SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K/A
AMENDMENT NO. 1
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-5872
CONTINENTAL BANK CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-2664023
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
231 South LaSalle Street
Chicago, Illinois 60697
(Address of principal executive offices) (Zip Code)
(312) 828-1614
(Registrant's telephone number
including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange
on which registered
Common Stock--$4 par value New York Stock Exchange
Chicago Stock Exchange
Pacific Stock Exchange
Adjustable Rate Preferred Stock,
Series 1
- - --$50 stated value New York Stock Exchange
Adjustable Rate Cumulative Preferred
Stock, Series 2
- - --$100 stated value New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant has required to
file such reports) and (2) has been subject to such filing
requirements for the past 90 days. Yes X No ______
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K (229.405 of this chapter)
is not contained herein, and will not be contained, to the best
of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-
K or any amendment to this Form 10-K. [ ]
The aggregate market value of the voting stock held by non-
affiliates of the registrant as of January 31, 1994, based on the
reported closing price on that date on the New York Stock
Exchange--Composite Tape of $35.125 per share:
Common Stock--$4 par value--$1,781,886,543*
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of January 31, 1994.
Common Stock--$4 par value--51,265,932 shares.
*Excludes reported beneficial ownership by all directors and
executive officers of the registrant; however, this
determination does not constitute an admission of affiliate
status for any of these individual stockholders.<PAGE>
<PAGE> 1
The following amends and replaces Part I, Item 1 and Part III of
Continental Bank Corporation's (Continental) Form 10-K for the
fiscal year ended December 31, 1993.
ITEM 1. BUSINESS
CONTINENTAL BANK CORPORATION
Continental Bank Corporation (Continental) is a bank holding
company registered under the Bank Holding Company Act of 1956, as
amended, the principal asset of which is all of the outstanding
stock of Continental Bank N.A. (Bank). Continental was
incorporated in Delaware in November 1968, and the Bank became
its subsidiary in March 1969. The Bank and its predecessors have
been in business for more than 135 years. As the context
requires, references to Continental in the remaining portion of
Item 1 of this Form 10-K mean either Continental acting as a
single entity or Continental acting through its direct or
indirect subsidiaries.
For information on the proposed merger of Continental and
BankAmerica Corporation (BankAmerica), see Note 1--Proposed
Merger with BankAmerica--of Notes to Consolidated Financial
Statements.
Continental's strategic plan focuses on the needs of its business
customers. Continental's business customer base consists
principally of its longstanding corporate, institutional, and
depository customers in the United States and abroad. Through
its direct and indirect subsidiaries, Continental concentrates on
four principal areas: corporate finance, specialized financial
services, trading, and equity financing. Continental is both an
originator of financial products to be issued or used by its
customers and a distributor of financial products that investors
may purchase or trade.
As an originator of financial products, Continental's objective
is to provide corporations, governmental entities, and other
depository institutions with funding capabilities. In
distribution, the objective is to provide investors with
securities and other investment vehicles, many of which are
originated by the Bank, that will meet their investment
objectives.
Continental provides a broad range of deposit, credit, advisory,
and related financial services to its business customers. These
customers are provided a variety of capital funding alternatives,
including syndicated and non-syndicated long-term debt,
acquisition financing, secured business credit, and securitized
financings. Continental also arranges private placements, lease
financing, and commercial paper programs. Continental has a
large domestic and international network of correspondent banking
relationships and provides a wide variety of services for banks,
including check clearing, transfer of funds, loan participations,
and investment advice. Continental provides direct transactional
<PAGE> 2
assistance for its customers through cash management, investment
advisory, securities transfer, custodial, corporate and pension
trust, and similar types of operational services. Continental
engages in market-making and risk-management activities in all
U.S. and selected international capital markets to provide
specialized services for its customers. Continental arranges
financial transactions (including mergers, acquisitions, and
divestitures) and distributes financial assets to third parties.
Continental also provides foreign-exchange, money-market,
interest-rate, and financial futures products and services.
Continental's products and services are provided through a
network of domestic and foreign subsidiaries, affiliates,
branches, and representative offices in key capital markets
worldwide. In 1993, approximately 97 percent of Continental's
consolidated gross revenues, which are composed of interest
revenue and fees, trading, and other revenues, was derived from
the Bank. The Bank's commercial lending relationships currently
generate the greatest percentage of corporate consolidated gross
revenues. While Continental anticipates increased contributions
from the operations of its other subsidiaries, the Bank is
expected to continue to be the major source of Continental's
consolidated gross revenues for the foreseeable future.
Continental also owns directly or indirectly a small-business
investment company and an equity-investment company. Other
subsidiaries engage in asset-based financing and fiduciary and
investment services.
As an extension of Continental's overall business focus, the
Bank, from offices in Chicago, Los Angeles, and Dallas,
concentrates on meeting the deposit, financing, investment,
brokerage, and fiduciary needs of professionals, entrepreneurs,
executives, and private investors. Fiduciary and investment
services for these customers are also offered through
Continental's subsidiary in Florida.
Continental is a legal entity separate and distinct from the Bank
and its other subsidiaries. Under federal law, there are various
restrictions on the extent to which the Bank may finance or
otherwise supply funds to Continental and its affiliates.
<PAGE>
<PAGE> 3
STATISTICAL INFORMATION
<TABLE>
Consolidated Average Balance Sheet and Net Interest Revenue
<CAPTION>
1993 1992
Average Average Average Average
($ in millions) balance Interest(a) rate(b) balance Interest(a) rate(b)
<S> <C> <C> <C> <C> <C> <C>
Interest-Earning Assets
Interest-bearing deposits,
primarily foreign.................... $ 1,941 $ 151 7.80% $ 1,897 $ 151 7.95%
Federal funds sold..................... 357 11 3.20 268 10 3.68
Securities purchased under agreements
to resell............................ 849 54 6.31 841 66 7.86
Trading account assets................. 1,454 73 5.00 1,239 48 3.92
U.S. Treasury and federal agency
securities........................... 449 21 4.65 789 50 6.35
State, county, and municipal
securities........................... 1 -- 8.08 36 3 7.90
Other securities....................... 76 9 12.05 248 40 16.20
Total securities held to maturity.... 526 30 5.72 1,073 93 8.68
U.S. Treasury and federal agency
securities........................... 465 26 5.50 -- -- --
Other securities....................... 101 11 11.11 -- -- --
Total securities held for sale....... 566 37 6.50 -- -- --
Loans, net of unearned income
Domestic............................. 10,732 694 6.46 11,502 800 6.96
Foreign.............................. 1,186 74 6.22 1,754 137 7.81
Total loans(c)......................... 11,918 768 6.44 13,256 937 7.07
Total interest-earning assets.......... 17,611 1,124 6.38 18,574 1,305 7.03
Other Assets
Cash and non-interest-bearing deposits. 1,847 1,824
Interest and fees receivable........... 141 163
Properties and equipment............... 245 230
Equity investments..................... 545 439
Other assets........................... 1,433 1,213
Reserve for credit losses.............. (385) (411)
Total assets......................... $21,437 $22,032
Interest-Bearing Liabilities
Savings deposits....................... $ 2,309 $ 53 2.29% $ 2,269 $ 66 2.91%
Other time deposits.................... 5,037 175 3.47 5,586 243 4.35
Foreign-office deposits................ 3,072 163 5.32 4,193 240 5.72
Total interest-bearing deposits...... 10,418 391 3.75 12,048 549 4.56
Federal funds purchased................ 967 29 2.98 1,094 38 3.47
Securities sold under agreements to
repurchase........................... 623 30 4.84 729 36 4.96
Other short-term borrowings............ 2,317 129 5.57 1,390 112 8.10
Long-term debt......................... 1,153 78 6.71 993 77 7.71
Total interest-bearing liabilities... 15,478 657 4.24 16,254 812 5.00
Other Liabilities and Stockholders'
Equity
Non-interest-bearing deposits
Domestic offices..................... 2,596 2,428
Foreign offices...................... 63 42
Other liabilities...................... 1,473 1,715
Stockholders' equity................... 1,827 1,593
Total liabilities and
stockholders' equity............... $21,437 $22,032
Average earning assets--domestic....... $13,187 $13,740
--foreign........ 4,424 4,834
--total.......... 17,611 18,574
Net interest revenue --domestic....... $ 402 $ 410
--foreign........ 65 83
--total.......... 467 493
Net interest margin(d)--domestic....... 3.05% 2.98%
--foreign........ 1.47 1.72
--total.......... 2.65 2.66
<PAGE> 4
<FN>
(a) Taxable-equivalent adjustments are used in adjusting
interest on tax-exempt assets (primarily state, county, and
municipal securities) to a fully taxable basis. Such
adjustments are based on the prevailing federal and state
income tax rates. For 1993 and 1992 the adjustments
amounted to $3 million and $4 million, respectively.
(b) Average rate is computed using amounts rounded to thousands.
(c) The principal amounts of cash-basis and renegotiated loans
have been included in the average loan balances used to
determine the rate earned on loans. Interest on cash-basis
loans is included in revenue only to the extent that cash
payments have been received, and is included for
renegotiated loans at renegotiated rates.
(d) Net interest margin is net interest revenue on a taxable-
equivalent basis divided by average earning assets.
