UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
[ X ] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1997
Commission file number 0-5893
American Bancorporation
(Exact name of registrant as specified in its charter)
Ohio 31-0724349
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1025 Main Street, Suite 800, Wheeling, WV 26003 26003
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code (304) 233-5006
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g)of the Act:
Common Stock, without par value
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant
was required to filed such reports), and (2) has been subject to the filing
requirements for the past 90 days.
Yes x/ No
Indicate by check mark if disclosure to delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. [ x/ ]
State the aggregate market value of the voting stock held by nonaffiliates of
the Registrant. The aggregate market value shall be computed by reference to the
price at which the stock was sold, or the average bid and asked prices of such
stock as of a specified date within 60 days prior to the date of filing.
$59,779,402 at February 27, 1998
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date.
3,129,674 shares of Common stock, without par value, at March 30, 1998
Number of pages Exhibit Index
comprising this located at
report . . . . . 144 Page . . . . . 15 & 17
---- -----------
- 1 -
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2
AMERICAN BANCORPORATION FORM 10-K Annual Report
December 31, 1997
DOCUMENTS INCORPORATED BY REFERENCE
Certain of the items listed in the table below are included in the Annual
Report to Stockholders for the year ended December 31, 1997. With the exception
of the pages listed in the index and hereby incorporated by reference, the 1997
Annual Report to Stockholders is not to be deemed filed as part of this report.
The Registrant will file a Definitive Proxy Statement with the Securities
and Exchange Commission pursuant to Regulation 14A within 120 days after the
close of fiscal year 1997. Information contained therein is hereby incorporated
by reference as indicated in the table below.
CROSS REFERENCE INDEX AND TABLE OF CONTENTS
Page Reference
Form Annual Proxy
10-K Report Statement
to
Shareholders
Part I
Item 1 Business.......................................3-12 IFC -
Item 2 Properties.....................................13 - -
Item 3 Legal proceedings..............................14 - -
Item 4 Submission of matters to a
vote of security holders.......................N/A
Part II
Item 5 Market for Registrants common stock and
related security holders matters...............- IFC,IBC,29 2-3,9
Item 6 Selected financial data........................- 29 -
Item 7 Management's discussion and analysis of
financial condition and results of operations..- 30-46 -
Item 7a. Quantitative and qualitative disclosures
about market risk..............................- 43-44 -
Item 8 Financial statements and supplementary data....14 2-28 -
Item 9 Changes and disagreements with Accountants
on accounting and financial disclosures........N/A
Part III
Item 10 Directors and executive officers
of the Registrant..............................- - 4-7
Item 11 Executive compensation.........................- - 8-9
Item 12 Security ownership of certain beneficial
owners and management..........................- - 3
Item 13 Certain relationships and related transactions.- - 12
Part IV
Item 14 Exhibits, financial statement schedules
and reports on Form 8K.........................14-15 - -
<PAGE>
3
AMERICAN BANCORPORATION FORM 10-K Annual Report
December 31, 1997
Part I
Item 1. Business
General
American Bancorporation (the "Registrant" of the "Company") is a bank
holding company, headquartered in Wheeling, West Virginia which through its
subsidiaries provides commercial and mortgage banking services to customers in
central and eastern Ohio and northern West Virginia. The Company's principal
subsidiary, Wheeling National Bank ("WNB" or the "Bank"), headquartered in St.
Clairsville, Ohio, is a full-service commercial bank operating through 20
offices. As of December 31, 1997, the Company had consolidated total assets of
$484.6 million, deposits of $355.7 million and stockholders' equity of $33.7
million.
The Company, registered under the Bank Holding Company Act of 1956, as
amended, ("BHCA"), was incorporated under the laws of the State of Ohio in 1966.
WNB, a national banking association organized in 1978, was acquired by the
Company in 1988. In 1996, the Company merged its other former banking
subsidiary, Columbus National Bank, into Wheeling National Bank, under the
charter of WNB.
Through WNB, the Company provides a full range of commercial banking
services to retail customers and small to medium-sized business in its market
area. In eastern Ohio and norther West Virginia the Company focuses on local
customer needs. In the Columbus, Ohio area, the company focuses its marketing
efforts on local businesses, whose needs are not being served effectively by
larger institutions.
The banking services the Company offers its customers include checking,
savings, time and money market accounts, personal, commercial, construction and
real estate loans, individual retirement accounts, safe deposit boxes, wire
transfers, credit cards and debit cards, among other standard banking products
and services.
In addition to its banking activities, the Company originates and services
mortgage loans through American Mortgages, Inc. ("AMI"), a wholly-owned
subsidiary. AMI owns 51% of Premier Mortgage, Ltd., located in Columbus, Ohio, a
joint-venture with H.E.R., Inc., a major Columbus, Ohio real estate broker,
which originates residential mortgage loans. The Company also operates three
additional subsidiaries which provide data processing services, real estate
leasing and transfer agent services for the company, the Bank and AMI.
<PAGE>
4
AMERICAN BANCORPORATION FORM 10-K Annual Report
December 31, 1997
Lending Activities
The Company's lending activities are diversified between commercial, real
estate and consumer type loans. At December 31, 1997 the Company's total loan
portfolio amounted to $286.7 million or 59.2% of total consolidated assets. At
December 31, 1997 real estate mortgage loans totalled $144.2 million, or 50.3%
of the loan portfolio, commercial loans totalled $93.3 million, or 32.5% of the
loan portfolio, and consumer installment loans totalled $49.2 million, or 17.2%
of the loan portfolio. Total loans increased by $15.2 million or 5.6% between
December 31, 1996 and December 31, 1997, as commercial loans increased $8.7
million or 10.3% and real estate mortgage loans increased $7.7 million or 5.6%,
while consumer installment loans decreased $1.2 million or 2.3%.
Commercial Loans. The Company makes commercial loans, primarily to small and
medium-sized businesses and to professionals, which are not concentrated in any
single industry but reflect a broad range of businesses in central and eastern
Ohio and northern West Virginia. The Company offers a variety of commercial loan
products including term loans, lines of credit, working capital loans, loans to
finance accounts receivable, inventory, equipment and real estate.
Typically, commercial loans are personally guaranteed by the borrower-owner
and are secured by accounts receivables, inventory and/or fixed assets including
real estate and equipment. The credit risk associated with commercial lending is
principally influenced by general economic conditions and the resulting impact
on the borrower's operations, mitigated by collateral values and generally a
higher risk than single family residential loans.
Real Estate Loans. Real estate loans to consumers are secured primarily by a
first lien deed of trust. These loans are traditionally one-to-four family
residential mortgages, have fixed interest rates, and generally amortize over a
20 to 30 year period with balloon payments due at the end of three to five
years. Upon the expiration of each three to five year period, the Company may,
but is not obligated to, renew the loan at the then current market rate for an
additional three to five year period. These loans are limited generally to a
loan to value ratio of 80% or less of the property value. With very few
exceptions, the Company does not originate 30 year fixed rate real estate loans.
The Company also originates home equity lines of credit which are secured by
a first or second mortgage against the borrower's residence. The maximum
loan-to-value of the Company's home equity lines of credit, inclusive of all
other secured loans against a borrower's property, is 100%. The risks associated
with real estate lending are principally influenced by real property values
which are affected by the general economic conditions in each market area.
Consumer Loans. Consumer loans made by the Company include automobile loans,
recreational vehicle loans, boat loans, home improvement loans, personal loans,
(collateralized and uncollateralized) and unsecured credit card balances. These
loans are a smaller balance, comparable group of loans which are not
concentrated in a specific market area. Risks in this lending category include
the possibility of general economic downturn which may cause an increase in
credit losses.
<PAGE>
5
AMERICAN BANCORPORATION FORM 10-K Annual Report
December 31, 1997
Investment Activity
The investment policy of the Company provides that the Company should seek
to maximum earnings consistent with prudent asset/liability management,
liquidity and risk considerations. The Investment Committee is responsible for
managing the Company's investment portfolio.
At December 31, 1997 the entire investment portfolio is classified as
available for sale. The Company's investment portfolio is comprised primarily of
U. S. Treasury securities and obligations of U. S. Agencies. The Company will
only acquire municipal securities "A" rated or better.
Market Area
The primary market area for the Company is central and eastern Ohio and
northern West Virginia and consists of Franklin, Guernsey, Belmont, Harrison and
Jefferson counties in Ohio; Brooke, Hancock, Marshall and Wetzel counties in
West Virginia. The economy in eastern Ohio and northern West Virginia is
primarily dependent on the coal, steel and chemical industries. A preponderance
of the Company's commercial loans are generated in the Columbus, Ohio (Franklin
County) metropolitan area. This area has experienced significant economic
development and growth in recent years. Columbus enjoys a stable underlying
economy and low unemployment due to the presence of the State government, the
Ohio State University, the headquarters of many Fortune 500 companies, together
with the regional and national headquarters of a number of insurance and other
financial companies.
Competition
The Company competes not only with other locally owned commercial banks,
credit unions and savings institutions, but with larger regional financial
institutions in attracting deposits and in originating loans. In competing with
regional and national institutions, the Company emphasizes its asset as a local,
neighborhood bank to its customers.
The Company competes on the basis of rates of interest charged on loans, the
rates of interest paid on funds, the availability of services and responsiveness
to the needs of its customers. The Company pays interest on deposits and charges
interest rates and fees on loans which are competitive in the general areas
served.
Employees
The Company, its affiliate bank and non-banking subsidiaries employed 215
full-time equivalent employees at December 31, 1997. None of these employees are
represented by a collective bargaining agent, and the Company believes that it
enjoys good relations with its personnel.
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6
AMERICAN BANCORPORATION FORM 10-K Annual Report
December 31, 1997
Regulation of the Company
The following references to laws and regulations which are applicable to
the Company and its banking subsidiaries are brief summaries thereof which do
not purport to be complete and are qualified in their entirety by reference to
such laws and regulations.
BHCA - General
The Company, as a bank holding company, is subject to regulation and
supervision by the Federal Reserve Board. Under the BHCA, a bank holding company
is required to file annually with the Federal Reserve Board a report of its
operations and, with its subsidiaries, is subject to examination by the Federal
Reserve Board.
BHCA - Activities and Other Limitations.
The BHCA generally prohibits a bank holding company from acquiring
direct or indirect ownership or control of more than 5% of the voting shares of
any bank, or increasing such ownership or control of any bank, without prior
approval of the Federal Reserve Board. As a result of recent amendments to the
BHCA the Federal Reserve Board generally may approve an application by a bank
holding company that is adequately capitalized and adequately managed to acquire
control of or to acquire all or substantially all of the assets of, a bank
located in a state other than the home state of such bank holding company,
without regard to whether such transaction is prohibited under the law of any
state, provided, however, that the Federal Reserve Board may not approve any
such application that would have the effect of permitting an out-of-state bank
holding company to acquire a bank in a host state that has not been in existence
for any minimum period of time, not, to exceed five years specified in the
statutory law of the host state.
The BHCA also generally prohibits a bank holding company, with certain
exceptions, from acquiring more than 5% of the voting shares of any company that
is not a bank and from engaging in any business other than banking or managing
or controlling banks. Under the BHCA, the Federal Reserve Board is authorized to
approve the ownership of shares by a bank holding company in any company the
activities of which the Federal Reserve Board has determined to be so closely
related to banking or to managing or controlling banks as to be a proper
incident thereto. In making such determinations, the Federal Reserve Board is
required to weigh the expected benefit to the public, such as greater
convenience, increased competition or gains in efficiency, against the possible
adverse effects, such as undue concentration of resources, decreased or unfair
competition, conflicts of interest or unsound banking practices.
Capital Requirements.
For a description of the capital adequacy guidelines adopted by the
Federal Reserve Board to assess the adequacy of capital of bank holding
companies, see "Management's Discussion and Analysis of Financial Condition and
Results of Operations -Capital" included in Item 7 hereof and Note S to the
Consolidated Financial Statements in Item I hereof.
<PAGE>
7
AMERICAN BANCORPORATION FORM 10-K Annual Report
December 31, 1997
Affiliated Institutions.
Under Federal Reserve Board policy, the Company is expected to act as a
source of financial strength to each subsidiary bank and to commit resources to
support each subsidiary bank in circumstances when it might not do so absent
such policy. The Federal Reserve Board takes the position that in implementing
this policy it may require bank holding companies to provide such support when
the holding company otherwise would not consider itself able to do so.
A bank holding company is a legal entity separate and distinct from its
subsidiary bank. Normally, the major source of a holding company's revenue is
dividends a holding company receives from its subsidiary bank. The right of a
bank holding company to participate as a stockholder in any distribution of
assets of its subsidiary bank upon its liquidation or reorganization or
otherwise is subject to the prior claims of creditors of such subsidiary bank.
The subsidiary bank is subject to claims by creditors for long-term and
short-term debt obligations, including substantial obligations for federal funds
purchased and securities sold under repurchase agreements, as well as deposit
liabilities. Under the Financial Institutions Reform, Recovery and Enforcement
Act of 1989, in the event of a loss suffered by the FDIC in connection with a
banking subsidiary of a bank holding company (whether due to a default or the
provision of FDIC assistance), other banking subsidiaries of the holding company
could be assessed for such loss.
Federal laws limit the transfer of funds by a subsidiary bank to its
holding company in the form of loans or extensions of credit, investments or
purchases of assets. Transfers of this kind are limited to 10% of a bank's
capital and surplus with respect to each affiliate and to 20% in the aggregate,
and are also subject to certain collateral requirements. These transactions, as
well as other transactions between a subsidiary bank and its holding company,
also must be on terms substantially the same as, or at least as favorable as,
those prevailing at the time for comparable transactions with non-affiliated
companies or, in the absence of comparable transactions, on terms or under
circumstances, including credit standards, that would be offered to, or would
apply to, non-affiliated companies.
Limitations of Acquisitions of Common Stock.
The federal Change in Bank Control Act prohibits a person or group of
persons from acquiring "control" of a bank holding company unless the Federal
Reserve Board has been given 60 days prior written notice of such proposed
acquisition and within. that time period the Federal Reserve Board has not
issued a notice disapproving the proposed acquisition or extending for up to
another 30 days the period during which such a disapproval may be issued. An
acquisition may be made prior to expiration of the disapproval period if the
Federal Reserve Board issues written notice of its intent not to disapprove the
action. Under a rebuttable presumption established by the Federal Reserve Board,
the acquisition of more than 10% of a class of voting stock of a bank holding
company with a class of securities registered under Section 12 of the Exchange
Act would, under the circumstances set forth in the presumption, constitute the
acquisition of control.
<PAGE>
8
AMERICAN BANCORPORATION FORM 10-K Annual Report
December 31, 1997
In addition, any "company" would be required to obtain the approval of
the Federal Reserve Board under the BHCA before acquiring 25% (5% in the case of
an acquirer that is a bank holding company) or more of the outstanding Common
Stock of, or such lesser number of shares as constitute control over, the
Company.
Regulation of the Bank
General
The Bank is a national bank subject to extensive regulation and
examination by the Office of the Comptroller of the Currency (the "OCC"), The
Bank also is subject to regulation and examination by the FDIC, which insures
the deposits of the Bank to the maximum extent permitted by law, and certain
requirements established by the Federal Reserve Board. The federal laws and
regulations which are applicable to banks regulate, among other things, the
scope of their business, their investments, their reserves against deposits, the
timing of the availability of deposited funds and the nature and amount of and
collateral for loans. The laws and regulations governing the Bank generally have
been promulgated to protect depositors and not for the purpose of protecting
stockholders.
Capital Requirements.
The Bank is subject to regulatory capital requirements of the OCC which
are substantially comparable to the regulatory capital requirements of the
Federal Reserve Board applicable to bank holding companies such as the Company.
At December 31, 1997, the regulatory capital of the Bank exceeded applicable
requirements,
Prompt Corrective Action.
Section 38 of the Federal Deposit Insurance Act ("FDIA") provides the
federal banking regulators with broad power to take "prompt Corrective action"
to resolve the problems of undercapitalized institutions. The extent of the
regulators' powers depends on whether the institution in question is "well
capitalized," "adequately capitalized," "undercapitalized, "significantly
undercapitalized" or "critically undercapitalized." Under regulations adopted by
the federal banking regulators, an institution shall be deemed to be (i) "well
capitalized" if it has total risk-based capital ratio of 10.0% or more, has a
Tier 1 risk-based capital ratio of 6.0% or more, has a Tier 1 leverage capital
ratio of 5.0% or more and is not subject to specified requirements to meet and
maintain a specific capital level for any capital measure; (ii) "adequately
capitalized" if it has a total risk-based capital ratio of 8.0% or more, a Tier
1 risk-based capital ratio of 4.0% or more and a Tier I leverage capital ratio
of 4.0% or more (3.0% under certain circumstances) and does not meet the
definition of "well capitalized," (iii) "undercapitalized" if it has a total
risk-based capital ratio that is less than 8.0% a Tier 1 risk-based capital
ratio that is less than 4.0% or a Tier 1 leverage capital ratio that is less
than 4.0% 3.0% under certain circumstances), (iv) "significantly
undercapitalized" if it has a total risk-based capital ratio that is less than
6.0%, a Tier 1 risk-based capital ratio that is less than 3.0%, or a Tier 1
leverage capital ratio that is less than 3.0%, and (v) "critically
undercapitalized" if it has a ratio of tangible equity to total assets that is
equal to or less than 2.0%. The regulations also provide that a federal banking
regulator may, after notice and an opportunity for a hearing, reclassify a "well
capitalized" institution as
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9
AMERICAN BANCORPORATION FORM 10-K Annual Report
December 31, 1997
"adequately capitalized" and may require an "adequately capitalized" institution
or an "undercapitalized" institution to comply with supervisory actions as If it
were in the next lower Category if the institution is in an unsafe or unsound
condition or engaging in an unsafe or unsound practice. The federal banking
regulator may not, however, reclassify a "significantly undercapitalized"
institution as "critically undercapitalized."
An institution generally must file a written capital restoration plan
which meets specified requirements, as well as a performance guaranty by each
company that controls the institution. with an appropriate federal banking
regulator within 45 days of the date that the institution receives notice or is
deemed to have notice that It is "undercapitalized," "significantly
undercapitalized" or "critically undercapitalized." Immediately upon becoming
undercapitalized, an institution becomes subject to statutory provisions which,
among other things, set forth various mandatory and discretionary restrictions
on the operations of such an institution.
At December 31, 1997, the Bank had capital levels which qualified it as
a "well capitalized" institution.
FDIC Insurance Premiums.
The Bank is a member of the BIF administered by the FDIC, although
certain deposits of the Bank acquired in acquisitions are insured by the Savings
Association Insurance Fund ("SAIF) administered by the FDIC.
As an FDIC-insured institution, the Bank is required to pay deposit
insurance premiums to the FDIC. Effective January 1, 1997, the assessment
schedule for both BIF and SAIF ranges from 0 basis points (subject to a $2,000
annual minimum) to 27 basis points. In addition, both BIF-insured institutions
and SAIF-insured institutions are assessed amounts in order for a
federally-chartered Finance Corporation to make payments on it bonds,
Brokered Deposits.
The FDIA restricts the use of brokered deposits by certain depository
institutions. Under the FDIA and applicable regulations, (i) a"well capitalized
insured depository institution" may solicit and accept, renew or roll over any
brokered deposit without restriction, (ii) an "adequately capitalized insured
depository institution" may not accept, renew or roll over any brokered deposit
unless it has applied for and been granted a waiver of this prohibition by the
FDIC and (iii) an "undercapitalized insured depository institution" may not (x)
accept, renew or roll over any brokered deposit or (y) solicit deposits by
offering an effective yield that exceeds by more than 75 basis points the
prevailing effective yields on insured deposits of comparable maturity in such
institution's normal market area or in the market area in which such deposits
are being solicited. The term "undercapitalized insured depository institution"
is defined to mean any insured depository institution that fails to meet the
minimum regulatory capital requirement prescribed by its appropriate federal
banking agency. The FDIC may, on a case-by-case basis and upon application by an
adequately capitalized insured depository institution, waive the restriction on
brokered deposits upon a finding that the acceptance of brokered deposits does
not constitute, an unsafe or unsound practice with respect to such institution.
The Bank had no brokered deposits outstanding at December 31, 1997.
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10
AMERICAN BANCORPORATION FORM 10-K Annual Report
December 31, 1997
Community Investment and Consumer Protection Laws.
In connection with its lending activities, the Bank is subject to a
variety of federal laws designed to protect borrowers and promote lending to
various sectors of the economy and population. Included among these are the
federal Home Mortgage Disclosure Act, Real Estate Settlement Procedures Act,
Truth-in-Lending Act, Equal Credit Opportunity Act, Fair Credit Reporting Act
and Community Reinvestment Act ("CRA").
The CRA requires insured institutions to define the communities that
they serve, identify the credit needs of those communities and adopt and
implement a "Community Reinvestment Act Statement" pursuant to which they offer
credit products and take other actions that respond to the credit needs of the
community. The responsible federal banking regulator (the OCC) must conduct
regular CRA examinations of insured financial institutions and assign to them a
CRA rating of "outstanding," "satisfactory," "needs improvement" or
"unsatisfactory."
Limitations on Dividends.
The Company is a legal entity separate and distinct from its banking and
other subsidiaries. the Company's principal source of revenue consists of
dividends from its subsidiaries, including the Bank. The payment of dividends by
the Bank is subject to various regulatory requirements.
Miscellaneous.
The Bank is subject to certain restrictions on loans to the Company or
its non-bank subsidiaries, on investments in the stock or securities thereof, on
the taking of such stock or securities as collateral for loans to any borrower,
and on the issuance of a guarantee or letter of credit on behalf of the Company
or its non-bank subsidiaries. The Company's banking subsidiaries also are
subject to certain restrictions on most types of transactions with the Company
or its non-bank subsidiaries, requiring that the terms of such transactions be
substantially equivalent to terms of similar transactions with non-affiliated
firms.
Regulatory Enforcement Authority.
The enforcement powers available to federal banking regulators is
substantial and includes, among other things, the ability to assess civil money
penalties, to issue cease-and-desist or removal orders and to initiate
injunctive actions against banking organizations and institution-affiliated
parties, as defined. In general, these enforcement actions may be initiated for
violations of laws and regulations and unsafe or unsound practices. Other
actions or inactions may provide the basis for enforcement action, including
misleading or untimely reports filed with regulatory authorities.
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11
AMERICAN BANCORPORATION FORM 10-K Annual Report
December 31, 1997
Selected Statistical Information
The following tables and schedules, referenced in the index
presented below, set forth certain consolidated statistical information of
American Bancorporation, required of bank holding companies pursuant to Guide 3.
Selected tables are set forth on pages 29 through 46 in the annual report to
stockholders, which pages are hereby incorporated by reference in this Form
10-K. The information contained in the tables should be read in conjunction with
the consolidated financial statements of American Bancorporation and the notes
thereto appearing elsewhere in this Form 10-K.
Page Reference
Form Annual
10K report
to
stock-
holders
I. Distribution of assets, liabilities and stockholders' equity,
interests rates and interest differential
a. Average balance sheet ................................... -- 30
b. Average earning assets and interest bearing
liabilities, interest earned and paid, yield and rates .. -- 30
c. Interest variances ...................................... -- 32-33
II Investment portfolio
a. Carrying value of investment securities by type ......... -- 40
b. Maturity and weighted average yield ..................... -- 40
III Loans
a. Types of loans .......................................... -- 37
b. Maturity and sensitivity to change in interest rates .... -- 37
c. Non-performing loans .................................... -- 38
IV Summary of loans loss experience ............................ 12 39
V Deposits
a. Average amount .......................................... -- 40
b. Maturity of time certificates of deposits in
excess of $100,000 ...................................... -- 40
VI Return on equity and assets ................................. -- 29
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12
AMERICAN BANCORPORATION FORM 10-K Annual Report
December 31, 1997
The following table summarizes the balance of the allowance for loan
losses by the major loan categories. The table supplements that on page 39 of
the Company's Annual Report to Stockholders for the year ended December 31,
1997, incorporated by reference herein.
