UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. )*
ANB Corporation
- -------------------------------------------------------------------------------
(Name of Issuer)
Common Stock
- -------------------------------------------------------------------------------
(Title of Class of Securities)
001926104
- -------------------------------------------------------------------------------
(CUSIP Number)
Old National Bancorp, ATTN: Jeffrey L. Knight, Secretary and General Counsel
420 Main Street, P.O. Box 718, Evansville, Indiana 47708 (812) 464-1363
- -------------------------------------------------------------------------------
(Name, Address and Telephone Number of Person Authorized to Receive
Notices and Communications)
July 29, 1999
- -------------------------------------------------------------------------------
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the
following box [ ].
Check the following box if a fee is being paid with the statement [ ]. (A
fee is not required only if the reporting person: (1) has a previous
statement on file reporting beneficial ownership of more than five
percent of the class of securities described in Item 1; and (2) has
filed no amendment subsequent thereto reporting beneficial ownership of
five percent or less of such class.) (See Rule 13d-7.)
NOTE: Six copies of this statement, including all exhibits, should be
filed with the Commission. See Rule 13d-1(a) for other parties to whom
copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class
of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
the Act (however, see the Notes).
<PAGE>
SCHEDULE 13D
CUSIP NO. 001926104 PAGE 2 OF 2 PAGES
---------
- ------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
Old National Bancorp 35-1539838
- ------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(a) [_]
(b) [_]
- ------------------------------------------------------------------------------
3 SEC USE ONLY
- ------------------------------------------------------------------------------
4 SOURCE OF FUNDS*
WC
- ------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or 2(e) [_]
- ------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Indiana
- ------------------------------------------------------------------------------
7 SOLE VOTING POWER
NUMBER OF
0
SHARES -----------------------------------------------------------
8 SHARED VOTING POWER
BENEFICIALLY
OWNED BY 0
-----------------------------------------------------------
EACH 9 SOLE DISPOSITIVE POWER
REPORTING
0
PERSON -----------------------------------------------------------
10 SHARED DISPOSITIVE POWER
WITH
0
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
0*
- ------------------------------------------------------------------------------
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*
[_]
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0
- ------------------------------------------------------------------------------
14 TYPE OF REPORTING PERSON*
CO
- ------------------------------------------------------------------------------
*SEE INSTRUCTIONS BEFORE FILLING OUT!
* Pursuant to Rule 13d-4, Old National Bancorp disclaims beneficial ownership of
the shares of Common Stock of ANB Corporation which are the subject of a Stock
Option Agreement dated as of July 29, 1999, which shares represent Nineteen and
nine-tenths Percent (19.9%) of the Common Stock of ANB Corporation (per Rule
13d-3(d)(1)(i)) deemed outstanding for this purpose.
<PAGE>
INFORMATION ATTACHMENT TO SCHEDULE 13D
Item 1. Security and Issuer
Common Stock, $1.00 par value, of ANB Corporation ("ANB Common Stock").
120 West Charles Street
Muncie, Indiana 47305
Item 2. Identity and Background
(a) Name: Old National Bancorp
(b) Residence or Business Address: 420 Main Street
P.O. Box 718
Evansville, Indiana 47705
(c) Corporation
(d) No convictions to report.
(e) No civil proceedings to report.
(f) Incorporated under the laws of the State of Indiana, principal
offices located in Evansville, Indiana.
Item 3. Source and Amount of Funds or Other Consideration
Old National Bancorp would use its working capital funds. See also the cash
option provision in the Stock Option Agreement which is attached hereto as
Exhibit 1.1.
Item 4. Purpose of Transaction
Old National Bancorp ("ONB") and ANB Corporation ("ANB") entered into an
Agreement of Affiliation and Merger dated July 29, 1999 (the "Merger Agreement")
attached hereto as Exhibit 1.2. As a condition to ONB's entering into the Merger
Agreement, and in consideration therefor, ANB entered into a Stock Option
Agreement dated as of July 29, 1999 (the "Stock Option Agreement") (attached
hereto as Exhibit 1.1). The Stock Option Agreement is intended to increase the
likelihood that the merger will be consummated by making it more difficult and
more expensive for another party to obtain control of or acquire ANB. The Stock
Option Agreement grants to ONB an irrevocable option (the "Option") to purchase
up to such number of shares of ANB Common Stock, which will, immediately
following the exercise of the Option in its entirety, aggregate Nineteen and
nine-tenths Percent (19.9%) of the issued and outstanding shares of ANB Common
Stock (such issued and outstanding shares shall for purposes of the Stock Option
Agreement be deemed to include all shares that are issuable pursuant to the
exercise of stock options granted by ANB) at a price per share equal to $27.70
("Purchase Price"). The Stock Option Agreement provides that ONB may exercise
the Option, in whole or in part, if a condition to exercise of the Option (as
set forth in the Stock Option Agreement) shall have occurred prior to the
termination of the Stock Option Agreement and the Option (as set forth in the
Stock Option Agreement).
(a) ONB has no other plan to acquire any additional shares of ANB
Common Stock, except as provided by the Stock Option Agreement
or the Merger Agreement.
<PAGE>
(b) ONB and ANB have entered into the Merger Agreement, which is
attached hereto as Exhibit 1.2. The Merger Agreement calls for
ANB to merge into ONB.
(c) ONB has no plans to sell or transfer a material amount of
assets of ANB or any of ANB's subsidiaries.
(d) ONB has no plan to make any changes in the present Board of
Directors or management of ANB except that which would result
from the consummation of the merger of ANB into ONB as
provided by the Merger Agreement (See, Exhibit 1.2).
(e) ONB has no plans to make any material change in the present
capitalization of ANB except that which would result from the
consummation of the merger of ANB into ONB as provided by the
Merger Agreement (See Exhibit 1.2).
(f) ONB has no plans to make any material changes in ANB's
business or corporate structure except those which would
result from the consummation of the merger of ANB into ONB as
provided by the Merger Agreement (See Exhibit 1.2).
(g) It is anticipated that ANB will merge into ONB with ONB being
the surviving corporation. (See Merger Agreement, Exhibit
1.2). At the effective time of the merger, ONB's Articles of
Incorporation and By-laws will continue in effect as the
Articles of Incorporation and By-Laws of the surviving
corporation. Also see introduction to this Item 4.
(h) At the effective time of the merger of ANB into ONB, ANB
Common Stock will be converted into the right to receive one
and twenty-five one hundredths (1.25) shares of ONB common
stock ("Exchange Ratio"), except for fractional shares which
will be exchanged for cash in accordance with the Merger
Agreement. Accordingly, following the effective time of the
merger of ANB into ONB, ANB Common Stock will not be
authorized to be quoted in an inter-dealer quotation system of
a registered national securities association or listed on a
national securities exchange.
(i) See responses to Items 4(b), (g) and (h) above.
(j) Reference is made to the Merger Agreement in Exhibit 1.2.
Item 5. Interest in Securities of the Issuer
(a)-(b) Currently, ONB beneficially owns no shares of ANB Common Stock
representing zero percent (0%) of the outstanding shares of
ANB Common Stock. ONB has no voting or dispositive power over
any shares of ANB Common Stock. Pursuant to the Stock Option
Agreement, ONB has the Option to purchase up to such number of
shares of ANB Common Stock, which will, immediately following
the exercise of the Option in its entirety aggregate Nineteen
and nine-tenths Percent (19.9%) of the issued and outstanding
shares of ANB Common Stock (such issued and outstanding shall
for purposes of the Stock Option Agreement be deemed to
include all shares
<PAGE>
that are issuable pursuant to the exercise of Stock Options
granted by ANB) at the Purchase Price. The Stock Option
Agreement provides that ONB may exercise the Option, in whole
or in part, if a condition to exercise of the Option (as set
forth in the Stock Option Agreement) shall have occurred prior
to the termination of the Stock Option Agreement or the
Option) as set forth in the Stock Option Agreement). See the
Stock Option Agreement, Exhibit 1.1. ONB hereby specifically
disclaims any current beneficial ownership of the shares of
ANB Common Stock which are subject to the Option. ONB
beneficially owns no other shares of ANB Common Stock. ONB
would have sole power to vote and to dispose of shares of ANB
Common Stock issued to it by ANB upon any exercise of the
Option.
(c) The Stock Option Agreement was entered into on July 29, 1999.
(d) Not Applicable.
(e) Not Applicable.
Item 6. Contracts, Arrangements, Understandings or Relationships with Respect
to Securities of the Issuer
See foregoing Responses and the Option Agreement attached hereto as Exhibit 1.1.
Item 7. Material to be Filed as Exhibits
Exhibit 1.1 -- Stock Option Agreement
Exhibit 1.2 -- Agreement of Affiliation and Merger
Signature
After reasonable inquiry and to the best of my knowledge and belief, I
certify on behalf of ONB that the information set forth in this statement is
true, complete and correct.
August 6, 1999
-------------- ----------------------------------
Date Signature
/s/ Ronald W. Seib
----------------------------------
Ronald W. Seib, Vice President and
Corporate Controller
IM-258349-1
<PAGE>
Exhibit 1.1
Exhibit A
STOCK OPTION AGREEMENT
THIS OPTION HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE SOLD
OR OTHERWISE DISPOSED OF EXCEPT PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER SUCH ACT AND APPLICABLE STATE
SECURITIES LAWS OR PURSUANT TO AN APPLICABLE EXEMPTION
FROM THE REGISTRATION REQUIREMENTS OF SUCH ACT
AND SUCH LAWS.
THIS STOCK OPTION AGREEMENT ("Agreement"), is made and entered into as
of the 29th day of July, 1999, by and between OLD NATIONAL BANCORP ("ONB"), an
Indiana corporation, and ANB CORPORATION ("ANB"), an Indiana corporation,
W I T N E S S E T H:
WHEREAS, ONB and ANB have entered into an Agreement of Affiliation and
Merger ("Merger Agreement") dated of even date herewith contemporaneously with
the execution of this Agreement. The Merger Agreement provides for, among other
items, the conversion of each issued and outstanding share of common stock of
ANB at the Effective Time (as defined in the Merger Agreement) into the right to
receive one and twenty-five one-hundredths (1.25) shares of common stock of ONB,
as may be adjusted under the Agreement, from ONB; and
WHEREAS, ONB has paid to ANB the sum of One Thousand Dollars ($1,000)
in consideration for the grant of the Option (as hereinafter defined) by ANB to
ONB, which has been granted to further induce ONB to enter into the Merger
Agreement; and
WHEREAS, ONB has advised ANB that the grant by ANB of the Option
pursuant to this Agreement is a condition to ONB agreeing to the terms of the
Merger Agreement.
NOW, THEREFORE, in consideration of the foregoing premises and the cash
payment referenced therein, the receipt of which is hereby acknowledged, the
mutual covenants and obligations set forth herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
Section 1. Grant of Option.
ANB hereby grants to ONB an irrevocable option (the "Option") to
purchase up to 1,083,753 shares ("Option Shares") of common stock of ANB (the
"Common Stock") at a price per Option Share of $27.70 (the "Purchase Price");
provided, however, that this Agreement and the Option shall automatically expire
and be of no further force or effect (i) at the Effective Time (as defined in
the
- 1 -
<PAGE>
Exhibit A
Merger Agreement); (ii) 12 months after the first occurrence of an event set
forth in Section 3 hereof (an "Exercise Event"); and (iii) at the termination of
the Merger Agreement in accordance with the terms thereof prior to the
occurrence of an Exercise Event (provided that if the Merger Agreement is
terminated by ONB pursuant to Section 9.01 of the Merger Agreement, then the
Option shall expire 12 months from the date of termination of the Merger
Agreement and provided further that if ONB is in willful and material breach of
any representation, warranty or covenant in the Merger Agreement then the Option
shall expire immediately).
Section 2. Exercise of Option. Subject to Sections 1 and 3 hereof, the
Option may be exercised by ONB, in whole or in part, at any time, and from time
to time, prior to its expiration pursuant to Section 1 hereof. In the event ONB
wishes to exercise the Option, ONB shall deliver a written notice(s) to ANB
specifying the total number of Option Shares that it will purchase and a place
and date not earlier than ten (10) days and not later than sixty (60) days from
the date of delivery of such notice for the closing ("Closing") of such
purchase; provided, however, that if the approval of any governmental authority
required for purchasing the Option Shares shall not have been obtained prior to
the Closing, the date of the Closing shall be postponed to a date five (5)
business days following receipt of all such required governmental approvals;
provided, further, that ONB, at any time prior to the Closing, may rescind such
notice of intent to purchase the Option Shares and shall not thereafter be
obligated to purchase any or all of the Option Shares.
Section 3. Conditions to Exercise of Option. ONB may exercise the
Option only if any of the following events occurs or has occurred without the
prior written consent of ONB:
(a) The acquisition, following the date of this Agreement, by any
entity, person or group, other than ONB, of beneficial ownership of fifteen
percent (15%) or more (in the aggregate) of the shares of ANB Common Stock or
the capital stock of any Subsidiary (as defined in the Merger Agreement) (for
purposes of this Section 3, the terms "group" and "beneficial ownership" shall
have the same meanings ascribed to them in Section 13(d) of the Securities
Exchange Act of 1934, as amended, and the regulations promulgated thereunder),
but only if (i) such entity, person or group has publicly announced its
opposition to the Merger Agreement or the Merger (as defined in the Merger
Agreement) or its intention not to vote the common stock beneficially owned by
the entity, person or group in favor of the Merger Agreement or the Merger and
has solicited or indicated its intention to solicit proxies or votes against the
Merger Agreement or the Merger; or (ii) such entity, person or group has
proposed, indicated an intention to propose, or entered into an agreement to
effect a merger, consolidation, share exchange or other combination with ANB or
any Subsidiary.
(b) The acceptance by ANB or any Subsidiary of any proposal (however
conditional or future) of, or the execution by ANB or any Subsidiary of any
letter of intent, agreement in principle or other agreement (whether binding or
non-binding) with, any entity, person or group, other than ONB, to (i) acquire
ANB by merger, consolidation, share exchange, combination, purchase of all or
substantially all of ANB's or any of the Subsidiaries' assets or capital stock
or any other similar transaction, or (ii) make a tender or exchange offer for
any shares of ANB Common Stock or the capital stock of any Subsidiary.
- 2 -
<PAGE>
Exhibit A
Section 4. Payment and Delivery of Certificate(s). At any Closing
hereunder (a) ONB shall pay to ANB the aggregate purchase price for the Option
Shares so purchased by delivery of a cashier's or certified check or other
immediately available funds payable to the order of ANB, and (b) ANB shall
promptly thereafter issue the Option Shares in compliance with all applicable
laws and regulations and deliver to ONB a certificate or certificates
representing Option Shares as purchased, free and clear of all liens, claims,
pledges, security interests, charges and rights of any third parties.
Section 5. Representations, Warranties and Covenants of ANB. ANB hereby
represents, warrants and covenants to ONB as follows:
(a) This Agreement and the consummation by ANB of the transactions
contemplated hereby have been duly authorized and approved by all necessary
corporate action on the part of ANB, have been duly executed and delivered by an
authorized officer of ANB and constitute a valid and binding obligation of ANB.
ANB is an Indiana corporation duly organized and validly existing under the laws
of the State of Indiana and has all requisite corporate power and authority to
execute and deliver this Agreement and to consummate the transactions
contemplated hereby.
(c) ANB has taken all necessary corporate and other action to authorize
and reserve and to permit it to issue the Option Shares pursuant hereto. At all
times from the date hereof until such time as the obligation to deliver the
Option Shares hereunder terminates, ANB will have reserved for issuance upon
exercise of the Option by ONB sufficient shares of common stock of ANB, all of
which, upon issuance pursuant hereto, shall be duly authorized, validly issued,
fully paid and nonassessable, shall be free and clear of all liens, claims,
pledges, security interests, charges and rights of any third parties.
(d) Neither the execution and delivery of this Agreement nor the
consummation of the transactions contemplated hereby will violate or result in
any violation of or be in conflict with, result in acceleration or termination
of or constitute a default under any term or provision of the Articles of
Incorporation or By-Laws of ANB or of any agreement, note, bond, indenture,
instrument, obligation, judgment, decree, order, binding upon or applicable to
ANB or any Subsidiary or any of their respective properties or assets.
(e) Upon any exercise of the Option, whether in whole or in part, the
Option Shares (i) shall be entitled to vote on all matters to come before the
shareholders of ANB at any meeting thereof, (ii) shall be entitled to the same
preferences, limitations and relative voting and other rights (including
dividend and distribution rights) as possessed by all other holders of ANB
Common Stock.
(f) The representations and warranties of ANB contained herein are
true, accurate and complete on and as of the date hereof in all material
respects, shall survive the execution of this Agreement and shall continue to be
true, accurate and complete during the period that the Option
- 3 -
<PAGE>
Exhibit A
may be exercised by ONB. ANB shall comply with the covenants applicable to it
contained herein from the date of this Agreement through and until such time as
the Option terminates.
Section 6. Representations and Warranties of ONB. ONB hereby
represents and warrants to ANB as follows:
(a) This Agreement and the consummation by ONB of the transactions
contemplated hereby have been duly authorized and approved by all necessary
corporate action on the part of ONB, have been duly executed and delivered by an
authorized officer of ONB and constitute a valid and binding obligation of ONB.
ONB is a corporation duly organized and validly existing under the laws of the
State of Indiana and has all requisite corporate power and authority to execute
and deliver this Agreement and to consummate the transactions contemplated
hereby.
(b) ONB is purchasing the Option, and any shares of common stock of ANB
issued upon exercise of the Option, for its own account and not with a view to
the public distribution thereof and will not sell, assign or transfer the Option
or any such shares of common stock issued to ONB upon exercise of the Option
except in compliance with all applicable laws and regulations and a legend to
such effect shall be noted on the certificate or certificates representing the
Option Shares issued upon exercise of the Option and stock transfer restrictions
may be given will respond thereto any transfer agent.
(c) The representations and warranties of ONB contained herein are
true, accurate and complete on and as of the date hereof, shall survive the
execution of this Agreement and shall continue to be true, accurate and complete
during the period that the Option may be exercised by ONB.
Section 7. Certain Rights.
(a) In the event that ONB exercises the Option and desires to sell any
of the Option Shares, and so requests in writing, ANB agrees to use its
reasonable best efforts to assist ONB (at ONB's expense) in complying with all
applicable federal laws relating to such sale and any applicable state laws
(including, without limitation, providing ONB with appropriate information
relating to ANB to be included in no more than one registration statement filed
by ONB), not later than thirty (30) days after ONB requests such assistance,
with respect to that number of the Option Shares beneficially owned by ONB for
which ONB requests such assistance, unless, in the opinion of counsel to ANB
addressed to ONB, which opinion shall be in form and substance reasonably
satisfactory to ONB and its counsel, a registration statement is not required
for the proposed sale or distribution of such Option Shares. All registration
statements and all actions relating to compliance with federal and state law
pursuant to this Section 7(a) shall be completed at ONB's expense except for any
fees and disbursements of counsel for ANB, which shall be paid by ANB.
(b) In addition to the foregoing rights, if at any time after exercise
by ONB of the Option for all of the Option Shares, ANB proposes to offer for
sale for cash in an offering to the general
- 4 -
<PAGE>
Exhibit A
public any of its equity securities, ANB at such time will provide written
notice to ONB of its intention to do so. Upon written request of ONB, given
within fifteen (15) days after the providing of any such notice to ONB by ANB
(which request shall state the intended method of disposition of such shares),
ANB shall cause that number of the Option Shares as to which ONB identifies in
such request to be included in ANB's registration statement in compliance with
all applicable federal and state securities laws. Such Option Shares so
identified by ONB shall be included in ANB's registration statement proposed to
be filed by ANB, unless, in the opinion of counsel to ANB addressed to ONB,
which opinion shall be in form and substance reasonably satisfactory to ONB and
its counsel, inclusion of such shares in such registration statement is not
required for any proposed sale or distribution of such Option Shares by ONB. All
registration statements and all actions relating to compliance with federal and
state law pursuant to this Section 7(b) shall be completed at ANB's expense
except for any fees and disbursements of counsel for ONB, which shall be paid by
ONB. ANB would have the right not to include such shares if in the reasonable
opinion of the underwriters to do so would adversely affect the proposed
offering by ANB.
Section 8. Adjustment Upon Changes in Capitalization. (a) In the event
of any change in, or distributions in respect of, the Common Stock by reason of
stock dividends, split-ups, mergers, recapitalizations, combinations,
subdivisions, conversions, exchanges of shares, issuance of additional shares or
the like (including any stock dividend split-up or subdivision announced prior
to the date hereof but not yet effective), the type and number of shares of
Common Stock purchasable upon exercise hereof shall be appropriately adjusted
and proper provision shall be made so that, in the event that any additional
shares of Common Stock are to be issued or otherwise become outstanding as a
result of any such change (other than pursuant to an exercise of the Option),
the number of Option Shares that remain subject to the Option shall be increased
so that, after such issuance and together with Option Shares previously issued
pursuant to the exercise of the Option (as adjusted on account of any of the
foregoing changes in the Common Stock), it equals 19.9% of the number of shares
of Common Stock then issued and outstanding. Nothing contained in this Section
8(b) or elsewhere in this Agreement shall be deemed to authorize ANB to breach
any provision of the Merger Agreement.
