SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported)
February 1, 2000
PERMANENT BANCORP, INC.
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(Exact name of Registrant as specified in its Charter)
Delaware 0-23370 35-1908797
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(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
101 Southeast Third Street, Evansville, Indiana 47708
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (708) 687-9400
N/A
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(Former name or former address, if changed since last report)
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Item 5. Other Events
On December 20, 1999, Old National Bancorp ("Old National") and
Permanent Bancorp, Inc. ("Permanent") entered into an Agreement of Affiliation
and Merger (the "Agreement") dated as of December 20, 1999, by and among Old
National Bancorp, Permanent Bancorp, Inc., Merger Corporation, Old National Bank
and Permanaent Bank.
The agreement calls for a fixed price with the exchange ratio to be
based on the price of Old National stock at the time of closing, subject to
adjustment. Old National intends to purchase the shares to be isued in the
transaction in the open market prior to closing and to account for the
transaction as a purchase. The transaction, subject to regulatory agency
approval and the approval of permanent shareholders is expected to be completed
by the third quarter of 2000. Upon completion of merger, preliminary plans are
to combine Permanent's offices into Old National's.
The Merger Agreement and the press release providing further details on
the exchange ratio issued on February 1, 2000 are attached as exhibits to this
report and are incorporated herein by reference. The foregoing summary of the
Merger Agreement does not purport to be complete and is qualified in its
entirety by reference to such agreement.
Item 7. Financial Statements and Exhibits
(c) EXHIBITS:
2 Agreement of Affiliation and Merger, dated as of December 20,
1999, by and among Old National Bancorp, Permanent Bancorp,
Inc., Merger Corporation, Old National Bank and Permanent
Bank.
20 Press Release issued February 1, 2000.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
PERMANENT BANCORP, INC.
Date: February 2, 2000 By: /s/ Donald P. Weinzapfel
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Donald P. Weinzapfel
Chairman of the Board and
Chief Executive Officer (Principal
Financial and Accounting Officer)
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EXHIBIT INDEX
Exhibit
Number Description
2 Agreement of Affiliation and Merger dated as of December 20, 1999.
20 Press Release issued February 1, 2000.
Exhibit 99.1
AGREEMENT OF AFFILIATION AND MERGER
THIS AGREEMENT OF AFFILIATION AND MERGER ("Agreement") is made and
entered into effective as of the 20th day of December, 1999, by and among OLD
NATIONAL BANCORP ("ONB"), PERMANENT BANCORP, INC. ("Permanent"), MERGER
CORPORATION I ("Merger Corporation"), OLD NATIONAL BANK, and PERMANENT BANK (the
"Bank").
W I T N E S S E T H:
WHEREAS, ONB is an Indiana corporation registered as a bank holding
company under the federal Bank Holding Company Act of 1956, as amended ("BHC
Act"), with its principal office located in Evansville, Vanderburgh County,
Indiana; and
WHEREAS, Old National Bank, a wholly-owned subsidiary of ONB, is a
national banking association with its principal office in Lawrenceville,
Illinois; and
WHEREAS, Permanent is a Delaware corporation registered as an unitary
savings and loan holding company under the Savings and Loan Holding Company Act,
as amended, with its principal office located in Evansville, Vanderburgh County,
Indiana; and
WHEREAS, Permanent is the sole owner, directly or indirectly, of all of
the outstanding capital stock of (i) the Bank, a federal savings bank, located
in Evansville, Vanderburgh County, Indiana, (ii) Perma Service Corp. ("Perma
Service"), a service corporation, (iii) Permanent Insurance Agency, Inc.
("Permanent Insurance"), an insurance agency and (iv) Permavest, Inc.
("Permavest") (collectively, the "Subsidiaries"); and
WHEREAS, ONB and Permanent seek to affiliate through a corporate
reorganization whereby the Bank will first merge into Old National Bank, and
Permanent will merge immediately thereafter into Merger Corporation, an Indiana
corporation and wholly-owned subsidiary of ONB, and the Bank will thereby become
a wholly-owned subsidiary of ONB; and
WHEREAS, ONB, Permanent, Merger Corporation, Old National Bank and the
Bank intend for the mergers to qualify as reorganizations within the meaning of
Section 368(a)(2)(D) and related sections of the Internal Revenue Code of 1986,
as amended ("Code"), and agree to cooperate and to take such actions as may be
reasonably necessary to assure such result; and
WHEREAS, the Board of Directors of each of the parties hereto has
determined that it is in the best interests of its respective corporations or
entities to consummate the strategic business combination provided for herein
and has approved this Agreement, authorized its execution and designated this
Agreement a plan of reorganization and a plan of mergers.
NOW, THEREFORE, in consideration of the foregoing premises, the
representations, warranties, covenants and agreements herein contained and other
good and valuable consideration,
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the sufficiency of which is hereby acknowledged, ONB, Permanent, Merger
Corporation, Old National Bank and the Bank hereby make this Agreement and
prescribe the terms and conditions of the affiliation of ONB and Permanent and
Old National Bank and the Bank and the mode of carrying such mergers into effect
as follows:
SECTION 1
THE MERGERS
1.01. The Bank Merger.
(a) General Description. Upon the terms and subject to the conditions
of this Agreement, at the Effective Time (as defined in Section 10 hereof),
immediately prior to the Company Merger (as hereinafter defined), the Bank shall
be merged with and under the Articles of Association of Old National Bank ("Bank
Merger"). The Bank Merger is subject to the Company Merger occurring immediately
after the Bank Merger, and if the Company Merger will not close immediately
thereafter, the Bank Merger shall not occur. Old National Bank shall survive the
Bank Merger ("Surviving Bank") and shall continue its corporate existence under
the federal banking laws pursuant to the provisions of and with the effect
provided in the National Bank Act, as amended.
(b) Name, Offices and Management. The name of the Surviving Bank shall
be "Old National Bank." Its principal office shall be located at 420 Main
Street, Evansville, Indiana 47708. The Board of Directors of the Surviving Bank,
until such time as their successors have been elected and have qualified, shall
consist of the Board of Directors of Old National Bank serving at the Effective
Time (as hereinafter defined). At the Effective Time, Donald P. Weinzapfel and
Jack H. Kinkel shall become directors of the Old National Bank Evansville
Community Bank Board, until such time as their successors shall have been duly
elected and have qualified or until their earlier resignation, death or removal
from office. The officers of Old National Bank serving at the Effective Time
shall continue to serve as the officers of the Surviving Bank, until such time
as their successors shall have been duly elected and have qualified or until
their earlier resignation, death or removal from office. As of and following the
Effective Time, the main bank office and all branch offices of the Bank shall
become branch offices of Old National Bank.
(c) Capital Structure. At the Effective Time, the capital of the
Surviving Bank shall be not less than the capital of Old National Bank
immediately prior to the Effective Time. At the Effective Time, all outstanding
shares of common stock of the Bank shall be canceled.
(d) Articles of Association and By-Laws. The Articles of Association
and By-Laws of Old National Bank in existence at the Effective Time shall remain
the Articles of Association and By-Laws of the Surviving Bank, until such
Articles of Association and By-Laws shall be further amended as provided by
applicable law.
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(e) Effect of Bank Merger. The effect of the Bank Merger upon
consummation thereof shall be as set forth under the National Bank Act, as
amended.
1.02. The Company Merger.
(a) General Description. Upon the terms and subject to the conditions
of this Agreement, immediately following the Bank Merger, Permanent shall be
merged with and under the Articles of Incorporation of Merger Corporation
("Company Merger") (the Bank Merger and the Company Merger are hereinafter
collectively referred to as the "Mergers"). Merger Corporation shall survive the
Company Merger ("Surviving Corporation") and shall continue its corporate
existence under the laws of the State of Indiana pursuant to the provisions of
and with the effect provided in the Indiana Business Corporation Law, as
amended.
(b) Name, Offices and Management. The name of the Surviving Corporation
shall be "Merger Corporation I". Its principal office shall be located at 420
Main Street, Evansville, Indiana 47708. The Board of Directors of the Surviving
Corporation, until such time as their successors have been elected and have
qualified or until their earlier resignation, death or removal from office,
shall consist of the Board of Directors of Merger Corporation serving at the
Effective Time. The officers of Merger Corporation serving at the Effective Time
shall be the officers of the Surviving Corporation until such time as their
successors shall have been duly elected and have qualified or until their
earlier resignation, death or removal from office.
(c) Capital Structure. At the Effective Time, the capital of the
Surviving Corporation shall be not less than the capital of Merger Corporation
immediately prior to the Effective Time.
(d) Articles of Incorporation and By-Laws. The Articles of
Incorporation and By-Laws of Merger Corporation in existence at the Effective
Time shall remain the Articles of Incorporation and By-Laws of the Surviving
Corporation following the Effective Time, until such Articles of Incorporation
and By-Laws shall be further amended as provided by applicable law.
(e) Effect of Company Merger. The effect of the Company Merger upon
consummation thereof shall be as set forth in Indiana Code Section 23-1-40-6, as
amended.
1.03. Tax Free Reorganization. ONB, Permanent, Merger Corporation, Old
National Bank and the Bank intend for the Mergers to qualify as a reorganization
within the meaning of Section 368(a) and related sections of the Code, and agree
to cooperate and to take such actions as may be reasonably necessary to assure
such result.
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SECTION 2
MANNER AND BASIS OF EXCHANGE OF STOCK
2.01. Exchange Ratio. (a) Upon and by virtue of the Company Merger
becoming effective at the Effective Time, each issued and outstanding share of
Permanent Common Stock (as defined in Section 4.03 hereof) shall be converted
into the right to receive such number of shares of ONB common stock as provided
by Section 2.01(b), 2.01(c) or 2.01(d) hereof (the "Exchange Ratio"), subject to
Section 9.01(c)(v) hereof.
(b) Subject to Section 2.01(c), the Exchange Ratio shall equal
(calculated to the nearest one-ten thousandth): (i) the quotient arrived at by
dividing (A) the quotient arrived at by dividing (X) the sum of $92,000,000 plus
the aggregate exercise price for Permanent Common Stock otherwise purchasable
pursuant to all Stock Options of holders exercising their right to exchange
their Stock Options for cash or shares of ONB common stock pursuant to Section
7.04(a) hereof (such aggregate exercise price hereinafter referred to as
"Aggregate Strike Price") by (Y) the Total Outstanding Shares (as defined in
Section 4.03(a)) by (B) the Average Price Per Share of ONB common stock, if the
Average Price Per Share of ONB common stock is greater than or equal to $28.00
but less than or equal to $36.00; (ii) the quotient arrived at by dividing (A)
the quotient arrived at by dividing (X) the sum of $92,000,000 plus the
Aggregate Strike Price by (Y) $28.00 by (B) the Total Outstanding Shares, if the
Average Price Per Share of ONB common stock is less than $28.00; or (iii) the
quotient arrived at by dividing (A) the quotient arrived at by dividing (X) the
sum of $92,000,000 plus the Aggregate Strike Price by (Y) $36.00 by (B) the
Total Outstanding Shares, if the Average Price Per Share of ONB common stock is
greater than $36.00.
(c) Subject to Section 2.01(d), if the Average Price Per Share of ONB
common stock is greater than $38.00, then ONB may request in writing to
Permanent a renegotiation of the Exchange Ratio. ONB and Permanent shall then
attempt in good faith to renegotiate the Exchange Ratio to their mutual
satisfaction. In the event ONB and Permanent are unable to renegotiate the
Exchange Ratio by the earlier of (A) ten (10) days of the date of such written
notice or (B) September 30, 2000, either ONB or Permanent may terminate this
Agreement in accordance with Section 9.01(a)(iii) hereof.
(d) Notwithstanding anything herein to the contrary, if between the
date of this Agreement and the Effective Time, ONB enters into an agreement with
another corporation, partnership, person or other entity pursuant to which
current shareholders of ONB common stock will exchange their ONB common stock
for stock of another entity, and the Average Price Per Share of ONB common stock
is greater than $38.00, the Exchange Ratio (calculated to the nearest one
ten-thousandth) shall equal the quotient arrived at by dividing (A) the quotient
arrived at by dividing (X) the sum of $92,000,000 plus the Aggregate Strike
Price by (Y) $36.00 by (B) the Total Outstanding Shares.
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2.02. No Fractional Shares. Certificates for fractional shares of ONB
common stock shall not be issued for fractional interests resulting from
application of the Exchange Ratio. Each stockholder of Permanent who would
otherwise have been entitled to a fraction of a share of ONB common stock shall
be paid in cash following the Effective Time an amount equal to such fraction
multiplied by the average of the per share closing price of ONB common stock as
reported on the Nasdaq National Market System for the final ten (10) business
days on which shares of ONB common stock were traded immediately preceding the
Effective Time ("Average Price Per Share").
2.03. Recapitalization. If, between the date of this Agreement and the
Effective Time, the record date occurs for the distribution or issuance by ONB
of a stock dividend with respect to its shares of common stock, or a
combination, subdivision, reclassification or split of ONB's issued and
outstanding shares of common stock (a "Recapitalization"), such that the number
of issued and outstanding shares of ONB common stock is increased or decreased,
then all references to the Average Price Per Share of ONB common stock in
Sections 2.01 and 9.01(c)(v) hereof shall also be adjusted to give effect to the
Recapitalization. All references to the Average Price Per Share of ONB common
stock shall be adjusted by multiplying each Average Price Per Share of ONB
common stock by a fraction, the numerator of which shall be equal to the number
of shares of ONB common stock outstanding immediately prior to the
Recapitalization and the denominator of which shall be equal to the number of
shares of ONB common stock outstanding immediately after the Recapitalization.
2.04. Distribution of ONB Common Stock and Cash. (a) Immediately
following the Effective Time, ONB shall mail to each Permanent stockholder a
letter of transmittal providing instructions as to the transmittal to ONB of
certificates representing shares of Permanent Common Stock and the issuance of
shares of ONB common stock in exchange therefor pursuant to the terms of this
Agreement.
(b) Following the Effective Time, distribution of stock certificates
representing shares of ONB common stock and any cash payment, without interest,
for fractional shares, if any, shall be made by ONB to each former stockholder
of Permanent as soon as practical following delivery to ONB of the stockholder's
certificate(s) representing its shares of Permanent Common Stock accompanied by
a properly completed and executed letter of transmittal, all in form and
substance reasonably satisfactory to ONB.
(c) As of the Effective Time, stock certificates representing shares of
Permanent Common Stock shall be deemed to evidence ownership of ONB common stock
for all corporate purposes other than the payment of dividends or other
distributions. No dividends or other distributions otherwise payable subsequent
to the Effective Time on shares of ONB common stock shall be paid to any
Permanent stockholder entitled to receive the same until such stockholder has
surrendered to ONB his or her certificate or certificates representing Permanent
Common Stock in exchange for a certificate or certificates representing ONB
common stock. Upon surrender of the certificates representing shares of
Permanent Common Stock, there shall be paid in cash to the record holder of the
new certificate or certificates evidencing shares of ONB common stock the amount
of
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all dividends and other distributions, without interest thereon, withheld with
respect to such shares of ONB common stock.
(d) ONB shall be entitled to rely upon the stock transfer books of
Permanent to establish the persons entitled to receive shares of ONB common
stock pursuant to this Agreement, which books shall be conclusive with respect
to the ownership of shares of Permanent Common Stock.
(e) With respect to any certificate for shares of Permanent Common
Stock which has been lost, stolen or destroyed, ONB shall be authorized to issue
common stock (and to pay cash as to fractional shares) to the registered owner
of such certificate upon receipt by ONB of an agreement to indemnify ONB against
loss from such lost, stolen or destroyed certificate and an affidavit of lost,
stolen or destroyed stock certificate, both in form and substance reasonably
satisfactory to ONB, and upon compliance by the Permanent stockholder with all
other reasonable requirements of ONB in connection with lost, stolen or
destroyed stock certificates.
SECTION 3
DISSENTING STOCKHOLDERS
Stockholders of Permanent are not entitled to any dissenters' rights
under Section 262 of the Delaware General Corporation Law, as amended, since
Permanent Common Stock is quoted and traded on Nasdaq. Permanent shall take no
action which would result in the loss of such listing prior to the Effective
Time.
SECTION 4
REPRESENTATIONS AND WARRANTIES OF PERMANENT
On or prior to the date hereof, Permanent has delivered to ONB a
schedule (the "Disclosure Schedule") setting forth, among other things, items
the disclosure of which is necessary or appropriate either in response to an
express disclosure requirement contained in a provision hereof or as an
exception to one or more representations or warranties contained in this Section
4 or to one or more of its covenants contained in Section 6; provided, that the
mere inclusion of an item in the Disclosure Schedule as an exception to a
representation or warranty shall not be deemed an admission by Permanent that
such item represents a material exception or fact, event or circumstance or that
such item is reasonably likely to result in a Material Adverse Effect (as
defined below).
For the purpose of this Agreement, and in relation to Permanent and the
Subsidiaries, a "Material Adverse Effect" means any effect that (i) is material
and adverse to the financial position, results of operations or business of
Permanent and the Subsidiaries taken as a whole, or (ii) would materially impair
the ability of Permanent to perform its obligations under this Agreement or
otherwise materially threaten or materially impede the consummation of the
Mergers and the other
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transactions contemplated by this Agreement; provided, however, that Material
Adverse Effect shall not be deemed to include the impact of (a) changes in
banking and similar laws of general applicability or interpretations thereof by
courts or governmental authorities, (b) changes in generally accepted accounting
principles or regulatory accounting requirements applicable to banks and their
holding companies generally, (c) any modifications or changes to valuation
policies and practices in connection with the Mergers or restructuring charges
taken in connection with the Mergers, in each case in accordance with generally
accepted accounting principles, (d) effects of any action taken with the prior
written consent of ONB and (e) changes in general level of interest rate or
conditions or circumstances that affect the banking industry generally.
No representation or warranty of Permanent contained in this Section 4,
except Section 4.03, shall be deemed untrue, incomplete or incorrect, and
Permanent shall not be deemed to have breached a representation or warranty, as
a consequence of the existence of any fact, event or circumstance unless such
fact, circumstance or event, individually or taken together with all other
facts, events or circumstances inconsistent with any representation or warranty
contained in this Section 4, has had or is reasonably likely to have a Material
Adverse Effect on Permanent.
Permanent and the Bank accordingly hereby represent and warrant to ONB
as follows:
4.01. Organization and Authority. (a) Permanent is a corporation duly
organized and validly existing under the laws of the State of Delaware.
Permanent has full power and authority (corporate and otherwise) to own and
lease its properties as presently owned and leased and to conduct its business
in the manner and by the means utilized as of the date hereof. Permanent has a
class of stock registered pursuant to Section 12, and is subject to the
reporting requirements, of the Securities Exchange Act of 1934, as amended
("1934 Act"). Except as set forth in the Disclosure Schedule, Permanent's only
direct subsidiary is the Bank and Permanent has no other direct subsidiaries and
owns no voting stock or equity securities of any corporation, partnership,
association or other entity.
(b) The Bank is a federal savings bank duly organized and validly
existing under the federal banking laws of the United States of America. The
Bank has no direct subsidiaries, except for Perma Service and Permavest. The
Bank is subject to primary regulatory supervision and examination by the Office
of Thrift Supervision (the "OTS") and the Federal Deposit Insurance Corporation
(the "FDIC"). The Bank has full power and authority (corporate and otherwise) to
own and lease its properties as presently owned and leased and to conduct its
business in the manner and by the means utilized as of the date hereof.
(c) Perma Service is a service corporation duly organized and validly
existing under the laws of the State of Indiana. Perma Service owns
approximately 14.28% of Family Financial Life Insurance Company, which
underwrites various types of life and disability insurance and annuity programs.
