EXHIBIT 2
STOCK OPTION AGREEMENT
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THIS STOCK OPTION AGREEMENT ("Option Agreement") dated as of the 22nd
day of February, 2001, by and between WESBANCO, INC., a West Virginia
corporation ("Wesbanco") and AMERICAN BANCORPORATION, an Ohio corporation
("American").
WITNESSETH:
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WHEREAS, the Boards of Directors of Wesbanco and American have approved
an Agreement and Plan of Merger ("Merger Agreement"), which contemplates the
merger of American with AB Corporation, a West Virginia corporation and
wholly-owned subsidiary of Wesbanco ("AB"), with AB continuing as the surviving
corporation;
WHEREAS, as a condition to Wesbanco's entry into the Merger Agreement
and to induce such entry, American has agreed to grant to Wesbanco the option
set forth herein to purchase authorized but unissued shares of common stock,
without par value, of American ("American Common Stock");
NOW, THEREFORE, in consideration of the premises herein contained, the
parties agree as follows:
1. DEFINITIONS. Capitalized terms defined in the Merger Agreement and
used herein shall have the same meanings as in the Merger Agreement.
2. GRANT OF OPTION. Subject to the terms and conditions set forth
herein, American hereby grants to Wesbanco an option ("Option") to purchase up
to 622,805 shares of American Common Stock, at a price of $18.00 per share (the
"Option Price") payable in cash as provided in Section 4 hereof; provided,
however, that in the event American issues or agrees to issue any shares of
American Common Stock (other than as permitted under the Merger Agreement) at a
price less than $18.00 per share (as adjusted pursuant to Section 6 hereof), the
exercise price shall be equal to such lesser price.
3. EXERCISE OF OPTION.
a. Provided that Wesbanco is not in material breach of
the agreements and covenants contained in the Merger
Agreement, Wesbanco may exercise the Option, in whole or in
part, at any time or from time to time if a Purchase Event
(as defined below) shall have occurred and be continuing;
provided that to the extent the Option shall not have been
exercised, it shall terminate and be of no further force and
effect (i) on the Effective Date of the Merger or (ii) upon
termination of the Merger Agreement in accordance with the
provisions thereof (other than a termination resulting from
a willful breach by American of Section 8.21(d) of the
Merger Agreement or, following the occurrence of a Purchase
Event, failure of American's shareholders to approve the
Merger Agreement by the vote required under applicable law),
or (iii) six months after termination of the Merger
Agreement due to a willful breach by American of Section
8.21(d) of the Merger Agreement or, following the occurrence
of a Purchase Event, failure of American's shareholders to
approve the Merger Agreement by the vote required under
applicable law; and provided further that any such exercise
shall be subject to compliance with applicable provisions of
law.
b. As used herein, a "Purchase Event" shall mean any of
the following events or transactions occurring after the
date hereof:
(i) any person (other than American, Wheeling
National Bank (the "American Subsidiary"),
Wesbanco or any affiliate of Wesbanco) shall have
commenced a bona fide tender or exchange offer to
purchase shares of American Common Stock such that
upon consummation of such offer such person would
own or control 15% or more of the outstanding
shares of American Common Stock;
(ii) any person (other than American or the
American Subsidiary), other than in connection
with a transaction to which Wesbanco has given its
prior written consent, shall have filed an
application or notice with any federal or state
regulatory agency for clearance or approval, to
(x) merge or consolidate, or enter into any
similar transaction, with American or the American
Subsidiary, (y) purchase, lease or otherwise
acquire all or substantially all of the assets of
American or the American Subsidiary or (z)
purchase or otherwise acquire (including by way of
merger, consolidation, share exchange or any
similar transaction) securities representing 51%
or more of the voting power of American or the
American Subsidiary;
(iii) any person (other than American, the
American Subsidiary, the American Subsidiary in a
fiduciary capacity, Wesbanco, affiliates of
Wesbanco or subsidiaries of Wesbanco in a
fiduciary capacity) shall have acquired after the
date hereof beneficial ownership or the right to
acquire beneficial ownership of 15% or more of the
outstanding shares of American Common Stock (the
term "beneficial ownership" for purposes of this
Option Agreement having the meaning assigned
thereto in Section 13(d) of the Exchange Act and
the regulations promulgated thereunder);
(iv) any person (other than American or the
American Subsidiary) shall have made a bona fide
proposal to American by public announcement or
written communication that is or becomes the
subject of public disclosure to (x) acquire
American or the American Subsidiary by merger,
consolidation, purchase of all or substantially
all of its assets or any other similar
transaction, or (y) make an offer described in
clause (i) above; or
(v) American shall have willfully breached
Section 8.21(d) of the Merger Agreement, which
breach would entitle Wesbanco to terminate such
Merger Agreement and such breach shall not have
been cured prior to the Notice Date (as defined
below).
