Rule 424(b)(3)
Registration Number 333-47534
PROSPECTUS SUPPLEMENT
TO PROSPECTUS DATED OCTOBER 18, 2000
OLD NATIONAL BANCORP
This document is a supplement to the prospectus dated October 18, 2000,
SEC File No. 333-47534 and covers 110,960 shares of our common stock. This
prospectus supplement should be read together with the prospectus. This
prospectus supplement and the prospectus relate to the shares being offered to
the shareholders of Wolford Cannon Hoecker Insurance Agency, Inc. in connection
with the proposed affiliation of Old National and WCH pursuant to an exchange by
which each of the issued and outstanding shares of common stock of WCH will be
exchanged for 5.2838 shares of Old National's common stock, subject to
adjustment.
Old National will offer the shareholders of WCH to exchange their
shares of common stock of WCH for shares of Old National's common stock pursuant
to a share exchange agreement by and among Orange County Bank, a wholly-owned
subsidiary of Old National, WCH and the shareholders of WCH, according to which
the share exchange will be completed. Completion of the share exchange is
conditioned upon the terms and subject to the conditions of the exchange
agreement.
All information contained in this document with respect to WCH has been supplied
by WCH without any independent verification of such information by us.
This document should be read together with the prospectus.
The date of this prospectus supplement is October 25, 2000.
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PROPOSED TRANSACTION
The following discussion of the proposed affiliation between us and WCH
describes certain aspects of the proposed affiliation but does not purport to be
a complete description of the terms and conditions of the exchange agreement and
is qualified in its entirety by reference to the exchange agreement. The form of
the exchange agreement is attached to this document as Appendix A and is
incorporated herein by reference. Old National Bancorp is also referred to as
"Old National", "us" or "we" in this document.
Description of the Share Exchange and Consideration
Under the terms of the exchange agreement, WCH will affiliate with us
through an exchange by which each of the issued and outstanding shares of common
stock of WCH will be exchanged for 5.2838 shares of our common stock, subject to
adjustment. In connection with the share exchange, we will issue such number of
shares of our common stock as is necessary to complete the share exchange to our
wholly-owned subsidiary, Orange County Bank. Upon completion of the share
exchange, the Bank will exchange such shares of our common stock for all of the
issued and outstanding shares of common stock of WCH.
Under the terms of the exchange agreement, on the date when the share
exchange is completed, shareholders of record of WCH will be entitled to receive
5.2838 shares of our common stock for each issued and outstanding share of WCH
they own.
The shares of our common stock to be reserved for the WCH shareholders
are subject to adjustment for stock splits, stock dividends or other
recapitalization of Old National and for changes in the net worth of WCH. If the
net worth of WCH at the closing of the share exchange exceeds $225,000, then the
shareholders of WCH will receive additional shares of our common stock equal to
the excess amount divided by the average per share price of our common stock. If
the net worth of WCH at the closing of the share exchange is less than $215,000,
then the number of shares of our common stock received by shareholders of WCH
will be reduced by the shortage amount divided by the average per share price of
our common stock.
Accounting Treatment for the Affiliation
We anticipate that our affiliation with WCH will be accounted for as a
"purchase" transaction. Under this method of an accounting, the assets acquired
and liabilities assumed in the acquisition of WCH will be recorded at their
estimated fair values, with the excess of the purchase price over the net fair
value recorded as goodwill which will be amortized against income for fifteen
years using the straight-line method.
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Completion Date
We anticipate that the share exchange will be completed by November 1,
2000 and in no event after December 31, 2000.
Management, Personnel and Operations after the Affiliation
Upon completion of the share exchange, WCH will become a wholly-owned
subsidiary of the Bank. The Bank is a wholly-owned subsidiary of Old National.
The directors of WCH following the share exchange will be James A. Risinger,
John S. Poelker, William R. Britt, Donald T. Scott, Douglas A. Grim, Wolford
John Shane and Fred C. Danger, Jr., until such time as their successors have
been duly elected or until their earlier resignation, death or removal from
office. For at least a one (1) year period immediately following the completion
of the share exchange, Messrs. Shane and Danger will serve as directors of WCH.
It is our present intention to, upon the completion of the share
exchange, retain all employees of WCH as employees-at-will of WCH, except the
shareholders of WCH will sign employment agreements. Neither the exchange
agreement, the prospectus nor this prospectus supplement will:
o create any employment agreement, commitment or understanding with
any employee of WCH, or
o create any agreement, commitment or understanding with respect to
WCH employee benefits for any WCH employee.
Interests of Certain Persons in the Affiliation
As a condition to, and concurrently with the execution of, the exchange
agreement, WCH will enter into employment agreements with each of the
shareholders of WCH. These employment agreements are attached to the exchange
agreement as exhibits and are required to be signed upon delivery of the
exchange agreement to the Bank.
Dissenters' Rights
The shareholders of WCH do not possess dissenters' rights in connection
with the share exchange, as further discussed below. See, "Description of WCH
Capital Stock - - Dissenters' Rights."
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Conditions to Closing
As set forth in the exchange agreement, the obligation of the Bank, WCH
and each shareholder of WCH to consummate the share exchange is subject to the
satisfaction and fulfillment of the following conditions at or prior to the
closing of the share exchange:
o each of the representations and warranties of WCH and each
shareholder of WCH contained in the exchange agreement must be
true, correct and complete at and as of the closing of the
share exchange;
o each of the representations and warranties of the Bank
contained in the exchange agreement must be true, correct and
complete in all material respects at and as of the closing of
the share exchange;
o each of the covenants and agreements of WCH and each
shareholder of WCH must have been fulfilled or complied with
from the date of the exchange agreement through the closing of
the share exchange;
o each of the covenants and agreements of the Bank must have
been fulfilled or complied with in all material respects from
the date of the exchange agreement through the closing of the
share exchange;
o the Bank must have received from WCH and each shareholder of
WCH, and WCH and each shareholder of WCH must have received
from the Bank, certain items and documents required by the
exchange agreement to be delivered at the closing of the share
exchange;
o the Bank and WCH must have received all regulatory approvals
required for the share exchange;
o the Board of Directors of the Bank and WCH must have received
a written opinion of the law firm Krieg DeVault Alexander &
Capehart LLP, dated as of the closing of the share exchange,
with respect to the fact that the share exchange will be
treated as a tax-free reorganization for U.S. federal income
tax purposes;
o we must have registered our shares of common stock to be
issued to shareholders of WCH in accordance with the exchange
agreement with the SEC; and
o the Bank and WCH must have received certain officers'
certificates and other closing documents.
The conditions to completion of the share exchange, which are more
fully enumerated in the exchange agreement, are requirements subject to waiver
by the party entitled to the benefit of such conditions.
Termination of the Share Exchange
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The share exchange may be terminated at any time prior to the closing
of the share exchange by written notice delivered by the Bank to WCH, or by WCH
to the Bank if the share exchange has not been completed by December 31, 2000 or
the respective Boards of Directors of the Bank and WCH mutually agree to
terminate the share exchange.
The share exchange may be terminated by the Bank, if:
o the share exchange will not qualify as a tax-free reorganization
under Section 368(a)(l)(B) of the Internal Revenue Code;
o at any time prior to the closing of the share exchange, the
Bank's Board of Directors determines that a breach by WCH or any
shareholder of WCH of any representation or warranty contained in
the exchange agreement or a breach by WCH or any shareholder of
WCH any of the covenants or agreements contained in the exchange
agreement has occurred;
o it reasonably determines that the share exchange has become
impracticable by reason of commencement or threat of any claim,
litigation or proceeding against the Bank, WCH or any shareholder
of WCH, or any director or officer of any of such entities
relating to the exchange agreement or the share exchange; or
o there has been a material adverse change in the business, assets,
capitalization, financial condition, prospects or results of
operations of WCH as of the closing of the share exchange as
compared to that in existence as of the date of the exchange
agreement.
The share exchange may be terminated by WCH, if:
o at any time prior to the closing of the share exchange, WCH's
Board of Directors determines that a material breach by the Bank
of any representation or warranty contained in the exchange
agreement or a material breach by the Bank of any of the
covenants or agreements contained in the exchange agreement has
occurred;
o the share exchange will not qualify as a tax-free reorganization
under Section 368(a)(l)(B) of the Internal Revenue Code; or
o it reasonably determines that the share exchange has become
impracticable by reason of commencement or threat, by a third
party, of any claim, litigation or proceeding against the Bank,
WCH or any shareholder of WCH, or any director or officer of any
of such entities relating to the exchange agreement or the share
exchange.
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RECENT DEVELOPMENTS
On July 27, 2000, we acquired Permanent Bancorp, Inc., a unitary
savings and loan holding company located in Evansville, Indiana, in a merger
transaction valued at approximately $89.2 million. With the acquisition of
Permanent, our number of banking offices increased to 149 and our number of ATMs
increased to 249 throughout Indiana, Illinois, Kentucky, Ohio and Tennessee.
On September 22, 2000, we announced that our Board of Directors had
approved the repurchase of up to an aggregate of two million (2,000,000) shares
of our common stock outstanding. The authorization for us to repurchase our
shares of common stock is effective from September 19, 2000, through December
31, 2000.
FEDERAL INCOME TAX CONSEQUENCES
We anticipate that the share exchange will constitute a tax-free
reorganization under the Internal Revenue Code, except with respect to cash
received by shareholders of WCH for fractional share interests of the shares
received in the share exchange. As a result, shareholders of WCH who receive
solely the shares of our common stock in exchange for all of their shares of
common stock of WCH actually owned by them will not recognize any gain or loss
from the share exchange for federal income tax purposes. However, a shareholder
of WCH who receives cash in lieu of a fractional share interest in the shares
will be treated as having received such fraction of a share of our common stock
and then as having received cash in redemption of the fractional share interest,
subject to the provisions of Section 302 of the Internal Revenue Code.
The federal income tax discussion set forth above has not been verified
with the Internal Revenue Service, is included for general information only and
is based upon the federal Internal Revenue Code as in effect on the date of this
document without consideration of any state laws or the particular facts or
circumstances of any shareholder of WCH. In addition, a condition to the share
exchange is for the Bank to receive an opinion of counsel with respect to
certain tax matters relating to the share exchange. The shareholders of WCH are
urged to consult with their respective tax advisor with respect to all tax
consequences of the share exchange to them, including the effect of federal,
state and local tax laws and any other tax consequences.
CERTAIN INFORMATION REGARDING WCH
Ownership of Common Stock of WCH
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The following table sets forth, as of the date of this document,
certain information about each shareholder of WCH. The number of shares shown as
being beneficially owned are those over which the respective shareholder has
sole voting and investment power. The percentage of outstanding shares is based
upon 21,000 shares of common stock of WCH outstanding as of the date of this
document.
Number of Shares Percent of
Name Beneficially Owned Outstanding Shares
---- ------------------ ------------------
Wolford John Shane 7,000 33.34%
Robert K. Hoecker 7,000 33.33%
Fred C. Danner, Jr. 7,000 33.33%
Trading Market; Share Prices and Dividends
There is no established public trading market for shares of common
stock of WCH and no shares have ever been traded publicly. No shares of common
stock of WCH have been issued since May 10, 1995. WCH has paid no dividends on
shares of common stock of WCH in the past two years.
Description of Capital Stock of WCH
The rights of the shareholders of WCH are governed by the laws of the
State of Illinois, the state in which WCH is incorporated, and by WCH's Articles
of Incorporation and By-Laws. The following summary of the WCH's common stock
includes all material features of such stock but does not purport to be complete
and is qualified in its entirety by reference to WCH's Articles of Incorporation
and By-Laws. The following summary should be read in conjunction with the
information set forth in the prospectus under the caption "Description of
Capital Stock."
Authorized Shares. WCH's Articles of Incorporation authorize the
issuance of 21,000 shares of common stock, all of which are outstanding as of
the date of this prospectus supplement.
Preemptive Rights. As permitted by Illinois law, WCH's Articles of
Incorporation do not provide for preemptive rights to subscribe for any new or
additional shares of common stock or other securities of WCH.
Dividend Rights. The holders of WCH's common stock are entitled to
dividends and other distributions when, as and if declared by WCH's Boards of
Directors out of funds legally
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available for WCH to pay such dividends and other distributions. A dividend may
not be paid if, after giving it effect, WCH would be insolvent or WCH's net
assets would be less than zero or less than the maximum amount payable at the
time of distribution to shareholders having preferential rights in liquidation
if the corporation were then to be liquidated.
The amount of dividends, if any, that may be declared by WCH depends
upon many factors, including, without limitation, future earnings, capital
requirements, business conditions, the discretion of WCH's Board of Directors
and other factors that may be appropriate in determining dividend policies.