Perma Service has one wholly-owned subsidiary, Permanent Insurance which offers,
on an agency basis, casualty, life, accident, health, mortgage, disability and
consumer credit insurance. Except for Family Financial Life Insurance Company
and Permanent Insurance, Perma Service has
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no other subsidiaries. Perma Service is subject to primary regulatory
supervision and examination by the Office of Thrift Supervision. Perma Service
has full power and authority (corporate and otherwise) to own and lease its
properties as presently owned and leased and to conduct its business in the
manner and by the means utilized as of the date hereof.
(d) Permanent Insurance is an insurance agency duly organized and
validly existing under the laws of the State of Indiana. Permanent Insurance has
no subsidiaries. Permanent Insurance has full power and authority (corporate and
otherwise) to own and lease its properties as presently owned and leased and to
conduct its business in the manner and by the means utilized as of the date
hereof.
(e) Permavest is a corporation duly organized and validly existing
under the laws of the State of Delaware. Permavest owns 99.5% of Permavest, a
Nevada partnership. The remaining .5% of Permavest is owned by Permanent. Except
for Permavest, a Nevada partnership, Permavest owns no subsidiaries. Permavest
is subject to primary regulatory supervision and examination by the OTS.
Permavest, Inc. has full power and authority (corporate and otherwise) to own
and lease its properties as presently owned and leased and to conduct its
business in the manner and by the means utilized as of the date hereof.
4.02. Authorization. (a) Each of Permanent and the Bank has the
requisite corporate power and authority to enter into this Agreement and to
perform its obligations hereunder, subject to the fulfillment of the conditions
precedent set forth in Section 8.02(e), (f) and (g) hereof. As of the date
hereof, neither Permanent nor the Bank is aware of any reason why the approvals
set forth in Section 8.02(e) will not be received in a timely manner and without
the imposition of a condition, restriction or requirement of the type described
in Section 8.02(e). This Agreement and its execution and delivery by Permanent
and the Bank have been duly authorized and approved by the Board of Directors of
Permanent and the Bank, respectively, and, assuming due execution and delivery
by ONB and Old National Bank, constitutes a valid and binding obligation of
Permanent and the Bank, subject to the fulfillment of the conditions precedent
set forth in Section 8.02 hereof, and is enforceable in accordance with its
terms, except to the extent limited by general principles of equity and public
policy and by bankruptcy, insolvency, fraudulent transfer, reorganization,
liquidation, moratorium, readjustment of debt or other laws of general
application relating to or affecting the enforcement of creditors' rights.
(b) Except as set forth in the Disclosure Schedule, neither the
execution of this Agreement nor consummation of the Mergers contemplated hereby:
(i) conflicts with or violates Permanent's Certificate of Incorporation or
By-Laws or the Bank's Charter or By-Laws; (ii) conflicts with or violates any
local, state, federal or foreign law, statute, ordinance, rule or regulation
(provided that the approvals of or filings with applicable government regulatory
agencies or authorities required for consummation of the Mergers are obtained)
or any court or administrative judgment, order, injunction, writ or decree;
(iii) conflicts with, results in a breach of or constitutes a default under any
note, bond, indenture, mortgage, deed of trust, license, lease, contract,
agreement, arrangement, commitment or other instrument to which Permanent or any
Subsidiary is a party or by which Permanent or any Subsidiary is subject or
bound; (iv) results in the creation of or gives any
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person, corporation or entity the right to create any lien, charge, claim,
encumbrance or security interest, or results in the creation of any other rights
or claims of any other party (other than ONB or Old National Bank) or any other
adverse interest, upon any right, property or asset of Permanent or any
Subsidiary; or (v) terminates or gives any person, corporation or entity the
right to terminate, accelerate, amend, modify or refuse to perform under any
note, bond, indenture, mortgage, agreement, contract, lease, license,
arrangement, deed of trust, commitment or other instrument to which Permanent or
any Subsidiary is bound or with respect to which Permanent or any Subsidiary is
to perform any duties or obligations or receive any rights or benefits.
(c) Other than in connection or in compliance with the provisions of
the applicable federal and state banking, securities, and corporation statutes,
all as amended, and the rules and regulations promulgated thereunder, no notice
to, filing with, exemption by or consent, authorization or approval of any
governmental agency or body is necessary for consummation of the Mergers by
Permanent or the Bank.
4.03. Capitalization. (a) The authorized capital stock of Permanent as
of the date hereof consists, and at the Effective Time will consist, of
1,000,000 shares of preferred stock, $0.01 par value, none of which shares are
issued or outstanding and 9,000,000 shares of common stock, $0.01 par value per
share, of which 4,103,095 shares are issued and outstanding as of the date
hereof, which number of shares of Permanent common stock is subject to increase
to a total of 4,467,239 shares (such number referred to herein as the "Total
Outstanding Shares") pursuant to the exercise of options (collectively, the
"Stock Options") granted under the 1999 Omnibus Incentive Plan and the 1993
Stock Option and Incentive Plan (collectively, the "Stock Option Plans") to
purchase an aggregate of 364,144 shares of common stock of Permanent (all of
such shares of common stock are referred to herein as "Permanent Common Stock").
Such issued and outstanding shares of Permanent Common Stock have been duly and
validly authorized by all necessary corporate action of Permanent, are validly
issued, fully paid and nonassessable and have not been issued in violation of
any pre-emptive rights of any present or former Permanent stockholder. Permanent
has no capital stock authorized, issued or outstanding other than as described
in this Section 4.03(a) and has no intention or obligation to authorize or issue
any other capital stock or any additional shares of Permanent Common Stock.
(b) The authorized capital stock of the Bank as of the date hereof
consists, and at the Effective Time will consist, of 1,000,000 shares of
preferred stock, none of which shares are issued or outstanding and of 9,000,000
shares of common stock, $0.01 par value per share, 2,380,500 of which shares are
issued and outstanding (such issued and outstanding shares are referred to
herein as "Bank Common Stock"). Such issued and outstanding shares of Bank
Common Stock have been duly and validly authorized by all necessary corporate
action of the Bank, are validly issued, fully paid and nonassessable, and have
not been issued in violation of any pre-emptive rights of any present or former
Bank shareholder. The Bank Common Stock is, and at the Effective Time will be,
the only class of capital stock of the Bank outstanding. Except as set forth in
the Disclosure Schedule, all of the issued and outstanding shares of the Bank
Common Stock are owned by Permanent free and clear of all liens, pledges,
charges, claims, encumbrances, restrictions, security
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interests, options and pre-emptive rights and of all other rights or claims of
any other person, corporation or entity with respect thereto. The Bank has no
capital stock authorized, issued or outstanding other than as described in this
Section 4.03(b) and has no intention or obligation to authorize or issue any
other capital stock or any additional shares of Bank Common Stock.
(c) All of the issued and outstanding shares of Perma Service's common
stock ("Perma Service Common Stock") have been duly and validly authorized by
all necessary corporate action of Perma Service, are validly issued, fully paid
and nonassessable, and have not been issued in violation of any pre-emptive
rights of any present or former Perma Service shareholder. The Perma Service
Common Stock is and at the Effective Time will be the only class of capital
stock of Perma Service outstanding. All of the issued and outstanding shares of
Perma Service Common Stock are owned by the Bank free and clear of all liens,
pledges, charges, claims, encumbrances, restrictions, security interests,
options and pre-emptive rights and of all other rights or claims of any other
person, corporation or entity with respect thereto. Perma Service has no capital
stock authorized, issued or outstanding other than as described in this Section
4.03(c) and has no intention or obligation to authorize or issue any other
capital stock or any additional shares of Perma Service Common Stock.
(d) All of the issued and outstanding shares of Permanent Insurance's
common stock ("Permanent Insurance Common Stock") have been duly and validly
authorized by all necessary corporate action of Permanent Insurance, are validly
issued, fully paid and nonassessable, and have not been issued in violation of
any pre-emptive rights of any present or former Permanent Insurance shareholder.
The Permanent Insurance Common Stock is, and at the Effective Time will be, the
only class of capital stock of Permanent Insurance outstanding. All of the
issued and outstanding shares of Permanent Insurance Common Stock are owned by
Perma Service free and clear of all liens, pledges, charges, claims,
encumbrances, restrictions, security interests, options and pre-emptive rights
and of all other rights or claims of any other person, corporation or entity
with respect thereto. Permanent Insurance has no capital stock authorized,
issued or outstanding other than as described in this Section 4.03(d) and has no
intention or obligation to authorize or issue any other capital stock or any
additional shares of Permanent Insurance Common Stock.
(e) All of the issued and outstanding shares of Permavest's common
stock (Permavest Common Stock") have been duly and validly authorized by all
necessary corporate action of Permavest, are validly issued, fully paid and
nonassessable, and have not been issued in violation of any pre-emptive rights
of any present or former Permavest shareholder. The Permavest Common Stock is,
and at the Effective Time will be, the only class of capital stock of Permavest
outstanding. All of the issued and outstanding shares of Permavest Common Stock
are owned by the Bank free and clear of all liens, pledges, charges, claims,
encumbrances, restrictions, security interests, options and pre-emptive rights
and of all other rights or claims of any other person, corporation or entity
with respect thereto. Permavest has no capital stock authorized, issued or
outstanding other than as described in this Section 4.03(e) and has no intention
or obligation to authorize or issue any other capital stock or any additional
shares of Permavest Common Stock.
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(f) Except as set forth in the Disclosure Schedule and except for
options granted under the Stock Option Plans, there are no options, warrants,
commitments, calls, puts, agreements, understandings, arrangements or
subscription rights relating to any shares of Permanent Common Stock, or any
securities convertible into or representing the right to purchase or otherwise
acquire any common stock or debt securities of Permanent, by which Permanent is
or may become bound. Permanent does not have any outstanding contractual or
other obligation to repurchase, redeem or otherwise acquire any of the issued
and outstanding shares of Permanent Common Stock.
(g) There are no options, warrants, commitments, calls, puts,
agreements, understandings, arrangements or subscription rights relating to any
shares of common stock of the Subsidiaries, or any securities convertible into
or representing the right to purchase or otherwise acquire any common stock or
debt securities of a Subsidiary, by which a Subsidiary is or may become bound.
None of the Subsidiaries has any outstanding contractual or other obligation to
repurchase, redeem or otherwise acquire any of the issued and outstanding shares
of its common stock.
(h) Except as set forth in the Disclosure Schedule, Permanent has no
knowledge of any person or entity which beneficially owns 5% or more of its
outstanding shares of Permanent Common Stock.
(i) Set forth in the Disclosure Schedule is a listing of each affiliate
of Permanent as described in Section 6.05 hereof setting forth the number of
shares of Permanent Common Stock beneficially owned (as defined in Rule 13d-3
under the 1934 Act) by each affiliate and the manner in which such shares are
owned.
4.04. Organizational Documents. The respective Certificate of
Incorporation and By-Laws of Permanent and the Charter and By-Laws of the Bank,
representing true, accurate and complete copies of such corporate documents in
effect as of the date of this Agreement, have been delivered to ONB.
4.05. Compliance with Law. (a) Neither Permanent nor any Subsidiary has
engaged in any activity nor taken or omitted to take any action which has
resulted in the violation of any local, state, federal or foreign law, statute,
regulation, rule, ordinance, order, restriction or requirement, nor are they in
violation of any order, injunction, judgment, writ or decree of any court or
government agency or body. Permanent and each Subsidiary possess and hold all
licenses, franchises, permits, certificates and other authorizations necessary
for the continued conduct of their business without interference or
interruption, and such licenses, franchises, permits, certificates and
authorizations are transferable (to the extent required) to ONB or Old National
Bank at the Effective Time without any restrictions or limitations thereon or
the need to obtain any consents of government agencies or other third parties
other than as set forth in this Agreement.
(b) Except as set forth in the Disclosure Schedule, neither Permanent
nor any Subsidiary or their property is a party to or is subject to any order,
decree, agreement, memorandum of understanding or similar arrangement with, or a
commitment letter or similar submission to, or
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extraordinary supervisory letter from, any federal or state governmental agency
or authority charged with the supervision or regulation of financial
institutions or issuers of securities or engaged in the insurance of deposits
(including, without limitation, the OTS, the Federal Reserve Board and the FDIC)
or the supervision or regulation of Permanent or any Subsidiary. There are no
uncured violations, or violations with respect to which refunds or restitutions
may be required, cited in any examination report of Permanent or any Subsidiary
as a result of an examination by any regulatory agency or body, or set forth in
any accountant's or auditor's report to Permanent or any Subsidiary.
4.06. Accuracy of Statements Made and Materials Provided to ONB. No
representation, warranty in this Section 4 or other statement made, or any
information provided, by Permanent or any Subsidiary in this Agreement or the
Disclosure Schedule (and any update thereto), and no written report, statement,
list, certificate, materials or other information furnished or to be furnished
by Permanent or any Subsidiary to ONB through and including the Effective Time
in connection with this Agreement or the Mergers contemplated hereby (including,
without limitation, any written information which has been or shall be supplied
by Permanent and the Subsidiaries with respect to their financial condition,
results of operations, business, assets, capital or directors and officers for
inclusion in the proxy statement-prospectus and registration statement relating
to the Mergers), contains or shall contain (in the case of information relating
to the proxy statement-prospectus at the time it is mailed to Permanent's
stockholders) any untrue statement of material fact or omits or shall omit to
state a material fact necessary to make the statements contained herein or
therein, in light of the circumstances in which they are made, not false or
misleading.
4.07. Litigation and Pending Proceedings. (a) Except as set forth in
the Disclosure Schedule and lawsuits involving collection of delinquent
accounts, there are no claims, actions, suits, proceedings, mediations,
arbitrations or investigations pending or to the best knowledge of Permanent
after due inquiry, threatened in any court or before any government agency or
authority, arbitration panel or otherwise (nor does Permanent have any knowledge
of a basis for any claim, action, suit, proceeding, litigation, arbitration or
investigation) against, by or affecting Permanent or any Subsidiary or which
would prevent the performance of this Agreement, declare the same unlawful or
cause the rescission hereof.
(b) Except as set forth in the Disclosure Schedule, neither Permanent
nor any Subsidiary is: (i) subject to any outstanding judgment, order, writ,
injunction or decree of any court, arbitration panel or governmental agency or
authority; (ii) presently charged with or, to the best knowledge of Permanent
after due inquiry, under governmental investigation with respect to any actual
or alleged violations of any law, statute, rule, regulation or ordinance; or
(iii) the subject of any pending or, to the best knowledge of Permanent after
due inquiry, threatened proceeding by any government regulatory agency or
authority having jurisdiction over its respective business, assets, capital,
properties or operations.
4.08. Financial Statements and Reports. Permanent has delivered to ONB
copies of the following financial statements and reports of Permanent and the
Subsidiaries, including the notes thereto (collectively, the "Permanent
Financial Statements"):
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(a) Consolidated Balance Sheets and the related Consolidated Statements
of Income and Consolidated Statements of Changes in Stockholders' Equity of
Permanent as of and for the years ended March 31, 1997, 1998 and 1999, and as of
and for the fiscal quarter ended September 30, 1999;
(b) Consolidated Statements of Cash Flows of Permanent for the years
ended March 31, 1997, 1998 and 1999, and for the fiscal quarter ended September
30, 1999;
(c) Consolidated Statements of Changes in Financial Position of
Permanent for the years ended March 31, 1998 and 1999, and for the fiscal
quarter ended September 30, 1999.
(d) Thrift Financial Reports for the Bank as of close of business on
December 31, 1996, 1997 and 1998 and September 30, 1999; and
(e) Financial Statements of Permanent on Form H-(b)(11) filed with the
Office of Thrift Supervision at the close of business on March 31, 1998 and
1999.
The Permanent Financial Statements present fairly the consolidated
financial position of Permanent as of and at the dates shown and the
consolidated results of operations for the periods covered thereby. The
Permanent Financial Statements described in clauses (a), (b) and (c) above for
completed fiscal years are audited financial statements and have been prepared
in conformance with generally accepted accounting principles applied on a
consistent basis, except as may otherwise be indicated in any accountants' notes
or reports with respect to such financial statements. The Permanent Financial
Statements do not include any assets, liabilities or obligations or omit to
state any assets, liabilities or obligations, absolute or contingent, or any
other facts which inclusion or omission would render any of the Permanent
Financial Statements false, misleading or inaccurate in any respect.
4.09. Properties, Contracts, Employees and Other Agreements. (a) Set
forth in the Disclosure Schedule are a true, accurate and complete copy of the
following:
(i) A brief description and the location of all real property
(other than properties acquired through foreclosures) owned by
Permanent and the Subsidiaries and the principal buildings and
structures located thereon and each lease of real property to
which Permanent or any Subsidiary is a party, identifying the
parties thereto, the annual rental payable, the expiration
date of the lease and a brief description of the property
covered;
(ii) a list of all agreements, contracts, leases, licenses, lines
of credit, understandings, commitments or obligations of
Permanent or any Subsidiary which individually:
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(A) will involve payment or receipt by Permanent or any
Subsidiary (other than as disbursements of loan
proceeds to customers, loan payments by customers or
customer deposits) of more than $25$50,000;
(B) will involve payments based on profits of Permanent
or any Subsidiary;
(C) will relate to the purchase of goods, products,
supplies or services in excess of $50,000;
(D) were not made in the ordinary course of business; or
(E) may not be terminated without penalty within one (1)
year from the date of this Agreement; and
(iii) The name and current annual salary of each director, officer
and employee of Permanent or any Subsidiary whose current
annual salary is in excess of $50,000, and the profit sharing,
bonus or other form of compensation (other than salary) paid
or payable by Permanent or any Subsidiary to or for the
benefit of each such person for the year ended December 31,
1998, and any employment, severance or deferred compensation
agreement or arrangement with respect to each such person.
(b) Each of the agreements, contracts, commitments, leases, instruments
and documents set forth in the Disclosure Schedule relating to this Section 4.09
is valid and enforceable in accordance with its terms, except to the extent
limited by general principles of equity and public policy or by bankruptcy,
insolvency, fraudulent transfer, readjustment of debt or other laws of general
application relative to or affecting the enforcement of creditor's rights, and
Permanent and the Subsidiaries are, and, to the best knowledge of Permanent
after due inquiry, all other parties thereto are, in compliance with the
provisions thereof, and Permanent and the Subsidiaries are not in default in the
performance, observance or fulfillment of any obligation, covenant or provision
contained therein. Except as set forth in the Disclosure Schedule, none of the
foregoing requires the consent of any party to its assignment in connection with
the Mergers contemplated by this Agreement. Other than as disclosed pursuant to
this Section 4.09, to the best knowledge of Permanent after due inquiry, no
circumstances exist resulting from transactions effected or to be effected, from
events which have occurred or may occur or from any action taken or omitted to
be taken which could reasonably be expected to result in the creation of any
agreement, contract, obligation, commitment, arrangement, lease or document
described in or contemplated by this Section 4.09.
(c) Neither Permanent nor any Subsidiary is, to the best knowledge of
Permanent, in default under or in breach of or, alleged to be in default under
or in breach of, any loan or credit agreement, conditional sales contract or
other title retention agreement, security agreement, bond, indenture, mortgage,
license, contract, lease, commitment or any other instrument or obligation.
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4.10. Absence of Undisclosed Liabilities. Except as provided in the
Permanent Financial Statements, Subsequent Permanent Financial Statements and in
the Disclosure Schedule, except for unfunded loan commitments and obligations on
letters of credit to customers of the Bank and trade payables incurred in the
ordinary course of the Bank's business, and except for the transaction
contemplated by this Agreement, neither Permanent nor any Subsidiary has, nor
will have at the Effective Time, any obligation, agreement, contract,
commitment, liability, lease or license which exceeds $50,000 individually, or
any obligation, agreement, contract, commitment, liability, lease or license
made outside of the ordinary course of business, nor does there exist any
circumstances resulting from transactions effected or events occurring on or
prior to the date of this Agreement or from any action omitted to be taken
during such period which could reasonably be expected to result in any such
obligation, agreement, contract, commitment, liability, lease or license.
