SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): August 13, 1996
LCS Bancorp, Inc.
(Exact name of registrant as specified in its charter)
Delaware 0-25446 37-1337116
(State or other (Commission File No.) (I.R.S. Employer
jurisdiction Identification No.)
of incorporation)
501 N. State Street 62056
Litchfield, Illinois
Registrant's telephone number, including area code: (217) 324-2576
Not Applicable
(Former name or former address, if changed since last report)
PAGE
<PAGE>
Item 5. Other Events.
On August 13, 1996 LCS Bancorp, Inc. (the "Registrant")
pursuant to the unanimous approval of its Board of Directors
entered into an Agreement and Plan of Merger (the "Agreement") by
and among Jacksonville Savings Bank ("Jacksonville") and the
Registrant and Litchfield Community Savings, S.B. ("Litchfield").
Pursuant to the Agreement and the transactions contemplated
thereby, the following events are expected to occur: (i) the
Registrant will be merged with an acquisition subsidiary of
Jacksonville with Registrant being the surviving entity; (ii)
Litchfield will merge with and into Jacksonville with Jacksonville
being the surviving institution; and (iii) Registrant will be
liquidated into Jacksonville and will cease to exist.
Each share of Registrant's Common Stock shall be canceled in
exchange for the right to receive a purchase price of $17.75 per
share (the "Purchase Price") and each option shall be cancelled and
option holders shall receive the difference between the Purchase
Price and the option exercise price in accordance with the
Agreement, a copy of which is appended as Exhibit 2.
A copy of the Press Release issued by Registrant and
Jacksonville are appended hereto as Exhibit 99.
PAGE
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, hereunto duly authorized.
LCS BANCORP, INC.
DATE: August 15, 1996 By: /s/ Carol J. Radtke
Carol J. Ratke
Chief Executive Officer and
Chief Financial Officer
Agreement and Plan of Merger
By and Among
Jacksonville Savings Bank
and
LCS Bancorp, Inc. and Litchfield
Community Savings, S.B.
Dated: August 13, 1996
<PAGE>
<PAGE>
TABLE OF CONTENTS
Page No.
ARTICLE I. . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
THE COMPANY MERGER AND MERGER . . . . . . . . . . . . . . . .1
1.1. The Merger. . . . . . . . . . . . . . . . . . . .1
1.2. Effective Time of the Merger. . . . . . . . . . .2
1.3. Closing.. . . . . . . . . . . . . . . . . . . . .2
1.4. Modification of Structure . . . . . . . . . . . .3
ARTICLE II.. . . . . . . . . . . . . . . . . . . . . . . . . . . .3
EFFECT OF THE COMPANY MERGER AND MERGER;CERTAIN ACTIONS IN CONNECTION
THEREWITH . . . . . . . . . . . . . . . . . . . . . . . . . .3
2.1. Effect of the Merger. . . . . . . . . . . . . . .3
2.2. Effect on LCS Common Stock. . . . . . . . . . . .4
2.3 Options . . . . . . . . . . . . . . . . . . . . .4
2.4. Jacksonville to Make Cash Available . . . . . . .4
2.5. Payment of Cash.. . . . . . . . . . . . . . . . .4
ARTICLE III. . . . . . . . . . . . . . . . . . . . . . . . . . . .5
REPRESENTATIONS AND WARRANTIES OF JACKSONVILLE. . . . . . . .5
3.1. Corporate Organization. . . . . . . . . . . . . .5
3.2. Authorization.. . . . . . . . . . . . . . . . . .6
3.3. No Violation. . . . . . . . . . . . . . . . . . .6
3.4. Consents and Approvals. . . . . . . . . . . . . .6
3.5. Information Supplied for Inclusion in the LCS Proxy
Statement.. . . . . . . . . . . . . . . . . . . .7
3.6. Cash Payment. . . . . . . . . . . . . . . . . . .7
3.7. Accuracy of Information.. . . . . . . . . . . . .7
3.8. Supplement to Jacksonville Disclosure Schedule. .7
3.9. Litigation. . . . . . . . . . . . . . . . . . . .7
3.10 Information in the Jacksonville Proxy Statement .7
ARTICLE IV.. . . . . . . . . . . . . . . . . . . . . . . . . . . .8
REPRESENTATIONS AND WARRANTIES OF LCS AND LITCHFIELD. . . . .8
4.1. Corporate Organization. . . . . . . . . . . . . .8
4.2. Capitalization. . . . . . . . . . . . . . . . . .8
4.3. Authorization.. . . . . . . . . . . . . . . . . .9
4.4. No Violation. . . . . . . . . . . . . . . . . . .9
4.5. Reports and Financial Statements. . . . . . . . .9
4.6. Consents and Approvals. . . . . . . . . . . . . 10
4.7. Absence of Certain Changes. . . . . . . . . . . 10
4.8. Employee and Employee Benefits Matters. . . . . 11
4.9. Litigation. . . . . . . . . . . . . . . . . . . 12
4.10. Tax Matters.. . . . . . . . . . . . . . . . . . 13
4.11. Information in the LCS Proxy Statement. . . . . 13
4.12. Environmental Matters . . . . . . . . . . . . . 13
4.13. Insurance.. . . . . . . . . . . . . . . . . . . 15
4.14. Compliance with Laws and Orders.. . . . . . . . 15
4.15. Governmental Regulation.. . . . . . . . . . . . 15
4.16. Contracts and Commitments.. . . . . . . . . . . 16
4.17. Agreements with Directors, Officers and
Shareholders. . . . . . . . . . . . . . . . . . 16
4.18. Accuracy of Information.. . . . . . . . . . . . 16
4.19. Supplement to LCS Disclosure Schedule . . . . . 16
4.20. Title to Assets; Leases . . . . . . . . . . . . 17
4.21. Information Supplied for Inclusion in the
Jacksonville Proxy Statement.. . . . . . . . 17
4.22. Fees . . . . . . . . . . . . . . . . . . . . 17
4.23. Business of LCS. . . . . . . . . . . . . . . 18
ARTICLE V. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
COVENANTS OF JACKSONVILLE . . . . . . . . . . . . . . . . . 18
5.1. Affirmative Covenants. . . . . . . . . . . . 18
5.2. Negative Covenants.. . . . . . . . . . . . . 18
5.3. Breaches.. . . . . . . . . . . . . . . . . . 18
5.4. Employee Benefit Plans: Employment Arrangements19
5.5. Filing of Applications.. . . . . . . . . . . 20
5.6. Expenses.. . . . . . . . . . . . . . . . . . 20
5.7. Supplement to Jacksonville Disclosure Schedule.20
5.8. Confidentiality. . . . . . . . . . . . . . . 20
5.9. Non-Assignability. . . . . . . . . . . . . . 21
ARTICLE VI.. . . . . . . . . . . . . . . . . . . . . . . . . . . 21
COVENANTS OF LCS. . . . . . . . . . . . . . . . . . . . . . 21
6.1. Affirmative Covenants. . . . . . . . . . . . 21
6.2. Negative Covenants.. . . . . . . . . . . . . 21
6.3. Report to Jacksonville.. . . . . . . . . . . 24
6.4. Breaches.. . . . . . . . . . . . . . . . . . 24
6.5. Supplement to Disclosure Schedule. . . . . . 24
6.6. Expenses.. . . . . . . . . . . . . . . . . . 24
6.7. Consents and Approvals.. . . . . . . . . . . 25
6.8. Dissenters' Rights.. . . . . . . . . . . . . 25
ARTICLE VII. . . . . . . . . . . . . . . . . . . . . . . . . . . 25
ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . 25
7.1. LCS Shareholders' Meeting. . . . . . . . . . 25
7.2. Proxy Statement for LCS Shareholders'
Meeting. . . . . . . . . . . . . . . . . . . 25
7.3. Jacksonville Shareholders' Meeting.. . . . . 25
7.4. Proxy Statement for Jacksonville Shareholders'
Meeting. . . . . . . . . . . . . . . . . . . 26
7.5. Cooperation: Regulatory Approvals. . . . . . 26
7.6. Reports. . . . . . . . . . . . . . . . . . . 26
7.7. Brokers or Finders.. . . . . . . . . . . . . 26
7.8. Additional Agreements: Reasonable Efforts. . 27
7.9. Release of Information.. . . . . . . . . . . 27
7.10.Access to Properties and Records;
Confidentiality. . . . . . . . . . . . . . . 27
7.11. Certain Policies. . . . . . . . . . . . 28
ARTICLE VIII.. . . . . . . . . . . . . . . . . . . . . . . . . . 28
CONDITIONS TO THE OBLIGATIONS OF JACKSONVILLE . . . . . . . 28
8.1. No Material Adverse Effect.. . . . . . . . . 28
8.2. Representations and Warranties.. . . . . . . 28
8.3. Performance and Compliance.. . . . . . . . . 29
8.4. No Proceeding or Litigation. . . . . . . . . 29
8.5. Consents Under Agreements. . . . . . . . . . 29
8.6. No Amendments to Resolutions.. . . . . . . . 29
8.7. Certificate of LCS Officers. . . . . . . . . 29
8.8. Corporate Proceedings. . . . . . . . . . . . 29
8.9. Legal Opinion. . . . . . . . . . . . . . . . 29
ARTICLE IX.. . . . . . . . . . . . . . . . . . . . . . . . . . . 30
CONDITIONS TO THE OBLIGATIONS OF LCS. . . . . . . . . . . . 30
9.1. Representations and Warranties.. . . . . . . 30
9.2. Performance and Compliance.. . . . . . . . . 30
9.3. Corporate Proceedings. . . . . . . . . . . . 30
9.4. Certificate of Jacksonville Officers.. . . . 30
9.5. Legal Opinion. . . . . . . . . . . . . . . . 30
9.6. Fairness Opinion . . . . . . . . . . . . . . 30
ARTICLE X. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES. . . . . . . . 31
10.1.Governmental Approvals . . . . . . . . . . . 31
10.2.No Injunctions or Restraints . . . . . . . . 31
10.3.LCS and Jacksonville Shareholder Approval. . 31
10.4 Corporate Proceedings. . . . . . . . . . . . 31
ARTICLE XI.. . . . . . . . . . . . . . . . . . . . . . . . . . . 32
TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . 32
11.1. Reasons for Termination.. . . . . . . . 32
11.2. Effect of Termination.. . . . . . . . . 33
ARTICLE XII. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 33
12.1.Nonsurvival of Representations, Warranties and
Agreements . . . . . . . . . . . . . . . . . 33
12.2.Expenses . . . . . . . . . . . . . . . . . . 34
12.3.Waivers: Amendments. . . . . . . . . . . . . 34
12.4.Assignment: Parties in Interest. . . . . . . 34
12.5.Entire Agreement . . . . . . . . . . . . . . 35
12.6.Captions and Counterparts. . . . . . . . . . 35
12.7.Certain Definitions. . . . . . . . . . . . . 35
12.8.Enforcement of the Agreement . . . . . . . . 35
12.9.Governing Law. . . . . . . . . . . . . . . . 35
12.10.Notices . . . . . . . . . . . . . . . . . . 35
<PAGE>
SCHEDULES
Schedule 3.1
Schedule 3.9
Schedule 4.1(a)
Schedule 4.2
Schedule 4.4
Schedule 4.5
Schedule 4.6
Schedule 4.7
Schedule 4.8(a)
Schedule 4.8(b)
Schedule 4.9
Schedule 4.10
Schedule 4.12(a)
Schedule 4.12(b)
Schedule 4.12(c)
Schedule 4.12(d)
Schedule 4.12(e)
Schedule 4.12(f)
Schedule 4.13
Schedule 4.14
Schedule 4.15
Schedule 4.16
Schedule 4.17
Schedule 4.20(b)
Schedule 5.4(a)
Exhibits
Agreement of Company Merger. . . . . . . . . . . . . . . .Exhibit A
Plan of Merger . . . . . . . . . . . . . . . . . . . . . .Exhibit B
Plan of Complete Liquidation and Dissolution . . . . . . .Exhibit C
Legal Opinion of Kemp, Grezlakowski & Lorenzini, Ltd.. . .Exhibit D
Legal Opinion of Luse Lehman
Gorman Pomerenk & Schick, P.C. . . . . . . . . . . . . .Exhibit E
PAGE
<PAGE>
AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger, dated as of August 13, 1996
(the "Agreement"), is entered into by and among Jacksonville Savings
Bank ("Jacksonville") and LCS Bancorp, Inc. ("LCS"), the holding
company for Litchfield Community Savings, S.B. ("Litchfield").
References to Jacksonville include subsidiaries of Jacksonville
("Jacksonville Subsidiary") unless the context indicates otherwise.
References to LCS shall include Litchfield unless the context
indicates otherwise.
W I T N E S S E T H:
WHEREAS, Jacksonville is an Illinois-chartered stock
savings bank headquartered in Jacksonville, Illinois, 54% of the
issued and outstanding capital stock of which is owned by
Jacksonville Bancorp, MHC, an Illinois chartered mutual holding
company; and
WHEREAS, Litchfield is an Illinois-chartered stock savings
bank headquartered in Litchfield, Illinois, 100% of the issued and
outstanding capital stock of which is owned by LCS, a Delaware
Corporation in stock form; and
WHEREAS, the parties desire to provide for Jacksonville's
acquisition of Litchfield pursuant to a Merger (as defined in Section
1.1(b) below) of Jacksonville and Litchfield on or after the
Effective Time (as defined in Section 1.2 hereof); and
WHEREAS, in connection with the Company Merger (as defined
in Section 1.1(a) below) the outstanding capital stock of LCS will
be converted into the right to receive cash; and
WHEREAS, it is intended that Jacksonville and Litchfield
will be merged such that Jacksonville will be the surviving
corporation and that the resulting savings institution will expand
its market area and achieve certain economies of scale and
efficiencies as a result of the Merger.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants, representations, warranties, and agreements herein
contained, and in order to set forth the conditions upon which the
foregoing Merger will be carried out, the parties, intending to be
legally bound, hereby agree as follows:
ARTICLE I.
THE COMPANY MERGER AND MERGER
1.1. The Merger. Subject to the terms and conditions of
this Agreement, and in accordance with the provisions of Section
18(c) of the Federal Deposit Insurance Act (12 U.S.C. 1828(c)), as
amended (the "Bank Merger Act"), and Section 8004 of the Illinois
Savings Bank Act (the "Savings Bank Act"), and the rules and
regulations promulgated under each of the Bank Merger Act and the
Savings Bank Act (the "Regulations"), at the Effective Time, the
parties hereby agree that the following corporate transactions shall
occur substantially concurrently in the order set forth below:
(a) Pursuant to the Agreement of Company Merger, attached
hereto as Exhibit A, among Jacksonville, LCS and a to-be-formed
Illinois corporation which is to be wholly owned by Jacksonville,
such to-be-formed corporation shall be merged with and into LCS (the
"Company Merger") and, in connection therewith, and subject to the
rights of dissenting stockholders which have been asserted and duly
perfected in accordance with the provisions of Section 262 of the
Delaware General Corporation Law ("DGCL"), each share of common
stock, $.01 par value per share, of LCS ("LCS Common Stock") and each
option to purchase LCS Common Stock granted pursuant to the LCS stock
option plans, as identified herein, outstanding immediately prior to
the Effective Time (as defined herein) of the Company Merger shall
be canceled in exchange for the right to receive the Purchase Price
(as defined herein), with the result that LCS will become a wholly
owned subsidiary of Jacksonville.
(b) Pursuant to the Agreement of Merger, attached hereto as
Exhibit B, between Litchfield and Jacksonville, Litchfield shall
merge with and into Jacksonville simultaneously with or immediately
following consummation of the transactions referred to in Section
1.1(a) hereof, with the result that Jacksonville will acquire all of
the assets and liabilities of Litchfield and Litchfield shall cease
to exist (the "Merger"). In effecting the Merger, Jacksonville may
charter an interim savings bank.
(c) Pursuant to the Plan of Complete Liquidation and
Dissolution (the "Plan"), attached hereto as Exhibit C, LCS shall be
liquidated into Jacksonville simultaneously with or immediately
following consummation of the transactions referred to in Sections
1.1(a) and (b) hereof, with the result that Jacksonville will acquire
all of the assets and liabilities of LCS and LCS shall cease to
exist.
1.2. Effective Time of the Merger. As soon as practicable
after each of the conditions set forth in Articles VIII, IX and X
hereof have been satisfied or waived, Jacksonville and Litchfield
will file, or cause to be filed, the Agreement of Merger attached as
Exhibit B hereto (the "Merger Agreement"), along with copies of the
resolutions approved by LCS as sole stockholder of Litchfield
approving the Merger of Litchfield and Jacksonville with the Illinois
Commissioner of Banks and Real Estate ("Commissioner"). The
Commissioner shall then issue to Jacksonville, as the surviving
institution, a certificate of merger. The Merger shall become
effective at the time when the certificate of merger is recorded in
the counties in which either Jacksonville or Litchfield has an office
(the "Effective Time").
1.3. Closing. If (a) the Agreement and the transactions
contemplated hereby have been duly approved as required by the
shareholders of LCS and Jacksonville, and (b) all relevant conditions
of the Agreement have been satisfied or waived, the closing (the
"Closing") shall take place as promptly as practicable thereafter at
the executive offices of Jacksonville. At the Closing, the parties
hereto will exchange certificates, letters and other documents as
required hereby and will cause the filing described in Section 1.2
hereof with respect to the Merger to be made. Such Closing will take
place within ten (10) business days of the satisfaction or waiver of
all conditions and/or obligations and applicable waiting periods
contained in Articles VIII, IX and X of this Agreement. The date on
which the Closing occurs is hereinafter referred to as the "Closing
Date."
