer's shares which would entitle the acquiror, immediately after such
acquisition, directly or indirectly, to exercise or direct the exercise of
voting power of the issuer in the election of directors within any of the
following ranges of such voting power: (a) one-fifth or more but less than
one-third of such voting power; (b) one-third or more but less than a majority
of such voting power; or (c) a majority or more of such voting power. Assuming
compliance with the notice and information filings prescribed by statute, the
proposed control share acquisition may be made only if, at a duly convened
special meeting of stockholders, the acquisition is approved by both a majority
of the voting power of the issuer represented at the meeting and a majority of
the voting power remaining after excluding the combined voting power of the
intended acquiror and the directors
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and officers of the issuer. The Ohio Control Share Acquisition Act may be made
inapplicable to a company by its corporate governance documents, but those of
Bancorporation do not so provide.
As described in "Fair Price and Supermajority Vote Provisions" above,
CIVISTA has elected to opt out of Ohio's Control Share Acquisition Act and has,
instead, adopted its own form of control share acquisition provision. CIVISTA's
control share acquisition provision is similar to the Ohio Control Share
Acquisition Act (and thus is similar to the protections afforded Bancorporation
and its stockholders) except that CIVISTA's provision allows the CIVISTA Board
of Directors to screen out, and thereby preclude stockholder review of, certain
proposals that do not meet enumerated minimum standards.
OHIO MERGER MORATORIUM STATUTE. The Ohio Merger Moratorium provisions
prohibit certain business combinations and transactions between an "issuing
public corporation" and a beneficial owner of 10% or more of the shares of the
corporation (an "interested shareholder") for at least three years after the
interested shareholder attains 10% ownership, unless the board of directors of
the issuing public corporation approves the transaction before the interested
shareholder attains 10% ownership. An "issuing public corporation" is defined as
an Ohio corporation with 50 or more stockholders that has its principal place of
business, principal executive offices, or substantial assets within the State of
Ohio, and as to which no close corporation agreement exists. Examples of
transactions regulated by the Merger Moratorium provisions include the
disposition of assets, mergers and consolidations, voluntary dissolutions, and
the transfer of shares ("Moratorium Transactions").
Subsequent to the three-year period, a Moratorium Transaction may take
place provided that certain conditions are satisfied, including (a) the board of
directors approves the transaction, (b) the transaction is approved by the
holders of shares with at least two-thirds of the voting power of the
corporation (or a different proportion set forth in the articles of
incorporation), including at least a majority of the outstanding shares after
excluding shares controlled by the interested shareholder, or (c) the business
combination results in stockholders, other than the interested shareholder,
receiving a fair price plus interest for their shares. The Merger Moratorium
provisions are applicable to all corporations formed under Ohio law, but a
corporation may elect not to be covered by the Merger Moratorium provisions, or
subsequently elect to be covered, with an appropriate amendment to its articles
of incorporation. Neither Bancorporation nor CIVISTA has taken any such
corporate action to opt out of the Ohio Merger Moratorium statute.
OHIO "ANTI-GREENMAIL" STATUTE. Pursuant to ORC Section 1707.043, a public
corporation formed in Ohio may recover profits that a shareholder makes from the
sale of the corporation's securities within 18 months after making a proposal to
acquire control or publicly disclosing the possibility of a proposal to acquire
control. The corporation may not, however, recover from a person who proves
either (i) that his sole purpose in making the proposal was to succeed in
acquiring control of the corporation and there were reasonable grounds to
believe that he would acquire control of the corporation or (ii) that his
purpose was not to increase any profit or decrease any loss in the stock. Also,
before the corporation may obtain any recovery, the aggregate amount of the
profit realized by such person must exceed $250,000. Any shareholder may bring
an action on behalf of the corporation if a corporation refuses to bring an
action to recover these profits. The party bringing such an action may recover
his attorneys' fees if the court having jurisdiction over such action orders
recovery of any profits. An Ohio corporation may elect not to be covered by the
"anti-greenmail" statute with an appropriate amendment to its articles of
incorporation, but neither Bancorporation nor CIVISTA has taken any such
corporate action to opt out of the statute.
AMENDMENT TO CHARTER DOCUMENTS
The Bancorporation Articles presently require that two-thirds of the voting
power of Bancorporation approve any amendment to the Articles, except that (i)
with regard to Bancorporation's Series A Preferred Stock (no shares of which are
presently issued or outstanding), any amendment to Bancorporation's Articles
that would materially alter or change the powers, preferences, or special rights
of such Series A Preferred Stock so as to affect them adversely would have to be
approved by at least a majority vote of the holders of such shares, voting
together as a single class, and (ii) with regard to Article Seventh of
Bancorporation's Articles, certain business combinations require a vote of 80%
of the voting power of Bancorporation, unless the amendment is approved by 75%
of the Board and by a majority of the Continuing Directors, then by two-
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thirds of the voting power. The CIVISTA Articles also require that two-thirds of
the voting power of CIVISTA approve any amendment to the Articles, except that
(i) with regard to CIVISTA's Preferred Stock (no shares of which are presently
issued or outstanding), most amendments to CIVISTA's Articles that would affect
adversely the voting powers, rights, or preferences of such CIVISTA Preferred
Stock would have to be approved by two-thirds of the CIVISTA Preferred Stock
then outstanding, voting together as a single class, and (ii) any alteration,
amendment, or repeal of CIVISTA's control share acquisition provision requires
an affirmative vote by 75% of CIVISTA's voting power, unless the alteration,
amendment, or repeal is approved by at least two-thirds of the CIVISTA Board,
then by two-thirds of CIVISTA's voting power.
Directors may not amend the code of regulations of an Ohio corporation. The
Regulations of Bancorporation provide for amendment by stockholders holding a
majority of the voting power at a meeting (although Ohio law requires that all
amendments by written action of the stockholders without a meeting must be
approved unanimously by the stockholders entitled to vote thereon). In addition,
any amendments regarding the calling of special meetings of stockholders,
classification of directors, nomination of or removal of directors, or amendment
to the Bancorporation Regulations, must be approved by stockholders holding at
least two-thirds of the voting power of Bancorporation. The CIVISTA Regulations
provide for amendment by stockholders holding two-thirds of the voting power of
CIVISTA. In addition, any amendments regarding the calling of special meetings
of stockholders, powers of directors, classification of directors, removal of
directors, or amendment to CIVISTA's Regulations, must be approved by
stockholders holding at least 75% of the voting power of CIVISTA, unless the
amendment, alteration, change, repeal, or adoption is recommended by at least
two-thirds of the CIVISTA Board, then by two-thirds of CIVISTA's voting power.
DIRECTORS
NUMBER; CLASSIFICATION. Bancorporation's Regulations presently provide
that the number of directors shall not be greater than 24, divided into three
classes. The stockholders of Bancorporation at the 1994 Annual Meeting of
Shareholders fixed the number of Directors at 16. The respective terms of the
classes are staggered so that the term of one class expires each year, at which
time members of that class are elected to a three-year term.
The CIVISTA Regulations presently provide that the number of directors
shall be not less than eight nor more than 12 persons, divided into three
classes. The number of directors of CIVISTA has been set at 10. The respective
terms of the classes are staggered so that the term of one class expires each
year, at which time members of that class are elected to a three-year term.
REMOVAL. Bancorporation's Regulations provide that Bancorporation's
stockholders may remove a director for good cause by a vote of two-thirds of the
capital stock entitled to vote for directors. All the directors, all the
directors of a particular class, or any individual director of CIVISTA may be
removed with or without cause by stockholders holding not less than 75% of the
voting power of CIVISTA to elect directors, unless the removal has been
recommended by at least two-thirds of the CIVISTA Board then in office, in which
case only a majority vote of the CIVISTA stockholders is required. In addition,
the CIVISTA Board may remove any Board member if such member is declared of
unsound mind by any order of a court of competent jurisdiction.
INDEMNIFICATION. Under Ohio law, Ohio corporations are authorized to
indemnify directors, officers, employees, and agents within prescribed limits
and must indemnify them under certain circumstances. Ohio law does not provide
statutory authorization for a corporation to indemnify directors, officers,
employees, and agents for settlements, fines, or judgments in the context of
derivative suits. It provides, however, that directors (but not officers,
employees, and agents) are entitled to mandatory advancement of expenses,
including attorneys' fees, incurred in defending any action, including
derivative actions, brought against the director, provided the director agrees
to cooperate with the corporation concerning the matter and to repay the amount
advanced if it is proved by clear and convincing evidence that his act or
failure to act was done with deliberate intent to cause injury to the
corporation or with reckless disregard for the corporation's best interests.
Ohio law does not authorize payment of expenses or judgments to a director,
officer, employee, or agent after a finding of negligence or misconduct in a
derivative suit absent a court order. Indemnification is
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required, however, to the extent such person succeeds on the merits. In all
other cases, if a director, officer, employee, or agent acted in good faith and
in a manner he reasonably believed to be in or not opposed to the best interests
of the corporation, indemnification is discretionary except as otherwise
provided by a corporation's articles, code of regulations, or by contract and
except with respect to the advancement of expenses of directors.
Under Ohio law, a director is not liable for monetary damages unless it is
proved by clear and convincing evidence that his action or failure to act was
undertaken with deliberate intent to cause injury to the corporation or with
reckless disregard for the best interests of the corporation. There is, however,
no comparable provision limiting the liability of officers, employees, or agents
of a corporation. The statutory right to indemnification is not exclusive in
Ohio, and Ohio corporations may, among other things, procure insurance for such
persons.
Bancorporation's Articles provide that Bancorporation shall indemnify to
the fullest extent permitted by law any person made or threatened to be made a
party to any action, suit, or proceeding by reason of the fact that he is or was
a director, officer, employee or agent of Bancorporation, or of any other
corporation or organization for which he was serving as a director, officer,
employee or agent at the request of Bancorporation. The indemnification
provisions contained in CIVISTA's Regulations are substantially the same as
Bancorporation's provisions, with the exception that CIVISTA's Regulations state
that a director's or officer's right to be indemnified and right to
reimbursement or advancement of expenses is a contract right pursuant to which
each of such persons may bring suit as if such rights were set forth in separate
written contracts between CIVISTA and such persons. See "TERMS OF MERGER --
Interests of CIVISTA Executive Officers and Directors." Except for the contract
rights described above, neither Bancorporation nor CIVISTA has entered into
separate indemnification agreements with any of its executive officers or
directors. Both Bancorporation and CIVISTA have acquired insurance for their
obligations to provide indemnification to their officers and directors.
DIVIDENDS
An Ohio corporation may pay dividends out of surplus, however created, but
must notify its stockholders if a dividend is paid out of capital surplus. The
ability of Bancorporation and CIVISTA to pay cash dividends to their respective
stockholders is largely dependent on the amount of dividends which may be
declared and paid to each of them by their respective subsidiaries. There are a
number of statutory and regulatory requirements applicable to the payment of
dividends by banks, savings associations and bank holding companies. See
"REGULATORY MATTERS."
REPURCHASES
Under Ohio law, a corporation may by action of its board of directors
purchase or redeem its own shares if authorized to do so by its articles of
incorporation or under certain other circumstances, but may not do so if
immediately thereafter its assets would be less than its liabilities plus its
stated capital, if any, or if the corporation is insolvent or would be rendered
insolvent by such a purchase or redemption. Bancorporation's and CIVISTA's
Articles permit their respective Boards of Directors to authorize the repurchase
or redemption of shares to the extent permitted by law.
BANCORPORATION PREFERRED STOCK AND CIVISTA PREFERRED STOCK; TRANSFER AGENT
The terms and provisions of Bancorporation's Preferred Stock are delineated
above under "DESCRIPTION OF BANCORPORATION CAPITAL -- Bancorporation Preferred
Stock." CIVISTA's Articles establish a class of 5,000,000 Serial Preferred
Shares, without par value, of which no shares were outstanding as of October 24,
1994. The Preferred Stock may be issued and sold without further stockholder
action provided that the issuance and sale is made in compliance with the
corporate governance documents of CIVISTA and Ohio law. The CIVISTA Board is
empowered to issue the Preferred Shares in one or more series from time to time
for such consideration as it may fix and, with respect to each such series, to
fix certain of the express terms thereof, including dividend rate, liquidation
price, redemption rights and price, and to provide for sinking fund requirements
and conversion rights, if deemed advisable. As part of the Merger,
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CIVISTA has granted an option to Bancorporation to purchase shares of CIVISTA's
Series A Preferred Stock. See "TERMS OF MERGER -- CIVISTA Stock Option."
Bancorporation's transfer agent is First National Bank of Ohio and CIVISTA
acts as its own transfer agent.
ANTI-TAKEOVER EFFECT
Bancorporation has adopted certain corporate governance provisions
described above which may have anti-takeover effects. These provisions may
discourage or delay takeover attempts or a change of control of Bancorporation.
In addition, they may tend to insulate current directors and management against
the possibility of removal, and may give holders of a minority of Bancorporation
Common Stock the power to veto a business combination which the holders of a
majority of the stock may believe to be desirable and beneficial.
LEGAL OPINION
The validity of the shares of Bancorporation Common Stock to be issued by
Bancorporation under the Merger Agreement and certain tax matters relating to
the Merger will be passed upon for Bancorporation by its counsel, Brouse &
McDowell, a legal professional association, 500 First National Tower, Akron,
Ohio 44308. Philip A. Lloyd II, a shareholder of Brouse & McDowell, is a
director of Bancorporation and beneficially owns 117,360 shares of
Bancorporation Common Stock.
EXPERTS
The consolidated balance sheets of Bancorporation and its subsidiaries as
of December 31, 1993 and 1992, and the related consolidated statements of
income, shareholders' equity, and cash flows for the years then ended, which are
incorporated in this Prospectus and Joint Proxy Statement by reference to
Bancorporation's Annual Report on Form 10-K for the year ended December 31,
1993, have been so incorporated in reliance upon the report of Coopers &
Lybrand, L.L.P., independent accountants, given on the authority of said firm as
experts in auditing and accounting.
The consolidated statements of income, shareholders' equity, and cash flows
of Bancorporation and its subsidiaries for the year ended December 31, 1991,
which are incorporated in this Prospectus and Joint Proxy Statement by reference
to Bancorporation's Annual Report on Form 10-K for the year ended December 31,
1993, have been so incorporated in reliance upon the report of KPMG Peat Marwick
LLP, independent accountants, given on the authority of said firm as experts in
auditing and accounting.
The consolidated statements of condition of CIVISTA and its subsidiaries as
of September 30, 1993 and 1992 and the related consolidated statements of
operations, shareholders' equity and cash flows for each of the years in the
three year period ended September 30, 1993, have been incorporated in this
Prospectus and Joint Proxy Statement by reference to CIVISTA's Annual Report on
Form 10-K for the year ended September 30, 1993, in reliance upon the report of
KPMG Peat Marwick LLP, independent accountants, given on the authority of said
firm as experts in auditing and accounting. With respect to the unaudited
interim financial information for the periods ended December 31, 1993 and 1992,
March 31, 1994 and 1993 and June 30, 1994 and 1993, incorporated by reference
herein, that firm has reported that it applied limited procedures in accordance
with professional standards for a review of such information. However, that
firm's separate reports included in CIVISTA's quarterly reports on Form 10-Q for
the quarters ended December 31, 1993, March 31, 1994 and June 30, 1994, and
incorporated by reference herein, state that it did not audit and it does not
express an opinion on that interim financial information. Accordingly, the
degree of reliance on that firm's reports on such information should be
restricted in light of the limited nature of the review procedures applied. KPMG
Peat Marwick LLP, is not subject to the liabilities provisions of Section 11 of
the Securities Act for its reports on the unaudited interim financial
information because those reports are not a "report" or a "part" of the
registration statement prepared or certified by them within the meaning of
Sections 7 and 11 of the Securities Act.
62
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APPENDIX A
AGREEMENT OF AFFILIATION AND PLAN OF MERGER
<PAGE> 74
AGREEMENT OF AFFILIATION
AND
PLAN OF MERGER
------------------------
FIRST BANCORPORATION OF OHIO
AND
THE CIVISTA CORPORATION
------------------------
AUGUST 10, 1994
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AGREEMENT OF AFFILIATION AND PLAN OF MERGER
FIRST BANCORPORATION OF OHIO AND
THE CIVISTA CORPORATION
TABLE OF CONTENTS
<TABLE>
<S> <C> <C> <C>
1. The Merger.................................................................. 5
1.1. Merger........................................................... 5
2. Conversion of Shares........................................................ 5
2.1. Conversion of Shares............................................. 5
2.2. Exchange of Certificates......................................... 6
2.3. Dissenters' Rights............................................... 7
2.4. Closing of CIVISTA's Transfer Books.............................. 8
2.5. Employee Stock Options and Assumption............................ 8
3. Representations and Warranties of FBOH...................................... 8
3.1. Corporate Organization........................................... 8
3.2. Authority........................................................ 9
3.3. Capitalization................................................... 9
3.4. Subsidiaries..................................................... 9
3.5. Information in Disclosure Documents, Registration Statement, 10
etc..............................................................
3.6. Consents and Approvals; No Violation............................. 10
3.7. Reports and Financial Statements................................. 11
3.8. Taxes............................................................ 11
3.9. Employee Plans................................................... 12
3.10. Material Contracts............................................... 12
3.11. Absence of Certain Changes or Events............................. 12
3.12. Litigation....................................................... 12
3.13. Compliance with Laws and Orders.................................. 12
3.14. Agreements with Bank Regulators.................................. 13
3.15. FBOH Ownership of Stock.......................................... 13
3.16. Accounting Matters............................................... 13
3.17. Fees............................................................. 13
3.18. FBOH Action...................................................... 13
3.19. Vote Required.................................................... 13
3.20. Rights Agreement................................................. 13
3.21. Environmental Matters............................................ 14
4. Representations and Warranties of CIVISTA................................... 14
4.1. Corporate Organization........................................... 14
4.2. Authority........................................................ 14
4.3. Capitalization................................................... 14
4.4. Subsidiaries..................................................... 15
4.5. Information in Disclosure Documents Registration Statement, 15
etc..............................................................
4.6. Consent and Approvals; No Violation.............................. 16
4.7. Reports and Financial Statements................................. 16
4.8. Taxes............................................................ 17
4.9. Employee Plans, Employees........................................ 17
4.10. Material Contracts............................................... 18
4.11. Absence of Certain Changes or Events............................. 18
4.12. Litigation....................................................... 18
4.13. Compliance with Laws and Orders.................................. 18
4.14. Agreements with Regulators....................................... 19
4.15. Company Ownership of Stock....................................... 19
4.16. Accounting Matters............................................... 19
4.17. Fees............................................................. 19
</TABLE>
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<TABLE>
<S> <C> <C> <C>
4.18. Company Action................................................... 19
4.19. Vote Required.................................................... 19
4.20. Conduct of CIVISTA to Date....................................... 19
4.21. Environmental Matters............................................ 20
5. Covenants................................................................... 21
5.1. Acquisition Proposals and Negotiations........................... 21
5.2. Interim Operations of CIVISTA.................................... 21
5.3. Interim Operations of FBOH....................................... 24
5.4. Employment Matters............................................... 24
5.5. Access, Information and Confidentiality.......................... 25
5.6. Certain Filings, Consents and Arrangements, Divestitures......... 26
5.7. Takeover Statutes and Provisions................................. 27
5.8. Indemnification and Insurance.................................... 27
5.9. Additional Agreements............................................ 27
5.10. Compliance with Antitrust Laws................................... 27
5.11. Publicity........................................................ 28
5.12. Registration Statement, Joint Proxy Statement and Comfort 28
Letters..........................................................
5.13. Affiliates Compliance with The Securities Act.................... 29
5.14. Stockholders Meeting............................................. 29
5.15. Pooling and Tax-Free Reorganization Treatment.................... 29
5.16. Mergers of Subsidiaries.......................................... 29
5.17. Current Information.............................................. 30
5.18. Integration of Operations........................................ 30
5.19. NASD Listing..................................................... 30
5.20. Environmental Survey............................................. 30
6. Conditions.................................................................. 30
6.1. Conditions to Each Party's Obligations to Effect the Merger...... 30
6.2. Conditions to Obligation of CIVISTA to Effect the Merger......... 31
6.3. Conditions to Obligation of FBOH to Effect the Merger............ 32
7. Miscellaneous............................................................... 33
7.1. Termination...................................................... 33
7.2. Non-Survival of Representations, Warranties; Effect of 34
Termination......................................................
7.3. Waiver........................................................... 34
7.4. Amendment........................................................ 34
7.5. Entire Agreement................................................. 34
7.6. Applicable Law................................................... 34
7.7. Certain Definitions.............................................. 34
7.8. Notices.......................................................... 35
7.9. Counterparts, Exhibits........................................... 35
7.10. Parties in Interest.............................................. 35
7.11. Expenses......................................................... 36
7.12. Enforcement of the Agreement..................................... 36
7.13. Severability..................................................... 36
</TABLE>
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AGREEMENT OF AFFILIATION
AND PLAN OF MERGER
THIS AGREEMENT OF AFFILIATION AND PLAN OF MERGER, dated as of August 10,
1994 (this "AGREEMENT"), is made by and between First Bancorporation of Ohio, an
Ohio corporation ("FBOH"), and The CIVISTA Corporation, an Ohio corporation
("CIVISTA").
WHEREAS, the respective Boards of Directors of FBOH and CIVISTA have each
determined that it is in the best interests of their respective stockholders for
CIVISTA to merge with and into FBOH upon the terms and subject to the conditions
set forth herein;
WHEREAS, the respective Boards of Directors of FBOH and CIVISTA have each
approved the merger of CIVISTA with and into FBOH, upon the terms and subject to
the conditions set forth herein;
WHEREAS, the Board of Directors of FBOH intend to contemporaneously with
the merger of CIVISTA with and into FBOH, to merge the wholly owned subsidiary
of CIVISTA, Citizens Savings Bank of Canton, an Ohio savings and loan
association ("CITIZENS"), with and into a wholly owned subsidiary of FBOH, with
the surviving entity utilizing the name "Citizens," and to retain as separate
entities, The CASNET Group, Inc., Citizens Investment Corporation, Citizens
Savings Corporation and Crest Investments, Inc. (collectively, the "NON-BANKING
SUBSIDIARIES");
WHEREAS, the Board of Directors of FBOH will appoint to the FBOH Board of
Directors at the Effective Time, an individual to be recommended by CIVISTA
(subject to the approval of the FBOH Board of Directors);
WHEREAS, the Board of Directors of FBOH has requested CIVISTA, as a
condition and as an inducement for FBOH to enter into this Agreement, and
CIVISTA has agreed, to provide FBOH with an option to purchase up to ten percent
of the capital stock of CIVISTA, but only if certain events occur, pursuant to
the terms and conditions of the CIVISTA Stock Purchase Option (as hereinafter
defined);
WHEREAS, for Federal income tax purposes, it is intended that the merger
shall qualify as a reorganization under the provisions of Section 368 of the
Internal Revenue Code of 1986, as amended (the "CODE"); and
WHEREAS, for accounting purposes, it is intended that the merger shall be
accounted for as a "pooling of interests;"
NOW, THEREFORE, in consideration of the foregoing premises and the
representations, warranties and agreements contained herein, and subject to the
terms and conditions set forth herein, the parties hereto hereby agree as
follows:
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1. THE MERGER
1.1. MERGER.
1.1.1. Merger. At the Effective Time (as hereinafter defined), CIVISTA
will be merged with and into FBOH (the "MERGER") in accordance with the
provisions of Section 1701.78 of the Ohio General Corporation Law ("OGCL"). FBOH
shall be the surviving corporation in the Merger and shall continue after the
Merger to be incorporated under the laws of the State of Ohio (the "SURVIVING
CORPORATION"). The Merger shall have the effects specified in the OGCL. The name
of the Surviving Corporation shall be "First Bancorporation of Ohio."
1.1.2. Effective Time. As soon as practicable following the Closing (as
hereinafter defined), FBOH and CIVISTA (the "CONSTITUENT CORPORATIONS") shall
cause a certificate of merger complying with the requirements of Section 1701.81
of the OGCL (the "CERTIFICATE OF MERGER") to be filed with the Secretary of
State of the State of Ohio. The form of Certificate of Merger is attached hereto
as Exhibit 1.1.2, which has attached to it the Amended and Restated Articles of
Incorporation of the Surviving Corporation. The Merger will become effective at
the time and date which the Certificate of Merger is filed with the Secretary of
State of the State of Ohio (the "EFFECTIVE TIME").
1.1.3. Consummation of Merger. The closing of the Merger (the "CLOSING")
will take place (i) at 10:00 a.m. (local time) at the principal executive
offices of FBOH as promptly as practicable after the date on which all of the
conditions set forth in Article 6 are satisfied or duly waived, or (ii) at such
other time and place and on such other date as FBOH and CIVISTA may agree.
1.1.4. Articles of Incorporation and Regulations. The Amended and Restated
Articles of Incorporation and Code of Regulations of FBOH, attached hereto as
Exhibit 1.1.4, in effect immediately prior to the Effective Time will be the
Amended and Restated Articles of Incorporation and Regulations of the Surviving
Corporation after the Effective Time, until duly amended in accordance with
their respective terms and the OGCL.
1.1.5. Directors and Officers. The directors and officers of FBOH
immediately prior to the Effective Time will be the directors and officers,
respectively, of the Surviving Corporation, until their successors have been
duly elected or appointed and qualified or until their earlier death,
resignation or removal in accordance with the terms of the Surviving
Corporation's Amended and Restated Articles of Incorporation and Code of
Regulations and the OGCL. As indicated in Section 5.14, the Board of Directors
of FBOH will appoint to the FBOH Board of Directors at the Effective Time, an
individual to be recommended by CIVISTA, but subject to the approval of the FBOH
Board of Directors.
1.1.6. Service of Process. B.&McD., Inc., whose address is 106 S. Main
Street, Akron, Summit County, Ohio 44308, is the statutory agent upon whom any
process, notice or demand against FBOH, or the Surviving Corporation may be
served.
2. CONVERSION OF SHARES
2.1. CONVERSION OF SHARES. At the Effective Time,
(a) each then-outstanding share of common stock, no par value, of CIVISTA
("COMMON STOCK" or "SHARE") (other than shares of Common Stock (i) held in the
treasury of CIVISTA, or (ii) owned by FBOH for its own account), will, by virtue
of the Merger, automatically be cancelled and extinguished in consideration and
exchanged for the right to receive 1.723 (subject to adjustment pursuant to
Section 2.1(d)) (the "EXCHANGE RATIO") shares of common stock, no par value, of
FBOH ("FBOH COMMON STOCK");
(b) each Share issued and held in CIVISTA's treasury will, by virtue of the
Merger, automatically be cancelled and retired and all rights in respect thereof
will cease to exist;
(c) each then-outstanding share of FBOH Common Stock shall continue to be
an issued and outstanding Common Share, no par value, of the Surviving
Corporation and any shares of FBOH Common
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<PAGE> 79
Stock held in FBOH's treasury immediately prior to the Effective Time shall
continue to be held in the treasury of the Surviving Corporation at the
Effective Time; and
(d) if between the date of this Agreement and the Effective Time, the
shares of FBOH Common Stock shall be changed into a different number of shares
by reason of any reclassification, recapitalization, split-up, combination or
exchange of shares, or if a stock dividend or stock split thereon shall be
declared with a record date within said period, appropriate adjustment or
adjustments shall be made to the Exchange Ratio established by Section 2.1(a)
and the adjusted Exchange Ratio established by this Section 2.1(d).
2.2. EXCHANGE OF CERTIFICATES.
2.2.1. Exchange Agent. First National Bank of Ohio ("FNBO") shall act as
agent of FBOH for purposes of, among other things, mailing and receiving
transmittal letters and distributing certificates for FBOH Common Stock and cash
in lieu of fractional shares of FBOH Common Stock, to CIVISTA stockholders (the
"EXCHANGE AGENT"). Prior to the Effective Time, FBOH and the Exchange Agent
shall enter into an exchange agent agreement providing for, among other things,
the matters set forth in this Section 2.2.
Except as set forth herein, from and after the Effective Time, each holder
of a certificate that immediately prior to the Effective Time represented
outstanding shares of Common Stock ("CERTIFICATE") shall be entitled to receive
in exchange therefor, upon surrender thereof to the Exchange Agent, a
certificate for the number of shares of FBOH Common Stock (together with cash in
lieu of a fractional share of FBOH Common Stock, if any) (the "COMMON STOCK
CONSIDERATION" or "MERGER CONSIDERATION") to which such holder is entitled in
accordance with the terms of this Agreement. The Exchange Agent shall not be
entitled to vote or to exercise any rights of ownership with respect to the
shares of FBOH Common Stock held by it from time to time hereunder, except that
it shall receive and hold all dividends or other distributions paid or
distributed with respect to such shares for the account of the persons entitled
thereto. Within 180 days following the Effective Time, the Exchange Agent shall
deliver to FBOH any shares of FBOH Common Stock and funds (including any
interest with respect thereto) which FBOH has made available to the Exchange
Agent and which have not been disbursed to holders of Certificates, and
thereafter such holders shall be entitled to look to the Surviving Corporation
(subject to abandoned property, escheat, or other similar laws) with respect to
the shares of FBOH Common Stock and cash in lieu of fractional shares
deliverable or payable upon due surrender of their Certificates.
In the event that any holder of Common Stock cancelled and retired in
accordance with this Agreement is unable to deliver the Certificate which
represents such shares of the holder, FBOH, in the absence of actual notice that
any shares theretofore represented by any such Certificate have been acquired by
a bona fide purchaser, shall deliver to such holder the number of shares of
Common Stock to which such holder is entitled in accordance with the provisions
of this Agreement upon the presentation of the following: (i) evidence to the
reasonable satisfaction of FBOH that any such Certificate has been lost,
wrongfully taken or destroyed; (ii) such security or indemnity as may be
reasonably requested by FBOH to indemnify and hold FBOH and the transfer agent
harmless; or (iii) evidence satisfactory to FBOH that such person is the owner
of the shares theretofore represented by each Certificate claimed by him to be
lost, wrongfully taken or destroyed and that he is the person who would be
entitled to present each such Certificate for exchange pursuant to this
Agreement.
