AGREEMENT AND PLAN OF MERGER

 

THIS AGREEMENT AND PLAN OF MERGER (this “Agreement”) is dated to be effective as of the 24th day of January, 2012, by and between OLD NATIONAL BANCORP, an Indiana corporation (“ONB”), and INDIANA COMMUNITY BANCORP, an Indiana corporation (“ICB”).

 

W I T N E S S E T H:

 

 

 

 

 

 

 

 

1.01           The Merger.

 

(a)           General Description.  Upon the terms and subject to the conditions of this Agreement, at the Effective Time (as defined in Article IX hereof), ICB shall merge with and into and under the Articles of Incorporation of ONB (the “Merger”).  ONB shall survive the Merger (sometimes hereinafter referred to as the “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, Officers and Directors.  The name of the Surviving Corporation shall be “Old National Bancorp.”  Its principal office shall be located at One Main Street, Evansville, Vanderburgh County, Indiana.  The officers of ONB serving at the Effective Time shall continue to serve as the officers of the Surviving Corporation, until such time as their successors shall have been duly elected and have qualified or until their earlier resignation, death or removal from office.  The directors of the Surviving Corporation following the Effective Time shall be those individuals serving as directors of ONB at the Effective Time until such time as their successors have been duly elected and have qualified or until their earlier resignation, death, or removal as a director.

 

(c)           Articles of Incorporation and By-Laws.  The Articles of Incorporation and By-Laws of ONB in existence at the Effective Time shall remain the Articles of Incorporation and By-Laws of the Surviving Corporation following the Effective Time, until such Articles of Incorporation and By-Laws shall be further amended as provided by applicable law.

 

(d)           Effect of the Merger.  At the Effective Time, the title to all assets, real estate and other property owned by ICB shall vest in Surviving Corporation as set forth in Indiana Code Section 23-1-40-6, as amended, without reversion or impairment. At the Effective Time, all liabilities of ICB shall be assumed by Surviving Corporation as set forth in Indiana Code Section 23-1-40-6, as amended.

 

(e)           Integration.  At the Effective Time and subject to the terms and conditions of this Agreement, the parties hereto currently intend to effectuate, or cause to be effectuated, the Merger, pursuant to Articles of Merger, substantially in the form attached hereto as Exhibit 1.01(e)(i), and a Plan of Merger, substantially in the form attached hereto as  Exhibit 1.01(e)(ii). The parties agree to cooperate and to take all reasonable actions prior to or following the Effective Time, including executing all requisite documentation, as may be reasonably necessary to effect the Merger.

 

1.02           Reservation of Right to Revise Structure.

 

 

1.03           Tax Free Reorganization.  ONB and ICB intend for the Merger to qualify as a reorganization within the meaning of Section 368(a) and related sections of the Internal Revenue Code of 1986, as amended (the “Code”), and that this Agreement shall constitute a “plan of reorganization” for purposes of Sections 354 and 361 of the Code, and agree to cooperate and to take such actions as may be reasonably necessary to assure such result.

 

1.04           Absence of Control.  Subject to any specific provisions of the Agreement, it is the intent of the parties to this Agreement that neither ONB nor ICB by reason of this Agreement shall be deemed (until consummation of the transactions contemplated here) to control, directly or indirectly, the other party or any of its respective Subsidiaries (as such term is defined below) and shall not exercise or be deemed to exercise, directly or indirectly, a controlling influence over the management or policies of such other party or any of its respective Subsidiaries.

 

1.05           Bank Merger.  ICB and ONB agree to take all action necessary and appropriate, including entering into a plan of merger (the “Bank Merger Agreement”) substantially in the form attached hereto as Exhibit 1.05, to cause IBTC to merge with and into Old National Bank (the “Bank Merger”) in accordance with the applicable laws and regulations effective simultaneous with the consummation of the Merger.  At the effective time of the Bank Merger, the separate corporate existence of IBTC will terminate.  Old National Bank will be the surviving bank and will continue its corporate existence under applicable law.  The articles of association Old National Bank, as then in effect, will be the articles of association of the surviving bank, and the By-Laws of Old National Bank, as then in effect, will be the By-Laws of the surviving bank.

 

1.06           No Dissenters’ Rights.  Shareholders of ICB are not entitled to any dissenters’ rights under Chapter 44 of the Indiana Business Corporation Law, as amended, since ICB Common Stock is quoted and traded on Nasdaq.  ICB shall take no action which would result in the loss of such listing prior to the Effective Time.

 

 

 

2.01           Consideration.

 

(a)           Subject to the terms and conditions of this Agreement, at the Effective Time, each share of ICB Common Stock issued and outstanding immediately prior to the Effective Time (other than (i) shares held as treasury stock of ICB and (ii) shares held directly or indirectly by ONB, except shares held in a fiduciary capacity or in satisfaction of a debt previously contracted, if any) shall become and be converted into the right to receive in accordance with this Article, one and ninety hundredths (1.90) shares of common stock (the “Exchange Ratio”) (as adjusted in accordance with the terms of this Agreement), without par value, of ONB (“ONB Common Stock”) (the “Merger Consideration”).

 

(b)           Stock Options and Restricted Stock.  At the Effective Time, each outstanding option to purchase ICB common stock (an “ICB Stock Option”) without any action on the part of any holder thereof, shall be converted automatically into an option to purchase a number of shares of common stock of ONB (each, an “ONB Stock Option”) equal to the product (rounded

 

down to the nearest whole share) of (A) the number of shares of ICB common stock subject to such ICB Stock Option and (B) the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (1) the exercise price of such ICB Stock Option divided by (2) the Exchange Ratio.  Except as specifically provided above, following the Effective Time, each ONB Stock Option will become fully vested, and shall otherwise continue to be governed by the same terms and conditions as were applicable under the related ICB Stock Option immediately prior to the Effective Time.  As soon as practicable after the Effective Time, ONB shall file an appropriate registration statement with respect to the shares of ONB Common Stock subject to ONB Stock Options and shall use its reasonable best efforts to maintain the effectiveness of the registration statement (and maintain the current status of the prospectus contained therein) for so long as such options remain outstanding.  Subject to any action required by ICB’s Stock Option Committee and any consent required by any holder of restricted stock, shares of restricted stock granted under the Indiana Community Bancorp 2010 Stock and Incentive Plan to persons after other than John K. Keach, Jr. that are subject to transfer restrictions immediately prior to the Closing shall have those restrictions lapse at Closing and such shares shall convert into the Merger Consideration as provided in this Article II.  Shares of restricted stock held by John K. Keach, Jr. at the Closing shall be converted into the Merger Consideration as provided in this Article II, but such Merger Consideration shall continue to be held subject to the vesting and transferability restrictions set forth in the award agreements for such restricted stock and shall continue to be subject to the terms of the Indiana Community Bancorp 2010 Stock Option and Incentive Plan.

 

(c)           ICB TARP Preferred Stock and ICB TARP Warrant.

 

(i)           Immediately prior to or contemporaneously with the Effective Time of the Merger, ONB will fund the redemption by ICB, or the purchase by ONB, from the United States Department of the Treasury (“UST”) of each share of the ICB Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the “ICB TARP Preferred Stock”) issued and outstanding on such date (such purchase, the “TARP Purchase”).  ONB may, but shall not be required to, fund the purchase by ONB or ICB of the warrant issued on December 12, 2008 to the UST in connection with the issuance of the ICB TARP Preferred Stock (the “ICB TARP Warrant”). The method of funding the TARP Purchase shall be mutually agreed to by ONB and ICB subject to any formal or informal UST requirements.

 

(ii)           In the event Section 7.01(o) is waived by ONB and each issued and outstanding share of the ICB TARP Preferred Stock is not purchased or redeemed prior to or  contemporaneously with the Merger, then each share of the ICB TARP Preferred Stock issued and outstanding immediately prior to the Effective Time (other than any shares of ICB TARP Preferred Stock to be cancelled in accordance herewith) shall no longer be outstanding and shall as of the Effective Time automatically be converted into and shall thereafter represent the right to receive, subject to the other provisions of this Article II, one share of ONB preferred stock to be designated, prior to the Closing Date (as defined in Article IX of this Agreement), as Fixed Rate Cumulative Perpetual Preferred Stock, Series A, stated liquidation amount $1,000 per share (the “ONB TARP Preferred Stock”), and otherwise having rights, preferences, privileges and voting powers such that the rights, preferences, privileges and voting powers of the ICB TARP

 

Preferred Stock are not adversely affected by such conversion and having rights, preferences and privileges and voting powers, and limitations and restrictions that, taken as a whole, are not materially less favorable than the rights, preferences, privileges and voting powers, and limitations and restrictions of the ICB TARP Preferred Stock immediately prior to such conversion, taken as a whole.

 

(iii)           If ONB does not purchase the ICB TARP Warrant prior to or contemporaneously with the Effective Time, then the ICB TARP Warrant shall, by virtue of the Merger and without any action on the part of the holder thereof, cease to represent a warrant to purchase ICB Common Stock and will be converted automatically into a warrant to purchase ONB Common Stock (the “ONB TARP Warrant”), with such adjustments to the number of ONB shares into which the warrant is convertible and the exercise price in accordance with the terms of the ICB TARP Warrant, and ONB will assume such warrant subject to its terms.

 

2.02           Adjustments to Exchange Ratio.  At the Effective Time, the Exchange Ratio shall be adjusted, if applicable, as follows (which Exchange Ratio, as adjusted as provided below and in Section 2.05, shall become the “Exchange Ratio” for purposes of this Agreement):

 

(a)           Shareholders’ Equity.  If as of the end of the month prior to the Effective Time, the ICB Consolidated Shareholders’ Equity (as defined in Section 7.01(n) hereof) is less than $65.862 million, the Exchange Ratio shall be decreased to a quotient determined by dividing the Adjusted Purchase Price by the total number of shares of ICB Common Stock outstanding at the Effective Time, and further dividing that number by the Average ONB Closing Price.

 

As used in this Section 2.02(a), the following terms shall have the meanings indicated below:

 

“Adjusted Purchase Price” shall be equal to (x) the Purchase Price less (y) the difference between $65.862 million and the ICB Consolidated Shareholders’ Equity as of the end of the month prior to the Effective Time multiplied by 120%.

 

“Average ONB Closing Price” shall mean the average of the per share closing prices of a share of ONB Common Stock as quoted on the New York Stock Exchange (“NYSE”) during the ten (10) trading days preceding the fifth (5th) calendar day preceding the Effective Time.

 

“Purchase Price” shall be equal to the Exchange Ratio in effect at the time of adjustment multiplied by the Average ONB Closing Price multiplied by the total number of shares of ICB Common Stock outstanding as of the Effective Time.

 

(b)           Delinquent Loans.  If the aggregate amount of ICB Delinquent Loans (excluding in this calculation all Special Loans as defined in Section 2.02(c)) as of the tenth (10th) day prior to the Effective Time (the “Computation Date”) is greater than $34.5 million, the Exchange Ratio shall be decreased by the amount set forth on Exhibit 2.02(b).  The adjustment to the Exchange Ratio under this Section 2.02(b) shall be made following any adjustments to the Exchange Ratio pursuant to Sections 2.02(a) and 2.05 hereof.  “ICB Delinquent Loans” shall mean the total of (i) all loans with principal or interest that are 30 to 89 days past due, (ii) all loans with principal or interest that are at least 90 days past due and still accruing, (iii) all loans

 

with principal or interest that are nonaccruing, (iv) restructured and impaired loans, (v) other real estate owned, (vi) net charge offs from the date of this Agreement through the Computation Date, and (vii) write-downs of other real estate owned from the date of this Agreement through the Computation Date.

 

(c)           Special Loans.  If the credit mark applied to the Special Loans (as defined below) using the reserves related to the Special Loans as of December 31, 2011, and excluding any charge-offs related to the Special Loans after December 31, 2011, as determined by ONB, in a manner consistent with the methodology and using the assumptions ONB used to determine such credit mark as of the date of this Agreement as shared with ICB, as of the Computation Date (the “Credit Mark”) is (i) less than $31.982 million or (ii) greater than $33.982 million, the Exchange Ratio shall be adjusted as set forth on Exhibit 2.02(c).  The adjustment to the Exchange Ratio under this Section 2.02(c) shall be made following any adjustments to the Exchange Ratio pursuant to Sections 2.02(a), 2.02(b) and 2.05 hereof.  “Special Loans” shall mean the loans that are set forth on the ONB Disclosure Schedule (as defined in Article IV of this Agreement).

 

(d)          In no event shall the cumulative adjustment to the Exchange Ratio under Sections 2.02(b) and 2.02(c) exceed a decrease of 0.5604 and in such case the decrease to the Exchange Ratio shall be 0.5604 applied following any adjustments to the Exchange Ratio pursuant to Sections 2.02(a) and 2.05.

 

2.03           Fractional Shares.  Notwithstanding any other provision in this Agreement, no fractional shares of ONB Common Stock and no certificates or scrip therefor, or other evidence of ownership thereof, will be issued in the Merger; instead, ONB shall pay to each holder of ICB Common Stock who otherwise would be entitled to a fractional share of ONB Common Stock an amount in cash (without interest) determined by multiplying such fraction by the by the Average ONB Closing Price.

 

2.04           Exchange Procedures.

 

(a)           At and after the Effective Time, each certificate representing shares of ICB Common Stock shall represent only the right to receive the Merger Consideration in accordance with the terms of this Agreement.

 

(b)           At or prior to the Effective Time, ONB shall reserve a sufficient number of shares of ONB Common Stock to be issued as part of the Merger Consideration.  As promptly as practicable after the Effective Time, but in no event more than five business days thereafter, ONB shall mail to each holder of ICB Common Stock a letter of transmittal providing instructions as to the transmittal to ONB of certificates representing shares of ICB Common Stock and the issuance of shares of ONB Common Stock in exchange therefor pursuant to the terms of this Agreement.

 

(c)           ONB shall cause a certificate representing that number of whole shares of ONB Common Stock that each holder of ICB Common Stock has the right to receive pursuant to Section 2.01 and a check in the amount of any cash in lieu of fractional shares or dividends or distributions which such holder shall be entitled to receive, to be delivered to such shareholder upon delivery to ONB of certificates representing such shares of ICB Common Stock (“Old Certificates”) (or bond or other indemnity satisfactory to ONB if any of such certificates are lost,

 

stolen or destroyed) owned by such shareholder accompanied by a properly completed and executed letter of transmittal, as in the form and substance satisfactory to ONB.  No interest will be paid on any Merger Consideration that any such holder shall be entitled to receive pursuant to this Article II upon such delivery.

 

(d)           No dividends or other distributions on ONB Common Stock with a record date occurring after the Effective Time shall be paid to the holder of any unsurrendered Old Certificate representing shares of ICB Common Stock converted in the Merger into the right to receive shares of such ONB Common Stock until the holder thereof surrenders such Old Certificates in accordance with this Section 2.04. After becoming so entitled in accordance with this Section 2.04, the record holder thereof also shall be entitled to receive any such dividends or other distributions, without any interest thereon, which theretofore had become payable with respect to shares of ONB Common Stock such holder had the right to receive upon surrender of the Old Certificate.

 

(e)           The stock transfer books of ICB shall be closed immediately upon the Effective Time and from and after the Effective Time there shall be no transfers on the stock transfer records of ICB of any shares of ICB Common Stock. If, after the Effective Time, Old Certificates are presented to ONB, they shall be canceled and exchanged for the Merger Consideration deliverable in respect thereof pursuant to this Agreement in accordance with the procedures set forth in this Section 2.04.

 

(f)           ONB shall be entitled to rely upon ICB’s stock transfer books to establish the identity of those individuals, partnerships, corporations, trusts, joint ventures, organizations or other entities (each, a “Person”) entitled to receive the Merger Consideration, which books shall be conclusive with respect thereto. In the event of a dispute with respect to ownership of stock represented by any Old Certificate, ONB shall be entitled to deposit any Merger Consideration represented thereby in escrow with an independent third party and thereafter be relieved from any and all liability with respect to any claims thereto.

 

(g)           If any Old Certificate shall have been lost, stolen, or destroyed, upon the making of an affidavit of that fact by the Person claiming such Old Certificate to be lost, stolen, or destroyed and, if required by ONB, the posting by such Person of a bond or other indemnity satisfactory to ONB as indemnity against any claim that may be made against it with respect to such Old Certificate, ONB will issue in exchange for such lost, stolen, or destroyed Old Certificate the Merger Consideration deliverable in respect thereof pursuant to Section 2.01 hereof.

 

(h)           Notwithstanding anything in this Agreement to the contrary, at the Effective Time, all shares of ICB Common Stock that are held as treasury stock of ICB or owned by ONB (other than shares held in a fiduciary capacity or in satisfaction of a debt previously contracted) shall be cancelled and shall cease to exist and no stock of ICB or other consideration shall be exchanged therefor.

 

(i)           Notwithstanding the foregoing, no party hereto shall be liable to any former holder of ICB Common Stock for any amount properly delivered to a public official pursuant to applicable abandoned property, escheat or similar laws.

 

2.05           Anti-Dilution Adjustments.  If ONB changes (or establishes a record date for changing) the number of shares of ONB Common Stock issued and outstanding prior to the Effective Time by way of a stock split, stock dividend, recapitalization or similar transaction with respect to the outstanding ONB Common Stock, and the record date therefor shall be prior to the Effective Time, the Exchange Ratio shall be adjusted so the shareholders of ICB at the Effective Time shall receive, in the aggregate, such number of shares of ONB Common Stock representing the same percentage of outstanding shares of ONB Common Stock as would have been represented by the number of shares of ONB Common Stock the shareholders of ICB would have received if any of the foregoing actions had not occurred.  No adjustment shall be made under this Section 2.05 solely as a result of ONB issuing additional shares of ONB Common Stock provided it receives fair market value consideration for such shares or such shares are issued in connection with the ONB Plans (as hereinafter defined).

 

 

 

On or prior to the date hereof, ICB has delivered to ONB a schedule (the “ICB 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 Article III or to one or more of its covenants contained in Article V.

 

 

 

 

Accordingly, ICB hereby represents and warrants to ONB as follows, except as set forth in its Disclosure Schedule:

 

3.01           Organization and Authority.

 

(a)           ICB is a corporation duly organized and validly existing under the laws of the state of Indiana and is a registered bank holding company under the BHC Act.  ICB 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. ICB has previously provided ONB with a complete list of its Subsidiaries.  Except for its Subsidiaries, ICB owns no voting stock or equity securities of any corporation, partnership, association or other entity.

 

(b)           IBTC is a bank chartered and existing under the laws of the State of Indiana, which is a member of the Federal Reserve System.  IBTC has full power and authority (corporate and otherwise) to own and lease its properties as presently owned and leased and to conduct its business in the manner and by the means utilized as of the date hereof.  Except as set forth in the ICB Disclosure Schedule, IBTC owns no voting stock or equity securities of any corporation, partnership, association or other entity.

 

(c)           Each of ICB’s Subsidiaries other than IBTC is duly organized and validly existing under the laws of its jurisdiction of organization, and has full power and authority (corporate and otherwise) to own and lease its properties as presently owned and leased and to conduct its business in the manner and by the means utilized as of the date hereof.

 

3.02           Authorization.

 

(a)           ICB 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 Sections 7.02(e) and (f) hereof. As of the date hereof, ICB is not aware of any reason why the approvals set forth in Section 7.02(e) will not be received in a timely manner and without the imposition of a condition, restriction or requirement of the type described in Section 7.01(e).  This Agreement and its execution and delivery by ICB have been duly authorized and approved by the Board of Directors of ICB and, assuming due execution and delivery by ONB, constitutes a valid and binding obligation of ICB, subject to the fulfillment of the conditions precedent set forth in Section 7.02 hereof, and is enforceable in accordance with its terms, except to the extent limited by general principles of equity and public policy and by bankruptcy,

 

insolvency, fraudulent transfer, reorganization, liquidation, moratorium, readjustment of debt or other laws of general application relating to or affecting the enforcement of creditors’ rights.

 

(b)           Neither the execution of this Agreement nor consummation of the Merger contemplated hereby: (i) conflicts with or violates the Articles of Incorporation or By-Laws of ICB or the charter documents of any of ICB’s Subsidiaries; (ii) conflicts with or violates any local, state, federal or foreign law, statute, ordinance, rule or regulation (provided that the approvals of or filings with applicable government regulatory agencies or authorities required for consummation of the Merger are obtained) or any court or administrative judgment, order, injunction, writ or decree; (iii) conflicts with, results in a breach of or constitutes a default under any note, bond, indenture, mortgage, deed of trust, license, lease, contract, agreement, arrangement, commitment or other instrument to which ICB or any of its Subsidiaries is a party or by which ICB or any of its Subsidiaries is subject or bound; (iv) results in the creation of or gives any Person the right to create any lien, charge, claim, encumbrance or security interest, or results in the creation of any other rights or claims of any other party (other than ONB) or any other adverse interest, upon any right, property or asset of ICB or any of its Subsidiaries which would be material to ICB; or (v) terminates or gives any Person 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 ICB or any of its Subsidiaries is bound or with respect to which ICB or any of its Subsidiaries 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, antitrust and corporation statutes, all as amended, and the rules and regulations promulgated thereunder, and the consent of the UST to the redemption by ICB, or the purchase by ONB, of all of the issued and outstanding ICB TARP Preferred Stock from the UST, no notice to, filing with, exemption by or consent, authorization or approval of any governmental agency or body is necessary for consummation of the Merger by ICB.

 

3.03           Capitalization.

 

(a)           The authorized capital stock of ICB as of the date hereof consists, and at the Effective Time will consist, of 15,000,000 shares of ICB Common Stock, of which 3,422,379 shares are issued and outstanding as of the date hereof, and 2,000,000 shares of preferred stock, of which 21,500 shares are designated as Fixed Rate Cumulative Perpetual Preferred Stock, Series A, with a liquidation preference of $1,000 per share (the “ICB TARP Preferred Stock”), all of which shares have been issued to the UST pursuant to the Capital Purchase Program.  Additionally, options to purchase 44,573 shares of ICB Common Stock are outstanding under the Indiana Community Bancorp 1995 Stock Option Plan, options to purchase 4,161 shares of ICB Common Stock are outstanding under the Indiana Community Bancorp 1999 Stock Option Plan, options to purchase 185,214 shares of ICB Common Stock are outstanding under the Indiana Community Bancorp 2001 Stock Option Plan and 39,000 shares of restricted stock are outstanding under the 2010 Stock Option and Incentive Plan (each, an “ICB Stock Option Plan” and, collectively, the “ICB Stock Option Plans”), and a warrant to purchase 188,707 shares of ICB Common Stock at a price of $17.09 per share has been issued to the UST pursuant to the Capital Purchase Program (the “ICB TARP Warrant”).  Such issued and outstanding shares of ICB Common Stock have been duly and validly authorized by all necessary corporate action of

 

ICB, are validly issued, fully paid and nonassessable and have not been issued in violation of any pre-emptive rights of any present or former ICB shareholder. Except as set forth in the ICB Disclosure Schedule, ICB has no capital stock authorized, issued or outstanding other than as described in this Section 3.03(a) and has no intention or obligation to authorize or issue any other capital stock or any additional shares of ICB Common Stock. Each share of ICB Common Stock is entitled to one vote per share. A description of the ICB Common Stock is contained in the Articles of Incorporation of ICB.

 

(b)           All of the issued and outstanding shares of capital stock or other equity ownership interests of each Subsidiary of ICB are owned by ICB 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 with respect thereto.

 

(c)           Except for the options and restricted shares issued under the ICB Stock Option Plans and the ICB TARP Warrant, and except as set forth in the ICB Disclosure Schedule, there are no options, warrants, commitments, calls, puts, agreements, understandings, arrangements or subscription rights relating to any shares of ICB Common Stock or any of ICB’s Subsidiaries, or any securities convertible into or representing the right to purchase or otherwise acquire any common stock or debt securities of ICB or its Subsidiaries, by which ICB is or may become bound. ICB does not have any outstanding contractual or other obligation to repurchase, redeem or otherwise acquire any of the issued and outstanding shares of ICB Common Stock. To the knowledge of ICB, there are no voting trusts, voting arrangements, buy-sell agreements or similar arrangements affecting the capital stock of ICB or its Subsidiaries.

 

(d)           Except as disclosed in its public filings with the Securities and Exchange Commission (“SEC”), ICB has no knowledge of any Person which beneficially owns (as defined in Rule 13d-3 under the Securities Exchange Act of 1934 (the “1934 Act”)) 5% or more of the outstanding shares of ICB Common Stock.

 

3.04           Organizational Documents.  The Articles of Incorporation and By-Laws of ICB and any similar governing documents for each of ICB’s Subsidiaries, representing true, accurate and complete copies of such corporate documents in effect as of the date of this Agreement, have been delivered to ONB.

 

3.05           Compliance with Law.

 

(a)           None of ICB or any of its Subsidiaries is currently in violation of, and since January 1, 2008, none has been in violation of, any local, state, federal or foreign law, statute, regulation, rule, ordinance, order, restriction or requirement, and none is in violation of any order, injunction, judgment, writ or decree of any court or government agency or body (collectively, the “Law”), except where such violation would not have a Material Adverse Effect.  ICB and its Subsidiaries possess and hold all licenses, franchises, permits, certificates and other authorizations necessary for the continued conduct of their business without interference or interruption, except where the failure to possess and hold the same would not have a Material Adverse Effect, and such licenses, franchises, permits, certificates and authorizations are transferable (to the extent required) to ONB at the Effective Time without any restrictions or

 

limitations thereon or the need to obtain any consents of government agencies or other third parties other than as set forth in this Agreement.

 

(b)           Since the enactment of the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), ICB has been and is in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act. The Disclosure Schedule sets forth, as of the date hereof, a schedule of all officers and directors of ICB who have outstanding loans from ICB or any of its Subsidiaries, and there has been no default on, or forgiveness or waiver of, in whole or in part, any such loan during the two (2) years immediately preceding the date hereof.