Voting Rights. The holders of the outstanding shares of WCH's common
stock are entitled to one vote per share on all matters presented for
shareholder vote at a meeting of shareholders. According to WCH's Articles of
Incorporation, shareholders of WCH do not have cumulative voting rights in the
election of directors.
Illinois law generally requires that mergers, consolidations, exchanges
or other dispositions of all or substantially all of the assets of a corporation
be approved by the affirmative vote of at least two-thirds of the votes of the
shares entitled to vote at a meeting of the shareholders, subject in each case
to provisions in the respective corporation's articles of incorporation
requiring a smaller or larger vote requirement. However, the share exchange
between Old National and WCH is voluntary, not subject to Illinois law and,
therefore, does not require the prior approval of the shareholders of WCH.
Illinois law also requires shareholder approval for most amendments to
a corporation's articles of incorporation, as well as certain other corporate
matters, by the affirmative vote of at least two-thirds of the votes of the
shareholders at a meeting at which a quorum is present (and, in certain cases,
at least two-thirds of the votes of all shares held by any voting group entitled
to vote), unless the respective corporation's articles of incorporation require
a smaller or larger percentage vote.
WCH's Articles of Incorporation do not require a smaller or larger vote
on matters presented to shareholders.
Dissenters' Rights. A shareholder of an Illinois business corporation
possesses dissenters' rights in connection with certain mergers and other
significant corporate actions. Under Illinois law, a shareholder is entitled to
dissent from and obtain payment of the fair value of the shareholder's shares in
the event of:
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o consummation of a plan of merger, if shareholder approval is
required and the shareholder is entitled to vote thereon;
o consummation of a plan of share exchange by which the
shareholder's shares will be acquired, if the shareholder is
entitled to vote thereon;
o consummation of a sale or exchange of all, or substantially all,
the property and assets of the corporation other than in the
usual and regular course of business, if the shareholder is
entitled to vote thereon;
o an amendment of the articles of incorporation that materially and
adversely affects rights in respect of a dissenters' shares, and
o any corporate action taken pursuant to a shareholder vote to the
extent the articles of incorporation, by-laws or a resolution of
the Board of Directors provides that shareholders are entitled to
dissent and obtain payment for their shares.
As stated above, the shareholders of WCH are not entitled to vote in
favor of or against the share exchange. Accordingly, the shareholders are not
entitled to exercise their dissenters' rights in this transaction.
Liquidation Rights. In the event of any liquidation or dissolution of
WCH, the holders of shares of common stock of WCH are entitled to receive pro
rata with respect to the number of shares held by them any assets distributable
to shareholders, subject to the payment of WCH's liabilities and any rights of
creditors.
Assessment and Redemption. The common stock of WCH is not liable to
further assessment. Under Illinois law, WCH may redeem or acquire shares of
common stock with funds legally available therefor, and shares so acquired
constitute treasury shares. WCH may not redeem or acquire shares of its common
stock if, after giving such redemption or acquisition effect, WCH would be
insolvent, or WCH's net assets would be less than zero or less than the maximum
amount payable at the time of distribution to shareholders having preferential
rights in liquidation if the corporation were then to be liquidated.
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APPENDIX A
SHARE EXCHANGE AGREEMENT
THIS SHARE EXCHANGE AGREEMENT (the "Agreement") is made and entered
into effective as of the ___ day of October, 2000, by and among ORANGE COUNTY
BANK (the "Bank"), WOLFORD CANNON HOECKER INSURANCE AGENCY, INC. ("WCH"),
WOLFORD JOHN SHANE, ROBERT K. HOECKER and FRED C. DANNER, JR. (Messrs. Shane,
Hoecker and Danner are referred to herein individually as a "Shareholder" and
collectively as the "Shareholders"),
W I T N E S S E T H:
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WHEREAS, the Bank is a direct wholly-owned subsidiary of Old National
Bancorp ("ONB") and is an Indiana banking corporation with its principal office
located in Paoli, Indiana; and
WHEREAS, WCH is a licensed Illinois insurance agency and is an Illinois
corporation with its principal office located in Danville, Illinois; and
WHEREAS, the Shareholders are all residents of the State of Illinois
and are collectively the owners of all of the issued and outstanding shares of
common stock of WCH (the "WCH Common Stock"); and
WHEREAS, the Shareholders desire to sell to the Bank, and the Bank
desires to acquire from the Shareholders, all of the issued and outstanding
shares of WCH Common Stock solely in exchange (the "Exchange") for common stock
of ONB (the "ONB Common Stock"); and
WHEREAS, the Bank and the Shareholders intend that the Exchange
contemplated herein should constitute a tax-free reorganization under Section
368(a)(1)(B) of the Internal Revenue Code of 1986, as amended (the "Code"), and
designate this Agreement a plan of reorganization; and
WHEREAS, as a condition to, and concurrently with the execution of,
this Agreement, WCH shall enter into employment agreements with each
Shareholder, substantially in the form set forth in Exhibits A, B and C hereto;
and
WHEREAS, the Board of Directors of each of the Bank and WCH has
determined that it is in the best interests of its respective corporations to
consummate the strategic business
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combination provided for herein and has approved this Agreement, authorized its
execution and designated this Agreement a plan of exchange.
NOW, THEREFORE, in consideration of the foregoing premises, the
representations, warranties, covenants and agreements herein contained and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the Shareholders, jointly and severally, the Bank and WCH hereby
make this Agreement as follows:
SECTION 1
THE EXCHANGE
1.01. General Description. Upon the terms and subject to the conditions
of this Agreement, as of the Effective Time (as hereinafter defined), (a) the
Shareholders shall convey, transfer and deliver to the Bank, and the Bank shall
acquire, 21,000 shares of WCH Common Stock (collectively, the "Shares"), which
represent all of the issued and outstanding shares of WCH Common Stock, (b) the
Shareholders shall deliver to the Bank stock certificates evidencing the Shares,
which certificates shall be duly endorsed in blank for transfer, and (c) in
exchange for the Shares, the Bank shall convey, transfer and deliver to the
Shareholders shares of ONB Common Stock as contemplated by Section 2 hereof.
Following the Effective Time, and until ONB determines otherwise, the Bank (x)
shall continue its corporate existence under the laws of the State of Indiana
pursuant to the provisions of the Indiana Financial Institutions Act, as
amended, (y) WCH shall continue its corporate existence under the laws of the
State of Illinois pursuant to the provisions of the Illinois Business
Corporation Act, as amended, and (z) WCH shall be a wholly-owned subsidiary of
the Bank.
1.02. Directors, Officers and Management. (a) The officers of WCH
serving at the Effective Time shall continue to serve as the officers of WCH
following the Effective Time, until such time as their successors shall have
been duly elected and have qualified or until their earlier resignation, death
or removal from office.
(b) The directors of WCH following the Effective Time shall be James A.
Risinger, William R. Britt, Wolford John Shane, Fred C. Danner, Jr., John S.
Poelker, Donald W. Scott, Donald T. Scott and Douglas A. Grim, until such time
as their successors have been duly elected and have qualified or until their
earlier resignation, death or removal from office. For a period of one (1) year
following the Effective Time, the Bank covenants and agrees to retain Messrs.
Shane and Danner as directors of WCH.
1.03. Tax-Free Reorganization. The Bank, WCH and the Shareholders
intend for the Exchange to qualify as a reorganization within the meaning of
Section 368(a)(1)(B) and related sections of the Code. The Bank, WCH and the
Shareholders agree to cooperate and to take such
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actions, and to refrain from taking such actions, as may be reasonably necessary
to achieve such result.
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SECTION 2
MANNER AND BASIS OF EXCHANGE OF STOCK
2.01. Exchange Ratio. Upon and by virtue of the Exchange becoming
effective at the Effective Time, each of the Shares shall be exchanged for
5.2838 shares of ONB Common Stock (the "Exchange Ratio"), subject to adjustment,
if any, pursuant to the provisions of Sections 2.03 and 2.05 hereof.
2.02. No Fractional Shares. Certificates for fractional shares of ONB
Common Stock shall not be issued for fractional interests resulting from the
application of the Exchange Ratio. Each Shareholder who would otherwise have
been entitled to a fraction of a share of ONB Common Stock shall be paid cash at
the Closing (as hereinafter defined) in an amount equal to such fraction
multiplied by the average of the per share closing prices of ONB Common Stock as
reported on the Nasdaq National Market System on each of the five (5) business
days on which shares of ONB Common Stock are traded immediately preceding the
Effective Time (the "Average Price Per Share").
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 shares of ONB Common Stock, or a
combination, subdivision, reclassification or split of the issued and
outstanding shares of ONB 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 each Shareholder 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
Shareholder would have received if any of the foregoing stock dividends,
combinations, subdivisions, reclassifications or splits had not occurred.
2.04. Calculation of "Tangible Net Worth". (a) As promptly as
practicable after the Effective Time (but in no event later than thirty (30)
days after the Effective Time), the Shareholders shall provide to the Bank their
calculation of the Tangible Net Worth (as defined below) as of the Effective
Time.
(b) If the Bank disagrees with the Shareholders' calculation of the
Tangible Net Worth, the Bank shall, within thirty (30) days after receipt of
such calculation, provide a written notice to the Shareholders disagreeing with
such calculation and setting forth the Bank's calculation of the Tangible Net
Worth. Any such notice of disagreement shall specify those calculations, items
or amounts as to which the Bank disagrees, and the Bank shall be deemed to
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have agreed with all other calculations, items or amounts. If the Bank does not
deliver a notice of disagreement to the Shareholders within such thirty (30) day
period, the Shareholders' calculation of the Tangible Net Worth shall be final
and binding upon the parties hereto.
(c) During the thirty (30) days following delivery of the notice of
disagreement referenced above, the parties shall use their reasonable efforts to
reach an agreement on the disputed calculations, items or amounts in order to
determine the Tangible Net Worth. If, during such period, the parties are unable
to reach agreement, they shall mutually and promptly agree upon an independent
public accounting firm (the "Accounting Referee") to review this Agreement and
the disputed calculations, items or amounts for the purposes of calculating the
Tangible Net Worth. The Accounting Referee shall deliver to the Shareholders and
the Bank as promptly as practicable, a report setting forth its calculation of
the Tangible Net Worth. Such report of the Accounting Referee shall be final and
binding upon the parties hereto, and shall not be subject to further dispute or
review. The cost of the Accounting Referee shall be borne equally by the Bank
and the Shareholders.
(d) "Tangible Net Worth" shall be defined as the tangible net worth of
WCH as of the Effective Time, which shall be determined in accordance with
generally accepted accounting principles (GAAP) and shall be determined by
taking the total assets (excluding "intangible assets") less the total
liabilities of WCH as of the close of business on the Effective Time. For
purposes of this Agreement, "intangible assets" shall mean those line items on
WCH's balance sheet as of the Effective Time identified as unamortized goodwill,
unamortized CCMSI book of business and unamortized non-competition agreements
relating to MSI.
2.05. Purchase Price Adjustment. If the Tangible Net Worth, as finally
determined as set forth in Section 2.04 hereof, exceeds Two Hundred Twenty-Five
Thousand Dollars ($225,000) (the amount in excess of $225,000.00 being referred
to hereinafter as the "Excess Tangible Net Worth"), then the number of shares of
ONB Common Stock received by the Shareholders pursuant to Section 2.01 hereof
shall be increased by such number of shares of ONB Common Stock equal to the
quotient arrived at by dividing (a) the Excess Tangible Net Worth by (b) the
Average Price Per Share. If the amount of the Tangible Net Worth, as finally
determined as set forth in Section 2.04 hereof, is less than Two Hundred
Twenty-Five Thousand Dollars ($225,000) (such amount which is less than
$225,000.00 being referred to hereinafter as the "Shortage of Tangible Net
Worth"), then the number of shares of ONB Common Stock received by the
Shareholders pursuant to Section 2.01 hereof shall be reduced by such number of
shares of ONB Common Stock equal to the quotient arrived at by dividing (a) the
Shortage of Tangible Net Worth by (b) the Average Price Per Share. If necessary,
the number of shares of ONB Common Stock received by the Shareholders pursuant
to Section 2.01 hereof shall be increased, if applicable, by the Excess Tangible
Net Worth or decreased, if applicable, by the Shortage of Tangible Net Worth, as
set forth in this Section.
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SECTION 3
REPRESENTATIONS AND WARRANTIES OF THE SHAREHOLDERS
The Shareholders, jointly and severally, hereby represent and warrant
to the Bank as set forth in this Section 3. All references in this Agreement to
the knowledge of the Shareholders shall mean the actual knowledge of any
Shareholder, and all references in this Agreement to the knowledge of the
Shareholders after due inquiry shall mean the actual knowledge of any
Shareholder after review of such Shareholder's personal files and records and
the files, records and books of WCH.