If more than one of the transactions giving rise to a Purchase Event under this
Section 3(b) is undertaken or effected, then all such transactions shall give
rise only to one Purchase Event, which Purchase Event shall be deemed continuing
for all purposes hereunder until all such transactions are abandoned. As used in
this Option Agreement, "person" shall have the meanings specified in Sections
3(a)(9) and 13(d)(3) of the Exchange Act.
c. In the event Wesbanco wishes to exercise the Option,
it shall send to American a written notice (the date of
which being herein referred to as "Notice Date") specifying
(i) the total number of shares it will purchase pursuant to
such exercise, and (ii) a place and date not earlier than
three business days nor later than 60 business days from the
Notice Date for the closing of such purchase ("Closing
Date"); provided that if prior notification to or approval
of any federal or state regulatory agency is required in
connection with such purchase, Wesbanco shall promptly file
the required notice or application for approval and shall
expeditiously process the same and the period of time that
otherwise would run pursuant to this sentence shall run
instead from the date on which any required notification
period has expired or been terminated or such approval has
been obtained and any requisite waiting period shall have
passed.
4. PAYMENT AND DELIVERY OF CERTIFICATES.
a. At the closing referred to in Section 3(c) hereof,
Wesbanco shall pay to American the aggregate purchase price
for the shares of American Common Stock purchased pursuant
to the exercise of the Option in immediately available funds
by a wire transfer to a bank account designated by American.
b. At such closing, simultaneously with the delivery
of cash as provided in subsection (a), American shall
deliver to Wesbanco a certificate or certificates
representing the number of shares of American Common Stock
purchased by Wesbanco, and Wesbanco shall deliver to
American a letter agreeing that Wesbanco will not offer to
sell or otherwise dispose of such shares in violation of
applicable law or the provisions of this Option Agreement.
c. Certificates for American Common Stock delivered at
a closing hereunder may be endorsed with a restrictive
legend which shall read substantially as follows:
"The transfer of the shares represented by
this certificate is subject to certain provisions
of an agreement between the registered holder
hereof and American Bancorporation and to resale
restrictions arising under the Securities Act of
1933, as amended, a copy of which agreement is on
file at the principal office of American
Bancorporation. A copy of such agreement will be
provided to the holder hereof without charge upon
receipt by American Bancorporation of a written
request."
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if Wesbanco shall have
delivered to American a copy of a letter from the staff of the Securities and
Exchange Commission, or an opinion of counsel, in form and substance reasonably
satisfactory to American, to the effect that such legend is not required for
purposes of the Securities Act.
5. REPRESENTATIONS. American hereby represents, warrants and covenants
to Wesbanco as follows:
a. American shall at all times maintain sufficient
authorized but unissued shares of American Common Stock so
that the Option may be exercised without authorization of
additional shares of American Common Stock.
b. The shares to be issued upon due exercise, in whole
or in part, of the Option, when paid for as provided herein,
will be duly authorized, validly issued, fully paid and
nonassessable.
6. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the event of any
change in American Common Stock by reason of stock dividends, split-ups,
mergers, recapitalizations, combinations, exchanges of shares or the like, the
type and number of shares subject to the Option, and the purchase price per
share, as the case may be, shall be adjusted appropriately. In the event that
any additional shares of American Common Stock are issued or otherwise become
outstanding after the date of this Option Agreement (other than pursuant to this
Option Agreement), the number of shares of American Common Stock subject to the
Option shall be adjusted so that, after such issuance, it equals 19.9% of the
number of shares of American Common Stock then issued and outstanding without
giving effect to any shares subject or issued pursuant to the Option. Nothing
contained in this Section 6 shall be deemed to authorize American to breach any
provision of the Merger Agreement.