 

(c)           All of the existing offices and branches of IBTC have been legally authorized and established in accordance with all applicable federal, state and local laws, statutes, regulations, rules, ordinances, orders, restrictions and requirements, except such as would not have a Material Adverse Effect.  IBTC has no approved but unopened offices or branches.

 

3.06           Accuracy of Statements Made and Materials Provided to ONB.  No representation, warranty or other statement made, or any information provided, by ICB in this Agreement or, in the ICB Disclosure Schedule (and any update thereto) or provided by ICB to ONB and in the course of ONB’s due diligence investigation, and no written information which has been or shall be supplied by ICB with respect to its financial condition, results of operations, business, assets, capital or directors and officers for inclusion in the proxy statement-prospectus relating to the Merger, contains or shall contain (in the case of information relating to the proxy statement-prospectus at the time it is first mailed to ICB’s shareholders) any untrue statement of material fact or omits or shall omit to state a material fact necessary to make the statements contained herein or therein, in light of the circumstances in which they are made, not false or misleading, except that no representation or warranty has been made by ICB with respect to statements made or incorporated by reference in the Form S-4 or the proxy statement-prospectus therein based on information supplied by ONB specifically for inclusion or incorporation by reference in the Form S-4 or the proxy statement-prospectus therein.

 

3.07           Litigation and Pending Proceedings.   Except as disclosed in its SEC Reports as of the date of this Agreement or set forth in the ICB Disclosure Schedule:

 

(a)           Except for lawsuits involving collection of delinquent accounts and lawsuits which would not have a Material Adverse Effect on ICB, there are no claims, actions, suits, proceedings, mediations, arbitrations or investigations pending and served against ICB or any of its Subsidiaries or, to the knowledge of ICB or any of its Subsidiaries, threatened in any court or before any government agency or authority, arbitration panel or otherwise against ICB or any of its Subsidiaries.  ICB does not have knowledge of a basis for any claim, action, suit, proceeding, litigation, arbitration or investigation against ICB or any of its Subsidiaries.

 

(b)           Neither ICB nor any of its Subsidiaries is: (i) subject to any material outstanding judgment, order, writ, injunction or decree of any court, arbitration panel or governmental agency or authority; (ii) presently charged with or, to the knowledge of ICB, under governmental investigation with respect to, any actual or alleged material violations of any law, statute, rule, regulation or ordinance; or (iii) the subject of any material pending or, to the knowledge of ICB,

 

threatened proceeding by any government regulatory agency or authority having jurisdiction over their respective business, assets, capital, properties or operations.

 

3.08           Financial Statements and Reports.

 

(a)           ICB has made available to ONB copies of the following financial statements and reports of ICB and its Subsidiaries, including the notes thereto (collectively, the “ICB Financial Statements”):

 

 

3.09           Material Contracts.

 

(a)           Except for contracts reflected as exhibits to its reports and other documents required to be filed under the 1934 Act and the Securities Act of 1933 (the “1933 Act”) (collectively, the “SEC Reports”), including ICB’s Annual Report on Form 10-K for the year ended December 31, 2010, and Quarterly Report on Form 10-Q for the quarter ended September 30, 2011, or as set forth in the ICB Disclosure Schedule, as of the date of this Agreement, neither ICB nor any of its Subsidiaries, nor any of their respective assets, businesses, or operations, is a party to, or is bound or affected by, or receives benefits under, (i) any contract relating to the borrowing of money by ICB or any of its Subsidiaries or the guarantee by ICB or any of its Subsidiaries of any such obligation (other than contracts pertaining to fully-secured repurchase

 

agreements, and trade payables, and contracts relating to borrowings or guarantees made in the ordinary course of business), (ii) any contract containing covenants that limit the ability of ICB or any of its Subsidiaries to compete in any line of business or with any Person, or to hire or engage the services of any Person, or that involve any restriction of the geographic area in which, or method by which, ICB or any of its Subsidiaries may carry on its business (other than as may be required by Law or any Governmental Authority) (as each are hereinafter defined), or any contract that requires it or any of its Subsidiaries to deal exclusively or on a “sole source” basis with another party to such contract with respect to the subject matter of such contract, (iii) any contract for, with respect to, or that contemplates, a possible merger, consolidation, reorganization, recapitalization or other business combination, or asset sale or sale of equity securities not in the ordinary course of business consistent with past practice, with respect to ICB or any of its Subsidiaries, (iv) any other contract or amendment thereto that would be required to be filed as an exhibit to any SEC Report (as described in Items 601(b)(4) and 601(b)(10) of Regulation S-K under the 1933 Act) that has not been filed as an exhibit to or incorporated by reference in ICB’s SEC Reports filed prior to the date of this Agreement, (v) any lease of real or personal property providing for annual lease payments by or to ICB or its Subsidiaries in excess of $100,000 per annum other than financing leases entered into in the ordinary course of business in which ICB or any of its Subsidiaries is the lessor, or (vi) any contract that involves expenditures or receipts of ICB or any of its Subsidiaries in excess of $100,000 per year not entered into in the ordinary course of business consistent with past practice. The contracts of the type described in the preceding sentence, whether or not in effect as of the date of this Agreement, shall be deemed “Material Contracts” hereunder. With respect to each of ICB’s Material Contracts (i) that is reflected as an exhibit to any SEC Report, (ii) would be required under Items 601(b)(4) and 601(b)(10) of Regulation S-K under the 1933 Act to be filed as an exhibit to any of its SEC Reports or (iii) that is disclosed in the ICB Disclosure Schedule, or would be required to be so disclosed if in effect on the date of this Agreement: (A) each such Material Contract is in full force and effect; (B) neither ICB nor any of its Subsidiaries is in material default thereunder with respect to each Material Contract, as such term or concept is defined in each such Material Contract; (C) neither ICB nor any of its Subsidiaries has repudiated or waived any material provision of any such Material Contract; and (D) no other party to any such Material Contract is, to ICB’s knowledge, in material default in any material respect. True copies of all Material Contracts, including all amendments and supplements thereto, that are not filed as exhibits to SEC Reports are attached to the ICB Disclosure Schedule.

 

(b)           Neither ICB nor any of its Subsidiaries have entered into any interest rate swaps, caps, floors, option agreements, futures and forward contracts, or other similar risk management arrangements, whether entered into for ICB’s own account or for the account of one or more of its Subsidiaries or their respective customers.

 

3.10           Absence of Undisclosed Liabilities.   Except as provided in the ICB Financial Statements or in the ICB Disclosure Schedule, and except for unfunded loan commitments and obligations on letters of credit to customers of ICB’s Subsidiaries made in the ordinary course of business, except for trade payables incurred in the ordinary course of such Subsidiaries’ business, and except for the transactions contemplated by this Agreement and obligations for services rendered pursuant thereto, or any other transactions which would not result in a material liability, none of ICB or any of its Subsidiaries has, nor will have at the Effective Time, any obligation, agreement, contract, commitment, liability, lease or license which exceeds $75,000

 

individually, or any obligation, agreement, contract, commitment, liability, lease or license made outside of the ordinary course of business, except where the aggregate of the amount due under such obligations, agreements, contracts, commitments, liabilities, leases or licenses would not have a Material Adverse Effect, 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. None of ICB or any of its Subsidiaries is delinquent in the payment of any amount due pursuant to any trade payable in any material respect, and each has properly accrued for such payables in accordance with GAAP, except where the failure to so accrue would not constitute a Material Adverse Effect.

 

3.11           Title to Properties.  Except as described in this Section 3.11 or the ICB Disclosure Schedule:

 

(a)           ICB or one of its Subsidiaries, 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 in the ICB Financial Statements as of September 30, 2011; good and marketable title to all personal property reflected in the ICB Financial Statements as of September 30, 2011, other than personal property disposed of in the ordinary course of business since September 30, 2011; good and marketable 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 ICB or any of its Subsidiaries purports to own or which ICB or any of its Subsidiaries uses in its respective business and which are in either case material to its respective business; good and marketable title to, or right to use by terms of a valid and enforceable lease or contract, all other property used in its respective business to the extent material thereto; and good and marketable title to all material property and assets acquired and not disposed of or leased since September 30, 2011.  All of such properties and assets are owned by ICB or its Subsidiaries free and clear of all land or conditional sales contracts, mortgages, liens, pledges, restrictions, options, security, interests, charges, claims, rights of third parties or encumbrances of any nature except: (i) as set forth in the ICB Disclosure Schedule; (ii) as specifically noted in reasonable detail in the ICB 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 ICB on a consolidated basis and which do not detract from the value or materially interfere with the present or contemplated use of any of the properties subject thereto or otherwise materially impair the use thereof for the purposes for which they are held or used. All real property owned or, to the knowledge of ICB, leased by ICB or its Subsidiaries is in compliance in all material respects with all applicable zoning and land use laws.  To ICB’s knowledge, all real property, machinery, equipment, furniture and fixtures owned or leased by ICB or its Subsidiaries that is material to their respective businesses is structurally sound, in good operating condition (ordinary wear and tear excepted) and has been and is being maintained and repaired in the ordinary condition of business.

 

(b)           With respect to all real property presently or formerly owned, leased or used by ICB or any of its Subsidiaries, ICB, its Subsidiaries and to ICB’s knowledge each of the prior owners, have conducted their respective business in compliance with all federal, state, county and municipal laws, statutes, regulations, rules, ordinances, orders, directives, restrictions and requirements relating to, without limitation, responsible property transfer, underground storage tanks, petroleum products, air pollutants, water pollutants or storm water or process waste water or otherwise relating to the environment, 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 regulations of the Environmental Protection Agency, the Nuclear Regulatory Agency, the Army Corps 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 or at any time thereafter in effect (collectively, “Environmental Laws”). There are no pending or, to the knowledge of ICB, threatened, claims, actions or proceedings by any local municipality, sewage district or other governmental entity against ICB or any of its Subsidiaries with respect to the Environmental Laws, and to ICB’s knowledge there is no reasonable basis or grounds for any such claim, action or proceeding. No environmental clearances are required for the conduct of the business of ICB or any of its Subsidiaries as currently conducted or the consummation of the Merger contemplated hereby. To ICB’s knowledge, neither ICB nor any of its Subsidiaries is the owner, or has been in the chain of title or the operator or lessee, of any property on which any substances have been used, stored, deposited, treated, recycled or disposed of, 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. To ICB’s knowledge, neither ICB nor any of its Subsidiaries has any liability for any clean-up or remediation under any of the Environmental Laws with respect to any real property.

 

3.12           Loans and Investments.

 

(a)           ICB has provided ONB with a list of each loan by IBTC that has been classified by regulatory examiners or management as “Other Loans Specially Mentioned,” “Substandard,” “Doubtful” or “Loss” or that has been identified by accountants or auditors (internal or external) as having a significant risk of uncollectability as of October 31, 2011, and a list of Delinquent Loans as of December 31, 2011.  The most recent loan watch list of IBTC and a list of all loans which have been determined to be thirty (30) days or more past due with respect to principal or interest payments or has been placed on nonaccrual status has also been provided by ICB to ONB.

 

(b)           All loans reflected in the ICB Financial Statements as of September 30, 2011, and which have been made, extended, renewed, restructured, approved, amended or acquired since September 30, 2011: (i) have been made for good, valuable and adequate consideration in the

 

ordinary course of business; (ii) constitute the legal, valid and binding obligation of the obligor and any guarantor named therein, except to the extent limited by general principles of equity and public policy or by bankruptcy, insolvency, fraudulent transfer, reorganization, liquidation, moratorium, readjustment of debt or other laws of general application relative to or affecting the enforcement of creditors’ rights; (iii) are evidenced by notes, instruments or other evidences of indebtedness which are true, genuine and what they purport to be; and (iv) are secured by perfected security interests or recorded mortgages naming IBTC 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 ICB Financial Statements are, in the judgment of management of ICB, adequate in all material respects under the requirements of GAAP 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.

 

(d)           Except as set forth in the ICB Disclosure Schedule, none of the investments reflected in the ICB Financial Statements as of and for the period ended September 30, 2011, and none of the investments made by any Subsidiary of ICB since September 30, 2011, are subject to any restriction, whether contractual or statutory, which materially impairs the ability of such Subsidiary to dispose freely of such investment at any time.  Neither ICB nor any of its Subsidiaries is a party to any repurchase agreements with respect to securities.

 

(e)           Except as set forth in the ICB Disclosure Schedule, and except for customer deposits, ordinary trade payables, and Federal Home Loan Bank borrowings, neither ICB nor any of its Subsidiaries has, and none will have at the Effective Time, any indebtedness for borrowed money.

 

3.13           No Shareholder Rights Plan.  ICB has no shareholder rights plan or any other plan, program or agreement involving, restricting, prohibiting or discouraging a change in control or merger of ICB or which reasonably could be considered an anti-takeover mechanism.

 

3.14           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 any member of a controlled group of corporations under Code Section 414(b) of which ICB is or was a member, and any trade or business (whether or not incorporated) which is or was under common control with ICB under Code Section 414(c), and all other entities which together with ICB are or were prior to the date hereof treated as a single employer under Code Section 414(m) or 414(o) (an “ERISA Affiliate”), whether written or oral, in which ICB or any ERISA Affiliate participates as a participating employer, or to which ICB or any ERISA Affiliate contributes or is or has been obligated to contribute, or any nonqualified employee benefit plans or deferred compensation, bonus, stock, performance share, phantom stock or incentive plans or arrangements, or other employee benefit or fringe benefit programs for the benefit of former or current employees or directors (or their beneficiaries or dependents) of ICB or any ERISA Affiliate, and including any such plans which have been terminated, merged into another plan, frozen or discontinued since January 1, 2005 (individually, “ICB Plan”

 

and collectively, “ICB Plans”), represents and warrants, except as set forth in the ICB Disclosure Schedule:

 

(i)           All such ICB Plans have, on a continuous basis since their adoption, been, in all material respects, maintained in compliance with their respective terms and with the requirements prescribed by all applicable statutes, orders and governmental rules or regulations, including without limitation, ERISA and the Department of Labor (“Department”) Regulations promulgated thereunder and the Code and Treasury Regulations promulgated thereunder.

 

(ii)           All ICB Plans intended to constitute tax-qualified plans under Code Section 401(a) have complied since their adoption or have been timely amended to comply in all material respects with all applicable requirements of the Code and the Treasury Regulations and each such Plan has received a favorable determination letter from the Internal Revenue Service upon which ICB may rely regarding the tax qualified status under the Code.

 

(iii)           All ICB Plans that provide for payments of “nonqualified deferred compensation” (as defined in Code Section 409A(d)(1)) have been (A) operated in good faith compliance with the applicable requirements of Code Section 409A and applicable guidance thereunder since January 1, 2007, and (B) amended to comply in written form with Code Section 409A and the Treasury Regulations promulgated thereunder.

 

(iv)           All options to purchase shares of ICB Common Stock were granted with a per share exercise price that was not less than the “fair market value” of ICB Common Stock on the date of such grant, as determined in accordance with the terms of the applicable ICB Stock Option Plan (the “ICB Stock Options”).  All ICB Stock Options have been properly accounted for in accordance with GAAP, and no change is expected in respect of any prior financial statements relating to expenses for stock-based compensation.  There is no pending audit, investigation or inquiry by any governmental agency or authority or by ICB (directly or indirectly) with respect to ICB’s stock option granting practices or other equity compensation practices.  The grant date of each ICB Stock Option is on or after the date on which such grant was authorized by the Board of Directors of ICB or the compensation committee thereof.

 

(v)           No ICB Plan (or its related trust), other than the Indiana Community Bancorp Employees’ Savings & Profit Sharing Plan and Trust (the “401(k) Plan”), holds any stock or other securities of ICB.

 

(vi)           Neither ICB, an ERISA Affiliate nor any fiduciary as defined in ERISA Section 3(21)(A) of a ICB Plan has engaged in any transaction that may subject ICB, any ERISA Affiliate or any ICB Plan to a civil penalty imposed by ERISA Section 502 or any other provision of ERISA or excise taxes under Code Section 4971, 4975, 4976, 4977, 4979 or 4980B.

 

(vii)           All obligations required to be performed by ICB or any ERISA Affiliate under any provision of any ICB Plan have been performed by it in all material respects

 

and, to ICB’s knowledge, neither ICB nor any ERISA Affiliate is in default under or in violation of any provision of any ICB Plan.

 

(viii)           All required reports and descriptions for the ICB Plans have been timely filed and distributed to participants and beneficiaries, and all notices required by ERISA, the Code or other law with respect to all ICB Plans have been proper as to form and content and have been provided timely.

 

(ix)           No event has occurred which would constitute grounds for an enforcement action by any party under Part 5 of Title I of ERISA with respect to any ICB Plan.

 

(x)           There are no examinations, audits, enforcement actions or proceedings, or any other investigations, pending, threatened or currently in process by any governmental agency involving any ICB Plan.

 

(xi)           There are no actions, suits, proceedings or claims pending (other than routine claims for benefits) or threatened against ICB or any ERISA Affiliate in connection with any ICB Plan or the assets of any ICB Plan.

 

(xii)           Any ICB Plan may be amended and terminated at any time without any Material Adverse Effect, subject to any restrictions in Section 409A of the Code, and these rights have always been maintained by ICB and its ERISA Affiliates.

 

(b)           ICB has provided or made available to ONB true, accurate and complete copies and, in the case of any plan or program which has not been reduced to writing, a materially complete summary, of all of the following, as applicable:

 

(i)           Pension, retirement, profit-sharing, savings, stock purchase, stock bonus, stock ownership, stock option, restricted stock, restricted stock unit, phantom stock, performance share and stock appreciation right plans, all amendments thereto, and, if required under the reporting and disclosure requirements of ERISA, 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, medical and prescription drug arrangements, policies or plans and all summary plan descriptions thereof;

 

(v)           All other incentive, welfare or employee benefit plans, understandings, arrangements or agreements, maintained or sponsored, participated in, or contributed or obligated to contribute to by ICB for its current or former directors, officers or employees;

 

(vi)           All reports filed with the Internal Revenue Service,  the Department of Labor and the Pension Benefit Guaranty Corporation within the preceding three years by ICB or any ERISA Affiliate with respect to any ICB Plan;

 

(vii)           All current participants in such plans and programs and all participants with benefit entitlements under such plans and programs; and

 

(viii)           Valuations or allocation reports for any defined contribution and defined benefit plans as of the most recent allocation and valuation dates.

 

(ix)           All notices provided to employees and participants in connection with any ICB Plan.

 

(c)           Except as set forth on the ICB Disclosure Schedule, no current or former director, officer or employee of ICB or any ERISA Affiliate (i) is entitled to or may become entitled to any benefit under any welfare benefit plans (as defined in ERISA Section 3(1)) after termination of employment with ICB or any ERISA Affiliate, except to the extent such individuals may be entitled to continue their group health care coverage pursuant to Code Section 4980B, or (ii) is currently receiving, or entitled to receive, a disability benefit under a long-term or short-term disability plan maintained by ICB or an ERISA Affiliate.

 

(d)           With respect to all group health plans as defined in ERISA Section 607(1), sponsored or maintained by ICB or any ERISA Affiliate, no director, officer, employee or agent of ICB or any ERISA Affiliate 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 ICB or any ERISA Affiliate under Code Section 4980B(a), or would cause a penalty to be imposed under ERISA and the regulations promulgated thereunder.  With respect to all such plans, all applicable provisions of Code Section 4980B and ERISA Sections 601-606 have been complied with in all material respects by ICB or any ERISA Affiliate, and all other provisions of ERISA and the regulations promulgated thereunder have been complied with in all material respects.

 

(e)           Except as otherwise set forth in ICB’s SEC Reports as of the date of this Agreement or provided in the ICB Disclosure Schedule, there are no collective bargaining, employment, management, consulting, deferred compensation, reimbursement, indemnity, retirement, early retirement, severance or similar plans or agreements, commitments or understandings, or any employee benefit or retirement plan or agreement, binding upon ICB or any ERISA Affiliate and no such agreement, commitment, understanding or plan is under discussion or negotiation by management with any employee or group of employees, any member of management or any other Person.

 

(f)           Except as otherwise provided in the ICB Disclosure Schedule, no Voluntary Employees’ Beneficiary Association (“VEBA”), as defined in Code Section 501(c)(9), is sponsored or maintained by ICB or any ERISA Affiliate.

 

(g)           Except as otherwise provided in the ICB Disclosure Schedule or as contemplated in this Agreement, there are no benefits or liabilities under any employee benefit plan or program that will be accelerated or otherwise come due as a result of the transactions contemplated by the terms of this Agreement.

 

(h)           Except as may be disclosed in the ICB Disclosure Schedule, ICB and all ERISA Affiliates are and have been in material compliance with all applicable laws respecting employment and employment practices, terms and conditions of employment and wages and hours, including, without limitation, any such laws respecting employment discrimination and occupational safety and health requirements.

 

(i)           Except as may be disclosed in the ICB Disclosure Schedule, all of the ICB Plans have been funded in accordance with the minimum funding requirements of ERISA Section 302 and Code Section 412, and effective January 1, 2008, ERISA Section 303 and Code Section 430 to the extent applicable, and no funding requirement has been waived, nor does ICB or any ERISA Affiliate has any liability or potential liability as a result of the underfunding of, or termination of any such plan by ICB or any ERISA Affiliate.

 

(j)           As a result, directly or indirectly, of the transactions contemplated by this Agreement (including without limitation any termination of employment relating thereto and occurring prior to, at or following the Effective Time), ICB, its ERISA Affiliates and their respective successors will not be obligated to make a payment that would be characterized as an “excess parachute payment” to an individual who is a “disqualified individual,” as such terms are defined in Code Section 280G.

 

(k)           Neither ICB nor any ERISA Affiliate has made any promises or commitments, whether legally binding or not, to create any new plan, agreement or arrangement, or to modify or change in any material way ICB Plans.

 

3.15           Obligations to Employees.  All material obligations and liabilities of and all payments by ICB or any ERISA Affiliate and all ICB Plans, whether arising by operation of law, by contract or by past custom, for payments to trusts or other funds, to any government agency or authority or to any present or former director, officer, employee or agent (or his or her heirs, legatees or legal representatives) have been and are being paid to the extent required by applicable law or by the plan, trust, contract or past custom or practice, and adequate actuarial accruals and reserves for such payments have been and are being made by ICB or an ERISA Affiliate in accordance with GAAP and applicable law applied on a consistent basis and sound actuarial methods with respect to the following: (a) withholding taxes or unemployment compensation; (b) ICB Plans; (c) employment, salary continuation, consulting, retirement, early retirement, severance or reimbursement; and (d) collective bargaining plans and agreements.  All accruals and reserves referred to in this Section 3.15 are correctly and accurately reflected and accounted for in all material respects in the ICB Financial Statements and the books, statements and records of ICB.

 

3.16           Taxes, Returns and Reports.  Each of ICB and its Subsidiaries has since January 1, 2007 (a) duly and timely 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 material respects; (b) paid or otherwise adequately reserved in accordance with GAAP for all taxes, assessments and other governmental charges due or claimed to be due upon it or any of its income, properties or assets; and (c) not requested an extension of time for any such payments (which extension is still in force). ICB has established, and shall establish in the Subsequent ICB Financial Statements (as hereinafter defined), in accordance with GAAP, a reserve for taxes in

 

 

3.17           Deposit Insurance.  The deposits of IBTC are insured by the Federal Deposit Insurance Corporation in accordance with the Federal Deposit Insurance Act, as amended, to the fullest extent provided by applicable law and ICB or IBTC has paid or properly reserved or accrued for all current premiums and assessments with respect to such deposit insurance.

 

3.18           Insurance.  ICB has provided ONB with a list and, if requested, a true, accurate and complete copy thereof 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 ICB or any of its Subsidiaries on the date hereof or with respect to which ICB or any of its Subsidiaries pays any premiums. Each such policy is in full force and effect and all premiums due thereon have been paid when due.

 

3.19           Books and Records.   The books and records of ICB are, in all material respects, complete, correct and accurately reflect the basis for the financial condition, results of operations, business, assets and capital of ICB on a consolidated basis set forth in the ICB Financial Statements.

 

3.20           Broker’s, Finder’s or Other Fees.   Except for reasonable fees and expenses of ICB’s attorneys, accountants and investment bankers, all of which shall be paid by ICB at or prior to the Effective Time, and except as set forth in the ICB Disclosure Schedule, no agent, broker or other Person acting on behalf of ICB or under any authority of ICB is or shall be entitled to any commission, broker’s or finder’s fee or any other form of compensation or payment from any of the parties hereto relating to this Agreement and the Merger contemplated hereby.

