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Pennsylvania | 6021 | 23-2951943 | ||
(State or other jurisdiction of incorporation or organization) | (Primary Standard Industrial Classification Code Number) | (I.R.S. Employer Identification No.) |
Wellsboro, Pennsylvania 16901
(570) 724-3411
(Address, Including Zip Code, and Telephone Number, Including
Area Code, of Registrant’s Principal Executive Offices)
Chairman, President and Chief Executive Officer
Citizens & Northern Corporation
90-92 Main Street
Wellsboro, Pennsylvania 16901
(570) 724-3411
(Name, Address, Including Zip Code, and Telephone
Number, Including Area Code, of Agent for Service)
Charles J. Ferry, Esquire Carl D. Lundblad, Esquire Rhoads & Sinon LLP One South Market Square, 12th Floor Harrisburg, Pennsylvania 17108-1146 (717) 233-5731 | Charles C. Cohen, Esquire Michael D. Winterhalter, Esquire Cohen & Grigsby 11 Stanwix Street, 15th Floor Pittsburgh, PA 15222-1319 (412) 297-4900 |
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10 North Main Street
Coudersport, PA 16915
Sincerely, | ||||
/s/ Charles H. Updegraff, Jr. | ||||
Charles H. Updegraff, Jr. Chairman, President & Chief Executive Officer | ||||
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Citizens & Northern Corporation
90-92 Main Street
Wellsboro, PA 16901
(570) 724-3411
Citizens Bancorp, Inc.
10 North Main Street
Coudersport, PA 16915
(814) 274-1929
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10 North Main Street
Coudersport, PA 16915
By Order of the Board of Directors | ||||
/s/ George M. Raup | ||||
March 8, 2007
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Annexes | ||||||||
Annex A Agreement and Plan of Merger | A-1 | |||||||
Exhibit 1 Form of Bank Plan of Merger | A1-1 | |||||||
Exhibit 2 Form of Affiliates Letter | A2-1 | |||||||
Exhibit 3 Form of Tax Opinion | A3-1 | |||||||
Exhibit 4 Form of Opinion of Citizens & Northern Counsel | A4-1 | |||||||
Exhibit 5 Form of Opinion of Citizens Counsel | A5-1 | |||||||
Exhibit 6 Index Group | A6-1 | |||||||
Annex B Fairness Opinion of Ryan Beck & Co., Inc. | B-1 | |||||||
Annex C Statutory Provisions Relating to Rights of Dissenting Shareholders | C-1 | |||||||
EX-23.1 | ||||||||
EX-23.2 |
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Q: | What am I being asked to vote on? |
A: | You are being asked to vote on the merger agreement between Citizens Bancorp, Inc. and Citizens & Northern Corporation, providing for the merger of Citizens with and into Citizens & Northern. |
Q: | Why are Citizens and Citizens & Northern proposing to merge? |
A: | The board of directors of each of Citizens and Citizens & Northern believes that a combination of the two companies is in the best interests of its respective company. From Citizens’ perspective, Citizens’ board of directors believes that the transaction presents a more favorable opportunity for Citizens to maximize value for its shareholders than Citizens continuing to operate on a stand-alone basis. See “The Transaction — Reasons for the Transaction: Citizens’ Board of Directors” beginning on page 28 and “The Transaction — Reasons for the Transaction: Citizens & Northern’s Board of Directors” beginning on page 40. |
Q: | How does the Citizens board of directors recommend I vote on the proposal? |
A: | The Citizens board of directors unanimously recommends that you vote “FOR” the proposal to approve the merger agreement. |
Q: | What will I receive in the transaction? |
A: | If the merger agreement is approved and the merger is subsequently completed, you may elect to receive, for each share of Citizens common stock that you own, either 1.297 shares of Citizens & Northern common stock or $28.57 in cash. You may elect to receive all cash, all Citizens & Northern common stock, or a combination of cash and Citizens & Northern common stock for your shares of Citizens common stock, subject to allocation procedures designed to ensure 50% of the total outstanding shares of Citizens common stock is converted into the right to receive Citizens & Northern common stock and 50% is converted into the right to receive cash. |
Q: | What are the tax consequences of the transaction to me? |
A: | For United States federal income tax purposes, you will recognize income and/or gain equal to the lesser of: (1) the amount of cash you receive (including cash received for fractional shares); or (2) the amount of gain you realize. The amount of gain you realize equals the amount of cash you receive plus the fair market value of any Citizens & Northern common stock you receive less your adjusted basis in the shares of Citizens common stock that you surrender in the exchange. Your income or gain per share may vary if you acquired your Citizens common stock in more than one transaction. |
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No gain or loss will be recognized on the Citizens & Northern common stock that you receive. Your basis and holding periods in the Citizens & Northern common stock may vary per share depending upon if you acquired your Citizens common stock in more than one transaction. Due to the potential varying tax recognition, basis and holding period consequences which will be governed by your individual consequences, we urge you to consult with your tax advisor to fully understand the tax consequences to you. Additionally, the generalizations set forth above may not apply to all Citizens shareholders. |
Q: | How do I vote? |
A: | After you have carefully read this document, indicate on your proxy card how you want your shares to be voted, then sign, date and mail it in the enclosed postage-paid envelope as soon as possible so that your shares may be represented and voted at the Citizens special meeting. If you are a record owner of shares of Citizens common stock on the record date for the special meeting, you may attend Citizens’ special meeting in person and vote, whether or not you have signed and mailed your proxy card. |
If you sign and send in your proxy card and do not indicate how you want to vote, your proxy card will be counted as a vote in favor of the merger agreement. |
Q; | If my shares are held in “street name” by my broker, will my broker vote my shares for me? |
A: | Maybe.Your broker will vote your shares only if you provide instructions on how to vote. You should follow the directions provided by your broker. |
Q: | Can I change my vote after I have mailed my signed proxy card? |
A: | Yes. There are three ways for you to revoke your proxy and change your vote. First, you may send to the Secretary of Citizens a later-dated, signed proxy card before the Citizens special meeting. Second, you may attend Citizens’ special meeting in person and vote. Third, you may revoke any proxy by written notice to the Secretary of Citizens prior to Citizens’ special meeting. If you have instructed a broker to vote your shares, you must follow directions received from your broker to change your vote. |
Q: | Do I have dissenters rights of appraisal in connection with the merger? |
A: | Yes. Under Pennsylvania law, Citizens shareholders have the right to dissent from the merger and receive a payment in cash for the value of their shares of Citizens common stock, as determined by an appraisal process. This value may be less than the value of the consideration you would receive in the merger if you do not dissent. To perfect your dissenter’s rights, you must precisely follow the required statutory procedures. See “The Transaction-Rights of Dissenting Shareholders” at page 44 and the information attached at Annex C. |
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Q. | Should I send in my stock certificates now? | |
A. | No. You should not send in your stock certificates at this time. Approximately two weeks after the date of this document, you will receive a form of election on which you will indicate the form of merger consideration you wish to receive for your Citizens common stock.Please retain this document in connection with making your election to receive cash, Citizens & Northern common stock, or a combination of cash and Citizens & Northern common stock for your shares of Citizens common stock. You will have until the election date, which is two business days before the closing of the transaction, to return the completed and signed form of election, together with the certificates that represent your shares of Citizens common stock. | |
Q. | When do you expect to complete the transaction? | |
A. | We are working towards completing the transaction as quickly as possible and currently expect that the merger will be completed during the second quarter of 2007. In addition to the approval of Citizens shareholders, we must also obtain certain bank regulatory approvals. We expect to receive all necessary approvals no later than April 15, 2007. | |
Q. | Why haven’t you included financial information about Citizens in this document? | |
A. | As a Citizens shareholder, Citizens distributes annual and summary unaudited quarterly financial information to you. In considering the proposed merger, Citizens believes you need information concerning Citizens & Northern more than information concerning Citizens. Due to the size of Citizens & Northern relative to the size of Citizens, financial information about Citizens is not required to be provided in this document by any applicable law or regulation. However, if you would like to review copies of Citizens’ most recent quarterly and annual reports to shareholders, you may obtain them from Citizens. See “Where You Can Find More Information” on page 75. | |
Q. | Whom should I call with questions or to obtain additional copies of this document? | |
A. | You should call either of the following: |
Citizens & Northern Corporation | Citizens Bancorp, Inc. | |
90-92 Main Street | 10 North Main Street | |
Wellsboro, PA 16901 | Coudersport, PA 16915 | |
Attn: Jessica Brown, Secretary | Attn: Nancy S. Lent, Assistant Secretary | |
Phone No.: (570) 724-3411 | Phone No.: (814) 274-1929 |
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• | $28.57 in cash; or | ||
• | 1.297 shares of Citizens & Northern common stock. |
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• | the approval of the merger agreement by Citizens shareholders; | ||
• | the accuracy of the representations and warranties made in the merger agreement; | ||
• | the performance of obligations by Citizens & Northern and Citizens under the merger agreement; | ||
• | the receipt of required governmental approvals (including from banking and federal and state securities regulators) and the expiration or termination of all applicable statutory waiting periods relating to the transaction; | ||
• | the absence of any injunction or other order by any court or other governmental entity which would prohibit or prevent the transaction; and | ||
• | receipt by Citizens & Northern and Citizens of a tax opinion of Rhoads & Sinon LLP, counsel to Citizens & Northern, based on facts, assumptions and representations set forth in the opinion, to the effect that the transaction constitutes a tax-free reorganization under Section 368(a) of the Internal Revenue Code. |
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10 North Main Street
Coudersport, PA 16915
(814) 274-9150
90-92 Main Street
Wellsboro, PA 16901
(570) 724-3411
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Citizens Common Stock | Citizens & Northern Common Stock | |||||||||||||||||||||||
