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FORM 8-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): MARCH 6, 1998
NATIONAL CITY BANCSHARES, INC.
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(Exact name of registrant as specified in its charter)
INDIANA 0-13585 35-1632155
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification No.)
incorporation)
227 MAIN STREET
P. O. BOX 868
EVANSVILLE, INDIANA 47705-0868
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(Address of principal
executive offices)
Registrant's telephone number, including area code: (812) 464-9677
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NOT APPLICABLE
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(Former name or former address, if changed since last report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS
On March 6, 1998, National City Bancshares, Inc. (the "Company") completed
the previously announced acquisition of Vernois Bancshares, Inc., an Illinois
corporation ("VBI"). VBI is the holding company for Bank of Illinois in Mt.
Vernon ("BOI"), an Illinois banking corporation with three offices in Mount
Vernon, Illinois. The Company paid $27.5 million in cash for all of the
outstanding stock of VBI. As of December 31, 1997, BOI had total assets of
$163.5 million, total loans of $110.3 million and total deposits of $127.6
million. The acquisition was accounted for using the purchase method of
accounting and the results of operations of BOI will be included in the
Company's consolidated results of operations from the date of acquisition. The
acquisition was completed in accordance with the terms and conditions of Stock
Purchase Agreements between the Company and the ten stockholders of VBI, the
form of which is included as an exhibit to this report.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
Financial Statements
None
Exhibits
Exhibit No. Description
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2 Form of Stock Purchase Agreement dated March 6, 1998.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Dated: March 11, 1998
NATIONAL CITY BANCSHARES, INC.
By: /s/ Stephen C. Byelick, Jr.
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Stephen C. Byelick, Jr., Secretary
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EXHIBIT 2
STOCK PURCHASE AGREEMENT
THIS AGREEMENT is made this 6th day of March, 1998 between National City
Bancshares, Inc., an Indiana corporation ("NCBE") and the undersigned
stockholder ("Stockholder") of Vernois Bancshares, Inc., an Illinois corporation
("VBI").
1. OWNERSHIP OF VBI STOCK. The Stockholder represents and warrants that
the Stockholder is the sole owner, beneficially and of record, of ________
common shares, [voting, non-voting] of VBI (the "Shares") and has good title to
the Shares, free of all liens, claims, charges, encumbrances and assessments.
2. SALE AND PURCHASE. Upon execution of this Agreement by the parties,
the execution of a stock power in form attached hereto as Exhibit 1, duly
endorsed by the Stockholder and the delivery of the certificate(s) evidencing
the Shares, NCBE has purchased and Stockholder has sold the Shares and NCBE has
simultaneously herewith delivered to the Stockholder by wire transfer pursuant
to instructions furnished to NCBE by the Stockholder, the amount of $2,212.39
per share or $________________.
3. REPRESENTATIONS OF NCBE. NCBE represents and warrants that all
regulatory approvals required for the acquisition of the Shares have been
received.
4. WAIVER OF NOTICE. The Stockholder hereby waives any requirement to
receive notice of other purchases of VBI stock or otherwise comply with the
terms and conditions of the Restrictive Stock Agreement dated March 31, 1987,
among VBI and its stockholders.
5. CLOSING. The closing of the transaction contemplated in this
Agreement is taking place at the office of Bank of Illinois in Mount Vernon,
1101 Broadway, Mount Vernon, Illinois 62864.
6. FURTHER AGREEMENT BY STOCKHOLDER. The Stockholder is one of the
"Stockholders" who is a party to the Agreement and Plan of Merger dated
December 1, 1997 among NCBE, VBI and the Stockholders in the form attached
hereto as Exhibit 2 (the "Merger Agreement"). The Stockholder agrees that the
representations and warranties made in Section 6 of the Merger Agreement and the
Stockholders' agreements to indemnify NCBE in Section 9 of the Merger Agreement
shall be incorporated into and become a part of this Agreement and be effective
as to the Stockholder as though the merger contemplated by the Merger Agreement
was closed as of the date hereof.
7. FURTHER ASSURANCES. Upon request by NCBE and without any further
consideration, the Stockholder will execute and transfer such documents and take
such action as NCBE may reasonably request in order to more effectively
consummate the transaction herein contemplated.
8. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Indiana, without regard to its
conflict-of-laws rules.
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IN WITNESS WHEREOF, this Agreement has been duly executed by the
Stockholder and by the duly authorized officers of NCBE, as of the date first
above written.
NATIONAL CITY BANCSHARES, INC.
By:
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Robert A. Keil, President
ATTEST:
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Stephen C. Byelick, Jr., Secretary
STOCKHOLDER:
Signature:
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Printed:
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EXHIBIT 1
STOCK POWER
FOR VALUE RECEIVED,____________________________________ hereby sells, assigns
and transfers unto National City Bancshares, Inc., ______________ (______)
Common Shares of (voting/non-voting) Vernois Bancshares standing in its name on
the books of said Corporation represented by Certificate No(s). _________
herewith, and do hereby irrevocably constitute and appoint National City
Bancshares, Inc. attorney to transfer the said stock on the books of said
Corporation with full power of substitution in the premises.
Dated: March 6, 1998
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EXHIBIT 2
AGREEMENT AND PLAN OF MERGER
THIS AGREEMENT AND PLAN OF MERGER (the "Agreement") is entered into as of
the 1st day of December, 1997, by and among National City Bancshares, Inc., an
Indiana corporation ("NCBE"), Vernois Bancshares, Inc., an Illinois corporation
("VBI"), and the undersigned stockholders of VBI (each, a "Stockholder" and
collectively, the "Stockholders").
W I T N E S S E T H:
WHEREAS, VBI owns all of the outstanding capital stock of Bank of Illinois
in Mount Vernon, an Illinois state banking corporation (the "Bank"); and
WHEREAS, the parties desire that VBI merge with and into NCBE (the
"Merger") upon the terms and conditions contained herein; and
WHEREAS, the Stockholders own in excess of 90% of the outstanding capital
stock of VBI and will benefit from the Merger and are willing to make certain
representations and warranties; and
WHEREAS, the Board of Directors of VBI deems the Merger advisable and in
the best interests of VBI and its stockholders and has adopted a resolution
approving this Agreement and directing that this Agreement be submitted for
consideration at a meeting of VBI's stockholders; and
WHEREAS, the Board of Directors of NCBE has adopted a resolution approving
this Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual agreements
contained herein and for the purpose of prescribing the terms and conditions of
the Merger, the manner of converting the capital stock of VBI into shares of
capital stock of NCBE, and such other provisions as are deemed desirable in
connection with the Merger, the parties, intending to be bound, hereby agree as
follows:
1. THE MERGER.
(a) MERGER. Upon the terms and subject to the conditions set forth in
this Agreement, and in accordance with the Indiana Business Corporation Law (the
"IBCL") and the Business Corporation Act of Illinois (the "BCA" and, together
with the IBCL, the "Statutes"), at the Effective Time (as hereafter defined),
VBI will be merged with and into NCBE. VBI shall be the merging corporation
under the Merger and its separate corporate existence shall cease and NCBE shall
be the surviving corporation under the Merger (the "Surviving Corporation") and
shall succeed to and assume all rights and obligations of VBI in accordance with
the Statutes.