Allowance Percent
amount in each category
(000's omitted) to total loans
December 31, 1997
Commercial, financial and agricultural... $ 1,550 32.2%
Real estate - construction............... - 0.3
Real estate - mortgage................... 762 45.8
Installment.............................. 641 21.7
Leases................................... - 0.0
Unallocated.............................. 331 N/A
-------- -----
$ 3,284 100.0%
======= =====
December 31, 1996
Commercial, financial and agricultural... $ 871 30.5%
Real estate - construction............... - 0.7
Real estate - mortgage .................. 515 50.3
Installment ............................. 434 18.5
Leases................................... - 0.0
Unallocated.............................. 1,744 N/A
-------- ------
$ 3,564 100.0%
======= =====
December 31, 1995
Commercial, financial and agricultural... $ 984 25.2%
Real estate - construction............... - 0.7
Real estate - mortgage................... 358 51.4
Installment.............................. 513 22.7
Leases................................... - 0.0
Unallocated.............................. 1,999 N/A
------- ------
$3,854 100.0%
====== =====
December 31, 1994
Commercial, financial and agricultural... $1,165 22.6%
Real estate - construction............... - 0.5
Real estate - mortgage................... 407 52.3
Installment.............................. 913 24.6
Leases................................... - 0.0
Unallocated.............................. 1,252 N/A
------- ------
$3,737 100.0%
====== =====
December 31, 1993
Commercial, financial and agricultural... $2,099 28.2%
Real estate - construction............... - 1.2
Real estate - mortgage................... 246 35.5
Installment.............................. 645 35.1
Leases................................... - 0.0
Unallocated.............................. 554 N/A
-------- ------
$3,544 100.0%
====== ======
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13
AMERICAN BANCORPORATION FORM 10-K Annual Report
December 31, 1997
ITEM 2. PROPERTIES
The Company and its non-banking subsidiaries conduct business from the
Company's administrative headquarters in Wheeling, West Virginia and the Bank
conducts business from its various office locations.
The net book value of the Company's office facilities, furniture and
equipment, including leasehold improvements and property held for future
expansion (less accumulated depreciation and amortization) at December 31, 1997
was $10.1 million. The Company does not believe that the termination of any of
its leases would have a material effect on its operations.
Listed below are the locations of the Company's executive offices and
the branch offices of the Bank that were operating as of December 31, 1997, as
well as any proposed branch office locations. All buildings are owned by the
Company unless otherwise indicated. Except as noted, the Company believes its
property is suitable and adequate for its current and proposed needs.
Approximate
Office Year Opened Sq. Feet
American Bancorporation
Mull Center, Wheeling, West Virginia
Executive and non-bank subsidiary
offices ......................... 1987 4,000
Wheeling National Bank
OHIO
Cambridge ........................ 1974 5,840
Cambridge - Drive-in ............. 1989 14,000
Gahanna .......................... 1990 3,200 1
Gahanna - StoneRidge Plaza ....... 1996 1,600 1
Reynoldsburg ..................... 1990 6,000
Flushing ......................... 1953 5,400 1
St. Clairsville .................. 1991 8,000 2
St. Clairsville - Ohio Valley Mall 1994 3,088 2
Shadyside ........................ 1980 4,200
Freeport ......................... 1988 1,500
Barnesville ...................... 1994 2,000
Columbus ......................... 1993 1,350 1
Columbus (Administrative offices) 1994 2,419 1
Steubenville ..................... 1994 1,400 2
WEST VIRGINIA
Wheeling ......................... 1969 29,515
Wheeling - Drive-in .............. 1991 18,583
New Martinsville ................. 1978 2,800
Pine Grove ....................... 1983 1,125
Wheeling Island .................. 1984 1,280
Elm Grove ........................ 1986 2,420 1
Weirton .......................... 1986 15,214
Weirton - Drive-in................ 1989 4,800
Weirton Heights .................. 1990 1,500 1
American Mortgages, Inc.
Elm Grove ..................... 1994 4,700 1
Premier Mortgage, Ltd.
Worthington, Ohio ............. 1996 2,250 1
(1) Leased.
(2) Ground leased.
<PAGE>
14
AMERICAN BANCORPORATION FORM 10-K Annual Report
December 31, 1997
ITEM 3. LEGAL PROCEEDINGS
The Registrant and its affiliates are not involved in any material
pending legal proceedings outside the normal conduct of business (including
proceedings arising from environmental quality statutes) to which the Registrant
is a party, or of which its property is the subject, nor are any proceedings
known to be contemplated.
PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
AND REPORTS ON FORM 8-K
A. The following documents are filed as part of this report:
1. Financial Statements
Page reference
Annual Report
to Stockholders
Independent Auditors' Report
For the years ended December 31, 1997, 1996 and 1995 ......... 28
Consolidated financial statements
Consolidated balance sheet at December 31, 1997 and 1996 ..... 3
Consolidated statement of income for the years ended
December 31, 1997, 1996 and 1995 ........................... 4
Consolidated statement of stockholders' equity for the years
ended December 31, 1997, 1996 and 1995 ..................... 5
Consolidated statement of cash flows for the years ended
December 31, 1997, 1996 and 1995 ........................... 6
Notes to consolidated financial statements including condensed
financial information of Registrant ........................ 7 - 27
2. Financial Statement Schedules
All schedules have been omitted since the required information is not
present in amounts sufficient to require submission or because the information
required is included in the financial statements, including the notes thereto.
<PAGE>
15
AMERICAN BANCORPORATION FORM 10-K Annual Report
December 31, 1997
3. Exhibits Page No. in
Form 10-K
Number
3.1 Fifth Amended Articles of Incorporation ................. 18 - 22
3.2 Amended Code of Regulations ............................. 23 - 31
3.3 1987 Amendment to Fifth Amended Articles of Incorporation 32
3.4 1987 Amendment to Amended Code of Regulations ........... 33
3.5 1988 Amendment to Amended Code of Regulations ........... 34
3.6 1990 Amendment to Amended Code of Regulations ........... 35
4.1 Specimen Common Share Certificate as of December 15, 1988 36 - 37
10.1 American Bancorporation Senior Management
Incentive Compensation Plan ............................. 38 - 46
10.2 Agreement to Merge between Wheeling National Bank and
Columbus National Bank .................................. 47 - 50
10.3 Office Purchase and Assumption Agreement by and between
Columbus National Bank and Bank One, Steubenville, NA ... 51 - 94
13.1 1997 Annual Report to Security Holders .................. 95 - 144
22.1 Subsidiaries:
The following is a list of all subsidiaries of American
Bancorporation, the jurisdiction of incorporation or organization,
and the percentage of shares owned by American Bancorporation for
each such subsidiary.
Jurisdiction Percentage
Name
Wheeling National Bank ......................... U.S. 100%
American Bancservices, Inc. .................... Ohio 100%
American Mortgages, Inc. ....................... Ohio 100%
American Bancleasing, Inc. ..................... Ohio 100%
American Bancdata Corporation .................. Ohio 100%
Premier Mortgage, Ltd. ................... Ohio 51% *
*Through the Company's ownership in American Mortgages, Inc.
B. Reports on Form 8-K:
Date Item Number Description
None
<PAGE>
16
AMERICAN BANCORPORATION FORM 10-K Annual Report
December 31, 1997
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized on March 31, 1998.
AMERICAN BANCORPORATION
/s/ Jeremy C. McCamic
Jeremy C. McCamic Chairman
and Chief Executive Officer
Pursuant to the requirement
of the Securities Exchange Act of 1934, as amended, this report
has been signed by the following persons on behalf of the
Registrant and in the capacities indicated as of March 31, 1998.
/s/ Jack O. Carnter /s/ Jeremy C. McCamic
Jack O. Cartner Jeremy C. McCamic
Director Director, Chairman and
Chief Executive Officer
/s/ Paul W. Donahie /s/ Jolyon W. McCamic
Paul W. Donahie Jolyon W. McCamic
Director and President Director and Vice Chairman
/s/ Abigail M. Feinknopf /s/ Brent E. Richmond
Abigail M. Feinknopf Brent E. Richmond
Director Secretary, Treasurer,
Executive Vice President and
Chief Financial Officer
Jay T. McCamic
Jay T. McCamic
Director
<PAGE>
17
AMERICAN BANCORPORATION FORM 10-K Annual Report
December 31, 1997
EXHIBIT INDEX
Number Description SEC Page #
- ---------------------------------------------------------- ------------
3.1 Fifth Amended Articles of Incorporation (18 - 22)
3.2 Amended Code of Regulations (23 - 31)
3.3 1987 Amendment to Fifth Amended Articles of Incorporation (32)
3.4 1987 Amendment to Amended Code of Regulations (33)
3.5 1988 Amendment to Amended Code of Regulations (34)
3.6 1990 Amendment to Amended Code of Regulations (35)
4.1 Specimen Common Share Certificate as of December 15, 1988 (36 - 37)
10.1 American Bancorporation Senior Management Incentive
Compensation Plan (38 - 46)
10.2 Agreement to Merge between Wheeling National Bank and
Columbus National Bank........................................(47 - 50)
10.3 Office Purchase and Assumption Agreement by and between
Columbus National Bank and Bank One, Steubenville, NA.........(51 - 94)
13.1 1997 Annual Report to Security Holders........................(95 - 144)
22.1 Subsidiaries:
The following is a list of all subsidiaries of American Bancorporation, the
jurisdiction of incorporation or organization, and the percentage of shares
owned by American Bancorporation for each such subsidiary.
Jurisdiction Percentage
Name
Wheeling National Bank U.S. 100%
American Bancservices, Inc. Ohio 100%
American Mortgages, Inc. Ohio 100%
American Bancleasing, Inc. Ohio 100%
American Bancdata Corporation Ohio 100%
Premier Mortgage, Ltd. Ohio 51% *
*Through the Company's ownership in American Mortgages, Inc.
<PAGE>
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<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> DEC-31-1997
<CASH> 11,027,692
<INT-BEARING-DEPOSITS> 0
<FED-FUNDS-SOLD> 2,414,812
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 169,175,987
<INVESTMENTS-CARRYING> 169,175,987
<INVESTMENTS-MARKET> 169,175,987
<LOANS> 286,691,051
<ALLOWANCE> 3,284,338
<TOTAL-ASSETS> 484,606,472
<DEPOSITS> 355,734,332
<SHORT-TERM> 87,574,152
<LIABILITIES-OTHER> 6,179,342
<LONG-TERM> 1,424,800
<COMMON> 7,824,185
0
0
<OTHER-SE> 25,869,661
<TOTAL-LIABILITIES-AND-EQUITY> 484,606,472
<INTEREST-LOAN> 24,890,709
<INTEREST-INVEST> 10,300,551
<INTEREST-OTHER> 347,905
<INTEREST-TOTAL> 35,539,165
<INTEREST-DEPOSIT> 13,184,062
<INTEREST-EXPENSE> 18,277,655
<INTEREST-INCOME-NET> 17,261,510
<LOAN-LOSSES> 0
<SECURITIES-GAINS> 34,336
<EXPENSE-OTHER> 13,101,080
<INCOME-PRETAX> 7,086,274
<INCOME-PRE-EXTRAORDINARY> 4,508,807
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,508,807
<EPS-PRIMARY> 1.44
<EPS-DILUTED> 1.44
<YIELD-ACTUAL> 0393
<LOANS-NON> 815,000
<LOANS-PAST> 1,277,000
<LOANS-TROUBLED> 566,000
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 3,563,774
<CHARGE-OFFS> 578,184
<RECOVERIES> 298,748
<ALLOWANCE-CLOSE> 3,284,338
<ALLOWANCE-DOMESTIC> 0
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0
</TABLE>
Exhibit 3.1
THE FIFTH
AMENDED ARTICLES OF INCORPORATION
OF
AMERICAN BANCORPORATION
Original Articles Filed With Secretary of State on August 10, 1966.
These Amended Articles of Incorporation restate, integrate, supersede
and further amend the Articles of Incorporation, as amended, to read as herein
set forth in full:
FIRST. The name of the Corporation is AMERICAN BANCORPORATION.
SECOND. The place in the State of Ohio where the principal office of
the corporation is located is in the City of Columbus and in
Franklin County.
THIRD. The purposes for which the corporation is formed are:
(a) To organize, acquire by subscription, purchase,
exchange or otherwise, invest in and own, any shares or other securities
of, a commercial bank, a savings bank, a trust company, a special plan
bank, or any one or more of such similar institutions, or in any firm or
company that provides services, materials, or equipment to banks, trust
companies or similar institutions, and
(b) To engage in any lawful act or activity for
which corporations may be formed under the provisions of the Ohio
General Corporation Law, Title 17 of the Revised Code.
FOURTH. The authorized number of shares of the corporation is
six million seven hundred thousand (6,700,000)
shares, six and one-half million (6,500,000) of which
are Common Shares, without par value and two hundred
thousand (200,000) shall be Preferred Stock with a
par value of $100.00 each, issuable in series.
FIFTH. The expressed terms of the Preferred Stock are as follows:
1. All shares of the Preferred Stock of any
particular series shall be identical with each other in all respects,
except as to the date from which dividends thereon shall be cumulative.
All shares of Preferred Stock shall be of equal rank with each other,
regardless of series, and shall be identical with each other in all
other respects, except as herein provided. Preferred Stock shall be
issued in series, running "A to "Z", with such distinctive serial
designation as shall be stated by resolution of the Board of Directors
who shall have full discretion , in respect to preferred shares then
unissued or in the treasury of the Company by adopting an amendment to
the Articles of Incorporation in the matter of the following terms and
conditions:
(a) to fix or change the number of shares constituting the particular series;
(b) to fix or change the rate or amount per annum at which the holders of the
shares of the particular series shall be entitled to receive dividends, the
dates on which such dividends shall be payable and the date or dates from
which such dividends shall be cumulative;
(c) to fix or change the amount or amounts per share for the particular series
payable to the holders thereof in case of dissolution, liquidation or
winding up of the Corporation;
<PAGE>
(d) to fix or change the redemption rights and price or prices per share for
the particular series;
(e) to fix or change the sinking fund requirements, if any, for the particular
series, which may require the Corporation to set aside or provide a sinking
fund out of earnings or otherwise for the purchase or redemption of the
shares of such series;
(f) to determine whether or not the shares of the particular series shall be
made convertible into other shares of the Corporation, to conversion price
or prices, or the rates of exchange at which such conversion may be made,
and the terms and conditions upon which any such conversion rights may be
exercised;
(g) to determine whether or not there shall be restrictions on the issuance of
shares of the particular series or of any other class or series; and
(h) to include additional shares of Preferred Stock which the Corporation is
authorized to issue in the particular series.
2.
(a) The holders of Preferred Stock at the time outstanding shall be entitled to
receive, out of any funds legally available for the payment of dividends,
if, when and as declared by the Board of Directors, cash dividends,
preferential as set forth in the next succeeding paragraph of this
Subdivision 2, at the rate or amount per annum and payable on the dates
fixed for the particular series by the Board of Directors.
(b) Such dividends shall be cumulative, in the case of all shares of a
particular series, from the date or dates fixed by the Board of Directors.
No dividend or other distribution (other than a dividend payable in Common
Shares of the Corporation) shall be declared, paid or made on the Common
Shares of the Corporation, and none of such Common Shares shall be
purchased or otherwise acquired for 2 consideration by the Corporation,
until the full cumulative dividends on all outstanding shares of all series
of the Preferred Stock up to the end of the current dividend period shall
have been declared and paid or shall have been declared and a sum
sufficient for the payment thereof by the Board of Directors. Accrued
dividends on the Preferred Stock shall bear no interest.
(c) If the amount declared by the Board of Directors to be paid as dividends on
all outstanding shares of the Preferred Stock shall be insufficient to pay
the full dividends, including accumulations, on all outstanding shares of
all series, such amount shall be paid on the shares of each series only in
the ratio which the full dividend, including accumulations, on all
outstanding shares of a particular series would bear to the full dividend,
including accumulations, on all outstanding shares of all series.
(d) The holders of the Preferred Stock shall not be entitled to receive any
dividends thereon other than the dividends referred to in this Subdivision
2.
<PAGE>
3. In the event of any liquidation, dissolution or winding up of the
Corporation, whether voluntary or involuntary, then before any distribution
shall be made to the holders of Common Shares of the Corporation, the
holders of shares of each particular series of Preferred Stock outstanding
shall be entitled to receive such amount as shall have been fixed by the
Board of Directors, plus an amount in the case of each such share equal to
all accrued and unpaid dividends thereon up to the date of payment of the
final amount due thereon. Such amounts shall be payable without interest.
After such payment to the holders of Preferred Stock, the remaining assets
of the Corporation, shall be divided and distributed among the holders of
the Common Shares then outstanding according to their respective interests.
If the amount available for payment to the holders of outstanding shares of
Preferred Stock upon any liquidation, dissolution or winding up of the
Corporation shall be insufficient to pay the full amounts theretofore
specified in this Subdivision 3 to be paid to the holders of all
outstanding shares of Preferred Stock, the amount available shall be
distributed on the outstanding shares of each particular series in the
ratio which the maximum amount payable on the outstanding shares of such
particular series bears to the maximum amount payable on the outstanding
shares of all series. Neither the consolidation or merger of the
Corporation with or into any other corporation or corporations, nor the
merger of any corporation or corporations into the Corporation, nor a
reorganization of the Corporation, or the sale or transfer by the
Corporation of all or any part of its assets, shall be regarded as a
liquidation, dissolution or winding up of the Corporation within the
meaning of this Subdivision 3.
4. (a) The Corporation, at the option of the Board of Directors, may redeem
the whole or any part of the shares of Preferred Stock at the time
outstanding or the whole or part of any particular series thereof, at any
time and from time to time, by paying, in the case of the Preferred Stock
of each particular series, such redemption price therefore as shall have
been fixed by the Board of Directors plus an amount in the case of each
share so to be redeemed, equal to all accrued and unpaid dividends thereon
up to the date of redemption.
(b) If at any time less than all of the outstanding shares of Preferred Stock
shall be called for redemption, the Board of Directors may select the
particular series to be redeemed and if less than all of the outstanding
shares of a particular series are to be called for redemption, the shares
so to be redeemed shall be selected by lot, or pro rata,
(c) Notice of every such redemption shall be given by the Corporation by
mailing a copy of such notice at least 30 days prior to the date fixed for
such redemption to each of the holders of record of the shares of Preferred
Stock to be redeemed, at their respective addresses appearing on the books
of the Corporation. From and after the date fixed in such notice as the
date of redemption (unless default shall be made by the Corporation in
providing moneys for payment of the redemption price), all dividends on the
shares of Preferred Stock thereby called for redemption shall cease to
accrue, and all rights of the holders as shareholders of the Corporation
(except the right to receive payment of said redemption price and accrued
and unpaid dividends to the date of redemption) shall cease to determine;
or if the date shall be the date (which date shall be the date of
redemption or prior thereto) on which the Corporation shall deposit with a
bank or trust company doing business in the State of Ohio, as Paying Agent,
moneys sufficient in amount to pay at the office of such Paying Agent, on
the date of redemption the redemption price, together with accrued and
unpaid dividends to the date of redemption of such Paying Agent and the
intention of the Corporation to deposit said moneys is made known on or
before the date of redemption with such Paying Agent, all dividends on the
shares of Preferred Stock so called for redemption shall cease to accrue
and all rights of the holders thereof as shareholders of the Corporation
(except the right to receive from said Paying Agent said redemption price
and accrued and unpaid dividends to the date of redemption, and the right,
if any, to convert shares thereof into Common Shares of the Corporation)
shall thereupon cease to determine, and by the deposit of said moneys with
said Paying Agent
<PAGE>
the
shares of Preferred Stock so called for redemption shall be redeemed. Any
moneys so deposited with said Paying Agent which shall remain unclaimed by
the holders of the shares of Preferred Stock so called for redemption shall
be redeemed. Any moneys so deposited with said Paying Agent which shall
remain unclaimed by the holders of the shares of Preferred Stock so called
for redemption shall be paid by said Paying Agent to the Corporation, and
thereafter the holders of the shares of Preferred Stock so called for
redemption shall look only to the Corporation for payment.
(d) So long as all cumulative dividends on the shares of Preferred Stock of all
series at the time outstanding are paid or declared and set apart for
payment for all past dividend periods, the Corporation shall have the right
at any time or from time to time, to purchase all or any part of the shares
of Preferred Stock of any series, either at public or private sale, at a
price not in excess of the current redemption price per share, plus accrued
dividends and plus an amount equal to usual and customary brokerage
commissions payable in connection with the purchase thereof.
5. The
holders of the Preferred Stock shall, subject to the provisions of the
Regulations of the Corporation and the statutes of Ohio relating to the
fixing of a record date, be entitled to one vote for each share of
Preferred Stock held by them, respectively, for the election of directors
and for all other purposes, but shall not be entitled to any other, or
special, or restrictive voting rights of any kind whatsoever, except only
as and when and to the extent required by statute, and in the case of
Preferred Stock of each particular series, as and when and to the extent as
shall have been fixed by the Board of Directors.
6. No holder of Preferred Stock shall be entitled, as such holder or as a
matter of right, to subscribe for or purchase any part of any new or
additional issue of stock of any class of series, whether now or hereafter
authorized, or of any stock or securities convertible into stock of any
class or series, and whether issued for cash, property, services, or
otherwise.
7. Subject to and in accordance with the provision of this Fifth Article,
there is hereby created the following series of Preferred Shares:
(To be inserted, when authorized, by Resolution of the Board of Directors)
SIXTH. Except as otherwise expressly provided herein, no shareholder of the
Corporation shall by reason of his holding shares of any class have any
pre-emptive or preferential right to purchase or subscribe to any shares of
any class of the Corporation, now or hereafter authorized, or any notes,
debentures, bonds or other securities convertible into or carrying options
or warrants to purchase shares of any class, now or hereafter authorized,
whether or not the issuance of any such shares, or such notes, debentures,
bonds or other securities, would affect adversely the dividend of voting
rights of such shareholder, and the Board of Directors may issue shares of
any class of the Corporation, or any notes, debentures, bonds, or other
securities convertible into or carrying options or warrants to purchase
shares of any class, without offering any such shares of any class, either
in whole or in part, to the existing shareholders of any class; provided,
however, that the Board of Directors may, in its discretion, grant such
preferential subscription rights at such price and upon such other terms
and conditions as it may determine.
SEVENTH. The Corporation may, from time to time, pursuant to authorization by
the Board of Directors and without action by the shareholders, purchase or
otherwise acquire shares of the Corporation of any class or classes in such
manner, upon such terms and in such amounts as the Board of Directors shall
determine; subject, however, to such limitation or restriction, if any, as
is contained in the express terms of any class of shares of the Corporation
outstanding at the time of the purchase or acquisition in question.
<PAGE>
EIGHTH. Notwithstanding any provision of the Ohio Revised Code now or hereafter
in force requiring for any purpose the vote, consent, waiver or release of
the holders of shares entitling them to exercise two-thirds or any other
proportion, of the voting power of the Corporation or any class or classes
of shares thereof, such action, unless otherwise expressly required by
statute or by these Amended Articles of Incorporation may be taken by the
vote, consent, waiver or release of the holders of shares entitling them to
exercise a majority of the voting power of the Corporation or of such class
or classes.
Exhibit #3.2
AMENDED CODE OF REGULATIONS
AMERICAN BANCORPORATION
The following Code of Regulations supercedes and takes the place of the
heretofore existing Code of Regulations of the Company.
ARTICLE I
OFFICES
Section 1. Principal Office. The principal offices of the
Corporation in the State of Ohio is in the City of Columbus and
in Franklin County.
Section 2. Other Offices. The Corporation may also have offices
at such other places both within and without the State of Ohio as
the Board of Directors may from time to time determine or the
business of the Corporation may require.