3.01. Organization and Authority. WCH is a corporation duly organized
and validly existing under the laws of the State of Illinois. WCH 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. Except as set forth in Schedule 3.01
hereto, WCH has no subsidiaries and owns no voting stock or securities of any
corporation, partnership, limited liability company, association or other
entity.
3.02. Authorization. (a) WCH 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
7.02(e) hereof. Each Shareholder is an "Accredited Investor" within the meaning
of such term as provided by subparagraph (a) of Section 501 of Regulation D
under the Securities Act of 1933, as amended (the "1933 Act"). Each Shareholder
has the capacity to enter into this Agreement and to perform his respective
obligations hereunder, subjected to the fulfillment of the conditions precedent
set forth in Section 7.02(e) hereof. As of the date hereof, neither WCH nor any
Shareholder is aware of any reason why the approvals set forth in Section
7.02(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 7.02(e).
This Agreement, and its execution and delivery by WCH, have been duly authorized
and approved by WCH and, assuming due execution and delivery by the Bank,
constitutes a valid and binding obligation of WCH and the Shareholders, subject
to the fulfillment of the conditions precedent set forth in Section 7.02 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 Schedule 3.02 hereto, neither the
execution of this Agreement nor consummation of the Exchange contemplated
hereby: (i) conflicts with or violates WCH's Articles of Incorporation or
By-Laws; (ii) conflicts with or violates any local,
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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 Exchange are obtained) or any
court or administrative judgment, order, injunction, writ or decree, except
where such conflict or violation does not or would not reasonably be expected to
result in a material adverse effect on the financial condition, results of
operation, assets, income or business of WCH; (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 WCH or any Shareholder is a party or by which WCH or
any Shareholder is subject or bound, except where such breach or default does
not or would not reasonably be expected to result in a material adverse effect
on the financial condition, results of operation, assets, income or business of
WCH; (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 the Bank) or any other adverse interest, upon any right, property or
asset of WCH or any Shareholder; (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 WCH or any
Shareholder is bound or with respect to which WCH or any Shareholder is to
perform any duties or obligations or receive any rights or benefits, except
where such action does not or would not reasonably be expected to result in a
material adverse effect on the financial condition, results of operation,
assets, income or business of WCH; or (vi) conflicts with, results in a breach
of or requires any consent, offer or other action under any will, trust,
buy-sell agreement, shareholder agreement, employment agreement or other
agreement.
(c) Other than in connection or in compliance with the provisions of
the applicable federal and state insurance and securities 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 Exchange by WCH
or any Shareholder.
3.03. Capitalization. (a) The authorized capital stock of WCH as of the
date hereof consists, and at the Effective Time will consist, of 21,000 shares
of WCH Common Stock, no par value, all of which shares are issued or outstanding
and constitute the Shares. The Shares have been duly and validly authorized by
all necessary corporate action of WCH, are validly issued, fully paid and
nonassessable and have not been issued in violation of any preemptive rights of
any present or former WCH shareholder. WCH has no capital stock authorized,
issued or outstanding other than as described in this Section 3.03(a) and has no
intention or obligation to authorize or issue any other capital stock or any
additional shares of WCH capital stock.
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(b) Except as set forth in Schedule 3.03 hereto, there are no options,
warrants, commitments, calls, puts, agreements, understandings, arrangements or
rights relating to any shares of WCH's capital stock, or any securities
convertible into or representing the right to purchase or otherwise acquire any
capital stock or debt securities of WCH, by which WCH is or may become bound.
Except as set forth in Schedule 3.03 hereto, WCH does not have any outstanding
contractual or other obligation to repurchase, redeem or otherwise acquire any
of the Shares.
(c) Except as set forth in Schedule 3.03 hereto, each Shareholder owns
his shares of WCH Common Stock free and clear of all options, liens, pledges,
restrictions, security interests, charges, claims, pre-nuptial agreements,
post-nuptial agreements, rights of third parties (including, without limitation,
the other Shareholders) and encumbrances of any nature. Each Shareholder holds
his respective shares of WCH Common Stock as his sole and separate property.
Except as set forth in Schedule 3.03 hereto, no consent, approval, authorization
or waiver of any person, proprietorship, partnership, limited liability company,
corporation or other entity or party is required for the execution, delivery and
performance of this Agreement, or the consummation of the Exchange, by any
Shareholder. None of the Shareholders, and none of the Shares, are subject to or
bound by any buy-sell or other agreement or any other option, commitment,
understanding or obligation relating to the pledge, sale, purchase, acquisition,
transfer, gift or other disposition of any of the Shares.
(d) Set forth in Schedule 3.03 hereto is a listing of each person or
entity which beneficially owns shares of WCH Common Stock and the number of
shares owned by each person or entity.
3.04. Organizational Documents. The Articles of Incorporation and
By-Laws of WCH, representing true, accurate and complete copies of such
corporate documents in effect as of the date of this Agreement, have been
delivered to the Bank and are set forth in Schedule 3.04 hereto.
3.05. Compliance with Law. (a) Neither WCH nor any Shareholder or any
of WCH's employees has engaged in any activity or 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, code, restriction or
requirement, or in the violation of any order, injunction, judgment, writ or
decree of any court or government agency or authority, except where such
violation does not or would not reasonably be expected to have a material
adverse effect on the financial condition, results of operation, assets, income
or business of WCH. WCH and each Shareholder possesses and holds all licenses,
franchises, permits, certificates and other authorizations necessary for the
continued conduct of WCH's business without interference or interruption, except
where the failure to possess or hold the same does not or would not reasonably
be expected to have a
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material adverse effect on the financial condition, results of operation,
assets, income or business of WCH.
(b) Neither WCH nor any of its employees or property 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
supervisory letter from, any federal or state governmental agency or authority
charged with the supervision or regulation of insurance companies (including,
without limitation, the Illinois Department of Insurance) or the supervision or
regulation of WCH or any of its employees. There are no uncured violations, or
violations with respect to which refunds or restitutions may be required, cited
in any examination report of WCH as a result of an examination by any government
agency or authority, or set forth in any accountant's or auditor's report to WCH
or any Shareholder.
3.06. Accuracy of Statements Made and Materials Provided to the Bank.
No representation or warranty made by any of the Shareholders in this Section 3
or in the Schedules hereto, and no written report, list, certificate, materials
or other information furnished or to be furnished by WCH or any Shareholder to
the Bank or any of its affiliates through and including the Effective Time in
connection with this Agreement or the Exchange, contains any untrue, inaccurate
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.
3.07. Litigation and Pending Proceedings. (a) Except as set forth in
Schedule 3.07 hereto, there are no claims, actions, suits, proceedings,
mediations, arbitrations or investigations pending or to the knowledge of the
Shareholders after due inquiry, threatened in any court or before any government
agency or authority, arbitration panel or otherwise (nor does WCH or any
Shareholder have any knowledge of a basis for any claim, action, suit,
proceeding, litigation, arbitration or investigation) against, by or affecting
WCH or which would prevent the performance of this Agreement, declare the same
unenforceable or cause the rescission hereof.
(b) WCH is not: (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 knowledge of the Shareholders
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 knowledge of the Shareholders after
due inquiry, threatened proceeding by any government agency or authority having
jurisdiction over its respective business, assets, capital, properties or
operations.
3.08. Book of Business. (a) WCH owns the Book of Business (as defined
in Section 3.08(b) hereof) free and clear of all liens, pledges, restrictions,
security interests, charges, claims,
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rights of third parties, encumbrances and rights or claims of any of the
Shareholders or any employee of WCH. The Shareholders, jointly and severally,
represent and warrant the accuracy and completeness of (i) WCH's customer list
as of the date of this Agreement and as of the Effective Time, and (ii) WCH's
revenues for the thirty-six (36) months ended on the date of this Agreement.
(b) "Book of Business" shall mean the entire business of WCH as of the
date of this Agreement and as of the Effective Time, including, but not limited
to, (i) all in-house and brokered insurance, (ii) all property, casualty, life,
accident, disability, health and other insurance of every kind, (iii) all
tangible and intangible rights related to WCH's customers or policies of
insurance sold by WCH or any of its employees, and all fees, commissions and
revenue therefrom, (iv) a list of all of WCH's customers, together with their
addresses, places of residence or business, telephone and facsimile numbers and
all files and paperwork relating to such customers, and (v) any and all rights
arising under each existing policy of insurance written for WCH's customers,
together with all rights of renewal and servicing thereof and the right to
collect insurance premiums therefrom.
3.09. Financial Statements and Reports. WCH has delivered to the Bank
copies of the Balance Sheets and the related Statements of Income of WCH as of
and for the years ended December 31, 1998 and 1999, and as of and for the six
months ended June 30, 2000, including the notes thereto (collectively, the "WCH
Financial Statements").
The WCH Financial Statements present fairly the consolidated financial
position of WCH as of and at the dates shown and the consolidated results of
operations for the periods covered thereby. The WCH Financial Statements are
unaudited compilation 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 WCH 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 WCH Financial Statements false,
misleading or inaccurate in any material respect.
With respect to the assets and liabilities reflected on the WCH
Financial Statements as of June 30, 2000, WCH has not amended, modified, or
terminated, or forgiven, cancelled, released, compromised or granted any waiver
or concession under, any debt, obligation, claim or receivable, except, which is
not material in amount, whether individually or in the aggregate. WCH has not
guaranteed any debt or other obligation of any person, corporation, trust or
other entity.
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3.10. Properties, Contracts, Employees and Other Agreements. (a) Set
forth in Schedule 3.10 hereto are the following:
(i) A brief description and the location of all real property
owned or leased by WCH and, with respect to each lease of real
property, the names of 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 WCH
which individually or in the aggregate:
(A) involve payment or receipt by WCH of more than $25,000
in the aggregate;
(B) involve payments based on profits of WCH;
(C) relate to the purchase of goods, products, supplies or
services by WCH in excess of $25,000 in any calendar
year;
(D) were not made in the ordinary course of business;
(E) may not be terminated without penalty within one (1)
year from the date of this Agreement; or
(F) involve payment of any commissions to WCH, any of its
directors, officers, employees, agents or any
Shareholder;
(iii) The name and current annual salary of each director, officer
and employee of WCH, and the profit sharing, bonus or other
form of compensation (other than salary) paid or payable by
WCH to or for the benefit of each such person for the year
ended December 31, 1999 and year-to-date in 2000, and any
employment, severance or deferred compensation agreement or
arrangement with respect to each such person; and
(iv) A list of the ten (10) largest (based upon dollar premium
volume) agreements or contracts between WCH and any insurance
company pursuant to which WCH acts as agent or otherwise sells
products of such insurance company.
(b) Each of the agreements, contracts, commitments, leases,
instruments and documents set forth in Schedule 3.10 hereto is valid and
enforceable in accordance with its
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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. WCH and the Shareholders are, and, to the knowledge of the
Shareholders after due inquiry, all other parties thereto are, in compliance
with the provisions thereof. Neither WCH nor any of the Shareholders are in
default in the performance, observance or fulfillment of any obligation,
covenant or provision contained therein. None of such agreements, contracts,
commitments, leases, instruments or documents requires the consent of any party
to its assignment in connection with the Exchange, except for those consents (i)
the failure of which to obtain do not and would not reasonably be expected to
result in a material adverse effect on the financial condition, results of
operation, assets, income or business of WCH, or (ii) which have been obtained
by WCH or the Shareholders prior to the Effective Time and which do not extend,
amend, change or affect, or impose any additional liability or obligation under,
any such agreements, contracts, commitments, leases, instruments or documents.
(c) To the knowledge of the Shareholders after due inquiry, WCH is not
in default under or in breach of or, alleged to be in default under or in breach
of, any insurance policy, loan, credit or other agreement, conditional sales
contract or other title retention agreement, security agreement, bond,
indenture, mortgage, license, contract, lease, commitment or any other
instrument or obligation, except where such breach or default does not or would
not reasonably be expected to have a material adverse effect on the financial
condition, results of operation, assets, income or business of WCH.
(d) WCH does not own or possess any rights to any patents, trademarks,
service marks or trade names except for the name of Wolford Cannon Hoecker
Insurance Agency, Inc.
(e) Except as set forth in Schedule 3.10 hereto, WCH does not own and
has not owned any real property.