Price | Dividend | Price | Dividend | |||||||||||||||||||||
High | Low | Declared | High | Low | Declared | |||||||||||||||||||
2005 | ||||||||||||||||||||||||
First Quarter | $ | 21.50 | $ | 21.00 | $ | 0.19 | $ | 32.25 | $ | 26.50 | $ | 0.23 | ||||||||||||
Second Quarter | $ | 22.00 | $ | 21.00 | $ | 0.19 | $ | 33.85 | $ | 25.80 | $ | 0.23 | ||||||||||||
Third Quarter | $ | 21.75 | $ | 21.00 | $ | 0.19 | $ | 37.51 | $ | 25.22 | $ | 0.23 | ||||||||||||
Fourth Quarter | $ | 21.50 | $ | 21.00 | $ | 0.20 | $ | 29.46 | $ | 24.49 | $ | 0.24 | ||||||||||||
2006 | ||||||||||||||||||||||||
First Quarter | $ | 21.25 | $ | 21.05 | $ | 0.20 | $ | 29.93 | $ | 23.76 | $ | 0.24 | ||||||||||||
Second Quarter | $ | 21.75 | $ | 20.81 | $ | 0.20 | $ | 25.72 | $ | 20.11 | $ | 0.24 | ||||||||||||
Third Quarter | $ | 21.52 | $ | 20.28 | $ | 0.20 | $ | 24.12 | $ | 19.80 | $ | 0.24 | ||||||||||||
Fourth Quarter | $ | 27.75 | $ | 20.10 | $ | 0.22 | $ | 22.77 | $ | 21.29 | $ | 0.24 | ||||||||||||
2007 First Quarter | $ | 27.85 | $ | 27.50 | $ | 0.22 | $ | 23.44 | $ | 21.62 | — | |||||||||||||
(through March 5) |
December 20, 2006 | February 28, 2007 | |||||||||||||||||||||||
High | Low | Closing | High | Low | Closing | |||||||||||||||||||
Citizens Common Stock | $ | 20.45 | $ | 20.25 | $ | 20.45 | $ | 27.60 | $ | 27.60 | $ | 27.60 |
December 20, 2006 | March 5, 2007 | |||||||||||||||||||||||
High | Low | Closing | High | Low | Closing | |||||||||||||||||||
Citizen & Northern Common Stock | $ | 22.17 | $ | 21.85 | $ | 21.85 | $ | 21.99 | $ | 21.98 | $ | 21.989 |
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Citizens | ||||||||||||||||
Citizens & | Equivalent | Equivalent | ||||||||||||||
Northern | Market Value | Market Value | ||||||||||||||
Historical | Historical (1) | For Stock Election (2) | For Cash Election | |||||||||||||
December 20, 2006 | $ | 21.85 | $ | 20.45 | $ | 28.34 | $ | 28.57 | ||||||||
March 5, 2007 | $ | 21.98 | $ | 27.60 | $ | 28.51 | $ | 28.57 |
(1) | There were no trades in Citizens common stock reported on the OTC Bulletin Board for March 5, 2007. The price shown for that date is the closing sales price on February 28, 2007, the latest practicable trading day before printing this document on which trades in Citizens common stock are reported. | |
(2) | The equivalent market value for a stock election was calculated based on the exchange ratio of 1.297. |
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As of or for the Year Ended December 31 | ||||||||||||||||||||
INCOME STATEMENT (In Thousands) | 2006 | 2005 | 2004 | 2003 | 2002 | |||||||||||||||
Interest income | $ | 64,462 | $ | 61,108 | $ | 57,922 | $ | 55,223 | $ | 57,285 | ||||||||||
Interest expense | 30,774 | 25,687 | 22,606 | 23,537 | 26,315 | |||||||||||||||
Net interest income | 33,688 | 35,421 | 35,316 | 31,686 | 30,970 | |||||||||||||||
Provision for loan losses | 672 | 2,026 | 1,400 | 1,100 | 940 | |||||||||||||||
Net interest income after provision for loan losses | 33,016 | 33,395 | 33,916 | 30,586 | 30,030 | |||||||||||||||
Noninterest income excluding securities gains and gains from sale of credit card loans | 7,970 | 7,636 | 6,922 | 6,595 | 6,624 | |||||||||||||||
Securities gains | 5,046 | 1,802 | 2,877 | 4,799 | 2,888 | |||||||||||||||
Gain from sale of credit card loans | 340 | 1,906 | — | — | — | |||||||||||||||
Noninterest expense | 31,614 | 28,962 | 26,001 | 22,114 | 20,849 | |||||||||||||||
Income before income tax provision | 14,758 | 15,777 | 17,714 | 19,866 | 18,693 | |||||||||||||||
Income tax provision | 2,772 | 2,793 | 2,851 | 3,609 | 3,734 | |||||||||||||||
Net income | $ | 11,986 | $ | 12,984 | $ | 14,863 | $ | 16,257 | $ | 14,959 | ||||||||||
PER COMMON SHARE: (1) | ||||||||||||||||||||
Basic earnings per share | $ | 1.44 | $ | 1.55 | $ | 1.78 | $ | 1.95 | $ | 1.79 | ||||||||||
Diluted earnings per share | $ | 1.43 | $ | 1.54 | $ | 1.77 | $ | 1.94 | $ | 1.79 | ||||||||||
Cash dividends declared per share | $ | 0.96 | $ | 0.93 | $ | 0.89 | $ | 0.85 | $ | 0.77 | ||||||||||
Stock dividend | 1 | % | 1 | % | 1 | % | 1 | % | 1 | % | ||||||||||
Book value at period-end | $ | 15.66 | $ | 15.74 | $ | 15.76 | $ | 15.03 | $ | 13.90 | ||||||||||
Tangible book value at period-end | $ | 15.29 | $ | 15.33 | $ | 15.76 | $ | 15.03 | $ | 13.90 | ||||||||||
Weighted average common shares outstanding — basic | 8,339,104 | 8,375,062 | 8,349,994 | 8,334,882 | 8,334,380 | |||||||||||||||
Weighted average common shares outstanding — diluted | 8,364,778 | 8,433,847 | 8,398,520 | 8,383,597 | 8,356,268 | |||||||||||||||
END OF PERIOD BALANCES (In Thousands) | ||||||||||||||||||||
Securities available-for-sale | $ | 356,665 | $ | 427,298 | $ | 475,085 | $ | 483,032 | $ | 512,175 | ||||||||||
Securities held-to-maturity | 414 | 422 | 433 | 560 | 707 | |||||||||||||||
Gross loans (2) | 687,501 | 653,299 | 579,613 | 524,897 | 451,145 | |||||||||||||||
Allowance for loan losses | 8,201 | 8,361 | 6,787 | 6,097 | 5,789 | |||||||||||||||
Total assets | 1,127,368 | 1,162,954 | 1,123,002 | 1,066,901 | 1,018,768 | |||||||||||||||
Deposits | 760,349 | 757,065 | 676,545 | 658,065 | 640,304 | |||||||||||||||
Borrowings | 228,440 | 266,939 | 305,005 | 272,953 | 251,849 | |||||||||||||||
Stockholders’ equity | 129,888 | 131,968 | 131,585 | 125,343 | 115,837 | |||||||||||||||
AVERAGE BALANCES (In Thousands) | ||||||||||||||||||||
Total assets | 1,134,689 | 1,144,619 | 1,114,041 | 1,034,720 | 943,001 | |||||||||||||||
Earning assets | 1,055,103 | 1,065,189 | 1,036,535 | 959,556 | 881,434 | |||||||||||||||
Gross loans (2) | 662,714 | 618,344 | 551,352 | 485,150 | 410,670 | |||||||||||||||
Deposits | 750,982 | 702,404 | 669,307 | 651,026 | 613,392 | |||||||||||||||
Stockholders’ equity | 131,082 | 132,465 | 128,374 | 122,271 | 107,595 | |||||||||||||||
KEY RATIOS | ||||||||||||||||||||
Return on average assets | 1.06 | % | 1.13 | % | 1.33 | % | 1.57 | % | 1.59 | % | ||||||||||
Return on average equity | 9.14 | % | 9.80 | % | 11.58 | % | 13.30 | % | 13.90 | % | ||||||||||
Average equity to average assets | 11.55 | % | 11.57 | % | 11.52 | % | 11.82 | % | 11.41 | % | ||||||||||
Net interest margin (3) | 3.42 | % | 3.62 | % | 3.78 | % | 3.70 | % | 3.85 | % | ||||||||||
Efficiency | 75.89 | % | 67.26 | % | 61.56 | % | 57.77 | % | 55.46 | % | ||||||||||
Cash dividends as a % of diluted earnings per share | 67.13 | % | 60.39 | % | 50.28 | % | 43.81 | % | 43.02 | % | ||||||||||
Tier 1 leverage | 11.22 | % | 10.62 | % | 10.69 | % | 10.80 | % | 10.53 | % | ||||||||||
Tier 1 risk-based capital | 16.51 | % | 16.52 | % | 17.17 | % | 18.67 | % | 18.41 | % | ||||||||||
Total risk-based capital | 17.97 | % | 18.19 | % | 18.89 | % | 20.61 | % | 20.09 | % |
(1) | All share and per share data has been restated to give retroactive effect to stock dividends and splits. | |
(2) | Includes loans held for sale. | |
(3) | Rates of return on tax-exempt securities and loans are calculated on a fully-taxable equivalent basis. | |
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At December 31, 2006 | ||||
Book value per share: | ||||
Citizens historical | $ | 18.42 | ||
Citizens & Northern historical | 15.66 | |||
Combined Company | 16.12 | |||
Citizens pro forma equivalent | 20.91 | |||
Tangible book value per share: | ||||
Citizens historical | $ | 18.42 | ||
Citizens & Northern historical | 15.29 | |||
Combined Company | 14.70 | |||
Citizens pro forma equivalent | 19.07 |
Year Ended | ||||
December 31, 2006 | ||||
Cash dividends declared per share: | ||||
Citizens historical | $ | 0.82 | ||
Citizens & Northern historical | 0.96 | |||
Combined Company | 0.96 | |||
Citizens pro forma equivalent | 1.25 | |||
Basic net income (loss) per share: | ||||
Citizens historical | $ | 1.41 | ||
Citizens & Northern historical | 1.44 | |||
Combined Company | 1.40 | |||
Citizens pro forma equivalent | 1.82 | |||
Diluted net income (loss) per share: | ||||
Citizens historical | $ | 1.41 | ||
Citizens & Northern historical | 1.43 | |||
Combined Company | 1.39 | |||
Citizens pro forma equivalent | 1.80 |
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• | customers may not want or need Citizens & Northern’s products or services; | ||
• | borrowers may not be able to repay their loans; | ||
• | the value of the collateral securing Citizens & Northern’s loans to borrowers may decline; and | ||
• | the quality of Citizens & Northern’s loan portfolio may decline. |
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• | regulatory approvals and clearances and other prerequisites or conditions to the merger may not be obtained, or may be received outside of expected time frames; | ||
• | competitive pressures among depository and other financial institutions may increase significantly; | ||
• | revenues may be lower than expected; | ||
• | changes in the interest rate environment may reduce interest margins; | ||
• | general economic conditions, either nationally or regionally, may be less favorable than expected, resulting in, among other things, a deterioration in credit quality and/or a reduced demand for credit; | ||
• | legislative or regulatory changes, including changes in accounting standards, may adversely affect the ability of the combined company to conduct its current and future operations; | ||
• | costs or difficulties related to the integration of the businesses of Citizens & Northern and Citizens may be greater than expected; | ||
• | expected cost savings associated with the merger may not be fully realized or realized within the expected time frames; |
• | deposit attrition, customer loss, or revenue loss following the merger may be greater than expected; | ||
• | competitors may have greater financial resources and develop products that enable such competitors to compete more successfully than Citizens & Northern; and | ||
• | adverse changes may occur in the securities markets or with respect to inflation. |
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• | approve and adopt the merger agreement; | ||
• | adjourn the meeting if more time is needed to solicit proxies; and | ||
• | transact any other business that may properly be brought before the meeting. |
• | shares of Citizens common stock present in person at the special meeting but not voting or abstaining on any matter; | ||
• | shares of Citizens common stock represented by proxy on which the shareholder has abstained on any matter; and | ||
• | shares of Citizens common stock represented by proxies from a broker that are voted on any issue other than a procedural motion. |
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• | by giving written notice to Citizens Bancorp, Inc., 10 North Main Street, Coudersport, PA 16915, Attention: George Raup, Secretary | ||
• | by signing and returning a later-dated proxy, or | ||
• | by voting in person at the special meeting. |
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• | the terms of the proposed exchange ratio of stock and cash; | ||
• | conditions to closing the transaction; | ||
• | rights of the parties to terminate the acquisition agreement under certain circumstances; | ||
• | the conditions under which Citizens would be required to pay Citizens & Northern a termination fee in the event that the transaction did not close under certain circumstances; | ||
• | the terms of severance for employees who might not continue employment with Citizens & Northern following the transaction; and | ||
• | the terms of the voting agreements required from Citizens directors and affiliates. |
