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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
March 26, 1997
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(Date of earliest event reported)
CitiSave Financial Corporation
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(Exact name of registrant as specified in its charter)
Louisiana 0-13824 72-1289214
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
665 Florida Street, Baton Rouge, Louisiana 70801
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(Address of principal executive offices) (Zip Code)
(504)383-4102
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(Registrant's telephone number, including area code)
Not Applicable
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(Former name or former address, if changed since last report)
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ITEM 5. OTHER EVENTS
On March 26, 1997, CitiSave Financial Corporation, a Louisiana corporation
("CitiSave"), and Citizens Savings Association, F.A., a federally chartered
savings and loan association and wholly owned subsidiary of CitiSave
("Citizens"), entered into an Agreement and Plan of Merger ("Agreement") by and
among Deposit Guaranty Corp. ("DGC"), CSF Acquisition Corp., a Louisiana
corporation and wholly owned subsidiary of DGC ("CSF Acquisition"), CitiSave and
Citizens, which provides for DGC's acquisition of all of the issued and
outstanding common stock, par value $.01 per share, of CitiSave (the "CitiSave
Common Stock"). Under the terms of the Agreement, CSF Acquisition shall be
merged with and into CitiSave (the "Merger") and CitiSave shall be the surviving
corporation. As a result of the Merger, CitiSave will become a wholly owned
subsidiary of DGC.
Pursuant to the Agreement, upon the effective date of the Merger
("Effective Date"), each share of CitiSave Common Stock, other than those as to
which CitiSave stockholders properly perfect their dissenters' rights under
Louisiana law (if available), will be converted into the right to receive from
DGC $20.50 in cash (the "Merger Price"). In addition, pursuant to the Agreement,
at or immediately prior to the Effective Date, each outstanding option to
purchase CitiSave Common Stock issued by CitiSave ("CitiSave Option") shall be
cancelled, and each holder of any such CitiSave Option, whether or not then
vested or exercisable, shall be entitled to receive from CitiSave at the
Effective Date for each CitiSave Option an amount determined by multiplying (i)
the excess of the Merger Price over the applicable exercise price per share of
the stock option by (ii) the number of shares of CitiSave Common Stock subject
to such CitiSave Option, subject to the execution by any such holder of
instruments of cancellation as DGC may reasonably deem appropriate.
Consummation of the Merger is subject to the prior receipt of all necessary
regulatory or governmental approvals and consents, the necessary approval of
stockholders of CitiSave at a meeting to be called, and certain closing
conditions. The Agreement, including Exhibit A thereto, is attached hereto as an
exhibit and incorporated herein by reference and made a part hereof to the same
extent as if set forth herein in full. The above summary does not purport to be
complete and is subject to and qualified in its entirety by reference to the
Agreement and the exhibit thereto.
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ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS
(a) Not applicable.
(b) Not applicable.
(c) Exhibits:
2 Agreement and Plan of Merger by and among
Deposit Guaranty Corp., CSF Acquisition Corp.,
CitiSave Financial Corporation and Citizens
Savings Association, F.A., dated March 26, 1997
99 Press Release, dated March 26, 1997
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SIGNATURES
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.
CITISAVE FINANCIAL CORPORATION
Date: April 2, 1997 By: /s/ Lee F. Nettles
----------------------------------------
Lee F. Nettles, Chairman, President
and Chief Executive Officer
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Exhibit 2
Agreement and Plan of Merger by and among
Deposit Guaranty Corp., CSF Acquisition Corp.,
CitiSave Financial Corporation and Citizens
Savings Association, F.A., dated March 26, 1997
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AGREEMENT AND PLAN OF MERGER
By and Among
DEPOSIT GUARANTY CORP.,
CSF ACQUISITION CORP.,
CITISAVE FINANCIAL CORPORATION
And
CITIZENS SAVINGS ASSOCIATION, F.A.
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Table of Contents
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Article I. THE HOLDING COMPANY MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.01 Holding Company Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Effective Date of the Holding Company Merger. . . . . . . . . . . . . . . . . . 1
1.03 Effect of the Holding Company Merger. . . . . . . . . . . . . . . . . . . . . . 1
1.04 Additional Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.05 Conversion of CitiSave Shares and Options. . . . . . . . . . . . . . . . . . . 2
1.06 Exchange of Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.07 Shares of CSF Acquisition. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.08 Tax Consequences. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Article II. THE BANK MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Article III. REPRESENTATIONS AND WARRANTIES OF CITIZENS AND
CITISAVE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.01 Corporate Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.02 Capitalization. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
3.03 Investments; No Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.04 Loan Portfolio. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
3.05 Authority; No Violation. . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.06 Consents and Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.07 Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
3.08 No Broker's Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
3.09 Title to Properties; Encumbrances. . . . . . . . . . . . . . . . . . . . . . . 8
3.10 No Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . . . . . . . . . 9
3.11 Absence of Certain Changes or Events. . . . . . . . . . . . . . . . . . . . . . 9
3.12 Leases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.13 Trademarks; Trade Names. . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.14 Compliance with Applicable Law. . . . . . . . . . . . . . . . . . . . . . . . 11
3.15 Absence of Questionable Payments. . . . . . . . . . . . . . . . . . . . . . . 12
3.16 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.17 Powers of Attorney; Guarantees. . . . . . . . . . . . . . . . . . . . . . . . 12
3.18 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
3.19 Benefit and Employee Matters. . . . . . . . . . . . . . . . . . . . . . . . . 14
3.20 Contracts and Commitments; No Default . . . . . . . . . . . . . . . . . . . . 15
3.21 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.22 Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.23 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.24 Contract Termination Provisions . . . . . . . . . . . . . . . . . . . . . . . 18
3.25 Financial Institutions Bond . . . . . . . . . . . . . . . . . . . . . . . . . 18
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Article IV. REPRESENTATIONS AND WARRANTIES OF DGC AND CSF ACQUISITION . . . . . . . . . . . . . . 18
4.01 Corporate Organization. . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
4.02 Authority; No Violation. . . . . . . . . . . . . . . . . . . . . . . . . . . 19
4.03 Consents and Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Article V. COVENANTS OF THE PARTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.01 Conduct of Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.02 Limitation on Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.03 Current Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
5.04 Access to Properties and Records; Confidentiality. . . . . . . . . . . . . . 22
5.05 Interim Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . 22
5.06 Regulatory Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.07 Approval of Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.08 Further Assurances. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.09 Public Announcements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
5.10 Benefits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.11 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
5.12 CitiSave ESOP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
5.13 CitiSave Stock Option Plans and MRP . . . . . . . . . . . . . . . . . . . . . 26
Article VI. CLOSING CONDITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.01 Conditions to Each Party's Obligations under this Agreement. . . . . . . . . 27
6.02 Conditions to the Obligations of DGC and CSF Acquisition under
this Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
6.03 Conditions to the Obligations of Citizens and CitiSave under
this Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Article VII. CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.01 Time and Place. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
7.02 Deliveries at the Closing. . . . . . . . . . . . . . . . . . . . . . . . . . 32
Article VIII. TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.01 Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
8.02 Effect of Termination. . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Article IX. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.01 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.02 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
9.03 Parties in Interest. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.04 Amendment, Extension and Waiver. . . . . . . . . . . . . . . . . . . . . . . 35
9.05 Complete Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
9.06 Non-Survival of Representations and Warranties . . . . . . . . . . . . . . . 36
9.07 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.08 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
9.09 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
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AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER, dated as of March 26, 1997,
by and among CitiSave Financial Corporation ("CitiSave"), a corporation
organized under the laws of the State of Louisiana, and its wholly-owned
subsidiary Citizens Savings Association, F.A. ("Citizens"), a federally
chartered stock savings and loan association organized under the laws of the
United States, and Deposit Guaranty Corp. ("DGC"), a corporation organized under
the laws of the State of Mississippi, and its wholly-owned subsidiary CSF
Acquisition Corp. ("CSF Acquisition"), a corporation organized under the laws of
Louisiana, each acting pursuant to a resolution of its Board of Directors.
In consideration of the mutual covenants, representations,
warranties and agreements herein contained, the parties agree that CSF
Acquisition shall be merged into CitiSave (the "Holding Company Merger") on the
terms and subject to the conditions set forth in this Agreement.
I.
THE HOLDING COMPANY MERGER
1.01 Holding Company Merger. In accordance with the
applicable provisions of the Louisiana Business Corporation Law ("LBCL"), CSF
Acquisition shall be merged with and into CitiSave pursuant to a certificate of
merger substantially in the form attached as Exhibit A and executed and
acknowledged at the appropriate time in the manner required by law; the separate
existence of CSF Acquisition shall cease; and CitiSave shall be the corporation
surviving the Holding Company Merger.
1.02 Effective Date of the Holding Company Merger. The
Holding Company Merger shall become effective on the date (the "Effective Date")
set forth in the certificate of merger filed in the office of the Secretary of
State of Louisiana.
1.03 Effect of the Holding Company Merger. On the Effective
Date, (i) the separate existence of CSF Acquisition shall cease and CSF
Acquisition shall be merged with and into CitiSave, (ii) CitiSave shall continue
to possess all of the rights, privileges and franchises possessed by it and
shall, on the Effective Date, become vested with and possess all rights,
privileges and franchises possessed by CSF Acquisition, (iii) CitiSave shall be
responsible for all of the liabilities and obligations of CSF Acquisition in the
same manner as if CitiSave had itself incurred such liabilities or obligations,
and the Holding Company Merger shall not affect or impair the rights of the
creditors or of any persons dealing with CSF Acquisition, (iv) the Holding
Company Merger will not of itself cause a change, alteration or amendment to the
Articles of Incorporation of CitiSave, (v) the Bylaws of CSF Acquisition shall
become the Bylaws of CitiSave, (vi) the Holding Company Merger will affect the
tenure in office of all officers and directors of CitiSave and the existing
officers and directors of CSF Acquisition shall
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succeed to such positions with CitiSave solely by virtue of the Holding Company
Merger, and (vii) the Holding Company Merger shall, from and after the
Effective Date, have all the effects provided by applicable Louisiana law.
1.04 Additional Actions. If, at any time after the
Effective Date, CitiSave shall consider or be advised that any further
assignments or assurances in law or any other acts are necessary or desirable
(i) to vest, perfect or confirm, of record or otherwise, in CitiSave, title to
or the possession of any property or right of CSF Acquisition acquired or to be
acquired by reason of, or as a result of, the Holding Company Merger, or (ii)
otherwise to carry out the purposes of this Agreement, CSF Acquisition and its
proper officers and directors shall be deemed to have granted to CitiSave an
irrevocable power of attorney to execute and deliver all such proper deeds,
assignments and assurances in law and to do all acts necessary or proper to
vest, perfect or confirm title to and possession of such property or rights in
CitiSave and otherwise to carry out the purposes of this Agreement; and the
proper officers and directors of CitiSave are fully authorized in the name of
CSF Acquisition to take any and all such action.
1.05 Conversion of CitiSave Shares and Options.
(a) Each share of common stock, $.01 par value, of
CitiSave (the "CitiSave Common Stock") issued and outstanding immediately prior
to the Effective Date other than shares of CitiSave Common Stock owned by
stockholders who, pursuant to the LBCL, perfect dissenters' rights ("Dissenting
Shares") in the event such rights are available under the LBCL, shall, by
virtue of this Agreement and without any action on the part of the holder
thereof, be converted into the right to receive $20.50 in cash per share (the
"Merger Price"), payable to the holder thereof without interest thereon, upon
the surrender of the certificate formerly representing such share of CitiSave
Common Stock.
(b) At or immediately prior to the Effective Date, each
outstanding option to purchase CitiSave Common Stock issued by CitiSave set
forth on Schedule 3.02 hereof ("CitiSave Option") shall be canceled, and each
holder of any such CitiSave Option shall be entitled to receive at or
immediately prior to the Effective Date for each CitiSave Option an amount
determined by multiplying (i) the excess of the Merger Price over the
applicable exercise price per share of such option by (ii) the number of shares
of CitiSave Common Stock subject to such CitiSave Option ("Option
Consideration"). The payment of the consideration referred to in the
immediately preceding sentence to holders of CitiSave Options shall be subject
to the execution by any such holder of such instruments of cancellation as DGC
may reasonably deem appropriate. In no event shall the amount paid by CitiSave
in settlement of CitiSave Options exceed $573,772 in the aggregate.
(c) At or immediately prior to the Effective Date, each
outstanding award ("MRP Award") to acquire CitiSave Common Stock pursuant to
CitiSave's 1996 Management Recognition Plan for Officers (the "MRP") set forth
on Schedule 3.02 shall be cancelled to the extent not previously vested, and
each holder of any such unvested MRP Award shall be entitled to receive at or
immediately prior to the Effective Date for each MRP Award an amount
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determined by multiplying (i) the Merger Price by (ii) the number of shares of
unvested CitiSave Common Stock subject to such MRP Award ("MRP Consideration").
