<PAGE> 1
April 29, 1997
Dear Shareholder of Shawnee Bank, Inc.:
You are cordially invited to attend a Special Meeting of the
shareholders of Shawnee Bank, Inc. ("Shawnee") to consider the
merger of Shawnee Bank, Inc. with Wesbanco Bank South Hills. The
Special Meeting will be held in the lobby of Shawnee Bank, 1011
Myers Avenue, Dunbar, West Virginia, on Tuesday, June 3, 1997, at
4:00 p.m., local time.
As explained in the attached Notice of Special Meeting of
Shareholders and Proxy Statement/Prospectus, the purpose of this
Special Meeting is to consider and vote upon an Agreement and
Plan of Merger by and between Wesbanco, Inc. ("Wesbanco"),
Shawnee Bank, Inc., and Wesbanco Bank South Hills ("Wesbanco
South Hills"), dated as of December 19, 1996, (the "Agreement"),
providing for (i) the merger of Shawnee with and into Wesbanco
South Hills, and (ii) the exchange of each share of Shawnee
Common Stock, par value $10.00 per share, for 10.094 shares of
Wesbanco Common Stock, par value $2.0833 per share, all in
accordance with the terms and conditions described in the
aforesaid Agreement and summarized in the Proxy
Statement/Prospectus.
The Board of Directors of Shawnee has carefully reviewed the
terms of the Agreement and the proposed merger. The Board of
Directors of Shawnee has unanimously approved the proposed merger
and recommends a vote for approval of the proposed merger.
You are urged to carefully review the attached Proxy
Statement/Prospectus, which describes the proposed transaction
more fully. A complete copy of the Agreement is contained in the
Proxy Statement/Prospectus.
It is important that your shares be represented at the
Special Meeting, whether or not you are personally able to attend
the meeting. The transaction, as proposed, requires the
affirmative vote of the holders of at least a majority of the
outstanding shares of Shawnee Common Stock. In order to insure
that your vote is represented, please complete and sign the
enclosed form of Proxy and return it promptly in the enclosed
envelope. If you attend the Special Meeting, you may revoke your
Proxy at the Special Meeting by voting in person.
Sincerely yours,
/s/ Brenda H. Robertson
Brenda H. Robertson
President and Chief Executive Officer
Enclosure
<PAGE> 2
SHAWNEE BANK, INC.
1011 MYERS AVENUE
DUNBAR, WEST VIRGINIA 25064
(304) 768-9761
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE 3, 1997
TO THE SHAREHOLDERS OF SHAWNEE BANK, INC.:
Notice is hereby given that a special meeting (the "Special
Meeting") of the shareholders of Shawnee Bank, Inc. ("Shawnee")
will be held on Tuesday, June 3, 1997, at 4:00 P.M., in the
principal office of Shawnee, 1011 Myers Avenue, Dunbar, West
Virginia, 25064, for the purpose of considering and voting on the
following matters:
1. Approval of the Agreement and Plan of Merger by and
between Wesbanco, Inc., ("Wesbanco"), Shawnee and Wesbanco Bank
South Hills ("Wesbanco South Hills"), a wholly owned subsidiary
of Wesbanco, dated as of December 19, 1996 (the "Agreement and
Plan of Merger"), in the form attached to the accompanying Proxy
Statement/Prospectus as Appendix II, providing for (i) the merger
of Shawnee with and into Wesbanco South Hills, and (ii) the
exchange of each share of common stock, par value $10.00 per
share, of Shawnee for 10.094 shares of common stock of Wesbanco,
par value $2.0833 per share, all on the terms described in the
Agreement and Plan of Merger and summarized in the Proxy
Statement/Prospectus; and
2. Such other business as may properly come before the
Special Meeting or any adjournment or postponement thereof.
Only shareholders of record at the close of business on
April 18, 1997, will be entitled to notice of and to vote at the
Special Meeting and any adjournment or postponement thereof.
The vote of each shareholder, regardless of the number of
shares held, is important. The failure of a holder of common
stock to vote will constitute a vote against the proposed Merger.
Accordingly, if you cannot attend the Special Meeting in person,
please mark, sign and date the accompanying Proxy and return it
promptly in the enclosed envelope, which requires no postage if
mailed in the United States. It is important that proxies be
mailed promptly. If the enclosed Proxy is executed and returned,
it may be revoked at any time prior to the voting of the Proxy by
written notice to the Secretary of Shawnee, by a duly executed,
later-dated Proxy or orally by the shareholder at the Special
Meeting.
Dated: April 29, 1997
By Order of the Board of Directors
/s/ Joan B. Belcher
----------------------------------
Secretary
IMPORTANT
---------
Whether you expect to attend the meeting or not, please mark,
sign, date, and return the enclosed Proxy in the enclosed self-
addressed envelope as promptly as possible.
<PAGE> 3
PROXY STATEMENT/PROSPECTUS
SHAWNEE BANK, INC.
1011 MYERS AVENUE
DUNBAR, WV 25064
Special Meeting of the Shareholders to be held June 3, 1997.
This Proxy Statement, which is also a Prospectus of
Wesbanco, Inc. ("Wesbanco") (the "Proxy Statement/Prospectus")
is being furnished to holders of common stock of Shawnee Bank,
Inc., a West Virginia banking corporation ("Shawnee"), in
connection with the solicitation of proxies by the Board of
Directors of Shawnee for use at the Special Meeting of
Shareholders to be held on June 3, 1997, and any adjournments
or postponements thereof, to consider and take action upon the
proposed merger of Shawnee with Wesbanco Bank South Hills
("Wesbanco South Hills"), a wholly-owned subsidiary of Wesbanco
(the "Merger"), as described in this Proxy Statement/Prospectus.
As used in this Proxy Statement/Prospectus, the terms "Shawnee" and
"Wesbanco" refer to such corporations, respectively, and where the
context requires, such entities and the subsidiaries of Wesbanco.
All information contained in this Proxy
Statement/Prospectus with respect to Shawnee has been
supplied by Shawnee, and all information with respect to
Wesbanco and Wesbanco South Hills has been supplied by
Wesbanco. This Proxy Statement/Prospectus, the attached
Notice and the enclosed Letter to Shareholders and Proxy are
first being mailed to shareholders of Shawnee on or about
April 29, 1997.
Wesbanco has filed a Registration Statement pursuant to
the Securities Act of 1933, as amended, (the "1933 Act")
covering a maximum of 323,506 shares of common stock (par
value $2.0833) of Wesbanco which may be issued in connection
with the Merger (the "Registration Statement").
No person is authorized to give any information or to
make any representations not contained in this Proxy
Statement/Prospectus, and, if given or made, such
information or representation should not be relied upon as
having been authorized. This Proxy Statement/Prospectus
does not constitute an offer to sell, or a solicitation of
an offer to purchase, the securities offered by this Proxy
Statement/Prospectus, or the solicitation of a Proxy, in any
jurisdiction to any person to whom it is unlawful to make
such offer or solicitation of any offer or proxy
solicitation in such jurisdiction. Neither the delivery of
this Proxy Statement/Prospectus nor any distribution of the
securities to which this Proxy Statement/Prospectus relates
shall, under any circumstances, create any implication that
there has been no change in the affairs of Shawnee or
Wesbanco since the date of this Proxy Statement/Prospectus.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE
SECURITIES COMMISSION NOR HAS THE COMMISSION OR ANY STATE
SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROXY STATEMENT/PROSPECTUS. ANY REPRESENTATION TO
THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Proxy Statement/Prospectus is April 29, 1997.
<PAGE> 4
AVAILABLE INFORMATION
Wesbanco is subject to the informational requirements
of the Securities Exchange Act of 1934 and in accordance
therewith files reports, proxy statements and other
information with the Securities and Exchange Commission (the
"Commission"). Information, as of particular dates,
concerning directors and officers of Wesbanco, their
compensation, the principal holders of securities and any
material interest of such persons in transactions with their
respective companies is disclosed in proxy statements
distributed to shareholders and filed with the Commission.
Such reports, proxy statements and other information can be
inspected and copied at the public reference facilities of
the Commission at Judiciary Plaza, 450 Fifth Street, N.W.,
Washington, D.C., 20549; and at the Commission's Regional
offices at 7 World Trade Center, New York, New York, 10048,
and Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois, 60661. Copies of such
material can be obtained from the Public Reference Section
of the Commission at 450 Fifth Street, N.W., Washington,
D.C., 20549 at prescribed rates, or via Internet Access at
http:\\www.sec.gov.
Wesbanco's common stock is listed on the National
Market System of the Nasdaq Stock Market and accordingly
periodic reports, proxy and information statements
concerning Wesbanco may be inspected at the offices of the
Nasdaq Stock Market, National Market System, 1735 K Street,
N.W., Washington, D.C. 20006
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY
REFERENCE FILED BY WESBANCO WHICH ARE NOT PRESENTED HEREIN
OR DELIVERED HEREWITH. THESE DOCUMENTS ARE AVAILABLE UPON
REQUEST WITHOUT CHARGE TO ANY PERSON, INCLUDING ANY
BENEFICIAL OWNER, TO WHOM THIS PROXY STATEMENT/PROSPECTUS IS
DELIVERED, UPON WRITTEN OR ORAL REQUEST TO SHIRLEY A. BUCAN,
SECRETARY, WESBANCO, INC., ONE BANK PLAZA, WHEELING, WEST
VIRGINIA, 26003, (TELEPHONE (304) 234-9228). IN ORDER TO
INSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD
BE MADE BY MAY 28, 1997.
<PAGE> 5
PROXY STATEMENT/PROSPECTUS
--------------------------
TABLE OF CONTENTS
PAGE
----
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . 4
SUMMARY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 8
MARKET PRICES AND SELECTED FINANCIAL INFORMATION . . . . . . . . . 15
Market Prices. . . . . . . . . . . . . . . . . . . . . . . . 15
Selected Financial Information . . . . . . . . . . . . . . . 15
SELECTED FINANCIAL INFORMATION FOR WESBANCO . . . . . . . . . . 16
SELECTED FINANCIAL INFORMATION FOR SHAWNEE . . . . . . . . . . . 17
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . 18
VOTING INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . 18
Date, Time and Place of the Special Meeting. . . . . . . . . 18
Voting and Revocation of Proxies . . . . . . . . . . . . . . 18
Solicitation of Proxies . . . . . . . . . . . . . . . . . . 19
Accountants . . . . . . . . . . . . . . . . . . . . . . . . 20
Date for Submission of Shareholder Proposals . . . . . . . 20
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . 20
General . . . . . . . . . . . . . . . . . . . . . . . . . 20
Background of the Merger . . . . . . . . . . . . . . . . . 21
Recommendation of the Boards of Directors . . . . . . . . . 21
Shawnee Reasons for the Merger . . . . . . . . . . . . . . 22
Wesbanco Reasons for the Merger . . . . . . . . . . . . . . 23
Interest of Certain Persons in the Merger . . . . . . . . . 23
Opinion of LSC Financial Services, Inc. . . . . . . . . . . 25
Effective Time. . . . . . . . . . . . . . . . . . . . . . . 29
Conversion of Shawnee Common Stock. . . . . . . . . . . . . 30
Exchange of Certificates. . . . . . . . . . . . . . . . . . 30
Wesbanco, Wesbanco South Hills and Shawnee
Shareholder Approval. . . . . . . . . . . . . . . . . . . 31
Effect of the Merger: The Surviving Corporation . . . . . 31
Conditions and Covenants. . . . . . . . . . . . . . . . . . 32
Approval by Shawnee Shareholders . . . . . . . . . . . . . 32
Government Approvals . . . . . . . . . . . . . . . . . . . 32
Covenants. . . . . . . . . . . . . . . . . . . . . . . . . 33
Other Conditions . . . . . . . . . . . . . . . . . . . . . 33
Waiver and Amendment . . . . . . . . . . . . . . . . . . . 35
Termination. . . . . . . . . . . . . . . . . . . . . . . . 35
The Stockholder Agreement . . . . . . . . . . . . . . . . . 35
Rights of Dissenting Shareholders . . . . . . . . . . . . . 35
<PAGE> 6
PROXY STATEMENT/PROSPECTUS
--------------------------
TABLE OF CONTENTS
(Continued)
PAGE
----
Resales of Wesbanco Common Stock. . . . . . . . . . . . 37
Expenses . . . . . . . . . . . . . . . . . . . . . . . . 38
Accounting Treatment . . . . . . . . . . . . . . . . . . 38
Certain Federal Income Tax Consequences of the Merger. . 39
COMPARATIVE STOCK PRICES AND DIVIDENDS . . . . . . . . . . . . 42
Wesbanco Stock Prices and Dividends . . . . . . . . . . . 42
Stock Price Range and Dividends Paid . . . . . . . . . . . 42
Wesbanco Common Stock Dividend Policy . . . . . . . . . . 42
Shawnee Stock Price Range and Dividends . . . . . . . . 43
Shawnee Dividend Policy . . . . . . . . . . . . . . . . . 44
COMPARATIVE RIGHTS OF SHAREHOLDERS . . . . . . . . . . . . . . 44
Description of Wesbanco Capital Stock . . . . . . . . . . 44
Description of Shawnee Capital Stock . . . . . . . . . . 45
Comparison of Rights of Wesbanco and Shawnee Shareholders . 46
PRO FORMA DATA . . . . . . . . . . . . . . . . . . . . . . . . . 48
Notes to Pro Forma Combined Financial Information . . . . . 51
INFORMATION WITH RESPECT TO WESBANCO . . . . . . . . . . . . . . 53
History. . . . . . . . . . . . . . . . . . . . . . . . . . 53
Recent Acquisitions. . . . . . . . . . . . . . . . . . . . 54
Future Acquisitions . . . . . . . . . . . . . . . . . . . . 54
Operations . . . . . . . . . . . . . . . . . . . . . . . . 54
Competition . . . . . . . . . . . . . . . . . . . . . . . 56
Principal Shareholders . . . . . . . . . . . . . . . . . . 57
Wesbanco KSOP. . . . . . . . . . . . . . . . . . . . . . . 58
Changes in West Virginia Taxes. . . . . . . . . . . . . . 61
Directors and Executive Officers . . . . . . . . . . . . . 61
Executive Compensation. . . . . . . . . . . . . . . . . . 61
Certain Relationships and Related Transactions . . . . . 61
INFORMATION WITH RESPECT TO SHAWNEE . . . . . . . . . . . . . 62
History . . . . . . . . . . . . . . . . . . . . . . . . . 62
Banking Services . . . . . . . . . . . . . . . . . . . . 62
Competition . . . . . . . . . . . . . . . . . . . . . . . 62
Economic Conditions . . . . . . . . . . . . . . . . . . . 63
Monetary Policies . . . . . . . . . . . . . . . . . . . 63
Properties of Shawnee. . . . . . . . . . . . . . . . . . 63
<PAGE> 7
PROXY STATEMENT/PROSPECTUS
--------------------------
TABLE OF CONTENTS
(Continued)
PAGE
----
Legal Proceedings . . . . . . . . . . . . . . . . . . . 64
Principal Shareholders. . . . . . . . . . . . . . . . . 64
Directors and Executive Officers of Shawnee. . . . . . . 65
Executive Officers . . . . . . . . . . . . . . . . . . 67
Compensation of Executive Officers. . . . . . . . . . . 68
401(k) Profit Sharing Plan. . . . . . . . . . . . . . . 68
Employment Agreements . . . . . . . . . . . . . . . . . 69
Meetings of the Board of Directors and Compensation of
Members . . . . . . . . . . . . . . . . . . . . . . . 69
Certain Relationships and Related Transactions . . . . . 69
GOVERNMENT REGULATION . . . . . . . . . . . . . . . . . . . 70
Holding Company Structure . . . . . . . . . . . . . . . 70
Dividend Restrictions. . . . . . . . . . . . . . . . . . 71
FDIC Insurance. . . . . . . . . . . . . . . . . . . . . 72
Capital Requirements . . . . . . . . . . . . . . . . . . 72
Federal Deposit Insurance Corporation Improvement
Act of 1991 . . . . . . . . . . . . . . . . . . . . . 74
Environmental Issues . . . . . . . . . . . . . . . . . . 77
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . 78
RELATIONSHIP WITH INDEPENDENT AUDITORS . . . . . . . . . . . 79
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . 79
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . 80
INDEX TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . 81
APPENDICES . . . . . . . . . . . . . . . . . . . . . . . . . . 101
I. Statutory Excerpts Concerning Dissenters' Rights
of Appraisal . . . . . . . . . . . . . . . . . . . . 101
II. Agreement and Plan of Merger . . . . . . . . . . . . 104
III. Stockholders Agreement . . . . . . . . . . . . . . . 171
<PAGE> 8
SUMMARY INFORMATION
The following is a brief summary of certain information
with respect to matters to be considered at the Special
Meeting of Shareholders of Shawnee. This summary is
necessarily incomplete and is qualified in its entirety by
the more detailed information and financial statements
contained in this Proxy Statement/Prospectus and in the
Agreement and Plan of Merger and the Stockholders Agreement
attached as Appendices II and III, respectively, to this
Proxy Statement/Prospectus. Shareholders are urged to read
the entire Proxy Statement/Prospectus before deciding on how
to vote their shares.
Date, Time, and Place of
the Special Meeting. . . . .The meeting of the shareholders of
Shawnee will be held on Tuesday,
June 3, 1997, at 4:00 P.M. Eastern
Standard Time in the principal
office of Shawnee at 1011 Myers
Avenue, Dunbar, West Virginia,
25064. See "Voting Information".
Purpose of the Special
Meeting. . . . . . . . . . Shawnee's meeting will be to
consider and vote upon the Agreement
and Plan of Merger dated as of
December 19, 1996, (the
"Agreement"), providing for (i) the
merger (the "Merger") of Shawnee
with and into Wesbanco Bank South
Hills, a wholly owned subsidiary of
Wesbanco ("Wesbanco South Hills")
and (ii) the exchange of each
outstanding share of common stock of
Shawnee, par value $10.00 per share
("Shawnee Common Stock") for 10.094
shares of Wesbanco common stock, par
value $2.0833 per share ("Wesbanco
Common Stock"). See "Voting
Information" and "The Merger".
Parties to the Merger. . . Wesbanco is a multi-bank holding
company incorporated under the laws
of the State of West Virginia which
conducts a general commercial
banking and trust business through
its bank subsidiaries. It owns five
subsidiary banks located in West
Virginia and Eastern Ohio with one
of its banking subsidiaries being
Wesbanco South Hills. Wesbanco's
principal executive offices are
located at One Bank Plaza, Wheeling,
West Virginia, 26003, telephone
(304) 234-9000. See "Information
with Respect to Wesbanco".
Wesbanco South Hills is a West
Virginia banking corporation and is
a wholly owned subsidiary of
Wesbanco which operates banking
facilities in South
<PAGE> 9
Hills and Sissonville.
Shawnee is a banking corporation
incorporated under the laws of the
State of West Virginia which
conducts a general commercial
banking business. It operates two
banking facilities, one in Dunbar
and one in South Charleston. Its
principal executive offices are
located at 1011 Myers Avenue,
Dunbar, West Virginia, 25064,
telephone (304) 768-9761. See
"Information with Respect to
Shawnee".
Wesbanco Anti-Takeover
Provisions. . . . . . . . The Agreement provides for the
exchange of each share of Shawnee
Common Stock for 10.094 shares of
Wesbanco Common Stock. The Articles
of Incorporation of Wesbanco contain
certain anti-takeover provisions,
including, among others, a super
majority voting provision and a
staggered Board of Directors
provision as more fully explained
herein. Additionally, the Articles
of Incorporation of Wesbanco provide
that the Board of Directors of
Wesbanco may issue, without
shareholder approval, up to
1,000,000 shares of preferred stock
in one or more series, with such
preferences, voting rights,
conversion rights and other special
rights as the Board may determine.
The rights of holders of Wesbanco
Common Stock are subject to the
rights and preferences of any
preferred stock issued by the
Wesbanco Board of Directors to the
extent set forth in a resolution
fixing such terms and conditions.
Under certain circumstances,
additional shares of Wesbanco Common
Stock or shares of Wesbanco
preferred stock which are authorized
but not issued could be used to
create voting impediments or to
frustrate persons seeking to gain
control of Wesbanco through
acquisition of a substantial number
of shares of Wesbanco Common Stock.
See "Comparative Rights of
Shareholders - Comparison Rights of
Wesbanco and Shawnee Shareholders".
These anti-takeover provisions
provide the continuity and stability
of management that is considered
essential to providing shareholders
with long-term value on their
investments, allow the Board greater
flexibility, and permit the issuance
of additional common and preferred
shares without the expense and delay
of a shareholders' meeting. These
provisions also
<PAGE> 10
constitute defensive
measures which are designed, in part
to discourage and insulate
Wesbanco against certain hostile
takeover efforts, which the
Wesbanco Board might determine are
not in Wesbanco's best interests and
the best interests of its
shareholders. The staggered board
provision makes it more difficult to
change the full Board of Directors
of Wesbanco at any one time and
makes it more difficult to amend the
specific provisions of the Articles
of Incorporation which deal with the
classification of directors. The
staggered board provision reduces
the number of directors to be
elected at each annual meeting, so
that minority shareholders may be in
a less favorable position to elect
directors through cumulative voting.
Such provisions may also be
beneficial to management in a
hostile takeover attempt and
adversely affect shareholders who
might wish to participate in such a
takeover. See "Comparative Rights
of Shareholders".
Vote Required for Merger. . Approval of the Merger requires the
affirmative vote of the holders of a
majority of the outstanding shares
of Shawnee Common Stock entitled to
vote as of April 18, 1997, the
record date for the Special Meeting
(the "Record Date"). As of the
Record Date, the directors and
officers of Shawnee beneficially
owned 20,297 shares of Shawnee
Common Stock representing 63.37% of
the outstanding shares. See
"Information with Respect to Shawnee
- Principal Shareholders" and
"Voting Information - Voting and
Revocation of Proxies".
Approval of the Merger also requires
the affirmative vote of the sole
shareholder of Wesbanco South Hills.
The authorization for the issuance
of additional Wesbanco Common Stock
also requires the affirmative vote
of the Board of Directors of
Wesbanco. See "The Merger -
Wesbanco and Wesbanco South Hills
Shareholder Approval".
Terms of the Merger . . . Upon the effective date of the
Merger, each out-standing share of
Shawnee Common Stock will be
converted into 10.094 shares of
Wesbanco Common Stock. Cash will be
paid in lieu of issuing fractional
shares of Wesbanco Common Stock, in
connection
<PAGE> 11
with the Merger based on
a whole share value of $30.50 per
share, or at the election of each
shareholder, such shareholder may
elect to purchase the remaining
fraction of such share, at the
aforesaid value. For additional
information concerning the treatment
of Shawnee shares in the Merger, and
the effect of the Merger upon
Shawnee shareholders, see "The
Merger". It is contemplated that
Shawnee will be merged with and into
Wesbanco South Hills with Wesbanco
South Hills as the surviving
corporation. Wesbanco South Hills
will maintain its separate identity
and continue its operations as an
affiliate of Wesbanco. The Merger
will be accounted for as a
"purchase" by Wesbanco of Shawnee.
If the Merger had been concluded on
December 31, 1996, Shawnee would
have constituted 2.2% of deposits,
2.3% of assets, 2.4% of equity, and
the former shareholders of Shawnee
would hold 3.1% (assuming no Shawnee
shareholders exercise dissenters'
rights) of the total outstanding
shares of Wesbanco on a consolidated
pro forma basis. In addition,
Shawnee would have contributed 2.2%
of net interest and 2.7% of net
income of Wesbanco on a consolidated
pro forma basis as of December 31,
1996. See "The Merger - Effects of
the Merger: The Surviving
Corporation" and "Selected
Financial Information".
Dissenters' Rights. . . . Any holder of Shawnee Common Stock
who files written objection to the
proposed Merger prior to or at the
Special Meeting, does not vote in
favor of the proposed Merger, makes
written demand on Shawnee within ten
days following the Special Meeting,
and surrenders his certificates
within twenty days after making the
demand for notation thereon that
such demand has been made, will be
entitled to receive in cash the fair
value of his shares 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, upon
compliance with all statutory
requirements. Holders of Wesbanco
Common Stock will not be entitled to
dissenters' rights in the
transaction. See "The Merger -
Rights of Dissenting Shareholders",
and "Appendix I". It is a condition
to the obligations of Wesbanco and
Shawnee to consummate the Merger
that the holders
<PAGE> 12
of not more than
10% of Shawnee Common Stock exercise
their dissenters' rights. See "The
Merger - Conditions and Covenants".
Federal Income Tax
Consequences. . . . . . Consummation of the Merger is
conditioned upon receipt of a ruling
from the Internal Revenue Service,
or an opinion of counsel, that,
among other things, the Merger will
be treated as a tax free
reorganization for Federal Income
Tax purposes upon consummation of
the Merger except for dissenting
shareholders and shareholders who
receive cash for fractional shares.
See "The Merger - Certain Federal
Income Tax Consequences of the
Merger".
Regulatory Approvals. . . Notwithstanding approval by the
shareholders of Shawnee and
Wesbanco South Hills, the
consummation of the Merger is
subject to certain conditions,
including approval of the Federal
Deposit Insurance Corporation
("FDIC"), and the Board of Banking
and Financial Institutions of the
State of West Virginia. Applications
for approval with the regulatory
authorities were filed shortly after
execution of the Agreement and the
Board of Banking and Financial
Institutions has now approved the
Merger. There can be no assurance
that the FDIC will approve the
Merger. If the Merger is approved,
there can be no assurance as to the
date of such approval or the
conditions required for such
approval. See "The Merger -
Conditions and Covenants" and
"Termination".
Effective Date of Merger. . The Effective Date of the Merger is
anticipated to occur shortly after
the Special Meeting upon receipt of
all approvals and satisfaction of
all conditions in the Agreement and
in such approvals. See "The Merger
- Effective Time".
Shareholders Entitled to
Vote . . . . . . . . . . On April 18, 1997, there were 32,027
shares of Shawnee Common Stock
outstanding. Only holders of record
of Shawnee Common Stock at the close
of business on April 18, 1997, are
entitled to vote at the Special
Meeting. See "Voting Information".
Exchange of Certificates. . As promptly as practicable after the
Effective Date,
<PAGE> 13
instructions on how
to effect the exchange of
certificates of Shawnee Common Stock
for certificates of Wesbanco Common
Stock will be sent to each Shawnee
shareholder of record as of the
Effective Date. See "The
Merger - Exchange of Certificates".
Shawnee shareholders should not send
in stock certificates until they
receive instructions to do so.
Wesbanco Common Stock . . Holders of Wesbanco Common Stock are
entitled to one vote per share on
all matters voted upon by
shareholders, are entitled to
cumulative voting rights in the
election of directors and do not
have preemptive rights for the
purchase of additional shares of any
class of Wesbanco Common Stock or
preferred stock. Holders of
Wesbanco Common Stock are entitled
to receive such dividends as may be
declared by Wesbanco's Board of
Directors out of funds legally
available therefor. In the event of
the liquidation or winding up of the
affairs of Wesbanco, holders of
Wesbanco Common Stock would be
entitled to share ratably in all
assets remaining after payment to
creditors. See "Comparative Rights
of Shareholders".
Conditions to Consummation
Termination. . . . . . . . Consummation of the Merger is
subject to various conditions,
including, among others, approvals
by the above noted regulatory
authorities, the holders of Shawnee
Common Stock, and receipt of the tax
opinion or ruling mentioned above.
Wesbanco and Shawnee have also
reserved the right to terminate the
Merger if the holders of more than
10% of Shawnee Common Stock exercise
appraisal rights with respect to
their stock. Shawnee has also
reserved the right to terminate the
Merger if the closing has not
occurred by December 19, 1997; and
if the market value of Wesbanco
Common Stock should fall below
$27.00 per share (based on the
average price of Wesbanco for the 30
calendar days preceding five
business days before closing), in
addition to other conditions. See
"The Merger - Conditions and
Covenants and Termination".
<PAGE> 14
Interest of Certain
Persons in the Merger. . . The Agreement provides that R.
Brawley Tracy and Brenda H.
Robertson, both Shawnee directors,
will become directors of Wesbanco
South Hills on the Effective Date.
In addition, it is a condition to
consummation of the Merger that
Brenda H. Robertson, President of
Shawnee, enter into an Employment
Agreement with Wesbanco South Hills.
See "The Merger - Interest of
Certain Persons in the Merger".
Stockholder Agreement. . . Certain Stockholders of Shawnee
entered into a Stockholder Agreement
as of December 19, 1996, whereby
each such stockholder agreed, among
other things, not to sell, pledge,
transfer or otherwise dispose of his
shares of Shawnee Common Stock prior
to the Special Meeting of
Shareholders and to vote such shares
in favor of the Merger. The
shareholders who signed the
Agreement constitute all of the
members of the Board of Directors
and own individually and
beneficially 63.37% of the
outstanding Shawnee Common Stock.
See "The Merger - The Stockholder
Agreement".
Financial Information. . . Financial Statements for the year
ended December 31, 1996, for Shawnee
and Wesbanco are included herein.
See "Index to Financial Statements",
and "Pro Forma Data."
For the twelve months ended December
31, 1996, Wesbanco's net income was
$21,161,000 or $2.08 per share.
Total assets were approximately
$1.7 Billion, total deposits were
approximately $1.3 Billion and total
shareholders' equity was
approximately $227 Million.
For the twelve months ended December
31, 1996, Shawnee's net income was
$553,269 or $17.28 per share. Total
assets were approximately $39
Million, total deposits were
approximately $30 Million and total
stockholders' equity was
approximately $6 Million.
<PAGE> 15
MARKET PRICES AND SELECTED FINANCIAL INFORMATION
Market Prices
Wesbanco Common Stock is quoted in the over-the-counter market
and is reported through the Nasdaq Stock Market on the National Market
System. There is no established public trading market for Shawnee Common
Stock. The information set forth below for Shawnee represents only the
per share equivalent based on the market price of Wesbanco Common Stock
as of the dates indicated. These stock price ranges may not necessarily
represent actual transactions. See "Comparative Stock Prices and Dividends".
Market Price Per Share: Wesbanco Shawnee
-------- -------
High Low High Low
---- --- ---- ---
As of April 18, 1997 $34.00 $33.00 $343.19(1) $333.10(1)
As of December 18, 1996 (2) $31.25 $30.50 None (4) None (4)
Pro Forma Equivalent (3) $315.43 $307.87
(1) Based solely on the conversion ratio multiplied by the high and low
prices for Wesbanco Common Stock on such date.
(2) December 18, 1996, is the date immediately preceding public
announcement of the proposed Merger.
(3) The pro forma equivalent was computed by multiplying the exchange
ratio by the high and low price of Wesbanco as of December 18, 1996.
The exchange ratio is 10.094 shares of Wesbanco Common Stock for each
share of Shawnee Common Stock.
(4) Shawnee Common Stock had no high or low price for the reported date.
Shawnee is aware of one trade in Shawnee Common Stock during 1996, and
it was advised that the trade was at $90 per share, but there were
only three shares transferred in the transaction.
Selected Financial Information
The following pages present selected financial information for the
years ended December 31, 1992 through 1996, for Wesbanco and Shawnee.
The information should be read in conjunction with the more detailed
information in the financial statements contained or incorporated herein by
reference, including the Notes thereto. See "Index to Financial Statements",
"Incorporation of Certain Documents by Reference", and "Pro Forma Data".
<PAGE> 16
WESBANCO INC.
Selected Financial Information
(In thousands, except for share and per share data)
<TABLE> (Unaudited)
For the years ended
December 31,
-----------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Interest income $112,938 $108,082 $101,720 $105,268 $112,851
Interest expense 48,218 46,570 39,660 43,727 53,661
------------------------------------------------------
Net Interest income 64,720 61,512 62,060 61,541 59,190
------------------------------------------------------
Provision for loan losses 4,336 2,788 6,073 3,247 3,297
------------------------------------------------------
Net interest income after
provision for loan losses 60,384 58,724 55,987 58,294 55,893
Total other income 12,273 11,366 11,028 10,367 10,272
Total other expense 43,152 42,130 42,840 41,873 40,610
------------------------------------------------------
Income before income taxes and
effect of change in accounting
for post retirement benefits 29,505 27,960 24,175 26,788 25,555
Provision for income taxes 8,344 7,656 6,283 7,070 7,044
------------------------------------------------------
Income before effect of change in
accounting for postretirement
benefits 21,161 20,304 17,892 19,718 18,511
Effect of change in accounting for
postretirement benefits (592)
------------------------------------------------------
Net Income $21,161 $20,304 $17,892 $19,718 $17,919
======================================================
Earnings per share of common stock: (1)
Net Income $2.08 $1.98 $1.72 $1.88 $1.71
Average shares outstanding 10,168,738 10,160,328 10,280,878 10,379,499 10,397,197
Preferred stock dividends and
discount accretion - $164 $183 $184 $184
Total Assets $1,677,771 $1,549,019 $1,532,832 $1,534,131 $1,500,687
Total Deposits 1,342,820 1,254,844 1,254,586 1,265,677 1,245,978
Total Equity 227,532 206,996 192,305 191,801 180,641
Cash dividends declared per share 1.08 0.96 0.86 0.785 0.70
Book value per share 21.62 20.32 18.86 18.52 17.41
</TABLE>
(1) Per share information has been retroactively adjusted for the April 1993
two for one stock split.
<PAGE> 17
SHAWNEE BANK, INC.
