<PAGE> 1
As filed with the Securities and Exchange Commission on February 5, 1998
Registration No. 333-
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
WESBANCO, INC.
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
WEST VIRGINIA 6711 55-0571723
(State or other jurisdiction of (Primary Standard Industrial (I.R.S. Employer Identification
incorporation or organization) Classification Code Number) No.)
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ONE BANK PLAZA
WHEELING, WEST VIRGINIA 26003
(304) 234-9000
(Address, including zip code, and telephone number, including area code, of
registrant's principal executive offices)
EDWARD M. GEORGE, PRESIDENT
WESBANCO, INC.
ONE BANK PLAZA
WHEELING, WEST VIRGINIA 26003
(304) 234-9000
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------
WITH COPIES TO:
James C. Gardill
Phillips, Gardill, Kaiser & Altmeyer
61 Fourteenth Street
Wheeling, West Virginia 26003
(304) 232-6810
J. Robert Van Kirk
Kirkpatrick & Lockhart LLP
1500 Oliver Building
Pittsburgh, Pennsylvania 15222-2312
(412) 355-6500
------------------------
Approximate date of commencement of the proposed sale of the securities to
the public: AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION
STATEMENT.
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
CALCULATION OF REGISTRATION FEE
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======================================================================================================
PROPOSED PROPOSED
MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED REGISTERED (1) PER UNIT OFFERING PRICE (2) FEE (3)
- ------------------------------------------------------------------------------------------------------
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Common Stock, $2.0833 par value... 4,938,690 shares -- $146,427,826 $43,197.00
======================================================================================================
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(1) Represents the maximum number of shares of Common Stock, par value $2.0833
per share ("WesBanco Common Stock") issuable to holders of Common Stock,
$5.00 per value per share, of Commercial Bancshares, Inc. ("Commercial
Common Stock") pursuant to the Agreement and Plan of Merger (the "Merger
Agreement") described herein.
(2) Estimated solely for the purpose of calculating the registration fee;
computed in accordance with Rule 457(f) based upon the average of the high
and low prices of $84.50 per share of Commercial Common Stock as reported by
the American Stock Exchange on February 2, 1998, and the ratio at which each
share of Commercial Common Stock will be converted into WesBanco Common
Stock (one share of Commercial Common Stock will be converted into 2.85
shares of WesBanco Common Stock).
(3) A fee of $28,766 was paid on December 23, 1997 in connection with the filing
of the preliminary proxy statement relating to the transactions contemplated
by the Merger Agreement. Pursuant to Rule 457(o), an additional fee of
$14,431 has been paid upon the filing of this Registration Statement.
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 THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
================================================================================
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WESBANCO, INC.
One Bank Plaza
Wheeling, West Virginia 26003
(304) 234-9000
February 13, 1998
Dear WesBanco Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders of
WesBanco, Inc. ("WesBanco") to be held on March 19, 1998, at WesBanco's
principal executive offices, One Bank Plaza, Wheeling, West Virginia 26003,
commencing at 11:00 a.m., local time.
At the Special Meeting, you will be asked to approve the issuance of shares
of WesBanco Common Stock in connection with an Agreement and Plan of Merger and
the transactions contemplated thereby providing for the business combination of
WesBanco and Commercial Bancshares, Incorporated ("Commercial"). Pursuant to the
Agreement and Plan of Merger, Commercial will merge into CBI Holding Company
("CBI"), a wholly-owned subsidiary of WesBanco, with CBI being the surviving
corporation, and each outstanding share of Commercial Common Stock will be
converted into the right to receive 2.85 shares of WesBanco Common Stock.
The Board of Directors of WesBanco has unanimously determined that the
transaction is in the best interests of WesBanco and its shareholders and
recommends that you vote FOR the proposal to approve the issuance of WesBanco
Common Stock in connection with the Agreement and Plan of Merger and the
transactions contemplated thereby. The accompanying Joint Proxy
Statement/Prospectus more fully describes the proposal to be considered at the
Special Meeting. You are urged to give it your careful attention.
APPROVAL OF THE PROPOSAL TO APPROVE THE ISSUANCE OF WESBANCO COMMON STOCK
IN CONNECTION WITH THE AGREEMENT AND PLAN OF MERGER BY WESBANCO SHAREHOLDERS
WILL REQUIRE THE AFFIRMATIVE VOTE OF THE HOLDERS OF AT LEAST A MAJORITY OF THE
SHARES OF WESBANCO COMMON STOCK CONSTITUTING A QUORUM AND VOTING THEREON. IT IS
VERY IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE SPECIAL MEETING WHETHER OR
NOT YOU ARE PERSONALLY ABLE TO ATTEND. IN ORDER TO INSURE THAT YOU WILL BE
REPRESENTED, WE ASK YOU TO COMPLETE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY.
A POSTAGE-PAID RETURN ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
Sincerely,
Edward M. George
President
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COMMERCIAL BANCSHARES, INCORPORATED
415 Market Street
Parkersburg, West Virginia 26101
(304)424-0300
February 13, 1998
Dear Commercial Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders of
Commercial Bancshares Incorporated ("Commercial") to be held on March 19, 1998,
at Commercial's principal executive offices, 415 Market Street, Parkersburg,
West Virginia 26101, commencing at 9:00 a.m., local time.
At the Special Meeting, you will be asked to approve and adopt an Agreement
and Plan of Merger and the transactions contemplated thereby providing for the
business combination of WesBanco, Inc. ("WesBanco") and Commercial. Pursuant to
the Agreement and Plan of Merger, Commercial will merge into CBI Holding Company
("CBI"), a wholly-owned subsidiary of WesBanco, with CBI being the surviving
corporation, and each outstanding share of Commercial Common Stock will be
converted into the right to receive 2.85 shares of WesBanco Common Stock.
The Board of Directors of Commercial has unanimously determined that the
transaction is in the best interests of Commercial and its shareholders and
recommends that you vote FOR the proposal to approve and adopt the Agreement and
Plan of Merger and the transactions contemplated thereby. Danielson Associates,
Inc. Commercial's financial advisor, has delivered its opinion, dated as of
September 12, 1997 and updated as of February 9, 1998, to the Board of Directors
to the effect that, based upon and subject to various considerations set forth
in such opinion, as of the date of such opinion that the Merger is fair, from a
financial point of view, to the holders of Commercial Common Stock. The
accompanying Joint Proxy Statement/ Prospectus more fully describes the proposal
to be considered at the Special Meeting. You are urged to give it your careful
attention.
APPROVAL OF THE PROPOSAL TO APPROVE AND ADOPT THE AGREEMENT AND PLAN OF
MERGER BY COMMERCIAL SHAREHOLDERS WILL REQUIRE THE AFFIRMATIVE VOTE OF THE
HOLDERS OF AT LEAST A MAJORITY OF THE OUTSTANDING SHARES OF COMMERCIAL COMMON
STOCK VOTING THEREON. IT IS VERY IMPORTANT THAT YOUR SHARES BE REPRESENTED AT
THE SPECIAL MEETING WHETHER OR NOT YOU ARE PERSONALLY ABLE TO ATTEND. IN ORDER
TO INSURE THAT YOU WILL BE REPRESENTED, WE ASK YOU TO COMPLETE AND RETURN THE
ENCLOSED PROXY CARD PROMPTLY. A POSTAGE-PAID RETURN ENVELOPE IS ENCLOSED FOR
YOUR CONVENIENCE.
You should not send in certificates representing shares of Commercial
Common Stock at this time. Following consummation of the transaction,
information will be sent to you regarding the procedure for surrendering your
stock certificates and receiving certificates for the shares of WesBanco Common
Stock to be issued in exchange for your Commercial shares.
Sincerely,
William E. Mildren, Jr.
Chairman of the Board and President
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WESBANCO, INC.
ONE BANK PLAZA
WHEELING, WEST VIRGINIA 26003
------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 19, 1998
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders ("Special
Meeting") of WesBanco, Inc., a West Virginia corporation ("WesBanco"), will be
held on March 19, 1998, at the principal executive offices of WesBanco, One Bank
Plaza, Wheeling, West Virginia, commencing at 11:00 a.m., local time, to
consider and vote upon the following matters described in the accompanying Joint
Proxy Statement/ Prospectus:
1. Approval of the issuance of up to 4,938,690 shares of common stock,
par value $2.0833 per share ("WesBanco Common Stock"), of WesBanco, Inc., a
West Virginia corporation ("WesBanco"), in connection with the Agreement
and Plan of Merger, dated as of September 30, 1997 (the "Merger
Agreement"), among WesBanco, CBI Holding Company ("CBI"), a West Virginia
corporation and wholly-owned subsidiary of WesBanco, and Commercial
Bancshares, Incorporated, a West Virginia corporation ("Commercial"),
providing for, among other things, the merger of Commercial with and into
CBI, and pursuant to which, among other things, each issued and outstanding
share of common stock, par value $5.00 per share, of Commercial
("Commercial Common Stock"), immediately prior to the effective time of the
Merger as defined in the Merger Agreement (except for shares of Commercial
Common Stock issued and held in treasury of Commercial, or beneficially
owned by CBI or WesBanco, other than in a fiduciary capacity by WesBanco
for others, all of which will be canceled) will be converted into the right
to receive 2.85 shares of WesBanco Common Stock. A copy of the Merger
Agreement is attached as Appendix I to the accompanying Joint Proxy
Statement/Prospectus.
2. The transaction of such other business as may properly come before
the Special Meeting or any adjournment or postponement thereof.
Only holders of record of WesBanco Common Stock at the close of business on
February 6, 1998 will be entitled to notice of, and to vote at, the Special
Meeting and any adjournment or postponement thereof.
Whether or not you plan to attend the Special Meeting, please complete,
date, sign and return the enclosed proxy card promptly. A return envelope is
enclosed for your convenience and requires no postage for mailing in the United
States.
By Order of the Board of Directors,
Shirley A. Bucan
Secretary
Wheeling, West Virginia
February 13, 1998
YOUR VOTE IS VERY IMPORTANT
TO VOTE YOUR SHARES, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY
CARD AND MAIL IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE.
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COMMERCIAL BANCSHARES, INCORPORATED
415 MARKET STREET
PARKERSBURG, WEST VIRGINIA 26101
------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON MARCH 19, 1998
NOTICE IS HEREBY GIVEN that a Special Meeting of Shareholders ("Special
Meeting") of Commercial Bancshares, Incorporated, a West Virginia corporation
("Commercial"), will be held on March 19, 1998, at the principal executive
offices of Commercial, 415 Market Street, Parkersburg, West Virginia, commencing
at 9:00 a.m., local time, to consider and vote upon the following matters
described in the accompanying Joint Proxy Statement/Prospectus:
1. Approval and adoption of the Agreement and Plan of Merger, dated as
of September 30, 1997 (the "Merger Agreement"), among WesBanco, Inc., a
West Virginia corporation ("WesBanco"), CBI Holding Company ("CBI"), a West
Virginia corporation and wholly-owned subsidiary of WesBanco, and
Commercial Bancshares, Incorporated, a West Virginia corporation
("Commercial"), and the transactions contemplated thereby, including the
merger of Commercial with and into CBI, pursuant to which, among other
things, each issued and outstanding share of common stock, par value $5.00
per share, of Commercial ("Commercial Common Stock"), immediately prior to
the effective time of the Merger as defined in the Merger Agreement (except
for shares of Commercial Common Stock issued and held in treasury of
Commercial, or beneficially owned by CBI or WesBanco, other than in a
fiduciary capacity by WesBanco for others, all of which will be canceled)
will be converted into the right to receive 2.85 shares of common stock,
par value $2.0833 per share, of WesBanco. A copy of the Merger Agreement is
attached as Appendix I to the accompanying Joint Proxy
Statement/Prospectus.
2. The transaction of such other business as may properly come before
the Special Meeting or any adjournment or postponement thereof.
Only holders of record of Commercial Common Stock at the close of business
on February 6, 1998, and additional holders of record of Commercial Common Stock
at the close of business on March 9, 1998, will be entitled to notice of, and to
vote at, the Special Meeting and any adjournment or postponement thereof.
Whether or not you plan to attend the Special Meeting, please complete,
date, sign and return the enclosed proxy card promptly. A return envelope is
enclosed for your convenience and requires no postage for mailing in the United
States.
By Order of the Board of Directors,
Larry G. Johnson
Secretary
Parkersburg, West Virginia
February 13, 1998
YOUR VOTE IS VERY IMPORTANT
TO VOTE YOUR SHARES, PLEASE COMPLETE, DATE AND SIGN THE ENCLOSED PROXY CARD AND
MAIL IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE.
<PAGE> 6
JOINT PROXY STATEMENT
OF
WESBANCO, INC.
AND
COMMERCIAL BANCSHARES, INCORPORATED
PROSPECTUS
OF
WESBANCO, INC.
This Joint Proxy Statement/Prospectus is being furnished to (i) holders of
common stock, par value $2.0833 per share ("WesBanco Common Stock") of WesBanco,
Inc., a West Virginia corporation ("WesBanco"), and (ii) holders of common
stock, par value $5.00 per share ("Commercial Common Stock") of Commercial
Bancshares, Incorporated, a West Virginia corporation ("Commercial"), in
connection with the solicitation of proxies by the Boards of Directors of
WesBanco and Commercial for use at the Special Meetings of WesBanco shareholders
and Commercial shareholders, respectively, (each, the "WesBanco Special Meeting"
and the "Commercial Special Meeting"), and at any adjournment or postponement
thereof. The WesBanco Special Meeting will be held on March 19, 1998, at
WesBanco's principal executive offices, One Bank Plaza, Wheeling, West Virginia,
commencing at 11:00 a.m., local time. The Commercial Special Meeting will be
held on March 19, 1998 at Commercial's principal executive offices, 415 Market
Street, Parkersburg, West Virginia, commencing at 9:00 a.m., local time.
The purpose of the Commercial Special Meeting is the approval and adoption
by the shareholders of Commercial of the Agreement and Plan of Merger dated as
of September 30, 1997 (the "Merger Agreement"), among WesBanco, CBI Holding
Company ("CBI"), a West Virginia corporation and wholly-owned subsidiary of
WesBanco, and Commercial, and the transactions contemplated thereby, including
the merger of Commercial with and into CBI, pursuant to which, among other
things, each issued and outstanding share of Commercial Common Stock immediately
prior to the effective time of the Merger as defined in the Merger Agreement
(except for shares of Commercial Common Stock issued and held in treasury of
Commercial, or beneficially owned by CBI or WesBanco, other than in a fiduciary
capacity by WesBanco for others, all of which will be canceled) will be
converted into the right to receive 2.85 shares of WesBanco Common Stock. The
purpose of the WesBanco Special Meeting is the approval of the issuance of
shares of WesBanco Common Stock in connection with the Merger Agreement. A copy
of the Merger Agreement is attached as Appendix I to the accompanying Joint
Proxy Statement/Prospectus.
This Joint Proxy Statement/Prospectus also constitutes the prospectus of
WesBanco, Inc. for up to 4,938,690 shares of WesBanco Common Stock to be issued
in the Merger (as defined herein) in exchange for outstanding shares of
Commercial Common Stock.
THE SECURITIES TO BE ISSUED PURSUANT TO THIS JOINT PROXY STATEMENT/ PROSPECTUS
HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION
OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES AND EXCHANGE
COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS JOINT PROXY STATEMENT/ PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
------------------------
This Joint Proxy Statement/Prospectus and accompanying proxy cards are
first being mailed to shareholders of WesBanco and Commercial on or about
February 13, 1998.
THE DATE OF THIS JOINT PROXY STATEMENT/PROSPECTUS IS FEBRUARY 9, 1998.
<PAGE> 7
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS JOINT PROXY
STATEMENT/PROSPECTUS IN CONNECTION WITH THE SOLICITATION OF PROXIES OR THE
OFFERING OF SECURITIES MADE HEREBY AND, IF GIVEN OR MADE, ANY SUCH INFORMATION
OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY WESBANCO,
COMMERCIAL OR ANY OTHER PERSON. THIS JOINT PROXY STATEMENT/PROSPECTUS DOES NOT
CONSTITUTE AN OFFER TO SELL, OR A SOLICITATION OF AN OFFER TO BUY, ANY
SECURITIES, OR THE SOLICITATION OF A PROXY, IN ANY JURISDICTION TO OR FROM ANY
PERSON TO WHOM IT IS NOT LAWFUL TO MAKE ANY SUCH OFFER OR SOLICITATION IN SUCH
JURISDICTION. NEITHER THE DELIVERY OF THIS JOINT PROXY STATEMENT/PROSPECTUS NOR
ANY DISTRIBUTION OF SECURITIES HEREUNDER SHALL UNDER ANY CIRCUMSTANCES CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF WESBANCO OR
COMMERCIAL SINCE THE DATE HEREOF OR THAT THE INFORMATION HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO ITS DATE.
ALL INFORMATION CONCERNING COMMERCIAL CONTAINED IN THIS JOINT PROXY
STATEMENT/PROSPECTUS HAS BEEN SUPPLIED BY COMMERCIAL AND ALL INFORMATION
CONCERNING WESBANCO CONTAINED IN THIS JOINT PROXY STATEMENT/PROSPECTUS HAS BEEN
SUPPLIED BY WESBANCO.
INFORMATION INCLUDED OR INCORPORATED BY REFERENCE IN THIS JOINT PROXY
STATEMENTS/PROSPECTUS CONTAINS "FORWARD-LOOKING STATEMENTS" WHICH CAN BE
IDENTIFIED BY THE USE OF FORWARD-LOOKING TERMINOLOGY SUCH AS "BELIEVES,"
"CONTEMPLATES," "EXPECTS," "MAY," "WILL," "SHOULD," "WOULD" OR "ANTICIPATES" OR
THE NEGATIVE THEREOF OR OTHER VARIATIONS THEREON OR COMPARABLE TERMINOLOGY, OR
BY DISCUSSIONS OF STRATEGY. NO ASSURANCE CAN BE GIVEN THAT THE FUTURE RESULTS
ENCOMPASSED WITHIN THE FORWARD-LOOKING STATEMENTS WILL BE ACHIEVED. IMPORTANT
FACTORS WITH RESPECT TO SUCH FORWARD-LOOKING STATEMENTS, INCLUDING CERTAIN RISKS
AND UNCERTAINTIES, THAT COULD CAUSE ACTUAL RESULTS TO VARY MATERIALLY FROM THE
FUTURE RESULTS ENCOMPASSED WITHIN SUCH FORWARD-LOOKING STATEMENTS ARE DISCUSSED
HEREIN AND IN OTHER INFORMATION INCLUDED OR INCORPORATED BY REFERENCE HEREIN.
OTHER FACTORS COULD ALSO CAUSE ACTUAL RESULTS TO VARY MATERIALLY FROM THE FUTURE
RESULTS COVERED IN SUCH FORWARD-LOOKING STATEMENTS.
AVAILABLE INFORMATION
WesBanco and Commercial each are subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith each files reports, proxy statements and other information
with the Securities and Exchange Commission (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 the Commission's regional offices at 7 World
Trade Center, New York, New York, 10048, and Northeastern Atrium Center, 500
West Madison Street, Suite 1400, Chicago, Illinois, 60661. Copies of such
material can also be obtained from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C., 20549 at prescribed
rates. The Commission maintains a Web site that contains reports, proxy and
information statements and other information regarding registrants that file
electronically with the Commission. Such reports, proxy and information
statements and other information may be found on the Commission's Web site
address, http://www.sec.gov.
WesBanco 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.
Commercial Common Stock is listed on the American Stock Exchange (the
"AMEX") and accordingly periodic reports, proxy and information statements
concerning Commercial may be inspected at the offices of AMEX, 86 Trinity Place,
New York, New York 10006-1881.
This Joint Proxy Statement/Prospectus is part of a Registration Statement
on Form S-4 (together with all amendments and exhibits thereto, the
"Registration Statement") that has been filed by WesBanco under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to the securities
to be issued pursuant to the Merger Agreement. As permitted by the rules and
regulations of the Commission, this Joint Proxy Statement/Prospectus does not
contain all of the information set forth in the Registration Statement. Such
additional information may be obtained from the Commission's principal office in
Washington, D.C. Statements contained in this Joint Proxy Statement/Prospectus
or in any document incorporated by reference in this Joint Proxy
Statement/Prospectus as to the contents of any contract or other document
referred to
2
<PAGE> 8
herein or therein are, where the context indicates, intended to include
descriptions of the material terms thereof, but are not necessarily complete. In
each instance, reference is hereby made to the copy of such contract or other
document filed as an exhibit to the Registration Statement or such other
document and each such statement is qualified in all respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Annual Report on Form 10-K of WesBanco for the fiscal year ended
December 31, 1996 (as amended by Form 10-K/A dated May 8, 1997), the Quarterly
Reports on Form 10-Q of WesBanco for the fiscal quarters ended March 31, 1997,
June 30, 1997 and September 30, 1997, the Current Reports on Form 8-K of
WesBanco dated September 30, 1997, August 1, 1997 and June 30, 1997, and
WesBanco's 1997 Annual Proxy Statement, filed with the Commission pursuant to
the Exchange Act (File No. 000-08467) are incorporated by reference in this
Joint Proxy Statement/Prospectus.
The Annual Report on Form 10-K of Commercial for the fiscal year ended
December 31, 1996, the Quarterly Reports on Form 10-Q of Commercial for the
fiscal quarters ended March 31, 1997, June 30, 1997 and September 30, 1997, the
Current Reports on Form 8-K of Commercial dated September 30, 1997, September
12, 1997 and August 15, 1997, and Commercial's 1997 Annual Proxy Statement,
filed with the Commission pursuant to the Exchange Act (File No. 001-11791) are
incorporated by reference in this Joint Proxy Statement/Prospectus.
All documents and reports subsequently filed by WesBanco and Commercial
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date
of this Joint Proxy Statement/Prospectus and prior to the date of the WesBanco
Special Meeting and the Commercial Special Meeting shall be deemed to be
incorporated by reference in this Joint Proxy Statement/Prospectus and to be
part hereof from the dates of filing of such documents and reports. Any
statement contained herein or in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Joint Proxy Statement/Prospectus to the extent that a
statement contained herein or in any subsequently filed document which is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Joint Proxy
Statement/Prospectus.
THIS JOINT PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE
FILED BY WESBANCO WITH THE COMMISSION WHICH ARE NOT PRESENTED HEREIN OR
DELIVERED HEREWITH. SUCH DOCUMENTS (OTHER THAN EXHIBITS TO SUCH DOCUMENTS UNLESS
SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE) ARE AVAILABLE TO ANY
PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS JOINT PROXY
STATEMENT/PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST, WITHOUT CHARGE,
DIRECTED TO SHIRLEY A. BUCAN, SECRETARY, WESBANCO, INC., ONE BANK PLAZA,
WHEELING, WEST VIRGINIA 26003 (TELEPHONE (304) 234-9000). IN ORDER TO ENSURE
TIMELY DELIVERY OF ANY DOCUMENTS, ANY REQUEST SHOULD BE MADE NO LATER THAN MARCH
9, 1998.
THIS JOINT PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE
FILED BY COMMERCIAL WITH THE COMMISSION WHICH ARE NOT PRESENTED HEREIN OR
DELIVERED HEREWITH. SUCH DOCUMENTS (OTHER THAN EXHIBITS TO SUCH DOCUMENTS UNLESS
SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE) ARE AVAILABLE TO ANY
PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS JOINT PROXY
STATEMENT/PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST, WITHOUT CHARGE,
DIRECTED TO LARRY G. JOHNSON, SECRETARY, COMMERCIAL BANCSHARES, INC., 415 MARKET
STREET, PARKERSBURG, WEST VIRGINIA 26101 (TELEPHONE (304) 424-0300). IN ORDER TO
ENSURE TIMELY DELIVERY OF ANY DOCUMENTS, ANY REQUEST SHOULD BE MADE NO LATER
THAN MARCH 9, 1998.
3
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TABLE OF CONTENTS
<TABLE>
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Available Information................................................................ 2
Incorporation of Certain Documents by Reference...................................... 3
Summary.............................................................................. 6
Comparative Per Share Data........................................................... 18
Market Prices and Dividend Data...................................................... 19
WesBanco Common Stock Dividend Policy.............................................. 19
Commercial Common Stock Dividend Policy............................................ 20
The WesBanco Special Meeting......................................................... 21
General............................................................................ 21
Date, Time and Place of the WesBanco Special Meeting............................... 21
Voting and Revocation of Proxies................................................... 21
Proxies............................................................................ 21
Solicitation of Proxies............................................................ 22
Independent Auditors............................................................... 22
The Commercial Special Meeting....................................................... 23
General............................................................................ 23
Date, Time and Place of the Commercial Special Meeting............................. 23
Voting and Revocation of Proxies................................................... 23
Proxies............................................................................ 24
Solicitation of Proxies............................................................ 24
Accountants........................................................................ 24
The Merger........................................................................... 25
General............................................................................ 25
Background of the Merger........................................................... 25
Recommendation of the Boards of Directors.......................................... 26
Commercial Reasons for the Merger.................................................. 26
WesBanco Reasons for the Merger.................................................... 27
Interest of Certain Persons in the Merger.......................................... 28
Opinion of Danielson Associates, Inc............................................... 29
Effects of the Merger: The Surviving Corporation................................... 31
Government Approvals............................................................... 32
Rights of Dissenting Shareholders.................................................. 32
Resale Restrictions................................................................ 33
Accounting Treatment............................................................... 34
Certain Federal Income Tax Consequences of the Merger.............................. 34
The Merger Agreement................................................................. 36
The Merger......................................................................... 36
Conversion of Securities........................................................... 36
Representations and Warranties..................................................... 37
Certain Covenants.................................................................. 37
Conditions......................................................................... 38
Termination; Expenses.............................................................. 39
Amendment or Waiver................................................................ 40
The Option Agreement................................................................. 40
Comparative Rights of Shareholders................................................... 41
Description of WesBanco Capital Stock.............................................. 41
Description of Commercial Capital Stock............................................ 42
Comparison of Rights of WesBanco and Commercial Shareholders....................... 43
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<S> <C>
Pro Forma Financial Data............................................................. 45
Information with Respect to WesBanco................................................. 52
History............................................................................ 52
Recent Acquisitions................................................................ 52
Future Acquisitions................................................................ 52
Operations......................................................................... 52
Competition........................................................................ 53
Principal Shareholders............................................................. 54
WesBanco KSOP...................................................................... 55
Directors and Executive Officers................................................... 55
Executive Compensation............................................................. 55
Certain Relationships and Related Transactions..................................... 55
Government Regulation.............................................................. 55
Information with Respect to Commercial............................................... 56
History............................................................................ 56
Pending Acquisition................................................................ 56
Operations......................................................................... 56
Competition........................................................................ 58
Principal Shareholders............................................................. 58
Commercial KSOP.................................................................... 59
Directors and Executive Officers................................................... 59
Executive Compensation............................................................. 59
Certain Relationships and Related Transactions..................................... 59
Legal Matters........................................................................ 59
Experts.............................................................................. 60
Legal Proceedings.................................................................... 60
Appendix I--Agreement and Plan of Merger dated as of September 30, 1997, by and
between WesBanco, Inc., Commercial Bancshares, Inc. and CBI Holding Company
Appendix II--Stock Option Agreement dated as of September 12, 1997 by and between
WesBanco, Inc. and Commercial Bancshares, Inc.
Appendix III--Opinion of Danielson Associates, Inc.
Appendix IV--West Virginia Dissenters' Rights Statute--West Virginia Code Annotated
sec. 31-1-123
</TABLE>
5
<PAGE> 11
SUMMARY
The following is a brief summary of certain information contained elsewhere
in this Joint Proxy Statement/Prospectus. This summary is necessarily incomplete
and is qualified in its entirety by the more detailed information and financial
statements contained in this Joint Proxy Statement/Prospectus and in the
Appendices hereto. Shareholders of WesBanco and Commercial are urged to read the
entire Joint Proxy Statement/Prospectus before deciding how to vote their
shares.
THE COMPANIES
WesBanco........................ WesBanco is a multi-bank holding company
chartered under the laws of the State of
West Virginia. WesBanco has banking
subsidiaries located in West Virginia and
Ohio. WesBanco, through its subsidiaries,
conducts a general banking, commercial and
trust business. The principal executive
offices of WesBanco are located at One Bank
Plaza, Wheeling, West Virginia 26003 and its
telephone number is (304) 234-9000.
Commercial...................... Commercial is a multi-bank holding company
chartered under the laws of the State of
West Virginia. Commercial has banking
subsidiaries located in West Virginia and
Ohio. Commercial, through its subsidiaries
conducts a general banking, commercial and
trust business. The principal executive
offices of Commercial are located at 415
Market Street, Parkersburg, West Virginia
26101 and its telephone number is (304)
424-0300.
CBI............................. CBI is a West Virginia banking corporation
and is a wholly-owned subsidiary of
WesBanco. CBI has been formed by WesBanco to
operate the banking facilities of Commercial
following the consummation of the Merger.
The principal executive offices of CBI will
be located at One Bank Plaza, Wheeling, West
Virginia 26003 and its telephone number is
(304) 234-9000.
THE WESBANCO SPECIAL MEETING
Date, Time and Place............ The WesBanco Special Meeting will be held on
March 19, 1998 at 11:00 a.m., local time at
the principal executive offices of WesBanco
at One Bank Plaza, Wheeling, West Virginia
26003. See "The WesBanco Special Meeting."
Record Date; Shares Entitled to
Vote............................ Only holders of record of shares of WesBanco
Common Stock at the close of business on
February 6, 1998 are entitled to notice of
and to vote at the WesBanco Special Meeting.
As of February 2, 1998, there were
15,982,960 shares of WesBanco Common Stock
outstanding, held by approximately 4,397
holders of record. Each holder of record of
shares of WesBanco Common Stock on the
record date is entitled to cast one vote per
share on each matter to be acted upon or
which may properly come before the WesBanco
Special Meeting. "The WesBanco Special
Meeting."
Purpose of the WesBanco Special
Meeting....................... The purpose of the WesBanco Special Meeting
is to consider and vote upon the issuance of
shares of WesBanco Common Stock in
connection with the Merger Agreement
providing for (i) the merger (the "Merger")
of Commercial with and into
6
<PAGE> 12
CBI, a wholly owned subsidiary of WesBanco
and (ii) the exchange of each outstanding
share of Commercial Common Stock for 2.85
shares of WesBanco Common Stock. See "The
WesBanco Special Meeting" and "The Merger."
Vote Required................... The approval by WesBanco shareholders of the
issuance of shares of WesBanco Common Stock
in connection with the Merger Agreement and
the transactions contemplated thereby will
require the affirmative vote of the holders
of at least a majority of the shares of
WesBanco Common Stock constituting a quorum,
voting together as a single class. As of
February 2, 1998, the Trust Department of
WesBanco Bank Wheeling, One Bank Plaza,
Wheeling, West Virginia, 26003 was the
beneficial owner of 1,352,374 shares of
WesBanco Common Stock, representing in the
aggregate approximately 8.46% of the shares
outstanding. Of these shares, WesBanco Bank
Wheeling does not have voting control of
288,054 shares, representing 1.80% of the
outstanding WesBanco Common Stock, has
partial voting control of 36,280 shares,
representing 0.22% of the outstanding
WesBanco Common Stock and sole voting
control of 1,028,039 shares representing
6.43% of the voting power of outstanding
WesBanco Common Stock. As of February 2,
1998, the directors and executive officers
of WesBanco and their affiliates were the
beneficial owners of WesBanco Common Stock
representing 4.31% or more of the voting
power of outstanding WesBanco Common Stock.
See "The WesBanco Special Meeting" and "The
Merger."
THE COMMERCIAL SPECIAL MEETING
Date, Time and Place............ The Commercial Special Meeting will be held
on March 19, 1998 at 9:00 a.m., local time
at the principal executive offices of
Commercial at 415 Market Street,
Parkersburg, West Virginia 26101.
Record Date; Shares Entitled to
Vote............................ Only holders of record of shares of
Commercial Common Stock at the close of
business on February 6, 1998, and additional
holders of record of Commercial Common Stock
at the close of business on March 9, 1998
resulting from the acquisition by Commercial
of Gateway Bancshares, Inc. ("Gateway"), are
entitled to notice of and to vote at the
Commercial Special Meeting. As of February
5, 1998 there were 1,616,187 shares of
Commercial Common Stock outstanding, held by
approximately 1,115 holders of record. Each
holder of record of shares of Commercial
Common Stock on the record date is entitled
to cast one vote per share on each matter to
be acted upon or which may properly come
before the Commercial Special Meeting. See
"The Commercial Special Meeting."
Purpose of the Commercial
Special
Meeting....................... The purpose of the Commercial Special
Meeting is to consider and vote upon the
Merger Agreement, providing for (i) the
Merger and (ii) the exchange of each share
of Commercial Common Stock for 2.85 shares
of WesBanco Common Stock. See "The
Commercial Special Meeting" and "The
Merger."
7
<PAGE> 13
Vote Required................... Pursuant to the West Virginia Corporation
Act, the approval and adoption by Commercial
shareholders of the Merger Agreement and the
transactions contemplated thereby will
require the affirmative vote of holders of a
majority of the outstanding shares of
Commercial Common Stock. As of December 31,
1997, Commercial's Employee Stock Ownership
Trust was the beneficial owner of 170,461
shares of Commercial Common Stock
representing in the aggregate approximately
10.55% of the voting power of outstanding
Commercial Common Stock.
As of December 31, 1997, the directors and
executive officers of Commercial and their
affiliates were the beneficial owners of
Commercial stock representing approximately
16.03% of the voting power of outstanding
Commercial Common Stock. See "The Commercial
Special Meeting--Voting Information" and
"The Merger."
As of February 2, 1998, WesBanco held 4,210
shares of Commercial Common Stock.
Christopher V. Criss, a member of WesBanco's
Board of Directors is the President and
Chief Executive Officer, a Director and a
shareholder of Atlas Towing Co. ("Atlas").
Atlas is the holder of 39,023 shares of
Commercial Common Stock. Also, Mr. Criss's
brother, A. Vernon Criss, III, is a member
of Commercial's Board of Directors and a
shareholder of Atlas as well. Atlas has the
sole power to vote and the sole power to
dispose of the 39,023 shares of Commercial
Common Stock owned by it. No other
Directors, executive officers and affiliates
of WesBanco owned shares of Commercial
Common Stock as of such date. WesBanco
currently holds options to purchase up to
321,620 shares of Commercial Common Stock
pursuant to the Option Agreement, dated
September 12, 1997, between WesBanco and
Commercial.
THE MERGER
Terms of the Merger............. Upon the effective date of the Merger, each
outstanding share of Commercial Common Stock
will be converted into 2.85 shares of
WesBanco Common Stock. Cash will be paid in
lieu of issuing fractional shares of
WesBanco Common Stock, based on a whole
share value of $28.37 per share, or at the
election of each shareholder, such
shareholder may purchase the remaining
fraction of such share, at the aforesaid
value. For additional information concerning
the treatment of shares of Commercial Common
Stock in the Merger, and the effect of the
Merger upon Commercial shareholders, see
"The Merger" and "The Merger
Agreement--Conversion of Securities." It is
contemplated that Commercial will be merged
with and into CBI with CBI as the surviving
corporation. CBI will maintain its separate
identity and continue its operations as an
affiliate of WesBanco. The Merger will be
accounted for as a "pooling of interests" by
WesBanco. If the Merger had been concluded
on September 30, 1997, Commercial would have
constituted 20.9% of deposits, 19.4% of
assets, 15.0% of equity of WesBanco, and the
former shareholders of Commercial would hold
22.3% (assum-
8
<PAGE> 14
ing no Commercial shareholders exercise
dissenters' rights) of the total outstanding
shares of WesBanco on a consolidated pro
forma basis. In addition, Commercial would
have contributed 21.7% of net interest
income and 17.4% of net income of WesBanco
on a consolidated pro forma for the nine
months ending September 30, 1997. See "The
Merger--Effects of the Merger: The Surviving
Corporation" and "Pro Forma Financial Data."
