<PAGE> 1
As filed with the Securities and Exchange Commission on March ___, 1997
Reg. No. _________
- ---------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
WESBANCO, INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
West Virginia 6711 55-0571723
(State or other (Primary Standard Industrial (I.R.S. Employer
jurisdiction of Classification Code Number) Identification No.)
incorporation or Bank Plaza
organization) Wheeling, West Virginia 26003
(304) 234-9000
(Address, including Zip Code and Telephone Number,
including Area Code of Registrant's Principal Executive Offices)
Edward M. George, President
Wesbanco, Inc.
Bank Plaza
Wheeling, West Virginia 26003
(304) 234-9208
(Name, Address, including Zip Code, and Telephone Number,
including Area Code, of Agent for Service)
WITH COPIES TO:
James C. Gardill, Esquire
Phillips, Gardill, Kaiser & Altmeyer
61 Fourteenth Street
Wheeling, West Virginia 26003
Approximate date of commencement of the proposed sale of the securities
to the public: As soon as practicable after the effective date of this
Registration Statement.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance
with General Instruction G, check the following box: _____
CALCULATION OF REGISTRATION FEE
- --------------------------------------------------------------------------------
Title of Proposed Maximum Proposed Maximum Amount of
Securities to be Amount to be Offering Price Aggregate Offering Registration
Registered Registered Per Unit Price Fee
- --------------------------------------------------------------------------------
Common Stock
$2.0833 Par Value 323,506(1) $32.75(1) $10,594,821.50(1) $3,210.55(1)
- --------------------------------------------------------------------------------
The Registrant hereby amends this Registration Statement
on such date or dates as may be necessary to delay its
effective date until the Registrant shall file a further
amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act of 1933 or until the
Registration Statement shall become effective on such date as
the Commission, acting pursuant to said Section 8(a), may
determine.
Exhibit Index is on page 121.
(1) Estimated solely for purpose of computing the registration
fee based upon the market value per share of the Wesbanco
Common Stock, $2.0833 par value, to be exchanged for Shawnee
Bank, Inc. Common Stock, $10.00 par value. This number
includes approximately 323,281 shares for the exchange, and 225
shares for fractional share buy up elections since there will be
no fractional shares issued.
<PAGE> 2
WESBANCO, INC.
CROSS REFERENCE SHEET
SHAWNEE BANK, INC.
(Pursuant to Rule 404 of Regulation C and Item 501 of
Regulation S-K showing the location in the Proxy
Statement/Prospectus of the answers to the Items of Part I of
Form S-4.)
Caption or Location
Item Number in Prospectus/Proxy
S-4 Statement
- ------------ -------------------
A. Information About the Transaction
---------------------------------
1. Forepart of Registration Statement and Outside
Front Cover Page of Prospectus . . . . . . . . Front Cover Page;
Cross
Reference Sheet;
Outside Front
Cover Page of
Prospectus
2. Inside Front and Outside Back Cover Pages
of Prospectus . . . . . . . . . . . . . . . . Available Information;
Table of Contents
3. Risk Factors, Ratio of Earnings to Fixed
Charges and Other Information . . . . . . . . Summary Information;
Market Prices and
Selected Financial
Information; Pro
Forma Selected
Financial
Information for
Wesbanco; Selected
Financial
Information for
Shawnee;
Comparative Stock
Prices and
Dividends; Pro
Forma Data;
Government
Regulation
4. Terms of the Transaction . . . . . . . . . . Summary Information; The
Merger; Comparative
Rights of Shareholders
5. Pro Forma Financial Information . . . . . . . Selected Pro Forma
Financial
Information; The
Merger - Accounting
Treatment; Pro
Forma Data
<PAGE> 3
6. Material Contracts with the Company Being
Acquired . . . . . . . . . . . . . . . . . . .Introduction; The
Merger - Background
of the Merger
7. Additional Information Required for
Reoffering by Persons and Parties Deemed
to be Underwriters . . . . . . . . . . . . . . *
8. Interests of Named Experts and Counsel. . . . .Legal Matters; Experts
9. Disclosure of Commission Position on
Indemnification for Securities Act Liabilities. . *
B. Information About the Registrant
- -------------------------------------
10. Information with Respect to S-3 Registrants . .Front Cover Page;
Available
Information;
Market Prices and
Selected Financial
Information;
Information with
Respect to
Wesbanco; Index to
Financial Statements;
Government Regulation;
Incorporation of
Certain Documents
by Reference
11. Incorporation of Certain Information by
Reference . . . . . . . . . . . . . . . . . . Incorporation of
Certain Documents by
Reference;
Comparative Stock
Prices and
Dividends;
Information with
Respect to Wesbanco
12. Information with Respect to S-2 or S-3
Registrants . . . . . . . . . . . . . . . . . *
13. Incorporation of Certain Information by
Reference . . . . . . . . . . . . . . . . . . *
14. Information with Respect to Registrants
Other Than S-2 or S-3 Registrants . . . . . . *
<PAGE> 4
C. Information About the Company Being Acquired
- -------------------------------------------------
15. Information with Respect to S-3 Companies . . *
16. Information with Respect to S-2 or S-3
Companies . . . . . . . . . . . . . . . . . . *
17. Information with Respect to Companies
Other Than S-2 or S-3 Companies . . . . . . . Front Cover; Market
Prices and Selected
Financial Information;
Comparative Stock
Prices and
Dividends - Shawnee
Stock Price Range and
Dividends, and
Shawnee Dividend
Policy;
Information with
Respect to Shawnee;
Government
Regulation; Index
to Financial
Statements - Shawnee
Bank, Inc.; Management
Discussion and
Analysis
D. Voting and Management Information
- --------------------------------------
18. Information if Proxies, Consents or
Authorizations are to be Solicited
(a) (1) Date, Time and Place Information . . Summary Information;
Voting Information
(2) Revocability of Proxy. . . . . . . . .Voting Information -
Voting and Revocation
of Proxies
(3) Dissenters' Rights. . . . . . . . . . The Merger - Appraisal
Rights of Dissenting
Shareholders
(4) Persons Making the Solicitation . . .Introduction; Voting
Information;
Solicitation of
Proxies; The
Merger - Expenses
<PAGE> 5
(5) (i) Interest of Certain Persons
in Matters to be Acted Upon. . The Merger - Interest of
Certain Persons in
the Merger;
Information with
Respect to Shawnee
(ii) Voting Securities and Principal
Holders Thereof . . . . . . . .Voting Information -
Voting and Revocation of
Proxies;
Comparative Rights
of Shareholders;
Information with
Respect to Shawnee
Principal
Shareholders;
Information with
Respect to
Wesbanco - Principal
Shareholders
(6) Vote Required for Approval. . . . Summary Information;
Voting Information
Voting and
Revocation of
Proxies; The
Merger - Wesbanco
and Wesbanco South
Hills Shareholder
Approval, and
Conditions and
Covenants
(7) (i) Directors and Executive
Officers . . . . . . . . . . The Merger - Effects of
the Mergers: The
Surviving
Corporations;
Information with
Respect to Shawnee;
Information with
Respect to Wesbanco -
Principal
Shareholders;
Incorporation of
Certain Documents
by Reference
(ii) Executive Compensation. . Incorporation of
Certain Documents by
Reference;
Information with
Respect to Shawnee
<PAGE> 6
(iii) Certain Relationships and
Related Transactions. . . .Incorporation of
Documents
by Reference;
Information with
Respect to Shawnee
(iv) Relationship with Independent
Public Accountant . . . . . Pro Forma Data; Voting
Information Accountants;
Relationship with
Independent Accountants
(v) Incorporation by Reference. Incorporation of Certain
Documents by Reference
19. Information if Proxies, Consents or
Authorizations are not to be Solicited
or in an Exchange Offer. . . . . . . . . . *
20. Indemnification of Directors and
Officers . . . . . . . . . . . . . . . . . Part II - Indemnification
of Directors and Officers
21. Exhibits and Financial Statement
Schedules . . . . . . . . . . . . . . . . .Part II - Exhibits; Index
to Financial Statements
22. Undertakings . . . . . . . . . . . . . . . Part II - Undertakings
* Indicates a negative response or item is not applicable.
<PAGE> 7
SHAWNEE BANK, INC.
1011 MYERS AVENUE
DUNBAR, WEST VIRGINIA 25064
(304) 768-9761
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD JUNE ___, 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 _________, June ___, 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
May __, 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: May __, 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
selfaddressed envelope as promptly as possible.
<PAGE> 8
PROXY STATEMENT/PROSPECTUS
SHAWNEE BANK, INC.
1011 MYERS AVENUE
DUNBAR, WV 25064
Special Meeting of the Shareholders to be held June ___, 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 ___, 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 whollyowned 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 May ___, 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 May ___, 1997.
<PAGE> 9
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 JUNE ___, 1997.
