AGREEMENT AND PLAN OF MERGER
DATED AS OF
AUGUST 25, 2004
BY AND BETWEEN
WESBANCO, INC.,
WESBANCO BANK, INC.,
XXXXXX FINANCIAL CORPORATION
AND
THE XXXXXX SAVINGS AND LOAN CO.
TABLE OF CONTENTS
PAGE
ARTICLE ONE -- THE MERGER.........................................................................................2
1.01. Merger; Surviving Corporation............................................................................2
1.02. Bank Merger; Surviving Bank Corporation..................................................................2
1.03. Effective Time...........................................................................................2
1.04. Effects of the Merger....................................................................................2
1.05. Effects of the Bank Merger...............................................................................3
ARTICLE TWO -- CONVERSION OF SHARES AND OPTIONS; SURRENDER OF CERTIFICATES........................................3
2.01. Conversion of Seller Shares..............................................................................3
2.02. Conversion of Seller Stock Options.......................................................................4
2.03. Election and Exchange and Payment Procedures.............................................................6
2.04. Seller Shareholders' Dissenters Rights..................................................................13
2.05. Anti-Dilution Provisions................................................................................13
2.06. Conversion of WI Sub Capital Stock......................................................................14
ARTICLE THREE -- REPRESENTATIONS AND WARRANTIES OF SELLER........................................................14
3.01. Representations and Warranties of Seller................................................................14
ARTICLE FOUR -- REPRESENTATIONS AND WARRANTIES OF BUYER..........................................................34
4.01. Representations and Warranties of Buyer.................................................................34
ARTICLE FIVE -- FURTHER COVENANTS OF SELLER......................................................................49
5.01. Operation of Business...................................................................................49
5.02. Notification............................................................................................53
5.03. Acquisition Proposals...................................................................................54
5.04. Delivery of Information.................................................................................56
5.05. Affiliates Compliance with the Securities Act...........................................................56
5.06. Takeover Laws...........................................................................................57
5.07. No Control..............................................................................................57
ARTICLE SIX -- FURTHER COVENANTS OF BUYER........................................................................57
6.01. Access to Information...................................................................................57
6.02. Opportunity of Employment; Employee Benefits............................................................57
6.03. Exchange Listing........................................................................................58
6.04. Notification............................................................................................59
6.05. Takeover Laws...........................................................................................59
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6.06. Officers' and Directors' Indemnification................................................................59
6.07. Election of a Seller Director to Board of Directors; Advisory Board.....................................61
ARTICLE SEVEN -- FURTHER OBLIGATIONS OF THE PARTIES..............................................................61
7.01. Confidentiality.........................................................................................61
7.02. Necessary Further Action................................................................................62
7.03. Cooperative Action......................................................................................62
7.04. Satisfaction of Conditions..............................................................................62
7.05. Press Releases..........................................................................................63
7.06. Registration Statements; Proxy Statement; Shareholders' Meeting.........................................63
7.07. Regulatory Applications.................................................................................65
7.08. Coordination of Dividends...............................................................................65
ARTICLE EIGHT -- CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARTIES..........................................66
8.01. Conditions to the Obligations of Buyer and Wesbanco Sub.................................................66
8.02. Conditions to the Obligations of Seller.................................................................67
8.03. Mutual Conditions.......................................................................................68
ARTICLE NINE -- CLOSING..........................................................................................69
9.01. Closing.................................................................................................69
9.02. Closing Transactions Required of Buyer..................................................................69
9.03. Closing Transactions Required of Seller.................................................................70
ARTICLE TEN -- NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS.........................................70
10.01. Non-Survival of Representations, Warranties and Covenants..............................................70
ARTICLE ELEVEN -- TERMINATION....................................................................................71
11.01. Termination............................................................................................71
11.02. Effect of Termination..................................................................................74
ARTICLE TWELVE -- MISCELLANEOUS..................................................................................74
12.01. Notices................................................................................................74
12.02. Counterparts...........................................................................................75
12.03. Entire Agreement; No Third-Party Rights................................................................75
12.04. Successors and Assigns.................................................................................76
12.05. Captions...............................................................................................76
12.06. Governing Law..........................................................................................76
12.07. Payment of Fees and Expenses...........................................................................76
12.08. Amendment..............................................................................................77
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12.09. Waiver.................................................................................................77
12.10. Disclosure Schedules...................................................................................77
12.12. Waiver of Jury Trial...................................................................................77
12.13. Severability...........................................................................................77
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GLOSSARY OF DEFINED TERMS
The following terms, when used in this Agreement, have the meanings
ascribed to them in the corresponding Sections of this Agreement listed below:
"Acquisition Agreement" -- Section 5.03(b)
"Adjusted Option" -- Section 2.02(a)
"Agreement" -- Preamble
"Alpine" -- Section 3.01(a)
"AMEX" -- Section 3.01(w)
"Average Closing Price" -- Section 11.01(d)
"Bank Merger" -- Preamble
"BHC Act" -- Section 4.01(a)
"Buyer" -- Preamble
"Buyer Balance Sheet Date" -- Section 4.01(g)
"Buyer Compensation and Benefit Plans" -- Section 4.01(s)
"Buyer Consultants" -- Section 4.01(s)
"Buyer Directors" -- Section 4.01(s)
"Buyer Disclosure Schedule" -- Preamble
"Buyer Employees" -- Section 4.01(s)
"Buyer ERISA Affiliate" -- Section 4.01(s)
"Buyer ERISA Affiliate Plan" -- Section 4.01(s)
"Buyer Filed SEC Documents" -- Section 4.01(l)
"Buyer Financial Statements" -- Section 4.01(g)
"Buyer Officers" -- Section 4.01(s)
"Buyer Pension Plan" -- Section 4.01(s)
"Buyer Ratio" -- Section 11.01(d)
"Buyer SEC Documents" -- Section 4.01(f)
"Buyer Shares" and "Buyer Share" -- Preamble
"Buyer Stock Option Plans" -- Section 4.01(c)
"Buyer Subsidiary" or "Buyer Subsidiaries" -- Section 4.01(l)
"Buyer Subsidiary Real Estate Collateral" -- Section 4.01(v)
"Buyer's Financial Advisor" -- Section 4.01(i)
"Cash Designated Shares" -- Section 2.03(e)
"Cash Election Shares" -- Section 2.03(b)
"CERCLA" -- Section 3.01(y)
"Closing" -- Section 9.01
"Closing Date" -- Section 9.01
"Code" -- Preamble
"Compensation and Benefit Plans" -- Section 3.01(t)
"Constituent Corporations" -- Preamble
"Consultants" -- Section 3.01(t)
"Continuing Employees" -- Section 6.02(a)
"Contracts" -- Section 3.01(x)
"Costs" -- Section 6.06(a)
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"CRA" -- Section 3.01(dd)
"Determination Date" -- Section 2.01(b)
"Directors" -- Section 3.01(t)
"DOL" -- Section 3.01(t)
"DPC Shares" -- Section 2.01(c)
"Effective Time" -- Section 1.03
"Election Deadline" -- Section 2.03(b)
"Election Form" -- Section 2.03(a)
"Election Form Record Date" -- Section 2.03(a)
"Employees" -- Section 3.01(t)
"Environmental Law" -- Section 3.01(y)
"ERISA" -- Section 3.01(t)
"Exchange Act" -- Section 3.01(g)
"Exchange Agent" -- Section 2.03(c)
"Exchange Fund" -- Section 2.03(f)
"Exchange Ratio" -- Section 2.01(b)
"fair cash value" -- Section 2.04
"FDIC" -- Section 3.01(l)
"GAAP" -- Section 3.01(f)
"Governmental Authority" -- Section 3.01(q)
"Hazardous Substances" -- Section 3.01(y)
"HOLA" -- Section 3.01(a)
"Indemnified Party" -- Section 6.06(a)
"Index Price" -- Section 11.01(d)
"Information" -- Section 7.01
"Insurance Amount" -- Section 6.06(c)
"IRS" -- Section 3.01(m)
"K&L" -- Section 8.01(d)
"Letter of Confidentiality" -- Section 12.03
"Loan Assets" -- Section 3.01(j)
"Loan Documentation" -- Section 3.01(j)
"Mailing Date" -- Section 2.03(a)
"material" -- Section 3.01(a)
"material adverse effect" -- Section 3.01(a)
"Merger" -- Preamble
"Merger Consideration" -- Section 2.01(a)
"Nasdaq" -- Section 2.01(b)
"No Election Shares" -- Section 2.03(b)
"Notice of Superior Proposal" -- Section 5.03(b)
"Officers" -- Section 3.01(t)
"OGCL" -- Section 1.01
"Ohio Division" -- Section 3.01(a)
"Ohio Secretary of State" -- Section 1.03
"OTS" -- Section 3.01(a)
"PBGC" -- Section 3.01(t)
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"PCBs" -- Section 3.01(y)
"Pending Transaction" -- Section 4.01(c)
"Per Share Cash Consideration" -- Section 2.01(b)
"Per Share Consideration -- Section 11.01(d)
"Per Share Stock Consideration" -- Section 2.01(b)
"Proxy Statement/Prospectus" -- Section 7.06(a)
"Registration Statement" -- Section 7.06(a)
"Regulatory Authorities" -- Section 3.01(p)
"Representatives" -- Section 7.01
"Rule 145 Affiliates" -- Section 5.05(a)
"SEC" -- Section 3.01(c)
"Section 2.03(e) Cash Amount" -- Section 2.03(e)
"Securities Act" -- Section 5.05(a)
"Seller" -- Preamble
"Seller Balance Sheet Date" -- Section 3.01(h)
"Seller Certificate" -- Section 2.03(g)
"Seller Disclosure Schedule" -- Preamble
"Seller Dissenting Share" -- Section 2.04
"Seller ERISA Affiliate" -- Section 3.01(t)
"Seller ERISA Affiliate Plan" -- Section 3.01(t)
"Seller Filed SEC Documents" -- Section 3.01(h)
"Seller Financial Statements" -- Section 3.01(f)
"Seller Meeting" -- Section 7.06(e)
"Seller Pension Plan" -- Section 3.01(t)
"Seller Real Properties" -- Section 3.01(n)
"Seller Representatives" -- Section 5.03(a)
"Seller SEC Documents" -- Section 3.01(g)
"Seller Shares" and "Seller Share" -- Preamble
"Seller Stock Options" -- Section 3.01(b)
"Seller Stock Option Plans" -- Section 3.01(b)
"Seller Subsidiary" and "Seller Subsidiaries" -- Section 3.01(a)
"Seller Subsidiary Real Estate Collateral" -- Section 3.01(y)
"Seller's Financial Advisor" -- Section 3.01(r)
"Starting Date" -- Section 11.01(d)
"Starting Price" -- Section 11.01(d)
"Stock Designated Shares" -- Section 2.03(e)
"Stock Election Shares" -- Section 2.03(b)
"Subsidiary" -- Section 3.01(c)
"Superior Proposal" -- Section 5.03(b)
"Surviving Bank Corporation" -- Section 1.02
"Surviving Corporation" -- Section 1.01
"Takeover Laws" -- Section 3.01(z)
"Takeover Proposal" -- Section 5.03(a)
"Tax" or "Taxes" -- Section 3.01(m)
"Tax Returns" -- Section 3.01(m)
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"Top-up Notice" -- Section 11.01(d)
"Total Cash Amount -- Section 2.01(b)
"Trust Account Shares" -- Section 2.01(c)
"Updated Buyer Disclosure Schedule" -- Section 6.04
"Updated Seller Disclosure Schedule" -- Section 5.02
"VSSP" -- Section 8.01(e)
"Walkaway Determination Date: -- Section 11.01(d)
"Walkaway Right" -- Section 11.01(d)
"Walnut" -- Section 3.01(a)
"WB Sub" -- Preamble
"West Virginia Secretary of State" -- Section 1.03
"WI Sub" -- Preamble
"WVBCA" -- Section 1.01
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AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "AGREEMENT"), dated as
of August 25, 2004, is made and entered into by and between Wesbanco, Inc., a
West Virginia corporation ("BUYER"), Wesbanco Bank, Inc., a West Virginia
banking corporation and a wholly owned subsidiary of Buyer ("WB SUB"), Xxxxxx
Financial Corporation, an Ohio corporation ("SELLER"), and The Xxxxxx Savings
and Loan Co., an Ohio savings and loan association and a wholly owned subsidiary
of Seller ("WI SUB"). Buyer and Seller are sometimes hereinafter collectively
referred to as the "CONSTITUENT CORPORATIONS".
W I T N E S S E T H:
WHEREAS, the Boards of Directors of Seller, WI Sub, Buyer and
WB Sub have each determined that it is in the best interests of their respective
corporations and shareholders for Buyer to acquire Seller pursuant to a merger
of Seller with and into Buyer (the "MERGER") and, immediately after the Merger,
a merger of WI Sub with and into WB Sub (the "BANK MERGER") upon the terms and
subject to the conditions set forth in this Agreement; and
WHEREAS, the Boards of Directors of Seller, WI Sub, Buyer and
WB Sub have each approved this Agreement and the consummation of the
transactions contemplated hereby; and
WHEREAS, as a result of the Merger, in accordance with the
terms of this Agreement, Seller will cease to have a separate corporate
existence and the shareholders of Seller will receive from Buyer in exchange for
each share of common stock, without par value, of Seller (individually "SELLER
SHARE" and collectively "SELLER SHARES"), (a) $20.75 in cash, or (b) 0.755
shares of common stock, $2.0833 par value per share, of Buyer (individually
"BUYER SHARE" and collectively "BUYER SHARES"), as may be adjusted as provided
herein, all as determined in accordance with the terms of this Agreement; and
WHEREAS, for Federal income tax purposes, it is intended that
the Merger contemplated by this Agreement qualify as a "reorganization" under
the provisions of Section 368(a) of the Internal Revenue Code of 1986, as
amended (the "CODE"); and
WHEREAS, Seller has previously provided to Buyer a schedule
disclosing additional information about Seller (the "SELLER DISCLOSURE
SCHEDULE"), and Buyer has previously provided to Seller a schedule disclosing
additional information about Buyer (the "BUYER DISCLOSURE SCHEDULE");
NOW, THEREFORE, in consideration of the premises and the
respective representations, warranties, covenants, agreements and conditions
hereinafter set forth, Seller and Buyer, intending to be legally bound hereby,
agree as follows:
ARTICLE ONE
THE MERGER
1.01. MERGER; SURVIVING CORPORATION
Upon the terms and subject to the conditions of this
Agreement, at the Effective Time (as defined in Section 1.03), Seller shall
merge with and into Buyer in accordance with the West Virginia Business
Corporation Act (the "WVBCA") and the Ohio General Corporation Law (the "OGCL").
Buyer shall be the continuing and surviving corporation in the Merger, shall
continue to exist under the laws of the State of West Virginia and shall be the
only one of the Constituent Corporations to continue its separate corporate
existence after the Effective Time. As used in this Agreement, the term
"SURVIVING CORPORATION" refers to Buyer at and after the Effective Time. As a
result of the Merger, the outstanding shares of capital stock and the treasury
shares of the Constituent Corporations shall be converted in the manner provided
in Article Two.
1.02 BANK MERGER; SURVIVING BANK CORPORATION
Upon the terms and subject to the conditions of this
Agreement, at the Effective Time (as defined in Section 1.03), WI Sub shall
merge with and into WB Sub in accordance with the WVBCA, the OGCL and Chapter
1151 of the Ohio Revised Code. WB Sub shall be the continuing and surviving bank
corporation in the Bank Merger, shall continue to exist under the laws of the
State of West Virginia, continuing its separate corporate existence after the
Effective Time. As used in this Agreement, the term "SURVIVING BANK CORPORATION"
refers to WB Sub at and after the Effective Time. As a result of the Bank
Merger, the outstanding shares of capital stock of WI Sub shall be converted in
the manner provided in Section 2.06.
1.03. EFFECTIVE TIME
The Merger and the Bank Merger shall become effective upon the
latest of the following: (a) the filing of the appropriate articles of merger
with the Secretary of State of the State of West Virginia (the "WEST VIRGINIA
SECRETARY OF STATE"), (b) the filing of the appropriate certificates of merger
with the Secretary of State of the State of Ohio (the "OHIO SECRETARY OF STATE")
or (c) such time thereafter as is agreed to in writing by Buyer and Seller and
so provided in the articles or certificates of merger filed as set forth above;
provided, however, that the Bank Merger shall not become effective until after
the Merger has become effective. The date and time at which the Merger shall
become effective is referred to in this Agreement as the "EFFECTIVE TIME."
1.04. EFFECTS OF THE MERGER
At the Effective Time:
(a) the articles of incorporation of Buyer as in effect
immediately prior to the Effective Time shall be the
articles or incorporation of the Surviving
Corporation;
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(b) the bylaws of Buyer as in effect immediately prior
to the Effective Time shall be the bylaws of the
Surviving Corporation;
(c) the Merger shall have the effects prescribed in the
WVBCA and OGCL; and
(d) the location of the principal office of the Surviving
Corporation shall be Xxx Xxxx Xxxxx, Xxxxxxxx, XX
00000.
1.05 EFFECTS OF THE BANK MERGER
Immediately following the Effective Time:
(a) the articles of incorporation of WB Sub as in effect
immediately prior to the Effective Time shall be the
articles of incorporation of the Surviving Bank
Corporation;
(b) the bylaws of WB Sub as in effect immediately prior
to the Effective Time shall be the bylaws of the
Surviving Bank Corporation; and
(c) the Bank Merger shall have the effects prescribed in
the WVBCA and OGCL.
ARTICLE TWO
CONVERSION OF SHARES AND OPTIONS; SURRENDER OF CERTIFICATES
2.01. CONVERSION OF SELLER SHARES
At the Effective Time, by virtue of the Merger and without
any action on the part of the holder thereof:
(a) Subject to the other provisions of this Article
Two, each Seller Share issued and outstanding
immediately prior to the Effective Time (other than
(i) Seller Shares held directly or indirectly by
Buyer or Seller or any of their respective
Subsidiaries (as defined below) (except for Trust
Account Shares and DPC Shares, as such terms are
defined in Section 2.01(b) hereof), and (ii) Seller
Dissenting Shares (as defined in Section 2.04))
shall, by virtue of this Agreement and without any
action on the part of the holder thereof, be
converted into and exchangeable for the right to
receive, at the election of the holder thereof as
provided in and subject to the provisions of this
Section 2.01, either (i) the Per Share Stock
Consideration (as defined below) or (ii) the Per
Share Cash Consideration (as defined below). The Per
Share Stock Consideration and the Per Share Cash
Consideration are referred to herein collectively as
the "MERGER CONSIDERATION."
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(b) For purposes of this Agreement, the following terms
shall have the following meanings:
i. "PER SHARE STOCK CONSIDERATION" shall
mean a number of Buyer Shares equal to
the Exchange Ratio;
ii. "PER SHARE CASH CONSIDERATION" shall
mean $20.75;
iii. "EXCHANGE RATIO" shall mean 0.755;
iv. "TOTAL CASH AMOUNT" shall mean 40% of
the product obtained by multiplying (x)
the Per Share Cash Consideration and (y)
the total number of shares of Seller
Shares outstanding as of the close of
business on the Determination Date; and
v. "DETERMINATION DATE" shall mean the
third calendar day immediately prior to
the Effective Time, or if such calendar
day is not a trading day on The Nasdaq
National Market System ("NASDAQ"), then
the trading day immediately preceding
such calendar day.
(c) At the Effective Time, all Seller Shares that are
owned directly or indirectly by Buyer or Seller or
any of their respective Subsidiaries (other than
Seller Shares (x) held directly or indirectly in
trust accounts, managed accounts and the like or
otherwise held in a fiduciary capacity for the
benefit of third parties (any such shares, and shares
of Buyer Common Stock which are similarly held,
whether held directly or indirectly by Buyer or
Seller, as the case may be, being referred to herein
as "TRUST ACCOUNT SHARES") or (y) held by Buyer or
Seller or any of their respective Subsidiaries in
respect of a debt previously contracted (any such
Seller Shares, and Buyer Shares which are similarly
held, whether held directly or indirectly by Buyer or
Seller, being referred to herein as "DPC SHARES"))
shall be cancelled and shall cease to exist and no
Buyer Shares, cash or other consideration shall be
delivered in exchange therefor. At the Effective
Time, all Buyer Shares that are owned by Seller or
any of its Subsidiaries (other than Trust Account
Shares and DPC Shares) shall become treasury stock of
Buyer.
(d) The calculations required by this Section 2.01 shall
be prepared jointly by Buyer and Seller prior to the
Closing Date.
2.02. CONVERSION OF SELLER STOCK OPTIONS
(a) At or before the Effective Time and in connection
with the Merger, the following shall occur:
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(i) Each Seller Stock Option which is
outstanding and unexercised immediately
prior to the Effective Time shall, upon the
election of the holder thereof, be
terminated immediately prior to the
Effective Time and each holder thereof shall
be entitled to receive, in lieu of each
Seller Share that would otherwise have been
issuable upon exercise thereof, an amount in
cash equal to the excess, if any, of $20.75
over the exercise price of such Seller Stock
Option.
(ii) Each Seller Stock Option outstanding
immediately prior to the Effective Time that
is not terminated pursuant to Section
2.02(a)(i) above shall be amended and
converted into an option (an "ADJUSTED
OPTION") to purchase a number of Buyer
Shares (rounded to the nearest whole share)
equal to (A) the number of Seller Shares
subject to such Seller Stock Option
immediately prior to the Effective Time
multiplied by (B) the Exchange Ratio; and
the per share exercise price for the Buyer
Shares issuable upon the exercise of such
Adjusted Option shall be equal to (Y) the
exercise price per share of the Seller
Shares at which such Seller Stock Option was
exercisable immediately prior to the
Effective Time divided by (Z) the Exchange
Ratio (rounded to the nearest whole cent);
provided, however, that in the case of any
Seller Stock Option to which Section 421 of
the Code applies by reason of its
qualification under Section 422 of the Code,
the conversion formula shall be adjusted, if
necessary, to comply with Section 424(a) of
the Code. Except as otherwise provided
herein, the Adjusted Options shall be
subject to the same terms and conditions
(including expiration date, vesting and
exercise provisions) as were applicable to
the corresponding Seller Stock Options
immediately prior to the Effective Time.
(b) The adjustments provided herein with respect to any
Seller Stock Options that are "incentive stock
options" as defined in Section 422 of the Code shall
be and are intended to be effected in a manner which
is consistent with Sections 422 and 424(a) of the
Code and all regulations promulgated thereunder.
(c) At the Effective Time, Buyer shall assume the
Seller Stock Plans, with the result that all
obligations of Seller under the Seller Stock Option
Plans (as that term is defined in Section 3.01(b))
with respect to the Adjusted Options shall be
obligations of Buyer following the Effective Time.
(d) On or prior to the date that is thirty (30) days
after the Effective Time, Buyer shall prepare and
file with the SEC a registration statement on Form
S-8 (or another appropriate form) registering a
number of shares of Buyer Shares equal to at least
the number of shares subject to the Adjusted Options.
Such registration statement shall be kept effective
(and the
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current status of the prospectus or prospectuses
required thereby shall be maintained) as long as any
Adjusted Options may remain outstanding.
(e) Except as otherwise specifically provided by this
Section 2.02 and except to the extent required under
the respective terms of Seller Stock Options as in
effect on the date of this Agreement, all
restrictions or limitations on transfer with respect
to Seller Stock Options awarded under Seller Stock
Option Plans or any other plan, program or
arrangement of Seller or any of its subsidiaries, to
the extent that such restrictions or limitations
shall not have already lapsed, and all other terms
thereof, shall remain in full force and effect with
respect to such options after giving effect to the
Merger and the assumption by Buyer as set forth
above.
(f) In addition to any method of exercise permitted under
the applicable Seller Stock Option, a holder of an
Adjusted Option may exercise such Adjusted Option in
whole or in part in accordance with its terms by
delivering a properly executed notice of exercise to
Buyer, together with the consideration therefor and
the federal withholding tax information, if any,
required in accordance with the related Seller Stock
Option Plan.
2.03. ELECTION AND EXCHANGE AND PAYMENT PROCEDURES
(a) Election Procedure. An election form and other
appropriate and customary transmittal materials
(which shall specify that delivery shall be effected,
and risk of loss and title to the certificates
theretofore representing the Seller Shares shall
pass, only upon proper delivery of such certificates
to the Exchange Agent (as defined below))in such form
as Buyer and Seller shall mutually agree (the
"ELECTION FORM") shall be mailed 20 calendar days
prior to the anticipated Effective Time or on such
other date as Seller and Buyer shall mutually agree
(the "MAILING DATE") to each holder of record of
Seller Shares as of the close of business on the
fifth trading day prior to the Mailing Date (the
"ELECTION FORM RECORD DATE").
(b) Election. Each Election Form shall permit the
holder (or the beneficial owner through appropriate
and customary documentation and instructions) to
specify (i) the number of such holder's Seller Shares
with respect to which such holder elects to receive
the Per Share Stock Consideration ("STOCK ELECTION
SHARES"), (ii) the number of such holder's Seller
Shares with respect to which such holder elects to
receive the Per Share Cash Consideration ("CASH
ELECTION Shares"), or (iii) that such holder makes no
election with respect to such holder's Seller Shares
("NO ELECTION SHARES"). All Seller Shares with
respect to which the Exchange Agent has not received
an effective, properly completed Election Form on or
before 5:00 p.m., on the 17th calendar day following
the Mailing Date (or such other time and date as
Buyer and Seller may mutually agree) (the "ELECTION
DEADLINE") shall also be deemed to be No Election
Shares.
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(c) Exchange Agent; Election Forms. Buyer will designate
Computershare Investor Services, LLC or such other
entity as reasonably shall be approved by Seller in
writing to act as agent (the "EXCHANGE AGENT") for
purposes of conducting the election procedure and the
exchange and payment procedures as described in this
Section 2.03. Buyer shall make available one or more
Election Forms as may reasonably be requested from
time to time by all persons who become holders (or
beneficial owners) of Seller Shares between the
Election Form Record Date and the close of business
on the business day prior to the Election Deadline,
and Seller shall provide to the Exchange Agent all
information reasonably necessary for it to perform as
specified herein.