4.11. Title to Assets. Except as described in this Section 4.11: (a)
Permanent or any Subsidiary, as the case may be, has good and marketable title
in fee simple absolute to all real property (including, without limitation, all
real property used as bank premises and all other real estate owned) which is
reflected as owned in the Permanent Financial Statements as of September 30,
1999; good title to all personal property reflected as owned in the Permanent
Financial Statements as of September 30, 1999, other than personal property
disposed of in the ordinary course of business since September 30, 1999; good
title to or right to use by valid and enforceable lease or contract all other
properties and assets (whether real or personal, tangible or intangible) which
Permanent and the Subsidiaries purport to own or which Permanent or any
Subsidiary uses in its business; good title to, or right to use by terms of a
valid and enforceable lease or contract, all other property used in their
respective businesses; and good title to all property and assets acquired and
not disposed of or leased since September 30, 1999. All of such properties and
assets are owned by Permanent or a Subsidiary free and clear of all land or
conditional sales contracts, mortgages, liens, pledges, restrictions, security
interests, charges, claims, rights of third parties or encumbrances of any
nature except: (i) as set forth in the Disclosure Schedule; (ii) as specifically
noted in the Permanent Financial Statements; (iii) statutory liens for taxes not
yet delinquent or being contested in good faith by appropriate proceedings; (iv)
pledges or liens required to be granted in connection with the acceptance of
government deposits or granted in connection with repurchase or reverse
repurchase agreements; and (v) easements, encumbrances and liens of record,
imperfections of title and other limitations which are not material in amounts
to Permanent on a consolidated basis and which do not materially detract from
the value or materially interfere with the present or contemplated use of any of
the properties subject thereto or impair the use thereof for the purposes for
which they are held or used. All real property owned or leased by Permanent or
any Subsidiary is in compliance with all applicable zoning and land use laws.
Normal wear and tear excepted, all real property, machinery, equipment,
furniture and fixtures owned or leased by Permanent or any Subsidiary is
structurally sound, in good operating condition and has been and is being
maintained and repaired in the ordinary condition of business.
(b) Permanent and the Subsidiaries have conducted their respective
businesses in compliance with all federal, state, county and municipal laws,
statutes, regulations, rules, ordinances,
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orders, directives, restrictions and requirements relating to, without
limitation, responsible property transfer, underground storage tanks, petroleum
products, air pollutants, water pollutants or storm water or process waste water
or otherwise relating to the environment, air, water, soil or toxic or hazardous
substances or to the manufacturing, recycling, handling, processing,
distribution, use, generation, treatment, storage, disposal or transport of any
hazardous or toxic substances or petroleum products (including polychlorinated
biphenyls, whether contained or uncontained, and asbestos-containing materials,
whether friable or not), including, without limitation, the Federal Solid Waste
Disposal Act, the Hazardous and Solid Waste Amendments, the Federal Clean Air
Act, the Federal Clean Water Act, the Occupational Health and Safety Act, the
Federal Resource Conservation and Recovery Act, the Toxic Substances Control
Act, the Federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980 and the Superfund Amendments and Reauthorization Act of
1986, all as amended, and the rules and regulations of the Environmental
Protection Agency, the Nuclear Regulatory Agency, the Army Corp of Engineers,
the Department of Interior, the United States Fish and Wildlife Service and any
state department of natural resources or state environmental protection agency
now in effect (collectively, "Environmental Laws"). Except as set forth in the
Disclosure Schedule, there are no pending or, to the best knowledge of Permanent
after due inquiry, threatened, claims, actions or proceedings by any local
municipality, sewage district or other governmental entity against Permanent or
any Subsidiary with respect to the Environmental Laws. No environmental
clearances or other governmental approvals are required for the conduct of the
business of Permanent or any Subsidiary, as presently conducted. Neither
Permanent nor any Subsidiary is the owner, and has not been in the chain of
title or the operator or lessee, of any property on which any substances have
been released, which substances if known to be present on, at or under such
property would require clean-up, removal, treatment, abatement, response costs
or any other remedial action under any Environmental Law, and there is no
reasonable basis or grounds for any such claim, action or proceeding. Permanent
and the Subsidiaries own, operate, lease, use and control, and have owned,
operated, leased, used and controlled, all real property in compliance with the
Environmental Laws. Neither Permanent nor any Subsidiary has any liability for
any clean-up or remediation under any of the Environmental Laws with respect to
any real property.
4.12. Loans. (a) Except as set forth in the Disclosure Schedule, there
is no loan by the Bank in excess of $50,000 that has been classified by bank
regulators or management as "Other Loans Specially Mentioned," "Substandard,"
"Doubtful" or "Loss" or in excess of $50,000 or that has been identified by
accountants or auditors (internal or external) as having a significant risk of
uncollectability. The most recent loan watch list of the Bank and a list of all
loans in excess of $50,000 which the Bank has determined to be thirty (30) days
or more past due with respect to principal or interest payments or has placed on
nonaccrual status has been provided to ONB.
(b) All loans reflected in the Permanent Financial Statements as of
September 30, 1999 and which have been made, extended, renewed, restructured,
approved, amended or acquired since September 30, 1999: (i) to the best
knowledge of Permanent, constitute the legal, valid and binding obligation of
the obligor and any guarantor named therein, except to the extent limited by
general principles of equity and public policy or by bankruptcy, insolvency,
fraudulent transfer,
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reorganization, liquidation, moratorium, readjustment of debt or other laws of
general application relative to or affecting the enforcement of creditors'
rights; (ii) are evidenced by notes, instruments or other evidences of
indebtedness which are true, genuine and what they purport to be; and (iii) are
secured, to the extent that Permanent or any Subsidiary has a security interest
in collateral or a mortgage securing such loans, by perfected security interests
or recorded mortgages naming Permanent or any Subsidiary as the secured party or
mortgagee (unless by written agreement to the contrary).
(c) The reserves, the allowance for possible loan and lease losses and
the carrying value for real estate owned which are shown on the Permanent
Financial Statements are to the best of Permanent's knowledge, adequate in all
respects under the requirements of generally accepted accounting principles
applied on a consistent basis to provide for possible losses on items for which
reserves were made, on loans and leases outstanding and real estate owned as of
the respective dates.
4.13. Stockholder Rights Plan. Except as otherwise provided in this
Agreement, the Disclosure Schedule and Permanent's Certificate of Incorporation
and By-Laws, Permanent has no stockholder rights plan or any other plan, program
or agreement involving, restricting, prohibiting or discouraging a change in
control or merger of Permanent or which may be considered an anti-takeover
mechanism.
4.14. Employee Benefit Plans. (a) With respect to the employee benefit
plans, as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), sponsored or otherwise maintained by Permanent or
any Subsidiary, whether written or oral, in which Permanent or any Subsidiary
participates as a participating employer; to which Permanent or any Subsidiary
contributes and including any such plans which within the preceding six years
have been terminated, merged into another plan of Permanent or the Bank, frozen
or discontinued (collectively, "Permanent Plans") except as set forth on the
Disclosure Schedule: (i) all such Permanent Plans have been, in all respects,
maintained in compliance with the requirements prescribed by all applicable
statutes, orders and governmental rules or regulations, including, without
limitation, ERISA, the Code, and Treasury and Labor Regulations promulgated
thereunder, (ii) all Permanent Plans intended to constitute tax-qualified plans
under Section 401(a) of the Code have received favorable determination letters
from the Internal Revenue Service ("Service") with respect to "TRA" (as defined
in Section 1 of Rev. Proc. 93-39), and Permanent is not aware of any
circumstances likely to result in revocation of any such favorable determination
letter; (iii) except for the Permanent Common Stock held by its trustee as an
asset of the Permanent ESOP, no Permanent Plan (or its related trust) holds any
stock or other securities of Permanent or any related or affiliated person or
entity; (iv) Permanent has not engaged in any transaction that may subject
Permanent, or any Permanent Plan, to a civil penalty imposed by Section 502 of
ERISA; (v) no prohibited transaction (as defined in Section 406 of ERISA and as
defined in Section 4975(c) of the Code) has occurred with respect to any
Permanent Plan; (vi) there are no actions, suits, proceedings or claims pending
(other than routine claims for benefits) or, to the best knowledge of Permanent
after due inquiry, threatened, against Permanent, any Subsidiary, any Permanent
Plan, any fiduciary
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of any Permanent Plan or the assets of any Permanent Plan as to which Permanent
or any Subsidiary would have liability.
(b) Permanent has made available to ONB true, accurate and complete
copies of the following (including all plans and programs which have been
terminated): (i) pension, retirement, profit-sharing, savings, stock purchase,
stock bonus, stock ownership, stock option and stock appreciation right plans
and all amendments thereto and all summary plan descriptions thereof (including
any modifications thereto); (ii) all employment, deferred compensation (whether
funded or unfunded), salary continuation, consulting, bonus, severance and
collective bargaining agreements, arrangements or understandings; (iii) all
executive and other incentive compensation plans, programs and agreements; (iv)
all group insurance and health insurance contracts, policies or plans; and (v)
all other incentive, welfare, fringe or benefit plans, or agreements, maintained
or sponsored, participated in, or contributed to by Permanent or any Subsidiary
for its current or former directors, officers or employees.
(c) Except as set forth on the Disclosure Schedule, no current or
former director, officer or employee of Permanent or any Subsidiary is entitled
to any benefit under any welfare benefit plans (as defined in Section 3(1) of
ERISA) after termination of employment with Permanent, except that such
individuals may be entitled to continue their group health care coverage
pursuant to the retiree health coverage provisions of Permanent's group health
plan or pursuant to Section 4980B of the Code if they pay the cost of such
coverage pursuant to the applicable requirements of that plan or the Code with
respect thereto, whichever is applicable.
(d) With respect to any group health plan (as defined in Section 607(1)
of ERISA) sponsored or maintained by Permanent or any Subsidiary, in which
Permanent or any Subsidiary participates as a participating employer or to which
Permanent or any Subsidiary contributes, no director, officer, employee or agent
of Permanent or any Subsidiary has engaged in any action or failed to act in
such a manner that, as a result of such action or failure to act, would cause a
tax to be imposed on Permanent or any Subsidiary under Code Section 4980B(a).
With respect to all such plans, all applicable provisions of Section 4980B of
the Code and Section 601 of ERISA have been complied with in all respects by
Permanent and the Subsidiaries.
(e) Except as set forth on the Disclosure Schedule, there are no
collective bargaining, employment, management, consulting, deferred
compensation, reimbursement, indemnity, retirement, early retirement, severance
or similar plans or agreements, under discussion or negotiation by management
with any employee or group of employees, any member of management or any other
person.
4.15. Obligations to Employees. All contributions required to be made
under the terms of any Permanent Plan have been timely made or have been
reflected on the Permanent Financial Statements. Neither any Permanent Plan
which is an "employee pension benefit plan" within the meaning of Section 3(2)
of ERISA (a "Pension Plan") nor any single-employer plan or any entity which is
considered one employer with Permanent under Section 4001 of ERISA or Section
414 of
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the Code (an "ERISA Affiliate") has an "accumulated funding deficiency" (whether
or not waived) within the meaning of Section 412 of the Code or Section 302 of
ERISA and no ERISA Affiliate has an outstanding funding waiver. Neither
Permanent nor any Subsidiary have provided, or is required to provide, security
to any Pension Plan or to any single-employer plan of any ERISA Affiliate
pursuant to Section 401(a)(29) of the Code.
4.16. Taxes, Returns and Reports. Except as set forth in the Disclosure
Schedule, Permanent and each Subsidiary has since January 1, 1995: (a) duly
filed all federal, state, local and foreign tax returns of every type and kind
required to be filed, and each such return is true, accurate and complete in all
respects; (b) paid or otherwise adequately reserved in accordance with generally
accepted accounting principles for all taxes, assessments and other governmental
charges due or claimed to be due upon Permanent or any Subsidiary or any of
their income, properties or assets; and (c) not requested an extension of time
for any such payments (which extension is still in force). Permanent has
established, and shall establish in the Subsequent Permanent Financial
Statements, in accordance with generally accepted accounting principles, a
reserve for taxes in the Permanent Financial Statements adequate to cover all of
Permanent's and the Subsidiaries' tax liabilities (including, without
limitation, income taxes, payroll taxes and withholding, and franchise fees) for
the periods then ending. Neither Permanent nor any Subsidiary has, nor will
have, any liability for taxes of any nature for or with respect to the operation
of their respective businesses, including the business of any subsidiary, or
ownership of their assets, including the assets of any subsidiary, from the date
hereof up to and including the Effective Time, except to the extent set forth in
the Subsequent Permanent Financial Statements (as hereinafter defined) or as
accrued or reserved for on the books and records of Permanent. Neither Permanent
nor any Subsidiary is currently under audit by any state or federal taxing
authority. No federal, state or local tax returns of Permanent have been audited
by any taxing authority during the past five (5) years.
4.17. Deposit Insurance. The deposits of the Bank are insured by the
FDIC in accordance with the Federal Deposit Insurance Act, as amended, and
Permanent and the Bank have paid or properly reserved or accrued for all current
premiums and assessments with respect to such deposit insurance.
4.18. Insurance. Set forth in the Disclosure Schedule is a list and
brief description of all policies of insurance (including, without limitation,
bankers' blanket bond, directors' and officers' liability insurance, property
and casualty insurance, group health or hospitalization insurance and insurance
providing benefits for employees) owned or held by Permanent or any Subsidiary
on the date hereof or with respect to which Permanent or any Subsidiary pays any
premiums. Each such policy is in full force and effect and all premiums due
thereon have been paid when due, and a true, accurate and complete copy thereof
has been made available to ONB prior to the date hereof.
4.19. Books and Records. The books and records of Permanent and the
Subsidiaries have been fully, properly and accurately maintained.
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4.20. Broker's, Finder's or Other Fees. Except for reasonable fees of
Permanent's attorneys, accountants, proxy solicitors and investment bankers, all
of which shall be paid by Permanent prior to the Effective Time, no agent,
broker or other person acting on behalf of Permanent or any Subsidiary or under
any authority of Permanent or any Subsidiary is or shall be entitled to any
commission, broker's or finder's fee or any other form of compensation or
payment from any of the parties hereto relating to this Agreement and the
Mergers contemplated hereby.
4.21. Interim Events. (a) Except as set forth in the Disclosure
Schedule, between the period from September 30, 1999 to the date of this
Agreement, no event has occurred and no fact or circumstance shall have come to
exist or come to be known which, directly or indirectly, individually or taken
together with all other facts, circumstances and events, has had, or is
reasonably likely to have, a Material Adverse Effect.
(b) Except as set forth in the Disclosure Schedule, between the period
from September 30, 1999 to the date of this Agreement, Permanent and the
Subsidiaries have carried on their businesses in the ordinary and usual course
consistent with their past practices (excluding the incurrence of fees and
expenses of professional advisors related to this Agreement and the transactions
contemplated hereby) and there has not been:
(i) any declaration, setting aside or payment of any dividend or
other distribution (whether in cash, stock or property) with
respect to Permanent Common Stock, except as provided by
Section 6.03(a)(iii); or
(ii) any split, combination or reclassification of any capital
stock of Permanent or any Subsidiary or any issuance or the
authorization of any issuance of any other securities in
respect of, or in lieu of or in substitution for shares of
Permanent Common Stock, except for issuances of Permanent
Common Stock upon the exercise of the Stock Options awarded
prior to the date hereof in accordance with the terms of the
Stock Option Plans.
4.22. Regulatory Filings. Permanent and the Subsidiaries have filed and
will continue to file in a timely manner all required filings with the
Securities and Exchange Commission ("SEC"), including, but not limited to, all
reports on Form 8-K, Form 10-K and Form 10-Q and proxy statements, and with all
appropriate federal and state regulatory agencies and authorities as required by
applicable law. All such filings with the SEC and with all other appropriate
federal and state regulatory agencies were and will be true, accurate and
complete as of the dates of the filings and have been complied or will comply in
all respects as to form with the applicable requirements and prepared in
conformity with generally accepted regulatory accounting principles applied on a
consistent basis, and no such filing contained or will contain any untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements, at the time and in light of the circumstances
under which they were made, not false or misleading.
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4.23. Indemnification Agreements. (a) Neither Permanent nor any
Subsidiary is a party to any indemnification, indemnity or reimbursement
agreement, contract, commitment or understanding to indemnify any present or
former director, officer, employee, stockholder or agent against liability or
hold the same harmless from liability other than as expressly provided in the
Certificate of Incorporation or By-Laws of Permanent or the Articles or By-Laws
of any Subsidiary.
(b) No claims have been made against or filed with Permanent or any
Subsidiary nor have, to the best knowledge of Permanent after due inquiry, any
claims been threatened against Permanent or any Subsidiary, for indemnification
against liability or for reimbursement of any costs or expenses incurred in
connection with any legal or regulatory proceeding by any present or former
director, officer, stockholder, employee or agent of Permanent or any
Subsidiary.
4.24. Year 2000. (a) All devices, systems, machinery, information
technology, computer software and hardware, and other date sensitive technology
(collectively, the "Systems") necessary for Permanent and the Subsidiaries to
carry on their business as presently conducted and as contemplated to be
conducted in the future are Year 2000 Compliant or will be Year 2000 Compliant
within a period of time calculated to result in no disruption of any of
Permanent's or the Subsidiaries' business operations. Neither Permanent nor any
Subsidiary has received, or reasonably expects to receive, a deficiency notice
from any federal or state regulator relating to their failure to be Year 2000
Compliant. For purposes of this Section 4.24, "Year 2000 Compliant" means that
such Systems are designed to be used prior to, during and after the Gregorian
calendar year 2000 A.D. and will operate during each such time period without
error relating to date data, specifically including any error relating to, or
the product of, date data which represents or references different centuries or
more than one century.
(b) Permanent has:
(i) undertaken a detailed inventory, review, and
assessment of all areas within its business and
operations that could be adversely affected by the
failure of Permanent or any Subsidiary to be Year
2000 Compliant on a timely basis;
(ii) developed a detailed plan and timeline for becoming
Year 2000 Compliant on a timely basis; and
(iii) to date, implemented that plan in accordance with
that timetable.
4.25. Stockholder Approval. The affirmative vote of the holders of a
majority of the Permanent Common Stock (which are issued and outstanding on the
record date relating to the meeting of stockholders) is required for stockholder
approval of this Agreement and the Company Merger.
4.26. Nonsurvival of Representations and Warranties. The
representations and warranties of Permanent and the Bank contained in this
Agreement shall expire at the earlier of the termination of this Agreement or
the Effective Time, and thereafter Permanent and all directors, officers and
employees of Permanent shall have no further liability with respect thereto,
except for fraud or for false or misleading statements made intentionally or
knowingly in connection with such representations and warranties.
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SECTION 5
REPRESENTATIONS AND WARRANTIES OF ONB
On or prior to the date hereof, ONB has delivered to Permanent a
schedule (the "ONB Disclosure Schedule") setting forth, among other things,
items the disclosure of which is necessary or appropriate as an exception to one
or more representations or warranties contained in this Section 5 or to one or
more of its covenants contained in Section 7; provided, that the mere inclusion
of an item in the ONB Disclosure Schedule as an exception to a representation or
warranty shall not be deemed an admission by ONB that such item represents a
material exception or fact, event or circumstance or that such item is
reasonably likely to result in a Material Adverse Effect on ONB (as defined
below). The items set forth in the ONB Disclosure Schedule establish only those
items that constitute an exception to a representation or warranty which
constitutes, or is reasonably likely to result in, a Material Adverse Effect on
ONB.
