AGREEMENT AND PLAN MERGER

Agreement and Plan of Merger

You are currently viewing:

This Agreement and Plan of Merger involves

MAIN STREET TRUST, INC., | CITIZENS ACQUISITION LLC | CITIZENS FIRST FINANCIAL CORP.

. RealDealDocs™ contains millions of easily searchable legal documents and clauses from top law firms. Search for free - click here.

Title: AGREEMENT AND PLAN MERGER
Governing Law: Illinois Date: 11/8/2004
Industry: SandLs/Savings Banks Sector: Financial

AGREEMENT AND PLAN MERGER, Parties: main street trust inc. , citizens acquisition llc , citizens first financial corp.

<PAGE>

EXECUTION COPY

EXHIBIT 2.1

AGREEMENT AND PLAN OF MERGER

AMONG

MAIN STREET TRUST, INC.,

CITIZENS ACQUISITION LLC

AND

CITIZENS FIRST FINANCIAL CORP.

NOVEMBER 7, 2004

<PAGE>

TABLE OF CONTENTS

<TABLE>

ARTICLE 1

<S> <C>

Definitions...................................................................................................... 1

1.1 Definitions.................................................................................... 1

1.2 Principles of Construction..................................................................... 7

ARTICLE 2

The Merger....................................................................................................... 8

2.1 The Merger..................................................................................... 8

2.2 Effective Time; Closing........................................................................ 9

2.3 Effects of Merger.............................................................................. 9

2.4 Certificate of Formation....................................................................... 9

2.5 Operating Agreement............................................................................ 9

2.6 Manager........................................................................................ 9

2.7 MSTI's Deliveries at Closing................................................................... 9

2.8 Citizens' Deliveries at Closing................................................................ 11

2.9 Alternative Structure.......................................................................... 13

2.10 Absence of Control............................................................................. 13

ARTICLE 3

Conversion of Securities in the Merger........................................................................... 13

3.1 Additional Definitions...... .................................................................. 13

3.2 Manner of Merger............................................................................... 14

3.3 Election Procedures............................................................................ 15

3.4 Rights as Stockholders; Stock Transfers........................................................ 17

3.5 Fractional Shares.............................................................................. 17

3.6 Exchange Procedures............................................................................ 17

3.7 Anti-Dilution Provisions....................................................................... 19

3.8 Tax Free Reorganization........................................................................ 19

3.9 Dissenting Shares.............................................................................. 19

ARTICLE 4

Representations and Warranties of Citizens....................................................................... 20

4.1 Citizens Organization.......................................................................... 20

4.2 Citizens Subsidiary Organization............................................................... 20

4.3 Authorization; Enforceability.................................................................. 20

4.4 No Conflict.................................................................................... 21

4.5 Citizens Capitalization........................................................................ 21

4.6 Citizens Subsidiary Capitalization............................................................. 22

4.7 Financial Statements and Reports............................................................... 23

4.8 Books and Records.............................................................................. 24

4.9 Title to Properties............................................................................ 24

4.10 Condition and Sufficiency of Assets............................................................ 24

</TABLE>

<PAGE>

<TABLE>

<S> <C>

4.11 Loans; Allowance for Loan and Lease Losses..................................................... 25

4.12 Undisclosed Liabilities; Adverse Changes....................................................... 25

4.13 Taxes.......................................................................................... 25

4.14 Compliance with ERISA.......................................................................... 26

4.15 Compliance with Legal Requirements............................................................. 26

4.16 Legal Proceedings; Orders...................................................................... 27

4.17 Absence of Certain Changes and Events.......................................................... 27

4.18 Properties, Contracts and Employee Benefit Plans............................................... 29

4.19 No Defaults.................................................................................... 32

4.20 Insurance...................................................................................... 32

4.21 Compliance with Environmental Laws............................................................. 32

4.22 Regulatory Filings............................................................................. 33

4.23 Fiduciary Accounts............................................................................. 33

4.24 Indemnification Claims......................................................................... 33

4.25 Insider Interests.............................................................................. 34

4.26 Brokerage Commissions.......................................................................... 34

4.27 Approval Delays................................................................................ 34

4.28 Code Sections 280G and 4999.................................................................... 34

4.29 Disclosure..................................................................................... 34

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF MSTI AND ACQUISITION LLC....................................................... 35

5.1 MSTI Organization.............................................................................. 35

5.2 MSTI Subsidiary Organization................................................................... 35

5.3 Authorization; Enforceability.................................................................. 35

5.4 No Conflict.................................................................................... 36

5.5 MSTI Capitalization............................................................................ 36

5.6 MSTI Subsidiary Capitalization................................................................. 37

5.7 Financial Statements and Reports............................................................... 37

5.8 Books and Records.............................................................................. 37

5.9 Title to Properties............................................................................ 37

5.10 Condition and Sufficiency of Assets............................................................ 38

5.11 Loans; Allowance for Loan and Lease Losses..................................................... 38

5.12 Undisclosed Liabilities; Adverse Changes....................................................... 39

5.13 Taxes.......................................................................................... 39

5.14 Compliance with ERISA.......................................................................... 39

5.15 Compliance With Legal Requirements............................................................. 40

5.16 Legal Proceedings; Orders...................................................................... 40

5.17 Absence of Certain Changes and Events.......................................................... 41

5.18 Material Contracts............................................................................. 41

5.19 No Defaults.................................................................................... 41

5.20 Compliance with Environmental Laws............................................................. 42

5.21 Regulatory Filings............................................................................. 42

5.22 Indemnification Claims......................................................................... 42

5.23 Brokerage Commissions.......................................................................... 42

5.24 Approval Delays................................................................................ 42

</TABLE>

<PAGE>

<TABLE>

<S> <C>

5.25 Disclosure..................................................................................... 42

5.26 Financial Resources............................................................................ 43

ARTICLE 6

Citizens' Covenants.............................................................................................. 43

6.1 Access and Investigation....................................................................... 43

6.2 Operation of Citizens and Citizens Subsidiaries................................................ 44

6.3 Negative Covenant.............................................................................. 45

6.4 Subsequent Citizens Financial Statements; Securities Reports................................... 45

6.5 Title to Real Estate........................................................................... 46

6.6 Surveys........................................................................................ 46

6.7 Environmental Investigation.................................................................... 46

6.8 Advice of Changes.............................................................................. 46

6.9 Other Offers................................................................................... 47

6.10 Voting Agreement............................................................................... 48

6.11 Stockholders' Meeting.......................................................................... 48

6.12 Information Provided to MSTI................................................................... 48

6.13 Treatment of Employee Benefit Plans............................................................ 49

6.14 Stock Options.................................................................................. 49

6.15 Data and Item Processing Agreements............................................................ 49

6.16 Tax Matters.................................................................................... 49

6.17 Officer and Other Agreements................................................................... 49

6.18 Accounting and Other Adjustments............................................................... 49

6.19 LaSalle Loan................................................................................... 50

ARTICLE 7

MSTI's Covenants................................................................................................. 50

7.1 Access and Investigation....................................................................... 50

7.2 Subsequent MSTI Financial Statements; Securities Reports....................................... 51

7.3 Advice of Changes.............................................................................. 51

7.4 Information Provided to Citizens............................................................... 51

7.5 Indemnification; Director and Officer Insurance................................................ 52

7.6 Employee Benefits.............................................................................. 52

7.7 Authorization and Reservation of MSTI Common Stock............................................. 52

7.8 Subsidiary Board Seat.......................................................................... 52

7.9 Negative Covenants............................................................................. 52

ARTICLE 8

COVENANTS OF ALL PARTIES......................................................................................... 53

8.1 Regulatory Approvals........................................................................... 53

8.2 SEC Registration............................................................................... 53

8.3 Necessary Approvals............................................................................ 54

8.4 Customer and Employee Relationships............................................................ 54

8.5 Publicity...................................................................................... 54

8.6 Best Efforts; Cooperation...................................................................... 54

</TABLE>

iii

<PAGE>

<TABLE>

<S> <C>

ARTICLE 9

Conditions Precedent to Obligations of MSTI...................................................................... 54

9.1 Accuracy of Representations and Warranties..................................................... 54

9.2 Citizens' Performance.......................................................................... 55

9.3 Documents Satisfactory......................................................................... 55

9.4 Corporate Approval............................................................................. 55

9.5 No Proceedings................................................................................. 55

9.6 Absence of Material Adverse Changes............................................................ 55

9.7 Consents and Approvals......................................................................... 55

9.8 No Prohibition................................................................................. 55

9.9 Registration Statement......................................................................... 55

9.10 Dissenting Shares.............................................................................. 56

9.11 Employment Agreements.......................................................................... 56

9.12 Tax Opinion.................................................................................... 56

9.13 Minimum Stockholders' Equity................................................................... 56

9.14 Allowance for Loan and Lease Losses............................................................ 56

9.15 Citizens Capitalization........................................................................ 56

9.16 Transactional Expenses......................................................................... 56

ARTICLE 10

Conditions Precedent to the Obligations of Citizens.............................................................. 56

10.1 Accuracy of Representations and Warranties..................................................... 56

10.2 MSTI's Performance............................................................................. 57

10.3 Documents Satisfactory......................................................................... 57

10.4 Corporate Approval............................................................................. 57

10.5 No Proceedings................................................................................. 57

10.6 Absence of Material Adverse Changes............................................................ 57

10.7 Consents and Approvals......................................................................... 57

10.8 No Prohibitions................................................................................ 57

10.9 Registration Statement......................................................................... 57

10.10 Tax Opinion.................................................................................... 57

10.11 Fairness Opinion............................................................................... 58

ARTICLE 11

Termination...................................................................................................... 58

