Filed with the Securities and Exchange Commission on April 21, 1994
Registration No 33-51219
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Post-effective Amendment No. 1
Form S-4
REGISTRATION STATEMENT
Under
The Securities Act of 1933
BANC ONE CORPORATION
(Exact Name of Registrant as specified in Charter)
Filed with the Securities and Exchange Commission on November 30, 1993
Registration No. 33-51219
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
F O R M S - 4
REGISTRATION STATEMENT UNDER THE
SECURITIES ACT OF 1933
BANC ONE CORPORATION
(Exact name of Registrant as specified in its charter)
Ohio
(State or other jurisdiction of incorporation or organization)
6711
(Primary Standard Industrial Classification Code Number)
31-0738296
(I.R.S. Employer Identification No.)
100 East Broad Street, Columbus, Ohio 43271, (614) 248-5944
(Address, including Zip Code, and telephone number, including area code,
of Registrant's principal executive offices)
Roman J. Gerber, Esq., BANC ONE CORPORATION
100 East Broad Street, Columbus, Ohio 43271, (614) 248-5903
(Name, address, including Zip Code, and telephone number,
including area code, of agent for service)
With Copies to:
Carter K. McDowell, Esq. Daniel O'Rourke, Esq.
BANC ONE CORPORATION Vedder, Price, Kaufman & Kammholz
100 East Broad Street 222 North LaSalle, Suite 2600
Columbus, Ohio 43271 -0152 Chicago, Illinois 60601-1003
614/248-6697 312/609-7669
Approximate date of commencement of proposed sale of the securities to the
public: As soon as practicable after the effective date of this Registration
Statement and all other conditions to the merger of Mid States Bancshares, Inc.
with and into a wholly owned subsidiary of the Registrant pursuant to the
Merger Agreement described in the enclosed Prospectus and Proxy Statement have
been satisfied or waived.
If the securities being registered on this Form are being offered in connection
with the formation of a holding company and there is compliance with General
Instruction G, check the following box.
Calculation of Registration Fee
Proposed Proposed
maximum maximum
Title of each class Amount offering aggregate Amount of
of securities to be price offering registration
to be registered registered(1) per unit(2) price(2) fee(2)
Common Stock 908,822 $22.66 $20,593,907 $7,101.40
(1) Based on an estimate of the maximum number of shares of common stock of the
Registrant to be issued in connection with the merger of Mid States
Bancshares, Inc. with and into a wholly owned subsidiary of the Registrant.
(2) Estimated solely for purpose of computing the registration fee based upon
the book value of the Common Stock, par value $5.00 per share, of Mid
States Bancshares, Inc. as of December 31, 1993 in accordance with
Rule 457(f)(2) of the General Rules and Regulations under the Securities
Act of 1933. BANC ONE CORPORATION paid $7,011.84 of the Registration
Fee with the original filing of this Registration Statement.
The Registrant hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the Registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of 1933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
MID STATES BANCSHARES, INC.
, 1994
Dear Fellow Shareholder:
You are cordially invited to attend a Special Meeting of Shareholders of Mid
States Bancshares, Inc. ("MID STATES") to be held at 501 15th Street, Moline,
Illinois on , April , 1994, at 10:00 a.m., local time.
The purpose of the meeting is to consider and vote upon approval of an
Agreement and Plan of Merger dated May 25, 1993, as amended February 22, 1994
and March 28, 1994 (the "Merger Agreement"), pursuant to which MID STATES will
merge with and into a wholly owned subsidiary of BANC ONE CORPORATION. In the
merger each outstanding share of MID STATES Common Stock will be converted into
2.917 shares of BANC ONE Common Stock, as described more fully in the
accompanying Prospectus and Proxy Statement.
Your Board of Directors believes that the terms of the Merger Agreement, as
amended, are in the best interests of MID STATES shareholders, will provide
significant value to all MID STATES shareholders, and will enable holders of
MID STATES Common Stock to participate in the expanded opportunities for growth
that the merger will make possible.
Given the lengthy delay in submitting the Merger Agreement to the shareholders,
a brief history of the proposed merger follows: BANC ONE and MID STATES
announced the Merger Agreement on May 25, 1993. BANC ONE and MID STATES
immediately began the process of obtaining necessary approvals. All regulatory
approvals required prior to the merger were obtained. A special meeting of
shareholders of MID STATES was originally scheduled for January 26, 1994 for
the purpose of MID STATES shareholders approval of the Merger Agreement. The
Board of Directors of MID STATES had unanimously recommended the merger to the
shareholders and urged them to vote in favor of the proposed merger in the
prospectus and proxy statement dated December 21, 1993 (the "December 21
Proxy") delivered to the shareholders of MID STATES in connection with that
special meeting.
However, the Merger Agreement contained a provision permitting MID STATES to
terminate the Merger Agreement if during the January 11-24, 1994 evaluation
period (during which the market price for BANC ONE's common stock was
averaged), the average price of BANC ONE Common Stock (the "Evaluation Period
Price") was below $37.82, which is a merger value equivalent of $102.96 per
share of MID STATES Common Stock. This right to terminate is the so-called
"walk-away" provision. In fact, the Evaluation Period Price was $33.43. The
Board of Directors had stated in the December 21 Proxy that it did not intend
to waive the "walk-away" provision. Also, Donaldson, Lufkin & Jenrette
Securities Corporation ("DLJ"), MID STATES' financial advisor, had, at the
Board of Directors' request, specifically excluded from their fairness opinion
dated December 21 1993 (the "December 21 opinion") the situation where the
Evaluation Period Price was below $37.82. The December 21 opinion was a major
supporting factor for the Board of Director's original recommendation in favor
of the merger.
During the period immediately prior to January 26, DLJ on behalf of MID STATES
requested that BANC ONE increase the exchange ratio so as to bring the value of
BANC ONE shares to be received in the merger in respect to each share of MID
STATES Common Stock to or above $102.96 at the closing. BANC ONE declined, but
indicated a strong desire to consummate the merger and a willingness to
negotiate terms other than the exchange ratio. On January 26, 1994, the Board
of Director's chose to cancel the scheduled special meeting without voting on
the merger so as to allow for further discussion with BANC ONE with a view to
finding a basis for completion of the transaction. This was done because the
Board of Directors was, and is, committed to the proposition that a merger with
BANC ONE is in the best interest of MID STATES, its shareholders, employees,
customers and depositors, as well as the Quad Cities community. For these
reasons and the reasons set forth below and on page of the accompanying
Prospectus and Proxy Statement under "Merger Recommendations and Reasons for
Transaction" (the "pertinent reasons") the Board of Directors chose not to
exercise the walk-away provision at such time. MID STATES shareholders were
informed of these events in a letter dated January 26, 1994.
On February 22, 1994 BANC ONE and MID STATES entered into the First Amendment
to the Merger Agreement. The First Amendment contains the following provisions:
1. MID STATES agreed that it would, conditionally, resolicit the MID STATES
shareholders to approve the merger and in doing so would inform the
shareholders that the MID STATES Board of Directors intends to proceed with
the merger even if the BANC ONE share value equivalent is less than
$102.96. The relevant conditions are: (a) that MID STATES' financial
advisors opine that the exchange ratio is fair to the MID STATES
shareholders from a financial point of view, disregarding the fact that the
BANC ONE Evaluation Period Price was below $37.82 ($102.96 per MID STATES
share of Common Stock merger value equivalent) as described above and might
be below such amount at the closing [MID STATES intended to obtain a new
fairness opinion from DLJ and to obtain a concurring "second opinion" from
The Chicago Corporation ("TCC"), an investment banking firm, as to the
fairness of the exchange ratio/merger consideration to the MID STATES
shareholders]; (b) that these fairness opinions remain in effect at the
closing of the merger transaction; and (c) that the shareholders of MID
STATES approve the Merger Agreement with the knowledge that the Board of
Directors intends to proceed with the merger on the terms and conditions
described above.
2. MID STATES and BANC ONE agreed that MID STATES' right to terminate the
Merger Agreement based upon the walk-away provision was amended so that MID
STATES could unilaterally terminate the Merger Agreement if it could not
obtain the necessary fairness opinions or any other cause made it probable
that the merger could not be consummated prior to May 1, 1994, the
"outside" date for completion of the Merger Agreement.
3. BANC ONE agreed to reimburse MID STATES for one-half of its out-of-pocket
expenses (legal, financial advisory, accounting, etc.) incurred after
January 25, 1994 in connection with the merger -- whether or not the
transaction is consummated.
During mid-February DLJ on behalf of MID STATES began discussions with BANC ONE
concerning the need for BANC ONE to increase the exchange ratio/merger
consideration so as to permit DLJ and TCC to issue their fairness opinions.
During this time, the Board of Directors determined that, based on the
pertinent reasons, if the merger with BANC ONE could not be accomplished at
this time, the best course for MID STATES currently is to remain independent.
Therefore, the MID STATES' Board instructed management and DLJ not to solicit
or respond to inquiries from other possible interested parties for MID STATES,
including the party from which MID STATES received an indication of interest
for a possible merger with MID STATES in March, 1993.
On March 11, 1994 BANC ONE offered to increase the exchange ratio from 2.7225
BANC ONE common shares (as adjusted to account for BANC ONE's 10% stock
dividend of March 4, 1994) for each share of Common Stock of MID STATES to
2.917 shares. BANC ONE and MID STATES further agreed to extend the "outside"
termination date under the Merger Agreement to July 1, 1994 so as to enable
sufficient time to resolicit the shareholders of MID STATES. At a MID STATES
Board of Director's Meeting on March 28, 1994 the Board of Directors agreed to
ratify the Second Amendment to the Merger Agreement which encompassed these two
terms and received the fairness opinions of its two financial advisors, DLJ and
TCC. Based upon these reports and the new increased exchanged ratio, the Board
of Directors once again, unanimously, recommends the merger to the shareholders
and urges shareholder approval and the adoption of the Merger Agreement, as
amended.
The Board of Directors has set April , 1994 as the date of the Special
Meeting of Shareholders at which the Merger Agreement, as amended, will be
considered and voted upon by the shareholders. Due to the lapse of time
between the originally scheduled special meeting of shareholders and this newly
scheduled Special Meeting, the Board of Directors has set a new record date
of , 1994. All shareholders of record as of the close of business
on such date shall be entitled to notice of and to vote at the Special Meeting
of Shareholders.
Additional information is contained in the accompanying Prospectus and Proxy
Statement which I urge you to read carefully.
Your Board of Directors unanimously recommends that you vote in favor of the
approval of the Merger Agreement, as amended.
Please indicate your voting instructions, sign and date the enclosed Proxy and
mail it promptly in the return envelope provided. Whether or not you plan to
attend the meeting, it is important that you return the enclosed Proxy so that
your shares of MID STATES Common Stock are voted.
Sincerely,
Thomas H. Robinson
President and
Chief Executive Officer
BANC ONE CORPORATION
Cross Reference Sheet
Caption in Prospectus
Item of Form S-4 and Proxy Statement
A. Information about the Transaction
Item 1 - Forepart of Registration
Outside Front Cover Page
Statement and Outside Front Cover
Reference Sheet
Page of Prospectus
Item 2 - Inside Front and Outside Available Information; Incorpora-
Back Cover Pages of Prospectus tion by Reference; Table of
Contents
Item 3 - Risk Factors, Ratio of Information About the Transaction
Earnings to Fixed Charges and
Other Information
Item 4 - Terms of the Transaction Merger; Comparative Rights of
Shareholders
Item 5 - Pro Forma Financial Infor- Incorporation by Reference
mation
Item 6 - Material Contacts with Background of Transaction
the Company Being Acquired
Item 7 - Additional Information *
Required for Reoffering by
Persons and Parties Deemed To Be
Underwriters
Item 8 - Interests of Named Interests of Named Experts and
Experts and Counsel Counsel
Item 9 - Disclosure of Commission *
Position on Indemnification for
Securities Act Liabilities
B. Information about the Registrant
Item 10 - Information with Respect Information about BANC ONE
to S-3 Registrants CORPORATION; Comparative Rights
of Shareholders
Item 11 - Incorporation of Certain Incorporation of Certain Informa-
Information by Reference tion About BANC ONE by Reference
Item 12 - Information with Respect *
to S-2 or S-3 Registrants
Item 13 - Incorporation of Certain *
Information by Reference
Item 14 - Information with Respect *
to Registrants Other Than S-2 or
S-3 Registrants
Caption in Prospectus
Item of Form S-4 and Proxy Statement
C. Information about the Company
Being Acquired
Item 15 - Information with Respect Information About Mid States
to S-3 Companies Bancshares, Inc.; Incorporation
About Mid States Bancshares, Inc.
by Reference
Item 16 - Information with Respect *
to S-2 or S-3 Companies
Item 17 - Information with Respect *
to Companies Other Than S-2 or
S-3 Companies
D. Voting and Management Information
Item 18 - Information if Proxies, The Special Meeting of Shareholders;
Consents or Authorizations Are To Voting and Management Information
Be Solicited
Item 19 - Information if Proxies, *
Consents or Authorizations Are
Not To Be Solicited or in an
Exchange Offer
* Omitted because item is inapplicable or answer to item is negative.
PROSPECTUS
908,822 Shares
BANC ONE CORPORATION
Common Stock
MID STATES BANCSHARES, INC.
PROXY STATEMENT
for
Special Meeting of Shareholders
, 1994
This Prospectus and Proxy Statement (the "Prospectus" or "Prospectus and Proxy
Statement") relates to the proposed merger of Mid States Bancshares, Inc. ("MID
STATES") with and into Banc One Illinois Corporation ("Banc One Illinois"), a
wholly owned subsidiary of BANC ONE CORPORATION ("BANC ONE"). If the proposed
merger (the "Merger") is consummated, each outstanding share of MID STATES
Common Stock, par value $5.00 per share ("MID STATES Common Stock"), will be
converted into 2.917 shares of BANC ONE Common Stock, no par value
("BANC ONE Common Stock"). See "MERGER--Exchange Ratio ." The Merger is
subject to the approval of not less than a majority of the holders of the
outstanding shares of MID STATES Common Stock entitled to vote thereon and to
the satisfaction of certain other conditions, including obtaining various
regulatory approvals. This Prospectus and Proxy Statement does not cover any
resales of BANC ONE Common Stock received by affiliates of MID STATES upon
consummation of the Merger, and no person is authorized to make use of
this Prospectus and Proxy Statement in connection with any such resale.
BANC ONE Common Stock is traded on the New York Stock Exchange. The closing
price of BANC ONE Common Stock on the New York Stock Exchange on April ,
1994 was $ . The exchange rate mentioned above has been adjusted to
reflect all stock splits and stock dividends.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE COMMISSION
OR ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
A Special Meeting of Shareholders of MID STATES will be held at 501 15th
Street, Moline, Illinois, on , 1994, to consider a proposal to
approve the Merger Agreement (as hereinafter defined).
The date of this Prospectus and Proxy Statement is April , 1994.
AVAILABLE INFORMATION
BANC ONE is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). MID STATES files
certain reports with the Commission pursuant to the Exchange Act. Reports,
proxy and information statements and other information filed by BANC ONE and
MID STATES can be inspected and copied, at prescribed rates, at the public
reference facilities maintained by the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549, and at the Commission's Regional Offices located at
Northwestern Atrium Center, 500 West Madison Street, Suite 1600, Chicago,
Illinois 60661, and 75 Park Place, New York, New York 10007. Reports, proxy
and information statements and other information concerning BANC ONE can be
inspected at the offices of the New York Stock Exchange, 20 Broad Street, New
York, New York 10005. This Prospectus does not contain all information set
forth in the Registration Statement and exhibits thereto which BANC ONE and MID
STATES have filed with the Commission under the Securities Act of 1933, as
amended (the "Securities Act") and Exchange Act, as the case may be,
and to which reference is hereby made.
INCORPORATION BY REFERENCE
THIS PROSPECTUS AND PROXY STATEMENT INCORPORATES DOCUMENTS BY REFERENCE WHICH
ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF ANY SUCH DOCUMENTS,
OTHER THAN EXHIBITS TO SUCH DOCUMENTS WHICH ARE NOT SPECIFICALLY INCORPORATED
BY REFERENCE THEREIN, ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON, INCLUDING ANY
MID STATES SHAREHOLDER, TO WHOM THIS PROSPECTUS IS DELIVERED UPON ORAL OR
WRITTEN REQUEST TO WILLIAM C. LEITER, CONTROLLER, BANC ONE CORPORATION, 100
EAST BROAD STREET, COLUMBUS, OHIO 43271-0251, TELEPHONE NUMBER 614/248-5905.
IN ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE
BY , 1994.
BANC ONE's Annual Report on Form 10-K for the fiscal year ended December 31,
1993 and BANC ONE's Current Reports on Form 8-K, including the 8-K
filed January 28, 1994 and the Form 8-K filed February 17, 1994, in each
case filed with the Commission pursuant to Section 13 of the Exchange Act and
the description of BANC ONE Common Stock which is contained in its registra-
tion statement filed under Section 12 of the Exchange Act, including any amend-
ment or report filed for the purpose of updating such description, are
incorporated into this Prospectus and Proxy Statement by reference.
MID STATES' Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1993 filed with the Commission pursuant to Section 13 of
the Exchange Act is incorporated into this Prospectus and Proxy Statement by
reference.
All documents filed by BANC ONE or MID STATES pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus and
prior to the Special Meeting of Shareholders of MID STATES shall be deemed to
be incorporated by reference in this Prospectus and to be a part hereof from
the respective dates of filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that such statement is modified or superseded by a statement contained
herein or in any other subsequently filed document which also is or is deemed
to be incorporated by reference herein. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus.
No person is authorized to give any information or to make any representations
other than those contained in this Prospectus and Proxy Statement and, if given
or made, such information or representation must not be relied upon as having
been authorized by BANC ONE or MID STATES. This Prospectus and Proxy Statement
does not constitute an offering within any jurisdiction to any person to whom
it is unlawful to make such offer within such jurisdiction.
TABLE OF CONTENTS
Page
A. INFORMATION ABOUT THE TRANSACTION . . . . . . . . . . . . . . . . .
INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Mid States Bancshares, Inc. . . . . . . . . . . . . . . . . . . .
BANC ONE CORPORATION . . . . . . . . . . . . . . . . . . . . . .
SUMMARY OF THE TRANSACTION . . . . . . . . . . . . . . . . . . . . .
Terms of Agreement and Exchange Rate . . . . . . . . . . . . . .
Management After the Merger . . . . . . . . . . . . . . . . . . .
Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . .
Vote Required . . . . . . . . . . . . . . . . . . . . . . . . . .
Opinion s of Investment Banker s . . . . . . . . . . .
Rights of Dissenting Shareholders . . . . . . . . . . . . . . . .
Differences in Shareholder Rights . . . . . . . . . . . . . . . .
Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . .
Conditions; Termination . . . . . . . . . . . . . . . . . . . . .
Selected Financial Data . . . . . . . . . . . . . . . . . . . .
Comparative Per Share Data . . . . . . . . . . . . . . . . . . .
THE SPECIAL MEETING OF SHAREHOLDERS . . . . . . . . . . . . . . . .
Purpose of the Special Meeting of Shareholders . . . . . . . . .
Record Dates and Voting Rights . . . . . . . . . . . . . . . . .
Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exchange Ratio . . . . . . . . . . . . . . . . . . . . . .
Operations After the Merger . . . . . . . . . . . . . . . . . . .
Background of Transaction . . . . . . . . . . . . . . . . . . . .
Merger Recommendation and Reasons for Transaction . . . . . . . .
Opinion s of Investment Banker s . . . . . . . . . .
Interests of Certain Persons in the Merger . . . . . . . . . . .
Effect on Employee Benefits . . . . . . . . . . . . . . . . . . .
Conditions to the Merger; Termination . . . . . . . . . . . . .
Federal Income Tax Consequences . . . . . . . . . . . . . . . . .
Conversion of Shares and Exchange of Certificates . . . . . . . .
Fractional Shares . . . . . . . . . . . . . . . . . . . . . . . .
Resales by Affiliates . . . . . . . . . . . . . . . . . . . . . .
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . .
COMPARATIVE RIGHTS OF SHAREHOLDERS . . . . . . . . . . . . . . . . .
Description of BANC ONE Stock . . . . . . . . . . . . . . . . . .
Special Voting Requirements for Certain Transactions . . . . . .
Comparison of BANC ONE Common Stock and
MID STATES Common Stock . . . . . . . . . . . . . . . . . . .
MISCELLANEOUS INFORMATION . . . . . . . . . . . . . . . . . . . . .
Transfer and Exchange Agents . . . . . . . . . . . . . . . . . .
Interests of Named Experts and Counsel . . . . . . . . . . . . .
Sources of Information . . . . . . . . . . . . . . . . . . . . .
Registration Statement . . . . . . . . . . . . . . . . . . . . .
Other Matters . . . . . . . . . . . . . . . . . . . . . . . . . .
B. INFORMATION ABOUT BANC ONE CORPORATION . . . . . . . . . . . . . . .
General--Business . . . . . . . . . . . . . . . . . . . . . . . . .
Recent Developments . . . . . . . . . . . . . . . . . . . . . . . .
Certain Regulatory Matters . . . . . . . . . . . . . . . . . . . . .
Market Prices of and Dividends Paid on BANC ONE Common Stock . . . .
Incorporation of Certain Information About BANC ONE
CORPORATION by Reference . . . . . . . . . . . . . . . . . . . .
C. INFORMATION ABOUT MID STATES BANCSHARES, INC. . . . . . . . . . . .
General -- Business . . . . . . . . . . . . . . . . . . . . . . . .
Market Prices of and Dividends Paid on
MID STATES Common Stock . . . . . . . . . . . . . . . . . . . .
Incorporation of Certain Information About Mid States
Bancshares, Inc. by Reference . . . . . . . . . . . . . . . . . .
D. VOTING AND MANAGEMENT INFORMATION . . . . . . . . . . . . . . . . .
Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Rights of Dissenting Shareholders . . . . . . . . . . . . . . . . .
Management and Principal Shareholders of BANC ONE . . . . . . . . .
Management and Principal Shareholders of MID STATES . . . . . . . .
EXHIBITS
Exhibit A - Opinion of Donaldson, Lufkin & Jenrette Securities Corporation
Exhibit B - Opinion of The Chicago Corporation
Exhibit C - Section 262 of the Delaware General Corporation Law
PROSPECTUS AND PROXY STATEMENT
MID STATES BANCSHARES, INC.
MOLINE, ILLINOIS
, 1994
SPECIAL MEETING OF SHAREHOLDERS
A. INFORMATION ABOUT THE TRANSACTION
INTRODUCTION
This Prospectus and Proxy Statement (the "Prospectus" or "Prospectus and Proxy
Statement") is furnished in connection with the solicitation of proxies by the
Board of Directors of Mid States Bancshares, Inc. ("MID STATES") a registered
bank holding company headquartered in Moline, Illinois, to be voted at the
Special Meeting of Shareholders of MID STATES to be held on ,
1994 for the purpose of considering and taking action upon a proposal to merge
(the "Merger") MID STATES with and into Banc One Illinois Corporation ("Banc
One Illinois"), a wholly owned subsidiary of BANC ONE CORPORATION ("BANC ONE"),
a registered multi-bank holding company headquartered in Columbus, Ohio. This
proposal is in accordance with the Agreement and Plan of Merger dated May 25,
1993 by and among MID STATES, Banc One Illinois and BANC ONE , as amended on
February 22, 1994 and March 25, 1994 (the "Merger Agreement").
The principal office of BANC ONE is 100 East Broad Street, Columbus, Ohio 43271
and its telephone number is 614/248-5944. The principal office of MID STATES
is 501 15th Street, Moline, Illinois 61265-2180 and its telephone number is
309/757-8400.
This Prospectus and the form of proxy are being mailed to the shareholders of
MID STATES for the first time on or about , 1994.
Mid States Bancshares, Inc.
MID STATES is a bank holding company incorporated under the laws of the state
of Delaware in Moline, Illinois which owns all of the outstanding stock of the
First National Bank of Moline, a national banking association with its main
office located in Moline, Illinois ("First National", the "Bank" or the
"Subsidiary"). The Bank operates three offices in Moline, Illinois. As of
December 31, 1993, MID STATES had total assets of approximately $192
million and the Bank had deposits of approximately $163 million .
See "INFORMATION ABOUT MID STATES BANCSHARES, INC."
BANC ONE CORPORATION
BANC ONE is a multi-bank holding company incorporated under the laws of the
State of Ohio which as of December 31, 1993 owned all of the
outstanding stock of one Arizona, two Kentucky, six Illinois, one Texas,
four Michigan, eight Indiana, fourteen Wisconsin, one California, seven
Colorado, eighteen Ohio, one Utah, two Oklahoma and sixteen West
Virginia commercial banks. These banks operate more than 1,300 offices
in this thirteen-state area and, at December 31, 1993 , BANC ONE, its
affiliate banks and its non-bank subsidiaries had total assets of approximately
$79.9 billion and total deposits of approximately $60.9 billion .
Banc One Illinois, a direct subsidiary of BANC ONE, is the direct parent
of BANC ONE's commercial banks situated in the State of Illinois. See
"INFORMATION ABOUT BANC ONE CORPORATION", which includes information
about pending acquisitions.
SUMMARY OF THE TRANSACTION
Terms of Agreement and Exchange Rate
Upon the Merger becoming effective, each of the outstanding shares of MID
STATES Common Stock, par value $5.00 per share ("MID STATES Common Stock"),
will be converted into 2.917 shares of BANC ONE Common Stock, no par
value ("BANC ONE Common Stock") (the "Exchange Ratio "). Upon
consummation of the Merger, MID STATES will be merged with and into Banc One
Illinois and the separate corporate existence of MID STATES will cease.
Banc One Illinois, as the surviving corporation in the Merger and a wholly
owned subsidiary of BANC ONE, will continue operations under the name Banc One
Illinois Corporation. See "MERGER--Exchange Ratio ."
Management After the Merger
Banc One Illinois will operate with Banc One Illinois' current officers and
employees, with its principal place of business in Springfield, Illinois. Banc
One Illinois' current directors will serve as the directors of the surviving
corporation following the Merger. It is anticipated that following the Merger,
First National will operate under the name of Bank One, Quad Cities, National
Association (the "Resulting Bank"). The Resulting Bank will conduct its
banking operations at First National's present offices.
The Resulting Bank, as a BANC ONE affiliate after the Merger, will operate
under BANC ONE's operating philosophy whereby it will have autonomy to match
its products and services to the needs of its local communities. BANC ONE bank
affiliates have authority to make decisions locally in "people-related" matters
such as lending, personnel, charitable contributions and other community and
related matters, relying upon BANC ONE and its state holding companies for
"paper and computer related" matters such as assistance in accounting, certain
legal matters, investment portfolio management, regulatory compliance, data
processing and other matters which are generally best performed by specialists
on a centralized basis.
Tax Consequences
As a condition to the Merger, MID STATES and BANC ONE received
an opinion dated April 20, 1994 from Vedder, Price, Kaufman & Kammholz
substantially to the effect that, among other things, no gain or loss will be
recognized by MID STATES' shareholders for federal income tax purposes as a
result of the exchange of their MID STATES Common Stock for BANC ONE Common
Stock in the Merger, except to the extent that cash is received in lieu
of fractional shares of BANC ONE Common Stock or pursuant to the exercise of
dissenters' rights. Certain tax consequences of the proposed transaction to
shareholders of MID STATES are summarized under "MERGER--Federal Income Tax
Consequences."
Vote Required
Not less than a majority of the outstanding shares of MID STATES Common Stock
entitled to vote thereon must vote in favor of the approval of the Merger
Agreement in order for the transaction to be approved. The directors and
executive officers of MID STATES and their affiliates and associates are
entitled to vote approximately 160,000 shares, or approximately
51% of the outstanding shares of MID STATES Common Stock. Although no
agreements are in effect, it is currently anticipated that each such holder
will vote his or her shares for approval of the Merger Agreement. It is
not necessary for the shareholders of BANC ONE to approve the merger proposal.
However, BANC ONE, as the sole shareholder of Banc One Illinois, has
approved the Merger and the Merger Agreement. For information concerning
voting by shareholders of MID STATES on the proposed Merger see "MERGER--
General" and "VOTING AND MANAGEMENT INFORMATION--Voting."
Opinions of Investment Bankers
Donaldson, Lufkin & Jenrette Securities Corporation ("DLJ") and The Chicago
Corporation ('TCC") have each delivered a written opinion to the MID STATES'
Board of Directors (the "MID STATES Board") to the effect that, as of the date
of this Prospectus and Proxy Statement, the Exchange Ratio provided
for in the Merger Agreement is fair to the holders of MID STATES Common Stock
from a financial point of view. Copies of the opinions of DLJ and TCC, each
dated as of the date of this Prospectus and Proxy Statement , are
attached hereto as Exhibit A and Exhibit B, respectively.
These opinions should be read in their entirety for a
description of the procedures followed, assumptions and qualifications made,
matters considered and limitations as to the scope thereof. See
"MERGER -- Opinion s of Investment Banker s ."
Rights of Dissenting Shareholders
Under Delaware law, certain rights are available to a shareholder of MID STATES
who does not vote his or her shares in favor of the Merger and delivers to MID
STATES, before the vote is taken, written notice of intent to demand payment
for his or her MID STATES Common Stock if the Merger is consummated. See
"VOTING AND MANAGEMENT INFORMATION--Rights of Dissenting Shareholders."
Differences in Shareholder Rights
There are differences between the rights of MID STATES shareholders and BANC
ONE shareholders. Both Ohio law and BANC ONE's Amended Articles of
Incorporation contain "control share acquisition" provisions which mandate
certain procedures and shareholder consents to approve certain share
acquisitions. In addition, under Ohio law, in evaluating an acquisition
proposal, directors of an Ohio corporation such as BANC ONE are permitted, in
determining whether any matter is in the best interest of the corporation, to
take into consideration the interests of the corporation's employees,
suppliers, creditors and customers, the economy and community and societal
considerations in the interest of the corporation and its shareholders. The
Delaware General Corporation Law (the "DGCL") does not contain any similar
provisions, nor does MID STATES' Amended and Restated Certificate of
Incorporation ("MID STATES' Certificate"). MID STATES' Certificate does,
however, require approval of certain interested shareholder transactions by not
less than 75% of MID STATES' outstanding shares entitled to vote, unless
certain alternative conditions are met, one of which is approval of such
transaction by two-thirds of MID STATES' directors. BANC ONE's Articles also
contain a so-called "fair price" provision which mandates certain procedures
and approvals for a business combination. MID STATES' Certificate contains a
price protection provision. See "COMPARATIVE RIGHTS OF SHAREHOLDERS--Special
Voting Requirements for Certain Transactions." In addition, both Ohio law and
the DGCL contain provisions prohibiting certain business combinations between
corporations and "Interested Shareholders." The DGCL does not contain a
so-called "fair price" provision. The effect of the supermajority and fair
price provisions contained in BANC ONE's Articles may be to discourage certain
potential business combinations which some shareholders may believe to be in
their best interests and to make more difficult management changes which might
occur if the potential business combination were successful. See "COMPARATIVE
RIGHTS OF SHAREHOLDERS-- Comparisons of BANC ONE Common Stock and MID STATES
Common Stock."
The cumulative voting system is used in the election of MID STATES' Board of
Directors. Cumulative voting is not used in the election of BANC ONE's Board
of Directors. See "COMPARATIVE RIGHTS OF SHAREHOLDERS--Comparison of BANC ONE
Common Stock and MID STATES' Common Stock."
Regulatory Approvals
In order for the proposed transaction to be consummated, approval of BANC ONE's
acquisition of MID STATES must be obtained from the Board of Governors of the
Federal Reserve System (the "Federal Reserve") and the Illinois Commissioner of
Banks and Trust Companies (the "Illinois Commissioner"). Both of these
regulatory approvals have been received.
Conditions; Termination
Consummation of the Merger is also subject to satisfaction or waiver of various
conditions, including compliance with respective covenants and confirmation of
respective representations and warranties, the absence of any material adverse
change in the financial condition or business of MID STATES or BANC ONE, the
fulfillment of certain earnings tests and other matters. MID STATES, by action
of its Board of Directors, may elect to terminate the Merger Agreement, whether
before or after approval of the Merger by the shareholders of MID STATES, by
giving three (3) days written notice of such election to BANC ONE. The Merger
Agreement provides that either party may abandon the Merger if it is not
consummated on or before July 1, 1994. See "MERGER- Conditions to the Merger"
for a more complete discussion of the conditions to consummation of the Merger.
Selected Financial Data
On March 30, 1993 BANC ONE acquired Valley National Corporation ("Valley"); on
May 3, 1993 BANC ONE acquired Key Centurion Bancshares, Inc. ("Key") and First
Community Bancorp, Inc. ("First Community"); on November 1, 1993 BANC ONE
acquired Colorado Western Bancorp, Inc. ("Colorado Western"); on December
17, 1993 BANC ONE acquired First Financial Associates, Inc. ("First
Financial"); on December 31, 1993 BANC ONE acquired Capital Banking Group
("CBG") and on March 17, 1994 BANC ONE acquired Parkdale Bank. On
November 2, 1993 BANC ONE entered into an Agreement to acquire Liberty
National Bancorp, Inc. ("Liberty"), Louisville, Kentucky. BANC ONE has also
announced three other acquisitions which are not material individually
or in the aggregate, and, are therefore not included in the accompanying
selected financial data. For further discussion on these acquisitions, see
"INFORMATION ABOUT BANC ONE CORPORATION."
All balance sheets and income statements presented for BANC ONE have been
restated to include the poolings of interests with Valley, Key and First
Community. MID STATES will be accounted for as a pooling of interests.
The following table presents on a historical basis selected unaudited
consolidated financial data for BANC ONE and MID STATES. The financial data is
based on the consolidated financial statements of BANC ONE and MID STATES,
respectively, incorporated herein by reference.
<TABLE>
<CAPTION>
SELECTED FINANCIAL DATA (2)
$(thousands, except per share data)
(UNAUDITED)
Year ended December 31,
------------------------------------------------------------------------
1993 1992 1991 1990 1989
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
Total interest income and
other income:
BANC ONE..................... $7,226,790 $7,358,393 $6,828,327 $6,151,959 $5,473,099
MID STATES .................. 14,880 16,285 17,676 18,380 17,395
Income from continuing
operations:
BANC ONE..................... $1,120,589 $876,588 $664,288 $536,066 $304,916
MID STATES .................. 2,094 2,017 1,967 1,875 1,723
Income from continuing
operations per
common share:
BANC ONE..................... $2.93 $2.29 $1.82 $1.56 $0.97 (1)
MID STATES .................. 6.72 6.47 6.31 6.02 5.53
Historical dividends declared
per common share:
BANC ONE..................... $1.07 $0.89 $0.76 $0.69 $0.63
MID STATES .................. 2.83 2.60 2.60 2.50 2.50
Total assets
(end of period):
BANC ONE..................... $79,918,561 $76,739,119 $73,840,498 $56,610,126 $48,111,384
MID STATES .................. 192,454 199,208 190,516 196,455 180,937
Long-term borrowings
(end of period):
BANC ONE..................... $1,701,662 $1,357,462 $943,726 $810,197 $624,232
MID STATES ..................
Total stockholders' equity
(end of period):
BANC ONE..................... $7,033,638 $6,241,586 $5,559,370 $4,514,653 $3,633,542
MID STATES .................. 20,597 19,384 18,177 17,020 15,924
(1) The decrease in 1989's
income from continuing
operations per common
share is due principally
to a significant
increase in Valley's
provision for loan losses.
(2) Gives effect to the 10%
stock dividend on BANC
ONE common stock paid on
March 4, 1994 to BANC ONE
common stockholders of
record as of February 16,
1994.
</TABLE>
Comparative Per Share Data
Based upon the Merger Exchange Rates and Consolidation Exchange Rates, the
following tables set forth per common share income from continuing operations,
dividends, book value, and market value of (i) BANC ONE, (ii) MID STATES; and
(iii) pro forma equivalent of one share of MID STATES Common Stock based on
BANC ONE Common Stock.
<TABLE>
<CAPTION>
(iii) Per Share of
MIDSTATES Common Stock
assuming an exchange rate
of one share of MIDSTATES
Stock for 2.917 shares of
(i) (ii) BANC ONE stock
------------------------- ------------------------- -------------------------
BANC BANC
ONE MIDSTATES ONE
------------------------- ------------------------- -------------------------
<S> <C> <C> <C>
Income from continuing
operations per common share:
December 31, 1989 $0.97 (5) $5.53 $2.83
December 31, 1990 1.56 6.02 4.55
December 31, 1991 1.82 6.31 5.31
December 31, 1992 2.29 6.47 6.68
December 31, 1993 2.93 6.72 8.55
Dividends per common share:
December 31, 1989 0.63 2.50 1.84
December 31, 1990 0.69 2.50 2.01
December 31, 1991 0.76 2.60 2.22
December 31, 1992 0.89 2.60 2.60
December 31, 1993 1.07 2.83 3.12
Book value per common share
as of December 31, 1993 17.82 66.11 51.98
Market value per common share
as of May 25, 1993 (1) 38.55 (2) (3) 112.45
Market value per common share
as of April __, 1994 (4) (2) (3)
(1) The business day
immediately preceding
public announcement of
the proposed merger.
(2) Based on the closing
price of BANC ONE common
stock as reported on the
New York Stock Exchange,
adjusted for the five
shares for four shares
common stock split
effective August 31,
1993 and the 10% stock
dividend paid on March 4,
1994 to BANC ONE common
stockholders of record
as of February 16, 1994.
(3) No active trading market
exists for MID STATES
common stock.
(4) A recent business day
preceding the date of
this Prospectus.
(5) The decrease in 1989's
income from continuing
operations per common
share is due principally
to a significant
increase in Valley's
provision for loan losses.
</TABLE>
THE SPECIAL MEETING OF SHAREHOLDERS
This Prospectus and Proxy Statement is being furnished to the shareholders of
MID STATES in connection with the solicitation of proxies by the MID STATES
Board for use at MID STATES' Special Meeting of Shareholders and at any
adjournment or adjournments thereof (the "Special Meeting"). The Special
Meeting of Shareholders of MID STATES will be held on , 1994, at
10:00 a.m., local time at 501 15th Street, Moline, Illinois.
Purpose of the Special Meeting of Shareholders
At the Special Meeting, the holders of MID STATES Common Stock will vote on the
approval of the Merger Agreement.
Record Dates and Voting Rights
The MID STATES Board has fixed the close of business on , 1994,
as the record date for determination of shareholders entitled to notice of and
to vote at the Special Meeting. As of the record date, MID STATES had
outstanding and entitled to vote shares of MID STATES Common
Stock. Each share of MID STATES Common Stock is entitled to one vote. The
Merger Agreement must be approved by a majority of MID STATES' shareholders.
Votes, whether in person or by proxy, will be counted and tabulated by
inspectors appointed by MID STATES. Abstentions and broker non-votes will not
be counted as votes either "for" or "against" any matters coming before the
Special Meeting, however, pursuant to Delaware law, such abstentions and broker
non-votes will be counted toward determining a quorum. In accordance with
Delaware law and MID STATES' Certificate and Bylaws, such abstentions have the
effect of a "no" vote since state law requires the Merger Agreement to be
authorized and approved by the affirmative vote of not less than a majority of
the MID STATES Common Stock entitled to vote, rather than a majority of those
shares actually voting.
Proxies
Proxies for use at the Special Meeting accompany this Proxy Statement. A
shareholder may use a proxy whether or not he or she intends to attend the
Special Meeting in person. The proxy may be revoked in writing by the person
giving it at any time before it is exercised by notice to the Secretary of MID
STATES, by submitting a later dated proxy or by attending and voting in person
at the Special Meeting. All proxies validly submitted and not revoked will be
voted in the manner specified therein. IF NO SPECIFICATION IS MADE, THE
PROXIES WILL BE VOTED IN FAVOR OF APPROVAL OF THE MERGER AGREEMENT. The MID
STATES Board is not aware of any other matters which may be presented for
action at the Special Meeting, but if other matters do properly come before the
meeting it is intended that the shares represented by the accompanying proxy
will be voted by the persons named in the proxy in accordance with their best
judgment. The shares represented by the accompanying proxy may not be voted to
adjourn the Special Meeting of Shareholders for the purpose of soliciting
additional votes to approve the Merger.
Solicitation of proxies will be made in person, by mail, or by telephone or
telegraph by present and former directors, officers and employees of MID STATES
and First National for which no additional compensation will be paid. MID
STATES will bear the cost of solicitation of proxies from its shareholders and
may reimburse brokers and others for their expenses in forwarding solicitation
material to beneficial owners of its voting stock.
MID STATES held its 1993 Annual Meeting of Shareholders on April 20, 1993.
No date has been set for the 1994 Annual Meeting on the assumption that
the Merger will be consummated.
MERGER
The information in this Prospectus and Proxy Statement concerning the terms of
the Merger is a summary only and is qualified in its entirety by reference to
the Merger Agreement , as amended, which is attached as an exhibit to the
Registration Statement filed by BANC ONE with the Commission in connection with
the Merger and which is incorporated herein by reference. See "Incorporation
by Reference" for the procedure for obtaining a copy of the Merger Agreement
and the amendments thereto.
General
The Merger Agreement provides for the Merger of MID STATES with and into Banc
One Illinois. As a result of the Merger, First National will become a
subsidiary of BANC ONE and Banc One Illinois. Upon the effectiveness of the
Merger (the "Effective Time") each of the outstanding shares of MID STATES
Common Stock will be converted into 2.917 shares of BANC ONE Common Stock
(subject to adjustments in certain circumstances), which shares of BANC ONE
Common Stock will be issued as a result of the Merger. See "MERGER--Exchange
Rate."
The affirmative vote of a majority of the outstanding shares of MID STATES
Common Stock entitled to vote at the Special Meeting is required in order to
approve the Merger Agreement. See "VOTING AND MANAGEMENT INFORMATION-Voting."
However, it is a condition to BANC ONE's obligation to consummate the Merger
that not more than 10% of the maximum aggregate total number of shares of BANC
ONE Common Stock which could be issued by BANC ONE in the Merger are to be
settled in cash as a result of fractional share interests or are to be issued
to MID STATES shareholders who have asserted rights of dissenting
shareholders. See "VOTING AND MANAGEMENT INFORMATION-Rights of Dissenting
Shareholders."
Subject to such shareholder approval and the satisfaction of certain conditions
and receipt of all requisite regulatory approvals (which have been
obtained), in each case as provided for in the Merger Agreement, the
Merger will become effective upon the issuance by the Secretary of State of the
State of Illinois of a certificate of merger with respect thereto as provided
in applicable provisions of the Illinois Business Corporation Act of 1983, as
amended, and filing of a Certificate of Merger with the Secretary of State
of the State of Delaware.
The Boards of Directors of BANC ONE, Banc One Illinois and MID STATES have
approved the Merger Agreement. BANC ONE, as the sole shareholder of Banc One
Illinois, has approved the Merger Agreement. Approval of the Merger Agreement
by the shareholders of BANC ONE is not required for consummation of the Merger.
Exchange Ratio
At the Effective Time, stock issued by reason of the Merger will be allocated
to the shareholders of record of MID STATES as of the Effective Time with such
shares of BANC ONE Common Stock to be equal to the number of shares of MID
STATES Common Stock outstanding immediately prior to the Effective Time
multiplied by 2.917.
Operations After the Merger
Upon the consummation of the Merger, MID STATES will be merged into Banc One
Illinois and the separate corporate existence of MID STATES will cease. Banc
One Illinois, as the surviving corporation in the Merger and a wholly owned
subsidiary of BANC ONE, will continue operations under the name "Banc One
Illinois Corporation" and will operate with Banc One Illinois' current
officers and employees, with its principal place of business at Springfield,
Illinois. Banc One Illinois' current directors will serve as the directors of
the surviving corporation following the Merger. Following the Merger, the Bank
will change its name to Bank One, Quad Cities, N.A. and the present directors,
officers and employees of the Bank will continue in those same capacities. The
Bank will conduct its banking operations at its present offices.
The Bank, as a BANC ONE affiliate after the Merger, will operate under BANC
ONE's operating philosophy whereby it will have autonomy to match its products
and services to the needs of its local communities. Similarly, BANC ONE bank
affiliates have authority to make decisions locally in "people-related" matters
such as lending, personnel, charitable contributions and other community and
related matters, relying upon BANC ONE and its state holding companies for
"paper and computer related" matters such as assistance in accounting, certain
legal matters, investment portfolio management, regulatory compliance, data
processing and other matters which are generally best performed by specialists
on a centralized basis.