(b) Whenever the number of Option Shares purchasable upon exercise
hereof is adjusted as provided in this Section 8, the Purchase Price shall be
adjusted by multiplying the Purchase Price by a fraction, the numerator of which
shall be equal to the number of Option Shares purchasable prior to the
adjustment and the denominator of which shall be equal to the number of shares
purchasable after the adjustment.
Section 9. Right of Repurchase.
(a) In the event that ONB has purchased any of the Option Shares
pursuant to this Agreement, and ONB so requests in writing, ANB shall repurchase
all the Option Shares held by ONB at a price equal to the highest price paid or
to be paid by any entity, person or group referenced in Section 3 hereof for any
share of ANB Common Stock (or the aggregate consideration paid for the assets of
ANB divided by the number of shares of ANB Common Stock then outstanding), as
- 5 -
<PAGE>
Exhibit A
the case may be, multiplied by the total number of Option Shares to be redeemed
under this Section 9(a), plus interest at the rate of 8% per annum from the date
of the purchase of the Option Shares through the repurchase contemplated hereby
(the value of any such price or consideration other than cash to be determined,
in the case of consideration with a readily-ascertainable market value, on the
basis of such market value and, in the case of any other consideration, by
mutual agreement of ONB and ANB in good faith less the amount of any dividends
received or to be received on the Option Shares).
(b) In the event that (i) ONB has purchased any of the Option Shares
pursuant to this Agreement and (ii) the Merger Agreement has been duly executed
and delivered but subsequently has been terminated in accordance with the terms
thereof, then ANB shall have the right to purchase, and ONB shall be obligated
to sell to ANB, for cash, all, but not less than all, of the Option Shares
theretofore purchased by ONB pursuant to this Agreement. If ANB exercises its
right to purchase, the Option Shares so held ANB shall give written notice of
its intention to so exercise its right to ONB within fifteen (15) days after the
event giving rise to such right. The purchase price for each Option Share held
by ONB shall be a cash amount equal to the highest price paid or to be paid by
any entity, person or group referenced in Section 3 hereof for any share of ANB
Common Stock (or the aggregate consideration paid for the assets of ANB divided
by the number of shares of ANB Common Stock then outstanding), as the case may
be, multiplied by the total number of Option Shares to be redeemed under this
Section 9(b), plus interest at the rate of 8% per annum from the date of the
purchase of the Option Shares through the repurchase contemplated hereby (the
value of any such price or consideration other than cash to be determined, in
the case of consideration with a readily-ascertainable market value, on the
basis of such market value and, in the case of any other consideration, by ONB
in good faith).
(c) In lieu of exercising the Option if any of the events specified in
Section 3 hereof shall occur during the period in which ONB is entitled to
exercise the Option, ONB may, upon not less than 90 days written notice, require
ANB to pay to ONB an amount in cash equal to the difference between the highest
price paid or to be paid by any entity, person or group for any share of ANB
Common Stock (or the aggregate consideration paid for the assets of ANB or any
Subsidiary divided by the number of shares of ANB Common Stock then outstanding)
and the Purchase Price, multiplied by the total number of Option Shares to be
redeemed under this Section 9(c) (the value of any such price or consideration
other than cash to be determined, in the case of consideration with a
readily-attainable market value, on the basis of such market value and, in the
case of any other consideration, by determination by ONB in good faith). If ONB
exercises its rights under this Section 9(c), then the rights granted to ONB
under Sections 9(a) and 9(b) hereof and the rights to exercise the Option shall
terminate.
(d) The closing of any of the transactions contemplated by this Section
9 shall be made within ten (10) business days of any request made pursuant to
this Section 9. Payment for the Option Shares shall be made by ANB to ONB at the
closing by delivery of cash or immediately available funds. Any closing pursuant
to this Section 9 may be delayed to a date no later than ten (10) business days
after the receipt of any applicable regulatory clearance, and ANB shall promptly
file
- 6 -
<PAGE>
Exhibit A
any notice or application for such clearance simultaneously with such closing
this Agreement shall terminate.
Section 10. Injunction; Specific Performance. Each of the parties
hereto hereby acknowledges that the other party will suffer irreparable damage
and injury and will not have an adequate remedy at law in the event of any
breach of any of its obligations under this Agreement. Accordingly, in the event
of such a breach or of a threatened or attempted breach, in addition to all
other remedies to which each party hereto is entitled to at law, each party
shall be entitled to a temporary and permanent injunction (without the necessity
of showing any actual damage) or a decree of specific performance of the
provisions hereof, and no bond or other security shall be required in that
connection. The remedies described in this Section 10 shall not be exhaustive
and shall be in addition to all other remedies that either party may have at
law, in equity or otherwise.
Section 11. Miscellaneous.
(a) This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and assigns; provided,
however, that neither party may assign this Agreement without the prior written
consent of the other party.
(b) This Agreement may be modified, amended or supplemented only by a
written agreement executed by the parties hereto.
(c) All notices, requests and other communications hereunder shall be
in writing and shall be delivered by hand, by certified United States mail
(return receipt requested, first-class postage pre-paid) or by overnight express
receipted delivery service (i) to Old National Bancorp, at 420 Main Street,
Evansville, Indiana 47708, attention: Jeffrey L. Knight, Corporate Secretary and
General Counsel, and (ii) to ANB Corporation, at 120 W. Charles Street, Muncie,
Indiana 47305, attention: James R. Schrecongost, President.
(d) In case any one or more of the provisions contained herein shall,
for any reason, be held to be invalid, illegal or unenforceable in any respect,
such invalidity, illegality or unenforceability shall not affect any other
provision of this Agreement, but this Agreement shall be construed as if such
invalid, illegal or unenforceable provision or provisions had never been
contained herein.
(e) This Agreement may be executed in any number of counterparts, each
of which shall be an original, but all of which together shall constitute one
and the same agreement.
(f) The headings in this Agreement have been inserted solely for
convenience and ease of reference and shall not be considered in the
interpretation or construction of this Agreement.
(g) This Agreement shall be governed by and construed in accordance
with the laws of the State of Indiana without giving effect to the choice of law
principles thereof.
- 7 -
<PAGE>
Exhibit A
(h) This Agreement supersedes all other prior understandings,
commitments, representations, negotiations or agreements, whether oral or
written, between the parties hereto relating to the matters contemplated by this
Agreement and constitutes the entire agreement between the parties hereto
relating to the subject matter hereof.
(i) No waiver by any party hereto of any right or provision of this
Agreement shall be effective unless the same shall be in writing and signed by
the waiving party. The failure in one or more instances of any party to enforce
any term or provision of this Agreement or to exercise any right or remedy shall
not prohibit any subsequent enforcement or exercise thereof or constitute a
waiver of any such term, provision, right or remedy. The waiver by any party
hereto of a breach of or noncompliance with any term, covenant, restriction or
provision of this Agreement shall not operate or be construed as a continuing
waiver or as a waiver of any other or subsequent breach or noncompliance
hereunder.
* * * * * * *
- 8 -
<PAGE>
Exhibit A
IN WITNESS WHEREOF, the undersigned have executed, entered into and
delivered this Agreement as of the day and year first above written.
OLD NATIONAL BANCORP
By: /s/ Ronald B. Lankford
---------------------------------
Ronald B. Lankford, President
ATTEST:
By: /s/ Jeffrey L. Knight
-----------------------------------------
Jeffrey L. Knight, Corporate Secretary
ANB CORPORATION
By: /s/ James R. Schrecongost
---------------------------------
James R. Schrecongost, President
ATTEST:
By: /s/ James W. Convy
-----------------------------------------
James W. Convy, Secretary
IM-256482-6
- 9 -
<PAGE>
Exhibit B
UNDERTAKING AND AGREEMENT OF AFFILIATE
In connection with the affiliation of ANB Corporation ("ANB") and Old
National Bancorp ("ONB") pursuant to the merger of ANB into ONB ("Merger"), as
contemplated by that certain Agreement of Affiliation and Merger, dated
_________________, 1999 ("Agreement"), by and between ONB and ANB, the
undersigned may be an affiliate of ANB for purposes of Rule 145 under the
Securities Act of 1933, as amended ("Act"). In consideration of the issuance to
the undersigned of shares of ONB common stock in connection with the Merger and
in accordance with the terms of the Agreement, each of the undersigned hereby
undertakes, covenants and agrees that he or she: (a) shall not sell, pledge,
transfer, dispose of or otherwise reduce his or her market risk (collectively, a
"Sale") with respect to the shares of ANB common stock directly or indirectly
owned or held by the undersigned during the thirty (30) day period prior to the
effective date of the Merger; (b) shall deliver a written certificate to ONB as
of the effective date of the Merger certifying to effect that the undersigned
has complied with the terms and conditions of this Agreement; and (c) shall not
sell, pledge, transfer, dispose of or otherwise reduce his or her market risk
with respect to the shares of ONB common stock to be received by the undersigned
pursuant to the Agreement: (i) until such time as financial results covering at
least thirty (30) days of combined operations of ONB and ANB have been published
within the meaning of Section 201.01 of the Securities and Exchange Commission's
Codification of the Financial Reporting Policies; and (ii) unless any and all
Sales of such shares of ONB common stock are made in a manner and to the extent
permitted by Rule 145 under the Act or are made pursuant to an effective
registration statement under, or an exemption from the registration requirements
of, the Act.
IN WITNESS WHEREOF, the undersigned has executed this Undertaking and
Agreement of Affiliate as of this ________ day of _________________, 1999.
----------------------------------------
(Signature)
----------------------------------------
(Printed Name)
----------------------------------------
(Signature - Spouse)
----------------------------------------
(Printed Name)
MM:awc:IM-256409-9
<PAGE>
Exhibit 1.2
AGREEMENT OF AFFILIATION AND MERGER
THIS AGREEMENT OF AFFILIATION AND MERGER ("Agreement") is made and
entered into effective as of the 29th day of July, 1999, by and between OLD
NATIONAL BANCORP ("ONB") and ANB CORPORATION ("ANB").
W I T N E S S E T H:
WHEREAS, ONB is an Indiana corporation registered as a bank holding
company under the federal Bank Holding Company Act of 1956, as amended ("BHC
Act"), with its principal office located in Evansville, Vanderburgh County,
Indiana; and
WHEREAS, ANB is an Indiana corporation registered as a bank holding
company under the BHC Act, with its principal office located in Muncie, Delaware
County, Indiana; and
WHEREAS, ANB is the sole owner of all of the outstanding capital stock
of (i) American National Bank and Trust Company of Muncie, a national banking
association ("American National Bank"), (ii) Peoples Loan & Trust Bank, an
Indiana state-chartered bank ("Peoples Bank"), (iii) Farmers State Bank of Union
City, Ohio, an Ohio state-chartered bank ("Farmers State Bank") and (iv)
American National Trust and Investment Management Company, a national trust
company ("ANTIM"); and
WHEREAS, ONB and ANB seek to affiliate through a corporate
reorganization whereby ANB will merge with and into ONB and each of American
National Bank, Peoples Bank, Farmers State Bank and ANTIM will thereby become a
wholly-owned subsidiary of ONB, and ANB Financial Planning Services, Inc. ("ANB
Financial") (American National Bank, Peoples Bank, Farmers State Bank, ANTIM and
ANB Financial are herein referred to collectively as the "Subsidiaries") will
continue to be a wholly-owned subsidiary of American National Bank; and
WHEREAS, ONB and ANB intend that the Merger (as hereinafter defined)
constitute a tax-free reorganization pursuant to Section 368 of the Internal
Revenue Code of 1986, as amended ("Code"); and
WHEREAS, as a condition to, and concurrently with the execution of,
this Agreement, ONB and ANB are entering into a certain Stock Option Agreement
(the "Stock Option Agreement"), attached hereto as Exhibit A; and
WHEREAS, the Board of Directors of each of ONB and ANB has determined
that it is in the best interests of its respective corporation to consummate the
strategic business combination provided for herein and has approved this
Agreement, authorized its execution and designated this Agreement a plan of
reorganization and a plan of merger.
NOW, THEREFORE, in consideration of the foregoing premises, the
representations, warranties, covenants and agreements herein contained and other
good and valuable consideration, the sufficiency of which is hereby
acknowledged, ONB and ANB hereby make this Agreement and
-1-
<PAGE>
prescribe the terms and conditions of the affiliation of ONB and ANB and the
mode of carrying such merger into effect as follows:
SECTION 1
THE MERGER
1.01. General Description. Upon the terms and subject to the conditions
of this Agreement, at the Effective Time (as defined in Section 10 hereof), ANB
shall merge with and into and under the Articles of Incorporation of ONB
("Merger"). ONB shall survive the Merger ("Surviving Corporation") and shall
continue its corporate existence under the laws of the State of Indiana pursuant
to the provisions of and with the effect provided in the Indiana Business
Corporation Law, as amended. Upon consummation of the Merger, each of American
National Bank, Peoples Bank, Farmers State Bank and ANTIM shall become a
wholly-owned subsidiary of ONB.
1.02. Name, Officers, Directors and Management. (a) The name of the
Surviving Corporation shall be "Old National Bancorp." Its principal office
shall be located at 420 Main Street, Evansville, Indiana 47708.
(b) The officers of ONB serving at the Effective Time shall continue to
serve as the officers of the Surviving Corporation, until such time as their
successors shall have been duly elected and have qualified or until their
earlier resignation, death or removal from office. At the Effective Time, James
R. Schrecongost shall become the Chairman of each of following wholly-owned
subsidiaries of ONB: Old National Trust Company, Old National Trust
Company-Illinois and Old National Trust Company-Kentucky.
(c) The directors of ONB as of the Effective Time and Kelly Stanley
shall be the directors of the Surviving Corporation, until such time as their
successors have been duly elected and have been qualified or until their earlier
resignation, death or removal from office.
1.03. Capital Structure. The capital of the Surviving Corporation shall
be not less than the capital of ONB immediately prior to the Effective Time.
1.04. Articles of Incorporation and By-Laws. The Articles of
Incorporation and By-Laws of ONB in existence at the Effective Time shall remain
the Articles of Incorporation and By-Laws of the Surviving Corporation following
the Effective Time, until such Articles of Incorporation and By-Laws shall be
further amended as provided by applicable law.
1.05. Assets and Liabilities. At the Effective Time, the title to all
assets, real estate and other property owned by ANB shall vest in ONB without
reversion or impairment. At the Effective Time, all liabilities of ANB shall be
assumed by ONB.
-2-
<PAGE>
1.06. Tax-Free Reorganization and Accounting Treatment. ONB and ANB
intend for the Merger to qualify as a reorganization within the meaning of
Section 368 and related sections of the Code, and for the Merger to be accounted
for as a pooling of interests transaction. ONB and ANB agree to cooperate and to
take such action as may be reasonably necessary to achieve such results.
SECTION 2
MANNER AND BASIS OF EXCHANGE OF STOCK
2.01. Exchange Ratio. Upon and by virtue of the Merger becoming
effective at the Effective Time, each issued and outstanding share of ANB Common
Stock (as defined in Section 5.03 hereof) shall be converted into the right to
receive One and Twenty-Five One-Hundredths (1.25) shares of ONB common stock
("Exchange Ratio"), subject to adjustment, if any, pursuant to the provisions of
Section 2.03 hereof.
2.02. No Fractional Shares. Certificates for fractional shares of ONB
common stock shall not be issued for fractional interests resulting from
application of the Exchange Ratio. Each shareholder of ANB who would otherwise
have been entitled to a fraction of a share of ONB common stock shall be paid in
cash following the Effective Time an amount equal to such fraction multiplied by
the average of the per share closing price of ONB common stock as reported on
the Nasdaq National Market System for the final five (5) business days on which
shares of ONB common stock were traded immediately preceding the Effective Time.
2.03. Recapitalization. If, between the date of this Agreement and the
Effective Time, the record date occurs for the distribution or issuance by ONB
of a stock dividend with respect to its shares of common stock, or a
combination, subdivision, reclassification or split of ONB's issued and
outstanding shares of common stock, such that the number of issued and
outstanding shares of ONB common stock is increased or decreased, then the
Exchange Ratio shall be adjusted so that ANB's shareholders shall receive, in
the aggregate, such number of shares of ONB common stock representing the same
percentage of outstanding shares of ONB common stock at the Effective Time as
would have been represented by the number of shares of ONB common stock such
shareholders would have received if any of the foregoing actions had not
occurred.
2.04. Distribution of ONB Common Stock and Cash. (a) Immediately
following the Effective Time, ONB shall mail to each ANB shareholder a letter of
transmittal providing instructions as to the transmittal to ONB of certificates
representing shares of ANB Common Stock and the issuance of shares of ONB common
stock in exchange therefor pursuant to the terms of this Agreement.
(b) Following the Effective Time, distribution of stock certificates
representing shares of ONB common stock and any cash payment, without interest,
for fractional shares, if any, shall be made by ONB to each former shareholder
of ANB as soon as practical following delivery to ONB of the shareholder's
certificate(s) representing its shares of ANB Common Stock accompanied by
-3-
<PAGE>
a properly completed and executed letter of transmittal, all in form and
substance reasonably satisfactory to ONB.
(c) As of the Effective Time, stock certificates representing shares of
ANB Common Stock shall be deemed to evidence ownership of ONB common stock for
all corporate purposes other than the payment of dividends or other
distributions. No dividends or other distributions otherwise payable subsequent
to the Effective Time on shares of ONB common stock shall be paid to any ANB
shareholder entitled to receive the same until such shareholder has surrendered
to ONB his or her certificate or certificates representing ANB Common Stock in
exchange for a certificate or certificates representing ONB common stock. Upon
surrender of the certificates representing shares of ANB Common Stock, there
shall be paid in cash to the record holder of the new certificate or
certificates evidencing shares of ONB common stock the amount of all dividends
and other distributions, without interest thereon, withheld with respect to such
shares of ONB common stock.
(d) ONB shall be entitled to rely upon the stock transfer books of ANB
to establish the persons entitled to receive shares of ONB common stock pursuant
to this Agreement, which books shall be conclusive with respect to the ownership
of shares of ANB Common Stock.
(e) With respect to any certificate for shares of ANB Common Stock
which has been lost, stolen or destroyed, ONB shall be authorized to issue
common stock (and to pay cash as to fractional shares) to the registered owner
of such certificate upon receipt by ONB of an agreement to indemnify ONB against
loss from such lost, stolen or destroyed certificate and an affidavit of lost,
stolen or destroyed stock certificate, both in form and substance reasonably
satisfactory to ONB, and upon compliance by the ANB shareholder with all other
reasonable requirements of ONB in connection with lost, stolen or destroyed
stock certificates.
SECTION 3
DISSENTING SHAREHOLDERS
Shareholders of ANB are not entitled to any dissenters' rights under
Chapter 44 of the Indiana Business Corporation Law, as amended, since ANB Common
Stock is quoted and traded on Nasdaq. ANB shall take no action which would
result in the loss of such listing prior to the Effective Time.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF ANB
On or prior to the date hereof, ANB has delivered to ONB a schedule
(the "Disclosure Schedule") setting forth, among other things, items the
disclosure of which is necessary or appropriate either in response to an express
disclosure requirement contained in a provision hereof or as an exception to one
or more representations or warranties contained in this Section 4 or to one
-4-
<PAGE>
or more of its covenants contained in Section 6; provided, that the mere
inclusion of an item in the Disclosure Schedule as an exception to a
representation or warranty shall not be deemed an admission by ANB that such
item represents a material exception or fact, event or circumstance or that such
item is reasonably likely to result in a Material Adverse Effect (as defined
below).
For the purpose of this Agreement, and in relation to ANB and the
Subsidiaries, a "Material Adverse Effect" means any effect that (i) is material
and adverse to the financial position, results of operations or business of ANB
and the Subsidiaries taken as a whole, or (ii) would materially impair the
ability of ANB to perform its obligations under this Agreement or otherwise
materially threaten or materially impede the consummation of the Merger and the
other transactions contemplated by this Agreement; provided, however, that
Material Adverse Effect shall not be deemed to include the impact of (a) changes
in banking and similar laws of general applicability or interpretations thereof
by courts or governmental authorities, (b) changes in generally accepted
accounting principles or regulatory accounting requirements applicable to banks
and their holding companies generally, (c) any modifications or changes to
valuation policies and practices in connection with the Merger or restructuring
charges taken in connection with the Merger, in each case in accordance with
generally accepted accounting principles, (d) effects of any action taken with
the prior written consent of ONB and (e) changes in general level of interest
rate or conditions or circumstances that affect the banking industry generally.