1.4. Modification of Structure. Notwithstanding any
provision of this Agreement to the contrary, Jacksonville may elect,
subject to the filing of all necessary applications and the receipt
of all required regulatory approvals, to modify the structure of the
transactions contemplated hereby so long as (i) there are no material
adverse federal income tax consequences to the stockholders of LCS
as a result of such modification, (ii) the consideration to be paid
to holders of LCS Common Stock under this Agreement is not thereby
changed in kind or reduced in amount solely because of such
modification and (iii) such modification will not be likely to
materially delay or jeopardize receipt of any required regulatory
approvals.
ARTICLE II.
EFFECT OF THE COMPANY MERGER AND MERGER;
CERTAIN ACTIONS IN CONNECTION THEREWITH
2.1. Effect of the Merger.
(a) Jacksonville, as the surviving institution in the
Merger, shall possess all of the properties and rights and be subject
to all of the liabilities and obligations of LCS and Litchfield, all
as more fully described in the Merger Agreement and the Regulations.
The name of Jacksonville, as the surviving institution in the Merger,
shall remain "Jacksonville Savings Bank"
(b) Following the Merger, Jacksonville will operate
Litchfield's office as a branch office. Jacksonville will use its
reasonable efforts to have this branch office operate under a "doing
business as" name of Litchfield Community Savings, a division of
Jacksonville Savings Bank.
(c) At the Effective Time, each share of capital stock of
LCS issued and outstanding immediately prior thereto shall, by virtue
of the Company Merger, be canceled. Each option to purchase LCS
Common Stock granted pursuant to LCS' stock option plans and
outstanding immediately prior to the Effective Time shall, by virtue
of the Company Merger, be canceled. No new shares of the capital
stock or other securities or obligations of Jacksonville shall be
issued or be deemed issued with respect to or in exchange for such
canceled shares, and such canceled shares of capital stock shall not
be converted into any shares or other securities or obligations of
Jacksonville.
(d) Simultaneously with the Merger, each share of
Litchfield common stock issued and outstanding immediately prior
thereto shall by virtue of the Merger be canceled.
(e) The Articles of Incorporation and bylaws of
Jacksonville, as in effect immediately prior to the Effective Time,
shall be the Articles of Incorporation and bylaws of Jacksonville,
as the surviving institution of the Merger.
(f) The directors and officers of Jacksonville immediately
prior to the Effective Time shall be the directors and officers of
Jacksonville, as the surviving institution of the Merger, and shall
continue in office until their successors are duly elected or
otherwise duly selected.
(g) All deposit accounts of Litchfield existing
immediately prior to the Merger shall, upon consummation of the
Merger, remain insured by the Federal Deposit Insurance Corporation
("FDIC") to the fullest extent permitted by law and regulation.
2.2. Effect on LCS Common Stock. At the Effective Time,
by virtue of the Company Merger and without any action except as
specified herein on the part of the holders of shares of LCS Common
Stock, each issued and outstanding share of LCS Common Stock (except
as otherwise provided in the Regulations with respect to the rights
of dissenting shareholders of LCS) shall be converted into the right
to receive $17.75 in cash (the "Purchase Price"). All shares of LCS
Common Stock which are held in the treasury of LCS and any shares of
LCS Common Stock owned by Jacksonville or any direct or indirect
wholly owned subsidiary or parent of Jacksonville shall be canceled.
2.3 Options. As of the Effective Time, Jacksonville shall
pay to each holder of an option which has been granted by LCS to
purchase shares of LCS Common Stock, and which is outstanding and
exercisable but unexercised immediately prior to the Effective Time
in accordance with LCS' stock option plans, an amount in cash
computed by multiplying (i) any positive difference obtained by
subtracting from (x) the per share amount of the Purchase Price and
(y) the per share exercise price applicable to such option by (ii)
the number of shares of LCS Common Stock subject to such option,
subject, with respect to each such holder, to the receipt by
Jacksonville of an acknowledgment from such holder that such payment
shall constitute consideration for the termination and cancellation
of such option. LCS agrees to take or cause to be taken all action
necessary so that each such option outstanding immediately before the
Effective Time as a result of the failure of the holder thereof to
deliver the acknowledgment described in the preceding sentence shall
be converted into a right to receive the amount described in the
preceding sentence.
2.4. Jacksonville to Make Cash Available. At the Effective
Time, Jacksonville shall make available the amount of cash payable
pursuant to Section 2.2 and Section 2.3 hereof.
2.5. Payment of Cash.
(a) Jacksonville shall act as the exchange agent (the
"Exchange Agent") in connection with the Company Merger. At the
closing, the Exchange Agent shall (except to those holders of LCS
Common Stock who have properly exercised dissenters' rights of
appraisal) pay to each holder who delivers his or her certificate or
certificates representing such shares to the Exchange Agent a check
for an amount equal to the number of shares represented by the
certificate or certificates so surrendered to the Exchange Agent
multiplied by the Purchase Price. As to each holder of record of LCS
Common Stock who does not surrender his shares at Closing, the
Exchange Agent shall send a notice and form of letter of transmittal
advising such shareholder of the effectiveness of the Company Merger
and the procedures for surrendering to the Exchange Agent outstanding
certificates formerly evidencing shares of LCS Common Stock. Each
shareholder who thereafter delivers his or her certificate or
certificates representing such shares to the Exchange Agent shall be
mailed a check for an amount, without interest, equal to the number
of shares represented by the certificate or certificates so
surrendered to the Exchange Agent multiplied by the Purchase Price.
Upon surrender, each certificate evidencing LCS Common Stock shall
be canceled. Until so surrendered, each outstanding certificate
which prior to the Effective Time evidenced shares of LCS Common
Stock will be deemed for all purposes (except as otherwise provided
in Section 2.2 hereof) to evidence the right to receive cash, without
interest, equal to the number of shares represented by the
certificate or certificates multiplied by the Purchase Price. After
the Effective Time, there shall be no further registration of
transfers on the records of LCS of shares of LCS Common Stock and,
if a certificate evidencing such shares is presented for transfer,
it shall be canceled in exchange for a check (except as otherwise
provided in Section 2.2 hereof) in the appropriate amount as
calculated above. Notwithstanding any provision of this Agreement,
neither the Exchange Agent nor any person, firm or entity shall be
liable or obligated to any former holder of any share of LCS Common
Stock (or to anyone claiming through any such former holder) with
respect to amounts to which any such holder would have been entitled
as a consequence of the Company Merger, if such amounts have been
paid, or are payable, to any public official pursuant to any
abandoned property, escheat or similar laws.
(b) If delivery of all or any part of the cash to be paid
in connection with the Company Merger is to be paid to a person other
than the person in whose name the certificate surrendered in exchange
therefor is registered, it shall be a condition to such delivery that
the certificate surrendered in exchange shall be properly endorsed
and otherwise in proper form for transfer and that the person
requesting such a delivery pay to the Exchange Agent any transfer or
other taxes required by reason of such delivery in any name other
than that of the registered holder of the certificate surrendered or
establish to the satisfaction of the Exchange Agent that such tax has
been paid or is not payable.
(c) In the event any certificate for LCS Common Stock
shall have been lost, stolen or destroyed, the Exchange Agent shall
deliver (except as otherwise provided in Section 2.2 hereof) in
exchange for such lost, stolen or destroyed certificate, upon the
making of an affidavit of that fact by the holder thereof, the cash
to be paid in the Company Merger as provided for herein; provided,
however, that Jacksonville may, in its sole discretion and as a
condition precedent to the delivery thereof, require the owner of
such lost, stolen or destroyed certificate to deliver a bond in such
reasonable sum as Jacksonville may direct as indemnity against any
claim that may be made against Jacksonville, LCS or any other party
with respect to the certificate alleged to have been lost, stolen or
destroyed.
ARTICLE III.
REPRESENTATIONS AND WARRANTIES OF JACKSONVILLE
Jacksonville hereby represents and warrants to LCS as
follows:
3.1. Corporate Organization.
(a) Jacksonville is a stock savings bank duly organized
and validly existing and in good standing under the laws of the State
of Illinois. The Jacksonville Subsidiary is duly organized and
validly existing and in good standing under the laws of the State of
Illinois.
(b) The to-be-formed corporation referred to in Section
1.1(a) hereof will be duly organized and validly existing under the
laws of the jurisdiction of its incorporation and have the authority
to consummate the Company Merger contemplated herein.
(c) All deposit accounts issued by Jacksonville are
insured by the FDIC to the maximum extent permitted under applicable
law.
(d) Jacksonville has all requisite corporate power and
authority to own, operate and lease its properties as presently
owned, operated and leased and to engage in the activities and
business now being conducted by it. Schedule 3.1 to the Jacksonville
disclosure schedule attached hereto as Annex I (the "Jacksonville
Disclosure Schedule") lists each "subsidiary" of Jacksonville.
3.2. Authorization. The Board of Directors of Jacksonville
has approved the Agreement and the transactions contemplated hereby
and has authorized the execution, delivery and performance by
Jacksonville of the Agreement. No other corporate proceeding on the
part of Jacksonville is necessary to authorize the Agreement or to
consummate the transactions contemplated hereby, and Jacksonville has
full corporate power and authority to enter into the Agreement and
to consummate the transactions contemplated hereby subject to the
conditions set forth in Articles VIII and X of this Agreement. This
Agreement has been duly and validly executed and delivered by
Jacksonville and constitutes the valid and binding obligation of
Jacksonville, enforceable against each of them in accordance with its
terms, subject to (a) all applicable bankruptcy, insolvency,
moratorium or other similar laws affecting the enforcement of
creditors' rights generally, and (b) the application of equitable
principles if equitable remedies are sought.
3.3. No Violation. Neither the execution and delivery of
the Agreement nor, subject to the receipt of the consents and
approvals contemplated by Section 3.4, the consummation of the
transactions contemplated herein will, (a) conflict with, result in
the breach of, constitute a violation of, constitute a default under
or accelerate the performance of the terms of any government
regulation, judgment, order or decree of any court or other
governmental agency to which Jacksonville or any of the Jacksonville
Subsidiaries may be subject, or any contract, agreement or instrument
to which Jacksonville or any of the Jacksonville Subsidiaries is a
party or by which Jacksonville or any of the Jacksonville
Subsidiaries are bound or committed, or the articles of incorporation
of Jacksonville, the articles of incorporation of any of the
Jacksonville Subsidiaries, or the bylaws of Jacksonville or any of
the Jacksonville Subsidiaries, or, any law, or any rule or regulation
of any governmental agency or authority, or (b) constitute an event
that with the lapse of time or action by a third party could result
in a default under any of the foregoing, or (c) result in the
creation of any lien, charge or encumbrance upon any of the assets
or properties of Jacksonville or any of the Jacksonville
Subsidiaries.
3.4. Consents and Approvals. Other than the receipt of
approvals required by the Savings Bank Act, the Bank Merger Act, the
Bank Holding Company Act ("BHCA"), and the regulations promulgated
under said acts, or waivers to such approvals, and the approval of
Jacksonville's stockholders, no filing or registration with, no
notice to and no permit, authorization, consent or approval of any
public or governmental body or authority is necessary for the
consummation by Jacksonville of the transactions contemplated by the
Agreement. Jacksonville knows of no reason (including those relating
to fair lending laws or other laws relating to discrimination,
including, without limitation, the Equal Credit Opportunity Act, the
Fair Housing Act, the Community Reinvestment Act and the Home
Mortgage Disclosure Act, and anti-trust or consumer disclosure laws
and regulations) why the regulatory approvals should not be obtained.
3.5. Information Supplied for Inclusion in the LCS Proxy
Statement. Any information regarding Jacksonville or any of the
Jacksonville Subsidiaries supplied by Jacksonville to LCS
specifically for inclusion in the LCS Proxy Statement (as defined in
Section 7.2 hereof) will not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in light of the circumstances in which they were
made, not misleading.
3.6. Cash Payment. Jacksonville has sufficient funds to
pay the cash payment required under Sections 2.2 and 2.3 and such
payment will not cause it to fail to meet any regulatory capital
requirements to which it is subject.
3.7. Accuracy of Information. The statements made by
Jacksonville in the Agreement and in any other written documents
executed and/or delivered by or on behalf of Jacksonville pursuant
to the terms of the Agreement are true and correct in all material
respects.
3.8. Supplement to Jacksonville Disclosure Schedule.
Jacksonville will promptly supplement or amend the Jacksonville
Disclosure Schedule with respect to any matter hereafter arising
that, if existing or occurring at the date of this Agreement, would
have been required to be set forth or described in the Jacksonville
Disclosure Schedule. No supplement or amendment to the Jacksonville
Disclosure Schedule will have any effect for the purpose of
determining satisfaction of the condition set forth in Section 9.1
hereof.
3.9. Litigation. Except as set forth in Schedule 3.9 to
the Jacksonville Disclosure Schedule, no claims have been asserted
and no relief has been sought against Jacksonville or any of the
Jacksonville Subsidiaries in any pending litigation or governmental
proceedings or otherwise which would be reasonably likely to result
in Jacksonville becoming unable to pay the Purchase Price or
otherwise perform its obligations under, and consummate the
transactions contemplated by, this Agreement.
3.10. Information in the Jacksonville Proxy Statement.
Jacksonville represents and warrants that the Jacksonville Proxy
Statement will not, either at the time it is mailed to Jacksonville
stockholders in connection with the Jacksonville Stockholders Meeting
(as defined in Section 7.3 hereof) or at the time of the Jacksonville
Stockholders Meeting, contain any untrue statement of 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 in
which they were made, not misleading; provided, however, that none
of the representations and warranties in this Section 3.10 shall
apply to statements in or omissions from the Jacksonville Proxy
Statement made in reliance upon and in conformity with information
about or furnished by or on behalf of LCS for use in the Jacksonville
Proxy Statement.
ARTICLE IV.
REPRESENTATIONS AND WARRANTIES OF LCS AND LITCHFIELD
LCS and Litchfield represent and warrant to Jacksonville as
follows:
4.1. Corporate Organization.
(a) LCS and Litchfield have all requisite corporate power and
authority to own, operate and lease their properties as presently
owned, operated or leased and to engage in the activities and
business now conducted by each of them. LCS and Litchfield are
qualified to do business in each jurisdiction in which the nature of
business conducted or assets owned or leased by each of LCS and
Litchfield makes such qualification necessary and where a failure to
do so would have a Material Adverse Effect. The jurisdictions in
which LCS and Litchfield are qualified to do business as a foreign
corporation are identified in Schedule 4.1(a) to the LCS disclosure
schedule attached hereto as Annex II (the "LCS Disclosure Schedule").
LCS is a corporation duly organized, validly existing and in good
standing under the laws of the State of Delaware. Litchfield is a
member in good standing of the Federal Home Loan Bank of Chicago and
all eligible accounts issued by Litchfield are insured by the FDIC
to the maximum extent permitted under applicable law. Litchfield is
a savings bank duly organized, validly existing and in good standing
under the laws of the State of Illinois. Other than Litchfield, LCS
has no direct or indirect subsidiaries.
(b) LCS and Litchfield have each delivered to Jacksonville true
and complete copies of the certificate or articles of incorporation,
organization certificate or other chartering instrument and bylaws
of LCS and Litchfield, respectively, in effect on the date hereof.
The minute books of LCS and Litchfield each contain accurate minutes
of all meetings and accurate consents in lieu of meetings of the
board of directors (and any committee thereof) and of the
stockholder(s) of LCS recorded therein, and as of the Effective Time
such minute books will contain accurate minutes of all such meetings
and such consents in lieu of meetings respectively held or executed
prior thereto. The minute books accurately reflect all transactions
referred to in such minutes and consents in lieu of meetings and
disclose all material corporate actions of the stockholder(s) and
board of directors of LCS and Litchfield and all committees thereof.
Except as reflected in such minute books, there are no minutes of
meetings or consents in lieu of meetings of the board of directors
(or any committee thereof) or of the stockholder(s) of LCS and
Litchfield.
4.2. Capitalization. The authorized capital stock of LCS
consists of 400,000 shares of LCS Common Stock, par value $.01 per
share, and 100,000 shares of preferred stock, par value $.01 per
share ("Preferred Stock"). As of June 30, 1996, there were issued
and outstanding 107,640 shares of LCS Common Stock and no shares of
Preferred Stock. As of June 30, 1996, 10,350 shares of LCS Common
Stock were reserved for issuance pursuant to stock options and no
shares of Preferred Stock were reserved for issuance pursuant to
stock options. All of such issued and outstanding shares of LCS
capital stock are validly issued, fully paid and nonassessable and
not issued in violation of any preemptive rights. LCS does not have
any arrangements or commitments obligating LCS to issue or sell or
otherwise dispose of, or to purchase or redeem, shares of its capital
stock or any securities convertible into or having the right to
purchase shares of its capital stock. Schedule 4.2 of the LCS
Disclosure Schedule sets forth a complete and accurate list of all
options to purchase LCS Common Stock that have been granted and which
remain unexercised, including the dates of grant, exercise prices,
dates of vesting, dates of termination and shares subject to grant.
To the best of LCS' knowledge, no person or group (as that term is
used in Section 13(d)(3) of the Securities Exchange Act of 1934 (the
"Exchange Act")) other than as set forth at Schedule 4.2 of the LCS
Disclosure Schedule, is the beneficial owner of 5% or more of the
outstanding LCS Common Stock. The authorized capital stock of
Litchfield consists of 1,000 shares of common stock, par value $1.00
per share, and 9,000 shares of preferred stock, par value $100 per
share. As of June 30, 1996, 1,000 shares of Litchfield common stock
and no shares of preferred stock were outstanding. All shares of
Litchfield common stock are held by LCS free and clear of all liens
and encumbrances.