2.2.2. Notice of Exchange. Promptly after the Effective Time, FBOH shall
cause the Exchange Agent to mail and/or make available to each record holder of
a Certificate a notice and letter of transmittal advising such holder of the
effectiveness of the Merger and the procedures to be used in effecting the
surrender of the Certificate for exchange therefor and specifying that delivery
shall be effected, and risk of loss and title to the Certificate shall pass,
only upon proper delivery of the Certificate to the Exchange Agent, and such
other matters as FBOH shall reasonably specify. Upon surrender to the Exchange
Agent of a Certificate, together with such letter of transmittal duly executed
and completed in accordance with the instructions thereon, and such other
documents as may reasonably be requested by FBOH or the Exchange Agent, and
subject to any required withholding of taxes, the Exchange Agent shall promptly
deliver to the person entitled thereto the
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<PAGE> 80
appropriate Merger Consideration, and the surrendered Certificate shall, by
virtue of such delivery, automatically be cancelled.
2.2.3. Right to Merger Consideration. Until surrendered and exchanged in
accordance with this Section 2.2, each Certificate shall, from and after the
Effective Time, represent solely the right to receive the Common Stock
Consideration, as the case may be, together with any dividends or other
distributions as provided in Section 2.2.4, and shall have no other rights.
Neither CIVISTA nor FBOH shall be liable to any holder of shares of Common Stock
for any Merger Consideration (or dividends, distributions or interest with
respect thereto) delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.
2.2.4. Distribution with Respect to Unexchanged Certificates. No dividends
(cash or stock) or other distributions with respect to FBOH Common Stock
declared or paid by FBOH after the Effective Time with a record date after the
Effective Time shall be paid to the holder of any unsurrendered Certificate
until the holder of such Certificate surrenders such Certificate. Subject to the
effect of applicable laws, following surrender of any such Certificate, there
shall be paid to the holder of the certificates representing shares of FBOH
Common Stock, as the case may be, issued in exchange therefor, without interest,
(i) the amount of dividends or other distributions, if any, with a record date
after the Effective Time theretofore payable with respect to such shares of FBOH
Common Stock, as the case may be, and (ii) at the appropriate payment date, the
amount of dividends or other distributions with a record date after the
Effective Time but prior to surrender and a payment date subsequent to surrender
payable with respect to such shares of FBOH Common Stock, as the case may be.
The Surviving Corporation shall pay any dividends or make any other
distributions with a record date prior to the Effective Time which may have been
declared or made by CIVISTA (in accordance with its historical practices and
record dates) on Shares in accordance with the terms of this Agreement on or
prior to the Effective Time and which remain unpaid at the Effective Time.
2.2.5. Voting With Respect to Unexchanged Certificates. Holders of
unsurrendered Certificates shall be entitled to vote after the Effective Time at
any meeting of FBOH stockholders the number of whole shares of FBOH Common Stock
represented by such Certificates, regardless of whether such holders have
exchanged their Certificates, provided that no holder of unsurrendered
Certificates may vote at any meeting of FBOH stockholders that is held more than
30 days after the mailing of the notice and letter of transmittal provided for
under Section 2.2.2.
2.2.6. Fractional Shares. No certificates representing fractional shares
of FBOH Common Stock shall be issued upon the surrender for exchange of a
Certificate or Certificates. No dividends or distributions of FBOH shall be
payable on or with respect to any fractional share and any such fractional share
interest will not entitle the owner thereof to vote or to any rights of
stockholders of FBOH. In lieu of any such fractional share, a holder of shares
of Common Stock otherwise entitled to a fractional share of FBOH Common Stock
shall be entitled to receive promptly from the Exchange Agent a cash payment
(without interest) in an amount equal to the fraction of such share of FBOH
Common Stock to which such holder would otherwise be entitled multiplied by the
average of the high and low sales prices of FBOH Common Stock as reported on the
NASDAQ National Market System on the trading day immediately preceding the
Effective Time.
2.3. Dissenters' Rights. To the extent provided by the OGCL, any holder of
record of the Common Stock as of the date fixed for the determination of
stockholders of CIVISTA entitled to notice of the CIVISTA Meeting (as
hereinafter defined), and who shall have filed with CIVISTA, not later than ten
(10) days after such meeting, a written demand for payment of the fair cash
value of such shares in compliance with Section 1701.85 of the OGCL, and whose
shares shall not have been voted in favor of the Merger or adoption of this
Agreement, shall cease at the Effective Time to have any of the rights of a
stockholder in respect of such shares and shall only have the right to be paid
the fair cash value of such shares under Sections 1701.84 and 1701.85 of the
OGCL. Any former holder of Common Stock who after the Effective Time (i)
surrenders his certificates representing shares of Common Stock for exchange
pursuant to Section 2.3 hereof, or (ii) validly withdraws his written demand for
payment of fair cash value of such shares pursuant to Sections 1701.84 and
1702.85 of the OGCL, will thereupon be entitled to receive the Merger
Consideration as of the Effective Time pursuant to this Agreement.
To the extent provided by the OGCL, any holder of record of FBOH Common
Stock as of the date fixed for the determination of stockholders of FBOH
entitled to notice of the FBOH Meeting (as hereinafter
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defined) shall be entitled to relief as a dissenting shareholder in accordance,
and subject to compliance with, the OGCL.
2.4. Closing of CIVISTA's Transfer Books. At the close of business on the
business day immediately preceding the date of the Effective Time, the stock
transfer books of CIVISTA will be closed and no transfer of Shares will
thereafter be made. In the event of a transfer of ownership of CIVISTA Common
Stock which is not registered in the transfer records of CIVISTA, the Merger
Consideration to be distributed pursuant to this Agreement may be delivered to a
transferee if a Certificate is presented to the Exchange Agent accompanied by
all documents required to evidence and effect such transfer and by payment of
any applicable transfer taxes.
2.5. Employee Stock Options and Assumption. CIVISTA Disclosure Letter (as
hereinafter defined) sets forth a list of each employee stock option outstanding
on the date of this Agreement (collectively, the "COMPANY STOCK OPTIONS"),
pursuant to The CIVISTA Corporation Stock Option Plan and the 1993 CIVISTA
Corporation Stock Option Plan (collectively, the "COMPANY OPTION PLANS"), to
purchase Common Stock heretofore granted pursuant to the Company Option Plans.
CIVISTA Disclosure Letter also sets forth with respect to each Company Stock
Option the option exercise price, the number of shares subject to the option,
the dates of grant, vesting, exercisability and expiration of the option and
that the option is either a qualified or nonqualified stock option. Without the
written consent of FBOH, no additional stock options shall, after the date of
this Agreement, be granted under the Company Option Plans. All rights under
Company Stock Options shall be treated as provided in this Section.
Each Company Stock Option outstanding immediately prior to the Effective
Time shall be assumed at the Effective Time by the Surviving Corporation and
continue to be an issued and outstanding option of the Surviving Corporation in
accordance with the terms of the respective Company Option Plans, except that:
(a) the Surviving Corporation and its Compensation Committee shall be
substituted for the Company and the Committee of the Company's Board of
Directors administering such Company Option Plans, (b) from and after the
Effective Time, each such Company Stock Option may be exercised only for FBOH
Common Stock notwithstanding any contrary provision of the Company Option Plans
or stock option agreements executed in connection therewith, (c) each such
Company Stock Option shall at the Effective Time become an option to purchase a
number of shares of FBOH Common Stock equal to the product arrived at by
multiplying the Exchange Ratio by the number of shares of Common Stock subject
to such option immediately prior to the Effective Time, and (d) the exercise
price per share of FBOH Common Stock at which each such Company Stock Option is
exercisable shall be the amount (rounded up to the next whole cent) arrived at
by dividing the exercise price per share of Common Stock at which such Company
Stock Option is exercisable immediately prior to the Effective Time by the
Exchange Ratio; provided, however, that, notwithstanding the foregoing, the
Surviving Corporation shall not issue or pay for any fractional share otherwise
issuable upon any exercise of a Company Stock Option, as assumed and adjusted as
aforesaid.
In addition, notwithstanding clauses (c) and (d) of the immediately
preceding sentence, each Company Stock Option which is an incentive stock option
shall be adjusted as required by Section 424 of the Code, and the regulations
promulgated thereunder, so as not to constitute a modification, extension or
renewal of the option, within the meaning of Section 424 of the Code. The Board
of Directors of the Surviving Corporation shall take such action as may be
required under the Company Option Plans to effectuate the foregoing. Prior to
the Closing, FBOH shall reserve for issuance (and, if not previously registered
pursuant to the Securities Act, register) the number of shares of FBOH Common
Stock necessary to satisfy FBOH's obligations under this Section. Prior to the
Closing, and thereafter as may be appropriate, FBOH shall take such actions as
are necessary to effect the provisions of this Section, and to preserve for the
holders of Company Stock Options the benefits to be provided pursuant to this
Section.
3. REPRESENTATIONS AND WARRANTIES OF FBOH
FBOH hereby represents and warrants to CIVISTA that:
3.1. Corporate Organization. FBOH is a corporation duly organized, validly
existing and in good standing under the laws of the State of Ohio and is duly
qualified to do business as a foreign corporation and is
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in good standing in each jurisdiction in which its ownership or lease of
property or the nature of the business conducted by it makes such qualification
necessary, except for such jurisdictions in which the failure to be so qualified
would not have a Material Adverse Effect (as hereinafter defined) on FBOH. FBOH
is registered as a bank holding company under the Bank Holding Company Act of
1956, as amended (the "BHCA"). FBOH has the requisite corporate power and
authority to own, lease and operate its properties and assets and to carry on
its business as it is now being conducted.
3.2. Authority. FBOH has the requisite corporate power and authority to
execute and deliver this Agreement and, except for any required approval of
FBOH's stockholders and the approval of the applicable Regulatory Authorities
(as defined hereinafter), to consummate the transactions contemplated hereby.
The execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby have been duly authorized and approved by the
Board of Directors of FBOH, including provisions for the resolution of certain
issues by management, and no other corporate proceedings on the part of FBOH are
necessary to authorize this Agreement or to consummate the transactions so
contemplated, except for any required approval of FBOH's stockholders. This
Agreement has been duly executed and delivered by, and constitutes a valid and
binding obligation of, FBOH, enforceable against FBOH in accordance with its
terms, except as enforceability hereof may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium and other 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 proceedings may be brought.
3.3. Capitalization. The authorized capital stock of FBOH consists of
40,000,000 shares of FBOH Common Stock and 3,500,000 shares of preferred stock.
As of July 31, 1994, (i) 27,151,891 shares of FBOH Common Stock (including
treasury shares) were validly issued and outstanding, fully paid and
nonassessable and not issued in violation of any preemptive right of any
stockholder of FBOH, and (ii) no shares of preferred stock were issued and
outstanding. Since July 31, 1994 and through the date of this Agreement, FBOH
has not issued any additional shares of FBOH Common Stock or preferred stock
other than pursuant to the exercise of employee stock purchase rights or stock
options under FBOH Option Plans (as hereinafter defined) outstanding on July 31,
1994. Except as contemplated by this Agreement, the FBOH Rights Plan (as
hereinafter defined) or in the FBOH Disclosure Letter (which is a letter
attached hereto as Exhibit 3.3, dated the date of this Agreement, from FBOH to
CIVISTA, such letter being identified by CIVISTA executing a copy thereof), as
of the date of this Agreement, there are no shares of capital stock of FBOH
authorized, issued or outstanding and there are no outstanding subscriptions,
options, warrants, scrip, rights, calls, convertible securities or any other
similar agreements, arrangements or commitments of any character relating to the
issued or unissued capital stock or other securities of FBOH obligating, or
which may obligate, FBOH to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of capital stock of FBOH or obligating, or
which may obligate, FBOH to grant, extend or enter into any subscription,
option, warrant, scrip, right, call, convertible security or other similar
agreement, arrangement or commitment. Except as set forth in the FBOH Disclosure
Letter, there are no voting trusts or other similar agreements, arrangements or
commitments to which FBOH or any FBOH Subsidiary (as hereinafter defined) is a
party with respect to the voting of the capital stock of FBOH. All of the shares
of FBOH Common Stock issuable in exchange for the Common Stock at the Effective
Time in accordance with this Agreement will be, when so issued, duly authorized,
validly issued, fully paid and nonassessable and will not be subject to
preemptive rights. FBOH has reserved for issuance the number of shares of FBOH
Common Stock necessary to satisfy FBOH's obligations under Section 2.1.
3.4. Subsidiaries. The FBOH Disclosure Letter sets forth, as of the date
of this Agreement, the name and state of incorporation of each banking, savings
bank and each other significant subsidiary (as hereinafter defined) of FBOH
(collectively, the "FBOH SUBSIDIARIES"). Except as set forth in the FBOH
Disclosure Letter, each of the FBOH Subsidiaries is a bank, savings bank or a
corporation duly organized, validly existing and in good standing under the laws
of its respective jurisdiction of incorporation or organization and is duly
qualified to do business as a foreign corporation in each jurisdiction in which
its ownership or lease of property or the nature of the business conducted by it
makes such qualification necessary, except for such jurisdictions in which the
failure to be so qualified would not have a Material
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Adverse Effect on FBOH. Each of the FBOH Subsidiaries has the requisite
corporate power and authority to own, lease and operate its properties and
assets and to carry on its businesses as they are now being conducted.
Except as set forth in the FBOH Disclosure Letter, as of the date of this
Agreement, all outstanding shares of capital stock of each FBOH Subsidiary are
owned by FBOH or another FBOH Subsidiary and are validly issued, fully paid and
nonassessable, have not been issued in violation of any preemptive right and are
owned free and clear of all liens, claims, charges, options, encumbrances or
agreements with respect thereto. Except as set forth in the FBOH Disclosure
Letter, as of the date of this Agreement, neither FBOH nor any FBOH Subsidiary
owns beneficially more than 5% of any class of equity securities or any similar
interests of any corporation, bank, business, trust, association or similar
organization. There are, as of the date of this Agreement, no outstanding
subscriptions, options, warrants, scrip, rights, calls, convertible securities
or any other similar agreements, arrangements or commitments of any character
relating to the issued or unissued capital stock or other securities of any FBOH
Subsidiary obligating, or which may obligate, any FBOH Subsidiary to issue,
deliver or sell, or cause to be issued, delivered or sold, additional shares of
its capital stock or obligating, or which may obligate, any FBOH Subsidiary to
grant, extend or enter into any subscription, option, warrant, scrip, right,
call, convertible security or other similar agreement, arrangement or
commitment.
3.5. INFORMATION IN DISCLOSURE DOCUMENTS, REGISTRATION STATEMENT, ETC.
(a) None of the information with respect to FBOH or any FBOH Subsidiary
provided by FBOH for inclusion in the registration statement to be filed with
the Securities and Exchange Commission (the "COMMISSION") by FBOH on Form S-4
(or any other appropriate form) under the Securities Act of 1933, as amended
(the "SECURITIES ACT") for the purpose of registering the shares of FBOH Common
Stock to be issued in the Merger (the "REGISTRATION STATEMENT") will, at the
time it becomes effective and at the time of the FBOH Meeting and the CIVISTA
Meeting (both as hereinafter defined), contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein, in light of the
circumstances under which they are made, not misleading. None of the information
with respect to FBOH or any FBOH Subsidiary provided by FBOH for inclusion in
any joint proxy statement or information statement or notice of FBOH and
CIVISTA, or any amendments or supplements thereto, required to be mailed to
FBOH's and CIVISTA's stockholders in connection with the Merger (the "PROXY" or
"PROXY STATEMENT") will, at the time of the mailing of the Proxy Statement, and
at the time of the FBOH Meeting and the CIVISTA Meeting, contain any statement
which, at the time it is made and in light of the circumstances under which it
is made, is false or misleading with respect to any material fact, or which
omits to state any material fact necessary in order to make the statements
therein not false or misleading or necessary to correct any statement in any
earlier communication with respect to the solicitation of any proxy for the FBOH
Meeting and the CIVISTA Meeting which has become false or misleading. The
Registration Statement will comply as to form in all material respects with the
provisions of the Securities Act and the rules and regulations promulgated
thereunder. The Proxy Statement will comply as to form in all material respects
with the provisions of the Securities Exchange Act of 1934, as amended (the
"EXCHANGE ACT"), and the rules and regulations promulgated thereunder.
(b) All documents that FBOH is responsible for filing with any Governmental
Entity will comply as to form in all material respects with applicable law. None
of the information with respect to FBOH or any FBOH Subsidiary provided by FBOH
for inclusion in any document to be filed with any regulatory authority in
connection with the transactions contemplated hereby will contain any statement
of a material fact which is untrue as of the time that such statement is made.
3.6. Consents and Approvals; No Violation. Except as set forth in the FBOH
Disclosure Letter, neither the execution and delivery of this Agreement by FBOH,
nor the consummation by FBOH of the transactions contemplated hereby, nor
compliance by FBOH with any of the provisions hereof will (a) conflict with or
result in any breach of any provision of its Amended and Restated Articles of
Incorporation or Code of Regulations, (b) violate, conflict with, constitute a
default (or an event which, with notice or lapse of time or both, would
constitute a default) under, or result in the termination of, or accelerate the
performance required by, or result in a right of termination or acceleration of,
or result in the creation of any lien, security interest, charge or other
encumbrance upon any of the properties or assets of FBOH or any of the FBOH
Subsidiaries
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under, any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which FBOH or any FBOH Subsidiary is a party or to which they or
any of their respective properties or assets may be subject, except for such
violations, conflicts, breaches, defaults, terminations, accelerations or
creations of liens or other encumbrances, which, individually or in the
aggregate, will not have a Material Adverse Effect on FBOH, (c) violate any
judgment, ruling, order, writ, injunction, decree, statute, rule or regulation
applicable to FBOH or any FBOH Subsidiary or any of their respective properties
or assets, except for such violations which, individually or in the aggregate,
will not have a Material Adverse Effect on FBOH, or (d) require any consent,
approval, authorization or permit of or from, or filing with or notification to,
any court, governmental authority or other regulatory or administrative agency
or commission, domestic or foreign ("GOVERNMENTAL ENTITY"), except (i) pursuant
to the Exchange Act and the Securities Act, (ii) filing the certificate of
merger pursuant to the OGCL, (iii) filings required under the securities or blue
sky laws of the various states, (iv) filings with, and approval by, the Board of
Governors of the Federal Reserve System (the "FRB"), (v) filings with, and
approval by, the Office of the Comptroller of the Currency (the "OCC"), (vi)
filings with, and approval by, the Office of Thrift Supervision ("OTS"), (vii)
filings with, and approval by, the Ohio Division of Savings and Loan
Associations ("DIVISION"), (viii) filings and approvals pursuant to any
applicable state takeover laws ("STATE TAKEOVER APPROVALS"), (ix) consents,
approvals, authorizations, permits, filings or notifications in connection with
compliance with applicable provisions of federal and state securities laws
relating to the regulation of broker-dealers, investment advisors, or stock
transfer agents, or (x) consents, approvals, authorizations, permits, filings or
notifications which have either been obtained or made prior to the Closing or
which, if not obtained or made, will neither, individually or in the aggregate,
have a Material Adverse Effect on FBOH nor restrict FBOH's legal authority to
execute and deliver this Agreement and consummate the transactions contemplated
hereby.
3.7. Reports and Financial Statements. Since January 1, 1991, FBOH has
filed all reports, registrations and statements, together with any required
amendments thereto, that it was required to file with the Commission, including,
but not limited to Forms 10-K, Forms 10-Q, Forms 8-K and proxy statements
(collectively, the "FBOH REPORTS"). FBOH has previously made available or
furnished, or, with respect to the FBOH Reports filed after the date of this
Agreement, will promptly furnish, CIVISTA with true and complete copies of each
of the FBOH Reports. As of their respective dates (but taking into account any
amendments filed prior to the date of this Agreement), the FBOH Reports
complied, or, with respect to FBOH Reports filed after the date of this
Agreement, will comply, in all material respects with all the rules and
regulations promulgated by the Commission and did not contain, or, with respect
to FBOH Reports filed after the date of this Agreement, will not contain, any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited
consolidated financial statements and unaudited interim financial statements of
FBOH included in the FBOH Reports (the "FBOH FINANCIAL STATEMENTS") have been
prepared in accordance with generally accepted accounting principles applied on
a consistent basis (except as may be indicated therein or in the notes thereto)
and fairly present the consolidated financial position of FBOH and the FBOH
Subsidiaries as at the dates thereof and the consolidated results of operations
and cash flows for the periods then ended subject, in the case of the unaudited
interim financial statements, to normal year-end and audit adjustments and any
other adjustments described therein.
3.8. Taxes. Except as set forth in the FBOH Disclosure Letter, FBOH and
each FBOH Subsidiary have prepared in good faith and duly and timely filed, all
federal, state, local and foreign income, franchise, sales, real and personal
property and other tax returns and reports required to be filed by them on or
before the date of this Agreement, except where the failure to file would not
have a Material Adverse Effect on FBOH. Except as set forth in the FBOH
Disclosure Letter, FBOH and each FBOH Subsidiary have paid, or have adequately
reserved or have made adequate accruals (in accordance with generally accepted
accounting principles) with respect to, all taxes, interest and penalties shown
to be owing on all such returns or reports. There are no liens for federal,
state, local or foreign taxes upon the assets of FBOH or of any FBOH Subsidiary,
except for statutory liens for taxes and assessments not yet delinquent or the
validity of which is being contested in good faith by appropriate proceedings.
As of the date of this Agreement, except as set forth in the FBOH Disclosure
Letter, neither FBOH nor any of the FBOH Subsidiaries is a party to any action
or
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proceeding, nor is any such action or proceeding threatened, by any Governmental
Entity for the assessment or collection of taxes which are material in amount,
and no deficiency notices or reports have been received by FBOH or any of the
FBOH Subsidiaries in respect of any material deficiencies for any tax,
assessment or government charges.
3.9. Employee Plans. All employee bonus, deferred compensation, pension,
retirement, profit sharing, stock option, stock purchase, employee stock
ownership, stock appreciation rights, savings, consulting, severance, collective
bargaining, group insurance, fringe benefit and other employee benefit,
incentive and welfare plans, policies, contracts and arrangements and all trust
agreements related thereto, now in effect and relating to any present or former
directors, officers or employees of FBOH or FBOH subsidiaries, whether or not
described in Section 3(3) of Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), are identified in the FBOH Disclosure Letter ("FBOH EMPLOYEE
PLANS"). All of the FBOH employee plans have been maintained, operated and
administered in substantial compliance with their terms, and FBOH, all of the
FBOH Subsidiaries and all of the FBOH Employee Plans currently comply, and have
at all relevant times complied, in all material respects with ERISA, the Code,
and any other applicable laws. FBOH has previously delivered or made available
to CIVISTA copies of all FBOH Employee Plans, in each case as in effect on the
date of this Agreement.
3.10. Material Contracts. Except as set forth in the FBOH Disclosure
Letter or disclosed in the FBOH Reports, neither FBOH nor any FBOH Subsidiary
is, as of the date of this Agreement, a party to, or is bound by, (a) any
material lease not made in the ordinary course of business of FBOH, (b) any
agreement, arrangement, or commitment not made in the ordinary course of
business which materially restricts the conduct of any line of business of FBOH,
(c) any material agreement, indenture or other instrument not specifically
disclosed in the FBOH Financial Statements relating to the borrowing of money by
FBOH or the guarantee by FBOH of any such obligation (other than trade payables
and instruments relating to transactions entered into in the ordinary course of
business), (d) any agreement, arrangement or commitment with or to a labor
union, or (e) any other contract or agreement or amendment thereto that would be
required to be filed as an exhibit to a Form 10-K filed by FBOH with the
Commission as of the date of this Agreement (the "FBOH CONTRACTS"). Neither FBOH
nor any FBOH Subsidiary is in default under any FBOH Contract, which default is
reasonably likely to have, either individually or in the aggregate, a Material
Adverse Effect on FBOH, and there has not occurred any event that with the lapse
of time or the giving of notice or both would constitute such a default.
3.11. Absence of Certain Changes or Events. Except as set forth in the
FBOH Disclosure Letter or disclosed in FBOH Reports filed by FBOH with the
Commission prior to the date of this Agreement, since December 31, 1993 to the
date of this Agreement, there has not been any change in the financial
condition, results of operations or business of FBOH and the FBOH Subsidiaries
that either individually or in the aggregate has had a Material Adverse Effect
on FBOH.
3.12. Litigation. Except as disclosed in the FBOH Disclosure Letter or in
FBOH Reports filed by FBOH with the Commission prior to the date of this
Agreement, there is no litigation, action, arbitration or proceeding pending,
or, to the best knowledge of FBOH, threatened against or affecting FBOH or any
FBOH Subsidiary which, either individually or in the aggregate, is having, or
insofar as reasonably can be foreseen, will have, a Material Adverse Effect on
FBOH, nor is there any judgment, decree, injunction, rule or order of any
Governmental Entity or arbitrator, outstanding against FBOH or any FBOH
Subsidiary having, or which, insofar as reasonably can be foreseen, in the
future would have, any such effect.
3.13. Compliance with Laws and Orders. Except as disclosed in the FBOH
Disclosure Letter or in FBOH Reports filed by FBOH with the Commission prior to
the date of this Agreement, the businesses of FBOH and the FBOH Subsidiaries are
not being conducted, and have not been conducted since December 31, 1991, in
violation of any law, ordinance, regulation, judgment, order, decree, license or
permit of any Governmental Entity, except for possible violations which
individually or in the aggregate do not, and, insofar as reasonably can be
foreseen, in the future will not, have a Material Adverse Effect on FBOH. Except
as set forth in the FBOH Disclosure Letter, no investigation or review by any
Governmental Entity with respect to FBOH or any of the FBOH Subsidiaries outside
the ordinary course of business and not generally applicable to entities engaged
in the same business is pending or, to the knowledge of FBOH, threatened, and no
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Governmental Entity has indicated an intention to conduct the same in each case
other than those the outcome of which will not have a Material Adverse Effect on
FBOH.
3.14. Agreements with Bank Regulators. As of the date of this Agreement,
except as set forth in the FBOH Disclosure Letter, neither FBOH nor any FBOH
Subsidiary is a party to any written agreement or memorandum of understanding
with, or a party to any commitment letter or similar undertaking to, or is
subject to any order or directive by, or is a recipient of any extraordinary
supervisory letter from, any Governmental Entity outside the ordinary course of
business and not generally applicable to entities engaged in the same business,
including, without limitation, cease and desist or other orders of any bank
regulatory authority, which restricts materially the conduct of its business, or
in any manner relates to its capital adequacy, its credit policies or its
management, nor has FBOH been advised by any Governmental Entity that it is
contemplating issuing, requiring or requesting (or is considering the
appropriateness of issuing, requiring or requesting) any such order, directive,
agreement, memorandum of understanding, extraordinary supervisory letter,
commitment letter or similar undertaking. Except as set forth in the FBOH
Disclosure Letter, there are no (i) material violations or (ii) violations with
respect to which refunds or restitutions which are material in amount to FBOH
and the FBOH Subsidiaries taken as a whole may be required, cited in any
compliance report to FBOH or any FBOH Subsidiary as a result of an examination
by any bank regulatory authority.
3.15. FBOH Ownership of Stock. Except as disclosed in the FBOH Disclosure
Letter, and except pursuant to The CIVISTA Corporation Stock Purchase Option
dated August 10, 1994 (the "CIVISTA STOCK PURCHASE OPTION"), a copy of which is
attached hereto as Exhibit 3.15, neither FBOH nor, to the best of its knowledge,
any of its affiliates or associates (i) beneficially owns, directly or
indirectly, or (ii) are parties to any agreement, arrangement or commitment for
the purpose of acquiring, holding, voting or disposing of, in each case, Shares
(other than Shares held in a fiduciary, trust, custodial or agency capacity by a
bank or trust subsidiary of FBOH) which in the aggregate, represent 1% or more
of the outstanding Shares.
3.16. Accounting Matters. Neither FBOH nor, to the best of its knowledge,
any of its affiliates, has taken or agreed to take any action that would prevent
FBOH from accounting for the business combination to be effected by the Merger
as a "pooling of interests." FBOH has received from its independent accountants,
Coopers & Lybrand, a letter stating that based upon Coopers & Lybrand's review
of FBOH's letter proposal to CIVISTA dated August 1, 1994 (including the form of
this Agreement dated August 1, 1994 which was incorporated therein), the form of
this Agreement dated August 7, 1994, a review of CIVISTA's financial statements,
both audited and unaudited, and such other relevant documents and information
which Coopers & Lybrand deemed relevant, that such firm is currently unaware of
any reason why it would not be able to provide the letter to FBOH required under
Section 6.3(g).
3.17. Fees. Except for the fees paid and payable to Alex. Brown & Sons
Incorporated, neither FBOH nor any FBOH Subsidiary has paid or become obligated
to pay any fee or commission to any broker, finder or intermediary in connection
with the transactions contemplated by this Agreement.
3.18. FBOH Action. The Board of Directors of FBOH (at a meeting duly
called and held) has by the requisite vote (i) determined that the Merger is
advisable and in the best interests of FBOH and its stockholders, (ii)
authorized and approved this Agreement, and the transactions contemplated hereby
and thereby, including the Merger (iii) directed that the Merger be submitted
for consideration by FBOH's stockholders at the FBOH Meeting, and (iv)
authorized and approved the Merger in accordance with Chapter 1704 of the Ohio
Revised Code with the result that Chapter 1704 will not apply to the
consummation of the Merger and acquisition of shares of FBOH Common Stock by the
holders of Common Stock pursuant to this Agreement.
