Filed pursuant to Rule 424[(b)(3)][(c)]
File No. 333-3095
PROSPECTUS SUPPLEMENT
TO PROSPECTUS DATED MAY 14, 1996
OLD NATIONAL BANCORP
This Prospectus Supplement to the Prospectus dated May 14, 1996,
SEC File No. 333-3095, (the "Prospectus") covers 40,298.507 of no
par value common stock (the "Transaction Shares") of Old National
Bancorp (the "Company") and should be read together with the
Prospectus. This Prospectus Supplement and the Prospectus relate
to the Transaction Shares being offered to the shareholders of
Central Insurance ("Target") in connection with the proposed
affiliation of the Company and Target pursuant to an exchange
(the "Share Exchange") of each issued and outstanding shares of
common stock of Target for such number of shares of Company's
Common Stock equal to the quotient arrived at by dividing (i)
One Million Three Hundred Fifty Thousand and no/100 Dollars
($1,350,000.00) by (ii) the closing price of Old National's
Common Stock as quoted on NASDAQ on the closing date of the Share
Exchange.
The Company and each of the shareholders of Target have entered
into a Share Exchange Agreement dated May 6, 1996 (the
"Agreement"), according to which the share exchange will be
consummated. Consummation of the share exchange contemplated by
the Agreement is conditioned upon all shareholders of Target
exchanging their shares of common stock of Target for the
Transaction Shares in accordance with the Agreement and, if
necessary, approval by the Board of Directors and shareholders of
Target.
ALL CAPITALIZED TERMS USED IN THIS PROSPECTUS SUPPLEMENT AND NOT
OTHERWISE DEFINED HEREIN SHALL HAVE THE SAME MEANING ASCRIBED TO
THEM IN THE PROSPECTUS.
ALL INFORMATION CONTAINED IN THIS PROSPECTUS SUPPLEMENT WITH
RESPECT TO TARGET HAS BEEN SUPPLIED BY TARGET WITHOUT ANY
INDEPENDENT VERIFICATION OF SUCH INFORMATION BY THE COMPANY.
THIS PROSPECTUS SUPPLEMENT SHOULD BE READ TOGETHER WITH THE
PROSPECTUS.
The Date of this Prospectus Supplement is May 31, 1996.
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PROPOSED TRANSACTION
The following discussion of the proposed affiliation between the
Company and Target sets forth certain aspects of the affiliation
but does not purport to be a complete description of the terms
and conditions of the Agreement and is qualified in its entirety
by reference to the Agreement, which is attached to this
Prospectus Supplement as Appendix A and is incorporated herein by
reference.
Description of the Share Exchange and Consideration
Under the terms of the Agreement, Target will affiliate with the
Company through an exchange of all of the issued and outstanding
shares of common stock of Target for such number of shares of
Company's Common Stock equal to the quotient arrived at by
dividing (i) One Million Three Hundred Fifty Thousand and
no/100 Dollars ($1,350,000.00) by (ii) the closing price of
Company's Common Stock as quoted on NASDAQ on the closing date of
the Share Exchange. In connection with the Share Exchange, the
Board of Directors of the Company has authorized the issuance of
the Transaction Shares and, pursuant to the Agreement, the
Company will issue 40,298.507 of the Shares to its wholly-owned
subsidiary, United Southwest Bank. Upon consummation of the
Share Exchange, United Southwest Bank will exchange such shares
of the Company for all of the issued and outstanding shares of
common stock of Target.
Under the terms of the Agreement, shareholders of record of
Target on the date of consummation of the Share Exchange will be
entitled to receive such number of shares of Company's Common
Stock equal to the quotient arrived at by dividing (i) One
Million Three Hundred Fifty Thousand and no/100 Dollars
($1,350,000.00) by (ii) the closing price of Company's Common
Stock as quoted on NASDAQ on the closing date of the Share
Exchange.
Conditions to Consummation
Consummation of the Share Exchange is conditioned upon the
exchange of all of the issued and outstanding shares of common
stock of Target for shares of the Company and, if required by
law or the Articles of Incorporation or By-Laws of Target, the
approval of the Board of Directors and shareholders of Target, as
well as certain other conditions set forth in the Agreement.
Resale of the Shares by Affiliates of Target
No restrictions on the sale or transfer of the Transaction Shares
issued pursuant to the Share Exchange will be imposed solely as a
result of the Share Exchange, other than restrictions on the
transfer of such shares issued to any shareholder of Target who
may be deemed to be an "affiliate" of Target under the federal
securities laws. Directors, executive officers and 10%
shareholders are generally deemed to be affiliates for securities
law purposes.