 

3.21           Interim Events.   Except as otherwise permitted hereunder, since September 30, 2011, or as set forth in the Disclosure Schedule, neither ICB nor any of its Subsidiaries has:

 

(a)           experienced any events, changes, developments or occurrences which have had, or are reasonably likely to have, a Material Adverse Effect on ICB;

 

(b)           Suffered any damage, destruction or loss to any of its properties, not fully paid by insurance proceeds, in excess of $100,000 individually or in the aggregate;

 

(c)           Declared, distributed or paid any dividend or other distribution to its shareholders, except for payment of dividends as permitted by Section 5.03(a)(iii) hereof;

 

(d)           Repurchased, redeemed or otherwise acquired shares of its common stock, issued any shares of its common stock or stock appreciation rights or sold or agreed to issue or sell any shares of its common stock, including the issuance of any stock options, or any right to purchase or acquire any such stock or any security convertible into such stock or taken any action to reclassify, recapitalize or split its stock;

 

(e)           Granted or agreed to grant any increase in benefits payable or to become payable under any pension, retirement, profit sharing, health, bonus, insurance or other welfare benefit plan or agreement to employees, officers or directors of ICB or a Subsidiary;

 

(f)           Increased the salary of any director, officer or employee, except for normal increases in the ordinary course of business and in accordance with past practices, or entered into any employment contract, indemnity agreement or understanding with any officer or employee or installed any employee welfare, pension, retirement, stock option, stock appreciation, stock dividend, profit sharing or other similar plan or arrangement;

 

(g)           Leased, sold or otherwise disposed of any of its assets except in the ordinary course of business or leased, purchased or otherwise acquired from third parties any assets except in the ordinary course of business;

 

(h)           Except for the Merger contemplated by this Agreement, merged, consolidated or sold shares of its common stock, agreed to merge or consolidate with or into any third party, agreed to sell any shares of its common stock or acquired or agreed to acquire any stock, equity interest, assets or business of any third party;

 

(i)           Incurred, assumed or guaranteed any obligation or liability (fixed or contingent) other than obligations and liabilities incurred in the ordinary course of business;

 

(j)           Mortgaged, pledged or subjected to a lien, security interest, option or other encumbrance any of its assets except for tax and other liens which arise by operation of law and with respect to which payment is not past due and except for pledges or liens: (i) required to be granted in connection with acceptance by IBTC of government deposits; or (ii) granted in connection with repurchase or reverse repurchase agreements;

 

(k)           Except as set forth in the ICB Disclosure Schedule, canceled, released or compromised any loan, debt, obligation, claim or receivable other than in the ordinary course of business;

 

(l)           Entered into any transaction, contract or commitment other than in the ordinary course of business;

 

(m)           Agreed to enter into any transaction for the borrowing or loaning of monies, other than in the ordinary course of its lending business; or

 

(n)           Conducted its business in any manner other than substantially as it was being conducted as of September 30, 2011.

 

3.22           ICB Securities and Exchange Commission Filings.  ICB has filed all SEC Reports required to be filed by it.  All such SEC Reports were true, accurate and complete in all material respects as of the dates of the filings, and no such SEC Reports contained 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.  ICB has made available to ONB copies of all comment letters received by ICB from the SEC since January 1, 2007, relating to the SEC Reports, together with all written responses of ICB thereto.  As of the date of this Agreement, there are no outstanding or unresolved comments in such comment letters received by ICB, and to the knowledge of ICB, none of the SEC Reports is the subject of any ongoing review by the SEC.

 

3.23           Insider Transactions.  Except as set forth in the ICB Disclosure Schedule, since December 31, 2007, no officer or director of ICB or any of its Subsidiaries or member of the “immediate family” or “related interests” (as such terms are defined in Regulation O) of any such officer or director has currently, or has had during such time period, any direct or indirect interest in any property, assets, business or right which is owned, leased, held or used by ICB or any Subsidiary or in any liability, obligation or indebtedness of ICB or any Subsidiary, except for deposits of IBTC.

 

3.24           Indemnification Agreements.

 

(a)           Other than as set forth in the ICB Disclosure Schedule, neither ICB nor any of its Subsidiaries is a party to any indemnification, indemnity or reimbursement agreement, contract, commitment or understanding to indemnify any present or former director, officer, employee, shareholder or agent against liability or hold the same harmless from liability other than as expressly provided in the Articles of Incorporation or By-Laws of ICB or the charter documents of a Subsidiary.

 

(b)           Since January 1, 2007, no claims have been made against or filed with ICB or any of its Subsidiaries nor have, to the knowledge of ICB, any claims been threatened against ICB or a Subsidiary, for indemnification against liability or for reimbursement of any costs or expenses incurred in connection with any legal or regulatory proceeding by any present or former director, officer, shareholder, employee or agent of ICB or any of its Subsidiaries.

 

3.25           Shareholder Approval.   The affirmative vote of the holders of a majority of the ICB Common Stock (which are issued and outstanding on the record date relating to the meeting of shareholders contemplated by Section 5.01 of this Agreement) is required for shareholder approval of this Agreement and the Merger.

 

3.26           Intellectual Property.

 

(a)           ICB and its Subsidiaries own, or are licensed or otherwise possess sufficient legally enforceable rights to use, all material Intellectual Property (as such term is defined below) that is used by ICB or its Subsidiaries in their respective businesses as currently conducted. Neither ICB nor any of its Subsidiaries has (A) licensed any Intellectual Property

 

owned by it or its Subsidiaries in source code form to any third party or (B) entered into any exclusive agreements relating to Intellectual Property owned by it.

 

(b)           ICB and its Subsidiaries have not infringed or otherwise violated any material Intellectual Property rights of any third party since January 1, 2008. There is no claim asserted, or to the knowledge of ICB threatened, against ICB and/or its Subsidiaries or any indemnitee thereof concerning the ownership, validity, registerability, enforceability, infringement, use or licensed right to use any Intellectual Property.

 

(c)           To the knowledge of ICB, no third party has infringed, misappropriated or otherwise violated ICB or its Subsidiaries’ Intellectual Property rights since January 1, 2007. There are no claims asserted or threatened by ICB or its Subsidiaries, nor has ICB or its Subsidiaries decided to assert or threaten a claim, that (i) a third party infringed or otherwise violated any of their Intellectual Property rights; or (ii) a third party’s owned or claimed Intellectual Property interferes with, infringes, dilutes or otherwise harms any of their Intellectual Property rights.

 

(d)           ICB and its Subsidiaries have taken reasonable measures to protect the confidentiality of all trade secrets that are owned, used or held by them.

 

(e)           For purposes of this Agreement, “Intellectual Property” shall mean all patents, trademarks, trade names, service marks, domain names, database rights, copyrights, and any applications therefor, mask works, technology, know-how, trade secrets, inventory, ideas, algorithms, processes, computer software programs or applications (in both source code and object code form), and tangible or intangible proprietary information or material and all other intellectual property or proprietary rights.

 

3.27           Community Reinvestment Act.  IBTC received a rating of “satisfactory” or better in its most recent examination or interim review with respect to the Community Reinvestment Act.

 

3.28           Bank Secrecy Act.  Neither ICB nor IBTC has been advised of any supervisory criticisms regarding their compliance with the Bank Secrecy Act (41 USC 5422, et seq.) or related state or federal anti-money laundering laws, regulations and guidelines, including without limitation those provisions of federal regulations requiring (i) the filing of reports, such as Currency Transaction Reports and Suspicious Activity Reports, (ii) the maintenance of records and (iii) the exercise of due diligence in identifying customers.

 

3.29           Agreements with Regulatory Agencies.  Except as set forth in the ICB Disclosure Schedule, neither ICB nor any of its Subsidiaries is subject to any cease-and-desist, consent order or other order or enforcement action issued by, or is a party to any written agreement, consent agreement or memorandum of understanding with, or is a party to any commitment letter or similar undertaking to, or is subject to any order or directive by, or has been ordered to pay any civil money penalty by, or has been since January 1, 2008, a recipient of any supervisory letter from, or since January 1, 2008, has adopted any policies, procedures or board resolutions at the request or suggestion of any regulatory agency or other governmental entity that currently restricts in any material respect the conduct of its business or that in any material manner relates

 

to its capital adequacy, its ability to pay dividends, its credit or risk management policies, its management or its business, other than those of general application that apply to similarly situated bank holding companies or their subsidiaries, whether or not set forth in the ICB Disclosure Schedule (a “ICB Regulatory Agreement”), nor has ICB or any of its Subsidiaries been advised since January 1, 2008, by any regulatory agency or other governmental entity that it is considering issuing, initiating, ordering, or requesting any such ICB Regulatory Agreement.  There are no refunds or restitutions required to be paid as a result of any criticism of any regulatory agency or body cited in any examination report of ICB or any of its Subsidiaries as a result of an examination by any regulatory agency or body, or set forth in any accountant’s or auditor’s report to ICB or any of its Subsidiaries.

 

3.30           Internal Controls.

 

(a)           None of ICB or its Subsidiaries’ records, systems, controls, data or information are recorded, stored, maintained, operated or otherwise wholly or partly dependent on or held by any means (including any electronic, mechanical or photographic process, whether computerized or not) which (including all means of access thereto and therefrom) are not under the exclusive ownership and direct control of it or its Subsidiaries or accountants except as would not, individually or in the aggregate, reasonably be expected to result in a materially adverse effect on the system of internal accounting controls described in the next sentence. ICB and its Subsidiaries have devised and maintain a system of internal accounting controls sufficient to provide reasonable assurances regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP.

 

(b)           ICB (x) has implemented and maintains disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) to ensure that material information relating to ICB including its Subsidiaries, is made known to the chief executive officer and the chief financial officer of ICB by others within those entities, and (y) has disclosed, based on its most recent evaluation prior to the date hereof, to ICB’s outside auditors and the audit committee of ICB’s Board of Directors (i) any significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting (as defined in Rule 13a-15(f) of the Exchange Act) which are reasonably likely to adversely affect ICB’s ability to record, process, summarize and report financial information, and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in ICB’s internal controls over financial reporting. These disclosures were made in writing by management to ICB’s auditors and audit committee and a copy has previously been made available to ONB. As of the date hereof, there is no reason to believe that its outside auditors and its chief executive officer and chief financial officer will not be able to give the certifications and attestations required pursuant to the rules and regulations adopted pursuant to Section 404 of the Sarbanes-Oxley Act, without qualification, when next due.

 

(c)           Since December 31, 2010, (i) through the date hereof, neither ICB nor any of its Subsidiaries has received or otherwise had or obtained knowledge of any material complaint, allegation, assertion or claim, whether written or oral, regarding the accounting or auditing practices, procedures, methodologies or methods of ICB or any of its Subsidiaries or their respective internal accounting controls, including any material complaint, allegation, assertion or claim that ICB or any of its Subsidiaries has engaged in questionable accounting or auditing

 

practices, and (ii) no attorney representing ICB or any of its Subsidiaries, whether or not employed by ICB or any of its Subsidiaries, has reported evidence of a material violation of securities laws, breach of fiduciary duty or similar violation by ICB or any of its officers, directors, employees or agents to the Board of Directors of ICB or any committee thereof or to any director or officer of ICB.

 

3.31           Fiduciary Accounts.  ICB and each of its Subsidiaries has properly administered in all material respects all accounts for which it acts as a fiduciary, including but not limited to accounts for which it serves as a trustee, agent, custodian, personal representative, guardian, conservator or investment advisor, in accordance with the terms of the governing documents and applicable laws and regulations. Neither ICB nor any of its Subsidiaries, nor any of their respective directors, officers or employees, has committed any breach of trust to ICB’s knowledge with respect to any fiduciary account and the records for each such fiduciary account are true and correct and accurately reflect the assets of such fiduciary account.

 

3.32           Opinion of Financial Advisor.  The Board of Directors of ICB, at a duly constituted and held meeting at which a quorum was present throughout, has been informed orally by Sandler O’Neill & Partners, L.P. (“Sandler O’Neill”), that the Exchange Ratio, as of the date of this Agreement, is fair to the shareholders of ICB from a financial point of view.

 

3.33           U.S. Treasury Capital Purchase Program.  On December 12, 2008, ICB closed on the issuance of the ICB TARP Preferred Stock and the ICB TARP Warrant pursuant to the UST’s Capital Purchase Program.  ICB and IBTC are in compliance with all statutory, regulatory and contractual requirements applicable to them in connection with their participation in the Capital Purchase Program.

 

 

 

 

 

 

 

Accordingly, ONB represents and warrants to ICB as follows, except as set forth in the ONB Disclosure Schedule:

 

4.01           Organization and Authority.

 

(a)           ONB is a corporation duly organized and validly existing under the laws of the state of Indiana and is a registered bank holding company under the BHC Act.  ONB has full power and authority (corporate and otherwise) to own and lease its properties as presently owned and leased and to conduct its business in the manner and by the means utilized as of the date hereof. ONB has previously provided ICB with a complete list of its Subsidiaries.  Except for its Subsidiaries, ONB owns no voting stock or equity securities of any corporation, partnership, association or other entity.

 

(b)           Old National Bank is a national bank chartered and existing under the laws of the United States.  Old National Bank has full power and authority (corporate and otherwise) to own and lease its properties as presently owned and leased and to conduct its business in the manner and by the means utilized as of the date hereof. Except as set forth on the list previously provided to ICB, Old National Bank has no subsidiaries and owns no voting stock or equity securities of any corporation, partnership, association or other entity.

 

(c)           Each of ONB’s Subsidiaries other than Old National Bank is duly organized and validly existing under the laws of its jurisdiction of organization, and has full power and authority (corporate and otherwise) to own and lease its properties as presently owned and leased and to conduct its business in the manner and by the means utilized as of the date hereof.

 

4.02           Authorization.

 

(a)           ONB 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 Sections 7.01(e) and (f) hereof.  This Agreement and its execution and delivery by ONB have been duly authorized and approved by the Board of Directors of ONB and, assuming due

 

execution and delivery by ICB, constitutes a valid and binding obligation of ONB, subject to the fulfillment of the conditions precedent set forth in Section 7.01 hereof, and is enforceable in accordance with its terms, except to the extent limited by general principles of equity and public policy and by bankruptcy, insolvency, fraudulent transfer, reorganization, liquidation, moratorium, readjustment of debt or other laws of general application relating to or affecting the enforcement of creditors’ rights.

 

(b)           Neither the execution of this Agreement nor consummation of the Merger contemplated hereby: (i) conflicts with or violates the Articles of Incorporation or By-Laws of ONB or the charter documents of any of ONB’s Subsidiaries; (ii) conflicts with or violates any local, state, federal or foreign law, statute, ordinance, rule or regulation (provided that the approvals of or filings with applicable government regulatory agencies or authorities required for consummation of the Merger are obtained) or any court or administrative judgment, order, injunction, writ or decree; (iii) conflicts with, results in a breach of or constitutes a default under any note, bond, indenture, mortgage, deed of trust, license, lease, contract, agreement, arrangement, commitment or other instrument to which ONB or any of its Subsidiaries is a party or by which ONB or any of its Subsidiaries is subject or bound; (iv) results in the creation of or gives any Person 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 ICB) or any other adverse interest, upon any right, property or asset of ONB or any of its Subsidiaries which would be material to ONB; or (v) terminates or gives any Person 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 or any of its Subsidiaries is bound or with respect to which ONB or any of its Subsidiaries 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, antitrust and corporation statutes, all as amended, and the rules and regulations promulgated thereunder, no notice to, filing with, exemption by or consent, authorization or approval of any governmental agency or body is necessary for consummation of the Merger by ONB.

 

4.03           Capitalization.

 

(a)           The authorized capital stock of ONB consists of (i) One Hundred Fifty Million (150,000,000) shares of ONB Common Stock, of which, as of January 31, 2011, approximately Ninety-Four Million Seven Hundred and Sixty Thousand (94,760,000) shares were issued and outstanding, and (ii) Two Million (2,000,000) shares of preferred stock, of which none are issued and outstanding.  All of the issued and outstanding shares of ONB Common 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.  Except as set forth in the ONB Disclosure Schedule, ONB 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 ONB Common Stock. Each share of ONB Common Stock is entitled to one vote per share. A description of the ONB Common Stock is contained in the Articles of Incorporation of ONB.

 

(b)           Subject to 12 U.S.C. § 55, all of the issued and outstanding shares of capital stock or other equity ownership interests of each Subsidiary of ONB 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 with respect thereto.

 

(c)           Except as set forth in the ONB Disclosure Schedule or as disclosed in its SEC Reports, there are no options, warrants, commitments, calls, puts, agreements, understandings, arrangements or subscription rights relating to any shares of ONB Common Stock or any of ONB’s Subsidiaries, or any securities convertible into or representing the right to purchase or otherwise acquire any common stock or debt securities of ONB or its Subsidiaries, by which ONB is or may become bound. ONB does not have any outstanding contractual or other obligation to repurchase, redeem or otherwise acquire any of the issued and outstanding shares of ONB Common Stock. To the knowledge of ONB, there are no voting trusts, voting arrangements, buy-sell agreements or similar arrangements affecting the capital stock of ONB or its Subsidiaries.

 

(d)           Except as disclosed in its SEC Reports, ONB has no knowledge of any Person which beneficially owns (as defined in Rule 13d-3 under the 1934 Act) 5% or more of its outstanding shares of common stock.

 

4.04           Organizational Documents.   The Articles of Incorporation and By-Laws of ONB and the charter documents for each of ONB’s Subsidiaries, representing true, accurate and complete copies of such corporate documents in effect as of the date of this Agreement, have been delivered to ICB.

 

4.05           Compliance with Law.

 

(a)           None of ONB or any of its Subsidiaries is currently in violation of, and since January 1, 2008, none has been in violation of, of any local, state, federal or foreign law, statute, regulation, rule, ordinance, order, restriction or requirement, and none is in violation of any order, injunction, judgment, writ or decree of any court or government agency or body, except where such violation would not have a Material Adverse Effect on ONB.  ONB and its Subsidiaries possess and hold all licenses, franchises, permits, certificates and other authorizations necessary for the continued conduct of their business without interference or interruption, except where the failure to possess and hold the same would not have a Material Adverse Effect on ONB.

 

(b)           As of the date hereof, set forth on the ONB Disclosure Schedule is a list of all agreements, understandings and commitments with, and all orders and directives of, all government regulatory agencies or authorities with respect to the financial condition, results of operations, business, assets or capital of ONB or its Subsidiaries which presently are binding upon or require action by, or at any time during the last five (5) years have been binding upon or have required action by, ONB or its Subsidiaries, and all documents relating thereto have been made available to ICB, including, without limitation, all correspondence, written communications and written commitments related thereto. There are no refunds or restitutions required to be paid as a result of any criticism of any regulatory agency or body cited in any examination report of ONB or any of its Subsidiaries as a result of an examination by any

 

regulatory agency or body, or set forth in any accountant’s or auditor’s report to ONB or any of its Subsidiaries.

 

(c)           Since the enactment of the Sarbanes-Oxley Act, ONB has been and is in compliance in all material respects with the applicable provisions of the Sarbanes-Oxley Act.

 

(d)           All of the existing offices and branches of Old National Bank have been legally authorized and established in accordance with all applicable federal, state and local laws, statutes, regulations, rules, ordinances, orders, restrictions and requirements, except such as would not have a Material Adverse Effect on ONB. Old National Bank has no approved but unopened offices or branches.

 

4.06           Accuracy of Statements Made and Materials Provided to ICB.   No representation, warranty or other statement made, or any information provided, by ONB in this Agreement or, in the ONB Disclosure Schedule (and any update thereto), or provided by ONB to ICB in the course of ICB’s due diligence investigation and no 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 relating to the Merger, contains or shall contain (in the case of information relating to the proxy statement-prospectus at the time it is first mailed to ICB’s shareholders) any untrue statement of material fact or omits or shall omit to state a material fact necessary to make the statements contained herein or therein, in light of the circumstances in which they are made, not false or misleading, except that no representation or warranty has been made by ONB with respect to statements made or incorporated by reference in the Form S-4 or the proxy statement-prospectus therein based on information supplied by ICB specifically for inclusion or incorporation by reference in the Form S-4 or the proxy statement-prospectus therein.

 

4.07           Litigation and Pending Proceedings.   Except as set forth in the ONB Disclosure Schedule:

 

(a)           Except for lawsuits involving collection of delinquent accounts and lawsuits which would not have a Material Adverse Effect on ONB, there are no claims, actions, suits, proceedings, mediations, arbitrations or investigations pending and served against ONB or any of its Subsidiaries or, to the knowledge of ONB or any of its Subsidiaries, threatened in any court or before any government agency or authority, arbitration panel or otherwise against ONB or any of its Subsidiaries.  ONB does not have knowledge of a basis for any claim, action, suit, proceeding, litigation, arbitration or investigation against ONB or any of its Subsidiaries.

 

(b)           Neither ONB nor any of its Subsidiaries is: (i) subject to any material outstanding judgment, order, writ, injunction or decree of any court, arbitration panel or governmental agency or authority; (ii) presently charged with or, to the knowledge of ONB, under governmental investigation with respect to, any actual or alleged material violations of any law, statute, rule, regulation or ordinance; or (iii) the subject of any material pending or, to the knowledge of ONB, threatened proceeding by any government regulatory agency or authority having jurisdiction over their respective business, assets, capital, properties or operations.

 

4.08           Financial Statements and Reports.

 

(a)           ONB has delivered to ICB 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 the related Consolidated Statements of Income and Consolidated Statements of Changes in Shareholders’ Equity of ONB as of and for the fiscal years ended December 31, 2010, 2009 and 2008, and as of and for the nine months ended September 30, 2011;

 

(ii)           Consolidated Statements of Cash Flows of ONB for the fiscal years ended December 31, 2010, 2009 and 2008, and as of and for the nine months ended September 30, 2011; and

 

(iii)           Call Reports (“Call Reports”) for Old National Bank as of the close of business on December 31, 2010, 2009 and 2008, and as of and for the nine months ended September 30, 2011.

 

(b)           The ONB Financial Statements present fairly the consolidated financial position of ONB as of and at the dates shown and the consolidated results of operations for the periods covered thereby and are complete, correct, represent bona fide transactions, and have been prepared from the books and records of ONB and its Subsidiaries. The ONB Financial Statements described in clauses (i) and (ii) above for completed fiscal years are audited financial statements and have been prepared in conformance with GAAP, except as may otherwise be indicated in any accountants’ notes or reports with respect to such financial statements.

 

(c)           Since September 30, 2011 on a consolidated basis ONB and its Subsidiaries have not incurred any material liability other than in the ordinary course of business consistent with past practice.

 

4.09           Absence of Undisclosed Liabilities.   Except as provided in the ONB Financial Statements or in the ONB Disclosure Schedule, and except for unfunded loan commitments and obligations on letters of credit to customers of ONB’s Subsidiaries made in the ordinary course of business, except for trade payables incurred in the ordinary course of such Subsidiaries’ business, and except for the transactions contemplated by this Agreement and obligations for services rendered pursuant thereto, or any other transactions which would not result in a material liability, none of ONB or any of its Subsidiaries has, nor will have at the Effective Time, any obligation, agreement, contract, commitment, liability, lease or license which exceeds $1,000,000 individually, or any obligation, agreement, contract, commitment, liability, lease or license made outside of the ordinary course of business, except where the aggregate amount due under such obligations, agreements, contracts, commitments, liabilities, leases or licenses would not have a Material Adverse Effect, 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. None of ONB or any of its Subsidiaries is delinquent in the payment of any amount due pursuant to any trade payable in any material respect, and each has properly accrued for such payables in accordance

 

with GAAP, except where the failure to so accrue would not constitute a Material Adverse Effect.

 

4.10           Title to Properties.

 

(a)           Except as described in this Section 4.10 or the ONB Disclosure Schedule, ONB or one of its Subsidiaries, 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 in the ONB Financial Statements as of September 30, 2011; good and marketable title to all personal property reflected in the ONB Financial Statements as of September 30, 2011, other than personal property disposed of in the ordinary course of business since September 30, 2011; good and marketable 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 ONB or any of its Subsidiaries purports to own or which ONB or any of its Subsidiaries uses in its respective business and which are in either case material to its respective business; good and marketable title to, or right to use by terms of a valid and enforceable lease or contract, all other property used in its respective business to the extent material thereto; and good and marketable title to all material property and assets acquired and not disposed of or leased since September 30, 2011.  All of such properties and assets are owned by ONB or its Subsidiaries free and clear of all land or conditional sales contracts, mortgages, liens, pledges, restrictions, options, security, interests, charges, claims, rights of third parties or encumbrances of any nature except: (i) as set forth in the ONB Disclosure Schedule; (ii) as specifically noted in reasonable detail in the ONB 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 ONB on a consolidated basis and which do not detract from the value or materially interfere with the present or contemplated use of any of the properties subject thereto or otherwise materially impair the use thereof for the purposes for which they are held or used. All real property owned or, to ONB’s knowledge, leased by ONB or its Subsidiaries is in compliance in all material respects with all applicable zoning and land use laws.  All real property, machinery, equipment, furniture and fixtures owned or leased by ONB or its Subsidiaries that is material to their respective businesses is structurally sound, in good operating condition (ordinary wear and tear excepted) and has been and is being maintained and repaired in the ordinary condition of business.

 

(b)           With respect to all real property presently or formerly owned, leased or used by ONB or any of its Subsidiaries, to ONB’s knowledge, ONB, its Subsidiaries and each of the prior owners, have conducted their respective business in compliance with the Environmental Laws. There are no pending or, to the knowledge of ONB, threatened, claims, actions or proceedings by any local municipality, sewage district or other governmental entity against ONB or any of its Subsidiaries with respect to the Environmental Laws, and to ONB’s knowledge there is no reasonable basis or grounds for any such claim, action or proceeding. No environmental clearances are required for the conduct of the business of ONB or any of its Subsidiaries as currently conducted or the consummation of the Merger contemplated hereby. To ONB’s knowledge, neither ONB nor any of its Subsidiaries is the owner, or has been in the chain

 

of title or the operator or lessee, of any property on which any substances have been used, stored, deposited, treated, recycled or disposed of, 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. To ONB’s knowledge, neither ONB nor any of its Subsidiaries has any liability for any clean-up or remediation under any of the Environmental Laws with respect to any real property.

 

4.11           Adequacy of Reserves.  The reserves, the allowance for possible loan and lease losses and the carrying value for real estate owned which are shown on the ONB Financial Statements are, in the judgment of management of ONB, adequate in all material respects under the requirements of GAAP 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.

 

4.12           Employee Benefit Plans.  With respect to the employee benefit plans, as defined in Section 3(3) of the ERISA, sponsored or otherwise maintained by ONB or any of its Subsidiaries which are intended to be tax-qualified under Section 401(a) of the Code (collectively, “ONB Plans”), all such ONB Plans have, on a continuous basis since their adoption, been, in all material respects, maintained in compliance with the requirements prescribed by all applicable statutes, orders and governmental rules or regulations, including, without limitation, ERISA and the Department Regulations promulgated thereunder and the Code and Treasury Regulations promulgated thereunder.