<PAGE> 10
PROXY STATEMENT/PROSPECTUS
--------------------------
TABLE OF CONTENTS
PAGE
----
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . 9
SUMMARY INFORMATION . . . . . . . . . . . . . . . . . . . . . . 13
MARKET PRICES AND SELECTED FINANCIAL INFORMATION . . . 20
Market Prices. . . . . . . . . . . . . . . . . . . . . . . 20
Selected Financial Information . . . . . . . . . . . . . . 20
PRO FORMA SELECTED FINANCIAL INFORMATION FOR
WESBANCO . . . . . . . . . . . . . . . . . . . . . . . . . 21
SELECTED FINANCIAL INFORMATION FOR SHAWNEE. . . . . . . . . . 22
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . 23
VOTING INFORMATION. . . . . . . . . . . . . . . . . . . . . . . 23
Date, Time and Place of the Special Meeting. . . . . . . 23
Voting and Revocation of Proxies . . . . . . . . . . . . . 23
Solicitation of Proxies . . . . . . . . . . . . . . . . . 24
Accountants . . . . . . . . . . . . . . . . . . . . . . . 25
Date for Submission of Shareholder Proposals . . . . . . . 25
THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . 25
General . . . . . . . . . . . . . . . . . . . . . . . . . 25
Background of the Merger . . . . . . . . . . . . . . . . . 26
Recommendation of the Boards of Directors . . . . . . . . 26
Shawnee Reasons for the Merger . . . . . . . . . . . . . . 27
Wesbanco Reasons for the Merger . . . . . . . . . . . . . 28
Interest of Certain Persons in the Merger . . . . . . . . 28
Opinion of LSC Financial Services, Inc. . . . . . . . . . 30
Effective Time. . . . . . . . . . . . . . . . . . . . . . 34
Conversion of Shawnee Common Stock. . . . . . . . . . . . 35
Exchange of Certificates. . . . . . . . . . . . . . . . . 35
Wesbanco, Wesbanco South Hills and Shawnee
Shareholder Approval. . . . . . . . . . . . . . . . . . 36
Effect of the Merger: The Surviving Corporation . . . . 36
Conditions and Covenants. . . . . . . . . . . . . . . . . 37
Approval by Shawnee Shareholders . . . . . . . . . . . . . 37
Government Approvals . . . . . . . . . . . . . . . . . . . 37
Covenants. . . . . . . . . . . . . . . . . . . . . . . . . 38
Other Conditions . . . . . . . . . . . . . . . . . . . . . 38
Waiver and Amendment . . . . . . . . . . . . . . . . . . . 40
Termination. . . . . . . . . . . . . . . . . . . . . . . . 40
The Stockholder Agreement . . . . . . . . . . . . . . . . 40
Rights of Dissenting Shareholders . . . . . . . . . . . . 40
<PAGE> 11
PROXY STATEMENT/PROSPECTUS
--------------------------
TABLE OF CONTENTS
(Continued)
PAGE
----
Resales of Wesbanco Common Stock. . . . . . . . . . . . 42
Expenses . . . . . . . . . . . . . . . . . . . . . 43
Accounting Treatment . . . . . . . . . . . . . . . . . . . 43
Certain Federal Income Tax Consequences of the Merger . . 44
COMPARATIVE STOCK PRICES AND DIVIDENDS . . . . . . . . . . . . 47
Wesbanco Stock Prices and Dividends . . . . . . . . . . . 47
Stock Price Range and Dividends Paid . . . . . . . . . . . 47
Wesbanco Common Stock Dividend Policy . . . . . . . . . . 47
Shawnee Stock Price Range and Dividends . . . . . . . . . 48
Shawnee Dividend Policy . . . . . . . . . . . . . . . . . 49
COMPARATIVE RIGHTS OF SHAREHOLDERS . . . . . . . . . . . . . . 49
Description of Wesbanco Capital Stock . . . . . . . . . . 49
Description of Shawnee Capital Stock . . . . . . . . . . . 50
Comparison of Rights of Wesbanco and Shawnee Shareholders 51
PRO FORMA DATA . . . . . . . . . . . . . . . . . . . . . . . . 53
Notes to Pro Forma Financial Information . . . . . . . . . 56
INFORMATION WITH RESPECT TO WESBANCO . . . . . . . . . . . . . 58
History. . . . . . . . . . . . . . . . . . . . . . . . . . 58
Recent Acquisitions. . . . . . . . . . . . . . . . . . . . 59
Future Acquisitions . . . . . . . . . . . . . . . . . . . 59
Operations . . . . . . . . . . . . . . . . . . . . . . . . 59
Competition . . . . . . . . . . . . . . . . . . . . . . . 61
Principal Shareholders . . . . . . . . . . . . . . . . . . 62
Wesbanco KSOP. . . . . . . . . . . . . . . . . . . . . . . 63
Changes in West Virginia Taxes. . . . . . . . . . . . . . 66
Directors and Executive Officers . . . . . . . . . . . . . 66
Executive Compensation. . . . . . . . . . . . . . . . . . 66
Certain Relationships and Related Transactions . . . . . 66
INFORMATION WITH RESPECT TO SHAWNEE . . . . . . . . . . . . . . 67
History . . . . . . . . . . . . . . . . . . . . . . . . . 67
Banking Services . . . . . . . . . . . . . . . . . . . . . 67
Competition . . . . . . . . . . . . . . . . . . . . . . . 67
Economic Conditions . . . . . . . . . . . . . . . . . . . 68
Monetary Policies . . . . . . . . . . . . . . . . . . . . 68
Properties of Shawnee. . . . . . . . . . . . . . . . . . . 68
<PAGE> 12
PROXY STATEMENT/PROSPECTUS
--------------------------
TABLE OF CONTENTS
(Continued)
PAGE
----
Legal Proceedings . . . . . . . . . . . . . . . . . . . . 69
Principal Shareholders. . . . . . . . . . . . . . . . . . 69
Directors and Executive Officers of Shawnee. . . . . . . . 70
Executive Officers . . . . . . . . . . . . . . . . . . . 72
Compensation of Executive Officers. . . . . . . . . . . . 73
401(k) Profit Sharing Plan. . . . . . . . . . . . . . . . 73
Employment Agreements . . . . . . . . . . . . . . . . . . 74
Meetings of the Board of Directors and Compensation of
Members . . . . . . . . . . . . . . . . . . . . . . . . . 74
Certain Relationships and Related Transactions . . . . . 74
GOVERNMENT REGULATION . . . . . . . . . . . . . . . . . . . . 75
Holding Company Structure . . . . . . . . . . . . . . . . 75
Dividend Restrictions. . . . . . . . . . . . . . . . . . . 76
FDIC Insurance. . . . . . . . . . . . . . . . . . . . . . 77
Capital Requirements . . . . . . . . . . . . . . . . . . . 77
Federal Deposit Insurance Corporation Improvement Act of 1991 79
Environmental Issues . . . . . . . . . . . . . . . . . . . 82
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . 83
RELATIONSHIP WITH INDEPENDENT ACCOUNTANTS . . . . . . . . . . . 84
LEGAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . 84
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
LEGAL PROCEEDINGS. . . . . . . . . . . . . . . . . . . . . . . 85
INDEX TO FINANCIAL STATEMENTS . . . . . . . . . . . . . . . . . 86
APPENDICES . . . . . . . . . . . . . . . . . . . . . . . . . . 106
I. Statutory Excerpts Concerning Dissenters' Rights of
Appraisal 106
II. Agreement and Plan of Merger 125
III. Stockholders Agreement 202
<PAGE> 13
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
of Special Meeting. . . The meeting of the shareholders
Shawnee will be held on _______,
June ___, 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> 14
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> 15
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 May ___, 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> 16
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 Pro Forma 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> 17
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 May ___, 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 May __,
1997, are entitled to vote at the
Special Meeting. See "Voting
Information".
Exchange of Certificates. . As promptly as practicable after the
Effective Date,
<PAGE> 18
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> 19
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> 20
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 May ___, 1997 $____ $____ $____(1) $___ (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> 21
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> 22
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 5,502 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> 23
INTRODUCTION
This Proxy Statement/Prospectus and the accompanying proxy
are being mailed to the shareholders of Shawnee on or about May
___, 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 _________,
June ___, 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 May ___,
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 May
___, 1997, Shawnee Common Stock was held by approximately 200
shareholders of record. As of May __, 1997, Wesbanco Common
Stock was held by approximately _____ shareholders of record.
<PAGE> 24
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 May ___, 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> 25
owners of Shawnee Common Stock held of record by such persons,
and Shawnee may reimburse such custodians, nominees and fiduciaries
for reasonable out-ofpocket 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> 26
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> 27
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> 28
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 nonfinancial 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 May ___, 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> 29
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 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
<PAGE> 30
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 May ___, 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> 31
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> 32
The Board of Directors February 21, 1997
Shawnee Bank, Inc. 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> 33
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> 34
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
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> 35
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> 36
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> 37
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, May ___, 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> 38
The Merger was approved by the West Virginia Board of Banking and
Financial Institutions on March 10, 1997, and the FDIC on __________, 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> 39
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> 40
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
nonappealable 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> 41
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> 42
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> 43
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> 44
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> 45
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> 46
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> 47
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 $_____ and $_____ as of May ___,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 $_____ $_____ $.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> 48
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 May ___, 1997, the pro
forma equivalent price per share for Shawnee Common Stock, based
on the price of Wesbanco
<PAGE> 49
Common Stock on that date, was $________. As of May ___, 1997,
Shawnee had approximately 200 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 May ___, 1997, there were
approximately _____ holders of record of the common stock of
Wesbanco. Of the 25,000,000 shares of authorized common stock,
________ shares were issued and outstanding as of May ____,
1997. For a description of Wesbanco dividend rights, see
"Comparative Stock Prices and Dividends - Wesbanco Common Stock
Dividend Policy".
As of May ___, 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> 50
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 32,027
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 May __, 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> 51
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> 52
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> 53
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> 54
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> 55
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> 56
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> 57
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> 58
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> 59
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> 60
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> 61
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
multibank 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
restriction 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
statewide 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
statewide 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> 62
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> 63
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 May __, 1997, and
assuming a total of ________ shares of Wesbanco Common Stock
outstanding immediately after the Merger, the Trust Department
of Wesbanco Bank Wheeling would own ____%, with sole voting and
investment power over ____% and ____% with shared power.