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• | the challenges facing a small rural bank and the board of directors’ belief that remaining independent does not address these challenges in the long term; | ||
• | the absence of operational or financial restructuring alternatives, such as share repurchases, that would overcome the challenges facing Citizens as a small rural bank; | ||
• | the belief that the challenges facing Citizens can be more effectively managed as part of a larger, more geographically and functionally diverse institution; | ||
• | the cost savings synergies that may be achieved from the merger; | ||
• | historical information concerning Citizens’ and Citizens & Northern’s respective businesses, financial performance and condition, operations, management and competitive position, including the results of operations for each company; |
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• | current securities trading market conditions and historical information with respect to Citizens common stock and Citizens & Northern common stock; | ||
• | the value and amount of consideration to be paid to Citizens shareholders pursuant to the merger; | ||
• | a review of comparable merger transactions; | ||
• | the belief that the terms of the merger agreement, including the parties’ representations, warranties and covenants, and the conditions to their respective obligations, are reasonable; | ||
• | detailed financial analysis and pro forma and other information with respect to Citizens and Citizens & Northern presented to the board of directors; | ||
• | the significantly greater liquidity of Citizens & Northern common stock; | ||
• | the opinion of Ryan Beck that the merger consideration was fair, as of such date, from a financial point of view, to Citizens shareholders, and the procedures and methods used by Ryan Beck to reach that opinion; and | ||
• | the impact of the merger on Citizens’ customers, community and employees. |
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• | the merger agreement and related documents; | ||
• | Citizens & Northern’s annual reports on Form 10-K, including audited financial statements, for the years ended December 31, 2005, 2004 and 2003; | ||
• | Citizens & Northern’s quarterly reports on Form 10-Q for the quarters ended September 30, 2006, June 30, 2006 and March 31, 2006; | ||
• | Citizens’ annual reports for the years ended December 31, 2005, 2004 and 2003; | ||
• | Citizens’ quarterly call reports for the periods ended September 30, 2006, June 30, 2006 and March 31, 2006; | ||
• | certain other public and non-public information, primarily financial in nature, related to the respective businesses, earnings, assets and prospects of Citizens and Citizens & Northern provided to Ryan Beck by management of the respective companies or obtained by Ryan Beck from other sources; | ||
• | the publicly available financial data of commercial banking organizations which Ryan Beck deemed generally comparable to Citizens and Citizens & Northern; | ||
• | the historical stock prices and trading volumes of Citizens’ and Citizens & Northern’s common stock; and | ||
• | the terms of acquisitions of banking organizations which Ryan Beck deemed generally comparable in whole or in part to Citizens. | ||
Additionally, Ryan Beck: | |||
• | conducted or reviewed such other studies, analyses, inquiries and examinations as it deemed appropriate; | ||
• | analyzed the impact of the merger on Citizens & Northern; | ||
• | considered the future prospects of Citizens in the event it remained independent; and | ||
• | participated in meetings and telephone conferences with certain members of Citizens’ and Citizens & Northern’s senior management to discuss Citizens’ and Citizens & Northern’s past and current business operations, regulatory standing, financial condition, strategic plan and future prospects, including any potential operating efficiencies and synergies that may arise from the merger. |
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Citizens | Peer | Peer | ||||||||||
Bancorp, Inc. (1) | Average (1) | Median (1) | ||||||||||
Capitalization | ||||||||||||
Total Assets (000s) | $ | 142,663 | $ | 210,556 | $ | 212,695 | ||||||
Total Deposits (000s) | 98,802 | 171,985 | 166,885 | |||||||||
Total Shareholders’ Equity (000s) | 18,240 | 22,898 | 21,380 | |||||||||
Total Equity / Assets | 12.79 | % | 11.00 | % | 9.88 | % | ||||||
Tangible Equity / Tangible Assets | 12.79 | 10.86 | 9.70 | |||||||||
Leverage Ratio | 12.88 | 11.69 | 10.57 | |||||||||
Tier I Capital / Risk-Adjusted Assets | 27.64 | 18.05 | 16.78 | |||||||||
Total Capital / Risk-Adjusted Assets | 28.50 | 19.21 | 17.65 | |||||||||
Total Borrowings / Total Assets | 17.56 | 5.57 | 4.17 | |||||||||
Asset Quality | ||||||||||||
Non-Performing Loans / Loans | 0.09 | 0.91 | 0.69 | |||||||||
Non-Performing Loans + 90 Days Past Due / Loans | 0.09 | 1.04 | 1.18 | |||||||||
Loan Loss Reserves / NPLs | 1,132.08 | 186.37 | 92.29 | |||||||||
Loan Loss Reserves / NPLs + 90 Days Past Due | 1,132.08 | 775.53 | 115.12 | |||||||||
Loan Loss Reserves / Loans | 0.98 | 1.17 | 1.13 | |||||||||
Non-Performing Assets / Assets | 0.12 | 0.71 | 0.48 | |||||||||
Non-Performing Assets + 90 Days Past Due / Assets | 0.12 | 0.80 | 0.82 | |||||||||
Non-Performing Assets / Equity | 0.96 | 7.29 | 4.95 | |||||||||
Loan & Deposit Composition | ||||||||||||
Total Loans / Total Assets | 42.93 | 67.78 | 69.75 | |||||||||
Total Loans / Deposits | 61.99 | 82.98 | 85.19 | |||||||||
1-4 Family Loans / Total Loans | 57.21 | 44.22 | 48.69 | |||||||||
5+ Family Loans / Total Loans | 0.17 | 2.14 | 0.93 | |||||||||
Construction & Developmental Loans / Total Loans | 0.10 | 3.26 | 2.81 | |||||||||
Other Real Estate Loans / Total Loans | 12.06 | 24.94 | 23.84 | |||||||||
Real Estate Loans/Total Loans | 69.54 | 74.57 | 79.62 | |||||||||
Consumer Loans / Total Loans | 7.19 | 8.04 | 4.24 | |||||||||
Commercial Loans / Total Loans | 16.74 | 14.73 | 11.39 | |||||||||
Non-Interest Bearing Deposits/Total Deposits | 11.99 | 15.97 | 13.59 | |||||||||
Transaction Accounts/Total Deposits | 54.91 | 53.35 | 53.62 | |||||||||
Total CD’s/Total Deposits | 45.09 | 46.65 | 46.38 | |||||||||
Time Deposits > $100,000 / Total Deposits | 8.16 | 15.37 | 13.28 | |||||||||
Performance | ||||||||||||
Return on Average Assets | 1.02 | 0.96 | 0.99 | |||||||||
Return on Average Equity | 8.21 | 8.95 | 9.83 | |||||||||
Net Interest Margin | 2.87 | 4.09 | 3.94 | |||||||||
Yield / Cost Spread | 2.31 | 3.81 | 3.77 | |||||||||
Yield on Interest Earning Assets | 5.83 | 6.59 | 6.41 | |||||||||
Cost of Interest Bearing Liabilities | 3.52 | 2.78 | 2.69 | |||||||||
Non Interest Income / Average Assets | 1.08 | 0.63 | 0.67 | |||||||||
Non Interest Expense/Avg Assets | 2.43 | 2.97 | 3.01 | |||||||||
Efficiency Ratio | 64.31 | 66.03 | 65.34 | |||||||||
Growth Rates | ||||||||||||
Asset Growth | (2.63 | ) | 5.00 | 3.97 | ||||||||
Loan Growth Rate | 2.14 | 6.13 | 4.72 | |||||||||
Deposit Growth Rate | 0.04 | 4.30 | 3.53 | |||||||||
Revenue Growth Rate | (0.29 | ) | 6.76 | 5.48 | ||||||||
EPS Growth Rate | 2.16 | 17.22 | 1.47 | |||||||||
Market Statistics | ||||||||||||
Stock Price at December 20, 2006 | $ | 20.45 | ||||||||||
Price / LTM EPS | 14.40 | x | 20.16 | x | 16.30 | x | ||||||
Price / Book Value | 113.99 | % | 149.39 | % | 145.98 | % | ||||||
Price / Tangible Book Value | 113.99 | 151.80 | 146.58 | |||||||||
Market Capitalization ($M) | $ | 20.79 | $ | 34.37 | $ | 31.21 | ||||||
Dividend Yield | 4.30 | % | 2.08 | % | 2.35 | % |
(1) | As of or for the most recent twelve-month period available for the peer group. Citizens’ data is as of September 30, 2006. |
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Citizens & | ||||||||||||
Northern | Peer | Peer | ||||||||||
Corporation (1) | Average (1) | Median (1) | ||||||||||
Capitalization | ||||||||||||
Total Assets (000s) | $ | 1,125,287 | $ | 1,233,777 | $ | 1,086,486 | ||||||
Total Deposits (000s) | 756,372 | 959,277 | 853,279 | |||||||||
Total Shareholders’ Equity (000s) | 129,731 | 131,346 | 112,241 | |||||||||
Total Equity / Assets | 11.53 | % | 10.55 | % | 9.99 | % | ||||||
Tangible Equity / Tangible Assets | 11.27 | 9.59 | 9.33 | |||||||||
Leverage Ratio | 11.00 | 10.38 | 9.86 | |||||||||
Tier I Capital / Risk-Adjusted Assets | 16.49 | 13.63 | 12.51 | |||||||||
Total Capital / Risk-Adjusted Assets | 17.94 | 14.98 | 14.29 | |||||||||
Total Borrowings / Total Assets | 20.61 | 10.24 | 7.83 | |||||||||
Asset Quality | ||||||||||||
Non-Performing Loans / Loans | 1.33 | 0.38 | 0.29 | |||||||||
Non-Performing Loans + 90 Days Past Due / Loans | 1.53 | 0.52 | 0.37 | |||||||||
Loan Loss Reserves / NPLs | 89.69 | 307.58 | 239.47 | |||||||||
Loan Loss Reserves / NPLs + 90 Days Past Due | 78.17 | 969.30 | 361.25 | |||||||||
Loan Loss Reserves / Loans | 1.20 | 1.32 | 1.19 | |||||||||
Non-Performing Assets / Assets | 0.83 | 0.32 | 0.25 | |||||||||
Non-Performing Assets + 90 Days Past Due / Assets | 0.94 | 0.41 | 0.31 | |||||||||
Non-Performing Assets / Equity | 7.17 | 2.94 | 2.53 | |||||||||
Loan & Deposit Composition | ||||||||||||
Total Loans / Total Assets | 60.11 | 68.34 | 67.29 | |||||||||
Total Loans / Deposits | 89.43 | 87.99 | 88.75 | |||||||||
1-4 Family Loans / Total Loans | 54.39 | 28.92 | 28.31 | |||||||||
5+ Family Loans / Total Loans | 1.04 | 3.19 | 1.12 | |||||||||
Construction & Developmental Loans / Total Loans | 1.36 | 13.24 | 12.83 | |||||||||
Other Real Estate Loans / Total Loans | 26.86 | 32.29 | 29.44 | |||||||||
Real Estate Loans/Total Loans | 83.64 | 77.66 | 79.15 | |||||||||
Consumer Loans / Total Loans | 4.78 | 6.50 | 4.85 | |||||||||
Commercial Loans / Total Loans | 5.97 | 12.60 | 11.44 | |||||||||
Non-Interest Bearing Deposits/Total Deposits | 13.69 | 16.31 | 14.84 | |||||||||
Transaction Accounts/Total Deposits | 54.73 | 53.79 | 53.07 | |||||||||
Total CD’s/Total Deposits | 45.27 | 46.21 | 46.93 | |||||||||
Time Deposits > $100,000 / Total Deposits | 12.29 | 24.04 | 18.39 | |||||||||
Performance | ||||||||||||
Return on Average Assets | 1.08 | 1.03 | 1.05 | |||||||||
Return on Average Equity | 9.48 | 10.19 | 9.82 | |||||||||
Net Interest Margin | 3.40 | 4.00 | 3.99 | |||||||||
Yield / Cost Spread | 2.75 | 3.56 | 3.69 | |||||||||
Yield on Interest Earning Assets | 6.03 | 6.76 | 6.65 | |||||||||
Cost of Interest Bearing Liabilities | 3.28 | 3.23 | 3.20 | |||||||||
Non Interest Income / Average Assets | 0.68 | 0.92 | 0.91 | |||||||||
Non Interest Expense/Avg Assets | 2.68 | 2.95 | 3.02 | |||||||||
Efficiency Ratio | 68.74 | 62.00 | 63.89 | |||||||||
Growth Rates | ||||||||||||
Asset Growth | (4.93 | ) | 9.00 | 6.56 | ||||||||
Loan Growth Rate | 4.83 | 13.17 | 12.82 | |||||||||
Deposit Growth Rate | 0.45 | 9.01 | 6.53 | |||||||||
Revenue Growth Rate | (3.47 | ) | 9.32 | 5.40 | ||||||||
EPS Growth Rate | (9.64 | ) | 7.68 | 5.84 | ||||||||
Market Statistics | ||||||||||||
Stock Price at December 20, 2006 | $ | 22.07 | ||||||||||
Price / LTM EPS | 14.71 | x | 18.66 | x | 17.68 | x | ||||||
Price / Book Value | 139.68 | % | 171.47 | % | 168.49 | % | ||||||
Price / Tangible Book Value | 143.31 | 190.46 | 180.03 | |||||||||
Market Capitalization ($M) | $ | 181.18 | $ | 226.76 | $ | 195.49 | ||||||
Dividend Yield | 4.35 | % | 2.03 | % | 1.83 | % |
(1) | As of or for the most recent twelve-month period available for the peer group. Citizens & Northern data is as of September 30, 2006. |
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Peer | ||||||||||||
