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EXHIBIT 2.2
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STOCK OPTION AGREEMENT
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This STOCK OPTION AGREEMENT ("Option Agreement") dated as of
the 12th day of September, 1997, by and between WESBANCO, INC., a
West Virginia corporation ("Wesbanco") and COMMERCIAL BANCSHARES,
INCORPORATED, a West Virginia corporation ("Commercial").
WITNESSETH:
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WHEREAS, the Boards of Directors of Wesbanco and Commercial
have approved a Binding Letter of Intent ("Agreement"), which
contemplates the merger of Commercial with and into CBI
Corporation, a West Virginia corporation and wholly-owned
subsidiary of Wesbanco ("CBI"), with CBI continuing as the
surviving corporation; subject to the execution of a definitive
merger agreement which the parties agree to negotiate in good
faith, and
WHEREAS, as a condition to Wesbanco's entry into the
Agreement and to induce such entry, Commercial has agreed to
grant to Wesbanco the option set forth herein to purchase
authorized but unissued shares of common stock, par value $5.00
per share of Commercial ("Commercial Common Stock");
NOW, THEREFORE, in consideration of the premises herein
contained, the parties agree as follows:
1. Definitions. Capitalized terms which are to be defined
in the Merger Agreement and used herein shall have the same
meanings as in the Merger Agreement. The parties have prepared a
draft of said Merger Agreement and incorporate the referenced
provisions of said draft language into this Agreement as if set
forth herein verbatim. A copy of said draft Merger Agreement is
attached hereto as Exhibit A (hereinafter "Merger Agreement").
2. Grant of Option. Subject to the terms and conditions
set forth herein, Commercial hereby grants to Wesbanco an option
("Option") to purchase up to 321,620 shares of Commercial Common
Stock, at a price of $50.00 per share (the "Option Price")
payable in cash as provided in Section 4 hereof; provided,
however, that in the event Commercial issues or agrees to issue
any shares of Commercial Common Stock (other than as permitted
under the Agreement) at a price less than $50.00 per share (as
adjusted pursuant to Section 6 hereof), the exercise price shall
be equal to such lesser price.
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3. Exercise of Option.
a. Provided that Wesbanco is not in material
breach of the agreements and covenants contained in
the 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
Commercial of Section 7.21(d) of the Merger
Agreement or, following the occurrence of a
Purchase Event, failure of Commercial'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 Commercial of Section
7.21(d) of the Merger Agreement or, following the
occurrence of a Purchase Event, failure of
Commercial'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
Commercial, any Commercial Subsidiary,
Wesbanco or any affiliate of Wesbanco)
shall have commenced a bona fide tender
or exchange offer to purchase shares of
Commercial Common Stock such that upon
consummation of such offer such person
would own or control 15% or more of the
outstanding shares of Commercial Common
Stock;
(ii) any person (other than
Commercial or any Commercial
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 Commercial or
any Commercial Subsidiary, (y) purchase,
lease or otherwise acquire all or
substantially all of the assets of
Commercial or any Commercial 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 Commercial or any Commercial
Subsidiary;
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(iii) any person (other than
Commercial, any Commercial Subsidiary,
the Commercial Subsidiaries 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
Commercial 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
Commercial or any Commercial Subsidiary)
shall have made a bona fide proposal to
Commercial by public announcement or
written communication that is or becomes
the subject of public disclosure to (x)
acquire Commercial or any Commercial
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) Commercial shall have
willfully breached Section 7.21(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 Commercial 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
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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 Commercial the
aggregate purchase price for the shares of
Commercial Common Stock purchased pursuant to the
exercise of the Option in immediately available
funds by a wire transfer to a bank account
designated by Commercial.
b. At such closing, simultaneously with the
delivery of cash as provided in subsection (a),
Commercial shall deliver to Wesbanco a certificate
or certificates representing the number of shares
of Commercial Common Stock purchased by Wesbanco, and
Wesbanco shall deliver to Commercial 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 Commercial 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 Commercial Bancshares,
Incorporated 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 Commercial Bancshares,
Incorporated. A copy of such agreement
will be provided to the holder hereof
without charge upon receipt by
Commercial Bancshares, Incorporated 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 Commercial 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 Commercial, to the effect that such legend is not
required for purposes of the Securities Act.