Background of Transaction
On April 6, 1992, Mr. Thomas H. Robinson, President and CEO of MID STATES, and
Mr. Richard Bishop, former President, CEO and director of MID STATES, met
informally with representatives of BANC ONE. At the meeting, initiated by BANC
ONE, BANC ONE expressed an interest in pursuing discussions regarding a
possible affiliation with MID STATES. As a result of this initial meeting,
Messrs. Bishop and Robinson and three principal shareholders of MID STATES
(Messrs. John C. Pryor, James T. McLaughlin and Robert L. Seiffert) met with
representatives of BANC ONE on June 16, 1992.
In July, 1992, representatives of BANC ONE again approached MID STATES
regarding a possible affiliation and indicated an interest in meeting with the
entire Board of Directors. As a result, on July 20, 1992, representatives of
BANC ONE made a presentation to the entire Board of Directors regarding
BANC ONE and an affiliation between BANC ONE and MID STATES.
As from time to time MID STATES has received similar informal inquiries
regarding possible affiliation, MID STATES' Board of Directors began discussing
long-term strategic issues, including the possible sale of MID STATES, as well
as MID STATES continuing to remain independent. In doing so, the Board
consulted with and retained the law firm of Vedder, Price, Kaufman & Kammholz,
a firm with extensive experience in representing financial institutions, as
special counsel, to assist the Board in evaluating alternatives. Vedder,
Price, Kaufman & Kammholz has represented MID STATES on a special counsel basis
for a number of years. On September 21, 1992, the Board formed the Long-Range
Strategic Planning Committee (the "Committee"), a special board committee
consisting of Messrs. Richard M. Bishop, Daniel Churchill, James T. McLaughlin,
Michael S. Plunkett, John C. Pryor, Thomas H. Robinson and Robert L. Seiffert,
for the purpose of a focused study of the various alternatives available to MID
STATES. The members of the committee consisted of management, outside
directors, and representatives of MID STATES' four largest stockholder groups.
Mr. Bishop resigned as a MID STATES director and Committee member in December,
1992 as part of his previously announced retirement plans.
At the October 19, 1992 meeting of the Board of Directors, the Committee
recommended to the Board that an investment banking firm be retained to assist
in exploring various strategic alternatives. At that time, the Board of
Directors recognized that it was in the best interests of MID STATES and its
shareholders to retain an investment banking firm to assist in evaluating
merger proposals and to hold discussions with certain regional bank holding
companies that might be interested in affiliating with MID STATES.
During late October, 1992, the Committee met with representatives of, and
reviewed the services offered by, Donaldson, Lufkin & Jenrette Securities
Corporation, a nationally recognized investment banking firm ("DLJ"). On
November 6, 1992, MID STATES retained DLJ on the basis of, among other things,
its perceived expertise in merger and acquisition transactions and its
familiarity with the most likely potential merger partners for MID STATES and
the Midwest regional banking industry.
At the November 24, 1992 Committee meeting, the Committee, after reviewing a
list of Midwestern regional bank holding companies, identified three
prospective acquirors to be initially contacted by DLJ regarding a potential
affiliation with MID STATES. In December, 1992, DLJ forwarded confidentiality
agreements to these three regional bank holding companies, including BANC ONE,
which had indicated an interest in pursuing further discussions with MID
STATES. On December 28, 1992, BANC ONE and the two Midwestern-based bank
holding companies executed confidentiality agreements.
During February and March, 1993, MID STATES provided financial and other
information to each of BANC ONE and the second Midwestern-based bank holding
company ("MBHC") pursuant to the confidentiality agreements. At such time, the
third Midwestern-based bank holding company indicated that it was not then
currently interested in pursuing discussions due to other strategic initiatives.
In order to assist the Board of Directors in comparing the two interested
parties and evaluating any merger proposal that might ensue, MID STATES
requested that the parties prepare a written discussion of their respective
business organizations and affiliation objectives, including, without
limitation, a written response to the following areas of inquiry posed by the
Board of Directors: (i) proposed purchase price or exchange ratio, including
any price protection or other structural features on the purchase price;
(ii) ongoing role of the existing Board of Directors; (iii) management style
and philosophy, including those functions that would be decentralized or
centralized subsequent to the acquisition; (iv) post-acquisition plans for
existing employee compensation and benefits, including existing employment
agreements; (v) principal services and capabilities offered that would inure to
the benefit of MID STATES customers as a result of the acquisition; (vi) loan
policy and application process and impact of transaction on the availability of
credit to the communities served by MID STATES; (vii) expected timetable of an
affiliation transaction; (viii) post-acquisition staffing patterns of recent
acquisitions and intentions regarding the autonomy of MID STATES; and
(ix) maintenance of MID STATES' strong community identification subsequent to
the acquisition.
On March 17, 1993, BANC ONE responded to the Board's inquiry. In addition to
the proposed financial terms, the response indicated that BANC ONE's underlying
philosophy with acquisition partners is the "Uncommon Partnership," which
includes the basic tenets of autonomy, centralized support, market diversity
and balance and emphasis on superior products and services. The response
further indicated that BANC ONE offered a competitive benefits package to its
employees and looked to promote from within. BANC ONE emphasized its
decentralized and local autonomy approach to management, which extends to loan
decisions, enhanced customer service through new products, consolidation of
certain back room and other service and support functions and continued
investment in new technology, and encouragement of its affiliates to be
involved in their respective communities through the use of local contractors,
service providers and businesses and emphasis on community reinvestment
products and services.
MBHC's March 19, 1993 response to the Board's inquiry indicated that, in
addition to the proposed financial terms, MID STATES would continue to operate
under its existing management with certain back room and other service
functions being merged into MBHC's existing banking operations in the Quad
Cities area. The response emphasized a continued commitment to the Moline
community in the form of new products and services and expanded and enhanced
community reinvestment activities. As with BANC ONE, MBHC indicated that
credit decisions and employee management decisions were delegated activities.
The response indicated that MBHC intended to retain the current management and
employees and that as an affiliate of MBHC, MID STATES' employees would be
entitled to participate in training programs, career advancement opportunities
and benefits programs.
On March 26, 1993, the Committee met with Vedder, Price, Kaufman & Kammholz and
DLJ in Chicago to discuss the two written responses. At the meeting, DLJ
reviewed the financial terms of the response by each from MBHC and BANC ONE in
detail with the Committee. MBHC's initial indication of interest contemplated
a fixed exchange ratio without the protection of a "walk-away" right. A
walk-away right permits the seller in a merger to terminate the transaction if
the buyer's stock price falls below a stipulated benchmark. Based on average
trading prices of MBHC's common stock during the relevant period, MBHC's
initial indication of interest represented a total aggregate value of
approximately $29-$32 million. BANC ONE's initial indication of interest,
included a floating exchange ratio which contemplated an upper and lower
"collar," but no "walk-away" right. The collar would have set a minimum and
maximum number of shares to be issued in the merger, depending on BANC ONE's
stock price.
Each of the proposed transactions would have resulted in tax-deferred gain or
loss to MID STATES' shareholders. In addition, each of the indications of
interest contained various additional terms and was subject to various
additional conditions.
Subsequent to the discussions with DLJ, the Committee met separately with
representatives of the two interested parties to ascertain the specifics of
their respective indications of interest regarding an affiliation with MID
STATES. At the conclusion of these meetings, the Committee met again to
evaluate the initial indications of interest. In evaluating the indications of
interest, Committee members expressed concern about the possible adverse impact
on management and employees and possible diminished customer satisfaction that
could result from an affiliation with MBHC given that MBHC would likely operate
First National as a branch of its existing bank in the Quad Cities area at such
time as interstate branch banking became lawful. The Committee also noted that
BANC ONE was more likely than MBHC to be able to offer an acceptable purchase
price without suffering unacceptable dilution in earnings per share. The BANC
ONE response also offered significantly higher dividends than currently
provided by MID STATES and the prospects for continued growth of MID STATES as
a financial institution. MBHC's indication of interest also offered such
prospects. BANC ONE's perceived intention to continue to operate MID STATES as
an independent entity was also given consideration. As a result of its
evaluations, and with the assistance of DLJ, the Committee determined that BANC
ONE was the preferred bidder due to its perceived ability to offer superior
financial terms and the perception that from an operations, management style
and overall business philosophy viewpoint, BANC ONE was a more attractive
merger partner than MBHC. DLJ was instructed to proceed with negotiations with
BANC ONE.
On April 2, 1993, the Committee met to discuss the status of the BANC ONE
negotiations. After extensive discussions, the Committee instructed DLJ to
continue negotiations. DLJ reported back to the Committee on April 6, 1993
with BANC ONE's final proposed exchange ratio of 2.917 and a "walk-away" right
for MID STATES if the market price of BANC ONE's stock was below $41.60 on the
Effective Date. After lengthy discussion, during which DLJ presented
information regarding comparative transactions, the Committee determined that
it was appropriate to present the financial terms and conditions of BANC ONE's
indication of interest to the Board of Directors with a recommendation that the
Board vote to approve the financial terms and conditions of BANC ONE's
indication of interest subject to negotiation of certain outstanding issues.
During the period immediately following the April 2, 1993 Committee meeting,
DLJ again contacted MBHC and offered it the opportunity to increase the
financial terms of its initial indication of interest. At such time, MBHC
declined to do so.
A special meeting of the Board of Directors was held on April 17, 1993 to
consider the BANC ONE merger proposal set forth in the first draft of the
Merger Agreement dated April 13, 1993. At such meeting, DLJ made a
presentation to the MID STATES Board of Directors concerning the expected
effects of the proposed affiliation with BANC ONE. Vedder, Price, Kaufman &
Kammholz then reviewed in detail with the Board its duties under Delaware law
and the proposed Merger Agreement presented by BANC ONE. Vedder, Price,
Kaufman & Kammholz concluded its presentation by indicating certain issues that
required additional negotiation. After significant discussion, the MID STATES'
Board of Directors authorized Mr. Robinson, with the assistance of DLJ and
Vedder, Price, Kaufman & Kammholz, to attempt to negotiate a final definitive
agreement with BANC ONE.
On May 24, 1993, MID STATES' Board of Directors met with Vedder, Price, Kaufman
& Kammholz and DLJ to consider the revised merger proposal and proposed form of
Merger Agreement which had been negotiated between the parties and their
representatives. At the meeting, DLJ made a detailed presentation regarding
the proposed business combination and discussed a number of valuation
considerations followed by a detailed presentation by Vedder, Price, Kaufman &
Kammholz discussing the proposed Merger Agreement and the results of the
negotiations with BANC ONE's representatives. After a presentation and
recommendation by the Committee and receipt of an oral opinion from DLJ that
BANC ONE's proposal was fair, from a financial point of view, to MID STATES'
shareholders, the MID STATES' Board unanimously approved the form of Merger
Agreement, Benefits Agreement and Separation Assistance Plan between MID STATES
and BANC ONE and authorized its execution with such additional changes,
modifications and amendments as were deemed necessary or appropriate by Mr.
Robinson.
Final modifications were made to the Merger Agreement as a result of
negotiations between legal counsel for BANC ONE and Vedder, Price, Kaufman &
Kammholz and it was executed by the respective parties on May 25, 1993. Prior
to the opening of business on May 26, 1993, MID STATES and BANC ONE issued a
joint press release announcing the execution of the Merger Agreement.
BANC ONE and MID STATES began the process of obtaining necessary approvals.
All regulatory approvals required prior to the merger were obtained. A special
meeting of shareholders of MID STATES was originally scheduled for January 26,
1994 for the purpose of MID STATES shareholders approval of the Merger
Agreement. The Board of Directors of MID STATES had unanimously recommended
the merger to the shareholders and urged them to vote in favor of the proposed
merger in the prospectus and proxy statement dated December 21, 1993 delivered
to the shareholders of MID STATES in connection with that special meeting (the
"December 21 Proxy").
However, the Merger Agreement contained a provision permitting MID STATES to
terminate the Merger Agreement if during the January 11-24, 1994 evaluation
period (during which the market price for BANC ONE's common stock was
averaged), the average price of BANC ONE Common Stock (the "Evaluation Period
Price") was below $37.82, which is a merger value equivalent of $102.96 per
share of MID STATES Common Stock. This right to terminate is the so-called
"walk-away" provision. In fact, the Evaluation Period Price was $33.43. The
Board of Directors had stated in the December 21 Proxy that it did not intend
to waive the walk-away provision. Also, DLJ had, at the Board of Director's
request, specifically excluded from their fairness opinion dated December 21,
1993 (the "December 21 opinion") the situation where the Evaluation Period
Price was below $37.82. The December 21 opinion was a major supporting factor
for the Board of Director's original recommendation in favor of the merger.
During the period immediately prior to January 26, DLJ on behalf of MID STATES
requested that BANC ONE increase the exchange ratio so as to bring the value of
BANC ONE shares to be received in the merger in respect to each share of MID
STATES Common Stock to or above $102.96 at the closing. BANC ONE declined, but
indicated a strong desire to consummate the merger and a willingness to
negotiate terms other than the exchange ratio. On January 26, 1994, the Board
of Director's chose to cancel the scheduled special meeting without voting on
the merger so as to allow for further discussion with BANC ONE with a view to
finding a basis for completion of the transaction. This was done because the
Board of Directors was, and is, committed to the proposition that a merger with
BANC ONE is in the best interest of MID STATES, its shareholders, employees,
customers and depositors, as well as the Quad Cities community. For these
reasons and the reasons set forth below under "Merger Recommendations and
Reasons for Transaction" (the "pertinent reasons") the Board of Directors chose
not to exercise the walk-away provision at such time. MID STATES shareholders
were informed of these events in a letter dated January 26, 1994.
On February 22, 1994 BANC ONE and MID STATES entered into the First Amendment
to the Merger Agreement. The First Amendment contained the following
provisions:
1. MID STATES agreed that it would, conditionally, resolicit the MID STATES
shareholders to approve the merger and in doing so would inform the
shareholders that the MID STATES Board of Directors intends to proceed with
the merger even if the BANC ONE share value equivalent is less than
$102.96. The relevant conditions are: (a) that MID STATES financial
advisors opine that the exchange ratio is fair to the MID STATES
shareholders from a financial point of view, disregarding the fact that the
BANC ONE Evaluation Period Price was below $37.82 ($102.96 per MID STATES
share of Common Stock merger value equivalent) as described above and might
be below such amount at the closing of the merger [MID STATES intended to
obtain a new fairness opinion from DLJ and to obtain a concurring "second
opinion" from The Chicago Corporation ("TCC"), an investment banking firm,
as to the fairness of the exchange ratio to the MID STATES shareholders];
(b) that these fairness opinions remain in effect at the closing of the
merger; and (c) that the shareholders of MID STATES approve the Merger
Agreement with the knowledge that the Board of Directors intends to proceed
with the merger on the terms and conditions described above.
2. MID STATES and BANC ONE agreed that MID STATES' right to terminate the
Merger Agreement based upon the walk-away provision was amended so that MID
STATES could unilaterally terminate the Merger Agreement if it could not
obtain the necessary fairness opinions or any other cause made it probable
that the merger could not be consummated prior to May 1, 1994, the "outside
date" for completion of the Merger Agreement.
3. BANC ONE agreed to reimburse MID STATES for one-half of its out-of-pocket
expenses (legal, financial advisory, accounting, etc.) incurred after
January 25, 1994 in connection with the merger -- whether or not the
transaction is consummated.
During mid-February DLJ on behalf of MID STATES began discussions with BANC ONE
concerning the need for BANC ONE to increase the exchange ratio/merger
consideration so as to permit DLJ and TCC to issue their fairness opinions.
During this time, the Board of Directors determined that, if the merger with
BANC ONE could not be accomplished at this time, the best course for MID STATES
currently is to remain independent. Therefore, the MID STATES' Board
instructed management and DLJ not to solicit or respond to inquiries from other
possible interested parties for MID STATES, including MBHC, the party from
which MID STATES received an indication of interest for a possible merger with
MID STATES in March, 1993.
On March 11, 1994 BANC ONE offered to increase the exchange ratio from 2.7225
BANC ONE common shares (as adjusted to account for BANC ONE's 10% stock
dividend of March 4, 1994) to each share of Common Stock of MID STATES to 2.917
shares. BANC ONE and MID STATES further agreed to extend the termination date
under the Merger Agreement to July 1, 1994 so as to enable sufficient time to
resolicit the shareholders of MID STATES. At a MID STATES Board of Director's
Meeting on March 28, 1994 the Board of Directors agreed to ratify the Second
Amendment to the Merger Agreement which encompassed these two new terms and
received the fairness opinions of its two financial advisors, DLJ and TCC.
Based upon these reports and the increased exchanged ratio, the Board of
Directors once again, unanimously, recommends the merger to the shareholders,
and urges shareholder approval and the adoption of the Merger Agreement, as
amended.
Merger Recommendation and Reasons for Transaction
The terms of the Merger and the Merger Agreement, including the Exchange Ratio,
were the result of arms length negotiations between MID STATES and BANC ONE and
their respective representatives. In the course of reaching its decision to
approve the Merger Agreement, the Board of Directors of MID STATES consulted
with its legal and financial advisors as well as with management of MID STATES,
and, without assigning any relative or specific weights, considered numerous
factors, including but not limited to the following:
(1) That a business combination with a larger bank holding company, such as
BANC ONE, would provide both greater short-term and long-term value to MID
STATES' shareholders than other alternatives available and would enhance
MID STATES' competitiveness and its ability to serve its depositors,
customers, and the communities in which it operates;
(2) BANC ONE's record of fair treatment of employees of acquired institutions
and outstanding record of community services and support;
(3) BANC ONE's significant long-term experience in integrating the operations
of banks and bank holding companies;
(4) The economic conditions and prospects for the market in which MID STATES
operates, and competitive pressures in the financial services industry in
general and the banking industry in particular;
(5) That the Merger offered MID STATES' shareholders the prospect for
substantially higher dividends, a higher current trading value
for their shares, and better prospects for future growth than if MID
STATES were to remain independent;
(6) The bank regulatory environment in general;
(7) The business, results of operations, asset quality and financial condition
of BANC ONE, the future growth prospects of BANC ONE and MID STATES
following the Merger, and the potential synergies and cost savings expected
to be realized from the Merger; and
(8) the presentations of MID STATES' financial advisor s , DLJ and
TCC, and the opinions rendered by DLJ and TCC to the effect
that the Exchange Ratio was fair, from a financial point of view,
to the holders of MID STATES Common Stock. See "Merger-Opinion s of
Investment Banker s ."
MID STATES' Board of Directors believes that the affiliation with BANC ONE will
result in a competitively stronger combined entity with increased financial and
human resources which will lead to enhanced financial performance and a larger
and more geographically diverse banking operation.
As of , 1994, the directors and executive officers of MID STATES,
together with their affiliates and associates, as a group, were entitled to
vote approximately 160,000 shares of MID STATES Common Stock
representing approximately 51% of the shares outstanding. These persons
will be entitled to receive the same consideration for their shares as any
other MID STATES shareholder upon approval of the Merger. MID STATES believes
that all of the directors' and executive officers' shares will be voted
in favor of the Merger. After the Merger, MID STATES' directors and executive
officers will own less than 1% of the shares of BANC ONE Common Stock
outstanding.
MID STATES' BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT THE MERGER AGREEMENT
BE APPROVED BY THE SHAREHOLDERS OF MID STATES.
BANC ONE believes that the affiliation of MID STATES with BANC ONE and the
acquisition of First National thereby will provide BANC ONE with a presence in
the Moline, Illinois area and an expansion of BANC ONE's customer base and
assets. Such expansion will provide BANC ONE with the opportunity to realize
increased economies of scale while serving new customers with the expertise and
assistance of the capable and experienced staff of First National.
Opinion s of Investment Banker s
Opinion of Donaldson, Lufkin & Jenrette Securities Corporation
The MID STATES Board retained DLJ, among other things, to advise it as to the
fairness of the consideration to be received by the shareholders of MID STATES
pursuant to the terms of the Merger Agreement.
DLJ is a nationally recognized investment banking firm regularly engaged in the
valuation of financial institutions and their securities in connection with
mergers and acquisitions. The MID STATES Board selected DLJ on the basis of,
among other things, its perceived expertise in merger and acquisition
transactions and its familiarity with the most likely potential merger partners
for MID STATES and the regional banking industry.
DLJ has rendered a written opinion to the MID STATES Board to the effect that
the Exchange Ratio is fair, from a financial point of view, to the holders of
MID STATES Common Stock. DLJ's opinion is attached hereto as Exhibit A. MID
STATES' shareholders are encouraged to read the DLJ opinion in its entirety.
DLJ's opinion is directed to the Board of Directors of MID STATES only and is
directed only to the Exchange Ratio and does not constitute a recommendation to
any MID STATES shareholder as to how such shareholder should vote at the MID
STATES Special Meeting of Shareholders.
For purposes of its opinion and in connection with its review of the proposed
transaction, DLJ, among other things: (a) reviewed the Merger Agreement, as
amended, and the Prospectus and Proxy Statement; (b) reviewed certain publicly
available financial statements both audited and unaudited, for MID STATES and
BANC ONE; (c) reviewed certain financial statements and other financial and
operating data concerning MID STATES and BANC ONE prepared by their respective
managements; (d) reviewed certain financial projections of MID STATES and BANC
ONE, both on a stand-alone and on a combined basis, prepared by their
respective managements; (e) discussed certain aspects of the past and current
business operations, results of regulatory examinations and actions, financial
condition and future prospects of MID STATES and BANC ONE with certain members
of the management of MID STATES and BANC ONE; (f) reviewed reported market
prices and historical trading activity of MID STATES Common Stock and BANC ONE
Common Stock; (g) reviewed certain aspects of the financial performance of MID
STATES and BANC ONE Common Stock and compared such financial performance of MID
STATE and BANC ONE, together with the stock market data relating to MID STATES
and BANC ONE, with similar data available for certain other financial
institutions and certain of their publicly traded securities; (h) reviewed the
financial terms, to the extent publicly available, of certain recent business
combinations involving other financial institutions; (i) participated in
discussions and negotiations among representatives of MID STATES and BANC ONE
and their financial and legal advisors; and (j) conducted such other studies,
analyses and examinations as DLJ deemed appropriate.
DLJ relied upon and assumed without independent verification the accuracy and
completeness of all of the financial and other information provided to it by
MID STATES, BANC ONE and their respective representatives and the publicly
available information reviewed by DLJ. DLJ also relied upon the managements of
both MID STATES and BANC ONE as to the reasonableness and achievability of the
financial and operating forecasts provided to DLJ (and the assumptions and
basis therefor). In that regard, DLJ assumed that such forecasts reflect the
best available estimates and judgments of such respective managements and that
such projections and forecasts will be realized in the amounts and in the time
period currently estimated by the managements of both MID STATES and BANC ONE.
DLJ did not independently verify and relied on and assumed that the aggregate
allowances for loan losses set forth in the balance sheets of each MID STATES
and BANC ONE at December 31, 1993 are adequate to cover such losses and
complied fully with applicable law, regulatory policy and sound banking
practice as of the date of such financial statements. DLJ was not retained to
and did not conduct a physical inspection of any of the properties or
facilities of MID STATES or BANC ONE, nor did DLJ make any independent
evaluation or appraisal of the assets, liabilities or prospects of MID STATES
or BANC ONE, was not furnished with any such evaluation or appraisal and did
not review any individual credit files. DLJ also assumed that the Merger is,
and will be, in compliance with all laws and regulations that are applicable to
MID STATES and BANC ONE. DLJ was informed by MID STATES and assumed for
purposes of its opinion that the Merger will be recorded as a pooling of
interests under generally accepted accounting principles.
Prior to rendering its opinion dated , 1994 to the MID STATES
Board, DLJ rendered an oral opinion to the Board of March 28, 1994. See
"MERGER/Background of Transaction" for discussion of the events preceding DLJ's
rendering of its oral opinion. Set forth below is a brief summary of the
analyses performed by DLJ in reaching its March 28, 1994 oral opinion.
Stock Trading History. DLJ examined the history of trading prices and volume
for MID STATES Common Stock (to the extent known by MID STATES management and
conveyed to DLJ) and BANC ONE Common Stock and the relationship between the
movements of such common stock prices to prices in the Standard & Poor's
Regional Bank Index, the BANC ONE Peer Group (as defined below) and the MID
STATES Peer Group (as defined below).
Discounted Cash Flow Analysis. Using discounted cash flow analysis, DLJ
estimated the future dividend streams that MID STATES could produce over the
five years ending December 31, 1998, assuming a minimum required tangible
equity level of 6% of tangible total assets, if MID STATES performed in
accordance with management's forecast. DLJ also estimated the terminal value
of MID STATES' common equity as of December 31, 1998, by applying a range of
multiples to MID STATES' projected 1998 earnings. The dividend streams and
terminal value were discounted to present values using discount rates ranging
from 11% to 15%, which reflect different assumptions regarding the required
rates of return of holders and prospective buyers of MID STATES Common Stock.
The range of present values per share of MID STATES Common Stock resulting from
this analysis was $78.75 to $98.20.
Comparison with Selected Companies. DLJ compared selected financial ratios for
MID STATES to the corresponding ratios of ANB Corporation; Independent Bank
Corporation; Northwest Illinois Bancorp, Inc.; Princeton National Bancorp; and
Premier Financial Services, Inc. (the "MID STATES Peer Group"), and for BANC
ONE to the corresponding ratios of Boatmen's Bancshares, Inc.; Comerica
Incorporated; First Bank System, Inc.; First of America Bank Corporation;
Firstar Corporation; NBD Bancorp, Inc.; Norwest Corporation; Fifth Third
Bancorp; Huntington Bancshares Incorporated; National City Corporation; Old
Kent Financial Corporation; and Society Corporation (the "BANC ONE Peer
Group"). Such ratios included the regulatory "leverage ratio," return on
average total assets, return on average common equity, loan loss reserve to
non-performing loans (defined as non-accrual loans, loans 90 days of more past
due but still accruing interest and restructured loans) and non-performing
assets (defined as non-performing loans plus other real estate owned) to total
loans plus other real estate owned, market price to latest twelve months'
("LTM") earnings per share ("EPS") and market price to book value per share.
All ratios were based on financial data at or for the twelve months ended
December 31, 1993. Market prices as of March 22, 1994 were used for all
companies except MID STATES, for which the last sales price known to MID STATES
management prior to announcement of the Merger Agreement was used.
DLJ compared the mean values for each of such ratios for the MID STATES Peer
Group with the corresponding ratio for MID STATES. This analysis showed that
the MID STATES Peer Group had a mean leverage ratio of 8.9% as compared with
10.5% for MID STATES; a mean return on average assets of 1.18%, as compared
with 1.08% for MID STATES; a mean return on average common equity of 12.0%, as
compared with 10.5% for MID STATES; a mean ratio of loan loss reserve to
non-performing loans of 192%, as compared with 194% for MID STATES; a mean
ratio of non-performing assets to loans plus other real estate owned of 1.15%,
as compared with 0.65% for MID STATES; a mean ratio of market price to LTM EPS
of 10.9 times, as compared with 6.6 times for MID STATES; and a mean ratio of
market price to book value per share of 1.24 times, as compared with 0.67 times
for MID STATES.
DLJ also compared the mean values for each of such ratios for the BANC ONE Peer
Group with the corresponding ratio for BANC ONE. This analysis showed that the
BANC ONE Peer Group had a mean leverage ratio of 7.66% as compared with 8.67%
for BANC ONE; a mean return on average assets of 1.37%, as compared with 1.50%
for BANC ONE; a mean return on average common equity of 16.8%, as compared with
17.1% for BANC ONE; a mean ratio of loan loss reserve to non-performing loans
of 305%, as compared with 224% for BANC ONE; a mean ratio of non-performing
assets to loans plus other real estate owned of 1.09%, as compared with 1.12%
for BANC ONE; a mean ratio of market price to LTM EPS of 11.1 times, as
compared with 11.4 times for BANC ONE; and a mean ratio of market price to book
value per share of 1.78 times, as compared with 1.87 times for BANC ONE.
Analysis of Selected Merger Transactions. DLJ reviewed selected mergers
announced from January 1, 1992 through March 22, 1994 involving acquisitions of
banks or bank holding companies headquartered in Illinois or states contiguous
to Illinois with assets between $100 million and $300 million. Specifically,
DLJ reviewed the mergers involving the following pairs of institutions: AMCORE
Financial/First State Bancorp; Norwest Corporation/La Porte Bancorp; Old
National Bancorp/Indiana State Bank of Terre Haute; Chemical Financial
Corporation/Key State Bank; Citizens Banking Corporation/Royal Bank Group;
Mercantile Bancorporation/Mount Vernon Bancorp; National City
Bancshares/Lincolnland Bancorp; National City Bancshares/Sure Financial
Corporation; F&M Bancorporation/First National Financial Corporation; Norwest
Corporation/Financial Concepts Bancorp; Old National Bancorp/DCB Corporation;
CNB Bancshares, Inc./South Central Illinois Bancorp; Firstbank of Illinois
Corporation/First Highland Corporation; Society Corporation/First of America
Bank - Monroe; and Old National Bancorp/Palmer Bancorp, Inc. DLJ calculated
the multiples of the offer value over the LTM EPS and book value per share of
the acquired company in each transaction. The analysis yielded a range of
multiples of LTM EPS of 7.7 times to 38.6 times, with a mean of 16.9 times and
a median of 15.4 times; and a range of multiples of book value of 1.00 times to
2.23 times, with a mean of 1.66 times and a median of 1.69 times.
DLJ compared these multiples with the corresponding multiples for the Merger,
valuing the Exchange Ratio based on Banc One's closing price as of March 25,
1994. In calculating the multiples for the Merger, DLJ used the last sale
price of MID STATES Common Stock known to MID STATES management prior to
announcement of the Merger Agreement, EPS for the year ended December 31, 1993,
and book value per share as of December 31, 1993. This analysis indicated that
the value of the Exchange Ratio represented multiples of MID STATES' market
price per share, EPS and book value per share of 2.21 times, 14.5 times and
1.47 times, respectively.
No company or transaction used in the above analyses as a comparison is
identical to MID STATES, BANC ONE or the Merger. Accordingly, an analysis of
the results of the foregoing is not mathematical; rather, it involves complex
considerations and judgments concerning differences in financial and operating
characteristics of the companies and other facts that could affect the public
trading value of the companies to which they are being compared.
In connection with its written opinion dated as of , 1994, DLJ
performed procedures to update certain of its analyses and reviewed the
assumptions on which such analyses were based and the factors considered in
connection therewith.
Although the summary set forth above does not purport to be a complete
description of the analyses performed by DLJ, the material analyses performed
by DLJ in rendering its opinion have been summarized above. However, the
preparation of a fairness opinion is not necessarily susceptible to partial
analysis or summary description. DLJ believes that its analyses and the
summary set forth above must be considered as a whole and that selecting
portions of its analyses, without considering all factors and analyses, would
create an incomplete view of the process underlying the analyses by which DLJ
reached its opinions. In addition, DLJ may have given various analyses more or
less weight than other analyses, but no analysis was given materially more
weight than any other analysis. Also, DLJ may have deemed various assumptions
more or less probable that other assumptions, so that the ranges of valuations
resulting from any particular analysis described above should not be taken to
be DLJ's view of the actual value of MID STATES or the combined company.
In performing its analyses, DLJ made numerous assumptions with respect to
industry performance, general business and economic conditions and other
matters, many of which are beyond the control of MID STATES and BANC ONE. The
analyses performed by DLJ are not necessarily indicative of actual value or
actual future results, which may be significantly more or less favorable than
suggested by such analyses. Such analyses were prepared solely as part of
DLJ's analysis of the fairness, from a financial point of view, of the Exchange
Ratio. The analyses do not purport to be appraisals or to reflect the prices
at which a company might actually be sold or the prices at which any securities
may trade at the present time or at any time in the future. In addition, as
described above, DLJ's opinion to the MID STATES Board was one of many factors
taken into consideration by the MID STATES Board in making its determination to
approve the Merger Agreement.
Pursuant to the terms of a letter agreement dated November 6, 1992 (the
"Engagement Letter"), for DLJ's services in connection with the
Merger,including the rendering of its original fairness opinion, MID STATES
(i) has paid DLJ $175,000, and (ii) has agreed to pay DLJ an amount equal to
1.0% of the first $34 million aggregate amount of consideration received by MID
STATES' shareholders (treating any options, warrants or other rights of
conversion as outstanding), plus 5.0% of the aggregate amount received by MID
STATES' shareholders in excess of $34 million and an additional 5.0% of the
aggregate amount received in excess of $37 million, less the amount paid by MID
STATES pursuant to clause (i) above. Mid States has also agreed to pay DLJ
$150,000 for its second fairness opinion (Exhibit A hereto); such amount is not
offset against the fee described in clause (ii) above. Because the major
portion of the aggregate consideration to be received by MID STATES'
shareholders is to be paid in the form of securities, the Engagement Letter
provides that the value of such securities, for purposes of calculating the fee
payable to DLJ, will be determined by the last sale price for such securities
on the last trading day thereof prior to consummation of the Merger. Such fee
shall be payable in cash upon consummation of the Merger. MID STATES has also
agreed to reimburse DLJ for all reasonable out-of-pocket expenses, including
reasonable fees and disbursements of legal counsel, and has agreed to indemnify
DLJ against certain liabilities. The DLJ fee is an obligation of MID STATES,
which is payable upon the consummation of the Merger, and will have no impact
on the consideration to be received by each MID STATES shareholder.
DLJ may, in the ordinary course of its business, trade securities of MID STATES
and BANC ONE for its own account or for the accounts of customers and thus may
hold long or short positions in such securities at any time.
Opinion of The Chicago Corporation
The Chicago Corporation ("TCC") has delivered its written opinion to MID STATES
Board of Directors that, based upon and subject to the various considerations
set forth in the opinion dated , 1994, the Exchange Ratio
being received by MID STATES shareholders in the merger is fair from a
financial point of view to MID STATES' shareholders as of the date of its
opinion. The Board of Directors has carefully and thoroughly reviewed the
materials and presentations of TCC and has made inquiries of TCC personnel as
to the methodology and the assumptions utilized in its analysis. No
limitations were imposed by MID STATES' Board of Directors upon TCC with
respect to the investigations made or procedures followed by it in rendering
its opinion.
The full text of TCC's opinion, which sets forth assumptions made, matters
considered and limitations on the review undertaken, is attached hereto as
Exhibit B. MID STATES shareholders are urged to read the opinion in its
entirety.
TCC's opinion is directed only to the Exchange Ratio to be received in the
merger and does not constitute a recommendation to any MID STATES shareholder
as to how such shareholder should vote at the Special Meeting. The summary of
TCC's opinion set forth in this Prospectus and Proxy Statement is qualified in
its entirety by reference to the full text of such opinion attached hereto as
Exhibit B.
MID STATES retained TCC as a financial advisor on the basis of the firm's
reputation, experience and familiarity with the banking industry and with
merger and acquisition transactions. As part of its investment banking
business, TCC is regularly engaged in the valuation of businesses in connection
with mergers and acquisitions, negotiated underwritings, secondary distribution
of listed and unlisted securities, private placements and valuations for
corporate and other purposes.
During the course of its engagement, and as a basis for arriving at its
opinion, TCC reviewed and analyzed material bearing upon the financial and
operating condition of MID STATES and BANC ONE and material prepared in
connection with the merger, as follows: (i) the Merger Agreement, as amended;
(ii) publicly available information concerning MID STATES and BANC ONE
including among other things annual reports on form 10-KSB and 10-K,
respectively, for each of the last five fiscal years ended; (iii) the nature
and terms of recent sale and merger transactions involving financial
institutions that TCC considered reasonably similar to MID STATES and BANC ONE
in size, financial character, operating character, historical performance and
geographic market; (iv) historical and current market data for MID STATES
Common Stock and BANC ONE Common Stock and financial and other information
provided to TCC by management of MID STATES and BANC ONE, and (v) the
Registration Statement and this Prospectus and Proxy Statement. These analyses
are discussed in more detail below. In addition, TCC conducted meetings with
members of senior management of MID STATES and BANC ONE for the purpose of
reviewing the future prospects of MID STATES and BANC ONE. TCC evaluated the
pro forma ownership of BANC ONE Common Stock by MID STATES shareholders,
relative to the pro forma contribution of MID STATES' assets, liabilities,
equity and earnings of the proposed combined company. TCC also took into
account its experience in other transactions, as well as its knowledge of the
banking industry and its general experience in securities valuations. In
rendering its opinion, TCC assumed without independent verification, the
accuracy and completeness of the financial and other information and
representations provided to it by MID STATES and BANC ONE.
The following is a summary of all material terms considered and the analyses
performed by TCC in rendering its opinion during the course of its engagement
in connection with its , 1994 opinion.
Net Present Value Analysis. TCC prepared a net present value analysis which
indicated theoretical values for MID STATES based on return on average assets
ranging between 1.00% and 1.50% and asset growth rates ranging between 2.00%
and 10.00%. The results of this analysis indicated a range of theoretical
values for MID STATES between $68.05 per share (1.00% return on average assets;
2.00% asset growth rate) and $138.52 per share (1.50% return on average assets;
10.00% asset growth rate). At a return on average assets ratio of 1.10%, which
approximated MID STATES historical performance, theoretical values ranged from
$74.85 per share (2.00% asset growth rate) to $101.58 per share (10.00% asset
growth rate). At an asset growth rate of 4.00%, which approximated MID STATES'
historical performance, theoretical values ranged from $73.55 per share (1.00%
return on average assets) to $110.32 per share (1.50% return on average
assets).
Contribution Analysis. TCC prepared a contribution analysis showing the
percentages of assets, deposits, common equity, and 1992 and 1993 net income
and estimated 1994 and 1995 net income contributed to the combined company on a
pro forma basis by MID STATES and BANC ONE, and compared these percentages to
the pro forma ownership of BANC ONE. This analysis showed that MID STATES, as
of December 31, 1993, would contribute 0.24% of pro forma consolidated total
assets, 0.27% of deposits, 0.29% of common equity, 0.23% of 1992 and 0.18% of
1993 net income and 0.19% of estimated 1994 and 0.18% estimated 1995 net
income. Based on the BANC ONE offer, shareholders of MID STATES would own
approximately 0.24% of the pro forma common shares outstanding of BANC ONE.
Comparable Transaction Analysis. TCC reviewed selected comparable merger and
acquisition transactions. The following merger transactions were reviewed
based on publicly available data (the acquiror is named first and underlined,
followed by the seller):
AMCORE Financial, Inc., First State Bancorp of Princeton; First Banks,
Inc., First FSB of Proviso Township; Mercantile Bancorporation, Inc., Mount
Vernon Bancorp; CNB Bancshares, Inc., South Central Illinois Bancorp; Old
Kent Financial Corporation, University Financial Corporation; Old National
Bancorp, Palmer Bancorp, Inc.; BANC ONE Corporation, Jefferson Bancorp,
Inc.; AMCORE Financial, Inc., Dixon Bancorp, Inc.; Mercantile
Bancorporation, Inc., Old National Bancshares; Old National Bancorp, SBT
Bancorp, Inc.; and AMCORE Financial, Inc., Central of Illinois, Inc.
Transactions were selected on the basis of comparability of absolute
transaction value and the perceived comparability of the markets served by
the acquired institutions to those of MID STATES. For the comparable
transactions, the multiple of price to trailing 12 months earnings ranged
from 8.2 to 22.5 with an average of 13.0. At March 25, 1994, the BANC ONE
proposed purchase price represented a multiple of price to trailing 12
months earnings of 14.5. For the comparable transactions, the multiple of
purchase price to book value range from 0.95 to 1.95 with an average of
1.43. The BANC ONE offer to MID STATES represented a multiple of price to
December 31, 1993 book value of 1.47.
Financial Implications to MID STATES Shareholders. TCC prepared an analysis of
the financial implications of the BANC ONE offer to a MID STATES shareholder.
This analysis indicated that on a pro forma equivalent basis a shareholder of
MID STATES would achieve an increase in earnings per share, a decrease in per
share dividends and an increase in book value per share as a result of the
consummation of the merger, assuming a dividend payout ratio significantly
higher than MID STATES' historical payout ratio.
Another analysis of the financial implications of the BANC ONE offer kept MID
STATES' dividend payout ratio in line with historical dividend payouts. This
analysis indicated that on a pro forma equivalent basis a shareholder of MID
STATES would achieve an increase in earnings per share, an increase in
dividends per share and a decrease in book value per share.
Comparative Shareholder Returns. TCC presented an analysis of comparative
theoretical shareholder returns for several scenarios, including MID STATES
remaining independent, MID STATES being acquired in 1994 and MID STATES being
acquired in 1997. This analysis, which was based on the net present value of
projected dividend streams and projected 1997 common stock valuations (using
current price-to-trailing twelve month earnings multiples), indicated total
shareholders returns of 11.4% for MID STATES remaining independent, 31.7% for
the merger in 1997 and 38.2% based on the acceptance of an offer in 1994. TCC
also prepared an analysis of the possible pricing of a merger transaction with
certain other Midwest-based bank holding companies using estimated 1994 net
income for MID STATES and stock prices for selected companies and assuming no
earnings-per-share dilution for the buyer. The holding companies reviewed
included: AMCORE Financial, Inc.; BANC ONE; Commerce Bancshares, Inc.; First
Bank System, Inc.; First Midwest Bancorp; First of America Bank Corp.;
Firstbank of Illinois Co.; Firstar Corporation; Hawkeye Bancorporation; Magna
Group, Inc.; Mercantile Bancorporation, Inc.; Northwest Illinois Bancorp; and
Norwest Corporation.
Given the assumptions, the analysis indicated that these companies could pay a
high of $107.28 per share, a low of $66.12 per share and an average price of
$81.72 per share for all of the shares of MID STATES.
A second analysis was conducted under the aforementioned methodology with the
1994 net income of MID STATES to include a tax-effected 15% reduction in
operating expenses. Under that assumption the previously listed companies
could pay a high of $131.87 per share, a low of $81.27 per share and an average
price of $100.45 per share for all the shares of MID STATES.
Comparable Company Analysis. TCC compared the market price, market-to-book
value and price-to-earnings multiples of BANC ONE Common Stock with the
individual market multiples and averages of the following selected comparable
companies which it deemed to be reasonably similar to BANC ONE in size,
financial character, operating character, historical performance and geographic
market: BANC ONE; BankAmerica Corporation; Boatmen's Bancshares, Inc.;
Citicorp; Comerica Incorporated; First Bank System, Inc.; First Chicago
Corporation; First Interstate Bancorp; First of America Bank Corp.; First Union
Corporation; Fleet Financial Group; KeyCorp; Mellon Bank Corporation; NBD
Bancorp, Inc.; National City Corporation; NationsBank Corporation; Norwest
Corporation; and PNC Bank Corp. This analysis indicated that BANC ONE Common
Stock sold at a price of 1.87 times the December 31, 1993 book value and the
comparables sold at an average price of 1.56 times book value. BANC ONE's
Common Stock sold at a multiple of price to trailing 12 months earnings of
11.2, while the comparable group average price-to-earnings multiple was 10.0.
The summary of TCC's analysis set forth above is a fair summary thereof but
does not purport to be a complete description of the presentations by TCC to
the MID STATES Board of Directors. TCC believes that its analysis and the
summary set forth above must be considered as a whole and that selecting
portions of analysis, without considering all factors and analyses, could
create an incomplete view of the process by which a fairness opinion is
rendered. In connection with its analyses, TCC assumed that there would be no
material adverse change in general economic, business, market financial and
regulatory conditions, all of which are beyond the control of BANC ONE and MID
STATES. The analyses performed by TCC are not necessarily indicative of actual
values of future results, which may be significantly more or less favorable
than suggested by such analyses.
Fees and Indemnification. The fees due to TCC under the Agreement between TCC
and MID STATES (the "TCC Agreement") were payable by MID STATES as follows:
$25,000 at the date of execution of TCC Agreement and $25,000 upon delivery of
a verbal opinion conclusions and $50,000 at the time a written opinion is
delivered for the use with this Prospectus and Proxy Statement. The TCC fee
will have no impact on the consideration to be received by each MID STATES'
shareholder.
In addition to such fees, MID STATES has agreed to reimburse TCC for all
reasonable out-of-pocket expenses and will pay to TCC a fee of $1,500 per day
for preparation and court appearances with regard to the fairness opinion. MID
STATES has also agreed to indemnify TCC, its officers, directors, agents,
employees and certain controlling persons from and against any losses, claims,
damages and liabilities in connection with or arising out of the transactions
or services referred to in TCC Agreement. This indemnification is subject to
certain conditions and procedures set forth in an indemnification agreement
between MID STATES and TCC.