3.11. Absence of Undisclosed Liabilities. Except as provided in the WCH
Financial Statements, and except for the transactions contemplated by this
Agreement, WCH does not have, nor will have at the Effective Time, any
obligation, agreement, contract, commitment, liability, lease or license
requiring payments in excess of $25,000 in any calendar other than as set forth
in Schedule 3.10 hereto, or any other material obligation, agreement, contract,
commitment, liability, lease or license made outside of the ordinary course of
business.
3.12. Title to Assets. Except as described in this Section 3.12: (a)
WCH has good and marketable title in fee simple absolute to all real property
owned by it (including, without limitation, all real property used in its
insurance agency operations) which is reflected in the WCH Financial Statements
as of June 30, 2000; good title to all personal property reflected in
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the WCH Financial Statements as of June 30, 2000, other than personal property
disposed of in the ordinary course of business since June 30, 2000; good title
to or right to use by valid and enforceable lease or contract all other property
and assets (whether real or personal, tangible or intangible) which WCH uses in
its business; and good title to all property and assets acquired and not
disposed of or leased since June 30, 2000. All of such property and assets that
are owned by WCH are owned by WCH 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 Schedule 3.12 hereto; (ii) as disclosed in the WCH Financial
Statements; (iii) statutory liens for taxes not yet delinquent or being
contested in good faith by appropriate proceedings; and (iv) easements,
encumbrances and liens of record, imperfections of title and other limitations
which are not material in amounts to WCH and which do not materially reduce 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 WCH is in compliance
with all applicable zoning and land use laws.
To the knowledge of the Shareholders, all machinery, equipment,
furniture and fixtures owned or leased by WCH is mechanically sound, in good
operating condition and has been and is being maintained and repaired in the
ordinary course of business, ordinary wear and tear excepted.
(b) To the knowledge of the Shareholders, WCH has conducted its
business in compliance with all federal, state and local laws, statutes,
regulations, rules, ordinances, codes, 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,
air, water, soil 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 the rules 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 in effect (collectively,
"Environmental Laws"). Except as set forth in Schedule 3.12 hereto, there are no
pending or, to the knowledge of the Shareholders after due inquiry, threatened,
claims, actions or
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proceedings by any local municipality, sewage district or other governmental
entity against WCH with respect to the Environmental Laws. No environmental
clearances, permits or other governmental approvals are required for the conduct
of the business of WCH as presently conducted. To the knowledge of the
Shareholders after due inquiry, WCH is not 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, treatment, abatement,
response costs or any other remedial action under any of the Environmental Laws,
and there is no reasonable basis or grounds for any such claim, action or
proceeding. To the knowledge of the Shareholders after due inquiry, WCH
operates, leases, uses and controls, and has operated, leased, used and
controlled, all real property in compliance with the Environmental Laws. To the
knowledge of the Shareholders after due inquiry, WCH has no liability for any
clean-up or remediation under any of the Environmental Laws with respect to any
real property.
EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS AGREEMENT OR IN THE
SCHEDULES HERETO, THE SHAREHOLDERS MAKE NO REPRESENTATIONS OR WARRANTIES OF ANY
KIND OR NATURE WITH RESPECT TO WCH OR ITS ASSETS OR LIABILITIES.
3.13. 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 WCH, whether
written or oral, in which WCH participates as a participating employer; to which
WCH contributes and including any such plans which within the preceding six
years have been terminated, merged into another plan of WCH, frozen or
discontinued (collectively, "WCH Plans") except as set forth in Schedule 3.13
hereto: (i) all such WCH 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 WCH
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 WCH is not aware of any circumstances likely to result in revocation
of any such favorable determination letter; (iii) no WCH Plan (or its related
trust) holds any stock or other securities of WCH or any related or affiliated
person or entity; (iv) WCH has not engaged in any transaction that may subject
WCH, or any WCH 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 WCH Plan; and (vi)
there are no actions, suits, proceedings or claims pending (other than routine
claims for benefits) or, to the best knowledge of WCH and the Shareholders after
due inquiry, threatened, against WCH, any
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WCH Plan, any fiduciary of any WCH Plan or the assets of any WCH Plan as to
which WCH would have liability.
(b) WCH has made available to the Bank 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, fringe or benefit plans, or agreements, maintained
or sponsored, participated in, or contributed to by WCH for its current or
former directors, officers or employees.
(c) Except as set forth in Schedule 3.13 hereto, no current or former
director, officer or employee of WCH is entitled to any benefit under any
welfare benefit plans (as defined in Section 3(1) of ERISA) after termination of
employment with WCH, except that such individuals may be entitled to continue
their group health care coverage pursuant to the retiree health coverage
provisions, if any, under any group health plan (as defined in Section 607 (1)
of ERISA) sponsored or maintained by WCH, or pursuant to Section 4980B of the
Code if they pay the cost of such coverage pursuant to the applicable
requirements of that 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 WCH, in which WCH participates as a
participating employer or to which WCH contributes, no director, officer,
employee or agent of WCH 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 WCH 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 WCH.
(e) Except as set forth in Schedule 3.13 hereto, 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 WCH with any
employee or group of employees, any member of management or any other person.
3.14. Obligations to Employees. All contributions required to be made
under the terms of any WCH Plan have been timely made or have been reflected on
the WCH Financial
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Statements. Neither any WCH 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 WCH
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. WCH has not provided, nor 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.
3.15. Taxes, Returns and Reports. Except as set forth in Schedule 3.15
hereto, WCH 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 WCH or any of its income, properties or assets; and (c)
not requested an extension of time for any such payments (except for any
extension which is no longer in force). WCH has established, and shall establish
in the Subsequent WCH Financial Statements, in accordance with generally
accepted accounting principles, a reserve for taxes in the WCH Financial
Statements adequate to cover all of WCH's tax liabilities (including, without
limitation, income taxes, payroll taxes and withholding, and franchise fees) for
the periods then ending. WCH has not, nor will have, any liability for taxes of
any nature for or with respect to the operation of its business, or ownership of
its assets, from the date hereof up to and including the Effective Time, except
to the extent set forth in the Subsequent WCH Financial Statements (as
hereinafter defined) or as accrued or reserved for on the books and records of
WCH. WCH is not currently under audit by any state or federal taxing authority.
No federal, state or local tax returns of WCH have been audited by any taxing
authority during the past five (5) years.
3.16. Insurance. Set forth in Schedule 3.16 hereto is a list and brief
description of all policies of insurance (including, without limitation, errors
and omissions, directors' and officers' liability insurance, property and
casualty insurance, group health or hospitalization insurance and insurance
providing benefits for employees) owned or held by WCH on the date hereof or
with respect to which WCH 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 the Bank prior to
the date hereof. The WCH Key Man Insurance (as hereinafter defined) is owned
solely by WCH. WCH is the only party entitled to receive any insurance proceeds
or cash surrender value with respect to the WCH Key Man Insurance and all other
insurance policies owned, or as to which any premiums are paid, by WCH, other
than the WCH Insured Benefit Plans.
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3.17. Books and Records. The books and records of WCH are true,
accurate and complete and have been properly and accurately maintained.
3.18. Broker's, Finder's or Other Fees. Except for reasonable fees of
WCH's attorneys and accountants, all of which shall be paid or accrued by WCH
prior to the Effective Time and reflected in the Tangible Net Worth, no agent,
broker or other person acting on behalf of WCH or any of the Shareholders or
under any authority of WCH or any of the Shareholders are 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
Exchange contemplated hereby.
3.19. Interim Events. (a) Except as set forth in Schedule 3.19 hereto
and except for changes in general economic conditions or circumstances known in
the insurance industry generally, between the period from December 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 on the
financial position, results of operations, prospects or business of WCH.
(b) Except as set forth in Schedule 3.19 hereto, between the period
from December 31, 1999 to the date of this Agreement, WCH has carried on its
business in the ordinary and usual course consistent with its past practices
(excluding the incurrence of reasonable 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 WCH's capital stock; or
(ii) any split, combination or reclassification of any
capital stock of WCH 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 WCH capital stock.
3.20. Regulatory Filings. WCH has filed and will continue to file in a
timely manner all required filings with all appropriate government agencies and
authorities as required by applicable law, except where the failure to make any
such filing does not or would not reasonably be expected to result in a material
adverse effect on the financial condition, results of operation, assets, income
or business of WCH.
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3.21. Indemnification Agreements. (a) WCH is not 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
WCH.
(b) No claims have been made against or filed with WCH, nor have, to
the knowledge of the Shareholders after due inquiry, any claims been threatened
against WCH, 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
WCH.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF THE BANK
The Bank hereby represents and warrants to WCH as follows:
4.01. Organization and Authority. The Bank is an Indiana banking
corporation duly organized and validly existing under the laws of the State of
Indiana, 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.
4.02. Authorization. (a) The Bank 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 7.01 (d) and (e) hereof. As of the date hereof, the Bank is not aware of
any reason why the approvals set forth in Section 7.01(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 7.01(e). This Agreement and its
execution and delivery by the Bank have been duly authorized by its Board of
Directors. Assuming due execution and delivery by WCH and the Shareholders, this
Agreement constitutes a valid and binding obligation of the Bank, subject to the
conditions precedent set forth in Section 7.01 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. Other
than the approval of the issuance of the shares of ONB Common Stock to be
delivered to the Shareholders in the Exchange, no approval of this Agreement by
the board of directors or shareholders of ONB is required.
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(b) Other than in connection or in compliance with applicable federal
and state banking 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 the Bank of the Exchange contemplated by this
Agreement.
4.03. Shares to be Issued in Exchange. The shares of ONB Common Stock
which the Shareholders shall receive upon consummation of the Exchange pursuant
to this Agreement (a) shall, at the Effective Time, be duly authorized and
shall, when delivered in accordance with this Agreement, be validly issued,
fully paid and nonassessable, (b) shall have been registered under the 1933 Act
and authorized for trading on the Nasdaq National Market System, and (c) shall
not bear any restrictive legend or notation purporting to restrict or limit the
free transferability thereof following the Effective Time.
4.04. Broker's, Finder's or Other Fees. Except for reasonable fees of
the Bank's attorneys and accountants, no agent, broker or other person acting on
behalf of the Bank or under any authority of the Bank 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
Exchange contemplated hereby.
4.05. SEC Filings. All required filings of ONB with the SEC since
January 1, 1997 have complied in all material respects as to form with the
applicable requirements and were true, accurate and complete in all material
respects as of the day of the filing, no such filing contained any untrue
statements 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.
4.06. No Conflicts. The execution, delivery and performance of this
Agreement and any other agreements contemplated hereby by the Bank or ONB (a)
will not violate any provision of ONB's or the Bank's, as the case may be,
Articles of Incorporation or By-Laws, and (b) will not violate any applicable
statute, law, rule or regulation.
4.07. ONB Common Stock. A sufficient number of shares of ONB Common
Stock required for the Exchange have been duly authorized and validly issued
and, at the Effective Time, will be available for delivery to the Shareholders
pursuant to this Agreement.
4.08. Accuracy of Statements Made and Materials Provided. No
representation or warranty made by the Bank in this Section 4 or in any written
report, list, certificate, materials or other document furnished by the Bank to
any of the Shareholders in connection with this Agreement or the Exchange
contains any untrue, inaccurate or misleading statement of material
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fact or omits 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.
SECTION 5
COVENANTS OF WCH AND THE SHAREHOLDERS
WCH and each of the Shareholders covenant and agree with the Bank as
follows:
5.01. Approvals. (a) WCH and any of the Shareholders shall proceed
expeditiously, cooperate fully and use their best efforts to assist the Bank 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 Exchange on the terms and conditions
provided in this Agreement at the earliest possible reasonable date.
(b) Any materials or information provided by WCH and any of the
Shareholders for use by the Bank or 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.