(b) REGULATORY APPROVALS. The parties acknowledge that certain approvals
must be received from or notices must be given to federal and state banking
regulatory agencies including, but not limited to, (i) the Board of Governors of
the Federal Reserve System; (ii) the Illinois Commissioner of Banks and Trust
Companies; and (iii) any other governmental authorities having jurisdiction over
the parties or the Merger (the governmental agencies referred to in items
(i)-(iii) above are collectively referred to herein as the "Applicable
Governmental Authorities").
(c) CLOSING; EFFECTIVE TIME. The delivery of the certificates and
opinions called for by this Agreement shall take place at the offices of NCBE,
227 Main Street, Evansville, Indiana, at a closing (the "Closing") to be held
immediately upon completion of the determinations contemplated by Section 3(d)
have been completed and satisfaction or waiver (to the extent legally
permissible) of the conditions set forth in Sections 10, 11 and 12 of this
Agreement. The parties shall execute and file at or prior to the Closing
articles of merger in forms which comply with the Statutes (the "Articles of
Merger") relating to the Merger with the Indiana Secretary of State and the
Illinois Secretary of State. The time at which the Merger becomes effective
shall be specified in the Articles of Merger and is hereafter referred to as the
"Effective Time".
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2. EFFECTS OF THE MERGER.
(a) EFFECTS OF THE MERGER. The Merger shall have the effects set forth in
the Statutes.
(b) ARTICLES OF INCORPORATION AND BY-LAWS. The Articles of Incorporation
and the By-Laws of NCBE as in effect at the Effective Time shall be the Articles
of Incorporation and By-Laws of the Surviving Corporation until thereafter
changed or amended as provided therein or by applicable law.
(c) DIRECTORS. The directors of NCBE at the Effective Time shall be the
directors of the Surviving Corporation until the earlier of their resignation or
removal or until their respective successors are duly elected and qualified, as
the case may be.
(d) OFFICERS. The officers of NCBE at the Effective Time shall be the
officers of the Surviving Corporation until the earlier of their resignation or
removal or until their respective successors are duly elected and qualified, as
the case may be.
3. EFFECT OF MERGER ON THE CAPITAL STOCK OF VBI. By virtue of the
Merger and without any action on the part of the holder of any shares of Class A
Voting Common Stock, $1.00 par value ("Class A Common") or Class B Nonvoting
Common Stock, $1.00 par value ("Class B Common" and, together with Class A
Common,"VBI Common"), or any shares of capital stock of NCBE, the Merger shall
have the following effects:
(a) CONVERSION OF VBI COMMON. As of the Effective Time, each issued and
outstanding share of VBI Common other than Dissenting Shares (as hereafter
defined) shall be converted into the right to receive from NCBE cash in an
amount equal to: (i) $27,500,000 (the "Purchase Price"), adjusted as provided in
subsection (d); (ii) divided by the number of shares of VBI Common issued and
outstanding immediately prior to the Effective Time. The foregoing cash is
referred to as the "Merger Consideration".
(b) CANCELLATION OF TREASURY STOCK. As of the Effective Time, each share
of VBI Common that is owned by VBI shall automatically be canceled and retired
and shall cease to exist, and no consideration shall be delivered in exchange
therefor.
(c) DISSENTING SHARES. "Dissenting Shares" shall mean shares of VBI
Common held by any person who properly exercises and perfects rights under the
BCA as a dissenting stockholder. The holder of any Dissenting Shares shall only
have the rights accorded a dissenting stockholder under the BCA and shall not be
entitled to receive the Merger Consideration.
(d) ADJUSTMENTS TO PURCHASE PRICE. The Purchase Price shall be increased
by (i) the amount, if any, by which the total stockholder's equity of the Bank,
as of the Valuation Date, exceeds $11,500,000 plus (ii) the amount of the assets
of VBI as of the Valuation Date other than its investment in the Bank and
goodwill. The Purchase Price shall be reduced by (i) the amount, if any, by
which the total stockholder's equity of the Bank is less than $11,500,000 as of
the Valuation Date plus (ii) the liabilities of VBI as of the Valuation Date.
The Valuation Date shall be the last day of the month during which all required
approvals from the Applicable Governmental Authorities have been received. The
adjustments contemplated in this subsection shall be determined in accordance
with the following procedures: (i) the independent accountants of NCBE shall
determine the value of the tangible assets and liabilities of VBI and the total
stockholders equity of the Bank in accordance with generally accepted accounting
principles ("GAAP") and any adjustments to the Purchase Price and shall issue a
written report thereon within five (5) business days after the Valuation Date;
(ii) as of the Valuation Date, all liabilities and expenses incurred or to be
incurred by or on behalf of VBI and the Bank for legal, accounting, investment
banking, brokerage or other consultant services relating to the Transaction
shall be deducted from the total shareholder's equity of the Bank, and all other
liabilities and expenses of VBI and the Bank shall be recorded and all accruals
shall be made as of the Valuation Date; (iii) unless VBI takes exception to any
of the determinations in such report, the Closing shall immediately take place;
however, if VBI shall notify NCBE in writing within five (5) business days of
receipt of the report that it disagrees with the report and shall describe in
reasonable detail the nature and amounts in dispute and the adjustments which
VBI believes are correct; (iv) within five (5) business days after receipt of
VBI's notice, NCBE shall advise VBI whether it agrees with VBI's proposed
corrections, and, if so, the Closing shall immediately take place or, if not,
NCBE shall promptly meet with VBI in an attempt to resolve their
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differences; and (v) if within two (2) business days after the meeting
contemplated in the preceding clause, NCBE and VBI have not reached agreement,
the parties shall submit the disputed items and all supporting documentation to
a firm of independent certified public accountants of recognized standing to be
agreed upon by NCBE and VBI and a determination of the disputed items shall be
made by such firm and delivered to each of NCBE and VBI. Such determination
shall be final and binding on the parties and the Closing shall immediately take
place after such determination.