Group | Peer Group | |||||||||||
Citizens | Average | Median | ||||||||||
Total Assets (000s) | $ | 142,663 | $ | 124,189 | $ | 122,458 | ||||||
Tangible Equity / Tangible Assets | 12.79 | % | 11.57 | % | 11.39 | % | ||||||
YTD Return on Average Assets | 0.99 | % | 0.96 | % | 0.93 | % | ||||||
YTD Return on Average Equity | 7.58 | % | 8.47 | % | 8.54 | % | ||||||
Non-Performing Assets / Assets | 0.12 | % | 0.54 | % | 0.32 | % | ||||||
Efficiency Ratio | 68.23 | % | 66.03 | % | 66.37 | % |
Price / | Core | |||||||||||||||
Price / | Price / Tangible | LTM | Deposit | |||||||||||||
Book Value | Book Value | Earnings | Premium | |||||||||||||
Peer Group Median | 156.08 | % | 161.85 | % | 19.18x | 12.77 | % |
Price / | Core | |||||||||||||||||||||||
Price / | Tangible | Price / LTM | Deposit | |||||||||||||||||||||
Book Value | Book Value | Earnings | Premium | Average | Median | |||||||||||||||||||
$ | 28.00 | $ | 29.04 | $ | 27.24 | $ | 29.44 | $ | 28.43 | $ | 28.52 |
Price / | Core | |||||||||||||||
Price / | Price / Tangible | LTM | Deposit | |||||||||||||
Book Value | Book Value | Earnings | Premium | |||||||||||||
Peer Group Median | 172.06 | % | 174.81 | % | 20.67x | 13.84 | % |
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Price / | Core | |||||||||||||||||||||||
Price / | Tangible | Price / LTM | Deposit | |||||||||||||||||||||
Book Value | Book Value | Earnings | Premium | Average | Median | |||||||||||||||||||
$ | 30.87 | $ | 31.36 | $ | 29.34 | $ | 30.41 | $ | 30.49 | $ | 30.64 |
Price to stated book value | 158.62 | % | ||
Price to tangible book value | 158.62 | % | ||
Multiple of last-twelve-months earnings per share | 20.04 | x | ||
Tangible book premium over core deposits | 11.67 | % |
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Discount Rates | ||||||||||||||||
11% | 12% | 13% | ||||||||||||||
Terminal Year Multiple of Earnings | 15x | $ | 26.93 | $ | 26.08 | $ | 25.28 | |||||||||
16x | $ | 27.85 | $ | 26.96 | $ | 26.11 | ||||||||||
17x | $ | 28.77 | $ | 27.83 | $ | 26.94 |
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• | its observation that the acquisition of Citizens represents an attractive opportunity for Citizens & Northern to expand the geographic market area currently served by Citizens & Northern Bank, into the contiguous markets of Cameron, McKean and Potter Counties; | ||
• | its familiarity with Citizens’ management team and employees, particularly its President, Charles H. Updegraff, Jr., who have the leadership and talent to ensure the continuation of Citizens & Northern’s tradition of strong performance community offices; | ||
• | Citizens’ customer service-oriented emphasis with local decision-making ability and a clear focus on the community, which are consistent with Citizens & Northern’s business approach; | ||
• | its understanding of the business, operations, financial condition, earnings and prospects of each of Citizens & Northern and Citizens; | ||
• | its understanding of the historical and current pro forma financial performance and condition, business operations, capital levels and asset quality of Citizens; | ||
• | a review of comparable transactions, including a comparison of the price being paid in the transaction with the prices paid in other comparable financial institution acquisitions, expressed as, among other things, multiples of book value and earnings; | ||
• | its understanding that the transaction should be accretive to Citizens & Northern’s earnings within a year; | ||
• | perceived opportunities to increase the combined company’s commercial lending, and to reduce the combined company’s operating expenses, following the transaction; | ||
• | the structure of the merger consideration and the financial and other terms of the transaction, including the fixed stock and fixed cash components; | ||
• | its understanding of the likelihood that the regulatory approvals needed to complete the transaction would be obtained; and | ||
• | its review of the terms of the merger agreement with Citizens & Northern’s legal advisors. |
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• | $28.57 in cash; or | ||
• | 1.297 shares of Citizens & Northern common stock. |
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• | all cash election shares (other than dissenting shares) and no election shares will be converted into the right to receive $28.57 cash per share; | ||
• | Citizens & Northern’s exchange agent will convert on a pro rata basis a sufficient number of stock election shares into cash election shares such that the number of stock election shares shall equal 50% of the total number of shares of Citizens common stock issued and outstanding on the effective date; | ||
• | all shares converted into cash election shares through the pro rata process described above will be converted into the right to receive $28.57 cash per share; and | ||
• | the remaining stock election shares will be converted into shares of Citizens & Northern common stock. |
• | all stock election shares and no election shares will be converted into shares of Citizens & Northern common stock; | ||
• | Citizens & Northern’s exchange agent will convert on a pro rata basis a sufficient number of cash election shares (other than dissenting shares), into stock election shares such that the number of cash election shares, plus the aggregate number of shares with respect to which cash is paid in lieu of fractional shares, shall equal 50% of the total number of shares of Citizens common stock issued and outstanding on the effective date of the merger; and | ||
• | the remaining cash election shares will be converted into the right to receive $28.57 in cash per share. |
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• | prior to the vote on the merger agreement by Citizens shareholders at the special meeting, file a written notice of your intention to demand payment of the fair value of your shares of Citizens common stock if the merger with Citizens & Northern is completed; | ||
• | make no change in your beneficial ownership of Citizens common stock after you give notice of your intention to demand fair value of your shares of Citizens common stock; and | ||
• | not vote in favor of the merger agreement at the special meeting. |
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• | a closing balance sheet and statement of income of Citizens for the fiscal year ending not more than 16 months before the date of remittance or notice, together with the latest available interim financial statements; | ||
• | a statement of Citizens & Northern’s estimate of the fair value of Citizens common stock; and | ||
• | a notice of the right of the dissenting shareholder to demand supplemental payment, accompanied by a copy of the relevant provisions of Pennsylvania law. |
• | the effective date of the merger; | ||
• | timely receipt by Citizens & Northern of any demands for payment; or | ||
• | timely receipt by Citizens & Northern of any estimates by dissenters of the fair value, |
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• | organization of Citizens & Northern, Citizens and their respective subsidiaries; | ||
• | capital structures of Citizens & Northern and Citizens; | ||
• | due authorization, execution, delivery, performance and enforceability of the merger agreement; | ||
• | consents or approvals of regulatory authorities or third parties necessary to complete the merger; | ||
• | consistency of financial statements with accounting principles generally accepted in the United States; | ||
• | absence of material adverse changes, since September 30, 2006, in the assets, financial condition, results of operations, or prospects of Citizens and Citizens & Northern; | ||
• | filing of tax returns and payment of taxes; | ||
• | absence of undisclosed material pending or threatened litigation; | ||
• | compliance with applicable laws and regulations; | ||
• | retirement and other employee plans and matters relating to the Employee Retirement Income Security Act of 1974; | ||
• | quality of title to assets and properties; | ||
• | maintenance of adequate insurance; | ||
• | absence of undisclosed brokers’ or finders’ fees; | ||
• | absence of material environmental violations, actions or liabilities; | ||
• | accuracy of information supplied by Citizens & Northern and Citizens for inclusion in the registration statement, filed under the Securities Act of 1933, in connection with the issuance of Citizens & Northern common stock in the merger, this document, and all applications filed with regulatory authorities for approval of the merger; | ||
• | documents filed by Citizens & Northern with the Securities and Exchange Commission and the accuracy of information contained therein; and | ||
• | validity and binding nature of loans reflected as assets in the financial statements of Citizens. |
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• | change its articles of incorporation or bylaws; | ||
• | change the number of authorized or issued shares of its capital stock; repurchase any shares of its capital stock; redeem or otherwise acquire any shares of its capital stock; or issue or grant options or similar rights with respect to its capital stock or any securities convertible into its capital stock; | ||
• | declare, set aside or pay any dividend or other distribution in respect of its capital stock except as otherwise specifically set forth in the merger agreement (See “The Transaction-Dividends” on page 49); | ||
• | grant any severance or termination pay, except in accordance with policies or agreements in effect on December 21, 2006; or enter into or amend any employment, consulting, severance, “change-in-control” or termination contract or arrangement; | ||
• | increase the compensation of, grant any job promotions to or pay any bonus except for discretionary bonuses not to exceed $50,000 in the aggregate and merit salary increases for calendar year 2007 not to exceed, in the aggregate, 3.5% of existing base salaries; | ||
• | sell or lease all or any substantial portion of the assets or business of Citizens, enter into any acquisition, purchase and assumption transaction or any similar transaction; | ||
• | dispose of or encumber any assets or incur any debt having a book or market value (whichever is greater) in excess of $100,000, unless permitted by the merger agreement; | ||
• | take any action that would result in any condition to closing not being satisfied, except as may be required by applicable law; | ||
• | waive, release, grant or transfer any rights of material value, or modify or change in any material respect any existing material agreement to which Citizens is a party, other than in the ordinary course of business, consistent with past practice; | ||
• | change any accounting methods, principles or practices, except as may be required by accounting principles generally accepted in the United States; | ||
• | implement any new employee benefit or welfare plan, or amend any plans, except as required by law; | ||
• | enter into, renew, extend or modify any transaction with any affiliate of Citizens, other than deposit and loan transactions in the ordinary course of business and which comply with applicable laws and regulations; | ||
• | enter into any interest rate swap, floor or cap or similar arrangement; | ||
• | take any action that would give rise to a right of payment to any person under any contract to which Citizens or any Citizens subsidiary is a party; | ||