Directors and Officers, as a group, would beneficiary hold
____% 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 17, 1996, 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> 64
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> 65
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> 66
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> 67
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> 68
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-
toupper 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> 69
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> 70
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.,
2,283 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.
(3) Includes 243 shares held by Brenda H. Robertson, and 10
shares held jointly by her with each of her two children.
<PAGE> 71
(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> 72
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> 73
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> 74
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> 75
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> 76
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
FDICinsured 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> 77
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 riskbased 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> 78
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> 79
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> 80
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> 81
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> 82
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> 83
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> 84
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 & 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 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> 85
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> 86
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 87
Statements of Financial Condition as of December 31, 1996
and 1995 88
Statements of Income for the years ended December 31, 1996,
1995 and 1994 89
Statements of Changes in Shareholders' Equity for the years
ended December 31, 1996, 1995 and 1994 90
Statements of Cash Flows for the years ended December 31,
1996, 1995 and 1994 91
Notes to Financial Statements 93
* 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> 87
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> 88
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> 89
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> 90
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> 91
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> 92
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> 93
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> 94
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> 95
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> 96
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> 97
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> 98
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> 99
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> 100
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> 101
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> 102
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> 103
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> 104
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> 105
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> 106
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> 107
(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> 108
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> 109
PART II
INFORMATION NOT REQUIRED IN THE PROSPECTUS
Item 20. Indemnification of Directors and Officers.
Wesbanco's Bylaws provide, and West Virginia law permits
(Code 31-1-9) the indemnification of directors and officers
against certain liabilities. Officers and Directors of
Wesbanco and its subsidiaries are indemnified generally against
expenses reasonably incurred in connection with proceedings in
which they are made parties by reason of their being or having
been directors or offices of the corporation, except in
relation to matters as to which a recovery may be obtained by
reason of an officer or director having been finally adjudged
derelict in such action or proceeding in the performance of his
duties.
A. Excerpts from the Article VI of the Bylaws of Wesbanco:
Indemnification of Directors and Officers
Each director and officer, whether or not then in office, shall
be indemnified by the corporation against all costs and
expenses reasonably incurred by and imposed upon him in
connection with or resulting from any action, suit or
proceeding, to which he may be made a party by reason of his
being or having been a director or officer of the corporation,
or of any other company which he served at the request of the
corporation, except in relation to matters as to which a
recovery shall be had against him by reason of his having been
finally adjudged derelict in such action, suit or proceeding,
in the performance of his duties as such Director of officer,
and the foregoing right of indemnification shall not be
exclusive of other rights to which he may be entitled as a
matter of law.
B. West Virginia Corporation Law, Code Section 31-1-9:
Section 31-1-9. Indemnification of officers, directors, employees
and agents.
(a) A corporation shall have power to indemnify any
person who was or is a party or is threatened to be made a
party to any threatened pending or completed action or
proceeding, whether civil, criminal, administrative or
investigative (other than an action by or in the right of the
corporation) by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses (including attorney's fees),
judgments, fines, taxes and penalties and interest thereon, and
amounts paid in settlement actually and reasonably incurred by
him in connection with such action or proceeding if he acted in
good faith and in a manner he reasonably believed to be in or
not opposed to the best interest of the corporation, and, with
respect to any criminal action or proceeding, had no reasonable
cause to believe his conduct was unlawful. The termination of
any action or proceeding by judgment, order, settlement,
conviction, or upon a plea of nolo contendere or its equivalent,
shall not, of itself, create a presumption that the person
<PAGE> 110
did not act in good faith and in a manner which he
reasonably believed to be in or not opposed to the best
interest of the corporation, and, with respect to any criminal
action or proceeding, that such person did have reasonable
cause to believe that his conduct was unlawful.
(b) A corporation shall have power to indemnify any
person who was or is a party or is threatened to be made a
party to any threatened, pending or completed action or
proceeding by or in the right of the corporation to procure
judgment in its favor by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director,
officer, employee or agent of another corporation, partnership,
joint venture, trust or other enterprise against expenses
(including attorney's fees) actually and reasonably incurred by
him in connection with the defense or settlement of such action
or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification
shall be made in respect of any claim, issue or matter,
including, but not limited to, taxes or any interest penalties
thereon, as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of his
duty to the corporation unless and only to the extent that the
court in which such action or proceeding was brought shall
determine upon application that, despite the adjudication of
liability but in view of all circumstances of the case, such
person is fairly and reasonably entitled to indemnity for such
expenses which such court shall deem proper.
(c) To the extent that a director, officer, employee or
agent of a corporation has been successful on the merits or
otherwise in defense of any action or proceeding referred to in
subsections (a) or (b), or in defense of any claim, issue or
matter therein, he shall be indemnified against expenses
(including attorney's fees) actually and reasonably incurred by
him in connection therewith.
(d) Any indemnification under subsections (a) or (b)
(unless ordered by a court) shall be made by the corporation
only as authorized in the specific case upon a determination
that indemnification of the director, officer, employee or
agent is proper in the circumstances because he has met the
applicable standard of conduct set forth in Subsections (a) or
(b). Such determination shall be made (1) by the board of
directors by a majority vote of a quorum consisting of
directors who were not parties to such action or proceeding, or
(2) if such a quorum is not obtainable, or even if obtainable a
quorum of disinterested directors so directs, by independent
legal counsel in a written opinion, (3) by the shareholders or
members.
(e) Expenses (including attorney's fees) incurred in
defending a civil or criminal action or proceeding may be paid
by the corporation in advance of the final disposition of such
action or proceeding as authorized in the manner provided in
Subsection (d) upon receipt of an undertaking by or on behalf
of the director, officer, employee or agent to repay such
amount unless it shall ultimately be determined that he is
entitled to be indemnified by the corporation as authorized in
this section.
(f) The indemnification provided by this section shall
not be deemed exclusive of any other rights to which any
shareholder or member may be entitled under any bylaw,
agreement,
<PAGE> 111
vote of shareholders, members or disinterested directors or
otherwise, both as to action in his official capacity and as
to action in another capacity while holding such office, and shall
continue as to a person who has ceased to be a director, officer,
employee or agent and shall inure to the benefit of the heirs,
executors, and administrators of such a person.
(g) A corporation shall have power to purchase and
maintain insurance on behalf of any person who is or was a
director, officer, employee or agent of the corporation, or is
or was serving at the request of the corporation as a director,
officer, employee, or agent of another corporation,
partnership, joint partnership, joint venture, trust or other
enterprise against any liability asserted against him and
incurred by him in any such capacity or arising out of his
status as such, whether or not the corporation would have the
power to indemnify him against such liability under the
provisions of this section. (1961,c.15; 1974,c.13; 1975,c.118.)
Wesbanco does provide indemnity insurance to its officers
and directors. Such insurance will not, however, indemnify
officers or directors for willful misconduct or gross
negligence in the performance of a duty to Wesbanco.
<PAGE> 112
Item 21. Exhibits and Financial Statement Schedules.
NUMBER TITLE
2 Agreement and Plan of Merger, By and Between
Wesbanco, Inc., Shawnee Bank, Inc. and Wesbanco
Bank South Hills, dated December 19, 1996
3.1 Articles of Incorporation of Wesbanco Restated
as of November 17, 1995(1)
3.2 Bylaws of Wesbanco, Inc.(1)
4.1 Specimen Certificate of Wesbanco Common Stock (2)
5 Opinion of Phillips, Gardill, Kaiser & Altmeyer
as to the Legality of the Shares Being Registered
8 Opinion of Kay, Casto, Chaney, Love & Wise as to
Certain Tax Matters (To be filed by Amendment)
10.1 Stockholder Agreement By and Between Wesbanco,
Inc. and Certain Stockholders of Shawnee Bank, Inc.
Dated December 19, 1996
10.2 The Restated Wesbanco Directors' Deferred
Compensation Plan Effective December 15, 1994(1)
10.3 Employment Agreement Between Robert H. Martin,
First National Bank in Fairmont and Wesbanco
Dated February 28, 1994(3)
10.4 Employment Agreement Between Ernest S. Fragale, Wesbanco
Mortgage Company and Wesbanco, Inc. Dated the 20th Day of
August, 1996
10.5 Employment Agreement Between Frank R. Kerekes, First
National Bank in Fairmont and Wesbanco Dated
February 28, 1994(3)
10.6 Employment Agreement Between Robert E. Moran, Bridgeport
Bank and Wesbanco Dated February 28, 1994(3)
<PAGE> 113
Item 21. Exhibits and Financial Statement Schedules (Continued).
NUMBER TITLE
10.7 Employment Agreement Effective January 1,
1993, By and Between Edward M. George,
Wesbanco and Wesbanco Bank Wheeling(3)
10.8 Employment Agreement Effective January 1,
1993, By and Between Paul M. Limbert,
Wesbanco and Wesbanco Bank Wheeling(3)
10.9 Employment Agreement Effective January 1,
1993, By and Between Dennis P. Yaeger,
Wesbanco and Wesbanco Bank Wheeling(3)
10.10 Employment Agreement Effective January 1,
1993, By and Between Jerome B. Schmitt,
Wesbanco and Wesbanco Bank Wheeling(3)
10.11 Employment Agreement Effective December 2,
1991, By and Between Stephen F. Decker,
Albright National Bank of Kingwood, and
Wesbanco(3)
10.12 Employment Agreement Effective December 2,
1991, By and Between Rudy F. Torjak, Albright
National Bank of Kingwood, and Wesbanco(3)
10.13 Employment Agreement Effective November 14,
1990, By and Between Jerry A. Halverson, First
National Bank of Wheeling and Wesbanco, Inc.(3)
10.14 Employment Agreement Effective December 1,
1993, By and Between Thomas L. Jones, Wesbanco
and Wesbanco Bank South Hills(3)
10.15 Employment Agreement Effective December 1,
1993, By and Between Larry L. Dawson, Wesbanco
and Wesbanco Bank South Hills(3)
10.16 Employment Agreement Effective January 1,
1993, By and Between John W. Moore, Jr.,
Wesbanco and Wesbanco Bank Wheeling(3)
<PAGE> 114
Item 21. Exhibits and Financial Statement Schedules (Continued).