 

4.13           Taxes, Returns and Reports.   Except as set forth in the ONB Disclosure Schedule, each of ONB and its Subsidiaries has since January 1, 2007(a) duly and timely 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 material respects; (b) paid or otherwise adequately reserved in accordance with GAAP for all taxes, assessments and other governmental charges due or claimed to be due upon it or any of 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 the Subsequent ONB Financial Statements (as hereinafter defined), in accordance with GAAP, a reserve for taxes in the ONB Financial Statements adequate to cover all of ONB’s and its Subsidiaries tax liabilities (including, without limitation, income taxes, payroll taxes and withholding, and franchise fees) for the periods then ending.  Neither ONB nor any of its Subsidiaries has, nor will any of them have, any liability for material taxes of any nature for or with respect to the operation of its business, from the date hereof up to and including the Effective Time, except to the extent set forth in the Subsequent ONB Financial Statements (as hereinafter defined) or as accrued or reserved for on the books and records of ONB or its Subsidiaries, except as set forth on the ONB Disclosure Schedule.  Except as set forth on the ONB Disclosure Schedule, to the knowledge of ONB, neither ONB nor any of its Subsidiaries is currently under audit by any state or federal taxing authority.  Except as set forth on the ONB Disclosure Schedule, no federal, state or local tax returns of ONB or any of its Subsidiaries have been audited by any taxing authority during the past five (5) years.

 

4.14           Deposit Insurance.  The deposits of Old National Bank are insured by the Federal Deposit Insurance Corporation in accordance with the Federal Deposit Insurance Act, as amended, to the fullest extent provided by applicable law and ONB or Old National Bank has

 

paid or properly reserved or accrued for all current premiums and assessments with respect to such deposit insurance.

 

4.15           Insurance.  ONB has provided ICB with a list and, if requested, a true, accurate and complete copy thereof, 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 ONB or any of its Subsidiaries on the date hereof or with respect to which ONB or any of its Subsidiaries pays any premiums. Each such policy is in full force and effect and all premiums due thereon have been paid when due.

 

4.16           Books and Records.   The books and records of ONB are, in all material respects, complete, correct and accurately reflect the basis for the financial condition, results of operations, business, assets and capital of ONB on a consolidated basis set forth in the ONB Financial Statements.

 

4.17           Broker’s, Finder’s or Other Fees.   Except for reasonable fees and expenses of ONB’s attorneys, accountants and investment bankers, all of which shall be paid by ONB at or prior to the Effective Time, and except as set forth in the ONB Disclosure Schedule, no agent, broker or other Person acting on behalf of ONB or under any authority of ONB is or shall be entitled to any commission, broker’s or finder’s fee or any other form of compensation or payment from any of the parties hereto relating to this Agreement and the Merger contemplated hereby.

 

4.18           ONB Securities and Exchange Commission Filings.   ONB has filed all SEC Reports required to be filed by it. All such SEC Reports were true, accurate and complete in all material respects as of the dates of the SEC Reports, and no such filings contained 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.  ONB has made available to ICB copies of all comment letters received by ONB from the SEC since January 1, 2007, relating to the SEC Reports, together with all written responses of ONB thereto.  As of the date of this Agreement, there are no outstanding or unresolved comments in such comment letters received by ONB, and to the knowledge of ONB, none of the SEC Reports is the subject of any ongoing review by the SEC.

 

4.19           Community Reinvestment Act.  Old National Bank received a rating of “satisfactory” or better in its most recent examination or interim review with respect to the Community Reinvestment Act.

 

 

 

ICB covenants and agrees with ONB and covenants and agrees to cause its Subsidiaries to act as follows (and ONB covenants and agrees with ICB as follows):

 

5.01           Shareholder Approval.  ICB shall submit this Agreement to its shareholders for approval and adoption at a meeting to be called and held in accordance with applicable law and the Articles of Incorporation and By-Laws of ICB at the earliest possible reasonable date.  Subject to Section 5.06 hereof, the Board of Directors of ICB shall recommend to ICB’s shareholders that such shareholders approve and adopt this Agreement and the Merger contemplated hereby and will solicit proxies voting in favor of this Agreement from ICB’s shareholders.

 

5.02           Other Approvals.

 

(a)           ICB shall proceed expeditiously, cooperate fully and use commercially reasonable efforts to assist ONB in procuring upon terms and conditions consistent with the condition set forth in Section 7.01(e) hereof all consents, authorizations, approvals, registrations and certificates, in completing all filings and applications and in satisfying all other requirements prescribed by law which are necessary for consummation of the Merger on the terms and conditions provided in this Agreement at the earliest possible reasonable date.

 

(b)           ICB will use commercially reasonable efforts to obtain any required third party consents to agreements, contracts, commitments, leases, instruments and documents described in the ICB Disclosure Schedule and to which ICB and ONB agree are material.

 

(c)           Any materials or information provided by ICB 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.

 

5.03           Conduct of Business.

 

(a)           On and after the date of this Agreement and until the Effective Time or until this Agreement is terminated as herein provided, ICB will not, and will cause its Subsidiaries to not, without the prior written consent of ONB:

 

(i)           make any changes in its capital stock accounts (including, without limitation, any stock issuance, stock split, stock dividend, recapitalization or reclassification);

 

(ii)           authorize a class of stock or issue, or authorize the issuance of, securities other than or in addition to the issued and outstanding common stock as set forth in Section 3.03 hereof;

 

(iii)           distribute or pay any dividends on its shares of common or preferred stock, or authorize a stock split, or make any other distribution to its shareholders, except that (A) each of the Subsidiaries may pay cash dividends to ICB in the ordinary course of business for payment of reasonable and necessary business and operating expenses of ICB and to provide funds for ICB’s dividends to its shareholders in accordance with this Agreement, (B) ICB may pay to its shareholders its usual and customary cash dividend of no greater than $.01 per share for any quarterly period, provided that no dividend may be

 

paid for the quarterly period in which the Merger is scheduled to be consummated or consummated if, during such period, ICB shareholders will become entitled to receive dividends on their shares of ONB Common Stock received pursuant to this Agreement; and (C) ICB may pay its regular quarterly cash dividend on the ICB TARP Preferred Stock in accordance with the terms thereof, in each case in accordance with any applicable regulatory approvals or requirements;

 

(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 or enter into any other similar transaction not in the ordinary course of business;

 

(vi)           purchase any assets or securities or assume any liabilities of a bank holding company, bank, corporation or other entity, except in the ordinary course of business necessary to manage its investment portfolio and then only to the extent that such securities have a quality rating of “AAA” by either Standard & Poor’s Ratings Services or Moody’s Investors Services for corporate bonds;

 

(vii)           which consent shall be deemed received unless ONB shall object thereto within five (5) business days after receipt of written notice from ICB to, (A) make, renew or otherwise modify any loan, loan commitment, letter of credit, interest rate swap or other extension of credit (individually, a “Loan” and collectively, “Loans”) to any Person if the Loan is an existing credit on the books of ICB or any Subsidiary and is, or in accordance with bank regulatory definitions should be, classified as “Substandard,” “Doubtful” or “Loss”; (B) make, renew or otherwise modify any Loan or Loans if immediately after making a Loan or Loans, such Person would be directly indebted to ICB or any Subsidiary in an aggregate amount in excess of $250,000 if the Loan is an existing credit on the books of ICB or any Subsidiary and is, or in accordance with bank regulatory definitions should be, classified as “Special Mention”; (C) make, renew or otherwise modify any Loan or Loans if immediately after making the Loan or Loans, such Person would be directly indebted to ICB or any Subsidiary in an aggregate amount in excess of $1,000,000; (D) make, renew or otherwise modify any Loan or Loans secured by an owner-occupied 1-4 single-family residence that does not conform with secondary market underwriting standards; (E) make, renew or otherwise modify any Loan or Loans secured by an owner-occupied 1-4 single-family residence with a principal balance in excess of $417,000 (except for any such Loan or Loans secured by an owner-occupied 1-4 single-family residence which IBTC originates, underwrites in accordance with the secondary market standards and holds for sale into the secondary market, in which case such dollar threshold shall be $750,000); or (F) make, renew or otherwise modify any Loan which does not conform with IBTC's Credit Policy Manual and exceeds 120 days to maturity;

 

(viii)           make any investment subject to any restrictions, whether contractual or statutory, which materially impairs the ability of ICB or any Subsidiary to dispose freely of such investment at any time; subject any of their 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, pledges or liens required to be granted in connection with acceptance by ICB or any Subsidiary of government deposits and pledges or liens in connection with Federal Home Loan Bank (“FHLB”) borrowings;

 

(ix)           except as contemplated by this Agreement, 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 ICB or any Subsidiary, 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 ICB or any Subsidiary;

 

(x)           except as contemplated by this Agreement, execute, create, institute, modify, amend or terminate any pension, retirement, savings, stock purchase, stock bonus, stock ownership, stock option, stock appreciation or depreciation right 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 ICB 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;

 

(xi)           amend, modify or restate ICB’s or any of its Subsidiaries organizational documents from those in effect on the date of this Agreement and as delivered to ONB;

 

(xii)           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 the assets (other than in the ordinary course consistent with past practice) of ICB or any of its subsidiaries, or enter into any agreement or commitment relative to the foregoing;

 

(xiii)           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, unless the same are being contested in good faith;

 

(xiv)           issue, or authorize the issuance of, any securities convertible into or exchangeable for any shares of the capital stock of ICB or any of its Subsidiaries;

 

(xv)           open, close, move or, in any material respect, expand, diminish, renovate, alter or change any of its offices or branches, other than as disclosed in the ICB Disclosure Schedule;

 

(xvi)           pay or commit to pay any management or consulting or other similar type of fees other than as disclosed in the ICB Disclosure Schedule;

 

(xvii)           change in any material respect its accounting methods, except as may be necessary and appropriate to conform to changes in tax laws requirements, changes in GAAP or regulatory accounting principles or as required by ICB’s independent auditors or its regulatory authorities;

 

(xviii)           change in any material respects its underwriting, operating, investment or risk management or other similar policies of ICB or any of its Subsidiaries except as required by applicable law or policies imposed by any regulatory authority or governmental entity;

 

(xix)           make, change or revoke any material tax election, file any material amended tax return, enter into any closing agreement with respect to a material amount of taxes, settle any material tax claim or assessment or surrender any right to claim a refund of a material amount of taxes;  or

 

(xx)           enter into any contract, agreement, lease, commitment, understanding, arrangement or transaction or incur any liability or obligation (other than as contemplated by Section 5.03(a)(vii) hereof and legal, accounting and fees related to the Merger) requiring payments by ICB or any of its Subsidiaries which exceed $100,000, whether individually or in the aggregate, or that is not a trade payable or incurred in the ordinary course of business.

 

(b)           On and after the date of this Agreement and until the Effective Time or until this Agreement is terminated as herein provided, each of ICB and its Subsidiaries shall: (i) carry on its business diligently, substantially in the manner as is presently being conducted and in the ordinary course of business; (ii) use commercially reasonable efforts to preserve its business organization intact, keep available the services of the present officers and employees and preserve its present relationships with customers and Persons having business dealings with it; (iii) use commercially reasonable efforts to maintain all of the properties and assets that it owns or utilizes in the operation of its business as currently conducted in good operating condition and repair, reasonable wear and tear excepted; (iv) maintain its books, records and accounts in the usual, regular and ordinary manner, on a basis consistent with prior years and in compliance in all material respects with all statutes, laws, rules and regulations applicable to them and to the conduct of its business; (v) timely file all SEC Reports; (vi) 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 it is a party or by which it is or may be subject or bound which would reasonably be expected to have a Material Adverse Effect on ICB; and (vii) at all times comply with all statutory, regulatory and contractual requirements applicable to them in connection with their participation in the Capital Purchase Program, and deliver immediately to ONB true and complete copies of all notices and other communications given or received by them with respect to the Capital Purchase Program or compliance or alleged noncompliance with its requirements, the ICB TARP Preferred Stock, the ICB TARP Warrant or any agreement relating to any of the foregoing.

 

5.04           Insurance.   ICB and its Subsidiaries shall maintain, or cause to be maintained, in full force and effect, insurance on its assets, properties and operations, fidelity coverage and directors’ and officers’ liability insurance in such amounts and with regard to such liabilities and hazards as are currently insured by ICB or its Subsidiaries as of the date of this Agreement.

 

5.05           Accruals for Loan Loss Reserve and Expenses.

 

(a)           Prior to the Effective Time, ICB shall and shall cause its Subsidiaries to make, consistent with GAAP, the rules and regulations of the SEC and applicable banking laws and regulations, such appropriate accounting entries in its books and records and use commercially reasonable efforts to take such other actions as ICB and its Subsidiaries shall deem to be necessary or desirable in anticipation of the Merger including, without limitation, accruals or the creation of reserves for employee benefits and Merger-related expenses.

 

(b)           ICB recognizes that ONB may have adopted different loan and accounting policies and practices (including loan classifications and levels of loan loss allowances).  Subject to applicable law (including without limitation the rules and regulations of the SEC, applicable banking laws and regulations and GAAP), from and after the date hereof ICB shall consult and cooperate in good faith with ONB with respect to conforming the loan and accounting policies and practices of ICB to those policies and practices of ONB for financial accounting and/or income tax reporting purposes, as reasonably specified in each case in writing from ONB to ICB, based upon such consultation and subject to the conditions in Section 5.05(d).

 

(c)           Subject to applicable law (including without limitation the rules and regulations of the SEC, applicable banking laws and regulations and GAAP), ICB shall consult and cooperate in good faith with ONB with respect to determining, as reasonably specified in a written notice from ONB to ICB, based upon such consultation and subject to the conditions in Section 5.05(d), the amount and the timing for recognizing for financial accounting and/or income tax reporting purposes of ICB’s expenses of the Merger.

 

(d)           Subject to applicable law (including without limitation the rules and regulations of the SEC, applicable banking laws and regulations and GAAP), ICB shall consult and cooperate in good faith to (i) make such conforming entries to conform the loan and accounting policies and practices of ICB to the policies and practices of ONB as contemplated in Section 5.05(b) above and (ii) recognize ICB’s expenses of the Merger for financial accounting and/or income tax reporting purposes at such times as are reasonably requested in writing by ONB as contemplated in Section 5.05(c) above, but in no event prior to the 5th day next preceding the Closing Date and only after ONB acknowledges that all conditions to its obligation to consummate the Merger have been satisfied and certifies to ICB that ONB will at the Effective Time deliver to ICB the certificate contemplated in Section 7.02(g).

 

(e)           ICB’s representations, warranties and covenants contained in this Agreement shall not be deemed to be untrue or breached in any respect for any purpose as a consequence of any modifications or changes undertaken on account of Section 5.05(d).

 

5.06           Acquisition Proposals.

 

(a)           ICB will, and will cause each of its Subsidiaries to, and its and their respective officers, directors and representatives (including Sandler O’Neill) to, immediately cease and cause to be terminated any existing solicitations, discussions or negotiations with any Person that has made or indicated an intention to make an Acquisition Proposal (as defined below).  During the period from the date of this Agreement through the Effective Time, ICB shall not terminate, amend, modify or waive any material provision of any confidentiality or similar agreement to which ICB or any of its Subsidiaries is a party (other than any involving ONB).

 

(b)           Except as permitted in this Section 5.06, ICB shall not, and shall cause its Subsidiaries and any of their respective directors, officers and representatives (including Sandler O’Neill) not to, (i) solicit, initiate or knowingly encourage or facilitate, or take any other action designed to, or that could reasonably be expected to facilitate (including by way of furnishing non-public information) any inquiries with respect to an Acquisition Proposal, or (ii) initiate, participate in or knowingly encourage any discussions or negotiations or otherwise knowingly cooperate in any way with any Person regarding an Acquisition Proposal; provided, however, that, at any time prior to obtaining the approval of the Merger by ICB’s shareholders, if ICB receives a bona fide Acquisition Proposal that the ICB Board of Directors determines in good faith constitutes or would reasonably be expected to lead to a Superior Proposal (as defined below) that was not solicited after the date hereof and did not otherwise result from a breach of ICB’s obligations under this Section 5.06, ICB may furnish, or cause to be furnished, non-public information with respect to ICB and its Subsidiaries to the Person who made such proposal (provided that all such information has been provided to ONB prior to or at the same time it is provided to such Person) and may participate in discussions and negotiations regarding such proposal if (A) the ICB Board of Directors determines in good faith, and following consultation with financial advisors and outside legal counsel, that failure to do so would be reasonably likely to result in a breach of its fiduciary duties to ICB’s shareholders under applicable law and (B) prior to taking such action, ICB has used its best reasonable efforts to enter into a confidentiality agreement with respect to such proposal that contains a standstill agreement on customary terms. Without limiting the foregoing, it is agreed that any violation of the restrictions contained in the first sentence of this Section 5.06 by any representative (including Sandler O’Neill) of ICB or its Subsidiaries shall be a breach of this Section 5.06 by ICB.

 

(c)           Neither the ICB Board of Directors nor any committee thereof shall (or shall agree or resolve to) (i) fail to make, withdraw or modify in a manner adverse to ONB or propose to withdraw or modify in a manner adverse to ONB (or take any action inconsistent with) the recommendation by such ICB Board of Directors or any such committee of this Agreement or the Merger, or approve or recommend, or propose to recommend, the approval or recommendation of any Acquisition Proposal (any of the foregoing being referred to herein as an “Adverse Recommendation Change”), or (ii) cause or permit ICB or IBTC to enter into any letter of intent, memorandum of understanding, agreement in principle, acquisition agreement, merger agreement, option agreement, joint venture agreement, partnership agreement or other agreement (each, an “Acquisition Agreement”) constituting or related to, or which is intended to or would be reasonably likely to lead to, any Acquisition Proposal (other than a confidentiality agreement referred to in Section 5.06(b)). Notwithstanding the foregoing, at any time prior to the special meeting of ICB’s shareholders to approve the Merger, the ICB Board of Directors may, in response to a Superior Proposal, effect an Adverse Recommendation Change, provided, that the ICB Board of Directors determines in good faith, after consultation with its outside legal counsel

 

and financial advisors, that the failure to do so would be reasonably likely to result in a breach of its fiduciary duties to the shareholders of ICB under applicable Law, and provided, further, that the ICB Board of Directors may not effect such an Adverse Recommendation Change unless (A) the ICB Board shall have first provided prior written notice to ONB (an “Adverse Recommendation Change Notice”) that it is prepared to effect an Adverse Recommendation Change in response to a Superior Proposal, which notice shall, in the case of a Superior Proposal, attach the most current version of any proposed written agreement or letter of intent relating to the transaction that constitutes such Superior Proposal (it being understood that any amendment to the financial terms or any other material term of such Superior Proposal shall require a new notice and a new five business day period) and (ii) ONB does not make, within five business days after receipt of such notice, a proposal that would, in the reasonable good faith judgment of the ICB Board of Directors (after consultation with financial advisors and outside legal counsel), cause the offer previously constituting a Superior Proposal to no longer constitute a Superior Proposal or that the Adverse Recommendation Change is no longer required to comply with the ICB Board’s fiduciary duties to the shareholders of ICB under applicable law. ICB agrees that, during the five business day period prior to its effecting an Adverse Recommendation Change, ICB and its officers, directors and representatives shall negotiate in good faith with ONB and its officers, directors, and representatives regarding any revisions to the terms of the transactions contemplated by this Agreement proposed by ONB.

 

(d)           In addition to the obligations of ICB set forth in paragraphs (a), (b) and (c) of this Section 5.06, ICB shall as promptly as possible, and in any event within two business days after ICB first obtains knowledge of the receipt thereof, advise ONB orally and in writing of (i) any Acquisition Proposal or any request for information that ICB reasonably believes could lead to or contemplates an Acquisition Proposal or (ii) any inquiry ICB reasonably believes could lead to any Acquisition Proposal, the terms and conditions of such Acquisition Proposal, request or inquiry (including any subsequent amendment or other modification to such terms and conditions) and the identity of the Person making any such Acquisition Proposal or request or inquiry. In connection with any such Acquisition Proposal, request or inquiry, if there occurs or is presented to ICB any offer, material change, modification or development to a previously made offer, letter of intent or any other material development, ICB (or its outside counsel) shall (A) advise and confer with ONB (or its outside counsel) regarding the progress of negotiations concerning any Acquisition Proposal, the material resolved and unresolved issues related thereto and the material terms (including material amendments or proposed amendments as to price and other material terms) of any such Acquisition Proposal, request or inquiry, and (B) promptly upon receipt or delivery thereof provide ONB with true, correct and complete copies of any document or communication related thereto.

 

(e)           Nothing contained in this Section 5.06 shall prohibit ICB from at any time taking and disclosing to its shareholders a position contemplated by Rule 14e-2(a) promulgated under the 1934 Act or from making any other disclosure to its shareholders or in any other regulatory filing if, in the good faith judgment of the ICB Board of Directors, after consultation with its outside counsel, failure to so disclose would be reasonably likely to result in a breach of their or ICB’s obligations under applicable law.

 

(f)           For purposes of this Agreement, “Acquisition Proposal” shall mean (i) any inquiry, proposal or offer from any Person or group of Persons (other than as contemplated by

 

this Agreement) relating to, or that could reasonably be expected to lead to, any direct or indirect acquisition or purchase, in one transaction or a series of transactions, of (A) assets or businesses that constitute 20% or more of the revenues, net income or assets of ICB and its Subsidiaries, taken as a whole, or (B) 20% or more of any class of equity securities of ICB or any of its Subsidiaries; (ii) any tender offer or exchange offer that, if consummated, would result in any Person beneficially owning 20% or more of any class of equity securities of ICB or any of its Subsidiaries; (iii) any merger, consolidation, business combination, recapitalization, liquidation, dissolution, joint venture, binding share exchange or similar transaction involving ICB, IBTC or any of its other Subsidiaries pursuant to which any Person or the shareholders of any Person would own 20% or more of any class of equity securities of ICB, IBTC, or any of ICB’s other Subsidiaries or of any resulting parent company of ICB or IBTC; or (iv) any other transaction the consummation of which could reasonably be expected to impede, interfere with, prevent or materially delay the Merger or that could reasonably be expected to dilute materially the benefits to ONB of the transactions contemplated hereby, other than the transactions contemplated hereby.  For purposes of this Section 5.06, a “Person” shall include a natural Person, or any legal, commercial, or Governmental Authority, including, a corporation, general partnership, joint venture, limited partnership, limited liability company, trust, business association, group acting in concert, or any Person acting in a representative capacity.

 

(g)           For purposes of this Agreement, “Superior Proposal” shall mean any Acquisition Proposal (but changing the references to “20% or more” in the definition of “Acquisition Proposal” to “50% or more”) that the ICB Board determines in good faith (after having received the advice of its financial advisors), to be (i) more favorable to the shareholders of ICB from a financial point of view than the Merger (taking into account all the terms and conditions of such proposal and this Agreement (including any break-up fees, expense reimbursement provisions and conditions to consummation and any changes to the financial terms of this Agreement proposed by ONB in response to such offer or otherwise)) and (ii) reasonably capable of being completed without undue delay taking into account all financial, legal, regulatory and other aspects of such proposal.

 

5.07           Press Releases.  Unless prior notice and comment is not possible or practicable as the result of applicable law or any listing or exchange rule, neither ICB nor ONB will issue any press or news releases or make any other public announcements or disclosures relating to the Merger without providing a final copy of such press or news release to the other party and providing such party with a reasonable opportunity to comment on such press or news release.

 

5.08           Material Changes to Disclosure Schedules.  ICB shall promptly supplement, amend and update, upon the occurrence of any change prior to the Effective Time, and as of the Effective Time, the ICB 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 ICB 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 ICB contained herein materially incorrect, untrue or misleading. No such supplement, amendment or update shall become part of the ICB Disclosure Schedule unless ONB shall have first consented in writing with respect thereto.

 

5.09           Access; Information.  ONB and ICB, and their representatives and agents, shall, upon reasonable notice to the other party, at all times during normal business hours prior to the Effective Time, have full and continuing access to the properties, facilities, operations, books and records of the other party. ONB and ICB, and their representatives and agents may, prior to the Effective Time, make or cause to be made such reasonable investigation of the operations, books, records and properties of the other party and their 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 unnecessarily with the normal business operations of ICB or ONB or either of their Subsidiaries. Upon request, ICB and ONB will furnish the other party or its 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 or ICB which has been or is developed by the other party, its auditors, accountants or attorneys (provided with respect to attorneys, such disclosure would not result in the waiver by the other party of any claim of attorney-client privilege), and will permit ONB or ICB or their representatives or agents to discuss such information directly with any individual or firm performing auditing or accounting functions for ICB or ONB, as applicable, and such auditors and accountants will be directed to furnish copies of any reports or financial information as developed to ONB or ICB or its representatives or agents, as applicable. No investigation by ONB or ICB shall affect the representations and warranties made by ICB or ONB herein. Any confidential information or trade secrets received by ONB, ICB or their representatives or agents in the course of such examination will 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 ICB, as applicable, or at ONB’s or ICB’s request, returned to ONB or ICB, as applicable, in the event this Agreement is terminated as provided in Article VIII hereof. Additionally, any confidential information or trade secrets received by ONB or ICB, or either of their agents or representatives in the course of their examinations (whether conducted prior to or after the date of this Agreement) shall be treated confidentially and in accordance with the Confidentiality Agreement (as defined in Section 11.09 hereof). This Section 5.09 will not require the disclosure of any information to ONB or ICB which would be prohibited by law. The ability of ONB or ICB to consult with any tax advisor (including a tax advisor independent from all other entities involved in the transactions contemplated hereby) shall not be limited by this Agreement in any way, provided that any such tax advisor is otherwise subject to and is bound by this Section 5.09. Notwithstanding anything herein to the contrary (other than the preceding sentence), except as reasonably necessary to comply with applicable securities laws, ONB and ICB (and each employee, representative or agent of ONB and ICB) may disclose to any and all Persons, without limitation of any kind, the tax treatment (as defined in Treas. Reg. § 1.6011-4) of the transactions contemplated hereby and all materials of any kind (including opinions or other tax analyses) that are or have been provided to ONB or ICB relating to such tax structure, provided that, in the case of any materials that contain information other than the tax treatment or tax structure of the transactions contemplated hereby (including, but not limited to, any information relating to the pricing or any cost of the transactions contemplated hereby or the identity of any party to the transactions contemplated hereby), this sentence shall apply to such materials only to the extent that such materials contain the tax treatment or tax structure of the transactions contemplated hereby and ONB and ICB shall take all action necessary to prevent the

 

disclosure of such other information as otherwise provided herein. The immediately preceding sentence shall not be effective until the earliest of (a) the date of the public announcement of discussions relating to any of the transactions contemplated hereby, (b) the date of the public announcement of any of the transactions contemplated hereby or (c) the date of the execution of an agreement, with or without conditions, to enter into any of the transactions contemplated hereby.