The payment of the consideration referred to in the immediately preceding
sentence to holders of MRP Awards shall be subject to the execution by any such
holder of such instruments of cancellation as DGC may reasonably deem
appropriate. In no event shall the aggregate MRP Consideration exceed
$673,364.
1.06 Exchange of Shares.
(a) Within five business days after the Effective Date,
Deposit Guaranty National Bank, acting as exchange agent (the "Exchange
Agent"), shall mail to each holder of record of a certificate or certificates
which immediately prior to the Effective Date represented issued and
outstanding shares of CitiSave Common Stock (the "Certificates"), a form letter
of transmittal (which 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) and instructions for use in effecting the
surrender of the Certificates in exchange for the Merger Price. 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 receive in exchange therefor (as promptly as practicable)
the consideration set forth in Section 1.05 hereof, without any interest
thereon, and the Certificate so surrendered shall forthwith be canceled. Lost
Certificates shall be treated in accordance with the existing procedures of
CitiSave.
(b) If payment is to be made to a person other than the
person in whose name a Certificate surrendered in exchange therefor is
registered, it shall be a condition of 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 any transfer or other taxes required
by reason of the payment to a person other than 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.
(c) At the Effective Date, DGC shall deposit, or cause to
be deposited, in trust with the Exchange Agent the aggregate Merger Price to
which holders of shares of CitiSave Common Stock shall be entitled at the
Effective Date pursuant to Section 1.05 hereof
(d) Promptly following the date which is twelve months
after the Effective Date, the Exchange Agent shall deliver to CitiSave all
cash, Certificates and other documents in its possession relating to the
transactions described in this Agreement, and the Exchange Agent's duties shall
terminate. Thereafter, each holder of a Certificate formerly representing a
share of CitiSave Common Stock may surrender such Certificate to CitiSave and
(subject to a)applicable abandoned property, escheat and similar laws) receive
in consideration therefor the Merger Price, without any interest or dividends
thereon.
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(e) After the Effective Date, there shall be no transfers
on the stock transfer books of CitiSave of the shares of CitiSave Common Stock
which are outstanding immediately prior to the Effective Date. If, after the
Effective Date, Certificates representing such shares are presented for
transfer to the Exchange Agent, they shall be canceled and exchanged as
provided in this Article I.
(f) From and after the Effective Date, the holders of
Certificates evidencing ownership of shares of CitiSave Common Stock
outstanding immediately prior to the Effective Date shall cease to have any
rights with respect to such shares, except as otherwise provided herein or by
applicable law.
(g) Notwithstanding anything to the contrary in this
Section 1.06, neither the Exchange Agent, DGC, nor CitiSave shall be liable to
a holder of a Certificate formerly representing shares of CitiSave Common Stock
for any amount properly paid to a public official pursuant to an applicable
property, escheat or similar law.
1.07 Shares of CSF Acquisition. Each share of common
stock, $1.00 par value, of CSF Acquisition (the "CSF Acquisition Common Stock")
issued and outstanding immediately prior to the Effective Date, shall, by
virtue of this Agreement and without any action on the part of the holder
thereof, be converted into one (1) share of CitiSave Common Stock.
1.08 Tax Consequences. It is intended that the Holding
Company Merger shall constitute a qualified stock purchase by DGC within the
meaning of Section 338(d)(3) of the Internal Revenue Code of 1986, as amended
(the "Code").
II.
THE BANK MERGER
DGC and CitiSave shall take all action necessary and
appropriate, including causing the entering into of a merger agreement by
Citizens, or its successor, and a subsidiary bank of DGC (the "Bank Merger
Agreement"), to cause Citizens to convert to a national bank in the discretion
of DGC, and to merge with and into a subsidiary bank of DGC (the "Bank
Merger"), after consummation of the Holding Company Merger and the merger of
CitiSave with and into Deposit Guaranty Louisiana Corp., a wholly-owned
subsidiary of DGC, in accordance with the applicable laws of the United States
and Regulations of the Office of the Comptroller of the Currency (the "OCC")
and the Office of Thrift Supervision (the "OTS") thereunder.
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III.
REPRESENTATIONS AND WARRANTIES OF
CITIZENS AND CITISAVE
Citizens and CitiSave hereby make the following
representations and warranties to DGC and CSF Acquisition:
3.01 Corporate Organization.
(a) Citizens is a federally chartered stock savings and
loan association duly organized, validly existing and in good standing under
the laws of the United States. Citizens' deposits are insured under the
provisions of the Federal Deposit Insurance Act, as amended. Citizens has the
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. Citizens' wholly-owned
subsidiary 665 Florida Street Corp. ("FS Corp.") is an 80% partner in Roberts &
Eastland ("R & E"), an insurance agency (collectively the "Citizens
Subsidiaries"). FS Corp. is a duly organized and validly existing corporation
and is in good standing under the laws of the State of Louisiana. R & E is a
validly existing partnership and is in good standing under the laws of the
State of Louisiana. Each of the Citizens Subsidiaries has the 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. All shares of capital stock of FS Corp.
are validly issued and outstanding, fully paid, and non-assessable, and FS
Corp. is wholly-owned by Citizens. There are no outstanding options, warrants,
rights, or obligations of any kind entitling the holder thereof to acquire
shares of the capital stock of FS Corp., and there are no instruments or
securities of any kind that are convertible into shares of the capital stock of
FS Corp. Except as set forth on Schedule 3.01, none of the Citizens
Subsidiaries is party to any joint venture or partnership.
(b) CitiSave is a corporation duly organized, validly
existing and in good standing under the laws of the State of Louisiana.
CitiSave is a registered thrift holding company under the Savings and Loan
Holding Company Act. CitiSave 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 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.
3.02 Capitalization.
(a) The authorized capital stock of Citizens consists of
10,000,000 shares of common stock, $.01 par value (the "Citizens Common
Stock"), and 5,000,000 shares of preferred stock, $.01 par value (the "Citizens
Preferred Stock"). At the close of business on December 31, 1996, there were
1,000 shares of Citizens Common Stock issued and outstanding, no shares were
held in Citizens' treasury, and no shares of Citizens Preferred Stock were
issued and outstanding. Except as set forth on Schedule 3.02 hereto, all
issued and outstanding shares of Citizens
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Common Stock have been duly authorized and validly issued and are fully paid,
nonassessable and free of preemptive rights with no personal liability
attaching to the ownership thereof. Except as set forth on Schedule 3.02
hereof, Citizens has not issued any additional shares of Citizens Common Stock
since December 31, 1996, and does not have and is not bound by any outstanding
subscription, options, warrants, calls, commitments or agreements of any
character calling for the purchase or issuance of any shares of Citizens Common
Stock or any security representing the right to purchase or otherwise receive
any Citizens Common Stock. CitiSave has good, valid and marketable title to
the Citizens Common Stock, and on the Effective Date the same will be free and
clear of all liens, encumbrances, pledges, claims, options, charges and
assessments of any nature whatsoever.
(b) The authorized capital stock of CitiSave consists of
10,000,000 shares of CitiSave Common Stock and 5,000,000 shares of serial
preferred stock, $.01 par value (the "CitiSave Preferred Stock"). At the close
of business on December 31, 1996, there were 962,207 shares of CitiSave Common
Stock issued and outstanding, 2,500 shares of CitiSave Common Stock were held
in CitiSave's treasury, and no shares of CitiSave Preferred Stock were issued
and outstanding. Except as set forth on Schedule 3.02 hereto, all issued and
outstanding shares of CitiSave Common Stock have been duly authorized and
validly issued and are fully paid, nonassessable and free of preemptive rights
with no personal liability attaching to the ownership thereof. Except as set
forth on Schedule 3.02 hereof, CitiSave has not issued any additional shares of
CitiSave Common Stock since December 31, 1996, and does not have and is not
bound by any outstanding subscription, options, warrants, calls, commitments or
agreements of any character calling for the purchase or issuance of any shares
of CitiSave Common Stock or any security representing the right to purchase or
otherwise receive any CitiSave Common Stock.
3.03 Investments; No Subsidiaries. The "CitiSave
Consolidated Group," as such term is used in this Agreement, consists of
CitiSave, Citizens and FS Corp. Except as set forth on Schedule 3.03 hereof,
neither Citizens, CitiSave nor FS Corp. has any subsidiaries or equity
interest or other investment, direct or indirect, in any corporation,
partnership, joint venture or other entity except for such equity interest or
other investment which Citizens may have acquired as a result of foreclosure
and is as of the date hereof holding subject to sale.
3.04 Loan Portfolio. All loans, discounts and financing
leases (in which any member of the CitiSave Consolidated Group is lessor)
reflected on the CitiSave Latest Balance Sheet (as defined in Section 3.07) (a)
were, at the time and under the circumstances in which made, made for good,
valuable and adequate consideration in the ordinary course of business of the
CitiSave Consolidated Group, (b) are evidenced by genuine notes, agreements or
other evidences of indebtedness and (c) to the extent secured, have been
secured by valid liens and security interests which have been perfected. Set
forth in Schedule 3.04 hereto is a true and complete list of all real property
in which Citizens has an interest as creditor or mortgagee in an amount greater
than $50,000 as of March 14, 1997. Except as set forth in Schedule 3.04
hereto, there are no outstanding loans held by Citizens with an unpaid balance
of $25,000 or more in which a material default has occurred as of March 14,
1997. A material default for purposes of this Section 3.04
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includes, without limitation, the failure to pay indebtedness or an installment
thereof more than sixty (60) days after it is due and payable.
3.05 Authority; No Violation. Each of Citizens and
CitiSave has full corporate power and authority to execute and deliver this
Agreement and to consummate the transactions contemplated hereby. The
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by Citizens have been duly and validly
approved by the Board of Directors of Citizens, and, except for approval by
CitiSave as the sole shareholder of Citizens, no other corporate proceedings on
the part of Citizens are necessary to consummate the transactions so
contemplated. The Board of Directors of CitiSave has duly and validly approved
this Agreement and the transactions contemplated hereby and has authorized the
execution and delivery of this Agreement by CitiSave, and, except for the
approval of this Agreement by its shareholders, no other corporate proceedings
on the part of CitiSave are necessary to consummate the transactions so
contemplated. This Agreement has been duly and validly executed and delivered
by Citizens and CitiSave and constitutes a valid and binding obligation of
Citizens and of CitiSave enforceable against each in accordance with its terms,
except that enforcement may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, conservatorship, receivership or other similar laws
now or hereafter in effect relating to or affecting the enforcement of
creditors' rights generally or the rights of creditors of federal savings
institutions or their holding companies, (ii) general equitable principles, and
(iii) laws relating to the safety and soundness of insured depository
institutions, and except that no representation is expressed as to the effect
or availability of equitable remedies or injunctive relief (regardless of
whether such enforceability is considered in a proceeding in equity or at law).
3.06 Consents and Approvals. Except as set forth in
Schedule 3.06 hereto, no permit, consent, approval or authorization of, or
declaration, filing or registration with, any public body or authority or to
the knowledge of Citizens and CitiSave any third party is necessary in
connection with (i) the execution and delivery by Citizens or CitiSave of this
Agreement, or (ii) the consummation by CitiSave or Citizens of the Holding
Company Merger and the other transactions contemplated hereby.
3.07 Financial Statements. CitiSave has filed all
required reports, schedules, forms, statements and other documents with the SEC
since July 14, 1995 (the "CitiSave SEC Documents"), complete copies of which
have been provided to DGC. The CitiSave SEC Documents complied as to form in
all material respects with the requirements of the Securities Act of 1933, as
amended (the "Securities Act") or the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), as the case may be, and the rules and regulations
of the SEC promulgated thereunder applicable to such CitiSave SEC Documents,
and none of the CitiSave SEC Documents contained any untrue statement of a
material fact or omitted 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; provided that
information as of a later date shall be deemed to modify information as of an
earlier date. The CitiSave financial statements included in the CitiSave SEC
Documents have been audited by Hannis T. Bourgeois & Co., independent public
accountants (in the case of the CitiSave audited financial statements)
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in accordance with generally accepted auditing standards, have been prepared in
accordance with generally accepted accounting principles and, except as
disclosed therein, applied on a basis consistent with prior periods, and
present fairly, in all material respects, the financial position of CitiSave
and its consolidated subsidiaries at such dates and the results of operations
and cash flows for the periods then ended, except, in the case of the CitiSave
interim financial statements, as permitted by Rule 10-01 of Regulation S-X of
the SEC. The CitiSave interim financial statements reflect all adjustments
(consisting only of normal recurring adjustments) that are necessary for a fair
statement of the results for the interim periods presented therein. Neither
CitiSave nor any of its consolidated subsidiaries has, nor are any of their
respective assets subject to, any liability, commitment, debt or obligation (of
any kind whatsoever whether absolute or contingent, accrued, fixed, known,
unknown, matured or unmatured) that is material individually or in the
aggregate, except as and to the extent reflected on the latest balance sheet
included in the CitiSave audited financial statements as of and for the year
ended December 31, 1996 (the "CitiSave Latest Balance Sheet"), or as may have
been incurred or may have arisen since the date of the CitiSave Latest Balance
Sheet in the ordinary course of business.