No representation or warranty of ANB contained in this Section 4,
except Sections 4.03 and 4.21, shall be deemed untrue or incorrect, and ANB
shall not be deemed to have breached a representation or warranty, as a
consequence of the existence of any fact, event or circumstance unless such
fact, circumstances or event, individually or taken together with all other
facts, events or circumstances inconsistent with any representation or warranty
contained in this Section 4, has had or is reasonably likely to have a Material
Adverse Effect on ANB.
ANB accordingly hereby represents and warrants to ONB as follows:
4.01. Organization and Authority. (a) ANB is a corporation duly
organized and validly existing under the laws of the State of Indiana. ANB has
full power and authority (corporate and otherwise) to own and lease its
properties as presently owned and leased and to conduct its business in the
manner and by the means utilized as of the date hereof. ANB has a class of stock
registered pursuant to Section 12, and is subject to the reporting requirements,
of the Securities Exchange Act of 1934, as amended ("1934 Act"). Except as set
forth in the Disclosure Schedule, ANB's only direct subsidiaries are American
National Bank, Peoples Bank, Farmers State Bank and ANTIM and it has no other
subsidiaries and owns no voting stock or equity securities of any corporation,
partnership, association or other entity.
(b) American National Bank is a national banking association duly
organized and validly existing under the laws of the United States of America.
American National Bank has no subsidiaries, except for ANB Financial. American
National Bank is subject to primary regulatory supervision and examination by
the Office of the Comptroller of the Currency ("OCC"). American
-5-
<PAGE>
National Bank has full power and authority (corporate and otherwise) to own and
lease its properties as presently owned and leased and to conduct its business
in the manner and by the means utilized as of the date hereof.
(c) Peoples Bank is an Indiana state-chartered bank duly organized and
validly existing under the laws of the State of Indiana. Peoples Bank has no
subsidiaries. Peoples Bank is subject to primary regulatory supervision and
examination by the Indiana Department of Financial Institutions ("DFI"). Peoples
Bank has full power and authority (corporate and otherwise) to own and lease its
properties as presently owned and leased and to conduct its business in the
manner and by the means utilized as of the date hereof.
(d) Farmers State Bank is an Ohio state-chartered bank duly organized
and validly existing under the laws of the State of Ohio. Farmers State Bank has
no subsidiaries. Farmers State Bank is subject to primary regulatory supervision
and examination by the Ohio Division of Financial Institutions ("ODFI"). Farmers
State Bank has full power and authority (corporate and otherwise) to own and
lease its properties as presently owned and leased and to conduct its business
in the manner and by the means utilized as of the date hereof.
(e) ANTIM is a national trust association duly organized and validly
existing under the laws of the United States of America. ANTIM has no
subsidiaries, except ANTIM owns 3,531 shares (15%) of the common stock of
Indiana Trust & Investment Management Company, an Indiana state-chartered trust
company, and has the obligation, subject to conditions, to purchase the
remaining shares in accordance with the terms of a Stock Acquisition Agreement
dated August 8, 1997. Under the terms of such agreement, assuming ONB is a
Permitted Successor to ANB, ONB shall succeed to its rights and obligations
thereunder subject to the price adjustment contemplated by Section 2.4(c) of the
Stock Acquisition Agreement. ANTIM is subject to primary regulatory supervision
and examination by the OCC. ANTIM has full power and authority (corporate and
otherwise) to own and lease its properties as presently owned and leased and to
conduct its business in the manner and by the means utilized as of the date
hereof.
(f) ANB Financial is an Indiana corporation duly organized and validly
existing under the laws of the State of Indiana. ANB Financial has no
subsidiaries. ANB Financial has full power and authority (corporate and
otherwise) to own and lease its properties as presently owned and leased and to
conduct its business in the manner and by the means utilized as of the date
hereof.
4.02. Authorization. (a) ANB has the requisite corporate power and
authority to enter into this Agreement and to perform its obligations hereunder,
subject to the fulfillment of the conditions precedent set forth in Section
8.02(e) and (f) hereof. As of the date hereof, ANB is not aware of any reason
why the approvals set forth in Section 8.02(e) will not be received in a timely
manner and without the imposition of a condition, restriction or requirement of
the type described in Section 8.02(e). This Agreement and its execution and
delivery by ANB have been duly authorized and approved by the Board of Directors
of ANB and, assuming due execution and delivery by ONB, constitutes a valid and
binding obligation of ANB, subject to the fulfillment of the conditions
-6-
<PAGE>
precedent set forth in Section 8.02 hereof, and is enforceable in accordance
with its terms, except to the extent limited by general principles of equity and
public policy and by bankruptcy, insolvency, fraudulent transfer,
reorganization, liquidation, moratorium, readjustment of debt or other laws of
general application relating to or affecting the enforcement of creditors'
rights.
(b) Except as set forth in the Disclosure Schedule, neither the
execution of this Agreement nor consummation of the Merger contemplated hereby:
(i) conflicts with or violates ANB's Articles of Incorporation or By-Laws; (ii)
conflicts with or violates any local, state, federal or foreign law, statute,
ordinance, rule or regulation (provided that the approvals of or filings with
applicable government regulatory agencies or authorities required for
consummation of the Merger are obtained) or any court or administrative
judgment, order, injunction, writ or decree; (iii) conflicts with, results in a
breach of or constitutes a default under any note, bond, indenture, mortgage,
deed of trust, license, lease, contract, agreement, arrangement, commitment or
other instrument to which ANB or any Subsidiary is a party or by which ANB or
any Subsidiary is subject or bound; (iv) results in the creation of or gives any
person, corporation or entity the right to create any lien, charge, claim,
encumbrance or security interest, or results in the creation of any other rights
or claims of any other party (other than ONB) or any other adverse interest,
upon any right, property or asset of ANB or any Subsidiary; or (v) terminates or
gives any person, corporation or entity the right to terminate, accelerate,
amend, modify or refuse to perform under any note, bond, indenture, mortgage,
agreement, contract, lease, license, arrangement, deed of trust, commitment or
other instrument to which ANB or any Subsidiary is bound or with respect to
which ANB or any Subsidiary is to perform any duties or obligations or receive
any rights or benefits.
(c) Other than in connection or in compliance with the provisions of
the applicable federal and state banking, securities, and corporation statutes,
all as amended, and the rules and regulations promulgated thereunder, no notice
to, filing with, exemption by or consent, authorization or approval of any
governmental agency or body is necessary for consummation of the Merger by ANB
or any Subsidiary.
4.03. Capitalization. (a) The authorized capital stock of ANB as of the
date hereof consists, and at the Effective Time will consist, of 250,000 shares
of preferred stock, no par value, none of which shares are issued or outstanding
and 20,000,000 shares of common stock, $1.00 par value per share, 5,445,995 of
which shares are issued and outstanding, which number of issued shares of ANB
Common Stock is subject to increase to a total of 5,837,619 shares (not
including any shares of ANB Common Stock which may be granted under the Stock
Option Agreement and ANB (1994) Dividend Reinvestment and Stock Purchase Plan
(the "DRIP")) pursuant to the exercise of options (collectively, the "Stock
Options") granted under the ANB Corporation 1996 Directors' Stock Option Plan,
ANB Corporation Stock Option Plan and ANB Corporation 1995 Stock Option Plan
(collectively, the "Stock Option Plans") to purchase an aggregate of 391,624
shares of common stock of ANB (such issued and outstanding shares are referred
to herein as "ANB Common Stock"). Such issued and outstanding shares of ANB
Common Stock have been duly and validly authorized by all necessary corporate
action of ANB, are validly issued, fully paid and nonassessable and have not
been issued in violation of any pre-emptive rights of any present or former ANB
shareholder.
-7-
<PAGE>
ANB has no capital stock authorized, issued or outstanding other than as
described in this Section 4.03(a) and has no intention or obligation to
authorize or issue any other capital stock or any additional shares of ANB
Common Stock, except pursuant to the terms (as of the date of this Agreement) of
the ANB DRIP.
(b) The authorized capital stock of American National Bank as of the
date hereof consists, and at the Effective Time will consist, of 160,000 shares
of common stock, $20.00 par value per share, all of which shares are issued and
outstanding (such issued and outstanding shares are referred to herein as
"American National Bank Common Stock"). Such issued and outstanding shares of
American National Bank Common Stock have been duly and validly authorized by all
necessary corporate action of American National Bank, are validly issued, fully
paid and nonassessable (except to the extent provided by 12 U.S.C. Section 55,
as amended), and have not been issued in violation of any pre-emptive rights of
any present or former American National Bank shareholder. All of the issued and
outstanding shares of American National Bank Common Stock are owned by ANB free
and clear of all liens, pledges, charges, claims, encumbrances, restrictions,
security interests, options and pre-emptive rights and of all other rights or
claims of any other person, corporation or entity with respect thereto. American
National Bank has no capital stock authorized, issued or outstanding other than
as described in this Section 4.03(b) and has no intention or obligation to
authorize or issue any other capital stock or any additional shares of American
National Bank Common Stock.
(c) The authorized capital stock of Peoples Bank as of the date hereof
consists, and at the Effective Time will consist, of 130,000 shares of common
stock, $10.00 par value per share, all of which shares are issued and
outstanding (such issued and outstanding shares are referred to herein as
"Peoples Bank Common Stock"). Such issued and outstanding shares of Peoples Bank
Common Stock have been duly and validly authorized by all necessary corporate
action of Peoples Bank, are validly issued, fully paid and nonassessable, and
have not been issued in violation of any pre-emptive rights of any present or
former Peoples Bank shareholder. All of the issued and outstanding shares of
Peoples Bank Common Stock are owned by ANB free and clear of all liens, pledges,
charges, claims, encumbrances, restrictions, security interests, options and
pre-emptive rights and of all other rights or claims of any other person,
corporation or entity with respect thereto. Peoples Bank has no capital stock
authorized, issued or outstanding other than as described in this Section
4.03(c) and has no intention or obligation to authorize or issue any other
capital stock or any additional shares of Peoples Bank Common Stock.
(d) The authorized capital stock of Farmers State Bank as of the date
hereof consists, and at the Effective Time will consist, of 1,000 shares of
common stock, $2,500.00 par value per share, all of which shares are issued and
outstanding (such issued and outstanding shares are referred to herein as
"Farmers State Bank Common Stock"). Such issued and outstanding shares of
Farmers State Bank Common Stock have been duly and validly authorized by all
necessary corporate action of Farmers State Bank, are validly issued, fully paid
and nonassessable, and have not been issued in violation of any pre-emptive
rights of any present or former Farmers State Bank shareholder. All of the
issued and outstanding shares of Farmers State Bank Common Stock are owned by
ANB free
-8-
<PAGE>
and clear of all liens, pledges, charges, claims, encumbrances, restrictions,
security interests, options and pre-emptive rights and of all other rights or
claims of any other person, corporation or entity with respect thereto. Farmers
State Bank has no capital stock authorized, issued or outstanding other than as
described in this Section 4.03(d) and has no intention or obligation to
authorize or issue any other capital stock or any additional shares of Farmers
State Bank Common Stock.
(e) The authorized capital stock of ANTIM as of the date hereof
consists, and at the Effective Time will consist, of 100,000 shares of common
stock, $100.00 par value per share, 21,000 of which shares are issued and
outstanding (such issued and outstanding shares are referred to herein as "ANTIM
Common Stock"). Such issued and outstanding shares of ANTIM Common Stock have
been duly and validly authorized by all necessary corporate action of ANTIM, are
validly issued, fully paid and nonassessable (except to the extent provided by
12 U.S.C. Section 55, as amended), and have not been issued in violation of any
pre-emptive rights of any present or former ANTIM shareholder. All of the issued
and outstanding shares of ANTIM Common Stock are owned by ANB free and clear of
all liens, pledges, charges, claims, encumbrances, restrictions, security
interests, options and pre-emptive rights and of all other rights or claims of
any other person, corporation or entity with respect thereto. ANTIM has no
capital stock authorized, issued or outstanding other than as described in this
Section 4.03(e) and has no intention or obligation to authorize or issue any
other capital stock or any additional shares of ANTIM Common Stock.
(f) The authorized capital stock of ANB Financial as of the date hereof
consists, and at the Effective Time will consist, of 1,000 shares of common
stock, no par value, all of which shares are issued and outstanding (such issued
and outstanding shares are referred to herein as "ANB Financial Common Stock").
Such issued and outstanding shares of ANB Financial Common Stock have been duly
and validly authorized by all necessary corporate action of ANB Financial, are
validly issued, fully paid and nonassessable, and have not been issued in
violation of any pre-emptive rights of any present or former ANB Financial
shareholder. All of the issued and outstanding shares of ANB Financial Common
Stock are owned by American National Bank free and clear of all liens, pledges,
charges, claims, encumbrances, restrictions, security interests, options and
pre-emptive rights and of all other rights or claims of any other person,
corporation or entity with respect thereto. ANB Financial has no capital stock
authorized, issued or outstanding other than as described in this Section
4.03(f) and has no intention or obligation to authorize or issue any other
capital stock or any additional shares of ANB Financial Common Stock.
(g) Except as set forth in the Disclosure Schedule and except for
options granted under the Stock Option Agreement and the Stock Option Plans,
there are no options, warrants, commitments, calls, puts, agreements,
understandings, arrangements or subscription rights relating to any shares of
ANB Common Stock, or any securities convertible into or representing the right
to purchase or otherwise acquire any common stock or debt securities of ANB, by
which ANB is or may become bound. ANB does not have any outstanding contractual
or other obligation to repurchase, redeem or otherwise acquire any of the issued
and outstanding shares of ANB Common Stock.
-9-
<PAGE>
(h) There are no options, warrants, commitments, calls, puts,
agreements, understandings, arrangements or subscription rights relating to any
shares of common stock of the Subsidiaries, or any securities convertible into
or representing the right to purchase or otherwise acquire any common stock or
debt securities of a Subsidiary, by which a Subsidiary is or may become bound.
None of the Subsidiaries has any outstanding contractual or other obligation to
repurchase, redeem or otherwise acquire any of the issued and outstanding shares
of its common stock.
(m) Except as set forth in the Disclosure Schedule, ANB has no
knowledge of any person or entity which beneficially owns 5% or more of its
outstanding shares of common stock.
4.04. Organizational Documents. The respective Articles of
Incorporation and By-Laws of ANB, Peoples Bank, Farmers State Bank and ANB
Financial, and the respective Articles of Association and By-Laws of American
National Bank and ANTIM, representing true, accurate and complete copies of such
corporate documents in effect as of the date of this Agreement, have been
delivered to ONB.
4.05. Compliance with Law. (a) Neither ANB nor any Subsidiary has
engaged in any activity nor taken or omitted to take any action which has
resulted in the violation of any local, state, federal or foreign law, statute,
regulation, rule, ordinance, order, restriction or requirement, nor are they in
violation of any order, injunction, judgment, writ or decree of any court or
government agency or body. ANB and each Subsidiary possess and hold all
licenses, franchises, permits, certificates and other authorizations necessary
for the continued conduct of their business without interference or
interruption, and such licenses, franchises, permits, certificates and
authorizations are transferable (to the extent required) to ONB at the Effective
Time without any restrictions or limitations thereon or the need to obtain any
consents of government agencies or other third parties other than as set forth
in this Agreement.
(b) Except as set forth in the Disclosure Schedule, neither ANB nor any
of the Subsidiaries or properties is a party to or is subject to any order,
decree, agreement, memorandum of understanding or similar arrangement with, or a
commitment letter or similar submission to, or extraordinary supervisory letter
from, any federal or state governmental agency or authority charged with the
supervision or regulation of financial institutions or issuers of securities or
engaged in the insurance of deposits (including, without limitation, the OCC,
the Federal Reserve Board and Federal Deposit Insurance Corporation) or the
supervision or regulation of ANB or any of its Subsidiaries. There are no
uncured violations, or violations with respect to which refunds or restitutions
may be required, cited in any examination report of ANB or any Subsidiary as a
result of an examination by any regulatory agency or body, or set forth in any
accountant's or auditor's report to ANB or any Subsidiary.
4.06. Accuracy of Statements Made and Materials Provided to ONB. (a) No
representation, warranty in this Section 4 or other statement made, or any
information provided, by ANB or any Subsidiary in this Agreement or the
Disclosure Schedule (and any update thereto), and no written report, statement,
list, certificate, materials or other information furnished or to be
-10-
<PAGE>
furnished by ANB or any Subsidiary to ONB through and including the Effective
Time in connection with this Agreement or the Merger contemplated hereby
(including, without limitation, any written information which has been or shall
be supplied by ANB and the Subsidiaries with respect to their financial
condition, results of operations, business, assets, capital or directors and
officers for inclusion in the proxy statement-prospectus and registration
statement relating to the Merger), contains or shall contain (in the case of
information relating to the proxy statement-prospectus at the time it is mailed
to ANB's shareholders) any untrue statement of material fact or omits or shall
omit to state a material fact necessary to make the statements contained herein
or therein, in light of the circumstances in which they are made, not false or
misleading.
4.07. Litigation and Pending Proceedings. (a) Except as set forth in
the Disclosure Schedule and lawsuits involving collection of delinquent
accounts, there are no claims, actions, suits, proceedings, mediations,
arbitrations or investigations pending or to the best knowledge of ANB after due
inquiry, threatened in any court or before any government agency or authority,
arbitration panel or otherwise (nor does ANB have any knowledge of a basis for
any claim, action, suit, proceeding, litigation, arbitration or investigation)
against, by or affecting ANB or any Subsidiary or which would prevent the
performance of this Agreement, declare the same unlawful or cause the rescission
hereof.
(b) Except as set forth in the Disclosure Schedule, neither ANB nor any
Subsidiary is: (i) subject to any outstanding judgment, order, writ, injunction
or decree of any court, arbitration panel or governmental agency or authority;
(ii) presently charged with or, to the best knowledge of ANB after due inquiry,
under governmental investigation with respect to any actual or alleged
violations of any law, statute, rule, regulation or ordinance; or (iii) the
subject of any pending or, to the best knowledge of ANB after due inquiry,
threatened proceeding by any government regulatory agency or authority having
jurisdiction over its respective business, assets, capital, properties or
operations.
4.08. Financial Statements and Reports. ANB has delivered to ONB copies
of the following financial statements and reports of ANB and the Subsidiaries,
including the notes thereto (collectively, the "ANB Financial Statements"):
(a) Consolidated Balance Sheets and the related Consolidated Statements
of Income and Consolidated Statements of Changes in Shareholders' Equity of ANB
as of and for the years ended December 31, 1996, 1997 and 1998, and as of and
for the fiscal quarter ended March 31, 1999;
(b) Consolidated Statements of Cash Flows of ANB for the years ended
December 31, 1996, 1997 and 1998, and for the fiscal quarter ended March 31,
1999;
(c) Consolidated Statements of Changes in Financial Position of ANB for
the years ended December 31, 1997 and 1998, and for the fiscal quarter ended
March 31, 1999;
-11-
<PAGE>
(d) Reports of Condition and Income ("Call Reports") for American
National Bank and Peoples Bank as of the close of business on December 31, 1995,
1996, 1997 and 1998; and
(e) Financial Statements of ANB on Form FRY-9LP and Form FRY-9C filed
with the Board of Governors of the Federal Reserve System at the close of
business on December 31, 1997 and 1998.
The ANB Financial Statements present fairly the consolidated financial
position of ANB as of and at the dates shown and the consolidated results of
operations for the periods covered thereby. The ANB Financial Statements
described in clauses (a), (b) and (c) above for completed fiscal years are
audited financial statements and have been prepared in conformance with
generally accepted accounting principles applied on a consistent basis, except
as may otherwise be indicated in any accountants' notes or reports with respect
to such financial statements. The ANB Financial Statements do not include any
assets, liabilities or obligations or omit to state any assets, liabilities or
obligations, absolute or contingent, or any other facts which inclusion or
omission would render any of the ANB Financial Statements false, misleading or
inaccurate in any respect.
4.09. Properties, Contracts, Employees and Other Agreements. (a) Set
forth in the Disclosure Schedule are a true, accurate and complete copy of the
following:
(i) A brief description and the location of all real property
owned by ANB and the Subsidiaries and the principal buildings
and structures located thereon and each lease of real property
to which ANB or any Subsidiary is a party, identifying the
parties thereto, the annual rental payable, the expiration
date of the lease and a brief description of the property
covered;
(ii) a list of all agreements, contracts, leases, licenses, lines
of credit, understandings, commitments or obligations of ANB
or any Subsidiary which individually or in the aggregate:
(A) involve payment or receipt by ANB or any Subsidiary
(other than as disbursements of loan proceeds to
customers, loan payments by customers or customer
deposits) of more than $100,000;
(B) involve payments based on profits of ANB or any
Subsidiary;
(C) relate to the purchase of goods, products, supplies
or services in excess of $100,000;
(D) were not made in the ordinary course of business; or
(E) may not be terminated without penalty within one (1)
year from the date of this Agreement; and
-12-
<PAGE>
(iii) The name and current annual salary of each director, officer
and employee of ANB or any Subsidiary whose current annual
salary is in excess of $50,000, and the profit sharing, bonus
or other form of compensation (other than salary) paid or
payable by ANB or any Subsidiary to or for the benefit of each
such person for the year ended December 31, 1998, and any
employment, severance or deferred compensation agreement or
arrangement with respect to each such person.