Pursuant to the Merger Agreement, at the
effective date of the Merger the Board of
Directors of WesBanco will be comprised of
Messrs. James C. Gardill (Chairman), Frank
K. Abruzzino, James E. Altmeyer, Earl C.
Atkins, Charles J. Bradfield, Ray A. Byrd,
R. Peterson Chalfant, Christopher V. Criss,
Stephen F. Decker, James D. Entress, Ernest
S. Fragale, Roland L. Hobbs, John W. Kepner,
Frank K. Kerekes, George M. Molnar, Eric
Nelson, Melvin C. Snyder, Jr., Joan Stamp,
Carter W. Strauss, Reed J. Tanner, John A.
Welty and William E. Witschey, which are the
current members and will appoint, pursuant
to the Merger Agreement, Messrs. William E.
Mildren, Jr., Robert K. Tebay, James W.
Swearingen and Larry G. Johnson, current
members of Commercial's Board of Directors,
or its affiliate bank, Commercial Banking &
Trust Co.
It is expected that, as of the effective
date of the Merger, the following persons
will continue to be executive officers of
WesBanco: James C. Gardill, Chairman of the
Board; Robert H. Martin, Vice-Chairman;
Edward M. George, President and Chief
Executive Officer; Paul M. Limbert,
Executive Vice President--Credit
Administration and Chief Financial Officer;
Dennis P. Yaeger, Executive Vice President
and Chief Operating Officer; John W. Moore,
Jr., Senior Vice President--Human Resources;
Jerome B. Schmitt, Senior Vice President
Investments; Edward G. Sloane, Vice
President--Data Processing. Pursuant to the
Merger Agreement, William E. Mildren, Jr.
will be appointed Vice Chairman.
See "The Merger--Interests of Certain
Persons in the Merger."
Reasons for the Merger.......... For a discussion of the factors considered
by the Board of Directors of WesBanco in
reaching its decision with respect to the
Merger, the Merger Agreement and the
transactions contemplated thereby, see "The
Merger--WesBanco Reasons for the Merger."
For a discussion of the factors considered
by the Board of Directors of Commercial in
reaching its decision with respect to the
Merger, the Merger Agreement and the
transactions contemplated thereby. See "The
Merger--Commercial Reasons for the Merger"
and "The Merger--Recommendation of the Board
of Directors."
Recommendation of the Boards of
Directors..................... The Boards of Directors of WesBanco and
Commercial, by unanimous vote, each have
determined that the Merger is in the best
interests of WesBanco and Commercial and
their respective shareholders, have approved
the Merger Agreement. The Board of Directors
of WesBanco recommends a vote FOR
9
<PAGE> 15
approval of the issuance of shares of
WesBanco Common Stock in connection with the
Merger Agreement by the shareholders of
WesBanco. The Board of Directors of
Commercial recommends a vote FOR approval
and adoption of the Merger Agreement by the
shareholders of Commercial. See "The
Merger--Recommendation of the Board of
Directors. "
Opinion of Financial Advisor.... Danielson Associates, Inc. ("Danielson
Associates") has delivered its written
opinion, dated as of September 12, 1997 and
updated as of February 9, 1998, to the Board
of Directors of Commercial to the effect
that, based upon and subject to various
considerations set forth in such opinion, as
of the date of such opinion, the
consideration to be received by holders of
Commercial Common Stock in the Merger is
fair, from a financial point of view, to the
holders of Commercial Common Stock. The full
text of the opinion of Danielson Associates,
which sets forth assumptions made, general
procedures followed, matters considered and
limits of review undertaken, is attached to
this Joint Proxy Statement/Prospectus as
Appendix III and is incorporated herein by
reference. Shareholders of Commercial are
urged to read the opinion of Danielson
Associates carefully and in its entirety.
See "The Merger--Opinion of Danielson
Associates, Inc." and "Appendix III."
Certain Federal Income Tax
Consequences.................. It is intended that the Merger will
constitute a reorganization within the
meaning of Section 368(a)(1) of the Internal
Revenue Code of 1986 ("IRC"), and that
WesBanco, Commercial and CBI will each be a
"party to a reorganization" as defined in
IRC Section 368(b), and that no gain or loss
will be recognized by WesBanco, Commercial
or CBI as a result of the transactions
contemplated in the Agreement. Furthermore,
it is intended that no gain or loss will be
recognized by the shareholders of Commercial
as a result of their exchange of Commercial
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. Consummation
of the Merger is conditioned upon the
receipt of an opinion from Kirkpatrick &
Lockhart LLP. For a further discussion of
certain federal income tax consequences of
the Merger, see "The Merger--Certain Federal
Income Tax Consequences" and "The Merger
Agreement--Conditions."
Dissenters Rights............... Any holder of Commercial Common Stock who
files written objection to the proposed
Merger prior to or at the Commercial Special
Meeting, does not vote in favor of the
proposed Merger, makes written demand on
Commercial within ten days following the
Commercial 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 Commercial 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
10
<PAGE> 16
entitled to dissenters' rights in the
transaction. See "The Merger--Rights of
Dissenting Shareholders," and "Appendix IV."
It is a condition to the obligations of
WesBanco and Commercial to consummate the
Merger that the holders of not more than 10%
of Commercial Common Stock exercise their
dissenters' rights. See "The Merger
Agreement--Conditions."
Regulatory Approvals............ Notwithstanding approval by the shareholders
of WesBanco, Commercial and CBI, the
consummation of the Merger is subject to
certain conditions, including approval of
the Board of Governors of the Federal
Reserve System ("Federal Reserve System")
and the Banking Board of West Virginia.
Applications for approval with the
regulatory authorities were filed in January
1998. There can be no assurance that the
Federal Reserve System or the West Virginia
Board of Banking 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 Agreement-- Conditions and
Covenants;" "The Merger--Government
Approvals;" "The Merger
Agreement--Termination; Expenses."
Effective Date of Merger........ The Effective Date of the Merger is
anticipated to occur shortly after the
WesBanco Special Meeting and the Commercial
Special Meeting and when the Certificate of
Merger is filed with the West Virginia
Secretary of State, after receipt of all
approvals, and satisfaction of all
conditions in the Merger Agreement and in
such approvals. See "The Merger" and "The
Merger Agreement."
Exchange of Certificates........ As promptly as practicable after the
Effective Date. Instructions on how to
effect the exchange of certificates of
Commercial Common Stock for certificates of
WesBanco Common Stock will be sent to each
Commercial shareholder of record as of the
Effective Date. See "The Merger." Commercial
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."
Commercial Common Stock......... Holders of Commercial 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 Commercial
Common Stock or preferred stock. Holders of
Commercial Common Stock are entitled to
receive
11
<PAGE> 17
such dividends as may be declared by
Commercial's Board of Directors out of funds
legally available therefor. In the event of
the liquidation or winding up of the affairs
of Commercial, holders of Commercial 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,
approval by the above noted regulatory
authorities, the holders of Commercial
Common Stock and the holders of WesBanco
Common Stock. WesBanco has also reserved the
right to terminate the Merger if the holders
of more than 10% of Commercial Common Stock
exercise dissenters rights with respect to
their stock. WesBanco and Commercial have
also reserved the right to terminate the
Merger if the closing has not occurred by
March 31, 1998. Commercial has reserved the
right to terminate if the market value of
WesBanco Common Stock should fall below
$25.00 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 Agreement--Certain
Covenants;" "The Merger
Agreement--Conditions;" and "The Merger
Agreement--Termination; Expenses."
Pending Acquisition............. Commercial entered into a definitive
agreement dated August 15, 1997 to acquire
Gateway, a $30 million bank holding company.
It is anticipated that the acquisition of
Gateway by Commercial will be completed on
March 9, 1998, prior to consummation of the
Merger. See "Information with Respect to
Commercial--Pending Acquisition."
Interests of Certain Persons in
the Merger...................... The Agreement provides that William E.
Mildren, Jr., Robert K. Tebay, James W.
Swearingen and Larry G. Johnson, Commercial
directors, or directors of one of its
affiliate banks, will become directors of
WesBanco on the Effective Date. In addition,
it is a condition to consummation of the
Merger that William E. Mildren, Jr., W.
Bryan Pennybacker, James A. Meagle, Jr., C.
Randall Law and Thomas M. Lookbaugh enter
into Employment Agreements with WesBanco.
See "The Merger--Interest of Certain Persons
in the Merger."
WesBanco Anti-Takeover
Provisions...................... The Merger Agreement provides for the
exchange of each share of Commercial Common
Stock for 2.85 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
12
<PAGE> 18
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 of Rights of WesBanco and
Commercial 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
shareholder's meeting. These provisions also
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--Comparison of Rights of
WesBanco and Commercial Shareholders."
Financial Information........... For the twelve months ended December 31,
1996, WesBanco's net income was $21,161,000
or $1.39 per share. Total assets were
approximately $1.7 billion, total deposits
were approximately $1.3 billion and total
shareholders' equity was approximately $228
million. For the nine months ended September
30, 1997, WesBanco's net income was
$17,091,000 or $1.08 per share. Total assets
were approximately $1.76 billion, total
deposits were approximately $1.4 billion and
total shareholders' equity was approximately
$246.5 million. See the Annual Report on
Form 10-K of WesBanco for the fiscal year
ended December 31, 1996 (as amended by Form
10-K/A dated May 8, 1997) and the Quarterly
Report on Form 10-Q of WesBanco for the
fiscal quarter ended September 30, 1997.
For the twelve months ended December 31,
1996, Commercial's net income was $4,781,011
or $2.96 per share. Total assets were
approximately $413 million, total deposits
were approximately $360 million and total
stockholders' equity was approximately $41
million. For the nine months ended September
30, 1997, Commercial's net income was
approximately
13
<PAGE> 19
$3,609,000 or $2.23 per share. Total assets
were approximately $425 million, total
deposits were approximately $366 million and
total stockholders' equity was approximately
$43 million. See the Annual Report on Form
10-K of Commercial for the fiscal year ended
December 31, 1996 and the Quarterly Report
on Form 10-Q of Commercial for the fiscal
quarter ended September 30, 1997.
For the twelve months ended December 31,
1996, Commercial's net income was $4,781,011
or $2.96 per share. Total assets were
approximately $413 million, total deposits
were approximately $360 million and total
stockholders' equity was approximately $41
million. For the nine months ended September
30, 1997, Commmercial's net income was
approximately $3,609,000 or $2.23 per share.
Total assets were approximately $425
million, total deposits were approximately
$366 million and total stockholders' equity
was approximately $43 million. See the
Annual Report on Form 10-K of Commercial for
the fiscal year ended December 31, 1996 and
the Quarterly Report on Form 10-Q of
Commercial for the fiscal quarter ended
September 30, 1997.
Recent Developments............. For the year ended December 31, 1997,
WesBanco's net income was $22.3 million
compared to net income of $21.2 million for
the year ended December 31, 1996,
representing a 5% increase. Fourth quarter
net income in 1997 was $5.2 million compared
to $5.1 million for the same period in 1996.
Total assets of WesBanco at December 31,
1997 were $1.8 billion, total deposits were
$1.4 billion and total shareholders' equity
was $250 million compared to $1.7 billion,
$1.3 billion and $228 million, respectively,
for the year ended December 31, 1996,
representing increases of 6%, 8% and 10%,
respectively. Earnings per share for the
year ended December 31, 1997 were $1.40 per
share compared to $1.39 per share for the
year ended December 31, 1996.
14
<PAGE> 20
WESBANCO, INC.
FIVE YEAR SELECTED FINANCIAL SUMMARY
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30, FOR THE YEARS ENDED DECEMBER 31,
-------------------------- -----------------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
SUMMARY STATEMENT OF
INCOME:
Interest income...... $ 92,308 $ 83,644 $ 112,938 $ 108,082 $ 101,720 $ 105,268 $ 112,851
Interest expense..... 40,972 35,723 48,218 46,570 39,660 43,727 53,661
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net interest
income............. 51,336 47,921 64,720 61,512 62,060 61,541 59,190
Provision for loan
losses............. 2,864 2,848 4,336 2,788 6,073 3,247 3,297
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net interest income
after provision for
loan losses........ 48,472 45,073 60,384 58,724 55,987 58,294 55,893
Other income......... 10,411 8,701 12,273 11,366 11,028 10,367 10,272
Other expense........ 35,632 31,446 43,152 42,130 42,840 41,873 40,610
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income before income
taxes.............. 23,251 22,328 29,505 27,960 24,175 26,788 25,555
Income tax
provision.......... 6,160 6,255 8,344 7,656 6,283 7,070 7,044
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income before effect
of change in
accounting for post
retirement
benefits........... 17,091 16,073 21,161 20,304 17,892 19,718 18,511
Effect of change in
accounting for post
retirement
benefits........... -- -- -- -- -- -- (592)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income........... $ 17,091 $ 16,073 $ 21,161 $ 20,304 $ 17,892 $ 19,718 $ 17,919
=========== =========== =========== =========== =========== =========== ===========
Net income available
for Common
Shareholders....... $ 17,091 $ 16,073 $ 21,161 $ 20,140 $ 17,709 $ 19,534 $ 17,735
=========== =========== =========== =========== =========== =========== ===========
Primary earnings per
share*............. $ 1.08 $ 1.06 $ 1.39 $ 1.32 $ 1.15 $ 1.25 $ 1.14
Average shares
outstanding*....... 15,809,965 15,279,684 15,253,107 15,240,492 15,421,317 15,569,249 15,595,796
Dividends per common
share*............. $ 0.586 $ 0.533 $ 0.720 $ 0.640 $ 0.573 $ 0.527 $ 0.467
</TABLE>
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, AS OF DECEMBER 31,
-------------------------- -----------------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED BALANCE
SHEET DATA:
Assets............... $ 1,762,411 $ 1,600,769 $ 1,677,771 $ 1,549,019 $ 1,532,832 $ 1,534,131 $ 1,500,687
Securities........... 552,533 499,098 525,309 522,288 587,953 602,888 601,681
Net Loans............ 1,012,953 949,952 1,010,842 880,480 798,413 759,318 726,114
Deposits............. 1,392,066 1,271,512 1,342,820 1,254,844 1,254,586 1,265,677 1,245,978
Shareholders'
equity............. 246,578 214,426 227,532 206,996 192,305 191,801 180,641
Book value per common
share*............. 15.35 13.98 14.41 13.55 12.57 12.35 11.61
</TABLE>
- ---------
* Prior periods restated to reflect a 3 for 2 stock split effected in the form
of a 50% stock dividend, paid August 1, 1997.
15
<PAGE> 21
COMMERCIAL BANCSHARES, INCORPORATED.
FIVE YEAR SELECTED FINANCIAL SUMMARY
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30, FOR THE YEARS ENDED DECEMBER 31,
-------------------------- -----------------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
SUMMARY STATEMENT OF
INCOME:
Interest income...... $ 24,807 $ 23,368 $ 31,445 $ 30,425 $ 26,933 $ 25,559 $ 27,468
Interest expense..... 10,540 9,918 13,394 12,552 9,621 9,965 11,974
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net interest
income............. 14,267 13,450 18,051 17,873 17,312 15,594 15,494
Provision for loan
losses............. 372 358 459 418 417 247 983
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net interest income
after provision for
loan losses........ 13,895 13,092 17,592 17,455 16,895 15,347 14,511
Other income......... 2,225 2,513 3,384 3,019 2,015 2,355 1,995
Other expense........ 10,698 10,585 13,891 13,553 12,986 12,070 11,630
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income before income
taxes.............. 5,422 5,020 7,085 6,921 5,924 5,632 4,876
Income tax
provision.......... 1,813 1,676 2,304 2,176 1,526 1,916 1,636
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income........... $ 3,609 $ 3,344 $ 4,781 $ 4,745 $ 4,398 $ 3,716 $ 3,240
=========== =========== =========== =========== =========== =========== ===========
Net income available
for common
shareholders....... $ 3,609 $ 3,344 $ 4,781 $ 4,745 $ 4,194 $ 3,444 $ 2,967
=========== =========== =========== =========== =========== =========== ===========
Primary earnings per
share*............. $ 2.23 $ 2.07 $ 2.96 $ 2.95 $ 2.97 $ 2.50 $ 2.16
Average shares
outstanding*....... 1,616,187 1,616,187 1,616,187 1,608,847 1,410,417 1,374,974 1,374,748
Dividends per common
share*............. $ 0.88 $ 0.82 $ 1.09 $ 1.02 $ 0.94 $ 0.85 $ 0.75
</TABLE>
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, AS OF DECEMBER 31,
-------------------------- -----------------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED BALANCE
SHEET DATA:
Assets............... $ 425,164 $ 409,454 $ 412,979 $ 385,656 $ 372,223 $ 349,713 $ 337,005
Securities........... 72,842 78,756 75,021 87,424 84,090 92,564 72,248
Net Loans............ 302,918 287,175 293,941 260,470 252,972 219,483 220,055
Deposits............. 366,812 357,353 359,840 340,584 323,959 311,303 301,714
Shareholders'
equity............. 43,300 39,787 40,995 38,203 33,608 30,844 28,373
Book value per common
share*............. 26.79 24.62 25.36 23.65 21.25 20.45 18.66
</TABLE>
- ---------
* Prior periods restated to reflect a 10% stock dividend, paid March 14, 1997.
16
<PAGE> 22
WESBANCO, INC.
FIVE YEAR SELECTED PRO FORMA-COMBINED FINANCIAL SUMMARY*
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS
ENDED SEPTEMBER 30, FOR THE YEARS ENDED DECEMBER 31,
-------------------------- -----------------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
SUMMARY STATEMENT OF
INCOME:
Interest income...... $ 117,115 $ 107,012 $ 144,383 $ 138,507 $ 128,653 $ 130,827 $ 140,319
Interest expense..... 51,512 45,641 61,612 59,122 49,281 53,692 65,635
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net interest
income............. 65,603 61,371 82,771 79,385 79,372 77,135 74,684
Provision for loan
losses............. 3,236 3,206 4,795 3,206 6,490 3,494 4,280
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net interest income
after provision for
loan losses........ 62,367 58,165 77,976 76,179 72,882 73,641 70,404
Other income......... 12,636 11,214 15,657 14,385 13,043 12,722 12,267
Other expense........ 46,330 42,031 57,043 55,683 55,826 53,943 52,240
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income before income
taxes.............. 28,673 27,348 36,590 34,881 30,099 32,420 30,431
Income tax
provision.......... 7,973 7,931 10,648 9,832 7,809 8,986 8,680
----------- ----------- ----------- ----------- ----------- ----------- -----------
Income before effect
of change in
accounting for post
retirement
benefits........... 20,700 19,417 25,942 25,049 22,290 23,434 21,751
Effect of change in
accounting for post
retirement
benefits........... -- -- -- -- -- -- (592)
----------- ----------- ----------- ----------- ----------- ----------- -----------
Net income........... $ 20,700 $ 19,417 $ 25,942 $ 25,049 $ 22,290 $ 23,434 $ 21,159
=========== =========== =========== =========== =========== =========== ===========
Net income available
for common
shareholders....... $ 20,700 $ 19,417 $ 25,942 $ 24,885 $ 21,903 $ 22,977 $ 20,702
=========== =========== =========== =========== =========== =========== ===========
Primary earnings per
share*............. $ 1.01 $ 0.98 $ 1.31 $ 1.26 $ 1.13 $ 1.18 $ 1.06
Average shares
outstanding*....... 20,416,098 19,885,817 19,859,240 19,825,706 19,441,005 19,487,925 19,513,928
Dividends per common
share*............. $ 0.586 $ 0.533 $ 0.720 $ 0.640 $ 0.573 $ 0.527 $ 0.467
EQUIVALENT PER SHARE
DATA (COMMERCIAL):
Primary earnings per
share.............. $ 2.88 $ 2.79 $ 3.73 $ 3.59 $ 3.22 $ 3.36 $ 3.02
Dividends per common
share.............. 1.67 1.52 2.05 1.82 1.63 1.50 1.33
</TABLE>
<TABLE>
<CAPTION>
AS OF SEPTEMBER 30, AS OF DECEMBER 31,
-------------------------- -----------------------------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
----------- ----------- ----------- ----------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C> <C>
SELECTED BALANCE
SHEET DATA:
Assets............... $ 2,187,249 $ 2,010,223 $ 2,090,750 $ 1,934,675 $ 1,905,055 $ 1,883,844 $ 1,837,692
Securities........... 625,049 577,854 600,330 609,712 672,043 695,452 673,929
Net Loans............ 1,315,871 1,237,127 1,304,783 1,140,950 1,051,385 978,801 946,169
Deposits............. 1,758,878 1,628,865 1,702,660 1,595,428 1,578,545 1,576,980 1,547,692
Shareholders'
equity............. 289,612 254,213 268,527 245,199 225,913 222,645 209,014
Book value per common
share*............. 14.02 12.75 13.17 12.33 11.41 11.34 10.59
</TABLE>
- ---------
* Reflects pro forma combined WesBanco and Commercial Bancshares selected
financial information, using the pooling of interests method of accounting.
This information should be read in conjunction with the "Pro Forma Financial
Data" section of this document. Share and per share amounts have been adjusted
for the acquisition of all the outstanding common stock shares of Commercial.
17
<PAGE> 23
COMPARATIVE PER SHARE DATA
(UNAUDITED)
The following table sets forth for WesBanco and Commercial certain
historical and pro forma per share financial information for the nine month
periods ended September 30, 1997 and 1996, and for the years ended December 31,
1996, 1995 and 1994. The pro forma equivalent per share information is computed,
where applicable, using the WesBanco pro forma information and an exchange ratio
of 2.85 shares of WesBanco Common Stock for each share of Commercial Common
Stock. This information is not necessarily an indicator of future operations and
should be read in conjunction with the historical, supplemental and unaudited
pro forma financial statements which are furnished within this Joint Proxy
Statement/Prospectus or has been furnished separately.
<TABLE>
<CAPTION>
FOR THE NINE
MONTHS ENDED FOR THE YEARS ENDED DECEMBER
SEPTEMBER 30, 31,
----------------- ----------------------------
1997 1996 1996 1995 1994
------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C>
WESBANCO COMMON STOCK:
Primary earnings per share
Historical.................................. $ 1.08 $ 1.06 $ 1.39 $ 1.32 $ 1.15
Pro Forma................................... 1.01 0.98 1.31 1.26 1.13
Dividends per share
Historical.................................. 0.586 0.533 0.720 0.640 0.573
Book value per share
Historical.................................. 15.35 13.98 14.41 13.55 12.57
Pro Forma................................... 14.02 12.75 13.17 12.33 11.41
COMMERCIAL COMMON STOCK:
Primary earnings per share
Historical.................................. $ 2.23 $ 2.07 $ 2.96 $ 2.95 $ 2.97
Pro Forma equivalent........................ 2.88 2.79 3.73 3.59 3.22
Dividends per share
Historical.................................. 0.88 0.82 1.09 1.02 0.94
Pro Forma equivalent........................ 1.67 1.52 2.05 1.82 1.63
Book value per share
Historical.................................. 26.79 24.62 25.36 23.65 21.25
Pro Forma equivalent........................ 39.96 36.34 37.53 35.14 32.52
</TABLE>
18
<PAGE> 24
MARKET PRICES AND DIVIDEND DATA
WesBanco Common Stock is quoted on the Nasdaq Stock Market and traded under
the symbol "WSBC." Commercial Common Stock is listed on AMEX under the symbol
"CWV." The table sets forth below for the calendar quarters indicated, the range
of high and low sales prices of Commercial Common Stock as reported by AMEX and
WesBanco Common Stock as reported by the Nasdaq Stock Market, and the cash
dividends declared on Commercial Common Stock and WesBanco Common Stock. See
"Comparative Per Share Data."
<TABLE>
<CAPTION>
COMMERCIAL COMMON STOCK* WESBANCO COMMON STOCK**
------------------------------- -------------------------------
HIGH LOW DIVIDENDS HIGH LOW DIVIDENDS
------ ------ --------- ------ ------ ---------
<S> <C> <C> <C> <C> <C> <C>
1996
First Quarter.................... $31.82 $30.23 $ .2725 $19.17 $17.50 $.173
Second Quarter................... 34.09 31.14 .2725 18.17 17.17 .173
Third Quarter.................... 35.80 34.09 .2725 19.00 17.50 .186
Fourth Quarter................... 38.18 35.45 .2725 21.67 18.33 .186
1997
First Quarter.................... 39.375 37.78 .2800 22.17 21.17 .193
Second Quarter................... 42.250 39.375 .3000 27.17 21.33 .193
Third Quarter.................... 77.00 42.50 .3000 30.50 25.75 .200
Fourth Quarter................... 88.375 77.375 .3000 31.25 27.50 .200
1998
First Quarter (through February
2, 1998)...................... 87.375 79.625 -- 31.125 30.00 --
</TABLE>
- ---------
* Prior periods were restated to reflect a 10% stock dividend declared March
14, 1997.
** Prior periods were restated to reflect a 50% stock dividend declared June 19,
1997.
On September 29, 1997, the last full trading day prior to the public
announcement of the execution of the Merger Agreement, the closing price per
share of Commercial Common Stock as reported on AMEX was $77.50, and the closing
price per share of WesBanco Common Stock as reported on the Nasdaq Stock Market
was $29.75. On February 4, 1998, the most recent practicable date prior to the
printing of this Joint Proxy Statement/Prospectus, the closing price per share
of Commercial Common Stock as reported on the AMEX was $85.00. On February 4,
1998, the most recent practicable date prior to the printing of this Joint Proxy
Statement/Prospectus, the closing price per share of WesBanco Common Stock as
reported on the Nasdaq Stock Market was $30.375. Shareholders of Commercial are
urged to obtain current market quotations for Commercial Common Stock. Prices at
which WesBanco Common Stock may trade prior to the Merger may not be indicative
of prices at which WesBanco Common Stock may trade following the Merger.
It is anticipated that the annual rate of cash dividends to be declared on
shares of WesBanco Common Stock following the Merger will initially be $.80 per
share. There can be no assurance as to the length of time that the level of such
dividend, or any other future dividend that may be declared by the Board of
Directors of WesBanco, will be maintained. The declaration and payment by
WesBanco of dividends and the amount thereof will depend upon WesBanco's results
of operations, financial condition, cash requirements, future prospects,
limitations imposed by credit agreements or senior securities and other factors
deemed relevant by its Board of Directors.
WESBANCO COMMON STOCK DIVIDEND POLICY
It has been the policy of WesBanco to declare and pay cash dividends on
WesBanco Common Stock 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.
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
19
<PAGE> 25
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.
COMMERCIAL COMMON STOCK DIVIDEND POLICY
It has been the policy of Commercial to pay cash dividends on Commercial
Common Stock on a quarterly basis. However, prior to the Merger, the declaration
and payment of future dividends will depend upon the earnings of Commercial, its
financial condition, and other factors, including applicable governmental
regulations and policies. The principal source of Commercial's income is from
its banking operations.
Dividends may be paid on Commercial Common Stock at the discretion of
Commercial'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 Commercial 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 Commercial, its financial condition and other
relevant factors.
The Merger Agreement provides that Commercial may not pay or declare
dividends or other distributions on Commercial Common Stock other than cash
dividends which do not in the aggregate exceed the lesser of $1.20 per share or
50% of the after-tax income of Commercial for the tax year in which paid. See
"The Merger Agreement--Certain Covenants."
20
<PAGE> 26
THE WESBANCO SPECIAL MEETING
GENERAL
This Joint Proxy Statement/Prospectus and the accompanying proxy are being
furnished to the shareholders of WesBanco on or about February 13, 1998, in
connection with the solicitation of proxies by the Board of Directors of
WesBanco of the holders of WesBanco Common Stock to be voted at the WesBanco
Special Meeting called to consider and vote upon the issuance of up to 4,938,690
shares of WesBanco Common Stock in connection with the Merger Agreement
providing for (i) the Merger of Commercial with and into CBI, and (ii) the
exchange of each outstanding share of Commercial Common Stock for 2.85 shares of
WesBanco Common Stock. The Boards of Directors of Commercial and WesBanco
unanimously have approved the Merger Agreement and the issuance of shares of
WesBanco Common Stock in connection therewith, and the Board of Directors of
WesBanco unanimously recommends that its shareholders vote FOR approval of such
issuance. WesBanco is required to hold a special meeting of its shareholders to
consider and vote upon the issuance of shares of WesBanco Common Stock in
connection with the Merger pursuant to the rules of the Nasdaq Stock Market. 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 WesBanco in the Merger, see "The Merger," including
"Background of the Merger," "Recommendation of the Boards of Directors,"
"WesBanco Reasons for the Merger," "Commercial Reasons for the Merger," and
"Interest of Certain Persons in the Merger."
A copy of the Merger Agreement is attached to this Joint Proxy
Statement/Prospectus as Appendix I and is incorporated by reference herein in
its entirety. See also "The Merger Agreement," "Certain Covenants,"
"Conditions," "Amendment or Waiver" and "Termination; Expenses."
DATE, TIME AND PLACE OF THE WESBANCO SPECIAL MEETING
The WesBanco Special Meeting will be held on March 19, 1998, at 11:00 a.m.,
local time, in the principal executive offices of WesBanco, One Bank Plaza,
Wheeling, West Virginia.
VOTING AND REVOCATION OF PROXIES
Only holders of record of WesBanco Common Stock on February 6, 1998 (the
"WesBanco Record Date") will be entitled to notice of, and to vote at, the
WesBanco Special Meeting and any adjournments or postponements thereof. On the
Wesbanco Record Date, there were outstanding and entitled to vote 15,982,960
shares of WesBanco Common Stock with each share entitled to one vote. As of
February 2, 1998, WesBanco Common Stock was held by approximately 4,397
shareholders of record.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of WesBanco Common Stock entitled to vote is necessary to
constitute a quorum at the WesBanco Special Meeting. The affirmative vote of the
holders of at least a majority of the shares of WesBanco Common Stock
constituting a quorum and entitled to vote at the WesBanco Special Meeting is
required for approval of the issuance of WesBanco Common Stock in connection
with the Merger Agreement. With respect to the WesBanco Common Stock,
abstentions and broker non-votes will have the effect of a vote against the
issuance of WesBanco Common Stock in connection with the Merger Agreement.
As of the WesBanco Record Date, the directors and officers of WesBanco
beneficially owned approximately, in the aggregate, 689,492 shares of WesBanco
Common Stock, constituting in the aggregate approximately 4.31% of the
outstanding WesBanco Common Stock as of such date.
As of February 2, 1998, Commercial held no shares of WesBanco Common Stock.
Directors, executive officers and affiliates of Commercial owned no shares of
WesBanco Common Stock as of such date, except for A. Vernon Criss, III, a
director of Commercial, who beneficially owns 42,807 shares of WesBanco Common
Stock.
PROXIES
All shares of WesBanco Common Stock represented at the WesBanco Special
Meeting by properly executed proxies received prior to or at the WesBanco
Special Meeting, and not revoked, will be voted at the
21
<PAGE> 27
WesBanco Meeting in accordance with the instructions on the proxies. If no
instructions are indicated, properly executed proxies will be voted to approve
the issuance of WesBanco Common Stock in connection with the Merger Agreement.
The Board of Directors of WesBanco does not know of any matters, other than
as described in the Notice of WesBanco Special Meeting, which are to come before
the WesBanco Special Meeting. If any other matters are properly presented at the
WesBanco Special Meeting for action, the persons named in the enclosed form of
proxy and acting thereunder, both of whom are shareholders of WesBanco, 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. Proxies may be revoked by (i) filing with the Secretary of
WesBanco, at or before the taking of the vote at the WesBanco Special Meeting, a
written notice of revocation bearing a later date than the proxy, (ii) duly
executing a later dated proxy relating to the same shares and delivering it to
the Secretary of WesBanco, before the taking of the vote at the WesBanco Special
Meeting, or (iii) attending the WesBanco Special Meeting and voting in person.
Any written notice of revocation or subsequent proxy should be sent so as to be
delivered to WesBanco, Inc., One Bank Plaza, Wheeling, West Virginia 26003,
Attention: Corporate Secretary, or hand delivered to the foregoing
representative of WesBanco, at or before the taking of the vote at the WesBanco
Special Meeting.
SOLICITATION OF PROXIES
Proxies are being solicited by the Board of Directors of WesBanco for use
at the WesBanco Special Meeting. WesBanco will bear the cost of the solicitation
of proxies from the holders of its shareholders in connection with its WesBanco
Special Meeting and substantially all the costs relating to the printing and
mailing of the Joint Proxy Statement/Prospectus. In addition to solicitation by
use of the mails, proxies may be solicited by directors, officers and employees
of WesBanco in person or by telephone, telegram or other means of communication.
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
owners of WesBanco Common Stock held of record by such persons, and WesBanco may
reimburse such custodians, nominees and fiduciaries for reasonable out-of-pocket
expenses they incur in connection therewith. SHAREHOLDERS SHOULD NOT SEND ANY
STOCK CERTIFICATES WITH THEIR PROXY CARD.
INDEPENDENT AUDITORS
Ernst & Young LLP ("Ernst & Young"), independent auditors, have provided
auditing services to WesBanco since 1996. Representatives of Ernst & Young are
expected to be present at the WesBanco Meeting to respond to appropriate
questions and will also have the opportunity to make a statement if they desire
to do so. See "Experts."
22
<PAGE> 28
THE COMMERCIAL SPECIAL MEETING
GENERAL
This Joint Proxy Statement/Prospectus and the accompanying proxy are being
mailed to the shareholders of Commercial on or about February 13, 1998, in
connection with the solicitation of proxies by the Board of Directors of
Commercial of the holders of Commercial Common Stock to be voted at the
Commercial Special Meeting called to consider and vote upon the Merger Agreement
providing for (i) the Merger of Commercial with and into CBI, a wholly owned
subsidiary of WesBanco, and (ii) the exchange of each outstanding share of
Commercial Common Stock for 2.85 shares of WesBanco Common Stock. The Boards of
Directors of Commercial and WesBanco unanimously have approved the Merger
Agreement, and the Board of Directors of Commercial 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
Commercial in the Merger, see "The Merger," including "Background of the
Merger," "Recommendation of the Boards of Directors," "WesBanco Reasons for the
Merger," "Commercial's Reasons for the Merger," and "Interest of Certain Persons
in the Merger."
A copy of the Merger Agreement is attached to this Joint Proxy
Statement/Prospectus as Appendix I and is incorporated by reference herein in
its entirety. See also "The Merger," "Conditions," "Certain Covenants,"
"Amendment or Waiver" and "Termination; Expenses."
DATE, TIME AND PLACE OF THE COMMERCIAL SPECIAL MEETING
The Commercial Special Meeting will be held on March 19, 1998, at 9:00
a.m., local time, in the principal executive offices of Commercial, at 415
Market Street, Parkersburg, West Virginia.
VOTING AND REVOCATION OF PROXIES
Only holders of record of Commercial Common Stock on February 6, 1998 and
additional holders of record of Commercial Common Stock at the close of business
on March 9, 1998 resulting from the acquisition by Commercial of Gateway (the
"Commercial Record Date"), will be entitled to notice of and to vote at the
Commercial Special Meeting and any adjournments or postponements thereof. On the
Commercial Record Date, there were outstanding and entitled to vote 1,616,187
shares of Commercial Common Stock with each share entitled to one vote. As of
February 5, 1998, Commercial Common Stock was held by approximately 1,115
holders of record.
The presence, in person or by proxy, of the holders of a majority of the
outstanding shares of Commercial Common Stock entitled to vote is necessary to
constitute a quorum at the Commercial Special Meeting. The affirmative vote of
the holders of at least a majority of the outstanding shares of Commercial
Common Stock entitled to vote at the Commercial Special Meeting is required for
approval of the Merger Agreement and the Merger. With respect to the Commercial
Common Stock, abstentions and broker non-votes will have the effect of a vote
against approval of the Merger Agreement and the Merger.
As of December 31, 1997, the directors and officers of Commercial
beneficially owned approximately, in the aggregate, 170,461 shares of Commercial
Common Stock, constituting in the aggregate 10.55% of the outstanding Commercial
Common Stock as of such date.
As of February 2, 1998, WesBanco held 4,210 shares of Commercial Common
Stock. Christopher V. Criss, a member of WesBanco's Board of Directors is the
President and Chief Executive Officer, a Director and a shareholder of Atlas.