(d) Proper Election. Any such 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 certificates (or customary affidavits and
indemnification regarding the loss or destruction of
such certificates or the guaranteed delivery of such
certificates) representing all Seller Shares covered
by such Election Form, together with duly executed
transmittal materials included in the Election Form;
provided, however, that holders of Seller Shares
shall be instructed to execute revocable stock powers
in respect of such certificates and not to endorse
such certificates for transfer. Any Election Form may
be revoked or changed by the person submitting such
Election Form at or prior to the Election Deadline.
If an Election Form is revoked prior to the Election
Deadline and a new Election Form is not submitted
prior to the Election Deadline, the Seller Shares
represented by such Election Form shall become No
Election Shares and Buyer shall cause the
certificates representing such Seller Shares to be
promptly returned without charge to the Person
submitting the Election Form upon written request to
that effect from the holder who submitted 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, revocation or change has been properly or
timely made and to disregard immaterial defects in
the Election Forms, and any good faith decisions of
the Exchange Agent regarding such matters shall be
binding and conclusive. Neither Buyer nor the
Exchange Agent shall be under any obligation to
notify any person of any defect in the election form.
In the event of the termination of this Agreement
before the Effective Time, all Election Forms shall
be null, void and of no force or effect and all
certificates shall immediately be returned to holders
of Seller shares, along with stock powers in respect
thereof.
(e) Pro Rata Allocation. Within ten business days after
the Election Deadline, unless the Effective Time has
not yet occurred, in which case as
7
soon thereafter as practicable, Buyer shall cause the
Exchange Agent to effect the allocation among the
holders of Seller Shares of rights to receive Buyer
Shares or cash in the Merger in accordance with the
Election Forms as follows:
(1) Cash Election Shares More Than Total Cash
Amount. If the aggregate cash amount that would be
paid upon the conversion in the Merger of the Cash
Election Shares (the "SECTION 2.03(e) CASH AMOUNT")
is greater than the Total Cash Amount, then:
(A) all Stock Election Shares and No Election
Shares shall be converted into the right to
receive the Per Share Stock Consideration,
(B) the Exchange Agent shall then select from
among the Cash Election Shares, by a pro rata
selection process, a sufficient number of
shares ("STOCK DESIGNATED SHARES") such that
the aggregate cash amount that will be paid
in the Merger (excluding, however, any cash
paid in lieu of fractional shares pursuant to
2.03(j) hereof, any cash paid to dissenting
shareholders pursuant to Section 2.04 hereof
and any cash paid in respect of options to
purchase Seller Shares under Section 2.02 or
any other provision of this Agreement) equals
as closely as practicable the Total Cash
Amount, and all Stock Designated Shares shall
be converted into the right to receive the
Per Share Stock Consideration; and
(C) the Cash Election Shares that are not Stock
Designated Shares will be converted into the
right to receive the Per Share Cash
Consideration.
(2) Cash Election Shares Less Than Total Cash Amount. If
the Section 2.03(e) Cash Amount is less than the
Total Cash Amount, then:
(A) all Cash Election Shares shall be converted
into the right to receive the Per Share Cash
Consideration;
(B) the Exchange Agent shall then select first
from among the No Election Shares and then
(if necessary) from among the Stock Election
Shares, by a pro rata selection process
(excluding, to the extent possible, Seller
Shares acquired through the exercise of any
incentive stock option at any time within
twelve months prior to the Effective Time,
which shares are identified on Exhibit
2.01(e)(2)(B) hereto), a sufficient number of
shares ("CASH DESIGNATED
8
SHARES") such that the aggregate cash amount
that will be paid in the Merger (excluding,
however, without limitation, any cash paid in
respect of options to purchase Seller Shares
under Section 2.02 or any other provision of
this Agreement) equals as closely as
practicable the Total Cash Amount, and all
Cash Designated Shares shall be converted
into the right to receive the Per Share Cash
Consideration; and
(C) the Stock Election Shares and the No
Election Shares that are not Cash Designated
Shares shall be converted into the right to
receive the Per Share Stock Consideration.
(3) Cash Election Shares Equal to Total Cash Amount.
If the Section 2.03(e) Cash Amount is equal or nearly
equal (as determined by the Exchange Agent) to the
Total Cash Amount, then subparagraphs (1) and (2)
above shall not apply, all Cash Election Shares shall
be converted into the right to receive the Per Share
Cash Consideration and all Stock Election Shares and
No Election Shares shall be converted into the right
to receive the Per Share Stock Consideration.
The pro rata selection process to be used by the Exchange
Agent shall consist of such equitable pro ration processes as
shall be mutually determined by Buyer and Seller.
(f) Deposit with Exchange Agent; Exchange Fund. At or
prior to the Effective Time, Buyer shall provide to
the Exchange Agent the number of Buyer Shares
issuable pursuant to Sections 2.01(a) and 2.03, the
Total Cash Amount, the cash in respect of fractional
Buyer Shares payable pursuant to Section 2.03(j), and
the amount of all other cash payable in the Merger,
if any, all of which shall be held by the Exchange
Agent in trust for the holders of Seller Shares
(collectively, the "EXCHANGE FUND"). The Exchange
Agent shall not be entitled to vote or exercise any
rights of ownership with respect to the Buyer Shares
held by it from time to time hereunder, except that
it shall receive and hold in trust for the recipients
of the Buyer Shares until distributed thereto
pursuant to the provisions of this Agreement all
dividends or other distributions paid or distributed
with respect to such Buyer Shares for the account of
the persons entitled thereto. The Exchange Fund shall
not be used for any purpose other than as set forth
in this paragraph. The Exchange Agent shall invest
cash in the Exchange Fund, as directed by Buyer, on a
daily basis; provided, however, that all such
investments shall be in (1) obligations of, or
guaranteed by, the United States of America, (2)
commercial paper obligations receiving the highest
rating from either Xxxxx'x Investors Services, Inc.
or Standard and Poor's Corporation, or (3)
certificates of deposit of commercial banks (not
including any Subsidiary or affiliate of Buyer) with
capital exceeding
9
$1.0 billion. All interest and other income resulting
from such investments shall be paid to Buyer.
(g) Surrender of Seller Certificates. As promptly as
practicable after the Effective Time, Buyer shall
send or cause to be sent to each former holder of
record of Seller Shares who did not comply with
Section 2.03(d) of this Agreement, transmittal
materials (which shall specify that delivery shall be
effected, and risk of loss and title to the
certificates theretofore representing the Seller
Shares shall pass only upon proper delivery of such
certificates to the Exchange Agent). Each holder of
an outstanding certificate or certificates which
prior to the Effective Time represented Seller Shares
("SELLER CERTIFICATE"), who surrenders such Seller
Certificate to the Exchange Agent shall, upon
acceptance thereof by the Exchange Agent, be entitled
to a certificate representing the full number of
Buyer Shares and/or the amount of cash into which the
aggregate number of Seller Shares previously
represented by such Seller Certificate surrendered
shall have been converted pursuant to this Agreement
and, if such holder's Seller Shares have been
converted into Buyer Shares, any other distribution
theretofore paid with respect to Buyer Shares
issuable in the Merger which remains unpaid at the
Effective Time, in each case without interest. The
Exchange Agent shall accept such Seller Certificate
upon compliance with such reasonable terms and
conditions as the Exchange Agent may impose to affect
an orderly exchange thereof in accordance with normal
exchange practices and shall as promptly as
practicable issue the certificates representing Buyer
Shares and/or cash in accordance with this Agreement.
Each Seller Certificate that is not surrendered to
the Exchange Agent in accordance with the procedures
provided for herein shall, except as otherwise herein
provided, until duly surrendered to the Exchange
Agent be deemed to evidence ownership of the number
of Buyer Shares or the right to receive the amount of
cash into which such Seller Shares shall have been
converted. After the Effective Time, there shall be
no further transfer on the records of Seller of a
Seller Certificate representing Seller Shares and, if
any such Seller Certificate is presented to Seller
for transfer, it shall be canceled against delivery
of certificates for Buyer Shares and/or cash as
hereinabove provided.
(h) Lost Certificates. If there shall be delivered to
the Exchange Agent by any person who is unable to
produce any Seller Certificate for Seller Shares for
surrender to the Exchange Agent in accordance with
this Section 2.03:
(i) evidence to the reasonable satisfaction of
the Surviving Corporation that such Seller
Certificate has been lost, wrongfully taken,
or destroyed;
(ii) such security or indemnity as reasonably may
be requested by the Surviving Corporation to
save it harmless (which may include the
requirement to obtain a third party bond or
surety); and
10
(iii) evidence to the reasonable satisfaction of
the Surviving Corporation that such person
was the owner of the Seller Shares
theretofore represented by each such Seller
Certificate claimed by him to be lost,
wrongfully taken or destroyed and that he is
the person who would be entitled to present
such Seller Certificate for exchange
pursuant to this Agreement;
then the Exchange Agent, in the absence of actual notice to it
that any Seller Shares theretofore represented by any such
Seller Certificate have been acquired by a bona fide
purchaser, shall deliver to such person the cash and/or Buyer
Shares (and cash in lieu of fractional Buyer Share interests,
if any) that such person would have been entitled to receive
upon surrender of each such lost, wrongfully taken or
destroyed Seller Certificate.
(i) No Further Ownership Rights in Seller Shares. All
cash and Buyer Shares issued upon conversion of
Seller Shares in accordance with the terms hereof
(including any cash paid pursuant to Section 2.03(g)
or 2.03(j)) shall be deemed to have been issued in
full satisfaction of all rights pertaining to such
Seller Shares, subject, however, to the Surviving
Corporation's obligation to pay any dividends or make
any other distributions with a record date prior to
the Effective Time which may have been declared or
made by Seller on such Seller Shares in accordance
with the terms of this Agreement on or prior to the
Effective Time and which remain unpaid at the
Effective Time.
(j) No Fractional Buyer Shares.
(i) No certificates or scrip representing
fractional Buyer Shares shall be issued upon
the surrender for exchange of Seller
Certificates evidencing Seller Shares, and
such fractional Buyer Share interests will
not entitle the owner thereof to vote or to
any rights of a shareholder of the Surviving
Corporation.
(ii) Each holder of Seller Shares who would
otherwise be entitled to receive a
fractional Buyer Share shall receive from
the Exchange Agent an amount of cash equal
to the product obtained by multiplying (a)
the fractional Buyer Share interest to which
such holder (after taking into account all
Seller Shares held at the Effective Time by
such holder) would otherwise be entitled by
(b) $20.75.
(k) Termination of Exchange Fund. Any portion of the
Exchange Fund delivered to the Exchange Agent by
Buyer pursuant to Section 2.03(f) which remains
undistributed to the shareholders of Seller for
twelve (12) months after the Effective Time shall be
delivered to the Surviving Corporation, upon demand,
and any shareholders of Seller who have not
theretofore complied with this Article Two shall
thereafter look only to the
11
Surviving Corporation for payment of the Per Share
Stock Consideration, the Per Share Cash
Consideration, any cash in lieu of fractional Buyer
Share interest and any dividends or distributions
with respect to Buyer Shares, in each case without
interest.
(l) No Liability. None of Buyer, Seller, the Exchange
Agent or the Surviving Corporation shall be liable to
any former holder of Seller Shares for any payment of
the Per Share Stock Consideration, the Per Share Cash
Consideration, any cash in lieu of fractional Buyer
Share interest or any dividends or distributions with
respect to Buyer Shares delivered to a public
official if required by any applicable abandoned
property, escheat or similar law.
(m) Withholding Rights. Buyer or the Exchange Agent
shall be entitled to deduct and withhold from the
consideration otherwise payable pursuant to this
Agreement to any holder of Seller Certificates such
amounts as Buyer or the Exchange Agent is required to
deduct and withhold with respect to the making of
such payment under the Code, or any other provision
of domestic or foreign (whether national, federal,
state, provincial, local or otherwise) tax law. To
the extent that amounts are so withheld and paid over
to the appropriate taxing authority by Buyer or the
Exchange Agent, such withheld amounts shall be
treated for all purposes of this Agreement as having
been paid to the holder of the Seller Certificates in
respect of which such deduction and withholding was
made by Buyer, the Surviving Corporation or the
Exchange Agent.
(n) Waiver. The Surviving Corporation may from time to
time, in the case of one or more persons, waive one
or more of the rights provided to it in this Article
Two to withhold certain payments, deliveries and
distributions; and no such waiver shall constitute a
waiver of its rights thereafter to withhold any such
payment, delivery or distribution in the case of any
person.
(o) Section 16(a) Exemption. Prior to the Effective
Time, Buyer and Seller shall take all such steps as
may be required to cause any acquisitions of Buyer
equity securities (including derivative securities
with respect to any Buyer equity securities) and
dispositions of Seller equity securities (including
derivative securities with respect to any Seller
equity securities) resulting from the transactions
contemplated by this Agreement by each individual who
is anticipated to be subject to the reporting
requirements of Section 16(a) of the Exchange Act
with respect to Buyer or who is subject to the
reporting requirements of Section 16(a) of the
Exchange Act with respect to Seller, to be exempt
under Rule 16b-3 promulgated under the Exchange Act.
12
2.04. SELLER SHAREHOLDERS' DISSENTERS' RIGHTS
Anything contained in this Agreement or elsewhere to the
contrary notwithstanding, if any holder of an outstanding Seller Share who is
entitled to demand and properly demands payment of the "FAIR CASH VALUE" of such
Seller Share in accordance with Section 1701.85 of the OGCL (a "SELLER
DISSENTING SHARE"), then such Seller Dissenting Share shall not be converted
into the right to receive the Merger Consideration, and instead:
(a) Each such Seller Dissenting Share shall nevertheless
be deemed to be extinguished at the Effective Time
as provided elsewhere in this Agreement;
(b) Each holder perfecting such dissenters' rights
shall thereafter have only such rights (and shall
have such obligations) as are provided in Section
1701.85 of the OGCL, and the Surviving Corporation
shall not be required to deliver any cash payments to
such person in substitution for each such Seller
Dissenting Share in accordance with this Agreement;
provided, however, that if any such person shall have
failed to perfect or shall withdraw or lose such
holder's rights under Section 1701.85 of the OGCL,
each such holder's Seller Dissenting Share shall
thereupon be deemed to have been converted as of the
Effective Time into the right to receive the Per
Share Stock Consideration or the Per Share Cash
Consideration, as shall have been designated on the
Election Form submitted by such holder prior to the
Election Deadline, or if no such designation shall
have been made, the Per Share Cash Consideration,
without any interest thereon, pursuant to Section
2.01 and subject to Section 2.03.
No holder of a Seller Dissenting Share shall be entitled to submit a
letter of transmittal, and any letter of transmittal submitted by a holder of a
Seller Dissenting Share shall be invalid, unless and until the demand for the
payment of the fair cash value made in respect of such Seller Dissenting Share
shall have been or is deemed to have been withdrawn.
2.05. ANTI-DILUTION PROVISIONS
In the event that, subsequent to the date of this Agreement
but prior to the Effective Time, the outstanding Buyer Shares are increased,
decreased, changed into or exchanged for a different number or kind of shares or
securities (or Buyer establishes a record date for effecting any such change to
the outstanding Buyer Shares) as a result of a reorganization, recapitalization,
reclassification, stock dividend, stock split, reverse stock split or other like
changes in Buyer's capitalization, the Exchange Ratio and the Per Share
Consideration shall be adjusted fully; provided, however, that nothing contained
herein shall require any adjustment to the Exchange Ratio or the Per Share Stock
Consideration as a result of the issuance of additional Buyer Shares for
consideration which, if such issuance was for more than 19.9% of the then
outstanding Buyer Shares, would not require the approval of the Buyer
shareholders. Nothing contained herein shall be deemed to permit any action
which may be proscribed by this Agreement.
13
2.06. CONVERSION OF WI SUB CAPITAL STOCK
Immediately after the Effective Time, each issued and
outstanding share, and each share held in the treasury, of capital stock of WI
Sub shall, by virtue of the Bank Merger and without any action on the part of
the holder thereof, be canceled without any conversion or issuance of any shares
of capital stock of Buyer or WB Sub with respect thereto. No shares of Buyer or
WB Sub shall be issued or exchanged and no consideration shall be given for
shares of WI Sub, and each then-issued and outstanding share, and each share
then held in the treasury, of capital stock of WB Sub shall, by virtue of the
Bank Merger and without any action on the part of the holder thereof, continue
as one share of capital stock of the Surviving Bank Corporation having the same
designations, preferences, limitations, and rights as such share of capital
stock of WB Sub immediately prior to the Bank Merger.
ARTICLE THREE
REPRESENTATIONS AND WARRANTIES OF SELLER
3.01. REPRESENTATIONS AND WARRANTIES OF SELLER
Except as set forth on the Seller Disclosure Schedule (with
specific reference to the Section or Subsection of this Agreement to which the
information stated in such disclosure relates, provided that any fact, item,
contract, agreement, document or instrument listed or described, and any
information disclosed, in any Section or Subsection thereof shall be deemed
listed, described and disclosed in all other applicable Sections and Subsections
even though not expressly set forth in such other Section(s) or Subsection(s)),
Seller and WI Sub hereby jointly and severally represent and warrant to Buyer
and WB Sub as follows:
(a) Corporate Status.
(i) Seller is an Ohio corporation and a unitary
savings and loan holding company registered
under the Home Owners Loan Act, as amended
("HOLA"). Seller is duly organized, validly
existing and in good standing under the laws
of the State of Ohio, has the full corporate
power and authority to own its property, to
carry on its business as presently conducted,
and to enter into and, subject to the
required adoption of this Agreement by the
Seller shareholders and the obtaining of
appropriate approvals of Governmental
Authorities (as that term is defined in
Section 3.01(q)) and Regulatory Authorities
(as that term is defined in Section 3.01(p)),
to perform its obligations under this
Agreement and consummate the transactions
contemplated by this Agreement, and is duly
qualified to do business and is in good
standing in the State of Ohio, but is not
qualified to do business in any other
jurisdiction or required to be so qualified
to do business in any other jurisdiction
except where the failure to be so qualified
would not have a material adverse effect on
Seller. Seller has made available to Buyer
true and complete copies of the Articles of
Incorporation
14
and Code of Regulations of Seller, in each
case as amended to the date of this
Agreement.
(ii) WI Sub and Alpine Terrace II, LLC, an
Ohio limited liability company ("ALPINE")
(individually the "SELLER SUBSIDIARY" and
collectively the "SELLER SUBSIDIARIES"), are
the only Subsidiaries (as that term is
defined in Section 3.01(c)) of Seller. Seller
owns 50% of the outstanding equity interests
in Walnut Street Enterprises, LLC, an Ohio
limited liability company ("WALNUT"). WI Sub
is a state savings and loan association, is a
member of the Federal Home Loan Bank of
Cincinnati and is regulated by the Ohio
Division of Financial Institutions ("OHIO
DIVISION") and the Office of Thrift
Supervision (the "OTS"). The business of
Alpine and Walnut is limited to owning real
property. Each of the Seller Subsidiaries is
duly organized, validly existing and in good
standing under the laws of the State of Ohio
and each has full power and authority,
corporate or otherwise, to own their property
and to carry on its business as presently
conducted. Each of the Seller Subsidiaries is
qualified to do business in the State of
Ohio, and WI Sub is qualified to do business
in the State of Indiana, but is not qualified
to do business in any other jurisdiction or
required to be qualified to do business in
any other jurisdiction except where the
failure to be so qualified would not have a
material adverse effect on Seller. Seller has
made available to Buyer true and complete
copies of the governing instruments of each
of the Seller Subsidiaries, in each case as
amended to the date of this Agreement.
(iii) As used in this Agreement, (A) any reference
to any event, change or effect being
"MATERIAL" with respect to any entity means
an event, change or effect which is material
in relation to the financial condition,
properties, assets, liabilities, businesses
or results of operations of such entity and
the Seller Subsidiaries taken as a whole and
(B) the term "MATERIAL ADVERSE EFFECT" means,
with respect to an entity, a material adverse
effect on the financial condition,
properties, assets, liabilities, businesses
or results of operations of such entity and
the Seller Subsidiaries taken as a whole or
on the ability of such entity to perform its
obligations under this Agreement or
consummate the Merger and the other material
transactions contemplated by this Agreement
other than, in any case, any state of facts,
change, development, event, effect, condition
or occurrence (i) resulting from changes in
the United States economy or the United
States securities markets in general; (ii)
resulting from changes in the industries in
which Seller or Buyer, as the case may be,
operates and not specifically relating to the
Seller or Buyer, as the case may be; (iii)
resulting from any
15
litigation or loss of current or prospective
customers, employees or revenues arising from
the execution of this Agreement, or (iv)
resulting from the Merger generally;
provided, however, that in no event shall a
decrease in the trading price of Seller
Shares or Buyer Shares, absent any other
event, change or effect which has had or
would reasonably be expected to have a
material adverse effect, or litigation
relating thereto, be considered a material
adverse effect or material adverse change.
(b) Capitalization of Seller.
(i) The authorized capital of Seller consists
solely of 18,000,000 Seller Shares, of which
4,605,538 Seller Shares were issued and
outstanding as of June 30, 2004, and
2,000,000 shares of preferred stock, without
par value, none of which has been issued or
is outstanding. As of June 30, 2004, 117,630
Seller Shares were held in its treasury. All
outstanding Seller Shares have been duly
authorized and are validly issued, fully paid
and non-assessable, and were not issued in
violation of the preemptive rights of any
person. All Seller Shares issued have been
issued in compliance in all material respects
with all applicable federal and state
securities laws. As of June 30, 2004, 646,846
Seller Shares were reserved for issuance upon
the exercise of outstanding stock options
(the "SELLER STOCK OPTIONS") granted under
the Xxxxxx Financial Corporation Stock Option
and Incentive Plan, the Xxxxxx Financial
Corporation 1999 Stock Option and Incentive
Plan, and the Xxxxxx Financial Corporation
2003 Stock Option and Incentive Plan
(collectively, the "SELLER STOCK OPTION
PLANS"). Seller has furnished to Buyer a
true, complete and correct copy of the Seller
Stock Option Plans, and a list of all
participants in the Seller Stock Option Plans
as of the date hereof is set forth in Section
3.01(b)(i) of the Seller Disclosure Schedule,
which list identifies the number of Seller
Shares subject to Seller Stock Options held
by each such participant, the exercise price
or prices of such Seller Stock Options and
the dates each of the Seller Stock Options
was granted, becomes exercisable and expires.
(ii) As of the date hereof, except for this
Agreement and the Seller Stock Options, there
are no options, warrants, calls, rights,
commitments or agreements of any character to
which Seller is a party or by which it is
bound obligating Seller to issue, deliver or
sell, or cause to be issued, delivered or
sold, any additional Seller Shares or
obligating Seller to grant, extend or enter
into any such option, warrant, call, right,
commitment or agreement. As of the date of
this Agreement, there are no outstanding
contractual obligations of Seller to
repurchase, redeem or otherwise acquire
16
any Seller Shares except for such obligations
arising under the Seller Stock Option Plans.
(iii) Except as disclosed in Section 3.01(b) of
the Seller Disclosure Schedule, since June
30, 2004, Seller has not (A) issued or
permitted to be issued any Seller Shares, or
securities exercisable for or convertible
into Seller Shares, other than upon exercise
of the Seller Stock Options granted prior to
the date hereof under the Seller Stock Option
Plans; (B) repurchased, redeemed or otherwise
acquired, directly or indirectly through any
Seller Subsidiary or otherwise, any Seller
Shares; or (C) declared, set aside, made or
paid to the shareholders of Seller dividends
or other distributions on the outstanding
Seller Shares.
(iv) No bonds, debentures, notes or other
indebtedness of Seller having the right to
vote on any matters on which Seller's
shareholders may vote are issued or
outstanding.
(c) Subsidiaries. Seller owns of record and beneficially
all of the issued and outstanding equity securities
of WI Sub and Seller owns of record and beneficially
50% of the issued and outstanding equity securities
of Walnut. WI Sub owns of record and beneficially all
of the issued and outstanding equity securities of
Alpine. There are no options, warrants, calls,
rights, commitments or agreements of any character to
which Seller or any Seller Subsidiary is a party or
by which any of them is bound obligating any Seller
Subsidiary to issue, deliver or sell, or cause to be
issued, delivered or sold, additional equity
securities of any Seller Subsidiary (other than to
Seller, with respect to WI Sub and Alpine, or WI Sub,
with respect to Walnut) or obligating Seller or any
Seller Subsidiary to grant, extend or enter into any
such option, warrant, call, right, commitment or
agreement. There are no contracts, commitments,
understandings or arrangements relating to Seller's
rights to vote or to dispose of the equity securities
of WI Sub, and all of the equity securities of WI Sub
held by Seller are fully paid and non-assessable and
are owned by Seller free and clear of any charge,
mortgage, pledge, security interest, hypothecation,
restriction, claim, option, lien, encumbrance or
interest of any persons whatsoever. There are no
contracts, commitments, understandings or
arrangements relating to WI Sub's rights to vote or
to dispose of the equity securities of Alpine and
Walnut, and all of the equity securities of Alpine
and Walnut held by WI Sub are fully paid and
non-assessable and are owned by WI Sub free and clear
of any charge, mortgage, pledge, security interest,
hypothecation, restriction, claim, option, lien,
encumbrance or interest of any persons whatsoever.
Except as disclosed in Section 3.01(c) of the Seller
Disclosure Schedule, Seller does not own
beneficially, directly or indirectly, any equity
securities or
17
similar interests of any person, or any interest in a
partnership or joint venture of any kind, other than
the Seller Subsidiaries.
For purposes of this Agreement, "SUBSIDIARY" has the
meaning ascribed to it in Rule 1-02 of Regulation S-X
promulgated by the Securities and Exchange Commission
(the "SEC").