Selected Financial Information
(In thousands, except for share and per share data)
(Unaudited)
<TABLE>
For the years ended
December 31,
--------------------------------------------------
1996 1995 1994 1993 1992
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Interest income $ 2,700 $ 2,511 $ 2,539 $ 2,625 $ 2,740
Interest expense 1,232 1,113 932 1,088 1,201
--------------------------------------------------
Net Interest income 1,468 1,398 1,607 1,537 1,539
--------------------------------------------------
Provision for loan losses -- -- -- -- --
--------------------------------------------------
Net interest income after
provision for loan losses 1,468 1,398 1,607 1,537 1,539
Total other income 263 177 176 205 464
Total other expense 921 898 937 892 962
--------------------------------------------------
Income before income taxes 810 677 846 850 1,041
Income tax provision 257 215 285 292 361
--------------------------------------------------
Net Income $ 553 $ 462 $ 561 $ 558 $ 680
==================================================
Earnings per share of common stock:
Net Income $17.28 $14.42 $17.54 $17.42 $21.22
Average shares outstanding 32,027 32,027 32,027 32,027 32,027
Total Assets 38,939 33,959 35,271 36,152 36,905
Total Deposits 29,676 27,974 28,144 27,670 29,743
Total Equity 5,501 5,209 4,538 4,398 3,968
Cash dividends per share 9.00 4.50 4.50 4.00 4.00
Book value per share 171.79 162.64 141.69 137.32 123.91
</TABLE>
<PAGE> 18
INTRODUCTION
This Proxy Statement/Prospectus and the accompanying
proxy are being mailed to the shareholders of Shawnee on or
about April 29, 1997, in connection with the solicitation of
proxies by the Board of Directors of Shawnee of the holders
of Shawnee Common Stock to be voted at the Special Meeting
of Shawnee shareholders (the "Special Meeting") called to
consider and vote upon the Agreement and Plan of Merger
dated December 19, 1996, (the "Agreement") providing for (i)
the Merger of Shawnee with and into Wesbanco South Hills, a
wholly owned subsidiary of Wesbanco, and (ii) the exchange
of each outstanding share of Shawnee Common Stock for 10.094
shares of Wesbanco Common Stock. The Boards of Directors of
Shawnee and Wesbanco unanimously have approved the
Agreement, and the Board of Directors of Shawnee
unanimously recommends that its shareholders vote FOR
approval thereof. For information concerning the background
of, reasons for and terms and conditions of the Merger and
the interests of certain persons, including members of the
Board of Directors of Shawnee in the Merger, see "THE
MERGER", including "Background of the Merger",
"Recommendation of the Boards of Directors", "Wesbanco
Reasons for the Merger", "Shawnee Reasons for the Merger",
and "Interest of Certain Persons in the Merger."
A copy of the Agreement is attached to this Proxy
Statement/Prospectus as Appendix II and is incorporated by
reference herein in its entirety. See also the following
subheadings under "THE MERGER": "Conditions and Covenants,"
"Waiver and Amendment" and "Termination". All information
concerning Shawnee contained herein has been supplied by
Shawnee and all information concerning Wesbanco contained
herein has been supplied by Wesbanco.
VOTING INFORMATION
Date, Time and Place of the Special Meeting
The Special Meeting of Shawnee will be held on Tuesday,
June 3, 1997, at 4:00 P.M., Eastern Standard Time, in the
principal office of Shawnee, at 1011 Myers Avenue, Dunbar,
West Virginia.
Voting and Revocation of Proxies
Only holders of record of Shawnee Common Stock on April
18, 1997, the Record Date, will be entitled to notice of and
to vote at the Special Meeting of Shawnee and any
adjournments or postponements thereof. On the Record Date,
there were outstanding and entitled to vote 32,027 shares of
Shawnee Common Stock with each share entitled to one vote.
As of April 18, 1997, Shawnee Common Stock was held by
approximately 196 shareholders of record. As of April 18,
1997, Wesbanco Common Stock was held by approximately 4,234
shareholders of record.
<PAGE> 19
The presence, in person or by proxy, of the holders of
a majority of the 32,027 shares of Shawnee Common Stock
entitled to vote is necessary to constitute a quorum at the
Special Meeting. The affirmative vote of the holders of at
least a majority of the outstanding 32,027 shares of Shawnee
Common Stock entitled to vote at the Special Meeting, or
16,014 shares is required for approval of the Agreement and
the Merger. With respect to the Shawnee Common Stock,
abstentions and broker non-votes will have the effect of a
vote against approval of the Agreement and the Merger.
As of the Record Date, the directors and officers of
Shawnee beneficially owned approximately, in the aggregate,
20,297 shares of Shawnee Common Stock, constituting in the
aggregate approximately 63.37% of the outstanding Shawnee
Common Stock as of such date. See "The Merger - The
Stockholder Agreement."
As of April 18, 1997, Wesbanco held no shares of
Shawnee Common Stock. Directors, executive officers and
affiliates of Wesbanco owned no shares of Shawnee Common
Stock as of such date.
All shares of Shawnee 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 no instructions are indicated, properly
executed proxies will be voted to approve the Agreement and
authorize the Merger in accordance with the terms and
conditions of the Agreement.
The Boards of Directors of Shawnee and Wesbanco do 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 and acting thereunder, both of whom
are shareholders of Shawnee, will have the authority to vote
on such matters in their discretion.
A shareholder giving a proxy has the right to revoke it
at any time before it is voted by filing with the Secretary
of Shawnee a written notice of revocation or a duly executed
later-dated proxy, or orally at the Special Meeting.
Solicitation of Proxies
Proxies are being solicited by the Board of Directors
of Shawnee for use at the Special Meeting. Shawnee will
bear the cost of the solicitation of proxies from the
holders of its shareholders in connection with its Special
Meeting, except that Wesbanco will bear substantially all
the costs relating to the printing and mailing of the Proxy
Statement/Prospectus. In addition to solicitation by use of
the mails, proxies may be solicited by directors, officers
and employees of Shawnee in person or by telephone or
telegram. Such 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
<PAGE> 20
owners of Shawnee Common Stock held of record by such persons,
and Shawnee may reimburse such custodians, nominees and
fiduciaries for reasonable out-of-pocket expenses they incur
in connection therewith.
Accountants
Rollins, Cleavenger and Rollins, independent public
accountants, have provided auditing services to Shawnee
since 1990. Representatives of Rollins, Cleavenger and
Rollins are expected to be present at the Shawnee Special
Meeting to respond to appropriate questions and will also
have the opportunity to make a statement if they desire to
do so. See "Relationship With Independent Accountants" and
"Experts".
Ernst & Young LLP serves as Wesbanco's independent
auditors. It is expected that representatives of Ernst &
Young may be present at the Special Meeting. Such
representatives will have the opportunity to make a
statement if they desire to do so and will be available to
respond to questions.
Date for Submission of Shareholder Proposals
In the event that the Merger has not been consummated
by the date of the next Shawnee annual meeting, shareholder
proposals may be submitted to the attention of Joan B.
Belcher, Secretary, Shawnee Bank, Inc., 1011 Myers Avenue,
Dunbar, West Virginia, 25064. Such proposals are to be
received by Shawnee no later than the 24th of November, 1997.
THE MERGER
The following description of the terms of the Merger is
qualified in its entirety by reference to the provisions of
the Agreement and the Stockholder Agreement, which are
attached hereto as Appendices II and III, respectively, and
are incorporated herein by reference in their entirety.
Shareholders of Shawnee are strongly encouraged to read the
Agreement and the Stockholder Agreement for a more complete
description of the terms of the Merger.
General
Pursuant to the Agreement, Shawnee will merge with and
into Wesbanco South Hills, a wholly owned subsidiary of
Wesbanco which will be the surviving corporation, the
Merger. Under the Agreement, each outstanding share of
Shawnee Common Stock will be converted into 10.094 shares of
Wesbanco Common Stock, with cash, or the opportunity to buy
an additional fraction, sufficient to result in a whole
share for any resulting fraction, except for shares held by
dissenting Shawnee Shareholders. See "Rights of Dissenting
Shareholders" below. The conversion is more fully described
below. See "Conversion of Shawnee Common Stock".
<PAGE> 21
Background of the Merger
Effective in June of 1982, the West Virginia banking
laws were amended to permit West Virginia bank holding
companies to own more than one West Virginia bank for the
first time. Subsequent legislation, effective May 30, 1986,
permitted nationwide reciprocal acquisition of banks and
bank holding companies by West Virginia bank holding
companies after December 31, 1987.
Shawnee has been operating under its current name for
approximately six years. It originally operated under the
name Community Banking & Savings Company and on January 1,
1991, merged with the 2nd Avenue Bank of South Charleston
and changed its name to Shawnee Bank, Inc.
Wesbanco has maintained some communication with Shawnee
for several years and representatives of the two
institutions have had informal meetings concerning a
possible merger over the last several years. These informal
discussions did not result in any substantive discussions
between the parties. However, in the spring of 1996
substantive discussions were initiated which resulted in the
execution of a definitive Agreement and Plan of Merger on
December 19, 1996.
The negotiations were principally held between Edward
M. George, President of Wesbanco, Larry L. Dawson,
President, Wesbanco South Hills and R. Brawley Tracy and
Brenda H. Robertson, Chairman and President, respectively,
of Shawnee. A number of private meetings were held between
these parties beginning on February 1, 1996, including
meetings on July 18, 1996, August 13, 1996, October 4, 1996
and November 7, 1996. Final substantive discussions
occurred during November and December, 1996, at which the
final proposals were resolved. Though the transaction was
continuously structured as an exchange of stock, the
proposed exchange ratio changed several times during the
negotiations due in part to changes in the market price of
Wesbanco Common Stock and the respective earnings and equity
levels of the two corporations. The final Agreement and the
Stockholders Agreement were approved by the Board of
Directors of Shawnee on December 18, 1996, subject to
receipt of a "fairness opinion" from LSC Financial Services,
Inc. See "Opinion of LSC Financial Services, Inc.".
Preliminary due diligence reviews were conducted by
representatives of both corporations during the negotiations
which disclosed no material adverse conditions as that term
is defined in the Agreement.
For additional information regarding the reasons for
the decision of Shawnee's Board to select the Wesbanco
offer, see "Shawnee's Reasons for the Merger" below.
Recommendation of the Boards of Directors
The Boards of Directors of Shawnee and Wesbanco have
approved the Agreement by unanimous vote of the directors of
the respective corporations and recommend that the Shawnee
shareholders vote for approval of the Agreement and the
exchange of stock. The Boards of
<PAGE> 22
Directors of Shawnee and Wesbanco have determined that the
Agreement is in the best interests of their respective companies,
shareholders and employees, and that the Merger will enhance the
ability of Wesbanco and Shawnee to serve the financial needs of
their respective customers.
The Boards of Directors of Wesbanco and Shawnee believe
that the Merger will produce a stronger combined entity
better able to compete with banks and a variety of non-bank
institutions including securities companies, insurance
companies, thrift institutions and retailers, in a financial
services industry that has changed and is in the process of
changing further.
Shawnee's Reasons for the Merger
In making its determination, the Board of Directors of
Shawnee considered a number of factors, including (i) the
operating history, financial and future prospects of Shawnee
and Wesbanco, (ii) pro forma financial information
concerning the Merger, including, among other things, the
pro forma book value, earnings and dividends per share to
Shawnee shareholders, (iii) a comparison of the price being
paid in this Merger to other comparable bank mergers, based,
among other things, on multiples of book value and earnings,
(iv) the historical dividends on Wesbanco Common Stock as
compared to the historical dividends on Shawnee Common
Stock, as well as prospects for future dividends, (v) the
tax-free nature of the transaction (see, generally, "Certain
Federal Income Tax Consequences of the Merger" below), (vi)
the historical trading prices for Shawnee Common Stock and
Wesbanco Common Stock, (vii) Shawnee's alternatives to this
Merger, including remaining independent or negotiating a
business combination or transaction with another
institution, and (viii) the provisions of the Agreement
allowing Shawnee to terminate the Agreement if certain
conditions, including certain Wesbanco market price tests
and the obtaining of a fairness opinion by Shawnee are not
met at the Closing (See "Conditions and Covenants",
"Termination" and "Opinion of LSC Financial Services, Inc."
below).
In reviewing comparable bank mergers, the Board of
Directors considered other transactions which had a variety
of ranges in book value multiples and earnings multiples.
The Board of Directors of Shawnee also took into
account that the Shawnee shareholders would have the
opportunity to participate in the future growth of Wesbanco
by obtaining Wesbanco Common Stock in the Merger. The Board
noted that Shawnee, as part of a multi-bank holding company
of greater size than Shawnee and with a substantial trust
department and other resources, should be able to provide
its customers with a greater range of services and should
become a stronger competitor in its existing markets. Since
it is anticipated that Shawnee's offices will continue to be
operated, Shawnee will be able to continue to be responsive
to the needs of the local communities it serves. At the
same time, Shawnee and Wesbanco will each have the benefit
of the resources and skills of the other institution, and
Wesbanco South Hills' Board will be increased to include two
Shawnee directors, namely, R. Brawley Tracy and Brenda H.
Robertson. (See "Effects of the Merger: The Surviving
Corporation" below). As shareholders of Wesbanco, the
shareholders of Shawnee (other than Dissenting Shawnee
Shareholders who would receive only cash in the proposed
transaction) would continue to be able to participate in any
future growth from the combination of Shawnee and Wesbanco
(See "Effects of the Merger: The Surviving Corporation"
below).
<PAGE> 23
After reviewing all relevant facts, the Shawnee Board
of Directors determined to approve the Agreement and
recommend the Merger to the Shawnee Shareholders. If any
conditions to Closing are not met (see "Conditions and
Covenants" and "Termination" below), the Shawnee Board of
Directors will make an independent determination, after
consultation with counsel, where appropriate, as to whether
or not to terminate the Agreement and abandon the Merger.
Wesbanco Reasons for the Merger
Wesbanco's Board of Directors believes that the
proposed Merger will allow Wesbanco to combine its resources
with those of Shawnee, thereby affording the resulting
combined institution better opportunities to compete with
other financial and non-financial institutions (including
other commercial banks, thrift institutions, finance
companies, credit unions, money market mutual funds,
brokerage firms, investment companies, credit companies,
insurance companies and retail stores that maintain their
own credit operations) in the markets in which Shawnee and
Wesbanco's subsidiary banks conduct their business. The
Merger will provide Wesbanco with a greater presence in the
Charleston Metropolitan area of West Virginia which will
provide Wesbanco with an opportunity for future growth in
that market. Moreover, the affiliation should permit a
greater investment in data processing systems, accounting
and other support services, as well as provide greater
economies of scale. Benefits to the combined entity will
also be available through the elimination of duplicative
expenses.
Wesbanco will be able to offer a broader range of
services than those currently available to Shawnee
customers, in particular trust services, and the combined
entity will be able to offer a broader loan program and,
through participations by the subsidiary banks, to service
larger loan transactions. In summary, Wesbanco's Board of
Directors believes that the Merger will enable both Shawnee
and Wesbanco's subsidiaries to better serve the financial
needs of their communities, and the Merger will enable
Wesbanco to obtain these benefits at a cost that, under all
the facts and circumstances, is reasonable.
Interest of Certain Persons in the Merger
Directors and officers of Shawnee, beneficially owned,
in the aggregate, approximately 20,297 shares, or 63.37% of
Shawnee Common Stock as of April 18, 1997.
All of Shawnee's directors and officers will, as a
result of the Merger, obtain an equity interest in Wesbanco
in exchange for their shares of Shawnee Common Stock. Each
of them will receive the same number of shares of Wesbanco
Common Stock for each share of Shawnee Common Stock owned by
him or her as every other Shawnee shareholder. See
"Information with Respect to Shawnee - Directors and
Executive Officers of Shawnee". Certain affiliates of
Shawnee will, however, be subject to certain restrictions on
any resale of Wesbanco stock received by them pursuant to
the Merger. See "Resales of Wesbanco Common Stock". The
directors of Shawnee do not own any shares of Wesbanco
Common Stock, except for R. Thomas
<PAGE> 24
Linger, R. Brawley Tracy and Andrew A. Payne, Jr., directors
of Shawnee, who own 1,072, 1,000 and 528 shares,
respectively, of Wesbanco Common Stock, the latter in a
fiduciary capacity.
As a result of the Merger each five-percent shareholder
of Shawnee will receive, in exchange for the Shawnee Common
Stock beneficially owned by them, the amount and percentage
of shares of Wesbanco Common Stock set forth in "Information
With Respect to Shawnee-Principal Shareholders".
Under the Agreement, R. Brawley Tracy and Brenda H.
Robertson will become directors of Wesbanco South Hills on
the Effective Date. See "Effects of the Merger: The
Surviving Corporation" below. It is also a condition to
Wesbanco's obligations to consummate the Merger that Brenda
H. Robertson, President of Shawnee, enter into an employment
agreement with Wesbanco South Hills, as described in the
section entitled "Conditions and Covenants", below. There
are no agreements that the other individuals who serve as
directors and officers of Shawnee will remain in their
respective positions following the Merger. See "Effects of
the Merger: The Surviving Corporation" below.
Brenda H. Robertson does have an existing Employment
Agreement with Shawnee dated December 14, 1993, which was
amended by First Amendment dated November 19, 1996. Under
the terms of the Agreement, as amended, Mrs. Robertson's
term of employment consists of a revolving three year term
beginning on the 1st day of December, 1996. The term
automatically extends for an additional three year period on
each anniversary of the beginning date of the term of the
Agreement. The Agreement provides for her to serve in the
capacity of President and Chief Executive Officer of the
Bank. The Agreement provides for initial compensation of
$55,000 subject to annual compensation reviews. Shawnee may
terminate the Agreement for cause or disability. In the
event of a change in control of Shawnee, Mrs. Robertson has
an option exercisable within thirty days of such change in
control, to resign her position and receive an amount equal
to twice her annual salary in effect at that time. In the
event she elects to remain with the resulting institution
after such a change in control, she also is given the option
to elect such payment within thirty days of (i) assignment
of duties inconsistent with her position as an executive
(ii) reduction in the ratio of her bonus to base
compensation under certain circumstances, or (iii) transfer
to a location outside of Kanawha County.
The proposed Employment Agreement for Mrs. Robertson
would have a revolving three year term commencing on the
Effective Date of the Merger at a salary not less than the
salary in effect for Mrs. Robertson as of the Effective Date
of the Merger. The agreement also requires Wesbanco South
Hills to provide the same benefits to Mrs. Robertson which
it provides to other executive employees, during the period
of her employment. The agreement contains a termination for
cause provision and a termination on death clause. In the
event of the death of the employee during the term of the
agreement, Wesbanco South Hills is required to pay to Mrs.
Robertson's spouse an amount equal to six months of her base
<PAGE> 25
salary at her then current base rate. In the event Wesbanco
South Hills attempts to terminate Mrs. Robertson's
employment other than for cause, or due to the death of the
employee, or by mutual consent with the employee, Mrs.
Robertson is entitled to receive an amount equal to the
greater of six months base salary or the base salary payable
under the remaining term of the agreement. Wesbanco is a
party to such contract and will unconditionally guarantee
the performance of the bank thereunder. The agreement also
provides that upon consummation of the Merger, Mrs.
Robertson shall serve in an executive capacity.
As of April 18, 1997, Wesbanco held no shares of
Shawnee Common Stock. Directors, executive officers and
affiliates of Wesbanco owned no shares of Shawnee Common
Stock as of such date. The Merger will have no effect on
the positions of the present directors and officers of
Wesbanco, and except for the stock ownership of Shawnee
described herein and for counsel fees paid to a director of
Wesbanco in the ordinary course of business in connection
with this transaction, no directors, officers or affiliates
of Wesbanco have any special interest in the Merger or are
receiving any special consideration or compensation as a
result of the Merger.
It is not anticipated that any outstanding transactions
between Shawnee or Wesbanco and their respective affiliates,
and any directors, officers, or principal shareholders of
Shawnee or Wesbanco or their respective associates,
including any outstanding loans or trust relationships, will
be affected by the Merger.
Opinion of LSC Financial Services, Inc.
As described in more detail under "Recommendation of
the Boards of Directors" and "Shawnee Reasons for the
Merger" above, the Board of Shawnee approved the Agreement
subject to receipt of an opinion that the terms of the
Merger were fair, from a financial point of view, to Shawnee
and its shareholders. On February 21, 1997, LSC Financial
Services, Inc. ("LSC Financial") rendered a definitive
written opinion to that effect. Shawnee may request LSC
Financial to update its opinion. The full text of LSC
Financial's opinion, which sets forth the assumptions made,
matters considered and limitations on the review undertaken
in connection with such opinion, is set forth below and
should be read in its entirety.
<PAGE> 26
LSC Financial Services, Inc.
Consultants to Financial Institutions
February 21, 1997
The Board of Directors
Shawnee Bank, Inc.
1011 Myers Avenue
Dunbar, WV 25064
Members of the Board:
You have requested our opinion as to the fairness, from a
financial point of view, to the shareholders of Shawnee
Bank, Inc. (Shawnee) of the Agreement and Plan of Merger
(the Agreement) between Shawnee, Wesbanco, Inc. (Wesbanco),
and its wholly owned subsidiary, Wesbanco South Hills.
Under the terms of the Agreement, each outstanding share of
Shawnee common stock will be converted into 10.094 shares of
Wesbanco common stock.
LSC Financial Services, Inc., as part of its investment
banking and bank consulting business, is regularly engaged
in the valuation of financial institution securities in
connection with various types of transactions, including
mergers, acquisitions and valuations for various other
purposes, and in determination of adequate consideration in
such transactions.
For purposes of this opinion, we reviewed and analyzed
information pertaining to the financial and operating
condition of Shawnee and Wesbanco. This review included,
but was not limited to: (i) the Agreement and Plan of
Merger; (ii) financial and other information which was
publicly available or provided to us by Shawnee and
Wesbanco; (iii) certain financial information relating to
the banking industry in general; (iv) the respective history
of dividends paid by the two institutions; (v) our
evaluation of future prospects for the merged institution;
(vi) terms and conditions of comparable merger transactions
and (vii) such other financial reviews, analyses, and
investigations as we deemed appropriate.
In rendering our opinion, we have relied on the accuracy of
information and representations made to us by Shawnee and
Wesbanco and their officers, directors, counsel, and other
agents. We have not independently verified the information
reviewed by us, and in rendering this opinion have relied
upon such information as being complete and accurate in all
material respects. LSC was not requested to, and did not,
solicit third party indications of interest in acquiring
Shawnee.
<PAGE> 27
The Board of Directors
Shawnee Bank, Inc. February 21, 1997
Page Two
We have assumed that the allowances for loan losses
indicated on the balance sheets of Shawnee and Wesbanco as
of December 31, 1995, are adequate to cover such losses. We
have not reviewed the loan files of Shawnee or Wesbanco.
We assumed that in the course of obtaining the necessary
regulatory approvals for the Merger, no restrictions will be
imposed on Wesbanco that would have a material adverse
effect on the contemplated benefits of the Merger to
Shawnee. We further assumed that no change would occur in
applicable law or regulation that would cause a material
adverse change in the prospects or operations of Wesbanco
after the Merger. We express no opinion as to the tax
consequences of the merger to Shawnee and its shareholders.
Based upon and subject to the foregoing, it is our opinion
as of the date hereof, that the exchange is fair, from a
financial point of view, to the shareholders of Shawnee
Bank, Inc.
Sincerely,
/s/ LSC Financial Services, Inc.
LSC Financial Services, Inc.
<PAGE> 28
LSC Financial is a nationally recognized, regional
investment banking firm headquartered in Valley Forge,
Pennsylvania, and is regularly engaged in the valuation of
banks and other financial institutions and their securities.
LSC Financial was retained by the Board of Directors of
Shawnee on December 18, 1996, to advise and assist
management in the analysis and evaluation of the acquisition
proposal from Wesbanco, including a review of Shawnee's
current and prospective financial position and its current
acquisition value, the evaluation of the financial terms of
the proposal for the Board of Directors, and, the rendering
of an opinion as to the fairness, from a financial point of
view, of the terms of the proposed Merger to Shawnee and its
shareholders. See "Recommendation of the Boards of
Directors" and "Shawnee Reasons for the Merger" above.
The Board of Directors selected LSC after reviewing
several candidates on the basis of its experience in the
valuation of financial institutions and their securities and
its familiarity with the commercial banking industry, bank
securities and merger and acquisition transactions in the
region and on the basis of cost. No limitations were
imposed by Shawnee or Wesbanco with respect to the opinion
rendered by LSC Financial, or the scope of its
investigation.
The terms of the Merger were not determined by LSC
Financial, but instead were established by the respective
boards of directors of Shawnee and Wesbanco.
LSC Financial arrived at its opinion after discussions
with senior officers of Shawnee and Wesbanco; a review of
pertinent financial information concerning Shawnee and
Wesbanco; a review of the trading history of Shawnee Common
Stock and Wesbanco Common Stock; a review of the dividend
record of Shawnee and Wesbanco; a comparison of the
financial terms of the Merger with the terms of other recent
business combinations involving banks and bank holding
companies; a comparison of financial and market information
of selected banks and bank holding companies with that of
Shawnee and Wesbanco; a review of the Stockholder Agreement,
the Agreement, and the Proxy Statement/Prospectus; and such
other analyses, studies and investigations as LSC Financial
deemed relevant.
In rendering its opinion, LSC Financial assumed that in
the course of obtaining the necessary regulatory approvals
for the Merger, no restrictions will be imposed on Wesbanco
that would have a material adverse effect on the
contemplated benefits of the Merger to Shawnee. LSC
Financial also assumed that there would not occur any change
in applicable law or regulation that would cause a material
adverse change in the prospects or operations of Wesbanco
after the Merger.
LSC Financial did not independently verify the
information used in arriving at its opinion, but assumed the
accuracy and completeness of all such information. Also,
LSC Financial did not make or obtain any independent
appraisal of the assets or liabilities of Shawnee or
Wesbanco. LSC was not requested to, and did not, solicit
third party indications of interest in acquiring Shawnee.
<PAGE> 29
For its financial services, including rendering the
opinion included herein, LSC Financial will receive a fee of
$15,000, plus expenses, of which $10,000 has been paid and
of which $5,000 will be paid upon approval of the Merger by
Shawnee's shareholders. An additional fee will be payable
for any update to LSC Financial's opinion. Shawnee has also
agreed to reimburse LSC Financial for its reasonable out-of-
pocket expenses and to indemnify LSC Financial against
certain liabilities, including liabilities arising under
Federal Securities Laws, which may arise in connection with
the performance of its services for Shawnee. The amount of
the consideration was determined as a result of negotiations
between Shawnee and LSC Financial.
LSC Financial has had no other material relationship
with Shawnee, Wesbanco, or any of their respective
affiliates in the past two years, except that it served as
financial advisor for Bank of Weirton which was acquired by
Wesbanco on August 30, 1996.
LSC FINANCIAL'S OPINION IS DIRECTED ONLY TO THE
EXCHANGE RATIO IN THE MERGER AND DOES NOT CONSTITUTE A
RECOMMENDATION TO ANY SHAWNEE SHAREHOLDER AS TO HOW SUCH
SHAREHOLDER SHOULD VOTE AT THE SHAWNEE SPECIAL MEETING. THE
SUMMARY OF THE OPINION OF LSC SET FORTH IN THIS PROXY
STATEMENT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
FULL TEXT OF SUCH OPINION.
LSC Financial's opinion was based solely upon
information available to it and provided by Shawnee and
Wesbanco, the economic market and other conditions as they
existed as of the date of its opinion was rendered.
Effective Time
The Merger and the Bank Merger will become effective
(the "Effective Time") on the effective date specified in
the Certificate of Merger to be issued by the West Virginia
Secretary of State, which will occur as soon as practicable
after the closing (the "Closing"). It is anticipated that
the Closing will be held and such Certificate will be issued
on the date which is the latest of: (i) the second business
day after the meeting of the shareholders of Shawnee at
which the Agreement is approved; (ii) the fifteenth (15th)
day after the approval of the Merger by the Federal Deposit
Insurance Corporation ("FDIC"); (iii) the day after any stay
of the FDIC's approval of the Merger shall be vacated or
shall have expired or the day after any injunction against
the closing of the Merger shall be lifted, discharged or
dismissed; (iv) the day after the approval of the
transaction by the West Virginia Department of Banking and
Financial Institutions; (v) the second business day after
the date on which the conditions set forth in the Agreement
are satisfied or waived; or (vi) such other date as shall be
mutually agreed to by Wesbanco and Shawnee. It is presently
anticipated that if the shareholders of Shawnee approve the
Agreement at the Special Meeting, and all other conditions
to the Merger are satisfied or waived, the Merger will
become effective on or about June 30, 1997. See "Conditions
and Covenants" and "Termination" below.
<PAGE> 30
Conversion of Shawnee Common Stock
Each share of Shawnee Common Stock issued and
outstanding immediately prior to the Effective Time, other
than shares held by dissenting Shawnee shareholders and
shares held by Shawnee or Wesbanco, other than in a
fiduciary capacity, will, at the Effective Time, by virtue
of the Merger and without any action on the part of the
holder thereof, be converted into 10.094 shares of Wesbanco
Common Stock.
All issued and outstanding shares of Wesbanco South
Hills will continue to be held by Wesbanco and will be the
issued and outstanding shares of the Surviving Corporation.
No certificates for fractional shares of Wesbanco
Common Stock will be issued to any holder of Shawnee Common
Stock in the Merger. Wesbanco will pay cash in lieu of any
fractional share to which any shareholder of Shawnee Common
Stock may otherwise be entitled in an amount based on a
value of $30.50 per whole share of Wesbanco Common Stock or,
at the option of such shareholder, such shareholder may
purchase the remaining fraction of such share from Wesbanco
at the same price and receive a whole share of Wesbanco
Common Stock.
For a discussion of the treatment of shares held by
Shawnee shareholders who elect to exercise their dissenters'
rights, see "Rights of Dissenting Shareholders" below, and
for a discussion of the treatment of shares held by Shawnee
shareholders who elect to receive cash, see "Election to
Receive Cash" below.
Exchange of Certificates
As promptly as practicable after the Effective Time of
the Merger, each holder of any outstanding certificate or
certificates for Shawnee Common Stock (other than Shawnee
shareholders who exercise their dissenters' rights) upon
surrender of their certificates, together with a duly
executed letter of transmittal, to Wesbanco Bank Wheeling
("Wesbanco Wheeling"), which is acting as Exchange Agent for
Wesbanco, shall be entitled to receive in exchange therefor
a certificate or certificates representing the number of
whole shares of Wesbanco Common Stock, into which the shares
of outstanding Shawnee Common Stock theretofore represented
by the certificate or certificates so surrendered shall have
been converted, together with a check for cash in lieu of
fractional shares of common stock or, if the proper amount
of cash is submitted for the remaining fraction, an
additional whole share of Wesbanco Common Stock. See
"Conversion of Shawnee Common Stock" above.
Whenever a dividend is declared by Wesbanco on Wesbanco
Common Stock after the Effective Date, the dividend will
apply to all shares of Wesbanco Common Stock into which
shares of Shawnee Common Stock have been converted by virtue
of the Merger. See "Comparative Stock Prices and Dividends".
No former Shawnee shareholder will be entitled to
<PAGE> 31
receive such dividend, however, until he or she has
exchanged the certificates representing his or her Shawnee
Common Stock for certificates representing Wesbanco Common
Stock, upon which exchange he or she will be entitled to
receive such dividend (without interest thereon and less the
amount of taxes, if any, which may have been imposed or paid
thereon).
SHAREHOLDERS OF SHAWNEE SHOULD NOT RETURN CERTIFICATES
REPRESENTING SHAWNEE COMMON STOCK WITH THE ENCLOSED PROXY
CARD. Instructions for surrendering such certificates will
be sent to shareholders of Shawnee promptly after the
Effective Time.
Wesbanco and Wesbanco South Hills Shareholder Approval:
Wesbanco shareholder approval of the Agreement is not
required under West Virginia corporation law or the Articles
of Incorporation of Wesbanco.
The Boards of Directors of Wesbanco and Wesbanco South
Hills have approved the Agreement. Wesbanco has also agreed,
as sole shareholder of Wesbanco South Hills, to vote all of
the outstanding shares of said corporation in favor of the
Merger.
Effects of the Merger: The Surviving Corporation
At the Effective Time of the Merger, the separate
existence of Shawnee will cease. Wesbanco South Hills will
be the surviving corporation (sometimes referred to as the
"Surviving Corporation"). The assets, liabilities, and
capital of Shawnee will be merged into Wesbanco South Hills
and these assets, liabilities and capital will then
constitute part of the assets, liabilities and capital of
Wesbanco South Hills. Wesbanco South Hills will continue to
operate under its Articles of Incorporation and Bylaws
effective as of the day of the Merger.
The Articles of Incorporation and Bylaws of Wesbanco
will be unaffected by the Merger, and the individuals who
served as directors and officers of Wesbanco immediately
prior to the Merger will continue to serve as directors and
officers of Wesbanco after the Effective Time, until their
successors shall have been elected and qualified or until
their resignation or removal according to law. For
information concerning Wesbanco's current management, see
Wesbanco's Proxy Statement for its annual meeting of
stockholders held on April 16, 1997, which has been
incorporated by reference into this Proxy
Statement/Prospectus and a copy of which is being delivered
herewith. See "Incorporation Of Certain Documents By
Reference".
Shawnee will be merged with and into Wesbanco South
Hills, which is a wholly-owned subsidiary of Wesbanco in the
Merger. While Wesbanco has advised Shawnee that the
officers and employees of Shawnee immediately after the
Merger will be the same as the officers and employees now
holding such positions, there are no agreements to that
effect, except as noted in the Brenda H. Robertson
employment contract. See "The Merger - Interest of Certain
Persons in the Merger". The present executive officers of
Shawnee will also become executive officers of Wesbanco
South Hills. Wesbanco and Wesbanco South Hills have agreed
to elect to the Board of Directors of Wesbanco South Hills,
as of the Effective Date, R. Brawley Tracy and Brenda H.
<PAGE> 32
Robertson. It is anticipated that after the Effective Date,
there will be a close liaison and a high level of
cooperation among all Wesbanco subsidiaries, including the
officers of Shawnee, which can be expected to result in
improved services to their respective customers and greater
efficiency.
If the Merger had occurred as of December 31, 1996,
Shawnee would have, on a pro forma consolidated basis,
constituted 2.2% of deposits, 2.3% of assets, 2.4% of
equity, and its shareholders would have held 3.1% of the
total outstanding shares of Wesbanco on a pro forma
consolidated basis. In addition, for the twelve months
ended December 31, 1996, Shawnee would have contributed 2.2%
of net interest income and 2.7% of net income to Wesbanco on
a pro forma consolidated basis. These percentages reflect
the relative size of Shawnee as of December 31, 1996. These
percentages 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.
However, Wesbanco is not presently involved in any other
material merger transactions for which definitive agreements
or letters of intent have been executed, other than the
recently completed acquisition of Vandalia National
Corporation which is reflected in the financial information.