</TABLE>
<PAGE>
<PAGE> 5
<TABLE>
Consolidated Average Balance Sheet and Net Interest Revenue
<CAPTION>
1991
Average Average
balance Interest(a) rate(b)
<S> <C> <C> <C>
Interest-Earning Assets
Interest-bearing deposits,
primarily foreign.................... $ 2,309 $ 254 10.99%
Federal funds sold..................... 354 21 5.91
Securities purchased under agreements
to resell............................ 1,466 87 5.97
Trading account assets................. 1,549 92 5.92
U.S. Treasury and federal agency
securities........................... 672 53 7.84
State, county, and municipal
securities........................... 40 3 7.91
Other securities....................... 260 40 15.53
Total securities held to maturity.... 972 96 9.90
U.S. Treasury and federal agency
securities........................... -- -- --
Other securities....................... -- -- --
Total securities held for sale....... -- -- --
Loans, net of unearned income
Domestic............................. 12,331 1,056 8.56
Foreign.............................. 2,254 240 10.67
Total loans(c)......................... 14,585 1,296 8.89
Total interest-earning assets.......... 21,235 1,846 8.70
Other Assets
Cash and non-interest-bearing deposits. 1,793
Interest and fees receivable........... 183
Properties and equipment............... 234
Equity investments..................... 319
Other assets........................... 1,231
Reserve for credit losses.............. (378)
Total assets......................... $24,617
Interest-Bearing Liabilities
Savings deposits....................... $ 1,969 $ 84 4.28%
Other time deposits.................... 6,402 418 6.52
Foreign-office deposits................ 4,686 425 9.07
Total interest-bearing deposits...... 13,057 927 7.10
Federal funds purchased................ 1,273 71 5.56
Securities sold under agreements to
repurchase........................... 1,289 84 6.49
Other short-term borrowings............ 2,341 185 7.91
Long-term debt......................... 943 85 9.06
Total interest-bearing liabilities... 18,903 1,352 7.15
Other Liabilities and Stockholders'
Equity
Non-interest-bearing deposits
Domestic offices..................... 2,260
Foreign offices...................... 52
Other liabilities...................... 1,798
Stockholders' equity................... 1,604
Total liabilities and
stockholders' equity............... $24,617
Average earning assets--domestic....... $15,574
--foreign........ 5,661
--total.......... 21,235
Net interest revenue --domestic....... $ 421
--foreign........ 73
--total.......... 494
Net interest margin(d)--domestic....... 2.71%
--foreign........ 1.30
--total.......... 2.33
<PAGE>
<PAGE> 6
<FN>
(a) Taxable-equivalent adjustments are used in adjusting
interest on tax-exempt assets (primarily state, county, and
municipal securities) to a fully taxable basis. Such
adjustments are based on the prevailing federal and state
income tax rates. For 1991, the adjustments amounted to
$7 million.
(b) Average rate is computed using amounts rounded to thousands.
(c) The principal amounts of cash-basis and renegotiated loans
have been included in the average loan balances used to
determine the rate earned on loans. Interest on cash-basis
loans is included in revenue only to the extent that cash
payments have been received, and is included for
renegotiated loans at renegotiated rates.
(d) Net interest margin is net interest revenue on a taxable-
equivalent basis divided by average earning assets.
</TABLE>
<PAGE>
<PAGE> 7
<TABLE>
Analysis of Year-To-Year Changes in Net Interest Revenue
<CAPTION>
1993/1992 1992/1991
Increase (decrease) Increase (decrease)
due to change in: due to change in:
Average Average Average Average
($ in millions) balance rate Total balance rate Total
<S> <C> <C> <C> <C> <C> <C>
Interest revenue*
Interest-bearing deposits,
primarily foreign............. $ 3 $ (3) $ -- $ (40) $ (63) $(103)
Federal funds sold.............. 3 (2) 1 (4) (7) (11)
Securities purchased under
agreements to resell.......... 1 (13) (12) (44) 23 (21)
Trading account assets.......... 9 16 25 (16) (28) (44)
Securities...................... 2 (28) (26) 9 (12) (3)
Domestic loans.................. (52) (54) (106) (67) (189) (256)
Foreign loans................... (39) (24) (63) (47) (56) (103)
Total interest revenue........ (73) (108) (181) (209) (332) (541)
Interest expense
Domestic office deposits........ (19) (62) (81) (29) (164) (193)
Foreign office deposits......... (61) (16) (77) (41) (144) (185)
Federal funds purchased......... (4) (5) (9) (9) (24) (33)
Securities sold under
agreements to repurchase...... (5) (1) (6) (31) (17) (48)
Other short-term borrowings..... 59 (42) 17 (77) 4 (73)
Long-term debt.................. 12 (11) 1 4 (12) (8)
Total interest expense........ (18) (137) (155) (183) (357) (540)
Net change in net interest
revenue................... $(55) $ 29 $ (26) $ (26) $ 25 $ (1)
<FN>
*On a taxable-equivalent basis.
</TABLE>
SECURITIES
<TABLE>
Securities Held to Maturity
<CAPTION>
($ in millions) Amount Yield(a)
<S> <C> <C>
U.S. Treasury and federal agency securities
Maturity distribution on December 31, 1993
Within 1 year................................... $378 4.82%
After 1 but within 5 years...................... 53 4.85
After 5 but within 10 years..................... 14 4.86
After 10 years.................................. 113 5.59
Total on December 31, 1993.................... 558 4.98
Total on December 31, 1992........................ 317 4.42
Total on December 31, 1991........................ 763 7.66
State, county, and municipal securities
Total on December 31, 1993.................... -- --
Total on December 31, 1992........................ -- --
Total on December 31, 1991........................ 37 8.13
Other securities
Maturity distribution on December 31, 1993
Within 1 year................................... 1 9.24
After 1 but within 5 years...................... 2 5.76
After 5 but within 10 years..................... -- --
After 10 years.................................. 46 4.70
Total on December 31, 1993(b)................. 49 4.87
Total on December 31, 1992........................ 190 6.79
Total on December 31, 1991........................ 251 7.44
<FN>
(a) The weighted-average yields are calculated on the basis of the cost and
effective yields weighted for the scheduled maturity of each issue. The
yields for tax-exempt securities are calculated on a taxable-equivalent
basis incorporating a combined federal and state effective tax rate of
approximately 38%.
(b) Securities of any single issuer were less than 10% of stockholders'
equity on December 31, 1993.
</TABLE>
<PAGE> 8
<TABLE>
Securities Available for Sale(a)
<CAPTION>
($ in millions) Amount Yield(b)
<S> <C> <C>
U.S. Treasury and federal agency securities
Maturity distribution on December 31, 1993
Within 1 year................................... $ -- --%
After 1 but within 5 years...................... -- --
After 5 but within 10 years..................... -- --
After 10 years.................................. 550 5.02
Total on December 31, 1993.................... 550 5.02
Other securities
Maturity distribution on December 31, 1993
Within 1 year................................... 26 4.15
After 1 but within 5 years...................... 144 5.74
After 5 but within 10 years..................... 47 11.96
After 10 years.................................. 153 5.65
Total on December 31, 1993(c)................. 370 6.39
<FN>
(a) As a result of the adoption of Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in Debt
and Equity Securities," on December 31, 1993, Continental transferred
$665 million of securities from securities held for sale, $157 million
from loans, and $98 million from trading account assets to securities
available for sale.
(b) The weighted-average yields are calculated on the basis of the cost and
effective yields weighted for the scheduled maturity of each issue. The
yields for tax-exempt securities are calculated on a taxable-equivalent
basis incorporating a combined federal and state effective tax rate of
approximately 38%.
(c) Securities of any single issuer were less than 10% of stockholders'
equity on December 31, 1993.
</TABLE>
<TABLE>
Securities Held for Sale(a)
<CAPTION>
December 31, 1992 ($ in millions) Amount Yield(b)
<S> <C> <C>
U.S. Treasury and federal agency securities........ $414 6.48%
State, county, and municipal securities............ 34 8.06
Other securities................................... 47 6.31
<FN>
(a) On December 31, 1992, Continental reclassified $495 million of
securities held to maturity to securities held for sale.
(b) The weighted-average yields are calculated on the basis of the cost and
effective yields weighted for the scheduled maturity of each issue. The
yields for tax-exempt securities are calculated on a taxable-equivalent
basis incorporating a combined federal and state effective tax rate of
approximately 37%.
</TABLE>
<PAGE> 9
LOANS
The tables for year-end and average loans for the last five years
are presented in Note 6--Loans--of Notes to Consolidated
Financial Statements on pages 71 through 73.
<TABLE>
Maturity and Interest-Rate Sensitivity of Loans*
<CAPTION>
After one
One year through After five
December 31, 1993 ($ in millions) or less five years years Total
<S> <C> <C> <C> <C>
Maturity
Domestic loans
Commercial and industrial.......... $3,082 $2,985 $1,023 $ 7,090
Mortgage and real estate........... 602 575 55 1,232
Financial institutions............. 360 491 260 1,111
All other.......................... 772 278 168 1,218
Total domestic loans............. 4,816 4,329 1,506 10,651
Foreign loans...................... 613 144 192 949
Total loans...................... $5,429 $4,473 $1,698 $11,600
Rate sensitivity
Predetermined interest rates....... $ 367 $ 104
Floating interest rates............ 4,106 1,594
Total............................ $4,473 $1,698
<FN>
*Estimated distribution, excluding leases, and loans secured by one-to-four-
family residential properties.
</TABLE>
Nonperforming Loans
The discussion of and tables for nonperforming loans for the last
five years are presented in Note 6--Loans--of Notes to
Consolidated Financial Statements on pages 71 through 73.