4. PAYMENT OF MERGER CONSIDERATION. Immediately after the Effective
Time, The National City Bank of Evansville, as exchange agent (the "Exchange
Agent"), shall deliver to each holder of VBI Common (except holders of
Dissenting Shares) a letter of transmittal that shall specify how the stock
certificate(s) evidencing shares of VBI Common shall be surrendered to the
Exchange Agent. NCBE agrees to make available to the Exchange Agent immediately
at the Closing an amount of cash sufficient to cause payment of the Merger
Consideration to be made for any shares of VBI Common surrendered for payment in
accordance with this Section 4. No interest shall accrue or be paid with
respect to the Merger Consideration. There shall be no obligation to deliver
the Merger Consideration in respect of any shares of VBI Common until (and then
only to the extent that) the holder thereof executes the letter of transmittal
and validly surrenders the certificate(s) representing the shares of VBI Common
as provided in this Section 4, or, in lieu thereof, delivers to the Exchange
Agent an appropriate affidavit of loss and an indemnity agreement as required by
NCBE in its reasonable discretion (which discretion NCBE may delegate to the
Exchange Agent). If any payment for any shares of VBI Common is to be made in a
name other than that in which the surrendered certificate(s) is registered, it
shall be a condition to the payment that the certificate(s) so surrendered shall
be properly endorsed or otherwise in proper form for transfer, that all
signatures shall be guaranteed by a member of the Medallion Signature Guarantee
Program that is either a member firm of any national securities exchange in the
United States or the National Association of Securities Dealers, Inc., or by a
commercial bank or trust company having an office in the United States, and that
the person requesting the payment shall either (i) pay to the Exchange Agent any
transfer or other taxes required by reason of the payment to a person other than
the registered holder of the certificate(s) surrendered or (ii) establish to the
satisfaction of the Exchange Agent that such taxes have been paid or are not
payable.
5. REPRESENTATIONS AND WARRANTIES OF NCBE. NCBE represents and warrants
to VBI that:
(a) ORGANIZATION, AUTHORIZATION, NO VIOLATIONS. NCBE is a corporation
duly organized and validly existing under the laws of the State of Indiana.
NCBE has all necessary corporate power to own its properties and assets and to
carry on its business as now conducted. Subject to receipt of approvals from
the Applicable Governmental Authorities and except as limited by (i) bankruptcy,
insolvency, moratorium, reorganization, fraudulent conveyance laws and other
similar laws affecting creditors' rights generally, and (ii) general principles
of equity, regardless of whether asserted in a proceeding in equity or law, the
execution and delivery of this Agreement and the consummation of the
transactions contemplated hereby by NCBE have been duly authorized by all
necessary corporate action on the part of NCBE and this Agreement constitutes
the legal, valid and binding obligation of NCBE, enforceable against NCBE in
accordance with its terms. The execution and delivery of this Agreement by NCBE
and the consummation of the transactions contemplated by this Agreement, will
not violate the provisions of, or constitute a breach or default under, the
articles of incorporation or by-laws of NCBE or any material agreement to which
NCBE is a party or is bound, or any other material license, law, order, rule,
regulation or judgment to which NCBE is a party. NCBE is duly registered with
the Federal Reserve Board as a bank holding company under the Bank Holding
Company Act of 1956, as amended.
(b) RESOURCES. NCBE has on hand or has timely access to capital funds
sufficient to enable NCBE to (i) satisfy the capital adequacy guidelines and
requirements of Applicable Governmental Authorities as those guidelines and
requirements apply and are actually applied to NCBE and the Merger, and (ii) pay
the Purchase Price.
(c) TRUE AND COMPLETE INFORMATION. No representation or warranty made by
NCBE contained in this Agreement and no statement contained in any certificate,
list, exhibit or other instrument specified in this Agreement, whether
heretofore furnished to VBI or hereinafter required to be furnished to VBI,
contains or will contain any untrue statement of a material fact or omits or
will omit to state a material fact necessary to make the statements contained
therein nor misleading.
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6. REPRESENTATIONS AND WARRANTIES OF VBI AND THE STOCKHOLDERS. VBI and
each of the Stockholders, jointly and severally, represents and warrants to NCBE
that, except as disclosed in the writing delivered to NCBE concurrently with the
execution of this Agreement (the "Disclosure Schedule"):
(i) ORGANIZATION AND GOOD STANDING OF VBI. VBI is duly organized,
validly existing and in good standing under the laws of the State of
Illinois and has all necessary corporate power to own its properties and
assets and to carry on its business as now conducted. VBI is duly
qualified to conduct its business and is in good standing in each
jurisdiction in which the nature of the business transacted by VBI requires
such qualification.
(ii) CAPITAL STOCK. On the date hereof, VBI has 20,000 shares of
Class A Common and 618 shares of Class B Common authorized, of which 11,812
shares of Class A Common and 618 shares of Class B Common are issued and
outstanding. All of the issued and outstanding shares of VBI Common are
duly and validly authorized and issued, fully paid and nonassessable. None
of the issued and outstanding shares of VBI Common have been issued in
violation of any preemptive rights. There are no shares of any class of
capital stock or equity securities of VBI outstanding other than the VBI
Common and there are no outstanding, options, warrants, rights to subscribe
for, calls, or commitments of any character whatsoever relating to, or
securities convertible into or exchangeable for, such shares or contracts,
commitments, understandings or arrangements by which VBI is or may be
obligated to issue additional shares of any class of capital stock or other
equity securities of VBI.
(iii) ORGANIZATION AND GOOD STANDING OF THE BANK. The Bank is an
Illinois state banking corporation duly organized, validly existing and in
good standing under the laws of Illinois. The deposits of the Bank are
insured by the Bank Insurance Fund administered by the FDIC up to
applicable limits.
(iv) CAPITAL STOCK OF THE BANK. On the date hereof, the Bank has
45,500 shares of Common Stock, $12.00 par value per share (the "Bank
Stock") of which 45,500 shares are issued and outstanding and no shares are
held in the treasury. VBI is the record and beneficial owner of the Bank
Stock. All of the issued and outstanding shares of the Bank Stock are duly
and validly authorized and issued, fully paid and non-assessable. None of
the shares of the Bank Stock has been issued in violation of any preemptive
rights. There are no shares of any class of capital stock or equity
securities of the Bank outstanding other than the Bank Stock and there are
no outstanding options, warrants, rights to subscribe for, calls, or
commitments of any character whatsoever relating to, or securities
convertible into or exchangeable for, such shares or contracts,
commitments, understandings or arrangements by which the Bank is or may be
obligated to issue additional shares of any class of capital stock or other
equity securities of the Bank.
(b) AUTHORIZATION, NO VIOLATION, ET CETERA. Subject to approval of this
Agreement by the stockholders of VBI, the execution and delivery of this
Agreement by VBI and the consummation of the transactions contemplated by this
Agreement have been duly and validly authorized by all necessary corporate
action on the part of VBI and this Agreement constitutes the legal, valid and
binding obligations of VBI and the Stockholders, enforceable against them in
accordance with its terms, except as limited by (x) bankruptcy, insolvency,
moratorium, reorganization, fraudulent conveyance laws and other similar laws
affecting creditors' rights generally, and (y) general principles of equity,
regardless of whether asserted in a proceeding in equity or at law. The
execution of this Agreement by VBI and the consummation of the transactions
contemplated by this Agreement will not violate the provisions of, or constitute
a breach or default under (i) the articles of incorporation or by-laws of VBI or
the articles of incorporation and by-laws of the Bank, (ii) any Material
Contract (as defined in Section 6(f)) of VBI or the Bank or (iii) any other
material license, law, order, rule, regulation or judgment to which VBI or the
Bank is a party, is bound or by which any of their respective properties or
assets is subject.