See "Pro Forma Data" and "Information With Respect To
Wesbanco - Recent Acquisitions".
Conditions and Covenants
The Agreement provides that the Merger will not take
place unless and until certain conditions are met, or, in
some cases, waived.
Approval by Shawnee Shareholders
Approval by the affirmative vote of the holders of at
least a majority of the shares of Shawnee Common Stock
entitled to vote at the Special Meeting of Shawnee, and
approval by Wesbanco as sole shareholder of Wesbanco South
Hills (which approval Wesbanco has agreed to give) is
required by law and must be obtained before the Merger can
be consummated. As of the Record Date, April 18, 1997, the
directors and officers of Shawnee beneficially owned, in the
aggregate, approximately 20,297 shares or 63.37% of the
outstanding shares of Shawnee Common Stock . See "Voting
Information - Voting and Revocation of Proxies" and "The
Merger - Interest of Certain Persons in the Merger" above,
and "Information with Respect to Shawnee - Ownership of
Securities by Directors and Officers".
Government Approvals
The completion of the Merger is also conditioned upon
the approval of the acquisition and Merger by the West
Virginia Department of Banking, and the approval of the
FDIC.
Applications for approval of the Merger were filed with
the FDIC and the West Virginia Department of Banking on
January 27, 1997, and were confirmed as filed by the FDIC on
the 14th day of February, 1997, and the Department of
Banking on the 29th day of January, 1997.
<PAGE> 33
The Merger was approved by the West Virginia Board of Banking
and Financial Institutions on March 10, 1997, and the FDIC on
April 18, 1997.
The mergers could not have proceeded in the absence of
the requisite regulatory approvals. Although there was no
assurance that these regulatory approvals would have been
obtained, the management of Wesbanco and Shawnee believed
that the required governmental approvals would be obtained.
Covenants
In the Agreement, Shawnee agrees to take certain
actions and to refrain from taking certain actions in
connection with its business from December 19, 1996, until
the Effective Time or until the Agreement is terminated.
Among other things, the Agreement generally requires Shawnee
to conduct its business only in the ordinary course and in a
manner consistent with past practice and to keep Wesbanco
advised of any material adverse changes in the financial
condition, assets, business or operations of Shawnee. The
Agreement further prohibits Shawnee from making certain
distributions to its shareholders and engaging in certain
corporate transactions or transactions with others outside
of the ordinary course of its business operations without
the consent of Wesbanco, including with certain exceptions,
(i) issuing shares of its Common Stock, or warrants,
options, convertible securities or the rights to purchase
the same; (ii) issuing long-term debt; (iii) changing its
authorized capital stock; (iv) purchasing or otherwise
acquiring shares of its capital stock; (v) entering into or
amending any employment, pension, retirement, stock option,
profit sharing, deferred compensation or similar plan in
respect of any of its directors, officers or employees or
increasing its contribution to any such plan except as
provided in the Agreement; (vi) acquiring or merging with
any other company; (vii) mortgaging, pledging or subjecting
to a lien or disposing of any of its material assets; (viii)
amending its Articles of Incorporation or Bylaws; or (ix)
taking any action materially and adversely affecting the
financial condition, business, properties or operations of
Shawnee.
The Agreement also prohibits dividends or other
distributions on Shawnee Common Stock other than cash
dividends which do not in the aggregate exceed $9.00 per
share of Shawnee Common Stock or 50% of the after-tax income
of Shawnee for the tax years in which paid.
Shawnee further agrees in the Agreement that it will
not, and will not permit any person acting on behalf of it,
to directly or indirectly, take any action to support,
encourage or accept any offer from any other person to
acquire Shawnee, or its assets. Shawnee further agrees to
notify Wesbanco if any such offer is made.
Other Conditions
The consummation of the Merger is subject to a number
of further conditions which must be met or may be waived by
the party or parties to be benefited thereby.
<PAGE> 34
The obligations of both Wesbanco and Shawnee are
subject to a number of conditions, including: (i) the
effectiveness of the Registration Statement and compliance
with applicable state securities laws; (ii) the receipt of
all required consents and approvals and the expiration of
any related delay periods; (iii) holders of no more than 10%
of the shares of Shawnee Common Stock entitled to vote at
its Special Meeting shall have filed written objections to
the Merger as dissenting shareholders in compliance with
West Virginia law and not voted in favor of the Agreement;
(iv) the receipt of an opinion of counsel or ruling on
certain tax consequences of the Merger (See "Certain Federal
Income Tax Consequences of the Merger" below); (v) the
absence of any action, proceeding, regulation or legislation
to enjoin, restrain, prohibit, or to obtain substantial
damages with respect to, the Agreement or the consummation
of the transactions contemplated thereby; and (vi) the
performance by the other party of its obligations under the
Agreement.
Wesbanco's obligations are also subject to other
conditions to be met by Shawnee including: (i) the accuracy
of certain representations and warranties made by Shawnee
(including, among other things, representations as to
organization, authority to enter into the Agreement,
financial statements, absence of material litigation,
capitalization, material contracts, ERISA and tax matters,
adequacy of the loan loss reserve, and the absence of
materially adverse changes in areas such as financial
condition, results of operations, material assets,
authorized, issued or outstanding capital stock, certain
personnel expenses, and material expenditures for assets or
other material obligations outside of the ordinary course of
business) as of the Closing; (ii) opinions of counsel on
such matters as organization, authority and stock issuances;
(iii) receipt, or best efforts of Shawnee to cause the
receipt of, letters from certain affiliates whose stock will
be restricted (See "Resales of Wesbanco Common Stock"
below); and (iv) absence of any suit, action or proceeding
against Shawnee or its officers or directors in their
capacity as such which, in the reasonable judgment of
Wesbanco would, if successful, have a material adverse
effect on the financial condition or operations of Shawnee.
Shawnee's obligations are also subject to certain other
conditions to be met, in part, by Wesbanco, including: (i)
the accuracy of certain representations and warranties made
by Wesbanco (including, among other things, representations
as to organization, actions to be taken in connection with
Wesbanco South Hills, authority to enter into the Agreement
and to issue shares in the Merger, financial statements,
absence of material litigation, capitalization, material
contracts, ERISA and tax matters, adequacy of loan loss
reserves, and the absence of materially adverse changes in
areas such as financial condition, results of operations,
material assets, authorized, issued or outstanding capital
stock, certain changes in Articles or Bylaws, and material
expenditures for assets or other material obligations
(outside of the ordinary course of business) as of the
Closing; (ii) opinions of counsel on such matters as
organization, authority, and the legality of the shares to
be issued in the Merger; (iii), the absence of any suit,
action or proceeding against Wesbanco, any of its
subsidiaries, or their officers or directors in their
capacities as such which, in the reasonable judgment of
Shawnee, would, if successful, have a material adverse
effect on the financial condition or operations of Wesbanco
or any of its subsidiaries; (iv) the furnishing of a
fairness opinion by LSC Financial (See "Opinion of LSC
Financial Services, Inc." above), and at Shawnee's option,
an update of said opinion as of the
<PAGE> 35
closing if the closing is held more than five days after
the Shawnee Special Meeting; (v) unless waived by Shawnee,
the market value of Wesbanco Common Stock shall fall below
$27.00 per share as of the closing date (market value defined
to mean the average bid price for the 30 calendar days preceding
five business days before closing; and (vi) the closing date has
not occurred by December 19, 1997.
Waiver and Amendment
The Agreement provides that any of the terms or
conditions thereof may be waived by action of the Board of
Directors of the party which is, or the shareholders of
which are, entitled to the benefits thereof. The parties
may also amend or modify the Agreement in whole or in part
at any time prior to Closing, provided that the conversion
ratio for Shawnee Common Stock in the Merger or the cash
price therefor, and any other material terms of the Merger
cannot be amended after its Special Meeting, unless the
amended terms are resubmitted to the shareholders of
Shawnee.
Termination
The Agreement and the transactions contemplated thereby
may be terminated at any time prior to the Effective Time by
mutual consent of Shawnee and Wesbanco or by either of them
if: (i) any of the conditions to that party's obligation to
close have not been met or waived; (ii) the Merger would
violate any non-appealable final order, decree or judgment
of any court or governmental body having competent
jurisdiction; (iii) the requisite vote of the shareholders
is not obtained; (iv) the Closing has not been held by
December 19, 1997; or (v) the requisite market price for
Wesbanco Common Stock is not maintained.
The Stockholder Agreement
In conjunction with the Agreement, Wesbanco entered
into a Stockholder Agreement dated as of December 19, 1996,
with the directors, one of whom is the chief executive
officer, of Shawnee. Each such director and the chief
executive officer of Shawnee, in his capacity as a
shareholder of Shawnee agreed, among other things, not to
sell, pledge, transfer or otherwise dispose of his shares of
Shawnee stock prior to the Special Meeting of shareholders
at which the Merger is considered and to vote such shares of
stock in favor of the Merger. The directors of Shawnee own
beneficially 20,297 shares of Shawnee Common Stock
representing 63.37% of the outstanding shares, and,
accordingly, can provide the requisite vote to approve the
Merger.
Rights of Dissenting Shareholders
Holders of Shawnee Common Stock who object to the
Merger and comply with Section 31-1-123 of the West Virginia
Corporation Act (the "Act"), are entitled to payment of the
fair value of their shares (each such shareholder, a
"Dissenting Shareholder"). The fair value of the shares
held by a Dissenting Shareholder is determined as of the day
prior to the date on which the Shawnee shareholder vote on
the Agreement was taken without regard to any appreciation
or depreciation in anticipation of such corporate action.
<PAGE> 36
The following is a brief summary of the steps necessary
to be taken by a shareholder to perfect his or her rights
under West Virginia law to be paid the fair value of his or
her shares as a Dissenting Shareholder. 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 31-1-123 of the Act,
which is reproduced in full as Appendix I to this Proxy
Statement/Prospectus.
1. Written Objection to the Merger Must Be Filed. A
Dissenting Shareholder must file written objection to the
proposed Merger with Shawnee prior to or at the Special
Meeting.
2. Shares Must Not Be Voted in Favor of the Merger.
A Dissenting Shareholder must not vote his or her shares of
Shawnee Common Stock in favor of the Merger. It is not
required that they be voted against the Merger; however, a
vote in favor of the Merger will preclude the exercise of
dissenters' rights.
3. Shareholders Must Make Written Demand for Fair
Value. A Dissenting Shareholder must make written demand on
Shawnee or the Surviving Corporation for payment of the fair
value of his or her shares of Shawnee Common Stock 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. A Dissenting Shareholder who fails
to make such written demand within the 10-day period shall
be bound by the terms of the Agreement. The written demand
may be addressed to Brenda H. Robertson, President and Chief
Executive Officer, Shawnee Bank, Inc., 1011 Myers Avenue,
Dunbar, West Virginia, 25064. Once the demand has been
made, it cannot be withdrawn without the permission of
Shawnee or the Surviving Corporation.
4. Rights of a Dissenting Shareholder. Any
shareholder making such demand shall thereafter be entitled
only to payment as a Dissenting Shareholder as provided by
law and shall not be entitled to vote or to exercise any
other rights of a shareholder. No such demand may be
withdrawn without the consent of Shawnee or the Surviving
Corporation. If, however, such demand is withdrawn upon
consent, or if the proposed Merger is abandoned or
rescinded, or if the shareholders revoke the authority to
effect the Merger, or if no demand or petition for the
determination of fair value by a court of general civil
jurisdiction has been made or filed within the time set
forth under Paragraph 7 below, or if a court of general
civil jurisdiction determines that such shareholder is not
entitled to the relief as a Dissenting Shareholder, then the
right of such shareholder to be paid the fair value of his
or her shares ceases and his or her status as a shareholder
shall be restored, without prejudice to any corporate
proceedings which may have been taken during the interim.
5. Dissenting Shareholder Must Surrender
Certificate(s). A Dissenting Shareholder must surrender his
or her stock certificates to Shawnee within 20 days after
demanding payment for his or her shares in order for Shawnee
to place a notation on the stock certificates that such
demand has been made. A Dissenting Shareholder's failure to
surrender his or her certificate
<PAGE> 37
shall, at Shawnee's option, terminate his or her dissenters'
rights unless a court, for good cause shown, directs
otherwise.
6. Shawnee Must Make Offer. Within 10 days after the
Effective Date of the Merger, the Surviving Corporation must
give written notice thereof and make a written offer to each
Dissenting Shareholder who has made written demand ( as set
forth in Paragraph 3 above) to pay for the Dissenting
Shareholder's shares at a specified price deemed by it to be
the fair value thereof, accompanied by a balance sheet of
Shawnee as of the latest available date (not more than
twelve months prior to the making of the offer) and a profit
and loss statement of Shawnee for the twelve month period
ended on the date of such balance sheet. If within 30 days
after the Effective Date, a Dissenting Shareholder and
Shawnee agree upon the fair value, the Dissenting
Shareholder shall be entitled to receive the agreed payment
for his or her shares within 90 days after the Effective
Date upon surrender of such shares. Upon payment of the
agreed value, the Dissenting Shareholder shall cease to have
any interest in such shares.
7. Filing Suit. If a Dissenting Shareholder and
Shawnee fail to agree upon the fair value within 30 days
after the Effective Date, Shawnee on its own initiative may,
or upon written demand from the Dissenting Shareholder
shall, within 30 days after receipt of such request, file a
complaint in the Circuit Court of Kanawha County, West
Virginia, within 60 days after the Effective Date requesting
that the fair value of such shares be found and determined.
In the event of the failure of Shawnee to institute such
proceeding, the Dissenting Shareholder may do so in the name
of Shawnee.
The foregoing does not purport to be a complete
statement of the procedures to be followed by shareholders
desiring to exercise dissenters' rights. To exercise such
rights, strict adherence to the provisions of those sections
of the law of the State of West Virginia referred to above
is required. EACH SHAREHOLDER WHO MAY DESIRE TO EXERCISE
SUCH RIGHTS SHOULD CONSULT SUCH LAWS AND ADHERE TO THE
PROVISIONS THEREOF. As in all legal matters, you would be
well advised to seek the guidance of an attorney at law.
The receipt of cash for shares of Shawnee Common Stock
held by a Dissenting Shareholder will be a taxable
transaction to the Dissenting Shareholder for Federal income
tax purposes. The amount of gain or loss and its character
as ordinary or capital gain or loss will be determined in
accordance with Sections 302 and 1001 (and in certain cases,
other provisions) of the Internal Revenue Code of 1986. Any
Shawnee shareholder contemplating the possible exercise of
dissenters' rights is urged to consult a tax advisor as to
the Federal (and any applicable state and local) income tax
consequences resulting from such an election.
Resales of Wesbanco Common Stock
The shares of Wesbanco Common Stock issuable upon the
consummation of the Merger will be registered with the
Commission under the Securities Act of 1933 (the "Securities
Act"). Under current law, each holder of Shawnee Common
Stock who is not an affiliate of Wesbanco or Shawnee within
the meaning of Rule 144 or 145 under the Securities Act, may
sell or transfer
<PAGE> 38
any shares of Wesbanco Common Stock such holder receives in
the Merger without need of further registration under the
Securities Act. This Proxy Statement/Prospectus does not cover
and may not be used in connection with any resales of Wesbanco
Common Stock by such affiliates.
Shares of Wesbanco Common Stock issued to Shawnee
shareholders who may be deemed to be affiliates of Shawnee
before the Merger or affiliates of Wesbanco after the Merger
may be resold only in transactions permitted by Rules 145
and 144 under the Securities Act, pursuant to an effective
registration statement or in transactions exempt from
registration. Generally a shareholder who is an executive
officer, director or a principal shareholder or other
control person of a company may be deemed to be an affiliate
for these purposes, while 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 Shawnee (i) deliver to Wesbanco a
schedule specifying the persons who may be deemed to be
"affiliates" of Shawnee within the meaning of Rule 145 under
the Securities Act ("Affiliates"); and (ii) use its best
efforts to cause each Affiliate to deliver to Wesbanco,
prior to Closing, a letter, substantially in the form of
Exhibit A to the Agreement (which is set forth in Appendix
II hereto) providing that the shares of Wesbanco Common
Stock issued pursuant to the Merger in exchange for shares
of Shawnee Common Stock held by or for the benefit of such
Affiliate (a) will not be sold or otherwise disposed of
except in accordance with Rule 145 (where the Affiliate has
given Wesbanco evidence of compliance with the Rule
reasonably satisfactory to it) or pursuant to an effective
registration statement under the Securities Act unless such
person has furnished to Wesbanco a no-action or interpretive
letter from the Commission 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; and (b) may be
represented by certificates which bear an appropriate
legend.
Expenses
Wesbanco and Shawnee will each bear and pay their
respective costs and expenses incurred in connection with
the Merger; however, all costs and expenses incurred in the
printing and mailing of the Proxy Statement/Prospectus are
being borne by Wesbanco. If the Merger is consummated, any
expense incurred but not paid prior to the Effective Time
will become the obligation of the Surviving Corporation by
reason of the Merger.
Accounting Treatment
The Merger will be accounted for as a "purchase" by
Wesbanco. The results of this accounting treatment are
shown in the summary unaudited combined pro forma financial
data included elsewhere in this Proxy Statement/Prospectus.
See "Pro Forma Data".
<PAGE> 39
Certain Federal Income Tax Consequences of the Merger
The Merger is conditioned upon receipt of a ruling from
the Internal Revenue Service or an opinion of counsel, as to
the principal federal income tax consequences expected to
result from the Merger. It is anticipated that an opinion
of counsel will be provided by counsel for Shawnee; Kay,
Casto, Chaney, Love & Wise as to the tax consequences of the
Merger.
The following is a summary of such opinion. This
summary is qualified in its entirety by reference to the
full text of such opinion, including the assumptions upon
which such opinion is based. Such opinion is included as an
exhibit to the Registration Statement. Neither such opinion
nor this summary address any tax considerations under
foreign, state or local laws, or the tax considerations to
shareholders other than individual United States citizens
who hold their shares of Shawnee Common Stock as a capital
asset within the meaning of Section 1221 of the Code.
No rulings have been requested from the Internal
Revenue Service as to the federal income tax consequences of
the Merger. Shawnee shareholders should be aware that the
opinion of Kay, Casto, Chaney, Love & Wise is not binding on
the Internal Revenue Service and the Internal Revenue
Service is not precluded from taking a different position.
Shawnee shareholders should also be aware that some of the
tax consequences of the Merger are governed by provisions of
the Code as to which there are no final regulations and
little or no judicial or administrative guidance. The
opinion of Kay, Casto, Chaney, Love & Wise is based upon the
federal income tax laws as in effect on the date of such
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.
The federal income tax consequences discussed below are
conditioned upon, and the opinion of Kay, Casto, Chaney,
Love & Wise is based upon, the accuracy, as of the date
hereof and at, as of and after the effective time of the
Merger, of certain assumptions, including, but not limited
to, the following (taking into account for purposes hereof
all events that are contemplated under the agreement): (A)
that, pursuant to the Merger, the former shareholders of
Shawnee receive shares of Wesbanco Common Stock having a
value on the date on which the effective time of the Merger
occurs of not less than fifty percent (50%) of the value of
Shawnee Common Stock as of the same date; (B) that following
the Merger, Wesbanco will continue the historic business of
Shawnee or use a significant portion of Shawnee's historic
business assets in a business; and (C) that a bona fide
corporate business purpose exists for the Merger.
Wesbanco and Shawnee believe that all of the foregoing
assumptions are accurate as of the date hereof, and will be
accurate at, as of and after the effective time of the
Merger. If either Wesbanco or Shawnee learns before the
effective time of the Merger that such assumptions are false
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.
<PAGE> 40
Kay, Casto, Chaney, Love & Wise will render an opinion
to Wesbanco and Shawnee, based upon the assumptions set
forth therein, that the Merger will have the following
federal income tax consequences:
(i) The statutory merger of Shawnee with
Wesbanco South Hills will constitute a
reorganization within the meaning of Section
368(a)(1) of the Internal Revenue Code of 1986
("IRC"), and Wesbanco, Shawnee, and Wesbanco
South Hills 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, Shawnee or Wesbanco South Hills
as a result of the transactions contemplated
in the Agreement;
(iii) No gain or loss will be
recognized by the shareholders of Shawnee as a
result of their exchange of Shawnee 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.
(iv) The holding period of the Wesbanco
Common Stock received by each holder of
Shawnee Common Stock will include the period
during which the stock of Shawnee surrendered
in exchange therefor was held, provided such
stock was a capital asset in the hands of the
holder on the date of exchange;
(v) The Federal Income Tax basis of the
Wesbanco Common Stock received by each holder
of Shawnee Common Stock will be the same as
the basis of the stock exchanged therefore;
and
(vi) A Shawnee shareholder who dissents
from the proposed Merger and receives solely
cash in exchange for that shareholder's shares
of Shawnee Common Stock will be treated as
having received that cash as a distribution in
redemption of those shares subject to the
provisions and limitations of Section 302 of
the Code. If the distribution is eligible for
treatment as a distribution in redemption of
that shareholder's shares, that shareholder
will recognize gain to the extent of the
consideration received less that shareholder's
adjusted basis in those shares.
(vii) The receipt by a Shawnee
shareholder of cash in lieu of a fractional
share of Wesbanco Common Stock will be treated
as if that fractional share was issued to that
holder in the Merger and thereafter redeemed
by Wesbanco for cash. The receipt of cash by
a Shawnee shareholder will be treated as a
distribution by Wesbanco in full payment in
exchange for the fractional share as provided
in Section 302(a) of the Code. If the
distribution is eligible for treatment as a
distribution in redemption of
<PAGE> 41
a Shawnee shareholder's fractional share, that
shareholder will recognize gain to the extent
of the consideration received less that
shareholder's allocable adjusted basis in that
fractional share.
BECAUSE CERTAIN TAX CONSEQUENCES OF THE MERGER MAY VARY
DEPENDING UPON THE PARTICULAR CIRCUMSTANCES OF EACH
SHAREHOLDER AND OTHER FACTORS, EACH SHAREHOLDER IS URGED TO
CONSULT SUCH SHAREHOLDER'S OWN TAX ADVISOR TO DETERMINE THE
PARTICULAR TAX CONSEQUENCES OF THE MERGER TO THAT
SHAREHOLDER, INCLUDING THE APPLICABILITY AND EFFECT OF ANY
STATE, LOCAL, OR FOREIGN INCOME, PROPERTY, TRANSFER AND
OTHER TAX LAWS.
<PAGE> 42
COMPARATIVE STOCK PRICES AND DIVIDENDS
Wesbanco Stock Prices and Dividends
On May 11, 1987, Wesbanco Common Stock became quoted on
the Nasdaq Stock Market under the symbol WSBC. The
following Wesbanco stock prices represent the range of
published quotations by the Nasdaq Stock Market during each
quarter and the quarterly cash dividends per share on
Wesbanco Common Stock declared by Wesbanco. The most recent
high and low prices on Wesbanco Common Stock were $34.00 and
$33.00 as of April 18, 1997.
Stock Price Range and Dividends Paid
Wesbanco(1)
-----------
Cash Dividends
High Low Paid Per Share
---- --- --------------
1995: First Quarter $25.75 $22.75 $.23
Second Quarter $26.50 $23.25 $.23
Third Quarter $29.50 $25.75 $.25
Fourth Quarter $30.00 $26.75 $.25
1996: First Quarter $28.75 $26.25 $.26
Second Quarter $27.25 $25.75 $.26
Third Quarter $28.50 $26.25 $.28
Fourth Quarter $32.50 $27.50 $.28
1997: First Quarter $33.25 $31.75 $.29
(1) On December 18, 1996, the date immediately
preceding public announcement of the
proposed Merger, the published high and low
price reported by the Nasdaq Stock
Market for Wesbanco stock was $31.25 and $30.50,
respectively.
On February 20, 1997, Wesbanco's Board of Directors
declared a first quarter dividend of $.29 per share, with a
record date of March 14, 1997, payable April 1, 1997.
Wesbanco Common Stock Dividend Policy
It has been the policy of Wesbanco to declare and pay
cash dividends on a quarterly basis. However, declaration
and payment of future dividends will depend upon the
earnings of Wesbanco and its subsidiaries, their financial
condition and other factors, including applicable
governmental regulations and policies. The principal
sources of Wesbanco's income are dividends from its
subsidiary banks. For a description of parent company
liquidity, see "Index to Financial Statements-Wesbanco."
<PAGE> 43
Dividends may be paid on Wesbanco Common Stock at the
discretion of Wesbanco's Board of Directors out of any funds
legally available therefor. 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 its outstanding shares, out of capital surplus,
provided, however, that in no event may dividends be paid if
Wesbanco is at the time insolvent or would be insolvent
after payment of such dividends. The amount and timing of
any future dividends will depend upon the earnings of
Wesbanco and its subsidiaries, their financial condition,
and other relevant factors. See "Government Regulation -
Dividend Restrictions".
Shawnee Stock Price Range and Dividends
There is no established public trading market for
Shawnee Common Stock; and Shawnee is not aware of any
trades by private individuals or organizations in its stock
during the periods presented. The information below is
compiled from information furnished by various broker
sources as reported to management of Shawnee, although no
attempt has been made to verify or determine the accuracy of
the information furnished to Shawnee. This information is
based solely on that of which management is aware.
The following table sets forth the range of high and
low bid and asked prices per share for Shawnee Common Stock
and the cash dividends declared per share for the periods
indicated:
Stock Price Range Cash
----------------- Dividends
Paid Per
High Low Share
---- --- ----------
1995 First Quarter $80.00 $80.00 -0-
Second Quarter $80.00 $80.00 -0-
Third Quarter None None -0-
Fourth Quarter None None $4.50
1996 First Quarter None None -0-
Second Quarter None None -0-
Third Quarter None None -0-
Fourth Quarter $90.00 $90.00 $9.00
1997 First Quarter None None -0-
On December 18, 1996, the last business day immediately
preceding public announcement of the proposed Merger, there
were no high or low prices reported for Shawnee Common Stock
and no trades of which Shawnee is aware. On April 18, 1997,
the pro forma equivalent price per share for Shawnee Common
Stock, based on the price of Wesbanco
<PAGE> 44
Common Stock on that date, was $343.19. As of April 18, 1997,
Shawnee had approximately 196 shareholders of record of its common
stock.
Shawnee Dividend Policy
It has been the policy of Shawnee to pay cash dividends
on Shawnee Common Stock annually in December of each year.
However, the declaration and payment of future dividends
will depend upon the earnings of Shawnee, its financial
condition, and other factors, including applicable
governmental regulations and policies. The principal source
of Shawnee's income is from its banking operations. See
"Index to Financial Statements - Shawnee".
Dividends may be paid on Shawnee Common Stock at the
discretion of Shawnee's Board of Directors out of any funds
legally available therefor. 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 the holders
of a majority of its outstanding shares, out of capital
surplus, provided, however, that in no event may dividends
be paid if Shawnee is at the time insolvent or would be
insolvent after payment of such dividends. The amount and
timing of any future dividends will depend upon the earnings
of Shawnee, its financial condition and other relevant
factors. See "Government Regulation - Dividend
Restrictions".
The Agreement provides that Shawnee may not pay or
declare dividends or other distributions on Shawnee Common
Stock other than cash dividends which do not in the
aggregate exceed the lesser of $9.00 per share or 50% of the
after-tax income of Shawnee for the tax year in which paid.
See "The Merger - Conditions and Covenants".
COMPARATIVE RIGHTS OF SHAREHOLDERS
Description of Wesbanco Capital Stock
The authorized capital stock of Wesbanco consists of
25,000,000 shares of common stock of the par value of
$2.0833 per share, and 1,000,000 shares of preferred stock
without par value. The shares of Wesbanco Common Stock now
outstanding are fully paid and nonassessable. As of April
18, 1997, there were approximately 4,234 holders of record
of the common stock of Wesbanco. Of the 25,000,000 shares
of authorized common stock, 10,390,256 shares were issued
and outstanding as of April 18, 1997. For a description of
Wesbanco dividend rights, see "Comparative Stock Prices and
Dividends - Wesbanco Common Stock Dividend Policy".
As of April 18, 1997, 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
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
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
<PAGE> 45
holders of preferred stock may be entitled to a higher
dividend rate than that paid on the 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 the company, redemption rights, rights to
convert their preferred stock into shares of common stock,
and voting rights which would tend to dilute the voting
control of the company by the holders of 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 the corporation'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. See
"Comparison of Rights of Wesbanco and Shawnee Shareholders".
Description of Shawnee Capital Stock
The authorized capital stock of Shawnee consists of
32,537 shares of common stock, par value of $10.00 per
share. The shares of Shawnee Common Stock now outstanding
are fully paid and nonassessable. As of April 18, 1997,
there were 196 shareholders of record of Shawnee Common
Stock with 32,027 shares issued and outstanding.
Each share of Shawnee Common Stock is entitled to one
vote and to cumulate votes in the election of directors. No
holder of shares of Shawnee Common Stock has any preemptive
right to subscribe for or purchase any other securities of
Shawnee, and there are no conversion rights or redemption or
sinking fund provisions applicable to Shawnee Common Stock.
Dividends may be paid on Shawnee Common Stock at the
discretion of Shawnee's Board of Directors out of any funds
legally available therefore. For a discussion of Shawnee's
dividend policy and restrictions on the payment of dividends
see "Comparative Stock Prices and Dividends - Shawnee
Dividend Policy."
In the event of liquidation or dissolution of Shawnee,
either voluntary or involuntary, the holders of Shawnee
Common Stock are entitled to receive prorata, subject to the
application of state and federal laws, such net assets of
Shawnee as are distributable to shareholders on the
respective shares held by them after payment of all
liabilities of the corporation.
In the event of a dissolution of Shawnee, the
liquidation of its assets, or the winding up of its affairs,
and subject to the application of state and federal laws,
the holders of Shawnee Common Stock will be entitled to
share ratably in the assets of Shawnee available for
distributions to its shareholders remaining after payment of
the corporation's obligations.
<PAGE> 46
Comparison of Rights of Wesbanco and Shawnee Shareholders
The rights of the Shawnee shareholders and the Wesbanco
shareholders are governed by the respective Articles of
Incorporation and Bylaws of each corporation and West
Virginia law. In many respects, the rights of Shawnee
shareholders and Wesbanco shareholders are similar. Holders
of common stock of each corporation are entitled to one vote
for each share of common stock and to receive prorata any
assets distributed to shareholders upon liquidation. The
affirmative vote of the holders of the majority of the
outstanding common stock of either corporation is required
to approve major corporate transactions including mergers
and consolidations. Cumulative voting is permitted in the
election of directors for both corporations. Shareholders of
neither corporation have preemptive rights to purchase their
prorata shares of any additional stock issued. The
shareholders of both corporations have the right under West
Virginia law to dissent from certain corporate transactions
and to elect dissenters' rights. See "Proposed Merger -
Rights of Dissenting Shareholders".
(i) Differences in Rights:
There are, however, a number of differences between the
rights of Shawnee shareholders and Wesbanco shareholders.
For example, Wesbanco's Bylaws require that shareholders who
intend to nominate candidates for election to the Board of
Directors must give written notice of such intent at least
30 days prior to the date of any shareholders meeting called
for such purpose. Shawnee's Bylaws do not require prior
written notice of shareholders nominations for directors.
The Directors of Wesbanco are elected for staggered
terms of three years, with no more than one-third of the
Directors being elected in any one year. The Directors of
Shawnee, presently seven in number, are elected annually,
each to serve for a term of one year. In addition, Wesbanco
may issue preferred stock without approval of the
stockholders which could affect the voting rights, funds
available for dividends, redemption rights, conversion
rights, or distribution of assets to the holders of the
common stock of Wesbanco. Shawnee has no class of preferred
stock.
Furthermore, Wesbanco's Articles of Incorporation
contain certain "super majority provisions". These
provisions provide that the affirmative vote of the holders
of not less than 75% of the outstanding shares of the voting
stock of the corporation will be required to amend or repeal
the Articles of Incorporation provision dealing with the
classification of the Directors into three separate classes,
each to serve for staggered terms of three years. Shawnee's
Articles of Incorporation require only a majority vote of
the shareholders to elect the directors of the corporation.
(ii) Advantages of Wesbanco Anti-Takeover Provisions:
The provisions constitute defensive measures which are
designed in part, to discourage, and to insulate the
corporation against, hostile takeover efforts, which the
Wesbanco Board might determine are not in the best interests
of Wesbanco and its shareholders. The provisions
<PAGE> 47
are designed as reasonable precautions to protect against,
and to assure the opportunity to assess and evaluate such
confrontations.
(iii) Disadvantages of Wesbanco Anti-Takeover Provisions:
The classification of the Board 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. 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 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. 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 certain specific
differences between the rights of Wesbanco and Shawnee
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 Corporations Act and the articles and bylaws
referred to above.
<PAGE> 48
PRO FORMA DATA
Certain Information about the Unaudited
Pro Forma Combined Financial Data
Notes to Pro Forma Financial Information
The following unaudited Pro Forma Consolidated Balance
Sheet as of December 31, 1996 and the Pro Forma Consolidated
Statement of Income for the year ended December 31, 1996 were
prepared as if the transaction occurred on January 1 of the
period presented and are for informational purposes only. The
pro forma information is based on the historical financial
statements of WesBanco and Shawnee. These pro forma
statements may not be indicative of the results that actually
would have occurred if the acquisition had been in effect on
the dates indicated or which may be obtained in the future.
Minor differences may result from rounding. The pro forma
financial information should be read in conjunction with the
other financial information presented herein, incorporated by
reference and with the separate historical and supplemental
financial statements, including the notes thereto, of each
institution. Expenses relating to the acquisition of Shawnee
are estimated within a range of $75,000 to $100,000.
The Shawnee acquisition will be accounted for under the
purchase method of accounting. Under the terms of the
transaction, Shawnee shareholders will receive WesBanco common
stock at an exchange ratio of 10.094 shares for each share of
Shawnee common stock. The total transaction value
approximates $10,587,000. On March 3, 1997, WesBanco began a
stock purchase plan to acquire up to 323,281 shares of
WesBanco common stock for use in this acquisition. The
purchase plan will continue for a period up to 30 days after
the consummation of Shawnee.