Atlas is the holder of 39,023 shares of Commercial Common Stock. Also, Mr.
Criss's brother, A. Vernon Criss, III, is a member of the Commercial Board of
Directors and a shareholder of Atlas as well. Atlas has the sole power to vote
and the sole power to dispose of the 39,023 shares of Commercial Common Stock
owned by it. No other directors, executive officers and affiliates of WesBanco
owned shares of Commercial Common Stock as of such date. WesBanco currently hold
an option to purchase up to 321,620 shares of Commercial Common Stock pursuant
to the Stock Option Agreement, dated September 12, 1997, between WesBanco and
Commercial (the "Option Agreement"). See "The
23
<PAGE> 29
Option Agreement." A copy of the Option Agreement is attached to this Joint
Proxy Statement/Prospectus as Appendix II and is incorporated by reference
herein in its entirety.
PROXIES
All shares of Commercial Common Stock represented at the Commercial Special
Meeting by properly executed proxies received prior to or at the Commercial
Special Meeting, and not revoked, will be voted at the Commercial Special
Meeting in accordance with the instructions on the proxies. If no instructions
are indicated, properly executed proxies will be voted to approve the Merger
Agreement and authorize the Merger in accordance with the terms and conditions
of the Merger Agreement.
The Board of Directors of Commercial does not know of any matters, other
than as described in the Notice of Commercial Special Meeting, which are to come
before the Commercial Special Meeting. If any other matters are properly
presented at the Commercial Special Meeting for action, the persons named in the
enclosed form of proxy and acting thereunder, both of whom are shareholders of
Commercial, 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. Proxies may be revoked by (i) filing with the Secretary of
Commercial a written notice of revocation bearing a later date than the proxy,
(ii) duly executing a later dated proxy relating to the same shares and
delivering it to the Secretary of Commercial, before the taking of the vote at
the Commercial Special Meeting, or (iii) attending the Commercial Special
Meeting and voting in person. Any written notice of revocation or subsequent
proxy should be sent so as to be delivered to Commercial Bancshares,
Incorporated, 415 Market Street, Parkersburg, West Virginia 26101, Attention:
Corporate Secretary, or hand delivered to the foregoing representative of
Commercial, at or before the taking of the vote at the Commercial Special
Meeting.
SOLICITATION OF PROXIES
Proxies are being solicited by the Board of Directors of Commercial for use
at the Commercial Special Meeting. Commercial will bear the cost of the
solicitation of proxies from the holders of its shareholders in connection with
its Commercial Special Meeting, except that WesBanco will bear substantially all
the costs relating to the printing and mailing of the Joint Proxy
Statement/Prospectus. In addition to solicitation by use of the mails, proxies
may be solicited by directors, officers and employees of Commercial in person or
by telephone, telegram or other means of communication. 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 owners of Commercial
Common Stock held of record by such persons, and Commercial may reimburse such
custodians, nominees and fiduciaries for reasonable out-of-pocket expenses they
incur in connection therewith.
SHAREHOLDERS SHOULD NOT SEND ANY STOCK CERTIFICATES WITH THEIR
PROXY CARD.
ACCOUNTANTS
Harman, Thompson, Mallory & Ice, A.C., independent public accountants, have
provided auditing services to Commercial since 1990. Representatives of Harman,
Thompson, Mallory & Ice, A.C. are expected to be present at the Commercial
Meeting to respond to appropriate questions and will also have the opportunity
to make a statement if they desire to do so and will be available to respond to
questions. See "Experts".
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THE MERGER
The following description of the terms of the Merger is qualified in its
entirety by reference to the provisions of the Merger Agreement and the Option
Agreement, which are attached hereto as Appendices I and II, respectively, and
are incorporated herein by reference in their entirety. Shareholders of WesBanco
and Commercial are strongly encouraged to read the Merger Agreement and the
Option Agreement for a more complete description of the terms of the Merger.
GENERAL
Pursuant to the Merger Agreement, Commercial will merge with and into CBI,
a wholly owned subsidiary of WesBanco, with CBI continuing as the surviving
corporation. Under the Merger Agreement, each outstanding share of Commercial
Common Stock will be converted into 2.85 shares of WesBanco Common Stock and
cash will be paid in lieu of fractional shares based on a whole share value of
$28.37 per share or the opportunity to buy an additional fraction based on such
per share value sufficient to result in a whole share for any resulting
fraction, except for shares held by dissenting shareholders of Commercial. See
"Rights of Dissenting Shareholders" below. The conversion is more fully
described below. See "The Merger Agreement--Conversion of Securities."
BACKGROUND OF THE MERGER
Commercial's management has been informally approached from time to time by
other financial institutions in West Virginia and Ohio seeking either to
initiate or expand their activities in northern West Virginia and southern Ohio.
Commercial's Board of Directors appointed a Mergers and Acquisitions Committee,
initially comprising the Chief Executive Officer and four other directors, to
receive any acquisition proposals and to monitor any acquisition negotiations.
WesBanco has maintained some communication with Commercial for several
years. These informal discussions did not result in any substantive discussions
between the parties. Edward M. George, President of WesBanco, met with William
E. Mildren, Jr. on June 26, 1997 in Parkersburg, West Virginia to express
WesBanco's interest in discussing a transaction between the two companies. Mr.
Mildren indicated that Commercial had no interest in pursuing a transaction at
that time.
In the spring of 1997, Commercial's Chief Executive Officer initiated
discussions with two other bank holding companies concerning a three-way "merger
of equals." At the time the three-way merger was first broached, Commercial and
the other two entities retained Danielson Associates, an investment banking firm
headquartered in Rockville, Maryland, to assist in structuring the transaction
and determining the exchange ratio.
In the spring 1997, Danielson Associates conducted a presentation for the
chief executive officers of the three institutions, which included descriptions
of the deal concept, franchise strengths, expense savings estimates, and value
methodology. An exchange ratio was not suggested. Thereafter, the parties
determined that each needed its own investment banking firm. With the agreement
of the other two bank holding companies, Commercial retained Danielson
Associates, and the other entities retained their own investment bankers.
During summer 1997, negotiations continued, but the parties were unable to
reach agreement on the exchange ratio or the fine points of the structure of the
merged institution. It was not until mid-August that Commercial's Mergers and
Acquisitions and Executive Committees met to consider an offer for the three-way
transaction, with Danielson Associates making the presentation. The full board
voted to proceed with negotiation of a definitive agreement and commence due
diligence. Thereafter, due diligence and negotiation of a definitive agreement
began in earnest, and exchange ratios were tentatively agreed to towards the end
of August, with a signing of a definitive agreement anticipated the week after
Labor Day.
Mr. George contacted Mr. Mildren on August 27, 1997 by telephone, seeking
an appointment with Mr. Mildren and Mr. Mildren declined to meet with Mr.
George. On August 28, 1997, Mr. George mailed an unsolicited, definitive written
acquisition proposal to Mr. Mildren outlining the terms and conditions of a
proposed transaction with Commercial.
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Lathan M.Ewers, Jr., counsel for Commercial, clarified the WesBanco
proposal in telephone conversations with James C. Gardill, counsel for WesBanco,
on September 2, September 3, September 4, September 8, September 9 and September
10, 1997. During this period of time, on September 3, 1997, the Executive
Committee of Commercial met to review the WesBanco proposal and two other banks,
with whom Commercial had engaged in discussions concerning a possible merger
transaction between them, were notified of the WesBanco proposal. These other
parties were provided with copies of WesBanco's proposal and were invited to
consider counter proposals.
The Commercial Executive Committee was convened again on September 5, 1997,
to consider the WesBanco offer and to compare it with a counter offer from one
of the other two parties. One of the other two parties then submitted a revised
proposal to Commercial which was considered by the Board of Directors of
Commercial at a special meeting thereof held on September 9, 1997. Additional
telephone conversations occurred between Mr. Ewers and Mr. Gardill on September
9, 1997 and September 10, 1997 during which WesBanco increased its offer. This
increased offer was communicated to the other two parties, and they were
encouraged to submit a counter proposal but did not do so. On September 12,
1997, a binding letter of agreement was entered into between Commercial and
WesBanco with respect to the transaction. The parties then conducted preliminary
due diligence and began negotiations toward the execution of the definitive
Merger Agreement which was executed on September 30, 1997.
On September 30, 1997, one of the other parties filed suit against
Commercial in the United States District Court in Cleveland, making various
allegations and demanding money damages. Several weeks later, the second party
moved to intervene in the suit against Commercial, making similar allegations
and demanding money damages. These suits were subsequently settled. See "Legal
Proceedings."
For additional information regarding the reasons for the decision of
Commercial's Board of Directors, see "Commercial's Reasons for the Merger"
below.
RECOMMENDATION OF THE BOARDS OF DIRECTORS
The Boards of Directors of Commercial and WesBanco each have approved the
Merger Agreement by unanimous vote of the directors of the respective
corporations. The Board of Directors of WesBanco recommends a vote FOR approval
of the issuance of shares of WesBanco Common Stock in connection with the Merger
Agreement by the shareholders of WesBanco. The Board of Directors of Commercial
recommends a vote FOR approval and adoption of the Merger Agreement by the
shareholders of Commercial. The Boards of Directors of Commercial and WesBanco
have determined that the Merger is in the best interests of their respective
companies, shareholders and employees, and that the Merger will enhance the
ability of WesBanco and Commercial to serve the financial needs of their
respective customers.
The Boards of Directors of WesBanco and Commercial each 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.
COMMERCIAL REASONS FOR THE MERGER
The Commercial Board believes that the terms of the Merger and the Merger
Agreement are advisable and are fair to, and in the best interests of,
Commercial and its shareholders. As explained below, this conclusion is
supported by the opinion of Danielson Associates, the independent financial
advisor retained by Commercial, that the consideration to be received in the
Merger is fair to Commercial shareholders from a financial point of view. Scott
& Stringfellow, an independent advisor, also consulted with the Commercial
Board, and received a fee of $20,000 for such consultation.
FINANCIAL TERMS OF MERGER. The Commercial Board was of the view that,
based on historical and anticipated trading prices for WesBanco Common Stock,
the value of the consideration to be received by Commercial shareholders
represents fair multiples of Commercial's per share book value and earnings, and
will be received in a tax-free exchange of stock. The Commercial Board also
considered that, under the exchange ratio, the Merger will result in a
substantial increase in dividend income per share to Commercial
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shareholders, although there can be no assurance that WesBanco's current
dividends are indicative of future dividends.
NON-FINANCIAL TERMS OF THE MERGER. The Commercial Board considered the
social and economic effects of the Merger on its employees, depositors,
customers, and others dealing with Commercial, and the communities in which
Commercial's subsidiaries are located and operate. The Commercial Board took
into consideration that for the foreseeable future certain of its banking
subsidiaries will continue to operate as separately incorporated banks, although
WesBanco will implement certain operating synergies.
CERTAIN FINANCIAL AND OTHER INFORMATION CONCERNING WESBANCO. The
Commercial Board considered the business and financial condition of WesBanco and
its position among its peer group of financial institutions in West Virginia and
Ohio in terms of profitability, capital adequacy and asset quality. The
Commercial Board also considered that historical dividends per share and net
income per share of WesBanco Common Stock to be received by Commercial
shareholders, after giving effect to the exchange ratio, represent a substantial
increase in historical dividends per share and net income per share of
Commercial Common Stock, although there can be no assurance that pro forma
amounts are indicative of future dividends or income per share of WesBanco. The
Commercial Board further considered the reputation and business practices of
WesBanco and its management as it would affect the employees of Commercial.
OTHER POSSIBLE ALTERNATIVES. Having thoroughly explored a three-way merger
combination, and based in part on the advice of Danielson Associates as to other
possible alternatives to the transaction with WesBanco, including remaining
independent, the Commercial Board believes it has fully explored all potential
alternatives and that the transaction with WesBanco is the best available
alternative for Commercial and its shareholders at this time.
OPINION OF FINANCIAL ADVISOR. The Commercial Board considered the opinion
of Danielson Associates as to the fairness of the consideration to be received
in the Merger by Commercial shareholders from a financial point of view.
OTHER CONSIDERATIONS. The Commercial Board further determined that the
additional resources resulting in the Merger will enable Commercial to provide a
wider and improved rate of financial services to consumers and businesses, and
to achieve added flexibility in dealing with changing competitive environments.
Commercial also considered that it would make a contribution to the Merger by
providing a strong trust department presence in markets in which it serves.
THE COMMERCIAL BOARD OF DIRECTORS BELIEVES THAT THE MERGER AND THE MERGER
AGREEMENT ARE ADVISABLE AND ARE FAIR TO AND IN THE BEST INTERESTS OF COMMERCIAL
AND ITS SHAREHOLDERS. THE COMMERCIAL BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT COMMERCIAL SHAREHOLDERS VOTE FOR APPROVAL AND ADOPTION OF THE MERGER AND
THE MERGER AGREEMENT.
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 Commercial, thereby affording
the resulting combined institution better opportunities to compete with other
financial and non-financial institutions (including other commercial banks,
thrift institutions, finance companies, credit unions, money market mutual
funds, brokerage firms, investment companies, credit companies, insurance
companies and retail stores that maintain their own credit operations) in the
markets in which Commercial and WesBanco's subsidiary banks conduct their
business. The Merger will provide WesBanco with a greater presence in the
Parkersburg area of West Virginia which will provide WesBanco with an
opportunity for future growth in that market. In addition, the Merger will
provide WesBanco with a greater presence in the other areas of West Virginia and
Ohio in which Commercial currently conducts business, and will provide WesBanco
with an opportunity for future growth in those markets. 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 Commercial customers, in particular trust services,
mutual funds, and the combined entity will be able to offer a broader
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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 Commercial's 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 Commercial beneficially owned, in the aggregate,
approximately 259,034 shares, or 16.03% of Commercial Common Stock as of
December 31, 1997.
All of Commercial's directors and officers will, as a result of the Merger,
obtain an equity interest in WesBanco in exchange for their shares of Commercial
Common Stock. Each of them will receive the same number of shares of WesBanco
Common Stock for each share of Commercial Common Stock owned by him or her as
every other Commercial shareholder. As a result of the Merger, directors and
officers of Commercial will beneficially own, in the aggregate, 738,247
approximately shares or 3.53% of WesBanco Common Stock. See "Information with
Respect to Commercial--Directors and Executive Officers." Certain affiliates of
Commercial will, however, be subject to certain restrictions on any resale of
WesBanco stock received by them pursuant to the Merger. See "Resale
Restrictions." The directors of Commercial do not own any shares of WesBanco
Common Stock, except for A. Vernon Criss, III, a director of Commercial, who
beneficially owns 42,807 shares of WesBanco Common Stock.
As a result of the Merger each five percent shareholder of Commercial will
receive, in exchange for the Commercial Common Stock beneficially owned by them,
the amount and percentage of shares of WesBanco Common Stock set forth in
"Information With Respect to Commercial--Principal Shareholders." Currently the
only five-percent shareholder of Commercial Common Stock is Commercial
Bancshares, Inc. Employee Stock Ownership Trust which owns approximately 170,461
shares or 10.55%.
Under the Merger Agreement, William E. Mildren, Jr., Robert K. Tebay, James
W. Swearingen and Larry G. Johnson will become directors of WesBanco and Mr.
Mildren will become a member of the Executive Committee of the Board of
Directors. It is also a condition to WesBanco's obligations to consummate the
Merger that William E. Mildren, Jr., Larry G. Johnson, W. Bryan Pennybacker,
James A. Meagle, Jr., Thomas M. Lookbaugh and C. Randall Law (collectively, the
"Employees") enter into employment agreements (the "Employment Agreements") with
Commercial and/or its subsidiaries or successors (for purposes of this
subsection only, the "Bank"), as described in the section entitled "The Merger
Agreement--Certain Covenants" and "The Merger Agreement--Conditions," below.
Wesbanco has previously entered into similar employment agreements with its
current officers. There are no agreements that the other individuals who serve
as directors and officers of Commercial will remain in their respective
positions following the Merger. See "Effects of the Merger: The Surviving
Corporation" below.
All Employment Agreements would have substantially the same terms and
conditions other than variations in compensation. The Employment Agreements
provide that each Employee entering into such Employment Agreement will be paid
a salary as determined by the Board of Directors annually, but in no event less
than the amount to be stated in each Employment Agreement. Each Employment
Agreement also requires the Bank to provide the same benefits to the Employees
which it provides to other executive employees, during the period of his/her
employment. Each Employment 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, the Bank is required to pay to such Employee's
spouse or estate an amount equal to six months of such employee's base salary at
his/her then current base rate. In the event the Bank attempts to terminate the
Employee's employment other than (i) for cause, (ii) the death of the Employee,
or (iii) by mutual consent with the Employee, Employee is entitled to receive an
amount equal to the greater of six months base salary or the base salary payable
under the remaining term of the agreement. The term of each Employment Agreement
is for a term of three years, set forth in each agreement providing for an
automatic extension on each anniversary date unless either party gives 90 days'
prior written notice. 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, each Employee shall serve in
an executive capacity.
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As of February 2, 1998, WesBanco held 4,210 shares of Commercial Common
Stock. Christopher V. Criss, a member of WesBanco's Board of Directors is the
President and Chief Executive Officer, a Director and a shareholder of Atlas.
Atlas is the holder of 39,023 shares of Commercial Common Stock. Also, Mr.
Criss's brother, A. Vernon Criss, III, is a member of Commercial's Board of
Directors and a shareholder of Atlas as well. Atlas has the sole power to vote
and the sole power to dispose of the 39,023 shares of Commercial Common Stock
owned by it. No other Directors, executive officers and affiliates of WesBanco
owned shares of Commercial Common Stock as of such date. WesBanco currently
holds options to purchase up to 321,620 shares of Commercial Common Stock
pursuant to the Option Agreement, dated September 12, 1997, between WesBanco and
Commercial. See "Other Agreements--The Option Agreement." Except for the stock
ownership of Commercial 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 Commercial
or WesBanco and their respective affiliates, and any directors, officers, or
principal shareholders of Commercial or WesBanco or their respective associates,
including any outstanding loans or trust relationships, will be affected by the
Merger.
OPINION OF DANIELSON ASSOCIATES, INC.
On September 12, 1997, Danielson Associates rendered a definitive written
opinion that the Merger is fair, from a financial point of view, to Commercial
and its shareholders. Danielson Associates furnished an updating opinion dated
February 9, 1998. Commercial may request Danielson Associates to update its
opinion again if the closing of the Merger is held more than five days after the
Commercial Special Meeting.
THE FULL TEXT OF DANIELSON ASSOCIATES' OPINION DATED FEBRUARY 9, 1998,
WHICH SETS FORTH THE ASSUMPTIONS MADE, PROCEDURES FOLLOWED AND MATTERS
CONSIDERED BY DANIELSON ASSOCIATES, IS ATTACHED AS APPENDIX III TO THIS JOINT
PROXY STATEMENT/PROSPECTUS AND IS INCORPORATED HEREIN BY REFERENCE. DANIELSON
ASSOCIATES' OPINION DELIVERED TO THE COMMERCIAL BOARD OF DIRECTORS WAS DIRECTED
ONLY TO THE FAIRNESS OF THE CONSIDERATION TO BE RECEIVED BY THE HOLDERS OF
COMMERCIAL COMMON STOCK FROM THE POINT OF VIEW OF THE HOLDERS OF COMMERCIAL
COMMON STOCK OTHER THAN WESBANCO AND ITS AFFILIATES, AND DOES NOT CONSTITUTE A
RECOMMENDATION TO ANY COMMERCIAL SHAREHOLDER AS TO HOW SUCH SHAREHOLDER SHOULD
VOTE AT THE COMMERCIAL MEETING. THE SUMMARY OF THE DANIELSON ASSOCIATES OPINION
SET FORTH IN THIS JOINT PROXY STATEMENT/PROSPECTUS IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO THE FULL TEXT OF SUCH OPINION. COMMERCIAL SHAREHOLDERS ARE URGED
TO READ THE ENTIRE OPINION CAREFULLY.
Commercial retained Danielson Associates to advise the Commercial Board of
Directors as to its "fair" sale value and the fairness to its shareholders of
the financial terms of the offer to acquire Commercial. Danielson Associates is
regularly engaged in the valuation of banks, bank holding companies, and thrifts
in connection with mergers, acquisitions, and other securities transactions; and
has knowledge of, and experience with, the West Virginia banking markets and
banking organizations operating in those markets. Danielson Associates was
selected by Commercial because of its knowledge of, expertise with, and
reputation in the financial services industry.
In such capacity, Danielson Associates reviewed the Merger Agreement with
respect to the pricing and other terms and conditions of the Merger, but the
decision as to accepting the offer was ultimately made by the Board of Directors
of Commercial. Danielson Associates rendered its oral opinion to the Commercial
Board of Directors, and subsequently confirmed in writing, that as of the date
of such opinion, the financial terms of the WesBanco offer were "fair" to
Commercial and its shareholders from a financial point of view. No limitations
were imposed by the Commercial Board of Directors upon Danielson Associates with
respect to the investigation made or procedures followed by it in arriving at
its opinion.
In arriving at its opinion, Danielson Associates (a) reviewed certain
business and financial information relating to Commercial and WesBanco,
including annual reports for the fiscal year ended December 31, 1996 and call
report data from 1989 to 1996 including quarterly reports for 1997; (b)
discussed the past and current operations, financial condition and prospects of
Commercial with its senior executives; (c) analyzed the pro
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forma impact of the merger on WesBanco's earnings per share, capitalization, and
financial ratios; (d) reviewed the reported prices and trading activity for the
Commercial and the WesBanco Common Stock and compared them to similar bank
holding companies; (e) reviewed and compared the financial terms, to the extent
publicly available, with comparable transactions; (f) reviewed the Merger
Agreement and certain related documents; and (g) considered such other factors
as were deemed appropriate.
Danielson Associates did not obtain any independent appraisal of assets or
liabilities of Commercial or WesBanco or their respective subsidiaries. Further,
Danielson Associates did not independently verify the information provided by
Commercial or WesBanco and assumed the accuracy and completeness of all such
information.
In arriving at its opinion, Danielson Associates performed a variety of
financial analyses. Danielson Associates believes that its analyses must be
considered as a whole and that consideration of portions of such analyses and
the factors considered therein, without considering all the factors, and
analyses, could create an incomplete view of the analyses and the process
underlying Danielson Associates opinion. The preparation of a fairness opinion
is a complex process involving subjective judgments and is not necessarily
susceptible to partial analysis and summary description.
Danielson Associates made certain assumptions with respect to future
industry performance, business and economic conditions, and other matters, many
of which were beyond Commercial's or WesBanco's control. Any estimates contained
in Danielson Associates' analyses are not necessarily indicative of the future
results of operation, which may be significantly more or less favorable than
such estimates. Estimates of values of companies do not purport to be appraisals
or necessarily reflect the prices at which companies or their securities may
actually be sold.
The following is a summary of selected analyses considered by Danielson
Associates in connection with its opinion letter.
Pro Forma Merger Analyses
Danielson Associates analyzed the changes in the amount of earnings and
book value represented by the receipt of about $135.8 million for all of the
outstanding shares of Commercial Common Stock, which will be paid in WesBanco
Common Stock. The analysis evaluated, among other things, possible dilution in
earnings and capital per share for WesBanco Common Stock.
Comparable Companies
Danielson Associates compared Commercial's (a) tangible capital of 10.13%
of assets as of June 30, 1997, (b) .70% of assets nonperforming as of June 30,
1997, and (c) net operating income of 1.91% of average assets for the trailing
twelve month period ending March 31, 1997, with the medians for selected West
Virginia banks which Danielson Associates deemed comparable. These banks
included American Bancorporation, Matewan Bancshares, Inc., Pocahontas
Bankshares Corporation and Putnam Bancshares, Inc. Their medians were (a)
tangible capital of 7.93% of assets, (b) 1.12% of assets nonperforming, and (c)
net operating income of 1.88% of average assets.
Danielson Associates also compared WesBanco's (a) stock price as of
September 18, 1997 equal to 20.7 times earnings and 189% of book, (b) dividend
yield based on trailing four quarters as of June 30, 1997 and stock price as of
September 18, 1997 equal to 2.73%, (c) tangible capital as of June 30, 1997 of
13.16% of assets, (d) nonperforming assets as of June 30, 1997 equal to .99% of
total assets, (e) return on average assets during the trailing four quarters
ended June 30, 1997 of 1.31% and (f) return on average equity during the same
period of 9.69%, with the medians for selected banks and bank holding companies
that Danielson Associates deemed to be comparable to WesBanco. The selected
institutions included BancFirst Ohio Corp., Citizens Bancshares, Inc., City
Holding Company, CoBancorp, Inc., First Financial Bancorp, Horizon, Matewan
Bancshares, Inc., Mid Am Inc., Park National Corporation, Second Bancorp,
Incorporated and United Bankshares, Inc. The comparable medians were (a) stock
price equal to 18.8 times earnings and 262% of book, (b) dividend yield of
2.16%, (c) tangible capital of 8.65% of assets, (d) .58% of assets
nonperforming, (e) return on average assets of 1.16% and (f) return on average
equity of 13.37%. Danielson Associates also
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compared other income, expense, and balance sheet information of such companies
with similar information about WesBanco.
Comparable Transaction Analysis
Danielson Associates compared the consideration to be paid in the merger to
the latest twelve months earnings and equity capital of Commercial with earnings
and capital multiples paid in acquisitions of MidAtlantic banks in 1996 and 1997
through the opinion date. Of these, the most applicable recent transactions
included Fulton Financial Corporation/Keystone Heritage Group, Inc., Area
Bancshares Corporation/Cardinal Bancshares and Horizon Bancorp, Inc./Twentieth
Bancorp, Inc. At the time Danielson Associates made its analysis, the
consideration to be paid in the merger was 297% of Commercial's June 30, 1997
book value and 25.9 times Commercial's earnings for the trailing four quarters
as of June 30, 1997. This compares to the median multiples of 247% of book value
and 20.8 times earnings for the comparable acquisitions.
The transaction price also was compared to the prices paid for five sales
involving banks from Kentucky, Maryland, Ohio, Pennsylvania and West Virginia
with assets over $100 million during 1997. The median comparable deal prices in
these transactions were 239% of book and 20.8 times earnings.
Other Analysis
In addition to performing the analyses summarized above, Danielson
Associates also considered the general market for bank and thrift mergers, the
historical financial performance of Commercial and WesBanco, the deposit market
shares of both banks, and the general economic conditions and prospects of those
banks.
No company or transaction used in this composite analysis is identical to
Commercial or WesBanco. Accordingly, an analyses of the results of the foregoing
is not mathematical; rather it involves complex consideration and judgments
concerning differences in financial and operating characteristics of the
companies and other factors that could affect the public trading values of the
company or companies to which they are being compared.
The summary set forth above does not purport to be a complete description
of the analyses and procedures performed by Danielson Associates in the course
of arriving at its opinions. In payment for its services as the financial
advisor to Commercial, Danielson Associates is to be paid an estimated fee of
about $375,000.
EFFECTS OF THE MERGER: THE SURVIVING CORPORATION
The Merger will become effective at the time the Articles of Merger are
filed with the Secretary of State of the State of West Virginia, and the
Certificate of Merger is issued by the Secretary of State of the State of West
Virginia (the "Effective Time"). At the Effective Time of the Merger, the
separate existence of Commercial will cease. CBI will be the surviving
corporation (sometimes referred to as the "Surviving Corporation"). The assets,
liabilities, and capital of Commercial will be merged into CBI and these assets,
liabilities and capital will then constitute part of the assets, liabilities and
capital of CBI. CBI 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. In
addition, certain directors of Commercial will become directors of WesBanco. See
"The Merger--Interests of Certain Persons in the Merger." For information
concerning WesBanco's current management, see WesBanco's 1997 Definitive Proxy
Statement filed pursuant to Section 14(a) of the Securities Act of 1934 on March
14, 1997. See "Incorporation Of Certain Documents By Reference."
Commercial will be merged with and into CBI, which is a wholly-owned
subsidiary of WesBanco, in the Merger. While WesBanco has advised Commercial
that the officers and employees of the affiliate banks of Commercial immediately
after the Merger will be the same as the officers and employees now holding such
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positions, there are no agreements to that effect, except for Employment
Agreements for certain Employees. See "The Merger--Interests of Certain Persons
in the Merger." 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 the affiliate banks of Commercial, which can be
expected to result in improved services to their respective customers and
greater efficiency.
If the Merger had occurred as of September 30, 1997, Commercial would have,
on a pro forma consolidated basis, constituted 20.9% of deposits, 19.4% of
assets, 15.0% of equity of WesBanco, and its shareholders would have held 22.3%
of the total outstanding shares of WesBanco on a pro forma consolidated basis.
In addition, for the nine months ended September 30, 1997, Commercial would have
contributed 21.7% of net interest income and 17.4% of net income to WesBanco on
a pro forma consolidated basis. These percentages reflect the relative size of
Commercial as of September 30, 1997. 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. See "Pro Forma Financial Data" and "Information With
Respect To WesBanco--Recent Acquisitions."
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
Federal Reserve Board.
Applications for approval of the Merger were filed with the Federal Reserve
Board and the West Virginia Department of Banking on January 2, 1998, and
January 12, 1998, respectively, and were confirmed as filed by the Federal
Reserve Board on January 12, 1998. Approval of the Merger has not yet been
received from the West Virginia Board of Banking or the Federal Reserve Board.
The Mergers cannot proceed in the absence of the requisite regulatory
approvals. Although there can be no assurance that these regulatory approvals
will be obtained, WesBanco and Commercial believe that the required governmental
approvals will be obtained.
RIGHTS OF DISSENTING SHAREHOLDERS
Holders of Commercial Common Stock who object to the Merger and comply with
Section 31-1-123 of the West Virginia Corporation 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 Commercial shareholder
vote on the Agreement was taken without regard to any appreciation or
depreciation in anticipation of such corporate action.
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 West Virginia Corporation Act, which is reproduced in full as
Appendix IV to this Joint Proxy Statement/Prospectus.
1. Written Objection to the Merger Must Be Filed. A Dissenting Shareholder
must file written objection to the proposed Merger with Commercial prior to or
at the Commercial Meeting.
2. Shares Must Not Be Voted in Favor of the Merger. A Dissenting
Shareholder must not vote his or her shares of Commercial 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 Commercial or the Surviving Corporation
for payment of the fair value of his or her shares of Commercial Common Stock
within 10 days after the vote is taken at the Commercial 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 William E. Mildren, Jr., President, Commercial
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Bancshares, Incorporated, 415 Market Street, Parkersburg, West Virginia, 26101.
Once the demand has been made, it cannot be withdrawn without the permission of
Commercial 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
Commercial 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 Commercial within 20
days after demanding payment for his or her shares in order for Commercial 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 shall, at
Commercial's option, terminate his or her dissenters' rights unless a court, for
good cause shown, directs otherwise.
6. Commercial 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 Commercial 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 Commercial 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
Commercial 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 Commercial fail to agree
upon the fair value within 30 days after the Effective Date, then Commercial
shall within 30 days after receipt of written demand from any Dissenting
Shareholder, which written demand must be given within 60 days after the
Effective Date, file a complaint in the Circuit Court of Wood County, West
Virginia, requesting that the fair value of such shares be found and determined.
In the event that Commercial fails to institute such a proceeding, the
Dissenting Shareholder may do so in the name of Commercial.
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 Commercial 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 IRC.
Any Commercial 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.
RESALE RESTRICTIONS
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 Commercial Common
Stock who is not an affiliate of WesBanco or Commercial within the meaning of
Rule 144 or 145 under the Securities Act, may sell or transfer any shares of
WesBanco Common
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Stock such holder receives in the Merger without need of further registration
under the Securities Act. This Joint 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 Commercial shareholders who may
be deemed to be affiliates of Commercial 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
Commercial (i) deliver to WesBanco a schedule specifying the persons who may be
deemed to be "affiliates" of Commercial 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, providing that the
shares of WesBanco Common Stock issued pursuant to the Merger in exchange for
shares of Commercial 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.
ACCOUNTING TREATMENT
The Merger will be accounted for as a "pooling of interests" by WesBanco.
The results of this accounting treatment are shown in the summary unaudited
combined pro forma financial data included elsewhere in this Joint Proxy
Statement/Prospectus. See "Pro Forma Financial Data."
CERTAIN FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER
The Merger is conditioned upon receipt of 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
WesBanco, Kirkpatrick & Lockhart LLP ("Kirkpatrick & Lockhart"), as to the
principal federal income 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 filed with the
Registration Statement as Exhibit 8.1. 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 WesBanco or Commercial Common Stock as a capital asset
within the meaning of Section 1221 of the IRC.
No rulings have been requested from the Internal Revenue Service (the
"Service") as to the federal income tax consequences of the Merger. Commercial
shareholders should be aware that the opinion of Kirkpatrick & Lockhart is not
binding on the Service and the Service is not precluded from taking a different
position. Commercial shareholders should also be aware that some of the federal
income 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 Kirkpatrick & Lockhart 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.
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The federal income tax consequences discussed below are conditioned upon,
and the opinion of Kirkpatrick & Lockhart is based upon, the accuracy, as of the
date hereof and at, as of and after the Effective Time, 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 Commercial 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 Commercial
Common Stock as of the same date; (B) that following the Merger, WesBanco will
continue the historic business of Commercial or use a significant portion of
Commercial's historic business assets in a business; and (C) that a bona fide
corporate business purpose exists for the Merger.
WesBanco and Commercial 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. If either WesBanco or Commercial learns before the Effective
Time 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.
Kirkpatrick & Lockhart will render an opinion to WesBanco and Commercial,
based upon the assumptions set forth therein, that the Merger will have the
following federal income tax consequences:
(i) The statutory merger of Commercial with CBI will constitute a
reorganization within the meaning of Section 368(a)(1) of the IRC, and
WesBanco, Commercial, and CBI 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, Commercial or CBI
as a result of the transactions contemplated in the Agreement;
(iii) No gain or loss will be recognized by the shareholders of
Commercial as a result of their exchange of Commercial 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 Commercial Common Stock will include the period during which the
stock of Commercial 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 Commercial Common Stock will be the same as the basis of
the stock exchanged therefore;
(vi) A Commercial shareholder who dissents from the proposed Merger
and receives solely cash in exchange for that shareholder's shares of
Commercial 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 IRC. 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; and
(vii) The receipt by a Commercial 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 Commercial
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
IRC. If the distribution is eligible for treatment as a distribution in
redemption of a Commercial 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.
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THE MERGER AGREEMENT
Following is a summary of the material terms of the Merger Agreement, a
copy of which is attached as Appendix I to this Joint Proxy Statement/Prospectus
and is incorporated herein by reference. Such summary is qualified in its
entirety by reference to the Merger Agreement. Shareholders of WesBanco and
Commercial are urged to read the Merger Agreement in its entirety for a more
complete description of the Merger.
THE MERGER
The Merger Agreement provides that, following the approval and adoption of
the Merger Agreement and the transactions contemplated thereby by the
shareholders of WesBanco and of Commercial, and the satisfaction or waiver of
the other conditions to the Merger, Commercial will be merged with and into CBI,
with CBI as the corporation surviving the Merger.
If all such conditions to the Merger are satisfied or waived, the Merger
will become effective at the Effective Time. At the Effective Time, the Articles
of Incorporation and the Bylaws of CBI immediately prior to the Merger will
constitute the Articles of Incorporation and Bylaws of the corporation surviving
the Merger.
CONVERSION OF SECURITIES
Upon consummation of the Merger, pursuant to the Merger Agreement, each
share of Commercial Common Stock issued and outstanding immediately prior to the
Effective Time (except for shares of Commercial Common Stock issued and held in
treasury of Commercial or beneficially owned by CBI or WesBanco, other than in a
fiduciary capacity, and shares as to which dissenters rights are exercised in
accordance with the West Virginia Corporation Act), will be converted into and
become, without action on the part of the holder thereof, the right to receive
2.85 shares of WesBanco Common Stock, having equal rights and privileges with
respect to all other WesBanco Common Stock issued and outstanding as of the
Effective Time of the Merger. No fractional shares of WesBanco Common Stock will
be issued in connection with the Merger. Cash will be paid in lieu of issuing
fractional shares of WesBanco Common Stock, based on a whole share value of
$28.37 per share, or at the election of each Commercial shareholder, such
shareholder may purchase the remaining fraction of such share at the aforesaid
value. Shares of Commercial Common Stock issued and held in the treasury of
Commercial or beneficially owned by WesBanco or CBI, other than in a fiduciary
capacity, will be canceled and retired at the Effective Time. Each share of
common stock of CBI issued and outstanding immediately prior to the Effective
Time, shall at the Effective Time, become one issued and outstanding share of
common stock of CBI as the corporation surviving the Merger.