11.1 Reasons for Termination and Abandonment........................................................ 58

11.2 Effect of Termination.......................................................................... 59

11.3 Expenses....................................................................................... 59

11.4 Citizens Termination Payments.................................................................. 59

11.5 MSTI Termination Payments...................................................................... 61

ARTICLE 12

Miscellaneous.................................................................................................... 62

12.1 Governing Law.................................................................................. 62

12.2 Assignments, Successors and No Third Party Rights.............................................. 62

12.3 Waiver......................................................................................... 62

</TABLE>

<PAGE>

<TABLE>

<S> <C>

12.4 Notices........................................................................................ 62

12.5 Entire Agreement............................................................................... 64

12.6 Modification................................................................................... 64

12.7 Severability................................................................................... 64

12.8 Further Assurances............................................................................. 64

12.9 Survival....................................................................................... 64

12.10 Counterparts................................................................................... 64

</TABLE>

<PAGE>

EXHIBIT INDEX

A Form of Legal Opinion of Counsel to MSTI

B Form of Legal Opinion of Counsel to Citizens

C Form of Stock Option Cancellation Agreement

D Form of Voting Agreement

E-1 Form of Landefeld Employment Agreement

E-2 Form of Smiley Employment Agreement

F Description of Tax Opinion

G Index Companies

<PAGE>

SCHEDULE INDEX

Citizens Schedules

4.1 Citizens Organization

4.2 Citizens Subsidiary Organization

4.4 No Conflict

4.5 Citizens Capitalization

4.6 Citizens Subsidiary Capitalization

4.7 Financial Statements and Reports

4.9 Title to Properties

4.11 Loans; Allowance for Loan and Lease Losses

4.12 Undisclosed Liabilities; Adverse Changes

4.14 Compliance with ERISA

4.15 Compliance with Legal Requirements

4.16 Legal Proceedings; Orders

4.17 Absence of Certain Changes and Events

4.18 Properties, Contracts and Employee Benefit Plans

4.19 No Defaults

4.20 Insurance

4.21 Compliance with Environmental Laws

4.25 Insider Interests

4.26 Brokerage Commissions

4.28 Code Sections 280G and 4999

MSTI Schedules

5.4 No Conflict

5.5 MSTI Capitalization

5.9 Title to Properties

5.12 Undisclosed Liabilities; Adverse Changes

5.14 Compliance with ERISA

5.15 Compliance With Legal Requirements

5.16 Legal Proceedings; Orders

5.17 Absence of Certain Changes and Events

5.18 Material Contracts

5.19 No Defaults

5.20 Compliance with Environmental Laws

5.23 Brokerage Commissions

<PAGE>

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this "AGREEMENT") is entered into as of

November 7, 2004 (the "AGREEMENT DATE"), among MAIN STREET TRUST, INC., an

Illinois corporation ("MSTI"), CITIZENS FIRST FINANCIAL CORP., a Delaware

corporation ("CITIZENS"), and CITIZENS ACQUISITION LLC, a Delaware limited

liability company ("ACQUISITION LLC").

RECITALS

A. The parties to this Agreement desire to effect a reorganization whereby

MSTI desires to acquire control of Citizens through the merger (the "MERGER") of

Citizens with and into Acquisition LLC, with Acquisition LLC being the surviving

entity as a wholly owned subsidiary of MSTI (the "SURVIVING ENTITY").

B. Pursuant to the terms of this Agreement, each outstanding share of the

common stock of Citizens, $0.01 par value per share ("CITIZENS COMMON STOCK"),

shall be converted at the effective time of the Merger into the right to

receive: (a) shares of common stock of MSTI, $0.01 par value per share ("MSTI

COMMON STOCK"); (b) cash; or (c) a combination of MSTI Common Stock and cash,

all in the amounts set forth in this Agreement.

C. The parties desire to make certain representations, warranties and

agreements in connection with the Merger and also agree to certain prescribed

conditions to the Merger.

AGREEMENTS

In consideration of the foregoing premises and the following mutual

promises, covenants and agreements, the parties hereby agree as follows:

ARTICLE 1

DEFINITIONS

1.1 DEFINITIONS. In addition to those terms defined throughout this

Agreement, the following terms, when used herein, shall have the following

meanings.

(a) "ADJUSTED STOCKHOLDERS' EQUITY" means the consolidated tangible

stockholders' equity of Citizens, calculated in accordance with GAAP and

reflecting, among other things, the accrued income and expenses of Citizens for

all periods ending on or prior to the Determination Date, but adjusted to

exclude: (i) the recognition of or accrual for all expenses paid or incurred or

projected to be paid or incurred by Citizens or the Bank in connection with this

Agreement and the Contemplated Transactions, including Citizens Transactional

Expenses and any Remediation Cost (as defined in SECTION 6.7); (ii) changes in

stockholders' equity resulting from the exercise or cash-out of any Citizens

Stock Options from September 30, 2004, to the Closing Date (as defined below);

(iii) any realized gains or losses resulting from sales of investment securities

effected by Citizens or any Citizens Subsidiary between September 30, 2004, and

the Closing Date; (iv) any realized gains on the sale of any branch or on any

other

<PAGE>

extraordinary sales; (v) any adjustments made in accordance with Statement of

Financial Accounting Standard No. 115; and (vi) any accounting or other

adjustments made pursuant to SECTION 6.18. Citizens' Adjusted Stockholders'

Equity shall be calculated by Citizens' independent auditors, in consultation

with MSTI's independent auditors, as of the close of business on the

Determination Date using reasonable estimates of revenues and expenses where

actual amounts are not available. For purposes of this calculation, Citizens

shall assume a tax rate of 34%. Such calculation shall be subject to

verification and approval prior to the Closing (as defined below) by MSTI's

independent auditors, which approval shall not be unreasonably withheld.

(b) "AFFILIATE" means with respect to:

(i) a particular individual: (A) each other member of such

individual's Family; (B) any Person that is directly or indirectly controlled by

such individual or one or more members of such individual's Family; (C) any

Person in which such individual or members of such individual's Family hold

(individually or in the aggregate) a Material Interest; and (D) any Person with

respect to which such individual or one or more members of such individual's

Family serves as a director, officer, partner, executor or trustee (or in a

similar capacity); and

(ii) a specified Person other than an individual: (A) any

Person that directly or indirectly controls, is directly or indirectly

controlled by, or is directly or indirectly under common control with such

specified Person; (B) any Person that holds a Material Interest in such

specified Person; (C) each Person that serves as a director, officer, partner,

executor or trustee of such specified Person (or in a similar capacity); (D) any

Person in which such specified Person holds a Material Interest; (E) any Person

with respect to which such specified Person serves as a general partner or a

trustee (or in a similar capacity); and (F) any Affiliate of any individual

described in clause (B) or (C) of this subsection (ii).

savings bank with its main office located in Bloomington, Illinois, and a

wholly-owned subsidiary of Citizens.

(d) "BEST EFFORTS" means the efforts that a prudent Person desirous

of achieving a result would use in similar circumstances to ensure that such

result is achieved as expeditiously as possible, provided, however, that an

obligation to use Best Efforts under this Agreement does not require the Person

subject to that obligation to take actions that would result in a materially

adverse change in the benefits to such Person of this Agreement and the

Contemplated Transactions.

(e) "BREACH" means with respect to a representation, warranty,

covenant, obligation or other provision of this Agreement or any instrument

delivered pursuant to this Agreement: (i) any inaccuracy in or breach of, or any

failure to perform or comply with, such representation, warranty, covenant,

obligation or other provision; or (ii) any claim (by any Person) or other

occurrence or circumstance that is or was inconsistent with such representation,

warranty, covenant, obligation or other provision, and the term "Breach" means

any such inaccuracy, breach, failure, claim, occurrence or circumstance.

<PAGE>

(f) "BUSINESS DAY" means any day on which the trading of stock

occurs on the OTCBB.

(g) "CALL REPORTS" means the quarterly reports of income and

condition filed by the Bank with Regulatory Authorities.

(h) "CITIZENS SEC DOCUMENTS" means the annual, quarterly and other

reports, schedules, forms, statements and other documents (including exhibits

and all other information incorporated therein) filed by Citizens with the SEC.

(i) "CITIZENS STOCKHOLDER" means a holder of record of Citizens

Common Stock.

(j) "CITIZENS STOCK OPTION" means each of the stock options granted

by Citizens prior to the Agreement Date to a person under the terms of the

Citizens Stock Option Plan or otherwise, and that is outstanding on the

Agreement Date.

(k) "CITIZENS STOCK OPTION PLAN" means the Citizens 1997 Stock Based

Incentive Plan.

(l) "CITIZENS SUBSIDIARY" means any Subsidiary of Citizens.

(m) "CITIZENS TRANSACTIONAL EXPENSES" means: (i) all transaction

costs of Citizens necessary to consummate the Contemplated Transactions; (ii)

the aggregate fees and expenses of attorneys, accountants, consultants,

financial advisors and other professional advisors incurred by Citizens in

connection with this Agreement and the Contemplated Transactions; (iii) the

costs of preparing, printing and mailing the Proxy Statement to Citizens

Stockholders and obtaining the approval of Citizens Stockholders of the

Contemplated Transactions; (iv) all amounts paid or payable to any director,

officer or employee of Citizens or any Citizens Subsidiary under any Contract or

plan as a result of the Contemplated Transactions; and (v) all other non-payroll

related costs and expenses in each case incurred or to be incurred by Citizens

through the Effective Time in connection with this Agreement and the

Contemplated Transactions.