Interest of Certain Persons in the Merger
After consummation of the Merger, MID STATES will be merged into Banc One
Illinois and the separate corporate existence of MID STATES will cease. It is
anticipated that Mr. Thomas H. Robinson, President, CEO and a director of MID
STATES and First National, will join the Board of Directors of Banc One
Illinois. Following the Merger, First National will operate under the name
Bank One, Quad Cities, N.A. and the present directors, officers and employees
of First National will continue in the same capacities and one or more officers
of Banc One Illinois may be added to the Board.
MID STATES and First National entered into an employment agreement with
Mr. Robinson on June 15, 1992 for the purpose of memorializing the continuation
of the then effective employment terms and practices and to provide
Mr. Robinson with a three-year employment guarantee in the event of a change in
control of MID STATES. The employment agreement was amended and restated as of
May 17, 1993 to clarify the terms of the agreement and certain procedural
matters thereunder and for the joint obligation of both MID STATES and First
National for the compensation and benefits thereunder. Specifically, the
agreement provides that Mr. Robinson's employment will be continued for a
period of three years following a change in control on the terms at least as
favorable as those in effect immediately prior to the change in control. If
Banc One Illinois or First National terminates Mr. Robinson's employment during
such three-year period, or if Mr. Robinson should resign during such period for
"good reason" (defined to mean a significant change in Mr. Robinson's authority
or duties, a reduction in the compensation or benefits required under the
agreement, or a reasonable determination by him that he is unable to exercise
such authorities or responsibilities as a result of the change in control),
then Banc One Illinois and First National will be obligated to continue to pay
Mr. Robinson his current base salary and the value of the incentive and
retirement compensation to which he would have been entitled during the
remainder of the three-year term and to continue to provide all medical, life
and other insurance protections for such period. In the event that the payment
of such salary and benefits results in the imposition upon Mr. Robinson of the
excise tax applicable to certain excess parachute payments under the Code, the
agreement provides that Mr. Robinson will be entitled to a supplemental payment
equal to such excise tax, and all taxes imposed on such supplemental payment.
The Merger will constitute a change in control for purposes of the agreement
and Banc One Illinois has agreed to assume the obligations of MID STATES under
the agreement following the Merger. Mr. Robinson's annual base salary as of
October 1, 1993 is $125,000.
Although it is the intent of MID STATES and BANC ONE to continue to provide
employment opportunities for employees of MID STATES and First National
following the Merger, the Board of Directors of MID STATES, with BANC ONE's
consent, has adopted a Separation Assistance Plan to provide separation pay to
employees of MID STATES or First National in the event that a reduction in the
work force of MID STATES or First National occurs within one year after the
Merger. Under the Separation Assistance Plan, Banc One Illinois and First
National will first attempt to provide employment alternatives for within the
BANC ONE system for employees affected by the discontinuation of job positions
or functions. If such alternatives are not possible, then the employee whose
job position or function was discontinued shall be entitled to separation pay
equal to one week's pay for each full year of service with MID STATES or First
National, subject to a maximum of 26 weeks. Any employee who is a vice
president shall be entitled to 26 weeks of separation pay, regardless of the
employee's years of service. Mr. Robinson is not eligible to receive a benefit
under the Separation Assistance Plan.
Effect on Employee Benefits
Pursuant to the Merger Agreement, BANC ONE covenants to comply with its
agreements with respect to certain employee benefits sat forth in a letter
agreement dated May 24, 1993 between BANC ONE and MID STATES (the "Benefits
Agreement").
The Benefits Agreement provides that, upon the Merger or on such subsequent
date as BANC ONE shall determine, BANC ONE will cause coverage under the
various employee benefit plans and programs maintained by BANC ONE to be
extended to the employees of MID STATES and First National. As a result, such
employees will participate in, among other plans, the BANC ONE Retirement Plan,
Supplemental Employees Retirement Plan, Profit Sharing and 401(k) Plan,
Employee Stock Purchase Plan, and medical and life insurance programs. The
service of such employees with MID STATES and First National will be recognized
under the BANC ONE plans for purposes of determining eligibility for
participation and vesting of benefits under the BANC ONE plans; service for
purposes of measuring benefits earned under the BANC ONE plans will be measured
from the date of the Merger. The employee benefit plans maintained by MID
STATES and First National will be terminated or merged into the BANC ONE plans
when the BANC ONE plans are extended to the MID STATES and First National
employees, subject to the inclusion under the BANC ONE plans of certain
benefits accrued during the calendar year in which the transition to the BANC
ONE plans occur.
Conditions to the Merger; Termination
Consummation of the Merger is subject to satisfaction of a number of
conditions, including:
(1) the receipt of all necessary approvals of the acquisition by governmental
agencies and authorities, including the Federal Reserve and the Illinois
Commissioner, and each of such approvals shall remain in full force and
effect at the Effective Time;
(2) there being no change in the consolidated financial condition, aggregate
net assets, shareholders' equity, business or operating results of MID
STATES and First National, taken as a whole, or BANC ONE and its
subsidiaries, taken as a whole, from March 31, 1993 to the Effective Time,
that has had a material adverse effect;
(3) compliance by MID STATES, BANC ONE and Banc One Illinois with their
respective covenants and confirmation of their respective representations
and warranties as set forth in the Merger Agreement, including the
agreement of MID STATES that, except with the approval of BANC ONE or as
otherwise permitted by the Merger Agreement, it will not
(a) from March 31, 1993 to the Effective Time, pay any cash dividends;
(b) effect any changes in connection with its equity capitalization; or
(c) conduct its banking operations other than in the ordinary course of
business;
(4) approval of the Merger Agreement and the Merger by the requisite vote of
shareholders of MID STATES Common Stock (see "MERGER--General" and "VOTING
AND MANAGEMENT INFORMATION--Voting");
(5) receipt by MID STATES and BANC ONE of the legal opinion of MID STATES'
counsel regarding the federal income tax consequences referred to under
the caption "MERGER--Federal Income Tax Consequences";
(6) receipt by BANC ONE of an opinion from MID STATES' counsel and receipt by
MID STATES of an opinion from counsel for BANC ONE and Banc One Illinois,
which opinions are to be in the general form of those annexed to the
Merger Agreement;
(7) satisfaction by BANC ONE and MID STATES of the respective earnings tests
set forth in the Merger Agreement or as otherwise agreed between the
parties;
(8) fractional share interests in BANC ONE Common Stock to be paid to former
holders of MID STATES Common Stock in cash in the exchange (see
"MERGER-Fractional Shares") and shares of BANC ONE Common Stock to which
holders of MID STATES Common Stock would have been entitled as of the
consummation of the Merger, but who have taken steps to perfect their
rights as dissenting shareholders pursuant to applicable law, shall not
exceed 10% of the maximum aggregate number of shares of BANC ONE Common
Stock which could be issued as a result of the Merger;
(9) the shares of BANC ONE Common Stock to be issued in exchange for MID
STATES Common Stock shall have been listed on the NYSE;
(10) receipt by BANC ONE of the written opinion of Coopers & Lybrand,
independent certified public accountants, that the transaction
contemplated by the Merger Agreement may be properly accounted for as a
pooling-of-interests;
(11) the holders of all credit agreements on which MID STATES or any SUBSIDIARY
is the maker, issuer or guarantor and which contain provisions which make
the acquisition of MID STATES by or merger into another entity a condition
of default or acceleration, shall have provided BANC ONE with a written
waiver of all such provisions;
(12) the total number of shares of MID STATES Common Stock issued and
outstanding shall not be more than 311,560 shares; and
(13) receipt by MID STATES of opinions from each of DLJ and
TCC to the effect that, in the opinion of such firm , the
consideration to be received as a result of the Merger is fair from a
financial point of view to the holders of MID STATES Common Stock and such
opinions shall not have been withdrawn prior to the Effective Time.
The provisions of the Merger Agreement, including the foregoing conditions, may
be waived at any time by the party which is entitled to the benefits thereof.
However, after the shareholders of MID STATES have approved the Merger
Agreement, MID STATES may only amend the Merger Agreement if, in the opinion of
MID STATES' Board of Directors, such amendment will not have a material adverse
effect on the benefits intended under the Merger Agreement for the shareholders
of MID STATES.
The Merger Agreement may be terminated at any time prior to the Effective Time
of the Merger, whether before or after approval by the shareholders of MID
STATES, by written notice from BANC ONE to MID STATES, or from MID STATES to
BANC ONE, as the case may be, upon the occurrence of any of the following: (i)
if any material condition to either party's obligations under the Merger
Agreement is not satisfied or waived at the time or times contemplated thereby
(each party's right to terminate under this clause (i) shall relate only to
conditions to that party's obligations); (ii) in the event of a material breach
by a party of any representation, warranty, condition or agreement contained in
the Merger Agreement that is not cured within 30 days of the giving of notice
to such party by the other party; or (iii) if the Merger shall not have been
consummated on or before July 1, 1994. The Merger Agreement also may be
terminated, and the Merger thereby abandoned, by the mutual consent of the
Boards of Directors of MID STATES and BANC ONE at any time prior to the
effective date of the Merger.
MID STATES, by action of its Board of Directors, may elect to terminate the
Merger Agreement, whether before or after approval of the Merger by the
shareholders of MID STATES, by giving three (3) days written notice of such
election to BANC ONE.
If the Merger is not consummated other than by reason of a willful breach of
any party to the Merger Agreement, MID STATES, BANC ONE and Banc One Illinois
will each pay all of its own expenses incurred incident to such transaction,
except for printing expenses which will be paid by BANC ONE. BANC ONE has
also agreed to reimburse MID STATES for one-half of all legal and accounting
fees and the expenses and fees of DLJ and TCC incurred in connection with the
Merger after January 25, 1994.
Federal Income Tax Consequences
The following is a summary of certain material U.S. federal income tax
consequences of the Merger, including certain consequences to holders of MID
STATES Common Stock who are citizens or residents of the United States and who
hold their shares as capital assets. It does not discuss all tax consequences
that may be relevant to MID STATES shareholders subject to special federal
income tax treatment (such as insurance companies, dealers in securities,
certain retirement plans, financial institutions, tax exempt organizations or
foreign persons) or to MID STATES shareholders who acquired their shares of MID
STATES Common Stock pursuant to the exercise of employee stock options or
otherwise as compensation. The summary does not address the state, local or
foreign tax consequences of the Merger, if any.
As a condition to the closing, MID STATES and BANC ONE received the
opinion of Vedder, Price, Kaufman & Kammholz, dated April 20, 1994
that, for federal income tax purposes:
(1) The Merger will constitute a reorganization within the meaning of
Section 368(a)(1)(A) and Section 368(a)(2)(D) of the Internal Revenue Code
of 1986, as amended;
(2) No gain or loss will be recognized by Banc One Illinois or MID STATES by
reason of the Merger;
(3) No gain or loss will be recognized by the shareholders of MID STATES on
the exchange of their shares of MID STATES Common Stock for shares of BANC
ONE Common Stock, except as described below with respect to cash received
pursuant to the exercise of statutory dissenters' rights or in lieu of
fractional share interests;
(4) The tax basis of the BANC ONE Common Stock (including fractional share
interests) received by holders of MID STATES Common Stock will be the same
as the tax basis of the MID STATES Common Stock surrendered in exchange
therefor; and
(5) The holding period of the BANC ONE Common Stock received by a holder of
MID STATES Common Stock will include the period for which the MID STATES
Common Stock exchanged therefor was held, provided the exchanged MID
STATES Common Stock was held as a capital asset by such holder on the date
of the exchange.
A MID STATES shareholder who receives cash in lieu of a fractional share
interest in BANC ONE Common Stock will be treated as having received the cash
in redemption of the fractional share interest. The receipt of cash in lieu of
a fractional share interest should generally result in capital gain or loss to
the holder in an amount equal to the difference between the amount of cash
received and the portion of the holder's tax basis in the MID STATES Common
Stock allocable to the fractional share interest. Such capital gain or loss
will be long-term capital gain or loss if the holder's holding period for the
BANC ONE Common Stock received, determined as set forth above, is longer than
one year.
A dissenting shareholder who receives cash in exchange for shares of MID STATES
Common Stock will generally recognize capital gain or loss equal to the
difference between the amount of cash received and the holder's tax basis in
the shares exchanged. Such capital gain or loss will be long-term capital gain
or loss if the holder has held the shares for more than one year as of the
Effective Time of the Merger.
No rulings from the Internal Revenue Service have been or will be sought by
BANC ONE or MID STATES with respect to the federal income tax consequences of
the Merger. The opinion of counsel to be obtained by BANC ONE and MID STATES
will not be binding upon the Internal Revenue Service, nor will it preclude the
Service from taking positions contrary to it. No rulings or opinions with
respect to state or local tax consequences have been or will be sought by BANC
ONE or MID STATES.
THE INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL INFORMATION
ONLY AND IS BASED ON THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (AND
AUTHORITIES THEREUNDER) AS IN EFFECT ON THE DATE OF THIS PROSPECTUS AND PROXY
STATEMENT, WITHOUT CONSIDERATION OF THE PARTICULAR FACTS OR CIRCUMSTANCES OF
ANY SHAREHOLDER. SHAREHOLDERS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS
WITH RESPECT TO THE FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER IN THEIR
PARTICULAR SITUATIONS, AS WELL AS THE CONSEQUENCES UNDER ANY APPLICABLE STATE,
LOCAL OR FOREIGN TAX LAWS.
Conversion of Shares and Exchange of Certificates
Upon consummation of the Merger, the outstanding shares of MID STATES Common
Stock will be converted into shares of BANC ONE Common Stock at the Exchange
Ratio calculated as described under the caption "MERGER--Exchange
Ratio ." Except in the event that either MID STATES or BANC ONE shall
declare a stock dividend or distribution upon or subdivide, split up,
reclassify or combine its respective Common Stock or declare a dividend, or
make a distribution, on its respective Common Stock in any security convertible
into such Common Stock prior to the time the Merger becomes effective, no
further adjustments will be made in the Exchange Ratio . However, in
the event of such a transaction, appropriate adjustment will be made in the
Exchange Ratio . The Exchange Ratio has been adjusted to
reflect the effect of all stock splits and dividends.
As soon as practicable after the Merger becomes effective, instructions and
forms will be furnished to the shareholders of MID STATES for use in exchanging
their MID STATES share certificates for certificates of BANC ONE Common Stock.
If any certificate for shares of BANC ONE Common Stock is to be issued in a
name other than that in which the certificate for shares of MID STATES Common
Stock surrendered for exchange is registered, the certificate so surrendered
must be properly endorsed or otherwise be in proper form for transfer and the
person requesting such exchange must pay to BANC ONE or its transfer agent any
applicable transfer or other taxes required by reason of the issuance of the
certificate.
Until so surrendered, certificates formerly representing shares of MID STATES
Common Stock will be deemed for all purposes to evidence ownership of the
number of shares of BANC ONE Common Stock into which such shares have been
converted. Dividends and other distributions, if any, that become payable on
BANC ONE Common Stock pending exchange of certificates representing shares of
MID STATES Common Stock will be retained by BANC ONE until surrender of such
certificates, at which time such dividends and distributions will be paid,
without interest. In addition, after the Effective Time the holders of
certificates formerly representing shares of MID STATES Common Stock shall
cease to have rights with respect to such shares (except such rights, if any,
as holders of certificates representing MID STATES Common Stock may have as
dissenting shareholders), and, except as aforesaid, their sole rights shall be
to exchange such certificates for shares of BANC ONE Common Stock in accordance
with the Merger Agreement.
Fractional Shares
No fractional shares of BANC ONE Common Stock will be exchanged for shares of
MID STATES Common Stock. In lieu thereof, each shareholder of MID STATES
having a fractional interest resulting from the exchange of MID STATES Common
Stock for BANC ONE Common Stock will be paid by BANC ONE an amount in cash
equal to the value of such fractional interest based upon the closing price of
BANC ONE Common Stock on the NYSE on the fifth day immediately preceding the
day on which the merger is consummated during which shares of BANC ONE Common
Stock are traded on the NYSE as reported in The Wall Street Journal for NYSE
Composite Transactions.
Resales by Affiliates
The shares of BANC ONE Common Stock issuable to MID STATES shareholders upon
consummation of the Merger have been registered under the Securities Act, but
such registration does not cover resales by affiliates of MID STATES
("Affiliates"). BANC ONE Common Stock received and beneficially owned by those
MID STATES shareholders who are deemed to be Affiliates may be resold without
registration as provided for by Rule 145 under the Securities Act, or as
otherwise permitted. The term Affiliate is defined to include any person who,
directly or indirectly, controls, or is controlled by, or is under common
control with MID STATES at the time the Merger Agreement is submitted for
approval by a vote of the shareholders of MID STATES Common Stock. Each
Affiliate who desires to resell the BANC ONE Common Stock received in the
Merger must sell such BANC ONE Common Stock either (i) pursuant to an effective
registration statement under the Securities Act, (ii) in accordance with the
applicable provisions of Rule 145 under the Securities Act or (iii) in a
transaction which, in the opinion of counsel for such Affiliate or as described
in a "no-action" or interpretive letter from the Staff of the Commission, in
each case reasonably satisfactory in form and substance to BANC ONE, states
that such resale is exempt from the registration requirements of the Securities
Act.
Rule 145(d) requires that persons deemed to be Affiliates resell their BANC ONE
Common Stock pursuant to certain of the requirements of Rule 144 under the
Securities Act if such BANC ONE Common Stock is sold within the first two years
after the receipt thereof. After two years, if such person is not an affiliate
of BANC ONE and BANC ONE is current in the filing of its periodic securities
law reports, a former Affiliate of MID STATES may freely resell the BANC ONE
Common Stock received in the Merger without limitation. After three years from
the issuance of the BANC ONE Common Stock, if such person is not an affiliate
of BANC ONE at the time of sale or for at least three months prior to such
sale, such person may freely resell such BANC ONE Common Stock, without
limitation, regardless of the status of BANC ONE's periodic securities law
reports.
MID STATES has agreed to provide BANC ONE with a list of those persons who may
be deemed to be Affiliates at the time of the Special Meeting. MID STATES will
use its best efforts to cause each such person to deliver to BANC ONE prior to
the Effective Time a written agreement to the effect that no sale will be made
of any shares of BANC ONE Common Stock received in the Merger by an Affiliate
of MID STATES except (i) in accordance with the Securities Act and (ii) if, as
it expects to do, BANC ONE utilizes pooling-of-interests accounting in
accounting for the Merger, until such time as BANC ONE shall first publish the
financial results of at least 30 days of post-merger combined operations of MID
STATES and BANC ONE, provided that BANC ONE shall publish such results not
later than four months from the Effective Time. The certificates of BANC ONE
Common Stock issued to Affiliates of MID STATES in the Merger may contain an
appropriate restrictive legend, and appropriate stop transfer orders may be
given to the transfer agent for such certificates.
Accounting Treatment
BANC ONE expects to account for the acquisition of MID STATES as a
pooling-of-interests.
COMPARATIVE RIGHTS OF SHAREHOLDERS
Description of BANC ONE Stock
General. The authorized capital stock of BANC ONE consists of 600,000,000
shares of BANC ONE Common Stock and 35,000,000 shares of Preferred Stock,
without par value ("Preferred Stock"), divided into 10,000,000 shares of Class
A Preferred Stock, 1,000,000 shares of Class B Convertible Preferred Stock
("Class B Preferred Stock") and 24,000,000 shares of Class C Preferred Stock of
which the $3.50 Cumulative Convertible Preferred Stock constitutes a series
("Series C Preferred Stock"). As of December 31, 1993, there were issued and
outstanding 5,000,000 shares of Series C Preferred Stock and 380,687,187 shares
of BANC ONE Common Stock.
The following summary of the terms of BANC ONE's capital stock does not purport
to be complete and is qualified in its entirety by reference to the applicable
provisions of the Ohio General Corporation Law and BANC ONE's Articles.
Common Stock. Holders of BANC ONE Common Stock are entitled to receive
dividends out of funds legally available therefor as and if declared by the
Board of Directors, provided that, so long as any shares of Preferred Stock are
outstanding, no dividends (other than dividends payable in BANC ONE Common
Stock) or other distributions (including redemptions and purchases) may be made
with respect to the BANC ONE Common Stock unless full cumulative dividends on
the shares of Preferred Stock have been paid.
Holders of shares of BANC ONE Common Stock are entitled to one vote for each
share for the election of directors and on all other matters. Holders of
BANC ONE Common Stock vote together as a class with holders of Class B
Preferred Stock. Generally, holders of Series C Preferred Stock have no voting
rights.
The issued and outstanding shares of BANC ONE Common Stock are fully paid and
nonassessable. The holders of BANC ONE Common Stock are not entitled to
preemptive rights or conversion or redemption rights. The BANC ONE Common
Stock does not have cumulative voting rights in the election of directors.
In the event of the voluntary or involuntary dissolution, liquidation or
winding up of BANC ONE, holders of BANC ONE Common Stock will be entitled to
receive, pro rata, after satisfaction in full of the prior rights of creditors
(including holders of BANC ONE's indebtedness) and holders of Preferred Stock,
all the remaining assets of BANC ONE available for distribution.
Preferred Stock. The Board of Directors has the authority to issue each class
of Preferred Stock in one or more series and to fix the designations, number of
shares, dividends, redemption rights, sinking fund requirements, liquidation
prices, conversion rights and other rights, qualifications, limitations or
restrictions thereon (except voting rights) as the Board of Directors may from
time to time be permitted by law to fix or change.
Currently, there are outstanding shares of Series C Preferred Stock. Holders
of Series C Preferred Stock are entitled to receive out of funds legally
available therefor cumulative cash dividends at the annual rate of $3.50 per
share payable quarterly on the last day of March, June, September and December
in each year.
In the event that full cumulative dividends on outstanding shares of Series C
Preferred Stock have not been paid, no dividends may be declared or paid on,
and no amounts may be set aside or applied to the redemption or purchase of,
any shares of BANC ONE Common Stock or any other shares of capital stock of
BANC ONE ranking junior to shares of Series C Preferred Stock.
Upon the voluntary or involuntary dissolution, liquidation or winding up of
BANC ONE, holders of Series C Preferred Stock are entitled to receive a
preferential distribution of $50 per share plus accrued and unpaid dividends,
if any.
Generally holders of shares of Series C Preferred Stock have no voting rights.
The approval of a majority of the outstanding shares of Series C Preferred
Stock voting together as a class is required in order to amend BANC ONE's
Articles to affect adversely the rights of the holders of the Series C
Preferred Stock or to take any action that would result in the creation of or
an increase in the number of authorized shares senior or superior with respect
to dividends or upon liquidation to the Series C Preferred Stock. Holders of
Series C Preferred Stock also have the right to elect two additional directors
during any period in which dividends on Series C Preferred Stock are
cumulatively in arrears in the amount of six or more full quarterly dividends.
At the option of the holder of any shares of Series C Preferred Stock, such
shares may be converted into shares of BANC ONE Common Stock at the conversion
rate then in effect. The present conversion rate is 1.75360 shares of
BANC ONE Common Stock for each share of Series C Preferred Stock and is
subject to adjustment for stock dividends, subdivisions, splits (the
conversion rate has been adjusted to reflect the 5 shares for 4 shares common
stock split declared by Banc One's Board of Directors on July 20, 1993 and
payable August 31, 1993 to shareholders of record on August 3, 1993) and
combinations and any distribution of rights or warrants to purchase BANC ONE
Common Stock at a price per share less than the BANC ONE Common Stock's then-
current market value.
The issued shares of Series C Preferred Stock may be redeemed, in whole or in
part, by BANC ONE at its election at any time after April 15, 1995, at a
redemption price of $52.10 per share during the period from April 15, 1995, to
but not including March 31, 1996, and thereafter at the redemption prices
during the 12-month periods beginning on March 31 of the years shown below,
plus accrued and unpaid dividends, if any.
Year Redemption Price
1996 . . . . . . . . . . . . . . . . $51.75
1997 . . . . . . . . . . . . . . . . $51.40
1998 . . . . . . . . . . . . . . . . $51.05
1999 . . . . . . . . . . . . . . . . $50.70
2000 . . . . . . . . . . . . . . . . $50.35
2001 and thereafter . . . . . . . . . $50.00
Special Voting Requirements for Certain Transactions
Article Eleventh of BANC ONE's Articles incorporates, to a large extent, the
provisions of the Ohio control share acquisition statute (Section 1701.831 of
the Ohio Revised Code). Article Eleventh sets forth procedures for obtaining
shareholder consent of "control share acquisitions" subject to the right of the
Board of Directors to screen out proposals that do not meet certain standards
set forth in Article Eleventh. Article Eleventh defines a "control share
acquisition" as any acquisition, directly or indirectly, of shares of BANC ONE
which, when added to all other shares of BANC ONE owned or controlled by the
acquiror, would entitle the acquiror, alone or with others, to exercise or
direct the exercise of voting power in BANC ONE in the election of directors
within any of the following ranges of voting power: (a) one-fifth or more but
less than one-third; (b) one-third or more but less than a majority; and (c) a
majority or more. A bank, broker, nominee, trustee, or other person who
acquires shares in the ordinary course of business for the benefit of others in
good faith and not for the purpose of circumventing Article Eleventh shall,
however, be deemed to have voting power only of shares in respect of which such
person would be able to exercise or direct the exercise of votes without
further instruction from others at a meeting of shareholders called under
Article Eleventh. A control share acquisition which meets certain criteria set
forth in Article Eleventh as determined by the Board of Directors must be
presented to a meeting of the shareholders of BANC ONE and approved by the
affirmative vote of both (a) a majority of the voting power represented at the
meeting and (b) a majority of that portion of such voting power excluding any
"interested shares"; that is, those shares held by the acquiring person,
executive officers of BANC ONE and employees of BANC ONE who are also
directors. Article Eleventh may be amended by a vote of 85% of the votes
entitled to be cast by all holders of voting stock.
BANC ONE's Articles also include a "fair price" provision which is designed to
provide reasonable assurances to shareholders that in the event any shareholder
or group of shareholders acquires 20% or more of BANC ONE's voting stock (the
"Acquiror") and then seeks to acquire all or part of the remaining voting stock
through a merger or other transaction which would force a change or termination
of the other shareholders' ownership interests (a "Business Combination"), such
other shareholders must receive consideration at least equivalent to that paid
by the Acquiror in acquiring its 20% stock interest, unless the Business
Combination is approved either (i) by a majority of directors who are unrelated
to the Acquiror or (ii) by the affirmative vote of 75% of all the votes
entitled to be cast by all holders of voting stock and 67% of the votes
entitled to be cast by all holders of voting stock held by shareholders other
than the Acquiror ("Special Shareholder Vote").
This provision operates by requiring that after an Acquiror emerges, any
Business Combination which has the effect of requiring shareholders to
surrender their shares must satisfy one of the following conditions:
(a) Fair Consideration to Shareholders. The terms of the Business
Combination must provide for payment of consideration which is at
least equivalent to the highest price paid to other shareholders by
the Acquiror in acquiring its 20% stock position and must be approved
by shareholders as otherwise required by applicable law; or
(b) Unrelated Director Approval. The Business Combination must be
approved as fair to shareholders by a majority of the directors who
are not affiliated with the Acquiror and who were directors before the
Acquiror acquired its 20% stock position or who were nominated or
elected to succeed such directors by the other unaffiliated directors
("Unrelated Directors") and must be approved by shareholders as
otherwise required by applicable law; or
(c) Special Shareholder Vote. The Business Combination must be approved
by a Special Shareholder Vote.
The Article containing this provision may be amended only by a vote of 85% of
the votes entitled to be cast by all holders of voting stock, unless the
amendment is approved unanimously by the Unrelated Directors, in which case
only majority shareholder approval would be required.
Chapter 1704 of the Ohio Revised Code (the "Ohio Statute") is similar to the
"fair price" provision contained in BANC ONE's Articles. The Ohio Statute
prohibits an "Issuing Public Corporation" from engaging in a "Chapter 1704
Transaction" with an "Interested Shareholder" for a period of three years
following the date on which the person becomes an "Interested Shareholder"
unless, prior to such date, the directors of the "Issuing Public Corporation"
approve either the "Chapter 1704 Transaction" or the acquisition of shares
pursuant to which such person became an "Interested Shareholder." An "Issuing
Public Corporation" is an Ohio corporation with 50 or more shareholders which
has its principal place of business, principal executive offices or substantial
assets within the State of Ohio. BANC ONE is currently an Issuing Public
Corporation. An "Interested Shareholder" is any person who is the beneficial
owner of a sufficient number of shares to allow such person, directly or
indirectly, alone or with others, including affiliates and associates, to
exercise or direct the exercise of 10% of the voting power of the Issuing
Public Corporation. A "Chapter 1704 Transaction" includes any merger,
consolidation, combination or majority share acquisition between or involving
an Issuing Public Corporation and an Interested Shareholder or an affiliate or
associate of an Interested Shareholder. A Chapter 1704 Transaction also
includes certain transfers of property, dividends and issuance or transfers of
shares, from or by an Issuing Public Corporation or a subsidiary of an Issuing
Public Corporation to, with or for the benefit of an Interested Shareholder or
an affiliate or associate of an Interested Shareholder unless such transaction
is in the ordinary course of business of the Issuing Public Corporation on
terms no more favorable to the Interested Shareholder than those acceptable to
third parties as demonstrated by contemporaneous transactions. Finally,
Chapter 1704 Transactions include certain transactions which (i) increase the
proportionate share ownership of an Interested Shareholder, (ii) result in the
adoption of a plan or proposal for the dissolution, winding up of the affairs
or liquidation of the Issuing Public Corporation if such plan is proposed by or
on behalf of the Interested Shareholder, or (iii) pledge or extend the credit
or financial resources of the Issuing Public Corporation to or for the benefit
of the Interested Shareholder.
After the initial three-year moratorium has expired, an Issuing Public
Corporation may engage in a Chapter 1704 Transaction if (i) the acquisition of
shares pursuant to which the person became an Interested Shareholder received
the prior approval of the board of directors of the Issuing Public Corporation,
(ii) the Chapter 1704 Transaction is approved by the affirmative vote of the
holders of shares representing at least a majority of the voting power of the
Issuing Public Corporation and by the holders of at least a majority of voting
shares which are not beneficially owned by an Interested Shareholder or an
affiliate or associate of an Interested Shareholder, or (iii) the Chapter 1704
Transaction meets certain statutory tests designed to ensure that it be
economically fair to all shareholders.
Comparison of BANC ONE Common Stock and MID STATES Common Stock
The rights of shareholders of BANC ONE are governed by BANC ONE's Articles and
Code of Regulations and the applicable provisions of the Ohio law, while the
rights of the shareholders of MID STATES are governed by MID STATES'
Certificate and By-laws and the applicable provisions of the DGCL. If the
holders of MID STATES Common Stock approve the Merger Agreement and the Merger
is subsequently consummated, holders of MID STATES Common Stock will become
holders of BANC ONE Common Stock. The following comparison of the rights of
holders of MID STATES Common Stock and BANC ONE Common Stock is based on
current terms of the governing documents of the respective companies, and on
the current provisions of applicable state law.
The rights of holders of MID STATES Common Stock and holders of BANC ONE Common
Stock are similar in several respects: each shareholder is entitled to one
vote for each share held on all matters submitted to a vote of shareholders
(although holders of MID STATES Common Stock are entitled to exercise
cumulative voting in the election of directors), each shareholder is entitled
to receive pro rata any assets distributed to shareholders upon liquidation,
dissolution or winding up of the affairs of the company (after all creditors
have been satisfied and requisite preferential amounts are paid to the holders
of outstanding preferred stock). Although it is impracticable to note all the
differences between Ohio law and the DGCL generally and all of the differences
between the applicable governing documents of BANC ONE and MID STATES, the
following is intended to be a summary of certain significant differences
between the rights of holders of BANC ONE Common Stock and the rights of
holders of MID STATES Common Stock.
Election and Removal of Directors. MID STATES' directors are elected by
cumulative voting. This means that in an election of directors, holders of MID
STATES Common Stock may give one candidate a number of votes equal to the
number of directors to be elected multiplied by the number of shares owned by
the shareholder, or distribute the number of votes among any number of
candidates. MID STATES' entire Board of Directors or any lesser number may be
removed, with or without cause, by a vote of the holders of the majority of the
shares then entitled to vote at an election of directors, except that no
director may be removed if the votes cast against his removal would be
sufficient to elect such director if voted cumulatively at an election of
directors at which the same total number of votes were cast and the entire
board were then being elected. Cumulative voting makes it more likely that
sizable minority shareholders could elect minority directors even if opposed by
the other shareholders. Cumulative voting is not allowed in the election of
directors of BANC ONE. All of the directors of MID STATES and BANC ONE are
elected by the shareholders each year and may be removed with or without cause
by the shareholders.
Dividends. Under Ohio law, dividends may be paid out of surplus, including
both earned surplus and capital surplus, in cash, property or shares of the
corporation, provided that such dividend payments are not in violation of the
rights of any other class of securities and are not made when the corporation
is insolvent or there is reasonable ground to believe that by such payment it
will be rendered insolvent. A Delaware corporation may pay dividends out of
any surplus and, if it has no surplus, out of any net profits for the fiscal
year in which the dividend was declared or for the preceding fiscal year;
provided that such payment may not be made from such net profit if capital
shall have been reduced by depreciation, losses or otherwise below the amount
of capital represented by all classes of shares having a preference upon the
distribution of assets. The payment of dividends by bank holding companies
also is subject to certain regulatory constraints. Dividends paid by both BANC
ONE and MID STATES are subject to federal income tax to the extent of the
distributing corporation's current and accumulated earnings and profits.
However, it is suggested that in connection with voting on the Merger,
shareholders contact their tax advisors to determine the tax consequences of
the Merger to them.
Supermajority and Fair Price Provisions. MID STATES' Certificate contains
provisions similar to the provisions of BANC ONE's Articles relating to control
share acquisitions and fair price provisions for business combinations. BANC
ONE's Articles contain provisions requiring a supermajority vote for certain
business combinations. See "COMPARATIVE RIGHTS OF SHAREHOLDERS--Special Voting
Requirements for Certain Transactions." Although Delaware law generally
requires the affirmative vote of the holders of a majority of the shares of
each class entitled to vote to approve a merger, consolidation, share exchange
or sale, lease, exchange or other disposition of all or substantially all of
MID STATES' assets, MID STATES' Certificate requires the approval of certain
interested shareholder transactions by not less than 75% of MID STATES'
outstanding shares entitled to vote, unless certain alternative requirements
are satisfied. In addition, in the event of a merger, consolidation or sale of
MID STATES or any subsidiary thereof, with or to a corporation, person or
entity, which owns, directly or indirectly, ten percent or more of the
outstanding shares of MID STATES ("Ten Percent Owner"), each holder of MID
STATES Common Stock who properly opposes such transaction is entitled to
receive a price for his, her or its shares equal to the highest price paid by
such Ten Percent Owner for shares of MID STATES purchased in the two-year
period prior to the consummation of such transaction.
In addition to being subject to the laws of Delaware and Ohio, respectively,
both MID STATES and BANC ONE, as bank holding companies, are subject to various
provisions of federal law with respect to mergers, consolidations and certain
other corporate transactions.
Evaluation of Tender Offers and Business Combinations. In evaluating an
acquisition proposal, Ohio law includes a provision which permits directors, in
determining whether any matter is in the best interests of the corporation, to
take into consideration the interests of the corporation's employees,
suppliers, creditors and customers, the economy of the state and the nation,
community and societal considerations and the long-term and short-term
interests of the corporation and its shareholders, including the possibility
that such interests may be best served by the continued independence of the
corporation. No similar provision is included in the DGCL or MID STATES'
Certificate.
Amendment of Governing Documents. BANC ONE's Articles may be amended by the
affirmative vote of the holders of a majority of the voting power of BANC ONE,
except that amendments to the "control share acquisition" and "fair price"
provisions require a supermajority vote. See "COMPARATIVE RIGHTS OF
SHAREHOLDERS--Special Voting Requirements for Certain Transactions." The Code
of Regulations of BANC ONE may only be amended by the affirmative vote of a
majority of the voting power represented by the outstanding voting stock of
BANC ONE present in person or by proxy at an annual or special meeting called
for such purpose.
MID STATES' Certificate may be amended by the affirmative vote of the holders
of a majority of the outstanding shares of MID STATES' voting stock, except
that amendments to the provision providing for supermajority voting and any
amendment which provides for any change to Sections Fifth, Sixth and Ninth of
MID STATES' Articles require the affirmative vote of three-fourths of the
outstanding shares of MID STATES' voting stock. The DGCL provides that
shareholders of a corporation may amend its by-laws and that a corporation may,
in its certificate of incorporation, also confer such power upon its Board of
Directors. MID STATES' Certificate explicitly confers upon the MID STATES'
Board the power to amend MID STATES' by-laws. Accordingly, both the MID
STATES' Board and its shareholders may amend MID STATES' by-laws by a majority
vote, except that amendments by MID STATES' shareholders to provisions in MID
STATES' by-laws with respect to the number of directors and the filling of
director vacancies require the affirmative vote of not less than three-fourths
of the outstanding shares of MID STATES' voting stock.
Appraisal Rights. Under the DGCL, appraisal or dissenters' rights are
available only in connection with statutory mergers or consolidations. Even in
such cases, unless the certificate of incorporation otherwise provides, the
DGCL does not recognize dissenters' rights for any class or series of stock
which is either listed on a national securities exchange or held of record by
more than 2,000 shareholders except that appraisal rights are available for
holders of stock who, by the terms of the merger or consolidation, are required
to accept anything except (i) stock of the corporation surviving or resulting
from the merger of consolidation, (ii) shares which at the effective time of
the merger or consolidation are either listed on a national securities exchange
or held of record by more than 2,000 shareholders, (iii) cash in lieu of
fractional shares of stock described in the foregoing clauses (i) and (ii), or
(iv) any combination of stock and cash in lieu of fractional shares described
in the foregoing clauses (i), (ii) or (iii). MID STATES has less than 2,000
shareholders and although a local brokerage firm attempts to make a market in
MID STATES Common Stock, MID STATES Common Stock is not listed on any national
securities exchange. Therefore, holders of MID STATES Common Stock will be
entitled under the DGCL to appraisal rights in connection with the Merger. See
"VOTING AND MANAGEMENT INFORMATION--Rights of Dissenting Shareholders."
Under Ohio law, dissenting shareholders are entitled to appraisal rights in
connection with the lease, sale, exchange, transfer or other disposition of all
or substantially all of the assets of a corporation and in connection with
certain amendments to its articles of incorporation. In addition, shareholders
of an Ohio corporation being merged into a new corporation are also entitled to
appraisal rights. Shareholders of an acquiring corporation are entitled to
appraisal rights in a merger, combination or majority share acquisition in
which such shareholders are entitled to voting rights.
Repurchases. Under the DGCL, a corporation may repurchase or redeem its shares
only if such purchase does not impair capital. However, a corporation may
redeem preferred stock out of capital if such shares will be retired upon
redemption and the stated capital of the corporation is thereupon reduced in
accordance with the DGCL. Under Ohio law, a corporation may purchase or redeem
its own shares if authorized to do so by its articles of incorporation or under
certain other circumstances but may not do so only if immediately thereafter
its assets would be less than its liabilities plus its stated capital, if any,
or if the corporation is insolvent or would be rendered insolvent by such a
purchase or redemption. Article Sixth of BANC ONE's Articles permits BANC ONE
to repurchase or redeem shares to the extent permitted by law.
Indemnification. The DGCL provides that a director, employee, officer or agent
of a corporation may be indemnified against liability (other than in an action
by or in the right of a corporation) and other costs incurred by such person in
connection with such proceedings, provided such person acted in good faith and
in a manner such person reasonably believed to be in and not opposed to, the
best interests of the corporation and, with respect to any criminal
proceedings, had no reason to believe the conduct was unlawful. For actions or
suits brought by or in the name of the corporation, the DGCL provides that a
director, employee, officer or agent of a corporation may be indemnified
against expenses by such person in connection with such proceeding if such
person acted in good faith and in a manner such person reasonably believed to
be in and not opposed to, the best interests of the corporation except that if
such person is adjudged to be liable to the corporation, such person can be
indemnified if and only to the extent that a court shall determine that despite
the adjudication of liability, in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses as
the court shall deem proper. The DGCL permits a corporation to advance
expenses incurred by an officer or director in defending any action prior to
the disposition of such action upon a receipt of an undertaking by or on behalf
of such officer or director to repay such amount if it is ultimately determined
that such officer or director is not entitled to be indemnified by the
corporation. MID STATES' By-laws provide that MID STATES must indemnify all
persons whom it is permitted to indemnify under the DGCL.
The DGCL allows a corporation to provide, in its certificate of incorporation,
a provision which limits or eliminates the personal liability of a director to
the corporation and its shareholders for monetary damages for such person's
breach of fiduciary duty, provided that such provision may not so limit a
director's liability (i) for a breach of his duty of loyalty to the
corporation; (ii) for acts or omissions not in good faith or involving
intentional misconduct or a knowing violation of law; (iii) for unlawful
payments of dividends, certain stock repurchases or redemptions; or (iv) for
any transaction from which the director derived an improper personal benefit.
These provisions have the effect of protecting a corporation's directors
against personal liability from breaches of their duty of care, including
liability for gross negligence under Delaware law. MID STATES' By-laws contain
a provision eliminating such liability to the extent permitted under the DGCL.
Under Ohio law, Ohio corporations are authorized to indemnify directors,
officers, employees and agents within prescribed limits and must indemnify them
under certain circumstances. Ohio law does not provide statutory authorization
for a corporation to indemnify directors and officers for settlements, fines or
judgments in the context of derivative suits. However, it provides that
directors (but not officers) are entitled to mandatory advancement of expenses,
including attorneys' fees, incurred in defending any action, including
derivative actions, brought against the director, provided the director agrees
to cooperate with the corporation concerning the matter and to repay the amount
advanced if it is proved by clear and convincing evidence that his or her act
or failure to act was done with deliberate intent to cause injury to the
corporation or with reckless disregard for the corporation's best interests.
Ohio law does not authorize payment of expenses or judgments to an officer or
other agent after a finding of negligence or misconduct in a derivative suit
absent a court order. Indemnification is required, however, to the extent such
person succeeds on the merits. In all other cases, if a director or officer
acted in good faith and in a manner he or she reasonably believed to be in (or
not opposed to) the best interests of the company, indemnification is
discretionary except as otherwise provided by a company's articles, code of
regulations or by contract except with respect to the advancement of expenses
of directors. The statutory right to indemnity is not exclusive in Ohio. Ohio
law provides express authority for Ohio corporations to procure not only
insurance policies, but also to furnish protection similar to insurance,
including trust funds, letters of credit and self-insurance, or to provide
similar protection such as indemnity against loss of insurance.
Unlike Delaware law, Ohio law has codified the traditional business judgment
rule. Ohio law provides that the business judgment presumption of good faith
may only be overcome by clear and convincing evidence, rather than the
preponderance of the evidence standard applicable in most states. Further,
Ohio law provides specific statutory authority for directors to consider, in
addition to the interests of the corporation's shareholders, other factors such
as the interest of the corporation's employees, suppliers, creditors and
customers; the economy of the state and nation; community and societal
considerations; the long-term and short-term interests of the corporation and
its shareholders; and the possibility that these interests may be best served
by the continued independence of the corporation.
MISCELLANEOUS INFORMATION
Transfer and Exchange Agents
Bank One, Indianapolis, N.A., Indianapolis, Indiana, serves as Transfer Agent
and as Registrar for BANC ONE Common Stock. Bank One, Indianapolis, N.A. will
act as Exchange Agent in connection with the Merger. First National acts as
Transfer Agent and as Registrar for MID STATES Common Stock.
Interests of Named Experts and Counsel
The consolidated financial statements of BANC ONE incorporated by reference in
this Prospectus and Proxy Statement have been audited by Coopers & Lybrand,
independent public accountants, to the extent and for the years included in
their reports, which reports are included or are incorporated herein, and have
been so included or incorporated in reliance upon their reports given on the
authority of that firm as experts in accounting and auditing. The consolidated
financial statements of MID STATES incorporated by reference in this
Prospectus and Proxy Statement have been audited by McGladrey &
Pullen, independent certified public accountants, to the extent and for the
years included in the reports which parts are included or incorporated by
reference herein and have been included and incorporated in reliance upon their
reports given, and upon the authority of said firm as experts in
accounting and auditing.