NUMBER TITLE
10.17 Employment Agreement By and Between Bank
of Weirton, George M. Molnar and Wesbanco,
Inc. Dated the 30th Day of August, 1996
10.18 Employment Agreement By and Between The
National Bank of West Virginia, Wesbanco, Inc. and
C. Barton Loar Dated December 30, 1996(4)
10.19 Employment Agreement By and Between Shawnee
Bank, Inc. and Brenda H. Robertson Dated December 14,
1993, as Amended by First Amendment Dated November 19,
1996.
10.20 Proposed Employment Agreement By and Between
Brenda H. Robertson, Wesbanco Bank South Hills and
Wesbanco, Inc. to be Dated as of the Effective Date
of the Merger.
11.1 Computation of Per Share Earnings of
Wesbanco (Included in Pro Forma Data)
11.2 Computation of Per Share Earnings of
Shawnee (Included in Pro Forma Data)
12.1 Computation of Earnings to Combined Fixed
Charges of Wesbanco, Shawnee and Pro Forma
13.1 Wesbanco Annual Report to Shareholders for
the Year Ended December 31, 1996
(incorporated by reference)
13.2 Wesbanco Annual Report on Form 10-K for
the Year Ended December 31, 1996
(incorporated by reference)
13.3 Wesbanco Proxy Statement for the Annual
Meeting of Shareholders Held on April 16,
1997 (incorporated by reference)
21 Subsidiaries of Wesbanco
<PAGE> 115
Item 21. Exhibits and Financial Statement Schedules (Continued).
NUMBER TITLE
23.1 Consent of Price Waterhouse LLP
23.2 Consent of Phillips, Gardill, Kaiser & Altmeyer
23.3 Consent of Kay, Casto, Chaney, Love & Wise
23.4 Consent of Grant Thornton LLP
23.5 Consent of LSC Financial Services, Inc.
23.6 Consent of Rollins, Cleavenger and Rollins
23.7 Consent of Ernst & Young LLP
24 Power of Attorney (Incorporated in the
Registration Statement)
99.1 Shawnee Form of Proxy
(1) This exhibit is being incorporated by reference with
respect to a prior Registration Statement filed by the
Registrant on Form S-4 under Registration No. 333-3905
which was filed with the Securities and Exchange
Commission on June 20, 1996.
(2) This exhibit is being incorporated by reference with
respect to a prior Registration Statement filed by the
Registration on Form S-4 under Registration No. 33-42157
which was filed with the Securities and Exchange
Commission on August 9, 1991.
(3) This exhibit is being incorporated by reference with
respect to a prior Registration Statement filed by the
Registrant on Form S-4 under Registration No. 33-72228
which was filed with the Securities and Exchange
Commission on November 30, 1993.
(4) This exhibit is being incorporated by reference with
respect to a prior Registration Statement filed by the
Registrant on Form S-4 under Registration No. 333-11461
which was filed with the Securities and Exchange
Commission on November 6, 1996.
Item 22. Undertakings.
The undersigned registrant hereby undertakes as follows:
(a) The undersigned registrant hereby undertakes to
deliver or cause to be delivered with the Prospectus, to each
person to whom the Prospectus is sent or given, the latest
report to
<PAGE> 116
security holders that is incorporated by reference in
the Prospectus and furnished pursuant to and meeting the
requirements of Rule 14(a)-3 or Rule (c)-3 under the Securities
Exchange Act of 1934; and, where interim financial information
required to be presented by Article 3 of Regulation S-X is not
set forth in the Prospectus, to deliver or cause to be
delivered, to each person to whom the Prospectus is sent or
given the latest quarterly report that is specifically
incorporated by reference in the Prospectus to provide such
interim financial information.
(b) The undersigned registrant hereby undertakes as
follows: That prior to any public reoffering of the securities
registered hereunder through use of a Prospectus which is a
part of this Registration Statement, by any person party who is
deemed to be an underwriter within the meaning of Rule 145(c),
the issuer undertakes that such reoffering Prospectus will
contain the information called for by the applicable
registration form with respect to reofferings by persons who
may be deemed underwriters, in addition to the information
called for by the other items of the applicable form.
(c) The registrant undertakes that every Prospectus (i)
that is filed pursuant to Paragraph (b) immediately preceding,
or (ii) that purports to meet the requirements of Section
10(a)(3) of the Act and is used in connection with an offering
of securities subject to Rule 415, will be filed as a part of
an amendment to the Registration Statement and will not be used
until such amendment is effective, and that, for purposes of
determining any liability under the Securities Act of 1933,
each such post-effective amendment shall be deemed to be a new
Registration Statement relating to the securities offered
therein, and the offering of such securities at that time shall
be deemed to be the initial bona fide offering thereof.
(d) Insofar as indemnification for liabilities arising
under the Securities Act of 1933 may be permitted to directors,
officers and controlling persons of the registrant pursuant to
the foregoing provisions, or otherwise, the registrant has been
advised that in the opinion of the Securities & Exchange
Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the
registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or
controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
(e) The undersigned registrant hereby undertakes to
respond to requests for information that is incorporated by
reference into the Prospectus pursuant to Items 4, 10(b), 11 or
13 of this form, within one (1) business day of receipt of such
request, and to send the incorporated documents by first class
mail or other equally prompt means. This includes information
contained in documents filed subsequent to the effective date
of the Registration Statement through the date of responding to
the request.
<PAGE> 117
(f) The undersigned registrant hereby undertakes to
supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired
involved therein, that was not the subject of and included in
the Registration Statement when it became effective.
(g) The undersigned registrant hereby undertakes that,
for purposes of determining any liability under the Securities
Act of 1933, each filing of the registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d)
of the Securities Exchange Act of 1934), that is incorporated
by reference in the Registration Statement, shall be deemed to
be a new Registration Statement relating to the securities
offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering
thereof.
(h) The undersigned registrant hereby undertakes.:
(1) To file, during any period in which
offers or sales are being made, a post-effective
amendment to this Registration Statement: (i) to
include any prospectus required by Section
10(a)(3) of the Securities Act of 1933; (ii) to
reflect in the prospectus any facts or events
arising after the Effective Date of the
Registration Statement (or the most recent post-
effective amendment thereof) which, individually
or in the aggregate, represent a fundamental
change in the information set forth in the
Registration Statement; (iii) to include any
material information with respect to the plan of
distribution not previously disclosed in the
Registration Statement or any material change to
such information in the Registration Statement;
(2) That, for the purpose of determining
any liability under the Securities Act of 1933,
each such post-effective amendment shall be
deemed to be a new Registration Statement
relating to the securities offered therein, and
the offering of such securities at that time shall
be deemed to be the initial bona fide offering
thereof; and
(3) To remove from registration by means of
a post-effective amendment any of the securities
being registered which remain unsold at the
termination of the offering.
<PAGE> 118
SIGNATURES
Pursuant to the requirements of the Securities Act of
1933, the registrant has duly caused this Registration
Statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Wheeling, West
Virginia, on March 28, 1997.
WESBANCO, INC.
By /s/ E. M. George
-----------------------------------------
Its President and Chief Executive Officer
POWER OF ATTORNEY
We, the undersigned officers and directors of Wesbanco,
Inc., hereby severally constitute James C. Gardill and Edward
M. George, and each of them singly, our true and lawful
attorneys with full power to them, and each of them singly, to
sign for us and in our names and in the capacities indicated
below, the Registration Statement filed herewith and any and
all such things in our name and behalf in our capacities as
officers and directors to enable Wesbanco, Inc. to comply with
the provisions of the Securities Act of 1933, as amended, and
all requirements of the Securities Act of 1933, as amended,
hereby ratifying and confirming our signatures as they may be
signed by our attorneys, or any of them, to said Registration
Statement and any and all amendments thereto.
Pursuant to the requirements of the Securities Act of
1933, this Registration Statement and Power of Attorney have
been signed by the following persons in the capacities and on
the dates indicated.
SIGNATURE TITLE DATE
- --------- ----- ----
/s/ James C. Gardill Chairman, Director March 28, 1997
- ---------------------
James C. Gardill
/s/ E. M. George President, Chief Executive March 28, 1997
- ----------------- Officer & Director
Edward M. George (Principal Executive Officer)
/s/ Paul M. Limbert Executive Vice President March 28, 1997
- ------------------- & Chief Financial Officer
Paul M. Limbert (Principal Financial and
Accounting Officer)
<PAGE> 119
SIGNATURE TITLE DATE
- --------- ----- ----
- ----------------- Director March ___, 1997
John W. Kepner
/s/ Frank R. Kerekes Director March 28, 1997
- ---------------------
Frank R. Kerekes
/s/ Robert H. Martin Director March 28, 1997
- ---------------------
Robert H. Martin
_____________________ Director March ___, 1997
Melvin C. Snyder, Jr.