(c) SUBSIDIARIES. VBI has no subsidiaries other than the Bank. VBI does
not own any direct or indirect equity or other ownership interests in any
corporation, partnership, limited liability company, or joint venture other than
the Bank.
(d) FINANCIAL STATEMENTS. VBI has delivered to NCBE the balance sheets of
VBI as of December 31, 1996 and 1995 and the related statements of income,
changes in stockholders' equity and cash flows for the years then ended. Such
financial statements have been compiled by Wood Mitchell & Associates, certified
public accountants. Such
<PAGE>
financial statements have been prepared in conformity with GAAP, except that
they do not include the Bank on a consolidated basis. VBI has also provided to
NCBE the call report filed by the Bank with the FDIC for the period ended
September 30, 1997. At the dates of the balance sheets included in such
financial statements, there were no material liabilities of VBI or the Bank
(actual, contingent or accrued) which, in accordance with GAAP applied on a
consistent basis, should have been shown or reflected in such statements of
condition or the notes thereto, but which are not so shown or reflected (except
that the balance sheets of VBI do not include the Bank on a consolidated basis).
(e) TAXES AND TAX RETURNS. (i) All returns relating to federal, state,
local and foreign income, franchise, excise, payroll, sales, use and property
taxes (collectively, "Taxes") that are required to be filed with respect to VBI
and the Bank have been filed in a timely manner (taking into account all
extensions of due dates); (ii) true and accurate copies of all such returns
filed for tax periods ending during 1994 through 1997 (the "Returns") have been
provided to NCBE; (iii) such Returns reflect accurately all liability for Taxes
of VBI and the Bank for periods covered thereby; (iv) all Taxes payable by or
due from VBI or the Bank relating to all periods ending on or before
December 31, 1996 have been paid or accrued on the financial statements
identified in Section 6(d); (v) VBI has made a valid and timely election under
Subchapter S of the Internal Revenue Code of 1986, as amended (the "Code"), to
be treated as an "S Corporation" and to have the Bank treated as a "qualified
Subchapter S subsidiary", which election was accomplished in compliance with
all applicable federal and state laws and regulations, has been effective since
January 1, 1997, remains in effect as of the date hereof and will remain in
effect through the Closing; (vi) no election under any Section of the Code,
including specifically any election under Section 341(f) or Section 338(g) of
the Code other than elections reflected on the Returns and the election
described in (v) has been filed by or on behalf of VBI and the Bank;
(vii) neither VBI nor the Bank has executed any presently effective waiver or
extension of any statute of limitations against assessment and collection of
Taxes with respect to the Bank; and (viii) the proper amounts have been
withheld by VBI and the Bank from employees with respect to all compensation
paid to employees for all periods in compliance in all material respects with
the tax and other withholding provisions of all applicable laws. No
deficiencies for any Taxes have been asserted in writing or assessed against VBI
or the Bank which remain unpaid.
(f) MATERIAL CONTRACTS. All executory contracts, indentures, commitments,
and other agreements in excess of $25,000 to which VBI or the Bank is a party or
to which VBI or the Bank or any of their properties are subject (collectively,
the "Material Contracts" and each a "Material Contract") were entered into in
the ordinary course of business. VBI and the Bank have duly performed all their
obligations thereunder to the extent that such obligations to perform have
accrued, and no breach or default on the part of VBI or the Bank or, to the
knowledge of VBI, any other party thereto has occurred which will impair the
ability of VBI or the Bank to enforce any material rights thereunder.
(g) REAL ESTATE. The Bank has good title to all of the assets reflected
as owned by it in the September 30, 1997 call report, and in the case of real
property, transferable and insurable title in fee simple, and in all cases free
and clear of any material liens or other encumbrances. The real properties,
structures, buildings, equipment, and the tangible personal property owned,
operated or leased by the Bank are (i) to the knowledge of VBI, in good repair,
order and condition, except for depletion, depreciation and ordinary wear and
tear, and (ii) free from any known structural defects.
(h) NO MATERIAL ADVERSE CHANGE. Since September 30, 1997, there has been
no material adverse change in the business, financial condition, properties,
results of operations, or capitalization of VBI or the Bank.
(i) LITIGATION. There is no litigation, claim, investigation or other
proceeding pending or, to the knowledge of VBI, threatened, against or adversely
affecting VBI or the Bank, or of which the property of VBI or the Bank is or
would be subject and which would have a material adverse effect on the financial
condition, results of operations or business of VBI or the Bank. To the
knowledge of VBI, there is no litigation, claim, investigation or other
proceeding to which any director, officer, employee or agent of VBI or the Bank
in their respective capacities as directors, officers, employees or agents, is a
party, pending or threatened against any such director, officer, employee or
agent. There is no outstanding order, writ, injunction or decree of any court,
government or governmental agency against or, affecting VBI or the Bank, or the
assets or business of VBI or the Bank, which could reasonably be expected to
have a material adverse effect on the financial condition, results of operations
or business of VBI or the Bank, or which challenges the validity of the Merger.
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(j) EMPLOYEE BENEFIT PLANS.
(i) The Disclosure Schedule sets forth a true and a complete list
of (A) each employee benefit plan, as defined in Section 3 (3) of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA") that
VBI or the Bank currently maintains or has maintained within the three year
period preceding the date hereof (the "ERISA Plans"), and (B) each other
plan, arrangement, program and agreement providing employee benefits,
including, but not limited to, deferred compensation, bonuses, severance
pay or fringe benefits, and consulting or employment agreements, that are
presently maintained for the benefit of any current or former employees of
VBI or the Bank (the ERISA Plans and such other plans are collectively
referred to as the "Plans"). VBI has made available to NCBE copies of all
Plans and any related documents or instruments establishing the Plans or
any related trusts or funding arrangements; the most recent determination
letter, or any outstanding request for a determination letter, from the IRS
with respect to each ERISA Plan intended to satisfy the requirements of
Section 401(a) of the Code and a copy of the application on which the
determination letter or request for determination letter is based; fidelity
bonds; actuarial valuations, if applicable, for the most recent three plan
years for which such valuations are available; current summary plan
descriptions; annual returns/reports on Form 5500 and summary annual report
for the three most recent plan years; Form 5310 and any related filings
with the IRS, the Department of Labor ("DOL") or the Pension Benefit
Guaranty Corporation ("PBGC") within the last year preceding the date of
this Agreement.
(ii) Each ERISA Plan intended to be qualified under Section 401(a)
of the Code has received a favorable determination letter from the IRS that
the Plan is qualified and satisfies all legal requirements, including the
requirements of the Tax Reform Act of 1986. Nothing has occurred since the
dates of the respective IRS favorable determination letters that could
adversely affect the qualification of the Plans and their related trusts.
(iii) Each Plan may be terminated directly or indirectly by NCBE, in
its discretion, at any time after the Closing, in accordance with its
terms, without any liability to NCBE or the Bank, to any person, entity or
government agency for any conduct, practice or omission of VBI or the Bank
which occurred prior to the Closing, except for liabilities to and the
rights of the employees thereunder accrued prior to the Closing, or if
later, the time of termination.