3.19. Vote Required. The affirmative vote of the holders of two-thirds of
the outstanding shares of FBOH Common Stock is necessary to approve this
Agreement and the transactions contemplated hereby.
3.20. Rights Agreement. No person will become an "Acquiring Person" and no
"Shares Acquisition Date" or "Distribution Date" will occur under the
Shareholder Rights Agreement, dated October 21, 1993, between FBOH and FNBO, as
rights agent (the "FBOH RIGHTS PLAN"), and no holder of rights issued under the
FBOH Rights Plan shall have any rights under Sections 7(a), 11(a)(ii) or 13(a)
of the FBOH Rights Plan as a result of the approval, execution or delivery of
this Agreement or the consummation of the
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Merger. No amendments have been made prior to the date of this Agreement to the
FBOH Rights Plan except as specifically referred to in this Section 3.20.
3.21. Environmental Matters. Except as set forth in the FBOH Disclosure
Letter, to the best of FBOH's knowledge: (i) neither FBOH nor any of the FBOH
subsidiaries has been or is in violation of or liable under any Environmental
Law (as hereinafter defined), except for any such violations or liabilities
which would not reasonably be expected, individually or in the aggregate, to
have a Material Adverse Effect on FBOH; and (ii) none of the Loan Portfolio
Properties and Other Properties Owned (as hereinafter defined) by FBOH or any of
the FBOH subsidiaries has been since such properties have been owned, operated
or managed by FBOH or any of the FBOH subsidiaries, or is in violation of or
liable under any Environmental Law, except for any such violations or
liabilities which, individually or in the aggregate, would not reasonably be
expected to have a Material Adverse Effect on FBOH. Except as set forth in the
FBOH Disclosure Letter, there are no actions, suits, demands, notices, claims,
investigations or proceedings pending, or to the best of FBOH's knowledge
threatened, relating to the liability of the Loan Portfolio Properties and Other
Properties Owned by FBOH or the FBOH subsidiaries under any Environmental Law,
including, without limitation, any notices, demand letters or requests for
information from any federal, state or local environmental agency relating to
any such liabilities under or violations of Environmental Law.
4. REPRESENTATIONS AND WARRANTIES OF CIVISTA
CIVISTA hereby represents and warrants to FBOH that:
4.1. Corporate Organization. CIVISTA is a corporation duly organized,
validly existing and in good standing under the laws of the State of Ohio and is
duly qualified to do business as a foreign corporation and is in good standing
in each jurisdiction in which its ownership or lease of property or the nature
of the business conducted by it makes such qualification necessary, except for
such jurisdictions in which the failure to be so qualified would not have a
Material Adverse Effect on CIVISTA. CIVISTA is registered as a unitary savings
and loan holding company with OTS (as defined herein). CIVISTA has the requisite
corporate power and authority to own, lease and operate its properties and
assets and to carry on its business as it is now being conducted. CIVISTA has
delivered to FBOH as attachments to the CIVISTA Disclosure Letter true and
complete copies of its Articles of Incorporation, as amended, and its Code of
Regulations, as amended (the "CORPORATE GOVERNANCE DOCUMENTS") as currently in
effect.
4.2. Authority. CIVISTA has the requisite corporate power and authority to
execute and deliver this Agreement and, except for any required approval of
CIVISTA's stockholders and the approval of the applicable Regulatory
Authorities, to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby have been duly authorized and approved by the Board of
Directors of CIVISTA and no other corporate proceedings on the part of CIVISTA
are necessary to authorize this Agreement or to consummate the transactions so
contemplated, except for approval by the stockholders of CIVISTA as provided in
Section 6.1(a). This Agreement has been duly executed and delivered by, and
constitutes a valid and binding obligation of, CIVISTA, enforceable against
CIVISTA in accordance with its terms, except as enforceability hereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium and
other 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
proceedings may be brought, and except as enforceability hereof may be limited
by laws relating to the safety and soundness of insured depository institutions
as set forth in 12 U.S.C. Section 1818(b) or to the appointment of a conservator
or receiver by the Federal Deposit Insurance Corporation.
4.3. Capitalization. The authorized capital stock of CIVISTA consists of
5,000,000 shares of Common Stock and 5,000,000 shares of serial preferred stock.
As of the date of this Agreement, (i) 3,506,552 shares of Common Stock
(including 8,248 treasury shares) were validly issued and outstanding, fully
paid and nonassessable and not issued in violation of any preemptive right of
any Company stockholder, and (ii) no shares of serial preferred stock were
issued and outstanding. As of the date of this Agreement, there were outstanding
Company Stock Options to purchase 281,800 shares of Common Stock, all of which
are currently exercisable. Except as contemplated by this Agreement, the CIVISTA
Stock Purchase Option or in
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CIVISTA Disclosure Letter (which is a letter attached hereto as Exhibit 4.3,
dated the date of this Agreement, from CIVISTA to FBOH, such letter being
identified by FBOH executing a copy thereof), there are no shares of capital
stock of CIVISTA authorized, issued or outstanding and there are no outstanding
subscriptions, options, warrants, scrip, rights, calls, convertible securities
or any other similar agreements, arrangements or commitments of any character
relating to the issued or unissued capital stock or other securities of CIVISTA
obligating, or which may obligate, CIVISTA to issue, deliver or sell, or cause
to be issued, delivered or sold, additional shares of capital stock of CIVISTA
or obligating, or which may obligate, CIVISTA to grant, extend or enter into any
subscription, option, warrant, scrip, right, call, convertible security or other
similar agreement, arrangement or commitment. Except as set forth in CIVISTA
Disclosure Letter, there are no voting trusts or other similar agreements,
arrangements, or commitments to which CIVISTA or any Company Subsidiary (as
hereinafter defined) is a party with respect to the voting of the capital stock
of CIVISTA.
4.4. Subsidiaries. CIVISTA Disclosure Letter sets forth, as of the date of
this Agreement, the name and state of incorporation of each subsidiary of
CIVISTA (collectively, the "COMPANY SUBSIDIARIES") and the authorized capital
stock of each Company Subsidiary. Except as set forth in CIVISTA Disclosure
Letter, each of the Company Subsidiaries is a savings association or a
corporation duly organized, validly existing and in good standing under the laws
of its respective jurisdiction of incorporation or organization and is duly
qualified to do business as a foreign corporation in each jurisdiction in which
its ownership or lease of property or the nature of the business conducted by it
makes such qualification necessary, except for such jurisdictions in which the
failure to be so qualified would not have a Material Adverse Effect on CIVISTA.
Each of the Company Subsidiaries has the requisite corporate power and authority
to own, lease and operate its properties and assets and to carry on its
businesses as they are now being conducted. CIVISTA has delivered to FBOH as
attachments to the CIVISTA Disclosure Letter true and complete copies of the
Company Subsidiaries' articles of incorporation and code of regulations, both as
currently in effect.
Except as set forth in CIVISTA Disclosure Letter, as of the date of this
Agreement, all outstanding shares of capital stock of each Company Subsidiary
are owned by CIVISTA or another Company Subsidiary and are validly issued, fully
paid and nonassessable, have not been issued in violation of any preemptive
right and are owned free and clear of all liens, claims, charges, options,
encumbrances or agreements with respect thereto. Except as set forth in CIVISTA
Disclosure Letter, as of the date of this Agreement, neither CIVISTA nor any
Company Subsidiary owns beneficially more than 5% of any class of equity
securities or any similar interests of any corporation, bank, business, trust,
association or similar organization. There are, as of the date of this
Agreement, no outstanding subscriptions, options, warrants, scrip, rights,
calls, convertible securities or any other similar agreements, arrangements or
commitments of any character relating to the issued or unissued capital stock or
other securities of any Company Subsidiary obligating, or which may obligate,
any Company Subsidiary to issue, deliver or sell, or cause to be issued,
delivered or sold, additional shares of its capital stock or obligating, or
which may obligate, any Company Subsidiary to grant, extend or enter into any
subscription, option, warrant, scrip, right, call, convertible security or other
similar agreement, arrangement or commitment.
4.5. INFORMATION IN DISCLOSURE DOCUMENTS, REGISTRATION STATEMENT, ETC.
(a) None of the information with respect to CIVISTA or any Company
Subsidiary provided in writing by CIVISTA for inclusion in the Registration
Statement will, at the time it becomes effective and at the time of the FBOH
Meeting and the CIVISTA Meeting, contain any untrue statement of a material fact
or omit to state any material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they are made, not misleading. None of the information with respect to CIVISTA
or any Company Subsidiary provided in writing by CIVISTA for inclusion in the
Proxy Statement will, at the time of the mailing of the Proxy Statement, and at
the time of the FBOH Meeting and the CIVISTA Meeting, contain any statement
which, at the time it is made and in light of the circumstances under which it
is made, is false or misleading with respect to any material fact, or which
omits to state any material fact necessary in order to make the statements
therein not false or misleading or necessary to correct any statement in any
earlier communication with respect to the solicitation of any proxy for the FBOH
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Meeting and the CIVISTA Meeting which has become false or misleading. The Proxy
Statement will comply as to form in all material respects with the provisions of
the Exchange Act, and the rules and regulations promulgated thereunder.
(b) All documents that CIVISTA is responsible for filing with any
Governmental Entity will comply as to form in all material respects with
applicable law. None of the information with respect to CIVISTA or any Company
Subsidiary provided by CIVISTA for inclusion in any document to be filed with
any regulatory authority in connection with the transactions contemplated hereby
will contain any statement of a material fact which is untrue as of the time
that such statement is made.
4.6. Consent and Approvals; No Violation. Except as set forth in CIVISTA
Disclosure Letter, neither the execution and delivery of this Agreement by
CIVISTA, nor the consummation by CIVISTA of the transactions contemplated
hereby, nor compliance by CIVISTA with any of the provisions hereof, will (a)
conflict with or result in any breach of any provision of its Corporate
Governance Documents, (b) violate, conflict with, constitute a default (or an
event which, with notice or lapse of time or both, would constitute a default)
under, or result in the termination of, or accelerate the performance required
by, or result in a right of termination or acceleration of, or result in the
creation of any lien, security interest, charge or other encumbrance upon any of
the properties or assets of CIVISTA or any of the Company Subsidiaries under,
any of the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other instrument or
obligation to which CIVISTA or any Company Subsidiary is a party or to which
they or any of their respective properties or assets may be subject, except for
such violations, conflicts, breaches, defaults, terminations, accelerations or
creations of liens or other encumbrances, that are set forth in CIVISTA
Disclosure Letter or which, individually or in the aggregate, will not have a
Material Adverse Effect on CIVISTA, (c) violate any judgment, ruling, order,
writ, injunction, decree, statute, rule or regulation applicable to CIVISTA or
any Company Subsidiary or any of their respective properties or assets, except
for such violations which, individually or in the aggregate, will not have a
Material Adverse Effect on CIVISTA, or (d) require any consent, approval,
authorization or permit of or from, or filing with or notification to, any
Governmental Entity, except (i) pursuant to the Exchange Act and the Securities
Act, (ii) filing certificates of merger pursuant to the OGCL, (iii) filings
required under the securities or blue sky laws of the various states, (iv)
filings with, and approval by, the FRB, (v) filings with, and approval by, the
OCC, (vi) filings with, and approval by, the OTS, (vii) filings with, and
approval by the Division, (viii) filings and approvals pursuant to any
applicable State Takeover Approvals, or (ix) consents, approvals,
authorizations, permits, filings or notifications which have either been
obtained or made prior to the Closing or which, if not obtained or made, will
neither, individually or in the aggregate, have a Material Adverse Effect on
CIVISTA nor restrict CIVISTA's legal authority to execute and deliver this
Agreement and consummate the transactions contemplated hereby.
4.7. Reports and Financial Statements. Since September 30, 1991, CIVISTA
has filed all reports, registrations and statements, together with any required
amendments thereto, that it was required to file with the Commission, including,
but not limited to Forms 10-K, Forms 10-Q, Forms 8-K and proxy statements
(collectively, the "COMPANY REPORTS"). The Company has previously made available
or furnished, or, with respect to Company Reports filed after the date of this
Agreement, will promptly furnish, FBOH with true and complete copies of each of
the Company Reports. As of their respective dates (but taking into account any
amendments filed prior to the date of this Agreement), the Company Reports
complied, or, with respect to Company Reports filed after the date of this
Agreement, will comply, in all material respects with all the rules and
regulations promulgated by the Commission, and did not contain, or, with respect
to Company Reports filed after the date of this Agreement, will not contain, any
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The audited
consolidated financial statements and unaudited interim financial statements of
CIVISTA included in the Company Reports (the "COMPANY FINANCIAL STATEMENTS")
have been prepared in accordance with generally accepted accounting principles
applied on a consistent basis (except as may be indicated therein or in the
notes thereto) and fairly present the consolidated financial position of CIVISTA
and the Company Subsidiaries as at the dates thereof and the consolidated
results of operations and cash flows for the periods then ended subject, in
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the case of the unaudited interim financial statements, to normal year-end and
audit adjustments and any other adjustments described therein.
4.8. Taxes. Except as set forth in CIVISTA Disclosure Letter, CIVISTA and
each Company Subsidiary have prepared in good faith and duly and timely filed,
or caused to be duly and timely filed, all federal, state, local and foreign
income, franchise, sales, real and personal property and other tax returns and
reports required to be filed by them on or before the date of this Agreement,
except where the failure to file would not have a Material Adverse Effect on
CIVISTA. Except as set forth in CIVISTA Disclosure Letter, CIVISTA and each
Company Subsidiary have paid, or have adequately reserved or have made adequate
accruals (in accordance with generally accepted accounting principles) with
respect to, all taxes, interest and penalties shown to be owing on all such
returns and reports. The CIVISTA Disclosure Letter sets forth, as of the date of
this Agreement, the following information with respect to CIVISTA and each
Company Subsidiary: (i) the most recent tax year through which the IRS has
completed its examination of such corporation, (ii) whether there is an
examination pending by the IRS with respect to such corporation and, if so, the
tax years involved, (iii) whether such corporation has executed or filed with
the IRS any agreement which is still in effect extending the period for
assessment and collection of any federal tax and, if so, the tax years covered
by such agreement and the expiration date of such extension, and (iv) whether
there are any existing material disputes as to state, local or foreign taxes.
Except as set forth in CIVISTA Disclosure Letter, there are no liens for
federal, state, local or foreign taxes upon the assets of CIVISTA or of any
Company Subsidiary, except for statutory liens for taxes and assessments not yet
delinquent or the validity of which is being contested in good faith by
appropriate proceedings. Except as set forth in CIVISTA Disclosure Letter,
neither CIVISTA nor any of the Company Subsidiaries is a party to any action or
proceeding, nor is any such action or proceeding threatened, by any Governmental
Entity for the assessment or collection of taxes which are material in amount,
and no deficiency notices or reports have been received by CIVISTA or any of the
Company Subsidiaries in respect of any material deficiencies for any tax,
assessment, or government charges. After the date of this Agreement, CIVISTA
will promptly notify FBOH of (i) the commencement or threat of any such action
or proceeding involving an amount of taxes material to CIVISTA and its
subsidiaries taken as a whole, and (ii) the receipt by CIVISTA or the Company
Subsidiaries of any such deficiency notices or reports in respect of any
material deficiencies.
4.9. Employee Plans, Employees. All employee bonus, deferred compensation,
pension, retirement, profit sharing, stock option, stock purchase, employee
stock ownership, stock appreciation rights, savings, consulting, severance,
collective bargaining, group insurance, fringe benefit and other employee
benefit, incentive and welfare plans, policies, contracts and arrangements and
all trust agreements related thereto, now in effect and relating to any present
or former directors, officers or employees of CIVISTA or the Company
Subsidiaries, whether or not described in Section 3(3) of ERISA ("COMPANY
EMPLOYEE PLANS"), are identified in CIVISTA Disclosure Letter. CIVISTA has
previously delivered or made available to FBOH copies of all Company Employee
Plans, in each case as in effect on the date of this Agreement. All of Company
Employee Plans have been maintained, operated and administered in substantial
compliance with their terms, and CIVISTA, all of the Company Subsidiaries and
all of the Company Employee Plans currently comply, and have at all relevant
times complied, in all material respects with ERISA, the Code, and any other
applicable laws. With respect to each Company Employee Plan which is a pension
plan (as defined in Section 3(2) of ERISA): (a) except as set forth in CIVISTA
Disclosure Letter each pension plan as amended (and any trust relating thereto)
intended to be a qualified plan under Section 401(a) of the Code either has been
determined by the Internal Revenue Service ("IRS") to be so qualified or is the
subject of a pending application for such determination that was timely filed,
(b) except as set forth in CIVISTA Disclosure Letter, would be fully funded
(calculated using the interest rate and other actuarial assumptions mandated by
the Pension Benefit Guaranty Corporation ("PBGC")) if terminated at the
Effective Time and there is no accumulated funding deficiency (as defined in
Section 302 of ERISA and Section 412 of the Code), whether or not waived, and no
waiver of the minimum funding standards of such sections has been requested from
the IRS, (c) no reportable event described in Section 4043 of ERISA has
occurred, (d) no defined benefit plan has been terminated, nor has the PBGC
instituted proceedings to terminate a defined benefit plan or to appoint a
trustee or administrator of a defined benefit plan, and no circumstances exist
that constitute grounds under Section 4042 of ERISA entitling the PBGC to
institute any such proceedings, and (e) no pension plan is a "multi-employer
plan" within the meaning of Section 3(37) of ERISA. Except as set forth in
CIVISTA
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Disclosure Letter, no Company Employee Plan provides benefits, including,
without limitation, death or medical benefits (whether or not insured), with
respect to current or former employees beyond their retirement or other
termination of service (other than (i) temporary coverage mandated by applicable
law, (ii) death benefits or retirement benefits under any "employee pension
plan," as that term is defined in Section 3(2) of ERISA, (iii) deferred
compensation benefits accrued as liabilities on the books of CIVISTA or any
Company Subsidiary, or (iv) benefits the full cost of which are borne by the
current or former employee (or his or her beneficiary)).
Except as set forth in CIVISTA Disclosure Letter, all employees of CIVISTA
and the Company Subsidiaries are "at will" and there are no employment,
consulting or like agreements, written or oral, expressed or implied.
4.10. Material Contracts. Except as set forth in CIVISTA Disclosure Letter
or disclosed in the Company Reports, neither CIVISTA nor any Company Subsidiary
is, as of the date of this Agreement, a party to, or is bound by, (a) any
material lease not made in the ordinary course of business of CIVISTA, (b) any
agreement, arrangement, or commitment not made in the ordinary course of
business which materially restricts the conduct of any line of business of
CIVISTA, (c) any benefit agreements providing for aggregate payments to any
person in any calendar year in excess of $100,000, (d) any material agreement,
indenture or other instrument not specifically disclosed in CIVISTA Financial
Statements relating to the borrowing of money by CIVISTA or the guarantee by
CIVISTA of any such obligation (other than trade payables and instruments
relating to transactions entered into in the ordinary course of business), (e)
any agreement, arrangement or commitment with or to a labor union or (f) any
other contract or agreement or amendment thereto that would be required to be
filed as an exhibit to a Form 10-K filed by the Company with the Commission (the
agreements and other documents referred to in clauses (a) through (e) of this
sentence, collectively, the "COMPANY CONTRACTS"). Neither CIVISTA nor any
Company Subsidiary is in default under any Company Contract, which default is
reasonably likely to have, either individually or in the aggregate, a Material
Adverse Effect on CIVISTA, and there has not occurred any event that with the
lapse of time or the giving of notice or both would constitute such a default.
4.11. Absence of Certain Changes or Events. Except as set forth in CIVISTA
Disclosure Letter or disclosed in Company Reports filed by the Company with the
Commission prior to the date of this Agreement, since September 30, 1993 to the
date of this Agreement, there has not been any change in the financial
condition, results of operations or business of CIVISTA and the Company
Subsidiaries that either individually or in the aggregate has had a Material
Adverse Effect on CIVISTA.
4.12. Litigation. Except as disclosed in CIVISTA Disclosure Letter or in
Company Reports filed by the Company with the Commission prior to the date of
this Agreement, there is no litigation, action, arbitration or proceeding
pending, or, to the best knowledge of CIVISTA, threatened against or affecting
CIVISTA or any Company Subsidiary which, either individually or in the
aggregate, is having, or insofar as reasonably can be foreseen will have, a
Material Adverse Effect on CIVISTA, nor is there any judgment, decree,
injunction, rule or order of any Governmental Entity or arbitrator, outstanding
against CIVISTA or any Company Subsidiary having, or which, insofar as
reasonably can be foreseen, in the future would have, any such effect.
4.13. Compliance with Laws and Orders. Except as disclosed in CIVISTA
Disclosure Letter or in Company Reports filed by the Company with the Commission
prior to the date of this Agreement, the businesses of CIVISTA and the Company
Subsidiaries are not being conducted, and have not been conducted since
September 30, 1991, in violation of any law, ordinance, regulation, judgment,
order, decree, license or permit of any Governmental Entity (including, without
limitation, zoning ordinances, building codes, and environmental, civil rights,
and occupational health and safety laws and regulations and, in the case of
Company Subsidiaries that are savings and loans or thrifts, all statutes, rules
and regulations pertaining to the conduct of such business), except for possible
violations which individually or in the aggregate do not, and, insofar as
reasonably can be foreseen, in the future will not, have a Material Adverse
Effect on CIVISTA. Except as set forth in CIVISTA Disclosure Letter, no
investigation or review by any Governmental Entity with respect to CIVISTA or
any of the Company Subsidiaries outside the ordinary course of business and not
generally applicable to entities engaged in the same business is pending or, to
the knowledge of CIVISTA,
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threatened, nor has any Governmental Entity indicated an intention to conduct
the same in each case other than those the outcome of which will not have a
Material Adverse Effect on CIVISTA.
4.14. Agreements with Regulators. As of the date of this Agreement, except
as disclosed in CIVISTA Disclosure Letter, neither CIVISTA nor any Company
Subsidiary is a party to any written agreement or memorandum of understanding
with, or a party to any commitment letter or similar undertaking to, or is
subject to any order or directive by, or is a recipient of any extraordinary
supervisory letter from, any Governmental Entity outside the ordinary course of
business and not generally applicable to entities engaged in the same business,
including, without limitation, cease and desist orders of any regulatory
authority, which restricts materially the conduct of its business, or in any
manner relates to its capital adequacy, its credit policies or its management,
nor has CIVISTA been advised by any Governmental Entity that it is contemplating
issuing, requiring, or requesting (or is considering the appropriateness of
issuing, requiring or requesting) any such order, directive, agreement,
memorandum of understanding, extraordinary supervisory letter, commitment letter
or similar undertaking. Except as set forth in CIVISTA Disclosure Letter, there
are no (i) material violations, or (ii) violations with respect to which refunds
or restitutions which are material in amount to CIVISTA and the Company
Subsidiaries taken as a whole may be required, cited in any compliance report to
CIVISTA or any Company Subsidiary as a result of an examination by any
regulatory authority.
4.15. Company Ownership of Stock. Except as disclosed in CIVISTA
Disclosure Letter, as of the date of this Agreement, neither CIVISTA nor, to the
best of its knowledge, any of its affiliates or associates (i) beneficially owns
directly or indirectly, or (ii) are parties to any agreement, arrangement or
commitment for the purpose of acquiring, holding, voting or disposing of, in
each case, shares of FBOH Common Stock (other than shares of FBOH Common Stock
held in a fiduciary, trust, custodial or agency capacity by a subsidiary of
CIVISTA) which in the aggregate, represent 1% or more of the outstanding shares
of FBOH Common Stock.
4.16. Accounting Matters. Neither CIVISTA nor, to the best of its
knowledge, any of its affiliates, has taken or agreed to take any action that
would prevent FBOH from accounting for the business combination to be effected
by the Merger as a "pooling of interests."
4.17. Fees. Except for fees paid and payable to McDonald & Company
Securities, Inc. ("MCDONALD"), neither CIVISTA nor any Company Subsidiary has
paid or become obligated to pay any fee or commission to any broker, finder or
intermediary in connection with the transactions contemplated by this Agreement.
4.18. Company Action. The Board of Directors of CIVISTA (at a meeting duly
called and held) has by the requisite vote (i) determined that the Merger is
advisable and in the best interests of CIVISTA and its stockholders, (ii)
authorized and approved this Agreement, the CIVISTA Stock Purchase Option and
the transactions contemplated hereby and thereby, including the Merger, (iii)
directed that the Merger be submitted for consideration by CIVISTA's
stockholders entitled to vote thereon at the CIVISTA Meeting, and (iv)
authorized and approved the CIVISTA Stock Purchase Option and the Merger in
accordance with Chapter 1704 of the Ohio Revised Code with the result that
Chapter 1704 will not apply to the consummation of the Merger and the
acquisition by FBOH of shares of Common Stock pursuant to the Merger, the
CIVISTA Stock Purchase Option or any of the transactions contemplated by this
Agreement or the CIVISTA Stock Purchase Option. McDonald, CIVISTA's financial
advisor, has provided the Board of Directors of CIVISTA with its opinion that,
as OF the date of such duly called meeting of the Board, the Exchange Ratio is
fair, from a financial point of view, to the stockholders of CIVISTA.
4.19. Vote Required. The affirmative vote of the holders of two-thirds of
the outstanding shares of Common Stock entitled to vote thereon is the only vote
of the holders of any class or series of Company capital stock necessary to
approve this Agreement and the transactions contemplated hereby, unless FBOH has
exercised its rights to acquire the CIVISTA preferred stock under the CIVISTA
Stock Purchase Option.
4.20. Conduct of CIVISTA to Date. Except as disclosed in CIVISTA
Disclosure Letter and in Company Reports filed with the Commission prior to the
date of this Agreement, from and after September 30, 1993, to the date of this
Agreement: (a) CIVISTA and the Company Subsidiaries have carried on their
respective businesses in the ordinary and usual course consistent with their
current practices, (b) CIVISTA
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has not issued or sold any of its capital stock (except shares of Common Stock
issued upon exercise of employee stock options outstanding on or before
September 30, 1993), or any corporate debt securities which would be classified
as long-term debt on the balance sheets of CIVISTA, (c) CIVISTA has not granted
any option for the purchase of its capital stock (other than pursuant to the
CIVISTA Stock Purchase Option), effected any stock split, or otherwise changed
its authorized capitalization, (d) CIVISTA has not declared, set aside, or paid
any dividend or other distribution in respect of its capital stock, or, directly
or indirectly, redeemed or otherwise acquired any of its capital stock, except
regular quarterly cash dividends and a regular "extra" cash dividend, (e)
CIVISTA has neither incurred nor prepaid any corporate debt securities or
instruments which are or would be classified as long-term debt on the balance
sheet of CIVISTA, (f) neither CIVISTA nor any Company Subsidiary has sold,
assigned, transferred, or otherwise disposed of to a third party (i) equity
securities in or issued by any Company Subsidiary, (ii) branch offices of any
Company Subsidiary, (iii) assets constituting any other line of business, or
(iv) any of its other material properties or assets other than for a fair
consideration in the ordinary course of business, (g) neither CIVISTA nor any
Company Subsidiary has purchased or otherwise acquired from a third party equity
securities in or issued by such third party other than in the ordinary course of
business, branch offices of such third party, assets constituting any other line
of business, or any other material properties or assets outside the ordinary
course of its business, (h) neither CIVISTA nor any Company Subsidiary has:
increased the rate of compensation of, or paid any bonus to, any of its
directors, officers, or other employees, except under existing plans and
policies, entered into any new, or amended or supplemented any existing, or
secured, collateralized, or funded any, employment, management, consulting,
deferred compensation, severance, or other similar contract, entered into,
terminated, or substantially modified any Company Employee Plan in respect of
any of its present or former directors, officers, or other employees, or agreed
to do any of the foregoing, (i) neither CIVISTA nor any Company Subsidiary, has
entered into any transaction, contract, lease, agreement or commitment requiring
the approval of the Board of Directors of CIVISTA or any Company Subsidiary, or
amended, modified or terminated any contract, lease or other agreement to which
it is a party in a manner requiring the approval of the Board of Directors of
CIVISTA or any Company Subsidiary, and (j) no Company Subsidiary has entered
into any material transaction, contract, lease, agreement or commitment outside
the ordinary course of business requiring the approval of the Board of Directors
of such Subsidiary or amended, modified or terminated outside the ordinary
course of business any material contract, lease or other agreement to which it
is a party in a manner requiring the approval of the Board of Directors of such
Subsidiary.
4.21. Environmental Matters. For purposes of this Agreement, the following
terms shall have the indicated MEANINGS:
"ENVIRONMENTAL LAW" means any federal, state or local law, statute,
ordinance, rule, regulation, code, license, permit, authorization,
approval, consent, order, judgment, decree, injunction or agreement with
any Governmental Entity relating to (i) the protection, preservation or
restoration of the environment (including, without limitation, air, water
vapor, surface water, ground water, drinking water supply, surface soil,
subsurface soil, plant and animal life or any other natural resource),
and/or (ii) the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or
disposal of Hazardous Substances. The term Environmental Law includes,
without limitation; the Comprehensive Environmental Response, Compensation
and Liability Act, as amended, 42 U.S.C. Section 9601, et seq.; the
Resource Conservation and Recovery Act, as amended, 42 U.S.C. Section 6901,
et seq.; the Clean Air Act, as amended, 42 U.S.C. Section 7401, et seq.;
the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section 1251
et seq.; the Toxic Substances Control Act, as amended, 125 U.S.C. Section
9601, et seq.; the Emergency Planning and Community Right to Know Act, 42
U.S.C. Section 11001, et seq.; the Safe Drinking Water Act, 42 U.S.C.