(b) Each of the agreements, contracts, commitments, leases, instruments
and documents set forth in the Disclosure Schedule relating to this Section 4.09
is valid and enforceable in accordance with its terms, except to the extent
limited by general principles of equity and public policy or by bankruptcy,
insolvency, fraudulent transfer, readjustment of debt or other laws of general
application relative to or affecting the enforcement of creditor's rights, and
ANB and the Subsidiaries are, and, to the best knowledge of ANB after due
inquiry, all other parties thereto are, in compliance with the provisions
thereof, and ANB and the Subsidiaries are not in default in the performance,
observance or fulfillment of any obligation, covenant or provision contained
therein. None of the foregoing requires the consent of any party to its
assignment in connection with the Merger contemplated by this Agreement. Other
than as disclosed pursuant to this Section 4.09, to the best knowledge of ANB
after due inquiry, no circumstances exist resulting from transactions effected
or to be effected, from events which have occurred or may occur or from any
action taken or omitted to be taken which could reasonably be expected to result
in the creation of any agreement, contract, obligation, commitment, arrangement,
lease or document described in or contemplated by this Section 4.09.
(c) Neither ANB nor any Subsidiary is, to the best knowledge of ANB
after due inquiry, in default under or in breach of or, alleged to be in default
under or in breach of, any loan or credit agreement, conditional sales contract
or other title retention agreement, security agreement, bond, indenture,
mortgage, license, contract, lease, commitment or any other instrument or
obligation.
4.10. Absence of Undisclosed Liabilities. Except as provided in the ANB
Financial Statements, Subsequent ANB Financial Statements and in the Disclosure
Schedule, except for unfunded loan commitments and obligations on letters of
credit to customers of American National Bank, Peoples Bank and Farmers State
Bank (collectively, the "Banks"), except for trade payables incurred in the
ordinary course of ANB's and the Banks' business, and except for the transaction
contemplated by this Agreement, neither ANB nor any Subsidiary has, nor will
have at the Effective Time, any obligation, agreement, contract, commitment,
liability, lease or license which exceeds $50,000 individually, or any
obligation, agreement, contract, commitment, liability, lease or license made
outside of the ordinary course of business, nor does there exist any
circumstances resulting from transactions effected or events occurring on or
prior to the date of this Agreement or from any action omitted to be taken
during such period which could reasonably be expected to result in any such
obligation, agreement, contract, commitment, liability, lease or license.
4.11. Title to Assets. Except as described in this Section 4.11: (a)
ANB or the Subsidiaries, as the case may be, has good and marketable title in
fee simple absolute to all real
-13-
<PAGE>
property (including, without limitation, all real property used as bank premises
and all other real estate owned) which is reflected in the ANB Financial
Statements as of March 31, 1999; good title to all personal property reflected
in the ANB Financial Statements as of March 31, 1999, other than personal
property disposed of in the ordinary course of business since March 31, 1999;
good title to or right to use by valid and enforceable lease or contract all
other properties and assets (whether real or personal, tangible or intangible)
which ANB and the Subsidiaries purports to own or which ANB or any Subsidiary
uses in its business; good title to, or right to use by terms of a valid and
enforceable lease or contract, all other property used in their respective
businesses; and good title to all property and assets acquired and not disposed
of or leased since March 31, 1999. All of such properties and assets are owned
by ANB or a Subsidiary free and clear of all land or conditional sales
contracts, mortgages, liens, pledges, restrictions, security interests, charges,
claims, rights of third parties or encumbrances of any nature except: (i) as set
forth in the Disclosure Schedule; (ii) as specifically noted in the ANB
Financial Statements; (iii) statutory liens for taxes not yet delinquent or
being contested in good faith by appropriate proceedings; (iv) pledges or liens
required to be granted in connection with the acceptance of government deposits
or granted in connection with repurchase or reverse repurchase agreements; and
(v) easements, encumbrances and liens of record, imperfections of title and
other limitations which are not material in amounts to ANB on a consolidated
basis and which do not materially detract from the value or materially interfere
with the present or contemplated use of any of the properties subject thereto or
impair the use thereof for the purposes for which they are held or used. All
real property owned or leased by ANB or any Subsidiary is in compliance with all
applicable zoning and land use laws.
(b) ANB and the Subsidiaries have conducted their respective business
in compliance with all federal, state, county and municipal laws, statutes,
regulations, rules, ordinances, orders, directives, restrictions and
requirements relating to, without limitation, responsible property transfer,
underground storage tanks, petroleum products, air pollutants, water pollutants
or storm water or process waste water or otherwise relating to the environment
or toxic or hazardous substances or to the manufacturing, recycling, handling,
processing, distribution, use, generation, treatment, storage, disposal or
transport of any hazardous or toxic substances or petroleum products (including
polychlorinated biphenyls, whether contained or uncontained, and
asbestos-containing materials, whether friable or not), including, without
limitation, the Federal Solid Waste Disposal Act, the Hazardous and Solid Waste
Amendments, the Federal Clean Air Act, the Federal Clean Water Act, the
Occupational Health and Safety Act, the Federal Resource Conservation and
Recovery Act, the Toxic Substances Control Act, the Federal Comprehensive
Environmental Response, Compensation and Liability Act of 1980 and the Superfund
Amendments and Reauthorization Act of 1986, all as amended, and regulations of
the Environmental Protection Agency, the Nuclear Regulatory Agency, the Army
Corp of Engineers, the Department of Interior, the United States Fish and
Wildlife Service and any state department of natural resources or state
environmental protection agency now (collectively, "Environmental Laws"). Except
as set forth in the Disclosure Schedule, there are no pending or, to the best
knowledge of ANB after due inquiry, threatened, claims, actions or proceedings
by any local municipality, sewage district or other governmental entity against
ANB or any Subsidiary with respect to the Environmental Laws. No environmental
clearances or other governmental approvals are required for the conduct of the
business of ANB or any Subsidiary as
-14-
<PAGE>
presently conducted. Neither ANB nor any Subsidiary is the owner, and has not
been in the chain of title or the operator or lessee, of any property on which
any substances have been released, which substances if known to be present on,
at or under such property would require clean-up, removal or any other remedial
action under any Environmental Law, and there is no reasonable basis or grounds
for any such claim, action or proceeding. ANB and the Subsidiaries own, operate,
lease and control, and have owned, operated, leased and controlled, all real
property in compliance with the Environmental Laws. Neither ANB nor any
Subsidiary has any liability for any clean-up or remediation under any of the
Environmental Laws with respect to any real property.
4.12. Loans. (a) Except as set forth in the Disclosure Schedule, there
is no loan by any Bank in excess of $50,000 that has been classified by bank
regulatory examiners or management as "Other Loans Specially Mentioned,"
"Substandard," "Doubtful" or "Loss" or in excess of $50,000 that has been
identified by accountants or auditors (internal or external) as having a
significant risk of uncollectability. The most recent loan watch list of each
Bank and a list of all loans in excess of $50,000 which any Bank has determined
to be thirty (30) days or more past due with respect to principal or interest
payments or has placed on nonaccrual status has been provided to ONB.
(b) All loans reflected in the ANB Financial Statements as of March 31,
1999 and which have been made, extended, renewed, restructured, approved,
amended or acquired since March 31, 1999: (i) to the best knowledge of ANB after
due inquiry, constitute the legal, valid and binding obligation of the obligor
and any guarantor named therein, except to the extent limited by general
principles of equity and public policy or by bankruptcy, insolvency, fraudulent
transfer, reorganization, liquidation, moratorium, readjustment of debt or other
laws of general application relative to or affecting the enforcement of
creditors' rights; (ii) are evidenced by notes, instruments or other evidences
of indebtedness which are true, genuine and what they purport to be; and (iii)
are secured, to the extent that ANB or any Subsidiary has a security interest in
collateral or a mortgage securing such loans, by perfected security interests or
recorded mortgages naming ANB or a Subsidiary as the secured party or mortgagee
(unless by written agreement to the contrary).
(c) The reserves, the allowance for possible loan and lease losses and
the carrying value for real estate owned which are shown on the ANB Financial
Statements are adequate in all respects under the requirements of generally
accepted accounting principles applied on a consistent basis to provide for
possible losses on items for which reserves were made, on loans and leases
outstanding and real estate owned as of the respective dates.
4.13. Shareholder Rights Plan. Except as otherwise provided in this
Agreement, the Disclosure Schedule and ANB's Articles of Incorporation and
By-Laws, ANB has no shareholder rights plan or any other plan, program or
agreement involving, restricting, prohibiting or discouraging a change in
control or merger of ANB or which may be considered an anti-takeover mechanism.
4.14. Employee Benefit Plans. (a) With respect to the employee benefit
plans, as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"),
-15-
<PAGE>
sponsored or otherwise maintained by ANB or any Subsidiary, whether written or
oral, in which ANB or any Subsidiary participates as a participating employer;
to which ANB or any Subsidiary contributes and including any such plans which
within the preceding six years have been terminated, merged into another plan of
ANB or any Subsidiary, frozen or discontinued (collectively, "ANB Plans") except
as set forth on the Disclosure Schedule: (i) all such ANB Plans have been, in
all respects, maintained in compliance with the requirements prescribed by all
applicable statutes, orders and governmental rules or regulations, including,
without limitation, ERISA, the Code, and Treasury and Labor Regulations
promulgated thereunder, (ii) all ANB Plans intended to constitute tax-qualified
plans under Section 401(a) of the Code have received favorable determination
letters from the Internal Revenue Service ("Service") with respect to "TRA" (as
defined in Section 1 of Rev. Proc. 93-39), and ANB is not aware of any
circumstances likely to result in revocation of any such favorable determination
letter; (iii) except for the ANB Common Stock held by its trustee as an asset of
the ANB Pension Plan, no ANB Plan (or its related trust) holds any stock or
other securities of ANB or any related or affiliated person or entity;(iv) ANB
has not engaged in any transaction that may subject ANB, or any ANB Plan, to a
civil penalty imposed by Section 502 of ERISA; (v) no prohibited transaction (as
defined in Section 406 of ERISA and as defined in Section 4975(c) of the Code)
has occurred with respect to any ANB Plan; (vi) there are no actions, suits,
proceedings or claims pending (other than routine claims for benefits) or, to
the best knowledge of ANB after due inquiry, threatened, against ANB, any
Subsidiary, any ANB Plan, any fiduciary of any ANB Plan or the assets of any ANB
Plan as to which ANB or any Subsidiary would have liability.
(b) ANB has made available to ONB true, accurate and complete copies of
the following (including all plans and programs which have been terminated): (i)
pension, retirement, profit-sharing, savings, stock purchase, stock bonus, stock
ownership, stock option and stock appreciation right plans and all amendments
thereto and all summary plan descriptions thereof (including any modifications
thereto); (ii) all employment, deferred compensation (whether funded or
unfunded), salary continuation, consulting, bonus, severance and collective
bargaining agreements, arrangements or understandings; (iii) all executive and
other incentive compensation plans, programs and agreements; (iv) all group
insurance and health insurance contracts, policies or plans; and (v) all other
incentive, welfare or employee benefit plans, or agreements, maintained or
sponsored, participated in, or contributed to by ANB or any Subsidiary for its
current or former directors, officers or employees.
(c) Except as set forth on the Disclosure Schedule, no current or
former director, officer or employee of ANB or any Subsidiary is entitled to any
benefit under any welfare benefit plans (as defined in Section 3(1) of ERISA)
after termination of employment with ANB, except that such individuals may be
entitled to continue their group health care coverage pursuant to the retiree
health coverage provisions of the ANB Corporation Group Health Plan or pursuant
to Section 4980B of the Code if they pay the cost of such coverage pursuant to
the applicable requirements of the Plan or the Code with respect thereto,
whichever is applicable.
(d) With respect to any group health plan (as defined in Section 607(1)
of ERISA) sponsored or maintained by ANB or any Subsidiary, in which ANB or any
Subsidiary participates
-16-
<PAGE>
as a participating employer or to which ANB or any Subsidiary contributes, no
director, officer, employee or agent of ANB or any Subsidiary has engaged in any
action or failed to act in such a manner that, as a result of such action or
failure to act, would cause a tax to be imposed on ANB or any Subsidiary under
Code Section 4980B(a). With respect to all such plans, all applicable provisions
of Section 4980B of the Code and Section 601 of ERISA have been complied with in
all respects by ANB and the Subsidiaries.
(e) Except as set forth on the Disclosure Schedule, there are no
collective bargaining, employment, management, consulting, deferred
compensation, reimbursement, indemnity, retirement, early retirement, severance
or similar plans or agreements, under discussion or negotiation by management
with any employee or group of employees, any member of management or any other
person.
4.15. Obligations to Employees. All contributions required to be made
under the terms of any ANB Plan have been timely made or have been reflected on
the Audited Financial Statements or the Preliminary Financial Statements.
Neither any ANB Plan which is an "employee pension benefit plan" within the
meaning of Section 3(2) of ERISA (a "Pension Plan") nor any single-employer plan
or any entity which is considered one employer with ANB under Section 4001 of
ERISA or section 414 of the Code (an "ERISA Affiliate") has an "accumulated
funding deficiency" (whether or not waived) within the meaning of Section 412 of
the Code or Section 302 of ERISA and no ERISA Affiliate has an outstanding
funding waiver. Neither ANB nor any of its Subsidiaries has provided, or is
required to provide, security to any Pension Plan or to any single-employer plan
of any ERISA Affiliate pursuant to Section 401(a)(29) of the Code.
4.16. Taxes, Returns and Reports. Except as set forth in the Disclosure
Schedule, ANB and each Subsidiary has since January 1, 1995 (a) duly filed all
federal, state, local and foreign tax returns of every type and kind required to
be filed, and each such return is true, accurate and complete in all respects;
(b) paid or otherwise adequately reserved in accordance with generally accepted
accounting principles for all taxes, assessments and other governmental charges
due or claimed to be due upon ANB or any Subsidiary or any of their income,
properties or assets; and (c) not requested an extension of time for any such
payments (which extension is still in force). ANB has established, and shall
establish in the Subsequent ANB Financial Statements, in accordance with
generally accepted accounting principles, a reserve for taxes in the ANB
Financial Statements adequate to cover all of ANB's and the Subsidiaries' tax
liabilities (including, without limitation, income taxes, payroll taxes and
withholding, and franchise fees) for the periods then ending. Neither ANB nor
any Subsidiary has, nor will any one of them have, any liability for taxes of
any nature for or with respect to the operation of their respective businesses,
including the business of any subsidiary, or ownership of their assets,
including the assets of any subsidiary, from the date hereof up to and including
the Effective Time, except to the extent set forth in the Subsequent ANB
Financial Statements (as hereinafter defined) or as accrued or reserved for on
the books and records of ANB. Neither ANB nor any Subsidiary is currently under
audit by any state or federal taxing authority. No federal, state or local tax
returns of ANB have been audited by any taxing authority during the past five
(5) years.
-17-
<PAGE>
4.17. Deposit Insurance. The deposits of the Banks are insured by the
FDIC in accordance with the Federal Deposit Insurance Act, as amended, and ANB
and each Bank have paid or properly reserved or accrued for all current premiums
and assessments with respect to such deposit insurance.
4.18. Insurance. Set forth in the Disclosure Schedule is a list and
brief description of all policies of insurance (including, without limitation,
bankers' blanket bond, directors' and officers' liability insurance, property
and casualty insurance, group health or hospitalization insurance and insurance
providing benefits for employees) owned or held by ANB or any Subsidiary on the
date hereof or with respect to which ANB or any Subsidiary pays any premiums.
Each such policy is in full force and effect and all premiums due thereon have
been paid when due, and a true, accurate and complete copy thereof has been made
available to ONB prior to the date hereof.
4.19. Books and Records. The books and records of ANB and the
Subsidiaries have been fully, properly and accurately maintained.
4.20. Broker's, Finder's or Other Fees. Except for reasonable fees of
ANB's attorneys, accountants and investment bankers, all of which shall be paid
by ANB prior to the Effective Time, no agent, broker or other person acting on
behalf of ANB or any Subsidiary or under any authority of ANB or any Subsidiary
is or shall be entitled to any commission, broker's or finder's fee or any other
form of compensation or payment from any of the parties hereto relating to this
Agreement and the Merger contemplated hereby.
4.21. Interim Events. (a) Except as set forth in the Disclosure
Schedule, between the period from March 31, 1999 to the date of this Agreement,
no event has occurred and no fact or circumstance shall have come to exist or
come to be known which, directly or indirectly, individually or taken together
with all other facts, circumstances and events, has had, or is reasonably likely
to have, a Material Adverse Effect.
(b) Except as set forth in the Disclosure Schedule, between the period
from March 31, 1999 to the date of this Agreement, ANB and the Subsidiaries have
carried on their respective businesses in the ordinary and usual course
consistent with their past practices (excluding the incurrence of fees and
expenses of professional advisors related to this Agreement and the transactions
contemplated hereby) and there has not been:
(i) any declaration, setting aside or payment of any
dividend or other distribution (whether in cash,
stock or property) with respect to ANB Common Stock;
or
(ii) any split, combination or reclassification of any
capital stock of ANB or any subsidiary or any
issuance or the authorization of any issuance of any
other securities in respect of, or in lieu of or in
substitution for shares of ANB Common Stock, except
for issuances of ANB Common Stock upon the exercise
of the Options awarded prior to the date hereof in
accordance with the terms of the Stock Option Plans.
-18-
<PAGE>
4.22. Regulatory Filings. ANB and the Subsidiaries have filed and will
continue to file in a timely manner all required filings with the Securities and
Exchange Commission ("SEC"), including, but not limited to, all reports on Form
8-K, Form 10-K and Form 10-Q and proxy statements, and with all federal and
state regulatory agencies and authorities as required by applicable law. All
such filings with the SEC and with all other federal and state regulatory
agencies were and will be true, accurate and complete as of the dates of the
filings and have been complied or will comply in all respects as to form with
the applicable requirements and prepared in conformity with generally accepted
regulatory accounting principles applied on a consistent basis, and no such
filing contained or will contain any untrue statement of a material fact or
omitted to state a material fact necessary in order to make the statements, at
the time and in light of the circumstances under which they were made, not false
or misleading.
4.23. Indemnification Agreements. (a) Neither ANB nor any Subsidiary is
a party to any indemnification, indemnity or reimbursement agreement, contract,
commitment or understanding to indemnify any present or former director,
officer, employee, shareholder or agent against liability or hold the same
harmless from liability other than as expressly provided in the Articles of
Incorporation or By-Laws of ANB, Peoples Bank, Farmers State Bank and ANB
Financial and the Articles of Association and By-Laws of American National Bank
and ANTIM.
(b) No claims have been made against or filed with ANB or any
Subsidiary nor have, to the best knowledge of ANB after due inquiry, any claims
been threatened against ANB or any Subsidiary, for indemnification against
liability or for reimbursement of any costs or expenses incurred in connection
with any legal or regulatory proceeding by any present or former director,
officer, shareholder, employee or agent of ANB or any Subsidiary.
4.24. Year 2000. (a) All devices, systems, machinery, information
technology, computer software and hardware, and other date sensitive technology
(collectively, the "Systems") necessary for ANB to carry on its business as
presently conducted and as contemplated to be conducted in the future are Year
2000 Compliant or will be Year 2000 Compliant within a period of time calculated
to result in no disruption of any of ANB's business operations. Neither ANB nor
any of the Subsidiary has received, or reasonably expects to receive, a
deficiency notice for any federal or state regulator relating to their failure
to be Year 2000 Compliant. For purposes of this Section 4.24, "Year 2000
Compliant" means that such Systems are designed to be used prior to, during and
after the Gregorian calendar year 2000 A.D. and will operate during each such
time period without error relating to date data, specifically including any
error relating to, or the product of, date data which represents or references
different centuries or more than one century.
(b) ANB has:
(i) undertaken a detailed inventory, review, and
assessment of all areas within its business and
operations that could be adversely affected by the
failure of ANB to be Year 2000 Compliant on a timely
basis;
-19-
<PAGE>
(ii) developed a detailed plan and timeline for becoming
Year 2000 Compliant on a timely basis; and
(iii) to date, implemented that plan in accordance with
that timetable.
4.25. Shareholder Approval. The affirmative vote of the holders of a
majority of the ANB Common Stock (which are issued and outstanding on the record
date relating to the meeting of shareholders) is required for shareholder
approval of this Agreement and the Merger.