4.3. Authorization. The respective Boards of Directors of
LCS and Litchfield have approved the Agreement and the transactions
contemplated thereby and authorized the execution, delivery and
performance by LCS and Litchfield of the Agreement. No other
corporate proceeding on the part of either LCS or Litchfield is
necessary to authorize the Agreement or to consummate the
transactions contemplated thereby other than the approval of the
holders of LCS Common Stock as provided in Section 7.1 hereof and the
approval of LCS as sole stockholder of Litchfield common stock. LCS
and Litchfield have full corporate power and authority to enter into
the Agreement and, upon approval of the shareholders of LCS Common
Stock in accordance with law and subject to the additional conditions
set forth in Articles IX and X of this Agreement, to consummate the
transactions contemplated hereby. This Agreement has been duly and
validly executed and delivered by LCS and Litchfield and constitutes
the valid and binding obligations of LCS and Litchfield, enforceable
against it in accordance with its terms, subject to (a) all
applicable bankruptcy, insolvency, moratorium, or other similar laws
affecting the enforcement of creditors' rights generally or the
rights of creditors of savings associations the accounts of which are
insured by the FDIC, (b) the application of equitable principles if
equitable remedies are sought, and (c) the provisions of this
Agreement providing that the Company Merger will be enforceable only
upon approval by the holders of LCS Common Stock as described in
Section 7.1 hereof.
4.4. No Violation. Other than as set forth in Schedule 4.4
of the LCS Disclosure Schedule, neither the execution and delivery
of the Agreement nor, subject to the receipt of the consents and
approvals contemplated by Section 4.6, the consummation of the
transactions contemplated herein will (a) conflict with, result in
the breach of, constitute a default under or accelerate the
performance provided by the terms of any judgment, order or decree
of any court or other governmental agency to which LCS or Litchfield
may be subject, or any contract, agreement or instrument to which
either LCS or Litchfield is a party or by which LCS or Litchfield are
bound or committed, or the certificate of incorporation of LCS or the
bylaws of LCS, the articles of incorporation of Litchfield or bylaws
of Litchfield, or, to the knowledge of LCS or Litchfield (as defined
in Section 12.7(e) hereof), any law, or any rule or regulation of any
governmental agency or authority, or (b) constitute an event that
with the lapse of time or action by a third party, or both, could
result in a default under any of the foregoing or (c) result in the
creation of any material lien, charge or encumbrance upon any of the
assets, properties or stock of LCS or the capital stock of LCS.
4.5. Reports and Financial Statements. LCS has previously
furnished Jacksonville with true and complete copies of its (a)
Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and
annual meeting proxy statements. As of their respective dates, such
reports and statements did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
audited consolidated financial statements and unaudited interim
financial statements of LCS included in such reports or otherwise
delivered to Jacksonville (collectively referred to herein as the
"LCS 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 LCS as of
the dates thereof and the results of its operations and changes in
consolidated financial position for the periods then ended, subject,
in the case of the unaudited interim consolidated financial
statements, to normal year-end audit adjustments, any other
adjustments described therein, and the absence of certain footnotes.
Except as set forth in Schedule 4.5 to the LCS Disclosure Schedule,
since December 31, 1995, LCS has not suffered a Material Adverse
Effect and LCS is not aware of any event or circumstance, or series
of events and circumstances, which is reasonably likely to result in
a Material Adverse Effect to LCS. The books and records of LCS have
been, and are being, maintained in accordance with applicable legal
and accounting requirements and reflect only actual transactions.
As of December 31, 1995, except and to the extent (i) reflected,
disclosed or provided for in the consolidated financial statements
referred to above and (ii) of liabilities incurred since December 31,
1995 in the ordinary course of business and consistent with prudent
banking practice, LCS does not have any liabilities, whether
absolute, accrued, contingent or otherwise, material to the business,
operations, assets or financial condition of LCS.
4.6. Consents and Approvals. Other than as set forth in
Schedule 4.6 to the LCS Disclosure Schedule and other than the
receipt of approvals required by the Savings Bank Act, the Bank
Merger Act, the Regulations, the BHCA and applicable federal
securities and state laws, and the approval of the holders of LCS
Common Stock as described in Section 7.1 hereof, no filing or
registration with, no notice to and no permit, authorization, consent
or approval of any third party or any public or governmental body or
authority is necessary for the consummation by LCS of the
transactions contemplated by the Agreement or to enable LCS to
continue to conduct its business after the Effective Time in a manner
which is consistent with that in which it is presently conducted,
except where the failure to make such filing or obtain such permit,
authorization, consent or approval will not in the aggregate have a
Material Adverse Effect.
4.7. Absence of Certain Changes. Since December 31, 1995,
and except as otherwise permitted by this Agreement, LCS has not
except as set forth in Schedule 4.7 to the LCS Disclosure Schedule:
(a) issued or sold any corporate debt securities as issuer thereof;
(b) granted any option for the purchase of its capital stock; (c)
declared or set aside or paid any dividend or other distribution in
respect of its capital stock; (d) incurred any material obligation
or liability (absolute or contingent), except obligations or
liabilities incurred in the ordinary course of business in accordance
with past practices; (e) mortgaged, pledged or subjected to lien or
encumbrance (other than statutory liens for taxes not yet delinquent
and landlord liens) any of its material assets or properties except
pledges to secure government deposits and in connection with
repurchase or reverse repurchase agreements; (f) discharged or
satisfied any material lien or encumbrance or paid any obligation or
liability (absolute or contingent), other than current liabilities
included in LCS' consolidated balance sheet as of December 31, 1995,
and current liabilities incurred since the date thereof in the
ordinary course of business in accordance with past practices; (g)
sold, exchanged or otherwise disposed of any of its material capital
assets other than in the ordinary course of business in accordance
with past practices; (h) materially made or modified any wage or
salary increase other than routine periodic increases in salary for
employees in the ordinary course of business and in accordance with
past practices or as required by law, entered into any employment
contract with or other arrangement with respect to the employment of
any officer or salaried employee or instituted any employee welfare,
bonus, stock option, profit sharing, retirement or similar plan or
arrangement; (i) suffered any damage, destruction or loss, whether
or not covered by insurance, materially and adversely affecting its
business, property or assets or waived any rights of value that are
material in the aggregate, considering its business taken as a whole;
(j) except in the ordinary course of business in accordance with past
practices, entered, or agreed to enter, into any agreement or
arrangement granting any preferential right to purchase any of its
assets, properties or rights or requiring the consent of any party
to the transfer and assignment of any such assets, properties or
rights; (k) entered into any material transaction outside the
ordinary course of its business in accordance with past practices,
except as expressly contemplated by the Agreement; or (1) except in
the ordinary course of business in accordance with past practices or
as reflected in the LCS consolidated financial statements, sold or
otherwise disposed of any of its material investment securities.
4.8. Employee and Employee Benefits Matters. (a)
Schedule 4.8(a) to the LCS Disclosure Schedule lists (i) each
employee benefit plan within the meaning of ERISA Section 3(3) ("LCS
Benefit Plans") which is maintained by LCS for the benefit of any
current or former employee, officer, director, consultant or agent;
(ii) each plan, program or arrangement for the provision of medical,
surgical, or hospital care or benefits, benefits in the event of
sickness, accident, disability, death, unemployment, severance,
vacation, apprenticeship, day care, scholarship, prepaid legal
services or other benefits; and (iii) every other retirement or
deferred compensation plan, bonus or incentive compensation plan or
arrangement, severance or vacation pay arrangement, or other fringe
benefit plan, program or arrangement through which LCS provides
benefits for or on behalf of any current or former employee, officer,
director, consultant or agent. LCS has delivered or made available
to Jacksonville a true and correct copy of (a) each LCS Benefit Plan,
(b) the most recent annual report (Form 5500) filed with the Internal
Revenue Service ("IRS") with respect to each LCS Benefit Plan, if
applicable, (c) each trust agreement and group annuity contract, if
any, relating to such LCS Benefit Plan, (d) the most recent actuarial
report or valuation relating to a LCS Benefit Plan subject to Title
IV of ERISA and (e) all rulings and determination letters and any
open requests for rulings or letters that pertain to any LCS Benefit
Plan.
(b) All of the plans, programs and arrangements described
in this Section 4.8 or listed in Schedule 4.8(a) to the LCS
Disclosure Schedule that are subject to ERISA and the Internal
Revenue Code ("Code") are in material compliance with all applicable
requirements of ERISA and the Code and all other applicable federal
and state laws, including, without limitation, the reporting and
disclosure requirements of Part I of Title I of ERISA. Each of the
LCS Benefit Plans that is intended to be a pension, profit sharing,
stock bonus, thrift, savings or employee stock ownership plan that
is qualified under Section 401(a) of the Code satisfies the
applicable requirements of such provision and there exist no
circumstances that would adversely affect the qualified status of any
such Plan under that section, except with respect to any required
retroactive amendment for which the remedial amendment period has not
yet expired. All contributions required to be made under the terms
of any LCS Benefit Plan have been timely made. Except as set forth
in Schedule 4.8(b) to the LCS Disclosure Schedule, there is no
pending or, to the knowledge of LCS, threatened litigation, claim,
action, governmental proceeding or investigation against or relating
to any LCS Benefit Plan which could give rise to any material
liability, and there is no reasonable basis for any material
litigations, claims, actions or proceedings against any such LCS
Benefit Plan. No LCS Benefit Plan (or LCS Benefit Plan fiduciary)
has engaged in a non-exempt "Prohibited Transaction" (as defined in
Section 406 of ERISA and Section 4975(c) of the Code) since the date
on which said sections became applicable to such Plan. There have
been no acts or omissions by LCS that have given rise to any fines,
penalties, taxes or related charges under Sections 502(c), 502(i) or
4071 of ERISA or Chapter 43 of the Code, or that may give rise to any
material fines, penalties, taxes or related damages under such laws
for which LCS may be liable. LCS has no knowledge of, or any
reasonable basis to believe, that any material liability under Title
IV of ERISA has been incurred by LCS, any former Affiliates of LCS
or the LCS Benefit Plans since the effective date of ERISA that has
not been satisfied in full, and that any condition exists that
presents a material risk of incurring a liability under such Title,
other than liability for premiums due the Pension Benefit Guaranty
Corporation ("PBGC"), which payments have been made or will be made
when due. With respect to each of the LCS Benefit Plans which is
subject to Title IV of ERISA, the present value of accrued benefits
under such Plan or Plans, based upon the actuarial assumptions used
for funding purposes in the most recent actuarial report prepared by
such Plan's actuary with respect to such Plan, did not, as of its
latest valuation date, exceed the then current value of the assets
of such Plan allocable to such accrued benefits and LCS is not aware
of any facts or circumstances that would materially change the funded
status of any such ERISA Plan. None of the LCS Benefit Plans is a
"multi employer pension plan" as such term is defined in section
3(37) of ERISA. Except as listed on Schedule 4.8(a) of the LCS
Disclosure Schedule, no employee of LCS will be entitled to any
additional benefits or any acceleration of the time of payment or
vesting of any benefits under any LCS Benefit Plan as a result of the
transactions contemplated by this Agreement. Other than current or
contingent liabilities previously disclosed on Schedule 4.8(a) of the
LCS Disclosure Schedule, neither LCS nor any LCS Benefit Plan will
have any material current or contingent liability with respect to any
Plan. All group health plans of LCS, including any plans of current
and former Affiliates of LCS that must be taken into account under
Section 4980B of the Code or Section 601 of ERISA or the requirements
of any similar state law regarding insurance continuation, have been
operated in material compliance with the group health plan
continuation coverage requirements of Section 4980B of the Code and
Section 601 of ERISA to the extent such requirements are applicable.
All payments due from any LCS Benefit Plan (or from LCS with respect
to any LCS Benefit Plan, in any case, not including the Management
Stock Bonus Plan of LCS) have been made, and all amounts properly
accrued to date as liabilities of LCS that have not yet been paid
have been properly recorded on the books of LCS.
4.9. Litigation. Except as set forth in Schedule 4.9 to
the LCS Disclosure Schedule, no claims have been asserted and no
relief has been sought against LCS in any pending litigation or
governmental proceedings or otherwise which would be reasonably
expected to result in damages or other relief which would be
reasonably likely to have a Material Adverse Effect. To the
knowledge of LCS, there are no circumstances, conditions, events or
arrangements, contractual or otherwise, which may hereafter give rise
to any proceedings, claims, actions or government investigations
involving LCS which would reasonably be expected to result in damages
or other relief which would be reasonably likely to have a Material
Adverse Effect, nor are any such proceedings, claims, actions or
government investigations threatened. Except as set forth in
Schedule 4.9 to the LCS Disclosure Schedule, LCS is not a party to
any order, judgment or decree which would reasonably be expected to
have a Material Adverse Effect, and LCS (a) is not the subject of any
cease and desist order, or other formal or informal enforcement
action by any regulatory authority and (b) has not made any
commitment to or entered into any agreement with any regulatory
authority that restricts or adversely affects its operations or
financial condition.
4.10. Tax Matters. LCS has timely filed (inclusive of
applicable extension periods) with the appropriate governmental
agencies all material federal, state and local income, franchise,
excise, sales, use, real and personal property and other tax returns
and reports (including information returns and reports) that are
required to be filed, and LCS is not materially delinquent in the
payment of any taxes shown on such returns or reports or on any
assessments for any such taxes received by LCS. There are included
in the LCS Financial Statements adequate reserves for the payment of
all accrued but unpaid material federal, state and local taxes of
LCS, including interest and penalties, whether or not disputed for
such fiscal years as reflected therein and all fiscal years prior
thereto. LCS has not executed or filed with the Internal Revenue
Service ("IRS") or any state tax authority any agreement extending
the period for assessment and collection of any federal or state tax,
and LCS is not a party to any action or proceeding by any
governmental authority for assessment or collection of taxes. There
is no outstanding material assessment or claim for collection of
taxes against LCS. Except as set forth in Schedule 4.10 to the LCS
Disclosure Schedule, the federal income tax returns of LCS have been
audited by the IRS (or are closed to examination due to the
expiration of the applicable statute of limitations) and no
deficiencies were asserted as a result of such audit which have not
been resolved and paid in full or adequate reserves or accruals
established in accordance with generally accepted accounting
principles with respect thereto.
LCS has not, during the past five (5) years, except as
disclosed in Schedule 4.10 to the LCS Disclosure Schedule, received
any notice of deficiency, proposed deficiency or assessment from the
IRS or any other governmental agency, with respect to any federal,
state, county or local taxes. No federal or state tax return of LCS
is currently the subject of any audit by the IRS or any other
governmental agency. During the past five (5) years, no material
deficiencies have been asserted in connection with the federal and
state income tax returns of LCS, and LCS has no reason to believe
that any material deficiency would be asserted relating thereto.
Except as disclosed in Schedule 4.10 to the LCS Disclosure Schedule,
LCS is not a party to any agreement providing for allocation or
sharing of taxes. LCS has not ever been a member of an "affiliated
group of corporations" (within the meaning of Section 1504(a) of the
Code) filing consolidated returns, other than the affiliated group
of which LCS is or LCS was the common parent.
4.11. Information in the LCS Proxy Statement. The LCS
Proxy Statement will not, either at the time it is mailed to the
shareholders of LCS in connection with the LCS Shareholders' Meeting
(as defined in Section 7.1 hereof) or at the time of the LCS
Shareholders Meeting, 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 in which they were made, not misleading; provided,
however, that none of the representations and warranties in this
Section 4.11 shall apply to statements in or omissions from the LCS
Proxy Statement made in reliance upon and in conformity with
information about or furnished by or on behalf of Jacksonville for
use in the LCS Proxy Statement.
4.12. Environmental Matters. For purposes of this
Section 4.12, the following terms shall have the indicated meaning:
"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 (1) the
protection, preservation or restoration of the environment
(including, without limitation, air, water vapor, surface water,
groundwater, drinking water supply, surface soil, subsurface soil,
plant and animal life or any other natural resource), and/or (2) the
use, storage, recycling, treatment, generation, transportation,
processing, handling, labeling, production, release or disposal of
Materials of Environmental Concern. The term Environmental Law
includes without limitation (1) 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, 15 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; and all comparable state
and local laws, and (2) 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
Materials of Environmental Concern.
"Environmental Claim" means any written notice from any
governmental authority or third party alleging potential liability
(including, without limitation, potential liability for investigatory
costs, cleanup costs, governmental response costs, natural resources
damages, property damages, personal injuries or penalties) arising
out of, based on, or resulting from the presence, or release into the
environment, of any Materials of Environmental Concern.
"Materials of Environmental Concern" means pollutants,
contaminants, wastes, toxic substances, petroleum and petroleum
products and any other materials regulated under Environmental Laws.
"Loan Portfolio Properties and Other Properties Owned" means
those properties owned, leased or operated by LCS, including those
properties serving as collateral for any loans made and retained by
LCS or for which LCS serves in a trust relationship for the loans
retained in portfolio.
(a) Other than as set forth on Schedule 4.12(a) to the LCS
Disclosure Schedule, to the knowledge of LCS, LCS is in compliance
with all Environmental Laws, except for any violations of any
Environmental Law which would not, singly or in the aggregate, have
a material adverse effect on the business, operations, assets,
financial condition or prospects of LCS. Other than as set forth on
Schedule 4.12(a) to the LCS Disclosure Schedule, since December 31,
1991, LCS has not received any communication alleging that LCS is not
in such compliance and, to the knowledge of LCS, there are no present
circumstances that would prevent or interfere with the continuation
of such compliance.
(b) Other than as set forth on Schedule 4.12(b) to the LCS
Disclosure Schedule, to the knowledge of LCS, LCS has not been or is
not in violation of or liable under any Environmental Law, except any
such violations or liabilities which would not singly or in the
aggregate have a material adverse effect on the business, operations,
assets or financial condition of LCS.
(c) Other than as set forth on Schedule 4.12(c) to the LCS
Disclosure Schedule, to the knowledge of LCS, none of the Loan
Portfolio Properties and Other Properties Owned by it has been or is
in violation of or liable under any Environmental Law, except any
such violations or liabilities which singly or in the aggregate would
not have a material adverse effect on the business, operations,
assets or financial condition of LCS.