Certain legal matters will be passed upon for MID STATES by counsel for MID
STATES, Vedder, Price, Kaufman & Kammholz, Chicago, Illinois. An opinion on
certain of the federal income tax consequences of the proposed transaction will
also be issued by Vedder, Price, Kaufman & Kammholz. Vedder, Price, Kaufman &
Kammholz has from time to time performed legal services for Banc One Illinois
in connection with matters unrelated to the Merger. An opinion on the validity
of the BANC ONE Common Stock offered hereby has been passed upon by Roman J.
Gerber, Executive Vice President and General Counsel of BANC ONE.
Sources of Information
The information concerning BANC ONE and MID STATES has been supplied by the
management of the respective companies.
Registration Statement
This Prospectus and Proxy Statement does not include all of the information set
forth or incorporated by reference in the Registration Statement on Form S-4
and the exhibits thereto filed by BANC ONE with the Commission under the
Securities Act. The Registration Statement may be inspected at the principal
office of the Commission in Washington, D.C., and copies may be obtained upon
payment of prescribed fees. See "AVAILABLE INFORMATION" for addresses of the
Commission's offices. Reference is hereby made to the Registration Statement
and exhibits thereto for further information pertaining to BANC ONE and MID
STATES.
Other Matters
The Board of Directors of MID STATES does not know of any other matters which
may come before the Special Meeting.
B. INFORMATION ABOUT BANC ONE CORPORATION
General -- Business.
BANC ONE is a multi-bank holding company with bank subsidiaries in Arizona,
California, Colorado, Ohio, Illinois, Indiana, Kentucky, Michigan,
Oklahoma, Texas, Utah, West Virginia and Wisconsin. At
December 31, 1993, BANC ONE had consolidated total assets of
$79.9 billion , consolidated total deposits of approximately
$60.9 billion and consolidated total shareholders' equity of
approximately $7.0 billion. At December 31, 1993, BANC ONE
ranked eighth among the nation's publicly owned bank holding companies
in terms of period-end assets and at December 31, 1993, BANC ONE ranked
sixth among the nation's publicly owned bank holding companies in terms of
period-end common equity. For the year ended December 31,
1993, BANC ONE's return on average assets was 1.53%
As of December 31, 1993, BANC ONE owned indirectly all of the
outstanding stock of 82 commercial banks (the "affiliate banks").
Except for Bank One, Texas, N.A., BANC ONE had no single affiliate bank
comprising in excess of 20% of its consolidated assets at December 31,
1993. BANC ONE also owns subsidiaries which offer services in the areas
of mortgage banking, credit card processing, consumer finance, equipment
leasing, fiduciary and trust services, venture capital, credit life
insurance, brokerage and data processing.
Since its formation in 1968, BANC ONE has acquired over 125 banking
institutions and the number of banking offices of its affiliate banks has
increased from 24 to over 1,300. BANC ONE anticipates that it will continue to
expand by acquisition in the future. BANC ONE is frequently in discussions
regarding possible acquisitions. See "Recent Developments" for information
with respect to pending and potential acquisitions.
BANC ONE is a legal entity separate and distinct from its affiliate banks and
its nonbanking subsidiaries. Accordingly, the right of BANC ONE, and thus the
right of BANC ONE's creditors and shareholders, to participate in any
distribution of the assets or earnings of any affiliate bank or other
subsidiary is necessarily subject to the prior claims of creditors of the
affiliate bank or subsidiary, except to the extent that claims of BANC ONE in
its capacity as a creditor may be recognized. The principal source of
BANC ONE's revenues is dividends and fees from its affiliates. See "Certain
Regulatory Matters" for a discussion of regulatory restrictions on the ability
of the affiliate banks to pay dividends to BANC ONE.
Recent Developments.
In recent years, BANC ONE has pursued an active acquisition program. The
following is a list of announced significant acquisitions that have not been
consummated as of the date of this Prospectus and Proxy Statement.
Liberty National Bancorp, Inc., a multi-bank holding company headquartered
in Louisville, Kentucky with assets of approximately $4.9 billion as of
December 31, 1993, which BANC ONE will acquire for approximately 24 million
shares of BANC ONE Common Stock.
BANC ONE has also announced three other acquisitions which are not material in
the aggregate. In addition, BANC ONE has recently terminated its pending
acquisitions of FirsTier Financial, Inc., a multi-bank holding company
headquartered in Omaha, Nebraska with assets of approximately $3.1 billion as
of December 31, 1993, and Nebraska Capital Corporation, a single bank holding
company headquartered in Lincoln, Nebraska with assets of approximately $95
million as of December 31, 1993.
BANC ONE continues to explore opportunities to acquire banks and nonbank
companies permitted by the Bank Holding Company Act of 1956. Discussions are
continually being carried on relating to the acquisition of bank-related
companies and other banks. It is not presently known whether, or on what
terms, such discussions will result in further acquisitions. BANC ONE's
acquisition strategy is flexible in that it does not require BANC ONE to effect
specific acquisitions so as to enter certain markets or to attain specified
growth levels. Rather than being market driven or size motivated, BANC ONE's
acquisition strategy reflects BANC ONE's willingness to consider potential
acquisitions wherever and whenever such opportunities arise based on the
then-existing market conditions and other circumstances. Banks to be acquired
must be of sufficient size to support and justify having management of a
caliber capable of making lending and other management decisions at the local
level under BANC ONE's operating philosophy. BANC ONE also is willing from
time to time to acquire a smaller bank when it can be acquired through a
reorganization into an existing affiliate. BANC ONE's interest in the
acquisition of non-bank companies has been limited to bank-related services
with which BANC ONE already has familiarity. BANC ONE's acquisitions may be
made by the exchange of stock, through cash purchases, and with other
consideration.
Other than as described above, BANC ONE does not currently have any definite
understandings or agreements for any acquisitions material to BANC ONE.
However, BANC ONE anticipates that it will continue to expand by acquisition in
the future.
Certain Regulatory Matters
General
BANC ONE is subject to the supervision of, and to regular inspection by, the
Federal Reserve. BANC ONE's principal banking subsidiaries are organized as
national banking associations, which are subject to regulation by the
Comptroller of the Currency (the "Comptroller"). In addition, various state
authorities regulate BANC ONE's state banking subsidiaries. Furthermore, the
various banking subsidiaries are subject to regulation by the Federal Deposit
Insurance Corporation (the "FDIC") and other federal bank regulatory bodies.
In addition to banking laws, regulations and regulatory agencies, BANC ONE and
its subsidiaries and affiliates are subject to various other laws, regulations
and regulatory agencies, all of which directly or indirectly affect BANC ONE's
operations, management and ability to make distributions. The following
discussion summarizes certain aspects of those laws and regulations that affect
BANC ONE.
Proposals to change the laws and regulations governing the banking industry are
frequently raised in Congress, in the state legislatures and before the various
bank regulatory agencies. The likelihood and timing of any changes and the
impact such changes might have on BANC ONE and its subsidiaries are difficult
to determine.
According to Federal Reserve policy, bank holding companies are expected to act
as a source of financial strength to each subsidiary bank and to commit
resources to support each such subsidiary. This support may be required at
times when a bank holding company may not be able to provide such support.
Furthermore, in the event of a loss suffered or anticipated by the FDIC --
either as a result of default of a banking or thrift subsidiary of BANC ONE or
related to FDIC assistance provided to a subsidiary in danger of default -- the
other banking subsidiaries of BANC ONE may be assessed for the FDIC's loss,
subject to certain exceptions.
BANC ONE's banks are affected by various state and federal laws and by the
fiscal and monetary policies of the federal government and its agencies,
including the Federal Reserve. An important purpose of these policies is to
curb inflation and control recessions through control of the supply of money
and credit. The Federal Reserve uses its powers to regulate reserve
requirements of its member banks, the discount rate on its member bank
borrowings, interest rates on time and savings deposits of its member banks,
and to conduct open market operations in United States government securities so
as to exercise control over the supply of money and credit. These policies
have a direct effect on the amount of bank loans and deposits and on the
interest rates charged on loans and paid on deposits, with the result that
federal policies have a material effect on bank earnings. Policies which are
directed toward increasing the supply of money and credit and reducing interest
rates may have an adverse effect on bank earnings. Future policies of the
Federal Reserve and other authorities cannot be predicted, nor can their effect
on future bank earnings be predicted. Similarly, future changes in state and
federal laws and wage, price and other economic restraints of the federal
government cannot be predicted nor can their effect on future bank earnings be
predicted.
Capital Requirements
The Federal Reserve, the FDIC and the Comptroller have issued substantially
similar minimum risk-based and leverage capital guidelines for United States
banking organizations. In addition, those regulatory agencies may from time to
time require that a banking organization maintain capital above the minimum
levels, whether because of its financial condition or actual or anticipated
growth.
The Federal Reserve risk-based guidelines applicable to BANC ONE define a
two-tier capital framework. Tier 1 capital consists of common and qualifying
preferred shareholders' equity, minority interests less goodwill and certain
other intangible assets, and one-half of investments in unconsolidated
subsidiaries.
Tier 2 capital consists of mandatory convertible debt, subordinated and other
qualifying term debt, preferred stock not qualifying as Tier 1 capital and the
allowance for credit losses, subject to certain limitations less one-half of
investments in unconsolidated subsidiaries. The sum of Tier 1 and Tier 2
capital represents qualifying total capital, at least 50% of which must consist
of Tier 1 capital. Risk-based capital ratios are calculated by dividing Tier 1
and total capital by the sum of four categories of risk-weighted assets, such
risk weights based primarily on relative credit risk. The regulatory minimum
qualifying total risk-based capital ratio is 8%, of which at least 4% must
consist of Tier 1 capital. BANC ONE's Tier 1 and total risk-based capital
ratios under these guidelines at December 31, 1993 were 10.51%
and 14.19%, respectively.
The leverage ratio is determined by dividing Tier 1 capital by adjusted total
assets. Although the stated minimum ratio is 3%, most banking organizations
are required to maintain ratios of at least 100 to 200 basis points above 3%.
BANC ONE's estimated leverage ratio at December 31, 1993 was
8.66%. Although BANC ONE has not been informed of any specific
leverage ratio requirement applicable to it, management believes that BANC ONE
meets its leverage ratio requirement.
Dividend Restrictions
Various federal and state statutory provisions limit the amount of dividends
BANC ONE's affiliate banks can pay to BANC ONE without regulatory approval.
The approval of the appropriate bank regulator is required for any dividend by
a national bank or state member bank if the total of all dividends declared by
the bank in any calendar year would exceed the total of its net profits, as
defined by regulatory agencies, for such year combined with its retained net
profits for the preceding two years. In addition, a national bank or a state
member bank may not pay a dividend in an amount greater than its net profits
then on hand. Under these provisions and various state law restrictions,
BANC ONE's affiliate banks could have declared, as of December 31, 1993,
without obtaining prior regulatory approval, aggregate dividends of approxi-
mately $1.2 billion . In addition, federal bank regulatory authorities
have authority to prohibit the affiliate banks from engaging in an unsafe or
unsound practice in conducting their business. The payment of dividends,
depending upon the financial condition of the bank in question, could be deemed
to constitute such an unsafe or unsound practice. The ability of BANC ONE's
affiliate banks to pay dividends in the future is presently, and could be
further, influenced by bank regulatory policies and capital guidelines.
FDICIA
The Federal Deposit Insurance Corporation Improvement Act of 1991 (the
"FDICIA"), which became law on December 19, 1991, revises several banking
statutes, including the Federal Deposit Insurance Act, affecting bank
regulation, deposit insurance and provisions for funding of the Bank Insurance
Fund (the "BIF") administered by the FDIC. Under FDICIA the bank regulators'
authority to intervene is linked to the deterioration of a bank's capital
level. In addition, FDICIA places limits on real estate lending and brokered
deposit activities, expands audit and reporting requirements, and imposes
limitations and requirements on various banking functions. BANC ONE believes
that the deposit insurance and brokered deposit limitations under FDICIA will
not have any material impact on the liquidity or funding of BANC ONE or its
affiliate banks.
Deposit Insurance Assessments
The deposits of each of BANC ONE's banks are insured up to regulatory limits by
the FDIC. Accordingly, BANC ONE's banks are subject to deposit insurance
assessments to maintain the Bank Insurance Fund (the "BIF") of the FDIC.
On September 14, 1992, the FDIC adopted regulations to implement a transitional
risk-related insurance assessment system, starting January 1, 1993. Under this
system, the FDIC will place each insured bank in one of nine risk categories
based on its level of capital and other relevant information (such as
supervisory evaluations). Each insured bank's insurance assessment rate will
then be determined by the risk category in which it has been classified by the
FDIC. Under this transitional system, the average insurance assessment rate
will be .254% per $100 of deposits. However, there will be an eight basis
point spread between the highest and lowest assessment rates, so that banks
classified as strongest by the FDIC will be subject to a rate of $0.23 per $100
of deposits and banks classified as weakest by the FDIC will be subject to a
rate of $0.31 per $100 of deposits. The FDIC has indicated that it expects
that the majority of banks will be subject to an assessment rate of $0.23 per
$100 of deposits (the same rate as under the current flat-rate assessment
system). However, the FDIC has also indicated that it expects to recommend
that the permanent risk-related premium system, to be implemented in 1994,
incorporate a wider differential between the highest and lowest assessment
rates.
Market Prices of and Dividends Paid on BANC ONE Common Stock
BANC ONE Common Stock is, and the shares offered hereby will be, listed on the
New York Stock Exchange. The following table sets forth, for the periods
indicated, the high and low reported closing sale prices per share of BANC ONE
Common Stock on the New York Stock Exchange Composite Tape and cash dividends
per share of BANC ONE Common Stock. The dividend and stock price information
for 1990 has not been adjusted to reflect the 10% dividend on BANC ONE Common
Stock effective February 14, 1992 or for the five shares for four shares common
stock split payable to shareholders of record on August 3, 1993 and to be
distributed on August 31, 1993.
Price Range of Common Stock
High Low Dividends
1992
First Quarter . . . . . $36.36 $30.75 $.21
Second Quarter . . . . 34.55 30.73 .21
Third Quarter . . . . . 34.27 30.64 .24
Fourth Quarter . . . . 38.91 31.82 .24
1993
First Quarter . . . . . $42.27 $36.36 $.25
Second Quarter. . . . . 44.73 36.73 .25
Third Quarter . . . . . 42.19 34.55 .28
Fourth Quarter 39.77 32.27 .28
1994
First Quarter . . . . $35.47 $31.88 $.31
Second Quarter . . . . .31
(through , 1994)
BANC ONE intends to continue its present policy of paying quarterly cash
dividends to its shareholders so that dividends as a percentage of income will
average between 35 and 40 percent of net income. The timing and amount of
future dividends will depend upon earnings, cash requirements, the financial
condition of BANC ONE and its subsidiaries, applicable government regulations
and other factors deemed relevant by the Board of Directors. Certain debt
instruments to which BANC ONE is a party limit its ability to pay dividends on
BANC ONE Common Stock. Under the most restrictive of these limitations, BANC
ONE would have been permitted to pay cash dividends on BANC ONE Common Stock in
excess of its $1.0 billion of retained earnings as of December 31,
1993. As described under "Certain Regulatory Matters," various state
and federal laws limit the ability of affiliate banks to pay dividends to
BANC ONE.
Incorporation of Certain Information
About BANC ONE By Reference
BANC ONE's Annual Report on Form 10-K for the fiscal year ended December 31,
1993, and BANC ONE's Current Reports on Form 8-K, including the Form 8-K
filed January 28, 1994 and the Form 8-K filed February 17, 1994,
in each case filed with the Commission pursuant to Section 13 of the Exchange
Act and the description of BANC ONE Common Stock which is contained in its
registration statement filed under Section 12 of the Exchange Act, including
any amendment or report filed for the purpose of updating such description,
are incorporated into this Prospectus and Proxy Statement by reference.
C. INFORMATION ABOUT Mid States Bancshares, Inc.
General
MID STATES is a bank holding company incorporated under the laws of the state
of Delaware with its principal office in Moline, Illinois. MID STATES owns all
of the outstanding stock of the First National Bank Moline, Moline, Illinois
("First National"), which operates two offices in Moline, Illinois. As of
December 31, 1993, MID STATES had total assets of approximately
$192 million and First National had deposits of approximately
$163 million.
Market Prices of and Dividends Paid on MID STATES Common Stock
As of December 31, 1993, there were approximately 300 holders
of record of MID STATES Common Stock. No trading market exists for MID
STATES Common Stock as trades occur infrequently and typically for
very few shares. The last known trade occurred on April 16, 1993 and
was for 188 shares at a price of $45.00 per share. See "Information About the
Transaction - Comparative per Share Data."
The following table sets forth, for the periods indicated, the cash dividends
paid per share of MID STATES Common Stock:
Dividend Per Share
1991
First Quarter . . . . . $.60
Second Quarter . . . . .60
Third Quarter . . . . . .60
Fourth Quarter . . . . .80
1992
First Quarter . . . . . $.60
Second Quarter . . . . .60
Third Quarter . . . . . .60
Fourth Quarter . . . . .80
1993
First Quarter . . . . . $.60
Second Quarter. . . . . .69
Third Quarter . . . . . .77
Fourth Quarter . . . . .77
1994
First Quarter . . . . . .84
Second Quarter. . . . . .
(through , 1994)
The Merger Agreement provides that beginning with the second calendar
quarter of 1993 and for each succeeding calendar quarter prior to the
consummation of the Merger, MID STATES may declare and pay cash
dividends on shares of MID STATES Common Stock in an amount, per calendar
quarter, which, in the aggregate, will not exceed the greater of $0.65 per
share or a comparable BANC ONE Common Stock dividend on shares of MID STATES
Common Stock. However, MID STATES will not declare or pay any dividends or
make any distributions in any amount on the MID STATES Common Stock in the
quarter in which the Effective Time occurs and in which the shareholders of
MID STATES Common Stock are entitled to receive regular quarterly dividends
on the shares of BANC ONE Common Stock into which the shares of MID STATES
Common Stock have been converted.
Incorporation of Certain Information About MID STATES By Reference
MID STATES' Annual Report on Form 10-KSB for the fiscal year ended
December 31, 1993, as filed by MID STATES with the Commission is
incorporated into this Prospectus and Proxy Statement by reference.
D. VOTING AND MANAGEMENT INFORMATION
BANC ONE will pay the costs of preparing and printing this Prospectus and Proxy
Statement and MID STATES will bear the cost of soliciting proxies from its
shareholders for the Special Meeting. Solicitation of proxies will be made in
person, by mail, or by telephone or telegraph by present and former directors,
officers and employees of MID STATES and First National for which no additional
compensation will be paid. Copies of the form of proxy and Notice and this
Prospectus will be mailed to shareholders on or about April , 1994.
Voting
The proxy accompanying this Prospectus Proxy Statement is solicited by
the Board of Directors of MID STATES and, if properly executed and returned,
will be voted in accordance with the instructions given therein. IF NO
INSTRUCTIONS ARE GIVEN, THE PROXY WILL BE VOTED IN FAVOR OF THE PROPOSAL TO
APPROVE THE
MERGER AGREEMENT. Any proxy may be revoked at any time before
it is voted by furnishing MID STATES with either written notice of revocation
or a subsequently dated proxy or appearing at the Special Meeting and
electing to vote in person.
The MID STATES Board has fixed the close of business on , 1994,
as the record date for the determination of shareholders entitled to notice of
and to vote at the Special Meeting. As of the record date,
shares of MID STATES Common Stock were outstanding, each of which entitled its
holder to one vote at the Special Meeting. The affirmative vote of a majority
of the outstanding shares of MID STATES Common Stock entitled to vote thereon
is required for approval of the Merger Agreement.
The Directors of MID STATES have unanimously approved the Merger Agreement and
each director has indicated an intention to vote all of his shares in favor of
the Merger Agreement.
Rights of Dissenting Shareholders
Under Delaware law, appraisal or dissenters' rights are available in connection
with statutory mergers or consolidations. The DGCL provides that shareholders
shall receive a notice at least 20 days prior to a meeting held for purposes of
voting on a merger that appraisal rights are available and shall also receive a
copy of Section 262 of the DGCL. A shareholder wishing to exercise his or her
appraisal rights shall deliver to the corporation, in advance of the merger
vote, a written demand for appraisal. A proxy or vote against the merger shall
not constitute a demand under the DGCL. Within 10 days after a merger is
effective, the surviving or resulting corporation shall notify all shareholders
who have demanded an appraisal and did not vote for or consent to the merger
that the merger has become effective. Within 120 days of the effective date of
the merger, the surviving or resulting corporation or a shareholder who has
demanded an appraisal may file a petition in a Court of Chancery demanding a
determination of the value of the stock of all such shareholders. Within 60
days of the effective date of a merger, any shareholder may withdraw his or her
previous demand for an appraisal and accept the terms of the merger. Section
262 of the DGCL is attached to this Prospectus and Proxy Statement as
Exhibit C.
Management and Principal Shareholders of BANC ONE
Information concerning the directors and executive officers of BANC ONE,
compensation of directors and executive officers of BANC ONE and any related
transactions in which they have an interest, together with information related
to principal shareholders of BANC ONE, is set forth in BANC ONE's Proxy
Statement, dated March , 1994, incorporated herein by reference to
BANC ONE's Annual Report on Form 10-K for the year ended December 31, 1993.
See "Incorporation by Reference."
Management and Principal Shareholders of MID STATES
Information concerning the directors and executive officers of MID STATES,
compensation of directors and executive officers of MID STATES and any related
transactions in which they have an interest, together with information related
to principal shareholders of MID STATES, is set forth in MID STATES' Annual
Report on Form 10-K for the year ended December 31, 1993. See
"Incorporation of Certain Information About MID STATES by Reference."
Future Proposals by MID STATES's Shareholders
If the Merger is not consummated, it is currently anticipated that the 1994
Annual Meeting of Shareholders of MID STATES will be held on , 1994.
EXHIBIT A
April , 1994
Board of Directors
Mid States Bancshares, Inc.
501 15th Street
Moline, Illinois 61265-2184
Gentlemen:
On December 21, 1993, we delivered to you our written opinion as
to the fairness, from a financial point of view, to the holders
of the outstanding common stock, par value $5.00 per share (the
"Mid States Common Stock"), of Mid States Bancshares, Inc. ("Mid
States") of the consideration to be received by such holders
pursuant to the Agreement and Plan of Merger dated as of May 25,
1993 by and among Mid States, Banc One Corporation ("Banc One")
and Banc One Illinois Corporation, a wholly-owned subsidiary of
Banc One (the "Merger Agreement"). The Merger Agreement
provides for the merger of Mid States with and into Banc One
Illinois Corporation (the "Merger") and provided for the
conversion of each share of Mid States Common Stock into the
right to receive, subject to certain limitations and procedures
set forth in the Merger Agreement, 2.7225 shares of Banc One
common stock, no par value ("Banc One Common Stock"), after
giving effect to Banc One's five-share-for-four-share stock
split on August 31, 1993 and ten percent stock dividend paid on
March 4, 1994. Our letter of December 31, 1993 expressed our
opinion that, on the basis of the factors and subject to the
conditions described in that letter, if the market value of the
Banc One Common Stock to be received in respect of each share of
Mid States Common Stock were $102.96 or higher, the
consideration to be received by the holders of Mid States common
stock pursuant to the Merger Agreement would be fair, from a
financial point of view, to the holders of Mid States Common
Stock. In that letter, we expressed no opinion as to the
fairness of such consideration in the event that the market
value of the Banc One Common Stock to be received in respect of
each share of Mid States Common Stock were less than $102.96.
You have now requested our opinion as to the fairness, from a
financial point of view, to the holders of Mid States Common
Stock of the "Exchange Rate" set forth in the Second Agreement
Amending Agreement and Plan of Merger, dated as of March 25,
1994 (the "Second Amendment"). The Second Amendment provides
that, at the time the Merger becomes effective (the "Effective
Time") and subject to certain limitations and procedures set
forth in the Merger Agreement and the amendments thereto, each
of the not more than 311,560 shares of Mid States Common Stock
that shall be issued and outstanding immediately prior to the
Effective Time (excluding any shares held by Mid States as
treasury shares) shall be converted into 2.917 shares of Banc
One Common Stock (the "Exchange Rate").
The Merger is subject to, among other things, approvals of the
Board of Governors of the Federal Reserve System and the
Illinois Commissioner of Banks and Trust Companies (which
approvals have been granted), approval by the holders of a
majority of the shares of Mid States Common Stock, and receipt
of opinions to the effect that the Merger will qualify for
treatment as a tax-free reorganization and a pooling-of-
interests.
Donaldson, Lufkin & Jenrette Securities Corporation, as part of
its investment banking business, is regularly engaged in the
valuation of businesses and their securities in connection with
mergers and acquisitions, including bank holding company
acquisitions, negotiated underwritings, competitive biddings,
secondary distributions of listed and unlisted securities,
private placements, and valuations for corporate and other
purposes. We were retained by Mid States to act as its
exclusive financial advisor with respect to any sale, merger,
consolidation, or other business combination, in one or a series
of transactions, involving all or a substantial amount of the
business, securities or assets of Mid States. We have received
and will receive compensation from Mid States in connection with
our services, a significant portion of which is contingent upon
the consummation of the Merger.
At your direction, we solicited a limited number of
institutions, including Banc One, to determine their interest in
a possible business combination with Mid States. Also at your
direction, we ceased soliciting such interest of third parties
at the time you determined to negotiate on an exclusive basis
with Banc One, which negotiations led to execution of the Merger
Agreement.
In the ordinary course of our business we may actively trade the
debt and equity securities of companies, including Mid States
and Banc One, for our own account and for the accounts of
customers and may hold a long or short position in such
securities at any time.
For purposes of this opinion and in connection with our review
of the proposed transaction, we have, among other things:
1. Reviewed the Merger Agreement, the First Agreement
Amending Agreement and Plan of Merger dated as of
February 22, 1994, the Second Amendment, the
prospectus and proxy statement dated as of December
21, 1993 and the prospectus and proxy statement dated
as of April ___, 1994 sent to the holders of Mid
States Common Stock in connection with the proposed
transaction;
2. Reviewed certain publicly available financial
statements, both audited and unaudited, for Mid States
and Banc One;
3. Reviewed certain financial statements and other
financial and operating data concerning Mid States and
Banc One prepared by their respective managements;
4. Reviewed certain financial projections of Mid States
and Banc One, both on a stand-alone and on a combined
basis, prepared by their respective managements;
5. Discussed certain aspects of the past and current
business operations, results of regulatory
examinations, financial condition and future prospects
of Mid States and Banc One with certain members of the
management of Mid States and Banc One;
6. Reviewed reported market prices and historical trading
activity of Mid States Common Stock and Banc One
Common Stock;
7. Reviewed certain aspects of the financial performance
of Mid States and Banc One and compared such financial
performance of Mid States and Banc One together with
the stock market data relating to Mid States and Banc
One with similar data available for certain other
financial institutions and certain of their publicly
traded securities;
8. Reviewed the financial terms, to the extent publicly
available, of certain recent business combinations
involving other financial institutions;
9. Participated in discussions and negotiations among
representatives of Mid States and Banc One and their
financial and legal advisors; and
10. Conducted such other studies, analyses, and
examinations as we deemed appropriate.
We have relied upon and assumed without independent verification
the accuracy and completeness of all of the financial and other
information that has been provided to us by Mid States, Banc One
and their respective representatives and of the publicly
available information that was reviewed by us. We have also
relied upon the managements of both Mid States and Banc One as
to the reasonableness and achievability of the financial and
operating forecasts provided to us (and the assumptions and
bases therefor). In that regard, we have assumed that such
forecasts, including without limitation projected costs savings
and operating synergies resulting from the Merger, reflect the
best currently available estimates and judgments of such
respective managements and that such projections and forecasts
will be realized in the amounts and in the time periods
currently estimated by the managements of both Mid States and
Banc One. We have not independently verified and have relied on
and assumed that the aggregate allowances for loan losses set
forth in the balance sheets of each of Mid States and Banc One
at December 31, 1993 are adequate to cover such losses and
complied fully with applicable law, regulatory policy, and sound
banking practice as of the date of such financial statements.
We were not retained to and we did not conduct a physical
inspection of any of the properties or facilities of Mid States
or Banc One, nor did we make any independent evaluation or
appraisal of the assets, liabilities or prospects of Mid States
or Banc One, were not furnished with any such evaluation or
appraisal, and did not review any individual credit files. We
have also assumed that the Merger is, and will be, in compliance
with all laws and regulations that are applicable to Mid States
and Banc One. We were informed by Mid States and have assumed
for purposes of our opinion that the Merger will be recorded as
a pooling of interests under generally accepted accounting
principles.
Our opinion is based solely upon the information available to us
and the economic, market, and other circumstances as they exist
as of the date hereof. Events occurring after the date hereof
could materially affect the assumptions used in preparing this
opinion. We have not undertaken to reaffirm or revise this
opinion or otherwise comment upon any events occurring after the
date hereof.
In rendering our opinion, we have assumed that in the course of
obtaining the necessary regulatory and governmental approvals
for the proposed Merger, no restriction will be imposed on Banc
One or the surviving corporation in the Merger that would have
a material adverse effect on the contemplated benefits of the
Merger. We have also assumed that there would not occur any
change in the applicable law or regulation that would cause a
material adverse change in the prospects or operations of Banc
One or the surviving corporation after the Merger.
We are not expressing any opinion herein as to the prices at
which shares of Banc One Common Stock may trade if and when they
are issued or at any future time, nor does our opinion
constitute a recommendation to any holder of Mid States Common
Stock as to how such holder should vote with respect to the
Merger Agreement at any meeting of holders of Mid States Common
Stock.
This letter is for the information of the Board of Directors of
Mid States and is not to be quoted or referred to, in whole or
in part, in any registration statement, prospectus, or proxy
statement, or any other written document used in connection with
the offer or sale of securities, nor shall this letter be used
for any other purpose without our prior written consent;
provided, however, that we hereby consent to the inclusion and
reference to this opinion in any registration statement or proxy
statement used in connection with the Merger so long as the
opinion is quoted in full or attached as an exhibit to such
registration statement or proxy statement.
Subject to the foregoing and based on our experience as
investment bankers, our activities as described above, and other
factors we have deemed relevant, we are of the opinion as of the
date hereof that the Exchange Rate is fair, from a financial
point of view, to the holders of Mid States Common Stock.
Very truly yours,
DONALDSON, LUFKIN & JENRETTE
SECURITIES CORPORATION
by
David D. Olson
Managing Director
EXHIBIT B
, 1994
Board of Directors
Mid States Bancshares, Inc.
501 15th Street
Moline, Illinois 61265
Members of the Board:
Mid States Bancshares, Inc. ("Mid States") has entered into an
Agreement and Plan of Merger (the "Agreement") dated May 25,
1993,
as amended February 22, 1994 and March 25, 1994, between Banc One
Corporation ("Banc One") and Mid States. As is set forth in the
Agreement, each outstanding share of common stock of Mid States
will be exchanged for 2.917 common shares of Banc One (the
"Exchange Rate"). In connection therewith, you have requested
our
opinion as to the fairness of the Exchange Rate, from a financial
point of view, to the shareholders of Mid States.
During the course of our engagement, we have, among other things;
1) Reviewed and analyzed material bearing upon the
financial
and operating condition of Banc One and Mid States and
material prepared in connection with the proposed
transaction;
2) Reviewed the Agreement; certain publicly available
information concerning Banc One and Mid States,
including
financial statements and Consolidated Balance Sheets
and
Statements of Income for each of the five most recent
fiscal years;
3) Reviewed the operating characteristics of certain other
financial institutions deemed relevant to the
contemplated transaction;
4) Reviewed the nature and terms of recent sale and merger
transactions involving banks, thrifts, bank and thrift
holding companies and other financial institutions that
we consider relevant;
5) Reviewed historical and current market data for Banc
One and Mid States common stock;
<PAGE>
Board of Directors
Mid States Bancshares, Inc.
Page -2-
6) Reviewed financial and other information provided to us
by the managements' of Banc One and Mid States;
7) Conducted meetings with members of the senior
management of Banc One and Mid States for the purpose
of reviewing the future prospects of Banc One and Mid
States;
8) Reviewed certain information including forecasts
pertaining to prospective cost savings and revenue
enhancements relative to the proposed transactions;
9) Evaluated the pro forma ownership of Banc One common
stock by Mid States shareholders, relative to the pro
forma contribution of Mid States' assets, liabilities,
equity and earnings to the pro forma company.
We also took into account our experience in other transactions,
as well as our knowledge of the banking industry and our general
experience in securities valuations. The Chicago Corporation
("TCC") is an investment banking and securities firm with
membership on all principal U.S. securities exchanges. As part
of our investment banking services, we are regularly engaged in
the independent valuation of securities in connection with
negotiated underwritings, private placements, merger and
acquisition transactions and recapitalizations.
In rendering this opinion, we have assumed, without independent
verification, the accuracy and completeness of the financial and
other information and representations provided to us by Banc One
and Mid States.
Based on the foregoing and our experience as investment bankers,
we are of the opinion that, as of the date hereof, the Exchange
Rate is fair from a financial point of view, to the shareholders
of Mid States.
Sincerely,
THE CHICAGO CORPORATION
CONSENT OF THE CHICAGO CORPORATION
We hereby consent to the summarization of our fairness opinion
letter and references to our firm under the caption "SUMMARY OF
THE TRANSACTION -- Opinions of Investment Bankers" and to the
inclusion of such letter as Exhibit B to the Proxy Statement -
Prospectus which is part of this Registration Statement on Form
S-4 of BANC ONE CORPORATION. By giving such consent, we do not
thereby admit that we are experts with respect to any part of
such Registration Statement within the meaning of the term
"expert" as used in the Securities and Exchange Commission
promulgated thereunder.
THE CHICAGO CORPORATION
<PAGE>
Chicago, Illinois
April 20, 1994
Opinion of Financial Advisor to Mid States
The Chicago Corporation has delivered its written opinion to Mid
States Board of Directors that, based upon and subject to the
various considerations set forth in the opinion dated
, 1994, the Exchange Ratio is fair from a financial point
of view to Mid States' shareholders as of the date of its
opinion.
The Board of Directors has carefully and thoroughly reviewed the
materials and presentations of The Chicago Corporation and has
made
inquiries of The Chicago Corporation personnel as to the
methodology and the assumptions utilized in its analysis. No
limitations were imposed by Mid States' Board of Directors upon
The
Chicago Corporation with respect to the investigations made or
procedures followed by it in rendering its opinion.
The full text of the opinion of The Chicago Corporation, which
sets
forth assumptions made, matters considered and limitations on the
review undertaken, is attached hereto as Exhibit B. Mid States
shareholders are urged to read the opinion in its entirety.
The Chicago Corporation's opinion is directed only to the
Exchange
Ratio to be received in the Merger and does not constitute a
recommendation to any Mid States shareholder as to how such
shareholder should vote at the Annual Meeting. The summary of
the
opinion of The Chicago Corporation set forth in this
Prospectus/Proxy Statement is qualified in its entirety by
reference to the full text of such opinion attached hereto as
Exhibit B.
Mid States retained The Chicago Corporation as its financial
advisor on the basis of the firm's reputation, experience and
familiarity with the banking industry and with merger and
acquisition transactions. As part of its investment banking
business, The Chicago Corporation is regularly engaged in the
valuation of businesses in connection with mergers and
acquisitions, negotiated underwritings, secondary distribution of
listed and unlisted securities, private placements and valuations
for corporate and other purposes.
During the course of its engagement, and as a basis for arriving
at its opinion, The Chicago Corporation reviewed and analyzed
material bearing upon the financial and operating condition of
Mid States and Banc One and material prepared in connection with
the Merger, as follows: (i) the Merger Agreement; (ii) publicly
available information concerning Mid States and Banc One
including among other things annual reports on form 10-KSB for
Mid States and on form 10-K for Banc One for each of the last
five fiscal years ended; (iii) the nature and terms of recent
sale and merger transactions involving financial institutions
that The Chicago Corporation considered reasonably similar to Mid
States and Banc One in size, financial character, operating
character, historical performance and geographic market; (iv)
historical and current market data for Mid States Common Stock
and Banc One Common Stock and financial and other information
provided to The Chicago Corporation by management of Mid States
and Banc One, and (v) the Registration Statement and this
Prospectus/Proxy Statement.
These analyses are discussed in more detail below. In addition,
The Chicago Corporation conducted meetings with members of senior
management of Mid States and Banc One for the purpose of
reviewing the future prospects of Mid States and Banc One. The
Chicago Corporation evaluated the pro forma ownership of Banc One
Common Stock by Mid States shareholders, relative to the pro
forma contribution of Mid States' assets, liabilities, equity and
earnings of the proposed combined company. The Chicago
Corporation also took into account its experience in other
transactions, as well as its knowledge of the banking industry
and its general experience in securities valuations. In
rendering its opinion, The Chicago Corporation assumed without
independent verification, the accuracy and completeness of the
financial and other information and representations provided to
it by Mid States and Banc One.
The following is a summary of all material terms considered and
the analyses performed by The Chicago Corporation in rendering
its opinion during the course of its engagement in connection
with its , 1994 opinion.
Net Present Value Analysis. The Chicago Corporation prepared a
net present value analysis which indicated theoretical values for
Mid States based on return on average assets ranging between
1.00% and 1.50% and asset growth rates ranging between 2.00% and
10.00%. The results of this analysis indicated a range of
theoretical values for Mid States between $68.05 per share (1.00%
return on average assets; 2.00% asset growth rate) and $138.52
per share (1.50% return on average assets; 10.00% asset growth
rate). At a return on average assets ratio of 1.10%, which
approximated Mid States historical performance, theoretical
values ranged from $74.85 per share (2.00% asset growth rate) to
$101.58 per share (10.00% asset growth rate). At an asset growth
rate of 4.00%, which approximated Mid States' historical
performance, theoretical values ranged from $73.55 per share
(1.00% return on average assets) to $110.32 per share (1.50%
return on average assets).
Contribution Analysis. The Chicago Corporation prepared a
contribution analysis showing the percentages of assets,
deposits, common equity, and 1992 and 1993 net income and
estimated 1994 and 1995 net income contributed to the combined
company on a pro forma basis by Mid States and Banc One, and
compared these percentages to the pro forma ownership of Banc
One. This analysis showed that Mid States, as of December 31,
1993, would contribute 0.24% of pro forma consolidated total
assets, 0.27% of deposits, 0.29% of common equity, 0.23% of 1992
and 0.18% of 1993 net income and 0.19% of estimated 1994 and
0.18% estimated 1995 net income. Based on the Banc One offer,
shareholders of Mid States would own approximately 0.24% of the
pro forma common shares outstanding of Banc One.
Comparable Transaction Analysis. The Chicago Corporation
reviewed selected comparable merger and acquisition transactions.
The following merger transactions were reviewed based on publicly
available data (the acquiror is named first and underlined,
followed by the seller): AMCORE Financial, Inc., First State
Bancorp of Princeton; First Banks, Inc., First FSB of Proviso
Township; Mercantile Bancorporation, Inc., Mount Vernon Bancorp;
CNB Bancshares, Inc., South Central Illinois Bancorp; Old Kent
Financial Corporation, University Financial Corporation; Old
National Bancorp, Palmer Bancorp, Inc.; Banc One Corporation,
Jefferson Bancorp, Inc.; AMCORE Financial, Inc., Dixon Bancorp,
Inc.; Mercantile Bancorporation, Inc., Old National Bancshares;
Old National Bancorp, SBT Bancorp, Inc.; and AMCORE Financial,
Inc., Central of Illinois, Inc. Transactions were selected on
the basis of comparability of absolute transaction value and the
perceived comparability of the markets served by the acquired
institutions to those of Mid States. For the comparable
transactions, the multiple of price to trailing 12 months
earnings ranged from 8.2 to 22.5 with an average of 13.0. At
March 25, 1994, the Banc One proposed purchase price represented
a multiple of price to trailing 12 months earnings of 14.5.
For the comparable transactions, the multiple of purchase price
to book value range from 0.95 to 1.95 with an average of 1.43.
The Banc One offer to Mid States represented a multiple of price
to December 31, 1993 book value of 1.47.
Financial Implications to Mid States Shareholders. The Chicago
Corporation prepared an analysis of the financial implications of
the Banc One offer to a Mid States Shareholder. This analysis
indicated that on a pro forma equivalent basis a shareholder of
Mid States would achieve an increase in earnings per share, a
decrease in per share dividends and an increase in book value per
share as a result of the consummation of the Merger, assuming a
dividend payout ratio significantly higher than Mid States'
historical payout ratio.
Another analysis of the financial implications of the Banc One
offer kept Mid States' dividend payout ratio in line with
historical dividend payouts. This analysis indicated that on a
pro forma equivalent basis a shareholder of Mid States would
achieve an increase in earnings per share, an increase in
dividends per share and a decrease in book value per share.
Comparative Shareholder Returns. The Chicago Corporation
presented an analysis of comparative theoretical shareholder
returns for several scenarios, including Mid States remaining
independent, Mid States being acquired in 1994 and Mid States
being acquired in 1997. This analysis, which was based on the
net present value of projected dividend streams and projected
1997 common stock valuations (using current price-to-trailing
twelve month earnings multiples), indicated total shareholders
returns of 11.4% for Mid States remaining independent, 31.7% for
a merger in 1997 and 38.2% based on the acceptance of an offer in
1994. The Chicago Corporation also prepared an analysis of the
possible pricing of a merger transaction with certain other
Midwest-based bank holding companies using estimated 1994 net
income for Mid States and stock prices for selected companies and
assuming no earnings-per-share dilution for the buyer. The
holding companies reviewed included: AMCORE Financial, Inc.;
Banc One Corporation, Inc.; Commerce Bancshares, Inc.; First Bank
System, Inc.; First Midwest Bancorp; First of America Bank Corp.;
Firstbank of Illinois Co.; Firstar Corporation; Hawkeye
Bancorporation; Magna Group, Inc.; Mercantile Bancorporation,
Inc.; Northwest Illinois Bancorp; and Norwest Corporation.
Given the assumptions, the analysis indicated that these
companies could pay a high of $107.28 per share, a low of $66.12
per share and an average price of $81.72 per share for all of the
shares of Mid States.
A second analysis was conducted under the aforementioned
methodology with the 1994 net income of Mid States to include a
tax-effected 15% reduction in operating expenses. Under that
assumption the previously listed companies could pay a high of
$131.87 per share, a low of $81.27 per share and an average price
of $100.45 per share for all the shares of Mid States.
Comparable Company Analysis. The Chicago Corporation compared
the market price, market-to-book value and price-to-earnings
multiples of Banc One Common Stock with the individual market
multiples and averages of the following selected comparable
companies which it deemed to be reasonably similar to Banc One in
size, financial character, operating character, historical
performance and geographic market: Banc One Corporation;
BankAmerica Corporation; Boatmen's Bancshares, Inc.; Citicorp;
Comerica Incorporated; First Bank System, Inc.; First Chicago
Corporation; First Interstate Bancorp; First of America Bank
Corp.; First Union Corporation; Fleet Financial Group; KeyCorp;
Mellon Bank Corporation; NBD Bancorp, Inc.; National City
Corporation; NationsBank Corporation; Norwest Corporation; and
PNC Bank Corp. This analysis indicated that Banc One Common
Stock sold at a price of 1.87 times the December 31, 1993 book
value and the comparables sold at an average price of 1.56 times
book value. Banc One's Common Stock sold at a multiple of price
to trailing 12 months earnings of 11.2, while the comparable
group average price-to-earnings multiple was 10.0.
The summary of The Chicago Corporation analysis set forth above
is a fair summary thereof but does not purport to be a complete
description of the presentations by The Chicago Corporation to
the Mid States Board of Directors. The Chicago Corporation
believes that its analysis and the summary set forth above must
be considered as a whole and that selecting portions of analysis,
without considering all factors and analyses, could create an
incomplete view of the process by which a fairness opinion is
rendered. In connection with its analyses, The Chicago
Corporation assumed that there would be no material adverse
change in general economic, business, market financial and
regulatory conditions, all of which are beyond the control of
Banc One and Mid States. The analyses performed by The Chicago
Corporation are not necessarily indicative of actual values of
future results, which may be significantly more or less favorable
than suggested by such analyses.
Fees and Indemnification. The fees due to The Chicago
Corporation under the Agreement between The Chicago Corporation
and Mid States (the "Chicago Corporation Agreement") were payable
by Mid States as follows: $25,000 at the date of execution of The
Chicago Corporation Agreement and $25,000 upon delivery of verbal
conclusions and $50,000 at the time a written opinion is
delivered for the proxy statement.