Information concerning Continental's interest-accrual policies
for loans is presented in Note 2--Summary of Significant
Accounting Policies--of Notes to Consolidated Financial
Statements on pages 64 through 68.
<PAGE> 10
CREDIT ANALYSIS AND LOSS EXPERIENCE
<TABLE>
Analysis of Net Credit Loss Experience
<CAPTION>
($ in millions) 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Reserve for Credit Losses--Beginning of Year
General....................................... $ 355 $ 385 $ 288 $ 257 $ 992
Allocated transfer risk....................... 21 25 -- -- --
Total reserve for credit losses--beginning
of year................................... 376 410 288 257 992
Provision for Credit Losses
General....................................... 183 124 315 118 44
Allocated transfer risk....................... (2) 1 25 -- --
Total provision for credit losses........... 181 125 340 118 44
Charge-Offs
Commercial and industrial loans............... 34 74 80 55 70
Mortgage and real estate loans................ 184 68 98 19 8
Loans to financial institutions............... 2 4 6 -- --
Consumer loans................................ 4 2 7 -- 1
All other loans............................... -- -- 26 2 --
Total domestic charge-offs.................. 224 148 217 76 79
Foreign charge-offs*.......................... 53 68 60 55 718
Total charge-offs........................... 277 216 277 131 797
Recoveries
Commercial and industrial loans............... 20 9 11 3 14
Mortgage and real estate loans................ 2 3 2 4 --
Loans to financial institutions............... -- -- 5 -- 1
Consumer loans................................ -- 1 -- 1 --
All other loans............................... -- 1 4 -- 1
Total domestic recoveries................... 22 14 22 8 16
Foreign recoveries............................ 33 44 32 36 3
Total loan recoveries....................... 55 58 54 44 19
Other Adjustments
Other adjustments............................. (7) (1) 5 -- (1)
Total other adjustments..................... (7) (1) 5 -- (1)
Reserve for Credit Losses--Year-End
General....................................... 328 355 385 288 257
Allocated transfer risk....................... -- 21 25 -- --
Total reserve for credit losses--year-end... $ 328 $ 376 $ 410 $ 288 $ 257
Reserve as a percentage of loans--year-end.... 2.80% 3.02% 2.95% 1.88% 1.65%
Net charge-offs............................... $ 222 $ 158 $ 223 $ 87 $ 778
Net charge-offs as a percentage of average
loans....................................... 1.86% 1.19% 1.53% 0.57% 4.83%
<FN>
*Included charge-offs against the allocated transfer risk reserve of $19 million in 1993
and $5 million in 1992.
</TABLE>
Discussion of the reserve for credit losses is set forth on
page 30 and pages 52 and 53 of Management's Discussion and
Analysis, under the captions "Provision for Credit Losses" and
"Reserve for Credit Losses," respectively.
<PAGE> 11
<TABLE>
Allocation of Reserve for Credit Losses
<CAPTION>
1993 1992 1991 1990 1989
December 31 Reserve Percent of Reserve Percent of Reserve Percent of Reserve Percent of Reserve Percent of
($ in millions) amount total loans amount total loans amount total loans amount total loans amount total loans
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Domestic loans
Commercial and
industrial.......... $ 85 60.4% $ 80 56.0% $117 52.3% $117 51.1% $ 64 51.3%
Mortgage and real
estate.............. 100 11.5 104 16.5 73 17.7 27 18.3 23 17.9
Financial
institutions........ 8 9.5 7 9.7 6 7.8 15 6.8 7 6.1
Consumer.............. 4 3.9 2 3.1 2 2.6 3 2.2 3 2.3
All other ............ 3 6.5 2 5.0 2 5.2 2 4.4 2 5.1
Total domestic...... 200 91.8 195 90.3 200 85.6 164 82.8 99 82.7
Foreign loans
Foreign............... 23 8.2 43 9.7 58 14.4 49 17.2 51 17.3
Total allocated....... 223 100.0 238 100.0 258 100.0 213 100.0 150 100.0
Unallocated........... 105 -- 138 -- 152 -- 75 -- 107 --
Total............... $328 100.0% $376 100.0% $410 100.0% $288 100.0% $257 100.0%
</TABLE>
The following table presents an analysis of the changes in the
foreign component of the reserve for credit losses for the five
years ended December 31, 1993:
<TABLE>
Changes in Foreign Component of Reserve for Credit Losses
<CAPTION>
December 31 ($ in millions) 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Balance at beginning of year....................... $ 43 $ 58 $ 49 $ 51 $ 763
Provisions for credit losses....................... -- 10 37 16 4
Charge-offs*....................................... (53) (68) (60) (55) (718)
Recoveries......................................... 33 44 32 36 3
Other adjustments.................................. -- (1) -- 1 (1)
Balance at end of year........................... $ 23 $ 43 $ 58 $ 49 $ 51
<FN>
*Included charge-offs against the allocated transfer risk reserve of $19 million in
1993 and $5 million in 1992.
</TABLE>
DEPOSITS
<TABLE>
Average Deposits in Foreign Offices
<CAPTION>
($ in millions) 1993 1992 1991
<S> <C> <C> <C>
Banks............................................... $2,231 $3,257 $3,551
Governments and official institutions............... 79 70 95
Other time.......................................... 760 870 1,051
Other demand........................................ 65 38 41
Total............................................. $3,135 $4,235 $4,738
</TABLE>
<PAGE> 12
<TABLE>
Time Deposits of $100,000 or More
<CAPTION>
Time certificates Other time
December 31, 1993 ($ in millions) of deposit deposits Total
<S> <C> <C> <C>
Maturity distribution in domestic offices
3 months or less............................ $ 515 $ 79 $ 594
Over 3 through 6 months..................... 491 2 493
Over 6 through 12 months.................... 284 2 286
Over 12 months.............................. 3,425 26 3,451
Total domestic offices.................... 4,715 109 4,824
In foreign offices
Foreign offices............................. 13 2,106 2,119
Total..................................... $4,728 $2,215 $6,943
</TABLE>
SHORT-TERM BORROWINGS
<TABLE>
Short-Term Borrowings
<CAPTION>
($ in millions) 1993 1992 1991
<S> <C> <C> <C>
Federal funds purchased(a)
Balance on December 31..................... $1,312 $1,367 $ 999
Maximum balance at any month-end........... 1,312 1,489 1,666
Average amount outstanding................. 967 1,094 1,273
Average interest rate
For the year............................. 2.98% 3.47% 5.56%
On December 31........................... 2.96 2.93 4.41
Securities sold under agreements to
repurchase(a)
Balance on December 31..................... $ 419 $ 667 $ 943
Maximum balance at any month-end........... 886 1,470 1,639
Average amount outstanding................. 623 729 1,289
Average interest rate
For the year............................. 4.84% 4.96% 6.49%
On December 31........................... 7.76 4.17 5.12
Demand notes issued to the U.S. Treasury
Balance on December 31..................... $1,300 $ 768 $1,300
Maximum balance at any month-end........... 1,385 1,800 1,300
Average amount outstanding................. 651 579 677
Average interest rate
For the year............................. 2.81% 3.37% 5.56%
On December 31........................... 2.75 2.66 4.13
All other borrowings(b)
Balance on December 31..................... $1,718 $1,419 $ 952
Maximum balance at any month-end........... 1,783 1,419 2,178
Average amount outstanding................. 1,666 811 1,664
Average interest rate
For the year............................. 6.65% 11.48% 8.86%
On December 31........................... 7.22 6.34 14.70
Total
Balance on December 31..................... $4,749 $4,221 $4,194
Maximum balance at any month-end........... 4,749 4,461 6,303
Average amount outstanding................. 3,907 3,213 4,903
Average interest rate
For the year............................. 4.81% 5.81% 6.92%
On December 31........................... 5.25 4.48 7.12
<FN>
(a) Generally mature within 30 days.
(b) Consisted primarily of borrowings of the foreign branches and
subsidiaries and commercial paper.
</TABLE>
<PAGE> 13
FINANCIAL RATIOS
<TABLE>
Selected Statistical Information
<CAPTION>
Year ended December 31 ($ in millions, except common share data) 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Operating Results
Net interest revenue.................................................. $ 464 $ 489 $ 487 $ 498 $ 540
Fees, trading, and other revenues(a).................................. 640 475 477 436 452
Total revenues...................................................... 1,104 964 964 934 992
Provision for credit losses........................................... 181 125 340 118 44
Operating expenses(a)................................................. 683 597 680 722 652
Income tax expense (credit)........................................... (18) 20 17 6 10
Income (loss) from continuing operations.............................. 258 222 (73) 88 286
Loss from business held for sale...................................... -- -- (3) (13) (139)
Income (loss) before cumulative effect of accounting change........... 258 222 (76) 75 147
Cumulative effect of accounting change for income taxes............... 80 -- -- -- --
Net income (loss)..................................................... $ 338 $ 222 $ (76) $ 75 $ 147
Per Common Share Data
Earnings (loss) from continuing operations and before cumulative
effect of accounting change......................................... $ 4.12 $ 3.44 $ (2.03) $ 0.95 $ 4.64
Earnings from cumulative effect of accounting change.................. 1.47 -- -- -- --
Earnings (loss)....................................................... 5.59 3.44 (2.08) 0.70 2.06
Cash dividends declared............................................... 0.60 0.60 0.80 1.00 0.85
Book value(b)......................................................... 30.01 24.06 20.89 23.73 24.01
Year-End Balances
Loans(c).............................................................. $11,729 $12,450 $13,881 $15,330 $15,571
Assets................................................................ 22,601 22,467 24,008 27,143 29,549
Deposits.............................................................. 13,542 14,144 15,735 16,098 17,176
Stockholders' equity.................................................. 1,923 1,688 1,512 1,665 1,680
Financial Ratios
Year-end
Common equity to total assets(b).................................... 6.79% 5.78% 4.68% 4.70% 4.37%
Equity to total assets(d)........................................... 8.51 7.51 6.30 6.13 5.69
Reserve for credit losses to total loans(c)......................... 2.80 3.02 2.95 1.88 1.65
Average equity to average total assets................................ 8.52 7.23 6.52 5.60 5.75
Return on(e)
Average total assets................................................ 1.20 1.01 (0.30) 0.30 0.97
Average common equity(b)............................................ 15.58 15.61 (8.97) 4.00 19.40
Common dividend payout................................................ 10.73 17.44 (f) 142.86 41.26
Operating expenses to total revenues(g)............................... 55.71 60.58 68.88 77.30 65.73
Net interest margin(h)................................................ 2.65 2.66 2.33 1.99 2.12
<FN>
(a) Amounts for 1992 and 1991 restated to reflect reclassification of certain revenues and expenses to net costs of other
nonperforming assets (ONPA).