Section 300f, et seq.; all comparable state and local laws; and any common
law (including without limitation common law that may impose strict
liability) that may impose liability or obligations for injuries or damages
due to, or threatened as a result of, the presence of or exposure to any
Hazardous Substance.
"HAZARDOUS SUBSTANCE" means any substance presently listed, defined,
designated or classified as hazardous, toxic, radioactive or dangerous, or
otherwise regulated, under any Environmental Law, whether by type or by
quantity, including any material containing any such substance as a
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component. Hazardous Substances include, without limitation, petroleum or
any derivative or by-product thereof, asbestos, radioactive material, and
polychlorinated biphenyls.
"LOAN PORTFOLIO PROPERTIES AND OTHER PROPERTIES OWNED" means those
properties owned, operated or managed (including those held in trust) by
CIVISTA, as the case may be, or any of their subsidiaries.
Except as set forth in CIVISTA Disclosure Letter, to the best of CIVISTA's
knowledge: (i) neither CIVISTA nor any of the Company Subsidiaries has been or
is in violation of or liable under any Environmental Law, except for any such
violations or liabilities which would not reasonably be expected, individually
or in the aggregate, to have a Material Adverse Effect on CIVISTA; and (ii) none
of the Loan Portfolio Properties and Other Properties Owned by CIVISTA or any of
the Company Subsidiaries has been since such properties have been owned,
operated or managed by CIVISTA or any of the Company Subsidiaries, or is in
violation of or liable under any Environmental Law, except for any such
violations or liabilities which, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on CIVISTA. Except as
set forth in CIVISTA Disclosure Letter, there are no actions, suits, demands,
notices, claims, investigations or proceedings pending, or to the best of
CIVISTA's knowledge threatened, relating to the liability of the Loan Portfolio
Properties and Other Properties Owned by CIVISTA or the Company Subsidiaries
under any Environmental Law, including, without limitation, any notices, demand
letters or requests for information from any federal, state or local
environmental agency relating to any such liabilities under or violations of
Environmental Law.
5. COVENANTS
5.1. Acquisition Proposals and Negotiations. Each of CIVISTA and the
Company Subsidiaries shall not, directly or indirectly, and shall instruct and
otherwise use its diligent efforts to cause their respective officers,
directors, employees, agents and advisors not to, directly or indirectly,
solicit or initiate any proposals or offers from any person, or discuss or
negotiate with any such person, relating to any acquisition or purchase of all
or a material amount of the assets of, or any equity securities of, or any
merger, consolidation or business combination with, CIVISTA or any of the
Company Subsidiaries (such transactions are referred to herein as "Acquisition
Transactions"), provided, however, that nothing contained in this Section shall
prohibit (i) CIVISTA or any Company Subsidiary, as the case may be, from
furnishing information to, or entering into discussions or negotiations with,
any person or entity that makes an unsolicited proposal of an Acquisition
Transaction if and to the extent that (a) the Board of Directors of CIVISTA,
after consultation with and based upon the written advice of Squire, Sanders &
Dempsey, determines in good faith that such action is required for the directors
of CIVISTA to fulfill their fiduciary duties and obligations to the CIVISTA
stockholders and other constituencies under Ohio law, taking into consideration
the bidding procedures engaged in in connection with the transactions
contemplated hereby and (b) prior to furnishing such information to, or entering
into discussions or negotiations with, such person or entity, CIVISTA provides
immediate written notice to FBOH to the effect that it is furnishing information
to, or entering into discussions or negotiations with, such a person or entity,
or (ii) the Board of Directors of CIVISTA from failing to make, withdrawing or
modifying its recommendation referred to in Section 5.14 following receipt of a
proposal for an Acquisition Transaction if the Board of Directors of CIVISTA,
after consultation with and based upon the written advice of Squire, Sanders &
Dempsey, determines in good faith that such action is required for the directors
of CIVISTA to fulfill their fiduciary duties and obligations to the CIVISTA
stockholders and other constituencies under Ohio law, taking into consideration
the bidding procedures engaged in in connection with the transactions
contemplated hereby.
5.2. Interim Operations of CIVISTA. During the period from the date of
this Agreement to the Effective Time, except as specifically contemplated by
this Agreement, as required by law, as set forth in CIVISTA Disclosure Letter,
or as otherwise approved in writing by FBOH (which shall not be unreasonably
withheld):
5.2.1. Conduct of Business. CIVISTA shall, and shall cause each of
the Company Subsidiaries to, conduct their respective businesses only in,
and not take any action except in the ordinary course of business
substantially consistent with current practices (which practices include
any workout arrange-
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ments for troubled loans and real estate development assets). CIVISTA shall
use all diligent efforts to (i) maintain and preserve intact the business
organization of CIVISTA and each of the Company Subsidiaries, keep
available the services of its and their present officers and employees, and
keep the branch operations fully staffed with competent employees, (ii)
preserve the goodwill of those having business relationships with CIVISTA
or the Company Subsidiaries, (iii) maintain and keep its properties in as
good repair and condition as at present, except for depreciation due to
ordinary wear and tear, (iv) attempt to resolve such loans which FBOH has
identified in writing to CIVISTA as "troubled," in a workout arrangement
which conditions and terms shall be satisfactory to FBOH, (v) keep in full
force and effect insurance and bonds comparable in amount and scope of
coverage to that now maintained by it, provided however, in the event that
any such insurance (including, without limitation, directors' and officers'
liability insurance) is cancelled or not renewable at its expiration at
current or standard rates, CIVISTA shall consult with FBOH in order to
determine whether to exercise its right to extend the discovery period and
in evaluating available alternatives to replace the current insurance, (vi)
perform in all material respects all obligations required to be performed
by each of CIVISTA and each of the Company Subsidiaries under all material
contracts, leases and documents relating to or affecting its assets,
properties, and business, and (vii) comply with and perform in all material
respects all obligations and duties imposed upon it by all federal, state,
municipal, and local laws, and all rules, regulations and orders imposed by
federal, state, municipal or local governmental agencies.
5.2.2. Negative Covenants. CIVISTA shall not and shall not permit any
of the Company Subsidiaries to make any change or amendment to, or to
repeal, their respective articles of incorporation or codes of regulations
(or comparable governing instruments). Neither CIVISTA nor any Company
Subsidiary shall after the date of this Agreement enter into any loan or
credit commitment (including standby letters of credit) to, or invest (as a
venture capital or similar investment) or agree to invest (as a venture
capital or similar investment) in, any person or entity if such loan,
commitment or investment, would exceed $250,000 as a residential loan or
investment, or $500,000 as a commercial loan, without first consulting with
FBOH; provided, however, that nothing in this paragraph shall prohibit
CIVISTA or any Company Subsidiary from honoring any contractual obligation
in existence on the date of this Agreement. Neither CIVISTA nor any Company
Subsidiary shall after the date of this Agreement enter into any
participatory agreements, loans, commitments or investments involving
collateral outside of Ohio, without first consulting with FBOH.
Neither CIVISTA nor any Company Subsidiary shall sell, assign,
transfer or otherwise dispose of to a third party, (i) branch offices of
any Company Subsidiary, or (ii) any of its material properties or assets.
Neither CIVISTA nor any Company Subsidiary shall purchase or otherwise
acquire from a third party, branch offices of such third party, assets
constituting any other line of business, or any other material properties
or assets outside the ordinary course of its business. Neither CIVISTA nor
any Company Subsidiary shall enter into any transaction, contract, lease,
agreement or commitment (or any amendment to any transaction, contract,
lease, agreement or commitment) outside of the ordinary course of business
which is material to CIVISTA and the Company Subsidiaries taken as a whole.
5.2.3. Capital Stock. CIVISTA shall not, and shall not permit any of
the Company Subsidiaries to, issue or sell any shares of capital stock or
any other securities of any of them (other than pursuant to Company Stock
Options outstanding on the date of this Agreement or the exercise by FBOH
of its rights under the CIVISTA Stock Purchase Option) or issue any
securities convertible into or exchangeable for, or options, warrants to
purchase, scrip, rights to subscribe for, calls or commitments of any
character whatsoever relating to, or enter into any contract, commitment or
arrangement with respect to the issuance of, any shares of capital stock or
any other securities of any of them or enter into any arrangement, contract
or commitment with respect to the purchase or voting of shares of their
capital stock, or adjust, split, combine or reclassify any of their capital
stock or other securities or make any other changes in their capital
structures. Neither CIVISTA nor any Company Subsidiary shall acquire
beneficial ownership of more than 5% of any class of equity securities or
any similar interests of any corporation, bank, business, trust,
association or similar organization.
5.2.4. Dividends. CIVISTA shall not and shall not permit any of the
Company Subsidiaries to declare, set aside, pay or make any dividend or
other distribution or payment (whether in cash, stock or
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property) with respect to, or purchase or redeem, any shares of the capital
stock of any of them other than (a) CIVISTA's regular quarterly cash
dividends in the amount of $.10 per share and its regular "extra" cash
dividend in the amount of $.25 per share (to the extent each is legally
permitted), and (b) dividends paid (to the extent legally permitted) by any
Company Subsidiary to another Company Subsidiary or CIVISTA with respect to
such Company Subsidiary's capital stock. From the date of this Agreement to
the earlier of the Effective Time or the termination of this Agreement,
CIVISTA shall not, without the prior written consent of FBOH, make any
changes in its practice of setting dividend record or dividend payment
dates.
5.2.5. Employee Plans. Except as is necessary to comply with the
Code, CIVISTA shall not, and shall not permit any of Company Subsidiaries
to: adopt or amend any bonus, profit sharing, compensation, severance,
termination, stock option, pension, retirement, deferred compensation,
employment or other employee benefit agreements, trusts, plans, funds or
other arrangements for the benefit or welfare of any present or former
director, officer or employee of CIVISTA or any Company Subsidiary;
increase the compensation or fringe benefits of any present or former
director, officer or employee, including the Senior Officers (as
hereinafter defined); pay any bonus, compensation or benefit not required
by any existing plan or arrangement (including, without limitation, the
granting of stock options or stock rights); take any action or grant any
benefit not required under the terms of any existing agreements, trusts,
plans, funds or other such arrangements; or enter into any contract,
agreement, commitment or arrangement to do any of the foregoing.
Notwithstanding the restrictions contained in this Section, CIVISTA or the
Company Subsidiaries may grant individual merit increases to the non-Senior
Officer employees in accordance with past practices up to a total of 5% of
the total annual compensation of all employees, excluding from such total
the aggregate of the compensation for the employees of CIVISTA and of the
Company Subsidiaries who are parties to a Severance Agreement (the "SENIOR
OFFICERS"); and may pay bonuses to employees, including Senior Officers,
but only to the extent the aggregate of such bonuses does not exceed the
aggregate of bonuses paid for the 1993 fiscal year plus an amount equal to
$42,000.
5.2.6. CONFORMING ACCOUNTING AND RESERVE POLICIES; RESTRUCTURING
EXPENSES.
(a) Notwithstanding that CIVISTA believes that it has established
all reserves and taken all provisions for possible loan losses required
by generally accepted accounting principles and applicable laws, rules
and regulations, CIVISTA recognizes that FBOH has adopted different
loan, accrual and reserve policies (including loan classifications and
levels of reserves for possible loan losses). From and after the date of
this Agreement to the Effective Time, CIVISTA and FBOH shall consult and
cooperate with each other with respect to conforming, as specified in a
notice from FBOH to CIVISTA, based upon such consultation, CIVISTA's
loan, accrual and reserve policies to those policies of FBOH.
(b) In addition, from and after the date of this Agreement to the
Effective Time, CIVISTA and FBOH shall consult and cooperate with each
other with respect to determining, as specified in a notice from FBOH to
CIVISTA, based upon such consultation, appropriate accruals, reserves
and charges to establish and take in respect of excess facilities and
equipment capacity, restructuring costs, severance costs, litigation
matters, write-off or write-down of various assets and other appropriate
accounting adjustments taking into account the Surviving Corporation's
business plan following the Merger.
(c) CIVISTA and FBOH shall consult and cooperate with each other
with respect to determining, as specified in a notice from FBOH to
CIVISTA, based upon such consultation, the amount and the timing for
recognizing for financial accounting purposes the expenses of the Merger
and the restructuring charges related to or to be incurred in connection
with the Merger.
(d) At the request of FBOH, and in an amount and on a basis
satisfactory to CIVISTA, CIVISTA shall promptly establish and take such
reserves and accruals as FBOH shall request to conform, on a mutually
satisfactory basis, CIVISTA's loan, accrual and reserve policies to
FBOH's policies, shall establish and take such accruals, reserves and
charges in order to implement such policies in respect of excess
facilities and equipment capacity, severance costs, litigation matters,
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write-off or write-down of various assets and other appropriate
accounting adjustments, and to recognize for financial accounting
purposes such expenses of the Merger and restructuring charges related
to or to be incurred in connection with the Merger; provided, however,
that it is the objective of FBOH and CIVISTA that such reserves,
accruals and charges be taken on or before December 31, 1994, but in no
event later than immediately prior to the Closing; and provided,
further, that CIVISTA shall not be obligated to take any such action
pursuant to this Section 5.2.6 unless and until (i) FBOH specifies its
request in a writing delivered to CIVISTA, (ii) all conditions to the
obligations of CIVISTA and FBOH to consummate the Merger set forth in
Sections 6.1 through 6.3 have been waived or satisfied by the
appropriate party, and (iii) such reserves, accruals and charges conform
with generally accepted accounting principles.
5.3. Interim Operations of FBOH. During the period from the date of this
Agreement to the Effective Time, except as specifically contemplated by this
Agreement, as required by law, or as otherwise approved in writing by CIVISTA
(which shall not be unreasonably withheld) FBOH shall, and shall cause each of
the FBOH Subsidiaries to, conduct their respective businesses in such a manner
so as not to materially interfere with the ability to consummate the Merger,
delay the Effective Time or have a Material Adverse Effect upon the transactions
contemplated by the Agreement.
5.4. EMPLOYMENT MATTERS.
(a) As of the Effective Time, FBOH will assume the obligations of the
CIVISTA and the Company Subsidiaries, as applicable, Severance Agreements, as
amended as of August 10, 1994, ("SEVERANCE AGREEMENTS" or "SEVERANCE AGREEMENT")
to the extent such obligations can be assumed or benefits thereunder provided as
a matter of law. Each Severance Agreement has been amended, which amendments are
conditioned upon the Merger becoming effective, to delete in its entirety
Section 3(e) which provides for a cash payment in lieu of the right of the
holder to exercise CIVISTA Stock Options.
(b) It is FBOH's intent, to the extent possible, to maintain the current
employee base of CIVISTA and Citizens. After the Effective Time, FBOH will cause
each of its subsidiaries to use its diligent efforts to minimize terminations of
employees of CIVISTA and Citizens and to give priority to any displaced
employees of CIVISTA and Citizens equal to that given to employees of FBOH and
its subsidiaries in filling positions within FBOH and its subsidiaries. It is
FBOH's intent, to the extent possible, to retain the employees of each of the
Non-banking Subsidiaries during the pendency of the disposition of such
subsidiary or its assets (except for any termination for cause).
FBOH agrees to pay as separation monies to employees of CIVISTA and
Citizens, other than the persons with Severance Agreements, in consideration for
a standard release of FBOH regarding matters related to employment and
termination of employment, who either at Closing do not become employees of FBOH
or its subsidiaries or to persons who become employees of FBOH or its
subsidiaries but whose employment is terminated during the 180-day period after
the Effective Time (except if such termination is for cause). The separation
monies will be calculated as follows: (i) all such employees shall receive a
minimum of four weeks salary (net of required taxes), (ii) employees with more
than two years of service will receive two weeks of salary (net of required
taxes) for each full year of service up to a maximum severance benefit equal to
26 weeks of salary. Such employees will also be entitled to any other benefits,
if any, required by law. In lieu of the above separation amounts, employees of
the Non-banking Subsidiaries shall receive separation benefits as provided in
the disposition document for their subsidiary or its assets.
FBOH is not required to hire any employees of CIVISTA or the Company
Subsidiaries, but may if it so desires. All persons employed by FBOH and its
subsidiaries as of the Effective Time will remain "at will" employees, meaning
that their employment can be terminated for any or no reason. Notwithstanding
anything contained herein to the contrary, no third party shall have a right to
enforce the provisions of this Section 5.4(b) or assert any claim hereunder.
(c) Following the Effective Time, the employee benefit programs to be
available and applicable to the persons who were employees of CIVISTA and the
Company Subsidiaries, and who become employees of FBOH and/or its subsidiaries,
are as follows:
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(i) Defined Benefit Retirement and Pension Plans. At such time on or
after the Effective Time as FBOH shall deem appropriate, FBOH will either
(a) cause the merger of the CIVISTA pension plan into the FBOH defined
benefit plan, in which case (i) each CIVISTA employee shall be credited
with the service for eligibility and vesting purposes (but not for benefit
accrual purposes) with which he was credited under the CIVISTA pension plan
as of the date of such merger, (ii) each participant in the CIVISTA pension
plan shall be entitled to his benefit accrued under the CIVISTA plan as of
the date of such merger, but only to the extent such participant is
otherwise eligible therefor under the terms of the FBOH defined benefit
plan, and (iii) each CIVISTA employee who satisfies the age and service
eligibility requirements of the FBOH defined benefit plan shall be eligible
to participate in the FBOH defined benefit plan and accrue benefits
thereunder on and after the date of such merger in accordance with the
provisions thereof; or (b) terminate the CIVISTA pension plan and provide
benefits in accordance with the terms thereof, and extend the FBOH defined
benefit plan to CIVISTA employees as of the effective date of the CIVISTA
pension plan termination, in which case such CIVISTA employees shall be
credited with service for eligibility and vesting purposes (but not for
benefit accrual purposes) under the FBOH defined benefit plan for periods
of their CIVISTA employment.
(ii) Savings Plans. CIVISTA does not have in effect any savings or
similar type plan for its employees. FBOH maintains the First
Bancorporation of Ohio and Subsidiaries Employees' Salary Savings
Retirement Plan ("FBOH 401K Plan"). At the Effective Time, FBOH will credit
the CIVISTA employees who become employees of FBOH or any of its current
subsidiaries, for purposes of the FBOH 401K Plan, with all service with
CIVISTA or any of the Company Subsidiaries for purposes of determining
their eligibility to participate in such plan and the vested portion of
their respective accrued benefits under such plan.
(iii) Health Care Plans. At such time on or after the Effective Time
as FBOH shall deem appropriate, FBOH and its subsidiaries will provide
CIVISTA employees hired by FBOH with such coverage under the FBOH health
care plan as they then provide their employees, with all service with
CIVISTA or any of the Company Subsidiaries credited for purposes of
determining such employee's eligibility to participate in such plan. No
benefits currently provided CIVISTA or the Company Subsidiaries employees,
which exceed those provided by FBOH and its subsidiaries, will be
grandfathered or provided, except if required by law. The employees of the
Non-banking Subsidiaries will receive the same benefits they receive as of
the date of this Agreement. FBOH will assume the existing CIVISTA and the
Company Subsidiaries retiree health care benefit plan at the Effective
Time, pursuant to the terms and conditions of such plan as of the date of
this Agreement, FBOH, however, retains the existing rights to amend or
terminate such plan which have been reserved by the plan sponsor in the
plan document.
(iv) SERP Plan. CIVISTA has adopted and maintains The CIVISTA
Corporation Supplemental Employee Retirement Plan ("SERP PLAN") for a
limited number of employees. CIVISTA agrees that as of the date of this
Agreement it will not amend or make any changes to the terms or conditions
of such SERP Plan. As of the Effective Time, accruals under the SERP Plan
shall cease, participants shall be vested in their accrued benefits as of
such date and FBOH agrees to assume the liabilities under the SERP Plan as
of such date.
(v) Other Benefit Plans. At such time on or after the Effective Time
as FBOH shall deem appropriate, FBOH and its subsidiaries will provide
former CIVISTA employees with such coverage under the FBOH benefit plans
and programs as are generally provided to all employees of FBOH and its
Subsidiaries. All service with CIVISTA or any of the Company Subsidiaries
shall be credited for purposes of determining a former CIVISTA employee's
eligibility to participate in such other benefit plans. No benefits
currently provided CIVISTA or the Company Subsidiaries employees which
exceed those provided by FBOH and its subsidiaries will be grandfathered or
provided, except if required by law, unless otherwise specifically agreed
to by FBOH in writing.
5.5. Access, Information and Confidentiality. Upon reasonable notice,
CIVISTA and each of the Company Subsidiaries shall afford to FBOH and its
representatives (including, without limitation, directors, officers and
employees of FBOH, its counsel, accountants, environmental consultants and other
professionals
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retained by FBOH) full access during normal business hours throughout the period
prior to the Effective Time to the books, contracts, records (including, without
limitation, tax returns and work papers of independent auditors), shareholder
and customer information, properties, personnel and such other information and
documents of CIVISTA and each of the Company Subsidiaries. FBOH shall have a
right with the prior notice to CIVISTA to have environmental assessments
conducted on any properties owned, managed or controlled by CIVISTA and the
Company Subsidiaries. CIVISTA shall not be required to provide access to any
such item or information if the providing of such access (i) would be reasonably
likely to result in the loss or impairment of any privilege with respect to such
information, or (ii) would be precluded by any law, ordinance, regulation,
judgment, order, decree, license or permit of any Governmental Entity.
All information furnished by one party to another party in connection with
this Agreement and the transactions contemplated hereby which is regarded by
such furnishing party as confidential will be kept confidential by such other
party and its representatives (including, without limitation, directors,
officers and employees, its counsel, accountants and other professionals
retained by such party) and will be used only in connection with this Agreement
and the transactions contemplated hereby, and not in such party's business or by
its directors, officers and employees, its counsel, accountants and other
professionals retained by such party if the Merger is not consummated. Nothing
contained in this Section shall restrict or prohibit CIVISTA or FBOH from
disclosing information in any document filed with the Commission, FRB, OCC, OTS,
the Division and other governmental authorities and bodies nor shall it in any
way restrict FBOH's right to exercise the CIVISTA Stock Purchase Option, and so
long as this Agreement has not been terminated pursuant to Article 7 hereof,
FBOH may, notwithstanding this confidentiality provision, disclose such
information as it deems necessary or advisable in connection with explaining or
providing background information to security analysts and others concerning the
transactions contemplated by this Agreement, except that any such information
dealing with the areas of individual employees, their future employment,
reserves established for specific loans, matters related to litigation and
CIVISTA's business strategies, may only be disclosed with the prior approval of
CIVISTA, which approval shall not be unreasonably withheld. It is the parties'
intent to provide such analysts with accurate information regarding the
transaction in a light favorable to completion of the transactions contemplated
by this Agreement.
5.6. Certain Filings, Consents and Arrangements, Divestitures. FBOH and
CIVISTA shall (a) promptly file all reports and applications required to be
filed with the Commission, the FRB and such other regulatory authorities (the
"REGULATORY AUTHORITIES") as may have jurisdiction for such approvals as may be
required to be obtained from such regulatory authorities in order to carry out
the transactions contemplated by this Agreement as soon as practicable between
the date of this Agreement and the Effective Time and each FBOH Subsidiary or
Company Subsidiary that is a bank or savings bank shall also file all reports
required to be filed with the FRB, the OCC, the OTS and the Division with
respect to the Merger and the other transactions contemplated by this Agreement,
(b) cooperate with one another (i) in promptly determining whether any other
filings are required to be made or consents, approvals, permits or
authorizations are required to be obtained under any other federal, state or
foreign law or regulation, and (ii) in promptly making any such filings,
furnishing information required in connection therewith and seeking timely to
obtain any such consents, approvals, permits or authorizations, and (c) deliver
to the other party to this Agreement copies of all such applications and reports
promptly after they are filed. In no event, however, shall either party hereto
be liable for any untrue statement of a material fact or omission to state a
material fact in any filing made with any Governmental Entity pursuant to this
Section made in reliance upon, and in conformity with, written information
concerning the other party hereto furnished by such other party specifically for
use in such filing. Each party hereto shall advise the other party hereto
promptly of the occurrence of any event which makes untrue any statement of a
material fact contained in any such filing or any amendment or supplement
thereto or that requires the making of a change in any such filing or any
amendment or supplement thereto in order to make any material statement therein
not misleading.
Between the date of this Agreement and the Effective Time, CIVISTA and FBOH
agree to cooperate in a review of the possible divestiture of all or some of the
Non-banking Subsidiaries. In the event CIVISTA and FBOH determine to divest one
or more of the Non-banking Subsidiaries, FBOH will fully cooperate with CIVISTA
or the Company Subsidiaries in arranging these divestitures, and in conducting
any bidding, due diligence or other process established by CIVISTA to accomplish
the divestitures. CIVISTA agrees to enter,
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or to cause the Company Subsidiaries to enter, into binding agreements,
acceptable to CIVISTA and FBOH, to divest the Non-banking Subsidiaries, except
that, the obligation of CIVISTA or the Company Subsidiary to consummate the
divestiture may be subject to the condition that the Merger be consummated.
CIVISTA and FBOH agree to cooperate in obtaining any regulatory approvals
required for the approval of the divestitures. Notwithstanding anything to the
contrary contained in this Agreement, (i) the representations and warranties of
CIVISTA in this Agreement shall not be deemed to be untrue or breached, (ii)
CIVISTA shall not be deemed to have failed to perform any covenant or obligation
contained in this Agreement, and (iii) no condition to FBOH's obligation to
effect the Merger shall be deemed not to have been satisfied, by or as a result
of any divestitures or other acts consummated pursuant to this second paragraph
of Section 5.6.
5.7. Takeover Statutes and Provisions. CIVISTA shall take all necessary
steps to (i) exempt CIVISTA, this Agreement, the CIVISTA Stock Purchase Option
and the Merger from the requirements of any state takeover law (including
without limitation, statutes relating to business combinations, control share
acquisitions and merger moratoriums) and from any provisions under its Corporate
Governance Documents, as applicable, by action of CIVISTA's Board of Directors
or otherwise, and (ii) assist in any challenge by FBOH to the applicability to
the Merger of any state takeover law.
5.8. Indemnification and Insurance. Except as may be limited by applicable
law, FBOH hereby agrees to assume and honor the terms of the indemnification
provisions of Article IV of CIVISTA's Code of Regulations, a copy of which is
attached hereto as Exhibit 5.8, which are provided to CIVISTA's directors,
officers and employees as contractual rights, for matters occurring prior to the
Effective Time. Moreover, indemnification of directors, officers and employees
of CIVISTA and Company Subsidiaries following the Effective Time will be
provided to the same extent it is provided to other persons working in similar
capacities for FBOH following the Closing. This Section 5.8 shall be construed
as an agreement, as to which the potential indemnitees are intended to be
third-party beneficiaries.
For a period of at least two years following the Effective Time, FBOH shall
maintain in effect the current insurance policies maintained by CIVISTA (or
substitute policies with substantially the same coverage and terms) covering
directors' and officers' liability with respect to claims which arise from
factors or events which occurred before the Effective Time, except that FBOH's
obligation under this paragraph for the second year following the Effective Time
will be based upon its ability to obtain such insurance at a commercially
reasonable cost. CIVISTA shall notify FBOH prior to purchasing or continuing any
insurance to cover the matters contained herein, provided, however, it is the
intent of FBOH that tail coverage will be purchased if such is available. To the
extent insurance is available under any of the provisions in this Section to
cover such claims and costs, such insurance shall be the primary source of
funding these obligations.
5.9. Additional Agreements. Subject to the terms and conditions herein
provided, each of the parties hereto agrees to use its diligent efforts to take
promptly, or cause to be taken, all actions necessary, proper or advisable under
applicable laws to consummate the transactions contemplated by this Agreement.
In addition, without limitation, each party shall from time to time execute such
certificates as to factual matters necessary, proper or advisable in order to
receive the opinions contemplated by Article 6 of this Agreement.
If, at any time after the Effective Time, the Surviving Corporation
considers or is advised that any further deeds, bills of sale, assignments,
assurances or any other actions or things are necessary or desirable to vest,
perfect or confirm of record its right, title or interest in and to any of the
rights, properties or assets of CIVISTA acquired or to be acquired by the
Surviving Corporation, CIVISTA and its officers and directors shall be deemed to
have granted to the Surviving Corporation an irrevocable power of attorney to
execute and deliver all such deeds, bills of sale, assignments and assurances
and to take and do all such other actions and things as may be necessary or
desirable to vest, perfect or confirm any and all right, title and interest in
and to such rights, properties or assets in the Surviving Corporation.
5.10. Compliance with Antitrust Laws. Each of FBOH and CIVISTA shall use
its diligent efforts to resolve such objections, if any, which may be asserted
with respect to the Merger by the FRB, the Department of Justice, or any other
Governmental Entity (including, without limitation, objections under any
antitrust laws and any applicable laws or regulations). In the event a suit is
threatened or instituted challenging the Merger as violative of the antitrust
laws, each of FBOH and CIVISTA shall use its diligent efforts to avoid the
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filing of, resist or resolve such suit. FBOH and CIVISTA shall use their
diligent efforts to take such action as may be required: (a) by the FRB, the
Department of Justice, or any other Governmental Entity in order to resolve such
objections as any of them may have to the Merger, or (b) by any federal or state
court of the United States, in any suit brought by a private party or
Governmental Entity challenging the Merger as violative of any antitrust laws,
in order to avoid the entry of, or to effect the dissolution of, any injunction,
temporary restraining order or other order which has the effect of preventing
the consummation of the Merger.
5.11. Publicity. The initial press release announcing this Agreement shall
be a joint press release in a form mutually agreed upon by the parties and
thereafter CIVISTA and FBOH shall consult with each other and provide a written
copy to each other prior to issuing any press releases, or otherwise making
public statements, with respect to the transactions contemplated hereby and in
making any filings with any Governmental Entity.