(d) Corporate Authority. Assuming the accuracy of the
representations and warranties of Buyer and WB Sub
set forth in Section 4.01(y), all corporate actions
of Seller and WI Sub necessary to authorize the
execution, delivery and performance of this Agreement
and the consummation of the transactions contemplated
hereby, in each case by Seller and WI Sub, have been
duly and validly taken, except for the adoption of
this Agreement by the holders of at least a majority
of the outstanding Seller Shares entitled to vote
thereon (which is the only required shareholder vote
thereon) and subject, in the case of the consummation
of the Merger, to the filing and recordation of a
certificate of merger as required by the OGCL and
compliance with the applicable provisions of the
WVBCA. The Board of Directors of Seller has, by
unanimous vote of the Directors, duly adopted
resolutions (i) approving this Agreement, the Merger,
the Bank Merger and the other transactions
contemplated hereby and thereby, (ii) declaring that
it is in the best interests of Seller's shareholders
that Seller enter into this Agreement and consummate
the Merger on the terms and subject to the conditions
set forth in this Agreement, (iii) declaring that
this Agreement is fair to Seller's shareholders, (iv)
directing that this Agreement be submitted to a vote
at a meeting of Seller's shareholders to be held as
promptly as practicable and (v) recommending that
Seller's shareholders adopt this Agreement. The Board
of Directors of WI Sub has, by unanimous vote of the
directors, duly adopted resolutions (i) approving
this Agreement, the Merger, the Bank Merger and the
other transactions contemplated hereby and thereby,
and (ii) declaring that it is in the best interests
of WI Sub's sole shareholder that WI Sub enter into
this Agreement and consummate the Bank Merger on the
terms and subject to the conditions set forth in this
Agreement.
(e) Authorized and Effective Agreement. This Agreement
has been duly executed and delivered by Seller and WI
Sub, and assuming the due authorization, execution
and delivery by Buyer and WB Sub, constitutes a valid
and binding obligation of Seller and WI Sub,
enforceable against Seller and WI Sub in accordance
with its terms, except as such enforceability may be
limited by laws related to safety and soundness of
insured depository institutions as set forth in 12
U.S.C. Section 1818(b), the appointment of a
conservator by the FDIC, bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and
other similar laws relating to or affecting the
enforcement of creditors' rights generally, by
general equitable principles (regardless of whether
enforceability is
18
considered in a proceeding in equity or at law) and
by an implied covenant of good faith and fair
dealing. Each of Seller and WI Sub has the right,
power, authority and capacity to execute and deliver
this Agreement and, subject to the required adoption
of this Agreement by Seller's shareholders, the
obtaining of appropriate approvals by Regulatory
Authorities and Governmental Authorities and the
expiration of applicable regulatory waiting periods,
to perform its obligations under this Agreement.
(f) Financial Statements of Seller. The financial
statements of Seller consisting of the consolidated
balance sheets as of September 30 for each of the
years 2003 and 2002, and the related consolidated
statements of earnings, shareholders' equity,
comprehensive income, and cash flows for each of the
three years ended September 30, 2003, including
accompanying notes and the report thereon of Xxxxx
Xxxxxxxx LLP dated October 30, 2003, and the
consolidated statement of financial condition as of
June 30, 2004, and the related consolidated
statements of earnings, shareholders' equity and cash
flows for the nine months then ended (collectively,
all of such consolidated financial statements are
referred to as the "SELLER FINANCIAL STATEMENTS")
included in the Seller SEC Documents (as defined
below) comply as to form in all material respects
with applicable accounting requirements and the
published rules and regulations of the SEC with
respect thereto, have been prepared in accordance
with generally accepted accounting principles
("GAAP") (except, in the case of unaudited
statements, as permitted by Form 10-Q of the SEC)
applied on a consistent basis during the periods
involved (except as may be indicated in the notes
thereto) and fairly present in all material respects
the consolidated financial position of Seller and its
consolidated subsidiaries as of the dates thereof and
their respective consolidated results of operations
and cash flows for the periods then ended (subject,
in the case of unaudited statements, to normal,
recurring year-end audit adjustments).
(g) SEC Filings. Seller has filed all reports and
proxy materials required to be filed by it with the
SEC pursuant to the Securities Exchange Act of 1934,
as amended (the "EXCHANGE ACT"), since January 1,
2001 (together with all information incorporated
therein by reference, the "SELLER SEC DOCUMENTS"),
except for any reports or proxy materials the failure
to file which would not have a material adverse
effect upon Seller. All such filings, at the time of
filing, complied in all material respects as to form
and included all exhibits required to be filed under
the applicable rules of the SEC applicable to such
Seller SEC Documents. None of such documents, as
subsequently supplemented or amended prior to the
date hereof, when filed, contained any untrue
statement of a material fact or omitted to state a
material fact required to be stated therein or
necessary in
19
order to make the statements therein, in light of the
circumstances under which they were made, not
misleading.
(h) Absence of Undisclosed Liabilities. Except as set
forth in Seller SEC Documents filed and publicly
available prior to the date of this Agreement (the
"SELLER FILED SEC DOCUMENTS") (including the
financial statements included therein) or in Section
3.01(h) of the Seller Disclosure Schedule and except
as arising hereunder, Seller and the Seller
Subsidiaries have no liabilities or obligations
(whether accrued, absolute, contingent or otherwise)
at June 30, 2004 (the "SELLER BALANCE SHEET DATE"),
other than liabilities and obligations that
individually or in the aggregate would not reasonably
be expected to have a material adverse effect on
Seller. Except as set forth in the Seller Filed SEC
Documents or otherwise disclosed in Section 3.01(h)
of the Seller Disclosure Schedule, all debts,
liabilities, guarantees and obligations of Seller and
the Seller Subsidiaries incurred since the Seller
Balance Sheet Date have been incurred in the ordinary
course of business and are usual and normal in amount
both individually and in the aggregate.
(i) Absence of Changes. Except (i) as set forth in the
Seller Filed SEC Documents, (ii) as set forth in
Section 3.01(i) of the Seller Disclosure Schedule, or
(iii) in the ordinary course of business consistent
with Seller's past practice, since the Seller Balance
Sheet Date: (a) there has not been any material
adverse change in the business, operations, assets or
financial condition of Seller and the Seller
Subsidiaries taken as a whole, and, to the knowledge
of Seller, no fact or condition exists which Seller
believes will cause such a material adverse change in
the future; and (b) Seller has not taken or permitted
any of the actions described in Section 5.01(b) of
this Agreement.
(j) Loan Documentation. The documentation ("LOAN
DOCUMENTATION") governing or relating to the material
loan and credit-related assets ("LOAN ASSETS")
included in the loan portfolio of WI Sub is legally
sufficient for the purposes intended thereby and
creates enforceable rights of WI Sub in accordance in
all material respects with the terms of such Loan
Documentation, subject to applicable bankruptcy,
insolvency, reorganization, moratorium, fraudulent
conveyance and other similar laws relating to or
affecting the enforcement of creditors' rights
generally, by general equitable principles
(regardless of whether enforceability is considered
in a proceeding in equity or at law) and by an
implied covenant of good faith and fair dealing,
except for such insufficiencies as would not
reasonably be expected to have a material adverse
effect on Seller. Except as set forth in the Seller
Filed SEC Documents or in Section 3.01(j) of the
Seller Disclosure Schedule, no debtor under any of
the Loan Documentation has asserted as of the date
hereof any claim or defense with respect to the
subject matter thereof, which claim or defense, if
20
determined adversely to Seller, would reasonably be
expected to have a material adverse effect on Seller.
Except as set forth in the Seller SEC Documents or in
Section 3.01(j) of the Seller Disclosure Schedule, WI
Sub is not a party to a loan, including any loan
guaranty, with any director, executive officer or
five percent (5%) shareholder of Seller or any of the
Seller Subsidiaries, or any person, corporation or
enterprise controlling, controlled by or under common
control with either Seller or any of the Seller
Subsidiaries. All loans and extensions of credit that
have been made by WI Sub comply in all material
respects with applicable regulatory limitations and
procedures except for such failures to comply as
would not reasonably be expected to have a material
adverse effect on Seller.
(k) Allowance for Loan Losses. Except as set forth in
the Seller SEC Documents or in Section 3.01(k) of the
Seller Disclosure Schedule, there is no loan which
was made by WI Sub and which is reflected as an asset
of WI Sub on the Seller Financial Statements that
(A)(i) is 90 days or more delinquent or (ii) has been
classified by examiners (regulatory or internal) as
"Substandard," "Doubtful" or "Loss," and (B) the
default by the borrower under which would reasonably
be expected to have a material adverse effect on
Seller. The allowance for loan losses reflected on
the Seller Financial Statements has been determined
in accordance with GAAP in all material respects and
in accordance in all material respects with all rules
and regulations applicable to Seller and WI Sub and
is, in the judgment of Seller's management, adequate
in all material respects, except for such failures
and inadequacies which would not reasonably be
expected to have a material adverse effect on Seller.
(l) Reports and Records. Seller and the Seller
Subsidiaries have filed all reports and maintained
all records required to be filed or maintained by
them under the rules and regulations of the OTS, the
Ohio Division and the Federal Deposit Insurance
Corporation ("FDIC"), except for such reports and
records the failure to file or maintain would not
reasonably be expected to have a material adverse
effect on Seller. All such documents and reports
complied in all material respects with applicable
requirements of law and rules and regulations in
effect at the time such documents and reports were
filed and contained in all material respects the
information required to be stated therein, except for
such documents and records the failure to file or
contain such information would not reasonably be
expected to have a material adverse effect on Seller.
None of such documents or reports, when filed,
contained any untrue statement of a material fact or
omitted to state a material fact required to be
stated therein or necessary in order to make the
statements therein, in light of the circumstances
under which they were made, not misleading, other
than such reports and documents which the failure to
file in such fashion would not reasonably be expected
to have a material adverse effect on Seller.
21
(m) Taxes. Except as set forth in Section 3.01(m) of
the Seller Disclosure Schedule, Seller and the Seller
Subsidiaries have timely filed all material returns,
statements, reports and forms (including elections,
declarations, disclosures, schedules, estimates and
information returns) (collectively, the "TAX
RETURNS") with respect to all material federal,
state, local and foreign income, gross income, gross
receipts, gains, premium, sales, use, ad valorem,
transfer, franchise, profits, withholding, payroll,
employment, excise, severance, stamp, occupancy,
license, lease, environmental, customs, duties,
property, windfall profits and all other material
taxes (including any interest, penalties or additions
to tax with respect thereto, individually, a "TAX"
and, collectively, "TAXES") required to be filed with
the appropriate tax authority through the date of
this Agreement. Such Tax Returns are or will be true,
correct and complete in all material respects. Seller
and the Seller Subsidiaries have paid and discharged
all Taxes shown as due on such Tax Returns, other
than such Taxes that are adequately reserved as shown
on the Seller Financial Statements or have arisen in
the ordinary course of business since the Seller
Balance Sheet Date. Except as set forth in Section
3.01(m) of the Seller Disclosure Schedule, neither
the Internal Revenue Service (the "IRS") nor any
other taxing agency or authority, domestic or
foreign, has asserted, is now asserting or, to the
knowledge of Seller, is threatening to assert against
Seller or any of the Seller Subsidiaries any
deficiency or claim for additional Taxes, which
deficiency or claim, if upheld, would reasonably be
expected to have a material adverse effect on Seller.
There are no unexpired waivers by Seller or any of
the Seller Subsidiaries of any statute of limitations
with respect to Taxes. The accruals and reserves for
Taxes reflected in the Seller Financial Statements
are adequate in all material respects for the periods
covered. Seller and the Seller Subsidiaries have
withheld or collected and paid over to the
appropriate Governmental Authorities or are properly
holding for such payment all Taxes required by law to
be withheld or collected, except for such failures to
withhold or collect as would not reasonably be
expected to have a material adverse effect on Seller.
There are no liens for Taxes upon the assets of
Seller or any Seller Subsidiary, other than liens for
current Taxes not yet due and payable and liens that
individually or in the aggregate would not reasonably
be expected to have a material adverse effect on
Seller. Neither Seller nor any of the Seller
Subsidiaries has agreed to make, or is required to
make, any adjustment under Section 481(a) of the
Code. Except as set forth in the Seller SEC Documents
or in Section 3.01(m) of the Seller Disclosure
Schedule, neither Seller nor any Seller Subsidiary is
a party to any agreement, contract, arrangement or
plan that has resulted, or could result, individually
or in the aggregate, in the payment of "excess
parachute payments" within the meaning of Section
280G of the Code. Neither Seller nor any of the
Seller Subsidiaries has ever been a member of an
affiliated group of corporations, within the meaning
of Section 1504 of the Code, other than an affiliated
group of which Seller is or was the
22
common buyer corporation. No Tax is required to be
withheld pursuant to Section 1445 of the Code as a
result of the transactions contemplated by this
Agreement.
(n) Property and Title. Section 3.01(n) of the Seller
Disclosure Schedule lists and describes all real
property, and any leasehold interest in real
property, owned or held by Seller or any of the
Seller Subsidiaries and used in the business of
Seller or any of the Seller Subsidiaries
(collectively, the "SELLER REAL PROPERTIES"). The
Seller Real Properties constitute all of the material
real property and interests in real property used in
the businesses of Seller and the Seller Subsidiaries.
Copies of all leases of Seller Real Properties to
which Seller or any of the Seller Subsidiaries is a
party have been provided to Buyer. Such leasehold
interests have not been assigned or subleased. All
Seller Real Properties which are owned by Seller or
any of the Seller Subsidiaries are free and clear of
all mortgages, liens, security interests, defects,
encumbrances, easements, restrictions, reservations,
conditions, covenants, agreements, encroachments,
rights of way and zoning laws, except (i) those set
forth in the Seller SEC Documents or Section 3.01(n)
of the Seller Disclosure Schedule; (ii) easements,
restrictions, reservations, conditions, covenants,
rights of way, zoning laws and other defects and
irregularities in title and encumbrances which do not
materially impair the use thereof for the purposes
for which they are held; (iii) the lien of current
taxes not yet due and payable and (iv) other defects
in title, easements, restrictive covenants and
similar encumbrances that individually or in the
aggregate would not reasonably be expected to have a
material adverse effect on Seller. Seller and the
Seller Subsidiaries own, and are in rightful
possession of, and have good title to, all of the
other assets indicated in the Seller SEC Documents as
being owned by Seller or the Seller Subsidiaries,
free and clear of any charge, mortgage, pledge,
security interest, hypothecation, restriction, claim,
option, lien, encumbrance or interest of any persons
whatsoever except for (i) those described in the
Seller SEC Documents or Section 3.01(n) of the Seller
Disclosure Schedule, (ii) those assets disposed of in
the ordinary course of business consistent with past
practices, (iii) such as are no longer used or useful
in the conduct of its businesses and (iv) defects in
title, easements, restrictive covenants and similar
encumbrances that individually or in the aggregate
would not reasonably be expected to have a material
adverse effect on Seller. The assets of Seller and
the Seller Subsidiaries, taken as a whole, are
adequate to continue to conduct the businesses of
Seller and the Seller Subsidiaries as such businesses
are presently being conducted.
(o) Legal Proceedings. Except as set forth in the Seller
Filed SEC Documents or Section 3.01(o) of the Seller
Disclosure Schedule, there are no actions, suits,
proceedings, claims or investigations pending or, to
the knowledge of Seller and the Seller Subsidiaries,
threatened in any court, before any
23
governmental agency or instrumentality or in any
arbitration proceeding (i) against Seller or any of
the Seller Subsidiaries which, if adversely
determined against Seller or any of the Seller
Subsidiaries, would have a material adverse effect on
Seller; or (ii) against or by Seller or any of the
Seller Subsidiaries which, if adversely determined
against Seller or any of the Seller Subsidiaries,
would prevent the consummation of this Agreement or
any of the transactions contemplated hereby or
declare the same to be unlawful or cause the
rescission thereof.
(p) Regulatory Matters. None of Seller, the Seller
Subsidiaries and the respective properties of Seller
and the Seller Subsidiaries is a party to or subject
to any order, judgment, decree, agreement, memorandum
of understanding or similar arrangement with, or a
commitment letter or similar submission to, or
extraordinary supervisory letter from, any court or
federal or state governmental agency or authority,
including any such agency or authority charged with
the supervision or regulation of financial
institutions (or their holding companies) or issuers
of securities or engaged in the insurance of deposits
(including, without limitation, the OTS, the Ohio
Division, the FDIC and the SEC) or the supervision or
regulation of Seller or any of the Seller
Subsidiaries (collectively, the "REGULATORY
AUTHORITIES") that individually or in the aggregate
would reasonably be expected to have a material
adverse effect on Seller. Neither Seller nor any of
the Seller Subsidiaries has been advised by any of
the Regulatory Authorities that any of such
Regulatory Authorities are contemplating issuing or
requesting (or are considering the appropriateness of
issuing or requesting) any such order, judgment,
decree, agreement, memorandum of understanding,
commitment letter, supervisory letter or similar
submission that individually or in the aggregate
would reasonably be expected to have a material
adverse effect on Seller.
(q) No Conflict. Except as disclosed in Section 3.01(q)
of the Seller Disclosure Schedule and subject to the
required adoption of this Agreement by the
shareholders of Seller, the receipt of the required
approvals of Regulatory Authorities and Governmental
Authorities, the expiration of applicable regulatory
waiting periods and the required filings under
federal and state securities laws, the execution,
delivery and performance of this Agreement, and the
consummation of the transactions contemplated hereby,
by Seller and WI Sub do not and will not (i) conflict
with, or result in a violation of, or result in the
breach of or a default (or which with notice or lapse
of time would result in a default) under, any
provision of: (A) any federal, state or local law,
regulation, ordinance, order, rule or administrative
ruling of any administrative agency or commission or
other federal, state or local governmental authority
or instrumentality (each, a "GOVERNMENTAL AUTHORITY")
applicable to Seller or any of the Seller
Subsidiaries or any of their respective properties;
(B) the Articles of Incorporation or Code of
Regulations of Seller, or the
24
governing instruments of any of the Seller
Subsidiaries; (C) any material agreement, indenture
or instrument to which Seller or any of the Seller
Subsidiaries is a party or by which it or its
properties or assets may be bound; or (D) any order,
judgment, writ, injunction or decree of any court,
arbitration panel or any Governmental Authority
applicable to Seller or any of the Seller
Subsidiaries, other than, in the case of clauses (A),
(C) and (D), any such conflicts, violations, breaches
or defaults that individually or in the aggregate
would not reasonably be expected to have a material
adverse effect on Seller; (ii) result in the creation
or acceleration of any security interest, mortgage,
option, claim, lien, charge or encumbrance upon or
interest in any property of Seller or any of the
Seller Subsidiaries, other than such security
interests, mortgages, options, claims, liens, charges
or encumbrances that individually or in the aggregate
would not reasonably be expected to have a material
adverse effect on Seller; or (iii) violate the terms
or conditions of, or result in the cancellation,
modification, revocation or suspension of, any
material license, approval, certificate, permit or
authorization held by Seller or any of the Seller
Subsidiaries, other than such violations,
cancellations, modifications, revocations or
suspensions that individually or in the aggregate
would not reasonably be expected to have a material
adverse effect on Seller.
(r) Brokers, Finders and Others. Except for the fees paid
or payable to Xxxxxxxx Xxxxxxxx Xxxxxx & Co., Inc.,
Seller's financial advisor ("SELLER'S FINANCIAL
ADVISOR"), there are no fees or commissions of any
sort whatsoever claimed by, or payable by Seller or
any of the Seller Subsidiaries to, any broker,
finder, intermediary, or any other similar person in
connection with effecting this Agreement or the
transactions contemplated hereby, except for ordinary
and customary legal and accounting fees.
(s) Employment Agreements. Except as disclosed in
Section 3.01(s) of the Seller Disclosure Schedule,
neither Seller nor any of the Seller Subsidiaries is
a party to any employment, change in control,
severance or consulting agreement not terminable at
will. Neither Seller nor any of the Seller
Subsidiaries is a party to, bound by or negotiating,
any collective bargaining agreement, nor are any of
their respective employees represented by any labor
union or similar organization. Seller and the Seller
Subsidiaries are in compliance in all material
respects with all applicable laws respecting
employment and employment practices, terms and
conditions of employment and wages and hours other
than with respect to any noncompliance that
individually or in the aggregate would not reasonably
be expected to have a material adverse effect on
Seller, and neither Seller nor any of the Seller
Subsidiaries has engaged in any unfair labor practice
that would reasonably be expected to have a material
adverse effect on Seller.
25
(t) Employee Benefit Plans.
(i) Section 3.01(t)(i) of the Seller Disclosure
Schedule contains a complete and accurate
list of all bonus, incentive, deferred
compensation, pension (including, without
limitation, Seller Pension Plans defined
below), retirement, profit-sharing, thrift,
savings, employee stock ownership, stock
bonus, stock purchase, restricted stock,
stock option, severance, welfare (including,
without limitation, "welfare plans" within
the meaning of Section 3(1) of the Employee
Retirement Income Security Act of 1974, as
amended ("ERISA")), fringe benefit plans,
employment or severance agreements and all
similar practices, policies and arrangements
maintained or contributed to (currently or
within the last six years) other than those
described in Department of Labor ("DOL") Reg.
Sections 2510.3-1(b) through (k), 2510.3-2(d)
and 2510.3-3(b) by (A) Seller or any of the
Seller Subsidiaries and in which any employee
or former employee (the "EMPLOYEES"),
consultant or former consultant (the
"CONSULTANTS"), officer or former officer
(the "OFFICERS"), or director or former
director (the "DIRECTORS") of Seller or any
of the Seller Subsidiaries participates or to
which any such Employees, Consultants,
Officers or Directors either participate or
are parties or (B) any Seller ERISA Affiliate
(as defined below) (collectively, the
"COMPENSATION AND Benefit PLANS"). However,
Compensation and Benefit Plans does not
include plans, funds, programs, policies,
practices or procedures that are maintained
or funded (A) by Employees, Consultants,
Officers or Directors for their own benefit
or for the benefit of their employees, such
as individual retirement arrangements or
plans described in Code Section 401(a)
benefiting (or intended to benefit)
themselves or persons who are not Employees
or (B) by persons or entities who are not
ERISA Affiliates (as defined below). Neither
Seller nor any of the Seller Subsidiaries has
any commitment to create any additional
Compensation and Benefit Plan or to modify or
change any existing Compensation and Benefit
Plan, except to the extent required by law
and as otherwise contemplated by Sections
6.02 and 7.01 of this Agreement.
(ii) Each Compensation and Benefit Plan has been
operated and administered substantially in
accordance with its terms and with applicable
law, including, but not limited to, ERISA,
the Code, the Securities Act (as defined in
Section 5.05(a)) the Exchange Act (as defined
in Section 3.01(g)), the Age Discrimination
in Employment Act, or any regulations or
rules promulgated thereunder, and all
filings, disclosures and notices required by
ERISA, the Code, the Securities Act, the
Exchange Act, the Age Discrimination in
Employment Act and any other applicable law
26
have been timely made, except with respect to
such failures as would not reasonably be
expected to have a material adverse effect on
Seller. Each Compensation and Benefit Plan
which is an "employee pension benefit plan"
within the meaning of Section 3(2) of ERISA
(a "SELLER PENSION PLAN") and which is
intended to be qualified under Section 401(a)
of the Code has received a favorable
determination letter from the IRS and Seller
is not aware of any circumstances likely to
result in revocation of any such favorable
determination letter. There is no material
pending or, to the knowledge of Seller,
threatened legal action, suit or claim
relating to the Compensation and Benefit
Plans other than routine claims for benefits
thereunder. Neither Seller nor any of the
Seller Subsidiaries has engaged in a
transaction, or omitted to take any action,
with respect to any Compensation and Benefit
Plan that would reasonably be expected to
subject Seller or any of the Seller
Subsidiaries to a tax or penalty imposed by
either Section 4975 of the Code or Section
502 of ERISA, assuming for purposes of
Section 4975 of the Code that the taxable
period of any such transaction expired as of
the date hereof.
(iii) No liability (other than for payment of
premiums to the Pension Benefit Guaranty
Corporation ("PBGC") which have been made or
will be made on a timely basis) under Title
IV of ERISA has been or is expected to be
incurred by Seller or any of the Seller
Subsidiaries with respect to any ongoing,
frozen or terminated "single-employer plan,"
within the meaning of Section 4001(a)(15) of
ERISA, currently or formerly maintained by
any of them, or any single-employer plan of
any entity (a "SELLER ERISA AFFILIATE PLAN")
which is considered one employer with Seller
under Section 4001(a)(14) of ERISA or Section
414(b), (c) or (m) of the Code (a "SELLER
ERISA AFFILIATE"). None of Seller, the Seller
Subsidiaries nor any Seller ERISA Affiliate
has contributed, or has been obligated to
contribute, to a multiemployer plan under
Subtitle E of Title IV of ERISA (as defined
in ERISA Sections 3(37)(A) and 4001(a)(3)) at
any time since September 26, 1980. No notice
of a "reportable event", within the meaning
of Section 4043 of ERISA, for which the
30-day reporting requirement has not been
waived, has been required to be filed for any
Compensation and Benefit Plan or by any
Seller ERISA Affiliate Plan within the
12-month period ending on the date hereof,
and no such notice will be required to be
filed as a result of the transactions
contemplated by this Agreement. The PBGC has
not instituted proceedings to terminate any
Seller Pension Plan or Seller ERISA Affiliate
Plan and, to Seller's knowledge, no condition
exists that presents a material risk that
such proceedings will be instituted. There is
no pending investigation or
27
enforcement action by the PBGC, the DOL, the
IRS or any other Governmental Authority with
respect to any Compensation and Benefit Plan.
Under each Seller Pension Plan and Seller
ERISA Affiliate Plan, as of the date of the
most recent actuarial valuation performed
prior to the date of this Agreement, the
actuarially determined present value of all
"benefit liabilities", within the meaning of
Section 4001(a)(16) of ERISA (as determined
on the basis of the actuarial assumptions
contained in such actuarial valuation of such
Seller Pension Plan or Seller ERISA Affiliate
Plan), did not exceed the then current value
of the assets of such Seller Pension Plan or
Seller ERISA Affiliate Plan and since such
date there has been neither an adverse change
in the financial condition of such Seller
Pension Plan or Seller ERISA Affiliate Plan
nor any amendment or other change to such
Seller Pension Plan or Seller ERISA Affiliate
Plan that would increase the amount of
benefits thereunder which reasonably could be
expected to change such result and that
individually or in the aggregate would
reasonably be expected to have a material
adverse effect on Seller.
(iv) All contributions required to be made under
the terms of any Compensation and Benefit
Plan or Seller ERISA Affiliate Plan or any
employee benefit arrangements under any
collective bargaining agreement to which
Seller or any of the Seller Subsidiaries is a
party have been timely made or have been
reflected on the Seller Financial Statements.