(d) Other than as set forth on Schedule 4.12(d) to the LCS
Disclosure Schedule, to the knowledge of LCS, there are no actions,
suits, demands, notices, claims, investigations or proceedings
pending or threatened relating to the liability of the Loan Portfolio
Properties and Other Properties Owned by LCS under any Environmental
Law, including without limitation any notices, demand letters or
requests for information from any federal or state environmental
agency relating to any such liabilities under or violations of
Environmental Law, except such which would not have or result in a
material adverse effect on the business, operations, assets or
financial condition of LCS.
(e) Other than as set forth on Schedule 4.12(e) to the LCS
Disclosure Schedule, to the knowledge of LCS, there are no past or
present actions, activities, circumstances, conditions, events or
incidents that could reasonably form the basis of any Environmental
Claim or other claim or action or governmental investigation that
could result in the imposition of any liability arising under any
Environmental Law against LCS or against any person or entity whose
liability for any Environmental Claim LCS has or may have retained
or assumed either contractually or by operation of law, except such
which would not have a material adverse effect on the business,
operations, assets, financial condition or prospects of LCS.
(f) LCS has set forth on Schedule 4.12(f) to the LCS
Disclosure Schedule, any environmental studies conducted by it during
the past five years with respect to any properties owned by it as of
the date hereof.
4.13. Insurance. LCS has delivered to Jacksonville as
part of Schedule 4.13 to the LCS Disclosure Schedule true, accurate
and complete copies of all insurance policies and fidelity bonds of
LCS. Each such policy is in full force and effect, with all premiums
due thereon on or prior to the Closing Date having been paid as and
when due. LCS has not been notified that its fidelity or insurance
coverage will not be renewed by its carrier(s) on substantially the
same terms as its existing coverage. All such policies (i) are
sufficient for compliance by LCS with all requirements of law and all
agreements to which LCS is a party, and (ii) will not terminate or
lapse prior to the Effective Time without similar policies being
obtained that would continue until the Effective Time.
4.14. Compliance with Laws and Orders. Except as set
forth in Schedule 4.14 to the LCS Disclosure Schedule, LCS has not
received notice of any violation or alleged material violation of,
or, to the knowledge of LCS, is subject to any liability (whether
accrued, absolute, contingent, direct or indirect) for past or
continuing material violations of, any law, statute or regulation.
LCS is not in default under, and no event has occurred that, with the
lapse of time or action by a third party or both, could result in a
default under the terms of any judgment, decree, order, writ, rule
or regulation of any governmental authority or court, whether
federal, state or local and whether at law or in equity, where the
failure to be in full compliance would reasonably be expected to
result alone or in the aggregate in damages, which would be
reasonably likely to have a Material Adverse Effect.
4.15. Governmental Regulation. LCS holds all material
licenses, certificates, permits, franchises and rights from all
appropriate federal, state and other public authorities necessary for
the conduct of its business; and, between the date hereof and the
Closing Date, LCS will maintain all such licenses, certificates,
permits, franchises and rights in effect. Except as set forth in
Schedule 4.15 to the LCS Disclosure Schedule, LCS is not a party or
subject to any agreements, directives, orders or similar arrangements
between or involving LCS and any state or federal savings institution
regulatory authority. In connection with its most recent examination
of Litchfield, neither the Commissioner nor the FDIC have informed
Litchfield, whether by written communication or otherwise, to amend
or change in any way its accounting methods, methods of operation or
business practices, or to classify any loans not previously
classified or to charge-off loans, or increase its allowance for loan
losses or to take or discontinue any activity or action.
4.16. Contracts and Commitments. Except as set forth
in Schedule 4.16 to the LCS Disclosure Schedule, LCS is not a party
to or bound by any (a) material lease or license with respect to any
property, real or personal; (b) material contract or commitment for
capital expenditures; (c) material contract or commitment for total
expenses for the purchase of materials, supplies or for the
performance of services by third parties for a period of more than
60 days from the date of this Agreement; (d) material contract or
option for the purchase or sale of any real or personal property
other than in the ordinary course of business; or (e) agreement,
arrangement or understanding relating to the employment, election,
retention in office or severance of any present or former director,
officer or employee of LCS. To its knowledge, LCS has performed in
all material respects all obligations required to be performed by it
to date and is not in default under, and no event has occurred which,
with the lapse of time or action by a third party or both, could
result in a default resulting in material damages or other material
default under any outstanding mortgage, lease, contract, commitment
or agreement to which LCS is a party or by which LCS is bound or
under any provision of its articles of incorporation or bylaws. Each
such outstanding material mortgage, lease, contract, commitment or
agreement is a valid and legally binding obligation of LCS subject
to (x) all applicable bankruptcy, insolvency, moratorium or other
similar laws affecting the enforcement of creditors rights generally
or the rights of creditors of savings associations the accounts of
which are insured by the FDIC, and (y) the application of equitable
principles if equitable remedies are sought.
4.17. Agreements with Directors, Officers and
Shareholders. Except as set forth in Schedule 4.17 to the LCS
Disclosure Schedule, no director, executive officer, or holder of
five percent (5.0%) or more of the outstanding capital stock of LCS
nor any associate of any such person (a "LCS Principal") (a) is or
has during the period subsequent to December 31, 1995, been a party
(other than as a depositor) to any transaction with LCS, whether as
a borrower or otherwise, that (i) was made other than in the ordinary
course of business, (ii) was made on other than substantially the
same terms, including interest rate and collateral, as those
prevailing at the time for comparable transactions with other
persons, or (iii) involves more than the normal risk of
collectability or presents other unfavorable features; or (b) is a
party to any material loan or loan commitment, whether written or
oral.
4.18. Accuracy of Information. The statements made by
LCS in the Agreement and in any other written documents executed
and/or delivered by or on behalf of LCS pursuant to the terms of the
Agreement are true and correct in all material respects. The
statements contained in such other documents or specifically referred
to in the Agreement will be deemed to constitute representations and
warranties of LCS under this Agreement to the same extent as if set
forth herein in full.
4.19. Supplement to LCS Disclosure Schedule. LCS will
promptly supplement or amend the LCS Disclosure Schedule with respect
to any matter hereafter arising that, if existing or occurring at the
date of this Agreement, would have been required to be set forth or
described in the LCS Disclosure Schedule. No supplement or amendment
to the LCS Disclosure Schedule will have any effect for the purpose
of determining satisfaction of the condition set forth in Section 8.2
hereof.
4.20. Title to Assets; Leases
(a) Except for (i) liens and encumbrances specifically
disclosed in any of the consolidated financial statements of LCS
referred to in Section 4.5 hereof, (ii) landlords' or statutory liens
or other liens incurred in the ordinary course of business and not
securing indebtedness for borrowed money and not yet delinquent, and
(iii) liens and encumbrances which are not material in amount and do
not materially impair the value of any property subject thereto or
the use of such property for the purposes for which it is presently
used or intended to be used, to the knowledge of LCS, LCS has good
and marketable title, free and clear of all security interests,
encumbrances, trust agreements, liens or other adverse claims, to all
its assets and property, real and personal, reflected in the
financial statements referred to in Section 4.5 hereof or acquired
thereafter, which includes all property and assets used by LCS that
are material to the conduct of its businesses, except for assets and
property disposed of in the ordinary course of business after
December 31, 1995.
(b) LCS as lessee has the right under valid and subsisting
leases to occupy, use, possess and control all property leased by it
in all material respects as presently occupied, used, possessed and
controlled by LCS and such leases will not terminate or lapse prior
to the Effective Time or be affected in any material respect by
consummation of the transactions contemplated hereby. Schedule
4.20(b) contains an accurate listing of each lease pursuant to which
LCS acts as lessor or lessee, including the expiration date and the
terms of any renewal options which relate to the same, as well as a
listing of each material real property owned by LCS and used in the
conduct of its business.
(c) All real and personal property is available for
inspection by Jacksonville and LCS disclaims any warranty of fitness
for any particular purpose. All real and personal property of LCS
is in an "AS IS" condition. LCS has furnished an Illinois
Responsible Property Transfer Act Disclosure to Jacksonville
disclosing any information about any real properties to the best of
LCS' knowledge. However, LCS has made no independent investigation
or assessments of the condition of the real properties in any manner
whatsoever including but not limited to any of the representations
as to the environmental condition of any assets under this Agreement.
4.21. Information Supplied for Inclusion in the
Jacksonville Proxy Statement. Any information regarding LCS or
Litchfield supplied by LCS specifically for inclusion in the
Jacksonville Proxy Statement (as defined in Section 7.4 hereof) will
not contain an untrue statement or omit to state a material fact
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading.
4.22. Fees. LCS has not, and to the knowledge of LCS,
none of their respective officers, directors, employees or agents,
has employed any broker or finder or incurred any liability for any
financial advisory fees, brokerage fees, commissions, or finders
fees, and no broker or finder has acted directly or indirectly for
LCS, in connection with this Agreement or the transactions
contemplated hereby, except for fees payable to RP Financial, LC for
preparation of a fairness opinion discussed at Section 9.6 hereof.
4.23. Business of LCS. Since December 31, 1995, LCS has
conducted its business in the ordinary course. For purposes of the
foregoing, LCS has not, since December 31, 1995, controlled expenses
through the (i) elimination of employee benefits; (ii) deferral of
routine maintenance of real property or leased premises; (iii)
elimination of reserves where the liability related to such reserve
has remained; (iv) reduction of capital improvements from previous
levels; (v) failure to depreciate capital assets in accordance with
past practices or to eliminate capital assets no longer used in LCS's
business; (vi) capitalized loan production expenses other than in
accordance with SFAS No. 91; or (vii) extraordinary reduction or
deferral or ordinary or necessary expenses.
ARTICLE V.
COVENANTS OF JACKSONVILLE
Jacksonville hereby agrees that from the date of this
Agreement until the Effective Time:
5.1. Affirmative Covenants.
(a) Unless the prior written consent of LCS shall have
been obtained (which shall not be unreasonably withheld),
Jacksonville will maintain and will cause each of its Subsidiaries
to maintain their corporate existence in good standing so as to be
able to consummate the transactions contemplated by the Agreement.
(b) As soon as reasonably practicable, Jacksonville will
furnish Litchfield with copies of all of Jacksonville's periodic
reports on Forms F-2, F-4 and F-3 and all proxy statements filed with
the FDIC subsequent to the date hereof.
5.2. Negative Covenants. Except as specifically
contemplated by this Agreement, Jacksonville shall not do, or agree
or commit to do, or permit any Jacksonville Subsidiary to do, without
the prior written consent of LCS (which shall not be unreasonably
withheld), any of the following:
(a) willfully take action which would or is reasonably
likely to (i) adversely affect the ability of either Jacksonville or
LCS to obtain any necessary approvals of governmental authorities
required for the transactions contemplated hereby; (ii) adversely
affect Jacksonville's ability to perform their covenants and
agreements under this Agreement; or (iii) result in any of the
conditions to the Company Merger set forth in Articles IX and X not
being satisfied; or
(b) agree in writing or otherwise to do any of the
foregoing.
5.3. Breaches. Jacksonville shall, in the event it becomes
aware of the impending or threatened occurrence of any event or
condition which would cause or constitute a material breach (or would
have caused or constituted a breach had such event occurred or been
known prior to the date hereof) of any of its representations or
agreements contained or referred to herein, give prompt written
notice thereof to LCS and use its best efforts to prevent or promptly
remedy the same.
5.4. Employee Benefit Plans: Employment Arrangements
(a) Jacksonville shall offer continued employment to full-
time employees of LCS. Employees of LCS who continue employment with
Jacksonville on or after the Effective Time (all such persons
referred to herein as "Continuing Employees") shall be eligible to
participate in such employee benefit plans as may be in effect
generally for employees of Jacksonville from time to time (the
"Jacksonville Benefit Plans"), if such Continuing Employee shall be
eligible or selected for participation therein. Except as
specifically set forth in this Section 5.4, Continuing Employees
shall be entitled to participate in the Jacksonville Benefit Plans
on the same basis as new employees of Jacksonville and with
Continuing Employees being given credit for their prior years of
service with LCS for purposes of determining eligibility and vesting
under the Jacksonville Benefit Plans. Notwithstanding anything in
this Section 5.4(a) to the contrary, except as set forth in Schedule
5.4(a) to the Jacksonville Disclosure Schedule participation by
Continuing Employees in employee benefit plans of Jacksonville with
respect to which eligibility and participation is at the discretion
of the employer, such as non-qualified deferred compensation plans,
stock option plans, stock bonus plans, restricted stock plans, and
other such similar plans, (but not including employee benefit plans
generally available to all full-time employees of Jacksonville) shall
be discretionary with such employer.
(b) With respect to Continuing Employees, there shall be
no waiting period or preexisting condition exclusions applicable
under the health benefits coverage to be provided following the
Effective Time to such persons, but the benefits previously received
by such persons will not count toward the maximum benefit coverages
provided by Jacksonville.
(c) Continuing Employees shall receive credit for their
prior years of service with LCS in determining their vacation
allowance under the vacation policy of Jacksonville.
(d) At the request of Jacksonville, which shall be made
within a reasonable period of time following the execution of this
Agreement, LCS shall cause its 401(k) plan (the "Litchfield 401(k)
Plan") to be terminated immediately prior to the Effective Time with
the accounts of participants becoming fully-vested and with the
participants receiving the right to roll-over their account balances
to an individual retirement account and/or Jacksonville's 401(k) plan
(the "Jacksonville 401(k) Plan").
(e) With respect to the LCS ESOP, Jacksonville will
cooperate with LCS to maximize the allocation of the Merger
Consideration applicable to unallocated shares to the existing
participants of the LCS ESOP in a manner consistent with ERISA, the
Code and any other applicable legal requirements. In this regard, the
ESOP may be terminated at or prior to the Effective Time and if
terminated, LCS shall promptly apply to the Internal Revenue Service
for a favorable determination letter on the LCS ESOP's termination.
Any and all distributions from the ESOP after its termination shall
be made consistent with the determination letter of termination
issued by the Internal Revenue Service relating to the termination
and the allocation of any excess amounts in the LCS ESOP suspense
account after repayment of any outstanding ESOP loan.
(f) The current Chief Executive Officer ("Executive") of
LCS shall be offered a position as Vice President of Jacksonville,
reporting directly to Jacksonville's President. Such position shall
be considered a senior officer position. Jacksonville shall use its
best efforts to enter into an employment agreement with the
Executive, in consideration of the Executive foregoing her right to
and payments under her existing employment agreement with LCS, said
agreement providing for a three year term at an initial salary equal
to the Executive's current salary. Jacksonville shall offer the
Executive a deferred compensation agreement and the Executive shall
be eligible for all benefits accorded to persons at the level of Vice
President of Jacksonville.
(g) LCS' assistant vice president, treasurer and secretary
shall perform substantially the same function for Jacksonville as
they are currently providing LCS. At least one of the individuals
performing said functions shall be designated an officer of
Jacksonville.
5.5. Filing of Applications. Jacksonville shall use its
best efforts promptly to prepare, submit, publish and file (a) an
application to the FDIC under the Bank Merger Act; (b) a waiver
request to the Board of Governors of the Federal Reserve ("FRB")
under the BHCA, and (c) any other applications, notices or statements
required to be filed in connection with the transactions contemplated
hereby.
5.6. Expenses. Jacksonville hereby agrees that if this
Agreement or the transactions contemplated hereby are terminated by
LCS pursuant to Sections 11.1(c) (iii) or (iv) as a result of a
willful breach by Jacksonville, Jacksonville shall promptly (and in
any event within ten (10) business days after such termination) pay
all reasonable Expenses of LCS. For purposes of this Section 5.6,
the "Expenses of LCS" shall include all reasonable out-of-pocket
expenses (including all fees and expenses of counsel, accountants,
investment bankers, experts and consultants to LCS and its
Affiliates) incurred by it or on its behalf in connection with the
consummation of the transactions contemplated by this Agreement and
any losses incurred by LCS in the disposition of any assets of LCS
as directed by Jacksonville pursuant to Section 7.11 of this
Agreement.
5.7. Supplement to Jacksonville Disclosure Schedule.
Jacksonville will promptly supplement or amend the Jacksonville
Disclosure Schedule with respect to any matter hereafter arising
that, if existing or occurring at the date of this Agreement, would
have been required to be set forth or described in the Jacksonville
Disclosure Schedule. No supplement or amendment to the Jacksonville
Disclosure Schedule will have any effect for the purpose of
determining satisfaction of the condition set forth in Section 9.1
hereof.
5.8. Confidentiality. Jacksonville agrees to treat as
strictly confidential and agrees not to divulge to any other person,
natural or corporate (other than employees of, and attorneys and
accountants for, such party) any proprietary financial statements,
schedules, contracts, agreements, instruments, papers, customer and
account lists, documents and other information relating to LCS by
which it may come to know or which may come into its possession
during the course of its due diligence investigation of LCS and, if
the transactions contemplated hereby are not consummated for any
reason, Jacksonville agrees promptly to return to LCS all written
proprietary material furnished in connection with such investigation.
5.9. Non-Assignability. Jacksonville hereby agrees that
its rights under this Agreement may not be assigned, sold or
otherwise transferred to any other party.
ARTICLE VI.