• | purchase any security for its investment portfolio not rated “A” or higher by either Standard & Poor’s Corporation or Moody’s Investor Services, Inc; | ||
• | make any new loan or credit facility commitment to any borrower in excess of $1,000,000 in the aggregate, or compromise, extend, renew or modify any such loan or commitment outstanding in excess of $1,000,000; | ||
• | except as already disclosed to Citizens & Northern, make any capital expenditure of $100,000 or more or undertake or enter into any lease, contract or other commitment, involving a payment by Citizens of more than $100,000 annually; or | ||
• | agree to do any of the foregoing. |
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• | to permit Citizens & Northern, if Citizens & Northern elects to do so at its own expense, to cause a “phase I environmental audit” to be performed at any physical site owned or occupied by Citizens; | ||
• | to submit the merger agreement to its shareholders for approval at a meeting to be held as soon as practicable, with an approval recommendation by its board of directors; | ||
• | to approve the bank plan of merger as the sole shareholder of Citizens Trust Company; and | ||
• | to modify or change its accrual and reserve policies and practices as may be necessary to conform the accounting reserve practices and methods of Citizens to those of Citizens & Northern. |
• | to prepare all applications, registration statements and other documents necessary to obtain all required regulatory approvals; | ||
• | subject to the terms of the merger agreement, to take all actions necessary to complete the transactions contemplated by the merger agreement; | ||
• | to maintain adequate insurance; | ||
• | to maintain accurate books and records; | ||
• | to file all tax returns and pay all taxes when due; | ||
• | to deliver to each other monthly and quarterly financial statements; | ||
• | to deliver to each other all documents that may be filed with the SEC under the Securities Exchange Act of 1934 or with banking or regulatory authorities; and | ||
• | to agree upon the form and substance of any press release or public disclosure related to the proposed merger. |
• | initiate, solicit, encourage or take any other action to facilitate, any inquiries relating to, or the making of any acquisition proposal by a third party that relates to a merger, consolidation or acquisition of Citizens, acquisition of all or substantially all of the assets of Citizens or acquisition of ownership or voting power over 20% or more of the outstanding common stock of Citizens or any of its subsidiaries; | ||
• | enter into or maintain or continue discussions or negotiate with a third party regarding any acquisition proposal or inquiry described above; or | ||
• | agree to or endorse any acquisition proposal or inquiry described above; |
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• | the merger agreement shall have been duly approved by the Citizens shareholders; | ||
• | all necessary governmental approvals for the merger transaction shall have been obtained, and all waiting periods required by law or imposed by any governmental authority with respect to the merger shall have expired, and no such approval or consent shall have imposed any condition or requirement which Citizens & Northern determines would cause a material adverse effect as to Citizens & Northern or otherwise reduce the contemplated benefits of the transaction to Citizens & Northern. See “The Transaction —Regulatory Approvals,” at page 51; | ||
• | there shall not be any order, decree, or injunction in effect preventing the completion of the transactions contemplated by the merger agreement; | ||
• | we shall each have received the opinion of Rhoads & Sinon LLP that, among other things, the merger will be treated for federal income tax purposes as a “reorganization” within the meaning of Section 368(a) of the Internal Revenue Code of 1986 and any gain realized in the merger will be recognized only to the extent of cash or other property (other than Citizens & Northern common stock) received, including cash received in lieu of fractional share interests. See “The Transaction — Material Federal Income Tax Consequences,” at page 59; and | ||
• | no materially adverse change shall have occurred in the assets, business, financial condition or results of operation of Citizens or Citizens & Northern. |
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• | the accuracy in all material respects, as of December 21, 2006, and as of the effective date of the merger, of the representations and warranties of the other party, except as to any representation or warranty that specifically relates to an earlier date and except as otherwise contemplated by the merger agreement; and |
• | the other party’s performance in all material respects of all covenants and obligations required to be performed by it at or prior to the effective date of the merger. |
• | that would result in a monopoly or that would further a combination or conspiracy to monopolize banking in the United States; or |
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• | that could substantially lessen competition in any section of the country, that would tend to create a monopoly in any section of the country, or that would be in restraint of trade, unless the Federal Reserve Board finds that the public interest in meeting the convenience and needs of the communities served outweighs the anti-competitive effects of the proposed transaction. |
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• | amend the merger agreement, except that after approval by Citizens shareholders at the special meeting, the consideration you will receive in the merger cannot be decreased; | ||
• | extend the time for the performance of any of the obligations or other acts of the other party required in the merger agreement; | ||
• | waive any inaccuracies in the representations and warranties of the other party contained in the merger agreement; and | ||
• | waive compliance by the other party with any of the agreements or conditions contained in the merger agreement, except for the requirements of Citizens shareholder approval, regulatory approvals and the absence of any order, decree, or injunction preventing the transactions contemplated by the merger agreement. |
• | the other party, in any material respect, breaches any representation, warranty, covenant or other obligation contained in the merger agreement, and the breach remains uncured 30 days after written notice of the breach is given to the breaching party; | ||
• | the closing of the merger does not occur by August 31, 2007, unless this is due to the failure of the party seeking to terminate the merger agreement to perform or observe any agreements required to be performed by it before closing; | ||
• | any regulatory authority whose approval or consent is required for completion of the merger issues a definitive written denial of the approval or consent and the time period for appeals or requests for reconsideration has expired; or | ||
• | Citizens shareholders do not approve the merger agreement at the special meeting or such meeting is cancelled by Citizens. |
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• | Citizens enters into a written agreement or understanding to merge or consolidate, to have 20% or more of its ownership or voting power acquired in the future, or to have all or substantially all of its assets or liabilities acquired; or | ||
• | Citizens authorizes, recommends or publicly proposes, or announces an intention to authorize, any of the foregoing transactions; or | ||
• | Citizens’ shareholders fail to approve the merger or the special meeting is canceled after: |
§ | the Citizens board of directors has withdrawn or modified its recommendation to shareholders to approve the merger agreement; or | ||
§ | another group or person has announced an offer or proposal to acquire 20% or more of the outstanding common stock of Citizens or to merge or consolidate with Citizens or to acquire all or substantially all of Citizens’ assets and within 12 months thereafter enters into an agreement with the group or person for such a transaction. |
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• | for a current term expiring on December 31, 2009; | ||
• | for automatic renewals on December 31 of each year to December 31 of the third calendar year thereafter, subject to the right of each party to terminate the automatic renewal and thereby fix the expiration of the term; | ||
• | for early termination upon dismissal by resolution of a majority of the board of directors, the death or disability of Mr. Updegraff; | ||
• | for a base salary at an annual rate equal to his current base salary rate ($187,100), subject to increase or decrease from to time at such intervals and by the same percentages as may be authorized by the board of directors generally with respect to base salary increases or decreases for executive officers; | ||
• | for participation in certain benefit and incentive programs adopted by the board of directors, including, without limitation, all employer-sponsored group health, life and disability insurance plans and such annual bonus plans, stock option and restricted stock plans as may be adopted by the board of directors; | ||
• | that if Mr. Updegraff is terminated by the board of directors without proper cause, or if Mr. Updegraff resigns his employment upon a material reduction of his authority or responsibilities or a substantial modification of his working conditions following a merger or consolidation of Citizens & Northern, he will continue to receive his salary and benefits for the remainder of the current term; and | ||
• | that if Mr. Updegraff is terminated due to disability, he will be entitled to a monthly disability income benefit in an amount equal to the monthly disability income benefit allowed by the group disability income insurance policy maintained by the Company for its executives, life insurance benefits (unless and until Mr. Updegraff accepts other employment) and health insurance premiums (unless and until Mr. Updegraff accepts other employment). |
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• | appear at such meeting or otherwise cause all shares of Citizens common stock he owns to be counted as present for purposes of determining a quorum; and | ||
• | vote (or cause to be voted), in person or by proxy, all shares of Citizens common stock he owns or as to which he has, directly or indirectly, the right to direct the voting in favor of adoption and approval of the merger agreement and the merger transaction and against the approval or adoption of any other acquisition transaction with a party other than Citizens & Northern. |
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• | the merger constitutes a reorganization under Section 368(a) of the Code; and | ||
• | any gain realized in the merger will be recognized as capital gain or ordinary income only to the extent of cash or other property (other than Citizens & Northern common stock) received in the merger, including cash received in lieu of fractional share interests. |
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• | an “affiliate” of Citizens for purposes of Rule 145 under the Securities Act; or | ||
• | an “affiliate” of Citizens & Northern for purposes of Rule 144 under the Securities Act. |
