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Form 10-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(X) ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 1993
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-8552
BANC ONE CORPORATION
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(Exact name of registrant as specified in its charter)
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Ohio 31-0738296
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(State or other jurisdiction of (I.R.S. Employer Identification Number)
incorporation or organization)
100 East Broad Street, Columbus, Ohio 43271
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (614) 248-5944
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Securities registered pursuant to Section 12(b) of the Act:
Title of each class Name of each exchange on which registered
New York Stock Exchange
Common Stock Cincinnati Stock Exchange
without par value Midwest Stock Exchange
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Securities registered pursuant to Section 12(g) of the Act:
Series C Convertible Preferred Stock with no par value
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(Title of Class)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
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Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to
this Form 10-K. [ ]
As of February 25, 1994 the aggregate market value of the common voting stock
held by non-affiliates of the Registrant calculated by reference to the quoted
price of BANC ONE Common Stock as reported on the New York Stock Exchange was
$11,618,788,183. As of February 25, 1994 there were outstanding 346,829,498
shares of BANC ONE CORPORATION Common Stock, no par value, which stock is the
only class of Registrant's common stock. As of February 25, 1994 there were
73,262 common stockholders of record.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of the 1993 Annual Report to Shareholders are incorporated by
reference. Portions of the Definitive Proxy Statement for the BANC ONE
CORPORATION Annual Meeting to be held April 19, 1994 are incorporated by
reference into Part III.
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BANC ONE CORPORATION
1993 FORM 10-K ANNUAL REPORT
TABLE OF CONTENTS
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PART I
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Item 1 Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 2 Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Item 3 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Item 4 Submission of Matters to a Vote of Security Holders . . . . . . . . . . . . . . . . . . . . . . . . 2
PART II
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Item 5 Market for the Registrant's Common Stock and Related Stockholder Matters . . . . . . . . . . . . . . 3
Item 6 Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 7 Management's Discussion and Analysis of Financial Condition and Results of Operations . . . . . . . 3
Item 8 Financial Statements and Supplementary Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Item 9 Changes in and Disagreements with Accountants on Accounting and Financial Disclosure . . . . . . . . 3
PART III
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Item 10 Directors and Executive Officers of the Registrant . . . . . . . . . . . . . . . . . . . . . . . . . 4
Item 11 Executive Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Item 12 Security Ownership of Certain Beneficial Owners and Management . . . . . . . . . . . . . . . . . . . 5
Item 13 Certain Relationships and Related Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
PART IV
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Item 14 Exhibits, Financial Statement Schedules and Reports on Form 8-K - Index
to Financial Statements and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
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PART I
ITEM 1 BUSINESS
BANC ONE CORPORATION ("Registrant" or "BANC ONE") became an Ohio chartered bank
holding company in 1989 and was a Delaware chartered holding company from 1968
to 1989. For a description of the Business of BANC ONE refer to "Corporate
Profile" on the inside front cover of BANC ONE's 1993 Annual Report to
Shareholders "Market Presence by State" and "Other Affiliates" and Note 2,
"Affiliations and Pending Affiliations," on pages 20-21 and 29-30 and 80 of the
1993 Annual Report to Shareholders, which are expressly incorporated herein by
reference.
COMPETITION
Active competition exists in all principal areas in which BANC ONE or one or
more of its subsidiaries is presently engaged, not only with respect to
commercial banks, but also with savings and loan associations, credit unions,
finance companies, mortgage companies, leasing companies, insurance companies,
money market mutual funds and brokerage houses together with other domestic and
foreign financial and non-financial institutions such as General Electric,
General Motors and Ford.
EMPLOYEES
As of December 31, 1993 BANC ONE and its consolidated subsidiaries had
approximately 45,300 full-time equivalent employees.
ITEM 2 PROPERTIES
BANC ONE leases its principal offices in Columbus, Ohio under several long-term
leases expiring at dates ranging from 1994 through 2022. As of December 31,
1993 BANC ONE's affiliate banks had 1,331 banking offices located in Arizona,
California, Colorado, Illinois, Indiana, Kentucky, Michigan, Ohio, Oklahoma,
Texas, Utah, West Virginia and Wisconsin. BANC ONE and its subsidiaries own or
lease various office space, computer centers and warehouses. For additional
information see Note 16, "Leases" on page 44 and Note 6, "Bank Premises and
Equipment," on page 36 of the 1993 Annual Report to Shareholders, which are
expressly incorporated herein by reference.
1
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ITEM 3 LEGAL PROCEEDINGS
In October 1993, a purported class-action lawsuit was filed against
Bank One, Columbus, NA (Columbus), H & R Block, Inc. and other financial
institutions in the United States District Court for the Northern District of
Alabama, Western Division. This lawsuit, among other things, alleges that
Columbus assessed usurious and unconscionable interest rates in connection with
its income tax refund anticipation loan program. This lawsuit is brought on
behalf of a purported class of individuals who, during the past six years, had
their taxes prepared by H & R Block Inc., and received refund anticipation
loans from Columbus or the other unrelated co-defendant financial institutions.
This lawsuit seeks various forms of relief including injunctive relief,
unspecified compensatory and punitive damages and attorneys' fees.
Columbus has denied any liability. Management believes that an
adverse decision in this case would not be material to BANC ONE's consolidated
financial position.
The dismissal of a purported class action lawsuit against Columbus by the Court
of Common Pleas of Philadelphia County, Pennsylvania is on appeal to the
Pennsylvania Superior Court. This case was one of many class action lawsuits
brought against credit card issuing banks challenging whether such banks can
impose various types of fees allowed by the state where they are located on
cardholders residing in other states that allegedly limit or prohibit such
fees. Even if this lawsuit were ultimately decided adversely to Columbus,
management believes that such determination would not be material to BANC ONE's
consolidated financial position. There can be no assurance that bank
affiliates of BANC ONE will not be named as defendants in future similar
lawsuits.
Substantial damages have been awarded by courts against BANC ONE subsidiaries
in two other unrelated cases. In October 1993, the Federal District Court for
the Southern District of New York entered a judgment for approximately $27
million against Bank One, Arizona, NA (formerly Valley National Bank) based
upon alleged violations by Valley National Bank of the Employee Retirement
Income Security Act of 1974. BANC ONE was aware of this case prior to its
acquisition of Valley National Bank. In November 1993, the Probate Court of
Dallas County, Texas entered a judgment of approximately $26 million against
Bank One, Texas, NA (Texas) based on an alleged breach of fiduciary duties
associated with the handling of a personal trust. Those judgments, which are
being appealed, even if upheld will not have a material adverse effect on BANC
ONE's consolidated financial position.
Except as stated above neither BANC ONE nor any of its subsidiaries is involved
in any material legal proceedings outside the normal course of its business.
Similarly, no property owned by any said entities is the subject of any
material legal proceeding.
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
During the fourth quarter 1993 no matters were submitted to a vote by security
holders.