(b) Assumed conversion of Junior Perpetual Convertible Preference Stock outstanding until it was converted to common stock in
June 1991.
(c) Restated to reflect reclassification of certain loans from other real estate owned for 1992 and 1991. See Note 2 to the
financial statements.
(d) On December 31, 1993, the ratios of Tier 1 capital and total capital to risk-adjusted assets were 7.8% and 10.8%.
(e) Based on continuing operations.
(f) Ratio not meaningful due to net loss for the year.
(g) Excludes net costs of ONPA.
(h) Computed using amounts rounded in thousands.
</TABLE>
<PAGE> 14
<TABLE>
Ratios of Earnings to Fixed Charges
<CAPTION>
Year ended December 31 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
Earnings to fixed charges
Excluding interest on deposits.......... 1.88x 1.90x 0.87x 1.12x 1.37x
Including interest on deposits.......... 1.36x 1.30x 0.96x 1.04x 1.13x
Earnings to combined fixed charges and
preferred stock dividend requirements
Excluding interest on deposits.......... 1.78x 1.80x 0.88x 1.11x 1.35x
Including interest on deposits.......... 1.34x 1.28x 0.96x 1.04x 1.13x
</TABLE>
For purposes of computing these ratios, earnings represent income
from continuing operations before income taxes after adding back
fixed charges. Fixed charges represent interest and one-third of
rents (the portion deemed representative of the interest factor).
Preferred stock dividend requirements represent an amount equal
to the pretax earnings required to meet applicable preferred
stock dividend requirements.
Earnings for 1991 were inadequate to cover fixed charges. The
coverage deficiency for both fixed charges and combined fixed
charges and preferred stock dividend requirements was
$56 million.
FOREIGN OUTSTANDINGS
Information concerning Continental's foreign outstandings is set
forth on pages 53 through 55 of Management's Discussion and
Analysis, under the caption "Country Risk."
LOAN CONCENTRATIONS
A discussion addressing risk diversification is set forth on
pages 40 through 53 of Management's Discussion and Analysis,
under the caption "Credit Risk Management."
FOREIGN OPERATIONS
Information concerning Continental's foreign operations is
presented in Note 22--Domestic and Foreign Operations--of Notes
to Consolidated Financial Statements on pages 97 and 98.
EMPLOYEES
As of December 31, 1993, Continental had (on a
full-time-equivalent basis) 4,238 officers and employees, all but
32 of whom were employed by the Bank and its subsidiaries.
COMPETITION
Active competition exists in local, regional, national, and/or
international markets in all principal business areas in which
Continental is currently engaged, not only with other national
and state banks but also with savings and loan institutions,
finance companies, and other financial services companies.
<PAGE> 15
Continental competes principally through prices and the quality
and nature of services offered. In attracting deposits,
Continental's banking subsidiaries pay interest, subject to
applicable government regulations, that reflects adjustments in
the money markets. Continental's goal is to provide
the best possible service for its customers, and in many business
areas, including trust activities, correspondent banking, and
international banking, service is a primary means of competition.
MONETARY POLICY AND ECONOMIC CONDITIONS
Two key factors in the performance and profitability of bank
holding companies are loan volume and the margin or spread
between earning yields and interest rates paid to obtain lendable
funds in worldwide money markets. Major influences on these
factors are federal government policies, including those of the
Federal Reserve Board (FRB). Designed to promote orderly
economic growth and to control the growth of both money and
credit, these policies influence financial and credit market
conditions, and affect general interest-rate levels and the
ability to lend. Thus, changes in these policies can
significantly affect Continental's future business and earnings.
Discussion and analysis of the economic environment and its
impact on Continental's 1993 and future earnings is set forth on
pages 25 through 57 of Management's Discussion and Analysis.
SUPERVISION AND REGULATION
In addition to setting monetary policy, the FRB is the principal
regulator of bank holding companies such as Continental. The
Bank Holding Company Act of 1956, as amended, generally limits
bank holding companies to activities that the FRB determines to
be closely related to banking or managing or controlling banks.
Under FRB policy, Continental is expected to act as a source of
strength to its principal subsidiary, the Bank, and to commit
resources in support of it.
A bank holding company cannot acquire substantially all of the
assets or control more than 5 percent of the voting shares of any
commercial bank of which it is not already the majority
shareholder without the approval of the FRB. Also, the FRB
cannot approve any application to acquire shares of an additional
commercial bank located outside the state in which a holding
company's existing bank subsidiaries are located unless
specifically authorized by the laws of the additional bank's
state. Illinois has enacted a reciprocal national interstate
banking statute, which became effective on December 1, 1990. The
statute authorizes a bank holding company whose principal place
of business is in another state to acquire control of an Illinois
bank or bank holding company if the laws of the home state of the
acquiring bank holding company authorize an Illinois bank holding
company to acquire control of a bank or bank holding company in
that state. The approval of the Illinois Commissioner of Banks
and Trust Companies (Illinois Commissioner) is required to effect
such an acquisition within Illinois.
<PAGE> 16
The FRB has adopted risk-based capital guidelines for bank
holding companies. The minimum ratio of qualifying total capital
to risk-adjusted assets (including certain off-balance-sheet
items, such as standby letters of credit) is 8 percent. At least
half of the total capital is to comprise common stock, retained
earnings, and a limited amount of qualifying perpetual preferred
stock, less disallowed intangibles, including goodwill (Tier 1
capital). The remainder may consist of subordinated debt, other
preferred stock, and a limited amount of loan loss reserves (Tier
2 capital). In addition, the FRB has established minimum
leverage ratio guidelines for bank holding companies. These
guidelines provide for a minimum leverage ratio of Tier 1 capital
to adjusted average quarterly assets equal to between 3 percent
and 5 percent. The FRB has not advised Continental of any
specific minimum Tier 1 leverage ratio applicable to it.
Information concerning Continental's capital ratios is set forth
on pages 34 and 35 of Management's Discussion and Analysis, under
the caption "Capital."
As a national bank, the Bank is a regulated entity permitted to
engage only in banking and activities incidental to banking.
National banks are primarily regulated and examined by the Office
of the Comptroller of the Currency (Comptroller). In addition,
national banks are subject to certain regulations adopted by the
FRB and the Federal Deposit Insurance Corporation (FDIC). Major
matters regulated include loan limits, deposit reserves and
insurance, interest rates, securities dealings, international
operations, dividends, and transactions with affiliates. The
Comptroller has adopted risk-based capital and minimum leverage
ratio guidelines for national banks similar to those adopted by
the FRB for bank holding companies. The Comptroller has not
advised the Bank of any specific leverage ratio applicable to it.
On December 31, 1993, the Bank's capital ratios exceeded those
required under the Comptroller's guidelines.
In late 1991, the Federal Deposit Insurance Corporation
Improvement Act of 1991 (FDICIA) became law. The statute
significantly revised key aspects of bank regulation. Many parts
of the statute have delayed effective dates and provisions for
phasing in certain new requirements. The federal bank regulatory
agencies have adopted implementing regulations in many of the
areas impacted, including ones relating to risk-based FDIC
insurance assessments, brokered deposits, interbank liabilities,
operational and managerial standards, and auditing requirements.
FDICIA also requires those agencies to take "prompt corrective
action" with respect to depository institutions that do not meet
minimum regulatory capital requirements. The Bank presently
exceeds all such requirements. FDICIA establishes five capital
levels and imposes increasingly stringent limitations on banks
that fall below the highest level. The federal bank regulatory
agencies have issued various implementing regulations, certain of
which are described below, and have others in the proposal stage,
including one that would add an interest-rate-risk component to
risk-based capital requirements. It is anticipated that FDICIA
<PAGE> 17
and the regulations issued thereunder will result in increased
costs for the banking industry, including the Bank, due to higher
FDIC insurance assessments and additional operating and reporting
requirements. FDICIA and those regulations are not expected to
have a material adverse effect on the Bank's present operations.
The Bank's deposits are insured by the FDIC. Pursuant to FDICIA,
the FDIC has adopted an interim risk-based system for the payment
of insurance premiums beginning in 1993 at rates ranging from
$0.23 to $0.31 per $100 of deposits. A final risk-based system
must be implemented under FDICIA by mid-1994.