4.26. Nonsurvival of Representations and Warranties. The
representations and warranties of ANB contained in this Agreement shall expire
at the earlier of the termination of this Agreement and the Effective Time, and
thereafter ANB and all directors, officers and employees of ANB shall have no
further liability with respect thereto, except for fraud or for false or
misleading statements made intentionally or knowingly in connection with such
representations and warranties.
SECTION 5
REPRESENTATIONS AND WARRANTIES OF ONB
On or prior to the date hereof, ONB has delivered to ANB a schedule
(the "ONB Disclosure Schedule") setting forth, among other things, items the
disclosure of which is necessary or appropriate as an exception to one or more
representations or warranties contained in this Section 5 or to one or more of
its covenants contained in Section 7; provided, that the mere inclusion of an
item in the ONB Disclosure Schedule as an exception to a representation or
warranty shall not be deemed an admission by ONB that such item represents a
material exception or fact, event or circumstance or that such item is
reasonably likely to result in a Material Adverse Effect (as defined below).
For the purpose of this Agreement, and in relation to ONB and its
subsidiaries, a Material Adverse Effect means any effect that (i) is material
and adverse to the financial position, results of operations or business of ONB
and its subsidiaries taken as a whole, or (ii) would materially impair the
ability of ONB to perform its obligations under this Agreement or otherwise
materially threaten or materially impede the consummation of the Merger and the
other transactions contemplated by this Agreement; provided, however, that
Material Adverse Effect shall not be deemed to include the impact of (a) changes
in banking and similar laws of general applicability or interpretations thereof
by courts or governmental authorities, (b) changes in generally accepted
accounting principles or regulatory accounting requirements applicable to banks
and their holding companies generally, (c) any modifications or changes to
valuation policies and practices in connection with the Merger or restructuring
charges taken in connection with the Merger, in each case in accordance with
generally accepted accounting principles, and (d) changes in general level of
interest rate or conditions or circumstances that affect the banking industry
generally.
-20-
<PAGE>
No representation or warranty of ONB contained in this Section 5, shall
deemed untrue or incorrect, and ONB shall not be deemed to have breached a
representation or warranty, as a consequence of the existence of any fact, event
or circumstance unless such fact, circumstances or event, individually or taken
together with all other facts, events or circumstances inconsistent with any
representation or warranty contained in this Section 5, has had or is reasonably
likely to have a Material Adverse Effect on ONB.
ONB accordingly hereby represents and warrants to ANB as follows:
5.01. Organization and Authority. ONB is a corporation duly organized
and validly existing under the laws of the State of Indiana, is a registered
bank holding company under the BHC Act, and has full power and authority
(corporate and otherwise) to own and lease its properties as presently owned and
leased and to conduct its business in the manner and by the means utilized as of
the date hereof. ONB's common stock is registered pursuant to Section 12, and
ONB is subject to the reporting requirements, of the 1934 Act. Each of ONB's
direct subsidiaries has been duly organized and is validly existing in good
standing under the laws of the jurisdiction of its organization, and has full
power and authority to own and lease its properties as presently owned and
leased and to conduct its business in the manner and by the means utilized as of
the date hereof.
5.02. Authorization. (a) ONB has the requisite corporate power and
authority to enter into this Agreement and to carry out its obligations
hereunder, subject to the fulfillment of the conditions precedent set forth in
Section 8.01 (d), (e) and (f) hereof. As of the date hereof, ONB is not aware of
any reason why the approvals set forth in Section 8.01(e) will not be received
in a timely manner and without the imposition of a condition, restriction or
requirement of the type described in Section 8.01(e). This Agreement and its
execution and delivery by ONB have been duly authorized by its Board of
Directors. Assuming due execution and delivery by ANB, this Agreement
constitutes a valid and binding obligation of ONB, subject to the conditions
precedent set forth in Section 8.01 hereof, and is enforceable in accordance
with its terms, except to the extent limited by general principles of equity and
public policy and by bankruptcy, insolvency, reorganization, liquidation,
moratorium, readjustment of debt or other laws of general application relating
to or affecting the enforcement of creditors' rights.
(b) Neither the execution of this Agreement nor consummation of the
Merger contemplated hereby: (i) conflicts with or violates ONB's Articles of
Incorporation or By-Laws; (ii) conflicts with or violates in any respect any
local, state, federal or foreign law, statute, ordinance, rule or regulation
(provided that the approvals of or filings with applicable government regulatory
agencies or authorities required for consummation of the Merger are obtained) or
any court or administrative judgment, order, injunction, writ or decree; (iii)
conflicts with, results in a breach of or constitutes a default under any note,
bond, indenture, mortgage, deed of trust, license, contract, lease, agreement,
arrangement, commitment or other instrument to which ONB is a party or by which
ONB is subject or bound; (iv) results in the creation of or gives any person,
corporation or entity the right to create any lien, charge, claim, encumbrance
or security interest, or results in the creation of any other rights or claims
of any other party (other than ANB) or any other adverse
-21-
<PAGE>
interest, upon any right, property or asset of ONB; or (v) terminates or gives
any person, corporation or entity the right to terminate, accelerate, amend,
modify or refuse to perform under any note, bond, indenture, mortgage,
agreement, contract, lease, license, arrangement, deed of trust, commitment or
other instrument to which ONB is bound or with respect to which ONB is to
perform any duties or obligations or receive any rights or benefits.
(c) Other than in connection or in compliance with applicable federal
and state banking, securities and corporation statutes, all as amended, and the
rules and regulations promulgated thereunder, no notice to, filing with,
exemption by or consent, authorization or approval of any governmental agency or
body is necessary for the consummation by ONB of the Merger contemplated by this
Agreement.
5.03. Capitalization. (a) The authorized capital stock of ONB as of the
date hereof consists of (i) 75,000,000 shares of common stock, no par value per
share, of which approximately 46,158,663 shares were issued and outstanding as
of June 30, 1999, and (ii) 2,000,000 shares of preferred stock, no shares of
which have been or are presently intended to be issued, other than in connection
with any obligations of ONB to issue such preferred stock under its
shareholders' rights plan. Such issued and outstanding shares of ONB capital
stock have been duly and validly authorized by all necessary corporate action of
ONB, are validly issued, fully paid and nonassessable, and have not been issued
in violation of any pre-emptive rights of any present or former ONB shareholder.
All of the issued and outstanding shares of common stock of ONB's subsidiaries
are owned by ONB free and clear of all liens, pledges, charges, claims,
encumbrances, restrictions, security interests, options and pre-emptive rights
and of all other rights or claims of any other person, corporation or entity
with respect thereto. Except as described in this Section 5.03, ONB has no other
authorized capital stock. Except for shares of ONB common stock to be issued in
connection with: (i) ONB's dividend reinvestment and stock purchase plan; (ii)
ONB's outstanding convertible subordinated debentures; (iii) acquisitions by ONB
of other financial institutions or holding companies; and (iv) ONB's restricted
stock plan and other employee benefit plans, ONB has no intention or obligation
to authorize or issue any other capital stock or any additional shares of ONB
capital stock.
(b) Except for shares of ONB common stock beneficially owned by its
trust affiliates, ONB has no knowledge of any person or entity who beneficially
owns 5% or more of its issued and outstanding shares of common stock.
5.04. Organizational Documents. The Articles of Incorporation and
By-Laws of ONB in force as of the date of this Agreement have been delivered to
ANB and represent true, accurate and complete copies of such corporate documents
of ONB in effect as of the date of this Agreement.
5.05. Compliance With Law. Neither ONB nor any of its subsidiaries has
engaged in any activity nor taken or omitted to take any action which has
resulted or could result in the violation of any local, state, federal or
foreign law, statute, rule, regulation, ordinance, order, restriction or
requirement or of any order, injunction, judgment, writ or decree of any court
or government agency
-22-
<PAGE>
or body. ONB and each of its subsidiaries possesses and holds all licenses,
franchises, permits, certificates and other authorizations necessary for the
continued conduct of their business without interference or interruption.
5.06. Regulatory Filings. ONB and each of its subsidiaries have filed
and will continue to file in a timely manner all required filings with the SEC,
including, but not limited to, all reports on Form 8-K, Form 10-K and Form 10-Q
and proxy statements, and with all other federal and state regulatory agencies
as required by applicable law. All filings by ONB with the SEC and with all
other federal and state regulatory agencies complied or will comply in all
respects as to form with the applicable requirements and were and will be true,
accurate and complete in all respects as of the dates of the filings, and no
such filings contained or will contain any untrue statement of a material fact
or omitted to state a material fact necessary in order to make the statements,
at the time and in the light of the circumstances under which they were made,
not false or misleading.
5.07. Litigation and Pending Proceedings. (a) There are no claims,
actions, suits, proceedings, investigations or arbitrations pending or, to the
best knowledge of ONB after due inquiry, threatened in any court or before or by
any government agency or authority, arbitration panel or otherwise (nor is there
any basis for any claim, action, suit, proceeding, litigation, investigation or
arbitration) against, by or affecting ONB or its subsidiaries which would
prevent the performance of this Agreement, declare the same unlawful or cause
the rescission hereof.
(b) Neither ONB nor any of its subsidiaries is: (i) subject to any
outstanding judgment, order, writ, injunction or decree of any court,
arbitration panel or governmental agency or authority; (ii) presently charged
with or, to the best knowledge of ONB, under governmental investigation with
respect to any actual or alleged violations of any law, statute, rule,
regulation or ordinance; or (iii) the subject of any pending or, to the best
knowledge of ONB after due inquiry, threatened proceeding by any government
regulatory agency or authority having jurisdiction over its business, assets,
capital, properties or operations.
5.08. Financial Statements and Reports. (a) ONB or its agents have
delivered to ANB copies of the following financial statements and reports of ONB
and its subsidiaries, including the notes thereto (collectively, the "ONB
Financial Statements"):
(i) Consolidated Balance Sheets and related Consolidated
Statements of Income and Consolidated Statements of Changes in
Shareholders' Equity of ONB as of and for the years ended
December 31, 1996, 1997 and 1998, and for the fiscal quarter
ended March 31, 1999; and
(ii) Consolidated Statements of Cash Flows of ONB for the years
ended December 31, 1996, 1997 and 1998 and for the fiscal
quarter ended March 31, 1999.
(b) The ONB Financial Statements present fairly the consolidated
financial position of ONB and its subsidiaries as of and at the dates shown and
the consolidated results of operations for
-23-
<PAGE>
the periods covered thereby. The ONB Financial Statements described in clauses
(i) and (ii) above, which consist of fiscal year-end information, are audited
financial statements and have been prepared in conformance with generally
accepted accounting principles applied on a consistent basis except as may
otherwise be indicated in any accountants' notes or reports with respect to such
financial statements. The ONB Financial Statements do not include any assets,
liabilities or obligations or omit to state any assets, liabilities or
obligations, absolute or contingent, or any other facts, which inclusion or
omission would render any of the ONB Financial Statements false, misleading or
inaccurate in any respect.
5.09. Shares to be Issued in Merger. The shares of ONB common stock
which ANB shareholders will be entitled to receive upon consummation of the
Merger pursuant to this Agreement will, at the Effective Time, be duly
authorized and will, when issued in accordance with this Agreement, be validly
issued, fully paid and nonassessable and will have been registered under the
Securities Act of 1933, as amended ("1933 Act") and listed for trading on the
Nasdaq National Market System.
5.10. Shareholder Approval. Approval by ONB's shareholders of the
Merger or for any other actions contemplated by this Agreement is not required.
5.11. Accuracy of Statements Made to ANB. No representation, warranty
or other statement made, or any information provided or to be provided, by ONB
in this Agreement, and no written report, statement, list, certificate,
materials or other information furnished or to be furnished by ONB to ANB
through and including the Effective Time in connection with this Agreement or
the Merger contemplated hereby (including, without limitation, any written
information which has been or shall be supplied by ONB with respect to its
financial condition, results of operations, business, assets, capital or
directors and officers for inclusion in the proxy statement-prospectus and
registration statement relating to the Merger), contains or shall contain (in
the case of information relating to the proxy statement-prospectus at the time
it is mailed to ANB's shareholders) any untrue or misleading statement of
material fact or omits or shall omit to state a material fact necessary to make
the statements contained herein or therein, in light of the circumstances in
which they are made, not false or misleading.
5.12. Broker's, Finder's or Other Fees. Except for reasonable fees of
ONB's attorneys and accountants and investment bankers, no agent, broker or
other person acting on behalf of ONB or under any authority of ONB is or shall
be entitled to any commission, broker's or finder's fee or any other form of
compensation or payment from any of the parties hereto relating to this
Agreement and the Merger contemplated hereby.
5.13. Accounting Treatment. As of the date of this Agreement, it is
aware of no reason why the Merger will fail to qualify for "pooling of
interests" accounting treatment.
5.14 Taxes, Returns and Reports. Except as set forth in the Disclosure
Schedule, ONB has since January 1, 1995 (a) duly filed all federal, state, local
and foreign tax returns of every type and
-24-
<PAGE>
kind required to be filed, and each such return is true, accurate and complete
in all respects; (b) paid or otherwise adequately reserved in accordance with
generally accepted accounting principles for all taxes, assessments and other
governmental charges due or claimed to be due upon ONB or its income, properties
or assets; and (c) not requested an extension of time for any such payments
(which extension is still in force). ONB has established, and shall establish in
its subsequent financial statements, in accordance with generally accepted
accounting principles, a reserve for taxes in the ONB Financial Statements
adequate to cover all of its tax liabilities (including, without limitation,
income taxes, payroll taxes and withholding, and franchise fees) for the periods
then ending. ONB does not have, nor will it have, any liability for taxes of any
nature for or with respect to the operation of their respective businesses,
including the business of any subsidiary, or ownership of their assets,
including the assets of any subsidiary, from the date hereof up to and including
the Effective Time, except to the extent set forth in its subsequent financial
statements or as accrued or reserved for on the books and records of ONB. ONB is
not currently under audit by any state or federal taxing authority. No federal,
state or local tax returns of ONB have been audited by any taxing authority
during the past five (5) years.
5.14. Employee Benefit Plans. (a) With respect to the employee benefit
plans, as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), sponsored or otherwise maintained by ONB or any
of its subsidiaries, whether written or oral, in which ONB or any of its
subsidiaries participates as a participating employer; to which ONB or any of
its subsidiaries contributes and including any such plans which within the
preceding six years have been terminated, merged into another plan of ONB or any
of its subsidiaries, frozen or discontinued (collectively, "ONB Plans"): (i) all
such ONB Plans have been, in all respects, maintained in compliance with the
requirements prescribed by all applicable statutes, orders and governmental
rules or regulations, including, without limitation, ERISA, the Code, and
Treasury and Labor Regulations promulgated thereunder, (ii) all ONB Plans
intended to constitute tax-qualified plans under Section 401(a) of the Code have
received favorable determination letters from the Internal Revenue Service
("Service") with respect to "TRA" (as defined in Section 1 of Rev. Proc. 93-39),
and ONB is not aware of any circumstances likely to result in revocation of any
such favorable determination letter; (iii) except for the ONB common stock held
by its trustee as an asset of the ONB Employee Stock Ownership Plan and the ONB
Employees' Retirement Plan, no ONB Plan (or its related trust) holds any stock
or other securities of ONB or any related or affiliated person or entity;(iv)
ONB has not engaged in any transaction that may subject ONB, or any ONB Plan, to
a civil penalty imposed by Section 502 of ERISA; (v) no prohibited transaction
(as defined in Section 406 of ERISA and as defined in Section 4975(c) of the
Code) has occurred with respect to any ONB Plan; (vi) to the best knowledge of
ONB, there are no actions, suits, proceedings or claims pending (other than
routine claims for benefits) or threatened, against ONB, any of its
subsidiaries, any ONB Plan, any fiduciary of any ONB Plan or the assets of any
ONB Plan as to which ONB would have liability.
(b) ONB has made available to ANB true, accurate and complete copies of
the following (including all plans and programs which have been terminated): (i)
pension, retirement, profit-sharing, savings, stock purchase, stock bonus, stock
ownership, stock option and stock appreciation
-25-
<PAGE>
right plans and all amendments thereto and all summary plan descriptions thereof
(including any modifications thereto); (ii) all employment, deferred
compensation (whether funded or unfunded), salary continuation, consulting,
bonus, severance and collective bargaining agreements, arrangements or
understandings; (iii) all executive and other incentive compensation plans,
programs and agreements; (iv) all group insurance and health insurance
contracts, policies or plans; and (v) all other incentive, welfare or employee
benefit plans, or agreements, maintained or sponsored, participated in, or
contributed to by ONB or any of its subsidiaries for its current or former
directors, officers or employees.
(c) No current or former director, officer or employee of ONB or any of
its subsidiaries is entitled to any benefit under any welfare benefit plans (as
defined in Section 3(1) of ERISA) after termination of employment with ANB,
except that such individuals may be entitled to continue their group health care
coverage pursuant to the retiree health coverage provisions of the ONB
Corporation Group Health Plan or pursuant to Section 4980B of the Code if they
pay the cost of such coverage pursuant to the applicable requirements of the
Plan or the Code with respect thereto, whichever is applicable.
(d) With respect to any group health plan (as defined in Section 607(1)
of ERISA) sponsored or maintained by ONB or any of its subsidiaries, in which
ONB or any of its subsidiaries participates as a participating employer or to
which ONB or any of its subsidiaries contributes, no director, officer, employee
or agent of ONB or any of its subsidiaries has engaged in any action or failed
to act in such a manner that, as a result of such action or failure to act,
would cause a tax to be imposed on ONB or any of its subsidiaries under Code
Section 4980B(a). With respect to all such plans, all applicable provisions of
Section 4980B of the Code and Section 601 of ERISA have been complied with in
all respects by ONB and its subsidiaries.
5.16 Books and Records. The books and records of ONB have been fully,
properly and accurately maintained.
5.17 Year 2000. (a) All devices, systems, machinery, information
technology, computer software and hardware, and other date sensitive technology
(collectively, the "Systems") necessary for ONB to carry on its business as
presently conducted and as contemplated to be conducted in the future are Year
2000 Compliant or will be Year 2000 Compliant within a period of time calculated
to result in no disruption of any of ONB's business operations. Neither ONB nor
any of its banking subsidiaries has received, or reasonably expects to receive,
a deficiency notice for any federal or state regulator relating to their failure
to be Year 2000 Compliant. For purposes of this Section 5.17, "Year 2000
Compliant" means that such Systems are designed to be used prior to, during and
after the Gregorian calendar year 2000 A.D. and will operate during each such
time period without error relating to date data, specifically including any
error relating to, or the product of, date data which represents or references
different centuries or more than one century.
(b) ONB has:
-26-
<PAGE>
(i) undertaken a detailed inventory, review, and
assessment of all areas within its business and
operations that could be adversely affected by the
failure of ONB to be Year 2000 Compliant on a timely
basis;
(ii) developed a detailed plan and timeline for becoming
Year 2000 Compliant on a timely basis; and
(iii) to date, implemented that plan in accordance with
that timetable.
5.18. Nonsurvival of Representations and Warranties. The
representations and warranties of ONB contained in this Agreement shall expire
at the earlier of the termination of this Agreement and the Effective Time and,
thereafter, ONB and all directors, officers and employees of ONB shall have no
further liability with respect thereto, except for fraud or for false or
misleading statements made intentionally or knowingly in connection with such
representations and warranties.
SECTION 6
COVENANTS OF ANB
ANB covenants and agrees with ONB, and covenants and agrees to cause
the Subsidiaries, to act as follows:
6.01. Shareholder Approval. Subject to Section 6.06 hereof, ANB shall
submit this Agreement to its shareholders for approval and adoption at a meeting
to be called and held in accordance with applicable law and the Articles of
Incorporation and By-Laws of ANB at the earliest possible reasonable date.
Subject to Section 6.06 hereof, the Board of Directors of ANB shall recommend to
ANB's shareholders that such shareholders approve and adopt this Agreement and
the Merger contemplated hereby and shall solicit proxies voting in favor of this
Agreement from ANB's shareholders.
6.02. Other Approvals. (a) ANB and the Subsidiaries shall proceed
expeditiously, cooperate fully and use its best efforts to assist ONB in
procuring upon reasonable terms and conditions all consents, authorizations,
approvals, registrations and certificates, in completing all filings and
applications and in satisfying all other requirements prescribed by law which
are necessary for consummation of the Merger on the terms and conditions
provided in this Agreement at the earliest possible reasonable date.
(b) Any materials or information provided by ANB or any Subsidiary to
ONB for use by ONB in any filing with any state or federal regulatory agency or
authority shall not contain any untrue or misleading statement of material fact
or shall omit to state a material fact necessary to make the statements
contained therein, in light of the circumstances in which they are made, not
false or misleading.