Neither any Seller Pension Plan nor any
Seller ERISA Affiliate Plan has an
"accumulated funding deficiency" (whether or
not waived) within the meaning of Section 412
of the Code or Section 302 of ERISA and all
required payments to the PBGC with respect to
each Seller Pension Plan or Seller ERISA
Affiliate Plan have been made on or before
their due dates. None of Seller, the Seller
Subsidiaries nor any Seller ERISA Affiliate
(x) has provided, or would reasonably be
expected to be required to provide, security
to any Seller Pension Plan or to any Seller
ERISA Affiliate Plan pursuant to Section
401(a)(29) of the Code, and (y) has taken any
action, or omitted to take any action, that
has resulted, or would reasonably be expected
to result, in the imposition of a lien under
Section 412(n) of the Code or pursuant to
ERISA that individually or in the aggregate
would reasonably be expected to have a
material adverse effect on Seller.
(v) Except as disclosed in Section 3.01(t)(v) of
the Seller Disclosure Schedule, neither
Seller nor any of the Seller Subsidiaries has
any obligations to provide retiree health and
life insurance or other retiree death
benefits under any Compensation and Benefit
Plan,
28
other than benefits mandated by Section 4980B
of the Code or those derived from a Seller's
Pension Plan.
(vi) Seller and the Seller Subsidiaries do not
maintain any foreign Compensation and Benefit
Plans.
(vii) With respect to each Compensation and
Benefit Plan of Seller, Seller has, if
applicable, provided or made available to
Buyer, true and complete copies of existing:
(A) the most recently restated version of
each Compensation and Benefit Plan documents
and all subsequent amendments thereto; (B)
the most recently restated version of trust
instruments and insurance contracts and all
subsequent amendments thereto; (C) the most
recent actuarial report and financial
statement; (D) the most recently restated
summary plan description and all subsequent
summaries of material modification; (E) forms
filed with the PBGC within the past year
(other than for premium payments); (E) most
recent determination letter issued by the
IRS; and (G) any Form 5310, Form 5310A, Form
5300 or Form 5330 filed within the past year
with the IRS.
(viii) Except as disclosed in the Seller Disclosure
Schedule or on Section 3.01(t)(viii) of the
Seller Disclosure Schedule, the consummation
of the transactions contemplated by this
Agreement would not, directly or indirectly
(including, without limitation, as a result
of any termination of employment prior to or
following the Effective Time), reasonably be
expected to (A) entitle any Employee,
Consultant or Director to any payment
(including severance pay or similar
compensation) or any increase in
compensation, (B) result in the vesting or
acceleration of any benefits under any
Compensation and Benefit Plan of Seller or
(C) result in any material increase in
benefits payable under any Compensation and
Benefit Plan of Seller, any of which
reasonably would be expected to have a
material adverse effect on Seller.
(u) Compliance with Laws. Except with respect to
Environmental Laws (as defined in Section 3.01(y))
and Taxes, which are the subject of Sections 3.01(y)
and 3.01(m), respectively, each of Seller and the
Seller Subsidiaries:
(i) has been in compliance with all applicable
federal, state, local and foreign statutes,
laws, regulations, ordinances, rules,
judgments, orders or decrees applicable
thereto or to the employees conducting such
business, including, without limitation, the
Equal Credit Opportunity Act, as amended, the
Fair Housing Act, as amended, the Federal
Community Reinvestment Act, as amended, the
Home Mortgage Disclosure Act, as amended, and
all other
29
applicable fair lending laws and other laws
relating to discriminatory business
practices, except for failures to be in
compliance which, individually or in the
aggregate, have not had or would not
reasonably be expected to have a material
adverse effect on Seller;
(ii) has all permits, licenses, authorizations,
orders and approvals of, and has made all
filings, applications and registrations with,
all Governmental Authorities that are
required in order to permit it to own or
lease its properties and to conduct its
business as presently conducted, except where
the failure to obtain any of the foregoing or
to make any such filing, application or
registration has not had or would not
reasonably be expected to have a material
adverse effect on Seller; all such permits,
licenses, certificates of authority, orders
and approvals are in full force and effect
and to Seller's knowledge, no suspension or
cancellation of any of them has been
threatened in writing; and
(iii) has received no written notification or
communication from any Governmental Authority
since January 1, 2004, (A) asserting that
Seller or any of the Seller Subsidiaries is
not in compliance with any of the statutes,
regulations or ordinances which such
Governmental Authority enforces, except for
failures to be in compliance that
individually or in the aggregate would not
reasonably be expected to have a material
adverse effect on Seller, or (B) threatening
to revoke any license, franchise, permit or
governmental authorization, which
revocations, individually or in the aggregate
would reasonably be expected to have a
material adverse effect on Seller, which has
not been resolved to the satisfaction of the
Governmental Authority which sent such
notification or communication. There is no
event which has occurred that, to the
knowledge of Seller, would reasonably be
expected to result in the revocation of any
such license, franchise, permit or
governmental authorization.
(v) Insurance.
(i) Section 3.01(v) of the Seller Disclosure
Schedule lists all of the material insurance
policies, binders or bonds maintained by
Seller or the Seller Subsidiaries and a
description of all material claims filed by
Seller or any of the Seller Subsidiaries
against the insurers of Seller and the Seller
Subsidiaries since December 31, 2002. Seller
and the Seller Subsidiaries are insured with
reputable insurers against such risks and in
such amounts as the management of Seller
reasonably has determined to be prudent in
accordance with industry practices. All such
insurance policies are in full force and
effect, Seller and the Seller Subsidiaries
are not in
30
material default thereunder and all claims
thereunder have been filed in due and timely
fashion, except with respect to such policies
and claims, the failure to maintain or file
would not reasonably be expected to have a
material adverse effect on Seller.
(ii) The savings accounts and deposits of WI Sub
are insured up to applicable limits by the
FDIC in accordance with the Federal Deposit
Insurance Act, and WI Sub has paid all
assessments and filed all reports required by
the Federal Deposit Insurance Act, except for
such failures as would not reasonably be
expected to have a material adverse effect on
WI Sub or the availability of such insurance.
(w) Governmental and Third-Party Proceedings. No consent,
approval, authorization of, or registration,
declaration or filing with, any court, Governmental
Authority or any other third party is required to be
made or obtained by Seller or any of the Seller
Subsidiaries in connection with the execution,
delivery or performance by Seller or WI Sub of this
Agreement or the consummation by Seller or WI Sub of
the transactions contemplated hereby, except for (A)
filings of applications and notices, as applicable,
with and the approval of certain federal and state
banking authorities, (B) the filing of the
appropriate articles or certificates of merger with
the Secretaries of State of West Virginia and Ohio
pursuant to the WVBCA and the OGCL, (C) the adoption
of this Agreement by Seller's shareholders, (D) the
filing with the SEC of the Proxy Statement/Prospectus
(as that term is defined in Section 7.06(a)) and such
reports under the Exchange Act, as may be required in
connection with this Agreement, the Merger, the Bank
Merger, and the other transactions contemplated
hereby, (E) any filings required under the rules and
regulations of Nasdaq and the American Stock Exchange
("AMEX"), and (F) such other consents, approvals,
orders, authorizations, registrations, declarations
and filings the failure of which to be obtained or
made individually or in the aggregate would not
reasonably be expected to have a material adverse
effect on Seller.
(x) Contracts. Except for Contracts (as hereinafter
defined) filed in unredacted form as exhibits to the
Seller SEC Documents and purchase orders entered into
in the ordinary course of business, Section 3.01(x)
of the Seller Disclosure Schedule sets forth a true
and complete list as of the date of this Agreement of
all Contracts in existence as of the date of this
Agreement (other than those which have been performed
completely): (A) which involve the payment by or to
Seller or any of the Seller Subsidiaries of more than
$100,000 in connection with the purchase of property
or goods or the performance of services and (B) which
are not in the ordinary course of their respective
businesses (such contracts referred to herein as
"CONTRACTS"). True, complete and correct copies of
all such
31
Contracts have been made available to Buyer. Neither
Seller nor any of the Seller Subsidiaries, nor, to
the knowledge of Seller, any other party thereto, is
in default under any such contract, agreement,
commitment, arrangement or other instrument to which
it is a party, by which its respective assets,
business or operations may be bound or affected in
any way, or under which it or its respective assets,
business or operations receive benefits, and there
has not occurred any event that, with the lapse of
time or the giving of notice or both, would
constitute such a default except, in each case, for
defaults that individually or in the aggregate would
not reasonably be expected to have a material adverse
effect on Seller.
(y) Environmental Matters. Except as otherwise disclosed
in Section 3.01(y) of the Seller Disclosure Schedule:
(i) Seller and the Seller Subsidiaries, to their
knowledge, are and have been at all times in
compliance in all material respects with all
applicable Environmental Laws (as that term is
defined in this Section 3.01(y)), and, to the
knowledge of Seller, neither Seller nor any of the
Seller Subsidiaries has engaged in any activity in
violation of any applicable Environmental Law except
for failures to be in compliance that individually or
in the aggregate would not reasonably be expected to
have a material adverse effect on Seller; (ii)(A) to
the knowledge of Seller, no investigations,
inquiries, orders, hearings, actions or other
proceedings by or before any court or Governmental
Authority are pending or have been threatened in
writing in connection with any of Seller's or any of
the Seller Subsidiaries' activities and any Seller
Real Properties or improvements thereon, and (B) to
the knowledge of Seller, no investigations,
inquiries, orders, hearings, actions or other
proceedings by or before any court or Governmental
Authority are pending or threatened in connection
with any real properties in respect of which any of
the Seller Subsidiaries has foreclosed or holds a
mortgage or mortgages (hereinafter referred to as the
"SELLER SUBSIDIARY REAL ESTATE COLLATERAL"); (iii) to
the knowledge of Seller, no claims are pending or
threatened by any third party against Seller or any
of the Seller Subsidiaries, or with respect to the
Seller Real Properties or improvements thereon, or,
to the knowledge of Seller, the Seller Subsidiary
Real Estate Collateral or improvements thereon,
relating to damage, contribution, cost recovery,
compensation, loss, injunctive relief, remediation or
injury resulting from any Hazardous Substance (as
that term is defined in this Section 3.01(y)) which
have not been resolved to the satisfaction of the
involved parties and which have had or are reasonably
expected to have a material adverse effect on Seller
or any of the Seller Subsidiaries; (iv) to the
knowledge of Seller, no Hazardous Substances have
been integrated into the Seller Real Properties or
improvements thereon or any component thereof, or the
Seller Subsidiary Real Estate Collateral or
improvements thereon or any component thereof in such
manner or quantity as may reasonably be expected to
or in fact would pose a threat to human health
32
or the value of the real property and improvements;
and (v) neither Seller nor any of the Seller
Subsidiaries has knowledge that (A) any of the Seller
Real Properties or improvements thereon, or the
Seller Subsidiary Real Estate Collateral or
improvements thereon has been used for the treatment,
storage or disposal of Hazardous Substances or has
been contaminated by Hazardous Substances, (B) any of
the business operations of Seller or any of the
Seller Subsidiaries have contaminated lands, waters
or other property of others with Hazardous
Substances, except routine, office-generated solid
waste, or (C) any of the Seller Real Properties or
improvements thereon, or the Seller Subsidiary Real
Estate Collateral or improvements thereon have in the
past or presently contain underground storage tanks,
friable asbestos materials or PCB-containing
equipment, which in any event would reasonably be
expected to have a material adverse effect on Seller.
For purposes of this Agreement, (i) "ENVIRONMENTAL
LAW" means the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended
("CERCLA"); the Resource Conservation and Recovery
Act of 1976, as amended; the Hazardous Materials
Transportation Act, as amended; the Toxic Substances
Control Act, as amended; the Federal Water Pollution
Control Act, as amended; the Safe Drinking Water Act,
as amended; the Clean Air Act, as amended; the
Occupational Safety and Health Act of 1970, as
amended; the Hazardous & Solid Waste Amendments Act
of 1984, as amended; the Superfund Amendments and
Reauthorization Act of 1986, as amended; the
regulations promulgated thereunder, and any other
federal, state, county, municipal, local or other
statute, law, ordinance or regulation which may
relate to or deal with human health or the
environment, as of the date of this Agreement, and
(ii) "HAZARDOUS SUBSTANCES" means, at any time: (a)
any "hazardous substance" as defined in Section
101(14) of CERCLA or regulations promulgated
thereunder; (b) any "solid waste," "hazardous waste,"
or "infectious waste," as such terms are defined in
any other Environmental Law as of the date of this
Agreement; and (c) friable asbestos,
urea-formaldehyde, polychlorinated biphenyls
("PCBS"), nuclear fuel or material, chemical waste,
radioactive material, explosives, known
carcinogens, petroleum products and by-products, and
other dangerous, toxic or hazardous pollutants,
contaminants, chemicals, materials or substances
listed or identified in, or regulated by, any
Environmental Law.
(z) Takeover Laws. Seller has taken all action required
to be taken by it in order to exempt this Agreement
and the transactions contemplated hereby from, and
this Agreement and the transactions contemplated
hereby are exempt from, the requirements of any
"moratorium", "control share", "fair price",
"affiliate transaction", "business combination" or
other anti-takeover laws or regulations of any state
(collectively, "TAKEOVER LAWS") applicable to it,
including without limitation, those of the State of
Ohio.
33
(aa) Seller Information. True and complete copies of
all documents listed in the Seller Disclosure
Schedule have been made available or provided to
Buyer. Except for the minutes and actions related to
the process leading to this Agreement and the
transactions contemplated hereunder, which have not
yet been prepared, approved, executed and/or placed
in Seller's corporate minute books, the books of
account, stock record books and other financial and
corporate records of the Seller and its Subsidiaries,
all of which have been made available to Buyer, are
complete and correct in all material respects,
including the maintenance of a system of internal
accounting controls sufficient to provide reasonable
assurance that transactions are executed with its
management's authorizations and such books and
records are accurately reflected in all material
respects in the Seller Filed SEC Documents.
(bb) Ownership of Buyer Shares. As of the date hereof,
except as otherwise disclosed in Section 3.01(bb) of
the Seller Disclosure Schedule, neither Seller nor,
to the knowledge of Seller, any of its affiliates or
associates (as such terms are defined under the
Exchange Act), (i) beneficially owns, directly or
indirectly, or (ii) is a party to any agreement,
arrangement or understanding for the purpose of
acquiring, holding, voting or disposing of, any Buyer
Shares.
(cc) Fairness Opinion. The Board of Directors of Seller
has received the opinion of Seller's Financial
Advisor dated the date of this Agreement to the
effect that the consideration to be received by
Seller's shareholders in the Merger is fair, from a
financial point of view, to Seller's shareholders.
(dd) CRA Compliance. Neither Seller nor any of the
Seller Subsidiaries has received any notice of
non-compliance with the applicable provisions of the
Federal Community Reinvestment Act, as amended
("CRA"), and the regulations promulgated thereunder,
and WI Sub has received a CRA rating of satisfactory
or better from the OTS in its most recent examination
report. Seller knows of no fact or circumstance or
set of facts or circumstances which would be
reasonably likely to cause Seller or WI Sub to
receive any notice of non-compliance with such
provisions or cause the CRA rating of Seller or WI
Sub to fall below satisfactory.
ARTICLE FOUR
REPRESENTATIONS AND WARRANTIES OF BUYER
4.01. REPRESENTATIONS AND WARRANTIES OF BUYER
Except as set forth on the Buyer Disclosure Schedule (with
specific reference to the Section or Subsection of this Agreement to which the
information stated in such disclosure relates, provided that any fact, item,
contract, agreement, document or instrument listed or described, and any
information disclosed, in any Section or Subsection thereof shall be deemed
34
listed, described and disclosed in all other applicable Sections and Subsections
even though not expressly set forth in such other Section(s) or Subsection(s)),
Buyer and WB Sub hereby jointly and severally warrant and represent to Seller
and WI Sub that:
(a) Corporate Status.
(i) Buyer is a West Virginia corporation and a bank
holding company registered under the Bank Holding
Company Act of 1956, as amended (the "BHC ACT"). WB
Sub is a West Virginia corporation. Each of Buyer and
WB Sub is duly organized, validly existing and in
good standing under the laws of the state of its
incorporation and has the full corporate power and
authority to own its property, to carry on its
business as presently conducted and to enter into
and, subject to the required obtaining of appropriate
approvals of Governmental Authorities and Regulatory
Authorities, perform its obligations under this
Agreement and consummate the transactions
contemplated by this Agreement, and is duly qualified
or licensed to do business and is in good standing in
the State of West Virginia as to Buyer and WB Sub and
the State of Ohio as to WB Sub and each other
jurisdiction in which the nature of its business or
the ownership, leasing or operation of its properties
makes such qualification or licensing necessary,
other than where the failure to be so organized,
existing, qualified or licensed or in good standing
individually or in the aggregate could not reasonably
be expected to have a material adverse effect on
Buyer. Buyer has made available to Seller true and
complete copies of its and WB Sub's certificates of
incorporation and bylaws, each as amended to the date
of this Agreement.
(ii) Section 4.01(a)(ii) of the Buyer Disclosure
Schedule includes a list of all Buyer Subsidiaries,
together with the jurisdiction of organization of
each Buyer Subsidiary. Each of the Buyer Subsidiaries
has been duly organized and is validly existing and
in good standing under the laws of the jurisdiction
of its organization, and is duly qualified or
licensed to do business and is in good standing in
each jurisdiction in which the nature of its business
or the ownership, leasing or operation of its
properties makes such qualification necessary, other
than where the failure to be so organized, existing,
qualified or licensed or in good standing
individually or in the aggregate could not reasonably
be expected to have a material adverse effect on
Buyer.
(b) Corporate Proceedings. All corporate proceedings
of Buyer and WB Sub necessary to authorize the
execution, delivery and performance of this
Agreement, and the consummation of the transactions
contemplated by this Agreement, in each case by Buyer
and WB Sub, have been duly and validly taken. This
Agreement has been validly executed and delivered by
duly authorized officers of Buyer and WB Sub. No vote
of Buyer's stockholders is required to be obtained in
connection with the consummation of the transactions
contemplated hereby.
35
(c) Capitalization of Buyer.
(i) As of July 31, 2004, the authorized capital
stock of Buyer consisted of 50,000,000 common
shares, $2.0833 par value per share, of which
19,649,453 common shares were issued and
outstanding and 1,669,895 common shares were
held in treasury by Buyer, and 1,000,000
preferred shares, no par value per share, of
which no shares were issued or outstanding.
The outstanding Buyer Shares have been duly
authorized and are validly issued, fully paid
and non-assessable, and were not issued in
violation of the preemptive rights of any
person. All Buyer Shares to be issued
hereunder will be issued in compliance in all
material respects with all applicable federal
and state securities laws. As of July 31,
2004, 1,000,000 Buyer Shares were reserved
for issuance upon the exercise of outstanding
stock options granted under Buyer's stock
option plans (the "BUYER STOCK OPTION PLANS")
and 578,070 Buyer Shares were available for
future grants of stock options under the
Buyer Stock Option Plans. As of the date of
this Agreement, except for the Buyer Shares
issuable pursuant to this Agreement and as
disclosed in Section 4.01(c) of the Buyer
Disclosure Schedule, Buyer has no other
commitment or obligation to issue, deliver or
sell, or cause to be issued, delivered or
sold, any Buyer Shares, except with respect
to the pending acquisition of Western Ohio
Financial Corporation pursuant to the terms
and conditions of that certain Agreement and
Plan of Merger dated April 1, 2004, as
amended by that certain First Amendment to
Agreement and Plan of Merger dated July 13,
2004 (the "PENDING TRANSACTION"). There are
no bonds, debentures, notes or other
indebtedness of Buyer, and no securities or
other instruments or obligations of Buyer the
value of which is in any way based upon or
derived from any capital or voting stock of
Buyer, having the right to vote (or
convertible into, or exchangeable for,
securities having the right to vote) on any
matters on which stockholders of Buyer may
vote. Buyer has issued "trust preferred
securities" through the formation of four
separate trusts in pooled trust preferred
programs namely, Capital Trust II, Capital
Statutory Trust III, Capital Trust IV and
Capital Trust V through which it issued
Junior Subordinated Deferrable Interest
Debentures (the "Junior Subordinated Debt").
The Junior Subordinated Debt (i) is not
convertible into Buyer Shares, (ii) carries
no voting rights with respect to any Buyer
Shares, and (iii) contains no dividend
limitation provisions upon Buyer Shares
except in the event of default in the
payments due therein. Except as set forth
above, as of the date of this Agreement,
there are no material Contracts of any kind
to which Buyer is a party or by which Buyer
is bound obligating Buyer to issue, deliver
or sell, or cause to be issued,
36
delivered or sold, additional shares of
capital stock of, or other equity or voting
interests in, or securities convertible into,
or exchangeable or exercisable for, shares of
capital stock of, or other equity or voting
interests in, Buyer or obligating Buyer to
issue, grant, extend or enter into any such
security, option, warrant, call, right or
Contract. As of the date of this Agreement,
there are no outstanding material contractual
obligations of Buyer to repurchase, redeem or
otherwise acquire any shares of capital stock
of, or other equity or voting interests in,
Buyer.
(ii) The Buyer Shares to be issued in exchange
for Seller Shares in the Merger, when issued
in accordance with the terms of this
Agreement, will be duly authorized, validly
issued, fully paid and non-assessable, will
not be subject to any preemptive or other
statutory right of Buyer stockholders and
will be issued in compliance with applicable
United States federal and state securities
laws.
(d) Authorized and Effective Agreement. This Agreement
constitutes the legal, valid and binding obligation
of Buyer and WB Sub, enforceable against Buyer and WB
Sub in accordance with its terms, except as the same
may be limited by laws related to safety and
soundness of insured depository institutions as set
forth in 12 U.S.C. Section 1818(b), the appointment
of a conservator by the FDIC, bankruptcy, insolvency,
reorganization, moratorium, fraudulent conveyance and
other similar laws relating to or affecting the
enforcement of creditors' rights generally, by
general equitable principles (regardless of whether
enforceability is considered in a proceeding in
equity or at law) and by an implied covenant of good
faith and fair dealing. Each of Buyer and WB Sub has
the absolute and unrestricted right, power, authority
and capacity to execute and deliver this Agreement
and, subject to the satisfaction of the requirements
referred to in Section 4.01(j), the expiration of
applicable regulatory waiting periods, and required
filings under federal and state securities laws, to
perform its obligations under this Agreement. The
Board of Directors of Buyer has the corporate power
and authority to take the actions contemplated by
Section 6.07(a) of this Agreement.
(e) No Conflict. Subject to the receipt of the required
approvals of Regulatory Authorities and Governmental
Authorities, the expiration of applicable regulatory
waiting periods, and required filings under federal
and state securities laws, the execution, delivery
and performance of this Agreement, and the
consummation of the transactions contemplated by this
Agreement by Buyer and WB Sub do not and will not (i)
conflict with, or result in a violation of, or result
in the breach of or a default (or which with notice
or lapse of time would result in a default) under,
any provision of: (A) any federal, state or local
law, regulation, ordinance, order, rule or
administrative ruling of any Governmental Authority
37
applicable to Buyer or WB Sub or any of its or their
properties; (B) the certificates of incorporation or
bylaws of Buyer or WB Sub; (C) any material
agreement, indenture or instrument to which Buyer or
WB Sub is a party or by which it or their properties
or assets may be bound; or (D) any order, judgment,
writ, injunction or decree of any court, arbitration
panel or any Governmental Authority applicable to
Buyer or WB Sub; (ii) result in the creation or
acceleration of any security interest, mortgage,
option, claim, lien, charge or encumbrance upon or
interest in any property of Buyer; or (iii) violate
the terms or conditions of, or result in the
cancellation, modification, revocation or suspension
of, any material license, approval, certificate,
permit or authorization held by Buyer or WB Sub.
(f) SEC Filings. Buyer has filed all reports and proxy
materials required to be filed by it with the SEC
pursuant to the Exchange Act since January 1, 2001
(together with all information incorporated therein
by reference, the "BUYER SEC DOCUMENTS"), except for
any reports or proxy materials the failure to file
which would not have a material adverse effect upon
Buyer and its Subsidiaries taken as a whole. All such
filings, at the time of filing, complied in all
material respects as to form and included all
exhibits required to be filed under the applicable
rules of the SEC. None of such documents, when filed,
contained any untrue statement of a material fact or
omitted to state a material fact required to be
stated therein or necessary in order to make the
statements therein, in light of the circumstances
under which they were made, not misleading.
(g) Financial Statements of Buyer. Buyer has furnished
to Seller consolidated financial statements of Buyer
consisting of the consolidated balance sheets as of
December 31 for each of the years 2003, 2002 and
2001, and the related consolidated statements of
income, changes in shareholders' equity and cash
flows for the three years ended December 31, 2003
(the "BUYER BALANCE SHEET DATE"), including
accompanying notes and the report thereon of Ernst &
Young LLP, and the consolidated statement of
financial condition as of June 30, 2004 and the
related consolidated statements of earnings,
shareholders' equity and cash flows for the six
months then ended (collectively, all of such
consolidated financial statements are referred to as
the "BUYER FINANCIAL STATEMENTS"). The Buyer
Financial Statements comply as to form in all
material respects with applicable accounting
requirements and the published rules and regulations
of the SEC with respect thereto, have been prepared
in accordance with GAAP (except, in the case of
unaudited statements, as permitted by Form 10-Q of
the SEC) applied on a consistent basis during the
periods involved (except as may be indicated in the
notes thereto) and fairly present in all material
respects the consolidated financial position of Buyer
and the Buyer Subsidiaries as of the dates thereof
and their respective consolidated results of
operations and cash flows for the periods
38
then ended (subject, in the case of unaudited
statements, to normal year-end audit adjustments).
(h) Takeover Laws. Buyer has taken all action required to
be taken by it in order to exempt this Agreement and
the transactions contemplated hereby from, and this
Agreement and the transactions contemplated hereby
are exempt from, the requirements of any Takeover
Laws or regulations of any state applicable to it,
including, without limitation, those of the States of
West Virginia and Ohio.
(i) Brokers, Finders and Others. Except for the fees paid
or payable to Xxxxx, Xxxxxxxx & Xxxxx, Inc., Buyer's
financial advisor ("BUYER'S FINANCIAL ADVISOR"),
there are no fees or commissions of any sort
whatsoever claimed by, or payable by Buyer to, any
broker, finder, intermediary or any other similar
person in connection with effecting this Agreement or
the transactions contemplated hereby, except for
ordinary and customary legal and accounting fees.