 

5.10           Financial Statements.   As soon as reasonably available after the date of this Agreement, ICB will deliver to ONB any additional audited consolidated financial statements which have been prepared on its behalf or at its direction, the monthly consolidated unaudited balance sheets and profit and loss statements of ICB prepared for its internal use, IBTC’s Call Reports 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 ICB Financial Statements”). The Subsequent ICB Financial Statements will be prepared on a basis consistent with past accounting practices and GAAP to the extent applicable and shall present fairly the financial condition and results of operations as of the dates and for the periods presented (except in the case of unaudited financials or Call Report information for the absence of notes and/or yearend adjustments). The Subsequent ICB 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 material respect. As soon as internally available after the date of this Agreement, ONB will deliver to ICB any additional audited consolidated financial statements which have been prepared on its behalf or at its direction and the quarterly consolidated unaudited balance sheets and profit and loss statements of ONB (collectively, “Subsequent ONB Financial Statements”). The Subsequent ONB Financial Statements will be prepared on a basis consistent with past accounting practices and GAAP to the extent applicable and shall present fairly the financial condition and results of operations as of the dates and for the periods presented (except in the case of unaudited financials or Call Report information for the absence of notes and/or yearend adjustments). The Subsequent ONB 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 material respect.

 

5.11           Environmental.

 

(a)           If requested by ONB, ICB will cooperate with an environmental consulting firm designated by ONB in connection with the conduct by such firm of a phase one and/or phase two environmental investigation on all real property owned or leased by ICB or any of its Subsidiaries as of the date of this Agreement, and any real property acquired or leased by ICB or any of its Subsidiaries after the date of this Agreement.  ONB shall be responsible for the costs of the phase ones and, if any phase twos are determined to be advisable by the environmental consulting firm, ICB and ONB shall each be responsible for 50% of the costs of the phase twos.

 

(b)           If the environmental consultant’s good faith estimate, based upon the results of the environmental studies and other diligence conducted by the environmental consultant, of the

 

dollar amount, if any, that ICB and its Subsidiaries would be required to expend under applicable Environmental Laws for clean-up, remediation and penalties relating to pollutants, contaminants, wastes, toxic substances, petroleum, petroleum products and any other materials regulated under the Environmental Laws with respect to ICB or its Subsidiaries owned or leased real properties or any adjoining properties, is in excess of $1.5 million, then ONB shall have the right to terminate this Agreement pursuant to Section 8.01(c)(iv), which termination shall be ONB’s sole remedy in such event.

 

5.12           Governmental Reports and Shareholder Information.  Promptly upon its becoming available, ICB shall furnish to ONB one (1) copy of each financial statement, report, notice, or proxy statement sent by ICB to any Governmental Authority or to ICB’s shareholders generally and of each SEC Report filed by ICB, and of any order issued by any Governmental Authority in any proceeding to which ICB is a party.  For purposes of this Agreement, “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 the applicable party or its business, operations or properties.

 

5.13           Adverse Actions.  ICB shall not knowingly take any action that is intended or is reasonably likely to result in (a) any of its representations and warranties set forth in this Agreement being or becoming untrue in any respect at any time at or prior to the Effective Time, subject to the standard set forth in Section 7.01(a), (b) any of the conditions to the Merger set forth in Article VII not being satisfied, (c) a material violation of any provision of this Agreement or (d) a material delay in the consummation of the Merger except, in each case, as may be required by applicable law or regulation.

 

5.14           Employee Benefits.  Except as contemplated by Section 6.03(j) hereof, neither the terms of Section 6.03 hereof nor the provision of any employee benefits by ONB or any of its Subsidiaries to employees of ICB or any of its Subsidiaries shall: (a) create any employment contract, agreement or understanding with or employment rights for, or constitute a commitment or obligation of employment to, any of the officers or employees of ICB or any of its Subsidiaries; or (b) 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.

 

5.15           Disposition of Fully Insured Welfare Benefit and Sec. 125 Plans.

 

(a)           All fully insured welfare benefit (health, dental/vision, life/AD&D, LTD), and Internal Revenue Code Section 125, or “cafeteria,” plans currently sponsored by ICB shall continue as separate plans after the Effective Time, until such time as ONB determines, in its sole discretion, that it will terminate any or all of such plans.

 

(b)           As of the Effective Time ICB shall take, or cause to be taken, all actions necessary to assign any and all applicable group insurance policies to ONB and to provide ONB all necessary financial, enrollment, eligibility, contractual and other information related to its welfare benefit and cafeteria plans to assist ONB in the administration of such plans.

 

(c)           From the date of this Agreement through the Effective Time IBC shall continue to: (i) pay the applicable insurance premiums necessary to continue the benefits under ICB’s fully insured welfare benefit plans; and (ii) contribute to the cafeteria plan the pre-tax amounts which the cafeteria plan participants elect to defer from compensation.

 

(d)           As of the date of any future termination of the ICB cafeteria plan, the balances in the health and dependent care flexible spending accounts thereunder shall be transferred to the ONB cafeteria plan, and the benefit and compensation deferral elections in effect at that time shall be continued under the ONB cafeteria plan, subject to subsequent changes as provided in the ONB plan.  All benefit payments related to the transferred balances shall be made in accordance with the ONB cafeteria plan.

 

5.16           ICB 401(k) Plan.  Prior to the Effective Time:

 

(a)           ICB, by resolution of its directors, shall terminate the 401(k) Plan as of the day before the Effective Time.  The account balances of the 401(k) Plan participants, including any alternate payees or beneficiaries of deceased participants, including any accrued but unpaid contributions, as determined by the 401(k) Plan administrator, shall thereafter be distributed or otherwise transferred in accordance with the applicable plan termination provisions of the 401(k) Plan, as soon as administratively feasible following the plan termination date.

 

(b)           ICB shall continue to make all non-discretionary employer contributions which it is required to make to the 401(k) Plan, including elective deferral contributions of those 401(k) Plan participants who are employed by ICB or its Subsidiaries.  In addition, ICB shall continue in full force and effect, until the Effective Time: (i) the fidelity bond, if any, issued to ICB as described in ERISA Sec. 4.12; and (ii) the ERISA fiduciary liability insurance policy currently in effect, if any, for the benefit of the covered fiduciaries of the 401(k) Plan.

 

5.17           Defined Benefit Plan.  As of the Effective Time, ICB shall transfer sponsorship of its participation in the Pentegra Defined Benefit Plan for Financial Institutions to ONB and ONB will assume such sponsorship.

 

5.18           Excess Benefit Plan.  ICB and IBTC, as applicable, shall terminate the Home Federal Savings Bank Excess Benefit Plan Agreement between IBTC and John K. Keach, Jr. in accordance with Treasury Regulation §1.409A-3(j)(4)(ix)(B).  The present value of the benefits payable to Mr. Keach under the Excess Benefit Plan will be distributed on the Closing Date.

 

5.19           Supplemental Executive Retirement Agreements.  ICB and IBTC, as applicable, shall terminate each Supplemental Executive Retirement Agreement between ICB or IBTC and one of its employees in accordance with Treasury Regulation §1.409A-3(j)(4)(ix)(B), and each Director Deferred Compensation Agreement or Director Compensation Agreement between ICB or IBTC and John K. Keach, Sr., Buryl S. Line, and Lewis Essex subject to any consents required to such terminations by the parties thereto.  Accrued benefits under the agreements will be distributed on the Closing Date, subject to any consents thereto required from parties to those agreements; provided, however, that Mark T. Gorski shall receive the present value of the benefits payable to him at the effective date as provided in this agreement.

 

5.20           Director Deferred Fee Agreements  Prior to the Effective Time, ICB shall provide ONB with all financial, enrollment, investment, deferral election and other information related to each director fee deferral agreement (collectively, the “ICB Deferred Fee Agreements”) to assist ONB in the subsequent administration of the provisions of such agreements.  From and after the Effective Time, no further deferrals shall be permitted under the ICB Deferred Fee Agreements.  Immediately following the Effective Time, and subject to any consents required from the directors who are parties to such agreements, the Directors Deferred Compensation Plan sponsored by ONB (the “ONB Directors’ Plan”) will be amended to integrate the ICB Deferred Agreements consistent with the requirements of Section 409A of the Code and in a manner that preserves the grandfathered status of any deferred amounts that are not subject to Section 409A of the Code.  The ICB Deferred Fee Agreements will become subject to all provisions of the ONB Directors’ Plan, with the exception that benefits attributable to the ICB Deferred Fee Agreements shall only be distributed in accordance with the distribution provisions in place under the ICB Deferred Fee Agreements prior to the Effective Time.

 

5.21           ICB Incentive Plans.  Immediately on or prior to the Effective Time, ICB shall, subject to the occurrence of the Effective Time, terminate the Indianapolis Growth Market Plan and Senior Management Annual Incentive Compensation Plan, and the accrued benefits as of the Closing Date based on performance metrics achieved under those plans as of such date shall be paid in a lump sum on or prior to the Effective Time.

 

5.22           Prohibition Against Further Equity Grants.  From and after the date of this Agreement, ICB shall not award any additional equity grants or awards of any kind under any of the ICB option plans or long-term incentive plans.

 

5.23           Dividend Reinvestment Plan.  ICB shall terminate the Indiana Community Bancorp Automatic Dividend Reinvestment and Stock Purchase Plan effective no later than the Effective Time.

 

5.24           Short-Swing Trading Exception.  ICB’s Board of Directors shall adopt such resolutions as are necessary to cause any shares of ICB Common Stock owned by executive officers and directors of ICB and canceled in the Merger to qualify for the exemptions provided in Rule 16b-3(d) under the 1934 Act.

 

5.25           Trust Preferred Securities.  Upon the Effective Time, ONB shall assume the due and punctual performance and observance of the covenants and conditions to be performed by ICB under the Indenture dated September 15, 2006 (the “Indenture”) between ICB and Bank of America National Association, as Trustee, relating to Capital Securities due September 15, 2036 (the “Capital Securities”), and the due and punctual payments of the principal of and premium, if any, and interest on the Capital Securities, as required by Article XI of the Indenture.  In connection therewith, ONB shall execute and deliver any supplemental indentures, and the parties hereto shall provide any opinion of counsel to the trustee thereof, required to make such assumptions effective.

 

5.26           Written Opinion of Financial Advisor.  ICB shall receive within ten (10) days of this Agreement the written fairness opinion of Sandler O’Neill that the Exchange Ratio, as of the date of this Agreement, is fair to the shareholders of ICB from a financial point of view.

 

5.27           ICB TARP Preferred Stock.  ICB shall use its reasonable best efforts to cause or facilitate the TARP Purchase in accordance with Section 2.01(c) hereof. In furtherance of the foregoing, ICB shall provide, and shall cause its Subsidiaries and its and their representatives to provide, all reasonable cooperation and take all reasonable actions as may be requested by ONB in connection with such repurchase, including by (i) furnishing all information concerning ICB and its Subsidiaries that ONB or any applicable Governmental Entity may request in connection with such repurchase or with respect to the effects of such purchase on ONB or its pro forma capitalization, (ii) assisting with the preparation of any analyses or presentations ONB deems necessary or advisable in its reasonable judgment in connection with such repurchase or the effects thereof and (iii) entering into any agreement with such holder (including any letter agreement among ICB, ONB and such holder) to effect the repurchase of such shares as ONB may reasonably request.

 

5.28           Stock Pledge Agreement.  At or prior to the Effective Time, ICB shall terminate the Stock Pledge Agreement, dated February 2, 2009 (the "Pledge Agreement"), between ICB and Cole Taylor, such that any IBTC shares of stock shall be released from any liens or restrictions created under the Pledge Agreement.

 

 

 

ONB covenants and agrees with ICB as follows:

 

6.01           Other Approvals.  ONB shall have primary responsibility for the preparation, filing and costs of all bank regulatory applications require for consummation of the Merger, and shall file such applications as promptly as practicable and in the most expeditious manner practicable, and in any event, within thirty (30) days after the execution of this Agreement.  ONB shall provide to ICB’s counsel copies of all applications filed and copies of all material written communications with all state and federal bank regulatory agencies relating to such applications.  ONB shall proceed expeditiously, cooperate fully and use its best efforts to procure, upon terms and conditions reasonably acceptable to ONB, all consents, authorizations, approvals, registrations and certificates, to complete all filings and applications and to satisfy all other requirements prescribed by law which are necessary for consummation of the Merger on the terms and conditions provided in this Agreement at the earliest possible reasonable date.

 

6.02           SEC Registration.

 

(a)           ONB shall file with the SEC as promptly as practicable and in the most expeditious manner practicable 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 reasonable 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 ICB, prepared for use in connection with the meeting of shareholders of ICB referred to in

 

Section 5.01 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.

 

(b)           Any materials or information provided by ONB for use 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)           ONB will use reasonable best efforts to list for trading on NYSE (subject to official notice of issuance) prior to the Effective Time, the shares of ONB Common Stock to be issued in the Merger.

 

6.03           Employee Benefit Plans.

 

(a)           ONB shall make available to the officers and employees of ICB or any Subsidiary who continue as employees of ICB or any Subsidiary after the Effective Time (“Continuing Employees”), substantially the same employee benefits on substantially the same terms and conditions as ONB offers to similarly situated officers and employees.  Continuing Employees will receive credit for prior service with ICB or its Subsidiaries, or their predecessors, for purposes of eligibility and vesting under the employee benefit plans of ONB and its Subsidiaries. To the extent that ONB determines, in its sole discretion, that ICB’s employee benefit plans should be terminated, Continuing Employees shall become eligible to participate in ONB’s employee benefit plans as soon as reasonably practicable after termination. In the event that ONB determines, in its sole discretion, to terminate the ICB health plan, retirees of ICB and any Subsidiary who are participating in the ICB health plan as of the date it is terminated (“Eligible Retirees”) will be eligible to participate in the ONB health plans in accordance with terms of the ONB health plans.  Continuing Employees who become covered under the health or dental plans of ONB shall not be subject to any waiting periods or additional pre-existing condition limitations under the health and dental plans of ONB or its Subsidiaries in which they are eligible to participate than they otherwise would have been subject to under the health and dental plans of ICB.  Eligible Retirees who become covered under the health plan of ONB shall not be subject to any waiting periods or additional pre-existing condition limitations under the health plan of ONB or its Subsidiaries in which they are eligible to participate than they otherwise would have been subject to under the health plan of ICB.  To the extent that the initial period of coverage for Continuing Employees or any Eligible Retirees under age 65 under any such ONB employee benefit plans is not a full 12-month period of coverage, Continuing Employees and any Eligible Retirees under age 65 shall be given credit under the applicable plan for any deductibles and co-insurance payments made by such Continuing Employees and any Eligible Retirees under age 65 under the corresponding ICB plan during the balance of such 12-month period of coverage provided that ONB can obtain, in a manner satisfactory to ONB, as determined in its sole discretion, the necessary data.

 

(b)           As of the Effective Time, subject to applicable law and the requirements of the Old National Bancorp Employee Stock Ownership and Savings Plan (“ONB KSOP”), ONB shall amend as necessary the ONB KSOP so that, (i) from and after the Effective Time,  Continuing

 

Employees will accrue benefits pursuant to the ONB KSOP, and (ii) Continuing Employees participating in the ONB KSOP shall receive credit for eligibility and vesting purposes, for the service of such employees with ICB and its Subsidiaries or their predecessors prior to the Effective Time, as if such service were with ONB or its Subsidiaries.

 

(c)           In accordance with Section 6.03(a) hereof, after the Effective Time, ONB shall continue to maintain all fully insured employee welfare benefit, and cafeteria, plans currently in effect at the Effective Time, until such time as ONB determines, in its sole discretion, to modify or terminate any or all of those plans.  Claims incurred under the employee welfare benefit and cafeteria plans prior to plan termination shall be paid in accordance with the applicable plan’s claim submission procedures and deadlines.

 

(d)           All Continuing Employees shall be subject to ONB’s vacation policy as of the first day of the calendar year next following the Effective Time.  For the calendar year during which the Effective Time occurs, Continuing Employees will continue to earn and use vacation in accordance with the terms of the ICB vacation policy in effect on the day prior to the Effective Time.

 

(e)           After the Effective Time, mileage for Continuing Employees’ business-related travel shall be reimbursed according to ONB’s reimbursement policy for mileage, consistent with the applicable provisions of the Code.

 

(f)           After the Effective Time, ICB’s sick time policy shall terminate and all Continuing Employees shall be subject to ONB’s sick time policy.  Notwithstanding the foregoing, all accrued and unpaid sick time of employees of IBC and its subsidiaries at the Effective Time, up to but not beyond one hundred sixty (160) hours per Continuing Employee, shall be carried over to ONB’s sick time policy.

 

(g)           After the Effective Time, ONB shall continue to maintain and administer, in accordance with the provisions thereof, the ICB Stock Option Plans until such time as all options granted or awarded thereunder as of the Effective Time have been exercised or lapse, whichever occurs first.

 

(h)           Until the Effective Time, ICB or a Subsidiary of ICB, whichever is applicable, shall be liable for all obligations for continued health coverage pursuant to Section 4980B of the Code and Section 601 through 609 of ERISA (“COBRA”) for eligible employees who incur a qualifying event before the Effective Time.  ONB or an ONB Subsidiary, whichever is applicable, shall after the Effective Time be liable for (i) all obligations for continued health coverage under COBRA with respect to each qualified beneficiary of ICB or a Subsidiary of ICB who incurs a termination on and after the Effective Time, and (ii) for continued health coverage under COBRA from and after the Effective Time for each qualified beneficiary of ICB or a Subsidiary of ICB who incurs a qualifying event before the Effective Time.

 

(i)           Severance.  With the exception of the employees referenced in Sections 6.03(j), 6.03(k) and 6.03(l) of this Agreement, those employees of ICB or any Subsidiary as of the Effective Time whom ONB or its subsidiaries elect not to employ after the Effective Time or who are terminated within twelve months from the Effective Time due to Involuntary

 

Termination (“Separated Employees”) shall be entitled to severance benefits equal to one week of pay for each year of service with ICB or its subsidiaries and ONB or its subsidiaries. For the purpose of this subsection Involuntary Termination means termination due to: (1) a reduction in force or other permanent lack of work, as determined by ONB; (2) a reorganization or consolidation of or within ONB or its subsidiaries that eliminates the employee’s position, or (3) the closing or divesture of an ONB facility or business location.  Notwithstanding the foregoing, a Separated Employee will not be considered to have incurred an Involuntary Termination where he or she was offered both a reasonable comparable position and reasonably comparable pay, as determined by ONB, within ONB or any of its subsidiaries or any successor company with pay that was to be at least ninety percent (90%) of his or her compensation at the time of termination and where such comparable position was within a reasonable commuting distance of thirty-five (35) miles of the Separated Employee’s primary residence.   Any severance payment under this subsection will be subject to and conditioned upon the Separated Employee’s execution of a severance agreement, in a form acceptable to ONB, that includes a full release of all federal and state law claims against ICB or any Subsidiary and against ONB or any of its subsidiaries arising out of the Separated Employee’s employment, including any claims based on discrimination.  In addition, in order to receive any severance payments under this subsection, a Separated Employee must work until the termination date specified by ONB or any of its subsidiaries.  A year of service will be determined based on each Separated Employees’ employment anniversary date.  Credit will be given for partial years of service by rounding up a Separated Employee with a fractional year of service of six months of service or more to the next full year and rounding down any Separated Employee with a fractional year of service that is less than six months of service.  For example, a Separated Employee with ten years and 7 months of service will be credited with eleven years of service for purposes of determining his or her severance pay.  A Separated Employee with ten years and 4 months of service will be credited with ten years of service for purposes of determining his or her severance pay. Notwithstanding the foregoing, no Separated Employees will receive less than five weeks of severance pay regardless of his or her years of service.  Effective as of the day following the day which is twelve months after the Effective Time, all ICB employees who become employees of ONB will be subject to the severance policies of ONB.  Nothing in this Section  shall be deemed to limit or modify ONB’s at-will employment policy.

 

(j)           As of the Effective Time, ONB shall assume the change in control agreements between ICB or IBTC and the two employees listed in the ICB Disclosure Schedule as being party to such agreements, and will pay to them the benefits to which they are entitled under those agreements on the next business day following the Closing.

 

(k)           ONB shall, on or before the Effective Time, offer a Severance Agreement with Mark T. Gorski substantially in the form of Exhibit 6.03(k) hereof.  ONB has also made an offer of employment dated January 19, 2012, to Mark T. Gorski which has been accepted by Mr. Gorski.

 

(l)           ONB shall, on or before the Effective Time, offer an Employment Agreement with John J. Keach, Jr. substantially in the form of Exhibit 6.03(l) hereof.

 

(m)           ONB shall authorize the payment of and pay retention bonuses upon reaching certain milestones to selected employees of ICB identified by ONB and ICB, in amounts to be agreed to by ICB and ONB; provided, however, that the aggregate cost of the retention bonuses shall not exceed the amount set forth on the ONB Disclosure Schedule.

 

6.04           Adverse Actions.  ONB shall not knowingly take any action that is intended or is reasonably likely to result in (a) any of its representations and warranties set forth in this Agreement being or becoming untrue in any respect at any time at or prior to the Effective Time, subject to the standard set forth in Section 7.02(b), (b) any of the conditions to the Merger set forth in Article VII not being satisfied, (c) a material violation of any provision of this Agreement or (d) a material delay in the consummation of the Merger except, in each case, as may be required by applicable law or regulation.

 

6.05           D&O Insurance.  ONB shall cause the individuals serving as officers and directors of ICB and IBTC immediately before the Effective Time to be covered for a period of one (1) year from the Effective Time by the directors’ and officers’ liability insurance policy maintained by ICB (provided that ONB may substitute therefor policies of at least the same coverage and amounts containing terms and conditions that are not less advantageous to such officers and directors than such policy) with respect to acts or omissions occurring before the Effective Time; provided, further, that in no event shall ONB be required to expend pursuant to this Section 6.05 more than an amount per year equal to 200% of the annual premiums paid by ICB as of the Effective Time for such insurance; provided, however, that if the cost exceeds such limit, ONB shall use its reasonable efforts to obtain as much comparable insurance as is available for the Insurance Amount.

 

6.06           Short-Swing Trading Exemption.  Prior to the Closing Date, the Board of Directors of ONB shall adopt such resolutions as necessary to cause any shares of ONB Common Stock to be received by executive officers and directors of ICB as part of the Merger Consideration to qualify for the exemptions provided in Rule 16b-3(d) under the 1934 Act.

 

6.07           Material Changes to ONB Disclosure Schedules.  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 materially incorrect, untrue or misleading.  No such supplement, amendment or update shall become part of the ONB Disclosure Schedule unless ICB shall have first consented in writing with respect thereto.

 

6.08           Governmental Report and Shareholder Information.  Promptly upon its becoming publicly available, ONB shall furnish to ICB one (1) copy of each financial statement, report, notice, or proxy statement sent by ONB to any Governmental Authority or to ONB’s shareholders generally and of each SEC Report filed by ONB with the SEC or any successor agency, and of any order issued by any Governmental Authority in any proceeding to which ONB is a party.

 

 

 

7.01           ONB.  The obligation of ONB to consummate the Merger is subject to the satisfaction and fulfillment of each of the following conditions on or prior to the Effective Time, unless waived in writing by ONB:

 

(a)           Representations and Warranties at Effective Time.   Each of the representations and warranties of ICB contained in this Agreement shall be true, accurate and correct in all material respects 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 (except that representations and warranties that by their express terms speak as of the date of this Agreement or some other date shall be true and correct only as of such date); provided that no representation or warranty of ICB, except for Section 3.03(a) hereof, shall be deemed untrue, inaccurate or incorrect for purposes hereunder as a consequence of the existence of any fact, event or circumstance inconsistent with such representation or warranty, unless such fact, event or circumstance, individually or taken together with all other facts, events or circumstances inconsistent with any representations or warranty of ICB, has had or would result in a Material Adverse Effect on ICB.

 

(b)           Covenants.   Each of the covenants and agreements of ICB shall have been fulfilled or complied with in all material respects from the date of this Agreement through and as of the Effective Time.

 

(c)           Deliveries at Closing.   ONB shall have received from ICB at the Closing (as hereinafter defined) the items and documents, in form and content reasonably satisfactory to ONB, set forth in Section 10.02(b) hereof.

 

(d)           Registration Statement Effective.   ONB shall have registered its shares of ONB Common Stock to be issued to shareholders of ICB in accordance with this Agreement with the SEC pursuant to the 1933 Act, and all state securities and blue sky approvals, authorizations and exemptions required to offer and sell such shares shall have been received by ONB. The Registration Statement with respect thereto shall have been declared effective by the SEC and no stop order shall have been issued or threatened.

 

(e)           Regulatory Approvals.   All regulatory approvals required to consummate the transactions contemplated hereby (“Regulatory Approvals”) 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 ICB or (ii) reduce the benefits of the transactions contemplated hereby to such a degree that ONB would not have entered into this Agreement had such conditions, restrictions or requirements been known at the date hereof.

 

(f)           Shareholder Approval.  The shareholders of ICB shall have approved and adopted this Agreement as required by applicable law and its Articles of Incorporation.