7. REGISTRATION RIGHTS. American shall, if requested by Wesbanco,
as expeditiously as possible file a registration statement on a form of general
use under the Securities Act if necessary in order to permit the sale or other
disposition of the shares of American Common Stock that have been acquired upon
exercise of the Option in accordance with the intended method of sale or other
disposition requested by Wesbanco. Wesbanco shall provide all information
reasonably requested by American for inclusion in any registration statement to
be filed hereunder. American will use its best efforts to cause such
registration statement first to become effective and then to remain effective
for such period not in excess of 270 days from the day such registration
statement first becomes effective as may be reasonably necessary to effect such
sales or other dispositions. In no event shall American be required to effect
more than two registrations hereunder. All expenses of registrations hereunder
shall be borne equally by American and Wesbanco. The filing of any registration
statement hereunder may be delayed for such period of time as may reasonably be
required to facilitate any public distribution by American of American Common
Stock. If requested by Wesbanco, in connection with any such registration,
American will become a party to any underwriting agreement relating to the sale
of such shares, but only to the extent of obligating itself in respect of
representations, warranties, indemnities and other agreements customarily
included in such underwriting agreements. Upon receiving any request from
Wesbanco or assignee thereof under this Section 7, American agrees to send a
copy thereof to Wesbanco and to any assignee thereof known to American, in each
case by promptly mailing the same, postage prepaid, to the address of record of
the persons entitled to receive such copies.
8. SEVERABILITY. If any term, provision, covenant or restriction
contained in this Option Agreement is held by a court or a federal or state
regulatory agency of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions and covenants and
restrictions contained in this Option Agreement shall remain in full force and
effect, and shall in no way be affected, impaired or invalidated. If for any
reason such court or regulatory agency determines that the Option will not
permit the holder to acquire the full number of shares of American Common Stock
provided in Section 2 hereof (as adjusted pursuant to Section 6 hereof), it is
the express intention of American to allow the holder to acquire such lesser
number of shares as may be permissible, without any amendment or modification
hereof.
9. PUT-BACK RIGHTS.
a. Upon the consummation of any Purchase Event
described in Section 3(b)(ii) or (v) hereof such that (i) a
merger, consolidation, purchase, lease or acquisition of all
or substantially all of the assets of American purchase or
other acquisition of securities representing 51% or more of
the voting power of American or the American Subsidiary has
been consummated, or (ii) a willful breach under Section
8.21(d) of the Merger Agreement has occurred so that
Wesbanco would be entitled to terminate the Merger
Agreement, and prior to the expiration of the Option in
accordance with the terms hereof, at the request of
Wesbanco, American shall repurchase the Option from Wesbanco
at a price (the
"Repurchase Price") equal to the difference between the
market/offer price (as defined below) for shares of American
Common Stock and the Option Price, multiplied by the number
of shares for which the Option being surrendered hereunder
may then be exercised but only if the market/offer price is
greater than the Option Price (the market/offer price is
defined as the higher of the price per share at which a
tender offer or exchange offer for 51% or more of the voting
securities of American has been made and consummated, the
price per share actually paid by any third party pursuant to
an agreement that has been consummated whereby American has
been merged, consolidated with or otherwise acquired by a
third party, and the highest closing price for American
Common Stock within the four-month period immediately
preceding the date Wesbanco gives written notice of the
required repurchase of the Option pursuant to this Section
9). In the event that an exchange offer is made or an
agreement is entered into for a merger or consolidation
involving consideration other than cash, the value of the
securities or other property issuable or deliverable in
exchange for American Common shall be determined by a
nationally recognized investment banking firm mutually
acceptable to the parties hereto.
b. Wesbanco may exercise its right to require American
to repurchase the Option pursuant to this Section 9 by
giving American written notice of its exercise of its
repurchase right in accordance with the provisions of this
Section 9. Subject to the last proviso of paragraph 9(c)
below, as promptly as practicable, and in any event within
five business days after the receipt of such notice or
notices relating thereto, American shall deliver or cause to
be delivered to Wesbanco the Repurchase Price for the Option
or the portion thereof which American is not then prohibited
under applicable law and regulation from so delivering.
c. To the extent that American is prohibited under
applicable law or regulation, or as a result of
administrative or judicial action, from repurchasing the
Option in full, American shall immediately so notify
Wesbanco and thereafter deliver or cause to be delivered,
from time to time, to Wesbanco, as appropriate, the portion
of the Repurchase Price which it is no longer prohibited
from delivering, within five business days after the date on
which American is no longer so prohibited, provided,
however, that to the extent that American is at the time and
after the expiration of 12 months, so prohibited from
delivering to Wesbanco, the Repurchase Price, in full (and
American hereby undertakes to use its best efforts to
receive all required regulatory and legal approvals as
promptly as practicable), American shall deliver to Wesbanco
a new Option evidencing the right of Wesbanco to purchase
that number of shares of American Common Stock obtained by
multiplying the number of shares of American Common Stock
for which the Option may at such time be exercised by a
fraction, the numerator of which is the Repurchase Price
less the portion thereof (if any) theretofore delivered to
the Holder and the denominator of which is the Repurchase
Price, and American shall have no further obligation to
repurchase such new Option; and provided, further, that upon
receipt of such notice and until five days thereafter
Wesbanco may revoke its notice of repurchase of the Option
by written notice to American at its principal office
stating that Wesbanco elects to revoke its election to
exercise its rights to require American to repurchase the
Option, whereupon American will promptly deliver to Wesbanco
the Option and American shall have no further obligation to
repurchase such Option.