(j) Governmental and Third-Party Proceedings. No
consent, approval, authorization of, or registration,
declaration or filing with, any court, Governmental
Authority or any other third party is required to be
made or obtained by Buyer or the Buyer Subsidiaries
in connection with the execution, delivery or
performance by Buyer or WB Sub of this Agreement or
the consummation by Buyer or WB Sub of the
transactions contemplated hereby, except for (A)
filings of applications or notices, as applicable,
with and the approval of certain federal and state
banking authorities, (B) the filing of the
appropriate certificates of merger with the
Secretaries of State of West Virginia and Ohio
pursuant to the WVBCA and OGCL and (C) receipt of the
approvals set forth in Section 7.07. As of the date
hereof, Buyer is not aware of any reason why the
approvals set forth in Section 7.07 will not be
received without the imposition of a condition,
restriction or requirement of the type described in
Section 7.07.
(k) [Reserved]
(l) Absence of Undisclosed Liabilities. Except as set
forth in Buyer SEC Documents filed and publicly
available prior to the date of this Agreement (the
"BUYER FILED SEC DOCUMENTS") (including the financial
statements included therein) or in Section 4.01(l) of
the Buyer Disclosure Schedule and except as arising
hereunder, Buyer and its subsidiaries (individually
"BUYER SUBSIDIARY" or collectively "BUYER
SUBSIDIARIES") have no liabilities or obligations of
any nature (whether accrued, absolute, contingent or
otherwise) at the Buyer Balance Sheet Date, other
than liabilities and obligations that individually or
in the aggregate could not reasonably be expected to
have a material adverse effect on Buyer. Except as
set forth in the Buyer Filed SEC Documents or
otherwise disclosed in Section 4.01(l) of the Buyer
Disclosure Schedule, all debts,
39
liabilities, guarantees and obligations of Buyer and
the Buyer Subsidiaries incurred since the Buyer
Balance Sheet Date have been incurred in the ordinary
course of business and are usual and normal in amount
both individually and in the aggregate.
(m) Absence of Changes. Except (i) as set forth in the
Buyer Filed SEC Documents, (ii) as set forth in
Section 4.01(m) of the Buyer Disclosure Schedule, or
(iii) in the ordinary course of business consistent
with past practice, since the Buyer Balance Sheet
Date, there has not been any material adverse change
in the business, operations, assets or financial
condition of Buyer and the Buyer Subsidiaries taken
as a whole, and, to the knowledge of Buyer, no fact
or condition exists which Buyer believes will cause
such a material adverse change in the future.
(n) Allowance for Loan Losses. Except as set forth in
the Buyer SEC Documents or in Section 3.01(n) of the
Buyer Disclosure Schedule, there is no loan which was
made by any Buyer Subsidiary and which is reflected
as an asset of such Buyer Subsidiary on the Buyer
Financial Statements that (A)(i) is 90 days or more
delinquent or (ii) has been classified by examiners
(regulatory or internal) as "Substandard," "Doubtful"
or "Loss," and (B) the default by the borrower under
which could reasonably be expected to have a material
adverse effect on Buyer. The allowance for loan
losses reflected on the Buyer Financial Statements
has been determined in accordance with GAAP in all
material respects and in accordance in all material
respects with all rules and regulations applicable to
Buyer and the Buyer Subsidiaries and is, in the
judgment of Buyer's management, adequate in all
material respects, except for such failures and
inadequacies which would not reasonably be expected
to have a material adverse effect on Buyer. Buyer has
considered all potential losses known to Buyer in
establishing the current allowance for loan losses
for each Buyer Subsidiary, other than such losses
that if incurred would not have a material adverse
effect on Buyer.
(o) Reports and Records. Buyer and the Buyer
Subsidiaries have filed all reports and maintained
all records required to be filed or maintained by
them under the rules and regulations of the Board of
Governors of the Federal Reserve System, the FDIC and
the West Virginia Division of Banking, except for
such reports and records the failure to file or
maintain would not reasonably be expected to have a
material adverse effect on Buyer. All such documents
and reports complied in all material respects with
applicable requirements of law and rules and
regulations in effect at the time such documents and
reports were filed and contained in all material
respects the information required to be stated
therein, except for such documents and records the
failure to file or contain such information would not
reasonably be expected to have a material adverse
effect on Buyer. None of such documents or reports,
when filed, contained any
40
untrue statement of a material fact or omitted to
state a material fact required to be stated therein
or necessary in order to make the statements therein,
in light of the circumstances under which they were
made, not misleading, other than such reports and
documents which the failure to file in such fashion
would not reasonably be expected to have a material
adverse effect on Buyer.
(p) Taxes. Except as set forth in Section 4.01(p) of
the Buyer Disclosure Schedule, Buyer and the Buyer
Subsidiaries have timely filed all material Tax
Returns with respect to all material Taxes required
to be filed with the appropriate tax authority
through the date of this Agreement. Such Tax Returns
are and will be true, correct and complete in all
material respects. Buyer and the Buyer Subsidiaries
have paid and discharged all Taxes shown as due on
such Tax Returns, other than such Taxes that are
adequately reserved as shown on the Buyer Financial
Statements or have arisen in the ordinary course of
business since the Buyer Balance Sheet Date. Except
as set forth in Section 4.01(p) of the Buyer
Disclosure Schedule, neither the IRS nor any other
taxing agency or authority, domestic or foreign, has
asserted, is now asserting or, to the knowledge of
Buyer, is threatening to assert against Buyer or any
Buyer Subsidiary any deficiency or claim for
additional Taxes, which deficiency or claim, if
upheld, would reasonably be expected to have a
material adverse effect on Buyer. There are no
unexpired waivers by Buyer or any Buyer Subsidiary of
any statute of limitations with respect to Taxes. The
accruals and reserves for Taxes reflected in the
Buyer Financial Statements are adequate in all
material respects for the periods covered. Buyer and
the Buyer Subsidiaries have withheld or collected and
paid over to the appropriate Governmental Authorities
or are properly holding for such payment all Taxes
required by law to be withheld or collected, except
for such failures to withhold or collect as would not
reasonably be expected to have a material adverse
effect on Buyer. There are no liens for Taxes upon
the assets of Buyer or any Buyer Subsidiary, other
than liens for current Taxes not yet due and payable
and liens that individually or in the aggregate would
not reasonably be expected to have a material adverse
effect on Buyer. Neither Buyer nor any Buyer
Subsidiary has agreed to make, or is required to
make, any adjustment under Section 481(a) of the
Code. Except as set forth in the Buyer SEC Documents
or in Section 4.01(p) of the Buyer Disclosure
Schedule, neither Buyer nor any Buyer Subsidiary is a
party to any agreement, contract, arrangement or plan
that has resulted, or could result, individually or
in the aggregate, in the payment of "excess parachute
payments" within the meaning of Section 280G of the
Code. Neither Buyer nor any Buyer Subsidiary has ever
been a member of an affiliated group of corporations,
within the meaning of Section 1504 of the Code, other
than an affiliated group of which Buyer is or was the
common buyer corporation. No Tax is required to be
withheld
41
pursuant to Section 1445 of the Code as a result of
the transactions contemplated by this Agreement.
(q) Legal Proceedings. Except as set forth in the Buyer
Filed SEC Documents or Section 4.01(q) of the Buyer
Disclosure Schedule, there are no actions, suits,
proceedings, claims or investigations pending or, to
the knowledge of Buyer and the Buyer Subsidiaries,
threatened in any court, before any governmental
agency or instrumentality or in any arbitration
proceeding (i) against Buyer or any Buyer Subsidiary
which, if adversely determined against Buyer or any
Buyer Subsidiary, could have a material adverse
effect on Buyer; or (ii) against or by Buyer or any
Buyer Subsidiary which, if adversely determined
against Buyer or any Buyer Subsidiary, could prevent
the consummation of this Agreement or any of the
transactions contemplated hereby or declare the same
to be unlawful or cause the rescission thereof.
(r) Regulatory Matters. Except as set forth in
Section 4.01(r) of the Buyer Disclosure Schedule,
none of Buyer, the Buyer Subsidiaries and the
respective properties of Buyer and the Buyer
Subsidiaries is a party to or subject to any order,
judgment, decree, agreement, memorandum of
understanding or similar arrangement with, or a
commitment letter or similar submission to, or
extraordinary supervisory letter from, any Regulatory
Authorities that individually or in the aggregate
could reasonably be expected to have a material
adverse effect on Buyer. Neither Buyer nor any Buyer
Subsidiary has been advised by any Regulatory
Authority that such Regulatory Authority is
contemplating issuing or requesting (or is
considering the appropriateness of issuing or
requesting) any such order, judgment, decree,
agreement, memorandum of understanding, commitment
letter, supervisory letter or similar submission that
individually or in the aggregate could reasonably be
expected to have a material adverse effect on Buyer.
(s) Employee Benefit Plans.
(i) Section 4.01(s)(i) of the Buyer Disclosure
Schedule contains a complete and accurate
list of all bonus, incentive, deferred
compensation, pension (including, without
limitation, Buyer Pension Plans defined
below), retirement, profit-sharing, thrift,
savings, employee stock ownership, stock
bonus, stock purchase, restricted stock,
stock option, severance, welfare (including,
without limitation, "welfare plans" within
the meaning of Section 3(1) of ERISA, fringe
benefit plans, employment or severance
agreements and all similar practices,
policies and arrangements maintained or
contributed to (currently or within the last
six years) by (A) Buyer or any subsidiary of
Buyer and in which any employee or former
employee (the "BUYER EMPLOYEES"), consultant
or former consultant (the "BUYER
CONSULTANTS"), officer
42
or former officer (the "BUYER OFFICERS"), or
director or former director (the "BUYER
DIRECTORS") of Buyer or any subsidiary of
Buyer participates or to which any such Buyer
Employees, Buyer Consultants, Buyer Officers
or Buyer Directors either participate or are
parties or (B) any Buyer ERISA Affiliate (as
defined below) (collectively, the "BUYER
COMPENSATION AND BENEFIT PLANS"). Neither
Buyer nor any subsidiary of Buyer has any
commitment to create any additional Buyer
Compensation and Benefit Plan or to modify or
change any existing Buyer Compensation and
Benefit Plan, except to the extent required
by law and as otherwise contemplated by
Sections 6.02 and 7.01 of this Agreement.
(ii) Except in a manner that would not reasonably
be expected to have a material adverse
effect, each Buyer Compensation and Benefit
Plan has been operated and administered in
accordance with its terms and with applicable
law, including, but not limited to, ERISA,
the Code, the Securities Act (as defined in
Section 3.01(u)), the Exchange Act (as
defined in Section 3.01(g)), the Age
Discrimination in Employment Act, or any
regulations or rules promulgated thereunder,
and all filings, disclosures and notices
required by ERISA, the Code, the Securities
Act, the Exchange Act, the Age Discrimination
in Employment Act and any other applicable
law have been timely made. Each Buyer
Compensation and Benefit Plan which is an
"employee pension benefit plan" within the
meaning of Section 3(2) of ERISA (a "BUYER
PENSION PLAN") and which is intended to be
qualified under Section 401(a) of the Code
has received a favorable determination letter
(including a determination that the related
trust under such Buyer Compensation and
Benefit Plan is exempt from tax under Section
501(a) of the Code) from the IRS and Buyer is
not aware of any circumstances likely to
result in revocation of any such favorable
determination letter. There is no material
pending or, to the knowledge of Buyer,
threatened legal action, suit or claim
relating to the Buyer Compensation and
Benefit Plans other than routine claims for
benefits thereunder. Neither Buyer nor any
subsidiary of Buyer has engaged in a
transaction, or omitted to take any action,
with respect to any Buyer Compensation and
Benefit Plan that would reasonably be
expected to subject Buyer or any subsidiary
of Buyer to a tax or penalty imposed by
either Section 4975 of the Code or Section
502 of ERISA, assuming for purposes of
Section 4975 of the Code that the taxable
period of any such transaction expired as of
the date hereof.
(iii) No liability (other than for payment of
premiums to the PBGC which have been made or
will be made on a timely basis) under Title
IV of ERISA has been or is expected to be
incurred by Buyer
43
or any subsidiary of Buyer with respect to
any ongoing, frozen or terminated
"single-employer plan," within the meaning of
Section 4001(a)(15) of ERISA, currently or
formerly maintained by any of them, or any
single-employer plan of any entity (a "BUYER
ERISA AFFILIATE PLAN") which is considered
one employer with Buyer under Section
4001(a)(14) of ERISA or Section 414(b), (c)
or (m) of the Code (a "BUYER ERISA
AFFILIATE"). None of Buyer, any subsidiary of
Buyer or any Buyer ERISA Affiliate has
contributed, or has been obligated to
contribute, to a multiemployer plan under
Subtitle E of Title IV of ERISA (as defined
in ERISA Sections 3(37)(A) and 4001(a)(3)) at
any time since September 26, 1980. No notice
of a "reportable event", within the meaning
of Section 4043 of ERISA, for which the
30-day reporting requirement has not been
waived, has been required to be filed for any
Buyer Compensation and Benefit Plan or by any
Buyer ERISA Affiliate Plan within the
12-month period ending on the date hereof,
and no such notice will be required to be
filed as a result of the transactions
contemplated by this Agreement. The PBGC has
not instituted proceedings to terminate any
Buyer Pension Plan or Buyer ERISA Affiliate
Plan and, to Buyer's knowledge, no condition
exists that presents a material risk that
such proceedings will be instituted. There is
no pending investigation or enforcement
action by the PBGC, the DOL, the IRS or any
other Governmental Authority with respect to
any Buyer Compensation and Benefit Plan.
Except as disclosed in Section 4.01(r)(iii)
of the Buyer Disclosure Schedule, under each
Buyer Pension Plan and Buyer ERISA Affiliate
Plan, as of the date of the most recent
actuarial valuation performed prior to the
date of this Agreement, the actuarially
determined present value of all "benefit
liabilities", within the meaning of Section
4001(a)(16) of ERISA (as determined on the
basis of the actuarial assumptions
contained in such actuarial valuation of such
Buyer Pension Plan or Buyer ERISA Affiliate
Plan), did not exceed the then current value
of the assets of such Buyer Pension Plan or
Buyer ERISA Affiliate Plan and since such
date there has been neither an adverse change
in the financial condition of such Buyer
Pension Plan or Buyer ERISA Affiliate Plan
nor any amendment or other change to such
Buyer Pension Plan or Buyer ERISA Affiliate
Plan that would increase the amount of
benefits thereunder which reasonably could be
expected to change such result.
(iv) All contributions required to be made under
the terms of any Buyer Compensation and
Benefit Plan or Buyer ERISA Affiliate Plan or
any employee benefit arrangements under any
collective bargaining agreement to which
Buyer or any subsidiary of Buyer is a party
have been timely made or have been reflected
on the Buyer
44
Financial Statements. Neither any Buyer
Pension Plan nor any Buyer ERISA Affiliate
Plan has an "accumulated funding deficiency"
(whether or not waived) within the meaning of
Section 412 of the Code or Section 302 of
ERISA and all required payments to the PBGC
with respect to each Buyer Pension Plan and
each Buyer ERISA Affiliate Plan have been
made on or before their due dates. None of
Buyer, the any subsidiary of Buyer nor any
Buyer ERISA Affiliate (x) has provided, or
would reasonably be expected to be required
to provide, security to any Buyer Pension
Plan or to any Buyer ERISA Affiliate Plan
pursuant to Section 401(a)(29) of the Code,
and (y) has taken any action, or omitted to
take any action, that has resulted, or would
reasonably be expected to result, in the
imposition of a lien under Section 412(n) of
the Code or pursuant to ERISA.
(v) Except as disclosed in Section 4.01(s)(v) of
the Buyer Disclosure Schedule, neither Buyer
nor any subsidiary of Buyer has any
obligations to provide retiree health and
life insurance or other retiree death
benefits under any Buyer Compensation and
Benefit Plan, other than benefits mandated by
Section 4980B of the Code.
(vi) Buyer and the subsidiaries of Buyer do not
maintain any foreign Buyer Compensation and
Benefit Plans.
(vii) With respect to each Buyer Compensation and
Benefit Plan, if applicable, Buyer has
provided or made available to Seller, true
and complete copies of existing: (A) Buyer
Compensation and Benefit Plan documents and
amendments thereto; (B) trust instruments and
insurance contracts; (C) most recent
actuarial report and financial statement; (D)
most recent summary plan description; (E)
forms filed with the PBGC within the past
year (other than for premium payments); (F)
most recent determination letter issued by
the IRS; and (G) any Form 5310, Form 5310A,
Form 5300 or Form 5330 filed within the past
year with the IRS.
(viii) Except as disclosed on Section 4.01(s)(viii)
of the Buyer Disclosure Schedule, the
consummation of the transactions contemplated
by this Agreement would not, directly or
indirectly (including, without limitation, as
a result of any termination of employment
prior to or following the Effective Time),
reasonably be expected to (A) entitle any
Buyer Employee, Buyer Consultant or Buyer
Director to any payment (including severance
pay or similar compensation) or any increase
in compensation, (B) result in the vesting or
acceleration of any benefits under any Buyer
Compensation and Benefit Plan or (C) result
in any material increase in benefits payable
under any Buyer Compensation and Benefit
Plan.
45
(ix) Except as disclosed on Section 4.01(s)(ix)
of the Buyer Disclosure Schedule, neither
Buyer nor any subsidiary of Buyer maintains
any compensation plans, programs or
arrangements the payments under which would
not reasonably be expected to be deductible
as a result of the limitations under Section
162(m) of the Code and the regulations issued
thereunder.
(x) Except as disclosed on Section 4.01(s)(x)
of the Buyer Disclosure Schedule, as a
result, directly or indirectly, of the
transactions contemplated by this Agreement
(including, without limitation, as a result
of any termination of employment prior to or
following the Effective Time), none of Buyer,
Seller or the Surviving Corporation, or any
of their respective Subsidiaries will be
obligated to make a payment that would be
characterized as an "excess parachute
payment" to an individual who is a
"disqualified individual" (as such terms are
defined in Section 280G of the Code) of Buyer
on a consolidated basis, without regard to
whether such payment is reasonable
compensation for personal services performed
or to be performed in the future.
(t) Compliance with Laws. Except with respect to
Environmental Laws and Taxes, which are the subject
of Sections 4.01(p) and 4.01(v), respectively, each
of Buyer and the Buyer Subsidiaries:
(i) has been in compliance with all applicable
federal, state, local and foreign statutes,
laws, regulations, ordinances, rules,
judgments, orders or decrees applicable
thereto or to the employees conducting such
business, including, without limitation, the
Equal Credit Opportunity Act, as amended, the
Fair Housing Act, as amended, the Federal
Community Reinvestment Act, as amended, the
Home Mortgage Disclosure Act, as amended, and
all other applicable fair lending laws and
other laws relating to discriminatory
business practices, except for failures to be
in compliance which, individually or in the
aggregate, have not had or would not
reasonably be expected to have a material
adverse effect on Buyer;
(ii) has all permits, licenses, authorizations,
orders and approvals of, and has made all
filings, applications and registrations with,
all Governmental Authorities that are
required in order to permit it to own or
lease its properties and to conduct its
business as presently conducted, except where
the failure to obtain any of the foregoing or
to make any such filing, application or
registration has not had or would not
reasonably be expected to have a material
adverse effect on Buyer; all such permits,
licenses, certificates of authority, orders
and approvals are in full force and effect
and to Buyer's
46
knowledge, no suspension or cancellation of
any of them has been threatened in writing;
and
(iii) has received no written notification
or communication from any Governmental
Authority since January 1, 2004, (A)
asserting that Buyer or any Buyer Subsidiary
is not in compliance with any of the
statutes, regulations or ordinances which
such Governmental Authority enforces, except
for failures to be in compliance that
individually or in the aggregate would not
reasonably be expected to have a material
adverse effect on Buyer, or (B) threatening
to revoke any license, franchise, permit or
governmental authorization, which
revocations, individually or in the aggregate
would reasonably be expected to have a
material adverse effect on Buyer, which has
not been resolved to the satisfaction of the
Governmental Authority which sent such
notification or communication. There is no
event which has occurred that, to the
knowledge of Buyer, would reasonably be
expected to result in the revocation of any
such license, franchise, permit or
governmental authorization.
(u) Contracts. (i) Except for Contracts filed as
exhibits to the Buyer Filed SEC Documents, there are
no Contracts that are required to be filed as an
exhibit to any Buyer Filed SEC Document under the
Exchange Act and the rules and regulations
promulgated thereunder. Neither Buyer nor any Buyer
Subsidiary, nor, to the knowledge of Buyer, any other
party thereto, is in default under any such contract,
agreement, commitment, arrangement or other
instrument to which it is a party, by which its
respective assets, business or operations may be
bound or affected in any way, or under which it or
its respective assets, business or operations receive
benefits, and there has not occurred any event that,
with the lapse of time or the giving of notice or
both, would constitute such a default except, in each
case, for defaults that individually or in the
aggregate would not reasonably be expected to have a
material adverse effect on Buyer.
(v) Environmental Matters. Except as otherwise disclosed
in Section 4.01(v) of the Buyer Disclosure Schedule:
(i) Buyer and the Buyer Subsidiaries, to their
knowledge, are and have been at all times in
compliance in all material respects with all
applicable Environmental Laws as that term is defined
in Section 3.01(y), and, to the knowledge of Buyer,
neither Buyer nor any Buyer Subsidiary has engaged in
any activity in violation of any applicable
Environmental Law except for failures to be in
compliance that individually or in the aggregate
could not reasonably be expected to have a material
adverse effect on Buyer; (ii)(A) to the knowledge of
Buyer, no investigations, inquiries, orders,
hearings, actions or other proceedings by or before
any court or Governmental Authority are pending or
have been
47
threatened in writing in connection with any of
Buyer's or any Buyer Subsidiary's activities and any
Buyer Real Properties or improvements thereon, and
(B) to the knowledge of Buyer, no investigations,
inquiries, orders, hearings, actions or other
proceedings by or before any court or Governmental
Authority are pending or threatened in connection
with any real properties in respect of which any
Buyer Subsidiary has foreclosed or holds a mortgage
or mortgages (hereinafter referred to as the "BUYER
SUBSIDIARY REAL ESTATE COLLATERAL"); (iii) to the
knowledge of Buyer, no claims a pending or threatened
by any third party against Buyer or any Buyer
Subsidiary, or with respect to the Buyer Real
Properties or improvements thereon, or, to the
knowledge of Buyer, the Buyer Subsidiary Real Estate
Collateral or improvements thereon, relating to
damage, contribution, cost recovery, compensation,
loss, injunctive relief, remediation or injury
resulting from any Hazardous Substance (as that term
is defined in Section 3.01(y)) (which have not been
resolved to the satisfaction of the involved parties
and which have had or are reasonably expected to have
a material adverse effect on Buyer or any Buyer
Subsidiary; (iv) to the knowledge of Buyer, no
Hazardous Substances have been integrated into the
Buyer Real Properties or improvements thereon or any
component thereof, or the Buyer Subsidiary Real
Estate Collateral or improvements thereon or any
component thereof in such manner or quantity as may
reasonably be expected to or in fact would pose a
threat to human health or the value of the real
property and improvements; and (v) neither Buyer nor
any Buyer Subsidiary has knowledge that (A) any of
the Buyer Real Properties or improvements thereon, or
the Buyer Subsidiary Real Estate Collateral or
improvements thereon has been used for the treatment,
storage or disposal of Hazardous Substances or has
been contaminated by Hazardous Substances, (B) any of
the business operations of Buyer or any Buyer
Subsidiary have contaminated lands, waters or other
property of others with Hazardous Substances, except
routine, office-generated solid waste, or (C) any of
the Buyer Properties or improvements thereon, or the
Buyer Subsidiary Real Estate Collateral or
improvements thereon have in the past or presently
contain underground storage tanks, friable asbestos
materials or PCB-containing equipment, which in any
event would reasonably be expected to have a material
adverse effect on Buyer.
(w) Buyer Information. True and complete copies of all
documents listed in the Buyer Disclosure Schedule
have been made available or provided to Buyer. The
books of account, stock record books and other
financial and corporate records of the Buyer and its
Subsidiaries, all of which have been made available
to Buyer, are complete and correct in all material
respects, including the maintenance of a system of
internal accounting controls sufficient to provide
reasonable assurance that transactions are executed
with its management's authorizations and such books
and records are
48
accurately reflected in all material respects in the
Buyer Filed SEC Documents.
(x) CRA Compliance. Neither Buyer nor any Buyer
Subsidiary has received any notice of non-compliance
with the applicable provisions of the CRA and the
regulations promulgated thereunder, and each
Subsidiary of Buyer has received a CRA rating of
satisfactory or better from the Federal Reserve Board
in its most recent examination. Buyer knows of no
fact or circumstance or set of facts or circumstances
which would be reasonably likely to cause Buyer or
any Buyer Subsidiary to receive any notice of
non-compliance with such provisions or cause the CRA
rating of Buyer or any Buyer Subsidiary to fall below
satisfactory.
(y) Ownership of Seller Shares. As of the date hereof,
except as otherwise disclosed in Section 4.01(y) of
the Buyer Disclosure Schedule, neither Buyer nor any
of its affiliates or associates (as such terms are
defined under the Exchange Act), (i) beneficially
owns, directly or indirectly, any Seller Shares, (ii)
is a party to any agreement, arrangement or
understanding for the purpose of acquiring, holding,
voting or disposing of, any Seller Shares, (iii) has
been an "interested shareholder" (as such term in
defined in Section 1704.01 of the OGCL) of Seller at
any time within the last three years or (iv) is a
"Controlling Person" of Seller (as such term is
defined in Article Ninth of Seller's articles of
incorporation).
ARTICLE FIVE
FURTHER COVENANTS OF SELLER
5.01. OPERATION OF BUSINESS
Seller covenants to Buyer that, throughout the period from the
date of this Agreement to and including the Closing, except as expressly
contemplated or permitted by this Agreement or to the extent that Buyer shall
otherwise consent in writing:
(a) Conduct of Business. Seller's business, and the
business of each of the Seller Subsidiaries, will be
conducted only in the ordinary and usual course
consistent with past practice. Without the written
consent of Buyer, Seller shall not, and shall cause
each of the Seller Subsidiaries not to, take any
action which would be inconsistent with any
representation or warranty of Seller set forth in
this Agreement or which would cause a breach of any
such representation or warranty if made at or
immediately following such action, subject to such
exceptions as do not, and would not reasonably be
expected to have, individually or in the aggregate, a
material adverse effect on Buyer or on the Surviving
Corporation following the Effective Time or except,
in each case, as may be required by applicable law or
regulation.