 

(g)           Officers’ Certificate.   ICB shall have delivered to ONB a certificate signed by its President and its Secretary, dated as of the Effective Time, certifying that: (i)  the representations and warranties of ICB contained in Article III are true, accurate and correct in all respects on and as of the Effective Time, subject to the standard specified in Section 7.01(a) above; (ii) all the covenants of ICB have been complied with in all material respects from the date of this Agreement through and as of the Effective Time; and (iii) ICB has satisfied and fully complied with all conditions necessary to make this Agreement effective as to it.

 

(h)           Tax Opinion.  The Board of Directors of ONB shall have received a written opinion of the law firm of Krieg DeVault LLP, dated as of the Effective Time, in form and content reasonably satisfactory to ONB, to the effect that the Merger to be effected pursuant to this Agreement will constitute a tax-free reorganization under the Code (as described in Section 1.03 hereof) to each party hereto and to the shareholders of ICB, except with respect to cash received by the shareholders of ICB for fractional shares resulting from application of the Exchange Ratio and pursuant to Section 2.03 hereof.  In rendering such opinion, counsel may require and rely upon customary representation letters of the parties hereto and rely upon customary assumptions.

 

(i)           280G Opinion.   ONB shall have received a letter of tax advice, in a form satisfactory to ONB and at its expense, from ICB’s outside, independent certified public accountants to the effect that any amounts that are paid by ICB before the Effective Time, or required under ICB’s Plans or this Agreement to be paid at or after the Effective Time, to Persons who are disqualified individuals in respect of ICB, its Subsidiaries or their successors, and that otherwise should be allowable as deductions for federal income tax purposes, should not be disallowed as deductions for such purposes by reason of Section 280G of the Code.

 

(j)           Material Proceedings.  None of ONB, ICB, or either of their Subsidiaries, shall be subject to any statute, rule, regulation, injunction, order or decree, which shall have been enacted, entered, promulgated or enforced, which prohibits, prevents or makes illegal completion of the Merger, and no material claim, litigation or proceeding shall have been initiated or threatened relating to the Agreement or the Merger or seeking to prevent the completion of the Merger.

 

(k)          Listing.  The shares of ONB Common Stock to be issued in the Merger shall have been approved for listing on the NYSE, subject to official notice of issuance.

 

(l)           Delinquent Loans.  As of the Computation Date, ICB shall not hold ICB Delinquent Loans in an amount in excess of $49.5 million.

 

(m)         Special Loans.  As of the Computation Date, the Credit Mark shall not be greater than $43.982 million.

 

(n)          ICB Consolidated Shareholders’ Equity.  As of the end of the month prior to the Effective Time, the ICB Consolidated Shareholders’ Equity (as such term is defined below), shall not be less than $59.862 million.  “ICB Consolidated Shareholders’ Equity” shall be the consolidated shareholders’ equity of ICB less (i) the ICB TARP Preferred Stock and (ii) the net accumulated other comprehensive income/(loss) as of the Computation Date, determined in

 

accordance with GAAP, to which shall be added the following amounts (which amounts shall also be calculated in accordance with GAAP):  (i) any accruals, reserves, or charges resulting from expenses of the Merger and other transactions contemplated by this Agreement, (ii) any accruals, reserves or charges taken by ICB at the request of ONB pursuant to Section 5.05 hereof; and (iii) any losses after December 31, 2011, relating to a Special Loan (including charge offs, write downs or losses arising from the sale or refinancing of such Special Loan) which do not exceed the loan charges determined by ONB with respect to such Special Loan, as reflected on the Special Loan list included in the ONB Disclosure Schedule.

 

(o)           TARP.  The TARP Purchase shall have occurred.

 

7.02           ICB.  The obligation of ICB to consummate the Merger is subject to the satisfaction and fulfillment of each of the following conditions on or prior to the Effective Time, unless waived in writing by ICB:

 

(a)           Representations and Warranties at Effective Time.  Each of the representations and warranties of ONB contained in this Agreement shall be true, accurate and correct in all material respects 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 (except that representations and warranties that by their express terms speak as of the date of this Agreement or some other date shall be true and correct only as of such date); provided that no representation or warranty of ONB shall be deemed untrue, inaccurate or incorrect for purposes hereunder as a consequence of the existence of any fact, event or circumstance inconsistent with such representation or warranty, unless such fact, event or circumstance, individually or taken together with all other facts, events or circumstances inconsistent with any representations or warranty of ONB, has had or would result in a Material Adverse Effect on ONB.

 

(b)           Covenants.  Each of the covenants and agreements of ONB shall have been fulfilled or complied with in all material respects from the date of this Agreement through and as of the Effective Time.

 

(c)           Deliveries at Closing.   ICB shall have received from ONB at the Closing the items and documents, in form and content reasonably satisfactory to ICB, listed in Section 10.02(a) hereof.

 

(d)           Registration Statement Effective.   ONB shall have registered its shares of ONB Common Stock to be issued to shareholders of ICB 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 ONB and no stop order shall have been issued or threatened.

 

(e)           Regulatory Approvals.   All Regulatory Approvals shall have been obtained and shall remain in full force and effect and all statutory waiting periods in respect thereof shall have expired.

 

(f)           Shareholder Approvals.   The shareholders of ICB shall have approved and adopted this Agreement as required by applicable law and such entity’s Articles of Incorporation.

 

(g)           Officers’ Certificate.   ONB shall have delivered to ICB a certificate signed by its Chairman or President and its Secretary, dated as of the Effective Time, certifying that: (i)  the representations and warranties of ONB contained in Article IV are true, accurate and correct in all respects on and as of the Effective Time, subject to the standard specified in Section 7.02(a) above; (ii) all the covenants of ONB have been complied with in all material respects from the date of this Agreement through and as of the Effective Time; and (iii) ONB has satisfied and fully complied with all conditions necessary to make this Agreement effective as to it.

 

(h)           Tax Opinion.  The Board of Directors of ICB shall have received a written opinion of the law firm of Krieg DeVault LLP, dated as of the Effective Time, in form and content reasonably satisfactory to ICB, to the effect that the Merger to be effected pursuant to this Agreement will constitute a tax-free reorganization under the Code (as described in Section 1.03 hereof) to each party hereto and to the shareholders of ICB, except with respect to cash received by the shareholders of ICB for fractional shares resulting from application of the Exchange Ratio and pursuant to Section 2.03 hereof.  In rendering such opinion, counsel may require and rely upon customary representation letters of the parties hereto and rely upon customary assumptions.

 

(i)           Listing.  The shares of ONB Common Stock to be issued in the Merger shall have been approved for listing on the NYSE, subject to official notice of issuance.

 

(j)           Material Proceedings.  None of ONB, ICB, or any Subsidiary of ONB or ICB, shall be subject to any statute, rule, regulation, injunction, order or decree, which shall have been enacted, entered, promulgated or enforced, which prohibits, prevents or makes illegal completion of the Merger, and no material claim, litigation or proceeding shall have been initiated or threatened relating to the Agreement or the Merger or seeking to prevent the completion of the Merger.

 

 

 
 

8.01           Termination. This Agreement may be terminated and abandoned at any time prior to the Closing Date, only as follows:

 

(a)           by the mutual written consent of ONB and ICB;

 

(b)           by either of ICB or ONB by written notice to the other:

 

(i)           if the Agreement and the Merger are not approved by the requisite vote of the shareholders of ICB at the meeting of shareholders of ICB contemplated in Section 5.01;

 

(ii)           if any Governmental Authority of competent jurisdiction shall have issued an order, decree, judgment or injunction or taken any other action that permanently restrains, enjoins or otherwise prohibits or makes illegal the consummation of the Merger, and such order, decree, judgment, injunction or other action shall have become final and non-appealable or if any consent or approval of any Governmental Authority

 

whose consent or approval is required to consummate the Merger has been denied and such denial has become final and non-appealable; or

 

(iii)           if the consummation of the Merger shall not have occurred on or before August 31, 2012 (the “Outside Date”); provided that the right to terminate this Agreement under this Section 8.01(b)(iii) shall not be available to any party whose breach of any provision of this Agreement causes the failure of the Merger to occur on or before the Outside Date;

 

(c)           by written notice from ONB to ICB, if:

 

(i)           any event shall have occurred which is not capable of being cured prior to the Outside Date and would result in any condition set forth in Section 7.01 not being satisfied prior to the Outside Date;

 

(ii)           ICB breaches or fails to perform any of its representations, warranties or covenants contained in this Agreement, which breach or failure to perform would give rise to the failure of a condition set forth in Section 7.01, and such condition is incapable of being satisfied by the Outside Date or such breach has not been cured by ICB within 20 business days after ICB’s receipt of written notice of such breach from ONB;

 

(iii)           there has been a Material Adverse Effect on ICB on a consolidated basis as of the Effective Time, as compared to that in existence as of the date of this Agreement; or

 

(iv)           ONB elects to exercise its right to terminate pursuant to Section 5.11.

 

(d)           by written notice from ICB to ONB if:

(i)           any event shall have occurred which is not capable of being cured prior to the Outside Date and would result in any condition set forth in Section 7.02 not being satisfied prior to the Outside Date;

 

(ii)           ONB breaches or fails to perform any of its representations, warranties or covenants contained in this Agreement, which breach or failure to perform would give rise to the failure of a condition set forth in Section 7.02 and such condition is incapable of being satisfied by the Outside Date or such breach has not been cured by ONB within 20 business days after ONB’s receipt of written notice of such breach from ICB;  or

 

(iii)           there has been a Material Adverse Effect on ONB on a consolidated basis as of the Effective Time, as compared to that in existence as of the date of this Agreement.

 

(e)           by written notice of ONB to ICB:

(i)           if the ICB Board of Directors shall fail to include its recommendation to approve the Merger in the proxy statement/prospectus;

 

(ii)           in the event of an Adverse Recommendation Change or an Adverse Recommendation Change Notice;

 

(iii)           if the ICB Board shall approve any Acquisition Proposal or publicly recommend that the holders of ICB Common Stock accept or approve any Acquisition Proposal; or

 

(iv)           if ICB shall have entered into, or publicly announced its intention to enter into, a definitive agreement, agreement in principle or letter of intent with respect to any Acquisition Proposal.

 

(f)           by written notice by ONB to ICB if a quorum could not be convened at the meeting of shareholders of ICB contemplated in Section 5.01 or at a reconvened meeting held at any time prior to or on the Outside Date.

 

(g)           by written notice by ICB to ONB if, and only if both of the following conditions are satisfied at any time during the five-day period commencing on the Determination Date, such termination to be effective on the tenth day following the Determination Date:

 

(i)           The ONB Market Value on the Determination Date is less than $9.896; and

 

(ii)           the number obtained by dividing the ONB Market Value by the Initial ONB Market Value shall be less than the number obtained by dividing (x) the Final Index Price by (y) the Initial Index Price minus 0.20;

 

subject, however, to the following three sentences.  If ICB elects to exercise its termination right pursuant to this Section 8.01(g), it shall give prompt written notice thereof to ONB.  During the five business day period commencing with its receipt of such notice, ONB shall have the option to increase the Merger Consideration to equal the lesser of (x) a quotient, the numerator of which is equal to the product of the Initial ONB Market Value, the Exchange Ratio (as then in effect), and the Index Ratio minus 0.20 and the denominator of which is equal to the ONB Market Value on the Determination Date; or (y) the quotient determined by dividing the Initial ONB Market Value by the ONB Market Value on the Determination Date, and multiplying the quotient by the product of the Exchange Ratio (as then in effect) and 0.80.  If within such five business day period, ONB delivers written notice to ICB that it intends to proceed with the Merger by paying such additional consideration as contemplated by the preceding sentence, and notifies ICB of the revised Exchange Ratio, then no termination shall have occurred pursuant to this Section 8.01(g), and this Agreement shall remain in full force and effect in accordance with its terms (except that the Exchange Ratio shall have been so modified).  For purposes of clarification, the adjustments to the Exchange Ratio contemplated by Sections 2.02(a), (b) and (c) of this Agreement shall be calculated and applied subsequent to any adjustment to the Exchange Ratio pursuant to this Section 8.01(g).

 

For purposes of this Section 8.01(g), the following terms shall have the meanings indicated below:

“Determination Date” shall mean the first date on which all Regulatory Approvals (and waivers, if applicable) necessary for consummation of the Merger have been received (disregarding any waiting period).”

 

“Final Index Price” means the average of the daily closing value of the Index for the five consecutive trading days immediately preceding the Determination Date.”

 

“Index” means the Nasdaq Bank Index or, if such Index is not available, such substitute or similar Index as substantially replicates the Nasdaq Bank Index.

 

“Index Ratio” means the Final Index Price divided by the Initial Index Price.

 

“Initial ONB Market Value” means $12.37, adjusted as indicated in the last sentence of this Section 8.01(g).

 

“Initial Index Price” means the closing value of the Index on the date of this Agreement.

 

“ONB Market Value” means, as of any specified date, the average of the daily closing sales prices of a share of ONB Common Stock as reported on the NYSE for the ten (10) consecutive trading days immediately preceding such specified date.

 

If ONB or any company belonging to the Index declares or effects a stock dividend, reclassification, recapitalization, split-up, combination, exchange of shares or similar transaction between the date of this Agreement and the Determination Date, the prices for the common stock of such company shall be appropriately adjusted for the purposes of applying this Section 8.01(g).

 

8.02           Effect of Termination.

 

(a)           Subject to the remainder of this Section 8.02, in the event of the termination of this Agreement pursuant to Section 8.01, this Agreement shall forthwith become null and void and have no effect, without any liability on the part of ONB or ICB and each of their respective directors, officers, employees, advisors, agents, or shareholders and all rights and obligations of any party under this Agreement shall cease, except for the agreements contained in this Section 8.02 and Section 11.11, which shall remain in full force and effect and survive any termination of this Agreement; provided, however, that nothing contained in this Section 8.02(a), except for the fees payable pursuant to subsections (b), (c) or (d), shall relieve any party hereto from liabilities or damages arising out of any fraud or intentional breach by such party of any of its representations, warranties, covenants or other agreements contained in this Agreement.

 

(b)           ICB shall pay to ONB an amount in cash equal to $3.25 million (the “Termination Fee”) if:

 

(i)           this Agreement is terminated by ONB pursuant to Section 8.01(e); or

 

(ii)           this Agreement is terminated by either party pursuant to Section 8.01(b)(i) as a result of the failure of ICB’s shareholders to approve the Agreement and the Merger by the requisite vote or by ONB pursuant to Section 8.01(f) and, in each case, prior to the

 

date that is twelve months after such termination ICB or any of its Subsidiaries enters into any Acquisition Agreement or any Acquisition Proposal is consummated (regardless of whether such Acquisition Proposal is made or consummated before or after termination of this Agreement); or

 

(iii)           this Agreement is terminated by either ICB or ONB pursuant to Section 8.01(b)(iii) and (A) prior to the date of such termination, an Acquisition Proposal was made, and (B) prior to the date that is twelve months after such termination, ICB or any of its Subsidiaries enters into any Acquisition Agreement or any Acquisition Proposal is consummated.

 

(c)           Any fee due under Section 8.02(b) shall be paid by ICB by wire transfer of same day funds:

 

(i)           in the case of Section 8.02(b)(i), concurrently with such termination; and

 

(ii)           in the case of Section 8.02(b)(ii) or Section 8.02(b)(iii), on the earlier of the date ICB enters into such Acquisition Agreement or consummates such Acquisition Proposal.

 

(d)           In the event that ICB owes the Termination Fee and/or fees and expenses to ONB pursuant Sections 8.02(b), then the payment of such amounts shall be the sole and exclusive remedy for those termination events and shall constitute liquidated damages. ICB acknowledges that the agreements contained in this Section 8.02 are an integral part of the transactions contemplated by this Agreement, and that, without these agreements, ONB would not have entered into this Agreement. Accordingly, if ICB fails promptly to pay the amounts due pursuant to this Section 8.02, and, in order to obtain such payment, ONB commences a suit that results in a judgment against ICB for the amounts set forth in this Section 8.02, ICB shall pay to ONB its reasonable costs and expenses (including attorneys’ fees and expenses) in connection with such suit and any appeal relating thereto, together with interest on the amounts set forth in this Section 8.02 at the national prime rate in effect on the date such payment was required to be made.

 

 

 

Upon the terms and subject to the conditions specified in this Agreement, the Merger shall become effective on the day and at the time (the “Closing Date”) specified in the Articles of Merger of ONB and ICB as filed with the Indiana Secretary of State (the “Effective Time”). Unless otherwise mutually agreed to by the parties hereto, the Effective Time will occur on the last business day of the month following (a) the fulfillment of all conditions precedent to the Merger set forth in Article VII of this Agreement and (b) the expiration of all waiting periods in connection with the bank regulatory applications filed for the approval of the Merger.

 

 

10.01           Closing Date and Place.  So long as all conditions precedent set forth in Article VII hereof have been satisfied and fulfilled, the closing of the Merger (the “Closing”) will take place at the Effective Time at a location to be reasonably determined by ONB.

 

10.02           Deliveries.

 

(a)           At the Closing, ONB will deliver to ICB the following:

 

(i)           the officers’ certificate contemplated by Section 7.02(g) hereof;

 

(ii)           copies of all approvals by government regulatory agencies necessary to consummate the Merger;

 

(iii)           copies of the resolutions adopted by the Board of Directors of ONB certified by the Secretary of ONB relative to the approval of this Agreement and the Merger;

 

(iv)           the tax opinion required by Section 7.01(h) hereof; and

 

(v)           such other documents as ICB or its legal counsel may reasonably request.

 

(b)           At the Closing, ICB will deliver to ONB the following:

 

(i)           the officers’ certificate contemplated by Section 7.01(g) hereof;

 

(ii)           copies of the resolutions adopted by the Board of Directors and shareholders of ICB certified by the Secretary of ICB relative to the approval of this Agreement and the Merger;

 

(iii)           the opinion required by Section 7.01(i) hereof;

 

(iv)           the tax opinion required by Section 7.02(h) hereof;

 

(v)           a certification of the ICB Delinquent Loans by an officer of ICB;

 

(vi)           a certification of the ICB Consolidated Shareholders Equity as of the end of the month prior to the Effective Time from ICB’s outside, independent certified public accountants; and

 

(vii)           other documents as ONB or its legal counsel may reasonably request.

 

 

 

11.01           Effective Agreement.   This Agreement and the recitals hereof shall be binding upon and inure to the benefit of and be enforceable by the respective parties hereto and their respective successors and assigns; provided, however, that neither this Agreement nor any of the rights, interests or obligations of the respective parties hereto under this Agreement may be assigned by any party hereto without the prior written consent of the other parties hereto. The representations, warranties, covenants and agreements contained in this Agreement, as well as the documents and instruments referred to herein, are for the sole benefit of the parties hereto and their successors and assigns, and they will not be construed as conferring any rights on any other Persons, except for Section 11.08 hereof, other than the right of ICB, on behalf of its shareholders, to pursue damages in the event of fraud or an intentional breach of this Agreement as provided in Section 8.02(a) hereof.

 

11.02           Waiver; Amendment.

 

(a)           The parties hereto may by an instrument in writing: (i) extend the time for the performance of or otherwise amend any of the covenants, conditions or agreements of the other parties under this Agreement; (ii) waive any inaccuracies in the representations or warranties of the other parties contained in this Agreement or in any document delivered pursuant hereto or thereto; (iii) waive the performance by the other parties 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 Merger. The waiver by any party hereto of a breach of or noncompliance with any provision of this Agreement will not operate or be construed as a continuing waiver or a waiver of any other or subsequent breach or noncompliance hereunder.

 

(b)           This Agreement may be amended, modified or supplemented only by a written agreement executed by the parties hereto.

 

11.03           Notices.   All notices, requests and other communications hereunder will be in writing (which will include telecopier communication) and will be deemed to have been duly given if delivered by hand and receipted for, delivered by certified United States Mail, return receipt requested, first class postage pre-paid, delivered by overnight express receipted delivery service or telecopied if confirmed immediately thereafter by also mailing a copy of such notice, request or other communication by certified United States Mail, return receipt requested, with first class postage pre-paid as follows:

 

If to ONB:	with a copy to (which will not constitute notice):
Old National Bancorp	Krieg DeVault LLP
One Main Street	One Indiana Square
Evansville, Indiana 47708	Suite 2800
ATTN: Jeffrey L. Knight, Executive	Indianapolis, Indiana 46204
Vice President, Corporate Secretary	ATTN: Michael J. Messaglia
and Chief Legal Counsel	Fax: (317) 636-1507
Fax:   ###-###-####
If to ICB:	with a copy to (which will not constitute notice):
Indiana Community Bancorp	Barnes & Thornburg LLP
501 Washington Street	11 South Meridian Street
Columbus, Indiana  47201	Indianapolis IN 46204
ATTN: John K. Keach, Jr., Chairman,	ATTN: Claudia V. Swhier
CEO and President	Fax:   ###-###-####
Fax: (812) 373-7865

or such substituted address or Person as any of them have given to the other in writing. All such notices, requests or other communications shall be effective: (a) if delivered by hand, when delivered; (b) if mailed in the manner provided herein, five (5) business days after deposit with the United States Postal Service; (c) if delivered by overnight express delivery service, on the next business day after deposit with such service; and (d) if by telecopier, on the next business day if also confirmed by mail in the manner provided herein.

 

11.04           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.

 

11.05           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.

 

11.06           Counterparts; Facsimile.   This Agreement may be executed in any number of counterparts and by facsimile, each of which will be an original, but such counterparts shall together constitute one and the same instrument.

 

11.07           Governing Law; Enforcement; Specific Performance; Jury Trial.   This Agreement shall be governed by and construed in accordance with the laws of the State of Indiana and applicable federal laws, without regard to principles of conflicts of law. The parties hereto hereby agree that all claims, actions, suits and proceedings between the parties hereto relating to this Agreement shall be filed, tried and litigated only in the Circuit or Superior Courts

 

 

11.08           Indemnification.

 

(a)           All rights to indemnification and exculpation from liabilities for acts or omissions occurring at or prior to the Effective Time now existing in favor of the current or former directors or officers of ICB and its Subsidiaries as provided in its charters or by-laws and any existing indemnification agreements or arrangements of ICB described in the ICB Disclosure Schedule, shall survive the Merger and shall continue in full force and effect in accordance with their terms to the extent permitted by law, and shall not be amended, repealed or otherwise modified for a period of six (6) years after the Effective Time in any manner that would adversely affect the rights thereunder of such individuals for acts or omissions occurring or alleged to occur at or prior to the Effective Time.

 

(b)           In the event of any threatened or actual claim, action, suit, proceeding or investigation, whether civil, criminal or administrative, including, without limitation, any such claim, action suit, proceeding or investigation in which any individual who is now, or has been at any time prior to the date of this Agreement, or who becomes prior to the Effective Time, a director or officer of ICB (the “Indemnified Parties”), is, or is threatened to be, made a party based in whole or in part on, or arising in whole or in part out of, or pertaining to (i) the fact that he is or was a director, officer or employee of ICB or its predecessors or (ii) this Agreement or any of the transactions contemplated hereby, whether in any case asserted or arising before or after the Effective Time, the parties hereto agree to cooperate and use their best reasonable efforts to defend against and respond thereto.

 

(c)           ONB shall cause any successor, whether by consolidation, merger or transfer of substantially all of its properties or assets, to comply with its obligations under this Article. The provisions of this Article shall survive the Effective Time and are intended to be for the benefit of, and shall be enforceable by, each Indemnified Party and other Person named herein and his or her heirs and representatives.

 

11.09           Entire Agreement.  This Agreement and the Exhibits hereto supersede all other prior or contemporaneous understandings, commitments, representations, negotiations or agreements, whether oral or written, among the parties hereto relating to the Merger or matters

 

 

11.10           Survival of Representations, Warranties or Covenants.  Except as set forth in the following sentence, none of the representations, warranties or covenants of the parties will survive the Effective Time or the earlier termination of this Agreement, and thereafter ONB, ICB and all the respective directors, officers and employees of ONB and ICB will have no further liability with respect thereto. The covenants contained in Section 8.02 shall survive termination of this Agreement.  The covenants contained in Section 11.08 shall survive the Effective Time.

 

11.11           Expenses.  Except as provided elsewhere in this Agreement, each party to this Agreement shall pay its own expenses incidental to the Merger contemplated hereby.

 

11.12           Certain References.  Whenever in this Agreement a singular word is used, it also will include the plural wherever required by the context and vice-versa, and the masculine or neuter gender shall include the masculine, feminine and neuter genders. 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” will mean any day except Saturday and Sunday when Old National Bank, in Evansville, Indiana, is open for the transaction of business.

 

11.13           Disclosure Schedules.  The mere inclusion of an item in a party’s Disclosure Schedule as an exception to a representation or warranty shall not be deemed an admission by such party 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.  Further, while each party will use commercially reasonable efforts to specifically reference each Section of this Agreement under which such disclosure is made pursuant to such party’s Disclosure Schedule, any information disclosed with respect to one Section shall not be deemed to be disclosed for purposes of any other Section of this Agreement in such party’s Disclosure Schedule unless it is reasonably apparent the disclosed information relates to another Section or Sections of this Agreement notwithstanding the absence of a specific cross-reference.

 

[Signature Page Follows]

IN WITNESS WHEREOF, ONB and ICB 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/ Robert G. Jones
		Robert G. Jones, President and Chief Executive Officer
	INDIANA COMMUNITY BANCORP
	By:	/s/ John K. Keach, Jr.
		John K. Keach, Jr., President and Chief Executive Officer

In compliance with the requirements of the Indiana Business Corporation Law, as amended (the “Act”), the undersigned corporations, desiring to effect a merger, set forth the following facts:

Section 1.  The corporation surviving the merger is Old National Bancorp (the “Surviving Corporation”).  The Surviving Corporation’s name has not been changed as a result of the merger and will remain “Old National Bancorp.”

Section 2.  The Surviving Corporation is a domestic corporation existing pursuant to the provisions of the Act, was incorporated in Indiana on July 19, 1982, and will maintain its principal office at One Main Street, Evansville, Vanderburgh County, Indiana 47708.