(n) "CODE" means the Internal Revenue Code of 1986, as amended.

(o) "CONTEMPLATED TRANSACTIONS" means all of the transactions

contemplated by this Agreement, including: (i) the Merger; (ii) the performance

by MSTI, Acquisition LLC and Citizens of their respective covenants and

obligations under this Agreement; (iii) MSTI's acquisition of control of

Citizens and, indirectly, the Bank; and (iv) MSTI's issuance of registered

shares of MSTI Common Stock and payment of cash in exchange for shares of

Citizens Common Stock.

(p) "CONTRACT" means any agreement, contract, obligation, promise or

understanding (whether written or oral and whether express or implied) that is

legally binding: (i) under which a Person has or may acquire any rights; (ii)

under which such Person has or may

<PAGE>

become subject to any obligation or liability; or (iii) by which such Person or

any of the assets owned or used by such Person is or may become bound.

(q) "CRA" means the Community Reinvestment Act, as amended.

(r) "DELAWARE ACT" means the Delaware Limited Liability Company Act,

as amended.

(s) "DETERMINATION DATE" means the close of business on the last

Business Day preceding the Closing Date.

(t) "DFPR" means all the Illinois Department of Professional and

Financial Regulation.

(u) "DGCL" means the Delaware General Corporation Law, as amended.

(v) "ERISA" means the Employee Retirement Income Security Act of

1974, as amended.

(w) "EXCHANGE ACT" means the Securities Exchange Act of 1934, as

amended.

(x) "FAMILY" means with respect to an individual: (i) the

individual; (ii) the individual's spouse and former spouses; (iii) any other

natural person who is related to the individual or the individual's spouse

within the second degree; and (iv) any other natural person who resides with

such individual.

(y) "FDIC" means the Federal Deposit Insurance Corporation.

(z) "FEDERAL RESERVE" means the Board of Governors of the Federal

Reserve System.

(aa) "GAAP" means generally accepted accounting principles in the

United States consistent with those used in the preparation of the most recent

audited consolidated financial statements of MSTI or Citizens, as the case may

be.

(bb) "INDEX VALUE" means, for a given date, the average of the

closing prices per share of each of the common stock of the companies listed on

Exhibit G as reported on the New York Stock Exchange, The Nasdaq Stock Market or

the American Stock Exchange, as applicable, as of such date.

(cc) "KNOWLEDGE" with respect to:

(i) an individual means that such person will be deemed to

have "Knowledge" of a particular fact or other matter if: (A) such individual is

actually aware of such fact or other matter; or (B) a prudent individual could

be expected to discover or otherwise become aware of such fact or other matter

in the course of conducting a reasonably comprehensive investigation concerning

the existence of such fact or other matter; and

<PAGE>

(ii) a Person (other than an individual) means that such

Person will be deemed to have "Knowledge" of a particular fact or other matter

if any individual who is serving, or who has served in the past twelve (12)

months as a director, outside advisor, officer, manager, partner, executor or

trustee of such Person (or in any similar capacity) has Knowledge of such fact

or other matter.

(dd) "LEGAL REQUIREMENT" means any federal, state, local, municipal,

foreign, international, multinational or other Order, constitution, law,

ordinance, regulation, rule, policy statement, directive, statute or treaty.

(ee) "MATERIAL ADVERSE EFFECT" with respect to a Person (other than

an individual) means, a material adverse effect (whether or not required to be

accrued or disclosed under Statement of Financial Accounting Standards No. 5):

(i) on the condition (financial or otherwise), properties, assets, liabilities,

businesses or results of operations of such Person; or (ii) on the ability of

such Person to perform its obligations under this Agreement on a timely basis,

but not including the effect of any change of any Legal Requirement or economic

event affecting financial institutions generally.

(ff) "MATERIAL INTEREST" means the direct or indirect beneficial

ownership (as currently defined in Rule 13d-3 under the Exchange Act) of voting

securities or other voting interests representing at least ten percent (10%) of

the outstanding voting power of a Person or equity securities or other equity

interests representing at least ten percent (10%) of the outstanding equity

securities or equity interests in a Person.

(gg) "MSTI SEC DOCUMENTS" means the annual, quarterly and other

reports, schedules, forms, statements and other documents (including exhibits

and all other information incorporated therein) filed by MSTI with the SEC.

(hh) "MSTI SUBSIDIARY" means any Subsidiary of MSTI.

(ii) "OLD CERTIFICATES" means certificates formerly representing

shares of Citizens Common Stock.

(jj) "ORDER" means any award, decision, injunction, judgment, order,

ruling, extraordinary supervisory letter, policy statement, memorandum of

understanding, resolution, agreement, directive, subpoena or verdict entered,

issued, made, rendered or required by any court, administrative or other

governmental agency, including any Regulatory Authority, or by any arbitrator.

(kk) "ORDINARY COURSE OF BUSINESS" means any action taken by a

Person only if such action:

(i) is consistent with the past practices of such Person and

is taken in the ordinary course of the normal day-to-day operations of such

Person;

<PAGE>

(ii) is not required to be authorized by the board of

directors of such Person (or by any Person or group of Persons exercising

similar authority), other than loan approvals for customers of a financial

institution; and

(iii) is similar in nature and magnitude to actions

customarily taken, without any authorization by the board of directors (or by

any Person or group of Persons exercising similar authority), other than loan

approvals for customers of a financial institution, in the ordinary course of

the normal day-to-day operations of other Persons that are in the same line of

business as such Person.

(ll) "OTCBB" means the over-the-counter bulletin board.

(mm) "OTS" means the office of Thrift Supervision.

(nn) "PER SHARE CASH CONSIDERATION" means an amount equal to

Thirty-Five Dollars ($35.00), in cash.

(oo) "PER SHARE STOCK CONSIDERATION" means 1.1051 shares of MSTI

Common Stock, calculated as the quotient of (i) Thirty-Five Dollars ($35.00),

divided by (ii) Thirty-One Dollars and Sixty-Seven Cents ($31.67).

(pp) "PERSON" means any individual, corporation (including any

non-profit corporation), general or limited partnership, limited liability

company, joint venture, estate, trust, association, organization, labor union or

other entity or Regulatory Authority.

(qq) "PROCEEDING" means any action, arbitration, audit, hearing,

investigation, litigation or suit (whether civil, criminal, administrative,

investigative or informal) commenced, brought, conducted or heard by or before,

or otherwise involving, any judicial or governmental authority, including a

Regulatory Authority, or arbitrator.

(rr) "PROXY STATEMENT" means the proxy statement-prospectus to be

used by Citizens in connection with the solicitation by its board of directors

of proxies for use at the meeting of its stockholders to be convened for the

purpose of voting on this Agreement and the Merger, pursuant to SECTION 6.11.

(ss) "REGULATORY AUTHORITY" means any federal, state or local

governmental body, agency, court or authority that, under applicable Legal

Requirements: (i) has supervisory, judicial, administrative, police,

enforcement, taxing or other power or authority over Citizens, MSTI or any of

their respective Subsidiaries; (ii) is required to approve, or give its consent

to the Contemplated Transactions; or (iii) with which a filing must be made in

connection therewith, including, in any case, the Federal Reserve, the DFPR, the

FDIC and the OTS.

(tt) "REPRESENTATIVE" means with respect to a particular Person, any

director, officer, manager, employee, agent, consultant, advisor or other

representative of such Person, including legal counsel, accountants and

financial advisors.

(uu) "SEC" means the Securities and Exchange Commission.

<PAGE>

(vv) "SECURITIES ACT" means the Securities Act of 1933, as amended.

(ww) "SUBSIDIARY" means with respect to any Person (the "OWNER"),

any corporation or other Person of which securities or other interests having

the power to elect a majority of that corporation's or other Person's board of

directors or similar governing body, or otherwise having the power to direct the

business and policies of that corporation or other Person (other than securities

or other interests having such power only upon the happening of a contingency

that has not occurred) are held by the Owner or one or more of its Subsidiaries.

(xx) "TAX" means any tax (including any income tax, capital gains

tax, value added tax, sales tax, property tax, gift tax or estate tax), levy,

assessment, tariff, duty (including any customs duty), deficiency or other fee,

and any related charge or amount (including any fine, penalty, interest or

addition to tax), imposed, assessed or collected by or under the authority of

any Regulatory Authority or payable pursuant to any tax sharing agreement or any

other Contract relating to the sharing or payment of any such tax, levy,

assessment, tariff, duty, deficiency or fee.

(yy) "TAX RETURN" means any return (including any information

return), report, statement, schedule, notice, form or other document or

information filed with or submitted to, or required to be filed with or

submitted to, any Regulatory Authority in connection with the determination,

assessment, collection or payment of any Tax or in connection with the

administration, implementation, or enforcement of or compliance with any Legal

Requirement relating to any Tax.

(zz) "THREATENED" means a claim, Proceeding, dispute, action or

other matter for which any demand or statement has been made (orally or in

writing) or any notice has been given (orally or in writing), or if any other

event has occurred or any other circumstances exist, that would lead a prudent

Person to conclude that such a claim, Proceeding, dispute, action or other

matter is likely to be asserted, commenced, taken or otherwise pursued in the

future.