3.08 No Broker's Fees. Except as fully described and set
forth in Schedule 3.08 hereto, neither Citizens, CitiSave nor any of their
officers or directors has employed any broker or finder or incurred any
liability for any broker's fees, commissions or finder's fees in connection
with any of the transactions contemplated by this Agreement.
3.09 Title to Properties; Encumbrances. Except as set
forth in Schedule 3.09 hereto, Citizens and CitiSave have good, valid and
marketable title to, or a valid leasehold interest in, (a) all their real
properties and (b) all other properties and assets reflected in the CitiSave
Latest Balance Sheet, other than any of such properties or assets which have
been sold or otherwise disposed of since the date of the CitiSave Latest
Balance Sheet in the ordinary course of business and consistent with past
practice. Except as set forth in Schedule 3.09 hereto, all of such properties
and assets are free and clear of all title defects, mortgages, pledges, liens,
claims, charges, security interests or other encumbrances of any nature
whatsoever, including, without limitation, leases, options to purchase,
conditional sales contracts, collateral security arrangements and other title
or interest retention arrangements, and are not, in the case of real property,
subject to any easements, building use restrictions, exceptions, reservations
or limitations of any nature whatsoever, except, with respect to all such
properties and assets, liens for current taxes and assessments not in default,
minor imperfections of title, and encumbrances, if any, which have arisen in
the ordinary course of business, which are not substantial in character, amount
or extent and which do not detract from the value of or interfere with the
present or contemplated use of any of the properties subject thereto or
affected thereby or otherwise impair the business operations conducted or
contemplated by Citizens or CitiSave. All personal property material to the
business, operations or financial condition of Citizens or CitiSave, and all
buildings, structures and fixtures used by Citizens or CitiSave in the conduct
of their businesses, are in good operating condition and repair (ordinary wear
and tear excepted). Except as set forth in Schedule 3.09 hereto, neither
Citizens nor CitiSave has received any notification of any violation (which has
not been cured) of any building, zoning or other law, ordinance or regulation
in respect of such property or structures or Citizens' or CitiSave's use
thereof.
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3.10 No Undisclosed Liabilities. Except as set forth in
Schedule 3.10 hereto, as of the date hereof neither Citizens nor CitiSave has
any liabilities or obligations of any nature (whether absolute, accrued,
contingent or otherwise and whether due or to become due), except liabilities
and obligations (i) fully reflected or reserved against in the CitiSave Latest
Balance Sheet or disclosed in the notes thereto or (ii) incurred since the date
of the CitiSave Latest Balance Sheet in the ordinary course of business and
consistent with past practice.
3.11 Absence of Certain Changes or Events.
(a) Except as set forth in Schedule 3.11 hereto, since
the date of the CitiSave Latest Balance Sheet, there has not been:
(i) any material adverse change in the business,
operations, properties, assets or financial condition of
Citizens and CitiSave, considered as a whole, or any event
which has had or will have a material adverse effect, excluding
changes resulting from or attributable to the payment of (a)
investment banking fees as set forth in Schedule 3.08 hereto
and (b) cash in settlement of outstanding stock options and MRP
Awards pursuant to Section 1.05 hereof ("Material Adverse
Change");
(ii) any loss, damage, destruction or other casualty
materially and adversely affecting any of the properties,
assets or business of Citizens or CitiSave or any of their
subsidiaries (whether or not covered by insurance);
(iii) any increase of more than ten percent (10%) in
the compensation payable by Citizens or CitiSave to any of
their directors, officers, agents, consultants, or any of their
employees whose total compensation after such increase was in
excess of $25,000 per annum (excluding increases in
compensation resulting from the vesting of shares of CitiSave
Common Stock awarded prior to the date of this Agreement
pursuant to CitiSave's MRP or from the exercise of CitiSave
Options granted prior to the date of this Agreement), or any
extraordinary bonus, percentage compensation, service award or
other like benefit granted, made or accrued to the credit of
any such director, officer, agent, consultant or employee, or
any extraordinary welfare, pension, retirement or similar
payment or arrangement made or agreed to by Citizens or
CitiSave for the benefit of any such director, officer, agent,
consultant or employee;
(iv) any change in any method of accounting or
accounting practice of Citizens or CitiSave;
(v) any loan in excess of $25,000 or portion thereof
rescheduled as to payments thereon, subject to a moratorium on
payment thereof or written off by Citizens or CitiSave as
uncollectible; or
(vi) any agreement or understanding, whether in
writing or otherwise, of Citizens or CitiSave to do any of the
foregoing.
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(b) Except as set forth in Schedule 3.11 hereto, since the
date of the CitiSave Latest Balance Sheet, neither Citizens nor CitiSave has:
(i) issued or sold any promissory note, stock, bond
or other corporate security of which it is the issuer in an
amount greater than $25,000 (except that shares of CitiSave
Common Stock may be issued upon the exercise of CitiSave
Options which were granted prior to the date of this
Agreement);
(ii) discharged or satisfied any lien or encumbrance
or paid or satisfied any obligation or liability (whether
absolute, accrued, contingent or otherwise and whether due or
to become due) in an amount greater than $25,000 as to each
such lien, encumbrance, obligation or liability other than
current liabilities shown on the CitiSave Latest Balance Sheet
and current liabilities incurred since the date of the CitiSave
Latest Balance Sheet in the ordinary course of business and
consistent with past practice and other than any such lien,
encumbrance, obligation or liability of the nature (regardless
of amount) required to be disclosed pursuant to Section
3.11(a)(iii) hereto;
(iii) declared, paid or set aside for payment any
dividend or other distribution (whether in cash, stock or
property) in respect of its capital stock, except regular
quarterly cash dividends of $.10 per share by CitiSave to its
stockholders as permitted by Section 5.01(f) and except
dividends by Citizens to CitiSave to the extent necessary to
pay necessary and routine expenses of CitiSave (including
expenses relating to the transactions contemplated by this
Agreement) or to fund regular dividends by CitiSave to its
stockholders to the extent permitted by Section 5.01(f) hereof;
(iv) split, combined or reclassified any shares of
its capital stock, or redeemed, purchased or otherwise acquired
any shares of its capital stock or other securities;
(v) sold, assigned or transferred any of its assets
(real, personal or mixed, tangible or intangible), canceled any
debts or claims or waived any rights of substantial value,
except, in each case, in the ordinary course of business and
consistent with past practice;
(vi) sold, assigned, transferred or permitted to
lapse any patents, trademarks, trade names, copyrights or other
similar assets, including applications or licenses therefor;
(vii) paid any amounts or incurred any liability to or
in respect of, or sold any properties or assets (real, personal
or mixed, tangible or intangible) to, or engaged in any
transaction (other than any transaction of the nature
(regardless of amount) required to be disclosed pursuant to
Section 3.11(a)(iii) hereof) or entered into any agreement or
arrangement with, any corporation or business in which
Citizens, CitiSave or any of their officers or directors, or
any "affiliate" or "associate" (as such terms are defined in
the rules and regulations promulgated under the Securities Act)
of any such person, has any direct or indirect interest;
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(viii) entered into any collective bargaining
agreement; or
(ix) entered into any other transaction other than
in the ordinary course of business and consistent with past
practice or in connection with the transactions contemplated by
this Agreement.
3.12 Leases. Set forth in Schedule 3.12 hereto is an
accurate and complete list of all leases calling for annual rent payments in
excess of $10,000 pursuant to which Citizens or CitiSave, as lessee, leases real
or personal property, including, without limitation, all leases of computer or
computer services and all arrangements for time-sharing or other data processing
services, describing for each lease Citizens' or CitiSave's financial
obligations under such lease, its rental payments, expiration date and renewal
terms. Except as set forth in Schedule 3.12 hereto: (a) all such leases are in
full force and effect in accordance with their terms; (b) there exists no event
of default or event, occurrence, condition or act which with the giving of
notice, the lapse of time or the happening of any further event or condition
would become a default under any such lease; and (c) neither Citizens nor
CitiSave is a lessee under a lease having an unexpired term greater than 36
months that requires Citizens or CitiSave to make payments for the use of any
property at rates currently higher than prevailing market rates for similar
properties in the localities where such properties are located.
3.13 Trademarks; Trade Names. Set forth in Schedule 3.13
hereto is an accurate and complete list and brief description of all trademarks
(either registered or common law), trade names and copyrights (and all
applications and licenses therefor) owned by Citizens or CitiSave or in which
they have any interest. Citizens and CitiSave own, or have the right to use, all
trademarks, trade names and copyrights used in or necessary for the ordinary
conduct of their existing businesses as heretofore conducted, and the
consummation of the transactions contemplated hereby will not alter or impair
any such rights. Except as set forth in Schedule 3.13 hereto, no claims are
pending by any person for the use of any trademarks, trade names or copyrights
or challenging or questioning the validity or effectiveness of any license or
agreement relating to the same, nor is there any valid basis for any such claim,
challenge or question, and use of such trademarks, trade names and copyrights by
Citizens or CitiSave does not infringe on the rights of any person.
3.14 Compliance with Applicable Law.
(a) Citizens and CitiSave hold, and have at all times
held, all licenses, franchises, permits and governmental authorizations
necessary for the lawful conduct of their respective businesses under and
pursuant to all, and have complied in all material respects with and are not in
default in any respect under any, applicable statutes, laws, ordinances, rules,
regulations, and orders of all federal, state and local governmental bodies,
agencies and subdivisions having, asserting or claiming jurisdiction over them
or over any part of their operations (to the extent that such default or the
failure to hold such license, franchise, permit or authorization could result in
a material limitation on the conduct of Citizens' or CitiSave's business, or
could cause Citizens or CitiSave to incur a substantial financial penalty); and,
except as set forth in Schedule 3.14
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hereto, neither Citizens nor CitiSave has received notice of a violation of,
and does not know of any violation of or of any valid basis for any claim of a
violation of, any of the above.
(b) CitiSave has filed all reports that it was required to
file with the SEC under the Exchange Act, all of which complied in all material
respects with all applicable requirements of the Exchange Act and the rules and
regulations adopted thereunder. As of their respective dates, each such report,
statement, form or other document, including without limitation, any financial
statements or schedules included therein, 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, provided that
information as of a later date shall be deemed to modify information as of an
earlier date.
3.15 Absence of Questionable Payments. Citizens and
CitiSave have not, and, to the knowledge of Citizens or CitiSave, no director,
officer, agent, employee, consultant or other person acting on behalf of
Citizens or CitiSave has, (a) used any Citizens or CitiSave corporate funds for
unlawful contributions, gifts, entertainment or other unlawful expenses relating
to political activity or (b) made any direct or indirect unlawful payments to
government officials from any Citizens or CitiSave corporate funds, or
established or maintained any unlawful or unrecorded accounts with funds
received from Citizens or CitiSave.
3.16 Insurance. Set forth in Schedule 3.16 hereto is an
accurate and complete list of all policies of insurance, including the amounts
thereof, owned by Citizens or CitiSave or in which Citizens or CitiSave is named
as the insured party. All such policies are valid, outstanding and enforceable
and will remain in full force and effect at least through the consummation of
the transactions contemplated by this Agreement. Such insurance with respect to
Citizens' and CitiSave's property and the conduct of their businesses is in such
amounts and against such risks as are usually insured against by persons
operating similar properties and businesses in the State of Louisiana and are
adequate for the conduct of Citizens' and CitiSave's businesses. Except as set
forth in Schedule 3.16 hereto, neither Citizens nor CitiSave has been refused
any insurance nor have their coverages been limited by any insurance carrier to
which they have applied for insurance or with they have carried insurance during
the last five years.
3.17 Powers of Attorney; Guarantees. Except as set forth in
Schedule 3.17 hereto, other than in the ordinary course of business neither
Citizens nor CitiSave has given any power of attorney to any person to act on
its behalf, or has any obligation or liability, either actual, accruing or
contingent, as guarantor, surety, cosigner, endorser, co-maker or indemnitor in
respect of the obligation of any person, corporation, partnership, joint
venture, association, organization or other entity.
3.18 Tax Matters. Citizens and CitiSave make the following
representations with respect to tax matters:
(a) For purposes of this Section, the following
definitions shall apply:
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(1) The term "Taxes" shall mean all taxes, however
denominated, including any interest, penalties or other additions to tax that
may become payable in respect thereof, imposed by any federal, state or local
government or any agency or political subdivision of any such government since
January 1, 1991, which taxes shall include, without limiting the generality of
the foregoing, all income or profits taxes (including, but not limited to,
federal income taxes and state income taxes), real property gains taxes, payroll
and employee withholding taxes, unemployment insurance taxes, social security
taxes, sales and use taxes, ad valorem taxes, excise taxes, franchise taxes,
gross receipts taxes, business license taxes, occupation taxes, real and
personal property taxes, stamp taxes, environmental taxes, transfer taxes,
workers' compensation, Pension Benefit Guaranty Corporation premiums and other
governmental charges, and other obligations of the same or of a similar nature
to any of the foregoing, which any member of the CitiSave Consolidated Group is
required to pay, withhold or collect.
