<PAGE> 1
As filed with the Securities and Exchange Commission on January 22, 1997.
Registration Statement No. 333-18181
===============================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
PRE-EFFECTIVE AMENDMENT NO. 2
TO
FORM S-4
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
ASSOCIATED BANC-CORP
(Exact Name of Registrant as Specified in its Charter)
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WISCONSIN 6711 39-1098068
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
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112 NORTH ADAMS STREET
P.O. BOX 13307
GREEN BAY, WI 54307-3307
(414) 433-3166
(Address, Including Zip Code, and Telephone Number,
Including Area Code, of Registrant's Principal Executive Offices)
HARRY B. CONLON
ASSOCIATED BANC-CORP
112 NORTH ADAMS STREET
P.O. BOX 13307
GREEN BAY, WI 54307-3307
(414) 433-3166
(Name, Address, Including Zip Code and Telephone Number,
Including Area Code, of Agent for Service)
with copies to:
JAMES M. BEDORE, ESQ. ERICH MILDENBERG, ESQ.
REINHART, BOERNER, VAN DEUREN, DAVIS & KUELTHAU, S.C.
NORRIS & RIESELBACH, S.C. 111 EAST KILBOURN AVENUE
1000 NORTH WATER STREET MILWAUKEE,WI 53202
P.O. BOX 92900 (414) 276-0200
MILWAUKEE, WI 53202-0900
(414) 298-1000
Approximate date of commencement of proposed sale of the securities to
the public: AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION
STATEMENT.
If the securities being registered on this form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]
===============================================================================
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION STATEMENT
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF THE
SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THE REGISTRATION STATEMENT SHALL
BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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ASSOCIATED BANC-CORP
Cross Reference Sheet pursuant to Item 501(b)
of Regulation S-K showing the location in the Prospectus
of the responses to the items of Part I of Form S-4
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S-4 ITEM NUMBER AND CAPTION PROXY STATEMENT/PROSPECTUS HEADING
================================================================================================================
A. INFORMATION ABOUT THE TRANSACTION
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1. Forepart of Registration Statement and "Facing page Registration Statement; Cross Reference
Outside Front Cover Page of Prospectus Sheet"; "Cover Page of Proxy Statement/Prospectus"
2. Inside Front and Outside Back Cover Pages of "Available Information"; "Incorporation of Certain
Prospectus Documents by Reference"; "Table of Contents";
"Introduction"
3. Risk Factors, Ratio of Earnings to Fixed "Prospectus Summary"; "Comparative Unaudited Per Share
Charges and Other Information Data"; "Risk Factors"
4. Terms of the Transaction "Prospectus Summary"; "The Merger"; "Certain
Provisions of the Merger Agreement"; "Exhibit A--The
Agreement and Plan of Merger"
5. Pro Forma Financial Information *
6. Material Contracts With the Company Being "The Merger"; "Exhibit A-The Agreement and Plan of
Acquired Merger"
7. Additional Information Required for *
Reoffering by Persons and Parties Deemed to
be Underwriters
8. Interests of Named Experts and Counsel *
9. Disclosure of Commission Position on "The Merger"
Indemnification for Securities Act
Liabilities
B. INFORMATION ABOUT THE REGISTRANT
10. Information with Respect to S-3 Registrants *
11. Incorporation of Certain Information by "Incorporation of Certain Documents by Reference"
Reference
12. Information with Respect to S-2 or S-3 *
Registrants
13. Incorporation of Certain Information by *
Reference
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14. Information with Respect to Registrants *
Other Than S-3 or S-2 Registrants
C. INFORMATION ABOUT THE COMPANY BEING ACQUIRED
15. Information With Respect to S-3 Companies
*
16. Information With Respect to S-2 or S-3 *
Companies
17. Information With Respect to Companies Other "Prospectus Summary"; "Selected Financial Data of
Than S-2 or S-3 Associated Banc-Corp and the Company"; "Comparative
Companies Stock Prices and Dividends"; "Certain Information
Concerning the Company"; "Exhibit C: Centra
Financial, Inc. and Subsidiaries Financial Statements
and Management's Discussion and Analysis of Financial
Condition and Results of Operations"
D. VOTING AND MANAGEMENT
INFORMATION.
18. Information if Proxies, Consents, or "Cover Page of Proxy Statement/Prospectus"; "The
Authorizations Are to be Solicited Special Meeting"; "The Merger"; "Certain Information
Concerning the Company"
19. Information if Proxies, Consents, or *
Authorizations Are Not to be Solicited, or
in an Exchange Offer
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*Indicates item not applicable.
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CENTRA FINANCIAL, INC.
10701 WEST NATIONAL AVENUE
WEST ALLIS, WISCONSIN 53227
January 22, 1997
Dear Fellow Shareholder:
Following this letter is a notice of a Special Meeting of the Shareholders
of Centra Financial, Inc. (the "Company"), a Proxy Statement/Prospectus and a
proxy card for the Special Meeting. The Special Meeting will commence at 10:00
a.m. on February 21, 1997 at the Midway Hotel, 1005 S. Moorland Road,
Brookfield, Wisconsin.
The Company shareholders will be asked to vote on a proposal to approve an
Agreement and Plan of Merger among Associated Banc-Corp ("Associated") and the
Company dated November 6, 1996 (the "Merger Agreement"). Associated is a
Wisconsin bank holding company owning all of the capital stock of nine
commercial banks located in Wisconsin and two commercial banks located in
Illinois.
Subject to receipt of regulatory approval, approval by holders of a
majority of the shares of the Company Common Stock and satisfaction of other
conditions, the Merger Agreement provides that the Company will combine its
business and operations with those of Associated through a statutory merger (the
"Merger"), and will thereafter operate its banking business as "Associated Bank
West Allis."
If the Merger becomes effective, each share of the Company Common Stock
will be converted into the number of shares of Associated Common Stock which is
equal to 14,400,000 divided by the "Daily Average Price," divided by the number
of shares of Company Common Stock issued and outstanding immediately prior to
the Effective Time. However, the number of shares of Associated Common Stock
into which each share of Company Common Stock shall be converted will not be
less than two, and if the Daily Average Price is lower than $35, Associated and
the Company will make a good faith effort to promptly renegotiate the conversion
ratio. The Daily Average Price will equal the average of the closing prices of a
share of Associated Common Stock during the ten trading days ending three
business days prior to the Effective Time. See "The Merger - Merger
Consideration" in the accompanying Proxy Statement/Prospectus. Associated Common
Stock trades on the Nasdaq National Market and the shares of Associated Common
Stock to be issued to you in the Merger will offer greater liquidity than that
of the Company Common Stock which you presently own.
The Merger is intended to be tax-free for federal income tax purposes to
Company shareholders who receive Associated Common Stock in exchange for Company
Common Stock, except as discussed in "The Merger Certain Material Federal
Income Tax Consequences" in the accompanying Proxy Statement/Prospectus. No
fractional shares of Associated Common Stock will be issued in the Merger.
Company shareholders entitled to a fractional share of Associated Common Stock
will receive an amount of cash calculated upon the average closing prices as
reported on the Nasdaq National Market for the ten trading days ending three
business days prior to the Effective Time. Company shareholders are advised to
consult their tax advisors with respect to income tax consequences of the
transaction. Details of the Merger are set forth in the accompanying Proxy
Statement/Prospectus. We encourage you to read it carefully.
The Board of Directors of the Company has unanimously approved the Merger
Agreement as being in the best interest of the Company and its shareholders.
Your Board recommends that the Company shareholders vote to approve the Merger
Agreement.
All shareholders of the Company are invited to attend the Special Meeting.
Whether or not you plan to attend the Special Meeting, holders of the Company
Common Stock are asked to please complete, date and sign the enclosed proxy
card, which is solicited by the Board of Directors of the Company, and return it
promptly in the accompanying envelope, which requires no postage if mailed in
the United States. If you later find that you may be present at the Special
Meeting or for any other reason desire to revoke your proxy, you may do so at
any time before it is voted.
IN ORDER TO APPROVE THE MERGER AGREEMENT, IT IS NECESSARY THAT HOLDERS OF
AT LEAST A MAJORITY OF THE OUTSTANDING SHARES OF THE COMPANY VOTE IN FAVOR OF
THE MERGER AGREEMENT.
Very truly yours,
/s/ Andrew K. Wilson
-----------------------------------
Andrew K. Wilson,
Chairman of the Board of Directors
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CENTRA FINANCIAL, INC.
10701 WEST NATIONAL AVENUE
WEST ALLIS, WISCONSIN 53227
------------------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD FEBRUARY 21, 1997
------------------------------------
TO THE SHAREHOLDERS OF CENTRA FINANCIAL, INC.
A Special Meeting of Shareholders of Centra Financial, Inc. (the "Company")
will be held on February 21, 1997 at 10:00 a.m. at the Midway Hotel, 1005 S.
Moorland Road, Brookfield, Wisconsin, for the purpose of voting on the following
matters:
1. To approve the Agreement and Plan of Merger dated as of November 6, 1996
between Associated Banc-Corp ("Associated") and the Company (the "Merger
Agreement") providing for the merger of the Company with and into
Associated (the "Merger") (a copy of the Merger Agreement is attached as
Exhibit A hereto).
2. To transact such other business as may properly come before the meeting.
THE DIRECTORS OF THE COMPANY HAVE UNANIMOUSLY APPROVED THE MERGER AGREEMENT
AND RECOMMEND THAT THE SHAREHOLDERS APPROVE THE MERGER AGREEMENT.
Any shareholder desiring to exercise dissenters' rights and be paid in cash
for the fair value of his or her shares of Company Common Stock in accordance
with the provisions of the Wisconsin Business Corporation Law (i) must file a
written objection to the Merger prior to the Special Meeting of Shareholders,
(ii) must not vote in favor thereof, and (iii) must otherwise comply with the
procedures set forth in Subchapter XIII of the Wisconsin Business Corporation
Law, a copy of which is attached as Exhibit B to the Proxy Statement/Prospectus.
See "The Merger -- Dissenters' Rights" in the accompanying Proxy
Statement/Prospectus.
The Board of Directors has fixed the close of business on January 20, 1997
as the record date for the determination of Company shareholders entitled to
notice of and to vote at the Special Meeting and any adjournment thereof.
Whether or not you plan to attend the Special Meeting, holders of the
Company Common Stock are asked to please complete, date and sign the enclosed
proxy card, which is solicited by the Board of Directors of the Company, and
return it promptly in the accompanying envelope. No postage is required if
mailed in the United States. The giving of such proxy does not affect your right
to vote in person in the event you attend the Special Meeting. You may revoke
the proxy at any time prior to its exercise in the manner described in the Proxy
Statement/Prospectus.
The Special Meeting may be postponed or adjourned from time to time without
any notice other than by announcement at the Special Meeting of any
postponements or adjournments thereof, and any and all business for which notice
is hereby given may be transacted at such postponed or adjourned Special
Meeting.
THE AFFIRMATIVE VOTE OF THE HOLDERS OF AT LEAST A MAJORITY OF THE
OUTSTANDING SHARES OF THE COMPANY COMMON STOCK IS REQUIRED FOR APPROVAL OF THE
MERGER AGREEMENT. YOUR VOTE IS IMPORTANT REGARDLESS OF THE NUMBER OF SHARES YOU
OWN.
Shareholders are invited to attend the Special Meeting.
BY ORDER OF THE BOARD OF DIRECTORS
/s/ Andrew K. Wilson
----------------------
Andrew K. Wilson,
Chairman of the Board of Directors
West Allis, Wisconsin
January 22, 1997
PLEASE DO NOT SEND YOUR STOCK CERTIFICATES AT THIS TIME. IF THE MERGER IS
CONSUMMATED, YOU WILL BE SENT INSTRUCTIONS REGARDING THE SURRENDER OF YOUR STOCK
CERTIFICATES.
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SUBJECT TO COMPLETION - JANUARY 22, 1997
PROXY STATEMENT
CENTRA FINANCIAL, INC.
SPECIAL MEETING OF SHAREHOLDERS
------------------------------------
PROSPECTUS
ASSOCIATED BANC-CORP
COMMON STOCK
This Proxy Statement/Prospectus is being furnished to the shareholders of
Centra Financial, Inc., a Wisconsin corporation (the "Company"), in connection
with the solicitation of proxies by the Board of Directors of the Company for
use at its special meeting of shareholders (including any adjournments or
postponements thereof) to be held on February 21, 1997 (the "Special Meeting").
This Proxy Statement/Prospectus relates to the proposed merger (the "Merger") of
the Company with and into Associated Banc-Corp, a Wisconsin corporation
("Associated"), pursuant to the Agreement and Plan of Merger dated as of
November 6, 1996, (the "Merger Agreement"), a copy of which is attached hereto
as Exhibit A. FOR A MORE COMPLETE DESCRIPTION OF THE MERGER, THE MERGER
AGREEMENT AND CERTAIN RISK FACTORS ASSOCIATED THEREWITH, SEE "RISK FACTORS" (AT
PAGE 13) AND "CERTAIN PROVISIONS OF THE MERGER AGREEMENT."
YOUR BOARD RECOMMENDS THAT THE COMPANY SHAREHOLDERS VOTE TO APPROVE THE
MERGER AGREEMENT.
This Proxy Statement/Prospectus constitutes a prospectus of Associated with
respect to shares of Associated Common Stock, par value $.01 per share
("Associated Common Stock") issuable to holders of the Company Common Stock, par
value $1.00 per share ("Company Common Stock") pursuant to the Merger Agreement.
Pursuant to the Merger Agreement, each of the outstanding shares of the Company
Common Stock will be converted into the number of shares of Associated Common
Stock which is equal to 14,400,000 divided by the "Daily Average Price," divided
by the number of shares of Company Common Stock issued and outstanding
immediately prior to the Effective Time. The number of shares of Associated
Common Stock into which each share of Company Common Stock shall be converted
will not be less than two, and if the Daily Average Price is lower than $35,
Associated and the Company will make a good faith effort to promptly renegotiate
the conversion ratio. The Daily Average Price will equal the average of the
closing prices of a share of Associated Common Stock during the ten trading days
ending three business days prior to the Effective Time. See "The
Merger -- Merger Consideration."
This Proxy Statement/Prospectus and the accompanying proxy materials are
first being mailed to shareholders on or about January 22, 1997.
Associated Common Stock trades on the Nasdaq National Market under the
symbol ASBC. The closing price of Associated Common Stock on the Nasdaq National
Market on January 17, 1997 was $42.00.
------------------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------------------
THE DATE OF THIS PROXY STATEMENT/PROSPECTUS IS JANUARY 22, 1997
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NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY REPRESENTATION
OTHER THAN THOSE CONTAINED OR INCORPORATED IN THIS PROXY STATEMENT/PROSPECTUS,
AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY ASSOCIATED OR THE COMPANY. THIS PROXY
STATEMENT/PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO EXCHANGE OR SELL, OR A
SOLICITATION OF AN OFFER TO EXCHANGE OR PURCHASE, THE SECURITIES OFFERED BY THIS
PROXY STATEMENT/PROSPECTUS, OR THE SOLICITATION OF A PROXY, IN ANY JURISDICTION
IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR TO OR FROM ANY PERSON
TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. THE INFORMATION
CONTAINED IN THIS PROXY STATEMENT/PROSPECTUS SPEAKS AS OF THE DATE HEREOF UNLESS
OTHERWISE SPECIFICALLY INDICATED. INFORMATION CONTAINED IN THIS PROXY
STATEMENT/PROSPECTUS REGARDING ASSOCIATED HAS BEEN FURNISHED BY ASSOCIATED, AND
INFORMATION HEREIN REGARDING THE COMPANY HAS BEEN FURNISHED BY THE COMPANY.
AVAILABLE INFORMATION
Associated is subject to the informational reporting requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference room of the Commission, 450 Fifth Street, N.W., Room 1024, Washington,
D.C. 20549, and copies of such materials can be obtained by mail from the Public
Reference Section of the Commission, 450 Fifth Street, N.W., Room 1024,
Washington, D.C. 20549, at prescribed rates. In addition, copies of such
materials are available for inspection and reproduction at the public reference
facilities of the Commission at its New York regional office, 7 World Trade
Center, Suite 1300, New York, New York 10048 and at its Chicago regional office,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. In addition,
the Commission maintains a Web site which contains reports, proxy and
information statements and other information regarding registrants, such as
Associated, that file electronically with the Commission. The address of this
Web site is http://www.sec.gov. The principal market on which Associated Common
Stock is traded, under the symbol "ASBC," is the Nasdaq National Market.
Material filed by Associated with the Commission can also be inspected at the
offices of the National Association of Securities Dealers, Inc., Reports
Section, 1735 K Street, N.W., Washington, D.C. 20006 ("NASD").
Associated has filed with the Commission a Registration Statement on Form
S-4 (together with any amendments thereto, the "Registration Statement") under
the Securities Act of 1933, as amended (the "Securities Act"), relating to the
Associated Common Stock to be issued pursuant to the Merger Agreement. This
Proxy Statement/Prospectus does not contain all the information set forth in the
Registration Statement and the exhibits thereto. Such additional information may
be obtained from the Commission's principal office in Washington, D.C.
Statements contained in this Proxy Statement or in any document incorporated in
this Proxy Statement/Prospectus by reference as to the contents of any contract
or other document referred to herein or therein are not necessarily complete,
and in each instance reference is made to the copy of such contract or other
document filed as an exhibit to the Registration Statement or such other
documents, each such statement being qualified in all respects by such
reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents previously filed with the Commission by Associated
(File No. 0-5519) pursuant to Section 13 of the Exchange Act are hereby
incorporated by reference in this Proxy Statement/Prospectus:
(1) Associated's Annual Report on Form 10-K for the fiscal year ended
December 31, 1995, as amended by Form 10-K/A filed with the Commission
on April 25, 1996;
(2) Associated's Quarterly Report on Form 10-Q for the fiscal quarter ended
March 31, 1996;
(3) Associated's Quarterly Report on Form 10-Q for the fiscal quarter ended
June 30, 1996, as amended by Form 10-Q/A filed with the Commission on
August 16, 1996;
2
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(4) Associated's Quarterly Report on Form 10-Q for the fiscal quarter ended
September 30, 1996, as amended by Form 10-Q/A filed with the Commission
on November 15, 1996; and
(5) The description of the Associated Common Stock set forth in
Associated's Registration Statement pursuant to Section 12 of the
Exchange Act, and any amendment or report filed for the purpose of
updating any such description.
In addition, all documents subsequently filed by Associated pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date hereof and
prior to the date of the Special Meeting are hereby deemed to be incorporated by
reference in this Proxy Statement/Prospectus and to be a part hereof from the
dates of filing of such documents or reports. Any statements contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Proxy
Statement/Prospectus to the extent that a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Proxy Statement/Prospectus.
THIS PROXY STATEMENT/PROSPECTUS INCORPORATES BY REFERENCE DOCUMENTS WHICH
ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF THESE DOCUMENTS (OTHER
THAN EXHIBITS THERETO, UNLESS SUCH EXHIBITS ARE SPECIFICALLY INCORPORATED BY
REFERENCE INTO SUCH INCORPORATED DOCUMENTS) ARE AVAILABLE WITHOUT CHARGE TO ANY
PERSON, INCLUDING ANY BENEFICIAL OWNER, TO WHOM THIS PROXY STATEMENT/PROSPECTUS
IS DELIVERED, UPON WRITTEN OR ORAL REQUEST TO ASSOCIATED BANC-CORP, 112 NORTH
ADAMS STREET, P.O. BOX 13307, GREEN BAY, WISCONSIN 54307-3307 (TELEPHONE NUMBER
(414) 433-3166), ATTENTION: BRIAN R. BODAGER, ESQ., GENERAL COUNSEL & SECRETARY.
IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS PRIOR TO THE SPECIAL
MEETING, REQUESTS SHOULD BE MADE BY FEBRUARY 10, 1997. PERSONS REQUESTING COPIES
OF EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED BY
REFERENCE IN SUCH DOCUMENTS WILL BE CHARGED THE COSTS OF REPRODUCTION AND
MAILING.
3
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CENTRA FINANCIAL, INC.
AND
ASSOCIATED BANC-CORP
PROXY STATEMENT/PROSPECTUS
TABLE OF CONTENTS
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AVAILABLE INFORMATION................................................................. 2
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE....................................... 2
PROSPECTUS SUMMARY.................................................................... 6
The Companies....................................................................... 6
The Merger.......................................................................... 6
Status of Associated Common Stock................................................... 6
The Special Meeting................................................................. 7
Required Vote....................................................................... 7
Reasons for the Merger.............................................................. 7
Recommendation of the Company's Board of Directors.................................. 7
Conditions to the Merger............................................................ 7
Termination......................................................................... 8
Regulatory Approvals Required....................................................... 9
Certain Material Federal Income Tax Consequences.................................... 9
Anticipated Accounting Treatment.................................................... 9
Dissenting Shareholders' Rights..................................................... 9
Risk Factors........................................................................ 9
Interests of Certain Persons in the Merger.......................................... 9
SELECTED FINANCIAL DATA OF ASSOCIATED BANC-CORP AND THE COMPANY....................... 10
COMPARATIVE STOCK PRICES AND DIVIDENDS................................................ 11
Associated Common Stock............................................................. 11
The Company Common Stock............................................................ 11
COMPARATIVE UNAUDITED PER SHARE DATA.................................................. 11
RECENT DEVELOPMENTS................................................................... 12
RISK FACTORS.......................................................................... 13
INTRODUCTION.......................................................................... 14
ASSOCIATED BANC-CORP.................................................................. 14
THE SPECIAL MEETING................................................................... 14
Matters to Be Considered at the Special Meeting..................................... 14
Required Vote....................................................................... 14
Voting of Proxies................................................................... 15
Revocability of Proxies............................................................. 15
Record Date; Stock Entitled to Vote; Quorum......................................... 15
Solicitation of Proxies............................................................. 15
THE MERGER............................................................................ 15
Background of the Merger............................................................ 16
Reasons for the Merger.............................................................. 18
Recommendations of the Board of Directors of the Company............................ 19
Merger Consideration................................................................ 19
Regulatory Approvals Required....................................................... 20
The Effective Time.................................................................. 21
Conversion of Shares; Procedures for Exchange of Certificates; Fractional Shares.... 21
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Description of Associated Common Stock Issuable in the Merger....................... 23
Comparison of Shareholder Rights.................................................... 24
Authorized Capital Stock......................................................... 24
Appraisal Rights and Dissenters' Rights.......................................... 24
Required Vote.................................................................... 24
Classified Board of Directors.................................................... 25
Removal of Directors for "Cause"................................................. 25
Newly Created Directorships and Vacancies on the Board of Directors.............. 25
Certain Business Combinations.................................................... 26
Advance Notice of Proposals to Be Brought at the Annual Meeting.................. 26
Advance Notice of Nominations of Directors....................................... 26
Resale of Associated Common Stock Issued Pursuant to the Merger..................... 27
Pre-Merger Dividend Policy.......................................................... 27
Post-Merger Dividend Policy......................................................... 27
Conduct of Business Pending the Merger.............................................. 27
Certain Material Federal Income Tax Consequences.................................... 27
Anticipated Accounting Treatment.................................................... 28
Dissenters' Rights.................................................................. 29
Interests of Certain Persons in the Merger.......................................... 30
Other Related Party Transactions.................................................... 30
Management After the Merger......................................................... 30
CERTAIN PROVISIONS OF THE MERGER AGREEMENT............................................ 31
The Merger.......................................................................... 31
Representations and Warranties...................................................... 31
Certain Covenants................................................................... 31
No Solicitation of Transactions..................................................... 33
Conditions to Consummation of the Merger............................................ 33
Termination......................................................................... 34
Amendment and Waiver................................................................ 35
Expenses............................................................................ 35
CERTAIN INFORMATION CONCERNING ASSOCIATED............................................. 35
CERTAIN INFORMATION CONCERNING THE COMPANY............................................ 36
Ownership of the Company Common Stock............................................... 37
EXPERTS............................................................................... 37
LEGAL OPINIONS........................................................................ 38
SHAREHOLDER PROPOSALS................................................................. 38
Exhibit A: Agreement and Plan of Merger among Associated Banc-Corp
and Centra Financial, Inc. dated as of November 6, 1996................. A-1
Exhibit B: Subchapter XIII of the Wisconsin Business Corporation Law.................. B-1
Exhibit C: Centra Financial, Inc. and Subsidiaries Financial Statements and
Management's Discussion and Analysis of Financial Condition
and Results of Operations............................................... C-1
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5
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PROSPECTUS SUMMARY
The following is a summary of certain information contained elsewhere in
this Proxy Statement/Prospectus and is not intended to be complete. All
information concerning Associated included in this Proxy Statement/Prospectus
has been provided by Associated, and all information concerning the Company has
been provided by the Company. Reference is made to, and this summary is
qualified in its entirety by, the more detailed information contained or
incorporated by reference in this Proxy Statement/Prospectus and the Exhibits
attached hereto. Shareholders are urged to read this Proxy Statement/Prospectus
and the Exhibits attached hereto in their entirety. Cross-references in this
summary are to captions in this Proxy Statement/Prospectus.
THE COMPANIES:............. Associated. Associated Banc-Corp ("Associated") is
a diversified multi-bank holding company which owns
11 commercial banks located in Wisconsin and
Illinois. As of September 30, 1996, Associated had
total assets of $4.3 billion. Associated Common
Stock trades on the Nasdaq National Market. The
principal executive offices of Associated are
located at 112 North Adams Street, P.O. Box 13307,
Green Bay, Wisconsin 54307-3307 and its telephone
number is (414) 433-3166. See "Certain Information
Concerning Associated."
Centra Financial, Inc. (the "Company") is a
one-bank holding company which owns 100% of the
stock of the Central Bank of West Allis (the
"Bank"). The Bank has one wholly-owned subsidiary,
Central Investment, Inc. ("Central"). As of
September 30, 1996 the Company had total assets of
$79.6 million. The principal executive offices of
the Company are located at 10701 West National
Avenue, West Allis, Wisconsin 53227 and its
telephone number is 414-321-2000. See "Certain
Information Concerning the Company."
THE MERGER:................ Following the approval of the Merger Agreement by
the shareholders of the Company and the
satisfaction or waiver of the other conditions to
the Merger, the Company will be merged with and
into Associated, and each outstanding share of the
Company Common Stock will be converted into the
right to receive the number of shares of Associated
Common Stock which is equal to 14,400,000 divided
by the "Daily Average Price," divided by the number
of shares of Company Common Stock issued and
outstanding immediately prior to the Effective Time
(the "Exchange Ratio"). The number of shares of
Associated Common Stock into which each share of
Company Common Stock shall be converted will not be
less than two, and if the Daily Average Price is
lower than $35, Associated and the Company will
make a good faith effort to promptly renegotiate
the Exchange Ratio. The Daily Average Price will
equal the average of the closing prices of a share
of Associated Common Stock during the ten trading
days ending three business days prior to the
Effective Time. The Merger will be effective on the
date the Articles of Merger are filed with the
Department of Financial Institutions of the State
of Wisconsin (the "Effective Time"). At the
Effective Time, the Company will be merged with and
into Associated and will not continue its separate
existence or operations, to which Associated as the
surviving corporation will succeed. See "The
Merger -- The Effective Time."
STATUS OF ASSOCIATED COMMON
STOCK:..................... Other than shares of Associated Common Stock issued
to "affiliates" of the Company (as defined under
the federal securities laws), shares of Associated
Common Stock will be freely tradeable. The Company
has concluded that the only affiliates of the
Company are its directors and
6
<PAGE> 13
elected officers. See "The Merger -- Resale of
Associated Common Stock Issuable in the Merger."
THE SPECIAL MEETING:....... A Special Meeting of the Shareholders of the
Company will be held on February 21, 1997 at 10:00
a.m. at the Midway Hotel, 1005 S. Moorland Road,
Brookfield, Wisconsin (the "Special Meeting"). At
the Special Meeting, holders of the Company Common
Stock entitled to vote at the meeting will consider
and vote upon a proposal to approve the Merger
Agreement. Shareholders of Associated are not
required to approve the Merger Agreement. See "The
Merger" and "Certain Provisions of the Merger
Agreement." The record date for the Special Meeting
is January 20, 1997 (the "Record Date").
REQUIRED VOTE:............. The affirmative vote of the holders of a majority
of the outstanding shares of the Company Common
Stock entitled to vote at the Special Meeting is
required to approve the Merger Agreement under the
Wisconsin Business Corporation Law (the "WBCL").
REASONS FOR THE MERGER:.... The Board of Directors of the Company believes that
the Merger will have a positive impact on the
customers and employees of the Company by providing
overall additional financial strength to the
banking business of the Bank. Shareholders of the
Company will benefit as a result of the enhanced
liquidity, marketability and dividend paying
capacity of the Associated Common Stock to be
received in the Merger. The Board of Directors of
Associated believes the Merger will enable
Associated to increase its presence and heighten
its visibility in South Eastern Wisconsin. See "The
Merger -- Reasons for the Merger."
RECOMMENDATION OF THE
COMPANY'S BOARD OF
DIRECTORS:................. The Board of Directors of the Company, after
consideration of the terms and conditions of the
Merger Agreement and other factors deemed relevant
by the Board of Directors, believes that the Merger
and the Exchange Ratio are fair to and in the best
interests of the shareholders of the Company. The
Board of Directors of the Company has approved the
Merger Agreement and the transactions contemplated
thereby. See "The Merger -- Background of the
Merger," "-- Reasons for the Merger" and
"-- Recommendations of the Board of Directors of
the Company."
CONDITIONS TO THE
MERGER:.................... The obligations of Associated and the Company to
consummate the Merger are subject to various
conditions, including, among other things,
obtaining requisite shareholder and regulatory
approvals, the absence of any materially burdensome
restriction or condition imposed in connection with
obtaining such regulatory approvals and receipt of
an opinion of independent counsel to Associated at
the closing of the Merger in respect of certain
federal income tax consequences of the Merger.
Furthermore, the obligation of Associated to
consummate the Merger is subject to various
conditions, including, among other things, receipt
of an opinion from the independent public
accountants of Associated that the Merger qualifies
for "pooling of interests" accounting treatment,
that the aggregate of (i) the fractional shares of
Associated Common Stock paid in cash and (ii) the
number of shares of Associated Common Stock that is
not issued in the Merger due to the exercise of
dissenters' rights, shall not be more than 10% of
the shares of Associated Common Stock which would
otherwise have been issued pursuant to the Merger,
receipt by Associated of a written environmental
evaluation by Associated's envi-
7
<PAGE> 14
ronmental consultant of the Company's real property
stating that the Company's property complies with
environmental laws and that there are no material
contingent liabilities or that the Company shall
have taken reasonably appropriate action in
response to any environmental condition identified
by Associated's environmental consultant, and that
the Company's consolidated after-tax earnings for
the three-month period ending December 31, 1996
(with certain adjustments) shall be at least
$200,000. See "Certain Provisions of the Merger
Agreement -- Conditions to Consummation of the
Merger."
TERMINATION:............... The Merger Agreement may be terminated by the
applicable Board of Directors at any time prior to
the Effective Time (whether before or after
approval of the Merger by the shareholders of the
Company): (i) by mutual consent of Associated and
the Company; (ii) by Associated or the Company if
there has been a breach by the other party in any
material respect of any representation, warranty,
covenant or agreement in the Merger Agreement, or
if any representation or warranty of the Company or
Associated shall be discovered to have become
untrue in any material respect, in either case
which breach has not been cured within 10 business
days following receipt by the non-terminating party
of notice of such breach; (iii) by Associated or
the Company if any permanent injunction preventing
the consummation of the Merger shall have become
final and nonappealable; (iv) by Associated or the
Company if the Merger shall not have been
consummated before March 31, 1997 for a reason
other than the failure of the terminating party to
comply with its obligations under the Merger
Agreement; (v) by Associated or the Company if the
Board of Governors of the Federal Reserve System
(the "Federal Reserve Board") or the Department of
Financial Institutions of the State of Wisconsin
(the "Wisconsin Commissioner") has denied approval
of the Merger, and neither Associated nor the
Company has, within 30 days after the entry of such
order, filed a petition seeking review of such
order as provided by applicable law; (vi) subject
to renegotiation of the Exchange Ratio, by either
Associated or the Company if the Daily Average
Price is lower than $35; (vii) by Associated if the
Company fails to take reasonably appropriate action
in response to any environmental condition
identified by Associated's environmental
consultant; or (viii) by Associated if the
aggregate of the fractional shares of Associated
Common Stock paid in cash and the number of shares
of Associated Common Stock that are not issued in
the Merger due to the exercise of dissenters'
rights exceeds 10% of the shares of Associated
Common Stock which would otherwise have been issued
pursuant to the Merger.
In the event the Merger Agreement is terminated
directly or indirectly as a result of (i) the
withdrawal, modification or amendment by the Board
of Directors of the Company of its approval or
recommendation of the Merger or (ii) the Company
violates its agreement to not initiate, solicit or
encourage actions which may result in a "Competing
Transaction," as such term is defined in the Merger
Agreement, the Company has agreed to pay Associated
$144,000. See "Certain Provisions of the Merger
Agreement -- Termination and -- No Solicitation of
Transactions."
8
<PAGE> 15
REGULATORY APPROVALS
REQUIRED: The Merger is subject to prior approval by the
Federal Reserve Board and the Wisconsin
Commissioner. See "The Merger -- Regulatory
Approvals Required."
CERTAIN MATERIAL FEDERAL
INCOME TAX CONSEQUENCES:... The Merger is conditioned upon Associated and the
Company receiving an opinion of independent counsel
to Associated, subject to customary assumptions and
representations, to the effect that the Merger will
be a tax-free reorganization for federal income tax
purposes. Such opinion, however, is not binding on
the Internal Revenue Service. In the event that the
Merger qualifies as a tax-free reorganization, no
gain or loss will be recognized by holders of the
Company Common Stock upon conversion of their
shares of stock into shares of Associated Common
Stock, except to the extent they receive cash in
lieu of fractional share interests of Associated
Common Stock, and no gain or loss will be
recognized by Associated or the Company. See "The
Merger -- Certain Material Federal Income Tax
Consequences."
ANTICIPATED ACCOUNTING
TREATMENT:................. The Merger is expected to qualify as a "pooling of
interests" for accounting and financial reporting
purposes. The receipt of an opinion from KPMG Peat
Marwick LLP, the independent public accountants of
Associated, confirming that the Merger will qualify
for "pooling of interests" accounting treatment is
a condition to consummation of the Merger. See "The
Merger -- Anticipated Accounting Treatment."
DISSENTING SHAREHOLDERS'
RIGHTS: Holders of Company Common Stock who comply with the
procedural requirements of the WBCL will have
appraisal rights in connection with the Merger.
Pursuant to Section 180.1302(1) of the WBCL,
holders of shares of stock entitled to notice of a
shareholders' meeting at which shareholders are to
vote on a merger are provided, subject to certain
procedural requirements, with statutory rights of
appraisal pursuant to which such shareholders may
be entitled to receive cash in the amount of the
fair value of their shares (as determined pursuant
to the WBCL) instead of the shares or cash offered
pursuant to the merger. See "The Merger --
Dissenters' Rights" and Exhibit B hereto.
RISK FACTORS:.............. In deciding whether to vote in favor of the Merger
Agreement, shareholders of the Company should
carefully evaluate the matters set forth in the
section herein entitled "Risk Factors."
Shareholders of the Company should consider the
lack of audited consolidated financial statements
and certain bank holding company financial data
relating to the Company and the changing
legislative and regulatory environment affecting
the banking and the financial services businesses
in which Associated and the Company engage.
INTERESTS OF CERTAIN
PERSONS IN THE MERGER:..... Associated (through the Bank as employer) has
agreed to succeed to the Company's obligations with
respect to employment and/or separation agreements
with each of Messrs. Richard A. Woodcock, Andrew N.
Spencer, Paul O. Olm, Ronald W. Koeppl, and Ms.
Arlene Stockinger commencing at the Effective Time.
See "The Merger -- Interests of Certain Persons in
the Merger."
9
<PAGE> 16
SELECTED FINANCIAL DATA
OF ASSOCIATED BANC-CORP AND THE COMPANY
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
The following table sets forth selected historical data as of and for each
of the years in the five year period ended December 31, 1995 derived from the
audited consolidated financial statements of Associated, including the
respective notes thereto, incorporated by reference to this Proxy
Statement/Prospectus, which should be read in conjunction therewith. See
"Incorporation of Certain Documents by Reference." The Company's selected
historical data as of and for each of the years in the three year period ended
December 31, 1995, are derived from the unaudited consolidated financial
statements of the Company attached hereto as Exhibit C. The selected historical
data as of and for the nine months ended September 30, 1995 and 1996 are derived
from the unaudited consolidated financial statements of Associated and the
Company incorporated herein by reference and attached hereto as Exhibit C,
respectively. In the opinion of their respective managements, the accompanying
unaudited consolidated financial statements contain all adjustments necessary to
present fairly Associated's and the Company's financial position and results of
operations for the periods presented. All adjustments necessary to the fair
presentation of the financial statements are of a normal recurring nature.
Results for the nine months ended September 30, 1996 are not necessarily
indicative of the results which may be expected for the year as a whole.
<TABLE>
<CAPTION>
AS OF AND FOR THE
NINE MONTHS AS OF AND FOR THE YEAR
ENDED SEPTEMBER 30, ENDED DECEMBER 31,
----------------------- --------------------------------------------------------------
1996 1995 1995 1994 1993 1992 1991
---------- ---------- ---------- ---------- ---------- ---------- ----------
(UNAUDITED)
<S> <C> <C> <C> <C> <C> <C> <C>
ASSOCIATED(1):
CONDENSED STATEMENT OF INCOME:
Interest Income...................... $ 231,361 $ 206,632 $ 279,378 $ 231,861 $ 219,556 $ 237,828 $ 257,769
Interest Expense..................... 106,240 92,227 125,099 88,513 85,094 108,477 141,996
Less: Provision for Possible
Losses............................. 3,055 2,403 4,291 2,211 5,871 10,707 21,771
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net Interest Income After Provision
for Possible Loan Losses........... 122,066 112,002 149,988 141,137 128,591 118,644 94,002
Plus: Non-Interest Income............ 47,473 40,887 55,350 50,861 50,955 49,073 42,221
Less: Non-Interest Expense........... 104,147 97,141 130,033 124,943 121,354 120,913 113,700
---------- ---------- ---------- ---------- ---------- ---------- ----------
Net Non-Interest Expense............. 56,674 56,254 74,683 74,082 70,399 71,840 71,479
Net Income........................... $ 42,182 $ 35,807 $ 48,028 $ 43,568 $ 38,572 $ 33,118 $ 14,052
========== ========== ========== ========== ========== ========== ==========
PER COMMON SHARE DATA:
Net Income Per Share(2)(3)........... $ 2.30 $ 2.05 $ 2.75 $ 2.50 $ 2.27 $ 2.00 $ 0.86
Cash Dividends Per Share(2).......... 0.85 0.70 0.97 0.85 0.74 0.61 0.57
SELECTED BALANCE SHEET DATA:
Total Assets......................... $4,282,295 $3,750,907 $3,922,501 $3,628,701 $3,266,693 $3,246,019 $3,177,034
Long-Term Borrowings................. 21,863 22,810 22,064 8,819 12,848 19,706 39,841
THE COMPANY(4): (UNAUDITED)
CONDENSED STATEMENT OF INCOME:
Interest Income...................... $ 4,231 $ 4,239 $ 5,681 $ 5,070 $ 5,085
Interest Expense..................... 1,764 1,648 2,259 1,727 1,798
Less: Provision for Loan Losses...... -- -- -- -- 77
---------- ---------- ---------- ---------- ----------
Net Interest Income After Provision
for Loan Losses.................... 2,467 2,591 3,422 3,343 3,210
Plus: Non-Interest Income............ 244 295 382 438 403
Less: Non-Interest Expense........... 1,929 2,232 2,785 2,568 2,625
---------- ---------- ---------- ---------- ----------
Net Non-Interest Expense............. 1,685 1,937 2,403 2,130 2,222
Net Income........................... $ 554 $ 493 $ 776 $ 891 $ 800
========== ========== ========== ========== ==========
PER COMMON SHARE DATA:
Net Income Per Share(3).............. $ 3.21 $ 2.86 $ 4.50 $ 5.16 $ 4.62
Cash Dividends Per Share............. .75 .25 .92 .90 .85
SELECTED BALANCE SHEET DATA:
Total Assets......................... $ 79,646 $ 81,832 $ 83,493 $ 75,729 $ 75,304
Long-Term Borrowings................. -- -- -- -- --
</TABLE>
- ---------------
(1) All information presented for Associated has been restated for the merger of
Greater Columbia Bancshares, Inc. with and into a wholly-owned subsidiary of
Associated, which was accounted for as a pooling of interests, on April 5,
1996 (the "GCB Acquisition").
(2) Per share data for Associated adjusted retroactively for the five-for-four
stock split effected as a stock dividend paid on June 15, 1995 (the "Stock
Split") and a stock dividend declared in 1993.
(3) Earnings per share are calculated based upon the weighted average shares
outstanding.
(4) Information for the Company is not available for 1992 and 1991.
10
<PAGE> 17
COMPARATIVE STOCK PRICES AND DIVIDENDS
ASSOCIATED COMMON STOCK
Associated Common Stock trades on the Nasdaq National Market. The following
table sets forth, for the periods indicated, the high and low sales prices per
share as reported on the Nasdaq National Market and the regular cash dividends
declared for Associated Common Stock as adjusted to reflect the Stock Split.
<TABLE>
<CAPTION>
ASSOCIATED COMMON STOCK
------------------------------
HIGH LOW DIVIDEND
------ ------ --------
<S> <C> <C> <C>
1994
First Quarter.................................. $28.80 $25.00 $ 0.20
Second Quarter................................. $30.60 $25.00 $ 0.22
Third Quarter.................................. $30.20 $28.00 $ 0.22
Fourth Quarter................................. $28.40 $25.00 $ 0.22
1995
First Quarter.................................. $30.10 $27.40 $ 0.22
Second Quarter................................. $31.00 $28.40 $ 0.22
Third Quarter.................................. $37.25 $30.38 $ 0.27
Fourth Quarter................................. $40.94 $36.25 $ 0.27
1996
First Quarter.................................. $39.50 $35.25 $ 0.27
Second Quarter................................. $39.50 $37.50 $ 0.29
Third Quarter.................................. $40.38 $38.25 $ 0.29
</TABLE>
On November 5, 1996, the last trading day before the announcement of the
Merger Agreement, the last sale price of Associated Common Stock as reported on
the Nasdaq National Market was $40.88 per share. On January 17, 1997, the last
sale price of Associated Common Stock as reported on the Nasdaq National Market
was $42.00 per share. Shareholders are urged to obtain current market prices for
Associated Common Stock.
On the Record Date, there were approximately 5,000 holders of record of
Associated Common Stock.
THE COMPANY COMMON STOCK
The Company Common Stock is not listed on any exchange nor quoted in the
over-the-counter market, and no established "bid" or "ask" price is available.
In the opinion of the Company, due to the lack of an active market for shares of
the Company Common Stock, transactions in Company Common Stock of which the
Company is aware are not frequent enough to constitute representative prices.
The last sale of Company Common Stock of which the Company is aware was at
$35.00 per share on March 18, 1996.
The Board of Directors of the Company declared dividends during the nine
months ended September 30, 1996 and the years ended December 31, 1995 and 1994
of $0.75, $0.92 and $0.90 per share, respectively. Pursuant to the Merger
Agreement, the ability of the Company to pay dividends on the Company Common
Stock prior to the Effective Time has been restricted. See "The
Merger -- Pre-Merger Dividend Policy."
On the Record Date, there were 219 holders of record of the Company Common
Stock.
COMPARATIVE UNAUDITED PER SHARE DATA
The following table sets forth for Associated Common Stock and Company
Common Stock unaudited historical, pro forma and pro forma equivalent per share
financial information as of and for the nine months ended September 30, 1996 and
each of the years in the three year period ended December 31, 1995. The
following data assumes that each outstanding share of Company Common Stock will
be converted into two shares of Associated Common Stock, based upon an assumed
Daily Average Price of $41.9875 (based on the average closing price of
Associated Common Stock for the ten trading day period ending January 17, 1997).
11
<PAGE> 18
The information presented herein should be read in conjunction with the audited
consolidated financial statements of Associated for the years ended December 31,
1995, 1994 and 1993 and the unaudited consolidated financial statements for the
nine months ended September 30, 1996, incorporated by reference into this Proxy
Statement/Prospectus and the unaudited consolidated financial statements of the
Company, including the notes thereto, attached hereto as Exhibit C. See
"Incorporation of Certain Documents By Reference."
