As filed with the Securities and Exchange Commission on December 10, 2001
Registration No. 333-_____
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
WESBANCO, INC.
(Exact name of registrant as specified in its charter)
WEST VIRGINIA 6711 55-0571723
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of incorporation or organization) Classification Code Number) Identification No.)
ONE BANK PLAZA
WHEELING, WEST VIRGINIA 26003
(304) 234-9000
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)
PAUL M. LIMBERT, PRESIDENT AND CHIEF EXECUTIVE OFFICER
WESBANCO, INC.
ONE BANK PLAZA
WHEELING, WEST VIRGINIA 26003
(304) 234-9000
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------
WITH COPIES TO:
JAMES C. GARDILL J. ROBERT VAN KIRK
PHILLIPS, GARDILL, KAISER & ALTMEYER KIRKPATRICK & LOCKHART LLP
61 FOURTEENTH STREET HENRY W. OLIVER BUILDING
WHEELING, WEST VIRGINIA 26003 535 SMITHFIELD STREET
(304) 232-6810 PITTSBURGH, PA 15222-2312
(412) 355-6500
---------------
Approximate date of commencement of the proposed sale of the securities to
the public: AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION
STATEMENT.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(d)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
CALCULATION OF REGISTRATION FEE
- ----------------------------------------------------------------------------------------------------------------------------------
Title of each Proposed maximum Proposed maximum
class of Amount to be offering price per aggregate offering
securities to be registered(1) share(2) price(3) Amount of registration fee (4)
registered
- ----------------------------------------------------------------------------------------------------------------------------------
Common Stock, par
value $2.0833 3,442,641 $20.45 $64,001,833.30 $15,296.44
- ----------------------------------------------------------------------------------------------------------------------------------
(1) Represents the number of shares of Wesbanco, Inc. common stock that could be
issued in connection with the merger described herein based on an exchange ratio
of 1.1 shares of Wesbanco common stock for each of the 3,129,674 shares of
American Bancorporation common stock outstanding on December 4, 2001.
(2) Calculated in accordance with Rule 457(f)(1) and 457(c) based on the average
of the high and low prices for a share of American Bancorporation common stock
on December 4, 2001 of $20.45.
(3) Calculated by multiplying the proposed maximum offering price per share by
the 3,129,674 shares of American Bancorporation common stock outstanding on
December 4, 2001.
(4) Calculated by multiplying the proposed maximum aggregate offering price by
.000239.
- --------------------------------------------------------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE
- --------------------------------------------------------------------------------
AMERICAN BANCORPORATION
1025 MAIN STREET
SUITE 800
WHEELING, WEST VIRGINIA 26003
(304) 233-5006
---------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON FEBRUARY _____, 2002
Notice is hereby given that a Special Meeting of shareholders of
American Bancorporation, an Ohio corporation ("American"), will be held on
February _____, 2002, at the executive offices of American, 1025 Main Street,
Suite 800, Wheeling, West Virginia 26003, commencing at _____ p.m., local time,
to consider and vote upon the following matters described in the accompanying
Proxy Statement/Prospectus:
1. Approval and adoption of the Agreement and Plan of Merger
dated as of February 22, 2001 (the "Merger Agreement") by and among
American, Wesbanco, Inc., a West Virginia corporation ("Wesbanco"), Wesbanco
Bank, Inc., a West Virginia banking corporation and a wholly owned
subsidiary of Wesbanco (the "Bank"), and AB Corporation, a West Virginia
corporation and a wholly owned subsidiary of Wesbanco formed solely for the
purpose of effecting the merger ("AB"), pursuant to which American will be
merged with and into AB. Copies of the Merger Agreement and First Amendment
thereto are attached as Annex A and Annex B, respectively, to the
accompanying Proxy Statement/Prospectus.
2. The transaction of such other business as may properly come
before the Special Meeting or any adjournment or postponement of the Special
Meeting.
Only holders of record of American common stock at the close of
business on [record date], will be entitled to notice of, and to vote at, the
Special Meeting and any adjournment or postponement thereof.
Whether or not you plan to attend the Special Meeting, please complete,
date, sign and return the enclosed Proxy promptly. A return envelope is enclosed
for your convenience and requires no postage for mailing in the United States.
By Order of the Board of Directors,
Linda M. Woodfin
Corporate Secretary
Wheeling, West Virginia
January _____, 2002
YOUR VOTE IS VERY IMPORTANT
TO VOTE YOUR SHARES, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY AND MAIL
IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE
THE INFORMATION CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS IS NOT COMPLETE AND
MAY BE CHANGED. WE MAY NOT ISSUE THE COMMON STOCK DESCRIBED IN THIS PROXY
STATEMENT/PROSPECTUS UNTIL THE REGISTRATION STATEMENT FILED WITH THE SEC IS
EFFECTIVE. THIS PROXY STATEMENT/PROSPECTUS IS NOT AN OFFER TO SELL THESE
SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
PROXY STATEMENT
OF
AMERICAN BANCORPORATION
PROSPECTUS
OF
WESBANCO, INC.
This Proxy Statement/Prospectus is being furnished to you because you
are a holder of common stock of American Bancorporation. The Board of Directors
of American has agreed to the acquisition of American by Wesbanco, Inc. in a
merger transaction pursuant to which American will be merged into a subsidiary
of Wesbanco. If the merger is completed, you will receive 1.1 shares of Wesbanco
common stock for each share of common stock of American that you own. American's
Board of Directors is soliciting your Proxy for use at the Special Meeting of
American shareholders at which you will be asked to approve the merger.
This Proxy Statement also constitutes the Prospectus of Wesbanco for
the [3,442,641] shares of common stock to be issued in the merger. Wesbanco and
American common stock is quoted on the National Market System of the Nasdaq
Stock Market and traded under the symbols "WSBC" and "AMBC", respectively.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SHARES OR PASSED
UPON THE ADEQUACY OR ACCURACY OF THIS PROXY STATEMENT/PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
---------------
This Proxy Statement/Prospectus is first being mailed to you on or
about January ___, 2002.
THE ACCOMPANYING PROXY STATEMENT/PROSPECTUS MORE FULLY DESCRIBES THE
PROPOSALS TO BE CONSIDERED AT THE SPECIAL MEETING. WE URGE YOU TO READ THIS
DOCUMENT IN ITS ENTIRETY, INCLUDING THE SECTION ENTITLED "RISK FACTORS"
BEGINNING ON PAGE ___.
THE DATE OF THIS PROXY STATEMENT/PROSPECTUS IS JANUARY __, 2002.
i
TABLE OF CONTENTS
QUESTIONS AND ANSWERS.....................................................1
SUMMARY...................................................................3
THE COMPANIES......................................... ..................3
THE SPECIAL MEETING......................................................4
THE MERGER...............................................................4
RIGHT TO DISSENT FROM THE MERGER.........................................4
CERTAIN FEDERAL INCOME TAX CONSEQUENCES..................................4
INTERESTS OF AMERICAN DIRECTORS AND OFFICERS IN THE MERGER..............5
DESCRIPTION OF THE MERGER AGREEMENT.....................................5
REGULATORY APPROVALS....................................................5
STOCK OPTION AGREEMENT..................................................6
OWNERSHIP OF AMERICAN COMMON STOCK BY WESBANCO..........................6
OWNERSHIP OF AMERICAN COMMON STOCK BY AMERICAN DIRECTORS, EXECUTIVE
OFFICERS AND AFFILIATES.................................................6
SELECTED HISTORICAL FINANCIAL DATA OF WESBANCO...........................7
SELECTED HISTORICAL FINANCIAL DATA OF AMERICAN...........................8
COMPARATIVE PER SHARE DATA..............................................15
MARKET PRICES AND DIVIDEND DATA.........................................16
WESBANCO COMMON STOCK DIVIDEND POLICY..................................17
AMERICAN COMMON STOCK DIVIDEND POLICY..................................17
WHERE YOU CAN FIND MORE INFORMATION ABOUT WESBANCO AND AMERICAN.........18
FORWARD LOOKING STATEMENTS..............................................20
RISK FACTORS............................................................21
WESBANCO'S STATUS AS A HOLDING COMPANY MAKES IT DEPENDENT ON DIVIDENDS
FROM ITS SUBSIDIARIES TO MEET ITS OBLIGATIONS..........................21
INTEREST RATE VOLATILITY COULD SIGNIFICANTLY HARM WESBANCO'S
BUSINESS...............................................................21
WESBANCO MAY ENCOUNTER INTEGRATION DIFFICULTIES OR MAY FAIL TO
REALIZE THE ANTICIPATED BENEFITS OF THE MERGER........................21
WESBANCO'S RESULTS OF OPERATIONS ARE SIGNIFICANTLY AFFECTED BY
THE ABILITY OF ITS BORROWERS TO REPAY THEIR LOANS......................21
THE SPECIAL MEETING.....................................................22
THE MERGER..............................................................24
BACKGROUND OF THE MERGER...............................................24
RECOMMENDATION OF THE AMERICAN BOARD...................................25
OPINION OF AMERICAN'S FINANCIAL ADVISOR................................25
AMERICAN'S REASONS FOR THE MERGER......................................32
WESBANCO'S REASONS FOR THE MERGER......................................33
INTEREST OF CERTAIN PERSONS IN THE MERGER...............................33
EFFECTS OF THE MERGER: THE SURVIVING CORPORATION........................35
MERGER OF SUBSIDIARY BANKS..............................................36
GOVERNMENT APPROVALS....................................................36
RIGHTS OF DISSENTING SHAREHOLDERS.......................................37
RESALE RESTRICTIONS.....................................................39
ACCOUNTING TREATMENT....................................................39
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER...................39
THE MERGER AGREEMENT.....................................................42
THE MERGER..............................................................42
CONVERSION OF SECURITIES................................................42
REPRESENTATIONS AND WARRANTIES..........................................42
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF AMERICAN...................43
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF WESBANCO...................44
MUTUAL COVENANTS........................................................45
ADDITIONAL COVENANTS OF AMERICAN........................................45
ADDITIONAL COVENANTS OF WESBANCO........................................47
CONDITIONS TO OBLIGATIONS OF THE PARTIES................................48
CONDITIONS TO OBLIGATIONS OF WESBANCO...................................49
CONDITIONS TO OBLIGATIONS OF AMERICAN...................................49
TERMINATION; EXPENSES...................................................49
AMENDMENT OR WAIVER.....................................................50
STOCK OPTION AGREEMENT...................................................51
ii
COMPARATIVE RIGHTS OF SHAREHOLDERS.......................................53
DESCRIPTION OF WESBANCO CAPITAL STOCK...................................53
COMPARISON OF RIGHTS OF WESBANCO AND AMERICAN SHAREHOLDERS..............53
DIFFERENCES IN RIGHTS...................................................54
ANTI-TAKEOVER PROVISIONS................................................56
LEGAL MATTERS............................................................57
EXPERTS..................................................................57
ANNEXES
Agreement and Plan of Merger...................................................A
First Amendment to Merger Agreement............................................B
Stock Option Agreement ........................................................C
Opinion of McDonald Investments Inc. dated January , 2002....................D
Ohio Dissenters' Rights Statute................................................E
iii
QUESTIONS AND ANSWERS
Q: WHO ARE THE PARTIES TO THE MERGER?
A: American will merge with AB Corporation, a subsidiary of Wesbanco that
has been formed solely for the purpose of effecting the merger.
Q: WHAT AM I BEING ASKED TO VOTE ON?
A: You are being asked to vote on the merger.
Q: IF THE MERGER IS COMPLETED, WHAT WILL I RECEIVE?
A: If the merger is completed, you will receive 1.1 shares of Wesbanco
common stock for each share of American common stock that you own. The
shares of Wesbanco common stock will be approved for trading on the
Nasdaq Stock Market.
Q: WHEN WILL THE MERGER BE COMPLETED?
A: We expect to receive the approval of the Federal Reserve in January of
2002 and to complete the merger during the first quarter of 2002 after
the approval of American's shareholders being solicited hereby.
Q: WHAT DO I NEED TO DO NOW?
A: After reviewing this document, submit your Proxy, by executing and
returning the enclosed Proxy Card. By submitting your Proxy, you
authorize the individuals named in the Proxy to represent you and vote
your shares at the Special Meeting in accordance with your
instructions. Your vote is important. Whether or not you plan to attend
the Special Meeting, please submit your Proxy promptly in the enclosed
envelope.
Q: SHOULD I SEND IN MY STOCK CERTIFICATES NOW?
A: No. If the merger is completed, we will send you written instructions
for exchanging your American common stock for Wesbanco common stock.
Q. IF MY SHARES ARE HELD IN "STREET NAME" BY MY BROKER WILL MY BROKER VOTE
MY SHARES FOR ME?
A. Your broker will vote your shares only if you instruct your broker on
how to vote. Your broker will send you directions on how you can
instruct your broker to vote. Your broker cannot vote your shares
without instructions from you.
Q. HOW WILL MY SHARES BE VOTED IF I RETURN A BLANK PROXY CARD?
A. If you sign, date and send in your Proxy Card and do not indicate how
you want to vote, your Proxy will be counted as a vote for the merger.
Q. WHAT WILL BE THE EFFECT IF I DO NOT VOTE?
A. If you abstain, do not return your Proxy Card or otherwise fail to vote
at the Special Meeting, your failure to vote will have the same effect
as if you voted against the merger.
Q. CAN I CHANGE MY MIND AND REVOKE MY PROXY?
A. Yes, you may revoke your Proxy and change your vote at any time before
the Special Meeting by:
o signing another Proxy with a later date;
o giving written notice of the revocation of your Proxy to the Secretary
of American prior to the Special Meeting; or
o voting in person at the Special Meeting.
Your latest dated Proxy or vote will be counted.
2
SUMMARY
This summary highlights selected information from this Proxy
Statement/Prospectus, and may not contain all of the information that is
important to you. To better understand the merger and for a more complete
understanding of the legal terms of these transactions, you should read this
document entirely, including those additional documents to which we refer you.
THE COMPANIES
WESBANCO INC.
One Bank Plaza
Wheeling, West Virginia 26003
(304) 234-9000
Wesbanco, a bank holding company headquartered in Wheeling, WV, offers
through its various subsidiaries a full range of financial services including
retail banking, corporate banking, personal and corporate trust services,
brokerage services, mortgage banking and insurance.
Wesbanco's primary business function is the operation of a commercial
bank through 59 branches located in West Virginia and Eastern Ohio. Wesbanco
restructured its banking and mortgage operations on January 14, 2000, merging
all of its banking subsidiaries and its mortgage subsidiary into one state
member banking corporation, Wesbanco Bank, Inc., headquartered in Wheeling with
regional administrative offices in Fairmont, Parkersburg and Charleston.
Wesbanco previously maintained four separate banking subsidiaries. As of
September 30, 2001, Wesbanco had consolidated total assets of approximately $2.5
billion, deposits of $1.9 billion and stockholders' equity of $258.8 million.
Wesbanco also offers other financial services through its non-banking
affiliates. Wesbanco Insurance Services, Inc., is a multi-line insurance agency
specializing in property, casualty and life insurance for personal and
commercial clients. Wesbanco Securities, Inc., is a full service broker-dealer
which also offers discount brokerage services.
Wesbanco offers wealth management, personal trust, corporate trust,
estate administration, qualified plan administration and investment services
through Wesbanco Trust and Investment Services, a division of Wesbanco Bank.
This division of Wesbanco Bank currently holds approximately $2.67 billion in
assets in its various capacities.
Wesbanco also serves as investment adviser to a family of mutual funds
under the name "WesMark Funds" which include the WesMark Growth Fund, the
WesMark Balanced Fund, the WesMark Bond Fund, the WesMark West Virginia
Municipal Bond Fund and the WesMark Small Company Growth Fund.
AMERICAN BANCORPORATION
1025 Main Street
Suite 800
Wheeling, West Virginia 26003
(304) 233-5006
American is a bank holding company, headquartered in Wheeling, West
Virginia, which provides through its subsidiaries commercial and mortgage
banking services to customers in central and eastern Ohio, southwestern
Pennsylvania and northern West Virginia. American's banking subsidiary, Wheeling
National Bank, headquartered in St. Clairsville, Ohio, is a full-service
commercial bank operating through 21 branches. As of September 30, 2001,
American had consolidated total assets of $694.3 million, deposits of $484.5
million and stockholders' equity of $46.7 million.
3
Through Wheeling National Bank, American provides a full range of
commercial banking services to retail customers and small to medium-sized
business in its market area. In eastern Ohio and northern West Virginia American
focuses on local customer needs. In the Columbus, Ohio area, American focuses
its marketing efforts on local businesses, whose needs are not being served
effectively by larger institutions. In southwestern Pennsylvania, American
operates an office catering primarily to small business customers.
The banking services American offers its customers include checking,
savings, time and money market accounts, personal, commercial, construction and
real estate loans, individual retirement accounts, safe deposit boxes, wire
transfers and debit cards, among other standard banking products and services.
American operates two subsidiaries that provide data processing
services and transfer agent services for American and the Wheeling National
Bank.
THE SPECIAL MEETING
The Special Meeting will be held on __________, February ___, 2002 at
___ p.m., local time, at the offices of American at 1025 Main Street, Suite 800,
Wheeling, West Virginia 26003. The purpose of the Special Meeting is to consider
and vote upon the merger.
You may vote at the Special Meeting only if you owned shares of
American common stock at the close of business on [record date]. You may cast
one vote for each share of American common stock owned by you on that date. The
holders of at least a majority of the shares of American common stock present in
person or by proxy at the Special Meeting must vote in favor of the merger in
order to approve the merger. As of [record date], there were 3,129,674 shares of
American common stock outstanding, held by approximately [1,741] holders of
record.
You can vote your shares by attending the Special Meeting and voting in
person, or by marking the enclosed Proxy Card with your vote, signing it and
mailing it in the enclosed return envelope. You can change your vote as late as
the date of the Special Meeting either by sending in a new Proxy received prior
to the Special Meeting or by attending the Special Meeting and voting in person.
THE MERGER
We propose a merger of American with AB Corporation, a subsidiary of
Wesbanco that has been formed solely for the purpose of effecting the merger. If
the merger is consummated, AB Corporation will continue as the surviving
corporation. The Articles of Incorporation and By-laws of AB Corporation will
continue as the Articles of Incorporation and By-laws of the surviving
corporation. The officers and directors of AB Corporation will continue as the
officers and directors of the Surviving Corporation. Following the merger,
Wheeling National Bank will be merged into Wesbanco Bank and AB Corporation will
be merged into Wesbanco. If the merger is completed, you will receive 1.1 shares
of Wesbanco common stock for each share of American common stock that you own.
Instead of fractional shares of Wesbanco, you will receive a check for any
fractional shares based on a value of $22.31 per whole share of Wesbanco common
stock.
RIGHT TO DISSENT FROM THE MERGER
You have the right to dissent from the merger. This means that if you
do not vote in favor of the merger, you may make a written demand to American
for payment in cash of the fair value of your shares. See "The Merger - Rights
of Dissenting Shareholders" beginning on page _____.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
We intend the merger to be a tax free reorganization for federal income
tax purposes. If we obtain this treatment, you will not recognize any gain or
loss for federal income tax purposes upon receipt of shares of Wesbanco common
stock in exchange for your shares of American common stock. However, any cash
you receive in lieu of fractional shares will constitute taxable income.
4
Because of the complexity of the tax laws and the individual nature of
the tax consequences of the merger, you should consult your own tax advisor
concerning all federal, state, local and foreign tax consequences of the merger
that may apply to you.
INTERESTS OF AMERICAN DIRECTORS AND OFFICERS IN THE MERGER
If the Merger is consummated, Jeremy C. McCamic, the Chairman and Chief
Executive Officer of American, and Abigail M. Feinknopf, a director of American,
will be added to the Wesbanco Board of Directors. Mr. McCamic will serve on the
Wesbanco Board of Directors until December 31, 2002, at which time he has agreed
to resign. Prior to his resignation, Mr. McCamic will be a member of Wesbanco's
Executive Committee. Jay T. McCamic, a director of American, will be added to
the Wesbanco Board of Directors upon Jeremy McCamic's resignation. Wesbanco has
agreed to nominate Abigail M. Feinknopf and Jay T. McCamic as directors until
each has served at least a full three year term. Abigail M. Feinknopf and Jay T.
McCamic are the children of Jeremy C. McCamic.
Certain officers of American will also enter into employment
agreements, consulting agreements or severance plan clarification agreements
with Wesbanco and American. These agreements are described under the heading
"The Merger - Interest of Certain Persons in the Merger" beginning on page
_____.
DESCRIPTION OF THE MERGER AGREEMENT
American will be merged with and into AB Corporation, with AB
Corporation, a wholly owned subsidiary of Wesbanco formed solely for the purpose
of effecting the merger, continuing as the surviving corporation. For each share
of American common stock you own, you will receive 1.1 shares of Wesbanco common
stock. Completion of the merger is subject to the satisfaction or waiver of the
conditions specified in the Merger Agreement, including among others, those
listed below:
o the approval of the Merger Agreement by the shareholders of American;
o the approval by the Board of Governors of the Federal Reserve System
of (i) the application of Wesbanco to acquire American, (ii) the
merger of American into AB Corporation and (iii) the merger of
Wheeling National Bank into Wesbanco Bank;
o the exercise of dissenters' rights in accordance with the Ohio
Revised Code by not more than 10% of the holders of American common
stock; and
o on or before the date the merger closes, the receipt of an opinion
from tax counsel for Wesbanco to the effect that for federal income
tax purposes the merger will be treated as a tax-free reorganization
within the meaning of Section 368(a) of the IRC, and regarding
certain other tax matters.
Termination of the Merger Agreement. The parties may mutually agree to
terminate the Merger Agreement at any time before the merger is completed.
American may also terminate the Merger Agreement if the average bid price for
Wesbanco common stock for the thirty (30) calendar days preceding the fifth
business day before closing of the merger falls below $16.00 per share.
Either Wesbanco or American may also terminate the Merger Agreement
under other circumstances described in detail in this Proxy
Statement/Prospectus, including, without limitation, the failure of the merger
to close by March 31, 2002.
Effective Date of the Merger. We expect the merger to be completed as
soon as practicable after shareholder and regulatory approvals have been
received and all applicable regulatory waiting periods have expired. We expect
this to occur during the first quarter of 2002.
5
REGULATORY APPROVALS
In addition to your approval, the merger is subject to the approval of
the Board of Governors of the Federal Reserve System and the West Virginia Board
of Banking and Financial Institutions. Application to the Federal Reserve was
accepted for filing on November 8, 2001 and the Federal Reserve approved the
merger on __________. The West Virginia Board of Banking and Financial
Institutions approved the merger on June 11, 2001.
STOCK OPTION AGREEMENT
American and Wesbanco entered into a Stock Option Agreement dated
February 22, 2001, pursuant to which American granted Wesbanco the option to
purchase up to 622,805 shares of American common stock at a price of $18.00 per
share. American granted Wesbanco this option to induce Wesbanco to enter into
the Merger Agreement and to increase the likelihood that the corporations would
complete the merger.
The Stock Option Agreement could discourage other companies from trying
or proposing to combine with American before the completion of the merger. The
Stock Option Agreement is attached as Annex C to this document.
Wesbanco cannot exercise this option unless certain events occur. These
events include business combinations or acquisition transactions relating to
American and American's failure to satisfy certain provisions in the Merger
Agreement. Neither American nor Wesbanco is aware of any event, as of the date
of this document, which would permit Wesbanco to exercise this option. See "The
Merger Agreement - Stock Option Agreement" on page _____ for more information
about the Stock Option Agreement.
OWNERSHIP OF AMERICAN COMMON STOCK BY WESBANCO
As of [record date], the trust department of Wesbanco Bank held 20,216
shares of American common stock in a fiduciary capacity. Wesbanco Bank has
discretionary voting authority with respect to 7,906 of these shares. Other than
the shares held by Wesbanco Bank's trust department, Wesbanco and parties
related to Wesbanco did not own any shares of American common stock on the
record date.
OWNERSHIP OF AMERICAN COMMON STOCK BY AMERICAN DIRECTORS, EXECUTIVE OFFICERS AND
AFFILIATES
As of [record date], the directors, executive officers and affiliates
of American owned or controlled the vote of [942,638] shares of American common
stock constituting approximately [30.12%] of the outstanding shares of American
common stock. The holders of at least a majority of the shares of American
common stock entitled to vote and present in person or by proxy must vote in
favor of the merger in order to approve the merger. See "The Merger - Interest
of Certain Persons in the Merger" on page _____ for more information about
American directors, executive officers and affiliates.
6
SELECTED HISTORICAL FINANCIAL DATA OF WESBANCO
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
The following table sets forth certain historical financial data concerning
Wesbanco for the nine months ended September 30, 2001 and 2000 and for each of
the five years ended December 31, 2000. This information is based on information
contained in Wesbanco's 10-Q for the third quarter ended September 30, 2001 and
Wesbanco's Annual Report on Form 10-K for the fiscal year ended December 31,
2000, both of which are incorporated by reference into this Proxy
Statement/Prospectus.
FOR THE NINE MONTHS ENDED
SEPTEMBER 30, FOR THE YEARS ENDED DECEMBER 31,
-------------------------------------- ---------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
-------------------------------------- ---------------------------------------------------
SUMMARY STATEMENT OF INCOME:
Interest income $ 123,808 $ 121,260 $ 163,079 $ 155,861 $ 162,718 $ 157,790 $ 144,383
Interest expense 59,130 58,678 79,552 69,231 73,925 70,005 61,612
--------------------------------------- --------------------------------------------------
Net interest income 64,678 62,582 83,527 86,630 88,793 87,785 82,771
Provision for loan losses 4,350 2,179 3,225 4,295 4,392 5,574 4,795
--------------------------------------- --------------------------------------------------
Net interest income after
provision for loan losses 60,328 60,403 80,302 82,335 84,401 82,211 77,976
Other income 18,207 16,708 23,376 24,581 25,715 17,701 15,657
Other expense 47,495 48,197 64,483 67,813 68,308 65,182 57,043
--------------------------------------- --------------------------------------------------
Income before income taxes 31,040 28,914 39,195 39,103 41,808 34,730 36,590
Income tax provision 9,329 8,915 12,271 11,465 13,495 9,519 10,648
--------------------------------------- --------------------------------------------------
Net income $ 21,711 $ 19,999 $ 26,924 $ 27,638 $ 28,313 $ 25,211 $ 25,942
======================================= ==================================================
PER SHARE INFORMATION:*
Earnings per share $ 1.19 $ 1.04 $ 1.41 $ 1.37 $ 1.36 $ 1.23 $ 1.31
Dividends per share 0.69 0.67 0.895 0.88 0.84 0.786 0.72
Book value per share at
period end 14.42 13.60 13.92 13.63 14.35 13.97 13.17
Average shares outstanding 18,194,491 19,235,127 19,092,927 20,229,524 20,867,193 20,461,742 19,855,791
SELECTED RATIOS:
Return on average assets 1.22% 1.17% 1.18% 1.23% 1.26% 1.18% 1.31%
Return on average equity 11.33% 10.31% 10.42% 9.85% 9.55% 8.99% 10.48%
AS OF SEPTEMBER 30, AS OF DECEMBER 31,
-------------------------------------- ---------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
-------------------------------------- ---------------------------------------------------
SELECTED BALANCE SHEET
DATA:
Assets $2,465,947 $2,292,985 $2,310,137 $2,269,726 $2,242,712 $2,211,543 $2,090,750
Securities 710,115 534,097 546,389 567,928 680,550 629,218 600,330
Net loans 1,544,777 1,560,895 1,570,672 1,503,694 1,353,920 1,321,640 1,305,766
Deposits 1,903,320 1,856,417 1,870,361 1,814,001 1,787,642 1,779,867 1,702,660
Shareholders' equity 258,810 254,778 258,506 269,664 296,483 287,995 268,481
* The 1996 data were adjusted to reflect a three for two stock split effected in the form of a 50% stock dividend, effective
June 19, 1997.
7
SELECTED HISTORICAL FINANCIAL DATA OF AMERICAN
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
The following table sets forth certain historical financial data concerning
American for the nine months ended September 30, 2001 and 2000 and for each of
the five years ended December 31, 2000. This information is based on information
contained in American's 10-Q for the third quarter ended September 30, 2001 and
American's Annual Report on Form 10-K for the fiscal year ended December 31,
2000, both of which are incorporated by reference into this Proxy
Statement/Prospectus.
FOR THE NINE MONTHS ENDED
SEPTEMBER 30, FOR THE YEARS ENDED DECEMBER 31,
----------------------- ----------------------------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
----------------------- ----------------------------------------------------------------------
SUMMARY STATEMENT OF INCOME:
Interest income $ 35,581 $ 39,503 $ 52,775 $ 47,618 $ 40,301 $ 35,539 $ 29,885
Interest expense 24,090 25,976 34,723 29,171 23,440 18,278 13,802
----------------------- ----------------------------------------------------------------------
Net interest income 11,491 13,527 18,052 18,447 16,861 17,261 16,083
Provision for loan losses 675 685 910 420 240 -- --
----------------------- ----------------------------------------------------------------------
Net interest income after
provision for loan losses 10,816 12,842 17,142 18,027 16,621 17,261 16,083
Other income 2,100 2,509 2,946 3,504 4,694 2,926 2,392
Other expense 10,149 10,706 14,193 14,650 14,343 13,101 12,707
----------------------- ----------------------------------------------------------------------
Income before income taxes 2,767 4,645 5,895 6,881 6,972 7,086 5,768
Income tax provision (benefit) (15) 920 1,189 1,527 1,770 2,577 2,102
----------------------- ----------------------------------------------------------------------
Net income $ 2,782 $ 3,725 $ 4,706 $ 5,354 $ 5,202 $ 4,509 $ 3,666
======================= ======================================================================
PER SHARE INFORMATION:*
Earnings per share $ 0.89 $ 1.19 $ 1.50 $ 1.71 $ 1.66 $ 1.44 $ 1.17
Dividends per share 0.45 0.45 0.60 0.60 0.555 0.50 0.45
Book value per share at
period end 14.93 10.95 12.96 9.00 11.65 10.77 9.72
Average shares outstanding 3,129,674 3,129,674 3,129,674 3,129,674 3,129,674 3,129,674 3,129,674
SELECTED RATIOS:
Return on average assets 0.54% 0.69% 0.66% 0.79% 0.95% 0.96% 0.91%
Return on average equity 8.50% 16.10% 14.39% 16.19% 14.64% 14.15% 12.62%
AS OF SEPTEMBER 30, AS OF DECEMBER 31,
----------------------- ----------------------------------------------------------------------
2001 2000 2000 1999 1998 1997 1996
----------------------- ----------------------------------------------------------------------
SELECTED BALANCE SHEET DATA:
Assets $694,267 $715,370 $705,216 $711,291 $611,405 $484,606 $461,632
Securities 276,999 273,208 272,045 298,153 263,827 169,176 143,474
Net loans 369,964 398,876 386,272 368,143 297,580 283,407 267,886
Deposits 484,485 481,168 496,149 449,277 431,240 355,734 319,811
Shareholders' equity 46,733 34,272 40,561 28,179 36,447 33,694 30,423
* The 1996 data were adjusted to reflect a two for one stock split, effective October 23, 1997.
8
UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION
The following Unaudited Pro Forma Condensed Financial Information is based on
the historical financial statements of Wesbanco and American and has been
prepared to illustrate the financial effect of the acquisition described below.
The Unaudited Pro Forma Condensed Combined Balance Sheet as of September 30,
2001 assumes the merger was accounted for as a purchase and consummated on
September 30, 2001. The Unaudited Pro Forma Condensed Combined Statements of
Income for the nine months ended September 30, 2001 and for the year ended
December 31, 2000, give effect to the merger as if such transaction had been
effective during the entire period shown.
The Unaudited Pro Forma Condensed Financial Information reflects the merger
based upon preliminary purchase accounting adjustments. Actual adjustments,
which may include adjustments to certain assets, liabilities and other items
including identifiable intangibles, will be made on the basis of evaluations as
of the effective date of the merger and, therefore, may differ from those
reflected in the Unaudited Pro Forma Condensed Financial Information.
The Unaudited Pro Forma Condensed Financial Information should be read in
conjunction with Wesbanco's and American's unaudited consolidated financial
statements for the nine months ended September 30, 2001 and audited consolidated
financial statements for the year ended December 31, 2000.
Estimates of non-recurring acquisition expenses and cost savings, expected to
occur after the date of consummation, have not been included in the pro forma
financial information. Non-recurring expenses are projected to range in total
from $3.5 million to $4 million. Wesbanco projects cost savings associated with
the acquisition to approximate 25% to 30% of American's annualized pre-tax
operating expenses of $13.5 million for 2001. These estimates may differ from
the actual costs incurred and cost savings achieved in the acquisition.
In conjunction with the acquisition, Wesbanco will be required to divest of the
deposits of one office of American to address a possible anti-trust issue. This
office of American, with total deposits as of September 30, 2001 of $16.5
million, or 0.7% of pro forma combined deposits, is considered immaterial to the
transaction and, therefore, not included in the pro forma financial information.
9
UNAUDITED PRO FORMA CONDENSED COMBINED BALANCE SHEET
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
AS OF SEPTEMBER 30, 2001
---------------------------------------------------------------------------------
Pro Forma
American Pro Forma Combined
Wesbanco, Inc. Bancorporation Adjustments Wesbanco, Inc.
---------------- -------------- ----------- --------------
ASSETS
Cash and due from banks $ 73,746 $ 10,475 $ - $ 84,221
Due from banks - interest bearing 684 - 684
--------------- ------------ ------------- ------------
Total cash and due from banks 74,430 10,475 - 84,905
Federal funds sold 20,000 5,533 25,533
Available for sale securities 463,942 276,999 740,941
Held to maturity securities 246,173 - - 246,173
--------------- ------------ ------------- ------------
Total securities 710,115 276,999 - 987,114
Loans, net of unearned income 1,565,383 373,078 (21) (B) 1,938,440
Allowance for loan losses (20,606) (3,114) (23,720)
--------------- ------------ ------------- ------------
Net loans 1,544,777 369,964 (21) 1,914,720
Bank premises and equipment 50,715 9,499 (3,037) (B) 57,177
Goodwill and other intangibles 19,613 1,391 47,764 (A,B,C) 68,768
Other assets 46,297 20,406 66,703
--------------- ------------ ------------- ------------
TOTAL ASSETS $ 2,465,947 $ 694,267 $ 44,706 $ 3,204,920
=============== ============ ============= ============
LIABILITIES
Non interest bearing deposits $ 238,222 $ 40,488 $ - $ 278,710
Interest bearing deposits 1,665,098 443,997 3,015 (B) 2,112,110
----------------- ------------ ------------- ------------
Total deposits 1,903,320 484,485 3,015 2,390,820
Other borrowings 272,263 143,384 14,757 (B) 430,404
----------------- ------------ ------------- ------------
Total interest bearing 2,175,583 627,869 17,772 2,821,224
liabilities
Other liabilities 31,554 7,015 3,000 (C) 41,569
Subordinated debentures - 12,650 127 (B) 12,777
----------------- ------------ ------------- ------------
TOTAL LIABILITIES 2,207,137 647,534 20,899 2,875,570
SHAREHOLDERS' EQUITY
Common stock 43,742 7,824 (7,012) (A) 44,554
Capital surplus 58,884 10,302 (15,267) (A) 53,919
Retained earnings 224,840 26,108 (26,108) (A) 224,840
Treasury Stock (74,693) 74,693 (A) -
Accumulated other comprehensive income 6,037 2,499 (2,499) (A) 6,037
----------------- ------------ -------------- ------------
TOTAL SHAREHOLDERS' EQUITY 258,810 46,733 23,807 329,350
----------------- ------------ -------------- ------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 2,465,947 694,267 $ 44,706 3,204,920
================= ============ ============== ============
Book value per share $ 14.42 $ 14.93 $ 15.40
Shares outstanding 17,943,535 3,129,674 21,386,176
SEE NOTES TO THE UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION
10
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001
--------------------------------------------------------------------------------------
PRO FORMA
AMERICAN PRO FORMA COMBINED
WESBANCO, INC. BANCORPORATION ADJUSTMENTS WESBANCO, INC.
-------------- -------------- ----------- --------------
INTEREST INCOME
Loans, including fees $ 96,075 $ 23,495 $ 13 (B) $ 119,583
Securities 26,186 11,612 37,798
Federal funds sold 1,547 474 2,021
--------------- ------------- ----------- -------------
Total interest income 123,808 35,581 13 159,402
INTEREST EXPENSE
Deposits 51,311 16,868 (2,261) (B) 65,918
Other borrowings 7,819 7,222 (1,760) (B) 13,281
--------------- ------------- ----------- --------------
Total interest expense 59,130 24,090 (4,021) 79,199
NET INTEREST INCOME 64,678 11,491 4,034 80,203
Provision for loan losses 4,350 675 5,025
--------------- ------------- ----------- --------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 60,328 10,816 4,034 75,178
OTHER INCOME
Trust fees 8,560 - 8,560
Service charges on deposit accounts 6,793 707 7,500
Other income 1,887 918 2,805
Net security transaction gains 967 475 1,442
--------------- ------------- ----------- --------------
Total other income 18,207 2,100 - 20,307
OTHER EXPENSE
Salaries, wages and benefits 24,915 4,342 29,257
Premise and equipment, net 7,451 1,791 (151) (B) 9,091
Other operating 15,129 4,016 2,238 (B) 21,383
--------------- ------------- ----------- --------------
Total other expense 47,495 10,149 2,087 59,731
Income before income taxes 31,040 2,767 1,947 35,754
Provision (benefit) for income taxes 9,329 (15) 1,674 (B) 10,988
--------------- -------------- ----------- --------------
NET INCOME $ 21,711 $ 2,782 $ 273 $ 24,766
=============== ============= =========== ==============
Earnings per share $ 1.19 $ 0.89 $ 1.14
Average shares outstanding 18,194,491 3,129,674 21,637,132
SEE NOTES TO THE UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION
11
UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENTS OF INCOME
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
FOR THE YEAR ENDED DECEMBER 31, 2000
--------------------------------------------------------------------------------------
PRO FORMA
AMERICAN PRO FORMA COMBINED
WESBANCO, INC. BANCORPORATION ADJUSTMENTS WESBANCO, INC.