/s/ Joan C. Stamp Director March 28, 1997
- -----------------
Joan C. Stamp
/s/ John A. Welty Director March 28, 1997
- -----------------
John A. Welty
/s/ James E. Altmeyer Director March 28, 1997
- ---------------------
James E. Altmeyer
/s/ Charles J. Bradfield Director March 28, 1997
- ------------------------
Charles J. Bradfield
- --------------------- Director March ___, 1997
Christopher V. Criss
/s/ Stephen F. Decker Director March 28, 1997
- ---------------------
Stephen F. Decker
/s/ Roland L. Hobbs Director March 28, 1997
- --------------------
Roland L. Hobbs
______________________ Director March ___, 1997
Eric Nelson
________________________ Director March ___, 1997
Reed J. Tanner
________________________ Director March ___, 1997
Frank K. Abruzzino
<PAGE> 120
SIGNATURE TITLE DATE
- --------- ----- ----
________________________ Director March ___, 1997
Earl C. Atkins
/s/ Ray A. Byrd Director March 28, 1997
- ----------------
Ray A. Byrd
________________________ Director March ___, 1997
James D. Entress
/s/ Carter W. Strauss Director March 28, 1997
- ---------------------
Carter W. Strauss
/s/ Thomas L. Thomas Director March 28, 1997
- ---------------------
Thomas L. Thomas
/s/ William E. Witschey Director March 28, 1997
- -----------------------
William E. Witschey
/s/ Ernest S. Fragale Director March 28, 1997
- ---------------------
Ernest S. Fragale
/s/ George M. Molnar Director March 28, 1997
- --------------------
George M. Molnar
____________________ Director March ___, 1997
R. Peterson Chalfant
<PAGE> 121
EXHIBIT INDEX
--------------
NUMBER TITLE
- ------ -----
2 Agreement and Plan of Merger, By and Between
Wesbanco, Inc., Shawnee Bank, Inc. and Wesbanco
Bank South Hills, dated December 19, 1996 125
3.1 Articles of Incorporation of Wesbanco Restated
as of November 17, 1995(1) *
3.2 Bylaws of Wesbanco, Inc.(1) *
4.1 Specimen Certificate of Wesbanco Common Stock (2) *
5 Opinion of Phillips, Gardill, Kaiser & Altmeyer
as to the Legality of the Shares Being Registered 200
8 Opinion of Kay, Casto, Chaney, Love & Wise as to
Certain Tax Matters (To be filed by Amendment) *
10.1 Stockholder Agreement By and Between Wesbanco,
Inc. and Certain Stockholders of Shawnee Bank, Inc.
Dated December 19, 1996 202
10.2 The Restated Wesbanco Directors' Deferred
Compensation Plan Effective December 15, 1994(1) *
10.3 Employment Agreement Between Robert H. Martin,
First National Bank in Fairmont and Wesbanco
Dated February 28, 1994(3) *
10.4 Employment Agreement Between Ernest S. Fragale,
Wesbanco Mortgage Company and Wesbanco, Inc.
Dated the 20th Day of August, 1996(4) *
10.5 Employment Agreement Between Frank R. Kerekes,
First National Bank in Fairmont and
Wesbanco Dated February 28, 1994(3) *
10.6 Employment Agreement Between Robert E. Moran,
Bridgeport Bank and Wesbanco Dated
February 28, 1994(3) *
<PAGE> 122
NUMBER TITLE
- ------ -----
10.7 Employment Agreement Effective January 1,
1993, By and Between Edward M. George,
Wesbanco and Wesbanco Bank Wheeling(3) *
10.8 Employment Agreement Effective January 1,
1993, By and Between Paul M. Limbert,
Wesbanco and Wesbanco Bank Wheeling(3) *
10.9 Employment Agreement Effective January 1,
1993, By and Between Dennis P. Yaeger,
Wesbanco and Wesbanco Bank Wheeling(3) *
10.10 Employment Agreement Effective January 1,
1993, By and Between Jerome B. Schmitt,
Wesbanco and Wesbanco Bank Wheeling(3) *
10.11 Employment Agreement Effective December 2,
1991, By and Between Stephen F. Decker,
Albright National Bank of Kingwood, and
Wesbanco(3) *
10.12 Employment Agreement Effective December 2,
1991, By and Between Rudy F. Torjak, Albright
National Bank of Kingwood, and Wesbanco(3) *
10.13 Employment Agreement Effective November 14,
1990, By and Between Jerry A. Halverson, First
National Bank of Wheeling and Wesbanco, Inc.(3) *
10.14 Employment Agreement Effective December 1,
1993, By and Between Thomas L. Jones, Wesbanco
and Wesbanco Bank South Hills(3) *
10.15 Employment Agreement Effective December 1,
1993, By and Between Larry L. Dawson, Wesbanco
and Wesbanco Bank South Hills(3) *
10.16 Employment Agreement Effective January 1,
1993, By and Between John W. Moore, Jr.,
Wesbanco and Wesbanco Bank Wheeling(3) *
<PAGE> 123
NUMBER TITLE
- ------ -----
10.17 Employment Agreement By and Between Bank
of Weirton, George M. Molnar and Wesbanco,
Inc. Dated the 30th Day of August, 1996 *
10.18 Employment Agreement By and Between The National
Bank of West Virginia, Wesbanco, Inc. and C.
Barton Loar Dated December 30, 1996(4) *
10.19 Employment Agreement By and Between Shawnee Bank,
Inc. and Brenda H. Robertson Dated December 14, 1993,
as Amended by First Amendment Dated November 19, 1996. 206
10.20 Proposed Employment Agreement By and Between
Brenda H. Robertson, Wesbanco Bank South Hills and
Wesbanco, Inc. to be Dated as of the Effective Date of
the Merger. (Exhibit B to Item No. 2) *
11.1 Computation of Per Share Earnings of
Wesbanco (Included in Pro Forma Data) *
11.2 Computation of Per Share Earnings of Shawnee
(Included in Pro Forma Data) *
12.1 Computation of Earnings to Combined Fixed
Charges of Wesbanco, Shawnee and Pro Forma 214
13.1 Wesbanco Annual Report to Shareholders for
the Year Ended December 31, 1996
(incorporated by reference) *
13.2 Wesbanco Annual Report on Form 10-K for the
Year Ended December 31, 1996 (incorporated
by reference) *
13.3 Wesbanco Proxy Statement for the Annual
Meeting of Shareholders Held on April 16,
1997 (incorporated by reference) *
21 Subsidiaries of Wesbanco 215
23.1 Consent of Price Waterhouse LLP 216
<PAGE> 124
NUMBER TITLE
- ------ -----
23.2 Consent of Phillips, Gardill, Kaiser & Altmeyer 217
23.3 Consent of Kay, Casto, Chaney, Love & Wise 218
23.4 Consent of Grant Thornton LLP 219
23.5 Consent of LSC Financial Services, Inc. 220
23.6 Consent of Rollins, Cleavenger and Rollins 221
23.7 Consent of Ernst & Young LLP 222
24 Power of Attorney (Incorporated in the
Registration Statement) *
99.1 Shawnee Form of Proxy 223
* Indicates document provided elsewhere or incorporated by reference.
(1) This exhibit is being incorporated by reference with respect
to a prior Registration Statement filed by the Registrant on
Form S-4 under Registration No. 333-3905 which was filed
with the Securities and Exchange Commission on June 20, 1996.
(2) This exhibit is being incorporated by reference with respect
to a prior Registration Statement filed by the Registration
on Form S-4 under Registration No. 33-42157 which was filed
with the Securities and Exchange Commission on August 9, 1991.
(3) This exhibit is being incorporated by reference with respect
to a prior Registration Statement filed by the Registrant on
Form S-4 under Registration No. 33-72228 which was filed
with the Securities and Exchange Commission on November 30, 1993.
(4) This exhibit is being incorporated by reference with respect
to a prior Registration Statement filed by the Registrant on
Form S-4 under Registration No. 333-11461 which was filed
with the Securities and Exchange Commission on November 6, 1996.
<PAGE> 125
EXHIBIT 2
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> 126
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> 127
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> 128
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> 129
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> 130
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> 131
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> 132
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> 133
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> 134
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> 135
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> 136
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> 137
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> 138
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> 139
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> 140
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> 141
(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> 142
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> 143
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> 144
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> 145
(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> 146
(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> 147
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> 148
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> 149
(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> 150
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> 151
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> 152
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> 153
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> 154
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> 155
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> 156
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> 157
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> 158
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> 159
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> 160
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> 161
(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> 162
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> 163
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> 164
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> 165
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> 166
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> 167
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> 168
(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> 169
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> 170
(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> 171
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> 172
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> 173
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> 174
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> 175
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> 176
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> 177
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> 178
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> 179
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> 180
(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> 181
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> 182
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> 183
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> 184
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> 185
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> 186
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> 187
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> 188
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> 189
WESBANCO BANK SOUTH HILLS, a West
Virginia corporation
By /s/ Larry L. Dawson
----------------------------------
Its President & CEO
--------------------------
(SEAL)
ATTEST:
/s/ Thomas L. Jones
- --------------------------------
Secretary
<PAGE> 190
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> 191
"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> 192
EXHIBIT B
---------
AGREEMENT
---------
THIS AGREEMENT, made and entered into this ________ day of
_____________, 1997, by and between BRENDA H. ROBERTSON,
hereinafter referred to as "Employee" and WESBANCO BANK SOUTH
HILLS, hereinafter referred to as "Bank", and WESBANCO, INC., a
West Virginia corporation, hereinafter referred to as "Wesbanco".