<TABLE>
<CAPTION>
AS OF AND FOR THE AS OF AND FOR THE YEAR ENDED
NINE MONTHS DECEMBER 31,
ENDED SEPTEMBER 30, ----------------------------
1996 1995 1994 1993
------------------- ------ ------ ------
<S> <C> <C> <C> <C>
ASSOCIATED
Net Income Per Common Share (1):
Historical................................. $ 2.30 $ 2.75 $ 2.50 $ 2.27
Pro forma (2).............................. 2.28 2.74 2.50 2.27
Dividends Per Common Share (1):
Historical................................. $ .85 $ .97 $ .85 $ .74
Pro forma (3).............................. .85 .97 .85 .74
Book Value Per Common Share:
Historical................................. $ 20.77 $19.46 $17.14 $16.38
Pro forma (2).............................. 20.83 19.32 20.62 19.39
THE COMPANY
Net Income Per Common Share:
Historical................................. $ 3.21 $ 4.50 $ 5.16 $ 4.62
Pro forma equivalent (4)................... 4.56 5.48 5.00 4.54
Dividends Per Common Share:
Historical................................. $ .75 $ .92 $ .90 $ .85
Pro forma equivalent (4)................... 1.70 1.94 1.70 1.48
Book Value Per Common Share:
Historical................................. $ 48.02 $47.58 $43.27 $39.01
Pro forma equivalent (4)................... 41.66 38.64 41.24 38.78
</TABLE>
- ---------------
(1) Per share data for the applicable period adjusted retroactively for the
acquisition of Greater Columbia Bancshares, Inc. Earnings per share are
calculated based upon the weighted average shares outstanding.
(2) The Associated pro forma per share amounts give effect to the Merger.
(3) The Associated pro forma dividends per share amounts represent historical
dividends of Associated as adjusted retroactively for the Stock Split.
(4) The Company pro forma equivalent per share amounts are calculated by
multiplying the Associated pro forma per share amounts by the assumed
Exchange Ratio of two shares.
RECENT DEVELOPMENTS
During the fourth quarter of 1996, the Company is expected to record
certain expenses in connection with the following transactions: the Company
entered into Separation Agreements with two individuals for a total cost of
$462,000; the Company will increase its provision for possible loan losses in
the amount of $442,000 (partially due to fourth quarter deterioration and
subsequent write off of one loan in the amount of approximately $242,000); the
Company will sell a derivative security that failed the high risk tests for an
estimated loss of $92,000; and the Company incurred additional costs in
connection with the Merger in the amount of $111,000.
12
<PAGE> 19
RISK FACTORS
In deciding whether to vote in favor of the Merger, the Company
shareholders should consider the following factors, in addition to the other
matters set forth herein:
Unaudited Financial Statements and Omitted Industry Financial
Information. This Proxy Statement/Prospectus contains unaudited consolidated
financial statements of the Company. In the absence of an audit, there is no
positive assurance that the financial statements are fairly presented in
accordance with generally accepted accounting principles. Associated and the
Company have concluded that it would not be practicable to obtain an audit of
the financial statements attached hereto as Exhibit C. In addition, certain
financial disclosures required of bank holding companies under rules promulgated
by the Commission have not been included in the Company's Management's
Discussion and Analysis of Financial Condition attached hereto as Exhibit C.
Omitted industry financial information relates to, among other things, certain
disclosures as to the Bank's investments and deposits. Associated and the
Company have determined that as the Company has not been required to make such
disclosures in the past to its shareholders, it has not compiled and would be
unable to create such financial information from existing financial records
without incurring considerable expense, effort and delay. Accordingly, it is the
determination of Associated and the Company that the lack of audited
consolidated financial statements and the omission of certain bank holding
company financial disclosure is not material to the shareholders of the Company.
Uncertain Legislative and Regulatory Environment. The banking and financial
services businesses in which the Company and Associated engage are highly
regulated. The laws and regulations affecting such businesses may be changed
dramatically in the near future. Such changes could affect the ability of banks
to engage in nationwide branch banking and the ability of bank holding companies
to engage in non-banking businesses, such as securities underwriting and
insurance, in which they have been allowed to engage only on a limited basis.
Such changes may also affect the capital that banks and bank holding companies
are required to maintain, the premiums paid for or the availability of deposit
insurance or other matters directly affecting earnings. Neither the Company nor
Associated can predict what changes will occur or the effect that any such
changes would have on the ability of the combined entity to compete effectively
or to take advantage of new opportunities after the Merger.
Competition. The markets in which the Company and Associated operate are
highly competitive. Competition in such markets is likely to increase in light
of the changing legislative and regulatory environment in which the Company and
Associated operate. In addition, consolidation and mergers in the banking
industry are expected to continue, resulting in stronger and more effective
competitors. Neither the Company nor Associated can predict the degree to which
competition in the industry will increase in the future or the effect any such
increased competition will have on the combined entity.
Rapid Technological Changes. Evolving technology will play a major role in
the processing and delivery of financial services. The effective use of new
technology will enable banking and financial service businesses to improve
information concerning their customers and markets. It will also enable them to
reduce overhead expenses while improving the quality of service to customers.
Communications technology will substantially improve the ability of financial
institutions to exchange information with their customers and employees. Banks
and financial institutions that are unwilling or unable to access this evolving
new technology could experience lower earnings and a loss of competitiveness.
Uncertain Economic Environment. Until recently, banks and financial service
companies in the Midwest have experienced a relatively long period of price
stability and a growing economy. Price stability enables banks to better protect
themselves against interest rate risks. A strong economy enhances the
opportunity of the commercial sector of the economy to improve earnings and
performance. It also provides an environment for financial institutions to
experience positive and profitable growth. Recent economic changes present
additional risks for all banks and financial service companies.
Nature of Business. The financial performance of the Company results
primarily from its retail banking activities located in the City of West Allis,
Wisconsin and surrounding markets in South Eastern Wisconsin. Company
shareholders who receive shares of Associated Common Stock will own an interest
in a diversified
13
<PAGE> 20
multi-bank holding company with 95 banking offices, substantially all of which
are located in various communities throughout Wisconsin, which is also engaged
in several non-banking businesses including personal property lease financing,
commercial and residential mortgage banking, trust services, full service
brokerage and discount brokerage services, reinsurance and general insurance
agency activities. Financial performance of Associated is accordingly dependent
on its activities and the economic factors in such markets and businesses. See
"Certain Information Concerning Associated."
Business Combinations. Associated seeks additional expansion opportunities
and accordingly may enter into business combinations with banking and
non-banking entities involving the issuance of its shares or payment of cash
consideration which may not require a vote of holders of Associated Common
Stock.
Share Price Fluctuation. The price of shares of Company Common Stock is
based upon the financial condition of the Company and the market value for
similar non-publicly traded bank holding companies and other factors. The share
price of Associated Common Stock on the Nasdaq National Market is by nature
subject to the general price fluctuations in the market for publicly-traded
equity securities. Such fluctuations are not necessarily related to a change in
the financial performance or condition of Associated.
INTRODUCTION
This Proxy Statement/Prospectus is being furnished to holders of the
Company Common Stock in connection with the solicitation of proxies by the
Company's Board of Directors for use at the Special Meeting of Shareholders of
the Company and at any adjournment or postponement thereof. The Special Meeting
will be held on February 21, 1997 at the Midway Hotel, 1005 S. Moorland Road,
Brookfield, Wisconsin. The Special Meeting will commence at 10:00 a.m.
At the Special Meeting, the shareholders of the Company will be asked to
approve the Merger Agreement attached hereto as Exhibit A, as more fully
described herein. See "The Special Meeting," The "Merger," and "Certain
Provisions of the Merger Agreement." The approximate date on which this Proxy
Statement/Prospectus is first being mailed to shareholders of the Company is on
or about January 22, 1997.
ASSOCIATED BANC-CORP
Associated is a diversified multi-bank holding company registered with the
Federal Reserve Board pursuant to the Bank Holding Company Act of 1956, as
amended (the "BHC Act"). Associated owns directly or indirectly all of the
capital stock of 11 commercial banks located in Wisconsin and Illinois, and all
of the capital stock of subsidiaries engaged in the following non-banking
businesses: personal property lease financing, commercial mortgage banking,
residential mortgage banking, trust services, full service brokerage and
discount brokerage services, reinsurance and general insurance agency
activities. As of September 30, 1996, Associated had total assets of $4.3
billion. The principal executive offices of Associated are located at 112 North
Adams Street, P.O. Box 13307, Green Bay, Wisconsin 54307-3307 and its telephone
number is (414) 433-3166. See "Certain Information Concerning Associated."
THE SPECIAL MEETING
MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING
At the Special Meeting, holders of the Company Common Stock will consider
and vote upon a proposal to approve the Merger Agreement and any other matters
that may properly come before the Special Meeting. For a detailed description of
the Merger and the Merger Agreement, see "The Merger" and "Certain Provisions of
the Merger Agreement."
REQUIRED VOTE
The affirmative vote of the holders of a majority of the outstanding shares
of the Company Common Stock entitled to vote at the Special Meeting is required
to approve the Merger Agreement. Each share of the
14
<PAGE> 21
Company Common Stock outstanding on the Record Date (as defined herein) is
entitled to one vote. Shareholders of Associated are not required to approve the
Merger Agreement and no further corporate authorization by Associated is
required to consummate the Merger.
VOTING OF PROXIES
Shares represented by all properly executed proxies for the Company Common
Stock received in time for the Special Meeting will be voted at the Special
Meeting in the manner specified by the holders thereof. Proxies which do not
contain voting instructions will be voted FOR approval of the Merger Agreement.
It is not expected that any matter other than that referred to herein will
be brought before the Special Meeting. If, however, other matters are properly
presented, the persons named as proxies will vote in accordance with their
judgment with respect to such matters.
REVOCABILITY OF PROXIES
The grant of a proxy on the enclosed form of proxy does not preclude a
shareholder from voting in person. A shareholder may revoke a proxy at any time
prior to its exercise by delivering to the Secretary of the Company a duly
executed proxy or revocation of Proxy bearing a later date or by voting in
person at the Special Meeting. Attendance at the Special Meeting will not of
itself constitute revocation of a proxy.
RECORD DATE; STOCK ENTITLED TO VOTE; QUORUM
Only holders of record of the Company Common Stock at the close of business
on January 20, 1997 (the "Record Date") will be entitled to receive notice of
and to vote at the Special Meeting.
At the Record Date, 172,652 shares of the Company Common Stock were
outstanding. Shares representing a majority of the outstanding shares of the
Company Common Stock entitled to vote must be represented in person or by proxy
at the Company Meeting in order for a quorum to be present. Abstentions will be
treated as shares that are present and entitled to vote for purposes of
determining the presence of a quorum but as unvoted for purposes of determining
the approval of the Merger Agreement. If a broker or other holder of record
indicates on the proxy that it does not have discretionary authority as to
certain shares to vote on a particular matter, those shares will not be
considered as present and entitled to vote with respect to that matter.
SOLICITATION OF PROXIES
The Company will bear the cost of the solicitation of proxies from its
shareholders, except that Associated and the Company will share equally the cost
of printing this Proxy Statement/Prospectus and all regulatory filing fees in
connection therewith. In addition to solicitation by mail, the directors,
officers and employees of the Company may solicit proxies from shareholders of
the Company by telephone or telegram, or in person, but will receive no
additional compensation for such services.
SHAREHOLDERS SHOULD NOT RETURN THEIR STOCK CERTIFICATES WITH THEIR PROXY
CARDS. AS SOON AS PRACTICABLE FOLLOWING THE EFFECTIVE TIME, THE COMPANY
SHAREHOLDERS WILL BE PROVIDED WITH MATERIALS RELATING TO THE EXCHANGE OF THEIR
STOCK CERTIFICATES. SEE "THE MERGER -- CONVERSION OF SHARES; PROCEDURES FOR
EXCHANGE OF CERTIFICATES; FRACTIONAL SHARES."
THE MERGER
This section of the Proxy Statement/Prospectus describes certain aspects of
the proposed Merger. To the extent that it relates to the Merger Agreement, the
following description does not purport to be complete and is qualified in its
entirety by reference to the Merger Agreement which is attached hereto as
Exhibit A and is incorporated herein by reference. All shareholders are urged to
read the Merger Agreement and the other exhibits to this Proxy
Statement/Prospectus in their entirety.
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BACKGROUND OF THE MERGER
The Company was organized in 1986 as a one-bank holding company and
acquired majority ownership of the Bank at that time. The remaining shares of
the Bank were acquired by the Company in 1987 and 1990. The purpose of
organizing the Company was to provide flexibility to meet industry demands and
enhance the liquidity of shareholders' investment.
Since the early 1990s, the directors of the Company began to recognize and
discuss the demands that would be placed upon the Company to remain competitive
in the banking industry in the 1990s and into the 21st Century. Increased
competition for banking services, deposits and loans continued to escalate
within the Company's market area. As a result, the directors of the Company
identified the need for significant growth and expenditures of time and
resources in the areas of marketing, technology, training and auxiliary
services, such as nontraditional banking products. The Board of Directors of the
Company identified several strategies to meet these anticipated demands,
including, but not limited to: (i) to create, purchase and implement initiatives
from within; (ii) to acquire or merge with other banks of similar size and
nature to increase the cost efficiency of implementing these initiatives and to
utilize the Company's strong capital position; and/or (iii) to be acquired by a
larger financial institution with greater resources that could be utilized to
meet these demands.
During the early and mid-1990s, the directors and officers of the Company
continued their successful efforts to remain competitive in the Bank's market by
developing in-house initiatives. These efforts produced earnings competitive
with bank holding companies of similar size and steady growth in assets and
loans. However, the directors acknowledged that ever advancing marketing,
financial products and services and technology of the evolving financial
services industry demanded implementation of even further upgrades of bank
services, training, technology and marketing.
After additional study and analysis, the directors of the Company believed
that continued internal initiatives would be insufficient to maintain the
Company's market share in future years. The acquisition of or merger with other
bank(s) of similar size and nature to achieve cost efficiency of initiatives
appeared to magnify the tasks necessary to compete in this market rather than
meet the needs identified by the directors. In addition, this option provided
minimum potential for maximization of value to shareholders. These factors,
combined with the directors' fiduciary duty to shareholders, and their concern
for employees and the communities the Company services, resulted in a decision
to pursue merger opportunities with a larger publicly-traded financial
institution as the preferred strategy.
The directors of the Company believed that the merger with a larger,
publicly-traded financial institution in a tax-free exchange of stock, appeared
to be the most effective and beneficial approach for the Company's customers,
employees and shareholders. The Board determined that affiliation with a large
organization would aid the Company in competitive, compliance and managerial
respects, as well as provide shareholders of the Company with greater liquidity
of their investment. In addition, it appeared that the window of opportunity for
organizations the size of the Company to be acquired by publicly-traded regional
financial institutions was diminishing due to the regional organizations'
apparent desire to make themselves attractive to potential acquirors. The
directors of the Company also realized that because the expenditure of time and
resources by a potential acquiror was not significantly different in acquiring
an institution the size of the Company versus an institution several times
larger than the Company, the Company's attractiveness as an acquisition
candidate would be diminished as consolidation among financial institutions
increasingly involved substantially larger institutions.
Beginning in 1995, the Board reviewed available information pertaining to
nation-wide, midwest and Wisconsin transactions to formulate acceptable price
ranges for various acquisition, merger or sale strategies. Such information
included data relating to price-to-equity, price-to-earnings and price-to-assets
ratios, categorized according to asset size, equity-to-asset ratio, return on
assets and return on equity. This information, along with the Board members'
combined experience and knowledge, helped to formulate acceptable ranges of
ratios and prices.
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A fair and reasonable price was one of the essential considerations for the
directors of the Company, but not the sole consideration. Of significant
importance were compatibility with the Company's existing and future customers
and markets, commitment to the communities served by the Company and
professional opportunities for the Company's officers and employees.
In the second quarter of 1995, as a first step, the Board solicited
expressions of interest for the purchase of the Company from eight bank holding
companies operating in Wisconsin. Thereafter, the Company's interest in
considering proposals became generally known through traditional channels in the
financial services community. As a result, the Board received three unsolicited
expressions of interest in addition to the responses referred to hereafter. All
initial expressions of interest were based on public information regarding the
Company and no confidential information was released at that time. The
solicitations of interest sought answers to specific questions with regard to
both the financial and operational aspects of any proposed transaction.
The initial solicitation of expressions of interest from the eight bank
holding companies resulted in four preliminary proposals. After further review
and discussions, the Board determined that an affiliation with any of the three
organizations which had provided unsolicited expressions of interest would not
be in the best interest of the Company, its shareholders, customers or
employees.
In September, 1995, the Board determined to further pursue the four initial
expressions of interest received in response to the Company's solicitation.
Non-public information concerning the Company was furnished to the four
organizations, all of which were publicly-traded bank holding companies
("Associated," "PTO-1", "PTO-2" and "PTO-3," respectively). The four
organizations were requested to submit revised proposals containing their final
and most favorable terms.
In September and October 1995, the Board and legal counsel for the Company
met with representatives of Associated, PTO-1, PTO-2 AND PTO-3 to further
discuss their proposals and the financial and operational aspects of the
proposed transaction.
In December, 1995, the Board retained the services of an independent
financial advisor to assist it in evaluating the four proposals. The Board and
the financial advisor determined that the proposals of Associated and PTO-1 were
substantially equal in value from a financial point of view, and materially
greater in value than the proposals received from PTO-2 and PTO-3. As a result,
the Board determined not to pursue further discussions with PTO-2 and PTO-3.
In January, 1996, additional discussions were conducted by the Board and
after analyzing, among other things, the respective market liquidity of the
stock of Associated and PTO-1, anticipated earnings dilution resulting from a
stock-for-stock transaction, return on equity, capital-to-asset ratios,
price-to-book ratios, price-to-earnings ratios, concentration of ownership,
geographic and service diversification, certain operating ratios, past growth in
assets, earnings and dividends, and ability to service the Company's customers,
the Board determined that Associated's proposal was more favorable to the
shareholders and customers of the Company. The Board directed the Company's
legal counsel to proceed with negotiating and drafting the specific terms of a
letter of intent.
A final draft of a letter of Intent for the merger of Associated and the
Company was presented to the Board in April, 1996, and the Board authorized and
directed the Chairman to execute the Letter of Intent with Associated. The
Letter of Intent was executed as of April 10, 1996.
A mutual due diligence period commenced in April, 1996, and continued
through October, 1996. After completion of the mutual due diligence, the Board
and representatives of Associated concluded that it was in the best interest of
the parties to proceed toward completion of a definitive merger agreement, the
first draft of which had been received in August, 1996, by counsel for the
Company from counsel for Associated.
Definitive merger agreement negotiations among legal counsel, directors of
the Company and representatives of Associated continued through October, 1996,
when final terms, conditions and language of a merger agreement (the "Merger
Agreement") were agreed upon.
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The Merger Agreement provides that Company shareholders will receive a
fixed dollar value in the form of Associated Common Stock at the closing of the
transaction. The fixed dollar value will be $14,400,000 or $83.40 per share
based on 172,652 shares of outstanding Company Stock. The number of shares of
Associated stock to be received by Company shareholders for each outstanding
share of Company Common Stock will be determined by dividing the $14,400,000
value by the Daily Average Price of Associated, divided by the number of shares
of Company Common Stock issued and outstanding immediately prior to the
Effective Time, provided that the number of shares of Associated Common Stock to
be received for each share of Company Common Stock will not be less than 2, and
provided further that, if the Daily Average Price is lower than $35.00, then
Associated and the Company will make a good faith effort to renegotiate the
conversion ratio. The Daily Average Price is the average of the closing prices
of a share of Associated Common Stock quoted on the Nasdaq National Market
during the ten trading day period which ends three business days prior to the
Effective Time.
On the date of the Company's execution of the Letter of Intent between the
Company and Associated on April 10, 1996, the aggregate number of shares of
Associated Common Stock issuable to shareholders of the Company would have been
382,724, based on the closing price of Associated Common Stock on that date as
reported on the Nasdaq National Market ($37 5/8 per share), resulting in an
exchange ratio of 2.22 shares of Associated Common Stock for each share of
Company Common Stock.
On November 6, 1996, the date of execution of the Merger Agreement, the
aggregate number of shares of Associated Common Stock issuable to shareholders
of the Company would have been 351,220, based on the closing price of Associated
Common Stock on that date as reported on the Nasdaq National Market ($40 63/64
per share), resulting in an exchange ratio of 2.03 shares of Associated Common
Stock for each share of Company Common Stock;
The total dollar value of $14,400,000 is approximately 1.75 times December
31, 1995 book value of the Company, 18.5 times Company's 1995 earnings, 1.73
times September 30, 1996 book value, and 16.9 times Company's estimated 1996
earnings (based on annualized earnings as of September 30, 1996 and adjusted for
merger-related expenses incurred during the nine-month period ending September
30, 1996).
The directors of the Company determined that these multiples appeared to be
within acceptable parameters based upon their review and analysis of industry
information and comparable transactions.
The directors of the Company concluded that they would not engage an
investment banking firm to render an opinion that the purchase price of
$14,400,000 is fair from a financial point of view. As discussed above, the
directors of the Company concluded that they would recommend the merger and
purchase price as fair to and in the best interest of the Company and its
shareholders. Because the purchase price is a fixed dollar value and a minimum
stock exchange ratio has been agreed upon, the directors believed that the
benefit to the Company and its shareholders of a "fairness opinion" would not be
commensurate with its cost.
Final drafts of and exhibits to the Merger Agreement were prepared and the
same were executed on behalf of Associated and the Company on November 6, 1996.
The aggregate consideration, based upon the closing price of Associated Common
Stock on January 17, 1997, as reported on the Nasdaq National Market ($42.00 per
share) and based on the minimum exchange ratio of 2 shares of Associated Common
Stock for each share of Company Common Stock, was approximately $14,502,768 (or
approximately $84.00 per share). However, the actual value of the consideration
will fluctuate until the Effective Time to the extent such consideration exceeds
the aggregate fixed value of $14,400,000 (or per share fixed value of $83.40).
On November 7, 1996, the Company and Associated issued a joint press
release announcing the execution of the Merger Agreement.
REASONS FOR MERGER
The Company. In considering the Merger, the directors of the Company
reviewed the terms and conditions of the proposed Merger Agreement, along with
certain business and financial information relating to Associated and the
Company. The Board of Directors of the Company determined to approve the
proposed transaction primarily because the Merger will increase the financial
strength of the Bank by enabling it to
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<PAGE> 25
better serve its customers, to provide additional opportunities for advancement
to the Bank's employees after the Merger, and to be more competitive with other
bank subsidiaries of large bank holding companies currently doing business in
the Bank's market area or which might locate in the area. The directors of the
Company also concluded that the Merger will enhance both the long-term and
short-term value of the Company shareholders' investments.
Among the factors important to the directors of the Company in determining
to approve the Merger were: (i) the increased opportunity and resources to serve
the Bank's customers; (ii) the possibility for career enhancement which
employees of the Bank might be provided as a result of the Merger; (iii) the
increased resources and expertise to keep the Bank competitive and meet the
ever-changing demands of the banking industry; (iv) the marketability and
liquidity of Associated Common Stock and the consistent dividend history and
rate of dividends of the Associated Common Stock to be received in the Merger as
compared to the relative illiquidity and lack of marketability of the Company
Common Stock and the dividend history of the Company Common Stock; (v) the
tax-free nature of the Merger for federal income tax purposes which would permit
the Company shareholders who receive shares of Associated Common Stock to defer
federal income taxation under certain circumstances; (vi) the potential for
future appreciation of Associated Common Stock due to Associated's greater
market presence and financial resources, and (vii) the financial terms of other
recent business combinations in the financial services industry. See "The
Merger -- Certain Material Federal Income Tax Consequences."
While each member of the Company's Board of Directors evaluated each of the
foregoing as well as other factors, the Board of Directors collectively did not
assign any specific or relative weights to the factors considered and did not
make any determination with respect to any individual factor. The Company's
Board of Directors collectively made its determination with respect to the
Merger based on its unanimous conclusion that the Merger, in light of the
factors that each of them individually considered as appropriate, is fair and in
the best interests of the Company's shareholders.
Associated. Prior to authorizing the Merger, Associated's Board of
Directors considered, among other things, the financial performance and
condition, business operations, capital levels, asset quality and future growth
prospects of the Company. The Board also considered the benefits to Associated
of expanding in South Eastern Wisconsin by acquisition of the Company as opposed
to the opening of a new branch bank, the positive impact of the Merger on
Associated by enhancing its visibility in the region and the terms of the Merger
Agreement.
Associated's Board of Directors believes the Merger will, (i) result in
operational and managerial efficiencies which will better enable the Company to
contain costs and grow more rapidly than historic growth rates; (ii) result in
the Company having greater financial strength, increased competitiveness and
market diversification, thereby also benefiting Associated and its customers;
and (iii) result in an increase in long-term shareholder value for the
shareholders of Associated.
RECOMMENDATION OF THE BOARD OF DIRECTORS OF THE COMPANY
The Board of Directors of the Company has determined that the terms of the
Merger are fair to, and in the best interests of, the Company, and its
shareholders for the reasons stated immediately above.
THE BOARD OF DIRECTORS OF THE COMPANY HAS UNANIMOUSLY APPROVED THE MERGER
AGREEMENT AND RECOMMENDS A VOTE FOR APPROVAL OF THE MERGER AGREEMENT.
MERGER CONSIDERATION
Upon consummation of the Merger, each share of the Company Common Stock
outstanding at the Effective Time will be converted (subject to the provisions
with respect to fractional shares described below) into the right to receive a
number of shares of Associated Common Stock which is equal to 14,400,000 divided
by the "Daily Average Price", divided by the number of shares of Company Common
Stock issued and outstanding immediately prior to the Effective Time (the
"Exchange Ratio"). See "Certain Provisions of the Merger Agreement --
Termination."
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<PAGE> 26
Based upon the capitalization of Associated and the Company as of the
Record Date and assuming a Daily Average Price of $41.9875 (based on the average
closing price of Associated Common Stock for the ten trading-day period ending
January 17, 1997), the Exchange Ratio would be 2.0 and the shareholders of the
Company would own Associated Common Stock representing approximately 1.8% of the
outstanding voting shares of Associated following consummation of the Merger
(assuming no exercise of dissenters' rights).
REGULATORY APPROVALS REQUIRED
Federal. The Merger is subject to prior approval by the Federal Reserve
Board under the BHC Act, which requires that the Federal Reserve Board take into
consideration, among other factors, the financial and managerial resources and
future prospects of the respective institutions and the convenience and needs of
the communities to be served. The BHC Act prohibits the Federal Reserve Board
from approving the Merger if it would result in a monopoly or be in furtherance
of any combination or conspiracy to monopolize or to attempt to monopolize the
business of banking in any part of the United States, or if its effect in any
section of the country may be to substantially lessen competition or to tend to
create a monopoly, or if it would in any other manner be a restraint of trade,
unless the Federal Reserve Board finds that the anti competitive effects of the
Merger are clearly outweighed in the public interest by the probable effect of
the transaction in meeting the convenience and needs of the communities to be
served. It is improbable that the Merger poses any antitrust issues. The Federal
Reserve Board also has the authority to deny an application if it concludes that
the combined organization would have an inadequate capital position.
Furthermore, the Federal Reserve Board must also assess the records of the bank
subsidiaries of Associated and the Company under the Community Reinvestment Act
of 1977, as amended (the "CRA"). The CRA requires that the Federal Reserve Board
analyze, and take into account when evaluating an application, each bank's
record of meeting the credit needs of its local communities, including low and
moderate income neighborhoods, consistent with safe and sound operation.
Under the BHC Act, the Merger may not be consummated until up to 30 days
following the date of Federal Reserve Board approval, during which time the
United States Department of Justice may challenge the Merger on antitrust
grounds. Although a challenge is improbable, there can be no assurance that the
Department of Justice will not challenge the Merger or, if such a challenge is
made, as to the result thereof. The commencement of an antitrust action would
stay the effectiveness of the Federal Reserve Board's approval unless a court
specifically orders otherwise. The BHC Act provides for the publication of
notice and public comment on the applications and authorizes the regulatory
agency to permit interested parties to intervene in the proceedings.
Associated filed an application with the Federal Reserve Bank of Chicago
(the "Federal Reserve Bank") that was accepted for filing by the Federal Reserve
Bank on November 15, 1996. Associated has been advised that the Federal Reserve
Bank accepted the application under delegated authority from the Federal Reserve
Board on December 18, 1996 and has approved the application under such authority
on January 15, 1997.
Wisconsin. The Merger is also subject to the prior approval by the
Department of Financial Institutions of the State of Wisconsin (the "Wisconsin
Commissioner") under Section 221.59 of the Wisconsin Statutes which requires
that the Wisconsin Commissioner take into consideration (i) the financial and
managerial resources and future prospects of the respective institutions and
whether the transaction would be contrary to the best interests of the
shareholders or customers of the bank or bank holding company to be acquired;
(ii) whether the action would be detrimental to the safety and soundness of the
respective institutions or any subsidiary or affiliate of the respective
institutions; (iii) the record of performance, management, financial
responsibility and integrity, and the CRA rating of the applicant; and (iv)
whether, upon consummation of the transaction, the applicant would control in
excess of 30% of the total amount of deposits of insured depository institutions
in Wisconsin as specified under federal banking law.
Associated filed an application with the Wisconsin Commissioner on November
14, 1996 which was accepted for processing on the date filed. There can be no
assurance that the Wisconsin Commissioner will approve the Merger, and if the
Merger is approved, there can be no assurance as to the date of such approval.
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<PAGE> 27
The Merger may be consummated at any time within one year of the date approval
is granted by the Wisconsin Commissioner (subject to the foregoing federal
approvals).
General. The Merger cannot proceed in the absence of all requisite
regulatory approvals. See "Certain Provisions of the Merger
Agreement -- Conditions to Consummation of the Merger." In the Merger Agreement,
Associated and the Company have agreed to take all reasonable actions necessary
to comply promptly with all legal requirements which may be imposed with respect
to the Merger, including furnishing information to the Federal Reserve Board or
in connection with approvals or filings with other governmental entities.
Associated and the Company have also agreed to take all reasonable action
necessary to obtain approvals of the Federal Reserve Board, the Wisconsin
Commissioner and other governmental entities. However, the obligation to take
reasonable actions is not to be construed as including an obligation to accept
any terms or conditions to an agreement or other approval of, or any exemption
by, any party that are not customarily contained in approvals of similar
transactions granted by such regulators or if Associated in good faith
determines that such terms or conditions would have a material adverse effect on
its business or financial condition or would materially detract from the value
of the Company to Associated. There can be no assurance that any regulatory
approvals will not contain a term or condition that causes such approvals to
fail to satisfy the conditions described above under "Certain Provisions of the
Merger Agreement -- Conditions to Consummation of the Merger."
Associated and the Company are not aware of any other governmental
approvals or actions that are required for consummation of the Merger except as
described above. Should any other approval or action be required, it is
presently contemplated that such approval or action would be sought. There can
be no assurance that any such approval or action, if needed, could be obtained
and, if such approvals or actions are obtained, there can be no assurance as to
the timing thereof.
THE EFFECTIVE TIME
The Merger will be consummated and will become effective as of the date
Articles of Merger are filed with the Department of Financial Institutions of
the State of Wisconsin (the "Effective Time"). The filing with respect to the
Merger will occur as promptly as practicable after the satisfaction or, if
permissible, waiver of the conditions to the Merger as set forth in the Merger
Agreement. The Merger Agreement may be terminated by either party if, among
other reasons, the Merger shall not have been consummated on or before March 31,
1997. Upon consummation of the Merger, the Company will be merged into
Associated and will not continue its separate existence or operations, to which
Associated as the surviving corporation will succeed. See "Certain Provisions of
the Merger Agreement -- Conditions to Consummation of the Merger" and "Certain
Provisions of the Merger Agreement Termination."
CONVERSION OF SHARES; PROCEDURES FOR EXCHANGE OF CERTIFICATES; FRACTIONAL SHARES
At the Effective Time and without any action on the part of Associated, the
Company or the holders of the Company Common Stock, each share of the Company
Common Stock issued and outstanding immediately prior to the Effective Time
(other than shares held by Company shareholders exercising their dissenters'
rights under the WBCL) shall be converted into the right to receive shares of
Associated Common Stock. See "The Merger Dissenters' Rights." All such shares of
the Company Common Stock shall no longer be outstanding and shall automatically
be cancelled and retired and shall cease to exist, and each stock certificate
previously representing any such shares of the Company Common Stock (other than
shares held by dissenting shareholders as described above) shall thereafter
represent the right to receive a certificate representing shares of Associated
Common Stock into which such Company Common Stock has been converted.
Certificates previously representing shares of the Company Common Stock shall be
exchanged for certificates representing whole shares of Associated Common Stock
upon the surrender of such certificates as provided below. No fractional share
of Associated Common Stock shall be issued, and, in lieu thereof, a cash payment
shall be made as provided below.
As of the Effective Time, Associated shall deposit, or cause to be
deposited, with a bank or trust company designated by Associated (the "Exchange
Agent"), for the benefit of the holders of shares of the Company
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Common Stock and for exchange in accordance with the terms of the Merger
Agreement, certificates representing the shares of Associated Common Stock (such
certificates for shares of Associated Common Stock to be exchanged for the
Company Common Stock, together with any dividends or distributions with respect
thereto (the "Company Exchange Fund") issuable pursuant to the terms of the
Merger Agreement in exchange for outstanding shares of the Company Common Stock.
It is anticipated that Harris Trust and Savings Bank will serve as the Exchange
Agent.
As soon as reasonably practicable after the Effective Time, the Exchange
Agent shall mail to each holder of record of a certificate which immediately
prior to the Effective Time represented outstanding shares of the Company Common
Stock whose shares were converted into the right to receive shares of Associated
Common Stock, (i) a letter of transmittal and (ii) instructions for use in
effecting the surrender of the Company Certificates in exchange for certificates
representing shares of Associated Common Stock. Upon surrender of a certificate
previously representing shares of the Company Common Stock to the Exchange Agent
together with such duly executed letter of transmittal, the holder of such
certificate shall receive in exchange therefor a certificate representing that
number of whole shares of Associated Common Stock to which such holder is
entitled and the certificate so surrendered shall forthwith be cancelled. In the
event of a transfer of ownership of shares which is not registered in the
transfer records of the Company, a certificate representing the proper number of
shares of Associated Common Stock may be issued to a transferee if the
certificate representing such shares is presented to the Exchange Agent,
accompanied by all documents required to evidence and effect such transfer and
by evidence that any applicable stock transfer taxes have been paid. Until
surrendered, each certificate previously representing shares of the Company
Common Stock shall be deemed at any time after the Effective Time to represent
only the right to receive upon such surrender a certificate representing shares
of Associated Common Stock and cash in lieu of any fractional shares of
Associated Common Stock as described below.
THE COMPANY SHAREHOLDERS SHOULD NOT FORWARD THEIR STOCK CERTIFICATES TO THE
EXCHANGE AGENT WITHOUT A LETTER OF TRANSMITTAL NOR RETURN THEIR STOCK
CERTIFICATES WITH THE ENCLOSED PROXY.
No dividends or other distributions declared or made after the Effective
Time with respect to Associated Common Stock with a record date after the
Effective Time shall be paid to the holder of any unsurrendered certificate with
respect to the shares of Associated Common Stock represented thereby, and no
cash payment in lieu of fractional shares shall be paid to any such holder,
until such certificate is surrendered. Subject to the effect of applicable laws,
following surrender of any such certificate, there shall be paid to the holder
of said certificate, which represents whole shares of Associated Common Stock
issued in exchange therefor, without interest, (i) promptly, the amount of cash
payable with respect to a fractional share of Associated Common Stock to which
such holder is entitled and the amount of dividends or other distributions with
a record date after the Effective Time paid with respect to such whole shares of
Associated Common Stock, and (ii) at the appropriate payment date, the amount of
dividends or other distributions, with a record date after the Effective Time,
but prior to surrender and a payment date occurring after surrender, payable
with respect to such whole shares of Associated Common Stock.
All shares of Associated Common Stock issued upon conversion of the shares
of the Company Common Stock (including any cash paid for fractional shares)
shall be deemed to have been issued in full satisfaction of all rights
pertaining to such shares of the Company Common Stock.
No certificates or scrip representing fractional shares of Associated
Common Stock shall be issued upon the surrender for exchange of the
certificates, and such fractional share interest will not entitle the owner
thereof to vote or to any rights as a shareholder of Associated. Each holder of
a fractional share interest shall be paid an amount in cash equal to the product
obtained by multiplying such fractional share interest to which such holder
would otherwise be entitled by the average of the daily closing prices of a
share of Associated Common Stock as quoted on the Nasdaq National Market during
the ten consecutive trading day period ending three business days prior to the
Effective Time. As soon as practicable after the determination of the amount of
cash, if any, to be paid to holders of fractional share interests, the Exchange
Agent shall notify Associated and Associated shall make available such amounts
to such holders of such fractional share interests subject to and in accordance
with the terms of the Merger Agreement, as relevant.
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Any portion of the Exchange Fund which remains undistributed to the
shareholders of the Company for six months after the Effective Time shall be
delivered to Associated, upon demand, and any shareholders of the Company who
have not theretofore complied with the procedures described above shall
thereafter look only to Associated for payment of their claim for Associated
Common Stock, any cash in lieu of fractional shares of Associated Common Stock
and any dividends or distributions with respect to Associated Common Stock.
Neither Associated nor the Company shall be liable to any holder of shares
of the Company Common Stock for any such shares of the Company Common Stock (or
dividends or distributions with respect thereto) or cash delivered to a public
official pursuant to any abandoned property, escheat or similar law.
Associated shall be entitled to deduct and withhold from any cash
consideration payable pursuant to the Merger Agreement to any holder of shares
of the Company Common Stock such amounts as Associated is required to deduct and
withhold with respect to the making of such payment under the Internal Revenue
Code of 1986, as amended (the "Code"), or any provision of state, local or
foreign tax law.
At the Effective Time, the stock transfer books of the Company shall be
closed, and there shall be no further registration of transfers of shares of the
Company Common Stock thereafter on said record books. From and after the
Effective Time, the holders of certificates shall cease to have any rights with
respect to such shares of the Company Common Stock except as otherwise provided
in the Merger Agreement, or by law. On or after the Effective Time, any
certificates presented to the Exchange Agent or Associated for any reason shall
be converted into shares of Associated Common Stock in accordance with the terms
of the Merger Agreement as described above.
DESCRIPTION OF ASSOCIATED COMMON STOCK ISSUABLE IN THE MERGER
The following description of Associated Common Stock issuable in the Merger
is a summary and is qualified in its entirety by reference to the terms of such
security, which is incorporated by reference herein and is set forth in full in
Article III of Associated 's Articles of Incorporation (the "Associated
Articles"). The description set forth below is subject in all respects to the
WBCL and the Associated Articles.
Harris Trust and Savings Bank is the transfer agent and registrar for all
outstanding Associated Common Stock.
THE FOLLOWING DESCRIPTION OF ASSOCIATED COMMON STOCK SHOULD BE READ
CAREFULLY BY THE COMPANY SHAREHOLDERS SINCE, AT THE EFFECTIVE TIME, EACH ISSUED
AND OUTSTANDING SHARE OF THE COMPANY COMMON STOCK WILL BE CONVERTED INTO THE
RIGHT TO RECEIVE SHARES OF ASSOCIATED COMMON STOCK AT THE EXCHANGE RATIO.
General. Associated has one class of common stock, the Associated Common
Stock. Of the 48,000,000 shares of Associated Common Stock authorized,
18,359,557 shares were outstanding as of the Record Date, exclusive of shares
held in its treasury. Of the 750,000 shares of Associated preferred stock with a
par value of $1.00 per share authorized, none were issued and outstanding as of
the Record Date.
Dividend Rights. Dividends on Associated Common Stock will be payable out
of the assets of Associated legally available therefor as, if and when declared
by the Associated Board of Directors. No share of Associated Common Stock is
entitled to any preferential treatment with respect to dividends.
Voting Rights. Each holder of Associated Common Stock will be entitled at
each shareholders' meeting of Associated, as to each matter to be voted upon, to
cast one vote, in person or by proxy, for each share of Associated Common Stock
registered in his or her name on the stock transfer books of Associated. Such
voting rights are not cumulative.
Rights Upon Liquidation. Subject to the rights of holders of any Associated
preferred stock which may be issued from time to time, in the event of
liquidation, dissolution or winding up of Associated, whether voluntary or
involuntary, the holders of Associated Common Stock will be entitled to receive
all assets of Associated remaining for distribution to its shareholders, on a
pro rata basis.
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Miscellaneous. Shares of Associated Common Stock are not convertible into
shares of any other class of capital stock. Shares of Associated Common Stock
are not and will not be entitled to any preemptive or subscription rights. The
issued and outstanding shares of Associated Common Stock are fully paid and
nonassessable (except as otherwise provided under the WBCL).
COMPARISON OF SHAREHOLDER RIGHTS
The following is a summary of material differences between the rights of
holders of Company Common Stock and Associated Common Stock. As the Company and
Associated are both incorporated under the laws of the State of Wisconsin,
rights of shareholders are substantially similar. Differences in the rights of
shareholders of the Company and Associated arise from differences between the
provisions of the Associated Articles and By-laws and those of the Company.
Shareholders of the Company, whose rights are governed by the Company's Articles
of Incorporation, By-laws and the WBCL will, on consummation of the Merger,
become shareholders of Associated. Their rights as Associated shareholders will
then be governed by Associated's Articles of Incorporation and By-laws and by
the WBCL. The following is a summary of the material differences between the
rights of shareholders of the Company and the rights of shareholders of
Associated.
AUTHORIZED CAPITAL STOCK
The Company. Under the Company's Articles of Incorporation, the aggregate
number of shares which it is authorized to issue is 5,000,000 shares of one
class of common stock, $1.00 par value. All shares of the Company Common Stock
are identical in rights and have one vote. The holders of the Company Common
Stock are entitled to such dividends as may be declared from time to time by the
Board of Directors of the Company from funds legally available therefor and upon
liquidation are entitled to receive pro rata all assets of the Company available
for distribution to such holders. The Company has no authorized shares of
preferred stock and, accordingly, the rights of holders of Company Common Stock
to receive dividends or payment in the event of voluntary or involuntary
dissolution, liquidation or winding up of the Company are not subject to the
prior satisfaction of the rights of any other shareholders.
Associated. Under Associated's Articles of Incorporation, Associated is
authorized to issue 48,000,000 shares of common stock, par value $0.01 per share
and 750,000 shares of preferred stock, $1.00 par value. All shares of Associated
Common Stock are identical in rights and have one vote. For a description of
Associated Common Stock, see "Description of Associated Common Stock Issuable in
the Merger." The preferred stock shall be cumulative and dividends shall accrue
thereon. The Board of Directors may divide the preferred stock into series and
establish the relative rights and preferences of preferred stock issued in the
future as specified in the Articles without shareholder action and issue such
stock in series. As of the date hereof, no shares of any series of Associated
preferred stock are issued and outstanding.
APPRAISAL RIGHTS AND DISSENTERS' RIGHTS
The Company. Under the WBCL, a shareholder of a corporation is generally
entitled to receive payment of the fair value of such shareholder's stock if
such shareholder dissents from a proposed merger or share exchange or a sale or
exchange of all or substantially all of the property and assets of the
corporation.
Associated. Dissenters' rights under the WBCL are not available to holders
of shares, such as shares of Associated Common Stock, which are registered on a
national securities exchange or quoted on Nasdaq on the record date filed to
determine shareholders entitled to notice of the meeting at which shareholders
are to vote on the proposed corporate action. Associated Common Stock is quoted
on the Nasdaq National Market.
REQUIRED VOTE
The Company. The Company's Articles of Incorporation provide that any
merger or consolidation of the Company with one or more other corporations or
any sale, lease or exchange of all or substantially all of the property and
assets of the Company requires the affirmative vote of the holders of at least
80% of the outstanding shares of the Company.
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The Company's Articles of Incorporation also provide that any amendment to
the Articles of Incorporation must receive the affirmative vote of at least
66 2/3% of the outstanding shares, and any amendment pertaining to the term or
removal of directors or pertaining to the merger of the Company or the sale of
substantially all of its assets must be approved by the affirmative vote of at
least 80% of the shares entitled to vote on such amendments.
However, the affirmative vote of the holders of a majority of the
outstanding shares entitled to vote on a merger or an amendment to the Articles
of Incorporation is required for any merger or amendment which is approved by
the affirmative vote of a majority of the Board of Directors of the Company.
Associated. Pursuant to 180.1706(1) of the WBCL, except as otherwise
provided in a corporation's articles of incorporation or bylaws, any amendment
to the articles of incorporation, merger or certain other extraordinary events
involving a corporation organized before January 1, 1973, which did not
expressly elect before January 1, 1991 to be governed by a majority or greater
voting requirement, must be approved by the affirmative vote of two-thirds of
the shares entitled to vote at a meeting called for that purpose. The Associated
Articles were amended in 1992 to reduce the vote required pursuant to Section
180.1706(1) of the WBCL to a majority vote. Thus, the affirmative vote of a
majority of the shares of Associated is required to adopt amendments to the
Associated Articles which create dissenters' rights or approve mergers and
certain other extraordinary transactions other than those in "Comparison of
Shareholder Rights -- Certain Business Combinations."
CLASSIFIED BOARD OF DIRECTORS
The Company. The Company's Board of Directors is divided into three classes
as nearly equal in number as possible, with the directors in each class serving
for staggered three-year terms. The Company's Board consists of no less than
five nor more than nine members. The Company present Board consists of seven
directors. At each annual meeting, the successors to the class of directors
whose term expires at the time of such meeting are elected by majority vote.