Promptly after the Effective Time, American Stock Transfer & Trust Company
(the "Exchange Agent"), will mail transmittal forms and exchange instructions to
each holder of record of Commercial Common Stock to be used to surrender and
exchange certificates evidencing shares of Commercial Common Stock for
certificates evidencing the shares of WesBanco Common Stock to which such holder
has become entitled. After receipt of such transmittal forms, each holder of
certificates formerly representing shares of Commercial Common Stock will be
able to surrender such certificates to the Exchange Agent, and each holder will
receive in exchange therefor certificates evidencing the number of shares of
WesBanco Common Stock to which such holder is entitled. Such transmittal letters
will be accompanied by instructions specifying other details of the exchange.
HOLDERS OF COMMERCIAL COMMON STOCK SHOULD NOT SEND IN THEIR CERTIFICATES UNTIL
THEY RECEIVE A TRANSMITTAL FORM AND INSTRUCTIONS FROM THE EXCHANGE AGENT.
After the Effective Time, each certificate evidencing shares of Commercial
Common Stock, until so surrendered and exchanged, will be deemed, for all
purposes, to evidence only the right to receive the number of shares of WesBanco
Common Stock which the holder of such certificate is entitled to receive by
virtue of the Merger, and the payment in cash for any fractional share of
Commercial Common Stock which such holder 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 set forth above. The holder of an
unexchanged certificate will not be entitled to receive any dividends or other
distributions payable by WesBanco until the certificate has been exchanged.
Following such exchange such dividends or other distributions will be paid to
the holder
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entitled thereto, without interest, together with payment of cash for the
fractional share to which such holder is entitled.
WesBanco or the Exchange Agent will be entitled to deduct and withhold from
the consideration otherwise payable or issuable pursuant to the Merger Agreement
to any holder of Commercial Common Stock such amounts as WesBanco or the
Exchange Agent may be required to deduct and withhold with respect to the making
of such payment or issuance under the IRC, or any provision of state, local or
foreign tax law. To the extent that amounts are so withheld by WesBanco or the
Exchange Agent, such withheld amounts shall be treated as having been paid to
the holder of shares of Commercial Common Stock in respect of which such
deduction and withholding was made by WesBanco or the Exchange Agent.
Immediately upon the completion of the exchange of shares of Commercial
Common Stock for shares of WesBanco Common Stock as described in the preceding
paragraphs, the continuing Directors of Commercial or its subsidiaries who have
been elected to serve on the board of directors of one or more banking
subsidiaries of WesBanco will maintain at least the minimum number of shares of
WesBanco Common Stock as is required to be held as directors' qualifying shares
under applicable law for continued membership on the Board of Directors of
WesBanco or any of its subsidiaries.
REPRESENTATIONS AND WARRANTIES
The Merger Agreement contains various customary representations and
warranties of WesBanco, Commercial and CBI (which will terminate upon the
consummation of the Merger) relating to, among other things, (a) the corporate
organization and qualification of Commercial and its subsidiaries, WesBanco and
its subsidiaries and CBI and certain similar corporate matters; (b) the
authorization, execution, delivery and enforceability of the Merger Agreement
and the consummation of the transactions contemplated thereby and related
matters; (c) the absence of any violation under the respective charters and
bylaws of Commercial or WesBanco, as the case may be, and certain instruments
and laws; (d) the financial statements of each of WesBanco and Commercial; (e)
no actions, suits, claims or proceedings being brought against either Commercial
and its subsidiaries or WesBanco and its subsidiaries; (f) the capital structure
of each of WesBanco, CBI and Commercial; (g) material contracts; (h) the absence
of materially adverse contracts; (i) the absence of undisclosed liabilities; (j)
title to properties; (k) the accuracy of information provided in this Joint
Proxy Statement/Prospectus; (l) taxes, tax returns and audits and certain tax
matters; (m) the absence of certain material adverse changes or events; (n) the
maintenance of fidelity bonds by Commercial, WesBanco and their respective
subsidiaries; (o) certain benefit matters; (p) the absence of labor disputes;
(q) the adequacy of reserves for possible loan losses; (r) the ownership by
WesBanco and Commercial of their subsidiaries; (s) the filing and delivery of
certain Exchange Act reports; and (t) the authority of WesBanco to issue shares
of WesBanco Common Stock under the Merger Agreement.
CERTAIN COVENANTS
Pursuant to the Merger Agreement, each of WesBanco and Commercial has
agreed that, during the period from the date of the Merger Agreement until the
earlier of the termination of the Merger Agreement in accordance with its terms,
or the Effective Time, except as otherwise disclosed to the other party in
writing in connection with the Merger Agreement, or consented to in writing by
the other party, it will, with certain exceptions: (a) use its best efforts in
good faith to take, or cause to be taken, all action required under the Merger
Agreement on its part so as to permit the consummation of the Merger at the
earliest possible date; (b) deliver certain securities filings; (c) cooperate in
furnishing of information in preparation of this Joint Proxy
Statement/Prospectus; (d) cooperate in the filing of any regulatory
applications, including an application to the Federal Reserve Board and the West
Virginia Department of Banking, with respect to the Merger; (e) cooperate in
providing information with respect to the preparation and filing of this
Registration Statement; and (f) advise WesBanco or Commercial, as the case may
be, of any material adverse change in the financial condition, assets, business
or operation of the other party or its subsidiaries.
In addition, Commercial has further agreed that: (a) it will not make any
change in its authorized capital stock; (b) except for shares to be issued in
connection with a pending acquisition, it will not issue any shares of
Commercial Common Stock (see "Information With Respect to Commercial--Future
Acquisitions"); (c) it will not issue or grant any options, warrants or other
rights to purchase shares of Commercial Common Stock;
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(d) it will not declare or pay cash dividends other than those which do not in
the aggregate exceed the lesser of $1.20 per share per year or 50% of the
after-tax income of Commercial for such year; (e) it will not purchase, acquire
or agree to acquire for consideration, any Commercial Common Stock (other than
in a fiduciary capacity); (f) except as otherwise contemplated by the Merger
Agreement or required by law, it will not amend any employment agreement,
pension, retirement, stock option, profit sharing, deferred compensation,
consultant, bonus, group insurance or similar plan; (g) it will not take any
action materially adversely affecting the financial condition (present or
prospective) of it or its subsidiaries; (h) will not acquire or merge with any
other company or acquire any branch or, other than in the ordinary course of
business, any assets of any company; (i) except in the ordinary course of
business, it will not create any mortgage, pledge or subject any of its material
assets to a lien or other encumbrance, incur or cancel any material debts or
claims, increase any compensation or benefits payable to its officers or
employees, except in the ordinary course of its 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; (j) it will not amend its charter or bylaws; (k) it will
advise WesBanco of the name, address and the number of shares of Commercial
Common Stock held by each shareholder who elects to exercise his or her right to
dissent to the Merger; (l) operate its business only in the ordinary course
consistent with past practice; (m) it will not, and will not permit any person
acting on its behalf, to solicit any acquisition proposal or to merge or
consolidate with, or acquire all or any substantial portion of the assets of
Commercial or its subsidiaries, or any tender or exchange offer (or proposal to
make any tender or exchange offer) for any shares of stock of Commercial, or any
proposal to acquire more than 10% of the outstanding shares of stock of
Commercial or any options, warrants or rights to acquire, or securities
convertible into or exchangeable for, more than 10% of the outstanding shares of
stock of Commercial; (n) it will deliver to WesBanco all forms filed with the
Commission after the date of the Merger Agreement; and (o) it will maintain its
insurance at the existing levels.
WesBanco has also agreed that: (a) prior to the Effective Time, it will
deliver to the Exchange Agent, shares of WesBanco Common Stock and cash
sufficient in amount to meet the requirements of the Merger; (b) it will file
all documentation necessary to organize and incorporate CBI in West Virginia;
(c) it will deliver to Commercial copies of its Forms 10-K, 10-Q and 8-K filed
after the execution of the Merger Agreement; and (d) as of the Effective Time,
it will appoint (i) William E. Mildren, Jr., Robert K. Tebay, James W.
Swearingen and Larry G. Johnson, or if one or more of them should be unwilling
or unable to serve, a substitute, to the Board of Directors of WesBanco and (ii)
William E. Mildren, Jr. (or a designated substitute) as a member of the
Executive Committee of the Board of Directors of WesBanco.
CONDITIONS
The respective obligations of WesBanco and Commercial to effect the Merger
are subject to the following conditions, among others: (a) approval by the
shareholders of WesBanco, CBI and Commercial of the Merger Agreement as required
by law; (b) the West Virginia Banking Board shall have (i) approved the
organization and incorporation of CBI and the Merger and (ii) shall not have
entered an order disapproving the acquisition of Commercial by WesBanco pursuant
to the Merger Agreement; (c) the issuance of a charter by the West Virginia
Secretary of State for CBI; (d) the approval by the Board of Governors of the
Federal Reserve System of the application of WesBanco to acquire Commercial and
of CBI becoming a bank holding company; (e) the Registration Statement and any
post-effective amendments thereto shall have been declared effective and no stop
order or proceedings seeking a stop order shall have been issued or threatened;
(f) the absence of any order to restrain, enjoin or otherwise prevent the
consummation of the Merger shall have been entered by any court or
administrative body which remains in effect; (g) the receipt of all material
governmental or other authorizations, consents, orders or approvals, including
the filing of this Registration Statement with the Commission; (h) expiration of
all periods for review, objection or appeal of any consents, approvals or
permissions required for the consummation of the Merger; (i) the holders of no
more than 10% of the issued and outstanding voting shares of Commercial shall
have exercised dissenters' rights in accordance with the Act; (j) the receipt of
an opinion of Kirkpatrick & Lockhart, dated as of the Effective Time, to the
effect that the Merger will be treated for federal income tax purposes as a
tax-free reorganization within the meaning of Section 368(a) of the IRC and to
certain other tax matters; (k) no action, proceeding, regulation or legislation
shall have been instituted before any court, governmental agency or legislative
body to enjoin,
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restrain or prohibit, or to obtain substantial damages with respect to, this
Merger Agreement or the consummation of the Merger; (l) the approvals sought in
accordance with the Merger Agreement shall not have required any divestiture or
cessation of any material part of the present operations of WesBanco, Commercial
or any of their subsidiaries; (m) the accuracy in all material respects of the
representations and warranties of the other party set forth in the Merger
Agreement; (n) the delivery of certified copies of the resolutions duly adopted
by the Boards of Directors and shareholders of WesBanco and Commercial; and (o)
the receipt of certain legal opinions.
In addition, the consummation of the Merger Agreement by WesBanco is also
conditioned upon: (a) the receipt of an opinion from Ernst & Young, that the
Merger will be treated as a "pooling of interests" for accounting purposes; (b)
the receipt of a schedule identifying all persons who may be deemed "affiliates"
of Commercial under Rule 145 of the Securities Act and the delivery of affiliate
letters by such persons; (c) the execution and delivery of employment agreements
for William E. Mildren, Jr., Larry G. Johnson, W. Bryan Pennybacker, James A.
Meagle, Jr., Thomas M. Lookbaugh and C. Randall Law; (d) the absence of any
pending suit, action or proceeding, including the case styled Citizens
Bancshares, Inc. v. Commercial Bancshares, Inc. and the Complaint styled Peoples
Bancorp, Inc. v. Commercial Bancshares, Inc. which, in the reasonable judgment
of WesBanco, if successful, could have a material adverse effect on the
financial condition or operations of Commercial or its subsidiaries; provided,
however, that WesBanco shall not have the right to terminate the Merger
Agreement unless (i) WesBanco's Board of Directors, acting reasonably and upon
the advice of counsel, concludes that such suits could result in a loss exposure
to Commercial, including fees, expenses and damages of $250,000 or more, or (ii)
injunctive relief or specific performance has been awarded to Citizens or
Peoples or substantive requests for the same are pending, which injunctive
relief or specific performance, in the judgment of WesBanco's Board of
Directors, acting reasonably and upon the advice of counsel, could materially
hinder consummation of the Merger; (e) the delivery of the Option Agreement,
dated September 12, 1997, between WesBanco and Commercial; (f) the rights issued
under Commercial's Rights Plan shall have been terminated in accordance with the
terms of the Rights Plan, the right to exercise the rights and the Rights Plan
shall have been terminated in accordance with the provisions of such plan, with
no further obligations to the shareholders of Commercial, the rights and the
Rights Plan shall no longer be in force or effective, and no right or claim
pursuant to the Rights Plan shall have been made, alleged or threatened by any
shareholder of Commercial; and (g) the delivery by Gateway of the First
Amendment Agreement modifying certain terms of the Agreement and Plan of Merger
dated August 15, 1997 by and between Commercial, Gateway and CWV Holding
Company, Inc.
The consummation of the Merger Agreement by Commercial is also conditioned
upon: (a) the receipt of an opinion of Danielson Associates as to the effect
that the Merger and the transactions contemplated by the Merger Agreement are
fair from a financial point of view, to Commercial and its shareholders; (b) the
absence of a change in control of WesBanco since July 1, 1997; and (c) the
assumption by WesBanco of the Change in Control Arrangements with William E.
Mildren, Jr. and Larry G. Johnson dated November 1, 1996.
TERMINATION; EXPENSES
The Merger Agreement may be terminated at any time prior to the Effective
Time (a) by mutual consent of WesBanco and Commercial; (b) by either WesBanco or
Commercial if any of the conditions to such party's obligations to close under
the Merger Agreement have not been met and such conditions have not been waived
by the party adversely affected thereby; (c) by either WesBanco or Commercial if
the Merger shall violate any nonappealable final order, decree or judgment of
any court or governmental body having competent jurisdiction; (d) by either
WesBanco or Commercial if the Merger has not been consummated by March 31, 1998;
(e) by Commercial, unless waived by Commercial, if the market value of WesBanco
Common Stock falls below $25.00 per share as of the closing date, calculated as
the average bid price of WesBanco Common Stock quoted by Nasdaq for the 30
calendar days preceding five business days before the closing date; and (f) by
either WesBanco or Commercial, if at the Commercial Special Meeting or WesBanco
Special Meeting (including any adjournment or postponement thereof), the
requisite vote of the shareholders of either WesBanco or Commercial in favor of
the Merger Agreement is not obtained.
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<PAGE> 45
In the event of any termination of the Merger Agreement by either WesBanco
or Commercial as provided above, the Merger Agreement will become void and there
will be no liability or obligation on the part of WesBanco, Commercial, CBI or
their respective officers, directors, stockholders or affiliates, except with
respect to certain specified matters, including without limitation, those
related to confidentiality and expenses.
Whether or not the Merger is consummated, all legal and accounting fees,
and other costs and expenses incurred in connection with the Merger Agreement
and the transactions contemplated thereby shall be paid by the party incurring
such expenses.
AMENDMENT OR WAIVER
The provisions of the Merger Agreement may be waived at any time by the
party which, or the shareholders of which are, entitled to the benefit thereof,
by action taken by the Board of Directors of such party. Any of the terms or
conditions of the Merger Agreement may be amended or modified in writing (signed
by all the parties to the Merger Agreement) before or after the Commercial
Special Meeting at any time prior to the Effective Time, provided, however, that
if amended after such meeting, the conversion ratio per share at which each
share of Commercial Common Stock will be converted in the Merger and any other
material terms of the Merger shall not be amended unless the amended terms are
resubmitted to the shareholders of Commercial for approval.
THE OPTION AGREEMENT
Following is a summary of the Option Agreement. Such summary is qualified
in its entirety by reference to the Option Agreement which is attached to this
Joint Proxy Statement/Prospectus as Appendix II and is incorporated by reference
herein in its entirety.
In connection with the execution of the letter of intent, WesBanco and
Commercial entered into the Option Agreement.
The Option Agreement provides for the purchase by WesBanco of up to 321,620
shares of Commercial Common Stock (the "Option") at an exercise price of $50.00
per share (the "Option Price"); provided, however, that in the event Commercial
issues or agrees to issue any shares of Commercial Common Stock (other than in
certain circumstances) at a price less than $50.00 per share, the exercise price
shall be equal to such lesser price. In the event of any change in Commercial
Common Stock by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, exchanges of shares or the like, the type and
number of shares subject to the Option, and/or the purchase price per share,
shall be adjusted appropriately. Also, in the event that any additional shares
of Commercial Common Stock are issued or otherwise become outstanding after the
date of the Option Agreement (other than pursuant to the Option Agreement), the
number of shares of Commercial Common Stock subject to the Option shall be
adjusted so that, after such issuance, it equals 19.9% of the number of shares
of Commercial Common Stock then issued and outstanding without giving effect to
any shares subject or issued pursuant to the Option.
WesBanco may exercise the Option only upon the occurrence of certain events
(each, a "Purchase Event"). The Option Agreement provides that a Purchase Event
shall mean the occurrence of any of the following events after the date of
execution of the Option Agreement: (i) any person (other than WesBanco, an
affiliate thereof, Commercial or any Commercial subsidiary) shall have commenced
a bona fide tender or exchange offer to purchase shares of Commercial Common
Stock such that upon consummation of such offer such person would own or control
15% or more of the outstanding shares of Commercial Common Stock; (ii) any
person (other than Commercial or any Commercial subsidiary), other than in
connection with a transaction to which WesBanco has given its prior written
consent, shall have filed an application or notice with any federal or state
regulatory agency for clearance or approval, to (x) merge, consolidate or enter
into any similar transaction with Commercial or any of its subsidiaries, (y)
purchase, lease or otherwise acquire all or substantially all of the assets of
Commercial or any of its subsidiaries, or (z) purchase or otherwise acquire
(including by way of merger, consolidation, share exchange or any similar
transaction) securities representing 51% or more of the voting power of
Commercial or any of its subsidiaries; (iii) any other person (other than
WesBanco, an affiliate thereof, Commercial, any subsidiary thereof, or any
WesBanco subsidiary or Commercial subsidiary in a fiduciary capacity) shall have
acquired beneficial ownership or the right to acquire
40
<PAGE> 46
beneficial ownership of 15% or more of the outstanding shares of Commercial
Common Stock; (iv) any person (other than Commercial or any of its subsidiaries)
shall have made a bona fide proposal to Commercial by public announcement or
written communication that is or becomes the subject of public disclosure to (x)
acquire Commercial or any of its subsidiaries by merger, consolidation, purchase
of all or substantially all of its assets or any other similar transaction, or
(y) make an offer described in clause (i) above; or (v) Commercial shall have
willfully breached Section 7.21(d) of the Merger Agreement which breach would
entitle WesBanco to terminate the Merger Agreement and such breach shall not
have been cured prior to the date on which WesBanco shall notify Commercial of
its intent to exercise the Option.
The Option may be exercised in whole or in part, at one or more closings,
and may be exercised at any time if a Purchase Event shall have occurred and be
continuing and before the Option Agreement is terminated. The Option Agreement
provides that to the extent that it shall have not been exercised, the Option
shall terminate (a) on the effective date of the Merger; (b) upon the
termination of the Merger Agreement in accordance with the respective provisions
thereof (other than a termination resulting from a willful breach by Commercial
of Section 7.21(d) of the Merger Agreement or following the occurrence of a
Purchase Event, failure of Commercial's shareholders to approve the Merger
Agreement by the vote required under applicable law); or (c) six months after
termination of the Merger Agreement due to a willful breach by Commercial of
Section 7.21(d) of the Merger Agreement or, following the occurrence of a
Purchase Event, failure of Commercial's shareholders to approve the Merger
Agreement by the vote required under applicable law.
If at any time during the 18 months immediately following the first
purchase of shares of Commercial Common Stock pursuant to the Option, WesBanco
desires to sell, assign, transfer or otherwise dispose of all or any of the
shares of Commercial Common Stock acquired by it pursuant to the Option, it will
offer Commercial an opportunity to purchase such shares on the same terms and
conditions and at the same price at which WesBanco is proposing to transfer such
shares to a third party, subject to the provisions and exceptions set forth in
the Option Agreement.
Upon the consummation of a Purchase Event such that (i) a merger,
consolidation, purchase, lease or acquisition of all or substantially all of the
assets of Commercial, purchase or other acquisition of securities representing
51% or more of the voting power of Commercial or any subsidiary of Commercial
has been consummated, or (ii) a willful breach under Section 7.21(d) of the
Merger Agreement has occurred so that WesBanco would be entitled to terminate
such agreement, and prior to the expiration of the Option in accordance with the
terms of the Option Agreement, at the request of WesBanco, Commercial shall
repurchase the Option from WesBanco at a price equal to the difference between
the market/offer price (as defined in the Option Agreement) for shares of
Commercial Common Stock and the Option Price, multiplied by the number of shares
for which the Option being surrendered hereunder may then be exercised but only
if the market/offer price is greater than the Option Price.
The Option Agreement provides that at the request of WesBanco, Commercial
will file a registration statement in order to permit the sale or other
disposition of the shares of Commercial Common Stock that have been acquired
upon exercise of the Option with the intended method of sale or other
disposition requested by WesBanco. Commercial will use its best efforts to cause
such registration statement first to become effective and then to remain
effective for such period not in excess of 270 days from the day such
registration statement first becomes effective as may be reasonably necessary to
effect such sales or other dispositions.
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 February 2, 1998, there were
approximately 4,397 holders of record of WesBanco Common Stock. Of the
25,000,000 shares of authorized common stock, 15,982,960 shares were issued and
outstanding as of February 2, 1998. For a description of
41
<PAGE> 47
WesBanco dividend rights, see "Comparative Stock Prices and Dividends--WesBanco
Common Stock Dividend Policy".
As of February 2, 1998, 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 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 WesBanco Common Stock.
Subject to the above limitations, in the event of any liquidation,
dissolution or winding up of WesBanco, and subject to the application of state
and federal laws, holders of WesBanco Common Stock are entitled to share ratably
in the assets available for distribution to stockholders remaining after payment
of 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 Commercial
Shareholders."
DESCRIPTION OF COMMERCIAL CAPITAL STOCK
The authorized capital stock of Commercial consists of 5,000,000 shares of
Common Stock, par value of $5.00 per share. As of February 2, 1998, Commercial
has authorized 43,328 shares of cumulative $100 preferred stock, none of which
has been issued. The shares of Commercial Common Stock now outstanding are fully
paid and nonassessable. As of February 5, 1998, there were approximately 1,115
holders of record of Commercial Common Stock with 1,616,187 shares issued and
outstanding.
Each share of Commercial Common Stock is entitled to one vote and to
cumulate votes in the election of directors. No holder of shares of Commercial
Common Stock has any preemptive right to subscribe for or purchase any other
securities of Commercial, and there are no conversion rights or redemption or
sinking fund provisions applicable to Commercial Common Stock.
Dividends may be paid on Commercial Common Stock at the discretion of
Commercial's Board of Directors out of any funds legally available therefore.
For a discussion of Commercial's dividend policy and restrictions on the payment
of dividends see "The Merger--Commercial Dividend Policy."
In the event of liquidation or dissolution of Commercial, either voluntary
or involuntary, the holders of Commercial Common Stock are entitled to receive
pro rata, subject to the application of state and federal laws, such net assets
of Commercial 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 Commercial, 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 Commercial Common Stock will be entitled to share
ratably in the assets of Commercial available for distributions to its
shareholders remaining after payment of the corporation's obligations.
On August 14, 1996, the Board of Directors of Commercial, declared a
dividend distribution of one Right for each outstanding share of Commercial
Common Stock to shareholders of record at the close of business on August 30,
1996 (the "Record Date"). Each Right entitles the registered holder to purchase
from Commercial 1/1000 of a share of a new series of preferred stock designated
"Junior Participating Cumulative
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<PAGE> 48
Preferred Stock, Series A" . Shareholders received one Right per share of Common
Stock held of record at the close of business on the Record Date. The exercise
price of each Right will be $116, subject to adjustment.
Rights also attach to shares of Common Stock issued after the Record Date
but prior to the Distribution Date unless the Board of Directors determines
otherwise at the time of issuance. The description and terms of the Rights are
set forth in a Rights Agreement, dated as of August 14, 1996, between the
Company and Fifth Third Bank, as Rights Agent.
The Board of Directors redeemed Rights outstanding under its Rights
Agreement at a meeting thereof held on September 19, 1997 at a cash redemption
price of $0.01 per Right. Payment of the $0.01 per Right redemption price was
made with the regular quarterly cash dividend paid on Commercial Common Stock on
December 12, 1997.
COMPARISON OF RIGHTS OF WESBANCO AND COMMERCIAL SHAREHOLDERS
The rights of the Commercial 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 Commercial
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 pro rata any assets distributed to shareholders upon liquidation. The
affirmative vote of the holders of the majority of the outstanding shares of
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 pro rata 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 "The Merger--Rights of Dissenting
Shareholders."
(I) DIFFERENCES IN RIGHTS:
There are, however, differences between the rights of Commercial
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. Commercial'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 Commercial are elected annually, each to serve for a term of one
year.
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.
Commercial'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 of Directors might determine are not in the best
interests of WesBanco and its shareholders. The provisions are designed as
reasonable precautions to protect against, and to assure the opportunity to
assess and evaluate such confrontations.
(III) DISADVANTAGES OF WESBANCO ANTI-TAKEOVER PROVISIONS:
The classification of the Board of Directors makes it more difficult to
change Directors since they are elected for terms of three years rather than one
year, and at least two annual meetings instead of one are required to change a
majority of the Board of Directors. Furthermore, due to the smaller number of
Directors to be elected at each annual meeting, holders of a minority of the
voting stock may be in a less favorable position to elect Directors through the
use of cumulative voting. The super majority provision makes it more
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<PAGE> 49
difficult for shareholders to effect changes in the classification of Directors.
The ability of the Board of Directors to issue additional shares of common and
preferred stock also permits the Board of Directors to authorize issuances of
stock which may be dilutive and, in the case of preferred stock, which may
affect the substantive rights of shareholders without requiring an additional
shareholder vote. 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 Commercial shareholders is not intended to indicate that
other equally or more significant differences do not exist. This summary is
qualified in its entirety by reference to the West Virginia Corporation Act and
the articles and bylaws of WesBanco and Commercial.
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<PAGE> 50
PRO FORMA FINANCIAL DATA
CERTAIN INFORMATION ABOUT THE UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL
DATA
The following unaudited pro forma combined balance sheets as of September
30, 1997 and the pro forma combined statements of income for the nine months
ended September 30, 1997 and 1996 and the years ended December 31, 1996, 1995
and 1994 of WesBanco and Commercial, are presented on the following pages, after
giving effect to the Merger.
The Merger will be accounted for using the pooling of interests method of
accounting. Under this method, the historical financial statements are combined
for all periods presented. The unaudited pro forma financial statements were
prepared as if the combination became effective on January 1 of the earliest
year presented, January 1, 1994, and are for informational purposes only. These
pro forma financial 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. This information should be
read in conjunction with other financial information presented herein and the
separate historical financial statements, including the notes thereto, of
WesBanco and Commercial incorporated by reference herein. See "Incorporation of
Certain Documents by Reference".
On August 15, 1997, Commercial executed a definitive agreement to acquire
Gateway. As of September 30, 1997, Gateway reported total assets of
approximately $31 million, which represented 1.4% of the pro forma combined
total assets of WesBanco and Commercial. Gateway is considered immaterial to the
transaction between WesBanco and Commercial, and therefore has not been included
in the pro forma combined analysis.
Per share data for WesBanco has been restated for a 3 for 2 stock split
effected in the form of a 50% stock dividend paid August 1, 1997. Per share data
for Commercial has been restated for a 10% stock dividend paid March 14, 1997.
Earnings per share were computed by dividing net income, less preferred stock
dividends and accretion where applicable, by the weighted average number of
common shares outstanding during each period.
Expenses relating to the acquisition of Commercial are estimated within a
range of $650,000 to $750,000.
45
<PAGE> 51
WESBANCO, INC.
PRO FORMA COMBINED BALANCE SHEET
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
SEPTEMBER 30, 1997
-------------------------------------------------------------------------
COMMERCIAL ADJUSTMENTS PROFORMA
BANCSHARES, ------------------- COMBINED
WESBANCO, INC. INCORPORATED DEBIT CREDIT WESBANCO, INC.
--------------- ---------- ------ ------ ---------------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks............. $ 55,520 $ 16,606 $ 72,126
Due from banks--interest bearing.... 198 1,119 1,317
---------- --------- ------ ------ ----------
Total cash and due from banks... 55,718 17,725 -- -- 73,443
Federal funds sold.................. 48,600 9,960 58,560
Available for sale securities....... 318,794 48,965 $ 326(b) 367,433
Held to maturity securities......... 233,739 23,877 257,616
---------- --------- ------ ------ ----------
Total securities................ 552,533 72,842 -- 326 625,049
Loans held for sale................. 13,991 -- 13,991
Loans, net of unearned income....... 1,028,475 306,747 1,335,222
Allowance for loan losses........... (15,522) (3,829) (19,351)
---------- --------- ------ ------ ----------
Net loans....................... 1,012,953 302,918 -- -- 1,315,871
Bank premises and equipment......... 34,480 10,431 44,911
Other assets........................ 44,136 11,288 55,424
---------- --------- ------ ------ ----------
TOTAL ASSETS.................... $ 1,762,411 $ 425,164 $ -- $ 326 $ 2,187,249
========== ========= ====== ====== ==========
LIABILITIES
Non interest bearing deposits....... $ 162,141 $ 47,235 $ 209,376
Interest bearing deposits........... 1,229,925 319,577 1,549,502
---------- --------- ------ ------ ----------
Total deposits.................. 1,392,066 366,812 -- -- 1,758,878
Other borrowings.................... 105,062 10,384 115,446
---------- --------- ------ ------ ----------
Total interest bearing
liabilities.................. 1,497,128 377,196 -- -- 1,874,324
Other liabilities................... 18,705 4,668 $ 60(b) 23,313
---------- --------- ------ ------ ----------
TOTAL LIABILITIES............... 1,515,833 381,864 60 -- 1,897,637
SHAREHOLDERS' EQUITY
Preferred stock..................... -- -- --
Common stock........................ 33,484 8,081 25(b) $1,515(a) 43,055
Capital surplus..................... 44,536 15,114 1,515(a)
151(b) 57,984
Retained earnings................... 166,784 19,842 186,626
Treasury stock...................... (208) -- (208)
Market value adjustment on
securities available for sale--net
of tax effect..................... 2,999 263 90(b) 3,172
Deferred director and employee
benefits.......................... (1,017) -- (1,017)
---------- --------- ------ ------ ----------
TOTAL SHAREHOLDERS' EQUITY...... 246,578 43,300 1,781 1,515 289,612
---------- --------- ------ ------ ----------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY......... $ 1,762,411 $ 425,164 $1,841 $1,515 $ 2,187,249
========== ========= ====== ====== ==========
Book value per share................ $ 15.35 $ 26.79 $ 14.02
Shares outstanding.................. 16,064,449 1,616,187 20,658,584
</TABLE>
SEE NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
46
<PAGE> 52
WESBANCO, INC.
PRO FORMA COMBINED BALANCE SHEET
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE NINE MONTHS ENDED
----------------------------------------------------------------------------------------------------
SEPTEMBER 30, 1997 SEPTEMBER 30, 1996
----------------------------------------------------------------------------------------------------
COMMERCIAL PROFORMA COMMERCIAL PROFORMA
BANCSHARES, COMBINED BANCSHARES, COMBINED
WESBANCO, INC. INCORPORATED WESBANCO, INC. WESBANCO, INC. INCORPORATED WESBANCO, INC.
--------------- ---------- --------------- --------------- ---------- ---------------
<S> <C> <C> <C> <C> <C> <C>
INTEREST INCOME
Interest and fees
on loans......... $ 67,411 $ 20,877 $ 88,288 $ 60,046 $ 19,182 $ 79,228
Interest on
securities....... 23,249 3,533 26,782 22,305 3,934 26,239
Interest on federal
funds sold....... 1,648 397 2,045 1,293 252 1,545
----------- ---------- ----------- ----------- ---------- -----------
Total interest
income....... 92,308 24,807 117,115 83,644 23,368 107,012
INTEREST EXPENSE
Interest on
deposits......... 37,728 10,180 47,908 33,010 9,712 42,722
Interest on other
borrowings....... 3,244 360 3,604 2,713 206 2,919
----------- ---------- ----------- ----------- ---------- -----------
Total interest
expense...... 40,972 10,540 51,512 35,723 9,918 45,641
NET INTEREST
INCOME........... 51,336 14,267 65,603 47,921 13,450 61,371
Provision for loan
losses........... 2,864 372 3,236 2,848 358 3,206
----------- ---------- ----------- ----------- ---------- -----------
NET INTEREST INCOME
AFTER PROVISION
FOR LOAN
LOSSES........... 48,472 13,895 62,367 45,073 13,092 58,165
OTHER INCOME
Trust fees......... 4,985 622 5,607 4,039 558 4,597
Service charges and
other income..... 5,264 1,605 6,869 4,713 1,932 6,645
Net security
transaction gains
(losses)......... 162 (2) 160 (51) 23 (28)
----------- ---------- ----------- ----------- ---------- -----------
Total other
income....... 10,411 2,225 12,636 8,701 2,513 11,214
OTHER EXPENSE
Salaries, wages and
benefits......... 19,037 6,060 25,097 17,406 5,856 23,262
Premise and
equipment, net... 5,315 1,491 6,806 4,354 1,338 5,692
Other operating.... 11,280 3,147 14,427 9,686 3,391 13,077
----------- ---------- ----------- ----------- ---------- -----------
Total other
expense...... 35,632 10,698 46,330 31,446 10,585 42,031
Income before
income taxes..... 23,251 5,422 28,673 22,328 5,020 27,348
Provision for
income taxes..... 6,160 1,813 7,973 6,255 1,676 7,931
----------- ---------- ----------- ----------- ---------- -----------
NET INCOME......... $ 17,091 $ 3,609 $ 20,700 $ 16,073 $ 3,344 $ 19,417
=========== ========== =========== =========== ========== ===========
Earnings per
share............ $ 1.08 $ 2.23 $ 1.01 $ 1.06 $ 2.07 $ 0.98
Average shares
outstanding...... 15,809,965 1,616,187 20,416,098 15,279,684 1,616,187 19,885,817
</TABLE>
SEE NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
47
<PAGE> 53
WESBANCO, INC.
PRO FORMA COMBINED STATEMENTS OF INCOME
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1996
-------------------------------------------------------
COMMERCIAL PROFORMA
BANCSHARES, COMBINED
WESBANCO, INC. INCORPORATED WESBANCO, INC.
--------------- ----------------- ---------------
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans....................... $ 81,449 $ 25,979 $ 107,428
Interest on securities........................... 29,708 5,115 34,823
Interest on federal funds sold................... 1,781 351 2,132
---------- --------- ------
Total interest income....................... 112,938 31,445 144,383
INTEREST EXPENSE
Interest on deposits............................. 44,432 13,080 57,512
Interest on other borrowings..................... 3,786 314 4,100
---------- --------- ------
Total interest expense...................... 48,218 13,394 61,612
NET INTEREST INCOME.............................. 64,720 18,051 82,771
Provision for loan losses........................ 4,336 459 4,795
---------- --------- ------
NET INTEREST INCOME AFTER PROVISION FOR LOAN
LOSSES......................................... 60,384 17,592 77,976
OTHER INCOME
Trust fees....................................... 5,442 738 6,180
Service charges and other income................. 6,592 2,620 9,212
Net security transaction gains................... 239 26 265
---------- --------- ------
Total other income.......................... 12,273 3,384 15,657
OTHER EXPENSE
Salaries, wages and benefits..................... 23,610 7,732 31,342
Premise and equipment, net....................... 5,786 1,793 7,579
Other operating.................................. 13,756 4,366 18,122
---------- --------- ------
Total other expense......................... 43,152 13,891 57,043
Income before income taxes....................... 29,505 7,085 36,590
Provision for income taxes....................... 8,344 2,304 10,648
---------- --------- ------
NET INCOME....................................... $ 21,161 $ 4,781 $ 25,942
========== ========= ======
Earnings per share............................... $ 1.39 $ 2.96 $ 1.31
Average shares outstanding....................... 15,253,107 1,616,187 19,859,240
</TABLE>
SEE NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
48
<PAGE> 54
WESBANCO, INC.