5.12. REGISTRATION STATEMENT, JOINT PROXY STATEMENT AND COMFORT LETTERS.
(a) FBOH will as soon as practicable prepare and file with the Commission
the Registration Statement, and any required amendments thereto, will use all
reasonable efforts to have the Registration Statement declared effective by the
Commission as promptly as practicable and will maintain the effectiveness of
such Registration Statement. FBOH will also take any action required to be taken
under any applicable state blue sky or securities laws in connection with the
issuance of the FBOH Common Stock pursuant to the Merger. CIVISTA shall promptly
furnish FBOH all information concerning CIVISTA, the Company Subsidiaries, and
the holders of its capital stock and shall promptly take any action as FBOH may
reasonably request in connection with any such action.
FBOH, with the direct assistance of CIVISTA, will as soon as practicable
prepare and file the Proxy Statement with the Commission, and take such other
action so that they may promptly thereafter mail the Proxy Statement to their
stockholders. FBOH and CIVISTA shall cooperate and consult with each other in
the preparation of the Proxy Statement and CIVISTA shall promptly furnish FBOH
all information concerning CIVISTA, the Company Subsidiaries, and the holders of
its capital stock, and shall promptly take any action as FBOH may reasonably
request in connection with any such action.
(b) Each of FBOH and CIVISTA will cause its respective independent auditors
to issue a letter addressed to both FBOH and CIVISTA, within three business days
prior to the effectiveness of the Registration Statement and also as of Closing,
stating among other things, the following: (i) such accountants are independent
public accountants within the meaning of the Securities Act and the rules and
regulations promulgated thereunder; (ii) in the opinion of such accountants, the
financial statements included in the Registration Statement and reported on
therein by such accountants comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and the Rules and
Regulations promulgated thereunder; (iii) on the basis of specified limited
procedures (which procedures do not constitute an examination in accordance with
generally accepted auditing standards), including a reading of the latest
available unaudited financial statements, inquiries of officials responsible for
financial and accounting matters, nothing came to their attention which caused
them to believe that, during the period subsequent to December 31, 1993 for FBOH
and September 30, 1993 for CIVISTA, to a specified date not more than three
business days prior to the effective date of the Registration Statement and to a
specified date not more than three business days prior to Closing, there was any
change in the shares of its capital stock or long-term debt, if any, (other than
changes due to payments in accordance with the terms of such debt, or in the
event of any such change in long-term debt, the amount thereof) or any decrease
(increase) in the total or per share amount of its net income (net loss) as
compared with the corresponding period in the preceding year, except in all
instances for changes or decreases (increases) which the Registration Statement
discloses have occurred or may occur; (iv) such accountants have read the other
data included in the Registration Statement with respect to the financial
condition and operations of their respective clients and they find such data to
be correctly computed and in agreement with their respective books and records
of FBOH and CIVISTA.
(c) FBOH shall be responsible for all expenses incident to the obtaining of
the requisite regulatory approvals. Without limiting the generality of the
foregoing, the expenses to be assumed by FBOH shall include (i) all expenses for
its own legal counsel and other expenses incurred by FBOH incident to the
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preparation and filing of applications on its behalf and on behalf of CIVISTA
and other requests for regulatory consents and approvals with the appropriate
regulatory agencies as contemplated by this Agreement; and (ii) all expenses for
its own legal counsel and all other expenses incurred in connection with the
registration of the FBOH Common Stock under the federal and state securities
laws. The expenses to be assumed by FBOH shall not include any legal, accounting
or other expenses incurred by CIVISTA in connection with its own corporate
proceedings or incident to the transactions contemplated by this Agreement.
5.13. AFFILIATES COMPLIANCE WITH THE SECURITIES ACT.
(a) Within 30 days after the date of this Agreement, each of CIVISTA and
FBOH shall identify to the other party all persons whom it reasonably believes
are its "affiliates" as that term is used in paragraphs (c) and (d) of Rule 145
under the Securities Act and/or Accounting Series, Releases 130 and 135, as
amended, of the Commission (the "AFFILIATES"). Thereafter and until the
Effective Time, each of CIVISTA and FBOH shall identify to the other party each
additional person whom it reasonably believes to have thereafter become its
Affiliate.
(b) Each of CIVISTA and FBOH shall use its diligent efforts to cause each
person who is identified as an Affiliate pursuant to clause (a) above to deliver
to FBOH not later than the date on which the Merger is approved, a written
agreement, substantially in the form of Exhibit 5.13(b)-1 (in the case of
Affiliates of CIVISTA) and Exhibit 5.13(b)-2 (in the case of Affiliates of
FBOH). Because the Merger is intended to qualify for pooling of interests
accounting treatment, the shares of FBOH Common Stock received by such
Affiliates in the Merger shall not be transferable until such time as financial
results covering at least 30 days of post-Merger operations have been published
within the meaning of Section 201.01 of the Commission's Codification of
Financial Reporting Policies, regardless of whether each such Affiliate has
provided the written agreement referred to in this Section, and the certificates
representing such shares will bear an appropriate restrictive legend.
5.14. STOCKHOLDERS' MEETINGS.
(a) CIVISTA shall take all action necessary, in accordance with applicable
law and its Corporate Governance Documents to convene a special meeting of the
holders of Common Stock (the "CIVISTA MEETING") as promptly as practicable for
the purpose of considering and taking action upon this Agreement and the
transactions contemplated herein. Subject to the fiduciary obligations and
duties of the Board of Directors of CIVISTA under Ohio law and to the provisions
of Section 5.1 of this Agreement, the Board of Directors of CIVISTA shall
recommend that the holders of the Common Stock vote in favor of and approve the
Merger and adopt this Agreement at the CIVISTA Meeting.
(b) FBOH shall take all action necessary, in accordance with applicable law
and its Amended Articles of Incorporation and Regulations, to convene a special
meeting of the holders of FBOH Common Stock (the "FBOH MEETING") as promptly as
practicable for the purpose of considering and taking action upon this
Agreement. The Board of Directors of FBOH shall recommend that the holders of
FBOH Common Stock vote in favor of and approve the Merger and this Agreement and
such other matters as deemed necessary or desirable. At the Effective Time, the
FBOH Board will appoint an individual recommended by CIVISTA, subject to the
approval of the FBOH Board of Directors, to the FBOH Board of Directors.
5.15. Pooling and Tax-Free Reorganization Treatment. Neither FBOH nor
CIVISTA shall intentionally take or cause to be taken any action, whether before
or after the Effective Time, which would disqualify the Merger as a "pooling of
interests" for accounting purposes or as a "reorganization" within the meaning
of Section 368(a) of the Code, other than FBOH's exercise of its rights under
the CIVISTA Stock Purchase Option.
5.16. Mergers of Subsidiaries. The Board of Directors of FBOH intends,
contemporaneously with the merger of CIVISTA with and into FBOH, to merge
Citizens with and into a wholly owned subsidiary of FBOH, currently determined
to be The First National Bank in Massillon, with the surviving entity utilizing
the name "Citizens" and to also appoint the current directors of CIVISTA to the
board of directors of the
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surviving subsidiary, grandfathered for a minimum of one year consistent with
the board of director policies and practices of the other FBOH subsidiaries
thereafter.
CIVISTA shall cause such of the Company Subsidiaries as FBOH may request to
enter into definitive merger or consolidation agreements with FBOH Subsidiaries,
providing for the merger or consolidation of the Company Subsidiaries with or
into any such FBOH Subsidiaries; provided, however, that, in all cases, the
obligation of CIVISTA to cause such merger or consolidation shall be subject to
the condition that the Merger be simultaneously consummated; and provided
further, notwithstanding anything to the contrary in this Agreement, (i) the
representations and warranties of CIVISTA in this Agreement shall not be deemed
to be untrue or breached, (ii) CIVISTA shall not be deemed to have failed to
perform any covenant or obligation contained in this Agreement, and (iii) no
condition to FBOH's obligation to effect the Merger shall be deemed not to have
been satisfied by or as a result of any merger or consolidation consummated
pursuant to this Section. CIVISTA shall cause the Company Subsidiaries to fully
cooperate with FBOH in consummating these mergers or consolidations, including
cooperating in the filing of any necessary regulatory applications.
5.17. Current Information. During the period from the date of this
Agreement to the Effective Time, each of CIVISTA and FBOH will promptly notify
the other of (i) any material change in the normal course of its business, (ii)
any governmental complaints, investigations or hearings (or communications
indicating that the same may be contemplated), or receipt of any memorandum or
understanding or cease and desist order from a regulatory authority, or (iii)
the institution or the threat of material litigation involving such party and
will keep the other party fully informed of such events. During such period,
FBOH and CIVISTA shall promptly provide the other with monthly unaudited
financial statements as soon as they are available and each shall promptly
provide the other with a copy of all Reports filed by it after the date of this
Agreement through the Effective Time. Each of FBOH and CIVISTA agrees to keep
the information contained in the monthly unaudited financial statements strictly
confidential.
5.18. Integration of Operations. During the period from the date of this
Agreement to the Effective Time, the parties will consult and cooperate fully
with each other to do all things advisable to prepare for and facilitate the
integration of CIVISTA and the applicable Company Subsidiaries operations into
and with FBOH's operations as rapidly and effectively as possible as of the
Effective Time, including, without limitation, preparation for the integration
of such branch operations, if any (including, without limitation, the
preparation for the necessary installation of all of FBOH's or its subsidiaries
hardware and software systems), management information systems, financial and
accounting operations, employee compensation and benefit matters and similar
matters, and employee training, as requested by FBOH.
5.19. NASD Listing. FBOH will file a Form 10-C with the Commission and the
National Association of Securities Dealers, Inc. (the "NASD") at the time
prescribed by applicable rules and regulations. In addition, FBOH will use its
best efforts to maintain its listing on the NASD Automated Quotation-National
Market System.
5.20. Environmental Survey. In the event FBOH elects to conduct, or have
conducted on its behalf, an environmental review, study, survey or assessment to
verify the representations and warranties given by CIVISTA with respect to the
environmental matters referred to in Section 4.21 of this Agreement, such
environmental review, study, survey or assessment shall be completed, and all
reports and findings related thereto shall be disclosed to CIVISTA within 60
days of the date of this Agreement. Nothing in this Section is intended to be a
limitation upon or a waiver of the representations and warranties contained in
Section 4.21.
6. CONDITIONS
6.1. Conditions to Each Party's Obligations to Effect the Merger. The
respective obligations of each party to effect the Merger shall be subject to
the fulfillment or waiver at or prior to the Closing of the following
conditions:
(a) The Merger and this Agreement shall have been approved and adopted by
the requisite vote of the holders of CIVISTA's Common Stock and the holders of
FBOH's Common Stock.
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(b) All authorizations, consents, orders or approvals, lack of any
injunctive actions by the Department of Justice or any state anti-trust agency,
of the FRB, OTS, Division and any other Governmental Entity (collectively,
"CONSENTS") which are necessary for the consummation of the Merger (other than
immaterial Consents, the failure to obtain which would not involve criminal
liability, any material civil penalties or fines, or would not have or
reasonably be expected to have a Material Adverse Effect on the combined
businesses, financial condition, or results of operations of FBOH, CIVISTA, the
FBOH Subsidiaries and the Company Subsidiaries taken as a whole), shall have
been obtained or shall have occurred and shall be in full force and effect, and
all applicable waiting periods shall have expired, at the Effective Time. A
material Consent shall not be deemed to have been obtained if the Consent shall
include any conditions or requirements which, in the reasonable opinion of the
Board of Directors of FBOH, would have a Material Adverse Effect on the
anticipated economic and business benefits to FBOH of the transactions
contemplated by this Agreement, taken as a whole.
(c) The Registration Statement shall have become effective in accordance
with the provisions of the Securities Act and shall not be subject to a stop
order suspending the effectiveness of the Registration Statement.
(d) No temporary restraining order, preliminary or permanent injunction or
other order by any federal or state court or agency in the United States which
enjoins or prohibits the consummation of the Merger shall have been issued and
remain in effect.
(e) FBOH shall have obtained an opinion of its counsel, reasonably
satisfactory in form and substance to FBOH and CIVISTA and dated as of Closing,
to the effect that (i) the Merger will constitute a tax-free reorganization
within the meaning of Section 368(a)(1)(A) of the Code, (ii) no gain or loss
will be recognized by FBOH as a consequence of the transaction contemplated
herein, and (iii) no gain or loss will be recognized by the stockholders of
CIVISTA upon the conversion of their shares of Common Stock into shares of FBOH
Common Stock pursuant to the terms of the Merger (except for the effect of any
cash received in lieu of fractional shares).
6.2. Conditions to Obligation of CIVISTA to Effect The Merger. The
obligation of CIVISTA to effect the Merger shall be subject to the fulfillment
or waiver at or prior to the Closing of the additional following conditions:
(a) FBOH shall have performed in all material respects all of its
obligations contained in this Agreement required to be performed at or prior to
the Closing.
(b) The representations and warranties of FBOH contained in this Agreement
shall be true and correct both: (i) on the date of this Agreement, and (ii) as
of the Effective Time as if made at and as of such time, (x) except, both on the
date of this Agreement and at the Effective Time, as expressly contemplated or
permitted by this Agreement, (y) except, as of the Effective Time, for
representations and warranties relating to a time or times other than the
Effective Time, and (z) except, both on the date of this Agreement and at the
Effective Time, to the extent that the untruthfulness or inaccuracy of the
representations or warranties of FBOH, individually or in the aggregate, shall
not have a Material Adverse Effect on FBOH.
(c) FBOH shall have furnished CIVISTA a Certificate dated the date of the
Closing, signed on behalf of FBOH by the Chief Executive Officer or President,
and the Chief Financial Officer of FBOH, that to the best of their knowledge and
belief, the conditions set forth in Sections 6.2(a) and (b) have been satisfied.
(d) CIVISTA shall have received the opinion of legal counsel for FBOH,
dated as of Closing, substantially to the effect set forth in Exhibit 6.2(d)
hereto, and such certificates from the appropriate persons and/or authorities
regarding FBOH's board resolutions, form of corporate governance documents and
good standing.
(e) Since the date of this Agreement, there shall have not been any change
in the financial condition, results of operations or business of FBOH and the
subsidiaries of FBOH that would have a Material Adverse Effect on FBOH.
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6.3. Conditions to Obligation of FBOH to Effect The Merger. The obligation
of FBOH to effect the Merger shall be subject to the fulfillment or waiver at or
prior to the Closing of the additional following conditions:
(a) CIVISTA shall have performed in all material respects all of its
obligations contained in this Agreement required to be performed at or prior to
the Closing.
(b) The representations and warranties of CIVISTA contained in this
Agreement shall be true and correct both: (i) on the date of this Agreement, and
(ii) as of the Effective Time as if made on and as of such time, (x) except,
both on the date of this Agreement and at the Effective Time, as expressly
contemplated or permitted by this Agreement, (y) except, as of the Effective
Time, for representations and warranties relating to a time or times other than
the Effective Time, and (z) except, both on the date of this Agreement and at
the Effective Time, to the extent that the untruthfulness or inaccuracy of the
representations or warranties of CIVISTA, individually or in the aggregate,
shall not have a Material Adverse Effect on CIVISTA.
(c) Since the date of this Agreement (i) there shall not have been any
change in the financial condition, results of operations or business of CIVISTA
and the subsidiaries of CIVISTA that either individually or in the aggregate
would have a Material Adverse Effect on CIVISTA, other than change as a result
of action taken under Section 5.2.6 and the second paragraph of Section 5.6, and
the responses thereto by CIVISTA and the impact thereof on the operating
performance of CIVISTA, and (ii) the consolidated net worth of CIVISTA at the
close of business on December 31, 1994 shall not be less than $90,000,000 and as
of the Closing shall not be less than that amount plus an additional amount of
$1,500,000 for each quarter in 1995 until Closing (or a pro rata amount per
month thereof if less than a full quarter), unless the failure to meet such net
worth requirements is as a result of action taken under Section 5.2.6, responses
thereto by CIVISTA, or the impact thereof on the operating performance of
CIVISTA. For the purposes of this Section 6.3(c), "NET WORTH" shall be
calculated in accordance with generally accepted accounting principles.
Notwithstanding anything to the contrary contained in this Section 6.3(c), the
legal and accounting costs of CIVISTA will be deemed as expenses in calculating
the net worth requirements under this Section, but the fees payable to McDonald,
the proceeds received from the exercise of any Company Stock Options, and the
effect of the sale of one or more of the Non-banking Subsidiaries or assets as
indicated under the second paragraph Section 5.6 will not be used in calculating
the net worth requirement.
(d) CIVISTA shall have furnished FBOH a certificate dated the date of the
Closing signed on behalf of CIVISTA by the Chief Executive Officer or President,
and Chief Financial Officer of CIVISTA, that to the best of their knowledge and
belief, the conditions set forth in Sections 6.3(a), (b) and (c) have been
satisfied. In addition, CIVISTA shall have furnished FBOH certificates, one
dated the effective date of the Registration Statement and Proxy, and one as of
the Closing, signed on behalf of CIVISTA by the Chief Executive Officer or
President, and Chief Financial Officer of CIVISTA, that to the best of their
knowledge and belief, that CIVISTA participated in the preparation of the
Registration Statement and the Proxy Statement, including review and discussion
of the contents thereof, and nothing came to the attention of CIVISTA that
caused it to believe that the Registration Statement or the Proxy Statement at
the time such documents became effective, and as of the date of Closing,
contained any untrue statement of a material fact or omitted to state any
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they are made, not
misleading.
(e) FBOH shall have received the opinion of legal counsel for CIVISTA dated
as of Closing, substantially to the effect set forth in Exhibit 6.3(e) hereto,
and such certificates from the appropriate persons and/or authorities regarding
CIVISTA's and its subsidiaries' board resolutions, forms of corporate governance
documents and good standing.
(f) FBOH shall have received a letter, dated the date of the Closing, from
Coopers & Lybrand to the effect that, for financial reporting purposes, the
Merger qualifies for pooling-of-interests accounting treatment under generally
accepted accounting principles, if consummated in accordance with this
Agreement.
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7. MISCELLANEOUS
7.1. Termination. Notwithstanding any other provision of this Agreement,
this Agreement may be terminated at any time prior to the Effective Time,
whether before or after approval of this Agreement by the stockholders of FBOH
and CIVISTA:
(a) by the vote of a majority of the Board of Directors of each of FBOH and
CIVISTA;
(b) by the vote of a majority of the Board of Directors of either FBOH or
CIVISTA if the Merger shall not have been consummated on or before April 30,
1995, unless the failure to consummate by such date is related to the action or
inaction of the Regulatory Authorities and such action or inaction is not
directly related to either FBOH's or CIVISTA's breach of their respective
obligations under Sections 5.6 or 5.12(a), then on or before June 30, 1995;
(c) by the vote of a majority of the Board of Directors of CIVISTA if any
of the conditions specified in Sections 6.1 and 6.2 have not been met or waived
by CIVISTA at such time as such condition can no longer be satisfied;
(d) by the vote of a majority of the Board of Directors of FBOH if any of
the conditions specified in Sections 6.1 and 6.3 have not been met or waived by
FBOH at such time as such condition can no longer be satisfied;
(e) by the vote of a majority of the Board of Directors of either FBOH or
CIVISTA if any regulatory agency has denied approval of the Merger and neither
FBOH nor CIVISTA has timely filed a request for reconsideration or a petition
seeking review of such order (regardless of whether CIVISTA is deemed to be a
"party" to an application with respect to the Merger);
(f) by CIVISTA if both of the following conditions are satisfied:
(i) the average of the per share daily closing prices of a share of
FBOH Common Stock as reported on the NASDAQ National Market System for the
20 consecutive trading days ending at the end of the fifth trading day
immediately preceding the date of Closing ("FBOH AVERAGE PRICE") is less
than $21.875, and
(ii) the number obtained by dividing the FBOH Average Price by $25.00
(which is the closing price of FBOH Common Stock on the trading day
immediately preceding the public announcement of this Agreement) is less
than the number obtained by dividing the Final Index Price (as hereinafter
defined) by the Initial Index Price and subtracting .10 from such quotient.
For purposes of Section 7.1(f):
(1) The "INDEX GROUP" shall mean all of those companies listed on
Exhibit 7.1(f), the common stock of which is publicly traded and as to
which there has not been a publicly announced proposal at any time
hereafter from such company to be acquired. In the event that any such
company or companies are so removed from the Index Group, the weights
attributed to the remaining companies shall be adjusted proportionately.
(2) The "INITIAL INDEX PRICE" shall mean the weighted average
(weighted in accordance with the factors listed on Exhibit 7.1(f)) of
the closing sales prices, as reported in the consolidated transaction
reporting system for the market or exchange on which such stock is
principally traded, on the trading day immediately preceding the public
announcement of this Agreement of the common stock of the companies
comprising the Index Group.
(3) The "FINAL PRICE" of any company belonging to the Index Group
shall mean the average of the daily closing sale prices of a share of
common stock of such company, as reported in the consolidated
transaction reporting system for the market or exchange on which such
common stock is principally traded, during the period of 20 trading days
ending at the end of the fifth trading day immediately preceding the
date of Closing.
(4) The "FINAL INDEX PRICE" shall mean the weighted average
(weighted in accordance with the factors listed on Exhibit 7.1(f)) of
the Final Prices for all of the companies comprising the Index Group. If
FBOH or any company belonging to the Index Group declares a stock
dividend or
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effects a reclassification, recapitalization, split-up, combination,
exchange of shares or similar transaction between the date of this
Agreement and the date of Closing, the closing prices for the common
stock of such company shall be appropriately adjusted for the purposes
of the definitions above so as to be comparable to the price on the date
of this Agreement.
(g) by the vote of a majority of the Board of Directors of either FBOH or
CIVISTA in the event of a material breach by the other party of any
representation, warranty, covenant or agreement, which breach is not cured, or
cannot be cured, within 30 days after written notice thereof is given to the
party committing such breach.
7.2. Non-Survival of Representations, Warranties; Effect of
Termination. The representations and warranties or covenants in this Agreement
will terminate at the Effective Time or the earlier termination of this
Agreement pursuant to Section 7.1, as the case may be: provided however, that if
the Merger is consummated, Sections 2.1 through 2.5, 5.4, 5.5, 5.8, 5.9, 5.10,
5.12(c), 5.13, 5.15, 5.16, 5.19 and 7.2 will survive the Effective Time to the
extent contemplated by such Sections; provided, further in the event of the
termination of this Agreement, this Agreement shall become void and of no effect
except that the first sentence in the second paragraph of Section 5.5, and all
of Sections 5.12(c) and 7.11, will in all events survive any termination of this
Agreement.
7.3. Waiver. Either party hereto may, by written notice to the other party
hereto, (a) extend the time for the performance of any of the obligations or
other actions of such other party under this Agreement, (b) waive any
inaccuracies in the representations or warranties of such other party contained
in this Agreement or in any document delivered pursuant to this Agreement, (c)
waive compliance with any of the conditions or covenants of such other party
contained in this Agreement, or (d) waive or modify performance of any of the
obligations of such other party under this Agreement. Except as provided in the
preceding sentence, no action taken pursuant to this Agreement, including,
without limitation, any investigation by or on behalf of either party, shall be
deemed to constitute a waiver by the party taking such action of compliance with
any of the representations, warranties, covenants, conditions, or agreements
contained in this Agreement. The waiver by either party hereto of a breach of
any provision of this Agreement shall not operate or be construed as a waiver of
any subsequent breach.
7.4. Amendment. This Agreement may be amended or supplemented by the
parties hereto, by action taken by or on behalf of their respective Boards of
Directors, at any time before or after approval of this Agreement by the
stockholders of CIVISTA and FBOH, provided however, that any such amendment or
supplement to this Agreement made subsequent to the adoption of this Agreement
by the stockholders of CIVISTA shall not (a) alter the amount or change the form
of the consideration contemplated by this Agreement, (b) alter or change any
term of the Amended and Restated Articles of Incorporation of the Surviving
Corporation to be affected by the Merger, or (c) alter or change any of the
terms of this Agreement if such alteration or change would adversely affect the
holders of the Shares or the FBOH Common Stock.
7.5. Entire Agreement. This Agreement and the CIVISTA Stock Purchase
Option, and the agreements referenced and contemplated therein and thereby,
contain the entire agreement among FBOH and CIVISTA with respect to the Merger
and the other transactions contemplated hereby and thereby, and supersede all
prior agreements among the parties with respect to such matters.
7.6. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of Ohio, without giving effect to the
principles of conflicts of law thereof.
7.7. Certain Definitions.
(a) For purposes of this Agreement, the term:
(i) "AFFILIATE" and "ASSOCIATE" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations
under the Exchange Act, as in effect on the date hereof;
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(ii) "CONTROL" (including the terms "CONTROLLED BY" and "UNDER COMMON
CONTROL WITH") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the
management or policies of a person, whether through the ownership of stock,
as trustee or executor, by contract or credit arrangement or otherwise;
(iii) "PERSON" means an individual, corporation, partnership,
association, trust or unincorporated organization; and
(iv) "MATERIAL ADVERSE EFFECT" on CIVISTA or FBOH means a material
adverse effect (other than as a result of changes (x) in banking laws or
regulations of general applicability or interpretations thereof by court or
governmental entities, (y) in generally accepted accounting principles, or
(z) that should, under the circumstances, reasonably have been anticipated
in light of disclosures made in FBOH Reports or CIVISTA Reports, as the
case may be, filed prior to the date of the Agreement, in CIVISTA
Disclosure Letter or FBOH Disclosure Letter, or in other writings delivered
by one party to the other prior to the date of this Agreement) on the
respective condition (financial and otherwise), results of operations, or
business of CIVISTA and its subsidiaries or FBOH and its subsidiaries, as
the case may be, taken as a whole, or on the ability of CIVISTA or FBOH, as
the case may be, to consummate the transactions contemplated hereby. The
effect of any action taken by CIVISTA, at the written request of FBOH
pursuant to Section 5.2.6, or action taken by CIVISTA regarding the sale of
the Non-banking Subsidiaries pursuant to the second paragraph of Section
5.6, shall not be taken into consideration in determining whether any
Material Adverse Effect has occurred.
7.8. Notices. All notices and other communications hereunder will be in
writing and will be deemed to have been duly given or delivered, if delivered
personally or delivered by a recognized commercial courier, to each of the
parties at the following addresses:
<TABLE>
<S> <C>
TO CIVISTA: TO FBOH:
Richard G. Gilbert, Chairman and Howard L. Flood, President and
Chief Executive Officer Chief Executive Officer
The CIVISTA Corporation First Bancorporation of Ohio
100 Central Plaza South 106 South Main Street
Canton, Ohio 44701 Akron, Ohio 44308
WITH A COPY TO: WITH COPIES TO:
Jeffrey J. Margulies, Esq. Terry E. Patton,
Squire, Sanders & Dempsey Senior Vice President and Secretary
4900 Society Center First Bancorporation of Ohio
127 Public Square 106 South Main Street
Cleveland, Ohio 44114 Akron, Ohio 44308
Philip A. Lloyd II, Esq.
and Kevin C. O'Neil, Esq.
Brouse & McDowell
500 First National Tower
Akron, Ohio 44308
</TABLE>
or to such other address as any party may have furnished to the other parties in
writing in accordance with this Section 7.8.
7.9. Counterparts; Exhibits. This Agreement may be executed in any number
of counterparts, each of which will be deemed to be an original but all of which
together will constitute but one agreement. Any exhibits or schedules referenced
herein and attached hereto shall be incorporated by reference herein as if fully
written out in this Agreement.
7.10. Parties in Interest. This Agreement is not intended to nor will it
confer upon any other person any rights or remedies, except as expressly stated
herein.
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7.11. Expenses. Except as otherwise set forth in this Agreement, each
party shall be responsible for the costs and expenses incurred by it in
connection with the transactions contemplated by this Agreement. If this
Agreement is terminated by CIVISTA or FBOH pursuant to 7.1(g) because of the
material breach by the other party of any representation, warranty, covenant,
undertaking or restriction contained in this Agreement, if the terminating party
is not in material breach of any representation, warranty, covenant, undertaking
or restriction contained in this Agreement, then the breaching party shall pay
all costs and expenses of the terminating party, including but not limited to
fees for financial advisors, accountants and legal counsel; provided, however,
that if this Agreement is terminated under circumstances other than those
described in this Section 7.11, all costs and expenses incurred in connection
with this Agreement and the transactions contemplated hereby will be paid by the
party incurring such costs and expenses.
7.12. Enforcement of the Agreement. The parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement were not performed in accordance with their specific terms or were
otherwise breached, that it is impossible to measure in money the damages that
would result to a party by reason of the failure of any of the parties to
perform any of the obligations of this Agreement and that money damages would be
an inadequate remedy in this instance. It is accordingly agreed that the parties
hereto will be entitled to an injunction or injunctions to prevent breaches of
this Agreement and to enforce specifically the terms and provisions hereof in
any court of the United States or any state having jurisdiction, this being in
addition to any other remedy to which they are entitled at law or in equity. In
addition, it is agreed and that if any party should institute an action or
proceeding seeking specific enforcement of this Agreement, the party against
which such action or proceeding is brought hereby waives the claim or defense
that the party instituting such action or proceeding has an adequate remedy at
law and hereby agrees not to assert in any such action or proceeding the claim
or defense that such a remedy at law exists and shall waive or not assert any
requirement to post bond in connection with seeking specific performance.
7.13. Severability. If any term or other provision of this Agreement is
invalid, illegal or incapable of being enforced by any rule of law or public
policy, all other terms and provisions of this Agreement will nevertheless
remain in full force and effect so long as the economic or legal substance of
the transactions contemplated hereby is not affected in any manner adverse to
any party hereto. Upon any such determination that any term or other provision
is invalid, illegal or incapable of being enforced and does not adversely affect
the substance of these transactions in a material way, the parties hereto will
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that the transactions contemplated by this Agreement are consummated to the
extent possible.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized
representatives to execute this Agreement as of the date first above written.