(2) The term "Returns" shall mean all reports, estimates,
declarations of estimated tax, information statements and returns relating to,
or required to be filed in connection with, any Taxes since January 1, 1991,
including information returns or reports with respect to backup withholding and
other payments to third parties.
(b) To the knowledge of the CitiSave Consolidated Group,
all Returns required to be filed by or on behalf of members of the CitiSave
Consolidated Group have been duly filed and, to the knowledge of the CitiSave
Consolidated Group, such Returns are true, complete and correct in all material
respects. All Taxes shown to be payable on the Returns or on subsequent
assessments with respect thereto have been paid in full on a timely basis, and
no other Taxes are payable by the CitiSave Consolidated Group with respect to
items or periods covered by such Returns or with respect to any period prior to
the date of this Agreement. Each member of the CitiSave Consolidated Group has
withheld and paid over all Taxes required to have been withheld and paid over,
and complied with all information reporting and backup withholding requirements,
including maintenance of required records with respect thereto, in connection
with amounts paid or owing to any employee, creditor, independent contractor, or
other third party. There are no liens on any of the assets of any member of the
CitiSave Consolidated Group with respect to Taxes, other than liens for Taxes
not yet due and payable or for Taxes that a member of the CitiSave Consolidated
Group is contesting in good faith through appropriate proceedings and for which
appropriate reserves have been established.
(c) The Returns of the CitiSave Consolidated Group have
not been audited by a government or taxing authority, nor to the knowledge of
the CitiSave Consolidated Group, is any such audit in process, pending or
threatened. To the knowledge of the CitiSave Consolidated Group, no deficiencies
exist or have been asserted or are expected to be asserted with respect to Taxes
of the CitiSave Consolidated Group, and no member of the CitiSave Consolidated
Group has received notice or expects to receive notice that it has not filed a
Return or paid Taxes required to be filed or paid by it. No member of the
CitiSave Consolidated Group is a party to any action or proceeding for
assessment or collection of Taxes, nor to the knowledge of the CitiSave
Consolidated Group, has such event been asserted or threatened against any
member of
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the CitiSave Consolidated Group or any of its assets. No waiver or extension of
any statute of limitations is in effect with respect to Taxes or Returns of the
CitiSave Consolidated Group.
3.19 Benefit and Employee Matters.
(a) Schedule 3.19(a) lists all pension, retirement, stock
option, stock purchase, stock ownership, savings, stock appreciation right,
profit sharing, deferred compensation, employment, compensation arrangements,
consulting, bonus, collective bargaining, group insurance, severance and other
employee benefit, incentive and welfare policies, contracts, plans and
arrangements, and all trust agreements related thereto established or maintained
by CitiSave or Citizens, for the benefit of any of the present or former
directors, officers, or other employees of Citizens and CitiSave. Schedule
3.19(a) also identifies each "employee benefit plan," as such term is defined in
Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended
("ERISA") maintained or contributed to by any member of the CitiSave
Consolidated Group. Except as set forth in Schedule 3.19(a) hereto, neither
Citizens nor CitiSave maintains or contributes to any "employee benefit plan,"
as such term is defined in Section 3 of ERISA. Except as set forth in Schedule
3.19(a), all "employee benefit plans" maintained by Citizens or CitiSave (all
such plans being listed in Schedule 3.19(a) hereto) (collectively, the "Citizens
Plans") are in material compliance with the provisions of ERISA and the
applicable provisions of the Code. No member of the CitiSave Consolidated Group
has maintained or become obligated to contribute to any "employee benefit plan"
as such term is defined in Section 3(3) of ERISA, (i) that is subject to Title
IV of ERISA or (ii) that is a multiemployer plan under Title IV of ERISA. To the
knowledge of the CitiSave Consolidated Group, no "prohibited transaction," as
defined in Section 406 of ERISA or Section 4975 of the Code, has occurred that
could result in liability to CitiSave, Citizens, DGC or CSF Acquisition. No
member of the CitiSave Consolidated Group has any current or projected liability
in respect of post-employment welfare benefits for retired, current or former
employees, except as required to avoid excise tax under Section 4980B of the
Code.
(b) Except as set forth in Schedule 3.19(b) hereto, since
January 1, 1991, neither Citizens nor CitiSave has been or is a party to any
collective bargaining or other labor contract. Since January 1, 1991, there has
not been, there is not presently pending or existing, and there is not
threatened, (a) any strike, slowdown, picketing, work stoppage, or employee
grievance process, (b) any proceeding against or affecting Citizens or CitiSave
relating to the alleged violation of any legal requirement pertaining to labor
relations or employment matters, including any charge or complaint filed by an
employee or union with the National Labor Relations Board, the Equal Employment
Opportunity Commission, or any comparable governmental body, organizational
activity, or other labor or employment dispute against or affecting Citizens or
CitiSave or their premises, or (c) any application for certification of a
collective bargaining agent. No event has occurred or circumstance exists that
could provide the basis for any work stoppage or other labor dispute. There is
no lockout of any employees by Citizens and CitiSave, and no such action is
contemplated by Citizens and CitiSave. Citizens and CitiSave have complied in
all respects with all legal requirements relating to employment, equal
employment opportunity, nondiscrimination, immigration, wages, hours, benefits,
collective bargaining, the payment of social security and similar taxes, and
occupational safety and health. Neither Citizens nor CitiSave
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is liable for the payment of any compensation, damages, taxes, fines,
penalties, or other amounts, however designated, for failure to comply with any
of the foregoing legal requirements.
3.20 Contracts and Commitments; No Default.
(a) The following information relating to Citizens and
CitiSave has been made available to DGC or CSF Acquisition:
(i) the name of each financial institution with
which Citizens or CitiSave has an account or safekeeping or
custodial arrangement or correspondent relationship and the
names of all persons who are authorized with respect thereto;
(ii) all mortgages, indentures, promissory notes,
deeds of trust, loan or credit agreements or similar
instruments under which Citizens or CitiSave is indebted in an
amount greater than $50,000 for borrowed money or the price of
purchased property, accompanied by originals or certified
copies thereof and all amendments or modifications of any
thereof;
(iii) any loans, including any other credit
arrangements by Citizens, to any holder of ten percent (10%) or
more of CitiSave Common Stock, to any of Citizens' or
CitiSave's directors or executive officers, to any members of
the immediate families of any of Citizens' or CitiSave's
directors or executive officers or to any corporation, firm or
other organization in which any of such directors or executive
officers has a financial interest; and
(iv) any pending application, including any documents
or materials relating thereto, which has been filed by Citizens
or CitiSave with any federal or state regulatory authority in
order to obtain the approval of such federal or state
regulatory authority for the establishment of a new branch bank
or a new subsidiary bank.
(b) Except as set forth in Schedule 3.20 hereto, neither
Citizens nor CitiSave is a party to or bound by, nor have any bids or proposals
been made by or to Citizens or CitiSave with respect to, any written or oral,
express or implied:
(i) contract relating to the matters referred to in
paragraph (a) above;
(ii) contract with or arrangement for directors,
officers, employees, former employees, agents or consultants
with respect to salaries, bonuses, percentage compensation,
pensions, deferred compensation or retirement payments, or any
profit-sharing, stock option, stock purchase or other employee
benefit plan or arrangement;
(iii) collective bargaining or union contract or
agreement;
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(iv) contract, commitment or arrangement for the
borrowing of money or for a line of credit in an amount greater
than $50,000;
(v) contract, commitment or arrangement for the
lending of money or for the granting of a line of credit in an
amount greater than $100,000;
(vi) contract or agreement for the future purchase
by it of any materials, equipment, services, or supplies, which
is not in the ordinary course of business, and has a term of
more than twelve (12) months (including periods covered by any
option to renew by either party);
(vii) contract containing covenants purporting to
limit its freedom to compete; or
(viii) contract or commitment for the acquisition,
construction or refurbishment of any property, plant or
equipment, other than contracts and commitments for the
acquisition, construction or refurbishment of any property,
plant or equipment not in excess of $20,000 for any one
establishment or $50,000 in the aggregate.
(c) Citizens and CitiSave have performed all the
obligations required to be performed by them under any contract, agreement,
arrangement, commitment or other instrument to which they are a party
(including, without limitation, any of those described in paragraphs (a) and (b)
of this Section 3.20), and there is not, with respect to any such contract,
agreement, commitment or other instrument, (i) any notice of violation, or (ii)
any existing default (or event which, with or without due notice or lapse of
time or both, would constitute a default) on the part of Citizens or CitiSave,
which default would have a material adverse effect on the business, operations,
properties, assets or financial condition of CitiSave and Citizens considered as
a whole, and neither Citizens nor CitiSave has received notice of any such
default, nor has Citizens or CitiSave knowledge of any facts or circumstances
which would reasonably indicate that it will be or may be in default under, any
such contract, agreement, arrangement, commitment or other instrument subsequent
to the date hereof.
3.21 Disclosure.
(a) All facts material to the business, operations,
properties, assets, liabilities (contingent or otherwise) financial condition
and prospects of Citizens and CitiSave considered as a whole have been disclosed
to DGC and CSF Acquisition in writing in or pursuant to this Agreement. No
representation or warranty contained in this Agreement, and no statement
contained in any schedule or certificate, list or other writing furnished to DGC
or CSF Acquisition pursuant to the provisions hereof, contains any untrue
statement of a material fact or omits to state a material fact necessary in
order to make the statements herein or therein not misleading. No information
material to this transaction which is necessary to make the representations and
warranties herein contained not misleading has been withheld from, or has not
been delivered in writing to, DGC or CSF Acquisition.
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(b) The Schedules referenced in this Article III set
forth, among other things, exceptions to the representations and warranties in
this Article III. While CitiSave and Citizens used their best efforts to
identify in the Schedules the particular representation or warranty to which
each such exception relates, each such exception shall be deemed disclosed for
purposes of all representations and warranties in this Article III. The mere
inclusion of an exception in a Schedule shall not be deemed an admission by
CitiSave and Citizens that such exception represents a material fact, event or
circumstance.
3.22 Litigation. Except as listed on Schedule 3.22, there
are no actions, suits, proceedings, arbitrations or investigations pending or,
to the knowledge of CitiSave or Citizens, threatened, before any court, any
governmental agency or instrumentality or any arbitration panel, against or
affecting CitiSave or Citizens or any of their subsidiaries or any of the
directors, officers, or employees of the foregoing, and to the knowledge of
CitiSave or Citizens no facts or circumstances exist that would be likely to
result in the filing of any such action that would have a material adverse
effect on CitiSave and Citizens, considered as a whole. Neither CitiSave or
Citizens nor any of their subsidiaries is subject to any currently pending
judgment, order or decree entered in any lawsuit or proceeding.
3.23 Environmental Matters.
(a) To the best knowledge of each, CitiSave and Citizens
are, and since January 1, 1991 have been, in compliance with all applicable
federal, state and local laws, regulations, rules and decrees pertaining to
pollution or protection of the environment ("Environmental Laws"), including
without limitation the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. Section 9601 et seq., the Resource Conservation and
Recovery Act, 42 U.S.C. Section 6901 et seq., the Louisiana Environmental
Quality Act, La. R.S. 30: 2001 et seq., or any similar federal, state or local
law, except for such instances of non-compliance that are not reasonably likely
to have, individually or in the aggregate, a material adverse effect on the
financial condition, results of operations, business or prospects of CitiSave
and Citizens, considered as a whole.
(b) To the best knowledge of each, all property owned,
leased, operated or managed by CitiSave or Citizens, or in which CitiSave or
Citizens has any interest, including any mortgage or security interest
("Business Property"), and all businesses and operations conducted on any of the
Business Property (whether by CitiSave or Citizens, a mortgagor, or any other
person), are, and since January 1, 1991 have been, in compliance with all
applicable Environmental Laws, except for such instances of non-compliance that
are not reasonably likely to have, individually or in the aggregate, a material
adverse effect on the financial condition, results of operations, business or
prospects of CitiSave and Citizens, considered as a whole.
(c) To the best knowledge of each, there is no judicial,
administrative, arbitration or other similar proceeding pending or threatened
before any court, governmental agency, authority or other forum in which
CitiSave or Citizens or any prior owner of any Business Property has been or,
with respect to threatened matters, is threatened to be named as a party
relating to (i)
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alleged noncompliance with any applicable Environmental Law or (ii) the release
or threatened release into the environment of any Hazardous Substance (as
defined below), and relating to any of the Business Property, except for such
proceedings pending or threatened that are not reasonably likely to have,
individually or in the aggregate, a material adverse effect on the financial
condition, results of operations, business or prospects of CitiSave and
Citizens, considered as a whole, and to the knowledge of each there is no
reasonable basis for any such proceeding. The term "Hazardous Substance" means
any pollutant, contaminant, or toxic or hazardous substance, chemical, or waste
defined, listed or regulated by any Environmental Law (and specifically shall
include, but not be limited to, asbestos, polychlorinated biphenyls, and
petroleum and petroleum products).