49
(b) Changes in Business and Capital Structure. Except as
provided for by this Agreement, as set forth in
Section 5.01(b) of the Seller Disclosure Schedule or
as otherwise approved expressly in writing by Buyer,
which approval shall not be unreasonably withheld,
Seller will not, and will cause each of the Seller
Subsidiaries not to:
(i) sell, transfer, mortgage, pledge or
subject to any lien or otherwise encumber
any of the assets of Seller or any Seller
Subsidiary, tangible or intangible, which
are material, individually or in the
aggregate, to Seller except for (A) internal
reorganizations or consolidations involving
existing subsidiaries that would not be
likely to present a material risk of any
material delay in the receipt of any
required regulatory approval, (B)
securitization activities in the ordinary
course of business, (C) the sale of loans or
loan participations in the ordinary course
of business, and (D) other dispositions of
assets, including subsidiaries, if the fair
market value of the total consideration
received therefrom does not exceed in the
aggregate, $100,000;
(ii) make any capital expenditure or capital
additions or betterments which individually
exceed $150,000 or exceed $500,000 in the
aggregate and which otherwise are in any
manner inconsistent in any material respect
with Seller's capital budget for 2004;
(iii) become bound by, enter into, or perform any
material contract, commitment or transaction
which if so entered into, would be
reasonably likely to (A) have a material
adverse effect on Seller, (B) impair in any
material respect the ability of Seller to
perform its obligations under this Agreement
or (C) prevent or materially delay the
consummation of the transactions
contemplated by this Agreement;
(iv) declare, pay or set aside for payment any
dividends or make any distributions on its
capital shares issued and outstanding other
than (A) quarterly cash dividends on Seller
Shares in respect of each fiscal quarter
ending on or after August 1, 2004 in an
amount not to exceed $.1125 per Seller Share
and (B) dividends by a direct or indirect
wholly owned subsidiary of Seller to its
parent;
(v) purchase, redeem, retire or otherwise
acquire any of its capital shares other than
pursuant to rights of repurchase granted to
Seller, or put rights granted to any of its
employees or former employees, pursuant to
the Seller Stock Option Plans;
(vi) issue or grant any option or right to
acquire any of its capital shares (other
than the issuance of Seller Shares pursuant
to the exercise of warrants or options
outstanding as of the date of this
Agreement)
50
or effect, directly or indirectly, any share
split or share dividend, recapitalization,
combination, exchange of shares,
readjustment or other reclassification;
(vii) amend or propose to amend its Articles of
Incorporation, Code of Regulations or other
governing documents except as otherwise
expressly contemplated by this Agreement;
(viii) except as otherwise permitted under the
provisions of Section 5.03 hereof, merge or
consolidate with any other person or
otherwise reorganize except for the Merger
and the Bank Merger;
(ix) acquire all or any portion of the assets,
business, deposits or properties of any
other entity other than (A) by way of
foreclosures, (B) acquisitions of control in
a bona fide fiduciary capacity or in
satisfaction of debts previously contracted
in good faith, in each case in the ordinary
and usual course of business consistent with
past practice and (C) internal
reorganizations or consolidations involving
existing subsidiaries that would not be
likely to present a material risk of any
material delay in the receipt of any
required regulatory approval;
(x) other than in the ordinary course of
business consistent with past practice,
enter into, establish, adopt or amend any
pension, retirement, stock option, stock
purchase, savings, profit-sharing, deferred
compensation, consulting, bonus, group
insurance or other employee benefit,
incentive or welfare contract, plan or
arrangement, or any trust agreement (or
similar arrangement) related thereto, in
respect of any Director, Officer or Employee
of Seller or any Seller Subsidiary, or take
any action to accelerate the vesting or
exercisability of stock options, restricted
stock or other compensation or benefits
payable thereunder; provided, however, that
Seller may take such actions in order to
satisfy either applicable law or contractual
obligations, including those arising under
its benefit plans, existing as of the date
hereof and disclosed in the Seller
Disclosure Schedule or regular annual
renewals of insurance contracts; provided
further, however, that Seller's Board of
Directors may make discretionary
contributions to Seller's 401(k) Plan at the
end of each month in accordance with past
practice;
(xi) announce or pay any general wage or
salary increase or bonus, other than normal
pay increases and bonuses consistent with
past practices, or enter into or amend or
renew any employment, consulting, severance
or similar agreements or arrangements with
any Officer, Director or Employee, except,
in each case, for changes which are required
by applicable law or to satisfy
51
contractual obligations existing as of the
date hereof and disclosed in the Seller
Disclosure Schedule; provided, however, that
Seller shall be permitted to pay (A) to the
Employees of Seller and WI Sub an annual or
other incentive bonus, consistent in amount
and eligibility with past practice prorated
through the Effective Time and (B) quarterly
performance and referral bonuses to
Employees of WI Sub consistent with WI Sub's
current policy with respect to such bonus
payments;
(xii) incur any long-term indebtedness for money
borrowed, guarantee any such long-term
indebtedness or issue or sell any long-term
debt securities other than (i) in
replacement of existing or maturing debt,
(ii) indebtedness of one subsidiary of
Seller to Seller or another subsidiary of
Seller, or (iii) in the ordinary course of
business consistent with past practice;
(xiii) except as disclosed in any Seller SEC
Document filed prior to the date of this
Agreement, implement or adopt any change in
its accounting principles, practices or
methods, other than as may be required by
GAAP, or the rules and regulations of the
SEC or AMEX;
(xiv) change its existing deposit policy, incur
deposit liabilities, other than deposit
liabilities incurred in the ordinary course
of business consistent with past practice,
or accept any brokered deposit having a
maturity longer than 365 days, other than in
the ordinary course of business;
(xv) sell, purchase, enter into a lease,
relocate, open or close any banking or other
office, or file any application pertaining
to such action with any Regulatory
Authority;
(xvi) change any of its commercial or consumer
loan policies in any material respect,
including credit underwriting criteria, or
make any material exceptions thereto, unless
so required by applicable law or
Governmental Authority;
(xvii) purchase or sell any mortgage loan servicing
rights; or
(xviii) enter into any agreement to do any of the
foregoing.
(c) Maintenance of Property. Seller shall, and shall
cause the Seller Subsidiaries to, use their
commercially reasonable efforts to maintain and keep
their respective properties and facilities in their
present condition and working order, ordinary wear
and tear excepted, except with respect to such
properties and facilities, the loss of which would
not reasonably be expected to have a material adverse
effect on Seller.
52
(d) Performance of Obligations. Seller shall, and shall
cause the Seller Subsidiaries to, perform all of
their obligations under all agreements relating to or
affecting their respective properties, rights and
businesses, except where nonperformance would not
have a material adverse effect on Seller.
(e) Maintenance of Business Organization. Seller shall,
and shall cause the Seller Subsidiaries to, use their
commercially reasonable efforts to maintain and
preserve their respective business organizations
intact, to retain present key Employees and to
maintain the respective relationships of customers,
suppliers and others having business relationships
with them.
(f) Insurance. Seller shall, and shall cause the Seller
Subsidiaries to, maintain insurance coverage with
reputable insurers, which in respect of amounts,
premiums, types and risks insured, were maintained by
them at the Seller Balance Sheet Date, and upon the
renewal or termination of such insurance, Seller and
the Seller Subsidiaries will use their commercially
reasonable efforts to renew or replace such insurance
coverage with reputable insurers, in respect of the
amounts, premiums, types and risks insured or
maintained by them at the Balance Sheet Date.
(g) Access to Information. (a) Seller shall, and
shall cause each of its Subsidiaries to, afford to
Buyer and to Buyer's officers, employees, investment
bankers, attorneys, accountants and other advisors
and representatives reasonable and prompt access
during normal business hours during the period prior
to the Effective Time or the termination of this
Agreement to all their respective properties, assets,
books, contracts, commitments, directors, officers,
employees, attorneys, accountants, auditors, other
advisors and representatives and records and, during
such period. Seller shall, and shall cause each of
its subsidiaries to, make available to Buyer on a
prompt basis (i) a copy of each report, schedule,
form, statement and other document filed or received
by it during such period pursuant to the requirements
of domestic or foreign (whether national, federal,
state, provincial, local or otherwise) laws and (ii)
all other information concerning its business,
properties and personnel as Buyer may reasonably
request (including the financial and tax work papers
of Xxxxx Xxxxxxxx, LLP); provided, however, that
Buyer shall not unreasonably interfere with Seller's
business operations and Seller may, in its
discretion, limit Buyer's access to Seller's
employees whose work product Seller reasonably wishes
to keep confidential.
5.02. NOTIFICATION
Between the date of this Agreement and the Closing Date,
Seller promptly shall notify Buyer in writing if Seller becomes aware of any
fact or condition that (a) causes or constitutes a breach in any material
respect of any of Seller's representations and warranties or
53
(b) would (except as expressly contemplated by this Agreement) cause or
constitute a breach in any material respect of any such representation or
warranty had such representation or warranty been made as of the time of
occurrence or discovery of such fact or condition. Should any such fact or
condition require any change in the Seller Disclosure Schedule, Seller will
promptly deliver to Buyer a supplement to the Seller Disclosure Schedule
specifying such change ("UPDATED SELLER DISCLOSURE SCHEDULE"); provided,
however, that the disclosure of such change in the Updated Seller Disclosure
Schedule shall not be deemed to constitute a cure of any breach of any
representation or warranty made pursuant to this Agreement unless consented to
in writing by Buyer. During the same period, Seller will promptly notify Buyer
of (i) the occurrence of any breach in any material respect of any of Seller's
covenants contained in this Agreement, (ii) the occurrence of any event that may
make the satisfaction of the conditions in this Agreement impossible or unlikely
in any material respect or (iii) the occurrence of any event that is reasonably
likely, individually or taken with all other facts, events or circumstances
known to Seller, to result in a material adverse effect with respect to Seller.
5.03. ACQUISITION PROPOSALS
(a) From the date hereof until this Agreement has been
terminated as provided herein, Seller shall not, nor shall it permit any of the
Seller Subsidiaries to, or authorize or permit any director, officer or employee
of Seller or any of the Seller Subsidiaries or any investment banker, attorney,
accountant or other advisor or representative of Seller or any of its
subsidiaries (the "SELLER REPRESENTATIVES") to, directly or indirectly, (i)
solicit, initiate or knowingly encourage any Takeover Proposal (as defined
below) or any inquiries or the making of any proposal that constitutes or could
reasonably be expected to lead to a Takeover Proposal or (ii) enter into,
continue or otherwise participate in any discussions or negotiations regarding,
or furnish to any person any information with respect to, or otherwise cooperate
in any way with respect to, any Takeover Proposal; provided, however, that at
any time prior to obtaining the approval of its shareholders, the Board of
Directors of Seller or Seller Representatives may, in response to a bona fide
written Takeover Proposal which was unsolicited and did not otherwise result
from a breach of this Section 5.03, and subject to compliance with Section
5.03(c) and (d), may take the following actions if the Board of Directors, after
consultation with and based upon the advice of counsel, determines that such
actions are required to fulfill its fiduciary duties under applicable laws: (x)
furnish information with respect to Seller and its Subsidiaries to the person
making such Takeover Proposal (and its representatives) pursuant to a customary
confidentiality agreement, provided that all such information is provided to
Buyer or has been previously provided to Buyer, and (y) participate in
discussions or negotiations with the person making such Takeover Proposal (and
its representatives) regarding such Takeover Proposal.
The term "TAKEOVER PROPOSAL" means any inquiry, proposal or
offer from any person relating to, or that is reasonably likely to lead to, any
direct or indirect acquisition, in one transaction or a series of transactions,
including any merger, consolidation, tender offer, exchange offer, stock
acquisition, asset acquisition, share exchange, business combination,
recapitalization, liquidation, dissolution, joint venture or similar
transaction, of (A) assets or businesses that constitute or represent 20% or
more of the total revenue or assets of Seller and its subsidiaries, taken as a
whole, or (B) 20% or more of the outstanding Seller Shares, or other equity or
voting interests in, any of Seller's Subsidiaries directly or indirectly
holding,
54
individually or taken together, the assets or businesses referred to in clause
(A) above, in each case other than the transactions contemplated by this
Agreement.
(b) Neither the Board of Directors of Seller nor any committee
thereof shall, unless the Board of Directors or a committee thereof determines
in good faith, after consulting with legal counsel, that the failure to take any
such action set forth in this Section 5.03(b) would be reasonably likely to
result in a breach of its fiduciary duties under applicable laws (i) (A)
withdraw (or modify in a manner adverse to Buyer) the recommendation by such
Board of Directors or any such committee of this Agreement or the Merger, (B)
determine that this Agreement or the Merger is no longer advisable, (C)
recommend that the shareholders of Seller reject this Agreement or the Merger,
(D) recommend the approval or adoption of any Takeover Proposal or (E) resolve,
agree or propose publicly to take any such actions, (ii) adopt or approve any
Takeover Proposal, or withdraw its approval of this Agreement, or resolve or
agree to take any such actions, (iii) without limiting Section 5.03(b)(i),
propose publicly to adopt or approve any Takeover Proposal or propose publicly
to withdraw its approval of this Agreement, or resolve or agree to take any such
actions, or (iv) cause or permit Seller to enter into any letter of intent,
memorandum of understanding, agreement in principle, acquisition agreement,
merger agreement, option agreement, joint venture agreement, partnership
agreement or other agreement (each, an "ACQUISITION AGREEMENT") constituting or
related to, or which is intended to or is reasonably likely to lead to, any
Takeover Proposal (other than a confidentiality agreement referred to in Section
5.03(a)), or resolve or agree to take any such actions. Notwithstanding anything
in this Section 5.03 to the contrary, at any time prior to obtaining the
shareholder approval, the Board of Directors of Seller may, in response to a
Superior Proposal and that did not result from a breach of Section 5.03(a),
cause Seller to terminate this Agreement pursuant to Section 11.01(d)(iii) and
concurrently enter into a binding Acquisition Agreement containing the terms of
a Superior Proposal; provided, however, that Seller shall not exercise its right
to terminate this Agreement pursuant to Section 11.01(d)(iii) until after the
third business day following Buyer's receipt of written notice (a "NOTICE OF
SUPERIOR PROPOSAL") from Seller advising Buyer that the Board of Directors of
Seller has received a Superior Proposal and that such Board of Directors intends
to, subject to any action taken by Buyer pursuant to this sentence, cause Seller
to accept such Superior Proposal and terminate this Agreement, specifying the
terms and conditions of the Superior Proposal and identifying the person making
such Superior Proposal (it being understood and agreed that any amendment to the
price or any other material term of a Superior Proposal shall require a new
Notice of Superior Proposal and a new three business day period).
The term "SUPERIOR PROPOSAL" means any bona fide binding
written offer not solicited by or on behalf of Seller and received subsequent to
the date hereof made by a third party that if consummated would result in such
third party (or in the case of a direct merger between such third party and
Seller, the stockholders of such third party) acquiring, directly or indirectly,
more than 50% of the voting power of Seller or all or substantially all the
assets of Seller and its subsidiaries, taken as a whole, that the Board of
Directors of Seller determines in its good faith judgment (after consultation
with its financial advisor or other financial advisor of nationally recognized
reputation) is reasonably likely to result in terms which are more favorable
from a financial point of view to Seller's shareholders than the Merger, taking
into account,
55
among other things, any changes to the terms of this Agreement offered by Buyer
in response to such Superior Proposal or otherwise.
(c) In addition to the obligations of Seller set forth in
paragraphs (a) and (b) of this Section 5.03, Seller promptly shall, but in any
case within 24 hours, advise Buyer in writing of any request for information
that Seller reasonably believes could lead to or contemplates a Takeover
Proposal or of any Takeover Proposal, or any inquiry Seller reasonably believes
could lead to any Takeover Proposal, the terms and conditions of such request,
Takeover Proposal or inquiry (including any subsequent material amendment or
modification to such terms and conditions) and the identity of the person making
any such request, Takeover Proposal or inquiry. Seller shall keep Buyer informed
in all material respects on a timely basis of the status and details (including
material amendments or proposed amendments) of any such request, Takeover
Proposal or inquiry.
(d) Nothing contained in this Section 5.03 or elsewhere in
this Agreement shall prohibit Seller from (i) taking and disclosing to its
shareholders a position contemplated by Rule 14e-2(a) and Rule 14d-9 promulgated
under the Exchange Act or (ii) making any disclosure to Seller's shareholders
if, in the good faith judgment of the Board of Directors of Seller, after
consultation with outside counsel, failure so to disclose would be inconsistent
with applicable law.
5.04. DELIVERY OF INFORMATION
Seller shall furnish to Buyer promptly after such documents
are available: (a) all reports, proxy statements or other communications by
Seller to its shareholders generally; and (b) all press releases relating to any
transactions.
5.05. AFFILIATES COMPLIANCE WITH THE SECURITIES ACT
(a) No later than the 15th day prior to the mailing
of the Proxy Statement/Prospectus, Seller shall
deliver to Buyer a schedule of all persons who Seller
reasonably believes are, or are likely to be, as of
the date of the Seller Meeting, deemed to be
"affiliates" of Seller as that term is used in Rule
145 under the Securities Act of 1933, as amended (the
"SECURITIES ACT") and/or Accounting Series Releases
130 and 135, as amended, of the SEC (the "RULE 145
AFFILIATES"). Thereafter and until the Effective
Time, Seller shall identify to Buyer each additional
person whom Seller reasonably believes to have
thereafter become a Rule 145 Affiliate.
(b) Seller shall use its diligent efforts to cause each
person who is identified as a Rule 145 Affiliate
pursuant to Section 5.05(a) above (who has not
executed and delivered the same concurrently with the
execution of this Agreement) to execute and deliver
to Buyer on or before the date of mailing of the
Proxy Statement/Prospectus, a written agreement,
substantially in the form of Exhibit A attached
hereto.
56
5.06. TAKEOVER LAWS
Seller shall take all necessary steps to (a) exempt (or cause
the continued exemption of) this Agreement, the Merger and the Bank Merger from
the requirements of any Takeover Laws applicable to it, and (b) assist in any
challenge by Buyer to the validity, or applicability to the Merger or Bank
Merger, of any Takeover Law.
5.07. NO CONTROL
Nothing contained in this Agreement shall give Buyer, directly
or indirectly, the right to control or direct the operations of Seller or any
Seller Subsidiary prior to the Effective Time. Prior to the Effective Time each
of Seller and Buyer shall exercise, consistent with the terms of this Agreement,
complete control and supervision over its and its subsidiaries respective
operations.
ARTICLE SIX
FURTHER COVENANTS OF BUYER
6.01. ACCESS TO INFORMATION
Buyer shall furnish to Seller promptly after such documents
are available: (i) all reports, proxy statements or other communications by
Buyer to its shareholders generally; and (ii) all press releases relating to any
transactions.
6.02. OPPORTUNITY OF EMPLOYMENT; EMPLOYEE BENEFITS
(a) Buyer agrees to use its commercially reasonable
efforts to continue the employment of at least a
majority of the Employees of Seller and the Seller
Subsidiaries after the Merger. Employees of Seller
and the Seller Subsidiaries (other than employees who
are otherwise parties to employment or change in
control agreements) (i) who are not offered the
opportunity to continue as employees following the
Effective Time or (ii) who are terminated without
cause within six months after the Effective Time,
shall be entitled to receive (a) severance
compensation of not less than one week of pay for
each year of service with Seller and/or any Seller
Subsidiary, with a minimum severance of four weeks of
pay and a maximum severance of 26 weeks of pay, (b)
outplacement consultation services of a type and
nature to be agreed upon by Seller and Buyer prior to
the Effective Time and with a cost of up to $1,000
for each employee of Seller or any Seller Subsidiary,
and (c) accrued benefits, including vacation pay,
through the date of separation. Nothing in this
section or elsewhere in this Agreement shall be
deemed to be a contract of employment or be construed
to give said employees any rights other than as
employees at will under Ohio law and said employees
shall not be deemed to be third-party beneficiaries
of this provision. From and after the Effective Time,
the Employees of Seller and the Seller Subsidiaries
who remain employees of Buyer or its Subsidiaries
after the Effective
57
Time (including employees who are parties to
employment or change in control agreements)
("CONTINUING EMPLOYEES") shall be provided with
employee benefits that do not discriminate between
employees who were covered by the Seller Compensation
and Benefit Plans and employees who were covered by
the Buyer Compensation and Benefit plans. Each
Continuing Employee shall be credited with years of
service with Seller, the appropriate Seller
Subsidiary and, to the extent credit would have been
given by Seller or the appropriate Seller Subsidiary
for years of service with a predecessor (including
any business organization acquired by Seller or any
Seller Subsidiary), years of service with a
predecessor of Seller or a Seller Subsidiary, for
purposes of eligibility and vesting (but not for
benefit accrual purposes) in the employee benefit
plans of Buyer, and shall not be subject to any
exclusion or penalty for pre-existing conditions that
were covered under the Seller Compensation and
Benefit Plans immediately prior to the Effective
Time, or to any waiting period relating to such
coverage. Notwithstanding the foregoing, all then
active Seller Employees and all then active Seller
Subsidiary Employees shall commence participation in
Buyer's Employee Stock Ownership Plan and its Defined
Benefit Pension Plan as of the Effective Time. The
foregoing covenants shall survive the Merger, and
Buyer shall before the Effective Time adopt
resolutions that amend its tax-qualified retirement
plans to provide for the Seller or Seller Subsidiary
service credits referenced herein.
(b) The Surviving Corporation shall cause WB Sub to honor
the terms of each of the employment agreements as in
effect at the Seller Subsidiaries, as of the date
hereof, in accordance with their terms after the
Effective Time; provided, however, that,
notwithstanding anything to the contrary in this
Agreement or elsewhere, Xxxxxx X. Xxxxxx, Xxxxxxx X.
Xxxxxx, Xxxx X. Xxxxx, Xxxxxx X. Xxxxx and Xxxxxxx X.
Xxxxxx shall receive, immediately prior to the
Effective Time, the severance payment to which each
is entitled in accordance with the terms of their
employment or severance agreements upon a "Change of
Control" as defined therein.
(c) Seller and Buyer shall create a retention bonus pool
from which the senior management of Buyer and Seller
shall be able to offer retention bonuses to employees
of Seller whom such senior management wishes to
encourage to remain in Seller's employ until the
Effective Time.
6.03. EXCHANGE LISTING
Buyer shall file a listing application with Nasdaq for the
Buyer Shares to be issued to the former holders of Seller Shares in the Merger
at the time prescribed by applicable Nasdaq rules and regulations, and shall use
all commercially reasonable efforts to cause the Buyer Shares to be issued in
connection with the Merger to be approved for listing on Nasdaq, subject to
official notice of issuance, prior to the Closing Date. In addition, Buyer will
use its best efforts to maintain its listing on Nasdaq.
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6.04. NOTIFICATION
Between the date of this Agreement and the Closing Date, Buyer
promptly shall notify Seller in writing if Buyer becomes aware of any fact or
condition that (i) causes or constitutes a breach in any material respect of any
of Buyer's or WB Sub's representations and warranties or (ii) would (except as
expressly contemplated by this Agreement) cause or constitute a breach in any
material respect of any such representation or warranty had such representation
or warranty been made as of the time of occurrence or discovery of such fact or
condition. Should any such fact or condition require any change in the Buyer
Disclosure Schedule, Buyer promptly shall deliver to Seller a supplement to the
Buyer Disclosure Schedule specifying such change ("UPDATED BUYER DISCLOSURE
SCHEDULE"); provided, however, that the disclosure of such change in the Updated
Buyer Disclosure Schedule shall not be deemed to constitute a cure of any breach
of any representation or warranty made pursuant to this Agreement unless
consented to in writing by Seller. During the same period, Buyer promptly shall
notify Seller of (i) the occurrence of any breach in any material respect of any
of Buyer's or WB Sub's covenants contained in this Agreement, (ii) the
occurrence of any event that may make the satisfaction of the conditions in this
Agreement impossible or unlikely in any material respect or (iii) the occurrence
of any event that is reasonably likely, individually or taken with all other
facts, events or circumstances known to Buyer, to result in a material adverse
effect with respect to Buyer.
6.05. TAKEOVER LAWS
Buyer shall take all necessary steps to (a) exempt (or cause
the continued exemption of) this Agreement, the Merger and the Bank Merger from
the requirements of any Takeover Law and from any provisions under its Articles
of Incorporation and Bylaws, as applicable, by action of the Board of Directors
of Buyer or otherwise, and (b) assist in any challenge by Seller to the
validity, or applicability to the Merger or Bank Merger, of any Takeover Law.
6.06. OFFICERS' AND DIRECTORS' INDEMNIFICATION
(a) For a period of six (6) years following the Effective
Time, Buyer shall, to the fullest extent permitted by
applicable law and the Code of Regulations of Seller,
indemnify, defend and hold harmless, and provide
advancement of expenses to, each person who is now,
or has been at any time prior to the date hereof or
who becomes prior to the Effective Time, a Director
or Officer of Seller or any Seller Subsidiary (each,
an "INDEMNIFIED PARTY") against all costs or expenses
(including reasonable attorneys' fees), judgments,
fines, losses, claims, damages or liabilities
(collectively, "COSTS") incurred in connection with
any claim, action, suit, proceeding or investigation,
whether civil, criminal, administrative or
investigative, arising out of actions or omissions
occurring on or prior to the Effective Time
(including, without limitation, matters, acts or
omissions occurring in connection with the approval
of this Agreement and the consummation of the
transactions contemplated hereby), whether asserted
or claimed prior to, at or after the Effective Time;
provided that any determination
59
required to be made with respect to whether an
Indemnified Party's conduct complies with the
standards set forth under applicable law for
indemnification shall be made by the court in which
the claim, action, suit or proceeding was brought or
by independent counsel (which shall not be counsel
that provides material services to Buyer) selected by
Buyer and reasonably acceptable to such Indemnified
Party.