-------------- -------------- ----------- --------------
INTEREST INCOME
Loans, including fees $ 128,591 $ 34,103 $ 4,288 (B) $ 166,982
Securities 33,271 18,438 51,709
Federal funds sold 1,217 234 1,451
--------------- ------------- ----------- -------------
Total interest income 163,079 52,775 4,288 220,142
INTEREST EXPENSE
Deposits 70,441 21,959 (659) (B) 91,741
Other borrowings 9,111 12,764 1 (B) 21,876
--------------- ------------- ----------- --------------
Total interest expense 79,552 34,723 (658) 113,617
NET INTEREST INCOME 83,527 18,052 4,946 106,525
Provision for loan losses 3,225 910 4,135
--------------- ------------- ----------- --------------
NET INTEREST INCOME AFTER
PROVISION FOR LOAN LOSSES 80,302 17,142 4,946 102,390
OTHER INCOME
Trust fees 12,226 - 12,226
Service charges on deposit accounts 8,097 908 9,005
Other income 2,243 2,030 4,273
Net security transaction gains 810 8 818
--------------- ------------- ----------- --------------
Total other income 23,376 2,946 - 26,322
OTHER EXPENSE
Salaries, wages and benefits 33,309 6,684 39,993
Premise and equipment, net 10,283 2,610 (219) (B) 12,674
Other operating 20,891 4,899 2,495 (B) 28,285
--------------- ------------- ----------- --------------
Total other expense 64,483 14,193 2,276 80,952
Income before income taxes 39,195 5,895 2,670 47,760
Provision (benefit) for income taxes 12,271 1,189 2,068 (B) 15,528
--------------- -------------- ----------- --------------
NET INCOME $ 26,924 $ 4,706 $ 602 $ 32,232
=============== ============= =========== ==============
Earnings per share $ 1.41 $ 1.50 $ 1.43
Average shares outstanding 19,092,927 3,129,674 22,535,568
SEE NOTES TO THE UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION
12
NOTES TO THE UNAUDITED PRO FORMA CONDENSED FINANCIAL INFORMATION
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The Unaudited Pro Forma Condensed Financial Information is based on the
following adjustments and related assumptions. The actual purchase price
accounting adjustments will be made on the basis of fair values as of the
effective date of the merger and, therefore, may differ from those reflected in
the Unaudited Pro Forma Condensed Financial Information.
NOTE A
The purchase accounting adjustments to record the merger of American used in the
preparation of the Unaudited Pro Forma Condensed Combined Balance Sheet at
September 30, 2001 are summarized as follows:
American common stock outstanding at September 30, 2001 3,129,674
Exchange ratio of Wesbanco shares for American shares 1.10
-------------------
Shares to be issued from Wesbanco Treasury of
3,052,996 and the remainder in newly issued common
shares 3,442,641
-------------------
Shares issued at market value (average closing price
for a period preceding and following the date of the
Merger Agreement) $ 70,540
Historical net assets acquired (46,733)
-------------------
Excess of purchase price over net assets acquired $ 23,807
-------------------
NOTE B
Using the purchase method of accounting, the excess of the purchase price over
the fair value of the net assets acquired is allocated to goodwill. The
estimated fair value adjustments included in the Unaudited Pro Forma Condensed
Balance Sheet have been determined based on information available as of
September 30, 2001. Since the final determination of fair values of asset and
liabilities will be made based on the fair values as of the effective date of
the merger and after evaluation of the values are complete, the final amounts
may differ from the estimates provided herein. Goodwill is amortized on a
straight-line basis over a period of 15 years. Fair value adjustments related to
loans, deposits and other borrowings are amortized on a straight-line basis over
the estimated remaining portfolio life. Fair value adjustments related to bank
premises are amortized on a straight-line basis over the estimated useful life
of the fixed asset. Tax expense related to net fair value adjustments is
calculated at a 40% tax rate.
Wesbanco is currently evaluating the allocation of goodwill to core deposit
intangibles and, therefore, has not estimated its impact on the pro forma
financial information. Under the new accounting standards, SFAS No. 141 and No.
142, a core deposit intangible is separated from goodwill and amortized over its
remaining useful life. The remaining goodwill intangible is not subject to
amortization under the new standards, however, will be periodically evaluated
for possible impairment. SFAS No. 141 and No. 142 are described in greater
detail below.
In July 2001, the Financial Accounting Standards Board issued SFAS No. 141,
"Business Combinations" and SFAS No. 142, "Goodwill and Other Intangible
Assets". SFAS No. 141 requires the purchase method accounting be used for all
business combinations initiated or completed after June 30, 2001 and eliminates
the pooling-of-interests method of accounting. The statement also addresses
disclosure requirements for business combinations and initial recognition and
measurement criteria for goodwill and other intangible assets as a result of
purchase business combinations.
SFAS No. 142 changes the accounting for goodwill from an amortization method to
an evaluation of possible impairment approach. The amortization of goodwill,
including goodwill recognized relating to past business
13
combinations, will cease upon adoption of the new standard. Impairment testing
for goodwill at a reporting unit level will be required on at least an annual
basis. The new standard also addresses other accounting matters, disclosure
requirements and financial statement presentation issues relating to goodwill
and other intangible assets. Wesbanco will adopt SFAS No. 142 effective January
1, 2002, as required.
NOTE C
The goodwill allocation in the Unaudited Pro Forma Condensed Balance Sheet also
includes estimated direct acquisition costs of approximately $3 million. These
costs, which are accrued as liabilities, include certain severance payments,
legal fees and accounting and advisory fees.
14
COMPARATIVE PER SHARE DATA
(UNAUDITED)
The following table sets forth certain historical and pro forma per
share financial information for Wesbanco and American for the nine month period
ending September 30, 2001, and for the year ended December 31, 2000. The pro
forma equivalent per share information assumes that the merger had been
completed on the dates indicated in the table below and that 1.1 shares of
Wesbanco common stock were issued in exchange for each share of American common
stock. The information in this table is not necessarily an indicator of future
operations and should be read in conjunction with the financial statements that
have been incorporated by reference into this document.
FOR THE NINE
MONTHS ENDED FOR THE YEAR ENDED
SEPTEMBER 30, 2001 DECEMBER 31, 2000
------------------ ------------------
WESBANCO COMMON STOCK:
Earnings per share
Historical......................... $1.19 $1.41
Pro Forma.......................... $1.14 $1.43
Dividends per share
Historical......................... $0.69 $0.895
Pro Forma.......................... $0.69 $0.895
Book value per share
Historical......................... $14.42 $13.92
Pro Forma.......................... $15.40 $14.95
AMERICAN COMMON STOCK:
Earnings per share
Historical......................... $0.89 $1.50
Pro Forma equivalent............... $1.25 $1.57
Dividends per share
Historical......................... $0.45 $0.60
Pro Forma equivalent............... $0.76 $0.98
Book value per share
Historical......................... $14.93 $12.96
Pro Forma equivalent............... $16.94 $16.45
15
MARKET PRICES AND DIVIDEND DATA
Wesbanco and American common stock is quoted on the National Market
System of the Nasdaq Stock Market and traded under the symbol "WSBC" and "AMBC",
respectively. The table below sets forth for the calendar quarters indicated,
the range of high and low sales prices of Wesbanco and American common stock as
reported by the National Market System of the Nasdaq Stock Market and the cash
dividends declared on Wesbanco and American common stock.
WESBANCO COMMON STOCK
---------------------
HIGH LOW DIVIDENDS
---- --- ---------
2001
Third Quarter $27.75 $19.50 $.230
Second Quarter 26.00 18.31 .230
First Quarter 24.50 17.00 .230
2000
Fourth Quarter 24.63 20.25 .225
Third Quarter 24.87 18.31 .225
Second Quarter 25.00 19.00 .225
First Quarter 26.06 18.88 .220
1999
Fourth Quarter 28.63 21.50 .220
Third Quarter 30.00 24.50 .220
Second Quarter 30.25 27.00 .220
First Quarter 31.25 26.50 .220
AMERICAN COMMON STOCK
----------------------
HIGH LOW DIVIDENDS
---- --- ---------
2001
Third Quarter $26.25 $17.75 $.15
Second Quarter 26.00 19.00 .15
First Quarter 20.75 11.00 .15
2000
Fourth Quarter 13.00 9.50 .15
Third Quarter 14.25 10.00 .15
Second Quarter 15.00 10.625 .15
First Quarter 18.25 9.00 .15
1999
Fourth Quarter 20.00 13.125 .15
Third Quarter 22.75 19.00 .15
Second Quarter 22.75 16.50 .15
First Quarter 23.00 16.50 .15
16
On February 21, 2001, the last full trading day prior to the execution
of the Merger Agreement, the closing price per share of Wesbanco and American
common stock as reported on the National Market System of the Nasdaq Stock
Market was $21.50 and $14.875, respectively. On January _____, 2002, the most
recent practicable date prior to the printing of this Proxy
Statement/Prospectus, the closing price per share of Wesbanco and American
common stock as reported on the National Market System of the Nasdaq Stock
Market was $[_____] and [_____], respectively.
You are urged to obtain current market quotations for Wesbanco and
American common stock. Prices at which Wesbanco and American common stock may
trade prior to the merger may not be indicative of prices at which Wesbanco
common stock may trade following the merger.
WESBANCO COMMON STOCK DIVIDEND POLICY
Wesbanco has historically declared and paid cash dividends on a
quarterly basis. Wesbanco anticipates that, after the merger, it will initially
declare quarterly dividends on shares of Wesbanco common stock of $0.23 per
share. You are cautioned, however, that the Wesbanco Board of Directors may, at
any time and without notice, stop declaring dividends or reduce the amount of
the dividend.
Whether Wesbanco pays a dividend, and the amount of any dividend, will
depend upon Wesbanco's results of operations, financial condition, cash
requirements, future prospects, limitations imposed by credit agreements or
senior securities and other factors deemed relevant by the Wesbanco Board of
Directors. Because Wesbanco's principal source of income is dividends from its
subsidiaries, its ability to pay future dividends will depend upon the financial
condition and earnings of its subsidiaries.
Wesbanco may pay dividends at the discretion of its Board of Directors
out of any funds legally available for the payment of dividends under West
Virginia law. Under the West Virginia Corporation Act, dividends may be paid out
of unreserved and unrestricted earned surplus, and, additionally, in certain
circumstances and with the affirmative vote of holders of a majority of
Wesbanco's outstanding shares, out of capital surplus. Wesbanco may never pay a
dividend, however, if, at the time of or after payment of the dividend, it is or
would be insolvent.
Under applicable federal regulations, appropriate bank regulatory
agency approval is required if the total of all dividends declared by a bank in
any calendar year exceeds the available retained earnings and exceeds the
aggregate of the bank's net profits (as defined by regulatory agencies) for that
year and its retained net profits for the preceding two years, less any required
transfers to surplus or a fund for the retirement of any preferred stock. As of
September 30, 2001, Wesbanco's banking subsidiary could not have declared any
dividends to be paid to Wesbanco without prior approval from regulatory
agencies.
AMERICAN COMMON STOCK DIVIDEND POLICY
American has recently declared and paid dividends of $0.15 on a
quarterly basis on American common stock. American may pay dividends at the
discretion of its Board of Directors out of any funds legally available for the
payment of dividends under Ohio law. Notwithstanding the foregoing, American has
agreed in the Merger Agreement not to declare any dividends other than its
normal quarterly dividend of $0.15 per share. The Ohio general corporation law
generally provides that American may declare and pay dividends to its
shareholders, provided that the dividend does not exceed the combination of the
income and surplus of American and is not in violation of the rights of the
holders of shares of any other class. Surplus is defined generally as the excess
of American's assets plus stated capital over its liabilities. American may
never pay a dividend, however, if at the time of or after payment of the
dividend, it is or would be insolvent.
17
WHERE YOU CAN FIND MORE INFORMATION ABOUT WESBANCO AND AMERICAN
Wesbanco and American each file annual, quarterly and special reports,
proxy statements and other information with the Securities and Exchange
Commission. These filings are available over the internet from the SEC's web
site at www.sec.gov. You may inspect and copy Wesbanco and American's filings at
the public reference facilities of the SEC at Judiciary Plaza, 450 Fifth Street,
N.W., Washington, D.C. 20549. You may also obtain Wesbanco and American's
filings from the Public Reference Section of the SEC at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. Please call the SEC at
1-800-SEC-0330 for further information about the public reference rooms.
This Proxy Statement/Prospectus is part of a Registration Statement on
Form S-4 that Wesbanco has filed with the SEC with respect to the Wesbanco
common stock to be issued in the merger. As permitted by the SEC, this Proxy
Statement/Prospectus does not contain all of the information set forth in the
Registration Statement. If you would like to view the additional information
contained in the Registration Statement, you may do so in the manner discussed
in the preceding paragraph.
The SEC allows us to "incorporate by reference" the information that we
file with the SEC, which means that we can disclose important information to you
by referring you to those documents. The information incorporated by reference
is an important part of this Proxy Statement/Prospectus, and information that we
file later with the SEC will automatically update and supersede this
information.
The following documents, which have been filed by Wesbanco with the
SEC, are hereby incorporated by reference into this Proxy Statement/Prospectus:
o Wesbanco's Annual Report on Form 10-K for the fiscal year
ended December 31, 2000
o Wesbanco's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2001
o Wesbanco's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2001
o Wesbanco's Quarterly Report on Form 10-Q for the quarter
ended September 30, 2001
o Wesbanco's Current Reports on Form 8-K filed on January 8,
February 23, March 23, July 23, August 8, August 27,
September 18, October 30, and November 9, 2001
The following documents, which have been filed by American with SEC,
are hereby incorporated by reference into this Proxy Statement/Prospectus:
o American's Annual Report on Form 10-K for the fiscal year
ended December 31, 2000 o American's Quarterly Report on
Form 10-Q for the quarter ended March 31, 2001
o American's Quarterly Report on Form 10-Q for the quarter
ended June 30, 2001
o American's Quarterly Report on Form 10-Q for the quarter
ended September 30, 2001
o American's Current Reports on Form 8-K filed on February 28
and November 21, 2001
All documents filed by Wesbanco or American pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Securities Exchange Act of 1934 after the date of this
document and before the date of the Special Meeting of American's shareholders
are incorporated by reference into and are deemed to be a part of this document
from the date of filing of those documents.
18
You may request a free copy of Wesbanco or American's information by
writing or telephoning Wesbanco or American at the following addresses or
telephone numbers:
Larry G. Johnson, Secretary Linda M. Woodfin, Secretary
Wesbanco, Inc. American Bancorporation
One Bank Plaza 1025 Main Street
Wheeling, West Virginia 26003 Suite 800
(304) 234-9000 Wheeling, West Virginia 26003
(304) 233-5006
IN ORDER TO ENSURE TIMELY DELIVERY OF ANY DOCUMENTS, YOU MUST MAKE YOUR REQUEST
NO LATER THAN 5 DAYS PRIOR TO THE SPECIAL MEETING, OR FEBRUARY __, 2002.
You should rely only on the information contained in this Proxy
Statement/Prospectus or on information to which we have referred you. We have
not authorized any person to give any information or to make any representations
that are different from those in this document.
19
FORWARD LOOKING STATEMENTS
Wesbanco and American have each made forward-looking statements in this
document and in other documents to which this document refers. These statements
are subject to risks and uncertainties. These statements are based on the
beliefs and assumptions of the management of Wesbanco and American and on
information currently available to them or, in the case of information that
appears under the heading "The Merger" beginning on page ___, information that
was available to management of Wesbanco and American as of the date of the
Merger Agreement. Forward-looking statements include, but are not limited to,
the information concerning possible or assumed future results of operations of
Wesbanco. You can identify these forward-looking statements by the words
"believes," "contemplates," "expects," "may," "will," "should," "would,"
"anticipates," and similar expressions. Discussions of strategy are also
forward-looking statements.
We caution you that these statements are not guarantees of future
performance and involve risks and uncertainties that we cannot predict. In
addition, many of these forward-looking statements are based on assumptions
about the future that may prove to be inaccurate. Accordingly, actual results
may differ materially from those expressed in the forward-looking statements.
Any statements in this document about the anticipated effect of the
merger and Wesbanco's performance in future periods are subject to risks
relating to, among other things, the following:
o expected cost savings from the merger may not be fully realized
or realized within the expected time frame;
o the loss of deposits, customers or revenues following the merger
may be greater than expected;
o competitive pressures among depository and other financial
institutions may increase significantly; o costs or difficulties
related to the integration of the businesses of Wesbanco and
American may be greater than expected;
o changes in the interest rate environment may reduce margins or
the volumes or values of loans made or held;
o general economic or business conditions, either nationally or in
the states or regions in which Wesbanco and American do
business, may be worse than expected, resulting in, among other
things, a deterioration in credit quality or a reduced demand
for credit;
o legislative or regulatory changes, including changes in
accounting standards, may adversely affect the business in which
Wesbanco and American are engaged; and
o competitors of Wesbanco and American may develop products that
enable those competitors to compete more successfully than
Wesbanco or American.
Both Wesbanco and American believe the forward-looking statements about
the merged company are reasonable. However, American's shareholders should not
place undue reliance on them. Forward-looking statements are not guarantees of
performance. They involve risks, uncertainties and assumptions. The future
results and shareholder values of Wesbanco following the merger may differ
materially from those expressed or implied in these forward-looking statements.
Many of the factors that will determine these results and values are beyond
Wesbanco's and American's ability to control or predict.
We expressly qualify all subsequent written and oral forward-looking
statements concerning the merger or other matters addressed in this document and
attributable to Wesbanco or American or any person acting on their behalf by the
foregoing cautionary statements. Neither Wesbanco nor American undertakes any
obligation to release publicly any revisions to these forward-looking statements
to reflect events or circumstances after the date of this document or to reflect
the occurrence of unanticipated events.
20
RISK FACTORS
WESBANCO'S STATUS AS A HOLDING COMPANY MAKES IT DEPENDENT ON DIVIDENDS FROM ITS
SUBSIDIARIES TO MEET ITS OBLIGATIONS.
Wesbanco is a holding company and conducts almost all of its operations
through its subsidiaries. Wesbanco does not have any significant assets other
than the stock of its subsidiaries. Accordingly, Wesbanco depends on the cash
flows of its subsidiaries to meet its obligations. Wesbanco's right to
participate in any distribution of earnings or assets of its subsidiaries is
subject to the prior claims of creditors of such subsidiaries. Under federal and
state law, Wesbanco's bank subsidiaries are limited in the amount of dividends
they can pay to Wesbanco without prior regulatory approval. Also, bank
regulators have the authority to prohibit Wesbanco's subsidiary bank from paying
dividends if they think the payment would be an unsafe and unsound banking
practice.
INTEREST RATE VOLATILITY COULD SIGNIFICANTLY HARM WESBANCO'S BUSINESS.
Wesbanco's results of operations are materially affected by the
monetary and fiscal policies of the federal government and the regulatory
policies of governmental authorities. Wesbanco's profitability will be dependent
to a large extent on its net interest income, which is the difference between
income on interest-earning assets, such as loans, and expense on
interest-bearing liabilities, such as deposits. A change in market interest
rates will adversely affect Wesbanco's earnings if market interest rates change
such that the interest Wesbanco pays on deposits and borrowings increases faster
than the interest it collects on loans and investments. Consequently, Wesbanco,
along with other financial institutions generally, is sensitive to interest rate
fluctuations.
WESBANCO MAY ENCOUNTER INTEGRATION DIFFICULTIES OR MAY FAIL TO REALIZE THE
ANTICIPATED BENEFITS OF THE MERGER.
Wesbanco may not be able to integrate the operations of American
without encountering difficulties, including, without limitation, the loss of
key employees and customers, the disruption of ongoing businesses or possible
inconsistencies in standards, controls, procedures and policies. While Wesbanco
has successfully integrated past acquisitions, the proposed merger with American
would be by far the largest acquisition undertaken by Wesbanco and will be
significantly more difficult to integrate smoothly and successfully. In
addition, in determining that the merger is in the best interests of its
shareholders, Wesbanco's Board of Directors considered the effects of expected
cost savings, improved efficiencies and cross-marketing opportunities. There can
be no assurance that these expected benefits of the merger will be realized.
WESBANCO'S RESULTS OF OPERATIONS ARE SIGNIFICANTLY AFFECTED BY THE ABILITY OF
ITS BORROWERS TO REPAY THEIR LOANS.
Lending money is an essential part of the banking business, but
borrowers do not always repay their loans. The risk of non-payment is affected
by, among other things, credit risks of a particular borrower, changes in
economic and industry conditions, the duration of the loan and, in the case of a
collateralized loan, uncertainties as to the future value of the collateral.
With respect to Wesbanco, a large portion of its loans have been made to
borrowers that are, directly or indirectly, financially dependent on the
continued viability of certain employers, including those in the steel industry,
that have a significant presence in Wesbanco's principal markets. Some of these
employers are in dire financial straits and may reduce the size of their work
forces or discontinue some or all of their operations. The loans that Wesbanco
has made to borrowers that are financially dependent upon these employers may be
adversely affected by continued financial troubles of such employers.
21
THE SPECIAL MEETING
GENERAL
This Proxy Statement/Prospectus and the accompanying Proxy card are
being mailed to you on or about [January _____, 2002.] The American Board of
Directors is soliciting proxies from the holders of American common stock to be
voted at the Special Meeting. The Special Meeting has been called to consider
and vote upon the Merger Agreement, which provides for the merger of American
with and into AB Corporation, and the exchange of each outstanding share of
American common stock for shares of Wesbanco common stock.
The American Board of Directors has unanimously approved the Merger
Agreement and recommends that you vote FOR approval thereof.
Copies of the Merger Agreement and the first amendment thereto are
attached to this Proxy Statement/Prospectus as Annex A and Annex B,
respectively, and are incorporated by reference into this document in their
entirety. You should read them carefully.
DATE, TIME AND PLACE OF THE SPECIAL MEETING
The Special Meeting will be held on _________, February _____, 2002, at
_____ p.m., local time, in the principal executive offices of American, at 1025
Main Street, Suite 800, Wheeling, West Virginia 26003.
RECORD DATE; VOTING AT THE SPECIAL MEETING
Only holders of record of American common stock on [record date] will
be entitled to notice of and to vote at the Special Meeting and any adjournments
or postponements of the Special Meeting. On that date, there were [3,129,674]
shares of American common stock outstanding and entitled to vote at the Special
Meeting. Each share is entitled to one vote. As of [record date], there were
approximately [1,746] holders of record of American common stock.
The presence, in person or by proxy, of the holders of a majority of
the outstanding shares of American common stock entitled to vote is necessary to
constitute a quorum at the Special Meeting. The holders of at least a majority
of the shares of American common stock entitled to vote and present in person or
by proxy must vote in favor of the merger in order to approve the merger.
Abstentions and broker non-votes will have the effect of a vote against approval
of the Merger Agreement and the merger.
Each director and executive officer of American who owns or has control
over shares of American common stock has advised American that he or she will
vote FOR adoption and approval of the Merger Agreement. As of [record date], the
directors, executive officers and affiliates of American owned or controlled the
vote of [942,638] shares of American common stock, constituting approximately
[30.12%] of the outstanding shares of American common stock.
As of the record date, Wesbanco Bank's trust department held 20,216
shares of American commons stock in a fiduciary capacity. Wesbanco Bank has
discretionary voting authority over 7,906 of these shares. Other than the shares
held by Wesbanco Bank's trust department, Wesbanco owns no shares of American
common stock nor do any directors, officers or affiliates of Wesbanco own shares
of American common stock.
All shares of American common stock represented at the Special Meeting
by properly executed proxies received prior to or at the Special Meeting, and
not revoked, will be voted at the Special Meeting in accordance with the
instructions on the proxies. If you properly execute a Proxy but include no
voting instructions, your shares will be voted to approve the Merger Agreement
and authorize the merger.
The American Board of Directors does not know of any matters, other
than as described in the notice of Special Meeting, which are to come before the
Special Meeting. If any other matters are properly presented at the Special
Meeting for action, the persons named in the enclosed form of Proxy will have
the authority to vote on those matters in their discretion.
22
If you give a Proxy, you have the right to revoke it at any time before
it is voted. You may revoke your Proxy by (i) filing with the Secretary of
American a written notice of revocation bearing a later date than the Proxy,
(ii) duly executing a later dated Proxy relating to the same shares and
delivering it to the Secretary of American before the taking of the vote at the
Special Meeting, or (iii) attending the Special Meeting and voting in person.
Any written notice of revocation or subsequent Proxy should be sent so as to be
delivered to American Bancorporation, 1025 Main Street, Suite 800, Wheeling,
West Virginia 26003, Attention: Corporate Secretary, or hand delivered to the
foregoing representative of American, at or before the taking of the vote at the
Special Meeting.
American will bear the cost of the solicitation of proxies, except that
Wesbanco will bear the costs of preparing, printing and mailing this Proxy
Statement/Prospectus. In addition to solicitation by use of the mails, proxies
may be solicited by directors, officers and employees of American in person or
by telephone, telegram or other means of communication. These directors,
officers and employees will not be additionally compensated but may be
reimbursed for out-of-pocket expenses they incur in connection with the
solicitation. Arrangements will also be made with custodians, nominees and
fiduciaries for the forwarding of solicitation materials to the beneficial
owners of American common stock held of record by such persons. American may
reimburse these custodians, nominees and fiduciaries for reasonable
out-of-pocket expenses they incur in connection therewith. DO NOT SEND YOUR
STOCK CERTIFICATES WITH YOUR PROXY CARD.
23
THE MERGER
The following description of the terms of the merger is qualified in
its entirety by reference to the provisions of the Merger Agreement and the
first amendment thereto, which are attached to this Proxy Statement/Prospectus
as Annex A and Annex B, respectively, and are incorporated into this document by
reference. You are strongly encouraged to read the Merger Agreement and the
first amendment for a more complete description of the terms of the merger.
BACKGROUND OF THE MERGER
American and Wesbanco had informal discussions concerning a possible
combination of the two banks as far back as 1982. For the most part, these
discussions were informal, nonspecific, and generally indicated an interest on
the part of both institutions to consider a possible combination at some future
date.
Specific discussions were undertaken in October of 1999 between Jeremy
C. McCamic, the Chairman and Chief Executive Officer of American, and James C.
Gardill, the Chairman of Wesbanco, with their first meeting occurring on October
8, 1999. These discussions continued through October and November of 1999 with
the discussions expanded to include Brent Richmond, the President of American,
and Edward M. George, the former President and Chief Executive Officer of
Wesbanco. The parties were unable to achieve a satisfactory agreement concerning
a possible merger of the two banks and, accordingly, the discussions were
terminated on or about January 14, 2000.
On August 15, 2000, the Mergers and Acquisitions Committee of American
reviewed strategic alternatives for American. After considerable discussion, the
committee concluded that exploring a possible merger transaction would be
beneficial to American and its shareholders. The full Board of Directors
considered this matter, and after a lengthy discussion approved the engagement
of McDonald Investments Inc. to serve as American's financial advisor in
connection with a possible sale or merger of American. McDonald Investments, in
consultation with American, prepared a Confidential Memorandum containing June
30, 2000 financial information. In October of 2000, McDonald Investments
contacted a number of financial institutions that McDonald or American had
identified as possible acquirors to determine the extent to which, if any, there
was interest in acquiring American.
On November 16, 2000, representatives of McDonald Investments met with
the Mergers and Acquisition Committee of American and reported that they had
received three preliminary indications of interest in acquiring American.
McDonald Investments prepared an analysis of the three indications of interest
and the institutions expressing such interest. The analysis prepared by McDonald
included an analysis of each institution's profitability, key financial ratios,
future projections and relative market valuations.
Subsequently, on November 17, 2000, Mr. George sent a letter to Mr.
McCamic expressing renewed interest in reinstating the discussions toward a
possible combination of the two banking corporations. The Wesbanco Planning and
Acquisitions Committee met on December 7, 2000, and addressed parameters of a
proposal. In response to Mr. George's letter, Mr. McCamic, Mr. Richmond, Mr.
George and Mr. Gardill met on December 14, 2000, and initiated discussions
concerning a possible combination of the two organizations. These discussions
continued on December 18th, December 20th, December 22nd, and were briefly
suspended on December 23rd, 2000. Mr. Gardill and Mr. McCamic then met again on
January 8, 2001, and a subsequent meeting was held with Mr. George, Mr. McCamic,
Mr. Gardill and Mr. McCamic's investment advisor, Charles Crowley of McDonald
Investments Inc., on January 11, 2001.
The Wesbanco Executive Committee met and reviewed the progress of the
negotiations and addressed specific details of a proposal on January 17, 2001.
Additional discussions were held between the parties on January 15th, February
6th, 7th, 12th and February 14th at which latter meeting substantive terms and
conditions of the merger were agreed upon. Final details were worked out at
meetings on February 16th and February 19th with the resulting Agreement and
Plan of Merger executed on February 22, 2001, after consideration and unanimous
approval of the transaction by the Wesbanco Board of Directors on that date.
Subsequently, in early June 2001, Wesbanco was notified by the Federal
Reserve of a preliminary determination by the Federal Reserve of a downgrading
of the Community Reinvestment Act rating for Wesbanco
24
Bank to "Needs Improvement," which had the effect of precluding Wesbanco from
obtaining the Federal Reserve's approval of the acquisition of American. The
Federal Reserve issued its final ruling on July 31, 2001 sustaining the
downgrade. Wesbanco successfully appealed this ruling and on October 22, 2001,
its rating was upgraded to "Satisfactory," thereby permitting Wesbanco to
proceed with the application for approval of the American acquisition. Wesbanco
and American entered into the First Amendment to the Merger Agreement to extend
from December 31, 2001 to March 31, 2002 the date by which American's
acquisition by Wesbanco must be completed.
As a result of the regulatory matters described in the preceding
paragraph, Wesbanco lost its opportunity to acquire Freedom Bancshares, a small
transaction that had been announced and for which regulatory approval had been
received. Prior to the scheduled closing, Wesbanco was notified that the
Community Reinvestment Act downgrade would preclude it from closing that
transaction. After Freedom notified Wesbanco that it did not wish to extend the
date by which its acquisition must close, Freedom and Wesbanco negotiated a
mutually satisfactory termination of the transaction.
RECOMMENDATION OF THE AMERICAN BOARD
The Board of Directors of American believes that the merger and the
Merger Agreement are advisable and are fair to and in the best interest of
American and its shareholders. THE BOARD OF DIRECTORS OF AMERICAN UNANIMOUSLY
RECOMMENDS THAT THE AMERICAN SHAREHOLDERS VOTE FOR THE APPROVAL OF THE MERGER
AGREEMENT AND THE MERGER.
OPINION OF AMERICAN'S FINANCIAL ADVISOR
American retained McDonald Investments Inc. ("McDonald") to act as its
financial advisor in connection with a possible merger and related matters. As
part of its engagement, McDonald agreed, if requested by American, to render an
opinion with respect to the fairness, from a financial point of view, to the
holders of American common stock, of the merger consideration as set forth in
the agreement. McDonald is a nationally recognized specialist for the financial
services industry, in general, and for banks in particular. McDonald is
regularly engaged in evaluations of similar businesses and in advising
institutions with regard to mergers and acquisitions, as well as raising debt
and equity capital for such institutions. American selected McDonald as its
financial advisor based upon McDonald's qualifications, expertise and reputation
in such capacity.
McDonald delivered a written opinion dated February 22, 2001 that the
exchange ratio was fair to American shareholders, from a financial point of
view, as of the date of such opinion. McDonald updated its February 22, 2001
opinion as of the date of this proxy statement/prospectus. No limitations were
imposed by American on McDonald with respect to the investigations made or the
procedures followed in rendering its opinion.
THE FULL TEXT OF MCDONALD'S WRITTEN OPINION TO THE AMERICAN BOARD,
DATED AS OF THE DATE OF THIS PROXY STATEMENT/PROSPECTUS, WHICH SETS FORTH THE
ASSUMPTIONS MADE, MATTERS CONSIDERED AND EXTENT OF REVIEW BY MCDONALD, IS
ATTACHED AS ANNEX D AND IS INCORPORATED HEREIN BY REFERENCE. YOU SHOULD READ THE
FAIRNESS OPINION CAREFULLY AND IN ITS ENTIRETY. THE FOLLOWING SUMMARY OF
MCDONALD'S OPINION IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE FULL TEXT OF
THE OPINION. MCDONALD'S OPINION IS ADDRESSED TO THE AMERICAN BOARD AND DOES NOT
CONSTITUTE A RECOMMENDATION TO ANY SHAREHOLDER OF AMERICAN AS TO HOW SUCH
SHAREHOLDER SHOULD VOTE AT THE AMERICAN SPECIAL MEETING DESCRIBED IN THIS
DOCUMENT.
25
McDonald, in connection with rendering its original opinion:
o reviewed American's Annual Reports to Shareholders and Annual
Reports on Form 10-K for each of the years ended December 31, 2000,
December 31, 1999, and December 31, 1998, including the audited
financial statements contained therein, and American's Quarterly
Reports on Form 10-Q for each of the quarters ended September 30,
2001, June 30, 2001, and March 31, 2001;
o reviewed Wesbanco's Annual Reports to Shareholders and Annual
Reports on Form 10-K for each of the years ended December 31, 2000,
December 31, 1999, and December 31, 1998, including the audited
financial statements contained therein, and Wesbanco's Quarterly
Reports on Form 10-Q for each of the quarters ended March 31, 2001,
June 30, 2001, and March 31, 2001;
o reviewed certain other public and non-public information, primarily
financial in nature, relating to the respective businesses,
earnings, assets and prospects of American and Wesbanco provided to
McDonald or publicly available;
o participated in meetings and telephone conferences with members of
senior management of American and Wesbanco concerning the financial
condition, business, assets, financial forecasts and prospects of
the respective companies, as well as other matters McDonald believed
relevant to its inquiry;
o reviewed certain stock market information for American common stock
and Wesbanco common stock, and compared it with similar information
for certain companies, the securities of which are publicly traded;
o compared the results of operations and financial condition of
American and Wesbanco with that of certain companies, which McDonald
deemed to be relevant for purposes of the opinion;
o reviewed the financial terms, to the extent publicly available, of
certain acquisition transactions, which McDonald deemed to be
relevant for purposes of the opinion;
o reviewed the merger agreement dated February 22, 2001 as amended and
its schedules and exhibits and certain related documents;
o reviewed the proxy statement for the merger; and
o performed such other reviews and analyses as McDonald deemed
appropriate.
The written opinions provided by McDonald to American (as of February
22, 2001 and as of the date of this Proxy Statement/Prospectus) were necessarily
based upon economic, monetary, financial market and other relevant conditions as
of the dates thereof.
In connection with its review and arriving at its opinion, McDonald
relied upon the accuracy and completeness of the financial information and other
pertinent information provided by American and Wesbanco to McDonald for purposes
of rendering its opinion. McDonald did not assume any obligation to
independently verify any of the provided information as being complete and
accurate in all material respects. With regard to the financial forecasts
established and developed for American and Wesbanco with the input of their
respective managements, as well as projections of cost savings and operating
synergies, McDonald assumed that this information reflects the best available
estimates and judgments of American and Wesbanco as to the future performance of
the separate and combined entities and that the projections provided a
reasonable basis upon which McDonald could formulate its opinion. Neither
American nor Wesbanco publicly discloses such internal management projections of
the type utilized by McDonald in connection with McDonald's role as financial
advisor to American. Therefore, such projections cannot be assumed to have been
prepared with a view towards public disclosure. The projections were based upon
numerous variables and assumptions that are inherently uncertain, including,
among others, factors
26
relative to the general economic and competitive conditions facing American and
Wesbanco. Accordingly, actual results could vary significantly from those set
forth in the respective projections.
McDonald does not claim to be an expert in the evaluation of loan
portfolios or the allowance for loan losses with respect thereto and therefore
assumes that such allowances for American and Wesbanco are adequate to cover
such losses. In addition, McDonald does not assume responsibility for the review
of individual credit files and did not make an independent evaluation, appraisal
or physical inspection of the assets or individual properties of American or
Wesbanco, nor was McDonald provided with such appraisals. Furthermore, McDonald
assumes that the merger will be consummated in accordance with the terms set
forth in the agreement, without any waiver of any material terms or conditions
by American, and that obtaining the necessary regulatory approvals for the
merger will not have an adverse effect on either separate institution or the
combined entity. In particular, McDonald assumes that the merger will be
recorded as a "purchase" in accordance with generally accepted accounting
principles.
In connection with rendering its opinion to American's Board, McDonald
performed a variety of financial and comparative analyses, which are briefly
summarized below. Such a summary of analyses does not purport to be a complete
description of the analyses performed by McDonald. Moreover, McDonald believes
that these analyses must be considered as a whole and that selecting portions of
such analyses and the factors considered by it, without considering all such
analyses and factors, could create an incomplete understanding of the scope of
the process underlying the analyses and, more importantly, the opinion derived
from them. The preparation of a financial advisor's opinion is a complex process
involving subjective judgments and is not necessarily susceptible to partial
analyses or a summary description of such analyses. In its full analysis,
McDonald also included assumptions with respect to general economic, financial
market and other financial conditions. Furthermore, McDonald drew from its past
experience in similar transactions, as well as its experience in the valuation
of securities and its general knowledge of the banking industry as a whole. Any
estimates in McDonald's analyses were not necessarily indicative of actual
future results or values, which may significantly diverge more or less favorably
from such estimates. Estimates of company valuations do not purport to be
appraisals nor to necessarily reflect the prices at which companies or their
respective securities actually may be sold. None of the analyses performed by
McDonald were assigned a greater significance by McDonald than any other in
deriving its opinion.
27
Accretion/Dilution Analysis: On the basis of financial projections
developed with the assistance of management, and estimates of on-going cost
savings accruing to the pro forma company, as well as estimated one-time costs
related to the transaction, McDonald compared pro forma equivalent earnings,
cash dividends, book value and tangible book value to the stand-alone
projections for American and Wesbanco. No assumptions were made regarding
revenue enhancements following the completion of the transaction.
The accretion/dilution analysis demonstrated, among other things, the merger
would result in:
o An estimated twenty-five percent (25%) accretion to diluted earnings
per share for American shareholders in the first year of combined
operations, and an estimated twenty-four percent (24%) accretion for
each year over the period of the analysis;
o Less than one percent (1%) accretion to earnings for Wesbanco
shareholders in the first year of combined operations; o An
estimated sixty-seven percent (67%) accretion in cash dividends in
the first year for American shareholders, assuming Wesbanco
maintained its current dividend policy;
o No change in cash dividends for Wesbanco shareholders;
o An estimated twelve percent (12%) accretion to book value and less
than one percent (1%) accretion to tangible book value for American
shareholders; and
o An estimated six percent (6%) accretion to book value and less than
one percent (1%) dilution to tangible book value for Wesbanco
shareholders.