The name, state of incorporation and date of incorporation of the corporation, other than the Surviving Corporation, which is a party to the merger is as follows:

(Name of Corporation)

	Indiana		August 28, 1990
	(State of Domicile)		(Date of Incorporation)

 

 

 

The Plan of Merger (the “Agreement”) dated January ____, 2012, containing such information as required by the Act, is set forth in Exhibit A attached hereto and made a part hereof.

Section 1.  Action by Surviving Corporation

A.  Action by Directors.  The Agreement was adopted at a meeting of the Board of Directors of Old National Bancorp duly held and convened on January _________, 2012.

B.  Vote of Shareholders.  Approval by Old National Bancorp’s shareholders of the merger contemplated by the Agreement is not required, pursuant to Section 23-1-40-3(g) of the Act.

Section 2.  Action by Merging Corporation

A.  Action by Directors.  The Agreement was adopted at a meeting of the Board of Directors of Indiana Community Bancorp duly held and convened on January _________, 2012.

B.   Vote of Shareholders.  With respect to Indiana Community Bancorp, the designation, number of outstanding shares, number of votes entitled to be cast by each voting group entitled to vote separately on the merger, and number of shares voted in favor or against or having abstained as to the merger are set forth below:

	Designation of Voting Group		Common Stock
	Number of Outstanding Shares
	Number of Votes Entitled to be Cast
	Shares Voted in Favor
	Shares Voted Against
	Shares Abstained

 

 

 

 

The number of votes cast for approval of the Agreement by the shareholders of Indiana Community Bancorp was sufficient for approval thereof.

The effective date and time of the merger hereby effectuated shall be [11:59 p.m.], [Eastern Standard Time], [________________, 2012.]

*   *   *

IN WITNESS WHEREOF, the undersigned Surviving Corporation and Merging Corporation, by their respective Presidents, acting for and on behalf of such corporations, hereby execute these Articles of Merger; and each of such corporations certifies to the truth of the facts and acts relating to it and the action taken by its respective Board of Directors and shareholders.

Dated this _____ day of January, 2012.

	OLD NATIONAL BANCORP
	(“Surviving Corporation”)
	By:
		Robert G. Jones, President and Chief Executive Officer
	INDIANA COMMUNITY BANCORP
	(“Merging Corporation”)
	By:
			John K. Keach, Jr., President and Chief Executive Officer

 

 

 

THIS PLAN OF MERGER (the “Agreement”) is made and entered into this ____ day of January, 2012 by and between Old National Bancorp (“ONB” or the “Surviving Corporation”) and Indiana Community Bancorp (“ICB” or the “Merging Corporation”).

 

 

 

WHEREAS, ONB is an Indiana corporation registered as a bank holding company under the federal Bank Holding Company Act of 1956, as amended (the “BHC Act”), with its principal office located in Evansville, Vanderburgh County, Indiana; and

 

WHEREAS, ICB is an Indiana corporation registered as a bank holding company under the BHC Act, with its principal office located in Columbus, Bartholomew County, Indiana; and

 

WHEREAS, ONB and ICB seek to affiliate through a corporate reorganization whereby ICB will merge with and into ONB; and

 

WHEREAS, pursuant to a separate Agreement and Plan of Merger (the “Merger Agreement”), dated January __, 2012, ICB has agreed to merge with and into ONB; and

 

WHEREAS, the Boards of Directors of each of the parties hereto have determined that it is in the best interests of their respective corporations and their respective shareholders to consummate the merger provided for herein and have approved this Agreement.

 

NOW, THEREFORE, in consideration of the foregoing premises, the representations, warranties, covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereby make this Agreement and prescribe the terms and conditions of the merger of ICB with and into ONB, and the mode of carrying such merger into effect as follows:

 

ARTICLE I

 

 

Upon the terms and subject to the conditions of the Merger Agreement, at the Effective Time (as defined herein), ICB shall be merged with and into and under the Articles of Incorporation of ONB (the “Merger”).  ONB shall be the surviving corporation in the Merger (the “Surviving Corporation”) and shall continue its corporate existence under the laws of the State of Indiana.  At the Effective Time, the separate corporate existence of ICB shall cease.

 

 

 

Section 2.1                      Name and Offices.  Upon and following the Effective Time of the Merger, the name of the Surviving Corporation shall be Old National Bancorp, 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 (the “IBCL”).  The principal office of the Surviving Corporation shall be located at One Main Street, Evansville, Vanderburgh County, Indiana until such time as the Board of Directors designates otherwise.

Section 2.2                      Authorized Shares.  The total number of shares that ONB shall have authority to issue is ______________ shares of common stock and ______________ shares of preferred stock.

Section 2.3                      Directors of the Surviving Corporation.  The directors of the Surviving Corporation following the Effective Time shall be those individuals serving as directors of ONB at the Effective Time and until such time as their successors have been duly elected and have qualified or until their earlier resignation, death, or removal as a director.

Section 2.4                      Officers of the Surviving Corporation.  The officers of ONB serving at the Effective Time shall continue to serve as the officers of the Surviving Corporation, until such time as their successors shall have been duly elected and have qualified or until their earlier resignation, death or removal from office.

Section 2.5                      Articles of Incorporation and Bylaws.

(a)

Articles of Incorporation.  The Articles of Incorporation of ONB in existence at the Effective Time shall remain the Articles of Incorporation of the Surviving Corporation following the Effective Time, until such Articles of Incorporation shall be amended or repealed as provided therein or by applicable law.

 

(b)

Bylaws.  The Bylaws of ONB in existence at the Effective Time shall remain the Bylaws of the Surviving Corporation following the Effective Time, until such Bylaws shall be amended or repealed as provided therein or by applicable law.

 

Seciton 2.6                      Effect of the Merger.  At the Effective Time, the title to all assets, real estate and other property owned by ICB shall vest in Surviving Corporation as set forth in Indiana Code Section 23-1-40-6, as amended, without reversion or impairment. At the Effective Time, all liabilities of ICB shall be assumed by Surviving Corporation as set forth in Indiana Code Section 23-1-40-6, as amended.

 

 

Section 3.1                      Manner of Conversion of Shares.  Upon and by virtue of the Merger becoming effective at the Effective Time,

(a)

Each share of common stock of ICB issued and outstanding immediately prior to the Effective Time shall become and be converted into the right to receive [____] shares of common stock of ONB (the “Exchange Ratio”), without par value, as adjusted pursuant to the Merger Agreement (the “Merger Consideration”) by virtue of the Merger, without any action on the part of the holder thereof (except as provided in Section 3.6 below); and

 

(b)

Each holder of ICB common stock who otherwise would be entitled to a fractional share of ONB common stock shall receive an amount in cash (without interest) determined by multiplying such fraction by the average per share closing price of a share of ONB Common Stock as quoted on the New York Stock Exchange (“NYSE”) during the ten (10) trading days preceding the fifth (5th) calendar day preceding the Effective Time (the “Average ONB Closing Price”).

 

Seciton 3.2                      Effect of Conversion.  At and after the Effective Time, each share certificate which immediately prior to the Effective Time represented outstanding shares of common stock of ICB (“ICB Certificate”) shall represent only the right to receive the Merger Consideration.

Section 3.3                      Exchange of Certificate.  Each holder of ICB common stock shall, upon the surrender of such certificate to the Surviving Corporation for cancellation after the Effective Time, be entitled to receive from the Surviving Corporation a certificate representing that number of whole shares of ONB common stock that each holder of ICB has the right to receive, and a check in the amount of any cash that such holder has the right to receive, including any cash in lieu of fractional share, pursuant to Section 3.1 hereof.

Section 3.4                      Stock Options.  At the Effective Time, each outstanding option to purchase ICB common stock (an “ICB Stock Option”) without any action on the part of any holder thereof, shall be converted automatically into an option to purchase a number of shares of common stock of ONB (each, an “ONB Stock Option”) equal to the product (rounded down to the nearest whole share) of (A) the number of shares of ICB common stock subject to such ICB Stock Option and (B) the Exchange Ratio, at an exercise price per share (rounded up to the nearest whole cent) equal to (1) the exercise price of such ICB Stock Option divided by (2) the Exchange Ratio.  Except as specifically provided above, following the Effective Time, each ONB Stock Option will become fully vested, and shall otherwise continue to be governed by the same terms and conditions as were applicable under the ICB Stock Option immediately prior to the Effective Time.

Section 3.5                      Restricted Stock.  Shares of restricted stock granted under the Indiana Community Bancorp 2010 Stock and Incentive Plan to persons other than John K. Keach, Jr. that

are subject to transfer restrictions immediately prior to the Effective Time shall have those restrictions lapse at the Effective Time and such shares shall convert into the Merger Consideration as provided in Section 3.1 hereof.  Shares of restricted stock held by John K. Keach, Jr. at the Effective Time shall be converted into the Merger Consideration as provided in Section 3.1 hereof, but such Merger Consideration shall continue to be held subject to the vesting and transferability restrictions set forth in the award agreements for such restricted stock and shall continue to be subject to the terms of the Indiana Community Bancorp 2010 Stock Option and Incentive Plan.

Section 3.6                      Treasury Stock.  Each share of ICB common stock that, immediately prior to the Effective Time, is held as a treasury stock of ICB or held directly or indirectly by ONB (other than shares held by ONB in a fiduciary capacity or in satisfaction of a debt previously contracted) shall by virtue of the Merger be canceled and retired and shall cease to exist, and no exchange or payment shall be made therefore shall by virtue of the Merger be cancelled and retired and shall cease to exist, and no exchange or payment shall be made therefore.

 

Section 3.7                      TARP Stock. Immediately prior to or contemporaneously with the Effective Time of the Merger, ONB will fund the redemption by ICB, or the purchase by ONB, from the United States Department of the Treasury (“UST”) of each share of the ICB Fixed Rate Cumulative Perpetual Preferred Stock, Series A (the “ICB TARP Preferred Stock”) issued and outstanding on such date (such purchase, the “TARP Purchase”).  ONB may fund the purchase by ONB or ICB of the warrant issued on December 12, 2008 to the UST in connection with the issuance of the ICB TARP Preferred Stock (the “ICB TARP Warrant”).

 

 

CONDITIONS PRECEDENT

 

The obligation of ONB and ICB to consummate the Merger contemplated by this Agreement is subject to the receipt of all required approvals of the shareholders of ICB and the receipt of all appropriate orders, consents, approvals and clearances from all necessary regulatory agencies and governmental authorities whose orders, consents, approvals or clearances are required by law for consummation of the Merger, as well as the satisfaction of the conditions set forth in the Merger Agreement.

 

 

EFFECTIVE TIME

 

Subject to the terms and upon satisfaction of all requirements of law and the conditions specified in this Agreement, the Merger shall become effective on the date and at the time specified in the Articles of Merger filed with the Indiana Secretary of State.

 

 

TERMINATION

 

Section 6.1                      Manner of Termination.  This Agreement may be terminated and the transactions contemplated hereby may be abandoned at any time prior to the Effective Time as provided in the Merger Agreement.

Section 6.2                      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 liabilities by reason of this Agreement or the termination thereof on the part of either party hereto or their respective directors, officers, employees, agents and shareholders, except as expressly provided in the Merger Agreement, including without limitation: (i) the confidentiality provisions of the Merger Agreement; and (ii) the payment of their respective expenses, as set forth in the Merger Agreement.

 

 

Section 7.1                      Binding Effect.  This Agreement shall be binding upon and shall inure to the benefit of the parties hereto and their respective successors and assigns.

Section 7.2                      Entire Agreement.  This Agreement together with the Merger Agreement and that certain Confidentiality Agreement dated January __, 2012, by and between ICB and ONB, set forth the entire understanding of the parties hereto with respect to the subject matter hereof and merges and supersedes all prior and contemporaneous understandings with respect to the subject matter hereof.   This Agreement is delivered subject to the terms and conditions of the Merger Agreement and in the event of any conflict between the provisions of this Agreement and the provisions of the Merger Agreement, the provisions of the Merger Agreement shall control.

Section 7.3                      Notices.  Any notices, request or instruction to be given hereunder to any party hereto shall be in writing and 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 to the other party hereto and marked to the attention of the Chairman of the Board or President of such party.

Section 7.4                      Amendments; Waivers.  No amendments of this Agreement shall be binding unless executed in writing by all parties hereto.  Any waiver of any provision of this Agreement shall be in writing, and no waiver of any provision shall be deemed a waiver of any other provision or constitute a continuing waiver.

Section 7.5                      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 ever been contained herein.

Section 7.6                      Governing Law.  This Agreement has been executed and delivered in the State of Indiana and shall be construed and governed in accordance with the laws of the State of Indiana, without reference to the conflict or choice of law principles thereof.

Section 7.7                      Counterparts.  This Agreement may be executed in any number of counterparts and by facsimile, each of which shall be an original, but such counterparts shall together constitute one and the same instrument.

*     *     *

IN WITNESS WHEREOF, Old National Bancorp and Indiana Community Bancorp have made and entered into this Agreement as of the day and year first above written and have caused this Agreement to be executed and attested by their duly authorized officers.

 

				Old National Bancorp
				“ONB”
				By:
					Robert G. Jones, President and Chief Executive Officer
ATTEST:
By:
	Jeffrey L. Knight, Secretary
				Indiana Community Bancorp
				“ICB”
				By:
					John K. Keach, Jr., President and Chief Executive Officer
ATTEST:
By:
	Mark T. Gorski, Secretary

 

This agreement made between Old National Bank (hereinafter referred to as “ONB”), a banking association organized under the laws of the United States, being located at One Main Street, Evansville, county of Vanderburgh, in the state of Indiana, with a capital of $________, divided into ___________ shares of common stock, each of $1 stated value, surplus of $__________, and undivided profits, including capital reserves plus unrealized gains, of $______________, as of December 31, 2011, and Indiana Bank and Trust Company (hereinafter referred to as “IBTC”), a state chartered commercial bank organized under the laws of the state of Indiana, being located at 501 Washington St., Columbus, county of Bartholomew, Indiana, with a capital of $___________, divided into ___ shares of common stock, each of $________, surplus of $__________, and undivided profits, including capital reserves, plus unrealized gains of $_________, as of December 31, 2011, each acting pursuant to a resolution of its board of directors, adopted by the vote of a majority of its directors, pursuant to the authority given by and in accordance with the provisions of the Act of November 7, 1918, as amended (12 USC 215a), witnessed as follows:

IBTC shall be merged into ONB under the charter of the latter.

The name of the receiving association (hereinafter referred to as the “association”) shall be Old National Bank.

The business of the association shall be that of a national banking association.  This business shall be conducted by the association at its main office to be located at One Main Street, Evansville Indiana 47708, and at its legally established branches.

The amount of capital stock of the association shall be $__________, divided into ________  shares of common stock, each of $1 stated value, and at the time the merger shall become effective, the association shall have a surplus of $____________, and undivided profits, including capital reserves plus unrealized gains of $_____________, which when combined with the capital and surplus will be equal to the combined capital structures of the merging banks as stated in the preamble of this agreement, adjusted however, for normal earnings and expenses (and if applicable, purchase accounting adjustments) between December 31, 2011, and the effective time of the merger.

All assets as they exist at the effective time of the merger shall pass to and vest in the association without any conveyance or other transfer.  The association shall be responsible for all of the liabilities of every kind and description, including liabilities arising from the operation of a trust department, of each of the merging banks existing as of the effective time of the merger. A committee of six persons, three to be appointed by the board of directors of each bank at the time of the merger shall have satisfied themselves, that the statement of condition of each bank as of December 31, 2011, fairly presents its financial condition and since such date there has been no material adverse change in the financial condition or business of either bank.

IBTC shall contribute to the association acceptable assets having a book value, over and above its liability to its creditors, of at least $___________, and having an estimated fair value over and above its liability to its creditors, of at least $__________, or _____%, of the estimated fair value of excess acceptable assets over and above liabilities to creditors, to the association, adjusted, however, for normal earnings and expenses between December 31, 2011, and the effective time of the merger, for allowances of cash payments, if any, permitted under this agreement, and for factors such as loan run-offs, charge-offs, changing valuations due to interest rate changes, and repricings at maturity between December 31, 2011 and the effective time of the merger.

The difference between the book value and the estimated fair value of the assets to be contributed as of December 31, 2011, is set forth on Exhibit A hereto.

At the effective time of the merger, ONB shall have on hand acceptable assets having book value of at least $___________ over and above its liabilities to its creditors, and having a fair value, over and above its liability to its creditors, of at least $__________, or ____% of the estimated fair value of excess acceptable assets, over and above its liabilities to its creditors, of the association, adjusted, however, for normal earnings and expenses between December 31, 2011, and the effective time of the merger, and for allowances of cash payments, if any, permitted under this agreement.

The difference between the book and fair value of excess acceptable assets, as set forth above, is made up as follows:

The difference between the book value and the estimated fair value of the assets to be contributed as of December 31, 2011, is set forth on Exhibit B hereto.

Each issued and outstanding share of capital stock of ONB is held by Old National Bancorp, an Indiana corporation and a bank holding company registered under the Bank Holding Company Act of 1956, as amended.  Each issued and outstanding share of capital stock of IBTC is held by Indiana Community Bancorp (“ICB”), an Indiana corporation and a bank holding company registered under the Bank Holding Company Act of 1956, as amended.

Prior to the merger of IBTC into ONB, IBC shall merge with and into Old National Bancorp.  In that merger, the outstanding shares of ICB will be cancelled in consideration for _____ shares of Old National Bancorp’s common stock for each share of ICB common stock properly tendered, subject to adjustment procedures set forth in the merger agreement between the parties and the payment of a cash amount for fractional shares.

In consideration of this immediately following the merger of ICB into Old National Bancorp, and subject to the terms and conditions of this agreement, (i) each share of capital stock of IBTC shall be extinguished, canceled and retired; and (ii) each share of capital stock of ONB shall remain issued and outstanding as fully paid and non-assessable shares of capital stock of the association.

Neither of the banks shall declare nor pay any dividend to its shareholders between the date of this agreement and the time at which the merger shall become effective, nor dispose of any of its assets in any other manner, except in the normal course of business and for adequate value.

The present board of directors of ONB shall continue to serve as the board of directors of the association until the next annual meeting or until such time as their successors have been elected and have qualified.

From and after the time this merger shall become effective as specified in the approval issued by the Comptroller of the Currency, the Articles of Association of ONB shall be the Articles of Association of the association.

This agreement may be terminated by the unilateral action of the board of directors of any participant prior to the approval of the stockholders of the participant or by the mutual consent of the board of all participants after any shareholder group has taken affirmative action.  Since time is of the essence to this agreement, if for any reason the transaction shall not have been consummated by ________, 2012, this agreement shall terminate automatically as of that date unless extended, in writing, prior to this date by mutual action of the boards of directors of the participants.

This agreement shall be ratified and confirmed by the affirmative vote of shareholders of each of the merging banks owning at least two thirds of its capital stock outstanding, at a meeting to be

held on the call of the directors; and the merger shall become effective at the time specified in a merger approval to be issued by the Comptroller of the Currency of the United States.

Pursuant to the requirements of the regulations of the Office of the Comptroller of the Currency, as successor to the Office of Thrift Supervision (the “Regulations”), IBTC established and has maintained a liquidation account for the benefit of its savings account holders as of December 31, 1986 (“eligible savers”).  In the event of a complete liquidation of the association, the association shall comply with such Regulations with respect to the amount and the priorities on liquidation of each of the association’s eligible savers’ inchoate interest in the liquidation account, to the extent it is still in existence; provided, that an eligible saver’s inchoate interest in the liquidation account shall not entitle such eligible saver to any voting rights at meetings of the association’s shareholders.

 
 

 

WITNESS, the signatures of the merging banks this ___ day of January, 2012, each set by its president and attested to by its cashier or secretary, pursuant to a resolution of its board of directors, acting by a majority.

Attest:			Old National Bank
		By:
			Robert G. Jones, President
	Cashier or Secretary
Attest:			Indiana Bank and Trust Company
		By:
			John K. Keach, Jr., President and Chief Executive Officer
	Cashier or Secretary

 
 

 

 

 

 

ICB Delinquent Loans (dollars in millions)		Decrease to Exchange Ratio
Greater than $34.5, less than or equal to $35.5		(0.0350)
Greater than $35.5, less than or equal to $36.5		(0.0701)
Greater than $36.5, less than or equal to $37.5		(0.1051)
Greater than $37.5, less than or equal to $38.5		(0.1401)
Greater than $38.5, less than or equal to $39.5		(0.1751)
Greater than $39.5, less than or equal to $40.5		(0.2218)
Greater than $40.5, less than or equal to $41.5		(0.2685)
Greater than $41.5, less than or equal to $42.5		(0.3152)
Greater than $42.5, less than or equal to $43.5		(0.3620)
Greater than $43.5, less than or equal to $44.5		(0.4087)
Greater than $44.5, less than or equal to $45.5		(0.4554)
Greater than $45.5, less than or equal to $46.5		(0.5021)
Greater than $46.5, less than or equal to $47.5		(0.5488)
Greater than $47.5, less than or equal to $48.5		(0.5955)
Greater than $48.5		(0.6422)

 

 

 

THIS EMPLOYMENT AGREEMENT (the "Agreement") by and between Old National Bancorp, an Indiana corporation (the "Company") and John K. Keach, Jr. (the "Executive”), is made and entered into as of ______________, 2012, but shall not be effective until the “Effective Date” (as defined below).

 

WHEREAS, the Company and Indiana Community Bancorp (the “Target”) have entered into an Agreement of Affiliation and Merger, dated _________, 2012 (the “Merger Agreement”), whereby the Target will be merged with and into the Company (the “Merger”); and

 

WHEREAS, the Company and the Executive are entering into this Agreement on the date set forth above, but this Agreement is contingent on, and shall not be effective until, the closing of the transactions contemplated by the Merger Agreement (the “Effective Date”).

 

NOW, THEREFORE, in consideration of the premises and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Executive and the Company agree as follows:

 

1.           Defined Terms.  Throughout this Agreement, when the first letter of a word (or the first letter of each word in a phrase) is capitalized, the word or phrase shall have the meaning specified in Appendix A.

 

2.           Term.  The initial term of this Agreement shall begin on the Effective Date, and shall continue through the date which is two years following the Effective Date.  The obligations contained in the Restrictive Covenants shall survive the Term.

 

3.           Position and Duties.  At all times during the Term, the Executive shall (i) serve in such capacities, shall perform such duties and have such responsibilities as the Executive Vice President – Director of Corporate Development or such officer’s designee (the “Director of Corporate Development”) may assign to him from time to time, (ii) diligently and conscientiously devote his full and exclusive business time, energy, and ability to his duties and the business of the Employing Company, (iii) serve as a member of any Employer board, as required by the Director of Corporate Development, and (iv) comply with all directions by the Director of Corporate Development (other than directions that would require an illegal or unethical act or omission) and all applicable policies and regulations of the Employing Company.  Notwithstanding the preceding provisions, the Executive may serve as a non-employee director, a volunteer, or in other such capacities for other entities not in competition with the Company's Business.

 

4.           Compensation, Benefits, and Expenses.  During the Term and before the Termination of his Employment, the Company shall compensate (or cause the Bank to compensate) the Executive for his services as follows:

 

(a)           Base Salary.  The Executive shall receive a base salary at the annual rate of $200,000, as increased from time to time by the Director of Corporate Development.  During the Term, the Director of Corporate Development may increase (but not decrease) the Executive's base salary.  Base salary payments shall be made in substantially equal installments pursuant to the Employing Company’s established payroll procedures.

 

(b)           Signing Bonus.  The Company shall pay in cash to the Executive, a signing bonus in an amount equal to the maximum amount that Executive is entitled to receive under Section 280G of the Code without causing a disallowance of the deduction of such amount for federal income tax purposes or any tax penalties upon Executive.

 

(c)           Employee Benefits.  The Executive shall be eligible to participate in such benefit plans as are made available to, and on such terms and conditions applicable to, other similarly situated executives and subject to the terms of such benefit plans.  The Employing Company may change or terminate any such benefit plan at any time, in its sole discretion, subject to applicable legal requirements.

 

(d)           Vacation Benefits.  The Executive shall be entitled to annual vacation in accordance with the Employing Company’s policies as in effect from time to time for similarly situated executive employees, but not less than _____ (__) weeks of paid vacation per year.

 

(e)           Reimbursement of Expenses.  The Employing Company shall reimburse the Executive for reasonable business expenses incurred by the Executive in connection with the performance of his duties.  Such reimbursements shall be made in accordance with the Employing Company’s established reimbursement policies, as in effect from time to time; provided, however, reimbursements for expenses incurred during a calendar year shall be made not later than March 15 of the following year.

 

5.           Termination of Employment; Resignation of Positions.  Subject to its payment obligations under this Section, the Company may Terminate the Executive's Employment at any time, with or without cause.  The Executive may voluntarily Terminate his Employment at any time by providing at least thirty (30) days prior notice to the Company.  Regardless of whether his Termination of Employment is voluntary or involuntary, the Executive shall resign from all director positions with the Employer, effective as of his Termination Date.  Upon Termination of Employment, the Executive shall be entitled to the following:

 

(a)           Any earned but unpaid base salary, at the Executive's then effective annual rate, through his Termination Date, plus any accrued vacation pay due to the Executive under the Employing Company’s vacation program through his Termination Date, which amounts shall be paid to the Executive not later than the payroll date for the payroll period next following his Termination Date.

 

(b)           Provided that the Executive applies for reimbursement in accordance with the Employing Company’s established reimbursement procedures (within the period required by such procedures but under no circumstances later than thirty (30) days after his Termination Date), the Employing Company shall pay the Executive any reimbursements to which he is

 

entitled under such procedures not later than the payroll date for the payroll period next following the date on which the Executive applies for reimbursement.

 

(c)           Any benefits (other than severance) payable to the Executive under any of the Employing Company’s incentive compensation or employee benefit plans or programs shall be payable in accordance with the provisions of those plans or programs.