2
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PART II
ITEM 5 MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER
MATTERS
See "Financial Highlights" and "Stock Listing" on page 21, "Consolidated
Quarterly Financial Data" on pages 60 and 61, Notes 10, 11, 12, and 19 on
pages 38, 39 and 48, "Five Year Performance Summary" on page 53 and "Ten Year
Performance Summary" on pages 54 and 55 of the 1993 Annual Report to
Shareholders, which are expressly incorporated herein by reference.
ITEM 6 SELECTED FINANCIAL DATA
See "Five Year Performance Summary" and "Ten Year Performance Summary" on pages
53 through 55 and Note 2 of "Notes to Financial Statements" on pages 29 through
30 of the 1993 Annual Report to Shareholders, which are expressly incorporated
herein by reference.
ITEM 7 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
See "Management's Discussion and Analysis" on pages 63 through 79,
"Five Year Summary-Average Balances, Income and Expense, Yields and Rates" on
pages 56 and 57, "Rate-Volume Analysis" on page 62, "Reserve for Loan and
Lease Losses" on page 58, "Loan and Lease Analysis" on page 59 and
"Consolidated Quarterly Financial Data" on pages 60 and 61 of the 1993 Annual
Report to Shareholders, which are expressly incorporated herein by reference.
ITEM 8 FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
See "Consolidated Financial Statements" on pages 22 through 52, and
"Consolidated Quarterly Financial Data" on pages 60 and 61 of the 1993 Annual
Report to Shareholders, which are expressly incorporated herein by reference.
ITEM 9 CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
Registrant has had no disagreement on accounting and financial disclosure
matters and has not changed accountants during the two year period ending
December 31, 1993.
3
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PART III
ITEM 10 DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
Directors and executive officers of the Registrant include those persons
enumerated under "Election of Directors" and "Directors Fees and Compensation"
in the Definitive Proxy Statement for the BANC ONE CORPORATION Annual Meeting
to be held April 19, 1994, these portions of which are expressly incorporated
herein by reference. Executive officers as of March 1, 1994 are set forth
below. Unless otherwise designated, they are officers of Banc One Corporation:
Others hold the positions indicated in wholly owned subsidiaries.
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Year Joined
Name Age Title Banc One
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Ronald C. Baldwin 47 Chairman/CEO--Banc One Wisconsin Corporation 1982
Joseph D. Barnette, Jr. 54 Chairman/CEO--Banc One Indiana Corporation 1982
William P. Boardman 52 Senior Executive Vice president 1984
Willard Bunn III 50 Chairman/CEO--Banc One Illinois Corporation 1992
Frederick L. Cullen 46 Chief Financial Officer 1981
Roman J. Gerber 61 Executive Vice President 1966
Michael W. Hager 50 Senior Vice President 1983
William R. Hartman 45 Chairman/CEO--Bank One, Lexington, N.A. 1990
Richard D. Headley 45 Chairman/CEO--Banc One Services Corporation 1975
Thomas E. Hoaglin 44 Chairman/CEO--Banc One Ohio Corporation 1973
Julia F. Johnson 43 Senior Vice President 1985
Richard F. Katchuk 47 Senior Vice President 1988
Craig J. Kelly 47 Senior Vice President 1987
James C. LaVelle 54 Senior Vice President and Senior Credit Officer 1978
Richard J. Lehmann 49 Chairman/CEO--Banc One Arizona Corporation 1993
William C. Leiter 54 Senior Vice President and Controller 1981
Richard D. Lodge 46 Senior Vice President 1973
John B. McCoy 50 Chairman/CEO 1967
Donald L. McWhorter 58 President/COO 1983
George R. L. Meiling 51 Treasurer 1977
Harvey R. Mitchell 58 Chairman/CEO--Bank One, Texas, N.A. 1989
Ronald L. Moore 61 Chairman/CEO--Banc One Colorado Corporation 1992
Jeffrey P. Neubert 51 Executive Vice President 1991
Robert A. O'Neill, Jr. 40 Senior Vice President and Chief Auditor 1987
A. Michael Perry 57 Chairman/CEO--Banc One West Virginia
Corporation 1993
Ronald G. Steinhart 53 President/COO--Bank One, Texas, N.A. 1992
Charles W. Sulerzyski 36 President/CEO--Banc One Individual Investor
Services Corporation
Paul F. Walsh 44 Chairman--Banc One Diversified Services
Corporation 1990
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4
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All market transactions in BANC ONE's securities by its Directors and Executive
Officers during 1993 were reported promptly and correctly under the Securities
and Exchange Commission's rules relating to the reporting of securities
transactions by directors and officers, with the exception of the reports noted
in "Certain Reports" in the Definitive Proxy Statement for the BANC ONE
CORPORATION Annual Meeting to be held April 19, 1994, those portions of which
are expressly incorporated herein by reference.
ITEM 11 EXECUTIVE COMPENSATION
See "Election of Directors", "Directors Fees and Compensation" and the
following sections of "Executive Compensation" (Summary Annual Compensation,
1989 Stock Incentive Plan and Retirement Benefits on pages 8-11 and 13-14) in
the Definitive Proxy Statement for the BANC ONE CORPORATION Annual Meeting to
be held April 19, 1994, these portions of which are expressly incorporated
herein by reference.
ITEM 12 SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
See "Election of Directors" and "Ownership of Shares" in the Definitive Proxy
Statement for the BANC ONE CORPORATION Annual Meeting to be held April 19,
1994, these portions of which are expressly incorporated herein by reference.
ITEM 13 CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
See "Transactions with Management and Owners" in the Definitive Proxy Statement
for the BANC ONE CORPORATION Annual Meeting to be held April 19, 1994, this
portion of which is expressly incorporated herein by reference, and Note 20
"Related Party Transactions" included in the 1993 Annual Report to
shareholders, which is expressly incorporated herein by reference.
5
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PART IV
ITEM 14 EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K
INDEX TO FINANCIAL STATEMENTS AND SCHEDULES
BANC ONE CORPORATION and Subsidiaries
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Annual Report
Data incorporated by reference from the to Shareholders
1993 Annual Report to Shareholders: Page
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Financial Highlights and Corporate Profile Inside Front Cover
Report of Independent Accountants 22
Consolidated Balance Sheet, December 31, 1993 and 1992 23
Consolidated Statement of Income for the years ended
December 31, 1993, 1992 and 1991 24
Consolidated Statement of Changes in Stockholders' Equity
for the years ended December 31, 1993, 1992 and 1991 25
Consolidated Statement of Cash Flows for the years ended
December 31, 1993, 1992 and 1991 26
Notes to Consolidated Financial Statements 27 - 52
Additional financial information 53 - 62
Management's Discussion and Analysis 63 - 79
Market Presence by State and Other Affilates 80
</TABLE>
No schedules are included because they are not required, not applicable, or the
required information is contained elsewhere.
Report on Form 8K filed November 9, 1993 announcing the acquisition of Liberty
National Bancorp, Inc., and other pending acquisitions. (June 30, 1993
financial information)
Report on Form 8K filed November 16, 1993 announcing a purported class-action
lawsuit alleging that the Bank assessed usurious and unconscionable interest
rates in connection with its refund anticipation loan progam.