1.2 PRINCIPLES OF CONSTRUCTION.

(a) In this Agreement, unless otherwise stated or the context

otherwise requires, the following uses apply: (i) actions permitted under this

Agreement may be taken at any time and from time to time in the actor's

reasonable discretion; (ii) references to a statute shall refer to the statute

and any successor statute, and to all regulations promulgated under or

implementing the statute or its successor, as in effect at the relevant time;

(iii) in computing periods from a specified date to a later specified date, the

words "FROM" and "COMMENCING ON" (and the like) mean "FROM AND INCLUDING," and

the words "TO," "UNTIL" and "ENDING on" (and the like) mean "TO, BUT EXCLUDING";

(iv) references to a governmental or quasi-governmental agency, authority or

instrumentality shall also refer to a regulatory body that succeeds to the

functions of the agency, authority or instrumentality; (v) indications of time

of day mean Champaign, Illinois time; (vi) "INCLUDING" means "INCLUDING, BUT NOT

LIMITED TO"; (vii) all references to sections, schedules and exhibits are to

sections, schedules and exhibits in or to this Agreement unless otherwise

specified; (viii) all words used in this Agreement will be construed to be of

such gender or number as the circumstances and context require; (ix) the

captions and

<PAGE>

headings of articles, sections, schedules and exhibits appearing in or attached

to this Agreement have been inserted solely for convenience of reference and

shall not be considered a part of this Agreement nor shall any of them affect

the meaning or interpretation of this Agreement or any of its provisions; and

(x) any reference to a document or set of documents in this Agreement, and the

rights and obligations of the parties under any such documents, shall mean such

document or documents as amended from time to time, and any and all

modifications, extensions, renewals, substitutions or replacements thereof.

(b) The Schedules referred to in this Agreement consist of the

agreements and other documentation described and referred to in this Agreement,

which Schedules were delivered by Citizens to MSTI or by MSTI to Citizens, as

applicable, before the Agreement Date. The disclosures in the Schedules, and

those in any supplement thereto, shall relate only to the representations and

warranties in the section of this Agreement to which they reasonably relate and

not to any other representation or warranty in this Agreement. In the event of

any inconsistency between the statements in the body of this Agreement and those

in the Schedules (other than an exception expressly set forth as such in the

Schedules with respect to a specifically identified representation or warranty),

the statements in the body of this Agreement will control.

construed in accordance with GAAP.

(d) With regard to each and every term and condition of this

Agreement and any and all agreements and instruments subject to the terms

hereof, the parties hereto understand and agree that the same have or has been

mutually negotiated, prepared and drafted, and that if at any time the parties

hereto desire or are required to interpret or construe any such term or

condition or any agreement or instrument subject hereto, no consideration shall

be given to the issue of which party hereto actually prepared, drafted or

requested any term or condition of this Agreement or any agreement or instrument

subject hereto.

ARTICLE 2

THE MERGER

2.1 THE MERGER. Provided that this Agreement shall not have been

terminated in accordance with its express terms, upon the terms and subject to

the conditions of this Agreement and in accordance with the applicable

provisions of the DGCL and the Delaware Act, at the Effective Time (as defined

below), Citizens shall be merged with and into Acquisition LLC pursuant to the

provisions of, and with the effects provided in, the DGCL and the Delaware Act,

the separate corporate existence of Citizens shall cease and Acquisition LLC

will be the Surviving Entity. As a result of the Merger, each share of Citizens

Common Stock issued and outstanding immediately prior to the Effective Time,

other than Dissenting Shares (as defined below), will be converted into the

right to receive the Merger Consideration as defined and provided in ARTICLE 3.

<PAGE>

2.2 EFFECTIVE TIME; CLOSING.

(a) Provided that this Agreement shall not have been terminated in

accordance with its express terms, the closing of the Merger (the "CLOSING")

shall occur through the mail or at a place that is mutually acceptable to MSTI

and Citizens, or if they fail to agree, at the offices of Barack Ferrazzano

Kirschbaum Perlman & Nagelberg LLP, located at 333 W. Wacker Drive, Suite 2700,

Chicago, Illinois 60606, at 10:00 a.m. on the date that is ten (10) Business

Days after the end of the calendar month in which all of the following

conditions are satisfied: (i) the receipt of the last required regulatory

approval of the Merger and the expiration of the last requisite waiting period;

and (ii) the satisfaction or waiver in writing of all of the conditions provided

for in ARTICLES 9 AND 10; whichever is later, or at such other time as Citizens

and MSTI may agree in writing (the "CLOSING DATE"). Subject to the provisions of

ARTICLE 11, failure to consummate the Merger on the date and time and at the

place determined pursuant to this Section will not result in the termination of

this Agreement and will not relieve any party of any obligation under this

Agreement.

(b) The parties hereto agree to file an appropriate certificate of

merger as contemplated by Section 264 of the DGCL and Section 18-209 of the

Delaware Act, with the Secretary of State of the State of Delaware. The Merger

shall be effective on the Closing Date and at the time stated in the certificate

of merger filed with the Secretary of State of the State of Delaware (the

"EFFECTIVE TIME").

2.3 EFFECTS OF MERGER. At the Effective Time, the effect of the Merger

shall be as provided in Section 264 of the DGCL and Section 18-209 of the

Delaware Act. Without limiting the generality of the foregoing, at the Effective

Time, all the property, rights, privileges, powers and franchises of Acquisition

LLC and Citizens shall be vested in the Surviving Entity, and all debts,

liabilities and duties of Acquisition LLC and Citizens shall become the debts,

liabilities and duties of the Surviving Entity.

2.4 CERTIFICATE OF FORMATION. At the Effective Time, the certificate of

formation of Acquisition LLC, as in effect immediately prior to the Effective

Time, shall be the certificate of formation of the Surviving Entity until

thereafter amended in accordance with applicable law.

2.5 OPERATING AGREEMENT. At the Effective Time, the operating agreement of

Acquisition LLC, as in effect immediately prior to the Effective Time, shall be

the operating agreement of the Surviving Entity until thereafter amended in

accordance with applicable law.

2.6 MANAGER. From and after the Effective Time, until duly changed in

compliance with applicable law and the certificate of formation and operating

agreement of the Surviving Entity, the manager of the Surviving Entity shall be

the manager of Acquisition LLC immediately prior to the Effective Time.

2.7 MSTI'S DELIVERIES AT CLOSING. At the Closing, MSTI shall deliver or

cause to be delivered the following items to or on behalf of Citizens:

<PAGE>

(a) a good standing certificate for MSTI issued by the Secretary of

State of the State of Illinois and dated not more than fifteen (15) Business

Days prior to the Closing Date;

(b) a copy of the articles of incorporation of MSTI certified not

more than fifteen (15) Business Days prior to the Closing Date by the Secretary

of State of the State of Illinois;

MSTI dated the Closing Date certifying a copy of the bylaws of MSTI;

(d) copies of resolutions of the board of directors of MSTI

approving this Agreement and the consummation of the Contemplated Transactions,

certified as of the Closing Date by the Secretary or any Assistant Secretary of

MSTI;

(e) copies of resolutions of the manager and the sole member of

Acquisition LLC approving this Agreement and the consummation of the

Contemplated Transactions, certified as of the Closing Date by the manager of

Acquisition LLC;

(f) a good standing certificate for Acquisition LLC issued by the

Secretary of State of the State of Delaware, and dated not more than fifteen

(15) Business Days prior to the Closing Date;

(g) a copy of the certificate of formation of Acquisition LLC

certified not more than fifteen (15) Business Days prior to the Closing Date by

the Secretary of State of the State of Delaware;

(h) a certificate of the manager of Acquisition LLC dated the

Closing Date certifying a copy of the operating agreement of Acquisition LLC;

(i) a certificate executed by the manager of Acquisition LLC, dated

the Closing Date, stating that: (i) all of the representations and warranties of

Acquisition LLC set forth in this Agreement, as the same may have been updated

pursuant to SECTION 7.3, are true and correct in all material respects with the

same force and effect as if all of such representations and warranties were made

at the Closing Date, provided, however, that to the extent such representations

and warranties expressly relate to an earlier date, such representations shall

be true and correct in all material respects on and as of such earlier date, and

provided further, that to the extent that representations and warranties are

made in this Agreement subject to a standard of materiality or Knowledge, such

representations and warranties shall be true and correct in all respects; and

(ii) Acquisition LLC has performed or complied in all material respects with all

of the covenants and obligations to be performed or complied with by it under

the terms of this Agreement on or prior to the Closing Date, provided, however,

that to the extent performance and compliance with such covenants and

obligations are subject in this Agreement to a standard of materiality,

Acquisition LLC shall have performed and complied in all respects with such

covenants and obligations;

(j) a certificate executed by the Chief Executive Officer or

Executive Vice President, and by the Secretary or any Assistant Secretary of

MSTI, dated the Closing Date, stating

<PAGE>

that: (i) all of the representations and warranties of MSTI set forth in this

Agreement, as the same may have been updated pursuant to SECTION 7.3, are true

and correct in all material respects with the same force and effect as if all of

such representations and warranties were made at the Closing Date, provided,

however, that to the extent such representations and warranties expressly relate

to an earlier date, such representations shall be true and correct in all

material respects on and as of such earlier date, and provided further, that to

the extent that representations and warranties are made in this Agreement

subject to a standard of materiality or Knowledge, such representations and

warranties shall be true and correct in all respects; and (ii) MSTI has

performed or complied in all material respects with all of the covenants and

obligations to be performed or complied with by it under the terms of this

Agreement on or prior to the Closing Date, provided, however, that to the extent

performance and compliance with such covenants and obligations are subject in

this Agreement to a standard of materiality, MSTI shall have performed and

complied in all respects with such covenants and obligations;

(k) a legal opinion of MSTI's counsel dated the Closing Date in the

form attached as Exhibit A;

(l) the tax opinion described in SECTION 10.10; and

(m) such other documents as Citizens may reasonably request.