(d) To the best knowledge of each, there has been no
release or threatened release of a Hazardous Substance in, on, under, or
affecting any of its Business Property, except such release or threatened
release that is not reasonably likely to have, individually or in the aggregate,
a material adverse effect on the financial condition, results of operations,
business or prospects of CitiSave and Citizens, considered as a whole.
3.24 Contract Termination Provisions. Except for those
contracts set forth in Schedule 3.24 hereto, all contracts between Citizens or
CitiSave and any employee thereof or independent contractor thereto shall, by
the terms of such contracts or a written addendum thereto, be terminable by DGC,
CSF Acquisition or Citizens following the Holding Company Merger, upon no more
than thirty (30) days' written notice to the employee or independent contractor.
3.25 Financial Institutions Bond. Since January 1, 1991,
CitiSave and Citizens have continuously maintained in full force and effect one
or more financial institutions bonds insuring CitiSave and Citizens against acts
of dishonesty by each of their employees. No claim has been made under any such
bond since such date and CitiSave is not aware of any fact or condition
presently existing which forms the basis of a claim under any such bond.
CitiSave and Citizens have no reason to expect that their present financial
institutions bond or bonds will not be renewed by their carrier on substantially
the same terms as those now in effect; provided, however, that CitiSave and
Citizens make no representation as to the effect of this Agreement, the Holding
Company Merger, or the Bank Merger on their present financial institutions bond
or bonds.
IV.
REPRESENTATIONS AND WARRANTIES OF DGC AND CSF ACQUISITION
DGC and CSF Acquisition represent and warrant to Citizens and
CitiSave as follows:
4.01 Corporate Organization. DGC and CSF Acquisition are
corporations duly organized, validly existing and in good standing under the
laws of the States of Mississippi and Louisiana, respectively. DGC and CSF
Acquisition, respectively, have the corporate power and
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authority to own or lease all of their properties and assets and to carry on
their businesses as they are now being conducted.
4.02 Authority; No Violation.
(a) DGC and CSF Acquisition, respectively, have full
corporate power and authority to execute and deliver this Agreement and to
consummate the transactions contemplated hereby. The respective Boards of
Directors of DGC and CSF Acquisition, or a majority thereof, and DGC as the sole
shareholder of CSF Acquisition, have duly and validly approved and adopted this
Agreement and the transactions contemplated hereby, have executed or authorized
the execution of and have authorized the delivery of this Agreement, no other
corporate proceedings on the part of DGC or CSF Acquisition are necessary or
desirable to consummate the transactions so contemplated. This Agreement has
been duly and validly executed and delivered by DGC and CSF Acquisition and
constitutes a valid and binding obligation of each of DGC and CSF Acquisition,
enforceable in accordance with its terms.
(b) Neither the execution and delivery of this Agreement
by DGC or CSF Acquisition, nor the consummation by DGC or CSF Acquisition of the
transactions contemplated hereby, nor compliance by DGC or CSF Acquisition with
any of the provisions hereof, will (i) violate any provision of the Certificate
of Incorporation or Bylaws of DGC or CSF Acquisition, (ii) to the best knowledge
of DGC and CSF Acquisition violate any statute, code, ordinance, rule,
regulation, judgment, order, writ, decree or injunction applicable to DGC, CSF
Acquisition, or any of their subsidiaries or any of their respective properties
or assets, or (iii) to the best knowledge of DGC and CSF Acquisition violate,
conflict with, result in a breach of any provisions of, constitute a default (or
an event which, with or without due 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 DGC, CSF Acquisition, or any of their subsidiaries under, any of the
terms, conditions or provisions of any note, bond, mortgage, indenture, deed of
trust, license, lease, agreement or other instrument or obligation to which DGC,
CSF Acquisition, or any of their respective subsidiaries is a party, or by which
they or any of their respective properties or assets may be bound or affected,
except for such conflicts, breaches or defaults as are set forth in Schedule
4.03 hereto, or which either individually or in the aggregate will not have a
material adverse effect on the business, operations, properties, assets or
financial condition of DGC, CSF Acquisition, or any of their respective
subsidiaries.
4.03 Consents and Approvals. Except for consents and
approvals of, or filings or registrations with, the SEC and the Federal Reserve
Board, no consents or approvals of or filings or registrations with any third
party or any public body or authority are necessary in connection with (i) the
execution and delivery by DGC and CSF Acquisition of this Agreement or (ii) the
consummation of the Holding Company Merger.
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V.
COVENANTS OF THE PARTIES
5.01 Conduct of Business. Except with the consent of the
other parties hereto, during the period from the date of this Agreement to the
Effective Date:
(a) Citizens and CitiSave will conduct their businesses
and engage in transactions only in the ordinary course and consistent with
prudent banking practice.
(b) Neither CitiSave nor Citizens shall (i) increase by
more than ten percent (10%) the compensation payable by Citizens or CitiSave to
any of its directors, officers, agents, consultants, or any of its employees
whose total compensation after such increase would be in excess of $25,000 per
annum (excluding increases in compensation resulting from the vesting of shares
of CitiSave Common Stock awarded prior to the date of this Agreement pursuant to
CitiSave's MRP or from the exercise of CitiSave Options granted prior to the
date of this Agreement), (ii) grant or pay any extraordinary bonus, percentage
compensation, service award or other like benefit to any such director, officer,
agent, consultant or employee, except as set forth in Schedule 3.11 hereto, or
(iii) make or agree to any extraordinary welfare, pension, retirement or similar
payment or arrangement for the benefit of any such director, officer, agent,
consultant or employee.
(c) Neither CitiSave nor Citizens shall sell or dispose of
material assets except in the ordinary course of business.
(d) Neither CitiSave nor Citizens shall enter into any new
capital commitments or make any capital expenditures, except commitments or
expenditures within existing operating and capital budgets or otherwise in the
ordinary course of business.
(e) Neither Citizens nor CitiSave shall authorize or issue
any additional shares of any class of its capital stock (except that shares of
CitiSave Common Stock may be issued upon the exercise of CitiSave Options which
were granted prior to the date of this Agreement) or any securities exchangeable
for or convertible into any such shares or any options or rights to acquire any
such shares, nor shall Citizens or CitiSave otherwise authorize or affect any
change in its capitalization.
(f) No dividends shall be paid by Citizens to CitiSave
except as set forth in Section 3.11(b)(iii) hereto. CitiSave shall not pay any
dividends to its stockholders, other than regular quarterly cash dividends on
the CitiSave Common Stock of $.10 per share for the first two quarters of 1997,
which may be paid at the regular times, and dividends of $.10 per share for each
additional full calendar quarter completed on or prior to the Effective Date to
be paid after completion of the full calendar quarter.
(g) CitiSave and Citizens shall not make any change in any
of their accounting policies or practices, unless required by generally accepted
accounting principles, or take any
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action which would have a material adverse effect on the Holding Company Merger
or the Bank Merger.
(h) CitiSave and Citizens shall not incur any liability
for borrowed money except extensions of credit from the Federal Home Loan Bank
of Dallas (in which no single transaction shall exceed $5,000,000) and otherwise
in the ordinary course of their banking business or place upon or permit any
lien or encumbrance upon any of their properties or assets, except liens of the
type permitted in the exceptions to Section 3.09.
5.02 Limitation on Actions. Prior to the Effective Date or
until the termination of this Agreement, CitiSave shall not, without the prior
approval of the chief executive officer of DGC,
(a) solicit or encourage inquiries or proposals with
respect to; or
(b) furnish any information relating to or participate in
any negotiations or discussions concerning, any acquisition or purchase of all
or a substantial portion of the assets of, or of a substantial equity interest
in, CitiSave or any subsidiary thereof, or any business combination with
CitiSave or any subsidiary thereof, other than as contemplated by this
Agreement; and shall instruct its officers, directors, agents and affiliates to
refrain from doing any of the above. Notwithstanding the foregoing, CitiSave,
after written notice to DGC, may furnish information in response to unsolicited
inquiries from third parties and/or engage in discussions or negotiations with
third parties if, in each case, the Board of Directors of CitiSave determines in
good faith based on the advice of legal counsel that the failure to furnish
information in response to such unsolicited inquiries and/or engage in such
discussions or negotiations is likely to be deemed to constitute a breach of
their fiduciary duties under applicable Louisiana law. If (i) CitiSave furnishes
information to or enters into discussions or negotiations with another party
prior to December 31, 1997, and (ii) CitiSave enters into a definitive agreement
with such party prior to June 30, 1998, then CitiSave shall pay DGC a fee of
$500,000.
Citizens and CitiSave agree to notify DGC by telephone within
twenty-four hours of receipt of any inquiry with respect to a proposed merger,
consolidation, assets acquisition, tender offer or other takeover transaction
with another person or receipt of a request for information from the FDIC, the
OTS, or other governmental authority with respect to a proposed acquisition of
Citizens or CitiSave by another party.
5.03 Current Information. During the period from the date
of this Agreement to the Effective Date, Citizens and CitiSave will cause one or
more of its designated representatives to confer on a regular and frequent basis
with representatives of DGC and to report the general status of its ongoing
operations. In addition, separate reporting on matters involving the loan
portfolio will occur monthly and will include, but not be limited to, (i) all
board reports, (ii) new and renewed loans (including loan applications), (iii)
delinquency reports, (iv) loan extensions, (v) to the extent possible, loan
policy exceptions, loan documentation exceptions, and financial statement
exceptions, (vi) watch list reports, (vii) all written communications concerning
problem loan accounts greater than $50,000, (viii) notification and written
details involving new loan
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products and/or loan programs, and (ix) such other information regarding
specific loans, the loan portfolio and management of the loan portfolio as may
be requested. Citizens and CitiSave will promptly notify DGC of any material
change in the normal course of their business or in the operation of their
properties and of any governmental complaints, investigations or hearings (or
communications indicating that the same may be contemplated), or the
institution or the threat of litigation involving either party, and will keep
DGC fully informed of such events.
5.04 Access to Properties and Records; Confidentiality.
(a) For purposes of allowing DGC and CSF Acquisition and
their counsel to prepare regulatory submissions, and for other relevant
purposes, Citizens and CitiSave shall permit DGC reasonable access to their
properties during normal business hours, and shall disclose and make available
to DGC and its agents all books, papers and records relating to their assets,
stock ownership, properties, operations, obligations and liabilities, including,
but not limited to: their books of account (including their general ledgers);
tax records; minute books of directors' and shareholders' meetings; charter
documents; bylaws; material contracts and agreements; filings with any
regulatory authority; litigation files; compensatory plans affecting its
employees; and any other materials pertaining to business activities, projects
or programs in which the other parties may have a reasonable interest in light
of the proposed Mergers. No member of the CitiSave Consolidated Group shall be
required to provide access to or to disclose information where such access or
disclosure would violate or prejudice the rights of any customer or other
person, would jeopardize the attorney-client privilege of the institution in
possession or control of such information, or would contravene any law, rule,
regulation, order, judgment, decree or binding agreement. The parties will make
appropriate substitute disclosure arrangements under circumstances in which the
restrictions of the preceding sentence apply.
(b) All information furnished by any member of the
CitiSave Consolidated Group pursuant hereto shall be treated as the sole
property of the party furnishing the information until consummation of the
Mergers contemplated hereby and, if such Mergers shall not occur, DGC and CSF
Acquisition shall return to CitiSave all documents or other materials
containing, reflecting or referring to such information, shall use its best
efforts to keep confidential all of such information, and shall not directly or
indirectly use such information for any competitive or other commercial purpose.
The obligation to keep such information confidential shall continue for two (2)
years from the date the proposed Mergers are abandoned and shall not apply to
(a) any information which (i) DGC and CSF Acquisition can establish by
convincing evidence was already in its possession prior to the disclosure
thereof by CitiSave or Citizens, (ii) was then generally known to the public or
set forth in public records, (iii) became known to the public through no fault
of DGC or CSF Acquisition, or (iv) was disclosed to the party receiving the
information by a third party not bound by an obligation of confidentiality, or
(b) disclosures in accordance with an order of a court of competent
jurisdiction.
5.05 Interim Financial Statements. As soon as reasonably
available, but in no event more than fifteen (15) days after the end of each
month ending after the date of this Agreement, Citizens and CitiSave will
deliver to DGC copies of their monthly financial statements.
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5.06 Regulatory Matters.
(a) CitiSave shall prepare and file a proxy statement (the
"Proxy Statement") to be mailed to CitiSave shareholders in connection with the
meeting to be called to consider the Holding Company Merger, as soon as
reasonably practicable following the date of this Agreement. The Proxy Statement
shall comply in all material respects with the Exchange Act.
(b) DGC and CitiSave will use their best efforts to
prepare all necessary documentation, to effect all necessary filings and to
obtain all necessary permits, consents, approvals and authorizations of all
third parties and governmental bodies necessary to consummate the transactions
contemplated by this Agreement, including those required by the OCC, the OTS,
the Federal Reserve Board, the FDIC, and the Louisiana Commissioner of Financial
Institutions.