Report on Form 8K filed November 24, 1993 announcing the acquisition of Liberty
National Bancorp, Inc., and other pending acquisitions. (September 30, 1993
financial information)
6
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INDEX TO EXHIBITS
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Exhibit Number
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10 Material Contracts
a. Deferred Compensation Plan for Directors of BANC ONE CORPORATION and BANC ONE Affiliates
b. BANC ONE CORPORATION 1989 Stock Incentive Plan
1. Agreement for Restricted Stock Award under the BANC ONE CORPORATION 1989 Stock Incentive Plan
2. Stock Option Agreement for Non-Qualified Stock Options under the BANC ONE CORPORATION 1989 Stock Incentive
Plan
3. Stock Option agreement for Incentive Stock Options under the BANC ONE CORPORATION 1989 Stock Incentive Plan
c. 1993 Key Management Incentive Compensation Plan
d. BANC ONE CORPORATION's Incentive Compensation Deferral Plan
e. Change in Control Severance Agreement - Affiliated Bankshares of Colorado, Inc.
f. Change in Control Severance Agreement - Marine Corporation of Illinois
g. BANC ONE Supplemental Executive Security Savings Plan
h. BANC ONE CORPORATION Supplemental Employees Retirement Plan, As Amended and Restated Effective January 1, 1993
i. The Valley National Bank of Arizona Supplemental Excess Benefit Retirement Plan
j. American Fletcher Corporation Deferred Compensation Plan
k. Valley National Corporation 401(+)TM Executive Deferred Compensation Plan
11 Statement regarding computation of earnings per common share.
12 Statement regarding computation of ratio of earnings to fixed charges.
13 Portions of BANC ONE's Annual Report to Shareholders for the calendar year ended December 31, 1993.
22 Subsidiaries of Registrant.
24 Consent of Independent Accountants.
</TABLE>
There are no agreements with respect to long-term debt of the Registrant to
authorize securities in an amount which exceeds 10% of the total assets of the
Registrant and its subsidiaries on a consolidated basis. The Registrant agrees
to furnish a copy of any agreement with respect to long-term debt of the
Registrant to the Securities and Exchange Commission upon request.
7
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SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned, thereunto duly authorized.
BANC ONE CORPORATION
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By: John B. McCoy March 9, 1994
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John B. McCoy Date
Chairman
By: Frederick L. Cullen March 9, 1994
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Frederick L. Cullen Date
Chief Financial Officer
By: William C. Leiter March 9, 1994
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William C. Leiter Date
Controller
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Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
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By: Charles E. Exley, Jr. March 9, 1994
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Charles E. Exley, Jr., Director Date
By: E. Gorden Gee March 9, 1994
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E. Gordon Gee, Director Date
By: John R. Hall March 9, 1994
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John R. Hall, Director Date
By: Laban P. Jackson, Jr. March 9, 1994
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Laban P. Jackson, Jr., Director Date
By: John B. McCoy March 9, 1994
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John B. McCoy, Director Date
By: John G. McCoy March 9, 1994
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John G. McCoy, Director Date
By: Rene C. McPherson March 9, 1994
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Rene C. McPherson, Director Date
By: Donald L. McWhorter March 9, 1994
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Donald L. McWhorter, Director Date
By: Thekla R. Shackelford March 9, 1994
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Thekla R. Shackelford, Director Date
By: Alex Shumate March 9, 1994
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Alex Shumate, Director Date
By: Frederick P. Stratton, Jr. March 9, 1994
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Frederick P. Stratton, Jr., Director Date
By: Romeo J. Ventres March 9, 1994
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Romeo J. Ventres, Director Date
By: Robert D. Walter March 9, 1994
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Robert D. Walter, Director Date
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EXHIBIT 10 (a)
DEFERRED COMPENSATION PLAN FOR DIRECTORS
OF
BANC ONE CORPORATION AND BANC ONE AFFILIATES
Effective January 1, 1994
1. PURPOSE OF THE PLAN: The purpose of the Deferred Compensation Plan
for Directors of BANC ONE CORPORATION AND BANC ONE Affiliates (the
"Plan") is to provide a means by which a member of the board of
directors of either BANC ONE CORPORATION or an Affiliate of BANC ONE
CORPORATION may defer the payment of all (but not less than all) of
the fees payable to the Director for services rendered by the
Director.
2. DEFINITIONS: When used herein, the following terms shall have the
following meanings:
(a) "Affiliate" means a subsidiary of or any entity controlled by
BANC ONE CORPORATION.
(b) "Election & Direction and Beneficiary Designation Forms"
means the form attached to the Plan which shall be used by a
director to: (i) defer the payment of Fees in accordance with
the provisions of the Plan and shall also include any prior
forms used in connection with the Plan for the purpose of
deferring payment of Fees; (ii) designate, from time to time,
any person or persons (who may be designated contingently or
successively and who may be an entity other than a natural
person) as the beneficiary or beneficiaries to whom the
Director's Plan benefits are paid if the Director dies before
receiving all such benefits and shall also include any prior
forms used by a Director in connection with the Plan for the
purpose of designating such Director's beneficiaries.
(c) "Board" means the Board of Directors of BANC ONE CORPORATION.
(d) "Change of Control" means any change in control of a nature
that would be required to be reported in response to Item
5(f) of Schedule 14A of Regulation 14A promulgated under the
Securities Exchange Act of 1934, as amended ("Exchange Act");
provided that, without limitation, such a change of control
shall be deemed to have occurred if: (i) any "person" (as
such term is defined in Sections 13(d) and 14(d)(2) of the
Exchange Act) other than the Corporation or an entity then
directly or indirectly controlling, controlled by or under
common control with the Corporation is, becomes or commences
a tender offer to become the beneficial owner, directly or
indirectly, of securities of the Corporation representing 20%
or more of the combined voting power of the Corporation's
then-outstanding securities; (ii) the Corporation merges or
consolidates with another corporation; or (iii) a sale,
lease, exchange, or other disposition of all or substantially
all of the assets of the Corporation takes place.
(e) "Committee" means the employee or employees of the
Corporation or an Affiliate who have been designated by a
committee of at least three members of the Board to supervise
the administration of the Plan by the Corporation.
(f) "Corporation" means BANC ONE CORPORATION.
(g) "Director" means a statutory director, an emeritus director,
or an honorary director of the Corporation or an Affiliate
who is not an officer or employee of the Corporation or an
Affiliate.
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(h) "Fees" means amounts payable by the Corporation or an
Affiliate to a Director fur services rendered by the Director
to the Corporation or Affiliate, including retainer, meeting,
and committee fees.
(i) "Plan Administrator" means the Corporation.
(j) "Share" or "Shares" means the common shares of the
Corporation.
3. ELIGIBILITY: Any person who receives Fees as a Director is eligible to
be a participant in this Plan.