For the purpose of this Agreement, and in relation to ONB and its
subsidiaries, a Material Adverse Effect on ONB means any effect that (i) is
material and adverse to the financial position, results of operations or
business of ONB and its subsidiaries taken as a whole, or (ii) would materially
impair the ability of ONB to perform its obligations under this Agreement or
otherwise materially threaten or materially impede the consummation of the
Mergers and the other transactions contemplated by this Agreement; provided,
however, that Material Adverse Effect on ONB shall not be deemed to include the
impact of (a) changes in banking and similar laws of general applicability or
interpretations thereof by courts or governmental authorities, (b) changes in
generally accepted accounting principles or regulatory accounting requirements
applicable to banks and their holding companies generally, (c) any modifications
or changes to valuation policies and practices in connection with the Mergers or
restructuring charges taken in connection with the Mergers, in each case in
accordance with generally accepted accounting principles, and (d) changes in
general level of interest rate or conditions or circumstances that affect the
banking industry generally.
No representation or warranty of ONB contained in this Section 5, shall
be deemed untrue or incorrect, and ONB shall not be deemed to have breached a
representation or warranty, as a consequence of the existence of any fact, event
or circumstance unless such fact, circumstance or event, individually or taken
together with all other facts, events or circumstances inconsistent with any
representation or warranty contained in this Section 5, has had or is reasonably
likely to have a Material Adverse Effect on ONB.
ONB accordingly hereby represents and warrants to Permanent as follows:
5.01. Organization and Authority. Each of ONB and Merger Corporation is
a corporation duly organized and validly existing under the laws of the State of
Indiana. Old National Bank is a national banking association duly organized and
validly existing under the laws of the United States of America. ONB is a
registered bank holding company under the BHC Act, and has full power and
authority (corporate and otherwise) to own and lease its properties as presently
owned and leased and
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to conduct its business in the manner and by the means utilized as of the date
hereof. The execution, delivery and performance of this Agreement by each of
ONB, Old National Bank and Merger Corporation has been duly authorized by all
necessary corporate action. ONB's common stock is registered pursuant to Section
12, and ONB is subject to the reporting requirements, of the 1934 Act. Each of
ONB's direct subsidiaries has been duly organized and is validly existing in
good standing under the laws of the jurisdiction of its organization, and has
full power and authority to own and lease its properties as presently owned and
leased and to conduct its business in the manner and by the means utilized as of
the date hereof.
5.02. Authorization. (a) Each of ONB, Old National Bank and Merger
Corporation has the requisite corporate power and authority to enter into this
Agreement and to carry out its obligations hereunder, subject to the fulfillment
of the conditions precedent set forth in Section 8.01 (d), (e), and (f) hereof.
As of the date hereof, ONB is not aware of any reason why the approvals set
forth in Section 8.01(e) will not be received in a timely manner and without the
imposition of a condition, restriction or requirement of the type described in
Section 8.01(e). This Agreement and its execution and delivery by ONB have been
duly authorized by its Board of Directors. Assuming due execution and delivery
by Permanent and the Bank, this Agreement constitutes a valid and binding
obligation of ONB, Old National Bank and Merger Corporation, subject to the
conditions precedent set forth in Section 8.01 hereof, and is enforceable in
accordance with its terms, except to the extent limited by general principles of
equity and public policy and by bankruptcy, insolvency, reorganization,
liquidation, moratorium, readjustment of debt or other laws of general
application relating to or affecting the enforcement of creditors' rights.
(b) Neither the execution of this Agreement nor consummation of the
Mergers contemplated hereby: (i) conflicts with or violates ONB's Articles of
Incorporation or By-Laws; (ii) conflicts with or violates in any respect any
local, state, federal or foreign law, statute, ordinance, rule or regulation
(provided that the approvals of or filings with applicable government regulatory
agencies or authorities required for consummation of the Mergers are obtained)
or any court or administrative judgment, order, injunction, writ or decree;
(iii) conflicts with, results in a breach of or constitutes a default under any
note, bond, indenture, mortgage, deed of trust, license, contract, lease,
agreement, arrangement, commitment or other instrument to which ONB is a party
or by which ONB is subject or bound; (iv) results in the creation of or gives
any person, corporation or entity the right to create any lien, charge, claim,
encumbrance or security interest, or results in the creation of any other rights
or claims of any other party (other than Permanent or the Bank) or any other
adverse interest, upon any right, property or asset of ONB; or (v) terminates or
gives any person, corporation or entity the right to terminate, accelerate,
amend, modify or refuse to perform under any note, bond, indenture, mortgage,
agreement, contract, lease, license, arrangement, deed of trust, commitment or
other instrument to which ONB is bound or with respect to which ONB is to
perform any duties or obligations or receive any rights or benefits.
(c) Other than in connection or in compliance with applicable federal
and state banking, securities and corporation statutes, all as amended, and the
rules and regulations promulgated thereunder, no notice to, filing with,
exemption by or consent, authorization or approval of any
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governmental agency or body is necessary for the consummation by ONB of the
Mergers contemplated by this Agreement.
5.03. Capitalization. (a) The authorized capital stock of ONB as of the
date hereof consists of (i) 75,000,000 shares of common stock, no par value per
share, of which approximately 45,600,000 shares were issued and outstanding as
of September 30, 1999, and (ii) 2,000,000 shares of preferred stock, no shares
of which have been or are presently intended to be issued, other than in
connection with any obligations of ONB to issue such preferred stock under its
shareholders' rights plan. Such issued and outstanding shares of ONB capital
stock have been duly and validly authorized by all necessary corporate action of
ONB, are validly issued, fully paid and nonassessable, and have not been issued
in violation of any pre-emptive rights of any present or former ONB shareholder.
All of the issued and outstanding shares of common stock of ONB's subsidiaries
are owned by ONB free and clear of all liens, pledges, charges, claims,
encumbrances, restrictions, security interests, options and pre-emptive rights
and of all other rights or claims of any other person, corporation or entity
with respect thereto. Except as described in this Section 5.03, ONB has no other
authorized capital stock.
(b) Except for shares of ONB common stock beneficially owned by its
trust affiliates, ONB has no knowledge of any person or entity who beneficially
owns 5% or more of its issued and outstanding shares of common stock.
5.04. Regulatory Filings. ONB and each of its subsidiaries have filed
and will continue to file in a timely manner all required filings with the SEC,
including, but not limited to, all reports on Form 8-K, Form 10-K and Form 10-Q
and proxy statements, and with all other federal and state regulatory agencies
as required by applicable law. All filings by ONB with the SEC and with all
other federal and state regulatory agencies complied or will comply in all
respects as to form with the applicable requirements and were and will be true,
accurate and complete in all respects as of the dates of the filings, and no
such filings contained or will contain any untrue statement of a material fact
or omitted to state a material fact necessary in order to make the statements,
at the time and in the light of the circumstances under which they were made,
not false or misleading.
5.05. Shares to be Issued in Merger. The shares of ONB common stock
which Permanent stockholders will be entitled to receive upon consummation of
the Mergers pursuant to this Agreement will, at the Effective Time, be duly
authorized and will, when issued in accordance with this Agreement, be validly
issued, fully paid and nonassessable and will have been registered under the
Securities Act of 1933, as amended ("1933 Act") and listed for trading on the
Nasdaq National Market System.
5.06. Organizational Documents. The Articles of Incorporation and
By-Laws of ONB in force as of the date of this Agreement have been delivered to
Permanent and represent true, accurate and complete copies of such corporate
documents of ONB in effect as of the date of this Agreement.
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5.07. Compliance With Law. Neither ONB nor any of its subsidiaries has
engaged in any activity nor taken or omitted to take any action which has
resulted or could result in the violation of any local, state, federal or
foreign law, statute, rule, regulation, ordinance, order, restriction or
requirement or of any order, injunction, judgment, writ or decree of any court
or government agency or body. ONB and each of its subsidiaries possesses and
holds all licenses, franchises, permits, certificates and other authorizations
necessary for the continued conduct of their business without interference or
interruption.
5.08. Litigation and Pending Proceedings. (a) There are no claims,
actions, suits, proceedings, investigations or arbitrations pending or, to the
best knowledge of ONB after due inquiry, threatened in any court or before or by
any government agency or authority, arbitration panel or otherwise (nor is there
any basis for any claim, action, suit, proceeding, litigation, investigation or
arbitration) against, by or affecting ONB or its subsidiaries which would
prevent the performance of this Agreement, declare the same unlawful or cause
the rescission hereof.
(b) Neither ONB nor any of its subsidiaries is: (i) subject to any
outstanding judgment, order, writ, injunction or decree of any court,
arbitration panel or governmental agency or authority; (ii) presently charged
with or, to the best knowledge of ONB, under governmental investigation with
respect to any actual or alleged violations of any law, statute, rule,
regulation or ordinance; or (iii) the subject of any pending or, to the best
knowledge of ONB after due inquiry, threatened proceeding by any government
regulatory agency or authority having jurisdiction over its business, assets,
capital, properties or operations.
5.09. Accuracy of Statements Made to Permanent. No representation,
warranty or other statement made, or any information provided or to be provided,
by ONB in this Agreement, and no written report, statement, list, certificate,
materials or other information furnished or to be furnished by ONB to Permanent
through and including the Effective Time in connection with this Agreement or
the Mergers contemplated hereby (including, without limitation, any written
information which has been or shall be supplied by ONB with respect to its
financial condition, results of operations, business, assets, capital or
directors and officers for inclusion in the proxy statement-prospectus and
registration statement relating to the Mergers), contains or shall contain (in
the case of information relating to the proxy statement-prospectus at the time
it is mailed to Permanent's stockholders) any untrue or misleading statement of
material fact or omits or shall omit to state a material fact necessary to make
the statements contained herein or therein, in light of the circumstances in
which they are made, not false or misleading.
5.10. Employee Benefit Plans. (a) With respect to the employee benefit
plans, as defined in Section 3(3) of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"), sponsored or otherwise maintained by ONB or any
of its subsidiaries, whether written or oral, in which ONB or any of its
subsidiaries participates as a participating employer; to which ONB or any of
its subsidiaries contributes and including any such plans which within the
preceding six years have been terminated, merged into another plan of ONB or any
of its subsidiaries, frozen or discontinued (collectively, "ONB Plans"): (i) all
such ONB Plans have been, in all respects, maintained in
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compliance with the requirements prescribed by all applicable statutes, orders
and governmental rules or regulations, including, without limitation, ERISA, the
Code, and Treasury and Labor Regulations promulgated thereunder, (ii) all ONB
Plans intended to constitute tax-qualified plans under Section 401(a) of the
Code have received favorable determination letters from the Internal Revenue
Service ("Service") with respect to "TRA" (as defined in Section 1 of Rev. Proc.
93-39), and ONB is not aware of any circumstances likely to result in revocation
of any such favorable determination letter; (iii) except for the ONB common
stock held by its trustee as an asset of the ONB Employee Stock Ownership Plan
and the ONB Employees' Retirement Plan, no ONB Plan (or its related trust) holds
any stock or other securities of ONB or any related or affiliated person or
entity; (iv) ONB has not engaged in any transaction that may subject ONB, or any
ONB Plan, to a civil penalty imposed by Section 502 of ERISA; (v) no prohibited
transaction (as defined in Section 406 of ERISA and as defined in Section
4975(c) of the Code) has occurred with respect to any ONB Plan; (vi) to the best
knowledge of ONB, there are no actions, suits, proceedings or claims pending
(other than routine claims for benefits) or threatened, against ONB, any of its
subsidiaries, any ONB Plan, any fiduciary of any ONB Plan or the assets of any
ONB Plan as to which ONB would have liability.
(b) ONB has made available to Permanent true, accurate and complete
copies of the following (including all plans and programs which have been
terminated): (i) pension, retirement, profit-sharing, savings, stock purchase,
stock bonus, stock ownership, stock option and stock appreciation right plans
and all amendments thereto and all summary plan descriptions thereof (including
any modifications thereto); (ii) all employment, deferred compensation (whether
funded or unfunded), salary continuation, consulting, bonus, severance and
collective bargaining agreements, arrangements or understandings; (iii) all
executive and other incentive compensation plans, programs and agreements; (iv)
all group insurance and health insurance contracts, policies or plans; and (v)
all other incentive, welfare or employee benefit plans, or agreements,
maintained or sponsored, participated in, or contributed to by ONB or any of its
subsidiaries for its current or former directors, officers or employees.
(c) No current or former director, officer or employee of ONB or any of
its subsidiaries is entitled to any benefit under any welfare benefit plans (as
defined in Section 3(1) of ERISA) after termination of employment with ONB,
except that such individuals may be entitled to continue their group health care
coverage pursuant to the retiree health coverage provisions of the ONB
Corporation Group Health Plan or pursuant to Section 4980B of the Code if they
pay the cost of such coverage pursuant to the applicable requirements of the
Plan or the Code with respect thereto, whichever is applicable.
(d) With respect to any group health plan (as defined in Section 607(1)
of ERISA) sponsored or maintained by ONB or any of its subsidiaries, in which
ONB or any of its subsidiaries participates as a participating employer or to
which ONB or any of its subsidiaries contributes, no director, officer, employee
or agent of ONB or any of its subsidiaries has engaged in any action or failed
to act in such a manner that, as a result of such action or failure to act,
would cause a tax to be imposed on ONB or any of its subsidiaries under Code
Section 4980B(a). With respect to all such
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plans, all applicable provisions of Section 4980B of the Code and Section 601 of
ERISA have been complied with in all respects by ONB and its subsidiaries.
5.11. Taxes, Returns and Reports. ONB has since January 1, 1995 (a)
duly filed all federal, state, local and foreign tax returns of every type and
kind required to be filed, and each such return is true, accurate and complete
in all respects; (b) paid or otherwise adequately reserved in accordance with
generally accepted accounting principles for all taxes, assessments and other
governmental charges due or claimed to be due upon ONB or its income, properties
or assets; and (c) not requested an extension of time for any such payments
(which extension is still in force). ONB has established, and shall establish in
its subsequent financial statements, in accordance with generally accepted
accounting principles, a reserve for taxes in the financial statements of ONB
adequate to cover all of its tax liabilities (including, without limitation,
income taxes, payroll taxes and withholding, and franchise fees) for the periods
then ending. ONB does not have, nor will it have, any liability for taxes of any
nature for or with respect to the operation of their respective businesses,
including the business of any subsidiary, or ownership of their assets,
including the assets of any subsidiary, from the date hereof up to and including
the Effective Time, except to the extent set forth in its subsequent financial
statements or as accrued or reserved for on the books and records of ONB. ONB is
not currently under audit by any state or federal taxing authority. No federal,
state or local tax returns of ONB have been audited by any taxing authority
during the past five (5) years.
5.12. Books and Records. The books and records of ONB have been fully,
properly and accurately maintained.
5.13. Year 2000. (a) All devices, systems, machinery, information
technology, computer software and hardware, and other date sensitive technology
(collectively, the "Systems") necessary for ONB to carry on its business as
presently conducted and as contemplated to be conducted in the future are Year
2000 Compliant or will be Year 2000 Compliant within a period of time calculated
to result in no disruption of any of ONB's business operations. Neither ONB nor
any of its banking subsidiaries has received, or reasonably expects to receive,
a deficiency notice from any federal or state regulator relating to their
failure to be Year 2000 Compliant. For purposes of this Section 5.13, "Year 2000
Compliant" means that such Systems are designed to be used prior to, during and
after the Gregorian calendar year 2000 A.D. and will operate during each such
time period without error relating to date data, specifically including any
error relating to, or the product of, date data which represents or references
different centuries or more than one century.
(b) ONB has:
(i) undertaken a detailed inventory, review, and
assessment of all areas within its business and
operations that could be adversely affected by the
failure of ONB to be Year 2000 Compliant on a timely
basis;
(ii) developed a detailed plan and timeline for becoming
Year 2000 Compliant on a timely basis; and
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(iii) to date, implemented that plan in accordance with
that timetable.
5.14. Financial Statements and Reports. (a) ONB or its agents have
delivered to Permanent copies of the following financial statements and reports
of ONB and its subsidiaries, including the notes thereto (collectively, the "ONB
Financial Statements"):
(i) Consolidated Balance Sheets and related Consolidated
Statements of Income and Consolidated Statements of
Changes in Shareholders' Equity of ONB as of and for
the years ended December 31, 1996, 1997 and 1998, and
for the fiscal quarter ended September 30, 1999; and
(ii) Consolidated Statements of Cash Flows of ONB for the
years ended December 31, 1996, 1997 and 1998 and for
the fiscal quarter ended September 30, 1999.
(b) The ONB Financial Statements present fairly the consolidated
financial position of ONB and its subsidiaries as of and at the dates shown and
the consolidated results of operations for the periods covered thereby. The ONB
Financial Statements described in clauses (i) and (ii) above, which consist of
fiscal year-end information, are audited financial statements and have been
prepared in conformance with generally accepted accounting principles applied on
a consistent basis except as may otherwise be indicated in any accountants'
notes or reports with respect to such financial statements. The ONB Financial
Statements do not include any assets, liabilities or obligations or omit to
state any assets, liabilities or obligations, absolute or contingent, or any
other facts, which inclusion or omission would render any of the ONB Financial
Statements false, misleading or inaccurate in any respect.
5.15. Interim Events. Except as set forth in the ONB Disclosure
Schedule, between the period from September 30, 1999 to the date of this
Agreement, no event has occurred and no fact or circumstance shall have come to
exist or come to be known which, directly or indirectly, individually or taken
together with all other facts, circumstances and events, has had, or is
reasonably likely to have, a Material Adverse Effect on ONB.
5.16. Shareholder Approval. Approval by ONB's shareholders of the
Merger of Permanent with Merger Corporation or for any other actions
contemplated by this Agreement is not required.
5.17. Broker's, Finder's or Other Fees. Except for reasonable fees of
ONB's attorneys and accountants and investment bankers, no agent, broker or
other person acting on behalf of ONB or under any authority of ONB is or shall
be entitled to any commission, broker's or finder's fee or any other form of
compensation or payment from any of the parties hereto relating to this
Agreement and the Mergers contemplated hereby.
5.18. Nonsurvival of Representations and Warranties. The
representations and warranties of ONB contained in this Agreement shall expire
at the earlier of the termination of this Agreement or the Effective Time and,
thereafter, ONB and all directors, officers and employees of ONB shall
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have no further liability with respect thereto, except for fraud or for false or
misleading statements made intentionally or knowingly in connection with such
representations and warranties.
SECTION 6
COVENANTS OF PERMANENT
Permanent and the Bank covenant and agree with ONB, Old National Bank
and Merger Corporation and covenant and agree to cause the Subsidiaries, to act
as follows:
6.01. Stockholder Approval. (a) Subject to Section 6.06 hereof,
Permanent shall submit this Agreement to its stockholders for approval and
adoption at a meeting to be called and held in accordance with applicable law
and the Certificate of Incorporation and By-Laws of Permanent at the earliest
possible reasonable date. Subject to Section 6.06 hereof, the Board of Directors
of Permanent shall recommend to Permanent's stockholders that such stockholders
approve and adopt this Agreement and the Company Merger and shall solicit
proxies voting in favor of this Agreement from Permanent's stockholders, unless
otherwise necessary under applicable fiduciary duties of Permanent's Board of
Directors as determined by the Board of Directors of Permanent in good faith
after consultation with independent legal counsel.