<TABLE>
<S> <C>
FIRST BANCORPORATION OF OHIO
Attest:
/s/ TERRY E. PATTON By: /s/ HOWARD L. FLOOD
- ----------------------------------- -----------------------------------
Terry E. Patton, Secretary Howard L. Flood, President and
Chief Executive Officer
THE CIVISTA CORPORATION
Attest:
/s/ JANICE R. VAN VOORHIS By: /s/ RICHARD G. GILBERT
- ----------------------------------- -----------------------------------
Janice R. Van Voorhis, Secretary Richard G. Gilbert, Chairman and
Chief Executive Officer
By: /s/ PAUL G. BASNER
-----------------------------------
Paul G. Basner, Vice Chairman
</TABLE>
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ACKNOWLEDGEMENT
STATE OF OHIO
SS:
COUNTY OF STARK
BE IT REMEMBERED that on this 10th day of August, 1994, personally came
before me, a Notary Public in and for the State and County aforesaid, Howard L.
Flood, President and Chief Executive Officer, and Terry E. Patton, Senior Vice
President and Secretary of First Bancorporation of Ohio, an Ohio corporation,
and they duly executed the Agreement of Affiliation and Plan of Merger before me
and acknowledged it to be their act and deed and the act and deed of said
Corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 10th day of
August, 1994.
/s/ KEVIN C. O'NEIL
------------------------------
Notary Public
ACKNOWLEDGEMENT
STATE OF OHIO
SS:
COUNTY OF STARK
BE IT REMEMBERED that on this 9th day of August, 1994, personally came
before me, a Notary Public in and for the State and County aforesaid, Paul G.
Basner, Vice Chairman and Janice R. Van Voorhis, Vice President and Secretary of
The CIVISTA Corporation, an Ohio corporation, and they duly executed the
Agreement of Affiliation and Plan of Merger before me and acknowledged it to be
their act and deed and the act and deed of said Corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 9th day of
August, 1994.
/s/ JEFFREY J. MARGULIES
------------------------------
Notary Public
ACKNOWLEDGEMENT
STATE OF OHIO
SS:
COUNTY OF STARK
BE IT REMEMBERED that on this 9th day of August, 1994, personally came
before me, a Notary Public in and for the State and County aforesaid, Richard G.
Gilbert, Chairman and Chief Executive Officer of The CIVISTA Corporation, an
Ohio corporation, and they duly executed the Agreement of Affiliation and Plan
of Merger before me and acknowledged it to be his act and deed and the act and
deed of said Corporation.
IN WITNESS WHEREOF, I have hereunto set my hand and seal this 9th day of
August, 1994.
/s/ JANICE R. VAN VOORHIS
------------------------------
Notary Public
A-37
<PAGE> 111
APPENDIX B
FAIRNESS OPINION OF
ALEX. BROWN & SONS INCORPORATED
<PAGE> 112
[PASTEUP ALEX. BROWN & SONS INCORPORATED LETTERHEAD]
November 2, 1994
The Board of Directors
First Bancorporation of Ohio
106 South Main Street
Akron, Ohio 44308-1444
Dear Sirs and Madam:
You have requested our opinion as to the fairness from a financial point of
view to the holders of First Bancorporation of Ohio ("Bancorporation") common
stock, no par value ("Bancorporation Common Stock") of the exchange ratio (the
"Exchange Ratio") of 1.723 shares of Bancorporation Common Stock, to be paid by
Bancorporation for each share of common stock, no par value, (the "Shares") of
the CIVISTA Corporation ("CIVISTA") pursuant to the Agreement of Affiliation and
Plan of Merger dated as of August 10, 1994, by and between Bancorporation and
CIVISTA (the "Merger Agreement").
Alex. Brown & Sons Incorporated, as a customary part of its investment
banking business, is engaged in the valuation of businesses and their securities
in connection with mergers and acquisitions, negotiated underwritings, private
placements and valuations for estate, corporate and other purposes. We have
acted as financial advisor to the Board of Directors of Bancorporation in
connection with the transactions described above and will receive a fee for our
services, a significant portion of which is contingent upon the consummation of
the transaction contemplated by the Merger Agreement. Alex. Brown & Sons
Incorporated regularly publishes research reports regarding the financial
services industry and the businesses and securities of publicly owned companies
in the industry.
In connection with this opinion, we have reviewed certain publicly
available financial information concerning Bancorporation and CIVISTA and
certain internal financial analyses and other information furnished to us by
Bancorporation and CIVISTA. We have also held discussions with members of the
senior management of Bancorporation and CIVISTA regarding the business and
prospects of Bancorporation and CIVISTA, respectively, and have reviewed certain
internal financial analyses and forecasts for Bancorporation and CIVISTA
prepared by their respective managements. We have also reviewed with members of
the senior management of Bancorporation the results of their due diligence
examination of CIVISTA and the expected cost savings and revenue enhancements
related to the merger contemplated by the Merger Agreement. In addition, we have
(i) reviewed the reported price and trading activity for the Shares and
Bancorporation Common Stock, (ii) compared certain financial and stock market
information for Bancorporation and CIVISTA, respectively, with similar
information for certain comparable companies whose securities are publicly
traded, (iii) reviewed the Merger Agreement and compared the financial terms of
the Merger Agreement with those of certain recent business combinations in the
commercial banking and savings and loan industries which we deemed comparable in
whole or in part and (iv) performed such other studies and analyses and
considered such other factors as we deemed appropriate.
We have not independently verified the information described above and for
purposes of this opinion have assumed the accuracy, completeness and fairness
thereof. With respect to information relating to the prospects of Bancorporation
and CIVISTA, we have assumed that such information reflects the best currently
available estimates and judgments of the managements of Bancorporation and
CIVISTA, respectively, as to the likely future financial performance of
Bancorporation and CIVISTA. In addition, we have not made an independent
evaluation or appraisal of the assets or liabilities of Bancorporation or
CIVISTA, nor have we been furnished with any such evaluation or appraisal. Our
opinion is based on market, economic and other conditions as they exist and can
be evaluated as of the date of this letter.
ONE THIRTY-FIVE EAST BALTIMORE STREET, BALTIMORE, MARYLAND 21202 - TELEPHONE:
410-727-1700 - TELEX 198186
B-1
<PAGE> 113
Board of Directors
November 2, 1994
Page 2
Based upon and subject to the foregoing, it is our opinion that, as of the
date of this letter, the Exchange Ratio is fair, from a financial point of view,
to holders of Bancorporation Common Stock.
Very truly yours,
ALEX. BROWN & SONS INCORPORATED
By:
Donald W. Delson
Managing Director
B-2
<PAGE> 114
APPENDIX C
FAIRNESS OPINION OF
MCDONALD & COMPANY SECURITIES, INC.
<PAGE> 115
[PASTEUP McDonald & Company Securities, Inc. Letterhead]
November 2, 1994
Board of Directors
The CIVISTA Corporation
100 Central Plaza South
Canton, OH 44701
Dear Sirs and Madam:
You have requested our opinion with respect to the fairness, from a
financial point of view, as of the date hereof, to the holders of common stock,
no par value ("CIVISTA Common"), of The CIVISTA Corporation, an Ohio corporation
("CIVISTA"), of the exchange ratio (the "Exchange Ratio") set forth in Section
2.1(a) of the Agreement of Affiliation and Plan of Merger (the "Merger
Agreement"), dated August 10, 1994, between CIVISTA and First Bancorporation of
Ohio ("FBOH"). The Exchange Ratio provides for the exchange of shares of CIVISTA
Common for 1.723 shares of common stock, no par value ("FBOH Common"), of FBOH.
The Merger Agreement provides for the merger (the "Merger") of CIVISTA with
and into FBOH, pursuant to which, among other things, at the effective time of
the Merger (as defined in the Merger Agreement) outstanding shares of CIVISTA
Common will be exchanged for shares of FBOH Common at the Exchange Ratio. The
terms and conditions of the Merger are more fully set forth in the Merger
Agreement.
McDonald & Company Securities, Inc., as part of its investment banking
business, is customarily engaged in the valuation of businesses and their
securities in connection with mergers and acquisitions, negotiated
underwritings, secondary distributions of listed and unlisted securities,
private placements and valuations for estate, corporate and other purposes.
We have acted as CIVISTA's financial advisor in connection with, and have
participated in certain of the negotiations leading to, the execution of the
Merger Agreement.
In connection with rendering our opinion set forth herein, we have among
other things:
<TABLE>
<S> <C>
(i) Reviewed CIVISTA's Annual Reports to Shareholders and Annual Reports on Form 10-K
for each of the three fiscal years ended September 30, 1993, including the
audited financial statements contained therein, as well as CIVISTA's Quarterly
Reports on Form 10-Q for the three month periods ended December 31, 1993, March
31, 1994 and June 30, 1994;
(ii) Reviewed FBOH's Annual Reports to Shareholders and Annual Reports on Form 10-K
for each of the three years ended December 31, 1993, as well as FBOH's Quarterly
Reports on Form 10-Q for the three month periods ended March 31, 1994 and June
30, 1994;
(iii) Reviewed certain other non-public information, primarily financial in nature,
relating to the respective businesses, earnings, assets and prospects of CIVISTA
and FBOH furnished to us and prepared by CIVISTA and FBOH;
(iv) Participated in meetings and telephone conferences with members of senior
management of CIVISTA and meetings and telephone conferences with members of
senior management of FBOH concerning the financial condition, business, assets,
financial forecasts and prospects of the respective companies, as well as other
matters we believe relevant to our inquiry;
(v) Reviewed certain stock market information for CIVISTA Common and FBOH Common and
compared it with similar information for certain companies, the securities of
which are publicly traded;
</TABLE>
C-1
<PAGE> 116
Board of Directors
November 2, 1994
Page 2
<TABLE>
<S> <C>
(vi) Compared the results of operations and financial condition of CIVISTA with that
of certain companies which we deemed to be relevant for purposes of this opinion;
(vii) Reviewed the financial terms, to the extent publicly available, of certain
acquisition transactions which we deemed to be relevant for purposes of this
opinion;
(viii) Reviewed the Merger Agreement and its schedules and exhibits and certain related
documents; and
(ix) Performed such other analyses as we have deemed appropriate.
</TABLE>
In our review and analysis and in arriving at our opinion, we have assumed
and relied, without independent investigation or verification, upon the accuracy
and completeness of all of the financial and other information reviewed by us
and have relied upon the accuracy and completeness of the representations and
warranties of CIVISTA and FBOH contained in the Merger Agreement. We have not
conducted a physical inspection of any of the assets, properties or facilities
of either CIVISTA or FBOH, nor have we made or obtained or been furnished with
any independent evaluation or appraisal of any of such assets, properties or
facilities or any of the liabilities of either CIVISTA or FBOH. With respect to
financial forecasts provided to us by management of CIVISTA and FBOH, we have
assumed that such forecasts have been reasonably prepared on a basis reflecting
the best currently available estimates and judgments of the management of
CIVISTA and FBOH as to the future performance of CIVISTA and FBOH, as the case
may be. We express no view as to such financial forecasts or the assumptions on
which they are based. We have also assumed that all of the conditions to the
consummation of the Merger, as set forth in the Merger Agreement, including the
tax-free treatment of the Merger to the holders of CIVISTA Common, would be
satisfied and that the Merger would be consummated on a timely basis in the
manner contemplated by the Merger Agreement.
We will receive a fee for our services as financial advisor to CIVISTA, a
significant portion of which is contingent upon closing of the Merger.
In the ordinary course of our business, we may actively trade securities of
both CIVISTA and FBOH for our own account and for the accounts of customers and,
accordingly, we may at any time hold a long or short position in such
securities.
This opinion is based on economic and market conditions and other
circumstances existing on, and information made available as of, the date
hereof. In addition, our opinion is, in any event, limited to the fairness, as
of the date hereof, from a financial point of view, of the Exchange Ratio and
does not address CIVISTA's underlying business decision to effect the Merger or
any other terms of the Merger. This opinion does not represent our opinion as to
what the value of CIVISTA Common or FBOH Common may be at the effective time of
the Merger.
This opinion has been prepared solely for the confidential use of the Board
of Directors and senior management of CIVISTA and will not be reproduced,
summarized, described or referred to or given to any other person without our
prior written consent. Notwithstanding the foregoing, this opinion may be
included in a joint proxy statement to be mailed to the holders of CIVISTA
Common and Bancorporation Common in connection with the Merger, provided that
this opinion will be reproduced in such proxy statement in full, and any
description of or reference to us or our actions, or any summary of the opinion
in such proxy statement will be in a form acceptable to us and our counsel.
Based upon and subject to the foregoing, it is our opinion that, as of the
date hereof, the Exchange Ratio pursuant to the Merger Agreement is fair to the
holders of CIVISTA Common from a financial point of view.
Very truly yours,
McDONALD & COMPANY SECURITIES, INC.
C-2
<PAGE> 117
APPENDIX D
THE CIVISTA CORPORATION
STOCK PURCHASE OPTION
<PAGE> 118
THE CIVISTA CORPORATION STOCK PURCHASE OPTION
THE CIVISTA CORPORATION STOCK PURCHASE OPTION, dated as of August 10, 1994
(the "Agreement"), by and between The CIVISTA Corporation, an Ohio corporation
("CIVISTA"), and First Bancorporation of Ohio, an Ohio corporation ("FBOH").
WHEREAS, CIVISTA and FBOH propose to enter into an Agreement of Affiliation
and Plan of Merger, dated as of August 10, 1994 (the "Merger Agreement"),
providing for the merger of CIVISTA with and into FBOH (the "Merger"); and
WHEREAS, as a condition and inducement to FBOH to enter into the Merger
Agreement, FBOH has requested that CIVISTA agree, and CIVISTA has agreed, to
grant the Option to FBOH;
NOW, THEREFORE, in consideration of the foregoing and the respective
representations, warranties, and covenants set forth in this Agreement and in
the Merger Agreement, CIVISTA and FBOH agree as follows:
1. CERTAIN DEFINITIONS. In addition to the terms otherwise defined in this
Agreement, the following terms shall have the meanings set forth below:
<TABLE>
<S> <C>
(a) "Affiliate" and "Associate" shall have the meanings given to them in Rule 12b-2
under the Exchange Act.
(b) "Beneficial ownership" and "beneficially own" shall have the meanings given to them
in Rule 13d-3 under the Exchange Act.
(c) "BHC Act" shall mean the Bank Holding Company Act of 1956, as amended.
(d) "Preferred Stock" shall mean the Preferred Shares, without par value, of CIVISTA,
with the terms and conditions set forth in Exhibit 1(d) attached hereto.
(e) "Common Stock" shall mean the Common Shares, without par value, of CIVISTA.
(f) "Effective Time" shall have the meaning given to it in the Merger Agreement.
(g) "Exchange Act" shall mean the Securities Exchange Act of 1934, as amended.
(h) "Federal Reserve" shall mean the Board of Governors of the Federal Reserve System.
(i) "OTS" shall mean the Office of Thrift Supervision.
(j) "Group" shall have the same meaning as the term "group" in Section 13(d)(3) of the
Exchange Act.
(k) "Option Shares" shall mean shares of Preferred Stock that are subject to the
Option.
(l) "Person" shall have the meaning given to it in Sections 3(a)(9) and 13(d)(3) of the
Exchange Act.
(m) "Securities Act" shall mean the Securities Act of 1933, as amended.
(n) "Significant Subsidiary" shall have the meaning given to it in Rule 1.02 of
Regulation S-X of the Securities and Exchange Commission.
</TABLE>
2. GRANT OF OPTION. Subject to the terms and conditions set forth in this
Agreement, CIVISTA hereby grants to FBOH an irrevocable option (the "Option") to
purchase from CIVISTA up to 350,655 shares of Preferred Stock (subject to
adjustment hereafter pursuant to Section 7), free and clear of all liens,
claims, charges, and encumbrances of any kind, at a purchase price per share
(the "Purchase Price") equal to $33.50.
3. EXERCISE OF OPTION.
(a) Following the occurrence of a Purchase Event, FBOH may exercise the
Option, in whole or in part, at any time and from time to time prior to the
expiration of the right to exercise the Option (as provided in Section 3(c));
except that (i) FBOH may not exercise the Option if, at the time of exercise, it
is in material breach of any term, condition, covenant, representation or
warranty of or contained within the Merger Agreement, and (ii) any purchase of
Option Shares upon exercise of the Option shall be subject to
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compliance with applicable law, including the BHC Act and the regulations of the
Federal Reserve promulgated thereunder, and the regulations of OTS.
(b) As used herein, a "Purchase Event" means any of the following events
that occurs after the date of this Agreement:
(i) CIVISTA or any subsidiary of CIVISTA, without the prior written
consent of FBOH, shall have authorized, recommended, or proposed, shall
have publicly announced an intention to authorize, recommend, or propose,
or shall have entered into an agreement to effect (A) a merger,
consolidation or other business combination involving CIVISTA or any of its
Significant Subsidiaries with or into any person (other than a merger,
consolidation, joint venture, or other business combination with or into
FBOH or any subsidiary of FBOH, or a merger or consolidation of any
subsidiary of CIVISTA with or into CIVISTA or any other subsidiary of
CIVISTA), (B) a sale, lease, or other disposition of assets or earning
power of CIVISTA or any of its subsidiaries, in one or more transactions,
representing 25% or more of the consolidated assets or earning power of
CIVISTA and its subsidiaries to any person (other than FBOH or any
subsidiary of FBOH), or (C) an issuance, sale, or other disposition
(whether by means of a merger, consolidation, share exchange, or other
transaction) of securities representing 20% or more of the voting power of
CIVISTA or any of its Significant Subsidiaries to any person (other than
FBOH or any subsidiary of FBOH) (any of the foregoing being an "Acquisition
Transaction;" except that, if FBOH has given its prior written consent to
any such transaction, the transaction as to which FBOH has given its prior
written consent shall not be an "Acquisition Transaction");
(ii) any person (other than FBOH or any subsidiary of FBOH) shall have
commenced (as such term is defined in Rule 14d-2 under the Exchange Act),
or shall have filed a registration statement under the Securities Act with
respect to, a tender offer or exchange offer to acquire shares of Common
Stock or Preferred Stock such that, upon consummation of the offer, such
person would beneficially own 25% or more of the Common Stock or Preferred
Stock then outstanding;
(iii) any person (other than FBOH or any subsidiary of FBOH, any
subsidiary of CIVISTA in a fiduciary capacity in the ordinary course of
such subsidiary's business, any employee benefit plan or employee stock
ownership plan of CIVISTA or any subsidiary of CIVISTA, or any person
organized, appointed, or established by CIVISTA or any subsidiary of
CIVISTA for or pursuant to the terms of any such plan), alone or together
with such person's Affiliates, shall have acquired beneficial ownership of
20% or more of the Common Stock or Preferred Stock (if any) then
outstanding, or any group (other than a group of which FBOH or any
subsidiary of FBOH, any subsidiary of CIVISTA in a fiduciary capacity in
the ordinary course of such subsidiary's business, any employee benefit
plan or employee stock ownership plan of CIVISTA or any subsidiary of
CIVISTA, or any person organized, appointed, or established by CIVISTA or
any subsidiary of CIVISTA for or pursuant to the terms of any such plan is
a member) shall have been formed, as reasonably determined in good faith by
the Board of Directors of FBOH, that beneficially owns 20% or more of the
Common Stock or Preferred Stock (if any) then outstanding; or
(iv) the holders of Common Stock and Preferred Stock (if any) shall
not have approved the Merger Agreement at the meeting of such stockholders
(or any adjournment or postponement thereof) held for the purpose of voting
on the Merger Agreement, such meeting shall not have been held or shall
have been canceled (and not rescheduled) prior to termination of the Merger
Agreement, or CIVISTA's Board of Directors shall have withdrawn or modified
in a manner adverse to FBOH the recommendation of CIVISTA's Board of
Directors that CIVISTA's stockholders vote in favor of and approve the
Merger and adopt the Merger Agreement, in each case after any person (other
than FBOH or any subsidiary of FBOH) shall, after the date of this
Agreement, have (A) publicly announced a bona fide proposal, or publicly
disclosed a bona fide intention to make a bona fide proposal, to engage in
an Acquisition Transaction (or CIVISTA shall have publicly disclosed
receipt of such a proposal) or (B) filed an application or given a notice,
whether in draft or final form, under the BHC Act or the Change in Bank
Control Act of 1978 for approval to engage in an Acquisition Transaction.
(c) Except as provided in the last sentence of this Section 3(c) and in
Section 9(c), the right to exercise the Option shall terminate upon the earliest
to occur of (i) the Effective Time, (ii) 12 months after the first
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occurrence of a Purchase Event, and (iii) termination of the Merger Agreement in
accordance with its terms prior to the occurrence of a Purchase Event. The
rights set forth in Sections 9 and 11 shall not terminate when the right to
exercise the Option terminates, but shall extend to such time as is provided in
Sections 9 or 11, respectively. Notwithstanding the termination of the right to
exercise the Option, FBOH shall be entitled to purchase those Option Shares with
respect to which it has exercised the Option prior to termination of the right
to exercise the Option.
(d) In the event FBOH wishes to exercise the Option, it shall send to
CIVISTA a written notice (the date on which the notice is sent being herein
referred to as the "Notice Date") specifying (i) the number of Option Shares
that it intends to purchase pursuant to such exercise and (ii) a place and date
not earlier than three business days nor later than 15 business days from the
Notice Date for the closing of such purchase (the "Closing Date").
Notwithstanding the foregoing, if the closing of such purchase cannot be
consummated by reason of any applicable judgment, decree, order, law, or
regulation, the Closing Date shall be extended and occur not earlier than three
business days nor later than 30 business days after such restriction on
consummation has expired or been terminated. If prior notification to or
approval by the Federal Reserve or any other regulatory authority is required in
connection with such purchase and sale, FBOH shall promptly file and
expeditiously process the notice or application for approval (and CIVISTA shall
cooperate with FBOH in the filing and processing thereof), and the Closing Date
shall be extended and occur not earlier than three business days nor later than
30 business days after the date on which (x) any required notification period
has expired or been terminated or (y) such approval has been obtained, as the
case may be, and, in either event, any requisite waiting period has expired.
(e) Notwithstanding Section 3(d), in no event shall any Closing Date be
more than 18 months after the Notice Date, and, if the Closing Date has not
occurred within 18 months after the related Notice Date due to the failure to
obtain any required approval by the Federal Reserve, OTS or any other regulatory
authority, the exercise of the Option on the Notice Date shall be deemed to have
been rescinded. In the event (i) FBOH receives official notice that an approval
of the Federal Reserve, OTS or any other regulatory authority required for the
purchase and sale of the Option Shares will not be issued or granted or (ii) a
Closing Date has not occurred within 18 months after the related Notice Date due
to the failure to obtain any such required approval, FBOH shall be entitled to
exercise the Option in connection with the resale of the Option Shares pursuant
to a registration statement as provided in Section 10.
4. PAYMENT AND DELIVERY OF CERTIFICATES.
(a) On each Closing Date, FBOH shall pay to CIVISTA in immediately
available funds, by wire transfer to a bank account designated by CIVISTA, an
amount equal to the Purchase Price multiplied by the number of Option Shares to
be purchased on the Closing Date.
(b) On each Closing Date, simultaneous with the delivery of immediately
available funds as provided in Section 4(a), CIVISTA shall deliver to FBOH a
certificate or certificates representing the Option Shares being purchased, and
FBOH shall deliver to issuer a letter in which FBOH agrees not to sell or
otherwise dispose of such Option Shares in violation of applicable law or the
provisions of this Agreement.
(c) Certificates for the Option Shares shall be endorsed with a restrictive
legend substantially as follows:
THE TRANSFER OF THE PREFERRED STOCK REPRESENTED BY THIS CERTIFICATE IS SUBJECT
TO RESTRICTIONS ARISING UNDER THE SECURITIES ACT OF 1933, AS AMENDED, AND
PURSUANT TO THE TERMS OF THE CIVISTA CORPORATION STOCK PURCHASE OPTION DATED AS
OF AUGUST 10, 1994. A COPY OF SUCH AGREEMENT WILL BE PROVIDED TO THE HOLDER
HEREOF WITHOUT CHARGE UPON RECEIPT BY CIVISTA OF A WRITTEN REQUEST THEREFOR.
It is understood and agreed that the reference in the foregoing legend to
restrictions arising under the Securities Act shall be removed, by delivery of a
substitute certificate or certificates without such reference, if FBOH delivers
to CIVISTA a copy of a letter from the staff of the Securities and Exchange
Commission, or an opinion of counsel in form and substance reasonably
satisfactory to CIVISTA and its counsel, to the effect that an exemption is
available for the transaction under the Securities Act.
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5. REPRESENTATIONS AND WARRANTIES OF CIVISTA. CIVISTA hereby represents and
warrants to FBOH as follows:
(a) Due Authorization. CIVISTA has all requisite corporate power and
authority to enter into this Agreement and, subject to obtaining the approvals,
if any, contemplated by this Agreement or required by law, to consummate the
transactions contemplated by this Agreement. The execution and delivery of this
Agreement and the consummation of the transactions contemplated hereby have been
duly authorized by all necessary corporate action on the part of CIVISTA. This
Agreement has been duly executed and delivered by CIVISTA and constitutes a
valid and binding obligation of CIVISTA, enforceable against CIVISTA in
accordance with its terms.
(b) Authorized Stock. CIVISTA has heretofore taken, and until termination
of the right to exercise the option shall hereafter take, all corporate and
other action necessary to authorize and reserve, and, subject to obtaining the
governmental and other approvals and consents contemplated by this Agreement and
as may be required by law, to permit it to issue, all of the Option Shares,
including any additional shares of Preferred Stock or other securities that may
be issued pursuant to Section 7. The Option Shares, including any such
additional shares of Preferred Stock or other securities, upon issuance pursuant
hereto, shall be duly and validly issued, fully paid, and nonassessable, and
shall be delivered free and clear of all liens, claims, charges, and
encumbrances of any kind, including any preemptive rights of any stockholder of
CIVISTA.
(c) No Conflicts. Except as disclosed pursuant to the Merger Agreement, the
execution and delivery of this Agreement does not, and the consummation of the
transactions contemplated hereby will not, conflict with, or result in a
violation of or default under, (i) any provision of the Articles of
Incorporation or Code of Regulations of CIVISTA or the governing documents of
any subsidiary of CIVISTA or (ii), subject to obtaining the approvals, if any,
contemplated by this Agreement or required by law, any loan or credit agreement,
note, mortgage, indenture, lease, or other agreement, obligation, instrument,
permit, concession, franchise, license, judgment, order, decree, statute, law,
ordinance, rule, or regulation applicable to CIVISTA or any subsidiary of
CIVISTA or their respective properties or assets, which conflict, violation, or
default would have a material adverse effect on CIVISTA.
6. REPRESENTATIONS AND WARRANTIES OF FBOH. FBOH hereby represents and
warrants to CIVISTA that:
(a) Due Authorization. FBOH has all requisite corporate power and authority
to enter into this Agreement and, subject to obtaining the approvals referred to
in this Agreement, to consummate the transactions contemplated by this
Agreement. The execution and delivery of this Agreement and the consummation of
the transactions contemplated hereby have been duly authorized by all necessary
corporate action on the part of FBOH. This Agreement has been duly executed and
delivered by FBOH and constitutes a valid and binding obligation of FBOH,
enforceable against FBOH in accordance with its terms.
(b) No Conflicts. The execution and delivery of this Agreement does not,
and the consummation of the transactions contemplated hereby will not, conflict
with, or result in a violation of or default under, (i) any provision of the
Articles of Incorporation or Code of Regulations of FBOH or any subsidiary of
FBOH or (ii), subject to obtaining the approvals referred to in this Agreement
or required by law, any loan or credit agreement, note, mortgage, indenture,
lease, or other agreement, obligation, instrument, permit, concession,
franchise, license, judgment, order, decree, statute, law, ordinance, rule, or
regulation applicable to FBOH or any subsidiary of FBOH or their respective
properties or assets, which conflict, violation, or default would have a
material adverse effect on FBOH.
(c) Purchase Not for Distribution. Any Option Shares or other securities
acquired by FBOH upon exercise of the Option will not be taken 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 Act.
7. VOTING OF OPTION SHARES AND OTHER SHARES BY FBOH. FBOH hereby covenants
and agrees, with respect to all shares of Common Stock and Preferred Stock which
it beneficially owns, whether or not acquired pursuant to the terms of this
Agreement, that it will either (i) vote such shares proportionately with the
vote of all other shareholders of CIVISTA on any matter submitted to such
shareholders relating to a
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Purchase Event or an Acquisition Transaction, or (ii) at the discretion of its
Board of Directors, abstain from voting such shares on any matter submitted to
shareholders of CIVISTA relating to a Purchase Event or an Acquisition
Transaction.
8. ADJUSTMENT UPON CHANGES IN CAPITALIZATION, ETC.
(a) In the event of any change in the Common Stock or Preferred Stock by
reason of a stock dividend, split-up, recapitalization, combination, exchange of
shares, or similar transaction, the type and number of shares or securities
subject to the option, and the Purchase Price therefor, shall be adjusted
appropriately, and proper provision shall be made in the agreements governing
any such transaction, so that FBOH shall receive upon exercise of the Option the
number and class of shares, other securities, property, or cash that FBOH would
have received in respect of the Option Shares if the Option had been exercised
and the Option Shares had been issued to FBOH immediately prior to such event or
the record date therefor, as applicable.