(c) DGC shall cooperate in preparing the Proxy Statement.
DGC will promptly furnish all such data and information relating to it and its
subsidiaries as CitiSave may reasonably request for the purpose of including
such data and information in the Proxy Statement.
5.07 Approval of Shareholders. CitiSave will (i) take all
steps necessary to call, give notice of, convene and hold a meeting of its
shareholders as soon as practicable for the purpose of approving this Agreement
and the transactions contemplated hereby and for such other purposes as may be
necessary or desirable, (ii) recommend to its shareholders the approval of this
Agreement and the transactions contemplated hereby and such other matters as may
be submitted to its shareholders in connection with this Agreement, unless the
Board of Directors determines based on the advice of counsel that such
recommendation would violate the fiduciary duties of the Board of Directors of
CitiSave to the shareholders of CitiSave, and (iii) cooperate and consult with
DGC and CSF Acquisition with respect to each of the foregoing matters. CitiSave,
as the sole shareholder of Citizens, shall approve this Agreement and the Bank
Merger. DGC, as sole shareholder of CSF Acquisition, shall approve this
Agreement.
5.08 Further Assurances. Subject to the terms and
conditions herein provided, each of the parties hereto agrees to use its best
efforts to take, or cause to be taken, all actions and to do, or cause to be
done, all things necessary, proper or advisable under applicable laws and
regulations to consummate and make effective the transactions contemplated by
this Agreement. In case at any time after the Effective Date any further action
is necessary or desirable to carry out the purposes of this Agreement, the
proper officers and directors of each party to this Agreement shall take all
such necessary or desirable action.
5.09 Public Announcements. DGC, CSF Acquisition, Citizens
and CitiSave will cooperate with each other in the development and distribution
of all news releases and other public information disclosures with respect to
this Agreement or any of the transactions contemplated hereby. No party to this
agreement shall make any public announcement or otherwise make any disclosure
(either public or private), other than such disclosure to employees or agents of
any such party as may be required to carry out the transactions contemplated by
this
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Agreement and except as may be required by law, without the express written
consent of all parties hereto. Each party hereto shall undertake such
reasonable steps as may be required to ensure that its employees and agents
comply with the provisions of this Section 5.09.
5.10 Benefits. From and after the Effective Date, DGC will,
subject to compliance with applicable legal and regulatory requirements, provide
coverage for all Citizens employees under all DGC employee benefit plans for
which they are eligible, as soon as practicable after the Effective Date. All
prior years of service of Citizens employees will be counted for vesting and
eligibility purposes under all applicable DGC employee benefit plans to the
extent permitted by applicable law. Any Citizens employee who, immediately prior
to the Effective Date, is covered by or is a participant in a Citizens employee
benefit plan listed in Schedule 3.19 of this Agreement, shall, on the Effective
Date, be covered by or participate in the comparable DGC employee benefit plan
if a comparable plan otherwise is maintained by DGC and if the eligibility
requirements of the DGC plan are met.
5.11 Indemnification.
(a) From and after the Effective Date, CitiSave, as
survivor of the Holding Company Merger, shall indemnify, defend, and hold
harmless the former directors, officers, employees and agents of CitiSave (each
such director, officer, employee or agent referred to as a "Holding Company
Indemnified Party") against all losses, claims, damages, liabilities, judgments
(and related expenses including, but not limited to, attorney's fees and amounts
paid in settlement), joint, several or solidary, and any action or other
proceeding in respect thereof, to which the Holding Company Indemnified Parties
or any of them become subject, based upon or arising out of actions or omissions
of such persons occurring at or prior to the Effective Date (including the
transactions contemplated by this Agreement) to the full extent permitted under
Louisiana law or by CitiSave's Articles of Incorporation and Bylaws as in effect
on the date hereof, whichever is greater.
(b) From and after the Effective Date and prior to the
effective date of the Bank Merger, Citizens shall indemnify, defend, and hold
harmless the former directors, officers, employees and agents of Citizens (each
such director, officer, employee or agent referred to as a "Bank Indemnified
Party") against all losses, claims, damages, liabilities, judgments (and related
expenses including, but not limited to, attorney's fees and amounts paid in
settlement), joint, several or solidary, and any action or other proceeding in
respect thereof, to which the Bank Indemnified Parties or any of them become
subject, based upon or arising out of actions or omissions of such persons
occurring at or prior to the Effective Date (including the transactions
contemplated by this Agreement) to the full extent permitted under federal law
or by Citizens' Charter and Bylaws as in effect on the date hereof, whichever is
greater.
(c) From and after the effective date of the Bank Merger,
DGC shall cause the subsidiary bank which is the survivor of the Bank Merger to
indemnify, defend, and hold harmless each Bank Indemnified Party against all
losses, claims, damages, liabilities, judgments (and related expenses including,
but not limited to, attorney's fees and amounts paid in
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settlement), joint, several or solidary, and any action or other proceeding in
respect thereof, to which the Bank Indemnified Parties or any of them become
subject, based upon or arising out of actions or omissions of such persons
occurring at or prior to such effective date (including the transactions
contemplated by this Agreement) to the full extent permitted under Louisiana
law or by Citizens' Charter and Bylaws as in effect on the date hereof,
whichever is greater.
(d) DGC shall use its best efforts to maintain the
existing directors' and officers' liability insurance policy of CitiSave and
Citizens, respectively, covering persons who are currently covered by such
insurance for a period of five (5) years after the Effective Date on terms
generally no less favorable than those in effect on the date of this Agreement;
provided, however, that DGC may substitute therefor policies providing at least
comparable coverage containing terms and conditions no less favorable than those
in effect on the date of this Agreement.
5.12 CitiSave ESOP.
(a) Each participant in the CitiSave Employee Stock
Ownership Plan ("CitiSave ESOP") not fully vested will become fully vested in
his or her CitiSave ESOP account as of the Effective Date. Schedule 5.12 sets
forth the number of allocated and unallocated shares of CitiSave Common Stock as
of the date of this Agreement. As soon as practicable after the execution of
this Agreement, CitiSave, Citizens and DGC will cooperate to cause the CitiSave
ESOP to be amended and other action taken, in a manner reasonably acceptable to
CitiSave and DGC, to provide that the CitiSave ESOP will terminate upon the
Effective Date. Between the date hereof and the Effective Date, the existing
CitiSave ESOP indebtedness as set forth on Schedule 5.12 shall be paid in the
ordinary course of business and CitiSave or Citizens shall make the
contributions set forth on Schedule 5.12 to the CitiSave ESOP to fund such
payments. CitiSave and Citizens shall make no further contributions to the
CitiSave ESOP except as may be required to obtain a favorable determination from
the IRS. Any indebtedness of the CitiSave ESOP remaining as of the Effective
Date shall be repaid from the Trust associated with the CitiSave ESOP through
application of the Merger Price received by the CitiSave ESOP. Upon the
repayment of the CitiSave ESOP loan, the remaining funds in the Loan Suspense
Account will be allocated (to the extent permitted by Sections 401(a), 415 or
4975 of the Code and the applicable laws and regulations including, without
limitation, the applicable provisions of ERISA) to CitiSave ESOP participants
(as determined under the terms of the CitiSave ESOP). CitiSave and DGC agree
that, subject to the conditions described herein, as soon as practicable after
the Effective Date and repayment of the CitiSave ESOP loan, participants in the
CitiSave ESOP shall be entitled at their election to have the amounts in their
CitiSave ESOP accounts either distributed to them in a lump sum or rolled over
to another tax-qualified plan or individual retirement account.
(b) The actions relating to termination of the CitiSave
ESOP will be adopted conditioned upon the consummation of the Holding Company
Merger and upon receiving a favorable determination letter from the Internal
Revenue Service ("IRS") with regard to the continued qualification of the
CitiSave ESOP after any required amendments. CitiSave and DGC
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will cooperate in submitting appropriate requests for any such determination
letter to the IRS and will use their best efforts to seek the issuance of such
letter as soon as practicable following the date hereof. CitiSave and DGC will
adopt such additional amendments to the CitiSave ESOP as may be reasonably
required by the IRS as a condition to granting such determination letter,
provided that such amendments do not substantially change the terms outlined
herein or would result in a material adverse change in the business,
operations, properties, assets or financial condition of CitiSave and Citizens
considered as a whole or result in liability to DGC that is material in
relation to the aggregate Merger Price.
(c) As of and following the Effective Date, DGC shall
cause the CitiSave ESOP to be maintained for the exclusive benefit of employees
and other persons who were participants or beneficiaries therein prior to the
Effective Date and proceed with termination of the CitiSave ESOP through
distribution of its assets in accordance with its terms subject to the
amendments described herein and as otherwise may be required to comply with
applicable law or to obtain a favorable determination from the IRS as to the
continuing qualified status of the CitiSave ESOP, provided, however, that no
such distributions of the CitiSave ESOP shall occur until a favorable
termination letter has been received from the IRS. CitiSave shall cause the
CitiSave ESOP to be amended, effective as of the Effective Date, to provide that
the administrative committee thereof shall consist of three individuals
appointed by the Board of Directors of CitiSave prior to the Effective Date (the
appointment of such individuals will be subject to the prior consent of DGC, and
such individuals after their appointment may not be unreasonably removed or
changed by DGC or its affiliates for a period of two years after the Effective
Date).
5.13 CitiSave Stock Option Plans and MRP.
(a) CitiSave shall take all appropriate action to provide
for the termination of the 1996 Key Employee Stock Compensation Program and the
1996 Directors' Stock Option Plan (collectively, the "CitiSave Option Plans")
following the cancellation of all outstanding stock options and the payment of
the Option Consideration pursuant to Section 1.05(b) hereof. The termination of
the CitiSave Option Plans shall be effective as of the Effective Date.
(b) CitiSave shall take all appropriate action to provide
for the termination of the MRP following the cancellation of all outstanding MRP
Awards and the payment of the MRP Consideration pursuant to Section 1.05(c)
hereof. The termination of the MRP shall be effective as of the Effective Date,
and all shares of CitiSave Common Stock held by the MRP trust shall be cancelled
upon such termination.
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VI.
CLOSING CONDITIONS
6.01 Conditions to Each Party's Obligations under this
Agreement. The respective obligations of each party under this Agreement shall
be subject to the fulfillment at or prior to the Effective Date of the following
conditions, none of which may be waived:
(a) This Agreement and the transactions contemplated
hereby shall have been approved by the affirmative vote of the holders of at
least two-thirds (2/3) of the total votes present in person or by proxy at the
meeting of shareholders of CitiSave called pursuant to Section 5.07 hereof.
(b) None of the parties hereto shall be subject to any
order, decree or injunction of a court or agency of competent jurisdiction which
enjoins or prohibits the consummation of the Holding Company Merger.
(c) A Proxy Statement distributed to CitiSave shareholders
seeking approval of the Holding Company Merger shall have been written and
distributed in accordance with the requirements of the Exchange Act and shall
not be subject to any stop order or a threatened stop order.
(d) This Agreement and the Holding Company Merger shall
have been approved by the Federal Reserve Bank and all other applicable federal
and state authorities.
6.02 Conditions to the Obligations of DGC and CSF
Acquisition under this Agreement. The obligations of DGC and CSF Acquisition
under this Agreement shall be further subject to the satisfaction, at or prior
to the Effective Date, of the following conditions, any one or more of which may
be waived by DGC and CSF Acquisition:
(a) Each of the obligations of Citizens and CitiSave
required to be performed by them at or prior to the Closing pursuant to the
terms of this Agreement shall have been duly performed and complied with in all
material respects and the representations and warranties of Citizens and
CitiSave contained in this Agreement shall be true and correct in all material
respects as of the date of this Agreement and as of the Effective Date as though
made at and as of the Effective Date (except as otherwise contemplated by this
Agreement and except as to any representation or warranty which specifically
relates to an earlier date) and DGC and CSF Acquisition shall have received a
certificate to that effect signed by the president of Citizens and CitiSave.
(b) All action required to be taken by, or on the part of,
Citizens and CitiSave to authorize the execution, delivery and performance of
this Agreement by Citizens and CitiSave and the consummation of the transactions
contemplated hereby shall have been duly and validly taken by the Boards of
Directors of Citizens and CitiSave and DGC and CSF Acquisition shall have
received certified copies of the resolutions evidencing such authorization.
27
<PAGE> 32
(c) Any and all permits, consents, waivers, clearances,
approvals and authorizations (in addition to those referred to in Section 6.01
hereof) of all third parties and governmental bodies shall have been obtained by
Citizens and CitiSave, which are necessary in connection with the consummation
of the Holding Company Merger by CitiSave and the other transactions
contemplated hereby; provided, however, that no such approval shall have imposed
any non-standard condition or requirement which, in the reasonable opinion of
the Board of Directors of DGC, would so materially adversely affect the business
or economic benefits of the transactions contemplated by this Agreement as to
render consummation of such transactions inadvisable or unduly burdensome.