PRO FORMA COMBINED STATEMENTS OF INCOME
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1995
-------------------------------------------------------
COMMERCIAL PROFORMA
BANCSHARES, COMBINED
WESBANCO, INC. INCORPORATED WESBANCO, INC.
--------------- ----------------- ---------------
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans....................... $ 74,452 $ 24,609 $ 99,061
Interest on securities........................... 31,138 5,243 36,381
Interest on federal funds sold................... 2,492 573 3,065
---------- --------- ------
Total interest income....................... 108,082 30,425 138,507
INTEREST EXPENSE
Interest on deposits............................. 43,403 12,161 55,564
Interest on other borrowings..................... 3,167 391 3,558
---------- --------- ------
Total interest expense...................... 46,570 12,552 59,122
NET INTEREST INCOME.............................. 61,512 17,873 79,385
Provision for loan losses........................ 2,788 418 3,206
---------- --------- ------
NET INTEREST INCOME AFTER PROVISION FOR LOAN
LOSSES......................................... 58,724 17,455 76,179
OTHER INCOME
Trust fees....................................... 4,716 684 5,400
Service charges and other income................. 6,213 2,336 8,549
Net security transaction gains (losses).......... 437 (1) 436
---------- --------- ------
Total other income.......................... 11,366 3,019 14,385
OTHER EXPENSE
Salaries, wages and benefits..................... 23,217 7,486 30,703
Premise and equipment, net....................... 5,133 1,904 7,037
Other operating.................................. 13,780 4,163 17,943
---------- --------- ------
Total other expense......................... 42,130 13,553 55,683
Income before income taxes....................... 27,960 6,921 34,881
Provision for income taxes....................... 7,656 2,176 9,832
---------- --------- ------
NET INCOME....................................... $ 20,304 $ 4,745 $ 25,049
========== ========= ======
Earnings per share............................... $ 1.32 $ 2.95 $ 1.26
Average shares outstanding....................... 15,240,492 1,608,847 19,825,706
</TABLE>
SEE NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
49
<PAGE> 55
WESBANCO, INC.
PRO FORMA COMBINED STATEMENTS OF INCOME
(UNAUDITED, DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
FOR THE YEAR ENDED DECEMBER 31, 1994
-------------------------------------------------------
COMMERCIAL PROFORMA
BANCSHARES, COMBINED
WESBANCO, INC. INCORPORATED WESBANCO, INC.
--------------- ----------------- ---------------
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans....................... $ 64,906 $ 21,777 $ 86,683
Interest on securities........................... 34,776 4,894 39,670
Interest on federal funds sold................... 2,038 262 2,300
---------- --------- ------
Total interest income....................... 101,720 26,933 128,653
INTEREST EXPENSE
Interest on deposits............................. 37,703 9,370 47,073
Interest on other borrowings..................... 1,957 251 2,208
---------- --------- ------
Total interest expense...................... 39,660 9,621 49,281
NET INTEREST INCOME.............................. 62,060 17,312 79,372
Provision for loan losses........................ 6,073 417 6,490
---------- --------- ------
NET INTEREST INCOME AFTER PROVISION FOR LOAN
LOSSES......................................... 55,987 16,895 72,882
OTHER INCOME
Trust fees....................................... 4,425 529 4,954
Service charges and other income................. 6,237 1,706 7,943
Net security transaction gains (losses).......... 366 (220) 146
---------- --------- ------
Total other income.......................... 11,028 2,015 13,043
OTHER EXPENSE
Salaries, wages and benefits..................... 23,260 7,000 30,260
Premise and equipment, net....................... 5,006 1,630 6,636
Other operating.................................. 14,574 4,356 18,930
---------- --------- ------
Total other expense......................... 42,840 12,986 55,826
Income before income taxes....................... 24,175 5,924 30,099
Provision for income taxes....................... 6,283 1,526 7,809
---------- --------- ------
NET INCOME....................................... $ 17,892 $ 4,398 $ 22,290
========== ========= ======
Earnings per share............................... $ 1.15 $ 2.97 $ 1.13
Average shares outstanding....................... 15,421,317 1,410,417 19,441,005
</TABLE>
SEE NOTES TO PRO FORMA COMBINED FINANCIAL STATEMENTS
50
<PAGE> 56
NOTES TO PRO FORMA CONSOLIDATED FINANCIAL INFORMATION
The pro forma combined balance sheets include adjustments for:
(a) Issuance of 4,606,133 shares of WesBanco common stock at par value of
$2.0833 and the related adjustment to capital surplus.
(b) Retirement of 4,210 shares of Commercial common stock held by WesBanco
in its securities available for sale portfolio and the related adjustments to
shareholders' equity and deferred taxes.
There were no significant intercompany transactions or adjustments to the
pro forma combined statements of income.
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<PAGE> 57
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 September 30, 1997, 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
September 30, 1997, WesBanco had total assets of approximately $1.76 billion,
net loans of approximately $1.0 billion, deposits of approximately $1.4 billion
and shareholders' equity of $247 million. As of February 2, 1998, WesBanco had
approximately 4,397 shareholders, and 15,982,960 shares of common stock
outstanding. WesBanco has no preferred stock issued and outstanding.
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 September 30, 1997, the
affiliates, without prior approval from the regulators, could have distributed
dividends of approximately $1,332,000. WesBanco has not issued debt securities
as a source of funding for the assets of the affiliate banks.
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 September 30, 1997, 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 June 30, 1997, WesBanco, Inc. consummated the acquisition of Shawnee
Bank, Inc. ("Shawnee") through a statutory merger of Shawnee into WesBanco
affiliate, WesBanco Bank Charleston. The acquisition, which was accounted for as
a purchase transaction, was effected through an exchange of stock, whereby
Shawnee shareholders received 10.094 shares of WesBanco Common Stock for each
share of Shawnee common stock. WesBanco registered 323,506 common shares for the
purpose of issuance with respect to this acquisition. For the twelve months
ended December 31, 1996, Shawnee's net income was $553,269 or $17.28 per share.
Shawnee's total assets were approximately $38,939,000 total deposits were
approximately $29,676,000, and total stockholders' equity was approximately
$5,501,000.
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; and discount brokerage
services. 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.
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<PAGE> 58
WesBanco Bank Wheeling (formerly Wheeling Dollar Bank), a state banking
corporation is the largest banking subsidiary of WesBanco. 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 419 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 $1.9 Billion as of September 30, 1997. As of
September 30, 1997, the Bank had total assets of $869,220,000, and deposits of
$650,267,000. 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 Charleston (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 September
30, 1997, the bank had total assets of approximately $145,627,000 deposits of
approximately $117,454,000 and 62 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 September 30, 1997,
the bank had approximately $121,131,000 in assets, $107,079,000 in deposits, and
67 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 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 September 30, 1997, the bank had approximately $155,315,000 in
assets and $134,862,000 in deposits, and 65 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
September 30, 1997, the bank had approximately $489,446,000 in assets and
$390,739,000 in deposits and 253 full-time employees.
WesBanco Mortgage Company is primarily a single residence mortgage lender
with business operations in Bridgeport, South Charleston, Morgantown, Wheeling,
Huntington and Elkins, West Virginia. WesBanco Mortgage Company offers Veterans
Administration and Federal Housing Administration Home Loans, as well as home
buyer loans facilitated through the West Virginia Housing Development Fund,
which provides assistance for low-to-moderate income families. Loan
originations, which are sold in various secondary markets, will approximate $60
million for the year 1997.
COMPETITION
The Bank Holding Company 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
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<PAGE> 59
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 Wesbanco Common Stock. As of February 2,
1998, 1,352,374 shares of Wesbanco Common Stock, representing 8.46% of the
shares outstanding, were held in various capacities in the Trust Department. Of
these shares, the Bank does not have voting control of 288,054 shares,
representing 1.80% of the shares outstanding, has partial voting control of
36,280 shares, representing 0.22% of the shares outstanding, and sole voting
control of 1,028,039 shares, representing 6.43% of the shares outstanding. In
accordance with its general practice, shares of Wesbanco Common Stock 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 Common Stock as of February 2,
1998, as more fully described above:
PRINCIPAL HOLDERS
<TABLE>
<CAPTION>
NAME & AMOUNT AND NATURE
TITLE ADDRESS OF OF BENEFICIAL PERCENT
CLASS BENEFICIAL OWNER OWNERSHIP OF CLASS
--------- ------------------------ ----------------- --------
<S> <C> <C> <C>
Common WesBanco Bank 1,352,374* 8.46%
Wheeling Trust Dept.
Bank Plaza
Wheeling, WV 26003
</TABLE>
- ---------
* 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 shares held by them as a result of the Merger; however, their percentage
ownership will decrease. Based on stock ownership as of February 2, 1998, and
assuming a total of 20,921,650 shares of WesBanco Common Stock outstanding
immediately after the Merger, the Trust Department of WesBanco Bank Wheeling
would own 6.46%, with sole voting and investment power over 4.91% and 0.17% with
shared power. Directors and officers, as a group, would beneficially hold 3.29%
or more of the outstanding WesBanco Common Stock. For stock ownership of
WesBanco directors and officers see WesBanco's 1997 Definitive Proxy Statement
filed pursuant to
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<PAGE> 60
Section 14(a) of the Securities Exchange Act of 1934, filed on March 14, 1997,
incorporated herein by reference. See "Incorporation of Certain Documents by
Reference."
WESBANCO KSOP
The information with respect to WesBanco's KSOP is set forth in WesBanco's
Proxy Statement filed pursuant to Section 14(a) of the Securities Act of 1934,
filed on March 14, 1997, and is incorporated herein by reference. See
"Incorporation of Certain Documents by Reference."
DIRECTORS AND EXECUTIVE OFFICERS
The information with respect to directors and executive officers of
WesBanco is set forth in WesBanco's Proxy Statement filed pursuant to Section
14(a) of the Securities Act of 1934, filed on March 14, 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
WesBanco's Proxy Statement filed pursuant to Section 14(a) of the Securities Act
of 1934, filed on March 14, 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 WesBanco's Proxy Statement filed pursuant to
Section 14(a) of the Securities Act of 1934, filed on March 14, 1997, and is
incorporated herein by reference. See "Incorporation of Certain Documents by
Reference."
GOVERNMENT REGULATION
The information with respect to government regulation of WesBanco is set
forth in Wesbanco's Annual Report on Form 10-K (as amended by Form 10-K/A dated
May 8, 1997), and is incorporated herein by reference. See "Incorporation of
Certain Documents by Reference."
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<PAGE> 61
INFORMATION WITH RESPECT TO COMMERCIAL
HISTORY
The management of Commercial Banking and Trust Company ("CB&T") of
Parkersburg, West Virginia, caused Commercial to be formed in 1982 to provide
greater flexibility in meeting CB&T's capital requirements and to permit future
acquisition and ownership of bank-related businesses and the pursuit of other
bank-related activities not permitted CB&T under applicable law. On October 28,
1983, the shareholders of CB&T became shareholders of Commercial and CB&T became
a wholly-owned subsidiary of Commercial.
On January 29, 1985, shareholders of Jackson County Bank, Ravenswood, West
Virginia ("Jackson") approved an agreement and plan of merger pursuant to which
Jackson would merge into a wholly-owned subsidiary of Commercial and thereby
become a wholly-owned subsidiary of Commercial. The transaction was finalized
March 1, 1985.
On May 15, 1987, shareholders of Farmers and Merchants Bank of Ritchie
County ("F&M") (formerly Farmers and Merchants Bank of Cairo), Harrisville, West
Virginia, approved an agreement and plan of merger pursuant to which F&M would
merge into a wholly-owned subsidiary of Commercial and thereby become a
wholly-owned subsidiary of Commercial. The transaction was finalized November
30, 1987.
On March 21, 1991, shareholders of The Dime Bank, Marietta, Ohio approved
an agreement and plan of merger pursuant to which The Dime Bank would merge into
a wholly-owned subsidiary of Commercial and thereby become a wholly-owned
subsidiary of Commercial. The transaction was finalized February 28, 1992.
On June 7, 1994, shareholders of Hometown Bancshares, Inc., ("Hometown")
approved an agreement and plan of merger pursuant to which Hometown would merge
with Commercial. Commercial would be the surviving corporation and the former
subsidiaries of Hometown (The Union Bank of Tyler County, The Community Bank,
the Bank of Paden City, and Hometown Insurance Inc.) would become wholly-owned
subsidiaries of Commercial. The transaction was finalized August 1, 1994.
PENDING ACQUISITION
On August 15, 1997, Commercial and Gateway entered into a definitive
agreement whereby Gateway will become a wholly-owned subsidiary of Commercial.
The agreement has been approved by the boards of directors of both companies and
is subject to the approval of Gateway's shareholders and appropriate regulatory
agencies. The merger is expected to close by March 9, 1998.
Gateway, a $30 million bank holding company, is the parent of The Bank of
McMechen, a state-chartered bank that operates offices in McMechen and Benwood
in Marshall County, West Virginia. Its full-service offices provide complete
banking service to individuals and small businesses in its trade area. The
transaction will allow Commercial to expand its presence into the northern
panhandle of West Virginia. The acquisition of Gateway will give Commercial a
retail network of 18 banking offices, in one Ohio and seven West Virginia
counties. The combined total assets will be $450 million, with total deposits of
$387 million. See Commercial's Form 8-K dated August 19, 1997, which is
incorporated by reference in its entirety, for a more detailed description of
Commercial's acquisition of Gateway.
The agreement with Gateway will be structured as a pooling of interests,
and provides for a tax free exchange of Commercial common shares for Gateway
common shares at a value of $80 per share of Gateway, or a purchase price of
$5.3 million. The exchange ratio will be a minimum of 1.742 and a maximum of
2.129 shares of Commercial. The acquisition of Gateway will not represent a
significant acquisition for accounting purposes.
OPERATIONS
Commercial is the parent company of seven community banks with 17 banking
locations in Wood, Jackson, Ritchie, Wetzel and Tyler Counties in West Virginia
and in Washington County, Ohio. Its subsidiaries include CB&T, Jackson, F&M, The
Dime Bank, Union Bank of Tyler County, The Community Bank, Bank of Paden City,
Hometown Finance Company, Hometown Insurance Agency, Inc. and
56
<PAGE> 62
CommBanc Investments, Inc. Commercial has also recently executed a definitive
agreement to acquire Gateway, with offices in Benwood and McMechen, Marshall
County, West Virginia.
As of September 30, 1997, Commercial had consolidated assets of $425
million, deposits of $366 million, and loans of $302 million. The company
operates seven banks in the mid and upper Ohio Valley region of West Virginia
and Ohio. For the six months ended September 30, 1997, Commercial's net earnings
were $3,609,000.
Set forth below is a description of each of Commercial's major
subsidiaries. As of December 31, 1996, Commercial and its subsidiaries had 223
full-time equivalent employees.
CB&T was chartered as a West Virginia Banking Corporation on August 18,
1903, and opened its doors on the corner of Third Street and Court Square,
Parkersburg, West Virginia. CB&T remained in its original location until
January, 1916, when it acquired the assets of the Parkersburg Banking and Trust
Company and moved to its present location at 415 Market Street, Parkersburg,
West Virginia. On December 10, 1984 it opened a branch in Mineral Wells, West
Virginia. On September 29, 1986, a second branch was opened on Grand Central
Avenue in Vienna, West Virginia. It was enlarged and remodeled extensively
during 1995. A third branch was opened at 2107 Pike Street, Parkersburg, West
Virginia on May 8, 1989. In 1996, the West Virginia Division of Banking
authorized CB&T to open a branch on West Virginia State Route 47 near West
Virginia University--Parkersburg. Construction on that facility has not been
started. CB&T provides a complete range of financial services to both retail and
commercial customers. Additionally, CB&T has full trust powers and provides a
wide variety of those services to individuals, corporations, foundations and
others.
Jackson was chartered as a West Virginia Banking Corporation on April 1,
1899, and was originally located on Walnut Street in Ravenswood, West Virginia.
In 1958 the present quarters on Wall Street were first occupied. As the only
full-service commercial bank headquartered in Ravenswood, Jackson provides a
complete range of retail banking services to the community's individuals and
businesses. Jackson does not provide trust or correspondent banking services.
F&M was incorporated in 1941 as a West Virginia Banking Corporation with
the name "Farmers and Merchants Bank of Cairo" and was located in Cairo, West
Virginia. In 1984, offices were rented at 1500 East Main Street in Harrisville,
West Virginia, to serve as a branch location. In 1985, the main offices of F&M
were moved from Cairo to the Harrisville location, and the Cairo office
continued as a branch facility. The Harrisville offices were purchased by F&M in
1987. F&M is the smaller of two banks in Harrisville, the county seat of Ritchie
County. It offers services normally offered by a full-service commercial bank,
including all types of deposit accounts and loans. It does not offer trust
services or correspondent banking services.
The Dime Savings Society of Marietta, Ohio, was converted to a commercial
bank, The Dime Bank, on May 1, 1972. At that time, The Dime Savings Society of
Marietta had moved from the former Dime Savings Society Building at the corner
of Front and Greene Streets to the corner of Second and Putnam Streets in
Marietta. On April 1, 1982, The Dime Bank of Ross County, N.A. was merged into
The Dime Bank. On December 31, 1983, The Dime Bank sold its branch in Ross
County, formerly The Dime Bank of Ross County, N.A., to Kingston National Bank.
On March 31, 1986, a group of forty-two investors purchased one hundred percent
of the stock of The Dime Bank from American Bancorporation of Wheeling, West
Virginia. The main offices of The Dime Bank have remained at the Second and
Putnam location since May 1, 1972. In June of 1974, The Dime Bank established a
branch at Second and Butler Streets in Marietta, Ohio. In February of 1981, The
Dime Bank established a branch in Devola, on State Route 60. A branch in Barlow,
Ohio, at the intersection of State Routes 339 and 501 was opened in November,
1995.
The Dime Bank is a State of Ohio bank and a member of the Federal Reserve
System. Its main operations are conducted at its offices at 200 Putnam Street in
Marietta, Ohio, with drive-in banking services at each of the two branches. The
Dime Bank provides services normally offered by a full-service commercial bank,
but does not offer trust services and is not active in correspondent banking
services.
The Union Bank of Tyler County ("Union") was organized and chartered under
the laws of the State of West Virginia as "Tyler County Bank" on February 18,
1947. The bank has been at its present location at the corner of Fair and Dodd
Streets in Middlebourne, West Virginia, since 1977. On January 1, 1984, the bank
merged with Union National Bank of Sistersville and was rechartered under the
name "Union Bank of Tyler
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<PAGE> 63
County." Its main office remains in Middlebourne and the Sistersville branch is
the former main office of the merged Union National Bank. Union operates as a
full-service bank in both Middlebourne and Sistersville, offering a wide range
of financial services to retail and commercial customers, including trust
services.
The Community Bank ("Community") was organized and chartered as a West
Virginia banking corporation on September 30, 1936. It is located at 112 Collins
Avenue, Pennsboro, West Virginia and operates a drive-through facility on
Masonic Avenue, also in Pennsboro. A new branch is under construction in
Ellenboro, West Virginia. Community offers a wide range of financial services to
retail and commercial customers in its local area, although it does not offer
trust or correspondent banking services.
The Bank of Paden City ("Paden City") was organized and chartered under the
laws of the State of West Virginia on May 14, 1976. Its principal office is
located at 4th and Main Streets in Paden City, West Virginia. In December, 1984,
Paden City opened a full-service branch on State Route 2 in New Martinsville,
West Virginia, referred to as the Steelton Financial Center. Paden City offers
the wide range of services usually offered by a full-service commercial bank,
but it does not offer trust or correspondent banking services.
The Hometown Insurance Agency, Inc. ("Hometown Insurance") is a
wholly-owned subsidiary corporation chartered under the laws of West Virginia on
June 21, 1989. The agency was historically operated through July 31, 1993, under
provisions of the Federal Reserve Board's Regulation Y, allowing a bank holding
company to operate an insurance agency in a place with a population of 5,000 or
less. The insurance agency is presently inactive, conducts no business and has
no employees. The charter exists to preserve the name.
Hometown Finance Company was chartered June 13, 1997. On July 15, 1997,
Hometown Finance Company purchased the loan assets of Mid Ohio Valley Loan
Company and began operating a consumer loan subsidiary which offers secured and
unsecured consumer loans in St. Marys, Pleasants County, West Virginia. The
total investment in Hometown Finance Company is approximately $120,000.
CommBanc Investments, Inc. was chartered on November 14, 1996 and began
operations in October 1997. CommBanc Investments, Inc. is a broker-dealer
subsidiary which operates a broker-dealer business in Parkersburg, West Virginia
and Marietta, Ohio.
COMPETITION
The information with respect to competition is set forth in Commercial's
Annual Report on Form 10-K for the fiscal year ended December 31, 1996 and is
incorporated herein by reference. See "Incorporation of Certain Documents by
Reference."
PRINCIPAL SHAREHOLDERS
To the best of management's knowledge, the Commercial BancShares, Inc.,
Employee Stock Ownership Plan (with 401(k) Provisions) (the "KSOP") is the only
holder or beneficial owner of more than 5% of Commercial Common Stock. As of
December 31, 1997, the KSOP held 170,461 shares of Commercial Common Stock,
representing 10.55% of the shares outstanding.
The KSOP states that Commercial Common Stock held in the KSOP shall
normally be voted by the Trustees of the KSOP as determined by their sole
discretion. However, with respect to any corporate matter which involves the
voting of Commercial Common Stock as to the approval or disapproval of any
corporate merger or consolidation, recapitalization, reclassification,
liquidation, dissolution, sale of substantially all assets of a trade or
business, or such similar transactions as may be prescribed by applicable law,
each participant is entitled to direct the Trustees as to the exercise of any
voting rights attributable to shares of Commercial Common Stock then allocated
to his or her Commercial Common Stock account. In the case of the Merger,
participants may direct the Trustees how to vote the shares allocated to their
individual accounts. In the event that a participant does not provide direction
to the Trustees within a reasonable time prior to the Commercial Special
Meeting, the KSOP documents and applicable law provide that the Trustees will
vote the undirected shares in accordance with the recommendation of the Board of
Directors.
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The following table lists each stockholder known to Commercial to be the
beneficial owner of more than 5% of Commercial Common Stock as of December 31,
1997, as more fully described above:
PRINCIPAL HOLDERS
<TABLE>
<CAPTION>
NAME & AMOUNT AND NATURE
TITLE OF ADDRESS OF OF BENEFICIAL PERCENT
CLASS BENEFICIAL OWNER OWNERSHIP OF CLASS
-------- ------------------------ ----------------- --------
<S> <C> <C> <C>
Common Employee Stock Ownership 170,461* 10.55%
Trust of Commercial,
415 Market Street
Parkersburg, WV 26101
</TABLE>
- ---------
* Nature of beneficial ownership more fully described in text immediately
preceding table.
For stock ownership of Commercial's Directors and Officers see Commercial's
Annual Proxy Statement filed pursuant to Section 14(a) of the Securities Act of
1934, filed April 21, 1997, incorporated herein by reference. See "Incorporation
of Certain Documents by Reference."
COMMERCIAL KSOP
The information with respect to the Commercial KSOP is set forth in
Commercial's Annual Report on Form 10-K for the fiscal year ended December 31,
1996 as in incorporated herein by reference. See "Incorporation of Certain
Documents by Reference."
DIRECTORS AND EXECUTIVE OFFICERS
The information with respect to directors and executive officers of
Commercial is set forth in Commercial's Proxy Statement filed pursuant to
Section 14(a) of the Securities Act of 1934, filed on April 21, 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
Commercial's Proxy Statement filed pursuant to Section 14(a) of the Securities
Act of 1934, filed on April 21, 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 Commercial's Proxy Statement filed pursuant to
Section 14(a) of the Securities Act of 1934, filed on April 21, 1997, and is
incorporated herein by reference. See "Incorporation of Certain Documents by
Reference."
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
February 2, 1998, the members of Phillips, Gardill, Kaiser & Altmeyer
participating in the preparation of this Joint Proxy Statement/Prospectus owned
an aggregate of 45,607 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 Commercial by its counsel, Bowles,
Rice, McDavid, Graff & Love, 600 Quarrier Street, P.O. Box 1386, Charleston, WV
25325-1386. As of February 2, 1998, the members of Bowles, Rice, McDavid, Graff
& Love participating in the preparation of this Joint Proxy Statement/
Prospectus do not own any shares of Commercial Common Stock.
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EXPERTS
The consolidated financial statements of WesBanco 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 as of December 31, 1995
and for each of the two years then ended, incorporated in this Prospectus by
reference to WesBanco's Annual Report on Form 10-K for the year ended December
31, 1996, 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 the Bank of Weirton, a wholly owned subsidiary
of WesBanco, as of December 31, 1995, and for each of the two years in the
period then ended, incorporated in this Joint Proxy Statement/Prospectus by
reference to WesBanco's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996 (as amended by Form 10-K/A dated May 8, 1997), 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.
The financial statements of Commercial 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 Harman, Thompson, Mallory & Ice, A.C., independent accountants, given
on the authority of said firm as experts in auditing and accounting.
LEGAL PROCEEDINGS
The other two banking institutions who were in discussions with Commercial
had instituted legal proceedings in response to Commercial's decision to accept
the WesBanco proposal. Suit was filed in the United States District Court for
the Northern District of Ohio by Citizens Bancshares, Inc. ("Citizens") in the
case styled Citizens Bancshares, Inc. v. Commercial Bancshares, Inc., under
Civil Action No. 97CV 2355. On January 9, 1998, the suit involving Citizens was
settled and a dismissal order was entered. Subsequently, Peoples Bancorp, Inc.
("Peoples") filed a Motion in the United States District Court for the Northern
District of Ohio, Eastern Division, seeking to intervene as a plaintiff in the
case filed by Citizens and styled Citizens Bancshares, Inc. v. Commercial
Bancshares, Inc. On January 27, 1998, the suit involving Peoples was settled.
WesBanco concurred with and approved both settlements.
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APPENDIX I
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (hereinafter called "Agreement"), made
and entered into as of the 30th day of September, 1997, 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 COMMERCIAL BANCSHARES, INCORPORATED, a West Virginia
corporation, with its principal place of business located at 415 Market Street,
Parkersburg, West Virginia, 26101, (hereinafter called "Commercial") party of
the second part, and CBI HOLDING COMPANY (hereinafter called "CBI"), a
corporation to be formed under the laws of the State of West Virginia by
Wesbanco as its wholly-owned subsidiary solely for the purpose of effecting the
acquisition contemplated by this Agreement, party of the third part, (effective
as of its organization and execution of this Agreement).
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, Commercial 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, which owns ten subsidiaries, namely, Commercial Banking and Trust
Company, Jackson County Bank, Farmers & Merchants Bank of Ritchie County, The
Dime Bank, Union Bank of Tyler County, The Community Bank, Bank of Paden City,
Hometown Finance Company, Hometown Insurance Agency, Inc. and CommBanc
Investments, Inc. (hereinafter collectively called "Subsidiaries"), and
WHEREAS, CBI will be a corporation duly organized and validly existing
under the laws of the State of West Virginia which corporation shall be
organized to effect the terms and conditions of this Agreement, and
WHEREAS, the Board of Directors of Wesbanco, by a majority vote of all the
members thereof, has approved this Agreement and has authorized the execution
hereof in counterparts and subject to the terms hereof will direct that it be
submitted to its shareholders; the Board of Directors of CBI shall, prior to the
execution hereof by CBI, have by a majority vote of all of the members and
shareholders thereof, approved this Agreement and authorized the execution
hereof in counterparts, all upon the issuance of CBI's charter as hereinafter
provided, and
WHEREAS, Wesbanco desires to acquire Commercial and the Board of Directors
of Commercial 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
Commercial and its shareholders for Commercial to enter into this Agreement to
become affiliated with Wesbanco, and
WHEREAS, it is proposed that Wesbanco, Commercial and CBI enter into this
Agreement whereby Commercial will merge with and into CBI and the outstanding
shares of common stock of Commercial ("Commercial 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
CBI
1.1 Formation. Wesbanco shall promptly cause CBI to be duly organized as a
business corporation under the laws of the State of West Virginia. CBI will be
wholly-owned by Wesbanco at all times through the closing of the transactions
contemplated by this Agreement.
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1.2 Conduct of Business. Wesbanco shall not permit CBI to conduct any
business operations other than such activities which are necessary to consummate
the merger contemplated in the Agreement (the "Merger").
1.3 Execution of Agreement. Promptly after the organization of CBI,
Wesbanco shall cause CBI 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 CBI.
1.4 Voting of CBI Shares. Promptly after the organization of CBI, Wesbanco,
as sole shareholder of CBI, shall vote all of the shares of CBI in favor of the
Merger.
SECTION 2
THE MERGER
2.1 The Merger. At the Effective Time (as defined in Section 2.5), subject
to the provisions of this Agreement, CBI shall merge with Commercial (the
"Merger"), under the charter of CBI. CBI shall be the surviving corporation
(hereinafter sometimes called the "Surviving Corporation").
2.2 Effect of Merger. At the Effective Time, the corporate existence of
CBI, 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 CBI as the Surviving Corporation shall continue to be governed
by the laws of the State of West Virginia. CBI as the Surviving Corporation
shall also succeed to all of the rights, assets, liabilities and obligations of
Commercial 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 Commercial shall cease.
2.3 Closing. Wesbanco, Commercial and CBI 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 Commercial's Obligations. Commercial shall at any time, or from time to
time, as and when requested by the Surviving Corporation, or by its successors
and assigns, execute and deliver, or cause to be executed and delivered in its
name by its last acting officers, or by the corresponding officers of the
Surviving Corporation, all such conveyances, assignments, transfers, deeds, or
other instruments, and shall take or cause to be taken such further or other
action as the Surviving Corporation, its successors or assigns, may deem
necessary or desirable in order to evidence the transfer, vesting or devolution
of any property, right, privilege or franchise or to vest or perfect in or
confirm to the Surviving Corporation, its successors and assigns, title to and
possession of all the property, rights, privileges, powers, immunities,
franchises and interests referred to in this Agreement and otherwise to carry
out the intent and purposes hereof, all at the expense of the Surviving
Corporation.
2.5 Articles of Merger. Subject to the terms and conditions herein
provided, Articles of Merger, incorporating this Agreement, shall be executed to
comply with the applicable filing requirements of the WVCA at the Closing and on
the Closing Date. On the Closing Date, such Articles of Merger shall be filed
with the Secretary of State of the State of West Virginia, who will duly issue a
Certificate of Merger. The Surviving Corporation shall record said Certificate
of Merger in the office of the Clerk of the County Commission of Wood County.
The Merger shall become effective on the date (the "Effective Date") and at the
time (which time is hereinafter called the "Effective Time") when such
Certificate of Merger is issued by the Secretary of State.
SECTION 3
ARTICLES OF INCORPORATION;
BYLAWS; BOARD OF DIRECTORS AND OFFICERS
3.1 CBI Corporation. The Articles of Incorporation of CBI, as organized,
shall constitute the Articles of Incorporation of the Surviving Corporation. The
Bylaws of CBI as in effect on the Effective Date shall constitute the Bylaws of
the Surviving Corporation. The directors and officers of CBI on the Effective
Date
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shall become the directors and officers of the Surviving Corporation. Any
vacancy in the Board of Directors or officers may be filled in the manner
provided in the Bylaws of the Surviving Corporation. The directors and officers
shall hold office as prescribed in the Bylaws.
3.2 Subsidiaries of Commercial. The Articles of Incorporation of the
Subsidiaries and the Bylaws of the Subsidiaries, as in effect on the Effective
Date, shall continue respectively as the Articles of Incorporation and Bylaws of
the Subsidiaries until the same shall thereafter be altered, amended or repealed
in accordance with law, such Articles of Incorporation or said Bylaws. The
directors and officers of the Subsidiaries on the Effective Date shall continue
as the directors and officers of the Subsidiaries after the Merger, except to
the extent that such Subsidiaries may be restructured or consolidated on or
after the Merger, and shall hold office as prescribed in the Bylaws of such
Subsidiaries and applicable law, until their successors shall have been elected
and shall qualify.
3.3 Wesbanco Directors. Wesbanco covenants and agrees that as of the
Effective Date it will appoint as directors of Wesbanco William E. Mildren, Jr.,
Robert K. Tebay, James W. Swearingen and Larry G. Johnson, or, if one or more of
them should be unwilling or unable to serve, a person or persons to be
designated by Commercial ("Substituted Person"), and acceptable to Wesbanco.
Such individuals shall serve until the next annual meeting of shareholders, and
Wesbanco shall include such persons on the list of nominees for the position of
director presented by the Wesbanco Board of Directors and for which said Board
shall solicit proxies at its next annual meeting of shareholders, with such
persons to be nominated for such terms as are available under Wesbanco's Bylaws,
except that such Directors shall be elected to separate classes of Wesbanco's
classified Board of Directors to the extent feasible; and provided that in the
event that one or more of the Commercial nominees are nominated as set forth
above by the Wesbanco Board of Directors for less than full three year terms,
upon the expiration of any such lesser term, Wesbanco covenants and agrees that
it will again include such person or persons on the list of nominees for the
position of Wesbanco director presented by its Board of Directors for a full
three year term and shall solicit proxies for said person or persons for the
annual meeting or meetings of shareholders at which such election or elections
shall be held. Wesbanco also covenants and agrees that as of the Effective Date
it will appoint William E. Mildren, Jr. as a member of the Executive Committee
of the Board of Directors of Wesbanco, and covenants and agrees that it will
continue to appoint or elect William E. Mildren, Jr. (or the designated
Substituted Person for the said William E. Mildren, Jr. if he should be unable
to serve) for so long as he serves as a Director of Wesbanco pursuant to the
requirements of this Section 3.3.
SECTION 4
SHAREHOLDER APPROVALS
4.1 Commercial Shareholders' Meeting. Subject to the receipt by Commercial
of the fairness opinion described in Section 11.3(c) hereof, Commercial 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, Commercial 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 Commercial to Commercial and
its shareholders, the Board of Directors of Commercial 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 Commercial shareholders required to effectuate the
transactions contemplated by the Agreement.
4.2 CBI Shareholder Meeting or Consent. CBI shall promptly submit the
Agreement to its shareholder, Wesbanco, for approval in accordance with the
WVCA.
4.3 Wesbanco Shareholder Meeting. Wesbanco 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). In connection with such meeting, Wesbanco
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 Wesbanco to
Wesbanco and its shareholders, the Board of Directors of Wesbanco shall
recommend a vote in favor of the Merger and shall use its best efforts to obtain
at such
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meeting the affirmative vote of the Wesbanco shareholders required to effectuate
the transactions contemplated by the Agreement.
SECTION 5
CONVERSION OF SHARES
5.1 Conversion, Ratio and Option. The manner of converting or exchanging
the shares of CBI and Commercial shall be as follows:
(a) Each share of Commercial Common Stock issued and outstanding
immediately prior to the Effective Time, except shares of Commercial Common
Stock issued and held in treasury of Commercial or beneficially owned by
CBI or Wesbanco, other than in a fiduciary capacity by Wesbanco 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, 2.85 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
Commercial otherwise entitled to a fractional share of Wesbanco will
receive cash therefore in an amount based on a value of $28.37 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) Each share of common stock of CBI issued and outstanding
immediately prior to the Effective Time shall, at the Effective Time,
become one issued and outstanding share of common stock of the Surviving
Corporation.
5.2 Shares Owned by Commercial, Wesbanco or CBI. Each share of Commercial
Common Stock issued and held in the treasury of Commercial or beneficially owned
by Wesbanco or CBI, 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 Commercial 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 fractional
share of common stock which he 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 Commercial 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.