ARTICLE II
MEETINGS OF SHAREHOLDERS
Section 1. Annual Meeting. The annual meeting of the Shareholders shall
be held in March, April, or May of each year on such day and at such hour as the
Board of Directors way fix, for the purpose of electing Directors and for the
transaction of such other business as way come before the meeting. If the
election of Directors shall not be held in the manner of designation herein for
any annual meeting of the Shareholders, or at any adjournment thereof, the Board
of Directors shall cause the election to be held at a special meeting of the
Shareholders as soon thereafter as may be convenient.
Section 2. Special Meetings. Special meetings of the Shareholders, for
any purpose or purposes, unless otherwise prescribed by statute, nay be called
by the President, by the Chairman of the Board of Directors, and shall be called
by the President or the Secretary at the request of the holders of not less than
twenty-five of all the outstanding shares of the Corporation entitled to vote at
the meeting.
Section 3. Place of Meeting. The Board of Directors may designate any
place, either within or without the State of Ohio as the place of meeting for
any annual meeting or for any special meeting called by the Board of Directors.
A waiver of notice signed by a majority of Shareholders entitled to vote at a
meeting may designate any place, either within or without the State of Ohio, as
the place for the holding of such meeting. If no designation is made or if a
special meeting be otherwise called, the place of meeting shall be the principal
office of the Corporation in the State of Ohio.
Section 4. Notice of Meeting. (a) Written or printed notice stating the
place, date, and hour of the meeting, and in the case of a special meeting, the
purpose or purposes for which the meeting is called, shall be delivered not less
than seven nor more than sixty days before the date of the meeting, either
personally or by mail, or by the direction of the President, or the Secretary,
or the officer or persons calling the meting, to each Shareholder of record
entitled to vote at such meting. If wailed, such notice shall be deemed to be
delivered when deposited in the United States mail, addressed to the Shareholder
at his address as it appears on the stock transfer books of the Corporation,
with postage thereon prepaid. In the event of the transfer of shares after
notice has been given and prior to the holding of meting, it shall be necessary
to serve notice upon the transferee. If any meting is adjourned to another time
or place, no further notice as to such adjourned meting need be given, other
than by announcement at the meting at which such adjournment is taken.
<PAGE>
(b) Whenever notice is required to be given under any provisions
of these Regulations, a written waiver thereof, signed by the person entitled to
notice, whether before or after the time stated in these Regulations, shall be
deemed to be equivalent to notice. Attendance of a person at a meeting shall
constitute a waiver of notice of such meting, except when the person attends a
meting for the express purpose of objecting, at the beginning of the meting, to
the transaction of any business because the meting is not lawfully called or
convened.
Section 5. Closing of Transfer Books or Fixing of Record Date.
(a) For the purpose of determining Shareholders entitled to
notice or to vote at any meting of Shareholders or any adjournment thereof, or
Shareholders entitled to receive payment of any dividend, or in order to make a
determination of Shareholders for any other proper purpose, the Board of
Directors of the Corporation may provide that the stock transfer books shall be
closed for a stated period but not to exceed, in any case, sixty days. If the
stock transfer books shall be closed for the purpose of determining Shareholders
entitled to notice or to vote at a meting of Shareholders, such books shall be
closed for at least seven days immediately preceding such meting.
(b) In lieu of closing the stock transfer books, the Board of
Directors may fix in advance a date as the record date for any such
determination of Shareholders, such date in any case to be not more than sixty
days, and in case of a meting of Shareholders, not less than seven days prior to
the date on which the particular action, requiring such determination of
Shareholders, is to be taken.
(c) If no record date is fixed and the stock transfer books are
not closed:
(1) The record date for determining Shareholders entitled
to notice of or to vote at a meeting of Shareholders shall
be at the close of business on the day next preceding the
day on which notice is given, or, if notice is waived, at
the close of business on the day next preceding the day on
which the meting is held, as the case may be.
(2) The record date for determining Shareholders entitled
to express consent to corporate action in writing without
a meting, when no prior action by the Board of Directors
is necessary, shall be the day on which the first written
consent is expressed.
(3) The record date for determining Shareholders for any other
purpose shall be at the close of business on the day on
which the Board of Directors adopts the resolution
relating thereto.
(d) A determination of Shareholders of record to notice of or
to vote at a meeting of shareholders shall apply to any
adjournment of the meeting; provided, however, that the
Board of Directors may fix a new record date for the
adjourned meeting.
Section 6. Voting Lists. The officer or agent having charge of the stock
transfer books for shares of the Corporation shall make, at least seven days
before each meeting of Shareholders, a complete list of the Shareholders
entitled to vote at such meeting, or any adjournment thereof, arranged in
alphabetical order, with the address of and the number of shares held by each,
which list, for a period of seven days prior to such meeting, shall be kept on
file at the principal office of the Corporation and shall be subject to the
inspection by any Shareholder, for any purpose germane to the meeting, at any
time during usual business hours. Such list shall also be produced and kept open
at the time and place of the meeting and shall be subject to the inspection of
any Shareholder during the whole time of the meeting. The original stock
transfer book shall be prima facie evidence as to who are the Shareholders
entitled to examine such list or transfer book or to vote at any meeting of
Shareholders.
Section 7. Quorum. The Shareholders present in person or by proxy at any
meeting for the election of directors shall constitute a quorum for that propose
to constitute a quorum at any meeting of shareholders for any other purpose,
there shall be present, in person or by proxy, the holders of shares entitling
them to exercise a majority of the voting power. If less than a majority of the
outstanding shares are represented at a meeting, a majority of the shares so
represented may adjourn the meeting from time
<PAGE>
to time without further notice. At such adjourned meeting at which a quorum
shall be present or represented, any business may be transacted which might have
been transacted at the meeting as originally notified. The Shareholders present
at a duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough Shareholders to leave less than a
quorum.
Section 8. Proxies. At all meetings of Shareholders, a Shareholder may
vote by proxy executed in writing by the Shareholder or by his duly authorized
attorney-in-fact. Such proxy shall be filed with the Secretary of the
Corporation before or at the time of the meeting. No proxy shall be valid after
eleven months from the date of its execution, unless otherwise provided by the
proxy.
Section 9. Voting Shares. Each outstanding share entitled to vote shall
be entitled to one vote upon each matter submitted to a vote at a meeting of
Shareholders.
Section 10. Voting of Shares by Certain Holders.
(a) Shares standing in the name of another corporation may be voted by
such officer, agent or proxy as the By-Laws of such corporation may prescribe,
or , in the absence of such provision, as the Board of Directors of such
corporation may determine.
(b) Shares held by an administrator, executor, guardian, or conservator
way be voted by him, either in person or by proxy, without a transfer of such
shares into his name. Shares standing in the name of a trustee may be voted by
him, either in person or by proxy but no trustee shall be entitled to vote
shares held by him without a transfer of such shares into his name.
(c) Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be voted by
such receiver without transfer thereof into his name if authority to do so be
contained in an appropriate order of the court by which such receiver was
appointed.
(d) A Shareholder whose shares are pledged shall be entitled to vote
such shares until the shares have been transferred into the name of the pledgee,
and thereafter the pledgee shall be entitled to vote the shares so transferred.
(e) Shares of its own stock belonging to the Corporation or held by it
in a fiduciary capacity shall not be voted, directly or indirectly, at any
meeting, and shall not be counted in determining the total number of outstanding
shares at any given time.
Section 11. Informal Action by Shareholders. Unless otherwise prohibited
by law, any action required to be taken at a meeting of Shareholders, or any
other action which may be taken at a meeting of the Shareholders, may be taken
without a meeting if a consent in writing, setting forth the action so taken,
shall be signed by all the holders of outstanding stock. Prompt notice of the
taking of the corporate action without a meeting by less than unanimous written
consent shall be given to those Shareholders who have not consented in writing.
ARTICLE III
BOARD OF DIRECTORS
Section 1. General Powers. The business and affairs of the
Corporation shall be managed by its Board of Directors.
Section 2. Number, Tenure, and Qualifications.
(a) The number of Directors of the Corporation shall be not less than
three nor more than thirty-five the precise number to be determined annually by
a resolution of the Board of Directors. The number of Directors shall not be
changed after the annual meeting except at a special meeting of Shareholders
called for that purpose. The Directors shall be classified in respect to the
time for which they shall severally hold office, by dividing them into three (3)
classes, each class consisting of approximately one-third of the whole
<PAGE>
number of the Board of Directors or such other number as determined by the
Board. The Directors of the first class shall be elected for a term of one (1)
year; the Directors of the second class shall be elected for a term of two (2)
years, and the Directors of the third class shall be elected for a term of three
(3) years. At each annual election, the successors to the Directors of the class
whose term shall expire in that year shall be elected to hold office for the
term of three years ( or such lesser terms as determined by the Board), so that
the term of office of one class of directors shall expire in each year.
Directors need not be residents of the State of Ohio or Shareholders of the
Corporation. Any Director may resign at any time upon written notice to the
Corporation.
(b) The membership of the Board of Directors of the Corporation shall be
advised by the Advisory Directors of the Corporation. Advisory Directors may
advise the Board of Directors on all matters submitted for the Board's vote
except for (1) the selection of Directors to fill vacancies; (2) The
determination as to how the shares of affiliate banks of the company shall be
voted and (3) such other reserved questions as the Directors shall deem
appropriate as further exceptions. Membership as an Advisory Director shall be
determined by the Board of Directors.
(c) The membership of the Board of Directors of the Corporation shall
be advised by the Council of Presidents of the Corporation. The Council of
Presidents way advise the Board of Directors of all matters submitted for the
Board's vote except for (1) the selection of directors to fill vacancies; (2)
the determination as to how the shares of affiliate banks of the company shall
be voted and (3) such other reserved questions as the Directors shall deem
appropriate as further exceptions. The membership on the Council of Presidents
shall be determined by the Board of Directors, however, each President of an
affiliate of the Company shall be a member of the Council ex-officio. Such
members to the Council shall also be known as Advisory Directors.
Section 3. Committees.
(a) The Board of Directors may, by resolution passed by a majority of
the whole board, designate one or more committees, each committee to consist of
not less than three of the Directors of the Corporation. The Board may designate
one or more Directors as alternate members of any committee, who may replace any
absent or disqualified member at any meeting of the Committee.
(b) Any such committee, to the extent provided in the resolution of the
Board of Directors, shall have and may exercise all the powers and authority of
the Board of Directors in the management of the business and affairs of the
Corporation, and may authorize the seal of the Corporation to be affixed to all
papers which may require it, but no such committee shall have the power or
authority of filling vacancies among the directors or in any committee of the
directors.
(c) Each such committee shall keep a written record of its facts and
proceedings and shall submit such record to the Board of Directors at each
regular meeting thereof and at such other times as requested by the Board of
Directors. Failure to submit such record, or failure of the Board to approve any
action indicated therein will not, however, invalidate such action to the extent
it has been carried out by the Corporation prior to the time the record of such
action was, or should have been, submitted to the Board of Directors as herein
provided.
Section 4. Regular Meetings. A regular meeting of the Board of Directors
shall be held without other notice than this Regulation immediately after, and
at the same place as, the annual meeting of the Shareholders. The Board of
Directors may provide, by resolution, the time and place either within or
without the State of Ohio for the holding of additional regular meetings without
other notice than such resolution.
Section 5. Special Meetings. Special meetings of the Board of Directors
may be called by or at the request of the Chairman of the Board of Directors,
the President, or a majority of the Directors. The person or persons authorized
to call special meetings of the Board of Directors may fix any place, either
within or without of the State of Ohio as the place for holding any special
meeting of the Board of Directors called by them.
Section 6. Notice. Notice of any such meeting shall be given at least
two days previously thereto by
<PAGE>
written notice delivered personally or mailed, telegram or cablegram to each
Director at his business address. If mailed, such notice shall be deemed to be
delivered when deposited in the United States Mail so addressed, with postage
thereon prepaid. If notice be given by telegram, such notice shall be deemed to
be delivered when the telegram is delivered to the telegraph company. Any
Director may waive notice of any meeting. The attendance of a Director at a
meeting shall constitute a waiver of notice of such meeting, except where a
Director attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called for or
convened. Neither the business to be transacted at, nor the purpose of, any
regular or special meeting of the Board of Directors need be specified in the
notice or waiver of such meeting.
Section 7. Quorum; Interested Directors.
(a) A majority of the number of directors fixed in the manner provided
by Section 2 of this Article III shall constitute a quorum for the transaction
of business at any meeting of the Board of Directors, but if less than such
majority is present at a meeting, a majority of the Directors present may
adjourn the meeting from time to time without further notice.
(b) No contract or transaction between the Corporation and one or more
of the Directors or officers, or between the Corporation and any other
corporation, partnership, association, or other organization in which one or
more of the Directors or officers are Directors or officers, or have a financial
interest, shall be void or voidable solely for this reason, or solely because
the Director or officer is present at or participates in the meeting of the
Board of Committee thereof which authorizes the contract or transaction, or
solely because his or their votes are counted for such purpose, if:
(1) The material facts as to his relationship or
interest and as to the contract or transaction are
disclosed or are known to the Board of Directors or
the Committee, and the Board of Committee in good
faith authorizes the contract or transaction by the
affirmative votes of a majority of the disinterested
Directors, even though the disinterested Directors
be less than a quorum; or
(2) The material facts as to his relationship or
interest and as to the contract or transaction are
disclosed or are known to the Shareholders entitled
to vote thereon, and the contract or transaction is
specifically approved in good faith by the
Shareholders; or
(3) The contract or transaction is fair as to the
Corporation as of the time it is authorized,
approved, or ratified, by the Board of Directors, a
committee thereof, or the Shareholders.
(c) Common or interested Directors may be counted in determining the
presence of a quorum, at a meeting of the Board of Directors or of a committee
which authorizes the contract or transaction.
Section 8. Manner of Acting. The act of the majority of the Directors
present at a meeting at which a quorum is present shall be the act of the Board
of Directors.
Section 9. Vacancies. Any vacancy occurring in the Board of Directors
may be filled by the affirmative vote of a majority of the remaining directors
though less than a quorum of the Board of Directors. A Director elected to fill
a vacancy shall be elected until the next annual meeting of Shareholders or any
special meeting prior thereto office. Any directorship to be filled by reason of
an increase in the number of Directors shall be filled by election at any annual
meeting or at a special meeting of Shareholders called for that purpose or by
the affirmative vote of a majority of the Directors where the Shareholders have
so delegated the authority.
Section 10. Compensation. When authorized by resolution of the Board of
Directors, Directors and members of any committee of the Board of Directors,
shall be entitled to reasonable Compensation for their services as Directors and
members of any such committee and to reimbursement for any reasonable expenses
incurred in attending such meeting. Any person receiving compensation under this
provision shall not be barred from serving the Corporation in any other capacity
and receiving reasonable compensation for such other services.
<PAGE>
Section 11. Presumption of Assent.
(a) A Director of the Corporation who is present at a meeting of the
Board of Directors at which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless his dissent shall be
entered in the minutes of the meeting or unless he shall file his written
dissent to such action with the person acting as the Secretary of the meeting
before the adjournment thereof or shall forward such dissent by registered mail
to the Secretary of the Corporation immediately after the adjournment of the
meeting. Such right to dissent shall not apply to a Director who voted in favor
of such action.
(b) The members of the Board of Directors or of any committee designated
by the Board of Directors shall, in the performance of his duties, be fully
protected in relying in good faith upon the books of account or reports made to
the Corporation by any of its officers, or by an independent certified public
accountant, or by an appraiser selected with reasonable care by the Board of
Directors or by any such committee, or in relying in good faith upon other
records of the Corporation.
Section 12. Informal Action.
(a) Any action required or permitted to be taken at any meeting of the
Board of Directors or any committee thereof may be taken without a meeting, if
all members of the Board or committee as the case my be, consent thereto in
writing, and the writing or writings are filed with the minutes of proceedings
of the Board or committee.
(b) The members of the Board of Directors or any committee designated by
such Board, may participate in a meeting of such Board or committee by means of
conference telephone or similar communication equipment by mans of which all
persons participating in the meeting can hear each other, and participation in a
meeting pursuant to this subsection shall constitute presence in person at such
meeting.
ARTICLE IV
OFFICERS
Section 1. Number. The officers of the corporation shall be a President
and one or more Vice Presidents (the number thereof to be determined by the
Board of Directors), a Secretary, and a Treasurer, each of whom shall be elected
by the Board of Directors. The Board of Directors may from time to time elect a
Chairman of the Board, one or more Vice Presidents, Assistant Secretaries,
Assistant Treasurers, and such other officers, assistant officers, and agents,
as may be deemed necessary may be elected or appointed by the Board of
Directors. Any two or more offices may be held by the same person, except the
offices of President and Secretary.
Section 2. Election and Tenn of Office. The officers of the Corporation
to be elected by the Board of Directors shall be elected annually by the Board
of Directors at the first meeting of the Board held after each annual meeting of
the Shareholders. If the election of officers shall not be held at such meeting,
such election shall be held as soon thereafter as conveniently as may be. Each
officer shall hold office until his successor shall have been duly elected and
shall have qualified or until his death or until he shall resign or shall have
been removed or in the manner hereinafter provided.
Section 3. Removal. Any officer or agent elected or appointed by the
Board of Directors may be removed by the Board of Directors whenever in its
judgment the best interests of the Corporation would be served thereby, but such
removal shall be without prejudice to the contract rights, if any, of the person
removed.
Section 4. Vacancies. A vacancy in any office because of death,
resignation, removal,disqualification or otherwise, way be filled by the Board
of Directors for the unexpired portion of the term.
Section 5. The Chairman of the Board. The Chairman of the Board, if one
be elected, shall, when present, preside at all meetings of the Board of
Directors. Except where required or permitted by law to be otherwise signed, the
Chairman shall possess the same power as the President to sign all certificates,
contracts, and other instruments of the Corporation which way be authorized by
the Board of Directors.
<PAGE>
Section 6. The President. The President shall have general supervision
of the business and affairs of the Corporation and over its several officers,
subject to the control of the Board of Directors. He shall, when present,
preside at all meetings of the Shareholders. It shall be his duty to have
general and active management of the business of the Corporation and to see that
all orders and resolutions of the Board of Directors are carried into effect. He
may sign, with the Secretary or any other proper officer of the Corporation
thereunto authorized by the Board of Directors, certificates for shares of the
Corporation, any deeds, mortgages, bonds, contracts, or other instruments which
the Board of Directors has authorized to be executed, except in cases where the
signing and execution thereof shall be expressly delegated by the Board of
Directors or by these Regulations to some other officer or agent of the
Corporation, or shall be required by law to be otherwise signed or executed; and
in general shall perform all duties as may be prescribed by the Board of
Directors from time to time. The President must be a Director of the
Corporation.
Section 7. The Vice President. In the absence of the President or in the
event of his death, inability or refusal to act, the Executive Vice President,
if one be elected, shall perform the duties of the President, and when so
acting, shall have all the powers of an be subject to all the restrictions upon
the President. The Executive Vice President, if there be one, may sign, with the
Secretary or an Assistant Secretary, certificates for shares of the Corporation;
and shall perform such other duties as from time to time nay be assigned to him
by the President or by the Board of Directors. Any additional Vice Presidents
shall perform such duties as the President or the Board of Directors may, from
time to time designate.
Section 8. The Secretary. The Secretary shall: (a) keep the minutes of
the Shareholders, the Board of Directors meetings, and of the Committees thereof
in one or more books provided for that purpose; (b) see that all notices are
duly given in accordance with the provisions of these Regulations or as required
by law; (c) be custodian of the corporate records and of the seal of the
Corporation and see that the seal of the Corporation is affixed to all
documents, the execution of which on behalf of the Corporation under its seal is
duly authorized; (d) sign with the President or the Executive Vice President,
certificates for shares of the Corporation the issuance of which shall have been
authorized by resolution of the Board of Directors; and (e) in general perform
all duties as from time to time may be assigned to him by the President or by
the Board of Directors.
Section 9. The Treasurer. If required by the Board of Directors, the
Treasurer shall give a bond for the faithful discharge of his duties in such sum
and with such surety or sureties as the Board of Directors may determine. He
shall: (a) have charge and custody of and be responsible for all funds and
securities of the Corporation; receive and give receipts for monies due and
payable to the Corporation from any source whatsoever, and deposit all such
monies in the name of the Corporation in such banks, trust companies or other
depositories as shall be selected in accordance with the provisions of Article V
of these Regulations; and (b) in general, perform all of the duties incident to
the office of Treasurer and such other duties as from time to time nay be
assigned to him by the President or by the Board of Directors.
Section 10. Assistant Secretaries and Assistant Treasurers. The
Assistant Secretaries, when authorized by the Board of Directors, may sign with
the President or a Vice President certificates for shares of the Corporation the
issuance of which shall have been authorized by a resolution of the Board of
Directors. The Assistant Treasurers shall respectively, if required b the Board
of Directors, give bonds for the faithful discharge of their duties in such sum
and with such sureties as the Board of Directors shall determine. The Assistant
Secretaries and Assistant Treasurers, in general, shall perform such duties as
shall be assigned to them by the Secretary or the Treasurer, respectively, or by
the President or by the Board of Directors.
Section 11. Salaries. The salaries of the Officers shall be fixed from
time to time by the President (except as to his own salary) or the Board of
Directors and no officer shall be prevented from receiving such salary by reason
of the fact that he is also a Director of the Corporation.
ARTICLE V
CONTRACTS, LOANS, CHECKS, AND DEPOSITS
Section 1. Contracts. The Board of Directors or Executive Committee may
authorize any officer or officers, agent or agents, to enter into any contract
or execute and deliver any instrument in the name of
<PAGE>
and on behalf of the Corporation, and such authority may be general or confined
to specific instances.
Section 2. Loans. No loans shall be contracted on behalf of the
Corporation and no evidences of indebtedness shall be issued in its name unless
authorized by a resolution of the Board of Directors or Executive Committee.
Such authority may be general or confined to specific instances.
Section 3. Checks, Drafts, Etc. All Checks, drafts or other orders for
the payment of money, notes, or other evidence of indebtedness issued in the
name of the Corporation, shall be signed by such officer or officers, agent or
agents of the Corporation and in such manner as shall from time to time be
determined by resolution of the Board of Directors or Executive Committee.
Section 4. Deposits. All funds of the Corporation not otherwise employed
shall be deposited from time to time to the credit of the Corporation in such
banks, trusts companies, or other depositories as the Board of Directors or
Executive Committee may select.
ARTICLE VI
CERTIFICATES FOR SHARES AND THEIR TRANSFER
Section 1. Certificates for Shares. Certificates representing shares of
the Corporation shall be in such form as shall be determined by the Board of
Directors. Such certificates shall be signed by the President or the Executive
Vice President and by the Secretary or an Assistant Secretary. The Board of
Directors may, be resolution, provide that any Vice President may sign such
certificate instead of the President and that a Vice President, Treasurer or
Assistant Treasurer, if any, may sign instead of the Secretary. If such
certificate is countersigned (1) by a transfer agent other than the Corporation
or its employee, or (2) by a registrar other than the corporation or its
employee, and any signature on the certificate may be a facsimile. All
certificates for shares shall be consecutively numbered or otherwise identified.
The name and address of the person to whom the shares and the date of the issue,
shall be entered on the stock transfer books of the Corporation. All
certificates surrendered to the Corporation for transfer shall be cancelled and
no new certificate shall be issued until the former certificate for a like
number of shares shall have been surrendered or cancelled, except that in case
of a lost, destroyed, or mutilated certificate a new one may be issued therefor
Upon such terms and indemnity to the Corporation as the Board of Directors may
prescribe.
Section 2. Transfer of Shares. Transfer of shares of the Corporation
shall be made only on the stock transfer book of the Corporation by the holder
of record thereof or by his legal representative, who shall furnish proper
evidence of authority to transfer, or by his attorney thereunto authorized by
power of attorney duly executed and filed with the Secretary of the Corporation,
and on surrendered for cancellation of the certificate for such shares. The
person in whose name shares stand on the books of the Corporation shall be
deemed by the Corporation to be the owner thereof for all purposes.