(b) Subject to Section 6.06(b) hereof, the Bank shall submit this
Agreement to Permanent, as its sole shareholder, for approval by unanimous
written consent without a meeting in accordance with applicable law and the
Charter and By-Laws of the Bank at a date reasonably in advance of the Effective
Time. The Board of Directors of the Bank shall recommend approval of this
Agreement and the Bank Merger to Permanent, as the sole shareholder of the Bank,
and Permanent, as the sole shareholder of the Bank, shall approve this Agreement
and the Bank Merger.
6.02. Other Approvals. (a) Permanent and the Subsidiaries shall proceed
expeditiously, cooperate fully and use its best efforts to assist ONB in
procuring upon reasonable terms and conditions all consents, authorizations,
approvals, registrations and certificates, in completing all filings and
applications and in satisfying all other requirements prescribed by law which
are necessary for consummation of the Mergers on the terms and conditions
provided in this Agreement at the earliest possible reasonable date.
(b) Any materials or information provided by Permanent or any
Subsidiary to ONB for use by ONB in any filing with any state or federal
regulatory agency or authority shall not contain any untrue or misleading
statement of material fact or shall omit to state a material fact necessary to
make the statements contained therein, in light of the circumstances in which
they are made, not false or misleading.
6.03. Conduct of Business. (a) On and after the date of this Agreement
and until the Effective Time or until this Agreement shall be terminated as
herein provided, neither Permanent nor any Subsidiary shall, without the prior
written consent of ONB:
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(i) make any changes in its capital stock accounts
(including, without limitation, any stock split,
stock dividend, recapitalization or
reclassification), except for the issuance of up to
364,144 shares of Permanent Common Stock under the
Stock Option Plans;
(ii) authorize a class of stock or issue, or authorize the
issuance of, securities other than or in addition to
the issued and outstanding common stock as set forth
in Section 4.03 hereof;
(iii) distribute or pay any dividends on its shares of
common stock, or make any other distribution to its
stockholders except that
(A) the Bank may pay cash dividends to Permanent
in the ordinary course of business for
payment of reasonable and necessary business
and operating expenses of Permanent and for
purposes of retiring the debt referenced in
Section 8.01(i) hereof and to provide funds
for Permanent's dividends to its
stockholders in accordance with this
Agreement,
(B) Permanent may pay to its stockholders its
usual and customary quarterly cash dividend
of Seven Cents ($0.07) per share for each
such dividend until the Effective Time;
provided, however, that no dividend may be
paid to Permanent stockholders during the
quarterly period in which the Mergers are
consummated if, during such period,
Permanent stockholders will become entitled
to receive dividends on their shares of ONB
common stock received pursuant to this
Agreement.
(iv) redeem any of its outstanding shares of common stock;
(v) merge, combine or consolidate or effect a share
exchange with or sell its assets or any of its
securities to any other person, corporation or entity
or enter into any other similar transaction not in
the ordinary course of business, except as provided
by Section 6.06(b) hereof;
(vi) purchase or acquire any assets or securities or
assume any liabilities of another bank holding
company, bank, corporation or other entity, except in
the ordinary course of business;
(vii) make any loan or commitment to lend money, issue any
letter of credit or accept any deposit, except in the
ordinary course of business in accordance with its
existing banking practices;
(viii) except for the transactions or proposed transactions
described in the Disclosure Schedule and the
acquisition or disposition in the ordinary course of
business of other real estate owned, acquire or
dispose of any real or personal property (excluding
the investment portfolio of the Bank) or fixed
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asset constituting a capital investment in excess of
$50,000 individually or $100,000 in the aggregate;
(ix) subject any of its properties or assets to a
mortgage, lien, claim, charge, option, restriction,
security interest or encumbrance, except for tax and
other liens which arise by operation of law and with
respect to which payment is not past due or is being
contested in good faith by appropriate proceedings
and except for pledges or liens: (i) required to be
granted in connection with acceptance by Permanent or
the Bank of government deposits; (ii) granted in
connection with repurchase or reverse repurchase
agreements; or (iii) otherwise incurred in the
ordinary course of the conduct of its business;
(x) promote to a new position or increase the rate of
compensation or enter into any agreement to promote
to a new position or increase the rate of
compensation, of any director, officer or employee of
Permanent or any Subsidiary (except for promotions
and compensation increases in the ordinary course of
business and in accordance with past practices and
established employment policies of Permanent and the
Subsidiaries and other than pursuant to an employee
retention program, which has been disclosed to ONB);
(xi) except for matters described in the Disclosure
Schedule, execute, create, institute, modify, amend
or terminate (except with respect to any amendments
to the Permanent Plans required by law, rule or
regulation) any pension, retirement, savings, stock
purchase, stock bonus, stock ownership, stock option,
stock appreciation or depreciation rights or profit
sharing plans; any employment, deferred compensation,
consulting, bonus or collective bargaining agreement;
any group insurance or health contract or policy; or
any other incentive, retirement, welfare or employee
welfare benefit plan, agreement or understanding for
current or former directors, officers or employees of
Permanent or any Subsidiary; or change the level of
benefits or payments under any of the foregoing or
increase or decrease any severance or termination of
pay benefits or any other fringe or employee benefits
other than as required by law or regulatory
authorities or the terms of any of the foregoing;
(xii) except for matters described in the Disclosure
Schedule, modify, amend or institute new employment
policies or practices, or enter into, renew or extend
any employment, indemnity, reimbursement, consulting,
compensation or severance agreements with respect to
any present or former directors, officers or
employees of Permanent or any Subsidiary;
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(xiii) hire or employ any new or additional employees of
Permanent or any Subsidiary, except those which are
reasonably necessary for the proper operation of
their respective businesses;
(xiv) elect or appoint any executive officers or directors
of Permanent or any Subsidiary who are not presently
serving in such capacities;
(xv) amend, modify or restate Permanent's Certificate of
Incorporation or ByLaws or the Articles, Charter or
By-Laws of any Subsidiary from those in effect on the
date of this Agreement and as delivered to ONB
hereunder;
(xvi) give, dispose of, sell, convey or transfer; assign,
hypothecate, pledge or encumber; or grant a security
interest in or option to or right to acquire any
shares of common stock or substantially all of the
assets of Permanent or any Subsidiary, or enter into
any agreement or commitment relative to the
foregoing, except as provided by Section 6.06(b)
hereof;
(xvii) fail to continue to make additions to in accordance
with the Bank's past practices and to otherwise
maintain in all respects the Bank's reserve for loan
and lease losses, or any other reserve account, in
accordance with safe, sound, and prudent banking
practices and in accordance with generally accepted
accounting principles applied on a consistent basis;
(xviii) fail to accrue, pay, discharge and satisfy all debts,
liabilities, obligations and expenses, including, but
not limited to, trade payables, incurred in the
regular and ordinary course of business as such
debts, liabilities, obligations and expenses become
due;
(xix) except for obligations disclosed within this
Agreement or the Disclosure Schedule, trade payables
and similar liabilities and obligations incurred in
the ordinary course of business and the payment,
discharge or satisfaction in the ordinary course of
business of liabilities reflected in the Permanent
Financial Statements or the Subsequent Permanent
Financial Statements,
(A) borrow any money (except for capital
purposes related to the Bank),
(B) incur any indebtedness including, without
limitation, through the issuance of
debentures, or
(C) incur any liability or obligation (whether
absolute, accrued, contingent or otherwise),
in an aggregate amount exceeding $50,000
(other than as contemplated by Section
6.03(a)(vii) hereof and legal, accounting
and fees related to the Mergers);
(xx) open, close, move or, in any material respect,
expand, diminish, renovate, alter or change any of
its offices or branches;
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(xxi) incur any additional indebtedness with respect to the
debt referenced in Section 8.01(i) hereof, except for
accrued interest; or
(xxii) pay or commit to pay any management or consulting or
other similar type of fees other than in the ordinary
course of business.
(b) Permanent and the Subsidiaries shall use their best efforts to
maintain, or cause to be maintained, in full force and effect, insurance on
their assets, properties and operations, fidelity coverage and directors' and
officers' liability insurance on their directors, officers and employees in such
amounts and with regard to such liabilities and hazards as are currently insured
by Permanent and the Subsidiaries as of the date of this Agreement.
6.04. Preservation of Business. On and after the date of this Agreement
and until the Effective Time or until this Agreement is terminated as herein
provided, Permanent and the Subsidiaries shall: (a) carry on their business
substantially in the manner as is presently being conducted and in the ordinary
course of business; (b) use their reasonable best efforts to preserve their
business organization intact, keep available the services of the present
officers and employees and preserve their present relationships with customers
and persons having business dealings with it; (c) maintain all of the properties
and assets that each of them owns or utilizes in good operating condition and
repair, reasonable wear and tear excepted, and maintain insurance upon such
properties and assets in amounts and kinds comparable to that in effect on the
date of this Agreement; (d) maintain their books, records and accounts in the
usual, regular and ordinary manner, on a basis consistent with prior years and
in compliance with all material respects with all statutes, laws, rules and
regulations applicable to them and to the conduct of their business; and (e) not
knowingly do or fail to do anything which will cause a breach of, or default in,
any contract, agreement, commitment, obligation, understanding, arrangement,
lease or license to which any one of them is a party or by which any one of them
is or may be subject or bound.
6.05. Restrictions Regarding Affiliates. Permanent shall, within thirty
(30) days after the date of this Agreement and promptly thereafter until the
Effective Time to reflect any changes, provide ONB with a list identifying each
person who may be deemed to be an affiliate of Permanent for purposes of Rule
145 under the 1933 Act. On or prior to the date of this Agreement, and
thereafter as may be required for a person who may be deemed an affiliate of
Permanent following the date of this Agreement, Permanent shall use its best
efforts to obtain from each director, executive officer and other person who may
be deemed to be such an affiliate of Permanent to deliver to ONB on or prior to
the date of this Agreement, and thereafter as may be required for any other
person who may be deemed an affiliate of Permanent following the date of this
Agreement, a written agreement, substantially in the form as attached hereto as
Exhibit BA. On or prior to the Effective Time, Permanent shall use its best
efforts to obtain from each director, executive officer and other person who may
be deemed to be an affiliate of Permanent for purposes of Rule 145 under the
1933 Act to deliver to ONB at the Effective Time a certificate signed by each
such person certifying to the effect that such person has complied with the
terms and conditions of their written agreement delivered to ONB pursuant to
this Section 6.05.
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6.06. Other Negotiations. (a) On and after the date of this Agreement
and until the Effective Time or until this Agreement is terminated as herein
provided, except with the prior written approval of ONB, neither Permanent nor
any Subsidiary shall permit nor authorize their respective directors, officers,
employees, agents or representatives to, directly or indirectly, initiate,
solicit or encourage, any corporation, association, partnership, person or other
entity or group concerning any merger, consolidation, share exchange,
combination, purchase or sale of substantial assets, sale of shares of common
stock (or securities convertible or exchangeable into or otherwise evidencing,
or any agreement or instrument evidencing the right to acquire, capital stock)
or similar transaction relating to Permanent or any Subsidiary or to which
Permanent or any Subsidiary may become a party (all such transactions are
hereinafter referred to as "Acquisition Transactions").
(b) Permanent and the Subsidiaries shall promptly communicate to ONB
the terms of any proposal or offer which any one of them may receive with
respect to an Acquisition Transaction. Permanent or any Subsidiary may, in
response to an unsolicited written proposal with respect to an Acquisition
Transaction from a third party (where Permanent or any Subsidiary is the selling
or nonsurviving party), furnish information to, and negotiate, explore or
otherwise engage in substantive discussions with such third party, and enter
into any such agreement, arrangement or understandings, in each case, only if
Permanent's Board of Directors determines in good faith by majority vote, after
consultation with its financial advisors and outside legal counsel, that failing
to take such action would be a breach of the fiduciary duties of Permanent's
Board of Directors in connection with another Acquisition Transaction (where
Permanent or any Subsidiary is the selling or nonsurviving party).
6.07. Press Releases. Except as required by law, neither Permanent nor
any Subsidiary shall issue any news or press releases or make any other public
announcements or disclosures relating to the Mergers without the prior consent
of ONB, which consent shall not be unreasonably withheld.
6.08. Disclosure Schedule Update. Permanent shall promptly supplement,
amend and update, upon the occurrence of any change prior to the Effective Time,
and as of the Effective Time, the Disclosure Schedule with respect to any
matters or events hereafter arising which, if in existence or having occurred as
of the date of this Agreement, would have been required to be set forth or
described in the Disclosure Schedule or this Agreement and including, without
limitation, any fact which, if existing or known as of the date hereof, would
have made any of the representations or warranties of Permanent contained herein
incorrect, untrue or misleading. No such supplement, amendment or update shall
become part of the Disclosure Schedule unless ONB shall have first consented in
writing with respect thereto.
6.09. Information, Access Thereto, Confidentiality. ONB and its
respective representatives and agents shall, on reasonable notice and during
normal business hours prior to the Effective Time, have full and continuing
access to the properties, facilities, operations, books and records of Permanent
and the Subsidiaries. ONB and its respective representatives and agents may,
prior to the Effective Time, make or cause to be made such reasonable
investigation of the operations, books,
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records and properties of Permanent and the Subsidiaries and of their financial
and legal condition as deemed necessary or advisable to familiarize themselves
with such operations, books, records, properties and other matters; provided,
however, that such access or investigation shall not interfere with the normal
business operations of Permanent and the Subsidiaries. Upon request, Permanent
and the Subsidiaries shall furnish ONB or its respective representatives or
agents, their attorneys' responses to external auditors requests for
information, management letters received from their external auditors and such
financial, loan and operating data and other information reasonably requested by
ONB which has been or is developed by Permanent or any Subsidiary, their
auditors, accountants or attorneys (provided with respect to attorneys, such
disclosure would not result in the waiver by Permanent or any Subsidiary of any
claim of attorney-client privilege), and will permit ONB and its respective
representatives or agents to discuss such information directly with any
individual or firm performing auditing or accounting functions for Permanent and
the Subsidiaries, and such auditors and accountants shall be directed to furnish
copies of any reports or financial information as developed to ONB or its
respective representatives or agents. No investigation by ONB shall affect the
representations and warranties made by Permanent herein. ONB shall not use any
such information obtained pursuant to this Agreement for any purpose unrelated
to the Mergers. Any confidential information or trade secrets received by ONB or
its representatives or agents in the course of such examination (whether
conducted prior to or after the date of this Agreement) shall be treated
confidentially, and any correspondence, memoranda, records, copies, documents
and electronic or other media of any kind containing such confidential
information or trade secrets or both shall be destroyed by ONB or, at
Permanent's request, returned to Permanent in the event this Agreement is
terminated as provided in Section 9 hereof. This Section 6.09 shall not require
the disclosure of any information to ONB which would be prohibited by law.
6.10. Subsequent Permanent Financial Statements. As soon as reasonably
available after the date of this Agreement, Permanent shall deliver to ONB the
monthly unaudited consolidated balance sheets and profit and loss statements of
Permanent prepared for its internal use, Thrift Financial Reports of the Bank
for each quarterly period completed prior to the Effective Time, and all other
financial reports or statements submitted to regulatory authorities after the
date hereof, to the extent permitted by law (collectively, "Subsequent Permanent
Financial Statements"). The Subsequent Permanent Financial Statements shall be
prepared on a basis consistent with past accounting practices and generally
accepted accounting principles applied on a consistent basis to the extent
applicable and shall present fairly the financial condition and results of
operations as of the dates and for the periods presented, subject to year end
audit adjustments and the absence of footnotes for interim statements. The
Subsequent Permanent Financial Statements, including the notes thereto, will not
include any assets, liabilities or obligations or omit to state any assets,
liabilities or obligations, absolute or contingent, or any other facts, which
inclusion or omission would render such financial statements inaccurate,
incomplete or misleading in any respect.
6.11. Transition of Defined Benefit Plan. Permanent shall continue to
make contributions to the Financial Institution Retirement Fund (the "Fund"), if
any, as may be required by the Fund prior to the Effective Time in order to
prevent a minimum funding deficiency, as defined by Section 412 of the Code, or
to defray reasonable administrative expenses of the Fund owed by or assessed
against
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Permanent prior to the Effective Time. To the extent that prior to the Effective
Time there exists under the Fund an excess of Fund assets attributable to
contributions made to the Fund by Permanent over the benefit liabilities owed by
the Fund to Permanent employees or participants, as determined by the Fund
administrator, Permanent may amend the defined benefit plan prior to the
Effective Time to increase such benefit liabilities for the purpose of absorbing
such excess Fund assets; provided, however, that such amendment (i) does not
result in any minimum funding deficiency under Section 412 of the Code; (ii)
does not contravene any Fund provision; or (iii) does not result in the loss of
the defined benefit plan's qualification under Section 401(a) of the Code.
Subject to the satisfaction of any notice requirements of the Fund, Permanent
shall withdraw as a participating employer under the Fund as of the Effective
Time. The non-forfeitable benefits accrued by Permanent employees under the Fund
as of the date of such withdrawal, as determined by the Fund administrator,
shall be paid or otherwise transferred in accordance with the applicable
provisions of Article XII of the Fund (Withdrawal of Participating Employer).
6.12. Transition of 401(k) Plan. Permanent shall continue to make all
non-discretionary contributions which it is required to make to the Financial
Institutions Thrift Plan (the "Plan") prior to the Effective Time. Subject to
the satisfaction of any notice requirements of the Plan, Permanent shall
terminate as a participating employer under the Plan as of the day before the
Effective Time. The non-forfeitable account balances of Permanent employees
under the Plan as of the date of such termination, including any accrued but
unpaid contributions for the partial plan year ending on such date, as
determined by the Plan administrator, shall be paid or otherwise transferred in
accordance with the applicable provisions of Article XI of the Plan (Termination
of Employer Participation).
6.13. Transition of ESOP. Permanent shall continue to make employer
contributions to the Permanent Bancorp, Inc. Employee Stock Ownership Plan (the
"ESOP") for each plan year quarter ending on or before the Effective Time,
provided such contributions are comparable in amount, on a prorated basis, to
past employer contributions to the ESOP. In the event the amount of such
contributions is insufficient to enable the ESOP trustee to pay principal and
interest on any Exempt Loan (as defined in the ESOP) as they are due, Permanent
shall direct the ESOP trustee to sell a sufficient number of unallocated shares
of Employer Securities held by the trustee and to apply the proceeds of such
sale in satisfaction of such principal and interest then due.
In addition, Permanent shall take, or cause to be taken, all actions
necessary to cause the fiduciaries of the ESOP to take all of the following
actions:
(i) Implement a written confidential pass through voting
procedure pursuant to which the participants under
the Permanent ESOP and their beneficiaries shall
direct the trustee under the Permanent ESOP to vote
the shares of Permanent Common Stock allocated to
their Permanent ESOP accounts with respect to the
Merger;
(ii) Provide the Permanent ESOP participants and their
beneficiaries with a written notice regarding the
existence of and provisions for such confidential
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pass through voting procedures, as well as the same
written materials to be provided to the shareholders
of Permanent in connection with the Merger;
(iii) Obtain a written opinion from a qualified,
independent financial advisor to the trustee of the
Permanent ESOP to the effect that the shares of ONB
common stock to be received by the Permanent ESOP in
the Merger in exchange for the shares of Permanent
Common Stock will constitute "adequate consideration"
as defined in Section 3(18) of ERISA, and that the
Merger, including the disposition of the Permanent
ESOP in connection therewith, is fair to the
Permanent ESOP and its participants from a financial
point of view. The written opinion referred to in the
preceding sentence may be jointly issued by such
financial advisor to the trustee, the Permanent ESOP
and to all other stockholders of Permanent Common
Stock; and
(iv) Take any and all additional actions necessary to
satisfy the requirements of ERISA applicable to the
Permanent ESOP fiduciaries in connection with the
Merger.