Contribution Analysis: McDonald compared the contribution of American
to the pro forma company relative to the approximate ownership of the pro forma
company. The analysis indicated that American shareholders would own
approximately 16.1% of the pro forma shares of Wesbanco. American's approximate
contributions are listed below by category:
AMERICAN
CONTRIBUTION
----------------
Assets 22.5%
Loans 19.3%
Deposits 20.3%
Tangible equity 15.6%
Last twelve months earnings with cost savings (1) 14.8%
Projected year 1 earnings with cost savings (1) 16.1%
PRO FORMA OWNERSHIP 16.1%
(1) Includes estimated cost savings of 31% of American's last
twelve months' non-interest expense base attributable to the
merger; excludes one-time charges.
28
Comparable Transaction Analysis: McDonald reviewed and compared
financial performance and pricing information for groups of comparable bank
merger transactions announced in the twelve months ended November 30, 2001 that
it deemed pertinent to an analysis of the merger. The pricing ratios for the
merger were compared to the median ratios of (1) price to tangible book value,
(2) price to last twelve months earnings, and (3) tangible book value premium to
core deposits for each of the following comparable transaction groups:
* all bank acquisitions in the United States ("All U.S. Banks");
* all Midwest bank acquisitions ("Midwest Banks");
* all bank acquisitions in the United States involving acquired banks
with assets of $500 million - $1 billion ("Banks - Assets
$500mm-$1b");
* all bank acquisitions in the United States involving acquired banks
with returns on average equity of 7%-10% ("Banks - ROAE 7%-10%");
McDonald also selected twelve bank acquisitions announced since
September 30, 2000 that McDonald believed were the most comparable to American
in terms of asset size, tangible capital and profitability (the "Guideline
Transactions");
ACQUIROR TARGET
BB&T Corp. Mid-America Bancorp
BB&T Corp. AREA Bancshares Corp.
First Merchants Corp. Lafayette Bancorp
First National of Nebraska, Inc. Castle BancGroup, Inc.
Sterling Bancshares, Inc. Community Bankshares, Inc.
Financial Federal MHC, Inc. Success Bancshares, Inc.
Allegiant Bancorp, Inc. Southside Bancshares Corp.
First Virginia Banks, Inc. James River Bankshares, Inc.
Fulton Financial Corp. Drovers Bancshares Corp.
Community Bank System, Inc. First Liberty Bank Corp.
Park National Corp. Security Banc Corp.
Fifth Third Bancorp Capital Holdings Inc.
29
The following table represents a summary analysis of the comparable
transactions analyzed by McDonald based on the announced transaction values.
Tangible
Price/ Price/ Book
Tangible LTM Premium/
Book Earnings Core
Deals Value (2) Deposits (3)
------- ---------- ---------- ---------------
ALL U.S. BANKS 178 185.1% 17.3x 10.1%
MIDWEST BANKS 56 162.7% 18.2x 7.3%
BANKS - ASSETS $500MM-$1B 17 213.3% 18.7x 12.0%
BANKS - ROAE 7%-10% 34 176.7% 20.3x 9.7%
GUIDELINE TRANSACTIONS 12 197.9% 18.5x 13.9%
AMERICAN (1) 147.1% 17.7x 5.2%
- -----------------------------------------------------------------------------------------------------------
Note: All ratios reflect median values.
(1) American pricing data based on per share consideration of $21.31.
(2) Last twelve months fully-diluted earnings per share (assuming Treasury
method of accounting for stock options).
(3) Premium over tangible book value as a percentage of core deposits.
McDonald determined that the value of the proposed merger fell within
the range of similar transactions represented by the comparable groups based on
multiples of trailing twelve months earnings. The price to tangible book value
and tangible book value premium to core deposits were lower than the comparable
groups, but these ratios were considered to be less meaningful due to
significant fluctuations in book value as a result of gains in the Bank's
securities portfolio.
30
Comparable Company Analysis: McDonald reviewed and compared stock
market data and selected financial information for Wesbanco as of November 30,
2001 with corresponding information for actively-traded banks possessing similar
financial and performance characteristics as Wesbanco. The comparison banks were
grouped according to the criteria listed below:
Price/ Price/ Price/
LTM LTM Price/ Tangible
Reported Core (1) 2002E Book Dividend
Banks Earnings Earnings Earnings Value Yield
--------- ------------ ------------- ----------- ----------- --- ---------
ALL U.S. BANKS 443 13.7x 13.8x 12.0x 166.0% 2.8%
MIDWEST BANKS 97 13.6x 14.1x 11.8x 173.2% 2.9%
WEST VIRGINIA 5 12.4x 12.9x 12.7x 145.1% 3.6%
TANGIBLE CAPITAL 9%-11% 81 13.2x 13.0x 12.2x 153.7% 2.9%
RETURN ON EQUITY 10%-12% 73 13.0x 12.9x 12.0x 143.8% 3.0%
RETURN ON ASSETS 1.10%-1.25% 72 13.2x 13.2x 12.2x 175.8% 3.1%
MARKET CAP. $300MM-$400MM 21 14.0x 14.3x 12.0x 205.0% 2.6%
ASSET SIZE $2.0B-$3.0B 39 14.0x 14.8x 11.8x 210.1% 2.6%
GUIDELINE COMPANIES (2) 12 14.4x 14.3x 12.9x 203.2% 3.4%
WESBANCO (3) 12.4x 12.9x 12.2x 145.1% 4.8%
- ----------------------------------------------------------------------------------------------------------------------------------
Note: All ratios reflect median values.
(1) Core earnings are defined as reported earnings, less non-recurring income,
plus non-recurring expenses, tax-adjusted at a 35% rate.
(2) Consists of twelve actively-traded banks of similar asset size and capital
levels: Chemical Financial Corp., Corus Bankshares, Inc., First Community
Bancshares, Inc. (VA), First Financial Bancorp. (OH), First Financial
Bankshares, Inc. (TX), First Merchants Corp., Frontier Financial Corp., Hancock
Holding Co., Omega Financial Corp., Park National Corp., S&T Bancorp, Inc., and
Texas Regional Bancshares, Inc.
(3) At or for the twelve months ended September 30, 2001, unless otherwise
noted.
31
The analysis revealed that Wesbanco traded at a discount to banks
included in the comparable groups based on price to earnings and price to
tangible book value. Due to its lower stock price, Wesbanco had a higher
dividend yield than the comparable groups.
Due Diligence Examination of Wesbanco: McDonald reviewed its on-site
due diligence examination of Wesbanco. McDonald examined Wesbanco's historical
balance sheets and income statements, along with recent operating results and a
variety of financial ratios through September 30, 2001. McDonald discussed
Wesbanco's business strategy, strengths and weaknesses, profitability, growth,
net interest margin, non-interest income, operating expenses, intangible assets,
funding and deposit composition, market share and geographic coverage, capital,
asset quality and reserve coverage, concentrations of credit and loan portfolio
composition, interest-rate risk, foreign investments, mergers and acquisitions,
subsidiary activities, culture, stock pricing, recent bank analysts' reports,
and other issues.
NO COMPANY USED AS A COMPARISON IN THE ABOVE ANALYSES IS IDENTICAL TO
AMERICAN, WESBANCO OR THE COMBINED ENTITY AND NO OTHER TRANSACTION IS IDENTICAL
TO THE MERGER. ACCORDINGLY, AN ANALYSIS OF THE RESULTS OF THE FOREGOING IS NOT
PURELY MATHEMATICAL; RATHER, SUCH ANALYSES INVOLVE COMPLEX CONSIDERATIONS AND
JUDGMENTS CONCERNING DIFFERENCES IN FINANCIAL MARKET AND OPERATING
CHARACTERISTICS OF THE COMPANIES AND OTHER FACTORS THAT COULD AFFECT THE PUBLIC
TRADING VOLUME OF THE COMPANIES TO WHICH AMERICAN, WESBANCO AND THE COMBINED
ENTITY ARE BEING COMPARED.
IN CONNECTION WITH THE DELIVERY OF ITS OPINION DATED AS OF THE DATE OF
THIS PROXY STATEMENT/PROSPECTUS, MCDONALD PERFORMED PROCEDURES TO UPDATE, AS
NECESSARY, CERTAIN OF THE ANALYSES DESCRIBED ABOVE AND REVIEWED THE ASSUMPTIONS
ON WHICH THE ANALYSES DESCRIBED ABOVE WERE BASED AND THE FACTORS CONSIDERED IN
CONNECTION THEREWITH. MCDONALD DID NOT PERFORM ANY ANALYSES IN ADDITION TO THOSE
DESCRIBED ABOVE IN UPDATING THE OPINION.
American has agreed to pay McDonald a fee equal to one percent of the
"Transaction Value" for financial advisory services in connection with the
proposed merger. The Transaction Value is equal to the number of shares of
American common stock outstanding on February 22, 2001 (net of treasury shares)
plus the number of shares underlying options to acquire American common stock
outstanding on that date, multiplied by the fair market value of the shares of
Wesbanco common stock to be received in the merger. The fair market value of the
shares of Wesbanco common stock will be the average of the closing prices for
the 10 trading days ending on the date of closing. Based on a value of $21.31
per share, McDonald's total fee would be approximately $665,000. McDonald has
received $100,000 to date. The remainder is payable upon consummation of the
proposed merger. In addition, American has agreed to reimburse McDonald for all
reasonable out-of-pocket expenses, incurred by it on American's behalf, and to
indemnify McDonald against certain liabilities, including any which may arise
under the federal securities laws.
McDonald is a member of all principal securities exchanges in the
United States and in the conduct of its broker-dealer activities has from time
to time purchased securities from, and sold securities to, American and/or
Wesbanco. As a market maker, McDonald may also have purchased and sold the
securities of American and/or Wesbanco for McDonald's own account and for the
accounts of its customers.
AMERICAN'S REASONS FOR THE MERGER
American's Board of Directors believes that the merger is in the best
interest of American and its shareholders and has approved the Merger Agreement.
In the course of approving the Merger Agreement and recommending adoption of the
Merger Agreement by the holders of American common stock, the Board of
Directors, without assigning any relative or specific weights, considered a
number of factors, including, without limitation, the following:
o the value of the Wesbanco common stock to be received by
American shareholders based on the exchange ratio in relation to
the market value, book value, earnings per share and dividend
rates of American common stock;
o the reputation and business practices of Wesbanco and its
management as they would affect the employees of American;
32
o the impact of the merger on the depositors, customers and
communities served by American;
o the opinion of McDonald Investments Inc.;
o the general structure of the transaction and the compatibility
of management and business philosophy;
o the financial results that could be expected in light of the
geographic location of operations of Wesbanco and American and
the compatibility of those operations; and
o industry and economic conditions.
WESBANCO'S REASONS FOR THE MERGER
The Board of Directors of Wesbanco considered a number of reasons in
voting to approve the proposed merger. First, the merger will provide Wesbanco
with the opportunity to significantly expand its existing franchise to include
markets which it perceives offer significant growth opportunities in Washington,
Pennsylvania, and Columbus, Ohio. Second, the transaction also affords Wesbanco
an opportunity to expand its market reach in the Upper Ohio Valley by adding
offices in new communities, such as Shadyside, Steubenville, Cambridge and St.
Clairsville. Third, the transaction offers significant in-market consolidations
through the consolidation of offices in Wheeling and Weirton which will offer
significant cost saving opportunities in the transaction. Fourth, the
transaction will permit Wesbanco to expand the markets in which it can offer its
broad array of commercial and consumer loan products. Fifth, it will present
Wesbanco with opportunities to market its WesMark Funds in significant growth
markets and give it an opportunity to expand its trust and investment services.
In summary, the Board of Directors of Wesbanco concluded that the in-market
consolidation synergies and cost saves, together with the market expansion
opportunities for products, services and new business, provided a unique balance
of consolidation and growth which would permit Wesbanco to expand its markets
while at the same time increasing earnings through a significant consolidation
in a meaningful way.
The Board also considered the geographic overlay of American's offices
and Wesbanco's offices. American's offices match up well with Wesbanco's offices
north-south along the Ohio River providing offices in communities not presently
served by Wesbanco in several key communities. Additionally, American expands
Wesbanco's already existing distribution network along Interstate 70 by
expanding east-west from Washington, Pennsylvania, to Columbus, Ohio. Finally,
they also add an office in Cambridge, Ohio, which completes a triangular
expansion permitting Wesbanco to provide full coverage north-south along
Interstate 77 from Parkersburg, West Virginia, to Cambridge, Ohio, and east-west
along Interstate 70 from Wheeling, West Virginia, to Cambridge, Ohio. This
expansion would permit Wesbanco to fill in gaps in existing markets and tie
together communities and markets where it already has a significant presence.
INTEREST OF CERTAIN PERSONS IN THE MERGER
As of [record date], directors and officers of American beneficially
owned, in the aggregate, [942,638] shares of American common stock, representing
approximately [30.12%] of the outstanding shares of American common stock.
All of American's directors and officers that own American common stock
will, as a result of the merger, obtain an equity interest in Wesbanco in
exchange for their shares of American common stock. Each of them will receive
the same number of shares of Wesbanco common stock for each share of American
common stock owned by him or her as every other American shareholder. Directors
and officers of American will be treated the same as other American
shareholders, except that they may be subject to certain restrictions on any
resale of Wesbanco common stock received by them pursuant to the merger.
As of the [record date], American Bancorporation held 1,182 shares of
Wesbanco common stock. As of [record date], the trust department of Wesbanco
Bank held 20,216 shares of American common stock. Wesbanco Bank has
discretionary voting authority over 7,906 of these shares. Except for the shares
held by Wesbanco Bank's trust department, neither Wesbanco nor any director,
executive officer or affiliate of Wesbanco owns shares of American common stock.
Except as described above in the summary and below, no director, officer or
affiliate of American has any special interest in the merger or is receiving any
special consideration or compensation as a result of the merger.
33
No outstanding transactions between American or Wesbanco and their
respective affiliates, and any director, officer, or principal shareholder of
American or Wesbanco or their respective associates, including any outstanding
loans or trust relationships, will be affected by the merger.
Some officers and directors of American have interests in the merger
that are in addition to their interests as American shareholders generally. As
described below, some officers and directors of American will enter into
consulting agreements, employment agreements or severance agreements upon
completion of the merger.
Paul W. Donahie, a director and the Vice Chairman of Wheeling National
Bank, will resign as an executive officer of Wheeling National Bank upon
completion of the merger. Mr. Donahie has entered into a consulting agreement
with Wesbanco that will become effective upon the completion of the merger
pursuant to which he will provide such services as Wesbanco may request from
time to time, and Wesbanco will pay Mr. Donahie $10,000 per month, plus
expenses, for his services. The consulting agreement will terminate three months
after the later to occur of the merger of American's subsidiaries or the date of
the data processing conversion for American. The consulting agreement provides
generally that Mr. Donahie may not engage in the banking business within a 50
mile radius of Wheeling, West Virginia during the term of the consulting
agreement and for a period of 1 year thereafter.
Under American's severance plan, Mr. Donahie generally would be
entitled to a lump sum payment equal to 2.99 times his base salary following a
change of control of American if, following the change of control, he is
terminated or voluntarily resigns because he is not provided an employment
opportunity with the acquiring organization with comparable authority and the
same salary as he is then earning at American. Mr. Donahie has entered into a
severance plan clarification agreement with American and Wesbanco that provides
generally that any lump sum payment that would be payable to Mr. Donahie by
American as a result of the change of control of American will equal $857,802 or
such lesser amount as may be required to avoid the excise tax imposed on excess
parachute payments as defined under Section 280G of the Internal Revenue Code.
If Mr. Donahie does not voluntarily terminate the consulting agreement referred
to in the preceding paragraph within 3 months from the date of the merger, in
lieu of any payment to which he may have been entitled under the severance plan,
he shall be paid a lump sum cash payment equal to $857,802 as a retention
incentive payment.
Jeremy C. McCamic, American's Chief Executive Officer, will also resign
upon completion of the merger. Mr. McCamic has entered into a consulting
agreement with Wesbanco that will become effective upon completion of the merger
pursuant to which he will provide such services as Wesbanco may request from
time to time, and Wesbanco will pay Mr. McCamic $6,000 per month, plus expenses,
for his services. The consulting agreement also provides that Mr. McCamic will
be appointed to the Wesbanco Board of Directors and the Planning and
Acquisitions Committee thereof to serve until December 31, 2002. Mr. McCamic
will be paid additional attendance fees as a member of Wesbanco's Board of
Directors, but will not receive the quarterly retainer fee that would otherwise
be payable to a member of Wesbanco's Board of Directors. Mr. McCamic's
consulting agreement will terminate on the 6th anniversary of the merger and
provides generally that he may not engage in the banking business within a 50
mile radius of Wheeling, West Virginia during the term of the consulting
agreement.
Under American's severance plan, Jeremy C. McCamic generally would be
entitled to an annuity that pays $10,000 per month for 12 years or the remainder
of this life, whichever is longer, following a change of control of American if,
following the change of control, he is terminated or voluntarily resigns because
he is not provided an opportunity with the acquiring organization with
comparable authority and the same compensation as he is then earning at
American. Mr. McCamic has entered into a severance plan clarification agreement
with American and Wesbanco that provides for the payment of a monthly annuity of
$9,000 for the remainder of Mr. McCamic's life with a minimum term certain of 12
years in full satisfaction of the benefits that may otherwise have been payable
to Mr. McCamic as a result of the change of control of American. The agreement
provides, however, that the present value of this annuity payment will equal
$969,970 or such lesser amount as may be required to avoid the excise tax
imposed on excess parachute payments as definded under Section 280G of the
Internal Revenue Code. In the event that an excise tax is imposed on Mr.
McCamic, Wesbanco has agreed to reimburse Mr. McCamic for the amount of such
excise tax. Mr. McCamic has assumed any income tax liability arising from the
excise tax reimbursement, if any.
John E. Wait, the President of Wheeling National Bank, has entered into
an employment agreement with Wesbanco Bank pursuant to which, following the
merger, he will be paid an annual base salary of not less than $185,000. The
term of Mr. Wait's employment agreement is three years, and will automatically
renew for successive three year terms unless written notice of termination is
given by either party at least 90 days prior
34
to the relevant anniversary date of the agreement. If the agreement terminates
due to Mr. Wait's death, his surviving spouse or estate will be paid an amount
equal to 6 months of his then current base salary (unless his death occurs
within 6 months of the normal retirement date as provided in Wesbanco Bank's
pension plan or after such retirement date, in which case his surviving spouse
or estate will be paid an amount equal to 1 month of his then current base
salary). If Wesbanco Bank attempts to terminate the employment agreement other
than for "cause," Mr. Wait's death or by mutual agreement, Mr. Wait will be
entitled to receive an amount equal to the greater of (i) 6 months base salary
at his then current base rate or (ii) the base salary he would have received if
he was continually employed pursuant to the agreement for the remainder of the
then current term of the agreement.
Under American's severance plan, Mr. Wait generally would be entitled
to a lump sum payment equal to 2.99 times his base salary following a change of
control of American if, following the change of control, he is terminated or
voluntarily resigns because he is not provided an employment opportunity with
the acquiring organization with comparable authority and the same salary as he
is then earning at American. Mr. Wait has entered into a severance plan
clarification agreement with American and Wesbanco that provides generally that
any lump sum payment that may be paid to him by American as a result of the
change of control of American will equal $500,994 or such lesser amount as may
be required to avoid the excise tax imposed on excess parachute payments as
defined under Section 280G of the Internal Revenue Code. If Mr. Wait does not
voluntarily terminate his employment within 18 months from the date of the
merger, in lieu of any payment to which he may be entitled under the severance
plan, he shall be paid a lump sum cash payment equal to $500,994 as a retention
incentive payment.
Brent E. Richmond, the President of American, has entered into an
employment agreement with Wesbanco Bank that is identical to the agreement with
Mr. Wait, except Mr. Richmond's annual base salary following the merger shall
not be less than $125,000. Under American's severance plan, Mr. Richmond
generally would be entitled to a lump sum payment equal to 2.99 times his base
salary following a change of control of American if, following the change of
control, he is terminated or voluntarily resigns because he is not provided an
employment opportunity with the acquiring organization with comparable authority
and the same salary as he is then earning at American. Mr. Richmond has entered
into a severance plan clarification agreement with American and Wesbanco that
provides generally that any lump sum payment that may be paid to him by American
as a result of the change of control of American will equal $517,919 or such
lesser amount as may be required to avoid the excise tax imposed on excess
parachute payments as defined under Section 280G of the Internal Revenue Code.
If Mr. Richmond does not voluntarily terminate his employment within 9 months
from the date of the merger, in lieu of any payment to which he may be entitled
under the severance plan, he shall be paid a lump sum cash payment equal to
$517,919 as a retention incentive payment.
Patrick G. O'Brien, the Senior Vice President of Wheeling National
Bank, currently has an employment agreement with the Wheeling National Bank that
provides for, among other things, a payment to Mr. O'Brien in the event of a
change of control of Wheeling National Bank. Mr. O'Brien has entered into an
amendment to his employment agreement that will become effective upon
consummation of the merger and eliminates the change of control provision in
exchange for a lump sum payment equal to his annual salary as of the closing of
the merger. This payment will be made only if Mr. O'Brien does not voluntarily
terminate his employment for a period of 36 months after the merger, and the
payment will be in lieu of any payment to which he may have been entitled under
the change of control provision of his employment agreement.
McCamic & McCamic provides legal services to American under a fixed
retainer engagement agreement between the parties. Jeremy C. McCamic, Jolyon W.
McCamic, Jeffery W. McCamic and Jay T. McCamic are partners in McCamic &
McCamic, each serves as a director of American and all are related. The
engagement letter has been amended, effective upon consummation of the merger,
to reduce the monthly retainer payable to McCamic & McCamic from $25,000 to
$6,000 for a term of six (6) years following the merger. McCamic & McCamic will
be permitted to maintain hospitalization insurance for its employees through
Wesbanco's hospitalization insurance program upon payment of the premiums so
long as a member of the firm serves on the Wesbanco or an affiliate company's
Board of Directors.
EFFECTS OF THE MERGER: THE SURVIVING CORPORATION
The merger will become effective at the time the Articles of Merger are
filed with, and the Certificate of Merger is issued by, the Secretary of State
of the State of West Virginia. At that time, the separate existence of American
will cease and AB Corporation will be the surviving corporation. The assets,
liabilities, and capital of
35
American will be merged into AB Corporation and those assets, liabilities and
capital will then constitute part of the assets, liabilities and capital of AB
Corporation. AB Corporation will continue to operate under its Articles of
Incorporation and Bylaws effective as of the day of the merger, and the officers
and directors of AB Corporation will continue as the officers and directors of
the surviving corporation. Following the completion of the merger, Wheeling
National Bank will be merged into Wesbanco Bank and AB Corporation will be
merged into Wesbanco. The Articles of Incorporation and Bylaws of Wesbanco will
be unaffected by the merger. The tenure of the directors and officers of
Wesbanco immediately prior to the merger will be unaffected by the merger.
Giving effect to the American merger, American would have, as of
September 30, 2001, on a pro forma consolidated basis, constituted approximately
20.3% of deposits, 21.7% of assets, and 14.2% of equity of Wesbanco, and its
shareholders would have held approximately 16.1% of the total outstanding shares
of Wesbanco. In addition, for the nine months ended September 30, 2001, American
would have contributed approximately 14.3% of net interest income and 11.2% of
net income to Wesbanco on a pro forma consolidated basis.
These percentages reflect the relative size of American as of September
30, 2001 and may change with the normal variances in the rates of growth for
deposits and loans for all Wesbanco affiliates. Additionally, it is contemplated
that Wesbanco may combine with other financial institutions in the future and
these mergers may affect the percentages shown above. Wesbanco is not presently
involved in any material merger transactions for which definitive agreements or
letters of intent have been executed.
MERGER OF SUBSIDIARY BANKS
On the date of the merger, Wheeling National Bank will be merged with
and into Wesbanco Bank. At that time, the separate existence of Wheeling
National Bank will cease and Wesbanco Bank will be the surviving corporation.
Wesbanco Bank will consolidate some of the 21 currently existing offices of
Wheeling National Bank acquired by reason of the merger and one additional
office that is scheduled to open in January of 2002. It is anticipated that at
least five offices of the combined bank will be consolidated after the merger.
In addition, one office of American will be sold to address a potential
anti-trust issue.
GOVERNMENT APPROVALS
Wesbanco and American have agreed to use their reasonable best efforts
to obtain all regulatory approvals required to consummate the acquisition, which
include approval from the Board of Governors of the Federal Reserve System and
the West Virginia Board of Banking and Financial Institutions, and have
completed the filing of these applications and notifications prior to the date
of this document. The approval of the West Virginia Board of Banking and
Financial Institutions was granted on June 11, 2001. The application with the
Federal Reserve was accepted for filing on November 8, 2001. The acquisition
cannot proceed in the absence of the Federal Reserve approval. There can be no
assurance that this regulatory approval will be obtained, and, if obtained,
there can be no assurance as to the date of such approval or the absence of any
litigation challenging such approval. Wesbanco and American are not aware of any
other material governmental approvals or actions that are required prior to the
parties' consummation of the acquisition other than those described below.
Federal Reserve Board. The acquisition is subject to approval by the
Federal Reserve Board pursuant to the Bank Holding Company Act of 1956 and the
Federal Reserve Act. Wesbanco has filed the required application and
notifications with the Federal Reserve Board for approval of the acquisition.
Assuming Federal Reserve Board approval, the acquisition may not be consummated
until thirty days after such approval, during which time the United States
Department of Justice ("DOJ") may challenge the acquisition on antitrust
grounds. With the approval of the Federal Reserve Board and the DOJ, the waiting
period may be reduced to no less than fifteen days. The Federal Reserve Board is
prohibited from approving any transaction under the applicable statutes that
would result in a monopoly, or that would be in furtherance of any combination
or conspiracy to monopolize or to attempt to monopolize the business of banking
in any part of the United States, or that may have the effect in any section of
the United States of substantially reducing competition, or tending to create a
monopoly, or resulting in a restraint of trade, unless the Federal Reserve Board
finds that the anti-competitive effects of the transaction are clearly
outweighed in the public interest by the probable effect of the transaction in
meeting the convenience and needs of the communities to be served.
36
In addition, in reviewing a transaction under the Bank Holding Company
Act, the Federal Reserve Board will consider the financial and managerial
resources of the companies and their subsidiary banks. It will also consider the
convenience and needs of the communities to be served. Under the Community
Reinvestment Act of 1977, the Federal Reserve Board will take into account the
performance record of each of Wesbanco and American in meeting the credit needs
of the entire community. Furthermore, the Bank Holding Company Act and Federal
Reserve Board regulations require publication of notice of, and the opportunity
for public comment on, the application submitted by Wesbanco for approval of the
acquisition, and authorize the Federal Reserve Board to hold a public hearing or
meeting in connection therewith if the Federal Reserve Board determines that
such a hearing or meeting would be appropriate. Any hearing, meeting or comments
from third parties could prolong the review of our application.
If the DOJ were to commence an antitrust action, it would stay the
effectiveness of Federal Reserve Board approval of the acquisition unless a
court specifically orders otherwise. In reviewing the acquisition, the DOJ could
analyze the acquisition's effect on competition differently than the Federal
Reserve Board. It is possible that the DOJ could reach a different conclusion
than the Federal Reserve Board regarding the acquisition's competitive effects.
In particular, the DOJ may focus on the impact of the acquisition on competition
for loans and other financial services to small and middle market businesses.
Failure of the DOJ to object to the acquisition may not prevent private persons
or state attorneys general from filing antitrust actions. Neither American nor
Wesbanco expects the merger to be challenged on anti-competitive grounds.
Wesbanco's right to exercise its option under the Stock Option
Agreement also requires the prior approval of the Federal Reserve Board, to the
extent that the exercise of their options under such Stock Option Agreement
would cause Wesbanco to own more than 5% of the outstanding shares of American.
In considering whether to approve Wesbanco's right to exercise the option, the
Federal Reserve Board would generally apply the same statutory criteria it would
apply to its consideration of approval of the acquisition.
RIGHTS OF DISSENTING SHAREHOLDERS
If you object to the merger and comply with Section 1701.85 of the Ohio
Revised Code, you are entitled to payment of the fair cash value of your shares.
The fair cash value of your shares is the amount a willing buyer who is under no
compulsion to buy would pay and a willing seller who is under no compulsion to
sell would be willing to accept. This amount will be determined as of the day
prior to the date of the Special Meeting without regard to any appreciation or
depreciation in anticipation of the merger. This value can never be greater than
the fair cash value you indicate in your written demand.
The following is a brief summary of the steps you must take to perfect
your dissenters' rights under Ohio law. This summary does not purport to be
complete and is subject in all respects to the provisions of, and is qualified
in its entirety by reference to, the provisions of Section 1701.85 of the Ohio
Revised Code, which is reproduced in full as Annex E to this Proxy
statement/prospectus.
You Must be a Record Holder of American Common Stock on the Record
Date. You must be the record holder of American common stock on [record date].
You Must Not Vote in Favor of the Merger. You must not vote your shares
in favor of the merger. You are not required to vote against the merger, but if
you vote for the merger you will lose your right to exercise dissenters' rights.
You Must Make Written Demand for Fair Cash Value. You must make written
demand on American, or the surviving corporation, for payment of the fair cash
value of your shares within 10 days after the vote is taken at the Special
Meeting. VOTING AGAINST THE MERGER DOES NOT CONSTITUTE THE DEMAND FOR PAYMENT
REQUIRED BY LAW. If you fail to make such written demand within the 10-day
period, you will be bound by the terms of the Merger Agreement. The written
demand must include your name, address, the number and class of dissenting
shares on which you seek relief and the amount you claim as the fair cash value
of those shares. The written demand should be addressed to American
Bancorporation, 1025 Main Street, Suite 800, Wheeling, West Virginia 26003. This
demand must be received by American on or before the tenth day after the vote at
the Special Meeting. Since actual receipt by American is required, if you choose
to mail your demand you might wish to consider using registered or certified
mail, return receipt requested.
37
You Must Deliver Your Share Certificates to American for Legending if
American so requests. American may send you a request at the address listed on
your written demand asking you to deliver your share certificates for legending.
If American makes such a request, you must deliver you share certificates to
American within 15 days of American sending its request. American may then
endorse your certificates with a legend indicating that you demanded fair cash
value for the shares represented by the certificates. Once this endorsement is
made, American must promptly return your certificates. If a request is made and
you fail to deliver your certificates within this 15 day period, you will lose
your rights as a dissenter at American's option. To exercise this option,
American must send you notice of the termination of your dissenters' rights
within 20 days after the lapse of the 15 day period. If American exercises this
right you will lose your dissenters' rights unless a court for good cause
determines otherwise.
You Must File a Petition in Court if You and American cannot Agree on
the Fair Cash Value of Your Shares. If you and American cannot agree on a fair
cash value for your shares, you may, within three months after the service of
your written demand letter, file a complaint or join another complaint in the
Court of Common Pleas for Belmont County. Failure to file such a complaint or
join such a complaint within the three-month period will result in termination
of your dissenters' rights. If such a suit is commenced, the court will
determine if you are entitled to be paid fair cash value and, if so, the court
may appoint appraisers to determine the fair cash value of your shares. If such
a determination is made, or if you and American agree upon a fair cash value,
and you follow the procedures in Section 1701.85 of the Ohio Revised Code, then
30 days after the fair cash value is determined or agreed upon American, or the
surviving corporation, will pay to you that value. When this payment is made you
must simultaneously surrender to American, or the surviving corporation, the
certificates representing your shares.
Your Rights as a Dissenting Shareholder. If you make such a demand and
follow the procedures of Section 1701.85 of the Ohio Revised Code, you shall
thereafter be entitled only to payment as a dissenting shareholder as provided
by law and you shall not be entitled to vote or to exercise any other rights of
a shareholder of American. Your right to be paid the fair cash value of your
shares will cease, and your status as a shareholder of American will be
restored, without prejudice to any corporate proceedings which may have been
taken during the interim, if any of the following events occurs:
o Failure to comply with Section 1701.85, unless such failure is
waived by American or the surviving corporation;
o your demand is withdrawn with the consent of American or the
surviving corporation;
o the merger is abandoned or rescinded;
o American is enjoined or prevented from carrying out the merger;
o the American shareholders revoke the authority to effect the merger;
o You and American cannot come to an agreement on the fair cash value
of your dissenting shares and neither you nor American file suit in
an appropriate Court of Common Pleas within the time period provided
by Section 1701.85(B); or
o a court of general civil jurisdiction determines that you are not
entitled to relief as a dissenting shareholder.
To exercise your dissenters' rights, strict adherence to the provisions
of Ohio law is required. If you think you may desire to exercise your
dissenters' rights, you should carefully review the statutory provisions
attached to this Proxy Statement/Prospectus as Annex E. As in all legal matters,
you would be well advised to seek the guidance of an attorney.
If you receive cash for the fair value of your shares of American
common stock, that cash will be subject to federal income taxes. The amount of
gain or loss and its character as ordinary or capital gain or loss will be
38
determined in accordance with Sections 302 and 1001 (and in certain cases, other
provisions) of the Internal Revenue Code of 1986. If you are contemplating the
possible exercise of dissenters' rights, you are urged to consult a tax advisor
as to the federal (and any applicable state and local) income tax consequences
resulting from such an election.
American believes that the 1.1 shares of Wesbanco common stock to be
issued in the tax-free merger in exchange for each share of American common
stock is fair and American does not anticipate a material number of shareholders
will exercise their dissenters' rights.
RESALE RESTRICTIONS
The shares of Wesbanco common stock that you will receive in the merger
will be registered under the Securities Act of 1933. Under current law, if you
are not an affiliate of Wesbanco or American within the meaning of Rule 144 or
145 under the Securities Act of 1933, you may sell or transfer any shares of
Wesbanco common stock that you receive in the merger without need of further
registration under the Securities Act of 1933.
If you are an affiliate of American before the merger or an affiliate
of Wesbanco after the merger, you may resell the shares of Wesbanco common stock
issued to you in the merger only:
o in transactions permitted by Rules 144 and 145 under the Securities
Act of 1933;
o pursuant to an effective registration statement; or
o in transactions exempt from registration.
Generally, an executive officer, director or a principal shareholder or
other control person may be deemed to be an affiliate for these purposes. Other
shareholders would not be deemed to be affiliates. Rules 144 and 145, insofar as
relevant to shares acquired in the merger, impose restrictions on the manner in
which affiliates may make resales and also on the quantity of resales that such
affiliates, and others with whom they might act in concert, may make within any
three-month period.
It is a condition to Wesbanco's obligation to consummate the merger
that American deliver to Wesbanco a schedule specifying the persons who may be
deemed to be affiliates of American and use its best efforts to cause each
affiliate to deliver to Wesbanco, prior to the closing of the merger, an
affiliate's letter. An affiliate's letter is a letter that states that the
shares of Wesbanco common stock issued to an affiliate pursuant to the merger
will not be sold or otherwise disposed of except:
o in accordance with Rule 145 (where the affiliate has given Wesbanco
evidence of compliance with the rule reasonably satisfactory to
Wesbanco); or
o pursuant to an effective registration statement under the Securities
Act of 1933 unless such person has furnished to Wesbanco a no-action
or interpretive letter from the SEC or an opinion of counsel
reasonably satisfactory to Wesbanco that such transaction is exempt
from or otherwise complies with the registration requirements of the
Securities Act of 1933.
An affiliate's letter also acknowledges that the certificates
representing the shares of Wesbanco common stock received by the affiliate may
bear a legend regarding these restrictions.
ACCOUNTING TREATMENT
The merger will be accounted for as a purchase by Wesbanco. The
application of this accounting treatment is shown in the unaudited pro forma
condensed combined financial information included on pages [__] through [___] of
this Proxy Statement/Prospectus.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
The merger is conditioned upon receipt of a legal opinion from
Kirkpatrick & Lockhart LLP, counsel to Wesbanco, as to the principal federal
income tax consequences expected to result from the merger. The following
summary of the material federal income tax consequences expected to result from
the merger is qualified in its entirety by reference to the full text of the
opinion of Kirkpatrick & Lockhart LLP, including the assumptions upon which that
opinion is based. The opinion is filed as Exhibit 8.1 to the Registration
Statement of which this Proxy Statement/Prospectus is a part. Neither the
opinion nor this summary addresses any tax considerations under foreign, state
or local laws, or any federal income tax considerations to shareholders other
than individual United States citizens or residents who hold their shares of
Wesbanco common stock or American common stock as a capital asset within the
meaning of Section 1221 of the IRC.
No rulings have been or will be requested from the Internal Revenue
Service ("IRS") as to the federal income tax consequences of the merger. You
should be aware that the opinion of Kirkpatrick & Lockhart LLP is not binding on
the IRS and the IRS is not precluded from taking a different position.
Kirkpatrick & Lockhart LLP's opinion is based upon the federal income tax laws
as in effect on the date of the opinion and as those laws are currently
interpreted. There can be no assurance that future legislation, regulations,
administrative rulings or court decisions will not adversely affect the accuracy
of the statements contained herein or in the opinion.
The federal income tax consequences discussed below are conditioned
upon, and Kirkpatrick & Lockhart LLP's opinion is based upon, the accuracy, as
of the date of this Proxy Statement/Prospectus and at, as of and after the time
the merger becomes effective, of certain representations made to Kirkpatrick &
Lockhart LLP by officers of Wesbanco and American and of certain assumptions.
As of the date of this Proxy Statement/Prospectus, Wesbanco and
American believe that all of these representations and assumptions are now, and
will be at, as of and after the time the merger becomes effective, accurate. If
either Wesbanco or American learns before that time that the representations and
the assumptions are false or materially incorrect and that its counsel therefore
believes that the merger is unlikely to be treated as a tax-free reorganization,
then additional shareholder approval will be obtained before consummation of the
merger.
Subject to the limitations described above, Kirkpatrick & Lockhart LLP
will render an opinion to Wesbanco that the merger will have the following
federal income tax consequences:
o No gain or loss will be recognized by Wesbanco, American or AB
Corporation as a result of the transactions contemplated in the
Merger Agreement;
o No gain or loss will be recognized by the shareholders of American
as a result of their exchange of American common stock for Wesbanco
common stock, except to the extent any shareholder receives cash in
lieu of a fractional share or as a dissenting shareholder;
o If a shareholder of American receives cash instead of a fractional
share of Wesbanco common stock, the shareholder will be required to
recognize a gain or loss, measured by the difference between (1) the
amount of cash received instead of that fractional share, and (2)
the portion of the tax basis of that shareholder's shares of
American common stock allocable to that fractional share. This gain
or loss will be a capital gain or loss and will be a long-term
capital gain or loss if the share of American common stock exchanged
for that fractional share of Wesbanco common stock was held for more
than one year at the effective time of the merger and short-term
capital gain or loss if the share of American common stock exchanged
for that fractional share of Wesbanco common stock was held for one
year or less at the effective time of the merger;
o A shareholder of American common stock will have a tax basis in the
Wesbanco common stock received in the merger equal to (1) the tax
basis of the American common stock surrendered by that shareholder
in the merger, less (2) any tax basis of the American common stock
surrendered in the merger that is allocable to any fractional share
of Wesbanco common stock for which cash is received by that
shareholder;
40
o The holding period of the Wesbanco common stock received in exchange
for shares of American in the merger will include the holding period
for the shares of American common stock surrendered in the merger;
and
o A shareholder of American common stock who exercises dissenter's
rights with respect to such shareholder's shares of American common
stock and who receives payment for the stock in cash will generally
recognize capital gain or loss, measured by the difference between
(1) the shareholder's tax basis in the shares, and (2) the amount of
cash received.