-27-
<PAGE>
6.03. Conduct of Business. (a) On and after the date of this Agreement
and until the Effective Time or until this Agreement shall be terminated as
herein provided, neither ANB nor any Subsidiary shall, without the prior written
consent of ONB:
(i) make any changes in its capital stock accounts
(including, without limitation, any stock split,
stock dividend, recapitalization or
reclassification), except for the ANB DRIP and the
issuance of up to 391,624 shares of ANB Common Stock
under the Stock Option Plans;
(ii) authorize a class of stock or issue, or authorize the
issuance of, securities other than or in addition to
the issued and outstanding common stock as set forth
in Section 4.03 hereof;
(iii) distribute or pay any dividends on its shares of
common stock, or make any other distribution to its
shareholders except that (A) American National Bank,
Peoples Bank, Farmers State Bank and ANTIM may pay
cash dividends to ANB in the ordinary course of
business for payment of reasonable and necessary
business and operating expenses of ANB and to provide
funds for ANB's dividends to its shareholders in
accordance with this Agreement, and (B) ANB may pay
to its shareholders its usual and customary quarterly
cash dividend of no greater than nineteen cents
($0.19) per share for any quarterly period, provided
that no dividend may be paid for the quarterly period
in which the Merger is consummated if, during such
period, ANB shareholders will become entitled to
receive dividends on their shares of ONB common stock
received pursuant to this Agreement;
(iv) redeem any of its outstanding shares of common stock;
(v) merge, combine or consolidate or effect a share
exchange with or sell its assets or any of its
securities to any other person, corporation or entity
or enter into any other similar transaction not in
the ordinary course of business;
(vi) purchase any assets or securities or assume any
liabilities of another bank holding company, bank,
corporation or other entity, except in the ordinary
course of business necessary to manage their
investment portfolios;
(vii) make any loan or commitment to lend money, issue any
letter of credit or accept any deposit, except in the
ordinary course of business in accordance with its
existing banking practices;
(viii) except for the acquisition or disposition in the
ordinary course of business of other real estate
owned, acquire or dispose of any real or personal
property (excluding the investment portfolio of the
Banks) or fixed asset constituting
-28-
<PAGE>
a capital investment in excess of $100,000
individually or $200,000 in the aggregate;
(ix) subject any of its properties or assets to a
mortgage, lien, claim, charge, option, restriction,
security interest or encumbrance, except for tax and
other liens which arise by operation of law and with
respect to which payment is not past due or is being
contested in good faith by appropriate proceedings
and except for pledges or liens: (i) required to be
granted in connection with acceptance by ANB or any
Subsidiary of government deposits; (ii) granted in
connection with repurchase or reverse repurchase
agreements; or (iii) otherwise incurred in the
ordinary course of the conduct of its business;
(x) promote to a new position or increase the rate of
compensation or enter into any agreement to promote
to a new position or increase the rate of
compensation, of any director, officer or employee of
ANB or any Subsidiary (except for promotions and
compensation increases in the ordinary course of
business and in accordance with past practices and
established employment policies of ANB and the
Subsidiaries and other than pursuant to an employee
retention program, which has been disclosed to ONB);
(xi) execute, create, institute, modify, amend or
terminate (except with respect to any amendments to
the ANB Plans required by law, rule or regulation)
any pension, retirement, savings, stock purchase,
stock bonus, stock ownership, stock option, stock
appreciation or depreciation rights or profit sharing
plans; any employment, deferred compensation,
consulting, bonus or collective bargaining agreement;
any group insurance or health contract or policy; or
any other incentive, retirement, welfare or employee
welfare benefit plan, agreement or understanding for
current or former directors, officers or employees of
ANB or any Subsidiary; or change the level of
benefits or payments under any of the foregoing or
increase or decrease any severance or termination of
pay benefits or any other fringe or employee benefits
other than as required by law or regulatory
authorities or the terms of any of the foregoing;
(xii) modify, amend or institute new employment policies or
practices, or enter into, renew or extend any
employment, indemnity, reimbursement, consulting,
compensation or severance agreements with respect to
any present or former directors, officers or
employees of ANB or any Subsidiary;
(xiii) hire or employ any new or additional employees of ANB
or any Subsidiary, except those which are reasonably
necessary for the proper operation of their
respective businesses;
-29-
<PAGE>
(xiv) elect or appoint any executive officers or directors
of ANB or any Subsidiary who are not presently
serving in such capacities;
(xv) amend, modify or restate ANB's, Peoples Bank's,
Farmers State Bank's, or ANB Financial's Articles of
Incorporation or By-Laws or American National Bank's
or ANTIM's Articles of Association or By-Laws from
those in effect on the date of this Agreement and as
delivered to ONB hereunder;
(xvi) give, dispose of, sell, convey or transfer; assign,
hypothecate, pledge or encumber; or grant a security
interest in or option to or right to acquire any
shares of common stock or substantially all of the
assets, of ANB or any Subsidiary, or enter into any
agreement or commitment relative to the foregoing;
(xvii) fail to continue to make additions to in accordance
with the Banks' past practices and to otherwise
maintain in all respects the Banks' reserve for loan
and lease losses, or any other reserve account, in
accordance with safe, sound, and prudent banking
practices and in accordance with generally accepted
accounting principles applied on a consistent basis;
(xviii) fail to accrue, pay, discharge and satisfy all debts,
liabilities, obligations and expenses, including, but
not limited to, trade payables, incurred in the
regular and ordinary course of business as such
debts, liabilities, obligations and expenses become
due;
(xix) except for obligations disclosed within this
Agreement or the Disclosure Statement, trade payables
and similar liabilities and obligations incurred in
the ordinary course of business and the payment,
discharge or satisfaction in the ordinary course of
business of liabilities reflected in the ANB
Financial Statements or the Subsequent ANB Financial
Statements, (A) borrow any money (except for capital
purposes related to the Subsidiaries), (B) incur any
indebtedness including, without limitation, through
the issuance of debentures, or (C) incur any
liability or obligation (whether absolute, accrued,
contingent or otherwise), in an aggregate amount
exceeding $50,000 (other than as contemplated by
Section 6.03(a)(vii) hereof and legal, accounting and
fees related to the Merger);
(xx) open, close, move or, in any material respect,
expand, diminish, renovate, alter or change any of
its offices or branches; or
(xxi) pay or commit to pay any management or consulting or
other similar type of fees other than in the ordinary
course of business.
-30-
<PAGE>
(b) ANB and the Subsidiaries shall maintain, or cause to be maintained,
in full force and effect, insurance on their assets, properties and operations,
fidelity coverage and directors' and officers' liability insurance on their
directors, officers and employees in such amounts and with regard to such
liabilities and hazards as are currently insured by ANB and the Subsidiaries as
of the date of this Agreement.
6.04. Preservation of Business. On and after the date of this Agreement
and until the Effective Time or until this Agreement is terminated as herein
provided, ANB and the Subsidiaries shall: (a) carry on their business
substantially in the manner as is presently being conducted and in the ordinary
course of business; (b) use their reasonable best efforts to preserve their
business organization intact, keep available the services of the present
officers and employees and preserve their present relationships with customers
and persons having business dealings with it; (c) maintain all of the properties
and assets that each of them owns or utilizes in good operating condition and
repair, reasonable wear and tear excepted, and maintain insurance upon such
properties and assets in amounts and kinds comparable to that in effect on the
date of this Agreement; (d) maintain their books, records and accounts in the
usual, regular and ordinary manner, on a basis consistent with prior years and
in compliance with all material respects with all statutes, laws, rules and
regulations applicable to them and to the conduct of their business; and (e) not
knowingly do or fail to do anything which will cause a breach of, or default in,
any contract, agreement, commitment, obligation, understanding, arrangement,
lease or license to which any one of them is a party or by which any one of them
is or may be subject or bound.
6.05. Restrictions Regarding Affiliates. ANB shall, within thirty (30)
days after the date of this Agreement and promptly thereafter until the
Effective Time to reflect any changes, provide ONB with a list identifying each
person who may be deemed to be an affiliate of ANB for purposes of Rule 145
under the 1933 Act. On or prior to the date of this Agreement, and thereafter as
may be required for a person who may be deemed an affiliate of ANB following the
date of this Agreement, ANB shall obtain from each director, executive officer
and other person who may be deemed to be such an affiliate of ANB to deliver to
ONB on or prior to the date of this Agreement, and thereafter as may be required
for any other person who may be deemed an affiliate of ANB following the date of
this Agreement, a written agreement, substantially in the form as attached
hereto as Exhibit B, providing that such person: (a) shall not sell, pledge,
transfer, dispose of or otherwise reduce his or her market risk with respect to
the shares of ANB Common Stock directly or indirectly owned or held by such
person during the thirty (30) day period prior to the Effective Time; and (b)
will not sell, pledge, transfer, dispose of or otherwise reduce his or her
market risk with respect to the shares of ONB common stock to be received by
such person pursuant to this Agreement: (i) until such time as financial results
covering at least 30 days of combined operations of ONB and ANB have been
published as and when required and within the meaning of Section 201.01 of the
SEC's Codification of Financial Reporting Policies, and (ii) unless such sales
are pursuant to an effective Registration Statement under the 1933 Act or
pursuant to Rule 145 under the 1933 Act or another exemption from registration
under the 1933 Act. On or prior to the Effective Time, ANB shall use its best
efforts to obtain from each director, executive officer and other person who may
be deemed to be an affiliate of ANB for purposes of Rule 145 under the 1933 Act
to
-31-
<PAGE>
deliver to ONB at the Effective Time a certificate signed by each such person
certifying to the effect that such person has complied with the terms and
conditions of their written agreement delivered to ONB pursuant to this Section
6.05.
6.06. Other Negotiations. (a) On and after the date of this Agreement
and until the Effective Time or until this Agreement is terminated as herein
provided, except with the prior written approval of ONB, neither ANB nor any
Subsidiary shall permit or authorize their respective directors, officers,
employees, agents or representatives to, directly or indirectly, initiate,
solicit or encourage, or provide information to, any corporation, association,
partnership, person or other entity or group concerning any merger,
consolidation, share exchange, combination, purchase or sale of substantial
assets, sale of shares of common stock (or securities convertible or
exchangeable into or otherwise evidencing, or any agreement or instrument
evidencing the right to acquire, capital stock) or similar transaction relating
to ANB or any Subsidiary or to which ANB or any Subsidiary may become a party
(all such transactions are hereinafter referred to as "Acquisition
Transactions").
(b) ANB and the Subsidiaries shall promptly communicate to ONB the
terms of any proposal or offer which any one of them may receive with respect to
an Acquisition Transaction. ANB or any Subsidiary may, in response to an
unsolicited written proposal with respect to an Acquisition Transaction from a
third party, furnish information to, and negotiate, explore or otherwise engage
in substantive discussions with such third party, and enter into any such
agreement, arrangement or understandings, in each case only if ANB's Board of
Directors determines in good faith by majority vote, after consultation with its
financial advisors and outside legal counsel, that failing to take such action
would be a breach of the fiduciary duties of ANB's Board of Directors.
6.07. Press Releases. Except as required by law, neither ANB nor any
Subsidiary shall issue any press releases or make any other public announcements
or disclosures relating to the Merger without the prior consent of ONB, which
consent shall not be unreasonably withheld.
6.08. Disclosure Schedule Update. ANB shall promptly supplement, amend
and update, upon the occurrence of any change prior to the Effective Time, and
as of the Effective Time, the Disclosure Schedule with respect to any matters or
events hereafter arising which, if in existence or having occurred as of the
date of this Agreement, would have been required to be set forth or described in
the Disclosure Schedule or this Agreement and including, without limitation, any
fact which, if existing or known as of the date hereof, would have made any of
the representations or warranties of ANB contained herein incorrect, untrue or
misleading.
6.09. Information, Access Thereto, Confidentiality. ONB and its
respective representatives and agents shall, on reasonable notice and during
normal business hours prior to the Effective Time, have full and continuing
access to the properties, facilities, operations, books and records of ANB and
the Subsidiaries. ONB and its respective representatives and agents may, prior
to the Effective Time, make or cause to be made such reasonable investigation of
the operations, books, records and properties of ANB and the Subsidiaries and of
their financial and legal condition as deemed necessary or advisable to
familiarize themselves with such operations, books, records, properties and
-32-
<PAGE>
other matters; provided, however, that such access or investigation shall not
interfere with the normal business operations of ANB and the Subsidiaries. Upon
request, ANB and the Subsidiaries shall furnish ONB or its respective
representatives or agents, their attorneys' responses to external auditors
requests for information, management letters received from their external
auditors and such financial, loan and operating data and other information
reasonably requested by ONB which has been or is developed by ANB or any
Subsidiary, their auditors, accountants or attorneys (provided with respect to
attorneys, such disclosure would not result in the waiver by ANB or any
Subsidiary of any claim of attorney-client privilege), and will permit ONB and
its respective representatives or agents to discuss such information directly
with any individual or firm performing auditing or accounting functions for ANB
and the Subsidiaries, and such auditors and accountants shall be directed to
furnish copies of any reports or financial information as developed to ONB or
its respective representatives or agents. No investigation by ONB shall affect
the representations and warranties made by ANB herein. ONB shall not use any
such information obtained pursuant to this Agreement for any purpose unrelated
to the Merger. Any confidential information or trade secrets received by ONB or
its representatives or agents in the course of such examination (whether
conducted prior to or after the date of this Agreement) shall be treated
confidentially, and any correspondence, memoranda, records, copies, documents
and electronic or other media of any kind containing such confidential
information or trade secrets or both shall be destroyed by ONB or, at ANB's
request, returned to ANB in the event this Agreement is terminated as provided
in Section 9 hereof. This Section 6.09 shall not require the disclosure of any
information to ONB which would be prohibited by law.
6.10. Subsequent ANB Financial Statements. As soon as reasonably
available after the date of this Agreement, ANB shall deliver to ONB the monthly
unaudited consolidated balance sheets and profit and loss statements of ANB
prepared for its internal use, Call Reports of the Banks and ANTIM for each
quarterly period completed prior to the Effective Time, and all other financial
reports or statements submitted to regulatory authorities after the date hereof,
to the extent permitted by law (collectively, "Subsequent ANB Financial
Statements"). The Subsequent ANB Financial Statements shall be prepared on a
basis consistent with past accounting practices and generally accepted
accounting principles applied on a consistent basis to the extent applicable and
shall present fairly the financial condition and results of operations as of the
dates and for the periods presented, subject to year end audit adjustments and
the absence of footnotes for interim statements. The Subsequent ANB Financial
Statements, including the notes thereto, will not include any assets,
liabilities or obligations or omit to state any assets, liabilities or
obligations, absolute or contingent, or any other facts, which inclusion or
omission would render such financial statements inaccurate, incomplete or
misleading in any respect.
6.11. Employee Benefits. Neither the terms of Section 7.03 hereof nor
the provision of any employee benefits by ONB or any of its subsidiaries to
employees of ANB shall: (a) create any employment contract, agreement or
understanding with or employment rights for, or constitute a commitment or
obligation of employment to, any of the officers or employees of ANB; or (b)
prohibit or restrict ONB or its subsidiaries, whether before or after the
Effective Time, from
-33-
<PAGE>
changing, amending or terminating any employee benefits provided to its
employees from time to time.
6.12. Merger of ANB Corporation Savings and Incentive Plan. As soon as
administratively feasible after the Effective Time, the ANB Corporation Savings
and Incentive Plan ("ANB 401(k) Plan") shall be merged with and into the ONB
Savings Plan. All account balances maintained under the ANB 401(k) Plan shall
become fully vested and nonforfeitable on the day on which the plan merger
occurs. From the date of this Agreement through the date on which the ANB 401(k)
Plan is merged into the ONB Savings Plan, ANB and the Subsidiaries may continue
to make contributions to the ANB 401(k) Plan so long as such contributions are
comparable in amount to any past contributions to such plan.
6.13. Merger of ANB Corporation Employees' Pension Plan. As of the
first January 1 or July 1 coinciding with or next following the Effective Time,
or as soon as administratively feasible thereafter, the ANB Corporation
Employee's Pension Plan ("ANB Pension Plan") shall be merged with and into the
ONB Employees' Retirement Plan ("ONB Pension Plan"). All benefits accrued under
the ANB Pension Plan shall be fully vested and non-forfeitable on the day on
which the plan merger occurs. From the date of this Agreement through the date
on which the ANB Pension Plan is merged into the ONB Pension Plan, ANB and its
Subsidiaries shall contribute to the ANB Pension Plan at least the amounts
calculated by the plan's actuary to be necessary to prevent an accumulated
funding deficiency within the meaning of the Section 412 of the Code.
6.14 Termination of Group Health Plan. The ANB Corporation Group Health
Plan ("ANB Health Plan") shall be terminated as of the last day of the calendar
month in which the Effective Time occurs. From the date of this Agreement
through the date as of which the ANB Health Plan terminates, ANB and the
Subsidiaries shall continue to fund all expenses of the plan, including but not
limited to, benefits, stop loss insurance premiums and administrative fees,
attributable to claims incurred on or prior to the date the ANB Health Plan
terminates. As of the date the ANB Health Plan terminates, ANB and the
Subsidiaries shall have funded a reserve account for the purpose of paying
covered claims incurred, but not yet paid, as of the plan termination date. The
amount of such reserve account shall not be less than twenty-five percent (25%)
of the total claims paid for the plan year ending September 30, 1999.
6.15 Termination of Long Term Disability Plan. The ANB Corporation Long
Term Disability Plan ("ANB LTD Plan") shall be terminated as of the Effective
Time, or as soon as administratively feasible thereafter, but such termination
shall not affect the benefits payable to any ANB covered employee who became
entitled to a disability benefit under the ANB LTD Plan prior to the termination
of said plan. From the date of this Agreement through the date as of which the
ANB LTD Plan terminates, ANB and the Subsidiaries shall continue to pay the
insurance premiums necessary to continue the ANB LTD Plan benefits.
6.16 Termination of Sec. 125 Plan. The ANB Corporation Sec. 125 Plan
("ANB Cafeteria Plan') shall be terminated as of same date the ANB Health Plan
is terminated. From the date of this
-34-
<PAGE>
Agreement through the date as of which the ANB Cafeteria Plan terminates, ANB
and the Subsidiaries shall continue to contribute to such plan the pre-tax
amounts which the ANB Cafeteria Plan participants elect to defer from
compensation in order to pay the employee portion of the cost of coverage under
the ANB Health Plan.
6.17 Termination of ANB Corporation Group Life Plan. The ANB
Corporation Group Term Life Insurance Plan ("ANB Group Life Plan") shall be
terminated as of the first day of the first calendar month following the
Effective Time or as soon as administratively feasible thereafter. From the date
of this Agreement through the date on which the ANB Group Life Plan terminates,
ANB and the Subsidiaries shall continue to pay the insurance premiums necessary
to continue the death benefits provided by such plan.
6.18 Termination of the ANB Corporation SERP. The ANB Corporation
Supplemental Executive Retirement Plan (the "ANB SERP") shall be terminated as
of the day on which the Effective Time occurs. No employee of ANB or the
Subsidiaries who has been designated as an eligible participant under the ANB
SERP shall accrue any additional benefits thereunder subsequent to the December
31 coincident with or next preceding the date the ANB SERP terminates. The
accumulated benefit obligations in the ANB Corporation SERP shall, upon the
Effective Time, be transferred to, and shall become a benefit obligation under
the ONB Non-Qualified Defined Contribution Plan For Executive Employees of ONB.
Such transferred benefit shall thereafter be administered pursuant to the terms
and conditions of the transferee plan.
6.19 Termination of the ANB Corporation Directors' Plan. The ANB
Corporation Directors' Deferred Compensation Plan (the "ANB Directors' Plan"),
and all participation agreements in effect thereunder, shall be terminated as of
the Effective Time. From the date of this Agreement through the date on which
the ANB Directors' Plan is terminated, ANB and the Subsidiaries may continue to
allow participants thereunder to elect to defer the receipt of all or a portion
of the director fees he or she would otherwise receive and to credit such fees
to the director's individual account under the plan. Upon the termination of the
ANB Directors' Plan the balance in each individual account thereunder shall be
distributed in a lump sum payment to the participant entitled thereto. The Board
of Directors of ANB, and the Board of Directors of each of the Subsidiaries
which is participating in the ANB Directors' Plan, shall, prior to the day on
which the Effective Time occurs, amend or cause the amendment of such plan to
provide that upon the termination of such plan the accrued benefits thereunder
shall be immediately paid in a lump sum payment to the individuals entitled to
such accrued benefits, subject, however, to the terms of the ANB Directors'
Plan.