COVENANTS OF LCS
LCS hereby agrees that from the date of this Agreement
until the Effective Time:
6.1. Affirmative Covenants. Unless the prior written
consent of Jacksonville shall have been obtained (which shall not be
unreasonably withheld) and except as otherwise contemplated herein,
LCS will:
(a) operate its business in the ordinary course in
accordance with past business practices;
(b) use its best efforts to preserve intact its business
organization and assets, maintain its rights and franchises, retain
the services of its officers and key employees (except that it shall
have the right to terminate the employment of any officer or key
employee in accordance with established employment procedures) and
maintain its relationships with customers:
(c) maintain its corporate existence in good standing and
file all required LCS Reports (as defined in such Section 12.7(c)
hereof);
(d) use its best efforts to maintain and keep its
properties in as good repair and condition as at present, except for
ordinary wear and tear;
(e) use its best efforts to keep in full force and effect
insurance and bonds comparable in amount and scope of coverage to
that now maintained by it and, in the event that LCS is unable to
keep such insurance and bonds in full force and effect, to provide
prompt notice of such failure to Jacksonville;
(f) perform all obligations required to be performed by
it under all material contracts, leases, and documents relating to
or affecting its assets, properties, and business;
(g) use its best efforts to comply with and perform in all
material respects all obligations and duties imposed upon it by all
applicable laws and regulations; and
(h) as soon as reasonably practicable, furnish
Jacksonville copies of all of LCS' financial and regulatory reports
subsequent to the date hereof.
6.2. Negative Covenants. Except as specifically
contemplated by this Agreement, from the date hereof until the
Effective Time, LCS shall not do, without the prior written consent
of Jacksonville (which shall not be unreasonably withheld), any of
the following:
(a) incur any material liabilities or material obligations
(which in the aggregate shall not exceed $5,000), whether directly
or by way of guaranty, including any obligation for borrowed money
whether or not evidenced by a note, bond, debenture or similar
instrument or enter into or extend any material agreement or lease,
except in the ordinary course of business consistent with prudent
business practices or in connection with the transactions
contemplated and permitted by the Agreement;
(b) (i) grant any bonus or material increase in
compensation to its directors or grant any bonus or any increase in
compensation to its officers and employees either individually or as
a class, (ii) effect any change in retirement benefits to any class
of employees or officers (unless any such change shall be required
by applicable law) that would increase its retirement benefit
liabilities, (iii) adopt, enter into, amend or modify any LCS Benefit
Plan, (iv) enter into any employment, severance or similar agreements
or arrangements with any directors or officers.
(c) declare or pay any dividend on, or make any other
distribution in respect of, its outstanding shares of capital stock.
(d) (i) redeem, purchase or otherwise acquire any shares
of its capital stock or any securities or obligations convertible
into or exchangeable for any shares of its capital stock, conversion
or other rights to acquire any shares of its capital stock or any
such securities or obligations; (ii) merge with or into any other
corporation, savings institution or bank, permit any other
corporation, savings institution or bank to merge into it or
consolidate with any other corporation or bank, in either case,
unless the fiduciary duties of LCS' Board of Directors require it to
do so, or effect any reorganization or recapitalization; (iii)
purchase or otherwise acquire any assets, or shares of any class of
stock, of any corporation, savings institution, bank or other
business; (iv) liquidate, sell, dispose of, or encumber any assets
or acquire any assets, other than in the ordinary course of its
business consistent with past practices; or (v) split, combine or
reclassify any of its capital stock or issue or authorize or propose
the issuance of any other securities in respect of, in lieu of or in
substitution for, shares of its capital stock;
(e) issue, deliver, award, grant or sell, or authorize or
propose the issuance, delivery, award, grant or sale of, any shares
of its capital stock of any class (including shares held in
treasury), any debt instrument having a right to vote or any
securities convertible into, or any rights, to acquire, any such
shares, voting debt or convertible securities;
(f) initiate, solicit or encourage, or take any other
action to facilitate, any inquiries or the making of any proposal
which constitutes a Different Proposal, take any action in
furtherance of such inquiries or to obtain a Different Proposal, or
negotiate with any person in, or agree to or endorse any Different
Proposal, or authorize or permit any of its officers, directors or
employees or any investment banker, financial advisor, accountant or
other representative retained by it to take any such action.
"Different Proposal" means a bona fide proposal to acquire the entire
equity interest in LCS or substantially all of the assets of LCS,
which is expressly conditioned upon the termination of this Agreement
and is made by a third party;
(g) propose or adopt any amendments to its articles of
incorporation or bylaws, except such amendments as may be required
to consummate the transactions contemplated by this Agreement;
(h) enter into an agreement in principle with respect to
any acquisition of a material amount of assets or securities or any
release or relinquishment of any material contract rights not in the
ordinary course of business;
(i) except in its fiduciary capacity, purchase any shares
of capital stock of Jacksonville;
(j) change any of its methods of accounting in effect at
December 31, 1995, or change any of its methods of reporting income
or deductions for federal income tax purposes from those employed in
the preparation of the federal income tax returns for the taxable
year ending December 31, 1995, except as may be required by law or
generally accepted accounting principles;
(k) willfully take action which would or is reasonably
likely to (i) adversely affect the ability of Jacksonville or LCS to
obtain any necessary approvals of governmental authorities required
for the transactions contemplated hereby; (ii) adversely affect LCS'
ability to perform its covenants and agreements under this Agreement;
or (iii) result in any of the conditions to the Merger set forth in
Articles VIII and X not being satisfied;
(l) change in any material respect the lending,
investment, deposit, asset and liability management and other
material policies concerning the business of LCS, unless required by
law or regulation or, with respect to lending or depository
activities, unless such change is made in response to market
conditions;
(m) file any applications or make any contract with
respect to branching by LCS (whether de novo or by purchase, sale or
relocation);
(n) form any new subsidiary or enter into or invest in any
partnership, joint venture or other business enterprise;
(o) purchase any debt securities or derivative securities;
(p) purchase any equity securities other than Federal Home
Loan Bank stock;
(q) discharge or satisfy any lien or encumbrance or pay
any material obligation or liability (absolute or contingent) other
than at scheduled maturity or in the ordinary course of business;
(r) sell or otherwise dispose of any loan, mortgage-backed
security or investment security except in the ordinary course of
business consistent with prudent banking practices and policies;
(s) modify or restructure the terms of any loans except
in the ordinary course of business consistent with prudent banking
practices;
(t) make any capital expenditures in excess of $5,000
individually or $15,000 in the aggregate, other than pursuant to
binding commitments existing on the date hereof and other than
expenditures necessary to maintain existing assets in good repair;
(u) change its method of accounting in effect prior to the
Effective Time, except as required by changes in laws or regulations
or generally accepted accounting principles concurred in by its
independent certified public accountants, or change any of its
methods of reporting income and deductions for federal income tax
purposes from those employed in the preparation of its federal income
tax returns for the year ended December 31, 1995, except as required
by changes in laws or regulations;
(v) acquire in any manner whatsoever (other than to
realize upon collateral for a defaulted loan) any business or entity;
or
(w) grant or agree to pay any bonus, severance or
termination payment to, or enter into or amend any employment
agreement, severance agreement and/or supplemental executive
agreement with any of its directors, officers or employees except as
may be required pursuant to legally binding commitments existing on
the date hereof and set forth on LCS Disclosure Schedule 4.8.
(x) enter into or, except as may be required by law,
modify any pension, retirement, stock option, stock purchase, stock
appreciation right, stock grant, savings, profit sharing, deferred
compensation, supplemental retirement, consulting, bonus, group
insurance or other employee benefit, incentive or welfare contract,
plan or arrangement, or any trust agreement related thereto, in
respect of any of its directors, officers or employees; or make any
annual additions to (a) LCS' employee stock ownership plan ("LCS
ESOP") in excess of those amounts permitted pursuant to Sections 404
and 415 of the Code; (b) any other defined contribution or defined
benefit plan not in the ordinary course of business and consistent
with past practices and policies.
(y ) agree in writing or otherwise to do any of the
foregoing.
6.3. Report to Jacksonville. LCS will use its best efforts
to keep Jacksonville fully informed concerning all trends and
developments of which it becomes aware that may have a material
effect upon the business, any properties or condition (either
financial or otherwise) of LCS.
6.4. Breaches. LCS shall, in the event it becomes aware
of the impending or threatened occurrence of any event or condition
which would cause or constitute a material breach (or would have
caused or constituted a breach had such event occurred or been known
prior to the date hereof) of any of its representations or agreements
contained or referred to herein, give prompt written notice thereof
to Jacksonville and use its best efforts to prevent or promptly
remedy the same.
6.5. Supplement to Disclosure Schedule. LCS will promptly
supplement or amend the LCS Disclosure Schedule with respect to any
matter hereafter arising that, if existing or occurring at the date
of this Agreement, would have been required to be set forth or
described in the LCS Disclosure Schedule. No supplement or amendment
to the LCS Disclosure Schedule will have any effect for the purpose
of determining satisfaction of the condition set forth in Section 8.2
hereof.
6.6. Expenses. LCS hereby agrees that if this Agreement
or the transactions contemplated hereby are terminated pursuant to
Sections 11.1 (b)(iii) or 11.1 (b)(iv) as a result of a willful
breach by LCS, LCS shall promptly (and in any event within ten (10)
business days after such termination) pay all Expenses of
Jacksonville. "Expenses of Jacksonville" as used in this Section 6.6
shall include all reasonable in amount and reasonably incurred
out-of-pocket expenses of Jacksonville (including all fees and
expenses of counsel, accountants, experts and consultants to
Jacksonville and its Affiliates) incurred by it or on its behalf in
connection with the consummation of the transactions contemplated by
this Agreement.
6.7. Consents and Approvals. LCS shall use its best
efforts to assist Jacksonville in obtaining the consents and
approvals referenced in Section 8.5 hereof.
6.8. Dissenters' Rights. Any holder of LCS Common Stock
otherwise entitled to receive the Purchase Price for each of his or
her shares shall be entitled to demand payment of the fair cash value
of such shares as specified in Section 262 of the Delaware General
Corporation Law ("DGCL") if the holder follows the procedures
specified therein. These shares shall hereafter be specified as
"Dissenting Shares." Any Dissenting Shares shall not, after the
Effective Time, be entitled to vote for any purpose or receive any
dividends or other distributions and shall not be converted into cash
as provided in Section 2.2 hereof; provided, however, that shares of
LCS Common Stock held by a dissenting shareholder who subsequently
withdraws a demand for payment, fails to comply fully with the
requirements of Section 262 of the DGCL, or otherwise fails to
establish the right of such shareholder to be paid the fair cash
value of such shareholder's shares under Section 262 of the DGCL
shall be deemed to be converted into cash pursuant to the terms and
conditions specified herein. LCS shall give Jacksonville prompt
notice of any written demands for appraisal of any shares of LCS
Common Stock, attempted withdrawals of any such demands, and any
other instruments served pursuant to Section 262 of the DGCL and
received by LCS relating to shareholders' rights of appraisal. LCS
shall not, except with the prior written consent of Jacksonville,
voluntarily make any payment with respect to any demands for
appraisals of any shares of LCS Common Stock, offer to settle or
settle any such demands or approve any withdrawal of any such
demands.
ARTICLE VII.
ADDITIONAL AGREEMENTS
7.1. LCS Shareholders' Meeting. LCS shall, as soon as is
reasonably practicable, call and hold a meeting of its shareholders
(the "LCS Shareholders' Meeting") to submit for shareholder approval
this Agreement. The Board of Directors of LCS will recommend that
holders of LCS Common Stock vote in favor of and approve this
Agreement at the LCS Shareholders' Meeting.
7.2. Proxy Statement for LCS Shareholders' Meeting. For
the purposes of holding the LCS Shareholders' Meeting, LCS shall
prepare an appropriate proxy statement satisfying all applicable
requirements under state and federal law and regulations thereunder
(said proxy statement, together with any and all amendments or
supplements thereto, being herein referred to as the "LCS Proxy
Statement").
7.3. Jacksonville Shareholders' Meeting. Jacksonville
shall, if necessary, call and hold a meeting of its shareholders (the
"Jacksonville Shareholders Meeting") to submit for shareholder
approval this Agreement. The Board of Directors of Jacksonville will
recommend that holders of its common stock vote in favor of and
approve this Agreement. In the event that Jacksonville does not need
to hold a stockholders meeting it may provide its stockholders with
an information statement setting forth the terms of this Agreement.
7.4. Proxy Statement for Jacksonville Shareholders'
Meeting. For the purposes of holding the Jacksonville Shareholders
Meeting, Jacksonville shall prepare an appropriate proxy statement
satisfying all applicable requirements under federal and state law
and regulation.
7.5. Cooperation: Regulatory Approvals. The parties shall
cooperate, and shall cause each of their affiliates and subsidiaries
to cooperate, in the preparation and submission by them, as promptly
as reasonably practicable, of such applications, petitions, waivers
and other documents and materials as any of them may reasonably deem
necessary or desirable to the Commissioner, the FRB, the FDIC, the
Securities and Exchange Commission, the Department of Justice
("DOJ"), other regulatory authorities, and any other persons for the
purpose of obtaining any approvals or consents necessary to
consummate the transactions contemplated by the Agreement. Each
party will have the right prior to filing to review and comment on
such applications, petitions and other documents and materials and
shall furnish to the other copies thereof promptly after filing or
submission thereof. At the date hereof, none of the parties is aware
of any reason that the regulatory approvals required to be obtained
by it would not be obtained. The obligation to take action as
provided in this Section 7.5 shall not be construed as including an
obligation to accept any terms of or conditions to a consent,
authorization, order or approval of, or any exemption by, any party
that are unduly burdensome as reasonably determined by the Boards of
Directors of Jacksonville or LCS. In the event of a restraining
order or injunction which prevents the Closing by reason of the
operation of Section 10.2, each of the parties hereto shall use its
respective best efforts to cause such order or injunction to be
lifted and the Closing to be consummated as soon as reasonably
practicable.
7.6. Reports. Prior to the Effective Time, LCS shall
prepare and file as and when required all LCS Reports. LCS shall
prepare such LCS Reports so that (a) they comply in all material
respects with all of the statutes, rules and regulations enforced or
promulgated by the regulatory authority with which they are filed and
do not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances
under which they were made, not misleading, and (b) with respect to
any LCS Reports containing financial information of the type included
in the LCS consolidated financial statements, the financial
information (i) is prepared in accordance with generally accepted
accounting principles and practices as utilized in the LCS
consolidated financial statements applied on a consistent basis, (ii)
presents fairly the consolidated financial condition of LCS at the
dates, and the results of operations and cash flows for the periods,
stated therein and (iii) in the case of interim fiscal periods,
reflects all adjustments, consisting only of normal recurring items,
subject to year-end audit adjustments. All LCS Reports shall be
provided to Jacksonville promptly following the filing of such
reports with the respective regulatory authority.
7.7. Brokers or Finders. Each of Jacksonville and LCS
represents that no agent, broker, investment banker, financial
advisor or other firm or person is or will be entitled to any
broker's or finder's fee or any other commission or similar fee in
connection with any of the transactions contemplated by this
Agreement, other than LCS' engagement of RP Financial, LC.
7.8. Additional Agreements: Reasonable Efforts. Subject
to the terms and conditions of this Agreement, each of the parties
hereto agrees to use all reasonable efforts to take, or cause to be
taken, all action and to do, or cause to be done, all things
necessary, proper or advisable under applicable laws and regulations
to consummate and make effective the transactions contemplated by the
Agreement, subject to the appropriate vote of (i) the shareholders
of LCS described in Section 7.1, and (ii) the shareholders of
Jacksonville described in Section 7.3 including cooperating fully
with the other party. In case at any time after the Effective Time
any further action is necessary or desirable to carry out the
purposes of this Agreement or to vest Jacksonville with full title
to all properties, assets, rights, approvals, immunities and
franchises of LCS, the proper officers and directors of each party
to this Agreement shall take all such necessary action.
7.9. Release of Information. LCS and Jacksonville agree
that prior to making any public announcement with respect to the
transactions contemplated by this Agreement, each party will consult
with the other and will use its best efforts either to agree upon the
text of the proposed joint announcement to be made by both parties
or to obtain the other's approval (which approval shall not be
unreasonably withheld) of the text of an announcement to be made
solely on behalf of such party. In the event that the parties do not
ultimately agree on the text of any proposed public announcement, no
such disclosure shall be made unless the party seeking to make an
announcement is advised by counsel that its failure to do so would
be reasonably likely to constitute a violation of law.
7.10. Access to Properties and Records;
Confidentiality. (a) LCS shall permit Jacksonville and its
representatives reasonable access to its properties, and shall
disclose and make available to them all books, papers and records
relating to the assets, stock ownership, properties, operations,
obligations and liabilities of LCS, including, but not limited to,
all books of account (including the general ledger), tax records,
minute books of meetings of boards of directors (and any committees
thereof) and stockholders, organizational documents, bylaws, material
contracts and agreements, filings with any regulatory authority,
accountants' work papers, litigation files, plans affecting
employees, and any other business activities or prospects in which
LCS may have a reasonable interest. LCS shall make its officers,
employees and agents and authorized representatives (including
counsel and independent public accountants) available to confer with
Jacksonville and its representatives.
(b) All information furnished previously in connection
with the transactions contemplated by this Agreement or pursuant
hereto shall be treated as the sole property of the party furnishing
the information until consummation of the transactions contemplated
hereby and, if such transactions shall not occur, the party receiving
the information shall, upon request, return to the party which
furnished such information all documents or other materials
containing, reflecting or referring to such information, shall use
its best efforts to keep confidential all such information, and shall
not directly or indirectly use such information for any competitive
or other commercial purposes. The obligation to keep such
information confidential shall continue for three years from the date
the proposed transactions are abandoned but shall not apply to (i)
any information which (x) the party receiving the information can
establish by convincing evidence was already in its possession prior
to the disclosure thereof by the party furnishing the information;
(y) was then generally known to the public; or (z) became known to
the public through no fault of the party receiving the information;
or (ii) disclosures pursuant to a legal requirement or in accordance
with an order of a court of competent jurisdiction, provided that the
party which is the subject of any such legal requirement or order
shall use its best efforts to give the other party at least ten
business days prior notice thereof.