<PAGE> 49
WESBANCO,INC.
PRO FORMA COMBINED BALANCE SHEET
December 31, 1996
(In thousands, except for book value per share)
(Unaudited)
<TABLE>
Note 1 WesBanco Inc.
Shawnee Adjustments Pro Forma
WesBanco, Inc. Bank, Inc. Dr Cr Combined
----------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks $58,828 $1,171 $59,999
Due from banks - interest bearing 197 297 494
Federal funds sold 10,970 555 11,525
Securities - available for sale 276,201 13,508 G $10 A $10,587 279,132
Securities - held to maturity 249,108 5,002 D 50 254,060
Investment in subsidiary B 10,587 C 10,587 -
Loans held for sale 983 983
Loans 1,026,370 17,406 E 252 H 58 1,043,970
Less: allowance for loan losses (15,528) (127) (15,655)
-----------------------------------------------------------------
Net loans 1,010,842 17,279 252 58 1,028,315
Bank premises and equipment 32,670 497 33,167
M 134 J 305
D 50 E 252
Goodwill and other intangibles 8,363 C 5,086 F 132 12,944
M 81
Other assets 29,609 630 N 19 L 502 29,675
-----------------------------------------------------------------
TOTAL ASSETS $1,677,771 $38,939 $16,138 $22,554 $1,710,294
=================================================================
LIABILITIES
Deposits:
Non interest bearing $159,176 $4,109 $163,285
Interest bearing 1,183,644 25,567 F $132 I $66 1,209,145
----------------------------------------------------------------
Total deposits 1,342,820 29,676 132 66 1,372,430
Liabilities for borrowed money 92,771 3,402 96,173
Other liabilities 14,648 360 N 27 M 53 15,034
----------------------------------------------------------------
TOTAL LIABILITIES 1,450,239 33,438 159 119 1,483,637
SHAREHOLDERS' EQUITY
Common stock 21,956 320 C 320 21,956
Capital surplus 36,949 925 C 925 36,949
K 875
Retained earnings 170,116 4,153 C 4,153 169,241
Treasury stock (544) A 10,587 B 10,587 (544)
Net unrealized gains/(losses) on
available-for-sale securities (90) 103 C 103 (90)
Deferred benefits for directors &
employees (855) (855)
----------------------------------------------------------------
TOTAL SHAREHOLDERS' EQUITY 227,532 5,501 16,963 10,587 226,657
----------------------------------------------------------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $1,677,771 $38,939 $17,122 $10,706 $1,710,294
================================================================
Book value per share $21.62 $21.54
=========== ============
See Notes to Pro Forma Combined Financial Information
</TABLE>
<PAGE> 50
WESBANCO INC.
PRO FORMA COMBINED STATEMENT OF INCOME
For the Year Ended December 31, 1996
(In thousands, except for share and per share amounts)
(Unaudited)
<TABLE>
Note 1 WesBanco, Inc.
Shawnee Adjustments Pro Forma
WesBanco, Inc. Bank, Inc. Dr Cr Combined
------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans $81,449 $1,475 H $58 $82,866
Interest on investment securities 29,708 1,145 L 502 G $10 30,361
Interest on federal funds sold 1,781 80 1,861
------------------------------------------------------------------
Total interest income 112,938 2,700 560 10 115,088
INTEREST EXPENSE
Interest on deposits 44,432 1,131 I 66 45,629
Interest on other borrowings 3,786 101 3,887
------------------------------------------------------------------
Total interest expense 48,218 1,232 66 49,516
------------------------------------------------------------------
NET INTEREST INCOME 64,720 1,468 626 10 65,572
Provision for loan losses 4,336 -- 4,336
------------------------------------------------------------------
NET INTEREST INCOME AFTER PROVISION
FOR LOAN LOSSES 60,384 1,468 626 10 61,236
OTHER INCOME
Trust fees 5,442 5,442
Service charges and other income 6,592 244 6,836
Net securities transaction gains 239 19 258
------------------------------------------------------------------
Total other income 12,273 263 12,536
OTHER EXPENSE
Salaries, wages, and fringe benefits 23,610 510 24,120
Premises and equipment - net 5,786 128 5,914
Goodwill amortization 18 -- J 305 323
Other operating 13,738 283 14,021
------------------------------------------------------------------
Total other expense 43,152 921 305 44,378
------------------------------------------------------------------
Income before income taxes 29,505 810 931 10 29,394
Provision for income taxes 8,344 257 N 46 8,555
------------------------------------------------------------------
Net Income $21,161 $553 $931 $56 $20,839
==================================================================
Earnings per share $2.08 $17.28 $2.05
Average shares outstanding 10,168,738 10,168,738
</TABLE>
See Notes to Pro Forma Combined Financial Information
<PAGE> 51
WESBANCO, INC.
NOTES TO PRO FORMA COMBINED
FINANCIAL INFORMATION
(Unaudited)
NOTE 1
The following represents the estimated pro forma and
purchase accounting adjustments related to the acquisition of
the net assets of Shawnee Bank, Inc. Under the purchase
method of accounting, the acquiring company records the net
assets received at their fair value at the time of the
business combination. Excess of the cost over the fair value
of the net assets acquired is allocated to goodwill and
amortized over a period of fifteen years. These statements
and purchase accounting adjustments are primarily estimates
and are not intended to reflect the final valuations at the
effective date of the acquisition.
(A) To record the purchase of treasury stock for use in
the acquisition of Shawnee Bank, Inc.
(B) To record investment in Shawnee through the issuance
of treasury stock valued at $10,587,000.
(C) Reflects the entries to eliminate the shareholders'
equity of Shawnee and reflects the excess over purchase
price of assets acquired (goodwill), before the effects of
the purchase accounting adjustments.
(D) Reflects the estimated market valuation adjustment of
Shawnee's securities held to maturity.
(E) Reflects the estimated market valuation adjustment of
Shawnee's loan portfolio.
(F) Reflects the estimated market valuation adjustment of
Shawnee's interest bearing deposits.
(G) Reflects the current period accretion of Shawnee's market
value adjustments of held to maturity securities over the
estimated remaining life using the straight line method.
(H) Reflects the current period amortization for Shawnee's
estimated market value adjustments of loans over the
estimated remaining life using the straight line method.
<PAGE> 52
WESBANCO, INC.
NOTES TO PRO FORMA COMBINED
FINANCIAL INFORMATION (continued)
(Unaudited)
(I) Reflects the current period accretion of Shawnee's
estimated market value adjustments of deposits over the
estimated remaining life using the straight line method.
(J) Reflects the amortization of Shawnee goodwill over a
period of 15 years.
(K) Reflects the change in net income caused by the pro forma
and purchase accounting adjustments.
(L) Reflects the reduction in interest income due to the sale
of non-taxable securities classified as available for sale
using a 5.00% average yield.
(M) Reflects the net deferred tax adjustments at a tax rate
of 40%(combined Federal & State tax rate) for the
purchase accounting adjustments.
(N) Reflects the net amortization of the deferred tax
adjustments at a tax rate of 40% for the purchase accounting
adjustments.
NOTE 2
Under the purchase method of accounting, Shawnee's assets and
liabilities will be adjusted to fair values. The estimated
fair value adjustments included in the pro forma financial
statements have been determined by WesBanco based upon
information available. WesBanco cannot be sure that such
estimated fair values represent the fair values that will
ultimately result when the proposed transaction is consummated.
The actual valuation will depend upon the composition of the
assets and liabilities, the weighted average remaining life,
the weighted average interest rate and the general level of
interest rates in the market at the time of purchase. The
following is a summary of the consideration received by Shawnee
shareholders from WesBanco and the pro forma adjustments made
with respect to estimated fair values.
SUMMARY OF CONSIDERATION:
100% of Shawnee's common stock outstanding 32,027
Exchange ratio 10.094
------------
WesBanco common shares to be exchanged 323,281
Value of WesBanco stock $ 32.75
------------
TOTAL CONSIDERATION $ 10,587,000
============
<PAGE> 53
INFORMATION WITH RESPECT TO WESBANCO
History
Wesbanco is a multi-bank holding company chartered under the
laws of the State of West Virginia. As of December 31, 1996,
Wesbanco had five banking affiliates located in Wheeling,
Parkersburg, Charleston and Fairmont in West Virginia and
Barnesville, Ohio. On a consolidated historical basis, as of
December 31, 1996, Wesbanco had total assets of $1.7 Billion, net
loans of $1.0 Billion, deposits of $1.3 Billion and shareholders'
equity of $227 Million. As of December 31, 1996, Wesbanco had
approximately 4,267 shareholders, and 10,521,854 shares of common
stock outstanding. Wesbanco has no preferred stock issued and
outstanding.
Wesbanco had been inactive since its incorporation in 1968,
but was activated on December 31, 1976, and exchanged its common
stock on a share for share basis with the former holders of
common stock of Wheeling Dollar Savings & Trust Co. During 1984,
Wesbanco acquired three financial institutions with combined
assets approximating $57,000,000 as of December 31, 1984. During
1985, Wesbanco acquired one financial institution with assets as
of December 31, 1985, of approximately $41,000,000 and merged
Wheeling Dollar Savings & Trust Co. with the Citizens National
Bank of Follansbee, which was one of the banks acquired in 1984.
The name of the resulting institution was changed to Wheeling
Dollar Bank. During 1987, Wesbanco acquired four financial
institutions with combined assets of approximately $215,567,000.
During 1988, Wesbanco acquired one financial institution with
assets as of the date of acquisition of approximately
$68,280,000. During 1991 Wesbanco acquired one financial
institution with assets as of the date of acquisition of
approximately $95,510,000. During 1992, Wesbanco acquired two
financial institutions, one with assets of approximately
$144,849,000 in assets, and one of approximately $18,127,000 in
assets, as of the dates of acquisition. During 1994, Wesbanco
acquired four banks, all affiliates of First Fidelity Bancorp,
Inc. with approximate total assets of $309,911,000. On August 30,
1996, Wesbanco acquired the Bank of Weirton with approximate
total assets of $177,877,000. On December 30, 1996, Wesbanco
acquired Vandalia National Corporation with approximate total
assets of $55,372,000. See, "Recent Acquisitions" and "Pro Forma
Data.".
Wesbanco is a decentralized banking operation, with
affiliates acting autonomously in day to day decisions. The
principal role of the holding company is to provide management,
leadership and access to specialized staff resources in areas
such as: asset/liability management, regulations, lending
policies, data processing, accounting, investment and budgeting.
Dividends received from affiliates are Wesbanco's major
source of income. Dividend payments by the banking affiliates
depend primarily on their earnings and are limited by various
regulatory restrictions. On December 31, 1996, the affiliates,
without prior approval from the regulators, could have
distributed dividends of approximately $3,641,000. Wesbanco has
not issued debt securities as a source of funding for the assets
of the affiliate banks.
<PAGE> 54
Wesbanco has reported to its stockholders that it may engage
in other activities of a financial nature authorized by the Board
of Governors of the Federal Reserve System either directly
through a subsidiary or through acquisition of established
companies, though no specific proposals are underway. As of
December 31, 1996, neither the parent corporation nor any of the
subsidiaries were engaged in any operation in foreign countries
and have had no material transactions with customers in foreign
countries.
Recent Acquisitions
On August 30, 1996, Wesbanco completed the acquisition of
Bank of Weirton by means of a statutory merger with and into
Wesbanco Bank Wheeling. Bank of Weirton had total assets of
approximately $178,789,000, total equity of approximately
$37,586,000 and net income of $1,032,000 as of June 30, 1996.
Bank of Weirton was a state banking corporation with its
principal office located at 333 Penco Road, Weirton, West
Virginia. The bank also operated a branch facility in downtown
Weirton at 3425 Main Street. Both locations are full service
banking operations with drive-in facilities and are continuing to
be operated by Wesbanco subsequent to the merger.
Under the terms of the merger, Wesbanco issued 1,690,000
shares of Wesbanco Common Stock in exchange for the 13,000 shares
of Weirton Common Stock outstanding at the time of the
transaction. In addition, Wesbanco elected to the Board of
Directors of Wesbanco R. Peterson Chalfant and George M. Molnar.
On December 30, 1996, Wesbanco consummated its acquisition
of Vandalia National Corporation ("Vandalia"). In accordance
with the terms of the acquisition, Wesbanco issued a total of
345,545 shares of common stock, of which 178,655 shares came from
its Treasury balances and 166,890 shares were newly issued. The
total purchase price of the acquisition, including cash for stock
warrants, was approximately $12,046,000. As of the acquisition
date, Vandalia reported total assets of approximately
$55,372,000. The acquisition was accounted for as a purchase
transaction, and, accordingly, the results of operations of
Vandalia have been included in Wesbanco's consolidated financial
statements from December 30, 1996.
Future Acquisitions
Wesbanco continues to foster discussion with respect to
additional acquisitions of banks, thrifts and thrift and bank
holding companies. The tentative nature of such discussions,
however, makes it impossible to predict the number or size of any
future acquisitions.
Operations
Wesbanco, through its subsidiaries, conducts a general
banking, commercial and trust business. Its full service banks
offer, among other things, retail banking services, such as
demand, savings and time deposits; commercial, mortgage and
consumer installment loans; credit card services through VISA and
MasterCard; personal and corporate trust services;
<PAGE> 55
discount brokerage services; and travel services. Most affiliates
are participating in or will be participating in local partnerships
which operate banking machines in those local regions under the
name of MAC. The banking machines are linked to CIRRUS, a
nationwide banking network.
The principal operations of Wesbanco are conducted at the
main offices of Wesbanco and Wesbanco Bank Wheeling located at
Bank Plaza, Wheeling, West Virginia. This facility was
constructed in 1976, and consists of a modern eight story glass
enclosed commercial building with a main lobby for banking
operations and an integral four-lane drive-in facility with
additional space for customer parking. The structure provides
office space for Wesbanco and Wesbanco Bank Wheeling.
Wesbanco Bank Wheeling (formerly Wheeling Dollar Bank), a
state banking corporation is the largest banking subsidiary of
Wesbanco and represents approximately 48.7% of the consolidated
assets and 49.8% of the consolidated net income as of December
31, 1996. It is a full service bank offering a wide range of
services to consumers, businesses and government bodies,
including but not limited to, checking and savings accounts,
certificates of deposit, consumer loans, mortgage loans,
commercial loans, personal and corporate trusts, data processing
and other banking services. The bank has approximately 406 full-
time equivalent employees. The bank's Trust Department is one
of the largest in the State of West Virginia and offers a wide
range of services as Executor, Trustee, Guardian and Agent. It
serves as Transfer Agent and Registrar for corporations and
performs fiduciary services for municipalities. Total market
value of assets under management in the Trust Department was
approximately $1.6 Billion as of December 31, 1996. The Bank
also operates fourteen branch offices, five of which are located
in Wheeling, two of which are located in Follansbee, two in New
Martinsville, one in Pine Grove, one in Sistersville, one in
Wellsburg and two in Weirton, West Virginia. All branch offices
of the bank also operate drive-in facilities.
Wesbanco Bank South Hills (formerly South Hills Bank) is a
state banking corporation located in Charleston, West Virginia.
The bank also provides general banking services similar to the
services provided by Wesbanco Bank Wheeling. The bank operates a
drive-in facility which is located at its main banking facility
and a full service facility with drive-in lanes in Sissonville.
As of December 31, 1996, the bank had total assets of
approximately $100,532,000 deposits of approximately $85,744,000
and 42 full time equivalent employees.
Wesbanco Bank Parkersburg (formerly Mountain State Bank) is
also a state banking corporation located in Parkersburg, West
Virginia. The bank also provides general banking and trust
services similar to the services provided by Wesbanco Bank
Wheeling. The bank also operates a drive-in facility which is
located at its main banking facility and two full service
branches which are located at Mineral Wells and Elizabeth, West
Virginia. As of December 31, 1996, the bank had approximately
$117,043,000 in assets, $101,744,000 in deposits, and 65 full
time equivalent employees.
Wesbanco Bank Barnesville is an Ohio banking corporation
located in Barnesville, Ohio, the bank also provides general
banking and trust services similar to the services provided by
<PAGE> 56
Wesbanco Bank Wheeling. The bank operates out of its principal
office located at 101 E. Main Street, Barnesville, Ohio, and also
operates branch facilities in Beallsville, Bethesda and
Woodsfield, Ohio. As of December 31, 1996, the bank had
approximately $143,355,000 in assets and $124,399,000 in
deposits, and 66 full time employees.
Wesbanco Bank Fairmont is a West Virginia banking
corporation located in Fairmont, West Virginia. The bank also
provides general banking and trust services. The bank operates
out of its principal office located at 301 Adams Street,
Fairmont, West Virginia, and also operates seventeen branch
offices in Monongalia, Marion, Preston and Harrison Counties, in
West Virginia. As of December 31, 1996, the bank had
approximately $495,400,000 in assets and $409,095,000 in deposits
and 266 full-time employees.
Competition
The 1980's was a period of significant legislative change in
West Virginia for banks and bank holding companies. Prior to
1982, West Virginia was a unit banking State and prohibited multi-
bank holding companies and branch banking. As a result of
legislation enacted in 1982, banks were permitted to establish a
limited number of branches by purchase, merger or consolidation
with another banking institution and to establish an additional
branch by the construction, lease or acquisition of branch
facilities in the unbanked areas within the county of its
principal office. In 1984, legislation further eased these
restrictions by removing the "unbanked area" limitation on county
wide branching effective June 7, 1984, and by providing for the
phased implementation of branch banking throughout the State
beginning in 1987, with unlimited branch banking after 1991.
As a result of legislation adopted in the 1986 session of
the Legislature, West Virginia further eased or eliminated
restrictions on branch banking and joined the growing number of
states that permit interstate acquisitions of banks and bank
holding companies on a reciprocal basis. Specifically, the
legislation permits West Virginia bank holding companies to
acquire banks and bank holding companies in other states and out-
of-state bank holding companies to acquire West Virginia banks or
bank holding companies on a reciprocal basis; however, the entry
by out-of-state bank holding companies is permitted only by the
acquisition of an existing institution which has operated in West
Virginia for two years prior to acquisition. Similar provisions
were enacted to allow reciprocal interstate acquisitions by
thrift institutions such as savings and loan holding companies,
savings and loan associations, savings banks, and building and
loan associations.
The legislation also accelerated the effective date of state-
wide unlimited branch banking from 1991 to January 1, 1987.
Under the legislation, interstate banking activities were delayed
until January 1, 1988, in order to permit West Virginia
institutions one year to branch and make other acquisitions state-
wide before the advent of interstate banking. The legislation
does not permit the chartering and formation of de novo banks in
West Virginia by out-of-state bank holding companies nor does it
permit West Virginia banks to establish branch banks across state
lines (either de novo or by formation or merger).
<PAGE> 57
The BHC Act was amended by the interstate banking provisions
of the Riegle-Neal Interstate Banking and Branching Efficiency
Act of 1994 (the "Interstate Banking Act"), which became
effective on September 29, 1995. The Interstate Banking Act
repealed the prior statutory restrictions on interstate
acquisitions of banks by bank holding companies, such that
Wesbanco and any other bank holding company located in West
Virginia or another state may now acquire a bank located in any
other state, and any bank holding company located outside West
Virginia may lawfully acquire any West Virginia-based bank,
regardless of state law to the contrary subject to certain
deposit-percentage, aging requirements, and other restrictions.
The Interstate Banking Act also generally provides that, after
June 1, 1997, national and state-chartered banks may branch
interstate through acquisitions of banks in other states. By
adopting legislation prior to that date, a state has the ability
either to "opt in" and accelerate the date after which interstate
branching is permissible or "opt out" and prohibit interstate
branching altogether.
West Virginia adopted comprehensive legislation on this
issue in 1996 with Senate Bill 280, signed by the Governor on
April 1, 1996, and went into effect ninety (90) days from
passage. The Bill conforms the interstate provisions of state
law with the mandatory requirements of the Interstate Banking
Act. Senate Bill 280 provides the full range of additional
interstate branching opportunities permitted by the Interstate
Banking Act, including de novo branching and interstate branch
acquisitions. The interstate branching sections of the Bill were
effective May 31, 1996. In addition, Senate Bill 280 revises
elements of the law addressing the maximum level of insured
deposits which any affiliated group may control within West
Virginia. The new language defines the deposits included in the
calculation and precludes an acquisition transaction which would
result in the control of 25% or greater of such deposits.
Each bank faces strong competition for local business in its
respective market areas. Competition exists in efforts to obtain
new deposits, in the scope and types of services offered, and the
interest rates paid on time deposit and charged on loans, and in
other aspects of banking. Banks encounter substantial
competition not only from other commercial banks but also from
other financial institutions. Savings banks, savings and loan
associations, and credit unions actively compete for deposits.
Such institutions, as well as consumer finance companies,
brokerage firms, insurance companies and other enterprises, are
important competitors for various types of business. In
addition, personal and corporate trust services and investment
counseling services are offered by insurance companies,
investment counseling firms and other business firms and
individuals.
Principal Shareholders
To the best of management's knowledge, the Trust Department
of Wesbanco Bank Wheeling, Bank Plaza, Wheeling, West Virginia,
26003, is the only holder or beneficial owner of more than 5% of
the common stock of the Corporation. As of February 14, 1997,
955,393 shares of the common stock of the Corporation,
representing 9.08% of the shares outstanding, were held in
various capacities in the Trust Department. Of these shares, the
Bank does not have voting control of 188,741 shares, representing
1.79% of the shares outstanding, has partial voting control of
24,907 shares, representing .24% of the shares outstanding, and
sole voting control of 741,744 shares, representing 7.05% of the
shares outstanding. In accordance with its general
<PAGE> 58
practice, shares of the common stock of the Corporation over which
the Bank has sole voting control will be voted in accordance with
the recommendations of management. Shares over which the Bank has
partial voting control will be similarly voted if the Bank has
the concurrence of the co-fiduciary or co-fiduciaries.
The following table lists each stockholder known to Wesbanco
to be the beneficial owner of more than 5% of Wesbanco's common
stock as of February 14, 1997, as more fully described above:
Principal Holders
-----------------
Name &
Address of Amount and Nature
Title Beneficial of Beneficial Percent
Class Owner Ownership of Class
- ------ --------------- ------------------- ---------
Common Wesbanco Bank
Wheeling Trust Dept.
Bank Plaza
Wheeling, WV 26003 955,393* 9.08%
*Nature of beneficial ownership more fully described in text immediately
preceding table.
Holders of Wesbanco Common Stock will not experience a
change in the number of Wesbanco shares held by them as a result
of the Merger; however, their percentage ownership will decrease.
Based on stock ownership as of April 18, 1997, and assuming a
total of 10,713,756 shares of Wesbanco Common Stock outstanding
immediately after the Merger, the Trust Department of Wesbanco
Bank Wheeling would own 8.92%, with sole voting and investment
power over 6.92% and .23% with shared power. Directors and
Officers, as a group, would beneficiary hold 4.88% or more of the
outstanding common stock of Wesbanco. For stock ownership of
Wesbanco Directors and Officers see the Wesbanco Proxy Statement
for the Annual Meeting of Shareholders for April 16, 1997,
incorporated herein by reference and delivered herewith. See
"Incorporation of Certain Documents by Reference."
Wesbanco KSOP
The Wesbanco Employee Stock Ownership and 401(k) Plan (the
"Plan") is a qualified non-contributory employee stock ownership
plan with a deferred savings plan feature under Section 401(k) of
the Internal Revenue Code. The employee stock ownership feature
of the Plan (the "ESOP") was adopted by the Corporation on
December 31, 1986, subsequently amended and restated effective
January 1, 1996, to add 401(k) pre-tax savings features (the
"KSOP"), and amended and restated, effective December 31, 1996,
for the purpose of clarifying the terms of the Plan. All
employees of Wesbanco, together with all employees of the
subsidiary companies
<PAGE> 59
which adopt the Plan, are eligible to participate in the Plan
upon completion of a year of service and attaining age 21. All
affiliate banks are participants in the Plan. The Plan is
administered by a Committee appointed by the Board of Directors
of the Corporation.
No contributions are made to the ESOP by the employees. All
contributions are made by the Corporation, and the amount thereof
is determined annually by the Board of Directors of the
Corporation. The Trustee of the ESOP Trust is authorized to
borrow funds upon terms and conditions not inconsistent with
Section 4975 of the Internal Revenue Code and the regulations
thereunder, for the purpose of purchasing stock of the
Corporation, from the Corporation or any shareholder. In the
event that such a loan is obtained, the employer contributions
must be made in an amount sufficient to amortize the loan.
Otherwise, employer contributions may be paid in the form of cash
or shares.
At the present time, the ESOP Trust holds 107,337 shares of
Wesbanco Common Stock. The ESOP Trustee has currently
outstanding $413,405.00 borrowed from an affiliated financial
institution. The loan originated in 1995 and is structured as a
revolving line of credit, and the unpaid balance is amortized
over a five-year period at an interest rate equal to the lender's
base rate. Wesbanco is required to make annual payments to
principal equal to 20% of the January 1st balance each year. Any
balance due at maturity will be paid in full or refinanced. The
ESOP Trustee pledged the shares of employer securities purchased
with the proceeds of the loan as security for the loan. Wesbanco
guaranteed the loan issuing a contribution commitment letter. As
such securities are allocated to the accounts of participating
employees, and the loan balance paid down, they will be released
by the secured party.
Employer securities purchased with the proceeds of the loan
are placed in a suspense account and released, prorata, from such
suspense account under a formula which considers the amount of
principal and interest paid for a given period over the amount of
principal and interest anticipated to be paid for that period and
all future periods. Shares released from the suspense account,
employer contributions, if any, and forfeitures are each
allocated, prorata, subject to limits imposed by the Code, to the
accounts of individual participants under a format which
considers the amount of the participant's compensation over the
aggregate compensation of all participants.
Participants become vested in their accounts upon
retirement, death or disability or upon completion of five years
of service from and after December 31, 1986, or, with respect to
affiliate banks, five years from the date of initial
participation. Distributions upon retirement, death or
disability are normally made in the form of substantially equal
annual installments over a period of 10 years commencing as soon
as practicable after such retirement, death or disability.
Distributions upon other separation from service are normally
made in the form of installments commencing upon the earlier of
the date the former employee attains age 65, his or her death, or
after a one year break in service. With the consent of the
Committee, distributions may be made in the form of a lump sum.
Participants may demand distributions in the form of whole shares
of employer securities. If demand is not timely made, however,
distributions may be made in cash.
<PAGE> 60
The assets of the ESOP Trust will be invested and accounted
for primarily in shares of employer securities. However, from
time to time, the ESOP Trustee may hold assets in other forms,
either (i) as required for the proper administration of the ESOP
or (ii) as directed by participants as set forth in Section
401(a)(28) of the Code.
During the year 1996, Wesbanco contributed a total of
$400,000.00 to the ESOP on behalf of its employees.
The following table sets forth, with respect to those
persons named in the Compensation Table, and for all executive
officers as a group, the number of shares of the Corporation's
common stock allocated to such individuals during 1996:
Value of
Name Shares Allocated Allocated Shares
- ---- ---------------- ----------------
Edward M. George 140 $ 4,550
Paul M. Limbert 140 $ 4,550
Dennis P. Yaeger 140 $ 4,550
Frank R. Kerekes 119 $ 3,867
Jerome B. Schmitt 129 $ 4,192
Officers of the 1,827 $ 59,377
Corporation (22 persons)
as a group
The KSOP feature of the Plan permits participants to make
pre-tax elective contributions through payroll deductions in
increments of 1% of compensation up to a maximum of 15% of
compensation, subject to certain maximum dollar limitations
imposed by the Internal Revenue Code (i.e. for 1997 the maximum
amount is $9,500.00). The Corporation provides matching
contributions on a quarterly basis subject to certain
limitations. The Corporation's matching contribution is 50% of
the first 2% of compensation electively deferred, and 25% of the
next 2% of compensation electively deferred. No matching
contributions are made by the Corporation for elective deferrals
in excess of 4% of compensation.
Employees are 100% vested in all pre-tax elective deferrals,
or contributions, to the Plan and likewise are 100% vested in all
matching employer contributions. KSOP contributions are invested
by the employee selecting the percentage of contributions to be
invested among seven (7) different investment funds.
Contributions in the amount of $200,875.02 were made by the
Corporation under the KSOP matching feature during 1996.
<PAGE> 61
Changes in West Virginia Taxes
West Virginia tax legislation, which was effective July 1,
1987, greatly changed the way banks and bank holding companies
are taxed by the State. As of July 1, 1987, the gross receipts-
based Business and Occupation ("B & O") Tax was repealed with
regard to banking institutions and most other entities engaging
in business in West Virginia. In place of the B & O Tax, the West
Virginia Legislature broadened the Corporation Net Income Tax
("CNIT") and enacted a new Business Franchise Tax.
The most significant state tax law change with respect to
banks is that, for taxable periods after July 1, 1987, banks must
pay CNIT. Banks and other financial institutions were exempt
from the CNIT for taxable periods prior to July 1, 1987. The
CNIT rate applied to West Virginia taxable income was increased
to 9.75% beginning July 1, 1987 (reduced by 0.15% annually for
five successive years until it reached 9% on July 1, 1992).
Also effective July 1, 1987, was the Business Franchise Tax,
imposed on the capital of partnerships and corporations which
currently is at a rate of 0.75%. The Business Franchise Tax
provides a mechanism for certain exclusions and credits, such as
excluding from taxable capital certain obligations of the United
States and the State of West Virginia and certain residential
mortgage loans.
Directors and Executive Officers
The information with respect to directors and executive
officers of Wesbanco is set forth in the Wesbanco Annual Proxy
Statement for the Annual Meeting of Shareholders held on April
16, 1997, and is incorporated herein by reference. See
"Incorporation of Certain Documents by Reference".
Executive Compensation
The information with respect to executive compensation is
set forth in the Wesbanco Annual Proxy Statement for the Annual
Meeting of Shareholders held on April 16, 1997, and is
incorporated herein by reference. See "Incorporation of Certain
Documents by Reference."
Certain Relationships and Related Transactions
The information with respect to certain relationships and
related transactions is set forth in the Wesbanco Annual Proxy
Statement for the Annual Meeting of Shareholders held on April
16, 1997, and is incorporated herein by reference. See
"Incorporation of Certain Documents by Reference".
<PAGE> 62
INFORMATION WITH RESPECT TO
SHAWNEE
History
Shawnee is a state banking corporation with its principal
office and place of business located at 1011 Myers Avenue,
Dunbar, Kanawha County, West Virginia. Shawnee was originally
organized as a state banking corporation on April 16, 1973, under
the name Community Banking & Savings Company. Subsequently, on
January 1, 1991, 2nd Avenue Bank of South Charleston merged with
and into Community Banking & Savings Company and the name of the
resulting bank was changed to Shawnee.
Shawnee operates a general banking business with a full
range of deposit and lending services to customers in its primary
market area. The markets in which it operates are determined by
the locations of its main facility and its branch location in
Dunbar and South Charleston, Kanawha County, West Virginia.
As of December 31, 1996, Shawnee had a total of 21
employees, as compared with a total of 20 employees on December
31, 1995 and 1994, respectively. Management does not anticipate
any material change in Shawnee's work force prior to the merger.
The branch office is located at 323 Second Avenue, South
Charleston, West Virginia.
Banking Services
Shawnee is a full-service commercial bank offering those
services associated with a bank, including demand and time
deposit accounts, drive-in banking, participation in a (MAC)
automated teller machine (ATM) network, individual and commercial
loans, consumer installment loans for home improvement,
automobiles, and other purposes. Trust services are not currently
offered.
All services offered are available to customers/consumers at
each office.
Deposits are insured by the Federal Deposit Insurance
Corporation to the extent provided by law.
Competition
Banking has been influenced locally by the branching and
restructuring activities of banks, savings and loan, credit
unions, and other non-bank competitors.
Shawnee is part of, and subject to, a highly competitive
atmosphere in its market area. Shawnee ranks tenth in the market
in terms of total deposits among commercial banks and thrifts.
There are nine other commercial bank operations with branches,
one savings bank, three credit unions, some with branches, and
numerous consumer finance companies in its market area.
<PAGE> 63
On-going revisions in state and federal law, along with
reciprocal privileges, will continue to provide competitors the
opportunity to expand operations geographically.
Non-bank deposit takers and the advantage of less extensive
regulation provides the basis for significant competitive
activity and will continue to make difficult the response to that
form of competition.
Economic Conditions
Shawnee Bank operates two facilities, both in Kanawha
County, West Virginia. Kanawha County lies within the Charleston
Metropolitan Statistical Area (MSA), consisting of Kanawha and
Putnam Counties, West Virginia. The Charleston MSA has a
population of 255,139, per capita income of $21,304.00, and
median family income of $31,863.00, based upon information
provided by the Business Industrial Development Corporation of
Kanawha Valley. The Charleston MSA has been experiencing
declining population and slow business growth in recent years.
Unemployment in the Charleston MSA is estimated at 5.0% as of
December, 1996.
The portions of the Charleston MSA served by Shawnee Bank
are diverse and may not clearly reflect statistical information
available for the Charleston MSA. The Dunbar Branch is located
in a varied but predominately lower middle income residential
area with stable population and numerous small businesses and a
small retail section. The South Charleston Branch is located in
an industrialized area populated by individuals with medium-to-
upper medium income. South Charleston is home to numerous
chemical and light industrial facilities, as well as a retail
section very similar to that found in Dunbar.
Monetary Policies
The commercial banking business is affected by the monetary
and fiscal policies of various regulatory agencies, including the
Federal Reserve Board. Among the techniques available to the
Federal Reserve Board are open market purchases in United States
Government securities; changing the reserve requirements
applicable to member bank deposits and to certain borrowings by
member banks and their affiliates; and restricting dividends.
These policies influence to a significant extent the overall
growth and distribution of bank loans, investments and deposits
and the interest rates paid on savings and time deposits. The
monetary policies of the Federal Reserve Board have had a
significant effect on the operating results of commercial banks
in the past and are expected to do so in the future. In view of
the changing conditions in the national economy, as well as the
effect of acts by monetary and fiscal authorities, including the
Federal Reserve Board, no predictions can be made by Shawnee as
to future changes in interest rates, credit availability, or
deposit levels.