(b) If Buyer, the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges
into any other person and is not the continuing or
surviving corporation or entity of such consolidation
or merger, (ii) transfers or conveys all or
substantially all its properties and assets to any
person or (iii) transfers, by means of a
distribution, sale, assignment or other transaction,
all of the stock of the Surviving Corporation or all
or substantially all of its assets, to any person,
then, and in each such case, Buyer shall cause proper
provision to be made so that the successor and assign
of Buyer or the Surviving Corporation assumes the
obligations set forth in this Section and in such
event all references to the Surviving Corporation in
this Section shall be deemed a reference to such
successor and assign.
(c) For a period of six (6) years from the Effective
Time, Buyer shall provide that portion of directors'
and officers' liability insurance that serves to
reimburse the present and former Officers and
Directors of Seller and the Seller Subsidiaries
(determined as of the Effective Time) (as opposed to
Seller) with respect to claims against such Officers
and Directors arising from facts or events which
occurred before the Effective Time, on terms no less
favorable than those in effect on the date hereof;
provided, however, that Buyer may substitute therefor
policies providing at least comparable coverage
containing terms and conditions no less favorable
than those in effect on the date hereof; provided,
however that in no event shall Buyer be required to
expend more than 250% of the current amount expended
by Seller (the "INSURANCE AMOUNT") to maintain or
procure such directors' and officers' liability
insurance coverage; provided, further that if Buyer
is unable to maintain or obtain the insurance called
for by this Section 6.06(c), Buyer shall obtain as
much comparable insurance as, in the good faith
judgment of the Surviving Corporation's board, is
available for the Insurance Amount.
(d) Any Indemnified Party wishing to claim
indemnification under Section 6.06(a), upon learning
of any claim, action, suit, proceeding or
investigation described above, shall promptly notify
Buyer thereof; provided that the failure so to notify
shall not affect the obligations of Buyer under
Section 6.06(a) unless and to the extent that Buyer
is actually and materially prejudiced as a result of
such failure.
(e) The provisions of this Section 6.06 shall survive
consummation of the Merger and are intended to be for
the benefit of, and will be enforceable
60
by, each indemnified party, his or her heirs and his
or her representatives. The Surviving Corporation
shall pay (as incurred) all expenses, including
reasonable expenses of counsel, that an Indemnified
Party may incur in enforcing the indemnity and other
obligations provided for in this Section 6.06.
6.07. ELECTION OF A SELLER DIRECTOR TO BOARD OF DIRECTORS;
ADVISORY BOARD
(a) Buyer shall, and shall cause the board of directors
of WB Sub, to appoint (i) one of the current
directors of Seller to the Board of Directors of
Buyer and (ii) one of the current directors of Seller
to the Board of Directors of WB Sub at the first
meeting of such board held after the Effective Time.
The appointee to the Board of Directors of Buyer
shall serve until the next meeting of the
shareholders of Buyer and Buyer shall include such
person on the list of nominees for which the Board of
Directors shall solicit proxies at such meeting and
subsequent meetings until such appointee shall have
served a full three year term. Such appointee to the
Board of Directors of WB Sub shall hold such position
for WB Sub for at least three years after the
effective date of such appointment, unless such
person earlier resigns or is removed for cause.
(b) Buyer shall cause WB Sub to (i) create an advisory
board for the Cincinnati market after the Effective
Time, (ii) appoint each then current director of
Seller to such advisory board, (iii) maintain such
advisory board as so composed for at least one year
after the Effective Time, and (iv) provide such
advisory board members with compensation equal, on an
annual basis, to that received by them in the fiscal
year ended September 30, 2004 for their service on
the Board of Directors of Seller. Without limiting
the generality of the foregoing, any Director of
Seller who did not receive director fees from Seller
shall receive advisory board fees from Buyer provided
such director is not then an employee of Buyer or
Buyer Sub.
6.08. OPERATION OF BUSINESS
Buyer's business, and the business of each of the Buyer
Subsidiaries, will be conducted only in the ordinary and usual course consistent
with past practice. Without the written consent of Seller which consent will not
be unreasonably withheld, Buyer shall not, and shall cause each of the Buyer
Subsidiaries not to, take any action which would be expected to have,
individually or in the aggregate, a material adverse effect on Buyer or on the
Surviving Corporation or except, in each case, as may be required by applicable
law or regulation.
ARTICLE SEVEN
FURTHER OBLIGATIONS OF THE PARTIES
7.01. CONFIDENTIALITY
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Except for the use of information in connection with the
Registration Statement described in Section 7.06 hereof and any other
governmental filings required in order to complete the transactions contemplated
by this Agreement, all information (collectively, the "INFORMATION") received by
each of Buyer and Seller, and by the directors, officers, employees, advisors
and representatives of Buyer and Seller and their respective Subsidiaries (the
"REPRESENTATIVES") pursuant to the terms of this Agreement, shall be kept in
strictest confidence; provided that, subsequent to the filing of the
Registration Statement with the SEC, this Section 7.01 shall not apply to
information included in the Registration Statement or to be included in the
Proxy Statement/Prospectus to be sent to the shareholders of Seller under
Section 7.06. Seller and Buyer agree that the Information will be used only for
the purpose of completing the transactions contemplated by this Agreement.
Seller and Buyer shall, and shall cause their respective Representatives to,
hold the Information in strictest confidence and not use, and not disclose
directly or indirectly any of such Information except when, after and to the
extent such Information (i) is or becomes generally available to the public
other than through the failure of Seller or Buyer to fulfill its obligations
hereunder, (ii) was already known to the party receiving the Information on a
nonconfidential basis prior to the disclosure or (iii) is subsequently disclosed
to the party receiving the Information on a nonconfidential basis by a third
party having no obligation of confidentiality to the party disclosing the
Information. In the event the transactions contemplated by this Agreement are
not consummated, Seller and Buyer agree to return promptly all copies of the
Information provided to the other
7.02. NECESSARY FURTHER ACTION
Each of Seller, WI Sub, WB Sub and Buyer agrees to use its
best efforts to take, or cause to be taken, all necessary actions and execute
all additional documents, agreements and instruments required to consummate the
transactions contemplated in this Agreement.
7.03. COOPERATIVE ACTION
Subject to the terms and conditions of this Agreement, each of
Seller, WI Sub, WB Sub and Buyer agrees to use its best efforts to take, or
cause to be taken, all further actions and execute all additional documents,
agreements and instruments which may be reasonably required, in the opinion of
counsel for Seller and WI Sub and counsel for Buyer and WB Sub, to satisfy all
legal requirements of the States of West Virginia and Ohio and the United
States, so that this Agreement and the transactions contemplated hereby will
become effective as promptly as practicable.
7.04. SATISFACTION OF CONDITIONS
Each of Buyer, WB Sub, Seller and WI Sub shall use its best
efforts to satisfy all of the conditions to this Agreement and to cause the
consummation of the transactions described in this Agreement, including making
all applications, notices and filings with Governmental Authorities and
Regulatory Authorities and taking all steps to secure promptly all consents,
rulings and approvals of Governmental Authorities and Regulatory Authorities
which are necessary for the performance by each party of each of its obligations
under this Agreement and the transactions contemplated hereby.
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7.05. PRESS RELEASES
None of Buyer, WB Sub, Seller or WI Sub shall make any press
release or other public announcement concerning the transactions contemplated by
this Agreement without the consent of the other parties hereto as to the form
and contents of such press release or public announcement, except to the extent
that such press release or public announcement may be required by law or Nasdaq
rules or AMEX rules to be made before such consent can be obtained.
7.06. REGISTRATION STATEMENTS; PROXY STATEMENT;
SHAREHOLDERS' MEETING
(a) As promptly as reasonably practical following the
date hereof, Buyer shall prepare, in consultation
with Seller and with Seller's cooperation, mutually
acceptable proxy material which shall constitute the
proxy statement/prospectus relating to the matters to
be submitted to the Seller shareholders at the
Seller's shareholders meeting (such proxy
statement/prospectus and all amendments or
supplements thereto, the "PROXY
STATEMENT/PROSPECTUS"), and Buyer shall file with the
SEC a registration statement on Form S-4 with respect
to the issuance of Buyer Shares in the Merger (such
registration statement and all amendments or
supplements thereto, the "REGISTRATION STATEMENT").
Each of Seller and Buyer agrees to use all
commercially reasonable efforts to cause the
Registration Statement including the Proxy
Statement/Prospectus to be declared effective under
the Securities Act as promptly as reasonably
practicable after the filing thereof. Buyer also
agrees to use all reasonable efforts to obtain, prior
to the effective date of the Registration Statement,
all necessary state securities law or "Blue Sky"
permits and approvals required to carry out the
transactions contemplated by this Agreement. Seller
agrees to promptly furnish to Buyer all information
concerning Seller, the Seller Subsidiaries and the
Officers, Directors and shareholders of Seller and
the Seller Subsidiaries as Buyer reasonably may
request in connection with the foregoing. Each of
Seller and Buyer shall promptly notify the other upon
the receipt of any comments from the SEC or its staff
or any request from the SEC or its staff for
amendments or supplements to the Registration
Statement or the Proxy Statement/Prospectus and shall
promptly provide the other with copies of all
correspondence between it and its representatives, on
the one hand, and the SEC and its staff, on the other
hand. Notwithstanding the foregoing, prior to filing
the Registration Statement (or any amendment or
supplement thereto) or filing or mailing the Proxy
Statement/Prospectus (or any amendment or supplement
thereto) or responding to any comments of the SEC
with respect thereto, each of Seller and Buyer, as
the case may be, (i) shall provide the other party
with a reasonable opportunity to review and comment
on such document or response, (ii) shall include in
such document or response all comments reasonably
proposed by such other party, and (iii) shall not
file or mail such document or respond to the
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SEC prior to receiving such other's approval, which
approval shall not be withheld, conditioned or
delayed unreasonably.
(b) Each of Seller and Buyer agrees, as to itself and
its respective Seller Subsidiaries or Buyer
Subsidiaries, that none of the information supplied
or to be supplied by it for inclusion or
incorporation by reference in (i) the Registration
Statement will, at the time the Registration
Statement and each amendment or supplement thereto,
if any, is filed with the SEC and at the time the
Registration Statement becomes effective under the
Securities Act, contain any untrue statement of a
material fact or omit to state any material fact
required to be stated therein or necessary to make
the statements therein in light of the circumstances
under which they were made, not misleading, and (ii)
the Proxy Statement/Prospectus and any amendment or
supplement thereto will, as of the date such Proxy
Statement/Prospectus is mailed to shareholders of
Seller and up to and including the date of the
meeting of Seller's shareholders to which such Proxy
Statement/Prospectus relates, contain any untrue
statement of a material fact or omit to state any
material fact required to be stated therein or
necessary to make the statements therein in light of
the circumstances under where they were made not
misleading.
(c) Each of Seller and Buyer agrees, if it shall become
aware prior to the Effective Time of any information
furnished by it that would cause any of the
statements in the Registration Statement and the
Proxy Statement/Prospectus to be false or misleading
with respect to any material fact, or to omit to
state any material fact necessary to make the
statements therein not false or misleading, to
promptly inform the other party thereof and to take
the necessary steps to correct the Registration
Statement and the Proxy Statement/Prospectus.
(d) Buyer agrees to advise Seller, promptly after Buyer
receives notice thereof, of the time when the
Registration Statement has become effective or any
supplement or amendment has been filed, of the
issuance of any stop order or the suspension of the
qualification of Buyer Shares for offering or sale in
any jurisdiction, of the initiation or threat of any
proceeding for any such purpose, or of any request by
the SEC for the amendment or supplement of the
Registration Statement or for additional information.
(e) Seller shall, as promptly as practicable following
the effective date of the Registration Statement,
establish a record date for, duly call, give notice
of, convene and hold a meeting of its shareholders
(the "SELLER MEETING") for the purpose of adopting
this Agreement and approving the transactions
contemplated hereby, regardless of whether the Board
of Directors of Seller determines at any time that
this Agreement or the Merger is no longer advisable
or recommends that the shareholders of Seller reject
this Agreement or the Merger. Seller shall cause the
Seller Meeting to be held
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as promptly as practicable following the
effectiveness of the Registration Statement, and in
any event not later than 60 days after the
effectiveness of the Registration Statement. Seller
shall, through its Board of Directors, recommend to
its shareholders that they adopt this Agreement, and
shall include such recommendation in the Proxy
Statement/Prospectus, in each case subject to the
fiduciary duties of Seller's Directors as provided in
Section 5.03. Without limiting the generality of the
foregoing, Seller agrees that its obligations
pursuant to this Section shall not be affected by the
commencement, public proposal, public disclosure or
communication to Seller or any other person of any
Takeover Proposal.
7.07. REGULATORY APPLICATIONS
Buyer, WB Sub and Seller and their respective subsidiaries
shall cooperate and use their respective best efforts to prepare all
documentation, to timely effect all filings and to obtain all permits, consents,
approvals and authorizations of all third parties and Governmental and
Regulatory Authorities, including, without limitation, those required to be
filed pursuant with the Federal Reserve Board, as well as pre-merger
notification forms required by the merger notification or control laws and
regulations of any applicable jurisdiction, as agreed to by the parties, in any
event which are necessary to consummate the transactions contemplated by this
Agreement. Each of Buyer and Seller shall have the right to review in advance,
and to the extent practicable, each will consult with the other, in each case
subject to applicable laws relating to the exchange of information, with respect
to, and shall be provided in advance so as to reasonably exercise its right to
review in advance, all material written information submitted to any third party
or any Governmental or Regulatory Authority in connection with the transactions
contemplated by this Agreement. In exercising the foregoing right, each of the
parties hereto agrees to act reasonably and as promptly as practicable. Each
party hereto agrees that it will consult with the other party hereto with
respect to the obtaining of all material permits, consents, approvals and
authorizations of all third parties and Governmental and Regulatory Authorities
necessary or advisable to consummate the transactions contemplated by this
Agreement and each party will keep the other apprised of the status of material
matters relating to completion of the transactions contemplated hereby. Each
party agrees, upon request, to furnish the other party with all information
concerning itself, its subsidiaries, directors, officers and shareholders and
such other matters as may be reasonably necessary or advisable in connection
with any filing, notice or application made by or on behalf of such other party
or of its Subsidiaries to any third party or Governmental or Regulatory
Authority.
7.08. COORDINATION OF DIVIDENDS
After the date of this Agreement, Seller shall coordinate with
Buyer the payment of any dividends authorized under Section 5.01(b)(iv) and the
record date and payment dates relating thereto, it being the intention of the
parties hereto that the holders of Seller Shares (who will become holders of
Buyer Shares following the Closing) shall not receive two dividends, or fail to
receive one dividend, from Seller and/or Buyer for any single calendar quarter.
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ARTICLE EIGHT
CONDITIONS PRECEDENT TO THE OBLIGATIONS OF THE PARTIES
8.01. CONDITIONS TO THE OBLIGATIONS OF BUYER AND WB SUB
The obligations of Buyer and WB Sub under this Agreement shall
be subject to the satisfaction, or written waiver by Buyer prior to the Closing
Date, of each of the following conditions precedent:
(a) The representations and warranties of Seller and WI
Sub set forth in this Agreement shall be true and
correct in all material respects as of the date of
this Agreement and as of the Closing Date as though
such representations and warranties were also made as
of the Closing Date, except that those
representations and warranties which by their terms
speak as of a specific date shall be true and correct
as of such date; and Buyer and WB Sub shall have
received a certificate, dated the Closing Date,
signed on behalf of Seller and WI Sub, by each of its
chief executive officer and chief financial officer,
to such effect.
(b) Seller shall have performed in all material respects
all of its covenants and obligations under this
Agreement to be performed by it on or prior to the
Closing Date, including those relating to the
Closing, and Buyer and WB Sub shall have received a
certificate, dated the Closing Date, signed on behalf
of Seller and WI Sub by each of its chief executive
officer and chief financial officer, to such effect.
(c) In the aggregate, an amount of less than ten percent
(10%) of the number of Buyer Shares to be issued in
the Merger shall be (i) subject to purchase as
fractional shares, and (ii) proposed to be issued to
Seller's shareholders who have perfected their
appraisal rights under Section 1701.85 of the OGCL in
connection with the transactions contemplated by this
Agreement.
(d) Buyer shall have received the written opinion of
Xxxxxxxxxxx & Xxxxxxxx ("K&L"), tax counsel to Buyer,
dated the Closing Date, to the effect that, on the
basis of facts, representations and assumptions set
forth in such opinion, the Merger will be treated for
Federal income tax purposes as a reorganization
within the meaning of Section 368(a)(1)(A) of the
Code. In rendering its opinion, K&L will require and
rely upon customary representations contained in
letters from Buyer and Seller that counsel to Buyer
reasonably deems relevant.
(e) Buyer shall have received the written opinion of
Vorys, Xxxxx, Xxxxxxx and Xxxxx, LLP, counsel to
Seller ("VSSP"), dated the Closing Date, in
substantially the form of Exhibit B hereto.
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8.02. CONDITIONS TO THE OBLIGATIONS OF SELLER
The obligations of Seller under this Agreement shall be
subject to satisfaction, or written waiver by Seller prior to the Closing Date,
of each of the following conditions precedent:
(a) The representations and warranties of Buyer and WB
Sub set forth in this Agreement shall be true and
correct in all material respects as of the date of
this Agreement and as of the Closing Date as though
such representations and warranties were also made as
of the Closing Date, except that representations and
warranties which by their terms speak as of a
specific date shall be true and correct as of such
date; and Seller shall have received a certificate,
dated the Closing Date, signed on behalf of Buyer and
WB Sub by Buyer's chief executive officer and chief
financial officer to such effect.
(b) Buyer shall have performed in all material respects
all of its covenants and obligations under this
Agreement to be performed by it on or prior to the
Closing Date, including those related to the Closing,
and Seller shall have received a certificate, dated
the Closing Date, signed on behalf of Buyer and WB
Sub by Buyer's chief executive officer and chief
financial officer to such effect.
(c) Seller shall have received the written opinion of
VSSP to Seller, dated the Closing Date, to the effect
that, on the basis of facts, representations and
assumptions set forth in such opinion, the Merger
will be treated for Federal income tax purposes as a
reorganization within the meaning of Section
368(a)(1)(A) of the Code. In rendering its opinion,
VSSP will require and rely upon customary
representations contained in letters from Buyer and
Seller that counsel to Buyer reasonably deems
relevant.
(d) Seller shall have received the written opinion of
Phillips, Gardill, Xxxxxx & Xxxxxxxx, PLLC,
transaction counsel to Buyer and WB Sub, dated the
Closing Date, in substantially the form of Exhibit C
hereto.
(e) Buyer shall have obtained the consent or approval of
each person (other than Governmental and Regulatory
Authorities) whose consent or approval shall be
required in connection with the transactions
contemplated hereby under any loan or credit
agreement, note, mortgage, indenture, lease, license
or other agreement or instrument, except those for
which failure to obtain such consents and approvals
would not, individually or in the aggregate, have a
material adverse effect, after the Effective Time, on
the Surviving Corporation.
(f) Seller shall have received from Seller's Financial
Advisor an opinion reasonably acceptable to Seller
dated as of the date of the Proxy
Statement/Prospectus, to the effect that the Merger
Consideration is fair to the holders of the Seller
Shares, from a financial point of view.
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8.03. MUTUAL CONDITIONS
The obligations of Seller and Buyer under this Agreement shall
be subject to the satisfaction, or written waiver by Buyer and Seller prior to
the Closing Date, of each of the following conditions precedent:
(a) The shareholders of Seller shall have duly adopted
this Agreement by the required vote.
(b) All approvals of Governmental Authorities and
Regulatory Authorities required to consummate the
transactions contemplated by this Agreement shall
have been obtained and shall remain in full force and
effect and all statutory waiting periods in respect
thereof shall have expired and no such approvals or
statute, rule or order shall contain any conditions,
restrictions or requirements which would reasonably
be expected to have a material adverse effect after
the Effective Time on the present or prospective
consolidated financial condition, business or
operating results of the Surviving Corporation.
(c) No temporary restraining order, preliminary or
permanent injunction or other order issued by a court
of competent jurisdiction or other legal restraint or
prohibition preventing the consummation of the Merger
shall be in effect. No Governmental or Regulatory
Authority of competent jurisdiction shall have
enacted, issued, promulgated, enforced, deemed
applicable or entered any statute, rule, regulation,
judgment, decree, injunction or other order
prohibiting consummation of the transactions
contemplated by this Agreement or making the Merger
illegal.
(d) The Registration Statement shall have become
effective under the Securities Act and no stop-order
or similar restraining order suspending the
effectiveness of the Registration Statement shall
have been issued and no proceeding for that purpose
shall have been initiated by the SEC.
(e) Buyer shall have received all state securities and
"blue sky" permits and other authorizations and
approvals necessary to consummate the Merger and the
transactions contemplated hereby and no order
restraining the ability of Buyer to issue Buyer
Shares pursuant to the Merger shall have been issued
and no proceedings for that purpose shall have been
initiated or threatened by any state securities
administrator.
(f) The Buyer Shares to be issued in the Merger shall
have been approved for listing on Nasdaq subject to
official notice of issuance.
(g) Each of the parties shall be satisfied with the
deductibility under the provisions of Section 280G of
the Code of the payments to be made to Xxxxxx X.
Xxxxxx, Xxxxxxx X. Xxxxxx and Xxxx X. Xxxxx,
executive officers of Seller, in connection with the
transactions contemplated hereby.
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(h) Each of Xxxxxx X. Xxxxxx and Xxxxxxx X. Xxxxxx shall
have signed an employment agreement with Buyer and/or
WB Sub in substantially the form of the employment
agreements attached to the Buyer Disclosure as
Exhibit 8.03(h).
ARTICLE NINE
CLOSING
9.01. CLOSING
The closing (the "CLOSING") of the transactions contemplated
by this Agreement shall be held at Seller's main office in Cincinnati, Ohio,
commencing at 9:00 a.m. local time, on a date mutually acceptable to Buyer and
Seller, which date shall not be earlier than the third business day to occur
after the last of the conditions set forth in Article Eight shall have been
satisfied or waived in accordance with the terms of this Agreement (excluding
conditions that, by their terms, cannot be satisfied until the Closing Date) or
later than the last business day of the month in which such third business day
occurs; provided, no such election shall cause the Closing to occur on a date
after that specified in Section 11.01(b)(i) of this Agreement or after the date
or dates on which any Governmental or Regulatory Authority approval or any
extension thereof expires, and provided further, that if Seller has delivered a
termination notice pursuant to the provisions of Section 11.01(d)(v), the
Closing Date shall be the third business day following delivery of the Top-up
Notice, if any. The date of the Closing is sometimes herein called the "CLOSING
DATE."
9.02. CLOSING TRANSACTIONS REQUIRED OF BUYER
At the Closing, Buyer shall cause all of the following to be
delivered to Seller:
(a) The certificates of Buyer contemplated by Section
8.02(a) and (b) of this Agreement.
(b) Copies of resolutions adopted by the directors of
Buyer and WB Sub, approving and adopting this
Agreement and authorizing the consummation of the
transactions described herein, accompanied by a
certificate of the secretary or assistant secretary
of Buyer and WB Sub, as applicable, dated as of the
Closing Date, and certifying (i) the date and manner
of adoption of each such resolution; and (ii) that
each such resolution is in full force and effect,
without amendment or repeal, as of the Closing Date.
(c) The opinions of counsel to Buyer and WB Sub
contemplated by Section 8.02 of this Agreement.
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9.03. CLOSING TRANSACTIONS REQUIRED OF SELLER
At the Closing, Seller shall cause all of the following to be
delivered to Buyer:
(a) Certificate and Articles of merger duly executed by
the Surviving Corporation in accordance with the
WVBCA and OGCL and in appropriate form for filing,
respectively, with the Secretaries of State of West
Virginia and Ohio.
(b) The certificates of Seller contemplated by Sections
8.01(a) and (b) of this Agreement.
(c) Copies of all resolutions adopted by the directors
and the shareholders of Seller and WI Sub approving
and adopting this Agreement and authorizing the
consummation of the transactions described herein,
accompanied by a certificate of the secretary or the
assistant secretary of Seller, dated as of the
Closing Date, and certifying (i) the date and manner
of the adoption of each such resolution; and (ii)
that each such resolution is in full force and
effect, without amendment or repeal, as of the
Closing Date.
(d) The opinions of VSSP contemplated by Section 8.01(e)
and 8.02(c) of this Agreement.
ARTICLE TEN
NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND COVENANTS
10.01. NON-SURVIVAL OF REPRESENTATIONS, WARRANTIES AND
COVENANTS
The representations, warranties and covenants of Buyer, WB
Sub, Seller, WI Sub set forth in this Agreement, or in any document delivered
pursuant to the terms hereof or in connection with the transactions contemplated
hereby, shall not survive the Closing and the consummation of the transactions
referred to herein, other than covenants which by their terms are to survive or
be performed after the Effective Time (including, without limitation, those set
forth in Article Two, Sections 6.02, 6.06, 6.07, 7.01, 7.05 and 7.06, this
Article Ten and Article Twelve); except that no such representations, warranties
or covenants shall be deemed to be terminated or extinguished so as to deprive
the Surviving Corporation (or any director, officer or controlling person
thereof) of any defense in law or equity which otherwise would be available
against the claims of any person, including, without limitation, any shareholder
or former shareholder of either Seller or Buyer.
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ARTICLE ELEVEN
TERMINATION
11.01. TERMINATION
This Agreement may be terminated, and the Merger may be
abandoned, at any time prior to the Effective Time, whether prior to or after
this Agreement has been adopted by the shareholders of Seller:
(a) By mutual written agreement of Seller and Buyer duly
authorized by action taken by or on behalf of their
respective Boards of Directors;
(b) By either Seller or Buyer upon written notification
to the non-terminating party by the terminating
party:
(i) at any time after March 31, 2005, if the
Merger shall not have been consummated on or
prior to such date and such failure to
consummate the Merger is not caused by a
breach of this Agreement by the terminating
party;
(ii) if the shareholders of Seller shall not have
adopted this Agreement by reason of the
failure to obtain the requisite vote upon a
vote held at a Seller Meeting, or any
adjournment thereof; or
(iii) if the approval of any Governmental or
Regulatory Authority required for
consummation of the Merger and the other
transactions contemplated by this Agreement
shall have been denied by final
non-appealable action of such Governmental
or Regulatory Authority.