7.11. Certain Policies. At the request of
Jacksonville, Litchfield shall, no earlier than five business days
prior to the Effective Time, (i) establish and take such reserves and
accruals as Jacksonville shall reasonably request to conform, on a
mutually satisfactory basis, Litchfield's loan, real estate, accrual
and reserve policies to Jacksonville's policies and (ii) establish
and take such accruals, reserves and charges in order to implement
such policies in respect of severance costs, write-off or write-down
of various assets and other appropriate accounting adjustments, and
to recognize for financial accounting purposes such expenses incurred
in connection with the Merger, provided, however, that Litchfield
shall not be obligated to take any such action pursuant to this
Section 7.11 unless and until (x) Jacksonville specifies its request
in a writing delivered to LCS, and acknowledges that all conditions
to the obligations of Jacksonville to consummate the Merger set forth
in Articles VIII and X have been waived (if available) or satisfied
and (y) LCS acknowledges that the conditions to its obligation to
consummate the Company Merger set forth in Articles IX and X have
been waived (if available) or satisfied. LCS shall not be required
to take any such action that is not consistent with generally
accepted accounting principles, as determined by LCS' independent
auditors, or any requirement applicable to LCS or Litchfield by any
bank holding company, or bank regulatory agency. The
representations, warranties and covenants of LCS contained in this
Agreement shall not be deemed to be untrue or breached in any respect
for any purpose as a consequence of any action undertaken on account
of Section 7.11 and shall not constitute grounds for termination of
the Agreement by Jacksonville.
ARTICLE VIII.
CONDITIONS TO THE OBLIGATIONS OF JACKSONVILLE
The obligations of Jacksonville under this Agreement to
cause the transactions contemplated herein to be consummated shall
be subject to the satisfaction or written waiver by Jacksonville of
the following conditions:
8.1. No Material Adverse Effect. Except as disclosed in
Schedule 4.5 to the LCS Disclosure Schedule and except for general
changes in market interest rates, and the transactions contemplated
thereby, costs and expenses relating to this Agreement and the
transactions contemplated hereby, there shall not have been any
Material Adverse Effect, or discovery of a condition or the
occurrence of any event that has or is likely to result in a Material
Adverse Effect on LCS from December 31, 1995 to the Closing Date;
provided, however, that there shall not have occurred a Material
Adverse Effect for purposes of this Section 8.1 if such action that
would have given rise to a Material Adverse Effect was taken by LCS
at the request of Jacksonville pursuant to Section 7.11 of this
Agreement. Any regulatory changes affecting LCS or Jacksonville
including all BIF/SAIF premium changes and assessments, shall not be
deemed a Material Adverse Effect.
8.2. Representations and Warranties. Each of the
representations and warranties by LCS contained in this Agreement
shall be true and correct in all material respects (or where any
statement in a representation or warranty expressly contains a
standard of materiality, such statement shall be true and correct in
all respects taking into consideration the standard of materiality
contained therein) at, or as of, the date of this Agreement and
(except to the extent such representation speaks as of an earlier
date) and as of any date subsequent, until and including the Closing
Date (except as otherwise contemplated or permitted by this
Agreement) as though such representations and warranties were made
on and as of said date. Any information provided by LCS pursuant to
Section 6.5 hereof as a supplement to the LCS Schedule shall be true
and correct in all material respects as of the date such information
is supplied to Jacksonville.
8.3. Performance and Compliance. LCS shall have performed
or complied in all material respects with all covenants and
agreements required by the Agreements to be performed and satisfied
by it on or prior to the Closing Date.
8.4. No Proceeding or Litigation. On the Closing Date, no
suit, action or proceeding shall be pending or overtly threatened,
and no liability or claim shall have been asserted against LCS
involving any of the assets, properties, business or operations of
LCS that would reasonably be expected to have a Material Adverse
Effect.
8.5. Consents Under Agreements. Jacksonville shall have
received the consent or approval of each person whose consent or
approval shall be required in order to permit consummation of the
Merger under any loan or credit agreement, note, mortgage, indenture,
lease or other agreement or instrument to which LCS is a party or to
which its respective property is subject, except those for which
failure to obtain such consents and approvals would not, individually
or in the aggregate, have a Material Adverse Effect on LCS on a
consolidated basis, whether prior to (if applicable) or following the
consummation of the transactions contemplated hereby.
8.6. No Amendments to Resolutions. Neither the Board of
Directors of LCS nor any committee thereof shall have amended,
modified, rescinded or repealed the resolutions adopted by such Board
of Directors with respect to the Agreement or shall have adopted any
other resolutions in connection with the Agreement and the
transactions contemplated hereby which are inconsistent with such
resolutions, except resolutions adopted consistent with the express
rights of LCS under the Agreement.
8.7. Certificate of LCS Officers. LCS shall have furnished
Jacksonville a certificate, signed by its Chief Executive Officer and
its Chief Financial Officer, dated the Closing Date, to the effect,
based on his knowledge, that the conditions described in Sections
8.1, 8.2, 8.3, 8.4, 8.5, 8.6 and 8.8 of this Agreement have been
fully satisfied.
8.8. Corporate Proceedings. All action required to be
taken by, or on the part of Litchfield to authorize the execution,
delivery and performance of this Agreement and the consummation of
the transactions contemplated by this Agreement shall have been duly
and validly taken by LCS.
8.9. Legal Opinion. Jacksonville shall have received an
opinion, dated the Closing Date from Kemp, Grzelakowski and
Lorenzini, Ltd., counsel to LCS, substantially in the form attached
hereto as Exhibit D.
ARTICLE IX.
CONDITIONS TO THE OBLIGATIONS OF LCS
The obligations of LCS under this Agreement to cause the
transactions contemplated herein to be consummated shall be subject
to the satisfaction or written waiver by LCS of the following
conditions:
9.1. Representations and Warranties. Each of the
representations and warranties of Jacksonville contained in this
Agreement shall be true and correct in all material respects (or
where any statement in a representation or warranty expressly
contains a standard of materiality, such statement shall be true and
correct in all respects taking into consideration the standard of
materiality contained therein) at, or as of, the date of this
Agreement and (except to the extent such representation speaks as of
an earlier date) and as of any date subsequent, until and including
the Closing Date (except as otherwise contemplated or permitted by
this Agreement) as though such representations were made on and as
of said date. Any information provided by Jacksonville pursuant to
Section 5.7 hereof as a supplement to the Jacksonville Disclosure
Schedule shall be true and correct in all material respects as of the
date such information is supplied to LCS.
9.2. Performance and Compliance. Jacksonville shall have
performed or complied in all material respects with all covenants and
agreements required by this Agreement to be performed and satisfied
by it on or prior to the Closing Date.
9.3. Corporate Proceedings. All action required to be
taken by, or on the part of Jacksonville to authorize the execution,
delivery and performance of this Agreement and the consummation of
the transactions contemplated by this Agreement shall have been duly
and validly taken by Jacksonville.
9.4. Certificate of Jacksonville Officers. Jacksonville
shall have furnished to LCS a certificate, signed by its Chief
Executive Officer and its Chief Financial Officer and dated the
Closing Date, to the effect, based on their best knowledge, that the
conditions described in Sections 9.1, 9.2 and 9.3 of this Agreement
have been satisfied.
9.5. Legal Opinion. LCS shall have received the opinion of
Luse Lehman Gorman Pomerenk & Schick, P.C. in substantially the form
attached hereto as Exhibit E.
9.6. Fairness Opinion. LCS shall have received from RP
Financial LC, an opinion dated as of the immediately prior to the
date of the Proxy Statement, and a supplemental opinion dated as of
the Closing Date, to the Effect that the Purchase Price is fair from
a financial point of view to shareholders of LCS.
ARTICLE X
CONDITIONS TO THE OBLIGATIONS OF ALL PARTIES
In addition to the provisions of Articles VIII and IX
hereof, the obligations of Jacksonville and LCS to cause the
transactions contemplated herein to be consummated, shall be subject
to the satisfaction or written waiver by Jacksonville and LCS of the
following conditions:
10.1. Governmental Approvals. The parties hereto shall
have received all necessary approvals or waivers of the transactions
contemplated by the Agreement from governmental agencies and
authorities, including, without limitation, those of the
Commissioner, the FRB, the FDIC and, if necessary, the DOJ, and each
of such approvals shall remain in full force and effect and all
statutory waiting periods in connection therewith shall have expired
at the Closing Date and such approvals and the transactions
contemplated thereby shall not have been contested by any federal or
state governmental authority nor by any other third party by formal
proceeding. Provided, however, that no approval or consent referred
to in this Section 10.1 shall be deemed to have been received by
Jacksonville if it shall include any term, condition or requirement
that, individually or in the aggregate, (i) would result in a
Material Adverse Effect on the results, business, operations,
assets, or financial condition of Jacksonville on a consolidated
basis, or (ii) would reduce the economic or business benefits of the
transactions contemplated by this Agreement to Jacksonville in so
material a manner that Jacksonville, in its reasonable judgment,
would not have entered into this Agreement. Jacksonville shall
notify LCS in writing of its intention to terminate this Agreement
pursuant to Section 11.1(b) hereof as a result of the receipt by
Jacksonville of any such term, condition or requirement within five
business days of the written receipt of such term, condition or
requirement, or the condition set forth in the second sentence of
this Section 10.1 shall be deemed waived by Jacksonville.
10.2. No Injunctions or Restraints. No suit, action
or proceeding shall be pending or overtly threatened before any court
or other governmental agency by the federal or any state government
in which it is sought to restrain or prohibit the consummation of the
Company Merger or Merger and no temporary restraining order,
preliminary or permanent injunction or other order issued by any
court of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Company Merger or
Merger shall be in effect.
10.3. LCS and Jacksonville Shareholder Approval. This
Agreement shall have been duly approved by the requisite affirmative
vote of the shareholders of LCS and Jacksonville as contemplated by
Section 7.1 and Section 7.3 hereof.
10.4 Corporate Proceedings. The obligations of the parties
to this Agreement required to be performed at or prior to the Closing
Date shall have been duly performed and complied with in all material
respects. All action required to be taken by, or on the part of, the
parties to this Agreement to authorize the execution, delivery and
performance of this Agreement, and the consummation of the
transactions contemplated hereby, shall have been duly and validly
taken by the parties hereto.
ARTICLE XI.
TERMINATION
11.1. Reasons for Termination. This Agreement may be
terminated and the Company Merger abandoned at any time before the
Closing Date, whether before or after the approval or adoption of the
Agreement by the shareholders of LCS and Jacksonville.
(a) By mutual written consent of the Board of Directors
of Jacksonville and the Board of Directors of LCS;
(b) By written notice from Jacksonville to LCS if:
(i) any condition set forth in Article VIII of this
Agreement shall have become impossible to substantially satisfy at
any time or prior to or at the Closing has not been substantially
satisfied or waived in writing prior to the Closing; or
(ii) any condition set forth in Article X of this
Agreement shall have become impossible to substantially satisfy at
any time or prior to or at the Closing has not been substantially
satisfied or waived in writing, provided, however, Jacksonville shall
not have the right to terminate this Agreement pursuant to this
Section 11.1(b)(ii) if any condition imposed by Section 10.1 hereof
was not met due to the failure of Jacksonville to perform or observe
the covenants and agreements set forth in this Agreement; or
(iii) any warranty or representation as set forth
in Article IV hereof made by LCS shall be discovered to be or to have
become untrue or incorrect in any material respect, or where any
statement in a representation or warranty expressly includes a
standard of materiality, such statement shall be discovered to be or
to have become untrue or incorrect in any respect taking into
consideration the standard of materiality contained therein, in
either case where any such breach has not been cured within thirty
(30) days following receipt by LCS of written notice of such
discovery;
(iv) LCS shall have breached one or more provisions
of the Agreement in any material respect considering all such
breaches in the aggregate, where such breach has not been cured
within thirty (30) days following receipt by LCS of written notice
of such breach; or
(v) the LCS Disclosure Schedule prepared in
accordance with Article IV of this Agreement, and which is received
by Jacksonville subsequent to the date of this Agreement, discloses
information which, either individually or in the aggregate, would
have a Material Adverse Effect on LCS as determined by Jacksonville
in its sole discretion; provided that Jacksonville exercises its
right to terminate this Agreement within ten days after receipt of
such Disclosure Schedule.
(c) By written notice from LCS to Jacksonville, which has
been approved by the Board of Directors of LCS, if
(i) any condition set forth in Article IX of this
Agreement has not been substantially satisfied or waived in writing;
or
(ii) any condition set forth in Article X of this
Agreement has not been substantially satisfied or waived in writing;
provided, however, LCS shall not have the right to terminate this
Agreement pursuant to this Section 11.1(c)(ii) if any condition
imposed by Section 10.1 hereof was not met due to the failure of LCS
to perform or observe the covenants and agreements set forth in this
Agreement; or
(iii) any warranty or representation as set forth
in Article III hereof made by Jacksonville shall be discovered to be
or to have become untrue or incorrect in any material respect, or
where any statement in a representation or warranty expressly
includes a standard of materiality, such statement shall be
discovered to be or to have become untrue or incorrect in any respect
taking into consideration the standard of materiality contained
therein, in either case where any such breach has not been cured
within thirty (30) days following receipt by Jacksonville of written
notice of such discovery; or
(iv) Jacksonville shall have breached one or more
provisions of the Agreement in any material respect considering all
such breaches in the aggregate, where such breach has not been cured
within thirty (30) days following receipt by Jacksonville of written
notice of such breach.
(d) By the Board of Directors of Jacksonville or LCS at
any time after the LCS Shareholders' Meeting or Jacksonville
Shareholders Meeting as contemplated in Section 7.1 and Section 7.3,
respectively, if the shareholders of LCS or Jacksonville have not
approved this Agreement by the requisite affirmative vote.
(e) By the Board of Directors of Jacksonville or LCS if
the Company Merger has not been consummated on or before June 30,
1997.
11.2. Effect of Termination. In the event of
termination of this Agreement by either LCS or Jacksonville as
provided in Section 11.1, this Agreement shall forthwith become void,
and there shall be no liability or obligation on the part of
Jacksonville or LCS or their respective officers or directors except
with respect to Sections 5.6, 5.8, 6.6, 7.9 and 12.2 hereof.
ARTICLE XII.
MISCELLANEOUS
12.1. Nonsurvival of Representations, Warranties and
Agreements. None of the representations, warranties, covenants and
agreements in this Agreement or in any instrument delivered pursuant
to this Agreement shall survive the Effective Time, except for the
covenants and agreements which by their terms are contemplated to be
performed after the Effective Time.
12.2. Expenses. (a) Except as otherwise provided
herein, all expenses incurred by Jacksonville and LCS in connection
with or related to the authorization, preparation and execution of
the Agreement, the solicitation of shareholder approvals and all
other matters related to the closing of the transactions contemplated
thereby, including, without limitation of the generality of the
foregoing, all fees and expenses of agents, representatives, counsel
and accountants employed by either such party or its Affiliates,
shall be borne solely and entirely by the party that has incurred the
same.
(b) LCS also hereby agrees to pay Jacksonville and
Jacksonville shall be entitled to payment of, a fee (the "Fee") equal
to $200,000, upon the occurrence of any of the following events on
or before June 30, 1997: (i) if LCS' Board recommends a Proposal
other than this Agreement; or (ii) if LCS' Board withdraws, or
modifies its recommendation of approval of this Agreement, after a
Different Proposal is made; or (iii) if LCS' shareholders do not
approve the Agreement after a Different Proposal is made; or (iv) if
LCS enters into an agreement to be acquired by any other party. Such
payment shall be made to Jacksonville in immediately available funds
within five business days after the occurrence of an event set forth
above .
(c) Jacksonville hereby agrees to pay LCS, and LCS shall
be entitled to payment of a fee equal to $200,000, upon the
occurrence of any of the following events on or before June 30, 1997:
(i) if Jacksonville's Board does not recommend that stockholders
approve the Agreement, (ii) if Jacksonville enters into an agreement
with another party and as a result refuses to consummate the
transactions set forth herein.
(d) Jacksonville agrees that as of the Closing Date, it
shall assume and pay the unpaid reasonable expenses of LCS accrued
in connection with the Company Merger. In addition, at the Closing
Date, Jacksonville shall continue to provide and maintain directors
and officers of LCS with liability coverage under the Jacksonville
Directors' and Officers' liability policy and to pay any deductible
required to be paid under the Jacksonville D&O liability policy.
12.3. Waivers: Amendments. At any time prior to the
Closing Date, Jacksonville, by action taken by its Board of
Directors, or any committee or officers thereunto authorized, or LCS,
by action taken by its Board of Directors, or any committee or
officers thereunto authorized, may waive the performance of any of
the obligations of the other or waive compliance by the other with
any of the covenants or conditions contained in the Agreement or
agree to the amendment or modification of the Agreement by an
agreement in writing executed in the same manner as the Agreement;
provided, however, that after the favorable vote by the shareholders
of LCS pursuant to Section 7.1 of this Agreement any such action
shall be taken only if, in the opinion of LCS' or Jacksonville's
Board of Directors, such waiver, amendment or modification will not
have a Material Adverse Effect on the benefits intended under the
Agreement for the shareholders of LCS or Jacksonville and will not
require resolicitation of any proxies from such shareholders.
12.4. Assignment: Parties in Interest. The Agreement
shall be binding upon and inure solely to the benefit of the parties
hereto and their respective successors and assigns, but shall not be
assigned by the parties hereto, by operation of law or otherwise.
Nothing in the Agreement, express or implied, is intended to confer
upon any third party any rights or remedies of any nature whatsoever
under or by reason of the Agreement.
12.5. Entire Agreement. This Agreement supersedes any
other agreement, whether written or oral, that may have been made or
entered into by LCS or Jacksonville or by any officer or officers of
such parties relating to the acquisition of the business or the
capital stock of LCS by Jacksonville. The aforementioned agreements
constitute the entire agreement by the respective parties, and there
are no agreements or commitments except as set forth herein and
therein.
12.6. Captions and Counterparts. The captions in this
Agreement are for convenience only and shall not be considered a part
of or affect the construction or interpretation of any provision of
this Agreement. This Agreement may be executed in several
counterparts, each of which shall constitute one and the same
instrument.