Section 3. Restriction on Transfer of Shares. The Board of Directors may
place such restrictions on the transfer (whether inter-vivos, by inheritance, or
by testamentary disposition), hypothecation, or other disposition of shares by
capital stock issued by the Corporation, which, in its judgment, it deems
advisable, and which do not unreasonably restrain alienation. Such restrictions
may, among other things, require that the Corporation be furnished with an
opinion of Counsel, satisfactory to it, that such transfer, hypothecation, or
other disposition will not result in the violation of any Federal or State Law
relating to securities transactions, or with a statement or ruling from the
governmental agency administering such law to that effect. The same restrictions
way be placed on previously issued and outstanding shares of capital stock of
the Corporation if the consent of the holders thereof is obtained. Any such
restrictions placed on the transfer, hypothecation or other disposition of the
shares of capital stock of the Corporation shall be conspicuously noted on each
certificate covering shares affected by such restrictions.
Section 4. Transfer Agent or Registrar. The Board of Directors may
appoint one or more transfer agents or transfer clerks and one or more
registrars, and may require all certificates for shares to bear the signature or
signature of any of them.
<PAGE>
FISCAL YEAR
The fiscal year of the Corporation shall begin on the first day of
January and end on the last day of December in each year.
ARTICLE VIII
DIVIDENDS
The Board of Directors may from time to time declare and the Corporation
may pay, dividends on its outstanding shares in the manner and upon the terms
and conditions provided by law.
ARTICLE IX
CORPORATE SEAL
The Board of Directors may provide a corporate seal which shall be
circular in form and have inscribed thereon the name of the Corporation, the
state of incorporation, the date of same, and the words "Corporate Seal". In
lieu of the corporate seal, when so authorized by the Board of Directors, a
facsimile thereof way be impressed or affixed or reproduced.
ARTICLE X
INDEMNIFICATION
Section 1. Coverage. The Corporation shall indemnify to the full extent
permitted by law any person who is or was made, or threatened to be made, a
party to an action, suit or proceeding (whether civil, criminal, administrative,
or investigative) by reason of the fact that he, his testator or intestate is or
was a Director, officer, or employee of the Corporation or services or served
any other corporation or enterprise at the request of the Corporation.
Section 2. Insurance. The Corporation shall have the 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 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 provision of these Regulations.
ARTICLE XI
AMENDMENTS
These Regulations may be altered, amended, or repealed and new
Regulations may be adopted by the affirmative vote of the holders of shares
entitling them to exercise a majority of the voting power of the corporation, or
without a meeting by the written consent of a like number of shareholders.
ARTICLE XII
BY-LAWS
The Board of Directors shall have power and authority to make such
By-laws not inconsistent with the Articles, Code of Regulations, or the Laws of
Ohio, as the Board shall deem proper or desirable.
EXHIBIT # 3.3
FORM OF AMENDMENT TO THE ARTICLES OF INCORPORATION
American Bancorporation
At a meeting of the shareholders duly called for the purpose of adopting
this amendment and held Tuesday, May 26, 1987 at which meeting a quorum of
shareholders was present in person or by proxy, and by the affirmative vote of
the holders of shares entitling then to exercise 63.56% of the voting power of
the corporation, the following resolution to amend the articles was adopted.
BE IT RESOLVED, that the Articles of Incorporation of American
Bancorporation be and the same are hereby amended so that the Second Article
thereof shall henceforth be and read as follows:
"Second. The place in the State of Ohio where the principal office of the
Corporation is located is in the City of St. Clairsville, Belmont County."
EXHIBIT #3.4
FORM OF AMENDMENT TO THE CODE OF REGULATIONS
American Bancorporation
At a meeting of the shareholders duly called for the purpose of adopting
this amendment and held Tuesday, May 26, 1987 at which meeting a quorum of
shareholders was present in person or by proxy, and by the affirmative vote of
the holders of shares entitling them to exercise 63.56% of the voting power of
the corporation, the following resolution to amend the Code of Regulations was
adopted.
BE IT RESOLVED, that the Code of Regulations of American Bancorporation
be and the same are hereby amended so that the First Article and Section I
thereof shall henceforth be and read as follows:
"Article I Section 1. The principal offices of the Corporation in the State
of Ohio is in the City of St. Clairsville and in Belmont County.'
EXHIBIT #3. 5
AMERICAN BANCORPORATION
1988 AMENDMENT TO THE CODE OF REGULATIONS
A meeting of the shareholders of American Bancorporation was held on
December 15, 1988, at which meeting a quorum of shareholders was present in
person or by proxy, and by the affirmative vote of the holders of shares
entitling them to exercise 79.5% of the voting power of the corporation, the
following resolution to amend the Code of Regulations was adopted.
BE IT RESOLVED, that the Code of Regulations of American Bancorporation be
and the same are hereby amended so that Article IV and Section 5 thereof shall
henceforth be amended to include a new second sentence which shall read as
follows:
"The Chairman of the Board shall be the Chief Executive Officer of the
Corporation and shall hold that title in addition to the title of
Chairman of the Board."
Exhibit 3.6
1990 AMENDMENT TO THE CODE OF REGULATIONS
AMERICAN BANCORPORATION
At a meeting of the shareholders on January 31, 1990, duly called for
the purpose of adopting this Amendment, at which meeting a quorum of
shareholders was present in person or by proxy, and by the affirmative vote of
the holders of shares entitling them to exercise 33 1/3% of the voting power of
the Corporation, the following resolution to amend the Code of Regulations was
adopted:
BE IT RESOLVED, that the Code of Regulations of American Bancorporation
be and the same are hereby amended so that Article II, Section 7 thereof shall
henceforth read as follows:
"Article II Section 7: The shareholders present in person or by proxy
at any meeting for the election of directors shall represent at least
one third of the outstanding shares of the Company. To constitute a
quorum at any meeting of shareholders for any other purpose, there
shall be present in person or by proxy, the holders of shares
entitling them to exercise a majority of the voting power. If less
than a majority of the outstanding shares are represented at a
meeting, a majority of the shares so represented may adjourn the
meeting from time to time without further notice. At such adjourned
meeting at which such a quorum shall be present or represented, any
business may be transacted at the meeting as originally notified. The
shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of
enough shareholders to leave less than a quorum."
Exhibit #4.1
Specimen common stock certificate (front)
COMMON STOCK
SHARES BER (#) 00000
(Corporate Logo)
American Bancorporation
INCORPORATED UNDER THE LAWS OF THE STATE OF OHIO
This Certifies That
(Name)
(Address)
(Address) Cusip 024076 40 8
is the owner of (# of shares)
FULLY PAID AND NON-ASSESSABLE COMMON SHARES OF
AMERICAN BANCORPORATION
transferable in person or by attorney, on surrender of this Certificate properly
endorsed. This Certificate and the shares represented hereby are issued and
shall be subject to all of the provisions of the Articles of incorporation, as
amended, of the Corporation (copies of which are on file with the Transfer
Agent), to all of which the holder by acceptance hereof assents. This
Certificate is not valid unless countersigned by the Transfer Agent.
WITNESS, the facsimile seal of the Corporation and the facsimile
signatures of its duly authorized officers.
DATED (date)
/s/ Jeremy C. McCamic /s/ Brent E. Richmond
CHAIRMAN & CEO SECRETARY/TREASURER
(FACSIMILE CORPORATE SEAL)
(COUNTERSIGNED BY AN AUTHORIZED OFFICER OF AMERICAN BANCSERVICES, INC.,
TRANSFER AGENT)
<PAGE>
Specimen common stock certificate
(Reverse)
AMERICAN BANCORPORATION
THE CORPORATION WILL FURNISH WITHOUT CHARGE TO EACH STOCKHOLDER WHO SO
REQUESTS THE DESIGNATIONS, PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL OR
OTHER SPECIAL RIGHTS OF EACH CLASS OF STOCK OR SERIES THEREOF OF THE
CORPORATION, AND THE QUALIFICATIONS, LIMITATIONS OR RESTRICTIONS THEREOF.
The following abbreviations, when used in the inscription on the face
of this certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN COM-as tenants in common UNIF GIFT MIN ACT --- Custodian------- TEN ENT-as
tenants in the entireties (cust) (Minor) JT TEN-as joint tenants with right of
under Uniform Gifts to Minors survivorship and not as tenants Act-------------
in common (State)
Additional abbreviations may also be used though not in the above list.
For value received -------------- hereby sell, assign and transfer unto
PLEASE INSERT SOCIAL SECURITY OR OTHER
IDENTIFYING NUMBER OF ASSIGNEE
(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS OF ASSIGNEE)
shares
of the capital stock represented by the within Certificate, and to hereby
irrevocable constitute and appoint
Attorney
to transfer the said stock on the books of the within named Corporation
will full power of substitution in the premises.
Dated
The signature(s) to this assignment must correspond with the name(s).
Notice: as written upon the fact of the certificate in every particular,
without alteration or enlargement or any change whatsoever.
The above signature(s) guaranteed by
Signature must be
guaranteed by a bank or
trust company, member of a
national or regional stock
exchange or licensed
securities dealer.
Exhibit 10.1
AMERICAN BANCORPORATION
SENIOR MANAGEMENT
INCENTIVE COMPENSATION PLAN
July 5, 1996
<PAGE>
I. INTRODUCTION
The primary purpose of the Incentive Compensation Plan for senior
management at American Bancorporation is to boost the profitability of
the holding company and each subsidiary, and reward the individuals who
are primarily responsible for increasing profitability. Therefore, the
Plan will provide for additional compensation to key employees whose
performance contributes to improved profitability. The Plan will
accomplish this by:
o Utilizing motivational rewards, in the form of cash compensation, to spur
better performance by participants;
o Focusing the attention of participants on activities which increase
overall profitability;
o Providing a means for participants to receive compensation above base
salary when performance goals are met; and
o Providing fair supplementary compensation in relation to the
participant's impact on overall objectives.
In addition to the primary goal of improving profitability, the
Incentive Plan can help accomplish other important objectives,
including:
o Improving short-term financial performance, while promoting long-term
objectives;
o Fostering teamwork and cooperation among participants; and
o Helping to retain and motivate members of the management team.
This Plan document identifies the officers who will be participants,
outlines procedures for establishing annual performance goals, and
provides a formula for determining incentive awards. In addition, this
report includes guidelines for the distribution of incentive awards to
participants, and examples to illustrate the determination of
individual awards.
II. PARTICIPANTS
Incentive Plan participants are key officers who have a significant
impact on overall performance. Initially, these officers will be:
American Bancorporation
o President
o Chief Financial Officer
1
<PAGE>
Wheeling National Bank
o President
o Chief Lending Officer
American Mortgages, Inc.
o President
Participants may be added or deleted by the Board of Directors, upon
recommendation from the Chief Executive Officer of American
Bancorporation. Termination of employment of a participant prior to
year-end for reasons such as retirement, disability or death typically
will result in the distribution of a pro-rated share of the annual
reward. However, a participant who voluntarily terminates or is
terminated prior to year-end for reasons other than those described
above will not be eligible for incentive awards.
New Plan participants appointed during the Plan year will be eligible
for incentive awards according to their pro-rated base salary income
for the period of participation. The decision to allow participation in
the Plan by new or promoted employees will be made by the Board of
Directors, upon recommendation by the Chief Executive Officer of
American Bancorporation. This recommendation will be made on a
case-by-case basis.
III. ANNUAL GOAL-SETTING
Each year, the Board of Directors and the Chief Executive Officer of
American Bancorporation will establish performance goals which will
govern the operation and distribution of the Incentive Plan. The
goal-setting process will clearly communicate to participants the
criteria for success and the methods to attain higher performance.
A. Net Income Performance Goals
Initially, the Board of Directors and the Chief Financial
Officer of American Bancorporation will establish Plan year
goals for profitability, as defined by holding company or
subsidiary net income. The net income goals will be used to
establish an award determination formula for each participant.
B. Loan Performance Goals
It may be advisable in the future to establish goals for
Lending Officer participants based on loan growth. However,
such goals, if and when they are established, would be subject
to a Minimum Loan Quality Threshold, as set by the Board and
the Chief Executive Officer of American Bancorporation.
2
<PAGE>
IV. INCENTIVE COMPENSATION CREATION
A. Performance Objectives
Prior to the beginning of the Plan year, the Board of
Directors and the Chief Executive Officer of American
Bancorporation will establish Bank performance goals according
to the process listed above. As initially established, the
performance criteria for participants shall be as follows:
American Bancorporation
o President Targeted Net Income for
American Bancorporation
o Chief Financial Officer Targeted Net Income for
American Bancorporation
Wheeling National Bank
o President Targeted Net Income for
Wheeling National Bank (70%), and
Targeted Net Income for American
Bancorporation (30%)
o Chief Lending Officer Targeted Net Income for
Wheeling National Bank
American Mortgages, Inc.
o President Targeted Net Income for American Mortgages, Inc.
The net income criterion is defined below:
Targeted Net Income (TNI) = Net income of American Bancorporation or each
subsidiary after taxes, as determined by the Board of Directors and Chief
Executive Officer of AmericanBancorporation for the Plan year.
3
<PAGE>
The current award formulas do not base any awards on loan
growth. However, it may be advisable to add loan growth as an
award component in the future for loan officer participants.
The criteria for such an award would be as follows:
Targeted Loan Growth (TLG) = Increase in the size of the loan portfolio
identified by the Board of Directors and Chief Executive Officer of
American Bancorporation as the target for the Plan year.
Minimum Loan
Quality Threshold = The minimally acceptable level of loan quality which permits
a funding of the Loan Growth Award component of the Participant's Incentive
Plan.
The targeted performance goals will be based on (1) past
performance, (2) expectations of performance for the upcoming
Plan year, and (3) results of institutions of similar size and
orientation.
Net Income Objectives
Three thresholds will be set based on the Targeted Net Income.
1. Minimum Net Income
2. Targeted Net Income
3. Maximum Net Income
For purposed of illustration, the Minimum Net Income will be
90% of Targeted Net Income and the Maximum will be 110% of
Targeted Net Income.
The performance thresholds should be high enough to be
challenging. However, to be effective, they must be
realistically attainable.
B. Incentive Award Formula
The difference between actual and targeted net income values
will determine incentive awards. If the minimum targeted
threshold for net income is reached or exceeded, awards will
be made. Incentive awards will be linked in a formula to the
participant's total base salary. Minimum and maximum awards,
as a percentage of the participant's base salary, will be as
follows:
4
<PAGE>
Minimum Maximum
Award Award
American Bancorporation
President 6% 30%
Chief Financial Officer 4% 20%
Wheeling National Bank
President 5% 25%
Chief Lending Officer 4% 20%
American Mortgages, Inc.
President 4% 20%
For example, the following formula would be used to determine
the award for the President of American Bancorporation,
assuming that actual net income performance falls between 90%
of TNI and 110% of TNI.
Award=[.24x(Actual NI - 90% of TNI) + .06] x Base Salary
------------------------
110% of TNI - 90% of TNI
If the actual net income performance falls below 90% of TNI,
there will be no incentive award. If the actual net income
performance exceeds 110% of TNI, the award will be funded at
the maximum 30% of base salary.
For the President of Wheeling National Bank, the formula would
be based upon a blend of the actual net income performance for
both Wheeling National Bank and American Bancorporation.
Similarly, for the President of American Mortgages, Inc., the
formula would be based upon a blend of the actual net income
performance for both American Mortgages, Inc. and American
Bancorporation.
5
<PAGE>
V. INCENTIVE DISTRIBUTION
A. Safeguards
No incentive awards will be paid if American Bancorporation
does not attain 90% of Targeted Net Income.
B. Payment of Awards
Incentive awards will be distributed as soon as practicable
after year-end financial statements are completed.
VI. PLAN COMMUNICATION
To insure the effectiveness of the Plan as an incentive for improved
performance, participants must fully understand its mechanics, and
receive periodic feedback on their standing relative to the Plan
targets. To accomplish this:
o The Plan's purpose, methods for determining the award pool and
process for distributing individual awards will be discussed
with participants at the inception of the Plan, and reviewed
with them any time there is a change to the Plan;
o This document will be available for review by Plan
Participants; and
o Quarterly performance results will be formally communicated on
a regular basis throughout the Plan year to everyone involved.
VII. PLAN REVIEW
The Incentive Compensation Plan represents a new method of compensating
American Bancorporation's key officers. Therefore, the implementation
and ongoing administration of the Plan are entirely under the Board's
authority, and its interpretation is subject to the Board's sole and
absolute discretion. The Plan is not to be construed as a binding
contract, and its operation is subject to the current and future
objectives of the Board of Directors of American Bancorporation. In
addition, to ensure that the Plan continues to meet its objectives, the
Board of Directors may modify it at any time.
Because the Plan is new and is complex, special review procedures are
required during the first year. Therefore, on a quarterly basis during
the first Plan year, the Board will:
o Review the performance criteria to determine whether they
represent effective performance targets; and
o Review projections of distribution percentages to ensure that
original distribution amounts, relative to performance, will
be available.
6
<PAGE>
After the completion of the first Plan year, the Board will annually
review the operation of the Plan and, as necessary, amend it to ensure
that:
o The performance criteria continue to reflect performance goals
o The incentive computation formulas remain valid;
o Appropriate individuals are included as participants;
o The Plan's operation is consistent with overall budgetary,
capital and growth considerations; and
o Participant's perceive the Plan as an equitable and fair
mechanism for the determination of incentive compensation.
7
<PAGE>
SAMPLE CALCULATIONS
A. INDIVIDUAL AWARD FOR PRESIDENT OF AMERICAN BANCORPORATION
Given:
o Net Income Thresholds:
90% of Targeted Net Income = $2,250,000
Targeted Net Income = $2,500,000
110% of Targeted Net Income = $2,750,000
o President's Base Salary = $
o Actual Net Income = $2,600,000
Award = [.24 x (Actual NI - 90% of TNI) + .06] x President's Base
----------------------
110% of TNI - 90% of TNI Salary
Award = [.24 x ($2,600,000 - $2,250,000)+ .06] x $100,000
-------------------------
$2,750,000 - $2,250,000
Award = .228 x $100,000
Award = $22,800
TOTAL AWARD FOR PRESIDENT = $22,800
B. INDIVIDUAL AWARD FOR PRESIDENT OF WHEELING NATIONAL BANK
Given:
o American Bancorporation Net Income Thresholds:
90% of Targeted Net Income = $2,250,000
Targeted Net Income = $2,500,000
110% of Targeted Net Income = $2,750,000
o Actual Net Income = $2,600,000
o Wheeling National Bank Net Income Thresholds:
90% of Targeted Net Income = $1,575,000
Targeted Net Income = $1,750,000
110% of Targeted Net Income = $1,925,000
8
<PAGE>
o Actual Net Income = $1,800,000
o President's Base Salary = $ 75,000
American Bancorporation Component of Award:
[.06 x (Actual ABNI - 90% of ABTNI) + .015] x President's Base
110% of ABTNI - 90% of ABTNI Salary
Award = [.06 x ($2,600,000 - $2,250,000) + .015] x $75,000
-------------------------
$2,750,000 - $2,250,000
Award = .057 x $75,000
Award (American Bancorporation Component) = $4,275
Wheeling National Bank Component of Award:
[.14 x (Actual WNBNI - 90% of WNBTNI) + .035] x President's Base
110% of WNBTNI - 90% of WNBTNI Salary
Award = [.14 x ($1,800,000 - $1,575,000 + .035] x $75,000
------------------------
$1,925,000 - $1,575,000
Award = .125 x $75,000
Award (Wheeling National Bank Component) = $9,375
TOTAL AWARD FOR PRESIDENT ($4,275 + $9,375) = $13,650
9
Exhibit #10.1
Agreement to Merge
between
Wheeling National Bank
and
Columbus National Bank
under the charter of
Wheeling National Bank
under the title of
Wheeling National Bank
This agreement made between Wheeling National Bank (hereinafter referred to as
"Wheeling"), a banking association organized under the laws of the United
States, being located at 135 West Main Street, St. Clairsville, county of
Belmont, in the state of Ohio, with a capital of $15,669,632, divided into
247,855 shares of common stock, each of $10.00, surplus of $10.05, and undivided
profits, including capital reserves, of $10,700,682, as of June 30, 1995 and
Columbus National Bank (hereinafter referred to as "Columbus"), a banking
association organized under the laws of the United States, being located at 850
Wheeling Avenue, Cambridge, county of Guernsey, in the state of Ohio, with a
capital of $9,661,238, divided into 40,000 shares of common stock, each of
$30.00, surplus of $78.75, and undivided profits, including capital reserves, of
$5,311,238, as of June 30, 1995, each acting pursuant to a resolution of its
board of directors, adopted by the vote of a majority of its directors, pursuant
to the authority given by and in accordance with the provisions of the Act of
November 7, 1918, as amended (12 U.S.C. 215(a)), witnessed as follows:
Section 1.
Columbus shall be merged into Wheeling under the charter of the latter.
Section 2.
The name of the receiving association (hereinafter referred to as the
"association") shall be Wheeling National Bank.
Section 3.
The business of the association shall be that of a national banking association.
This business shall be conducted by the association at its main office which
shall be located at 135 West Main Street, St. Clairsville, Ohio, and at its
legally established branches.
<PAGE>
Section 4.
The amount of capital stock of the association shall be $2,478,550, divided into
247,855 shares of common stock, each of $10.00 par value, and at the time the
merger shall become effective, the association shall have a surplus of
$6,840,400, and undivided profits, including capital reserves, which when
combined with the capital and surplus will be equal to the combined capital
structures of the merging banks as stated in the preamble of this agreement,
adjusted however, for normal earnings and expenses between June 30, 1995, and
the effective time of the merger.
Section 5.
All assets as they exist at the effective time of the merger shall pass to and
vest in the association without any conveyance or other transfer. The
association shall be responsible for all of the liabilities of every kind and
description, including liabilities arising from the operation of a trust
department, of each of the merging banks existing as of the effective time of
the merger.
Section 6.
The capital stock of both Wheeling and Columbus is 100% held by American
Bancorporation. The outstanding 40,000 shares of Columbus common stock shall be
surrendered and cancelled. The capital stock of the Association shall consist of
the presently outstanding 247,855 shares of common stock of Wheeling, each of
$10 par value and the holders of it shall retain their present rights.
Section 7.
The present board of directors of Wheeling and Columbus shall continue to serve
as the board of directors of the association until the next annual meeting or
until such time as their successors have been elected and have qualified.
Section 8.
Effective as of the time this merger shall become effective as specified in the
merger approval to be issued by the Comptroller of the Currency, the articles of
association of Wheeling National Bank shall survive the merger.
Section 9.
This agreement may be terminated by the mutual consent of the board of directors
any time preceding the closing of the merger.
Section 10.
This agreement shall be ratified and confirmed by the unanimous consent of the
board of directors of American Bancorporation, sole shareholder and holding
company of both Wheeling and Columbus, and the merger shall become effective at
the time specified in a merger approval to be issued by the Comptroller of the
Currency of the United States.
<PAGE>
WITNESS, the signatures of said merging banks this 30th day of October , 1995,
each set by its president or a vice president and attested to by its secretary ,
pursuant to a resolution of its board of directors, acting by a majority.
Attest: Wheeling National Bank
By /s/ Paul W. Donahie
President
/s/ Brenda L. Snyder
Secretary
(Seal of Bank)
Attest: Columbus National Bank
By /s/ John E. Wait
President
/s/ Tina M. Steffl
Secretary
(Seal of Bank)
STATE OF West Virginia )
)ss:
COUNTY OF Ohio )
On this 30th day of October , 1995, before me, a notary public for this state
and county, personally came Paul W. Donahie , as president, and Brenda L. Snyder
, as secretary, of Wheeling National Bank , and each in his/her capacity
acknowledged this instrument to be the act and deed of the association and the
seal affixed to it to be its seal.
WITNESS my official seal and signature this day and year.
/s/ James P. Bucon
(Seal of Notary) Notary Public, Ohio County.