(k) ENVIRONMENTAL MATTERS. As used herein, the term "Environmental Laws"
shall mean all local, state and federal environmental, health and safety laws
and regulations and common law standards in all jurisdictions in which VBI and
the Bank have done business or owned, leased or operated property, including,
without limitation, the Federal Resource Conservation and Recovery Act, the
Federal Comprehensive Environmental Response, Compensation and Liability Act,
the Federal Clean Water Act, the Federal Clean Air Act, and the Federal
Occupational Safety and Health Act. To the knowledge of VBI, neither the
conduct nor operation of VBI or the Bank nor any condition of any property
presently or previously owned, leased or operated by either of them violates or
violated Environmental Laws and no condition exists, has existed or event has
occurred with respect to VBI or the Bank or any such property that, with notice
or the passage of time, or both, would constitute a violation of Environmental
Laws or obligate NCBE or the Bank to remedy, stabilize, neutralize or otherwise
alter the environmental condition of any such property. To the knowledge of
VBI, neither VBI nor the Bank has received any notice from any person or entity
that VBI or the Bank or the operation or condition of any property owned, leased
or operated by either of them are or were in violation of any Environmental Laws
or that either of them is responsible for the cleanup or other remediation of
any pollutants, contaminants, or hazardous or toxic wastes, substances or
materials at, on or beneath any such property.
(l) REGULATORY COMPLIANCE. Neither VBI nor the Bank is a party to any
enforcement action instituted by or any memorandum of understanding or cease and
desist order with any federal or state regulatory agency, and, to the knowledge
of VBI, no such action, memorandum or order has been threatened, and VBI has not
received any report of examination from any federal or state regulatory agency
which requires that VBI or the Bank address any material problem or take any
material action which has not already been addressed or taken in a manner
satisfactory to the regulatory agency.
(m) BROKER'S AND FINDER'S FEES. VBI has not incurred any obligation or
liability, contingent or otherwise, for any brokers or finders in respect of the
matters provided in this Agreement.
<PAGE>
(n) STOCKHOLDERS. Exhibit A sets forth the name and the number of
outstanding shares of VBI Common owned by each of the Stockholders as of the
date of this Agreement. Each of the Stockholders is the record and beneficial
owner of the number of outstanding shares of VBI Common set forth opposite such
Stockholder's name on Exhibit A, free and clear of all liens, restrictions and
claims of any kind.
(o) TRUE AND COMPLETE INFORMATION. No representation or warranty made by
VBI or the Stockholders in this Agreement and no statement contained in the
Disclosure Schedule or any certificate, list, exhibit or other instrument
specified in this Agreement, whether heretofore furnished to NCBE or hereinafter
required to be furnished to NCBE, contains or will contain any untrue statement
of a material fact or omits or will omit to state a material fact necessary to
make the statements contained therein not misleading.
7. AGREEMENTS WITH RESPECT TO CONDUCT OF VBI AND THE BANK AFTER THE DATE
HEREOF.
(a) AFFIRMATIVE COVENANTS. VBI agrees that it and the Bank will, except
as otherwise agreed in writing by NCBE:
(i) carry on its respective business in the ordinary course and
consistent with the respective policies, procedures and practices of VBI
and the Bank in substantially the same manner as heretofore conducted;
(ii) except as they may terminate in accordance with their terms or
in accordance with the terms of this Agreement, keep in full force and
effect, and not cause a default of any of its obligations under, any
Material Contracts;
(iii) keep in full force and effect the insurance coverage in effect
on the date hereof;
(iv) maintain and preserve its respective business organization,
rights, franchises, permits and licenses and to retain its present employee
force so that it will be available to NCBE on and after the Closing,
maintain its existing, or substantially equivalent, credit arrangements
with banks and other financial institutions and use its best efforts to
continue its general customer relationships; and
(v) duly comply in all material respects with all laws applicable
to it and to the conduct of its business.
(b) NEGATIVE COVENANTS. Neither VBI nor the Bank will, except with the
prior written consent of NCBE:
(i) incur or agree to incur any obligation or liability (absolute
or contingent) other than the taking of deposits and other liabilities
incurred in the ordinary course of business consistent with prior practice,
and liabilities arising out of the consummation of this Agreement; make or
permit any amendment or termination of any Material Contract; acquire (by
merger, consolidation, or acquisition of stock or assets) any corporation,
partnership, limited liability company or other business organization; sell
or otherwise dispose of any substantial part of its assets; enter into any
joint venture or partnership; sell or otherwise dispose of any real
property; enhance, expand, modify, replace or alter any computer or data
processing system owned, leased or licensed by VBI or the Bank (including
any software associated with any such computer or system); make, originate
or otherwise acquire one or more loans, or one or more loan commitments for
one or more loans, or one or more lines of credit, in an aggregate amount
in excess of $1,000,000 to any person other than renewals, refinancings, or
restructurings of loans outstanding as of the date of this Agreement; or
enter into any contract, agreement, commitment or arrangement with respect
to any of the foregoing; or
(ii) make any capital expenditure, except for ordinary repairs,
renewals and replacements in excess of $25,000 individually or $100,000 in
the aggregate; or
(iii) issue or redeem any shares of the capital stock or other equity
securities, options or other ownership interests of VBI or the Bank, or
declare, issue or pay any dividend or other distribution of assets,
<PAGE>
other than (A) to pay to holders of VBI Common cash dividends on the VBI
Common in an amount not to exceed the federal and state income taxes
payable on the net income of VBI through the Closing; such federal and
state taxes shall be computed on the basis of a good faith estimate at the
Closing of the taxable income of VBI through the Closing, which taxable
income shall be computed in a manner consistent with the computation of
taxable income for prior years and also in compliance with the requirements
of Subchapter S of the Code and which taxes shall reflect the maximum
federal and Illinois individual tax rate, (B) cash dividends paid on the
Bank Stock, and (C) obligations or liabilities permitted to be incurred
pursuant to Section 7(c)(i) hereof; or
(iv) sell, pledge or redeem any of the Bank Stock; amend VBI's
articles of incorporation or by-laws; permit the Bank to amend its articles
of incorporation or by-laws; split, combine or reclassify any shares of
capital stock; or enter into any agreement, commitment or arrangement with
respect to any of the foregoing; or
(v) enter into or amend any employment agreement; or
(vi) open any new office or close any current office of the Bank at
which business is conducted.
(c) NO SOLICITATION. Neither VBI nor any officer, director or any
representative thereof shall solicit or authorize the solicitation of, enter
into or authorize any discussions with any third party concerning, or furnish or
authorize the furnishing of any confidential information relating to VBI or the
Bank to any third party for the purpose of studying, considering, soliciting or
inducing, any offer or possible offer by any such third party or any other third
party to acquire VBI, the Bank, any equity securities of VBI or the Bank, or all
or substantially all of the assets of VBI or the Bank.