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• | divide Citizens & Northern’s board of directors into three classes serving staggered three-year terms; | ||
• | do not permit shareholders’ actions without a meeting; | ||
• | eliminate cumulative voting in the election of directors; | ||
• | require advance notice of nominations for the election of directors and the presentation of shareholder proposals at meetings of shareholders; | ||
• | permit Citizens & Northern’s board of directors to consider the effects on Citizens & Northern’s employees, customers, depositors and communities it serves when determining whether to oppose any tender offer for Citizens & Northern outstanding common stock; | ||
• | require the affirmative vote of at least 75% of the votes that all shareholders are entitled to cast to approve any merger, consolidation or dissolution unless such action is approved in advance by the affirmative vote of 66 2/3% of the Citizens & Northern board of directors; | ||
• | require that mergers and other similar transactions with a person or entity holding more than 5% of Citizens & Northerns stock, be approved by the affirmative vote of at least 75% of the votes entitled to be cast by the remaining shareholders, unless the transaction is approved, in advance, by at least 66 2/3% of the Citizens & Northern directors elected prior to the time any such person became the owner of more than 10% of Citizens & Northern common stock or elected by the remaining shareholders; | ||
• | require that, following the acquisition by any person or group of 30% of Citizens & Northern common stock, the remaining shareholders shall have the right to receive payment for their shares, in cash, from such person or group, in an amount equal to the “fair value” of the shares, including an increment representing a proportion of any value payable for control, unless such acquisition was approved in advance by 66-2/3% or more of the board of directors; |
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• | require an affirmative vote of at least 75% of the votes that all shareholders are entitled to cast in order for the shareholders to repeal or amend Citizens & Northern’s bylaws; and | ||
• | require the affirmative vote of shareholders entitled to cast at least 75% of the votes entitled to be cast to approve the repeal or amendment of certain provisions of Citizens & Northern’s articles of incorporation. |
• | require that, following any acquisition by any person or group of 20% of a public corporation’s voting power, the remaining shareholders have the right to receive | ||
• | payment for their shares, in cash, from such person or group in an amount equal to the “fair value” of the shares, including an increment representing a proportion of any value payable for control of the corporation (Subchapter 25E of the Business Corporation Law); | ||
• | prohibit for five years, subject to certain exceptions, a “business combination” (which includes a merger or consolidation of the corporation or a sale, lease or exchange of assets) with a person or group beneficially owning 20% or more of a public corporation’s voting power (Subchapter 25F of the Business Corporation Law); | ||
• | prevent a person or group acquiring different levels of voting power (20%, 33% and 50%) from voting any shares over the applicable threshold, unless “disinterested shareholders” approve such voting rights (Subchapter 25G of the Business Corporation Law); | ||
• | require any person or group that publicly announces that it may acquire control of a corporation, or that acquires or publicly discloses an intent to acquire 20% or more of the voting power of a corporation, to disgorge to the corporation any profits that it receives from sales of the corporation’s equity securities purchased over the prior 18 months (Subchapter 25H of the Business Corporation Law); | ||
• | expand the factors and groups (including shareholders) which a corporation’s board of directors can consider in determining whether an action is in the best interests of the corporation; | ||
• | provide that a corporation’s board of directors need not consider the interests of any particular group as dominant or controlling; | ||
• | provide that a corporation’s directors, in order to satisfy the presumption that they have acted in the best interests of the corporation, need not satisfy any greater obligation or higher burden of proof with respect to actions relating to an acquisition or potential acquisition of control; | ||
• | provide that actions relating to acquisitions of control that are approved by a majority of “disinterested directors” are presumed to satisfy the directors’ fiduciary duty, unless it is proven by clear and convincing evidence that the directors did not assent to such action in good faith after reasonable investigation; and | ||
• | provide that the fiduciary duty of a corporation’s directors is solely to the corporation and may be enforced by the corporation or by a shareholder in a derivative action, but not by a shareholder directly. |
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• | redeem any rights under, or to modify or render inapplicable, any shareholder rights plan; | ||
• | render inapplicable, or make determinations under, provisions of the Pennsylvania Business Corporation Law relating to control transactions, business combinations, control-share acquisitions or disgorgement by certain controlling shareholders following attempts to acquire control; or | ||
• | act as the board of directors, a committee of the board or an individual director, solely because of the effect the action might have on an acquisition or potential acquisition of control of the corporation or the consideration that might be offered or paid to shareholders in such an acquisition. |
Director of Citizens and | Principal Occupation for the | |||||
Name and Age | Citizen Trust Company Since | Past Five Years | ||||
Charles H. Updegraff, Jr., | 1980 | Chairman, President & CEO, | ||||
54 | Citizens Bancorp, Inc. and | |||||
Citizens Trust Company |
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Amount and Nature of | ||||||||
Name & Address | Beneficial Ownership | Percent of Class(1) | ||||||
Charles H. Updegraff, Jr. | 74,289 | (4) | 7.28 | % | ||||
28 Prosser Hollow Road | ||||||||
Coudersport, PA 16915 | ||||||||
CEDE & Co (2) | 343,803 | 33.81 | % | |||||
PO Box 863 | ||||||||
Bowling Green Station | ||||||||
New York, NY 10274 | ||||||||
Couporem and Company(3) | 132,982 | 13.08 | % | |||||
10 North Main Street | ||||||||
Coudersport, PA 16915 |
(1) | Calculated based on 1,016,824 shares of common stock issued and outstanding. | |
(2) | CEDE & Co. is the record holder of the shares indicated in its capacity as nominee for various beneficial owners. | |
(3) | Couporem and Company is the record holder of the shares as nominee for the Trust Department of Citizens Trust Company, which holds the shares as fiduciary for certain trusts, estates and agency accounts that beneficially own the shares. To the knowledge of Citizens, no beneficial owner of shares of Citizens common stock held by the partnership owns more than 5% of such shares. The number of shares reported as being beneficially owned by Couporem and Company includes the shares that are reported as beneficially owned by the executive officers in this table and in the following table through the Citizens 401(k) Plan. | |
(4) | Includes 70,996 shares held directly, 300 restricted shares held directly, 2,536 shares held in the Company’s 401(k) Plan and 457 shares held by Kimberly S. Regg-Updegraff, Mr. Updegraff’s spouse. Mr. Updegraff disclaims beneficial ownership of the shares held by his spouse. Does not include the 132,982 shares held by Couporem and Company, of which Mr. Updegraff is one of three partners. |
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Amount and nature of beneficial | ||||||||
Name | ownership | Percent of Class(1) | ||||||
Charles H. Updegraff, Jr. (Director and Chief Executive Officer) | 74,289 | (2) | 7.31 | % | ||||
P. Gregory Buchanan (Director) | 289 | (3) | * | |||||
Joseph F. Costa (Director) | 17,000 | 1.67 | % | |||||
Harold L. Howard (Director) | 12,735 | (4) | 1.25 | % | ||||
Mary C. Lewis (Director) | 106 | * | ||||||
H. Donald Sestina (Director) | 1,793 | (5) | * | |||||
Robert C. Smith (Director) | 1,497 | (6) | * | |||||
Edwin H. Corey (Chief Financial Officer) | 31,422 | (7) | 3.09 | % | ||||
George M. Raup (Vice President of Operations) | 7,225 | (8) | * | |||||
Stan R. Dunsmore (Vice President and Chief Lending Officer) | 9,163 | (9) | * | |||||
Justin F. Krellner (Vice President and Trust Officer) | 4,724 | (10) | * | |||||
All directors and executive officers as a group (11 persons) | 160,243 | 15.76 | % |
* | Indicates ownership of less than 1%. | |
(1) | Calculated based on 1,016,824 shares of common stock outstanding. | |
(2) | Includes 70,996 shares held directly, 300 restricted shares held directly, 2,536 shares held in the Company’s 401(k) Plan and 457 shares held by Kimberly S. Regg-Updegraff, Mr. Updegraff’s spouse. Mr. Updegraff disclaims beneficial ownership of the shares held by his spouse. Does not include the 132,982 shares held of record by Couporem and Company, of which Mr. Updegraff is one of three partners. | |
(3) | Includes 183 shares held jointly with his spouse, and 106 shares held in his individual capacity. | |
(4) | Includes 106 shares held in his individual capacity and 12,629 shares held jointly with his children. | |
(5) | Includes 106 shares held in his individual capacity and 1,687 shares held jointly with his spouse. | |
(6) | Includes 106 shares held in his individual capacity and 1,391 held jointly with his spouse. | |
(7) | Includes 181 shares held in his individual capacity, 90 restricted shares held directly, 6,251 shares held in Citizens 401(k) Plan, and 24,900 shares held by the Mary Ann Corey Trust.Does not include the 132,982 shares held of record by Couporem and Company, of which Mr. Corey is one of three partners. | |
(8) | Includes 285 shares held in his individual capacity, 90 restricted shares held directly, 3,657 shares held in Citizens 401(k) Plan and 3,193 shares held by the Raup Family Trust, of which Mr. Raup is a trustee. | |
(9) | Includes 181 shares held in his individual capacity, 90 restricted shares held directly, 657 shares held jointly with his spouse and 8,235 shares held in Citizens 401(k) Plan. | |
(10) | Includes 45 shares held in his individual capacity, 90 restricted shares held directly, 234 shares held jointly with his spouse and 4,355 shares held in Citizens 401(k) Plan. Does not include the 132,982 shares held of record by Couporem and Company, of which Mr. Krellner is one of three partners. |
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• | any merger or consolidation of Citizens & Northern with or into any other corporation; | ||
• | any share exchange in which a corporation, person, or entity acquires the issued or outstanding shares of common stock of Citizens & Northern pursuant to a vote of shareholders; |
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• | any lease exchange or other transfer of all, or substantially all, of the assets of Citizens & Northern to any other corporation, person, or entity; or | ||
• | any transaction similar to, or having similar effect as, any of the foregoing transactions. |
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100 F Street, N.E.