All of such items shall be reasonably satisfactory in form and substance to

Citizens and its counsel.

2.8 CITIZENS' DELIVERIES AT CLOSING. At the Closing, Citizens shall

deliver or cause to be delivered the following items to or on behalf of MSTI:

(a) a good standing certificate for Citizens issued by each of the

Secretary of State of the State of Delaware and the Secretary of State of the

State of Illinois and dated in each case not more than fifteen (15) Business

Days prior to the Closing Date;

(b) a copy of the certificate of incorporation of Citizens certified

not more than fifteen (15) Business Days prior to the Closing Date by the

Secretary of State of the State of Delaware;

Citizens dated the Closing Date certifying a copy of the bylaws of Citizens;

(d) copies of resolutions of the board of directors and Citizens

Stockholders authorizing and approving this Agreement and the consummation of

the Contemplated Transactions certified as of the Closing Date by the Secretary

or any Assistant Secretary of Citizens;

(e) a good standing certificate for the Bank issued by the DFPR and

dated not more than fifteen (15) Business Days prior to the Closing Date;

<PAGE>

(f) a copy of the charter of the Bank certified by the DFPR and

dated not more than fifteen (15) Business Days prior to the Closing Date;

(g) a certificate of the Cashier of the Bank dated the Closing Date

certifying a copy of the bylaws of the Bank and stating that there have been no

further amendments to the charter of the Bank delivered pursuant to the

immediately preceding paragraph of this Section;

(h) a certificate executed by the Chief Executive Officer or

Executive Vice President, and by the Secretary or any Assistant Secretary of

Citizens, dated the Closing Date, stating that: (i) all of the representations

and warranties of Citizens set forth in this Agreement, as the same may have

been updated pursuant to SECTION 6.8, are true and correct in all material

respects with the same force and effect as if all of such representations and

warranties were made at the Closing Date, provided, however, that to the extent

such representations and warranties expressly relate to an earlier date, such

representations shall be true and correct in all material respects on and as of

such earlier date, and provided further, that to the extent that representations

and warranties are made in this Agreement subject to a standard of materiality

or Knowledge, such representations and warranties shall be true and correct in

all respects; and (ii) Citizens has performed or complied in all material

respects with all of the covenants and obligations to be performed or complied

with by it under the terms of this Agreement on or prior to the Closing Date,

provided, however, that to the extent performance and compliance with such

covenants and obligations are subject in this Agreement to a standard of

materiality, Citizens shall have performed and complied in all respects with

such covenants and obligations; and

(i) a list of all Citizens Stockholders as of the Determination Date

and a list of all Persons as of the Determination Date who have the right at any

time to acquire shares of Citizens Common Stock, certified in each case by the

Secretary or any Assistant Secretary of Citizens;

(j) owner's title insurance policies issued by Chicago Title

Insurance Company or such other title insurance company as is reasonably

acceptable to MSTI in accordance with the title commitments delivered by

Citizens to MSTI in accordance with SECTION 6.5, and in each case, in policy

amounts at least equal to the book value of the property covered by such

policies, as shown on the books and records of Citizens or the Bank;

(k) a legal opinion of Citizens' counsel dated the Closing Date in

the form attached as Exhibit B;

(l) a certificate of each of Citizens' legal counsel, accountants

and financial advisor or investment banker, if any, representing that all of

their respective fees and expenses relating to the Contemplated Transactions

incurred by Citizens prior to and including the Effective Time have been paid in

full;

(m) a resignation from each of the directors and executive officers

of Citizens and the Bank, all as the same may be identified in writing by MSTI,

from such individual's position as a director and/or an officer of Citizens

and/or the Bank, as the case may be;

<PAGE>

(n) a Stock Option Cancellation Agreement between Citizens and any

holder of Citizens Stock Options, in the form attached as Exhibit C; and

(o) such other documents as MSTI may reasonably request.

All of such items shall be reasonably satisfactory in form and substance to MSTI

and its counsel.

2.9 ALTERNATIVE STRUCTURE. Notwithstanding anything contained herein to

the contrary, upon receipt of Citizens' prior written consent (which consent

shall not be unreasonably withheld), MSTI may specify, for any reasonable

business, tax or regulatory purpose, that, before the Effective Time, MSTI,

Acquisition LLC and Citizens shall enter into transactions other than those

described in this Agreement to effect the purposes of this Agreement, including

the merger of Citizens with any Affiliate of MSTI, and the parties to this

Agreement shall take all action necessary and appropriate to effect, or cause to

be effected, such transactions; provided, however, that no such proposed change

in the structure of the transactions contemplated in this Agreement shall delay

the Closing Date (if such a date has already been firmly established) by more

than thirty (30) Business Days or adversely affect the economic benefits, the

form of consideration or the tax effect of the Merger at the Effective Time to

the Citizens Stockholders.

2.10 ABSENCE OF CONTROL. Subject to any specific provisions of this

Agreement, it is the intent of the parties to this Agreement that neither MSTI

nor Citizens by reason of this Agreement shall be deemed (until consummation of

the Contemplated Transactions) to control, directly or indirectly, the other

party or any of its respective Subsidiaries and shall not exercise, or be deemed

to exercise, directly or indirectly, a controlling influence over the management

or policies of such other party or any of its respective Subsidiaries.

ARTICLE 3

CONVERSION OF SECURITIES IN THE MERGER

3.1 ADDITIONAL DEFINITIONS. In addition to those terms defined throughout

this Agreement, the following terms, when used herein, shall have the following

meanings:

(a) "AGGREGATE CASH ELECTION NUMBER" means the aggregate number of

Cash Election Shares, Non-Election Shares and Mandatory Election Shares (as each

such term is defined in SECTION 3.3(B)) held by all Citizens Stockholders.

(b) "AGGREGATE STOCK ELECTION NUMBER" means the aggregate number of

Stock Election Shares (as defined in SECTION 3.3(B)) held by all Election

Stockholders.

the Aggregate Cash Election Number exceeds the Required Cash Election Number.

(d) "CASH ELECTION PERCENTAGE" means, for each Election Stockholder,

the quotient of: (i) such stockholder's Individual Cash Election Number; divided

by (ii) the Aggregate Cash Election Number.

<PAGE>

(e) "ELECTION STOCKHOLDER" means a Citizens Stockholder that is not

a Mandatory Cash Stockholder.

(f) "INDIVIDUAL CASH ELECTION NUMBER" means the number of Cash

Election Shares and Non-Election Shares held by an Election Stockholder.

(g) "INDIVIDUAL STOCK ELECTION NUMBER" means the number of Stock

Election Shares held by an Election Stockholder.

(h) "MANDATORY CASH STOCKHOLDER" means a Citizens Stockholder that

holds fewer than one hundred (100) shares of Citizens Common Stock at the

Effective Time.

(i) "OUTSTANDING CITIZENS SHARES" means the number of shares of

Citizens Common Stock issued and outstanding immediately prior to the Effective

Time, excluding any shares held as treasury stock.

(j) "STOCK ELECTION EXCESS AMOUNT" means the amount, if any, by

which the Aggregate Stock Election Number exceeds the Required Stock Election

Number.

(k) "STOCK ELECTION PERCENTAGE" means, for each Election

Stockholder, the quotient of: (i) such stockholder's Individual Stock Election

Number; divided by (ii) the Aggregate Stock Election Number.

(l) "REQUIRED CASH ELECTION NUMBER" means the number equal to fifty

percent (50%) of the Outstanding Citizens Shares.

(m) "REQUIRED STOCK ELECTION NUMBER" means the number equal to fifty

percent (50%) of the Outstanding Citizens Shares.

3.2 MANNER OF MERGER. Subject to the provisions of this Agreement, at the

Effective Time, automatically by virtue of the Merger and without any action on

the part of any Person:

(a) Each membership interest of Acquisition LLC issued and

outstanding immediately prior to the Effective Time shall be converted into one

validly issued, fully paid and non-assessable membership interest of the

Surviving Entity.

(b) Each share of Citizens Common Stock held by any Election

Stockholder (other than shares held by Citizens or any Citizens Subsidiary,

except for shares held by any of them in a fiduciary capacity, and Dissenting

Shares) shall be converted, subject to the election of the holder as provided

in, and subject to the limitations set forth in, this Article, into: (i) the Per

Share Stock Consideration, or (ii) the Per Share Cash Consideration. The Per

Share Cash Consideration that may be paid, on an aggregate basis, to Citizens

Stockholders is referred to herein as the "CASH CONSIDERATION," and the Per

Share Stock Consideration that may be paid, on an aggregate basis, to Citizens

Stockholders is referred to herein as the "STOCK CONSIDERATION." The Cash

Consideration and the Stock Consideration are referred to herein collectively as

the "MERGER CONSIDERATION." Each Outstanding Citizens Share held by any

Mandatory Cash Stockholder (other than shares held by Citizens or any Citizens

Subsidiary, except for shares held

<PAGE>

by any of them in a fiduciary capacity, and Dissenting Shares) shall be

converted into the right to receive the Per Share Cash Consideration.

immediately prior to the Effective Time shall be cancelled and retired at the

Effective Time and no consideration shall be issued in exchange therefor.