5.02. 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 WCH nor any Shareholder shall, without the prior
written consent of the Bank:
(i) make any changes to the capital stock accounts of WCH
(including, without limitation, any stock split, stock
dividend, recapitalization or reclassification);
(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 3.03 hereof;
(iii) distribute or pay any dividends on the Shares, or make
any other distribution to the Shareholders, that would
cause the Tangible Net Worth to be less than $225,000;
(iv) redeem, transfer, convey or sell any of the Shares;
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(v) merge, combine or consolidate or effect a share
exchange with or sell WCH's 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 person, corporation or other
entity, except in the ordinary course of business;
(vii) make any loan or commitment to lend money;
(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 or
fixed asset constituting a capital investment in excess
of $5,000 individually or $10,000 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;
(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, employee or shareholder of WCH
(except for promotions and compensation increases in
the ordinary course of business and in accordance with
past practices and established employment policies of
WCH and other than pursuant to an employee retention
program, which has been disclosed to the Bank);
(xi) execute, create, institute, modify, amend or terminate
(except with respect to any amendments to WCH 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 WCH; or change the
level of benefits or payments under any of the
foregoing or increase or decrease any severance or
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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 shareholders, directors, officers
or employees of WCH;
(xiii) hire or employ any new or additional employees of
WCH, except those which are reasonably necessary for
the proper operation of WCH;
(xiv) elect or appoint any executive officers or directors
of WCH who are not presently serving in such
capacities;
(xv) amend, modify or restate WCH's Articles of
Incorporation or By-Laws from those in effect on the
date of this Agreement and as delivered to the Bank
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 capital stock or substantially all of the assets of
WCH, or enter into any agreement or commitment relative
to the foregoing;
(xvii) 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;
(xviii) except for (A) obligations disclosed within this
Agreement or the Disclosure Schedules, (B) trade
payables and similar liabilities and obligations
incurred in the ordinary course of business and (C) the
payment, discharge or satisfaction in the ordinary
course of business of liabilities reflected in the WCH
Financial Statements, WCH shall not (I) borrow any
money, (II) incur any indebtedness, or (III) incur any
liability or obligation (whether absolute, accrued,
contingent or otherwise), in an aggregate amount
exceeding $10,000;
(xix) open, close, move or, in any material respect, expand,
diminish, renovate, alter or change any of its offices;
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(xx) pay or commit to pay any management or consulting or
other similar type of fees other than in the ordinary
course of business;
(xxi) WCH shall not guarantee any debt or obligation of any
Shareholder or any other person, corporation, trust or
other entity; or
(xxii) change any of the terms of, or amend, modify or
restate, any contract, agreement, lease, note,
mortgage, insurance policy, obligation, commitment,
understanding or employee benefit plan to which WCH or
any of the Shareholders is bound or subject or pursuant
to which WCH or any of the Shareholders receives or may
receive any benefits or makes or may make any payments,
which has or would reasonably be expected to have a
material adverse effect on the financial condition,
results of operation, assets, income or business of
WCH.
(b) WCH shall maintain, or cause to be maintained, in full force and
effect, insurance on their assets, properties and operations, errors and
omissions insurance (excluding tail coverage) on its employees in such amounts
and with regard to such liabilities and hazards as are currently insured by WCH
as of the date of this Agreement.
5.03. 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, WCH and each of the Shareholders shall: (a) carry on the business of
WCH 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 insurance
companies, clients, customers and persons having business dealings with it; (c)
maintain all of the properties and assets that WCH 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 WCH's 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 WCH's
business; and (e) not knowingly do or fail to do anything which will cause a
breach of, or default in, any material contract, agreement, commitment,
obligation, understanding, arrangement, lease or license to which WCH is a party
or is otherwise subject or bound.
5.04. Other Negotiations. 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 the Bank, neither WCH nor
any of the Shareholders shall, and WCH shall not
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permit or authorize any of its shareholders, directors, officers, employees,
agents or representatives to, directly or indirectly, initiate, solicit,
encourage, provide information to, discuss with or negotiate with any
corporation, limited liability company, association, partnership, person or
other entity or group concerning any merger, consolidation, share exchange,
combination, purchase or sale of substantial assets, sale of capital 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 WCH or to which WCH or any Shareholder is or may
become a party.
5.05. Terry Smith Litigation. Following the Effective Time, in
connection with the complaint captioned Wolford Cannon Hoecker Insurance Agency,
Inc. vs. Terrance L. Smith, Docket No. 98-L-35 currently pending in Vermilion
County, Illinois (including, without limitation, all counterclaims, cross claims
and appeals related thereto) (the "Terry Smith Litigation"), the Shareholders,
jointly and severally, shall promptly pay (a) all attorneys' fees incurred by
WCH, (b) all costs, expenses and disbursements incurred by WCH (including,
without limitation, all consultant, expert witness and other professional fees
and expenses), and (c) all losses, damages, awards, judgments, settlements and
other amounts paid by WCH. All attorneys' fees of WCH and all costs, expenses
and disbursements of WCH (including, without limitation, all consultant, expert
witness and other professional fees and expenses) related to the Terry Smith
Litigation incurred on or prior to the Effective Time shall be reflected in the
Tangible Net Worth and shall be accrued on the books and records of WCH and or
be paid in full prior to the Effective Time.
5.06. Press Releases. Except as required by law or except with the
prior written consent of all of the parties hereto (which consent shall not be
unreasonably withheld), neither WCH nor any of the Shareholders shall issue any
news or press release or make any other public announcement or disclosure
relating to the Exchange.
5.07. Disclosure Schedule Update. The Shareholders shall promptly
supplement, amend and update (a) prior to the Effective Time, each of the
Schedules hereto which is incorrect, untrue or misleading in any material
respect, and (b) each of the Schedules hereto, upon the occurrence or discovery
of any change prior to the Effective Time, and as of the Effective Time, in any
of the Schedules hereto with respect to any matters or events in existence on or
prior to the date of this Agreement or 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 any of the Schedules hereto or in 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 WCH
and the Shareholders contained herein incorrect, untrue or misleading. Any and
all such supplements, amendments and updates which result in or would reasonably
be expected to result in a material adverse effect on the financial condition
results of operation,
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assets, income or business of WCH shall not become part of any Schedule hereto
unless the Bank shall expressly agree in writing thereto. All such supplements,
amendments and updates that become part of the Schedules hereto upon the
agreement in writing of the Bank shall be referred to herein collectively as the
"Disclosure Schedule Updates."
5.08. Information, Access Thereto, Confidentiality. The Bank 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 WCH. The
Bank 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 WCH and of their financial and legal condition
as deemed necessary or advisable to familiarize themselves with such operations,
books, records, properties and other matters; provided, however, that such
access or investigation shall not interfere with the normal business operations
of WCH. Upon request, WCH shall furnish the Bank 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 the Bank which has been or is developed by WCH, their
auditors, accountants or attorneys (provided with respect to attorneys, such
disclosure (i) would not result in the waiver by WCH or the Shareholder of any
claim of attorney-client privilege, and (ii) shall not include information
related to the Exchange), and will permit the Bank and its respective
representatives or agents to discuss such information directly with any
individual or firm performing auditing or accounting functions for WCH, and such
auditors and accountants shall be directed to furnish copies of any reports or
financial information as developed to the Bank or its respective representatives
or agents. No investigation by the Bank shall affect the representations and
warranties made by WCH and the Shareholders herein. The Bank shall not use any
such information obtained pursuant to this Agreement for any purpose unrelated
to the Exchange. Any confidential information or trade secrets received by the
Bank 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 the Bank or, at WCH's
request, returned to WCH in the event this Agreement is terminated for any
reason. This Section 5.08 shall not require the disclosure of any information to
the Bank which would be prohibited by law.
5.09. Subsequent WCH Financial Statements. As soon as reasonably
available after the date of this Agreement, WCH shall deliver to Bank the
monthly unaudited balance sheets and profit and loss or income statements of WCH
prepared for its internal use, and all other financial reports or statements
submitted to regulatory authorities after the date hereof, to the extent
permitted by law (collectively, "Subsequent WCH Financial Statements"). The
Subsequent
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WCH 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 WCH 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.
5.10. Employee Benefits. Neither the terms of Section 6.03 hereof nor
the provision of any employee benefits by ONB to employees of WCH 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 WCH; or (b) prohibit or restrict ONB, whether
before or after the Effective Time, from changing, amending, terminating or
freezing any employee benefits provided to its employees from time to time.
5.11. Disposition of WCH Incentive Compensation Plan. WCH shall
continue its existing incentive compensation plan (the "WCH Incentive
Compensation Plan") in full force and effect until December 31, 2000, and shall
continue to make or accrue a liability for all payments due to
employee/producers of WCH for production under the WCH Incentive Compensation
Plan to the Effective Time, provided such payments or liabilities have been
earned prior to the Effective Time, are comparable in amount to any past
payments by or liabilities of WCH under such plan and are reflected in the
Tangible Net Worth. Effective January 1, 2001, WCH shall terminate the WCH
Incentive Compensation Plan, and no payments shall be made, or liabilities
accrued, under the WCH Incentive Compensation Plan for incentive compensation
earned subsequent to December 31, 2000.
5.12. Disposition of WCH SEP Plan. WCH shall continue its existing
simplified employee pension plan (the "WCH SEP Plan") in full force and effect
until December 31, 2000, and shall continue to make or accrue a liability for
all contributions which WCH is required or permitted to make to the WCH SEP Plan
to the Effective Time, provided such contributions or liabilities are comparable
in amount to any past contributions or liabilities of WCH under such plan and
are reflected in the Tangible Net Worth. Effective January 1, 2001, WCH shall
terminate the WCH SEP Plan, and no contributions shall be made, or liabilities
accrued, under the WCH SEP Plan for plan compensation earned subsequent to
December 31, 2000.
5.13. Disposition of WCH Health, Disability and Life Plans. WCH shall
continue its existing insured medical plan, basic life plan and long term
disability plan (the "WCH Insured Benefit Plans") in full force and effect until
December 31, 2000, and shall continue to make or accrue a liability for all
insurance premiums which WCH is required to make in order to continue
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the insurance coverages under the WCH Insured Benefit Plans in force to the
Effective Time, provided such premiums or liabilities are comparable in amount
to any past premiums or liabilities of WCH under such plans and are reflected in
the Tangible Net Worth. Effective January 1, 2001, WCH shall terminate the WCH
Insured Benefit Plans, and the insurance coverages thereunder, and no premiums
shall be paid, or liabilities accrued under the WCH Insured Benefit Plan for any
claims or expenses incurred subsequent to December 31, 2000.
5.14. Disposition of WCH Sec. 125 Plan. WCH shall continue its existing
flexible spending account plan (the "WCH Sec. 125 Plan") in full force and
effect until December 31, 2000, and shall continue to contribute, no later than
the date required by ERISA, to such plan the pre-tax contributions which the
participants in the WCH Sec. 125 Plan elect to defer from compensation in order
to pay the employee portion of the cost of coverage or other benefits under such
plan or under any WCH Insured Benefit Plan for the 2000 calendar year. Effective
January 1, 2001, WCH shall terminate the WCH Sec. 125 Plan, and no elective
deferral contributions shall be made to, or liabilities accrued under, the WCH
Sec. 125 Plan for coverage or other benefits subsequent to December 31, 2000.
5.15. Disposition of WCH Sick Leave Plan. WCH shall continue its
existing sick leave plan (the "WCH Sick Leave Plan") in full force and effect
until December 31, 2000, and shall continue to fund from the general assets of
WCH the benefits payable under the WCH Sick Leave Plan for qualifying leaves of
absence to the Effective Time, provided such benefits or liabilities are
comparable in amount to any past benefits from or liabilities under such plan.
Effective January 1, 2001, WCH shall terminate the WCH Sick Leave Plan. No
additional days of paid sick leave shall accrue or accumulate under the WCH Sick
Leave Plan for employment with WCH beyond December 31, 2000. Any unused days or
hours of any participant under the WCH Sick Leave Plan as of December 31, 2000,
and who continues in the employ of or on sick leave from WCH or the Bank
subsequent to December 31, 2000, shall be transferred to, and credited to such
individual under, the Bank's existing sick leave program. The benefits payable
after December 31, 2000 to any employee who commences a sick leave prior to
January 1, 2001 and has not returned to active employment as of such date shall
be determined pursuant to the Bank's sick leave program.
5.16. Disposition of WCH's Vacation Program. WCH shall continue its
existing vacation program (the "WCH Vacation Program") in full force and effect
until December 31, 2000, and shall continue to fund from the general assets of
WCH the benefits payable under the WCH Vacation Program for qualifying vacations
to the Effective Time, provided such benefits or liabilities are comparable in
amount to any past benefits or liabilities of WCH under such plan. Effective
January 1, 2001, WCH shall terminate the WCH Vacation Program. No additional
days of paid vacation shall accrue or accumulate under the WCH Vacation Program
for employment with WCH beyond December 31, 2000. Any unused paid vacation days
as of
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December 31,2000, of any WCH employee under the WCH Vacation Program shall be
credited to such employee under the Bank's existing vacation program as of
January 1, 2001, and shall offset the number of paid vacation days available to
such employee under the Bank's vacation program for the 2001 calendar year.
5.17. Disposition of WCH's Key Man Insurance. WCH shall continue the
existing key man life insurance program (the "WCH Key Man Insurance") in full
force and effect until ONB or the Bank determines otherwise, and shall continue
to fund, from the general assets of WCH, or accrue a liability for, the premiums
necessary to keep in force the current levels of coverage under all existing
life insurance policies currently owned by WCH in connection with the WCH Key
Man Insurance. All premiums owed or paid in connection with the WCH Key Man
Insurance shall be reflected in the Tangible Net Worth. After the Effective
Time, the Bank shall determine whether such policies shall remain in effect or
be surrendered for their respective cash values.