Subject to regulation by the FRB, banks and their Edge Act
corporation subsidiaries which engage in international banking
and finance may establish foreign branches. With FRB approval,
Edge Act corporations may also establish United States branches
and invest in the shares of financial companies whose
transactions in the United States are solely and directly related
to international business. Moreover, with FRB consent, bank
holding companies and their nonbank subsidiaries may own or
control the voting shares of any company in which an Edge Act
corporation may invest and of certain other companies whose
business is closely related to banking.
On February 8, 1994, the FRB terminated the agreement, dated as
of July 26, 1984, between the FRB and Continental, under which
Continental, in order to ease any liquidity pressures, was
required to establish from time to time interim target levels of
consolidated assets that could be funded on a sustainable basis.
Federal law also places restrictions on extensions of credit by
banks to their parent bank holding companies and, with some
exceptions, other affiliates, on investments in stock or
securities thereof, and on the taking of such stock or securities
as collateral for loans.
Banks and their affiliates are also subject to certain
restrictions on the issuance, underwriting, public sale, and
distribution of securities. Operations in countries other than
the United States are subject to various restrictions and to the
supervision of various regulatory authorities, under federal law
and the laws of those countries.
On December 23, 1993, Continental filed with the Illinois
Commissioner an Application For Approval to Convert From a
National Bank to a State Bank. In connection therewith,
Continental has pending applications with the FRB for approval of
membership therein as an Illinois bank and with the Illinois
Commissioner for authorization as a state bank to exercise trust
powers.
Note 10--Regulatory Matters--of Notes to Consolidated Financial
Statements on pages 76 and 77 provides information on dividend
restrictions on Continental and the Bank, and limitations on
loans from Continental's bank subsidiaries to Continental and its
affiliates.
<PAGE> 18
PART III
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
DIRECTORS
Continental's Board of Directors has fixed the number of
directors at 13. Directors serve until the next annual meeting
of stockholders and until their successors are duly elected and
qualified. All directors of Continental also serve as directors
of the Bank. The name, age, principal occupation for the last
five years, and the date first elected to the Board of Directors
for each of the directors is as follows:
Bert A. Getz
56, chairman of the board, president and director of Globe
Corporation, a diversified investment company. Joined that
company in 1959, became its president in 1974 and its chairman in
1992. Other directorships include CalMat Co. and Dean Foods
Company. Director since 1992. (2)
Thomas A. Gildehaus
53, president, chief executive officer and director since July
1992 of UNR Industries, Inc., a holding company with businesses
engaged principally in metal fabrication. Previously employed by
Deere & Company, a manufacturer of agricultural and industrial
equipment, from 1980 to June 1992, becoming executive vice
president in 1982. Director since 1993. (2)
Robert B. Goergen
55, chairman of the board, chief executive officer and director
since 1976 of Blyth Industries, Inc., a manufacturer of candles
and various home accessories. Chairman of the board since April
1990 of XTRA Corporation, a trailer leasing firm. Director of
Wellstead Industries, Inc. Director since 1991. (3)(4)
William M. Goodyear
45, vice chairman of Continental and the Bank since February
1993. Joined the Bank in 1972, elected senior vice president of
the Bank in 1984 and executive vice president of Continental and
the Bank in 1985. Director since 1993.
Richard L. Huber
57, vice chairman of Continental and the Bank since 1990.
Previously employed as executive vice president for two years by
Chase Manhattan Corporation. Prior thereto, was a group
executive of Citicorp and Citibank, N.A. Joined Citibank, N.A.
in 1973. Director of Capital Re Corporation and Specialty
Equipment Companies, Inc. Director since 1991.
<PAGE> 19
Miles L. Marsh
46, chairman, chief executive officer and director since April
1991 of Pet Incorporated, a food products company. From 1989
through March 1991, was president and chief operating officer of
Whitman Corporation, an international consumer goods and services
company. Previously employed by units of Philip Morris Companies
Inc., a holding company with subsidiaries engaged primarily in
the manufacture and sale of various consumer products, from 1981
to 1989, becoming president of General Foods U.S.A. in February
1989, having served as president, Kraft Operations and Technology
Group, from 1988. Other directorships include Hartmarx
Corporation and Whirlpool Corporation. Director since 1993. (4)
Roger H. Morley
62, business consultant and private investor since 1981.
Previously employed by American Express Company for seven years,
becoming vice chairman in 1975 and president in 1977. Served as
a director of that company between 1975 and 1980. Also served as
a director of American Express Bank from 1975 through 1979. Vice
president of Schiller International University, Germany.
Director of Biogen, Inc., and Artal S.A. (Luxembourg). Director
since 1992. (2)
Michael J. Murray
49, vice chairman of Continental and the Bank since February
1993. Joined the Bank in 1969, elected senior vice president of
the Bank in 1984 and executive vice president of Continental and
the Bank in 1985. Director of Technology Solutions Company.
Director since 1993.
Linda Johnson Rice
36, president and chief operating officer of Johnson Publishing
Company, Inc., the publisher of Ebony and other magazines.
Joined that company in 1980, became vice president in 1985 and
president and chief operating officer in 1987. Director of
Bausch & Lomb Incorporated and The Dial Corp. Director since
1989. (3)(4)
John M. Richman
66, of counsel to the law firm of Wachtell, Lipton, Rosen & Katz
since January 1990. Retired in 1989 from the management of
Philip Morris Companies Inc., a holding company with subsidiaries
engaged primarily in the manufacture and sale of various consumer
products, and Kraft General Foods, Inc., a subsidiary of Philip
Morris Companies Inc. Joined Kraft in 1954, becoming chairman
and chief executive officer in 1979 and vice chairman of Philip
Morris Companies Inc. in 1988. Directorships include Philip
Morris Companies Inc., R.R. Donnelley & Sons Company and USX
Corporation. Director since 1980. (1)(3)(4)
<PAGE> 20
Gordon I. Segal
55, president, chief executive officer and director of Crate &
Barrel, a housewares retail company. Founded that company in
1962. Director since 1991. (2)
Thomas C. Theobald
56, chairman and chief executive officer of Continental and the
Bank since 1987. Previously vice chairman of Citicorp and
Citibank, N.A. for five years, having joined Citibank, N.A. in
1960. Director of Xerox Corporation. Trustee of The Mutual Life
Insurance Company of New York. Director since 1987. (1)
James L. Vincent
54, chairman of the board of directors, chief executive officer
and director since 1985 of Biogen, Inc., a biotechnology and
pharmaceutical firm. Director of Millipore Corporation.
Director since 1991. (4)
(1) Member of Executive Committee
(2) Member of Audit Committee
(3) Member of Committee on Directors
(4) Member of Human Resources Committee
OFFICERS
The information on executive officers of Continental is set forth
following Item 4, under the caption "Executive Officers of the
Corporation," and is incorporated herein by reference.
REPORTS OF BENEFICIAL OWNERSHIP
Following his retirement, Hollis W. Rademacher, former chief
financial officer of Continental, was inadvertently late in
filing a required report with the Securities Exchange Commission
covering four transactions in Continental common stock in
November 1993.
ITEM 11. EXECUTIVE COMPENSATION
DIRECTOR COMPENSATION
Directors other than salaried officers of Continental or its
subsidiaries receive an annual retainer fee of $30,000 (of which
$13,000 is ordinarily payable in Continental common stock as
described below), a fee of $1,000 for each board and committee
meeting attended and an annual fee for service on committees as
described below. The Chairman and other members of the Audit
Committee receive annual fees of $15,000 and $10,000,
respectively. The Chairman and other members of the Human
Resources Committee receive annual fees of $10,000 and $7,500,
respectively. Members of the Committee on Directors receive
annual fees of $3,000. Directors may elect to defer payment of
any of their director fees, which then accrue earnings at a money
<PAGE> 21
market rate. Deferred fees are paid in a lump sum or in
installments, generally commencing after a director ceases to be
a director of Continental and the Bank.
Continental's Stock Plan for Directors (Directors Stock Plan)
provides that, except as noted below, $13,000 of each director's
retainer fee will be paid in Continental common stock at the fair
market value of the Continental common stock on the date of
payment. Dividends are paid on the Continental common stock
issued pursuant to the Directors Stock Plan. At each director's
election, the director may receive restricted Continental common
stock which may not be sold, hypothecated, or transferred and may
be subject to forfeiture unless the director remains on the
Continental Board of Directors until death, disability,
retirement, termination of service approved by the Continental
Board of Directors, or a change in control of Continental (as
defined in the Directors Stock Plan). Directors who own 2,500
shares or more of Continental's common stock (other than
Continental common stock acquired under the Directors Stock Plan)
instead will receive cash (unless the director elects to receive
Continental common stock), and the cash (or Continental common
stock), at each director's election, may be subject to the same
forfeiture provisions as described above. Directors may also
elect to receive up to the entire amount of their retainer and
meeting attendance fees in Continental common stock (on the same
terms as the Continental common stock otherwise provided for in
the Directors Stock Plan).
The Directors Stock Plan has been suspended during the pendency
of the proposed merger of Continental into BankAmerica
Corporation, described in Note 1--Proposed Merger with
BankAmerica--of Notes to Consolidated Financial Statements
provided in Item 8. In the interim, all payments of accrued
retainers or meeting attendance fees are being made solely in
cash.