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5.4 Closing of Stock Transfer Books. On the Effective Date, the stock
transfer books of Commercial shall be closed, and no shares of Common Stock or
Preferred Stock of Commercial 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 Commercial or its
Subsidiaries who are elected to serve on the board of directors of one or more
banking Subsidiaries of Wesbanco 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 any of the Wesbanco Subsidiaries.
SECTION 6
DISSENTERS RIGHTS
6.1 Subject to the rights of Wesbanco and Commercial, as permitted by
Section 11.1(i) of the Agreement, to terminate the Agreement and abandon the
Merger in the event that the number of Objecting Shares (as hereinafter defined)
shall exceed 10% of the shares of Commercial 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 Commercial 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
Commercial 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.
SECTION 7
REPRESENTATIONS, WARRANTIES AND COVENANTS OF COMMERCIAL
Commercial represents and warrants to and covenants with Wesbanco and CBI,
in its own right and with respect to its wholly owned Subsidiaries, that:
7.1 Organization and Qualification of Commercial. Commercial 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 or its Subsidiaries to be qualified to do business in
any other jurisdiction, except where the failure to be so qualified, considering
all such cases in the aggregate, does not involve a material risk to the
business, properties, financial position or results of operations of Commercial
and its Subsidiaries taken as a whole.
7.2 Authorization of Agreement. The Board of Directors of Commercial has
authorized the execution of this Agreement as set forth herein, and subject to
the approval of this Agreement by the shareholders of Commercial as provided in
the Articles of Incorporation and Bylaws of Commercial and West Virginia Code
31-1-117, Commercial has the corporate power and is duly authorized to merge
with CBI pursuant to this Agreement, and this Agreement is a valid and binding
agreement of Commercial 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 Commercial prior to 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 provisions
of
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Commercial'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 Commercial or its
Subsidiaries (as defined in Section 7.5) are a party or by which they are bound.
After the approval of this Agreement by the shareholders of the common stock of
Commercial, the Board of Directors and the shareholders of Commercial will have
taken all corporate action required by applicable law, the Articles of
Incorporation of Commercial, its Bylaws or otherwise to authorize the execution
and delivery of this Agreement and to authorize the Merger of Commercial and CBI
pursuant to this Agreement.
7.4 Financial Statements. Commercial has delivered to Wesbanco copies of
its consolidated statements of condition as of December 31, 1996, 1995, and
1994, and the interim period ended June 30, 1997, 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, 1996, and the interim period ended June 30, 1997,
together with the notes thereto, accompanied by an audit report relating to the
financial statements for the three years ended December 31, 1996, of Harman,
Thompson, Mallory & Ice, A.C., independent auditors. Such statements, together
with the related notes to all of said financial statements, present fairly the
consolidated financial position of Commercial and its 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.
7.5 Subsidiaries of Commercial. The Subsidiaries of Commercial are
Commercial Banking and Trust Company, Jackson County Bank, Farmers & Merchants
Bank of Ritchie County, The Dime Bank, Union Bank of Tyler County, The Community
Bank, Bank of Paden City, Hometown Finance Company, Hometown Insurance Agency,
Inc. and CommBanc Investments, Inc. Such corporations are duly organized,
validly existing, and in good standing under the laws of the States of West
Virginia or Ohio, as the case may be, and have the requisite corporate power and
authority to own and lease their properties and to conduct their business as
they are now being conducted and are currently contemplated to be conducted.
Commercial owns 100% of the issued and outstanding stock of such corporations.
All issued and outstanding shares of stock of the Subsidiaries have been fully
paid, were validly issued and are nonassessable.
7.6 No Action, Etc. Except as disclosed in the Disclosure Schedule of
Commercial dated not more than 60 days from the date hereof (the "Commercial
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 Commercial, threatened against or relating to
Commercial, its Subsidiaries, their business or any of their properties or
against any of their officers or directors (in their capacity as such) in law or
in equity or before any governmental agency. There are no suits, actions,
proceedings, claims or investigations against Commercial, its Subsidiaries,
properties or against any of their officers or directors (in their capacity as
such) in law or in equity or before any governmental agency which, individually
or in the aggregate, would, or is reasonably likely to, if determined adversely
to such party, materially adversely affect the financial condition (present or
prospective), businesses, properties or operations of Commercial or its
Subsidiaries or the ability of Commercial or its Subsidiaries to conduct their
business as presently conducted or to consummate the transaction contemplated
hereby, and Commercial does not know of any basis for any such action or
proceeding. Except as disclosed in the Commercial Disclosure Schedule,
Commercial and its Subsidiaries are not parties or subject to any cease and
desist order, agreement or similar arrangement with a regulatory authority which
restricts their operations or requires any action, and neither Commercial nor
its Subsidiaries are transacting business in material violation of any
applicable law, ordinance, requirement, rule, regulation or order.
7.7 Capitalization. The authorized capital stock of Commercial consists of
5,000,000 shares of common stock, par value of $5.00 per share, of which
1,616,187 shares are duly authorized, validly issued and outstanding and are
fully paid and nonassessable as of the date hereof, and 43,328 shares of
preferred stock with a par value of $100.00 per share, of which no shares are
issued and outstanding as of the date hereof.
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There are no other options, warrants, calls or commitments of any kind entitling
any person to acquire, or securities convertible into, Commercial Common Stock,
except as provided in the Option Agreement dated the date hereof to be issued in
accordance with this Agreement, and the Shareholder Rights Plan adopted by the
Board of Directors of Commercial on August 14, 1996.
The rights issued to shareholders of Commercial pursuant to the Shareholder
Rights Plan adopted by Commercial on August 14, 1996 (the "Rights Plan") have
been redeemed in accordance with the terms of the Rights Plan. The rights and
the Rights Plan have been terminated in accordance with the provisions of such
plan, with no further obligations to the shareholders of Commercial, and the
rights and the Rights Plan are no longer in force or effective.
7.8 Copies of All Contracts, Leases, Etc. Commercial has furnished, or will
furnish, to Wesbanco a list of all material contracts, leases and other
agreements to which Commercial 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 Commercial and its
Subsidiaries which list will be included in the Commercial Disclosure Schedule,
and which will be updated on the Effective Date. Commercial will provide to
Wesbanco true and complete copies of such documents as may be reasonably
requested by Wesbanco.
7.9 Materially Adverse Contracts. Neither Commercial nor 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 Commercial and 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 Commercial or its
Subsidiaries are a party that would have a material adverse effect upon the
financial condition, operations, results of operations, business or prospects of
Commercial and its Subsidiaries taken as a whole.
7.10 Undisclosed Liabilities. Commercial and its Subsidiaries have 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 may
be disclosed in the Commercial Disclosure Schedule, none of which would have a
material adverse effect upon the financial condition of Commercial and its
Subsidiaries taken as a whole.
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 Commercial and its Subsidiaries in foreclosure of loans and existing
at the time of foreclosure, Commercial and its Subsidiaries have good and
marketable title to all of the property, interest in properties and other
assets, real and personal, set forth in their consolidated balance sheet as of
December 31, 1996, and applicable interim period balance sheets or acquired
since the date thereof, other than property disposed of since such dates,
subject to no material liens, mortgages, pledges, encumbrances or charges of any
kind except liens reflected on said balance sheets or set forth in the financial
statements delivered pursuant to Section 7.4 hereof, and all of their material
leases are in full force and effect and neither Commercial nor its Subsidiaries
are 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 Commercial or its
Subsidiaries and used or leased by Commercial or its Subsidiaries in their
business is in good condition, normal wear and tear excepted, and is in good
operating order. All of such property is insured against loss for at least 80%
of the full replacement value thereof (less applicable deductibles) by reputable
insurance companies authorized to transact business in the States of West
Virginia or Ohio.
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
Commercial and Wesbanco will not contain any untrue statement of a material fact
concerning Commercial or omit to state a material fact concerning Commercial
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 Commercial, 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.
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7.13 ERISA. Except as disclosed in the Commercial 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
Commercial, or 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 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 Plan.
7.14 Exchange Act Reports. Commercial has delivered to Wesbanco true and
correct copies of its Form 10-K (Annual Report) for the year ended December 31,
1996, its Form 10-Q (Quarterly Report) for the quarters ended March 31, 1997,
and June 30, 1997, as filed with the SEC, all of which were prepared and filed
in accordance with the applicable requirements and regulations of the SEC, and
all other documents and reports filed by Commercial with the Securities &
Exchange Commission ("SEC") pursuant to the Securities Exchange Act of 1934 (the
"Act") since January 1, 1997 (the "Reports"). Commercial has filed and will
continue to file all reports and other documents required to be filed with the
SEC pursuant to the Act in a timely manner. All of the 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.
7.15 Labor Disputes. Neither Commercial nor its Subsidiaries are directly
or indirectly involved in or threatened with any labor dispute, including,
without limitation, matters regarding discrimination by reason of race, creed,
sex, handicap or national origin, which would materially and adversely affect
their financial condition, assets, businesses or operations taken as a whole. No
collective bargaining representatives represent any employees of Commercial or
the employees of its Subsidiaries, and no petition for election of any
collective bargaining representative has been filed and to the knowledge of
Commercial and its Subsidiaries no organizational campaign on behalf of any
collective bargaining unit has been undertaken by or on behalf of the employees
of Commercial or its Subsidiaries.
7.16 Reserve for Possible Loan Losses. The reserve for possible loan losses
shown on the consolidated balance sheets of Commercial and its Subsidiaries as
of December 31, 1996, and June 30, 1997, delivered pursuant to this Agreement is
adequate in all material respects as of the respective dates thereof.
7.17 Taxes. Except as may be disclosed in the Commercial Disclosure
Schedule:
(a) Commercial and its Subsidiaries have timely and properly filed all
Federal Income Tax Returns and all other federal, state, municipal and
other tax returns which they are required to file, either on their own
behalf or on behalf of their employees or other persons or entities, all
such returns and reports being true and correct and complete in all
material respects, and have paid all taxes, including penalties and
interest, if any, which have become due pursuant to such returns or reports
or forms or pursuant to assessments received by them;
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(b) Neither the Internal Revenue Service nor any other taxing
authority is now asserting against Commercial or 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 Commercial or 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 Commercial or 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 or Ohio Franchise Tax Returns of
Commercial or 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, and corresponding provision of the Ohio Revised Code, no
tax year of Commercial or its Subsidiaries remains open to the assessment
and collection of additional Business Franchise Taxes.
(e) Commercial, and its Subsidiaries, have properly accrued and
reflected on their December 31, 1996, consolidated balance sheet, delivered
pursuant to Section 7.4 hereof, and have thereafter to the date hereof
properly accrued, and will from the date hereof through the Closing Date
properly accrue, all liabilities for taxes and assessments, and will timely
and properly file all such federal, state, local and foreign tax returns
and reports and forms which they are required to file, either on their own
behalf or on behalf of their employees or other persons or entities, all
such returns and reports and forms to be true and correct and complete in
all respects, and will pay or cause to be paid when due all taxes,
including penalties and interest, if any, which have become due pursuant to
such returns or reports or forms or pursuant to assessments received by
them, all such accruals being in the aggregate sufficient for payment of
all such taxes and assessments.
7.18 Absence of Certain Changes. Except as may be disclosed in the
Commercial Disclosure Schedule, or except in connection with the transactions
contemplated by this Agreement, since December 31, 1996:
(a) There has been no change in the material assets, financial
condition or liabilities (contingent or otherwise), business, or results of
operations of Commercial and its Subsidiaries which has had, or changes
which in the aggregate have had, a material adverse effect on the assets,
financial condition or results of operations of Commercial and its
Subsidiaries taken as a whole, nor to their knowledge, has any event or
condition occurred which may result in such change or changes;
(b) There has not been any material damage, destruction or loss by
reason of fire, flood, accident or other casualty (whether insured or not
insured) materially and adversely affecting the assets, financial
condition, business or operations of Commercial or its Subsidiaries taken
as a whole;
(c) Other than in the ordinary course of business, neither Commercial
nor 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 Commercial except as provided for in this
Agreement, or any material change in the outstanding debt of Commercial or
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, Commercial 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) Commercial and its Subsidiaries have, and shall have at Closing,
personnel sufficient to adequately staff all key positions within their
respective operations. There has not been any material increase in the
compensation or fees payable by Commercial or its Subsidiaries to their
respective directors or officers for services in their capacities as such,
other than increases in the regular course of
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business in accordance with past practices or the personnel policies of
Commercial or its Subsidiaries, respectively, nor any material increase in
expenditures for any bonus, insurance, pension or other employee benefit
plan, payment or arrangement for or with any of such directors or officers
other than increases in the regular course of business in accordance with
past practices or the personnel policies of Commercial or its Subsidiaries;
(g) Neither Commercial nor its Subsidiaries have made any material
loan or advance other than in the ordinary course of business;
(h) Neither Commercial nor 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) Neither Commercial nor its Subsidiaries have 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 Commercial or its
Subsidiaries, taken as a whole, and neither Commercial nor its Subsidiaries
have knowledge of any such event, condition or development which may
materially and adversely affect the assets, financial condition or results
of operations of Commercial and its Subsidiaries, taken as a whole.
7.19 Fidelity Bonds. The Subsidiaries have continuously maintained fidelity
bonds insuring them against acts of dishonesty by each of their officers and
employees in such amounts as are required by law and as are customary, usual and
prudent for banks of their size. Since January 1, 1997, there have been no
claims under such bonds and, except as disclosed in the Commercial Disclosure
Schedule, neither Commercial nor its Subsidiaries are aware of any facts which
would form the basis of a claim under such bonds. Neither Commercial nor its
Subsidiaries have any reason to believe that their fidelity coverage will not be
renewed by the applicable carrier on substantially the same terms as its
existing coverage.
7.20 Negative Covenants. Except as otherwise contemplated hereby, between
the date hereof and the Effective Date, or the time when this Agreement
terminates as provided herein, Commercial will not, except as contemplated by
this Agreement, without the prior written approval of Wesbanco:
(a) Make any change in its authorized capital stock;
(b) Except for a minimum of 116,000 shares and a maximum of 142,000
shares issuable in Commercial's acquisition of Gateway Bancshares, Inc.,
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 $1.20 cents per share per year (to be paid on a
quarterly basis in such proportions as are consistent with past practices)
or 50% of the after-tax income of Commercial 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 7.18(f)
above and except for any amendments required by law, enter into or amend
any employment, pension, retirement, stock option, profit sharing, deferred
compensation, consultant, bonus, group insurance or similar plan in respect
of any of its directors, officers or other employees for services in their
capacities as such or materially increase its contribution to any pension
plan, except as disclosed in the Commercial Disclosure Schedule, regarding
pension or retirement plans or increases in accordance with past practices;
(g) Take any action materially and adversely affecting the financial
condition (present or prospective), businesses, properties or operations of
Commercial or its Subsidiaries, taken as a whole;
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(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 7.18(f) and 7.20(f) hereof), except in the
ordinary course of business as heretofore conducted, or take any other
action not in the ordinary course of its business as heretofore conducted
or incur any material obligation or enter into any material contract; or
(j) Amend its Articles of Incorporation or Bylaws, except as may be
necessary to carry out this Agreement or as required by law.
7.21. Additional Covenants. Except as otherwise contemplated by this
Agreement, Commercial covenants and agrees:
(a) That it will promptly advise Wesbanco in writing of the name and
address of, and the number of shares of Commercial 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 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 Commercial 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) Commercial will not, and will not permit any person acting on
behalf of Commercial or its Subsidiaries 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, Commercial or its Subsidiaries, or
any tender or exchange offer (or proposal to make any tender or exchange
offer) for any shares of stock of Commercial, or any proposal to acquire
more than 10% of the outstanding shares of stock of Commercial or any
options, warrants or rights to acquire, or securities convertible into or
exchangeable for, more than 10% of the outstanding shares of stock of
Commercial. Commercial 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 notice in writing immediately thereafter;
(e) To deliver to Wesbanco all Forms filed with the SEC for periods
ending after the date of this Agreement within seven (7) days after the
filing of each such report with the SEC;
(f) To promptly advise Wesbanco of any material adverse change in the
financial condition, assets, businesses or operations of Commercial or its
Subsidiaries, taken as a whole, or any material changes or inaccuracies in
data provided to Wesbanco pursuant to this Agreement;
(g) To maintain in full force and effect its and its Subsidiaries'
present fire, casualty, public liability, employee fidelity and other
insurance coverages or replacement insurance coverage at substantially the
same premium and insurance levels;
(h) To cooperate with Wesbanco in furnishing such information
concerning the business and affairs of Commercial, its Subsidiaries and
their respective directors and officers as is reasonably necessary or
requested in order to prepare and file any application for regulatory or
governmental approvals, including, but not limited to, an application to
the Federal Reserve Board and the West Virginia Department of Banking for
prior approval of the acquisition of Commercial by Wesbanco as contemplated
hereunder. Consistent with its fiduciary duties, Commercial 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
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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
(i) To cooperate with Wesbanco in furnishing such information
concerning the business of Commercial and its Subsidiaries 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 CBI
Wesbanco and CBI represent and warrant to Commercial and covenant with
Commercial that:
8.1 Corporate Organization of Wesbanco and Subsidiaries. Wesbanco is, and
upon execution hereof CBI will be, a corporation duly organized, validly
existing and in good standing under the laws of the State of West Virginia, with
full corporate power and authority to carry on its business as it is now being
conducted and as contemplated by the Agreement and to own the properties and
assets which it owns, and neither the ownership of its property nor the conduct
of its business requires it, or any of its subsidiaries, to be qualified to do
business in any other jurisdiction except where the failure to be so qualified,
considering all such cases in the aggregate, does not involve a material risk to
the business, properties, financial position or results of operations of
Wesbanco and its subsidiaries taken as a whole. Each of Wesbanco's subsidiaries
("Wesbanco Subs"), other than CBI, is a West Virginia, Ohio or Delaware
corporation, duly organized and validly existing in good standing under the laws
of Ohio, West Virginia or Delaware, as the case may be, with full corporate
power and authority to carry on its business as it is now being conducted and to
own the properties and assets which it owns. All issued and outstanding shares
of stock of CBI and Wesbanco Subs are held, beneficially and of record, by
Wesbanco and have been or, as to CBI, on the date of its execution hereof, will
have been, fully paid, were validly issued and are nonassessable. There are no
options, warrants to purchase or contracts to issue, or contracts or any other
rights entitling anyone to acquire, any other stock of CBI or any of the
Wesbanco Subs or securities convertible into shares of stock of CBI or any 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
the approval of this Agreement by the shareholders of Wesbanco as provided in
its Articles of Incorporation, its Bylaws and the WVCA, Wesbanco has the
corporate power and is duly authorized to merge with Commercial, pursuant to
this Agreement, and this Agreement is a valid and binding agreement of Wesbanco
enforceable in accordance with its terms, except as enforceability may be
subject to applicable bankruptcy, insolvency, moratorium or other similar laws
affecting the enforcement of creditors' rights generally and to any equitable
principles limiting the right to obtain specific performance of certain
obligations thereunder. Upon execution hereof by CBI and subject to the approval
hereof by Wesbanco as its sole shareholder, CBI 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 CBI 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 Wheeling, for the benefit of the holders of the common
stock of Commercial, 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
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the acceleration of any obligation under, any material mortgage, Deed of Trust,
note, lien, lease, franchise, license, permit, agreement, instrument, law,
order, arbitration award, judgment or decree, or in the termination of any
material license, franchise, lease or permit, to which Wesbanco or any of the
Wesbanco Subs, is a party or by which they are bound.
8.5 Application for CBI. Wesbanco shall cause to be filed with the West
Virginia Secretary of State an application to organize and incorporate CBI as a
West Virginia corporation, in accordance with the provisions of the West
Virginia Code, and upon the approval of such application and the issuance of a
Certificate of Incorporation for CBI by the Secretary of State of West Virginia,
Wesbanco shall cause CBI to execute and enter into this Agreement and cause CBI
to take such action as is provided in this Agreement on CBI's 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 Commercial true and
correct copies of its Form 10-K (Annual Report) for the year ended December 31,
1996, and its Forms 10-Q (Quarterly Report) for the quarters ended March 31,
1997, and June 30, 1997, as filed with the SEC, all of which were prepared and
filed in accordance with the applicable requirements and regulations of the SEC.
Wesbanco has also delivered to Commercial true and correct copies of all
documents and reports filed by Wesbanco with the SEC pursuant to the Exchange
Act since January 1, 1997 (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 CBI, the subsidiaries of
Wesbanco are Wesbanco Bank Wheeling, a West Virginia banking corporation,
Wesbanco Bank Charleston, a West Virginia banking corporation, Wesbanco Bank
Parkersburg, a West Virginia banking corporation, Wesbanco Bank Fairmont, Inc.,
a West Virginia banking corporation, Wesbanco Bank Barnesville, an Ohio banking
corporation, FFB Corporation, a West Virginia corporation, Vandalia National
Corporation, a Delaware corporation, Wesbanco Properties, Inc., a West Virginia
corporation and Wesbanco Mortgage Company, a West Virginia corporation. All have
the requisite corporate power and authority to own and lease their respective
properties and to conduct their respective businesses as they are now being
conducted and are currently contemplated to be conducted. Wesbanco owns 100% of
the issued and outstanding stock of all such corporations.
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 have, and will have, no preemptive
rights with respect to the issuance of the shares of Wesbanco Common Stock to be
authorized and issued in the transaction contemplated in this Agreement.
8.11 Financial Statements. Wesbanco has delivered to Commercial copies of
its consolidated balance sheets as of December 31, 1996, 1995, and 1994 and the
interim period ended June 30, 1997, 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, 1996, and the interim period ended June 30, 1997, together with the
notes thereto, accompanied by an audit report of Ernst & Young, LLP, independent
auditors. Such statements and the related notes to all of said financial
statements, present fairly the consolidated financial position of Wesbanco and
its consolidated subsidiaries and the consolidated results of their operations
as of the dates and for the periods ended on the dates specified in accordance
with generally accepted accounting principles consistently applied throughout
the periods
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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 60 days from the date hereof (the "Wesbanco
Disclosure Schedule"), and as supplemented on the Effective Date, there are no
suits, actions, proceedings, claims or investigations (formal or informal)
pending, or to the knowledge of Wesbanco pending or threatened, against or
relating to Wesbanco, its subsidiaries, its businesses or any of its properties
or against any of their officers or directors (in their capacity as such) in law
or in equity or before any governmental agency. There are no suits, actions,
proceedings, claims or investigations against or relating to Wesbanco, its
subsidiaries, its businesses, its properties or against any of their officers or
directors (in their capacity as such) in law or in equity or before any
governmental agency, which, individually or in the aggregate, would, or is
reasonably likely to, if determined adversely to such party, materially
adversely affect the financial condition (present or prospective), businesses,
properties or operations of Wesbanco or its subsidiaries or the ability of
Wesbanco or its subsidiaries to conduct its business as presently conducted or
consummate the transaction contemplated hereby, and Wesbanco does not know of
any basis for any such action or proceeding. Neither 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
16,050,795 shares are duly authorized, validly issued and outstanding (as of
June 30, 1997) and are fully paid and nonassessable, and 1,000,000 shares of
preferred stock, without par value, none of which are issued or outstanding.
There are no options, warrants, calls or commitments of any kind entitling any
person to acquire, or securities convertible into, Wesbanco Common Stock, except
as herein provided. At June 30, 1997, Wesbanco held 21,542 shares of its common
stock as treasury stock. Wesbanco has no other reserve commitments with respect
to its common stock. The current Wesbanco dividend is $0.20 per calendar quarter
and subject to regulatory, statutory and fiduciary requirements, it has no
present plan or intention to change such dividend.
Upon execution hereof by CBI, the authorized capital stock of CBI will
consist of 500 shares of common stock, par value of $10.00 per share, of which
all such shares will be duly authorized and validly issued and outstanding and
will be fully paid and nonassessable. There are no options, warrants, calls or
commitments of any kind relating to, or securities convertible into CBI Common
Stock.
8.14 Copies of All Contracts, Leases, Etc. Wesbanco has furnished, or will
furnish, to Commercial a list 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 which list will
be included in the Wesbanco Disclosure Schedule, and which will be updated on
the Effective Date. Wesbanco will provide to Commercial true and complete copies
of such documents as may be reasonably requested by Commercial.
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 as may be disclosed in the Wesbanco Disclosure Schedule, none of
which would have a material adverse effect upon the financial condition of
Wesbanco and the Wesbanco Subs, taken as a whole.
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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 the Wesbanco Subs in foreclosure of loans and existing at the time
of foreclosure, Wesbanco and its subsidiaries have good and marketable title to
all of the property, interest in properties and other assets, real or personal,
set forth in its consolidated balance sheet as of December 31, 1996, 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 Proxy Statement. The Proxy 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 Commercial and Wesbanco 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 may be disclosed in the Wesbanco Disclosure Schedule:
(a) Wesbanco and its subsidiaries have timely and properly filed all
Federal Income Tax Returns and all other federal, state, municipal and
other tax returns which they are required to file, either on their own
behalf or on behalf of their employees or other persons or entities, all
such returns and reports being true and correct and complete in all
material respects, and have paid all taxes, including penalties and
interest, if any, which have become due pursuant to such returns or reports
or forms or pursuant to assessments received by them;
(b) Neither the Internal Revenue Service nor any other taxing
authority is now asserting against Wesbanco or any of its subsidiaries, or,
to its knowledge, threatening to assert against them, or any of them, any
material deficiency or claim for additional taxes, interest or penalty;
(c) There is no pending or, to its knowledge, threatened examination
of the Federal Income Tax Returns of Wesbanco or any of its subsidiaries,
and, except for tax years still subject to the assessment and collection of
additional federal income taxes under the three-year period of limitations
prescribed in IRC Section 6501(a), no tax year of Wesbanco or any of its
subsidiaries remains open to the assessment and collection of additional
material Federal Income Taxes; and
(d) There is no pending or, to its knowledge, threatened examination
of the West Virginia Business Franchise or Ohio 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, and corresponding provision of the Ohio Revised
Code, no tax year of Wesbanco or any of its subsidiaries remains open to
the assessment and collection of additional Business Franchise Taxes.
(e) Wesbanco, and its subsidiaries, have properly accrued and
reflected on their December 31, 1996, 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
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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 December 31, 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 material adverse effect on the assets,
financial condition or results of operations of Wesbanco, nor, to its
knowledge, has any event or condition occurred which may result in such
change or changes;
(b) There has not been any material damage, destruction, or loss by
reason of fire, flood, accident or other casualty (whether insured or not
insured) materially and adversely affecting the assets, financial
condition, business or operations of Wesbanco or any of its subsidiaries
taken as a whole;
(c) Other than in the ordinary course of business, neither Wesbanco
nor any of its subsidiaries have disposed of, or agreed to dispose of, any
of their material properties or assets, nor have they leased to others, or
agreed to so lease, any of such material properties or assets;
(d) There has not been any change in the authorized, issued or
outstanding capital stock of Wesbanco, except as provided for in this
Agreement, or 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 repurchase,
redeem or otherwise acquire, any shares of its capital stock or any other
of its securities whatsoever;
(f) Neither Wesbanco nor any of its subsidiaries have made any
material loan or advance other than in the ordinary course of business;
(g) Neither Wesbanco nor any of its subsidiaries has entered into any
other material transaction, contract or lease or incurred any other
material obligation or liabilities other than in the ordinary course of
business;
(h) Neither Wesbanco nor any of its subsidiaries have made any
expenditure or major commitment for the purchase, acquisition, construction
or improvement of any material asset or assets which in the aggregate would
be material other than in the ordinary course of business;
(i) There have not been any dividends or other distributions declared
or paid on any shares of Wesbanco Common Stock or preferred stock of
Wesbanco which, taken in the aggregate with all other such distributions
declared or paid in the same tax year, exceed 55% 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 Commercial have
a material adverse effect on the rights of holders of Wesbanco Common
Stock; and
(l) There has not been any other event, condition or development of
any kind which materially and adversely affects the material assets,
financial condition or results of operations of Wesbanco or any of its
subsidiaries, and neither Wesbanco nor any of its subsidiaries have
knowledge of any such event, condition or development which may materially
and adversely affect the material assets, financial condition or results of
operations of Wesbanco and its subsidiaries.
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, 1997, there have been no
claims
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under such bonds (except as may be disclosed in the Wesbanco Disclosure
Schedule) and, except as disclosed in writing to Commercial, 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, 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 multi-employer or
multiple employer employee benefit pension plan (including any multi-employer
plans as defined in Section 3(37) of ERISA) and, with respect to any
multi-employer or multiple employer plan in which Wesbanco or any of its
subsidiaries was a participating employer, all contributions due from Wesbanco
or any of its subsidiaries to any such multi-employer or multiple employer plan
have been timely paid and any additional contributions due on or before the
Effective Date shall have been paid; (vii) with respect to any multi-employer
pension plan subject to the Multi-Employer Pension Plan Amendments Act of 1980
in which Wesbanco or any of its subsidiaries was a participating employer,
neither Wesbanco nor any of its subsidiaries have incurred or will incur any
withdrawal liability, complete or partial, under Section 4201, 4203, or 4205 of
ERISA, as a consequence of discontinuing participating in such multi-employer
pension plan; (viii) there has been no cessation of, and no decision has been
made to cease, operations at a facility or facilities where such cessation could
reasonably be expected to result in a separation from employment of more than
20% of the total number of employees who are participants under any Plan; (ix)
each Plan which is an employee pension plan meets the requirements of "qualified
plans" under Section 401(a) of the IRC; (x) no accumulated funding deficiency
within the meaning of Section 412 of the IRC or Section 302 of ERISA has been
incurred with respect to any Plan subject to the funding standards of those
provisions; (xi) with respect to each Plan, there have been no prohibited
transactions as defined in Section 406 of ERISA or Section 4975 of the IRC, and
there are no actions, suits or claims with respect to the assets thereof (other
than routine claims for benefits) pending or threatened; and (xii) all required
reports, descriptions and notices (including, but not limited to, Form 5500
Annual Reports, Summary Annual Reports and Summary Plan Descriptions) have been
appropriately filed with the government or distributed to participants with
respect to each Plan.
8.23 Labor Disputes. 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 representatives represent any
Wesbanco, CBI or Wesbanco Subs employees and no petition for election of any
collective bargaining
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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, CBI or Wesbanco Subs
employees.
8.24 Reserve for Possible Loan Losses. The reserve for possible loan losses
shown on the consolidated balance sheets of Wesbanco and its subsidiaries as of
December 31, 1997, and June 30, 1997, delivered pursuant to this Agreement is
adequate in all material respects as of the 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 CBI's
part, to be taken as promptly as practicable so as to permit the
consummation of the Merger at the earliest possible date and to cooperate
fully with the other parties to that end, and that it will, in all such
efforts, give priority to this acquisition of Commercial;
(b) To deliver to Commercial 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 Commercial of any material adverse change in
the financial condition, assets, businesses or operations of Wesbanco or
any of its subsidiaries, or any material changes or inaccuracies in data
provided to Commercial pursuant to this Agreement or any "acquisition
proposal" with respect to Wesbanco received by Wesbanco;
(d) To cooperate with Commercial in furnishing such information
concerning the business and affairs of Wesbanco and its subsidiaries and
its directors and officers as is reasonably necessary or requested in order
to prepare and file any application for regulatory or governmental
approvals, including but not limited to an application to the Federal
Reserve Board and the West Virginia Department of Banking for prior
approval of the acquisition of Commercial 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 Commercial 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 Commercial may directly and through their
representatives, make such investigation of the assets and business of Wesbanco
and Commercial and their subsidiaries as each deems necessary or advisable.
Wesbanco and Commercial and their representatives, including their accountants,
shall have, at reasonable times after the date of execution by Wesbanco and
Commercial 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 Commercial and by Commercial 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
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of 7 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 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 Commercial. The consummation of
this Agreement by Wesbanco and Commercial and the Merger is conditioned upon the
following:
(a) The shareholders of Commercial, CBI and Wesbanco shall have
approved this Agreement by such vote as required by law;
(b) The West Virginia Banking Board (i) shall have granted its final
approval of the incorporation and organization of CBI as a West Virginia
corporation and the Merger and (ii) shall not, within 120 days from the
date of Wesbanco's submission to the Banking Board pursuant to West
Virginia Code Section 31A-8A-4(a), have entered an order disapproving the
acquisition of Commercial by Wesbanco pursuant to this Agreement;
(c) The Secretary of State of West Virginia shall have issued a
Certificate of Incorporation for CBI;
(d) The Board of Governors of the Federal Reserve System shall have
approved the application of Wesbanco to acquire Commercial; and of CBI to
become a bank holding company pursuant to this Agreement;
(e) 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 Commercial to carry out the transaction
contemplated in this Agreement) shall have been received.
(f) No order to restrain, enjoin or otherwise prevent the consummation
of the 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.
(g) Wesbanco, Commercial and CBI shall have received, in form and
substance satisfactory to Wesbanco's and Commercial'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
Commercial shall have received any and all consents required with respect
to the documents described pursuant to Section 7.3 and Section 8.4 hereof;
(h) All delay periods and all periods for review, objection or appeal
of or to any of the consents, approvals or permissions required with
respect to the consummation of the Merger and this Agreement shall have
expired;
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(i) Unless waived by Wesbanco and Commercial, 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 Commercial shareholders referred to in Section 13.1 hereof and
have made written demand for the fair value of such Voting Shares within
ten days;
(j) On or before the Closing Date, there shall have been received an
opinion from Kirkpatrick & Lockhart, LLP in a form reasonably satisfactory
to counsel for Commercial substantially to the effect that for Federal
Income Tax purposes:
(i) The statutory merger of Commercial with CBI will constitute a
reorganization within the meaning of Section 368(a)(1) of the Internal
Revenue Code of 1986 ("IRC"), and Wesbanco, Commercial and CBI will each
be a "party to the reorganization" as defined in IRC Section 368(b);
(ii) No gain or loss will be recognized by Wesbanco, Commercial or
CBI as a result of the transactions contemplated in the Agreement;
(iii) No gain or loss will be recognized by the shareholders of
Commercial as a result of their exchange of Commercial 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 Commercial Common Stock will include the period during
which the stock of Commercial 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 Commercial Common Stock will be the same as
the basis of the stock exchanged therefore.
(k) No action, proceeding, regulation or legislation shall have been
instituted before any court, governmental agency or legislative body to
enjoin, restrain or prohibit, or to obtain substantial damages with respect
to, the Agreement or the consummation of the transactions contemplated
hereby, which, in the reasonable judgment of Wesbanco or Commercial, would
make it inadvisable to consummate such transactions (it being understood
and agreed that a written request by governmental authorities for
information with respect to the Merger may not be deemed by either party to
be a threat of material litigation or proceeding, regardless of whether
such request is received before or after execution of the Agreement).
(l) The approvals referred to in subparagraphs (b), (c) and (d) of
Subsection 11.1 herein shall not have required the divestiture or cessation
of any material part of the present operations conducted by Wesbanco,
Commercial 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
Commercial 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 Commercial and
its Subsidiaries taken as a whole, or which are the result of expenses or
transactions contemplated or permitted by the Agreement, and Commercial
shall have performed in all material respects all of its obligations and
agreements hereunder theretofore to be performed by it; and Wesbanco and
CBI shall have received on the Effective Date an appropriate certificate
(in affidavit form) dated the Effective Date and executed on behalf of
Commercial by one or more appropriate executive officers of Commercial to
the effect that such officers have no knowledge of the non-fulfillment of
the foregoing condition;
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(b) Opinion of Commercial Counsel. An opinion of counsel from the law
firm of Hunton & Williams, counsel for Commercial, 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) Commercial 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, or its Subsidiaries, to be qualified to do
business in any other jurisdiction except where the failure to be so
qualified, considering all such cases in the aggregate, does not involve
a material risk to the business, properties, financial position or
results of operations of Commercial and its Subsidiaries, taken as a
whole.
(ii) Commercial has the full corporate power to execute and deliver
the Agreement and Plan of Merger. All corporate action of Commercial
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 Commercial 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 Commercial 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 Commercial'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 Commercial 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 known to such counsel to which Commercial is
subject, which would have a materially adverse effect on the assets,
business or operations of Commercial, taken as a whole.