4. ELECTION TO DEFER: A Director may elect, on or before December 31 of
any year, to defer payment of all (but not less than all) of the Fees
earned during the calendar year following such election and all
succeeding calendar years. Any person who becomes a Director during
any calendar year, and who was not a Director on the preceding
December 31, may elect, before such Director's term begins, to defer
payment of all (but not less than all) of the Fees earned by the
Director for the remainder of such calendar year and all succeeding
calendar years. Any such elections shall be made on the Election &
Direction Form which shall be delivered to the Plan Administrator. Any
such elections shall be effective until the earlier of the following
events: (a) the Director terminates his election under section 11 of
this Plan, or (b) the Director ceases to be a Director of the
Corporation.
5. DIRECTORS' DEFERRED ACCOUNTS: Fees deferred at the election of a
Director shall be held in the general funds of the Corporation and
shall be credited to an account established by the Corporation in the
Director's name to which deferrals made in accordance with this Plan
are credited. The Fees deposited in the Director's deferred account
shall earn interest under the Interest Program or, alternatively,
shall be invested in the BANC ONE Stock Program. Each Director who
chooses to participate in this Plan shall elect on the Election &
Direction Form to participate in the Interest Program or the BANC ONE
Stock Program, or both. All deferred fees not specifically designated
by a Director to be credited to the Interest Program shall be credited
to the BANC ONE Stock Program. Effective with the first day of any
next succeeding quarter, any Director may prospectively change the
Director's election to participate in the Interest Program and/or the
BANC ONE Stock Program by delivering a new Election & Direction Form
to the Plan Administrator. Such designation shall affect the deferral
of future fees and shall have no affect on former fees which shall
remain in the Interest Program or the BANC ONE Stock Program as
previously designated unless an election is made pursuant to section 8
of this plan.
6. INTEREST PROGRAM: If the Director elects to participate in the
Interest Program, the Director's deferred account shall be
administered pursuant to the terms of this section. The Corporation
shall on the first day of each calendar quarter credit interest to the
Director's deferred account calculated on the basis of the balance in
such account on the first day of the preceding quarter plus the amount
of fees deferred in the preceding quarter at the average interest rate
paid on money market deposit accounts or equivalent deposit accounts
in the preceding quarter by Bank One, Columbus, N.A.
7. BANC ONE STOCK PROGRAM:
(a) If the Director elects to participate in the BANC ONE Stock
Program, the Director's deferred account shall be invested in
Shares of the Corporation and cash or cash equivalent
securities as determined by the Plan Administrator or its
agent from time to time.
(b) The cash dividends which are paid on the Shares in the BANC
ONE Stock Program shall be reinvested in additional Shares of
the Corporation within a reasonable time following payment of
such dividends.
8. TRANSFERS OF PRIOR DEFERRALS: During the annual election
period, any Director who is not an Insider may elect to transfer
prior deferral amounts from one portfolio to another, such
transfer to be effective December 31st of the year in which the
election is made. Insiders will not be permitted to make such
transfers. The election to transfer prior deferral amounts must be
received by the Plan Administrator by the last business day prior to
December 31st, in order to be effective December 31st. Any such
transfer will be valued as of the last business day prior to December
31st. As used in this Section 8, the term Insider shall include
any Director who is
(a) a director or executive officer of BANC ONE CORPORATION
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DF-PLAN Rev 11-17-93
<PAGE> 3
(b) a member of BANC ONE CORPORATION'S Policy Committee, or
(c) designated as an Insider by BANC ONE CORPORATION.
9. DISTRIBUTIONS FROM DIRECTORS' ACCOUNTS:
(a) PAYMENTS TO DIRECTORS. Amounts credited to a Director under
the Plan shall be distributed as follows:
(1) Thirty days after the first business day of the
calendar year following the date the Plan
Administrator is notified that the Director has
ceased to be a Director;
(2) Thirty days after the date specified by the Director
in a written request to the Plan Administrator to
receive all or a portion of his account because the
Director is experiencing an unforeseeable emergency
or severe financial hardship beyond the control of
the Director; provided that the chief executive
officer of the Corporation approves the request; or
(3) Thirty days after the date specified by the Director
in a written request to the Plan Administrator to
receive all or a portion of his account in the event
of a Change of Control;
provided, further, however, that no distribution hereunder
shall be made to any Director until (i) not fewer than six
months have elapsed following the most recent award or
payment of Fees to the Director pursuant to this Plan or (ii)
the Director's death, retirement, or termination as a
Director and as an employee of the Corporation or an
Affiliate.
Amounts credited to a Director under the Plan shall be
distributed in a lump sum payment or in approximately equal
annual installments over a five or ten-year period as the
Director has elected on the Election & Direction Form and the
Beneficiary Designation Form. Such election shall be made
prior to the date on which the Director ceases to be a
Director. If a Director fails to make such an election, the
amounts credited to a Director under the Plan shall be paid
in approximately equal annual installments of cash over a
five-year period. All distributions under this Plan shall be
calculated on the basis of the value of the Director's
account balance as of the last business day of the calendar
quarter preceding the commencement date described above, or
in the case of an installment payment, the account balance as
of the last business day of the calendar quarter preceding
the installment payment. The first installment (or the lump
sum payment if the Director so elects) shall be paid on the
commencement date described above and subsequent installments
shall be paid within thirty days after the first business day
of each succeeding calendar year until the entire amount
credited to the Director's deferred account shall have been
paid. During such time as amounts credited to a Director
under the Plan continue to be held for the Director or the
Director's beneficiary, such amounts shall continue to earn
interest or cash dividends as set forth in section 6 and 7,
above.
(b) DISTRIBUTION TO BE PAID IN CASH BASED UPON PARTICIPATION IN
STOCK PROGRAM. In the event the Director has been a
participant in the BANC ONE Stock Program, the Director (or
the Director's beneficiary as the case may be) shall receive
his distribution from the Plan in cash based upon the market
value on the open market of the Shares based on the number of
Shares credited to the Director's account as of the last day
of the preceding quarter.
(c) PAYMENTS IN THE EVENT OF A DIRECTOR'S DEATH. In the event a
Director dies before payments from the Director's account
have commenced or after such payments have commenced but
before the entire amount credited to the Director's account
has been paid, all amounts credited to the Director's account
at the time of the Director's death, together with
accumulated interest thereon, shall be paid to the
beneficiary or beneficiaries described in section 10, below,
in a lump sum payment on or before the first business day of
the sixth month following the month in which the Director
dies unless the Director has indicated on the Beneficiary
Designation Form that payments are to continue to the
Director's beneficiary or beneficiaries in the same manner
that such payments have previously been made to the Director
pursuant to sections 9(a) and (b), above, or that such
payments are to be paid to the Director's beneficiary or
beneficiaries on an installment basis over a five or ten-year
period.
- 3 -
DF-PLAN Rev 11-17-93
<PAGE> 4
10. BENEFICIARY DESIGNATION:
(a) Each Director who has a deferred account hereunder may from
time to time submit an Beneficiary Designation Form to the
Plan Administrator. Each Beneficiary Designation Form filed
with the Plan Administrator will revoke all previous
beneficiary designations. The revocation of a beneficiary
designation, no matter how effected, shall not require the
consent of or notice to any designated beneficiary.