5.18. Reports. Promptly upon its becoming available, furnish to the
Bank one (1) copy of each financial statement, report or notice sent by WCH to
the Shareholders generally and of each regular or periodic report, and of any
order issued by any Governmental Authority in any proceeding to which WCH or the
Shareholder 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 body or authority having
or asserting jurisdiction over WCH or any of its business, operations or
properties.
5.19. Adverse Actions. WCH and the Shareholders shall not (a) take any
action while knowing that such action would, or is reasonably likely to, prevent
or impede the Exchange from qualifying as a reorganization within the meaning of
Section 368(a)(1)(B) 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 any
materiality or other qualification set forth in any such representations and
warranties, in any respect at any time at or prior to the Effective Time, (ii)
any of the conditions to the Exchange set forth in Section 7 not being
satisfied, (iii) a material violation of any provision of this Agreement or (iv)
a delay in the consummation of the Exchange except, in each case, as may be
required by applicable law or regulation.
5.20. Indemnification by the Shareholders. (a) Subject to Sections
5.20(b), 11.03 and 11.14 hereof, the Shareholders, jointly and severally, hereby
covenant and agree to indemnify, reimburse, defend and hold harmless, following
the Effective Time, the Bank, WCH and each of their successors and permitted
assigns for, from and against each and every Loss (as defined in Section 11.14
hereof) incurred by the Bank, WCH and each of their respective parent companies,
affiliates, successors and permitted assigns based upon, arising out of or
relating to (i) any and all
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inaccuracies in or breaches by any Shareholder of any of the representations or
warranties of the Shareholders set forth in this Agreement, in any of the
Schedules hereto or in any document or certificate delivered by WCH or any of
the Shareholders prior to the Effective Time or at the Closing, (ii) any and all
breaches prior to the Effective Time by WCH or any Shareholder of any of the
covenants or agreements of WCH or the Shareholders set forth in this Agreement,
and (iii) the enforcement of this Section or any other provision of this
Agreement against any of the Shareholders.
(b) Notwithstanding any other provisions of this Agreement to the
contrary,
(i) no amount shall be payable under this Section by the
Shareholders unless and until the aggregate amount
otherwise payable by the Shareholders under this
Section exceeds Ten Thousand Dollars ($10,000)
("Shareholders' Basket Amount"), in which event only
those amounts in excess of the Shareholders' Basket
Amount shall be subject to indemnification claims under
this Section,
(ii) the maximum indemnification obligation of each
Shareholder for all claims under this Agreement is Five
Hundred Thousand Dollars ($500,000),
(iii) all indemnification claims against the Shareholders
under this Section based upon, arising out of or
relating to any inaccuracies in or breaches by any
Shareholder of any of the representations or warranties
of the Shareholders must be made by the close of
business on April 15, 2002, and
(iv) all indemnification claims against the Shareholders by
the Bank under this Section based upon, arising out of
or relating to any breaches prior to the Effective Time
by WCH or any Shareholder of any of the covenants or
agreements of WCH or the Shareholders must be made by
the close of business on April 15, 2002.
5.21. Sale of WCH Real Property. W. John Shane and Robert K. Hoecker
(jointly and severally, the "Real Estate Owners") covenant and agree to cause to
be sold, transferred, conveyed and delivered to ONB or the Bank immediately
prior to the Closing or on the same day that the Closing occurs, pursuant to the
real estate purchase agreement substantially in the form attached hereto as
Exhibit D (the "Real Estate Agreement"), the real property and all improvements
thereon located at 923 North Vermillion, Danville, Illinois and at which WCH
conducts its business and all outlots adjacent thereto (the "WCH Real
Property").
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SECTION 6
COVENANTS OF THE BANK
The Bank covenants and agrees with WCH as follows:
6.01. Approvals. The Bank or its representatives shall have primary
responsibility for the preparation, filing and costs of all regulatory
applications required for consummation of the Exchange to be filed with any
government agency or authority. The Bank or its representatives shall file all
regulatory applications as soon as practicable after the execution of this
Agreement. The Bank shall provide to WCH's legal counsel a reasonable
opportunity to review such applications prior to their filing and shall provide
to WCH's legal counsel copies of all applications filed and copies of all
material written communications with all state and federal regulatory agencies
relating to such applications. The Bank shall proceed expeditiously, cooperate
fully and use its best efforts to procure, upon terms and conditions reasonably
acceptable to the Bank, 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
Exchange on the terms and conditions provided in this Agreement at the earliest
possible reasonable date.
6.02. SEC Registration. (a) Prior to the execution of this Agreement,
ONB shall have filed with the SEC a Registration Statement covering the shares
of ONB Common Stock to be delivered to the Shareholders pursuant to this
Agreement and shall use its reasonable efforts to cause the same to remain
effective until the Effective Time or the termination of this Agreement and, if
necessary, to amend and supplement the same. Such Registration Statement and any
amendments and supplements thereto are referred to in this Agreement as the
"Registration Statement". ONB or its representative shall make all filings
required to obtain all Blue Sky exemptions, authorizations, consents or
approvals required for the issuance of ONB Common Stock.
(b) Any materials or information provided by the Bank or ONB or their
representatives 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 or its representatives 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
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<PAGE>
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 or its representatives will use reasonable efforts to authorize
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 Exchange.
6.03. Employee Benefit Plans. (a) As of January 1, 2001, the employees
of WCH who continue as employees of WCH after January 1, 2001, subject to
Section 6.03(b) and (c) hereof, shall be entitled to receive 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 WCH become covered by ONB's welfare benefit plans, the employees of
WCH shall remain covered by the WCH Plans which cover such employees, subject to
the terms and conditions of such plans. Except as otherwise provided in Sections
5.11 through 5.17 hereof, the Bank shall cause WCH to honor in accordance with
their terms all employee benefit obligations of WCH to current and former
officers and employees of WCH accrued as of December 31, 2000, to the extent set
forth in Schedule 6.03 hereto.
(b) Years of service (as defined in the applicable ONB plan) of each
officer or employee of WCH prior to January 1, 2001, 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
6.03(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") and the ONB Employees' Savings Plan ("ONB Savings Plan"); and (iii)
eligibility, vesting, and benefit accrual or contributions (including matching
contributions), under the ONB Employee Stock Ownership Plan ("ESOP"). Those
officers and employees of WCH who otherwise meet the eligibility requirements of
the ONB Pension Plan, the ONB Savings Plan, and the ESOP, based upon their age
and years of service with WCH, shall become participants thereunder no later
than January 1, 2001. Those officers or employees of WCH who do not meet the
eligibility requirements of the ONB Pension Plan, ONB Savings Plan or ESOP on
such date shall become participants thereunder on the first plan entry date
under the ONB Pension Plan, the ONB Savings Plan or ESOP, as the case may be,
which coincides with or next follows the date on which such eligibility
requirements are satisfied.
(c) In accordance with the provisions of the Health Insurance
Portability and Accountability Act ("HIPAA") and the terms of the ONB group
health plan, officers and employees of WCH who become participants in the ONB
group health plan will be given "creditable coverage" credit for their coverage
under WCH's group health plan under the ONB group health plan's pre-existing
condition limitation provisions. Notwithstanding the foregoing,
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<PAGE>
if a condition was not a "pre-existing condition" for a participant in WCH group
health plan, it shall not be considered to be a pre-existing condition under the
ONB group health plan.
(d) Neither the terms of this Section 6.03 nor the provision of any
employee benefits by ONB or any of its subsidiaries to employees of WCH shall:
(i) create any employment contract, agreement, commitment or understanding with
or employment rights for, or constitute a commitment or obligation of employment
to, any of the officers or employees of WCH; or (ii) prohibit or restrict ONB,
whether before or after the Effective Time, from changing, amending, terminating
or freezing any employee benefits provided to its employees from time to time.
6.04. Press Releases. Except as required by law or except with the
prior written consent of all of the parties hereto (which consent shall not be
unreasonably withheld), neither the Bank nor ONB shall issue any news or press
release or make any other public announcement or disclosure relating primarily
to WCH or the Shareholders with respect to the Exchange.
6.05. Adverse Actions. The Bank shall not (a) take any action while
knowing that such action would, or is reasonably likely to, prevent or impede
the Exchange from qualifying as a reorganization within the meaning of Section
368(a)(1)(B) 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 any materiality
or other qualification set forth in any such representations and warranties, in
any respect at any time at or prior to the Effective Time, (ii) any of the
conditions to the Exchange 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 Exchange except, in each case, as may be required by
applicable law or regulation.
6.06. Indemnification by the Bank. (a) Subject to Sections 6.06(b),
11.03 and 11.14 hereof, the Bank hereby covenants and agrees to indemnify,
reimburse, defend and hold harmless, following the Effective Time, each of the
Shareholders for, from and against each and every Loss (as defined in Section
11.14 hereof) incurred by the Shareholders based upon, arising out of or
relating to (i) any and all inaccuracies in or breaches by the Bank of any of
its representations or warranties set forth in this Agreement or in any document
or certificate delivered by the Bank to the Shareholders prior to the Effective
Time or at the Closing, (ii) any and all breaches by the Bank of any of its
covenants or agreements set forth in this Agreement, and (iii) the enforcement
of this Section or any other provision of this Agreement against the Bank.
(b) Notwithstanding any other provisions of this Agreement to the
contrary,
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(i) no amount shall be payable under this Section by the
Bank unless and until the aggregate amount otherwise
payable by the Bank under this Section exceeds Ten
Thousand Dollars ($10,000) ("Bank's Basket Amount"),
in which event only those amounts in excess of the
Bank's Basket Amount shall be subject to
indemnification claims under this Section,
(ii) the maximum indemnification obligation of the Bank
for all claims under this Agreement to all of the
Shareholders is One Million Five Hundred Thousand
Dollars ($1,500,000) in the aggregate, plus the
obligation of the Bank to deliver the shares of ONB
Common Stock in the Exchange,
(iii) all indemnification claims against the Bank under
this Section based upon, arising out of or relating
to any inaccuracies in or breaches by the Bank of any
of its representations or warranties must be made by
the close of business on April 15, 2002, and
(iv) all indemnification claims against the Bank under
this Section based upon, arising out of or relating
to any breaches by the Bank of any of its covenants
or agreements must be made not later than the close
of business on April 15, 2002.
6.07. Insurance. Immediately following the Effective Time, WCH shall be
included in ONB's errors and omissions insurance policy, with full prior acts
coverage.
6.08. Purchase of WCH Real Property. ONB or the Bank shall purchase the
WCH Real Property pursuant to the Real Estate Agreement immediately prior to the
Closing or on the same day that the Closing occurs.
6.09. Terry Smith Litigation. Following the Effective Time, WCH shall
(a) not settle any claim in the Terry Smith Litigation without the prior written
consent of a majority of the Shareholders, which consent shall not be
unreasonably withheld, and (b) promptly pay to the Shareholders any and all
damages, awards, judgments, settlements and other amounts received by WCH in the
Terry Smith Litigation.
6.10. Met Life Bonus. WCH shall, promptly upon receipt from Met Life,
pay to the Shareholders the Met Life bonus earned by them prior to the Effective
Time.
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<PAGE>
SECTION 7
CONDITIONS PRECEDENT TO THE EXCHANGE
7.01. Bank. The obligation of the Bank to consummate the Exchange 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 the Bank:
(a) Representations and Warranties at Effective Time. Each of the
representations and warranties of the Shareholders contained in this Agreement
shall be true, correct and complete at and as of 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 WCH and the
Shareholders shall have been fulfilled or complied with from the date of this
Agreement through and as of the Effective Time.
(c) Deliveries at Closing. The Bank shall have received from WCH and
the Shareholders at the Closing (as hereinafter defined) the items and
documents, in form and content reasonably satisfactory to the Bank, listed in
Section 10.02(b) hereof.
(d) Registration Statement Effective. ONB shall have registered its
shares of common stock to be delivered to the Shareholders 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. No stop order shall have been
issued or threatened with respect to the Registration Statement.
(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 the
Bank reasonably determines in good faith would (i) following the Effective Time,
have a material adverse effect on the financial position, results of operations,
prospects or business of the Bank or WCH, or (ii) reduce the benefits of the
transactions contemplated hereby to such a degree that the Bank would not have
entered into this Agreement had such conditions, restrictions or requirements
been known at the date hereof.