12.7. Certain Definitions. For purposes of this
Agreement, the term:
(a) "Affiliate" means a person that directly or
indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, another person.
(b) "Material Adverse Effect" shall mean any material
adverse change in or material adverse effect on the business,
operations, assets, or financial condition of the parties to this
Agreement.
(c) "LCS Reports" shall mean all reports, registrations
and statements, together with any amendments required to be made with
respect thereto, that were and are required to be filed with the
Commissioner, the SEC, the FDIC, and any other applicable state
securities or savings institution authorities.
(d) "to the knowledge of Jacksonville" or "to the best
knowledge of Jacksonville" shall mean the actual knowledge of any
member of the Board of Directors or of any senior officer of
Jacksonville.
(e) "to the knowledge of LCS" or "to the best knowledge
of LCS" shall mean the actual knowledge of any member of the Board
of Directors or of any senior officer of LCS.
12.8. Enforcement of the Agreement. The parties hereto
agree that irreparable damage would occur in the event that any of
the provisions of the Agreement were not performed in accordance with
their specific terms or were otherwise breached. It is accordingly
agreed that the parties hereto will be entitled to an injunction or
injunctions to prevent breaches of the 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.
12.9. Governing Law. The Agreement shall be construed
and interpreted in accordance with the laws of the State of Illinois,
except to the effect that Federal Law applies or the laws of the
State of Delaware to the extent that the rights of dissenting
stockholders of LCS are asserted, without regard to the conflicts of
laws rules.
12.10. Notices. All notices given hereunder shall be in
writing and shall be mailed by first class mail, postage prepaid, or
sent by facsimile transmission or by nationally recognized overnight
delivery service, addressed as follows:
(a) If to Jacksonville, to:
Jacksonville Savings Bank
1211 West Morton
Jacksonville, Illinois 62650
Attention: Andrew F. Applebee, Chairman
of the Board and Chief Executive Officer
Facsimile No. (217) 245-2010
With A Copy To:
Luse Lehman Gorman Pomerenk & Schick, P.C.
5335 Wisconsin Avenue, N.W.
Suite 400
Washington, D.C. 20015
Attention: Alan Schick, Esq.
Facsimile No. (202) 362-2902
(b) If to LCS to:
LCS Bancorp, Inc.
501 North State Street
Litchfield, Illinois
Attention: Carol Radtke, President and
Chief Executive Officer
Facsimile No. (217) 324-2582
with a copy to:
Kemp, Grzelakowski & Lorenzini, Ltd.
1900 Spring Road
Suite 500
Oak Brook, Illinois 60521-1495
Attention: James J. Kemp, Esq.
Facsimile No. (630) 571-7755
PAGE
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
ATTEST: JACKSONVILLE SAVINGS BANK
By: /s/ Roger McKinney, By: /s/ Andrew F. Applebee
Roger McKinney, Secretary Andrew F. Applebee, Chairman of
the Board and Chief Executive
Officer
ATTEST: LCS BANCORP, INC.
By: /s/ Rhonda Reener By: /s/ Carol Radtke
Rhonda Reener, Secretary Carol Radtke, President and
Chief Executive Officer
ATTEST: LITCHFIELD COMMUNITY SAVINGS, S.B.
By: /s/ Sandra Keith By: /s/ Carol Ratke
Sandra Keith, Secretary Carol Radtke, President and
Chief Executive Officer
<PAGE>
<PAGE>
EXHIBIT A
AGREEMENT OF COMPANY MERGER
AGREEMENT OF COMPANY MERGER, dated as of _, 1996, by and among
Jacksonville Savings Bank ("Jacksonville"), an Illinois-chartered
savings bank, Jacksonville Acquisition Corp. ("Interim"), an Illinois
corporation formed by Jacksonville solely to facilitate the
transactions contemplated by the Reorganization Agreement, defined
below, and LCS Bancorp, Inc. ("Company"), a Delaware corporation.
Interim and the Company are hereinafter sometimes collectively
referred to as the "Merging Corporations".
This Agreement of Company Merger is being entered into pursuant to
an Agreement and Plan of Merger, dated as of August 13, 1996 (the
"Merger Agreement") by and among Jacksonville and the Company and
Litchfield Community Savings, S.B., the Company's wholly owned
subsidiary.
In consideration of the premises, and the mutual covenants and
agreements contained herein and in the Merger Agreement, the parties
hereto agree as follows:
ARTICLE I
DEFINITIONS
Except as otherwise provided herein, the capitalized terms set
forth below shall have the following meanings:
1.1 "Effective Time" shall mean the date at which the Merger
contemplated by this Agreement of Merger becomes effective as
provided in Section 2.2 hereof.
1.2 "Interim Common Stock" shall mean the common stock, par
value $.01 per share, of Interim owned by Jacksonville.
1.3 "Company Common Stock" shall mean the common stock par
value $.01 per share, of the Company.
1.4 The "Merger" shall refer to the merger of Interim with and
into the Company as provided in Section 2.1 of this Agreement of
Company Merger.
1.5 "Stockholder Meeting" shall mean the meeting of the
stockholders of the Company held pursuant to Section 7.1, and the
meeting of stockholders of Jacksonville held pursuant to Section 7.3
of the Merger Agreement, respectively.
1.6 "Surviving Corporation" shall refer to the Company as the
surviving corporation of the Merger.
ARTICLE II
TERMS OF THE MERGER
2.1 The Merger. Subject to the terms and conditions set forth
in the Merger Agreement, on the Effective Time, Interim shall be
merged with and into the Company pursuant and subject to Section 251
of the General Corporation Law of the State of Delaware ( "DGCL").
The Company shall be the Surviving Corporation of the Merger and
shall continue to be governed by the laws of the State of Delaware.
On the Effective Time, the Surviving Corporation shall be considered
the same business and corporate entity as each of the Merging
Corporations and thereupon and thereafter, all the property, rights,
powers, and franchises of a public as well as a private nature of
each of the Merging Corporations shall vest in the Surviving
Corporation and the Surviving Corporation shall be subject to and be
deemed to have assumed all of the debts, liabilities, obligations and
duties of each of the Merging Corporations and shall have succeeded
to all of each of their relationships, fiduciary or otherwise, as
fully and to the same extent as if such property, right, privileges,
powers, franchises, debts, obligations, duties and relationships had
been originally acquired, incurred or entered into by the Surviving
Corporation. In addition, any reference to either of the Merging
Corporations in any contract, will or document, whether executed or
taking effect before or after the Effective Time, shall be considered
a reference to the Surviving Corporation if not inconsistent with the
other provisions of the contract, will or document; and any pending
action or other judicial proceeding to which either of the Merging
Corporations is a party, shall not be deemed to have abated or to
have discontinued by reason of the Merger, but may be prosecuted to
final judgment, order or decree in the same manner as if the Merger
had not been made; or the Surviving Corporation may be substituted
as a party to such action or proceeding, and any judgment, order or
decree may be rendered for or against it that might have been
rendered for or against either of the Merging Corporations if the
Merger had not occurred.
2.2 Effective Time. The Merger shall become effective on the
date and at the time that a Certificate of Merger pursuant to Section
251 of the DGCL is executed and filed with the Secretary of State of
the State of Delaware pursuant to Section 103 of the DGCL, unless a
later date and time is specified as the Effective Time in the
Certificate of Merger.
2.3 Name of the Surviving Corporation. The name of the
Surviving Corporation shall be "LCS Bancorp, Inc."
2.4 Certificate of Incorporation. The Certificate of
Incorporation of the Company as in effect on the Effective Time,
shall continue in full force and effect following the Effective Time
as the Certificate of Incorporation of the Surviving Corporation.
2.5 Bylaws. The Bylaws of the Company, as in effect on the
Effective Time, shall continue in full force and effect as the Bylaws
of the Surviving Corporation until amended in accordance with
applicable law.
2.6 Directors and Officers of the Surviving Corporation. The
directors and officers of Interim shall become the directors and
officers of the Surviving Corporation as of the Effective Time, each
to hold office in accordance with the Certificate of Incorporation
and Bylaws of the Surviving Corporation until changed in accordance
therewith.
ARTICLE III
CONVERSION OF SHARES
3.1 Conversion of The Company Common Stock and Options to
Purchase Common Stock.
(a) At the Effective Time, each share of Company Common Stock,
issued and outstanding immediately prior to the Effective Time (other
than Dissenting Shares as hereinafter defined) shall, by virtue of
the Merger and without any action on the part of the holder thereof,
be converted into the right to receive $17.75 in cash (such amount
hereinafter referred to as the "Purchase Price").
(b) At or immediately prior to the Effective Time, each
outstanding option to purchase Company Common Stock issued pursuant
to the Company's Stock Option Plans shall be canceled, and each
holder of any such option, whether or not then vested or exercisable,
shall be entitled to receive from Jacksonville at the Effective Time
for each option an amount determined by multiplying (i) the excess,
if any, of the Purchase Price over the applicable exercise price per
share of such option by (ii) the number of shares of Company Common
Stock subject to such option.
3.2 Exchange of Shares.
(a) Immediately following the Effective Time and the
consummation of the transaction provided for in the Plan of Complete
Liquidation and Dissolution included as Exhibit C to the Merger
Agreement, Jacksonville shall make available in its role as exchange
agent ("Exchange Agent") cash in an amount equal to the aggregate
Purchase Price.
(b) As soon as practicable after the Effective Time, the
Exchange Agent will send to each holder of record of a certificate
or certificates (other than holders of Dissenting Shares) which,
immediately prior to the Effective Time represented outstanding
shares of Company Common Stock ("Certificates"), a letter of
transmittal for use in exchanging such Certificates for the Purchase
Price. The letter of transmittal shall specify that delivery shall
be effected, and risk of loss and title to the Certificates shall
pass, only upon delivery of the Certificates to the Exchange Agent.
Upon surrender of a Certificate for exchange and cancellation to the
Exchange Agent, together with such letter of transmittal, duly
executed, the holder of such Certificate shall be entitled to
promptly receive in exchange therefor the Purchase Price as provided
in Section 3.1 hereof and the Certificates so surrendered shall be
canceled. The Exchange Agent shall not be obligated to deliver or
cause to be delivered to any holder of Company Common Stock the
Purchase Price to which such holder of Company Common Stock would
otherwise be entitled until such holder surrenders the Certificate
for exchange or, in default thereof, an appropriate Affidavit of Loss
and Indemnity Agreement and/or a bond as may be required in each case
by the Surviving Corporation. Neither the Exchange Agent nor any
party hereto shall be liable to any holder of Certificates for any
amount paid to a public official pursuant to any applicable abandoned
property, escheat or similar law. Except as required by law, no
interest shall be payable with respect to the Purchase Price payable
for the outstanding shares of Company Common Stock
(c) After the Effective Time, there shall be no transfers on
the stock transfer books of the Company of the shares of Company
Common Stock which were outstanding immediately prior to the
Effective Time and, if any Certificates representing such shares are
presented for transfer to the Company, they shall be canceled and
exchanged for the Purchase Price provided for in Section 3.1 hereof.
(d) If payment of the Purchase Price pursuant to Section 3.1
hereof for shares of Company Common Stock is to be made in a name
other than that in which the Certificate surrendered in exchange
therefor is registered, it shall be a condition of such payment that
the Certificate so surrendered shall be properly endorsed (or
accompanied by an appropriate instrument of transfer) and otherwise
in proper form for transfer, and that the person requesting such
payment shall pay to the Exchange Agent in advance any transfer or
other taxes required by reason of the payment to a person other than
that of the registered holder of the Certificate surrendered or
required for any other reason or shall establish to the satisfaction
of the Exchange Agent that such tax has been paid or is not payable.
3.3 Dissenting Shares. Each share of Company Common Stock
issued and outstanding immediately prior to the Effective Time, the
holder of which has not voted in favor of the Merger Agreement and
this Agreement of Company Merger and who has properly perfected his
dissenters' rights of appraisal by satisfying all of the applicable
requirements of Section 262 of the DGCL, is referred to herein as a
"Dissenting Share." Dissenting Shares owned by each holder thereof
who has not exchanged his Certificates for the Purchase Price or
otherwise has not effectively withdrawn or lost his dissenter's
rights, shall not be converted into or represent the right to receive
the Purchase Price pursuant to Section 3.1 hereof and shall be
entitled only to such rights as are available to such holder pursuant
to the applicable provisions of the DGCL. Each holder of Dissenting
Shares shall be entitled to receive the value of such Dissenting
Shares held by him in accordance with the applicable provisions of
the DGCL, provided such holder complies with the procedures
contemplated by and set forth in the applicable provisions of the
DGCL. If any holder of Dissenting Shares shall have failed to perfect
or shall have effectively withdrawn or lost his dissenter's rights
under the applicable provisions of the DGCL, such Dissenting Shares
shall be converted into the right to receive the Purchase Price at
the Effective Time in accordance with the provisions of Section 3.1
hereof. Jacksonville agrees to make, or cause to he made, payment in
cash for any Dissenting Shares.
3.4 Interim Common Stock. Each share of Interim Common Stock
which is issued and outstanding immediately prior to the Effective
Time shall be converted automatically and without any action on the
part of the holder thereof into an issued and outstanding share of
Common Stock of the Surviving Corporation.
ARTICLE IV
MISCELLANEOUS
4.1 Conditions Precedent. The respective obligations of each
party under this Plan of Company Merger shall be subject to the
satisfaction, or waiver by the party permitted to do so, of the
conditions set forth in Articles V and VI of the Merger Agreement.
4.2 Stockholder Approval. By executing this Agreement of
Company Merger, Jacksonville shall be deemed to have approved this
Agreement of Company Merger in its capacity as sole stockholder of
Interim.
4.3 Termination. This Agreement of Company Merger shall be
terminated upon the termination of the Merger Agreement in accordance
with Article XI thereof; provided, that any such termination of this
Agreement of Company Merger shall not relieve any party hereto from
liability on account of a breach by such party of any of the terms
hereof or thereof.
4.4 Amendments. To the extent permitted by law, this Agreement
of Merger may be amended by a subsequent writing signed by all of the
parties hereto upon the approval of the Board of Directors of each
of the parties hereto; provided, however, that the provisions of
Article III of this Agreement of Company Merger relating to the
consideration to be paid for the shares of Company Common Stock shall
not be amended after the approval of the stockholders of the Company
referred to in Section 7.1 of stockholders of Jacksonville referred
to in Section 7.3 of the Merger Agreement so as to decrease the
amount or change the form of such consideration without the approval
of the stockholders of the Company.
4.5 Successors. This Agreement of Company Merger shall be
binding on the successors of Jacksonville, Interim and the Company.
<PAGE>
IN WITNESS WHEREOF, Jacksonville, Interim and the Company have
caused this Agreement of Company Merger to be executed by their duly
authorized officers and their corporate seals to be hereunto affixed
as of the date first above written.
Attest: JACKSONVILLE SAVINGS BANK
By: By:
Roger McKinney, Secretary Andrew F. Applebee, Chairman of
the Board and Chief Executive
Officer
ATTEST: JACKSONVILLE ACQUISITION CORP.
By: By:
Roger McKinney, Secretary Andrew F. Applebee, Chairman of
the Board and Chief Executive
Officer
ATTEST: LCS BANCORP, INC.
By: By:
Vice President and Carol Radtke, President and
Secretary Chief Executive Officer
<PAGE>
<PAGE>
PLAN OF MERGER
BETWEEN
JACKSONVILLE SAVINGS BANK
AND
LITCHFIELD COMMUNITY SAVINGS, S.B.
DATED AS OF ___________, 1996
<PAGE>
<PAGE>
This Plan of Merger dated as of _________, 1996 (the "Merger
Plan") is entered into by and among: (i) JACKSONVILLE SAVINGS BANK,
an Illinois savings bank and a wholly owned subsidiary of Financial
("Jacksonville"); and (ii) LITCHFIELD COMMUNITY SAVINGS, S.B.
("Litchfield"), a wholly owned Subsidiary of LCS Bancorp, Inc. which
is wholly owned by Jacksonville, an Illinois savings bank. This
Merger Plan is being entered into in connection with the Agreement
and Plan of Merger by and among Jacksonville Savings Bank and LCS
Bancorp, Inc. and Litchfield Community Savings, S.B. The Merger
Agreement has been approved by at least a majority vote of the Boards
of Directors of Jacksonville and Litchfield. Capitalized terms not
otherwise defined herein shall have the meanings set forth in the
Merger Agreement.
In consideration of the mutual covenants and agreements set
forth herein and subject to the terms and conditions of the Merger
Agreement, the parties hereto agree as follows:
Section 1. Definition. Except as otherwise provided herein, the
capitalized terms set forth below shall have the following meanings:
1.1 "Effective Time" shall mean the date at which the
Merger contemplated by this Merger Plan becomes effective as provided
in Section 2 hereof.
1.2 "Litchfield Common Stock" shall mean the common stock,
par value $1.00 per share, of Litchfield.
1.3 "Merger" shall refer to the merger of Litchfield with
and into Jacksonville as provided in Section 2 of this Merger Plan.
1.4 "Surviving Institution" shall refer to Jacksonville
as the surviving institution of the Merger.
Section 2. The Merger. At the Effective Time, Litchfield will
be merged with and into Jacksonville with Jacksonville as the
Surviving Institution (the "Merger"). The separate corporate
existence of Litchfield shall thereupon cease. Jacksonville as the
Surviving Institution shall continue to be governed by the laws of
the State of Illinois, and its existence with all of its rights,
privileges, immunities, powers and franchises shall continue
unaffected by the Merger.
Section 3. Name of Surviving Institution. The name of the
Surviving Institution shall be Jacksonville Savings Bank.