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5. Representations. Commercial hereby represents,
warrants and covenants to Wesbanco as follows:
a. Commercial shall at all times maintain
sufficient authorized but unissued shares of
Commercial Common Stock so that the Option may be
exercised without authorization of additional
shares of Commercial 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 Commercial 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 Commercial 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 Commercial Common Stock subject to the Option
shall be adjusted so that, after such issuance, it equals 19.9%
of the number of shares of Commercial Common Stock then issued
and outstanding without giving effect to any shares subject or
issued pursuant to the Option. Nothing contained in this Section
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of the Merger Agreement.
7. Registration Rights. Commercial 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 Commercial 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 Commercial for
inclusion in any registration statement to be filed hereunder.
Commercial 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 Commercial be required to effect more than two
registrations hereunder. All expenses of registrations hereunder
shall be borne equally by Commercial 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 Commercial of Commercial Common Stock. If
requested by Wesbanco, in connection with any such registration,
Commercial 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, Commercial
agrees to send a copy thereof to Wesbanco and to any assignee
thereof known to Commercial, in each case by promptly mailing the
same, postage prepaid, to the address of record of the persons
entitled to receive such copies.
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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 Commercial Common Stock provided in Section 2 hereof (as adjusted
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pursuant to Section 6 hereof), it is the express
intention of Commercial 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 Commercial , purchase or other
acquisition of securities representing 51% or more
of the voting power of Commercial or any Commercial
Subsidiary has been consummated, or (ii) a willful
breach under Section 7.21(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,
Commercial 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 Commercial 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 Commercial has been made and
consummated, the price per share actually paid by
any third party pursuant to an agreement that has
been consummated whereby Commercial has been
merged, consolidated with or otherwise acquired by
a third party, and the highest closing price for
Commercial 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 Commercial
Common shall be determined by a nationally
recognized investment banking firm mutually
acceptable to the parties hereto.
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b. Wesbanco may exercise its right to
require Commercial to repurchase the Option
pursuant to this Section 9 by giving Commercial
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, Commercial shall deliver or cause to be
delivered to Wesbanco the Repurchase Price for the
Option or the portion thereof which Commercial is
not then prohibited under applicable law and
regulation from so delivering.
c. To the extent that Commercial is
prohibited under applicable law or regulation, or
as a result of administrative or judicial action,
from repurchasing the Option in full, Commercial
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 Commercial is no
longer so prohibited, provided, however, that to
the extent that Commercial is at the time and after
the expiration of 12 months, so prohibited from
delivering to Wesbanco, the Repurchase Price, in
full (and Commercial hereby undertakes to use its
best efforts to receive all required regulatory and
legal approvals as promptly as practicable),
Commercial shall deliver to Wesbanco a new Option
evidencing the right of Wesbanco to purchase that
number of shares of Commercial Common Stock
obtained by multiplying the number of shares of
Commercial 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 Commercial 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 Commercial at its principal
office stating that Wesbanco elects to revoke its
election to exercise its rights to require
Commercial to repurchase the Option, whereupon
Commercial will promptly deliver to Wesbanco the
Option and Commercial 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
Commercial Common Stock pursuant to the Option, Wesbanco shall
desire to sell, assign, transfer or otherwise dispose of all or
any of the shares of Commercial 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 Commercial 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 Commercial, which may be accepted within
ten business days of the receipt of such Offeror's
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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 Commercial 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, Commercial 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 Commercial to purchase all of the
shares covered by the Offeror's Notice or any applicable
regulatory authority shall disapprove Commercial'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 Commercial Common Stock, (ii) of
Commercial 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.
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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 17 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/ X. X. Xxxxxx
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Its President
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COMMERCIAL BANCSHARES,
INCORPORATED
By /s/ Xxxxx X. Xxxxxxx
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Its Executive VP & CFO
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