WHEREAS, Employee is serving as an executive officer of the
Bank as of the date hereof; and
WHEREAS, the Bank wishes to assure itself of the Employee's
full time employment and continuing services in an executive
capacity.
WITNESSETH THAT: In consideration of the mutual promises
and undertakings hereinafter set forth, the parties hereto agree
as follows:
1. OFFER OF EMPLOYMENT. The Bank agrees to, and hereby
--------------------
does, continue the employment of Employee at Bank in an executive
capacity. In that capacity, Employee shall be answerable to the
Board of Directors of the Bank and such other officers of
Wesbanco, the parent company of the Bank, as the Board of
Directors of Wesbanco shall direct. Employee shall perform such
duties, compatible with her employment under this Agreement, as
the Bank, and Wesbanco, from time to time may assign to her.
2. COMPENSATION. As compensation for the performance of
-------------
the services specified in Paragraph (1) and the observance of all
of the provisions of this Agreement, the Bank agrees to pay
Employee, and Employee agrees to accept, the following amounts
and benefits during her term of employment:
<PAGE> 193
(A) Salary at a rate to be determined by the
Board of Directors of the Bank, with notice to be
given to employee in April of each calendar year,
but in no event shall Employee's salary be less
than the salary in effect as of the date of
execution of that certain Agreement and Plan of
Merger by and between Wesbanco, Shawnee Bank, Inc.
and Bank, dated the ___ day of December, 1996, plus
any increases granted by the Board of Directors
after the date hereof, and payable in equal
biweekly installments; and
(B) Such other miscellaneous benefits and
perquisites as the Bank provides to its executive
employees generally.
3. ACCEPTANCE OF EMPLOYMENT. Employee accepts the
-------------------------
employment provided for herein, at the salary set forth above,
and agrees to devote her talents and best efforts to the
diligent, faithful, and efficient discharge of the duties of her
employment, and in furtherance of the operations and best
interests of Bank, and observe and abide by all rules and
regulations promulgated by Bank for the guidance and direction of
its employees and the conduct of its business, operations, and
activities.
4. TERM OF AGREEMENT. The employment term provided for
------------------
herein shall consist of a revolving period of three years, with
the initial term beginning on the ____ day of __________, 19__,
and ending on the ____ day of ___________, 19___. The term of
this Agreement shall automatically be extended on each
anniversary of the beginning date of the term hereof for an
additional one year, thereby creating a new three year term,
unless written notice of termination hereof is given by either
party at least ninety (90) days prior to the anniversary date of
the beginning date of this Agreement. Any such notice of non-
renewal shall not affect the continuation of the term of this
Agreement existing at the time of such non-renewal.
<PAGE> 194
5. CONFIDENTIALITY. Employee agrees that such information
----------------
concerning the business, affairs, and records of Bank as she may
acquire in the course of, or as incident to, her employment
hereunder, shall be regarded and treated as being of a
confidential nature, and that she will not disclose any such
information to any person, firm, or corporation, for her own
benefit or to the detriment of Bank, during the term of her
employment under this Agreement or at any time following the
termination thereof.
6. MISCELLANEOUS BENEFITS. This Agreement is not intended,
-----------------------
and shall not be deemed to be in lieu of any rights, benefits,
and privileges to which Employee may be entitled as an Employee
of Bank under any retirement, pension, profit sharing, insurance,
hospital, bonus, vacation, or other plan or plans which may now
be in effect or which may hereafter be adopted by Bank, it being
understood that Employee shall have the same rights and
privileges to participate in such plans and benefits, as any
other employee, during the period of her employment.
7. BINDING EFFECT. This Agreement shall inure to the
---------------
benefit of and be binding upon Bank's successors and assigns,
including, without limitation, any company or corporation which
may acquire substantially all of Bank's assets or business, or
with, or into which Bank may be merged or otherwise consolidated.
8. TERMINATION. The Employee's employment hereunder shall
------------
terminate upon the earliest to occur of any one of the following:
(A) The expiration of the initial term of
this Agreement, or any extended term of this
Agreement by written notice of termination as
provided in Paragraph (4) hereof; or
<PAGE> 195
(B) By the Bank for cause, after thirty (30)
days written notice to Employee. Cause for
purposes of this Agreement shall mean as follows:
(i) An act of dishonesty, willful
disloyalty or fraud by the Employee that
the Bank determines is detrimental to
the best interests of the Bank; or
(ii) The Employee's continuing
inattention to, neglect of, or inability
to perform, the duties to be performed
under this Agreement, or
(iii) Any other breach of the
Employee's covenants contained herein or
of any of the other terms and provisions
of this Agreement, or
(iv) The deliberate and intentional
engaging by the Employee in gross
misconduct which is materially and
demonstrably injurious to the Bank.
(C) Employee shall have the right to
terminate this Agreement and her active employment
hereunder at any time upon ninety (90) days written
notice to the Bank.
(D) Upon the death of Employee, this
Agreement shall automatically terminate.
9. EFFECT OF TERMINATION. In the event of a termination of
----------------------
this Agreement, Employee shall be paid the following severance
benefits, payable promptly after the date of termination of her
employment, in the following manner:
<PAGE> 196
(A) In the event that this Agreement is
terminated by the death of Employee, this Agreement
shall be deemed to have been terminated as of the
date of such death except, however, that Bank shall
pay to the surviving spouse of Employee, or in lieu
thereof, to Employee's estate, an amount equal to
six months of the base salary at her then current
base rate, provided, however, that if such death
occurs within six months of the normal retirement
date as provided by the Bank's defined benefit
pension plan, or after such normal retirement date,
so that a pension distribution or benefit is
payable to the surviving spouse of Employee, such
payment shall be reduced to an amount equal to one
month of the base salary at her then current base
rate.
(B) In the event that this Agreement is
terminated by Employee and Bank by mutual
agreement, then Bank shall pay such severance
benefits, if any, as shall have been agreed upon by
Bank and Employee.
(C) In the event that Bank attempts to
terminate this Agreement, other than for cause,
death of Employee, or by mutual agreement with
Employee, in addition to any other rights or
remedies which Employee may have, Employee shall
receive an amount equal to the greater of (i) six
months of base salary at her then current base
rate, or (ii) the base salary Employee would have
received had she continued to be employed pursuant
to this Agreement throughout the end of the then
existing term of employment hereunder.
<PAGE> 197
(D) In the event Bank terminates this
Agreement for cause, no severance benefits shall be
payable hereunder.
10. ENTIRE UNDERSTANDING; AMENDMENT. This Agreement
--------------------------------
supersedes all previous agreements between Employee and Bank and
contains the entire understanding and agreement between the
parties with respect to the subject matter hereof, and cannot be
amended, modified, or supplemented in any respect except by a
subsequent written agreement executed by both parties.
11. APPLICABLE LAW. This Agreement shall be governed by
---------------
and construed in accordance with the laws of the State of West
Virginia.
12. CERTAIN OBLIGATIONS OF WESBANCO. While the parties
--------------------------------
acknowledge that certain provisions of this Agreement may be
unenforceable in some respects against the Bank, pursuant to
applicable banking law, it is nonetheless the intention of the
parties to create pursuant to this Agreement a valid employment
for a definite term with specified benefits. As an inducement
for Employee and Bank to enter into this Agreement whereby
Employee would be employed by Bank for a definite term, Wesbanco
hereby undertakes the independent, separate and unconditional
obligation to Employee to pay all amounts which are or may become
due to Employee under this Agreement as set forth herein,
regardless of the status of the direct or indirect enforceability
or validity of Bank's obligation to pay any or all such amounts
as may be due hereunder to Employee; provided, however, that for
purposes of this Paragraph 12, Wesbanco shall be obligated to the
Employee for any bonuses or any increases in base salary in
excess of the rate described in subsection (A) of Section 2
hereof only to the extent that it has consented to such bonuses
or increases. Wesbanco also acknowledges that it may or may not
be entitled to indemnification or contribution from Bank or to be
subrogated to the claim of
<PAGE> 198
Employee hereunder for any payments Wesbanco may make to Employee;
and Wesbanco hereby specifically waives any rights it may otherwise have
to indemnification or contribution from Bank or to be subrogated to the
claim of Employee hereunder in the event that such payments as are made by
Wesbanco would be unenforceable or invalid for any reason against Bank.
13. MISCELLANEOUS. The invalidity or unenforceability of
--------------
any term or provision of this Agreement as against any one or
more parties hereto, shall not impair or effect the other
provisions hereof or the enforceability of said term or provision
against the other parties hereto, and notwithstanding any such
invalidity or unenforceability, each term or provision hereof
shall remain in full force and effect to the full extent
consistent with law.
IN WITNESS WHEREOF, Bank and Wesbanco have caused these
presents to be signed and their corporate seals to be hereto
affixed, and Employee has hereto affixed her signature and seal,
at ______________, West Virginia, as of the day and year first
above written.
WESBANCO BANK SOUTH HILLS
By___________________________________
Its __________________
(SEAL)
ATTEST:
_____________________________
Secretary
___________________________________(SEAL)
BRENDA H. ROBERTSON
<PAGE> 199
WESBANCO, INC.
By____________________________________
Its ____________________
(SEAL)
ATTEST:
____________________________
Secretary
Its________________
<PAGE> 200
EXHIBIT 5
PHILLIPS, GARDILL, KAISER & ALTMEYER
LAWYERS [Letterhead]
61 Fourteenth Street
Wheeling, West Virginia 26003
March 27, 1997
Wesbanco, Inc.