(b) If any Director fails to designate a beneficiary in the manner
provided above, or if any Director is not survived by such
beneficiary or beneficiaries, all amounts credited to a
Director's account at the time of the Director's death,
together with accumulated interest thereon, shall be paid in a
lump sum as follows:
(i) If the Director's spouse survives the Director, then
all to the spouse;
(ii) If the Director's spouse does not survive the
Director, then all to the descendants of the Director
(whether lineal or adopted) who survive the Director,
per stirpes;
(iii) If neither the Director's spouse nor the Director's
descendants survive the Director, then all to the
Director's heirs at law.
11. TERMINATION OF ELECTION: A Director may terminate the election to
defer payment of Fees under the Plan by written notice delivered to
the Plan Administrator. Such termination shall become effective as of
the end of the calendar year in which notice of termination is given
with respect to fees payable fur services as a Director during
subsequent calendar years. Amounts credited to the deferred account of
a Director prior to the effective date of termination shall not be
affected thereby and shall be paid in accordance with Section 9.
12. ADMINISTRATION OF THE PLAN: The decision of the Committee with respect
to any questions arising as to the administration or interpretation of
this Plan, including the discontinuance of any or all of the
provisions thereof, shall be final, conclusive, and binding. The
Committee reserves the right to modify this Plan from time to time or
to terminate the Plan, provided, however, that no modification of this
Plan shall void an Election already in effect for the current calendar
year or any preceding calendar year.
13. TITLE TO DEFERRED FUNDS: All amounts credited to a Director's deferred
account shall remain general assets of the Corporation and shall be
subject to the claims of general creditors of the Corporation.
14. NONASSIGNABILITY: No right or benefit under the Plan shall be subject
to anticipation, alienation, sale, assignment, pledge, encumbrance or
charge, and any attempt to anticipate, alienate, assign, sell, pledge,
encumber or charge the same shall be void.
15. GENDER AND NUMBER: Except when indicated by the context, any masculine
terminology used herein shall also include the feminine, and the use
of any term herein in the singular may also include the plural.
-4-
DF-PLAN Rev 11-17-93
<PAGE> 5
DEFERRED COMPENSATION PLAN FOR DIRECTORS
OF BANC ONE CORPORATION AND BANC ONE COMPANIES
ELECTION & DIRECTION DESIGNATION TO
BANC ONE CORPORATION AS THE PLAN ADMINISTRATOR
An agreement between___________________, who is a director of ________________,
and BANC ONE CORPORATION.
This agreement is subject to all of the terms of the Deferred Compensation Plan
for Directors of BANC ONE CORPORATION and BANC ONE Companies ("the Plan"). I
have examined the Plan terms and conditions and I agree to be bound by them.
I hereby make the following elections with respect to the application of my
fees (as a director of BANC ONE CORPORATION or of a BANC ONE Company) to be
deferred under the Plan for the fiscal year (BANC ONE) ending December 31,
1994, and subsequent years.
A. I elect to defer all fees payable to me as a BANC ONE Director during 1994.
My election with respect to deferral of my director fees shall remain in
effect in future years unless I amend or terminate my participation in the
Plan prior to beginning of the applicable year.
<TABLE>
B. DEFERRED FEES INVESTMENT ELECTIONS *
<CAPTION>
1994 and Future Fees: Prior Deferral Funds Transfer:
<S> <C>
__ BANC ONE You may wish to tell us the amount or percent to transfer.
Stock Program
__ FROM BANC ONE STOCK PROGRAM TO INTEREST PROGRAM %
_____%
Please transfer $ _______ or ____%
of my current balance.
__ Interest Program __ FROM INTEREST PROGRAM TO BANC ONE STOCK PROGRAM
Please transfer $ ________ or ______ %
____ % of my current balance.
OR
You may wish to tell us how you would like your
total past contributions to be allocated between funds.
Total must equal 100% __ Stock ___% Interest ___%
======
<FN>
*In the absence of an election in this section, deferrals will be invested in the BANC ONE Stock Program
(see Section 5 of the Plan).
</TABLE>
C. I direct that when I am entitled to receive a distribution from the Plan
such distribution from my Deferred Account be paid in:
___ Lump Sum ___ 5 Annual Payments ___ 10 Annual Payments
I understand that director fees deferred in accordance with my election here-
under will be administered by the Plan Administrator in a Deferred Account in
accordance with the provisions of the Plan and that my rights, and those of my
beneficiaries, shall be those of an unsecured creditor of BANC ONE CORPORATION.
Full Name: ______________________________ Social Security Number: ___-__-____
Signature of
Dated: ____________________ Participant: _________________________________
Witness
Dated: ____________________ Signature: ___________________________________
Above deferral, election, and designation is approved as of:
BANC ONE CORPORATION
Dated: ____________________ By:_________________________________
C:FORM-DF.wk1
<PAGE> 6
BANC ONE CORPORATION
DEFERRED COMPENSATION PLAN FOR DIRECTORS
DESIGNATION OF BENEFICIARY OR CHANGE OF BENEFICIARY
Participant's Full Name_______________________________________________________
______________________ ___________________________
Social Security Number Name of BANC ONE Employer
I hereby make the following Beneficiary Designation under the BANC ONE
CORPORATION Deferred Compensation Plan for Directors to receive any and all
death benefits payable to a Beneficiary under the Plan by reason of my death:
I hereby designate as my Primary Beneficiary:
Full Name:_______________________________________ Relationship:________________
Social Security Number:____________________
I hereby designate as my Secondary Beneficiary:
Full Name:_______________________________________ Relationship:________________
Social Security Number:____________________
This Beneficiary designation cancels any previous designation.
Signature of
Dated:____________________________________________ Participant:________________
Signature of
Dated:____________________________________________ Witness:____________________
Receipt on_________________________________, 19________ of the above
Designation of Beneficiary is hereby acknowledged to the Participant.