Accordingly, an affiliate of Target may not (i) sell, pledge,
transfer, dispose of or otherwise reduce the affiliate's market
risk with respect to the shares of common stock of Target
directly or indirectly owned or held by such person during the
thirty (30) day period prior to the consummation of the Share
Exchange, or (ii) sell, pledge, transfer or otherwise dispose of
or reduce the affiliate's market risk with respect to the
Transaction Shares to be received by such person pursuant to the
Agreement (A) until such time as financial results covering at
least thirty (30) days of combined operations of the Company and
Target have been published within the meaning of Section 201.01
of the Commission's Codification of Financial Reporting Policies
and (B) unless done pursuant to an effective of registration
statement under the Securities Act or pursuant to an exemption
from the registration requirements under the Securities Act. The
certificates representing the Transaction Shares issued to
affiliates of Target in the Share Exchange may contain a legend
indicating these resale restrictions.
This is only a general statement of certain restrictions
regarding the sale or transfer of the Transaction Shares to be
issued in the Share Exchange. Therefore, those shareholders of
Target who may be deemed to be affiliates of Target should
consult with their legal counsel regarding the resale
restrictions that may apply to them.
Accounting Treatment for the Affiliation
It is anticipated that the transaction will be accounted for as a
"pooling-of-interest" transaction. Under this method of
accounting, shareholders of the Company and Target will be deemed
to have combined their existing voting common stock interests.
Management, Personnel and Operations after the Affiliation
Upon consummation of the Share Exchange, Target will become a
wholly-owned subsidiary of United Southwest Bank. United
Southwest Bank is a wholly-owned subsidiary of the Company. The
directors and officers of Target will resign effective upon the
consummation of the Share Exchange and, following the
consummation date, United Southwest Bank will elect the directors
and officers of Target.
It is the present intention of the Company that all employees of
Target, upon consummation of the Share Exchange, will continue as
employees-at-will of Target following the consummation. Neither
the Agreement nor the Prospectus or Prospectus Supplement will
create any employment agreement, commitment or understanding
with any employees of Target, create any agreement, commitment or
understanding with respect to employee benefits for such
employees, or prohibit or restrict the Company or its
subsidiaries from terminating any employees of Target or changing
any of their duties or responsibilities.
Interests of Certain Persons in the Affiliation
Monty Montgomery, one of the shareholders of Target will enter
into an Employment Agreement with a subsidiary of the Company
following consummation of the Share Exchange.
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FEDERAL INCOME TAX CONSEQUENCES
The Company anticipates that the Share Exchange will constitute a
tax-free reorganization under the Internal Revenue Code of 1986,
as amended, to each party to the Agreement, except with respect
to cash received by shareholders of Target for fractional share
interests of the Transaction Shares received in the Share
Exchange. As a result, shareholders of Target who receive solely
the Transaction Shares in exchange for all of their shares of
common stock of Target actually owned by them will not recognize
any gain or loss from the Share Exchange for federal income tax
purposes. However, a shareholder of Target who receives cash in
lieu of a fractional share interest in the Transaction Shares
will be treated as having received such fraction of a Transaction
Share and then as having received cash in redemption of the
fractional share interest, subject to the provisions of Section
302 of the Internal Revenue Code.
The federal income tax discussion set forth above has not been
verified with the Internal Revenue Service, is included for
general information only and is based upon the federal Internal
Revenue Code as in effect on the date of this Prospectus
Supplement without consideration of any state laws or the
particular facts or circumstances of any shareholder of Target.
In addition, the Company has not obtained an opinion of counsel
with respect to any tax matters relating to the Share Exchange.
Shareholders of Target are urged to consult with their respective
tax advisor with respect to all tax consequences of the Share
Exchange to them, including the effect of federal, state and
local tax laws and any other tax consequences.
CERTAIN INFORMATION REGARDING TARGET
Ownership of Common Stock of Target
The following table sets forth, as of the date of this Prospectus
Supplement, certain information about each director, executive
officer and holder of more than 5% of the outstanding shares of
common stock of Target. The number of shares shown as being
beneficially owned are those over which the director, executive
officer or 5% shareholder has either sole or shared voting or
investment power. The percentage of outstanding shares is based
upon 30 shares of common stock of Target outstanding as of the
date of this Prospectus Supplement.
Number of Shares Percent of
Name Beneficially Owned Outstanding Shares
Charlene Cox 5 16-2/3
Monty Montgomery 20 66-2/3
Rick Sharp 5 16-2/3
Trading Market and Share Prices
There is no established public trading market for shares of
common stock of Target and no shares have been traded during the
past ten years. The outstanding shares of common stock of Target
have been owned by Charlene Cox, Monty Montgomery and Rick Sharp
for more than ten years. Accordingly, the Company has been
advised by Target that there is no information available as to
prices relating to shares of common stock of Target.
The following table sets forth the per share cash dividends paid
on shares of common stock of Target since January 1, 1993:
Year Amount of Dividend
1993 $0
1994 $0
1995 $0
1996 $0
Description of Capital Stock of Target
The rights of the shareholders of Target are governed by the laws
of the State of Indiana, the state in which Target is
incorporated, and by Target's Articles of Incorporation and By-Laws, as
amended. The following summary of the Target's common
stock includes all material features of such stock but does not
purport to be complete and is qualified in its entirety by
reference to Target's Articles of Incorporation and By-Laws. The
following summary should be read in conjunction with the
information set forth in the Prospectus under the caption
"Description of Capital Stock of The Company."