Permanent shall also take, or cause to be taken, all actions necessary
to obtain, prior to the Effective Time, a favorable determination letter from
Internal Revenue Service to the effect that the termination of the ESOP as of
the Effective Time does not adversely affect the qualification of the ESOP or
its related employee benefit trust for favorable income tax treatment under
Section 401(a) and 501(a) of the Code, respectively.
Permanent shall terminate the ESOP as of the Effective Time. All
account balances of the ESOP participants shall be fully vested and
non-forfeitable as of such termination date. As soon as administratively
feasible following the later of (1) the date of termination of the ESOP, or (2)
the receipt by Permanent of the favorable determination letter described in the
preceding paragraph, all vested and non-forfeitable benefits under the ESOP
shall be distributed to its participants pursuant to the provisions of Section
13.5 of the ESOP (Voluntary Termination).
6.14. Termination of Welfare Benefit Plans. Effective as of the last
day of the calendar month in which occurs the Effective Time, the group health,
dental, life and long term disability plans, and any other employee welfare
benefit plan, sponsored by Permanent on behalf of its eligible employees shall
be terminated. From the date of this Agreement through the date as of which each
such plan terminates Permanent shall continue to pay the insurance premiums
necessary to continue the benefits currently provided under such plans. As of
the Effective Time, each individual who has qualified for retiree health
coverage under the Permanent group health plan, either as a retiree or a spouse
or dependent of a retiree or as a director to whom Permanent has made, prior to
the date of this Agreement, a commitment to provide retiree health coverage
under such plan upon the retirement of such director or the termination of his
or her directorship, shall become covered as of the Effective Time under the
retiree health coverage provided under the ONB group health plan. It is
understood
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that such individual's coverage under the ONB group health plan shall become
secondary to such individual's Medicare coverage upon such individual's
eligibility for such Medicare coverage.
6.15. Termination of Educational Assistance Program. As of the last day
of the calendar month in which occurs the Effective Time, the tuition assistance
program currently sponsored by Permanent on behalf of its eligible employees
shall terminate. From the date of this Agreement through the date as of which
such program terminates Permanent shall continue to pay eligible benefits for
which a Permanent employee qualifies pursuant to the current provisions of such
program.
6.16. Termination of Cash Bonus Program. As of the Effective Time, the
cash bonus program currently sponsored by Permanent on behalf of its eligible
employees shall terminate. From the date of this Agreement through the Effective
Time, Permanent may continue to pay cash bonuses under the program provided the
amounts of such bonuses, individually or in the aggregate, are comparable to the
amounts of any past bonuses under the program and provided further that
Permanent has obtained the written consent of the ONB Chief Financial Officer to
pay any such bonus.
6.17 Transition of Director Deferred Compensation Plans. As of the
Effective Time, all contributions to or under either the Director Deferred
Compensation Master Agreement or the Second Director Deferred Compensation Plan
(collectively, the "Plans") shall cease. From the date of this Agreement through
the Effective Time, Permanent may continue to allow participants thereunder to
elect to defer the receipt of all or a portion of the director fees he or she
would otherwise receive, and to credit such fees to the director's individual
account under the applicable Plan. Following the Effective Time ONB shall
continue the Plans, and the grantor (rabbi) trust established on April 1, 1997
by Permanent in connection with such Plans, until all benefit liabilities
accrued under the Plans as of the Effective Time are distributed to the
participants entitled to such benefits. Upon the distribution of such accrued
benefits the Plans, and the trust, shall terminate and any residual assets of
such trust shall be returned to ONB.
6.18. Disposition of Restricted Stock. As of the date of this Agreement
the Board of Directors of Permanent shall take all actions necessary to ensure
that no further awards of Restricted Stock are granted to any participant under
the Recognition and Retention Plan (the "RRP"); the 1993 Stock Option and
Incentive Plan (the "1993 Plan'); or the 1999 Omnibus Incentive Plan (the "1999
Plan"). As of the Effective Time, Permanent shall take all actions necessary to
terminate the RRP, the 1993 Plan and the 1999 Plan. As of the date each such
plan terminates, any Restricted Period with respect to Restricted Stock
theretofore awarded to any participant under each such plan shall lapse. To the
extent not already fully vested, all shares of Permanent Common Stock awarded
under each such plan as Restricted Stock shall become fully vested in the
participant to whom such shares were awarded, and shall be exchanged for
unrestricted common stock of ONB pursuant to the provisions of Section 2.01
hereof.
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6.19. Disposition of Stock Options and Stock Rights. As of the date of
this Agreement the Board of Directors of Permanent shall take all actions
necessary to ensure that no further automatic or discretionary grants of an
Incentive Stock Option, a Non-Qualified Stock Option, a Stock Appreciation
Right, a Limited Stock Appreciation Right, or any combination thereof, as
defined therein, shall be awarded to any participant under the 1993 Plan or the
1999 Plan. As of the Effective Time, the Board of Directors of Permanent shall
terminate both the 1993 Plan and the 1999 Plan. To the extent not already fully
vested, all outstanding options and rights theretofore awarded under either such
plan shall be fully vested in the participants to whom such awards were granted.
6.20. Year 2000. Permanent shall:
(a) Additional Information. Furnish such additional information,
statements and other reports with respect to Permanent's Year 2000 compliance
(and its approach to and progress towards achieving compliance) discussed in
Section 4.24 hereof as ONB may reasonably request from time to time.
(b) Notice of Changes. In the event of any change in circumstances that
causes or will likely cause any of the representations and warranties set forth
in Section 4.24 hereof ("Year 2000 Compliance") to no longer be true and would
result in a Material Adverse Effect (hereinafter referred to as a "Change in
Circumstances"), then Permanent shall promptly, and in any event within ten (10)
days of receipt of information regarding a Change in Circumstances, provide ONB
with written notice ("Notice") that describes in reasonable detail the Change in
Circumstances and how such Change in Circumstances caused or will likely cause
the representations and warranties set forth in Section 4.24 hereof to no longer
be true. Permanent shall, within ten (10) days of a request, also provide ONB
with any additional information ONB reasonably requests of Permanent in
connection with the Notice and/or a Change in Circumstances.
(c) Audits. Give any representative of ONB reasonable access to inspect
any of the Systems of Permanent and the Subsidiaries, and to project test the
Systems to determine if they are Year 2000 Compliant in an integrated
environment, all at the sole cost and expense of ONB.
6.21. Reports. Promptly upon its becoming available, furnish to ONB one
(1) copy of each financial statement, report, notice, or proxy statement sent by
Permanent to its stockholders generally and of each regular or periodic report,
registration statement or prospectus filed by Permanent with the SEC or any
successor agency, and of any order issued by any Governmental Authority in any
proceeding to which Permanent is a party, except for foreclosure proceedings in
the ordinary course of business. For purposes of this provision, "Governmental
Authority" shall mean any government (or any political subdivision or
jurisdiction thereof), court, bureau, agency or other governmental entity having
or asserting jurisdiction over Permanent or any of its business, operations or
properties.
6.22. Adverse Actions. Permanent shall not (a) take any action while
knowing that such action would, or is reasonably likely to, prevent or impede
the Mergers from qualifying as a reorganization within the meaning of Section
368 of the Code; or (b) knowingly take any action that
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is intended or is reasonably likely to result in (i) any of its representations
and warranties set forth in this Agreement being or becoming untrue, subject to
the standard set out in the second paragraph to Section 4, in any respect at any
time at or prior to the Effective Time, (ii) any of the conditions to the
Mergers set forth in Section 8 not being satisfied, (iii) a material violation
of any provision of this Agreement or (iv) a delay in the consummation of the
Mergers except, in each case, as may be required by applicable law or
regulation.
6.23. Termination Fee. (a) Permanent hereby understands, acknowledges
and agrees that ONB and Old National Bank have committed and will commit
substantial time, effort, resources and expenses in pursuing the Mergers and
that neither ONB nor Old National Bank would enter into this Agreement without
Permanent and the Bank agreeing to the Termination Fee (as hereinafter defined).
Permanent and the Bank hereby further agree that they shall immediately pay to
ONB a termination fee in the amount of Four Million Six Hundred Thousand Dollars
($4,600,000) in immediately available funds ("Termination Fee"), in the event
that any of the following events occurs or has occurred without the prior
written consent of ONB:
(i) the acquisition, following the date of this Agreement, by any
entity, person or group, other than ONB, of beneficial ownership, or the right
to acquire beneficial ownership, of fifteen percent (15%) or more (in the
aggregate) of any shares of voting capital stock of Permanent (including,
without limitation, shares of Permanent Common Stock) or any shares of capital
stock of any of the Subsidiaries (for purposes of this Section, the terms
"group" and "beneficial ownership" shall have the same meanings assigned thereto
in Section 13(d) of the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder), but only if (A) such entity,
person or group has publicly announced its opposition to this Agreement or the
Mergers or its intention not to vote the capital stock of Permanent or any of
the Subsidiaries beneficially owned by the entity, person or group in favor of
this Agreement or the Mergers; or (B) such entity, person or group has proposed,
indicated an intention to propose or entered into a letter of intent, agreement
in principle or other agreement (whether binding or non-binding) relating to a
merger, consolidation, share exchange or other combination with, or an
acquisition of, Permanent or any of the Subsidiaries; or (C) such entity, person
or group has commenced or indicated its intention to commence a tender, exchange
or other offer for any shares of capital stock of Permanent (including, without
limitation, shares of Permanent Common Stock) or any shares of capital stock of
any of the Subsidiaries; or
(ii) the Board of Directors of Permanent, in connection with its
consideration, acceptance or approval of any merger, consolidation, share
exchange or combination involving Permanent or any of the Subsidiaries or any
purchase of all or substantially all of Permanent's or any of the Subsidiaries'
assets or capital stock or any other similar acquisition or transaction, or in
connection with any tender, exchange or other offer for any shares of capital
stock of Permanent (including, without limitation, shares of Permanent Common
Stock) or any shares of capital stock of any of the Subsidiaries, has (A) failed
to unanimously recommend to Permanent stockholders approval and adoption of this
Agreement and the Company Merger; or (B) withdrawn or conditioned its unanimous
recommendation to Permanent stockholders of approval and adoption of this
Agreement and the Company Merger; or (C) modified or changed its unanimous
recommendation to Permanent
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stockholders of approval and adoption of this Agreement and the Company Merger
in a manner adverse in any respect to the interests of ONB; or (D) failed to
solicit proxies in favor of this Agreement and the Company Merger from the
stockholders of Permanent; or
(iii) the acceptance or approval by Permanent or any of the
Subsidiaries of any proposal (however conditional or future) of, or the
execution by Permanent or any of the Subsidiaries of any letter of intent,
agreement in principle or other agreement (whether binding or non-binding) with,
any entity, person or group, other than ONB, (A) to acquire Permanent by merger,
consolidation, share exchange, combination, purchase of all or substantially all
of Permanent's or any of the Subsidiaries' assets or capital stock or any other
similar acquisition or transaction, or (B) in connection with any tender,
exchange or other offer for any shares of capital stock of Permanent (including,
without limitation, shares of Permanent Common Stock) or any shares of capital
stock of any of the Subsidiaries; or
(iv) the Board of Directors of Permanent shall have accepted or
approved, and any entity, person or group shall have filed an application,
notice, registration statement, proxy statement or other materials or documents
with the Board of Governors of the Federal Reserve System, the Office of Thrift
Supervision, the Federal Deposit Insurance Corporation, the Office of the
Comptroller of the Currency, the SEC or any other federal or state government
agency, authority or body with respect to, (A) any merger, consolidation, share
exchange or other combination involving, or any purchase of all or substantially
all of the assets or capital stock of, Permanent or any of the Subsidiaries, or
any similar acquisition or transaction, or (B) any tender, exchange or other
offer for any shares of capital stock of Permanent (including, without
limitation, shares of Permanent Capital Stock) or any shares of the capital
stock of any of the Subsidiaries; or
(v) notwithstanding any fiduciary duties of Permanent's Board of
Directors, the meeting at which Permanent's stockholders will vote with respect
to this Agreement and the Company Merger shall not have occurred on or before
September 27, 2000, unless such vote shall not have occurred because the SEC has
not authorized for mailing to Permanent's stockholders Permanent's proxy
statement relating to this Agreement and the Company Merger on a timely basis in
order to permit such meeting to occur on or before September 27, 2000.
The provisions of this Section 6.23(a) shall terminate upon any
termination of this Agreement, except (i) if one of the events described in this
Section 6.23(a) occurs or shall have occurred prior to the termination of this
Agreement, or (ii) if ONB terminates this Agreement based upon a willful breach
by Permanent or the Bank of any representation, warranty, covenant or agreement
contained in this Agreement; then, in the case of clause (i) of this paragraph,
the obligation of Permanent and the Bank to pay ONB the Termination Fee and all
costs of collection and interest related thereto shall survive any termination
of this Agreement and continue in full force and effect until the Termination
Fee and all costs of collection and interest have been paid in full to ONB; and
in the case of clause (ii) of this paragraph, the obligation of Permanent and
the Bank to pay the Termination Fee and all costs of collection and interest
related thereto shall survive such termination and continue in full force and
effect until the Termination Fee and all costs of collection and interest have
been paid in full to
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ONB, but only if any of the events described in this Section 6.23(a)(i), (iii)
and (iv) occurs or shall have occurred during the twelve (12) month period
immediately following such termination by ONB. In addition, neither Permanent
nor the Bank shall be obligated to pay the Termination Fee and the costs of
collection related thereto in the event that Permanent terminates this Agreement
based upon a willful and material breach of any representation, warranty or
covenant contained in this Agreement by ONB.
(b) The Termination Fee shall be immediately paid to ONB upon the
occurrence of any of the events set forth in Section 6.23(a) hereof. If the
Termination Fee is not immediately paid as provided, then ONB shall be entitled
to recover interest at the highest prime rate set forth in The Wall Street
Journal (Midwest Edition) under the section entitled "Money Rates" on the unpaid
amount of the Termination Fee from the time that the Termination Fee is due
until paid-in-full, together with all costs of collection thereof, including
reasonable attorneys' fees and expenses.
(c) The parties hereby understand, acknowledge and agree that the
Termination Fee shall reasonably compensate ONB and Old National Bank for, among
other things, (i) certain expenses incurred for attorneys, accountants,
financial advisors and consultants of ONB and Old National Bank in developing
the Mergers and drafting this Agreement, (ii) ONB's and Old National Bank's
management time and expense in investigating, analyzing, developing and pursuing
the Mergers, (iii) expenses relating to ONB's and Old National Bank's due
diligence efforts relating to Permanent and the Bank, (iv) ONB's and Old
National Bank's substantial time, effort, resources and expenses committed and
to be committed in pursuing the Mergers, and (v) the fact that neither ONB nor
Old National Bank would enter into this Agreement without Permanent and the Bank
agreeing to the payment of the Termination Fee as provided herein. Permanent and
the Bank further understand, acknowledge and agree that the amount of the
Termination Fee is fair, reasonable and not a penalty.
(d) For purposes of this Section 6.23, the terms "person" and "entity"
shall include an individual, partnership, limited liability company,
corporation, trust, firm, association, unincorporated organization and any other
entity.
6.24. Confirmation of Total Outstanding Shares. Permanent shall confirm
in writing to ONB five (5) business days prior to the Effective Time the Total
Outstanding Shares. In the event the Total Outstanding Shares differs from
4,467,239, then for purposes of this Agreement, the Total Outstanding Shares
shall be deemed to be the corrected number confirmed to ONB pursuant to this
Section 6.24 and such event shall not be deemed a breach of this Agreement by
Permanent; provided, however, that such difference may not be greater than
25,000 shares and if such difference is greater than 25,000 shares, then ONB
shall have the right to terminate this Agreement pursuant to Section
9.01(b)(i)(A) regardless of materiality.
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SECTION 7
COVENANTS OF ONB
ONB, Old National Bank and Merger Corporation covenant and agree with
Permanent and the Bank as follows:
7.01. Approvals. (a) ONB shall have primary responsibility for the
preparation, filing and costs of all bank holding company and bank regulatory
applications required for consummation of the Mergers. ONB shall file all bank
holding company and bank regulatory applications as soon as practicable after
the execution of this Agreement. ONB shall provide to Permanent's legal counsel
a reasonable opportunity to review such applications prior to their filing and
shall provide to Permanent's legal counsel copies of all applications filed and
copies of all material written communications with all state and federal bank
regulatory agencies relating to such applications. ONB shall proceed
expeditiously, cooperate fully and use its best efforts to procure, upon terms
and conditions reasonably acceptable to ONB, all consents, authorizations,
approvals, registrations and certificates, to complete all filings and
applications and to satisfy all other requirements prescribed by law which are
necessary for consummation of the Mergers on the terms and conditions provided
in this Agreement at the earliest possible reasonable date.
(b) So long as this Agreement is submitted to Permanent's stockholders
for a vote thereon, Old National Bank and Merger Corporation shall submit this
Agreement to ONB, as their sole shareholder, for approval by unanimous written
consent without a meeting in accordance with applicable law and the respective
Articles and By-Laws of Old National Bank and Merger Corporation, and the Boards
of Directors of Old National Bank and Merger Corporation shall each recommend to
its sole shareholder that such shareholder approve this Agreement and the
Mergers.
(c) So long as the actions contemplated by Section 7.01(b) hereof with
respect to Permanent have occurred, ONB shall vote all of its shares of capital
stock of Old National Bank and Merger Corporation in favor of approval of this
Agreement and the Mergers.
7.02. SEC Registration. (a) ONB shall file with the SEC as soon as
practicable after the execution of this Agreement a Registration Statement on an
appropriate form under the 1933 Act covering the shares of ONB common stock to
be issued pursuant to this Agreement and shall use its best efforts to cause the
same to become effective and thereafter, until the Effective Time or termination
of this Agreement, to keep the same effective and, if necessary, amend and
supplement the same. Such Registration Statement and any amendments and
supplements thereto are referred to in this Agreement as the "Registration
Statement". The Registration Statement shall include a proxy
statement-prospectus reasonably acceptable to ONB and Permanent, prepared for
use in connection with the meeting of stockholders of Permanent referred to in
Section 6.01 hereof, all in accordance with the rules and regulations of the
SEC. ONB shall, as soon as practicable after filing the Registration Statement,
make all filings required to obtain all Blue Sky exemptions, authorizations,
consents or approvals required for the issuance of ONB common stock. In advance
of filing the Registration Statement and all other filings described in Section
7.01 hereof, ONB shall provide Permanent and its counsel with a copy of the
Registration Statement and each such other filing and provide a reasonable
opportunity to comment thereon.
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(b) Any materials or information provided by ONB in any filing with any
state or federal regulatory agency or authority shall not contain any untrue or
misleading statement of material fact or shall omit to state a material fact
necessary to make the statements contained therein, in light of the
circumstances in which they are made, not false or misleading.
(c) All filings by ONB with the SEC and with all other federal and
state regulatory agencies shall be true, accurate and complete in all material
respects as of the dates of the filings, and no such filings shall contain any
untrue statement of a material fact or omit to state a material fact necessary
in order to make the statements, at the time and in light of the circumstances
under which they were made, not false or misleading.
(l) (d) ONB will use reasonable best efforts to list for trading on the
Nasdaq National Market System (subject to official notice of issuance) prior to
the Effective Time, the shares of ONB common stock to be issued in the Mergers.