BANC ONE CORPORATION
By:_________________________
Plan Administrator
B:DF-BENE
<PAGE> 1
EXHIBIT 10(b)
BANC ONE CORPORATION
1989 STOCK INCENTIVE PLAN
JANUARY, 1989
I-1
<PAGE> 2
<TABLE>
<CAPTION>
BANC ONE CORPORATION
1989 STOCK INCENTIVE PLAN
JANUARY, 1989
TABLE OF CONTENTS
<S> <C> <C>
Section
1. Establishment, Purpose & Date .................................. I-4
1.1 Establishment .............................................. I-4
1.2 Purpose...................................................... I-4
1.3 Effective Date............................................... I-4
2. Definitions.......................,..,........................... I-4
2.1 Definitions.................................................. I-4
2.2 Gender and Number............................................ I-5
3. Eligibility and Participation.................................... I-5
3.1 Eligibility and Participation................................ I-5
4. Administration................................................... I-5
4.1 Administration ............................................. I-5
5. Stock Subject to Plan............................................ I-6
5.1 Number....................................................... I-6
5.2 Unused Stock................................................. I-6
5.3 Adjustment in Capitalization................................. I-6
6. Stock Appreciation Rights........................................ I-6
6.1 Unexercised Rights........................................... I-6
6.2 Adjustment in Capitalization................................. I-6
7. Duration of Plan................................................. I-6
8. Stock Options.................................................... I-6
8.1 Grant of Options............................................. I-6
8.2 Grant of Director Stock Options.............................. I-7
8.3 Option Agreement............................................. I-7
8.4 Option Price................................................. I-7
8.5 Duration of Options.......................................... I-7
8.6 Exercise of Options.......................................... I-7
8.7 Payment...................................................... I-7
8.8 Restrictions on Transferability ............................. I-7
8.9 Termination for Specific Reasons............................. I-7
8.10 Termination for Other Reasons................................ I-8
8.11 Termination of Eligible Director Status...................... I-8
8.12 Nontransferability of Options ............................... I-8
9. Stock Appreciation Rights ....................................... I-8
9.1 Grant of Stock Appreciation Rights .......................... I-8
9.2 Exercise of SARs in Lieu of Options.......................... I-8
9.3 Exercise of SARs in Addition to Options...................... I-8
9.4 Exercise of SARs Upon Lapse of Options....................... I-8
9.5 Exercise of SARs Independent of Options .................... I-8
9.6 Payment of SAR Amount........................................ I-9
9.7 Form and Timing of Payment................................... I-9
9.8 Limit on Appreciation........................................ I-9
9.9 Rule 16b-3 Requirements...................................... I-9
9.10 Term of SAR.................................................. I-9
9.11 Termination of Employment.................................... I-9
9.12 Nontransferability of SARs................................... I-9
</TABLE>
I-2
<PAGE> 3
<TABLE>
<S> <C> <C>
10. Restricted Stock Awards.......................................... I-9
10.1 Grant of Restricted Stock .................................... I-9
10.2 Transferability............................................... I-9
10.3 Other Restrictions............................................ I-9
10.4 Certificate Legend............................................ I-9
10.5 Removal of Restrictions....................................... I-9
10.6 Voting Rights................................................. I-10
10.7 Dividends and Other Distributions............................. I-10
10.8 Termination of Employment..................................... I-10
11. Performance Shares .............................................. I-10
11.1 Grant of Performance Shares .................................. I-10
11.2 Performance Period ........................................... I-10
11.3 Performance Measurement ...................................... I-10
11.4 Payment of Awards ............................................ I-10
11.5 Termination of Employment Due to Retirement................... I-10
11.6 Termination of Employment Due to Death or Disability.......... I-10
11.7 Termination of Employment for Reasons Other than Death,
Disability or Retirement .................................... I-11
11.8 Nontransferability of Performance Shares...................... I-11
12. Performance Awards .............................................. I-11
12.1 Grant of Performance Awards .................................. I-11
12.2 Performance Period ........................................... I-11
12.3 Performance Measurement ...................................... I-11
12.4 Payment of Awards............................................. I-11
12.5 Termination of Employment Due to Retirement................... I-11
12.6 Termination of Employment Due to Death or Disability.......... I-12
12.7 Termination of Employment for Reasons Other than Death,
Disability or Retirement ................................... I-12
12.8 Nontransferability of Performance Awards ..................... I-12
13. Beneficiary Designation ......................................... I-12
14. Rights of Employees.............................................. I-12
14.1 Employment ................................................... I-12
14.2 Participation ................................................ I-12
15. Change in Control .............................................. I-12
15.1 In General ................................................... I-12
15.2 Limitation on Payments........................................ I-12
15.3 Definition.................................................... I-12
16. Amendment, Modification & Termination of Plan.................... I-13
17. Tax Withholding.................................................. I-13
18. Indemnification ................................................. I-14
19. Requirements of Law.............................................. I-14
19.1 Requirements of Law........................................... I-14
19.2 Governing Law................................................. I-14
</TABLE>
I-3
<PAGE> 4
BANC ONE CORPORATION
1989 STOCK INCENTIVE PLAN
SECTION 1. ESTABLISHMENT, PURPOSE, AND EFFECTIVE DATE OF PLAN
1.1 ESTABLISHMENT. BANC ONE CORPORATION, a Delaware corporation (the
"Corporation"), hereby establishes the "1989 STOCK INCENTIVE PLAN" (the "Plan")
for key employees of the Corporation and its subsidiaries and for directors of
the Corporation who are not employees of the Corporation or any of its
subsidiaries. The Plan permits the grant of Director Stock Options to such
directors and the grant of Stock Options, Stock Appreciation Rights, Restricted
Stock Awards, Performance Shares, and Performance Awards to such employees.
1.2 PURPOSE. The purpose of the Plan is to advance the interests of the
Corporation by encouraging and providing for the acquisition of an equity
interest in the Corporation by directors of the Corporation and key employees
of the Corporation and its subsidiaries and by enabling the Corporation to
attract and retain the services of such directors and key employees upon whose
judgment, interest, and special effort the successful conduct of its operations
is largely dependent.
1.3 EFFECTIVE DATE. The Plan shall become effective as of January 18,
1989, the date of its adoption by the Board of Directors of the Corporation,
subject to ratification by the shareholders of the Corporation within twelve
months of the adoption date.
SECTION 2. DEFINITIONS
2.1 DEFINITIONS. Whenever used herein, the following terms shall have
their respective meanings set forth below:
(a) "Award" means any Option, Stock Appreciation Right, Restricted
Stock Awards, Performance Share, or Performance Award.
(b) "Board" means the Board of Directors of the Corporation.
(c) "Code" means the Internal Revenue Code of 1986, as amended.
(d) "Committee" means the Committee of the Corporation's Board of
Directors which shall consist of three or more directors appointed by the
Board. These directors shall be "disinterested persons" within the
meaning of Rule 16b-3 of the Securities Exchange Act of 1934.
(e) "Corporation" means BANC ONE CORPORATION, a bank holding company
under the Bank Holding Company Act of 1956 headquartered in Columbus,
Ohio.
(f) "Disability" means disability as determined by the Committee.
(g) "Director Stock Option" means an Option granted to an Eligible
Director. Each Director Stock Option shall be a nonqualified stock option
whose grant is not intended to fall under the provisions of Section 422A
of the Code.
(h) "Eligible Director" means any statutory director of the
Corporation who is not an employee of the Corporation or any of its
subsidiaries:
(i) "Fair Market Value" means the closing price of the Stock as
reported by the New York Stock Exchange on a particular date. In the
event that there are no Stock transactions on such date, the Fair Market
Value shall be determined as of the immediately preceding date on which
there were Stock transactions.
(j) "Option" means the right to purchase Stock at a stated price for
a specified period of time. For purposes of the Plan an Option, other
than a Director Stock Option, may be either (i) an incentive stock option
within the meaning of Section 422A of the Code or (ii) a nonqualified
stock option whose grant is intended not to fall under the provisions of
Section 422A.
(k) "Option Agreement" means an agreement entered into between the
Corporation and an employee or an Eligible Director in the form
prescribed by the Committee.