 

(d)           If Executive is terminated without cause, Executive shall be entitled to be paid his Base Salary as provided in Section 2(a) for the balance of the Term.

 

(e)           If Executive’s employment is terminated before the restricted shares of Company common stock Executive acquired on the Effective Date have vested in full according to the terms of grant of such shares, the remaining unvested shares shall vest in full and be delivered to Executive upon his termination of employment.

 

6.           Provisions Relating to Parachute Payments.

 

(a)           If payments and benefits to or for the benefit of the Executive, whether pursuant to this Agreement or otherwise, including, but not limited to, the signing bonus under Section 4(b), would result in total Parachute Payments to the Executive with a value equal to or greater than one hundred percent (100%) of the Parachute Payment Limit, the amount paid or payable to the Executive, shall be reduced so that the value of all Parachute Payments to the Executive, whether or not made pursuant to this Agreement, is equal to the Parachute Payment Limit minus One Dollar ($1.00), and, if necessary, the Executive shall promptly repay the Company for any Parachute Payments received that are above the Parachute Payment Limit.  The Company agrees to undertake such reasonable efforts as it may determine in its sole discretion to prevent any payment or benefit under this Agreement (or any portion thereof) from constituting an Excess Parachute Payment.

 

(b)           The amount of Parachute Payments and the Parachute Payment Limit shall be determined as provided in this Subsection (b).  The Company shall direct its independent auditor ("Auditor") or such other accounting firm experienced in such calculations and acceptable to the Executive to determine whether any Parachute Payments exceed the Parachute Payment Limit and the amount of any adjustment required by Subsection (a).  The Company shall promptly give the Executive notice of the Auditor's determination.  All reasonable determinations made by the Auditor under this Subsection shall be binding on the Employing Company and the Executive and shall be made within thirty (30) days after the Executive's Termination of Employment.

 

7.           Withholding and Taxes.  The Employing Company may withhold from any payment made hereunder (i) any taxes that the Employing Company reasonably determine are required to be withheld under federal, state, or local tax laws or regulations, and (ii) any other amounts that the Employing Company are authorized to withhold.  Except for employment taxes that are the obligation of the Employing Company, the Executive shall pay all federal, state, local, and other taxes (including, without limitation, interest, fines, and penalties) imposed on him under applicable law by virtue of or relating to the payments and/or benefits contemplated by this Agreement, subject to any reimbursement provisions of this Agreement.

 

8.           Use and Disclosure of Confidential Information.

 

(a)           The Executive acknowledges and agrees that (i) by virtue of his employment, he will be given access to, and will help analyze, formulate or otherwise use, Confidential Information, (ii) the Employer has devoted (and will devote) substantial time, money, and effort to develop Confidential Information and maintain the proprietary and confidential nature thereof, and (iii) Confidential Information is proprietary and confidential and, if any Confidential Information were disclosed or became known by persons engaging in a business in any way competitive with the Company's Business, such disclosure would result in hardship, loss, irreparable injury, and damage to the Employer, the measurement of which would be difficult, if not impossible, to determine.  Accordingly, the Executive agrees that (i) the preservation and protection of Confidential Information is an essential part of his duties of employment and that, as a result of his employment with the Employing Company, he has a duty of fidelity, loyalty, and trust to the Employing Company in safeguarding Confidential Information.  The Executive further agrees that he will use his best efforts, exercise utmost diligence, and take all steps necessary to protect and safeguard Confidential Information, whether such information derives from the Executive, other employees of the Employer, Customers, Prospective Customers, or vendors or suppliers of the Employer, and that he will not, directly or indirectly, use, disclose, distribute, or disseminate to any other person or entity or otherwise employ Confidential Information, either for his own benefit or for the benefit of another, except as required in the ordinary course of his employment by the Employing Company.  The Executive shall follow all Employing Company policies and procedures to protect all Confidential Information and shall take any additional precautions necessary under the circumstances to preserve and protect against the prohibited use or disclosure of any Confidential Information.

 

(b)           The confidentiality obligations contained in this Agreement shall continue as long as Confidential Information remains confidential (except that the obligations shall continue, if Confidential Information loses its confidential nature through improper use or disclosure, including but not limited to any breach of this Agreement) and shall survive the termination of this Agreement and/or termination of the Executive's employment with the Employing Company.

 

(c)           From time to time, the Employer may, for its own benefit, choose to place certain Confidential Information in the public domain.  The fact that Confidential Information may be made available to the public in a limited form and under limited circumstances does not change the confidential and proprietary nature of such information, and does not release the Executive from his obligations with respect to such Confidential Information.

 

9.           Ownership of Documents and Return of Materials At Termination of Employment.

 

(a)           Any and all documents, records, and copies thereof, including but not limited to hard copies or copies stored digitally or electronically, pertaining to or including Confidential Information (collectively, "Company Documents") that are made or received by the Executive during his employment shall be deemed to be property of the Employer.  The Executive shall use Company Documents and information contained therein only in the course of his employment for the Employing Company and for no other purpose.  The Executive shall not use or disclose

 

any Company Documents to anyone except as authorized in the course of his employment and in furtherance of the Company's Business.

 

(b)           Upon Termination of Employment, the Executive shall immediately deliver to the Employing Company (with or without request) all Company Documents and all other Employer property in the Executive's possession or under his custody or control.

 

10.           Non-Solicitation of Customers and Employees.  The Executive agrees that during the Term and for a period of two (2) years following the Termination of the Executive's Employment, the Executive shall not, directly or indirectly, individually or jointly, (i) solicit in any manner, seek to obtain or service, or accept the business of any Customer for any product or service of the type offered by the Employer or competitive with the Company's Business, (ii) solicit in any manner, seek to obtain or service, or accept the business of any Prospective Customer for any product or service of the type offered by the Employer or otherwise competitive with the Company's Business, (iii) request or advise any Customer, Prospective Customer, or supplier of the Employer to terminate, reduce, limit, or change its business or relationship with the Employer, or (iv) induce, request, or attempt to influence any employee of the Employer to terminate his employment with the Employer.

 

11.           Covenant Not to Compete. The Executive hereby understands and acknowledges that, by virtue of his position with the Employing Company, he has obtained advantageous familiarity and personal contacts with Customers and Prospective Customers, wherever located, and the business, operations, and affairs of the Employer.  Accordingly, during the term of this Agreement and for a period of two (2) years following the termination of his employment, the Executive shall not, directly or indirectly:

 

(a)           as owner, officer, director, stockholder, investor, proprietor, organizer, employee, agent, representative, consultant, independent contractor, or otherwise, engage in the same trade or business as the Company's Business, in the same or similar capacity as the Executive worked for the Employing Company, or in such capacity as would cause the actual or threatened use of the Employer's trade secrets and/or Confidential Information; provided, however, that this Subsection shall not restrict the Executive from acquiring, as a passive investment, less than five percent (5%) of the outstanding securities of any class of an entity that are listed on a national securities exchange or actively traded in the over-the-counter market.  The Executive acknowledges and agrees that, given the level of trust and responsibility given to him while in the Employing Company’s employ, and the level and depth of trade secrets and Confidential Information entrusted to him, any immediately subsequent (i.e. within two (2) years) employment with a competitor to the Company's Business would result in the inevitable use or disclosure of the Employer's trade secrets and Confidential Information and, therefore, this two (2) year restriction is reasonable and necessary to protect against such inevitable disclosure; or

 

(b)           offer to provide employment or work of any kind (whether such employment is with the Executive or any other business or enterprise), either on a full-time or part-time or consulting basis, to any person who then currently is, or who within two (2) years preceding such offer or provision of employment has been, an employee of the Employer.

 

The restrictions on the activities of the Executive contained in this Section shall be limited to the State of Indiana.

 

12.           Remedies.  The Executive agrees that the Company will suffer irreparable damage and injury and will not have an adequate remedy at law if the Executive breaches any provision of the Restrictive Covenants.  Accordingly, if the Executive breaches or threatens or attempts to breach the Restrictive Covenants, in addition to all other available remedies, the Company shall be entitled to seek injunctive relief, and no or minimal bond or other security shall be required in connection therewith.  The Executive acknowledges and agrees that in the event of termination of this Agreement for any reason whatsoever, the Executive can obtain employment not competitive with the Company's Business (or, if competitive, outside of the geographic and customer-specific scope described herein) and that the issuance of an injunction to enforce the provisions of the Restrictive Covenants shall not prevent the Executive from earning a livelihood.  The Restrictive Covenants are essential terms and conditions to the Company entering into this Agreement, and they shall be construed as independent of any other provision in this Agreement or of any other agreement between the Executive and the Company.  The existence of any claim or cause of action that the Executive has against the Company, whether predicated on this Agreement or otherwise, shall not constitute a defense to the enforcement by the Company of the Restrictive Covenants.

 

13.           Periods of Noncompliance and Reasonableness of Periods.  The Restrictive Covenants described in Sections 10 and 11 shall be deemed not to run during all periods of noncompliance, the intention of the parties being to have such restrictions and covenants apply for the full periods specified in Sections 10 and 11 following Termination of the Executive's Employment.  The Company and the Executive acknowledge and agree that the restrictions and covenants contained in Sections 10 and 11 are reasonable in view of the nature of the Company's Business and the Executive's advantageous knowledge of and familiarity with the Company's Business, operations, affairs, and Customers.  Notwithstanding anything contained herein to the contrary, if the scope of any restriction or covenant contained in Sections 10 and 11  is found by a court of competent jurisdiction to be too broad to permit enforcement of such restriction or covenant to its full extent, then such restriction or covenant shall be enforced to the maximum extent permitted by law.  The parties hereby acknowledge and agree that a court of competent jurisdiction shall invoke and exercise the blue pencil doctrine to the fullest extent permitted by law to enforce this Agreement.

 

14.           Release.  For and in consideration of the foregoing covenants and promises made by the Company, and the performance of such covenants and promises, the sufficiency of which is hereby acknowledged, the Executive agrees to release the Employer and all other persons named in the Release from any and all causes of action that the Executive has or may have against the Employer or any such person before the effective date of the Release, other than a breach of this Agreement.  The Release shall be substantially in the form attached hereto as Exhibit I.  The Company shall provide the Release to the Executive as soon as practicable upon his Termination of Employment. THE EXECUTIVE'S RIGHT TO BENEFITS HEREUNDER SHALL BE CONTINGENT ON HIS SIGNING, FILING AND NOT REVOKING THE RELEASE AS PROVIDED IN THE RELEASE WITHIN THE PERIODS REQUIRED BY LAW.

 

15.           Reimbursement of Certain Costs.

 

(a)           If, during the life of the Executive and for a five (5) year period following his death, the Company brings a cause of action to enforce the Restrictive Covenants or to recover damages caused by the Executive's breach of the Restrictive Covenants, the substantially prevailing party in such action shall be entitled to reasonable costs and expenses (including, without limitation, reasonable attorneys' fees, expert witness fees, and disbursements) in connection with such action.

 

(b)           If, during the life of the Executive and for a five (5) year period following his death, a dispute arises regarding the Executive's rights hereunder, and the Executive obtains a final judgment in his favor from a court of competent jurisdiction with respect to such dispute, all reasonable costs and expenses (including, without limitation, reasonable attorneys' fees, expert witness fees, and disbursements) incurred by the Executive in connection with such dispute or in otherwise pursuing a claim based on a breach of this Agreement, shall be paid by the Company.

 

(c)           Any reimbursement by the Company pursuant to this Section shall be subject to compliance with applicable provisions of the Federal Deposit Insurance Corporation regulations found in Part 359 (entitled "Golden Parachute and Indemnification Payments") of Title 12 of the Code of Federal Regulations (or any successor provisions).

 

(d)           Notwithstanding anything to the contrary in the foregoing, any reimbursements or in-kind benefits provided under this Agreement that are subject to Code Section 409A shall be made in compliance with Treasury Regulation Section 1.409A-3(i)(1)(iv) and any reimbursements shall be made no later than the end of the Executive’s taxable year following the Executive’s taxable year in which the expense was incurred.  In addition, the amounts eligible for reimbursement, or in-kind benefits to be provided, during any one taxable year under this Agreement may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year under this Agreement and any right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

 

(e)           The  Executive  agrees  to  promptly repay  any  Compensation, bonuses or other amounts  paid to him by the Employing Company or previously paid to him by the Target or otherwise made available to him by either that is subject to recovery under any applicable law or regulation (including any rule of any exchange on which the securities of  the Company are then traded) where such compensation was in excess of what should have been paid or made available because the determination of the amount due was based, in whole or in part, on materially inaccurate financial information of the Employing Company or the Target or was in excess of, or a type of compensation limited by, the compensation limitations imposed by the TARP Standards for Compensation and Corporate Governance - Interim Final Rule, or any other applicable law, rule or regulation.

 

16.           No Reliance.  The Executive represents and acknowledges that in executing this Agreement, the Executive does not rely and has not relied upon any representation or statement by the Company and its agents, other than statements contained in this Agreement.

 

17.           Miscellaneous Provisions.

 

(a)           Further Assurances.  Each of the parties hereto shall do, execute, acknowledge, and deliver or cause to be done, executed, acknowledged, and delivered at any time and from time to time upon the request of any other party hereto, all such further acts, documents, and instruments as may be reasonably required to effect any of the transactions contemplated by this Agreement.

 

(b)           Binding Effect; Assignment.  This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and assigns; provided, however, that neither party hereto may assign this Agreement without the prior written consent of the other party.  Notwithstanding the foregoing, this Agreement may be assigned without the prior consent of the Executive to a successor of the Company (and the Executive hereby consents to the assignment of the Restrictive Covenants under this Agreement to a purchaser of all or substantially all of the assets of the Company or a transferee, by merger or otherwise, of all or substantially all of the businesses and assets of the Company) and, upon the Executive's death, this Agreement shall inure to the benefit of and be enforceable by the Executive's executors, administrators, representatives, heirs, distributees, devisees, and legatees and all amounts payable hereunder shall be paid to such persons or the estate of the Executive.

 

(c)           Waiver; Amendment.  No provision or obligation of this Agreement may be waived or discharged unless such waiver or discharge is agreed to in writing and signed by the Director of Corporate Development and the Executive.  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 later breach or noncompliance.  Except as expressly provided otherwise herein, this Agreement may be amended or supplemented only by a written agreement executed by the Director of Corporate Development and the Executive.

 

(d)           Headings.  The headings in this Agreement have been inserted solely for ease of reference and shall not be considered in the interpretation or enforcement of this Agreement.

 

(e)           Severability.  All provisions of this Agreement are severable from one another, and the unenforceability or invalidity of any provision hereof shall not affect the validity or enforceability of the remaining provisions.

 

(f)           Notice.  Any notice, request, instruction, or other document to be given hereunder to any party shall be in writing and delivered by hand, registered or certified United States mail, return receipt requested, or other form of receipted delivery, with all expenses of delivery prepaid, as follows:

 

	If to the Executive:	If to the Company:
	John K. Keach, Jr.	Old National Bancorp
	2730 Washington Street	Post Office Box 718
	Columbus, IN  47201	Evansville, IN   47705
		ATTENTION:  General Counsel

or to such other address as either party hereto may have furnished to the other in writing in accordance with the preceding.

 

(g)           No Counterparts.  This Agreement may not be executed in counterparts.

 

(h)           Governing Law; Jurisdiction; Venue; Waiver of Jury Trial.  This Agreement shall be governed by and construed in accordance with the laws of the State of Indiana, without reference to the choice of law principles or rules thereof.  The parties hereto irrevocably consent to the jurisdiction and venue of the state courts for the State of Indiana located in Evansville, Indiana, or the United States District Court for the Southern District of Indiana, Evansville Division, located in Vanderburgh County, Indiana, and agree that all actions, proceedings, litigation, disputes, or claims relating to or arising out of this Agreement shall be brought and tried only in such courts.  The Company, in its sole discretion, may, however, bring an action against the Executive in any court where jurisdiction over the Executive may be obtained.  EACH OF THE PARTIES EXPRESSLY WAIVES ANY RIGHTS TO A JURY TRIAL THAT IT MAY OTHERWISE HAVE IN ANY COURT WITH RESPECT TO THIS AGREEMENT TO THE MAXIMUM EXTENT PERMITTED BY LAW.

 

(i)           Entire Agreement.  This Agreement constitutes the entire and sole agreement between the Employer and the Executive with respect to the Executive's employment or the termination thereof, and there are no other agreements or understandings either written or oral with respect thereto.  The parties agree that any and all prior severance and/or change of control agreements between the parties have been terminated and are of no further force or effect.

 

(j)           Rules of Interpretation.  In interpreting this Agreement, the following rules shall apply:

 

(1)           The rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of this Agreement.

 

(2)           Words used in the singular shall be construed to include the plural, where appropriate, and vice versa, and words used in the masculine shall be construed to include the feminine, where appropriate, and vice versa.

 

(3)           It is the intention and purpose of the Company, Employing Company,  Employer and the Executive that this Agreement shall be, at all relevant times, in compliance with (or exempt from) Code Section 409A and all other applicable laws, and this Agreement shall be so interpreted and administered.  In addition to the general amendment rights of the Company, Employing Company and Employer with respect to the Agreement, the Company, Employing Company, and Employer specifically retain the

 

unilateral right (but not the obligation) to make, prospectively or retroactively, any amendment to this Agreement or any related document as they deem necessary or desirable to more fully address issues in connection with compliance with (or exemption from) Code Section 409A and such other laws.  In no event, however, shall this section or any other provisions of this Agreement be construed to require the Company, Employing Company or Employer to provide any gross-up for the tax consequences of any provisions of, or payments under, this Agreement and the Company, Employing Company and Employer shall have no responsibility for tax or legal consequences to the Executive (or his beneficiary) resulting from the terms or operation of this Agreement.  Also, in accordance with Code Section 409A, if the Executive is entitled to a distribution within a period following an event as permitted by Code Section 409A, the Executive will have no right to designate the taxable year of payment.

 

(4)           Except as provided in the preceding provisions of this Subsection, this Agreement shall be construed in accordance with the internal laws of the State of Indiana, without regard to conflict of law principles.

 

18.           Review and Consultation.  The Company and the Executive hereby acknowledge and agree that each (i) has read this Agreement in its entirety prior to executing it, (ii) understands the provisions and effects of this Agreement, (iii) has consulted with such attorneys, accountants, and financial and other advisors as it or he has deemed appropriate in connection with their respective execution of this Agreement, and (iv) has executed this Agreement voluntarily.  THE EXECUTIVE HEREBY UNDERSTANDS, ACKNOWLEDGES, AND AGREES THAT THIS AGREEMENT HAS BEEN PREPARED BY COUNSEL FOR THE COMPANY AND THAT THE EXECUTIVE HAS NOT RECEIVED ANY ADVICE, COUNSEL, OR RECOMMENDATION WITH RESPECT TO THIS AGREEMENT FROM THE COMPANY OR ITS COUNSEL.

 

 

 

		OLD NATIONAL BANCORP
		By:
John K. Keach, Jr.			James C. Ryan, III, Executive Vice President – Director of Corporate Development
Date			Date

 

For purposes of this Agreement, the following terms shall have the meanings specified below:

 

"Bank" means Old National Bank, the Company's principal subsidiary, and any successor to all or substantially all of its business.

 

"Code" means the Internal Revenue Code of 1986, as amended from time to time, and the rules and regulations promulgated thereunder.

 

"Company" means Old National Bancorp and any successor to all or substantially all of its business.

 

"Company's Business" means, collectively, the products and services provided by the Employer, including community banking, including lending activities (including individual loans consisting primarily of home equity lines of credit, residential real estate loans, and/or consumer loans, and commercial loans, including lines of credit, real estate loans, letters of credit, and lease financing) and depository activities (including noninterest-bearing demand, NOW, savings and money market, and time deposits), debit and ATM cards, merchant cash management, internet banking, and other general banking services.

 

"Compensation" means, as of the Termination Date, the Executive's annual base salary then in effect.

 

"Confidential Information" means the following:

 

(1)           materials, records, documents, data, statistics, studies, plans, writings, and information (whether in handwritten, printed, digital, or electronic form) relating to the Company's Business that are not generally known or available to the Company's business, trade, or industry or to individuals who work therein other than through a breach of this Agreement, or

 

(2)           trade secrets of the Employer (as defined in Indiana Code §24-2-3-2, as amended, or any successor statute).

 

Confidential Information includes, but is not limited to: (i) information about the Employer's employees; (ii) information about the Employer's compensation policies, structure, and implementation; (iii) hardware, software, and computer programs and technology used by Employer; (iv) Customer and Prospective Customer identities, lists, and databases, including private information related to customer history, loan activity, account balances, and financial information; (v) strategic, operating, and marketing plans; (vi) lists and databases and other information related to the Employer's vendors; (vii) policies, procedures, practices, and plans related to pricing of products and services; and (viii) information related to the Employer's acquisition and divestiture strategy.  Information or documents that are generally available or accessible to the public shall be deemed Confidential Information, if the information is retrieved,

 

gathered, assembled, or maintained by the Employer in a manner not available to the public or for a purpose beneficial to the Employer.

 

"Customer" means a person or entity who is a customer of the Employer at the time of the Executive's Termination of Employment or with whom the Executive had direct contact on behalf of the Employing Company at any time during the period of the Executive's employment with the Employing Company.

 

"Employer" means the Company and any other employer that is treated as a single employer with the Company pursuant to Code Section 414(b), (c), or (m).

 

"Employing Company" means the Company or the Bank.

 

"Excess Parachute Payment" has the meaning given to such term in Code Section 280G(b)(1).

 

"Parachute Payment" has the meaning give to such term in Code Section 280G(b)(2)(a)(i).

 

"Parachute Payment Limit" means three (3) times the base amount, as defined by Code Section 280G(b)(3).

 

"Prospective Customer" means a person or entity who was the direct target of sales or marketing activity by the Executive or whom the Executive knew was a target of the Employer's sales or marketing activities during the one year period preceding the Executive's Termination of Employment.

 

"Release" means the release referred to in Section 14.

 

"Restrictive Covenants" means the restrictions contained in Sections 10, 11, 12, and 13.

 

"Term" means the term of this Agreement, including any extensions thereof, as determined pursuant to Section 2.

 

"Termination Date" means the date of the Executive's Termination of Employment.

 

"Termination of Employment," and capitalized forms and derivations thereof, means the Executive's “separation from service” within the meaning of Code Section 409A.

 

"Weekly Pay" means the Executive's Compensation divided by fifty-two (52).

 

 

 

FOR VALUABLE CONSIDERATION, including the payment to the Executive of certain severance benefits, the Executive hereby makes this Release of All Claims ("Release") in favor of Old National Bancorp (including all subsidiaries and affiliates) ("Company") and its agents as set forth herein.

 

1.           The Executive releases, waives and discharges the Company and its agents (as defined below) from all claims, whether known or unknown, arising out of the Executive's employment relationship with the Company, the termination of that relationship, and all other events, incidents, or actions occurring before the date on which this Release is signed; provided, however, this Release shall not apply to any claim based on the Company's breach of Section 5 of the Employment Agreement.  Claims released herein include, but are not limited to, discrimination claims based on age, race, sex, religion, national origin, disability, veteran status, or any other employment claim, including claims arising under The Civil Rights Act of 1866, 42 U.S.C.  § 1981; Title VII of the Civil Rights Act of 1964; the Americans with Disabilities Act; the Age Discrimination in Employment Act of 1967; the Federal Rehabilitation Act of 1973; the Older Workers' Benefits Protection Act; the Employee Retirement Income Security Act of 1974; the Fair Labor Standards Act; the Family and Medical Leave Act (to the extent that FMLA claims may be released under governing law), the Indiana Civil Rights Act, the Indiana Wage Payment and Wage Claims Acts, any Federal or State wage and hour laws and all other similar Federal or State statutes; and any and all tort or contract claims, including, but not limited to, breach of contract, breach of good faith and fair dealing, infliction of emotional distress, defamation, or wrongful termination or discharge.

 

2.           The Executive further acknowledges that the Company has advised the Executive to consult with an attorney of the Executive's own choosing and that the Executive has had ample time and adequate opportunity to thoroughly discuss all aspects of this Release with legal counsel prior to executing this Release.

 

3.           The Executive agrees that the Executive is signing this Release of his own free will and is not signing under duress.

 

4.           In the event the Executive is forty (40) years of age or older, the Executive acknowledges that the Executive has been given a period of twenty-one (21) days to review and consider a draft of this Release in substantially the form of the copy now being executed and has carefully considered the terms of this Release.  The Executive understands that the Executive may use as much or all of the twenty-one (21) day period as the Executive wishes prior to signing, and the Executive has done so.

 

5.           In the event the Executive is forty (40) years of age or older, the Executive has been advised and understands that the Executive may revoke this Release within seven (7) days after acceptance.  ANY REVOCATION MUST BE IN WRITING AND HAND-DELIVERED TO:

 

Old National Bancorp

Attn:  General Counsel

One Main Street

Evansville, IN   47708

NO LATER THAN BY CLOSE OF BUSINESS ON THE SEVENTH (7TH) DAY FOLLOWING THE DATE OF EXECUTION OF THIS RELEASE.

 

6.           The "Company and its agents," as used in this Release, means the Company, its subsidiaries, affiliated or related corporations or associations, their predecessors, successors, and assigns, and the directors, officers, managers, supervisors, employees, representatives, servants, agents, and attorneys of the entities above described, and all persons acting, through, under or in concert with any of them.

 

7.           The Executive agrees to refrain from making any disparaging remarks concerning the Company or its agents.  The Company agrees to refrain from providing any information to third parties other than confirming dates of employment and job title, unless the Executive gives the Company written authorization to release other information or as otherwise required by law.  With respect to the Company, this restriction pertains only to official communications made by the Company's directors and/or officers and not to unauthorized communications by the Company's employees or agent.  This restriction will not bar the Company from disclosing the Release as a defense or bar to any claim made by the Executive in derogation of this Release.