Properties of Shawnee
Shawnee owns the real estate and building it occupies for
banking facilities in Dunbar and South Charleston, and has
purchased improvements, fixtures and equipment with respect
<PAGE> 64
thereto.
The main office of Shawnee is located at 1011 Myers Avenue,
Dunbar, West Virginia. This building is a one story masonry
building with a basement, totaling approximately 5,400 square
feet, which includes four drive-in lanes.
Shawnee's full service branch office is located at 323
Second Avenue, South Charleston, West Virginia. This facility is
a one story building, with a basement, with approximately 4,500
square feet, which includes 2 drive-in lanes.
Legal Proceedings
Shawnee is currently contesting a state Business and
Occupation Tax assessment of approximately $21,500. In the event
the bank is unsuccessful in its efforts, it would be liable for
the $21,500, plus penalties and interest.
Principal Shareholders
The following table shows the number and percentage of
shares of Shawnee Common Stock beneficially owned as of December
31, 1996, by each person known by Shawnee to own beneficially
more than 5% of the outstanding shares of Shawnee Common Stock:
Pro Forma
Percent of
Amount and Nature Wesbanco
Name and Address of of Beneficial Percent of Common
Beneficial Owner Ownership Class Stock
R. Thomas Linger 3,909 12.21 *
832 Chappel Road
Charleston, WV 25304
Andrew A. Payne, Jr. 7,063 22.05 *
1280 One Valley Square
Charleston, WV 25301
R. Brawley Tracy 7,391 23.07 *
318 Morrison Building
815 Quarrier Street
Charleston, WV 25301
* Represents less than 1% of outstanding Wesbanco Common Stock.
<PAGE> 65
Directors and Executive Officers of Shawnee
The following table sets forth the name and age of each
person who is currently a director or executive officer of
Shawnee. All members of Shawnee's Board of Directors term
expires in 1998. Also set forth below is certain information as
of December 31, 1996, with respect to Shawnee Common Stock
beneficially owned by each director and executive officer and by
directors and executive officers of Shawnee as a group. Except
as indicated in the notes following the table below, the
beneficial owners have sole voting and investment power with
respect to the shares listed.
Pro Forma %
Age On Shares of Shawnee Common of Wesbanco
Name 12/31/96 Stock Beneficially Owned Common Stock
- ---- -------- ------------------------ ------------
Number Percentage
Directors: ------ ----------
Robert L. Hively 53 1,221 3.81 *
R. Thomas Linger (1) 72 3,909 12.21 *
Andrew A. Payne, Jr. (2) 64 7,063 22.05 *
John L. Ray 72 400 1.24 *
Brenda H. Robertson (3) 46 263 .82 *
R. Brawley Tracy (4) 67 7,391 23.07 *
Catherine L. Whittington 67 50 .15 *
All Directors and Executive
Officers as a Group
(7 Persons) 20,297 63.37 (5) .01%
* Represents less than 1% of outstanding Wesbanco Common Stock
(1) Includes 2,984 shares held by R. Thomas Linger and One
Valley Bank, NA, Trustees (voting authority only - no
pecuniary interest), 300 shares held by Gatlin, Inc. (owned
by R. Thomas Linger and Betty G. Linger), 571 shares held by
R. Thomas Linger and R. B. Tracy, Trustees (voting authority
only - no pecuniary interest), and 54 shares held by R.
Thomas Linger.
(2) Includes 220 shares held by Horse Creek Land & Mining Co.,
2,108 shares held by Andrew A. Payne, Jr., 1,730 shares held
by Andrew A. Payne, Jr., Trustee, 1,536 shares held by
Andrew A. Payne, Jr. and John L. D. Payne, as Trustees, and
1,294 shares held by Payne Gallatin Mining Co., and 175
shares held in an IRA account.
(3) Includes 243 shares held by Brenda H. Robertson, and 10
shares held jointly by her with each of her two children.
<PAGE> 66
(4) Includes 50 shares held by R. Brawley Tracy, 5,161 shares
held by R. Brawley Tracy and One Valley Bank, N.A., Trustees
(voting authority only - no pecuniary interest), 571 shares
held by R. B. Tracy and R. T. Linger, Trustees (voting
authority only - no pecuniary interest) and 1,609 shares in
R. Brawley Tracy's KEOGH account.
(5) Represents percentage of 32,027 shares issued and
outstanding as of December 31, 1996.
The principal occupation and business experience during the
last five years of each of the directors of Shawnee is as follows:
Robert L. Hively - Dr. Hively has been a bank director
since 1988. He served as director of Community Banking & Savings
Company from 1988 to 1991. In January 1991 Community Banking &
Savings merged with 2nd Avenue Bank of South Charleston and
changed its name to Shawnee. Dr. Hively serves as Chairman of
the Audit Committee. He is a physician with South Charleston
Primary Care Physicians located in Spring Hill, West Virginia.
R. Thomas Linger - Dr. Linger has been a bank director since
1977. He served as director of 2nd Avenue Bank of South
Charleston from 1977 to 1991. In January 1991 2nd Avenue Bank
merged into Community Banking & Savings Company and changed the
name to Shawnee Bank. Dr. Linger serves on Shawnee's Executive
Committee. He is a retired physician.
Andrew A. Payne, Jr. - Mr. Payne has been a bank director
since 1973. He served as Chairman of the Board of Community
Banking & Savings Company from 1977 to January 1991 and as
President and Chief Executive Officer from 1973 to 1978 and 1985
to January 1991. He is a Charleston businessman.
John L. Ray - Mr. Ray has been a director of Shawnee since
1993. He serves as a member of the Executive Committee. Mr. Ray
is a lawyer and a partner with Payne, Loeb & Ray in Charleston,
West Virginia.
Brenda H. Robertson - Ms. Robertson has been a bank director
since 1981. She served as director of 2nd Avenue Bank of South
Charleston from 1981 to 1991. In January 1991 2nd Avenue Bank
merged into Community Banking & Savings Company and changed the
name to Shawnee Bank. Ms. Robertson served as President and
Chief Executive Officer of 2nd Avenue Bank of South Charleston
from 1981 to 1991 and has held the same position with Shawnee
Bank since 1991. She has been employed by the bank since 1977,
and prior to that time was employed by the First National Bank of
Belle in various capacities since 1970.
R. Bawley Tracy - Mr. Tracy has been a bank director since
1973. He served as Chairman of the Board of Community Banking &
Savings Company from 1973 to 1977, 2nd Avenue Bank of South
Charleston from 1977 to 1991, and Shawnee Bank from 1991 to 1997.
<PAGE> 67
He is also Chairman of the Executive Committee. Mr. Tracy is a
lawyer in Charleston with the firm Tracy & Reishman. He serves
on the Board of Directors for the United Way of Kanawha Valley
and Charleston Renaissance Corporation.
Catherine L. Whittington - Mrs. Whittington has been a
director of Shawnee since 1995. Prior to 1995, she was a
director for 11 years at the Bank of Dunbar, which became United
National. Mrs. Whittington is the owner of Keller Funeral Home
located in Dunbar, West Virginia.
Members of the Board of Directors of Shawnee Bank receive
$100 per month retainer fee and $175 per month for each meeting
attended. Committee members receive $125 per meeting, with
attendance required to receive fee.
Executive Officers
Name and Title Age Business Experience
- -------------- --- -------------------
R. Brawley Tracy 67 Chairman of the Board of
Chairman of the Board Related Financial Institutions
1973-1997
Brenda H. Robertson 46 Chief Executive Officer,
President and CEO formerly Chief Executive
Officer 2nd Avenue Bank,
Auditor and Various Other
Positions First National Bank
of Belle
Joan B. Belcher 57 Cashier, formerly Auditor and
Cashier Executive Vice President,
Community Banking & Savings
Co. and Various Positions With
First National Bank - South
Charleston
Jennings W. Burch, III 35 Vice President - Loan Officer,
Vice President formerly Loan Officer First
National Bank of West Hamlin
Linda B. Field 44 Vice President - Loan Officer
Vice President & Compliance, formerly Vice
President, Loan Officer,
Community Banking & Savings Co.
<PAGE> 68
Compensation of Executive Officers
The following table sets forth, for the three fiscal years
ended December 31, 1996, compensation paid to Shawnee's Chief
Executive Officer. No officer or employee of Shawnee earned in
excess of $100,000 during the last calendar year.
Annual Compensation
Name and Other Annual
Principal Position Year Salary Bonus Compensation(1)
- --------- -------- ---- ------ ----- ---------------
Brenda H.
Robertson President & CEO 1996 $63,000 $100 $12,154
1995 $60,600 $100 $10,586
1994 $58,600 $100 $10,395
(1) Included in other annual compensation for Ms. Robertson are
tax deferred contributions to the Company's 401(K) Profit
Sharing Plan, directors fees, committee fees and insurance
benefits.
401(K) Profit Sharing Plan
January 1991, a Defined Contribution 401(K) Profit Sharing
Plan was adopted for all Shawnee employees who have at least one
year of service, work at least 1,000 hours during any plan year
and are over 21 years old. Voluntary employee contributions
under the plan for 1996 were limited to the greater of $9,500 or
15% of annual compensation. Under the plan, Shawnee matched 1996
employee contributions as follows:
75% of the employee's contribution
up to 5% of total annual
compensation - for employees with
ten years or more service.
50% of the employee's contribution
up to 5% of total annual
compensation - for employees with
less than ten years service.
Shawnee Board of Directors annually approved the level of
the Bank's employee match. Employee contributions vest
immediately upon payment while contributions from Shawnee vest
over a seven year period until such time as participants have at
least seven years service. Thereafter, contributions from Shawnee
vest immediately. Contributions to the plan charged to Shawnee's
operation for the year ended December 31, 1996, totaled $11,625.
The amount of that total which was credited to Ms. Robertson was
$2,363 and to Mr. Tracy was $658.32.
<PAGE> 69
Employment Agreements
Brenda H. Robertson, President and Chief Executive Officer
of Shawnee, has an Employment Agreement. The term of the
Agreement consists of a revolving period of three years. See
"The Merger - Interest of Certain Persons in the Merger".
Meeting of the Board of Directors and Compensation of Members
Shawnee has a Board of Directors composed of six outside
members and Mrs. Robertson as CEO. The Board regularly meets on
the third Tuesday of each month or upon special notice. Standing
committees consist of an Executive Committee of four members, an
Audit Committee of three members, a Branch Site Committee of two
members and a Community Reinvestment Act Committee of two
members. The Committees meet on an as needed basis.
Directors receive $100 per month retainer plus $175 per
month for each meeting attended. Committee members receive $125
per meeting for each committee meeting attended.
Certain Relationships and Related Transactions
Shawnee has had and expects to have in the future, banking
transactions in the ordinary course of business with some of its
directors, officers and employees. All such transactions have
been on the same terms, including interest rates, maturities and
collateral requirements as those prevailing at the time for
comparable transactions with non-affiliated persons and did not
involve more than the normal risk of collectibility or present
other unfavorable features.
Loans to officers, directors and employees of Shawnee
totaled $860,737, representing 15.64% of Shawnee's total
shareholders' equity at December 31, 1996. None of such
outstanding loans are classified as delinquent, substandard,
doubtful or loss.
<PAGE> 70
GOVERNMENT REGULATION
As a registered bank holding company, Wesbanco is subject to
the supervision of the Federal Reserve Board and are required to
file with the Federal Reserve Board reports and other information
regarding their business operations and the business operations
of their subsidiaries. Wesbanco is also subject to examination by
the Federal Reserve Board and required to obtain Federal Reserve
Board approval prior to acquiring, directly or indirectly,
ownership or control of voting shares of any bank, if, after such
acquisition, it would own or control more than 5% of the voting
stock of such bank. In addition, pursuant to federal law and
regulations promulgated by the Federal Reserve Board, Wesbanco
may only engage in, or own or control companies that engage in,
activities deemed by the Federal Reserve Board to be so closely
related to banking as to be a proper incident thereto. Prior to
engaging in most new business activities, Wesbanco must obtain
approval from the Federal Reserve Board.
Both Wesbanco's banking subsidiaries and Shawnee have
deposits insured by the Bank Insurance Fund ("BIF") of the
Federal Deposit Insurance Corporation (the "FDIC"), and are
subject to supervision, examination, and regulation by the state
banking authorities, the FDIC, and the Federal Reserve Board. In
addition to the impact of federal and state supervision and
regulation, the banking and non-banking subsidiaries of Wesbanco
and Shawnee are affected significantly by the actions of the
Federal Reserve Board as it attempts to control the money supply
and credit availability in order to influence the economy.
To the extent that the following information describes
statutory or regulatory provisions, it is qualified in its
entirety by reference to such statutory or regulatory provisions.
Holding Company Structure
Both Wesbanco's depository institution subsidiaries and
Shawnee are subject to affiliate transaction restrictions under
federal law which limit the transfer of funds by the subsidiary
banks to their respective parents and any nonbanking
subsidiaries, whether in the form of loans, extensions of credit,
investments or asset purchases. Such transfers by any subsidiary
bank to its parent corporation or to any nonbanking subsidiary
are limited in amount to 10% of the institution's capital and
surplus and, with respect to such parent and all such nonbanking
subsidiaries, to an aggregate of 20% of any such institution's
capital and surplus. Furthermore, such loans and extensions of
credit are required to be secured in specified amounts. Under
applicable regulation, at December 31, 1996, approximately
$40,836,000 was available for loans to Wesbanco from its
subsidiary banks.
The Federal Reserve Board has a policy to the effect that a
bank holding company is expected to act as a source of financial
and managerial strength to each of its subsidiary banks and to
commit resources to support each such subsidiary bank. Under the
source of strength doctrine, the Federal Reserve Board may
require a bank holding company to make capital injections into a
troubled subsidiary bank, and may charge the bank holding company
with engaging in unsafe and unsound practices for failure to
commit resources to such a subsidiary
<PAGE> 71
bank. This capital injection may be required at times when Wesbanco
may not have the resources to provide it. Any capital loans by a
holding company to any of the subsidiary banks are subordinate in
right of payment to deposits and to certain other indebtedness of
such subsidiary bank. Moreover, in the event of a bank holding
company's bankruptcy, any commitment by such holding company to a
federal bank regulatory agency to maintain the capital of a
subsidiary bank will be assumed by the bankruptcy trustee and
entitled to a priority of payment.
In 1989, the United States Congress passed comprehensive
financial institutions legislation known as the Financial
Institution Reform, Recovery, and Enforcement Act ("FIRREA").
FIRREA established a new principle of liability on the part of
depository institutions insured by the FDIC for any losses
incurred by, or reasonably expected to be incurred by, the FDIC
after August 9, 1989, in connection with (i) the default of a
commonly controlled FDIC-insured depository institution, or (ii)
any assistance provided by the FDIC to a commonly controlled FDIC-
insured depository institution in danger of default. "Default""
is defined generally as the appointment of a conservator or
receiver and "in danger of default" is defined generally as the
existence of certain conditions indicating that a "default" is
likely to occur in the absence of regulatory assistance.
Accordingly, in the event that any insured bank subsidiary of
Wesbanco causes a loss to the FDIC, other bank subsidiaries of
that parent could be required to compensate the FDIC by
reimbursing to it the amount of such loss.
Dividend Restrictions
There are statutory limits on the amount of dividends the
depository institution subsidiaries of Wesbanco can pay to their
parent corporation without regulatory approval. 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.
In addition, national banks may not pay a dividend in an
amount greater than such bank's net profits after deducting its
losses and bad debts. For this purpose, bad debts are defined to
include, generally, loans which have matured and are in arrears
with respect to interest by six months or more, other than such
loans which are well secured and in the process of collection.
Under these provisions and in accordance with the above-described
formula, Wesbanco's subsidiary banks could, without regulatory
approval, declare dividends as of December 31, 1996, of
approximately $3,641,000, and Shawnee could declare dividends of
$583,000.
If, in the opinion of the applicable regulatory authority, a
bank under its jurisdiction is engaged in or is about to engage
in an unsafe or unsound practice (which, depending on the
financial condition of the bank, could include the payment of
dividends), such authority may require, after notice and hearing,
that such bank cease and desist from such practice. The Federal
<PAGE> 72
Reserve Board, the OCC and the FDIC have issued policy statements
which provide that insured banks and bank holding companies
should generally only pay dividends out of current operating
earnings.
FDIC Insurance
Pursuant to FDICIA, the FDIC adopted a risk based assessment
system for insured depository institutions that takes into
account risks attributable to different categories and
concentrations of assets and liabilities. An institution is
assigned by the FDIC into one of three capital categories:
1 - well capitalized; 2 - adequately capitalized;
3 - undercapitalized. An institution is also assigned to one of
three supervisory subgroups within each capital group. The
supervisory subgroup is based on a supervisory evaluation
provided by the primary federal regulator. An institution
insurance assessment rate is then determined based upon capital
and the supervisory category to which it is assigned. Under this
risk based assessment system, there are nine assessment risk
categories to which different assessment rates are applied.
The Federal Deposit Insurance Act required the Bank
Insurance Fund to be recapitalized until the reserves reached a
designated ratio of at least 1.25% of deposits. That ratio was
met during May 1995. In August 1995, the FDIC reduced the
assessment rates for financial institutions which are subject to
the requirements of the Bank Insurance Fund. Under the revised
assessment schedule which was effective May 14, 1996, financial
institutions pay assessments ranging from .00% of deposits to
.31% of deposits, with an average assessment rate of .29%
(subject to the statutory minimum of $2,000 per institution per
year). Wesbanco and Shawnee are considered to be in the well
capitalized category requiring the minimum legal annual
assessments as required by the FDIC.
The FDIC recognizes that the disparity may have adverse
consequences for such institutions in the higher risk categories
including reduced earnings and impaired ability to raise funds on
the capital markets and to attract deposits. It is not currently
known whether institutions that are required to pay insurance
premiums will be required to pay higher deposit insurance
premiums in the future. It is impossible to predict whether
future regulations will be enacted or if enactment will require
financial institutions to contribute to the Savings Association
Insurance Fund or if these regulations may require additional
payments by Wesbanco into the Bank Insurance Fund.
Capital Requirements
The Federal Reserve Board has issued risk-based capital
guidelines for bank holding companies, such as Wesbanco. The
guidelines establish a systematic analytical framework that makes
regulatory capital requirements more sensitive to differences in
risk profiles among banking organizations, takes off-balance
sheet exposures into explicit account in assessing capital
adequacy, and minimizes disincentives to holding liquid, low-risk
assets. Under the guidelines and related policies, bank holding
companies must maintain capital sufficient to meet both a risk-
based asset ratio test and leverage ratio test on a consolidated
basis. The risk-based ratio is determined by allocating assets
and specified off-balance sheet commitments into four
<PAGE> 73
weighted categories, with higher levels of capital being required
for categories perceived as representing greater risk. The leverage
ratio is determined by relating core capital (as described below)
to total assets adjusted as specified in the guidelines. All of
Wesbanco's depository institution subsidiaries and Shawnee are
subject to substantially similar capital requirements adopted by
applicable regulatory agencies.
Generally, under the applicable guidelines, the financial
institution's capital is divided into two tiers. "Tier 1", or
core capital, includes common equity, noncumulative perpetual
preferred stock (excluding auction rate issues) and minority
interests in equity accounts of consolidated subsidiaries, less
goodwill. Bank holding companies, however, may include
cumulative perpetual preferred stock in their Tier 1 capital, up
to a limit of 25% of such Tier 1 capital. "Tier 2", or
supplementary capital, includes, among other things, cumulative
and limited-life preferred stock, hybrid capital instruments,
mandatory convertible securities, qualifying subordinated debt,
and the allowance for loan losses, subject to certain
limitations, less required deductions. "Total capital" is the
sum of Tier 1 and Tier 2 capital.
Financial institutions are required to maintain a risk-based
ratio of 8%, of which 4% must be Tier 1 capital. The appropriate
regulatory authority may set higher capital requirements when an
institution's particular circumstances warrant.
Financial institutions that meet certain specified criteria,
including excellent asset quality, high liquidity, low interest
rate exposure and the highest regulatory rating, are required to
maintain a minimum leverage ratio of 3%. Financial institutions
not meeting these criteria are required to maintain a leverage
ratio which exceeds 3% by a cushion of at least 100 to 200 basis
points.
The guidelines also provide that financial institutions
experiencing internal growth or making acquisitions will be
expected to maintain strong capital positions substantially above
the minimum supervisory levels, without significant reliance on
intangible assets. Furthermore, the Federal Reserve Board's
guidelines indicate that the Federal Reserve Board will continue
to consider a "tangible Tier 1 leverage ratio" in evaluating
proposals for expansion or new activities. The tangible Tier 1
leverage ratio is the ratio of an institution's Tier 1 capital,
less all intangibles, to total assets, less all intangibles.
Failure to meet applicable capital guidelines could subject
the financial institution to a variety of enforcement remedies
available to the federal regulatory authorities, including
limitations on the ability to pay dividends, the issuance by the
regulatory authority of a capital directive to increase capital
and the termination of deposit insurance by the FDIC, as well as
to the measures described under "Federal Deposit Insurance
Corporation Improvement Act of 1991" as applicable to
undercapitalized institutions.
As of December 31, 1996, the Tier 1 risk-based ratio, total
risk-based ratio and total assets leverage ratio for combined
Wesbanco and Shawnee were as follows:
<PAGE> 74
Regulatory Pro Forma
Requirements Wesbanco Shawnee Combined
------------ -------- ------- ---------
Tier 1 Risk-Based
Ratio 4% 19.8% 19.7% 19.0%
Total Risk-Based
Ratio 8% 21.0% 27.6% 20.3%
Total Assets
Leverage Ratio 3% 13.7% 13.9% 13.3%
________________
As of December 31, 1996, all of Wesbanco's banking
subsidiaries and Shawnee had capital in excess of all applicable
requirements.
The Federal Reserve Board, as well as the FDIC and the OCC
have adopted changes to their risk-based and leverage ratio
requirements that require that all intangible assets, with
certain exceptions, be deducted from Tier 1 capital. Under the
Federal Reserve Board's rules, the only types of intangible
assets that may be included in (i.e., not deducted from) a bank
holding company's capital are readily marketable purchased
mortgage servicing rights ("PMSRs") and purchased credit card
relationships ("PCCRs"), provided that, in the aggregate, the
total amount of PMSRs and PCCRs included in capital does not
exceed 50% of Tier 1 capital. PCCRs are subject to a separate
sublimit of 25% of Tier 1 capital. The amount of PMSRs and PCCRs
that a bank holding company may include in its capital is limited
to the lesser of (i) 90% of such assets' fair market value (as
determined under the guidelines), or (ii) 100% of such assets'
book value, each determined quarterly. Identifiable intangible
assets (i.e., intangible assets other than goodwill) other than
PMSRs and PCCRs, including core deposit intangibles, acquired on
or before February 19, 1992 (the date the Federal Reserve Board
issued its original proposal for public comment), generally will
not be deducted from capital for supervisory purposes, although
they will continue to be deducted for purposes of evaluating
applications filed by bank holding companies. These revisions
became effective for periods commencing after March 15, 1993, and
are reflected in Wesbanco's and Shawnee's capital ratios as of
December 31, 1996.
Federal Deposit Insurance Corporation Improvement Act of 1991
In December 1991, Congress enacted the Federal Deposit
Insurance Corporation Improvement Act of 1991 ("FDICIA"), which
substantially revised the bank regulatory and funding provisions
of the Federal Deposit Insurance Act and made revisions to
several other federal banking statutes.
Among other things, FDICIA requires federal bank regulatory
authorities to take "prompt corrective action" with respect to
depository institutions that do not meet minimum capital
requirements. For these purposes, FDICIA established five
capital tiers: well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
under capitalized.
<PAGE> 75
The regulatory authorities have adopted regulations to
implement the prompt corrective action provisions of FDICIA.
Among other things, the regulations define the relevant capital
measures for the five capital categories. An institution is
deemed to be "well capitalized" if it has a total risk-based
capital ratio of 10% or greater, a Tier 1 risk-based capital
ratio of 6% or greater and a Tier 1 leverage ratio of 5% or
greater and is not subject to a regulatory order, agreement or
directive to meet and maintain a specific capital level for any
capital measure. An institution is deemed to be "adequately
capitalized" if it has a total risk-based capital ratio of 8% or
greater, a Tier 1 risk-based capital ratio of 4% or greater and,
generally, a Tier 1 leverage ratio of 4% or greater and the
institution does not meet the definition of a "well capitalized"
institution. An institution that does not meet one or more of
the "adequately capitalized" tests is deemed to be
"undercapitalized". If the institution has a total risk-based
capital ratio that is less than 6% , a Tier 1 risk-based capital
ratio that is less than 3%, or a leverage ratio that is less than
3%, it is deemed to be "significantly undercapitalized".
Finally, an institution is deemed to be "critically
undercapitalized" if it has a ratio of tangible equity (as
defined in the regulations) to total assets that is equal to or
less than 2%.
"Undercapitalized" institutions are subject to growth
limitations and are required to submit a capital restoration
plan. If an "undercapitalized" institution fails to submit an
acceptable plan, it is treated as if it is significantly
undercapitalized. "Significantly undercapitalized" institutions
may be subject to a number of requirements and restrictions,
including orders to sell sufficient voting stock to become
adequately capitalized, requirements to reduce total assets and
cessation of receipt of deposits from correspondent banks.
"Critically undercapitalized" institutions may not, beginning 60
days after becoming "critically undercapitalized" make any
payment of principal or interest on their subordinated debt. In
addition, "critically undercapitalized" institutions are subject
to appointment of a receiver or conservator.
Under FDICIA, a depository institution that is not "well
capitalized" is generally prohibited from accepting brokered
deposits and offering interest rates on deposits higher than the
prevailing rate in its market. All of Wesbanco's depository
institution subsidiaries and Shawnee currently meet the FDIC's
definition of a "well capitalized" institution for purposes of
accepting brokered deposits. For the purposes of the brokered
deposit rules, a bank is defined to be "well capitalized" if it
maintains a ratio of Tier 1 capital to risk-adjusted assets of at
least 6%, a ratio of total capital to risk-adjusted assets of at
least 10% and a Tier 1 leverage ratio of at least 5% and is not
otherwise in a "troubled condition" as specified by its
appropriate federal regulatory agency. On October 25, 1993, the
FDIC published a final rule providing for purposes of its
brokered deposit rules the definitions of "well capitalized",
"adequately capitalized" and "undercapitalized" as previously
adopted by the bank regulatory agencies under the prompt
corrective action rules described above. Neither Wesbanco nor
Shawnee believes that adoption of the definition of capital
levels under the prompt corrective action rules will adversely
affect their ability to accept brokered deposits. Neither
Wesbanco nor Shawnee have any significant brokered deposits.
<PAGE> 76
The Federal Deposit Insurance Act, as amended by FDICIA and
the Riegle Community Development and Regulatory Improvement Act
of 1994, requires the federal bank regulatory agencies to
prescribe standards, by regulations or guidelines, relating to
internal controls, information systems and internal audit
systems, loan documentation, credit underwriting, interest rate
risk exposure, asset growth, asset quality, earnings, stock
valuation and compensation, fees and benefits and such other
operational and managerial standards as the agencies deem
appropriate. The federal bank regulatory agencies have adopted,
effective August 9, 1995, a set of guidelines prescribing safety
and soundness standards pursuant to FDICIA, as amended. The
guidelines establish general standards relating to internal
controls and information systems, internal audit systems, loan
documentation, credit underwriting, interest rate exposure, asset
growth and compensation, fees and benefits. In general, the
guidelines require, among other things, appropriate systems and
practices to identify and manage the risks and exposures
specified in the guidelines. The guidelines prohibit excessive
compensation as an unsafe and unsound practice and describe
compensation as excessive when the amounts paid are unreasonable
or disproportionate to the services performed by an executive
officer, employee, director or principal shareholders. The
federal banking agencies determined that stock valuation
standards were not appropriate. In addition, the agencies
adopted regulations that authorize, but do not require, an agency
to order an institution that has been given notice by an agency
that it is not satisfying any of such safety and soundness
standards to submit a compliance plan. If, after being so
notified, an institution fails to submit an acceptable compliance
plan or fails in any material respect to implement an accepted
compliance plan, the agency must issue an order directing action
to correct the deficiency and may issue an order directing other
actions of the types to which an undercapitalized institution is
subject under the "prompt correction action" provisions of
FDICIA. If an institution fails to comply with such an order,
the agency may seek to enforce such order in judicial proceedings
and to impose civil money penalties. The federal bank regulatory
agencies also proposed guidelines for asset quality and earnings
standards.
FDICIA also contains a variety of other provisions that may
affect the operations of Wesbanco's depository institution
subsidiaries and Shawnee, including new reporting requirements,
revised regulatory standards for real estate lending, "truth in
savings" provisions and the requirements that a depository
institution give 90 days prior notice to customers and regulatory
authorities before closing any branch.
In addition to FDICIA, there have been proposed a number of
legislative and regulatory proposals designed to strengthen the
federal deposit insurance system and to improve the overall
financial stability of the United States banking system. These
include proposals to increase capital requirements above
presently published guidelines, to place assessments on
depository institutions to increase funds available to the FDIC
and to allow national banks to branch on an interstate basis. It
is impossible to predict whether or in what form these proposals
may be adopted in the future and, if adopted, what their effect
would be on Wesbanco. It is likewise impossible to predict what
the competitive effect on Wesbanco's or Shawnee's bank
subsidiaries will be of the recent action taken by the Office of
Thrift Supervision to allow certain thrift institutions to engage
in interstate branching on a nationwide basis.
<PAGE> 77
Environmental Issues
As lenders, banks can be potentially liable under the
Comprehensive Environmental Response, Compensation, and Liability
Act (CERCLA), 42 U.S.C. 9601 et seq., for cleanup of hazardous
substances from property on which the bank forecloses or in which
it has a security interest. CERCLA imposes liability for removal
and remediation of hazardous substances on various types of
parties, including "owners or operators" of a contaminated site.
See 42 U.S.C. 9607(a). In the definition of "owners or
operators," CERCLA exempts from liability those who, without
participating in the management of a facility, hold indicia of
ownership in the facility primarily to protect a security
interest. See 42 U.S.C. 9601(2)(A). However, CERCLA's secured
creditor exemption from liability has been narrowed by recent
judicial interpretation. In a recent decision, the United States
Court of Appeals for the Eleventh Circuit held that a lender
could be liable for cleanup costs if its involvement in the
financial management of the facility was broad enough to support
an inference that it could have affected hazardous waste disposal
decisions. See United States v. Fleet Factors Corp., 901 F.2d
1550 (11th Cir. 1990), cert. denied, 111 S.Ct. 752 (1991). A
federal district court had earlier held that CERCLA's secured
creditor exemption did not insulate from liability a mortgagee
that had foreclosed and later acquired secured property. See
United States v. Maryland Bank & Trust Co., 632 F. Supp. 573 (D.
Md. 1986). More recently, however, the Ninth Circuit rejected
the "capacity to influence" test of Fleet Factors and held that
the mere unexercised power of a lender to get involved in a
borrower's management was not enough to impose CERCLA liability
on a secured lender. See Bergsoe Metal v. East Asiatic Co., 910
F.2d 668 (9th Cir. 1990). The United States Court of Appeals for
the Fourth Circuit, which has jurisdiction over Wesbanco, has
also recently confirmed a lender exemption from liability under
CERCLA pursuant to the security interest exemption. See United
States v. McLamb, 5 F.3d 69 (4th Cir. 1993), as amended (October
18, 1993). The Court opined that because the lender took title
to property at a foreclosure sale solely to protect its security
interest and then acted reasonably promptly to divest itself of
ownership, it met CERCLA's secured creditor exemption. Id. at
73. Wesbanco does attempt to screen loan applicants concerning
environmental matters with respect to collateral pledged to it as
security for loans. Wesbanco is not aware of any specific
collateral pledged to it on which there are hazardous materials
or potential liability under CERCLA. However, there can be no
assurances that liability under CERCLA or otherwise for cleanup
of hazardous materials will not occur in the future. In the
event that such liability occurs, it could have a material
adverse effect on the financial position and results of
operations of Wesbanco.
<PAGE> 78
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions thereof filed by
Wesbanco with the Commission under the Securities Exchange Act of
1934 (the "1934 Act") are hereby incorporated by reference in
this Proxy Statement/Prospectus:
Wesbanco Documents (Commission File No. 0-8467):
(1) Wesbanco Proxy Statement for the annual
meeting of shareholders held on April 16, 1997.*
(2) Wesbanco's 1996 Annual Report to
Shareholders, pages 8 through 34.*
(3) Wesbanco's Annual Report on Form 10-K for
the period ended December 31, 1996.
(4) Wesbanco's Registration Statement on Form
S-4, file Number 333-3905, pages 22 and 115 through 144.
All documents filed by Wesbanco pursuant to Section 13(a),
13(c), 14 or 15(d) of the 1934 Act subsequent to the date hereof
and prior to the Special Meeting are hereby incorporated by
reference into this Joint Proxy Statement/Prospectus and shall be
deemed a part hereof from the date of filing of such documents.
Any statement contained in a document incorporated by
reference herein shall be deemed to be modified or superseded for
purposes hereof to the extent that a statement contained herein
(or in any other subsequently filed document which also is
incorporated by reference herein) modifies or supersedes such
statement. Any statement so modified or superseded shall not be
deemed to constitute a part hereof except as so modified or
superseded.
*Indicates the document is being delivered with this Proxy
Statement/Prospectus.
<PAGE> 79
RELATIONSHIP WITH INDEPENDENT AUDITORS
The Board of Directors of Wesbanco, Inc. has retained Ernst
& Young LLP to serve as Wesbanco's independent auditors for the
year 1997. Ernst & Young LLP provided such services for 1996.
Price Waterhouse LLP served as the corporation's independent
auditors for the years 1994 and 1995. It is expected that a
representative of Ernst & Young LLP will have the opportunity to
make a statement if such representative desires to do so and will
be available to respond to appropriate questions from the
stockholders who are present at the Special Meeting.
The firm of Rollins, Cleavenger and Rollins, independent
public accountants, audited the financial statements of Shawnee
for the years ended December 31, 1996, 1995 and 1994. A
representative of Rollins, Cleavenger and Rollins will attend the
special meeting and will be available to answer questions.