The tax consequences of the merger may vary depending upon your
particular circumstances. YOU ARE URGED TO CONSULT YOUR OWN TAX ADVISOR TO
DETERMINE THE PARTICULAR TAX CONSEQUENCES OF THE MERGER TO YOU. The foregoing
discussion addresses only the United States federal income tax effects of the
merger. It does not address the applicability and effect of any state, local or
foreign income, property, transfer and other tax laws.
41
THE MERGER AGREEMENT
The following summary of the Merger Agreement is qualified in its
entirety by reference to the Merger Agreement and the First Amendment thereto,
copies of which are attached to this Proxy Statement/Prospectus as Annex A and
Annex B, respectively. You are urged to read these documents for a more complete
description of the merger.
THE MERGER
After approval of the Merger Agreement by American shareholders, and
the satisfaction or waiver of other conditions to the merger, American will be
merged with and into AB Corporation, with AB Corporation continuing as the
surviving corporation. The Articles of Incorporation and Bylaws of AB
Corporation immediately prior to the merger will constitute the Articles of
Incorporation and Bylaws of the surviving corporation.
CONVERSION OF SECURITIES
In the merger, each share of American common stock issued and
outstanding immediately prior to the time the merger becomes effective (subject
to certain exceptions) will be exchanged for and become, without action on the
part of the shareholder, the right to receive 1.1 shares of Wesbanco common
stock.
Shares of American common stock held by American in its treasury or
beneficially owned by AB Corporation or Wesbanco (other than in a fiduciary
capacity by them for others) will not be exchanged for shares of Wesbanco common
stock in the merger. Instead, these shares will be canceled and retired. Shares
of American common stock as to which dissenters' rights are properly exercised
also will not be exchanged for shares of Wesbanco common stock in the merger.
No fractional shares of Wesbanco common stock will be issued in the
merger. Instead, cash will be paid in lieu of fractional shares in an amount
based on a value of $22.31 per whole share of Wesbanco common stock.
Promptly after the merger becomes effective, Fifth Third Bank,
Wesbanco's stock transfer agent, will mail transmittal forms and exchange
instructions to each holder of record of American common stock to be used to
exchange shares of American common stock for shares of Wesbanco common stock.
These transmittal letters will be accompanied by instructions specifying other
details of the exchange. American shareholders should not send in their
certificates until they receive a transmittal form and instructions.
After the merger becomes effective, each certificate evidencing shares
of American common stock will be deemed to evidence only the right to receive:
o the number of shares of Wesbanco common stock that the holder is
entitled to receive by virtue of the merger; and
o the cash payment for any fractional share of Wesbanco common stock.
The holder of an unexchanged certificate will not receive any dividend
or other distribution payable by Wesbanco until the certificate has been
exchanged or, in the case of a lost certificate, until a lost certificate
agreement and lost certificate bond have been posted.
REPRESENTATIONS AND WARRANTIES
The Merger Agreement contains various customary representations and
warranties of American, Wesbanco, and AB Corporation. These representations and
warranties, which will terminate when the merger becomes effective, relate to,
among other things:
o the corporate organization and qualification of American, Wesbanco,
and Wesbanco's subsidiaries, including AB Corporation, and certain
similar corporate matters;
42
o the authorization, execution, delivery, and enforceability of the
Merger Agreement and related matters;
o the absence of any violation under the Articles of Incorporation and
Bylaws of American, Wesbanco, or Wesbanco's subsidiaries, or under
contracts or laws;
o the financial statements of each of American and Wesbanco;
o the absence of undisclosed suits, actions, proceedings, claims, or
investigations against either American, Wesbanco, or Wesbanco's
subsidiaries;
o the capital structure of American, American's subsidiaries,
Wesbanco, and AB Corporation;
o the absence of material undisclosed liabilities;
o title to properties;
o the accuracy of information provided in this Proxy
Statement/Prospectus;
o taxes, tax returns and audits, and certain tax matters;
o the absence of certain materially adverse changes or events;
o the maintenance of fidelity bonds by Wheeling National Bank and
Wesbanco Bank;
o certain employee benefit matters;
o the absence of labor disputes;
o the adequacy of reserves for possible loan losses; and
o the ownership by American and Wesbanco of their subsidiaries.
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF AMERICAN
American has also made representations and warranties relating to,
among other things:
o the material contracts of American;
o the absence of materially adverse contracts of American;
o the filing, delivery, completeness and accuracy of certain reports
under the Securities Exchange Act of 1934;
o the absence of change in the material assets, financial condition,
liabilities (contingent or otherwise), business or results of
operations of American or its subsidiaries;
o the absence of any material damage, destruction, or loss by reason
of fire, flood, accident or other casualty (whether or not insured)
which materially and adversely affects American or its subsidiaries'
assets, financial condition, business or operations;
o the absence, other than in the ordinary course of business, of the
lease, disposition of or an agreement to lease or dispose of
material properties or assets;
o the absence of change in the authorized, issued or outstanding
capital stock of American;
43
o except as provided for in the Merger Agreement, the absence of a
material change in the outstanding debt of American or any of its
subsidiaries, other than changes in the ordinary course of business;
o except as otherwise disclosed in the Merger Agreement, the absence
of any warrant, option or right to acquire American common stock or
an agreement to repurchase, redeem or otherwise acquire American
stock;
o the presence of personnel sufficient to adequately staff all key
positions in American and its subsidiaries as of the date the merger
becomes effective;
o the absence of any material increase in the compensation or fees
payable by American or its subsidiaries to their respective
directors or officers for services, other than increases in the
regular course of business in accordance with past practices or the
personnel policies of American or its subsidiaries;
o the absence of any material increase in expenditures for any bonus,
insurance, pension or other employee benefit plan, payment or
arrangement for or with any such directors or officers other than
increases in the regular course of business in accordance with past
practices or the personnel policies of American or its subsidiaries;
o the absence of any material loans or advances by American or its
subsidiaries other than in the ordinary course of business;
o the absence, other than in the ordinary course of business, of any
expenditure or major commitment for the purchase, acquisition,
construction or improvement of any material assets;
o the absence of any other material transactions, contracts, leases,
obligations or liabilities of American or any of its subsidiaries
other than in the ordinary course of business; and
o the absence of any other event, condition or development which
materially and adversely affects American or any of its
subsidiaries' material assets, financial condition or results of
operations.
ADDITIONAL REPRESENTATIONS AND WARRANTIES OF WESBANCO
Wesbanco has also made representations and warranties relating to,
among other things:
o the registration of Wesbanco as a bank holding company under the
Bank Holding Company Act of 1956;
o the authority of Wesbanco to issue shares of Wesbanco common stock
under the Merger Agreement and the validity of Wesbanco common stock
once issued;
o the absence of any material damage, destruction, or loss by reason
of fire, flood, accident or other casualty (whether or not insured)
which materially and adversely affects Wesbanco's assets, financial
condition, business or operations;
o the absence, other than in the ordinary course of business, of the
lease, disposition of or an agreement to dispose of material
properties or assets;
o the absence of change in the authorized, issued or outstanding
capital stock of Wesbanco;
o the absence of a material change in the outstanding debt of Wesbanco
or any of its subsidiaries, other than changes in the ordinary
course of business;
44
o other than previously announced stock repurchase agreements, the
absence of any warrant, option or right to acquire Wesbanco common
stock or an agreement to repurchase, redeem or otherwise acquire
Wesbanco stock;
o the absence of any material loans or advances by Wesbanco or its
subsidiaries other than in the ordinary course of business;
o the absence of any other material transactions, contracts, leases,
obligations or liabilities of Wesbanco or any of its subsidiaries
other than in the ordinary course of business;
o the absence, other than in the ordinary course of business, of any
expenditure or major commitment for the purchase, acquisition,
construction or improvement of any material assets;
o the absence of any dividends or other distributions declared or paid
on any Wesbanco common or preferred stock which, taken in the
aggregate with all other such distributions declared or paid in the
same tax year, exceed 65% of the after-tax income of Wesbanco for
the tax year in which paid;
o the business has been conducted by Wesbanco in the ordinary course
and in a manner consistent with past practice;
o the absence of changes to the Wesbanco Articles of Incorporation or
Bylaws which would in the reasonable opinion of American have a
material adverse effect on the rights of holders of Wesbanco common
stock;
o the absence of any other event, condition or development which
materially and adversely affects Wesbanco or any of its
subsidiaries' material assets, financial condition or results of
operations; and
o the absence of knowledge by Wesbanco or any of its subsidiaries of
any such event, condition or development which may materially or
adversely effect the material assets, financial condition or results
of operations of Wesbanco and its subsidiaries.
MUTUAL COVENANTS
Pursuant to the Merger Agreement, American and Wesbanco have agreed
that, until the merger becomes effective or the Merger Agreement is terminated,
whichever occurs first, each will, with some exceptions:
o use its best efforts to take, or cause to be taken, all actions
required under the Merger Agreement on its part to be taken so as to
permit the consummation of the merger at the earliest possible date;
o cooperate in furnishing information for the preparation and filing
of the Proxy Statement/Prospectus;
o cooperate in the filing of any regulatory applications with respect
to the merger; and
o advise the other party of any materially adverse change in its
financial condition, assets, business, or operations, or of any
material changes or inaccuracies in data provided to the other party
pursuant to the Merger Agreement.
ADDITIONAL COVENANTS OF AMERICAN
American has further agreed that:
o it will not make any change in its authorized capital stock;
45
o it will not issue any shares of American common stock, securities
convertible into American common stock, or any long term debt
securities;
o it will not issue or grant any options, warrants, or other rights to
purchase shares of American common stock;
o it will not declare or pay any dividends or other distributions on
any shares of American common stock other than American's regular
quarterly dividend of fifteen cents ($.15) per share consistent with
past practice;
o it will not purchase, otherwise acquire, or agree to acquire for
consideration any American common stock (other than in a fiduciary
capacity);
o except as otherwise contemplated by the Merger Agreement or required
by law, it will not amend any employment agreement, or any pension,
retirement, stock option, profit sharing, deferred compensation,
consultant, bonus, group insurance, or similar plan;
o it will not take any action materially and adversely affecting the
financial condition (present or prospective), businesses, properties
or operations of American;
o it will not acquire or merge with any other company or acquire any
branch or, other than in the ordinary course of business, any assets
of any other company;
o except in the ordinary course of business, it will not mortgage,
pledge, or subject any of its material assets to a lien or other
encumbrance, dispose of any material asset, or incur or cancel any
material debts or claims;
o it will not increase any compensation or benefits payable to its
officers or employees, except in the ordinary course of its business
as heretofore conducted;
o it will not take any other action not in the ordinary course of its
business as heretofore conducted or incur any material obligation or
enter into any material contract;
o it will not amend its Articles of Incorporation or Bylaws, except as
necessary to carry out the merger or as required by law;
o it will promptly advise Wesbanco in writing of the name and address
of, and the number of shares of American common stock held by, each
shareholder who elects to exercise his or her right to dissent from
the merger;
o it will operate its business only in the ordinary course and
consistent with past practice;
o it will not, and will not permit any person acting on its behalf to,
solicit any acquisition proposal, including any proposal to merge or
consolidate with, or acquire all or any substantial portion of the
assets of, American, or any tender or exchange offer (or proposal to
make any tender or exchange offer) for any shares of American common
stock, or any proposal to acquire more than 5% of the outstanding
shares of American common stock or any options, warrants, or rights
to acquire, or securities convertible into or exchangeable for, more
than 5% of the outstanding shares of American common stock;
o it will advise promptly Wesbanco of any material adverse change in
the financial condition, assets, businesses or operations or
inaccuracies in data provided to Wesbanco;
o it will maintain its insurance at existing levels;
46
o it will furnish information concerning the business and affairs of
American and its subsidiaries reasonably necessary to prepare and
file the Proxy Statement/Prospectus or any application for
regulatory or governmental approvals;
o it will use its best efforts to obtain the approval and consent of
any federal, state or other regulatory agency to the merger;
o it will obtain a perfected first lien or security interest in or
evidence of ownership in book entry form of the government
securities or other collateral securing any repurchase agreements,
and ensure that the value of such collateral equals or exceeds the
amount of the debt secured thereby; and
o it will adhere to prudent business practices and all applicable
laws, rules, regulations and regulatory policies and only select
counter-parties believed to be financially responsible when engaging
in all material interest rate swaps, caps, floors, option
agreements, mortgage-backed securities, futures and forward
contracts and other similar risk management arrangements.
ADDITIONAL COVENANTS OF WESBANCO
Wesbanco has further agreed that:
o it will prevent AB Corporation from conducting any business
operations other than activities that are necessary to consummate
the merger;
o as of the time the merger becomes effective, it will appoint Jeremy
C. McCamic and Abigail M. Feinknopf to the Board of Directors of
Wesbanco. Jeremy C. McCamic will serve as a member of the Board of
Directors until December 31, 2002, at which time he will resign and
be replaced by Jay T. McCamic who will be appointed by the Wesbanco
Board of Directors to serve the unexpired term;
o as of the time the merger becomes effective until December 31, 2002,
it will appoint Jeremy C. McCamic to the Wesbanco Executive
Committee to the Board of Directors;
o upon the resignation of Jeremy C. McCamic, it will place Abigail M.
Feinknopf and Jay T. McCamic on the list of nominees for the
position of Wesbanco director for which the Board of Directors will
solicit proxies at its next annual meeting of shareholders until
each has served at least a full three year term as a director of
Wesbanco;
o it will take such action, including amending its Bylaws, as is
necessary to permit Jeremy C. McCamic to serve as a member of the
Wesbanco Board of Directors beyond his 70th birthday and until
December 31, 2002;
o as of the time the merger becomes effective, it will appoint Jack A.
Cartner, Jolyon W. McCamic and Jeffrey W. McCamic to the Wesbanco
Bank Board of Directors;
o Jack A. Cartner, Jolyon W. McCamic and Jeffrey W. McCamic will serve
on the Board of Directors of Wesbanco Bank until December 31, 2002
at which time the terms of Jack A. Cartner and Jolyon W. McCamic
will expire and they will resign from the Board of Directors;
o it will take such action, including amending the Wesbanco Bank
Bylaws, as is necessary to permit Jack A. Cartner and Jolyon W.
McCamic to serve as members of the Wesbanco Bank Board of Directors
beyond their 70th birthday and until December 31, 2002;
o after the resignation of Jack A. Cartner and Jolyon W. McCamic,
Jeffrey W. McCamic will continue to serve as a member of the Board
of Directors of Wesbanco Bank until his successor is duly elected
and qualified;
47
o prior to or at the closing of the merger, it will deliver to Fifth
Third Bank shares of Wesbanco common stock and cash sufficient in
amount to meet the requirements of the merger;
o it will obtain a perfected first lien or security interest in or
evidence of ownership in book entry form of the government
securities or other collateral securing any repurchase agreements,
and ensure that the value of such collateral equals or exceeds the
amount of the debt secured thereby; and
o it will adhere to prudent business practices and all applicable
laws, rules, regulations, and regulatory policies and only select
counter-parties believed to be financially responsible when engaging
in all material interest rate swaps, caps, floors, option
agreements, mortgage backed securities, futures and forward
contracts and other similar risk management arrangements.
CONDITIONS TO OBLIGATIONS OF THE PARTIES
The respective obligations of American and Wesbanco to effect the
merger are subject to the following conditions, among others:
o the approval of the Merger Agreement by the shareholders of
American;
o the approval by the Board of Governors of the Federal Reserve System
of (i) the application of Wesbanco to acquire American, (ii) the
merger of American into AB Corporation and (iii) the merger of
Wheeling National Bank into Wesbanco Bank;
o the effective status of the Registration Statement on the date the
merger closes and a declaration of effectiveness regarding, or a
withdrawal of, all post-effective amendments thereto by that date;
o the absence of a pending or threatened stop order or proceedings
seeking a stop order suspending the effectiveness of the
Registration Statement or any amendments thereto;
o the absence of any order to restrain, enjoin, or otherwise prevent
the consummation of the merger entered by any court or
administrative body which remains in effect on the date the merger
closes;
o the receipt of all material governmental or other consents,
approvals, and permissions;
o the receipt of all consents required by the Merger Agreement to be
obtained by Wesbanco and American;
o the exercise of dissenters' rights in accordance with the Ohio
Revised Code by not more than 10% of the holders of American common
stock;
o on or before the date the merger closes, the receipt of an opinion
from tax counsel for Wesbanco to the effect that for federal income
tax purposes the merger will be treated as a tax-free reorganization
within the meaning of Section 368(a) of the IRC, and regarding
certain other tax matters;
o the absence of any action, proceeding, regulation, or legislation
before any court, governmental agency, or legislative body to
enjoin, restrain or prohibit, or to obtain substantial damages with
respect to, the Merger Agreement or the consummation of the
transactions contemplated therein;
o the absence of any required divestiture or cessation of any
significant part of the present operations of American, Wesbanco, or
any of their subsidiaries;
o the accuracy in all material respects of the representations and
warranties of the parties and the performance by the parties in all
material respects of all of their obligations set forth in the
Merger Agreement, and the receipt of a certificate from an
appropriate officer certifying the foregoing;
48
o the receipt of legal opinions from the parties' counsel; and
o the delivery of certified copies of the resolutions duly adopted by
the boards of directors and the shareholders of American, AB
Corporation and Wesbanco Bank, and the Board of Directors of
Wesbanco approving the Merger Agreement and authorizing the
transactions contemplated therein.
CONDITIONS TO OBLIGATIONS OF WESBANCO
In addition to the conditions discussed above, the consummation of the
merger by Wesbanco is conditioned upon:
o Jeremy C. McCamic and Paul W. Donahie having resigned as officers of
American and its subsidiaries;
o the receipt of a schedule identifying all persons who may be deemed
to be affiliates of American under Rule 145 of the Securities Act of
1933, and the delivery of affiliate letters by those persons; and
o the absence of any suit, action, or proceeding pending against
American or its officers or directors in their capacity as such,
which, in the reasonable judgment of Wesbanco would, if successful,
have a materially adverse effect on the financial condition or
operations of American or Wheeling National Bank.
CONDITIONS TO OBLIGATIONS OF AMERICAN
The consummation of the merger by American is also conditioned upon the
absence of any suit, action, or proceeding pending against Wesbanco or any of
its subsidiaries or the officers or directors of Wesbanco or of any of its
subsidiaries in their capacity as such, which, in the reasonable judgment of
American would, if successful, have a materially adverse effect on the financial
condition or operations of Wesbanco or any of its subsidiaries.
TERMINATION; EXPENSES
The Merger Agreement may be terminated at any time prior to the closing
of the merger, either before or after the Special Meeting of American
shareholders:
o by mutual consent of American and Wesbanco;
o by either American or Wesbanco if any of the conditions to such
party's obligations to close under the Merger Agreement have not
been met as of the date the merger is to close and such conditions
have not been waived by the party adversely affected thereby;
o by either American or Wesbanco if the merger will violate any
non-appealable final order, decree, or judgment of any court or
governmental body having competent jurisdiction;
o by either American or Wesbanco if the merger has not closed by March
31, 2002;
o by either American or Wesbanco in the event that the majority
shareholders of American vote against consummation of the merger;
and
o by American if the average bid price for Wesbanco common stock for
the thirty (30) calendar days preceding the fifth business day
before closing of the merger shall fall below $16.00 per share.
In the event of any termination of the Merger Agreement by either
American or Wesbanco as provided above, all further obligations of American and
Wesbanco under the Merger Agreement, except with respect to specified matters,
including without limitation those related to confidentiality and expenses, will
terminate without further liability of the parties.
49
Whether or not the merger is consummated, all legal and accounting
fees, and other costs and expenses incurred in connection with the Merger
Agreement and the transactions contemplated therein, will be paid by the party
incurring such expenses.
AMENDMENT OR WAIVER
The provisions of the Merger Agreement may be waived at any time by the
party which is, or the shareholders of which are, entitled to the benefit of
those provisions, by action taken by the Board of Directors of that party. Any
of the terms of the Merger Agreement may be amended or modified in writing
before or after the Special Meeting of American shareholders at any time prior
to the closing of the merger. The conversion ratio and any other material terms
of the merger will not be amended after the Special Meeting of American
shareholders unless the amended terms are resubmitted to the shareholders of
American for approval.
The Merger Agreement may not be modified or terminated except by a
written statement signed by the party against which the enforcement of the
modification or termination is sought.
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STOCK OPTION AGREEMENT
In connection with the Merger Agreement, American granted Wesbanco an
option to purchase up to 622,805 shares of American common stock at a price of
$18.00 per share pursuant to the Stock Option Agreement, dated February 22,
2001, a copy of which is attached hereto as Annex C. The Stock Option Agreement
could discourage other companies from trying or proposing to combine with
American before the completion of the merger.
If American issues or agrees to issue any shares of American common
stock (other than as permitted by the Merger Agreement) at a price less than
$18.00 per share, the exercise price per share under the option agreement will
be reduced to that lower price. If any change in American common stock occurs by
reason of stock dividends, split-ups, mergers, recapitalizations, combinations,
exchanges of shares or the like, the type and number of shares subject to the
option, and the purchase price per share, will be adjusted appropriately. Also,
if American issues additional shares of its common stock after the date of the
option agreement (other than pursuant to the option agreement), the number of
shares of American common stock subject to the option shall be adjusted so that
it is exercisable for 19.9% of the number of shares of American common stock
issued and outstanding after such issuance.
Wesbanco may exercise the option only if one of the following events
(each, a "Purchase Event") occurs after the date of execution of the option
agreement:
(i) any person (other than Wesbanco, an affiliate thereof, American
or Wheeling National Bank) has commenced a bona fide tender or
exchange offer to purchase shares of American common stock such
that upon consummation of such offer such person would own or
control 15% or more of the outstanding shares of American common
stock;
(ii) any person (other than American or Wheeling National Bank),
other than in connection with a transaction to which Wesbanco
has given its prior written consent, has filed an application or
notice with any federal or state regulatory agency for clearance
or approval, to (x) merge, consolidate or enter into any similar
transaction with American or Wheeling National Bank, (y)
purchase, lease or otherwise acquire all or substantially all of
the assets of American or Wheeling National Bank, or (z)
purchase or otherwise acquire (including by way of merger,
consolidation, share exchange or any similar transaction)
securities representing 51% or more of the voting power of
American or Wheeling National Bank;
(iii) any person (other than Wesbanco, an affiliate thereof,
American, Wheeling National Bank, individually or in a fiduciary
capacity, or any Wesbanco subsidiary individually or in a
fiduciary capacity) has acquired beneficial ownership or the
right to acquire beneficial ownership of 15% or more of the
outstanding shares of American common stock;
(iv) any person (other than American or Wheeling National Bank) shall
have made a bona fide proposal to American by public
announcement or written communication that is or becomes the
subject of public disclosure to (x) acquire American or Wheeling
National Bank by merger, consolidation, purchase of all or
substantially all of its assets or any other similar
transaction, or (y) make an offer described in paragraph (i)
above; or
(v) American shall have willfully breached Section 8.21(d) of the
Merger Agreement and that breach entitles Wesbanco to terminate
the Merger Agreement and such breach has not been cured prior to
the date on which Wesbanco shall notify American of its intent
to exercise the option.
The option may be exercised in whole or in part, at one or more
closings, at any time (or from time to time) if a Purchase Event has occurred,
continues to occur, and the option agreement has not terminated. The option
agreement provides that to the extent that it shall have not been exercised, the
option shall terminate:
51
(a) on the effective date of the merger;
(b) upon the termination of the Merger Agreement in accordance
with its provisions (other than a termination resulting from
a willful breach by American of Section 8.21(d) of the
Merger Agreement or, following the occurrence of a Purchase
Event, the failure of American's shareholders to approve the
Merger Agreement by the vote required under applicable law);
or
(c) six months after termination of the Merger Agreement due to
a willful breach by American of Section 8.21(d) of the
Merger Agreement or, following the occurrence of a Purchase
Event, failure of American's shareholders to approve the
Merger Agreement by the vote required under applicable law.
If at any time during the 18 months immediately following the first
purchase of shares of American common stock pursuant to the option, Wesbanco
desires to sell, assign, transfer or otherwise dispose of all or any of the
shares of American common stock acquired by it pursuant to the option, it will
offer American an opportunity to purchase such shares on the same terms and
conditions and at the same price at which Wesbanco is proposing to transfer such
shares to a third party, subject to the provisions and exceptions set forth in
the option agreement.
Prior to the expiration of the option according to the terms of the
option agreement, at the request of Wesbanco, American shall repurchase the
option from Wesbanco upon the consummation of one of the following Purchase
Events:
(i) the consummation of a merger, consolidation, purchase, lease or
acquisition of all or substantially all of the assets of
American, purchase or other acquisition of securities
representing 51% or more of the voting power of American or any
subsidiary of American, or
(ii) a willful breach under Section 8.21(d) of the Merger Agreement
that entitles Wesbanco to terminate such agreement.
American shall repurchase the option from Wesbanco at a price equal to
the difference between the market/offer price (as defined in the option
agreement) for shares of American common stock and the option price, multiplied
by the number of shares for which the option being surrendered hereunder may
then be exercised but only if the market/offer price is greater than the option
price.
The option agreement provides that at the request of Wesbanco, American
will file a registration statement in order to permit the sale or other
disposition of the shares of American common stock that have been acquired
pursuant to the option with the intended method of sale or other disposition
requested by Wesbanco. American will use its best efforts to cause the
registration statement first to become effective and then to remain effective
for a period not in excess of 270 days from the day the registration statement
first becomes effective as may be reasonably necessary to conduct such sales or
other dispositions.
52
COMPARATIVE RIGHTS OF SHAREHOLDERS
DESCRIPTION OF WESBANCO CAPITAL STOCK
The authorized capital stock of Wesbanco consists of 50,000,000 shares
of common stock, par value $2.0833 per share, and 1,000,000 shares of preferred
stock without par value. As of September 30, 2001, there were approximately
17,943,535 shares of Wesbanco common stock outstanding, held of record by
approximately 5,179 holders.
As of the date of this Proxy Statement/Prospectus, there were no shares
of preferred stock outstanding. Shares of preferred stock may be issued in one
or more classes or series with such preferences, voting rights, full or limited,
but not to exceed one vote per share, conversion rights and other special rights
as the Wesbanco Board of Directors may fix in the resolution providing for the
issuance of the shares. The issuance of shares of preferred stock could affect
the relative rights of the Wesbanco common stock.
Depending upon the exact terms, limitations and relative rights and
preferences, if any, of the shares of preferred stock as determined by the Board
of Directors at the time of issuance, the holders of preferred stock may be
entitled to a higher dividend rate than that paid on the Wesbanco common stock,
a prior claim on funds available for the payment of dividends, a fixed
preferential payment in the event of liquidation and dissolution of Wesbanco,
redemption rights, rights to convert their preferred stock into shares of
Wesbanco common stock, and voting rights which would tend to dilute the voting
control of Wesbanco by the holders of Wesbanco common stock.
Subject to the above limitations, in the event of any liquidation,
dissolution or winding up of Wesbanco, and subject to the application of state
and federal laws, holders of Wesbanco common stock are entitled to share ratably
in the assets available for distribution to stockholders remaining after payment
of Wesbanco's obligations.
Each share of Wesbanco common stock is entitled to one vote, and to
cumulate votes in the election of directors. No holder of shares of Wesbanco
common stock has any preemptive right to subscribe for or purchase any other
securities of Wesbanco, and there are no conversion rights or redemption or
sinking fund provisions applicable to Wesbanco common stock. However, Wesbanco
elects directors on a staggered basis by class with terms of three years. This
provision of its Articles of Incorporation requires a super majority vote of its
shareholders to change.
COMPARISON OF RIGHTS OF WESBANCO AND AMERICAN SHAREHOLDERS
The rights of the American shareholders and the Wesbanco shareholders
are governed by the respective Articles of Incorporation and Bylaws of each
corporation and Ohio and West Virginia law, respectively. In many respects, the
rights of American shareholders and Wesbanco shareholders are similar. For
example:
o Holders of common stock of each corporation are entitled to one vote
for each share of common stock and to receive pro rata any assets
distributed to shareholders upon liquidation.
o Neither corporation's shareholders have preemptive rights.
o The shareholders of both corporations have the right under Ohio and
West Virginia law to dissent from certain corporate transactions and
to elect dissenters' rights.
o The shareholders of both corporations either have or may invoke
cumulative voting in the election of directors.
o The shareholders of both corporations elect directors for staggered
terms of three years, with no more than one-third of the directors
being elected in any one year.
53
DIFFERENCES IN RIGHTS
There are, however, differences between the rights of American
shareholders and Wesbanco shareholders. The material differences are summarized
in the table below:
- ----------------------------------------------------------------------------------------------------------------------
AMERICAN WESBANCO
- ----------------------------------------------------------------------------------------------------------------------
Corporate Governance: The rights of American shareholders are The rights of Wesbanco shareholders are
governed by Ohio corporate law and the governed by West Virginia law and the
Articles of Incorporation and code of Articles of Incorporation and Bylaws of
regulations of American. Wesbanco.
- ----------------------------------------------------------------------------------------------------------------------
Board of Directors: The American board consists of The Wesbanco board consists of 24
10 directors that are elected for directors, and, immediately following the
staggered terms of three years, with no merger will consist of 26 directors that
more than one-third of the directors being are elected for staggered terms of three
elected in any one year. years, with no more than one-third of the
directors being elected in any one year.
- ----------------------------------------------------------------------------------------------------------------------
Election of Directors: Each share of common stock entitles the Under West Virginia law and the provisions
holder of record to one vote on each of Wesbanco's Articles of Incorporation,
matter submitted to shareholders including Wesbanco shareholders are allowed to
the election of directors. However, under cumulate their votes in the election of
the laws of Ohio applicable to shareholder directors. Each share of Wesbanco stock
meetings, a notice in writing may be given may be voted for as many individuals as
by any shareholder to the President, a there are directors to be elected.
Vice President or the Secretary of the Directors are elected by a plurality of
Company, not less than 48 hours before the the votes cast by the holders entitled to
time fixed for holding a meeting of vote at the meeting.
shareholders for the purposes of electing
directors, that the shareholder desires
that the voting at such election be
cumulative, and provided an announcement
of the giving at such notice is made upon
the convening of the meeting by the
Chairman or Secretary or by or on behalf
of such shareholder, then each holder of
common shares shall have cumulative voting
rights in the election of directors. In
cumulative voting, directors are elected
by a plurality of the votes cast by the
holders entitled to vote at the meeting.
- ----------------------------------------------------------------------------------------------------------------------
54
- ----------------------------------------------------------------------------------------------------------------------
Amendment of Articles of Under Ohio law, Articles of Incorporation Under West Virginia law, the Wesbanco
Incorporation and Bylaws: may be amended by the affirmative vote of Articles of Incorporation or Bylaws may be
two-thirds of the voting power of the amended by the affirmative vote of a
corporation, unless otherwise specified in majority of all votes of shareholders
the corporation's Articles of entitled to be cast on the matter, unless
Incorporation. American's Articles of a different number is specified in the
Incorporation permit American Articles of Incorporation. The Wesbanco
shareholders to amend the Articles of Bylaws require that the affirmative vote
Incorporation by the affirmative vote of a of the holders of not less than 75% of the
majority of the voting power of the outstanding shares of the voting stock of
corporation. the corporation will be required to amend
or repeal the Articles of Incorporation
provisions dealing with the classification
of directors into three separate classes,
each to serve a staggered term of three
years. An abstention is not considered
a "vote cast" for purposes of the voting
requirements, but a shareholder who
abstains in person or by proxy is
considered present for purposes of the
quorum requirement.
- ----------------------------------------------------------------------------------------------------------------------
Special Meetings of Under Ohio law, the holders of at least A special meeting of shareholders of a
shareholders: 25% of the outstanding shares of a West Virginia corporation may be called by
corporation, unless the corporation's the Board of Directors, at least 10% of
regulations specify another percentage, the shareholders, or any person designated
which may in no case be greater than 50%, in the Articles of Incorporation or
the directors, by action at a meeting or a Bylaws. The Wesbanco bylaws permits the
majority of the directors acting without a President to call a special meeting of
meeting, the Chairman of the Board, the shareholders.
President or, in the case of the
President's death or disability, the Vice
President authorized to exercise the
authority of the President have the
authority to call special meetings of
shareholders. The American code of
regulations does not require more than 25%
of the outstanding shares of the
corporation to call a special meeting.
- ----------------------------------------------------------------------------------------------------------------------
Restrictions on Business Chapter 1704 of the Ohio Revised Code West Virginia corporate law does not
Combinations: prohibits an interested shareholder from contain statutory provisions concerning
engaging in a wide range of "business restrictions on business combinations.
combinations." Under Chapter 1704 of
the Ohio Revised Code, an interested
shareholder includes a shareholder who,
directly or indirectly, exercises
or directs the exercise of 10% or
more of the voting power of the
corporation. The Chapter 1704 restrictions
do not apply under certain
circumstances, including, but not limited
to, the following: (i) if directors of the
corporation have approved the transactions
- ----------------------------------------------------------------------------------------------------------------------
55
or the interested shareholder's acquisition
of shares of the corporation prior to the
date the interested shareholder became a
shareholder of the corporation, and (ii) if
the corporation, by action of its shareholders
holding at least 66 2/3% of the voting power
of the corporation, adopts an amendment to its
Articles of Incorporation specifying that
Chapter 1704 of the Ohio Revised Code shall
not be applicable to the corporation.
Under Section 1701.831 of the Ohio Revised
Code, unless the Articles of Incorporation or code
of regulations of a corporation otherwise provide,
any control share acquisition of an Issuing Public
Corporation (as defined herein) can only be made
with the prior approval of the corporation's
shareholders. A "CONTROL SHARE ACQUISITION" is
defined as any acquisition of shares of a
corporation that, when added to all other shares of
that corporation owned by the acquiring person,
would enable that person to exercise levels of
voting power in any of the following ranges: at
least 20% but less than 33 1/3%; at least 33 1/3
but less than 50%; or 50% or more.
- ----------------------------------------------------------------------------------------------------------------------
ANTI-TAKEOVER PROVISIONS
Some of the provisions of Wesbanco's Articles of Incorporation and
Bylaws discussed above may constitute defensive measures in that they may
discourage or deter a third party from attempting to acquire control of
Wesbanco. They are designed, in part, to discourage and to insulate the
corporation against hostile takeover efforts, which the Wesbanco Board of
Directors might determine are not in the best interests of Wesbanco and its
shareholders. The provisions are designed as reasonable precautions to protect
against, and to assure the opportunity to assess and evaluate, such
confrontations.
The classification of the Board of Directors makes it more difficult to
change directors since they are elected for terms of three years rather than one
year, and at least two annual meetings instead of one are required to change a
majority of the Board of Directors. Furthermore, due to the smaller number of
directors to be elected at each annual meeting, holders of a minority of the
voting stock may be in a less favorable position to elect directors through the
use of cumulative voting.
The super majority provision makes it more difficult for shareholders
to effect changes in the classification of directors.
The ability of the Board of Directors to issue additional shares of
common and preferred stock also permits the Board of Directors to authorize
issuances of stock which may be dilutive and, in the case of preferred stock,
which may affect the substantive rights of shareholders without requiring an
additional shareholder vote.
56
Collectively, the provisions may be beneficial to management in a
hostile takeover attempt, making it more difficult to effect changes, and at the
same time, adversely affecting shareholders who might wish to participate in
such a takeover attempt.
The foregoing identification of specific differences between the rights
of Wesbanco and American shareholders is not intended to indicate that other
equally or more significant differences do not exist. This summary is qualified
in its entirety by reference to the West Virginia Corporation Act and the Ohio
Revised Code and the Articles of Incorporation and Bylaws of Wesbanco and
American.
LEGAL MATTERS
Certain matters will be passed upon for Wesbanco by its counsel,
Phillips, Gardill, Kaiser & Altmeyer, 61 Fourteenth Street, Wheeling, West
Virginia 26003. As of [record date], the members of Phillips, Gardill, Kaiser &
Altmeyer participating in the preparation of this Proxy Statement/Prospectus
owned an aggregate of 51,276 shares of Wesbanco common stock. James C. Gardill,
a partner in that firm, serves as Chairman and as a director of Wesbanco, and as
a director of its subsidiary, Wesbanco Bank, Inc. Kirkpatrick & Lockhart LLP, as
tax counsel to Wesbanco, will pass upon certain tax consequences related to the
merger.
EXPERTS
The consolidated financial statements of Wesbanco, Inc. included in
Wesbanco's Annual Report on Form 10-K for the year ended December 31, 2000, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon, included in such Form 10-K and incorporated herein by reference.
Such consolidated financial statements are incorporated herein by reference in
reliance upon such report, given on the authority of such firm as experts in
auditing and accounting.
The consolidated financial statements of American Bancorporation and
subsidiaries as of December 31, 2000 and 1999, and for each of the years in the
three-year period ended December 31, 2000 have been incorporated by reference in
this Proxy Statement/Prospectus in reliance upon the report of KPMG LLP,
independent accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
57
ANNEX A
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (hereinafter called "Agreement"),
made and entered into as of the 22nd day of February, 2001, by and between
WESBANCO, INC., a West Virginia corporation, with its principal place of
business located at Bank Plaza, Wheeling, West Virginia (hereinafter called
"Wesbanco"), party of the first part, AMERICAN BANCORPORATION, an Ohio
corporation, with its principal place of business located at 1025 Main Street,
Wheeling, West Virginia, 26003, (hereinafter called "American") party of the
second part, AB CORPORATION (hereinafter called "AB"), a corporation to be
formed under the laws of the State of West Virginia by Wesbanco as its
wholly-owned subsidiary solely for the purpose of effecting the acquisition
contemplated by this Agreement, party of the third part, (effective as of its
organization and execution of this Agreement) and WESBANCO BANK, INC., a West
Virginia banking corporation, with its principal place of business located at
One Bank Plaza, Wheeling, West Virginia, 26003, party of the fourth part
(hereinafter called "Bank").