6.20 Disposition of the ANB Corporation Stock Investment Plan. From the
date of this Agreement through the day on which the Effective Time occurs, the
Stock Investment Plan of ANB Corporation ("ANB Stock Investment Plan") shall
remain in effect, shall continue to be funded by both employer and employee
contributions, and shall continue to be administered, all in accordance with its
current provisions. As of the day on which the Effective Time occurs, the shares
of ANB Common Stock owned by each participant under said plan shall be converted
into whole shares of
-35-
<PAGE>
ONB common stock pursuant to the applicable provisions of Section 2 of this
Agreement. Fractional share interests resulting from such conversion shall be
paid in cash at such time and in such amount determined under Section 2.02 of
this Agreement. ANB shall cause the administrator of the ANB Stock Investment
Plan to thereafter transfer the shares of ONB common stock held on behalf of
each participant in the ANB Stock Investment Plan to the administrator of the
ONB Direct Stock Purchase Plan and Dividend Reinvestment Plan ("ONB Stock
Purchase Plan"). Upon receipt of such shares the administrator of the ONB Stock
Purchase Plan shall credit the number of such shares, on a per participant
basis, to the individual account established on the participant's behalf under
the ONB Stock Purchase Plan by the administrator thereof. Thereafter such
converted shares shall be held, administered and distributed or surrendered
pursuant to the applicable provisions of the ONB Stock Purchase Plan; provided,
however, that the distribution rights of the participants under the ANB Stock
Investment Plan shall not be materially adversely affected by the transfer of
the converted shares to the ONB Stock Purchase Plan.
6.21 Termination of ANB Corporation Severance Policy. The ANB
Corporation Severance Policy, covering eligible employees of ANB, American
National Bank and ANTIM, shall be terminated as of the Effective Time. With
respect to an individual covered by such severance policy on the date of its
termination, in the event that he or she incurs, within twelve months from the
Effective Time, (i) the involuntary termination of employment for reasons other
than cause, (ii) a material reduction in compensation or (iii) without the prior
written consent of such person, the assignment to him or her of any duties
materially inconsistent with his or her duties and responsibilities prior to the
date of this Agreement, he or she shall be entitled to receive a severance
benefit. The severance benefit shall be a salary continuation the amount of
which shall be the greater of (i) the amount payable to such individual under
the salary continuation provisions of the terminated ANB Corporation Severance
Policy had such policy not been terminated, or (ii) the amount payable to such
individual under the salary continuation provisions of the ONB Severance Policy,
if any, then applicable to such individual. An individual who is entitled to a
benefit under the ONB Severance Policy shall also be entitled to a continuation
of employee benefits as determined solely by the applicable provisions of the
ONB Severance Policy. The Board of Directors of each of ANB, American National
Bank and ANTIM, shall, prior to the execution of this Agreement, amend, or cause
the amendment of, the ANB Severance Policy to provide that the sole events for
which a severance benefit is payable thereunder shall be (i) the involuntary
termination of a covered individual's employment for reasons other than cause,
(ii) a material reduction in compensation or (iii) without the prior written
consent of an employee, the assignment to him or her of any duties materially
inconsistent with his or her duties and responsibilities prior to the date of
this Agreement.
6.22. Disposition of Farmers State Bank Plans. ANB shall use its best
efforts to complete the merger of the Farmers State Bank of Union City, Ohio,
Employees' 401(k) Plan with and into the ANB 401(k) Plan, and shall complete the
merger of the Farmers State Bank of Union City, Ohio Employees' Pension Plan
with and into the ANB Pension Plan, no later than December 31, 1999 with respect
to each such plan merger.
-36-
<PAGE>
6.23 Disposition of ANB Stock Option Plans. At or prior to the
Effective Time, ANB shall use its best efforts, including using its best efforts
to obtain any necessary consents from optionees, with respect to the Stock
Option Plans to permit the conversion of each outstanding option to acquire
shares of common stock of ANB Corporation which was properly granted pursuant to
a stock option agreement executed in accordance with the provisions of the Stock
Option Plans by ONB pursuant to Section 7.05 of this Agreement, and to permit
ONB to assume the sponsorship and administration of the Stock Option Plans. ANB
shall also take all action necessary to amend the Stock Option Plans to
eliminate additional automatic or discretionary grants or awards under such
plans subsequent to the Effective Time.
6.24. Year 2000. ANB shall:
(a) Additional Information. Furnish such additional information,
statements and other reports with respect to ANB's Year 2000 compliance (and its
approach to and progress towards achieving compliance) discussed in Section 4.24
hereof as ONB may reasonably request from time to time.
(b) Notice of Changes. In the event of any change in circumstances that
causes or will likely cause any of ANB's representations and warranties set
forth in Section 4.24 hereof ("Year 2000 Compliance") to no longer be true and
would result in a Material Adverse Effect (hereinafter referred to as a "Change
in Circumstances"), then ANB shall promptly, and in any event within ten (10)
days of receipt of information regarding a Change in Circumstances, provide ONB
with written notice ("Notice") that describes in reasonable detail the Change in
Circumstances and how such Change in Circumstances caused or will likely cause
ANB's representations and warranties set forth in Section 4.24 hereof to no
longer be true. ANB shall, within ten (10) days of a request, also provide ONB
with any additional information ONB reasonably requests of ANB in connection
with the Notice and/or a Change in Circumstances.
(c) Audits. Give any representative of ONB reasonable access during all
business hours to, and permit such representative to examine, copy or make
excerpts from, any and all books, records and documents in the possession of ANB
and the Subsidiaries and relating to their affairs, and to inspect any of the
properties and Systems of ANB and the Subsidiaries, and to project test the
Systems to determine if they are Year 2000 Compliant in an integrated
environment, all at the sole cost and expense of ONB.
6.25. SEC and Other Reports. Promptly upon its becoming available,
furnish to ONB one (1) copy of each financial statement, report, notice, or
proxy statement sent by ANB to its shareholders generally and of each regular or
periodic report, registration statement or prospectus filed by ANB with Nasdaq
or the SEC or any successor agency, and of any order issued by any Governmental
Authority in any proceeding to which ANB is a party. For purposes of this
provision, "Governmental Authority" shall mean any government (or any political
subdivision or jurisdiction thereof), court, bureau, agency or other
governmental entity having or asserting jurisdiction over ANB or any of its
business, operations or properties.
-37-
<PAGE>
6.26. Adverse Actions. ANB shall not (a) take any action while knowing
that such action would, or is reasonably likely to, prevent or impede the Merger
from qualifying (i) for "pooling of interests" accounting treatment or (ii) as a
reorganization within the meaning of Section 368 of the Code; or (b) knowingly
take any action that is intended or is reasonably likely to result in (i) any of
its representations and warranties set forth in this Agreement being or becoming
untrue, subject to the standard set out in the second paragraph to Section 4, in
any respect at any time at or prior to the Effective Time, (ii) any of the
conditions to the Merger set forth in Section 8 not being satisfied, (iii) a
material violation of any provision of this Agreement or (iv) a delay in the
consummation of the Merger except, in each case, as may be required by
applicable law or regulation.
SECTION 7
COVENANTS OF ONB
ONB covenants and agrees with ANB as follows:
7.01. Approvals. ONB shall have primary responsibility for the
preparation, filing and costs of all bank holding company and bank regulatory
applications required for consummation of the Merger. ONB shall file all bank
holding company and bank regulatory applications as soon as practicable after
the execution of this Agreement. ONB shall provide to ANB's legal counsel a
reasonable opportunity to review such applications prior to their filing and
shall provide to ANB's legal counsel copies of all applications filed and copies
of all material written communications with all state and federal bank
regulatory agencies relating to such applications. ONB shall proceed
expeditiously, cooperate fully and use its best efforts to procure, upon terms
and conditions reasonably acceptable to ONB, all consents, authorizations,
approvals, registrations and certificates, to complete all filings and
applications and to satisfy all other requirements prescribed by law which are
necessary for consummation of the Merger on the terms and conditions provided in
this Agreement at the earliest possible reasonable date.
7.02. SEC Registration. (a) ONB shall file with the SEC as soon as
practicable after the execution of this Agreement a Registration Statement on an
appropriate form under the 1933 Act covering the shares of ONB common stock to
be issued pursuant to this Agreement and shall use its best efforts to cause the
same to become effective and thereafter, until the Effective Time or termination
of this Agreement, to keep the same effective and, if necessary, amend and
supplement the same. Such Registration Statement and any amendments and
supplements thereto are referred to in this Agreement as the "Registration
Statement". The Registration Statement shall include a proxy
statement-prospectus reasonably acceptable to ONB and ANB, prepared for use in
connection with the meeting of shareholders of ANB referred to in Section 6.01
hereof, all in accordance with the rules and regulations of the SEC. ONB shall,
as soon as practicable after filing the Registration Statement, make all filings
required to obtain all Blue Sky exemptions, authorizations, consents or
approvals required for the issuance of ONB common stock. In advance of filing
the Registration Statement and all other filings described in Section 7.01
hereof, ONB shall provide ANB and its
-38-
<PAGE>
counsel with a copy of the Registration Statement and each such other filing and
provide an opportunity to comment thereon.
(b) Any materials or information provided by ONB in any filing with any
state or federal regulatory agency or authority shall not contain any untrue or
misleading statement of material fact or shall omit to state a material fact
necessary to make the statements contained therein, in light of the
circumstances in which they are made, not false or misleading.
(c) All filings by ONB with the SEC and with all other federal and
state regulatory agencies shall be true, accurate and complete in all material
respects as of the dates of the filings, and no such filings shall contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements, at the time and in light of the circumstances
under which they were made, not false or misleading.
(d) ONB will use reasonable best efforts to list for trading on the
Nasdaq National Market System (subject to official notice of issuance) prior to
the Effective Time, the shares of ONB common stock to be issued in the Merger.
7.03. Employee Benefit Plans. (a) As of the Effective Time, ONB will
make available to the employees of ANB and the Subsidiaries who continue as
employees of ONB or any subsidiary of ONB after the Effective Time and, further,
subject to Section 7.03(b), (c) and (d) hereof, substantially the same employee
benefits on substantially the same terms and conditions as ONB offers to
similarly situated officers and employees. Until such time as the employees of
ANB and the Subsidiaries become covered by the ONB welfare benefit plans, the
employees of ANB and the Subsidiaries shall remain covered by the ANB Plans
which cover such employees, subject to the terms of such plans. Except as
otherwise provided in Sections 6.13, 6.18 and 6.21, ONB will honor in accordance
with their terms (i) all employee benefit obligations to current and former
officers and employers and employees of ANB and the Subsidiaries accrued as of
the Effective Time and (ii) to the extent set forth in the Disclosure Schedule ,
all employee severance plans in existence on the date hereof and all employment
or severance agreements entered into prior to the date hereof to the extent set
forth in the Disclosure Schedule.
(b) Subject to the provisions of subsection (c) hereof, years of
service (as defined in the applicable ONB plan) of an officer or employee of ANB
or any Subsidiary prior to the Effective Time shall be credited, effective as of
the date on which such employees become covered by a particular ONB plan, to
each such officer or employee eligible for coverage under Section 7.03(a) hereof
for purposes of: (i) eligibility under ONB's employee welfare benefit plans;
(ii) eligibility and vesting, but not for purposes of benefit accrual or
contributions, under the ONB Employees' Retirement Plan ("ONB Pension Plan") or
under the ONB Employees' Savings and Profit Sharing Plan ("ONB Profit Sharing
Plan"); and (iii) eligibility and vesting, but not for purposes of benefit
accrual or contributions, under the ONB Employee Stock Ownership Plan ("ESOP").
Those officers and employees of ANB or any Subsidiary who otherwise meet the
eligibility requirements of the ONB Profit Sharing Plan and ESOP, based on their
age and years of service to ANB or any
-39-
<PAGE>
Subsidiary, shall become participants thereunder on the first day of the
calendar month which coincides with or next follows the Effective Time. Those
officers and employees of ANB or any Subsidiary who otherwise meet the
eligibility requirements of the ONB Pension Plan, based upon their age and years
of ANB or any Subsidiary service, shall become participants thereunder no later
than the January 1st which coincides with or next follows the Effective Time.
Those officers or employees who do not meet the eligibility requirements of the
ONB Pension Plan, ONB Profit Sharing Plan or ESOP on such dates shall become
participants thereunder on the first plan entry date under the ONB Pension Plan,
the ONB Profit Sharing Plan or ESOP, as the case may be, which coincides with or
next follows the date on which such eligibility requirements are satisfied.
(c) No full-time officer or employee of ANB or any Subsidiary serving
as of the Effective Time shall be subject to any pre-existing condition
exclusions under any of ONB's welfare benefit plans if such officer, employee or
individual was covered by the corresponding ANB welfare benefit plan on the day
immediately preceding the Effective Time.
(d) Neither the terms of this Section 7.03 nor the provision of any
employee benefits by ONB or any of its subsidiaries to employees of ANB or any
Subsidiary shall: (i) create any employment contract, agreement or understanding
with or employment rights for, or constitute a commitment or obligation of
employment to, any of the officers or employees of ANB or any Subsidiary; or
(ii) prohibit or restrict ONB or its subsidiaries, whether before or after the
Effective Time, from changing, amending or terminating any employee benefits
provided to its employees from time to time.
(e) ONB shall take any and all actions reasonably necessary to
effectuate the disposition of the ANB Plans provided by Section 6.12 through
6.23.
7.04. Employment Agreements. Following the Effective Time, ONB agrees
to honor and abide by the terms of the written employment agreements set forth
in the Disclosure Schedule, except as may be otherwise required by any
government regulatory agency.
7.05. Stock Options. (a) At the Effective Time, the obligations of ANB
with respect to each outstanding option to purchase shares of ANB Common Stock
(pursuant to the Stock Options) which was properly granted pursuant to a stock
option agreement executed in accordance with a Stock Option Plan shall be
assumed by ONB as hereinafter provided. In connection therewith, each Stock
Option shall be deemed to constitute an option to acquire, on the same terms and
conditions as were applicable under such Stock Option at the Effective Time,
that number of shares of ONB common stock, rounded to the nearest whole share,
as the holder of such Stock Option would have been entitled to receive pursuant
to the Merger had such holder exercised such Option in full (after giving effect
to accelerated vesting) immediately prior to the Effective Time and, immediately
thereafter, exchanged such shares solely for ONB common stock based upon the
Exchange Ratio at an exercise price per share equal to (A) the aggregate
exercise price for ANB Common Stock otherwise purchasable pursuant to such Stock
Option divided by (B) the number of shares of ONB common stock, rounded to the
nearest whole share, deemed purchasable pursuant to such Stock
-40-
<PAGE>
Option; provided, however, that in the case of any Stock Option to which Section
422 of the Code applies, the option price, the number of shares purchasable
pursuant to such option and the terms and conditions of exercise of such option
shall be determined in accordance with the foregoing, subject to such
adjustments as are necessary in order to satisfy the requirements of Section
424(a) of the Code. By way of example and illustration only, if any option
holder has been granted and is vested in options to acquire 1,000 shares of ANB
Common Stock for $20.00 per share, then after the Effective Time, such option
holder's same option would be converted into the option to acquire,1250 shares
of ONB common stock at $16.00 per share. In no event shall ONB be required to
issue fractional shares of ONB common stock pursuant to the Stock Options.
(b) As soon as practicable after the Effective Time, ONB shall deliver
to each holder of a Stock Option an appropriate notice or agreement which sets
forth such holder's rights pursuant to the Stock Option, and the agreements
evidencing the grants of such Stock Options shall continue in effect on the same
terms and conditions (subject to the conversion required by this Section 7.05
after giving effect to the Merger and the assumption by ONB as set forth above);
provided, however, to the extent necessary to effectuate the provisions of this
Section 7.05, ONB may deliver new or amended Stock Option agreements which
reflect the terms of each Stock Option assumed by ONB. With respect to each
Stock Option, the optionee shall be solely responsible for any and all tax
liability (other than the employer's one-half share of any employment taxes)
which may be imposed upon the optionee as a result of the provisions of this
Section 7.05 and as a result of the grant and exercise of such Stock Options.
(c) As soon as practicable after the Effective Time, ONB shall file
with the SEC a registration statement on an appropriate form with respect to the
shares of ONB common stock subject to such options and shall use its best
efforts to maintain the effectiveness of such registration statement or
registration statements (and maintain the current status of the prospectus or
prospectuses with respect thereto) for so long as such options remain
outstanding.
7.06. Press Releases. Except as required by law, ONB shall not issue
any press releases or make any other public announcements or disclosures
relating primarily to ANB with respect to the Merger without the prior consent
of ANB, which consent shall not be unreasonably withheld.
7.07. Indemnification. (a) From and after the Effective Time, ONB shall
indemnify, defend and hold harmless to the fullest extent permitted by
applicable federal and state law each person who is on the date hereof, or has
been at any time prior to the date hereof or who becomes prior to the Effective
Time, a director or officer of ANB or was serving at the request of ANB as a
director or officer of any domestic or foreign corporation, joint venture,
trust, employee benefit plan or other enterprise (collectively, the
"Indemnitees") arising out of ANB's Articles of Incorporation or By-Laws in
effect at the Effective Time against any and all losses in connection with or
arising out of any claim which is based upon, arises out of or in any way
relates to any actual or alleged act or omission occurring at or prior to the
Effective Time in the Indemnitee's capacity as a director or officer (whether
elected or appointed), of ANB. Indemnification of officers and directors of the
Subsidiaries following the Effective Time will be provided to the same extent it
is provided from
-41-
<PAGE>
time to time to other persons working in similar capacities for ONB or its
subsidiaries following the Effective Time.
(b) In the event ONB or any of its successors or assigns (i)
consolidates with or merges into any other corporation or entity and shall not
be the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its properties
and assets to any person or entity, then, and in each case, to the extent
necessary, proper provision shall be made so that the successors and assigns of
ONB assume the obligations set forth in this Section 7.07.
(c) ONB shall maintain in effect for not less than two (2) years from
the Effective Time the policies of directors' and officers' liability insurance
most recently maintained by ANB; provided, however, that ONB may substitute
therefor policies with reputable and financially sound carriers for
substantially similar coverage containing terms and conditions which are no less
advantageous for so long as such substitution does not result in gaps or lapses
in coverage with respect to claims arising from or relating to matters occurring
prior to the Effective Time. ONB shall pay all expenses, including attorneys'
fees, that may be incurred by any Indemnitee in enforcing the indemnity and
other obligations provided for in this Section 7.07.
(d) The provisions of this Section 7.07 are intended to be for the
benefit of, and shall be enforceable by, each Indemnitee and their respective
heirs and representatives.
7.08 Adverse Actions. ONB shall not (a) take any action while knowing
that such action would, or is reasonably likely to, prevent or impede the Merger
from qualifying (i) for "pooling of interests" accounting treatment or (ii) as a
reorganization within the meaning of Section 368 of the Code; or (b) knowingly
take any action that is intended or is reasonably likely to result in (i) any of
its representations and warranties set forth in this Agreement being or becoming
untrue, subject to the standard set out in the second paragraph to Section 5, in
any respect at any time at or prior to the Effective Time, (ii) any of the
conditions to the Merger set forth in Section 8 not being satisfied, (iii) a
material violation of any provision of this Agreement or (iv) a delay in the
consummation of the Merger except, in each case, as may be required by
applicable low or regulation.
SECTION 8
CONDITIONS PRECEDENT TO THE MERGER
8.01. ONB. The obligation of ONB to consummate the Merger is subject to
the satisfaction and fulfillment of each of the following conditions on or prior
to the Effective Time, unless waived in writing by ONB:
(a) Representations and Warranties at Effective Time. Each of the
representations and warranties of ANB with respect to itself and the
Subsidiaries contained in this Agreement shall, subject to the standard set out
in the second paragraph to Section 4, be true, and correct at and as of
-42-
<PAGE>
the Effective Time as though such representations and warranties had been made
or given on and as of the Effective Time.
(b) Covenants. Each of the covenants and agreements of ANB shall have
been fulfilled or complied with from the date of this Agreement through and as
of the Effective Time.
(c) Deliveries at Closing. ONB shall have received from ANB at the
Closing (as hereinafter defined) the items and documents, in form and content
reasonably satisfactory to ONB, set forth in Section 11.02(b) hereof.
(d) Registration Statement Effective. ONB shall have registered its
shares of common stock to be issued to shareholders of ANB in accordance with
this Agreement with the SEC pursuant to the 1933 Act, and all state securities
and Blue Sky approvals, authorizations and exemptions required to offer and sell
such shares shall have been received by ONB. The Registration Statement with
respect thereto shall have been declared effective by the SEC and no stop order
shall have been issued or threatened.
(e) Regulatory Approvals. All regulatory approvals required to
consummate the transactions contemplated hereby, shall have been obtained and
shall remain in full force and effect and all statutory waiting periods in
respect thereof shall have expired and no such approvals shall contain any
conditions, restrictions or requirements which the board of directors of ONB
reasonably determines in good faith would (i) following the Effective Time, have
a Material Adverse Effect on ONB and its subsidiaries taken as a whole or (ii)
reduce the benefits of the transactions contemplated hereby to such a degree
that ONB would not have entered into this Agreement had such conditions,
restrictions or requirements been known at the date hereof.