One Bank Plaza
Wheeling, WV 26003
RE: Proposed Acquisition of Shawnee Bank, Inc.
Gentlemen:
In connection with the Registration of the Common Stock of
Wesbanco, Inc. (hereinafter "Wesbanco") under the provisions of
the Securities Act of 1933, you have requested our opinion
regarding the legality of the securities of Wesbanco to be issued
as a result of the Agreement and Plan of Merger by and between
Wesbanco, Shawnee Bank, Inc. and Wesbanco Bank South Hills, dated
December 19, 1996 (hereinafter "Agreement").
In conjunction with this opinion, we have examined such
corporate records of Wesbanco, the Agreement, and such other
agreements and instruments, certificates of public officials,
certificates of officers and representatives of Wesbanco, and
other documents, as we have deemed necessary for purposes of
issuing the opinion hereinafter expressed. All legal proceedings
taken thus far in connection with the issuance of these shares
have been in form and substance satisfactory to us.
It is our opinion that Wesbanco is duly organized and
validly existing under the laws of the State of West Virginia as
a bank holding company and that, when the exchange of stock is
completed as contemplated in the foregoing Agreement, and the
effectiveness of the Registration Statement to be filed with
regard thereto is confirmed by the Securities & Exchange
Commission, the securities being registered will be legally
issued, fully paid and nonassessable under the laws of the State
of West Virginia and of the United States.
<PAGE> 201
Wesbanco, Inc.
March 27, 1997
Page 2
We hereby consent to the inclusion of this opinion as an
exhibit to the above-mentioned Registration Statement and to the
reference to this firm and its opinions included in the
Registration Statement.
Yours very truly,
PHILLIPS, GARDILL, KAISER & ALTMEYER
By /s/ James C. Gardill
JCG/mmr
<PAGE> 202
EXHIBIT 10.1
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);
<PAGE> 203
(b) except as otherwise expressly permitted
hereby, such Stockholder shall not, prior to the
meeting of the Company's stockholders referred to
in 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.
<PAGE> 204
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
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> 205
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
Anastasia D. Payne
Trust 2 512
Anastasia D. Payne
Trust 3 512
Payne Gallatin Mining
Co. 1,294
<PAGE> 206
EXHIBIT 10.19
THIS AGREEMENT, made in duplicate this 14th day of December,
1993, by and between SHAWNEE BANK, INC., a West Virginia banking
corporation, of Dunbar, West Virginia, hereinafter sometimes
called Bank, and BRENDA H. ROBERTSON, now residing in Charleston,
West Virginia, hereinafter sometimes called Executive.
WITNESSETH
WHEREAS, Bank has engaged Executive as its President and
Chief Executive Officer and Executive began such employment on
January 1, 1991; and
WHEREAS, the parties wish to set forth their agreement and
understanding of her engagement as an inducement to Executive to
continue in such capacities;
NOW, THEREFORE, in consideration of the premises and the
agreements and obligations hereinafter set forth, Bank and
Executive hereby agree and contract with one another as follows:
1. Bank has engaged Executive as President and Chief
Executive Officer of Bank and as a member of its board of
directors, and Executive has agreed to serve in such capacities,
or in other capacities as from time to time may be agreed upon by
the board of directors and Executive, as hereinafter stated. The
term of this Agreement shall begin on December 16, 1993, and
shall terminate on December 31, 1998.
2. Executive entered upon the performance of her duties on
January 1, 1991.
3. Executive shall exert her best efforts and her full
time and attention to the performance of her duties hereunder,
performing those duties normal to her position, subject to the
general direction and approval and final control of Bank's board
of directors, on which Executive shall also serve.
<PAGE> 207
4. Executive shall report to the Chairman of the Board of
Directors of Bank or to its board of directors in his absence or
to both.
5. Bank shall pay to Executive an annual salary of Fifty-
five Thousand Dollars ($55,000.00). Such salary shall be paid in
the same manner and frequency as are the salaries of other
executive officers of Bank and shall be subject to an annual
compensation review in the same manner as the remuneration of
such other executive officers is reviewed.
6. Bank may terminate this Agreement and the employment of
Executive for cause or by reason of her disability. "Cause"
shall be limited to any material breach by Executive of her
obligations under this Agreement, including (i) refusal or
deliberate failure to carry out policies laid down by Bank's
board of directors, (ii) indictment or conviction of executive
for embezzlement, criminal fraud, or any other crime involving
moral turpitude, (iii) the receipt by Bank of a written
recommendation from the Federal Deposit Insurance Corporation,
Department of Banking of the State of West Virginia or other
regulatory authority recommending, requesting or demanding the
removal of Executive as President, Chief Executive Officer and
director of the Bank, (iv) any justifiable cause that would
warrant a similarly situated employer to Bank for removing a
President and Chief Executive Officer, and (v) failure by
Executive to perform or meet objective and reasonable standards
or disloyal, dishonest or illegal conduct of Executive. If, in
good faith and on reasonable evidence, Bank's Board of Directors
shall determine that Executive has been unable properly to
perform her duties and responsibilities hereunder as a result of
physical or mental disability, whether total or partial, for a
continuous period of Four (4) months or shorter periods
aggregating six (6) months in any twelve (12)
<PAGE> 208
month period, disability of Executive shall be deemed to exist.
Upon termination for cause or disability, Executive shall be entitled
to receive only her salary to a date thirty (30) days after such
termination; provided, however, that any other payment to which
Executive might otherwise be entitled under any policy of
insurance or separate benefit plan shall not be affected by the
provisions of this paragraph.
7. Executive, by written notice to Bank, may terminate her
obligations hereunder in the event of a material breach by Bank
in performing any of its obligations under this Agreement or in
carrying out fully any provision of this Agreement, including any
plans or benefits applicable to Executive referred to herein.
Such material breach by Bank shall be deemed to be of the same
effect as if there had been a "change in control" (as hereinafter
defined), and in the event of a termination of this Agreement by
Executive as a result thereof, Executive shall be entitled only
to such payments as are provided in Paragraph 9 hereof.
8. During the term hereof, Executive shall not serve as,
or become an owner, director, employee, or agent of, or
consultant or advisor to, any business anywhere in the world
which is competitive with any business conducted by Bank or any
division or subsidiary thereof or by Bank's holding company, if
any, and shall not, directly or indirectly, own or hold any
securities in any entity competing with Bank or any division or
subsidiary thereof, or with Bank's holding company, in an amount
which, in the judgment of Bank's board of directors, would result
in a material conflict of interest. Ownership of less than five
percent (5%) of the issued and outstanding equity securities of
an entity, any of the securities of which are listed on a
national securities exchange or regularly included in a national
list of over-the-counter securities as
<PAGE> 209
may from time to time be regularly published in a newspaper of general
circulation in New York, New York, shall not be deemed to create a material
conflict of interest as contemplated hereunder.
9. If, at any time prior to December 31, 1998, there shall
be a "change of control" in Bank by reason of (i) any person or
group of persons acting in concert not now owning the same
becoming the beneficial owner, directly or indirectly, of fifty-
one percent (51%) or more of the voting stock of Bank, or (ii)
the completion of any contract, agreement, arrangement, or tender
offer, formal or informal, whereby the stock of Bank is exchanged
for shares of another entity, regardless of the identity and
percentage ownership of the resulting shareholders, then
Executive shall have the option, by written notice to Bank within
thirty (30) days after such change of control occurs, of either:
(a) Electing to continue in the employment of
Bank; or
(b) Resigning her position with Bank.
If Executive shall elect said option (b), then Bank shall
pay to Executive within ten (10) days thereafter an amount equal
to twice her annual salary in effect at the time of her making
such election. In lieu of such lump-sum payment, Executive may
elect to receive such payment in twenty-four (24) equal
consecutive calendar monthly installments beginning the first
calendar month thereafter. Should Executive so elect to receive
payments, then during such twenty-four (24) months Executive
shall be deemed still to be an employee of Bank for the purpose
of receiving, and Bank shall provide to her, all normal employee
health care and life insurance benefits offered by Bank, but
Executive shall have no obligation to be present physically at or
near Bank's facilities or to perform any duties at any place.
<PAGE> 210
If Executive shall elect option (a) and if any of the
following events occur without the Executive's consent:
(1) The Executive is assigned any duties or
responsibilities that are inconsistent with her position, duties,
responsibilities or status, or her reporting responsibilities or
titles in effect as such time are changed;
(2) The Executive's compensation is reduced or if
she has been paid a bonus and she experiences in any year a
reduction in the ratio of her bonus payment to her base compensation
in such year which is greater than the average reduction in the
ratio of bonus payments to base compensation in such year experienced by
all Bank salaried officers as a group; or
(3) The Executive is transferred to a location
which is outside of Kanawha County, West Virginia;
then Executive may disaffirm her election of option (a) and elect
option (b) prospectively within thirty (30) days following the
occurrence of (1), (2) or (3), above.
Anything in this Agreement to the contrary notwithstanding
if Executive resigns her position with Bank pursuant to the terms
of this Paragraph 9, then the term hereof is terminated and the
provisions of Paragraph 8 are terminated. If Executive resigns
her position with Bank for any reason other than pursuant to the
terms of this Paragraph 9, then the terms of this Paragraph 9 do
not apply and this Agreement shall be terminated.
<PAGE> 211
10. No right, benefit or interest hereunder shall be
subject to assignment, anticipation, alienation, sale,
encumbrance, charge, pledge, hypothecation or set-off in respect
of any claim, debt or obligation, or to execution, attachment,
levy or similar process.