WHEREAS, Wesbanco is a West Virginia corporation duly organized and
validly existing under the laws of the State of West Virginia, and is a
registered bank holding company under the Bank Holding Company Act of 1956, as
amended, and
WHEREAS, American is an Ohio corporation duly organized and validly
existing under the laws of the State of Ohio, and is a registered bank holding
company under the Bank Holding Company Act of 1956, as amended, which owns, as
its principal subsidiary, Wheeling National Bank, a national banking association
(hereinafter also referred to as "Subsidiary"), and
WHEREAS, AB will be a corporation duly organized and validly existing
under the laws of the State of West Virginia which corporation shall be
organized to effect the terms and conditions of this Agreement, and
WHEREAS, the Board of Directors of Wesbanco, by a majority vote of all
the members thereof, has approved this Agreement and has authorized the
execution hereof in counterparts; and subject to the terms hereof will direct
that it be submitted to its shareholders; the Board of Directors of AB shall,
prior to the execution hereof by AB, have by a majority vote of all of the
members and shareholders thereof, approved this Agreement and authorized the
execution hereof in counterparts, all upon the issuance of AB's Charter as
hereinafter provided, and
A - 1
WHEREAS, Wesbanco desires to acquire American and the Board of
Directors of American has determined that, subject to all of the conditions of
this Agreement, including but not limited to the requirement that certain tax
rulings and fairness opinions be obtained, it would be in the best interests of
American and its shareholders for American to enter into this Agreement to
become affiliated with Wesbanco, and
WHEREAS, it is proposed that Wesbanco, American, AB and Bank enter into
this Agreement whereby American will merge with and into AB (the "Merger") and
the outstanding shares of common stock of American, without par value,
("American Common Stock"), will be converted into shares of common stock of
Wesbanco, par value $2.0833, ("Wesbanco Common Stock") at an exchange ratio of
1.1 shares of Wesbanco Common Stock for each share of American Common Stock
exchanged therefor, and the Subsidiary will be merged with and into Bank with
Bank as the surviving corporation (the "Bank Merger").
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants hereinafter set forth, and in accordance with the provisions of
applicable law, and intending to be legally bound hereby, the parties hereto do
hereby agree as follows:
SECTION 1
AB
1.1 FORMATION. Wesbanco shall promptly cause AB to be duly organized as
a business corporation under the laws of the State of West Virginia. AB will be
wholly-owned by Wesbanco at all times through the closing of the transactions
contemplated by this Agreement.
1.2 CONDUCT OF BUSINESS. Wesbanco shall not permit AB to conduct any
business operations other than such activities which are necessary to consummate
the merger contemplated in the Agreement.
1.3 EXECUTION OF AGREEMENT. Promptly after the organization of AB,
Wesbanco shall cause AB to take all necessary and proper action to ratify,
approve, adopt and execute the Agreement and to undertake the performance of all
of the terms and conditions of the Agreement to be performed by AB.
1.4 VOTING OF AB SHARES. Promptly after the organization of AB,
Wesbanco, as sole shareholder of AB, shall vote all of the shares of AB in favor
of the Merger.
SECTION 2
THE MERGER
2.1 THE MERGER. At the Effective Time (as defined in Section 2.5),
subject to the provisions of this Agreement, American shall merge with AB, under
the charter of AB. AB shall be the surviving corporation (hereinafter also
called the "Surviving Corporation").
A - 2
2.2 EFFECT OF MERGER. At the Effective Time, the corporate existence of
American, with all of its purposes, powers and objects, and all of its rights,
assets, liabilities and obligations, shall cease. AB as the Surviving
Corporation shall continue unaffected and unimpaired by the Merger. AB as the
Surviving Corporation shall also succeed to all of the rights, assets,
liabilities and obligations of American in accordance with the West Virginia
Corporations Act ("WVCA"). Upon the Effective Date, (as defined in Section 12.5
hereof), the separate existence and corporate organization of American shall
cease.
2.3 CLOSING. Wesbanco, American and AB will jointly request the
Secretary of State of West Virginia to issue a Certificate of Merger on the date
of the closing described in Section 12.4 hereof (the "Closing" and the "Closing
Date").
2.4 AMERICAN'S OBLIGATIONS. American shall at any time, or from time to
time, as and when requested by the Surviving Corporation, or by its successors
and assigns, execute and deliver, or cause to be executed and delivered in its
name by its last acting officers, or by the corresponding officers of the
Surviving Corporation, all such conveyances, assignments, transfers, deeds, or
other instruments, and shall take or cause to be taken such further or other
action as the Surviving Corporation, its successors or assigns, may deem
necessary or desirable in order to evidence the transfer, vesting or devolution
of any property, right, privilege or franchise or to vest or perfect in or
confirm to the Surviving Corporation, its successors and assigns, title to and
possession of all the property, rights, privileges, powers, immunities,
franchises and interests referred to in this Agreement and otherwise to carry
out the intent and purposes hereof, all at the expense of the Surviving
Corporation.
2.5 ARTICLES OF MERGER. Subject to the terms and conditions herein
provided, Articles of Merger, incorporating this Agreement, shall be executed to
comply with the applicable filing requirements of the WVCA at the Closing and on
the Closing Date. On the Closing Date, such Articles of Merger shall be filed
with the Secretary of State of the State of West Virginia, who will duly issue a
Certificate of Merger. The Surviving Corporation shall record said Certificate
of Merger in the office of the Clerk of the County Commission of Ohio County.
The Merger shall become effective on the date (the "Effective Date") and at the
time (which time is hereinafter called the "Effective Time") when such
Certificate of Merger is issued by the Secretary of State.
A - 3
SECTION 3
THE BANK MERGER
3.1 THE BANK MERGER. At the Effective Time of the Bank Merger (as
defined in Section 3.5), subject to the provisions of this Agreement, the
Subsidiary shall merge with the Bank, under the charter of Bank. Bank shall be
the surviving corporation (hereinafter also called the "Surviving Bank
Corporation").
3.2 EFFECT OF MERGER. At the Effective Time, the corporate existence of
Bank, with all of its purposes, powers and objects, and all of its rights,
assets, liabilities and obligations, shall continue unaffected and unimpaired by
the Merger, and Bank as the Surviving Bank Corporation shall continue to be
governed by the laws of the State of West Virginia. Bank as the Surviving Bank
Corporation shall also succeed to all of the rights, assets, liabilities and
obligations of the Subsidiary in accordance with the WVCA. Upon the Effective
Date of the Bank Merger (as defined in Section 12.5 hereof, the separate
existence and corporate organization of the Subsidiary shall cease. This section
shall not be construed, except as otherwise specifically provided herein, (i) to
limit the ability of Wesbanco and its subsidiaries to terminate the employment
of any employee of the Subsidiary or to review employee benefit programs from
time to time and to make such changes as Wesbanco deems appropriate, or (ii) to
require Wesbanco or its subsidiaries to provide employees or former employees of
the Subsidiary with post-retirement medical benefits.
3.3 CLOSING. Bank and the Subsidiary will jointly request the Secretary
of State of West Virginia to issue a Certificate of Merger on the date of the
closing described in Section 12.4 hereof (the "Closing" and the "Closing Date").
3.4 SUBSIDIARY'S OBLIGATIONS. The Subsidiary shall at any time, or from
time to time, as and when requested by the Surviving Bank Corporation, or by its
successors and assigns, execute and deliver, or cause to be executed and
delivered in its name by its last acting officers, or by the corresponding
officers of the Surviving Bank Corporation, all such conveyances, assignments,
transfers, deeds, or other instruments, and shall take or cause to be taken such
further or other action as the Surviving Bank Corporation, its successors or
assigns, may deem necessary or desirable in order to evidence the transfer,
vesting or devolution of any property, right, privilege or franchise or to vest
or perfect in or confirm to the Surviving Bank Corporation, its successors and
assigns, title to and possession of all the property, rights, privileges,
powers, immunities, franchises and interests referred to in this Agreement and
otherwise to carry out the intent and purposes hereof, all at the expense of the
Surviving Bank Corporation.
A - 4
3.5 ARTICLES OF MERGER. Subject to the terms and conditions herein
provided, Articles of Merger, incorporating this Agreement, shall be executed to
comply with the applicable filing requirements of the WVCA at the Closing and on
the Closing Date. On the Closing Date, such Articles of Merger shall be filed
with the Secretary of State of the State of West Virginia, who will duly issue a
Certificate of Merger. The Surviving Bank Corporation shall record said
Certificate of Merger in the office of the Clerk of the County Commission of
Ohio County. The Merger shall become effective on the date (the "Effective
Date") and at the time (which time is hereinafter called the "Effective Time")
when such Certificate of Merger is issued by the Secretary of State.
SECTION 4
ARTICLES OF INCORPORATION;
BYLAWS; BOARD OF DIRECTORS AND OFFICERS
4.1 AB. The Articles of Incorporation of AB, as organized, shall
constitute the Articles of Incorporation of the Surviving Corporation. The
Bylaws of AB as in effect on the Effective Date shall constitute the Bylaws of
the Surviving Corporation. The directors and officers of AB on the Effective
Date shall become the directors and officers of the Surviving Corporation. Any
vacancy in the Board of Directors or officers may be filled in the manner
provided in the Bylaws of the Surviving Corporation. The directors and officers
shall hold office as prescribed in the Bylaws.
4.2 BANK. The Articles of Incorporation of Bank and the Bylaws of Bank,
as in effect on the Effective Date, shall continue as the Articles of
Incorporation and Bylaws of Bank until the same shall thereafter be altered,
amended or repealed in accordance with law, such Articles of Incorporation or
said Bylaws. The directors and officers of Bank on the Effective Date shall
continue as the directors and officers of Bank after the Bank Merger and shall
hold office as prescribed in the Bylaws of Bank and applicable law, until their
successors shall have been elected and shall qualify.
4.3 BANK DIRECTORS. Wesbanco covenants and agrees that as of the
Effective Date it will appoint, as additional directors of Bank, Jack A.
Cartner, Jolyon W. McCamic, and Jeffrey W. McCamic, specifically waiving for
such limited term, its age 70 provision of its Bylaws. Such individuals shall
serve until the annual meeting to be held in April, 2002, at which time the
terms for Jack A. Cartner and Jolyon W. McCamic shall expire. At such annual
meeting, Jeffrey W. McCamic shall be re-appointed to the Bank Board and shall
serve until his successor shall have been duly elected and qualified.
A - 5
4.4 WESBANCO DIRECTORS. Wesbanco covenants and agrees that as of the
Effective Date it will appoint, as additional directors of Wesbanco, Jeremy C.
McCamic and Abigail M. Feinknopf. Such individuals shall serve until the next
annual meeting of shareholders at which time the term of Jeremy C. McCamic shall
expire and he shall be replaced by Jay T. McCamic. Wesbanco shall then include
the said Abigail M. Feinknopf and Jay T. McCamic on the list of nominees for the
position of director for which the Board shall solicit proxies at its next
annual meeting of shareholders until each has served at least a full three year
term. During his term on the Board, the said Jeremy C. McCamic shall also be
appointed to the Executive Committee. Wesbanco will take such action under its
Bylaws as is necessary to permit the said Jeremy C. McCamic to serve as a
Director until April of 2002 with respect to its age 70 provision.
SECTION 5
SHAREHOLDER APPROVALS
5.1 AMERICAN SHAREHOLDERS' MEETING. Subject to the receipt by American
of the fairness opinion described in Section 12.3(c) hereof, American shall
submit the Agreement to its shareholders in accordance with the Ohio Revised
Code ("ORC") at a meeting duly called, properly noticed and held at the earliest
practicable date (considering the regulatory approvals required to be obtained)
after the receipt of such opinion. In connection with such meeting, American
shall send to its shareholders the Proxy Statement referred to in Section 14.1
hereof. Subject to the fiduciary duties of the Board of Directors of American to
American and its shareholders, the Board of Directors of American shall
recommend a vote in favor of the Merger and shall use its best efforts to obtain
at such meeting the affirmative vote of the American shareholders required to
effectuate the transactions contemplated by the Agreement.
5.2 AB AND BANK SHAREHOLDER MEETINGS. AB and Bank shall promptly submit
the Agreement to their shareholder, Wesbanco, for approval in accordance with
the WVCA. Wesbanco agrees to vote, or to cause the vote of, the shares of such
subsidiary corporations in favor of the proposed transactions.
5.3 SUBSIDIARY SHAREHOLDERS MEETING. The Subsidiary shall promptly
submit the Agreement to its shareholder, American, for approval in accordance
with the laws of the United States applicable to National Banks. American agrees
to vote the shares of such subsidiary corporation in favor of the proposed
transaction.
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SECTION 6
CONVERSION OF SHARES
6.1 CONVERSION, EXCHANGE RATIO AND OPTION. The manner of converting or
exchanging the shares of American, AB and the Subsidiary shall be as follows:
(a) Each share of American Common Stock issued and outstanding
immediately prior to the Effective Time, except shares of American
Common Stock issued and held in treasury of American or beneficially
owned by AB or Wesbanco, other than in a fiduciary capacity by Wesbanco
for others, and shares as to which dissenters' rights are exercised
pursuant to Section 1701.85 of the ORC, shall by virtue of the Merger
and at the Effective Time of the Merger be exchanged for and become,
without action on the part of the holder thereof, 1.1 shares of
Wesbanco Common Stock having equal rights and privileges with respect
to all other common stock of Wesbanco issued and outstanding as of the
Effective Time of the Merger.
(b) No fractional shares of Wesbanco Common Stock will be
issued in connection with the Merger. In lieu thereof each stockholder
of American otherwise entitled to a fractional share of Wesbanco will
receive cash therefore in an amount based on a value of $22.31 per
whole share of Wesbanco stock, at the time of the exchange.
(c) In the event of any change in Wesbanco Common Stock by
reason of stock dividends, split-ups, mergers, recapitalizations,
combinations, exchanges of shares (by Wesbanco shareholders) or the
like, the type and number of shares to be issued pursuant to Section
6.1(a) hereof shall be adjusted proportionately.
(d) Each share of the common stock of the Subsidiary issued
and outstanding immediately prior to the Effective Date of the Bank
Merger shall, on the Effective Date, be converted into an equal number
of issued and outstanding shares of the Surviving Bank Corporation.
6.2 SHARES OWNED BY AMERICAN, WESBANCO OR AB. Each share of American
Common Stock issued and held in the treasury of American or beneficially owned
by Wesbanco or AB, other than in a fiduciary capacity,
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at the Effective Time of the Merger shall be canceled and no cash or other
property shall be delivered in exchange therefore.
6.3 EXCHANGE FOR STOCK. On and after the Effective Date of the Merger,
each holder of American Common Stock, upon presentation and surrender of a
certificate or certificates therefore to Fifth Third Bank (the "Exchange
Agent"), shall be entitled to receive in exchange therefore (i) a certificate or
certificates representing the number of shares of Wesbanco Common Stock to which
he or she is entitled as provided herein, and payment in cash for any fractional
share of common stock which he is entitled to receive, without interest. Until
so presented and surrendered in exchange for a certificate representing Wesbanco
Common Stock, each certificate which represented issued and outstanding shares
of American Common Stock immediately prior to the Effective Time shall be deemed
for all purposes to evidence ownership of the number of shares of Wesbanco
Common Stock into which such shares of stock have been converted pursuant to the
Merger. Until surrender of such certificates in exchange for certificates
representing the converted stock, the holder thereof shall not receive any
dividend or other distribution payable to holders of shares of such stock;
provided, however, that upon surrender of such certificates representing such
converted stock in exchange for certificates representing the stock into which
it has been converted, there shall be paid to the record holder of the
certificate representing Wesbanco Common Stock issued upon such surrender, the
amount of dividends or other distributions (without interest) which theretofore
became payable with respect to the number of shares of such stock represented by
the certificate or certificates to be issued upon such surrender, together with
payment of cash for any fractional share to which such holder is entitled, as
above set forth.
6.4 CLOSING OF STOCK TRANSFER BOOKS. On the Effective Date, the stock
transfer books of American shall be closed, and no shares of American Common
Stock outstanding the day prior to the Effective Date shall thereafter be
transferred.
6.5 DIRECTORS' QUALIFYING SHARES. Immediately upon completion of the
mergers provided for above, the newly elected Directors of Bank shall maintain
at least the minimum number of shares of Wesbanco Common Stock as are required
to be held as directors' qualifying shares under applicable law for membership
on the Board of Directors of Bank.
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SECTION 7
DISSENTERS RIGHTS
7.1 Subject to the rights of Wesbanco and American, as permitted by
Section 12.1(i) of the Agreement, to terminate the Agreement and abandon the
Merger in the event that the number of Objecting Shares (as hereinafter defined)
shall exceed 10% of the shares of American issued and outstanding on the date of
the shareholders' meeting described in Sections 5.1 and 14.1 of this Agreement
and entitled to vote on this Agreement (hereinafter, "Voting Shares"), the
rights and remedies of a dissenting shareholder under the ORC shall be afforded
to any shareholder of American who objects to the Merger in a timely manner in
accordance with the ORC, and who takes the necessary steps in a timely manner in
accordance with the ORC to perfect such shareholder's rights as a dissenting
shareholder (such shareholder being hereafter referred to as a "Dissenting
Shareholder"). The Surviving Corporation will make such payments as are required
to be made to Dissenting Shareholders in the exercise of such rights. The term
"Objecting Shares" shall mean the shares of those holders of American Common
Stock who shall file written demand for payment of the fair cash value with
respect to such shares, in a timely manner in accordance with the ORC, to the
Agreement, shall not vote in favor of the Agreement, and have made written
demand for the fair cash value of such shares within ten (10) days, in
accordance with Section 1701.85 of the ORC. The Objecting Shares held by
shareholders who do not become Dissenting Shareholders shall be converted into
Wesbanco Common Stock in accordance with Section 6 hereof.
SECTION 8
REPRESENTATIONS, WARRANTIES AND COVENANTS OF AMERICAN
American represents and warrants to and covenants with Wesbanco and AB,
in its own right and with respect to its wholly owned Subsidiary, that:
8.1 ORGANIZATION AND QUALIFICATION OF AMERICAN. American is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Ohio and has the full corporate power and authority to own all
of its properties and assets and to carry on its business as it is now being
conducted, and neither the ownership of its property nor the conduct of its
business requires it or its Subsidiary to be qualified to do business in any
other jurisdiction, except where the failure to be so qualified, considering all
such cases in the
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aggregate, does not involve a material risk to the business, properties,
financial position or results of operations of American and its Subsidiary taken
as a whole.
8.2 AUTHORIZATION OF AGREEMENT. The Board of Directors of American has
authorized the execution of this Agreement as set forth herein, and subject to
the approval of this Agreement by the shareholders of American as provided in
the Articles of Incorporation and Bylaws of American and applicable Ohio law,
American has the corporate power and is duly authorized to merge with AB
pursuant to this Agreement, and this Agreement is a valid and binding agreement
of American enforceable in accordance with its terms, except as enforceability
may be subject to applicable bankruptcy, insolvency, moratorium or other similar
laws affecting the enforcement of creditors' rights generally and to any
equitable principles limiting the right to obtain specific performance of
certain obligations thereunder.
8.3 NO VIOLATION OF OTHER INSTRUMENTS. Subject to obtaining any
required consent (which consents will be obtained by American prior to Closing),
the execution and delivery of this Agreement do not, and the consummation of the
Merger and the Bank Merger and the transactions contemplated hereby will not,
violate any provisions of American's Articles of Incorporation or Bylaws, or any
provision of, or result in the acceleration of any obligation under, any
material mortgage, deed of trust, note, lien, lease, franchise, license, permit,
agreement, instrument, law, order, arbitration award, judgment or decree or in
the termination of any material license, franchise, lease or permit to which
American or the Subsidiary are a party or by which they are bound. After the
approval of this Agreement by the shareholders of the common stock of American,
the Board of Directors and the shareholders of American will have taken all
corporate action required by applicable law, the Articles of Incorporation of
American, its Bylaws or otherwise to authorize the execution and delivery of
this Agreement and to authorize the Merger of American and AB pursuant to this
Agreement.
8.4 FINANCIAL STATEMENTS. American has delivered to Wesbanco copies of
its consolidated statements of condition as of December 31, 1999, 1998 and 1997
and the interim period ended September 30, 2000, and its consolidated statements
of income, consolidated statements of changes in shareholders' equity and
consolidated statements of changes in financial position for the three year
period ended December 31, 1999, and the interim period ended September 30, 2000,
together with the notes thereto, accompanied by an audit report relating to the
financial statements for the three years ended December 31, 1999, of KPMG LLP,
Certified Public Accountants. Such statements, together with the related notes
to all of said financial statements, present fairly the consolidated
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financial position of American and the Subsidiary and the consolidated results
of their operations as of the dates and for the periods ended on the dates
specified in accordance with generally accepted accounting principles
consistently applied throughout the periods indicated, except as may be
specifically disclosed in those financial statements, including the notes to the
financial statements attached thereto and subject to normal recurring year end
adjustments.
8.5 SUBSIDIARIES OF AMERICAN. The principal subsidiary corporation of
American is Wheeling National Bank, St. Clairsville, Ohio, a national banking
association. Such corporation is duly organized, validly existing, and in good
standing under the laws of the United States, and has the requisite corporate
power and authority to own and lease its properties and to conduct its business
as it is now being conducted and is currently contemplated to be conducted.
American owns 100% of the issued and outstanding stock of such corporation. All
issued and outstanding shares of stock of the Subsidiary have been fully paid,
were validly issued and are nonassessable. Its other subsidiaries include
American Bancservices, Inc., American Mortgages, Inc. ("AMI"), American Banc
Leasing and American Bancdata Corp. American owns 100% of the issued and
outstanding stock of such corporations. American also owns 100% of American
Bancorporation Capital Trust 1 (the "Trust") and AMI owns 51% of Premier
Mortgage Ltd., a joint venture with H.E.R., Inc. All representations, warranties
and covenants of American contained herein apply to such entities unless
otherwise disclosed in the American Disclosure Schedule.
8.6 NO ACTION, ETC. Except as disclosed in the Disclosure Schedule of
American dated not more than 30 days from the date hereof (the "American
Disclosure Schedule"), and as supplemented on the Effective Date, there are no
suits, actions, proceedings, claims or investigations (formal or informal)
pending, or to the knowledge of American, threatened against or relating to
American, its Subsidiary, their business or any of their properties or against
any of their officers or directors (in their capacity as such) in law or in
equity or before any governmental agency. There are no suits, actions,
proceedings, claims or investigations against American, its Subsidiary, their
properties or against any of their officers or directors (in their capacity as
such) in law or in equity or before any governmental agency which, individually
or in the aggregate, would, or is reasonably likely to, if determined adversely
to such party, materially adversely affect the financial condition (present or
prospective), businesses, properties or operations of American or its Subsidiary
or the ability of American or its Subsidiary to conduct their business as
presently conducted or to consummate the transactions contemplated hereby, and
American does not know of any basis for any such action or proceeding. Except as
disclosed in the American Disclosure Schedule,
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American and its Subsidiary are not parties or subject to any cease and desist
order, agreement or similar arrangement with a regulatory authority which
restricts their operations or requires any action, and neither American nor its
Subsidiary is transacting business in material violation of any applicable law,
ordinance, requirement, rule, regulation or order.
8.7 CAPITALIZATION. The authorized capital stock of American consists
of 6,700,000 shares, consisting of 6,500,000 shares of common stock, without par
value, of which 3,129,674 shares are duly authorized, validly issued and
outstanding and are fully paid and nonassessable as of the date hereof, and
200,000 shares of preferred stock, par value of $100.00 per share, none of which
are issued or outstanding. There are no options, warrants, calls or commitments
of any kind entitling any person to acquire, or securities convertible into,
American Common Stock, except as provided in the Option Agreement dated the date
hereof to be issued in accordance with this Agreement. American has sufficient
authorized common stock to issue to Wesbanco if the Option Agreement dated the
date hereof is exercised by Wesbanco.
8.8 COPIES OF ALL CONTRACTS, LEASES, ETC. American has furnished, or
provided access, to Wesbanco true and complete copies of all material contracts,
leases and other agreements to which American is a party or by which it is bound
and of all employment, pension, retirement, stock option, profit sharing,
deferred compensation, consultant, bonus, group insurance or similar plans with
respect to any of the directors, officers or other employees of American and its
Subsidiary. A list of all such documents is set forth in the American Disclosure
Schedule, and as updated on the Effective Date.
8.9 MATERIALLY ADVERSE CONTRACTS. Neither American nor its Subsidiary
is a party to or otherwise bound by any contract, agreement, plan, lease,
license, commitment or undertaking which is materially adverse, materially
onerous or materially harmful to American and its Subsidiary taken as a whole.
There is no breach or default by any party of or with respect to any material
provision of any material contract to which American or its Subsidiary are a
party that would have a material adverse effect upon the financial condition,
operations, results of operations, business or prospects of American and its
Subsidiary taken as a whole.
8.10 UNDISCLOSED LIABILITIES. American and its Subsidiary have no
material liabilities other than those liabilities disclosed on or provided for
in the financial statements delivered pursuant to Section 8.4 hereof, or as
disclosed in the American Disclosure Schedule attached hereto and made a part
hereof.
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8.11 TITLE TO PROPERTIES. Except for capitalized leases, liens and
encumbrances not material to the property, liens and encumbrances on property
acquired by American and its Subsidiary in foreclosure of loans and existing at
the time of foreclosure, American and its Subsidiary have good and marketable
title to all of the property, interests in properties and other assets, real and
personal, set forth in their consolidated balance sheet as of December 31, 1999,
and applicable interim period balance sheets or acquired since the date thereof,
other than property disposed of since such dates, subject to no material liens,
mortgages, pledges, encumbrances or charges of any kind except liens reflected
on said balance sheets or set forth in the financial statements delivered
pursuant to Section 8.4 hereof, and all of their material leases are in full
force and effect and neither American nor its Subsidiary is in material default
thereunder. No asset included in the financial statements referred to above has
been valued in such statements in excess of its cost less depreciation or, in
the case of investment securities, in excess of their fair value in accordance
with SFAS No. 115. All material real and tangible personal property owned by
American or its Subsidiary and used or leased by American or its Subsidiary in
their business is in good condition, normal wear and tear excepted, and is in
good operating order. All of such property is insured against loss for at least
80% of the full replacement value thereof (less applicable deductibles) by
reputable insurance companies authorized to transact business in the States of
West Virginia, Ohio and Pennsylvania.
8.12 PROXY STATEMENT. The Proxy Statement referred to in Section 14 or
any amendment or supplement thereto mailed to the holders of the common stock of
American will not contain any untrue statement of a material fact concerning
American or omit to state a material fact concerning American required to be
stated therein or necessary to make the statements contained therein, in light
of the circumstances under which they were made, not misleading with respect to
American, and will comply, as to form in all material respects, with the
requirements of the United States and Ohio securities laws and any other
applicable Blue Sky Laws.
8.13 ERISA. Except as disclosed in the American Disclosure Schedule,
(i) each employee benefit plan subject to Titles I and/or IV of ERISA and
established or maintained for persons including employees or former employees of
American, or its Subsidiary, (hereinafter collectively referred to as "Plan")
has been maintained, operated, administered and funded in accordance with its
terms and with all material provisions of ERISA and the Internal Revenue Code
("IRC") applicable thereto; (ii) no event reportable under Section 4043 of ERISA
has occurred and is continuing with respect to any Plan; (iii) no liability to
PBGC has been incurred with respect to any Plan, other than for premiums due and
payable, and all premiums required to have been paid to PBGC as of the date
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hereof have and as of the Effective Date will have been paid; (iv) no Plan has
been terminated, no proceedings have been instituted to terminate any Plan, and
no decision has been made to terminate or institute proceedings to terminate any
Plan; (v) no Plan is a multi-employer Plan; (vi) there has been no cessation of,
and no decision has been made to cease, operations at a facility or facilities
where such cessation could reasonably be expected to result in a separation from
employment of more than 20% of the total number of employees who are
participants under any plan; (vii) each Plan which is an employee pension plan
meets the requirements of "qualified plans" under Section 401(a) of the IRC;
(viii) no accumulated funding deficiency within the meaning of Section 412 of
the IRC or Section 302 of ERISA has been incurred with respect to any Plan
subject to the funding standards of those provisions; (ix) with respect to each
Plan, there have been no prohibited transactions as defined in Section 406 of
ERISA or Section 4975 of the IRC, and there are no actions, suits or claims with
respect to the assets thereof (other than routine claims for benefits) pending
or threatened; and (x) all required reports, descriptions and notices
(including, but not limited to, Form 5500 Annual Reports, Summary Annual Reports
and Summary Plan Descriptions) have been appropriately filed or distributed with
respect to each Plan.
8.14 EXCHANGE ACT REPORTS. American has delivered to Wesbanco true and
correct copies of its Form 10-K (Annual Report) for the year ended December 31,
1999, and its Form 10-Q (Quarterly Report) for the quarter ended September 30,
2000, as filed with the SEC, all of which were prepared and filed in accordance
with the applicable requirements and regulations of the SEC. American has also
delivered to Wesbanco true and correct copies of all documents and reports filed
by American with the SEC pursuant to the Exchange Act since January 1, 2000 (the
"American Reports"). American has filed and will continue to file all reports
and other documents required to be filed with the SEC pursuant to the Exchange
Act in a timely manner. All of the American Reports complied in all material
respects with the Act and did not contain, as of their respective dates, any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading in light of the circumstances
under which they were made.
8.15 LABOR DISPUTES. Neither American nor its Subsidiary is directly or
indirectly involved in or threatened with any labor dispute, including, without
limitation, matters regarding discrimination by reason of race, creed, sex,
handicap or national origin, which would materially and adversely affect their
financial condition, assets, businesses or operations taken as a whole. No
collective bargaining representatives represent any employees of American or the
employees of its Subsidiary, and no petition for election of any collective
bargaining representative
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has been filed and to the knowledge of American and its Subsidiary no
organizational campaign on behalf of any collective bargaining unit has been
undertaken by or on behalf of the employees of American or its Subsidiary.
8.16 RESERVE FOR POSSIBLE LOAN LOSSES. The reserve for possible loan
losses shown on the consolidated balance sheets of American and its Subsidiary
as of December 31, 1999, and the interim period ending September 30, 2000,
delivered pursuant to this Agreement, which financial statements are attached to
the American Disclosure Schedule, are adequate in all material respects as of
the respective dates thereof.
8.17 TAXES. Except as disclosed in the American Disclosure Schedule:
(a) American and its Subsidiary have timely and properly filed
all Federal Income Tax Returns and all other federal, state, municipal
and other tax returns which they are required to file, either on their
own behalf or on behalf of their employees or other persons or
entities, all such returns and reports being true and correct and
complete in all material respects, and have paid all taxes, including
penalties and interest, if any, which have become due pursuant to such
returns or reports or forms or pursuant to assessments received by
them;
(b) Neither the Internal Revenue Service nor any other taxing
authority is now asserting against American or its Subsidiary, or, to
its knowledge, threatening to assert against them, or any of them, any
material deficiency or claim for additional taxes, interest or penalty;
(c) There is no pending or, to its knowledge, threatened
examination of the Federal Income Tax Returns of American or its
Subsidiary, and, except for tax years still subject to the assessment
and collection of additional Federal income taxes under the three year
period of limitations prescribed in IRC Section 6501(a), no tax year of
American or its Subsidiary remains open to the assessment and
collection of additional material Federal Income Taxes; and
(d) There is no pending or, to its knowledge, threatened
examination of the Ohio Franchise Tax Returns of American or its
Subsidiary, and, except for tax years still subject to the assessment
and collection of additional Franchise Taxes under the applicable
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period of limitations prescribed in the ORC, no tax year of American
or its Subsidiary remains open to the assessment and collection of
additional Ohio Franchise Taxes.
(e) American, and its Subsidiary, have properly accrued and
reflected on their December 31, 1999, consolidated balance sheet,
delivered pursuant to Section 8.4 hereof, and have thereafter to the
date hereof properly accrued, and will from the date hereof through the
Closing Date properly accrue, all liabilities for taxes and
assessments, and will timely and properly file all such federal, state,
local and foreign tax returns and reports and forms which they are
required to file, either on their own behalf or on behalf of their
employees or other persons or entities, all such returns and reports
and forms to be true and correct and complete in all respects, and will
pay or cause to be paid when due all taxes, including penalties and
interest, if any, which have become due pursuant to such returns or
reports or forms or pursuant to assessments received by them, all such
accruals being in the aggregate sufficient for payment of all such
taxes and assessments.
8.18 ABSENCE OF CERTAIN CHANGES. Except as may be disclosed in the
American Disclosure Schedule, or except in connection with the transactions
contemplated by this Agreement, since December 31, 1999:
(a) There has been no change in the material assets, financial
condition or liabilities (contingent or otherwise), business, or
results of operations of American and its Subsidiary which has had, or
changes which in the aggregate have had, a materially adverse effect on
such material assets, financial condition or results of operations of
American and its Subsidiary taken as a whole, nor to their knowledge,
has any event or condition occurred which may result in such change or
changes;
(b) There has not been any material damage, destruction or
loss by reason of fire, flood, accident or other casualty (whether
insured or not insured) materially and adversely affecting the assets,
financial condition, business or operations of American or its
Subsidiary taken as a whole;
(c) Other than in the ordinary course of business, neither
American nor its Subsidiary has disposed of, or agreed to dispose of,
any of their material properties or
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assets, nor have they leased to others, or agreed to so lease, any of such
material properties or assets;
(d) There has not been any change in the authorized, issued or
outstanding capital stock of American except as provided for in this
Agreement, or any material change in the outstanding debt of American
or its Subsidiary, other than changes due to payments in accordance
with the terms of such debt or changes in deposits, Federal funds
purchased, repurchase agreements or other short- term borrowings in the
ordinary course of business;
(e) Except as otherwise disclosed in this Agreement, American
has not granted any warrant, option or right to acquire, or agreed to
repurchase, redeem or otherwise acquire, any shares of its capital
stock or any other of its securities whatsoever;
(f) American and its Subsidiary have, and shall have at
Closing, personnel sufficient to adequately staff all key positions
within their respective operations. Other than as disclosed by
American, there has not been any material increase in the compensation
or fees payable by American or its Subsidiary to their respective
directors or officers for services in their capacities as such, other
than increases in the regular course of business in accordance with
past practices or the personnel policies of American or its Subsidiary,
respectively, nor any material increase in expenditures for any bonus,
insurance, pension or other employee benefit plan, payment or
arrangement for or with any of such directors or officers other than
increases in the regular course of business in accordance with past
practices or the personnel policies of American or its Subsidiary;
(g) Neither American nor its Subsidiary has made any material
loan or advance other than in the ordinary course of business;
(h) Neither American nor its Subsidiary has made any
expenditure or major commitment for the purchase, acquisition,
construction or improvement of any material asset or assets which in
the aggregate would be material other than in the ordinary course of
business;
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(i) Neither American nor its Subsidiary has entered into any
other material transaction, contract or lease or incurred any other
material obligation or liability other than in the ordinary course of
business;
(j) There has not been any other event, condition or
development of any kind which materially and adversely affects the
material assets, financial condition or results of operations of
American or its Subsidiary, taken as a whole, and neither American nor
its Subsidiary has knowledge of any such event, condition or
development which may materially and adversely affect the assets,
financial condition or results of operations of American and its
Subsidiary, taken as a whole.
8.19 FIDELITY BONDS. The Subsidiary has continuously maintained a
fidelity bond insuring it against acts of dishonesty by its officers and
employees in such amounts as are required by law and as are customary, usual and
prudent for a bank of its size. Since January 1, 2000, there have been no claims
under such bond and, except as disclosed in the American Disclosure Schedule,
neither American nor its Subsidiary is aware of any facts which would form the
basis of a claim under such bonds. Neither American nor its Subsidiary has any
reason to believe that its fidelity coverage will not be renewed by the
applicable carrier on substantially the same terms as its existing coverage.
8.20 NEGATIVE COVENANTS. Except as otherwise contemplated hereby,
between the date hereof and the Effective Date, or the time when this Agreement
terminates as provided herein, American will not, except as contemplated by this
Agreement, without the prior written approval of Wesbanco:
(a) Make any change in its authorized capital stock;
(b) Issue any shares of its common stock, securities
convertible into its common stock, or any long term debt securities;
(c) Issue or grant any options, warrants or other rights to
purchase shares of its common stock;
(d) Declare or pay any dividends or other distributions on any
shares of common stock other than its regular quarterly dividend of
fifteen cents ($.15) per share consistent with past practice.
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(e) Purchase or otherwise acquire, or agree to acquire, for
a consideration any share of its capital stock (other than in a
fiduciary capacity);
(f) Except as otherwise contemplated by this Agreement or as
disclosed in or permitted by or under the conditions set forth in
Section 8.18(f) above and except for any amendments required by law,
enter into or amend any employment, pension, retirement, stock option,
profit sharing, deferred compensation, consultant, bonus, group
insurance or similar plan in respect of any of its directors, officers
or other employees for services in their capacities as such or
materially increase its contribution to any pension plan, except as
disclosed in the American Disclosure Schedule, regarding pension or
retirement plans or increases in accordance with past practices;
(g) Take any action materially and adversely affecting the
financial condition (present or prospective), businesses, properties
or operations of American or its Subsidiary, taken as a whole;
(h) Acquire or merge with any other company or acquire any
branch or, other than in the ordinary course of business, any assets
of any other company;
(i) Except in the ordinary course of business as heretofore
conducted, and except as hereinabove provided, mortgage, pledge or
subject to a lien or any other encumbrance any of its material assets,
dispose of any of its material assets, incur or cancel any material
debts or claims, or increase any compensation or benefits payable to
its officers or employees (other than as permitted in Sections 8.18(f)
and 8.20(f) hereof), except in the ordinary course of business as
heretofore conducted, or take any other action not in the ordinary
course of its business as heretofore conducted or incur any material
obligation or enter into any material contract; or
(j) Amend its Articles of Incorporation or Bylaws, except as
may be necessary to carry out this Agreement or as required by law.