(d) No action or proceeding against CitiSave, Citizens, or
any of the Citizens Subsidiaries or against DGC or CSF Acquisition shall be
pending which seeks to prevent consummation of the transactions contemplated by
this Agreement; and no order of any court shall have been entered which
prohibits consummation of the Holding Company Merger and the transactions
contemplated by this Agreement. No approval, consent, waiver, administrative, or
regulatory action shall have included any non-standard condition or requirement
that would (i) result in a materially adverse effect on CitiSave, Citizens, the
Citizens Subsidiaries, DGC, or CSF Acquisition or (ii) so materially and
adversely affect the economic or business benefits of the Holding Company Merger
that DGC or CSF Acquisition, in the reasonable and good faith opinion of DGC or
CSF Acquisition, would not have entered into this Agreement had such conditions
or requirements been known at the date hereof.
(e) DGC and CSF Acquisition shall have received an opinion
from Messrs. Elias, Matz, Tiernan and Herrick L.L.P., special counsel to
Citizens and CitiSave, dated the date of the Closing, in form satisfactory to
DGC and CSF Acquisition to the effect that:
(i) CitiSave is a corporation duly organized and
validly existing under the laws of the State of Louisiana and
has all requisite power and authority to own, lease and operate
its properties and to carry on its business as described in the
Proxy Statement. CitiSave is a registered thrift holding
company under the Savings and Loan Holding Company Act.
Citizens is a federally chartered stock savings and loan duly
organized and validly existing under the laws of the United
States and (a) has all requisite corporate power to own, lease
and operate its properties and to carry on its business as
described in the Proxy Statement, (b) is duly authorized to
conduct a general savings and loan business under the laws of
the United States, and (c) is an insured depository institution
as defined in the Federal Deposit Insurance Act;
(ii) This Agreement has been duly and validly
authorized, executed and delivered by CitiSave and Citizens and
is valid and enforceable against each of them, except that
enforcement may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, conservatorship, receivership or
other similar laws now or hereafter in effect relating to or
affecting the enforcement of creditors' rights generally or the
rights of creditors of federal savings institutions or their
holding companies, (ii) general equitable principles, and (iii)
laws relating to the safety and soundness of insured depository
28
<PAGE> 33
institutions, and except that no opinion need be rendered as to
the effect or availability of equitable remedies or injunctive
relief (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
(iii) The authorized capital stock of CitiSave
consists of 10,000,000 shares of CitiSave Common Stock and
5,000,000 shares of CitiSave Preferred Stock, of which, as of
December 31, 1996, 962,207 shares of CitiSave Common Stock were
duly issued, outstanding, fully paid and non-assessable, and no
shares of CitiSave Preferred Stock were issued and outstanding;
(iv) The authorized capital stock of Citizens
consists of 10,000,000 shares of Citizens Common Stock and
5,000,000 shares of Citizens Preferred Stock, of which, as of
December 31, 1996, 1,000 shares of Citizens Common Stock were
issued and outstanding; all of such outstanding shares are
validly issued, fully paid and non-assessable, and owned by
CitiSave; and no shares of Citizens Preferred Stock were issued
and outstanding;
(v) The execution and delivery by CitiSave and
Citizens of this Agreement, consummation by CitiSave and
Citizens of the transactions contemplated hereby and compliance
by CitiSave and Citizens with the provisions hereof will not
violate the Articles of Incorporation or Charter of CitiSave or
Citizens or violate, result in a breach of, or constitute a
default under, any material lease, mortgage, contract,
agreement, instrument, judgment, order or decree to which
CitiSave or Citizens is a party or to which they may be subject
and which was either included as an exhibit to any filing made
by CitiSave under either the Securities Act or the Exchange Act
or which is identified in Schedules 3.12, 3.19 or 3.20 to this
Agreement; and
(vi) The Proxy Statement and each amendment or
supplement thereto, as of their respective issue dates,
complied as to form in all material respects with the
requirements of the Exchange Act and the rules and regulations
promulgated thereunder, and we do not know of any documents
required to be filed as exhibits to the Proxy Statement which
are not filed as required; it being understood that such
counsel need express no opinion as to any information regarding
DGC or CSF Acquisition or as to the financial statements, notes
to financial statements, financial tables or other financial or
statistical data and stock valuation information contained in
or omitted from the Proxy Statement.
The opinion of Elias, Matz, Tiernan & Herrick L.L.P. shall be
governed by the Legal Opinion Accord ("Accord") of the American Bar Association
Section of Business Law (1991). In addition, such opinion may be limited to
present statutes, regulations, rulings, and formal agency and judicial
interpretations and to facts as they presently exist; in rendering such opinion,
such counsel need assume no obligation to revise or supplement it should the
present laws be changed by legislative or regulatory action, judicial decision
or otherwise after such opinion is rendered. Such counsel may assume that any
agreement is the valid and binding obligation of any
29
<PAGE> 34
parties to such agreement other than CitiSave or Citizens. In giving such
opinion, such counsel may rely as to all matters of fact on certificates of
officers or directors of CitiSave and Citizens and certificates of public
officials or of CitiSave's transfer agent, provided that such certificates are
delivered to DGC and CSF Acquisition at or prior to the Closing or are attached
to the opinion. Such counsel's opinion shall be limited to matters governed by
federal law and by Louisiana law. With respect to matters involving the
application of Louisiana law, an opinion of local counsel reasonably acceptable
to DGC may be provided to DGC and CSF Acquisition. Elias, Matz, Tiernan &
Herrick L.L.P. may also indicate that it is expressing no opinion as to the
fairness of the transactions contemplated by this Agreement or of the Merger
Price to be received by the holders of CitiSave Common Stock from a financial
point view.
In addition, DGC and CSF Acquisition shall have received a
separate letter from Elias, Matz, Tiernan & Herrick L.L.P., special counsel to
CitiSave and Citizens, dated the date of the Closing, to the effect that such
counsel has participated in several conferences with representatives of the
parties of this Agreement and their respective accountants and counsel in
connection with the preparation of the Proxy Statement filed in connection with
the transactions contemplated by this Agreement and have considered the matters
required to be stated therein and the statements contained therein, and based on
the foregoing, nothing has come to the attention of such counsel that would lead
them to believe that such Proxy Statement, as amended or supplemented if it has
been amended or supplemented, at the time distributed to shareholders, 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 (except in each such case as to any
information regarding DGC or CSF Acquisition or as to the financial statements,
notes to financial statements, financial tables and other financial and
statistical data and stock valuation information included therein, as to which
no view need be expressed). In issuing such letter, such counsel may indicate
that it has not confirmed the accuracy or completeness of or otherwise verified
the information contained in the Proxy Statement, that it does not assume any
responsibility for such information, and that it is relying as to materiality as
to factual matters on certificates of officers and representatives of the
parties to this Agreement and other factual representations by CitiSave and
Citizens.
(e) There shall not have occurred any Material Adverse
Change in the financial condition, results of operations business or prospects
of CitiSave and Citizens, considered as a whole, from the date of the CitiSave
Latest Balance Sheet to the Closing.
Citizens and CitiSave will furnish DGC and CSF Acquisition with
such certificates of their officers or others and such other documents to
evidence fulfillment of the conditions set forth in this Section 6.02 as DGC and
CSF Acquisition may reasonably request.
6.03 Conditions to the Obligations of Citizens and CitiSave
under this Agreement. The obligations of Citizens and CitiSave under this
Agreement shall be further subject to the satisfaction, at or prior to the
Effective Date, of the following conditions, any one or more of which may be
waived by Citizens and CitiSave:
30
<PAGE> 35
(a) Each of the obligations of DGC or CSF Acquisition,
respectively, required to be performed by them at or prior to the Closing
pursuant to the terms of this Agreement (including Section 1.06(c) hereof) shall
have been duly performed and complied with in all material respects and the
representations and warranties of DGC or CSF Acquisition contained in this
Agreement shall be true and correct in all material respects as of the date of
this Agreement and as of the Effective Date as though made at and as of the
Effective Date (except as otherwise contemplated by this Agreement and except as
to any representation or warranty which specifically relates to an earlier date)
and Citizens and CitiSave shall have received certificates to that effect signed
by the presidents of DGC and CSF Acquisition, respectively.
(b) All action required to be taken by, or on the part of,
DGC and CSF Acquisition to authorize the execution, delivery and performance of
this Agreement by DGC and CSF Acquisition and the consummation of the
transactions contemplated hereby shall have been duly and validly taken by the
Boards of Directors of DGC and CSF Acquisition, respectively, and Citizens and
CitiSave shall have received certified copies of the resolutions evidencing such
authorization.
(c) CitiSave and Citizens shall have received from Messrs.
Watkins, Ludlam and Stennis, P.A., counsel for DGC and CSF Acquisition (or as to
certain matters involving Louisiana law from Louisiana counsel to DGC and CSF
Acquisition), an opinion, dated as of the Closing, in form and substance
satisfactory to CitiSave and Citizens, to the effect that:
(i) DGC is a corporation duly organized and validly
existing under the laws of the State of Mississippi and has all
requisite power and authority to own, lease and operate its
properties and to carry on its business as now being conducted.
DGC is qualified to do business as a foreign corporation in
Louisiana. CSF Acquisition is a corporation duly organized and
validly existing under the laws of the State of Louisiana and
has all requisite power and authority to own, lease and operate
its properties and to carry on its business as now being
conducted.
(ii) This Agreement has been duly and validly
authorized, executed and delivered by DGC and CSF Acquisition
and is valid and enforceable against each of them, except that
enforcement may be limited by (i) bankruptcy, insolvency,
reorganization, moratorium, conservatorship, receivership or
other similar laws now or hereafter in effect relating to or
affecting the enforcement of creditors' rights generally or the
rights of creditors of federal savings institutions or their
holding companies, (ii) general equitable principles, and (iii)
laws relating to the safety and soundness of insured depository
institutions, and except that no opinion need be rendered as to
the effect or availability of equitable remedies or injunctive
relief (regardless of whether such enforceability is considered
in a proceeding in equity or at law).
(iii) The execution and delivery by DGC and CSF
Acquisition of this Agreement, consummation by DGC and CSF
Acquisition of the transactions contemplated hereby and
compliance by DGC and CSF Acquisition with the provisions
hereof will not
31
<PAGE> 36
violate the Articles of Incorporation or Association of DGC and
CSF Acquisition or violate, result in a breach of, or
constitute a default under, any material lease, mortgage,
contract, agreement, instrument, judgment, order or decree to
which DGC and CSF Acquisition is a party or to which they may
be subject;
The opinion of Watkins Ludlam & Stennis, P.A. shall be governed
by the Legal Opinion Accord ("Accord") of the American Bar Association Section
of Business Law (1991). In addition, such opinion may be limited to present
statutes, regulations, rulings, and formal agency and judicial interpretations
and to facts as they presently exist; in rendering such opinion, such counsel
need assume no obligation to revise or supplement it should the present laws be
changed by legislative or regulatory action, judicial decision or otherwise
after such opinion is rendered. Such counsel may assume that any agreement is
the valid and binding obligation of any parties to such agreement other than DGC
or CSF Acquisition. In giving such opinion, such counsel may rely as to all
matters of fact on certificates of officers or directors of DGC and CSF
Acquisition and certificates of public officials, provided that such
certificates are delivered to CitiSave and Citizens at or prior to the Closing
or are attached to the opinion. Such counsel's opinion shall be limited to
matters governed by federal law and by Louisiana law. With respect to matters
involving the application of Louisiana law, an opinion of local counsel
reasonably acceptable to DGC may be provided to DGC and CSF Acquisition.
DGC and CSF Acquisition will furnish Citizens and CitiSave with
such certificates of their officers or others and such other documents to
evidence fulfillment of the conditions set forth in this Section 6.03 as
Citizens and CitiSave may reasonably request.
(d) CitiSave shall have obtained from its independent
financial advisors an opinion dated within five business days of the date of the
Proxy Statement for the shareholders' meeting to be called pursuant to Section
5.07 hereof stating that the Merger Price to be received by the holders of
CitiSave Common Stock is fair from a financial point of view.
VII.
CLOSING
7.01 Time and Place. Subject to the provisions of Articles
VI and VIII hereof, the Closing of the transactions contemplated hereby shall
take place at the offices of DGC, One Deposit Guaranty Plaza, 210 East Capitol
Street, Jackson, Mississippi 39205 at 9:00 A.M., local time, on the last
business day of the month after all of the conditions contained in Section
6.01(a) and Section 6.01(d) are satisfied or at such other place, at such other
time, or on such other date as DGC, CSF Acquisition, CitiSave and Citizens may
mutually agree upon for the Closing to take place.
7.02 Deliveries at the Closing. Subject to the provisions
of Articles VI and VIII hereof, at the Closing there shall be delivered to DGC,
CSF Acquisition, CitiSave and Citizens the
32
<PAGE> 37
opinions, certificates, and other documents and instruments required to be
delivered under Article VI hereof.