EXECUTIVE OFFICER COMPENSATION
Summary Compensation Table
The following table summarizes for the years indicated the
compensation of Continental's Chairman of the Board of Directors,
who is the chief executive officer, the four other most highly
compensated executive officers of Continental, and one additional
executive officer who retired during the year.
<PAGE> 22
<TABLE>
<CAPTION>
Long-Term
Compensation
Annual Compensation Awards
Securities
Underlying All Other
Name and Principal Position Year Salary Bonus(b) Options/SARs(c) Compensation(d)
<S> <C> <C> <C> <C> <C>
Thomas C. Theobald....... 1993 $660,000 $1,025,000 100,000 $ 4,497
Chairman 1992 620,000 922,500 196,000 4,364
1991 583,333 -- 146,000
Richard L. Huber.......... 1993 400,000 768,750 60,000 4,497
Vice Chairman 1992 395,833 563,750 118,000 4,364
1991 350,000 -- 88,000
Michael J. Murray......... 1993 391,667 589,375 60,000 9,085
Vice Chairman 1992 333,333 666,250 115,000 6,342
1991 283,333 -- 70,000
William M. Goodyear....... 1993 391,667 615,000 60,000 4,497
Vice Chairman 1992 333,333 563,750 115,000 4,364
1991 283,333 -- 70,000
Michael E. O'Neill(a)..... 1993 240,000 512,500 75,000 113,060
Chief Financial Officer
Hollis W. Rademacher(a)... 1993 273,958 250,000 40,000 694,332
Chief Financial Officer 1992 322,917 384,375 101,000 45,662
1991 300,000 -- 76,000
<FN>
(a) Mr. Rademacher retired during 1993, and his position was assumed by Mr. O'Neill.
(b) To further promote stock ownership, 25% of base annual incentives for 1992 and 1993 were
paid in Continental common stock, subject to forfeiture upon voluntary separation (other
than retirement) until January 31, 1994, and January 10, 1995, respectively. Because of
these restrictions, each such stock award was increased by 10%, and this increase is
included in the figures shown above. Holders of such stock awards are entitled to
quarterly dividends. Mr. Rademacher's 1993 award of $250,000 was paid entirely in cash.
As of December 31, 1993, the named executive officers held the following number of shares
of stock subject to restriction until January 31, 1994: Mr. Theobald, 10,674; Mr. Huber,
6,523; Mr. Murray, 7,709; Mr. Goodyear, 6,523; and Mr. O'Neill, 3,262. Based upon the
$26.375 closing price of Continental common stock as reported for December 31, 1993, on
the NYSE composite transactions tape, the value of these shares was $281,527, $172,044,
$203,325, $172,044, and $86,035, respectively. As of December 31, 1993, Mr. Rademacher no
longer held any restricted shares.
(c) The 1991 option grants include tandem stock appreciation rights (SARs).
(d) Reflects Continental's 1993 contributions of $4,497 under the Employee Savings Incentive
Plan and Trust for each executive officer named in the table and earnings credited,
excluding dividend equivalents, to the accounts of Messrs. Murray, Rademacher and O'Neill
under Continental's Deferred Incentive Plan, as follows: Earnings credited to stock unit
account: Murray, $4,588; Rademacher, $81,868; O'Neill, $108,563. Earnings credited to
interest account: Rademacher, $20,467. In addition, Mr. Rademacher received a lump sum
payment in the amount of $587,500, consisting of $487,500 which was the full value of
salary continuation through April 30, 1995 and a special payment of $100,000 in
recognition of his long and distinguished service to Continental.
</TABLE>
<PAGE> 23
Option Grants in 1993
The following table shows grants made during 1993 to the six
executive officers named in the Summary Compensation Table to
purchase shares of Continental common stock and the potential
realizable value of these options assuming a 5 percent and
10 percent compounded appreciation in the market value of the
stock over the term of the option grants. The table also relates
those values to the gains that would be realized by the holders
of Continental common stock as a whole if those rates of
appreciation were achieved.
<TABLE>
<CAPTION>
Individual Grants
Percent
of Potential
Total Realizable Value at
Options Assumed Annual
Number of Granted Rates of Stock
Securities to Em- Exercise Price Appreciation
Underlying ployees or Expira- for Option Term
Options in Base Price tion
Name Granted 1993 Per Share Date 5% 10%
<S> <C> <C> <C> <C> <C> <C>
Thomas C. Theobald 100,000 7.74% $23.1875 2/22/03 $ 1,460,812 $ 3,686,813
Richard L. Huber 60,000 4.65 23.1875 2/22/03 876,487 2,212,088
Michael J. Murray 60,000 4.65 23.1875 2/22/03 876,487 2,212,088
William M. Goodyear 60,000 4.65 23.1875 2/22/03 876,487 2,212,088
Michael E. O'Neill 25,000 1.94 23.1875 2/22/03 365,203 921,703
50,000 3.87 26.3750 10/25/03 830,812 2,096,813
Hollis W. Rademacher 40,000 3.10 23.1875 2/22/03(a) 584,325 1,474,725
All Common
Stockholders Gain N/A N/A 23.1875 N/A 742,303,092 1,873,431,614
Mr. Theobald's gain
on his options as
percent of All Common
Stockholders Gain N/A N/A N/A N/A 0.197% 0.197%
<FN>
(a) In light of Mr. Rademacher's retirement, the vesting of the non-vested shares of this
option grant were accelerated to his retirement date, and the options will expire no
later than October 31, 1996, in accordance with the terms of the 1991 Equity Performance
Incentive Plan. As a result of the revised option term, the potential realizable values
at assumed appreciation rates of 5% and 10% would be $146,174 and $307,003, respectively.
</TABLE>
The stock options shown above were granted at the fair market
value of Continental common stock on the date of grant and vest
ratably on an annual basis over a three-year period following the
date of grant. Mr. O'Neill's $26.375 option was granted in
recognition of his assuming the position of Chief Financial
Officer. Continental has shown the potential realizable value
based upon an assumed 5 percent and 10 percent compounded
appreciation of the stock's value over the term of the option
<PAGE> 24
because of this method's ease of understanding and because there
is not, at this time, a commonly accepted methodology for valuing
stock options. Continental has also chosen to show the
corresponding increase in All Common Stockholders value at those
appreciation levels and the Chairman's potential gain on his
options as a percentage of All Common Stockholders Gain. The
figures shown for All Common Stockholders Gain reflect the gain
in total market value which would result from the assumed annual
rates of appreciation for 50,814,399 shares of Continental common
stock outstanding as of December 31, 1993.
Aggregated Option/SAR Exercises in 1993 and Option/SAR Values at
Year-end 1993
The following table summarizes option and SAR exercises during
1993 by the six executive officers named in the Summary
Compensation Table and unexercised options held by these
individuals at year-end 1993. None of the shares acquired by
these individuals upon exercise of these options has been sold.
<TABLE>
<CAPTION>
Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options/SARs Options/SARs
Shares at Fiscal at Fiscal
Acquired Year-End Year-End
on Value Exercisable/ Exercisable/
Name Exercise Realized Unexercisable Unexercisable(a)
<S> <C> <C> <C> <C>
Thomas C. Theobald.... -- N/A 895,166/206,334 $6,260,170/$1,864,337
Richard L. Huber...... 44,000 $547,140 174,000/124,000 1,689,110/1,121,610
Michael J. Murray..... -- N/A 248,500/122,500 2,705,238/1,099,013
William M. Goodyear... -- N/A 248,500/122,500 2,705,238/1,099,013
Michael E. O'Neill.... -- N/A 40,413/89,167 427,198/239,692
Hollis W. Rademacher.. -- N/A 362,250/-- 3,693,676/--
<FN>
(a) The closing price of Continental common stock as reported for December 31, 1993, on the
NYSE composite transactions tape was $26.375.
</TABLE>
Pension Plan
Continental's Pension Plan is a noncontributory defined benefit
plan that provides for fixed benefits to employees and their
survivors in the event of retirement after certain age and
service requirements have been met. Normal retirement age under
the Pension Plan is 65, and the maximum number of years of
service considered under the Pension Plan formula is 35 years.
The following table illustrates the estimated annual benefits
payable upon retirement pursuant to the Pension Plan for
specified remuneration and years of participating service and
assuming retirement at normal retirement age. The table includes
any payments due under a supplemental pension program which
provides that if the benefit under the Pension Plan is limited by
<PAGE> 25
ERISA or the Internal Revenue Code of 1986, as amended (the
Code), a supplemental non-qualified benefit equal to the
difference between the benefit actually received under the
Pension Plan and the benefit that would have otherwise been
received absent those limitations is paid to the participant.
<TABLE>
<CAPTION>
Years of Service
Remunera-
tion 5 10 15 20 25 30 35
<S> <C> <C> <C> <C> <C> <C> <C>
$250,000 $18,750 $ 37,500 $ 56,250 $ 75,000 $ 93,750 $112,500 $131,250
350,000 26,250 52,500 78,750 105,000 131,250 157,500 183,750
450,000 38,750 67,500 101,250 135,000 168,750 202,500 236,250
550,000 41,250 82,500 123,750 165,000 206,250 247,500 288,750
650,000 48,750 97,500 146,250 195,000 243,750 292,500 341,250
750,000 56,250 112,500 168,750 225,000 281,250 337,500 393,750
850,000 63,750 127,500 191,250 255,000 318,750 382,500 446,250
950,000 71,250 142,500 213,750 285,000 356,250 427,500 498,750
</TABLE>
Messrs. Theobald, Huber, Murray, Goodyear and O'Neill,
respectively, had 6, 4, 24, 21, and 15 years of credited service
under the Pension Plan as of December 31, 1993, and Mr.