(b) In the event that CIVISTA enters into an agreement (i) to consolidate
with or merge into any person (other than FBOH or any subsidiary of FBOH), and
CIVISTA shall not be the continuing or surviving corporation of such
consolidation or merger, (ii) pursuant to which any person (other than FBOH or
any subsidiary of FBOH) shall merge into CIVISTA, and CIVISTA shall be the
continuing or surviving corporation, but outstanding shares of Preferred Stock
or Common Stock shall be changed into or exchanged for stock, other securities,
property, or cash, or (iii) to sell, lease, or otherwise transfer assets of
CIVISTA or any of its subsidiaries, in one or more transactions, representing
more than 50% of the consolidated assets or earning power of CIVISTA and its
subsidiaries to any person (other than FBOH or any subsidiary of FBOH), then,
and in each such case, the agreement governing such transaction shall make
proper provisions so that, upon the consummation of such transaction, FBOH may,
in its discretion, (x) retain the Option to purchase the Option Shares or (y)
convert the Option into the right to receive, at the election of FBOH either
from the Acquiring Corporation or from any person that controls the Acquiring
Corporation, the number and class of shares, other securities, property, or cash
that FBOH would have received in respect of the Option Shares if the Option had
been exercised and the Option Shares had been issued to FBOH immediately prior
to the consummation of such transaction, the distribution of the proceeds
thereof to CIVISTA's stockholders, or the record date therefor, as applicable.
(c) For purposes of this Agreement, "Acquiring Corporation" means (i) the
continuing or surviving corporation in a merger or consolidation involving
CIVISTA in which CIVISTA is not the continuing or surviving corporation, (ii)
CIVISTA in a merger in which CIVISTA is the continuing or surviving corporation,
and (iii) the transferee of more than 50% of the consolidated assets or earning
power of CIVISTA and its subsidiaries. The provisions of Sections 8, 9, 10, 11,
12 and 13 shall apply with appropriate adjustments to any securities for which
the Option becomes exercisable pursuant to this Section 8.
9. REPURCHASE OF OPTION AT REQUEST OF FBOH.
(a) At the request of FBOH at any time during the period beginning upon the
first occurrence of a Repurchase Event and ending 12 months thereafter, CIVISTA
shall repurchase from FBOH the Option (unless the Option shall have expired or
been terminated) and all shares of Preferred Stock purchased by FBOH upon
exercise of the Option that are beneficially owned by FBOH at the Request Date.
(The date on which FBOH requests that CIVISTA repurchase the Option or Option
Shares under this Section 9 is referred to as the "Request Date".) Such
repurchase shall be at an aggregate price (the "Put Consideration") equal to the
sum of:
(x) the aggregate Purchase Price paid by FBOH for all shares of
Preferred Stock purchased upon exercise of the Option that are beneficially
owned by FBOH on the Request Date;
(y) the excess, if any, of the Applicable Price over the Purchase
Price paid by FBOH for each share of Preferred Stock with respect to which
the Option has been exercised that are beneficially owned by FBOH on the
Request Date, multiplied by the number of such shares; and
(z) the excess, if any, of the Applicable Price over the Purchase
Price (adjusted pursuant to Section 8), multiplied by the number of Option
Shares with respect to which the Option has not been exercised; provided
that, in the case of Option Shares with respect to which the Option has
been exercised but the
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Closing Date has not occurred, the Closing Date shall be suspended and the
Option shall be treated, for purposes of this clause (z), as if it had not
been exercised.
(b) If FBOH exercises its rights under this Section 8, CIVISTA shall,
within 10 business days after the Request Date, pay the Put Consideration to
FBOH in immediately available funds, by wire transfer to a bank account
designated by FBOH; FBOH shall, against receipt of the payment therefor,
surrender to CIVISTA the Option and the certificates evidencing the shares of
Preferred Stock purchased upon exercise of the Option that are beneficially
owned by FBOH on the Request Date; and FBOH shall warrant that it has sole
record and beneficial ownership of such shares, free and clear of all liens,
claims, charges, and encumbrances of any kind. Notwithstanding the foregoing, if
CIVISTA is prohibited from repurchasing the Option or any or all Option Shares
or from paying all or any portion of the Put Consideration by reason of any
applicable judgment, decree, order, law, or regulation, CIVISTA shall
immediately repurchase or pay that portion of the Option and Option Shares or
Put Consideration that it is not prohibited from repurchasing or paying, shall
from time to time thereafter immediately repurchase or pay such further portion
of the Put Consideration that it is not then prohibited from repurchasing or
paying, and, in all cases, shall pay the balance of the Option and Option Shares
or Put Consideration within 10 business days after such prohibition has expired
or been terminated. Upon receipt of a partial payment of the Put Consideration,
FBOH shall surrender a portion of the Option and/or Option Shares, as selected
by FBOH, corresponding (as closely as practicable) to the portion of the Put
Consideration received by FBOH. If prior notification to or approval by the
Federal Reserve, OTS or any other regulatory authority is required in connection
with the payment of all or any portion of the Put Consideration, CIVISTA shall
pay from time to time that portion of the Put Consideration that it is not
prohibited from paying and shall promptly file and expeditiously process the
required notice or application for approval (and FBOH shall cooperate with
CIVISTA in the filing of any such notice or application and the obtaining of any
such approval), and CIVISTA shall pay the Put Consideration within 10 business
days after the date on which, as the case may be, (i) any required notification
period has expired or been terminated or (ii) such approval has been obtained.
(c) If the Federal Reserve, OTS or any other regulatory authority
disapproves of the repurchase by CIVISTA of all or any part of the Option or
Option Shares pursuant to this Section 8, CIVISTA shall promptly give notice of
such disapproval to FBOH, and FBOH shall have the right to exercise the Option
as to the number of Option Shares for which the Option was exercisable at the
Request Date less the number of shares as to which payment has been made. If the
Option shall have terminated prior to the date of such notice or shall be
scheduled to terminate at any time before the expiration of a period ending on
the thirtieth business day after the date of such notice, FBOH shall
nevertheless have the right so to exercise the Option or exercise its right
under Section 12 until the expiration of such period of 30 business days.
Notwithstanding anything herein to the contrary, CIVISTA shall not be obligated
to repurchase the Option or any Option Shares on more than one occasion.
(d) For purposes of this Agreement, the "Applicable Price" means the
highest of (i) the highest price per share to be paid by any person (other than
FBOH or one of its subsidiaries) for shares of Common Stock or Preferred Stock
or the highest consideration per share to be received by holders of Common Stock
or Preferred Stock, in each case pursuant to an agreement for a merger,
consolidation, joint venture, or other business combination with CIVISTA entered
into after the date hereof and on or prior to the Request Date, (ii) the highest
closing sales price per share of Common Stock reported on the National Market
System of the National Association of Securities Dealers Automated Quotation
System ("NASDAQ") (or, if transactions in Common Stock are not reported on
NASDAQ, the highest bid price quoted on the principal trading market on which
the Common Stock is traded as reported by a recognized source) during the 60
business days preceding the Request Date, and (iii) in the event of the sale by
CIVISTA or its subsidiaries, in one or more transactions, of assets or earning
power aggregating more than 50% of the consolidated assets or earning power of
CIVISTA and its subsidiaries to any person (other than FBOH or any subsidiary of
FBOH), the sum of the price paid for such assets or earning power and the
current value of the remaining assets of CIVISTA and its subsidiaries divided by
the number of shares of Common Stock outstanding at the time of the sale. The
value of any consideration other than cash that is offered, paid, or received
pursuant to clauses (i) or (iii) of this Section 9(d), and the value of the
remaining assets of CIVISTA and its subsidiaries referred to in clause (iii),
shall be determined in good faith by an independent nationally recognized
investment banking firm mutually
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acceptable to FBOH and CIVISTA, which determination shall be conclusive for all
purposes of this Agreement.
(e) As used herein, a "Repurchase Event" means the consummation of an
Acquisition Transaction, provided, that, the percentage for purposes of Section
3(b)(i)(B) shall be 50% and the percentages for purposes of Section 3(b)(i)(C)
shall be 40%.
(f) Notwithstanding anything in this Agreement to the contrary, the Put
Consideration payable to FBOH, determined in accordance with Subsection (a) of
this Section, shall be adjusted so that in no event will the aggregate Put
Consideration payable to FBOH pursuant to the terms of this Section 9 exceed the
aggregate Purchase Price paid by FBOH pursuant to the Option, plus $4,000,000.
10. REPURCHASE OF OPTION AT REQUEST OF CIVISTA.
(a) Except to the extent that FBOH shall have previously exercised its
rights under Section 9, at the request of CIVISTA during the six-month period
commencing 12 months following the first occurrence of a Repurchase Event,
CIVISTA may repurchase from FBOH, and FBOH shall sell to CIVISTA, all (but not
less than all) of the shares of Preferred Stock purchased by FBOH upon exercise
of the Option that are beneficially owned by FBOH on the Call Date at a price
(the "Call Consideration") equal to the greater of (x) 110% of the Current
Market Price and (y) the sum of (A) the Purchase Price paid by FBOH for such
shares plus (B) FBOH's pre-tax per share carrying cost, multiplied in either
case by the number of shares being repurchased. (The date on which CIVISTA
requests that FBOH sell the Option Shares under this Section 10 is referred to
as the "Call Date.") Notwithstanding the foregoing, FBOH may, within 30 days
following CIVISTA's notice of its intention to purchase shares pursuant to this
Section 10, deliver an Offeror's Notice pursuant to Section 12, in which case
the provisions of Section 12 and not those of this Section 10 shall control.
Notwithstanding any contrary provision of this Section 10, CIVISTA's rights
under this Section 10 shall be suspended (with any such rights being extended
accordingly) during any period in which the exercise of such rights would
subject FBOH to liability pursuant to Section 16(b) of the Exchange Act.
(b) If CIVISTA exercises its rights under this Section 10 and FBOH does not
deliver an Offeror's Notice or sell shares of Preferred Stock to a third party
pursuant to the Offeror's Notice, CIVISTA shall, within 10 business days after
the thirtieth day following CIVISTA's notice of its intention to purchase shares
pursuant to this Section 10 or, if applicable, within 10 business days after
abandonment of the transaction covered by the Offeror's Notice, pay the Call
Consideration in immediately available funds, by wire transfer to a bank account
designated by FBOH; FBOH shall surrender to CIVISTA the certificates evidencing
the shares of Preferred Stock purchased upon exercise of the option that are
beneficially owned by FBOH on the Call Date; and FBOH shall warrant that it has
sole record and beneficial ownership of such shares, free and clear of all
liens, claims, charges, and encumbrances of any kind.
(c) As used herein, (i) "Current Market Price" means the average closing
sales price per share of Common Stock reported on NASDAQ (or if the Common Stock
is not reported on NASDAQ, the highest bid price quoted on the principal trading
market on which such shares are traded as reported by a recognized source) for
the 10 business days preceding the Call Date, and (ii) "FBOH's pretax per share
carrying cost" shall be the amount equal to the interest on the aggregate
Purchase Price paid for the shares of Preferred Stock being repurchased pursuant
to this Section 10 from the date of purchase to the date of repurchase at the
rate of interest announced by CIVISTA as its prime or base lending or reference
rate during such period, less any dividends received on the shares being
repurchased, divided by the number of shares being repurchased.
11. REGISTRATION RIGHTS. If requested by FBOH at any time and from time to
time within (a) the period beginning upon the first exercise of the Option and
ending three years thereafter or (b) the period beginning upon the occurrence of
either of the events set forth in clauses (i) and (ii) of Section 3(e), or the
receipt by FBOH of official notice that an approval of the Federal Reserve, OTS
or any other regulatory authority required for a repurchase pursuant to Section
9(c) will not be issued or granted, and ending 30 business days thereafter (but
solely as to shares of Preferred Stock with respect to which the required
approval was not received), CIVISTA shall prepare and file a registration
statement under the Securities Act, if such registration is necessary, in order
to permit the sale or other disposition of any or all shares of Preferred Stock
or other securities that have been purchased by or are issuable to FBOH upon
exercise of the Option in
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accordance with the intended method of sale or other disposition stated by FBOH,
including, if applicable, a "shelf" registration statement under Rule 415 under
the Securities Act or any successor provision, and CIVISTA shall use its best
efforts to qualify such shares or other securities under any applicable state
securities laws. FBOH shall use all reasonable efforts to cause, and to cause
any underwriters of any sale or other disposition to cause, any sale or other
disposition pursuant to registration statement to be effected on a widely
distributed basis. CIVISTA shall use all reasonable efforts to cause each such
registration statement to become effective, to obtain all consents or waivers of
other parties that are required therefor, and to keep such registration
statement effective for such period (not in excess of 180 days from the day such
registration statement first becomes effective) as may be reasonably necessary
to effect such sale or other disposition. In the event that FBOH requests
CIVISTA to file a registration statement following the failure to obtain an
approval required for an exercise of the Option as described in Section 3(e),
the closing of the sale or other disposition of Preferred Stock or other
securities pursuant to such registration statement shall occur substantially
simultaneously with the exercise of the Option. The obligations of CIVISTA
hereunder to file a registration statement and to maintain its effectiveness may
be suspended for one or more periods of time not exceeding 90 days in the
aggregate if the Board of Directors of CIVISTA determines that the filing of
such registration statement or the maintenance of its effectiveness would
require disclosure of nonpublic information that would materially and adversely
affect CIVISTA. Any registration statement prepared and filed under this Section
11, and any sale covered thereby, shall be at CIVISTA's expense, except for
underwriting discounts or commissions, brokers' fees, and the fees and
disbursements of FBOH's counsel related thereto. FBOH shall provide all
information reasonably requested by CIVISTA for inclusion in any registration
statement to be filed hereunder, and shall make all necessary representations
and warranties with respect to the accuracy and completeness thereof and shall
hold CIVISTA harmless with respect to any liability therefor. If, during the
time periods referred to in the first sentence of this Section 11, CIVISTA
effects a registration under the Securities Act of any Common Stock or Preferred
Stock for its own account or for the account of any stockholder of CIVISTA
(other than a registration on Form S-4, Form S-8, or any successor form),
CIVISTA shall afford FBOH the right to participate in such registration, and
such participation shall not affect the obligation of CIVISTA to effect a
registration statement for FBOH under this Section 11; provided that, if the
managing underwriters of such offering advise CIVISTA in writing that, in their
opinion, the number of shares of Preferred Stock requested to be included in
such registration exceeds the number that can be sold in such offering, CIVISTA
shall include the shares requested to be included in the offering by FBOH pro
rata with the shares intended to be included in the offering by CIVISTA. In
connection with any registration pursuant to this Section 11, CIVISTA and FBOH
shall provide each other and any underwriter of the offering with customary
representations, warranties, covenants, indemnification, and contribution in
connection with such registration.
12. FIRST REFUSAL. At any time after the first occurrence of a Purchase
Event and prior to the later of (a) the expiration of 24 months following the
first purchase of shares of Preferred Stock upon exercise of the Option and (b)
the termination of the right to exercise the Option pursuant to Section 3(c), if
FBOH desires to sell, assign, transfer, or otherwise dispose of all or any of
the shares of Preferred Stock or other securities purchased by it upon exercise
of the Option, FBOH shall give CIVISTA written notice of the proposed
transaction (an "Offeror's Notice"), identifying the proposed transferee,
accompanied by a copy of a binding offer to purchase such shares or other
securities signed by such transferee and setting forth the terms of the proposed
transaction. An Offeror's Notice shall be deemed an offer by FBOH to CIVISTA,
which may be accepted within 10 business days after receipt of such Offeror's
Notice by CIVISTA, to sell such shares or other securities to CIVISTA on the
same terms and conditions and at the same price as those set forth in the
Offeror's Notice for the proposed transaction. The purchase of any such shares
or other securities by CIVISTA shall be settled within 10 business days of the
date of the acceptance of the offer by CIVISTA, and the purchase price shall be
paid to FBOH in immediately available funds. Notwithstanding the foregoing, if
prior notification to or approval by the Federal Reserve, OTS or any other
regulatory authority is required in connection with such purchase, CIVISTA shall
promptly file and expeditiously process the required notice or application for
approval (and FBOH shall cooperate with CIVISTA in the filing of any such notice
or application and the obtaining of any such approval), and the purchase of such
shares or other securities by CIVISTA shall be settled within 10 business days
after the date on which, as the case may be, (a) any required notification
period has expired or been terminated or (b) such approval has been obtained. In
the
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event of the failure or refusal of CIVISTA to purchase all the shares or other
securities covered by an offeror's Notice, or if the Federal Reserve, OTS or any
other regulatory authority disapproves of CIVISTA's proposed purchase of such
shares or other securities, FBOH may thereafter sell all, but not less than all,
of such shares to the proposed transferee at no less than the price specified
and on terms no more favorable than those set forth in the Offeror's Notice. The
requirements of this Section 12 shall not apply to (x) any disposition as a
result of which the proposed transferee will purchase or acquire in such
transaction not more than 2% of the outstanding Common Stock or Preferred Stock,
(y) any sale by means of a public offering registered under the Securities Act
in which steps are taken to reasonably ensure that no purchaser will purchase or
acquire more than 2% of the outstanding Common Stock or Preferred Stock, or (z)
any transfer to a wholly owned subsidiary of FBOH that agrees in writing to be
bound by the terms hereof.
13. LISTING. If shares of Preferred Stock or any other securities to be
acquired upon exercise of the Option are quoted on NASDAQ, CIVISTA, at the
request of FBOH, will thereafter, use reasonable efforts to cause the Preferred
Stock to continue to be so quoted.
14. DIVISION OF OPTION. This Agreement (and the Option granted hereby) are
exchangeable, without expense, at the option of FBOH, upon presentation and
surrender of this Agreement at the principal office of CIVISTA, for other
Agreements providing for options of different denominations entitling the Holder
thereof to purchase in the aggregate the same number of shares of Preferred
Stock purchasable hereunder. The terms "Agreement" and "Option" as used herein
include any other Agreements and related options for which this Agreement and
the Option granted hereby may be exchanged. Upon receipt by CIVISTA of evidence
reasonably satisfactory to it of the loss, theft, destruction, or mutilation of
this Agreement, and (in the case of loss, theft, or destruction) of reasonably
satisfactory indemnification, and (in the case of mutilation) upon surrender and
cancellation of this Agreement, CIVISTA will execute and deliver a new Agreement
of like tenor and date. Any such new Agreement, when executed and delivered,
shall constitute an additional contractual obligation on the part of CIVISTA,
whether or not the Agreement so lost, stolen, destroyed, or mutilated shall at
any time be enforceable by anyone.
15. FBOH'S BREACH. Notwithstanding anything to the contrary contained
herein, all of CIVISTA's obligations under this Agreement shall immediately
terminate and the Option shall no longer be exercisable if the Merger Agreement
has been terminated and FBOH was in material breach of any term, condition,
covenant, representation or warranty of or contained within the Merger Agreement
when it was terminated; provided, however, that CIVISTA may not assert, for
purposes of this Section 14 only, a material breach of the Merger Agreement by
FBOH if FBOH terminated the Merger Agreement pursuant to the terms of the Merger
Agreement and CIVISTA failed to notify FBOH, upon FBOH's written request prior
to termination, of the material breach; provided, further, however, that CIVISTA
may not assert, for purposes of this Section 15 only, a material breach of the
Merger Agreement by FBOH if CIVISTA terminated the Merger Agreement pursuant to
the terms of the Merger Agreement and all material breaches by FBOH were
curable, unless CIVISTA provided written notice to FBOH of the material breaches
and an opportunity to cure as soon as reasonably practicable.
16. MISCELLANEOUS.
(a) Expenses. Except as otherwise provided in Section 11, each of the
parties hereto shall bear and pay all expenses incurred by it or on its behalf
in connection with the transactions contemplated hereunder, including fees and
expenses of its own financial consultants, investment bankers, accountants, and
counsel.
(b) Waiver and Amendment. Any provision of this Agreement may be waived at
any time by the party that is entitled to the benefits of such provision, but
such waiver shall only be effective if in writing and signed by the party
entitled to the benefits of such provision. This Agreement may not be modified,
amended, altered, or supplemented except upon the execution and delivery of a
written agreement executed by the parties hereto.
(c) Entire Agreement; No Third-Party Beneficiary; Severability. Except as
otherwise set forth in the Merger Agreement, this Agreement, the Merger
Agreement, and the other documents and instruments referred to therein and
herein (a) constitute the entire agreement and understanding, and supersede all
prior
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agreements and understandings, both written and oral, between the parties with
respect to their subject matter and (b) are not intended to confer upon any
person other than the parties hereto any rights or remedies. If any term,
provision, covenant, or restriction of this Agreement is held by a court of
competent jurisdiction or a federal or state regulatory agency to be invalid,
void, or unenforceable, the other terms, provisions, covenants, and restrictions
of this Agreement shall remain in full force and effect and shall not be
affected, impaired, or invalidated. If for any reason such court or regulatory
agency determines that the Option does not permit FBOH to acquire, or does not
require CIVISTA to repurchase, the full number of shares of Preferred Stock as
provided in Sections 3 and 9 (as adjusted pursuant to Section 8), it is the
express intention of CIVISTA to allow FBOH to acquire, or to require CIVISTA to
repurchase, such lesser number of shares as may be permissible without any
amendment or modification hereof.
(d) Governing Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Ohio without regard to any applicable
conflicts of law rules.
(e) Descriptive Headings. The descriptive headings contained herein are for
convenience of reference only and shall not affect in any way the meaning or
interpretation of this Agreement.
(f) Notices. All notices and other communications hereunder shall be in
writing and shall be deemed given if delivered personally, telecopied (with
confirmation), or mailed by registered or certified mail (return receipt
requested) to the parties at the following addresses (or at such other address
as shall be specified by like notice):
<TABLE>
<S> <C>
TO CIVISTA: TO FBOH:
Richard G. Gilbert, Chairman and Howard L. Flood, President and
Chief Executive Officer Chief Executive Officer
The CIVISTA Corporation First Bancorporation of Ohio
100 Central Plaza South 106 South Main Street
Canton, Ohio 44701 Akron, Ohio 44308
WITH A COPY TO: WITH COPIES TO:
Jeffrey J. Margulies, Esq. Terry E. Patton, Senior Vice President
Squire, Sanders & Dempsey and Secretary
4900 Society Center First Bancorporation of Ohio
127 Public Square 106 South Main Street
Cleveland, OH 44114-1304 Akron, Ohio 44308
</TABLE>
(g) Counterparts. This Agreement and any amendments hereto may be executed
in two counterparts, each of which shall be considered one and the same
agreement and shall become effective when both counterparts have been signed by
each of the parties and delivered to the other party, it being understood that
both Parties need not sign the same counterpart.
(h) Assignment. Neither this Agreement nor any of the rights, interests or
obligations hereunder or under the Option shall be assigned by any of the
parties hereto (whether by operation of law or otherwise) without the prior
written consent of the other party. Subject to the preceding sentence, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.
(i) Further Assurances. In the event of any exercise of the Option by FBOH,
CIVISTA and FBOH shall execute and deliver all other documents and instruments
and take all other action that may be reasonably necessary in order to
consummate the transactions provided for by such exercise.
(j) Specific Performance. This Agreement may be enforced by either party
through specific performance, injunctive relief, and other equitable relief.
Both parties hereby waive any requirement for the securing or posting of any
bond in connection with the obtaining of any such equitable relief and agree
that this provision is without prejudice to any other rights that the parties
hereto may have for any failure to perform this Agreement.
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IN WITNESS WHEREOF, CIVISTA and FBOH have caused this Agreement to be
signed by their respective officers thereunto duly authorized, all as of the day
and year first written above.
Attest:
/s/ Janice R. Van Voorhis
- ------------------------------------------------------
Janice R. Van Voorhis, Secretary
Attest:
/s/ Terry E. Patton
- ------------------------------------------------------
Terry E. Patton, Secretary
THE CIVISTA CORPORATION
By: /s/ Richard G. Gilbert
--------------------------------------------------
Richard G. Gilbert, Chairman and
Chief Executive Officer
By: /s/ Paul G. Basner
--------------------------------------------------
Paul G. Basner, Vice Chairman
FIRST BANCORPORATION OF OHIO
By: /s/ Howard L. Flood
--------------------------------------------------
Howard L. Flood, President and
Chief Executive Officer
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EXHIBIT 1(D)
TERMS OF PREFERRED STOCK
1. DESIGNATION AND AMOUNT. The shares of this series of Preferred Stock of
the CIVISTA Corporation (the "Corporation") shall be designated as "Series A
Preferred Stock," and the number of authorized shares constituting the Series A
Preferred Stock shall be four hundred thousand (400,000). Such number of shares
may be increased or decreased by resolution of the Board of Directors; provided,
that no decrease shall reduce the number of shares of Series A Preferred Stock
to a number less than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding options, rights or
warrants or upon the conversion of any outstanding securities issued by the
Corporation convertible into Series A Preferred Stock.
2. DIVIDENDS.
a. Subject to the rights of the holders of any shares of any series of
Preferred Stock (or any similar stock) ranking prior and superior to the
Series A Preferred Stock with respect to dividends, the holders of shares
of Series A Preferred Stock, in preference to the holders of shares of
stock ranking junior to the shares of Series A Preferred Stock with respect
to dividends, shall be entitled to receive, when, as and if declared by the
Board of Directors out of funds legally available for the purpose,
quarterly dividends payable in cash in an amount per share equal to one
fourth of one cent (.25 cents), commencing on the first of the following
dates to occur after the first issuance of Series A Preferred Stock:
January 1, April 1, July 1, and October 1.
b. In the event the Corporation, after having declared and made any
dividends required under Section 2.a, declares a dividend payable in cash
to the holders of shares of Common Stock, the holders of Series A Preferred
Stock shall participate in that dividend at the same rate per share and on
the same conditions as are applicable to the shares of Common Stock. In the
event the Corporation shall at any time declare or pay any dividend on the
Common Stock payable in shares of Common Stock, or effect a subdivision or
combination or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in shares of
Common Stock) into a greater or lesser number of shares of Common Stock,
then in each such case the amount to which holders of shares of Series A
Preferred Stock would have been entitled immediately prior to such event
under the preceding sentence shall be adjusted by multiplying such amount
by a fraction, the numerator of which is the number of shares of Common
Stock outstanding immediately after such event and the denominator of which
is the number of shares of Common Stock that were outstanding immediately
prior to such event.
c. Notwithstanding the foregoing, the amounts to which holders of
shares of Series A Preferred Stock are entitled as dividends under
divisions a and b of this Section 2 in any calendar year shall not exceed
$33.50 per share of Series A Preferred Stock.
3. LIQUIDATION, DISSOLUTION OR WINDING UP.
a. Upon any voluntary liquidation, dissolution or winding-up of the
affairs of the Corporation, no distribution shall be made (1) to the
holders of shares of stock ranking junior (either as to dividends or upon
liquidation, dissolution or winding up) to the Series A Preferred Stock
unless, prior thereto, the holders of shares of Series A Preferred Stock
shall have received $1 per share, plus an amount equal to accrued and
unpaid dividends and distributions thereon, whether or not declared, to the
date of such payment, or (2) to the holders of shares of stock ranking on a
parity (either as to dividends or upon liquidation, dissolution or winding
up) with the Series A Preferred Stock, except distributions made ratably on
the Series A Preferred Stock and all such parity stock in proportion to the
total amounts to which the holders of all such shares are entitled upon
such liquidation, dissolution or winding up.
b. After the Corporation has made any payments required under division
a of this Section 3, the holders of shares of Series A Preferred Stock
shall be entitled to receive distributions at the same rate per share and
on the same conditions as are applicable to the shares of Common Stock of
the Corporation. In the event the Corporation shall at any time declare or
pay any dividend on the Common Stock payable in shares of Common Stock, or
effect a subdivision or combination or consolidation of the outstanding
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shares of Common Stock (by reclassification or otherwise than by payment of
a dividend in shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the amount to which holders
of shares of Series A Preferred Stock would have been entitled immediately
prior to such event under the preceding sentence shall be adjusted by
multiplying such amount by a fraction, the numerator of which is the number
of shares of Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
c. Notwithstanding the foregoing, the amounts which are payable under
divisions a and b of this Section 3 upon voluntary liquidation, dissolution
or winding up shall not exceed $33.50 per share of Series A Preferred
Stock, except that the foregoing limitation shall not apply to the payment
of amounts representing accrued and unpaid dividends and distributions,
which amounts shall be subject instead to the limitation contained in
Section 2.c.
4. OTHER TERMS. The terms of the Series A Preferred Stock shall otherwise
be in accordance with Article Fourth of the Corporation's Amended Articles of
Incorporation.
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APPENDIX E
OHIO DISSENTERS' RIGHTS STATUTE
<PAGE> 132
RELIEF TO DISSENTING SHAREHOLDER
OF DOMESTIC CORPORATION
OHIO REVISED CODE 1701.85
(A) (1) A shareholder of a domestic corporation is entitled to relief as a
dissenting shareholder in respect of the proposals in sections 1701.71, 1701.74,
and 1701.84 of the Revised Code, only in compliance with this section.
(2) If the proposal must be submitted to the shareholders of the
corporation involved, the dissenting shareholder shall be a record holder of the
shares of the corporation as to which he seeks relief as of the date fixed for
the determination of shareholders entitled to notice of a meeting of the
shareholders at which the proposal is to be submitted, and such shares shall not
have been voted in favor of the proposal. Not later than ten days after the date
on which the vote on such proposal was taken at the meeting of the shareholders,
the shareholder shall deliver to the corporation a written demand for payment to
him of the fair cash value of the shares as to which he seeks relief, stating
his address, the number and class of such shares, and the amount claimed by him
as the fair cash value of the shares.
(3) The dissenting shareholder entitled to relief under division (C) of
section 1701.84 of the Revised Code in the case of a merger pursuant to section
1701.80 of the Revised Code and a dissenting shareholder entitled to relief
under division (E) of section 1701.84 of the Revised Code in the case of a
merger pursuant to section 1701.801 of the Revised Code shall be a record holder
of the shares of the corporation as to which he seeks relief as of the date on
which the agreement of merger was adopted by the directors of that corporation.
Within twenty days after he has been sent the notice provided in section 1701.80
or 1701.801 [1701.80.1] of the Revised Code, the shareholder shall deliver to
the corporation a written demand for payment with the same information as that
provided for in division (A)(2) of this section.