7.03. Employee Benefit Plans. (a) As of the Effective Time, ONB will
make available to the employees of Permanent and the Subsidiaries who continue
as employees of ONB or any subsidiary of ONB after the Effective Time, subject
to Section 7.03(b) and (c) hereof, substantially the same employee benefits on
substantially the same terms and conditions as ONB offers to similarly situated
officers and employees. Until such time as the employees of Permanent and the
Subsidiaries become covered by the ONB welfare benefit plans, the employees of
Permanent and the Subsidiaries shall remain covered by the Permanent Plans which
cover such employees, subject to the terms of such plans. Except as otherwise
provided in Sections 6.11 through 6.19, ONB will honor in accordance with their
terms (i) all employee benefit obligations to current and former officers,
directors and employees of Permanent and the Subsidiaries accrued as of the
Effective Time and (ii) to the extent set forth in the Disclosure Schedule, all
employee severance plans in existence on the date hereof and all employment or
severance agreements entered into prior to the date hereof to the extent set
forth in the Disclosure Schedule.
(b) Subject to the provisions of subsection (c) hereof, years of
service (as defined in the applicable ONB plan) of an officer or employee of
Permanent or any Subsidiary prior to the Effective Time shall be credited,
effective as of the date on which such employees become covered by a particular
ONB plan, to each such officer or employee eligible for coverage under Section
7.03(a) hereof for purposes of: (i) eligibility under ONB's employee welfare
benefit plans; (ii) eligibility and vesting, but not for purposes of benefit
accrual or contributions, under the ONB Employees' Retirement Plan ("ONB Pension
Plan") or under the ONB Employees' Savings and Profit Sharing Plan ("ONB Profit
Sharing Plan"); and (iii) eligibility and vesting, but not for purposes of
benefit accrual or contributions, under the ONB Employee Stock Ownership Plan
("ESOP"). Those officers and employees of Permanent or any Subsidiary who
otherwise meet the eligibility requirements of the ONB Profit Sharing Plan and
ESOP, based on their age and years of service to Permanent or any Subsidiary,
shall become participants thereunder at the Effective Time. Those officers and
employees of Permanent or any Subsidiary who otherwise meet the eligibility
requirements of the ONB Pension Plan, based upon their age and years of
Permanent or any Subsidiary service, shall become
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participants thereunder no later than the January 1st which coincides with or
next follows the Effective Time. Those officers or employees who do not meet the
eligibility requirements of the ONB Pension Plan, ONB Profit Sharing Plan or
ESOP on such dates shall become participants thereunder on the first plan entry
date under the ONB Pension Plan, the ONB Profit Sharing Plan or ESOP, as the
case may be, which coincides with or next follows the date on which such
eligibility requirements are satisfied.
(c) In accordance with the provisions of the Health Insurance
Portability and Accountability Act ("HIPAA") and the terms of the ONB group
health plan, officers and employees of Permanent or any Subsidiary who become
participants in the ONB group health plan will be given "creditable coverage"
credit for their coverage under the Permanent Group Health Plan under the ONB
group health plan's pre-existing condition limitation provisions. In addition,
if a condition was not a "pre-existing condition" for a participant in the
Permanent Group Health Plan, it shall not be considered to be a pre-existing
condition under the ONB group health plan.
(cd) Neither the terms of this Section 7.03 nor the provision of any
employee benefits by ONB or any of its subsidiaries to employees of Permanent or
any Subsidiary shall: (i) create any employment contract, agreement or
understanding with or employment rights for, or constitute a commitment or
obligation of employment to, any of the officers or employees of Permanent or
any Subsidiary; or (ii) prohibit or restrict ONB or its subsidiaries, whether
before or after the Effective Time, from changing, amending or terminating any
employee benefits provided to its employees from time to time.
(de) Following the Effective Time, ONB agrees to honor and abide by the
terms of the written employment agreements set forth in the Disclosure Schedule,
except as may be otherwise required by a government regulatory agency.
(f) ONB shall take any and all actions reasonably necessary to
effectuate the disposition of the Permanent Plans provided by Sections 6.11
through 6.19, and ONB's obligations to take these actions shall survive the
Effective Time.
7.04. Stock Options. (a) Prior to five (5) business days before the
Effective Time, a holder of a Stock Option may by written notice to ONB elect to
exchange such Stock Option for either (i) cash in an amount equal to the
remainder of (A) the product of the number of shares of Permanent Common Stock
subject to such Stock Option multiplied by the Exchange Ratio multiplied by the
Average Price Per Share of ONB common stock minus (B) the aggregate exercise
price for Permanent Common Stock otherwise purchasable pursuant to such Stock
Option (such number calculated pursuant to this Section 7.04(a)(i) hereinafter
referred to as the "Option Value") or (ii) such number of shares of ONB common
stock equal to the quotient arrived at by dividing (A) the Option Value by (B)
the Average Price Per Share of ONB common stock.
(b) Following the Effective Time, distribution of stock certificates
representing shares of ONB common stock and any cash payment, without interest,
pursuant to Section 7.04(a) hereof shall
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be made by ONB to each former holder of a Stock Option exercising an election
pursuant to Section 7.04(a) hereof as soon as practical following delivery to
ONB of a properly completed and executed cancellation of Stock Option, all in
form and substance reasonably satisfactory to ONB.
(c) At the Effective Time, the obligations of Permanent with respect to
each outstanding Stock Option which was properly granted pursuant to a stock
option agreement executed in accordance with the Stock Option Plans shall be
assumed by ONB as hereinafter provided. In connection therewith, each Stock
Option shall be deemed to constitute an option to acquire, on the same terms and
conditions as were applicable under such Stock Option at the Effective Time,
that number of shares of ONB common stock, rounded to the nearest whole share,
as the holder of such Stock Option would have been entitled to receive pursuant
to the Mergers had such holder exercised such Option in full (after giving
effect to accelerated vesting) immediately prior to the Effective Time and,
immediately thereafter, exchanged such shares solely for ONB common stock based
upon the Exchange Ratio at an exercise price per share equal to (A) the
aggregate exercise price for Permanent Common Stock otherwise purchasable
pursuant to such Stock Option divided by (B) the number of shares of ONB common
stock, rounded to the nearest whole share, deemed purchasable pursuant to such
Stock Option; provided, however, that in the case of any Stock Option to which
Section 422 of the Code applies, the option price, the number of shares
purchasable pursuant to such option and the terms and conditions of exercise of
such option shall be determined in accordance with the foregoing, subject to
such adjustments as are necessary in order to satisfy the requirements of
Section 4.24(a) of the Code. In no event shall ONB be required to issue
fractional shares of ONB common stock pursuant to the Stock Options.
(d) As soon as practicable after the Effective Time, ONB shall deliver
to each holder of a Stock Option an appropriate notice or agreement which sets
forth such holder's rights pursuant to the Stock Option, and the agreements
evidencing the grants of such Stock Options shall continue in effect on the same
terms and conditions (subject to the conversion required by this Section 7.04
after giving effect to the Mergers and the assumption by ONB as set forth
above); provided, however, to the extent necessary to effectuate the provisions
of this Section 7.04, ONB may deliver new or amended Stock Option agreements
which reflect the terms of each Stock Option assumed by ONB. With respect to
each Stock Option, the optionee shall be solely responsible for any and all tax
liability (other than the employer's one-half share of any employment taxes)
which may be imposed upon the optionee as a result of the provisions of this
Section 7.04 and as a result of the grant and exercise of such Stock Options.
(e) At the Effective Time, ONB shall file with the SEC a registration
statement on an appropriate form with respect to the shares of ONB common stock
subject to such options and shall use its best efforts to maintain the
effectiveness of such registration statement or registration statements (and
maintain the current status of the prospectus or prospectuses with respect
thereto) for so long as such options remain outstanding.
7.05. Press Releases. Except as required by law, ONB shall not issue
any news or press releases or make any other public announcements or disclosures
relating primarily to Permanent with
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respect to the Mergers without the prior consent of Permanent, which consent
shall not be unreasonably withheld.
7.06. Indemnification. (a) Following the Effective Time and for a
period of six (6) years thereafter, ONB shall indemnify, defend and hold
harmless the present directors, officers and employees of Permanent and its
Subsidiaries (each, an "Indemnitee") against all costs or expenses (including
reasonable attorneys' fees), judgments, fines, losses, claims, damages or
liabilities (collectively, "Costs") incurred in connection with any claim,
action, suit, proceeding or investigation, whether civil, criminal,
administrative or investigative, arising out of actions or omissions occurring
at or prior to the Effective Time (including without limitation, the
transactions contemplated by this Agreement) to the fullest extent that
Permanent is permitted to indemnify (and advance expenses to) its directors,
officers, and employees under Permanent's Certificate of Incorporation and
Permanent's By-Laws as in effect on the date hereof.
(b) In the event ONB or any of its successors or assigns (i)
consolidates with or merges into any other corporation or entity and shall not
be the continuing or surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all of its properties
and assets to any person or entity, then, and in each case, to the extent
necessary, proper provision shall be made so that the successors and assigns of
ONB assume the obligations set forth in this Section 7.06.
(c) ONB shall maintain in effect for not less than two (2) years from
the Effective Time the policies of directors' and officers' liability insurance
most recently maintained by Permanent; provided, however, that ONB may
substitute therefor policies with reputable and financially sound carriers for
substantially similar coverage containing terms and conditions which are no less
advantageous for so long as such substitution does not result in gaps or lapses
in coverage with respect to claims arising from or relating to matters occurring
prior to the Effective Time. ONB shall pay all expenses, including attorneys'
fees, that may be incurred by any Indemnitee in enforcing the indemnity and
other obligations provided for in this Section 7.06.
(d) The provisions of this Section 7.06 are intended to be for the
benefit of, and shall be enforceable by, each Indemnitee and their respective
heirs and representatives.
7.07 Adverse Actions. ONB shall not (a) take any action while knowing
that such action would, or is reasonably likely to, prevent or impede the
Mergers from qualifying as a reorganization within the meaning of Section 368 of
the Code; or (b) knowingly take any action that is intended or is reasonably
likely to result in (i) any of its representations and warranties set forth in
this Agreement being or becoming untrue, subject to the standard set out in the
second paragraph to Section 5, in any respect at any time at or prior to the
Effective Time, (ii) any of the conditions to the Mergers set forth in Section 8
not being satisfied, (iii) a material violation of any provision of this
Agreement or (iv) a delay in the consummation of the Mergers except, in each
case, as may be required by applicable law or regulation.
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7.08. Notice of Changes Relating to Year 2000 Compliance. In the event
of any change in circumstances that causes or will likely cause any of the
representations and warranties set forth in Section 5.13 hereof to no longer be
true and would result in a Material Adverse Effect on ONB (hereinafter referred
to as a "Change in Circumstances"), then ONB shall promptly, and in any event
within ten (10) days of receipt of information regarding a Change in
Circumstances, provide Permanent with written notice ("Notice") that describes
in reasonable detail the Change in Circumstances and how such Change in
Circumstances caused or will likely cause the representations and warranties set
forth in Section 5.13 hereof to no longer be true. ONB shall, within ten (10)
days of a request, also provide Permanent with any additional information
Permanent reasonably requests of ONB in connection with the Notice and/or a
Change in Circumstances.
7.09. Disclosure Schedule Update. ONB shall promptly supplement, amend
and update, upon the occurrence of any change prior to the Effective Time, and
as of the Effective Time, the ONB Disclosure Schedule with respect to any
matters or events hereafter arising which, if in existence or having occurred as
of the date of this Agreement, would have been required to be set forth or
described in the ONB Disclosure Schedule or this Agreement and including,
without limitation, any fact which, if existing or known as of the date hereof,
would have made any of the representations or warranties of ONB contained herein
incorrect, untrue or misleading. No such supplement, amendment or update shall
become part of the ONB Disclosure Schedule unless Permanent shall have first
consented in writing with respect thereto.
SECTION 8
CONDITIONS PRECEDENT TO THE MERGERS
8.01. ONB. The obligation of ONB to consummate the Mergers is subject
to the satisfaction and fulfillment of each of the following conditions on or
prior to the Effective Time, unless waived in writing by ONB:
(a) Representations and Warranties at Effective Time. Each of the
representations and warranties of Permanent and the Bank contained in this
Agreement shall, subject to the standard set out in the second paragraph to
Section 4, be true, accurate and correct at and as of the Effective Time as
though such representations and warranties had been made or given on and as of
the Effective Time.
(b) Covenants. Each of the covenants and agreements of Permanent shall
have been fulfilled or complied with from the date of this Agreement through and
as of the Effective Time.
(c) Deliveries at Closing. ONB shall have received from Permanent at
the Closing (as hereinafter defined) the items and documents, in form and
content reasonably satisfactory to ONB, set forth in Section 11.02(b) hereof.
(d) Registration Statement Effective. ONB shall have registered its
shares of common stock to be issued to stockholders of Permanent in accordance
with this Agreement with the SEC
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pursuant to the 1933 Act, and all state securities and Blue Sky approvals,
authorizations and exemptions required to offer and sell such shares shall have
been received by ONB. The Registration Statement with respect thereto shall have
been declared effective by the SEC and no stop order shall have been issued or
threatened.
(e) Regulatory Approvals. All regulatory approvals required to
consummate the transactions contemplated hereby, shall have been obtained and
shall remain in full force and effect and all statutory waiting periods in
respect thereof shall have expired and no such approvals shall contain any
conditions, restrictions or requirements which the board of directors of ONB
reasonably determines in good faith would (i) following the Effective Time, have
a Material Adverse Effect on ONB or (ii) reduce the benefits of the transactions
contemplated hereby to such a degree that ONB would not have entered into this
Agreement had such conditions, restrictions or requirements been known at the
date hereof which reduction in benefits shall not include any divestiture of
branches of the Bank necessary to make the Mergers not anti-competitive.
(f) Permanent Stockholder Approval. The stockholders of Permanent shall
have approved and adopted this Agreement as required by applicable law and its
Certificate of Incorporation. Permanent, as the sole shareholder of the Bank,
shall have approved and adopted this Agreement as required by applicable law and
the Bank's Charter.
(g) Officers' Certificate. Permanent shall have delivered to ONB a
certificate signed by its Chairman or President and its Secretary, dated as of
the Effective Time, certifying: (i) to the effect set out in Section 8.01(a),
the representations and warranties of Permanent and the Bank contained in this
Agreement shall be true, accurate and correct at and as of the Effective Time;
(ii) that all the covenants of Permanent have been complied with from the date
of this Agreement through and as of the Effective Time; and (iii) that Permanent
has satisfied and fully complied with all conditions necessary to make this
Agreement effective as to Permanent.
(h) Tax Opinion. The Board of Directors of ONB shall have received a
written opinion of the law firm of Krieg DeVault Alexander & Capehart, LLP,
dated as of the Effective Time, in form and content satisfactory to ONB, to the
effect that the Mergers to be effected pursuant to this Agreement will
constitute a tax-free reorganization under the Code (as described in Section
1.03 hereof) to each party hereto and to the stockholders of Permanent, except
with respect to cash received by Permanent's stockholders for fractional shares
resulting from application of the Exchange Ratio and pursuant to Section
7.04(a)(i) hereof. In rendering such opinion, counsel may require and rely upon
customary representation letters of the parties hereto and rely upon customary
assumptions.
(i) Satisfaction of Debt. The existing debt of Permanent owed to an
unaffiliated financial institution ("Lender") in the principal amount of
approximately $3 million shall be paid by Permanent at or prior to the Effective
Time and the security interest of the Lender in the Bank Common Stock shall be
released. At the Effective Time, all of the issued and outstanding shares of the
Bank Common Stock shall be owned by Permanent free and clear of all liens,
pledges, charges, claims,
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encumbrances, restrictions, security interests, options and pre-emptive rights
and of all other rights or claims of any other person, corporation or entity
with respect thereto.
(j) Fairness Opinion. ONB'sPermanent's investment banker shall have
issued (as of athe date not later than the mailing date of the proxy
statement-prospectus relating to the Mergers to be mailed to the stockholders of
ONBPermanent) its fairness opinion stating that the Exchange Ratio relating to
the Mergers is fair to the stockholders of ONBPermanent from a financial point
of view.
8.02. Permanent. The obligation of Permanent and the Bank to consummate
the Mergers is subject to the satisfaction and fulfillment of each of the
following conditions on or prior to the Effective Time, unless waived in writing
by Permanent:
(a) Representations and Warranties at Effective Time. Each of the
representations and warranties of ONB contained in this Agreement shall, subject
to the standards set out in the second paragraph of Section 5, be true, accurate
and correct on and as of the Effective Time as though the representations and
warranties had been made or given at and as of the Effective Time.
(b) Covenants. Each of the covenants and agreements of ONB shall have
been fulfilled or complied with from the date of this Agreement through and as
of the Effective Time.
(c) Deliveries at Closing. Permanent shall have received from ONB at
the Closing the items and documents, in form and content reasonably satisfactory
to Permanent, listed in Section 11.02(a) hereof.
(d) Registration Statement Effective. ONB shall have registered its
shares of common stock to be issued to stockholders of Permanent in accordance
with this Agreement with the SEC pursuant to the 1933 Act, and all state
securities and Blue Sky approvals, authorizations and exemptions required to
offer and sell such shares shall have been received by ONB. The Registration
Statement with respect thereto shall have been declared effective by the SEC and
no stop order shall have been issued or threatened. In addition, such shares of
ONB common stock shall be listed on the Nasdaq National Market System.
(e) Regulatory Approvals. All regulatory approvals required to
consummate the transactions contemplated hereby, shall have been obtained and
shall remain in full force and effect and all statutory waiting periods in
respect thereof shall have expired and no such approvals shall contain any
conditions, restrictions or requirements which the board of directors of
Permanent reasonably determines in good faith would (i) following the Effective
Time, have a Material Adverse Effect on Permanent or (ii) reduce the benefits of
the transactions contemplated hereby to such a degree that Permanent would not
have entered into this Agreement had such conditions, restrictions or
requirements been known at the date hereof.
(f) ONB Shareholder Approval. ONB, as the sole shareholder of Old
National Bank and Merger Corporation, shall have approved and adopted this
Agreement as required by applicable law and Old National Bank's Articles of
Association and Merger Corporation's Articles of Incorporation.
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(g) Permanent Stockholder Approval. The stockholders of Permanent shall
have approved and adopted this Agreement as required by applicable law and its
Certificate of Incorporation. Permanent, as the sole shareholder of the Bank,
shall have approved and adopted this Agreement as required by applicable law and
the Bank's Charter.
(h) Officers' Certificate. ONB shall have delivered to Permanent a
certificate signed by its Chairman or President and its Secretary, dated as of
the Effective Time, certifying that: (i) to the effect set out in Section
8.02(a), the representations and warranties of ONB contained in this Agreement
shall be true, accurate and correct on and as of the Effective Time; (ii) that
all the covenants of ONB have been complied with from the date of this Agreement
through and as of the Effective Time; and (iii) ONB has satisfied and fully
complied with all conditions necessary to make this Agreement effective as to
it.
(i) Tax Opinion. The Board of Directors of Permanent shall have
received a written opinion of the law firm of Krieg DeVault Alexander &
Capehart, LLP, dated as of the Effective Time, in form and content satisfactory
to Permanent, to the effect that the Mergers to be effected pursuant to this
Agreement will constitute a tax-free reorganization under the Code (as described
in Section 1.03 hereof) to each party hereto and to the stockholders of
Permanent, except with respect to cash received by Permanent's stockholders for
fractional shares resulting from application of the Exchange Ratio and pursuant
to Section 7.04(a)(i). In rendering such opinion, counsel may require and rely
upon customary representation letters of the parties hereto and rely upon
customary assumptions.
(j) Fairness Opinion. Permanent's investment banker shall have issued
(as of a date not later than the mailing date of the proxy statement-prospectus
relating to the Mergers to be mailed to the stockholders of Permanent) its
fairness opinion stating that the Exchange Ratio relating to the Mergers is fair
to the stockholders of Permanent from a financial point of view; provided, that
this condition precedent is effective only in the event that Heritage waives its
condition precedent in Section 8.02(i) hereof.