Rademacher retired during 1993 with 35 years of credited service
(capped at 35 years under the terms of the Pension Plan).
"Remuneration" means average base salary earnings, plus incentive
compensation (Bonus as displayed in the Summary Compensation
Table) up to 25% of base salary earnings, for the 60 consecutive
month period in the ten-year period immediately preceding
retirement which will result in the highest such average. The
figures above represent straight life annuities.
Executive Termination Agreements
Continental has entered into senior executive termination
agreements (Termination Agreements) with certain of its executive
officers: Messrs. Goodyear, Higgins, Huber, Murray, O'Neill,
Sherman, Stocker, Theobald, and Thompson. The Termination
Agreements generally provide that if, within two years subsequent
to a "change of control" of Continental, the officer's employment
is terminated by Continental or the Bank, or the officer
terminates his employment as the result of certain specified
actions taken by Continental or its subsidiaries, the officer
shall be entitled to receive: (i) two times the officer's annual
base salary, payable over a two-year period; (ii) a lump sum
payment equal to two times the amount determined by multiplying
the officer's base salary by the average percentage of bonus to
base salary paid to the officer during the previous two years;
(iii) the extension of life insurance and medical, health, and
disability plan coverage (or receipt of equivalent coverage) for
two years to the extent such plans are offered by Continental
during such two-year period and to the extent not received in
connection with other employment; (iv) a retirement benefit
equivalent to vested retirement benefits and two years additional
credited service under Continental's ordinary retirement plans;
<PAGE> 26
(v) an amount equal to two years of basic matching employer
contributions under Continental's Employees Savings Incentive
Plan and Trust; (vi) a payment equal to the tax, if any, payable
by the officer as a result of provisions of Section 280G of the
Code or any other similar law applicable to "change of control"
arrangements; and (vii) outplacement counseling services within
two years from the date of termination. A "change in control"
shall be deemed to have occurred if (A) any person or group
becomes the beneficial owner of securities representing
20 percent or more of the combined voting power of Continental's
then outstanding securities; (B) at any time less than a majority
of the members of the Continental Board of Directors shall be
persons who were either nominated for election by the Continental
Board of Directors or were elected by the Continental Board of
Directors; (C) the stockholders of Continental approve a merger
or consolidation of Continental with any other corporation which
would not result in the voting securities of Continental
outstanding immediately prior thereto (or securities into which
they are converted) continuing to represent at least 75 percent
of the combined voting power of the voting securities of
Continental or such surviving entity outstanding immediately
thereafter; or (D) the stockholders of Continental approve a plan
of complete liquidation of Continental or an agreement for the
sale or disposition by Continental of all or substantially all of
Continental's assets. In addition, the options held by these
executives contain provisions accelerating the vesting of all
unvested options in the event of a change of control (as defined
in the stock option agreements evidencing such options). The
proposed merger (the Merger) of Continental into BankAmerica
Corporation (BankAmerica), described in Note 1--Proposed Merger
with BankAmerica--of Notes to Consolidated Financial Statements
provided in Item 8, constitutes a "change of control" for both of
these purposes. If within two years after termination the
officer becomes employed by an employer that is in direct
competition with Continental and its subsidiaries, then the
amount of salary and bonus payments under the Termination
Agreement are offset by any salary and bonus received in
connection with such other employment. The officer is not
required to seek other employment or otherwise mitigate the
amount of any payments. The Termination Agreements contain an
initial termination date of December 31, 1994 (December 31, 1995,
for Mr. O'Neill's Termination Agreement), but, beginning
December 31, 1992 (December 31, 1993, for Mr. O'Neill's
Termination Agreement), and each December 31 thereafter,
automatically extend for one additional year unless either party
gives notice of cancellation 90 days prior to such December 31.
The expiration of such Termination Agreements would not, however,
affect the rights or obligations of Continental or the officer
arising from a "change of control" occurring prior to such
expiration.
Upon consummation of the Merger, Messrs. Goodyear and Murray will
assume positions with BankAmerica or its subsidiaries.
BankAmerica and Continental have entered into agreements with Mr.
Goodyear and Mr. Murray pursuant to which such officers will
waive all rights under their previously executed Termination
<PAGE> 27
Agreements with Continental in exchange for the lump sum payment
by Continental to each such officer of $1,000,000 (less deduction
for taxes and other withholdings) immediately prior to the
effectiveness of the Merger. Messrs. Goodyear and Murray will
also be eligible to participate in the BankAmerica severance
program, and will receive certain other benefits, to be provided
by BankAmerica pursuant to the Merger. See Item 13 -- "Certain
Relationships and Related Transactions -- Interests of Certain
Persons in the Merger."
In connection with the retirement of Hollis W. Rademacher as
chief financial officer on October 31, 1993, Continental entered
into an agreement with him that provides for a lump sum payment
of $587,500, less required withholding taxes, on
November 1, 1993. This payment reflects the full value of salary
continuation through April 30, 1995, and a special payment of
$100,000 in recognition of his long and distinguished service to
Continental under the Management Incentive Plan. Mr. Rademacher
also received an incentive payment of $250,000 in recognition of
his overall performance and contribution during 1993. Pursuant
to a resolution of the Human Resources Committee,
Mr. Rademacher's outstanding non-vested stock options were
accelerated to vest on October 31, 1993. As a retiree,
Mr. Rademacher is entitled to continued coverage under the
Continental Medical Plan with Continental contributing
74 percent of the cost of coverage. Under the Professional
Services Program (which provides reimbursement for such services
as tax return preparation and financial and estate planning),
Continental will reimburse Mr. Rademacher for certain
professional services through calendar year 1995 (up to an annual
maximum of $10,000). Mr. Rademacher retains use of a company car
and parking privileges until December 31, 1994, the expiration
date of the current lease on the car.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT
The following table sets forth the beneficial ownership of
outstanding Continental common stock by Continental common
stockholders known by Continental to own five percent or more of
Continental's outstanding common stock.
<PAGE> 28
<TABLE>
<CAPTION>
Title of Name and Address Amount and Nature Percent of
Class of Beneficial Owner of Beneficial Ownership Class
<S> <C> <C> <C>
Common Merrill Lynch & Co., Inc. 4,623,775(a) 8.7%
World Financial Center
North Tower
250 Vesey Street
New York, New York 10281
Common Mellon Bank Corporation 6,452,000(b) 12.56%
One Mellon Bank Center
Pittsburgh, Pennsylvania 15258
<FN>
(a) These shares are reported as beneficially owned as of December 31, 1993, with shared
voting and investment power, and include 4,618,000 shares beneficially owned by
Merrill Lynch Assets Management, L.P., a registered investment advisor, for Merrill
Lynch Capital Fund, Inc., a registered investment company.
(b) Mellon Bank Corporation has reported beneficial ownership of these shares in various
fiduciary capacities as of December 31, 1993, with sole voting power as to 3,226,000
shares, shared voting power as to 107,000 shares, sole dispositive power as to
3,329,000 shares and shared dispositive power as to 3,123,000 shares.
</TABLE>
The following table sets forth the beneficial ownership of
outstanding Continental common stock as of April 22, 1994, (i) by
each director and nominee and the six executive officers of
Continental named in the Summary Compensation Table under
"EXECUTIVE OFFICER COMPENSATION" (less than 1 percent in each
case except for Mr. Theobald, who owned 2.3 percent), and (ii) by
all directors and executive officers of Continental as a group
(6.7 percent).
<PAGE> 29
<TABLE>
<CAPTION>
<S> <C>
Bert A. Getz........................................... 18,762
Thomas A. Gildehaus.................................... 2,215
Robert B. Goergen...................................... 15,009(a)
William M. Goodyear.................................... 343,304(b)
Richard L. Huber....................................... 391,237(b)
Miles L. Marsh......................................... 2,739
Roger H. Morley........................................ 1,646
Michael J. Murray...................................... 346,395(b)
Michael E. O'Neill..................................... 80,277(b)(c)
Hollis W. Rademacher................................... 360,712(b)
Linda Johnson Rice..................................... 5,031
John M. Richman........................................ 9,795
Gordon I. Segal........................................ 5,256
Thomas C. Theobald..................................... 1,198,451(a)(b)
James L. Vincent....................................... 3,255
All directors and executive officers
as a group (20 in number)............................ 3,470,191(a)(b)(c)
<FN>
(a) Does not include shares as to which beneficial ownership is disclaimed,
as follows: Mr. Goergen, 1,500 shares; Mr. Theobald, 14,000 shares; all
directors and executive officers as a group, 15,500 shares.
(b) Includes the right to acquire shares under stock options or stock
appreciation rights as follows: Mr. Goodyear, 310,000 shares; Mr. Huber,
248,000 shares; Mr. Murray, 310,000 shares; Mr. O'Neill, 62,914 shares;
Mr. Rademacher, 347,750 shares; Mr. Theobald, 872,167 shares; all
directors and executive officers as a group, 2,914,496 shares. Also
includes shares with sole voting but no present investment power awarded
as a portion of base annual incentives under Continental's Management
Incentive Plan as follows: Mr. Goodyear, 6,140 shares; Mr. Huber, 7,675
shares; Mr. Murray, 5,884 shares; Mr. O'Neill, 5,117 shares; Mr.