Room 1580
Washington, DC 20549
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• | Annual Report on Form 10-K for the year ended December 31, 2006; | ||
• | Current Report on Form 8-K, filed with the SEC January 12, 2007; and | ||
• | The description of the Citizens & Northern common stock set forth in Citizens & Northern’s Registration Statement filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934, and any amendments or reports filed under the Exchange Act for the purpose of updating such description. |
90-92 Main Street
Wellsboro, PA 16901
Attention: Mark A. Hughes, Executive Vice President and Chief Financial Officer
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between
CITIZENS & NORTHERN CORPORATION
and
CITIZENS BANCORP, INC.
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BACKGROUND | A-1 | |||
AGREEMENT | A-1 | |||
ARTICLE I — THE MERGERS | A-1 | |||
Section 1.01 — Definitions | A-1 | |||
Section 1.02 — The Merger | A-7 | |||
Section 1.03 — The Bank Merger | A-13 | |||
ARTICLE II — REPRESENTATIONS AND WARRANTIES OF CITIZENS | A-13 | |||
Section 2.01 — Organization | A-13 | |||
Section 2.02 — Capitalization | A-14 | |||
Section 2.03 — Authority; No Violation | A-14 | |||
Section 2.04 — Consents | A-15 | |||
Section 2.05 — Financial Statements | A-15 | |||
Section 2.06 — Taxes | A-15 | |||
Section 2.07 — No Material Adverse Effect | A-16 | |||
Section 2.08 — Contracts | A-16 | |||
Section 2.09 — Ownership of Property; Insurance Coverage | A-16 | |||
Section 2.10 — Legal Proceedings | A-17 | |||
Section 2.11 — Compliance With Applicable Law | A-17 | |||
Section 2.12 — ERISA | A-17 | |||
Section 2.13 — Brokers, Finders and Financial Advisors; Fairness Opinion | A-18 | |||
Section 2.14 — Environmental Matters | A-18 | |||
Section 2.15 — Allowance for Losses | A-18 | |||
Section 2.16 — Information to be Supplied | A-19 | |||
Section 2.17 — Related Party Transactions | A-19 | |||
Section 2.18 — Schedule of Termination Benefits | A-19 | |||
Section 2.19 — Loans | A-19 | |||
Section 2.20 — Takeover Laws | A-19 | |||
Section 2.21 — Labor and Employment Matters | A-20 | |||
Section 2.22 — CRA, Anti-Money Laundering and Customer Information Security | A-20 | |||
Section 2.23 — Non-Registration Under the Exchange Act and the Securities Act | A-20 | |||
Section 2.24 — Regulatory Capital | A-20 | |||
Section 2.25 — Quality of Representations | A-20 | |||
ARTICLE III — REPRESENTATIONS AND WARRANTIES OF C&N | A-20 | |||
Section 3.01 — Organization | A-20 | |||
Section 3.02 — Capital Structure | A-21 | |||
Section 3.03 — Authority; No Violation | A-21 | |||
Section 3.04 — Consents | A-22 | |||
Section 3.05 — Financial Statements | A-22 | |||
Section 3.06 — Taxes | A-22 | |||
Section 3.07 — No Material Adverse Effect | A-23 | |||
Section 3.08 — Ownership of Property; Insurance Coverage | A-23 | |||
Section 3.09 — Legal Proceedings | A-23 | |||
Section 3.10 — Compliance With Applicable Law | A-23 | |||
Section 3.11 — ERISA | A-23 | |||
Section 3.12 — Brokers, Finders and Financial Advisors | A-24 | |||
Section 3.13 — Environmental Matters | A-24 | |||
Section 3.14 — Allowance for Losses | A-24 | |||
Section 3.15 — Information to be Supplied | A-24 | |||
Section 3.16 — Related Party Transactions | A-24 | |||
Section 3.17 — Loans | A-24 |
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Section 3.18 — CRA, Anti-Money Laundering and Customer Information Security | A-25 | |||
Section 3.19 — Securities Documents | A-25 | |||
Section 3.20 — Regulatory Capital | A-25 | |||
Section 3.21 — Financing | A-25 | |||
Section 3.22 — Tax Matters | A-25 | |||
Section 3.23 — Quality of Representations | A-25 | |||
ARTICLE IV — COVENANTS OF THE PARTIES | A-25 | |||
Section 4.01 — Conduct of Citizens’ Business | A-25 | |||
Section 4.02 — Access; Confidentiality | A-27 | |||
Section 4.03 — Regulatory Matters and Consents | A-28 | |||
Section 4.04 — Taking of Necessary Action | A-28 | |||
Section 4.05 — Certain Agreements | A-28 | |||
Section 4.06 — No Other Bids and Related Matters | A-29 | |||
Section 4.07 — Duty to Advise; Duty to Update Disclosure Schedule | A-30 | |||
Section 4.08 — Conduct of C&N’s Business | A-30 | |||
Section 4.09 — Current Information | A-30 | |||
Section 4.10 — Undertakings by C&N and Citizens | A-30 | |||
Section 4.11 — Employee Benefits and Termination Benefits | A-33 | |||
Section 4.12 — Citizens Division; Advisory Board | A-34 | |||
Section 4.13 — Affiliate Letter | A-34 | |||
Section 4.14 — Nasdaq Listing | A-34 | |||
ARTICLE V — CONDITIONS | A-34 | |||
Section 5.01 — Conditions to Citizens’ Obligations under this Agreement | A-34 | |||
Section 5.02 — Conditions to C&N’s Obligations under this Agreement | A-35 | |||
ARTICLE VI — TERMINATION, WAIVER AND AMENDMENT | A-36 | |||
Section 6.01 — Termination | A-36 | |||
Section 6.02 — Effect of Termination | A-38 | |||
ARTICLE VII — MISCELLANEOUS | A-38 | |||
Section 7.01 — Expenses and Other Fees | A-38 | |||
Section 7.02 — Non-Survival of Representations and Warranties | A-39 | |||
Section 7.03 — Amendment, Extension and Waiver | A-39 | |||
Section 7.04 — Entire Agreement | A-39 | |||
Section 7.05 — No Assignment | A-39 | |||
Section 7.06 — Notices | A-39 | |||
Section 7.07 — Captions | A-40 | |||
Section 7.08 — Counterparts | A-40 | |||
Section 7.09 — Severability | A-40 | |||
Section 7.10 — Governing Law | A-40 | |||
EXHIBITS: | ||||
Exhibit 1 — Form of Bank Plan of Merger | ||||
Exhibit 2 — Form of Affiliate Letter | ||||
Exhibit 3 — Form of Tax Opinion | ||||
Exhibit 4 — Form of Opinion of C&N Counsel | ||||
Exhibit 5 — Form of Opinion of Citizens Counsel | ||||
Exhibit 6 — Index Group |
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THE MERGERS
A-1
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A-2
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A-3
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A-4
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A-5
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A-6
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A-7
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A-8
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A-9
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A-10
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A-11
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A-12
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REPRESENTATIONS AND WARRANTIES OF CITIZENS
A-13
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A-14
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A-15
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A-16
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A-17
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A-18
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A-19
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REPRESENTATIONS AND WARRANTIES OF C&N
A-20
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A-21
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A-22
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A-23
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A-24
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COVENANTS OF THE PARTIES
A-25
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A-26
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A-27
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A-28
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A-29
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A-30
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A-31
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A-32
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A-33
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CONDITIONS
A-34
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A-35
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TERMINATION, WAIVER AND AMENDMENT
A-36
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A-37
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MISCELLANEOUS
A-38
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90-92 Main Street
Wellsboro, Pennsylvania 16901
Attention: Craig G. Litchfield, Chairman, President & CEO
Facsimile No.: (570) 723-8097
A-39
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One South Market Square, 12th Floor
Harrisburg, Pennsylvania 17108-1146
Attention: Charles J. Ferry, Esquire
Carl D. Lundblad, Esquire
Facsimile No.: (717) 231-6669
10 North Main Street
Coudersport, Pennsylvania 16915
Attention: Charles H. Updegraff, Jr., Chairman, President and CEO
Facsimile No.: (814) 274-0401
11 Stanwix Street, 15th Floor
Pittsburgh, Pennsylvania 15222
Attention: Charles C. Cohen, Esquire
Facsimile No.: 412-209-0672
CITIZENS & NORTHERN CORPORATION | |||||
By: | /s/ Craig G. Litchfield | ||||
Craig G. Litchfield, Chairman, President and CEO | |||||
CITIZENS BANCORP, INC. | |||||
By: | /s/ Charles H. Updegraff, Jr. | ||||
Charles H. Updegraff, Jr., Chairman, President and CEO | |||||
A-40
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MERGER; BUSINESS
ARTICLES OF INCORPORATION AND BY-LAWS
A1-1
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BOARD OF DIRECTORS AND OFFICERS
Name | Residence Address | |
Dennis F. Beardslee | 155 Chestnut Street, Troy, PA 16947 | |
R. Robert DeCamp | 53 Central Avenue, Wellsboro, PA 16901 | |
Jan E. Fisher | 101 Greenbrair Drive, Wellsboro, PA 16901 | |
R. Bruce Haner | 204 Warren Street, Sayre, PA 18840 | |
Susan E. Hartley | 1293 Hoffman Hollow Road, Lowman, NY 14861 | |
Karl W. Kroeck | R.R. #1, Box 990, Knoxville, PA 16928 | |
Leo F. Lambert | P.O. Box 345, 213 Academy Terrace, Dushore, PA 18614 | |
Edward L. Learn | 111 Legion Heights Road, Elkland, PA 16920 | |
Craig G. Litchfield | 33 West Avenue, Wellsboro, PA 16901 | |
Edward H. Owlett, III | 894 Dean Hill Road, Wellsboro, PA 16901 | |
Leonard Simpson | 3 Cherry Street – Drawer W, Laporte, PA 18626 | |
James E. Towner | 1116 Oakmont Road, Clarks Summit, PA 18411 | |
Ann Tyler | 278 Bluebird Lane, Cogan Station, PA 17728 | |
Charles H. Updegraff, Jr. | 28 Prosser Hollow Road, Coudersport, PA 16915 |
CONVERSION OF SHARES
EFFECTIVE DATE OF THE MERGER
EFFECT OF THE MERGER
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CONDITIONS PRECEDENT
TERMINATION
AMENDMENT
MISCELLANEOUS
A1-3
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ATTEST: | CITIZENS & NORTHERN BANK | |||||||
/s/ Jessica R. Brown | By: | /s/ Craig G. Litchfield | ||||||
Secretary | Craig G. Litchfield, Chairman, | |||||||
President & CEO | ||||||||
(SEAL) | ||||||||
ATTEST: | CITIZENS TRUST COMPANY | |||||||
/s/ George Raup | By: | /s/ Charles H. Updegraff, Jr. | ||||||
Secretary | Charles H. Updegraff, Jr., Chairman, | |||||||
President & CEO | ||||||||
(SEAL) |
A1-4
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90-92 Main Street
Wellsboro, PA 16901
A2-1
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A2-2
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Very truly yours, | ||||||
Name: | ||||||
December, 2006:
By: | ||||
Craig G. Litchfield, Chairman, President | ||||
& CEO |
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A5-1
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Company | % Weighting | |||
ACNB Corp., Gettysburg, PA | 2.73 | % | ||
Alliance Financial Corp., Syracuse, NY | 3.63 | % | ||
AmeriServ Financial Inc., Johnstown, PA | 2.54 | % | ||
Arrow Financial Corp., Glens Falls, NY | 6.55 | % | ||
Bryn Mawr Bank Corp., Bryn Mawr, PA | 4.77 | % | ||
Canandaigua National Corp., Canandaigua, NY | 3.84 | % | ||
CNB Financial Corp., Clearfield, PA | 3.01 | % | ||
Financial Institutions Inc., Warsaw, NY | 6.23 | % | ||
First Chester County Corp., West Chester, PA | 2.75 | % | ||
First National Community Bncp, Dunmore, PA | 8.65 | % | ||
Franklin Financial Services, Chambersburg, PA | 2.54 | % | ||
Leesport Financial Corp., Wyomissing, PA | 3.04 | % | ||
Omega Financial Corp., State College, PA | 9.79 | % | ||
Orrstown Financial Services, Shippensburg, PA | 5.52 | % | ||
Pennsylvania Commerce Bancorp, Harrisburg, PA | 3.83 | % | ||
Royal Bancshares of PA, Narberth, PA | 6.80 | % | ||
Smithtown Bancorp Inc., Hauppauge, NY | 6.04 | % | ||
Suffolk Bancorp, Riverhead, NY | 8.50 | % | ||
Univest Corp. of Pennsylvania, Souderton, PA | 9.24 | % | ||
Total | 100.00 | % | ||
A6-1
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Citizens Bancorp, Inc.