LEGAL MATTERS
Certain matters will be passed upon for Wesbanco by its
counsel, Phillips, Gardill, Kaiser & Altmeyer, 61 Fourteenth
Street, Wheeling, WV, 26003. As of December 31, 1996, the
members of Phillips, Gardill, Kaiser & Altmeyer participating in
the preparation of this Proxy Statement/Prospectus owned an
aggregate of 29,674.89 shares of Wesbanco Common Stock. James C.
Gardill, a partner in said firm, serves as Chairman and as a
director of Wesbanco, and as a director of its subsidiary,
Wesbanco Bank Wheeling. Certain matters will be passed upon for
Shawnee by its counsel, Kay, Casto, Chaney, Love & Wise, 1600
Bank One Center, Charleston, West Virginia, 25327.
EXPERTS
The consolidated financial statements of Wesbanco, Inc.
incorporated by reference in Wesbanco's Annual Report on Form 10-
K for the year ended December 31, 1996, have been audited by
Ernst and Young LLP, independent auditors, as set forth in their
report thereon included therein and incorporated herein by
reference. Such consolidated financial statements are
incorporated herein in reliance upon such report, given upon the
authority of such Firm as experts in auditing and accounting.
The consolidated financial statements of Wesbanco, Inc. as
of December 31, 1995 and for each of the two years then ended,
incorporated in this Prospectus by reference to Wesbanco's Annual
Report on Form 10-K, have been so incorporated in reliance on the
report of Price Waterhouse LLP, independent accountants, included
therein, given on the authority of said firm as experts in
auditing and accounting.
The financial statements of Shawnee as of December 31, 1996
and 1995, and for each of the three years in the period ended
December 31, 1996, incorporated in this Prospectus, have been so
incorporated in reliance on the report of Rollins, Cleavenger &
Rollins, independent accountants, given on the authority of said
firm as experts in auditing and accounting.
<PAGE> 80
The financial statements of Weirton as of December 31, 1995,
and for each of the two years in the period then ended,
incorporated in this Prospectus by reference to Wesbanco's Annual
Report on Form 10-K, have been so incorporated in reliance on the
report of Grant Thornton LLP, independent accountants, included
therein, given on the authority of said firm as experts in
auditing and accounting.
LEGAL PROCEEDINGS
Wesbanco and its subsidiaries are defendants in various
legal proceedings arising in the normal course of business. In
the opinion of management, based on the advice of legal counsel,
the ultimate resolution of these proceedings will not have a
material effect on the financial position of Wesbanco or its
subsidiaries.
<PAGE> 81
INDEX TO FINANCIAL STATEMENTS
WESBANCO, INC.
Consolidated Balance Sheet as of December 31, 1996 and 1995 *
Consolidated Statement of Income for the years ended
December 31, 1996, 1995 and 1994. *
Consolidated Statement of Changes in Shareholders' Equity
for the years ended December 31, 1996, 1995 and 1994. *
Consolidated Statement of Changes in Cash Flows for the
years ended December 31, 1996, 1995 and 1994. *
Notes to Consolidated Financial Statements *
SHAWNEE BANK, INC.
Independent Auditors' Report 82
Statements of Financial Condition as of December 31, 1996
and 1995 83
Statements of Income for the years ended December 31, 1996,
1995 and 1994 84
Statements of Changes in Shareholders' Equity for the years
ended December 31, 1996, 1995 and 1994 85
Statements of Cash Flows for the years ended December 31,
1996, 1995 and 1994 86
Notes to Financial Statements 88
* Indicates the financial statement information is contained in
Wesbanco's 1996 Annual Report to Shareholders which is being
delivered with this Proxy Statement/Prospectus.
<PAGE> 82
ROLLINS, CLEAVENGER AND ROLLINS [LETTERHEAD]
PUBLIC ACCOUNTANTS
950 Kanawha Boulevard, East
Post Office Box 169
Charleston, West Virginia 25321
(304) 343-5503 Fax: (304) 346-3513
INDEPENDENT AUDITORS' REPORT
Board of Directors, Officers and Shareholders
Shawnee Bank, Inc.
Dunbar, West Virginia
We have audited the accompanying statements of financial
condition of Shawnee Bank, Inc. as of December 31, 1996 and 1995,
and the related statements of income, changes in shareholders'
equity, and cash flows for each of the three years in the period
ended December 31, 1996. These financial statements are the
responsibility of the Bank's management. Our responsibility is
to express an opinion on these financial statements based on our
audits.
We conducted our audits in accordance with generally
accepted auditing standards. Those standards require that we
plan and perform the audits to obtain reasonable assurance about
whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position
of Shawnee Bank, Inc. as of December 31, 1996 and 1995, and the
results of its operations and its cash flows for each of the
three years in the period ended December 31, 1996, in conformity
with generally accepted accounting principles.
/s/ Rollins, Cleavenger and Rollins
ROLLINS, CLEAVENGER AND ROLLINS
Public Accountants
January 8, 1997
<PAGE> 83
SHAWNEE BANK, INC.
STATEMENTS OF FINANCIAL CONDITION
DECEMBER 31, 1996 AND 1995
1996 1995
ASSETS: ---- ----
- -------
Cash and Due from Banks (Note 2) $ 1,171,346 $ 1,075,169
Interest Bearing Deposits in Banks 297,000 495,000
Federal Funds Sold 555,000 795,000
Available for Sale Securities (Note 3) 13,507,538 9,290,475
Held to Maturity Securities (Note 3) 5,001,563 7,316,160
Loans - Less Allowance for Loan
Losses of $126,687 and $139,941,
Respectively (Note 4) 17,279,028 14,033,341
Bank Premises and Equipment (Note 5) 496,730 516,526
Stock in Federal Home Loan Banks, at Cost 288,500 105,900
Other Assets 342,118 331,620
---------------------------
Total Assets $38,938,823 $33,959,191
===========================
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
LIABILITIES:
- ------------
Deposits (Note 6)
Noninterest Bearing $ 4,109,368 $ 3,733,753
Interest Bearing 25,566,435 24,239,833
---------------------------
Total Deposits 29,675,803 27,973,586
Repurchase Agreements 299,541 435,235
Short-Term Borrowings (Note 7) 3,000,000 -
Accrued Taxes and Other Expenses 102,816 88,265
Accrued Interest Payable 359,161 253,563
---------------------------
Total Liabilities 33,437,321 28,750,649
Commitments and Contingencies (Note 9)
SHAREHOLDERS' EQUITY:
- ---------------------
Common Stock, Par Value $10; 32,537 Shares
Authorized, 32,027 Shares Issued and
Outstanding 320,270 320,270
Capital Surplus 925,443 925,443
Undivided Profits 4,152,785 3,887,759
Net Unrealized Appreciation on Available
for Sale Securities, Net of Tax of
$68,671 and $50,046, Respectively 103,004 75,070
---------------------------
Total Shareholders' Equity 5,501,502 5,208,542
---------------------------
Total Liabilities and Shareholders' Equity $ 38,938,823 $ 33,959,191
===========================
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE FINANCIAL STATEMENTS
<PAGE> 84
SHAWNEE BANK, INC.
STATEMENTS OF INCOME
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 and 1994
<TABLE>
1996 1995 1994
INTEREST INCOME: ----------- ----------- -----------
<S> <C> <C> <C>
Interest and Fees on Loans $ 1,475,384 $ 1,377,695 $ 1,237,539
Interest on Available for Sale Securities 822,289 603,131 849,368
Interest on Held to Maturity Securities 322,888 461,197 394,873
Interest on Federal Funds Sold 53,186 50,940 36,183
Interest on Deposits in Banks 24,121 17,325 20,512
Other Interest 2,217 1,088 672
---------------------------------------
Total Interest Income 2,700,085 2,511,376 2,539,147
---------------------------------------
INTEREST EXPENSE:
Interest on Deposits 1,131,471 1,042,187 866,009
Interest on Federal Funds Purchased and
Securities Sold Under Agreements to
Repurchase 100,146 71,171 66,032
---------------------------------------
Total Interest Expense 1,231,617 1,113,358 932,041
---------------------------------------
Net Interest Income 1,468,468 1,398,018 1,607,106
---------------------------------------
Provision for Loan Losses
(Note 4) - - -
---------------------------------------
Net Interest Income after Provision
for Loan Losses 1,468,468 1,398,018 1,607,106
---------------------------------------
OTHER INCOME:
Net Realized Gains on Sales
of Available for Sale Securities 19,480 15,059 21,142
Net Realized Gains on Sales of
Held to Maturity Securities - - 178
Service Charges and Fees 214,602 138,397 127,356
Other Operating Income 28,973 24,188 27,552
---------------------------------------
Total Other Income 263,055 177,644 176,228
---------------------------------------
Income Before Other Expenses 1,731,523 1,575,662 1,783,334
---------------------------------------
OTHER EXPENSES:
Salaries and Employee Benefits 509,880 490,180 468,579
Premises and Equipment Expenses 127,760 135,171 141,323
Other Operating Expenses 283,705 272,922 326,967
---------------------------------------
Total Other Expenses 921,345 898,273 936,869
---------------------------------------
Net Income before Income Taxes 810,178 677,389 846,465
Applicable Income Taxes (Note 8) 256,909 215,407 284,840
---------------------------------------
Net Income $ 553,269 $ 461,982 $ 561,625
=======================================
Earnings per Share $ 17.28 $ 14.42 $ 17.54
=======================================
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE FINANCIAL STATEMENTS
<PAGE> 85
SHAWNEE BANK, INC.
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 and 1994
<TABLE>
Net Unrealized
Appreciation
(Depreciation) Total
Capital Capital Undivided on Available for Shareholders'
Stock Surplus Profits Sale Securities Equity
-------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Balance-January 1, 1994 $320,270 $925,443 $3,152,394 $ -- $4,398,107
Net Income 1994 561,625 561,625
Cash Dividend
$4.50 per Share (144,121) (144,121)
Net Change in
Unrealized
Appreciation (Depreciation)
on Available for
Sale Securities,
Net of Taxes (277,312) (277,312)
--------------------------------------------------------------
Balance-December 31, 1994 320,270 925,443 3,569,898 (277,312) 4,538,299
Net Income 1995 461,982 461,982
Cash Dividend
$4.50 per Share (144,121) (144,121)
Net Change in
Unrealized
Appreciation (Depreciation)
on Available for
Sale Securities,
Net of Taxes 352,382 352,382
--------------------------------------------------------------
Balance-December 31, 1995 320,270 925,443 3,887,759 75,070 5,208,542
Net Income 1996 553,269 553,269
Cash Dividend
$9.00 per Share (288,243) (288,243)
Net Change in
Unrealized
Appreciation (Depreciation)
on Available for
Sale Securities,
Net of Taxes 27,934 27,934
--------------------------------------------------------------
Balance-December 31, 1996 $320,270 $925,443 $4,152,785 $103,004 $5,501,502
==============================================================
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE FINANCIAL STATEMENTS
<PAGE> 86
SHAWNEE BANK, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
<TABLE>
1996 1995 1994
---- ---- ----
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $553,269 $461,982 $561,625
Adjustments to Reconcile Net Income to
Net Cash Provided by Operating Activities:
Depreciation 39,316 51,943 53,704
Provision for Deferred Taxes (985) (6,872) (6,249)
Net Realized Gains on Available
for Sale Securities (19,480) (15,059) (21,142)
Net Realized Gains on
Held to Maturity Securities - - (178)
Amortization of Premiums and Accretion
of Discounts on Available for Sale
Securities, Net (10,557) (32,783) (23,557)
Amortization of Premiums and Accretion
of Discounts on Held to Maturity
Securities, Net 3,836 5,253 (18,762)
Changes in Operating Assets and Liabilities:
Increase (Decrease) in Discount on RE
Loans Purchased (564) (564) 4,796
(Increase) Decrease in Interest Receivable (11,087) 40,180 7,451
(Increase) Decrease in Prepaid Expenses (4,773) (15,057) 6,305
Increase (Decrease) in Accrued Taxes
and Other Expenses 2,280 (22,849) (27,462)
Increase in Interest Payable 105,598 47,096 42,577
------------------------------------
Net Cash Provided by Operating Activities 656,853 513,270 579,108
------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net (Increase) Decrease in Interest
Bearing Deposits with Banks 198,000 (197,000) 99,000
Net Decrease in Federal Funds Sold 240,000 610,000 130,000
Purchases of Available for Sale Securities (7,102,271)(6,171,155) --
Proceeds from Sales of Available for
Sale Securities 2,948,815 6,092,117 7,482,721
Purchases of Held to Maturity Securities - (254,142) (7,398,264)
Proceeds from Maturities of Held
to Maturity Securities 2,323,743 972,871 1,586,154
Purchases of Federal Home Loan Bank Stock (286,500) - (89,050)
Proceeds from Sales of Federal Home Loan
Bank Stock 103,900 2,600 9,300
Purchases of Bank Premises and Equipment (19,520) (17,500) (17,456)
Net (Increase) Decrease in Loans (3,245,123) 404,139 (1,347,819)
-----------------------------------------
Net Cash Provided by (Used in)
Investing Activities $(4,838,956)$1,441,930 $454,586
-----------------------------------------
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE FINANCIAL STATEMENTS
<PAGE> 87
SHAWNEE BANK, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1996, 1995 AND 1994
(Continued)
<TABLE>
1996 1995 1994
---- ---- ----
CASH FLOWS FROM FINANCING
ACTIVITIES:
<S> <C> <C> <C>
Net Increase (Decrease) in Demand Deposits $184,080 ($331,427) $669,024
Net Increase (Decrease) in Savings Deposits 169,285 (862,588) (965,879)
Net Increase in CD's 1,348,852 1,023,543 770,772
Net Decrease in Repurchase Agreements (135,694) (1,884,630) (1,503,928)
Net Advances Received from Federal
Home Loan Bank 3,000,000 - -
Dividends Paid (288,243) (144,121) (144,121)
-----------------------------------
Net Cash Provided by (Used in)
Financing Activities 4,278,280 (2,199,223) (1,174,132)
Net Increase (Decrease) in Cash
and Cash Equivalents 96,177 (244,023) (140,438)
Cash and Cash Equivalents at
Beginning of Year 1,075,169 1,319,192 1,459,630
-----------------------------------
Cash and Cash Equivalents at
End of Year $1,171,346 $1,075,169 $1,319,192
===================================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash Paid During the Year For:
Interest $1,126,020 $1,066,263 $ 884,296
===================================
Income Taxes $ 258,667 $ 216,951 $ 307,663
===================================
</TABLE>
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART
OF THESE FINANCIAL STATEMENTS
<PAGE> 88
SHAWNEE BANK, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
Note 1 - Summary of Significant Accounting Policies:
- ---------------------------------------------------
(A) Nature of Operations
- -------------------------
Shawnee Bank, Inc. operates under a State of West Virginia
bank charter and provides full banking services. As a state
bank, the Bank is subject to regulation of the West Virginia
Division of Banking and the Federal Deposit Insurance
Corporation. The area served by Shawnee Bank's main office
located in Dunbar includes Kanawha and Putnam counties.
(B) Basis of Accounting
- ------------------------
The accompanying financial statements are presented in
conformity with generally accepted accounting principles and
conform with general practices within the banking industry.
(C) Use of Estimates
- ---------------------
The preparation of financial statements in conformity with
generally accepted accounting principles requires management to
make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
(D) Investment Securities
- --------------------------
The Bank's investments in securities are classified in two
categories and are accounted for as follows:
Held to Maturity Securities: Bonds, notes and debentures
for which the Bank has the positive intent and ability to
hold to maturity are reported at cost, adjusted for
amortization of premiums and accretion of discounts, which
are recognized in interest income using the interest method
over the period of maturity.
Available for Sale Securities: Available for sale
securities consist of bonds, notes, debentures, and certain
equity securities not classified as trading securities or as
held to maturity securities. Unrealized holding gains and
losses, net of tax, on available for sale securities are
reported as a net amount in a separate component of
shareholders' equity until realized. Gains and losses on
the sale of available for sale securities are determined
using the specific-identification method.
<PAGE> 89
SHAWNEE BANK, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
(Continued)
Declines in the fair value of individual held-to-maturity
and available-for-sale securities below their cost that are
other than temporary would result in write-downs of the
individual securities to their fair value. The related
write-downs would be included in earnings as realized
losses. The Bank had no such losses for the years ended
December 31, 1996, 1995 and 1994.
(E) Revenue Recognition
- ------------------------
Interest on loans is accrued and credited to operations
based upon the principal amount outstanding. The accrual of
interest income generally is discontinued when a loan becomes 90
days past due as to principal or interest. When interest
accruals are discontinued, unpaid interest credited to income in
the current year is reversed, and interest accrued in prior years
is charged to the allowance for loan losses. Management may
elect to continue the accrual of interest when the estimated net
realizable value of collateral is sufficient to cover the
principal balance and accrued interest, and the loan is in the
process of collection.
Credit life insurance commissions on loans (principally
short-term installment loans) are being recognized as collected.
The use of this method of recognition does not produce results
which are materially different from that which would have been
produced if such commissions were deferred and amortized as an
adjustment of loan yield over the life of the related loan.
(F) Concentrations' of Credit Risk
- -----------------------------------
The Bank grants installment, commercial, and residential
loans to customers primarily in Kanawha, Putnam and adjacent
counties in West Virginia.
(G) Bank Premises and Equipment
- --------------------------------
Bank premises and equipment are carried at original cost,
less accumulated depreciation computed on the straight-line
method over the estimated useful lives of the assets.
<PAGE> 90
SHAWNEE BANK, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
(Continued)
(H) Allowance for Loan Losses
- ------------------------------
The allowance for loan losses is maintained at a level
considered adequate to provide for potential loan losses. The
allowance is increased by provisions charged to operating expense
and reduced by net charge-offs. The level of the allowance is
based on the Treasury tax formula, which is the method used to
compute the amount of loan losses that is deductible for federal
income tax purposes.
(I) Income Taxes
- -----------------
The Bank follows the practice of accruing federal income
taxes based on income reported for financial statement purposes.
In the event income or expenses are recognized in different
periods for tax, as opposed to financial purposes, deferred taxes
are provided on such timing differences.
(J) Off Balance Sheet Financial Instruments
- --------------------------------------------
In the ordinary course of business, the Bank has entered
into off balance sheet financial instruments consisting of
commitments to extend credit, commercial letters of credit and
standby letters of credit. Such financial instruments are
recorded in the financial statements when they become payable.
(K) Earnings Per Share
- -----------------------
Earnings per share computations are based upon the weighted
average number of shares outstanding during the year. (32,027
shares in 1996, 1995 and 1994).
(L) Cash and Cash Equivalents
- ------------------------------
For the purpose of presentation in the statements of cash
flows, cash and cash equivalents are defined as those amounts
included in the statements of financial condition caption "Cash
and Due from Banks."
(M) Reclassifications
- -----------------------
Certain amounts in 1995 and 1994 have been reclassified to
conform with the 1996 presentation.
<PAGE> 91
SHAWNEE BANK, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
(Continued)
Note 2 - Cash Concentrations:
- -----------------------------
The Bank had the following amounts due from correspondent
banks at December 31, 1996:
Due from Federal
Accounts Funds Sold Total
-------- ---------- ---------
Federal Reserve Transit/
Huntington Banks $702,334 $ 0 $702,334
======== ========= ========
Huntington Banks
West Virginia $ 28,644 $ 555,000 $583,644
======== ========= ========
Federal funds sold are generally unsecured by the correspondent bank.
Cash balances in due from accounts above $100,000 are in excess of federally
insured limits.
Note 3 - Investment Securities:
- -------------------------------
The carrying amounts of investment securities as shown in
the statements of financial condition of the Bank and their
approximate full values at December 31, 1996 and 1995, are as
follows:
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
-------- ---------- ---------- ------
<TABLE>
December 31, 1996:
- ------------------
<S> <C> <C> <C> <C>
Available for Sale Securities-
U.S. Government and
Agency Securities $10,426,655 $ 83,640 $(11,589) $10,498,706
State and Municipal
Securities 458,684 41,538 (0) 500,222
Mortgage-backed Securities 2,453,156 60,700 (5,246) 2,508,610
----------- -------- -------- ----------
Totals $13,338,495 $185,878 $(16,835) $13,507,538
=========== ======== ========= ===========
Held to Maturity Securities-
U.S. Government and
Agency Securities $ 1,831,651 $ 0 $(18,651) $ 1,813,000
State and Municipal
Securities 1,255,442 12,032 (26,248) 1,241,226
Mortgage-backed Securities 1,914,470 0 (16,326) 1,898,144
----------- ------- --------- -----------
Totals $ 5,001,563 $ 12,032 $(61,225) $ 4,952,370
=========== ======= ========= ===========
</TABLE>
<PAGE> 92
SHAWNEE BANK, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
(Continued)
<TABLE>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
---------- ---------- ----------- --------
December 31, 1995:
Available for Sale Securities-
<S> <C> <C> <C> <C>
U.S. Government and
Agency Securities $ 6,009,671 $ 59,156 $ (257) $ 6,068,570
State and Municipal
Securities 237,907 36,414 (0) 274,321
Mortgage-backed Securities 2,907,424 53,832 (13,672) 2,947,584
----------- -------- --------- -----------
Totals $ 9,155,002 $149,402 $(13,929) $ 9,290,475
=========== ======== ========= ===========
Held to Maturity Securities-
U.S. Government and
Agency Securities $ 3,327,591 $ 8,841 $(23,725) $ 3,312,707
State and Municipal
Securities 2,704,827 525 (20,310) 2,685,042
Mortgage-backed Securities 1,283,742 25,667 (30,679) 1,278,730
----------- -------- --------- -----------
Totals $ 7,316,160 $ 35,033 $(74,714) $ 7,276,479
=========== ======== ========= ===========
</TABLE>
Effective November 15, 1995, the Financial Accounting
Standards Board permitted a one-time opportunity for institutions
to reassess the appropriateness of the designations of all
securities held upon the initial application of the special
report, "A Guide to Implementation of Statement 115 on Accounting
for Certain Investments in Debt and Equity Securities." Any
resulting redesignations were to be made in conjunction with the
special report and were to occur no later than December 31, 1995.
At November 30, 1995, the Bank elected to transfer
securities with carrying amounts of $2,479,383 from held to
maturity to available for sale. Additionally, transfers of
securities with fair values of $2,312,308 were transferred from
available for sale to held to maturity.
Investment securities with carrying amounts of $667,918 and
$538,845 and market values of $691,138 and $538,687,
respectively, were pledged to secure public deposits and for
other purposes as required or permitted by law at December 31,
1996 and 1995.
<PAGE> 93
SHAWNEE BANK, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
(Continued)
Gross realized gains and gross realized losses on sales of
available for sale securities are as follows:
1996 1995 1994
Gross realized gains: ---- ---- ----
U.S. Government and Agency Securities $19,480 $14,285 $98,766
Mortgage-backed Securities 0 774 12,846
------- ------- --------
Totals $19,480 $15,059 $111,612
======= ======= ========
Gross realized losses:
U.S. Government and Agency Securities $ 0 $ 0 $ 35,764
Mortgage-backed Securities 0 0 54,706
------- ------- --------
Totals $ 0 $ 0 $ 90,470
======= ======= ========
At December 31, 1994, gross realized losses on sales
of securities to be held to maturity totaled $2,540. This loss
resulted from the sale of a $500,000 U.S. Treasury Note, 4.125%
coupon, maturing 5/31/95, with amortized cost of $496,993 and
proceeds of $494,453. This U.S. Treasury Note was sold to allow
for the purchase of a $500,000 West Virginia Parkways, Economic
Development and Tourism Authority Tamarack Project Revenue Bond-
Series 1994, which is a WV Bank Qualified - Tax Exempt Issue.
The decision to sell the U.S. Treasury Note was made upon
realizing that waiting until the May 31 maturity would risk the
availability of the Tamarack Project Revenue Bond. The bond sold
was misclassified at the time of the purchase; it should have
been placed in available for sale for liquidity purposes. This
U.S. Treasury Note was chosen to sell because it had the earliest
maturity of any bond in the portfolio.
This trade was discussed with FDIC bank examiners, and
it was determined that the sale of this U.S. Treasury Note would
not taint the remainder of the held to maturity portfolio.
<PAGE> 94
SHAWNEE BANK, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
(Continued)
The amortized cost and estimated market value of debt
securities at December 31, 1996, by contractual maturities, are
shown below. Expected maturities may differ from contractual
maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
Held to Maturity Available for Sale
Securities Securities
-------------------- -----------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
---------- --------- ------------ ---------
Due in One Year or Less $ 0 $ 0 $ 0 $ 0
Due From One Year to
Five Years 1,628,304 1,612,743 5,963,918 6,001,037
Due From Five Years to
Ten Years 2,627,236 2,581,572 5,500,525 5,591,229
Due After Ten Years 746,023 758,055 1,874,052 1,915,272
---------- ---------- ---------- ----------
Totals $5,001,563 $4,952,370 $13,338,495 $13,507,538
========== ========== =========== ===========
Note 4 - Loans:
- ---------------
Major classifications of loans at December 31, 1996 and 1995, are as
follows:
1996 1995
----------- -----------
Commercial $ 6,006,955 $ 3,016,254
Real Estate - Mortgage 7,245,300 7,331,229
Consumer Installment 4,268,150 4,003,671
----------- -----------
Total Loans $17,520,405 $14,351,154
Unearned Discount (106,562) (166,339)
Unearned Credit Life (8,128) (11,533)
Allowance for Loan Losses (126,687) (139,941)
------------ ------------
Loans, Net $17,279,028 $14,033,341
============ ============
Changes in the allowance for loan losses are as follows:
1996 1995 1994
---- ---- ----
Balance - January 1, $139,941 $143,436 $152,047
Loans Charged Off (14,135) (4,281) (8,611)
Provision Charged to Operations 0 0 0
Recoveries on Loans Previously
Charged Off 881 786 0
-------- -------- --------
Balance - December 31, $126,687 $139,941 $143,436
======== ======== ========
<PAGE> 95
SHAWNEE BANK, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
(Continued)
Note 5 - Bank Premises and Equipment:
- -------------------------------------
Major classifications of bank premises and equipment at
December 31, 1996 and 1995, are summarized as follows:
1996 1995
---- ----
Buildings and Improvements $526,362 $526,362
Equipment, Furniture and Fixtures 328,105 308,585
Less: Accumulated Depreciation 577,737 538,421
--------- --------
Total Depreciable Assets-Net $276,730 $296,526
Land 220,000 220,000
-------- --------
Total-Bank Premises and Equipment $496,730 $516,526
======== ========
Total depreciation expense amounted to $39,316, $51,943 and
$53,704 for the years ended December 31, 1996, 1995 and 1994, respectively.
Note 6 - Deposits:
- ------------------
The major categories of deposits at December 31, 1996 and
1995, are as follows:
1996 1995
---- ----
Noninterest Bearing $ 4,109,368 $ 3,733,753
----------- -----------
Interest Bearing:
Money Market Accounts $ 4,987,841 $ 5,179,376
Savings 4,227,145 4,062,098
Time and Certificates of Deposit 13,878,740 13,626,049
Certificates of Deposit Over $100,000 2,472,709 1,372,310
----------- -----------
Total Interest Bearing Deposits $25,566,435 $24,239,833
----------- -----------
Total Deposits $29,675,803 $27,973,586
=========== ===========
<PAGE> 96
SHAWNEE BANK, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
(Continued)
At December 31, 1996, scheduled maturities of time and
certificates of deposit were as follows:
1997 $4,812,917
1998 1,837,109
1999 9,351,683
2000 69,139
2001 and Thereafter 280,601
----------
Total $16,351,449
===========
Note 7 - Short-Term Borrowings:
- -------------------------------
The Bank is a member of the Federal Home Loan Bank (FHLB).
A benefit of membership in the FHLB is the availability of short-
term and long-term borrowings, in the form of collateralized
advances. The available lines of credit for short-term
borrowings, at prevailing market interest rates, as of December
31, 1996, approximate $10,000,000 with principal balances
outstanding of $3,000,000.
Interest paid on short-term borrowings for the year ended
December 31, 1996, amounted to $85,614.
Note 8 - Income Taxes:
- ----------------------
The elements of applicable income tax expense are summarized
as follows:
1996 1995 1994
---- ---- ----
Currently Payable:
Federal $235,973 $202,162 $269,372
State 21,921 15,505 21,717
-------- -------- --------
Totals $257,894 $217,667 $291,089
-------- -------- --------
Deferred:
Federal $ (877) $ (1,509) $ (5,566)
State (108) (751) (683)
--------- --------- ---------
Totals $ (985) $ (2,260) $ (6,249)
--------- --------- --------
Total Applicable Income Taxes $256,909 $215,407 $284,840
========= ========= =========
<PAGE> 97
SHAWNEE BANK, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
(Continued)
Deferred taxes are a result of differences in depreciation
for book and tax purposes and accretion of discount on investment
securities, which is not included in income for tax purposes
until the related security matures or is sold.
The following is a reconciliation of federal income tax to
the amounts computed at the statutory rate:
<TABLE>
1996 1995 1994
------------------ ---------------- ----------------
Amount % Amount % Amount %
-------- ------ -------- ------ -------- ------
<S> <C> <C> <C> <C> <C> <C>
Tax on Income at Top
Marginal Statutory Rate $275,461 34.00% $230,312 34.00% $287,798 34.00%
Tax-Exempt Income, Net (34,064) (4.21) (27,738) (4.09) (17,142) (2.02)
State Income Tax Net of
Federal Tax Benefit 14,468 1.79 10,233 1.51 14,334 1.69
Other 1,044 .13 2,600 .38 (150) (.02)
--------- ------ -------- ----- --------- -----
Totals $256,909 31.71% $215,407 31.80% $284,840 33.65%
========= ====== ======== ===== ========= ======
Note 9 - Commitments and Contingent Liabilities:
- -----------------------------------------------
In the normal course of business, there are outstanding
various commitments and contingent liabilities, such as
guarantees, commitments to extend credit, etc., which are not
reflected in the accompanying financial statements. At December
31, 1996, the Bank was exposed to credit risk amounts of
$2,449,140 and outstanding letters of credit of $53,000. The
Bank does not anticipate any material losses as a result of the
commitments.
The Bank is currently contesting a state Business and
Occupation tax assessment of approximately $21,500. In the event
the Bank is unsuccessful in its efforts, it would be liable for
the $21,500 plus penalties and interest.
Note 10 - Dividend and Capital Restrictions:
- -------------------------------------------
State banking regulations require approval from the
Commissioner of Banking prior to declaring dividends in excess of
the current year's net income, combined with retained net income
for the two preceding calendar years. Amounts available for
distribution during 1997 without regulatory approval are
approximately $582,887, plus an additional amount equal to its
retained net income up to the date of any such declaration.
<PAGE> 98
SHAWNEE BANK, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
(Continued)
The Bank is also required to maintain minimum amounts of
capital to total "risk weighted" assets, as defined by bank
regulations. The Bank is required to have minimum Tier 1 and
total capital ratios of 4.00% and 8.00%, respectively. The
Bank's actual ratios at December 31, 1996, were 19.65% and
27.60%, respectively. The Bank's tangible common equity ratio at
December 31, 1996, was 13.78%.
Note 11 - Loans to Related Parties:
- ----------------------------------
The Bank makes loans to its directors, officers, and
businesses which are partially or substantially owned by
directors/officers of the Bank. The loans are made in the
ordinary course of business at the Bank's normal credit terms,
including interest rates and collateral, and do not represent
more than the normal risk of collection. At December 31, 1996
and 1995, outstanding loans of this nature approximated $826,584
and $438,146, respectively.
Activity is summarized as follows:
1996 1995
---- ----
Balance - January 1, $ 438,146 $ 596,471
New Loans 1,013,829 64,144
Loan Repayments and Other Reductions (625,391) (222,469)
----------- ----------
Balance - December 31, $ 826,584 $ 438,146
=========== ==========
Note 12 - Disclosures about Fair Value of Financial Instruments:
- ----------------------------------------------------------------
Effective for fiscal years ending after December 15, 1995,
FASB Statement 107, applying to entities having total assets of
less than $150 million, requires disclosure of fair value
information about financial instruments, whether or not
recognized in the statements of financial condition, for which it
is practicable to estimate that value. In cases where quoted
market prices are not available, fair values are based on
estimates using present value or other valuation techniques.
Those techniques are significantly affected by the assumptions
used, including the discount rate and estimates of future cash
flows. In that regard, the derived fair value estimates cannot
be substantiated by comparison to independent markets and, in
many cases, could not be realized in immediate settlement of the
instrument. Statement 107 excludes certain financial instruments
and all nonfinancial instruments from its disclosure
requirements. Accordingly, the aggregate fair value amounts
presented do not represent the underlying value of the Bank.
<PAGE> 99
SHAWNEE BANK, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
(Continued)
The following methods and assumptions were used by the Bank
in estimating its fair value disclosures for financial
instruments:
Cash and Due from Banks: The carrying amounts reported in
the statements of financial condition for cash and due from
banks approximate that asset's fair value.
Interest Bearing Deposits in Banks: The carrying amounts
reported in the statements of financial condition for
interest bearing deposits in other banks approximate that
asset's fair value.
Federal Funds Sold: The carrying amounts reported in the
statements of financial condition for federal funds sold
approximate that asset's fair value.
Investment Securities: Fair values for investment
securities are based on quoted market prices where
available. If quoted market prices are not available, fair
values are based on quoted market prices of similar
instruments.
Loans: The fair values of fixed rate commercial, real
estate, and consumer loans are estimated using discounted
cash flow analysis, using interest rates currently being
offered for loans with similar terms to borrowers of similar
credit quality. For variable rate loans that reprice
frequently and with no significant change in credit risk,
fair values are based on carrying values.
Deposits: The estimated fair values of demand deposits
(i.e. interest and noninterest checking, passbook savings,
and certain types of money market accounts) are, by
definition, equal to their carrying amounts. Fair values
for fixed-rate certificates of deposit are estimated using a
discounted cash flow calculation that applies interest rates
currently being offered on certificates to a schedule of
aggregated expected monthly maturities on time deposits.
Repurchase Agreements: The carrying amounts in the
statements of financial condition for repurchase agreements
approximate that liability's fair values.