(d) An Election Stockholder may, upon the making of a proper

election under SECTION 3.3, elect to receive all Stock Consideration, all Cash

Consideration or a combination of Stock Consideration and Cash Consideration in

exchange for their shares of Citizens Common Stock.

(e) Notwithstanding any other provision contained in this Agreement,

on an aggregate basis, fifty percent (50%) of the Outstanding Citizens Shares

shall be converted into the Stock Consideration and the remaining fifty percent

(50%) of the Outstanding Citizens Shares shall be converted into the Cash

Consideration.

3.3 ELECTION PROCEDURES.

(a) An election form in such form as MSTI and Citizens shall

mutually agree (an "ELECTION FORM") shall be mailed no later than the Mailing

Date (as defined below) to each Election Stockholder as of the Effective Time.

The "MAILING DATE" shall be the date that is ten (10) Business Days after the

Effective Time.

(b) Each Election Form shall entitle the Election Stockholder (or

the beneficial owner of Citizens Common Stock through appropriate and customary

documentation and instructions) to: (i) elect to receive the Stock Consideration

for all of such holder's shares (a "STOCK ELECTION"); (ii) elect to receive the

Cash Consideration for all of such holder's shares (a "CASH ELECTION"); (iii)

elect to receive the Stock Consideration with respect to some of such holder's

shares and the Cash Consideration with respect to such holder's remaining shares

(a "MIXED ELECTION"), provided that no Citizens Stockholder may make a Mixed

Election in which such Citizens Stockholder elects to receive the Stock

Consideration with respect to fewer than one hundred (100) of such holder's

shares; or (iv) make no valid election as to the receipt of the Cash

Consideration or the Stock Consideration (a "NON-ELECTION"). Holders of record

of shares of Citizens Common Stock who hold such shares as nominees, trustees or

in other representative capacities (a "SHARE REPRESENTATIVE") may submit

multiple Election Forms, provided that such Share Representative certifies that

each such Election Form covers all the shares of Citizens Common Stock held by

that Share Representative for a particular beneficial owner. Shares of Citizens

Common Stock as to which a Cash Election has been made (including pursuant to a

Mixed Election) are referred to herein as "CASH ELECTION SHARES." Shares of

Citizens Common Stock as to which a Stock Election has been made (including

pursuant to a Mixed Election) are referred to herein as "STOCK ELECTION SHARES."

Shares of Citizens Common Stock as to which no election has been made are

referred to as "NON-ELECTION SHARES." Shares of Citizens Common Stock held by

any Mandatory Cash Stockholder are referred to herein as "MANDATORY ELECTION

SHARES." For purposes of this Section, Dissenting Shares shall be deemed Cash

Election Shares.

<PAGE>

received by BankIllinois, an Illinois state bank with its main office located in

Champaign, Illinois, and an MSTI Subsidiary (the "EXCHANGE Agent"), on or before

5:00 p.m. on the thirtieth (30th) Business Day following the Mailing Date (or

such other time and date as MSTI and Citizens may mutually agree) (the "ELECTION

DEADLINE"). An election shall have been properly made only if the Exchange Agent

shall have actually received a properly completed Election Form by the Election

Deadline. An Election Form shall be deemed properly completed only if

accompanied by one or more Old Certificates (or customary affidavits and, if

required by MSTI, indemnification and a surety bond, regarding the loss or

destruction of such Old Certificates or the guaranteed delivery of such Old

Certificates) representing all shares of Citizens Common Stock covered by such

Election Form, together with a duly executed Transmittal Letter included with

the Election Form. Subject to the terms of this Agreement and of the Election

Form, the Exchange Agent shall have reasonable discretion to determine whether

any election has been properly or timely made and to disregard immaterial

defects in any Election Form, and any good faith decisions of the Exchange Agent

regarding such matters shall be binding and conclusive.

(d) Within ten (10) Business Days after the Election Deadline, MSTI

shall cause the Exchange Agent to effect the allocation among Election

Stockholders of rights to receive the Cash Consideration and the Stock

Consideration as follows:

(i) If the Aggregate Stock Election Number exceeds the

Required Stock Election Number, then all Cash Election Shares and all

Non-Election Shares will be converted into the right to receive the Cash

Consideration, and, with respect to each holder of Stock Election Shares, then:

(A) that number of Stock Election Shares which is equal

to the product obtained by multiplying (1) the Stock Election Excess Amount by

(2) such stockholder's Stock Election Percentage (such amount being referred to

as such stockholder's "INDIVIDUAL STOCK EXCESS AMOUNT"), shall be converted into

the right to receive the Cash Consideration; and

(B) that number of Stock Election Shares equal to the

difference between (1) such stockholder's Individual Stock Election Number, less

(2) such stockholder's Individual Stock Excess Amount, shall be converted into

the right to receive the Stock Consideration.

(ii) If the Aggregate Cash Election Number exceeds the

Required Cash Election Number, then all Stock Election Shares will be converted

into the right to receive the Stock Consideration, and, with respect to each

holder of Cash Election Shares and Non-Election Shares, then:

(A) that number of Cash Election Shares and Non-Election

Shares which is equal to the product obtained by multiplying (1) the Cash

Election Excess Amount by (2) such stockholder's Cash Election Percentage (such

amount being referred to as such stockholder's "INDIVIDUAL CASH EXCESS AMOUNT"),

shall be converted into the right to receive the Stock Consideration; and

<PAGE>

(B) that number of Cash Election Shares and Non-Election

Shares which is equal to the difference between (1) such stockholder's

Individual Cash Election Number, less (2) such stockholder's Individual Cash

Excess Amount, shall be converted into the right to receive the Cash

Consideration.

(iii) If the Aggregate Stock Election Number is equal to the

Required Stock Election Number, then all Stock Election Shares will be converted

into the right to receive the Stock Consideration, and all Cash Election Shares

and Non-Election Shares will be converted into the right to receive the Cash

Consideration.

(iv) If (A) all Election Stockholders make only a Stock

Election, and (B) there are no Mandatory Cash Stockholders, such that the

Aggregate Stock Election Number is equal to one hundred percent (100%) of the

Outstanding Citizens Shares, then the Outstanding Citizens Shares held by each

Election Stockholder shall be converted into the Merger Consideration in

accordance with the following formula, viz., fifty percent (50%) of the shares

of Citizens Common Stock held by each Election Stockholder shall be converted

into the right to receive the Stock Consideration, and fifty percent (50%) of

the shares of Citizens Common Stock held by each Election Stockholder shall be

converted into the right to receive the Cash Consideration.

(v) If all Election Stockholders make only a Cash Election,

such that the Aggregate Cash Election Number is equal to one hundred percent

(100%) of the Outstanding Citizens Shares, then the Exchange Agent shall

allocate the Cash Consideration and the Stock Consideration on a pro rata basis

among all Election Stockholders, such that, following such allocation and taking

into account the Cash Consideration to be paid to any Mandatory Cash

Stockholders, fifty percent (50%) of the Outstanding Citizens Shares are

converted into the right to receive the Stock Consideration, and fifty percent

(50%) of the Outstanding Citizens Shares are converted into the right to receive

the Cash Consideration.

3.4 RIGHTS AS STOCKHOLDERS; STOCK TRANSFERS. At the Effective Time,

Citizens Stockholders shall cease to be, and shall have no rights as, Citizens

Stockholders, other than to receive the Merger Consideration. After the

Effective Time, there shall be no transfers on the stock transfer books of

Citizens or the Surviving Entity of shares of Citizens Common Stock.

3.5 FRACTIONAL SHARES. Notwithstanding any other provision hereof, no

fractional shares of MSTI Common Stock and no certificates or scrip therefore,

or other evidence of ownership thereof, will be issued in the Merger; instead,

MSTI shall pay to each Citizens Stockholder who would otherwise be entitled to a

fractional share of MSTI Common Stock (after taking into account all Old

Certificates registered in the name of such holder) an amount in cash (without

interest) determined by multiplying such fraction by Thirty-One Dollars and

Sixty-Seven Cents ($31.67).

3.6 EXCHANGE PROCEDURES

(a) On the Mailing Date, and with the Election Form, if applicable,

the Exchange Agent shall mail to each Citizens Stockholder instructions for use

in effecting the

<PAGE>

surrender of the Old Certificates in exchange for the Merger Consideration (the

"TRANSMITTAL LETTER"). Upon proper surrender to the Exchange Agent of an Old

Certificate for exchange and cancellation, together with such properly completed

and duly executed Transmittal Letter, the holder of such Old Certificates shall

be entitled to receive in exchange therefor: (i) a new certificate representing

that number of whole shares of MSTI Common Stock that such holder has the right

to receive pursuant to this Article; (ii) a check representing the amount of

Cash Consideration that such holder is entitled to receive pursuant to this

Article; and (iii) a check representing the amount of any cash in lieu of

fractional shares that such holder has the right to receive in respect of the

Old Certificates surrendered pursuant to the provisions of this Article, and the

Old Certificates so surrendered shall forthwith be cancelled.