Associated. The Board of Directors of Associated is divided into three
classes as nearly equal in number as possible, with the directors in each class
serving for staggered three-year terms. However, the By-laws require that a
director retire as of the first annual meeting of shareholders subsequent to the
director's 65th birthday unless such director's term is extended for a one-year
term by a two-thirds vote of Associated's Board. At each annual meeting of
Associated's shareholders, the successors to the class of directors whose term
expires at the time of such meeting are elected by a majority of the votes cast,
assuming a quorum is present. Associated's Board consists of nine directors.
REMOVAL OF DIRECTORS FOR "CAUSE"
The Company. The Company's Articles of Incorporation provide that a
director may be removed from office "by the affirmative vote of 80% of the
outstanding shares entitled to vote for the election of such director.
Associated. Shareholders of Associated may remove a director only for
"cause." "Cause" is defined as conviction of a felony, declaration of unsound
mind by an order of a court of competent jurisdiction, gross dereliction of duty
or commission of an action which constitutes intentional misconduct or a knowing
violation of law and that results in both an improper substantial personal
benefit and a material injury to Associated.
NEWLY CREATED DIRECTORSHIPS AND VACANCIES ON THE BOARD OF DIRECTORS
The Company. Pursuant to 180.0810 of the WBCL, unless otherwise provided in
a corporation's Articles, shareholders may fill vacancies on a corporation's
Board of Directors. The Company's By-laws authorize the shareholders or the
Board of Directors, by the affirmative vote of a majority of the shareholders or
the directors then in office, though less than a quorum, to fill vacancies on
the Company's Board of Directors until the next succeeding election of
directors, except that the Company's Articles of Incorporation
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provide that vacancies created by removal of a director may only be filled by
the affirmative vote of 80% of the outstanding shares.
Associated. The Associated's Articles provide that newly created
directorships and any vacancies on Associated's Board of Directors may only be
filled by the Board of Directors. Associated's By-laws provide that the
remaining members of the Board shall appoint a director in accordance with the
WBCL.
CERTAIN BUSINESS COMBINATIONS
The Company. The Company's Articles of Incorporation provide that any
merger or consolidation of the Company with one or more other corporations or
any sale, lease or exchange of all or substantially all of the property and
assets of the Company shall require the affirmative vote of the holders of at
least 80% of the outstanding shares of the Company. However, the affirmative
vote of a majority of the outstanding shares shall apply to such transactions
which are approved by the affirmative vote of a majority of the Board of
Directors of the Company.
Associated. Article VII of Associated's Articles provides that an
affirmative vote of 80% of Associated's outstanding shares is required to
approve a merger or other business combination involving a beneficial owner of
10% or more of Associated's outstanding voting shares (an "interested
shareholder"). In addition, if the consideration offered in connection with such
transaction does not satisfy certain "fair price" requirements, the affirmative
vote of 80% of the "non-interested outstanding shares" (defined as voting shares
not beneficially owned by an interested shareholder) of Associated will also be
required to approve such a transaction. These requirements do not apply if (a)
the board of directors approves the transaction and a majority of the directors
voting to approve the transaction are "continuing directors" (defined as a
director who was either (i) a director at the time the interested shareholder
became "interested" and who is not otherwise affiliated with such shareholder,
or (ii) a director designated (prior to his or her initial election as a
director) as a continuing director by a majority of the then continuing
directors or (b) the transaction is between Associated and a subsidiary of
Associated and no interested shareholder (together with such shareholder's
affiliates and associates) owns any of the outstanding shares of the subsidiary.
The foregoing provision may only be amended, modified or repealed by the
affirmative vote of not less than 80% of the outstanding shares and the
non-interested outstanding shares of Associated.
ADVANCE NOTICE OF PROPOSALS TO BE BROUGHT AT THE ANNUAL MEETING
The Company. The Company's Articles and By-laws do not contain any
provisions relating to advance notice of proposals to be brought before an
annual meeting.
Associated. Pursuant to Article II, Section 5 of Associated's By-laws, any
shareholder who intends to bring business before an annual meeting of
shareholders (other than nominations for directors) must provide Associated with
notice of such intention, the nature of such proposal and certain other
information regarding the shareholder bringing the proposal, not less than 60
nor more than 75 days prior to the meeting, or within 10 days from the date
notice or public disclosure of the date of such meeting is given, if such
announcement date is less than 70 days before the meeting date.
ADVANCE NOTICE OF NOMINATIONS OF DIRECTORS
The Company. The Company's Articles and By-laws do not contain any
provisions relating to advance notice of nominations of directors.
Associated. Pursuant to Article II, Section 6 of Associated's By-laws, any
shareholder who intends to nominate directors for election at a meeting called
for that purpose must provide Associated with notice of such intention, certain
information regarding the proposed nominee and certain information regarding the
nominating shareholder, not less than 60 days nor more than 75 days prior to the
meeting, or within 10 days from the date notice or public disclosure of the date
of such meeting is publicly announced, if such announcement date is less than 70
days before the meeting date.
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RESALE OF ASSOCIATED COMMON STOCK ISSUED PURSUANT TO THE MERGER
The Associated Common Stock issued pursuant to the Merger will be
registered under the Securities Act and be freely tradeable under the Securities
Act except for shares issued to any shareholder of the Company who may be deemed
to be an "affiliate" of the Company for purposes of Rule 145 under the
Securities Act. Each affiliate identified by the Company will enter into an
agreement with Associated providing that such affiliate will be subject to Rule
145(d) of the Securities Act, shall not transfer any Associated Common Stock
received in the Merger except in compliance with the Securities Act. In order to
comply with pooling of interests requirements, such persons shall agree to make
no disposition of any shares of the Company Common Stock or Associated Common
Stock (or any interests therein) during the period beginning 30 days before the
Effective Time and ending when the financial results for at least 30 days of
combined operations of the Company and Associated after the Effective Time have
been published. This Proxy Statement/Prospectus does not cover resales of
Associated Common Stock received by any person who may be deemed to be an
affiliate of the Company. The Company has concluded that the only affiliates of
the Company are its directors and executive officers.
PRE-MERGER DIVIDEND POLICY
The Company. Pursuant to the Merger Agreement, except for the payment of a
cash dividend of $.25 per share in December, 1996, the Company is prohibited
from declaring or paying any dividend on, or making any other distribution in
respect of, its outstanding shares of capital stock without the prior written
consent of Associated.
Associated. Associated expects to continue to declare, until the Effective
Time, its regularly scheduled dividends.
POST-MERGER DIVIDEND POLICY
It is the current intention of the Board of Directors of Associated to
continue to declare cash dividends on the Associated Common Stock following the
Merger. The dividend is currently in the amount of $0.29 per quarter or $1.16
per year, in each case per share. Shareholders should note that no such
dividends payable following the date hereof have currently been declared and
that future dividends will be determined by the Associated Board of Directors in
light of the earnings and financial condition of Associated and its subsidiaries
and other factors, including applicable governmental regulations and policies.
In that regard, Associated is a legal entity separate and distinct from its
banking and non-banking subsidiaries, and the principal sources of Associated's
income are dividends and interest from such subsidiaries. The payment of
dividends by Associated's banking subsidiaries is subject to certain
restrictions under applicable governmental regulations. See also "The
Merger -- Pre-Merger Dividend Policy."
CONDUCT OF BUSINESS PENDING THE MERGER
Pursuant to the Merger Agreement, the Company has agreed to carry on its
business, and the business of its subsidiaries, in the usual, regular and
ordinary course in substantially the same manner as conducted prior to the
execution of the Merger Agreement, subject to certain covenants and other
agreements agreed to by the Company in the Merger Agreement. See "Certain
Provisions of the Merger Agreement -- Certain Covenants."
CERTAIN MATERIAL FEDERAL INCOME TAX CONSEQUENCES
Associated and the Company have received an opinion of Reinhart, Boerner,
Van Deuren, Norris & Rieselbach, s.c. that the Merger will qualify as a tax-free
reorganization under Section 368(a)(1)(A) of the Code and that each of
Associated and the Company will be a party to such reorganization within the
meaning of Section 368(b) of the Code. Accordingly, the Company and Associated
will recognize no gain or loss for federal income tax purposes as a result of
the Merger and no gain or loss will be recognized by any holder of the Company
Common Stock upon receipt of Associated Common Stock pursuant to the Merger
(except upon the receipt of cash in lieu of fractional shares of Associated
Common Stock). This discussion of federal
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income tax consequences of the Merger assumes that none of the holders of
Company Common Stock will exercise dissenters' rights. The Internal Revenue
Service ("Service") has not been asked to rule upon the tax consequences of the
Merger and such request will not be made. The opinion of Reinhart, Boerner, Van
Deuren, Norris & Rieselbach, s.c. is based entirely upon the Code, regulations
now in effect thereunder, current administrative rulings and practice, and
judicial authority, all of which are subject to change. Unlike a ruling from the
Service, an opinion of an advisor is not binding on the Service and there can be
no assurance, and none is hereby given, that the Service will not take a
position contrary to one or more positions reflected herein or that the opinion
will be upheld by the courts if challenged by the Service.
EACH SHAREHOLDER OF THE COMPANY IS URGED TO CONSULT HIS OR HER OWN TAX AND
FINANCIAL ADVISORS AS TO THE EFFECT OF SUCH FEDERAL INCOME TAX CONSEQUENCES ON
HIS OR HER OWN PARTICULAR FACTS AND CIRCUMSTANCES AND ALSO AS TO ANY STATE,
LOCAL, FOREIGN OR OTHER TAX CONSEQUENCES ARISING OUT OF THE MERGER.
Based upon the opinion of Reinhart, Boerner, Van Deuren, Norris &
Rieselbach, s.c., which in turn is based upon various representations and
subject to various assumptions and qualifications, the following federal income
tax consequences to the shareholders of the Company will result from the Merger:
(i) Provided that the Merger of the Company with and into Associated
qualifies as a statutory merger under applicable law, the Merger will
qualify as a reorganization within the meaning of Sections 368(a)(1)(A) and
368(a)(2)(D) of the Code, and the Company and Associated will each be "a
party to a reorganization" within the meaning of Section 368(b) of the Code
for purposes of this reorganization.
(ii) No gain or loss will be recognized by the holders of the Company
Common Stock upon the exchange of the Company Common Stock solely for
Associated Common Stock pursuant to the Merger, except with respect to cash
received in lieu of fractional shares of Associated Common Stock.
(iii) A Company shareholder's aggregate basis in the Associated Common
Stock (including any fractional share interest to which he or she may be
entitled) received in the Merger will be the same as the aggregate basis of
the Company Common Stock exchanged therefor.
(iv) The holding period of the Associated Common Stock received by a
holder of Company Common Stock pursuant to the Merger will include the
period during which the Company Common Stock exchanged therefor was held,
provided that the Company Common Stock surrendered was held as a capital
asset as of the time of the Merger.
(v) The receipt by a holder of Company Common Stock of cash in lieu of
a fractional share of Associated Common Stock will be treated as if he or
she received such fractional share from Associated and then had it redeemed
for cash. Such receipt of cash will be treated under Section 302(b)(1) of
the Code as full payment in exchange for the fractional share.
The foregoing is only a general description of certain material federal
income tax consequences of the Merger for holders of the Company Common Stock
who are citizens or residents of the United States and who hold their shares as
capital assets, without regard to the particular facts and circumstances of the
tax situation of each holder of the Company Common Stock. It does not discuss
all of the consequences that may be relevant to holders of the Company Common
Stock entitled to special treatment under the Code (such as insurance companies,
financial institutions, dealers in securities, tax-exempt organizations or
foreign persons). The summary set forth above does not purport to be a complete
analysis of all potential tax effects of the transactions contemplated by the
Merger Agreements or the Merger itself. No information is provided herein with
respect to the application and effect of state, local and foreign tax laws and
the possible effects of changes in federal laws or other tax laws.
ANTICIPATED ACCOUNTING TREATMENT
The business combination resulting from the Merger is expected to qualify
as a "pooling of interests" for accounting and financial reporting purposes.
Under this method of accounting, the recorded assets and liabilities of
Associated and the Company will be carried forward to the combined corporation
at their
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recorded amounts; income of the combined corporation will include income of
Associated and the Company for the entire fiscal year in which the combination
occurs.
The Merger Agreement provides that a condition to the consummation of the
Merger is the receipt of the opinion of the independent public accountants of
Associated to the effect that the Merger qualifies for "pooling of interests"
accounting treatment. IN THE EVENT SUCH CONDITION IS NOT MET, THE MERGER WOULD
NOT BE CONSUMMATED UNLESS THE CONDITION WERE WAIVED BY ASSOCIATED.
DISSENTERS' RIGHTS
Under the provisions of Subchapter XIII of the WBCL, a copy of which is
attached to this Proxy Statement/Prospectus as Exhibit B and which provisions
are incorporated herein by reference, any holder of record or beneficial holder
of Company Common Stock has the right to dissent from the Merger and demand
payment of the "fair value" of his or her shares in cash as determined pursuant
to Subchapter XIII of the WBCL ("Dissenters' Rights"). Set forth below is a
summary of the procedures relating to the exercise of Dissenters' Rights. This
summary does not purport to be a complete statement of the provisions of
Subchapter XIII of the WBCL. Any shareholder who wishes to assert Dissenters'
Rights must deliver a written notice of his or her intent to exercise such right
to Centra Financial, Inc., 10701 West National Avenue, West Allis, Wisconsin
53227, Attention Mr. Andrew Spencer, Secretary, before the vote on the Merger
Agreement is taken at the special meeting. A PROXY OR VOTE AGAINST THE MERGER
AGREEMENT WILL NOT, BY ITSELF, BE REGARDED AS A WRITTEN NOTICE OF INTENT TO
DEMAND PAYMENT FOR PURPOSES OF ASSERTING DISSENTERS' RIGHTS.
A record holder of Company Common Stock may assert Dissenters' Rights as to
fewer than all shares registered in that shareholder's name only if the holder
dissents with respect to all shares beneficially owned by any one person and
notifies the Company in writing of the names and addresses of each person on
whose behalf the shareholder asserts such Dissenters' Rights.
A beneficial shareholder may assert Dissenters' Rights as to shares held on
the shareholder's behalf only if, in addition to meeting the other requirements
to dissent, the beneficial shareholder (i) submits to the Company the record
shareholder's written consent to the dissent not later than the time the
beneficial shareholder asserts Dissenters' Rights and (ii) asserts Dissenters'
Rights with respect to all shares of which the shareholder is the beneficial
shareholder or over which the beneficial shareholder has power to direct the
vote.
If the Merger Agreement is approved by the requisite vote of holders of the
Company Common Stock, the Company is required to send a notice (the "Dissenters'
Notice") to all dissenting shareholders containing payment demand and stock
certificate surrender information (the "Payment Demand") within 10 days after
such approval. The return date (the "Payment Demand Date") specified by the
Company for receiving the Payment Demand from dissenting shareholders may not be
less than 30 nor more than 60 days after the date on which the Dissenters'
Notice was first sent. Upon receipt of the Dissenters' Notice, each dissenting
shareholder must return his Payment Demand and Certificate no later than the
Payment Demand Date as provided in the Dissenters' Notice and certify whether he
or she acquired beneficial ownership of the shares prior to the first public
announcement of the terms of the Merger on April 10, 1996. A Payment Demand may
not be withdrawn without the Company's consent.
Upon effecting the Merger, within 60 days after the Payment Demand Date,
the Company will pay each dissenting shareholder who properly complied with the
statutory requirements of Subchapter XIII of the WBCL, the amount that the
Company estimates to be the fair value of such dissenting shareholder's shares,
plus accrued interest from the Effective Time; provided that, with respect to
shares acquired after the first public announcement of the Merger, the Company
may elect to withhold payment until either such shareholder accepts the
Company's offer of fair value or a court determines the fair value of such
shares.
If the Merger is not effected within 60 days of the Payment Demand Date,
the Company will return all deposited certificates to dissenting shareholders.
If the Merger is thereafter effected, the Company will send a new Dissenters'
Notice within 10 days of effecting the Merger and repeat the payment demand
procedure described above.
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If any dissenting shareholder is dissatisfied with the Company's
determination of "fair value," such dissenting shareholder may notify the
Company in writing of his or her own estimate of the fair value of his or her
shares and the amount of interest due. A dissenting shareholder must assert this
right within 30 days after the Company makes or offers payment for his or her
shares or the right is waived. The Company may either accept such dissenting
shareholder's estimate of fair value or commence a proceeding in the Wisconsin
Circuit Court of Milwaukee County to determine the fair value of the shares of
all dissenting shareholders whose own estimates of fair value are not accepted
by the Company.
In the event any holder of the Company Common Stock fails to perfect his or
her rights to dissent by failing to comply strictly with the applicable
statutory requirements of Subchapter XIII of the WBCL, he or she will be bound
by the terms of the Merger Agreement and will not be entitled to payment for his
or her shares under Subchapter XIII of the WBCL. ANY HOLDER OF COMPANY COMMON
STOCK WHO WISHES TO OBJECT TO THE TRANSACTION AND DEMAND PAYMENT IN CASH FOR HIS
OR HER SHARES SHOULD CONSIDER CONSULTING HIS OR HER OWN LEGAL ADVISOR.
Because an executed Proxy relating to Company Common Stock on which no
voting direction is made will be voted at the Special Meeting in favor of the
Merger, a dissenting shareholder who wishes to have his or her shares of Company
Common Stock represented by proxy at the Special Meeting but preserve his or her
dissenters' rights must mark his or her Proxy either to vote against the Merger
or to abstain from voting thereon, in addition to the foregoing requirements.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Associated (through the Bank as employer) has agreed to succeed to the
Bank's obligations with respect to Employment Agreements with Messrs. Olm and
Koeppl and Ms. Stockinger. The Agreements provide for each of the named
individuals to continue serving in their present capacity until the expiration
of the Agreements' term on January 2, 1999. Each of the individuals will receive
their base salary, shall be entitled to participate in bonus and incentive plans
currently in effect, and such other benefits of employment generally made
available to other officers of the Company.
Associated shall also succeed to the Bank's obligations with respect to
Separation Agreements and Releases with Messrs. Woodcock and Spencer. The
individuals will resign their employment and directorships effective December
31, 1996 (but have been rehired on a temporary basis to serve until the
Effective Date), and shall be entitled to receive, as severance pay for services
rendered, Two Hundred Eighty-Nine Thousand Two Hundred Eighty Dollars
($289,280.00) in the case of Mr. Woodcock and One Hundred Seventy-Two Thousand
Three Hundred Thirty-Six Dollars ($172,336.00) in the case of Mr. Spencer. The
sums are to be paid over a 24-month period in equal payments at regular pay
dates.
OTHER RELATED PARTY TRANSACTIONS
In the ordinary course of conducting their banking and financial services
businesses, each of Associated, the Company and their respective subsidiaries,
may do business and engage in banking transactions with the other party and its
subsidiaries, which may include but not be limited to interests or participation
in loans and interbank advances.
MANAGEMENT AFTER THE MERGER
In the Merger, the Company will be merged into Associated and the separate
corporate existence of the Company will cease. Associated will thereby acquire
control of the Bank and the Bank will operate under the name "Associated Bank
West Allis."
The officers and directors of Associated prior to the Merger will continue
as officers and directors of the surviving corporation. The directors of the
Bank prior to the Effective Time will continue as directors after the Effective
Time until their successors shall have been duly elected and qualified.
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CERTAIN PROVISIONS OF THE MERGER AGREEMENT
The following is a brief summary of certain provisions of the Merger
Agreement, which is attached as Exhibit A to this Proxy Statement/Prospectus and
is incorporated herein by reference. Such summary is qualified in its entirety
by reference to the Merger Agreement.
THE MERGER
The Merger Agreement provides that, following the approval of the Merger
Agreement by the shareholders of the Company and the satisfaction or waiver of
the other conditions to the Merger, the Company will be merged with and into
Associated. If the Merger Agreement is approved by the shareholders of the
Company, the Merger will become effective upon the Effective Time.
At the Effective Time, pursuant to the Merger Agreement, each outstanding
share of the Company Common Stock will be converted into the right to receive
the number of shares of Associated Common Stock which is equal to 14,400,000
divided by the Daily Average Price, divided by the number of shares of Company
Common Stock issued and outstanding immediately prior to the effective time (the
"Exchange Ratio"). The number of shares of Associated Common Stock into which
each share of Company Common Stock shall be converted will not be less than two,
and if the Daily Average Price is lower than $35, Associated and the Company
will make a good faith effort to promptly renegotiate the Exchange Ratio. The
Daily Average Price will equal the average of the closing prices of a share of
Associated Common Stock during the ten trading days ending three business days
prior to the Effective Time. With regard to the treatment of fractional share
interests, see "The Merger -- Conversion of Shares; Procedures for Exchange of
Certificates; Fractional Shares."
REPRESENTATIONS AND WARRANTIES
The Merger Agreement contains customary representations and warranties
relating to, among other things, (i) each of Associated's and the Company's and
their respective subsidiaries' organization and similar corporate matters; (ii)
each of Associated's and the Company's capital structure; (iii) authorization,
execution, delivery, performance and enforceability of the Merger Agreement and
other related matters; (iv) documents filed by Associated with the Commission
and each of Associated and the Company with the Federal Reserve Board and state
banking authorities and the accuracy of information contained therein; (v) the
accuracy of information supplied by each of Associated and the Company in
connection with the Registration Statement and this Proxy Statement/Prospectus;
(vi) compliance with laws including employment and lending laws; (vii) no
material pending or threatened litigation except as otherwise disclosed in
filings by Associated with the Commission and the Company in the regulatory
reports; (viii) filing of tax returns and payment of taxes; (ix) certain
material contracts and contracts relating to certain employment, separation and
benefits matters of the Company; (x) retirement and other employee plans and
matters of the Company relating to ERISA; (xi) the absence of any burdensome
contracts, agreements or restrictions; (xii) absence of certain material changes
or events since December 31, 1995, relating to the occurrence of a material
adverse effect in the business operations, properties (including intangible
properties), condition (financial or otherwise), assets or liabilities
(including contingent liabilities) of Associated or its subsidiaries, taken as a
whole, and the Company or its subsidiaries, taken as a whole; (xiii) maintenance
of books of account and accounting controls, loan documentation and disclosure;
(xiv) no action taken that would prevent using the "pooling of interests" method
to account for the Merger or which would prevent the Merger from qualifying as a
tax-free reorganization under the Code; (xv) certain environmental matters
relating to the properties of the Company; (xvi) good title to the properties of
the Company and its subsidiaries, free of liens except as specified; and (xvii)
certain insurance matters.
CERTAIN COVENANTS
Pursuant to the Merger Agreement, Associated and the Company have each
agreed that prior to the Effective Time (and unless the prior written consent of
the other shall have been obtained) each of them and their respective
subsidiaries will operate their respective businesses in a manner that does not
violate any law.
31
<PAGE> 38
In addition, the Company has agreed that prior to the Effective Time, the
Company will not propose or adopt any amendments to its corporate charter or
bylaws in any way materially adverse to Associated.
Pursuant to the Merger Agreement, the Company has also agreed that prior to
the Effective Time (and unless the prior written consent of Associated shall
have been obtained) the Company and its subsidiaries will (i) carry on business
in the usual, regular and ordinary course consistent with past practice, (ii)
use reasonable efforts to preserve intact their business organization and assets
(and all rights associated therewith), (iii) use reasonable efforts to maintain
and keep their properties in good repair and condition, (iv) use reasonable
efforts to keep all insurance and bonds in full force and effect, (v) perform in
all material respects all obligations under all material contracts, leases and
documents relating to or affecting the assets, properties and business of the
Company and its subsidiaries, (vi) purchase and sell securities in accordance
with certain guidelines, (vii) maintain as of December 31, 1996 and until the
Effective Time, a loan loss reserve of not less than 2.0% of period ending
loans, (viii) comply with certain capital requirements and (ix) comply with and
perform in all material respects all obligations and duties imposed by all
applicable laws. The Company has also agreed that prior to the Effective Time
(and unless the prior written consent of Associated shall have been obtained),
neither the Company nor its subsidiaries will: (i) grant any increase in
compensation or bonuses (other than as specified in the Merger Agreement) or
retirement benefits to any employee or otherwise adopt, enter into, amend or
modify any employee benefit plan, or enter into or amend any employment,
severance or similar agreement with any director or officer (other than as is
consistent with the normal severance policy of the Company); (ii) except for a
dividend to be declared and paid on or before December 31, 1996 not to exceed
$.25 per share on 172,652 shares, declare or pay any dividend on its outstanding
shares of capital stock; (iii) redeem, purchase or otherwise acquire any shares
of the Company capital stock; (iv) merge or consolidate with or into any other
corporation or bank; (v) purchase or otherwise acquire any assets or stock of
any corporation, bank or other business; (vi) liquidate, sell, dispose of, or
encumber any assets or acquire any assets, other than in the ordinary course of
business consistent with past practice; (vii) split, combine or reclassify any
of the capital stock of the Company or issue, authorize or propose the issuance
of any other securities in respect of, in lieu of or in substitution for shares
of its capital stock; (viii) issue, deliver, award, grant or sell, or authorize
or propose the issuance, delivery, award, grant or sale of, any shares of any
class of the Company Common Stock or any rights, warrants or options to acquire,
any such shares; (ix) purchase any shares of Associated Common Stock (except in
a fiduciary capacity for the account of its customers); (x) change any of its
methods of accounting, or methods of reporting income or deductions for federal
income tax purposes, in effect at December 31, 1995; (xi) except for the
required loan loss reserve, change any lending, investment, liability management
or other material policies concerning the business or operations of the Company
or any subsidiary in any material respect; (xii) organize any new subsidiaries
or enter into any new non-bank line of business or make any material changes in
its operations; (xiii) incur or assume any material obligation or liability, or
make any loan (excluding loan renewals of a loan not then classified as
"substandard," "doubtful," "loss," "other loans especially mentioned" or any
comparable classifications by the Company, the Bank or banking regulators) or
investment in an amount greater than $100,000; (xiv) assume, guarantee, endorse
or otherwise become liable or responsible for the obligations of any other
person or entity; (xv) mortgage, license, pledge or grant a security interest in
any of its material assets or allow to exist any material lien thereon, except
(A) liabilities and obligations incurred in the ordinary course of business
consistent with past practices and in amounts not material to the Company or its
subsidiaries taken as a whole, and (B) as may be required under existing
agreements to which the Company or any subsidiary is a party; (xvi) acquire
assets (including equipment) or securities in excess of $25,000 in the aggregate
(excluding loans to customers and investments permitted above); (xvii) pay,
discharge, or satisfy any debts or claims not in the ordinary course of business
and consistent with past practices and in no event with a value in excess of
$20,000 individually; (xviii) settle any claim, action, suit, litigation,
proceeding, arbitration, investigation or controversy of any kind, for any
amount in excess of $25,000 or in any manner which would restrict in any
material respect the operations or business of the Company or its subsidiaries;
(xix) purchase any new financial product or instrument which involves entering
into a contract with a term of six months or longer; or (xx) take any action or
fail to take any action which individually or in the aggregate can be expected
to have a material adverse effect (as defined in the Merger Agreement) on the
Company or its subsidiaries, taken as a whole.
32
<PAGE> 39
NO SOLICITATION OF TRANSACTIONS
The Merger Agreement provides that the Company and its respective
subsidiaries will not initiate, solicit or encourage (including by way of
furnishing information or assistance), or take any other action to facilitate,
any inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to any Competing Transaction or negotiate with any person in
furtherance of such inquiries or to obtain a Competing Transaction, or agree to
or endorse any Competing Transaction, or authorize or permit any of its
officers, directors or employees or any investment banker, financial advisor,
attorney, accountant or other representative retained by it or any of its
subsidiaries to take any such action. The Company must promptly notify
Associated orally and in writing of all of the relevant details relating to all
inquiries and proposals which it may receive relating to any of such matters.
Notwithstanding the foregoing, the Board of Directors of the Company is not
prohibited from furnishing or permitting any of its officers, directors,
employees, investment bankers, financial advisors, attorneys, accountants or
other representatives to furnish information to any party that requests
information as to the Company if the Board of Directors of the Company, after
consultation with and based upon the written advice of independent legal
counsel, determines in good faith that such action is required for the Board of
Directors of the Company to comply with its fiduciary duties to shareholders
imposed by law, and if prior to furnishing such information to such party, the
Company receives from such party an executed confidentiality agreement in
reasonably customary form.
For purposes of the Merger Agreement, a "Competing Transaction" shall mean
any of the following involving the Company or any of the Company's subsidiaries:
(i) any merger, consolidation, share exchange, business combination, or other
similar transactions; (ii) any sale, lease, exchange, mortgage, pledge, transfer
or other disposition of 10% or more of assets in a single transaction or series
of transactions, excluding from the calculation of such percentage any such
transactions undertaken in the ordinary course of business and consistent with
past practice; (iii) any sale of 10% or more of shares of capital stock (or
securities convertible or exchangeable into or otherwise evidencing, or any
agreement or instrument evidencing, the right to acquire capital stock); (iv)
any tender offer or exchange offer for 10% or more of outstanding shares of
capital stock; (v) any solicitation of proxies in opposition to approval by the
Company's shareholders of the Merger; (vi) the filing of an acquisition
application (or the giving of acquisition notice) whether in draft or final form
under the BHC Act or the Change in Bank Control Act with respect to the Company
or its subsidiaries; (vii) any person shall have acquired beneficial ownership
or the right to acquire beneficial ownership of, or any "group" (as such term is
defined under Section 13(d) of the Exchange Act and the rules and regulations
promulgated thereunder) shall have been formed which beneficially owns or has
the right to acquire beneficial ownership of, 10% or more of the then
outstanding shares of capital stock; or (viii) any public announcement of a
proposal, plan or intention to do any of the foregoing.
CONDITIONS TO CONSUMMATION OF THE MERGER
The respective obligations of each party to effect the Merger is subject to
various conditions which include, in addition to other customary closing
conditions, the following: (i) the Merger shall have been approved by the
holders of the Company Common Stock; (ii) the Registration Statement shall have
been declared effective by the Commission under the Securities Act (and no stop
order suspending the effectiveness of the Registration Statement shall have been
issued) and Associated shall also have received all other federal and state
securities permits and authorizations necessary to issue Associated Common Stock
pursuant to the Merger Agreement; (iii) the Merger shall have been approved by
the Federal Reserve Board, which approval shall not contain any condition which
is not reasonably satisfactory to Associated or the Company, and any waiting
periods with respect to the Merger shall have expired; and (iv) there shall not
be any injunction or restraining order preventing the consummation of the Merger
in effect.
In addition, Associated's or the Company's respective obligation to effect
the Merger is subject to one or more of the following additional conditions (any
of which may be waived by such party): (i) the representations and warranties of
the other party to the Merger Agreement shall be true and correct in all
material respects and the other party shall have performed in all material
respects all agreements and covenants required to be performed by it under the
Merger Agreement and any agreements entered into in connection therewith, and
the other party shall have obtained all material consents and approvals required
to
33
<PAGE> 40
consummate the Merger; (ii) there shall not be any pending action, proceeding or
investigation before any court or administrative agency or by any government
agency or any other person (a) challenging or seeking material damages in
connection with the Merger, or the conversion of the Company Common Stock into
Associated Common Stock pursuant to the Merger, or (b) seeking to restrain,
prohibit or limit the exercise of full rights of ownership or operation by
Associated or its subsidiaries of all or any portion of the business or assets
of the Company or any of its subsidiaries, which in either case is reasonably
likely to have a material adverse effect on either the Company and its
subsidiaries, taken as a whole, or Associated and its subsidiaries, taken as a
whole; (iii) the parties shall have received the opinion of independent counsel
to Associated that the Merger will be treated for federal income tax purposes as
a "reorganization" within the meaning of Section 368(a) of the Code (see "The
Merger -- Certain Material Federal Income Tax Consequences," above); (iv)
Associated shall have received an opinion from KPMG Peat Marwick LLP to the
effect that the Merger qualifies for "pooling of interests" accounting
treatment; (v) the aggregate of (a) fractional share interests in Associated
Common Stock to be paid in cash pursuant to the Merger Agreement and (b) the
number of shares of Associated Common Stock which would have been issuable
pursuant to the Merger Agreement that will not be issued due to the exercise of
dissenters' Rights is not more than 10% of the maximum aggregate number of
shares of Associated Common Stock which could be issuable as a result of the
Merger; (vi) Associated and the Company shall have received the opinion of
counsel regarding certain issues under the Securities Act and the WBCL; (vii)
Associated shall have received from each affiliate of the Company a signed
letter regarding certain restrictions on the resale of Associated Common Stock
under Rule 145 of the Securities Act; (viii) receipt by Associated of a written
environmental evaluation by Associated's environmental consultant of the
Company's real property stating that the Company's property complies with
environmental laws and that there are no material contingent liabilities or that
the Company shall have taken reasonably appropriate action in response to any
environmental condition identified by Associated's environmental consultant; and
(ix) the Company's aggregate consolidated after-tax earnings during the
three-month period ending December 31, 1996 shall be at least $200,000 (without
certain adjustments associated with the Merger, including amounts added to the
loan loss reserve for the Company and the expenses of providing for the funding
of Separation Agreements with Mr. Andrew N. Spencer and Mr. Richard A.
Woodcock).
TERMINATION
The Merger Agreement may be terminated at any time prior to the Effective
Time by the applicable Board of Directors, whether before or after approval of
the matters presented in connection with the Merger by the shareholders of the
Company: (i) by mutual consent of Associated and the Company; (ii) by either the
Company or Associated (x) if there has been a breach in any material respect of
any representation, warranty, covenant or agreement on the part of the Company,
on the one hand, or Associated, on the other hand, respectively, set forth in
the Merger Agreement, or (y) if any representation or warranty of the Company,
on the one hand, or Associated, on the other hand, respectively, shall be
discovered to have become untrue in any material respect, in either case which
breach or other condition has not been cured within 10 business days following
receipt by the non-terminating party of notice of such breach or other condition
(provided that the Merger Agreement may not be terminated by the breaching party
or party making any representation or warranty which shall have become untrue in
any material respect); (iii) by either Associated or the Company if any
permanent injunction preventing the consummation of the Merger shall have become
final and nonappealable; (iv) by either Associated or the Company if the Federal
Reserve Board or the Wisconsin Commissioner denied approval of the Merger and
neither Associated nor the Company has, within 30 days after the entry of such
order denying approval, filed a petition seeking review of such order as
provided by applicable law; (v) by either Associated or the Company if the
Merger has not been consummated by March 31, 1997 for a reason other than the
failure of the terminating party to comply with its obligations under the Merger
Agreement; (vi) by Associated if the Company fails to take reasonably
appropriate action in response to any environmental condition identified by
Associated's environmental consultant; (vii) by Associated if the aggregate of
the fractional shares of Associated Common Stock paid in cash and the number of
shares of Associated Common Stock that are not issued in the Merger due to the
exercise of dissenter's rights exceeds 10% of the shares of Associated Common
Stock which would otherwise have been issued
34
<PAGE> 41
pursuant to the Merger; or (viii) by either the Company or Associated, if the
Daily Average Price is lower than $35.
In the event of termination of the Merger Agreement by either the Company
or Associated, other than as a result of a material breach by the
non-terminating party, each party will pay its own expenses and the Merger
Agreement will become void and there will be no liability or obligation on the
part of Associated or the Company other than under certain specified provisions
of the Merger Agreement dealing with confidential treatment of non-public
information. In the event of termination of the Merger Agreement by a material
breach, in addition to other remedies at law or equity for breach, the party to
have breached will reimburse the non-breaching parties their expenses under the
Merger Agreement.
Provided that Associated has not breached in any material respect its
obligations under the Merger Agreement, the Company has agreed to pay Associated
a fee of $144,000 within two days subsequent to a termination of the Merger
Agreement caused directly or indirectly by (1) the Board of Directors of the
Company having withdrawn, modified or amended in any respect its approval or
recommendation of the Merger Agreement or the transactions contemplated thereby
(or the Board of Directors shall have resolved to do the foregoing) or (ii) the
Company violates its agreement to not initiate, solicit or encourage actions
which may result in a "Competing Transaction," as such term is defined in the
Merger Agreement.
AMENDMENT AND WAIVER
The Merger Agreement may be amended at any time prior to the Effective Time
by action taken or authorized by the respective Boards of Directors of
Associated and the Company (except that after the Merger Agreement shall have
been approved by the shareholders of the Company, no amendment may be entered
into which would reduce the amount or change the consideration into which each
share of the Company Common Stock shall be converted upon consummation of the
Merger without further shareholder approval). At any time prior to the Effective
Time, the parties may extend the time for the performance of any of the
obligations or other acts of the other party hereto, waive any inaccuracies in
the representations and warranties contained in the Merger Agreement or in any
document delivered pursuant to the Merger Agreement and waive compliance with
any of the agreements or conditions contained in the Merger Agreement.
EXPENSES
Whether or not the Merger is consummated, all costs and expenses incurred
in connection with the Merger Agreement and the transactions contemplated
thereby shall be paid by the party incurring such expense (except that the
parties shall share equally in the expense of printing and reproducing for
filing the Registration Statement and this Proxy Statement/Prospectus and all
Commission and other regulatory filing fees incurred in connection with the
Merger Agreement), except if the Merger Agreement is terminated due to the
breach of the Merger Agreement by either party thereto, then, in addition to
other remedies at law or equity for breach of the Merger Agreement, the party so
found to have breached the Merger Agreement shall indemnify the other party for
its expenses.
CERTAIN INFORMATION CONCERNING ASSOCIATED
Associated is a registered bank holding company pursuant to the BHC Act. It
was incorporated in Wisconsin in 1964 and was inactive until 1969, when
permission was received from the Federal Reserve Board to acquire three banks.
Associated currently owns 11 commercial banks located in Wisconsin and Illinois
serving their local communities and, measured by total assets held at November
31, 1996 was the third largest commercial bank holding company headquartered in
Wisconsin. Associated also owns all of the capital stock of subsidiaries engaged
in the following non-banking businesses: personal property lease financing,
commercial and residential mortgage banking, trust services, reinsurance and
general insurance agency activities.
Associated provides advice and specialized services to its bank and nonbank
subsidiaries (the "Associated Affiliates") in various areas of banking policy
and operations, including auditing, data processing, marketing/
35
<PAGE> 42
advertising, investments, personnel services, trust services and other financial
services functionally related to banking. Responsibility for the management of
the Associated Affiliates remains with their respective Boards of Directors and
officers. Services rendered to the Associated Affiliates by Associated are
intended to assist the local management of these banks to expand the scope of
the banking services offered by them. At November 31, 1996, the Associated
Affiliates operated a total of 95 full-service banking offices in 65 communities
throughout Wisconsin and in Chicago, Illinois.
Associated, through the Associated Affiliates, provides a complete range of
retail banking services to individuals and small-to-medium-size businesses.
These services include checking and savings accounts, NOW, Super NOW and money
market deposit accounts, business loans, personal loans, residential and
condominium mortgage loans, loans for education, MasterCard, VISA and other
consumer-oriented financial services, including IRA and Keogh accounts, safe
deposit and night depository facilities. Automated teller machines, which
provide 24 hour banking services to customers of the Associated Affiliates, have
been installed in many locations in the Associated Affiliates' service areas.
The Associated Affiliates are members of an interstate shared automated teller
machine ("ATM") network which allows their customers to perform banking
transactions from their checking, savings or credit card accounts at ATM
terminals in a multi-state environment. Among the services designed specifically
to meet the needs of smalland medium-size businesses are various types of
specialized financing, cash management services and transfer/collection
facilities.
The Associated Affiliates provide lending, depository and related financial
services to commercial, industrial, financial and governmental customers. In the
lending area, these include term loans, revolving credit arrangements, letters
of credit, inventory and accounts receivable financing and real estate
construction lending.
Additional emphasis is given to non-credit services for commercial
customers, such as advice and assistance in the placement of securities,
corporate cash management and financial planning. The Associated Affiliates make
available check clearing, safekeeping, loan participation, lines of credit,
portfolio analyses, data processing and other services to approximately 140
correspondent banking institutions.
Nine of the Associated Affiliates offer a wide variety of fiduciary,
investment management, advisory and corporate agency services to individuals,
corporations, charitable trusts, foundations and institutional investors. They
also administer (as trustee and in other fiduciary and representative
capacities) pension, profit sharing and other employee benefit plans, and
personal trusts and estates.
The Associated Affiliates also provide certain mortgage banking services
including the origination, underwriting, closing, and the temporary warehousing
of mortgage loans and the sale of loans to investors. The primary focus is on
one-to-four-family residential and multi-family properties, all of which
mortgage loans are saleable into the secondary mortgage market.
Associated and the Associated Affiliates are not dependent upon a single or
a few customers, the loss of which would have a material adverse effect on
Associated. No material portion of Associated's or the Associated Affiliates'
business is seasonal.
At September 30, 1996 Associated and the Associated Affiliates, as a group,
employed approximately 1,914 full-time equivalent employees.
CERTAIN INFORMATION CONCERNING THE COMPANY
The Company is a bank holding company incorporated under the laws of the
State of Wisconsin with its principal office in West Allis, Wisconsin. The
Company owns all the issued and outstanding stock of the Bank, a Wisconsin
banking corporation. The Bank owns all the issued and outstanding stock of
Central Investment, Inc., a Nevada corporation. As of September 30, 1996, the
Company had total assets of approximately $79.6 million and the Bank had
deposits of approximately $70.4 million.
The Bank is a full service bank serving the banking needs of the South
Eastern Wisconsin community of West Allis. The Bank provides commercial banking
services and products, including savings and demand deposits, real estate,
commercial and consumer loans, collection and safe deposit facilities and other
services
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<PAGE> 43
tailored to meet the needs of the individual and business customer. The Bank
owns the Bank's main banking premises located at 10701 West National Avenue,
West Allis Wisconsin and the branch premises located at 1400 West Capital Drive,
Pewaukee, Wisconsin.
The Company and the Bank are not dependent upon a single or a few
customers, the loss of which would have a material adverse effect on the Company
or the Bank. No material portion of the Company or the Bank's business is
seasonal.
At November 30, 1996, the Company and Bank employed approximately 32
full-time and five part-time employees.
OWNERSHIP OF THE COMPANY COMMON STOCK
The following table sets forth information regarding the beneficial
ownership of the Company Common Stock as of the Record Date by each director,
certain executive officers, all directors and executive officers of the Company
as a group and each person who is known by the Company to be the beneficial
owner of more than 5% of the Company Common Stock. Directors and executive
officers are deemed to own all shares of Company Common Stock which may be owned
in joint tenancy, by a spouse, in the names of minor children or in revocable
trusts' for which the individual has voting or investment power. The address for
the directors and executive officers is the executive offices of the Company.
<TABLE>
<CAPTION>
NAME OF NUMBER PERCENT
BENEFICIAL OWNER OF SHARES OF CLASS
---------------------------------------------------------- --------- --------
<S> <C> <C>
John F. Bonness........................................... 9,612 5.6%
Robert H. Kreuter......................................... 11,512 6.7%
George A. Schmus.......................................... 4,318 2.5%
Robert C. Tubesing........................................ 7,902 4.6%
DeLore Williams, MD....................................... 9,464 5.5%
Andrew K. Wilson.......................................... 8,382 4.9%
Richard A. Woodcock....................................... 5,314 3.1%
Andrew Spencer............................................ 153 *
Paul Olm.................................................. 0 *
All directors and executive officers as a group (9
persons)................................................ 56,657 32.8%
</TABLE>
- ---------------
* Less than 1%
EXPERTS
The consolidated financial statements of Associated as of December 31, 1995
and 1994, and for each of the years in the three-year period ended December 31,
1995, have been incorporated by reference herein and in the registration
statement in reliance upon the report of KPMG Peat Marwick LLP, independent
certified public accountants, incorporated herein by reference, and upon the
authority of said firm as experts in accounting and auditing.
Associated has retained Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c.
to render an opinion on the federal income tax consequences of the Merger and in
connection therewith, Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c.
has reviewed the discussion herein entitled "The Merger -- Certain Material
Federal Income Tax Consequences." Such opinion has been included in the
registration statement in reliance upon the authority of said firm as experts in
tax matters.
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<PAGE> 44
LEGAL OPINIONS
The validity of the shares issued in connection with the Merger and certain
other matters will be passed upon for Associated by Reinhart, Boerner, Van
Deuren, Norris & Rieselbach, s.c., Milwaukee, Wisconsin. Certain legal matters
in connection with the Merger will be passed upon for the Company by Davis &
Kuelthau, S.C., Milwaukee, Wisconsin.
SHAREHOLDER PROPOSALS
If the Merger is consummated, shareholders of the Company will become
shareholders of Associated. Pursuant to Rule 14a-(8) promulgated under the
Exchange Act, Associated shareholders may present proper proposals for inclusion
in Associated's proxy statement for consideration at the next annual meeting of
its shareholders by submitting their proposals to Associated in a timely manner.
Shareholders of the Company who become shareholders of Associated may present
proposals for inclusion in Associated's proxy statement for its 1998 Annual
Meeting, as the date for inclusion in the proxy statement for the 1997 Annual
Meeting has already passed.
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<PAGE> 45
EXHIBIT A
AGREEMENT AND PLAN OF MERGER
BETWEEN
ASSOCIATED BANC-CORP
AND
CENTRA FINANCIAL, INC.