Accrued Interest: The carrying amounts of accrued interest
approximate that liability's fair values.
Short-Term Borrowings: The carrying amounts of short-term
borrowings approximate that liability's fair value.
<PAGE> 100
SHAWNEE BANK, INC.
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996, 1995 AND 1994
(Continued)
The estimated fair values of the Bank's financial
instruments at December 31, 1996 and 1995, are as follows:
</TABLE>
<TABLE>
1996 1995
------------------------- ------------------------
Carrying Fair Carrying Fair
Amounts Value Amounts Value
------------ ------------- ------------ -----------
<S> <C> <C> <C> <C>
Financial Assets:
Cash and Due from Banks $ 1,171,346 $ 1,171,346 $ 1,075,169 $ 1,075,169
Interest Bearing Deposits in Banks 297,000 297,000 495,000 495,000
Federal Funds Sold 555,000 555,000 795,000 795,000
Investment Securities 18,797,601 18,748,408 16,712,535 16,672,854
Loans 17,279,028 17,531,175 14,033,341 14,203,131
Financial Liabilities:
Deposits 29,675,803 29,543,842 27,973,586 27,943,342
Repurchase Agreements 299,541 299,541 435,235 435,235
Accrued Interest Payable 359,161 359,161 253,563 253,563
Short-Term Borrowings 3,000,000 3,000,000 0 0
</TABLE>
The carrying amounts in the preceding table are included in
the statements of financial condition under the applicable
captions. The contract or notional amounts of the Bank's
financial instruments with off-balance-sheet risk are disclosed
in Note 9. It is not practicable to estimate the fair value of
Federal Home Loan Bank (FHLB) stock because it is not marketable.
The carrying amount of that investment is reported in the
statements of financial condition.
Note 13 - Other Matters:
- ------------------------
The Bank entered into a Definitive Agreement and Plan of
Merger on December 19, 1996, with WesBanco, Inc. providing for
the acquisition of the Bank by WesBanco through a merger of the
Bank into WesBanco Bank South Hills, a wholly owned subsidiary of
WesBanco, Inc.
Pursuant to the terms of the Agreement, shareholders of the
Bank will receive 10.094 shares of WesBanco common stock for each
share of the Bank's common stock. The transaction, which is
subject to, among other things, approval by the appropriate
regulatory authorities and the stockholders of the Bank, is
expected to be completed during the second quarter of 1997.
"This statement has not been reviewed, or confirmed for
accuracy, or relevance, by the Federal Deposit Insurance
Corporation."
<PAGE> 101
APPENDIX I
W.Va. Code Annot. Section 31-1-123
(a) Any shareholder electing to exercise his right to
dissent, pursuant to section one hundred twenty-two ( 31-1-122)
of this article, shall file with the Corporation, prior to or at
the meeting of shareholders at which such proposed corporate
action is submitted to a vote, a written objection to such
proposed corporate action. If such proposed corporate action be
approved by the required vote and such shareholder shall not have
voted in favor thereof, such shareholder may, within ten days
after the date on which the vote was taken or if a corporation is
to be merged without a vote of its shareholders into another
corporation, any of its shareholders may, within fifteen days
after the plan of such merger shall have been mailed to such
shareholders, make written demand on the Corporation, or, in the
case of a merger or consolidation, on the surviving or new
corporation, domestic or foreign, or payment of the fair value of
such shareholder's shares, and, if such proposed corporate action
is effected, such corporation shall pay to such shareholder, upon
surrender of the certificate or certificates representing such
shares, the fair value thereof as of the day prior to the date on
which the vote was taken approving the proposed corporate action,
excluding any appreciation or depreciation in anticipation of
such corporate action. Any shareholder failing to make demand
within the ten-day period shall be bound by the terms of the
proposed corporate action. Any shareholder making such demand
shall thereafter be entitled only to payment as in this section
provided and shall not be entitled to vote or to exercise any
other rights of a shareholder.
(b) No such demand may be withdrawn unless the Corporation
shall consent thereto. If, however, such demand shall be
withdrawn upon consent, or if the proposed corporate action shall
be abandoned or rescinded or the shareholders shall revoke the
authority to effect such action, or if, in the case of a merger,
on the date of the filing of the articles of merger, the
surviving corporation is the owner of all the outstanding shares
of the other corporations, domestic and foreign, that are parties
to the Merger, or if no demand or petition for the determination
of fair value by a court of general civil jurisdiction have been
made or filed within the time provided in subsection (e) of this
section, or if a court of general civil jurisdiction shall
determine that such shareholder is not entitled to the relief
provided by this section, then the right of such shareholder to
be paid the fair value of his shares shall cease and his status
as a shareholder shall be restored, without prejudice to any
corporate proceedings which may have been taken during the
interim.
(c) Within ten days after such corporate action is
effected, the corporation, or, in the case of a merger or
consolidation, the surviving or new corporation, domestic or
foreign, shall give written notice thereof to each dissenting
shareholder who has made demand as herein provided, and shall
make a written offer to each shareholder to pay for such shares
at a specified price deemed by such Corporation to be fair value
thereof. Such notice and offer shall be accompanied by a balance
sheet of the Corporation the shares of which the dissenting
shareholder holds, as of the latest available date and not more
than twelve months prior to the making of such offer, and a
profit and loss statement of such corporation for the twelve
months' period ended on the date of such balance sheet.
<PAGE> 102
(d) If within thirty days after the date on which such
corporate action is effected the fair value of such shares is
agreed upon between any such dissenting shareholder and the
Corporation, payment therefor shall be made within ninety days
after the date on which such corporate action was effected, upon
surrender of the certificate or certificates representing such
shares. Upon payment of the agreed value, the dissenting
shareholder shall cease to have any interest in such shares.
(e) If within such period of thirty days, a dissenting
shareholder and the corporation do not so agree, then the
corporation shall within thirty days after receipt of written
demand from any dissenting shareholder, which written demand must
be given within sixty days after the date on which such corporate
action was effected, file a complaint in a court of general civil
jurisdiction requesting that the fair value of such shares be
found and determined, or the corporation may file such complaint
at any time within such sixty-day period at its own election.
Such complaint shall be filed in any court of general civil
jurisdiction in the county in which the principal office of the
corporation is situated, or, if there be no such office in this
State, in the county in which any dissenting shareholder resides
or is found or in which the property of such corporation, or any
part of it, may be. If the corporation shall fail to institute
such proceedings, any dissenting shareholder may do so in the
name of the Corporation. All dissenting shareholders wherever
residing, may be made parties to the proceedings as an action
against their shares quasi in rem. A copy of the complaint shall
be served on each dissenting shareholder who is a resident of
this State in the same manner as in other civil actions.
Dissenting shareholders who are nonresidents of this State shall
be served a copy of the complaint by registered or certified
mail, return receipt requested. In addition, service upon such
nonresident shareholders shall be made by publication, as
provided in Rule 4(e)(2) of the West Virginia Rules of Civil
Procedures. All shareholders who are parties to the proceeding
shall be entitled to judgment against the Corporation for the
amount of the fair value of their shares. The court may, if it
so elects, appoint one or more persons as appraisers to receive
evidence and recommend a decision on the question of fair value.
The appraisers shall have such power and authority as shall be
specified in the order of their appointment or any subsequent
appointment. The judgment shall be payable only upon and
concurrently with the surrender to the Corporation of the
certificate or certificates representing such shares. Upon
payment of the judgment, the dissenting shareholder shall cease
to have any interest in such shares.
The judgment shall include an allowance for interest at such
rate as the court may find to be fair and equitable in all the
circumstances, from the date on which the vote was taken on the
proposed corporate action to the date of payment.
The costs and expenses of any such proceeding shall be
determined by the court and shall be assessed against the
Corporation, but all or any part of such costs and expenses may
be apportioned and assessed as the court may deem equitable
against any or all of the dissenting shareholders who are parties
to the proceeding to whom the Corporation shall have made an
offer to pay for the shares if the Court shall find that the
action of such shareholders in failing to accept such offer was
arbitrary or vexatious or not in good faith. Such expenses shall
include reasonable compensation for and reasonable expenses of
the appraisers, but shall exclude the fees
<PAGE> 103
and expenses of counsel for any experts employed by any part; but
if the fair value of the shares as determined materially exceeds the
amount which the corporation offered to pay therefore, or if no offer
was made, the court in its discretion may award to any shareholder who
is a party to the proceeding such sum as the court may determine to be
reasonable compensation to any expert or experts employed by the shareholder
in the proceeding. Any party to the proceeding may appeal any judgment or
ruling of the court as in other civil cases.
(f) Within twenty days after demanding payment for his
shares, each shareholder demanding payment shall submit the
certificates representing his shares to the Corporation for
notation thereon that such demand has been made. His failure to
do so shall, at the option of the Corporation, terminate his
rights under this section unless a court of general civil
jurisdiction, for good and sufficient cause shown, shall
otherwise direct. If shares represented by a certificate on
which notation has been so made shall be transferred, each new
certificate issued therefor shall bear similar notation, together
with the name of the original dissenting holder of such shares,
and a transferee of such shares shall acquire by such transfer no
rights in the Corporation other than those which the original
dissenting shareholder had after making demand for payment of the
fair value thereof.
(g) Shares acquired by a corporation pursuant to payment of
the agreed value therefor or to payment of the judgment entered
therefor, as in this section provided, may be held and disposed
of by such corporation as in the case of other treasury shares,
except that, in the case of a merger or consolidation, they may
be held and disposed of as the plan of merger or consolidation
may otherwise provide.
<PAGE> 104
APPENDIX II
AGREEMENT AND PLAN OF MERGER
----------------------------
THIS AGREEMENT AND PLAN OF MERGER (hereinafter called
"Agreement"), made and entered into as of the 19th day of
December, 1996, 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, and SHAWNEE BANK, INC., a West Virginia
banking corporation, with its principal place of business located
at 11th Street and Myers Avenue, Dunbar, West Virginia, 25064,
(hereinafter called "Shawnee") party of the second part, and
WESBANCO BANK SOUTH HILLS (hereinafter called "South Hills"), a
West Virginia banking corporation and a wholly-owned subsidiary
of Wesbanco, party of the third part.
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, Shawnee is a West Virginia banking corporation duly
organized and validly existing under the laws of the State of
West Virginia, and
WHEREAS, South Hills is a West Virginia banking corporation
duly organized and validly existing under the laws of the State
of West Virginia which corporation shall be a party to the merger
contemplated by 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;
<PAGE> 105
and the Board of Directors of South Hills by a majority vote of all
of the members and shareholders thereof, has approved this Agreement
and authorized the execution hereof in counterparts, and
WHEREAS, the Board of Directors of Shawnee, by a majority
vote of all of the members thereof, has approved this Agreement
and 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 Shawnee and its shareholders for
Shawnee to enter into this Agreement to become affiliated with
Wesbanco, and
WHEREAS, it is proposed that Wesbanco, Shawnee and South
Hills enter into this Agreement whereby Shawnee will merge with
and into South Hills and the outstanding shares of common stock
of Shawnee ("Shawnee Common Stock") will be converted into shares
of common stock of Wesbanco ("Wesbanco Common Stock"),
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
SOUTH HILLS
-----------
1.1 Execution of Agreement. Wesbanco shall cause South
----------------------
Hills 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 South Hills.
1.2 Voting of South Hills Shares. Wesbanco, as sole
-----------------------------
shareholder of South Hills, shall vote all of the shares of South
Hills in favor of the Merger.
<PAGE> 106
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,
Shawnee shall merge with South Hills (the "Merger"), under the
charter of South Hills. South Hills shall be the surviving
corporation (hereinafter sometimes called the "Surviving
Corporation").
2.2 Effect of Merger. At the Effective Time, the corporate
-----------------
existence of South Hills, 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 South Hills as the Surviving Corporation shall
continue to be governed by the laws of the State of West
Virginia. South Hills as the Surviving Corporation shall also
succeed to all of the rights, assets, liabilities and obligations
of Shawnee in accordance with the West Virginia Corporation Act
("WVCA"). Upon the Effective Date, (as defined in Section 11.5
hereof), the separate existence and corporate organization of
Shawnee shall cease.
2.3 Closing. Wesbanco, Shawnee and South Hills 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 11.4 hereof (the "Closing" and the "Closing Date").
2.4 Shawnee's Obligations. Shawnee 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
<PAGE> 107
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 Kanawha 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.
2.6 Benefit Plans. Upon the Effective Date, Wesbanco shall
--------------
provide for the immediate participation by the employees of
Shawnee in the benefit programs provided by Wesbanco to its
employees generally. Additionally, Wesbanco shall credit the
employees of Shawnee with vesting credit in the Wesbanco ESOP
portion of the Wesbanco KSOP Plan for their years of service with
Shawnee. The Shawnee employees shall also become participants in
the Wesbanco Defined Pension Plan as of the Effective Date of the
Merger with dates of service, for both vesting and benefit
purposes, beginning as of such Effective Date.
<PAGE> 108
SECTION 3
ARTICLES OF INCORPORATION;
BYLAWS; BOARD OF DIRECTORS AND OFFICERS
---------------------------------------
3.1 South Hills. The Articles of Incorporation of South
------------
Hills, as organized, shall constitute the Articles of
Incorporation of the Surviving Corporation. The Bylaws of South
Hills as in effect on the Effective Date shall constitute the
Bylaws of the Surviving Corporation. The directors and officers
of South Hills on the Effective Date shall become the directors
and officers of the Surviving Corporation, except that R. Brawley
Tracy and Brenda H. Robertson shall be elected, as of the
Effective Date, as additional Directors of South Hills. 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.
SECTION 4
SHAREHOLDER APPROVALS
---------------------
4.1 Shawnee Shareholders' Meeting. Subject to the receipt
------------------------------
by Shawnee of the fairness opinion described in Section 11.3(c)
hereof, Shawnee shall submit the Agreement to its shareholders in
accordance with the WVCA 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,
Shawnee shall send to its shareholders the Proxy Statement
referred to in Section 13.1 hereof. Subject to the fiduciary
duties of the Board of Directors of Shawnee to Shawnee and its
shareholders, the Board of Directors of Shawnee 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 Shawnee
shareholders required to effectuate the transactions contemplated
by the Agreement.
<PAGE> 109
4.2 South Hills Shareholder Meeting. South Hills shall
--------------------------------
promptly submit the Agreement to its shareholder, Wesbanco, for
approval in accordance with the WVCA.
SECTION 5
CONVERSION OF SHARES
--------------------
5.1 Conversion, Ratio and Option. The manner of converting
-----------------------------
or exchanging the shares of South Hills and Shawnee shall be as
follows:
(a) Each share of Shawnee Common Stock issued
and outstanding immediately prior to the Effective
Time, except shares of Shawnee Common Stock issued
and held in treasury of Shawnee or beneficially
owned by South Hills or Wesbanco, other than in a
fiduciary capacity by them for others, and shares
as to which dissenters' rights are exercised
pursuant to W.Va. Code Annot. Section 31-1-122,
shall by virtue of the Merger and at the Effective
Time of the Merger:
(i) Be exchanged for and become,
without action on the part of the holder
thereof, 10.094 (Ten and Ninety-four One
Thousandths) shares of the Common Stock
of Wesbanco, 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.
(ii) No fractional shares of
Wesbanco Common Stock will be issued in
connection with the Merger. In lieu
thereof each stockholder of Shawnee
otherwise entitled to a fractional share
of Wesbanco will receive cash therefore in
<PAGE> 110
an amount based on a value of $30.50
per whole share of Wesbanco stock, at
the time of the exchange, or at the
election of such holder, shall be
entitled to purchase the remaining
fraction of such share from Wesbanco
based on such price.
(iii) In the event of any
change in Wesbanco Common Stock by
reason of stock dividends, split-ups,
mergers, recapitalizations,
combinations, exchanges of shares or the
like, the type and number of shares to
be issued pursuant to Section 5.1(a)(i)
and (ii) hereof shall be adjusted
proportionately.
(b) The issued and outstanding common stock
of South Hills shall be unaffected by the Merger.
5.2 Shares Owned by Shawnee, Wesbanco or South Hills.
-------------------------------------------------
Each share of Shawnee Common Stock issued and held in the
treasury of Shawnee or beneficially owned by Wesbanco or South
Hills, other than in a fiduciary capacity, at the Effective Time
of the Merger shall be canceled and retired, and no shares of
stock or the securities of Wesbanco shall be issuable with
respect thereto.
5.3 Exchange for Stock. On and after the Effective Date of
-------------------
the Merger, each holder of Shawnee Common Stock, upon
presentation and surrender of a certificate or certificates
therefore to the Exchange Agent (Wesbanco Bank Wheeling), shall
be entitled to receive in exchange therefore 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
<PAGE> 111
fractional share of common stock which he or she is entitled to receive,
without interest, should such shareholder not elect to purchase the remaining
fraction of such share of common stock at the price above set forth. Until
so presented and surrendered in exchange for a certificate
representing Wesbanco Common Stock, each certificate which
represented issued and outstanding shares of Shawnee 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.
5.4 Closing of Stock Transfer Books. On the Effective
--------------------------------
Date, the stock transfer books of Shawnee shall be closed, and no
shares of Shawnee Common Stock outstanding the day prior to the
Effective Date shall thereafter be transferred.
5.5 Directors' Qualifying Shares. Immediately upon
-----------------------------
completion of the conversion provided for above, the continuing
Directors of Shawnee shall maintain at least the minimum number
of shares of common stock of Wesbanco as are required to be held
as directors' qualifying shares under applicable law for
continued membership on the Board of Directors of
<PAGE> 112
South Hills.
SECTION 6
DISSENTERS RIGHTS
-----------------
6.1 Subject to the rights of Wesbanco and Shawnee, as
permitted by Section 11.1(j) 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 Shawnee issued and outstanding on the date of the
shareholders' meeting described in Sections 4.1 and 13.1 of this
Agreement and entitled to vote on this Agreement (hereinafter,
"Voting Shares"), the rights and remedies of a dissenting
shareholder under the WVCA shall be afforded to any shareholder
of Shawnee who objects to the Merger in a timely manner in
accordance with the WVCA, and who takes the necessary steps in a
timely manner in accordance with the WVCA 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 Shawnee Common Stock who shall
file written objections with respect to such shares, in a timely
manner in accordance with the WVCA, to the Agreement, shall not
vote in favor of the Agreement, and have made written demand for
the fair value of such shares within ten days, in accordance with
WVCA Section 31-1-123. The Objecting Shares held by shareholders
who do not become Dissenting Shareholders shall be converted into
Wesbanco Common Stock in accordance with Section 5 hereof.
<PAGE> 113
SECTION 7
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SHAWNEE
----------------------------------------------------
Shawnee represents and warrants to and covenants with
Wesbanco and South Hills, that:
7.1 Organization and Qualification of Shawnee. Shawnee is
------------------------------------------
a corporation duly organized, validly existing and in good
standing under the laws of the State of West Virginia 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 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 Shawnee taken as
a whole.
7.2 Authorization of Agreement. The Board of Directors of
--------------------------
Shawnee has authorized the execution of this Agreement as set
forth herein, and subject to the approval of this Agreement by
the shareholders of Shawnee as provided in the Articles of
Incorporation and Bylaws of Shawnee and West Virginia Code 31-1-
117, Shawnee has the corporate power and is duly authorized to
merge with South Hills pursuant to this Agreement, and this
Agreement is a valid and binding agreement of Shawnee 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.
7.3 No Violation of Other Instruments. Subject to
----------------------------------
obtaining any required consent (which consents will be obtained
by Shawnee prior to Closing), the execution and delivery of
<PAGE> 114
this Agreement do not, and the consummation of the Merger and the
transactions contemplated hereby will not, violate any provisions
of Shawnee'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 Shawnee
is a party or by which it is bound. After the approval of this
Agreement by the shareholders of the common stock of Shawnee, the
Board of Directors and the shareholders of Shawnee will have
taken all corporate action required by applicable law, the
Articles of Incorporation of Shawnee, its Bylaws or otherwise to
authorize the execution and delivery of this Agreement and to
authorize the Merger of Shawnee and South Hills pursuant to this
Agreement.
7.4 Financial Statements. Shawnee has delivered to
---------------------
Wesbanco copies of its consolidated statements of condition as of
December 31, 1995, 1994, and 1993, 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,
1995, together with the notes thereto, accompanied by appropriate
reviews relating to the financial statements for the three years
ended December 31, 1995, 1994 and 1993, of Rollins, Cleavenger
and Rollins, independent auditor, and its unaudited consolidated
statement of condition, consolidated statement of income,
consolidated statement of changes in shareholders' equity and
consolidated statement of changes in financial condition for any
interim periods ending prior to the Effective Date. Such
statements, together with the related notes to all of said
financial statements, present fairly the consolidated financial
position of Shawnee and the consolidated results of its
operations as of the dates and for the periods ended on the dates
specified in accordance with generally accepted accounting
principles consistently applied
<PAGE> 115
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.
7.5 Subsidiaries of Shawnee. Shawnee maintains no
------------------------
subsidiary corporations.
7.6 No Action, Etc. Except as disclosed in the Disclosure
---------------
Schedule of Shawnee dated not more than 30 days from the date
hereof (the "Shawnee 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 Shawnee, threatened against or relating to Shawnee,
its business or any of its properties or against any of its
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 pending against
Shawnee, its properties or against any of its 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 Shawnee or the ability of Shawnee to
conduct its business as presently conducted or to consummate the
transaction contemplated hereby, and Shawnee does not know of any
basis for any such action or proceeding. Except as disclosed in
the Shawnee Disclosure Schedule, Shawnee is not 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 Shawnee is not transacting
business in material violation of any applicable law, ordinance,
requirement, rule, regulation or order.
<PAGE> 116
7.7 Capitalization. The authorized capital stock of
---------------
Shawnee consists of 32,537 shares of common stock, par value of
$10.00 per share, of which 32,027 shares are duly authorized,
validly issued and outstanding and are fully paid and
nonassessable as of the date hereof. There are no options,
warrants, calls or commitments of any kind entitling any person
to acquire, or securities convertible into, Shawnee Common Stock.
7.8 Copies of All Contracts, Leases, Etc. Shawnee has
-------------------------------------
furnished to Wesbanco true and complete copies of all material
contracts, leases and other agreements to which Shawnee 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 plan with respect
to any of the directors, officers or other employees of Shawnee.
A list of all such documents is set forth in the Shawnee
Disclosure Schedule, and as updated on the Effective Date.
7.9 Materially Adverse Contracts. Shawnee is not 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 Shawnee 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 Shawnee is a party that would have a material adverse
effect upon the financial condition, operations, results of
operations, business or prospects of Shawnee taken as a whole.
7.10 Undisclosed Liabilities. Shawnee has no material
------------------------
liabilities other than those liabilities disclosed on or provided
for in the financial statements delivered pursuant to Section 7.4
hereof, or as disclosed in the Shawnee Disclosure Schedule to be
attached hereto and made a part hereof.
7.11 Title to Properties. Except for capitalized leases,
--------------------
liens and encumbrances not material to the property and liens and
encumbrances on property acquired by Shawnee in
<PAGE> 117
foreclosure of loans and existing at the time of foreclosure, Shawnee
has good and marketable title to all of the property, interests in
properties and other assets, real and personal, set forth in its
consolidated balance sheet as of December 31, 1995, and
applicable interim period balance sheet or acquired since the
date thereof, other than property disposed of since such date,
subject to no material liens, mortgages, pledges, encumbrances or
charges of any kind except liens reflected on said balance sheet
or set forth in the financial statements delivered pursuant to
Section 7.4 hereof, and all of its material leases are in full
force and effect and Shawnee is not 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 cost, adjusted for amortization of
premiums or accretion of discounts. All material real and
tangible personal property owned by Shawnee and used or leased by
Shawnee in 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 State of West Virginia.
7.12 Proxy Statement. The Proxy Statement referred to in
----------------
Section 13 or any amendment or supplement thereto mailed to the
holders of the common stock of Shawnee will not contain any
untrue statement of a material fact concerning Shawnee or omit to
state a material fact concerning Shawnee 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 Shawnee, and will comply, as to form
in all material respects, with the requirements of federal and
West Virginia securities laws and any other applicable Blue Sky
Laws.
<PAGE> 118
7.13 ERISA. Except as disclosed in the Shawnee 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 Shawnee, (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 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
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
<PAGE> 119
Plan.
7.14 Labor Disputes. Except as disclosed in the Shawnee
---------------
Disclosure Schedule, Shawnee is not 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 its financial condition, assets,
businesses or operations taken as a whole. No collective
bargaining representatives represent any employees of Shawnee,
and no petition for election of any collective bargaining
representative has been filed, and to the knowledge of Shawnee,
no organizational campaign on behalf of any collective bargaining
unit has been undertaken by or on behalf of the employees of
Shawnee.
7.15 Reserve for Possible Loan Losses. The reserve for
---------------------------------
possible loan losses shown on the consolidated balance sheet of
Shawnee as of December 31, 1995, and for all applicable interim
periods, delivered pursuant to this Agreement is adequate in all
material respects as of the respective dates thereof.
7.16 Taxes. Except as disclosed in the Shawnee Disclosure
-----
Schedule:
(a) Shawnee has timely and properly filed all
Federal Income Tax Returns and all other federal,
state, municipal and other tax returns which it is
required to file, either on its own behalf or on
behalf of its employees or other persons or
entities, all such returns and reports being true
and correct and complete in all material respects,
and has 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 it;
<PAGE> 120
(b) Neither the Internal Revenue Service nor
any other taxing authority is now asserting against
Shawnee, or, to its knowledge, threatening to
assert against it, 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 Shawnee, 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 Shawnee 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 Shawnee, 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 Annot. Section
11-10-15, no tax year of Shawnee remains open to
the assessment and collection of additional
Business Franchise Taxes.
(e) Shawnee has properly accrued and
reflected on its December 31, 1995, consolidated
balance sheet, delivered pursuant to Section 7.4
hereof, and has 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 it is required
<PAGE> 121
to file, either on its own behalf or on behalf of its 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 it, all such accruals being in the
aggregate sufficient for payment of all such taxes
and assessments.
7.17 Absence of Certain Changes. Except as may be disclosed
---------------------------
in the Shawnee Disclosure Schedule, or except in connection with
the transactions contemplated by this Agreement, since December
31, 1995:
(a) There has been no change in the material
assets, financial condition or liabilities
(contingent or otherwise), business, or results of
operations of Shawnee 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 Shawnee taken
as a whole, 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 Shawnee taken as a whole;
(c) Other than in the ordinary course of
business, Shawnee has not disposed of, or agreed to
dispose of, any of its material properties or
<PAGE> 122
assets, nor has it 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
Shawnee except as provided for in this Agreement,
nor any material change in the outstanding debt of
Shawnee, 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, Shawnee 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) Shawnee has, and shall have at Closing,
personnel sufficient to adequately staff all key
positions within its operations. There has not
been any material increase in the compensation or
fees payable by Shawnee to its 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 Shawnee;
(g) Shawnee has not made any material loan or
advance other than in the ordinary course of
business;
(h) Shawnee has not made any expenditure or
major commitment for the purchase, acquisition,
construction or improvement of
<PAGE> 123
any material asset or assets which in the aggregate would
be material other than in the ordinary course of business;
(i) Shawnee has not 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; and
(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 Shawnee, taken as a whole, and
Shawnee has no knowledge of any such event,
condition or development which may materially and
adversely affect the assets, financial condition or
results of operations of Shawnee, taken as a whole.
7.18 Fidelity Bonds. Shawnee has continuously maintained
---------------
fidelity bonds 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 banks of its size. Since
January 1, 1996, there have been no claims under such bonds and,
except as disclosed in the Shawnee Disclosure Schedule, Shawnee
is not aware of any facts which would form the basis of a claim
under such bonds. Shawnee has no reason to believe that its
fidelity coverage will not be renewed by the applicable carrier
on substantially the same terms as its existing coverage.
7.19 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, Shawnee
will not, except as contemplated by this Agreement, without the
prior written approval of Wesbanco:
<PAGE> 124
(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 cash dividends which do not in the aggregate
exceed the lesser of $9.00 (Nine Dollars) per share
per year (to be paid on a basis in such proportions
as are consistent with past practices) or 50% of
the after- tax income of Shawnee for the tax years
in which paid;
(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 7.17(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 Shawnee Disclosure Schedule,
regarding pension or retirement plans or increases
in accordance with past practices;
<PAGE> 125
(g) Take any action materially and adversely
affecting the financial condition (present or
prospective), businesses, properties or operations
of Shawnee, 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 7.17(f) and 7.19(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.
7.20. Additional Covenants. Except as otherwise
---------------------
contemplated by this Agreement, Shawnee covenants and agrees:
(a) That it will promptly advise Wesbanco in
writing of the name and address of, and the number
of shares of Shawnee Common Stock held by, each
stockholder who elects to exercise his or her right
to dissent to the Merger pursuant to West Virginia
Code Annot. Sections 31-1-122 and
<PAGE> 126
123;
(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
Shawnee 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) Shawnee will not, and will not permit any
person acting on behalf of Shawnee 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, Shawnee, or any tender or
exchange offer (or proposal to make any tender or
exchange offer) for any shares of stock of Shawnee,
or any proposal to acquire more than 5% of the
outstanding shares of stock of Shawnee 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
Shawnee. Shawnee will give Wesbanco notice by
telephone, promptly after receipt thereof, of all
material facts relating to any acquisition proposal
or any inquiry with respect to any acquisition
proposal and shall confirm such
<PAGE> 127
notice in writing immediately thereafter;
(e) To promptly advise Wesbanco of any
material adverse change in the financial condition,
assets, businesses or operations of Shawnee, 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
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 Shawnee and its 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, the Federal Deposit Insurance
Corporation and the West Virginia Department of
Banking for prior approval of the acquisition of
Shawnee by Wesbanco as contemplated hereunder.
Consistent with its fiduciary duties, Shawnee 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 7.3 hereof; and
<PAGE> 128
(h) To cooperate with Wesbanco in furnishing
such information concerning the business of Shawnee
as is reasonably necessary or requested in order to
prepare and file any Registration Statement to be
prepared in connection with the issuance of
Wesbanco Common Stock as provided in Section 13
hereof.
SECTION 8
REPRESENTATIONS, WARRANTIES AND
COVENANTS OF WESBANCO AND SOUTH HILLS
-------------------------------------
Wesbanco and South Hills represent and warrant to Shawnee
and covenant with Shawnee that:
8.1 Corporate Organization of Wesbanco and Subsidiaries.
----------------------------------------------------
Wesbanco and South Hills are corporations 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
their businesses as they are now being conducted and as
contemplated by the Agreement and to own the properties and
assets which they own, and neither the ownership of their
property nor the conduct of their business requires 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, South Hills and their
subsidiaries taken as a whole. Each of Wesbanco's subsidiaries
("Wesbanco Subs"), is a West Virginia or Ohio corporation, duly
organized and validly existing in good standing under the laws of
Ohio 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
<PAGE> 129
of stock of Wesbanco Subs are held, beneficially and of record,
by Wesbanco and 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 or any of the Wesbanco Subs or securities convertible
into shares of stock of the Wesbanco Subs.
8.2 Corporate Power and Action. The Board of Directors of
---------------------------
Wesbanco has authorized the execution of this Agreement as set
forth herein, and subject to its Bylaws and the WVCA, Wesbanco
has the corporate power and is duly authorized to execute 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 South
Hills and subject to the approval hereof by Wesbanco as its sole
shareholder, South Hills has the corporate power to execute and
deliver this Agreement and has taken all action required by law,
its Articles of Incorporation, its Bylaws or otherwise to
authorize and approve such execution and delivery, the
performance of the Agreement, the Merger and the consummation of
the transactions contemplated hereby; and this Agreement is a
valid and binding agreement of South Hills 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 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, Wesbanco Bank
<PAGE> 130
Wheeling, for the benefit of the holders of the common stock of
Shawnee, an amount of common stock of Wesbanco and cash
sufficient to meet the necessary amount of securities and cash
required pursuant to Section 5.
8.4 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
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 it is bound.
8.5 Approval by South Hills. Wesbanco shall cause South
------------------------
Hills to execute and enter into this Agreement and cause South
Hills to take such action as is provided in this Agreement on
South Hills' part to be taken.
8.6 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.
8.7 Exchange Act Reports. Wesbanco has delivered to
---------------------
Shawnee true and correct copies of its Form 10-K (Annual Report)
for the year ended December 31, 1995, and its Forms 10-Q
(Quarterly Report) for the quarters ended March 31, 1996, June
30, 1996, and September 30, 1996, as filed with the SEC, all of
which were prepared and filed in accordance with the
<PAGE> 131
applicable requirements and regulations of the SEC. Wesbanco has
also delivered to Shawnee true and correct copies of all documents
and reports filed by Wesbanco with the SEC pursuant to the
Exchange Act since January 1, 1996 (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.
8.8 Subsidiaries of Wesbanco. In addition to South Hills,
-------------------------
the subsidiaries of Wesbanco are Wesbanco Bank Wheeling, a West
Virginia banking corporation, Wesbanco Bank Fairmont, Inc., a
West Virginia banking corporation, Wesbanco Bank Parkersburg, a
West Virginia banking corporation, Wesbanco Bank Barnesville, an
Ohio banking corporation, and Wesbanco Properties, Inc. and
Wesbanco Mortgage Company, both West Virginia corporations. 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.
8.9 Registered Bank Holding Company. Wesbanco is a duly
--------------------------------
registered bank holding company under the Bank Holding Company
Act of 1956, as amended.
8.10 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
<PAGE> 132
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.
8.11 Financial Statements. Wesbanco has delivered to
---------------------
Shawnee copies of its consolidated balance sheets as of December
31, 1995, 1994 and 1993 and any applicable interim period, 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, 1995, and any applicable interim period, together
with the notes thereto, accompanied by an audit report of Price
Waterhouse, 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.
8.12 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
<PAGE> 133
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 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.
8.13 Capitalization. The authorized capital stock of
---------------
Wesbanco consists of 25,000,000 shares of common stock, par value
of $2.0833 per share, of which 10,372,103 shares are duly
authorized, validly issued and outstanding (as of September 30,
1996) and are fully paid and nonassessable, and 1,000,000 shares
of preferred stock, without par value, none of which are issued
and 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 for
approximately 359,911 shares to be issued in the acquisition of
Vandalia National Corporation. At September 30, 1996, Wesbanco
held 148,196 shares of its common stock as treasury stock.