(d) ACCOUNTING. The Bank shall maintain its books, accounts and records
in accordance with GAAP. Neither VBI nor the Bank shall make any change in any
method of accounting or accounting practice, or any change in the method used in
allocating income, charging costs or accounting for income, except as may be
required by law, regulation or GAAP. The Bank shall not change any practice or
policy with respect to the charging off or loans or the maintenance of its
reserve for possible loan losses, except as required by law, regulation or GAAP.
8. ADDITIONAL AGREEMENTS.
(a) CONTINUING ACCESS TO INFORMATION. From the date hereof through the
Closing, VBI shall permit NCBE and its authorized representatives reasonable
access during regular business hours to the properties of VBI and the Bank. VBI
shall make its and the Bank's directors, management and other employees and
agents and authorized representatives (including counsel and independent public
accountants) available to confer with NCBE and its authorized representatives at
reasonable times and upon reasonable request, and VBI shall, and shall cause the
Bank to, disclose and make available to NCBE, all books, papers and records
relating to the assets, properties, operations, obligations and liabilities of
VBI and the Bank, including, but not limited to, all books of account, tax
records, minute books of directors' and stockholders' meetings, organizational
documents, material contracts and agreements, loan files, filings with any
regulatory authority, accountants' work papers (if available and subject to the
respective independent accountants' consent), litigation files (but only to the
extent that such review would not result in a material waiver of the
attorney-client or attorney work product privileges under the rules of evidence)
and the Plans.
(b) MANAGEMENT REPORTS. VBI will cause the Bank to provide to NCBE copies
of all written reports hereafter provided to the Board of Directors of VBI or
the Bank, including delinquency schedules, additions to loan loss reserves,
minutes of all meetings of the Board of Directors of VBI or the Bank and each
committee thereof, payroll reports, and financial statements. VBI shall
designate a representative to confer on a regular basis with representatives of
NCBE and to report the general status of the ongoing operations of VBI and the
Bank to NCBE.
(c) NOTIFICATION OF CHANGE. VBI promptly will notify NCBE of any material
changes in the operations of VBI or the Bank and of any governmental
complaints, investigations or hearings (or communications indicating that the
same may be contemplated), or the institution or the threat of litigation
involving VBI or the Bank which would have a material adverse effect on the
financial condition or results of operations of VBI or the Bank or result in any
breach of any representation, warranty, covenant or agreement on the part of VBI
or the Stockholders.
<PAGE>
(d) INFORMATION FOR REGULATORY FILINGS. VBI shall furnish NCBE with any
information within its possession which relates to VBI or the Bank and which is
required under any applicable law or regulation for inclusion in any filing that
NCBE is required to make with any Applicable Governmental Authority.
(e) STOCKHOLDER APPROVAL AND VOTING AGREEMENT. VBI shall take such action
in accordance with the BCA as is required for the stockholders of VBI to approve
the Merger. In connection with such stockholders' approval, the Board of
Directors of VBI (subject to compliance with its fiduciary duties as advised in
writing by counsel) shall recommend to such stockholders the approval of the
Merger and use its best efforts to obtain such approval. The Stockholders agree
to vote all of the shares of capital stock of VBI they own on the date hereof in
favor of the Merger. The Stockholders further agree that until the earlier of
the Closing or termination of this Agreement, they shall not sell, transfer,
pledge or otherwise dispose of, or agree to sell, transfer, pledge or otherwise
dispose of, any interest in any such shares, or any other shares of the capital
stock of VBI hereafter acquired by them, except for a sale, disposition or
transfer to NCBE.
(f) FINAL "S CORPORATION" INCOME TAX RETURNS. VBI shall cause to be
prepared and shall file in a timely manner (taking into account any extensions
of due dates) VBI federal and state income tax returns for the period from
January 1, 1997 through the date on which the Effective Time occurs and shall
promptly thereafter furnish to NCBE a copy of each Stockholder's related Form
K-1.
9. INDEMNIFICATION.
(a) AGREEMENT BY THE STOCKHOLDERS TO INDEMNIFY. Each of the Stockholders,
jointly and severally, agree to indemnify and hold NCBE harmless from and
against the aggregate of all expenses, losses, costs, deficiencies, liabilities
and damages (including, without limitation, reasonable attorneys' fees) incurred
or suffered by NCBE arising out of or resulting from (i) any breach of a
representation or warranty made by VBI or the Stockholders in or pursuant to
this Agreement, (ii) any breach of the covenants or agreements made by VBI or
the Stockholders in or pursuant to this Agreement, (iii) any inaccuracy in any
certificate delivered by VBI or any Stockholder pursuant to this Agreement or
(iv) any claim, suit, proceeding or other liability, known or unknown,
contingent or otherwise, presently in existence or asserted hereafter against
VBI or the Bank by any current or former employee of VBI or the Bank and arising
out of any act, pattern of conduct, circumstances or failure to act occurring
prior to the Closing (collectively, "Indemnifiable Damages"). The Stockholders
shall not be liable to NCBE with respect to any claim for Indemnifiable Damages
except for liabilities contemplated by clause (iv) of the preceding sentence
unless the aggregate amount of such Indemnifiable Damages incurred by NCBE
exceeds an aggregate of $250,000, in which case the Stockholders shall be
jointly and severally liable to NCBE for the total amount of such Indemnifiable
Damages. In the event of any liabilities contemplated by clause (iv), the
Stockholders shall be liable jointly and severally to NCBE for the total amount
of such Indemnifiable Damages regardless of the amount.
(b) SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Each of the
representations, warranties and indemnities made by the Stockholders in this
Agreement or pursuant hereto shall expire two years after the Closing, except
that (i) the representations and warranties contained in Section 6(e), 6(k) and
6(l) shall expire at the time the latest period of limitations expires for the
enforcement by any governmental authority of any remedy, penalty or claim
arising out of the matters addressed therein. No claim for the recovery of
Indemnifiable Damages may be asserted by NCBE against the Stockholders after
such representations, warranties and indemnities shall thus expire, provided,
however, that claims for Indemnifiable Damages first asserted within the
applicable period shall not thereafter be barred. Notwithstanding any knowledge
of facts determined or determinable by any party by investigation, each party
shall have the right to fully rely on the representations, warranties, covenants
and agreements of the other parties contained in this Agreement or in any other
documents or papers delivered in connection herewith. Each representation,
warranty, covenant and agreement of the parties contained in this Agreement is
independent of each other representation, warranty, covenant and agreement.
10. CONDITIONS TO OBLIGATIONS OF ALL PARTIES. The obligations of all
parties to effect the Merger are subject to the satisfaction or waiver of the
following conditions:
(a) STOCKHOLDER APPROVAL. The Merger shall have been approved by the
stockholders of VBI as required by the BCA.
<PAGE>
(b) REGULATORY APPROVAL. The Merger shall have been approved by all
Applicable Governmental Authorities and all applicable waiting periods shall
have expired.
(c) NO ACTION TO PREVENT CONSUMMATION.