NOVEMBER 6, 1996
<PAGE> 46
TABLE OF CONTENTS
ARTICLE I
THE MERGER
<TABLE>
<S> <C> <C>
SECTION 1.01. The Merger........................................................... A-1
SECTION 1.02. Effective Time....................................................... A-1
SECTION 1.03. Effect of the Merger................................................. A-2
SECTION 1.04. Articles of Incorporation and Bylaws................................. A-2
SECTION 1.05. Directors and Officers............................................... A-2
SECTION 1.06. Conversion of Securities............................................. A-2
SECTION 1.07. Exchange of Certificates............................................. A-3
SECTION 1.08. Stock Transfer Books................................................. A-5
SECTION 1.09. Anti-Dilution Adjustment............................................. A-5
</TABLE>
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
<TABLE>
<S> <C> <C>
SECTION 2.01. Organization and Qualification of the Company; Subsidiaries.......... A-5
SECTION 2.02. Articles of Incorporation and Bylaws................................. A-6
SECTION 2.03. Capitalization....................................................... A-6
SECTION 2.04. Authority............................................................ A-6
SECTION 2.05. No Conflict; Required Filings and Consents........................... A-7
SECTION 2.06. Compliance; Permits.................................................. A-7
SECTION 2.07. Banking Reports and Financial Statements............................. A-7
SECTION 2.08. Absence of Certain Changes or Events................................. A-8
SECTION 2.09. Absence of Litigation................................................ A-8
SECTION 2.10. Employee Benefit Plans............................................... A-9
SECTION 2.11. Employment Contracts; Material Contracts............................. A-10
SECTION 2.12. Registration Statement; Proxy Statement.............................. A-10
SECTION 2.13. Title to Property.................................................... A-10
SECTION 2.14. Compliance with Environmental Laws................................... A-11
SECTION 2.15. Absence of Agreements................................................ A-12
SECTION 2.16. Taxes................................................................ A-12
SECTION 2.17. Insurance............................................................ A-13
SECTION 2.18. Absence of Adverse Agreements........................................ A-13
SECTION 2.19. Internal Controls and Records........................................ A-13
SECTION 2.20. Loans................................................................ A-13
SECTION 2.21. Labor Matters........................................................ A-14
SECTION 2.22. Brokers.............................................................. A-14
SECTION 2.23. Accounting and Tax Matters........................................... A-14
SECTION 2.24. Full Disclosure...................................................... A-14
SECTION 2.25. Vote Required........................................................ A-14
</TABLE>
A-i
<PAGE> 47
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ASSOCIATED
<TABLE>
<S> <C> <C>
SECTION 3.01. Organization and Qualification....................................... A-14
SECTION 3.02. Articles of Incorporation and Bylaws................................. A-15
SECTION 3.03. Capitalization....................................................... A-15
SECTION 3.04. Authority............................................................ A-15
SECTION 3.05. No Conflict; Required Filings and Consents........................... A-15
SECTION 3.06. Compliance; Permits.................................................. A-15
SECTION 3.07. Securities Reports; Financial Statements............................. A-16
SECTION 3.08. Absence of Certain Changes or Events................................. A-16
SECTION 3.09. Absence of Litigation................................................ A-16
SECTION 3.10. Registration Statement; Proxy Statement.............................. A-17
SECTION 3.11. Absence of Agreements................................................ A-17
SECTION 3.12. Taxes................................................................ A-17
SECTION 3.13. Brokers.............................................................. A-18
SECTION 3.14. Accounting and Tax Matters........................................... A-18
SECTION 3.15. Full Disclosure...................................................... A-18
</TABLE>
ARTICLE IV
COVENANTS OF THE COMPANY
<TABLE>
<S> <C> <C>
SECTION 4.01. Affirmative Covenants................................................ A-18
SECTION 4.02. Negative Covenants................................................... A-18
SECTION 4.03. Intentionally left blank............................................. A-20
SECTION 4.04. Access and Information............................................... A-20
SECTION 4.05. Affiliates; Accounting and Tax Treatment............................. A-21
SECTION 4.06. Expenses............................................................. A-21
SECTION 4.07. Delivery of Shareholder List......................................... A-21
</TABLE>
ARTICLE V
COVENANTS OF ASSOCIATED
<TABLE>
<S> <C> <C>
SECTION 5.01. Affirmative Covenants................................................ A-22
SECTION 5.02. Access and Information............................................... A-22
SECTION 5.03. Accounting and Tax Treatment......................................... A-22
</TABLE>
ARTICLE VI
ADDITIONAL AGREEMENTS
<TABLE>
<S> <C> <C>
SECTION 6.01. Registration Statement............................................... A-22
SECTION 6.02. Meetings of Shareholders............................................. A-23
SECTION 6.03. Appropriate Action; Consents; Filings................................ A-23
SECTION 6.04. Notification of Certain Matters...................................... A-23
SECTION 6.05. Public Announcements................................................. A-24
SECTION 6.06. Topping Fee.......................................................... A-24
SECTION 6.07 Environmental Matters................................................ A-24
SECTION 6.08 Employee Matters..................................................... A-24
SECTION 6.09 Indemnification...................................................... A-25
</TABLE>
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ARTICLE VII
CONDITIONS OF MERGER
<TABLE>
<S> <C> <C>
SECTION 7.01. Conditions to Obligation of Each Party to Effect the Merger.......... A-25
SECTION 7.02. Additional Conditions to Obligations of Associated................... A-25
SECTION 7.03. Additional Conditions to Obligations of the Company.................. A-27
</TABLE>
ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
<TABLE>
<S> <C> <C>
SECTION 8.01. Termination.......................................................... A-28
SECTION 8.02. Effect of Termination................................................ A-28
SECTION 8.03. Amendment............................................................ A-29
SECTION 8.04. Waiver............................................................... A-29
</TABLE>
ARTICLE IX
GENERAL PROVISIONS
<TABLE>
<S> <C> <C>
SECTION 9.01. Non-Survival of Representations, Warranties and Agreements........... A-29
SECTION 9.02. Disclosure Schedules................................................. A-29
SECTION 9.03. Notices.............................................................. A-29
SECTION 9.04. Certain Definitions.................................................. A-30
SECTION 9.05. Headings............................................................. A-30
SECTION 9.06. Severability......................................................... A-30
SECTION 9.07. Entire Agreement..................................................... A-31
SECTION 9.08. Assignment........................................................... A-31
SECTION 9.09. Parties in Interest.................................................. A-31
SECTION 9.10. Governing Law........................................................ A-31
SECTION 9.11. Counterparts......................................................... A-31
EXHIBITS
4.01 Capital Requirements; Purchase and Sale of Securities
4.05 Affiliate Letter
7.02 Legal Opinion of Company Counsel
7.03 Legal Opinion of Associated Counsel
COMPANY DISCLOSURE SCHEDULE
2.03 Capitalization of the Company; Capitalization of the Bank
2.10 Employee Benefit Plans
2.11 Employment Contracts; Material Contracts
2.13 Title to Property
2.16 Taxes
2.20 Loans
4.02 Dividends
ASSOCIATED DISCLOSURE SCHEDULE
3.09 Litigation
3.11 Absence of Agreements
</TABLE>
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<PAGE> 49
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER, dated as of November 6, 1996 (the
"Agreement"), between ASSOCIATED BANC-CORP, a Wisconsin corporation
("Associated") and CENTRA FINANCIAL, INC., a Wisconsin corporation ("Company").
W I T N E S S E T H:
WHEREAS, the Company is a bank holding company, the wholly-owned subsidiary
of which is Central Bank of West Allis, a Wisconsin state chartered bank located
in West Allis, Wisconsin (the "Bank"); and
WHEREAS, the Bank has one wholly-owned subsidiary, Central Investment, Inc.
("Central"). The Bank and Central are sometimes individually referred to as a
"Subsidiary" and, collectively, as the "Subsidiaries;" and
WHEREAS, the Company upon the terms and subject to the conditions of this
Agreement and in accordance with the Wisconsin Business Corporation Law
("Wisconsin Law"), will merge with and into Associated (the "Merger"); and
WHEREAS, the Company and its Board of Directors have determined that the
Merger will enhance the ability of the Bank to better serve its existing
depositors and customers in West Allis, Wisconsin, and increase the financial
strength of the Bank; and
WHEREAS, the Board of Directors of the Company believes that the Merger
with Associated will benefit the shareholders and the employees of the Company
and the Subsidiaries; and
WHEREAS, the respective Boards of Directors of Associated and the Company
have (i) determined that the Merger and the exchange of newly issued shares of
Associated Common Stock (as defined in Section 1.06) for shares of the Company's
Common Stock (as defined in Section 1.06) pursuant and subject to the terms and
conditions of this Agreement is fair to and in the best interests of the
respective corporations and their shareholders, and (ii) approved and adopted
this Agreement and the transactions contemplated hereby; and
WHEREAS, the Board of Directors of the Company has, subject to its
fiduciary duties under applicable law, resolved to recommend approval of the
Merger by the shareholders of the Company; and
WHEREAS, Associated and the Company intend to effect a merger that
qualifies for pooling-of-interests accounting treatment and as a tax-free
reorganization under the Internal Revenue Code of 1986, as amended (the "Code").
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and agreements herein contained, and intending to be legally bound hereby,
Associated and the Company hereby agree as follows:
ARTICLE I
THE MERGER
SECTION 1.01. The Merger. Upon the terms and subject to the conditions set
forth in this Agreement, and in accordance with Wisconsin Law, at the Effective
Time (as defined in Section 1.02), the Company shall be merged with and into
Associated. As a result of the Merger, the separate corporate existence of the
Company shall cease and Associated shall continue as the surviving corporation
of the Merger (the "Surviving Corporation").
SECTION 1.02. Effective Time. The parties hereto shall cause the Merger to
be consummated by filing Articles of Merger (the "Articles of Merger") with the
Department of Financial Institutions of the State of Wisconsin, in such form as
required by, and executed in accordance with the relevant provisions of
Wisconsin
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Law (i) after the satisfaction, or if permissible, waiver of conditions set
forth in Article VII, and (ii) as promptly as possible within the thirty (30)
day period commencing with the latest of the following dates:
(a) The 30th calendar day after the date of approval of the Merger by
the Board of Governors of the Federal Reserve System (the "Federal Reserve
Board");
(b) Such date as may be prescribed by the Federal Reserve Board or any
other agency or authority pursuant to applicable law, rules or regulations,
prior to which consummation of the transaction described and referred to
herein may not be effected;
(c) The date of the shareholders meeting of the Company to vote upon
the Merger pursuant to Section 6.02; or
(d) If the transaction contemplated by this Agreement is being
contested in any legal proceeding and Associated or the Company has elected
to contest the same, the date that such legal proceeding has been brought
to a conclusion favorable, in the judgment of Associated or the Company, to
the consummation of the transaction contemplated hereby.
The date and time of the filing of the Articles of Merger is hereinafter
referred to as the "Effective Time."
SECTION 1.03. Effect of the Merger. At the Effective Time, the effect of
the Merger shall be as provided in the applicable provisions of Wisconsin Law.
Without limiting the generality of the foregoing, and subject thereto, at the
Effective Time, except as otherwise provided herein, all the property, rights,
privileges, powers and franchises of Associated and the Company shall vest in
the Surviving Corporation, and all debts, liabilities and duties of Associated
and the Company shall become the debts, liabilities and duties of the Surviving
Corporation.
SECTION 1.04. Articles of Incorporation and Bylaws. At the Effective Time,
the Articles of Incorporation and the Bylaws of Associated, as in effect
immediately prior to the Effective Time, shall be the Articles of Incorporation
and the Bylaws of the Surviving Corporation.
SECTION 1.05. Directors and Officers. The directors of Associated
immediately prior to the Effective Time shall be the initial directors of the
Surviving Corporation, each to hold office in accordance with the Articles of
Incorporation and Bylaws of the Surviving Corporation, and the officers of
Associated immediately prior to the Effective Time shall be the initial officers
of the Surviving Corporation, in each case until their respective successors are
duly elected or appointed and qualified.
SECTION 1.06. Conversion of Securities. At the Effective Time, by virtue of
the Merger and without any action on the part of Associated, the Company or the
holders of any of the following securities:
(a) each share of common stock, par value $1.00 per share, of the
Company (the "Company Common Stock") (all issued and outstanding shares of
the Company Common Stock being hereinafter collectively referred to as the
"Shares") issued and outstanding immediately prior to the Effective Time
(other than any Shares to be cancelled pursuant to Section 1.06(b) and
other than any Dissenting Shares, as defined in Section 1.06(c)) shall be
converted, in accordance with Section 1.07, into the right to receive that
number of shares of common stock, par value $.01 per share, of Associated
("Associated Common Stock") equal to 14,400,000 divided by the Daily
Average Price (as defined below) divided by the number of Shares issued and
outstanding immediately prior to the Effective Time; provided, however,
that the number of shares of Associated Common Stock into which each Share
of Company Common Stock shall be converted shall not be less than two and
provided further that if the Daily Average Price is lower than $35,
Associated and the Company will make a good faith effort to promptly
re-negotiate the conversion ratio. For purposes hereof, the Daily Average
Price shall mean the average of the closing prices of a share of Associated
Common Stock as quoted on the NASDAQ National Market during the ten trading
day period ending three business days prior to the Effective Time. As of
the Effective Time, all such shares of the Company Common Stock shall no
longer be outstanding and shall automatically be cancelled and retired and
shall cease to exist, and each certificate previously representing any such
Shares shall thereafter represent the right to receive a certificate
representing shares of Associated Common
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<PAGE> 51
Stock into which such Company Common Stock is convertible. Certificates
previously representing shares of Company Common Stock shall be exchanged
for certificates representing whole shares of Associated Common Stock
issued in consideration therefor upon the surrender of such certificates in
accordance with the provisions of Section 1.07, without interest. No
fractional shares of Associated Common Stock shall be issued, and, in lieu
thereof, a cash payment shall be made pursuant to Section 1.07 hereof.
(b) each Share held in the treasury of the Company and each Share
owned by Associated or any direct or indirect wholly-owned subsidiary of
Associated immediately prior to the Effective Time shall be cancelled and
extinguished without any conversion thereof and no payment shall be made
with respect thereto.
(c) each Share of the Company Common Stock which shall be issued and
outstanding as of the Effective Time and held by a shareholder who has
validly perfected dissenter's rights in accordance with Wisconsin Law,
shall not be converted into and shall not become Associated Common Stock
hereunder (all such shares of the Company Common Stock are hereinafter
called "Dissenting Shares"). The Company shall give Associated prompt
notice upon receipt by the Company of any written notice from any such
shareholder of the Company ("Dissenting Shareholder"). The Company agrees
that prior to the Effective Time, it will not, except with prior written
consent of Associated, voluntarily make any payment with respect to, or
settle or offer to settle, any request for withdrawal pursuant to the
exercise of dissenter's rights. Each Dissenting Shareholder who becomes
entitled, pursuant to the provisions of applicable law, to payment for his
or her shares of the Company Common Stock shall receive payment therefor
from Associated (but only after the amount thereof shall be agreed upon or
finally determined pursuant to the provisions of applicable law). If any
Dissenting Shareholder shall fail to perfect or shall effectively withdraw
or lose his or her right to receive the value of his or her shares of
Associated Common Stock, his or her shares shall be thereupon converted
into Associated Common Stock in accordance with the provisions of Section
1.06(a) and, if applicable, cash under Section 1.07(e).
SECTION 1.07. Exchange of Certificates.
(a) Exchange Agent As of the Effective Time, Associated shall deposit,
or shall cause to be deposited, with a bank or trust company designated by
Associated and acceptable to the Company (the "Exchange Agent"), and such
deposit shall be solely for the benefit of the holders of Shares, for
exchange in accordance with this Article I through the Exchange Agent,
certificates representing the shares of Associated Common Stock (such
certificates for shares of Associated Common Stock, and cash in lieu of
fractional shares (if any), together with any dividends or distributions
with respect thereto, being hereinafter referred to as the "Exchange Fund")
issuable pursuant to Section 1.06 in exchange for outstanding Shares.
(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, the Exchange Agent shall mail or personally deliver to each
holder of record (or his or her attorney-in-fact) of a certificate or
certificates which immediately prior to the Effective Time represented
outstanding Shares (the "Certificates"), whose Shares were converted into
the right to receive shares of Associated Common Stock pursuant to Section
1.06 and cash in lieu of fractional shares (if any), (i) a letter of
transmittal (which shall specify that delivery shall be effected, and risk
of loss and title to the Certificates shall pass, only upon delivery of the
Certificates to the Exchange Agent and shall be in such form and have such
other provisions as Associated may reasonably specify) and (ii)
instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing shares of Associated Common Stock.
Upon surrender of a Certificate for cancellation to the Exchange Agent,
together with such letter of transmittal, duly executed, the holder of such
Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of Associated Common Stock which
such holder has the right to receive in respect of the Certificate
surrendered pursuant to the provisions of this Article I (after taking into
account all Shares then held by such holder) and cash in lieu of fractional
shares (if any), and the Certificate so surrendered shall forthwith be
cancelled. In the event of a transfer of ownership of Shares which is not
registered in the transfer records of the Company, a certificate
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<PAGE> 52
representing the proper number of shares of Associated Common Stock may be
issued to a transferee if the Certificate representing such Shares is
presented to the Exchange Agent, accompanied by all documents required to
evidence and effect such transfer and by evidence that any applicable stock
transfer taxes have been paid. Certificates surrendered for exchange by any
affiliate of the Company shall not be exchanged for certificates
representing shares of Associated Common Stock until Associated has
received a written agreement from such person as provided in Section 4.05
hereof. Until surrendered as contemplated by this Section 1.07, each
Certificate shall be deemed at any time after the Effective Time to
represent only the right to receive upon such surrender the certificate
representing shares of Associated Common Stock and cash in lieu of any
fractional shares of Associated Common Stock as contemplated by Section
1.07(e).
(c) Distributions with Respect to Unexchanged Shares. No dividends or
other distributions declared or made after the Effective Time with respect
to Associated Common Stock with a record date after the Effective Time
shall be paid to the holder of any unsurrendered Certificate with respect
to the shares of Associated Common Stock represented thereby, and no cash
payment in lieu of fractional shares shall be paid to any such holder
pursuant to Section 1.07(e), until the holder of such Certificate shall
surrender such Certificate. Subject to the effect of applicable laws,
following surrender of any such Certificate, there shall be paid to the
holder of the certificates representing whole shares of Associated Common
Stock issued in exchange therefor, without interest, (i) promptly, the
amount of any cash payable with respect to a fractional share of Associated
Common Stock to which such holder is entitled pursuant to Section 1.07(e)
and the amount of dividends or other distributions with a record date after
the Effective Time theretofore paid with respect to such whole shares of
Associated Common Stock, and (ii) at the appropriate payment date, the
amount of dividends or other distributions, with a record date after the
Effective Time but prior to surrender and a payment date occurring after
surrender, payable with respect to such whole shares of Associated Common
stock.
(d) No Further Rights in the Shares. All shares of Associated Common
Stock issued upon conversion of the Shares in accordance with the terms
hereof (including any cash paid pursuant to Section 1.07(e)) shall be
deemed to have been issued in full satisfaction of all rights pertaining to
such Shares.
(e) No Fractional Shares. No certificates or scrip representing
fractional shares of Associated Common Stock shall be issued upon the
surrender for exchange of Certificates, and such fractional share interest
will not entitle the owner thereof to vote or to any rights of a
shareholder of Associated. Each holder of a fractional share interest shall
be paid an amount in cash equal to the product obtained by multiplying such
fractional share interest to which such holder (after taking into account
all fractional share interests then held by such holder) would otherwise be
entitled by the Daily Average Price.
(f) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the shareholders of the Company for six
months after the Effective Time shall be delivered to Associated, upon
demand, and any shareholders of the Company who have not theretofore
complied with this Article I shall thereafter look only to Associated for
payment of their claim for Associated Common Stock, any cash in lieu of
fractional shares of Associated Common Stock and any dividends or
distributions with respect to Associated Common Stock.
(g) No Liability. Neither Associated or the Company shall be liable to
any holder of Shares for any such Shares (or dividends or distributions
with respect thereto) or cash delivered to a public official pursuant to
any abandoned property, escheat or similar law.
(h) Withholding Rights. Associated shall be entitled to deduct and
withhold from any cash consideration payable pursuant to this Agreement to
any holder of Shares such amounts as Associated is required to deduct and
withhold with respect to the making of such payment under the Code, or any
provision of state, local or foreign tax law. To the extent that amounts
are so withheld by Associated, such withheld amounts shall be treated for
all purposes of this Agreement as having been paid to the holder of the
Shares in respect of which such deduction and withholding was made by
Associated.
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<PAGE> 53
SECTION 1.08. Stock Transfer Books. At the Effective Time, the stock
transfer books of the Company shall be closed and there shall be no further
registration of transfers of shares of the Company's Common Stock thereafter on
the records of the Company. From and after the Effective Time, the holders of
certificates evidencing ownership of shares of the Company's Common Stock
outstanding immediately prior to the Effective Time shall cease to have any
rights with respect to such Shares except as otherwise provided herein or by
law. On or after the Effective Time, any Certificates presented to the Exchange
Agent or Associated for any reason shall be converted into shares of Associated
Common Stock in accordance with this Article I.
SECTION 1.09. Anti-Dilution Adjustment. If, subsequent to the date hereof
and prior to the Effective Time, Associated shall pay a stock dividend or make a
distribution on Associated Common Stock in shares of Associated Common Stock or
any security convertible into Associated Common Stock or shall combine or
subdivide its stock, then in each such case, from and after the record date for
determining the shareholders entitled to receive such dividend or distribution
or the securities resulting from such combination or subdivision, an appropriate
adjustment (if any) shall be made to the conversion formula set forth in Section
1.06 above, for purposes of determining the number of shares of Associated
Common Stock into which the Company's Common Stock shall be converted. For
purposes hereof, the payment of a dividend in Associated Common Stock, or the
distribution on Associated Common Stock in securities convertible into
Associated Common Stock, shall be deemed to have effected an increase in the
number of outstanding shares of Associated Common Stock equal to the number of
shares of Associated Common Stock into which such securities shall be initially
convertible without the payment by the holder thereof of any consideration other
than the surrender for cancellation of such convertible securities.
Notwithstanding the foregoing, this Section shall not apply to any stock options
issued under option plans of Associated existing as of the date of this
Agreement.
ARTICLE II
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Except as set forth in the Disclosure Schedule attached hereto (the
"Company Disclosure Schedule"), the Company hereby represents and warrants to
Associated that:
SECTION 2.01. Organization and Qualification of the Company;
Subsidiaries. The Company is a corporation duly organized and validly existing
under the laws of the State of Wisconsin. The Bank is duly organized, validly
existing and in good standing under the laws of the State of Wisconsin. Central
is a corporation duly organized and validly existing and in good standing under
the laws of the State of Wisconsin. Central is a corporation duly organized and
validly existing under the laws of the State of Nevada. The Bank is and has been
the only subsidiary of the Company. Central is and has been the only subsidiary
of the Bank. The Company and its Subsidiaries each have the requisite corporate
power and authority and are in possession of all franchises, grants,
authorizations, licenses, permits, easements, consents, certificates, approvals
and orders ("Company Approvals") necessary to own, lease and operate their
properties and to carry on their businesses as they are now being conducted,
except where the failure to be so organized, existing and in good standing or to
have such power, authority and Company Approvals would not, individually or in
the aggregate, have a Material Adverse Effect (as defined below) on the Company
or its Subsidiaries, taken as a whole. The term "Material Adverse Effect" as
used in this Agreement shall mean any change or effect that is or is reasonably
likely to be materially adverse to a party's business, operations, properties
(including intangible properties), condition (financial or otherwise), assets or
liabilities (including contingent liabilities). The Company has not received any
notice of proceedings relating to the revocation or modification of any Company
Approvals. The Company and Central are duly qualified or licensed as foreign
corporations to do business, and are in good standing, in each jurisdiction
where the character of the properties owned, leased or operated by them or the
nature of their activities makes such qualification or licensing necessary,
except for such failures to be so duly qualified or licensed and in good
standing that would not, either individually or in the aggregate, have a
Material Adverse Effect on the Company or its Subsidiaries, taken as a whole.
The Company is registered with the Federal Reserve Board as a one bank holding
company under the Bank Holding Company Act of 1956, as amended (the "BHCA").
Except for the Bank, the Company holds no interest, either directly or
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<PAGE> 54
indirectly, in any other entity. Except for Central, the Bank holds no interest,
either directly or indirectly, in any other entity.
SECTION 2.02. Articles of Incorporation and Bylaws. The Company has
heretofore furnished to Associated a complete and correct copy of the Articles
of Incorporation and the Bylaws, as amended or restated, of the Company and its
Subsidiaries and such Articles of Incorporation and Bylaws of the Company and
its Subsidiaries are in full force and effect and neither the Company nor its
Subsidiaries are in violation of any of the provisions of their Articles of
Incorporation or Bylaws.
SECTION 2.03. Capitalization.
(a) Capitalization of the Company. The authorized capital stock of the
Company consists of 5,000,000 shares of Common Stock, par value $1.00 per
share. As of the date of this Agreement, (i) 172,652 shares of the
Company's Common Stock are issued and outstanding, all of which are validly
issued, fully paid and non-assessable (except as provided in section
180.0622(2)(b) of the Wisconsin Business Corporation Law), and all of which
have been issued in compliance with applicable securities laws, and (ii)
4,802 shares of the Company's Common Stock are held in the Company's
treasury. Except as set forth in the Company's Disclosure Schedule at
Section 2.03(a), as of the date of this Agreement, there are no options,
warrants or other rights, agreements, arrangements or commitments of any
character relating to the issued or unissued capital stock of the Company
or obligating the Company to issue or sell any shares of capital stock of,
or other equity interests in the Company. There are no obligations,
contingent or otherwise, of the Company to repurchase, redeem or otherwise
acquire any shares of the Company's Common Stock or to provide funds to or
make any investment (in the form of a loan, capital contribution or
otherwise) in any other entity.
(b) Capitalization of the Bank. The authorized capital stock of the
Bank consists of 40,000 shares of Common Stock, par value $10 per share. As
of the date of this Agreement, (i) 40,000 shares of the Bank's Common Stock
are issued and outstanding, all of which are validly issued, fully paid and
non-assessable, and all of which have been issued in compliance with
applicable securities laws, and (ii) the Company owns all of the Bank's
Common Stock. Except as set forth in the Company's Disclosure Schedule at
Section 2.03(b), as of the date of this Agreement, there are no options,
warrants or other rights, agreements, arrangements or commitments of any
character relating to the issued or unissued capital stock of the Bank or
obligating the Bank to issue or sell any shares of capital stock of, or
other equity interests in the Bank. There are no obligations, contingent or
otherwise, of the Bank to repurchase, redeem or otherwise acquire any
shares of the Bank's Common Stock or to provide funds to or make any
investment (in the form of a loan, capital contribution or otherwise) in
any other entity.
(c) Capitalization of Central. The authorized capital stock of Central
consists of 1,000 shares of common stock, par value $1.00 per share. As of
the date of this Agreement, (i) 1,000 shares of Central's common stock are
issued and outstanding, all of which are validly issued, fully paid and
nonassessable, and all of which have been issued in compliance with
applicable securities laws, and (ii) the Bank owns all of Central's common
stock. As of the date of this Agreement, there are no options, warrants or
other rights, agreements, arrangements or commitments of any character
relating to the issued capital stock of Central or obligating Central to
issue or sell any shares of capital stock of, or other equity interests in
Central. There are no obligations, contingent or otherwise, of Central to
repurchase, redeem or otherwise acquire any shares of Central's common
stock or to provide funds or to make any investment (in the form of a loan,
capital contribution or otherwise) in any other entity.
SECTION 2.04. Authority. The Company has the requisite corporate power and
authority to execute and deliver this Agreement, to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by the Company and the consummation by the
Company of the transactions contemplated hereby have been duly and validly
authorized by all necessary corporate action and no other corporate proceedings
on the part of the Company are necessary to authorize this Agreement or to
consummate the transactions contemplated hereby (other than, with respect to the
Merger, the approval and adoption of this Agreement by the holders of a majority
of the outstanding shares of the Company's Common Stock in accordance with
Wisconsin Law and the Company's Articles of
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<PAGE> 55
Incorporation and Bylaws). This Agreement has been duly and validly executed and
delivered by the Company and, assuming the due authorization, execution and
delivery by Associated, constitutes the legal, valid and binding obligation of
the Company enforceable in accordance with its terms.
SECTION 2.05. No Conflict; Required Filings and Consents.
(a) To the best knowledge of the Company, after inquiry of its
executive officers, the execution and delivery of this Agreement by the
Company does not, and the performance of this Agreement by the Company
shall not, (i) conflict with or violate the Articles of Incorporation or
Bylaws of the Company or the Subsidiaries, (ii) conflict with or violate
any domestic (federal, state or local) or foreign law, statute, ordinance,
rule, regulation, order, judgment or decree (collectively, "Laws")
applicable to the Company or the Subsidiaries, or by which their respective
properties are bound or affected, or (iii) result in any breach of or
constitute a default (or an event that with notice or lapse of time or both
would become a default) under, or give to others any rights of termination,
amendment, acceleration or cancellation of, or result in the creation of a
lien or encumbrance on any of the properties or assets of the Company or
the Subsidiaries pursuant to any note, bond, mortgage, indenture, contract,
agreement, lease, license, permit, franchise or other instrument or
obligation to which the Company or either Subsidiary is a party or by which
the Company or either Subsidiary or any of their respective properties are
bound or affected, except for any such breaches, defaults or other
occurrences that would not, individually or in the aggregate, have a
Material Adverse Effect on the Company or the Subsidiaries, taken as a
whole. The Board of Directors of the Company has taken all actions
necessary under Wisconsin Law, including approving the transactions
contemplated herein, to insure that none of the restrictions set forth in
Wisconsin Law do or will apply to the transactions contemplated herein.
(b) To the best knowledge of the Company, after inquiry of its
executive officers, the execution and delivery of this Agreement by the
Company does not, and the performance of this Agreement by the Company
shall not, require any consent, approval, authorization or permit of, or
filing with or notification to, any governmental or regulatory authority,
domestic or foreign, except (i) for applicable requirements, if any, of the
Securities Act of 1933, as amended (the "Securities Act"), and the
Securities Exchange of 1934, as amended (the "Exchange Act"), state
securities or blue sky laws ("Blue Sky Laws"), BHCA, the banking laws and
regulations of the State of Wisconsin (the "WBL"), and the filing and
recordation of appropriate merger or other documents as required by
Wisconsin Law and (ii) where the failure to obtain such consents,
approvals, authorizations or permits, or to make such filings or
notifications, would not prevent or delay consummation of the Merger, or
otherwise prevent the Company from performing its obligations under this
Agreement, and would not have a Material Adverse Effect on the Company or
its Subsidiaries, taken as a whole.
SECTION 2.06. Compliance; Permits. To the best knowledge of the Company
after inquiry of its executive officers, neither the Company nor its
Subsidiaries are in conflict with, or in default or violation of, (i) any law
applicable to the Company or the Subsidiaries or by which any of their
respective properties are bound or affected, or (ii) any note, bond, mortgage,
indenture, contract, agreement, lease, license, permit, franchise or other
instrument or obligation to which the Company or either Subsidiary is a party or
by which the Company or either Subsidiary or any of their respective properties
are bound or affected, except for any such conflicts, defaults or violations
which would not, individually or in the aggregate, have a Material Adverse
Effect on the Company or the Subsidiaries, taken as a whole.
SECTION 2.07. Banking Reports and Financial Statements.
(a) The Company and its Subsidiaries have timely filed all forms,
reports and documents required to be filed with the Federal Reserve Board,
the Wisconsin Commissioner and any other applicable federal or state
securities or banking authorities (all such reports and statements are
collectively referred to as the "Company Reports"). The Company Reports,
including all Company Reports filed after the date of this Agreement, (i)
were or will be prepared in accordance with the requirements of applicable
law and (ii) did not at the time they were filed, or will not at the time
they are filed, contain any untrue statement of material fact or omit to
state a material fact required to be stated therein or necessary in order
to make the statements therein, in the light of the circumstances under
which they were made, not misleading.
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(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Company Reports,
including any Company Reports filed since the date of this Agreement and
prior to or on the Effective Time, have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes
thereto) and each fairly presents the consolidated financial position of
the Company and its Subsidiaries as of the respective dates thereof and the
consolidated results of their operations and changes in financial position
for the periods indicated, except that any unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount.
(c) Except as and to the extent set forth on the consolidated balance
sheet of the Company and its Subsidiaries as of December 31, 1995,
including all notes thereto (the "Company Balance Sheet"), neither the
Company nor the Subsidiaries have any liabilities or obligations of any
nature (whether accrued, absolute, contingent or otherwise) that would be
required to be reflected on a balance sheet, or in the notes thereto,
prepared in accordance with generally accepted accounting principles,
except (i) for liabilities or obligations incurred in the ordinary course
of business since December 31, 1995, that would not, individually or in the
aggregate have a Material Adverse Effect on the Company or the
Subsidiaries, taken as a whole, or (ii) as otherwise reflected in the
reports referred to in Section 2.07(a) hereof.
SECTION 2.08. Absence of Certain Changes or Events. Except as disclosed in
the Company Reports filed prior to the date of this Agreement, since December
31, 1995, to the date of this Agreement, the Company and its Subsidiaries have
conducted their businesses only in the ordinary course and in a manner
consistent with past practice and, since December 31, 1995, there has not been
(i) any change in the financial condition, results of operations or business of
the Company or its Subsidiaries having a Material Adverse Effect on the Company
or its Subsidiaries, taken as a whole, (ii) any damage, destruction or loss
(whether or not covered by insurance) with respect to any assets of the Company
or its Subsidiaries having a Material Adverse Effect on the Company or its
Subsidiaries, taken as a whole, (iii) any change by the Company or its
Subsidiaries in their accounting methods, principles or practices, except for
compliance with applicable new requirements of the Financial Accounting
Standards Board, (iv) any revaluation by the Company or its Subsidiaries of any
of their material assets in any material respect, (v) any entry by the Company
or its Subsidiaries into any commitment or transactions material to the Company
or its Subsidiaries, taken as a whole, (vi) any declaration, setting aside or
payment of any dividends or distributions in respect of shares of the Company's
Common Stock or any redemption, purchase or other acquisition of any of its
securities or any of the securities of either Subsidiary, or (vii) any increase
in or establishment of any bonus, insurance, severance, deferred compensation,
pension, retirement, profit sharing, stock option (including, without
limitation, the granting of stock options, stock appreciation rights,
performance awards, or restricted stock awards), stock purchase or other
employee benefit plan, or any other increase in compensation payable or to
become payable to any officers or key employees of the Company or its
Subsidiaries.
SECTION 2.09. Absence of Litigation. Except as disclosed in the Company
Reports filed prior to the date of this Agreement: (a) neither the Company nor
its Subsidiaries are subject to any continuing order of, or written agreement or
memorandum of understanding with, or continuing material investigation by, any
federal or state banking authority or other governmental entity, or any
judgment, order, writ, injunction, decree or award of any governmental entity or
arbitrator, including, without limitation, cease-and-desist or other orders of
any bank regulatory authority, (b) there is no claim of any kind, action, suit,
litigation, proceeding, arbitration, investigation, or controversy affecting the
Company or its Subsidiaries pending or, to the knowledge of the Company,
threatened, except for matters which individually seek damages not in excess of
$20,000 and which otherwise will not have, and cannot reasonably be expected to
have, a Material Adverse Effect on the Company or its Subsidiaries, taken as a
whole, and (c) there are no uncured material violations, or violations with
respect to which material refunds or restitutions may be required, cited in any
compliance report to the Company or the Subsidiaries as a result of the
examination by any bank regulatory authority.
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SECTION 2.10. Employee Benefit Plans.
(a) The Company Disclosure Schedule at Section 2.10 lists all
"employee pension benefit plans," as such term is defined in section 3(2)
of the Employee Retirement Income Security Act of 1974 ("ERISA") without
regard to any exemptions from any requirements thereunder issued by the
United States Department of Labor in regulations or otherwise, maintained,
sponsored or contributed to by the Company or the Subsidiaries (the
"Pension Plans"). The term "Pension Plan" shall also include any terminated
"employee pension benefit plan" previously maintained, sponsored or
contributed to by the Company or the Subsidiaries which, as of the
Effective Time, has not distributed all of its assets in full satisfaction
of accrued benefits and/or obligations.
(b) The Company Disclosure Schedule at Section 2.10 lists all
"employee welfare benefit plans," as defined in ERISA section 3(1) without
regard to any exemptions from any requirements thereunder issued by the
United States Department of Labor in regulations or otherwise, maintained,
sponsored or contributed to by the Company or either Subsidiary (the
"Welfare Plans"). The term "Welfare Plans" shall also include any
terminated employee welfare benefit plan previously maintained, sponsored
or contributed to by the Company or either Subsidiary which, as of the
Effective Time, has not distributed all of its assets and/or satisfied all
of its obligations.
(c) The Company has made available to Associated true and complete
copies of the documents governing each of the Pension Plans and Welfare
Plans as in effect at the Effective Time.
(d) The Company Disclosure Schedule at Section 2.10 lists all plans or
programs to provide fringe benefits to the Company's and the Subsidiaries'
employees (other than Pension Plans and Welfare Plans) including, but not
limited to, vacation, sick leave, disability, medical, hospitalization,
life insurance and other insurance plans or related benefits (the "Fringe
Benefit Plans").
(e) The Company has made available to Associated true and complete
copies of the documents governing each Fringe Benefit Plan.
(f) The Company has no direct or indirect, formal or informal, plan,
fund or program to change any Welfare Plan or Fringe Benefit Plan that
would affect any of the Company's or Subsidiaries' employees. Neither the
Company nor the Subsidiaries have made any material modification, within
the meaning of ERISA section 102 and the regulations thereunder, to any
existing Welfare Plan or Fringe Benefit Plan which is not set forth in the
Welfare Plan or Fringe Benefit Plan documents provided to Associated.
(g) For purposes of this Section 2.10, "Company" shall include the
Company, the Subsidiaries and all members of any controlled group of
corporations (within the meaning of Code section 414(b), relevant Treasury
Regulations and Pension Benefit Guaranty Corporation regulations issued
pursuant to ERISA section 4001), any group of trades or businesses under
common control (within the meaning of Code section 414(c), relevant
Treasury Regulations and Pension Benefit Guaranty Corporation regulations
issued pursuant to ERISA section 4001) and any affiliated service group
(within the meaning of Code section 414(m) and relevant Treasury
Regulations and proposed Treasury Regulations) of which the Company or
either Subsidiary is a member.
(h) Neither the Company nor the Subsidiaries have ever been obligated
to contribute to any multi-employer plan within the meaning of ERISA
section 3(37).
(i) To the Company's knowledge, the Welfare Plans and Fringe Benefit
Plans and the trusts and other funding vehicles related to the Welfare
Plans and Fringe Benefit Plans have been administered in all respects in
compliance with the applicable requirements of ERISA, the Code, the plan
documents and all other applicable rules, regulations and laws. The Welfare
Plans and Fringe Benefit Plans and the trusts or other funding vehicles
related to the Welfare Plans and Fringe Benefit Plans meet all applicable
requirements, in form and in operation, for favorable tax treatment under
the Code. All required contributions pursuant to the Welfare Plans and
Fringe Benefit Plans for all periods prior to the Effective Time have been
made or will be made prior to the Effective Time. There are no pending or,
to the Company's knowledge, threatened claims, lawsuits or arbitrations
which have been asserted or instituted
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against the Welfare Plans or Fringe Benefit Plans or any fiduciaries
thereof with respect to their duties to the Welfare Plans or Fringe Benefit
Plans or the assets of any of the trusts under any Welfare Plans or Fringe
Benefit Plans. No representations or communications with respect to
participation, eligibility for benefits, vesting, benefit accrual or
coverage under the Welfare Plans or Fringe Benefit Plans have been made to
the Company's or the Subsidiaries' employees other than those which are in
accordance with the terms of such Welfare Plans or Fringe Benefit Plans in
effect immediately prior to the Effective Time.
(j) With respect to any Welfare Plan which is a "group health plan" as
defined in Code section 4980B, the Company and the Subsidiaries have
complied with the continuation coverage requirements of Code section 4980B
for any periods prior to the Effective Time.
(k) The Company has furnished to Associated copies of any investment
management agreements, fiduciary insurance policies, fidelity bonds, rules,
regulations or policies of the trustees or any committee thereunder, all of
which are true and complete.
(l) Since December 31, 1974, no fiduciary of the Welfare Plans has
engaged in any "prohibited transaction" (as defined in ERISA section 406 or
Code section 4975) nor has any fiduciary breached any fiduciary
responsibility, as described in Part 4 of Title I of ERISA with respect to
such Welfare Plans.
(m) The Company has no knowledge of the occurrence of any event with
respect to any Welfare Plan which could result in a liability of the
Company, either Subsidiary or any member of the Company's controlled group
to the Pension Benefit Guaranty Corporation ("PBGC"), other than the timely
payment of premiums pursuant to section 4007 of ERISA. All required PBGC
premiums have been paid for the periods through the Effective Time.
(n) Except as set forth in the Company Disclosure Schedule at Section
2.10, no Welfare Plan or Fringe Benefit Plan provides any form of
post-retirement health benefits to retired employees of the Company or the
Subsidiaries, other than benefits required to be provided pursuant to Code
section 4980B.
SECTION 2.11. Employment Contracts; Material Contracts. Except as set forth
in the Company Disclosure Schedule at Section 2.11, neither the Company nor
either Subsidiary is a party to or bound by (a) any employment or consulting
contract that is not terminable without penalty by the Company or the applicable
Subsidiary on 60 days' or less notice, (b) any contract or commitment for
capital expenditures in excess of $10,000.00 for any one (1) project, or (c)
contracts or commitments for the purchase of materials or supplies or for the
performance of services over a period of more than 60 days from the date of this
Agreement.
SECTION 2.12. Registration Statement; Proxy Statement. None of the
information supplied or to be supplied by the Company for inclusion in (a) the
Registration Statement (as defined in Section 6.01), (b) the Proxy Statement/
Prospectus (as defined in Section 6.01), or (c) any other document to be filed
with the Securities and Exchange Commission (the "SEC") or other regulatory
authority in connection with the transactions contemplated hereby, at the
respective times such documents are filed and, in the case of the Registration
Statement, when it becomes effective and at the Effective Time, and with respect
to the Proxy Statement/Prospectus, when mailed, shall be false or misleading
with respect to any material fact, or omit to state any material fact necessary
in order to make the statements therein not misleading. In the case of the Proxy
Statement/Prospectus or any amendment thereof or supplement thereto, none of
such information at the time of the Company's shareholders meeting (pursuant to
Section 6.02) (the "Meeting") shall be false or misleading with respect to any
material fact or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the solicitation of any
proxy for the Meeting.
SECTION 2.13. Title to Property. The Company Disclosure Schedule at Section
2.13 correctly identifies all real property owned and leased by the Company and
its Subsidiaries. The Company and its Subsidiaries have good and defensible
title to all of their properties and assets, real and personal, tangible and
intangible free and clear of all mortgage liens, and free and clear of all other
liens, charges and encumbrances except liens for taxes not yet due and payable,
pledges to secure deposits and such minor imperfections of title, if any, as to
not materially detract from the value of or interfere with the present use of
the property affected
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thereby or which, individually or in the aggregate, would not have a Material
Adverse Effect on the Company or its Subsidiaries, taken as a whole; and all
leases pursuant to which the Company or either Subsidiary leases from others
real or personal property including, without limitation, leases for branch
offices, are in good standing, valid and effective in accordance with their
respective terms, and there is not, under any of such leases, any existing
material default or event of default (or event which with notice or lapse of
time, or both, would constitute a material default and in respect of which the
Company or the Subsidiary in question has not taken adequate steps to prevent
such a default from occurring). The Company's and its Subsidiaries' buildings
and equipment in regular use have been reasonably maintained and are in good and
serviceable condition, reasonable wear and tear excepted. None of the buildings,
structures or appurtenances owned or leased by the Company or either Subsidiary
for their operation or maintenance as now operated or maintained, contravenes
any zoning ordinances or other administrative regulations (whether or not
permitted because of prior non-conforming use) or violates any restrictive
covenant or any provision of law, the effect of which would materially interfere
with or prevent the continued use of such properties for the purposes for which
they are now being used or would materially and adversely affect the value
thereof.
SECTION 2.14. Compliance with Environmental Laws.
(a) The term "Company's Property" shall mean any real property and
improvements currently owned, leased, used, operated or occupied by the
Company or either Subsidiary, including properties acquired by foreclosure,
properties which the Bank has a present right to acquire upon foreclosure
and which are owned by customers of the Bank who have received written
notification of default, or properties held or operated in a fiduciary or
managerial capacity;
(b) The term "Environmental Claims" shall mean any and all
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of noncompliance or violation,
investigations or proceedings relating in any way to any Environmental Law
or Environmental Permit;
(c) The term "Environmental Laws" shall mean all federal, state and
local laws including statutes, regulations and other governmental
restrictions and requirements relating to the discharge of air pollutants,
water pollutants or process wastewater or the disposal of solid or
hazardous waste or otherwise relating to the environment or hazardous
substances or employee health and safety.
(d) The term "Environmental Permits" shall mean all permits,
approvals, identification numbers, licenses and other authorizations
required under any applicable Environmental Law.