(c) By Buyer by providing written notice to Seller:
(i) if prior to the Closing Date, any
representation and warranty of Seller shall
have become untrue such that the condition
set forth at Section 8.01(a) would not be
satisfied and which breach has not been
cured within ten business days following
receipt by Seller of written notice of
breach or is incapable of being cured during
such time period; or
(ii) if Seller shall have failed to comply in any
material respect with any covenant or
agreement on the part of Seller contained in
this Agreement required to be complied with
prior to the date of such termination, which
failure to comply shall not have been cured
within ten business days following receipt
by Seller of written notice of such failure
to comply or is incapable of being cured
during such time period.
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(d) By Seller by providing written notice to Buyer:
(i) if prior to the Closing Date, any
representation and warranty of Buyer or WB
Sub shall have become untrue such that the
condition set forth at Section 8.02(a) would
not be satisfied and which breach has not
been cured within ten business days
following receipt by Buyer of written notice
of breach or is incapable of being cured
during such time period;
(ii) if Buyer or WB Sub shall have failed to
comply in any material respect with any
covenant or agreement on the part of Buyer
or WB Sub contained in this Agreement
required to be complied with prior to the
date of such termination, which failure to
comply shall not have been cured within ten
business days following receipt by Buyer of
written notice of such failure to comply or
is incapable of being cured during such time
period;
(iii) by Seller following receipt of a Superior
Proposal subject to compliance with the
terms and conditions of Section 5.03(b); and
(iv) this Agreement may be terminated any time
prior to Closing by the Board of Directors
of Seller at any time during the five-day
period ending two days before the Effective
Time (the "WALKAWAY RIGHT"), if:
(1) the Average Closing Price (as
defined below) shall be less than
the product of 0.80 and the Starting
Price (as defined below); and
(2) (a) the number obtained by dividing
the Average Closing Price (as
defined below) by the Starting Price
(such number being referred to
herein as the "BUYER RATIO") shall
be less than (b) the number obtained
by dividing the Index Price (as
defined below) on the Walkaway
Determination Date by the Index
Price on the Starting Date (as
defined below) and subtracting 0.15
from such quotient;
subject to the following. If Seller elects
to exercise its termination right pursuant
to the immediately preceding sentence, it
shall give prompt written notice to Buyer;
provided that such notice of election to
terminate may be withdrawn by Seller at any
time within the aforementioned five-day
period. During the five-day period
commencing with its receipt of such notice,
Buyer shall have the option of increasing
the Exchange Ratio in a manner such that the
conditions set forth in clauses (1) and (2)
above shall be deemed not to exist (the
"TOP-UP Notice). For purposes hereof, the
condition set forth in clause (1) above
shall be deemed not to
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exist if the Exchange Ratio and/or the Per
Share Cash Consideration is increased so
that the Per Share Consideration (as defined
below) after such increase is not less than
the Per Share Consideration that would have
been in effect if the condition set forth in
clause (1) above did not exist. For purposes
hereof, the condition set forth in clause
(2) above shall be deemed not to exist if
the Exchange Ratio is increased so that the
Per Share Consideration after such increase
is not less than the Per Share Consideration
that would have been in effect if the
condition set forth in clause (2) above did
not exist. If Buyer makes this election,
within such five-day period, it shall give
prompt written notice to Seller of such
election and the revised Exchange Ratio,
whereupon no termination shall have occurred
pursuant to this Section 11.01(d)(v) and
this Agreement shall remain in effect in
accordance with its terms (except as the
Exchange Ratio shall have been so modified),
and any references in this Agreement to
"Exchange Ratio" shall thereafter be deemed
to refer to the Exchange Ratio after giving
effect to any adjustment made pursuant to
this Section 11.01(d)(v). For purposes of
this Section 11.01(d)(v), the following
terms shall have the following meanings:
"AVERAGE CLOSING PRICE" means the
average of the last reported sale
prices per share of the Buyer Shares
as reported on the Nasdaq (as
reported in The Wall Street Journal
or, if not reported therein, in
another mutually agreed upon
authoritative source) for the 20
consecutive trading days ending
seven calendar days before the
Effective Time.
"WALKAWAY DETERMINATION DATE" shall
mean the date which is seven
calendar days prior to the Effective
Time.
"INDEX PRICE" on a given date means
the closing value of the Nasdaq Bank
Index as reported on Xxxxxxxxx.xxx,
or if not reported therein, in
another mutually agreed upon
authoritative source.
"PER SHARE CONSIDERATION" shall mean
the Exchange Ratio multiplied by the
Average Closing Price.
"STARTING PRICE" shall mean last
reported sale prices per share of
Buyer Common Stock as reported on
the Nasdaq (as reported in The Wall
Street Journal or, if not reported
therein, in another mutually agreed
upon authoritative source) on the
Starting Date.
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"STARTING DATE" shall mean the last
full trading day prior to the
announcement by press release of the
Merger or, if such announcement
occurs after the close of trading on
any trading day, such trading day.
If Buyer declares or effects a stock
dividend, reclassification,
recapitalization, split-up, combination,
non-acquisitive exchange of shares or
similar transaction between the Starting
Date and the Walkaway Determination Date (or
establishes a record date in respect
thereof), the prices for the common stock of
Buyer shall be appropriately adjusted for
the purposes of applying this Section
11.01(d)(v).
11.02. EFFECT OF TERMINATION
(a) If this Agreement is validly terminated by either
Seller or Buyer pursuant to Section 11.01, this
Agreement will forthwith become null and void and
there will be no liability or obligation on the part
of either Seller or Buyer, except (i) that the
provisions of Sections 5.03, 7.05, 7.06 and 12.07 and
this Article XI will continue to apply following any
such termination, (ii) that nothing contained herein
shall relieve any party hereto from liability for
breach of its representations, warranties, covenants
or agreements contained in this Agreement and (iii)
as provided in paragraph (b) below.
(b) Seller shall promptly pay to Buyer a termination fee
of $3,000,000 in immediately available federal funds
if Seller or WI Sub enters into any agreement in
respect of an Acquisition Proposal prior to the
termination of this Agreement or after the
termination of this Agreement pursuant to Section
11.01(d)(iii) and before the date that is twelve
months after the date of termination of this
Agreement.
ARTICLE TWELVE
MISCELLANEOUS
12.01. NOTICES
All notices, requests, demands and other communications
required or permitted to be given under this Agreement shall be given in writing
and shall be deemed to have been duly given (a) on the date of delivery if
delivered by hand or by telecopy, upon confirmation of receipt, (b) on the first
business day following the date of dispatch if delivered by a recognized
next-day courier service, or (c) on the third business day following the date of
mailing if sent by certified mail, postage prepaid, return receipt requested.
All notices thereunder shall be delivered to the following addresses:
74
If to Seller, to:
WI Financial Corporation
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
Attn: Chief Executive Officer
Facsimile Number: (000) 000-0000
with a copy to:
Vorys, Xxxxx, Xxxxxxx and Xxxxx LLP
00 Xxxx Xxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxx
Facsimile Number: (000) 000-0000
If to Buyer, to:
WB, Inc.
0 Xxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Chief Executive Officer
Facsimile Number: (000) 000-0000
with a copy to:
Phillips, Gardill, Xxxxxx & Xxxxxxxx, PLLC
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxx X. Xxxxxxx
Facsimile Number: (000) 000-0000
Any party to this Agreement may, by notice given in accordance with this Section
12.01, designate a new address for notices, requests, demands and other
communications to such party.
12.02. COUNTERPARTS
This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be a duplicate original, but all of which taken
together shall be deemed to constitute a single instrument.
12.03. ENTIRE AGREEMENT; NO THIRD-PARTY RIGHTS
This Agreement and the related Letter of Confidentiality dated June 3, 2004 as
accepted by Seller and Buyer (the "LETTER OF CONFIDENTIALITY") (a) constitute
the entire agreement, and supersede all prior agreements and understandings,
both written and oral, among the parties with respect to the subject matter of
this Agreement and the Letter of Confidentiality and (b) except for the
provisions of Article Two, Sections 6.02(a), 6.02(b), 6.06, 6.07(b) and 7.01
75
of this Agreement, are not intended to confer upon any person other than the
parties hereto and thereto (and their respective successors and assigns) any
rights or remedies.
12.04. SUCCESSORS AND ASSIGNS
This Agreement shall inure to the benefit of and be binding
upon the respective successors and assigns (including successive, as well as
immediate, successors and assigns) of the parties hereto. This Agreement may not
be assigned by either party hereto without the prior written consent of the
other party.
12.05. CAPTIONS
The captions contained in this Agreement are included only for
convenience of reference and do not define, limit, explain or modify this
Agreement or its interpretation, construction or meaning and are in no way to be
construed as part of this Agreement.
12.06. GOVERNING LAW
This Agreement shall be governed by, and construed in
accordance with, the laws of the State of West Virginia without giving effect to
principles of conflicts or choice of laws (except to the extent that mandatory
provisions of Federal law are applicable).
12.07. PAYMENT OF FEES AND EXPENSES
(a) Except as otherwise agreed in writing, each party hereto
shall pay all costs and expenses, including legal and accounting fees, and all
expenses relating to its performance of, and compliance with, its undertakings
herein. All fees to be paid to Governmental and Regulatory Authorities in
connection with the transactions contemplated by this Agreement shall be borne
by Buyer.
(b) Notwithstanding the provisions of subsection (a) above, if
this Agreement is terminated as a result of the failure of the parties to obtain
the approval of the Federal Reserve Board under the BHC Act, then Buyer shall
promptly reimburse Seller for Seller's documented out-of-pocket costs and
expenses in connection with this Agreement and the transactions contemplated
hereby.
(c) Each of the parties acknowledges that the agreements
contained in this Section are an integral part of the transactions contemplated
by this Agreement, and that, without these agreements, the other party would not
enter into this Agreement; accordingly, if either of the parties fails to pay in
a timely manner the amounts due pursuant to this Section and, in order to obtain
such payment, the other party makes a claim that results in a judgment against
the first party for the amounts set forth in this Section, the first party shall
pay to the other party its costs and expenses (including attorneys' fees and
expenses) in connection with such suit, together with interest on the applicable
amounts at a rate per annum equal to three-month LIBOR (as reported in The Wall
Street Journal (Northeast edition) or, if not reported therein, in another
authoritative source selected by the party to which payment is due) on the date
such payment was required to be made (or if no quotation for three-month LIBOR
is available for such date, on the next
76
preceding date for which such a quotation is available) plus 200 basis. Payment
of the fees or the reimbursement of expenses described in this Section shall not
be in lieu of damages incurred in the event of intentional breach of the
provisions of this Section.
12.08. AMENDMENT
From time to time and at any time prior to the Effective Time,
this Agreement may be amended only by an agreement in writing executed in the
same manner as this Agreement, after authorization of such action by the Boards
of Directors of the Constituent Corporations; except that after the Seller
Meeting, this Agreement may not be amended if it would violate the OGCL or the
federal securities laws.
12.09. WAIVER
The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power or privilege under this Agreement or the
documents referred to in this Agreement will operate as a waiver of such right,
power or privilege, and no single or partial exercise of any such right, power
or privilege will preclude any other or further exercise of such right, power or
privilege or the exercise of any other right, power or privilege.
12.10. DISCLOSURE SCHEDULES
In the event of any inconsistency between the statements in
the body of this Agreement and those in the Seller Disclosure Schedule (other
than an exception expressly set forth as such in the Seller Disclosure Schedule
with respect to a specifically identified representation or warranty), the
statements in the body of this Agreement will control.
12.11. WAIVER OF JURY TRIAL
Each of the parties hereto irrevocably waives any and all
right to trial by jury in any legal proceeding arising out of or related to this
Agreement or the transactions contemplated hereby.
12.12. SEVERABILITY
If any provision of this Agreement is held invalid or
unenforceable by any court of competent jurisdiction, the other provisions of
this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
77
IN WITNESS WHEREOF, this Agreement and Plan of Merger has been
executed on behalf of Buyer, WB Sub and Seller to be effective as of the date
set forth in the first paragraph above.
ATTEST: WESBANCO, INC.
/s/ Xxxx X. Xxxxx, Xx. By: /s/ Xxxx X. Xxxxxxx
-------------------------------------------- ---------------------------------------------------------
Printed Name: Xxxx X. Xxxxxxx
Title: President and Chief Executive Officer
ATTEST: WESBANCO BANK, INC.
/s/ Xxxx X. Xxxxx, Xx. By: /s/ Xxxx X. Xxxxxxx
-------------------------------------------- ---------------------------------------------------------
Printed Name: Xxxx X. Xxxxxxx
Title: President and Chief Executive Officer
ATTEST: XXXXXX FINANCIAL CORPORATION
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------- ----------------------------------------------------------
Printed Name: Xxxxxx X. Xxxxxx
Title: President and Chief Executive Officer
ATTEST: THE XXXXXX SAVINGS AND LOAN CO.
/s/ Xxxx X. Xxxxx By: /s/ Xxxxxx X. Xxxxxx
-------------------------------------------- ----------------------------------------------------------
Printed Name: Xxxxxx X. Xxxxxx
Title: President
78
EXHIBIT A
________, 200_
WB, Inc.
0 Xxxx Xxxxx
Xxxxxxxx, XX 00000
Attn: Chief Executive Officer
Gentlemen:
I have been advised that, as of the date hereof, I may be deemed to be
an "affiliate" of WI Financial Corporation, an Ohio corporation ("WFC"), as the
term "affiliate" is (i) defined for purposes of paragraphs (c) and (d) of Rule
145 of the Rules and Regulations (the "Rules and Regulations") of the Securities
and Exchange Commission (the "Commission") under the Securities Act of 1933, as
amended (the "Securities Act"), and/or (ii) used in and for purposes of
Accounting Series, Releases 130 and 135, as amended, of the Commission. Pursuant
to the terms of the Agreement and Plan of Merger, dated as of August ___, 2004
(the "Merger Agreement"), by and between WFC, WB, Inc., a West Virginia
corporation ("Buyer"), and WB Bank, Inc., a West Virginia corporation and a
wholly-owned subsidiary of Buyer ("WB Sub"), WFC will be merged (the "Merger")
with and into Buyer and the name of the surviving corporation will be WB, Inc.,
a West Virginia corporation (the "Surviving Corporation").
As used herein, "WFC Common Shares" means the shares of common stock,
without par value, of WFC, and "Buyer Shares" means the common shares, $2.0833
par value per share, of Buyer.
I represent, warrant and covenant to Buyer that if I receive any Buyer
Shares as a result of the Merger:
A. I shall not make any sale, transfer or other disposition of
any Buyer Shares (including any securities which may be paid as a
dividend or otherwise distributed thereon or received pursuant to the
exercise of stock options) acquired by me in the Merger in violation of
the 1933 Act or the Rules and Regulations.
B. I have carefully read this letter and the Agreement and
discussed their requirements and other applicable limitations upon my
ability to sell, transfer or otherwise dispose of Buyer Shares
(including any securities which may be paid as a dividend or otherwise
distributed thereon or received pursuant to the exercise of stock
options) to the extent I felt necessary, with my counsel or counsel for
WFC.
C. I have been advised that the issuance of Buyer Shares to me
pursuant to the Merger has been or will be registered with the
Commission under the 1933 Act on a Registration Statement on Form S-4.
However, I have also been advised that, because at the time the Merger
will be submitted for a vote of the shareholders of WFC, I may be
1
deemed to be an affiliate of WFC, the distribution by me of any Buyer
Shares acquired by me in the Merger will not be registered under the
1933 Act and that I may not sell, transfer or otherwise dispose of any
Buyer Shares (including any securities which may be paid as a dividend
or otherwise distributed thereon or received pursuant to the exercise
of stock options) acquired by me in the Merger unless (i) such sale,
transfer or other disposition has been registered under the 1933 Act,
(ii) such sale, transfer or other disposition is made in conformity
with the volume and other limitations of Rule 145 promulgated by the
Commission under the 1933 Act, or (iii) in the opinion of counsel
reasonably acceptable to the Surviving Corporation, such sale, transfer
or other disposition is otherwise exempt from registration under the
1933 Act.
D. I understand that Buyer is under no obligation to register
under the 1933 Act the sale, transfer or other disposition by me or on
my behalf of any Buyer Shares acquired by me in the Merger or to take
any other action necessary in order to make an exemption from such
registration available.
E. I also understand that stop transfer instructions will be
given to Buyer's transfer agent with respect to Buyer Shares (including
any securities which may be paid as a dividend or otherwise distributed
thereon or received pursuant to the exercise of stock options) and that
there will be placed on the certificates for the Buyer Shares acquired
by me in the Merger, or any substitutions therefor, a legend stating in
substance:
"The common shares represented by this certificate were issued
in a transaction to which Rule 145 promulgated under the
Securities Act of 1933 applies. The common shares represented
by this certificate may only be transferred in accordance with
the terms of an agreement dated _________, 2004 between the
registered holder hereof and the issuer of the certificate, a
copy of which agreement will be mailed to the holder hereof
without charge within five days after receipt of written
request therefor."
F. I also understand that unless the transfer by me of my
Buyer Shares has been registered under the 1933 Act or is a sale made
in conformity with the provisions of Rule 145, the Surviving
Corporation reserves the right to put the following legend on the
certificates issued to my transferee:
"The common shares represented by this certificate have not
been registered under the Securities Act of 1933 and were
acquired from a person who received such common shares in a
transaction to which Rule 145 promulgated under the Securities
Act of 1933 applies. The common shares may not be sold,
pledged or otherwise transferred except in accordance with an
exemption from the registration requirements of the Securities
Act of 1933."
It is understood and agreed that the legends set forth in paragraphs E and F
above shall be removed by delivery of substitute certificates without such
legends if the undersigned shall have delivered to the Surviving Corporation a
copy of a letter from the staff of the Commission, or an
2
opinion of counsel in form and substance reasonably satisfactory to the
Surviving Corporation, to the effect that such legends are not required for
purposes of the 1933 Act.
Very truly yours,
________________________________
Printed Name:
___________________
Accepted this ___ day of
________, 2004
WB, INC.
By:_________________________________
Printed Name:_______________________
Title:______________________________
3
EXHIBIT B
REQUIREMENTS FOR OPINION OF
COUNSEL TO SELLER
1. Seller is a corporation validly existing and in good standing
under the laws of the State of Ohio and WI Sub is a savings and loan association
validly existing and in good standing under the laws of the State of Ohio.
2. Each of Seller and WI Sub has all requisite corporate power
and authority to enter into and perform its obligations under the Agreement.
3. The Agreement has been duly authorized, executed and delivered
by each of Seller and WI Sub.
4. The Agreement is enforceable against Seller in accordance with
its terms, except as the enforceability may be limited (i) by bankruptcy,
insolvency, reorganization, moratorium, conservatorship, receivership or other
similar laws now or hereafter in effect relating to or affecting the enforcement
of creditors' rights generally or the rights of creditors of savings
institutions and their holding companies, (ii) by general equitable principles,
regardless of whether such enforceability is considered in a proceeding in
equity or at law, (iii) by laws relating to the safety and soundness of insured
depository institutions, or (iv) by applicable law or public policy with respect
to the indemnification and/or contribution provisions contained therein,
including, without limitation, the provision of Sections 23A and 23B of the
Federal Reserve Act.
5. The execution and delivery by Seller and WI Sub of the Agreement and
the performance by Seller and WI Sub of their obligations thereunder will not
violate the Articles of Incorporation or Code of Regulations of Seller or the
Articles of Incorporation or Constitution of WI Sub. To our knowledge, neither
Seller nor WI Sub is a party to, nor bound by, any judgment, injunction or
decree or any court of governmental authority which would restrict or interfere
in any material respect with the performance by either of them of their
obligations under the Agreement.
The opinion will contain such assumptions, qualifications and
limitations as are consistent with firm practice, including the following:
(i) The assumption of (a) the genuineness of all signatures (other than
the signatures on the Agreement on behalf of Seller and WI Sub) and the
authenticity of all documents submitted as originals, the conformity to
original documents of documents submitted as certified or photostatic
copies and the authenticity of the originals of such latter documents;
(b) the due completion, execution, and acknowledgment as indicated
thereon, and delivery of all documents and instruments and of the
consideration recited therein; (c) each party to the Agreement (other
than Seller or WI Sub) has or will have the full power, authority and
legal right under its charter and other governing documents, and
1
legislation adopted by its directors and shareholders, as appropriate,
or persons occupying similar positions in any entity which is not a
corporation to execute and perform its obligations under all documents
executed by it in connection with the transactions which are the
subject of the Agreement; (d) the legal capacity of natural persons;
and (e) the free and voluntary character of all acts.
(ii) Reliance solely upon the examinations and inquiries recited in the
opinion and upon the representations and warranties of the parties,
including Seller and WI Sub, contained in the Agreement with respect to
factual matters and factual representations made in certifications of
Seller and WI Sub officers, unless such representation or warranty
constitutes a conclusion of law covered by the opinion or knowledge to
the contrary.
(iii) Except as expressly stated in the opinion, counsel to Seller will
not have undertaken any other independent investigation to determine
the existence or absence of any facts, and no inference of knowledge
concerning such facts should be drawn. Without limiting the generality
of the foregoing, counsel shall not have examined, nor will counsel
opine, upon any provision or matter to the extent that such examination
or opinion would require a financial, mathematical or accounting
calculation or determination.
(iv) The opinions expressed in 1, 2 and 3 above will be based upon and
limited to a review of the Good Standing Certificate, the Ohio
Corporate Code, the Articles of Incorporation, the Code of Regulations,
and the Constitution of Seller and WI Sub, and the minute books of
Seller and WI Sub. The opinions will be limited to the laws of the
State of Ohio and the federal laws of the United States of America as
we are members of the Bar of the State of Ohio, and do not purport to
have expertise in, nor will express any opinion as to, the laws of any
other jurisdiction.
(v) The term "knowledge" shall refer to the actual and conscious
awareness of facts or other information of the individual attorneys who
have been actively involved in the transactions contemplated by the
Agreement or the preparation of the opinion. Counsel shall not
undertake any independent investigation or review of the matters that
are the subject of any of the opinions indicated to be to counsel's
knowledge and no inference should be drawn from such opinions that any
such investigation or review has been undertaken.
2
EXHIBIT C
REQUIREMENTS FOR OPINION OF
COUNSEL TO BUYER
1. Buyer is a corporation validly existing and in good standing
under the laws of the State of West Virginia and WB Sub is a state banking
corporation validly existing and in good standing under the laws of the State of
West Virginia.
2. Each of Buyer and WB Sub has all requisite corporate power and
authority to enter into and perform its obligations under the Agreement.
3. The Agreement has been duly authorized, executed and delivered
by each of Buyer and WB Sub.
4. The Agreement is enforceable against Buyer in accordance with
its terms, except as the enforceability may be limited (i) by bankruptcy,
insolvency, reorganization, moratorium, conservatorship, receivership or other
similar laws now or hereafter in effect relating to or affecting the enforcement
of creditors' rights generally or the rights of creditors of banking
institutions and their holding companies, (ii) by general equitable principles,
regardless of whether such enforceability is considered in a proceeding in
equity or at law, (iii) by laws relating to the safety and soundness of insured
depository institutions, or (iv) by applicable law or public policy with respect
to the indemnification and/or contribution provisions contained herein,
including, without limitation, the provision of Sections 23A and 23B of the
Federal Reserve Act.
5. The execution and delivery by Buyer and WB Sub of the
Agreement and the performance by Buyer and WB Sub of their obligations
thereunder will not violate the Articles of Incorporation or Bylaws of Buyer or
the Articles of Incorporation or Bylaws of WB Sub. To our knowledge, neither
Buyer nor WB Sub is a party to, nor bound by, any judgment, injunction or decree
of any court of governmental authority which would restrict or interfere in any
material respect with the performance by either of them of their obligations
under the Agreement.
6. The Buyer Shares to be issued in connection with the
transactions contemplated by the Agreement have been duly and validly authorized
and will, when issued and delivered in accordance with the terms of the
Agreement, be duly authorized, validly issued, fully paid and non-assessable and
subject to no preemptive rights or other encumbrances.
[The opinion will contain such assumptions, qualifications and
limitation as are consistent with firm practice, including the following:
(1) The assumption of (a) the genuineness of all signatures (other than
the signatures of the Agreement on behalf of Buyer and WB Sub) and the
authenticity of all documents submitted as originals, the conformity to
original documents of
1
documents submitted as certified or photostatic copies and the
authenticity of the originals of such latter documents; (b) the due
completion, execution, and acknowledgment as indicated thereon, and
delivery of all documents and instruments and of the consideration
recited therein; (c) each party to the Agreement (other than Buyer of
WB Sub) has or will have the full power, authority and legal right
under its charter and other governing documents, and legislation
adopted by its directors and shareholders, as appropriate, or persons
occupying similar positions in any entity which is not a corporation to
execute and perform its obligations under all documents executed by it
in connection with the transactions which are the subject of the
Agreement; (d) the legal capacity of natural persons; and (e) the free
and voluntary character of all acts.
(ii) Reliance solely upon the examination and inquiries recited in the
opinion and upon the representations and warranties of the parties,
including Buyer and WB Sub, contained in the Agreement with respect to
factual matters and factual representations made in certifications of
Buyer and WB Sub officers, unless such representation or warranty
constitutes a conclusion of law covered by the opinion or knowledge to
the contrary.
(ii) Except as expressly stated in the opinion, counsel to Buyer will
not have undertaken any other independent investigation to determine
the existence or absence of any facts, and no inference of knowledge
concerning such facts should be drawn. Without limiting the generality
of the foregoing, counsel shall not have examined, nor will counsel
opine, upon any provision or matter to the extent that such examination
or opinion would require a financial, mathematical or accounting
calculation or determination.
(iv) The opinions expressed in 1, 2 and 3 above will be based upon and
limited to a review of the Certificate of Existence, the West Virginia
Business Corporation Act, the Articles of Incorporation, the Bylaws of
Buyer and WB Sub, and the minute books of Buyer and WB Sub. The
opinions will be limited to the laws of the State of West Virginia and
the federal laws of the United States of America as we are members of
the Bar of the State of West Virginia, and do not purport to have
expertise in, nor will express any opinion as to, the laws of any other
jurisdiction.
(v) The term "knowledge" shall refer to the actual and conscious
awareness of facts or other information of the individual attorneys who
have been actively involved in the transactions contemplated by the
Agreement or the preparation of the opinion. Counsel shall not
undertake any independent investigation or review of the matters that
are the subject of any of the opinions indicated to be to counsel's
knowledge and no inference should be drawn from such opinions that any
such investigation or review has been undertaken.]
2