(4) In the case of a merger or consolidation, a demand served on the
constituent corporation involved constitutes service on the surviving or the new
corporation, whether served before, on, or after the effective date of the
merger or consolidation.
(5) If the corporation sends to the dissenting shareholder, at the
address specified in his demand, a request for the certificates representing the
shares as to which he seeks relief, he, within fifteen days from the date of the
sending of such request, shall deliver to the corporation the certificates
requested, in order that the corporation may forthwith endorse on them a legend
to the effect that demand for the fair cash value of such shares has been made.
The corporation promptly shall return such endorsed certificates to the
shareholder. Failure on the part of the shareholder to deliver such certificates
terminates his rights as a dissenting shareholder, at the option of the
corporation, exercised by written notice sent to him within twenty days after
the lapse of the fifteen-day period, unless a court for good cause shown
otherwise directs. If shares represented by a certificate on which such a legend
has been endorsed are transferred, each new certificate issued for them shall
bear a similar legend, together with the name of the original dissenting holder
of such shares. Upon receiving a demand for payment from a dissenting
shareholder who is the record holder of uncertificated securities, the
corporation shall make an appropriate notation of the demand for payment in its
shareholder records. If uncertificated shares for which payment has been
demanded are to be transferred, any new certificate issued for the shares shall
bear the legend required for certificated securities as provided in this
paragraph. A transferee of the shares so endorsed, or of uncertificated
securities where such notation has been made, acquires only such rights in the
corporation as the original dissenting holder of such shares had immediately
after the service of a demand for payment of the fair cash value of the shares.
Such request by the corporation is not an admission by the corporation that the
shareholder is entitled to relief under this section.
(B) Unless the corporation and the dissenting shareholder shall have come
to an agreement on the fair cash value per share of the shares as to which he
seeks relief, the shareholder or the corporation, which in case of a merger or
consolidation may be the surviving or the new corporation, within three months
after the service of the demand by the shareholder, may file a complaint in the
court of common pleas of the county in which the principal office of the
corporation which issued such shares is located, or was located at the time when
the proposal was adopted by the shareholders of the corporation, or, if the
proposal was not required to be
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<PAGE> 133
submitted to the shareholders, was approved by the directors. Other dissenting
shareholders, within the period of three months, may join as plaintiffs, or may
be joined as defendants in any such proceeding, and any two or more such
proceedings may be consolidated. The complaint shall contain a brief statement
of the facts, including the vote and the facts entitling the dissenting
shareholder to the relief demanded. No answer to such complaint is required.
Upon the filing of the complaint, the court, on motion of the petitioner, shall
enter an order fixing a date for a hearing on the complaint, and requiring that
a copy of the complaint and a notice of the filing and of the date for hearing
be given to the respondent or defendant in the manner in which summons is
required to be served or substituted service is required to be made in other
cases. On the day fixed for the hearing on the complaint or any adjournment of
it, the court shall determine from the complaint and from such evidence as is
submitted by either party whether the shareholder is entitled to be paid the
fair cash value of any shares and, if so, the number and class of such shares.
If the court finds that the shareholder is so entitled, the court may appoint
one or more persons as appraisers to receive evidence and to recommend a
decision on the amount of the fair cash value. The appraisers have such power
and authority as is specified in the order of their appointment. The court
thereupon shall make a finding as to the fair cash value of a share, and shall
render judgment against the corporation for the payment of it, with interest at
such rate and from such date as the court considers equitable. The costs of the
proceeding, including reasonable compensation to the appraisers to be fixed by
the court, shall be assessed or apportioned as the court considers equitable.
The proceeding is a special proceeding, and final orders in it may be vacated,
modified, or reversed on appeal pursuant to the rules of appellate procedure
and, to the extent not in conflict with those rules, Chapter 2505 of the Revised
Code. If, during the pendency of any proceeding instituted under this section, a
suit or proceeding is or has been instituted to enjoin or otherwise to prevent
the carrying out of the action as to which the shareholder has dissented, the
proceeding instituted under this section shall be stayed until the final
determination of the other suit or proceeding. Unless any provision in division
(D) of this section is applicable, the fair cash value of the shares as agreed
upon by the parties or as fixed under this section shall be paid within thirty
days after the date of final determination of such value under this division,
the effective date of the amendment to the articles, or the consummation of the
other action involved, whichever occurs last. Upon the occurrence of the last
such event, payment shall be made immediately to a holder of uncertificated
securities entitled to such payment. In the case of holders of shares
represented by certificates, payment shall be made only upon and simultaneously
with the surrender to the corporation of the certificates representing the
shares for which such payment is made.
(C) If the proposal was required to be submitted to the shareholders of the
corporation, fair cash value as to those shareholders shall be determined as of
the day prior to that on which the vote by the shareholders was taken and, in
the case of a merger pursuant to section 1701.80 or 1701.801 [1701.80.1] of the
Revised Code, fair cash value as to shareholders of a constituent subsidiary
corporation shall be determined as of the day before the adoption of the
agreement of merger by the directors of the particular subsidiary corporation.
The fair cash value of a share for the purposes of this section is the amount
that a willing seller, under no compulsion to sell, would be willing to accept,
and that a willing buyer, under no compulsion to purchase, would be willing to
pay, but in no event shall the fair cash value of it exceed the amount specified
in the demand of the particular shareholder. In computing such fair cash value,
any appreciation or depreciation in market value resulting from the proposal
submitted to the directors or to the shareholders shall be excluded.
(D) The right and obligation of a dissenting shareholder to receive such
fair cash value and to sell such shares as to which he seeks relief, and the
right and obligation of the corporation to purchase such shares and to pay the
fair cash value of them terminates if:
(1) Such shareholder has not complied with this section, unless the
corporation by its directors waives such failure;
(2) The corporation abandons, or is finally enjoined or prevented from
carrying out, or the shareholders rescind their adoption, of the action
involved;
(3) The shareholder withdraws his demand, with the consent of the
corporation by its directors;
(4) The corporation and the dissenting shareholder shall not have come
to an agreement as to the fair cash value per share, and neither the
shareholder nor the corporation shall have filed or joined in a complaint
under division (B) of this section within the period provided.
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<PAGE> 134
(E) From the time of giving the demand, until either the termination of the
rights and obligations arising from it or the purchase of the shares by the
corporation, all other rights accruing from such shares, including voting and
dividend or distribution rights, are suspended. If during the suspension, any
dividend or distribution is paid in money upon shares of such class, or any
dividend, distribution, or interest is paid in money upon any securities issued
in extinguishment of or in substitution for such shares, an amount equal to the
dividend, distribution, or interest which, except for the suspension, would have
been payable upon such shares or securities, shall be paid to the holder of
record as a credit upon the fair cash value of the shares. If the right to
receive fair cash value is terminated otherwise than by the purchase of the
shares by the corporation, all rights of the holder shall be restored and all
distributions which, except for the suspension, would have been made shall be
made to the holder of record of the shares at the time of termination.
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<PAGE> 135
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Pursuant to Article Sixth of the Amended and Restated Articles of
Incorporation of Bancorporation, directors, officers, employees or agents of
Bancorporation, or persons serving at its request as directors, trustees,
officers, employees or agents of any other entity or enterprise, are entitled
to indemnification for all liabilities and expenses reasonably incurred in
connection with any claim, action, suit or proceeding, civil, criminal,
administrative or investigative, to which any person shall be made a party by
reason of his being or having been a director, officer, employee or agent of
Bancorporation, or his acting or having acted as a director, trustee, officer,
employee or agent of any other entity or enterprise upon Bancorporation's
request; provided, however, that such person acted in good faith and in a
manner he reasonably believed to be in the best interests of Bancorporation or
not opposed to the best interest of Bancorporation or such other entity or
enterprise and, with respect to a criminal proceeding, where such person had no
reasonable cause to believe his conduct was unlawful. Indemnification does not
extend to any actions or proceedings in which a person is adjudged liable for
negligence or misconduct in the performance of his duties to Bancorporation or
such other entity, except for amounts which a court, upon application and
despite an adjudication of liability, may deem proper in view of all of the
circumstances of the case.
Article Sixth further provides that the termination of any claim,
action, suit or proceeding, civil or criminal, by settlement, judgment,
conviction or plea of nolo contendere shall not create a presumption that the
person failed to meet any standard of conduct set forth in Article Sixth. Any
person who has been wholly successful in the opinion of counsel shall be
entitled to indemnification as a matter of right. Except as provided in the
preceding sentence, indemnification shall be made by Bancorporation if (1): a
quorum of disinterested members, or members who have been wholly successful
with respect to such claim, action, suit or proceeding of the Board of
Directors of Bancorporation determine that such person has met the standards of
conduct set forth in Article Sixth, (2) independent legal counsel set forth an
opinion that such person has met the standards of conduct set forth in Article
Sixth, (3) indemnification is approved by the affirmative vote of the majority
of shareholders of Bancorporation entitled to vote on such proposal, or (4)
indemnification is approved by the court where any such suit, action or
proceeding is brought. Bancorporation may advance, prior to final disposition,
expenses incurred with respect to any claim, action, suit or proceeding upon
receipt of an undertaking by or on behalf of the recipient to pay such amount
unless it is ultimately determined that he is entitled to indemnification.
These rights of indemnification inure to the benefit of the heirs of any person
entitled thereto.
The rights provided in Article Sixth are in addition to any rights
provided by contract or as a matter of law. Ohio Revised Code Section
1701.13(E) includes indemnification provisions similar to Article Sixth.
Section 1701.13(E) further authorizes a corporation to purchase and maintain
insurance on behalf of any director, trustee, officer, employee or agent for
any liability asserted against him or arising out of his status as such.
Bancorporation presently maintains insurance for the benefit of persons
entitled to indemnification.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES
(a) Exhibits. See the Exhibit Index located at page II-5.
(b) Financial Statement Schedules
All financial statement schedules have been omitted because they
are not applicable or the required information is shown in the
financial statements or related notes thereto incorporated by
reference in the Prospectus and Proxy Statement.
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<PAGE> 136
(c) Information Provided Pursuant to Item 4(b) of Form S-4
Furnished as Appendices B and C to the Prospectus and Joint Proxy
Statement
ITEM 22. UNDERTAKINGS
(1) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, as amended (the
"Securities Act") each filing of the registrant's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act") (and, when applicable, each filing of an employee
benefit plan's annual report pursuant to Section 15(d) of the Exchange Act)
that is incorporated by reference in the registration statement shall be deemed
to be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(2) The undersigned registrant hereby undertakes as follows: that
prior to any public reoffering of the securities registered hereunder through
use of a prospectus which is a part of the registration statement, by any
person or party who is deemed to be an underwriter within the meaning of Rule
145(c), the issuer undertakes that such reoffering prospectus will contain the
information called for by the applicable registration form with respect to
reofferings by persons who may be deemed underwriters, in addition to the
information called for by the other items of the applicable form.
(3) The registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (2) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Securities Act and is used in
connection with an offering of securities subject to Rule 415 will be filed as
part of an amendment to the registration statement and will not be used until
such amendment is effective, and that, for purposes of determining any
liability under the Securities Act, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(4) The undersigned registrant hereby undertakes to respond to
requests for information that is incorporated by reference into the prospectus
pursuant to items 4, 10(b), 11 or 13 of this Form S-4, within one business day
of receipt of such request, and to send the incorporated documents by first
class mail or other equally prompt means. This includes information contained
in documents filed subsequent to the effective date of the registration
statement through the date of responding to the request.
(5) The undersigned registrant hereby undertakes to supply by means of
a post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
registrant of expenses incurred or paid by a director, officer or controlling
person of the registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
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<PAGE> 137
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Akron,
State of Ohio, on the 26th day of October, 1994.
FIRST BANCORPORATION OF OHIO
By: /s/ Howard L. Flood
----------------------------------
Howard L. Flood, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1933, this
registration statement has been signed on the 26th day of October, 1994, by
the following persons (including a majority of the Board of Directors of the
registrant) in the capacities indicated.
SIGNATURE TITLE
/s/ Howard L. Flood President and Chief Executive Officer
- ------------------------------- (Principal Executive Officer) and
Howard L. Flood Director
/s/ Gary J. Elek Senior Vice President and Treasurer
- ------------------------------- (Principal Financial Officer and
Gary J. Elek Principal Accounting Officer)
John C. Blickle* Director
- -------------------------------
John C. Blickle
Robert M. Carter* Director
- -------------------------------
Robert M. Carter
Richard A. Chenoweth* Director
- -------------------------------
Richard A. Chenoweth
Elizabeth A. Dalton* Director
- -------------------------------
Elizabeth A. Dalton
Terry L. Haines* Director
- -------------------------------
Terry L. Haines
Richard L. Hardgrove* Director
- -------------------------------
Richard L. Hardgrove
Clifford J. Isroff* Director
- -------------------------------
Clifford J. Isroff
(signatures continued on next page)
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<PAGE> 138
(signatures continued from previous page)
SIGNATURE TITLE
Philip A. Lloyd, II* Director
- -------------------------------
Philip A. Lloyd, II
Robert G. Merzweiler* Director
- -------------------------------
Robert G. Merzweiler
Stephen E. Myers* Director
- -------------------------------
Stephen E. Myers
Gilbert H. Neal* Director
- -------------------------------
Gilbert H. Neal
Roger T. Read* Director
- -------------------------------
Roger T. Read
Justin T. Rogers, Jr.* Director
- -------------------------------
Justin T. Rogers, Jr.
Director
- -------------------------------
Del Spitzer
*The undersigned, by signing his name hereto, does sign and execute this
registration statement on behalf of each of the indicated officers and
directors of First Bancorporation of Ohio pursuant to a Power of Attorney
executed by each such officer and director and filed with this registration
statement.
Dated: October 26, 1994 /s/ Kevin C. O'Neil
--------------------------------
Kevin C. O'Neil
Attorney-in-Fact
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<PAGE> 139
EXHIBIT INDEX
EXHIBIT NUMBER
(2)1 Agreement of Affiliation and Plan of Merger by and between
First Bancorporation of Ohio and The CIVISTA Corporation
(3)(a)2 Amended and Restated Articles of Incorporation of First
Bancorporation of Ohio
(3)(b)3 Code of Regulations, as amended, of First Bancorporation of
Ohio
(3)(c)4 Shareholders Rights Agreement dated October 21, 1993 between
First Bancorporation of Ohio and First National Bank of Ohio
(5) Opinion of Brouse & McDowell Regarding Legality
(8)5 Form of Opinion of Brouse & McDowell Regarding Certain Tax
Matters
(10)(a)6 1982 Incentive Stock Option Plan of First Bancorporation of
Ohio
(10)(b)7 Incentive Stock Option Agreement relating to 1982 Incentive
Stock Option Plan of First Bancorporation of Ohio
(10)(c)8 1992 Stock Option Program of First Bancorporation of Ohio
(10)(d)9 Incentive Stock Option Agreement relating to 1992 Stock
Option Program of First Bancorporation of Ohio
____________________
1 Incorporated herein by reference to Appendix A to the
Prospectus and Joint Proxy Statement included in this
Registration Statement.
2 Incorporated herein by reference to Exhibit 3 to First
Bancorporation of Ohio's ("Bancorporation") Form 8-K filed with
the Commission on November 4, 1993.
3 Incorporated by reference to Exhibit 3(b) of Bancorporation's
Registration Statement on Form S-4 (No. 33-55491) filed with the Commission on
September 16, 1994.
4 Incorporated herein by reference to Exhibit 4 to
Bancorporation's Registration Statement on Form 8-A filed with
the Commission on November 4, 1993.
5 Incorporated by reference to Exhibit 8 of Bancorporation's
Registration Statement on Form S-4 (No. 33-55491) filed with the Commission on
September 16, 1994.
6 Incorporated by reference to Exhibit 4.2 of
Bancorporation's Registration Statement on Form S-8 (No. 33-
7266), filed with the Commission on July 15, 1986.
7 Incorporated by reference to Exhibit 4.3 of
Bancorporation's Registration Statement on Form S-8 (No. 33-
7266), filed with the Commission on July 15, 1986.
8 Incorporated by reference to Exhibit (10)(c) of
Bancorporation's Form 10-K for the fiscal year ended December 31,
1991, filed with the Commission on March 16, 1992.
9 Incorporated by reference to Exhibit (10)(d) of
Bancorporation's Form 10-K for the fiscal year ended December 31,
1991, filed with the Commission on March 16, 1992.
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<PAGE> 140
EXHIBIT NUMBER
(10)(e)10 Non-Qualified Stock Option Agreement relating to the 1992
Stock Option Program of First Bancorporation of Ohio
(10)(f)11 Employee Stock Purchase Plan of First Bancorporation of Ohio
(10)(g)12 1992 Directors Stock Option Program
(10)(h)13 Directors Stock Option Agreement relating to the 1992
Directors Stock Option Program of First Bancorporation of
Ohio
(10)(i)14 First Bancorporation of Ohio Executive Supplemental
Retirement Plan
(10)(j)15 Form of First Bancorporation of Ohio Unfunded Supplemental
Benefit Plan
(10)(k)16 First Bancorporation of Ohio Directors' Deferral Fee Plan
(10)(l)17 Termination Agreement of Howard L. Flood
(10)(m)18 Form of Termination Agreement with the chief executive
officers of the Subsidiaries of First Bancorporation of Ohio
____________________
10 Incorporated by reference to Exhibit (10)(e) of
Bancorporation's Form 10-K for the fiscal year ended December 31,
1991, filed with the Commission on March 16, 1992.
11 Incorporated by reference to Exhibit (10)(f) of
Bancorporation's Form 10-K for the fiscal year ended December 31,
1991, filed with the Commission on March 16, 1992.
12 Incorporated by reference to Exhibit (10)(g) of
Bancorporation's Form 10-K for the fiscal year ended December 31,
1991, filed with the Commission on March 16, 1992.
13 Incorporated by reference to Exhibit (10)(h) of
Bancorporation's Form 10-K for the fiscal year ended December 31,
1991, filed with the Commission on March 16, 1992.
14 Incorporated by reference to Exhibit (10)(i) of
Bancorporation's Form 10-K for the fiscal year ended December 31,
1991, filed with the Commission on March 16, 1992.
15 Incorporated by reference to Exhibit (10)(j) of
Bancorporation's Form 10-K for the fiscal year ended December 31,
1991, filed with the Commission on March 16, 1992.
16 Incorporated by reference to Exhibit (10)(e) of
Bancorporation's Form 10-K for the fiscal year ended December 31,
1989, filed with the Commission on March 13, 1990.
17 Incorporated by reference to Exhibit (10)(l) of
Bancorporation's Form 10-K for the fiscal year ended December 31,
1991, filed with the Commission on March 16, 1992.
18 Incorporated by reference to Exhibit (10)(m) of
Bancorporation's Form 10-K for the fiscal year ended December 31,
1992, filed with the Commission on March 15, 1993.
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<PAGE> 141
EXHIBIT NUMBER
(10)(n)19 Membership Agreement of Howard L. Flood with respect to the
First Bancorporation of Ohio Executive Supplemental
Retirement Plan
(10)(o)20 Membership Agreement of Scott A. Lyons, Jr. with respect to
the First Bancorporation of Ohio Executive Supplemental
Retirement Plan
(10)(p)21 Supplemental Pension Agreement of John R. Macso
(10)(q)22 First Bancorporation of Ohio Executive Post-Retirement Death
Benefit Plan
(10)(r)23 Addendum to Termination Agreement of Richard L. Hardgrove
(10)(s)24 First Amendment to the First Bancorporation of Ohio Executive
Supplemental Retirement Plan
(10)(t)25 First Amendment to the First Bancorporation of Ohio Executive
Post-Retirement Death Benefit Plan
(10)(u)26 Second Amendment to the First Bancorporation of Ohio
Executive Post-Retirement Death Benefit Plan
(10)(v)27 The CIVISTA Corporation Stock Purchase Option
____________________
19 Incorporated by reference to Exhibit (10)(o) of
Bancorporation's Form 10-K for the fiscal year ended December 31,
1991, filed with the Commission on March 16, 1992.
20 Incorporated by reference to Exhibit (10)(q) of
Bancorporation's Form 10-K for the fiscal year ended December 31,
1991, filed with the Commission on March 16, 1992.
21 Incorporated by reference to Exhibit (10)(r) of
Bancorporation's Form 10-K for the fiscal year ended December 31,
1991, filed with the Commission on March 16, 1992.
22 Incorporated by reference to Exhibit (10)(q) of
Bancorporation's Form 10-K for the fiscal year ended December 31,
1992, filed with the Commission on March 15, 1993.
23 Incorporated herein by reference to Exhibit (10)(r) of
Bancorporation's Form 10-K for the fiscal year ended December 31,
1993, filed with the Commission on March 17, 1994.
24 Incorporated herein by reference to Exhibit (10)(s) of
Bancorporation's Form 10-K for the fiscal year ended December 31,
1993, filed with the Commission on March 17, 1994.
25 Incorporated herein by reference to Exhibit (10)(t) of
Bancorporation's Form 10-K for the fiscal year ended December 31,
1993, filed with the Commission on March 17, 1994.
26 Incorporated herein by reference to Exhibit (10)(u) of
Bancorporation's Form 10-K for the fiscal year ended December 31,
1993, filed with the Commission on March 17, 1994.
27 Incorporated herein by reference to Appendix D to the
Prospectus and Joint Proxy Statement included in this
Registration Statement.
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<PAGE> 142
EXHIBIT NUMBER
(15) Letter Regarding Unaudited Interim
Financial Information of The CIVISTA Corporation
(21) Subsidiaries of First Bancorporation of Ohio
(23)(a) Consents of KPMG Peat Marwick LLP
(23)(b) Consent of Coopers & Lybrand, L.L.P.
(23)(c) Consent of Brouse & McDowell
(23)(d) Consent of McDonald & Company Securities, Inc.
(23)(e) Consent of Alex. Brown & Sons Incorporated
(24)28 Power of Attorney
(99)(a)29 Form of Proxy - The CIVISTA Corporation
(99)(b)30 Form of Proxy - First Bancorporation of Ohio
______________________
28 Incorporated by reference to Exhibit 24 of Bancorporation's
Registration Statement on Form S-4 (No. 33-55491) filed with
the Commission on September 16, 1994.
29 Incorporated by reference to Exhibit 99(a) of
Bancorporation's Registration Statement on Form S-4 (No.
33-55491) filed with the Commission on September 16, 1994.
30 Incorporated by reference to Exhibit 99(b) of
Bancorporation's Registration Statement on Form S-4 (No.
33-55491) filed with the Commission on September 16, 1994.
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<PAGE> 143
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________________
AMENDMENT NO. 1
TO
FORM S-4 REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
____________________
FIRST BANCORPORATION OF OHIO
(EXACT NAME OF ISSUER AS SPECIFIED IN ITS CHARTER)
_______________
EXHIBITS
_______________
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EXHIBIT 5
OPINION OF BROUSE & MCDOWELL
REGARDING LEGALITY
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BROUSE &
MCDOWELL
==================================
A LEGAL PROFESSIONAL ASSOCIATION
500 FIRST NATIONAL TOWER AKRON, OHIO 44308-1471
AKRON: 216/535/5711 CLEVELAND: 216/659-4620 FAX: 216/253-8601/8602
October 26, 1994
First Bancorporation of Ohio
106 South Main Street
Akron, Ohio 44308
Gentlemen:
Reference is made to your pre-effective Amendment No. 1 to
Registration Statement on Form S-4 (No. 33-55491) filed with the Securities
and Exchange Commission ("Commission") in connection with the registration for
issuance by First Bancorporation of Ohio (the "Company") of up to 6,513,119
shares of the Company's common stock, no par value ("Shares") in accordance
with the terms of the Agreement of Affiliation and Plan of Merger dated August
10, 1994, between the Company and The CIVISTA Corporation. We have acted as
legal counsel to you in connection with such Registration Statement.
We have examined such documents, records and matters of law as we have
deemed necessary for purposes of this opinion and based thereon, we are of the
opinion that:
1. The Company is a duly organized and existing corporation in
good standing under the laws of the State of Ohio.
2. The Shares that may be issued or transferred and sold pursuant
to the Registration Statement are duly authorized, and will be, when issued or
transferred and sold in accordance with the Registration Statement and the
prospectus comprising a part thereof, validly issued, fully paid and
nonassessable.
We hereby consent to the filing of this opinion as Exhibit 5 to the
pre-effective Amendment No. 1 to Registration Statement on Form S-4 (No.
33-55491) filed by the Company to effect the registration of the Shares and
to the reference to this firm under the caption "Legal Opinion" in the
prospectus comprising a part of the Registration Statement.
Very truly yours,
BROUSE & McDOWELL
/s/ Brouse & McDowell
[94-226]
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EXHIBIT 15
LETTER REGARDING UNAUDITED
INTERIM FINANCIAL INFORMATION
OF THE CIVISTA CORPORATION
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The CIVISTA Corporation
Canton, Ohio
Ladies and Gentlemen:
Re: Registration Statement S-4 - No. 33-55491
With respect to the subject registration statement, we acknowledge our
awareness of the use therein of our reports dated February 4, 1994, May 6,
1994 and August 5, 1994 related to our reviews of interim financial
information.
Pursuant to Rule 436(c) under the Securities Act of 1933, such reports are not
considered part of a registration prepared or certified by an acountant or a
report prepared or certified by an accountant within the meaning of sections 7
and 11 of the Act.
Very truly yours,
/s/ KPMG Peat Marwick LLP
Cleveland, Ohio
October 26, 1994
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EXHIBIT 21
SUBSIDIARIES OF
FIRST BANCORPORATION OF OHIO
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SUBSIDIARIES OF FIRST BANCORPORATION OF OHIO
CORPORATION PERCENT OF OWNERSHIP
First National Bank of Ohio
(national banking association) 100%
The Old Phoenix National Bank of Medina
(national banking association) 100%
Elyria Savings & Trust National Bank
(national banking association) 100%
Peoples National Bank
(national banking association) 100%
FBOH Credit Life Insurance Company
(an Arizona corporation) 100%
The First National Bank in Massillon
(national banking association) 100%
Peoples Bank, N.A.
(national banking association) 100%
Bancorp Trust Company, National Association
(national trust company) 100%
Life Savings Bank, FSB
(federal savings association) 100%
FBOH Community Development Corporation
(an Ohio corporation) 100%
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EXHIBIT 23(A)
CONSENTS OF KPMG PEAT MARWICK LLP
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The Board of Directors
The CIVISTA Corporation:
We consent to the use of our reports incorporated herein by reference and to
the reference to our firm under the heading "Experts" in the Registration
Statement No. 33-55491.
KPMG Peat Marwick LLP
/s/ KPMG Peat Marwick LLP
Cleveland, Ohio
October 26, 1994
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The Board of Directors
First Bancorporation of Ohio:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the heading "Experts" in the Form S-4 Registration
Statement No. 33-55491.
KPMG Peat Marwick LLP
/s/ KPMG Peat Marwick LLP
Cleveland, Ohio
October 26, 1994
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EXHIBIT 23(B)
CONSENT OF COOPERS & LYBRAND, L.L.P.
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CONSENT OF INDEPENDENT AUDITORS
We consent to the incorporation by reference in this registration statement
on Form S-4 of our report dated January 18, 1994, on our audit of the
consolidated financial statements of First Bancorporation of Ohio and
subsidiaries which report is included in the Annual Report on Form 10-K.
We also consent to the reference to our firm under the captions "Accounting
Treatment of Merger" and "Experts."
/s/ Coopers & Lybrand, L.L.P.
Akron, Ohio
October 26, 1994 Coopers & Lybrand, L.L.P.
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EXHIBIT 23(C)
CONSENT OF BROUSE & MCDOWELL
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CONSENT OF BROUSE & MCDOWELL
We hereby consent to the inclusion of the legality opinion dated
October 26, 1994, and the form of our opinion on certain federal tax matters, as
Exhibits to Amendment No. 1 to the Registration Statement on Form S-4 (No.
33-55491) of First Bancorporation of Ohio, and to the reference to our firm
under the caption "Legal Opinion" in the Prospectus and Joint Proxy Statement
comprising a part of the Registration Statement.
BROUSE & MCDOWELL
Dated: October 26, 1994 /s/ Brouse & McDowell
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EXHIBIT 23(D)
CONSENT OF MCDONALD & COMPANY SECURITIES, INC.
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CONSENT OF MCDONALD & COMPANY SECURITIES, INC.
We consent to the inclusion in this Registration Statement on Form S-4
of First Bancorporation of Ohio of our opinion set forth as Appendix C to the
Prospectus and Joint Proxy Statement, which is part of this Registration
Statement, and to the summarization thereof in the Prospectus and Joint Proxy
Statement under the caption "Opinion of CIVISTA's Financial Advisor."
/s/ McDonald & Company Securities, Inc.
MCDONALD & COMPANY SECURITIES, INC.
CLEVELAND, OHIO
OCTOBER 26, 1994
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EXHIBIT 23(E)
CONSENT OF ALEX. BROWN & SONS INCORPORATED
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CONSENT OF ALEX. BROWN & SONS INCORPORATED
We hereby consent to the inclusion of our opinion dated November 2,
1994 as an Annex to the Prospectus and Joint Proxy Statement filed as part of
the Registration Statement on Form S-4 of First Bancorporation of Ohio, and to
the references to our firm as Financial Adviser to First Bancorporation of Ohio
and to our opinion contained in said Prospectus and Joint Proxy Statement. In
giving such consent, we do not thereby admit that we come within the category
of persons whose consent is required under Section 7 of the Securities Act of
1933 or the rules and regulations of the Securities and Exchange Commission.
ALEX. BROWN AND SONS INCORPORATED
By: /s/ Howard J. Lowenberg
------------------------------
Name: Howard J. Lowenberg
Title: Vice President
October 26, 1994