(e) The term "Hazardous Substances" shall mean all hazardous and toxic
substances, wastes and materials; any pollutants or contaminants
(including, without limitation, petroleum products, asbestos and raw
materials which include hazardous constituents); and any other similar
substances or materials which are regulated under Environmental Laws.
(f) The Environmental Permits (if any) are in full force and effect
and, to the Company's knowledge, constitute all permits, licenses,
approvals and consents relating to Environmental Laws or Hazardous
Substances required for the conduct of the Company's and the Subsidiaries'
businesses and the use of the Company's Property (as presently conducted
and used) in compliance with Environmental Laws.
(g) The Company or a Subsidiary has filed all reports, returns and
other filings required to be filed with respect to the Company's Property
under Environmental Laws and the Environmental Permits except where the
failure to do so would not have a material adverse effect on the Company's
or the Subsidiaries' businesses or financial condition, taken as a whole.
The Company and/or the Subsidiaries have made no environmental filings
after January 1, 1995.
(h) To the Company's knowledge, the business of the Company and the
Subsidiaries and the Company's Property have been and are being operated by
the Company and Subsidiaries in accordance with all Environmental Laws and
Environmental Permits. Neither the Company nor the Subsidiaries have
received any written notice nor does the Company or either Subsidiary have
knowledge that the Company's Property is not in material compliance with
all Environmental Laws and Environmental
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Permits and no proceeding for the suspension, revocation or cancellation of
any Environmental Permit is pending or, to the Company's knowledge,
threatened.
(i) There are no actions pending, or to the Company's knowledge,
threatened against the Company or either Subsidiary (naming the Company or
either Subsidiary), which in any case assert or allege (i) the Company or
either Subsidiary (naming the Company or either Subsidiary) violated any
Environmental Law or Environmental Permit or are in default with respect to
any Environmental Permit or any order, writ, judgment, variance, award or
decree of any government authority; (ii) the Company or either Subsidiary
is required to clean up or take remedial or other response action due to
the disposal, discharge or other release of any Hazardous Substance on the
Company's Property or elsewhere; or (iii) the Company or either Subsidiary
is required to contribute to the cost of any past, present or future
cleanup or remedial or other response action which arises out of or is
related to the disposal, discharge or other release or any Hazardous
Substance by the Company, either Subsidiary or others. The Company, the
Subsidiaries and the Company's Property are not subject to any judgment,
stipulation, order, decree or agreement arising under Environmental Laws.
(j) With respect to the period during which the Company or either
Subsidiary occupied the Company's Property (i) no Hazardous Substances have
been treated, recycled or disposed of by the Company or either Subsidiary
(intentionally or unintentionally) on, under or at the Company's Property;
(ii) there has been no release or threatened release by the Company or
either Subsidiary of any Hazardous Substance from the Company's Property;
(iii) to the Company's knowledge, there have been no activities on the
Company's Property which would subject Associated, either Subsidiary or any
subsequent occupier of the Company's Property to damages, penalties,
injunctive relief or cleanup costs under any Environmental Laws or common
law theory of liability.
SECTION 2.15. Absence of Agreements. Neither the Company nor either
Subsidiary is a party to any written agreement or memorandum of understanding
with, or a party to any commitment letter or similar undertaking to, or is
subject to any order or directive by, or is a recipient of any extraordinary
supervisory letter which restricts materially the conduct of its business
(including any contract containing covenants which limit the ability of the
Company or either Subsidiary to compete in any line of business or with any
person or which involve any restriction of the geographical area in which, or
method by which, the Company or either Subsidiary may carry on its business), or
in any manner relates to its capital adequacy, its credit policies or its
management nor has the Company or either Subsidiary been advised that any
federal, state or governmental agency is contemplating issuing or requesting (or
is considering the appropriateness of issuing or requesting) any such order,
decree, agreement, memorandum of understanding, extraordinary supervisory letter
commitment letter or similar submission.
SECTION 2.16. Taxes. The Company and its Subsidiaries have timely filed all
Tax Returns (as defined below) required to be filed by them, and the Company and
its Subsidiaries have timely paid and discharged all Taxes (as defined below)
due in connection with or with respect to the filing of such Tax Returns and
have timely paid all other Taxes as are due, except such as are being contested
in good faith by appropriate proceedings and with respect to which the Company
is maintaining reserves adequate for their payment. To the best knowledge of the
Company, the liability for Taxes set forth on each such Tax Return adequately
reflects the Taxes required to be reflected on such Tax Return. For purposes of
this Agreement, "Tax" or "Taxes" shall mean taxes, charges, fees levies, and
other governmental assessments and impositions of any kind, payable to any
federal, state, local or foreign governmental entity or taxing authority or
agency, including, without limitation, (i) income, franchise, profits, gross
receipts, estimated, ad valorem, value added, sales, use, service, real or
personal property, capital stock, license, payroll, withholding, disability,
employment, social security, workers compensation, unemployment compensation,
utility, severance, production, excise, stamp, occupation, premiums, windfall
profits, transfer and gains taxes, (ii) customs duties, imposts, charges, levies
or other similar assessments of any kind, and (iii) interest, penalties and
additions to tax imposed with respect thereto, and "Tax Returns" shall mean
returns, reports, and information statements with respect to Taxes required to
be filed with the United States Internal Revenue Service (the "IRS") or any
other governmental entity or taxing authority or agency, domestic or foreign,
including, without limitation, consolidated, combined and unitary tax returns.
Neither the IRS nor any other governmental entity or taxing
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authority or agency is now asserting, either through audits, administrative
proceedings, court proceedings or otherwise, or, to the best of the Company's
knowledge, threatening to assert against the Company or either Subsidiary any
deficiency or claim for additional Taxes. Neither the Company nor either
Subsidiary has granted any waiver of any statute of limitations with respect to,
or any extension of a period for the assessment of, any Tax. There are no tax
liens on any assets of the Company or either Subsidiary. Neither the Company nor
either Subsidiary has received a ruling or entered into an agreement with the
IRS or any other governmental entity or taxing authority or agency that would
have a Material Adverse Effect on the Company or its Subsidiaries, taken as a
whole, after the Effective Time. The accruals and reserves for taxes reflected
in the Company's Balance Sheet are adequate to cover all Taxes accruable by the
Company and its Subsidiaries on a consolidated basis through the date thereof
(including Taxes being contested) in accordance with generally accepted
accounting principles. Except as may be set forth in the Company Disclosure
Schedule at Section 2.16, no agreements relating to allocating or sharing of
Taxes exist between the Company and either Subsidiary.
SECTION 2.17. Insurance. Complete and correct copies of all material
policies of fire, product or other liability, workers' compensation and other
similar forms of insurance owned or held by the Company and its Subsidiaries
have been delivered to Associated. Subject to expirations and renewals of
insurance policies in the ordinary course of business, all such policies are in
full force and effect, all premiums with respect thereto covering all periods up
to and including the date as of which this representation is being made have
been paid (other than retrospective premiums which may be payable with respect
to workers' compensation insurance policies), and no notice of cancellation or
termination has been received with respect to any such policy. Such policies are
and shall remain valid, outstanding and enforceable policies, and will not be
terminated prior to the Effective Time. To the best knowledge of the Company,
the insurance policies to which the Company or its Subsidiaries are parties are
sufficient for compliance with all material requirements of law and all material
agreements to which the Company and its Subsidiaries are parties and will be
maintained by the Company and its Subsidiaries until the Effective Time. Neither
the Company nor the Subsidiaries have been refused any insurance with respect to
any material assets or operations, nor has coverage been limited in any respect
material to their operations by any insurance carrier to which they have applied
for any such insurance or with which they have carried insurance during the last
five (5) years.
SECTION 2.18. Absence of Adverse Agreements. Neither the Company nor the
Subsidiaries are parties to any agreement or instrument or any judgment, order
or decree or any rule or regulation of any court or other governmental agency or
authority which materially and adversely affects or in the future may have a
Material Adverse Effect on the financial condition, results or operations,
assets, business or prospects of the Company or its Subsidiaries, taken as a
whole.
SECTION 2.19. Internal Controls and Records. The Company and its
Subsidiaries maintain books of account which accurately and validly reflect, in
all material respects, all loans, mortgages, collateral and other business
transactions and maintain accounting controls sufficient to ensure that all such
transactions are (a) in all material respects, executed in accordance with its
management's general or specific authorization, and (b) recorded in conformity
with generally accepted accounting principles. There is no amendment to any
lending agreement, collateral document or security which is not fully reflected
in the books and records of the Company and its Subsidiaries.
SECTION 2.20. Loans. Except as disclosed in the Company Disclosure Schedule
at Section 2.20, (a) the Bank is not a party to any written or oral loan
agreement, note or borrowing arrangement which has been classified as
"substandard," "doubtful," "loss," "other loans especially mentioned" or any
comparable classifications by the Company or the Bank or banking regulators; (b)
neither the Company nor either Subsidiary is a party to any written or oral loan
agreement, note, or borrowing arrangement, including any loan guaranty, with any
director or executive officer of the Company or either Subsidiary, or any
person, corporation or enterprise controlling, controlled by or under common
control with any of the foregoing; or (c) neither the Company nor either
Subsidiary is a party to any written or oral loan agreement, note or borrowing
arrangement in violation of any law, regulation or rule of any governmental
authority and which violation could have a Material Adverse Effect on the
Company or the Subsidiaries, taken as a whole.
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SECTION 2.21. Labor Matters. Except as will not cause a Material Adverse
Effect to the Company or its Subsidiaries (a) the Company and its Subsidiaries
are in compliance with all applicable laws respecting employment and employment
practices, terms and conditions of employment and wages and hours, and are not
engaged in any unfair labor practice; (b) there is no unfair labor practice
complaint against the Company or its Subsidiaries pending before the National
Labor Relations Board; (c) there is no labor strike, dispute, slowdown,
representation campaign or work stoppage actually pending or threatened against
or affecting the Company or its Subsidiaries; (d) no grievance or arbitration
proceeding arising out of or under collective bargaining agreements is pending
and no claim therefor has been asserted against the Company or its Subsidiaries;
and (e) neither the Company nor its Subsidiaries are experiencing any material
work stoppage.
SECTION 2.22. Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of the Company or its Subsidiaries.
SECTION 2.23. Accounting and Tax Matters.
(a) To the best knowledge of the Company, neither the Company nor any
of its affiliates has through the date of this Agreement taken or agreed to
take any action that would prevent Associated from accounting for the
business combinations to be effected by the Merger as a
pooling-of-interests or would prevent the Merger from qualifying as a
reorganization under Section 368(a)(1)(A) of the Code.
(b) To the best knowledge of the Company, there is no plan or
intention on the part of shareholders of the Company who will receive
Associated Common Stock to sell or otherwise dispose of an amount of
Associated Common Stock to be received in the Merger which would reduce
their ownership of Associated Common Stock to a number of shares having in
the aggregate a value at the time of the Merger of less than fifty percent
(50%) of the total value of the Company's Common Stock outstanding
immediately prior to the Merger.
SECTION 2.24. Full Disclosure. No statement contained in any document,
certificate, or other writing furnished or to be furnished by or at the
direction of the Company to Associated in, or pursuant to the provisions of,
this Agreement contains or shall contain any untrue statement of a material fact
or omits or shall omit to state any material fact necessary, in light of the
circumstances under which it was made, in order to make the statements herein or
therein not misleading.
SECTION 2.25. Vote Required. The affirmative vote of a majority of the
votes that holders of the outstanding shares of the Company's Common Stock are
entitled to cast is the only vote of the holders of any class or series of the
Company's capital stock necessary to approve the Merger.
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF ASSOCIATED
Except as set forth in the Disclosure Schedule attached hereto (the
"Associated Disclosure Schedule"), Associated hereby represents and warrants to
the Company that:
SECTION 3.01. Organization and Qualification. Associated is a bank holding
company duly organized and validly existing under the laws of the State of
Wisconsin. Associated is registered with the Federal Reserve Board as a bank
holding company under the BHCA. Associated has the requisite corporate power and
authority and is in possession of all franchises, grants, authorizations,
licenses, permits, easements, consents, certificates, approvals and orders (the
"Associated Approvals") necessary to own, lease and operate its properties and
to carry on its business as it is now being conducted, including appropriate
authorizations from the Federal Reserve Board, except where the failure to be so
organized and existing or to have such power, authority and Associated Approvals
would not, individually or in the aggregate, have a Material Adverse Effect on
Associated. Associated has not received any notice of proceedings relating to
the revocation or modification of any such Associated Approvals. Associated is
duly qualified or licensed as a foreign corporation to do business, and is in
good standing, in each jurisdiction where the character of properties owned,
leased or operated by it or the nature of its activities makes such
qualification or licensing necessary,
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except for such failures to be so duly qualified or licensed and in good
standing that would not, either individually or in the aggregate, have a
Material Adverse Effect on Associated.
SECTION 3.02. Articles of Incorporation and Bylaws. Associated has
heretofore furnished to the Company a complete and correct copy of its Articles
of Incorporation and the Bylaws, as amended or restated. Such Articles of
Incorporation and Bylaws are in full force and effect. Associated is not in
violation of any of the provisions of its Articles of Incorporation or Bylaws.
SECTION 3.03. Capitalization. The outstanding capital stock of Associated
is, and the shares of Associated Common Stock to be issued pursuant to the
Merger, when so issued, will be, duly authorized, validly issued, fully paid and
non-assessable (except as provided in section 180.0622(2)(b) of Wisconsin
Business Corporation Law) and have not, and will not have, been issued in
violation of the preemptive rights of any person.
SECTION 3.04. Authority. Associated has the requisite corporate power and
authority to execute and deliver this Agreement and to perform its obligations
hereunder and to consummate the transactions contemplated hereby. The execution
and delivery of this Agreement by Associated and the consummation by Associated
of the transactions contemplated hereby have been duly and validly authorized by
all necessary corporate action on the part of Associated and no other corporate
proceedings on the part of Associated are necessary to authorize this Agreement
or to consummate the transactions so contemplated hereby. This Agreement has
been duly and validly executed and delivered by Associated and, assuming the due
authorization, execution and delivery by the Company, constitutes the legal,
valid and binding obligation of Associated.
SECTION 3.05. No Conflict; Required Filings and Consents.
(a) To the best knowledge of Associated, the execution and delivery of
this Agreement by Associated does not, and the performance of this
Agreement by Associated shall not, (i) conflict with or violate the
Articles of Incorporation or Bylaws of Associated, (ii) conflict with or
violate any laws applicable to Associated or by which its properties are
bound or affected, or (iii) result in any breach of or constitute a default
(or an event that with notice or lapse of time or both would become a
default) under, or give to others any rights of termination, amendment,
acceleration or cancellation of, or result in the creation of a lien or
encumbrance on any of the properties or assets of Associated pursuant to
any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Associated is
a party or by which Associated or its properties are bound or affected,
except for any such breaches, defaults or other occurrences that would not,
individually or in the aggregate, have a Material Adverse Effect on
Associated.
(b) To the best knowledge of Associated, the execution and delivery of
this Agreement by Associated does not, and the performance of this
Agreement by Associated shall not, require any consent, approval,
authorization or permit of, or filing with or notification to, any
governmental or regulatory authority, domestic or foreign, except (i) for
applicable requirements, if any, of the Securities Act, the Exchange Act,
Blue Sky Laws, the BHCA, the WBL, and the filing and recordation of
appropriate merger or other documents as required by Wisconsin Law, and
(ii) where the failure to obtain such consents, approvals, authorizations
or permits, or to make such filings or notifications, would not prevent or
delay consummation of the Merger, or otherwise prevent Associated from
performing its obligations under this Agreement, and would not have a
Material Adverse Effect on Associated.
SECTION 3.06. Compliance; Permits. To the best knowledge of Associated,
Associated is not in conflict with, or in default or violation of (i) any Law
applicable to Associated or by which its property is bound or affected, or (ii)
any note, bond, mortgage, indenture, contract, agreement, lease, license,
permit, franchise or other instrument or obligation to which Associated is a
party or by which Associated or any of its properties are bound or affected,
except for any such conflicts, defaults or violations which would not,
individually or in the aggregate, have a Material Adverse Effect on Associated.
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SECTION 3.07. Securities Reports; Financial Statements.
(a) As of the date of this Agreement, Associated has delivered to the
Company in the form filed with the SEC (x)(i) its Annual Reports on Form
10-K for the fiscal years ended December 31, 1992, 1993, 1994 and 1995,
respectively, (ii) its Quarterly Reports on Form 10-Q for the period ended
June 30, 1996, (iii) all definitive proxy statements relating to
Associated's meetings of shareholders (whether annual or special) held
since December 31, 1991, (iv) all Reports on Form 8-K filed by Associated
with the SEC since December 31, 1991, (v) all other reports or registration
statements (other than Reports on Form 10-Q not referred to in clause (ii)
above and registration statements on Form S-8) filed by Associated with the
SEC since December 31, 1991 and (vi) all amendments and supplements to all
such reports and registration statements filed by Associated with the SEC
since December 31, 1991 (collectively, the "Associated SEC Reports"). The
Associated SEC Reports, including all Associated SEC Reports filed after
the date of this Agreement, (y)(i) were or will be prepared in all material
respects in accordance with the requirements of applicable law and (ii) did
not at the time they were filed, or will not at the time they are filed,
contain any untrue statement of material fact or omit to state a material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading.
(b) Each of the consolidated financial statements (including, in each
case, any related notes thereto) contained in the Associated SEC Reports,
including any Associated SEC Reports filed since the date of this Agreement
and prior to or on the Effective Time, have been prepared in accordance
with generally accepted accounting principles applied on a consistent basis
throughout the periods involved (except as may be indicated in the notes
thereto) and each fairly presents the consolidated financial position of
Associated and its subsidiaries as of the respective dates thereof and the
consolidated results of its operations and changes in financial position
for the periods indicated, except that any unaudited interim financial
statements were or are subject to normal and recurring year-end adjustments
which were not or are not expected to be material in amount.
(c) Except as and to the extent set forth on the consolidated balance
sheet of Associated and its subsidiaries as of December 31, 1995, including
all notes thereto (the "Associated Balance Sheet"), neither Associated nor
its subsidiaries have any liabilities or obligations of any nature (whether
accrued, absolute, contingent or otherwise) that would be required to be
reflected on a balance sheet, or in the notes thereto, prepared in
accordance with generally accepted accounting principles, except (i) for
liabilities or obligations incurred in the ordinary course of business
since December 31, 1995, that would not, individually or in the aggregate,
have a Material Adverse Effect on Associated or its subsidiaries, taken as
a whole, or (ii) as otherwise reflected in the report referred to in clause
(x)(ii) of Section 3.07(a) hereof.
SECTION 3.08. Absence of Certain Changes or Events. Except as disclosed in
the Associated SEC Reports filed prior to the date of this Agreement, since
December 31, 1995, to the date of this Agreement, Associated and its
subsidiaries have conducted their businesses only in the ordinary course and in
a manner consistent with past practice and, since December 31, 1995, there has
not been (i) any change in the financial condition, results of operations or
business of Associated or its subsidiaries having a Material Adverse Effect on
Associated or its subsidiaries, taken as a whole, (ii) any damage, destruction
or loss (whether or not covered by insurance) with respect to any assets of
Associated or its subsidiaries having a Material Adverse Effect on Associated or
its subsidiaries, taken as a whole, (iii) any change by Associated in its
accounting methods, principles or practices, (iv) any revaluation by Associated
of any of its material assets in any material respect, or (v) to the date of
this Agreement, any entry by Associated or any of its subsidiaries into any
commitment or transactions material to Associated or its subsidiaries, taken as
a whole.
SECTION 3.09. Absence of Litigation. Except as disclosed in the Associated
Disclosure Schedule at Section 3.09 and in the Associated SEC Reports filed
prior to the date of this Agreement, there is no claim, action, suit,
litigation, proceeding, arbitration, investigation, or controversy of any kind
affecting Associated or any of Associated's subsidiaries pending or, to the
knowledge of Associated, threatened, except for matters which individually seek
damages not in excess of $100,000 and which otherwise will not have, and cannot
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reasonably be expected to have, a Material Adverse Effect on Associated or its
subsidiaries taken as a whole, and there are no uncured material violations, or
violations with respect to which material refunds or restitutions may be
required, cited in any compliance report to Associated or any of Associated's
subsidiaries as a result of an examination by any bank regulatory authority.
SECTION 3.10. Registration Statement; Proxy Statement. None of the
information supplied or to be supplied by Associated for inclusion in (a) the
Registration Statement (as defined in Section 6.01) (b) the Proxy
Statement/Prospectus (as defined in Section 6.01), or (c) any other document to
be filed with the SEC or other regulatory authority in connection with the
transactions contemplated hereby, at the respective time such documents are
filed and, in the case of the Registration Statement, when it becomes effective
and at the Effective Time, and with respect to the Proxy Statement/Prospectus,
when mailed, shall be false or misleading with respect to any material fact, or
omit to state any material fact necessary in order to make the statements
therein not misleading. In the case of the Proxy Statement/Prospectus or any
amendment thereof or supplement thereto, none of such information at the time of
the Meeting (as provided for in Section 6.02) shall be false or misleading with
respect to any material fact, or omit to state any material fact necessary to
correct any statement in any earlier communication with respect to the
solicitation of any proxy for the Meeting. All documents filed with the SEC or
other regulatory authority by Associated in connection with the Merger shall
comply as to form in all material respects with the provisions of applicable
law.
SECTION 3.11. Absence of Agreements. Associated is not a party to any
written agreement or memorandum of understanding with, or a party to any
commitment letter or similar undertaking to, or is subject to any order or
directive by, or is a recipient of any extraordinary supervisory letter which
restricts materially the conduct of its business (including any contract
containing covenants which limit the ability of Associated to compete in any
line of business or with any person or which involve any restriction of the
geographical area in which, or any method by which, Associated may carry on its
business (other than as may be required by Law or applicable regulatory
authorities)), or in any manner relates to its capital adequacy, its credit
policies or its management, except for those the existence of which has been
disclosed to the Company prior to the date of this Agreement, nor has Associated
been advised that any federal, state or governmental agency is contemplating
issuing or requesting (or is considering the appropriateness of issuing or
requesting) any such order, decree, agreement, memorandum of understanding,
extraordinary supervisory letter, commitment letter or similar submission,
except as may be disclosed by Associated in the Associated Disclosure Schedule
at Section 3.11.
SECTION 3.12. Taxes. Associated and its subsidiaries have timely filed all
Tax Returns required to be filed by them, and Associated and its subsidiaries
have timely paid and discharged all Taxes due in connection with or with respect
to the filing of such Tax Returns and have timely paid all other Taxes as are
due, except such as are being contested in good faith by appropriate proceedings
and with respect to which Associated is maintaining reserves adequate for their
payment. To the best knowledge of Associated, the liability for Taxes set forth
on each such Tax Return adequately reflects the Taxes required to be reflected
on such Tax Return. For purposes of this Section 3.12, references to Associated
and its subsidiaries include former subsidiaries of Associated for the periods
during which any such corporations were owned, directly or indirectly, by
Associated. Neither the IRS nor any other governmental entity or taxing
authority or agency is now asserting, either through audits or administrative
proceedings, court proceedings or otherwise, or, to the best of Associated's
knowledge, threatening to assert against Associated or any of its subsidiaries
any deficiency or claim for additional Taxes. Neither Associated nor any of its
subsidiaries has granted any waiver of any statute of limitations with respect
to, or any extension of a period for the assessment of, any Tax. There are no
tax liens on any assets of Associated or any of its subsidiaries. Neither
Associated nor any of its subsidiaries has received a ruling or entered into an
agreement with the IRS or any other governmental entity or taxing authority or
agency that would have a Material Adverse Effect on Associated or its
subsidiaries, taken as a whole, after the Effective Time. The accruals and
reserves for taxes reflected in the Associated Balance Sheet are adequate to
cover all Taxes accruable through the date thereof (including Taxes being
contested) in accordance with generally accepted accounting principles. No
agreements relating to allocating or sharing of Taxes exist among Associated and
its subsidiaries and no tax indemnities given by Associated or its subsidiaries
in connection with a sale of stock or assets remain in effect. Neither
Associated nor any of its
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subsidiaries is required to include in income either (i) any amount in respect
of any adjustment under Section 481 of the Code, or (ii) any installment sale
gain. Neither Associated nor any of its subsidiaries has made an election under
Section 341(f) of the Code.
SECTION 3.13. Brokers. No broker, finder or investment banker is entitled
to any brokerage, finder's or other fee or commission in connection with the
transactions contemplated by this Agreement based upon arrangements made by or
on behalf of Associated.
SECTION 3.14. Accounting and Tax Matters. To the best knowledge of
Associated, neither Associated nor any of its affiliates has through the date of
this Agreement taken or agreed to take any action that would prevent Associated
from accounting for the business combinations to be effected by the Merger as a
pooling-of-interests or would prevent the Merger from qualifying as a
reorganization under Section 368(a)(1)(A) of the Code.
SECTION 3.15. Full Disclosure. No statement contained in any document,
certificate, or other writing furnished or to be furnished by or at the
direction of Associated to the Company, in or pursuant to the provisions of,
this Agreement contains or shall contain any untrue statement of a material fact
or omits or shall omit to state any material fact necessary, in the light of the
circumstances under which it has been made, in order to make the statements
herein or therein not misleading.
ARTICLE IV
COVENANTS OF THE COMPANY
SECTION 4.01. Affirmative Covenants. The Company hereby covenants and
agrees with Associated that prior to the Effective Time, unless the prior
written consent of Associated shall have been obtained and except as otherwise
contemplated herein, it will and it will cause each Subsidiary to:
(a) operate its business only in the usual, regular and ordinary
course consistent with past practices;
(b) use reasonable efforts to preserve intact its business
organization and assets, maintain its rights and franchises, retain the
services of its officers and key employees and maintain its relationships
with customers;
(c) use reasonable efforts to maintain and keep its properties in as
good repair and condition as at present, ordinary wear and tear excepted;
(d) use reasonable efforts to keep in full force and effect insurance
and bonds comparable in amount and scope of coverage to that now maintained
by it;
(e) perform in all material respects all obligations required to be
performed by it under all material contracts, leases, and documents
relating to or affecting its assets, properties, and business;
(f) comply with and perform in all material respects all obligations
and duties imposed upon it by all applicable laws;
(g) intentionally left blank
(h) comply with the capital requirements set forth on Exhibit 4.01;
(i) purchase and sell securities in accordance with the guidelines set
forth on Exhibit 4.01; and
(j) with respect to the Bank, maintain as of December 31, 1996 and
thereafter a loan loss reserve of not less than 2 percent of period ending
loans.
SECTION 4.02. Negative Covenants. Except as specifically contemplated by
this Agreement, from the date of this Agreement until the Effective Time, the
Company shall not do, or permit either Subsidiary to do, without the prior
written consent of Associated, any of the following:
(a) (i) grant any general increase in compensation to its employees as
a class, or to its officers or directors, except in accordance with past
practice or as required by Law or increases which are not
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material, (ii) effect any change in retirement benefits to any class of
employees or officers (unless any such change shall be required by
applicable law) which would increase its retirement benefit liabilities,
(iii) adopt, enter into, amend or modify any employee benefit plan or make
any adjustments pursuant to any employee benefit plan, or (iv) enter into
or amend any employment, severance or similar agreements or arrangements
with any directors or officers, other than as is consistent with the normal
severance policies of the Company and its Subsidiaries in effect on the
date of this Agreement;
(b) except as set forth on Schedule 4.02, declare or pay any dividend
on, or make any other distribution in respect of, its outstanding shares of
capital stock;
(c) (i) redeem, purchase or otherwise acquire any shares of its
capital stock or any securities or obligations convertible into or
exchangeable for any shares of its capital stock, or any options, warrants,
conversion or other rights to acquire any shares of its capital stock or
any such securities or obligations; (ii) merge with or into any other
corporation or bank, permit any other corporation or bank to merge into it
or consolidate with any other corporation or bank, or effect any
reorganization or recapitalization; (iii) purchase or otherwise acquire any
assets or stock of any corporation, bank or other business; (iv) liquidate,
sell, dispose of, or encumber any assets or acquire any assets, other than
in the ordinary course of its business consistent with past practice; or
(v) split, combine or reclassify any of its capital stock or issue or
authorize or propose the issuance of any other securities in respect of, in
lieu of or in substitution for shares of its capital stock;
(d) issue, deliver, award, grant or sell, or authorize or propose the
issuance, delivery, award, grant or sale of, any shares of any class of its
capital stock (including shares held in treasury) or any rights, warrants
or options to acquire, any such shares;
(e) initiate, solicit or encourage (including by way of furnishing
information or assistance), or take any other action to facilitate, any
inquiries or the making of any proposal that constitutes, or may reasonably
be expected to lead to, any Competing Transaction (as such term is defined
below), or negotiate with any person in furtherance of such inquiries or to
obtain a Competing Transaction, or agree to or endorse any Competing
Transaction, or authorize or permit any of its officers, directors or
employees or any investment banker, financial advisor, attorney, accountant
or other representative retained by it or either Subsidiary to take any
such action, and the Company shall promptly notify Associated orally and in
writing of all of the relevant details relating to all inquiries and
proposals which it may receive relating to any of such matters; provided,
however, that nothing contained in this subsection (e) shall prohibit the
Board of Directors of the Company from furnishing or permitting any of its
officers, directors, employees, investment bankers, financial advisors,
attorneys, accountants or other representatives to furnish information to
any party that requests information as to the Company or its Subsidiaries
if (i) the Board of Directors of the Company, after consultation with and
based upon the written advice of independent counsel, determines in good
faith that such action is required for the Board of Directors of the
Company to comply with its fiduciary duties to shareholders imposed by law;
and (ii) prior to furnishing such information to such party, the Company
receives from such party an executed confidentiality agreement in customary
form and provides Associated seven days' notice of the Company's intent to
furnish such information. For purposes of this Agreement, "Competing
Transaction" shall mean any of the following involving the Company or its
Subsidiaries: (i) any merger, consolidation, share exchange, business
combination, or other similar transactions; (ii) any sale, lease, exchange,
mortgage, pledge, transfer or other disposition of ten percent or more of
assets in a single transaction or series of transactions, excluding from
the calculation of the percentage hereunder any such transactions
undertaken in the ordinary course of business and consistent with past
practice; (iii) any sale of ten percent or more of shares of capital stock
(or securities convertible or exchangeable into or otherwise evidencing, or
any agreement or instrument evidencing, the right to acquire capital
stock); (iv) any tender offer or exchange offer for ten percent or more of
outstanding shares of capital stock; (v) any solicitation of proxies in
opposition to approval by the Company's shareholders of the Merger; (vi)
the filing of an acquisition application (or the giving of acquisition
notice) whether in draft or final form under the BHCA or the Change in Bank
Control Act with respect to the Company or the Subsidiaries; (vii) any
person shall have acquired beneficial ownership or the right to acquire
beneficial ownership of, or any "group" (as such term is
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defined under Section 13(d) of the Exchange Act and the rules and
regulations promulgated thereunder) shall have been formed which
beneficially owns or has the right to acquire beneficial ownership of, 10%
or more of the then outstanding shares of capital stock; or (viii) any
public announcement of a proposal, plan or intention to do any of the
foregoing;
(f) propose or adopt any amendments to the corporate charter or Bylaws
in any way materially adverse to Associated;
(g) except in their fiduciary capacities for the account of customers,
purchase any shares of Associated Common Stock;
(h) change any of its methods of accounting in effect at December 31,
1995, or change any of its methods of reporting income or deductions for
federal income tax purposes from those employed in the preparation of the
federal income tax returns for the taxable year ending December 31, 1995,
except as may be required by law or generally accepted accounting
principles;
(i) subject to section 4.01(i), change any lending, investment,
liability management or other material policies concerning the business or
operations of the Company or its Subsidiaries in any material respect;
organize any new subsidiaries or enter into any new non-banking line of
business whether or not permissible under applicable federal or state law,
or make any material changes in its operations;
(j) (i) incur or assume any material obligation or liability (except
deposit liabilities in the ordinary course of business), including without
limitation any obligation for borrowed money, whether or not evidenced by a
note, bond, debenture or similar instrument and whether or not being
incurred to reduce other existing liabilities, or make any loan (not
including any loan renewal of a loan not then classified as "substandard,"
"doubtful," "loss," "other loans especially mentioned" or any comparable
classifications by the Company, the Subsidiaries or banking regulators) or
investment (including U.S. Treasury Securities) in an amount greater than
$100,000.00, (ii) assume, guarantee, endorse or otherwise become liable or
responsible (whether directly, contingent or otherwise) for the obligations
of any other person or entity; (iii) mortgage, license, pledge or grant a
security interest in any of its material assets or allow to exist any
material lien thereon; except (A) for liabilities and obligations
(including corporate debt issuances) incurred in the ordinary course of
business consistent with past practices and in amounts not material to the
Company or its Subsidiaries; and (B) as may be required under existing
agreements to which the Company or either Subsidiary is a party; (iv)
acquire assets (including equipment) or securities in excess of $25,000 in
the aggregate (excluding loans to customers and investments permitted in
(i) above); (vi) pay, discharge, or satisfy any debts or claims not in the
ordinary course of business and consistent with past practices and in no
event with a value in excess of $20,000.00 individually; (vii) settle any
claim, action, suit, litigation, proceeding, arbitration, investigation or
controversy of any kind, for any amount in excess of $25,000.00 or in any
manner which would restrict in any material respect the operations or
business of the Company or its Subsidiaries; (viii) purchase any new
financial product or instrument which involves entering into a contract
with a term of six months or longer, or (ix) take any action or fail to
take any action which individually or in the aggregate can be expected to
have a Material Adverse Effect on the Company or its Subsidiaries, taken as
a whole; or
(k) agree in writing or otherwise to do any of the foregoing.
SECTION 4.03. Intentionally left blank.
SECTION 4.04. Access and Information.
(a) Prior to the Effective Time and upon reasonable notice, and
without unreasonable disruption to the business carried on by the Company
or its Subsidiaries, the Company shall (and shall cause its Subsidiaries
to) afford to Associated's officers, employees, accountants, legal counsel
and other representatives access, during normal business hours, to all its
properties, books, contracts, commitments and records (other than Company
board of director minutes which exclusively discuss merger proposals).
Prior to the Effective Time, the Company shall (and shall cause the
Subsidiaries to) furnish promptly to Associated (i) a copy of each Company
Report filed by it (to the extent permitted by Law) after the date
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of this Agreement and prior to the Effective Time pursuant to the
requirements of federal or state securities laws, the BHCA, any other
federal or state banking laws or any other applicable laws promptly after
such documents are available, (ii) the monthly consolidated financial
statements of the Company and the Subsidiaries; (iii) the unaudited
consolidated financial statements of the Company and the Subsidiaries for
the year ended December 31, 1995; (iv) a summary of any action taken by the
Board of Directors, or any committee thereof, of the Company and its
Subsidiaries; and (v) all other information concerning the business,
properties and personnel of the Company or its Subsidiaries as Associated
may reasonably request.
(b) Any information provided to Associated by the Company or its
Subsidiaries, whether prior to or subsequent to the date of this Agreement,
shall be kept confidential by the representatives of Associated (and shall
be used by them only in connection with this Agreement and the transactions
contemplated hereby) except to the extent that (i) it was already known to
such representatives when received, (ii) it hereafter becomes lawfully
obtainable from other sources, or (iii) it is required to be disclosed by
Associated in any document required to be filed with any government agency.
Upon any termination of this Agreement pursuant to Section 8 hereof,
Associated agrees to promptly return all information and documents that it
has obtained from the Company in connection herewith.
SECTION 4.05. Affiliates; Accounting and Tax Treatment. Within thirty (30)
days after the date of this Agreement, (a) the Company shall deliver to
Associated a letter identifying all persons who are then "affiliates" of the
Company, including, without limitation, all directors and executive officers of
the Company for purposes of Rule 145 promulgated under the Securities Act and
(b) the Company shall advise the persons identified in such letter of the resale
restrictions imposed by applicable securities laws and required to cause the
Merger to qualify for pooling-of-interests accounting treatment, and shall use
reasonable efforts to obtain from each person identified in such letter a
written agreement, substantially in the form attached hereto as Exhibit 4.05.
The Company shall use reasonable efforts to obtain from any person who becomes
an affiliate of the Company after the Company's delivery of the letter referred
to above, and on or prior to the Effective Time, a written agreement
substantially in the form attached hereto as Exhibit 4.05 as soon as practicable
after attaining such status. The Company will use its best efforts to cause the
Merger to qualify for pooling-of-interests accounting treatment and as a
reorganization under Section 368(a)(1)(A) of the Code.
SECTION 4.06. Expenses.
(a) Except as provided in Section 8.02, below, all Expenses (as
described below) incurred by Associated and the Company shall be borne
solely and entirely by the party which has incurred the same, except that
the parties shall share equally in the expense of printing and filing the
Registration Statement and the Proxy Statement/Prospectus and all SEC and
other regulatory filing fees incurred in connection herewith.
(b) "Expenses" as used in this Agreement shall include all reasonable
out-of-pocket expenses (including without limitation, all fees and expenses
of counsel, accountants, investment bankers, experts and consultants to the
party and its affiliates) incurred by a party or on its behalf in
connection with or related to the authorization, preparation and execution
of this Agreement, the solicitation of shareholder approvals and all other
matters related to the closing of the transactions contemplated hereby.
SECTION 4.07. Delivery of Shareholder List. The Company shall arrange to
have its transfer agent deliver to Associated or its designee, from time to time
prior to the Effective Time, a true and complete list setting forth the names
and addresses of the shareholders of the Company, their holdings of stock as of
the latest practicable date, and such other shareholder information as
Associated may reasonably request.
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ARTICLE V
COVENANTS OF ASSOCIATED
SECTION 5.01. Affirmative Covenants. Associated hereby covenants and agrees
with the Company that prior to the Effective Time, unless the prior written
consent of the Company shall have been obtained, and except as otherwise
contemplated herein it will:
(a) maintain its corporate existence in good standing and maintain all
books and records in accordance with accounting principles and practices as
utilized in Associated's financial statements applied on consistent basis;
(b) conduct its business in a manner that does not violate any law,
except for possible violations which individually or in the aggregate do
not, and insofar as reasonably can be foreseen, in the future will not,
have a Material Adverse Effect on Associated or its subsidiaries, taken as
a whole; and
(c) will, to the best of its ability and in all material respects, (i)
comply with applicable Blue Sky Laws and regulations, the Securities Act,
and the Exchange Act, and (ii) remain qualified under the Exchange Act and
the rules and regulations thereunder.
SECTION 5.02. Access and Information.
(a) After the date of this Agreement and prior to the Effective Time,
upon reasonable notice, Associated shall (and shall cause each of its
subsidiaries to) furnish promptly to the Company (i) a copy of each
Associated SEC Report filed by it or received by it (to the extent
permitted by law) after the date of this Agreement and prior to the
Effective Time pursuant to the requirements of federal or state securities
laws, the BHCA, any other federal or state banking laws or any other
applicable laws promptly after such documents are available, and (ii) all
other information concerning the business, properties and personnel of
Associated or its subsidiaries as the Company may reasonably request.
(b) Any information provided to the Company by Associated whether
prior to or subsequent to the date of this Agreement shall be kept
confidential by the representatives of the Company (and shall be used by
them only in connection with this Agreement and the transactions
contemplated hereby) except to the extent that (i) it was already known to
such representatives when received, (ii) it hereafter becomes lawfully
obtainable from other sources, or (iii) it is required to be disclosed by
the Company in any document required to be filed with the Company or any
government authority or agency.
SECTION 5.03. Accounting and Tax Treatment. Associated will use its best
efforts to cause the Merger to qualify for pooling-of-interests accounting
treatment and as a reorganization under sec. 368(a)(1)(A) of the Code.
ARTICLE VI
ADDITIONAL AGREEMENTS
SECTION 6.01. Registration Statement. As promptly as practicable after the
execution of this Agreement, Associated shall prepare and file a registration
statement on Form S-4 (the registration statement together with the amendments
thereto are defined as the "Registration Statement" and the prospectus and proxy
materials contained therein are defined as the "Proxy Statement/Prospectus")
with the SEC covering the Associated Common Stock to be issued in the Merger
(subject to the immediately following sentence), with a view toward permitting
the Registration Statement to become effective as soon as reasonably
practicable. Associated does not undertake to file post-effective amendments to
Form S-4 or to file a separate registration statement to register the sale of
Associated Common Stock by affiliates of the Company pursuant to Rule 145
promulgated under the Securities Act. The Company will furnish to Associated all
information concerning the Company and its Subsidiaries required to be set forth
in the Registration Statement and Associated will provide the Company and its
counsel the opportunity to review and approve such information as set forth in
the Registration Statement and Proxy Statement/Prospectus. Associated and the
Company will each render to the other its full cooperation in preparing, filing,
prosecuting the filing of, and amending the
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Registration Statement such that it comports at all times with the requirements
of the Securities Act and the Exchange Act. Specifically, but without
limitation, each will promptly advise the other if at any time before the
Effective Time any information provided by it for inclusion in the Registration
Statement appear to have been, or shall have become, incorrect or incomplete and
will furnish the information necessary to correct such misstatements or
omissions. As promptly as practicable after the effective date of the
Registration Statement, the Company will mail to its shareholders (a) the Proxy
Statement/Prospectus, and (b) as promptly as practicable after approval thereof
by Associated, such other supplementary proxy materials as may be necessary to
make the Proxy Statement/Prospectus comply with the requirements of the
Securities Act and the Exchange Act. Except as provided above and except with
the prior written consent of Associated, the Company will not mail or otherwise
furnish or publish to shareholders of the Company any proxy solicitation
material or other material relating to the Merger that constitutes a
"prospectus" within the meaning of the Securities Act. Associated shall also
take any reasonable action required to be taken under any applicable Blue Sky
Laws in connection with the issuance of the shares of Associated Common Stock to
be issued as set forth in this Agreement and the Company and the Subsidiaries
shall furnish all information concerning the Company and the Subsidiaries, and
the holders of the Company's Common Stock and other assistance as Associated may
reasonably request in connection with such action.
SECTION 6.02. Meeting of Shareholders. The Company and its officers and
directors shall: (a) cause the Company's shareholders Meeting to be duly called
and held as soon as practicable to consider and vote upon the Merger and any
related matters in accordance with the applicable provisions of applicable law,
(b) submit this Agreement to the Company's shareholders together with a
recommendation for approval by the Board of Directors of the Company, (c)
solicit the approval thereof by the Company's shareholders by mailing or
delivering to each shareholder a combined Prospectus/Proxy Statement, and (d)
use their best efforts to obtain the approval and adoption of the Merger by the
requisite percentage of the Company's shareholders; provided, however, that the
obligations of the Company's officers and directors under this Section 6.02 are
subject to any action which the officers and directors, after consultation with
and based upon the written advice of independent legal counsel, determine in
good faith is required to comply with their fiduciary duties to shareholders
imposed by law.
SECTION 6.03. Appropriate Action; Consents; Filings. The Company and
Associated shall use all reasonable efforts to (i) take, or cause to be taken,
all appropriate action, and do, or cause to be done, all things necessary,
proper or advisable under applicable law to consummate and make effective the
transactions contemplated by this Agreement; (ii) obtain all consents, licenses,
permits, waivers, approvals, authorizations or orders required under Law
(including, without limitation, all foreign and domestic (federal, state and
local) governmental and regulatory rulings and approvals and parties to
contracts) in connection with the authorization, execution and delivery of this
Agreement and the consummation by them of the transactions contemplated hereby
and thereby, including, without limitation, the Merger; and (iii) make all
necessary filings, and thereafter make any other required submissions, with
respect to this Agreement and the Merger required under (A) the Securities Act
and the Exchange Act and the rules and regulations thereunder, and any other
applicable federal or state securities laws, (B) any applicable federal or state
banking laws and (C) any other applicable law; provided that Associated and the
Company shall cooperate with each other in connection with the making of all
such filings, including providing copies of all such documents to the non-filing
party and its advisors prior to filing and, if requested, to accept all
reasonable additions, deletions or changes suggested in connection therewith.
The Company and Associated shall furnish all information required for any
application or other filing to be made pursuant to the rules and regulations of
any applicable law (including all information required to be included in the
Proxy Statement/Prospectus and the Registration statement) in connection with
the transactions contemplated by this Agreement. In case at any time after the
Effective Time any further action is necessary or desirable to carry out the
purposes of this Agreement, the proper officers and directors of each party to
this Agreement shall use all reasonable efforts to take all such necessary
action.
SECTION 6.04. Notification of Certain Matters. The Company shall give
prompt notice to Associated, and Associated shall give prompt notice to the
Company, of (i) the occurrence, or non-occurrence, of any event the occurrence,
or non-occurrence, of which would be likely to cause any representation or
warranty
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contained in this Agreement to be untrue or inaccurate, and (ii) any failure of
the Company or Associated, as the case may be, to comply with or satisfy any
covenant, condition or agreement to be complied with or satisfied by it
hereunder; provided, however, that the delivery of any notice pursuant to this
sec. 6.04 shall not limit or otherwise affect the remedies available hereunder
to the party receiving such notice.
SECTION 6.05. Public Announcements. Associated and the Company shall
consult with each other before issuing any press release or otherwise making any
public statements with respect to the Merger and shall not issue any such press
release or make any such public statement prior to such consultation and with
mutual consent of both parties, except as may be required by law or any listing
agreement with the National Association of Securities Dealers.