10. FIRST REFUSAL. If at any time during the eighteen months
immediately following the first purchase of shares of American Common Stock
pursuant to the Option, Wesbanco shall desire to sell, assign, transfer or
otherwise dispose of all or any of the shares of American Common Stock acquired
by it pursuant to the Option other than in accordance with the put-back rights
in Section 9 hereof, it shall give
American written notice of the proposed transaction ("Offeror's Notice"),
identifying the proposed transferee and setting forth the terms of the proposed
transaction. An Offeror's Notice shall be deemed an offer by Wesbanco to
American, which may be accepted within ten business days of the receipt of such
Offeror's Notice, on the same terms and conditions and at the same price at
which Wesbanco is proposing to transfer such shares to a third party. Settlement
for any shares purchased by American shall be within 15 business days of the
date of the acceptance of the offer and the purchase price shall be paid to
Wesbanco in immediately available funds; provided that if prior notification to
or approval of any federal or state regulatory authority is required in
connection with such purchase, American shall promptly file the required notice
or application for approval and shall expeditiously process the same and the
period of time that otherwise would run pursuant to this sentence shall run
instead from the date on which any required notification period has expired or
been terminated or such approval has been obtained and any requisite waiting
period shall have passed. In the event of the failure or refusal of American to
purchase all of the shares covered by the Offeror's Notice or any applicable
regulatory authority shall disapprove American's proposed purchase of such
shares, Wesbanco may sell all, but not less than all, of such shares to such
third party at no less than the price specified and on terms no more favorable
than those set forth in the Offeror's Notice. The requirements of this Section 9
shall not apply to any disposition (i) as a result of which the proposed
transferee would own not more than five percent of the then outstanding shares
of American Common Stock, (ii) of American Common Stock by a person to which
Wesbanco has assigned its rights under the Option in accordance with Section
11(c) hereof or (iii) pursuant to a registration under Section 7 hereof.
11. MISCELLANEOUS.
a. EXPENSES. Except as otherwise provided herein, each
of the parties hereto shall bear and pay all costs and
expenses incurred by it or on its behalf in connection with
the transactions contemplated hereunder, including fees and
expenses of its own financial consultants, investment
bankers, accountants and counsel.
b. ENTIRE AGREEMENT. Except as otherwise expressly
provided herein, this Option Agreement contains the entire
agreement between the parties with respect to the
transactions contemplated hereunder and supersedes all prior
arrangements or understandings with respect thereto, written
or oral. The terms and conditions of this Option Agreement
shall inure to the benefit of and be binding upon the
parties hereto and their respective successors and assigns.
Nothing in this Option Agreement, expressed or implied, is
intended to confer upon any party, other than the parties
hereto, and their respective successors and assigns, any
rights, remedies, obligations or liabilities under or by
reason of this Option Agreement, except as expressly
provided herein.
c. ASSIGNMENT. Neither of the parties hereto may
assign any of its rights or obligations under this Option
Agreement or the Option created hereunder to any other
person, without the express written consent of the other
party.
d. NOTICES. All notices or other communications which
are required or permitted hereunder shall be in writing and
sufficient if delivered in the manner and to the addresses
provided for in or pursuant to Section 18 of the Merger
Agreement.
e. COUNTERPARTS. This Option Agreement may be executed
in any number of counterparts, and each such counterpart
shall be deemed to be an original instrument, but all such
counterparts together shall constitute but one agreement.
f. SPECIFIC PERFORMANCE. The parties agree that
damages would be an inadequate remedy for a breach of the
provisions of this Option Agreement by either party hereto
and that this Option Agreement may be enforced by either
party hereto through injunctive or other equitable relief.
g. GOVERNING LAW. This Option Agreement shall be
governed by and construed in accordance with the laws of the
State of West Virginia applicable to agreements made and
entirely to be performed within such state and such federal
laws as may be applicable.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Option Agreement as of the day and year first written above.
WESBANCO, INC.
By /s/ Xxxxxx X. Xxxxxx
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Its President & Chief Executive Officer
AMERICAN BANCORPORATION
By /s/ Xxxxxx X. Xxxxxxx
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Its Chairman & Chief Executive Officer