VIII.
TERMINATION
8.01 Termination. This Agreement may be terminated at any
time prior to the Effective Date, whether before or after approval of the
Holding Company Merger by the shareholders of CitiSave:
(a) by mutual written consent of the parties, properly
authorized by their respective Boards of Directors;
(b) by DGC and CSF Acquisition, if at the time of such
termination there shall have been any Material Adverse Change in the financial
condition, results of operations, business or prospects of CitiSave and
Citizens, considered as a whole, from the date of the CitiSave Latest Balance
Sheet;
(c) by any party hereto, if a United States District Court
shall rule upon application of the Department of Justice after a full trial on
the merits or a decision on the merits based on a stipulation of facts that the
transactions contemplated by this Agreement violate the antitrust laws of the
United States;
(d) by any party hereto, if at the meeting of shareholders
to be called by CitiSave pursuant to this Agreement, this Agreement shall not
have been approved by the affirmative vote of the holders of at least two-thirds
(2/3) of the total votes present in person or by proxy at the meeting of
shareholders of CitiSave called pursuant to Section 5.07 hereof;
(e) by DGC and CSF Acquisition, in the event there are
dissenting shareholders who hold more than fifteen percent (15%) of the shares
of CitiSave Common Stock; or
(f) by any party hereto if the Closing shall not have
occurred by December 31, 1997.
8.02 Effect of Termination. In the event of termination of
this Agreement by either DGC, CSF Acquisition, CitiSave or Citizens as provided
above, this Agreement shall forthwith become void and except as provided in
Section 5.04 and Section 9.01 hereof there shall be no further liability on the
part of Citizens, CitiSave, DGC, CSF Acquisition, or their respective officers
or directors.
33
<PAGE> 38
IX.
MISCELLANEOUS
9.01 Expenses. All out-of-pocket costs and expenses
incurred in connection with the Mergers (including, but not limited to, counsel
fees) shall be paid by the party incurring such costs and expenses.
9.02 Notices. All notices or other communications hereunder
shall be in writing and shall be deemed given if delivered personally or mailed
by prepaid registered or certified first class mail (return receipt requested)
or by facsimile, cable, telegram or telex addressed as follows:
(a) If to DGC or CSF Acquisition, to:
Deposit Guaranty Corp.
One Deposit Guaranty Plaza
210 East Capitol Street
P.0. Box 730
Jackson, Mississippi 39205
Attention: Thomas M. Hontzas
Fax Number: (601) 354-8288
Copy to:
Watkins Ludlam & Stennis, P.A.
633 North State Street (39202)
Post Office Box 427
Jackson, Mississippi 39205-0427
Attention: L. Keith Parsons, Esq.
Fax Number: (601) 949-4804
(b) If to Citizens or CitiSave, to:
CitiSave Financial Corporation
665 Florida Street
Baton Rouge, Louisiana 70801
(504) 383-4102
Attention: Lee F. Nettles
Fax Number: (504) 382-5511
34
<PAGE> 39
Copy to:
Elias, Matz, Tiernan and Herrick L.L.P.
Suite 1200
734 15th Street, N.W.
Washington, D.C. 20005
(202) 347-0300
Attention: Gerald F. Heupel, Jr., Esq.
Fax Number: (202) 347-2172
or such other address as shall be furnished in writing by any party, and any
such notice or communication shall be deemed to have been given as of the date
so mailed.
9.03 Parties in Interest. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto, and their respective
successors and assigns; provided, however, that neither this Agreement nor any
of the rights, interests or obligations hereunder shall be assigned by any party
hereto without the prior written consent of the other parties, and that nothing
in this Agreement is intended to confer, expressly or by implication, upon any
other person any rights or remedies under or by reason of this Agreement.
9.04 Amendment, Extension and Waiver. Subject to applicable
law, at any time prior to the consummation of the Mergers, whether before or
after approval thereof by the CitiSave shareholders, DGC, CSF Acquisition,
CitiSave and Citizens may, by action taken by their respective Boards of
Directors (i) amend this Agreement, (ii) extend the time for the performance of
any of the obligations or other acts of the other parties hereto, (iii) waive
any inaccuracies in the representations and warranties contained herein or in
any document delivered pursuant hereto, or (iv) waive compliance with any of the
agreements or conditions contained in Articles V and VI (other than the
conditions set forth in Section 6.01 hereof); provided, however, that after any
approval of the Holding Company Merger by the shareholders of CitiSave, there
may not be, without further approval of such shareholders, any amendment,
extension or waiver of this Agreement which changes the amount or form of
consideration to be delivered to shareholders of CitiSave. This Agreement may
not be amended except by an instrument in writing signed on behalf of each of
the parties hereto. Any agreement on the part of a party hereto to any extension
or waiver shall be valid only if set forth in an instrument in writing signed on
behalf of such party, but such waiver or failure to insist on strict compliance
with such obligation, covenant, agreement or condition shall not operate as a
waiver of, or estoppel with respect to, any subsequent or other failure.
9.05 Complete Agreement. This Agreement, including the
documents and other writings referred to herein or delivered pursuant hereto,
contains the entire agreement and understanding of the parties with respect to
its subject matter. There are no restrictions, agreements, promises, warranties,
covenants or undertakings other than those expressly set forth herein or
therein. This Agreement supersedes all prior agreements and understandings
between the parties, both written and oral, with respect to its subject matter.
35
<PAGE> 40
9.06 Non-Survival of Representations and Warranties. None
of the representations and warranties in this Agreement shall survive the
Effective Date, or the earlier termination of this Agreement pursuant to Article
VIII hereof. Each party hereby agrees that its sole right and remedy with
respect to any breach of a representation or a warranty by the other party shall
be to not consummate the transactions described herein if such breach results in
the nonsatisfaction of a condition set forth in Section 6.02(a) or 6.03(a)
hereof, provided, however, that the foregoing shall not be deemed a waiver of
any claim for intentional misrepresentation or fraud.
9.07 Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement
and each of which shall be deemed an original.
9.08 Governing Law. This Agreement shall be governed by the
laws of the State of Louisiana, without giving effect to the principles of
conflicts of laws thereof, except to the extent that the effectiveness of the
Mergers may be subject to specific requirements of federal law.
9.09 Headings. The Article and Section headings contained
in this Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Agreement.
36
<PAGE> 41
IN WITNESS WHEREOF, the Boards of Directors of DGC, CSF
Acquisition, CitiSave, and Citizens have caused this Agreement to be executed by
their duly authorized officers, all as of the day and year first above written.
<TABLE>
<S> <C>
Attest: DEPOSIT GUARANTY CORP.
/s/ J. Clifford Harrison By /s/ Howard L. McMillan
- ----------------------------------------- ---------------------------------------------
J. Clifford Harrison, Secretary Howard L. McMillan, Jr., President
Attest: CSF ACQUISITION CORP.
/s/ J. Clifford Harrison By /s/ Thomas M. Hontzas
- ---------------------------------------- ---------------------------------------------
J. Clifford Harrison, Secretary Thomas M. Hontzas, President
Attest: CITISAVE FINANCIAL CORPORATION
/s/ Mary Anne Chiasson By /s/ Lee F. Nettles
- ------------------------------------- ---------------------------------------------
Mary Anne Chiasson, Secretary Lee F. Nettles, President
Attest: CITIZENS SAVINGS ASSOCIATION, F.A.
/s/ Mary Anne Chiasson By /s/ Lee F. Nettles
- ------------------------------------- ---------------------------------------------
Mary Anne Chiasson, Secretary Lee F. Nettles, President
</TABLE>
<PAGE> 42
Exhibit A
CERTIFICATE OF MERGER
OF
CSF ACQUISITION CORP.
WITH AND INTO
CITISAVE FINANCIAL CORPORATION
(Filed Pursuant to Section 112F of
the Louisiana Business Corporation Law)
The undersigned corporation, acting pursuant to Section 112F of the
Louisiana Business Corporation Law, hereby certifies as follows:
First: That the name and state of incorporation of each of the
corporations that are parties to the merger to which this Certificate relates
(the "Constituent Corporations") are as follows:
Name State of Incorporation
---- ----------------------
[S] [C]
CSF Acquisition Corp. Louisiana
CitiSave Financial Corporation Louisiana
Second: That an Agreement and Plan of Merger between the Constituent
Corporations (the "Agreement") providing for the merger of CSF Acquisition
Corp. with and into CitiSave Financial Corporation (the "Merger") has been
approved, adopted, certified, executed and acknowledged by each of the
Constituent Corporations in accordance with the requirements of Section 112 of
the Louisiana Business Corporation Law.
Third: That CitiSave Financial Corporation will survive the Merger
and continue to operate under its current name (the "Surviving Corporation").
Fourth: That the Articles of Incorporation of the Surviving
Corporation, as in effect on the date hereof, shall continue in full force and
effect as the Articles of Incorporation of the Surviving Corporation until
altered, amended or repealed as provided therein or by law.
Fifth: That a copy of the executed Agreement is on file at the
principal place of business of the Surviving Corporation, located at 665
Florida Street, Baton Rouge, Louisiana 70801.
Sixth: That a copy of the Agreement will be furnished by the
Surviving Corporation, on request and without cost, to any shareholder of
either Constituent Corporation.
<PAGE> 43
Seventh: This Certificate of Merger shall be effective on __________,
1997 upon recordation by the Secretary of State of Louisiana.
This Certificate of Merger is executed by the Surviving Corporation,
acting through its President, this _____ day of __________, 1997.
CitiSave Financial Corporation
By:
---------------------------------
Its: President
<PAGE> 44
ACKNOWLEDGMENT
State of Louisiana )
)
Parish of East Baton Rouge)
BEFORE ME, the undersigned authority, personally came and appeared
______________ who, being duly sworn, declared and acknowledged before me that
he is the President of CitiSave Financial Corporation and that in such capacity
he was duly authorized to and did execute the foregoing Certificate of Merger
on behalf of such corporation, for the purposes therein expressed and as his
and such corporation's free act and deed.
----------------------------------
, Appearer
--------------
Sworn to and subscribed before me
this day of , 1997
---- -------------
- -------------------------------------------
NOTARY PUBLIC
<PAGE> 1
Exhibit 99
Press Release, dated March 26, 1997
<PAGE> 2
NEWSRELEASE
DEPOSIT GUARANTY CORP.
CONTACT: Pam Kloha March 26, 1997
Assistant vice president
(601) 968-4759 FOR IMMEDIATE RELEASE
DEPOSIT GUARANTY CORP., CITISAVE FINANCIAL CORPORATION
SIGN DEFINITIVE AGREEMENT
JACKSON, Miss. - (NYSE:DEP) -- Deposit Guaranty Corp. and CitiSave Financial
Corporation of Baton Rouge, La., jointly announced today that they have signed a
definitive agreement for Deposit Guaranty Corp. to acquire CitiSave Financial
Corporation. This announcement was made by Deposit Guaranty Chairman and CEO
E.B. Robinson, Jr. and CitiSave Chairman, President and CEO Lee F. Nettles.
CitiSave Financial Corporation is the parent company of Citizens Savings
Association, F.A., which has six offices in Baton Rouge and $75 million in
assets, including $45.2 million in loans. The company will become a part of
Deposit Guaranty's existing south Louisiana banking operation later this year.
Under the agreement, Deposit Guaranty Corp. will purchase CitiSave Financial
Corporation for $21.4 million in cash, or $20.50 per share.
The acquisition of Citizens Savings will continue Deposit Guaranty's expansion
in the Baton Rouge market. Deposit Guaranty has recently completed acquisitions
in Denham Springs and Gonzales and has a pending acquisition with Bank of
Commerce in Baton Rouge.
--more--
<PAGE> 3
DEPOSIT GUARANTY, CITISAVE FINANCIAL SIGN DEFINITIVE AGREEMENT -- PAGE 2
"Citizens Savings has been a very strong and well-respected financial
institution," Robinson said. "This acquisition will give us a solid customer
base, as well as strategic branch locations that will allow us to better serve
the Baton Rouge market."
Nettles said becoming part of the Deposit Guaranty organization will give
Citizens customers access to valuable resources.
"Deposit Guaranty is a strong, highly regarded financial institution," Nettles
said. "We look forward to being able to offer our customers an expanded line of
financial services, including an enhanced array of loan products as a result of
this merger."
Deposit Guaranty Corp. is a multibank holding company based in Jackson,
Mississippi, with total assets of $6.4 billion as of Dec. 31, 1996. Deposit
Guaranty Corp. owns Deposit Guaranty National Bank in Mississippi; Deposit
Guaranty National Bank of Louisiana; Commercial National Bank in north
Louisiana; and Merchants National Bank in Fort Smith, Ark. Deposit Guaranty also
has pending acquisitions with First Capital Bancorp in Monroe, La., and NBC
Financial Corporation in Baton Rouge.
CitiSave Financial Corporation is traded on the American Stock Exchange under
the symbol "CZF."
###