SECTION 6.06. Topping Fee.
(a) Provided that Associated has not breached in any material respect
its obligations under this Agreement, as a condition and inducement to
Associated's willingness to enter into and perform this Agreement, the
Company shall pay Associated a fee ("Topping Fee") of $144,000 within two
(2) days subsequent to a termination of this Agreement caused directly or
indirectly by the following:
(i) (A) The Board of Directors of the Company (1) shall have
withdrawn, modified or amended in any respect its approval or
recommendation of this Agreement or the transactions contemplated
thereby, or (2) shall not at the appropriate time have recommended or
shall have withdrawn, modified or amended in any respect its
recommendation that its shareholders vote in favor of this Agreement, or
(3) shall not have included such recommendation in the Proxy
Statement/Prospectus; or (B) the Board of Directors of the Company shall
have resolved to do any of the foregoing; or
(ii) the Company violates sec. 4.02(e) hereof.
(b) The Topping Fee shall be payable in immediately available funds
and shall be considered liquidated damages and in addition to Associated's
right to be reimbursed by the Company for fees and expenses as provided in
sec. 8.02(b) of this Agreement.
SECTION 6.07. Environmental Matters. In the event Drake Environmental, Inc.
(the "Environmental Consultant") discovers or determines the existence of any
environmental condition (including, without limitation, a spill, discharge or
contamination) the result of which may require investigative or remedial action
pursuant to any federal, state or local law, statute or regulation or may be the
basis for the assertion of any third party claims, including the claims of
government entities, Associated shall promptly notify the Company thereof and
the Company shall, at its sole cost and expense, proceed with due diligence to
take reasonably appropriate action in response thereto.
SECTION 6.08. Employee Matters.
(a) Successor Status; Further Assurances. Associated hereby expressly
assumes and agrees to perform or cause to be performed all of the
obligations of the Company and its Subsidiaries and their "successors"
under the terms of (i) the Central Bank Deferred Compensation Plan, as
amended; (ii) the Central Bank Executive Salary Continuation Agreements, as
amended; (iii) the Central Bank post-retirement supplemental medical and
dental insurance coverage for a five-year period, as approved by Board
Resolution of December 18, 1989; (iv) the Central Bank early retirement
health and dental insurance coverage, as approved by Board Resolution of
November 21, 1994; and (v) the continued medical coverage for retirees and
dependents of retirees of the Bank under the terms of the Wisconsin Bankers
Association Health Plan or any successor plan (retiree or dependent pays
premium).
(b) Employment Agreements. Associated undertakes to cause its
subsidiaries after the Effective Time to perform the obligations of the
Bank under the three Employment Agreements, each dated as of January 2,
1996, with Paul O. Olm, Arlene Stockinger and Ronald W. Koeppl,
respectively; the Separation Agreement dated November , 1996 with Richard
Woodcock; and the Employment Agreement dated January 2, 1996 or the
Separation Agreement dated November , 1996, whichever is applicable, with
Andrew Spencer. The Bank agrees to take all actions necessary to terminate
the
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Employment Agreement with Mr. Woodcock and use its best efforts to
terminate the Employment Agreement with Mr. Spencer.
(c) Other Benefits. To the extent deemed necessary by Associated,
Associated shall take such actions as reasonably necessary to cause any
transition and/or merger of welfare and other generally applicable benefit
plans, policies and practices of the Company or its Subsidiaries not
otherwise expressly dealt with in this section 6.08 (including the
Company's 401(k) Plan, Long Term Disability Plan and Term Plan) to or with
Associated's plans, policies and practices.
SECTION 6.09 Indemnification. Associated acknowledges the indemnification
provisions set forth in Article IX of the Company's By-Laws. Associated further
acknowledges that, to the extent permitted by law, Associated will, as a result
of the Merger, be obligated to fulfill any obligations arising under such ByLaws
with respect to claims pertaining to any matter or fact arising, existing or
occurring prior to the Effective Time regardless of whether any such claim is
asserted prior to, at or after the Effective Time.
ARTICLE VII
CONDITIONS OF MERGER
SECTION 7.01. Conditions to Obligation of Each Party to Effect the
Merger. The respective obligations of each party to effect the Merger shall be
subject to the satisfaction at or prior to the Effective Time of the following
conditions:
(a) Effectiveness of the Registration Statement. The Registration
Statement shall have been declared effective by the SEC under the
Securities Act. No stop order suspending the effectiveness of the
Registration Statement shall have been issued by the SEC and no proceedings
for that purpose shall, on or prior to the Effective Time, have been
initiated or, to the knowledge of Associated or the Company, threatened by
the SEC. Associated shall have received all other federal or state
securities permits and other authorizations necessary to issue Associated
Common Stock in exchange for the Company Common Stock and to consummate the
Merger.
(b) Shareholder Approvals. This Agreement and the Merger shall have
been approved and adopted by the requisite vote of the shareholders of the
Company.
(c) Regulatory Approvals. The Merger shall have been approved by the
Federal Reserve Board, which approval shall not contain any condition which
is not reasonably satisfactory to Associated or the Company, all conditions
required to be satisfied prior to the Effective Time imposed by the terms
of such approvals shall have been satisfied and all waiting periods
relating to such approvals shall have expired.
(d) No Order. No federal or state governmental or regulatory authority
or other agency or commission, or federal or state court of competent
jurisdiction, shall have enacted, issued, promulgated, enforced or entered
any statute, rule, regulation, executive order, decree, injunction or other
order (whether temporary, preliminary or permanent) which is in effect
restricting, preventing or prohibiting consummation of the transactions
contemplated by this Agreement.
SECTION 7.02. Additional Conditions to Obligations of Associated. The
obligations of Associated to effect the Merger are also subject to the following
conditions:
(a) Representations and Warranties. Each of the representations and
warranties of the Company contained in this Agreement shall be complete and
correct in all material respects (except that where any statement in a
representation or warranty expressly includes a standard of materiality,
such statement shall be true and correct in all respects) as of the
Effective Time as though made at the Effective Time with the same force and
effect as if made on and as of the Effective Time. Associated shall have
received a certificate of the Chief Executive Officer of the Company to
that effect.
(b) Agreements and Covenants. The Company shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or
prior to the Effective Time.
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(c) Consents Obtained. All material consents, waivers, approvals,
authorizations or orders required to be obtained, and all filings required
to be made by the Company for the authorization, execution and delivery of
this Agreement and the consummation by it of the transactions contemplated
hereby shall have been obtained and made by the Company.
(d) No Challenge. There shall not be pending any action, proceeding or
investigation before any court or administrative agency or by any
government agency or any other person (i) challenging or seeking material
damages in connection with the Merger or the conversion of the Company
Common Stock into Associated Common Stock pursuant to the Merger, or (ii)
seeking to restrain, prohibit or limit the exercise of full rights of
ownership or operation by Associated or its subsidiaries of all or any
portion of the business or assets of the Company or its Subsidiaries, which
in either case is reasonably likely to have a Material Adverse Effect on
either the Company or its Subsidiaries, taken as a whole, or Associated or
its subsidiaries, taken as a whole.
(e) Opinion of Counsel. Associated shall have received from Davis &
Kuelthau or other independent counsel for the Company reasonably
satisfactory to Associated, an opinion dated the Effective Time, in form
and substance reasonably satisfactory to Associated, covering the matters
set forth in Exhibit 7.02 hereto, which opinion shall be based on such
assumptions and containing such qualifications and limitations as are
appropriate and reasonably satisfactory to Associated.
(f) Tax Opinion. An opinion of Reinhart, Boerner, Van Deuren, Norris &
Rieselbach, s.c. independent counsel for Associated, reasonably
satisfactory to Associated to the effect that the Merger will be treated
for federal income tax purposes as a reorganization within the meaning of
Section 368(a) of the Code, and that Associated and the Company will each
be a party to that reorganization within the meaning of Section 368(b) of
the Code, dated on or about the date that is two business days prior to the
date the Proxy Statement/Prospectus is first mailed to shareholders of the
Company, shall have been delivered and shall not have been withdrawn or
modified in any material respect.
(g) Intentionally left blank.
(h) Pooling Opinions. Associated shall have received an opinion from
KPMG Peat Marwick LLP to the effect that the Merger qualifies for
pooling-of-interests accounting treatment if consummated in accordance with
this Agreement.
(i) Affiliate Agreements. Associated shall have received from each
person who is identified in the affiliate letter as an "affiliate" of the
Company a signed affiliate agreement in the form attached hereto as Exhibit
4.05.
(j) Burdensome Condition. There shall not be any action taken, or any
statute, rule, regulation or order enacted, entered, enforced or deemed
applicable to the Merger, by any federal or state governmental entity
which, in connection with the grant of any regulatory approval, imposes any
condition or restriction upon the Company or Associated or their respective
subsidiaries (or the Surviving Corporation or its subsidiaries after the
Effective Time), including, without limitation, any requirement to raise
additional capital, which would so materially adversely impact the economic
or business benefits of the transactions contemplated by this Agreement as
to render inadvisable the consummation of the Merger.
(k) Fractional Shares; Dissenters. The aggregate of (i) the fractional
share interests in Associated Common Stock to be paid in cash pursuant to
Section 1.07 of this Agreement and (ii) the shares of Associated Common
Stock that would be issuable by virtue of the Merger with respect to shares
of the Company's Common Stock outstanding on the record date for the
meeting of the Company's shareholders to consider the Merger that will not
be converted into Associated Common Stock due, directly or indirectly, to
the exercise of dissenters' rights, if available under Wisconsin Law, shall
not be more than 10% of the maximum aggregate number of shares of
Associated Common Stock which could be issued as a result of the Merger.
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(l) Environmental Report. Associated shall have received from the
Environmental Consultant a written environmental evaluation of the
Company's Property evidencing that:
(i) The Company's Property complies with all Environmental Laws;
(ii) No capital improvements should be reasonably be required to
maintain compliance with all Environmental Laws; and
(iii) There are no material contingent liabilities affecting the
Company's Property arising under Environmental Laws or under
Environmental Permits;
or the Company shall have complied with all of its obligations under
Section 6.07.
(m) Intentionally left blank
(n) Earnings. The Company's aggregate consolidated after-tax earnings
during the 3 month period ending December 31, 1996 shall be at least
$200,000. For purposes hereof, such earnings shall be calculated as if all
extraordinary expenses of the Company and its Subsidiaries which occur in
connection with the transaction contemplated hereby did not occur. Such
extraordinary expenses shall include, but not be limited to, the additional
amount added to the Loan Loss Reserve, the loss (if any) from the sale of
certain securities and the expenses of providing for the current funding of
the Separation Agreements with Messrs. Woodcock and Spencer.
SECTION 7.03. Additional Conditions to Obligations of the Company. The
obligation of the Company to effect the Merger is also subject to the following
conditions:
(a) Representations and Warranties. Each of the representations and
warranties of Associated contained in this Agreement shall be complete and
correct in all material respects (except that where any statement in a
representation or warranty expressly includes a statement of materiality,
such statement shall be true and correct in all respects) as of the
Effective Time as though made on and as of the Effective Time with the same
force and effect as if made on and as of the Effective Time. The Company
shall have received a certificate of the President of Associated to that
effect.
(b) Agreements and Covenants. Associated shall have performed or
complied in all material respects with all agreements and covenants
required by this Agreement to be performed or complied with by it on or
prior to the Effective Time.
(c) Consents Obtained. All material consents, waivers, approvals,
authorizations or orders required to be obtained, and all filings required
to be made by Associated for the authorization, execution and delivery of
this Agreement and the consummation by it of the transactions contemplated
hereby shall have been obtained and made by Associated.
(d) Opinion of Counsel. The Company shall have received from Reinhart,
Boerner, Van Deuren, Norris & Rieselbach, s.c. or other independent counsel
for Associated reasonably satisfactory to the Company, an opinion dated the
Effective Time, in form and substance reasonably satisfactory to the
Company, covering the matters set forth in Exhibit 7.03, which opinions
shall be based on such assumptions and contain such qualifications and
limitations as are appropriate and reasonably satisfactory to the Company.
(e) Tax Opinion. An opinion of Reinhart, Boerner, Van Deuren, Norris &
Rieselbach, s.c., counsel for Associated, reasonably satisfactory to the
Company to the effect that the Merger will be treated for federal income
tax purposes as a reorganization within the meaning of Section 368(a) of
the Code, and that Associated and the Company will each be a party to that
reorganization within the meaning of Section 368(b) of the Code, dated on
or about the date that is two business days prior to the date the Proxy
Statement/Prospectus is first mailed to shareholders of the Company, shall
have been delivered and shall not have been withdrawn or modified in any
material respect.
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ARTICLE VIII
TERMINATION, AMENDMENT AND WAIVER
SECTION 8.01. Termination.
(a) This Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of the matters presented
in connection with the Merger by the shareholders of the Company:
(i) by mutual written consent of Associated and the Company;
(ii) by the Company or Associated (A) if there has been a breach in
any material respect (except that where any statement in a
representation or warranty expressly includes a standard of materiality,
such statement shall have been breached in any respect) of any
representation, warranty, covenant or agreement on the part of the
Company, on the one hand, or Associated, on the other hand,
respectively, set forth in this Agreement, or (B) if any representation
or warranty of the Company, on the one hand, or Associated, on the other
hand, respectively, shall be discovered to have become untrue in any
material respect (except that where any statement in a representation or
warranty expressly includes a standard of materiality, such statement
shall have become untrue in any respect), in either case which breach or
other condition has not been cured within 10 business days following
receipt by the nonterminating party of notice of such breach or other
condition; provided, however, this Agreement may not be terminated
pursuant to this clause (ii) by the breaching party or party making any
representation or warranty which shall have become untrue in any
material respect;
(iii) by either Associated or the Company if any permanent
injunction preventing the consummation of the Merger shall have become
final and nonappealable;
(iv) by either Associated or the Company if the Merger shall not
have been consummated before March 31, 1997, for a reason other than the
failure of the terminating party to comply with its obligations under
this Agreement;
(v) by either Associated or the Company if the Federal Reserve
Board or the Wisconsin Commissioner has denied approval of the Merger
and neither Associated nor the Company has, within thirty (30) days
after the entry of such order denying approval, filed a petition seeking
review of such order as provided by applicable law;
(vi) subject to Section 1.06(a), by either the Company or
Associated, if the Daily Average Price is lower than $35;
(vii) by Associated, if the Company fails to perform all of its
obligations under Section 6.07; or
(viii) by Associated, if the condition set forth in Section 7.02(k)
is not satisfied.
(b) In the event of termination and abandonment by any party as
provided above, written notice shall forthwith be given to the other
parties, which notice shall specifically describe the basis for such
termination.
SECTION 8.02. Effect of Termination.
(a) If the Merger is not consummated as the result of termination of
this Agreement caused otherwise than by breach of a party hereto, the
Company and Associated each shall pay its own Expenses (as defined in
Section 4.06 above) and this Agreement shall immediately terminate, except
as set forth in Section 9.01 hereof, and neither the Company nor Associated
shall have any liability under this Agreement for damages or otherwise.
(b) If termination of this Agreement shall have been caused by breach
of this Agreement by any party hereto, then, in addition to other remedies
at law or equity for breach of this Agreement, the party so found to have
breached this Agreement shall indemnify and reimburse the other party for
its expenses.
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The foregoing subsections (a) and (b) are in addition to and shall not
limit the obligations of the Company pursuant to Section 6.06 of this
Agreement.
SECTION 8.03. Amendment. This Agreement may be amended by the parties
hereto by action taken by or on behalf of their respective Boards of Directors
at any time prior to the Effective Time; provided, however, that, after approval
of the Merger by the shareholders of the Company, no amendment may be made which
would reduce the amount or change the type of consideration into which each
Share shall be converted pursuant to this Agreement upon consummation of the
Merger. This Agreement may not be amended except by an instrument in writing
signed by the parties hereto.
SECTION 8.04. Waiver. At any time prior to the Effective Time, any party
hereto may (a) extend the time for the performance of any of the obligations or
other acts of the other party hereto, (b) waive any inaccuracies in the
representations and warranties contained herein or in any document delivered
pursuant hereto and (c) waive compliance with any of the agreements or
conditions contained herein. Any such extension or waiver shall be valid if set
forth in an instrument in writing signed by the party or parties to be bound
thereby.
ARTICLE IX
GENERAL PROVISIONS
SECTION 9.01. Non-Survival of Representations, Warranties and
Agreements. The representations, warranties and agreements in this Agreement
shall terminate at the Effective Time or upon the termination of this Agreement
pursuant to Article VIII, except that the agreements set forth in Article I
shall survive the Effective Time indefinitely and those set forth in Sections
4.04(b), 4.06, 5.02(b), 6.06, 8.02 and Article IX hereof shall survive
termination indefinitely.
SECTION 9.02. Disclosure Schedules. The schedules and information set forth
in the Disclosure Schedules specifically refer to the Section (and paragraph, if
applicable) of this Agreement to which such schedule and information is
responsive. The Disclosure Schedules shall not vary, change or alter the literal
meaning of the representations and warranties of the parties contained in this
Agreement, other than creating exceptions thereto which are directly responsive
to the language of the representations and warranties contained in this
Agreement.
SECTION 9.03. Notices. All notices and other communications given or made
pursuant hereto shall be in writing and shall be deemed to have been duly given
or made as of the date delivered or mailed if delivered personally or mailed by
registered or certified mail (postage prepaid, return receipt requested) to the
parties at the following addresses (or at such other address for a party as
shall be specified by like changes of address) and shall be effective upon
receipt:
(a) If to Associated:
Associated Banc-Corp
112 North Adams Street
P.O. Box 13307
Green Bay, WI 54307-3307
Telecopier: (414) 433-3261
Attention: H. B. Conlon
With a copy to:
Reinhart, Boerner, Van Deuren,
Norris & Rieselbach, s.c.
1000 North Water Street, Suite 2100
Milwaukee, WI 53202
Telecopier: (414) 298-8097
Attention: Richard W. Graber
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(b) If to Company:
Centra Financial, Inc.
10701 West National Avenue
West Allis, WI 53227
Telecopier: (414) 321-8962
Attention: Andrew Spencer, Secretary
With a copy to:
Davis & Kuelthau, S.C.
111 East Kilbourn Avenue, Suite 1400
Milwaukee, WI 53202-6613
Telecopier: 414-276-9369
Attention: Erich Mildenberg, Esq.
SECTION 9.04. Certain Definitions. For purposes of this Agreement, the
term:
(a) "affiliate" means a person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, the first mentioned person; including, without limitation,
any partnership or joint venture in which the Company (either alone, or
through or together with any other subsidiary) has, directly or indirectly,
an interest of 5% or more;
(b) "beneficial owner" with respect to any Shares, means a person who
shall be deemed to be the beneficial owner of such Shares (i) which such
person or any of its affiliates or associates beneficially owns, directly
or indirectly, (ii) which such person or any of its affiliates or
associates (as such term defined in Rule 12b-2 of the Exchange Act) has,
directly or indirectly, (A) the right to acquire (whether such right is
exercisable immediately or subject only to the passage of time), pursuant
to any agreement, arrangement or understanding or upon the exercise of
consideration rights, exchange rights, warranties or options, or otherwise,
or (B) the right to vote pursuant to any agreement, arrangement or
understanding, (iii) which are beneficially owned, directly or indirectly,
by any other persons with whom such person or any of its affiliates or
associates has any agreement, arrangement or understanding for the purposes
of requiring, holding, voting or disposing of any Shares or (iv) pursuant
to Section 13(d) of the Exchange Act and any rules or regulations
promulgated thereunder;
(c) "business day" means any day other than a day on which banks in
Wisconsin are required or authorized to be closed;
(d) "control" (including the terms "controlled by" and "under common
control with") means the possession, directly or indirectly or as trustee
or executor, of the power to direct or cause the direction of the
management or policies of a person, whether through the ownership of stock
or as trustee or executor, by contract or credit arrangement or otherwise;
and
(e) "person" means an individual, corporation, partnership,
association, trust, unincorporated organization, other entity or group (as
defined in Section 13(d) of the "Exchange Act); and
SECTION 9.05. Headings. The headings contained in this Agreement are for
reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
SECTION 9.06. Severability. If any term or other provision of this
Agreement is invalid, illegal or incapable of being enforced by any rule of law
or public policy, all other conditions and provisions of this Agreement shall
nevertheless remain in full force and effect so long as the economic or legal
substance of the transactions contemplated hereby is not affected in any manner
adverse to any party. Upon such determination that any term or other provision
is invalid, illegal or incapable of being enforced, the parties hereto shall
negotiate in good faith to modify this Agreement so as to effect the original
intent of the parties as closely as possible in an acceptable manner to the end
that transactions contemplated hereby are fulfilled to the extent possible.
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SECTION 9.07. Entire Agreement. This Agreement together with the Disclosure
Schedules and Exhibits hereto constitute the entire agreement of the parties and
supersede all prior agreements and undertakings, both written and oral, between
the parties, or any of them, with respect to the subject matter hereof and,
except as otherwise expressly provided herein, are not intended to confer upon
any other person any rights or remedies hereunder.
SECTION 9.08. Assignment. This Agreement shall not be assigned by operation
of law or otherwise, except that Associated may assign all or any of its rights
hereunder to any affiliate provided that no such assignment shall relieve the
assigning party of its obligations hereunder, and the assignee agrees to be
bound by the terms and conditions of this Agreement including the requirement of
conversion and delivery of shares of Associated Common Stock pursuant to Section
1.06 hereof.
SECTION 9.09. Parties in Interest. This Agreement shall be binding upon and
inure solely to the benefit of each party hereto and its successors, and nothing
in this Agreement, express or implied, is intended to or shall confer upon any
other person any right, benefit or remedy of any nature whatsoever under or by
reason of this Agreement, except for the right to receive the consideration
payable pursuant to Article I and except as provided in sections 6.08 and 6.09.
SECTION 9.10. Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Wisconsin, regardless of
the laws that might otherwise govern under applicable principles of conflicts of
law.
SECTION 9.11. Counterparts. This Agreement may be executed in one or more
counterparts, and by the different parties hereto in separate counterparts, each
of which when executed shall be deemed to be an original but all of which taken
together shall constitute one and the same agreement.
IN WITNESS WHEREOF, Associated and the Company have caused this Agreement
to be executed as of the date first written above by their respective officers
thereunto duly authorized.
ASSOCIATED BANC-CORP
By: /s/ H.B. CONLON
------------------------------------
Name: H. B. Conlon
Title: Chairman, President, and
Chief Executive Officer
CENTRA FINANCIAL, INC.
By: /s/ ANDREW K. WILSON
------------------------------------
Name: Andrew K. Wilson
Title: Chairman of the Board of
Directors
A-31
<PAGE> 80
EXHIBIT B
SUBCHAPTER XIII OF THE WISCONSIN BUSINESS CORPORATION LAW
DISSENTERS' RIGHTS
180.1301 DEFINITIONS.
In sec.sec.180.1301 to 180.1331:
(1) "Beneficial shareholder" means a person who is a beneficial owner
of shares held by a nominee as the shareholder.
(1m) "Business combination" has the meaning given in sec.180.1130(3).
(2) "Corporation" means the issuer corporation or, if the corporate
action giving rise to dissenters' rights under sec.180.1302 is a merger or
share exchange that has been effectuated, the surviving domestic
corporation or foreign corporation of he merger or the acquiring domestic
corporation or foreign corporation of the share exchange.
(3) "Dissenter" means a shareholder or beneficial shareholder who is
entitled to dissent from corporate action under sec.180.1302 and who
exercises that right when and in the manner required by sec.sec.180.1320 to
180.1328.
(4) "Fair value", with respect to a dissenter's shares other than in a
business combination, means the value of the shares immediately before the
effectuation of the corporate action to which the dissenter objects,
excluding any appreciation or depreciation in anticipation of the corporate
action unless exclusion would be inequitable. "Fair value", with respect to
a dissenter's shares in a business combination, means market value, as
defined in sec.180.1130(9)(a) 1 to 4.
(5) "Interest" means interest from the effectuation date of the
corporate action until the date of payment, at the average rate currently
paid by the corporation on its principal bank loans or, if none, at a rate
that is fair and equitable under all of the circumstances.
(6) "Issuer corporation" means a domestic corporation that is the
issuer of the shares held by a dissenter before the corporate action.
180.1302 RIGHT TO DISSENT.
(1) Except as provided in sub. (4) and sec.180.1008(3), a shareholder
or beneficial shareholder may dissent from, and obtain payment of the fair
value of his or her shares in the event of, any of the following corporate
actions:
(a) Consummation of a plan of merger to which the issuer
corporation is a party if any of the following applies:
1. Shareholder approval is required for the merger by
sec.180.1103 or by the articles of incorporation.
2. The issuer corporation is a subsidiary that is merged with
its parent under sec.180.1104.
(b) Consummation of a plan of share exchange if the issuer
corporation's shares will be acquired, and the shareholder or the
shareholder holding shares on behalf of the beneficial shareholder is
entitled to vote on the plan.
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(c) Consummation of a sale or exchange of all, or substantially
all, of the property of the issuer corporation other than in the usual
and regular course of business, including a sale in dissolution, but not
including any of the following:
1. A sale pursuant to court order.
2. A sale for cash pursuant to a plan by which all or
substantially all of the net proceeds of the sale will be distributed
to the shareholders within one year after the date of sale.
(d) Except as provided in sub. (2), any other corporate action
taken pursuant to a shareholder vote to the extent that the articles of
incorporation, bylaws or a resolution of the board of directors provides
that the voting or nonvoting shareholder or beneficial shareholder may
dissent and obtain payment for his or her shares.
(2) Except as provided in sub. (4) and sec.180.1008(3), the articles
of incorporation may allow a shareholder or beneficial shareholder to
dissent from an amendment of the articles of incorporation and obtain
payment of the fair value of his or her shares if the amendment materially
and adversely affects rights in respect of a dissenter's shares because it
does any of the following:
(a) Alters or abolishes a preferential right of the shares.
(b) Creates, alters or abolishes a right in respect of redemption,
including a provision respecting a sinking fund for the redemption or
repurchase, of the shares.
(c) Alters or abolishes a preemptive right of the holder of shares
to acquire shares or other securities.
(d) Excludes or limits the right of the shares to vote on any
matter or to cumulate votes, other than a limitation by dilution through
issuance of shares or other securities with similar voting rights.
(e) Reduces the number of shares owned by the shareholder or
beneficial shareholder to a fraction of a share if the fractional share
so created is to be acquired for cash under sec.180.0604.
(3) Notwithstanding sub. (l)(a) to (c), if the issuer corporation is a
statutory close corporation under sec.180.1801 to 180.1837, a shareholder
of the statutory close corporation may dissent from a corporate action and
obtain payment of the fair value of his or her shares, to the extent
permitted under sub. (l)(d) or (2) or sec.sec.180.1803, 180.1813(1)(d) or
(2)(b), or sec.180.1829(1)(c).
(4) Except in a business combination or unless the articles of
incorporation provide otherwise, subs. (1) and (2) do not apply to the
holders of shares of any class or series if the shares of the class or
series are registered on a national securities exchange or quoted on the
National Association of Securities Dealers, Inc., automated quotations
system on the record date filed to determine the shareholders entitled to
notice of a shareholders meeting at which shareholders are to vote on the
proposed corporate action.
(5) Except as provided in sec.180.1833, a shareholder or beneficial
shareholder entitled to dissent and obtain payment for his or her shares
under sec.sec.180.1301 to 180.1331 may not challenge the corporate action
creating his or her entitlement unless the action is unlawful or fraudulent
with respect to the shareholder, beneficial shareholder or issuer
corporation.
180.1303 DISSENT BY SHAREHOLDERS AND BENEFICIAL SHAREHOLDERS.
(1) A shareholder may assert dissenters' rights as to fewer than all
of the shares registered in his or her name only if the shareholder
dissents with respect to all shares beneficially owned by any one person
and notifies the corporation in writing of the name and address of each
person on whose behalf he or she asserts dissenters' rights. The rights of
a shareholder who under this subsection asserts dissenters' rights as to
fewer than all of the shares registered in his or her name are determined
as if the shares as to which he or she dissents and his or her other shares
were registered in the names of different shareholders.
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(2) A beneficial shareholder may assert dissenters' rights as to
shares held on his or her behalf only if the beneficial shareholder does
all of the following:
(a) Submits to the corporation the shareholder's written consent to
the dissent not later than the time that the beneficial shareholder
asserts dissenters' rights.
(b) Submits the consent under par. (a) with respect to all shares
of which he or she is the beneficial shareholder.
180.1320 NOTICE OF DISSENTERS' RIGHTS.
(1) If proposed corporate action creating dissenters' rights under
sec.180.1302 is submitted to a vote at a shareholders' meeting, the meeting
notice shall state that shareholders and beneficial shareholders are or may
been titled to dissenters' rights under sec.sec.180.1301 to 180.1331 and
shall be accompanied by a copy of those sections.
(2) If corporate action creating dissenters' rights under sec.180.1302
is authorized without a vote of shareholders, the corporation shall notify,
in writing and in accordance with sec.180.0141, all shareholders entitled
to assert dissenters' rights that the action was authorized and send them
the dissenters' notice described in sec.180.1322.
180.1321 NOTICE OF INTENT TO DEMAND PAYMENT.
(1) If proposed corporate action creating dissenters' rights under
sec.180.1302 is submitted to a vote at a shareholders' meeting, a
shareholder or beneficial shareholder who wishes to assert dissenters'
rights shall do all of the following:
(a) Deliver to the issuer corporation before the vote is taken
written notice that complies with sec.180.0141 of the shareholder's or
beneficial shareholder's intent to demand payment for his or her shares
if the proposed action is effectuated.
(b) Not vote his or her shares in favor of the proposed action.
(2) A shareholder or beneficial shareholder who fails to satisfy sub.
(1) is not entitled to payment for his or her shares under sec.sec.180.1301
to 180.1331.
180.1322 DISSENTERS' NOTICE.
(1) If proposed corporate action creating dissenters' rights under
sec.180.1302 is authorized at a shareholders' meeting, the corporation
shall deliver a written dissenters' notice to all shareholders and
beneficial shareholders who satisfied sec.180.1321.
(2) The dissenters' notice shall be sent no later than 10 days after
the corporate action is authorized at a shareholders' meeting or without a
vote of shareholders, whichever is applicable. The dissenters' notice shall
comply with 180.0141 and shall include or have attached all of the
following:
(a) A statement indicating where the shareholder or beneficial
shareholder must send the payment demand and where and when certificates
for certificated shares must be deposited.
(b) For holders of uncertificated shares, an explanation of the
extent to which transfer of the shares will be restricted after the
payment demand is received.
(c) A form for demanding payment that includes the date of the
first announcement to news media or to shareholders of the terms of the
proposed corporate action and that requires the shareholder or
beneficial shareholder asserting dissenters' rights to certify whether
he or she acquired beneficial ownership of the shares before that date.
(d) A date by which the corporation must receive the payment
demand, which may not be fewer than 30 days nor more than 60 days after
the date on which the dissenters' notice is delivered.
(e) A copy of sec.sec.180.1301 to 180.1331.
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180.1323 DUTY TO DEMAND PAYMENT.
(1) A shareholder or beneficial shareholder who is sent a dissenters'
notice described in sec.180.1322, or a beneficial shareholder whose shares
are held by a nominee who is sent a dissenters' notice described in
sec.180.1322, must demand payment in writing and certify whether he or she
acquired beneficial ownership of the shares before the date specified in
the dissenters' notice under sec.180.1322(2)(c). A shareholder or
beneficial shareholder with certificated shares must also deposit his or
her certificates in accordance with the terms of the notice.
(2) A shareholder or beneficial shareholder with certificated shares
who demands payment and deposits his or her share certificates under sub.
(1) retains all other rights of a shareholder or beneficial shareholder
until these rights are canceled or modified by the effectuation of the
corporate action.
(3) A shareholder or beneficial shareholder with certificated or
uncertificated shares who does not demand payment by the date set in the
dissenters' notice, or a shareholder or beneficial shareholder with
certificated shares who does not deposit his or her share certificates
where required and by the date set in the dissenters' notice is not
entitled to payment for his or her shares under sec.sec.180.1301 to
180.1331.
180.1324 RESTRICTIONS ON UNCERTIFICATED SHARES.
(1) The issuer corporation may restrict the transfer of uncertificated
shares from the date that the demand for payment for those shares is
received until the corporate action is effectuated or the restrictions
released under sec.180.1326.
(2) The shareholder or beneficial shareholder who asserts dissenters'
rights as to uncertificated shares retains all of the rights of a
shareholder or beneficial shareholder, other than those restricted under
sub. (1), until these rights are canceled or modified by the effectuation
of the corporate action.
180.1325 PAYMENT.
(1) Except as provided in sec.180.1327, as soon as the corporate
action is effectuated or upon receipt of a payment demand, whichever is
later, the corporation shall pay each shareholder or beneficial shareholder
who has complied with sec.180.1323 the amount that the corporation
estimates to be the fair value of his or her shares, plus accrued interest.
(2) The payment shall be accompanied by all of the following:
(a) The corporation's latest available financial statements,
audited and including footnote disclosure if available, but including
not less than a balance sheet as of the end of a fiscal year ending not
more than 16 months before the date of payment, an income statement for
that year, a statement of changes in shareholders' equity for that year
and the latest available interim financial statements, if any.
(b) A statement of the corporation's estimate of the fair value of
the shares.
(c) An explanation of how the interest was calculated.
(d) A statement of the dissenter's right to demand payment under
sec.180.1328 if the dissenter is dissatisfied with the payment.
(e) A copy of sec.sec.180.1301 to 180.1331.
180.1326 FAILURE TO TAKE ACTION.
(1) If an issuer corporation does not effectuate the corporate action
within 60 days after the date set under sec.180.1322 for demanding payment,
the issuer corporation shall return the deposited certificates and release
the transfer restrictions imposed on uncertificated shares.
(2) If after returning deposited certificates and releasing transfer
restrictions, the issuer corporation effectuates the corporate action, the
corporation shall deliver a new dissenters' notice under sec.180.1322 and
repeat the payment demand procedure.
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180.1327 AFTER-ACQUIRED SHARES.
(1) A corporation may elect to withhold payment required by
sec.180.1325 from a dissenter unless the dissenter was the beneficial owner
of the shares before the date specified in the dissenters' notice under
sec.180.1322(2)(c) as the date of the first announcement to news media or
to shareholders of the terms of the proposed corporate action.
(2) To the extent that the corporation elects to withhold payment
under sub. (1) after effectuating the corporate action, it shall estimate
the fair value of the shares, plus accrued interest, and shall pay this
amount to each dissenter who agrees to accept it in full satisfaction of
his or her demand. The corporation shall send with its offer a statement of
its estimate of the fair value of the shares, an explanation of how the
interest was calculated, and a statement of the dissenter's right to demand
payment under sec.180.1328 if the dissenter is dissatisfied with the offer.
180.1328 PROCEDURE IF DISSENTER DISSATISFIED WITH PAYMENT OR OFFER.
(1) A dissenter may, in the manner provided in sub. (2), notify the
corporation of the dissenter's estimate of the fair value of his or her
shares and amount of interest due, and demand payment of his or her
estimate, less any payment received under sec.180.1325, or reject the offer
under sec.180.1327 and demand payment of the fair value of his or her
shares and interest due, if any of the following applies:
(a) The dissenter believes that the amount paid under sec.180.1325
or offered under sec.180.1327 is less than the fair value of his or her
shares or that the interest due is incorrectly calculated.
(b) The corporation fails to make payment under sec.180.1325 within
60 days after the date set under sec.180.1322 for demanding payment.
(c) The issuer corporation, having failed to effectuate the
corporate action, does not return the deposited certificates or release
the transfer restrictions imposed of uncertificated shares within 60
days after the date set under sec.180.1322 for demanding payment.
(2) A dissenter waives his or her right to demand payment under this
section unless the dissenter notifies the corporation of his or her demand
under B-8 sub. (1) in writing within 30 days after the corporation made or
offered payment for his or her shares. The notice shall comply with
sec.180.0141.
180.1330 COURT ACTION.
(1) If a demand for payment under sec.180.1328 remains unsettled, the
corporation shall bring a special proceeding within 60 days after receiving
the payment demand under sec.180.1328 and petition the court to determine
the fair value of the shares and accrued interest. If the corporation does
not bring the special proceeding within the 60-day period, it shall pay
each dissenter whose demand remains unsettled the amount demanded.
(2) The corporation shall bring the special proceeding in the circuit
court for the county where its principal office or, if none in this state,
its registered office is located. If the corporation is a foreign
corporation without a registered office in this state, it shall bring the
special proceeding in the county in this state in which was located the
registered office of the issuer corporation that merged with or whose
shares were acquired by the foreign corporation.
(3) The corporation shall make all dissenters, whether or not
residents of this state, whose demands remain unsettled parties to the
special proceeding. Each party to the special proceeding shall be served
with a copy of the petition as provided in sec.801.14.
(4) The jurisdiction of the court in which the special proceeding is
brought under sub. (2) is plenary and exclusive. The court may appoint one
or more persons as appraisers to receive evidence and recommend decision on
the question of fair value. An appraiser has the power described in the
order appointing him or her or in any amendment to the order. The
dissenters are entitled to the same discovery rights as parties in other
civil proceedings.
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(5) Each dissenter made a party to the special proceeding is entitled
to judgment for any of the following:
(a) The amount, if any, by which the court finds the fair value of
his or her shares plus interest, exceeds the amount paid by the
corporation.
(b) The fair value, plus accrued interest, of his or her shares
acquired on or after the date specified in the dissenters' notice under
sec.180.1322(2)(c), for which the corporation elected to withhold
payment under sec.180.1327.
180.1331 COURT COSTS AND COUNSEL FEES.
(1) (a) Notwithstanding sec.sec.814.01 to 814.04, the court in a
special proceeding brought under sec.180.1330 shall determine all costs of
the proceeding, including the reasonable compensation and expenses of
appraisers appointed by the court and shall assess the costs against the
corporation, except as provided in par. (b).
(b) Notwithstanding sec.sec.814.01 and 814.04, the court may assess
costs against all or some of the dissenters, in amounts that the court
finds to be equitable, to the extent that the court finds the dissenters
acted arbitrarily, vexatiously or not in good faith in demanding payment
under sec.180.1328.
(2) The parties shall bear their own expenses of the proceeding,
except that, notwithstanding sec.sec.814.01 to 814.04, the court may also
assess the fees and expenses of counsel and experts for the respective
parties, in amounts that the court finds to be equitable, as follows:
(a) Against the corporation and in favor of any dissenter if the
court finds that the corporation did not substantially comply with
sec.sec.180.1320 to 180.1328.
(b) Against the corporation or against a dissenter, in favor of any
other party, if the court finds that the party against whom the fees and
expenses are assessed acted arbitrarily, vexatiously or not in good
faith with respect to the rights provided by this chapter.
(3) Notwithstanding sec.sec.814.01 to 814.04, if the court finds that
the services of counsel and experts for any dissenter were of substantial
benefit to other dissenters similarly situated, the court may award to
these counsel and experts reasonable fees to be paid out of the amounts
awarded the dissenters who were benefited.
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EXHIBIT C
CENTRA FINANCIAL, INC. AND SUBSIDIARY
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
SELECTED FINANCIAL DATA -- COMPANY
(AMOUNTS IN THOUSANDS, EXCEPT SHARE AND RATIO DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
AS OF AND FOR THE
NINE MONTHS ENDED AS OF AND FOR THE YEAR ENDED
SEPTEMBER 30, DECEMBER 31,
------------------ -----------------------------
1996 1995 1995 1994 1993
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Income statement data:
Interest income.............................. $ 4,231 $ 4,239 $ 5,681 $ 5,070 $ 5,085
Interest expense............................. 1,764 1,648 2,259 1,727 1,798
------- ------- ------- ------- -------
Net interest income....................... 2,467 2,591 3,422 3,343 3,287
Provision for loan losses.................... -- -- -- -- 77
Other income................................. 244 295 382 438 403
Other expenses............................... 1,929 2,232 2,785 2,568 2,625
------- ------- ------- ------- -------
Income before income taxes................ 782 654 1,019 1,213 988
Income tax expense........................... 228 161 243 322 188
------- ------- ------- ------- -------
Net income................................ $ 554 $ 493 $ 776 $ 891 $ 800
======= ======= ======= ======= =======
Per common share data:
Net income per share......................... 3.21 2.86 4.50 5.16 4.62
Cash dividends per share..................... .75 .25 .92 .90 .85
Weighted average shares outstanding.......... 172,652 172,652 172,652 172,652 173,207
Balance sheet data:
Total assets................................. $79,646 $81,832 $83,493 $75,729 $75,304
Loans........................................ 36,203 41,179 41,766 40,121 38,144
Allowance for loan losses.................... 545 559 556 571 574
Total deposits............................... 70,109 72,466 73,923 67,377 67,687
Stockholders' equity......................... 8,291 7,957 8,215 7,470 6,735
Financial ratios:
Return on beginning assets................... .88% .87% 1.02% 1.18% 1.05%
Return on beginning equity................... 8.99% 8.80% 10.39% 13.23% 13.07%
Equity to total assets (period end).......... 10.41% 9.72% 9.84% 9.86% 8.94%
Book value per share......................... $ 48.02 $ 46.09 $ 47.58 $ 43.27 $ 39.01
======= ======= ======= ======= =======
</TABLE>
CHANGES IN FINANCIAL CONDITION
During 1995, the Company experienced asset growth of $7,764,000, or 10.3%.
Gross loans increased by $1,645,000, or 4.1%, mainly as a result of management's
continuing efforts to expand its commercial loan portfolio. Such growth was
lower than 1994's loan increase of $1,977,000, or 5.2%, from year end 1993. The
overall mix of the Company's loan portfolio remained relatively unchanged from
year end 1994 to year end 1995. The loan growth experienced originated from
within the Company's primary trade area of Milwaukee and Waukesha counties.
During the period December 31, 1995 to September 30, 1996, gross loans
decreased by approximately $5,500,000, or 15.2%. Decreases were experienced in
the Company's residential real estate, commercial real estate and commercial
loan portfolios. This is primarily attributed to a decrease in loan demand
coupled with turnover of Bank loan personnel.
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Total investment securities decreased by $581,000, or 2.1% in 1995. The mix
between available for sale and held to maturity securities was changed in 1995
due to the one-time transfer of securities between the held to maturity and
available for sale categories allowable during the period from November 15
through December 31, 1995. The Company chose to classify all securities as
available for sale at that time.
Investment securities increased by approximately $2,400,000 from December
31, 1995 to September 30, 1996. This increase was primarily funded by Bank
deposits and loan payouts.
Cash and cash equivalents increased $6,740,000, or 169% in 1995. Included
in this increase is $4,400,000 of federal funds sold and $1,000,000 in
short-term investments. This increase was primarily funded through increased
deposit levels at December 31, 1995. Cash and cash equivalents decreased by
$585,000 from December 31, 1995 to September 30, 1996.
Deposits grew by approximately $6,545,000, or 9.7% in 1995 with the
majority of the increase coming in certificate of deposit accounts. Savings
money market and NOW account balances decreased by $3,200,000 during the year.
The overall increase is mainly attributable to year-end timing, enhanced by
depressed deposit levels at December 31, 1994. Virtually all of the growth came
within the Company's primary trade area of Milwaukee and Waukesha counties.
Deposit levels declined by approximately $3,800,000 from December 31, 1995
to September 30, 1996 due to increased competition in the local marketplace. The
decline in certificates of deposit of approximately $2,400,000 reflected the
impact of increased competition.
Stockholders' equity increased approximately $744,000 in 1995. The increase
resulted from net income and a change in unrealized gain on securities available
for sale, offset by dividends declared.
Stockholders' equity increased by approximately $77,000, from December 31,
1995 to September 30, 1996. The overall increase resulted from net income,
offset by dividends declared and a change in unrealized loss on securities
available for sale.
RESULTS OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996
COMPARED WITH THE NINE MONTHS ENDED SEPTEMBER 30, 1995
For the nine months ended September 30, 1996, the Company's net income
increased from the same period in 1995 by $61,000, or 12.3%, to $554,000. On a
per share basis, net income was $3.21 for the nine months ended September 30,
1996 compared to $2.86 for the nine months ended September 30, 1995. As
discussed below, this was mainly attributable to a decrease in wire transfer
losses and FDIC assessment fees, offset by an increase in legal fees and a
reduction in net interest income.
Net interest income decreased by $124,000, or 4.8%, to approximately
$2,467,000, attributed to a narrowing spread between interest earning assets and
interest bearing liabilities from 5.08% in September, 1995 to 4.66% in
September, 1996. While interest income was relatively constant between years,
interest expense on deposits increased by $117,000. Due to increased
competition, rates paid on deposits increased during this period.
The balance maintained in the allowance for loan losses is based on
management's evaluation of the loan portfolio. Management determines the
adequacy of the allowance for loan losses based on past loan loss experience,
current economic conditions, composition of the loan portfolio and the potential
for future loss. No provision was made for the first nine months of 1996 and
1995. Total nonperforming loans, which were zero at December 31, 1995, increased
to $269,000 at September 30, 1996 due to one isolated loan. There were
approximately $12,000 in net charge-offs for the nine months ended September 30,
1996 and the same period in 1995. Management believes the reserve is adequate to
absorb any current or future losses in the loan portfolio.