8.21 ADDITIONAL COVENANTS. Except as otherwise contemplated by this
Agreement, American covenants and agrees:
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(a) That it will promptly advise Wesbanco in writing of the
name and address of, and the number of shares of American stock held
by, each stockholder who elects to exercise his or her appraisal
rights pursuant to Section 1701.85 of the ORC;
(b) Subsequent to the date of this Agreement and prior to the
Effective Date, that it will operate its business only in the ordinary
course and in a manner consistent with past practice;
(c) To the extent consistent with the fiduciary duties of the
Board of Directors to American and its shareholders and in compliance
with applicable law, that it will use its best efforts to take or cause
to be taken all action required under this Agreement on its part to be
taken as promptly as practicable so as to permit the consummation of
the Merger at the earliest possible date and to cooperate fully with
the other parties to that end;
(d) American will not, and will not permit any person acting
on behalf of American or its Subsidiary to, directly or indirectly,
initiate or solicit any acquisition proposal by any person, corporation
or entity. For the purposes of this subsection, "acquisition proposal"
means any proposal to merge or consolidate with, or acquire all or any
substantial portion of the assets of, American or its Subsidiary, or
any tender or exchange offer (or proposal to make any tender or
exchange offer) for any shares of stock of American, or any proposal to
acquire more than 5% of the outstanding shares of stock of American or
any options, warrants or rights to acquire, or securities convertible
into or exchangeable for, more than 5% of the outstanding shares of
stock of American. Notwithstanding the provisions of this Subsection
(d), American shall not be prohibited from furnishing information to,
or entering into discussions, negotiations or an agreement with, any
person or entity which makes an unsolicited acquisition proposal if and
to the extent that (i) the Board of Directors of American, after
consultation with and based on the advice of counsel, determines in
good faith that such action is required to fulfill its fiduciary duties
to the shareholders of American under applicable law and (ii) before
furnishing such information to, or entering into discussions or
negotiations with, such person or entity, American provides immediate
written notice to Wesbanco of such action;
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(e) To promptly advise Wesbanco of any material adverse change
in the financial condition, assets, businesses or operations of
American or its Subsidiary, taken as a whole, or any material changes
or inaccuracies in data provided to Wesbanco pursuant to this
Agreement;
(f) To maintain in full force and effect its and its
Subsidiary's present fire, casualty, public liability, employee
fidelity and other insurance coverages or replacement insurance
coverage at substantially the same premium and insurance levels;
(g) To cooperate with Wesbanco in furnishing such information
concerning the business and affairs of American, its Subsidiary and
their respective directors and officers as is reasonably necessary or
requested in order to prepare and file any application for regulatory
or governmental approvals, including, but not limited to, an
application to the Federal Reserve Board and the West Virginia
Department of Banking for prior approval of the acquisition of American
by Wesbanco as contemplated hereunder. Consistent with its fiduciary
duties, American will use its best efforts to obtain the approval or
consent of any federal, state or other regulatory agency having
jurisdiction and of any other party to the extent that such approvals
or consents are required to effect the Merger and the transactions
contemplated hereby or are required with respect to the documents
described in Section 8.3 hereof; and
(h) To cooperate with Wesbanco in furnishing such information
concerning the business of American and its Subsidiary as is reasonably
necessary or requested in order to prepare and file any Proxy Statement
to be prepared in connection with the Merger as provided in Section 14
hereof.
8.22 REPURCHASE AGREEMENTS. With respect to any agreement pursuant to
which American or its Subsidiary have purchased securities subject to an
agreement to repurchase, American and its Subsidiary have a valid, perfected
first lien or security interest in or evidence of ownership in book entry form
of the government securities or other collateral securing the repurchase
agreement, and the value of such collateral equals or exceeds the amount of the
debt secured thereby.
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8.23 RISK MANAGEMENT INSTRUMENTS. All material interest rate swaps,
caps, floors, option agreements, mortgage backed securities, futures and forward
contracts and other similar risk management arrangements, whether entered into
for American's or Subsidiary's own account, or for the account of one or more of
its customers, were entered into (A) in accordance with prudent business
practices and all applicable laws, rules, regulations and regulatory policies
and (B) with counter-parties believed to be financially responsible at the time;
and each of them constitutes the valid and legally binding obligation of
American or its Subsidiary, enforceable in accordance with its terms, and is in
full force and effect. American and its Subsidiary are not, nor to American's
knowledge is any other party thereto, in breach of any of its obligations under
any such agreement or arrangement.
SECTION 9
REPRESENTATIONS, WARRANTIES AND COVENANTS OF WESBANCO AND AB
Wesbanco and AB represent and warrant to American and covenant with
American that:
9.1 CORPORATE ORGANIZATION OF WESBANCO AND SUBSIDIARIES. Wesbanco is,
and upon execution hereof AB will be, a corporation duly organized, validly
existing and in good standing under the laws of the State of West Virginia, with
full corporate power and authority to carry on its business as it is now being
conducted and as contemplated by the Agreement and to own the properties and
assets which it owns, and neither the ownership of its property nor the conduct
of its business requires it, or any of its subsidiaries, to be qualified to do
business in any other jurisdiction except where the failure to be so qualified,
considering all such cases in the aggregate, does not involve a material risk to
the business, properties, financial position or results of operations of
Wesbanco and its subsidiaries taken as a whole. Each of Wesbanco's subsidiaries
("Wesbanco Subs"), other than AB, is a West Virginia, Ohio or Delaware
corporation, duly organized and validly existing in good standing under the laws
of Ohio, Delaware or West Virginia, as the case may be, with full corporate
power and authority to carry on its business as it is now being conducted and to
own the properties and assets which it owns. All issued and outstanding shares
of stock of AB and the Wesbanco Subs are held, beneficially and of record, by
Wesbanco and have been or, as to AB, on the date of its execution hereof, will
have been, fully paid, were validly issued and are nonassessable. There are no
options, warrants to purchase or contracts to issue, or contracts or any other
rights entitling anyone to acquire, any other stock of AB or any of the Wesbanco
Subs or securities convertible into shares of stock of AB or any of the Wesbanco
Subs.
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9.2 AUTHORIZATION OF AGREEMENT. The Board of Directors of Wesbanco has
authorized the execution of this Agreement as set forth herein, and, subject to
the approval of this Agreement by the shareholders of Wesbanco, Wesbanco has the
corporate power and is duly authorized to execute and deliver this Agreement and
consummate the transactions contemplated herein, pursuant to this Agreement, and
this Agreement is a valid and binding agreement of Wesbanco enforceable in
accordance with its terms, except as enforceability may be subject to applicable
bankruptcy, insolvency, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and to any equitable principles
limiting the right to obtain specific performance of certain obligations
thereunder. Upon execution hereof by AB and Bank and subject to the approval
hereof by Wesbanco as their sole shareholder, AB and Bank have the corporate
power to execute and deliver this Agreement and have taken all action required
by law, their Articles of Incorporation, their Bylaws or otherwise to authorize
and approve such execution and delivery, the performance of the Agreement, the
Merger, the Bank Merger and the consummation of the transactions contemplated
hereby; and this Agreement is a valid and binding agreement of AB and Bank
enforceable in accordance with its terms, except as enforceability may be
subject to applicable bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and to any equitable
principles limiting the right to obtain specific performance of certain
obligations thereunder.
9.3 TRANSFER OF SECURITIES TO EXCHANGE AGENT PRIOR TO, OR AS OF THE
CLOSING DATE. Prior to, or at the Closing Date, Wesbanco will deliver to the
Exchange Agent, for the benefit of the shareholders of American, an amount of
common stock and cash sufficient to meet the necessary amount of securities and
cash into which such common stock shall have been converted pursuant to Section
6.
9.4 NO VIOLATION OF OTHER INSTRUMENTS. Subject to obtaining any
required consents (which consents will be obtained by Wesbanco prior to the
Closing), the execution and delivery of this Agreement do not, and the
consummation of the Merger and the Bank Merger and the transactions contemplated
hereby will not, violate any provision of the Articles of Incorporation or
Bylaws of Wesbanco or any of the Wesbanco Subs or any provision of, or result in
the acceleration of any obligation under, any material mortgage, Deed of Trust,
note, lien, lease, franchise, license, permit, agreement, instrument, law,
order, arbitration award, judgment or decree, or in the termination of any
material license, franchise, lease or permit, to which Wesbanco or any of the
Wesbanco Subs, is a party or by which they are bound.
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9.5 APPLICATION FOR AB. Wesbanco shall cause to be filed with the West
Virginia Secretary of State an application to organize and incorporate AB as a
West Virginia corporation, in accordance with the provisions of the West
Virginia Code, and upon the approval of such application and the issuance of a
Certificate of Incorporation for AB by the Secretary of State of West Virginia,
Wesbanco shall cause AB and Bank to execute and enter into this Agreement and
cause AB and Bank to take such action as is provided in this Agreement on their
part to be taken.
9.6 GOOD FAITH. Wesbanco shall use its best efforts in good faith to
take or cause to be taken all action required under this Agreement on its part
to be taken as promptly as practicable so as to permit the consummation of this
Agreement at the earliest possible date and cooperate fully with the other
parties to that end.
9.7 EXCHANGE ACT REPORTS. Wesbanco has delivered to American true and
correct copies of its Form 10-K (Annual Report) for the year ended December 31,
1999, and its Form 10-Q (Quarterly Report) for the quarter ended September 30,
2000, as filed with the SEC, all of which were prepared and filed in accordance
with the applicable requirements and regulations of the SEC. Wesbanco has also
delivered to American true and correct copies of all documents and reports filed
by Wesbanco with the SEC pursuant to the Exchange Act since January 1, 2000 (the
"Wesbanco Reports"). Wesbanco has filed and will continue to file all reports
and other documents required to be filed with the SEC pursuant to the Exchange
Act in a timely manner. All of the Wesbanco Reports complied in all material
respects with the Act and did not contain, as of their respective dates, any
untrue statement of a material fact or omit to state any material fact necessary
to make the statements therein not misleading in light of the circumstances
under which they were made.
9.8 SUBSIDIARIES OF WESBANCO. In addition to AB, the subsidiaries of
Wesbanco are Wesbanco Bank, Inc., a West Virginia banking corporation, CBI
Corporation, a West Virginia corporation, Vandalia National Corporation, a
Delaware corporation, Wesbanco Securities, Inc., an Ohio corporation, Wesbanco
Insurance Services, a West Virginia corporation, Hometown Finance Company, a
West Virginia corporation, and FBI Corporation, a West Virginia corporation. All
have the requisite corporate power and authority to own and lease their
respective properties and to conduct their respective businesses as they are now
being conducted and are currently contemplated to be conducted. Wesbanco owns
100% of the issued and outstanding stock of all such corporations.
9.9 REGISTERED BANK HOLDING COMPANY. Wesbanco is a duly registered
bank holding company under the Bank Holding Company Act of 1956, as amended.
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9.10 AUTHORITY TO ISSUE SHARES. The shares of common stock to be issued
by Wesbanco pursuant to this Agreement will be duly authorized by all necessary
corporate action at the time the Merger is consummated. When issued upon the
terms and conditions specified in this Agreement, such shares shall be validly
issued, fully paid and nonassessable. The shareholders of Wesbanco have, and
will have, no preemptive rights with respect to the issuance of the shares of
Wesbanco to be issued in the transaction contemplated in this Agreement.
9.11 FINANCIAL STATEMENTS. Wesbanco has delivered to American copies of
its consolidated balance sheets as of December 31, 1997, 1998 and 1999 and the
interim period ended September 30, 2000, and its consolidated statements of
income, consolidated statements of changes in shareholders' equity and
consolidated statements of changes in financial position for the three (3) year
period ended December 31, 1999, and the interim period ended September 30, 2000,
together with the notes thereto, accompanied by an audit report of Ernst & Young
LLP, independent auditors. Such statements and the related notes to all of said
financial statements, present fairly the consolidated financial position of
Wesbanco and its consolidated subsidiaries and the consolidated results of their
operations as of the dates and for the periods ended on the dates specified in
accordance with generally accepted accounting principles consistently applied
throughout the periods indicated, except as may be specifically disclosed in
those financial statements, including the notes to the financial statements
attached thereto, and subject to normal recurring year end adjustments.
9.12 NO ACTION, ETC. Except as disclosed in the Wesbanco Disclosure
Schedule, dated not more than 30 days from the date hereof (the "Wesbanco
Disclosure Schedule"), and as supplemented on the Effective Date, there are no
suits, actions, proceedings, claims or investigations (formal or informal)
pending, or to the knowledge of Wesbanco pending or threatened, against or
relating to Wesbanco, its subsidiaries, its businesses or any of its properties
or against any of their officers or directors (in their capacity as such) in law
or in equity or before any governmental agency. There are no suits, actions,
proceedings, claims or investigations against or relating to Wesbanco, its
subsidiaries, its businesses, its properties or against any of their officers or
directors (in their capacity as such) in law or in equity or before any
governmental agency, which, individually or in the aggregate, would, or is
reasonably likely to, if determined adversely to such party, materially
adversely affect the financial condition (present or prospective), businesses,
properties or operations of Wesbanco or its subsidiaries or the ability of
Wesbanco or its subsidiaries to conduct its business as presently conducted or
consummate the transaction contemplated hereby, and Wesbanco does not know of
any basis for any such action or proceeding. Neither
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Wesbanco nor any of its subsidiaries are a party or subject to any cease and
desist order, agreement or similar arrangement with a regulatory authority which
restricts its operations or requires any action and neither Wesbanco nor any of
its subsidiaries are transacting business in material violation of any
applicable law, ordinance, requirement, rule, order or regulation.
9.13 CAPITALIZATION. The authorized capital stock of Wesbanco consists
of 50,000,000 shares of common stock, par value of $2.0833 per share, of which
18,727,118 shares are duly authorized, validly issued and outstanding (as of
September 30, 2000) and are fully paid and nonassessable, and 1,000,000 shares
of preferred stock, without par value, none of which are issued or outstanding.
There are no options, warrants, calls or commitments of any kind entitling any
person to acquire, or securities convertible into, Wesbanco Common Stock, except
as disclosed on the Wesbanco Disclosure Schedule. Wesbanco has also executed an
Agreement and Plan of Merger with Freedom Bancshares, Inc. dated December 29,
2000, which provides for the issuance of up to an additional 490,200 shares.
Upon execution hereof by AB, the authorized capital stock of AB
consists of 100 shares of common stock, par value of $25.00 per share, all of
which such shares will be duly authorized and validly issued and outstanding and
will be fully paid and nonassessable. There are no options, warrants, calls or
commitments of any kind relating to, or securities convertible into AB Common
Stock.
9.14 UNDISCLOSED LIABILITIES. Wesbanco and the Wesbanco Subs have no
material liabilities other than those liabilities disclosed on or provided for
in the financial statements delivered pursuant to Section 9.11 of this
Agreement, or on the Wesbanco Disclosure Schedule.
9.15 TITLE TO PROPERTIES. Except for capitalized leases and liens and
encumbrances not material to the property and liens and encumbrances on property
acquired by Wesbanco Subs in foreclosure of loans and existing at the time of
foreclosure, Wesbanco and its subsidiaries have good and marketable title to all
of the property, interest in properties and other assets, real or personal, set
forth in its consolidated balance sheet as of December 31, 1999, and applicable
interim periods, or acquired since that date, subject to no material liens,
mortgages, pledges, encumbrances, or charges of any kind except liens reflected
on said balance sheets, and all of its leases are in full force and effect and
neither Wesbanco nor any of its subsidiaries is in material default thereunder.
No asset included in the financial statements referred to above has been valued
in such statements in excess of cost less depreciation or, in the case of
investment securities, in excess of their fair value in accordance with SFAS No.
115.
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All real and tangible personal property owned by Wesbanco or its subsidiaries
and used or leased by Wesbanco or its subsidiaries, or for its business is in
good condition, normal wear and tear excepted, and is in good operating order.
All of such property is insured against loss for at least 80% of the full
replacement value thereof (less applicable deductibles) by reputable insurance
companies authorized to transact business in the States of West Virginia and
Ohio.
9.16 REGISTRATION STATEMENT. The Registration Statement referred to in
Section 14.2 of this Agreement or any amendment or supplement thereto mailed to
the holders of the common stock of American will not contain any untrue
statement of a material fact or omit to state a material fact required to be
stated therein or necessary to make the statements contained therein, in light
of the circumstances under which they were made, not misleading with respect to
Wesbanco, and will comply as to form in all material respects with the
requirements of the United States and West Virginia securities laws and any
other applicable Blue Sky laws.
9.17 ERISA. Except as disclosed in the Wesbanco Disclosure Schedule (i)
each employee benefit plan subject to Titles I and/or IV of ERISA and
established or maintained for persons including employees or former employees of
Wesbanco, or any of its subsidiaries, (hereinafter referred to as "Plan") has
been maintained, operated, administered and funded in accordance with its terms
and with all material provisions of ERISA and the IRC applicable thereto; (ii)
no event reportable under Section 4043 of ERISA has occurred and is continuing
with respect to any Plan; (iii) no liability to PBGC has been incurred with
respect to any Plan, other than for premiums due and payable and all premiums
required to have been paid to PBGC as of the date hereof have been and as of the
Effective Date will have been paid; (iv) other than the termination of the
defined benefit pension plans of Wheeling Dollar Bank, First National Bank and
Trust Company, Wirt County Bank, First-Tyler Bank & Trust Company, Brooke
National Bank, First National Bank of Barnesville, Albright National Bank and
First Fidelity Bancorp, Inc., no Plan has been terminated, no proceedings have
been instituted to terminate any Plan, and no decision has been made to
terminate or institute proceedings to terminate any Plan; (v) with respect to
the termination of the defined benefit pension plans of Wheeling Dollar Bank,
First National Bank and Trust Company, Wirt County Bank, First-Tyler Bank &
Trust Company, Brooke National Bank, First National Bank of Barnesville,
Albright National Bank and First Fidelity Bancorp, Inc., all required
governmental and regulatory approvals of such terminations have been obtained,
all participants in such Plans or their beneficiaries have received single
premium annuity contracts or other benefits which will provide those
participants or beneficiaries with the retirement income calculated under the
terms
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and conditions of such Plans, all liabilities of such Plans have been paid,
released, discharged or merged, and any surplus assets remaining in such Plans
after satisfaction of all of its liabilities have been recovered by Wesbanco or
its subsidiaries; (vi) neither Wesbanco nor any of its subsidiaries currently
are a participating employer in any multi-employer or multiple employer employee
benefit pension plan (including any multi-employer plans as defined in Section
3(37) of ERISA) and, with respect to any multi-employer or multiple employer
plan in which Wesbanco or any of its subsidiaries was a participating employer,
all contributions due from Wesbanco or any of its subsidiaries to any such
multi-employer or multiple employer plan have been timely paid and any
additional contributions due on or before the Effective Date shall have been
paid; (vii) with respect to any multi-employer pension plan subject to the
Multi-Employer Pension Plan Amendments Act of 1980 in which Wesbanco or any of
its subsidiaries was a participating employer, neither Wesbanco nor any of its
subsidiaries have incurred or will incur any withdrawal liability, complete or
partial, under Section 4201, 4203, or 4205 of ERISA, as a consequence of
discontinuing participating in such multi-employer pension plan; (viii) there
has been no cessation of, and no decision has been made to cease, operations at
a facility or facilities where such cessation could reasonably be expected to
result in a separation from employment of more than 20% of the total number of
employees who are participants under any Plan; (ix) each Plan which is an
employee pension plan meets the requirements of "qualified plans" under Section
401(a) of the IRC; (x) no accumulated funding deficiency within the meaning of
Section 412 of the IRC or Section 302 of ERISA has been incurred with respect to
any Plan subject to the funding standards of those provisions; (xi) with respect
to each Plan, there have been no prohibited transactions as defined in Section
406 of ERISA or Section 4975 of the IRC, and there are no actions, suits or
claims with respect to the assets thereof (other than routine claims for
benefits) pending or threatened; and (xii) all required reports, descriptions
and notices (including, but not limited to, Form 5500 Annual Reports, Summary
Annual Reports and Summary Plan Descriptions) have been appropriately filed with
the government or distributed to participants with respect to each Plan.
9.18 LABOR DISPUTES. Except as disclosed in the Wesbanco Disclosure
Schedule, neither Wesbanco nor any of its subsidiaries are directly or
indirectly involved in or threatened with any labor dispute, including, without
limitation, matters regarding discrimination by reason of race, creed, sex,
handicap or national origin, which would materially and adversely affect their
financial condition, assets, businesses or operations taken as a whole. No
collective bargaining representatives represent employees of Wesbanco, AB or the
Wesbanco Subs, and no petition for election of any collective bargaining
representative has been filed and, to the knowledge of Wesbanco
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and its subsidiaries, no organizational campaign on behalf of any collective
bargaining unit has been undertaken by or on behalf of any Wesbanco, AB or
Wesbanco Subs employees.
9.19 RESERVE FOR POSSIBLE LOAN LOSSES. The reserve for possible loan
losses shown on the consolidated balance sheet of Wesbanco and its subsidiaries
as of December 31, 1999, and the interim period ending September 30, 2000,
delivered pursuant to this Agreement are adequate in all material respects as of
the respective dates thereof.
9.20 TAXES. Except as disclosed in the Wesbanco Disclosure Schedule:
(a) Wesbanco and its subsidiaries have timely and properly filed
all Federal Income Tax Returns and all other federal, state, municipal
and other tax returns which they are required to file, either on their
own behalf or on behalf of their employees or other persons or
entities, all such returns and reports being true and correct and
complete in all material respects, and have paid all taxes, including
penalties and interest, if any, which have become due pursuant to such
returns or reports or forms or pursuant to assessments received by
them;
(b) Neither the Internal Revenue Service nor any other taxing
authority is now asserting against Wesbanco or any of its
subsidiaries, or, to its knowledge, threatening to assert against
them, or any of them, any material deficiency or claim for additional
taxes, interest or penalty;
(c) There is no pending or, to its knowledge, threatened
examination of the Federal Income Tax Returns of Wesbanco or any of
its subsidiaries, and, except for tax years still subject to the
assessment and collection of additional federal income taxes under the
three-year period of limitations prescribed in IRC Section 6501(a), no
tax year of Wesbanco or any of its subsidiaries remains open to the
assessment and collection of additional material Federal Income Taxes;
and
(d) There is no pending or, to its knowledge, threatened
examination of the West Virginia Business Franchise Tax Returns of
Wesbanco or any of its subsidiaries, and, except for tax years still
subject to the assessment and collection of additional Business
Franchise Taxes under the three-year period of limitations prescribed
in W.Va. Code
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Annot. Section 11-10-15, no tax year of Wesbanco or any of its
subsidiaries remains open to the assessment and collection of
additional Business Franchise Taxes.
(e) Wesbanco, and its subsidiaries, have properly accrued and
reflected on their December 31, 1999, consolidated balance sheet,
delivered pursuant to Section 9.11 hereof, and have thereafter to the
date hereof properly accrued, and will, from the date hereof, through
the Closing Date, properly accrue all liabilities for taxes and
assessments, and will timely and properly file all such federal,
state, local and foreign tax returns and reports and forms which they
are required to file, either on their own behalf or on behalf of their
employees or other persons or entities, all such returns and reports
and forms to be true and correct and complete in all respects, and
will pay or cause to be paid when due all taxes, including penalties
and interest, if any, which have become due pursuant to such returns
or reports or forms or pursuant to assessments received by them, all
such accruals being in the aggregate sufficient for payment of all
such taxes and assessments.
9.21 ABSENCE OF CERTAIN CHANGES. Except as may be disclosed in the
Wesbanco Disclosure Schedule, or except in connection with the transactions
contemplated by this Agreement, since December 31, 1999:
(a) There has been no change in the material assets, financial
condition, liabilities (contingent or otherwise), business or results
of operation of Wesbanco and its subsidiaries which has had, or
changes in the aggregate which have had, a materially adverse effect
on the material assets, financial condition or results of operations
of Wesbanco, nor, to its knowledge, has any event or condition
occurred which may result in such change or changes;
(b) There has not been any material damage, destruction, or loss
by reason of fire, flood, accident or other casualty (whether insured
or not insured) materially and adversely affecting the assets,
financial condition, business or operations of Wesbanco or any of its
subsidiaries taken as a whole;
(c) Other than in the ordinary course of business, neither
Wesbanco nor any of its subsidiaries have disposed of, or agreed to
dispose of, any of their material properties
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or assets, nor have they leased to others, or agreed to so lease, any
of such material properties or assets;
(d) There has not been any change in the authorized, issued or
outstanding capital stock of Wesbanco, except as provided for in this
Agreement or as disclosed in the Wesbanco Disclosure Schedule, or any
material change in the outstanding debt of Wesbanco or any of its
subsidiaries, other than changes due to payments in accordance with
the terms of such debt or changes in deposits, federal funds
purchased, repurchase agreements or other short-term borrowings in the
ordinary course of business;
(e) Except for the purchases of its common stock pursuant to its
previously announced stock repurchase programs, Wesbanco has not
granted any warrant, option or right to acquire, or agreed to
repurchase, redeem or otherwise acquire, any shares of its capital
stock or any other of its securities whatsoever;
(f) Neither Wesbanco nor any of its subsidiaries have made any
material loan or advance other than in the ordinary course of
business;
(g) Neither Wesbanco nor any of its subsidiaries has entered into
any other material transaction, contract or lease or incurred any
other material obligation or liabilities other than in the ordinary
course of business;
(h) Neither Wesbanco nor any of its subsidiaries have made any
expenditure or major commitment for the purchase, acquisition,
construction or improvement of any material asset or assets which in
the aggregate would be material other than in the ordinary course of
business;
(i) There have not been any dividends or other distributions
declared or paid on any shares of Wesbanco Common Stock or preferred
stock of Wesbanco which, taken in the aggregate with all other such
distributions declared or paid in the same tax year, exceed 65% of the
after-tax income of Wesbanco for the tax year in which paid;
(j) Business has been conducted by Wesbanco in the ordinary course
and in a manner consistent with past practice;
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(k) There has been no change in the Articles of Incorporation
or Bylaws of Wesbanco which would in the reasonable opinion of
American have a material adverse effect on the rights of holders of
Wesbanco Common Stock; and
(l) There has not been any other event, condition or
development of any kind which materially and adversely affects the
material assets, financial condition or results of operations of
Wesbanco or any of its subsidiaries, and neither Wesbanco nor any of
its subsidiaries have knowledge of any such event, condition or
development which may materially and adversely affect the material
assets, financial condition or results of operations of Wesbanco and
its subsidiaries.
9.22 FIDELITY BONDS. Each of the Wesbanco Subs has continuously
maintained fidelity bonds insuring it against acts of dishonesty by each of its
officers and employees in such amounts as are required by law and as are
customary, usual and prudent for a bank of its size. Since January 1, 2000,
there have been no claims under such bonds (except as disclosed in the Wesbanco
Disclosure Schedule) and, except as disclosed in writing to American, neither
Wesbanco nor any Wesbanco Subs are aware of any facts which would form the basis
of a claim under such bonds. Neither Wesbanco nor any Wesbanco Subs have any
reason to believe that any fidelity coverage will not be renewed by their
carriers on substantially the same terms as the existing coverage.
9.23 ADDITIONAL COVENANTS. Except as otherwise contemplated by this
Agreement, Wesbanco covenants and agrees:
(a) That it will use its best efforts in good faith to take, or
cause to be taken all action required under this Agreement on its
part, or AB's or Bank's part, to be taken as promptly as practicable
so as to permit the consummation of the Merger at the earliest
possible date and to cooperate fully with the other parties to that
end, and that it will, in all such efforts, give priority to this
acquisition of American;
(b) To deliver to American all Forms 10-K, 10-Q and 8-K filed for
periods ending after the date of this Agreement within seven (7) days
after the filing of each such report with the SEC;
(c) To promptly advise American of any material adverse change in
the financial condition, assets, businesses or operations of Wesbanco
or any of its subsidiaries, or any material changes or inaccuracies in
data provided to American pursuant to this Agreement or any
"acquisition proposal" with respect to Wesbanco received by Wesbanco;
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(d) To cooperate with American in furnishing such information
concerning the business and affairs of Wesbanco and its subsidiaries
and its directors and officers as is reasonably necessary or requested
in order to prepare and file any application for regulatory or
governmental approvals, including but not limited to an application to
the Federal Reserve Board and the West Virginia Department of Banking
for prior approval of the acquisition of American by Wesbanco as
contemplated hereunder. Wesbanco will use its best efforts to obtain
the approval or consent of any federal, state or other regulatory
agency having jurisdiction and of any other party to the extent that
such approvals or consents are required to effect the Merger and the
transactions contemplated hereby or are required with respect to the
documents described in Section 9.4 hereof; and
(e) To cooperate with American in furnishing such information
concerning the business of Wesbanco and its subsidiaries as is
reasonably necessary or requested in order to prepare any Proxy
Statement to be prepared in connection with the Merger.
9.24 AUTHORITY TO ISSUE SHARES. The shares of common stock of Wesbanco
to be issued pursuant to this Agreement will be duly authorized at the time the
Merger is consummated. When issued upon the terms and conditions specified in
this Agreement, such shares shall be validly issued, fully paid, and
nonassessable. The shareholders of Wesbanco have, and will have, no preemptive
rights with respect to the issuance of the shares of Wesbanco to be authorized
and issued in the transaction contemplated in this Agreement.
9.25 REPURCHASE AGREEMENTS. With respect to any agreement pursuant to
which Wesbanco or the Wesbanco Subs have purchased securities subject to an
agreement to repurchase, Wesbanco and the Wesbanco Subs have a valid, perfected
first lien or security interest in or evidence of ownership in book entry form
of the government securities or other collateral securing the repurchase
agreement, and the value of such collateral equals or exceeds the amount of the
debt secured thereby.
9.26 RISK MANAGEMENT INSTRUMENTS. All material interest rate swaps,
caps, floors, option agreements, mortgage backed securities, futures and forward
contracts and other similar risk management arrangements, whether entered into
for Wesbanco's or the Wesbanco Subs' own account, or for the account of one
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or more of its customers, were entered into (A) in accordance with prudent
business practices and all applicable laws, rules, regulations and regulatory
policies and (B) with counter-parties believed to be financially responsible at
the time; and each of them constitutes the valid and legally binding obligation
of Wesbanco or the Wesbanco Subs enforceable in accordance with its terms, and
is in full force and effect. Wesbanco and the Wesbanco Subs are not, nor to
Wesbanco's knowledge is any other party thereto, in breach of any of its
obligations under any such agreement or arrangement.
SECTION 10
INVESTIGATION
Subject to the conditions set forth in this Section 10, prior to the
Effective Time, Wesbanco and American may directly and through their
representatives, make such investigation of the assets and business of Wesbanco
and American and their subsidiaries as each deems necessary or advisable.
Wesbanco and American and their representatives, including, without limitation,
their accountants and investment advisors, shall have, at reasonable times after
the date of execution by Wesbanco and American hereof, full access to the
premises and to all the property, documents, material contracts, books and
records of each, and its subsidiaries, and to all documents, information and
working papers concerning each held by such party's accountants, without
interfering in the ordinary course of business of such entity, and the officers
of each will furnish to the other such financial and operating data and other
information with respect to the business and properties of each other and their
subsidiaries as each shall from time to time reasonably request; provided,
however, that neither party shall be required to give such access or information
to the other party to the extent that it is prohibited therefrom by rule,
regulation, or order of any regulatory body, and further provided that
confidential information of individual banking customers shall not be
photocopied or removed from the premises of such institution. All data and
information received by Wesbanco and its authorized representatives from
American and by American and its authorized representatives from Wesbanco shall
be held in strict confidence by such party and its authorized representatives,
and neither party nor its authorized representatives will use such data or
information or disclose the same to others except with the written permission of
the other party.
SECTION 11
NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES
The representations and warranties included or provided herein shall
not survive the Effective Date.
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SECTION 12
CONDITIONS PRECEDENT; CLOSING DATE
AND EFFECTIVE DATE
12.1 CONDITIONS PRECEDENT OF WESBANCO AND AMERICAN. The consummation
of this Agreement by Wesbanco and American and the Merger is conditioned upon
the following:
(a) The shareholders of American, Wesbanco, AB and Bank shall
have approved this Agreement by such vote as required by law;
(b) The West Virginia Banking Board (i) shall have granted its
final approval of the incorporation and organization of AB as a West
Virginia corporation, the Merger and the Bank Merger and (ii) shall
not, within 120 days from the date of Wesbanco's submission to the
Banking Board pursuant to West Virginia Code Section 31A-8A- 4(a),
have entered an order disapproving the acquisition of American by
Wesbanco pursuant to this Agreement;
(c) The Secretary of State of West Virginia shall have issued
a Certificate of Incorporation for AB;
(d) The Board of Governors of the Federal Reserve System
shall have approved the application of Wesbanco to acquire American;
the Merger of AB pursuant to this Agreement; and the merger of the
Subsidiary with and into the Bank;
(e) The Registration Statement of Wesbanco shall be effective
on the date of the Closing and all post-effective amendments filed
shall have been declared effective or shall have been withdrawn by
that date. No stop orders suspending the effectiveness thereof shall
have been issued which remain in effect on the date of the Closing or
shall have been threatened, and no proceedings for that purpose shall,
before the Closing, have been initiated or, to the knowledge of
Wesbanco, threatened by the SEC. All state securities and "Blue Sky"
permits or approvals required (in the opinion of Wesbanco and American
to carry out the transaction contemplated in this Agreement) shall
have been received.
(f) No order to restrain, enjoin or otherwise prevent the
consummation of the transactions contemplated in this Agreement shall
have been entered by any court or administrative body which remains in
effect on the date of the Closing.
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(g) Wesbanco, American, AB and Bank shall have received, in
form and substance satisfactory to Wesbanco's and American's counsel,
all consents, federal, state, governmental, regulatory and other
approvals and permissions, and the satisfaction of all the
requirements prescribed by law which are necessary to the carrying out
of the transactions contemplated hereby shall have been procured,
including the filing of an effective Registration Statement with the
Securities and Exchange Commission and in addition, Wesbanco and
American shall have received any and all consents required with
respect to the documents described pursuant to Section 8.3 and Section
9.4 hereof;
(h) All delay periods and all periods for review, objection or
appeal of or to any of the consents, approvals or permissions required
with respect to the consummation of the Merger and the Bank Merger and
this Agreement shall have expired;
(i) Unless waived by Wesbanco and American, the holders of not
more than ten percent (10%) of the outstanding common stock of American
shall have made written demand for the fair cash value in accordance
with ORC, not have voted in favor of the Agreement at the special
meeting of American shareholders referred to in Section 14.1 hereof and
have otherwise exercised such dissenters' rights pursuant to Section
1701.85 of the ORC;
(j) On or before the Closing Date, there shall have been
received from the Internal Revenue Service a ruling or rulings, or, at
the option of American, in lieu thereof, an opinion from counsel for
American substantially to the effect that for Federal Income Tax
purposes:
(i) The statutory merger of American with AB and the
statutory merger of the Subsidiary with Bank will each
constitute a reorganization within the meaning of Section
368(a)(1) of the Internal Revenue Code of 1986 ("IRC"), and
Wesbanco, American, AB and Bank will each be a "party to a
reorganization" as defined in IRC Section 368(b);
(ii) No gain or loss will be recognized by Wesbanco,
American, AB or Bank as a result of the transactions
contemplated in the Agreement;
(iii) No gain or loss will be recognized by the
shareholders of American as a result of their exchange of
American's Common Stock for Wesbanco's Common Stock, except to
the extent any shareholder receives cash in lieu of a
fractional share or as a dissenting shareholder;
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(iv) The holding period of the Wesbanco Common Stock
received by each holder of American Common Stock will include
the period during which the stock of American surrendered in
exchange therefor was held, provided such stock was a capital
asset in the hands of the holder on the date of exchange; and
(v) The Federal Income Tax basis of the Wesbanco
Common Stock received by each holder of American Common Stock
will be the same as the basis of the stock exchanged
therefore.
(k) No action, proceeding, regulation or legislation shall
have been instituted before any court, governmental agency or
legislative body to enjoin, restrain or prohibit, or to obtain
substantial damages with respect to, the Agreement or the consummation
of the transactions contemplated hereby, which, in the reasonable
judgment of Wesbanco or American would make it inadvisable to
consummate such transactions (it being understood and agreed that a
written request by governmental authorities for information with
respect to the Merger or the Bank Merger may not be deemed by either
party to be a threat of material litigation or proceeding, regardless
of whether such request is received before or after execution of the
Agreement).
(l) The approvals referred to in subparagraphs (b) and (d) of
Subsection 12.1 herein shall not have required the divestiture or
cessation of any significant part of the present operations conducted
by Wesbanco, American or any of their subsidiaries, and shall not have
imposed any other condition, which divestiture, cessation or condition
Wesbanco reasonably deems to be materially disadvantageous or
burdensome.
12.2 CONDITIONS PRECEDENT OF WESBANCO. The consummation of this
Agreement by Wesbanco and the Merger is also conditioned upon the following:
(a) Unless waived by Wesbanco, the representations and
warranties of American contained in this Agreement shall be correct on
and as of the Effective Date with the same effect as though made on and
as of such date, except for representations and warranties expressly
made only as of a particular date and except for changes which have
been consented to by Wesbanco or which are not, in the aggregate,
material and adverse, to the financial condition, businesses,
properties or operations of American and its Subsidiary
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taken as a whole, or which are the result of expenses or transactions
contemplated or permitted by the Agreement; and American shall have
performed in all material respects all of its obligations and
agreements hereunder theretofore to be performed by it; and Wesbanco
and AB shall have received on the Effective Date an appropriate
certificate (in affidavit form) dated the Effective Date and executed
on behalf of American by one or more appropriate executive officers of
American to the effect that such officers have no knowledge of the
nonfulfillment of the foregoing condition;
(b) OPINION OF AMERICAN COUNSEL. An opinion of Robert P.
Fitzsimmons, counsel for American, shall have been delivered to
Wesbanco, dated the Closing Date, and in form and substance
satisfactory to Wesbanco and its counsel, to the effect that:
(i) American is a corporation duly organized, validly
existing and in good standing under the laws of the State of
Ohio and has the full corporate power and authority to own all
of its properties and assets and to carry on its business as
it is now being conducted, and neither the ownership of its
property nor the conduct of its business requires it, or its
Subsidiary, to be qualified to do business in any other
jurisdiction except where the failure to be so qualified,
considering all such cases in the aggregate, does not involve
a material risk to the business, properties, financial
position or results of operations of American and its
Subsidiary, taken as a whole.
(ii) American has the full corporate power to execute
and deliver the Agreement. All corporate action of American
required to duly authorize the Agreement and the actions
contemplated thereby has been taken, and the Agreement is
valid and binding on American in accordance with its terms,
subject, as to the enforcement of remedies, to applicable
bankruptcy, insolvency, reorganization, fraudulent conveyance,
receivership, moratorium, or other similar laws affecting the
enforcement of creditors' rights generally from time to time
in effect, whether state or federal; subject to application of
the public policy of the State of West Virginia; and subject
to any equitable principles limiting the right to obtain
specific performance of certain obligations thereunder,
whether such enforcement is considered in a proceeding in
equity or at law.
(iii) All shares of common stock of American issued
and outstanding as of the Effective Date are duly authorized,
validly issued, fully paid and nonassessable.