In addition to such fees, Mid States has agreed to reimburse The
Chicago Corporation for all reasonable out-of-pocket expenses and
will pay to The Chicago Corporation a fee of $1,500 per day for
preparation and court appearances with regard to the fairness
opinion. Mid States has also agreed to indemnify The Chicago
Corporation, its officers, directors, agents, employees and
certain controlling persons from and against any losses, claims,
damages and liabilities in connection with or arising out of the
transactions or services referred to in The Chicago Corporation
Agreement. This indemnification is subject to certain conditions
and procedures set forth in an indemnification agreement between
Mid States and The Chicago Corporation.
EXHIBIT C
DELAWARE GENERAL CORPORATION LAW
Section 262. Appraisal rights.
(a) Any stockholder of a corporation of this State who holds shares of
stock on the date of the making of a demand pursuant to subsection (d)
of this section with respect to such shares, who continuously holds
such shares through the effective date of the merger or consolidation,
who has otherwise complied with subsection (d) of this section and who
has neither voted in favor of the merger or consolidation nor
consented thereto in writing pursuant to Section 228 of this title
shall be entitled to an appraisal by the Court of Chancery of the fair
value of his shares of stock under the circumstances described in sub-
sections (b) and (c) of this section. As used in this section, the
word "stockholder" means a holder of record of stock in a stock
corporation and also a member of record of a nonstock corporation; the
words "stock" and "share" mean and include what is ordinarily meant
by those words and also membership or membership interest of a
member of a nonstock corporation.
(b) Appraisal rights shall be available for the shares of any class or
series of stock of a constituent corporation in a merger or
consolidation to be effected pursuant to Sections 251, 252, 254,
257, 258 or 263 of this title:
(1) Provided, however, that no appraisal rights under this section
shall be available for the shares of any class or series of stock
which, at the record date fixed to determine the stockholders
entitled to receive notice of and to vote at the meeting of
stockholders to act upon the agreement of merger or
consolidation, were either (i) listed on a national securities
exchange or designated as a national market system security on an
interdealer quotation system by the National Association of
Securities Dealers, Inc. or (ii) held of record by more than
2,000 stockholders; and further provided that no appraisal rights
shall be available for any shares of stock of the constituent
corporation surviving a merger if the merger did not require for
its approval the vote of the stockholders of the surviving
corporation as provided in subsection (f) of Section 261 of
this title.
(2) Notwithstanding paragraph (1) of this subsection, appraisal
rights under this section shall be available for the shares of
any class or series of stock of a constituent corporation if the
holders thereof are required by the terms of an agreement of
merger or consolidation pursuant to Sections 251, 252, 254,
257, 258 and 263 of this title to accept for such stock anything
except:
a. Shares of stock of the corporation surviving or resulting from
such merger or consolidation;
b. Shares of stock of any other corporation which at the
effective date of the merger or consolidation will be either
listed on a national securities exchange or designated as a
national market system security on an interdealer quotation
system by the National Association or Securities Dealers, Inc.
or held of record by more than 2,000 stockholders;
<PAGE>
c. Cash in lieu of fractional shares of the corporations
described in the foregoing subparagraphs a. and b. of this
paragraph; or
d. Any combination of the shares of stock and cash in lieu of
fractional shares described in the foregoing subparagraphs a.,
b. and c. of this paragraph.
(3) In the event all of the stock of a subsidiary Delaware corpora-
tion party to a merger effected under Section 253 of this title
is not owned by the parent corporation immediately prior to the
merger, appraisal rights shall be available for the shares of the
subsidiary Delaware corporation.
(c) Any corporation may provide in its certificate of incorporation that
appraisal rights under this section shall be available for the shares
of any class or series of its stock as a result of an amendment to its
certificate of incorporation, any merger or consolidation in which the
corporation is a constituent corporation or the sale of all or
substantially all of the assets of the corporation. If the
certificate of incorporation contains such a provision, the procedures
of this section, including those set forth in subsections (d) and (e)
of this section, shall apply as nearly as is practicable.
(d) Appraisal rights shall be perfected as follows:
(1) If a proposed merger or consolidation for which appraisal rights
are provided under this section is to be submitted for approval
at a meeting of stockholders, the corporation, not less than 20
days prior to the meeting, shall notify each of its stockholders
who was such on the record date for such meeting with respect to
shares for which appraisal rights are available pursuant to
subsection (b) or (c) hereof that appraisal rights are available
for any or all of the share of the constituent corporations, and
shall include in such notice a copy of this section. Each
stockholder electing to demand the appraisal off his shares shall
deliver to the corporation, before the taking of the vote on the
merger or consolidation, a written demand for appraisal of his
shares. Such demand will be sufficient if it reasonably informs
the corporation of the identity of the stockholder and that the
stockholder intends thereby to demand the appraisal of his
shares. A proxy or vote against the merger or consolidation
shall not constitute such a demand. A stockholder electing to
take such action must do so by a separate written demand as
herein provided. Within 10 days after the effective date of such
merger or consolidation, the surviving or resulting corporation
shall notify each stockholder of each constituent corporation who
has complied with this subsection and has not voted in favor of
or consented to the merger or consolidation of the date that the
merger or consolidation has become effective; or
(2) If the merger or consolidation was approved pursuant to Section
228 or 253 of this title, the surviving or resulting corporation,
either before the effective date of the merger or consolidation
or within 10 days thereafter, shall notify each of the stock-
holders entitled to appraisal rights of the effective date of the
merger or consolidation and that appraisal rights are available
for any or all of the shares of the constituent corporation, and
shall include in such notice a copy of this section. The notice
shall be sent by certified or registered mail, return receipt
requested, addressed to the stockholder at his address as it
appears on the records of the corporation. Any stockholder
entitled to appraisal rights may, within 20 days after the date
of mailing of the notice, demand in writing from the surviving or
resulting corporation the appraisal of his shares. Such demand
will be sufficient if it reasonably informs the corporation of
the identify of the stockholder and that the stockholder intends
thereby to demand the appraisal of his shares.
(e) Within 120 days after the effective date of the merger or
consolidation, the surviving or resulting corporation or any
stockholder who has complied with subsections (a) and (d) hereof and
who is otherwise entitled to appraisal rights, may file a petition in
the Court of Chancery demanding a determination of the value of the
stock of all such stockholders. Notwithstanding the foregoing, at any
time within 60 days after the effective date of the merger or
consolidation, any stockholder shall have the right to withdraw his
demand for appraisal and to accept the terms offered upon the merger
or consolidation. Within 120 days after the effective date of the
merger or consolidation, any stockholder who ahs complied with the
requirements of subsections (a) and (d) hereof, upon written request,
shall be entitled to receive from the corporation surviving the merger
or resulting from the consolidation a statement setting forth the
aggregate number of shares not voted in favor of the merger or
consolidation and with respect to which demands for appraisal have
been received and the aggregate number of holders of such shares.
Such written statement shall be mailed to the stockholder within 10
days after his written request for such a statement is received by the
surviving or resulting corporation or within 10 days after expiration
of the period for delivery of demands for appraisal under subsection
(d) hereof, whichever is later.
(f) Upon the filing of any such petition by a stockholder, service of a
copy thereof shall be made upon the surviving or resulting
corporation, which shall within 20 days after such service file in the
office of the Register in Chancery in which the petition was filed a
fully verified list containing the names and addresses of all
stockholders who have demanded payment for their shares and with whom
agreements as to the value of their shares have not been reached by
the surviving or resulting corporation. If the petition shall be
filed by the surviving or resulting corporation, the petition shall be
accompanied by such a duly verified list. The Register in Chancery,
if so ordered by the Court, shall give notice of the time and place
fixed for the hearing of such petition by registered,
certified mail to the surviving or resulting corporation and to the
stockholders shown on the list of the addresses therein stated. Such
notice shall also be given by 1 or more publications at least 1 week
before the day of the hearing, in a newspaper of general circulation
published in the City of Wilmington, Delaware or such publication as
the Court deems advisable. The forms of the notices by mail and by
publication shall be approved by the Court, and the costs thereof
shall be borne by the surviving or resulting corporation.
(g) At the hearing on such petition, the Court shall determine the
stockholders who have complied with this section and who have become
entitled to appraisal rights. The Court may require the stockholders
who have demanded an appraisal for their shares and who hold stock
represented by certificates to submit their certificates of stock to
the Register in Chancery for notation thereon of the pendency of the
appraisal proceedings, and if any stockholder fails to comply with
such direction, the Court may dismiss the proceedings as to such
stockholder.
(h) After determining the stockholders entitled to an appraisal, the Court
shall appraise the shares, determining their fair value exclusive of
any element of value arising from the accomplishment or expectation of
the merger or consolidation, together with a fair rate of interest, if
any, to be paid upon the amount determined to be the fair value. In
determining such fair value, the Court shall take into account all
relevant factors. In determining the fair rate of interest, the Court
may consider all relevant factors, including the rate of interest
which the surviving or resulting corporation would have had to pay to
borrow money during the pendency of the proceeding. Upon application
by the surviving or resulting corporation or by any stockholder
entitled to participate in the appraisal proceeding, the Court may, in
its discretion, permit discovery or other pretrial proceedings and may
proceed to trial upon the appraisal prior to the final determination
of the stockholder entitled to an appraisal. Any stockholder whose
name appears on the list filed by the surviving or resulting
corporation pursuant to subsection (f) of this section and who has
submitted his certificates of stock to the Register in Chancery, if
such is required, may participate fully in all proceedings until it is
finally determined that he is not entitled to appraisal rights under
this section.
(i) The Court shall direct the payment of the fair value of the shares,
together with interest, if any, by the surviving or resulting
corporation to the stockholders entitled thereto. Interest may be
simple or compound, as the Court may direct. Payment shall be so made
to each such stockholder, in the case of holders of uncertificated
stock forthwith, and the case of holders of shares represented by
certificates upon the surrender to the corporation of the certificates
representing such stock. The Court's decree may be enforced as other
decrees in the Court of Chancery may be enforced, whether such
surviving or resulting corporation be a corporation of this State or
of any state.
<PAGE>
(j) The costs of the proceeding may be determined by the Court and taxed
upon the parties as the Court deems equitable in the circumstances.
Upon application of a stockholder, the Court may order all or a
portion of the expenses incurred by any stockholder in connection with
the appraisal proceeding, including, without limitation, reasonable
attorney's fees and the fees and expenses of experts, to be charged
pro rata against the value of all the shares entitled to an appraisal.
(k) From and after the effective date of the merger or consolidation, no
stockholder who has demanded his appraisal right as provided in
subsection (d) of this section shall be entitled to vote such stock
for any purpose or to receive payment of dividends or other
distributions payable to stockholders of record at a date which is
prior to the effective date of the merger or consolidation; provided,
however, that if no petition for an appraisal shall be filed within
the time provided in subsection (e) of this section, or if such
stockholder shall deliver to the surviving or resulting corporation a
written withdrawal of his demand for an appraisal and an acceptance of
the merger or consolidation, either within 60 days after the effective
date of the merger or consolidation as provided in subsection (e) of
this section or thereafter with the written approval of the
corporation, then the right of such stockholder to an appraisal shall
cease. Notwithstanding the foregoing, no appraisal proceeding in the
Court of Chancery shall be dismissed as to any stockholder without the
approval of the Court, and such approval may be conditioned upon such
terms as the Court deems just.
(l) The shares of the surviving or resulting corporation to which the
shares of such objecting stockholders would have been converted had
they assented to the merger or consolidation shall have the status of
authorized and unissued shares of the surviving or resulting corpora-
tion. (8 Del. C. 1953, Section 262; 56 Del. Laws, c. 50; 56 Del. Laws,
c. 186, Section 24; 57 Del. Laws, c. 148, Sections 27-29; 59 Del.
Laws, c. 106, Section 12; 60 Del. Laws, c. 371, Sections 3-12; 63 Del.
Laws, c. 25, Section 14; 63 Del. Laws, c. 152, Sections 1,2; 64 Del.
Laws, c. 112, Sections 46-54; 66 Del. Laws, c. 136, Sections 30-32;
66 Del. Laws, c. 352, Section 9; 67 Del. Laws, c. 376, Sections 19,
20.)
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 20. Indemnification of Officers and Directors.
Section 1701.13(E) of the Ohio General Corporation Law sets forth provisions
which define the extent to which a corporation may indemnify directors,
officers, and employees. Those provisions have been adopted by the Registrant
in Article V of Registrant's Code of Rights. Article V provides for the
indemnification or the purchase of insurance for the benefit of the directors,
officers, employees and agents of the Registrant in the event such persons are
subject to legal action as a result of actions in their capacities as
directors, officers, employees or agents of the Registrant. Registrant has
entered into indemnification agreements with its directors and executive
officers that provide for indemnification unless the indemnitee's conduct is
finally adjudged by a court to be knowingly fraudulent, deliberately dishonest
or willful misconduct. Registrant indemnifies other officers, employees or
agents provided such persons acted in good faith and in a manner which they
reasonably believed to be in or not opposed to the best interest of the
Registrant or, with respect to criminal actions, had no reason to believe was
unlawful.
Item 21. Exhibits and Financial Statement Schedules.
The following exhibits are filed herewith except those indicated which have
been filed previously as shown below and which are incorporated herein by
reference.
2.1 Merger Agreement dated May 25, 1993 , as amended on January 12, 1994
and March 25, 1994 by and among Mid States Bancshares, Inc., Banc One
Illinois Corporation and joined in by BANC ONE CORPORATION.
2.3 Form of Proxy to be used by Mid States Bancshares, Inc.
3.1 Amended Articles of Incorporation of the Registrant (incorporated by
reference from Exhibit 3-1 of the Annual Report of the Registrant on
Form 10-K for the year ended December 31, 1991.)
3.2 Code of Regulations of the Registrant (incorporated by reference from
Exhibit 3-2 of the Annual Report of the Registrant on Form 10-K for the
year ended December 31, 1991).
4.1 Form of Common Stock Certificate of the Registrant (incorporated by
reference from Exhibit 4.1 to the Annual Report of the Registrant on
Form 10-K for the year ended December 31, 1989).
5 Opinion of Roman J. Gerber, Executive Vice President and Counsel for BANC
ONE CORPORATION, regarding the legality of securities being offered,
including consent.
8 Opinion of Vedder, Price, Kaufman & Kammholz regarding certain federal
income tax consequences of the Merger, including consent.
24 Consent of Coopers & Lybrand.
24.1 Consent of McGladrey & Pullen.
24.2 Consent of Donaldson, Lufkin & Jenrette Securities Corporation is
included in its opinion which is Exhibit A to the Prospectus and Proxy
Statement.
24.3 Consent of The Chicago Corporation is included in its opinion which is
Exhibit B to the Prospectus and Proxy Statement.
25 Power of attorney is included elsewhere in Part II of this Registration
Statement.
Item 22. Undertakings.
(a) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing
of the Registrant's annual report pursuant to Section 13(a) or Section
15(d) of the Securities Exchange Act of 1934 that is incorporated by
reference in the Registration Statement shall be deemed to be a new
Registration Statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(b) The undersigned Registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use
of a prospectus which is a part of this Registration Statement, by any
person or party who is deemed to be an underwriter within the meaning of
Rule 145(c), the issuer undertakes that such reoffering prospectus will
contain the information called for by the applicable registration form
with respect to reofferings by persons who may be deemed underwriters, in
addition to the information called for by the other Items of the
applicable form.
(c) The Registrant hereby undertakes that every prospectus (i) that is filed
pursuant to paragraph (a) above, or (ii) that purports to meet the
requirements of Section 10(a)(3) of the Act and is used in connection
with an offering of securities subject to Rule 415, will be filed as a
part of an amendment to the Registration Statement and will not be used
until such amendment has become effective, and that for the purpose of
determining liabilities under the Act, each such post-effective amendment
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that
time shall be deemed to be the initial bona fide offering thereof.
(d) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Act and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities (other
than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities
being registered, the Registrant will, unless in the opinion of its
counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act
and will be governed by the final adjudication of such issue.
(e) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the Prospectus
pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business
day of receipt of such request, and to send the incorporated documents by
first class mail or other equally prompt means. This includes
information contained in documents filed subsequent to the effective date
of the registration statement through the date of responding to the
request.
(f) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and
the company being acquired involved therein, that was not the subject of
and included in the registration statement when it became effective.
(g) The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in the registration statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement:
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Post Effective Amendment No. 1 to the Registration Statement to be
signed on its behalf by the undersigned, thereunto duly authorized, in the City
of Columbus, State of Ohio, on April 21, 1994.
BANC ONE CORPORATION
By: ROMAN J. GERBER
Roman J. Gerber
Executive Vice President
WITNESS our hands and common seal on the dates set forth below.
Pursuant to the requirements of the Securities Act of 1933, this Post Effective
Amendment No. 1 to the Registration Statement has been signed by the following
persons in the capacities and on the dates indicated:
Signature Title Date
* Chairman of the Board
John B. McCoy (Principal Executive Officer
& Director)
* President and Director
Donald L. McWhorter
* Senior Vice President
Frederick L. Cullen (Principal Financial Officer)
* Controller (Principal
William C. Leiter Accounting Officer)
* Director
Charles E. Exley
* Director
E. Gordon Gee
* Director
John R. Hall
* Director
Laban P. Jackson, Jr.
* Director
John G. McCoy
* Director
Rene C. McPherson
* Director
Thekla R. Shackelford
Director
Alex Shumate
* Director
Frederick P. Stratton, Jr.
* Director
Romeo J. Ventres
* Director
Robert D. Walter
* ROMAN J. GERBER
Roman J. Gerber
Attorney-in-Fact
EXHIBIT INDEX
EXHIBIT NO. EXHIBIT TITLE
2.1 Merger Agreement dated May 25, 1993 , as amended on
February 22, 1994 and March 25, 1994, by and among
Mid States Bancshares, Inc., Banc One Illinois Corporation and
joined in by BANC ONE CORPORATION.
2.3 Form of Proxy to be used by Mid States Bancshares, Inc.
5 Opinion of Roman J. Gerber, Executive Vice President and Counsel
for BANC ONE CORPORATION, regarding the legality of securities
being offered, including consent.
8 Opinion of Vedder, Price, Kaufman & Kammholz regarding certain
federal income tax consequences of the Merger, including consent.
24 Consent of Coopers & Lybrand.
24.1 Consent of McGladrey & Pullen.
AGREEMENT and PLAN OF MERGER
between
MID STATES BANCSHARES, INC.
and
BANC ONE ILLINOIS CORPORATION
and joined in by
BANC ONE CORPORATION
TABLE OF CONTENTS TO MERGER AGREEMENT
Page
RECITALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Section 1. Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 2. Name . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 3. Business . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Section 4. Effective Time of Merger; Articles of Incorporation . . . . 3
Section 5. Effect of Merger . . . . . . . . . . . . . . . . . . . . . . 4
Section 6. Liabilities upon Merger; Service of Process . . . . . . . . 4
Section 7. Conversion of Shares . . . . . . . . . . . . . . . . . . . . 5
Section 8. Board of Directors; Employees; and Name Change; . . . . . . 8
Section 9. Stock Options and Employee Benefits . . . . . . . . . . . . 9
Section 10. Undertakings of the Parties . . . . . . . . . . . . . . . . 9
Section 11. Dissenting Shareholders . . . . . . . . . . . . . . . . . . 15
Section 12. Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . 16
Section 13. Representations and Warranties of BANC ONE . . . . . . . . . 17
Section 14. Representations and Warranties of BANC ONE ILLINOIS . . . . 28
Section 15. Representations and Warranties of MID STATES . . . . . . . . 29
Section 16. Action by MID STATES Pending Effecting Time . . . . . . . . 41
Section 17. Action by BANC ONE Pending Effective Time . . . . . . . . . 45
Section 18. Conditions to Obligations of BANC ONE and
BANC ONE ILLILNOIS . . . . . . . . . . . . . . . . . . . . 46
Section 19. Conditions to Obligations of MID STATES . . . . . . . . . . 48
Section 20. Conditions to Obligations of All Parties . . . . . . . . . . 51
Section 21. Indemnification . . . . . . . . . . . . . . . . . . . . . . 52
Section 22. Non-Survival of Representations and Warranties . . . . . . . 55
Section 23. Governing Law . . . . . . . . . . . . . . . . . . . . . . . 55
Section 24. Assignment . . . . . . . . . . . . . . . . . . . . . . . . . 55
Section 25. Satisfaction of Conditions; Termination . . . . . . . . . . 56
Section 26. Waivers; Amendments . . . . . . . . . . . . . . . . . . . . 59
Section 27. Entire Agreement . . . . . . . . . . . . . . . . . . . . . . 60
Section 28. Captions; Counterparts . . . . . . . . . . . . . . . . . . . 60
Section 29. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 60
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
EXHIBIT A - MID STATES Subsidiaries List
EXHIBIT B - Form of Plan of Merger
EXHIBIT C - Form of Undertaking by Affiliates
EXHIBIT D - Opinion of Counsel for MID STATES
EXHIBIT D - Opinion of Counsel for BANC ONE and BANC ONE ILLINOIS
AGREEMENT and PLAN OF MERGER
AGREEMENT and PLAN OF MERGER dated May 25, 1993 (hereinafter called the "Merger
Agreement"), between Mid States Bancshares, Inc. (hereinafter called "MID
STATES") and BANC ONE ILLINOIS CORPORATION (hereinafter called "BANC ONE
ILLINOIS") and joined in by BANC ONE CORPORATION (hereinafter called "BANC
ONE").
WITNESSETH:
MID STATES is a corporation duly organized under the laws of the State of
Delaware. Its principal office is located at 506 15th Street, Moline, Rock
Island County, Illinois. As of March 31, 1993, MID STATES had authorized
capital stock consisting of 750,000 shares of common stock with par value of
$5.00 per share ("MID STATES Common"), 311,560 of which shares were issued and
outstanding and 3,040 of which were shares of treasury stock owned by MID
STATES. Except as set forth in Exhibit A hereto, MID STATES owns, beneficially
and of record, all of the issued and outstanding capital stock of the bank
listed in Exhibit A hereto (the "Bank") and of the corporations listed in
Exhibit A hereto (the "Companies"). The Bank and the Companies are hereinafter
referred to collectively as the "Subsidiaries" and each, sometimes, as a
"Subsidiary."
BANC ONE ILLINOIS is a corporation duly organized under the laws of the State
of Illinois. Its principal office is located at One East Old State Capitol
Plaza, Springfield, Sangamon County, Illinois. As of March 31, 1993, BANC ONE
ILLINOIS had capital stock of $100 divided into 100 shares of common stock with
par value of $1.00 per share ("BANC ONE ILLINOIS Common") all of which were
issued and outstanding. As of March 31, 1993, BANC ONE ILLINOIS had surplus of
$130,063,525 and undivided profits, including capital reserves, of $170,656,325
and total consolidated assets of $3,025,537,402. BANC ONE ILLINOIS is a wholly
owned subsidiary of BANC ONE.
BANC ONE is a corporation duly organized under the laws of the State of Ohio.
Its principal office is located at 100 East Broad Street, Columbus, Franklin
County, Ohio. As of March 31, 1993 BANC ONE had capital stock of
$1,551,467,000, divided into 600,000,000 shares of common stock, without par
value ("BANC ONE Common"), 258,798,094 of which shares of BANC ONE Common were
issued and outstanding and none of which were shares of treasury stock owned by
BANC ONE, and 35,000,000 shares of preferred stock without par value, of which
287,536 were issued and outstanding as Class B Convertible, no par value
shares, and 5,000,000 shares were issued and outstanding as Series C $3.50
Cumulative Convertible Preferred Stock. As of March 31, 1993, BANC ONE had
surplus of $2,776,022,000 undivided profits, including capital reserves, of
$1,676,013,000, and total consolidated assets of $69,705,594,000.
The respective Boards of Directors of MID STATES, BANC ONE ILLINOIS and BANC
ONE have each approved this Merger Agreement and the consummation of the
transactions hereby and have approved the execution and delivery of this Merger
Agreement. This Merger Agreement provides for the merger of MID STATES with
and into BANC ONE ILLINOIS upon the terms and conditions of this Merger
Agreement (the "Merger"). BANC ONE ILLINOIS will be the surviving corporation
of the Merger. From and after the Effective Time, as defined in Section 4 of
this Merger Agreement, and as and when required by this Merger Agreement, BANC
ONE will issue shares of BANC ONE Common in exchange for all of the issued and
outstanding shares of MID STATES Common (excluding any shares held by MID
STATES as treasury shares). It is understood by each of the parties hereto
that BANC ONE seeks, as a result of the Merger, to acquire MID STATES, the Bank
and the Companies and all of their respective operating assets and
liabilities. Subject to the terms and conditions of this Merger Agreement, all
parties will exert their reasonable best efforts to obtain such regulatory
approvals and to effect such other actions as are necessary or appropriate to
consummate the Merger. Except as may be required upon application of Section
7(e) of this Merger Agreement, BANC ONE will issue not more than 616,888 shares
of BANC ONE Common in connection with the transactions contemplated by this
Merger Agreement.
In consideration of the premises, MID STATES, BANC ONE and BANC ONE ILLINOIS
hereby make this Merger Agreement and prescribe the terms and conditions of the
Merger and the mode of carrying the Merger into effect as follows:
1. Merger. Subject to the terms and conditions hereinafter set forth, MID
STATES shall be merged with and into BANC ONE ILLINOIS pursuant to and in
accordance with applicable provisions of the Illinois Business Corporation
Act of 1983, as amended (the "Illinois BCA") and the General Corporation
Law of the State of Delaware (the "Delaware GCL").
2. Name. The name of the surviving corporation (hereinafter called the
"Surviving Corporation" whenever reference is made to it as of the
Effective Time or thereafter) shall be "BANC ONE ILLINOIS CORPORATION."
3. Business. The business of BANC ONE ILLINOIS as the Surviving Corporation
shall be that of a bank holding company. The Surviving Corporation shall
exist by virtue of, and be governed by the laws of the State of Illinois
and shall have its principal office at One East Old State Capitol Plaza,
Springfield, Illinois.
4. Effective Time of Merger; Articles of Incorporation. The Merger shall
become effective upon the later to occur of (a) issuance by the Secretary
of State of the State of Illinois of a certificate of merger with respect
thereto as provided in applicable provisions of the Illinois BCA and (b)
the filing of a certificate of merger with the Secretary of State of the
State of Delaware (the "Effective Time").
Attached to this Merger Agreement as Exhibit B is a Plan of Merger (the
"Plan of Merger") containing certain of the terms of this Merger Agreement,
which shall be set forth in substantially the form of such Exhibit B (as
the "plan of merger" with respect to the Merger referred to in Section
11.25 and the other applicable provisions of the Illinois BCA) in the
Articles of Merger filed by MID STATES and BANC ONE ILLINOIS with the
Secretary of State of the State of Illinois in order to make the Merger
effective.
The Articles of Incorporation of BANC ONE ILLINOIS in effect as of the
Effective Time shall be the Articles of Incorporation of the Surviving
Corporation, and the By-Laws of BANC ONE ILLINOIS in effect as of the
Effective Time shall be the By-Laws of the Surviving Corporation.
5. Effect of Merger. At the Effective Time, the separate corporate existence
of MID STATES and BANC ONE ILLINOIS, respectively, shall, as provided in
applicable provisions of the Illinois BCA and the Delaware GCL, be merged
into and continued in BANC ONE ILLINOIS as the Surviving Corporation, which
shall be deemed to be the same corporation as MID STATES and BANC ONE
ILLINOIS. All rights, franchises and interests of MID STATES and BANC ONE
ILLINOIS, respectively, in and to every type of property, real, personal
and mixed, and choses in action, shall be transferred to and vested in BANC
ONE ILLINOIS as the Surviving Corporation by virtue of the Merger without
any deed or other transfer in the same manner and to the same extent as
such rights, franchises and interests were held or enjoyed by MID STATES
and BANC ONE ILLINOIS, respectively, at the Effective Time, as provided in
applicable provisions of the Illinois BCA and Delaware GCL.
6. Liabilities upon Merger; Service of Process. The Surviving Corporation
shall be responsible for all of the liabilities of every kind and
description of MID STATES and BANC ONE ILLINOIS existing as of the
Effective Time, including, but not limited to, employment agreements and
severance agreements, except as may be specifically provided otherwise in
this Merger Agreement.
The filing with the Delaware Secretary of State of an appropriate
certificate of merger or other appropriate document as required by the
Delaware GCL shall operate as a consent by the Surviving Corporation that
it may be sued and served with process in the State of Delaware in any
suit, action or proceeding for the enforcement of any obligation or
liability of MID STATES or BANC ONE ILLINOIS including any amount payable
to any dissenting shareholder; as the consent by the Surviving Corporation
to service upon and by the Secretary of State of the State of Delaware as
agent of the Surviving Corporation to accept service of process in any such
suit, action or proceeding for the enforcement of any such obligation or
liability; and as an appointment by the Surviving Corporation of Willard
Bunn III, whose address is One East Old State Capitol Plaza, Springfield,
Illinois 62701 as agent of the Surviving Corporation for service of
process in any action, suit or proceeding to enforce any such obligation or
liability of MID STATES or BANC ONE ILLINOIS, to whom the Secretary of
State of the State of Delaware may mail a copy of any such process served
upon the Secretary of State of the State of Delaware.
7. Conversion of Shares.
(a) At the Effective Time:
(i) Each of the not more than 311,560 shares of MID STATES Common
that shall be issued and outstanding immediately prior to the
Effective Time (excluding any shares held by MID STATES as
treasury shares) shall thereupon and without further action be
converted into 1.98 shares of BANC ONE Common, subject, however,
to (A) the anti-dilution provisions of Sections 7(e) of this
Merger Agreement and (B) provisions set forth in Section 7(c)
herein relative to fractional shares (the "Exchange Rate").
(ii) The 100 shares of BANC ONE ILLINOIS Common issued and
outstanding immediately prior to the Effective Time shall
continue to be issued and outstanding shares of common stock
without par value of the Surviving Corporation.
(iii) All of the shares of MID STATES Common held by MID STATES as
treasury shares immediately prior to the Effective Time shall be
cancelled and shall not represent capital stock of the Surviving
Corporation and shall not be exchanged for shares of BANC ONE
Common.
(b) At the Effective Time, stock issued by reason of the Merger shall be
allocated to the shareholders of record of MID STATES as of the
Effective Time with such shares of BANC ONE Common to be equal to the
number of shares of MID STATES Common outstanding immediately prior to
the Effective Time multiplied by the Exchange Rate as calculated
pursuant to Section 7(a). Such allocation of BANC ONE Common for each
share of MID STATES Common held of record at the Effective Time made
on the basis of the Exchange Rate is subject to limitations relative
to fractional shares as set forth in Section 7(c) herein and to
adjustments pursuant to the anti-dilution provisions of Section 7(e).
(c) No certificate for fractional shares of BANC ONE Common will be issued
by BANC ONE in connection with the exchange contemplated by the
Merger, but in lieu thereof, any holder of MID STATES Common shall,
upon surrender of the certificate or certificates representing such
MID STATES Common, be paid cash, without interest, by BANC ONE for
such fractional shares on the basis of the BANC ONE Average Price (as
hereinafter defined). The BANC ONE Average Price shall mean the
average of the closing prices of BANC ONE Common on the New York Stock
Exchange ("NYSE") during the Valuation Period (as hereinafter defined)
in The Wall Street Journal for NYSE Composite Transactions. The term
"Valuation Period" shall mean the ten consecutive NYSE trading days
ending on the sixth NYSE trading day immediately prior to the proposed
Effective Time, as designated by BANC ONE pursuant to Section 10(c) of
this Merger Agreement.
(d) At the Effective Time, holders of certificates formerly representing
shares of MID STATES will tender such certificates to BANC ONE and
subject to the provisions set forth above relating to fractional
shares, BANC ONE, or BANK ONE, INDIANAPOLIS, N.A., as Exchange Agent
for BANC ONE, will distribute to the holders of certificates formerly
representing shares of MID STATES Common in exchange for and upon
surrender for cancellation by such holders of a certificate or
certificates formerly representing shares of MID STATES Common the
certificate(s) for shares of BANC ONE Common in accordance with the
Exchange Rate. Each certificate formerly representing MID STATES
Common (other than certificates representing shares of MID STATES
Common subject to the rights of dissenting shareholders) shall be
deemed for all purposes to evidence the ownership of the number of
shares of BANC ONE Common and cash for fractional shares into which
such shares have been converted, except, however, and notwithstanding
the foregoing, that, until such surrender of the certificate or
certificates formerly representing shares of MID STATES Common, the
holder thereof shall not be entitled to receive any dividend or other
payment or distribution payable to holders of BANC ONE Common. Upon
such surrender (or in lieu of surrender other provisions reasonably
satisfactory to BANC ONE as are made as set forth in the next
following paragraph), there shall be paid to the person entitled
thereto the aggregate amount of dividends or other payments or
distributions (in each case without interest) which became payable
after the Effective Time on the whole shares of BANC ONE Common
represented by the certificates issued upon such surrender and
exchange or in accordance with such other provisions, as the case may
be. After the Effective Time, the holders of certificates formerly
representing shares of MID STATES Common shall cease to have rights
with respect to such shares (except such rights, if any, as they may
have as dissenting shareholders), and except as aforesaid, their sole
rights shall be to exchange said certificates for shares of BANC ONE
Common and cash for fractional shares in accordance with this Merger
Agreement.
Certificates representing shares of MID STATES Common surrendered for
cancellation by each shareholder entitled to exchange shares of MID
STATES Common for shares of BANC ONE Common by reason of the Merger
shall be appropriately endorsed or accompanied by such appropriate
instruments of transfer as BANC ONE may reasonably require; provided,
however, that if there be delivered to BANC ONE by any person who is
unable to produce any such certificate formerly representing shares of
MID STATES Common for transfer (i) evidence to the reasonable
satisfaction of BANC ONE that any such certificate has been lost,
wrongfully taken or destroyed, (ii) such security or indemnity as
reasonably may be requested by BANC ONE to save it harmless, and (iii)
evidence to the reasonable satisfaction of BANC ONE that such person
is the owner of the shares theretofore represented by each certificate
claimed by him or her to be lost, wrongfully taken or destroyed and
that he or she is the person who would be entitled to present each
such certificate and to receive shares of BANC ONE Common pursuant to
this Merger Agreement, then BANC ONE, in the absence of actual notice
to it that any shares theretofore represented by any such certificate
have been acquired by a bona fide purchaser, shall deliver to such
person the certificate(s) representing shares of BANC ONE Common which
such person would have been entitled to receive upon surrender of each
such lost, wrongfully taken or destroyed certificate of MID STATES
Common.
(e) If prior to the Effective Time BANC ONE or MID STATES shall (i)
declare a stock dividend upon or subdivide, split up, reclassify or
combine its shares of common stock; or (ii) declare a dividend or make
a distribution on its common stock in any security convertible into
its common stock, appropriate adjustment or adjustments will be made
in the Exchange Rate.
8. Board of Directors; Employees; and Name Changes. The directors of BANC ONE
ILLINOIS immediately prior to the Effective Time, together with MID STATES
director Thomas H. Robinson, shall serve as the directors of the Surviving
Corporation immediately following the Effective Time and until the next
annual meeting of shareholders at which their respective successors are
elected and qualified. The officers and employees of the Surviving
Corporation immediately following the Effective Time shall be the officers
and employees of BANC ONE ILLINOIS immediately before the Effective Time
with each such person to hold the same office in the Surviving Corporation
as held by such person in BANC ONE ILLINOIS. The directors, officers and
employees of the Subsidiaries immediately following the Effective Time
shall be the directors, officers and employees of the respective
Subsidiaries immediately before the Effective Time.
MID STATES will cooperate with BANC ONE in the procurement of requisite
corporate and regulatory approvals and will use its reasonable best efforts
to take such other steps as are appropriate and necessary to effect changes
in the name of each of the Subsidiaries to include the words "BANK ONE" or
"BANC ONE" so that such name changes will become effective at the Effective
Time.
9. Stock Options and Employee Benefits.
(a) As of the date of the Merger Agreement, there are no outstanding and
unexercised stock options for shares of MID STATES Common.
(b) All employee benefit programs of MID STATES and the Subsidiaries will
be terminated, grandfathered or merged in BANC ONE benefit plans and
programs will be made available and applicable to the employees of MID
STATES and the Subsidiaries following the Effective Time and shall be
as described in and governed by a Benefits Letter Agreement dated May
24, 1993, pertaining to benefits between MID STATES and BANC ONE (the
"Benefits Agreement") or in the Second Benefits Letter Agreement dated
May 24, 1993 pertaining to employee issues between MID STATES and BANC
ONE (the "Second Benefits Agreement").
10. Undertakings of the Parties. MID STATES, BANC ONE ILLINOIS and BANC ONE
further agree as follows:
(a) This Merger Agreement and the Plan of Merger shall be submitted to the
shareholders of MID STATES for approval at a meeting to be called and
held in accordance with applicable law and the Certificate of
Incorporation and By-Laws of MID STATES. Such shareholders' meeting
will be scheduled to be held approximately 30 days following the
mailing by MID STATES of its proxy statement to its shareholders
promptly following the effective date of the registration statement to
be filed by BANC ONE with the Securities and Exchange Commission (the
"SEC") as provided in Section 10(d). MID STATES and BANC ONE will
cooperate with each other in order to facilitate the preparation,
filing and clearance of the registration statement and the proxy
statement under Federal and State securities laws to be used with
respect to such shareholders' meeting and the exchange of shares as
contemplated by this Merger Agreement.
(b) BANC ONE will promptly prepare and file an application (believed in
good faith by BANC ONE to be substantially complete in form and
substance) to the Board of Governors of the Federal Reserve System
(the "Board") under appropriate provisions of Section 3 of the Bank
Holding Company Act of 1956, as amended, and an application to the
Illinois Commissioner of Banks and Trust Companies (the "Illinois
Commissioner") under appropriate provisions of the Illinois Bank
Holding Company Act of 1957, as amended, for prior approval of the
proposed acquisition of MID STATES and/or the Subsidiaries by BANC ONE
and/or BANC ONE ILLINOIS. MID STATES will furnish BANC ONE such
information, appropriate representations and documents as may be
reasonably requested by BANC ONE in connection therewith. BANC ONE
will use its reasonable best efforts to cause such applications to be
approved by the Board and the Illinois Commissioner, respectively, and
to obtain such other regulatory consents and approvals as may be
necessary to facilitate the Merger and will provide MID STATES and its
counsel with an opportunity to review drafts of all such applications
and to comment on the portions of such applications that contain
information about MID STATES. BANC ONE will provide MID STATES and
its counsel with copies of the public portions of all such
applications as filed, together with correspondence to or from the
Board and Illinois Commissioner related thereto.
(c) After receipt of the Board's prior approval of BANC ONE's and BANC ONE
ILLINOIS' acquisition of MID STATES, after approval of the acquisition
by the Illinois Commissioner, and after the approval of the
shareholders of MID STATES, as provided in Section 10(a), BANC ONE
shall designate the date as of which BANC ONE desires the Merger to
become effective and the Effective Time shall occur at the time and on
the date so designated, subject to Section 24 of this Merger
Agreement. In no event will the date designated by BANC ONE as the
Effective Time be sooner than the day following the day on which all
approvals of the Board and the Illinois Commissioner have been
received and any required waiting periods with respect thereto have
expired, nor will the date designated by BANC ONE as the Effective
Time be later than 31 days following the date at which all approvals
of the Board and the Illinois Commissioner have been received and any
required waiting periods with respect thereto have expired.
(d) BANC ONE will prepare and file with the SEC and use its reasonable
best efforts to cause to become effective, a registration statement,
including the related prospectus and proxy statement referred to in
Section 10(a), above ("Proxy Statement"), and any required amendments
thereto or supplements to any prospectus contained therein, relating
to the exchange of BANC ONE Common contemplated by this Merger
Agreement. Such registration statement will not cover resales by any
persons who may be considered "underwriters" under Rule 145(c) of the
Securities Act of 1933, as amended (the "1933 Act"). BANC ONE shall
use its reasonable best efforts to have the shares of BANC ONE Common
qualified or exempted from qualification under all applicable state
securities laws as soon as possible. In the event that a stop order
has been issued, or threatened, by the SEC, that suspends or would
suspend the effectiveness of the registration statement, BANC ONE
shall use its reasonable best efforts to promptly remove, or cause not
to be issued, any such stop order.
(e) BANC ONE and/or BANC ONE ILLINOIS will assume and pay all expenses
incident to the obtaining of the requisite regulatory consents and
approvals. Without limiting the generality of the foregoing, the
expenses to be assumed and paid by BANC ONE shall include (i) all
legal and other expenses and taxes incurred by BANC ONE incident to
the consummation of the Merger contemplated by this Merger Agreement,
(ii) all legal and other expenses incurred by BANC ONE incident to the
preparation and filing of the applications to the Board, the Illinois
Commissioner, and other requests for regulatory consents and approvals
with the appropriate bank regulatory agencies as set forth in or
contemplated by this Merger Agreement, and (iii) all legal and other
expenses, if any, incurred in connection with the registration of BANC
ONE Common under the Federal and State securities laws. The expenses
to be assumed and paid by BANC ONE and/or BANC ONE ILLINOIS shall not
include any legal or other expenses incurred by MID STATES in the
negotiation of the Merger, the examination or review of documents for
its own benefit, in connection with its own corporate proceedings or
to any investment banker or advisor for services rendered on its
behalf. BANC ONE will pay the expenses of reproducing the Proxy
Statement. MID STATES shall be responsible for its legal and
accounting fees associated with the Proxy Statement, including the
expenses and fees to Donaldson, Lufkin and Jenrette Securities
Corporation ("DLJ") with respect to any opinion expressed with respect
to the fairness of the Merger from a financial point of view and/or
the Exchange Rate to the holders of MID STATES Common (the "DLJ
Fairness Opinion"). Any fees and expenses assumed and paid by BANC
ONE and/or BANC ONE ILLINOIS pursuant to this Section 10(e), whether
directly or indirectly incurred, shall not reduce or otherwise effect
the Exchange Rate.
(f) All information furnished by one party to another party in connection
with this Merger Agreement (whether before or after the date of this
Merger Agreement) and the transactions contemplated hereby which is
regarded by such furnishing party as confidential (and is so
designated not later than the time of delivery or the date of this
Merger Agreement) will be kept confidential by such other party and
will be used only in connection with this Merger Agreement and the
transactions contemplated hereby, except to the extent that such
information (i) is already known to such other party when received,
(ii) thereafter becomes lawfully obtainable from other sources,
otherwise than in violation of this paragraph or similar duties or
provisions regarding confidentiality, or (iii) is, in the reasonable
opinion of legal counsel for BANC ONE, required to be disclosed in any
document filed with the SEC, the Board, the Illinois Commissioner or
any other governmental agency or authority. The provisions of this
Merger Agreement supersede and shall serve to terminate any
Confidentiality Agreement between the parties.
(g) BANC ONE will provide MID STATES and its counsel with copies of all
filings made by BANC ONE with the SEC under the Securities Exchange
Act of 1934, as amended, (the "1934 Act") and the 1933 Act and the
respective rules and regulations of said Commission thereunder at the
time such filings are made at any time prior to the Effective Time.
(h) BANC ONE and BANC ONE ILLINOIS will furnish to MID STATES all
information concerning BANC ONE and BANC ONE ILLINOIS reasonably
required by MID STATES in connection with the preparation of proxy
solicitation materials for use in soliciting proxies in connection
with the meeting of MID STATES' shareholders called for the purpose of
voting on the Merger and will promptly advise MID STATES if BANC ONE
determines that any of such information is or becomes false or
misleading in any material respect. MID STATES will furnish to BANC
ONE all information concerning MID STATES and the Subsidiaries
reasonably required by BANC ONE in connection with BANC ONE's
preparation of the registration statement (including the related
prospectus) and any required amendments or supplements thereto, or in
connection with other filings by BANC ONE relating to the registration
of its shares and will promptly advise BANC ONE if MID STATES
determines that any such information is or becomes false or misleading
in any material respect.
(i) No press release or other public disclosure of matters related to this
Merger Agreement or any of the transactions contemplated hereby shall
be made by MID STATES or BANC ONE unless the other party shall have
provided its prior consent to the form and substance thereof;
provided, however, that nothing herein shall be deemed to prohibit any
party hereto from making any disclosure which its counsel deems
necessary or advisable in order to fulfill such party's disclosure
obligations imposed by law.
(j) Prior to the Effective Time, BANC ONE will vote all the shares of BANC
ONE ILLINOIS to approve and adopt the proposal to merge BANC ONE
ILLINOIS and MID STATES at a meeting of the shareholders of BANC ONE
ILLINOIS held for such purpose or by means of a unanimous written
consent of BANC ONE ILLINOIS shareholders adopted in lieu of a meeting
to approve the Merger and approve this Merger Agreement.