Other income decreased $51,000 or 17% for the first nine months of 1996
compared to the first nine months of 1995 due mainly to a continuing reduction
in service charges and fees. This reduction was attributed to a decrease in
overall deposit levels between years. Also an increasing number of commercial
checking customers have been maintaining increased balances in their accounts to
avoid service charges. Other
C-2
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operating expenses decreased approximately $300,000, or 13.5%, to $1,930,000 for
the nine months ended September 30, 1996 compared to the same period in 1995.
Included in the decrease in other operating expenses was a wire transfer loss in
1995 of $265,000. In addition, FDIC assessment fees decreased by approximately
$90,000 and occupancy expense decreased by approximately $31,000. This was
partially offset by an increase in professional fees of $80,000 primarily
attributable to legal fees relating to the pending merger with Associated
Banc-Corp.
Income tax expense increased $67,000 in the first nine months of 1996
compared to the same period in 1995 due to an increase in pre-tax net income of
approximately $137,000 and an increase in the year to date effective tax rate
from 25% in 1995 to 29% in 1996, primarily due to an increase in interest income
from taxable investment securities.
RESULTS OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
Net income in 1995 totaled $776,000, a decrease of $115,000 or 13% from the
$891,000 earned in 1994. Net income in 1994 had increased by $91,000 or 11% over
the 1993 level of $800,000. On a per share basis, net income was $4.50 in 1995
compared to $5.16 and $4.62 in 1994 and 1993, respectively. As discussed below,
the decrease in net income in 1995 compared to 1994 resulted from an increase in
other expenses, coupled with decreases in other income and net interest income.
The increase in net income in 1994 compared to 1993 was primarily attributable
to increases in net interest income and other income and a decrease in other
expenses.
Net interest income increased $80,000, or 2.4%, to $3,423,000 in 1995
compared to $3,343,000 in 1994. The 1994 total represented an increase of
$55,000, or 1.7%, compared to 1993. The net interest margin for 1995 was 4.98%
compared with 5.22% in 1994 and 5.29% in 1993. The margin has been compressed
during the past two years by the rising cost of funds which has not been fully
offset by increased yield on earning assets. Management has sought to manage
interest rate risk, such that unforeseen increases or decreases in those rates
will not have a significant unfavorable impact on bank earnings. Management
believes that it has managed its interest rate risk in a prudent and acceptable
manner.
Other income decreased $56,000, or 12.8%, in 1995 compared to 1994 versus
the $36,000, or 8.9%, increase in 1994 compared to 1993. Continuing competition
in the local banking market put downward pressure on the Company's service
charge revenue during 1995, resulting in a decrease in account balances and a
reduction in the fee structure of the Bank.
Other expenses increased $217,000, or 8.4%, in 1995, compared to a $57,000,
or 2.2%, decrease in 1994 over 1993 levels. A wire transfer loss of $265,000 in
1995 and a $31,000 loss on the sale of a security in 1993 account for the
majority of the fluctuations between years. In addition, deferred compensation
expense decreased to $11,000 in 1995 compared to the $112,000 in 1994 and 1993
as the deferred compensation plans became fully funded. FDIC insurance expense
assessment decreased to $78,000 in 1995 versus $151,000 in 1994 and 1993. Data
processing expense increased steadily from 1993 to 1995 due to the Company
contracting for additional service capabilities from its service provider. Other
operating expenses, while remaining relatively stable from 1993 to 1994,
increased $48,000, or 17.5%, in 1995. The increase was not attributable to any
one significant factor.
Income tax expense decreased $79,000 in 1995 compared to 1994 versus the
$134,000 increase in 1994 compared to 1993, due to corresponding changes in
pre-tax net income and changes in the effective tax rates from 19.0% in 1993, to
26.5% in 1994, to 23.8% in 1995. The changes in the effective tax rates are
primarily due to corresponding changes in interest income from taxable and
non-taxable investment securities.
LIQUIDITY AND CAPITAL RESOURCES
The concept of liquidity comprises the ability of an enterprise to maintain
sufficient cash flow to meet its needs and obligations on a timely basis. Bank
liquidity must thus be considered in terms of the nature and mix of the
institution's sources and uses of funds.
C-3
<PAGE> 89
Bank liquidity is provided from several asset categories. The asset side of
the balance sheet provides liquidity through regular maturities of investment
securities and loans. Cash, investment securities held to maturity with
maturities of one year or less and investment securities available for sale,
deposits with banks, short-term investments and federal funds sold are primary
sources of asset liquidity. At December 31, 1995, these categories totaled
approximately $38,000,000. At September 30, 1996, these categories totaled
approximately $40,000,000.
The Company has no current plans for major capital expenditures in 1996.
Management believes that, in the current economic environment, the Bank's
liquidity position is adequate. There are no known trends, nor any known
demands, commitments, events or uncertainties that will result or are reasonably
likely to result in a material increase or decrease in the Bank's liquidity.
EFFECTS OF INFLATION
The Company's unaudited consolidated financial statements and notes thereto
have been prepared in accordance with generally accepted accounting principles,
which require the measurement of financial position and operating results in
terms of historical dollars without considering the changes in the relative
purchasing power of money over time due to inflation. The impact of inflation is
reflected in the increased cost of the Company's operations. Unlike most
industrial companies, nearly all of the assets and liabilities of the Company
are monetary in nature. As a result, interest rates have a greater impact on the
Company's performance than do the effects of general levels of inflation.
Interest rates do not necessarily move in the same direction or to the same
extent as the price of goods and services.
REGULATORY CAPITAL REQUIREMENTS
The Federal Reserve Board, the Company's primary regulator, has adopted
risk-based capital regulations which require the Company to maintain a
risk-based capital/assets ratio of at least 8%. The Company's capital ratios and
those of the Bank are significantly in excess of minimum ratios required by
their respective regulators. The FDIC and Commissioner of Banking for the State
of Wisconsin examine and regulate the Bank.
Current risk-based capital regulations are being expanded to incorporate
the effects of interest rate risk upon capital adequacy. Although final
guidelines have not yet been established, initial calculations indicate that
effects of interest rate risk upon Bank capital will result in the Bank capital
to continue to be well within acceptable limits.
Management is not aware of any other pending regulatory requirements or
recommendations that, if enacted, would have an adverse impact on the Company's
capital, liquidity, or results of operations.
C-4
<PAGE> 90
ALLOCATION OF ALLOWANCE FOR LOAN LOSSES
For each period ended shown, the allowance for loan losses has been
allocated to the following categories in amounts deemed reasonably necessary to
provide for the possibility of losses being incurred within each category of
loans at the dates indicated.
<TABLE>
<CAPTION>
DECEMBER 31, 1995 DECEMBER 31, 1994 DECEMBER 31, 1993
------------------------ ------------------------ ------------------------
PERCENT OF PERCENT OF PERCENT OF
LOANS IN LOANS IN LOANS IN
EACH EACH EACH
ALLOWANCES CATEGORY ALLOWANCES CATEGORY ALLOWANCES CATEGORY
BALANCE AT END OF PERIOD FOR LOAN TO TOTAL FOR LOAN TO TOTAL FOR LOAN TO TOTAL
APPLICABLE TO: LOSSES LOANS LOSSES LOANS LOSSES LOANS
- --------------------------------- ---------- ---------- ---------- ---------- ---------- ----------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Commercial and commercial real
estate loans................... $380 65.6% $298 63.7% $210 58.2%
Real estate -- mortgages......... 147 26.5 236 27.9 310 33.4
Installment and other loans...... 29 7.9 37 8.4 54 8.4
------- -------- ------- -------- ------- --------
Total....................... $556 100.0% $571 100.0% $574 100.0%
======= ======= ======= ======= ======= =======
</TABLE>
SUMMARY OF LOAN LOSS EXPERIENCE
<TABLE>
<CAPTION>
AS OF AND FOR THE
YEAR ENDED DECEMBER 31,
-----------------------------
1995 1994 1993
------- ------- -------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C>
Loan balance at year end......................................... $41,766 $40,121 $38,144
------- ------- -------
Balance of allowance for loan losses at beginning of period...... 571 574 520
Loans charged off:
Commercial loans............................................... -- 9 16
Real estate -- mortgage loans.................................. -- -- --
Installment and other loans.................................... 15 4 9
------- ------- -------
Total loans charged off.......................................... 15 13 25
------- ------- -------
Recoveries of loans previously charged off:
Commercial loans............................................... -- 9 --
Real estate -- mortgage loans.................................. -- -- --
Installment and other loans.................................... -- 1 2
------- ------- -------
Total recoveries................................................. -- 10 2
Net loans charged off............................................ 15 3 23
Additions to allowance for loan losses charged to operating
expense........................................................ -- -- 77
------- ------- -------
Balance of allowance for loan losses at end of period............ $ 556 $ 571 $ 574
======= ======= =======
Ratio of net charge-offs during period to loans outstanding at
period end..................................................... .04% .01% .06%
======= ======= =======
</TABLE>
C-5
<PAGE> 91
LOAN COMPOSITION
The following table summarizes the loan composition at the end of each
period.
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------
1995 1994
------- -------
(AMOUNTS IN
THOUSANDS)
<S> <C> <C>
Real estate mortgage................................................... $11,075 $11,207
Commercial real estate................................................. 6,799 7,377
Commercial............................................................. 20,602 18,180
Home equity............................................................ 878 1,016
Installment and other.................................................. 2,412 2,341
------- -------
41,766 40,121
Less: allowance for loan losses........................................ 556 571
------- -------
Loans, net............................................................. $41,210 $39,550
======= =======
</TABLE>
LOAN MATURITIES AND SENSITIVITY TO CHANGES IN INTEREST RATES AS OF DECEMBER 31,
1995
<TABLE>
<CAPTION>
LOAN MATURITIES
----------------------------------------
AFTER 1
1 YEAR THROUGH AFTER 5
OR LESS 5 YEARS YEARS TOTAL
------- ------- ------- -------
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C> <C>
Commercial real estate..................................... $ 3,492 $ 3,307 $-- $ 6,799
Commercial................................................. 19,646 956 -- 20,602
------- ------ --- ------
Total................................................. $23,138 $ 4,263 $-- $27,401
======= ====== === ======
Amount over one year with:
Fixed rates.............................................. $ 4,063
======
Floating or adjustable rates............................. $ 200
======
</TABLE>
PAST DUE AND NONPERFORMING LOANS
The following table reflects as of the periods ended the aggregate amounts
of loans past due and nonperforming.
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------
1995 1994 1993
---- ---- ----
(AMOUNTS IN THOUSANDS)
<S> <C> <C> <C>
Nonaccrual loans........................................................ $-- $-- $ 21
Loans contractually past due over 90 days............................... 82 8 118
Restructured loans...................................................... -- -- --
--- -- ----
Total.............................................................. $82 $ 8 $139
=== == ====
</TABLE>
If interest on the nonaccrual loans had been accrued, such income would
have approximated $1,400 for the year ended December 31, 1993.
Loans are normally placed on non-accrual status when they become
contractually past due 90 days or more as to interest or principal payments.
Previously accrued and uncollected interest on such loans is reversed,
amortization of related loan fees is suspended, and income is recorded only to
the extent that interest payments are subsequently received in cash and a
determination has been made that the principal balance of the loan is
collectible. If collectibility of the principal is in doubt, payments received
are applied to loan principal. As of December 31, 1995, management believes that
there are no potential problem loans which would require disclosure.
Loan concentrations exceeding 10% of the total loan portfolio consist of
residential real estate and commercial real estate loans which approximate 26.5%
and 16.28%, respectively of total loans as of December 31, 1995.
C-6
<PAGE> 92
CENTRA FINANCIAL, INC. AND SUBSIDIARY
<TABLE>
<CAPTION>
PAGE(S)
-------
<S> <C>
Consolidated Financial Statements of Centra Financial, Inc. and Subsidiary For the
Years Ended December 31, 1995, 1994 and 1993 (Unaudited):
Consolidated Balance Sheets..................................................... C-8
Consolidated Statements of Income............................................... C-9
Consolidated Statements of Changes in Stockholders' Equity...................... C-10
Consolidated Statements of Cash Flows........................................... C-11
Notes to Consolidated Financial Statements...................................... C-12-23
Consolidated Financial Statements of Centra Financial, Inc. and Subsidiary For the
Nine Months Ended September 30, 1996 and 1995 (Unaudited):
Consolidated Balance Sheets..................................................... C-24
Consolidated Statements of Income............................................... C-25
Consolidated Statements of Cash Flows........................................... C-26
Notes to Consolidated Financial Statements...................................... C-27
</TABLE>
C-7
<PAGE> 93
CENTRA FINANCIAL, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
DECEMBER 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
ASSETS
Cash and due from banks............................................ $ 5,284,565 $ 3,977,976
Federal funds sold................................................. 4,350,000 --
Other short-term investments....................................... 1,096,076 12,056
----------- -----------
Cash and cash equivalents.......................................... 10,730,641 3,990,032
Investment securities available for sale, at fair value............ 27,238,590 1,504,082
Investment securities held to maturity (fair value of $24,729,575
in 1994)......................................................... -- 26,315,172
Loans.............................................................. 41,766,367 40,121,528
Allowance for loan losses.......................................... (556,469) (571,420)
----------- -----------
Loans, net......................................................... 41,209,898 39,550,108
Bank premises and equipment, net................................... 2,621,685 2,769,010
Accrued interest receivable and other assets....................... 1,692,658 1,600,869
----------- -----------
Total assets.................................................. $83,493,472 $75,729,273
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand deposits (noninterest bearing)............................ $16,431,191 $14,396,984
Savings, money market, IRA and NOW deposits...................... 37,672,228 40,807,177
Certificates of deposit.......................................... 19,819,240 12,172,600
----------- -----------
Total deposits................................................ 73,922,659 67,376,761
Federal funds purchased............................................ -- 200,000
Accrued expenses and other liabilities............................. 1,356,102 682,065
----------- -----------
Total liabilities............................................. 75,278,761 68,258,826
----------- -----------
Stockholders' equity:
Common stock: $1 par value; 5,000,000 shares authorized;
177,454 shares issued......................................... 177,454 177,454
Surplus.......................................................... 3,688,894 3,688,894
Undivided profits................................................ 4,306,216 3,688,751
Unrealized gain on investment securities available for sale, net
of taxes...................................................... 126,799 --
Less: Treasury stock at cost (4,802 shares in 1995 and 1994)..... (84,652) (84,652)
----------- -----------
Total stockholders' equity.................................... 8,214,711 7,470,447
Commitments and contingencies......................................
----------- -----------
Total liabilities and stockholders' equity.................... $83,493,472 $75,729,273
=========== ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
C-8
<PAGE> 94
CENTRA FINANCIAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
---------- ---------- ----------
<S> <C> <C> <C>
Interest income:
Interest and fees on loans............................. $3,724,805 $3,212,372 $3,222,956
Interest on securities:
Taxable............................................. 1,513,171 1,369,517 1,359,795
Tax-exempt.......................................... 285,633 316,101 366,351
Interest on federal funds sold and other short-term
investments......................................... 157,726 172,066 136,350
---------- ---------- ----------
Total interest income.......................... 5,681,335 5,070,056 5,085,452
---------- ---------- ----------
Interest expense on deposits and federal funds
purchased.............................................. 2,258,551 1,727,010 1,797,694
---------- ---------- ----------
Net interest income...................................... 3,422,784 3,343,046 3,287,758
Provision for loan losses................................ -- -- 76,900
---------- ---------- ----------
Net interest income after provision for loan
losses....................................... $3,422,784 $3,343,046 $3,210,858
---------- ---------- ----------
Other income:
Service fees and charges............................... $ 339,655 $ 398,170 $ 366,767
Other.................................................. 42,397 40,157 35,774
---------- ---------- ----------
Total other income............................. $ 382,052 $ 438,327 $ 402,541
---------- ---------- ----------
Other expense:
Salaries and employee benefits......................... $1,270,008 $1,213,492 $1,243,184
Net occupancy expense.................................. 196,866 185,656 205,759
Furniture and equipment expense........................ 166,040 209,458 161,082
Data processing expense................................ 196,252 163,440 158,281
Advertising............................................ 50,060 44,513 32,760
FDIC expense........................................... 77,884 150,152 150,996
Deferred compensation expense.......................... 10,794 111,861 111,722
Directors fees......................................... 72,050 78,750 71,000
Printing and supplies.................................. 51,369 48,580 63,062
Postage................................................ 50,123 56,067 57,511
Professional fees...................................... 57,350 32,716 55,685
Loss on sale of securities............................. -- -- 30,940
Wire transfer loss..................................... 265,000 -- --
Other operating expenses............................... 321,807 273,876 283,641
---------- ---------- ----------
Total other expense............................ 2,785,603 2,568,561 2,625,623
---------- ---------- ----------
Income before income tax expense......................... 1,019,233 1,212,812 987,776
Income tax expense....................................... 242,929 321,692 187,819
---------- ---------- ----------
Net income............................................... $ 776,304 $ 891,120 $ 799,957
========== ========== ==========
Net income per share..................................... $ 4.50 $ 5.16 $ 4.62
========== ========== ==========
Weighted average shares outstanding...................... 172,652 172,652 173,207
========== ========== ==========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
C-9
<PAGE> 95
CENTRA FINANCIAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
UNREALIZED
GAIN (LOSS)
ON INVESTMENT
SECURITIES
COMMON UNDIVIDED AVAILABLE- TREASURY
STOCK SURPLUS PROFITS FOR-SALE STOCK TOTAL
-------- ---------- ---------- ------------- -------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1992... $177,454 $3,688,894 $2,299,901 $ -- $(46,832) $6,119,417
======== ========== ========== ========== ======== ==========
Net income................... $ -- $ -- $ 799,957 $ -- $ -- $ 799,957
Treasury stock purchase,
1,438 shares............... -- -- -- -- (37,820) (37,820)
Cash dividends ($.85 per
share)..................... -- -- (146,840) -- -- (146,840)
-------- ---------- ---------- ---------- -------- ----------
Balance at December 31, 1993... $177,454 $3,688,894 $2,953,018 $ -- $(84,652) $6,734,714
======== ========== ========== ========== ======== ==========
Net income................... $ -- $ -- $ 891,120 $ -- $ -- $ 891,120
Cash dividends ($.90 per
share)..................... -- -- (155,387) -- -- (155,387)
Implementation of change in
accounting for marketable
debt and equity securities,
net of taxes............... -- -- -- -- -- --
-------- ---------- ---------- ---------- -------- ----------
Balance at December 31, 1994... $177,454 $3,688,894 $3,688,751 $ -- $(84,652) $7,470,447
======== ========== ========== ========== ======== ==========
Net income................... $ -- $ -- $ 776,304 $ -- $ -- $ 776,304
Cash dividends ($.92 per
share)..................... -- -- (158,839) -- -- (158,839)
Change in unrealized gain on
securities available for
sale, net of taxes......... -- -- -- 126,799 -- 126,799
-------- ---------- ---------- ---------- -------- ----------
Balance at December 31, 1995... $177,454 $3,688,894 $4,306,216 $ 126,799 $(84,652) $8,214,711
======== ========== ========== ========== ======== ==========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
C-10
<PAGE> 96
CENTRA FINANCIAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
YEARS ENDED DECEMBER 31, 1995, 1994 AND 1993
<TABLE>
<CAPTION>
1995 1994 1993
----------- ----------- ------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net income......................................... $ 776,304 $ 891,120 $ 799,957
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................... 210,946 220,719 228,038
Provision for loan losses....................... -- -- 76,900
Deferred income tax benefit..................... (12,450) (70,200) (61,000)
Loss on sale of securities...................... -- -- 30,940
Increase in accrued interest receivable and
other assets.................................. (92,790) (136,703) (113,331)
Increase (decrease) in accrued expenses and
other liabilities............................. 612,308 (208,485) (24,291)
----------- ----------- ------------
Net cash provided by operating activities............ 1,494,318 696,451 937,213
----------- ----------- ------------
Cash flows from investing activities:
Proceeds from maturities of investment
securities...................................... -- -- 15,905,469
Proceeds from sale of security held for sale....... -- -- 969,060
Purchases of investment securities................. -- -- (16,902,595)
Proceeds from maturities of securities held to
maturity........................................ 4,244,086 4,805,841 --
Purchases of securities held to maturity........... (1,000,000) (8,634,841) --
Proceeds from maturities of securities available
for sale........................................ 1,273,531 193,902 --
Purchases of securities available for sale......... (3,741,172) -- --
Net increase in loans.............................. (1,659,790) (1,980,595) (3,466,958)
Purchases of bank premises and equipment........... (57,421) (19,977) (72,957)
----------- ----------- ------------
Net cash used in investing activities................ (940,766) (5,635,670) (3,567,981)
----------- ----------- ------------
Cash flows from financing activities:
Net increase (decrease) in deposits................ 6,545,896 (310,167) (1,600,806)
Increase (decrease) in federal funds purchased..... (200,000) 200,000 --
Cash dividends paid................................ (158,839) (155,387) (146,840)
Purchase of treasury stock......................... -- -- (37,820)
----------- ----------- ------------
Net cash provided by (used in) financing
activities......................................... 6,187,057 (265,554) (1,785,466)
----------- ----------- ------------
Net increase (decrease) in cash and cash
equivalents........................................ 6,740,609 (5,204,773) (4,416,234)
Cash and cash equivalents, beginning of year......... 3,990,032 9,194,805 13,611,039
----------- ----------- ------------
Cash and cash equivalents, end of year............... $10,730,641 $ 3,990,032 $ 9,194,805
=========== =========== ============
Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest........................................ $ 2,151,419 $ 1,737,514 $ 1,870,713
=========== =========== ============
Income taxes.................................... 371,614 361,251 320,000
=========== =========== ============
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
C-11
<PAGE> 97
CENTRA FINANCIAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
DECEMBER 31, 1995, 1994 AND 1993
(1) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting and reporting policies of Centra Financial, Inc. and
Subsidiary (the "Company") conform to generally accepted accounting principles
and to general practice within the banking industry. The following is a
description of the more significant of those policies.
NATURE OF BUSINESS
Central Bank (a wholly-owned subsidiary of Centra Financial, Inc.) is a
Wisconsin state chartered commercial bank with two bank locations in the
Milwaukee area. The Bank accepts FDIC-insured deposits and originates loans
which are principally secured by real estate and general business security
agreements.
PRINCIPLES OF CONSOLIDATION AND PRESENTATION
The consolidated financial statements include the accounts of Centra
Financial, Inc. and its wholly-owned subsidiary, Central Bank (the "Bank"). The
Bank owns Central Investments, Inc., a Nevada Corporation, which manages the
investment securities portfolio of the Bank. All significant intercompany
balances and transactions have been eliminated in consolidation.
INVESTMENT SECURITIES
On June 1, 1994, the Company adopted Financial Accounting Standards Board's
SFAS No. 115, "Accounting for Certain Investments in Debt and Equity
Securities". The statement addresses the accounting and reporting for
investments in equity securities that have readily determinable fair values, and
all investments in debt securities. Accordingly, the Company was required to
classify its debt securities into one of three categories: held to maturity,
available for sale, or trading. The Company classified all investment securities
as held to maturity upon adoption of SFAS No. 115.
Investment securities held to maturity, which management has the intent and
ability to hold to maturity, are carried at amortized cost, adjusted for
amortization of premiums and accretion of discounts using the straight-line
method. Available for sale and trading securities are reported at fair value
with unrealized gains and losses net of related deferred income taxes, included
in stockholder's equity, or income, respectively.
Realized securities gains or losses are reported in the consolidated
statements of income. The cost of securities sold is based on the specific
identification method. Any security held to maturity for which there has been a
permanent impairment of value is written down to its estimated market value.
LOANS
Loans are carried at the principal amounts outstanding. Interest on loans
is recorded as income in the period earned. Interest on loans contractually
delinquent ninety days or more is excluded from income and the loan is placed on
non-accrual status.
ALLOWANCE FOR LOAN LOSSES
In management's judgment, the allowance for loan losses represents an
amount adequate to provide for the amount of risk inherent in the loan
portfolio. The allowance for loan losses is maintained at an amount based on
management's analysis of past loan loss experience, growth and composition of
the loan portfolio, and economic conditions. Additions to the allowance are
charged to expense through the provision for loan losses. Losses are charged
directly to the allowance; recoveries are credited to the allowance. In
addition, various regulatory agencies, as an integral part of their examination
process, periodically review the Company's
C-12
<PAGE> 98
CENTRA FINANCIAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993
allowance for losses on loans. Such agencies may require the Company to
recognize additions to the allowance based on their judgments of information
available to them at the time of their examination.
LOAN FEES
Loan origination fees, non-refundable fees and direct loan origination
costs on real estate and commercial loans are recognized as incurred and are not
deferred.
BANK PREMISES AND EQUIPMENT
Bank premises and equipment are stated at cost less accumulated
depreciation computed using the straight-line method over the following terms:
buildings and improvements, 40 years; furniture and equipment, 3 to 10 years.
Maintenance and repair costs are charged to other operating expense, while
the costs of significant additions and improvements are capitalized.
CASH AND CASH EQUIVALENTS
For purposes of the consolidated statements of cash flows, all cash on
hand, amounts due from banks, federal funds sold and other short term
investments with a maturity of three months or less at the date of purchase are
considered to be cash equivalents.
RESTRICTIONS ON CASH AND DUE FROM BANKS
The Bank is required to maintain non interest-bearing deposits on hand or
on deposit in a Federal Reserve Bank in accordance with Federal Reserve Board
requirements. At December 31, 1995, those required reserves were satisfied by
currency and coin holdings.
INCOME TAXES
The Company and the Bank file a consolidated federal income tax return and
individual subsidiary state income tax returns with each organization computing
its taxes on a separate company basis.
Amounts provided for income tax expense are based on income reported for
financial statement purposes rather than amounts currently payable under tax
laws. Deferred income taxes, which arise principally from temporary differences
between the period in which certain income and expenses are recognized for
financial accounting purposes and the period in which they affect taxable
income, are included in the amounts provided for income taxes.
PER SHARE DATA
Net income per share is computed by dividing net income by the weighted
average number of common shares outstanding during each year. The weighted
average number of common shares outstanding was 172,652 in 1995 and 1994 and
173,207 in 1993.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make assumptions that
affect the amounts reported in the consolidated financial statements and
accompanying notes. Actual results could differ from these estimates.
C-13
<PAGE> 99
CENTRA FINANCIAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993
(2) INVESTMENT SECURITIES
The amortized cost and estimated fair values of securities available for
sale and held to maturity at December 31, 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
1995
------------------------------------------------------
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------- ---------- ---------- -----------
<S> <C> <C> <C> <C>
Securities available for sale:
U.S. Treasury securities and obligations of
U.S. Government corporations and
agencies................................. $21,593,005 $ 231,396 $ (210,456) $21,613,945
Obligations of states and political
subdivisions............................. 5,050,564 177,018 (2,177) 5,225,405
Mortgage-backed securities.................. 400,000 -- (760) 399,240
----------- -------- --------- -----------
$27,043,569 $ 408,414 $ (213,393) $27,238,590
=========== ======== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
1994
----------------------------------------------------
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Securities available for sale:
U.S. Treasury securities and obligations of U.S.
Government corporations and agencies......... $1,505,183 $ 12,178 $ (13,279) $1,504,082
========== ======= ======== ==========
</TABLE>
<TABLE>
<CAPTION>
1994
-------------------------------------------------------
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
----------- ---------- ----------- -----------
<S> <C> <C> <C> <C>
Securities held to maturity:
U.S. Treasury securities and obligations of
U.S. Government corporations and
agencies................................ $20,859,056 $ 27,696 $(1,445,937) $19,440,815
Obligations of states and political
subdivisions............................ 5,056,116 15,770 (163,926) 4,907,960
Mortgage-backed securities................. 400,000 -- (19,200) 380,800
----------- ------- ----------- -----------
$26,315,172 $ 43,466 $(1,629,063) $24,729,575
=========== ======= =========== ===========
</TABLE>
C-14
<PAGE> 100
CENTRA FINANCIAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993
The amortized cost and estimated fair value of investment securities at
December 31, 1995, by contractual maturity, are shown below. Expected maturities
will differ from contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
ESTIMATED
AMORTIZED FAIR
COST VALUE
----------- -----------
<S> <C> <C>
Due in one year or less............................................ $ 1,100,647 $ 1,107,230
Due after one year through five years.............................. 5,356,651 5,396,187
Due after five years through ten years............................. 6,471,264 6,686,424
Due after ten years................................................ 13,715,007 13,649,509
----------- -----------
26,643,569 26,839,350
Mortgage-backed securities......................................... 400,000 399,240
----------- -----------
$27,043,569 $27,238,590
=========== ===========
</TABLE>
Proceeds from the sale of securities held for sale were $969,060 during the
year ended December 31, 1993. The gross realized losses on such sales totaled
$30,940. There were no sales of securities during 1995 and 1994.
Investment securities with carrying values of approximately $500,000
December 31, 1995 were pledged to secure public deposits and for other purposes
as required by law.
Securities with an amortized cost of $23,090,000 and a related net
unrealized gain of $121,000 were transferred into available for sale from held
to maturity on December 31, 1995. This transfer was made in accordance with
Financial Accounting Standards Board implementation guidance which permitted a
one-time reassessment of securities classification under SFAS 115.
(3) LOANS
Loans at December 31 are summarized below:
<TABLE>
<CAPTION>
1995 1994
----------- -----------
<S> <C> <C>
Residential real estate........................................ $11,074,753 $11,207,393
Commercial real estate......................................... 6,799,028 7,376,865
Commercial..................................................... 20,602,165 18,180,237
Home equity.................................................... 878,073 1,016,169
Installment and other.......................................... 2,412,348 2,340,864
----------- -----------
$41,766,367 $40,121,528
=========== ===========
</TABLE>
Certain of the Company's executive officers, directors and businesses in
which directors are major shareholders are loan customers of the Bank. As of
December 31, 1995 and 1994, loans aggregating approximately $759,000, and
$1,125,000, respectively, were outstanding to such parties. These loans were
made on the same terms as those prevailing for comparable transactions with
other loan customers and do not involve more than the normal risk of
collectibility. During 1995, approximately $40,800 of new loans were made and
repayments (collections or maturities) totaled approximately $406,800.
Nonperforming loans of the Bank approximated $21,000 at December 31, 1993.
There were no nonperforming loans at December 31, 1995 or 1994.
C-15
<PAGE> 101
CENTRA FINANCIAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993
(4) ALLOWANCE FOR LOAN LOSSES
A summary of the changes in the allowance for loan losses is as follows:
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Balance, beginning of year................................ $571,420 $574,099 $520,049
Provision charged to expense.............................. -- -- 76,900
Loan charge-offs, net of recoveries....................... (14,951) (2,679) (22,850)
-------- -------- --------
Balance, end of year...................................... $556,469 $571,420 $574,099
======== ======== ========
</TABLE>
(5) BANK PREMISES AND EQUIPMENT
Bank premises and equipment is summarized as follows:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Land............................................................. $ 165,511 $ 165,511
Buildings and improvements....................................... 2,887,233 2,868,911
Furniture and equipment.......................................... 1,132,451 1,095,232
---------- ----------
4,185,195 4,129,654
Less accumulated depreciation.................................... 1,563,510 1,360,644
---------- ----------
Bank premises and equipment, net................................. $2,621,685 $2,769,010
========== ==========
</TABLE>
(6) DEPOSITS
Certificates of deposit include approximately $2,300,000 and $1,121,000 of
certificates of $100,000 or more at December 31, 1995 and 1994, respectively.
Interest expense on such deposits for the years ended December 31, 1995, 1994
and 1993 was approximately $76,000, $41,000 and $56,000, respectively.
(7) EMPLOYEE BENEFIT PLANS
The Bank has a defined contribution plan (Plan) which covers substantially
all full-time employees. Participation in the Plan requires that an employee be
at least twenty-and one-half (20 1/2) years of age and have six months of
service. Employees may elect to defer up to 7% of their defined salary. The Bank
may elect to make annual matching contributions up to 2% of eligible employees'
annual compensation. In addition, the Bank also makes a contribution of 6% of
the base salary for all qualified participants. Vesting in the participants'
accounts is based on years of continuous service and a participant is vested
based on a graduated scale after one to six years of credited service.
Employee benefit Plan expense totaled approximately $62,000, $59,000 and
$57,000 in 1995, 1994 and 1993, respectively.
The Bank has deferred compensation arrangements for certain key employees
and directors. The balance accrued totaled approximately $720,000 and $690,000
at December 31, 1995 and 1994, respectively.
C-16
<PAGE> 102
CENTRA FINANCIAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993
(8) INCOME TAXES
Income tax expense (benefit) consists of the following:
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
1995 1994 1993
-------- -------- --------
<S> <C> <C> <C>
Current income tax expense (benefit):
Federal................................................. $263,770 $365,997 $208,623
State................................................... (8,391) 25,895 40,196
-------- -------- --------
Total current............................................. 255,379 391,892 248,819
-------- -------- --------
Deferred income tax expense (benefit):
Federal................................................. (8,700) (57,000) (49,000)
State................................................... (3,750) (13,200) (12,000)
-------- -------- --------
Total deferred............................................ (12,450) (70,200) (61,000)
-------- -------- --------
Total income tax expense.................................. $242,929 $321,692 $187,819
======== ======== ========
</TABLE>
The tax effects of temporary differences that give rise to significant
portions of deferred tax assets and deferred tax liabilities are presented
below:
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------
1995 1994
-------- --------
<S> <C> <C>
Deferred tax assets:
Allowance for loan losses......................................... $127,300 $133,600
Deferred compensation............................................. 300,100 290,600
Other............................................................. 2,000 --
-------- --------
Total gross deferred tax assets..................................... 429,400 424,200
-------- --------
Deferred tax liabilities:
Fixed assets, principally depreciation............................ 48,700 49,400
Unrealized appreciation on securities available-for-sale.......... 68,222 --
Discount accretion................................................ 6,100 4,600
Other............................................................. 5,928 14,000
-------- --------
Total gross deferred tax liabilities................................ 128,950 68,000
-------- --------
Net deferred tax asset.............................................. $300,450 $356,200
======== ========
</TABLE>
Actual income tax expense differs from the "expected" income tax expense,
computed by applying the statutory Federal corporate tax rate of 34% to income
before income tax expense, as follows for the years ended December 31:
<TABLE>
<CAPTION>
1995 1994 1993
-------- -------- ---------
<S> <C> <C> <C>
Federal income tax expense at statutory rate of 34%...... $346,539 $412,356 $ 335,844
Tax exempt interest income............................... (87,620) (99,043) (115,531)
State income taxes, net of Federal income tax benefit.... (7,786) 8,379 18,609
Other, net............................................... (8,204) -- (51,103)
-------- -------- --------
$242,929 $321,692 $ 187,819
======== ======== ========
</TABLE>
C-17
<PAGE> 103
CENTRA FINANCIAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993
(9) DIVIDENDS
The declaration and payment of cash dividends by the Bank is restricted by
certain statutory and regulatory limitations. The effect of these regulations
limits the amount of earnings available for such cash dividends to retained
earnings. Such dividends may also be limited by regulatory capital requirements.
(10) REGULATORY CAPITAL REQUIREMENTS
The Bank is required to maintain minimum amounts of capital to total assets
and to total "risk weighted" assets, as defined by the banking regulators.
Capital is measured by two risk-based ratios: Tier I capital and total capital
which includes Tier II capital and supplementary capital. Tier I capital
consists of stockholders' equity and minority interest reduced for goodwill,
while Tier II capital includes certain long-term debt and the allowance for loan
losses. The guidelines require that companies must have ratios of 4% and 8% for
Tier I capital and total capital, respectively. As of December 31, 1995, the
Bank exceeds these minimum standards. At December 31, 1995, the Bank's leverage
ratio, Tier I capital divided by total assets, also exceeds the 4% minimum
standard.
(11) FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
The Bank is party to financial instruments with off-balance sheet risk in
the normal course of business to meet the financing needs of customers. These
financial instruments consist of commitments to extend credit and standby
letters of credit and involve, to varying degrees, elements of credit and
interest rate risk in excess of the amount recognized in the consolidated
financial statements. The contract amounts reflect the extent of involvement the
Bank has in particular classes of financial instruments.
The Bank's exposure to credit loss in the event of nonperformance by the
other party to the financial instrument for commitments to extend credit and
standby letters of credit is represented by the contractual notional amount of
those instruments. The Bank uses the same credit policies in making commitments
and conditional obligations as for instruments reflected in the consolidated
financial statements.
Financial instruments whose contract amounts represent potential credit
risk at December 31, 1995 and 1994 are as follows:
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Commitments to extend credit......................................... $8,165,000 $8,993,000
========== ==========
Standby letters of credit............................................ $ 147,000 $ 26,000
========== ==========
</TABLE>
Commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and generally require a fee. As some commitments expire without being drawn
upon, the total commitment amounts do not necessarily represent future cash
requirements. The Bank evaluates the credit worthiness of each customer on a
case by case basis. The Bank generally extends credit only on a secured basis.
Collateral obtained varies but consists primarily of real estate, equipment,
accounts receivable, inventory and motor vehicles. The Bank's lending area
includes primarily Milwaukee and Waukesha Counties.
Standby letters of credit are conditional commitments issued by the Bank to
guarantee the performance of a customer to a third-party. Standby letters of
credit outstanding at December 31, 1995 expire within one year. The credit risk
involved in issuing letters of credit is essentially the same as that involved
in extending loan facilities to customers. The Bank holds certificates of
deposit, accounts receivable, inventory, equipment and real estate as collateral
supporting those commitments for which collateral is deemed necessary.
C-18
<PAGE> 104
CENTRA FINANCIAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993
(12) LEASES
The Bank leases space in certain of its buildings to tenants. Noncancelable
operating leases for such office space will expire during 1996. The future
minimum payments receivable under noncancelable operating leases are
approximately $24,000 as of December 31, 1995. Gross rental income, which was
included in other income, was approximately $45,000 in 1995, 1994, and 1993.
(13) PARENT COMPANY FINANCIAL INFORMATION
Presented below are condensed financial statements for Centra Financial,
Inc. (Parent Company) only:
CONDENSED BALANCE SHEETS
(PARENT COMPANY ONLY)
<TABLE>
<CAPTION>
DECEMBER 31,
------------------------
1995 1994
---------- ----------
<S> <C> <C>
ASSETS
Cash................................................................. $ 402,961 $ 335,980
Investment in bank subsidiary........................................ 7,744,300 7,033,786
Fixed assets, net.................................................... 62,593 93,391
Other assets......................................................... 7,192 14,865
---------- ----------
Total assets.................................................... $8,217,046 $7,478,022
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities -- Accrued expenses and other liabilities................ $ 2,335 $ 7,575
---------- ----------
Stockholders' Equity:
Common stock....................................................... $ 177,454 $ 177,454
Surplus............................................................ 3,688,894 3,688,894
Undivided profits.................................................. 4,306,216 3,688,751
Net unrealized gain on securities available for sale, net of
taxes........................................................... 126,799 --
Less: Treasury stock............................................... (84,652) (84,652)
---------- ----------
Total stockholders' equity........................................... $8,214,711 $7,470,447
---------- ----------
Total liabilities and stockholders' equity........................... $8,217,046 $7,478,022
========== ==========
</TABLE>
C-19
<PAGE> 105
CENTRA FINANCIAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993
CONDENSED STATEMENTS OF INCOME
(PARENT COMPANY ONLY)
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31, 1995 1994 1993
- -------------------------------------------------------------- -------- -------- --------
<S> <C> <C> <C>
Income:
Rental income............................................... $ 46,741 $ 45,770 $ 44,301
Interest income............................................. 7,501 4,610 4,429
-------- -------- --------
Total income............................................. $ 54,242 $ 50,380 $ 48,730
-------- -------- --------
Expense:
Depreciation................................................ $ 30,798 $ 30,798 $ 29,806
Other expense............................................... 46,624 16,452 12,327
-------- -------- --------
Total expense............................................ $ 77,422 $ 47,250 $ 42,133
-------- -------- --------
Income (loss) before income taxes and undistributed net income
of subsidiary............................................... $(23,180) $ 3,130 $ 6,597
Income tax expense (benefit).................................. (11,769) 3,200 4,400
-------- -------- --------
Income (loss) before undistributed net income of subsidiary... (11,411) (70) 2,197
Equity in undistributed net income of subsidiary.............. 787,715 891,190 797,760
-------- -------- --------
Net income............................................... $776,304 $891,120 $799,957
======== ======== ========
</TABLE>
C-20
<PAGE> 106
CENTRA FINANCIAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993
CONDENSED STATEMENTS OF CASH FLOWS
(PARENT COMPANY ONLY)
<TABLE>
<CAPTION>
1995 1994 1993
--------- --------- ---------
<S> <C> <C> <C>
Operating activities:
Net income............................................... $ 776,304 $ 891,120 $ 799,957
Adjustments to reconcile net income to net cash provided
by operating activities:
Equity in undistributed net income of subsidiary...... (787,715) (891,190) (797,760)
Depreciation and amortization......................... 36,999 36,999 36,007
Decrease in other assets.............................. 1,472 2,517 5,374
Increase (decrease) in accrued expenses and other
liabilities......................................... (5,240) 3,175 4,400
-------- -------- --------
Net cash provided by operating activities........ $ 21,820 $ 42,621 $ 47,978
-------- -------- --------
Investing Activities:
Purchase of equipment.................................... $ -- $ -- $ (9,169)
-------- -------- --------
Net cash used in investing activities............ $ -- $ -- $ (9,169)
-------- -------- --------
Financing activities:
Cash dividends paid...................................... $(158,839) $(155,387) $(146,840)
Cash dividends received.................................. 204,000 200,000 200,000
Purchase of treasury stock............................... -- -- (37,820)
-------- -------- --------
Net cash provided by financing activities........ $ 45,161 $ 44,613 $ 15,340
-------- -------- --------
Net increase in cash and cash equivalents........ 66,981 87,234 54,149
Cash and cash equivalents, beginning of year............... 335,980 248,746 194,597
-------- -------- --------
Cash and cash equivalents, end of year..................... $ 402,961 $ 335,980 $ 248,746
======== ======== ========
</TABLE>
(14) FAIR VALUE OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107, "Disclosures About
Fair Value of Financial Instruments", requires that the Company disclose
estimated fair values for its financial instruments. Fair value estimates,
methods and assumptions are set forth below for the Company's financial
instruments.
(A) CASH AND CASH EQUIVALENTS
The carrying amounts of cash and due from banks, federal funds sold and
other short-term investments approximate fair value because of their short-term
nature.
(B) SECURITIES AVAILABLE FOR SALE
The fair value of securities is estimated based on bid prices published in
financial newspapers or bid quotations received from securities dealers. See
note 2.
(C) LOANS
Fair values are estimated for portfolios of loans with similar financial
characteristics. The fair value of loans is calculated by discounting scheduled
cash flows through the estimated maturity using estimated market discount rates
that reflect the credit and interest rate risk inherent in the loan. The
estimate of
C-21
<PAGE> 107
CENTRA FINANCIAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993
maturity is based on the Bank's historical experience with repayments for each
loan classification, modified, as required, by an estimate of the effect of
current economic and lending conditions.
(D) DEPOSITS
The fair value of deposits with no stated maturity, such as non-interest
bearing demand deposits, interest-bearing deposits, savings, NOW accounts, and
money market checking accounts, is equal to the amount payable on demand as of
December 31, 1995. The fair value of other time deposits is based on the
discounted value of contractual cash flows. The discount rate is estimated using
the rates offered at December 31, 1995 for deposits of similar remaining
maturities.
The fair value estimates do not include the benefit that results from the
low cost funding provided by deposit liabilities compared to the cost of
borrowing funds in the market.
(E) LIMITATIONS
Fair value estimates are made at a specific point in time, based on
relevant market information and information about the financial instrument.
These estimates do not reflect any premium or discount that could result from
offering for sale at one time the Company's entire holdings of a particular
financial instrument. Because no market exists for a significant portion of the
Company's financial instruments, fair value estimates are based on judgments
regarding future expected loss experience, current economic conditions, risk
characteristics of various financial instruments, and other factors. These
estimates are subjective in nature and involve uncertainties and matters of
significant judgment and, therefore, cannot be determined with precision.
Changes in assumptions could significantly affect the estimates.
Fair value estimates are based on existing balance sheet financial
instruments without attempting to estimate the value of anticipated future
business and the value of assets and liabilities that are not considered
financial instruments. In addition, the tax ramifications related to the
realization of the unrealized gains and losses can have a significant effect on
fair value estimates and have not been considered in the estimates.
The estimated fair values of the Company's financial instruments at
December 31, 1995, are as follows:
<TABLE>
<CAPTION>
CARRYING
AMOUNT FAIR VALUE
----------- -----------
<S> <C> <C>
Financial assets:
Cash and cash equivalents........................................ $10,730,641 $10,730,641
Securities -- available for sale................................... 27,238,590 27,238,590
Loans, net......................................................... 41,766,367 41,632,364
Financial liabilities:
Deposits:
Without stated maturities..................................... 54,103,419 54,103,419
With stated maturities........................................ 19,819,240 19,824,436
----------- -----------
</TABLE>
The above does not include accrued interest receivable and payable which
are also considered financial instruments. The estimated fair value of such
items is considered to be the carrying amount.