(l) "Option Price" means the price at which each share of Stock
subject to an Option may be purchased, determined in accordance with
Section 8.4 herein.
I-4
<PAGE> 5
(m) "Participant" means any individual, other than an Eligible
Director, designated by the Committee to participate in the Plan pursuant
to Section 3.1 herein.
(n) "Period of Restriction" means the period during which the transfer
of shares of Restricted Stock and/or Performance Shares is restricted
pursuant to Section 10 and/or Section 11 of the Plan.
(o) "Performance Awards" means awards of cash granted to a Participant
pursuant to Section 12 of the Plan.
(p) "Performance Objective" shall mean the performance measure(s) and
the achievement goals of the Corporation or one or more of its subsidiaries
set by the Committee.
(q) "Performance Period" shall mean two or more successive fiscal years
of the Corporation with respect to which a Performance Share or Performance
Award may be earned pursuant to this Plan. Performance Periods shall begin
with the first day of the fiscal year in which a Performance Share or
Performance Award is granted. The length of a Performance Period shall be
at the discretion of the Committee. For each Performance Share and
Performance Award, no more than one Performance Period shall begin in any
one fiscal year of the Corporation.
(r) "Performance Shares" means Stock granted to a Participant pursuant
to Section 11 of the Plan. Each Performance Share shall be the equivalent
of one share of Stock.
(s) "Restricted Stock" means Stock granted to a Participant pursuant to
Section 10 of the Plan.
(t) "Restricted Stock Agreement" means an agreement entered into
between the Corporation and the Employee in the form prescribed by the
Committee.
(u) "Retirement," "Normal Retirement," and "Early Retirement" means
termination of employment as defined in the BANC ONE CORPORATION
Retirement Plan.
(v) "Stock" means the common stock of the Corporation, without par
value.
(w) "Stock Appreciation Right" and "SAR" means the right to receive a
cash payment from the Corporation equal to the excess of the Fair Market
Value of a share of Stock at the date of exercise over a specified price
fixed by the Committee which shall not be less than 100% of the Fair Market
Value of the Stock on the date of grant. In the case of a Stock
Appreciation Right which is granted in conjunction with an Option, the
specified price shall be the Option exercise price.
2.2 GENDER AND NUMBER. Except when otherwise indicated by the context,
words in the masculine gender when used in the Plan shall include the feminine
gender, the singular shall include the plural, and the plural shall include the
singular.
SECTION 3. ELIGIBILITY AND PARTICIPATION
3.1 ELIGIBILITY AND PARTICIPATION. Participants in the Plan shall be
selected by the Committee from among those employees of the Corporation and its
subsidiaries who are recommended for participation by the Chief Executive
Officer of the Corporation and who, in the opinion of the Committee, are in a
position to contribute materially to the Corporation's continued growth,
development, and long-term financial success. Persons serving on the Committee
shall not be eligible to be a Participant.
3.2 ELIGIBLE DIRECTORS. Eligible Directors are entitled to participate in
the Plan solely with respect to the grant of Director Stock Options and may not
receive any other Award under the Plan. The selection of Eligible Directors is
not subject to the discretion of the Committee. Persons serving on the
Committee who are Eligible Directors may receive grants of Director Stock
Options.
SECTION 4. ADMINISTRATION
4.1 ADMINISTRATION. The Committee shall be responsible for the
administration of the Plan. The Committee, by majority action thereof, is
authorized to interpret the Plan, to prescribe, amend, and rescind rules and
regulations relating to the Plan. to provide for conditions and assurances
deemed necessary or advisable to protect the interests of the Corporation, and
to make all other determinations necessary or advisable for the administration
of the Plan, but only to the extent not contrary to the explicit provisions of
the Plan. Determinations, interpretations, or other actions made or taken by
the Committee pursuant to the provisions of the Plan shall be final and binding
and conclusive for all purposes and upon all persons whomsoever.
I-5
<PAGE> 6
SECTION 5. STOCK SUBJECT TO PLAN
5.1 NUMBER. The total number of shares of Stock subject to issuance under
the Plan may not exceed three million one hundred and fifty thousand
(3,150,000) subject to adjustment upon occurrence of any of the events
indicated in Subsection 5.3. Of this total number, up to three million
(3,000,000) shares of Stock may be granted in Restricted Stock or in common
stock as a payout medium to Participants under the Plan and up to one hundred
and fifty thousand (150,000) shares may be issued pursuant to the exercise of
Director Stock Options. The shares to be delivered under the Plan may consist,
in whole or in part, of authorized but unissued Stock or issued stock
reacquired and held as treasury Stock not reserved for any other purpose.
5.2 UNUSED STOCK. In the event any shares of Stock that are subject to an
Option which, for any reason, expires or is terminated unexercised as to such
shares, or any shares of Stock subject to a Restricted Stock or Performance
Share grant made under the Plan are reacquired by the Corporation pursuant to
the Plan, such shares again shall become available for issuance under the Plan
except as provided in Section 9.4.
5.3 ADJUSTMENT IN CAPITALIZATION. In the event that subsequent to the
date of adoption of the Plan by the Board the shares of Stock should as a
result of a stock split, stock dividend, combination or exchange of shares,
exchange for other securities, reclassification, reorganization, redesignation,
merger, consolidation, recapitalization or other such change, be increased or
decreased or changed into or exchanged for a different number or kind of shares
of Stock or other securities of the Corporation or of another corporation, then
(a) there shall automatically be substituted for each share of Stock subject to
an unexercised Option (in whole or in part) granted under the Plan and each
share of Stock available for additional grants of Options under the Plan the
number and kind of shares of Stock or other securities into which each
outstanding share of Stock shall be changed or for which each such Share shall
be exchanged, (b) the Option Price shall be increased or decreased
proportionately so that the aggregate purchase price for the securities subject
to the Option shall remain the same as immediately prior to such event and (c)
the Board shall make such other adjustments to the securities subject to
Options and the provisions of the Plan and Option Agreements as may be
appropriate and equitable. Any such adjustment may provide for the elimination
of fractional shares. In such event, the Committee also shall have discretion
to make appropriate adjustments in the number and type of shares subject to
Restricted and Performance Share grants then outstanding under the Plan
pursuant to the terms of such grants or otherwise.
SECTION 6. STOCK APPRECIATION RIGHTS SUBJECT TO PLAN
6.1 UNEXERCISED RIGHTS. In the event any Stock Appreciation Rights expire
unexercised, such Stock Appreciation Rights again shall become available for
issuance under the Plan.
6.2 ADJUSTMENT IN CAPITALIZATION. In the event of any change in the
outstanding shares of Stock that occurs after ratification of the Plan by the
shareholders of the Corporation by reason of a Stock dividend or split,
recapitalization, merger, consolidation, combination, exchange of shares, or
other similar corporate change, the Committee shall make appropriate
adjustments in the number of outstanding Stock Appreciation Rights and the
related grant values.
SECTION 7. DURATION OF PLAN
The Plan shall remain in effect, subject to the Board's right to earlier
terminate the Plan pursuant to Section 16 hereof, until all Stock subject to it
shall have been purchased or acquired pursuant to the provisions hereof.