(k) For not less than the two-year period immediately following the
Effective Time, BANC ONE shall make available adequate current public
information about itself as that terminology is used in and as
required by Rule 144(c) of the SEC under the 1933 Act.
(l) Each of BANC ONE, BANC ONE ILLINOIS and MID STATES will use its
reasonable best efforts to cause the Merger to qualify for
pooling-of-interests accounting treatment.
(m) MID STATES will use its reasonable best efforts to cause each person
who, in the joint opinion of counsel for BANC ONE and MID STATES is at
the Effective Time or was, at the time of MID STATES' shareholders'
meeting referred to in Section 10(a) hereof, an "affiliate" of MID
STATES (as that term is used in Rules 144 and 145 promulgated by the
SEC under the 1933 Act), to execute and deliver to BANC ONE the
written undertakings in the form attached hereto as Exhibit C.
(n) BANC ONE will initiate a pre-acquisition investigation and review of
the books, records and facilities of MID STATES and its Subsidiaries
and will complete such pre-acquisition investigation not later than 60
days following the date of this Merger Agreement. BANC ONE shall
advise MID STATES at the conclusion of such pre-acquisition
investigation of all matters then known to BANC ONE which BANC ONE
shall in good faith determine to be either (i) inconsistent in any
material and adverse respect with any of the representations and
warranties of MID STATES contained in this Merger Agreement or (ii),
in the reasonable judgment of the Board of Directors of BANC ONE, to
be either (x) of such significance as to materially and adversely
affect the financial condition or the results of operations of MID
STATES and the Subsidiaries on a consolidated basis or (y) to deviate
materially and adversely from MID STATES' audited financial statements
for the year ended December 31, 1992. BANC ONE shall have the right
to terminate this Merger Agreement as set forth in Section 24(c) and
supplemented by the MID STATES Disclosure Letter (as hereinafter
defined).
(o) MID STATES will initiate a pre-acquisition investigation and review of
the books, records and facilities of BANC ONE and its subsidiaries and
will complete such pre-acquisition investigation not later than 10
business days following the date of this Merger Agreement. MID STATES
shall advise BANC ONE at the conclusion of such pre-acquisition
investigation of all matters then known to MID STATES which MID STATES
shall in good faith determine to be either (i) inconsistent in any
material and adverse respect with any of the representations and
warranties of BANC ONE contained in this Merger Agreement or (ii) in
the reasonable judgment of the Board of Directors of MID STATES, to be
either (x) of such significance as to materially and adversely affect
the financial condition or the results of operations of BANC ONE and
its subsidiaries on a consolidated basis or (y) to deviate materially
and adversely from BANC ONE's audited financial statements for the
year ended December 31, 1992. MID STATES shall have the right to
terminate this Merger Agreement as set forth in Section 24(d) and
supplemented by the BANC ONE Disclosure Letter (as hereinafter
defined).
(p) In addition to BANC ONE's pre-acquisition investigation of MID STATES
and its Subsidiaries and MID STATES' pre-acquisition investigation of
BANC ONE and its subsidiaries, BANC ONE and MID STATES shall each
provide the other with adequate opportunity to conduct such further
reviews and examinations of the business, properties and conditions
(financial and otherwise) of the other as BANC ONE and MID STATES,
respectively, shall deem prudent, provided that such investigations
shall not interfere unreasonably with the normal operations of the
party being reviewed.
(q) BANC ONE will use its reasonable best efforts to cause the shares of
BANC ONE Common to be issued to the shareholders of MID STATES
pursuant to this Merger Agreement to be listed on the NYSE as of the
Effective Time.
11. Dissenting Shareholders. Shareholders of MID STATES Common who do not vote
their shares in favor of the Merger and otherwise perfect applicable
dissenters' rights will be entitled to dissenters or appraisal rights
pursuant to applicable provisions of the Delaware GCL.
12. Tax Opinion. BANC ONE and MID STATES shall use their respective reasonable
best efforts to obtain from Vedder, Price, Kaufman & Kammholz and cause to
be included in the registration statement a written opinion addressed to,
among others, MID STATES, its shareholders and BANC ONE, that, based upon
the Internal Revenue Code of 1986, as amended (the "Code"), the regulations
thereunder, and rulings issued by the Internal Revenue Service in
transactions similar to those contemplated by this Merger Agreement, for
Federal income tax purposes:
(a) The merger of MID STATES into BANC ONE ILLINOIS, pursuant to this
Agreement, will constitute a reorganization within the meaning of
Section 368(a)(1)(A) and Section 368(a)(2)(D) of the Code. MID
STATES, BANC ONE ILLINOIS and BANC ONE will each be considered "a
party to a reorganization" within the meaning of Section 368(b) of the
Code for purposes of this reorganization.
(b) No gain or loss will be recognized by MID STATES upon the transfer of
the assets and liabilities to BANC ONE ILLINOIS in exchange for the
shareholders of MID STATES receiving BANC ONE Common;
(c) No gain or loss will be recognized by BANC ONE ILLINOIS upon the
receipt of the assets and liabilities of MID STATES in exchange for
the shareholders of MID STATES receiving BANC ONE Common;
(d) The tax basis of the assets of MID STATES in the hands of BANC ONE
ILLINOIS will be the same as the tax basis of such assets in the hands
of MID STATES immediately prior to the transfer;
(e) The holding period of the assets of MID STATES transferred to BANC ONE
ILLINOIS will include the period during which such assets were held by
MID STATES prior to the transfer;
(f) No gain or loss will be recognized by the shareholders of MID STATES
upon the receipt of BANC ONE Common in exchange for their shares of
MID STATES (disregarding for this purpose of any cash received upon
exercise of dissenters' rights or in lieu of the receipt of fractional
shares);
(g) The tax basis of the BANC ONE Common (including any fractional share
interests to which they may be entitled) received by the shareholders
of MID STATES will be the same as the tax basis of the MID STATES
shares exchanged therefor; and
(h) The holding period of the BANC ONE Common received by the shareholders
of MID STATES will include the holding period of the MID STATES shares
exchanged therefor, provided that at the time of the exchange the MID
STATES shares were held as capital assets.
13. Representations and Warranties of BANC ONE. BANC ONE represents and
warrants to MID STATES that, except as set forth in BANC ONE's disclosure
letter to MID STATES dated May 24, 1993 and delivered to MID STATES not
later than the time of the execution of this Merger Agreement (the "BANC
ONE Disclosure Letter"), and except as otherwise indicated below:
(a) BANC ONE is a corporation duly organized and validly existing in good
standing under the laws of the State of Ohio, is a registered bank
holding company under the Bank Holding Company Act of 1956, as
amended, and is qualified to do business and is in good standing in
the State of Ohio, together with all other jurisdictions where it is
both required to so qualify and where the failure to so qualify would
have a material adverse effect on the business, operations, financial
condition or results of operations of such party and its subsidiaries,
taken as a whole, or on the ability of such party to consummate the
transactions contemplated hereby, and BANC ONE has full power and
authority (including all licenses, franchises, permits and other
governmental authorizations which are legally required) to engage in
the businesses and activities now conducted by it and its
subsidiaries. BANC ONE is not subject to any formal or informal
agreement or understanding with, nor is it subject to any order of,
any bank regulatory authority restricting or prohibiting or attempting
to restrict or prohibit any activities or conduct of BANC ONE. As of
March 31, 1993, the authorized capital stock of BANC ONE consisted of
(i) 600,000,000 shares of BANC ONE Common Stock without par value, of
which a total of 258,798,094 shares were issued and outstanding and
none of which were shares held by BANC ONE as treasury stock and (ii)
35,000,000 shares of preferred stock without par value, of which
287,536 shares were issued and outstanding as Class B Convertible, no
par value shares, and 5,000,000 shares were issued and outstanding as
Series C $3.50 Cumulative Convertible Preferred Stock. All of the
issued and outstanding shares of BANC ONE's capital stock are duly
authorized, validly issued, fully paid, nonassessable and subject to
no pre-emptive rights. Subject only to obtaining the required
regulatory approvals, BANC ONE is, and at all times after the date of
this Merger Agreement to and including the Effective Time will be,
authorized to effect the Merger under applicable law.
(b) BANC ONE has furnished to MID STATES copies of the following financial
statements relating to BANC ONE and its consolidated subsidiaries:
(i) the audited Consolidated Balance Sheets of BANC ONE as of December
31, 1992 and 1991 and the Consolidated Statements of Income,
Shareholders' Equity and Cash Flows for the years then ended, together
with the notes thereto, as audited by Coopers & Lybrand, independent
auditors together with the notes thereto; and (ii) the unaudited
Consolidated Balance Sheet of BANC ONE as at March 31, 1993 and the
unaudited Consolidated Statements of Income and Shareholders' Equity
for the period then ended, together with the notes thereto. Each of
the aforementioned financial statements present fairly, in accordance
with generally accepted accounting principles (applied on a consistent
basis except as disclosed in the footnotes thereto), the consolidated
financial position and results of operations of BANC ONE as of the
dates and for the periods therein set forth. Such financial
statements do not, as of the dates thereof, include any material asset
or omit any material liability, absolute or contingent, or other fact,
the inclusion or omission of which renders such financial statements,
in light of the circumstances under which they were made, misleading
in any material respect. Since March 31, 1993, there has not been any
change in the financial condition, results of operations or business
of BANC ONE and its subsidiaries that has had a material adverse
effect on the financial condition or results of operations of such
party and its subsidiaries, taken as a whole, or on the ability of
such party to consummate the transaction contemplated hereby (a
"Material Adverse Effect"). Since March 31, 1993, BANC ONE has issued
approximately 13,378,000 additional shares of BANC ONE Common.
(c) The Boards of Directors of BANC ONE and BANC ONE ILLINOIS have duly
authorized the execution and delivery of this Merger Agreement and
approved the Merger as contemplated by said Merger Agreement. No
authorization of this Merger Agreement or of the transactions hereby
contemplated is required by the shareholders of BANC ONE. BANC ONE
and BANC ONE ILLINOIS have all requisite power and authority to enter
into this Merger Agreement and, after its vote of the shares of BANC
ONE ILLINOIS in favor of the Merger as contemplated by Section 10(j),
BANC ONE and BANC ONE ILLINOIS will have the authority to consummate
the transactions contemplated hereby. This Merger Agreement
constitutes the valid and legally binding and enforceable obligation
of each of BANC ONE and BANC ONE ILLINOIS and this Merger Agreement
and the consummation of the Merger have been duly authorized and
approved on behalf of BANC ONE and BANC ONE ILLINOIS by all requisite
corporate action. Provided the required approvals are obtained from
the Board and the Illinois Commissioner, neither the execution and
delivery of this Merger Agreement nor the consummation of the Merger
will conflict with, result in the breach of, constitute a default
under or accelerate the performance provided by the terms of any law,
or any rule or regulation of any governmental agency or authority or
any judgment, order or decree of any court, bank regulatory agency or
other governmental agency to which BANC ONE or BANC ONE ILLINOIS is
subject, any contract, agreement or instrument to which BANC ONE or
BANC ONE ILLINOIS is a party or by which BANC ONE or BANC ONE ILLINOIS
is bound or committed, or the Articles of Incorporation or Regulations
of BANC ONE or the Articles of Incorporation or By-Laws of BANC ONE
ILLINOIS, or constitute an event which with the lapse of time or
action by a third party, could, to the best of BANC ONE's knowledge,
result in the default under any of the foregoing or result in the
creation of any lien, charge or encumbrance upon any of the assets or
properties of BANC ONE or BANC ONE ILLINOIS or upon any of the stock
of BANC ONE or BANC ONE ILLINOIS or adversely affect the ability of
BANC ONE to consummate the transactions contemplated hereby, except,
in the case of contracts, agreements or instruments, such defaults,
conflicts or breaches which either (i) will be cured or waived prior
to the Effective Time or (ii) if not so cured or waived would not, in
the aggregate, have a Material Adverse Effect.
(d) The reserve for possible loan and lease losses shown on the March 31,
1993 Consolidated Balance Sheet of BANC ONE and its subsidiaries is
adequate in all material respects under the requirements of generally
accepted accounting principles to provide for possible losses, net of
recoveries relating to loans previously charged off, on loans
outstanding (including, without limitation, accrued interest
receivable) as of March 31, 1993.
(e) Except as disclosed in the financial statements referred to in Section
13(b), there is no litigation, action, suit, investigation or
proceeding pending or, to the best of the knowledge after due inquiry
of BANC ONE and its executive officers, overtly threatened, against or
affecting BANC ONE or any of its subsidiaries or involving any of
their respective properties or assets, at law or in equity, before any
federal, state, municipal, local or other governmental authority,
which is reasonably likely to be resolved adversely to the interest of
BANC ONE or its subsidiaries and, if so resolved, would have a
Material Adverse Effect or materially impair its ability, or that of
BANC ONE ILLINOIS, to perform under this Merger Agreement, and to the
best of the knowledge and belief after due inquiry of BANC ONE and its
executive officers, no one has reasonable or valid grounds on which it
reasonably can be expected that anyone will assert or initiate any
such litigation, action, suit, investigation or proceeding against
BANC ONE or any of its subsidiaries based upon the wrongful action or
inaction of BANC ONE or any of its subsidiaries or any of their
respective officers, directors or employees.
(f) At the Effective Time and on such subsequent dates when the former
shareholders of MID STATES surrender their MID STATES share
certificates for cancellation, the shares of BANC ONE Common to be
exchanged with former shareholders of MID STATES will have been duly
authorized and validly issued by BANC ONE and will be fully paid and
nonassessable and subject to no pre-emptive rights.
(g) BANC ONE and each of its subsidiaries have good and marketable title
to all their respective assets and properties, whether real or
personal, tangible or intangible, including without limitation the
capital stock of its subsidiaries and all other assets and properties
reflected in BANC ONE's Consolidated Balance Sheet as of March 31,
1993 or acquired subsequent thereto (except to the extent that such
assets and properties have been disposed of for fair value in the
ordinary course of business since March 31, 1993). Such assets and
properties are subject to no liens, mortgages, security interests,
encumbrances, pledges or charges of any kind, except (i) as noted in
said Consolidated Balance Sheet or the notes thereto; (ii) statutory
liens for taxes not yet delinquent; (iii) landlord's liens; and (iv)
minor defects and irregularities in title and encumbrances which do
not materially impair the use thereof for the purposes for which they
are held; and such liens, mortgages, security interests, encumbrances
and charges do not, in the aggregate, have a Material Adverse Effect.
BANC ONE and its subsidiaries as lessees have the unqualified right
under valid and subsisting leases to occupy, use, possess and control
all property leased by BANC ONE and its subsidiaries.
(h) To the best of the knowledge after due inquiry of BANC ONE and its
executive officers, BANC ONE and its subsidiaries have complied with
all laws, regulations and orders applicable to them and to the conduct
of their businesses, including without limitation, all statutes, rules
and regulations pertaining to the conduct of banking activities except
for violations which together with any penalty which results therefrom
has not had and will not have a Material Adverse Effect. Neither BANC
ONE nor any of its subsidiaries is in default under, and no event has
occurred which, to the best of BANC ONE's knowledge, after due
inquiry, is likely to result in the default under the terms of any
judgment, decree, order, writ, rule or regulation of any governmental
authority or court, whether federal, state or local and whether at law
or in equity, in each case where the default has had or is likely to
have a Material Adverse Effect.
(i) BANC ONE and BANC ONE ILLINOIS have not incurred and will not incur
directly or indirectly any liability for brokerage, finders', agents'
or investment bankers' fees or commissions in connection with this
Merger Agreement or the transactions contemplated hereby, except for
fees associated with the provision of the DLJ Fairness Opinion, for
which BANC ONE and/or BANC ONE ILLINOIS may be obligated by operation
of law as a result of the Merger.
(j) Each pension, stock bonus or purchase, profit-sharing, retirement,
health and welfare plan maintained by or covering employees of BANC
ONE or any subsidiary of BANC ONE other than a multiemployer plan (for
purposes of this paragraph hereinafter referred to collectively as the
"Plans") which purports to be a qualified plan under Section 401(a) of
the Code is so qualified. All of the Plans which constitute employee
pension benefit or employee welfare benefit plans subject to the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"),
have been maintained in compliance in all material respects with the
applicable requirements of ERISA. All material notices, reports and
other filings required under applicable law to be given or made to or
with any governmental agency with respect to the Plans have been
timely filed or delivered. BANC ONE has no knowledge of any
circumstances which would adversely affect the qualification of the
Plans or their compliance with the applicable requirements of ERISA,
would result or have resulted in liability under Title IV of ERISA or
of any "reportable event" (as such term is defined in Section 4043(b)
of ERISA) or any "prohibited transaction" (as such term is defined in
Section 406 of ERISA and Section 4975(c) of the Code) which has
occurred since the date on which said sections became applicable to
the Plans and which could reasonably be expected to result in any
material liability of BANC ONE or any subsidiary to the Pension
Benefit Guaranty Corporation (the "PBGC"), the Department of Treasury,
the Department of Labor or any multiemployer plan. Those Plans which
are defined benefit plans within the meaning of ERISA meet the minimum
funding standards set forth in the Code and ERISA and the assets of
such Plans equal or exceed the present value of accrued benefits on a
termination basis under such Plans as of the most recent plan
valuation date. There are no pending or threatened claims (other than
claims for benefits in the ordinary course), lawsuits or arbitrations
which have been asserted or instituted against the Plans, any
fiduciaries thereof with respect to their duties to the Plans or the
assets of any of the trusts under any of the Plans which could
reasonably be expected to result in any material liability of BANC ONE
or any subsidiary to the PBGC, Department of Treasury, Department of
Labor or any multiemployer plan.
(k) BANC ONE and/or its subsidiaries have duly filed all federal, state,
county and local income, franchise, bank, excise, real and personal
property and other tax returns and reports (including, but not limited
to, those relating to social security, withholding, unemployment
insurance, and occupation, sales and use taxes and those filed on a
consolidated, combined or unitary basis) required to have been filed
by BANC ONE or its subsidiaries up to the date hereof. All of the
foregoing returns are true and correct in all material respects, and
BANC ONE and its subsidiaries have paid or, prior to the Effective
Time, will pay all taxes, interest, additions to tax, and penalties
shown on such returns or reports as being due or (except to the extent
the same are contested in good faith and, if material, summarized in
the BANC ONE Disclosure Letter) claimed to be due to any federal,
state, county, local or other taxing authority, and there is, and at
the Effective Time will be, no basis for any additional claim or
assessment which might materially and adversely affect BANC ONE and
its subsidiaries, except for those being contested in good faith and
summarized in the BANC ONE Disclosure Letter. BANC ONE and its
subsidiaries have paid or made adequate provision in their financial
statements or on their books and records for all taxes payable in
respect of all periods ending on or before the date hereof. BANC ONE
and its subsidiaries have, or at the Effective Time will have, no
liability for any taxes, interest, additions to tax, or penalties of
any nature whatsoever, except for those taxes which may have arisen up
to the Effective Time in the ordinary course of business and are
properly accrued on the books of BANC ONE and its subsidiaries as of
the Effective Time or are being contested in good faith and have, if
material, been summarized in the BANC ONE Disclosure Letter.
(l) BANC ONE and its subsidiaries have in effect insurance coverage with
reputable insurers, which in respect of amounts, premiums, types and
risks insured, constitutes reasonably adequate coverage against all
risks customarily insured against by bank holding companies and their
subsidiaries comparable in size and operations to BANC ONE and its
subsidiaries.
(m) Neither the Proxy Statement nor the related registration statement nor
any amendment or supplement thereto that is filed with the SEC in
connection with the transactions contemplated hereby (except for any
information which has been or shall be supplied by MID STATES for
inclusion in the Proxy Statement and registration statement and is so
included as so supplied) shall contain (in the case of information
relating to the Proxy Statement, at the time it is mailed and in the
case of information relating to the registration statement at the time
it becomes effective and at the time of MID STATES' shareholders'
meeting) any untrue statement of a 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
misleading. The registration statement and any amendments or
supplements thereto that are filed with the SEC in connection with the
transactions contemplated hereby will comply as to form in all
material respects with the provisions of the 1933 Act and the rules
and regulations promulgated thereunder.
(n) No employee of BANC ONE or any of its subsidiaries is represented, for
purposes of collective bargaining, by a labor organization of any
type. BANC ONE is unaware of any efforts during the past five years
to unionize or organize any employees of BANC ONE or any of its
subsidiaries, and no claim related to such employees under the Fair
Labor Standards Act, National Labor Relations Act, Civil Rights Act of
1964, Walsh-Healy Act, Davis Bacon Act, Civil Rights Act of 1866, Age
Discrimination in Employment Act, Equal Pay Act of 1963, Executive
Order No. 11246, Federal Unemployment Tax Act, Vietnam Era Veterans
Readjustment Act, Occupational Safety and Health Act, or any state or
local employment related law, order, ordinance or regulation, no
unfair labor practice, discrimination or wage-and-hour claim is
pending or, to the best of BANC ONE's knowledge, threatened against
BANC ONE or any of its subsidiaries which claim has had or is
reasonably likely to have a Material Adverse Effect.
(o) To the actual knowledge of BANC ONE and its executive officers: (i)
with respect to any contaminant, pollutant, hazardous substance,
hazardous waste, hazardous pollutant, toxic pollutant, toxic waste or
toxic substance ("Contaminant"), there are no material actions,
proceedings or investigations pending or threatened before any federal
or state environmental regulatory body, or before any federal or state
court, alleging non-compliance with or liability in connection with,
by BANC ONE or any of its subsidiaries, the Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C.
Sections
9601 et seq. ("CERCLA"), the Resource Conservation and Recovery Act,
42 U.S.C. Sections 6901 et seq. ("RCRA"), the Clean Water Act,
33 U.S.C. Sections
1251 et seq. ("CWA"), or the Clean Air Act, 42 U.S.C. Sections 7401
et seq.
("CAA"), as each is amended from time to time, or any other federal,
state, local or municipal statute, ordinance or regulation, or order,
ruling or other decision of any court, administrative agency or other
governmental authority relating to health or safety or environmental
protection (such statutes, ordinances, regulations, orders, rulings
and decisions, together, "Environmental Laws"); (ii) there is no
reasonable basis for the institution of any material action,
proceeding or investigation against BANC ONE or any of its
subsidiaries under any Environmental Law; (iii) neither BANC ONE nor
any of its subsidiaries is responsible in any material respect under
any Environmental Law for any release by any person at or in the
vicinity of real property of any Contaminant, caused by the spilling,
leaking, pumping, pouring, emitting, emptying, discharging, injecting,
escaping, leaching, dumping or disposing of any such hazardous
substance into the environment (collectively "Release"); (iv) neither
BANC ONE nor any of its subsidiaries is responsible for any material
costs of any response action required by virtue of any Release of any
Contaminant into the environment including, without limitation, costs
arising from investigation, removal or remediation of Contaminants,
security fencing, alternative water supplies, temporary evacuation and
housing and other emergency assistance undertaken by any environmental
regulatory body or any other person; (v) BANC ONE and each of its
subsidiaries are, in all material respects, in compliance with all
applicable Environmental Laws; and (vi) no real property owned or used
by BANC ONE or any of its subsidiaries contains any Contaminant
including, without limitation, any asbestos, PCBs or petroleum
products or byproducts in any form, the presence, location or
condition of which (a) could require remediation or other corrective
action pursuant to any Environmental Law in any material respect, or
(b) otherwise would pose any significant health or safety risk unless
remedial measures were taken.
(p) BANC ONE and/or its subsidiaries (i) have surveyed the facilities
where BANC ONE and its subsidiaries conduct their businesses
including, without limitation, automatic teller machines
(collectively, the "BANC ONE Facilities") for compliance with the
Americans with Disabilities Act and the regulations issued thereunder
(collectively, "ADA"); (ii) have developed action plans to remove
architectural barriers including communication barriers that are
structural in nature from existing BANC ONE Facilities (collectively,
the "BANC ONE Barriers") when such removal is "readily achievable," as
that term is defined in ADA; (iii) will finalize action plans for
automatic teller machines ("ATMs") upon clarification by the
Architectural and Transportation Barriers Compliance Board ("ATBCB");
(iv) have developed or will develop schedules for BANC ONE Barrier
removal from BANC ONE Facilities in such action plans so that BANC ONE
Barrier removal will be complete on January 26, 1992 or as soon as
practicable thereafter; and (v) have removed all BANC ONE Barriers in
BANC ONE Facilities or will cause all BANC ONE Barriers to be removed
in accordance with such action plans. All "alterations" (as such term
is defined in ADA) to BANC ONE Facilities undertaken after January 26,
1992 comply with ADA and the ATBCB Accessibility Guidelines for
Buildings and Facilities ("ADAAG"). Effective January 26, 1992, all
plans and designs for new construction to be utilized by BANC ONE and
its subsidiaries comply with ADA and ADAAG. To the best of BANC ONE's
knowledge, after due inquiry, no material investigations, proceedings,
or complaints, formal or informal, are pending or threatened against
BANC ONE and/or its subsidiaries in connection with BANC ONE
Facilities under ADA, ADAAG, or any other state or federal law
concerning accessibility for individuals with disabilities.
(q) The statements made in the BANC ONE Disclosure Letter and any
attachments thereto shall be deemed to constitute representations and
warranties of BANC ONE under this Merger Agreement to the same extent
as if herein set forth in full. Anything disclosed in the BANC ONE
Disclosure Letter or the attachments thereto shall be considered to
have been disclosed for purposes of all representations, warranties
and covenants under this Merger Agreement.
(r) BANC ONE has filed all reports, statements, forms and documents with
the SEC that it was required to file since December 31, 1988 (the "SEC
Filings"), all of which have complied in all material respects with
all applicable requirements of the 1933 Act and the 1934 Act. As of
their respective dates, each such SEC Filing did not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading.
14. Representations and Warranties of BANC ONE ILLINOIS. BANC ONE ILLINOIS
represents and warrants to MID STATES that, except as set forth in the BANC
ONE Disclosure Letter, and except as otherwise indicated below:
(a) BANC ONE ILLINOIS is a corporation duly organized and validly existing
under the laws of the State of Illinois, is a registered bank holding
company under the Bank Holding Company Act of 1956, as amended, and is
qualified to do business and is in good standing in the State of
Illinois together with all other jurisdictions where it is both
required to so qualify and the failure to so qualify would have a
Material Adverse Effect, and BANC ONE ILLINOIS has full power and
authority (including all licenses, franchises, permits and other
governmental authorizations which are legally required) to engage in
the business and activities now conducted by it and its subsidiaries.
The authorized capital stock of BANC ONE ILLINOIS is, and at the
Effective Time will be, 100 shares of common stock, $1.00 par value,
of which 100 shares are issued and outstanding, all of which are owned
by BANC ONE free and clear of all liens, security interests or other
encumbrances.
(b) The Board of Directors of BANC ONE ILLINOIS has authorized execution
of this Merger Agreement and approved the acquisition of MID STATES as
contemplated by said Merger Agreement. BANC ONE ILLINOIS has all
requisite power and authority to enter into this Merger Agreement and,
after approval of the Merger by BANC ONE, the sole shareholder of BANC
ONE ILLINOIS, BANC ONE ILLINOIS will have the authority to consummate
the transactions contemplated hereby. Subject to shareholder
approval, this Merger Agreement constitutes the valid and legally
binding obligation of BANC ONE ILLINOIS and this Merger Agreement and
the consummation hereof have been duly authorized and approved on
behalf of BANC ONE ILLINOIS by all requisite corporate action.
Subject to shareholder approval and provided the required approvals
are obtained from the Board and the Illinois Commissioner, neither the
execution and delivery of this Merger Agreement nor the consummation
of the Merger will conflict with, result in the breach of, constitute
a default under or accelerate the performance provided by the terms of
any law, or any rule or regulation of any governmental agency or
authority or any judgment, order or decree of any court, bank
regulatory agency or other governmental agency to which BANC ONE
ILLINOIS may be subject, any contract, agreement or instrument to
which BANC ONE ILLINOIS is a party or by which BANC ONE ILLINOIS is
bound or committed, or the Articles of Incorporation or By-laws of
BANC ONE ILLINOIS, or constitute an event which with the lapse of time
or action by a third party, could to the best of BANC ONE ILLINOIS'
knowledge, result in the default under any of the foregoing or result
in the creation of any lien, charge or encumbrance upon any of the
assets or properties of BANC ONE ILLINOIS or adversely affect the
ability of BANC ONE ILLINOIS to consummate the transactions
contemplated hereby.
15. Representations and Warranties of MID STATES. MID STATES represents and
warrants to BANC ONE that, except as set forth in MID STATES' disclosure
letter to BANC ONE dated May 25, 1993 and delivered to BANC ONE not later
than the time of the execution of this Merger Agreement (the "MID STATES
Disclosure Letter"), and except as otherwise indicated below:
(a) MID STATES is a corporation duly organized and validly existing in
good standing under the laws of the State of Delaware, is a registered
bank holding company under the Bank Holding Company Act of 1956, as
amended, and is qualified to do business and is in good standing in
all jurisdictions where it is both required to so qualify and where
the failure to so qualify would have a Material Adverse Effect, and
MID STATES has full power and authority (including all licenses,
franchises, permits and other governmental authorizations which are
legally required) to engage in the businesses and activities now
conducted by it and the Subsidiaries. MID STATES is not subject to
any formal or informal agreement or understanding with, nor is it
subject to any order of, any bank regulatory authority restricting or
prohibiting or attempting to restrict or prohibit any activities or
conduct of MID STATES. As of March 31, 1993, the authorized capital
stock of MID STATES consisted of 750,000 shares of MID STATES Common,
311,560 of which shares were issued and outstanding and 3,040 of which
were treasury shares owned by MID STATES. All of the issued and
outstanding shares of MID STATES Common are duly authorized, validly
issued, fully paid and nonassessable and none are issued in violation
of the pre-emptive rights of any shareholder. There are no
outstanding options, warrants or commitments of any kind related to
MID STATES' capital stock.
(b) MID STATES has furnished to BANC ONE copies of the following financial
statements relating to MID STATES and the Subsidiaries on a
consolidated basis: (i) the audited Consolidated Balance Sheet of MID
STATES as of December 31, 1992 and 1991, and the Consolidated
Statements of Income, Stockholders' Equity and Cash Flows for the
years then ended, together with the notes thereto, as audited by
McGladrey & Pullen, Certified Public Accountants; and (ii) the
unaudited Consolidated Balance Sheet of MID STATES as at March 31,
1993 and the unaudited Consolidated Statements of Income and Cash
Flows for the period then ended, together with the notes thereto.
Each of the aforementioned financial statements presents fairly, in
accordance with generally accepted accounting principles (applied on a
consistent basis except as disclosed in the footnotes thereto), the
consolidated financial position and results of operations of MID
STATES as of the dates and for the periods therein set forth. Such
financial statements do not, as of the dates thereof, include any
material asset or omit any material liability, absolute or contingent,
or other fact, the inclusion or omission of which renders such
financial statements, in light of the circumstances under which they
were made, misleading in any material respect. Since March 31, 1993,
there has not been any change in the financial condition, results of
operations or business of MID STATES and the Subsidiaries that has had
a Material Adverse Effect.
(c) The Board of Directors of MID STATES has duly authorized the execution
and delivery of this Merger Agreement and approved the Merger as
contemplated by the Merger Agreement and will recommended it to the
MID STATES shareholders for adoption. Subject to the approval by the
shareholders of MID STATES and the contemplated regulatory approvals,
this Merger Agreement constitutes the valid, legally binding and
enforceable obligation of MID STATES and MID STATES has all requisite
power and authority to enter into this Merger Agreement and MID STATES
has the authority to consummate the transactions contemplated hereby
so that, provided all required corporate and regulatory approvals are
obtained, neither the execution and delivery of this Merger Agreement
nor the consummation of the Merger will conflict with, result in the
breach of, constitute a default under or accelerate the performance
provided by the terms of any law, or any rule or regulation of any
governmental agency or authority or any judgment, order or decree of
any court, bank regulatory agency or other governmental agency to
which MID STATES is subject, any contract, agreement or instrument to
which MID STATES is a party or by which MID STATES is bound or
committed, or the Certificate of Incorporation or By-Laws of MID
STATES, or constitute an event which with the lapse of time or action
by a third party, could, to the best of MID STATES' knowledge, result
in the default under any of the foregoing or result in the creation of
any lien, charge or encumbrance upon any of the assets or properties
of MID STATES or upon any of MID STATES' capital stock; except, in the
case of contracts, agreements or instruments, such defaults, conflicts
or breaches which either (i) will be cured or waived prior to the
Effective Time or (ii) if not so cured or waived would not, in the
aggregate, have a Material Adverse Effect.
(d) The reserve for possible loan and lease losses shown on the March 31,
1993 Consolidated Balance Sheet of MID STATES and its Subsidiaries is
adequate in all material respects under the requirements of generally
accepted accounting principles to provide for possible losses, net of
recoveries relating to loans previously charged off, on loans
outstanding (including, without limitation, accrued interest
receivable) as of March 31, 1993.
(e) Except as disclosed in the financial statements referred to in Section
15(b), there is no litigation, action, suit, investigation or
proceeding pending or, to the best of the knowledge after due inquiry
of MID STATES and its executive officers, overtly threatened, against
or affecting MID STATES or any of its Subsidiaries or involving any of
their respective properties or assets, at law or in equity, before any
federal, state, municipal, local or other governmental authority which
is reasonably likely to be resolved adversely to the interest of MID
STATES or its Subsidiaries and, if so resolved, would have a Material
Adverse Effect, and to the best of the knowledge and belief after due
inquiry of MID STATES and its executive officers, no one has
reasonable or valid grounds on which it reasonably can be expected
that anyone will assert or initiate any such litigation, action, suit,
investigation or proceeding against MID STATES or any of the
Subsidiaries based upon the wrongful action or inaction of MID STATES
or any of the Subsidiaries or any of their respective officers,
directors or employees.
(f) MID STATES and its Subsidiaries have good and marketable title to all
their respective assets and properties, whether real or personal,
tangible or intangible, including without limitation the capital stock
of its Subsidiaries and all other assets and properties reflected in
MID STATES' Consolidated Balance Sheet as of March 31, 1993 or
acquired subsequent thereto (except to the extent that such assets and
properties have been disposed of for fair value in the ordinary course
of business since March 31, 1993). Such assets and properties are
subject to no liens, mortgages, security interests, encumbrances,
pledges or charges of any kind, except (i) as reflected in said
Balance Sheet or the notes thereto; (ii) statutory liens for taxes not
yet delinquent; (iii) landlord's liens; and (iv) minor defects and
irregularities in title and encumbrances which do not materially
impair the use thereof for the purposes for which they are held; and
such liens, mortgages, security interests, encumbrances and charges do
not, in the aggregate, have a Material Adverse Effect. MID STATES and
its Subsidiaries as lessee have the right under valid and subsisting
leases to occupy, use, possess and control all property leased by MID
STATES and its Subsidiaries. At the Effective Time all limitations
affecting such properties will not, in the aggregate, have a Material
Adverse Effect.
(g) To the best of the knowledge after due inquiry of MID STATES and its
executive officers, MID STATES and its Subsidiaries have complied with
all laws, regulations and orders applicable to them and to the conduct
of their businesses, including without limitation, all statutes, rules
and regulations pertaining to the conduct of banking activities except
for violations which together with any penalty which results therefrom
has not had and will not have a Material Adverse Effect. Neither MID
STATES nor any of its Subsidiaries is in default under, and no event
has occurred which, to the best of MID STATES' knowledge, after due
inquiry, is likely to result in the default under the terms of any
judgment, decree, order, writ, rule or regulation of any governmental
authority or court, whether federal, state or local and whether at law
or in equity, in each case where the default has had or is likely to
have a Material Adverse Effect.
(h) MID STATES has not, since March 31, 1993 to the date hereof, (i) sold
or issued any corporate debt securities or sold, issued, reissued or
increased its shares of its capital stock; (ii) granted any option for
the purchase of capital stock; (iii) declared or set aside or paid any
dividend or other distribution in respect of its capital stock, except
as permitted pursuant to Section 16(a) hereof or as incurred in
carrying out the transactions contemplated by this Merger Agreement,
or directly or indirectly, purchased, redeemed or otherwise acquired
any shares of such stock; (iv) incurred any obligation or liability
(absolute or contingent) except obligations or liabilities incurred in
the ordinary course of business, or mortgaged, pledged or subjected to
lien or encumbrance (other than landlord's liens and statutory liens
for taxes not yet delinquent and banking transactions conducted in the
ordinary course of business) on any of its material assets or
properties; (v) discharged or satisfied any material lien or
encumbrance or paid any material obligation or liability (absolute or
contingent), other than current liabilities included in MID STATES'
financial statements as of March 31, 1993, current liabilities
incurred since the date thereof in the ordinary course of business and
liabilities incurred in carrying out the transactions contemplated by
this Merger Agreement; (vi) sold, exchanged or otherwise disposed of
any material capital assets; (vii) made any extraordinary officers'
salary increase or wage increase, entered into any employment contract
with any officer or salaried employee or instituted any employee
welfare, bonus, stock option, profit-sharing, retirement or similar
plan or arrangement; (viii) suffered any damage, destruction or loss,
whether or not covered by insurance, that has had a Material Adverse
Effect or waived any rights of value which, in the aggregate, have had
a Material Adverse Effect; (ix) entered or agreed to enter into any
agreement or arrangement granting any preferential right to purchase
any of its material assets, properties or rights or requiring the
consent of any party to the transfer and assignment of any such
material assets, properties or rights; or (x) entered into any other
material transaction (other than in the ordinary course of business)
except as expressly contemplated by this Merger Agreement.
(i) Except as set forth in the MID STATES Document List (the "MID STATES
Document List") attached to the MID STATES Disclosure Letter, neither
MID STATES nor any of its Subsidiaries is a party to or bound by any
written or oral (i) employment or consulting contract which is not
terminable by MID STATES or its Subsidiaries on 60 days or less
notice, (ii) employee bonus, deferred compensation, pension, stock
bonus or purchase, profit-sharing, retirement or stock option plan,
(iii) other employee benefit or welfare plan, or (iv) other executory
material agreements as defined by the instructions to Exhibit 10 under
Item 601 of SEC Regulation S-K. All such pension, stock bonus or
purchase, profit-sharing, retirement, health and welfare plans (other
than any multiemployer plans) set forth in the MID STATES Document
List are in this section hereinafter referred to collectively as the
"Plans." Those Plans intended to be qualified plans under Section
401(a) of the Code meet any applicable requirements for favorable tax
treatment under the Code. All of the Plans which constitute employee
pension benefit plans or employee welfare plans subject to ERISA have
been maintained in compliance in all material respects with the
applicable requirements of ERISA. All material notices, reports and
other filings required under applicable law to be given or made to or
with any governmental agency with respect to the Plans have been
timely filed or delivered. MID STATES has no knowledge of any
circumstances which would adversely affect the qualification of the
Plans or their compliance with the applicable requirements of ERISA,
would result or have resulted in liability under Title IV of ERISA or
of any unreported "reportable event" (as such term is defined in
Section 4043(b) of ERISA) or any "prohibited transaction" (as such
term is defined in Section 406 of ERISA and Section 4975(c) of the
Code) which has occurred since the date on which said sections became
applicable to the Plans and which could reasonably be expected to
result in any material liability of MID STATES or any Subsidiary to
the PBGC, the Department of Treasury, the Department of Labor or any
multiemployer plan. Those Plans which are defined benefit plans
within the meaning of ERISA meet the minimum funding standards set
forth in the Code and ERISA and the assets of such Plans equal or
exceed the present value of accrued benefits on a termination basis
under such Plans as of the most recent plan valuation date. There are
no pending or threatened claims (other than claims for benefits in the
ordinary course), lawsuits or arbitrations which have been asserted or
instituted against the Plans, any fiduciaries thereof with respect to
their duties to the Plans or the assets of any of the trusts under any
of the Plans which could reasonably be expected to result in any
material liability of MID STATES or any of its Subsidiaries to the
PBGC, the Department of Treasury, the Department of Labor or any
multiemployer plan.
(j) MID STATES and/or its Subsidiaries have duly filed all federal, state,
county and local income, franchise, bank, excise, real and personal
property and other tax returns and reports (including, but not limited
to, those relating to social security, withholding, unemployment
insurance, and occupation, sales, and use taxes and those filed on a
consolidated, combined or unitary basis) required to have been filed
by MID STATES or its Subsidiaries up to the date hereof. MID STATES
has made available to BANC ONE a copy of its Federal income tax return
for the year 1991 and will make available to BANC ONE a copy of its
Federal income tax return for the year 1992 when it is filed. All of
the foregoing returns are true and correct in all material respects,
and MID STATES and its Subsidiaries have paid or, prior to the
Effective Time, will pay all taxes, interest, additions to tax, and
penalties shown on such returns or reports as being due or (except to
the extent the same are contested in good faith and, if material,
summarized in the MID STATES Disclosure Letter) claimed to be due to
any federal, state, county, local or other taxing authority, and there
is, and at the Effective Time will be, no basis for any additional
claim or assessment which might materially and adversely affect MID
STATES and its Subsidiaries, except for those being contested in good
faith and summarized in the MID STATES Disclosure Letter. MID STATES
and its Subsidiaries have paid or made adequate provision in their
financial statements or on their books and records for all taxes
payable in respect of all periods ending on or before the date
hereof. MID STATES and its Subsidiaries have, or at the Effective
Time will have, no liability for any taxes, interest, additions to
tax, or penalties of any nature whatsoever, except for those taxes
which may have arisen up to the Effective Time in the ordinary course
of business and are properly accrued on the books of MID STATES and
the Subsidiaries as of the Effective Time or are being contested in
good faith and have, if material, been summarized in the MID STATES
Disclosure Letter.
(k) MID STATES and the Subsidiaries have in effect insurance coverage with
reputable insurers which in respect of amounts, premiums, types and
risks insured, constitutes reasonably adequate coverage against all
risks customarily insured against by bank holding companies and their
subsidiaries comparable in size and operations to MID STATES and the
Subsidiaries.
(l) MID STATES has not incurred and will not incur any liability for
brokerage, finders', agents', or investment bankers' fees or
commissions in connection with this Merger Agreement or the
transactions contemplated hereby except for fees to DLJ to be
determined in accordance with the terms of that certain engagement
letter dated November 6, 1992 annexed as an exhibit to the MID STATES
Disclosure Letter.
(m) MID STATES has annexed to the MID STATES Disclosure Letter a loan
schedule identifying certain loan agreements, notes and borrowing
arrangements (the "MID STATES Loan Schedule") between its Subsidiaries
and borrowers of its Subsidiaries, as of the date hereof. Except as
specifically noted on the MID STATES Loan Schedule, no Subsidiary is,
as of the date hereof, a party to any written or, to MID STATES'
actual knowledge, oral (i) loan agreement, note or borrowing
arrangement, other than credit card loans and other loans the unpaid
balance of which does not exceed $100,000 per loan, under the terms of
which the obligor is over 60 days delinquent in payment of principal
or interest or, to the best of MID STATES' knowledge, in default of
any other provision as of the dates shown thereon; (ii) loan
agreement, note or borrowing arrangement which has been classified as
"substandard," "doubtful," "loss," "other loans especially mentioned"
or any comparable classifications by MID STATES, a Subsidiary or
banking regulator; (iii) loan agreement, note, or borrowing
arrangement, including any loan guaranty, with any director, executive
officer or ten percent shareholder of MID STATES, or to the actual
knowledge of MID STATES and its executive officers, after due inquiry,
any person, corporation or enterprise controlling, controlled by or
under common control with any of the foregoing; or, (iv) to the best
of MID STATES' knowledge, loan agreement, note or borrowing
arrangement in violation of any law, regulation or rule of any
governmental authority and which violation could, to the best of MID
STATES' knowledge after due inquiry, have a Material Adverse Effect.
(n) None of the information provided by MID STATES to BANC ONE for
inclusion in the Proxy Statement or related registration statement or
any amendment or supplement thereto (to the extent so included as so
provided) shall contain (in the case of information relating to the
Proxy Statement, at the time it is mailed and in the case of
information relating to the registration statement, at the time it
becomes effective) any untrue statement of a 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 misleading. The Proxy Statement that is filed with the SEC
in connection with the meeting of the shareholders of MID STATES will
comply as to form in all material respects with the provisions of the
1934 Act and the rules and regulations promulgated thereunder.
(o) MID STATES has annexed a contracts schedule (the "MID STATES Contracts
Schedule") to the MID STATES Disclosure Letter setting forth certain
material contracts, including credit agreements, on which MID STATES
or any of its Subsidiaries is the obligor, maker, issuer or guarantor
as of the date hereof. Except as specifically disclosed on the MID
STATES Contracts Schedule, neither MID STATES nor any Subsidiary is,
as of the date hereof, a party to any material contract and/or any
material credit agreement as obligor, maker, issuer or guarantor and
which contract or agreement contains covenants which make the
acquisition of MID STATES or any Subsidiary by or merger with another
entity a condition of default or acceleration.