(f) Shareholder Approval. The shareholders of ANB shall have approved
and adopted this Agreement as required by applicable law and its Articles of
Incorporation.
(g) Officers' Certificate. ANB shall have delivered to ONB a
certificate signed by its Chairman or President and its Secretary, dated as of
the Effective Time, certifying: (i) to the effect set out in Section 8.01(a);
(ii) that all the covenants of ANB have been complied with from the date of this
Agreement through and as of the Effective Time; and (iii) that ANB has satisfied
and fully complied with all conditions necessary to make this Agreement
effective as to ANB.
(h) Tax Opinion. The Board of Directors of ONB shall have received a
written opinion of the law firm of Krieg DeVault Alexander & Capehart, LLP,
dated as of the Effective Time, in form and content satisfactory to ONB, to the
effect that the Merger to be effected pursuant to this Agreement will constitute
a tax-free reorganization under the Code (as described in Section 1.06 hereof)
to each party hereto and to the shareholders of ANB, except with respect to cash
received by ANB's shareholders for fractional shares resulting from application
of the Exchange Ratio. In rendering such opinion, counsel may require and rely
upon customary representation letters of ONB and ANB and rely upon customary
assumptions.
-43-
<PAGE>
(i) Pooling of Interests Opinion. The Board of Directors of ONB shall
have received a written opinion from its independent auditors, dated as of the
Effective Time, in form and content satisfactory to ONB, to the effect that the
Merger to be effected pursuant to this Agreement will qualify for pooling of
interests accounting treatment for ONB.
8.02. ANB. The obligation of ANB to consummate the Merger is subject to
the satisfaction and fulfillment of each of the following conditions on or prior
to the Effective Time, unless waived in writing by ANB:
(a) Representations and Warranties at Effective Time. Each of the
representations and warranties of ONB contained in this Agreement shall, subject
to the standards set out in the second paragraph of Section 5, be true and
correct on and as of the Effective Time as though the representations and
warranties had been made or given at and as of the Effective Time.
(b) Covenants. Each of the covenants and agreements of ONB shall have
been fulfilled or complied with from the date of this Agreement through and as
of the Effective Time.
(c) Deliveries at Closing. ANB shall have received from ONB at the
Closing the items and documents, in form and content reasonably satisfactory to
ANB, listed in Section 11.02(a) hereof.
(d) Registration Statement Effective. ONB shall have registered its
shares of common stock to be issued to shareholders of ANB in accordance with
this Agreement with the SEC pursuant to the 1933 Act, and all state securities
and Blue Sky approvals, authorizations and exemptions required to offer and sell
such shares shall have been received by ONB. The Registration Statement with
respect thereto shall have been declared effective by the SEC and no stop order
shall have been issued or threatened. In addition, such shares of ONB common
stock shall be listed on the Nasdaq National Market System.
(e) Regulatory Approvals. All regulatory approvals required to
consummate the transactions contemplated hereby, shall have been obtained and
shall remain in full force and effect and all statutory waiting periods in
respect thereof shall have expired and no such approvals shall contain any
conditions, restrictions or requirements which the board of directors of ANB
reasonably determines in good faith would (i) following the Effective Time, have
a Material Adverse Effect on ANB and its subsidiaries taken as a whole or (ii)
reduce the benefits of the transactions contemplated hereby to such a degree
that ANB would not have entered into this Agreement had such conditions,
restrictions or requirements been known at the date hereof.
(f) Shareholder Approval. The shareholders of ANB shall have approved
and adopted this Agreement as required by applicable law and its Articles of
Incorporation.
(g) Officers' Certificate. ONB shall have delivered to ANB a
certificate signed by its Chairman or President and its Secretary, dated as of
the Effective Time, certifying that: (i) to the
-44-
<PAGE>
effect set out in Section 8.02(a); (ii) that all the covenants of ONB have been
complied with from the date of this Agreement through and as of the Effective
Time; and (iii) ONB has satisfied and fully complied with all conditions
necessary to make this Agreement effective as to it.
(h) Tax Opinion. The Board of Directors of ANB shall have received a
written opinion of the law firm of Sullivan & Cromwell, dated as of the
Effective Time, in form and content satisfactory to ANB, to the effect that the
Merger to be effected pursuant to this Agreement will constitute a tax-free
reorganization under the Code (as described in Section 1.06 hereof) to each
party hereto and to the shareholders of ANB, except with respect to cash
received by ANB's shareholders for fractional shares resulting from application
of the Exchange Ratio. In rendering such opinion, counsel may require and rely
upon customary representation letters of ONB and ANB and rely upon customary
assumptions.
(i) Fairness Opinion. ANB's investment bank shall have issued its
written fairness opinion stating that the Exchange Ratio relating to the Merger
is fair to the shareholders of ANB from a financial point of view. Such written
fairness opinion shall be (i) in form and substance reasonably satisfactory to
ANB and (ii) dated as of a date not later than the mailing date of the proxy
statement-prospectus relating to the Merger to be mailed to shareholders of ANB.
SECTION 9
TERMINATION OF MERGER
9.01. Manner of Termination. This Agreement and the Merger may be
terminated at any time prior to the Effective Time by written notice delivered
by ONB to ANB, or by ANB to ONB as follows:
(a) By ONB or ANB, if:
(i) the Merger contemplated by this Agreement has not
been consummated by March 31, 2000; or
(ii) the respective Boards of Directors of ONB and ANB
mutually agree to terminate this Agreement.
(b) By ONB, if:
(i) the Merger will not qualify for pooling of interests
accounting treatment for ONB; or
(ii) at any time prior to the Effective Time, ONB's Board
of Directors so determines, in the event of either
-45-
<PAGE>
(A) a breach by ANB of any representation or
warranty contained herein, which breach
cannot be or has not been cured within
thirty (30) days after the giving of written
notice to ANB of such breach; or
(B) a breach by ANB of any of the covenants or
agreements contained herein, which breach
cannot be or has not been cured within
thirty (30) days after the giving of written
notice to ANB of such breach; provided that
a breach under this clause (B) would be
reasonably likely, individually or in the
aggregate with other breaches, to result in
a Material Adverse Effect; or
(iii) it shall reasonably determine that the Merger
contemplated by this Agreement has become
impracticable by reason of commencement or threat of
any claim, litigation or proceeding against ONB, ANB,
any Subsidiary or any subsidiary of ONB, or any
director or officer of any of such entities relating
to this Agreement or the Merger; or
(iv) there has been a material adverse change in the
business, assets, capitalization, financial condition
or results of operations of ANB and its Subsidiaries
taken as a whole subsidiary as of the Effective Time
as compared to that in existence as of the date of
this Agreement other than any change resulting
primarily by reason of changes in banking and similar
laws of general applicability or interpretations
thereof by courts or governmental authorities,
changes in generally accepted accounting principles
or regulatory accounting requirements applicable to
banks and their holding companies generally, any
modifications or changes to valuation policies and
practices in connection with the Merger or
restructuring charges taken in connection with the
Merger, in each case in accordance with generally
accepted accounting principles, effects of any action
taken with the prior written consent of ONB and
changes in the general level of interest rate or
conditions or circumstances that affect the banking
industry generally; or
(v) ANB fulfills the requirements of Section 6.01 hereof
but the shareholders of ANB do not approve and adopt
the Merger and this Agreement.
(c) By ANB, if:
(i) at any time prior to the Effective Time, ANB's Board
of Directors so determines, in the event of either
(A) a breach by ONB of any representation or
warranty contained herein, which breach
cannot be or has not been cured within
thirty (30) days after the giving of written
notice to ONB of such breach; or
-46-
<PAGE>
(B) a breach by ONB of any of the covenants or
agreements contained herein, which breach
cannot be or has not been cured within
thirty (30) days after the giving of written
notice to ONB of such breach; provided that
a breach under this clause (B) would be
reasonably likely, individually or in the
aggregate with other breaches, to result in
a Material Adverse Effect; or
(ii) there has been a material adverse change in the
financial condition, results of operations, business,
assets or capitalization of ANB on a consolidated
basis as of the Effective Time as compared to that in
existence on March 31, 1999, other than any change
resulting primarily by reason of changes in banking
laws or regulations (or interpretations thereof),
changes in banking and similar laws of general
applicability or interpretations thereof by courts or
governmental authorities, changes in generally
accepted accounting principles or regulatory
accounting requirements applicable to banks and their
holding companies generally, any modifications or
changes to valuation policies and practices in
connection with the Merger or restructuring charges
taken in connection with the Merger, in each case in
accordance with generally accepted accounting
principles, effects of any action taken with the
prior written consent of ANB and changes in the
general level of interest rate or conditions or
circumstances that affect the banking industry
generally; or
(iii) it shall reasonably determine that the Merger
contemplated by this Agreement has become
impracticable by reason of commencement or threat of
any material claim, litigation or proceeding against
ONB (A) relating to this Agreement or the Merger or
(B) which is likely to have a Material Adverse Effect
on ONB; or
(iv) ANB fulfills the requirements of Section 6.01 hereof
but the shareholders of ANB do not approve and adopt
the Merger and this Agreement; or
(v) prior to the approval by the shareholders of ANB of
the Merger contemplated in this Agreement, if,
without breaching Section 6.06, ANB shall
contemporaneously enter into a definitive agreement
with a third party providing for an Acquisition
Transaction on terms determined in good faith by the
board of directors of ANB, after consulting with and
considering the advice of ANB's independent counsel
and financial advisors, to be more favorable to the
shareholders of ANB than the Merger and with respect
to which the board of directors has determined after
such consultation and consideration that to proceed
with the Merger would violate the fiduciary duties of
the board of directors to the ANB's shareholders; or
-47-
<PAGE>
(vi) at any time during the five-day period commencing
with the Determination Date if both of the following
conditions are satisfied:
(A) the number obtained by dividing the Average Closing Price
by the Starting Price (the "ONB Ratio") shall be less than 0.80; and
(B) the ONB Ratio shall be less than the number obtained by
dividing the Final Index Value by the Index Value on the Starting Date
and subtracting 0.15 from the quotient in this clause (B) (such number
being referred to herein as the "Index Ratio");
subject, however, to the following three sentences. If ANB elects to exercise
its termination right pursuant to this Section 9.01(c)(vi), it shall give
written notice to ONB (provided that such notice of election to terminate may be
withdrawn at any time within the aforementioned five-day period). During the
five-day period commencing with its receipt of such notice, ONB shall have the
option to increase the consideration to be received by the holders of ANB Common
Stock hereunder, by adjusting the Exchange Ratio (calculated to the nearest one
one-thousandth) to equal the lesser of (x) a number (rounded to the nearest
thousandth) obtained by dividing (A) the product of the Starting Price, 0.80 and
the Exchange Ratio (as then in effect) by (B) the Average Closing Price and (y)
a number (rounded to the nearest one one-thousandth) obtained by dividing (A)
the product of the Index Ratio and the Exchange Ratio (as then in effect) by (B)
the ONB Ratio. If ONB so elects within such five-day period, it shall give
prompt written notice to ANB of such election and the revised Exchange Ratio.
Whereupon no termination shall have occurred pursuant to this Section
9.01(c)(vi) and this Agreement shall remain in effect in accordance with its
terms (except as the Exchange Ratio shall have been so modified).
For purposes of Section 9.01(c)(vi), the following terms shall have the
meanings indicated:
"Average Closing Price" shall mean the average of the closing
price of a share of ONB Common Stock on the Nasdaq National Market
System (as reported in The Wall Street Journal, or if not reported
therein, in another authoritative source) during the period of 20
consecutive trading days ending on the trading day prior to the
Determination Date, rounded to the nearest whole cent.
"Determination Date" shall mean the date on which the last
required approval required under Section 8.01(e) and 8.02(e) hereof is
obtained, without regard to any requisite waiting period in respect
thereof.
"Final Index Value" shall mean the average of the Index Value
for the 20 consecutive trading days ending on the trading day prior to
the Determination Date.
"Index Value," on a given date, shall mean the index value on
such date of the Nasdaq Bank Index, as such index value is reported by
Bloomberg News Service on such date.
-48-
<PAGE>
"Starting Date" shall mean the last trading day immediately
preceding the date of the first public announcement of entry to this
Agreement.
"Starting Price" shall mean the closing price of a share of
ONB common stock on the Nasdaq National Market System (as reported in
The Wall Street Journal, or if not reported therein, in another
authoritative source) on the Starting Date.
9.02. Effect of Termination. Upon termination by written notice, this
Agreement shall be of no further force or effect, and there shall be no further
obligations or restrictions on future activities on the part of ONB or ANB and
their respective directors, officers, employees, agents and shareholders, except
as provided in compliance with the confidentiality provisions of this Agreement
set forth in Section 6.09 hereof and the payment of expenses set forth in
Section 12.09 hereof; provided, however, that termination will not in any way
release a breaching party from liability for any willful breach of this
Agreement giving rise to such termination.
SECTION 10
EFFECTIVE TIME OF THE MERGER
Upon the terms and subject to the conditions specified in this
Agreement, the Merger shall become effective at the close of business on the day
and at the time specified in the Articles of Merger of ANB with and into ONB as
filed with the Indiana Secretary of State ("Effective Time"). Unless otherwise
mutually agreed to by the parties hereto, the Effective Time shall occur on the
later of (i) January 31, 2000 or (ii) the last business day of the month
following (a) the fulfillment of all conditions precedent to the Merger set
forth in Section 8 of this Agreement and (b) the expiration of all waiting
periods in connection with the bank regulatory applications filed for the
approval of the Merger.
SECTION 11
CLOSING
11.01. Closing Date and Place. So long as all conditions precedent set
forth in Section 8 hereof have been satisfied and fulfilled, the closing of the
Merger ("Closing") shall take place on the Effective Time at the law offices of
Krieg DeVault Alexander & Capehart, LLP, One Indiana Square, Suite 2800,
Indianapolis, Indiana 46204.
11.02. Deliveries.(a) At the Closing, ONB shall deliver to ANB the
following:
(i) the officers' certificate contemplated by Section
8.02(g) hereof;
(ii) copies of all approvals by government regulatory
agencies necessary to consummate the Merger;
-49-
<PAGE>
(iii) copies of the resolutions of the Board of Directors
of ONB certified by the Secretary of ONB, relative to
the approval of this Agreement and the Merger; and
(iv) such other documents as ANB or its legal counsel may
reasonably request.
(b) At the Closing, ANB shall deliver to ONB the following:
(i) the officers' certificate contemplated by Section
8.01(g) hereof;
(ii) a list of ANB's shareholders as of the Effective Time
certified by the President and Secretary of ANB;
(iii) copies of the resolutions adopted by the Board of
Directors of ANB certified by the Secretary of ANB,
relative to the approval of this Agreement and the
Merger; and
(iv) such other documents as ONB or its legal counsel may
reasonably request.
SECTION 12
MISCELLANEOUS
12.01. Effective Agreement. This Agreement shall be binding upon and
inure to the benefit of the respective parties hereto and their respective
successors and assigns; provided, however, that this Agreement may not be
assigned by any party hereto without the prior written consent of the other
parties hereto; provided, further, that no such extension, waiver or amendment
agreed to after authorization of this Agreement by the shareholders of ANB shall
affect the rights of such shareholders in any manner which is materially adverse
to such shareholders. The representations, warranties, covenants and agreements
contained in this Agreement are for the sole benefit of the parties hereto and
their successors and assigns, and they shall not be construed as conferring any
rights on any other persons except as specifically set forth in Sections 7.03,
7.04, 7.05 and 7.07 hereof.
12.02. Waiver; Amendment. (a) The parties hereto may by an instrument
in writing: (i) extend the time for the performance of or otherwise amend any of
the covenants, conditions or agreements of the other parties under this
Agreement, except that the consideration to be received by the ANB shareholders
shall not be decreased by such an amendment following the adoption and approval
of the Merger and this Agreement by the ANB shareholders; (ii) waive any
inaccuracies in the representations or warranties of the other party contained
in this Agreement or in any document delivered pursuant hereto or thereto; (iii)
waive the performance by the other party of any of the covenants or agreements
to be performed by it or them under this Agreement; or (iv) waive the
satisfaction or fulfillment of any condition, the nonsatisfaction or
nonfulfillment of which is a
-50-
<PAGE>
condition to the right of the party so waiving to consummate the Merger. The
waiver by any party hereto of a breach of or noncompliance with any provision of
this Agreement shall not operate or be construed as a continuing waiver or a
waiver of any other or subsequent breach or noncompliance hereunder.
(b) This Agreement may be amended, modified or supplemented only by a
written agreement executed by the parties hereto.
12.03. Notices. All notices, requests and other communications
hereunder shall be in writing (which shall include telecopier communication) and
shall be deemed to have been duly given if delivered by hand and receipted for,
sent by certified United States Mail, return receipt requested, first class
postage pre-paid, delivered by overnight express receipted delivery service or
telecopied if confirmed immediately thereafter by also mailing a copy of such
notice, request or other communication by certified United States Mail, return
receipt requested, with first class postage pre-paid as follows:
If to ONB: with a copy to
(which shall not
constitute notice):
Old National Bancorp Krieg DeVault Alexander & Capehart, LLP
420 Main Street One Indiana Square, Suite 2800
P.O. Box 718 Indianapolis, Indiana 46204-2017
Evansville, Indiana 47705 ATTN: Karol K. Sparks, Esq.
ATTN: Jeffrey L. Knight, Secretary Telephone: (716) 264-0118
and General Counsel Telecopier: (317) 636-1507
Telephone: (812) 464-1363
Telecopier: (812) 464-1567
If to ANB: with a copy to (which shall not
constitute notice):
ANB Corporation Sullivan & Cromwell
ATTN: James R. Schrecongost, President 125 Broad Street
120 W. Charles Street New York, New York 10004
Muncie, Indiana 47305 ATTN: David M. Huggin, Esq.
Telephone: (765) 747-7600 Telephone: (212) 558-3526
Telecopier: (765) 741-0290 Telecopier: (212) 558-3588
or such substituted address or person as any of them have given to the other in
writing. All such notices, requests or other communications shall be effective:
(a) if delivered by hand, when delivered; (b) if mailed in the manner provided
herein, five (5) business days after deposit with the United States Postal
Service; (c) if delivered by overnight express delivery service, on the next
-51-
<PAGE>
business day after deposit with such service; and (d) if by telecopier, on the
next business day if also confirmed by mail in the manner provided herein.
12.04. Headings. The headings in this Agreement have been inserted
solely for ease of reference and should not be considered in the interpretation
or construction of this Agreement.
12.05. Severability. In case any one or more of the provisions
contained herein shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if such invalid, illegal or unenforceable provision or
provisions had never been contained herein.
12.06. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute one and the same instrument.
12.07. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Indiana and applicable federal laws,
without regard to principles of conflicts of law.
12.08. Entire Agreement. This Agreement supersedes all other prior or
contemporaneous understandings, commitments, representations, negotiations or
agreements, whether oral or written, among the parties hereto relating to the
Merger or matters contemplated herein and constitutes the entire agreement
between the parties hereto. Upon the execution of this Agreement by all the
parties hereto, the preliminary non-binding Indication of Interest letter, dated
July 14, 1999, from ONB and any and all other prior writings of either party
relating to the Merger, except for the Confidentiality Agreement dated July 28,
1999 by and between ONB and ANB, shall terminate and shall be rendered of no
further force or effect. The parties hereto agree that each party and its
counsel reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments or exhibits hereto.
12.09. Expenses. ONB shall pay its expenses incidental to the Merger
contemplated hereby. ANB shall pay its expenses incidental to the Merger
contemplated hereby.
12.10 Certain References. Whenever in this Agreement a singular word is
used, it also shall include the plural wherever required by the context and
vice-versa. Except expressly stated otherwise, all references in this Agreement
to periods of days shall be construed to refer to calendar, not business, days.
The term "business day" shall mean any day except Saturday and Sunday when Old
National Bank in Evansville, the lead bank of ONB, is open for the transaction
of business.
-52-
<PAGE>
IN WITNESS WHEREOF, ONB and ANB have made and entered into this
Agreement as of the day and year first above written and have caused this
Agreement to be executed, attested in counterparts and delivered by their duly
authorized officers.
OLD NATIONAL BANCORP
By: /s/ Ronald B. Lankford
------------------------------------
Ronald B. Lankford, President and
Chief Operating Officer
ATTEST:
By: /s/ Jeffrey L. Knight
----------------------------------------
Jeffrey L. Knight, Corporate Secretary
ANB CORPORATION
By: /s/ James R. Schrecongost
------------------------------------
James R. Schrecongost, President
ATTEST:
By: /s/ James W. Convy
----------------------------------------
James W. Convy, Secretary
-53-
<PAGE>
SCHEDULE OF EXHIBITS
Exhibit A - Form of Stock Option Agreement
Exhibit B - Form of Undertaking and Agreement of Affiliate
-54-