(v) Commercial's Subsidiaries are West Virginia and Ohio
corporations and are duly organized, validly existing and in good
standing under the laws of the States of West Virginia and Ohio and have
the requisite corporate power and authority to own and lease their
properties and to conduct their businesses as they are now being
conducted. To the best of such counsel's knowledge, Commercial owns 100%
of the issued and outstanding stock of such corporations.
(vi) To the best of such counsel's knowledge, as of the date hereof
neither Commercial nor 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 Wesbanco.
(vii) The rights issued to shareholders of Commercial pursuant to
the Shareholder Rights Plan adopted by Commercial on August 14, 1996
(the "Rights Plan") have been redeemed in accordance with the terms of
the Rights Plan. The right to exercise the rights and the Rights Plan
have been terminated in accordance with the provisions of such plan,
with no further obligations to the shareholders of Commercial, and are
no longer in force or effective.
(c) Unless waived by Wesbanco, on or before the Effective Date, Ernst
& Young, LLP, the independent auditors for Wesbanco, shall have rendered an
opinion to Wesbanco that the Merger will be treated as a "pooling of
interest" for accounting purposes.
(d) Commercial shall have delivered to Wesbanco a schedule identifying
all persons who may be deemed to be "affiliates" of Commercial 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) William E. Mildren, Jr., Larry G. Johnson, W. Bryan Pennybacker,
James A. Meagle, Jr., Thomas M. Lookbaugh and C. Randall Law shall have
duly executed and delivered employment
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agreements with Commercial and/or its Subsidiaries or successors, dated as
of the Closing Date, in substantially the form attached hereto as Exhibits
B, C, D, E, F and G.
(f) Commercial shall have furnished Wesbanco with a certified copy of
resolutions duly adopted by the Board of Directors and the shareholders of
Commercial 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 Commercial or its Subsidiaries or the officers or directors
of Commercial or its Subsidiaries in their capacity as such, any suit,
action or proceeding, including the case styled Citizens Bancshares, Inc.
v. Commercial Bancshares, Inc. filed in the United States District Court
for the Northern District of Ohio, Eastern Division and the proposed
intervention therein by Peoples Bancorp, Inc. and the Complaint filed by
Peoples Bancorp, Inc. styled Peoples Bancorp, Inc. v. Commercial
Bancshares, Inc. which, in the reasonable judgment of Wesbanco, if
successful, could have a material adverse effect on the financial condition
or operations of Commercial or its Subsidiaries. For purposes of this
subsection 11.2(g), the pendency at the Closing Date of the suits named
above shall not constitute a failure of condition giving Wesbanco the right
to terminate the Agreement pursuant to Section 12.1(b) unless (i)
Wesbanco's Board of Directors, acting reasonably and upon the advice of
counsel, concludes that such suits could result in a loss exposure to
Commercial, including fees, expenses and damages of $250,000 or more, or
(ii) injunctive relief or specific performance has been awarded to Citizens
or Peoples or substantive requests for the same are pending, which
injunctive relief or specific performance, in the judgment of Wesbanco's
Board of Directors, acting reasonably and upon the advice of counsel, could
materially hinder consummation of the Merger.
(h) Commercial shall have executed and delivered to Wesbanco an Option
Agreement, substantially in the form attached hereto as Exhibit H, dated
the 12th day of September, 1997 (the "Option Agreement"), and incorporated
herein by reference.
(i) The rights issued under the Rights Plan shall have been redeemed
in accordance with the terms of the Rights Plan. The right to exercise the
rights and the Rights Plan shall have been terminated in accordance with
the provisions of such plan, with no further obligations to the
shareholders of Commercial, and the rights and the Rights Plan are no
longer in force or effective. No right or claim pursuant to the Rights Plan
shall have been made, alleged, or threatened by any shareholder of
Commercial.
(j) Unless waived by Wesbanco, Gateway Bancshares, Inc. shall have
executed and delivered to Wesbanco the First Amendment Agreement modifying
certain terms of that Agreement and Plan of Merger dated August 15, 1997,
by and between Commercial, Gateway Bancshares, Inc. and CWV Holding
Company, Inc., in the form, or substantially the form, attached hereto as
Exhibit I and made a part hereof.
11.3 Conditions Precedent of Commercial. The consummation of this Agreement
by Commercial and the Merger is also conditioned upon the following:
(a) Unless waived by Commercial the representations and warranties of
Wesbanco and CBI 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
Commercial or which are not in the aggregate material and adverse to the
financial condition, businesses, properties or operations of Wesbanco and
CBI or which are the result of expenses or transactions contemplated or
permitted by this Agreement, and Wesbanco and CBI shall have performed in
all material respects all of their obligations and agreements hereunder
theretofore to be performed by them; and Commercial shall have received on
the Effective Date an appropriate certificate (in affidavit form) dated the
Effective Date and executed on behalf of Wesbanco and CBI by one or more
appropriate executive officers of each of them to the effect that such
officers have no knowledge of the non-fulfillment of the foregoing
conditions;
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(b) Opinion of Wesbanco Counsel. An opinion of Phillips, Gardill,
Kaiser & Altmeyer, counsel for Wesbanco, shall have been delivered to
Commercial, dated the Closing Date, and in form and substance satisfactory
to Commercial and its counsel, to the effect that:
(i) Wesbanco and CBI 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, 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, CBI and the
Wesbanco Subs, taken as a whole.
(ii) Wesbanco and CBI have the full corporate power to execute and
deliver the Agreement and Plan of Merger. All corporate action of
Wesbanco and CBI 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 Wesbanco and CBI 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 Commercial 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 CBI's
Articles of Incorporation or Bylaws, or violate any provision of, or
result in the acceleration of any material obligation under, any
material mortgage, loan agreement, order, judgment, law or decree known
to such counsel to which Wesbanco or CBI 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 CBI are subject which would have a material adverse effect
on the assets, business or operations of Wesbanco and CBI, 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 Commercial.
(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 such counsel is not aware of any stop
orders in effect with regard to such Registration Statement.
(c) Danielson Associates, Inc., financial advisors to Commercial,
shall have furnished to Commercial 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 Commercial, updated as of the Closing if
the Closing is held more than five (5) days after the Commercial meeting of
shareholders, to the effect that the Merger and transactions contemplated
by this Agreement are fair, from a financial point of view, to Commercial
and its shareholders.
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(d) Wesbanco and CBI shall have furnished Commercial with certified
copies of resolutions duly adopted by the Boards of Directors of Wesbanco
and CBI and the shareholders of CBI approving the Agreement and authorizing
the Merger and transactions contemplated hereby.
(e) Unless waived by Commercial, 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
Commercial, if successful, would have a material adverse effect on the
financial condition or operations of Wesbanco or any of its subsidiaries.
(f) Unless waived by Commercial, there shall not have been any change
in control of Wesbanco since July 1, 1997.
(g) Wesbanco shall assume the obligations of Commercial arising under
the Change in Control Arrangements with William E. Mildren, Jr. and Larry
G. Johnson dated November 1, 1996, as amended by Exhibits F and G.
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 Commercial or
Wesbanco, whichever is later, at which the Agreement is approved;
(b) The fifteenth (15th) day after the approval of the acquisition of
Commercial 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 Commercial 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 Commercial by the
West Virginia Department of Banking is received by Wesbanco;
(e) The date on which the conditions set forth in Section 11 are
satisfied or waived;
(f) Such other date as shall be mutually agreed to by Wesbanco and
Commercial.
The Closing shall be held in Parkersburg, 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 Wood 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 Commercial:
(a) By mutual consent of Commercial and Wesbanco;
(b) By either Commercial 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 Commercial or Wesbanco if the Merger shall violate any
non-appealable final order, decree or judgment of any court or governmental
body having competent jurisdiction;
(d) By Commercial or Wesbanco, if the Closing Date has not occurred by
March 31, 1998;
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(e) By Commercial, unless waived by Commercial, if the Market Value of
Wesbanco stock shall fall below $25.00 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 Commercial
or the shareholders of Wesbanco vote against consummation of the Merger.
(g) By Wesbanco or Commercial within 7 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 Commercial under this Agreement, except Sections 9, 12.1, 12.2, and
19 hereof, shall terminate without further liability of Wesbanco and CBI to
Commercial or of Commercial to Wesbanco and CBI.
12.3 Return of Documents in Event of Termination. In the event of
termination of this Agreement for any reason, Wesbanco and Commercial 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 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 COMMERCIAL AND WESBANCO
13.1 Subject to receipt by Commercial of the fairness opinion described in
Section 11.3(c) hereof, Commercial 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 Commercial 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 Commercial or omit to state a material fact with
respect to Commercial 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 Wesbanco 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 Wesbanco 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 Wesbanco or
omit to state a material fact with respect to Wesbanco required to be stated
therein or necessary to make the statements contained there, in light of the
circumstances under which they were made, not misleading, and which otherwise
materially complied as to form with all applicable laws, sales and regulations.
13.3 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
Commercial and Wesbanco. Accordingly, Wesbanco and Commercial agree to assist
and cooperate fully with each other in the preparation of the Registration
Statement. Both Commercial and Wesbanco further agree to deliver to each other,
both as of the Effective Date of the Registration Statement and as of the
Closing, a letter, in form and substance satisfactory to the other party and its
counsel, stating that, to the best of their knowledge and belief, all of the
facts with respect
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to either Wesbanco or Commercial, 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
Commercial represents and warrants to Wesbanco and Wesbanco represents and
warrants to Commercial 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
Commercial to Danielson Associates, Inc., its financial advisor.
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 and Commercial when one or more counterparts shall have been signed
and delivered by Wesbanco and Commercial and shall become effective and binding
as to CBI when CBI receives its Certificate of Incorporation and its officers
execute the Agreement; and (d) embodies the entire Agreement and understanding
of the parties with respect to the subject matter hereof; and (e) supersedes all
prior agreements and understandings, written or oral, between Commercial 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 7.21(d) hereof, any notices or
other communication required or permitted hereunder shall be sufficiently given
if delivered personally or sent by first class, registered or certified mail
postage prepaid, with return receipt requested addressed as follows:
To Commercial:
Commercial Bancshares, Incorporated
415 Market Street
Parkersburg, WV 26101
ATTENTION: William E. Mildren, Jr., President
With a copy to:
Hunton & Williams
951 East Byrd Street
Richmond, Virginia 23219-4074
ATTENTION: Lathan M. Ewers, Esq.
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To Wesbanco:
Wesbanco, Inc.
One Bank Plaza
Wheeling, WV 26003
ATTENTION: Edward M. George, President
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 Commercial 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 Commercial shall be
converted in the Merger and any other material terms of the Merger shall not be
amended after the meeting of Commercial shareholders unless the amended terms
are resubmitted to the shareholders for approval. Neither the Agreement nor any
provisions hereof, may be changed, waived, discharged or terminated orally, or
by the passage of time, except by a statement in writing signed by the party
against which the enforcement of such change, waiver, discharge or termination
is sought.
SECTION 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
and Commercial upon the date first above written and effective and binding as to
CBI upon execution hereof by CBI.
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IN WITNESS WHEREOF, Wesbanco and Commercial 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 and CBI has caused this Agreement to be
executed on its behalf by its officers thereunto duly authorized as of the date
set forth below.
WESBANCO, INC., a West Virginia
corporation
By /s/ EDWARD M. GEORGE
-----------------------------------
Its President
[SEAL]
ATTEST:
/s/ SHIRLEY A. BUCAN
- ------------------------------------
Secretary
COMMERCIAL BANCSHARES,
INCORPORATED, a West Virginia
corporation
By /s/ WILLIAM E. MILDREN, JR.
-----------------------------------
Its President
[SEAL]
ATTEST:
/s/ LARRY G. JOHNSON
- ------------------------------------
Secretary
CBI CORPORATION, a West Virginia
corporation as of the day
of ,
19 .
By
------------------------------------
Its
------------------------------------
[SEAL]
ATTEST:
- ------------------------------------------------------
Secretary
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<PAGE> 94
APPENDIX II
STOCK OPTION AGREEMENT
This STOCK OPTION AGREEMENT ("Option Agreement") dated as of the 12th day
of September, 1997, by and between WESBANCO, INC., a West Virginia corporation
("Wesbanco") and COMMERCIAL BANCSHARES, INCORPORATED, a West Virginia
corporation ("Commercial").
WITNESSETH:
WHEREAS, the Boards of Directors of Wesbanco and Commercial have approved a
Binding Letter of Intent ("Agreement"), which contemplates the merger of
Commercial with and into CBI Corporation, a West Virginia corporation and
wholly-owned subsidiary of Wesbanco ("CBI"), with CBI continuing as the
surviving corporation; subject to the execution of a definitive merger agreement
which the parties agree to negotiate in good faith, and
WHEREAS, as a condition to Wesbanco's entry into the Agreement and to
induce such entry, Commercial has agreed to grant to Wesbanco the option set
forth herein to purchase authorized but unissued shares of common stock, par
value $5.00 per share of Commercial ("Commercial Common Stock");
NOW, THEREFORE, in consideration of the premises herein contained, the
parties agree as follows:
1. Definitions. Capitalized terms which are to be defined in the Merger
Agreement and used herein shall have the same meanings as in the Merger
Agreement. The parties have prepared a draft of said Merger Agreement and
incorporate the referenced provisions of said draft language into this Agreement
as if set forth herein verbatim. A copy of said draft Merger Agreement is
attached hereto as Exhibit A (hereinafter "Merger Agreement").
2. Grant of Option. Subject to the terms and conditions set forth herein,
Commercial hereby grants to Wesbanco an option ("Option") to purchase up to
321,620 shares of Commercial Common Stock, at a price of $50.00 per share (the
"Option Price") payable in cash as provided in Section 4 hereof; provided,
however, that in the event Commercial issues or agrees to issue any shares of
Commercial Common Stock (other than as permitted under the Agreement) at a price
less than $50.00 per share (as adjusted pursuant to Section 6 hereof), the
exercise price shall be equal to such lesser price.
3. Exercise of Option.
a. Provided that Wesbanco is not in material breach of the agreements
and covenants contained in the Agreement, Wesbanco may exercise the Option,
in whole or in part, at any time or from time to time if a Purchase Event
(as defined below) shall have occurred and be continuing; provided that to
the extent the Option shall not have been exercised, it shall terminate and
be of no further force and effect (i) on the Effective Date of the Merger
or (ii) upon termination of the Merger Agreement in accordance with the
provisions thereof (other than a termination resulting from a willful
breach by Commercial of Section 7.21(d) of the Merger Agreement or,
following the occurrence of a Purchase Event, failure of Commercial's
shareholders to approve the Merger Agreement by the vote required under
applicable law), or (iii) six months after termination of the Merger
Agreement due to a willful breach by Commercial of Section 7.21(d) of the
Merger Agreement or, following the occurrence of a Purchase Event, failure
of Commercial's shareholders to approve the Merger Agreement by the vote
required under applicable law; and provided further that any such exercise
shall be subject to compliance with applicable provisions of law.
b. As used herein, a "Purchase Event" shall mean any of the following
events or transactions occurring after the date hereof:
(i) any person (other than Commercial, any Commercial Subsidiary,
Wesbanco or any affiliate of Wesbanco) shall have commenced a bona fide
tender or exchange offer to purchase shares of Commercial Common Stock
such that upon consummation of such offer such person would own or
control 15% or more of the outstanding shares of Commercial Common
Stock;
(ii) any person (other than Commercial or any Commercial
Subsidiary), other than in connection with a transaction to which
Wesbanco has given its prior written consent, shall have filed
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<PAGE> 95
an application or notice with any federal or state regulatory agency for
clearance or approval, to (x) merge or consolidate, or enter into any
similar transaction, with Commercial or any Commercial Subsidiary, (y)
purchase, lease or otherwise acquire all or substantially all of the
assets of Commercial or any Commercial Subsidiary or (z) purchase or
otherwise acquire (including by way of merger, consolidation, share
exchange or any similar transaction) securities representing 51% or more
of the voting power of Commercial or any Commercial Subsidiary;
(iii) any person (other than Commercial, any Commercial Subsidiary,
the Commercial Subsidiaries in a fiduciary capacity, Wesbanco,
affiliates of Wesbanco or subsidiaries of Wesbanco in a fiduciary
capacity) shall have acquired after the date hereof beneficial ownership
or the right to acquire beneficial ownership of 15% or more of the
outstanding shares of Commercial Common Stock (the term "beneficial
ownership" for purposes of this Option Agreement having the meaning
assigned thereto in Section 13(d) of the Exchange Act and the
regulations promulgated thereunder);
(iv) any person (other than Commercial or any Commercial
Subsidiary) shall have made a bona fide proposal to Commercial by public
announcement or written communication that is or becomes the subject of
public disclosure to (x) acquire Commercial or any Commercial Subsidiary
by merger, consolidation, purchase of all or substantially all of its
assets or any other similar transaction, or (y) make an offer described
in clause (i) above; or
(v) Commercial shall have willfully breached Section 7.21(d) of the
Merger Agreement, which breach would entitle Wesbanco to terminate such
Merger Agreement and such breach shall not have been cured prior to the
Notice Date (as defined below).
If more than one of the transactions giving rise to a Purchase Event under this
Section 3(b) is undertaken or effected, then all such transactions shall give
rise only to one Purchase Event, which Purchase Event shall be deemed continuing
for all purposes hereunder until all such transactions are abandoned. As used in
this Option Agreement, "person" shall have the meanings specified in Sections
3(a)(9) and 13(d)(3) of the Exchange Act.
c. In the event Wesbanco wishes to exercise the Option, it shall send
to Commercial a written notice (the date of which being herein referred to
as "Notice Date") specifying (i) the total number of shares it will
purchase pursuant to such exercise, and (ii) a place and date not earlier
than three business days nor later than 60 business days from the Notice
Date for the closing of such purchase ("Closing Date"); provided that if
prior notification to or approval of any federal or state regulatory agency
is required in connection with such purchase, Wesbanco shall promptly file
the required notice or application for approval and shall expeditiously
process the same and the period of time that otherwise would run pursuant
to this sentence shall run instead from the date on which any required
notification period has expired or been terminated or such approval has
been obtained and any requisite waiting period shall have passed.
4. Payment and Delivery of Certificates.
a. At the closing referred to in Section 3(c) hereof, Wesbanco shall
pay to Commercial the aggregate purchase price for the shares of Commercial
Common Stock purchased pursuant to the exercise of the Option in
immediately available funds by a wire transfer to a bank account designated
by Commercial.
b. At such closing, simultaneously with the delivery of cash as
provided in subsection (a), Commercial shall deliver to Wesbanco a
certificate or certificates representing the number of shares of Commercial
Common Stock purchased by Wesbanco, and Wesbanco shall deliver to
Commercial a letter agreeing that Wesbanco will not offer to sell or
otherwise dispose of such shares in violation of applicable law or the
provisions of this Option Agreement.
c. Certificates for Commercial Common Stock delivered at a closing
hereunder may be endorsed with a restrictive legend which shall read
substantially as follows:
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"The transfer of the shares represented by this certificate is
subject to certain provisions of an agreement between the registered
holder hereof and Commercial Bancshares, Incorporated and to resale
restrictions arising under the Securities Act of 1933, as amended, a
copy of which agreement is on file at the principal office of Commercial
Bancshares, Incorporated. A copy of such agreement will be provided to
the holder hereof without charge upon receipt by Commercial Bancshares,
Incorporated of a written request."
It is understood and agreed that the above legend shall be removed by delivery
of substitute certificate(s) without such legend if Wesbanco shall have
delivered to Commercial a copy of a letter from the staff of the Securities and
Exchange Commission, or an opinion of counsel, in form and substance reasonably
satisfactory to Commercial, to the effect that such legend is not required for
purposes of the Securities Act.
5. Representations. Commercial hereby represents, warrants and covenants to
Wesbanco as follows:
a. Commercial shall at all times maintain sufficient authorized but
unissued shares of Commercial Common Stock so that the Option may be
exercised without authorization of additional shares of Commercial Common
Stock.
b. The shares to be issued upon due exercise, in whole or in part, of
the Option, when paid for as provided herein, will be duly authorized,
validly issued, fully paid and nonassessable.
6. Adjustment Upon Changes in Capitalization. In the event of any change in
Commercial Common Stock by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, exchanges of shares or the like, the type and
number of shares subject to the Option, and the purchase price per share, as the
case may be, shall be adjusted appropriately. In the event that any additional
shares of Commercial Common Stock are issued or otherwise become outstanding
after the date of this Option Agreement (other than pursuant to this Option
Agreement), the number of shares of Commercial Common Stock subject to the
Option shall be adjusted so that, after such issuance, it equals 19.9% of the
number of shares of Commercial Common Stock then issued and outstanding without
giving effect to any shares subject or issued pursuant to the Option. Nothing
contained in this Section 6 shall be deemed to authorize Commercial to breach
any provision of the Merger Agreement.
7. Registration Rights. Commercial shall, if requested by Wesbanco, as
expeditiously as possible file a registration statement on a form of general use
under the Securities Act if necessary in order to permit the sale or other
disposition of the shares of Commercial Common Stock that have been acquired
upon exercise of the Option in accordance with the intended method of sale or
other disposition requested by Wesbanco. Wesbanco shall provide all information
reasonably requested by Commercial for inclusion in any registration statement
to be filed hereunder. Commercial will use its best efforts to cause such
registration statement first to become effective and then to remain effective
for such period not in excess of 270 days from the day such registration
statement first becomes effective as may be reasonably necessary to effect such
sales or other dispositions. In no event shall Commercial be required to effect
more than two registrations hereunder. All expenses of registrations hereunder
shall be borne equally by Commercial and Wesbanco. The filing of any
registration statement hereunder may be delayed for such period of time as may
reasonably be required to facilitate any public distribution by Commercial of
Commercial Common Stock. If requested by Wesbanco, in connection with any such
registration, Commercial will become a party to any underwriting agreement
relating to the sale of such shares, but only to the extent of obligating itself
in respect of representations, warranties, indemnities and other agreements
customarily included in such underwriting agreements. Upon receiving any request
from Wesbanco or assignee thereof under this Section 7, Commercial agrees to
send a copy thereof to Wesbanco and to any assignee thereof known to Commercial,
in each case by promptly mailing the same, postage prepaid, to the address of
record of the persons entitled to receive such copies.
8. Severability. If any term, provision, covenant or restriction contained
in this Option Agreement is held by a court or a federal or state regulatory
agency of competent jurisdiction to be invalid, void or unenforceable, the
remainder of the terms, provisions and covenants and restrictions contained in
this Option Agreement shall remain in full force and effect, and shall in no way
be affected, impaired or invalidated. If for any reason such court or regulatory
agency determines that the Option will not permit the holder to acquire the full
number of shares of Commercial Common Stock provided in Section 2 hereof (as
adjusted pursuant to Section 6
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hereof), it is the express intention of Commercial to allow the holder to
acquire such lesser number of shares as may be permissible, without any
amendment or modification hereof.
9. Put-Back Rights.
a. Upon the consummation of any Purchase Event described in Section
3(b)(ii) or (v) hereof such that (i) a merger, consolidation, purchase,
lease or acquisition of all or substantially all of the assets of
Commercial , purchase or other acquisition of securities representing 51%
or more of the voting power of Commercial or any Commercial Subsidiary has
been consummated, or (ii) a willful breach under Section 7.21(d) of the
Merger Agreement has occurred so that Wesbanco would be entitled to
terminate the Merger Agreement, and prior to the expiration of the Option
in accordance with the terms hereof, at the request of Wesbanco, Commercial
shall repurchase the Option from Wesbanco at a price (the "Repurchase
Price") equal to the difference between the market/offer price (as defined
below) for shares of Commercial Common Stock and the Option Price,
multiplied by the number of shares for which the Option being surrendered
hereunder may then be exercised but only if the market/offer price is
greater than the Option Price (the market/offer price is defined as the
higher of the price per share at which a tender offer or exchange offer for
51% or more of the voting securities of Commercial has been made and
consummated, the price per share actually paid by any third party pursuant
to an agreement that has been consummated whereby Commercial has been
merged, consolidated with or otherwise acquired by a third party, and the
highest closing price for Commercial Common Stock within the four-month
period immediately preceding the date Wesbanco gives written notice of the
required repurchase of the Option pursuant to this Section 9). In the event
that an exchange offer is made or an agreement is entered into for a merger
or consolidation involving consideration other than cash, the value of the
securities or other property issuable or deliverable in exchange for
Commercial Common shall be determined by a nationally recognized investment
banking firm mutually acceptable to the parties hereto.
b. Wesbanco may exercise its right to require Commercial to repurchase
the Option pursuant to this Section 9 by giving Commercial written notice
of its exercise of its repurchase right in accordance with the provisions
of this Section 9. Subject to the last proviso of paragraph 9(c) below, as
promptly as practicable, and in any event within five business days after
the receipt of such notice or notices relating thereto, Commercial shall
deliver or cause to be delivered to Wesbanco the Repurchase Price for the
Option or the portion thereof which Commercial is not then prohibited under
applicable law and regulation from so delivering.
c. To the extent that Commercial is prohibited under applicable law or
regulation, or as a result of administrative or judicial action, from
repurchasing the Option in full, Commercial shall immediately so notify
Wesbanco and thereafter deliver or cause to be delivered, from time to
time, to Wesbanco, as appropriate, the portion of the Repurchase Price
which it is no longer prohibited from delivering, within five business days
after the date on which Commercial is no longer so prohibited, provided,
however, that to the extent that Commercial is at the time and after the
expiration of 12 months, so prohibited from delivering to Wesbanco, the
Repurchase Price, in full (and Commercial hereby undertakes to use its best
efforts to receive all required regulatory and legal approvals as promptly
as practicable), Commercial shall deliver to Wesbanco a new Option
evidencing the right of Wesbanco to purchase that number of shares of
Commercial Common Stock obtained by multiplying the number of shares of
Commercial Common Stock for which the Option may at such time be exercised
by a fraction, the numerator of which is the Repurchase Price less the
portion thereof (if any) theretofore delivered to the Holder and the
denominator of which is the Repurchase Price, and Commercial shall have no
further obligation to repurchase such new Option; and provided, further,
that upon receipt of such notice and until five days thereafter Wesbanco
may revoke its notice of repurchase of the Option by written notice to
Commercial at its principal office stating that Wesbanco elects to revoke
its election to exercise its rights to require Commercial to repurchase the
Option, whereupon Commercial will promptly deliver to Wesbanco the Option
and Commercial shall have no further obligation to repurchase such Option.
10. First Refusal. If at any time during the eighteen months immediately
following the first purchase of shares of Commercial Common Stock pursuant to
the Option, Wesbanco shall desire to sell, assign, transfer or otherwise dispose
of all or any of the shares of Commercial Common Stock acquired by it pursuant
to the
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Option other than in accordance with the put-back rights in Section 9 hereof, it
shall give Commercial written notice of the proposed transaction ("Offeror's
Notice"), identifying the proposed transferee and setting forth the terms of the
proposed transaction. An Offeror's Notice shall be deemed an offer by Wesbanco
to Commercial, which may be accepted within ten business days of the receipt of
such Offeror's Notice, on the same terms and conditions and at the same price at
which Wesbanco is proposing to transfer such shares to a third party. Settlement
for any shares purchased by Commercial shall be within 15 business days of the
date of the acceptance of the offer and the purchase price shall be paid to
Wesbanco in immediately available funds; provided that if prior notification to
or approval of any federal or state regulatory authority is required in
connection with such purchase, Commercial shall promptly file the required
notice or application for approval and shall expeditiously process the same and
the period of time that otherwise would run pursuant to this sentence shall run
instead from the date on which any required notification period has expired or
been terminated or such approval has been obtained and any requisite waiting
period shall have passed. In the event of the failure or refusal of Commercial
to purchase all of the shares covered by the Offeror's Notice or any applicable
regulatory authority shall disapprove Commercial's proposed purchase of such
shares, Wesbanco may sell all, but not less than all, of such shares to such
third party at no less than the price specified and on terms no more favorable
than those set forth in the Offeror's Notice. The requirements of this Section 9
shall not apply to any disposition (i) as a result of which the proposed
transferee would own not more than five percent of the then outstanding shares
of Commercial Common Stock, (ii) of Commercial Common Stock by a person to which
Wesbanco has assigned its rights under the Option in accordance with Section
11(c) hereof or (iii) pursuant to a registration under Section 7 hereof.
11. Miscellaneous.
a. Expenses. Except as otherwise provided herein, each of the parties
hereto shall bear and pay all costs and expenses incurred by it or on its
behalf in connection with the transactions contemplated hereunder,
including fees and expenses of its own financial consultants, investment
bankers, accountants and counsel.
b. Entire Agreement. Except as otherwise expressly provided herein,
this Option Agreement contains the entire agreement between the parties
with respect to the transactions contemplated hereunder and supersedes all
prior arrangements or understandings with respect thereto, written or oral.
The terms and conditions of this Option Agreement shall inure to the
benefit of and be binding upon the parties hereto and their respective
successors and assigns. Nothing in this Option Agreement, expressed or
implied, is intended to confer upon any party, other than the parties
hereto, and their respective successors and assigns, any rights, remedies,
obligations or liabilities under or by reason of this Option Agreement,
except as expressly provided herein.
c. Assignment. Neither of the parties hereto may assign any of its
rights or obligations under this Option Agreement or the Option created
hereunder to any other person, without the express written consent of the
other party.
d. Notices. All notices or other communications which are required or
permitted hereunder shall be in writing and sufficient if delivered in the
manner and to the addresses provided for in or pursuant to Section 17 of
the Merger Agreement.
e. Counterparts. This Option Agreement may be executed in any number
of counterparts, and each such counterpart shall be deemed to be an
original instrument, but all such counterparts together shall constitute
but one agreement.
f. Specific Performance. The parties agree that damages would be an
inadequate remedy for a breach of the provisions of this Option Agreement
by either party hereto and that this Option Agreement may be enforced by
either party hereto through injunctive or other equitable relief.
g. Governing Law. This Option Agreement shall be governed by and
construed in accordance with the laws of the State of West Virginia
applicable to agreements made and entirely to be performed within such
state and such federal laws as may be applicable.
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IN WITNESS WHEREOF, each of the parties hereto has executed this Option
Agreement as of the day and year first written above.
WESBANCO, INC.
By /s/ EDWARD M. GEORGE
-----------------------------------
Its President
COMMERCIAL BANCSHARES,
INCORPORATED
By /s/ LARRY G. JOHNSON
-----------------------------------
Its Executive Vice President and CFO
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APPENDIX III
DANIELSON ASSOCIATES INC.
6110 EXECUTIVE BOULEVARD
SUITE 504
ROCKVILLE, MARYLAND 20852-3903
TEL: (301) 468-4884
FAX: (301) 468-0013
February 9, 1998
Board of Directors
Commercial Bancshares, Inc.
415 Market Street
P.O. Box 1427
Parkersburg, West Virginia 26101
Dear Members of the Board:
Set forth herein is the updated opinion of Danielson Associates Inc.
("Danielson Associates") as to the "fairness" of the offer by WesBanco, Inc.
("WesBanco") of Wheeling, West Virginia to acquire all of the common stock of
Commercial BancShares, Incorporated ("Commercial") of Parkersburg, West
Virginia. The "fair" sale value is defined as the price at which all of the
shares of Commercial's common stock would change hands between a willing seller
and a willing buyer, each having reasonable knowledge of the relevant facts. In
opining to the "fairness" of the offer, it also must be determined if the
WesBanco common stock to be exchanged is "fairly" valued.
In preparing the original opinion dated September 12, 1997, Commercial's
market was analyzed; its business and prospects were discussed with its
management; and its financial performance was compared with other West Virginia
banks. Any unique characteristics also were considered.
This opinion was based partly on data supplied to Danielson Associates by
Commercial, but it relied on some public information all of which is believed to
be reliable, but neither the completeness nor the accuracy of such information
could be guaranteed. In particular, the opinion assumed, based on its
management's representation, that there were no significant asset quality
problems beyond what was stated in recent reports to regulatory agencies and in
the monthly report to the directors.
In determining the "fair" sale value of Commercial, the primary emphasis
was on prices paid relative to earnings for banks in Commercial's region that
had similar financial, structural and market characteristics. These prices were
then related to assets and equity capital, also referred to as "book."
The "fair" market value of WesBanco's common stock to be exchanged for
Commercial stock was determined by a comparison with other similar bank holding
companies and included no in person due diligence of WesBanco. This comparison
showed WesBanco stock to be valued consistent with the comparable banks.
In the original opinion, based on the analysis of Commercial's recent
performance and its future potential, comparisons with similar transactions and
unique characteristics, it was determined that its "fair" sale value was between
$105 and $115 million, or $60.61 to $66.39 per share. Thus, WesBanco's offer of
$135.8 million, or $78.39 per share, was a "fair" offer from a financial point
of view for Commercial and its shareholders.
There has been no subsequent change in WesBanco's performance and its stock
is trading at or above where it was at the time of the offer. Since the value of
the offer has moved upward and there has been no subsequent negative change to
WesBanco, this offer is still "fair" from a financial point of view to
Commercial and its shareholders.
Respectfully submitted,
Arnold G. Danielson
Chairman
Danielson Associates, Inc.
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APPENDIX IV
WEST VIRGINIA DISSENTERS' RIGHTS STATUTE
W.VA. CODE ANNOT. SECTION SEC.31-1-123
(a) Any shareholder electing to exercise his right to dissent, pursuant to
section one hundred twenty-two (sec.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.
(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
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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 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.
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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 sec.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 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
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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, vote of shareholders, members or disinterested
directors or otherwise, both as to action in his official capacity and as to
action in another capacity while holding such office, and shall continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors, and administrators of such a
person.
(g) A corporation shall have power to purchase and maintain insurance on
behalf of any person who is or was a director, officer, employee or agent of the
corporation, or is or was serving at the request of the corporation as a
director, officer, employee, or agent of another corporation, partnership, joint
partnership, joint venture, trust or other enterprise against any liability
asserted against him and incurred by him in any such capacity or arising out of
his status as such, whether or not the corporation would have the power to
indemnify him against such liability under the provisions of this section.
(1961,c.15; 1974,c.13; 1975,c.118.)
WesBanco does provide indemnity insurance to its officers and directors.
Such insurance will not, however, indemnify officers or directors for willful
misconduct or gross negligence in the performance of a duty to WesBanco.
Item 21. Exhibits and Financial Statement Schedules.
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT
- ------- -----------------------------------------------------------------------------------
<S> <C>
2.1 Agreement and Plan of Merger, By and Between WesBanco, Inc., Commercial Bancshares,
Incorporated and CBI Holding Company, dated September 30, 1997(1)
3.1 Articles of Incorporation of WesBanco Restated as of November 17, 1995(2)
3.2 Bylaws of WesBanco, Inc.(2)
4.1 Specimen Certificate of WesBanco Common Stock (3)
5.1 Opinion of Phillips, Gardill, Kaiser & Altmeyer as to the Legality of the Shares
Being Registered
8.1 Opinion of Kirkpatrick & Lockhart LLP as to Certain Tax Matters
</TABLE>
II-2
<PAGE> 105
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT
- ------- -----------------------------------------------------------------------------------
<S> <C>
10.1 The Stock Option Agreement By and Between WesBanco, Inc. and Commercial Bancshares,
Incorporated, dated September 12, 1997(8)
10.2 The Restated WesBanco Directors' Deferred Compensation Plan Effective December 15,
1994(2)
10.3 Employment Agreement Between Robert H. Martin, First National Bank in Fairmont and
WesBanco dated February 28, 1994(4)
10.4 Employment Agreement Between Ernest S. Fragale, WesBanco Mortgage Company and
WesBanco, Inc. dated the 20th Day of August, 1996(5)
10.5 Employment Agreement Between Frank R. Kerekes, First National Bank in Fairmont and
WesBanco dated February 28, 1994(4)
10.6 Employment Agreement Effective January 1, 1993, By and Between Edward M. George,
WesBanco and WesBanco Bank Wheeling(4)
10.7 Employment Agreement Effective January 1, 1993, By and Between Paul M. Limbert,
WesBanco and WesBanco Bank Wheeling(4)
10.8 Employment Agreement Effective January 1, 1993, By and Between Dennis P. Yaeger,
WesBanco and WesBanco Bank Wheeling(4)
10.9 Employment Agreement Effective January 1, 1993, By and Between Jerome B. Schmitt,
WesBanco and WesBanco Bank Wheeling(4)
10.10 Employment Agreement Effective December 2, 1991, By and Between Stephen F. Decker,
Albright National Bank of Kingwood, and WesBanco(4)
10.11 Employment Agreement Effective December 2, 1991, By and Between Rudy F. Torjak,
Albright National Bank of Kingwood, and WesBanco(4)
10.12 Employment Agreement Effective December 1, 1993, By and Between Thomas L. Jones,
WesBanco and WesBanco Bank South Hills(4)
10.13 Employment Agreement Effective January 1, 1993, By and Between John W. Moore, Jr.,
WesBanco and WesBanco Bank Wheeling(4)
10.14 Employment Agreement By and Between The National Bank of West Virginia, WesBanco,
Inc. and C. Barton Loar dated December 30, 1996(5)
10.15 Employment Agreement By and Between Brenda H. Robertson, WesBanco Bank South Hills
and WesBanco, Inc. dated as of June 30, 1997(6)
11.1 Computation of Per Share Earnings of WesBanco (included in WesBanco's Annual Report
on Form 10-K for the fiscal year ended December 31, 1996 (as amended by Form 10 K/A
dated May 8, 1997)).