My commission expires Oct. 26, 2004
<PAGE>
STATE OF Ohio )
)ss:
COUNTY OF Franklin )
On this 30th day of October , 1995, before me, a notary public for this state
and county, personally came John E. Wait , as president, and Tina M. Steffl
, as secretary, of Columbus National Bank , and each in his/her capacity
acknowledged this instrument to be the act and deed of the association and
the seal affixed to it to be its seal.
WITNESS my official seal and signature this day and year.
/s/ Mary Ann Frederick
(Seal of Notary) Notary Public,Franklin County.
My commission expires June 13, 1999
EXHIBIT #10.2
OFFICE PURCHASE AND ASSUMPTION AGREEMENT
by and between
COLUMBUS NATIONAL BANK
and
BANK ONE, STEUBENVILLE, NATIONAL ASSOCIATION
8/29/95
TABLE OF CONTENTS
1. PURCHASE AND ASSUMPTION 1
1.01 Purchase and Sale of Assets 1
1.02 Transfer of Assets 2
1.03 Acceptance and Assumption 4
1.04 Payment of Funds 7
2. CONDUCT OF THE PARTIES PRIOR TO CLOSING
2.01 Covenants of BANK ONE 11
2.02 Covenants of CNB 18
2.03 Covenants of All Parties 20
3. REPRESENTATIONS AND WARRANTIES 21
3.01 Representations and Warranties of BANK ONE 21
3.02 Representations and Warranties of CNB 28
4. ACTIONS RESPECTING EMPLOYEES AND PENSION AND
EMPLOYEE BENEFIT PLANS 30
4.01 Employment of Employees 30
4.02 Terms and Conditions of Employment 30
4.03 Compliance with Law 31
4.04 Actions to be Taken by BANK ONE 31
<PAGE>
5. CONDITIONS PRECEDENT TO CLOSING 32
5.01 Conditions to BANK ONE'S Obligations 32
5.02 Conditions to CNB's Obligations 34
5.03 Non-Satisfaction of Conditions Precedent 37
5.04 Waiver of Conditions Precedent 38
6. CLOSING 38
6.01 Closing and Closing Date 38
6.02 BANK ONE's Actions at Closing 38
6.03 CNB's Actions at the Closing 41
6.04 Methods of Payment 43
6.05 Availability of Closing Documents 44
6.06 Effectiveness of Closing 44
7. CERTAIN TRANSITIONAL MATTERS 44
7.01 Transitional Action by CNB 44
7.02 Transitional Actions by BANK ONE 44
7.03 Overdrafts and Transitional Action 54
7.04 ATMs 55
7.05 Effect of Transitional Action 56
8. GENERAL COVENANTS AND INDEMNIFICATION 56
8.01 Confidentiality Obligations of CNB 56
8.02 Confidentiality Obligations of BANK ONE 58
8.03 Indemnification by BANK ONE 59
8.04 Indemnification by CNB 61
8.05 Solicitation of Customers by
CNB Prior to Closing 61
8.06 Further Assurances 61
8.07 Operation of the Offices 62
8.08 Information After Closing 63
8.09 Survival of Covenants 63
8.10 Individual Retirement Accounts 63
9. TERMINATION 64
9.01 Termination by Mutual Agreement 64
9.02 Termination by BANK ONE 64
9.03 Termination by CNB 65
9.04 Effect of Termination 65
10. MISCELLANEOUS PROVISIONS 66
10.01 Expenses 66
10.02 Certificates 66
10.03 Termination of Representations and Warranties 66
10.04 Waivers 67
<PAGE>
10.05 Notices 68
10.06 Parties in Interest: Assignment; Amendment 69
10.07 Headings 70
10.08 Terminology 70
10.09 Flexible Structure 72
10.10 Press Releases 72
10.11 Entire Agreement 72
10.12 Governing Law 73
10.13 Counterparts 73
10.14 Tax Matters 73
OFFICE PURCHASE AND ASSUMPTION AGREEMENT
This Agreement ("Agreement"), made this 1st day of September 1995, by and
between Columbus National Bank, a national banking association with its
principal office at 1025 Main Street, Suite 800 Wheeling, West Virginia, 26003
(hereinafter called "CNB") and Bank One, Steubenville, National Association, or
its successors and assigns, a national banking association with its principal
office at 401 Market Street, Steubenville, Ohio 43952 (hereinafter called "BANK
ONE").
WHEREAS, CNB desires to purchase and assume from BANK ONE, and BANK ONE desires
to sell and assign to CNB certain assets and liabilities associated with offices
of BANK ONE in Steubenville, Ohio, as hereinafter described;
NOW, THEREFORE, in consideration of the premises hereinafter set forth and other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, CNB and BANK ONE hereby agree as follows:
1.PURCHASE AND ASSUMPTION.
1.01 Purchase and Sale of Assets. At the Closing, as defined in Section 6.01
hereof (the "Closing"), CNB shall purchase and acquire and BANK ONE shall assign
the leased real estate and other assets described in Section 1.02 hereof
(collectively, the "Assets") all of which are used in and/or relate to business
conducted by BANK ONE at its branch offices known as and located at:
(a) High Street, Flushing, Ohio 43977 (the "Flushing Office");
(b) Unit No. 490, Ohio Valley Mall Shopping Center, Richland
Township, Ohio 43950 (the "St. Clairsville Office");
pursuant to the terms and conditions set forth herein and subject to
<PAGE>
exceptions, if any, set forth herein. The foregoing offices are hereinafter
sometimes collectively referred to as the "Offices" and each, individually,
sometimes as an "Office." The transactions contemplated by this Agreement and
the purchase of assets and assumption of liabilities provided for herein is
sometimes referred to herein as the "Acquisition."
1.02 Transfer of Assets. Subject to the terms and conditions of this Agreement,
BANK ONE shall assign, transfer, convey and deliver to CNB, on and as of the
Closing on the Closing Date, as defined in Section 6.01 hereof, the Assets,
which shall include the following:
(a) Leased Real Estate. A good and valid leasehold estate in the real estate
described in attached Schedule A and created by that certain lease agreement
between BANK ONE and lessor (the "Third Party Lease") for the real estate upon
which the Flushing Office and St. Clairsville Office are situated (the "Leased
Real Estate"), which Third Party Lease is specifically identified on Schedule A
annexed hereto;
(b) Furniture and Equipment. All of BANK ONE's right, title and interest in and
to the furniture, fixtures and equipment, excluding the teller calculators,
CRTs, controller and printer and signs, printed supplies and documents bearing
the BANK ONE name and/or logo, owned by BANK ONE and located at the Offices, but
specifically including that listed on Schedule B attached hereto (the "Fixed
Assets");
(c) Safe Deposit Business. All right, title and interest of BANK ONE in and to
the safe deposit business (subject to the allocation of safe deposit rental
payments as provided in Section 1.03(c)(ii) hereof) located at the Offices as of
the close of business on the Closing Date;
(d) Cash on Hand. All cash on hand at the Offices as of the close of business on
the Closing Date including vault cash, petty cash, ATM cash, if any, and
tellers' cash;
(e) Prepaid Expenses. All prepaid expenses recorded or otherwise reflected on
the books of BANK ONE as at June 3 0, 1995, or incurred in the ordinary course
of business thereafter, as being attributable to the Offices as of the close of
business on the day immediately preceding the Closing Date, but only to the
extent attributable to the Assets sold, assigned or transferred to CNB by BANK
ONE pursuant to this Agreement and only to the extent arising by reason of CNB's
use or ownership of such Assets after the close of business on the Closing Date.
Any and all prepaid expenses incurred by BANK ONE with respect to the Offices
subsequent to June 30, 1995, shall be subject to the prior written consent of
CNB;
<PAGE>
(f) Office Loans. All right, title and interest in and to all those loans which,
as of the close of business on the Closing Date, are (i) secured, in whole or in
part, by Deposit Accounts (as hereinafter defined) attributable to an Office and
being assumed by CNB pursuant to this Agreement (the "Deposit Account Loans") or
(ii) automatically created as the result of an overdraft of a Deposit Account
pursuant to a pre-approved overdraft protection program offered by BANK ONE (the
"Overdraft Loans"). The Deposit Account Loans and Overdraft Loans are
hereinafter referred to collectively as the "Office Loans." BANK ONE shall not
make any material change to its customary policies for making Office Loans at
the Offices or extend Office Loans which are materially different than loans
offered by BANK ONE's other offices in Steubenville, Ohio. The transfer of the
Office Loans will be made without any reserve for loan losses;
(g) Records of the Offices. All original records and documents related to
the Assets transferred or liabilities assumed by CNB including, but not
limited to the deposit accounts; and
(h) Contracts or Agreements. All of BANK ONE's right, title and interest in and
to the maintenance and service agreements related to the Offices, as listed on
Schedule C annexed hereto and made a part hereof (the "Assumed Contracts"),
provided the same are assignable.
1.03 Acceptance and Assumption. Subject to the terms and conditions of this
Agreement, on and as of the Closing on the Closing Date, CNB shall:
(a) Assets. Receive and accept all of the Assets assigned, transferred, conveyed
and delivered to CNB by BANK ONE pursuant to this Agreement, including those
identified in Section 1.02 above.
(b) Deposit Liabilities. Assume and thereafter discharge, pay in full and
perform all of BANK ONE's obligations and duties relating to the "Deposit
Liabilities" (as hereinafter defined). The term "Deposit Liabilities" is defined
herein as all of BANK ONE's obligations, duties and liabilities of every type
and character relating to all deposit accounts, other than (i) KEOGH accounts
and (ii) deposit accounts securing any loan of BANK ONE which is not an Office
Loan, for which CNB assumes no liability, which, as reflected on the books of
BANK ONE as of the close of business on the Closing Date, are attributable to
the Offices. The deposit accounts referred to in the immediately preceding
sentence (hereinafter the "Deposit Accounts") include, without limitation,
passbook accounts, checking, Money Market and NOW accounts, Individual
Retirement Accounts for which BANK ONE has not received, on or before the
Closing Date, the written advice from the account holder of such account
holder's objection to or failure to accept CNB as successor custodian ("IRA's")
and certificates of deposit. The "obligations, duties and
<PAGE>
liabilities" referred to in the immediately preceding sentence include, without
limitation, the obligation to pay and otherwise process all Deposit Accounts in
accordance with applicable law and their respective contractual terms and the
duty to supply all applicable reporting forms for post-closing periods
including, without limitation, Form 1099's, relating to the Deposit Accounts.
With regard to each IRA included within the Deposit Accounts, CNB shall also
assume the plan pertaining thereto and the trustee or custodial arrangement in
connection therewith.
(c) Liabilities Under Leases/Safe Deposit Business. Assume and thereafter fully
and timely perform and discharge, in accordance with their respective terms, all
of the liabilities and obligations of BANK ONE arising after the Closing Date
with respect to:
(i) all leases listed on Schedule D to this Agreement (including safe
deposit leases if any) and sold, assigned or transferred to CNB by BANK
ONE pursuant to this Agreement;
(ii) the safe deposit business of the Offices including, but not
limited to, the maintenance of all necessary facilities for the use of
safe deposit boxes by the renters thereof during the periods for which
such persons have paid rent therefor in advance to BANK ONE, subject to
the agreed allocation of such rents, which allocation shall be
satisfied in full by BANK ONE paying to CNB, in the manner specified in
Section 6.04 hereof, the amount of rental payment received by BANK ONE
for each such safe deposit box attributable to and prorated to reflect
the period from and after the Closing Date, subject to the provisions
of the applicable leases or other agreements relating to such boxes;
and
(iii) all safekeeping items and agreements listed on Schedule D to this
Agreement and delivered to CNB by BANK ONE pursuant to this Agreement,
including, but not limited to, all applicable safekeeping agreements,
memoranda, or receipts so delivered to CNB by BANK ONE hereunder.
(d) Other Liabilities. Fully and timely perform and discharge, as the same may
be or become due, the Assumed Contracts, the Third Party Lease for the Leased
Real Estate and all additional liabilities, obligations and deferred expenses of
BANK ONE as of the date of this Agreement, which are (i) reflected on the books
of BANK ONE as being attributable to an Office as of the close of business on
the Closing Date, and (ii) disclosed, by description and an estimate of the
amount, to CNB in writing prior to the date of this Agreement), but only to the
extent attributable to the Assets sold, assigned or transferred to CNB by BANK
ONE pursuant to this Agreement and only to the extent arising by reason of CNB's
use or ownership of such Assets after the
<PAGE>
close of business on the Closing Date. No additional liabilities and obligations
of BANK ONE incurred subsequent to the date of this Agreement shall be assumed
by CNB unless the prior written consent of CNB has been obtained prior to the
incursion of the liability or obligation by BANK ONE.
(e) Other Obligations. Fully and timely perform its obligations relative to
employees of the Offices, if any, as set forth hereinafter.
1.04 Payment of Funds. Subject to the terms and conditions hereof, at the
Closing: (a) Consideration. In consideration of CNB's assumption of the Deposit
Liabilities and its other agreements herein, BANK ONE shall make available and
transfer to CNB, in the manner specified in Section 6.04 hereof, funds equal to
the aggregate balance of all Deposit Accounts (including interest posted or
accrued to such accounts as of the close of business on the day immediately
preceding the Closing Date) plus the deferred expenses identified in Section
1.03(d) hereof prorated as of the close of business on the day preceding the
Closing Date less an amount equal to the sum of:
(i) the amount of cash on hand at the Offices transferred to CNB as of
the close of business on the Closing Date; and
(ii) the sum of $174,524 representing the leasehold improvements made
to the Leased Real Estate, which sum is attributable to said properties
as follows:
Flushing Office $30,211
St. Clairsville Office $144,313
(iii) the sum of $14,700 representing the purchase price (and the
present book value) of the furniture, fixtures and equipment being
transferred to CNB on the Closing Date; and
(iv) five percent (5%) of the aggregate "Core Deposits" (as hereinafter
defined) of the Flushing Office, plus three percent (3%) of the
aggregate Core Deposits of the St. Clairsville Office, as of the close
of business on the Closing Date. The term "Core Deposits" shall mean
the aggregate balance of all Deposit Liabilities of the Offices (which
aggregate balance shall include interest posted to such accounts as of
the close of business on the Closing Date but shall exclude interest
accrued but not posted to such accounts as of such dates) other than
those represented by "Jumbo Certificates of Deposit" (as hereinafter
defined) or constituting "Public Deposits"(as defined in ss.135.01(1)
Ohio
<PAGE>
Revised Code). The term "Jumbo Certificates of Deposit" shall mean a
Deposit Account represented by a certificate of deposit of $100,000 or
more. The amount calculated as the product of either 5% or 3%, as
applicable, times the Core Deposits of the respective Offices as of the
close of business on the Closing Date is hereinafter called the
"Acquisition Consideration;" and
(v) the amount of prepaid expenses described in Section 1.02(f) of this
Agreement, prorated as of the close of business on the day immediately
preceding the Closing Date; and
(vi) the book value of the Office Loans together with accrued and
unpaid interest thereon computed as of the close of business on the
Closing Date.
In the event that the sum of items (i) through (vi) above should be in
excess of the aggregate amount to be transferred by BANK ONE pursuant
to the first paragraph of this Section 1.04(a), the full amount of such
excess shall constitute an amount due from CNB to BANK ONE, and shall
be paid to BANK ONE at the Closing in the manner specified in Section
6.04 hereof. The parties shall execute a Preliminary Settlement
Statement at the Closing and Final Settlement Statement post-closing,
in substantially the same forms as the forms attached as Schedules Q
and R, respectively.
(b) Reimbursement and Proration of Certain Expenses. All other expenses (i) due
and payable at times after the Closing Date for periods prior to the close of
business on the Closing Date or (ii) paid prior to the close of business on the
Closing Date for periods following the Closing Date, including the prepaid
expenses described in Section 1.02(f) hereof and deferred expenses described in
Section 1.03(d) hereof, including without limitation, real estate taxes and
assessments which are a lien but not yet due and payable, utility payments,
payments due on leases assigned, payments due on assigned service and
maintenance contracts and similar expenses relating to the Offices shall be
prorated between BANK ONE and CNB as of the close of business on the day
immediately preceding the Closing Date, provided, however, that all real estate
taxes and assessments, if any, and to the extent payable by Seller and/or Buyer,
shall be prorated at the Closing on the basis of the most recently certified
real estate taxes and assessments, and all utility payments and lease payments
shall be prorated on the basis of the best information available at Closing.
With respect to premiums paid to the FDIC deposit insurance for the Deposit
Liabilities it shall be assumed that all the Deposit Liabilities are insured
under the Bank Insurance Fund; the proration of FDIC insurance
<PAGE>
premiums will be based on the amount of the Deposit Liabilities as of the close
of business on the Closing Date and the number of days during any period for
which BANK ONE has prepaid premiums to the FDIC but during which CNB has held or
will hold the Deposit Liabilities. For prorations, if any, which cannot be
reasonably calculated as of the Closing, a post-closing adjustment shall be made
in the manner specified in Section 6.04 hereof
(c) Expenses Relating to Real Property. The costs, fees and expenses of all
title commitments, title guaranties and title examinations relating to the
procurement of the Title Commitments related to the Leased Real Estate referred
to in Sections 2.01(c) and 5.02(g) herein, shall be allocated to, and shall be
borne, solely and exclusively by CNB. The costs, fees and expenses relating to
the premiums for all title insurance policies (net of the costs of all title
commitments, guaranties and examinations), and other similar costs, fees and
expenses, if any, relating to the sale and transfer of the interest in the
Leased Real Estate, shall be allocated to, and shall be borne, solely and
exclusively, by CNB.
CONDUCT OF THE PARTIES PRIOR TO CLOSING.
2.01 Covenants of BANK ONE. BANK ONE hereby covenants to CNB that, from the date
hereof until the Closing, it will do or cause the following to occur:
(a) Operation of the Offices. BANK ONE shall continue to operate the Offices in
a manner equivalent to that manner and system of operation employed immediately
prior to the date of this Agreement; provided, however, that it is contemplated
by the parties that, prior to Closing, BANK ONE will be terminating certain
programs which are currently in effect which allow depositors to access Deposit
Accounts through electronic means and, provided further, that BANK ONE
contemplates that the name of the Offices may be changed to BANK ONE,
WHEELING-STEUBENVILLE, N.A., as a result of a proposed consolidation and
corporate combination of BANK ONE, WHEELING, N.A., BANK ONE, NEW MARTINSVILLE,
N.A. and BANK ONE, STEUBENVILLE, N.A. (the "Intra-Corporate Consolidation"),
which such event may occur prior to the Closing Date hereof BANK ONE will use
its best efforts to ensure that no harm or damage to the reputation of the
Offices or material reduction in the existing deposit liabilities of the Offices
occurs.
Notwithstanding the foregoing and except as may be required to obtain the
required authorizations referred to in Section 2.03 of this Agreement, between
the date of this Agreement and the Closing Date, and except as may be otherwise
required by a regulatory authority or to effectuate the Intra-Corporate
Consolidation, BANK ONE shall not without the prior consent of CNB, which
<PAGE>
consent shall not be unreasonably withheld:
(i) cause any Office to engage or participate in any material
transaction or incur or sustain any obligation which, in the aggregate,
is material to its business, condition or operations except in the
ordinary course of business;
(ii) cause any Office to transfer to BANK ONEs other operations any
material amount of Assets, except for (a) supplies, if any, which have
unique function in BANK ONE's business and ordinarily would not be
useful to CNB, (b) cash and other normal intrabank transfers which may
be transferred in the ordinary course of business in accordance with
normal banking practices and (c) signs, or those parts thereof, bearing
the BANK ONE name and/or logo.
(iii) cause the Offices to transfer to BANK ONE's other operations any
deposits other than deposits securing loans made by BANK ONE which are
not Office Loans, except in the ordinary course of business at the
unsolicited request of depositors or cause any of BANK ONE's other
operations to transfer to the Offices any deposits, except in the
ordinary course of business at the unsolicited request of depositors;
provided, however, that BANK ONE shall be permitted to make such
transfers of any deposits to or from the Offices provided that neither
(A) the net amount of transfers to the Offices minus the amount of
transfers from the Offices nor (B) the net amount of transfers from the
Offices minus transfers to the Offices exceeds $100,000;
(iv) invest in any Fixed Assets on behalf of any Office, except for
commitments made on or before the date of this Agreement which are
disclosed to CNB on Schedule B of this Agreement and for replacements
of furniture, furnishings and equipment and normal maintenance and
refurbishing purchased or made in the ordinary course of Office
business;
(v) enter into or amend any continuing contract (other than Deposit
Liabilities and Office Loans) relating to the Offices, which cannot be
terminated without cause and without payment of any amounts as a
penalty, bonus, premium or other compensation for termination, or which
is not made in the ordinary course of Office business;
(vi) undertake any actions which are inconsistent with a program to use
all reasonable efforts to maintain good relations with customers and
with employees employed at the Offices, unless such actions are
required or permitted by this Agreement;
<PAGE>
(vii) hire (other than to replace a departing employee and/or to bring
the number of employees at the Offices to normal staffing levels),
transfer, reassign or terminate any employee of the Offices, increase
the compensation of any employee of the Offices, or promote any of the
employees except pursuant to and consistent with customary BANK ONE
procedures and policies; or
(viii) make any material change to its customary policies for setting
rates on deposits offered at the Offices.
(b)Information Concerning the Offices. Upon reasonable notice, BANK ONE shall
permit officers and authorized representatives of CNB access to inspect the
Offices during normal business hours or at such other time mutually agreed upon
by both parties and permit CNB to make or cause to be made such reasonable
investigation of information and materials relating to the financial condition
of the Offices, including general and subsidiary ledgers, deposit records, audit
reports and any other information concerning the business, property, personnel
and legal questions concerning the Offices (and related to the physical
condition of the Offices), as CNB reasonably deems necessary or advisable;
provided, however, that such access and investigation shall be reasonably
related to the transactions contemplated hereby and shall not interfere
unnecessarily with the normal operations of the Offices or BANK ONE; and
provided, further, that nothing in this Section 2.0 1 (b) shall be deemed to
require BANK ONE to breach any obligation of confidentiality or to reveal an
proprietary information, trade secrets, marketing, strategic plans or
information not related to the transaction contemplated by this Agreement. The
information and materials related to the financial condition of the Offices
which will be made available to CNB from BANK ONE pursuant to this subsection
will be accurate in all material respects and will accurately and completely
reflect the Deposit Liabilities attributable to the Offices as of the date the
information is provided.
(c) Title Commitments for Real Estate. CNB, may at its election and expense, no
later than thirty (30) days after the date of this Agreement, obtain a
commitment or commitments (the "Title Commitments") having an effective date as
near as feasible to the date of delivery of such Title Commitments from a title
insurance company authorized to do business in Ohio designated by CNB and
reasonably satisfactory to BANK ONE, to issue to CNB as soon as practicable
after the Closing Date, as applicable, an American Land Title Association (ALTA)
leasehold title insurance (1975 Form) policies having an effective date as of
the Closing Date in an amount satisfactory to CNB (but not in excess of the
amount of the leasehold interest to be transferred to CNB pursuant to the Third
Party Lease) covering the Leased Real Estate, subject to the exceptions
specified in the Title Commitments. Such commitments shall show title vested in
BANK ONE. If title to all or part of
<PAGE>
the Leased Real Estate is unmarketable or is subject to any defect, lien,
encumbrance, easement, condition, restriction or encroachment other than the
Permitted Exceptions as defined in Section 10.08(c) herein, then CNB shall
provide written notice thereof to BANK ONE. BANK ONE shall have thirty days
after written notice thereof from CNB, to elect to remedy or remove any such
defect, lien, encumbrance, easement, condition, restriction or encroachment but,
if BANK ONE does not, CNB may elect to attempt to cure or remove such defect or
encumbrance or other matter, for a period of thirty days thereafter. BANK ONE
also shall execute and deliver to CNB at the time of Closing such affidavits and
other instruments, if any, as the title insurance issuing the Title Commitments
may require to delete the standard exceptions appearing as Schedule B items in a
standard ALTA leasehold title insurance policy, other than those which may only
be deleted by a survey. CNB shall have the right to obtain at its sole cost and
expense duly certified surveys, and BANK ONE hereby grants to CNB and its
surveyors, agents and contractors right of access to the Leased Real Estate,
with the prior consent of the landlord obtained by CNB, for the purpose of
performing the surveys.