(f) Officers'/Shareholders Certificate. WCH and each of the
Shareholders shall have delivered to the Bank a certificate signed by its
Chairman or President and its Secretary, and each of the Shareholders, dated as
of the Effective Time, certifying: (i) to the effect set forth in Section
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<PAGE>
7.01(a) hereof; (ii) that all the covenants and agreements of WCH and the
Shareholders have been complied with from the date of this Agreement through and
as of the Effective Time; and (iii) that WCH and the Shareholders have satisfied
and fully complied with all conditions necessary to make this Agreement
effective as to WCH and the Shareholders.
(g) WCH's Proof of Consent. WCH shall have delivered to the Bank
documentation evidencing the written consent of applicable insurance companies
approving the change in control of WCH with respect to those executory contracts
and agreements with the ten (10) largest insurance companies (based upon dollar
premium volume) with which WCH presently has agency contracts and which require
the consent of the insurance company because of the Exchange, which insurance
companies are listed in Schedule 3.10 hereto.
(h) Tax Opinion. The Board of Directors of the Bank 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 reasonably satisfactory to
the Bank, to the effect that the Exchange to be effected pursuant to this
Agreement will constitute a tax-free reorganization under Section 368(a)(l)(B)
of the Code with respect to the Bank and the Shareholders. In rendering such
opinion, counsel may require and rely upon customary representation letters of
the Bank, WCH and the Shareholders and rely upon customary assumptions.
(i) No Proceedings. No claim, action, suit, proceeding or investigation
shall be pending or threatened which, if adversely determined, would prevent or
invalidate the consummation of the Exchange.
(j) Real Estate. The Real Estate Agreement shall not have been
terminated, and all conditions precedent to closing the purchase and sale
contemplated therein shall have been satisfied.
(k) No Termination. This Agreement shall not have been terminated in
accordance with its terms.
(l) Disclosure Schedule Updates. The Disclosure Schedule Updates, if
any, shall be acceptable to the Bank in its sole discretion.
(m) Stock Certificates. Stock certificates representing all of the
Shares, duly endorsed in blank for transfer, shall have been delivered to the
Bank.
7.02. WCH and the Shareholders. The obligation of the Shareholders to
consummate the Exchange 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 each Shareholder:
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(a) Representations and Warranties at Effective Time. Each of the
representations and warranties of the Bank contained in this Agreement shall 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 the Bank shall
have been fulfilled or complied with from the date of this Agreement through and
as of the Effective Time.
(c) Deliveries at Closing. WCH and the Shareholders shall have received
from the Bank at the Closing the items and documents, in form and content
reasonably satisfactory to WCH and the Shareholders, listed in Section 10.02(a)
hereof.
(d) Registration Statement Effective. ONB shall have registered its
shares of common stock to be delivered to the Shareholders 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. No stop order shall have been
issued or threatened with respect to the Registration Statement. 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 Shareholders reasonably
determine in good faith would have a material adverse effect on the anticipated
benefits of the transactions contemplated hereby to the Shareholders to such a
degree that the Shareholders would not have entered into this Agreement had such
conditions, restrictions or requirements been known at the date hereof.
(f) Officers' Certificate. The Bank shall have delivered to the
Shareholders a certificate signed by its Chairman or President and its Cashier,
dated as of the Effective Time, certifying: (i) to the effect set forth in
Section 7.02(a) hereof; (ii) that all the covenants and agreements of the Bank
have been complied with from the date of this Agreement through and as of the
Effective Time; and (iii) that the Bank has satisfied and fully complied with
all conditions necessary to make this Agreement effective as to it.
(g) Tax Opinion. The Shareholders 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 reasonably satisfactory to the Shareholders,
to the effect that the Exchange to be effected pursuant to this Agreement will
constitute a tax-free reorganization under Section 368(a)(l)(B) of
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<PAGE>
the Code to the Bank and the Shareholders. In rendering such opinion, counsel
may require and rely upon customary representation letters of the Bank and WCH
and the Shareholders and rely upon customary assumptions.
(h) No Proceedings. No claim, action, suit, proceeding or
investigation shall be pending or threatened which, if adversely determined,
would prevent or invalidate the consummation of the Exchange.
(i) Real Estate. The Real Estate Agreement shall not have been
terminated, and all conditions precedent to closing the purchase and sale
contemplated therein shall have been satisfied.
(j) No Termination. This Agreement shall not have been terminated in
accordance with its terms.
SECTION 8
TERMINATION OF THE EXCHANGE
8.01. Manner of Termination. This Agreement and the Exchange may be
terminated at any time prior to the Effective Time by written notice delivered
by the Bank to WCH, or by WCH to the Bank, as follows (with no Shareholder, in
such capacity, having the right to terminate this Agreement or the Exchange):
(a) By the Bank or WCH, if:
(i) the Exchange contemplated by this Agreement has not
been consummated on or before December 31, 2000, and
the party seeking such termination is not then in
breach hereunder; or
(ii) the respective Boards of Directors of the Bank and WCH
mutually agree to terminate this Agreement.
(b) By the Bank, if:
(i) the Bank reasonably determines that the Exchange will
not qualify as a tax-free reorganization under Section
368(a)(l)(B) of the Code; or
(ii) at any time prior to the Effective Time, the Bank's
Board of Directors determines that either of the
following has occurred:
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<PAGE>
(A) a breach by the Shareholders of any of their
representations or warranties contained herein or in
any of the Schedules hereto; or
(B) a breach by WCH or any of the Shareholders of any of
their respective covenants or agreements contained
herein; or
(iii) it shall reasonably determine that the Exchange
contemplated by this Agreement has become impracticable
by reason of commencement or threat of any claim,
litigation or proceeding against ONB, the Bank, WCH or
any Shareholder, or any director or officer of any of
such entities relating to this Agreement or the
Exchange; or
(iv) there has been a material adverse change in the
business, assets, capitalization, financial condition,
results of operations or prospects of WCH as of any
time prior to the Effective Time as compared to that in
existence as of June 30, 2000.
(c) By WCH, if:
(i) at any time prior to the Effective Time, WCH's Board of
Directors determines that either of the following has
occurred:
(A) a breach by the Bank of any of its representations or
warranties contained herein; or
(B) a breach by the Bank of any of its covenants or
agreements contained herein; or
(ii) all of the Shareholders reasonably determine that the
Exchange will not qualify as a tax-free reorganization
under Section 368(a)(l)(B) of the Code; or
(iii) WCH's Board of Directors shall reasonably determine
that the Exchange contemplated by this Agreement has
become impracticable by reason of commencement or
threat, by a third party, of any claim, litigation or
proceeding against the Bank, WCH or any Shareholder, or
any director or officer of any of such entities
relating to this Agreement or the Exchange; or
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<PAGE>
(iv) there has been a material adverse change in the
business, assets, capitalization, financial condition
or results of operations of the Bank or ONB as of any
time prior to the Effective Time as compared to that in
existence as of June 30, 2000.
8.02. Effect of Termination. Upon termination of this Agreement as
provided herein, this Agreement shall terminate and be of no further force or
effect, and there shall be no further obligations or restrictions on future
activities on the part of ONB, the Bank, WCH or the Shareholders or their
respective directors, officers, employees, agents and shareholders, except as
provided in (a) the confidentiality provisions of this Agreement set forth in
Section 5.08 hereof and in any confidentiality or non-disclosure agreement
between or among the parties hereto, and (b) the payment of each party's
respective expenses set forth in Section 11.10 hereof; provided, however, that
termination of this Agreement shall not in any way release a breaching party
from liability for any breach of this Agreement giving rise to such termination.
The termination of this Agreement also shall result in the termination of the
Real Estate Agreement.
In the event of the termination of this Agreement as provided herein,
(a) each party hereto shall redeliver all documents, work papers, materials and
written information of any other party relating to the transactions contemplated
hereby which are in its possession or control and which are confidential,
proprietary or otherwise not in public domain, whether obtained before or after
the execution of this Agreement, to the party furnishing the same, (b) all
confidential and proprietary information received by any party hereto with
respect to the business of any other party hereto or its subsidiaries or
affiliates shall not be used or disclosed in any manner, unless such information
becomes available in the public domain other than through a breach of this
Agreement, and (c) no party hereto shall have any liability under this Agreement
to any other party except as stated in this Section 8 and in any confidentiality
or non-disclosure agreement between or among the parties hereto.
SECTION 9
EFFECTIVE TIME OF THE EXCHANGE
Unless otherwise mutually agreed upon by the parties hereto, the
Exchange shall become effective (the "Effective Time") at 12:01 a.m.,
Indianapolis, Indiana time, on the later of (a) November 1, 2000, or (b) the
last business day of the month following (i) the fulfillment or waiver of all
conditions precedent to the Exchange set forth in Section 7 of this Agreement
and (ii) the expiration of all waiting periods in connection with the regulatory
applications filed for the approval of the Exchange.
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<PAGE>
SECTION 10
CLOSING
10.01. Closing Date and Place. So long as all conditions precedent set
forth in Section 7 hereof have been satisfied and fulfilled, the closing of the
Exchange ("Closing") shall take place on the date that the Effective Time
occurs, or on such other date mutually agreed upon by the parties hereto, at the
law offices of Krieg DeVault Alexander & Capehart, LLP, One Indiana Square,
Suite 2800, Indianapolis, Indiana 46204.
10.02. Deliveries. (a) At the Closing, the Bank shall deliver to WCH
and the Shareholders the following:
(i) the officers' certificate contemplated by Section 7.02(f)
hereof;
(ii) copies of all approvals by government regulatory agencies
necessary to consummate the Exchange;
(iii) copies of the resolutions of the Board of Directors and
sole Shareholder of the Bank certified by the Secretary of
the Bank, relative to the approval of this Agreement and the
Exchange;
(iv) an opinion of its counsel dated as of the Effective Time and
substantially in form set forth in Exhibit E attached
hereto;
(v) the employment agreements between WCH and each of the
Shareholders duly executed by WCH;
(vi) such other documents as WCH or its legal counsel may
reasonably request; and
(vii) stock certificates representing the shares of ONB Common
Stock to be delivered to the Shareholders in the Exchange.
(b) At the Closing, WCH and the Shareholders shall deliver to the Bank
the following:
(i) the officers'/shareholders certificate contemplated by
Section 7.01(f) hereof;
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<PAGE>
(ii) copies of the resolutions adopted by the Board of Directors
and the Shareholders of WCH certified by the Secretary of
WCH, relative to the approval of this Agreement and the
Exchange;
(iii) an opinion of its counsel dated as of the Effective Time
and substantially in form set forth in Exhibit G attached
hereto;
(iv) the consents from applicable insurance companies referenced
in Section 7.01(g) hereof;
(v) certificates of WCH Common Stock representing all of the
Shares duly endorsed in blank for transfer;
(vi) the employment agreements between WCH and each of the
Shareholders duly executed by such Shareholders; and
(vii) such other documents as the Bank or its legal counsel may
reasonably request.
10.03. Disclosure Schedule Updates. Notwithstanding anything herein to
the contrary, if the Exchange is consummated, the Bank shall be deemed to have
accepted all Disclosure Schedule Updates.
SECTION 11
MISCELLANEOUS
11.01. 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, except that following the Effective Time, the Bank may assign
this Agreement to any direct or indirect subsidiary of ONB or any of its
affiliates without the consent of WCH or any of the Shareholders, but no such
assignment shall release or affect the Bank's duties or liabilities hereunder.
The representations, warranties, covenants and agreements contained in this
Agreement are for the sole benefit of the parties hereto and their successors
and permitted assigns, and they shall not be construed as conferring any rights
on any other persons.
11.02. 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 Shareholders
shall not be decreased by such an amendment following the adoption and
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approval of the Exchange and this Agreement by the 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 condition to the right of the party so waiving to
consummate the Exchange. 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.
11.03. Survival of Representations, Warranties and Covenants. (a) The
representations and warranties of the Shareholders set forth in this Agreement
and in the Schedules hereto shall survive the Effective Time and the
consummation of the Exchange and shall remain in full force and effect until
March 31, 2002, after which date such representations and warranties shall
terminate and be of no further force or effect; provided, however, that the Bank
and its successors and permitted assigns shall have the right to make
indemnification claims against the Shareholders based upon any inaccuracy in or
breach of the Shareholders' representations and warranties until the close of
business on April 15, 2002. With respect to all covenants and agreements of WCH
and the Shareholders set forth in this Agreement, the Bank and its successors
and permitted assigns shall have the right to make indemnification claims
against the Shareholders based upon any breach prior to the Effective Time of
such covenants and agreements until the close of business on April 15, 2002.