(i) No action or proceeding shall have been instituted before a
court or other governmental body, agency or authority or other person to
restrain or prohibit the transactions contemplated by this Agreement or to
obtain damages or other relief in connection with the execution of this
Agreement or the consummation of the Merger;
(ii) No governmental agency shall have notified either party in
writing to the effect that consummation of the transactions contemplated by
this Agreement would constitute a violation of any law and that it intends
to commence proceedings to restrain consummation of the Merger; and
(iii) No statute, rule, regulation or policy shall have been
promulgated or enacted by any governmental or regulatory agency of
competent jurisdiction which shall prevent or declare the Merger illegal.
11. CONDITIONS TO OBLIGATIONS OF NCBE. The obligations of NCBE to effect
the Merger is subject to the satisfaction or waiver of the following conditions:
(a) STATUS AS OF CLOSING. At and as of the Closing:
(i) The representations and warranties of VBI and the Stockholders
contained in this Agreement shall have been true in all material respects
as of the date of this Agreement and shall continue to be true in all
material respects as though made at and as of the Closing.
(ii) VBI and the Stockholders shall have performed and satisfied or
otherwise complied with all covenants made by any of them which are to be
performed, on or prior to the Closing;
(iii) There shall not have occurred any material adverse change in
the business, assets, properties, financial condition or results of
operations of VBI or the Bank; and
(iv) There shall be delivered to NCBE a certificate (dated the
Closing and signed by the chief executive officer of VBI) stating that to
the best of his knowledge the conditions set forth in clauses (i) through
(iii) above have been satisfied.
(b) ATTORNEY'S OPINION. NCBE shall have received an opinion, dated the
Closing, of counsel for VBI in substantially the form of Exhibit B attached
hereto.
12. CONDITIONS TO OBLIGATIONS OF VBI. The obligations of VBI to effect
the Merger are subject to the satisfaction or waiver of the following
conditions:
(a) TRUE REPRESENTATIONS AND WARRANTIES. All representations and
warranties of NCBE contained in this Agreement shall be true in all material
respects at and as of the Closing, as though such representations and warranties
were made at and as of the Closing, and NCBE shall have performed and satisfied
in all material respects all covenants, conditions and agreements required by
this Agreement to be performed and satisfied on or prior to the Closing, and at
the Closing there shall be delivered to VBI a certificate (dated the Closing and
signed by the President of NCBE) stating that to the best of his knowledge such
conditions have been satisfied.
(b) ATTORNEY'S OPINION. VBI shall have received an opinion, dated the
Closing, of Baker & Daniels, counsel for NCBE, in substantially the form of
Exhibit C attached hereto.
13. INFORMATION. The parties acknowledge the confidential and proprietary
nature of the information which has ben exchanged and which will be received
from each other hereunder (the "Information") and agree to hold and keep the
same confidential. The Information shall include any and all financial,
technical, commercial, marketing,
<PAGE>
customer or other information concerning the business, operations and affairs of
a party that may be provided to the other, irrespective of the form of the
communication, by such party's employees or authorized representatives. The
Information shall not include information which is or becomes generally
available to the public other than as a result of a disclosure by a party or its
authorized representatives in violation of this Agreement. The parties agree
that the Information will be used solely for the purposes contemplated by this
Agreement and will not be disclosed to any person other than employees and
authorized representatives of a party who are directly involved in evaluating
the Merger. The Information shall not be used in any way detrimental to a
party, including use directly or indirectly in the conduct of the other party's
business or any business or enterprise in which such party may have an interest,
now or in the future, and whether or not now in competition with such other
party. Upon termination of this Agreement without the Closing having occurred,
each party shall (a) deliver to the other originals and all copies of all
Information made available to such party; (b) not retain any copies, extracts or
other reproductions in whole or in part of the Information; and (c) destroy all
memoranda, notes and other writings prepared by any party or its authorized
representatives based on the Information.
14. PAYMENT OF EXPENSES.
(a) EXPENSES GENERALLY. Except as provided in subsection (b), each party
hereto shall pay its own fees and expenses incident to preparing for, entering
into, and carrying out this Agreement and the transactions contemplated hereby.
(b) ADVANCE PAYMENT. On the date hereof, NCBE has paid VBI the amount of
$250,000, receipt of which is hereby acknowledged, as an advance payment of
expenses which VBI expects to incur as a result of the Merger. Whether or not
this Agreement is terminated or expires without the Closing occurring for any
reason, VBI shall be entitled to retain such payment.
15. TERMINATION OF AGREEMENT. Notwithstanding any provision to the
contrary herein, this Agreement may be terminated at any time on or prior to the
Closing:
(a) MUTUAL CONSENT. By mutual consent of the respective Boards of
Directors of VBI and NCBE, or
(b) OTHERWISE. (i) By the Board of Directors of VBI, upon written notice
to NCBE, if by April 15, 1998, any of the conditions set forth in Sections 10 or
12 shall not have been satisfied; (ii) by the Board of Directors of NCBE, upon
written notice to VBI, if by April 15, 1998, any of the conditions set forth in
Sections 10 or 11 shall not have been satisfied; provided, however, that NCBE
shall have given at least thirty (30) days written notice to VBI of any
condition specified in Section 11 which it believes would form the basis of
terminating this Agreement and such condition has not been satisfied or waived
during such period.
(c) EFFECT OF TERMINATION. Upon termination of this Agreement by either
NCBE or VBI pursuant to this Section 15, except for Sections 13, 14 and 16,
which shall survive to the extent permitted by applicable statutes of
limitation, this Agreement shall be void and of no further effect, and there
shall be no liability by reason of this Agreement, or the termination thereof on
the part of NCBE, VBI or the Stockholders, unless such rightful termination
results from a party's intentional or reckless misrepresentation or intentional
or reckless breach of any covenant contained herein. In such event, the
terminating party shall have all the remedies available to it at law or in
equity.
16. PUBLICITY AND REPORTS. NCBE and VBI shall coordinate all publicity
relating to the transactions contemplated by this Agreement and, except as
otherwise required by law, neither party shall issue any press release,
publicity statement or other public notice relating to this Agreement or any of
the transactions contemplated hereby without obtaining the prior consent of the
other, which consent shall not be unreasonably withheld.
17. NO ASSIGNMENT. Neither this Agreement nor any rights, duties or
obligations hereunder shall be assignable by either party, and any attempted
assignment in violation of this prohibition shall be null and void.
18. LAW GOVERNING. This Agreement will be governed in all respects,
including validity, interpretation and effect, by the laws of the State of
Indiana.
<PAGE>
19. COUNTERPARTS. This Agreement may be executed in several counterparts
and one or more separate documents, all of which together shall constitute one
and the same instrument with the same force and effect as though all of the
parties had executed the same documents.
20. AMENDMENT. Any of the terms or conditions of this Agreement may only
be amended or modified, in a writing signed by all parties.
21. NOTICES. Any notice of communication required or permitted hereunder
shall be sufficiently given if in writing and (a) delivered in person; (b) sent
by facsimile transmission (with confirmation of receipt by the recipient) or
express delivery service; or (c) mailed by certified or registered mail, postage
prepaid, as follows:
If to NCBE, addressed to: If to VBI or the Stockholders,
addressed to:
National City Bancshares, Inc. Vernois Bancshares, Inc.