(b) On the Closing Date, MSTI shall deposit with the Exchange Agent

for the benefit of holders of Old Certificates: (i) cash or immediately

available funds equal to the aggregate Cash Consideration; and (ii) certificates

representing the shares of MSTI Common Stock to be issued as Stock Consideration

(the "EXCHANGE FUND"). The Exchange Fund shall be held by the Exchange Agent for

the benefit of Citizens Stockholders pursuant to the terms of an Exchange Agent

Agreement in such form as MSTI and Citizens shall mutually agree. All fees,

costs and expenses of the Exchange Agent shall be borne solely by MSTI.

to any former Citizens Stockholder for any amount properly delivered to a public

official pursuant to applicable abandoned property, escheat or similar laws.

(d) No dividends or other distributions with respect to MSTI Common

Stock with a record date occurring after the Effective Time shall be paid to the

holder of any unsurrendered Old Certificate representing shares of Citizens

Common Stock converted in the Merger into the right to receive shares of MSTI

Common Stock until the holder of such unsurrendered Old Certificate shall be

entitled to receive a new certificate representing shares of MSTI Common Stock

in exchange therefor in accordance with the procedures set forth in this

Section. After becoming so entitled in accordance with this Section, the record

holder thereof also shall be entitled to receive any such dividends or other

distributions by the Exchange Agent, without any interest thereon, which

theretofore had become payable with respect to shares of MSTI Common Stock such

holder had the right to receive upon surrender of the Old Certificates.

(e) Any portion of the Merger Consideration that remains unclaimed

by the Citizens Stockholders on the first anniversary of the Effective Time

shall be paid to MSTI to be held for the benefit of holders of unsurrendered Old

Certificates. Any Citizens Stockholders who have not theretofore complied with

this Article shall thereafter look only to MSTI for payment of the Merger

Consideration, cash in lieu of any fractional shares and unpaid dividends and

distributions on MSTI Common Stock deliverable in respect of each share of

Citizens Common Stock such stockholder holds as determined pursuant to this

Agreement, in each case without any interest thereon.

(f) If a certificate representing shares of MSTI Common Stock or a

check representing Cash Consideration is to be issued in a name other than that

in which the Old Certificate surrendered in exchange therefor is registered, it

shall be a condition of the issuance

<PAGE>

thereof that the Old Certificate so surrendered shall be properly endorsed,

accompanied by all documents required to evidence and effect such transfer and

otherwise in proper form for transfer and that the Person requesting such

exchange shall pay to MSTI any transfer or other taxes required by reason of the

issuance of a certificate representing shares of MSTI Common Stock or a check

representing Cash Consideration in any name other than that of the registered

holder of the Old Certificate surrendered, or otherwise required, or shall

establish to the satisfaction of MSTI that such tax has been paid or is not

payable.

3.7 ANTI-DILUTION PROVISIONS.

(a) If MSTI issues additional shares of MSTI Common Stock (other

than as provided below) or declares a stock dividend, stock split, reverse split

or other general distribution, reclassification or recapitalization of MSTI

Common Stock and the record date for such stock dividend, stock split,

distribution, reclassification or recapitalization occurs at any time after the

Agreement Date and prior to the Effective Time, then the amount of Stock

Consideration shall be adjusted appropriately to give effect to the change in

MSTI capitalization. Notwithstanding the foregoing, no adjustment shall be made

to the amount of Stock Consideration: (i) in the event of the issuance of

additional shares of MSTI Common Stock pursuant to the grant or sale of shares

to, or for the account of, employees of MSTI pursuant to any stock incentive,

qualified or non-qualified retirement, or dividend reinvestment plans; or (ii)

in the event of the issuance of additional shares of MSTI Common Stock or other

securities pursuant to a public offering, private placement or an acquisition of

one or more banks, corporations or business assets for consideration which the

board of directors, or a duly authorized committee of the board of directors, of

MSTI in its reasonable business judgment determines to be fair and reasonable.

(b) Subject only to making any adjustment to the Stock Consideration

and related computations prescribed by this Section, nothing contained in this

Agreement is intended to preclude MSTI from amending its articles of

incorporation to change its capital structure or from issuing additional shares

of MSTI Common Stock, preferred stock, shares of other capital stock or

securities that are convertible into shares of capital stock.

3.8 TAX FREE REORGANIZATION. The parties to this Agreement intend for the

Merger to qualify as a nontaxable reorganization within the meaning of Section

368 and related sections of the Code and agree to cooperate and to take such

actions as may be reasonably necessary to ensure such result and no party shall

file any Tax Return or take any action or position inconsistent therewith,

except as required pursuant to any Legal Requirement.

3.9 DISSENTING SHARES. Notwithstanding anything to the contrary contained

in this Agreement, to the extent appraisal rights are available to Citizens

Stockholders pursuant to the provisions of any applicable Legal Requirements,

including Section 262 of the DGCL, any shares of Citizens Common Stock held by a

Person who objects to the Merger, whose shares were not voted in favor of the

Merger and who complies with and satisfies all of the provisions of the

applicable Legal Requirements concerning the rights of such Person to dissent

from the Merger and to require appraisal of such Person's shares and who has not

withdrawn such objection or waived such rights prior to the Effective Time

(collectively with respect to all such Citizens

<PAGE>

Stockholders, the "DISSENTING SHARES"), shall not be converted pursuant to

SECTION 3.2, but shall become the right to receive such consideration as may be

determined to be due to the holder of such Dissenting Shares pursuant to the

applicable Legal Requirements, including, if applicable, any costs determined to

be payable by Citizens to the holders of Dissenting Shares pursuant to an order

of any court pursuant to any applicable Legal Requirements; provided, however,

that each Dissenting Share held by a Person at the Effective Time who shall,

after the Effective Time, withdraw the demand for appraisal or lose the right of

appraisal, in either case pursuant to applicable Legal Requirements shall be

deemed to have been converted, as of the Effective Time, into the right to

receive the Merger Consideration as is determined in accordance with this

ARTICLE 3.

ARTICLE 4

REPRESENTATIONS AND WARRANTIES OF CITIZENS

Citizens hereby represents and warrants to MSTI that the following are

true and correct as of the Agreement Date, and will be true and correct as of

the Effective Time:

4.1 CITIZENS ORGANIZATION. Citizens: (a) is a corporation duly organized,

validly existing and in good standing under the laws of the State of Delaware

and is also in good standing in each other jurisdiction in which the nature of

the business conducted or the properties or assets owned or leased by it makes

such qualification necessary; (b) is registered with the OTS as a savings and

loan holding company under the federal Home Owners' Loan Act, as amended (the

"HOLA"); and (c) has full power and authority, corporate and otherwise, to

operate as a savings and loan holding company and to own, operate and lease its

properties as presently owned, operated and leased, and to carry on its business

as it is now being conducted. Copies of the certificate of incorporation and

bylaws of Citizens and all amendments thereto are set forth on SCHEDULE 4.1 and

are complete and correct. Citizens has no Subsidiaries other than the Bank and

as set forth on SCHEDULE 4.1.

4.2 CITIZENS SUBSIDIARY ORGANIZATION. The Bank is an Illinois chartered

savings bank duly organized, validly existing and in good standing under the

laws of the State of Illinois. Each other Citizens Subsidiary is duly organized,

validly existing and in good standing in its state or jurisdiction of

organization. Each Citizens Subsidiary has full power and authority, corporate

and otherwise, to own, operate and lease its properties as presently owned,

operated and leased, and to carry on its business as it is now being conducted,

and is duly qualified to do business and is in good standing in each

jurisdiction in which the nature of the business conducted or the properties or

assets owned or leased by it makes such qualification necessary. Copies of the

charter and bylaws (or similar organizational documents) of each Citizens

Subsidiary and all amendments thereto are set forth on SCHEDULE 4.2 and are

complete and correct.

4.3 AUTHORIZATION; ENFORCEABILITY.

(a) Citizens has the requisite corporate power and authority to

enter into and perform its obligations under this Agreement. The execution,

delivery and performance of this Agreement by Citizens, and the consummation by

it of its obligations under this Agreement, have

<PAGE>

been authorized by all necessary corporate action, subject to stockholder

approval, and this Agreement constitutes a legal, valid and binding obligation

of Citizens enforceable in accordance with its terms, except as such enforcement

may be limited by bankruptcy, insolvency, reorganization or other laws affecting

creditors' rights generally and subject to general principles of equity.

(b) Except for ordinary corporate requirements, no "business

combination," "moratorium," "control share" or other state anti-takeover statute

or regulation or any provisions contained in the certificate of incorporation or

bylaws or similar organizational documents of Citizens or any Citizens

Subsidiary: (i) prohibits or restricts Citizens' ability to perform its

obligations under this Agreement, or its ability to consummate the Contemplated

Transactions; (ii) would have the effect of invalidating or voiding this

Agreement, or any provision hereof; or (iii) would subject MSTI to any material

impediment or condition in connection with the exercise of any of its rights

under this Agreement. The board of directors of Citizens has unanimously

approved the execution of, and performance by Citizens of its obligations under,

this Agreement.