Section 4. Location of Main Office and Branch Officers. At the
Effective Time, the main office of Jacksonville, and each of its
branches, including Litchfield, shall remain open. The main office
and branch locations of Jacksonville following consummation of the
Merger shall be:
Main Office: Branch Office: Branch Office:
1211 West Morton Avenue 903 South Main 501 North State Street
Jacksonville, IL Jacksonville, IL Litchfield, IL
211 West State Street 100 North Dye
Jacksonville, Illinois Virden, Illinois
Section 5. Assets and Liabilities. At the Effective Time, all
assets and property (real, personal, and mixed, tangible and
intangible, choses in action, rights, and credits), then owned by
Litchfield shall immediately become the property of the Surviving
Institution. The Surviving Institution shall be deemed to be a
continuation of Litchfield, the rights and obligations of which shall
succeed to such rights and obligations and the duties and liabilities
connected therewith.
Section 6. Directors of Surviving Institution. At the Effective
Time, the directors of Jacksonville shall remain as the directors of
the Surviving Institution. The names and addresses, and terms of
such directors are set forth below.
Name Address Term Expires
Andrew F. Applebee 8 Cardinal Drive 1998
Jacksonville, IL 62650
Richard A. Foss 13 Aaron Drive 1997
Jacksonville, IL 62650
Robert S. Bills 1515 Mound 1996
Jacksonville, IL 62650
I. Newton Mitchell 12 Melrose Ct. 1996
Jacksonville, IL 62650
Roger D. Cannell 211 S. Fayette 1997
Jacksonville, IL 62650
Michael R. Goldasich 12 E. Forest Park 1997
Jacksonville, IL 62650
Emily J. Osburn 8 Forest Hill 1998
Jacksonville, IL 62650
Harvey D. Scott III 15 Pitner Place 1998
Jacksonville, IL 62650
Section 7. Articles of Incorporation and Bylaws. At the
Effective Time, the articles of incorporation and bylaws of
Jacksonville shall remain in effect and shall become the articles of
incorporation and bylaws of the Surviving Institution.
Section 8. Counterparts. This Merger Plan may be executed in
one or more counterparts, each of which shall be deemed to be an
original and all of which taken together shall constitute one
instrument.
Section 9. Amendments. This Merger Plan may be amended by the
parties hereto, by or pursuant to action taken by their respective
boards of directors. This Merger Plan may not be amended except by
an instrument in writing specifically referring to this Section 9 and
signed on behalf of each of the parties hereto.
Section 10. Severability. Any provision of this Merger Plan
which is prohibited or unenforceable shall be ineffective to the
extent of such prohibition or unenforceability without invalidating
the remaining provisions hereof.
Section 11. Governing Law. This Merger Plan shall be governed
by, and interpreted in accordance with, the laws of the State of
Illinois, without regard to conflicts of laws principles.
Section 12. Captions and References. The captions contained in
this Merger Plan are for convenience of reference only and do not
form a part of this Merger Plan.
PAGE
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Merger
Plan to be duly executed as of the date first above written.
JACKSONVILLE SAVINGS BANK
By:
Andrew F. Applebee
Chairman of the Board and
Chief Executive Officer
LITCHFIELD COMMUNITY SAVINGS, S.B.
By:
Andrew F. Applebee
Chairman of the Board and
Chief Executive Officer
PAGE
<PAGE>
EXHIBIT C
PLAN OF COMPLETE LIQUIDATION
AND DISSOLUTION OF LCS BANCORP, INC.
This Plan of Complete Liquidation and Dissolution (the "Plan")
shall effect the complete liquidation and dissolution of LCS Bancorp,
Inc. (the "Company"), a Delaware corporation, in accordance with
Section 332 of the Internal Revenue Code of 1986, as amended (the
"Code"), and Section 275 of the General Corporation Law of the State
of Delaware ("DGCL") as soon as possible following the merger of
Jacksonville Savings Bank ("Jacksonville") and Litchfield Community
Savings, S.B. pursuant to an agreement of merger of even date
herewith ("Agreement of Merger").
1. Adoption of Plan. This Plan shall become effective upon its
approval and adoption by Jacksonville, an Illinois-chartered savings
bank, pursuant to Section 275(c) of the DGCL, following (a)
Jacksonville's acquisition of the stock of the Company meeting the
requirements of Section 1504(a)(2) of the Code and its becoming the
sole stockholder of the Company, (b) the consummation of the
Agreement of Merger.
2. Filing of Forms. The officers of Jacksonville are
authorized and directed to execute and file, of cause the Company to
execute and file, a United States Treasury Form 966 pursuant to
Section 6043 of the Code within thirty (30) days after the adoption
of this Plan in accordance with Section 1 hereof and such additional
or other forms and reports with and to the Internal Revenue Serve as
may be necessary, desirable or appropriate in connection with the
implementation of this Plan.
3. Dissolution. Jacksonville shall execute and file a
Certificate of Dissolution for the Company in accordance with Section
275 of the DGCL. After dissolution, the Company shall carry on no
business except for the purpose of winding up its affairs in
accordance with Section 278 of the DGCL.
4. Authorization to Officers. The officers of Jacksonville are
authorized to execute and deliver such agreements, conveyances,
assignments, transfers, certificates and other documents and to take
such other actions as such officers may deem necessary, appropriate
or desirable in order to carry out the provisions of this Plan and
effect a complete liquidation and dissolution of the Company in
accordance with Section 332 of the Code and Section 275 of the DGCL.
* * * * *
Adopted by the duly authorized vote of the Board of Directors
of Jacksonville this ___ day of ____________, 199__.
PAGE
<PAGE>
EXHIBIT D
LEGAL OPINION OF
KEMP, GREZLAKOWSKI & LORENZINI, LTD.
[Matters to be covered in Opinion of Counsel to be delivered to
Jacksonville pursuant to Section 8.9 of the Agreement]
(a) Each of the Company, and the Bank is incorporated, validly
existing and in good standing under the laws of its jurisdiction of
incorporation. Each such entity has the corporate power and authority
to own or lease all of its properties and assets and to carry on its
business as it is now being conducted, and is duly licensed or
qualified to do business and is in good standing in each jurisdiction
in which the nature of the business conducted by it or the character
or location of the properties and assets owned or leased by it makes
such licensing or qualification necessary, except where the failure
to be so licensed, qualified or in good standing would not have a
material adverse effect on the business, operations, assets or
financial condition of the Company and its subsidiaries taken as a
whole. The Bank is a member in good standing of the Federal Home Loan
Bank of Chicago and all eligible accounts of depositors in the Bank
are insured by the FDIC to the fullest extent permitted by law. The
Company is duly registered as a holding company under the Bank
Holding Company Act.
(b) The authorized capital stock of the Company is as set forth
at Section 4.2 of the Agreement.
(c) Each of the Company and the Bank have the corporate power
and authority to execute and deliver the Agreement and the Agreement
of Company Merger included as Exhibit A thereto, and to consummate
the Merger and to carry out all of their respective obligations
thereunder. The execution and delivery of the Agreement and the
Agreement of Company Merger included as Exhibit A thereto and the
consummation of the transactions contemplated by the Agreement by the
Company and the Bank have been duly authorized by the boards of
directors and stockholders of each of the Company and the Bank and
no other corporate proceedings on the part of the Company or the Bank
are necessary to consummate the transactions so contemplated. Each
of the Agreement and the Agreement of Company Merger included as
Exhibit A thereto have been duly and validly executed and delivered
by the Company and the Bank, as applicable, and constitute valid and
legally binding obligations of the Company and the Bank enforceable
in accordance with their terms, except as may be limited by
bankruptcy, insolvency, moratorium or other similar laws affecting
creditors' rights and except as may be limited by the exercise of
judicial discretion in applying principles of equity.
(d) None of the execution and delivery of the Agreement and the
Agreement of Company Merger included as Exhibit A thereto by the
Company and the Bank, as applicable, nor the consummation by the
Company and the Bank of the transactions contemplated thereby in
accordance with their respective terms, as applicable, nor compliance
by the Company or the Bank with any of their respective terms, as
applicable, will (i) violate any provision of the Company's or the
Bank's certificate of incorporation, articles of incorporation or
other chartering instrument or bylaws, (ii) violate any federal
statute, code, rule or regulation, or, to the knowledge of such
counsel, any judgment, order, writ, decree or injunction applicable
to the Company or the Bank, or any of their respective properties or
assets, or (iii) to the knowledge of such counsel, violate, conflict
with, result in a breach of any provisions of, constitute a default
under (or an event which, with notice or lapse of time, or both,
would constitute a default under), result in the termination of,
accelerate the performance required by, or result in the creation of
any lien, security interest, charge or other encumbrance upon any of
the respective properties or assets of the Company or the Bank, under
the terms, conditions or provisions of any note, bond, mortgage,
indenture, deed of trust, license, lease, agreement or other
instrument or obligation to which the Company or the Bank, is a
party, or by which they or any of their respective properties or
assets may be hound or affected, except, with respect to clauses (ii)
and (iii) above, such as individually or in the aggregate will not
have a material adverse effect on the business, operations, assets
or financial condition of the Company and its subsidiaries taken as
a whole and which will not prevent or delay the consummation of the
transactions contemplated by the Agreement.
(e) The provisions of Article XIV of the Company's Certificate
of Incorporation are not applicable to the Reorganization.
(f) All regulatory or governmental approvals and consents which
are necessary to be obtained by the Company and the Bank to permit
the execution, delivery and performance of the Agreement and the
Agreement of Company Merger included as Exhibit A thereto have been
obtained.
(g) The Agreement, including consummation of the transactions
contemplated thereby, has been approved by the requisite vote of
stockholders of the Company.
(h) To the knowledge of such counsel, all consents of non-
governmental third parties which are necessary to be obtained by the
Company and the Bank pursuant to contractual provisions by which
either of them is bound to permit the execution, delivery and
performance of the Agreement and the Agreement of Company Merger
included as Exhibit A thereto have been obtained.
(i) Assuming due authorization of the Merger by all necessary
corporate and governmental proceedings on the part of parties other
than the Company and the Bank and that such other parties have taken
all action required to be taken by them prior to the Effective Time,
upon the proper filing of a [Certificate of Merger pursuant to
Sections 103 and 251 of the DGCL,] the Merger will be validly
consummated in accordance with the Agreement and applicable laws and
regulations and each outstanding share of Common Stock and each
outstanding option to purchase such stock granted pursuant to the
Company's Stock Option Plans will be converted into the right to
receive a cash payment in the manner specified in the Agreement of
Company Merger included as Exhibit A to the Agreement.
(j) To the knowledge of such counsel, there are no judicial,
administrative, arbitral or other actions, suits, proceedings or
investigations pending or threatened, which (i) if adversely
determined, would result in any material adverse change in the
business, operations, assets or financial condition of the Company
and its subsidiaries taken as a whole or (ii) seek to restrain or
prohibit the transactions completed by the Agreement or monetary
damages in connection therewith.
Such counsel also shall state that it has no reason to believe
that the information relating to the Company, the subsidiaries of the
Company and the transactions contemplated by the Agreement contained
in the proxy statement used to solicit the approval of the
stockholders of the Company of the Agreement and the Merger and any
other required approval of the transactions contemplated by the
Agreement, as of the date of such proxy statement and up to and
including the meeting of stockholders in connection with which such
documents were used, contained any untrue statement of a material
fact or omitted to state a material fact necessary to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
In rendering their opinion, such counsel may rely, to the extent
such counsel deems such reliance necessary or appropriate, upon
certificates of governmental officials and, as to matters of fact,
certificates of any officer or officers of the Company and its
subsidiaries. The opinion of such counsel may include such
qualifications and explanations of the basis thereof as may be
reasonably acceptable to Jacksonville.
<PAGE>
EXHIBIT E
LEGAL OPINION OF
LUSE LEHMAN GORMAN POMERENK & SCHICK, P.C.
[Matters to be covered in Opinion of Counsel to be delivered to LCS
Bancorp, Inc. Pursuant to Section 9.5 of the Agreement]
(a) Jacksonville is a savings bank duly organized, validly
existing and in good standing under the laws of the State of
Illinois;
(b) Jacksonville has the corporate power and authority to carry
on its business as now conducted, to own, lease and operate its
properties and to consummate the transactions contemplated by the
Agreement;
(c) The Agreement has been duly authorized, executed and
delivered by Jacksonville and constitutes the valid and binding
obligation of Jacksonville.
(d) To counsel's knowledge, all corporate acts and proceedings
required to be taken by or on the part of Jacksonville to consummate
the transactions contemplated by the Agreement have been taken, and
neither the execution or delivery of the Agreement, nor the
consummation of the transactions contemplated thereby, with and
without the giving of notice or the lapse of time or both, will
violate any provision of the articles of incorporation or bylaws of
Jacksonville.
(e) All regulatory and governmental approvals and consents
which are necessary to be obtained by Jacksonville to permit the
execution, delivery and performance of the transactions contemplated
by the Agreement have been obtained.
Such counsel also shall state that it has no reason to believe
that the information relating to Jacksonville and the transactions
completed by the Agreement contained in the proxy statement used to
solicit the approval of the stockholders of Jacksonville of the
Agreement and the Merger and any other required approval of the
transactions contemplated by the Agreement, as of the date of such
proxy statement and up to and including the meeting of stockholders
in connection with which such documents were used, contained any
untrue statement of a material fact or omitted to state a material
fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading.
In rendering their opinion, such counsel may rely, to the extent
such counsel deems such reliance necessary or appropriate, upon
certificates of governmental officials and, as to matters of fact,
certificates of any officer or officers of Jacksonville and its
subsidiaries. The opinion of such counsel may include such
qualifications and explanations of the basis thereof as may be
reasonably acceptable to Jacksonville.
LCS BANCORP, INC. ANNOUNCES ACQUISITION AGREEMENT
WITH JACKSONVILLE SAVINGS BANK
Litchfield, IL (August 13, 1996)-- The Board of Directors of LCS
Bancorp, Inc. today announced the sale of the Company to Jacksonville
Savings Bank for a cash payment of $17.75 per share, pending
stockholder and regulatory approvals.
Carol Radtke, President of LCS Bancorp, Inc., indicated that the
Board and management were pleased with the offer by Jacksonville
Savings. "The combination of Litchfield and Jacksonville will allow
the communities served by both companies to benefit from the combined
talents of our people. We are pleased to be joining a community-
oriented institution that has served central Illinois for over 80
years. We are confident that this affiliation with Jacksonville will
benefit our customers and stockholders." She indicated that
Jacksonville will continue to operate the Litchfield office as a
branch under the name of "Litchfield Community Savings, a division
of Jacksonville Savings Bank," and all current employees will be
retained.
Jacksonville Savings Bank is a state-chartered, mutual holding
company, which will have assets of $160 million following the
completion of the merger. Jacksonville is publicly traded on NASDAQ
Small Cap Exchange under the symbol "JXSB" and operates three offices
in Jacksonville and a branch in Virden under the name of First
Midwest. Jacksonville's Chief Executive Officer, Andrew Applebee,
stated, "We are extremely pleased to enter into this merger with LCS.
We believe that the Litchfield market complements the Bank's existing
market area. We consider the Litchfield area as a prime spot for
expansion for not only growth in the Bank, but also the ability to
bring new products and services to the surrounding communities and
to participate in the growth of the community. This transaction is
consistent with our strategy of increasing the value of our franchise
and enhancing long-term stockholder value."
Under the terms of the agreement, customers of Litchfield
Community Savings will have access to ATM cards and other deposit
services that will be offered as a result of the economics of scale
that can be achieved as a result of the merger. Upon completion of
the process, Litchfield will be able to offer 30-year fixed rate
mortgages and other secondary market products, along with their
existing adjustable rate mortgage products, consumer, commercial and
agricultural loans. Loan decisions will continue to be made in the
local office.
Following the receipt of regulatory approvals, it is anticipated
that stockholder approval will be sought in December 1996. Current
stockholders of both Litchfield and Jacksonville will be receiving
additional information by mail in the near future.
JACKSONVILLE SAVINGS BANK ANNOUNCES ACQUISITION AGREEMENT
WITH LCS BANCORP, INC.
Jacksonville, IL (August 13, 1996)-- The Board of Directors of
Jacksonville Savings Bank today announced the acquisition of the
stock of LCS Bancorp, Inc. (the holding company of Litchfield
Community Savings, S.B. for a cash payment of $17.75 per share,
pending stockholder and regulatory approvals.
Litchfield is a stock, state-chartered savings bank with
approximately $18 million in assets. They have one office in
Litchfield, Illinois. Jacksonville Savings Bank is a state-chartered,
mutual holding company, which will have assets of $160
million following the completion of the merger. Jacksonville is
publicly traded on the NASDAQ Small Cap Exchange under the symbol
"JXSB." Jacksonville has three offices in Jacksonville and a branch
in Virden under the name of First Midwest.
Jacksonville's Chief Executive Officer, Andrew Applebee, stated,
"We are extremely pleased to enter into this merger with LCS. We
believe that the Litchfield market complements the Bank's existing
market area. We consider the Litchfield area as a prime spot for
expansion for not only growth in the Bank, but also the ability to
bring new products and services to the surrounding communities and
to participate in the growth of the community. This transaction is
consistent with our strategy of increasing the value of our franchise
and enhancing long-term stockholder value."
Carol Radtke, President of LCS Bancorp, Inc., indicated that the
Board and management were pleased with the offer by Jacksonville
Savings. "The combination of Litchfield and Jacksonville will allow
the communities served by both companies to benefit from the combined
talents of our people. We are pleased to be joining a community-oriented
institution that has served central Illinois for over 80
years. We are confident that this affiliation with Jacksonville will
benefit our customers and stockholders." She indicated that
Jacksonville will continue to operate the Litchfield office as a
branch under the name of "Litchfield Community Savings, a division
of Jacksonville Savings Bank," and all current employees will be
retained.
Following the receipt of regulatory approvals, it is anticipated
that stockholder approval will be sought in December 1996. Current
stockholders of both Litchfield and Jacksonville will be receiving
additional information by mail in the near future.