SECTION 9
TERMINATION OF MERGERS
9.01. Manner of Termination. This Agreement and the Mergers may be
terminated at any time prior to the Effective Time by written notice delivered
by ONB to Permanent, or by Permanent to ONB as follows:
(a) By ONB or Permanent, if:
(i) the Mergers contemplated by this Agreement have not
been consummated by September 30, 2000; provided,
however, that a party hereto in willful breach of or
willful default hereunder shall have no right to
terminate this Agreement pursuant to this Section
9.01(a)(i); or
(ii) the respective Boards of Directors of ONB and
Permanent mutually agree to terminate this Agreement;
or
51
<PAGE>
(iii) in the event a request is made to renegotiate the
Exchange Ratio and ONB and Permanent are unable to do
so to their mutual satisfaction within the time
allotted by and as contemplated by Section 2.01(c)
hereof.
(b) By ONB, if:
(i) at any time prior to the Effective Time, ONB's Board
of Directors reasonably determines, in the event of
either
(A) a breach by Permanent or the Bank of any
representation or warranty contained herein,
which breach cannot be or has not been cured
within thirty (30) days after the giving of
written notice to Permanent of such breach;
provided, however, that any such cure may
not result in a Material Adverse Effect or
an intentional breach of this Agreement; or
(B) a breach by Permanent or the Bank of any of
the covenants or agreements contained
herein, which breach cannot be or has not
been cured within thirty (30) days after the
giving of written notice to Permanent of
such breach; provided that a breach under
this clause (B) would be reasonably likely,
individually or in the aggregate with other
breaches, to result in a Material Adverse
Effect; provided, however, that any such
cure may not result in a Material Adverse
Effect; or
(ii) it shall reasonably determine that the Mergers
contemplated by this Agreement have become
impracticable by reason of commencement or threat of
any claim, litigation or proceeding against ONB,
Permanent, any Subsidiary, or any subsidiary of ONB,
or any director or officer of any of such entities
relating to this Agreement or the Mergers; or
(iii) there has been a material adverse change in the
business, assets, capitalization, financial condition
or results of operations of Permanent or any
Subsidiary taken as a whole as of the Effective Time
as compared to that in existence as of the date of
this Agreement other than any change resulting
primarily by reason of changes in banking laws or
regulations (or interpretations thereof), changes in
banking laws of general applicability or
interpretations thereof by courts or governmental
authorities, changes in generally accepted accounting
principles or regulatory accounting requirements
applicable to banks and their holding companies
generally, any modifications or changes to valuation
policies and practices in connection with the Mergers
or restructuring charges taken in connection with the
Mergers, in each case in accordance with generally
accepted accounting principles, effects of any action
taken with the prior written consent of ONB and
changes in the general level of interest rate or
conditions or circumstances that affect the banking
industry generally; or
52
<PAGE>
(iv) Permanent fulfills the requirements of Section 6.01
hereof but the stockholders of Permanent do not
approve and adopt this Agreement and the Company
Merger.
(c) By Permanent, if:
(i) at any time prior to the Effective Time, Permanent's
Board of Directors reasonably determines, in the
event of either
(A) a breach by ONB of any representation or
warranty contained herein, which breach
cannot be or has not been cured within
thirty (30) days after the giving of written
notice to ONB of such breach; or
(B) a breach by ONB, Old National Bank or Merger
Corporation of any of the covenants or
agreements contained herein, which breach
cannot be or has not been cured within
thirty (30) days after the giving of written
notice to ONB of such breach; provided that
a breach under this clause (B) would be
reasonably likely, individually or in the
aggregate with other breaches, to result in
a Material Adverse Effect on ONB; or
(ii) there has been a material adverse change in the
financial condition, results of operations, business,
assets or capitalization of HeritageONB on a
consolidated basis as of the Effective Time as
compared to that in existence on September 30, 1999,
other than any change resulting primarily by reason
of changes in banking laws or regulations (or
interpretations thereof), changes in banking and
similar laws of general applicability or
interpretations thereof by courts or governmental
authorities, changes in generally accepted accounting
principles or regulatory accounting requirements
applicable to banks and their holding companies
generally, any modifications or changes to valuation
policies and practices in connection with the Mergers
or restructuring charges taken in connection with the
Mergers, in each case in accordance with generally
accepted accounting principles, effects of any action
taken with the prior written consent of Permanent and
changes in the general level of interest rate or
conditions or circumstances that affect the banking
industry generally; or
(iii) it shall reasonably determine that the Mergers
contemplated by this Agreement have become
impracticable by reason of commencement or threat of
any material claim, litigation or proceeding against
ONB, Old National Bank or Merger Corporation relating
to this Agreement or the Mergers and which is likely
to have a Material Adverse Effect on ONB; or
(iv) Permanent fulfills the requirements of Section 6.01
hereof but the stockholders of Permanent do not
approve and adopt this Agreement and the Company
Merger; or
53
<PAGE>
(v) if the Average Price Per Share of ONB common stock is
less than $26.00, subject, however, to the following
three sentences. If Permanent elects to exercise its
termination right pursuant to this Section
9.01(c)(v), it shall give written notice to ONB
(provided that such notice of election to terminate
may be withdrawn at any time within the following
five-day period). During the five-day period
commencing with its receipt of such notice, ONB shall
have the option, at its discretion, to increase the
consideration to be received by the holders of
Permanent Common Stock hereunder, by adjusting the
Exchange Ratio (calculated to the nearest one
ten-thousandth) to equal (a) the quotient arrived at
by dividing (x) the sum of $85,427,011 plus the
Aggregate Strike Price (y) by the Total Outstanding
Shares by (b) the Average Price Per Share of ONB
common stock. If ONB so elects within such five-day
period, it shall give prompt written notice to
Permanent of such election and the revised Exchange
Ratio, whereupon no termination shall have occurred
pursuant to this Section 9.01(c)(v) and this
Agreement shall remain in effect in accordance with
its terms (except as the Exchange Ratio shall have
been so modified).
9.02. Effect of Termination. Upon termination by written notice, this
Agreement shall be of no further force or effect, and there shall be no further
obligations or restrictions on future activities on the part of ONB or Permanent
and their respective directors, officers, employees, agents and shareholders or
stockholders, except as provided in compliance with: (i) the confidentiality
provisions of this Agreement set forth in Section 6.09 hereof and the
Confidentiality Agreement by and between ONB and Permanent (the "Confidentiality
Agreement"); (ii) the payment of expenses set forth in Section 12.09 hereof and
(iii) the payment of the Termination Fee as provided by Section 6.23 hereof;
provided, however, that termination will not in any way release a breaching
party from liability for any willful breach of this Agreement giving rise to
such termination.
SECTION 10
EFFECTIVE TIME OF THE MERGERS
Upon the terms and subject to the conditions specified in this
Agreement, the Company Merger shall become effective at the close of business on
the day and at the time specified in the Articles of Merger of Permanent with
and into ONB as filed with the Indiana Secretary of State and the Delaware
Secretary of State ("Effective Time") and the Bank Merger shall become effective
on the date and at the time specified in the Articles of Combination of the Bank
with and into Old National Bank as filed with the OTS and the Comptroller of the
Currency. Unless otherwise mutually agreed to by the parties hereto, the
Effective Time shall occur on the later of (i) July 31, 2000 or (ii) the last
business day of the month following (a) the fulfillment of all conditions
precedent to the Mergers set forth in Section 8 of this Agreement and (b) the
expiration of all waiting periods in connection with the bank regulatory
applications filed for the approval of the Mergers.
54
<PAGE>
SECTION 11
CLOSING
11.01. Closing Date and Place. So long as all conditions precedent set
forth in Section 8 hereof have been satisfied and fulfilled, the closing of the
Mergers ("Closing") shall take place on the Effective Time at the law offices of
Krieg DeVault Alexander & Capehart, LLP, One Indiana Square, Suite 2800,
Indianapolis, Indiana 46204.
11.02. Deliveries. (a) At the Closing, ONB shall deliver to Permanent
the following:
(i) the officers' certificate contemplated by Section
8.02(g) hereof;
(ii) copies of all approvals by government regulatory
agencies necessary to consummate the Mergers;
(iii) copies of (A) the resolutions of the Board of
Directors of ONB, certified by the Secretary of ONB,
relative to the approval of this Agreement and (B)
the resolutions of the Boards of Directors and sole
shareholder of Old National Bank and Merger
Corporation, certified by their respective
Secretaries, relative to the approval of this
Agreement;
(iv) an opinion of its counsel dated as of the Effective
Time and substantially in form set forth in Exhibit B
attached hereto; and
(v) such other documents as Permanent or its legal
counsel may reasonably request.
(b) At the Closing, Permanent shall deliver to ONB the following:
(i) the officers' certificate contemplated by Section
8.01(g) hereof;
(ii) a list of Permanent's stockholders as of the
Effective Time certified by the President and
Secretary of Permanent;
(iii) copies of (A) the resolutions adopted by the Board of
Directors of Permanent certified by the Secretary of
Permanent, relative to the approval of this Agreement
and (B) the resolutions of the Board of Directors and
sole shareholder of the Bank, certified by its
President and Secretary, relative to the approval of
this Agreement;
(iv) an opinion of its counsel dated as of the Effective
Time and substantially in form set forth in Exhibit C
attached hereto; and
(v) such other documents as ONB or its legal counsel may
reasonably request.
55
<PAGE>
SECTION 12
MISCELLANEOUS
12.01. Effective Agreement. This Agreement shall be binding upon and
inure to the benefit of the respective parties hereto and their respective
successors and assigns; provided, however, that this Agreement may not be
assigned by any party hereto without the prior written consent of the other
parties hereto; provided, further, that no such extension, waiver or amendment
agreed to after authorization of this Agreement by the stockholders of Permanent
shall affect the rights of such stockholders in any manner which is materially
adverse to such stockholders or which would violate the federal securities laws.
The representations, warranties, covenants and agreements contained in this
Agreement are for the sole benefit of the parties hereto and their successors
and assigns, and they shall not be construed as conferring any rights on any
other persons except as specifically set forth in Sections 7.03, 7.04, and 7.06
hereof.
12.02. Waiver; Amendment. (a) The parties hereto may by an instrument
in writing: (i) extend the time for the performance of or otherwise amend any of
the covenants, conditions or agreements of the other parties under this
Agreement, except that the consideration to be received by the Permanent
stockholders shall not be decreased by such an amendment following the adoption
and approval of the Mergers and this Agreement by the Permanent stockholders;
(ii) waive any inaccuracies in the representations or warranties of the other
party contained in this Agreement or in any document delivered pursuant hereto
or thereto; (iii) waive the performance by the other party of any of the
covenants or agreements to be performed by it or them under this Agreement; or
(iv) waive the satisfaction or fulfillment of any condition, the nonsatisfaction
or nonfulfillment of which is a condition to the right of the party so waiving
to consummate the Mergers. The waiver by any party hereto of a breach of or
noncompliance with any provision of this Agreement shall not operate or be
construed as a continuing waiver or a waiver of any other or subsequent breach
or noncompliance hereunder.
(b) Subject to Section 12.01 hereof, this Agreement may be amended,
modified or supplemented only by a written agreement executed by the parties
hereto.
12.03. Notices. All notices, requests and other communications
hereunder shall be in writing (which shall include telecopier communication) and
shall be deemed to have been duly given if delivered by hand and receipted for,
sent by certified United States Mail, return receipt requested, first class
postage pre-paid, delivered by overnight express receipted delivery service or
telecopied if confirmed immediately thereafter by also mailing a copy of such
notice, request or other communication by certified United States Mail, return
receipt requested, with first class postage pre-paid as follows:
56
<PAGE>
If to ONB, Old National Bank or with a copy to (which shall not Merger
Corporation constitute notice):
Old National Bancorp Krieg DeVault Alexander & Capehart, LLP
420 Main Street One Indiana Square, Suite 2800
P.O. Box 718 Indianapolis, Indiana 46204-2017
Evansville, Indiana 47705 ATTN: Nicholas J. Chulos, Esq.
ATTN: Jeffrey L. Knight, Secretary Telephone: (317) 238-6224
and General Counsel Telecopier: (317) 636-1507
Telephone: (812) 464-1363
Telecopier: (812) 464-1567
If to Permanent or the Bank: with a copy to (which shall not
constitute notice):
Permanent Bancorp, Inc. Silver, Freedman & Taff, L.L.P.
101 SE Third Street 1100 New York Avenue, NW
Evansville, Indiana 47708 Seventh Floor
ATTN: Donald P. Weinzapfel, Washington, DC 20005
Chairman and Chief ATTN: Jeffrey M. Werthan, P.C.
Executive Officer Telephone: (202) 414-6100
Telephone: (812) 428-6800 Telecopier: (202) 682-0354
Telecopier: (812) 428-6812
or such substituted address or person as any of them have given to the other in
writing. All such notices, requests or other communications shall be effective:
(a) if delivered by hand, when delivered; (b) if mailed in the manner provided
herein, five (5) business days after deposit with the United States Postal
Service; (c) if delivered by overnight express delivery service, on the next
business day after deposit with such service; and (d) if by telecopier, on the
next business day if also confirmed by mail in the manner provided herein.
12.04. Headings. The headings in this Agreement have been inserted
solely for ease of reference and should not be considered in the interpretation
or construction of this Agreement.
12.05. Severability. In case any one or more of the provisions
contained herein shall, for any reason, be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of this Agreement, but this Agreement shall
be construed as if such invalid, illegal or unenforceable provision or
provisions had never been contained herein.
12.06. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute one and the same instrument.
12.07. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Indiana and applicable federal laws,
without reference to any choice of law provisions, principles or rules thereof
(whether of the State of Indiana or any other jurisdiction) that would cause the
application of any laws of any jurisdiction other than the State of Indiana.
12.08. Entire Agreement. This Agreement supersedes, terminates and
renders of no further force or effect all other prior or contemporaneous
understandings, commitments, representations, negotiations or agreements,
whether oral or written, among the parties hereto relating to the Mergers or
matters contemplated herein and constitutes the entire agreement between the
parties hereto, except for the Confidentiality Agreement, which shall continue
in full force and effect following the date hereof. The parties hereto agree
that each party and its counsel reviewed and revised this Agreement and that the
normal rule of construction to the effect that any ambiguities are to be
resolved against
57
<PAGE>
the drafting party shall not be employed in the interpretation of this Agreement
or any amendments or exhibits hereto.
12.09. Expenses. ONB, Old National Bank and Merger Corporation shall
pay its expenses incidental to the Mergers contemplated hereby, including all
expenses related to banking applications and filing fees with the SEC. Permanent
and the Bank shall pay its expenses incidental to the Mergers contemplated
hereby.
12.10 Certain References. Whenever in this Agreement a singular word is
used, it also shall include the plural wherever required by the context and
vice-versa. Except expressly stated otherwise, all references in this Agreement
to periods of days shall be construed to refer to calendar, not business, days.
The term "business day" shall mean any day except Saturday and Sunday when Old
National Bank is open for the transaction of business.
* * * * * * *
58
<PAGE>
IN WITNESS WHEREOF, ONB and Permanent have made and entered into this
Agreement as of the day and year first above written and have caused this
Agreement to be executed, attested in counterparts and delivered by their duly
authorized officers.
OLD NATIONAL BANCORP
By: /s/RONALD B. LANKFORD
----------------------------------
Ronald B. Lankford, President and
Chief Operating Officer
ATTEST:
By: /s/JEFFREY L. KNIGHT
--------------------------
Jeffrey L. Knight,
Corporate Secretary
OLD NATIONAL BANCORP
By: /s/MICHAEL R. HINTON
----------------------------------
Michael R. Hinton, President
ATTEST:
By: /s/GAIL A. LEHR
--------------------------
Gail A. Lehr, Secretary
MERGER CORPORATION I
By: /S/THOMAS F. CLAYTON
----------------------------------
Thomas F. Clayton, President
ATTEST:
By: /s/JEFFREY L. KNIGHT
--------------------------
Jeffrey L. Knight, Secretary
59
<PAGE>
PERMANENT BANCORP, INC.
By: /s/DONALD P. WEINZAPFEL
----------------------------------
Donald P. Weinzapfel, Chairman and
Chief Executive Officer
ATTEST:
By: /s/ROBERT A. CERN
--------------------------
Robert A. Cern, Secretary
PERMANENT BANK
By: /s/MURRY J. BROWN
----------------------------------
Murray J. Brown, Chairman,
President and Chief Executive
Officer
ATTEST:
By: /s/ROBERT A. CERN
--------------------------
Robert A. Cern, Secretary
60
Exhibit 20
NEWS RELEASE
Donald P. Weinzapfel
Chairman of the Board & FOR IMMEDIATE RELEASE
Chief Executive Officer February 1, 2000
Permanent Bancorp, Inc. FOR FURTHER INFORMATION
101 S.E. Third Street Don Weinzapfel
Evansville, IN 47708 (812) 437-2256
(812) 437-BANK
OLD NATIONAL BANCORP, INC. AND PERMANENT BANCORP, INC. PROVIDE FURTHER DETAILS
ON EXCHANGE RATIO FOR ACQUISITION ANNOUNCED DECEMBER 20, 1999.
On December 20, 1999, Old National Bancorp, Inc. (NASDAQ: OLDB) and Permanent
Bancorp, Inc. (NASDAQ: PERM) announced an agreement under which Old National
would acquire Permanent in an all stock transaction valued at approximately $92
million.
The agreement calls for a fixed price with the exchange ratio to be based on the
price of Old National stock at the time of the closing subject to adjustment.
The agreement provides for adjustments in the exchange ratio and the
renegotiation of the agreement under certain conditions. The following is a
description of the provisions of the agreement related to the exchange ratio.
Old National share prices have been adjusted to reflect the 5% stock dividend
payable to shareholders of record January 6, 2000.
o The assumed number of Permanent shares and vested options to
be exchanged in the transaction is approximately 4,432,742. At
a total purchase price of $92 million, this equates to a
projected price per Permanent share/option of approximately
$20.75.
o If the share price of Old National at the time of closing is
between $26.60 and $34.20, the number of shares of Old
National stock payable to Permanent shareholders would be
derived by dividing $92 million by the Old National share
price. Assuming the $20.75 value above, the exchange ratio per
Permanent share would range between a low of .6069 shares of
Old National at an Old National price of $34.20 to a high of
.7802 shares at an Old National price of $26.60.
o If the share price of Old National is less than $26.60, the
exchange ratio will be fixed at .7802 and the value of the
transaction will be less than $92 million. However, if the
share price of Old National is less than $24.70, Permanent may
terminate the agreement if Old National elects not to increase
the transaction value to $85.4 million.
o If the share price of Old National is greater than $34.20, the
exchange ratio will be fixed at .6069 and the value of the
transaction will be greater than $92 million. If the share
price of Old National is greater than $36.10, Old National may
request to renegotiate the exchange ratio and if the parties
are unable to agree to a new exchange ratio, Old National may
terminate the agreement.
o The value of he transaction may increase by up to
approximately $l.5 million depending upon the number of
Permanent options exchanged prior to the closing.
Old National & Permanent plan to complete the transaction in the third quarter
of 2000 pending all regulatory and shareholder approvals.
<PAGE>
Investors are urged to read the important information regarding the transaction
which will be disclosed in a registration statement filed by Old National with
the SEC. Investors can view the registration statement and other documents filed
by Old National and Permanent at the SEC's web site located at
http://www.sec.gov. Investors can obtain any of the documents incorporated by
reference in the registration statement free from Old National or Permanent, as
the case may be.
2