4.4 NO CONFLICT. Except as set forth on SCHEDULE 4.4, neither the

execution nor delivery of this Agreement nor the consummation or performance of

any of the Contemplated Transactions will, directly or indirectly (with or

without notice or lapse of time): (a) contravene, conflict with or result in a

violation of any provision of the certificate of incorporation or charter or

bylaws (or similar organizational documents), each as in effect on the Agreement

Date, or any currently effective resolution adopted by the board of directors or

stockholders of Citizens or any Citizens Subsidiary; (b) contravene, conflict

with or result in a violation of, or give any Regulatory Authority or other

Person the valid and enforceable right to challenge any of the Contemplated

Transactions or to exercise any remedy or obtain any relief under, any Legal

Requirement or any Order to which Citizens or any Citizens Subsidiary, or any of

their respective assets that are owned or used by them, may be subject, except

for any contravention, conflict or violation that is permissible by virtue of

obtaining the regulatory approvals necessitated by the Contemplated

Transactions, including any such approvals under the HOLA, the Federal Deposit

Insurance Act, as amended (the "FDIA"), the Securities Act, the Exchange Act,

the DGCL, the Delaware Act and the Illinois Savings Bank Act (the "ISBA"); (c)

contravene, conflict with or result in a violation or breach of any provision

of, or give any Person the right to declare a default or exercise any remedy

under, or to accelerate the maturity or performance of, or to cancel, terminate

or modify any material Contract to which Citizens or any Citizens Subsidiary is

a party or by which any of their respective assets is bound; or (d) result in

the creation of any lien, charge or encumbrance upon or with respect to any of

the assets owned or used by Citizens or any Citizens Subsidiary. Except for the

approvals referred to in SECTION 8.1 and the requisite approval of its

stockholders, neither Citizens nor any Citizens Subsidiary is or will be

required to give any notice to or obtain any consent from any Person in

connection with the execution and delivery of this Agreement or the consummation

or performance of any of the Contemplated Transactions.

4.5 CITIZENS CAPITALIZATION.

(a) The authorized capital stock of Citizens currently consists

exclusively of: (i) 8,000,000 shares of Citizens Common Stock, of which, as of

the Agreement Date, 2,817,500

<PAGE>

shares are duly issued, fully paid and non-assessable, including 1,298,289

shares that are held by Citizens as treasury shares; and (ii) 1,000,000 shares

of preferred stock, no par value per share, none of which are issued and

outstanding as of the Agreement Date. As of September 30, 2004, Citizens had

issued and outstanding Citizens Stock Options for the purchase of 242,100 shares

of Citizens Common Stock, with an average exercise price of $13.07. A complete

list of all Citizens Stock Options, including the exercise price, date of grant,

number granted and vesting schedule of all such options for each holder thereof

is set forth in SCHEDULE 4.5. The maximum number of shares of Citizens Common

Stock that would be outstanding immediately prior to the Effective Time,

excluding treasury shares, if all options, warrants, conversion rights and other

rights with respect thereto were exercised and the restrictions on any

restricted stock were no longer applicable is 1,761,311 shares. Citizens

acknowledges that the Per Share Cash Consideration and the Per Share Stock

Consideration have each been determined based on the accuracy of the

representations and warranties made in this SECTION 4.5 with respect to the

number of outstanding Citizens Shares and the number of Citizens Stock Options

and the exercise prices thereof (as set forth on SCHEDULE 4.5), and acknowledges

that any Breach of such representations and warranties shall be deemed to have a

Material Adverse Effect on Citizens for purposes of this Agreement.

(b) The shares of Citizens Common Stock to be issued upon exercise

of any Citizens Stock Options are validly authorized and, upon exercise of the

Citizens Stock Options in accordance with their terms, will be validly issued,

fully paid and non-assessable. None of the shares of Citizens Common Stock have

been issued in violation of any federal or state securities laws or any other

Legal Requirement. Since December 31, 2003, except as disclosed in or permitted

by this Agreement or as provided on SCHEDULE 4.5, no shares of Citizens capital

stock have been purchased, redeemed or otherwise acquired, directly or

indirectly, by Citizens or any Citizens Subsidiary and no dividends or other

distributions payable in any equity securities of Citizens or any Citizens

Subsidiary have been declared, set aside, made or paid to the Citizens

Stockholders. To the Knowledge of Citizens, none of the shares of authorized

capital stock of Citizens are, nor on the Closing Date will they be, subject to

any claim of right inconsistent with this Agreement. Except as contemplated in

this Agreement or as set forth in SCHEDULE 4.5, there are, as of the Agreement

Date, no outstanding subscriptions, contracts, conversion privileges, options,

warrants, calls or other rights obligating Citizens or any Citizens Subsidiary

to issue, sell or otherwise dispose of, or to purchase, redeem or otherwise

acquire, any shares of capital stock of Citizens or any Citizens Subsidiary, and

except as provided in this Section or otherwise disclosed in this Agreement,

Citizens is not a party to any Contract relating to the issuance, purchase, sale

or transfer of any equity securities or other securities of Citizens. Citizens

does not own or have any Contract to acquire any equity securities or other

securities of any Person or any direct or indirect equity or ownership interest

in any other business except for the capital stock of the Bank and as set forth

in SCHEDULE 4.5 or the Citizens SEC Documents.

4.6 CITIZENS SUBSIDIARY CAPITALIZATION. The authorized capital stock of

the Bank consists, and immediately prior to the Effective Time, will consist

exclusively of 8,000 shares of capital stock, $1.00 par value per share (the

"BANK SHARES"), 1,000 of which shares are, and immediately prior to the Closing

will be, duly authorized, validly issued and outstanding, fully paid and

nonassessable, except to the extent subject to assessment under the ISBA or the

FDIA.

<PAGE>

Citizens is, and will be on the Closing Date, the record and beneficial owner of

one hundred percent (100%) of the Bank Shares and all of the issued and

outstanding shares of capital stock of each other Citizens Subsidiary, free and

clear of any lien or encumbrance whatsoever. The Bank Shares are, and will be on

the Closing Date, freely transferable and are, and will be on the Closing Date,

subject to no claim except pursuant to this Agreement and as set forth on

SCHEDULE 4.6. There are no unexpired or pending preemptive rights with respect

to any shares of capital stock of any Citizens Subsidiary, except for such

rights held exclusively by Citizens. There are no outstanding securities of any

Citizens Subsidiary that are convertible into or exchangeable for any shares of

such Citizens Subsidiary's capital stock, except for such rights held

exclusively by Citizens, and no Citizens Subsidiary is a party to any Contract

relating to the issuance, sale or transfer of any equity securities or other

securities of such Citizens Subsidiary. Neither Citizens nor any Citizens

Subsidiary owns or has any Contract to acquire, any equity securities or other

securities of any Person or any direct or indirect equity or ownership interest

in any other business, except as set forth on SCHEDULE 4.6.

4.7 FINANCIAL STATEMENTS AND REPORTS. True, correct and complete copies of

the following financial statements are included in SCHEDULE 4.7:

(a) audited Consolidated Balance Sheets for Citizens as of December

31, 2001, 2002 and 2003, and the related audited Consolidated Statements of

Income, Statements of Cash Flows and Consolidated Statements of Changes in

Stockholders' Equity of Citizens for the years ended December 31, 2001, 2002 and

2003;

(b) unaudited Consolidated Balance Sheet for Citizens as of June 30,

2004, and the related unaudited Consolidated Statements of Income, Statements of

Cash Flows; and

December 31, 2001, 2002 and 2003, and for the six months ended June 30, 2004.

The financial statements described in clauses (a) and (b) have been

prepared in conformity with GAAP and comply in all material respects with the

published rules and regulations of the SEC. The financial statements described

in clause (c) above have been prepared on a basis consistent with past

accounting practices and as required by applicable Legal Requirements and fairly

present the consolidated financial condition and results of operations at the

dates and for the periods presented. Taken together, the financial statements

described in clauses (a), (b) and (c) above (collectively, and including the

notes thereto, the "CITIZENS FINANCIAL STATEMENTS") are complete and correct in

all material respects and fairly and accurately present the respective financial

position, assets, liabilities and results of operations of Citizens and the Bank

as at the respective dates of, and for the periods referred to in, the Citizens

Financial Statements, subject to normal year-end non-material audit adjustments

in amounts consistent with past practice in the case of the unaudited Citizens

Financial Statements. The Citizens Financial Statements do not include any

material assets or omit to state any material liabilities, absolute or

contingent, or other facts, which inclusion or omission would render the

Citizens Financial Statements misleading in any material respect as of the

respective dates and for the periods referred to in the respective Citizens

Financial Statements.

<PAGE>

4.8 BOOKS AND RECORDS. The books of account, minute books, stock record

books and other records of Citizens and each Citizens Subsidiary are complete

and correct in all material respects and have been maintained in accordance with

Citizens' business practices and all applicable Legal Requirements, including

the maintenance of any adequate system of internal controls required by the

Legal Requirements. The minute books of Citizens and each Citizens Subsidiary

contain accurate and complete records in all material respects of all meetings

held of, and corporate action taken by, its respective stockholders, board of

directors and committees of the board of directors. At the Closing, all of those

books and records will be in the possession of Citizens and the Citizens

Subsidiaries.

4.9 TITLE TO PROPERTIES. Citizens and each Citizens Subsidiary has good

and marketable title to all assets and properties, whether real or personal,

tangible or intangible, that it purports to own, subject to no valid liens,

mortgages, security interests, encumbrances or charges of any kind except: (a)

as n

SITE SEARCH

AGREEMENTS / CONTRACTS

CLAUSES

Search Contract Clauses >>

Browse Contract Clause Library>>

Get Email Updates