12.1 Computation of Earnings to Combined Fixed Charges of WesBanco and Commercial
(included in WesBanco's Annual Report on Form 10-K for the fiscal year ended
December 31, 1996 (as amended by Form 10 K/A dated May 8, 1997)).
13.1 The Annual Report on Form 10-K of WesBanco for the fiscal year ended December 31,
1996 (as amended by Form 10-K/A dated May 8, 1997) (incorporated by reference)
13.2 Quarterly Report on Form 10-Q of WesBanco for the fiscal quarter ended March 31,
1997 (incorporated by reference)
13.3 Quarterly Report on Form 10-Q of WesBanco for the fiscal quarter ended June 30,
1997 (incorporated by reference)
13.4 Quarterly Report on Form 10-Q of WesBanco for the fiscal quarter ended September
30, 1997 (incorporated by reference)
13.5 WesBanco's 1997 Definitive Proxy Statement filed pursuant to Section 14(a) of the
Securities Exchange of 1934, filed on March 14, 1997
</TABLE>
II-3
<PAGE> 106
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DOCUMENT
- ------- -----------------------------------------------------------------------------------
<S> <C>
21.1 Subsidiaries of WesBanco (included in WesBanco's Annual Report on Form 10-K for the
fiscal year ended December 31, 1996 (as amended by Form 10 K/A dated May 8, 1997)).
23.1 Consent of Phillips, Gardill, Kaiser & Altmeyer
23.2 Consent of Kirkpatrick & Lockhart LLP (included in opinion filed as Exhibit 8.1)
23.3 Consent of Ernst and Young LLP
23.4 Consent of Price Waterhouse LLP
23.5 Consent of Grant Thornton, LLP
23.6 Consent of Harman, Thompson, Mallory & Ice, A.C.
23.7 Consent of Danielson and Associates, Inc.
24.1 Power of Attorney (included on the signature page of this Registration Statement)
99.1 Form of Proxy of WesBanco
99.2 Form of Proxy of Commercial
99.3 Form of Voting Instruction Materials of WesBanco
99.4 Form of Voting Instruction Materials of Commercial, including those for Gateway
Bancshares, Inc.
</TABLE>
- ---------
(1) This exhibit is being incorporated by reference with respect to a prior
Quarterly Report on Form 10-Q of WesBanco for the fiscal quarter ended
September 30, 1997 which was filed with the Securities and Exchange
Commission on November 14, 1997.
(2) 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.
(3) 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.
(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. 33-72228 which was filed with the Securities and Exchange
Commission on November 30, 1993.
(5) 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.
(6) This exhibit is being incorporated by reference with respect to a prior
Registration Statement filed by Registrant on Form S-4 under Registration
No. 333-24171 which was filed with the Securities and Exchange Commission on
April 25, 1997.
(7) This exhibit is being incorporated by reference with respect to a prior
Annual Report on Form 10-K for Commercial for the fiscal year ended December
31, 1996 which was filed with the SEC on March 29, 1997.
(8) Incorporated by reference to a schedule 13D filed by WesBanco with the
Securities and Exchange Commission on September 22, 1997.
Item 22. Undertakings.
The undersigned registrant hereby undertakes as follows:
II-4
<PAGE> 107
(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 annual report to 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 14(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 are 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 or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering Prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(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.
(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.:
II-5
<PAGE> 108
(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.
II-6
<PAGE> 109
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 February 5, 1998.
WESBANCO, INC.
By: /s/ EDWARD 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.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------ ------------------------------------ ------------------
<C> <S> <C>
/s/ JAMES C. GARDILL Chairman, Director February 5, 1998
- ------------------------------------
James C. Gardill
/s/ EDWARD M. GEORGE President, Chief Executive February 5, 1998
- ------------------------------------ Officer & Director
Edward M. George (Principal Executive Officer)
/s/ PAUL M. LIMBERT Executive Vice President February 5, 1998
- ------------------------------------ & Chief Financial Officer
Paul M. Limbert (Principal Financial and
Accounting Officer)
Director February , 1998
- ------------------------------------
John W. Kepner
/s/ FRANK R. KEREKES Director February 5, 1998
- ------------------------------------
Frank R. Kerekes
Director February , 1998
- ------------------------------------
Robert H. Martin
Director February , 1998
- ------------------------------------
Melvin C. Snyder, Jr.
</TABLE>
II-7
<PAGE> 110
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------ ------------------------------------ ------------------
<C> <S> <C>
/s/ JOAN C. STAMP Director February 5, 1998
- ------------------------------------
Joan C. Stamp
/s/ JOHN A. WELTY Director February 5, 1998
- ------------------------------------
John A. Welty
/s/ JAMES E. ALTMEYER Director February 5, 1998
- ------------------------------------
James E. Altmeyer
Director February , 1998
- ------------------------------------
Richard K. Riederer
Director February , 1998
- ------------------------------------
Christopher V. Criss
Director February , 1998
- ------------------------------------
Stephen F. Decker
/s/ ROLAND L. HOBBS Director February 5, 1998
- ------------------------------------
Roland L. Hobbs
Director February , 1998
- ------------------------------------
Eric Nelson
Director February , 1998
- ------------------------------------
Reed J. Tanner
Director February , 1998
- ------------------------------------
Frank K. Abruzzino
Director February , 1998
- ------------------------------------
Earl C. Atkins
/s/ RAY A. BYRD Director February 5, 1998
- ------------------------------------
Ray A. Byrd
Director February , 1998
- ------------------------------------
James D. Entress
/s/ CARTER W. STRAUSS Director February 5, 1998
- ------------------------------------
Carter W. Strauss
/s/ JOHN R. SCHEESSELE Director February 5, 1998
- ------------------------------------
John R. Scheessele
/s/ WILLIAM E. WITSCHEY Director February 5, 1998
- ------------------------------------
William E. Witschey
</TABLE>
II-8
<PAGE> 111
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------ ------------------------------------ ------------------
<C> <S> <C>
/s/ ERNEST S. FRAGALE Director February 5, 1998
- ------------------------------------
Ernest S. Fragale
/s/ GEORGE M. MOLNAR Director February 5, 1998
- ------------------------------------
George M. Molnar
Director February , 1998
- ------------------------------------
R. Peterson Chalfant
/s/ J. CHRISTOPHER THOMAS Director February 5, 1998
- ------------------------------------
J. Christopher Thomas
</TABLE>
II-9
<PAGE> 112
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT SEQUENTIAL
NUMBER DOCUMENT PAGE NUMBER
- ------ ------------------------------------------------------------------------ -----------
<C> <S> <C>
5.1 Opinion of Phillips, Gardill, Kaiser & Altmeyer as to the Legality of
the Shares Being Registered
8.1 Opinion of Kirkpatrick & Lockhart LLP as to Certain Tax Matters
23.1 Consent of Phillips, Gardill, Kaiser & Altmeyer
23.2 Consent of Kirkpatrick & Lockhart LLP (included in opinion filed as
Exhibit 8.1)
23.3 Consent of Ernst and Young LLP
23.4 Consent of Price Waterhouse LLP
23.5 Consent of Grant Thornton, LLP
23.6 Consent of Harman, Thompson, Mallory & Ice, A.C.
23.7 Consent of Danielson and Associates, Inc.
24.1 Power of Attorney (included on the signature page of this Registration
Statement)
99.1 Form of Proxy of WesBanco
99.2 Form of Proxy of Commercial
99.3 Form of Voting Instruction Materials of WesBanco
99.4 Form of Voting Instruction Materials of Commercial, including those for
Gateway Bancshares, Inc.
</TABLE>
II-10
<PAGE> 1
Exhibit 5.1
[PHILLIPS, GARDILL, KAISER & ALTMEYER LETTERHEAD]
February 5, 1998
Wesbanco, Inc.
One Bank Plaza
Wheeling, WV 26003
RE: Proposed Acquisition of Commercial Bancshares Incorporated
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, Commercial Bancshares, Incorporated and CBI Holding Company
dated September 30, 1997 (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.
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
--------------------------
James C. Gardill
JCG/mmr
<PAGE> 1
Exhibit 8.1
February 5, 1998
Wesbanco, Inc.
Bank Plaza
Wheeling, West Virginia 26003
Commercial Bancshares, Incorporated
415 Market Street
Parkersburg, WV 26101
Ladies & Gentlemen:
You have requested our opinion regarding certain Federal
income tax consequences of a transaction (the "MERGER") in which Commercial
Bancshares, Incorporated ("COMMERCIAL"), will merge into CBI Holding Company
("CBI"), a wholly-owned subsidiary of Wesbanco, Inc. ("WESBANCO"). In the
Merger, each outstanding share of common stock of Commercial ("COMMERCIAL COMMON
STOCK"), will be converted into the right to receive 2.85 shares of common stock
of Wesbanco ("WESBANCO COMMON STOCK").
In rendering this opinion, we have reviewed the Agreement and
Plan of Merger, dated as of September 30, 1997, (the "MERGER AGREEMENT"), among
Wesbanco, Commercial and CBI, the Proxy Statement/Prospectus included in the
Registration Statement on Form S-4 filed by Wesbanco with the Securities and
Exchange Commission on February 5, 1998 (the "PROXY STATEMENT/PROSPECTUS") and
such other documents as we have deemed necessary or appropriate for purposes of
this opinion. We have assumed, without independent verification, the genuineness
of all signatures and the authenticity of all documents submitted to us. As to
various matters of fact material to this opinion, we have relied upon
certificates of officers of Commercial and Wesbanco. Our opinion is based on the
facts described below and in the afore-referenced officers' certificates and any
other relevant facts set forth in the Merger Agreement which are incorporated
herein as fully as though set forth herein.
All capitalized terms not otherwise defined herein have the
meanings given such terms in the Proxy Statement/Prospectus.
For purposes of this opinion, we have assumed that the Merger
will be consummated pursuant to the terms and conditions set forth in the Merger
Agreement. In addition, we have assumed the existence of the following facts,
which we understand will be confirmed to us in writing by officers of Wesbanco
and Commercial. We have neither investigated nor verified the accuracy of any of
the assumptions upon which this opinion is based.
<PAGE> 2
Wesbanco, Inc.
Commercial Bancshares, Incorporated
February 5, 1998
Page 2
1. The aggregate fair market value of the total consideration
to be paid to the holders of Commercial Common Stock pursuant to the Merger will
be approximately equal to the aggregate fair market value of the Commercial
Common Stock surrendered by the holders of Commercial Common Stock pursuant to
the Merger.
2. The fair market value of the Wesbanco Common Stock received
by each holder of shares of the Commercial Common Stock as a result of the
Merger is expected to equal not less than 50%, of the fair market value of the
Commercial Common Stock surrendered in exchange therefor.
3. There is no plan or intention by any shareholder of
Commercial who owns five percent or more of the Commercial Common Stock, and to
the best knowledge of each of Commercial and Wesbanco, no holders of Commercial
Common Stock plan or intend to sell, exchange or otherwise dispose of in the
foreseeable future a number of shares of Wesbanco Common Stock received pursuant
to the Merger such that the ownership of Wesbanco Common Stock by former holders
of Commercial Common Stock would be reduced to a number of shares having a
value, as of the date of the Merger, of less than 50 percent of the value of all
of the outstanding Commercial Common Stock as of the same date. For purposes of
this assumption, shares of Commercial Common Stock surrendered upon the exercise
of dissenters' rights or exchanged for cash in lieu of fractional shares of
Wesbanco Common Stock will be treated as outstanding Commercial Common Stock on
the date of the Merger. Moreover, shares of Wesbanco Common Stock and shares of
Commercial Common Stock held by Commercial shareholders and otherwise sold,
redeemed, or disposed of prior or subsequent to the Merger will be considered in
making this assumption.
4. CBI will acquire at least 90 percent of the fair market
value of the net assets and at least 70 percent of the fair market value of the
gross assets held by Commercial immediately prior to the Merger. For purposes of
this representation, amounts paid by Commercial to shareholders who receive
cash, Commercial assets used to pay its reorganization expenses, and all
redemptions and distributions (except for regular, normal dividends) made by
Commercial immediately preceding the transfer, will be included as assets of
Commercial held immediately prior to the consummation of the Merger.
5. Prior to the Merger, Wesbanco will be in control of CBI
within the meaning of Section 368(c) of the Internal Revenue Code of 1986, as
amended (the "Code").
6. Following the Merger, CBI will not issue additional shares
of its stock that would result in Wesbanco losing control of CBI within the
meaning of Section 368(c) of the Code.
7. Wesbanco has no plan or intention to reacquire any of its
stock issued in the Merger to holders of Commercial Common Stock.
<PAGE> 3
Wesbanco, Inc.
Commercial Bancshares, Incorporated
February 5, 1998
Page 3
8. Other than (x) transfers among members of the Wesbanco
affiliated group, and (y) dispositions or transfers made in the ordinary course
of business, Wesbanco has no plan or intention to liquidate CBI, to merge CBI
with and into another corporation, or dispose of any of the assets of Commercial
acquired by CBI in the Merger.
9. The liabilities of Commercial assumed by CBI and the
liabilities to which the transferred assets of Commercial are subject were
incurred by Commercial in the ordinary course of its business.
10. Following the Merger, CBI will continue the historic
business of Commercial or use a significant portion of Commercial's business
assets in a business.
11. Commercial, Wesbanco, CBI and the shareholders of
Commercial will pay their respective expenses, if any, incurred in connection
with the Merger.
12. There is no intercorporate indebtedness existing between
Wesbanco and Commercial or between CBI and Commercial that was issued, acquired,
or will be settled at a discount.
13. None of Wesbanco, CBI or Commercial is an investment
company as defined in Section 368(a)(2)(F)(iii) and (iv) of the Code.
14. Commercial is not under the jurisdiction of a court in a
Title 11 or similar case within the meaning of Section 368(a)(3)(A) of the Code.
15. The fair market value of the assets of Commercial
transferred to CBI will equal or exceed the sum of the liabilities assumed by
CBI in the Merger, including the amount of liabilities, if any, to which the
transferred assets are subject.
16. No stock of CBI will be issued in the Merger.
17. The payment of cash in lieu of fractional shares of the
Wesbanco Common Stock is solely for the purpose of avoiding the expense and
inconvenience to Wesbanco of issuing fractional shares and does not represent
separately bargained-for consideration. The total cash consideration that will
be paid in the Merger to Commercial shareholders instead of issuing fractional
shares of Wesbanco Common Stock will not exceed one percent of the total
consideration that will be issued in the Merger to Commercial shareholders in
exchange for their shares of the Commercial Common Stock. The fractional share
interests of each Commercial stockholder will be aggregated, and no Commercial
stockholder will receive cash in lieu of a fractional share in an amount equal
to or greater than the value of one full share of Wesbanco Common Stock.
<PAGE> 4
Wesbanco, Inc.
Commercial Bancshares, Incorporated
February 5, 1998
Page 4
18. Neither Wesbanco nor CBI will assume in the Merger any
liabilities of Commercial which arise out of or are fixed and determined in or
as a result of the Merger except for legal fees, accounting fees, securities
registration expenses, transfer agents' fees, printing costs, investment banking
fees and payments to dissenting Commercial shareholders.
19. The Merger is being entered into and carried out for a
bona fide business purpose.
OPINION
Based solely upon the facts and representations set forth
above, subject to the foregoing, and assuming the Merger would be consummated on
the date of this letter but otherwise in accordance with the Merger Agreement,
it is our opinion that:
(1) The Merger will constitute a reorganization
within the meaning of Section 368(a)(1)(A) of the Code, and Wesbanco, CBI and
Commercial will each be a "party to a reorganization" within the meaning of
368(b) of the Code.
(2) No gain or loss will be recognized by Wesbanco,
CBI or Commercial as a result of the Merger. However, we express no opinion on
the effect, if any, of other tax aspects of the Merger, including the carryover,
carryback or limitation on tax attributes of Wesbanco or Commercial or the other
matters governed by Sections 381 through 384 of the Code, or the like.
(3) No gain or loss will be recognized by any
Commercial shareholder upon the exchange of that shareholder's shares of
Commercial Common Stock for shares of Wesbanco Common Stock pursuant to the
Merger.
(4) The basis of the shares of Wesbanco Common Stock
received by a Commercial shareholder (including any fractional shares) will be
the same as the basis of the shares of Commercial Common Stock surrendered in
exchange therefor.
(5) If shares of Commercial Common Stock were capital
assets in the hands of a Commercial shareholder immediately prior to the Merger,
the holding period of the shares of Wesbanco Common Stock received by that
Commercial shareholder in the Merger will include the holding period of the
shares of Commercial Common Stock surrendered in exchange therefor.
(6) A Commercial shareholder who dissents from the
proposed Merger and receives solely cash in exchange for that shareholder's
shares of Commercial 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
<PAGE> 5
Wesbanco, Inc.
Commercial Bancshares, Incorporated
February 5, 1998
Page 5
treatment as a distribution in redemption of that shareholder's shares, that
shareholder will have gain to the extent of the consideration received less that
shareholder's adjusted basis in those shares.
(7) The receipt by a Commercial shareholder of cash
in lieu of a fractional share of Wesbanco Common Stock will be treated as if
that fractional share were issued to that holder in the Merger and thereafter
redeemed by Wesbanco for cash. The receipt of cash by a shareholder will be
treated as a distribution by Wesbanco 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 a shareholder's fractional share,
that shareholder will have gain to the extent of the consideration received less
that shareholder's allocable adjusted basis in that fractional share.
This opinion is based on the Code, Treasury Regulations,
Internal Revenue Service rulings, judicial decisions, and other applicable
authority, all as in effect on the date of this opinion. The legal authorities
on which this opinion is based may be changed at any time. Any such changes may
be retroactively applied and could modify the opinions expressed above. This
opinion does not address any tax considerations under foreign, state or local
laws, or the tax considerations to certain Commercial or Wesbanco shareholders
in light of their particular circumstances, including persons who are not United
States persons or who are resident aliens, life insurance companies, dealers in
securities, tax exempt entities, shareholders who receive shares of Commercial
or Wesbanco Common Stock through the exercise of employee stock options or
through other compensation arrangements, or shareholders who do not hold
Commercial or Wesbanco common stock as "capital assets" within the meaning of
Section 1221 of the Code.
This opinion is not and does not constitute advice on Federal
income tax consequences to any particular Commercial shareholder. Because the
federal income tax consequences discussed above depend upon each Commercial
shareholder's particular tax status, each shareholder should consult the
shareholder's own tax adviser for advice on the tax consequences of the Merger
to the shareholder.
This letter is solely for your information in connection with
the proposed Merger. This letter is not to be quoted in whole or in part, nor
filed with any other governmental agency or any other person, without the prior
written consent of this firm.
We hereby consent to the filing of this opinion as Exhibit 8.1
to the Registration Statement and to the reference to our firm in the Proxy
Statement/Prospectus that is part of the Registration Statement.
Very truly yours,
/s/ KIRKPATRICK & LOCKHART LLP
<PAGE> 1
EXHIBIT 23.1
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
------------------------
James C. Gardill
February 5, 1998
<PAGE> 1
Exhibit 23.3
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 4,938,690 shares of its common stock and
to the incorporation by reference therein of our report date 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
February 4, 1998
<PAGE> 1
Exhibit 23.4
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
interests with Bank of Weirton, which is as of August 30, 1996, included as
Exhibit 99.1 of WesBanco, Inc.'s Annual Report to Stockholders, which is
incorporated by reference in its 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
Pittsburgh, Pennsylvania
February 4, 1998
<PAGE> 1
Exhibit 23.5
[GRANT THORNTON 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
regarding Commercial Bancshares, Incorporated, and WesBanco, Inc., dated
February 5, 1998. We consent to the incorporation by reference of the
aforementioned report in the joint Proxy Statement/Prospectus, and to the use
of our name as it appears under the caption "Experts".
/s/ GRANT THORNTON LLP
Chicago, Illinois
February 5, 1998
<PAGE> 1
Exhibit 23.6
CONSENT OF INDEPENDENT AUDITORS
As independent auditors, we hereby consent to the incorporation by
reference in this registration statement of our report dated February 10, 1997
included in Commercial Bancshares Inc. and subsidiaries' Form 10-K for the year
ended December 31, 1996, and all references to our Firm included in this
registration statement.
/s/ HARMAN, THOMPSON, MALLORY & ICE, A.C.
-----------------------------------------
Harman, Thompson, Mallory & Ice, A.C.
Certified Public Accountants
Parkersburg, West Virginia
February 4, 1998
<PAGE> 1
Exhibit 23.7
DANIELSON ASSOCIATES, INC.
We hereby consent to the inclusion of our fairness opinion dated February
9, 1998 as an Exhibit to Commercial BancShares, Inc./WesBanco, Inc. Proxy
Statement/Prospectus and to the references to our firm contained herein.
DANIELSON ASSOCIATES, INC.
By: /s/ Arnold G. Danielson
-----------------------
Arnold G. Danielson
<PAGE> 1
EXHIBIT 99.1
WESBANCO, INC.
WHEELING, WEST VIRGINIA
PROXY
SPECIAL MEETING OF STOCKHOLDERS
MARCH 19, 1998
The undersigned hereby constitutes and appoints Ray A. Byrd, Roland L. Hobbs and
William E. Witschey, or any one of them, attorneys and proxies, with full power
of substitution to represent the undersigned at the special meeting of
shareholders of WesBanco, Inc. to be held in the Directors Room of WesBanco Bank
Wheeling, Bank Plaza, Wheeling, West Virginia 26003, on March 19, 1998, at 11:00
a.m., and at any adjournment or adjournments thereof, with full powers then
possessed by the undersigned, and to vote, at that meeting, or any adjournment
or adjournments thereof, all shares of stock which the undersigned would be
entitled to vote if personally present, as follows:
1. Approval of the issuance of up to 4,938,690 shares of common
stock, par value $2.0833 per share of WesBanco, Inc. in connection
with the Agreement and Plan of Merger, dated as of September 30,
1997, among WesBanco, CBI Holding Company, a West Virginia
corporation and wholly-owned subsidiary of WesBanco, and
Commercial Bancshares, Incorporated, a West Virginia corporation.
FOR ______ AGAINST _______ ABSTAIN _______
2. The transaction of such other business as may properly come before
the Special Meeting or any adjournment or postponement thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED. IF NO SPECIFICATION IS MADE, THE SHARES OF COMMON STOCK OF
WESBANCO REPRESENTED BY THIS PROXY WILL BE VOTED "FOR" PROPOSAL 1. IF ANY OTHER
BUSINESS IS PRESENTED AT SAID MEETING, THIS PROXY SHALL BE VOTED AT THE
DISCRETION OF THE PROXIES APPOINTED HEREBY.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE LISTED PROPOSITION. THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF WESBANCO.
___________________________ _________________________(SEAL)
DATED
_________________________(SEAL)
(Please sign exactly as your name(s) appears hereon. When signing as Attorney,
Executor, Administrator, Trustee, Guardian, etc., give full title as such. If
you are signing for someone else, you must send documentation with this Proxy,
certifying your authority to sign. If stock is jointly owned, each joint owner
should sign.)
<PAGE> 1
EXHIBIT 99.2
COMMERCIAL BANCSHARES, INCORPORATED.
PARKERSBURG, WEST VIRGINIA
PROXY
SPECIAL MEETING OF STOCKHOLDERS
MARCH 19, 1998
The undersigned hereby constitutes and appoints Carter W. Strauss, Thomas L.
Thomas and John A. Welty, or any one of them, attorneys and proxies, with full
power of substitution to represent the undersigned at the special meeting of
shareholders of Commercial Bancshares, Incorporated to be held at the principal
executive offices of Commercial Bancshares, Inc., 415 Market Street,
Parkersburg, West Virginia 26101, on March 19, 1998 at 9:00 a.m., and at any
adjournment or adjournments thereof, with full powers then possessed by the
undersigned, and to vote, at that meeting, or any adjournment or adjournments
thereof, all shares of stock which the undersigned would be entitled to vote if
personally present, as follows:
1. Approval and adoption of the Agreement and Plan of Merger, dated as
of September 30, 1997 (the "Merger Agreement"), among WesBanco,
Inc., a West Virginia corporation ("WesBanco"), CBI Holding Company
("CBI"), a West Virginia corporation and wholly-owned subsidiary of
WesBanco, and Commercial Bancshares, Incorporated, a West Virginia
corporation ("Commercial"), and the transactions contemplated
thereby, including the merger of Commercial with and into CBI,
pursuant to which, among other things, each issued and outstanding
share of common stock, par value $5.00 per share, of Commercial
("Commercial Common Stock"), immediately prior to the effective
time of the Merger as defined in the Merger Agreement (except for
shares of Commercial Common Stock issued and held in treasury of
Commercial, or beneficially owned by CBI or WesBanco, other than in
a fiduciary capacity by WesBanco for others, all of which will be
canceled) will be converted into the right to receive 2.85 shares
of common stock, par value $2.0833 per share, of WesBanco. A copy
of the Merger Agreement is attached as Appendix I to the
accompanying Joint Proxy Statement/Prospectus.
FOR ______ AGAINST _______ ABSTAIN _______
2. The transaction of such other business as may properly come before
the Special Meeting or any adjournment or postponement thereof.
THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN BY
THE UNDERSIGNED. IF NO SPECIFICATION IS MADE, THE SHARES OF COMMON STOCK OF
COMMERCIAL REPRESENTED BY THIS PROXY WILL BE VOTED "FOR" PROPOSAL 1. IF ANY
OTHER BUSINESS IS PRESENTED AT SAID MEETING, THIS PROXY SHALL BE VOTED AT THE
DISCRETION OF THE PROXIES APPOINTED HEREBY.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE LISTED PROPOSITION. THIS
PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF COMMERCIAL.
___________________________ _________________________(SEAL)
DATED
_________________________(SEAL)
(Please sign exactly as your name(s) appears hereon. When signing as Attorney,
Executor, Administrator, Trustee, Guardian, etc., give full title as such. If
you are signing for someone else, you must send documentation with this Proxy,
certifying your authority to sign. If stock is jointly owned, each joint owner
should sign.)
<PAGE> 1
Exhibit 99.3
WESBANCO, INC.
One Bank Plaza
Wheeling, West Virginia 26003
(304) 234-9000
February 13, 1998
Dear WesBanco Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders of
WesBanco, Inc. ("WesBanco") to be held on March 19, 1998, at WesBanco's
principal executive offices, One Bank Plaza, Wheeling, West Virginia 26003,
commencing at 11:00 a.m., local time.
At the Special Meeting, you will be asked to approve the issuance of shares
of WesBanco Common Stock in connection with an Agreement and Plan of Merger and
the transactions contemplated thereby providing for the business combination of
WesBanco and Commercial Bancshares, Incorporated ("Commercial"). Pursuant to the
Agreement and Plan of Merger, Commercial will merge into CBI Holding Company
("CBI"), a wholly-owned subsidiary of WesBanco, with CBI being the surviving
corporation, and each outstanding share of Commercial Common Stock will be
converted into the right to receive 2.85 shares of WesBanco Common Stock.
The Board of Directors of WesBanco has unanimously determined that the
transaction is in the best interests of WesBanco and its shareholders and
recommends that you vote FOR the proposal to approve the issuance of WesBanco
Common Stock in connection with the Agreement and Plan of Merger and the
transactions contemplated thereby. The accompanying Joint Proxy
Statement/Prospectus more fully describes the proposal to be considered at the
Special Meeting. You are urged to give it your careful attention.
APPROVAL OF THE PROPOSAL TO APPROVE THE ISSUANCE OF WESBANCO COMMON STOCK
IN CONNECTION WITH THE AGREEMENT AND PLAN OF MERGER BY WESBANCO SHAREHOLDERS
WILL REQUIRE THE AFFIRMATIVE VOTE OF THE HOLDERS OF AT LEAST A MAJORITY OF THE
SHARES OF WESBANCO COMMON STOCK CONSTITUTING A QUORUM AND VOTING THEREON. IT IS
VERY IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE SPECIAL MEETING WHETHER OR
NOT YOU ARE PERSONALLY ABLE TO ATTEND. IN ORDER TO INSURE THAT YOU WILL BE
REPRESENTED, WE ASK YOU TO COMPLETE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY.
A POSTAGE-PAID RETURN ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
Sincerely,
Edward M. George
President
<PAGE> 1
Exhibit 99.4
COMMERCIAL BANCSHARES, INCORPORATED
415 Market Street
Parkersburg, West Virginia 26101
(304)424-0300
February 13, 1998
Dear Commercial Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders of
Commercial Bancshares Incorporated ("Commercial") to be held on March 19, 1998,
at Commercial's principal executive offices, 415 Market Street, Parkersburg,
West Virginia 26101, commencing at 9:00 a.m., local time.
At the Special Meeting, you will be asked to approve and adopt an Agreement
and Plan of Merger and the transactions contemplated thereby providing for the
business combination of WesBanco, Inc. ("WesBanco") and Commercial. Pursuant to
the Agreement and Plan of Merger, Commercial will merge into CBI Holding Company
("CBI"), a wholly-owned subsidiary of WesBanco, with CBI being the surviving
corporation, and each outstanding share of Commercial Common Stock will be
converted into the right to receive 2.85 shares of WesBanco Common Stock.
The Board of Directors of Commercial has unanimously determined that the
transaction is in the best interests of Commercial and its shareholders and
recommends that you vote FOR the proposal to approve and adopt the Agreement and
Plan of Merger and the transactions contemplated thereby. Danielson Associates,
Inc. Commercial's financial advisor, has delivered its opinion, dated as of
September 12, 1997 and updated as of February 9, 1998, to the Board of Directors
to the effect that, based upon and subject to various considerations set forth
in such opinion, as of the date of such opinion that the Merger is fair, from a
financial point of view, to the holders of Commercial Common Stock. The
accompanying Joint Proxy Statement/ Prospectus more fully describes the proposal
to be considered at the Special Meeting. You are urged to give it your careful
attention.
APPROVAL OF THE PROPOSAL TO APPROVE AND ADOPT THE AGREEMENT AND PLAN OF
MERGER BY COMMERCIAL SHAREHOLDERS WILL REQUIRE THE AFFIRMATIVE VOTE OF THE
HOLDERS OF AT LEAST A MAJORITY OF THE OUTSTANDING SHARES OF COMMERCIAL COMMON
STOCK VOTING THEREON. IT IS VERY IMPORTANT THAT YOUR SHARES BE REPRESENTED AT
THE SPECIAL MEETING WHETHER OR NOT YOU ARE PERSONALLY ABLE TO ATTEND. IN ORDER
TO INSURE THAT YOU WILL BE REPRESENTED, WE ASK YOU TO COMPLETE AND RETURN THE
ENCLOSED PROXY CARD PROMPTLY. A POSTAGE-PAID RETURN ENVELOPE IS ENCLOSED FOR
YOUR CONVENIENCE.
You should not send in certificates representing shares of Commercial
Common Stock at this time. Following consummation of the transaction,
information will be sent to you regarding the procedure for surrendering your
stock certificates and receiving certificates for the shares of WesBanco Common
Stock to be issued in exchange for your Commercial shares.
Sincerely,
William E. Mildren, Jr.
Chairman of the Board and President
<PAGE> 2
COMMERCIAL BANCSHARES, INCORPORATED
415 Market Street
Parkersburg, West Virginia 26101
(304) 424-0300
Dear Gateway Bancshares Shareholder:
As you are aware, the shareholders of Gateway Bancshares are
scheduled to hold a Special Meeting on March 9, 1998 to vote on the approval of
a merger with Commercial Bancshares, Incorporated ("Commercial"). If the merger
of Gateway and Commercial is approved, you will become a shareholder of
Commercial. Commercial has scheduled a Special Meeting to be held on March 19,
1998, at Commercial's principal executive offices, 415 Market Street,
Parkersburg, West Virginia 26101, commencing at 9:00 a.m., local time to
consider a merger of Commercial and WesBanco, Inc. ("WesBanco"). If the merger
of Gateway and Commercial is approved, you are cordially invited to attend the
Special Meeting of Shareholders of Commercial and vote on the proposed merger as
a shareholder of Commercial. The enclosed Joint Proxy Statement/Prospectus is
being sent to you now to enable you to give the merger of Commercial and
WesBanco your full consideration.
At the Commercial Special Meeting, you will be asked to
approve and adopt an Agreement and Plan of Merger and the transactions
contemplated thereby providing for the business combination of WesBanco, Inc.
("WesBanco") and Commercial. Pursuant to the Agreement and Plan of Merger,
Commercial will merge into CBI Holding company ("CBI"), a wholly-owned
subsidiary of WesBanco, with CBI being the surviving corporation, and each
outstanding share of Commercial Common Stock will be converted into the right to
receive 2.85 shares of WesBanco Common Stock.
The Board of Directors of Commercial has unanimously
determined that the transaction is in the best interests of Commercial and its
shareholders and recommends that, as a Commercial shareholder, you vote FOR the
proposal to approve and adopt the Agreement and Plan of Merger and the
transactions contemplated thereby. Danielson Associates, Inc., Commercial's
financial advisor, has delivered its opinion, dated as of September 12, 1997, to
the Board of Directors to the effect that, based upon and subject to various
considerations set forth in such opinion, as of the date of such opinion that
the Merger is fair, from a financial point of view, to the holders of Commercial
Common Stock. The accompanying Joint Proxy Statement/Prospectus more fully
describes the proposal to be considered at the Special Meeting. You are urged to
give it your careful attention.
APPROVAL OF THE PROPOSAL TO APPROVE AND ADOPT THE AGREEMENT
AND PLAN OF MERGER BY COMMERCIAL SHAREHOLDERS WILL REQUIRE THE AFFIRMATIVE VOTE
OF THE HOLDERS OF AT LEAST A MAJORITY OF THE OUTSTANDING SHARES OF COMMERCIAL
COMMON STOCK VOTING THEREON. IT IS VERY IMPORTANT THAT YOUR SHARE BE REPRESENTED
AT THE SPECIAL MEETING WHETHER OR NOT YOU ARE PERSONALLY ABLE TO ATTEND. IN
ORDER TO INSURE THAT YOU WILL BE REPRESENTED, WE ASK YOU TO
<PAGE> 3
COMPLETE AND RETURN THE ENCLOSED PROXY CARD PROMPTLY. A POSTAGE-PAID RETURN
ENVELOPE IS ENCLOSED FOR YOUR CONVENIENCE.
You should not send in certificates representing shares of
Commercial or Gateway Bancshares Common Stock at this time. Following
consummation of the transaction, information will be sent to you regarding the
procedure for surrendering your stock certificates and receiving certificates
for the shares of WesBanco Common Stock to be issued in the merger of Commercial
and WesBanco.
Sincerely,
William E. Mildren, Jr.
Chairman of the Board and President