10 North Main Street
Coudersport, PA 16915
B-1
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B-2
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Ryan Beck & Co., Inc.
B-3
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OF THE PENNSYLVANIA BUSINESS CORPORATION LAW
OF 1988 (15 Pa. C.S. §§1571-1580, 1930) AS AMENDED,
RELATING TO DISSENTERS RIGHTS
Section 1930 (relating to dissenters rights).
Section 1931(d) (relating to dissenters rights in share exchanges).
Section 1932(c) (relating to dissenters rights in asset transfers).
Section 1952(d) (relating to dissenters rights in division).
Section 1962(c) (relating to dissenters rights in conversion).
Section 2104(b) (relating to procedure).
Section 2324 (relating to corporation option where a restriction on transfer of a security is held invalid).
Section 2325(b) (relating to minimum vote requirement).
Section 2704(c) (relating to dissenters rights upon election).
Section 2705(d) (relating to dissenters rights upon renewal of election).
Section 2904(b) (relating to procedure)
Section 2907(a) (relating to proceedings to terminate breach of qualifying conditions).
Section 7104(b)(3) (relating to procedure).
C-1
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C-2
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C-3
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C-4
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C-5
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Exhibit No. | Description | |
2.1 | Agreement and Plan of Merger by and between Citizens & Northern Corporation and Citizens Bancorp, Inc. dated as of December 21, 2006 (Included as part of Annex A in the Proxy Statement/Prospectus included in this Registration Statement). | |
3.1 | Articles of Incorporation of Citizens & Northern Corporation, as amended (Incorporated by reference to Exhibit 4.1 to registrant’s Form S-8 Registration Statement filed November 3, 2006). | |
3.2 | Bylaws of Citizens & Northern Corporation, as amended (Incorporated by reference to Exhibit 3.1 to registrant’s Current Report on Form 8-K filed August 25, 2004). | |
5.1 | Opinion of Rhoads & Sinon LLP as to the validity of securities.* | |
8.1 | Opinion of Rhoads & Sinon LLP as to certain tax matters.* | |
10.1 | Change in Control Agreement dated July 21, 2005 between the Corporation and Harold F. Hoose, III (Incorporated by reference to Exhibit 10.1 filed with the registrant’s Form 10-K on March 3, 2006) | |
10.2 | Form of Stock Option and Restricted Stock Agreements dated January 3, 2005 between the Corporation and certain officers pursuant to the Citizens & Northern Corporation Stock Incentive Plan (Incorporated by reference to Exhibit 10.2 filed with the registrant’s Form 10-K on March 3, 2006) |
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Exhibit No. | Description | |
10.3 | Form of Stock Option and Restricted Stock Agreements dated January 3, 2005 between the Corporation and the Directors pursuant to the Citizens & Northern Corporation Independent Directors Stock Incentive Plan (Incorporated by reference to Exhibit 10.3 filed with the registrant’s Form 10-K on March 3, 2006) | |
10.4 | Form of Indemnification Agreements dated May 2004 between the Corporation and the Directors and certain officers (Incorporated by reference to Exhibit 10.1 filed with the registrant’s Form 10-K on March 14, 2005) | |
10.5 | Change in Control Agreement dated December 31, 2003 between the Corporation and Thomas L. Rudy, Jr. (Incorporated by reference to Exhibit 10.2 filed with the registrant’s Form 10-K on March 14, 2005) | |
10.6 | Change in Control Agreement dated December 31, 2003 between the Corporation and Craig G. Litchfield (Incorporated by reference to Exhibit 10.1 filed with the registrant’s Form 10-K on March 10, 2004) | |
10.7 | Change in Control Agreement dated December 31, 2003 between the Corporation and Mark A. Hughes (Incorporated by reference to Exhibit 10.2 filed with the registrant’s Form 10-K on March 10, 2004) | |
10.8 | Change in Control Agreement dated December 31, 2003 between the Corporation and Deborah E. Scott (Incorporated by reference to Exhibit 10.4 filed with the registrant’s Form 10-K on March 10, 2004) | |
10.9 | Second Amendment to Citizens & Northern Corporation Stock Incentive Plan (Incorporated by reference to Exhibit 10.5 filed with the registrant’s Form 10-K on March 10, 2004) | |
10.10 | First Amendment to Citizens & Northern Corporation Stock Incentive Plan (Incorporated by reference to Exhibit 10.6 filed with the registrant’s Form 10-K on March 10, 2004) | |
10.11 | Citizens & Northern Corporation Stock Incentive Plan (Incorporated by reference to Exhibit 10.7 filed with the registrant’s Form 10-K on March 10, 2004) | |
10.12 | Citizens & Northern Corporation Independent Directors Stock Incentive Plan (Incorporated by reference to Exhibit A to the registrant’s proxy statement dated March 19, 2001 for the annual meeting of stockholders held on April 17, 2001) |
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Exhibit No. | Description | |
10.13 | Amendment #1 to Citizens & Northern Bank Supplemental Executive Retirement Plan (Incorporated by reference to Exhibit 10.2(b) filed with the registrant’s Form 10-K on March 19, 2001) | |
10.14 | Amendment #2 to Citizens & Northern Bank supplemental Executive Retirement Plan (Incorporated by reference to Exhibit 10.2(a) filed with the registrant’s Form 10-K on March 19, 2001) | |
10.15 | Citizens & Northern Bank Supplemental Executive Retirement Plan (Incorporated by reference to Exhibit 10.2 filed with the registrant’s Form 10-K on March 19, 2001) | |
21 | Subsidiaries of the Registrant (Incorporated by reference to Exhibit 21 to registrant’s Form 10-K filed March 3, 2006 for the fiscal year ended December 31, 2005). | |
23.1 | Consent of Parente Randolph, LLC | |
23.2 | Consent of Ryan Beck & Co., Inc. | |
23.3 | Consents of Rhoads & Sinon LLP (included in Exhibit 5.1 and 8.1).* | |
24.1 | Power of Attorney (contained on signature pages to this Registration Statement).* | |
99.1 | Opinion of Ryan Beck & Co., Inc. as to the fairness of the transaction (attached as Annex B to the Proxy Statement/Prospectus included in this Registration Statement). | |
99.2 | Form of Proxy Card.* | |
* | Previously filed | ||
(b) | Financial Statement Schedules. |
(a) | The undersigned registrant hereby undertakes: |
(1) | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(i) | to include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
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(ii) | to reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement; and | ||
(iii) | to include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement. |
(2) | That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. | ||
(3) | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
(1) | That prior to any public reoffering of the securities registered hereunder through the use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), such reoffering prospectus will contain the information called for by the applicable registration form with respect to reofferings by persons who may be deemed underwriters, in addition to the information called for by the other items of the applicable form. | ||
(2) | That every prospectus (i) that is filed pursuant to the immediately preceding paragraph, or (ii) that purports to meet the requirements of Section 10(a)(3) of the Securities Act of 1933, as amended, and is used in |
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connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment is effective, and that, for purposes of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
CITIZENS & NORTHERN CORPORATION (Registrant) | ||||
By: | /s/ Craig G. Litchfield | |||
Craig G. Litchfield, Chairman, | ||||
President and Chief Executive Officer |
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Signature | Capacity | Date | ||
/s/ Craig G. Litchfield | Chairman, President, Chief Executive Officer and Director (Principal Executive Officer) | March 6, 2007 | ||
/s/ Mark A. Hughes | Treasurer (Principal Accounting Officer) | March 6, 2007 | ||
/s/ Dennis F. Beardslee * | Director | March 6, 2007 | ||
/s/ R. Robert DeCamp * | Director | March 6, 2007 | ||
/s/ Jan E. Fisher * | Director | March 6, 2007 | ||
/s/ R. Bruce Haner * | Director | March 6, 2007 |
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Signature | Capacity | Date | ||
/s/ Susan E. Hartley * | Director | March 6, 2007 | ||
/s/ Karl W. Kroeck * | Director | March 6, 2007 | ||
/s/ Leo F. Lambert * | Director | March 6, 2007 | ||
/s/ Edward L. Learn * | Director | March 6, 2007 | ||
/s/ Edward H. Owlett, III * | Director | March 6, 2007 | ||
/s/ Leonard Simpson * | Director | March 6, 2007 | ||
/s/ James E. Towner * | Director | March 6, 2007 | ||
/s/ Ann M. Tyler * | Director | March 6, 2007 |
* By: | /s/ Craig G. Litchfield | ||||
Attorney-in-Fact Pursuant to Power of Attorney |
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Exhibit No. | Description | |
23.1 | Consent of Parente Randolph, LLC | |
23.2 | Consent of Ryan Beck & Co., Inc. | |