(15) SUBSEQUENT EVENT
On November 6, 1996, the Company entered into an Agreement and Plan of
Merger ("Merger Agreement") with Associated Banc-Corp ("Associated") wherein
shareholders of the Company would receive shares of Associated in exchange for
their shares of the Company. The proposed merger is subject to
C-22
<PAGE> 108
CENTRA FINANCIAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) -- (CONTINUED)
DECEMBER 31, 1995, 1994 AND 1993
the appropriate regulatory and shareholder approvals and compliance with the
terms of the Merger Agreement by the Company and Associated. The terms of the
proposed transaction, which is expected to be consummated in early 1997, require
that the transaction be accounted for as a pooling of interests. Under the terms
of the Merger Agreement, each issued and outstanding share of common stock of
the Company shall be converted into the right to receive that number of shares
of common stock of Associated equal to the greater of (1) $14,400,000 divided by
the daily average price (as defined) divided by the number of Company shares
issued and outstanding immediately prior to the effective time, or (2) two
shares. Pursuant to the Merger Agreement, a cash payment will be made in lieu of
issuance of any fractional shares.
C-23
<PAGE> 109
CENTRA FINANCIAL, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (UNAUDITED)
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
------------- ------------
<S> <C> <C>
ASSETS
Cash and due from banks............................................ $ 3,748,425 $ 5,284,565
Federal funds sold................................................. 2,125,000 4,350,000
Other short-term investments....................................... 4,272,844 1,096,076
----------- -----------
Cash and cash equivalents.......................................... 10,146,269 10,730,641
Investment securities available for sale, at fair value............ 29,663,385 27,238,590
----------- -----------
Loans.............................................................. 36,202,821 41,766,367
Allowance for loan losses.......................................... (544,636) (556,469)
----------- -----------
Loans, net......................................................... 35,658,185 41,209,898
Bank premises and equipment, net................................... 2,482,320 2,621,685
Accrued interest receivable and other assets....................... 1,695,935 1,692,658
----------- -----------
Total assets.................................................. $ 79,646,094 $ 83,493,472
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Demand deposits.................................................. $ 14,760,885 $ 16,431,191
Savings, money market, IRA and NOW deposits...................... 37,906,445 37,672,228
Certificates of deposit.......................................... 17,441,221 19,819,240
----------- -----------
Total deposits................................................ 70,108,551 73,922,659
Accrued expenses and other liabilities............................. 1,246,174 1,356,102
----------- -----------
Total liabilities............................................. $ 71,354,725 $ 75,278,761
=========== ===========
Stockholders' equity:
Common stock: $1 par value; 5,000,000 shares authorized;
177,454 shares issued......................................... $ 177,454 $ 177,454
Surplus.......................................................... 3,688,894 3,688,894
Undivided profits................................................ 4,730,872 4,306,216
Unrealized gain (loss) on investment securities available for sale,
net of taxes..................................................... (221,199) 126,799
Less: Treasury stock at cost (4,802 shares in 1996 and 1995)....... (84,652) (84,652)
----------- -----------
Total stockholders' equity.................................... 8,291,369 8,214,711
----------- -----------
Commitments and contingencies:
Total liabilities and stockholders' equity.................... $ 79,646,094 $ 83,493,472
=========== ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
C-24
<PAGE> 110
CENTRA FINANCIAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Interest income:
Interest and fees on loans......................................... $2,607,084 $2,791,339
Interest on securities:
Taxable......................................................... 1,232,122 1,122,446
Tax-exempt...................................................... 211,717 211,940
Interest on federal funds sold and other short-term investments.... 180,476 112,934
---------- ----------
Total interest income...................................... 4,231,399 4,238,659
---------- ----------
Interest expense on deposits......................................... 1,764,360 1,647,233
---------- ----------
Net interest income.................................................. 2,467,039 2,591,426
Provision for loan losses............................................ -- --
---------- ----------
Net interest income after provision for loan losses........ $2,467,039 $2,591,426
---------- ----------
Other income:
Service fees and charges........................................... $ 218,899 $ 260,528
Other.............................................................. 25,566 34,119
---------- ----------
Total other income......................................... $ 244,465 $ 294,647
========== ==========
Other expense:
Salaries and employee benefits..................................... $ 952,885 $ 971,350
Net occupancy expense.............................................. 165,930 196,625
Furniture and equipment expense.................................... 103,737 95,177
Data processing expense............................................ 151,575 146,159
Advertising........................................................ 41,250 36,260
FDIC expense....................................................... 12,381 102,279
Deferred compensation expense...................................... 30,289 19,161
Directors fees..................................................... 59,150 60,038
Printing and supplies.............................................. 39,516 37,120
Postage............................................................ 26,469 39,042
Professional fees.................................................. 126,153 46,506
Wire transfer loss................................................. -- 265,000
Other operating expenses........................................... 220,213 217,109
---------- ----------
Total other expense........................................ 1,929,548 2,231,826
---------- ----------
Income before income tax expense..................................... 781,956 654,247
Income tax expense................................................... 227,810 160,884
---------- ----------
Net income........................................................... $ 554,146 $ 493,363
========== ==========
Net income per share................................................. $ 3.21 $ 2.86
========== ==========
Weighted average shares outstanding.................................. 172,652 172,652
========== ==========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
C-25
<PAGE> 111
CENTRA FINANCIAL, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
<TABLE>
<CAPTION>
1996 1995
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net income...................................................... $ 554,146 $ 493,363
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization................................ 144,916 159,593
Deferred income taxes........................................ (72,672) 8,982
Decrease (increase) in accrued interest receivable and other
assets...................................................... 723 (76,518)
Increase in accrued expenses and other liabilities........... 155,294 684,392
------------ -----------
Net cash provided by operating activities......................... $ 782,407 $ 1,269,812
------------ -----------
Cash flows from investing activities:
Proceeds from maturities of securities held to maturity......... $ -- $ 1,963,509
Proceeds from maturities of securities available for sale....... 10,064,683 216,951
Purchases of securities available for sale...................... (13,034,027) (3,741,172)
Net decrease (increase) in loans................................ 5,551,713 (1,069,231)
Purchases of bank premises and equipment........................ (5,551) (44,857)
------------ -----------
Net cash provided by (used in) investing activities............... $ 2,576,818 $(2,674,800)
------------ -----------
Cash flows from financing activities:
Net increase (decrease) in deposits............................. $ (3,814,108) $ 5,089,306
Decrease in federal funds purchased............................. -- (200,000)
Cash dividends paid............................................. (129,489) (43,163)
------------ -----------
Net cash provided by (used in) financing activities............... (3,943,597) 4,846,143
------------ -----------
Net increase (decrease) in cash and cash equivalents.............. (584,372) 3,441,155
Cash and cash equivalents, beginning of period.................... 10,730,641 3,990,032
------------ -----------
Cash and cash equivalents, end of period.......................... $ 10,146,269 $ 7,431,187
------------ -----------
Supplemental disclosures of cash flow information --
Cash paid during the nine month period for:
Interest..................................................... $ 1,753,781 $ 1,545,773
Income taxes................................................. $ 223,566 $ 360,995
============ ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
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<PAGE> 112
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
NOTE 1 -- GENERAL
The accounting and reporting policies of Centra Financial, Inc. and
Subsidiary (the "Company") conform to generally accepted accounting principles
and to general practices within the banking industry. Significant accounting
policies used by the Company are described in the summary of significant
accounting polices included as part of the December 31, 1995, 1994 and 1993
unaudited consolidated financial statements.
The condensed financial statements reflect adjustments, all of which are of
a normal recurring nature, and, in the opinion of management, necessary for a
fair statement of results for the interim periods. The operating results for the
nine months ended September 30, 1996 and 1995 are not necessarily indicative of
the results which may be expected for the entire year. The accompanying
condensed consolidated financial statements should be read in conjunction with
the Company's December 31, 1995, 1994, and 1993 unaudited consolidated financial
statements and related notes.
NOTE 2 -- ALLOWANCE FOR LOAN LOSSES
A summary of the changes in the allowance for loan losses is as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
--------------------
1996 1995
-------- --------
<S> <C> <C>
Balance, beginning of period............................................ $556,469 $571,420
Provision charged to expense............................................ -- --
Loan charge-offs, net of recoveries..................................... 11,833 11,933
-------- --------
Balance, end of period.................................................. $544,636 $559,487
-------- --------
</TABLE>
NOTE 3 -- NONPERFORMING LOANS
Nonperforming loans are summarized as follows:
<TABLE>
<CAPTION>
SEPTEMBER 30,
--------------------
1996 1995
-------- --------
<S> <C> <C>
Nonperforming loans..................................................... $269,000 $ --
-------- --------
</TABLE>
NOTE 4 -- NET INCOME PER SHARE
For purposes of calculating net income per share, the weighted average
number of shares outstanding for the nine months ended September 30, 1996 and
1995 was 172,652 shares.
NOTE 5 -- SUBSEQUENT EVENT
On November 6, 1996, the Company entered into an Agreement and Plan of
Merger ("Merger Agreement") with Associated Banc-Corp ("Associated") wherein
shareholders of the Company would receive shares of Associated in exchange for
their shares of the Company. The proposed merger is subject to the appropriate
regulatory and shareholder approvals and compliance with the terms of the Merger
Agreement by the Company and Associated. The terms of the proposed transaction,
which is expected to be consummated in early 1997, require that the transaction
be accounted for as a pooling of interests. Under the terms of the Merger
Agreement, each issued and outstanding share of common stock of the Company
shall be converted into the right to receive that number of shares of common
stock of Associated equal to the greater of (1) $14,400,000 divided by the daily
average price (as defined) divided by the number of Company shares issued and
outstanding immediately prior to the effective time, or (2) two shares. Pursuant
to the Merger Agreement, a cash payment will be made in lieu of issuance of any
fractional shares.
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<PAGE> 113
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Directors and Officers.
The Registrant is incorporated under the Wisconsin Business Corporation
Law (the "WBCL"). Under Section 180.0851 of the WBCL, the Registrant shall
indemnify a director or officer, to the extent such person is successful on the
merits or otherwise in the defense of a proceeding, for all reasonable expenses
incurred in the proceeding, if such person was a party to such proceeding
because he or she was a director or officer of the Registrant. In all other
cases, the Registrant shall indemnify a director or officer against liability
incurred in a proceeding to which such person was a party because he or she was
a director or officer of the Registrant; unless liability was incurred because
he or she breached or failed to perform a duty owed to the Registrant and such
breach or failure to perform constitutes: (i) a willful failure to deal fairly
with the Registrant or its shareholders in connection with a matter in which
the director or officer has a material conflict of interest; (ii) a violation
of criminal law, unless the director or officer had reasonable cause to believe
his or her conduct was lawful or no reasonable cause to believe his or her
conduct was unlawful; (iii) a transaction from which the director or officer
derived an improper personal profit; or (iv) willful misconduct. Section
180.0858 of the WBCL provides that subject to certain limitations, the
mandatory indemnification provisions do not preclude any additional right to
indemnification or allowance of expenses that a director or officer may have
under the Registrant's articles of incorporation, bylaws, a written agreement
between the director or officer and the Registrant or a resolution of the Board
of Directors or adopted by majority vote of the Registrant's shareholders.
Section 180.0859 of the WBCL provides that it is the public policy of the
State of Wisconsin to require or permit indemnification, allowance of expenses
and insurance to the extent required or permitted under Sections 180.0850 to
180.0858 of the WBCL for any liability incurred in connection with a proceeding
involving a federal or state statute, rule or regulation regulating the offer,
sale or purchase of securities.
The Registrant's Articles of Incorporation contains no provisions in
relation to the indemnification of directors and officers of the Registrant.
Article XI of the Registrant's By-laws ("Article XI") authorizes
indemnification of officers and directors of the Registrant consistent with the
description of the indemnification provisions in Section 180.0851 of the WBCL
as
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<PAGE> 114
described above. Article XI provides that the Registrant shall indemnify a
director, officer, employee or agent of the Registrant to the extent such
individual has been successful on the merits or otherwise in the defense of any
threatened, pending or completed civil, criminal, administrative or
investigative action, suit, arbitration or other proceeding, whether formal or
informal (including, but not limited to, any act or failure to act alleged or
determined (i) to have been negligent, (ii) to have violated the Employee
Retirement Income Security Act of 1974; or (iii) to have violated Sections
180.0832, 180.0833 and 180.1202 of the WBCL, or any successor thereto,
regarding loans to directors, unlawful distributions and distributions of
assets, which involves foreign, federal, state or local law and which is
brought by or in the right of the Registrant or by any other person or entity,
to which the director, officer, employee or agent was a party because he or she
is a director, officer, employee or agent. In all other cases, the Registrant
shall indemnify a director, officer, employee or agent of the Registrant
against liability and expenses incurred by such person in a proceeding unless
it shall have been proven by final judicial adjudication that such person
breached or failed to perform a duty owed to the Registrant under the
circumstances described above as set forth in Section 180.0851 of the WBCL.
Article XI defines a "director, officer, employee or agent" as (i) a natural
person who, is or was a director, officer, employee or agent of the Registrant,
(ii) a natural person who, while a director, officer, employee or agent of the
Registrant, is or was serving either pursuant to the Registrant's specific
request or as a result of the nature of such person's duties to the Registrant
as a director, officer, partner, trustee, member of any governing or decision
making committee, employee or agent of another corporation or foreign
corporation, partnership, joint venture, trust or other enterprise and (iii) a
person who, while a director, officer, employee or agent of the Registrant, is
or was serving an employee benefit plan because his or her duties to the
Registrant also impose duties on, or otherwise involve services by, the person
to the plan or to participants in or beneficiaries of the plan. Unless the
context requires otherwise, Article XI indemnification extends to the estate or
personal representative of a director, officer, employee or agent.
All officers, directors, employees and agents of controlled subsidiaries
of the Registrant shall be deemed for purposes of Article XI to be serving as
such officers, directors, employees and agents at the request of the
Registrant. The right to indemnification granted to such officers and
directors by Article XI is not subject to any limitation or restriction imposed
by any provision of the Articles of Incorporation or Bylaws of a controlled
subsidiary. For purposes of Article XI, a "controlled subsidiary" means any
corporation at least 80% of the outstanding voting stock of which is owned by
the Registrant or another controlled subsidiary of the Registrant.
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<PAGE> 115
Upon written request by a director, officer, employee or agent who is a
party to a proceeding, the Registrant shall pay or reimburse his or her
reasonable expenses as incurred if the director, officer, employee or agent
provides the Registrant with: (i) a written affirmation of his or her good
faith belief that he or she is entitled to indemnification under Article XI;
and (ii) a written undertaking to repay all amounts advanced without interest
to the extent that it is ultimately determined that indemnification under
Article XI is prohibited. The Registrant shall have the power to purchase and
maintain insurance on behalf of any person who is a director, officer, employee
or agent against any liability asserted against or incurred by the individual
in any such capacity arising out of his or her status as such, regardless of
whether the Registrant is required or authorized to indemnify or allow expenses
to the individual under Article XI.
The right to indemnification under Article XI may be amended only by a
majority vote of the shareholders and any reduction in the right to
indemnification may only be prospective from the date of such vote.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) Exhibits
Exhibit No.
2 Agreement and Plan of Merger dated as of November 6, 1996
between the Registrant and Centra Financial, Inc., incorporated
by reference to Exhibit A to the Proxy Statement/Prospectus of
the Registrant and Centra Financial, Inc. (the "Proxy
Statement/Prospectus").
3(a) Articles of Incorporation, as amended and restated,
incorporated by reference to Exhibit 3 of the Registrant's
Quarterly Report on Form 10-Q filed for the quarter ended June
30, 1993, SEC File No. 0-5519.
3(b) Bylaws, as amended, incorporated by reference to Exhibit 3(b)
of the Registrant's Quarterly Report on Form 10-Q filed for the
quarter ended September 30, 1991, SEC File No. 0-5519.
4 The Registrant has outstanding certain long term debt.
None of such debt exceeds 10% of the total assets of the
Registrant and its consolidated subsidiaries. Thus, copies of
the
II-3
<PAGE> 116
constituent instruments defining the rights of the holders of
such debt are not included as exhibits to this Registration
Statement. The Registrant agrees to furnish copies of such
instruments to the Commission upon request.
5 Opinion of Reinhart, Boerner, Van Deuren, Norris & Rieselbach,
s.c. regarding legality of issuance of the Registrant's
securities.
8 Opinion of Reinhart, Boerner, Van Deuren, Norris & Rieselbach,
s.c. regarding certain federal income tax matters.
10(a) The 1982 Incentive Stock Option Plan of the Registrant
incorporated by reference to Exhibit 10 to Annual Report on
Form 10-K for fiscal year ended December 31, 1987.
10(b) The Restated Long-Term Incentive Stock Option Plan of the
Registrant incorporated by reference to Exhibit 10 filed with
the Registrant's registration statement (33-86790) on Form S-8
filed under the Securities Act of 1933.
10(c) Deferred Compensation Agreement dated November 1, 1986
between Associated Bank Green Bay, National Association and
Robert C. Gallagher incorporated by reference to Exhibit 10(c)
of the Registrant's Annual Report on Form 10-K for fiscal year
ended December 31, 1992, SEC. File No. 0-5519.
10(d) Change of Control Plan of the Registrant effective April 25,
1994 incorporated by reference to Exhibit 10(d) of the
Registrant's Annual Report on Form 10-K for fiscal year ended
December 31, 1994, SEC File No. 0-5519.
10(e) Deferred Compensation Plan and Deferred Compensation Trust
effective as of December 16, 1993, and Deferred Compensation
Agreement of the Registrant dated December 31, 1994,
incorporated by reference to Exhibit 10(e) of the Registrant's
Annual Report on Form 10-K for fiscal year ended December 31,
1994, SEC File No. 0-5519.
II-4
<PAGE> 117
11 Statement Re Computation of Per Share Earnings incorporated
by reference to Exhibit 11 of the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995 and
Exhibit 11 of the Registrant's Quarterly Report on Form 10-Q
filed for the quarter ended September 30, 1996, SEC File No.
0-5519.
21 List of Subsidiaries of the Registrant incorporated by
reference to Exhibit 21 of the Registrant's Annual Report on
Form 10-K for the fiscal year ended December 31, 1995, SEC File
No. 0-5519.
23(a) Consent of KPMG Peat Marwick LLP.
23(b) Consent of Reinhart, Boerner, Van Deuren, Norris &
Rieselbach, s.c. incorporated by reference to Exhibit 5.
24 Powers of Attorney.
(b) No financial statement schedules are required to be filed herewith
pursuant to Item 21(b) or (c) of this Form.
ITEM 22. UNDERTAKINGS.
(a)(1) The undersigned Registrant hereby undertakes:
(i) To file, during any period in which offers or sales are being
made, a post-effective amendment to this registration statement
(x) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act"); (y) to
reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement; (z) to include any material
information with respect to the plan of distribution not
previously disclosed in the registration statement or any material
change to such information in the registration statement.
(ii) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
offered
II-5
<PAGE> 118
therein, and the offering of such securities at such time
shall be deemed to be the initial bona fide offering thereof.
(iii) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain
unsold at the termination of the offering.
(2) The undersigned registrant hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")
(and, where applicable, each filing of an employee benefit plan's annual
report to Section 15(d) of the Exchange Act), that is incorporated by
reference in the registration statement shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) The undersigned registrant hereby undertakes as follows: that
prior to any public reoffering of the securities registered hereunder
through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter
within the meaning of Rule 145(c), the issuer undertakes that such
reoffering prospectus will contain the information called for by the
applicable registration form with respect to reofferings by persons who
may be deemed underwriters, in addition to the information called for by
the other items of the applicable form.
(4) The registrant undertakes that every prospectus (i) that is
filed pursuant to paragraph (3) immediately preceding, or (ii) that
purports to meet the requirements of Section 10(a)(3) of the Securities
Act and is used in connection with an offering of securities subject to
Rule 415, will be filed as a part of an amendment to the registration
statement and will not be used until such amendment is effective, and
that, for purposes of determining any liability under the Securities Act,
each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(5) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the registrant pursuant to the foregoing provisions, or
otherwise,
II-6
<PAGE> 119
the registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Securities Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities
(other than the payment by the registrant of expenses incurred or paid
by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the registrant will, unless in the opinion
of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy, as
expressed in the Securities Act and will be governed by the final
adjudication of such issue.
(b) The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the registration statement through
the date of responding to the request.
(c) The undersigned registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
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<PAGE> 120
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
registrant has duly caused this Admendment No. 2 to the registration statement
to be signed on its behalf by the undersigned, thereunto duly authorized, in
the City of Green Bay, State of Wisconsin, on this 21st day of January, 1997.
ASSOCIATED BANC-CORP
By: /s/ Harry B. Conlon
-----------------------------
Harry B. Conlon,
Chairman, President and
Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Amendment
No. 2 to the registration statement has been signed by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Harry B. Conlon Chairman, President, Chief January 21, 1997
- ----------------------- Executive Officer and a Director
Harry B. Conlon (Principal Executive Officer)
/s/ Robert C. Gallagher Executive Vice President and a January 21, 1997
- ----------------------- Director
Robert C. Gallagher
/s/ Joseph B. Selner Senior Vice President, Chief January 21, 1997
- ----------------------- Financial Officer and Principal
Joseph B. Selner Financial and Accounting Officer
* Director January 21, 1997
- -----------------------
Robert Feitler
</TABLE>
II-8
<PAGE> 121
<TABLE>
<S> <C> <C>
* Director January 21, 1997
- -----------------------
Ronald R. Harder
* Director January 21, 1997
- -----------------------
John S. Holbrook, Jr.
* Director January 21, 1997
- -----------------------
William R. Hutchinson
* Director January 21, 1997
- -----------------------
James F. Janz
* Director January 21, 1997
- -----------------------
John C. Meng
* Director January 21, 1997
- -----------------------
J. Douglas Quick
</TABLE>
*Brian R. Bodager hereby signs this registration statement on January 21,
1997 on behalf of each of the indicated persons for whom he is attorney-in-fact
pursuant to a power of attorney filed herewith.
*By:/s/ Brian R. Bodager
------------------------
Brian R. Bodager
II-9
<PAGE> 122
EXHIBIT INDEX
Exhibit No.
2 Agreement and Plan of Merger dated as of November 6, 1996
among the Registrant and Centra Financial, Inc., incorporated by
reference to Exhibit A to the Proxy Statement/Prospectus of the
Registrant and Centra Financial, Inc. (the "Proxy
Statement/Prospectus").
3(a) Articles of Incorporation, as amended and restated, incorporated by
reference to Exhibit 3 of the Registrant's Quarterly Report on Form
10-Q filed for the quarter ended June 30, 1993, SEC File No. 0-5519.
3(b) Bylaws, as amended, incorporated by reference to Exhibit 3(b)
of the Registrant's Quarterly Report on Form 10-Q filed for the
quarter ended September 30, 1991, SEC File No. 0-5519.
4 The Registrant has outstanding certain long term debt. None
of such debt exceeds 10% of the total assets of the Registrant and
its consolidated subsidiaries. Thus, copies of the constituent
instruments defining the rights of the holders of such debt are not
included as exhibits to this Registration Statement. The Registrant
agrees to furnish copies of such instruments to the Commission upon
request.
5 Opinion of Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c.
regarding legality of issuance of the Registrant's securities.
8 Opinion of Reinhart, Boerner, Van Deuren, Norris & Rieselbach, s.c.
regarding certain federal income tax matters.
10(a) The 1982 Incentive Stock Option Plan of the Registrant
incorporated by reference to Exhibit 10 to Annual Report on Form
10-K for fiscal year ended December 31, 1987.
10(b) The Restated Long-Term Incentive Stock Option Plan of the
Registrant incorporated by reference to Exhibit 10 filed with the
Registrant's registration statement (33-86790) on Form S-8 filed
under the Securities Act of 1933.
<PAGE> 123
10(c) Deferred Compensation Agreement dated November 1, 1986
between Associated Bank Green Bay, National Association and Robert
C. Gallagher incorporated by reference to Exhibit 10(c) of the
Registrant's Annual Report on Form 10-K for fiscal year ended
December 31, 1992, SEC File No. 0-5519.
10(d) Change of Control Plan of the Registrant effective April 25,
1994 incorporated by reference to Exhibit 10(d) of the Registrant's
Annual Report on Form 10-K for fiscal year ended December 31, 1994,
SEC File No. 0-5519.
10(e) Deferred Compensation Plan and Deferred Compensation Trust
effective as of December 16, 1993, and Deferred Compensation
Agreement of the Registrant dated December 31, 1994, incorporated by
reference to Exhibit 10(e) of the Registrant's Annual Report on Form
10-K for fiscal year ended December 31, 1994, SEC File No. 0-5519.
11 Statement Re Computation of Per Share Earnings incorporated
by reference to Exhibit 11 of the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1995 and Exhibit 11 of
the Registrant's Quarterly Report on Form 10-Q filed for the quarter
ended September 30, 1996, SEC File No. 0-5519.
21 List of Subsidiaries of the Registrant incorporated by
reference to Exhibit 21 of the Registrant's Annual Report on Form
10-K for the fiscal year ended December 31, 1995, SEC File No.
0-5519.
23(a) Consent of KPMG Peat Marwick LLP.
23(b) Consent of Reinhart, Boerner, Van Deuren, Norris &
Rieselbach, s.c. incorporated by reference to Exhibit 5.
24 Powers of Attorney.
<PAGE> 1
EXHIBIT 5
January 21, 1997
Associated Banc-Corp
112 North Adams Street
P.O. Box 13307
Green Bay, WI 54307
Gentlemen: Re: Registration Statement on Form S-4
We have acted as counsel for Associated Banc-Corp, a Wisconsin corporation
(the "Company"), in connection with the issuance by the Company of up to
345,304 shares of Common Stock, par value $.01 per share, of the Company (the
"Shares"). The Shares will be issued to the shareholders of Centra Financial,
Inc. ("Centra") pursuant to the Agreement and Plan of Merger, dated as of
November 6, 1996, by and between the Company and Centra (the "Merger
Agreement").
In such capacity, we have examined, among other documents, the
Registration Statement on Form S-4 filed with the Securities and Exchange
Commission on the date hereof or shortly hereafter (the "Registration
Statement"), including the Proxy Statement/Prospectus contained therein, to
effect the registration of the Shares under the Securities Act of 1933, as
amended (the "Act"). In making our examination, we have assumed the
genuineness of all signatures, the authenticity of all documents submitted to
us as originals, the conformity to originals of all documents submitted to us
as certified or photostatic copies and the capacity of each party executing a
document to so execute such document.
Based upon the foregoing, and upon such further examination as we have
deemed relevant and necessary, we are of the opinion that the Shares have been
legally and validly authorized under the Articles of Incorporation of the
Company and the laws of the State of Wisconsin and, when issued and delivered
to the shareholders of Centra pursuant to the Merger Agreement, and as provided
under applicable Wisconsin law, the Registration Statement and the Company's
Articles of Incorporation and By-Laws, will be validly issued and outstanding
and fully paid and nonassessable, except as set forth in section 180.0622(2)(b)
of the Wisconsin Business Corporation Law, as interpreted.
<PAGE> 2
This opinion is furnished to you in connection with the filing of the
Registration Statement, and is not to be used, circulated, quoted or otherwise
relied upon for any other purpose.
We hereby consent to the use of our name beneath the caption "Legal
Matters" in the Proxy Statement/Prospectus forming part of the Registration
Statement and to the filing of a copy of this opinion as an exhibit thereto.
In giving our consent, we do not admit that we are "experts" within the meaning
of section 11 of the Act or within the category of persons whose consent is
required by section 7 of the Act.
Yours very truly,
REINHART, BOERNER, VAN DEUREN,
NORRIS & RIESELBACH, s.c.
BY /s/ James M. Bedore
James M. Bedore
<PAGE> 1
EXHIBIT 8
January 21, 1997
The Board of Directors
Associated Banc-Corp
112 North Adams Street
P.O. Box 13307
Green Bay, WI 54307-3307
The Board of Directors
Centra Financial, Inc.
10701 West National Avenue
West Allis, WI 53227
Gentlemen: Re: Classification of Merger
You have requested our opinion with respect to certain federal income tax
consequences of the proposed merger (the "Merger") of Centra Financial, Inc., a
Wisconsin corporation ("Centra") with and into Associated Banc-Corp, a
Wisconsin corporation ("Associated"), pursuant to the Agreement and Plan of
Merger dated as of November 6, 1995, between Associated and Centra (the
"Agreement").
In connection with the proposed Merger, you have informed us of the
following:
1. Pursuant to the laws of the State of Wisconsin, Company will merge with
and into Associated. Associated will be the surviving corporation.
2. Pursuant to the Merger, all of Centra's assets will be transferred to
Associated and Associated will assume all of Centra's liabilities.
3. At the effective time of the Merger, each outstanding share of Centra
Common Stock will be converted into and exchanged for shares of Associated
Common Stock, except for cash received by Centra shareholders in lieu of
fractional shares of Associated Common Stock or received by Centra shareholders
who dissent to the Merger, based on the Conversion Factor set forth in the
Agreement.
<PAGE> 2
4. As soon as practicable at or after the effective time of the Merger,
the exchange agent will distribute Associated Common Stock and cash in lieu of
fractional shares to holders of Centra Common Stock.
5. Associated will continue to conduct one or more of the historic
businesses now being conducted by Centra, through its wholly owned subsidiary
which is Central Bank of West Allis, a Wisconsin state chartered bank located
in West Allis, Wisconsin (the "Bank").
6. Associated and Centra each have valid business purposes for the Merger
apart from tax considerations.
7. Associated has no plan or intention to reacquire any of the Associated
Common Stock issued in the Merger.
8. The fair market value of the Associated Common Stock to be received by
Company shareholders with respect to their Centra Common Stock will be, in each
instance, approximately equal to the fair market value of the Centra Common
Stock surrendered in exchange therefore.
This opinion is expressly contingent upon satisfaction of the continuity
of interest requirements of the Treasury Regulations. The management of Centra
has advised us to the best of their knowledge that there is no plan or
intention on the part of Centra shareholders to sell or otherwise dispose of
Associated Common Stock received in the merger that would result in failure to
satisfy the continuity of interest requirement as prescribed in the Treasury
Regulations and the Internal Revenue Service guidelines.
In connection herewith, we have examined the Agreement and Plan of Merger,
the Registration Statement on Form S-4 to be filed by Associated on the date
hereof with the Securities and Exchange Commission (which contains a Proxy
Statement/Prospectus) and such information as we have deemed relevant. As to
questions of fact material to the opinions herein, we have relied upon
certificates from the management of Associated and Centra. On the basis of the
foregoing, we are of the opinion that for federal income tax purposes:
1. The Merger will qualify as a reorganization within the meaning of
section 368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the
"Code"), and Associated and Centra will each be "a party to the reorganization"
within the meaning of section 368(b) of the Code for the purposes of this
reorganization.
<PAGE> 3
2. No gain or loss will be recognized by a shareholder of Centra upon the
exchange of Centra Common Stock solely for Associated Common Stock pursuant to
the Merger, except with respect to cash received in lieu of fractional shares
of Associated Common Stock.
3. The aggregate tax basis of the Associated Common Stock received by a
shareholder of Centra as a result of the Merger will be the same as the
aggregate tax basis of the shares of Centra Common Stock surrendered in
exchange therefor.
4. The holding period of the Associated Common Stock received by a
shareholder of Centra as a result of the Merger will include the holding period
of the shares of Centra Common Stock surrendered in exchange therefor, provided
that such Centra Common Stock surrendered therefor was held as a capital asset
by the Centra shareholder at the consummation of the Merger.
5. The receipt by a holder of Centra Common Stock of cash in lieu of a
fractional share of Associated Common Stock will be treated as if he or she
received such fractional share from Associated and then had it redeemed for
cash. Such receipt of cash will be treated under Code section 302(b)(1) as
full payment in exchange for the fractional share.
The foregoing is only a general description of certain material federal
income tax consequences of the Merger for holders of Centra Common Stock who
are citizens or residents of the United States and who hold their shares as
capital assets, without regard to the particular facts and circumstances of the
tax situation of each holder of the Centra Common Stock. It does not discuss
all of the consequences that may be relevant to holders of the Centra Common
Stock entitled to special treatment under the Code (such as insurance
companies, financial institutions, dealers in securities, tax-exempt
organizations or foreign persons).
The summary set forth above does not report to be a complete analysis of
all potential tax effects of the transactions contemplated by the Merger
Agreements or the Merger itself. No information is provided herein with
respect to the application and effect of state, local and foreign tax laws and
the possible effects of changes in federal laws or other tax laws.
This opinion is based upon the existing provisions of the Code and
regulations thereunder (both final and proposed) and upon current Internal
Revenue Service published rulings and existing court decisions, any of which
could be changed at any time. Any such changes may be retroactive and could
<PAGE> 4
significantly modify the statements and opinions expressed herein. Similarly,
any change in the facts and assumptions stated above, upon which this opinion
is based, could modify the conclusion.
This opinion represents our best judgment as to the probable outcome of
the tax issues discussed and is not binding on the Internal Revenue Service.
However, we can give no assurance that the Service will not challenge our
conclusions and prevail in the courts in such a manner as to cause adverse tax
consequences to Associated, Centra or their shareholders.
Our opinion is limited to those federal tax issues specifically considered
herein and is addressed to and is only for the benefit of Associated and
Centra. The opinion is furnished to you pursuant to sections 7.02(f) and
7.03(e) of the Agreement and Plan of Merger and may not be used or relied upon
for any other purpose, without our express written consent.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement relating to the Merger and to the use of our name under
the captions "The Merger -- Certain Material Federal Income Tax Consequences"
and "Legal Opinions" in the Proxy Statement/Prospectus contained in such
Registration Statement. In giving such consent, we do not thereby concede that
we are within the category of persons whose consent is required under section 7
of the Securities Act of 1933, as amended, or the rules and regulations of the
Securities and Exchange Commission thereunder.
Yours very truly,
REINHART, BOERNER, VAN DEUREN,
NORRIS & RIESELBACH, s.c.
BY /s/ John L. Schliesmann
John L. Schliesmann
<PAGE> 1
EXHIBIT 23(A)
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors
Associated Banc-Corp:
We consent to the use of our report incorporated herein by reference and to the
reference to our firm under the "Experts" heading in the registration
statement.
/s/ KPMG Peat Marwick LLP
Chicago, Illinois
January 17, 1997
<PAGE> 1
EXHIBIT 24
DIRECTOR'S POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Associated Banc-Corp, a Wisconsin corporation (the "Corporation"), hereby
constitutes and appoints Brian R. Bodager his true and lawful attorney-in-fact
and agent to sign on his behalf a registration statement on Form S-4 in
connection with the issuance of shares of common stock to shareholders of
Centra Financial, Inc.
Said attorney-in-fact and agent shall have full power to act for him and
in his name, place, and stead in any and all capacities, to sign such Form S-4
Registration Statement and any and all amendments thereto (including
post-effective amendments), with power where appropriate to affix the corporate
seal of the Corporation thereto and to attest such seal, and to file such Form
S-4 and each amendment (including post-effective amendments) so signed, with
all exhibits thereto, and any and all documents in connection therewith, with
the SEC, and to appear before the SEC in connection with any matter relating to
such Form S-4 and to any and all amendments thereto (including post-effective
amendments).
The undersigned hereby grants such attorney-in-fact and agent full power
and authority to do and perform any and all acts and things requisite and
necessary to be done as he might or could do in person, and hereby ratifies and
confirms all that such attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of the 24th day of April, 1996.
/s/ H. B. Conlon
------------------------------
H. B. Conlon
Director
<PAGE> 2
EXHIBIT 24
DIRECTOR'S POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Associated Banc-Corp, a Wisconsin corporation (the "Corporation"), hereby
constitutes and appoints Brian R. Bodager his true and lawful attorney-in-fact
and agent to sign on his behalf a registration statement on Form S-4 in
connection with the issuance of shares of common stock to shareholders of
Centra Financial, Inc.
Said attorney-in-fact and agent shall have full power to act for him and
in his name, place, and stead in any and all capacities, to sign such Form S-4
Registration Statement and any and all amendments thereto (including
post-effective amendments), with power where appropriate to affix the corporate
seal of the Corporation thereto and to attest such seal, and to file such Form
S-4 and each amendment (including post-effective amendments) so signed, with
all exhibits thereto, and any and all documents in connection therewith, with
the SEC, and to appear before the SEC in connection with any matter relating to
such Form S-4 and to any and all amendments thereto (including post-effective
amendments).
The undersigned hereby grants such attorney-in-fact and agent full power
and authority to do and perform any and all acts and things requisite and
necessary to be done as he might or could do in person, and hereby ratifies and
confirms all that such attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of the 24th day of April, 1996.
/s/ Robert Feitler
-----------------------------
Robert Feitler
Director
<PAGE> 3
EXHIBIT 24
DIRECTOR'S POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Associated Banc-Corp, a Wisconsin corporation (the "Corporation"), hereby
constitutes and appoints Brian R. Bodager his true and lawful attorney-in-fact
and agent to sign on his behalf a registration statement on Form S-4 in
connection with the issuance of shares of common stock to shareholders of
Centra Financial, Inc.
Said attorney-in-fact and agent shall have full power to act for him and
in his name, place, and stead in any and all capacities, to sign such Form S-4
Registration Statement and any and all amendments thereto (including
post-effective amendments), with power where appropriate to affix the corporate
seal of the Corporation thereto and to attest such seal, and to file such Form
S-4 and each amendment (including post-effective amendments) so signed, with
all exhibits thereto, and any and all documents in connection therewith, with
the SEC, and to appear before the SEC in connection with any matter relating to
such Form S-4 and to any and all amendments thereto (including post-effective
amendments).
The undersigned hereby grants such attorney-in-fact and agent full power
and authority to do and perform any and all acts and things requisite and
necessary to be done as he might or could do in person, and hereby ratifies and
confirms all that such attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of the 24th day of April, 1996.
/s/ Robert C. Gallagher
---------------------------------
Robert C. Gallagher
Director
<PAGE> 4
EXHIBIT 24
DIRECTOR'S POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Associated Banc-Corp, a Wisconsin corporation (the "Corporation"), hereby
constitutes and appoints Brian R. Bodager his true and lawful attorney-in-fact
and agent to sign on his behalf a registration statement on Form S-4 in
connection with the issuance of shares of common stock to shareholders of
Centra Financial, Inc.
Said attorney-in-fact and agent shall have full power to act for him and
in his name, place, and stead in any and all capacities, to sign such Form S-4
Registration Statement and any and all amendments thereto (including
post-effective amendments), with power where appropriate to affix the corporate
seal of the Corporation thereto and to attest such seal, and to file such Form
S-4 and each amendment (including post-effective amendments) so signed, with
all exhibits thereto, and any and all documents in connection therewith, with
the SEC, and to appear before the SEC in connection with any matter relating to
such Form S-4 and to any and all amendments thereto (including post-effective
amendments).
The undersigned hereby grants such attorney-in-fact and agent full power
and authority to do and perform any and all acts and things requisite and
necessary to be done as he might or could do in person, and hereby ratifies and
confirms all that such attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of the 24th day of April, 1996.
/s/ Ronald R. Harder
-------------------------------
Ronald R. Harder
Director
<PAGE> 5
EXHIBIT 24
DIRECTOR'S POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Associated Banc-Corp, a Wisconsin corporation (the "Corporation"), hereby
constitutes and appoints Brian R. Bodager his true and lawful attorney-in-fact
and agent to sign on his behalf a registration statement on Form S-4 in
connection with the issuance of shares of common stock to shareholders of
Centra Financial, Inc.
Said attorney-in-fact and agent shall have full power to act for him and
in his name, place, and stead in any and all capacities, to sign such Form S-4
Registration Statement and any and all amendments thereto (including
post-effective amendments), with power where appropriate to affix the corporate
seal of the Corporation thereto and to attest such seal, and to file such Form
S-4 and each amendment (including post-effective amendments) so signed, with
all exhibits thereto, and any and all documents in connection therewith, with
the SEC, and to appear before the SEC in connection with any matter relating to
such Form S-4 and to any and all amendments thereto (including post-effective
amendments).
The undersigned hereby grants such attorney-in-fact and agent full power
and authority to do and perform any and all acts and things requisite and
necessary to be done as he might or could do in person, and hereby ratifies and
confirms all that such attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of the 24th day of April, 1996.
/s/ John S. Holbrook, Jr.
---------------------------------
John S. Holbrook, Jr.
Director
<PAGE> 6
EXHIBIT 24
DIRECTOR'S POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Associated Banc-Corp, a Wisconsin corporation (the "Corporation"), hereby
constitutes and appoints Brian R. Bodager his true and lawful attorney-in-fact
and agent to sign on his behalf a registration statement on Form S-4 in
connection with the issuance of shares of common stock to shareholders of
Centra Financial, Inc.
Said attorney-in-fact and agent shall have full power to act for him and
in his name, place, and stead in any and all capacities, to sign such Form S-4
Registration Statement and any and all amendments thereto (including
post-effective amendments), with power where appropriate to affix the corporate
seal of the Corporation thereto and to attest such seal, and to file such Form
S-4 and each amendment (including post-effective amendments) so signed, with
all exhibits thereto, and any and all documents in connection therewith, with
the SEC, and to appear before the SEC in connection with any matter relating to
such Form S-4 and to any and all amendments thereto (including post-effective
amendments).
The undersigned hereby grants such attorney-in-fact and agent full power
and authority to do and perform any and all acts and things requisite and
necessary to be done as he might or could do in person, and hereby ratifies and
confirms all that such attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of the 24th day of April, 1996.
/s/ William R. Hutchinson
---------------------------------
William R. Hutchinson
Director
<PAGE> 7
EXHIBIT 24
DIRECTOR'S POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Associated Banc-Corp, a Wisconsin corporation (the "Corporation"), hereby
constitutes and appoints Brian R. Bodager his true and lawful attorney-in-fact
and agent to sign on his behalf a registration statement on Form S-4 in
connection with the issuance of shares of common stock to shareholders of
Centra Financial, Inc.
Said attorney-in-fact and agent shall have full power to act for him and
in his name, place, and stead in any and all capacities, to sign such Form S-4
Registration Statement and any and all amendments thereto (including
post-effective amendments), with power where appropriate to affix the corporate
seal of the Corporation thereto and to attest such seal, and to file such Form
S-4 and each amendment (including post-effective amendments) so signed, with
all exhibits thereto, and any and all documents in connection therewith, with
the SEC, and to appear before the SEC in connection with any matter relating to
such Form S-4 and to any and all amendments thereto (including post-effective
amendments).
The undersigned hereby grants such attorney-in-fact and agent full power
and authority to do and perform any and all acts and things requisite and
necessary to be done as he might or could do in person, and hereby ratifies and
confirms all that such attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of the 24th day of April, 1996.
/s/ James F. Janz
----------------------------
James F. Janz
Director
<PAGE> 8
EXHIBIT 24
DIRECTOR'S POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Associated Banc-Corp, a Wisconsin corporation (the "Corporation"), hereby
constitutes and appoints Brian R. Bodager his true and lawful attorney-in-fact
and agent to sign on his behalf a registration statement on Form S-4 in
connection with the issuance of shares of common stock to shareholders of
Centra Financial, Inc.
Said attorney-in-fact and agent shall have full power to act for him and
in his name, place, and stead in any and all capacities, to sign such Form S-4
Registration Statement and any and all amendments thereto (including
post-effective amendments), with power where appropriate to affix the corporate
seal of the Corporation thereto and to attest such seal, and to file such Form
S-4 and each amendment (including post-effective amendments) so signed, with
all exhibits thereto, and any and all documents in connection therewith, with
the SEC, and to appear before the SEC in connection with any matter relating to
such Form S-4 and to any and all amendments thereto (including post-effective
amendments).
The undersigned hereby grants such attorney-in-fact and agent full power
and authority to do and perform any and all acts and things requisite and
necessary to be done as he might or could do in person, and hereby ratifies and
confirms all that such attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of the 24th day of April, 1996.
/s/ John C. Meng
----------------------------
John C. Meng
Director
<PAGE> 9
EXHIBIT 24
DIRECTOR'S POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that the undersigned director of
Associated Banc-Corp, a Wisconsin corporation (the "Corporation"), hereby
constitutes and appoints Brian R. Bodager his true and lawful attorney-in-fact
and agent to sign on his behalf a registration statement on Form S-4 in
connection with the issuance of shares of common stock to shareholders of
Centra Financial, Inc.
Said attorney-in-fact and agent shall have full power to act for him and
in his name, place, and stead in any and all capacities, to sign such Form S-4
Registration Statement and any and all amendments thereto (including
post-effective amendments), with power where appropriate to affix the corporate
seal of the Corporation thereto and to attest such seal, and to file such Form
S-4 and each amendment (including post-effective amendments) so signed, with
all exhibits thereto, and any and all documents in connection therewith, with
the SEC, and to appear before the SEC in connection with any matter relating to
such Form S-4 and to any and all amendments thereto (including post-effective
amendments).
The undersigned hereby grants such attorney-in-fact and agent full power
and authority to do and perform any and all acts and things requisite and
necessary to be done as he might or could do in person, and hereby ratifies and
confirms all that such attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney as
of the 24th day of April, 1996.
/s/ J. Douglas Quick
-------------------------------
J. Douglas Quick
Director