Theobald, 10,233 shares; all directors and executive officers as a group,
47,075 shares.
(c) Includes as of December 31, 1993, 1,739 shares credited to the accounts
of two executive officers under Continental's Employees Stock Ownership
Plan as to which such officers have sole voting but no present investment
power. Persons who become executive officers are no longer eligible to
receive annual allocations of shares under the Plan.
</TABLE>
A trust of which Mr. Goergen is the trustee holds 400 shares
(less than 0.1 percent) of the outstanding Continental Adjustable
Rate Cumulative Preferred Stock, Series 2 for the benefit of a
family member. Mr. Goergen disclaims beneficial ownership in
those shares. No other director or executive officer
beneficially owns any depositary shares representing interests in
shares of Continental Adjustable Rate Cumulative Preferred Stock,
Series 2.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
Richard S. Brennan, General Counsel and Secretary of Continental
and the Bank, is also a partner in the law firm of Mayer, Brown &
Platt, which has represented Continental, the Bank, and their
predecessors for many years, and is compensated solely by that
firm. Payments to Mayer, Brown & Platt for 1993 legal services
and expenses aggregated approximately $13 million.
<PAGE> 30
Directors and officers of Continental and their associates were
customers of, and had other transactions with, the Bank in the
ordinary course of business during 1993. All loans and
commitments included in such other transactions were made on
substantially the same terms, including interest rates and
collateral, as those prevailing at the time for comparable
transactions with other persons and did not involve more than the
normal risk of collectability or present other unfavorable
features.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
The agreement pursuant to which the Merger will occur (the Merger
Agreement) provides that, for six years after the effectiveness
of the Merger (the Effective Time), BankAmerica will indemnify,
defend, and hold harmless the present and former officers,
directors, employees, and agents of Continental and its
subsidiaries against all losses, expenses, claims, damages, or
liabilities arising out of actions or omissions occurring at or
prior to the Effective Time to the full extent permitted under
Delaware law and by the charter and by-laws of Continental as in
effect on the date of the Merger Agreement. The Merger Agreement
also provides that BankAmerica, for a period of six years after
the Effective Time, will maintain in effect the policies of
directors' and officers' liability insurance maintained by
Continental (provided that BankAmerica may substitute therefor
policies of at least the same coverage and amounts containing
terms and conditions no less favorable to the beneficiaries
thereof) with respect to claims arising from facts or events
which occurred before the Effective Time, provided that
BankAmerica will not be obligated to make annual premium payments
for such insurance to the extent such premiums would exceed 200
percent of the premiums paid by Continental for such insurance as
of the date of the Merger Agreement.
At the Effective Time, William M. Goodyear, Vice Chairman of
Continental, will assume the position of Chairman and Chief
Executive Officer of Continental Bank, to be renamed Bank of
America Illinois pursuant to the Merger, and will continue to be
responsible for middle-market and private banking business, and
Michael J. Murray, Vice Chairman of Continental, will become a
Group Executive Vice President of Bank of America responsible for
leading the combined corporate banking businesses of Bank of
America's U.S. Corporate Banking Group and Continental's
corporate banking group.
BankAmerica and Continental have entered into agreements with Mr.
Goodyear and Mr. Murray pursuant to which such officers will
waive all rights under their previously executed termination
agreements with Continental in exchange for the lump sum payment
by Continental to each such officer of $1,000,000 (less
deductions for taxes and other withholdings) immediately prior to
the Effective Time of the Merger. Messrs. Goodyear and Murray
will also be eligible to participate in the severance program
described below to be adopted by BankAmerica pursuant to the
terms of the Merger Agreement. Messrs. Goodyear and Murray will
<PAGE> 31
each be treated as a Vice Chairman for purposes of calculating
the severance pay which such officers may be eligible to receive
under such severance program to be adopted by BankAmerica
pursuant to the terms of the Merger Agreement, as well as for
purposes of treatment of stock options, and each will be eligible
to receive the maximum payment available to a Vice Chairman. In
addition, the full amount of applicable bonuses Messrs. Goodyear
and Murray actually received (other than the $1,000,000 bonuses
referred to immediately above) will be used in calculating
severance pay, no cap on severance pay will be imposed pursuant
to Section 280G of the Code and BankAmerica will pay any excise
taxes caused by the payment of such severance pay.
The Merger will constitute a "change of control" under the
termination agreements with Messrs. Goodyear and Murray as well
as under termination agreements with other executive officers.
See Item 11 -- "Executive Compensation -- Executive Officer
Compensation -- Executive Termination Agreements," for the effect
of such a "change in control" on such termination agreements.
The Merger will also constitute a "change of control"
accelerating the vesting of all unvested Continental employee
stock options held by such executives and by Messrs. Goodyear and
Murray as of the Effective Time, under the terms of the stock
option agreements evidencing such options. Currently, such
executives have been granted options, which will not have vested
by August 1, 1994, to purchase 376,667 shares of Continental
common stock.
The Merger Agreement provides for (i) the conversion of
Continental employee stock options and stock appreciation rights
other than stock appreciation rights under Continental's 1991
performance unit plan (Continental Options) held by seven
Continental executives who are parties to existing Termination
Agreements with Continental (Messrs. Higgins, Huber, O'Neill,
Sherman, Stocker, Theobald, and Thompson), into such rights with
respect to BankAmerica common stock, and the assumption by
BankAmerica of such Continental Options, with adjustments to the
number of shares and price per share to reflect the number of
shares of Continental common stock that such executive elects to
convert into BankAmerica common stock (Stock Consideration)
pursuant to the terms of the Merger Agreement, which option may
be exercised during the time provided in accordance with the
stock option agreement by which it is evidenced and, if longer,
within a one-year period following a termination of employment
entitling such employees to termination benefits under such
termination agreements so long as the exercise period does not
extend past the stated expiration date of the stock options and
(ii) the conversion of Continental Options held by other
Continental employees into such rights with respect to
BankAmerica common stock, and the assumption by BankAmerica of
such Continental Options, with adjustments to the number of
shares and price per share to reflect the Stock Consideration and
with an extended exercise period for certain employees who
receive severance pay under BankAmerica's severance program to be
<PAGE> 32
adopted as of the Effective Time, to the extent such stock
options are vested as of the employee's separation date or would
have vested had the employee remained employed during the
particular employee's severance pay period (except for options
issued within six months of the separation date) in accord with
and subject to the severance program, equal to the time provided
in accordance with the stock option agreement by which it is
evidenced and, if longer, within a one-year period from the
employee's separation date under the severance program but not
past the stated expiration date of the stock options. At the
Effective Time, all rights with respect to Continental common
stock pursuant to stock appreciation rights granted under
Continental's 1991 performance unit plan (the Continental 1991
Plan), which are outstanding at the Effective Time, whether or
not then exercisable, will be settled for cash provided that the
amount payable for each stock appreciation right granted by
Continental in March 1991 will not exceed $2.62, and the amount
payable for each stock appreciation right granted by Continental
in May 1991 will not exceed $0.435. The stock appreciation
rights described in the preceding sentence are held by
approximately 112 present and former employees of Continental and
its subsidiaries, and the aggregate amount payable upon
settlement for cash of all such rights is expected to be
$1,672,164.
In connection with the Merger, BankAmerica has agreed to adopt a
severance program which will be similar in all material respects
to BankAmerica's Merger Transition Program and U.S. Senior
Management Transition Program (which were certain programs
adopted in connection with Security Pacific Corporation's merger
into BankAmerica in 1992) with respect to severance pay and stock
treatment and similar in all material respects to BankAmerica's
Employee Transition Program with respect to all other benefits.
According to the terms of these programs, which are subject to
certain conditions, limitations and exceptions, eligible
Continental employees may receive payments, in the event they are
terminated as a result of the Merger, equal to three weeks' base
pay for each full year of credited service, subject to a minimum
of three months' base pay and a maximum of 18 months' base pay.
Under these same programs, eligible members of senior management
of Continental, in the event such employees are terminated as a
result of the Merger, may receive payments which range in amount
(according to such employee's title or level) from 1.5 to 2.5
times the employee's "monthly pay" (as such term is defined in
the severance program) times the number of full years of credited
service, subject to a minimum ranging from 12 to 24 times monthly
pay and a maximum ranging from 18 to 30 times monthly pay. For
example, employees with the title "Vice Chairman" will receive an
amount equal to 2.5 times their monthly pay times the number of
such employee's full years of credited service, but not less than
24 times monthly pay and not more than 30 times monthly pay.
These severance programs will not apply to Continental employees
who are party to termination agreements with Continental other
than Messrs. Goodyear and Murray as described above.
<PAGE> 33
BankAmerica has agreed to maintain such severance program in
effect for not less than twelve months following the Effective
Time, provided that benefits under such program may be modified
or eliminated earlier if they are of little financial consequence
to recipients.
Continental executive officers and directors who own Continental
common stock or who hold options to purchase Continental common
stock will have such holdings converted into the Stock
Consideration and/or the amount of cash that such officers and
directors elect to receive in cash pursuant to the terms of the
Merger Agreement (Cash Consideration) or into rights with respect
to BankAmerica common stock, respectively, as a result of the
Merger.<PAGE>
<PAGE> 34
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this amendment to this
report to be signed on its behalf by the undersigned thereunto
duly authorized.
CONTINENTAL BANK CORPORATION
Registrant
/s/ John J. Higgins
John J. Higgins
Controller and Principal
Accounting Officer
April 29, 1994