227 Main Street c/o Sam F. Mateer
P. O. Box 868 No. 2 Hawthorne Hills
Evansville, Indiana 47705-0868 Mount Vernon, Illinois 62864
Attn: Robert A. Keil Attn: Sam F. Mateer
Fax No. (812) 464-9825
With a copy addressed to: With a copy addressed to:
Baker & Daniels Howard, Leggans, Piercy & Howard
300 North Meridian Street, Suite 2700 1008 Main
Indianapolis, Indiana 46204-1782 Mount Vernon, Illinois 62864
Attn: David C. Worrell Attn: David L. Piercy
Fax No. (317) 237-1000 Fax No. (618) 244-7197
22. ENTIRE AGREEMENT. All exhibits and the Disclosure Schedule referred
to in this Agreement are integral parts hereof, and this Agreement, such
exhibits and Disclosure Schedule, constitute the entire agreement among the
parties hereto with respect to the matters contained herein and therein, and
supersede all prior agreements and understandings between the parties with
respect thereto.
23. HEADINGS. The section headings contained in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as
of the date first above written.
NATIONAL CITY BANCSHARES, INC.
By: /s/ John D. Lippert
----------------------------------------
John D. Lippert, Chairman of the Board
ATTEST:
/s/ Harold A. Mann
- ----------------------------
Harold A. Mann, Secretary
VERNOIS BANCSHARES, INC.
By: /s/ Sam F. Mateer
----------------------------------------
Sam F. Mateer, President
ATTEST:
/s/ Michael J. Mateer
- ----------------------------
Michael J. Mateer, Secretary
STOCKHOLDERS:
/s/ Sam F. Mateer
--------------------------------------------
Sam F. Mateer, Trustee for the Sam F. Mateer
Revocable Trust
/s/ JoAnn Mateer
--------------------------------------------
JoAnn Mateer, Trustee for the JoAnn Mateer
Revocable Trust
/s/ Michael J. Mateer
--------------------------------------------
Michael J. Mateer
/s/ Michael J. Mateer
--------------------------------------------
Michael J. Mateer, Trustee for the
Michael J. Mateer Revocable Trust
<PAGE>
EXHIBIT A
STOCKHOLDERS
<TABLE>
<CAPTION>
Number of
Shares of VBI
Common Owned
----------------------------------
Class A Common Class B Common
-------------- --------------
Name
----
<S> <C> <C>
Sam F. Mateer,
Trustee for the
Sam Mateer
Revocable Trust 4,575 309
JoAnn Mateer,
Trustee for the
JoAnn Mateer
Revocable Trust 1,675 ---
Michael J. Mateer 5,000 ---
Michael J. Mateer,
Trustee for the
Michael J. Mateer
Revocable Trust ----- 309
</TABLE>
<PAGE>
EXHIBIT B
FORM OF OPINION OF COUNSEL FOR VBI
Capitalized terms used and not otherwise defined herein have the meanings
given them in the Plan and Agreement of Merger (the "Agreement").
1. VBI is a corporation duly organized, validly existing and in good
standing under the laws of the State of Illinois. The Bank is a state banking
corporation duly organized, validly existing and in good standing under the laws
of the State of Illinois.
2. The authorized capital stock of VBI consists of 20,000 shares of Class
A Common and 618 shares of Class B Common. Based on VBI's stock transfer
records, on the date hereof, there are 11,812 shares of Class A Common and 618
shares of Class B Common issued and outstanding.
3. The authorized capital stock of the Bank consists of 45,500 shares of
Common Stock, $12.00 par value per share. Based on the Bank's stock transfer
records, on the date hereof, there are 45,500 shares of Common Stock issued and
outstanding, all of which are owned of record by VBI.
4. All the outstanding shares of VBI Common and Bank Stock have been duly
authorized and validly issued and are fully paid and non-assessable and were not
issued in violation of any preemptive rights.
5. The Agreement has been duly executed and delivered by VBI and the
Stockholders and constitutes a valid and binding obligation of VBI and the
Stockholders, enforceable against them in accordance with its terms, except to
the extent limited by general principles of equity and by bankruptcy,
insolvency, reorganization, liquidation, fraudulent conveyance, moratorium,
readjustment of debt or other laws of general application relating to or
affecting the enforcement of creditors' rights. The Agreement contains a
provision to the effect that the Agreement is to be construed by and governed in
accordance with the laws of the State of Indiana (the "Governing Law
Provision"). Our opinion in this paragraph means that the Agreement, with the
exception to the Governing Law Provision, is enforceable under the laws of the
State of Illinois, subject to the exceptions provided above, and, furthermore,
that an Illinois court or federal court applying Illinois law would enforce the
Governing Law Provision.
6. All consents or approvals of any Applicable Governmental Authorities
required to be obtained by VBI or the Stockholders in connection with the Merger
have been obtained.
7. The execution and delivery by VBI of, and the performance by VBI or
its agreements in, the Agreement do not: (a) violate its articles of
incorporation or by-laws or the articles of incorporation or by-laws of the
Bank, or (b) to our knowledge, and except as set forth in the Disclosure
Schedule, violate, result in a breach of or constitute a default under any
material contract, agreement or other instrument to which VBI is a party or by
which its properties are bound.
8. Upon the filing and acceptance of the Articles of Merger by the
Illinois Secretary of State, and assuming the Merger is effective under the laws
of the State of Indiana, the Merger will become effective under the BCA.
9. The Merger has been approved by the stockholders of VBI in accordance
with the BCA.
<PAGE>
EXHIBIT C
FORM OF OPINION OF COUNSEL FOR NCBE
Capitalized terms used and not otherwise defined herein have the meanings
given them in the Plan and Agreement of Merger (the "Agreement").
1. NCBE is incorporated and validly existing under the laws of Indiana
and is registered with the Federal Reserve Board as a bank holding company under
the Bank Holding Company Act of 1956, as amended.
2. The Agreement has been duly executed and delivered by each NCBE and
constitutes a valid and binding obligation of NCBE, enforceable against NCBE in
accordance with its terms, except to the extent limited by general principles of
equity and by bankruptcy, insolvency, reorganization, liquidation, fraudulent
conveyance, moratorium, readjustment of debt or other laws of general
application relating to or affecting the enforcement of creditors' rights.
3. All consents or approvals of any Applicable Governmental Authorities
required to be obtained by NCBE in connection with the Merger have been
obtained.
4. The execution and delivery by NCBE of, and the performance by NCBE of
its agreements in, the Agreement, do not: (a) violate its articles of
incorporation or by-laws; or (b) to our knowledge, violate, result in a breach
or constitute a default under any material contract, agreement or other
instrument to which NCBE is a party or by which its respective properties are
bound.
5. Upon the filing and acceptance of the Articles of Merger with the
Indiana Secretary of State, and assuming that the Merger is effective under the
laws of the State of Illinois, the Merger will become effective under the IBCL.