(d) Required Authorizations. BANK ONE shall obtain and procure all necessary
corporate approvals and authorizations, if any, required on its part to enable
it to fully perform all obligations imposed on it hereunder which must be
performed by it at or prior to the Closing.
(e) Creation of Liens and Encumbrances. With respect to the Leased Real Estate,
BANK ONE shall not create or allow any liens, imperfections in title, charges,
easements, restrictions or encumbrances other than the Permitted Exceptions.
(f) Condemnation. If prior to Closing all or any portion of the Leased Real
Estate is taken or is made subject to eminent domain or other governmental
acquisition proceedings, then BANK ONE shall promptly notify CNB thereof, and
CNB may either complete the Closing and receive the proceeds paid or payable on
account of such acquisition proceedings, or terminate this Agreement. If CNB
terminates this Agreement, both parties shall thereupon be relieved from all
further obligations hereunder.
(g) Insurance Proceeds, Casualty and Condemnation Payments. BANK ONE shall
maintain adequate insurance on all the Assets consisting of Leased Real Estate
and Fixed Assets through the Closing Date. In the event of any damage,
destruction or condemnation affecting such Assets between the date hereof and
the time of the Closing, BANK ONE shall deliver to CNB any insurance proceeds
and other payments, to the extent of the applicable amount set forth in Section
1.04(a)(ii) or (iii) hereof with respect to the replacement cost with respect to
the Fixed Assets, as the case may be, received (or with respect to insurance
proceeds, which would be received assuming BANK ONE's insurance
<PAGE>
policy had no deductible) by BANK ONE as a result thereof unless, in the case of
damage or destruction, BANK ONE has repaired or replaced the damaged or
destroyed property.
(h) IRA Accounts. Not later than thirty days prior to the expected Closing Date,
BANK ONE shall, at BANK ONE's expense, mail notice of BANK ONE's resignation as
Custodian and the appointment of CNB as the Successor Custodian, effective upon
Closing, of each Individual Retirement Account maintained at the Offices. The
notice shall include such other information that is mutually agreed upon by BANK
ONE and CNB.
(i) Assignment of the Lease. BANK ONE shall use its reasonable good
faith efforts to obtain any written consent of the landlord as shall be
necessary for the effective assignment of the Third Party Lease as of
the Closing Date. The assignment of the Third Party Lease shall be
substantially the form of Schedule E attached hereto and incorporated
herein. CNB acknowledges that the Third Party Lease for the St.
Clairsville Office is currently a month-to- month Lease and may not be
assignable, and therefore, CNB acknowledges that it may be required to
negotiate directly with the Landlord of said Third Party Lease for any
future leasehold rights to the St. Clairsville Office if said Third
Party Lease is not extended by BANK ONE prior to the Closing Date.
2.02 Covenants of CNB. CNB hereby covenants to BANK ONE that, from the date
hereof until the Closing, it will do or cause the following to occur:
(a) Regulatory Applications. CNB shall prepare and submit for filing, at no
expense to BANK ONE, any and all applications, filings, and registrations with,
and notifications to, all federal and state authorities required on the part of
CNB or any shareholder or affiliate of CNB for the Acquisition to be consummated
at the Closing as contemplated in Section 6.01 herein and for CNB to operate the
Offices following the Closing. CNB shall provide BANK ONE with a draft copy of
each application for BANK ONE's approval prior to filing, which approval by BANK
ONE will not be unreasonably withheld or delayed. Such applications will be
submitted to BANK ONE in draft form within thirty (30) days from the date of
this Agreement and filed by CNB without delay following BANK ONE's approval of
such applications; provided, however, that in no event will such applications be
filed later than sixty (60) days from the date of this Agreement. Thereafter,
CNB shall pursue all such applications, filings, registrations, and
notifications diligently and in good faith, and shall file such supplements,
amendments, and additional information in connection therewith as may be
reasonably necessary for the Acquisition to be consummated at such Closing and
for CNB to operate the Offices following the Closing. CNB shall deliver to BANK
ONE evidence of the filing of each and all of such
<PAGE>
applications, filings, registrations and notifications (except for any
confidential portions thereof, and any supplement, amendment or item of
additional information in connection therewith (except for any confidential
portions thereof). CNB shall also deliver to BANK ONE a copy of each material
notice, order, opinion and other item of correspondence received by CNB from
such federal and state authorities (except for any confidential portions
thereof) and shall advise BANK ONE, at BANK ONE's request, of developments and
progress with respect to such matters.
(b) Required Authorizations. CNB shall obtain and procure all necessary
corporate approvals and authorizations, if any, required on its part to enable
it to fully perform all obligations imposed on it hereunder which must be
performed by it at or prior to the Closing.
(c) Satisfaction of Conditions. CNB shall not voluntarily undertake any course
of action inconsistent with the satisfaction of the requirements or the
conditions applicable to it, or its agreements, undertakings, obligations, or
covenants set forth in this Agreement, and it shall promptly do all such
reasonable acts and take all such reasonable measures as may be appropriate to
enable it to perform as early as possible the agreements, undertakings,
obligations, and covenants herein provided to be performed by it, and to enable
the conditions precedent to BANK ONE's obligations to consummate the Closing of
the Acquisition to be fully satisfied. Additionally, CNB shall not knowingly,
directly or through any existing or future subsidiary or affiliate, take any
action that would be in conflict with, or result in the denial, delay,
termination, or withdrawal of, any of the regulatory approvals referred to in
this Agreement.
(d) Cooperation Regarding Leased Real Estate. CNB shall, at BANK ONE's request
in connection with BANK ONE's obtaining the consents specified in Section 2.01
(I), advise, in writing, the lessor of Leased Real Estate, of CNB's intent to
assume and comply with the terms of the Third Party Lease (as to matters arising
from and after the Closing Date) for the Offices.
2.03 Covenants of All Parties. BANK ONE hereby covenants to CNB, and CNB hereby
covenants to BANK ONE that, from the date hereof until the Closing, such party
shall cooperate fully with the other party in attempting to obtain all consents,
approvals, permits, or authorizations which are required to be obtained pursuant
to any federal or state law, or any federal or state regulation thereunder, for
or in connection with the transactions described and contemplated in this
Agreement.
3. REPRESENTATIONS AND WARRANTIES.
3.01 Representations and Warranties of BANK ONE. BANK ONE represents and
<PAGE>
warrants to CNB to the best of its knowledge, as follows:
(a) Good Standing and Power of BANK ONE. BANK ONE is a national banking
association duly organized, validly existing, and in good standing under the
laws of the United States with corporate power to own its properties and to
carry on its business as presently conducted. BANK ONE is an insured bank as
defined in the Federal Deposit Insurance Act and applicable regulations
thereunder.
(b) Authorization of Agreement. The execution and delivery of this Agreement,
and the transactions contemplated hereby, have been duly authorized by all
necessary corporate action on the part of BANK ONE, and this Agreement is a
valid and binding obligation of BANK ONE.
(c) Effective Agreement. Subject to the receipt of any and all necessary
regulatory approvals and required consents, the execution, delivery, and
performance of this Agreement by BANK ONE and the consummation of the
transactions contemplated hereby, will not conflict with, result in the breach
of, constitute a violation or default, result in the acceleration of payment or
other obligations, or create a lien, charge or encumbrance, under any of the
provisions of Articles of Association or By-Laws of BANK ONE, under any
judgment, decree or order, under any law, rule, or regulation of any government
or agency thereof, or under any material contract, material agreement or
material instrument to which BANK ONE is subject, where such conflict, breach,
violation, default, acceleration or lien would have a material adverse effect on
the Assets or BANK ONE's ability to perform its obligations hereunder.
(d) Title to Real Estate And Other Assets. Except for the Leased Real Estate,
BANK ONE is the sole owner of each of the Assets free and clear of any mortgage,
lien, encumbrance or restrictions of any kind or nature. BANK ONE has valid
leasehold title to the Leased Real Estate pursuant to the Third Party Lease and
has the use of the Real Estate pursuant to the Third Party Lease, a binding
lease agreement which will be assigned to CNB by delivery of an assignment
conveying such leasehold interest to CNB at the Closing for the Flushing Office
and, to the extent possible, for the St. Clairsville Office.
(e) Zoning Variations. As of the date of this Agreement, BANK ONE has neither
received written notice of nor has it any notice of any contemplation to provide
BANK ONE with any written notice from any governmental authority of any
uncorrected violations of zoning and/or building codes relating to the Leased
Real Estate. The Leased Real Estate is zoned to permit CNB to use said
properties as offices of a financial institution.
(f) IRA Account Documentation. The form of Individual Retirement
<PAGE>
Custodial Account Agreement for individual retirement accounts, and the related
Amended and Restated Individual Retirement Account Disclosure Statement annexed
hereto as Schedule G, constitute the form of the document establishing the
trustee or custodial arrangement in connection with all IRAs's maintained
at the Office.
(g) Condemnation Proceedings. BANK ONE has received no written notice of any
pending or threatened, nor is it aware of any contemplated, condemnation
proceeding affecting or relating to the Offices.
(h) No Broker. No broker or finder or other party or agent performing similar
functions, has been retained by BANK ONE or is entitled to be paid based upon
any agreements, arrangements, or understandings made by BANK ONE in connection
with the transactions contemplated hereby, and no brokerage fee or other
commission has been agreed to be paid by BANK ONE on account of the transactions
contemplated hereby.
(i) Taxes. All federal, state and local payroll, withholding, property, sales,
use and transfer taxes, if any, which are due and payable by BANK ONE relating
to the Offices prior to the date of Closing shall be paid in full as of the
Closing Date or BANK ONE shall have made appropriate provision for such payment
in accordance with ordinary business practices. Any claims for refunds of taxes
which have been paid by BANK ONE shall remain the property of BANK ONE.
(j) Operations Lawful. The conduct of banking business at the Offices is in
compliance in all material respects with all federal, state, county and
municipal laws, ordinances and regulations applicable to conduct of such
business.
(k) Third-Party Claims. There are no actions, suits or proceedings, pending or,
to the best of BANK ONE's knowledge, threatened against or affecting BANK ONE
which could have a material adverse effect on the aggregate value of the banking
business and Assets of the Offices.
(l) Insurance. BANK ONE maintains such insurance on the Offices and the Fixed
Assets to be purchased by or assigned to CNB as may be required or as is
customary in the business of banking.
(m) Labor Relations. No employee located at any of the Offices is represented,
for purposes of collective bargaining, by a labor organization of any type. BANK
ONE is unaware of any efforts during the past three years to unionize or
organize any employees at any Office, and no material claim related to employees
at the Offices under the Fair Labor Standards Act, National Labor Relations Act,
Civil Rights of 1964, Walsh-Healy Act, Davis
<PAGE>
Bacon Act, -Civil Rights of Act of 1866, Age Discrimination in Employment Act,
Equal Pay Act of 1963, Executive Order No. 11246, Federal Unemployment Tax Act,
Vietnam Era Veterans Readjustment Act, Occupational Safety and Health Act,
Americans with Disabilities Act or any state or local employment related law,
order, ordinance or regulation, no unfair labor practice, discrimination or
wage-and-hour claim is pending or, to the best of BANK ONE's knowledge,
threatened against or with respect to BANK ONE.
(n) Governmental Notices. BANK ONE has not received notice from any federal or
state governmental agency indicating that it would oppose or not grant or issue
its consent or approval, if required, with respect to the transactions
contemplated by this Agreement.
(o) Environmental. To the actual knowledge of the executive officers of BANK
ONE, there are no actions, proceedings or investigations pending before any
environmental regulatory body, federal or state court with respect to or
threatened against or affecting BANK ONE in respect of any Office under the
Comprehensive Environmental Response, Compensation and Liability Act of 1980, as
amended ("CERCLA"), or under the any federal, state, local or municipal
environmental statute, ordinance or regulation in respect thereof and in
connection with any release of any toxic or "hazardous substance," pollutant or
contaminant into the "environment," nor, to the best knowledge of the executive
officers of BANK ONE, is there any reasonable basis for the institution of any
such actions or proceedings or investigations which is probable of assertion,
nor are there any such actions or proceedings or investigations in which BANK
ONE is a plaintiff or complainant. To the actual knowledge of the executive
officers of BANK ONE, BANK ONE is not responsible in any material respect under
any applicable environmental law for any release by BANK ONE or for any release
by an other "Person" at or in the vicinity of any Office of a hazardous or toxic
substance, contaminant or pollutant caused by the spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping
or disposing of hazardous wastes or other chemical substances, pollutants or
contaminants into the environment, nor is BANK ONE responsible for any material
costs (as a result of the acts or omissions of BANK ONE, or, to the actual
knowledge of the executive officers of BANK ONE, as a result of the acts or
omissions of any other "person") of any remedial action including, without
limitation, costs arising out of security fencing, alternative water supplies,
temporary evacuation and housing and other emergency assistance undertaken by
any environmental regulatory body having jurisdiction over BANK ONE to prevent
or minimize any actual or threatened release by BANK ONE on premises any
hazardous wastes or other chemical substances, pollutants and contaminants into
the environment which would endanger the public health or the environment. All
terms contained in quotation marks in this paragraph and the paragraph
immediately following shall have the meaning ascribed to such terms as defined
in all federal,
<PAGE>
state and local statutes, regulations or ordinances.
Except as previously disclosed to CNB in writing, to the actual knowledge of the
executive officers of BANK ONE, each Office is, in all material respects, in
compliance with all applicable Federal, state, local or municipal statutes,
ordinances, laws and regulations and all orders, rulings or other decisions of
any court, administrative agency or other governmental authority relating to the
protection of the environment.
For purposes of this section, the term "executive officer" shall refer to all
executive officers of BANK ONE as defined in 12 CFR ss.215.2 as of the date
of this Agreement.
(p) Access to Real Estate. No fact or condition exists which would result in the
termination or impairment of access to the Leased Real Estate from adjoining
public or private streets or ways or which could result in discontinuation of
necessary sewer, water, electric, gas, telephone, or other utilities or
services. All sewage, sanitation, plumbing, refuse disposal, and similar
facilities servicing the Leased Real Estate are in full compliance with
applicable governmental regulations.
(q) Mechanic's Liens. BANK ONE has paid or will pay in full all bills and
invoices for labor and material of any kind arising from the ownership,
operation, management, repair, maintenance, or leasing of the Leased Real
Estate, and no actual or potential mechanic's lien or other claims are
outstanding or available to any party in connection with the ownership,
operation, management, repair, maintenance, or leasing said properties.
(r) Deposit. Attached as Schedule H hereto is a true and accurate schedule of
all Deposit Accounts (including individual retirement accounts) domiciled at the
Offices, prepared as of a date within thirty (30) days prior to the date of this
Agreement, listing by Office and by category the amount of all deposits and the
interest rates and maturity dates associated with such deposits, and indicating
the deposits that constitute Core Deposits.
(s) Office Loans. Attached hereto as Schedule I is a true and accurate schedule
of all Office Loans, including accrued and unpaid interest thereon, computed as
of a date within thirty (30) days prior to the date of this Agreement,
excluding, however, such Office Loans which are more than 30 days past due for
payment.
(t) Personal Property. Schedule B is a true and accurate schedule of
Fixed Assets owned by BANK ONE at any of the Offices, which Schedule specifies
<PAGE>
the original cost and net book value of each such item, as shown on the
financial records of BANK ONE, computed as of the month-end immediately prior to
the date of execution of this Agreement and describing any security interest
therein or lien thereon.
(u) Assumed Contracts and Third Party Lease. Schedule C is a true and accurate
schedule of all Assumed Contracts related to the Offices. Each Assumed Contract
is valid and subsisting in full force and effect.
(v) FIRPTA. BANK ONE is not a "foreign person" within the meaning of the
Internal Revenue Code ss. 1445.
3.02 Representations and Warranties of CNB. CNB represents and warrants to BANK
ONE, to the best of its knowledge, as follows:
(a) Good Standing, and Power of CNB. CNB is a national banking association duly
organized, validly existing, and in good standing under the laws of the United
States with corporate power to own its properties and to carry on its business
as presently conducted. CNB is an insured bank, as defined in the Federal
Deposit Insurance Act and applicable regulations thereunder.
(b) Authorization of Agreement. The execution and delivery of this Agreement,
and the transactions contemplated hereby, have been duly authorized by all
necessary corporate action on the part of CNB, and this Agreement is a valid and
binding obligation of CNB.
(c) Effective Agreement. Subject to the receipt of any and all necessary
regulatory approvals, the execution, delivery, and performance of this
Agreement by CNB, and the consummation of the transactions contemplated
hereby, will not conflict with, result in the breach of, constitute a violation
or default, result in the acceleration of payment or other obligations, or
create a lien, charge or encumbrance, under any of the provisions of the
Articles of Association or By-Laws of CNB, under any judgment, decree or order,
under any law, rule or regulation of any government or agency thereof, or under
any material agreement, material contract or material instrument to which CNB is
subject, where such conflict, breach, violation, default, acceleration or lien
would have a material adverse effect on CNB's ability to perform its obligations
hereunder.
(d) No Broker. No broker or finder, or other party or agent performing similar
functions, has been retained by CNB or is entitled to be paid based upon any
agreements, arrangements, or understandings made by CNB in connection with the
transactions contemplated hereby, and no brokerage fee or other
<PAGE>
commission has been agreed to be paid by CNB on account of the transactions
contemplated hereby.
4. ACTIONS RESPECTING EMPLOYEES AND PENSION AND EMPLOYEE BENEFIT PLANS.
4.01 Employment of Employees
(a) CNB shall extend offers of employment, as of the Closing Date to all
employees of the Offices.
(b) Not later than thirty (30) days following the date of this Agreement, CNB
shall advise BANK ONE, in writing, of the names of all of the employees of the
Offices, who thereafter accept such offer of employment with CNB (the
"Transferred Employees"). Following the expiration of said 30 days, BANK ONE
shall be permitted to offer other employment opportunities to any employees of
the Offices who are not Transferred Employees, but this provision shall not be
construed to obligate BANK ONE to make any such offers.
4.02 Terms and Conditions of Employment. Except as otherwise provided explicitly
in this Agreement, the terms of employment for each Transferred Employee shall
be determined solely by CNB's policies, procedures, and programs; provided,
however, that for purposes of CNB's various employee benefit plans at and
following the Closing Date, (i) time of service with BANK ONE will be credited
to Transferred Employees for purposes of determining and calculating their
eligibility for and vesting with respect to such plans and (ii) all pre-existing
conditions of Transferred Employees will be waived by CNB with respect to all
CNB's plans.
4.03 Compliance with Law. BANK ONE agrees that it shall comply with any
applicable requirements, if any, for the Worker Adjustment and Retraining
Notification Act in connection with the transaction contemplated by this
Agreement.
4.04 Actions to be Taken by BANK ONE. BANK ONE covenants to CNB that it will do
or cause the following to occur:
(a) Solicitation of Transferred Employees. Except with the written consent of
CNB, for six months following the Closing Date, BANK ONE will not solicit
Transferred Employees as prospective officers or employees of BANK ONE.
(b) Employee Benefit Programs. BANK ONE's obligations to employees of the
Offices, including Transfer-red Employees, will be as set forth in established
<PAGE>
policies of BANC ONE CORPORATION and/or BANK ONE and BANK ONE shall continue its
employee benefit programs in full force and effect as benefit programs for
Transferred Employees through the Closing Date. After the Closing, BANK ONE
shall retain the responsibility and liability for the funding and payment of all
claims incurred under such employee benefit programs through the Closing Date.
CNB shall have no obligation or liability to compensate Transferred Employees
for benefits of any kind earned, accrued, promised and/or provided to
Transferred Employees as employees of BANK ONE, except with respect to
eligibility and vesting as set forth in Section 4.02, above.
(c) Employees of the Offices. BANK ONE shall not, without CNB's prior written
consent, (i) increase the aggregate full-time equivalent size of the work force
at the Offices above the aggregate normal staffing levels designated by BANK ONE
for the Offices at the date hereof, (ii) terminate any Transferred Employee
prior to the Closing Date, unless such person is dismissed for cause and written
notice of such dismissal is provided to CNB, (iii) transfer or assign any
Transferred Employee prior to the Closing Date to a position of permanent
employment with BANK ONE; or (iv) increase the compensation of any Transferred
Employee except pursuant to existing BANK ONE policies and procedures.
The obligations of BANK ONE pursuant to this Section 4.04 shall survive the
Closing.
5. CONDITIONS PRECEDENT TO CLOSING.
5.01 Conditions to BANK ONE's Obligations. The obligations of BANK ONE to
consummate the Acquisition are subject to the satisfaction, or the waiver in .
writing by BANK ONE to the extent permitted by applicable law, of the following
conditions at or prior to the Closing:
(a) Prior Regulatory Approval. All filings and registrations with, and
notifications to, all federal and state authorities required for consummation of
the Acquisition shall have been made, all approvals and authorizations of all
federal and state authorities required for consummation of the Acquisition shall
have been received and shall be in full force and effect, and all applicable
waiting periods shall have passed.
(b) Corporate Action. The Board of Directors of CNB shall have taken all
corporate action necessary by it to effectuate this Agreement and the
Acquisition and CNB shall have furnished BANK ONE with a certified copy of each
such resolution adopted by the Board of Directors of CNB evidencing the same.
<PAGE>
(c) Representations and Warranties. The representations and warranties of CNB
set forth in this Agreement shall be true and correct in all material respects
on the Closing Date with the same effect as though all such representations and
warranties had been made on and as of such date, and CNB shall have delivered to
BANK ONE a Certificate to that effect, dated as of the Closing Date to the
effect specified in Schedule J to this Agreement.
(d) Covenants. Each and all of the covenants and agreements of CNB to be
performed or complied with at or prior to Closing pursuant to this Agreement
shall have been duly performed or complied with in all material respects by CNB,
or waived by BANK ONE, and CNB shall have delivered to BANK ONE a Certificate to
that effect, dated as of the Closing Date to the effect specified in Schedule J
to this Agreement.
(e) No Proceeding or Prohibition. At the time of the Closing, there shall not be
any litigation, investigation, inquiry, or proceeding pending or threatened in
or by any court or agency of any government or by any third party which in the
judgment of the executive officers of BANK ONE, with the advice of counsel,
presents a bona fide claim to restrain, enjoin, or prohibit consummation~nation
of the transaction contemplated by this Agreement or which might result in
rescission in connection with such transactions; and BANK ONE shall have
beenfurnishedd with a Certificate, substantially in the form as specified in
Schedule J to this Agreement, dated as of the Closing Date and signed by the
Chairman, President or an Executive Vice President and Secretary or Assistant
Secretary of CNB, to the effect that no such litigation, investigation, inquiry,
or proceeding is pending or, to the best of their knowledge, threatened.
(f) Opinion of Counsel. CNB shall have delivered to BANK ONE an opinion, dated
as of the Closing Date, of legal counsel reasonably satisfactory to BANK ONE and
its counsel, in form and substance reasonably satisfactory to BANK ONE and its
counsel, to the effect specified in Schedule K to this Agreement.
5.02 Conditions to CNB's Obligations. The obligations of CNB to consummate the
Acquisition are subject to the satisfaction, or the waiver in writing by CNB to
the extent permitted by applicable law, of the following conditions at or prior
to the Closing:
(a) Prior Regulatory Approval. All filings and registrations with, and
notifications to, all federal and state authorities required for consummation of
the Acquisition and operation of the Offices by CNB shall have been made, all
approvals and authorizations of all federal and state authorities required for
consummation of the Acquisition and operation of the Offices by CNB shall have
been received and shall be in full force and effect, and all applicable
<PAGE>
waiting periods shall have passed.
(b) Corporate Action. The Board of Directors of BANK ONE shall have taken all
corporate action necessary to effectuate this Agreement and the Acquisition; and
BANK ONE shall have furnished CNB with a certified copy of each such resolution
adopted by the Board of Directors of BANK ONE evidencing the same.