Authorized But Unissued Shares.
Target's Articles of Incorporation authorize the issuance of
1,000 shares of common stock, of which 30 shares are outstanding
as of the date of this Prospectus Supplement. The remaining
authorized but unissued shares of Target's common stock may be
issued upon authorization of the Board of Directors of Target
without prior shareholder approval.
Preemptive Rights.
As permitted by Indiana law, Target's Articles of Incorporation
do not provide for preemptive rights to subscribe for any new or
additional shares of common stock or other securities of Target.
Dividend Rights.
The holders of Target's common stock are entitled to dividends
and other distributions when, as and if declared by Target's
Boards of Directors out of funds legally available therefor. A
dividend may not be paid if, after giving it effect, (i) Target
would not be able to pay its debts as they become due in the
usual course of business, or (ii) Target's total assets would be
less than the sum of its total liabilities plus, unless Target's
Articles of Incorporation permitted otherwise, the amount that
would be needed to satisfy the preferential rights upon
dissolution of shareholders whose preferential rights are
superior to those receiving the dividend if Target were to be
dissolved at the time of the dividend.
The amount of dividends, if any, that may be declared by Target
depends upon many factors, including, without limitation, future
earnings, capital requirements, business conditions, the
discretion of Target's Board of Directors and other factors that
may be appropriate in determining dividend policies.
Voting Rights.
The holders of the outstanding shares of Target's common stock
are entitled to one vote per share on all matters presented for
shareholder vote. Shareholders of Target do not have cumulative
voting rights in the election of directors.
Indiana law generally requires that mergers, consolidations,
sales, leases, exchanges or other dispositions of all or
substantially all of the assets of a corporation be approved by
the affirmative vote of a majority of the issued and outstanding
shares entitled to vote at the shareholders meeting, subject in
each case to provisions in the corporation's articles of
incorporation requiring a higher percentage vote for certain
transactions.
Indiana law also requires shareholder approval for most
amendments to a corporation's articles of incorporation, as well
as certain other corporate matters, by a majority vote of
shareholders at a meeting at which a quorum is present (and, in
certain cases, a majority of all shares held by any voting group
entitled to vote), unless the corporation's Articles of
Incorporation require a greater percentage vote.
Target's Articles of Incorporation do not require a super-majority vote on
any matters presented to shareholders.
Dissenters' Rights.
The holders of stock of Indiana business corporations possess
dissenters' rights in connection with certain mergers and other
significant corporate actions. Under Indiana law, a shareholder
is entitled to dissent from and obtain payment of the fair value
of the shareholder's shares in the event of (i) consummation of a
plan of merger, if shareholder approval is required and the
shareholder is entitled to vote thereon, (ii) consummation of a
plan of share exchange by which the shareholder's shares will be
acquired, if the shareholder is entitled to vote thereon,
(ii) consummation of a sale or exchange of all, or substantially
all, the property of the corporation other than in the usual
course of business, if the shareholder is entitled to vote
thereon, (iv) approval of a control share acquisition under
Indiana law, and (v) any corporate action taken pursuant to a
shareholder vote to the extent the articles of incorporation, by-laws
or a resolution of the Board of Directors provides that
voting or non-voting shareholders are entitled to dissent and
obtain payment for their shares.
The dissenters' rights provisions described above do not apply,
however, to the holders of shares of any class or series with
respect to a merger, share exchange or sale or exchange of
property if the shares of that class or series were registered on
a United States securities exchange registered under the Exchange
Act or traded on the NASDAQ National Market System or a similar
market. Because the shares of Target's common stock are not
registered on an exchange or traded on the NASDAQ National Market
System or a similar market, shareholders have the right to assert
dissenters' rights in the transactions listed above. Because of
the structure of the Share Exchange, shareholders of Target are
not entitled to assert dissenters' rights under Indiana law.
Liquidation Rights.
In the event of any liquidation or dissolution of Target, the
holders of shares of common stock are entitled to receive pro
rata with respect to the number of shares held by them any assets
distributable to shareholders, subject to the payment of Target's
liabilities and any rights of creditors and holders of shares of
Target's preferred stock then outstanding.
Assessment and Redemption.
The Common Stock of Target is not liable to further assessment.
Under Indiana law, Target may redeem or acquire shares of Common
Stock with funds legally available therefor, and shares so
acquired constitute authorized but unissued shares. Target may
not redeem or acquire shares of its common stock if, after giving
such redemption or acquisition effect, Target would not be able
to pay its debts as they become due in the usual course of
business, or Target's total assets would be less than the sum of
its total liabilities plus, unless Target's Articles of
Incorporation permitted otherwise, the amount that would be
needed to satisfy the preferential rights upon dissolution of
shareholders whose preferential rights are superior to those
whose stock is being redeemed or acquired if Target were to be
dissolved at the time of the redemption or acquisition.