(iv) The consummation of the Merger and the Bank
Merger contemplated by the Agreement will not violate any
provision of American's or the Subsidiary's Articles of
Incorporation or Bylaws, or violate any provision of, or
result in the acceleration of any material obligation under,
any material mortgage, loan agreement, order, judgment, law or
decree known to such counsel to which American is a party or
by which it is bound and will not violate or conflict with any
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other material restriction of any kind or character known to
such counsel to which American is subject, which would have a
materially adverse effect on the assets, business or
operations of American, taken as a whole.
(v) American's Subsidiary is a national banking
association and is duly organized, validly existing and in
good standing under the laws of the United States, and it has
the requisite corporate power and authority to own and lease
its properties and to conduct its business as it is now being
conducted. To the best of such counsel's knowledge American
owns 100% of the issued and outstanding stock of such
corporation.
(vi) To the best of such counsel's knowledge, as of
the date hereof neither American nor its Subsidiary was
involved in any litigation against them (with possible
exposure of $100,000.00 or more), pending or threatened.
(c) Jeremy C. McCamic and Paul W. Donahie shall have resigned
as officers of American and its Subsidiary, which resignations shall be
dated as of the Closing Date, shall have each executed severance plan
clarification agreements in form and substance satisfactory to Wesbanco
and have executed Consulting Agreements in form and substance
satisfactory to Wesbanco. Brent E. Richmond and John E. Wait shall have
duly executed and delivered the employment agreements with the Bank,
dated as of the Closing Date, in substantially the form attached hereto
as Exhibits ____ and _____, and Brent E. Richmond and John E. Wait
shall each have executed severance plan clarification agreements and
Patrick G. O'Brien shall have executed an Amendment to Employment
Agreement, each in form and substance satisfactory to Wesbanco.
(d) American shall have delivered to Wesbanco a schedule
identifying all persons who may be deemed to be "affiliates" of
American under Rule 145 of the Securities Act of 1933, as amended, and
shall use its best efforts to cause each affiliate to deliver to
Wesbanco prior to the Effective Date a letter substantially in the form
attached hereto as Exhibit A.
(e) American shall have furnished Wesbanco with a certified
copy of resolutions duly adopted by the Board of Directors and the
shareholders of American approving the Agreement and authorizing the
Merger and the transactions contemplated hereby.
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(f) Unless waived by Wesbanco, on the Closing Date, there
shall not be pending against American or its Subsidiary or the officers
or directors of American or its Subsidiary in their capacity as such,
any suit, action or proceeding which, in the reasonable judgment of
Wesbanco, if successful, would have material adverse effect on the
financial condition or operations of American or its Subsidiary.
(g) American shall have executed and delivered to Wesbanco a
Stock Option Agreement, substantially in the form attached hereto as
Exhibit B, dated the date of this Agreement, and incorporated herein by
reference.
12.3 CONDITIONS PRECEDENT OF AMERICAN. The consummation of this
Agreement by American and the Merger is also conditioned upon the following:
(a) Unless waived by American the representations and
warranties of Wesbanco and AB contained in this Agreement shall be
correct on and as of the Effective Date with the same effect as though
made on and as of such date, except for representations and warranties
expressly made only as of a particular date and except for changes
which have been consented to by American or which are not in the
aggregate material and adverse to the financial condition, businesses,
properties or operations of Wesbanco and AB or which are the result of
expenses or transactions contemplated or permitted by this Agreement,
and Wesbanco and AB shall have performed in all material respects all
of their obligations and agreements hereunder theretofore to be
performed by them; and American shall have received on the Effective
Date an appropriate certificate (in affidavit form) dated the Effective
Date and executed on behalf of Wesbanco and AB by one or more
appropriate executive officers of each of them to the effect that such
officers have no knowledge of the nonfulfillment of the foregoing
conditions;
(b) OPINION OF WESBANCO COUNSEL. An opinion of Phillips,
Gardill, Kaiser & Altmeyer, counsel for Wesbanco, shall have been
delivered to American, dated the Closing Date, and in form and
substance satisfactory to American and its counsel, to the effect that:
(i) Wesbanco, AB and Bank are corporations duly
organized, validly existing and in good standing under the
laws of the State of West Virginia and have the full corporate
power and authority to own all of their properties and assets
and to carry on their businesses
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as they are now being conducted, and neither the ownership of
their property nor the conduct of their businesses require
them, or any of their subsidiaries, to be qualified to do
business in any other jurisdiction except where the failure to
be so qualified, considering all such cases in the aggregate,
does not involve a material risk to the business, properties,
financial position or results of operations of Wesbanco, AB
and Bank, taken as a whole.
(ii) Wesbanco, AB and Bank have the full corporate
power to execute and deliver the Agreement. All corporate
action of Wesbanco, AB and Bank required to duly authorize the
Agreement and the actions contemplated thereby have been
taken, and the Agreement is valid and binding on Wesbanco, AB
and Bank in accordance with its terms, subject, as to the
enforcement of remedies, to applicable bankruptcy, insolvency,
moratorium, or other similar laws affecting the enforcement of
creditors' rights generally from time to time in effect, and
subject to any equitable principles limiting the right to
obtain specific performance of certain obligations thereunder.
(iii) The consummation of the mergers contemplated by
the Agreement will not violate any provision of Wesbanco's,
AB's or Bank's Articles of Incorporation or Bylaws, or violate
any provision of, or result in the acceleration of any
material obligation under, any material mortgage, loan
agreement, order, judgment, law or decree known to such
counsel to which Wesbanco, AB or Bank are a party or by which
they are bound, and will not violate or conflict with any
other material restriction of any kind or character known to
such counsel to which Wesbanco, AB or Bank are subject which
would have a material adverse effect on the assets, business
or operations of Wesbanco, AB and Bank taken as a whole.
(iv) Each of Wesbanco's subsidiaries is duly
organized, validly existing and in good standing under the
laws of the state of its organization and has the requisite
corporate power and authority to own and lease its properties
and to conduct its business as it is now being conducted. To
the best of such counsel's knowledge, Wesbanco owns 100% of
the issued and outstanding stock of each such corporation.
(v) To the best of such counsel's knowledge, as of
the date hereof, neither Wesbanco nor any of its subsidiaries
were involved in any litigation against them (with possible
exposure of $100,000.00 or more), pending or threatened, that
has not been disclosed to American.
(vi) The shares of Wesbanco Common Stock to be issued
to American's shareholders pursuant to the Agreement, when
issued as described therein, will be duly authorized, validly
issued, fully paid and nonassessable.
(c) McDonald Investments Inc., financial advisors to American,
shall have furnished to American an opinion, or an updating of any
opinion rendered after the date of the Agreement, dated on or prior to
the distribution date of the Proxy Statement described
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in Section 14.1 of this Agreement, to the effect that the exchange
ratio is fair, from a financial point of view, as of such date, to the
shareholders of American.
(d) Wesbanco, AB and Bank shall have furnished American with
certified copies of resolutions duly adopted by the Boards of Directors
of Wesbanco, AB and Bank and the shareholders of Wesbanco, AB and Bank
approving the Agreement and authorizing the Merger, the Bank Merger and
transactions contemplated hereby.
(e) Unless waived by American, on the Closing Date, there
shall not be pending against Wesbanco or any of its subsidiaries or the
officers or directors of Wesbanco or any of its subsidiaries in their
capacity as such, any suit, action or proceeding which, in the
reasonable judgment of American, if successful, would have a material
adverse effect on the financial condition or operations of Wesbanco or
any of its subsidiaries.
12.4 CLOSING DATE. The Closing shall be effected as soon as practicable
after all of the conditions contained herein shall have been satisfied on the
Closing Date as defined in Section 2.3 hereof, which Closing Date shall be the
latest of:
(a) The second business day after the meetings of the
shareholders of American or Wesbanco, whichever is later, at which the
Agreement is approved;
(b) The fifteenth (15th) day after the approval of the
acquisition of American by the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board");
(c) The fifteenth (15th) day after the approval of the Bank
Merger by the Federal Reserve Board;
(d) The day after any stay of the Federal Reserve Board's
approval of the acquisition of American or the approval of the Bank
Merger shall be vacated or shall have expired or the day after any
injunction against the closing of the Merger or the Bank Merger shall
be lifted, discharged or dismissed;
(e) The day after the approval of the acquisition of American
by the West Virginia Department of Banking is received by Wesbanco;
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(f) The second business day after the date on which the last
condition set forth in Section 12 is satisfied or waived;
(g) Such other date as shall be mutually agreed to by Wesbanco
and American. The Closing shall be held in Wheeling, West Virginia, at such time
and place as the parties may agree upon. The date and time of closing are herein
called the "Closing Date". Promptly after the Closing, the Articles of Merger
with respect to the Merger, and the Bank Merger, shall be filed with the
Secretary of State of West Virginia.
12.5 EFFECTIVE DATE. The Merger, and the Bank Merger, shall become
effective (the "Effective Date") on the date on which the Certificates of Merger
approving the mergers are issued by the Secretary of State of West Virginia. The
surviving corporations shall record said Certificates of Merger in the office of
the Clerk of the County Commission of Ohio County.
SECTION 13
TERMINATION OF AGREEMENT
13.1 GROUNDS FOR TERMINATION. This Agreement and the transactions
contemplated hereby may be terminated at any time prior to the Closing Date
either before or after the meeting of the shareholders of American:
(a) By mutual consent of American and Wesbanco;
(b) By either American or Wesbanco if any of the conditions
hereto to such party's obligations to close have not been met as of the
Closing Date and the same has not been waived by the party adversely
affected thereby;
(c) By either American or Wesbanco if the Merger shall violate
any nonappealable final order, decree or judgment of any court or
governmental body having competent jurisdiction;
(d) By American or Wesbanco, if the Closing Date has not
occurred by December 31, 2001;
(e) By American, unless waived by American, if the Market
Value of Wesbanco stock shall fall below Sixteen Dollars ($16.00) per
share as of the Closing Date. Market Value, for purposes of this
paragraph, shall mean the average bid price of Wesbanco Common Stock
(as quoted on Nasdaq Stock Market) for the 30 calendar days preceding
five business days before the Closing.
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(f) By either party in the event that the shareholders of
American or Wesbanco vote against consummation of the Merger.
13.2 EFFECT OF TERMINATING; RIGHT TO PROCEED. In the event this
Agreement shall be terminated pursuant to Section 13.1, all further obligations
of Wesbanco and American under this Agreement, except Sections 10, 13.1, 13.2
and 20 hereof, shall terminate without further liability of Wesbanco and AB to
American or of American to Wesbanco and AB.
13.3 RETURN OF DOCUMENTS IN EVENT OF TERMINATION. In the event of
termination of this Agreement for any reason, Wesbanco and American shall each
promptly deliver to the other all documents, work papers and other material
obtained from each other relating to the transactions contemplated hereby,
whether obtained before or after the execution hereof, including information
obtained pursuant to Section 10 hereof, and will take all practicable steps to
have any information so obtained kept confidential, and thereafter, except for
any breach of the continuing sections of the Agreement, each party shall be
mutually released and discharged from liability to the other party or to any
third parties hereunder, and no party shall be liable to any other party for any
costs or expenses paid or incurred in connection herewith.
SECTION 14
MEETING OF SHAREHOLDERS OF AMERICAN
14.1 Subject to receipt by American of the fairness opinion described
in Section 12.3(c) hereof, American shall take all steps necessary to call and
hold a special meeting of its shareholders, in accordance with applicable law
and the Articles of Incorporation and Bylaws of American as soon as practicable
(considering the regulatory approvals required to be obtained) for the purpose
of submitting this Agreement to its shareholders for their consideration and
approval and will send to its shareholders for purposes of such meeting a Proxy
Statement which will not contain any untrue statement of a material fact with
respect to American or omit to state a material fact with respect to American
required to be stated therein or necessary to make the statements contained
therein, in light of the circumstances under which they were made, not
misleading, and which otherwise materially complies as to form with all
applicable laws, rules and regulations.
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14.2 It is understood that as an integral part of the transaction
contemplated by this Agreement, Wesbanco shall file a Registration Statement
with respect to the offering of its common shares to be issued in the Merger.
The term "Registration Statement" as used in this Agreement includes all
preliminary filings, post-effective amendments and any Proxy Statement of
American. Accordingly, Wesbanco and American agree to assist and cooperate fully
with each other in the preparation of the Registration Statement. Both American
and Wesbanco further agree to deliver to each other, both as of the Effective
Date of the Registration Statement and as of the Closing, a letter, in form and
substance satisfactory to the other party and its counsel, stating that, to the
best of their knowledge and belief, all of the facts with respect to either
Wesbanco or American, as the case may be, set forth in the Registration
Statement, are true and correct in all material respects, and that the
Registration Statement does not omit any material fact necessary to make the
facts stated therein with respect to such party not misleading in light of the
circumstances under which they were made.
SECTION 15
BROKERS
American represents and warrants to Wesbanco and Wesbanco represents
and warrants to American that no broker or finder has been employed, or is
entitled to a fee, commission or other compensation, with respect to this
Agreement or the transactions contemplated hereby, other than fees due from
American to McDonald Investments Inc., its financial advisor.
SECTION 16
GOVERNING LAW; SUCCESSORS AND
ASSIGNS; COUNTERPARTS; ENTIRE AGREEMENT
This Agreement (a) shall be governed by and construed under and in
accordance with the laws of the State of West Virginia; (b) shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns, provided, however, that this Agreement may not be
assigned by any party without the written consent of the other parties hereto;
(c) may be executed in one or more counterparts, all of which shall be
considered one and the same agreement, and shall become effective and binding as
to Wesbanco and American when one or more counterparts shall have been signed
and delivered by Wesbanco and American and shall become effective and binding as
to AB when AB receives its Certificate of Incorporation and its officers execute
the Agreement; and (d) embodies the entire Agreement and understanding of the
parties with respect to the subject
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matter hereof; and (e) supersedes all prior agreements and understandings,
written or oral, between American and Wesbanco relating to the subject matter
hereof.
SECTION 17
EFFECT OF CAPTIONS
The captions of this Agreement are included for convenience only and
shall not in any way affect the interpretation or construction of any of the
provisions hereof.
SECTION 18
NOTICES
Except as specifically provided in Section 8.21(d) hereof, any notices
or other communication required or permitted hereunder shall be sufficiently
given if delivered personally or sent by first class, registered or certified
mail postage prepaid, with return receipt requested addressed as follows:
To American:
American Bancorporation
1025 Main Street
Wheeling, WV 26003
ATTENTION: Jeremy C. McCamic, Chairman
With copies to:
Robert P. Fitzsimmons, Esq. Barry C. Maloney, Esq.
1609 Warwood Avenue Maloney & Knox
Wheeling, WV 26003 5225 Wisconsin Ave., N.W.
Suite 316
Washington, DC 20015-2014
To Wesbanco:
Wesbanco, Inc.
One Bank Plaza
Wheeling, WV 26003
ATTENTION: Edward M. George, President
With a copy to:
James C. Gardill, Esq.
Phillips, Gardill, Kaiser & Altmeyer
61 Fourteenth Street
Wheeling, WV 26003
or such other addresses as shall be furnished in writing by either party to the
other party. Any such notice or communication shall be deemed to have been given
as of the date so mailed.
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SECTION 19
AMENDMENTS
Any of the terms or conditions of the Agreement may be waived at any
time by the party which is, or the shareholders of which are, entitled to the
benefit thereof, by action taken by the Board of Directors of such party, or any
of such terms or conditions may be amended or modified in whole or in part at
any time as follows. This Agreement may be amended in writing (signed by all
parties hereto) before or after the meeting of American shareholders at any time
prior to the Closing Date with respect to any of the terms contained herein,
provided, however, that if amended after such meeting of shareholders, the
exchange ratio per share at which each share of common stock of American shall
be converted and any other material terms of the Merger shall not be amended
after the meeting of American shareholders unless the amended terms are
resubmitted to the shareholders for approval. Neither the Agreement nor any
provisions hereof, may be changed, waived, discharged or terminated orally, or
by the passage of time, except by a statement in writing signed by the party
against which the enforcement of such change, waiver, discharge or termination
is sought.
SECTION 20
EXPENSES
Each party to this Agreement shall pay its own legal and accounting
fees and other costs and expenses incurred in connection with this Agreement and
the transactions contemplated hereby.
SECTION 21
MISCELLANEOUS
21.1 PUBLICITY. The parties will not publicly release any information
about the transactions contemplated hereby except as they may mutually agree or
as may be required by law.
21.2 INCORPORATION BY REFERENCE. Any and all schedules, exhibits,
annexes, statements, reports, certificates or other documents or instruments
referred to herein or attached hereto are incorporated herein by reference as
though fully set forth at the point referred to in the Agreement.
21.3 MATERIAL ADVERSE CHANGE. In determining whether there has been a
material adverse change for purposes of this Agreement, transaction costs and
expenses (i.e. accounting, legal and investment banking fees) of the
transactions contemplated hereby shall not be taken into account.
21.4 BINDING DATE. This Agreement is effective and binding as to
Wesbanco and American upon the date first above written and effective and
binding as to AB upon execution hereof by AB.
A - 47
IN WITNESS WHEREOF, WESBANCO, INC., AMERICAN BANCORPORATION, AB
CORPORATION and WESBANCO BANK, INC. have each caused this Agreement to be
executed on their behalf by their officers thereunto duly authorized all as of
the day and year first above written.
WESBANCO, INC., A WEST VIRGINIA
CORPORATION
By /s/ EDWARD M. GEORGE
-------------------------------------
Its President & Chief Executive Officer
(SEAL)
ATTEST:
/s/ LARRY G. JOHNSON
- --------------------
Secretary
AMERICAN BANCORPORATION,
AN OHIO CORPORATION
By /s/ JEREMY C. MCCAMIC
------------------------------------
Its Chairman
(SEAL)
ATTEST:
/s/ LINDA WOODFIN
- -----------------
Secretary
AMERICAN BANCORPORATION
By /s/ JEREMY C. MCCAMIC
--------------------------------------
Jeremy C. McCamic
Chairman and Chief Executive Officer
By /s/ JACK O. CARTNER
---------------------------------------
Jack O. Cartner, Director
By /s/ PAUL W. DONAHIE
---------------------------------------
Paul W. Donahie, Director
By /s/ ABIGAIL MCCAMIC FEINKOPF
---------------------------------------
Abigail McCamic Feinkopf, Director
A - 48
By /s/ JAY T. MCCAMIC
--------------------------------------
Jay T. McCamic, Director
By /s/ JOLYON W. MCCAMIC
--------------------------------------
Jolyon W. McCamic, Director
By /s/ JEFFREY W. MCCAMIC
--------------------------------------
Jeffrey W. McCamic, Director
By /s/ JOHN J. MALIK, JR.
--------------------------------------
The Honorable John J. Malik, Jr.,
Director
(SEAL)
ATTEST:
/s/ LINDA WOODFIN
- -----------------
Secretary
AB CORPORATION, A WEST
VIRGINIA CORPORATION AS OF
THE 9TH DAY OF MARCH, 2001.
By /s/
----------------------------------------
Its Vice President
(SEAL)
ATTEST:
/s/ JAMES A. GARDILL
- --------------------
Secretary
WESBANCO BANK, INC., A WEST VIRGINIA
CORPORATION
By /s/ EDWARD M. GEORGE
---------------------------------------
Its President & Chief Executive Officer
(SEAL)
ATTEST:
/s/ STEPHEN E. HANNIG
- ---------------------
Secretary
A - 49
ANNEX B
FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER
THIS FIRST AMENDMENT AGREEMENT (hereinafter called "Agreement"), made
and entered into as of the 5th day of November, 2001, by and between WESBANCO,
INC., a West Virginia corporation, with its principal place of business located
at Bank Plaza, Wheeling, West Virginia (hereinafter called "Wesbanco"), party of
the first part, AMERICAN BANCORPORATION, an Ohio corporation, with its principal
place of business located at 1025 Main Street, Wheeling, West Virginia, 26003,
(hereinafter called "American") party of the second part, AB CORPORATION
(hereinafter called "AB"), a corporation to be formed under the laws of the
State of West Virginia by Wesbanco as its wholly-owned subsidiary solely for the
purpose of effecting the acquisition contemplated by this Agreement, party of
the third part, (effective as of its organization and execution of this
Agreement) and WESBANCO BANK, INC., a West Virginia banking corporation, with
its principal place of business located at One Bank Plaza, Wheeling, West
Virginia, 26003, party of the fourth part (hereinafter called "Bank").
WHEREAS, the parties hereto heretofore executed a certain Agreement and
Plan of Merger dated the 22nd day of February, 2001 (hereinafter called "Merger
Agreement") and the parties desire to make certain amendments to the terms and
conditions of said Merger Agreement, all as hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual promises and
covenants hereinafter set forth, and in accordance with the provisions of
applicable law, and intending to be legally bound hereby, the parties hereto do
hereby agree as follows:
1. The parties hereby agree that the capitalized terms not herein
specifically defined shall have the meanings ascribed to them in the Merger
Agreement.
2. Section 4.3 of said Merger Agreement is hereby deleted in its
entirety and the following Section 4.3 is substituted in its place:
4.3 BANK DIRECTORS. Wesbanco covenants and agrees that as of
the Effective Date it will appoint, as additional directors of Bank,
Jack A. Cartner, Jolyon W. McCamic, and Jeffrey W. McCamic,
specifically waiving for such limited term, its age 70 provision of its
Bylaws. Such individuals shall serve until December 31, 2002, at which
time the terms for Jack A. Cartner and Jolyon W. McCamic shall expire
and they will resign from the Bank Board. Jeffrey W. McCamic shall
continue as a member of the Bank Board and shall serve until his
successor shall have been duly elected and qualified.
B - 1
3. Section 4.4 of said Merger Agreement is hereby deleted in its
entirety and the following Section 4.4 is substituted in its place:
4.4 WESBANCO DIRECTORS. Wesbanco covenants and agrees that as
of the Effective Date it will appoint, as additional directors of
Wesbanco, Jeremy C. McCamic and Abigail M. Feinknopf. Jeremy C. McCamic
shall serve as a member of the Board of Directors until December 31,
2002, at which time he shall resign and he shall be replaced by Jay T.
McCamic who shall be appointed by the Board to serve the unexpired
term. Wesbanco shall then include the said Abigail M. Feinknopf and Jay
T. McCamic on the list of nominees for the position of director for
which the Board shall solicit proxies at its next annual meeting of
shareholders until each has served at least a full three year term.
During his term on the Board, the said Jeremy C. McCamic shall also be
appointed to the Executive Committee. Wesbanco will take such action
under its Bylaws as is necessary to permit the said Jeremy C. McCamic
to serve as a Director until December 31, 2002, with respect to its age
70 provision.
4. Section 8.6 of said Merger Agreement is hereby deleted in its
entirety and the following Section 8.6 is substituted in its place:
8.6 NO ACTION, ETC. Except as disclosed in the Disclosure
Schedule of American dated not more than 30 days from the date hereof
and as supplemented not more than thirty (30) days from the date of the
First Amendment Agreement (hereinafter collectively called the
"American Disclosure Schedule"), and as supplemented on the Effective
Date, there are no suits, actions, proceedings, claims or
investigations (formal or informal) pending, or to the knowledge of
American, threatened against or relating to American, its Subsidiary,
their business or any of their properties or against any of their
officers or directors (in their capacity as such) in law or in equity
or before any governmental agency. There are no suits, actions,
proceedings, claims or investigations against American, its Subsidiary,
their properties or against any of their officers or directors (in
their capacity as such) in law or in equity or before any governmental
agency which, individually or in the aggregate, would, or is reasonably
likely to, if determined adversely to such party, materially adversely
affect the financial condition (present or prospective), businesses,
properties or operations of American or its Subsidiary or the ability
of American or its Subsidiary to conduct their business as presently
conducted or to consummate the transactions contemplated hereby, and
American does not know of any basis for any such action or proceeding.
Except as disclosed in the American Disclosure Schedule, American and
its Subsidiary are not parties or subject to any cease and desist
order, agreement or similar arrangement with a regulatory authority
which restricts their operations or requires any action, and neither
American nor its Subsidiary is transacting business in material
violation of any applicable law, ordinance, requirement, rule,
regulation or order.
5. Section 9.12 of said Merger Agreement is hereby deleted in its
entirety and the following Section 9.12 is substituted in its place:
9.12 NO ACTION, ETC. Except as disclosed in the Wesbanco
Disclosure Schedule, dated not more than 30 days from the date hereof
and as supplemented not more than thirty (30) days from the date of the
First Amendment Agreement (hereinafter collectively called the
"Wesbanco Disclosure Schedule"), and as supplemented on the Effective
Date, there are no suits, actions, proceedings, claims or
investigations (formal or informal) pending, or to the knowledge of
Wesbanco pending or threatened, against or relating to Wesbanco, its
subsidiaries, its businesses or any of its properties or against any of
their officers or directors (in their capacity as such) in law or in
equity or before any governmental agency. There are no suits, actions,
proceedings, claims or investigations against or relating to Wesbanco,
its subsidiaries, its businesses, its properties or against any of
their officers or directors (in their capacity as such) in law or in
equity or before any
B - 2
governmental agency, which, individually or in the aggregate, would, or
is reasonably likely to, if determined adversely to such party,
materially adversely affect the financial condition (present or
prospective), businesses, properties or operations of Wesbanco or its
subsidiaries or the ability of Wesbanco or its subsidiaries to conduct
its business as presently conducted or consummate the transaction
contemplated hereby, and Wesbanco does not know of any basis for any
such action or proceeding. Neither Wesbanco nor any of its subsidiaries
are a party or subject to any cease and desist order, agreement or
similar arrangement with a regulatory authority which restricts its
operations or requires any action and neither Wesbanco nor any of its
subsidiaries are transacting business in material violation of any
applicable law, ordinance, requirement, rule, order or regulation.
6. Subsection (d) of Section 13.1 of said Merger Agreement is hereby
deleted in its entirety and the following Subsection (d) of Section 13.1 is
substituted in its place:
(d) By American or Wesbanco, if the Closing Date has not
occurred by March 31, 2002;
IN WITNESS WHEREOF, WESBANCO, INC., AMERICAN BANCORPORATION, AB
CORPORATION and WESBANCO BANK, INC. have each caused this Agreement to be
executed on their behalf by their officers thereunto duly authorized all as of
the day and year first above written.
WESBANCO, INC., A WEST VIRGINIA
CORPORATION
By PAUL M. LIMBERT
-----------------------------------------
Its President
(SEAL)
ATTEST:
/s/ STEPHEN E. HANNIG
- --------------------------
Assistant Secretary
B - 3
AMERICAN BANCORPORATION,
AN OHIO CORPORATION
By /s/ JEREMY C. MCCAMIC
----------------------------------------
Its Chairman
(SEAL)
ATTEST:
/s/ BRENT E. RICHMOND
- --------------------------
President
AMERICAN BANCORPORATION
By /s/ JEREMY C. MCCAMIC
-----------------------------------------
Jeremy C. McCamic
Chairman and Chief Executive Officer
By /s/ JACK O. CARTNER
-----------------------------------------
Jack O. Cartner, Director
By /s/ PAUL W. DONAHIE
-----------------------------------------
Paul W. Donahie, Director
By /s/ ABIGAIL MCCAMIC FEINKOPF
-----------------------------------------
Abigail McCamic Feinkopf, Director
By /s/ JAY T. MCCAMIC
-----------------------------------------
Jay T. McCamic, Director
By /s/ JOLYON W. MCCAMIC
-----------------------------------------
Jolyon W. McCamic, Director
By /s/ JEFFREY W. MCCAMIC
-----------------------------------------
Jeffrey W. McCamic, Director
By /s/ JOHN J. MALIK, JR.
-----------------------------------------
The Honorable John J. Malik, Jr.,
Director
(SEAL)
ATTEST:
/s/ BRENT E. RICHMOND
- ---------------------------
President
B - 4
AB CORPORATION, A WEST VIRGINIA
CORPORATION
By /s/ PAUL M. LIMBERT
-----------------------------------------
Its President and CEO
(SEAL)
ATTEST:
/s/ JAMES A. GARDILL
- ---------------------------
Secretary
WESBANCO BANK, INC., A WEST VIRGINIA
CORPORATION
By /s/ PAUL M. LIMBERT
-----------------------------------------
Its Chairman
(SEAL)
ATTEST:
/s/ STEPHEN E. HANNIG
- ---------------------------
Secretary
B - 5
ANNEX C
STOCK OPTION AGREEMENT
THIS STOCK OPTION AGREEMENT ("Option Agreement") dated as of the 22nd
day of February, 2001, by and between WESBANCO, INC., a West Virginia
corporation ("Wesbanco") and AMERICAN BANCORPORATION, an Ohio corporation
("American").
WITNESSETH:
WHEREAS, the Boards of Directors of Wesbanco and American have approved
an Agreement and Plan of Merger ("Merger Agreement"), which contemplates the
merger of American with AB Corporation, a West Virginia corporation and
wholly-owned subsidiary of Wesbanco ("AB"), with AB continuing as the surviving
corporation;
WHEREAS, as a condition to Wesbanco's entry into the Merger Agreement
and to induce such entry, American has agreed to grant to Wesbanco the option
set forth herein to purchase authorized but unissued shares of common stock,
without par value, of American ("American Common Stock");
NOW, THEREFORE, in consideration of the premises herein contained, the
parties agree as follows:
1. DEFINITIONS. Capitalized terms defined in the Merger Agreement and
used herein shall have the same meanings as in the Merger Agreement.
2. GRANT OF OPTION. Subject to the terms and conditions set forth
herein, American hereby grants to Wesbanco an option ("Option") to purchase up
to 622,805 shares of American Common Stock, at a price of $18.00 per share (the
"Option Price") payable in cash as provided in Section 4 hereof; provided,
however, that in the event American issues or agrees to issue any shares of
American Common Stock (other than as permitted under the Merger Agreement) at a
price less than $18.00 per share (as adjusted pursuant to Section 6 hereof), the
exercise price shall be equal to such lesser price.
3. EXERCISE OF OPTION.
a. Provided that Wesbanco is not in material breach of the
agreements and covenants contained in the Merger Agreement, Wesbanco
may exercise the Option, in whole or in part, at any time or from time
to time if a Purchase Event (as defined below) shall have occurred and
be continuing; provided that to the extent the Option shall not have
been exercised, it shall terminate and be of no further force and
effect (i) on the Effective Date of the Merger or (ii) upon termination
of the Merger Agreement in accordance with the provisions thereof
(other than a termination resulting from a willful breach by American
of Section 8.21(d) of the Merger Agreement or, following the occurrence
of a Purchase Event, failure of American's shareholders to approve the
Merger Agreement by the vote required under applicable law), or (iii)
six months after termination of the Merger Agreement due to a willful
breach by American of Section 8.21(d) of the Merger Agreement or,
following the occurrence of a Purchase Event, failure of American's
shareholders to approve the Merger Agreement by the vote required under
applicable law; and provided further that any such exercise shall be
subject to compliance with applicable provisions of law.
b. As used herein, a "Purchase Event" shall mean any of the
following events or transactions occurring after the date hereof:
C - 1
(i) any person (other than American, Wheeling
National Bank (the "American Subsidiary"), Wesbanco or any
affiliate of Wesbanco) shall have commenced a bona fide tender
or exchange offer to purchase shares of American Common Stock
such that upon consummation of such offer such person would
own or control 15% or more of the outstanding shares of
American Common Stock;
(ii) any person (other than American or the American
Subsidiary), other than in connection with a transaction to
which Wesbanco has given its prior written consent, shall have
filed an application or notice with any federal or state
regulatory agency for clearance or approval, to (x) merge or
consolidate, or enter into any similar transaction, with
American or the American Subsidiary, (y) purchase, lease or
otherwise acquire all or substantially all of the assets of
American or the American Subsidiary or (z) purchase or
otherwise acquire (including by way of merger, consolidation,
share exchange or any similar transaction) securities
representing 51% or more of the voting power of American or
the American Subsidiary;
(iii) any person (other than American, the American
Subsidiary, the American Subsidiary in a fiduciary capacity,
Wesbanco, affiliates of Wesbanco or subsidiaries of Wesbanco
in a fiduciary capacity) shall have acquired after the date
hereof beneficial ownership or the right to acquire beneficial
ownership of 15% or more of the outstanding shares of American
Common Stock (the term "beneficial ownership" for purposes of
this Option Agreement having the meaning assigned thereto in
Section 13(d) of the Exchange Act and the regulations
promulgated thereunder);
(iv) any person (other than American or the American
Subsidiary) shall have made a bona fide proposal to American
by public announcement or written communication that is or
becomes the subject of public disclosure to (x) acquire
American or the American Subsidiary by merger, consolidation,
purchase of all or substantially all of its assets or any
other similar transaction, or (y) make an offer described in
clause (i) above; or
(v) American shall have willfully breached Section
8.21(d) of the Merger Agreement, which breach would entitle
Wesbanco to terminate such Merger Agreement and such breach
shall not have been cured prior to the Notice Date (as defined
below).
If more than one of the transactions giving rise to a Purchase Event under this
Section 3(b) is undertaken or effected, then all such transactions shall give
rise only to one Purchase Event, which Purchase Event shall be deemed continuing
for all purposes hereunder until all such transactions are abandoned. As used in
this Option Agreement, "person" shall have the meanings specified in Sections
3(a)(9) and 13(d)(3) of the Exchange Act.
c. In the event Wesbanco wishes to exercise the Option, it
shall send to American a written notice (the date of which being herein
referred to as "Notice Date") specifying (i) the total number of shares
it will purchase pursuant to such exercise, and (ii) a place and date
not earlier than three business days nor later than 60 business days
from the Notice Date for the closing of such purchase ("Closing Date");
provided that if prior notification to or approval of any federal or
state regulatory agency is required in connection with such purchase,
Wesbanco shall promptly file the required notice or application for
approval and shall expeditiously process the same and the period of
time that otherwise would run pursuant to this sentence shall run
instead from the date on which
C - 2
any required notification period has expired or been terminated or such
approval has been obtained and any requisite waiting period shall have
passed.
4. PAYMENT AND DELIVERY OF CERTIFICATES.
a. At the closing referred to in Section 3(c) hereof, Wesbanco
shall pay to American the aggregate purchase price for the shares of
American Common Stock purchased pursuant to the exercise of the Option
in immediately available funds by a wire transfer to a bank account
designated by American.
b. At such closing, simultaneously with the delivery of cash
as provided in subsection (a), American shall deliver to Wesbanco a
certificate or certificates representing the number of shares of
American Common Stock purchased by Wesbanco, and Wesbanco shall deliver
to American a letter agreeing that Wesbanco will not offer to sell or
otherwise dispose of such shares in violation of applicable law or the
provisions of this Option Agreement.
c. Certificates for American Common Stock delivered at a
closing hereunder may be endorsed with a restrictive legend which shall
read substantially as follows:
"The transfer of the shares represented by this
certificate is subject to certain provisions of an agreement
between the registered holder hereof and American
Bancorporation and to resale restrictions arising under the
Securities Act of 1933, as amended, a copy of which agreement
is on file at the principal office of American Bancorporation.
A copy of such agreement will be provided to the holder hereof
without charge upon receipt by American Bancorporation of a
written request."
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if Wesbanco shall have
delivered to American a copy of a letter from the staff of the Securities and
Exchange Commission, or an opinion of counsel, in form and substance reasonably
satisfactory to American, to the effect that such legend is not required for
purposes of the Securities Act.
5. REPRESENTATIONS. American hereby represents, warrants and covenants
to Wesbanco as follows:
a. American shall at all times maintain sufficient authorized
but unissued shares of American Common Stock so that the Option may be
exercised without authorization of additional shares of American Common
Stock.
b. The shares to be issued upon due exercise, in whole or in
part, of the Option, when paid for as provided herein, will be duly
authorized, validly issued, fully paid and nonassessable.
6. ADJUSTMENT UPON CHANGES IN CAPITALIZATION. In the event of any
change in American Common Stock by reason of stock dividends, split-ups,
mergers, recapitalizations, combinations, exchanges of shares or the like, the
type and number of shares subject to the Option, and the purchase price per
share, as the case may be, shall be adjusted appropriately. In the event that
any additional shares of American Common Stock are issued or otherwise become
outstanding after the date of this Option Agreement (other than pursuant to this
Option Agreement), the number of shares of American Common Stock subject to the
Option shall be adjusted so that, after such issuance, it equals 19.9% of the
number of shares of American Common Stock then issued and outstanding without
giving effect to any shares subject or issued pursuant to the Option. Nothing
contained in this Section 6 shall be deemed to authorize American to breach any
provision of the Merger Agreement.
7. REGISTRATION RIGHTS. American shall, if requested by Wesbanco, as
expeditiously as possible file a registration statement on a form of general use
under the Securities Act if necessary in order to permit the sale or
C - 3
other disposition of the shares of American Common Stock that have been acquired
upon exercise of the Option in accordance with the intended method of sale or
other disposition requested by Wesbanco. Wesbanco shall provide all information
reasonably requested by American for inclusion in any registration statement to
be filed hereunder. American will use its best efforts to cause such
registration statement first to become effective and then to remain effective
for such period not in excess of 270 days from the day such registration
statement first becomes effective as may be reasonably necessary to effect such
sales or other dispositions. In no event shall American be required to effect
more than two registrations hereunder. All expenses of registrations hereunder
shall be borne equally by American and Wesbanco. The filing of any registration
statement hereunder may be delayed for such period of time as may reasonably be
required to facilitate any public distribution by American of American Common
Stock. If requested by Wesbanco, in connection with any such registration,
American will become a party to any underwriting agreement relating to the sale
of such shares, but only to the extent of obligating itself in respect of
representations, warranties, indemnities and other agreements customarily
included in such underwriting agreements. Upon receiving any request from
Wesbanco or assignee thereof under this Section 7, American agrees to send a
copy thereof to Wesbanco and to any assignee thereof known to American, in each
case by promptly mailing the same, postage prepaid, to the address of record of
the persons entitled to receive such copies.
8. SEVERABILITY. If any term, provision, covenant or restriction
contained in this Option Agreement is held by a court or a federal or state
regulatory agency of competent jurisdiction to be invalid, void or
unenforceable, the remainder of the terms, provisions and covenants and
restrictions contained in this Option Agreement shall remain in full force and
effect, and shall in no way be affected, impaired or invalidated. If for any
reason such court or regulatory agency determines that the Option will not
permit the holder to acquire the full number of shares of American Common Stock
provided in Section 2 hereof (as adjusted pursuant to Section 6 hereof), it is
the express intention of American to allow the holder to acquire such lesser
number of shares as may be permissible, without any amendment or modification
hereof.