(c) Representations and Warranties. The representations and warranties of BANK
ONE set forth in this Agreement shall be true and correct in all material
respects on the Closing Date with the same effect as though all such
representations and warranties had been made on and as of such date (unless a
different date is specifically indicated in such representations and
warranties), and BANK ONE shall have delivered to CNB a Certificate to that
effect, dated as of the Closing Date to the effect specified in Schedule L to
this Agreement.
(d) Covenants. Each and all of the covenants and agreements of BANK ONE to be
performed or complied with pursuant to this Agreement shall have been duly
performed or complied with in all material respects by BANK ONE, or waived by
CNB, and BANK ONE shall have delivered to CNB a Certificate to that effect,
dated as of the Closing Date to the effect specified in Schedule L to this
Agreement.
(e) No Proceedings or Prohibitions. At the time of the Closing, there shall not
be any litigation, investigation, inquiry, or proceeding pending or threatened
in or by any court or agency of any government or by any third party which in
the judgment of the executive officers of CNB, with the advice of counsel,
presents a bona fide claim to restrain, enjoin, or prohibit consummation of the
transactions contemplated by this Agreement or which might result in rescission
in connection with such transactions; and CNB shall have been furnished with a
Certificate, in substantially the form specified in Schedule L to this
Agreement, dated as of the Closing Date and signed by the Chairman, President,
or Vice President, and the Secretary or Assistant Secretary of BANK ONE, to the
effect that no such litigation, investigation, inquiry, or proceeding is pending
or threatened to the best of their knowledge.
(f) Opinion of Counsel. BANK ONE shall have delivered to CNB an opinion, dated
as of the Closing Date, of legal counsel reasonably satisfactory to CNB and its
counsel, in form and substance reasonably satisfactory to CNB and its counsel,
to the effect specified in Schedule M to this Agreement.
(g) Real Property. The Title Commitment (as defined in Section 2.01(c) herein),
at CNB's election, shall have been delivered to CNB, and updated to or as close
as practicable to (but in no event more than five (5) business
<PAGE>
days prior to) the Closing Date, and such updated Title Commitment shall not
include any special exceptions other than those set forth in the original Title
Commitment and any other Permitted Exceptions.
(h) Fixed Assets. There shall have been no material alteration in or adjustment
to the Fixed Assets. For purposes of this subsection h), it will not be
considered to be a material alteration or adjustment to the Fixed Assets if (i)
there is damage or destruction to the Fixed Assets as contemplated by Section
2.01 (g) herein and BANK ONE complies with said Section 2.0 1 (g), (ii) BANK ONE
makes additions to the Fixed Assets with the prior written consent of CNB or
(iii) BANK ONE makes additions to the Fixed Assets without CNB's consent in
order to correct emergency situations which are threatening to impair BANK ONE's
operations at an Office.
5.03 Non-Satisfaction of Conditions Precedent. The non-occurrence or delay of
the Closing of the Acquisition by reason of the failure of timely satisfaction
of all conditions precedent to the obligations of any party hereto to consummate
the Acquisition shall in no way relieve such party of any liability to the other
party hereto, nor be deemed a release or waiver of any claims the other party
hereto may have against such party, if and to the extent the failure of timely
satisfaction of such conditions precedent is attributable to the actions or
inactions of such party.
5.04 Waiver of Conditions Precedent. The conditions specified in Sections 5.01
and 5.02 herein shall be deemed satisfied or, to the extent not satisfied,
waived if the Closing occurs unless such failure of satisfaction is reserved in
a writing executed by CNB and BANK ONE at or prior to the Closing.
6. CLOSING
6.01 Closing and Closing Date. The Acquisition contemplated by this Agreement
shall be consummated and closed (the "Closing") at such location as shall be
mutually agreed upon by CNB and BANK ONE, on a date to be mutually agreed upon
by CNB and BANK ONE which date is after all required regulatory approvals have
been obtained and all applicable regulatory waiting periods associated therewith
have expired. The precise date on which the Closing. shall occur (the "Closing
Date")shall be confirmed by the parties in writing not less than five (5) days
after receiving all required regulatory approvals.
6.6.02 BANK ONE's Actions at Closing. At the Closing (unless another time is
specifically stated in Section 6.04 hereof), BANK ONE shall, with respect to the
Offices:
(a) deliver to CNB at the Offices such of the Assets purchased hereunder as
shall be capable of physical delivery, including, without limitation, all
<PAGE>
assets comprising the safe deposit box business, if any, of the Offices; and
(b) execute, acknowledge and deliver to CNB all such endorsements, assignments,
bills of sale, and other instruments of conveyance, assignment, and transfer as
shall reasonably be necessary or advisable to consummate the sale, assignment,
and transfer of the Assets sold or assigned to CNB hereunder and such other
documents as the title company may reasonably require; the originals of all
blueprints, construction plans, specifications and plat relating to the Leased
Real Estate, which are now in BANK ONE's possession or which BANK ONE has
reasonable access to; and such other documents or instruments as may be
reasonably required by CNB, required by other provisions of this Agreement, or
reasonably necessary to effectuate the Closing. All of the documents and
instruments to be delivered by BANK ONE hereunder shall be in form and substance
reasonably satisfactory to counsel for CNB; and
(c) execute, acknowledge and deliver to CNB a duly executed and recordable
assignment to CNB of the Third Party Lease and a consent to assignment from the
landlord of the Third Party Lease all in substantially as set forth in Schedule
E attached hereto and incorporated herein by reference;
(d) assign, transfer, and deliver to CNB such of the following records (in
whatever form or medium then maintained by BANK ONE) pertaining to the Deposit
Liabilities and accrued interest thereon of the Offices assumed by CNB hereunder
as exist and are available:
(i) signature cards, orders and contracts between BANK ONE and
depositors of the Offices, and records of similar character; and
(ii) canceled checks and/or negotiable orders of withdrawal
representing charges to depositors; and
(iii) a trial balance listing of records of account; and
(iv) all other miscellaneous records, statements and other data and
materials maintained by BANK ONE relative to any Deposit Liabilities
being assumed by CNB; and
(e) assign, transfer, and deliver to CNB such safe deposit and safekeeping files
and records (in whatever form or medium then maintained by BANK ONE) pertaining
to the safe deposit business of the Offices transferred to CNB hereunder as
exist and are available, together with the contents of the safe deposit boxes
maintained at the Offices, as the same exist as of the close of business on the
day immediately preceding the Closing Date (subject to the terms and conditions
of the leases or other agreements relating to the same) and all securities and
other records, if any, held by the Offices for their
<PAGE>
customers as of the close of business on the day immediately preceding the
Closing Date (subject to the terms and conditions of the agreements or receipts
relating to the same); and
(f) make available and transfer to CNB on the Closing Date and prior to the
conclusion of the Closing any funds required to be paid to CNB pursuant to the
terms of this Agreement; and
(g) execute, acknowledge and deliver to CNB all Certificates and other documents
required to be delivered to CNB by BANK ONE at the Closing pursuant to the terms
hereof, and
(h) assign by endorsement substantially in a form as provided in Schedule O
attached hereto, transfer and deliver to CNB the contract, promissory note or
other evidence of indebtedness related to the Office Loans together with the
loan file and records in whatever form or medium then maintained by BANK ONE)
pertaining to such Office Loans; and
(i) assign to CNB all BANK ONE's rights in and to the Assumed Contracts which
are assignable and which constitute part of the Assets.
6.03 CNB's Actions at the Closing At the Closing (unless another time is
specifically stated in Section 6.04 hereto~o, CNB shall, with respect to the
Offices:
(a) execute, acknowledge, and deliver to BANK ONE, to evidence the assumption of
the liabilities and obligations of BANK ONE by CNB hereunder, an instrument of
assumption in the form set forth in Schedule P to this Agreement, and BANK ONE
shall then accept, execute, and acknowledge such instrument. Copies of such
instrument may be recorded in the public records at the option of either party
hereto. The execution and acknowledgment of such instrument shall not be deemed
to be a waiver of any rights or obligations of any party to this Agreement;
(b) receive, accept and acknowledge delivery of all Assets, and all records and
documentation relating thereto, sold, assigned, transferred, conveyed or
delivered to CNB by BANK ONE hereunder; and
(c) execute and deliver to BANK ONE such written receipts for the Assets,
properties, records, and other materials assigned, transferred, conveyed, or
delivered to CNB hereunder as BANK ONE may reasonably have requested at or
before the Closing;
(d) pay to BANK ONE on the Closing Date and prior to the conclusion of the
Closing any funds required to be paid to BANK ONE at the Closing pursuant to
<PAGE>
the terms of this Agreement;
(e) execute, acknowledge and deliver to BANK ONE all Certificates and other
documents required to be delivered to BANK ONE by CNB at the Closing pursuant to
the terms hereof; and
(f) execute, acknowledge and deliver to BANK ONE an agreement wherein CNB
assumes obligations with respect to the Third Party Lease and Assumed Contracts
for all periods following the Closing Date with respect thereto.
6.04 Methods of Payment. Subject to the adjustment procedures set forth in this
Section 6.04, the transfer of the funds, if any, due to CNB or to BANK ONE, as
the case may be, as set forth pursuant to the terms of Section 1.04(a) hereof,
shall be made on the Closing Date in immediately available United States Federal
Funds. At least two business days prior to the Closing, BANK ONE and CNB shall
provide written notice to one another indicating the account and bank to which
such funds shall be wire transferred. In order to facilitate the Closing, the
parties agree: (i) that the amount of funds transferred on the Closing Date,
pursuant to Section 1.04(a) hereof, shall be computed based upon (a) the
aggregate book value plus accrued interest of the Office Loans as of the close
of business on the day immediately preceding the Closing Date, (b) cash on hand
at the Offices as of the close of business on the day immediately preceding the
Closing Date, and (c) the aggregate balance of all Deposit Accounts (including
interest posted or accrued to such accounts and Individual Retirement Accounts
which have become IRAs as a result of the written appointment of CNB as the
successor custodian and the failure of the account holders to object to such
appointment as of the close of business on the day immediately preceding the
Closing Date, all as reflected on the Preliminary Settlement Statement in a form
substantially similar to the one attached as Schedule Q; and (ii) that within
ten (10) business days after the Closing, the parties shall make appropriate
post-closing adjustments, consistent with the provisions of Section 1.04 hereof,
based upon actual Deposit Accounts, Office Loans and cash transactions which
took place on the Closing Date or which took place prior to the Closing Date but
which were not reflected as of the close of business on the day immediately
preceding the Closing Date and execute the Final Settlement in a form
substantially similar to Schedule R attached. In addition, prorations of prepaid
and deferred income and expenses that cannot be reasonably calculated at the
Closing shall be settled and paid based on actual figures as soon as possible
after the Closing.
6.05 Availability of Closing Documents. The documents proposed to be used and
delivered at the Closing shall be made available for examination by the
respective parties not later than 12:00 noon, Ohio time, on the tenth Business
Day prior to the Closing Date.
<PAGE>
6.06 Effectiveness of Closing. Upon the satisfactory completion of the Closing,
which does not include and shall not require completion of the adjustment and
proration arrangements set forth in Section 6.04, the Acquisition shall be
deemed to be effective and the Closing shall be deemed to have occurred.
7. CERTAIN TRANSITIONAL MATTERS.
7.01 Transitional Action by CNB. After the Closing, unless another time is
otherwise indicated:
(a) CNB shall: (i) pay in accordance with the law and customary banking
practices and applicable Deposit Account contract terms, all properly drawn and
presented checks, negotiable orders of withdrawal, drafts, debits, and
withdrawal orders presented to CNB by mail, over the counter, through electronic
media, or through the check clearing system of the banking industry, by
depositors of the Deposit Accounts assumed by CNB hereunder, whether drawn on
checks, negotiable orders or withdrawal, drafts, or withdrawal order forms
provided by CNB or BANK ONE; and (ii) in all other respects discharge, in the
usual course of the banking business, the duties and obligations of BANK ONE
with respect to the balances due and owing to the depositors whose Deposit
Accounts are assumed by CNB hereunder; provided, however, that any obligations
of CNB pursuant to this Section 7.01 to honor checks, negotiable orders of
withdrawal, drafts, and withdrawal orders on forms provided by BANK ONE and
carrying its imprint (including its name and transit routing number) shall not
apply to any checks, draft, or withdrawal order (i) presented to CNB more than
one hundred twenty (120) days following the Closing Date, (ii) with a date more
than one hundred twenty (120) days prior to (a) the Closing Date or (b) the date
of CNB's receipt thereof, or (iii) on which a stop payment has been requested by
the deposit customer. The provisions of this subsection 7.01 (a) shall in no way
limit CNB's duties or obligations arising under Section 1.03(b) hereof.
(b) CNB shall, not earlier than the time of procurement of all regulatory
approvals required for consummation of the transaction contemplated by this
Agreement nor later than ten days prior to the Closing Date, notify all
depositors of the Offices by letter, acceptable to BANK ONE, produced in, if
appropriate, several similar, but different forms calculated to provide
necessary and specific information to the owners of particular types of
accounts, of CNB's pending assumption of the Deposit Liabilities hereunder, and,
in appropriate instances, notify depositors that on and after the Closing Date
certain BANK ONE deposit-related services and/or BANK ONE's debit card and
automatic teller machine services, will be terminated. As an enclosure to such
notices, CNB may furnish appropriate depositors with brochures, forms and other
written materials related or necessary to the assumption of the
<PAGE>
Deposit Accounts by CNB and the conversion of said accounts to CNB accounts,
including the provision of checks to appropriate depositors using the forms of
CNB with instructions to such depositors to utilize such CNB checks on and after
the Closing Date and thereafter to destroy any unused checks on BANK ONE's
forms. The expenses of the printing, processing and mailing of such letter
notices and providing new CNB checks and other forms and written materials to
appropriate customers shall be borne by CNB. Before Closing, except as provided
in this paragraph, CNB will not contact BANK ONE's customers except as may occur
in connection with advertising or solicitations directed to the public generally
or in the course of obtaining the requisite regulatory approvals of the
transaction.
(c) CNB shall promptly pay to BANK ONE an amount equivalent to the amount of any
checks, negotiable orders of withdrawal, drafts, or withdrawal orders (net of
the applicable Acquisition Consideration paid by CNB with respect to the Deposit
Liabilities represented by any such instrument) credited as of the close of
business on the Closing Date to a Deposit Account assumed by CNB hereunder which
are returned uncollected to BANK ONE after the Closing Date and which shall
include an amount equivalent to holds placed upon such deposit account for items
cashed by BANK ONE as of the close of business on the Closing Date which items
are subsequently dishonored.
(d) All tasks and obligations concerning the provision of data processing
services to or for the Offices after the Closing, other than those specifically
set forth in, and to the extent assumed by BANK ONE pursuant to, Section 7.02(b)
herein, are the sole and exclusive responsibility of, and shall be performed
solely and exclusively by, CNB.
(e) CNB shall, not later than the close of business on the business day i
mmediately following the Closing Date, supply suitable government-backed
securities as security for any deposits of governmental units included among the
Deposit Liabilities for which BANK ONE had provided similar security.
(f) CNB shall, as soon as practicable after the Closing Date, prepare and
transmit at CNB's expense to each of the obligors on Office Loans transferred to
CNB pursuant to this Agreement a notice to the effect that the loan has been
transferred and directing that payment be made to CNB at the address specified
by CNB, with CNB's name as payee on any checks or other instruments used to make
payments, and, with respect to such loan on which a payment notice or coupon
book has been issued, to issue a new notice or coupon book reflecting the name
and an address of CNB as the person to whom and place at which payments are to
be made.
(g) If the balance due on any Office Loan transferred to CNB pursuant to this
Agreement has been reduced by BANK ONE as a result of a payment by check
<PAGE>
or draft received prior to the close of business on the Closing Date, which item
is returned unpaid to BANK ONE after the day immediately preceding the Closing
Date, the asset value represented by the loan transferred shall be
correspondingly increased and an amount in cash equal to such increase shall be
promptly paid by CNB to BANK ONE.
(h) CNB shall use its best efforts to cooperate with BANK ONE in assuring an
orderly transition of ownership of the Assets and responsibility for the
liabilities, including the Deposit Liabilities, assumed by CNB hereunder.
7.02 Transitional Actions by BANK ONE. After the Closing, unless another time is
otherwise indicated:
(a) BANK ONE shall use its best efforts to cooperate with CNB in assuring an
orderly transition of ownership of the Assets and responsibility for the
liabilities, including the Deposit Liabilities, assumed by CNB hereunder.
(b) BANK ONE's sole and exclusive responsibilities concerning the provision of
data processing services to or for the Deposit Accounts of the Offices after the
Closing Date shall be as set forth in this Section 7.02(b). As soon as
practicable following the date of this Agreement, BANK ONE shall provide CNB
with applicable product functions and specifications relating to the data
processing support required for the Deposit Accounts, Office Loans, and safe
deposit business (if such data processing support currently is provided with
respect to such business) maintained at the Offices (such Deposit Accounts,
Office Loans and safe deposit business, if applicable, hereinafter called the
"Accounts"). As soon as practicable following the date of this Agreement, BANK
ONE shall provide to CNB file formats relating to the Accounts and test tapes
related to the Accounts in generic form which are machine readable on IBM (or
IBM compatible) equipment or which shall be on eighteen track 3480 cartridges
(non-compressed data) or on nine channel 6250 B.P.I. EBC1DIC formatted tape. By
not later than 2:00 P.M. local Steubenville, Ohio time of the day immediately
following the Closing Date, BANK ONE shall make available for CNB's pick-up at
Wheeling, West Virginia, tapes containing all pertinent data and descriptive
information relating to the Accounts which is then available to BANK ONE, which
tapes shall constitute BANK ONE's records maintained as of and current to the
close of business on the Closing Date with respect to the Accounts. BANK ONE
shall bear all costs and expenses relating to the performance of its obligations
pursuant to this Section 7.02(b).
(c) Prior to the Closing Date, BANK ONE shall cooperate with CNB, at CNB's
expense and at no expense to BANK ONE, in making Transferred Employees available
at reasonable times for whatever program of training CNB deems
<PAGE>
advisable; provided, however, that CNB shall conduct such training program in a
manner that does not materially interfere with or prevent the performance of the
normal duties and activities of such Transferred Employees. CNB shall make
request of BANK ONE for training opportunities prior to the Closing Date. Such
requests, which shall specify the time, duration and place of such training,
must be approved by BANK ONE. Such approvals will not be unreasonably withheld
by BANK ONE.
(d) BANK ONE shall cooperate with and permit CNB, at CNB's option and expense
and at no expense to BANK ONE, to make provision for the installation of teller
equipment in the Offices; provided, however, that CNB shall arrange for the
installation and placement of such equipment at such times and in a manner that
does not significantly interfere with the normal business activities and
operation of BANK ONE or the Offices.
(e) BANK ONE shall resign as custodian of each IRA account maintained at the
Offices and assign the custodianship of such accounts to CNB upon Closing.
(f) Not sooner than one (1) business day prior to the Closing nor later than the
close of business on the Closing Date, BANK ONE shall terminate its debit card
service and convert and change over its direct deposit or payroll and retirement
payments service for the Deposit Accounts from BANK ONE to CNB. Such
terminations will be preceded by the notice described in Section 7.01 (b)
herein.
(g) As of the opening of business on the first business day after the Closing
Date, BANK ONE and CNB shall provide the Federal Reserve Bank of Cleveland with
all information necessary in order to expedite the clearing and sorting of all
checks, drafts, instruments and other commercial paper relative to the Deposit
Liabilities and/or the Office Loans (hereinafter collectively referred to as
"Paper Items"). CNB shall bear all charges and costs imposed by the Federal
Reserve in connection with the reassignment of account number ranges for sorting
the Paper Items.
In the event the Federal Reserve and/or any other regional or local
clearinghouse for negotiable instruments fails, refuses or is unable to direct
sort such Paper Items for delivery to CNB with the result that such Paper Items
are presented to BANK ONE, by not later than 2:00 p.m. local time of each
business day following the Closing and continuing for one hundred twenty (120)
days after the Closing, BANK ONE will make available to CNB for pick up from
BANK ONE's offices or the offices of BANK ONE's agent and/or processor at
Columbus, Ohio, all of the Paper Items which are received by BANK ONE from the
Federal Reserve Bank of Cleveland and/or any regional or local clearinghouse
during the morning of each such business day on an "as-received basis." At the
same time BANK ONE shall also make available to CNB information
<PAGE>
and records, including but not limited to systems printouts, concerning such
Paper Items and concerning incoming Automated Clearing House items ("ACH items")
as well as outstanding Automatic Teller Machine ("ATM") transactions. Such
information and records, including but not limited to systems printouts, will
utilize the most recent account number designated by BANK ONE for each of the
Deposit Accounts and/or the Office Loans. Each business day BANK ONE will
endeavor to see that the sum of (a) the actual Paper Items provided to CNB plus
(b) all ACH items and ATM transactions captured by BANK ONE in its information
and records balance with the sum of (c) the information and records, including
but not limited to systems printouts, provided by BANK ONE relative to the Paper
Items plus (d) the information and records, including but not limited to systems
printouts, provided relative to the ACH items and ATM transactions affecting the
Deposit Accounts and/or the Office Loans.
BANK ONE shall provide the foregoing at no charge to CNB except that CNB shall
pay any charges assessed to BANK ONE by the Federal Reserve Bank of Cleveland
a national or local clearinghouse and/or BANK ONE's agent and/or processor to
the extent such assessments relate to the Deposit Accounts. CNB shall be
responsible for pick up of the data to be provided by BANK ONE.
BANK ONE and CNB shall arrange for appropriate daily settlement with one another
in order that the transmission of all monies associated with the matters set
forth in this Section 7.02(g) might be effected promptly.
BANK ONE shall not be liable to CNB for any failure to provide the data required
by this Section 7.02(g) to the extent any such failure results from causes
beyond BANK ONE's control including war, strike or other labor disputes, acts of
God, errors or failures of the Federal Reserve Bank of Cleveland and/or a
participating regional or local clearinghouse, or equipment failure or other
emergency wherein BANK ONE and/or its agent processor has been unable to process
inclearings from the Federal Reserve Bank of Cleveland or such clearinghouse.
(h) BANK ONE shall, not earlier than the time of procurement of all regulatory
approvals required for consummation of the transaction contemplated by this
Agreement nor later than twenty days prior to the Closing Date, notify all
depositors of the Offices and all borrowers of any Office Loan by letter
acceptable to CNB, produced in, if appropriate, several similar, but different
forms calculated to provide necessary and specific information to the owners of
particular types of accounts and/or loans, of CNB's pending assumption of the
Deposit Liabilities and acquisition of the Office Loans hereunder, and, in
appropriate instances, notify depositors that on and after the Closing Date
certain BANK ONE deposit-related services and/or BANK ONE's debit card and
<PAGE>
automatic teller machine services, will be terminated. The expenses of the
printing, processing and mailing of such letter notices shall bebornee by BANK
ONE. BANK ONE and CNB may by mutual agreement, coordinate their efforts in
fulfilling their respective obligations in ss.7.01(b) and ss.7.02(h) by jointly
preparing one letter to the customers to be cosigned by both parties and, in
such event, the costs therefore shall be shared equally by the parties.
(i) For a period of sixty (60) days after the Closing Date, BANK ONE will
forward to CNB, within two (2) business days of receipt, loan payments received
by BANK ONE with respect to the Office Loans. CNB will forward, within two (2)
business days of receipt payments received by CNB with respect to any loans not
assigned to CNB under this Agreement. CNB and BANK ONE further agree to refer
customers to the offices of the other when such customers present payments over
the counter to the party not holding their respective loan.