Wesbanco has no other reserve commitments with respect to its
common stock.
Upon execution hereof by South Hills, the authorized capital
stock of South Hills consists of 225,000 shares of common stock,
par value of $5.00 per share, of which all such shares are duly
authorized and validly issued and outstanding and fully paid and
nonassessable. There are
<PAGE> 134
no options, warrants, calls or commitments of any kind relating to,
or securities convertible into South Hills Common Stock.
8.14 Copies of All Contracts, Leases, Etc. Wesbanco has
-------------------------------------
furnished to Shawnee true and complete copies of all material
contracts, leases and other agreements to which Wesbanco 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 and similar plans with respect
to any of the directors, officers or other employees of Wesbanco.
A list of all such documents is set forth in the Wesbanco
Disclosure Schedule, and as supplemented on the Effective Date.
8.15 Materially Adverse Contracts. Neither Wesbanco nor any
-----------------------------
of its subsidiaries are 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 Wesbanco or its subsidiaries 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 Wesbanco or its subsidiaries is a party that would have a
material adverse effect upon the financial condition, operations,
results of operations, business or prospects of Wesbanco or its
subsidiaries taken as a whole.
8.16 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 8.11 of this Agreement, or on the
Wesbanco Disclosure Schedule.
8.17 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
<PAGE> 135
personal, set forth in its consolidated balance sheet as of
December 31, 1995, 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 cost, adjusted for amortization of premiums or accretion of
discounts. 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 State of West Virginia.
8.18 Registration Statement. The Registration Statement
-----------------------
referred to in Section 13.2 of this Agreement or any amendment or
supplement thereto mailed to the holders of the common stock of
Shawnee 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 federal and West Virginia
securities laws and any other applicable Blue Sky laws.
8.19 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
<PAGE> 136
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
Annot. Section 11-10-15, no tax year of Wesbanco or
any of its subsidiaries
<PAGE> 137
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, 1995, consolidated balance sheet, delivered
pursuant to Section 8.11 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.
8.20 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 September 30,
1996:
(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,
<PAGE> 138
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 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
and the Agreement and Plan of Merger with Vandalia
National Corporation dated July 18, 1996
(hereinafter "Vandalia Agreement"), 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 as otherwise disclosed in this
Agreement, Wesbanco has not granted any warrant,
option or right to acquire, or agreed to
<PAGE> 139
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 which, taken in the
aggregate with all other such distributions
declared or paid in the same tax year, exceed 50%
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;
(k) There has been no change in the Articles
of Incorporation or Bylaws of Wesbanco which would
in the reasonable opinion of Shawnee have a
material adverse effect on the rights of holders of
Wesbanco Common Stock; and
<PAGE> 140
(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.
8.21 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, 1996, there
have been no claims under such bonds (except as disclosed in the
Wesbanco Disclosure Schedule) and, except as disclosed in writing
to Shawnee, 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.
8.22 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,
<PAGE> 141
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 Bank of Weirton, 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 Bank of Weirton, 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 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 multiemployer or multiple employer
employee benefit pension plan (including any multiemployer plans
as defined in Section 3(37) of ERISA) and, with respect to any
multiemployer 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 multiemployer 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
<PAGE> 142
multiemployer pension plan subject to the Multiemployer 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 multiemployer 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.
8.23 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 effect
their financial condition, assets, businesses or operations taken
as a whole. No collective bargaining
<PAGE> 143
representatives represent any Wesbanco, or Wesbanco Subs, employees
and no petition for election of any collective bargaining representative
has been filed and, to the knowledge of Wesbanco and its subsidiaries,
no organizational campaign on behalf of any collective bargaining
unit has been undertaken by or on behalf of any Wesbanco, or
Wesbanco Subs employees.
8.24 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, 1995, and
applicable interim periods, delivered pursuant to this Agreement
is adequate in all material respects as of the respective dates
thereof.
8.25 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 South
Hills' 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 Shawnee;
(b) To deliver to Shawnee 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 Shawnee 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
<PAGE> 144
provided to Shawnee pursuant to this Agreement or
any "acquisition proposal" with respect to Wesbanco
received by Wesbanco;
(d) To cooperate with Shawnee 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, the
Federal Deposit Insurance Corporation, and the West
Virginia Department of Banking for prior approval
of the acquisition of Shawnee 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 8.4 hereof; and
(e) To cooperate with Shawnee 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.
SECTION 9
INVESTIGATION
-------------
Subject to the conditions set forth in this Section 9, prior
to the Effective Time, Wesbanco and Shawnee may directly and
through their representatives, make such investigation
<PAGE> 145
of the assets and business of Wesbanco and Shawnee, and Wesbanco's
subsidiaries, as each deems necessary or advisable. Wesbanco and
Shawnee and their representatives, including their accountants,
shall have, at reasonable times after the date of execution by
Wesbanco and Shawnee 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 Shawnee and by Shawnee 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. For a period of 30 days after the date of execution
hereof, or prior completion of the investigation herein provided,
this Agreement may be terminated by each such corporation if such
investigation reveals to the other any information concerning the
other which in the opinion of such corporation would have a
material adverse effect on the present or future value of the
other such corporation and its subsidiaries' assets, net worth,
business or income taken as a whole. Each such corporation shall
provide prompt written notice to the other of such decision
<PAGE> 146
and the matters relied on therefore.
SECTION 10
NON-SURVIVAL OF REPRESENTATIONS AND WARRANTIES
----------------------------------------------
The representations and warranties included or provided herein shall
not survive the Effective Date.
SECTION 11
CONDITIONS PRECEDENT; CLOSING DATE AND EFFECTIVE DATE
------------------------------------------------------
11.1 Conditions Precedent of Wesbanco and Shawnee. The
---------------------------------------------
consummation of this Agreement by Wesbanco and Shawnee and the
Merger is conditioned upon the following:
(a) The shareholders of Shawnee and Wesbanco
shall have approved this Agreement by such vote as
required by law;
(b) The West Virginia Banking Board 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 Shawnee by
Wesbanco and its merger with and into South Hills
pursuant to this Agreement;
(c) The Secretary of State of West Virginia
shall have issued a Certificate of Merger for the
merger of Shawnee with and into South Hills;
(d) The Board of Governors of the Federal
Reserve System shall have approved the application
of Wesbanco to acquire Shawnee;
(e) The Federal Deposit Insurance Corporation
shall have approved the application of South Hills
to merge with Shawnee;
<PAGE> 147
(f) The Registration Statement of Wesbanco
shall still 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 Shawnee to carry out the
transaction contemplated in this Agreement) shall
have been received.
(g) No order to restrain, enjoin or otherwise
prevent the consummation of the transaction
contemplated in this Agreement shall have been
entered by any court or administrative body which
remains in effect on the date of the Closing.
(h) Wesbanco, Shawnee and South Hills shall
have received, in form and substance satisfactory
to Wesbanco's and Shawnee'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 the West Virginia Securities
Commissioner, and in addition, Wesbanco and Shawnee
shall have received any and all consents required
with respect to
<PAGE> 148
the documents described pursuant to Section 7.3 and
Section 8.4 hereof;
(i) 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 this
Agreement shall have expired;
(j) Unless waived by Wesbanco and Shawnee,
the holders of not more than ten percent (10%) of
the Voting Shares (as defined in Section 6.1
hereof) shall have filed written objections to the
Agreement in accordance with the WVCA, not have
voted in favor of the Agreement at the special
meeting of Shawnee shareholders referred to in
Section 13.1 hereof and have made written demand
for the fair value of such Voting Shares within ten
days;
(k) 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
Shawnee, in lieu thereof an opinion from counsel
for Shawnee substantially to the effect that for
Federal Income Tax purposes:
(i) The statutory merger of
Shawnee with South Hills will constitute
a reorganization within the meaning of
Section 368(a)(1) of the Internal
Revenue Code of 1986 ("IRC"), and
Wesbanco, Shawnee and South Hills will
each be a "party to the reorganization"
as defined in IRC Section 368(b);
<PAGE> 149
(ii) No gain or loss will be
recognized by Wesbanco, Shawnee or South
Hills as a result of the transactions
contemplated in the Agreement;
(iii) No gain or loss will be
recognized by the shareholders of
Shawnee as a result of their exchange of
Shawnee 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;
(iv) The holding period of the
Wesbanco Common Stock received by each
holder of Shawnee Common Stock will
include the period during which the
stock of Shawnee 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 Shawnee Common Stock will
be the same as the basis of the stock
exchanged therefore.
(l) 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 Shawnee, would
<PAGE> 150
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 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).
(m) The approvals referred to in
subparagraphs (b), (d) and (e) of Subsection 11.1
herein shall not have required the divestiture or
cessation of any significant part of the present
operations conducted by Wesbanco, Shawnee 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.
11.2 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 Shawnee 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 Shawnee, or which are the result of
expenses or transactions contemplated or permitted
by the Agreement, and Shawnee shall have performed
in all material respects all of its obligations and
agreements hereunder theretofore to be
<PAGE> 151
performed by it; and Wesbanco and South Hills shall
have received on the Effective Date an appropriate
certificate (in affidavit form) dated the Effective
Date and executed on behalf of Shawnee by one or
more appropriate executive officers of Shawnee to
the effect that such officers have no knowledge of
the nonfulfillment of the foregoing condition;
(b) Opinion of Shawnee Counsel. An opinion
---------------------------
of Kay, Casto, Chaney, Love & Wise, counsel for
Shawnee, 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) Shawnee is a corporation duly
organized, validly existing and in good
standing under the laws of the State of
West Virginia 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 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 Shawnee, taken
as a whole.
(ii) Shawnee has the full corporate
power to execute and deliver the
Agreement and Plan of Merger. All
<PAGE> 152
corporate action of Shawnee required to
duly authorize the Agreement and Plan of
Merger and the actions contemplated
thereby has been taken, and the
Agreement and Plan of Merger is valid
and binding on Shawnee 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) All shares of common
stock of Shawnee issued and outstanding
as of the Effective Date are duly
authorized, validly issued, fully paid
and nonassessable.
(iv) The consummation of the merger
contemplated by the Agreement and Plan
of Merger will not violate any provision
of Shawnee'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 Shawnee is a party or
by which it is bound and will not
violate or conflict with any other
material restriction of any kind or
character
<PAGE> 153
known to such counsel to which
Shawnee is subject, which would have a
materially adverse effect on the assets,
business or operations of Shawnee, taken
as a whole.
(v) To the best of such counsel's
knowledge, as of the date hereof,
Shawnee is not involved in any
litigation against it (with possible
exposure of $100,000.00 or more),
pending or threatened, that has not been
disclosed to Wesbanco.
(c) Unless waived by Wesbanco, on or before
the Effective Date, Ernst & Young, LLP, the
independent public accountants for Wesbanco, shall
have rendered an opinion to Wesbanco that the
Merger will be treated as a purchase for accounting
purposes.
(d) Shawnee shall have delivered to Wesbanco
a schedule identifying all persons who may be
deemed to be "affiliates" of Shawnee 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) Brenda H. Robertson shall have duly
executed and delivered an employment agreement with
Shawnee, dated as of the Closing Date, in
substantially the form attached hereto as Exhibit
"B".
(f) Shawnee shall have furnished Wesbanco
with a certified copy of resolutions duly adopted
by the Board of Directors and the
<PAGE> 154
shareholders of Shawnee approving the Agreement and authorizing
the Merger and the transactions contemplated hereby.
(g) Unless waived by Wesbanco, on the Closing
Date, there shall not be pending against Shawnee or
the officers or directors of Shawnee in their
capacity as such, any suit, action or proceeding
which, in the reasonable judgment of Wesbanco, if
success, would have material adverse effect on
the financial condition or operations of Shawnee.
11.3 Conditions Precedent of Shawnee. The consummation of
--------------------------------
this Agreement by Shawnee and the Merger is also conditioned upon
the following:
(a) Unless waived by Shawnee, the
representations and warranties of Wesbanco and
South Hills 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 Shawnee or
which are not in the aggregate material and adverse
to the financial condition, businesses, properties
or operations of Wesbanco and South Hills or which
are the result of expenses or transactions
contemplated or permitted by this Agreement, and
Wesbanco and South Hills shall have performed in
all material respects all of their obligations and
agreements hereunder theretofore to be performed by
them; and Shawnee shall have received on the
Effective Date an appropriate certificate (in
affidavit form) dated the Effective Date and
executed on behalf of Wesbanco and South Hills by
one or more appropriate
<PAGE> 155
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 Shawnee,
dated the Closing Date, and in form and substance
satisfactory to Shawnee and its counsel, to the
effect that:
(i) Wesbanco and South Hills 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 as they are now being
conducted, and neither the ownership of
their property nor the conduct of their
businesses require them 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, South
Hills and the Wesbanco Subs, taken as a
whole.
(ii) Wesbanco and South Hills have
the full corporate power to execute and
deliver the Agreement and Plan of
Merger. All corporate action of
Wesbanco and South Hills required to
duly authorize the Agreement and
<PAGE> 156
Plan of Merger and the actions contemplated
thereby has been taken, and the
Agreement and Plan of Merger is valid
and binding on Wesbanco and South Hills
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 shares of common
stock of Wesbanco into which shares of
common stock of Shawnee shall be
converted pursuant to the terms of the
Agreement and Plan of Merger have been
duly authorized, and when delivered
pursuant to the terms of the Agreement
and Plan of Merger, will have been
legally and validly issued, and will be
fully paid and nonassessable.
(iv) The consummation of the merger
contemplated by the Agreement and Plan
of Merger will not violate any provision
of Wesbanco's or South Hills' 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
<PAGE> 157
which Wesbanco or South Hills are a party or
by which it is bound, and will not
violate or conflict with any other
material restriction of any kind or
character known to such counsel to which
Wesbanco or South Hills are subject
which would have a material adverse
effect on the assets, business or
operations of Wesbanco and South Hills,
taken as a whole.
(v) 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.
(vi) 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 Shawnee.
(vii) The Registration
Statement for the stock to be delivered
pursuant to the Agreement and Plan of
Merger has become effective under the
Securities Act of 1933, and
<PAGE> 158
such counsel is not aware of any stop orders
in effect with regard to such Registration
Statement.
(c) LSC Financial Services, Inc., financial
advisors to Shawnee, shall have furnished to
Shawnee 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 in Section 13.1 of this
Agreement, and at the election of Shawnee, updated
as of the Closing if the Closing is held more than
five (5) days after the Shawnee meeting of
shareholders, to the effect that the Merger and
transactions contemplated by this Agreement are
fair, from a financial point of view, to Shawnee
and its shareholders.
(d) Wesbanco and South Hills shall have
furnished Shawnee with certified copies of
resolutions duly adopted by the Boards of Directors
of Wesbanco and South Hills and the shareholders of
South Hills approving the Agreement and authorizing
the Merger and transactions contemplated hereby.
(e) Unless waived by Shawnee, 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
Shawnee, if successful, would have a material
adverse effect on the financial condition or
operations of Wesbanco or any of its subsidiaries.
<PAGE> 159
(f) Unless waived by Shawnee, there shall not
have been any change in control of Wesbanco since
December 1, 1996.
11.4 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 day of the meetings of the
shareholders of Shawnee or South Hills, whichever
is later, at which the Agreement is approved;
(b) The fifteenth (15th) day after the
approval of the acquisition of Shawnee by the Board
of Governors of the Federal Reserve System (the
"Federal Reserve Board");
(c) The day after any stay of the Federal
Reserve Board's approval of the acquisition of
Shawnee shall be vacated or shall have expired or
the day after any injunction against the closing of
the Merger shall be lifted, discharged or
dismissed;
(d) The day after the approval of the
acquisition of Shawnee by the West Virginia
Department of Banking is received by Wesbanco;
(e) The fifteenth (15th) day after the
approval of the merger of Shawnee with South Hills
by the Federal Deposit Insurance Corporation (the
"FDIC");
(f) The date on which the conditions set
forth in Section 11 are satisfied or waived;
(g) Such other date as shall be mutually
agreed to by Wesbanco and Shawnee.
<PAGE> 160
The Closing shall be held in Charleston, 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
shall be filed with the Secretary of State of West Virginia.
11.5 Effective Date. The Merger shall become effective (the
---------------
"Effective Date") on the date on which the Certificate of Merger
approving the Merger is issued by the Secretary of State of West
Virginia. The Surviving Corporation shall record said
Certificate of Merger in the office of the Clerk of the County
Commission of Kanawha County.
SECTION 12
TERMINATION OF AGREEMENT
------------------------
12.1 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 Shawnee:
(a) By mutual consent of Shawnee and
Wesbanco;
(b) By either Shawnee 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 Shawnee 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 Shawnee or Wesbanco, if the
Closing Date has not occurred by the first
anniversary of the date of execution of this
<PAGE> 161
Agreement;
(e) By Shawnee, unless waived by
Shawnee, if the Market Value of Wesbanco
stock shall fall below Twenty-seven Dollars
($27.00) 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) for the 30
calendar days preceding five business days
before the Closing.
(f) By either party in the event that
the shareholders of Shawnee vote against
consummation of the Merger.
(g) By Wesbanco or Shawnee within 30
days of the date hereof pursuant to the
provisions of Section 9 of this Agreement.
12.2 Effect of Terminating; Right to Proceed. In the event
----------------------------------------
this Agreement shall be terminated pursuant to Section 12.1, all
further obligations of Wesbanco and Shawnee under this Agreement,
except Sections 9, 12.1, 12.2, and 19 hereof, shall terminate
without further liability of Wesbanco and South Hills to Shawnee,
or of Shawnee to Wesbanco and South Hills.
12.3 Return of Documents in Event of Termination. In the
--------------------------------------------
event of termination of this Agreement for any reason, Wesbanco
and Shawnee 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 9 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
<PAGE> 162
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 13
MEETING OF SHAREHOLDERS OF SHAWNEE
----------------------------------
13.1 Subject to receipt by Shawnee of the fairness opinion
described in Section 11.3(c) hereof, Shawnee 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 Shawnee 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 Shawnee or omit to state a material fact with respect
to Shawnee 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.
13.2 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
Shawnee. Accordingly, Wesbanco and Shawnee agree to assist and
cooperate fully with each other in the preparation of the
Registration Statement. Both Shawnee 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,
<PAGE> 163
stating that, to the best of their knowledge and belief, all of
the facts with respect to either Wesbanco or Shawnee, 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 14
BROKERS
-------
Shawnee represents and warrants to Wesbanco and Wesbanco
represents and warrants to Shawnee 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 Shawnee in payment
for the rendered `Fairness Opinion'.
SECTION 15
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, South Hills and Shawnee
when one or more counterparts shall have been signed and
delivered by Wesbanco, South Hills and Shawnee; and (d) embodies
the entire Agreement and understanding of the parties with
respect to the subject matter hereof; and (e) supersedes all
prior agreements and
<PAGE> 164
understandings, written or oral, between Shawnee and Wesbanco relating
to the subject matter hereof.
SECTION 16
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 17
NOTICES
-------
Except as specifically provided in Section 7.20(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 Shawnee:
Shawnee Bank, Inc.
11th Street & Myers Avenue
Dunbar, West Virginia 25064
ATTENTION: Brenda H. Robertson, President
With a copy to:
Kay, Casto, Chaney, Love & Wise
1600 Bank One Center
P.O. Box 2031
Charleston, WV 25327
ATTENTION: William W. Booker, Esq.
To Wesbanco:
Wesbanco, Inc.
One Bank Plaza
Wheeling, WV 26003
ATTENTION: Edward M. George, President
<PAGE> 165
With a copy to:
Phillips, Gardill, Kaiser & Altmeyer
61 Fourteenth Street
Wheeling, WV 26003
ATTENTION: James C. Gardill, Esq.
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.
SECTION 18
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
Shawnee 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
conversion ratio per share at which each share of common stock of
Shawnee shall be converted in the Merger and any other material
terms of the Merger shall not be amended after the meeting of
Shawnee 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.
<PAGE> 166
SECTION 19
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 20
MISCELLANEOUS
-------------
20.1 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.
20.2 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.
20.3 Material Adverse Change. In determining whether there
------------------------
has been a material adverse change for purposes of this
Agreement, costs and expenses of the transactions contemplated
hereby shall not be taken into account provided, however, that
only the first $50,000 of such expenses shall be so excluded.
20.4 Binding Date. This Agreement is effective and binding
-------------
as to Wesbanco, South Hills and Shawnee upon the date first
above written.
<PAGE> 167
IN WITNESS WHEREOF, Wesbanco, South Hills and Shawnee have
each caused this Agreement to be executed on its behalf by its
officers thereunto duly authorized all as of the day and year
first above written.
WESBANCO, INC., a West Virginia
corporation
By /s/ E.M. George
------------------------------
Its President & CEO
------------------------
(SEAL)
ATTEST:
/s/ Shirley A. Bucan
- ----------------------
Secretary
SHAWNEE BANK, INC., a West Virginia
corporation
By /s/ Brenda H. Robertson
--------------------------------
Its President & CEO
----------------------
(SEAL)
ATTEST:
/s/ Joan B. Belcher
- ---------------------------
Secretary
<PAGE> 168
WESBANCO BANK SOUTH HILLS, a West
Virginia corporation
By /s/ Larry L. Dawson
----------------------------------
Its President & CEO
--------------------------
(SEAL)
ATTEST:
/s/ Thomas L. Jones
- --------------------------------
Secretary
<PAGE> 169
EXHIBIT A
---------
AFFILIATE LETTER
----------------
Wesbanco, Inc.
Bank Plaza
Wheeling, WV 26003
Gentlemen:
Reference is made to the Agreement and Plan of Merger (the
"Agreement"), dated as of the 19th day of December, 1996, by and
between Wesbanco, Inc. ("Wesbanco") Shawnee Bank, Inc.
("Shawnee") providing for the merger ("Merger") of Shawnee with
Wesbanco Bank South Hills ("South Hills"), a wholly owned
subsidiary of Wesbanco, whereby Wesbanco shall acquire all of the
outstanding common stock of Shawnee through and as a result of
such Merger in exchange for shares of the common stock of
Wesbanco. The undersigned stockholder of Shawnee has been
identified as a person who may be an "Affiliate" of Shawnee for
purposes of Rule 145 of the Securities Act of 1933, as amended
(the "Act"). As a result of the transactions contemplated by the
Agreement, the undersigned stockholder will receive shares of
Wesbanco stock. In consideration of the receipt of such shares,
the undersigned stockholder warrants and covenants as follows:
(1) Until the expiration of the limitation on
the transfer as provided in Rule 145 of the shares of
Wesbanco Common Stock received as a result of the
Merger, the undersigned stockholder will not sell,
transfer or assign, and Wesbanco shall not be required
to give effect to any attempted sale, transfer or
assignment, except pursuant to (i) a Registration
Statement then in effect under the Act, (ii) a
transaction permitted by Rule 145 as to which Wesbanco
has received evidence of compliance with the provisions
of Rule 145 reasonably satisfactory to it, or (iii) a
transaction which, in the opinion of counsel or as
described in a "no action" or interpretive letter from
the staff of the Securities and Exchange Commission, in
either case in form and substance reasonably
satisfactory to Wesbanco, is exempt from or otherwise
complies with the registration requirements of the Act.
(2) Until the expiration of any limitation on
the transfer of the Wesbanco Common Stock as provided
in Rule 145(d), each certificate the undersigned
receives for Wesbanco Common Stock as a result of the
Merger may bear a restrictive legend in substantially
the following form:
<PAGE> 170
"The shares represented by this certificate have
been issued to the registered holder as a result of a
transaction to which Rule 145 under the Securities Act
of 1933 (the "Act") as amended, applies. The shares
represented by this certificate may not be sold,
transferred, or assigned, and the issuer shall not be
required to give effect to any attempted sale, transfer
or assignment, except pursuant to (i) the Registration
Statement then in effect under the Act, (ii) a
transaction permitted by said Rule 145 reasonably
satisfactory to it, or (iii) a transaction which, in
the opinion of counsel or as described in a `no action'
or interpretive letter from the staff of the Securities
and Exchange Commission, in each case satisfactory in
form and substance to the issuer, is exempt from the
registration requirements of the Act."
Very truly yours,
_____________________________________
ACCEPTED this _____ day of
_______________, 1997.
WESBANCO, INC.
By________________________
Its ___________________
<PAGE> 171
APPENDIX III
STOCKHOLDER AGREEMENT
---------------------
STOCKHOLDER AGREEMENT, dated as of December 19, 1996, by and
among WESBANCO, INC. (the "Acquiror"), a West Virginia
corporation, and certain stockholders of SHAWNEE BANK, INC. (the
"Company"), a West Virginia banking corporation, named on
Schedule A attached hereto (collectively the "Stockholders").
WITNESSETH: That for and in consideration of the mutual
promises and covenants hereinafter contained, the parties hereto
do hereby agree as follows:
WHEREAS, the Acquiror and the Company have entered into an
Agreement and Plan of Merger, dated as of the date hereof (the
"Agreement"), which is being executed simultaneously with the
execution of this Stockholder Agreement and provides for, among
other things, the merger of the Company with and into an
affiliate bank of the Acquiror (the "Merger"); and
WHEREAS, in order to induce the Acquiror to enter into the
Agreement, each of the Stockholders agrees to, among other
things, vote in favor of the Agreement in their capacities as
stockholders of the Company;
NOW, THEREFORE, in consideration of the premises, the mutual
covenants and agreements set forth herein and other good and
valuable consideration, the sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Ownership of Company Common Stock. Each stockholder
represents and warrants that the Stockholder has or shares the
right to vote and dispose of the number of shares of common stock
of the Company, par value $10.00 per share ("Company Common
Stock"), set forth opposite such Stockholder's name on Schedule A
attached hereto.
2. Agreements of Stockholders. Each Stockholder
covenants and agrees that:
(a) such Stockholder shall, at any meeting of the
Company's stockholders called for the purpose,
vote, or caused to be voted, all shares of Company
Common Stock in which such stockholder has the
right to vote (whether owned as of the date hereof
or hereafter acquired) in favor of the Agreement
and against any plan or proposal pursuant to which
the Company is to be acquired by or merged with, or
pursuant to which the Company proposes to sell all
or substantially all of its assets and liabilities
to, any person entity or group (other than the
Acquiror or any affiliate thereof);
(b) except as otherwise expressly permitted
hereby, such Stockholder shall not, prior to the
meeting of the Company's stockholders referred to in
<PAGE> 172
Section 2(a) hereof or the earlier termination
of the Agreement in accordance with its terms,
sell, pledge, transfer or otherwise dispose of the
Stockholder's shares of Company Common Stock;
(c) such Stockholder shall not in his capacity as
a stockholder of the Company directly or indirectly
encourage or solicit or hold discussions or
negotiations with, or provide information to, any
person, entity or group (other than the Acquiror or
an affiliate thereof) concerning any merger, sale
or substantial assets or liabilities not in the
ordinary course of business, sale of shares of
capital stock or similar transactions involving the
Company or any subsidiary of the Company (provided
that nothing herein shall be deemed to affect the
ability of any Stockholder to fulfill his duties as
a director or officer of the Company); and
(d) such Stockholder shall use his best efforts to
take or cause to be taken all action, and to do or
cause to be done all things, necessary, proper or
advisable under applicable laws and regulations to
consummate and make effective the agreements
contemplated by this Stockholder Agreement.
3. Successors and Assigns. A Stockholder may sell,
pledge, transfer or otherwise dispose of his shares of Company
Common Stock, provided that such Stockholder obtains the prior
written consent of the Acquiror and that any Acquiror of such
Company Common Stock agree in writing to be bound by the terms of
this Stockholder Agreement.
4. Termination. The parties agree and intend that this
Stockholder Agreement be a valid and binding agreement
enforceable against the parties hereto and that damages and other
remedies at law for the breach of this Stockholder Agreement are
inadequate. This Stockholder Agreement may be terminated at any
time prior to the consummation of the Merger by mutual written
consent of the parties hereto and shall be automatically
terminated in the event that the Agreement is terminated in
accordance with its terms.
5. Notices. Notices may be provided to the Acquiror and
the Stockholders in the manner specified in Section 17 of the
Agreement, with all notices to the Stockholders being provided to
them at the Company in the manner specified in such section.
6. Governing Law. This Stockholder Agreement shall be
governed by the laws of the State of West Virginia without giving
effect to the principles of conflicts of laws thereof.
7. Counterparts. This Stockholder Agreement may be
executed in one or more counterparts, all of which shall be
considered one and the same each of which shall be deemed an
original.
8. Headings and Gender. The Section headings contained
herein are for reference purposes only and shall not affect in
any way the meaning or interpretation of this Stockholder
<PAGE> 173
Agreement. Use of the masculine gender herein shall be
considered to represent the masculine, feminine or neuter gender
whenever appropriate.
9. Individual Liability. Each of the undersigned
stockholders has executed this Agreement solely for the purpose
of binding himself to the terms hereof and no stockholder shall,
by reason of his execution hereof, incur any liability for any
breach hereof by any other stockholder. All liabilities
hereunder being several and not joint, it is acknowledged and
agreed that it shall not be necessary to join any stockholder who
has not violated the terms hereof in any action to enforce the
terms hereof against a stockholder who is alleged to have
violated any term hereof.
IN WITNESS WHEREOF, the Acquiror, by a duly authorized
offer, and each of the Stockholders have caused this Stockholder
Agreement to be executed as of the day and year first above
written.
WESBANCO, INC.
By /s/ E. M. George
---------------------------
Its President & CEO
/s/ Robert L. Hively
-----------------------------
ROBERT L. HIVELY
/s/ R. Thomas Linger
-----------------------------
R. THOMAS LINGER
/s/ Andrew A. Payne, Jr.
-----------------------------
ANDREW A. PAYNE, JR.
/s/ John L. Ray
-----------------------------
JOHN L. RAY
/s/ Brenda H. Robertson
-----------------------------
BRENDA H. ROBERTSON
/s/ R. Brawley Tracy
-----------------------------
R. BRAWLEY TRACY
/s/ Catherine L. Whittington
-----------------------------
CATHERINE L. WHITTINGTON
<PAGE> 174
SCHEDULE A
----------
NUMBER OF SHARES OF COMPANY COMMON STOCK
----------------------------------------
NAME OF STOCKHOLDER BENEFICIALLY OWNED
- ------------------- ------------------
Robert L. Hively 1,221
R. Thomas Linger 3,909*
Andrew A. Payne, Jr. 7,063*
John L. Ray 400
Brenda H. Robertson 263
R. Brawley Tracy 7,391
Catherine L. Whittington 50
(1) Does not include shares held in a fiduciary capacity by the
Bank, or by any of such shareholders.
(2) Information is presented as of December 1, 1996, and is
subject to update.
*Footnote:
_______________________________________________________________________________
R. Thomas Linger Andrew A. Payne, Jr. R. Brawley Tracy
- ---------------- -------------------- ----------------
Gatlin, Inc. 300 Horse Creek Land & R. Brawley Tracy 50
R. Thomas Linger 54 Mining Co. 220 R. Brawley Tracy &
Ohio Valley Bank, NA Andrew A. Payne, Jr. 2,283 One Valley Bank, NA
& R. Thomas Linger Andrew A. Payne - FBO: Theresa L. Byer 1,033
Co-Trustees FBO Trust 1 400 Susan L.Cook 1,032
Kathryn L. Lee 1,492 Andrew A. Payne - R.Thomas
One Valley Bank, NA Trust 2 400 Linger, Jr. 1,032
& R. Thomas Linger Andrew A. Payne- W. Gates
Co-Trustees FBO Trust 3 400 Linger 1,032
Julia B. Kurdt 1,492 Andrew A. Payne- Rebecca Nolte 1,032
R.T. Linger & R. Trustee for Anastasia R.T. Linger & R.B.
B. Tracy Trustees D. Payne 265 Tracy Trustees Under
Under M. L. Gates 571 Andrew A. Payne- M. L. Gates 571
Trustee for Katherine R. Brawley Tracy
V. Payne 265 Trustee for R. Brawley
Andrew A. Payne, Jr. Tracy (KEOGH) 1,609
& John L. D. Payne as
Trustees:
Anastasia D. Payne
Trust 1 512
<PAGE> 175
R. Thomas Linger Andrew A. Payne, Jr. R. Brawley Tracy
- ---------------- -------------------- ----------------
Anastasia D. Payne
Trust 2 512
Anastasia D. Payne
Trust 3 512
Payne Gallatin Mining
Co. 1,294
<PAGE> 176
Form of Proxy Card
SHAWNEE BANK, INC.
1011 MYERS AVENUE
DUNBAR, WEST VIRGINIA 25064
Proxy for Special Meeting of Shareholders on June 3, 1997
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints R. Brawley Tracy and Brenda
H. Robertson, and each of them, as proxies, with the power of
substitution, and hereby authorizes either of them to represent
and to vote, as designated below, all of the shares of common
stock, par value $10.00 per share of Shawnee Bank, Inc.
("Shawnee") that the undersigned is entitled to vote at the
Special Meeting of Shareholders of Shawnee (the "Special
Meeting") to be held in the lobby of Shawnee, 1011 Myers Avenue,
Dunbar, West Virginia, 25064, on June 3, 1997, at 4:00 p.m.,
local time, or any adjournment or postponement thereof as
follows:
Proposal to approve and adopt the Agreement and Plan of
Merger dated as of December 19, 1996, between Shawnee, Wesbanco,
Inc. and Wesbanco Bank South Hills.
FOR______ AGAINST_______ ABSTAIN_______
In their discretion the proxies are authorized to vote upon
such other business as may properly come before the Special Meeting.
This Proxy, when properly executed, will be voted in the manner
directed herein by the undersigned shareholder. If no directions
are specified, this Proxy will be voted FOR the Proposal set forth above.
DATED_________________________________
______________________________________
SIGNATURE
______________________________________
SIGNATURE
Please sign exactly as name or names appear
hereon. When signing as attorney, executor,
administrator, trustee or guardian, please give
your full title. If a corporation, please sign
in full corporate name by president or other
authorized officer. If a partnership, please
sign in partnership name by authorized person.
Please complete, date, sign and mail this Proxy in the enclosed postage
prepaid envelope.