11. This Agreement shall be governed, construed and
enforced in accordance with the laws of the State of West
Virginia.
12. This Agreement shall be binding upon and inure to the
benefit of Executive, her estate fiduciary, her heirs, legatees,
successors and assigns and Bank and any successor organization or
organizations which shall succeed to substantially all of the
business and property of Bank, whether by means of merger,
consolidation, acquisition of substantially all of the assets of
Bank, or otherwise, including by operation of law.
IN WITNESS WHEREOF, Executive has signed and sealed this
Agreement and Bank has caused it to be signed on its behalf and
its seal to be affixed by its Chief Executive Officer, thereunto
duly authorized.
/s/ Brenda H. Robertson (SEAL)
-------------------------------
BRENDA H. ROBERTSON
SHAWNEE BANK, INC.
By /s/ R. Brawley Tracy
------------------------------------------
Its Chairman of the Board of Directors
(SEAL)
<PAGE> 212
THIS FIRST AMENDMENT, made and entered into this 19th day of
November, 1996, by and between SHAWNEE BANK, INC., a West
Virginia banking corporation of Dunbar, West Virginia,
hereinafter sometimes referred to as "Bank", and BRENDA H.
ROBERTSON, now residing in Charleston, West Virginia, hereinafter
sometimes referred to as "Executive".
WHEREAS, the parties hereto entered into an agreement dated
December 14, 1993, whereby Bank employed Executive and Executive
accepted employment from Bank, on certain terms, covenants, and
conditions, all as set forth therein; and
WHEREAS, in Paragraph 1 was provided inter alia "The term of
this agreement shall begin on December 16, 1993, and shall
terminate on December 31, 1998"; and
WHEREAS, there remains less than 26 months on the term of
said agreement; and
WHEREAS, the parties hereto desire to amend said agreement
so that it would be extended or renewed automatically all as
hereinafter set forth.
NOW, THEREFORE, THIS AGREEMENT WITNESSETH: That for and in
consideration of the premises and the agreements and obligations
set forth in said agreement dated December 14, 1993, between the
parties hereto, Bank and Executive hereby agree and contract to
amend said agreement dated December 14, 1993, as hereinafter set
forth.
1. The second sentence in Paragraph 1 of said agreement
dated December 14, 1993, between Bank and Executive, is to be
deleted and substitute in its place and stead the following:
"The employment term provided for herein shall consist of a
revolving period of 3 years, with the initial term beginning on
the first day of December, 1996, and ending
<PAGE> 213
on the 30th day of November, 1999. The term of this agreement
shall automatically be extended on each anniversary of the beginning date
of the term hereof for an additional three year term, unless written notice
of termination hereof is given by either party at least ninety
(90) days prior to the anniversary date of the beginning date of
this agreement. Any such notice of nonrenewal shall not affect
the continuation of the term of this agreement existing at the
time of such nonrenewal.
2. In Paragraph 9 of said agreement dated December 14,
1993, in the first line delete "December 31, 1998", and
substitute in its place and stead the following: "The expiration
of the term hereof or earlier termination as elsewhere herein
provided."
3. This amendment becomes effective as of December 1, 1996.
4. Except as amended by THIS FIRST AMENDMENT, said
agreement dated December 14, 1993, between Bank and Executive,
remains in full force and effect, unchanged and unamended.
IN WITNESS WHEREOF, Executive has signed and sealed this
agreement and Bank has caused it to be signed on its behalf and
its seal to be affixed by its Chairman of the Board of Directors,
thereunto duly authorized
/s/ Brenda H. Robertson (SEAL)
------------------------
BRENDA H. ROBERTSON
SHAWNEE BANK, INC.
By /s/ R. Brawley Tracy
--------------------------------
Its Chairman of the Board of
Directors
<PAGE> 214
EXHIBIT 12.1
Computation of Ratio of Earnings to Fixed Charges
For the year ended December 31, 1996
(Dollar amounts in thousands)
(Unaudited)
WesBanco, Inc.
Shawnee Pro Forma
WesBanco, Inc. Bank, Inc. Combined
---------------------------------------------
Net Income $21,161 $553 $20,839
Provision for income taxes 8,344 257 8,555
-------- ------- ---------
Earnings before provision
for income taxes $29,505 $ 810 $29,394
======== ======= =========
Ratio of pretax income to
net income (x's) 1.39 1.46 1.41
======== ======= =========
<PAGE> 215
EXHIBIT 21
WESBANCO SUBSIDIARIES
---------------------
Wesbanco, Inc.
Wesbanco Properties, Inc. (non-bank)
Wesbanco Mortgage Company (non-bank)
Wesbanco Bank Wheeling
McLure Hotel, Inc. (non-bank)
Wesbanco Bank South Hills
FFB Corporation
Wesbanco Bank Fairmont, Inc.
Wesbanco Bank Barnesville
Wesbanco Bank Parkersburg
Vandalia National Corporation (Inactive)
Note: All subsidiaries are 100% owned by Registrant.
<PAGE> 216
EXHIBIT 23.1
Consent of Independent Accountants
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-4 of WesBanco,
Inc. of our report dated January 25, 1996, except as to Note 2, the pooling
of interest with Bank of Weirton, which is as of August 30, 1996, appearing
on page 23 of WesBanco, Inc.'s Annual Report on Form 10-K for the year ended
December 31, 1996. We also consent to the reference to us under the heading
"Experts" in such Prospectus.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Pittsburgh, Pennsylvania
March 27, 1997
<PAGE> 217
EXHIBIT 23.2
CONSENT OF PHILLIPS, GARDILL, KAISER & ALTMEYER
-----------------------------------------------
We hereby consent to the reference to our firm under the
caption "Legal Matters" in the Registration Statement on Form S-4
of Wesbanco, Inc.
PHILLIPS, GARDILL, KAISER & ALTMEYER
By /s/ James C. Gardill
March 28, 1997
<PAGE> 218
EXHIBIT 23.3
[Letterhead]
CONSENT OF KAY, CASTO, CHANEY, LOVE & WISE
We hereby consent to the references to our firm under the captions
"Legal Matters" and "Certain Federal Income Tax Consequences of the Merger"
in the Registration Statement on Form S-4 of Wesbanco, Inc.
KAY, CASTO, CHANEY, LOVE & WISE
By /s/ William W. Booker
---------------------------
William W. Booker, Partner
March 28, 1997
<PAGE> 219
EXHIBIT 23.4
[Letterhead]
CONSENT OF INDEPENDENT ACCOUNTANTS
We have issued our report dated October 17, 1996, accompanying the
financial statements of Bank of Weirton as of December 31, 1995 and for
each of the two years in the period then ended incorporated by reference
in Form S-4 for WesBanco, Inc., dated March 28, 1997. We consent to the
incorporation by reference of the aforementioned report in the
Prospectus/Proxy Statement, and to the use of our name as it appears
under the caption "Experts".
/s/ Grant Thornton LLP
Cincinnati, Ohio
March 27, 1997
<PAGE> 220
EXHIBIT 23.5
CONSENT
We hereby consent to the use in the Prospectus constituting
part of this Registration Statement on Form S-4 of our opinion
dated February 21, 1997, issued to the Board of Directors of
Shawnee Bank, Inc. concerning the fairness to the shareholders of
said bank of the financial terms of said bank's proposed
acquisition by WesBanco, Inc. We also consent to the reference
to our Firm and our opinion to Shawnee Bank under the heading
"Opinion of LSC Financial Services, Inc." in the aforesaid
Prospectus.
/s/ LSC FINANCIAL SERVICES, INC.
LSC FINANCIAL SERVICES, INC.
Valley Forge, Pennsylvania
March 28, 1997
<PAGE> 221
EXHIBIT 23.6
ROLLINS, CLEAVENGER AND ROLLINS
PUBLIC ACCOUNTANTS
950 Kanawha Boulevard, East [Letterhead]
Post Office Box 169
Charleston, West Virginia 25321
CONSENT OF INDEPENDENT ACCOUNTANTS
Securities and Exchange Commission
Washington, D.C.
We hereby consent to the inclusion in the Registration Statement of
WesBanco, Inc., on Form S-4, of our report dated January 8, 1997, relating
to the consolidated financial statements of Shawnee Bank, Inc. as of
December 31, 1996, and 1995, and for the three years ended December 31,
1996, and to the reference to our Firm under the caption "Experts" in the
prospectus.
/s/ Rollins, Cleavenger and Rollins
ROLLINS, CLEAVENGER AND ROLLINS
Charleston, West Virginia
March 28, 1997
<PAGE> 222
EXHIBIT 23.7
Consent of Independent Auditors
We consent to the reference to our firm under the caption "Experts" in the
Registration Statement on (Form S-4) and the related Proxy Statement/Prospectus
of WesBanco, Inc. for the registration of 323,506 shares of its common stock
and to the incorporation by reference therein of our report dated February 3,
1997, with respect to the consolidated financial statements of WesBanco, Inc.
included in its Annual Report (Form 10-K) for the year ended December 31, 1996,
filed with the Securities and Exchange Commission.
/s/ Ernst & Young, LLP
Pittsburgh, Pennsylvania
March 27, 1997
<PAGE> 223
EXHIBIT 99.1
Form of Proxy Card
SHAWNEE BANK, INC.
1011 MYERS AVENUE
DUNBAR, WEST VIRGINIA 25064
Proxy for Special Meeting of Shareholders on June ___, 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 ___, 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.