7.03 Overdrafts and Transitional Action. Overdrafts paid on the Deposit Accounts
with respect to ledger dates after the Closing Date will be the responsibility
and risk of CNB. Overdrafts approved with respect to ledger dates more than four
(4) business days prior to the Closing Date will be the responsibility and risk
of BANK ONE. Overdrafts approved with respect to ledger dates during the period
beginning four (4) business days prior to the Closing Date through the Closing
Date, inclusive, will initially be the responsibility and risk of CNB (other
than overdrafts of customers who are specifically identified in writing by CNB
to BANK ONE not less than four (4) business days prior to the Closing Date);
provided, however, that CNB shall have the right to retransfer any such
overdrafts back to BANK ONE for BANK ONE's responsibility and at its risk within
six (6) days following the Closing Date, and BANK ONE will repurchase all rights
in respect of such overdrafts from CNB for the amount of each such overdraft
outstanding at the time it is retransferred back to BANK ONE less the amount of
the Acquisition Consideration paid by CNB to BANK ONE attributable to such
overdrafts; provided, however, that CNB shall have closed all accounts on which
each such overdraft exists not later than the date of such retransfer.
7.04 ATMs Located in the Offices, if any.
(a) BANK ONE shall provide to CNB no later than sixty (60) days prior to the
Closing Date, a test tape, along with a file format or file layout and a
production tape thirty (30) days before the Closing Date, containing customer
name, address, card number, card status (open, closed or blocked), personal
identification number ("PIN"), withdrawal limits, the Deposit Accounts activated
by, accessible to or committed to such cards, issue dates and/or open dates,
last transaction dates, expiration dates and social security numbers as to all
ATM cards issued to customers of the BANK ONE Offices
<PAGE>
processor to deactivate the operation of the BANK ONE ATM Cards completely or to
deactivate or disconnect the Deposit Accounts from such BANK ONE ATM Cards no
later than the business day cutoff on the date prior to the Closing Date so that
all activity generated by the BANK ONE ATM Cards shall have settled prior to the
Closing Date. All transactions and activity related to the BANK ONE ATM Cards
following the Closing Date which are received or forwarded to BANK ONE will be
returned by BANK ONE to its processor for forwarding to CNB or will be accepted
and forwarded by BANK ONE to CNB along with all corresponding funds. BANK ONE
thereafter agrees to immediately notify its processor to deactivate such ATM
Cards and to forward all transactions related thereto directly to CNB.
(b BANK ONE agrees to deactivate the ATMs located at the Offices on or before
the business day cutoff on the day prior to the Closing Date. Thereafter, CNB
shall reconfigure the ATMs to its standards for activation after the business
day cutoff on the Closing Date.
(c CNB and BANK ONE agree to cooperate with each other to assure that all
transactions originated through the ATM or originated with the ATM Cards prior
to or on the Closing Date shall be for the account of BANK ONE and all
transactions originated after the Closing Date shall be for the account of CNB.
A post closing adjustment shall be made in the manner set forth in Section 6.04
hereof to reflect all such transactions which cannot be reasonably calculated as
of the Closing.
7.05 Effect of Transitional Action. Except as and to the extent expressly set
forth in this Article 7, nothing contained in this Article 7 shall be construed
to be an abridgment or nullification of the rights, customs and established
practices under applicable banking laws and regulations as they affect any of
the matters addressed in this Article 7.
8. GENERAL COVENANTS AND INDEMNIFICATION.
8.01 Confidentiality Obligations of CNB. From and after the date hereof, CNB and
its affiliates and parent company shall treat all information received from BANK
ONE concerning the business, assets, operations, and financial condition of BANK
ONE (including without limitation the Offices), as confidential, unless and to
the extent that CNB can demonstrate that such information was already known to
CNB and its affiliates, if any, or in the public domain or received from a third
person not known by CNB to be under any obligation to BANK ONE; and CNB shall
not use any such information (so required to be treated as confidential) for any
purpose except in furtherance of the transactions contemplated hereby. Upon the
termination of this Agreement, CNB shall, and shall cause its affiliates, if
any, to, promptly
<PAGE>
return all documents and workpapers containing, and all copies of, any such
information (so required to be treated as confidential) received from or on
behalf of BANK ONE in connection with the transactions contemplated hereby. The
covenants of CNB contained in this Section 8.01 are of the essence and shall
survive any termination of this Agreement, but shall terminate at the Closing,
if it occurs, with respect to any information that is limited solely to the
activities and transactions of the Offices; provided, however, that neither CNB
nor any of its affiliates shall be deemed to have violated the covenants set
forth in this Section 8.01 if CNB shall in good faith disclose any of such
confidential information in compliance with any legal process, order or decree
issued by any court or agency of government of competent jurisdiction. It is
expressly acknowledged by BANK ONE that all information provided to CNB related
to this purchase and assumption transaction may be provided to American
Bancorporation and CNB's affiliates for the purpose of consummating the
transaction which is the subject of this Agreement.
8.02 Confidentiality Obligations of BANK ONE. From and after the date hereof,
BANK ONE, its affiliates and its parent corporation shall treat all information
received from CNB concerning CNB's business, assets, operations, and financial
condition as confidential, unless and to the extent BANK ONE can demonstrate
that such information was already known to BANK ONE or its affiliates or in the
public domain, and BANK ONE shall not use any such information (so required to
be treated as confidential) for any purpose except in furtherance of the
transactions contemplated hereby. Upon the termination of this Agreement, BANK
ONE shall promptly return all documents and workpapers containing, and all
copies of, any such information (so required to be treated as confidential)
received from or on behalf of CNB in connection with the transactions
contemplated hereby. The covenants of BANK ONE contained in this Section 8.02
are of the essence and shall survive any termination of this Agreement;
provided, however that BANK ONE nor any of its affiliates shall be deemed to
have violated the covenants set forth in this Section 8.02 if BANK ONE shall in
good faith disclose any of such confidential information in compliance with any
legal process, order or decree issued by any court or agency of government of
competent jurisdiction. It is expressly acknowledged by CNB that all information
provided to BANK ONE related to this purchase and assumption transaction may be
provided to Banc One Corporation and BANK ONE's
affiliates for the purpose of consummating the transaction which is the
subject of this Agreement.
8.03 Indemnification by BANK ONE. From and after the Closing Date, BANK ONE
shall indemnify, hold harmless, and defend CNB from and against all losses and
liabilities, including reasonable attorneys' fees and expenses, arising out of
any actions, suits, or proceedings commenced prior to the Closing (other than
proceedings to prevent or limit the consummation of the
<PAGE>
Acquisition) relating to operations at the Offices and/or the Deposit
Liabilities or Office Loans of the Offices; and BANK ONE shall further
indemnify, hold harmless, and defend CNB from and against all losses and
liabilities, including reasonable attorneys' fees and expenses, arising out of
any actions, suits, or proceedings commenced on or after the Closing to the
extent the same relate to operations at the Offices and/or the Deposit
Liabilities or Office Loans prior to the Closing. The obligations of BANK ONE
under this Section 8.03 shall be contingent upon CNB giving BANK ONE written
notice (i) of receipt by CNB of any process and/or pleadings in or relating to
any actions, suits, or proceedings of the kinds described in this Section 8.03,
including copies thereof, and (ii) of the assertion of any claim or demand
relating to the operation of the Offices and/or the Deposit Liabilities or
Office Loans prior to the Closing, including, to the extent known to CNB, the
identity of the person(s) or entity(ies) asserting such claim or making such
demand and the nature thereof, and including copies of any correspondence or
other writings relating thereto. All notices required by the preceding sentence
shall be given within fifteen days of the receipt by CNB of any such process or
pleadings or any oral or written notice of the assertion of any such claims or
demands. BANK ONE shall have the right to take over CNB's defense in any such
actions, suits, or proceedings through counsel selected by BANK ONE, to
compromise and/or settle the same and to prosecute any available appeals or
reviews of any adverse judgment or ruling that may be entered therein. The
obligations of BANK ONE pursuant to this Section 8.03 shall survive the Closing.
8.04 Indemnification by CNB. From and after the Closing Date, CNB shall
indemnify, hold harmless and defend BANK ONE from and against all claims,
losses, liabilities, demands and obligations, including without limitation
reasonable attorneys' fees and operating expenses which BANK ONE may receive,
suffer, or incur in connection with (i) any losses incurred by BANK ONE related
to BANK ONE's compliance with instructions from CNB made pursuant to Section
7.04 of this Agreement and not related to any negligence or malfeasance on the
part of BANK ONE and (ii) operations and transactions occurring after the
Closing and which involve the Assets transferred, the Deposit Liabilities or
Office Loans and the other obligations and liabilities assumed pursuant to this
Agreement. The obligations of CNB under this Section 8.04 shall be contingent
upon BANK ONE giving CNB written notice (i) of the receipt by BANK ONE of any
process and/or pleadings in or relating to any actions, suits or proceedings of
the kinds described in this Section 8.04, including copies thereof, and (ii) of
the assertion of any claim or demand relating to the Assets transferred to
and/or the Deposit Liabilities or Office Loans and the other obligations and
liabilities assumed by CNB on or after the Closing, including, to the extent
known to BANK ONE, the identity of the person(s) or entity(ies) asserting such
claim or making such demand and the nature thereof, and including copies of any
correspondence or other writings relating thereto.
<PAGE>
All notices required by the preceding sentence shall be given within fifteen
(15) days of the receipt by BANK ONE of any such process or pleadings or any
oral or written notice of the assertion of any such claims or demands. CNB shall
have the right to take over BANK ONE's defense in any such actions, suits, or
proceedings through counsel selected by CNB, to compromise and/or settle the
same and to prosecute any available appeals or review of any adverse judgment or
ruling that may be entered therein. The obligations of CNB pursuant to this
Section 8.04 shall survive the Closing.
8.05 Solicitation of Customers by CNB Prior to Closing. At any time prior to the
Closing Date, CNB will not, and will not permit any of its affiliates, if any,
to conduct any marketing, media or customer solicitation campaign which is
specifically targeted to induce customers whose Deposit Account liabilities are
to be assumed or Office Loans are to be acquired by CNB pursuant to this
Agreement to discontinue their account relationships with BANK ONE, except as
may occur in connection with advertising or solicitations directed to the public
generally. Additionally, at any time prior to the Closing, CNB shall not, with
respect to its offices in Belmont County, Ohio, offer to pay on any transaction
accounts or any new or renewal savings accounts or certificates of deposits,
rates of interest greater than those offered or then being paid on similar
accounts for like term and amount by the main office and all Belmont County,
Ohio offices of CNB. It is the intent of this provision to prevent CNB from
paying or offering to pay a rate of interest on any deposit account at its
Belmont County offices in excess of that rate paid for like accounts at the
Belmont County offices of CNB.
8.06 Further Assurances. From and after the date hereof, each party hereto
agrees to execute and deliver such instruments and to take such other actions as
the other party hereto may reasonably request in order to carry out and
implement this Agreement. Without limiting the foregoing, BANK ONE agrees to
execute and deliver such deeds, bills of sale, acknowledgments, and other
instruments of conveyance and transfer as, in the reasonable judgment of CNB,
shall be necessary and appropriate to vest in CNB the legal and equitable title
to the Assets of BANK ONE being conveyed to CNB hereunder. The covenants of each
of the parties hereto pursuant to this Section 8.07 shall survive the Closing.
8.07 Operation of the Offices. Except as otherwise provided in this Agreement,
neither BANK ONE, its subsidiaries, affiliates or parent corporation shall be
obligated to provide for any managerial, financial, business, or other services
to the Offices, including without limitation any personnel, employee benefit,
data processing, accounting, risk management, or other services or assistance
that may have been provided to the Offices prior to the close of business on the
Closing Date, and CNB shall take such action as may in its judgment appear to be
necessary or advisable to provide for the ongoing
<PAGE>
operation and management of, and the provision of services and assistance to,
the Offices after the Closing Date. As soon as possible after the Closing Date,
CNB shall change the legal name of the Offices and, except for any documents or
materials in possession of the customers of the Offices (including but not
limited to deposit tickets and checks), shall not use and shall cause the
Offices to cease using any signs, stationery, advertising, documents, or printed
or written materials that refer to the Offices by any name that includes the
words "BANK ONE" or "BANC ONE." Preceding the Closing, BANK ONE shall cooperate
with any reasonable requests of CNB directed to obtaining specifications for the
procurement of new signs of CNB~'s choosing so that CNB is in a position to
install new signs immediately following the close of business on the Closing
Date; provided, however, that CNB's receipt of all sign specifications shall be
obtained by CNB in a manner that does not significantly interfere with the
normal business activities and operations of the Offices, and further provided
that the procurement of all new signs shall be at the sole and exclusive expense
of CNB. As indicated in Section 1.02(c), BANK ONE will retain its signs located
at the Offices. If removed by CNB in conjunction with its installation of new
signs, CNB shall obtain BANK ONE's approval for such removal and shall insure
that said signs are removed without damaging them. It is understood by the
parties hereto that, with the exception of the signs themselves, all mounting
facilities for the signs shall be considered as fixtures or as part of the Fixed
Assets.
8.08 Information After Closing. For a period of seven (7) years following the
Closing, upon written request of BANK ONE to CNB or CNB to BANK ONE, as the case
may be, such requested party shall provide the requesting party with reasonable
access to, or copies of, information and records relating to the Offices which
are then in the possession or control of the requested party reasonably
necessary to permit the requesting party or any of its subsidiaries or
affiliates to comply with or contest any applicable legal, tax, banking,
accounting, or regulatory policies or requirements, or any legal or regulatory
proceeding thereunder or requests related to customer relationships at the
Offices prior to Closing. In the event of any such requests, the requesting
party shall reimburse the requested party for the reasonable costs of the
requested party related to such request.
8.09 Survival of Covenants. The obligations and covenants of the parties under
this Section 8 shall survive the Closing.
8.10 Individual Retirement Accounts. All Individual Retirement Accounts related
to the Offices that shall not have become IRAs by the close of business on the
Closing Date shall not be assigned by BANK ONE to CNB or assumed by CNB. BANK
ONE may thereafter, at its option, elect to retain such Individual Retirement
Accounts, advise the account holders that it has withdrawn its resignation as
custodian or transfer the amount in such Individual Retirement
<PAGE>
Accounts to the account holders.
9. TERMINATION
9.01 Termination by Mutual Agreement. This Agreement may be terminated and the
transactions contemplated hereby may be abandoned by mutual consent of the
parties authorized by a vote of a majority of the Board of Directors (or by the
vote of the Executive Committee of such Board, if so empowered) of each of BANK
ONE and CNB.
9.02 Termination by BANK ONE. This Agreement may be terminated and the
transactions contemplated hereby abandoned by a vote of a majority of the Board
of Directors (or by the vote of the Executive Committee of such Board, if so
empowered) of BANK ONE:
(a) in the event of a material breach by CNB of this Agreement; or
(b) in the event any of the conditions precedent specified in Section 5.01 of
this Agreement has not been met as of the date required by this Agreement and,
if not so met, has not been waived by BANK ONE; or
(c) in the event any regulatory approval required for consummation of the
Acquisition is denied by the applicable regulatory authority or in the event
that at any time prior to the Closing Date it shall become reasonably certain to
BANK ONE, with the advice of counsel, that a regulatory approval required for
consummation of the Acquisition will not be obtained; or
(d) on or after December 31, 1995 if the Closing has not then occurred.
9.03 Termination by CNB. This Agreement may be terminated and transactions
contemplated hereby abandoned by a vote of a majority of the Board of Directors
(or by the vote of the Executive Committee of such Board, if so empowered) of
CNB:
(a) in the event of a material breach by BANK ONE of this Agreement; or
(b) in the event any of the conditions precedent specified in Section 5.02 of
this Agreement has not been met as of the date required by this Agreement and,
if not so met, has not been waived by CNB; or
(c) in the event any regulatory approval required for consummation of the
Acquisition is denied by the applicable regulatory authority or in the event
that at any time prior to the Closing Date it shall become reasonably certain
<PAGE>
to CNB, with the advice of counsel that a regulatory approval required for
consummation of the Acquisition will not be obtained; or
(e) on or after December 31, 1995 if the Closing has not then occurred.
9.04 Effect of Termination. The termination of this Agreement pursuant to
Sections 9.02 or 9.03 of this Article 9 shall not release any party hereto from
any liability or obligation to the other party hereto arising from (i) a breach
of any provision of this Agreement occurring prior to the termination hereof or
(ii) the failure of timely satisfaction of conditions precedent to the
obligations of a party to the extent that such failure of timely satisfaction is
attributable to the actions or inactions of such party.
10. MISCELLANEOUS PROVISIONS.
10.01 Expenses. Except as and to the extent specifically allocated otherwise
herein, each of the parties hereto shall bear its own expenses, whether or not
the transactions contemplated hereby are consummated.
10.02 Certificates. All statements contained in any certificate ("Certificate")
delivered by or on behalf of BANK ONE or CNB pursuant to this Agreement or in
connection with the transactions contemplated hereby shall be deemed to be
representations and warranties of the party delivering the Certificate
hereunder. Each such Certificate shall be executed on behalf of the party
delivering the Certificate by duly authorized officers of such party.
10.03 Termination of Representations and Warranties. The respective
representations and warranties of BANK ONE and CNB contained or referred to in
this Agreement or in any Certificate, schedule, or other instrument delivered or
to be delivered pursuant to this Agreement shall terminate at the Closing,
except for:
(a) those representations and warranties contained in any warranty deeds
delivered by BANK ONE to CNB at the Closing;
(b) those representations and warranties contained in any bill of sale relating
to the Assets delivered by BANK ONE to CNB at Closing;
(c) those representations and warranties contained in any instrument of
assumption or in any Certificate in the forms of Schedule P and Schedule J, r
espectively, attached hereto and delivered by CNB to BANK ONE at the Closing;
(d) those representations and warranties contained in any Certificate in the
form of Schedule L attached hereto, delivered by BANK ONE to CNB at the
<PAGE>
Closing; and
(e) those representations and warranties of BANK ONE contained in Section
3.01(o) of thisAgreement.
10.04 Waivers. Each party hereto, by written instrument signed by duly
authorized officers of such party, may extend the time for the performance of
any of the obligations or other acts of the other party hereto and may waive,
but only as affects the party signing such instrument:
(a) any inaccuracies in the representations or warranties of the other party
contained or referred to in this Agreement or in any document delivered pursuant
hereto;
(b) compliance with any of the covenants or agreements of the other party
contained in this Agreement;
(c) the performance (including performance to the satisfaction of a party
or its counsel) by the other party of such of its obligations set out herein;
and
(d) satisfaction of any condition to the obligations of the waiving party
pursuant to this Agreement.
10.05 Notices. All notices and other communications hereunder may be made by
mail, hand-delivery or by courier service and notice shall be deemed to have
been given when received; provided, however, if notices and other communications
are made by nationally recognized overnight courier service for overnight
delivery, such notice shall be deemed to have been given one business day after
being forwarded to such a nationally recognized overnight courier service for
overnight delivery.
If to BANK ONE:
Bank One, Steubenville, National Association
Attention: William D. Wolter, President & Chief Executive Officer
401 Market Street
Steubenville, Ohio 43952
With a copy to:
BANC ONE CORPORATION
Attention: Steven A. Bennett, Senior Vice President
100 East Broad Street
Columbus, Ohio 43271-0158
<PAGE>
If to CNB:
Columbus National Bank
Attention: Jeremy C. McCamic, Chairman
c/o American Bancorporation
Hawley Building
1025 Main Street, Suite 800
Wheeling, West Virginia 26003
or such other person or address as any such party may designate by notice to the
other parties, and shall be deemed to have been given as of the date received.
10.06 Parties in Interest: Assignment; Amendment. This Agreement is binding upon
and is for the benefit of the parties hereto and their respective successors,
legal representatives, and assigns, and no person who is not a party hereto (or
a successor or assignee of such party) shall have any rights or benefits under
this Agreement, either as a third party beneficiary or otherwise. This Agreement
cannot be assigned, and this Agreement cannot be amended or modified, except by
a written agreement executed by the parties hereto or their respective
successors and assigns.
10.07 Headings. The headings, table of contents, and index to defined terms (if
any) used in this Agreement are inserted for convenience of reference only and
are not intended to be a part of or to affect the meaning or interpretation of
this Agreement.
10.08 Terminology. The specific terms of art that are defined in various
provisions of this Agreement shall apply throughout this Agreement (including
without limitation each Schedule hereto), unless expressly indicated otherwise.
In addition, the following terms and phrases shall have the meanings set forth
for purposes of this Agreement (including such Schedule):
(a) The term "business day" shall mean any day other than a Saturday, Sunday, or
a day on which CNB is closed in accordance with the laws of the State of Ohio or
the United States of America. Any action, notice, or right which is to be taken
or given or which is to be exercised or lapse on or by a given date which is not
a business day may be taken, given, or exercised, and shall not lapse, until the
next business day following.
(b) The term "affiliate" shall mean, with respect to any person, any other
person directly or indirectly controlling, controlled by or under common control
with such person.
(c) The term "Permitted Exceptions" shall mean, with respect to the Leased Real
Estate, (i) those five standard exceptions appearing as Schedule B items
<PAGE>
in a standard ALTA leasehold title insurance policy, and any other exceptions,
restrictions, easements, rights of way, and encumbrances referenced in the Title
Commitment delivered by BANK ONE to CNB as indicated in Section 2.01 (c) of this
Agreement; (ii) statutory liens for current taxes or assessments not yet due, or
if due not yet delinquent, or the validity of which is being contested in good
faith by appropriate proceedings; (iii) such other liens, imperfections in
title, charges, easements, restrictions, and encumbrances which, individually
and in the aggregate, do not materially detract from the value of, or materially
interfere with the present use of, any property s ubject thereto or affected
thereby; and (iv) such other exceptions as are approved by CNB in writing.
(d) The term "person" shall mean any individual, corporation partnership,
limited liability company, association, trust, or other entity, whether
business, personal, or otherwise.
(e) Unless expressly indicated otherwise in a particular context, the terms
"herein," "hereunder," "hereto," "hereof," and similar references refer to this
Agreement in its entirety and not to specific articles, sections, schedules, or
subsections of this Agreement. Unless expressly indicated otherwise in a
particular context, references in this Agreement to enumerated articles,
sections, and subsections refer to designated portions of this Agreement (but do
not refer to portions of any Schedule unless such Schedule is specifically
referenced) and do not refer to any other document.
(f) The term "subsidiary" shall mean a corporation, partnership, limited
liability company, joint venture, or other business organization more than 50%
of the voting securities or interests in which are beneficially owned or
controlled by the indicated parent of such entity.
10.09 Flexible Structure. References in this Agreement to federal or state laws
or regulations, jurisdictions, or chartering or regulatory authorities shall be
interpreted broadly to allow maximum flexibility in consummating the
transactions contemplated hereby in light of changing business, economic, and
regulatory conditions. Without limiting the foregoing, in the event BANK ONE and
CNB agree in writing to alter the legal structure of the Acquisition
contemplated by this Agreement references in this Agreement to such laws,
regulations, jurisdictions, and authorities shall be deemed to be altered to
reflect the laws, regulations, jurisdictions, and authorities that are
applicable in light of such change.
10.10 Press Releases. BANK ONE and CNB shall approve the form and substance of
any press release of any matters relating to this Agreement issued by the other.
<PAGE>
10.11 Entire Agreement. This Agreement supersedes any and all oral or written
agreements and understandings heretofore made relating to the subject matter
hereof and contains the entire agreement of the parties relating to the subject
matter hereof All schedules, exhibits, and appendices to this Agreement are
incorporated into this Agreement by reference and made a part hereof.
10.12 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Ohio and the National Banking Laws of
the United States.
10.13 Counterparts. This Agreement may be executed in several counter parts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
10.14 Tax Matters. CNB and BANK ONE agree that they will file applicable tax
returns and other related schedules and documents based on the allocations in
this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized, all as of the
date first above written.
Bank One, Steubenville,
National Association
ATTEST:
/s/ David A. Black By: /s/ William D. Wolter
President & CEO
Columbus National Bank
ATTEST:
/s/ Jeffrey A. Baran By: /s/ Jeremy C. McCamic
Chairman of American Bancorporation
and Authorized Signator
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