9. PUT-BACK RIGHTS.
a. Upon the consummation of any Purchase Event described in
Section 3(b)(ii) or (v) hereof such that (i) a merger, consolidation,
purchase, lease or acquisition of all or substantially all of the
assets of American purchase or other acquisition of securities
representing 51% or more of the voting power of American or the
American Subsidiary has been consummated, or (ii) a willful breach
under Section 8.21(d) of the Merger Agreement has occurred so that
Wesbanco would be entitled to terminate the Merger Agreement, and prior
to the expiration of the Option in accordance with the terms hereof, at
the request of Wesbanco, American shall repurchase the Option from
Wesbanco at a price (the "Repurchase Price") equal to the difference
between the market/offer price (as defined below) for shares of
American Common Stock and the Option Price, multiplied by the number of
shares for which the Option being surrendered hereunder may then be
exercised but only if the market/offer price is greater than the Option
Price (the market/offer price is defined as the higher of the price per
share at which a tender offer or exchange offer for 51% or more of the
voting securities of American has been made and consummated, the price
per share actually paid by any third party pursuant to an agreement
that has been consummated whereby American has been merged,
consolidated with or otherwise acquired by a third party, and the
highest closing price for American Common Stock within the four-month
period immediately preceding the date Wesbanco gives written notice of
the required repurchase of the Option pursuant to this Section 9). In
the event that an exchange offer is made or an agreement is entered
into for a merger or consolidation involving consideration other than
cash, the value of the securities or other property issuable or
deliverable in exchange for American Common shall be determined by a
nationally recognized investment banking firm mutually acceptable to
the parties hereto.
b. Wesbanco may exercise its right to require American to
repurchase the Option pursuant to this Section 9 by giving American
written notice of its exercise of its repurchase right in accordance
with the provisions of this Section 9. Subject to the last proviso of
paragraph 9(c) below, as promptly as practicable, and in any event
within five business days after the receipt of such notice or notices
relating thereto, American shall
C - 4
deliver or cause to be delivered to Wesbanco the Repurchase Price for
the Option or the portion thereof which American is not then prohibited
under applicable law and regulation from so delivering.
c. To the extent that American is prohibited under applicable
law or regulation, or as a result of administrative or judicial action,
from repurchasing the Option in full, American shall immediately so
notify Wesbanco and thereafter deliver or cause to be delivered, from
time to time, to Wesbanco, as appropriate, the portion of the
Repurchase Price which it is no longer prohibited from delivering,
within five business days after the date on which American is no longer
so prohibited, provided, however, that to the extent that American is
at the time and after the expiration of 12 months, so prohibited from
delivering to Wesbanco, the Repurchase Price, in full (and American
hereby undertakes to use its best efforts to receive all required
regulatory and legal approvals as promptly as practicable), American
shall deliver to Wesbanco a new Option evidencing the right of Wesbanco
to purchase that number of shares of American Common Stock obtained by
multiplying the number of shares of American Common Stock for which the
Option may at such time be exercised by a fraction, the numerator of
which is the Repurchase Price less the portion thereof (if any)
theretofore delivered to the Holder and the denominator of which is the
Repurchase Price, and American shall have no further obligation to
repurchase such new Option; and provided, further, that upon receipt of
such notice and until five days thereafter Wesbanco may revoke its
notice of repurchase of the Option by written notice to American at its
principal office stating that Wesbanco elects to revoke its election to
exercise its rights to require American to repurchase the Option,
whereupon American will promptly deliver to Wesbanco the Option and
American shall have no further obligation to repurchase such Option.
10. FIRST REFUSAL. If at any time during the eighteen months
immediately following the first purchase of shares of American Common Stock
pursuant to the Option, Wesbanco shall desire to sell, assign, transfer or
otherwise dispose of all or any of the shares of American Common Stock acquired
by it pursuant to the Option other than in accordance with the put-back rights
in Section 9 hereof, it shall give American written notice of the proposed
transaction ("Offeror's Notice"), identifying the proposed transferee and
setting forth the terms of the proposed transaction. An Offeror's Notice shall
be deemed an offer by Wesbanco to American, which may be accepted within ten
business days of the receipt of such Offeror's Notice, on the same terms and
conditions and at the same price at which Wesbanco is proposing to transfer such
shares to a third party. Settlement for any shares purchased by American shall
be within 15 business days of the date of the acceptance of the offer and the
purchase price shall be paid to Wesbanco in immediately available funds;
provided that if prior notification to or approval of any federal or state
regulatory authority is required in connection with such purchase, American
shall promptly file the required notice or application for approval and shall
expeditiously process the same and the period of time that otherwise would run
pursuant to this sentence shall run instead from the date on which any required
notification period has expired or been terminated or such approval has been
obtained and any requisite waiting period shall have passed. In the event of the
failure or refusal of American to purchase all of the shares covered by the
Offeror's Notice or any applicable regulatory authority shall disapprove
American's proposed purchase of such shares, Wesbanco may sell all, but not less
than all, of such shares to such third party at no less than the price specified
and on terms no more favorable than those set forth in the Offeror's Notice. The
requirements of this Section 9 shall not apply to any disposition (i) as a
result of which the proposed transferee would own not more than five percent of
the then outstanding shares of American Common Stock, (ii) of American Common
Stock by a person to which Wesbanco has assigned its rights under the Option in
accordance with Section 11(c) hereof or (iii) pursuant to a registration under
Section 7 hereof.
11. MISCELLANEOUS.
a. EXPENSES. Except as otherwise provided herein, each of the
parties hereto shall bear and pay all costs and expenses incurred by it
or on its behalf in connection with the transactions contemplated
hereunder, including fees and expenses of its own financial
consultants, investment bankers, accountants and counsel.
C - 5
b. ENTIRE AGREEMENT. Except as otherwise expressly provided
herein, this Option Agreement contains the entire agreement between the
parties with respect to the transactions contemplated hereunder and
supersedes all prior arrangements or understandings with respect
thereto, written or oral. The terms and conditions of this Option
Agreement shall inure to the benefit of and be binding upon the parties
hereto and their respective successors and assigns. Nothing in this
Option Agreement, expressed or implied, is intended to confer upon any
party, other than the parties hereto, and their respective successors
and assigns, any rights, remedies, obligations or liabilities under or
by reason of this Option Agreement, except as expressly provided
herein.
c. ASSIGNMENT. Neither of the parties hereto may assign any of
its rights or obligations under this Option Agreement or the Option
created hereunder to any other person, without the express written
consent of the other party.
d. NOTICES. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if
delivered in the manner and to the addresses provided for in or
pursuant to Section 18 of the Merger Agreement.
e. COUNTERPARTS. This Option Agreement may be executed in any
number of counterparts, and each such counterpart shall be deemed to be
an original instrument, but all such counterparts together shall
constitute but one agreement.
f. SPECIFIC PERFORMANCE. The parties agree that damages would
be an inadequate remedy for a breach of the provisions of this Option
Agreement by either party hereto and that this Option Agreement may be
enforced by either party hereto through injunctive or other equitable
relief.
g. GOVERNING LAW. This Option Agreement shall be governed by
and construed in accordance with the laws of the State of West Virginia
applicable to agreements made and entirely to be performed within such
state and such federal laws as may be applicable.
IN WITNESS WHEREOF, each of the parties hereto has executed this Option
Agreement as of the day and year first written above.
WESBANCO, INC.
By /s/ EDWARD M. GEORGE
------------------------------------
Its President & Chief Executive Officer
AMERICAN BANCORPORATION
By /s/ JEREMY C. MCCAMIC
---------------------------------------
Its Chairman & Chief Executive Officer
C - 6
ANNEX D
, 2002
Board of Directors
American Bancorporation
Suite 800, Hawley Building
1025 Main Street
Wheeling, WV 26003
Attention: Jeremy C. McCamic
Chairman & CEO
Members of the Board:
You have requested our opinion with respect to the fairness, from a
financial point of view, as of the date hereof, to the holders of the common
stock, without par value ("American Common Stock"), of American Bancorporation
("American"), of the Exchange Ratio, as set forth in Section 6.1 (a) of the
Agreement and Plan of Merger dated as of February 22, 2001 as amended (the
"Agreement"), by and among American, AB Corporation, a corporation to be formed
as a wholly-owned subsidiary of WesBanco, Inc., WesBanco, Inc. ("WesBanco"), and
WesBanco Bank, Inc.
The Agreement provides for the merger (the "Merger") of American with
and into AB Corporation, pursuant to which, among other things, at the Effective
Time (as defined in the Agreement), each outstanding share of American Common
Stock will be exchanged for the right to receive 1.1 shares (the "Exchange
Ratio") of the common stock, par value $2.0833 per share, of WesBanco ("WesBanco
Common Stock"), as set forth in Section 6.1 (a) of the Agreement. The terms and
conditions of the Merger are more fully set forth in the Agreement.
McDonald Investments Inc., as part of its investment banking business,
is customarily engaged in the valuation of businesses and their securities in
connection with mergers and acquisitions, negotiated underwritings, secondary
distributions of listed and unlisted securities, private placements and
valuations for estate, corporate and other purposes.
Board of Directors
, 2002
Page 2
We have acted as American's financial advisor in connection with, and
have participated in certain negotiations leading to, the Agreement. In
connection with rendering our opinion set forth herein, we have among other
things:
(i) Reviewed American's Annual Reports to Shareholders and Annual Reports
on Form 10-K for each of the years ended December 31, 2000, December
31, 1999 and December 31, 1998, including the audited financial
statements contained therein, and American's Quarterly Reports on
Form 10-Q for each of the quarters ended September 30, 2001, June 30,
2001, and March 31, 2001;
(ii) Reviewed WesBanco's Annual Reports to Shareholders and Annual Reports
on Form 10-K for each of the years ended December 31, 2000, December
31, 1999 and December 31, 1998, including the audited financial
statements contained therein, and WesBanco's Quarterly Reports on
Form 10-Q for each of the quarters ended September 30, 2001, June 30,
2001, and March 31, 2001;
(iii) Reviewed certain other public and non-public information, primarily
financial in nature, relating to the respective businesses, earnings,
assets and prospects of American and WesBanco provided to us or
publicly available;
(iv) Participated in meetings and telephone conferences with members of
senior management of American and WesBanco concerning the financial
condition, business, assets, financial forecasts and prospects of the
respective companies, as well as other matters we believed to be
relevant to our inquiry;
(v) Reviewed certain stock market information for American Common Stock
and WesBanco Common Stock, and compared it with similar information
for certain companies, the securities of which are publicly traded;
(vi) Compared the results of operations and financial condition of
American and WesBanco with that of certain companies, which we deemed
to be relevant for purposes of this opinion;
(vii) Reviewed the financial terms, to the extent publicly available, of
certain acquisition transactions, which we deemed to be relevant for
purposes of this opinion;
(viii) Reviewed the Agreement dated February 22, 2001 as amended and certain
related documents;
Board of Directors
, 2002
Page 3
(ix) Reviewed the proxy statement/prospectus for the Merger; and
(x) Performed such other reviews and analyses as we have deemed
appropriate.
In our review and analysis and in arriving at our opinion, we have
assumed and relied upon the accuracy and completeness of all of the financial
and other information reviewed by us and have relied upon the accuracy and
completeness of the representations, warranties and covenants of American and
WesBanco contained in the Agreement. We have not been engaged to undertake, and
have not assumed any responsibility for, nor have we conducted, an independent
investigation or verification of such matters. We have not been engaged to and
we have not conducted a physical inspection of any of the assets, properties or
facilities of either American or WesBanco, nor have we made or obtained or been
furnished with any independent valuation or appraisal of any of such assets,
properties or facilities or any of the liabilities of either American or
WesBanco. With respect to financial forecasts used in our analysis, we have
assumed that such forecasts have been reasonably prepared by management of
American and WesBanco, as the case may be, on a basis reflecting the best
currently available estimates and judgments of the management of American and
WesBanco, as to the future performance of American, WesBanco, and American and
WesBanco combined, as the case may be. We have not been engaged to and we have
not assumed any responsibility for, nor have we conducted any independent
investigation or verification of such matters, and we express no view as to such
financial forecasts or the assumptions on which they are based. We have also
assumed that all of the conditions to the consummation of the Merger, as set
forth in the Agreement, including the tax-free treatment of the Merger to the
holders of American Common Stock, would be satisfied and that the Merger would
be consummated on a timely basis in the manner contemplated by the Agreement.
We will receive a fee for our services as financial advisor to
American, a substantial portion of which is contingent upon closing of the
Merger. We will also receive a fee for our services in rendering this opinion.
In the ordinary course of business, we may actively trade securities of
American and WesBanco for our own account and for the accounts of customers and
accordingly, we may at any time hold a long or short position in such
securities.
This opinion is based on economic and market conditions and other
circumstances existing on, and information made available as of, the date
hereof. In addition, our opinion is, in any event, limited to the fairness, as
of the date hereof, from a financial point of view, of the Exchange Ratio, to
the holders of American Common Stock, and does not address the underlying
business decision by American's Board of Directors to effect the Merger, does
not compare or discuss the relative merits of any competing proposal or any
other terms of the Merger, and does not constitute a recommendation to
Board of Directors
, 2002
Page 4
any American shareholder as to how such shareholder should vote with respect to
the Merger. This opinion does not represent an opinion as to what the value of
American Common Stock or WesBanco Common Stock may be at the Effective Time of
the Merger or as to the prospects of American's business or WesBanco's business.
This opinion is directed to the Board of Directors of American and may
not be reproduced, summarized, described or referred to or given to any other
person without our prior written consent. Notwithstanding the foregoing, this
opinion may be included in the proxy statement to be mailed to the holders of
American Common Stock in connection with the Merger, provided that this opinion
will be reproduced in such proxy statement in full, and any description of or
reference to us or our actions, or any summary of the opinion in such proxy
statement, will be in a form reasonably acceptable to us and our counsel.
Based upon and subject to the foregoing, it is our opinion that, as of
the date hereof, the Exchange Ratio is fair to the holders of American Common
Stock from a financial point of view.
Very truly yours,
McDONALD INVESTMENTS INC.
ANNEX E
Section 1701.84 PERSONS ENTITLED TO RELIEF AS DISSENTING SHAREHOLDERS.
The following are entitled to relief as dissenting shareholders under section
1701.85 of the Revised Code:
(A) Shareholders of a domestic corporation that is being merged or
consolidated into a surviving or new entity, domestic or foreign, pursuant to
section 1701.78, 1701.781, 1701.79, 1701.791, or 1701.801 of the Revised Code;
(B) In the case of a merger into a domestic corporation, shareholders
of the surviving corporation who under section 1701.78 or 1701.781 of the
Revised Code are entitled to vote on the adoption of an agreement of merger, but
only as to the shares so entitling them to vote;
(C) Shareholders, other than the parent corporation, of a domestic
subsidiary corporation that is being merged into the domestic or foreign parent
corporation pursuant to section 1701.80 of the Revised Code;
(D) In the case of a combination or a majority share acquisition,
shareholders of the acquiring corporation who under section 1701.83 of the
Revised Code are entitled to vote on such transaction, but only as to the shares
so entitling them to vote;
(E) Shareholders of a domestic subsidiary corporation into which one or
more domestic or foreign corporations are being merged pursuant to section
1701.801 of the Revised Code.
Effective date: 10-4-1996
Section 1701.85 DISSENTING SHAREHOLDER'S DEMAND FOR FAIR CASH VALUE OF SHARES.
(A)(1) A shareholder of a domestic corporation is entitled to relief as
a dissenting shareholder in respect of the proposals described in sections
1701.74, 1701.76, and 1701.84 of the Revised Code, only in compliance with this
section.
(2) If the proposal must be submitted to the shareholders of the
corporation involved, the dissenting shareholder shall be a record holder of the
shares of the corporation as to which he seeks relief as of the date fixed for
the determination of shareholders entitled to notice of a meeting of the
shareholders at which the proposal is to be submitted, and such shares shall not
have been voted in favor of the proposal. Not later than ten days after the date
on which the vote on the proposal was taken at the meeting of the shareholders,
the dissenting shareholder shall deliver to the corporation a written demand for
payment to him of the fair cash value of the shares as to which he seeks relief,
which demand shall state his address, the number and class of such shares, and
the amount claimed by him as the fair cash value of the shares.
(3) The dissenting shareholder entitled to relief under division (C) of
section 1701.84 of the Revised Code in the case of a merger pursuant to section
1701.80 of the Revised Code and a dissenting shareholder entitled to relief
under division (E) of section 1701.84 of the Revised Code in the case of a
merger pursuant to section 1701.801 of the Revised Code shall be a record holder
of the shares of the corporation as to which he seeks relief as of the date on
which the agreement of merger was adopted by the directors of that corporation.
Within twenty days after he has been sent the notice provided in section 1701.80
or 1701.801 of the Revised Code, the dissenting shareholder shall deliver to the
corporation a written demand for payment with the same information as that
provided for in division (A)(2) of this section.
(4) In the case of a merger or consolidation, a demand served on the
constituent corporation involved constitutes service on the surviving or the new
entity, whether the demand is served before, on, or after the effective date of
the merger or consolidation.
(5) If the corporation sends to the dissenting shareholder, at the
address specified in his demand, a request for
E - 1
the certificates representing the shares as to which he seeks relief, the
dissenting shareholder, within fifteen days from the date of the sending of such
request, shall deliver to the corporation the certificates requested so that the
corporation may forthwith endorse on them a legend to the effect that demand for
the fair cash value of such shares has been made. The corporation promptly shall
return such endorsed certificates to the dissenting shareholder. A dissenting
shareholder's failure to deliver such certificates terminates his rights as a
dissenting shareholder, at the option of the corporation, exercised by written
notice sent to the dissenting shareholder within twenty days after the lapse of
the fifteen-day period, unless a court for good cause shown otherwise directs.
If shares represented by a certificate on which such a legend has been endorsed
are transferred, each new certificate issued for them shall bear a similar
legend, together with the name of the original dissenting holder of such shares.
Upon receiving a demand for payment from a dissenting shareholder who is the
record holder of uncertificated securities, the corporation shall make an
appropriate notation of the demand for payment in its shareholder records. If
uncertificated shares for which payment has been demanded are to be transferred,
any new certificate issued for the shares shall bear the legend required for
certificated securities as provided in this paragraph. A transferee of the
shares so endorsed, or of uncertificated securities where such notation has been
made, acquires only such rights in the corporation as the original dissenting
holder of such shares had immediately after the service of a demand for payment
of the fair cash value of the shares. A request under this paragraph by the
corporation is not an admission by the corporation that the shareholder is
entitled to relief under this section.
(B) Unless the corporation and the dissenting shareholder have come to
an agreement on the fair cash value per share of the shares as to which the
dissenting shareholder seeks relief, the dissenting shareholder or the
corporation, which in case of a merger or consolidation may be the surviving or
new entity, within three months after the service of the demand by the
dissenting shareholder, may file a complaint in the court of common pleas of the
county in which the principal office of the corporation that issued the shares
is located or was located when the proposal was adopted by the shareholders of
the corporation, or, if the proposal was not required to be submitted to the
shareholders, was approved by the directors. Other dissenting shareholders,
within that three-month period, may join as plaintiffs or may be joined as
defendants in any such proceeding, and any two or more such proceedings may be
consolidated. The complaint shall contain a brief statement of the facts,
including the vote and the facts entitling the dissenting shareholder to the
relief demanded. No answer to such a complaint is required. Upon the filing of
such a complaint, the court, on motion of the petitioner, shall enter an order
fixing a date for a hearing on the complaint and requiring that a copy of the
complaint and a notice of the filing and of the date for hearing be given to the
respondent or defendant in the manner in which summons is required to be served
or substituted service is required to be made in other cases. On the day fixed
for the hearing on the complaint or any adjournment of it, the court shall
determine from the complaint and from such evidence as is submitted by either
party whether the dissenting shareholder is entitled to be paid the fair cash
value of any shares and, if so, the number and class of such shares. If the
court finds that the dissenting shareholder is so entitled, the court may
appoint one or more persons as appraisers to receive evidence and to recommend a
decision on the amount of the fair cash value. The appraisers have such power
and authority as is specified in the order of their appointment. The court
thereupon shall make a finding as to the fair cash value of a share and shall
render judgment against the corporation for the payment of it, with interest at
such rate and from such date as the court considers equitable. The costs of the
proceeding, including reasonable compensation to the appraisers to be fixed by
the court, shall be assessed or apportioned as the court considers equitable.
The proceeding is a special proceeding and final orders in it may be vacated,
modified, or reversed on appeal pursuant to the Rules of Appellate Procedure
and, to the extent not in conflict with those rules, Chapter 2505. of the
Revised Code. If, during the pendency of any proceeding instituted under this
section, a suit or proceeding is or has been instituted to enjoin or otherwise
to prevent the carrying out of the action as to which the shareholder has
dissented, the proceeding instituted under this section shall be stayed until
the final determination of the other suit or proceeding. Unless any provision in
division (D) of this section is applicable, the fair cash value of the shares
that is agreed upon by the parties or fixed under this section shall be paid
within thirty days after the date of final determination of such value under
this division, the effective date of the amendment to the articles, or the
consummation of the other action involved, whichever occurs last. Upon the
occurrence of the last such event, payment shall be made immediately to a holder
of uncertificated securities entitled to such payment. In the case of holders of
shares represented by certificates, payment shall be made only upon and
simultaneously with the surrender to the corporation of the certificates
representing the shares for which the payment is made.
(C) If the proposal was required to be submitted to the shareholders of
the corporation, fair cash value as to those shareholders shall be determined as
of the day prior to the day on which the vote by the shareholders was taken and,
in the case of a merger pursuant to section 1701.80 or 1701.801 of the Revised
Code, fair cash value as to
E - 2
shareholders of a constituent subsidiary corporation shall be determined as of
the day before the adoption of the agreement of merger by the directors of the
particular subsidiary corporation. The fair cash value of a share for the
purposes of this section is the amount that a willing seller who is under no
compulsion to sell would be willing to accept and that a willing buyer who is
under no compulsion to purchase would be willing to pay, but in no event shall
the fair cash value of a share exceed the amount specified in the demand of the
particular shareholder. In computing such fair cash value, any appreciation or
depreciation in market value resulting from the proposal submitted to the
directors or to the shareholders shall be excluded.
(D)(1) The right and obligation of a dissenting shareholder to receive
such fair cash value and to sell such shares as to which he seeks relief, and
the right and obligation of the corporation to purchase such shares and to pay
the fair cash value of them terminates if any of the following applies:
(a) The dissenting shareholder has not complied with this section,
unless the corporation by its directors waives such failure;
(b) The corporation abandons the action involved or is finally
enjoined or prevented from carrying it out, or the shareholders rescind their
adoption of the action involved;
(c) The dissenting shareholder withdraws his demand, with the
consent of the corporation by its directors;
(d) The corporation and the dissenting shareholder have not come to
an agreement as to the fair cash value per share, and neither the shareholder
nor the corporation has filed or joined in a complaint under division (B) of
this section within the period provided in that division.
(2) For purposes of division (D)(1) of this section, if the merger
or consolidation has become effective and the surviving or new entity is not a
corporation, action required to be taken by the directors of the corporation
shall be taken by the general partners of a surviving or new partnership or the
comparable representatives of any other surviving or new entity.
(E) From the time of the dissenting shareholder's giving of the demand
until either the termination of the rights and obligations arising from it or
the purchase of the shares by the corporation, all other rights accruing from
such shares, including voting and dividend or distribution rights, are
suspended. If during the suspension, any dividend or distribution is paid in
money upon shares of such class or any dividend, distribution, or interest is
paid in money upon any securities issued in extinguishment of or in substitution
for such shares, an amount equal to the dividend, distribution, or interest
which, except for the suspension, would have been payable upon such shares or
securities, shall be paid to the holder of record as a credit upon the fair cash
value of the shares. If the right to receive fair cash value is terminated other
than by the purchase of the shares by the corporation, all rights of the holder
shall be restored and all distributions which, except for the suspension, would
have been made shall be made to the holder of record of the shares at the time
of termination.
Effective date: 7-1-1994
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Wesbanco's Bylaws provide, and West Virginia law permits (W. Va. Code ss.
31-1-9), the indemnification of directors and officers against certain
liabilities. Officers and directors of Wesbanco and its subsidiaries are
indemnified generally against expenses reasonably incurred in connection with
proceedings in which they are made parties by reason of their being or having
been directors or offices of the corporation, except in relation to matters as
to which a recovery may be obtained by reason of an officer or director having
been finally adjudged derelict in such action or proceeding in the performance
of his duties.
A. Excerpts from Article VI of the Bylaws of Wesbanco:
Indemnification of Directors and Officers
Each director and officer, whether or not then in office, shall be
indemnified by the corporation against all costs and expenses reasonably
incurred by and imposed upon him in connection with or resulting from any
action, suit or proceeding, to which he may be made a party by reason of his
being or having been a director or officer of the corporation, or of any other
company which he served at the request of the corporation, except in relation to
matters as to which a recovery shall be had against him by reason of his having
been finally adjudged derelict in such action, suit or proceeding, in the
performance of his duties as such director or officer, and the foregoing right
of indemnification shall not be exclusive of other rights to which he may be
entitled as a matter of law.
B. West Virginia Corporation Law, W. Va. Codess.31-1-9:
Section 31-1-9. Indemnification of officers, directors, employees and agents.
(a) A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the corporation) by
reason of the fact that he is or was a director, officer, employee or agent of
the corporation, or is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, against expenses (including attorneys'
fees), judgments, fines, taxes and penalties and interest thereon, and amounts
paid in settlement actually and reasonably incurred by him in connection with
such action or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action or proceeding by judgment, order, settlement, conviction, or upon a plea
of nolo contendere or its equivalent, shall not, of itself, create a presumption
that the person did not act in good faith and in a manner which he reasonably
believed to be in or not opposed to the best interest of the corporation, and,
with respect to any criminal action or proceeding, that such person did have
reasonable cause to believe that his conduct was unlawful.
(b) A corporation shall have power to indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or proceeding by or in the right of the corporation to procure
judgment in its favor by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving at the
request of the corporation as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against
expenses (including attorneys' fees) actually and reasonably incurred by him in
connection with the defense or settlement of such action or proceeding if he
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the corporation, except that no indemnification
shall be made in respect of any claim, issue or matter, including, but not
limited to, taxes or any interest or penalties thereon, as to which such person
shall have been adjudged to be liable for negligence or misconduct in the
performance of his duty to the corporation unless and only to the extent that
the court in which such action or proceeding was brought shall determine upon
application that, despite the adjudication
II-1
of liability but in view of all circumstances of the case, such person is fairly
and reasonably entitled to indemnity for such expenses which such court shall
deem proper.
(c) To the extent that a director, officer, employee or agent of a
corporation has been successful on the merits or otherwise in defense of any
action or proceeding referred to in subsection (a) or (b), or in defense of any
claim, issue or matter therein, he shall be indemnified against expenses
(including attorneys' fees) actually and reasonably incurred by him in
connection therewith.
(d) Any indemnification under subsection (a) or (b) (unless ordered by a
court) shall be made by the corporation only as authorized in the specific case
upon a determination that indemnification of the director, officer, employee or
agent is proper in the circumstances because he has met the applicable standard
of conduct set forth in subsection (a) or (b). Such determination shall be made
(1) by the board of directors by a majority vote of a quorum consisting of
directors who were not parties to such action or proceeding, or (2) if such a
quorum is not obtainable, or even if obtainable a quorum of disinterested
directors so directs, by independent legal counsel in a written opinion, or (3)
by the shareholders or members.
(e) Expenses (including attorney's fees) incurred in defending a civil or
criminal action or proceeding may be paid by the corporation in advance of the
final disposition of such action or proceeding as authorized in the manner
provided in Subsection (d) upon receipt of an undertaking by or on behalf of the
director, officer, employee or agent to repay such amount unless it shall
ultimately be determined that he is entitled to be indemnified by the
corporation as authorized in this section.
(f) The indemnification provided by this section shall not be deemed
exclusive of any other rights to which any shareholder or member may be entitled
under any bylaw, agreement, vote of shareholders, members or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors, and administrators of such a
person.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity or arising out of
his status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this section.
(1961,c.15; 1974,c.13; 1975,c.118.)
Wesbanco does provide indemnity insurance to its officers and directors.
Such insurance will not, however, indemnify officers or directors for willful
misconduct or gross negligence in the performance of a duty to Wesbanco.
Item 21. Exhibits and Financial Statement Schedules.
(a) The following exhibits are filed herewith or incorporated herein by
reference as part of this Registration Statement:
EXHIBIT TITLE
2.1 Agreement and Plan of Merger dated as of February 22, 2001
among Wesbanco, Inc., American Bancorporation, AB Corporation
and Wesbanco Bank, Inc. (incorporated by reference to Annex A
of the Proxy Statement/Prospectus included in this
Registration Statement).
2.2 First Amendment to Agreement and Plan of Merger dated as of
November 5, 2001 among Wesbanco, Inc., American
Bancorporation, AB Corporation and Wesbanco Bank, Inc.
(incorporated by reference to Annex B of the Proxy
Statement/Prospectus included in this Registration Statement).
5.1 Opinion of Phillips, Gardill, Kaiser & Altmeyer as to the
legality of the shares of
II-2
common stock registered hereby (filed herewith).
8.1 Form of Opinion of Kirkpatrick & Lockhart LLP as to certain
tax matters (filed herewith).
10.1 Amended Severance Plan Clarification Agreement dated November
30, 2001 by and among American Bancorporation, Jeremy C.
McCamic and Wesbanco, Inc. (filed herewith).
10.2 Amended Consulting Agreement dated November 30, 2001 by and
between Wesbanco, Inc. and Jeremy C. McCamic (filed herewith).
10.3 Amended Severance Plan Clarification Agreement dated November
30, 2001 by and among American Bancorporation, Paul W. Donahie
and Wesbanco, Inc. (filed herewith).
10.4 Consulting Agreement dated February 22, 2001 by and between
Wesbanco, Inc. and Paul W. Donahie (filed herewith).
10.5 Amended Severance Plan Clarification Agreement dated November
30, 2001 by and among American Bancorporation, John E. Wait
and Wesbanco, Inc. (filed herewith).
10.6 Amended Agreement dated November 30, 2001 by and among
Wesbanco Bank, Inc., Wesbanco, Inc. and John E. Wait (filed
herewith).
10.7 Amended Severance Plan Clarification Agreement dated November
30, 2001 by and among American Bancorporation, Brent E.
Richmond and Wesbanco, Inc. (filed herewith).
10.8 Agreement dated November 30, 2001 by and among Wesbanco Bank,
Inc., Wesbanco, Inc. and Brent E. Richmond (filed herewith).
10.9 Amended Amendment to Employment Agreement dated November 30,
2001 by and among Wheeling National Bank, Patrick O'Brien and
Wesbanco, Inc. (filed herewith).
10.10 Amended Engagement Letter Amendment Agreement dated November
30, 2001 by and among McCamic & McCamic, American
Bancorporation and Wesbanco, Inc. (filed herewith).
10.11 Stock Option Agreement dated as of February 22, 2001 by and
between Wesbanco, Inc. and American Bancorporation
(incorporated by reference to Annex C of the Proxy
Statement/Prospectus included in this Registration Statement).
23.1 Consent of Ernst & Young LLP (filed herewith).
23.2 Consent of KPMG LLP (filed herewith).
23.3 Consent of Phillips, Gardill, Kaiser & Altmeyer (filed
herewith).
23.4 Consent of Kirkpatrick & Lockhart LLP (included in the opinion
filed as Exhibit 8.1).
23.5 Consent of McDonald Investments Inc. (filed herewith).
24.1 Power of Attorney (included on signature page hereto).
II-3
99.1 Form of Proxy for Special Meeting of American Bancorporation
Shareholders (filed herewith).
Item 22. Undertakings.
The undersigned registrant hereby undertakes as follows:
(a) The undersigned registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this registration statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(b) The registrant undertakes that every prospectus (i) that is filed
pursuant to paragraph (a) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Securities Act of 1933, as amended,
and is used in connection with an offering of securities subject to Rule 415,
will be filed as a part of an amendment to the registration statement and will
not be used until such amendment is effective, and that, for purposes of
determining any liability under the Securities Act of 1933, as amended, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Securities
Act of 1933, as amended, may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act of 1933, as amended, and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other than
the payment by the registrant of expenses incurred or paid by a director,
officer or controlling person of the registrant in the successful defense of any
action, suit or proceeding) is asserted by such director, officer or controlling
person in connection with the securities being registered, the registrant will,
unless in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933, as amended, and will be governed by the final
adjudication of such issue.
(d) The undersigned registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through the
date of responding to the request.
(e) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
(f) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
II-4
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this registration statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Wheeling,
West Virginia, on December 3, 2001.
WESBANCO, INC.
By: /s/ PAUL M. LIMBERT
-------------------------------------
Paul M. Limbert
Its President and Chief Executive Officer
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Paul M. Limbert and/or James C. Gardill,
and each of them singly, his or her true and lawful attorney-in-fact and agents,
with full power of substitution and resubstitution, for him and in his name,
place and stead, in any and all capacities, to sign any and all amendments to
this Registration Statement, and to file the same, with all exhibits thereto,
and other documentation in connection therewith, with the Securities and
Exchange Commission, granting unto said attorney-in-fact and agent with full
power and authority to do and perform each and every act and thing requisite and
necessary to be done in or about the premises, as fully to all intents and
purposes as he might or could do in person, hereby ratifying and confirming all
that said attorney-in-fact and agent, or his substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
SIGNATURE TITLE DATE
Director
- ---------------------------------
James E. Altmeyer
/s/ Ray A. Byrd Director December 3, 2001
- ---------------------------------
Ray A. Byrd
/s/ R. Peterson Chalfant Director December 3, 2001
- ---------------------------------
R. Peterson Chalfant
/s/ John H. Cheffy Director December 3, 2001
- ---------------------------------
John H. Cheffy
/s/ Christopher V. Criss Director December 3, 2001
- ---------------------------------
Christopher V. Criss
Director
- ---------------------------------
James D. Entress
Director
- ---------------------------------
Ernest S. Fragale
II-5
/s/ James C. Gardill Chairman, Director December 3, 2001
- ---------------------------------
James C. Gardill
/s/ Edward M. George Director December 3, 2001
- ---------------------------------
Edward M. George
/s/ Roland L. Hobbs Director December 3, 2001
- ---------------------------------
Roland L. Hobbs
Director
- ---------------------------------
John W. Kepner
/s/ Frank R. Kerekes Director December 3, 2001
- ---------------------------------
Frank R. Kerekes
/s/ Paul M. Limbert President, Chief December 3, 2001
- --------------------------------- Executive Officer &
Paul M. Limbert Director (Principal
Executive Officer)
Director
- ---------------------------------
William E. Mildren, Jr.
/s/ Joan C. Stamp Director December 3, 2001
- ---------------------------------
Joan C. Stamp
/s/ Carter W. Strauss Director December 3, 2001
- ---------------------------------
Carter W. Strauss
/s/ James W. Swearingen Director December 3, 2001
- ---------------------------------
James W. Swearingen
/s/ Reed J. Tanner Director December 3, 2001
- ---------------------------------
Reed J. Tanner
/s/ Robert K. Tebay Director December 3, 2001
- ---------------------------------
Robert K. Tebay
/s/ William E. Witschey Director December 3, 2001
- ---------------------------------
William E. Witschey
/s/ Robert H. Young Executive Vice President December 3, 2001
- --------------------------------- & Chief Financial Officer
Robert H. Young (Principal Financial and
Accounting Officer)
EXHIBIT INDEX
EXHIBIT TITLE
2.1 Agreement and Plan of Merger dated as of February 22, 2001
among Wesbanco, Inc., American Bancorporation, AB Corporation
and Wesbanco Bank, Inc. (incorporated by reference to Annex A
of the Proxy Statement/Prospectus included in this
Registration Statement).
2.2 First Amendment to Agreement and Plan of Merger dated as of
November 5, 2001 among Wesbanco, Inc., American
Bancorporation, AB Corporation and Wesbanco Bank, Inc.
(incorporated by reference to Annex B of the Proxy
Statement/Prospectus included in this Registration Statement).
5.1 Opinion of Phillips, Gardill, Kaiser & Altmeyer as to the
legality of the shares of common stock registered hereby
(filed herewith).
8.1 Form of Opinion of Kirkpatrick & Lockhart LLP as to certain
tax matters (filed herewith).
10.1 Amended Severance Plan Clarification Agreement dated November
30, 2001 by and among American Bancorporation, Jeremy C.
McCamic and Wesbanco, Inc. (filed herewith).
10.2 Amended Consulting Agreement dated November 30, 2001 by and
between Wesbanco, Inc. and Jeremy C. McCamic (filed herewith).
10.3 Amended Severance Plan Clarification Agreement dated November
30, 2001 by and among American Bancorporation, Paul W. Donahie
and Wesbanco, Inc. (filed herewith).
10.4 Consulting Agreement dated February 22, 2001 by and between
Wesbanco, Inc. and Paul W. Donahie (filed herewith).
10.5 Amended Severance Plan Clarification Agreement dated November
30, 2001 by and among American Bancorporation, John E. Wait
and Wesbanco, Inc. (filed herewith).
10.6 Amended Employment Agreement dated November 30, 2001 by and
among Wesbanco Bank, Inc., Wesbanco, Inc. and John E. Wait
(filed herewith).
10.7 Amended Severance Plan Clarification Agreement dated November
30, 2001 by and among American Bancorporation, Brent E.
Richmond and Wesbanco, Inc. (filed herewith).
10.8 Agreement dated November 30, 2001 by and among Wesbanco Bank,
Inc., Wesbanco, Inc. and Brent E. Richmond (filed herewith).
10.9 Amended Amendment to Employment Agreement dated November 30,
2001 by and among Wheeling National Bank, Patrick O'Brien and
Wesbanco, Inc. (filed herewith).
10.10 Amended Engagement Letter Amendment Agreement dated November
30, 2001 by and among McCamic & McCamic, American
Bancorporation and Wesbanco, Inc. (filed herewith).
10.11 Stock Option Agreement dated as of February 22, 2001 by and
between Wesbanco, Inc. and American Bancorporation
(incorporated by reference to Annex C of the Proxy
Statement/Prospectus included in this Registration Statement).
23.1 Consent of Ernst & Young LLP (filed herewith).
23.2 Consent of KPMG LLP (filed herewith).
23.3 Consent of Phillips, Gardill, Kaiser & Altmeyer (filed
herewith).
23.4 Consent of Kirkpatrick & Lockhart LLP (included in the opinion
filed as Exhibit 8.1).
23.5 Consent of McDonald Investments Inc. (filed herewith).
24.1 Power of Attorney (included on signature page hereto).
99.1 Form of Proxy for Special Meeting of American Bancorporation
Shareholders (filed herewith).