(p) Attached hereto as Exhibit A is MID STATES' Subsidiaries List which
sets forth the complete legal name of each Subsidiary, a designation
of the laws under which each Subsidiary is incorporated, the
activities conducted by each Subsidiary and the regulatory approvals,
if any, requested and/or obtained by MID STATES and each such
Subsidiary in connection with the acquisition of each such Subsidiary
and/or regulatory approvals received by MID STATES and its
Subsidiaries necessary to engage in such activities. Except as set
forth in Exhibit A, MID STATES has no subsidiaries. Each of the
Subsidiaries is a corporation or similar entity duly organized and
validly existing in good standing under the laws of the United States
or the state of its incorporation and has full power and authority
(including all licenses, franchises, permits and other governmental
authorizations which are legally required) to engage in the businesses
and activities now conducted by it and is duly qualified to do
business and is in good standing in all jurisdictions where the
failure to so qualify (together with all such failures) would have a
Material Adverse Effect. Except as may be set forth in Exhibit A, MID
STATES and/or one or more of its Subsidiaries owns beneficially and of
record all the outstanding shares of capital stock of each Subsidiary,
which stock is fully paid and non-assessable, except as provided by
law. Neither MID STATES nor any of its Subsidiaries is a party to any
partnership or joint venture except as may be set forth and described
in Exhibit A.
(q) No employee of MID STATES or any of its Subsidiaries is represented,
for purposes of collective bargaining, by a labor organization of any
type. MID STATES is unaware of any efforts during the past five years
to unionize or organize any employees of MID STATES or any of its
Subsidiaries, and no claim related to such employees under the Fair
Labor Standards Act, National Labor Relations Act, Civil Rights Act of
1964, Walsh-Healy Act, Davis Bacon Act, Civil Rights Act of 1866, Age
Discrimination in Employment Act, Equal Pay Act of 1963, Executive
Order No. 11246, Federal Unemployment Tax Act, Vietnam Era Veterans
Readjustment Act, Occupational Safety and Health Act, or any state or
local employment related law, order, ordinance or regulation, no
unfair labor practice, discrimination or wage-and-hour claim is
pending or, to the best of MID STATES' knowledge, threatened against
MID STATES or its Subsidiaries, which claim has had or is reasonably
likely to have a Material Adverse Effect.
(r) To the actual knowledge of MID STATES and its executive officers: (i)
with respect to any Contaminant, there are no material actions,
proceedings or investigations pending or threatened before any federal
or state environmental regulatory body, or before any federal or state
court, alleging non-compliance with or liability in connection with,
by MID STATES or any Subsidiary, CERCLA or any other Environmental
Laws; (ii) there is no reasonable basis for the institution of any
material action, proceeding or investigation against MID STATES or any
Subsidiary under any Environmental Law; (iii) neither MID STATES nor
any Subsidiary is responsible in any material respect under any
Environmental Law for any Release; (iv) neither MID STATES nor any
Subsidiary is responsible for any material costs of any response
action required by virtue of any Release of any Contaminant into the
environment including, without limitation, costs arising from
investigation, removal or remediation of Contaminants, security
fencing, alternative water supplies, temporary evacuation and housing
and other emergency assistance undertaken by any environmental
regulatory body or any other person; (v) MID STATES and each
Subsidiary is, in all material respects, in compliance with all
applicable Environmental Laws; and (vi) no real property owned or used
by MID STATES or any Subsidiary contains any Contaminant including,
without limitation, any asbestos, PCBs or petroleum products or
byproducts in any form, the presence, location or condition of which
(a) could require remediation or other corrective action pursuant to
any Environmental Law in any material respect, or (b) otherwise would
pose any significant health or safety risk unless remedial measures
were taken.
(s) MID STATES and/or the Subsidiaries (i) have surveyed the facilities
where MID STATES and the Bank conduct their businesses including,
without limitation, ATMs (collectively, the "MID STATES Facilities")
for compliance with ADA; (ii) have developed action plans to remove
architectural barriers including communication barriers that are
structural in nature from existing MID STATES Facilities
(collectively, the "MID STATES Barriers") when such removal is
"readily achievable," as that term is defined in ADA; (iii) will
finalize action plans for ATMs upon clarification by the ATBCB; (iv)
have developed or will develop schedules for MID STATES Barrier
removal from MID STATES Facilities in such action plans so that MID
STATES Barrier removal will be complete on January 26, 1992 or as soon
as practicable thereafter; and (v) have removed all MID STATES
Barriers in MID STATES Facilities or will cause all MID STATES
Barriers to be removed in accordance with such action plans. All
"alterations" (as such term is defined in ADA) to MID STATES
Facilities undertaken after January 26, 1992 comply with ADA and the
ADAAG. Effective January 26, 1992, all plans and designs for new
construction to be utilized by MID STATES and the Subsidiaries comply
with ADA and ADAAG. To the best of MID STATES' knowledge, after due
inquiry, no material investigations, proceedings, or complaints,
formal or informal, are pending or threatened against MID STATES
and/or the Subsidiaries in connection with MID STATES Facilities under
ADA, ADAAG, or any other state or federal law concerning accessibility
for individuals with disabilities.
(t) The statements made and the information included in the MID STATES
Disclosure Letter and any attachments thereto shall be deemed to
constitute representations and warranties of MID STATES under this
Merger Agreement to the same extent as if herein set forth in full.
Anything disclosed in the MID STATES Disclosure Letter or the
attachments thereto shall be considered to have been disclosed for
purposes of all representations, warranties and covenants under this
Merger Agreement.
(u) There are no credit agreements on which MID STATES or any of the
Subsidiaries is the maker, issuer or guarantor and which contain
provisions which make the acquisition of MID STATES by or merger into
another entity a condition of default or acceleration.
16. Action by MID STATES Pending Effective Time. MID STATES agrees that from
the date of this Merger Agreement until the earlier of the Effective Time
or the time that this Merger Agreement is terminated, except with the
prior written permission of BANC ONE, which, in any case covered by Section
16(d) hereof, shall not be unreasonably withheld:
(a) Beginning with the first calendar quarter of 1993 and for each
succeeding calendar quarter thereafter prior to that calendar quarter
in which the Effective Time shall occur, MID STATES
(i) will not declare or pay any dividends or make any distributions
on shares of MID STATES Common, except cash dividends which
shall be equal to either: (a) $0.65 per share per quarter or
(b) that amount per share per quarter calculated by multiplying
the amount paid by BANC ONE on each share of BANC ONE Common for
such quarter times the Exchange Rate;
(ii) except as hereinbelow provided, will not declare or pay any
dividends or make any distributions in any amount on its MID
STATES Common in the quarter in which the Effective Time shall
occur and in which the shareholders of MID STATES Common are
entitled to receive regular quarterly dividends on the shares of
BANC ONE Common into which the shares of MID STATES Common have
been converted. It is the intent of this part (ii) to provide
that the holders of MID STATES Common will receive either the
payment of cash dividends on their shares of MID STATES Common
or the payment of cash dividends as the holders of shares of
BANC ONE Common received in exchange for the shares of MID
STATES Common for the calendar quarter during which the
Effective Time shall occur, but will not receive and will not
become entitled to receive for the same calendar quarter both
the payment of a cash dividend as shareholders of MID STATES and
the payment of a cash dividend as the holders of the shares of
BANC ONE Common received in exchange for the shares of MID
STATES Common. In the event that MID STATES does not declare
and pay cash dividends on its MID STATES Common in a particular
calendar quarter because of MID STATES' reasonable expectation
that the Effective Time would occur in said calendar quarter
wherein the holders of MID STATES Common would have become
entitled to receive cash dividends for such calendar quarter on
the shares of BANC ONE Common to have been exchanged for the
shares of MID STATES Common, and the Effective Time does not in
fact occur effective in said calendar quarter, then, as a result
thereof, MID STATES shall be entitled to declare and pay a cash
dividend (within the limitations of this Section 16) on said
shares of MID STATES Common for said calendar quarter as soon as
reasonably practicable.
The declaration of any dividends within the limitations of this
paragraph shall remain within the discretion of the Board of Directors
of MID STATES.
(b) MID STATES will not issue, sell, grant any option for, or acquire for
value any shares of its capital stock or otherwise effect any change
in connection with its equity capitalization.
(c) Except as otherwise set forth in or contemplated by this Merger
Agreement, MID STATES will carry on its businesses in substantially
the same manner as heretofore, use its reasonable best efforts to keep
in full force and effect insurance comparable in amount and scope of
coverage to that now maintained by it and use its reasonable best
efforts to maintain and preserve its business organization intact.
(d) Neither MID STATES nor any Subsidiary will (i) enter into any new line
of business or incur or agree to incur any obligation or liability
except liabilities and obligations (including corporate debt
issuances) incurred in the ordinary course of business, except as may
be directed by any regulatory agency; (ii) except as may be directed
by any regulatory agency, change its or the Subsidiaries' lending,
investment, liability management and other material banking policies
in any material respect; (iii) except in the ordinary course of
business and consistent with prior practice, grant any general or
uniform increase in the rates of pay of employees; (iv) establish any
new employee benefit plan or amend any existing plan (except as
required by law or permitted in the Benefits Letter) so as to increase
by any significant amount the benefits payable thereunder; (v) incur
or commit to any capital expenditures other than in the ordinary
course of business (which will in no event include the establishment
of new branches or any other facilities or any capital expenditures in
excess of $50,000 for any individual project for any purpose) except
any alterations MID STATES, after consultation with BANC ONE, decides
are required by the Americans with Disabilities Act or referenced in
the MID STATES Disclosure Letter; or (vi) merge into, consolidate with
or permit any other corporation to be merged or consolidated with it
or any of its Subsidiaries or acquire outside of the ordinary course
of business part of or all the assets or stock of any other
corporation or person.
(e) MID STATES will not change its or its Subsidiaries' methods of
accounting in effect at December 31. 1992, except as required by
changes in generally accepted accounting principles as concurred in by
McGladrey & Pullen, or change any of its methods of reporting income
and deductions for Federal income tax purposes from those employed in
the preparation of MID STATES' Federal income tax returns for the
taxable years ending December 31, 1992 and 1991, except as required by
changes in law or regulation.
(f) MID STATES will afford BANC ONE, its officers and other authorized
representatives, such access to all books, records, bank examination
reports (as permitted by law), tax returns, leases, contracts and
documents of MID STATES and its Subsidiaries and will furnish to BANC
ONE such information with respect to the assets and business of MID
STATES and its Subsidiaries as BANC ONE may from time to time
reasonably request in connection with this Merger Agreement and the
transactions contemplated hereby.
(g) MID STATES will promptly advise BANC ONE in writing of all material
corporate actions taken by the directors and shareholders of MID
STATES, furnish BANC ONE with copies of all monthly and other interim
financial statements of MID STATES as they become available, and keep
BANC ONE fully informed concerning all trends and developments which
in the opinion of MID STATES may have a Material Adverse Effect on MID
STATES.
(h) MID STATES, its Subsidiaries and their respective officers, directors
and employees will not contract for or acquire, at the expense of MID
STATES or any of its Subsidiaries, a policy or policies providing for
insurance coverage for directors, officers and/or employees of MID
STATES and/or its Subsidiaries for any period subsequent to the
Effective Time for events occurring before or after the Effective
Time; provided, however, that MID STATES may renew, extend or replace
existing policies in the ordinary course consistent with past
practices for periods of not greater than one year.
17. Action by BANC ONE Pending Effective Time. BANC ONE agrees that from the
date of this Merger Agreement until the Effective Time, except with prior
written permission of MID STATES:
(a) BANC ONE will not adopt or implement any amendment to its Articles of
Incorporation or any plan of reorganization which would affect in any
manner the terms and provisions of the shares of BANC ONE Common or
the rights of the holders of such shares or reclassify the BANC ONE
Common.
(b) Except as otherwise set forth in or contemplated by this Merger
Agreement, BANC ONE will carry on its businesses in substantially the
same manner as heretofore, use its reasonable best efforts to keep in
full force and effect insurance comparable in amount and scope of
coverage to that now maintained by it and use its reasonable best
efforts to maintain and preserve its business organization intact.
(c) BANC ONE will not change its or its subsidiaries' methods of
accounting in effect at December 31, 1992, except as required by
changes in generally accepted accounting principles as concurred with
by Coopers & Lybrand, its independent auditors, or change any of its
methods of reporting income and deductions for Federal income tax
purposes from those employed in the preparation of the Federal income
tax returns of BANC ONE for the taxable years ending December 31, 1992
and 1991, except as required by changes in law or regulation.
(d) BANC ONE will afford MID STATES, its officers and other authorized
representatives, such access to all books, records, bank examination
reports (as permitted by law), tax returns, leases, contracts and
documents of BANC ONE and its subsidiaries and will furnish to MID
STATES such information with respect to the assets, earnings and
business of BANC ONE and its subsidiaries as MID STATES may from time
to time reasonably request in connection with this Agreement and the
transactions contemplated hereby.
18. Conditions to Obligations of BANC ONE and BANC ONE ILLINOIS. The
obligations of BANC ONE and BANC ONE ILLINOIS to effect the Merger are
subject, unless waived by BANC ONE, to the satisfaction of the following
conditions on or prior to the Effective Time:
(a) There shall not have been any change in the consolidated financial
condition, aggregate net assets, shareholders' equity, business or
operating results of MID STATES and its Subsidiaries, taken as a
whole, from March 31, 1993 to the Effective Time that has had a
Material Adverse Effect.
(b) MID STATES shall not have paid cash dividends from March 31, 1993 to
the Effective Time except as permitted under this Merger Agreement.
(c) All representations by MID STATES contained in this Merger Agreement
shall be true in all material respects at, or as of, the Effective
Time as though such representations were made at and as of said date,
except for changes contemplated by the Merger Agreement, and except
also for representations as of a specified time other than the
Effective Time, which shall be true in all material respects at such
specified time; provided, however, that the representation of MID
STATES contained in Section 15(d) shall be true in all material
respects as applied to the Balance Sheet of MID STATES included in the
most recently available quarterly or annual report to MID STATES
shareholders and/or MID STATES' report to the SEC on Form 10-Q or Form
10-K as of the close of the most recent calendar quarter prior to the
Effective Date (as hereinafter defined) and the reserve for possible
loan and lease losses included therein, as though each reference to
"March 31, 1993" in such section were a reference to the last day of
the most recent calendar quarter prior to the day of the Effective
Time (the "Effective Date").
(d) BANC ONE shall have received the opinion of legal counsel for MID
STATES, dated as of the Effective Time, substantially to the effect
set forth in Exhibit D hereto, together with a copy of the Certificate
of Incorporation, as amended, of MID STATES certified by the Secretary
of State of the State of Delaware and a copy of the charter documents,
as amended, of each Subsidiary and, for MID STATES and each
Subsidiary, Certificates of Good Standing dated as a date not more
than 20 days prior to the Effective Time from the OCC, the Illinois or
Delaware Secretary of State or other appropriate governmental or
regulatory entities, as applicable.
(e) MID STATES shall have performed in all material respects all
agreements and conditions required by this Merger Agreement to be
performed and satisfied by it at or prior to the Effective Time.
(f) As of the close of the most recent calendar quarter (or if the
Effective Time shall occur within 20 days following the close of a
calendar quarter, then as of the next preceding calendar quarter)
cumulative earnings reported by MID STATES since March 31, 1993 shall
be greater than or equal to the amount calculated by multiplying (a)
$565,000 by (b) the number of full calendar quarters which have passed
since March 31, 1993 and for which earnings have been reported as of
such date, times (c) 0.9. As used in this Section "reported" means
reported on MID STATES' financial statements prepared in accordance
with generally accepted accounting principles applied on a basis
consistent with MID STATES' financial statements for the years ended
December 31, 1992 and 1991, as included in MID STATES' reports to the
SEC on Form 10-K or MID STATES' annual reports to shareholders subject
to any subsequent adjustments required to be reported to the SEC
whether or not such adjustments have, as yet, been reported with the
following adjustments, if any, net of related tax savings and costs
which were reflected in net income for the relevant period(s) added
back into or deducted from net income for the applicable period: (i)
investment banking expenses, outside legal and accounting fees, or
other costs associated with the Merger, (ii) gains or losses on sales
of assets outside of the ordinary course of business, (iii) any other
expenses upon which BANC ONE and MID STATES shall mutually agree, and
(iv) any other reserves or adjustments requested by BANC ONE or
referenced in the MID STATES Disclosure Letter.
(g) The total number of shares of MID STATES Common issued and outstanding
shall not be more than 311,560 shares.
(h) The aggregate of (i) the fractional share interests of BANC ONE Common
to be paid in cash pursuant to Section 7(c), and (ii) the shares of
BANC ONE Common to which holders of MID STATES Common would have been
entitled as of the Effective Time but who, as of the Effective Time,
have taken steps to perfect their rights as dissenting shareholders
pursuant to the provisions of applicable law, shall not be more than
10% of the maximum aggregate number of shares of BANC ONE Common which
could be issued as a result of the Merger.
(i) MID STATES shall have furnished BANC ONE a certificate, signed on its
behalf by the Chairman or President and the Secretary or an Assistant
Secretary of MID STATES and dated as of the Effective Time, certifying
as to the form of and adoption of resolutions of the Board and
shareholders of MID STATES approving the Merger Agreement and the
Merger, respectively, and to the effect that the conditions described
in Paragraphs (a), (b), (c), (e), (f) and (g) of this Section 18 have
been fully satisfied.
19. Conditions to Obligations of MID STATES. The obligations of MID STATES to
effect the Merger are subject, unless waived by MID STATES, to the
satisfaction on or prior to the Effective Time of the following conditions:
(a) There shall not have been any change in the consolidated financial
condition, aggregate net assets, shareholders' equity, business, or
operating results of BANC ONE and its subsidiaries, taken as a whole,
from March 31, 1993 to the Effective Time that has had a Material
Adverse Effect.
(b) All representations by BANC ONE and BANC ONE ILLINOIS contained in
this Merger Agreement shall be true in all material respects at, or as
of, the Effective Time as though such representations were made at and
as of said date, except for changes contemplated by this Merger
Agreement, and except also for representations as of a specified time
other than the Effective Time, which shall be true in all material
respects at such specified time; provided, however, that the
representation of BANC ONE contained in Section 13(d) shall be true in
all material respects as applied to the Consolidated Balance Sheet of
BANC ONE included in the most recently available quarterly or annual
report to BANC ONE's shareholders and/or BANC ONE's report to the SEC
on Form 10-Q or Form 10-K as of the close of the most recent calendar
quarter prior to the Effective Date and the reserve for possible loan
and lease losses included therein, as though each reference to "March
31, 1993" in such section were a reference to the last day of the most
recent calendar quarter prior to the Effective Date.
(c) MID STATES shall have received the opinion of counsel for BANC ONE and
BANC ONE ILLINOIS (i) on and dated the date on which the registration
statement described in Section 10(d) of this Merger Agreement shall
have become effective as described in Section 19(b) of this Merger
Agreement substantially to the effect of the three last paragraphs of
Exhibit E hereto and (ii) on and dated as of the Effective Time
substantially to the effect set forth in Exhibit E hereto, together
with a copy of the Articles of Incorporation of BANC ONE certified by
the Secretary of State of the State of Ohio and a copy of the Articles
of Incorporation of BANC ONE ILLINOIS certified by the Secretary of
State of the State of Illinois and copies of such other charter
documents and Certificates of Good Standing of BANC ONE and BANC ONE
ILLINOIS dated as of a date not more than 20 days prior to the day of
the Effective Time from the Ohio and Illinois Secretaries of State,
respectively, as MID STATES shall reasonably require.
(d) BANC ONE and BANC ONE ILLINOIS shall have performed all agreements and
conditions required by this Merger Agreement to be performed and
satisfied by it at or prior to the Effective Time.
(e) As of the close of the most recent calendar quarter (or if the
Effective Time shall occur within 20 days following the close of a
calendar quarter, then as of the close of the next preceding calendar
quarter) cumulative per share earnings reported by BANC ONE since
March 31, 1993 shall be greater than or equal to the amount calculated
by multiplying (a) $0.96 by (b) the number of full calendar quarters
which have passed since March 31, 1993 and for which earnings have
been reported as of such date, times (c) 0.9. As used in this
Section, "reported" means reported on BANC ONE's consolidated
financial statements prepared in accordance with generally accepted
accounting principles applied on a basis consistent with BANC ONE's
consolidated financial statements for the years ended December 31,
1992 and 1991, as included in BANC ONE's reports to the SEC on Forms
10-K or BANC ONE's annual reports to shareholders subject to any
subsequent adjustments required to be reported to the SEC whether or
not such adjustments have, as yet, been reported.
(f) MID STATES shall have received an opinion from DLJ dated as of a date
not later than the date of the Proxy Statement, to the effect that, in
the opinion of such firm, the financial consideration to be received
as a result of the Merger is fair from a financial point of view to
the holders of MID STATES Common and such opinion shall not have been
withdrawn prior to the Effective Time.
(g) BANC ONE shall have furnished MID STATES a certificate, signed by the
Chairman or President or an Executive Vice President and by the
Secretary or Assistant Secretary of BANC ONE and dated as of the
Effective Time certifying as to the form of and adoption of the
resolutions of the Boards of BANC ONE and of BANC ONE ILLINOIS
approving the Merger Agreement and the Merger, and to the effect that
the conditions described in Paragraphs (a), (b), (d), (e) and (h) of
this Section 19 have been fully satisfied.
(h) The shares of BANC ONE Common to be issued to the holders of MID
STATES Common shall be listed on the NYSE.
20. Conditions to Obligations of All Parties. In addition to the provisions of
Sections 18 and 19 hereof, the obligations of BANC ONE and MID STATES to
effect the Merger shall be subject to the satisfaction of the following
conditions on or prior to the Effective Time:
(a) The parties hereto shall have received all necessary approvals of
governmental agencies and authorities of the transactions contemplated
by this Merger Agreement and each of such approvals shall remain in
full force and effect at the Effective Time. BANC ONE shall notify
MID STATES promptly upon receipt of all necessary governmental
approvals. At the Effective Time, (i) no party hereto shall be
subject to any order, decree or injunction of a court or governmental
agency of competent jurisdiction which enjoins or prohibits the
consummation of the Merger; and (ii) no statute, rule, regulation,
order, injunction or decree shall have been enacted, entered,
promulgated or enforced by any governmental authority which prohibits
or makes illegal consummation of the Merger.
(b) The registration statement required to be filed by BANC ONE pursuant
to Section 10(d) of this Merger Agreement shall have become effective
by an order of the SEC, the shares of BANC ONE Common to be exchanged
in the Merger shall have been qualified or exempted under all
applicable state securities laws, and there shall have been no stop
order issued or threatened by the SEC that suspends or would suspend
the effectiveness of the registration statement, and no proceeding by
the SEC shall have been commenced, pending or overtly threatened for
such purpose and the BANC ONE Common to be issued in the Merger will
be authorized for trading on the NYSE.
(c) This Merger Agreement and the Merger shall have been duly approved and
adopted by the requisite affirmative vote of the shareholders of MID
STATES and BANC ONE ILLINOIS.
(d) Vedder, Price, Kaufman & Kammholz shall have issued its written
opinion, dated as of the day of the Effective Time, satisfactory to
MID STATES and BANC ONE, respectively, substantially to the effect set
forth in clauses (a) through (h) of Section 12 of this Merger
Agreement and there shall exist as of, at or immediately prior to the
Effective Time no facts or circumstances which would render such
opinion inapplicable in any respect to the transactions to be
consummated hereunder.
(e) Coopers & Lybrand shall have issued its written opinion, dated as of a
date not later than the Effective Time, satisfactory, in good faith,
to BANC ONE, advising that the transaction herein contemplated may be
properly accounted for as a pooling-of-interests; provided, however,
that this condition shall be deemed to have been waived by BANC ONE if
the inability to obtain such opinion arises out of, or results
directly or indirectly from, any action taken by BANC ONE, BANC ONE
ILLINOIS or any of their respective subsidiaries contrary to that
contemplated by this Merger Agreement.
21. Indemnification.
(a) In the event of any threatened or actual claim, action, suit,
proceeding or investigation, whether formal or informal and whether
civil, administrative or criminal, including, without limitation, any
such claim, action, suit, proceeding or investigation in which any
person who is now, or has been at any time prior to the date hereof,
or who becomes prior to the Effective Time, a director, officer,
employee, fiduciary or agent of MID STATES or any of its Subsidiaries
(the "Indemnified Parties") is, or is threatened to be, made a party
or a witness, based in whole or in part on, or arising in whole or in
part out of, or pertaining to, this Merger Agreement or any of the
transactions contemplated hereby (a "Merger Related Event"), whether
in any case asserted or arising before or after the Effective Time,
the parties hereto agree to cooperate and use their reasonable best
efforts to defend against and respond to such claim, action, suit,
proceedings or investigation. It is understood and agreed that,
provided that, with regard to any Merger Related Event, and
conditioned upon the Merger becoming effective, BANC ONE shall
indemnify and hold harmless, as and to the fullest extent permitted by
applicable law, each Indemnified Party against any and all losses,
claims, damages, liabilities, costs, expenses (including attorneys'
fees and expenses), judgments and fines, and amounts paid in
settlement, in connection with any such threatened or actual claim,
action, suit, proceedings or investigation; provided, however, that
BANC ONE shall not be liable for any settlement effected without its
prior written consent (which consent shall not be unreasonably
withheld). In the event of any such threatened or actual claim,
action, suit, proceedings or investigation (whether asserted or
arising before or after the Effective Time), (i) BANC ONE shall pay
expenses (including attorney's fees and expenses) in advance of the
final disposition of any claim, suit, proceedings or investigation to
each Indemnified Party to the fullest extent permitted by applicable
law, and (ii) BANC ONE shall use its reasonable best efforts to assist
in the vigorous defense of any such matter; provided, however, that
BANC ONE's obligations as herein set forth shall not apply to any
losses, claims, damages, liabilities, costs, expenses, judgments,
fines and amounts paid in settlement by any Indemnified Party
involving the fraud, bad faith and/or reckless disregard of such
Indemnified Party related to any threatened or actual claim, action,
suit, proceedings or investigation brought by BANC ONE against any
Indemnified Party. Any Indemnified Party wishing to claim
indemnification under this Section 21(a) shall, upon learning of or
having reason to anticipate any such claim, action, suit, proceedings
or investigation, immediately notify BANC ONE thereof.
(b) BANC ONE shall insure that all rights to indemnification and all
limitations of liability existing in favor of the Indemnified Parties
as provided in MID STATES's Certificate of Incorporation and By-laws
or similar governing documents of any of its Subsidiaries, as in
effect as of May 1, 1993, or as provided for or allowed under
applicable law as in effect as of the date hereof or as amended at a
time prior to the Effective Time, with respect to claims or
liabilities arising from facts or events existing or occurring prior
to the Effective Time, shall survive the Merger and shall continue in
full force and effect, without any amendment thereto, for a period of
three (3) years from the Effective Time; provided, however, that all
rights to indemnification in respect of any claim asserted or made
within such period shall continue until the final disposition of such
claim.
(c) From and after the Effective Time, persons who, immediately prior to
the Effective Time, served as the directors, officers and employees of
MID STATES and its Subsidiaries, who, following the Effective Time,
continue as directors, officers and/or employees of the Surviving
Corporation or one of the Subsidiaries, shall have indemnification
rights having prospective application only, except, however, for the
indemnification rights set forth in paragraphs (a) and (b) of this
Section 21. These prospective indemnification rights shall consist of
(i) such rights to which directors, officers and employees are
entitled under the provisions of the Certificate of Incorporation,
Bylaws or similar governing documents of the Surviving Corporation and
its subsidiaries, as applicable, as in effect from time to time after
the Effective Time, as applicable, and provisions of applicable law as
in effect from time to time after the Effective Time and (ii) those
indemnification rights set forth in agreements, if any, between BANC
ONE and the directors and executive officers of the Surviving
Corporation and its subsidiaries. Such agreements, if any, which
shall be executed as soon as practicable following the Effective Time,
shall provide certain indemnification rights that are comparable to
those provided to directors, officers and employees of BANC ONE and
its subsidiaries generally, but which rights may be greater or lesser
than the indemnification rights available in clause (i) above.
(d) The obligations of BANC ONE provided under paragraphs (a) and (b) this
Section 21 are intended to be the joint and several obligations of
BANC ONE and the Surviving Corporation and to benefit, and be
enforceable against BANC ONE and the Surviving Corporation directly
by, the Indemnified Parties, and shall be binding on all respective
successors and permitted assigns of BANC ONE and the Surviving
Corporation.
(e) In the event BANC ONE or the Surviving Corporation or any of its
successors or assigns (i) consolidates with or merges into any other
person and shall not be the continuing or surviving corporation or
entity of such consolidation or merger, or (ii) transfers or conveys
all or substantially all of its properties and assets to any person,
then, and in each such case, proper provision shall be made so that
the successors and assigns of BANC ONE or the Surviving Corporation,
as the case may be, assume the obligations set forth in this Section
21.
22. Non-Survival of Representations and Warranties. The respective
representations and warranties of MID STATES, BANC ONE and BANC ONE
ILLINOIS contained in this Merger Agreement shall not survive the Effective
Time.
23. Governing Law. This Merger Agreement shall be construed and interpreted
according to the applicable laws of the State of Illinois, except as the
laws of the State of Delaware are expressly applicable to the Merger.
24. Assignment. This Merger Agreement and all of the provisions hereof shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and permitted assigns, but neither this Merger
Agreement nor any of the rights, interest, or obligations hereunder shall
be assigned by any of the parties hereto without the prior written consent
of the other parties.
25. Satisfaction of Conditions; Termination.
(a) BANC ONE and BANC ONE ILLINOIS agree to use their reasonable best
efforts to obtain satisfaction of the conditions of this Merger
Agreement insofar as they relate to BANC ONE and BANC ONE ILLINOIS,
and MID STATES agrees to use its reasonable best efforts to obtain the
satisfaction of the conditions of this Merger Agreement insofar as
they relate to MID STATES, in each case as soon as possible.
(b) This Merger Agreement may be terminated at any time prior to the
Effective Time, whether before or after approval of the Merger by the
shareholders of BANC ONE ILLINOIS or by MID STATES' shareholders, upon
the occurrence of any of the following by written notice from BANC ONE
to MID STATES (authorized by the Board of Directors of BANC ONE), or
by written notice from MID STATES to BANC ONE (authorized by the Board
of Directors of MID STATES), as the case may be:
(i) If any material condition to the obligations of BANC ONE and/or
BANC ONE ILLINOIS set forth in Section 18 or 20 is not
substantially satisfied at the time or times contemplated
thereby and such condition is not waived by BANC ONE or if any
material condition to the obligations of MID STATES as set forth
in Section 19 or 20 is not substantially satisfied at the time
or times contemplated thereby and such condition is not waived
by MID STATES, each party's right to terminate under this
Section 25 (b)(i) shall relate only to conditions to that
party's obligations;
(ii) In the event of a material breach by the other of any
representation, warranty, condition or agreement contained in
this Merger Agreement that is not cured within 30 days of the
time that written notice of such breach is received by such
other party from the party giving notice; or
(iii) If the Merger shall not have been consummated on or before May
1, 1994.
(c) In the event that BANC ONE's pre-acquisition investigation and review
of MID STATES as described in Section 10(n) of this Merger Agreement
discloses matters which BANC ONE in good faith believes to be either
(i) inconsistent in any material respect with any of the
representations and warranties of MID STATES contained in this
Agreement or (ii), in the reasonable judgment of the Board of
Directors of BANC ONE, to be either (x) of such significance as to
materially and adversely affect the financial condition or the results
of operations of MID STATES and its Subsidiaries on a consolidated
basis or (y) to deviate materially and adversely from MID STATES'
audited financial statements for the year ended December 31, 1992,
BANC ONE shall have the right to terminate this Merger Agreement as
set forth in this Section 25(c) as supplemented by the MID STATES
Disclosure Letter by giving written notice of termination to MID
STATES within seven days of the conclusion of such pre-acquisition
investigation.
(d) In the event that MID STATES' pre-acquisition investigation and review
of BANC ONE as described in Section 10(o) of this Merger Agreement
discloses matters which MID STATES in good faith believes to be either
(i) inconsistent in any material respect with any of the
representations and warranties of BANC ONE contained in this
Agreement, or (ii) in the reasonable judgment of the Board of
Directors of MID STATES, to be either (x) of such significance as to
materially and adversely affect the financial condition or the results
of operations of BANC ONE and its subsidiaries on a consolidated basis
or (y) to deviate materially and adversely from BANC ONE's audited
financial statements for the year ended December 31, 1992, MID STATES
may elect to terminate this Merger Agreement by giving written notice
of termination to BANC ONE within seven days of the conclusion of such
pre-acquisition investigation.
(e) In the event the BANC ONE Average Price (as defined in Section 7 of
this Merger Agreement) is less than $52.00 per share, MID STATES, by
action of its Board of Directors, may elect to terminate this Merger
Agreement, whether before or after approval of the Merger by the
shareholders of MID STATES or by BANC ONE ILLINOIS shareholders, by
giving written notice of such election to BANC ONE within two NYSE
trading days after the Valuation Period (as defined in Section 7 of
this Merger Agreement). If prior to the Valuation Period, BANC ONE
shall effect a stock dividend or make distributions upon or subdivide,
split up, reclassify or combine its shares of the BANC ONE Common,
appropriate adjustment or adjustments will be made in the BANC ONE
Average Price.
A termination resulting from MID STATES' election under this Section
25(e) shall be deemed to have been a termination by mutual consent of
the parties.
(f) This Merger Agreement may be terminated and abandoned (whether before
or after approval of the Merger by the shareholders of BANC ONE
ILLINOIS or by MID STATES' shareholders) by mutual written consent of
MID STATES, BANC ONE ILLINOIS and BANC ONE authorized by their
respective Boards of Directors.
(g) In the event of termination of this Merger Agreement (i) caused
otherwise than by a willful breach of this Merger Agreement by any of
the parties hereto or (ii) pursuant to Section 25(c) or (d), this
Merger Agreement shall cease and terminate, the acquisition of MID
STATES as provided herein shall not be consummated, and none of BANC
ONE, BANC ONE ILLINOIS nor MID STATES shall have any liability to any
other party under this Merger Agreement of any nature whatever, except
for BANC ONE's obligations related to the printing of the proxy
solicitation materials, including any liability for damages, provided,
however, that the duties of the parties with respect to confidential
information as set forth in Section 10(f) shall survive any such
termination. If the Merger is not consummated as the result of
termination of this Merger Agreement caused otherwise than by willful
breach of a party hereto, BANC ONE, BANC ONE ILLINOIS and MID STATES
each shall pay its own fees and expenses incident to the negotiation,
preparation and execution of this Merger Agreement, the respective
shareholders' meetings and actions of the parties and all other acts
incidental to, contemplated by or in pursuance of the transactions
contemplated by this Merger Agreement, including fees and expenses of
their respective counsel, accountants and other experts and advisors.
(h) If termination of this Merger Agreement shall be judicially determined
to have been caused by willful breach of this Merger Agreement, then,
in addition to other remedies at law or equity for breach of this
Merger Agreement, the party so found to have willfully breached this
Merger Agreement shall indemnify the other parties for their
respective costs, fees and expenses of their counsel, accountants and
other experts and advisors as well as fees and expenses incident to
negotiation, preparation and execution of this Merger Agreement and
related documentation and their shareholders' meetings and consents.
26. Waivers; Amendments. Any of the provisions of this Merger Agreement may be
waived at any time by the party which is, or the shareholders of which are,
entitled to the benefit thereof, provided, however, such waiver, if
material to MID STATES or its shareholders, may be made only following due
authorization by the Board of Directors of MID STATES. This Merger
Agreement may be amended or modified in whole or in part by an agreement in
writing executed in the same manner (but not necessarily by the same
persons) as this Merger Agreement and which makes reference to this Merger
Agreement, provided, however, such amendment or modification may be made
only following due authorization by the respective Boards of Directors of
MID STATES, BANC ONE ILLINOIS and BANC ONE; provided, further, however,
that after a favorable vote by the shareholders of MID STATES any such
action shall be taken by MID STATES only if, in the opinion of its Board of
Directors, such amendment or modification will not have any material
adverse effect on the benefits intended under this Merger Agreement for the
shareholders of MID STATES and will not require resolicitation of any
proxies from such shareholders.
27. Entire Agreement. Subject to the exceptions noted in the next following
sentence, this Agreement supersedes any other agreement, whether written or
oral, that may have been made or entered into by MID STATES, BANC ONE
ILLINOIS and BANC ONE or by any officer or officers of such parties
relating to the acquisition of the business or the capital stock of MID
STATES and/or its Subsidiaries by BANC ONE or BANC ONE ILLINOIS. Except
for the BANC ONE Disclosure Letter and any attachment thereto, the MID
STATES Disclosure Letter and any attachments thereto, the Benefits
Agreement and the Second Benefits Agreement, this Merger Agreement
constitutes the entire agreement by the parties, and there are no
agreements or commitments except as set forth herein and therein.
28. Captions; Counterparts. The captions in this Merger Agreement are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Merger Agreement.
This Merger Agreement may be executed in several counterparts, each of
which shall constitute one and the same instrument.
29. Notices. All notices and other communications hereunder may be made by
mail, hand-delivery or by courier service. If notices and other
communications are made by nationally recognized overnight courier service
for overnight delivery, such notice shall be deemed to have been given one
business day after being forwarded to such a nationally recognized
overnight courier service for overnight delivery and otherwise when
received. All notices and other communications hereunder given to any
party shall be communicated to the remaining party to this Merger Agreement
by mail or by hand-delivery in the same manner as herein provided.
(a) If to BANC ONE, to:
BANC ONE CORPORATION
Attention of: Chief Executive Officer
100 East Broad Street
Columbus, Ohio 43271
With a copy to:
BANC ONE CORPORATION
Attention of: Roman J. Gerber
General Counsel
100 East Broad Street
Columbus, Ohio 43271
(b) If to MID STATES, to:
MID STATES BANCSHARES, INC.
Attention of: Thomas H. Robinson
Chief Executive Officer and President
506 15th Street
Moline, Illinois 61265-2184
With a copy to:
Vedder, Price, Kaufman & Kammholz
Attention of: Daniel O'Rourke
222 N. LaSalle Street, 26th Floor
Chicago, Illinois 60601-1003
(c) If to BANC ONE ILLINOIS, to:
BANC ONE ILLINOIS CORPORATION
Attention of: Willard Bunn III
Chairman
One East Old State Capitol Plaza
Springfield, Illinois 62701
With a copy to:
BANC ONE ILLINOIS CORPORATION
Attention of: Samuel J. Witsman
General Counsel
One East Old State Capitol Plaza
Springfield, Illinois 62701
IN WITNESS WHEREOF, this Merger Agreement has been executed the day and year
first above written.
BANC ONE CORPORATION
ATTEST:
CHARLES F. ANDREWS By: ROMAN J. GERBER
Charles F. Andrews Roman J. Gerber
Assistant Secretary Executive Vice President
MID STATES BANCSHARES, INC.
ATTEST:
G. H. CLAUSEN
G. H. Clausen
Vice President and Secetary
By: THOMAS H. ROBINSON
President and Chief Executive
Officer
BANC ONE ILLINOIS CORPORATION
ATTEST:
THOMAS H. CARTWRIGHT
By: WILLARD BUNN III
Willard Bunn III
Chairman
EXHIBITS TO AGREEMENT AND PLAN OF MERGER
Exhibit A - MID STATES Subsidiaries List
Exhibit B - Form of Plan of Merger
Exhibit C - Form of Undertaking by Affiliates
Exhibit D - Opinion of Counsel for MID STATES
Exhibit E - Opinion of Counsel for BANC ONE and BANC ONE ILLINOIS
EXHIBIT A
MID STATES SUBSIDIARIES LIST
Other
Activities for
Incorporated Activities Which Regulatory
Name Under Conducted Approval Obtained
The First National Bank Federal law commercial None
of Moline bank
EXHIBIT B
FORM OF PLAN OF MERGER
This Plan of Merger dated as of , 199 sets forth certain of the
terms relating to the merger (the "Merger") of Banc One Illinois Corporation,
an Illinois corporation ("BANC ONE ILLINOIS") and MID STATES BANCSHARES, INC.,
a Delaware corporation ("MID STATES");
1. Merger and the Surviving Corporation.
(a) Subject to the terms and conditions of the Agreement and Plan of
Merger dated as of , 1993 (the "Merger Agreement") among MID
STATES, BANC ONE ILLINOIS and BANC ONE CORPORATION, an Ohio
corporation ("BANC ONE") and the sole shareholder of BANC ONE
ILLINOIS, MID STATES shall be merged with and into BANC ONE ILLINOIS
(which shall be the surviving corporation in the Merger) in accordance
with the Illinois Business Corporation Act of 1983, as amended (the
"Illinois BCA"). The Merger shall become effective upon the issuance
by the Secretary of State of the State of Illinois of articles of
merger with respect thereto. For purposes hereof, the term "Effective
Time" shall mean the time when such articles of merger is issued by
the Secretary of State of the State of Illinois, and the term
"Surviving Corporation" shall mean BANC ONE ILLINOIS as the
corporation surviving the Merger.
(b) At the Effective Time, by virtue of the Merger, the Surviving
Corporation shall have all the rights, privileges, immunities and
powers, and shall be subject to all the duties and liabilities, of a
corporation organized under the Illinois BCA, and the Surviving
Corporation shall thereupon and thereafter possess all the rights,
privileges, immunities, and franchises, of a public as well as of a
private nature, of each of BANC ONE ILLINOIS and MID STATES; and all
property, real, personal, and mixed, and all debts due on whatever
account, and all other choses in action, and all and every other
interest, of or belonging to or due to each of BANC ONE ILLINOIS and
MID STATES, shall be taken and deemed to be transferred to and vested
in the Surviving Corporation without further act or deed; and the
title to any real estate, or any interest therein, vested in either
BANC ONE ILLINOIS or MID STATES shall not revert or be in any way
impaired by reason of the Merger, and the Surviving Corporation shall
be responsible and liable for all the liabilities and obligations of
each of BANC ONE ILLINOIS and MID STATES, all with the full effect
provided for in the Illinois BCA.
(c) The Surviving Corporation shall be governed by the laws of the State
of Illinois. The Articles of Incorporation of BANC ONE ILLINOIS in
effect immediately prior to the Effective Time shall be the Articles
of Incorporation of the Surviving Corporation at and after the
Effective Time.
(d) The By-laws of BANC ONE ILLINOIS in effect immediately prior to the
Effective Time shall be the By-laws of the Surviving Corporation at
and after the Effective Time, until altered, amended or repealed as
provided therein and in the Articles of Incorporation of the Surviving
Corporation.
(e) The directors of BANC ONE ILLINOIS in office immediately prior to the
Effective Time shall be the directors of the Surviving Corporation at
and after the Effective Time, until the next annual meeting of
shareholders at which their respective successors are elected and
qualified in accordance with the By-laws of the Surviving Corporation.
(f) The officers of BANC ONE ILLINOIS in office immediately prior to the
Effective Time shall be the officers of the Surviving Corporation at
and after the Effective Time, holding the offices in the Surviving
Corporation which they held in BANC ONE ILLINOIS immediately prior
thereto, until their successors are elected or appointed in accordance
with the By-laws of the Surviving Corporation and shall have duly
qualified.
2. Conversion of Stock.
(a) At the Effective Time:
(i) Each of the not more than 314,600 shares of MID STATES Common
that shall be issued and outstanding immediately prior to the
Effective Time (excluding any shares held by MID STATES as
treasury shares) shall thereupon and without further action be
converted into 1.98 shares of BANC ONE Common, subject, however,
to (A) the anti-dilution provisions of Section 2(d) of this
Merger Agreement and (B) provisions hereinafter contained
relative to fractional shares (the "Exchange Rate").
(ii) The 100 shares of BANC ONE ILLINOIS Common issued and
outstanding immediately prior to the Effective Time shall
continue to be issued and outstanding shares of common stock
without par value of the Surviving Corporation.
(iii) All of the shares of MID STATES Common held by MID STATES as
treasury shares immediately prior to the Effective Time shall be
cancelled and shall not represent capital stock of the Surviving
Corporation and shall not be exchanged for shares of BANC ONE
Common.