(b) The representations and warranties of the Bank set forth in this
Agreement shall survive the Effective Time and the consummation of the Exchange
and shall remain in full force and effect until March 31, 2002, after which date
such representations and warranties shall terminate and be of no further force
or effect; provided, however, that the Shareholders shall have the right to make
indemnification claims against the Bank based upon any inaccuracy in or breach
of the Bank's representations and warranties until the close of business on
April 15, 2002. All covenants and agreements of the Bank set forth in this
Agreement shall survive the Effective Time and the consummation of the Exchange
and shall remain in full force and effect until March 31, 2002; provided,
however, that the Shareholders shall have the right to make indemnification
claims against the Bank based upon any breach of the Bank's covenants and
agreements until the close of business on April 15, 2002.
11.04. 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
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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 the Bank: with a copy to (which shall not
--------------- constitute notice):
-------------------
Orange County Bank Krieg DeVault Alexander &
c/o Old National Bancorp Capehart, LLP
420 Main Street One Indiana Square, Suite 2800
Evansville, Indiana 47708 Indianapolis, Indiana 46204-2017
ATTN: Jeffrey K. Knight, Corporate ATTN: Nicholas J. Chulos, Esq.
Secretary and General Counsel Telephone: (317) 238-6224
Telephone: (812) 464-1363 Facsimile: (317) 636-1507
Facsimile: (812) 464-1567
If to WCH or to a Shareholder: with a copy to (which shall not
----------------------------- constitute notice):
-------------------
Wolford Cannon Hoecker Insurance Meyer Capel
Agency, Inc. 306 West Church Street
923 North Vermilion Champaign, Illinois 61820
P.O. Box 10 ATTN: Evan D. Coobs, Esq.
Danville, Illinois 61834-0010 Telephone: (217) 352-1800
ATTN: Fred C. Danner, Jr., Vice President Facsimile: (217) 352-1083
Telephone: (217) 442-0640
Facsimile: (217) 442-0067
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<PAGE>
If to the Shareholders: with a copy to (which shall not
----------------------- constitute notice):
-------------------
Fred C. Danner, Jr. Meyer Capel
1239 Rue Orleans 306 West Church Street
Danville, Illinois 61832 Champaign, Illinois 61820
ATTN: Evan D. Coobs, Esq.
Robert K. Hoecker Telephone: (217) 352-1800
15 Country Club Drive Facsimile: (217) 352-1083
Danville, Illinois 61832
Wolford John Shane
9 Maywood Drive
Danville, Illinois 61832
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
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.
11.05. 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.
11.06. 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.
11.07. 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.
11.08. 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. The parties hereto hereby
agree that all claims, actions, suits and proceedings between the parties hereto
relating to this Agreement shall be filed, tried and litigated only in the
Circuit or Superior Courts of Marion County, Indiana or the United States
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District Court for the Southern District of Indiana - Indianapolis Division. In
connection with the foregoing, the parties hereto consent to the jurisdiction
and venue of such courts and expressly waive any claims or defenses of lack of
personal jurisdiction of or proper venue by such courts.
11.09. Entire Agreement. This Agreement and, when executed and
delivered, the employment agreements attached as Exhibit A, B and C hereto,
supersede all other prior understandings, commitments, representations,
negotiations or agreements, whether oral or written, among the parties hereto
relating to the transactions contemplated hereby and constitute the entire
agreement between the parties hereto with respect to the subject matter hereof,
except for any prior confidentiality or non-disclosure agreement between or
among the parties hereto, which shall continue in full force and effect
following the date hereof. No representation, warranty, promise, inducement or
statement of intention has been made by any party hereto or ONB which is not
embodied in this Agreement or in the employment agreements or schedules hereto,
and no party hereto nor ONB shall be liable for or bound by any information not
so set forth. The letter of intent signed by ONB on August 8, 2000 and by WCH on
August 18, 2000 relating to the transactions contemplated hereby is terminated
and rendered of no further force or effect as of the date hereof.
11.10. Expenses. The Bank shall pay its expenses incidental to the
Exchange contemplated hereby. WCH and the Shareholders shall pay their
respective expenses incidental to the Exchange contemplated hereby.
11.11. 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 days.
11.12. Construction. 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.
11.13. Schedules. All information set forth in the Schedules attached
hereto is hereby deemed to be representations and warranties of the
Shareholders.
11.14. Indemnification Claims Procedures. Promptly after receipt by any
party hereto entitled to indemnification pursuant to this Agreement (the
"Indemnified Person") of notice of any Loss (as hereinafter defined) with
respect to which an Indemnified Person is entitled to indemnification under
Section 5.20 or Section 6.06 of this Agreement (the "Indemnification Claim"),
the Indemnified Person shall, if an Indemnification Claim in respect thereto is
to be
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made against a party required to give indemnification hereunder (the
"Indemnifying Person"), promptly give written notice to the Indemnifying Person
of such Indemnification Claim, provided that the failure of any Indemnification
Person to give such notice shall not relieve the Indemnifying Person of its
obligations hereunder so long as such delay does not jeopardize the rights or
obligations of the Indemnifying Person. In the event that any claim, action,
suit, proceeding or demand is made, brought or filed by a person not a party to
this Agreement (or any successor or permitted assign) against an Indemnified
Person, the Indemnifying Person shall be entitled to participate and to assume
the defense thereof, to the extent that it may wish, with legal counsel
reasonably satisfactory to the Indemnified Person, and after notice from the
Indemnifying Person to the Indemnified Person of its election to assume the
defense thereof, the Indemnifying Person shall not be liable to the Indemnified
Person solely for any Losses constituting attorneys' fees and expenses
subsequently incurred by the Indemnified Person with respect to the defense
thereof; provided, that if the Indemnified Person and the Indemnifying Person
reasonably determine, based upon advice of their respective independent counsel,
that a conflict of interest may exist between the Indemnified Person and the
Indemnifying Person with respect to such claim, action, suit, proceeding or
demand and that it is thus advisable for the Indemnified Person to be
represented by separate counsel, the Indemnified Person may retain other
counsel, reasonably satisfactory to the Indemnifying Person to represent the
Indemnified Person, and the Indemnifying Person shall pay all reasonable
attorneys' fees and expenses of such counsel. No Indemnifying Person in the
defense of any such claim, action, suit, proceeding or demand shall, except with
the prior written consent of the Indemnified Person, consent to the entry of any
judgment or order or enter into any settlement which does not include as an
unconditional term thereof the unconditional release of the Indemnified Person
from all liability and obligation with respect to such claim, action, suit,
proceeding or demand.
The amount which an Indemnifying Person is required to pay to, for or
on behalf of an Indemnified Person shall be reduced by any insurance proceeds
actually received by or on behalf of the Indemnified Person with respect to each
Loss that is subject to an Indemnification Claim. If an Indemnified Person shall
receive an indemnification payment under this Agreement from the Indemnifying
Person with respect to a particular Loss and then the Indemnified Person
subsequently receives insurance proceeds with respect to the same Loss, then the
Indemnified Person shall pay to the Indemnifying Person the amount of such
insurance proceeds or, if lesser, the amount of such indemnification payment.
For purposes of this Agreement, the term "Loss" or "Losses" shall mean
any and all actual losses, damages, awards, settlement amounts, judgments,
orders, liabilities, obligations, fines, penalties, taxes, assessments,
interest, costs and expenses of every kind (including, without limitation,
reasonable attorneys, accountants, consultants and expert witness fees, expenses
and disbursements).
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11.15. Records and Cooperation. Following the Effective Time, the
Shareholders and their accountants, attorneys and agents shall have reasonable
access during normal business hours to the books and records of WCH related to
all periods up to and including the Effective Time, and the Bank shall notify or
cause WCH to notify the Shareholders at least thirty (30) days prior to the
transfer or destruction of any portion thereof for six (6) years following the
Effective Time and shall allow the Shareholders to make copies or to take
possession of any such books and records designated for destruction. The parties
hereto shall use their best efforts to retain, for a period of six (6) years
following the Effective Time, and, upon the request of any other party, provide
any records or information which may be relevant to any Tax Return (as
hereinafter defined), Tax Contest (as hereinafter defined) or similar claim or
proceeding; provided, however, that the Shareholders have the right to destroy
such records prior to the expiration of such period upon at least one hundred
eighty (180) days' prior written notice to the Bank, during which time the Bank
shall have the right to make copies or take possession of, or provide for
storage of, such records. The parties hereto shall cooperate with each other and
shall make themselves reasonably available at appropriate times and places with
respect to any Loss that such party has an indemnification obligation pursuant
to this Agreement, and such cooperating party shall be entitled to reasonable
out-of-pocket travel expenses incurred in connection therewith.
SECTION 12
TAX MATTERS
12.01. Cooperation on Tax Matters. The Bank and each of the
Shareholders shall cooperate fully, as and to the extent reasonably requested by
the other party, in connection with the filing of any return, declaration,
report, claim or information return or statement relating to any tax, including,
without limitation, any schedule or attachment thereto and any amendment thereof
("Tax Return"), pursuant to this Section and any audit, examination, litigation
or other proceeding with respect to taxes ("Tax Contest").
12.02. Preparation of Returns. WCH shall prepare or cause to be
prepared (at the sole cost and expense of the Shareholders) and shall file or
cause to be filed, in a timely manner (taking into account all extensions of due
dates) all Tax Returns to be filed by or on behalf of WCH with appropriate
taxing authorities for periods ending on or before the Effective Time. The Bank
shall prepare or cause to be prepared (at the sole cost and expense of the Bank)
and shall file or cause to be filed, all Tax Returns with respect to taxes of,
or which include, WCH for all taxable periods beginning or ending after the
Effective Time.
12.03. Tax Contests.
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(a) The Bank shall promptly notify the Shareholders of any audit or
examination of WCH relating to taxes payable in respect of a taxable period that
ends on or before the Effective Time (a "Pre-Sale Period"). Thereafter, if there
is commenced a Tax Contest, the Shareholders shall keep the Bank advised of any
material developments in any such Tax Contest, if and to the extent such Tax
Contest is reasonably expected to have a material adverse effect on WCH. The
Shareholders shall, in good faith, consult with the Bank concerning the
appropriate actions or positions to be taken throughout the course of any such
Tax Contest. The Shareholders shall have full control over any such Tax Contest
relating solely to a Pre-Sale Period and ultimate discretion with respect to any
decision to be made or the nature of any action to be taken in the course
thereof.
(b) In the event of any administrative or judicial proceeding relating
to taxes payable by WCH in which the Service or any taxing authority is a party,
(i) if such Tax Contest relates solely to liability for Losses for a Pre-Sale
Period, the Shareholders shall have full and complete control of any such Tax
Contest and shall pay all Losses relating to such Tax Contest, (ii) if such Tax
Contest relates solely to liability for Losses for a Post-Sale Period (as
hereinafter defined), the Bank shall have full and complete control of such Tax
Contest and shall pay all Losses relating to such Tax Contest, and (iii) if such
Tax Contest relates to liability for Losses both preceding the Effective Time
and following the Effective Time, then the Shareholders and the Bank jointly
shall control the Tax Contest and agree to cooperate in good faith in the
pursuance of such Tax Contest.
(c) The Bank shall promptly notify the Shareholders of any issues which
arise out of an audit or examination relating to taxes payable in respect of a
taxable year or taxable period of WCH beginning on or after the Effective Time
(a "Post-Sale Period") which could affect the way an item is treated in any
Pre-Sale Period, and the Bank shall keep the Shareholders advised of material
developments relating thereto. The Bank shall consult with the Shareholders
concerning the appropriate actions or positions to be taken throughout the
course of such proceeding, but the Bank shall have full control and discretion
with respect to such proceeding.
* * *
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IN WITNESS WHEREOF, the Bank, WCH and the Shareholders 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.
ORANGE COUNTY BANK
By:
---------------------------------
John W. Key, II, President
ATTEST:
By:
Its:
WOLFORD CANNON HOECKER
INSURANCE AGENCY, INC.
By:
---------------------------------
Wolford John Shane, President
ATTEST:
By:
_____________________, Secretary
SHAREHOLDERS
---------------------------------
Fred C. Danner, Jr.
---------------------------------
Robert K. Hoecker
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---------------------------------
Wolford John Shane
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SCHEDULE OF EXHIBITS
--------------------
Exhibit A - Wolford John Shane Employment Agreement (Recitals)
---------
Exhibit B - Robert K. Hoecker Employment Agreement (Recitals)
---------
Exhibit C - Fred C. Danner, Jr. Employment Agreement (Recitals)
---------
Exhibit D - Real Estate Purchase Agreement (Section 5.21)
---------
Exhibit E - Legal Opinion of Krieg DeVault Alexander & Capehart, LLP
--------- (Attached)
Exhibit F - Legal Opinion of Meyer Capel (Attached)
---------
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