(b) MID STATES' shareholders of record at the Effective Time, for the
shares of MID STATES Common then held by them, respectively, shall be
allocated and be entitled to receive (upon surrender of certificates
formerly representing shares of MID STATES Common for cancellation)
certificates for shares of BANC ONE Common as shall be equal to the
number of shares of MID STATES Common outstanding immediately prior to
the Effective Time multiplied by the Exchange Rate.
(c) No certificate for fractional shares of BANC ONE Common will be issued
by BANC ONE in connection with the exchange contemplated by the
Merger, but in lieu thereof, any holder of MID STATES Common shall,
upon surrender of the certificate or certificates representing such
MID STATES Common, be paid cash, without interest, by BANC ONE for
such fractional shares on the basis of the BANC ONE Average Price (as
hereinafter defined). The BANC ONE Average Price shall mean the
average of the closing prices of BANC ONE Common on the New York Stock
Exchange ("NYSE") during the Valuation Period (as hereinafter defined)
in The Wall Street Journal for NYSE Composite Transactions. The term
"Valuation Period" shall mean the ten consecutive NYSE trading days
ending on the sixth NYSE trading day immediately prior to the proposed
Effective Time, as designated by BANC ONE.
(d) If prior to the Effective Time, (i) MID STATES shall declare a stock
dividend or distribution upon or subdivide, split up, reclassify or
combine MID STATES Common or declare a dividend or make a distribution
on MID STATES Common in any security convertible into MID STATES
Common, or (ii) BANC ONE shall declare a stock dividend or
distribution upon or subdivide, split up, reclassify or combine BANC
ONE Common or declare a dividend or make a distribution on BANC ONE
Common in any security convertible into BANC ONE Common, appropriate
adjustment or adjustments will be made in the Exchange Rate.
3. Dissenting Shares. MID STATES' shareholders who do not vote their shares
of MID STATES Common in favor of the Merger and otherwise perfect
applicable dissenters' rights and shareholders of MID STATES Preferred who
perfect applicable dissenters' rights will be entitled to dissenters or
appraisal rights pursuant to applicable provisions of the Delaware General
Corporation Laws.
4. Surrender of Certificates.
(a) Prior to the Effective Time, BANC ONE shall appoint BANK ONE,
INDIANAPOLIS, N.A. to act as exchange agent in respect of the Merger
(said bank, in its capacity as such exchange agent, being hereinafter
called the "Exchange Agent").
(b) Promptly following the Effective Time, BANC ONE shall provide to
Exchange Agent shares of BANC ONE Common and funds necessary to pay
for the shares of MID STATES Common pursuant to Section 2.
(c) As soon as practicable after the Effective Time, and subject to the
provisions of Section 2 relating to fractional shares, BANC ONE, or
BANK ONE, INDIANAPOLIS, N.A., as Exchange Agent for BANC ONE, will
distribute to the former holders of MID STATES Common, in exchange for
and upon surrender for cancellation by such holders of a certificate
or certificates formerly representing shares of MID STATES Common, the
certificate(s) for shares of BANC ONE Common in accordance with the
Common Exchange Rate. Each certificate formerly representing MID
STATES Common (other than certificates representing shares of MID
STATES Common subject to the rights of dissenting shareholders) shall
be deemed for all purposes to evidence the ownership of the number of
shares of BANC ONE Common and cash for fractional shares into which
such shares have been converted, except, however, and notwithstanding
the foregoing, that, until such surrender of the certificate or
certificates formerly representing shares of MID STATES Common, the
holder thereof shall not be entitled to receive any dividend or other
payment or distribution payable to holders of BANC ONE Common. Upon
such surrender (or in lieu of surrender other provisions reasonably
satisfactory to BANC ONE as are made as set forth in the next
following paragraph), there shall be paid to the person entitled
thereto the aggregate amount of dividends or other payments or
distributions (in each case without interest) which became payable
after the Effective Time on the whole shares of BANC ONE Common
represented by the certificates issued upon such surrender and
exchange or in accordance with such other provisions, as the case may
be. After the Effective Time, the holders of certificates formerly
representing shares of MID STATES Common shall cease to have rights
with respect to such shares (except such rights, if any, as they may
have as dissenting shareholders), and except as aforesaid, their sole
rights shall be to exchange said certificates for shares of BANC ONE
Common and cash for fractional shares in accordance with this Merger
Agreement.
Certificates representing shares of MID STATES Common surrendered for
cancellation by each shareholder entitled to exchange shares of MID
STATES Common for shares of BANC ONE Common by reason of the Merger
shall be appropriately endorsed or accompanied by such appropriate
instruments of transfer as BANC ONE may reasonably require; provided,
however, that if there be delivered to BANC ONE by any person who is
unable to produce any such certificate formerly representing shares of
MID STATES Common for transfer (i) evidence to the reasonable
satisfaction of BANC ONE that any such certificate has been lost,
wrongfully taken or destroyed, (ii) such security or indemnity as
reasonably may be requested by BANC ONE to save it harmless, and (iii)
evidence to the reasonable satisfaction of BANC ONE that such person
is the owner of the shares theretofore represented by each certificate
claimed by him or her to be lost, wrongfully taken or destroyed and
that he or she is the person who would be entitled to present each
such certificate and to receive shares of BANC ONE Common pursuant to
this Merger Agreement, then BANC ONE, in the absence of actual notice
to it that any shares theretofore represented by any such certificate
have been acquired by a bona fide purchaser, shall deliver to such
person the certificate(s) representing shares of BANC ONE Common which
such person would have been entitled to receive upon surrender of each
such lost, wrongfully taken or destroyed certificate of MID STATES
Common.
EXHIBIT C
(FORM OF UNDERTAKING BY AFFILIATES)
UNDERTAKING OF AFFILIATE
, 199
In consideration and anticipation of the receipt by the undersigned of Common
Stock of BANC ONE CORPORATION ("BANC ONE") upon consummation of a proposed
merger (the "Merger") of MID STATES BANCSHARES, INC. ("MID STATES") and BANC
ONE ILLINOIS CORPORATION, a subsidiary of BANC ONE, pursuant to the terms of a
certain Agreement and Plan of Merger dated , 1993, (the
"Merger Agreement"), and in view of the fact that the undersigned has, pursuant
to the Merger Agreement, been identified as a possible "affiliate" of MID
STATES within the meaning of Rules 144 and 145 ("Rule 144" and "Rule 145,"
respectively), as amended, of the General Rules and Regulations under the
Securities Act of 1933, as amended (the "1933 Act"), the undersigned (the
"Affiliate") represents and undertakes as follows:
The Affiliate shall not offer, sell or otherwise dispose of or transfer any of
the shares of the Common Stock of BANC ONE to be received by him upon
consummation of the Merger (the "Shares"), except the Affiliate may offer, sell
or transfer the Shares (1) in a manner and to the extent permitted by the
applicable provisions of Rule 145, (2) pursuant to an effective registration
statement relating to the Shares under the 1933 Act, or (3) in a transaction
which, in the opinion of counsel for the Affiliate or as described in a
"no-action" or interpretive letter from the staff of the Securities and
Exchange Commission, in each case reasonably satisfactory in form and substance
to BANC ONE, is exempt from the registration requirements of the 1933 Act.
BANC ONE's transfer agents may be given appropriate instructions prohibiting
transfer of the Shares unless these provisions are complied with and the
certificate(s) for the Shares may bear a restrictive legend in substantially
the following form:
The shares represented by this certificate have been issued to the
registered holder as a result of a transaction to which Rule 145 under the
Securities Act of 1933, as amended (the "1933 Act") applies. The shares
represented by this certificate may not be sold, transferred or assigned,
and the issuer shall not be required to give effect to any attempted sale,
transfer or assignment, except pursuant to (i) a registration statement
then in effect under the 1933 Act, (ii) a transaction permitted by Rule 145
as to which the issuer has received evidence of compliance with the
provisions of said Rule 145 reasonably satisfactory to it or (iii) a
transaction which, in the opinion of counsel for the Affiliate or as
described in a 'no action' or interpretive letter from the staff of the
Securities and Exchange Commission, in each case reasonably satisfactory in
form and substance to the issuer, is exempt from the registration
requirements of the 1933 Act. The restrictions of this paragraph shall
become null and void and this paragraph shall have no effect on and after
.
The undersigned undertakes to take such action as shall be necessary to cause
the Shares to be received by the undersigned to be registered in a manner that
will allow for the placement of a restrictive legend on the certificate(s)
representing such Shares.
The undersigned further undertakes that, if it is necessary in order to
preserve pooling-of-interests accounting treatment, none of the Shares to be
received by the undersigned, directly or indirectly, will be sold or otherwise
disposed of during a period of time beginning with the effective date of the
Merger and ending with a date upon which financial results of at least 30 days
of post-merger combined operations have been first published by BANC ONE in
accordance with SEC Accounting Series Release No. 130 as amended by Release No.
135, provided that BANC ONE hereby agrees that such financial results will be
published not later than four months from the Merger.
I hereby acknowledge that pursuant to the provisions of Rules 144 and 145
certain other persons or entities related to me are, or may be, subject to the
foregoing restrictions on the resale of BANC ONE Common Stock received by them
pursuant to the Merger, which persons include (i) any of my relatives or my
spouse, or any relative of my spouse, who has the same home as me; (ii) any
trust or estate in which I or any of the persons specified in the preceding
clause collectively own ten percent (10%) or more of the total beneficial
interest, or of which I or any of such persons serve as trustee, executor, or
in any similar capacity; and (iii) any corporation or other organization (other
than BANC ONE) in which I or any of the persons specified above are the
beneficial owners, collectively, of ten percent (10%) or more of the equity
interest therein. I hereby further acknowledge that I have advised any and all
of such persons that they are, or may be, subject to the provisions of said
Rules 144 and 145, and I hereby represent that I will use my best efforts to
ensure that such persons comply with the provisions of this letter and Rules
144 and 145, as applicable, upon the resale of any Common Stock of BANC ONE.
IN WITNESS WHEREOF, the Affiliate has made this undertaking as of the day and
year first above written.
(OPINION OF COUNSEL FOR MID STATES) EXHIBIT D
, 199
BANC ONE CORPORATION
100 East Broad Street
Columbus, Ohio 43271
Gentlemen:
We are special counsel to MID STATE BANCSHARES, INC., a Delaware corporation
and a registered bank holding company ("MID STATES"), and have acted as counsel
for MID STATES in connection with the merger (the "Merger") of MID STATES with
and into BANC ONE ILLINOIS CORPORATION ("BANC ONE ILLINOIS"), an Illinois
corporation and a wholly-owned subsidiary of BANC ONE CORPORATION ("BANC ONE"),
pursuant to which each of the issued and outstanding shares of MID STATES's
Common Stock will be converted into shares of BANC ONE Common Stock. The
Merger is to be consummated pursuant to the terms of an Agreement and Plan of
Merger dated , 1993 ("Merger Agreement"), between BANC ONE
ILLINOIS and MID STATES and joined in by BANC ONE. This opinion is furnished
to you pursuant to Section 18(d) of the Merger Agreement.
Except as otherwise indicated herein, capitalized terms used in this Opinion
Letter are defined in the Merger Agreement or the Legal Opinion Accord (the
"Accord") of the ABA Section of Business Law (1991), respectively. In the
event of any inconsistency between the definition of any such term in the
Merger Agreement and the Accord, the definition set forth in the Accord shall
govern.
This Opinion Letter is governed by, and is to be interpreted in accordance
with, the Accord. As a consequence, it is subject to a number of
qualifications, exceptions, definitions, limitations on coverage, and other
limitations, all as more particularly described in the Accord, and this Opinion
Letter should be read in conjunction therewith.
The law covered by the opinions expressed herein is limited solely to the laws
of the States of Illinois and Delaware and the Federal Law of the United States
generally.
Based upon and subject to the foregoing, we are of the opinion that:
1. The Merger Agreement is enforceable against MID STATES.
2. Except as set forth in the MID STATES Disclosure Letter, the execution and
delivery by MID STATES of, and the performance by MID STATES of its
agreements in, the Merger Agreement do not (a) violate the Constituent
Documents of MID STATES; (b) violate applicable provisions of statutory law
or regulation; (c) breach or otherwise violate any existing obligation of
MID STATES under any Court Orders of which we have knowledge; or (d)
breach, or result in a default under, any obligation of MID STATES under an
Other Agreement of which we have actual knowledge.
The General Qualifications apply to each of the opinions set forth above.
We are rendering this opinion solely for the benefit of BANC ONE and BANC ONE
ILLINOIS in connection with the transactions described in the Merger
Agreement. It may not be relied upon by any other person or for any other
person, or quoted or filed with any regulatory agency without our prior
approval.
Very truly yours,
EXHIBIT E
(OPINION OF COUNSEL FOR BANC ONE CORPORATION AND
BANC ONE ILLINOIS CORPORATION)
, 199
Mid States Bancshares, Inc.
506 15th Street
Molene, Illinois 61265-2184
Attention: Chairman
Gentlemen:
I am counsel for BANC ONE CORPORATION, an Ohio corporation and a registered
bank holding company ("BANC ONE") and BANC ONE ILLINOIS CORPORATION ("BANC ONE
ILLINOIS"), an Illinois corporation, a registered bank holding company and
wholly owned subsidiary of BANC ONE, and have acted as counsel for BANC ONE and
BANC ONE ILLINOIS in connection with the merger (the "Merger") of MID STATES
BANCSHARES, INC. ("MID STATES") and BANC ONE ILLINOIS pursuant to which each of
the issued and outstanding shares of MID STATES Common will be converted into
shares of BANC ONE Common. Such Merger is to be consummated pursuant to the
terms of an Agreement and Plan of Merger dated , 1993 ("Merger
Agreement") between MID STATES, BANC ONE ILLINOIS and joined in by BANC ONE.
This opinion is furnished to you pursuant to Section 19(c) of the Merger
Agreement.
Except as otherwise indicated herein, capitalized terms used in this Opinion
Letter are defined in the Merger Agreement or the Legal Opinion Accord (the
"Accord") of the ABA Section of Business Law (1991), respectively. In the
event of any inconsistency between the definition of any such term in the
Merger Agreement and the Accord, the definition set forth in the Accord shall
govern.
This Opinion Letter is governed by, and is to be interpreted in accordance
with, the Accord. As a consequence, it is subject to a number of
qualifications, exceptions, definitions, limitations on coverage, and other
limitations, all as more particularly described in the Accord, and this Opinion
Letter should be read in conjunction therewith.
The law covered by the opinions expressed herein is limited solely to the laws
of the State of Ohio, except as it relates to the status of BANC ONE ILLINOIS
under Illinoislaw, and the Federal Law of the United States generally.
Based upon and subject to the foregoing, I am of the opinion that:
1. The Merger Agreement is enforceable against BANC ONE.
2. The Merger Agreement is enforceable against BANC ONE ILLINOIS.
3. Except as set forth in the BANC ONE Disclosure Letter, the execution and
delivery by BANC ONE and BANC ONE ILLINOIS of, and the performance by BANC
ONE and BANC ONE ILLINOIS of their agreements in, the Merger Agreement do
not (a) violate the Constituent Documents of BANC ONE and BANC ONE
ILLINOIS; (b) violate applicable provisions of statutory law or regulation;
(c) breach or otherwise violate any existing obligation of BANC ONE and
BANC ONE ILLINOIS under any Court Orders of which I am aware; or (d)
breach, or result in a default under, any obligation of BANC ONE or BANC
ONE ILLINOIS under an Other Agreement of which I am aware.
I hereby confirm to you, pursuant to the requirements of Section 13(e) of the
Merger Agreement, that there are no actions or proceedings against BANC ONE or
any of its subsidiaries, pending or overtly threatened in writing, before any
court, governmental agency or arbitrator which (i) seek to affect the
enforceability of the Merger Agreement or (ii) come within the objective
standard established in the Merger Agreement for disclosure, except as set
forth in the BANC ONE Disclosure Letter.
I have participated in the preparation of the Registration Statement on Form
S-4 or other appropriate registration statement form (No. ) of BANC
ONE ("Registration Statement"), and in rendering this opinion have limited my
review of the facts concerning the Registration Statement to discussions with
and inquiry of Directors, officers and employees of BANC ONE, and Coopers &
Lybrand, the independent accountants who examined certain of the financial
statements of BANC ONE included in the Registration Statement, and based
thereon and subject to the General Qualifications, I am of the opinion that
such Registration Statement, and the Prospectus included in the Registration
Statement (except as to financial statements, other financial data and any
information concerning MID STATES included therein, as to which I express no
opinion) at the time the Registration Statement became effective under the
Securities Act of 1933 (the "1933 Act") complied as to form in all material
respects with the 1933 Act and the rules and regulations of the Securities and
Exchange Commission thereunder.
I confirm that the Registration Statement has become effective under the 1933
Act, and to the best of my Actual Knowledge, no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or contemplated under the
1933 Act.
I have not checked the accuracy or completeness of, or otherwise verified, any
statement of fact contained in the Registration Statement and Prospectus.
Based on the participations, discussions and inquiries described above,
however, I have no reason to believe that the Registration Statement (except as
to financial statements, other financial data and any information concerning
MID STATES included therein, as to which no view is expressed) at the time it
became effective and as of the date of this letter contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading, or that the Prospectus (except as to financial statements, other
financial data and any information concerning MID STATES included therein, as
to which no view is expressed) at such times contained any untrue statement of
a material fact or omitted to state a material fact necessary in order to make
the statements therein, in the light of the circumstances under which they were
made, not misleading or that since the effective date of the Registration
Statement, any event has occurred which should have been set forth in an
amendment or supplement to the Registration Statement or the Prospectus which
has not been set forth in such an amendment or supplement.
The General Qualifications apply to all of the opinions set forth above.
I am rendering this opinion solely for the benefit of MID STATES in connection
with the transactions described in the Merger Agreement. It may not be relied
upon by any other person or for any other person.
Very truly yours,
FIRST AGREEMENT AMENDING
AGREEMENT and PLAN OF MERGER
This First Agreement Amending the Agreement and Plan of Merger between Mid
States Bancshares, Inc. (hereinafter called "MID STATES") and Banc One Illinois
Corporation (hereinafter called "BANC ONE ILLINOIS") and joined in by BANC ONE
CORPORATION (hereinafter called "BANC ONE") is dated as of February 22, 1994.
W I T N E S S E T H
WHEREAS, the parties hereto have entered into an Agreement and Plan of
Merger dated as of May 25, 1993 (hereinafter, the "Merger Agreement") providing
for the merger of MID STATES into BANC ONE ILLINOIS and the exchange of shares
of BANC ONE Common Stock for the shares of MID STATES Common Stock;
WHEREAS, the MID STATES shareholders meeting has been postponed because the
Board of Directors of MID STATES determined not to exercise the "walk-away"
right provided in Section 7(c) of the Merger Agreement and chose to proceed in
good faith in an attempt to consummate the Merger by undertaking a
resolicitation of the MID STATES' shareholders regarding the Merger, during
which resolicitation the Board of Directors of MID STATES will inform the
shareholders that the Board intends to waive the "walk-away" right and proceed
with the Merger provided MID STATES is able to obtain fairness opinions
described below and the MID STATES' shareholders approve the Merger on that
basis;
WHEREAS, MID STATES and BANC ONE have agreed to amend the Registration
Statement on Form S-4 registering the BANC ONE Common Stock to be issued to the
shareholders of MID STATES; and
WHEREAS, the parties have agreed to modify the Merger Agreement to amend
matters related to the registration period, the Valuation Period, the MID
STATES shareholder meeting, the Closing date and the payment of certain
expenses incurred between January 25, 1994 and the effective date of the Merger
of MID STATES and BANC ONE ILLINOIS or the termination of the Merger Agreement,
as the case may be.
STATEMENT OF AMENDMENT
NOW THEREFORE, the parties hereby agree that the Merger Agreement shall be and
is hereby amended to read as follows:
A. The last sentence of Section 7(c) of the Merger Agreement is amended to
read in its entirety as follows:
The term "Valuation Period" shall mean January 11, 1994 through
January 24, 1994.
B. Section 10(a) of the Merger Agreement is amended to read in its entirety
as follows:
(a) This Merger Agreement and the Plan of Merger shall be submitted to
the shareholders of MID STATES for approval at a meeting to be
called and held in accordance with applicable law and the
Certificate of Incorporation and By-Laws of MID STATES. Such
shareholders' meeting will be scheduled to be held approximately 30
days following the later of the mailing by MID STATES of (i) a proxy
statement to its shareholders promptly following the effective date
of the registration statement (the "Registration Statement") to be
filed by BANC ONE with the Securities and Exchange Commission (the
"SEC") as provided in Section 10(d) or (ii) a second Proxy Statement
following the effective date of any post-effective amendment to the
Registration Statement filed after January 25, 1994 (the "Second
Proxy Statement"). MID STATES and BANC ONE will cooperate with each
other in order to facilitate the preparation, filing and clearance
of the registration statement and the proxy statement under Federal
and State securities laws to be used with respect to such
shareholders' meeting and the exchange of shares as contemplated by
this Merger Agreement.
C. Section 10(c) of the Merger Agreement is amended to read in its entirety
as follows:
(c) After receipt of the Board's prior approval of BANC ONE's and BANC
ONE ILLINOIS' acquisition of MID STATES, after approval of the
acquisition by the Illinois Commissioner, and after the approval of
the shareholders of MID STATES, as provided in Section 10(a), BANC
ONE shall designate the date as of which BANC ONE desires the Merger
to become effective and the Effective Time shall occur at the time
and on the date so designated, subject to Section 25 of this Merger
Agreement. The date designated by BANC ONE as the Effective Date
shall be a date as soon as practicable after receipt of the
approvals noted above in this Section 10(c); provided, however, that
in no event will the date designated by BANC ONE as the Effective
Time be sooner than the day of the MID STATES shareholders meeting,
nor will the date designated by BANC ONE as the Effective Time be
later than 31 days following the MID STATES shareholders meeting.
D. Section 10(e) of the Merger Agreement is amended to read in its entirety
as follows:
(e) BANC ONE and/or BANC ONE ILLINOIS will assume and pay all expenses
incident to the obtaining of the requisite regulatory consents and
approvals. Without limiting the generality of the foregoing, the
expenses to be assumed and paid by BANC ONE shall include (i) all
legal and other expenses and taxes incurred by BANC ONE incident to
the consummation of the Merger contemplated by this Merger
Agreement, (ii) all legal and other expenses incurred by BANC ONE
incident to the preparation and filing of the applications to the
Board, the Illinois Commissioner, and other requests for regulatory
consents and approvals with the appropriate bank regulatory agencies
as set forth in or contemplated by this Merger Agreement, and (iii)
all legal and other expenses, if any, incurred in connection with
the registration of BANC ONE Common under the Federal and State
securities laws. Except as noted below, the expenses to be assumed
and paid by BANC ONE and/or BANC ONE ILLINOIS shall not include any
legal or other expenses incurred by MID STATES in the negotiation of
the Merger, the examination or review of documents for its own
benefit, in connection with its own corporate proceedings or to any
investment banker or advisor for services rendered on its behalf.
BANC ONE will pay the expenses of reproducing any proxy statement
mailed to MID STATES' shareholders, including any printing costs
associated with the mailing of the Second Proxy Statement. Prior to
January 25, 1994, MID STATES shall be responsible for its legal and
accounting fees incurred with any proxy statement mailed to its
shareholders, including the expenses and fees to Donaldson, Lufkin
and Jenrette Securities Corporation ("DLJ") with respect to any
opinion expressed with respect to the fairness of the Merger from a
financial point of view and/or the Exchange Rate to the holders of
MID STATES Common (the "DLJ Fairness Opinion"). From January 25,
1994 through the earlier of the closing or termination of this
Merger Agreement, whether or not the Merger is consummated, BANC ONE
and MID STATES shall each be responsible for one-half of the legal
and accounting fees incurred by MID STATES in connection with the
transactions contemplated by this Agreement, the closing and Second
Proxy Statement, the expenses and fees to DLJ with respect to any
DLJ Fairness Opinion issued after January 25, 1994 and the expenses
and fees to The Chicago Corporation ("TCC") with respect to any
opinion expressed with respect to the fairness of the Merger from a
financial point of view and/or the Exchange Rate to the holders of
MID STATES Common (the "TCC Fairness Opinion"). Any fees and
expenses assumed and paid by BANC ONE and/or BANC ONE ILLINOIS
pursuant to this Section 10(e), whether directly or indirectly
incurred, shall not reduce or otherwise effect the Exchange Rate.
E. Subsection (x) of Section 15(h) of the Merger Agreement is amended to
read in its entirety as follows:
(x) entered into any other material transaction (other than in the
ordinary course of business) except as expressly contemplated by
this Merger Agreement and including a contract with TCC regarding
the issuance of the TCC Fairness Opinion.
F. Section 15(l) of the Merger Agreement is amended to read in its entirety
as follows:
MID STATES has not incurred and will not incur any liability for
brokerage, finders', agents', or investment bankers' fees or
commissions in connection with this Merger Agreement or the
transactions contemplated hereby except for fees to DLJ to be
determined in accordance with the terms of that certain engagement
letter dated November 6, 1992 annexed as an exhibit to the MID
STATES Disclosure Letter and any fees to DLJ and TCC after January
25, 1994 for the issuance of a second DLJ Fairness Opinion and a TCC
Fairness Opinion.
G. Section 19(f) of the Merger Agreement is amended to read in its entirety
as follows:
MID STATES shall have received opinions from DLJ and TCC dated as of
a date not later than the date of the Second Proxy Statement, to the
effect that, in the opinion of such firms, the financial
consideration to be received as a result of the Merger is fair from
a financial point of view to the holders of MID STATES Common and
such opinions shall not have been withdrawn prior to the Effective
Time.
H. Section 20(b) of the Merger Agreement is amended to read in its entirety
as follows:
The registration statement, including any post-effective amendment
required to be filed by BANC ONE pursuant to Section 10(d) of this
Merger Agreement, shall have become effective by an order of the
SEC, the shares of BANC ONE Common to be exchanged in the Merger
shall have been qualified or exempted under all applicable state
securities laws, and there shall have been no stop order issued or
threatened by the SEC that suspends or would suspend the
effectiveness of the registration statement, and no proceeding by
the SEC shall have been commenced, pending or overtly threatened for
such purpose and the BANC ONE Common to be issued in the Merger will
be authorized for trading on the NYSE.
I. The first paragraph of Section 25(e) of the Merger Agreement is amended
to read in its entirety as follows:
MID STATES, by action of its Board of Directors, may elect to
terminate this Merger Agreement, whether before or after approval of
the Merger by the shareholders of MID STATES, by giving three (3)
days written notice of such election to BANC ONE at any time after
the date of this Amendment. Such election shall be based on the MID
STATES' Board of Directors conclusion that the termination of the
Merger is in the best interests of MID STATES because of (a) an
inability to obtain fairness opinions or any other cause that
precludes the timely holding of the MID STATES' shareholders'
meeting necessary to approve the Merger or (b) the reasonable
probability that any other condition to MID STATES' obligation to
consummate the Merger cannot be timely satisfied.
J. The last sentence of Section 25(g) of the Merger Agreement is amended to
read in its entirety as follows:
If the Merger is not consummated as the result of termination of
this Merger Agreement caused otherwise than by willful breach of a
party hereto, BANC ONE, BANC ONE ILLINOIS and MID STATES each shall
pay its own fees and expenses incident to the negotiation,
preparation and execution of this Merger Agreement, the respective
shareholders' meetings and actions of the parties and all other acts
incidental to, contemplated by or in pursuance of the transactions
contemplated by this Merger Agreement, including fees and expenses
of their respective counsel, accountants and other experts and
advisors, except as noted in Section 10(e).
Except as amended by this Agreement, the Merger Agreement and the exhibits
thereto remain in full force and effect without alteration or change.
IN WITNESS WHEREOF, the parties hereto have set their hands on the date and in
the year first above written.
BANC ONE CORPORATION
ATTEST:
By: ROMAN J. GERBER
CHARLES F. ANDREWS Roman J. Gerber
Charles F. Andrews Executive Vice President
Assistant Secretary
MID STATES BANCSHARES, INC.
ATTEST:
By: THOMAS H. ROBINSON
G. H. CLAUSEN Thomas H. Robinson
Secretary President and Chief Executive
Officer
BANC ONE ILLINOIS CORPORATION
ATTEST:
THOMAS H. CARTWRIGHT By: WILLARD BUNN III
Secretary Willard Bunn III
Chairman
SECOND AGREEMENT AMENDING
AGREEMENT and PLAN OF MERGER
This Second Agreement Amending the Agreement and Plan of Merger between Mid
States Bancshares, Inc. (hereinafter called "MID STATES") and Banc One Illinois
Corporation (hereinafter called "BANC ONE ILLINOIS") and joined in by BANC ONE
CORPORATION (hereinafter called "BANC ONE") is dated as of March 25, 1994.
W I T N E S S E T H
WHEREAS, the parties hereto have entered into an Agreement and Plan of
Merger dated as of May 25, 1993 as amended by a First Agreement Amending
Agreement and Plan of Merger dated as of February 22, 1994 (hereinafter, the
"Merger Agreement") providing for the merger of MID STATES into BANC ONE
ILLINOIS and the exchange of shares of BANC ONE Common Stock for the shares of
MID STATES Common Stock;
WHEREAS, the parties have agreed to modify the Merger Agreement to amend
matters related to the total number of shares of BANC ONE CORPORATION Common
Stock to be exchanged for all of the shares of MID STATES Common Stock, the
number of shares of BANC ONE CORPORATION Common Stock into which each shares of
MID STATES Common Stock will be exchanged, and extend the date after which MID
STATES or BANC ONE may terminate the Merger Agreement if the transaction has
not then been consummated.
STATEMENT OF AMENDMENT
NOW THEREFORE, the parties hereby agree that the Merger Agreement shall be and
is hereby amended to read as follows:
A. The last sentence of the fourth paragraph following WITNESSETH is amended to
read in its entirety as follows:
Except as may be required upon application of Section 7(e) of this
Merger Agreement, BANC ONE will issue not more than 908,822 shares of
BANC ONE Common in connection with the transactions contemplated by
this Merger Agreement.
B. Section 7(a)(i) of the Merger Agreement is amended to read in its entirety
as follows:
(i) Each of the not more than 311,560 shares of MID STATES Common that
shall be issued and outstanding immediately prior to the Effective
Time (excluding any shares held by MID STATES as treasury shares)
shall thereupon and without further action be converted into 2.917
shares of BANC ONE Common, subject, however, to (A) the anti-dilution
provisions of Sections 7(e) of this Merger Agreement and (B)
provisions set forth in Section 7(c) herein relative to fractional
shares (the "Exchange Rate").
C. Section 7(e) of the Merger Agreement is amended to read in its entirety as
follows:
(e) Except for the 5 for 4 share stock split paid on BANC ONE Common on
August 31, 1993 and the 10% stock dividend paid on BANC ONE Common
Stock on March 4, 1994, both of which distributions have been taken
into account herein, if prior to the Effective Time BANC ONE or MID
STATES shall (i) declare a stock dividend upon or subdivide, split up,
reclassify or combine its shares of common stock; or (ii) declare a
dividend or make a distribution on its common stock in any security
convertible into its common stock, appropriate adjustment or
adjustments will be made in the Exchange Rate.
D. Section 25(b)(iii) of the Merger Agreement is amended to read in its
entirety as follows:
(iii) If the Merger shall not have been consummated on or before July 1,
1994.
E. Section 2(a)(i) of Exhibit B to the Merger Agreement is amended to read in
its entirety as follows:
(i) Each of the not more than 311,560 shares of MID STATES Common that
shall be issued and outstanding immediately prior to the Effective
Time (excluding any shares held by MID STATES as treasury shares)
shall thereupon and without further action be converted into 2.917
shares of BANC ONE Common, subject, however, to (A) the anti-dilution
provisions of Section 2(d) of this Merger Agreement and (B) provisions
hereinafter contained relative to fractional shares (the "Exchange
Rate").
F. The last sentence of Section 2(c) of Exhibit B to the Merger Agreement is
amended to read in its entirety as follows:
The term "Valuation Period" shall mean January 11, 1994 through
January 24, 1994.
G. Section 2(d) of Exhibit B to the Merger Agreement is amended to read in its
entirety as follows:
(d) If prior to the Effective Time, (i) MID STATES shall declare a stock
dividend or distribution upon or subdivide, split up, reclassify or
combine MID STATES Common or declare a dividend or make a distribution
on MID STATES Common in any security convertible into MID STATES
Common, or (ii) except for the 5 for 4 share stock split paid on BANC
ONE Common on August 31, 1993 and the 10% stock dividend paid on BANC
ONE Common Stock on March 4, 1994, both of which distributions have
been taken into account herein, BANC ONE shall declare a stock
dividend or distribution upon or subdivide, split up, reclassify or
combine BANC ONE Common or declare a dividend or make a distribution
on BANC ONE Common in any security convertible into BANC ONE Common,
appropriate adjustment or adjustments will be made in the Exchange
Rate.
Except as amended by this Agreement, the Merger Agreement and the exhibits
thereto remain in full force and effect without alteration or change.
IN WITNESS WHEREOF, the parties hereto have set their hands on the date and in
the year first above written.
BANC ONE CORPORATION
ATTEST:
By: ROMAN J. GERBER
CHARLES F. ANDREWS Roman J. Gerber
Charles F. Andrews Executive Vice President
Assistant Secretary
MID STATES BANCSHARES, INC.
ATTEST:
GREGORY J. KISTLER By: THOMAS H. ROBINSON
Assistant Secretary Thomas H. Robinson
President and Chief Executive
Officer
BANC ONE ILLINOIS CORPORATION
ATTEST:
THOMAS H. CARTWRIGHT By: WILLARD BUNN III
Secretary Willard Bunn III
Chairman
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
P R O X Y
FOR SPECIAL MEETING OF SHAREHOLDERS OF
MID STATES BANCSHARES, INC.
* * * * * * * * * *
KNOW ALL MEN BY THESE PRESENTS, That I, the undersigned shareholder of Mid
States Bancshares, Inc. ("MID STATES") do hereby nominate, constitute and
appoint Thomas H. Robinson, Daniel Churchill or James T. McLaughlin, or any one
of them (with full power to act alone) my proxy and true and lawful attorney(s)
in fact with full power of substitution, for me and in my name, place and stead
to vote all Common Stock of MID STATES standing in my name, on its books at the
close of business on at the special meeting of its
shareholders to be held at 501 15th Street, Moline, Illinois on
at 10:00 a.m., local time, or at any adjournment thereof, with all the powers
the undersigned would possess if personally present, as follows:
1. Proposal to approve and adopt an Agreement and Plan of Merger dated May 25,
1993, as amended on February 22, 1994 and March 25, 1994, by and between
MID STATES and Banc One Illinois Corporation ("Banc One Illinois") and
joined in by BANC ONE CORPORATION ("BANC ONE") and providing for the merger
of MID STATES with and into Banc One Illinois, as subsidiary of BANC ONE,
pursuant to which each share of MID STATES Common Stock (other than shares
of MID STATES Common Stock owned by a MID STATES shareholder who properly
demands and preserves dissenters' rights) will be converted into shares of
BANC ONE Common Stock at a rate of 2.917 shares of BANC ONE Common Stock
for each share of MID STATES Common Stock.
FOR AGAINST ABSTAIN
2. In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting or any adjournment thereof.
The Board of Directors knows of no other business to be brought before the
meeting.
IF NO DIRECTION IS MADE, THIS PROXY WILL BE VOTED FOR PROPOSAL 1 AND ACCORDING
TO THE BEST JUDGMENT OF THE PROXIES WITH REGARD TO PROPOSAL 2.
THIS PROXY MAY BE REVOKED BY A SUBSEQUENTLY DATED PROXY OR WRITTEN NOTICE TO
THE BOARD OF DIRECTORS OR PERSONAL BALLOT AT THE MEETING.
Please sign exactly as name appears on MID STATES records. When shares are
held by joint tenants, both must sign. When signing as attorney-in-fact,
executor, administrator, trustee, committee, personal representative or
guardian, please give full title as such. If a corporation, please sign in
full corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized person.
Dated: Dated:
Signature Signature if held jointly
(Please print name) (Please print name)
PLEASE MARK, SIGN, DATE AND RETURN THE PROXY USING THE ENCLOSED ENVELOPE
April 21, 1994
BANC ONE CORPORATION
100 East Broad Street
Columbus, Ohio 43215
Re: BANC ONE CORPORATION Registration Statement on Form S-4 (Mid States
Bancshares, Inc.) -- Registration No. 33-51219
Gentlemen:
I have acted as counsel to BANC ONE CORPORATION ("BANC ONE") in connection with
the Registration Statement on Form S-4 to be filed by BANC ONE with the
Securities and Exchange Commission under the Securities Act of 1933, as
amended. The Registration Statement relates to the issuance of up to 908,822
shares of common stock, no par value, of BANC ONE (the "Shares") to the
shareholders of Mid States Bancshares, Inc. ("MID STATES") in connection with
the merger (the "Merger") of MID STATES with and into Banc One Illinois
Corporation ("Bank One Illinois"), a wholly owned subsidiary of BANC ONE,
pursuant to the terms of a Merger Agreement dated May 25, 1993, as amended on
February 22, 1994 and March 25, 1994, by and among MID STATES, BANC ONE and
Banc One Illinois (the "Merger Agreement").
In this connection, I have examined such corporate records and other documents
and certificates of public officials as I have deemed necessary in order to
render the opinion set forth below.
Based upon the foregoing, it is my opinion that upon the satisfaction of
certain conditions provided for in the Merger Agreement, the Shares, when
issued and delivered pursuant to the provisions of the Merger Agreement and
upon consummation of the Merger, will be validly issued, fully paid and
non-assessable.
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
ROMAN J. GERBER
Roman J. Gerber
General Counsel
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
222 North LaSalle Street
Chicago, Illinois 60601-1003
312/609-7500
Vedder, Price, Kaufman, Kammholz & Day
805 Third Avenue
New York, New York 10022-2203
212/407-7700
Vedder, Price, Kaufman & Kammholz
4615 East State Street
Rockford, Illinois 61108
815/962-9100
Vedder, Price, Kaufman, Kammholz & Day
919 18th Street, N.W., Suite 1001
Washington, D.C. 20006-5593
202/828-5020
April 20, 1994
Board of Directors
Mid States Bancshares, Inc.
501 15th Street
Moline, Illinois 61265
Board of Directors
BANC ONE CORPORATION
100 East Broad Street
Columbus, Ohio 43271
Gentlemen:
In connection with the solicitation of proxies for a special meeting of
shareholders of Mid States Bancshares, Inc., a Delaware corporation ("Mid
States"), at which there will be presented a proposed merger ("Merger")
of Mid States into Banc One Illinois Corporation,
an Illinois corporation ("BOIC") and wholly-owned subsidiary of BANC ONE
CORPORATION, an Ohio Corporation ("Banc One"), you have requested our opinion
with respect to certain federal income tax consequences of the Merger.
The Merger contemplates the acquisition by BOIC of all the assets and
liabilities of Mid States in exchange for common stock, with no par
value, of Banc One ("Banc One Common") pursuant to an Agreement and Plan
of Merger, dated as of May 25, 1993, as amended February 22, 1994
and March 28, 1994, entered into by Mid States, BOIC and Banc One
(the "Merger Agreement").
The opinions expressed in this letter are based on the Internal Revenue Code
of 1986, as amended (the "Code"), the Income Tax Regulations promulgated by the
Treasury Department thereunder and judicial authority reported as of the date
hereof. We have also considered the position of the Internal Revenue Service
(the "Service") reflected in published and private rulings. Although we
are not aware of any pending changes to these authorities
that would alter our opinions, there can be no assurance that future
legislative or administrative changes, court decisions or Service
interpretations will not significantly modify the statements or opinions
expressed herein.
We express no opinion herein as to any issue of federal law other than those
specifically considered herein. We also do not express any opinion as to any
issue of state or local law.
For the purposes indicated above, and based upon our review, the conditions
set forth below, and the anticipated receipt by us prior to closing of such
representations as we may request of Mid States, certain shareholders of
Mid States, and Banc One, in such form as we may request, it is our opinion
that:
(1) The merger of Mid States into BOIC, pursuant to the Merger Agreement, will
constitute a reorganization within the meaning of section 368(a)(1)(A) and
section 368(a)(2)(D) of the Code. Mid States, BOIC and Banc One will each
be considered "a party to a reorganization" within the meaning of section
368(b) of the Code for purposes of this reorganization;
(2) No gain or loss will be recognized by Mid States upon the transfer of
its assets and liabilities to BOIC pursuant to the Merger;
(3) No gain or loss will be recognized by BOIC upon the receipt of the
assets and liabilities of Mid States pursuant to the Merger;
(4) The tax basis of the assets of Mid States in the hands of BOIC will be the
same as the tax basis of such assets in the hands of Mid States immediately
prior to the transfer;
(5) The holding period of the assets of Mid States transferred to BOIC will
include the period during which such assets were held by Mid States
prior to the transfer;
(6) No gain or loss will be recognized by the shareholders of Mid States
upon the receipt of Banc One Common in exchange for their shares of Mid
States (disregarding for this purpose any cash received upon
exercise of dissenters' rights or in lieu of the receipt of fractional
shares);
(7) The tax basis of the Banc One Common (including for this purpose any
fractional share interests which shareholders of Mid States will be
deemed to receive and then sell in exchange for cash)
received by the shareholders of
Mid States will be the same as the tax basis of the Mid States shares
exchanged therefor; and
(8) The holding period of the Banc One Common received by the shareholders of
Mid States will include the holding period of the Mid States shares
exchanged therefor, provided that at the time of the exchange
the Mid States shares were held as capital assets.
In rendering this opinion, we have examined the Merger Agreement and such other
documents as we have deemed necessary or appropriate. We have assumed the
genuineness of all signatures, the legal capacity of all natural persons, the
authenticity of all documents submitted to us as originals, the conformity to
original documents of all documents submitted to us as copies, the authenticity
of the originals of such copies, and that the Merger will be
consummated pursuant to Illinois and Delaware law in the manner set forth in
the Merger Agreement. We have also assumed that any written representations
and covenants of Mid States, certain shareholders of Mid States, and
Banc One as we may request in connection with rendering our opinion will be
provided to us by such parties prior to the closing and that such
representations and covenants will be accurate and complete in all respects
as of the time they are provided to us and as of the closing. Any changes
in these facts, or in the accuracy of these assumptions, representations
or covenants, may necessitate reconsideration of our opinion and possibly
result in different conclusions.
Our opinion is limited to those federal income
tax issues specifically considered herein
and is addressed to and is only for the
benefit of Mid States and Banc One. The opinion is
furnished to you pursuant to section 12 of the
Merger Agreement and may not be used or
relied upon for any other purpose and may
not be circulated or otherwise referred to for any
other purpose without our express written consent.
Although the discussion herein is based
upon our best interpretation of existing
sources of law and expresses what we believe a court
would properly conclude if presented with these
issues, no assurance can be given that such
interpretations would be followed if they were
to become the subject of judicial or
administrative proceedings.
We hereby consent to the filing of this opinion as an Exhibit to the
Post-effective Amendment No. 1 to the Registration Statement and to the
use of our name in the Prospectus and Proxy Statement constituting part of
the Registration Statement. In giving such consent, we do not thereby
concede that we are within the category of persons whose consent is
required under section 7 of the Securities Act of 1933, as amended,
or the rules and regulations of the Securities and Exchange Commission
thereunder.
Very truly yours,
VEDDER, PRICE, KAUFMAN & KAMMHOLZ
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
of BANC ONE CORPORATION on Form S-4 of our report which includes an
explanatory paragraph regarding the change in moethod of accounting for
income taxes and post-retirement benefits other than pensions in 1993,
dated February 21, 1994 on our audits of the consolidated financial
statements of BANC ONE CORPORATION as of December 31, 1993 and 1992,
and for the years ended December 31, 1993, 1992, and 1991, included in
BANC ONE CORPORATION's Annual Report on Form 10-K for the year ended
December 31, 1993. We also consent to the reference to our Firm under
the caption "Miscellaneous Information" in said Registration Statement.
COOPERS & LYBRAND
COOPERS & LYBRAND
Columbus, Ohio
April 20, 1994
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Mid States Bancshares, Inc.
We consent to the use of our report incorporated herein by
reference and to the reference to our firm under the heading
"Interests of Named Experts and Counsel" in the prospectus.
MCGLADREY & PULLEN
Moline, Illinois
April 19, 1984