Notwithstanding the foregoing, no Option, Stock Appreciation Right, Restricted
Stock, Performance Share, or Performance Award may be granted under the Plan on
or after the tenth (10th) anniversary of the Plan's effective date.
SECTION 8. STOCK OPTIONS
8.1 GRANT OF OPTIONS OTHER THAN DIRECTOR STOCK OPTIONS. Subject to the
provisions of Sections 5 and 7, Options other than Director Stock Options may
be granted to Participants at any time and from time to time as shall be
determined by the Committee. The Committee shall have complete discretion in
determining the number of Options granted to each Participant. The Committee
also shall determine whether an Option is to be an incentive stock option
within the meaning of Code Section 422A, or a nonqualified stock option whose
grant is intended not to fall within the provisions of Section 422A. However,
in no event shall the aggregate Fair Market Value (determined at the date of
grant) of the stock for which incentive stock options are first exercisable in
a particular calendar year exceed $100,000, computed in accordance with Section
422A(b)(7)
I-6
<PAGE> 7
of the Code. An incentive stock option shall not be granted to any person who
owns, directly or indirectly, Stock possessing more than 10% of the total
combined voting power of all classes of Stock of the Corporation. Nothing in
this Section 8 shall be deemed to prevent the grant of nonqualified stock
options in excess of the maximum established by Section 422A of the Code.
8.2 GRANT OF DIRECTOR STOCK OPTIONS. Subject to the provisions of Sections
5 and 7, Director Stock Options shall be granted to Eligible Directors as
provided in this Section 8.2 and the Committee shall have no discretion with
respect to any matters set forth in this Section 8.2.
(a) VESTING. Each Director Stock Option shall become exercisable on and
after the first anniversary of the date of the grant.
(b) NUMBER OF SHARES. Director Stock Options shall be granted as
follows:
(i) Each Eligible Director on the effective date of the Plan shall
automatically be granted a Director Stock Option for 3,000 shares of
Stock.
(ii) Each other person who is elected or appointed to serve as a
director of the Corporation after the effective date of the Plan and who
is an Eligible Director shall, upon his initial appointment or election as
an Eligible Director, automatically be granted a Director Stock Option for
3,000 shares of Stock:
(iii) Commencing immediately after the adjournment of the
Corporation's annual meeting of shareholders (an "Annual Meeting") in 1990
and immediately after the adjournment of the Annual Meeting each year
thereafter, each Eligible Director who was an Eligible Director
immediately preceding such Annual Meeting and who has been elected as a
director at such Annual Meeting shall automatically be granted a Director
Stock Option for 1,000 shares of Stock if, but only if, the return on
common equity of the Corporation as set forth in the Corporation's annual
report to shareholders for the immediately preceding fiscal year is equal
to or greater than 10%.
8.3 OPTION AGREEMENT. Each Option shall be evidenced by an Option
Agreement that shall specify the type of Option granted, the Option Price, the
duration of the Option, the number of shares of Stock to which the Option
pertains, and such other provisions as the Committee shall determine.
8.4 OPTION PRICE. No Option granted pursuant to the Plan shall have an
Option Price that is less than the Fair Market Value of the Stock on the date
the Option is granted.
8.5 DURATION OF OPTIONS. Each Option, other than Director Stock Options,
shall expire at such time as the Committee shall determine at the time it is
granted; provided, however, that no Option, other than incentive stock options
within the meaning of Section 422A of the Code, shall be exercisable later than
twenty years and one day from the date of its grant and no such incentive stock
option shall be exercisable more than ten years and one day from the date of
grant. No Director Stock Option may be exercisable later than twenty years and
one day from the date of its grant.
8.6 EXERCISE OF OPTIONS. Options granted under the Plan other than
Director Stock Options shall be exercisable at such times and be subject to
such restrictions and conditions as the Committee shall in each instance
approve, which need not be the same for all Participants.
8.7 PAYMENT. The Option Price upon exercise of any Option shall be payable
to the Corporation in full either (i) in cash or its equivalent, or (ii) by
tendering shares of previously acquired Stock having a Fair Market Value at the
time of exercise equal to the total Option Price, or (iii) by a combination of
(i) and (ii). The proceeds from such a payment shall be added to the general
funds of the Corporation and shall be used for general corporate purposes. As
soon as practicable after receipt of full payment (including the necessary tax
withholding), the Corporation shall deliver to the Participant or the Eligible
Director, as the case may be, Stock certificates in an appropriate amount based
upon the number of Options exercised, issued in the name of the Participant or
the Eligible Director, as the case may be.
8.8 RESTRICTIONS ON STOCK TRANSFERABILITY. The Committee shall impose such
restrictions on any shares of Stock acquired pursuant to the exercise of an
Option under the Plan as it may deem advisable, including, without limitation,
restrictions under applicable Federal securities law, under the requirements of
any stock exchange upon which such shares of Stock are then listed and under
any blue sky or state securities laws applicable to such shares.
8.9 TERMINATION OF EMPLOYMENT FOR SPECIFIC REASONS. In the event the
employment of a Participant is terminated for any reason, any outstanding
Option granted pursuant to the Plan and any rights thereunder
I-7
<PAGE> 8
shall be exercisable by the Participant (or in the case of a deceased
Participant by his legal representative) only to the extent of the accrued
right to exercise such Option at the date of such termination; provided,
however, if such termination is by reason of death or disability or, with the
prior consent of the Committee, by reason of resignation or retirement under
the BANC ONE CORPORATION Retirement Plan, and if at the date of such
termination the Participant had completed twelve (12) full months of employment
after the date of the Option grant the Committee may, in its sole discretion,
permit the exercise of all or any portion of the Option not otherwise
exercisable and may provide that all or some portion of the Option shall not
terminate upon or by virtue of such employment termination. To the extent that
such Option is exercisable at termination or, as the result of Committee
approval, becomes exercisable at termination it must be exercised prior to the
expiration of the expiration date of the Option or within twelve (12) months
and five (5) days after such date of termination of employment. whichever
period is shorter. However, in the case of incentive stock options, the
favorable tax treatment prescribed under Section 422A of the Code shall not be
available if such Option is not exercised within the required statutory period
as specified in Section 422A.
8.10 TERMINATION OF EMPLOYMENT FOR OTHER THAN SECTION 8.9 REASONS. If the
employment of the Participant shall terminate for any reason other than one of
those specified in Section 8.9 of the Plan, the rights under any then
outstanding Option granted pursuant to the Plan which, pursuant to the terms of
the Option Agreement between the Participant and the Corporation, is
exercisable as of the date of such termination, shall terminate upon the
expiration date of the Option or three months after such date of termination of
employment, whichever first occurs. In its sole discretion, the Committee may
extend the three months up to twelve (12) months and five (5) days, but in no
event beyond the expiration date of the Option.
8.11 TERMINATION OF ELIGIBLE DIRECTOR SHARES. In the event that an
Eligible Director ceases to be an Eligible Director for any reason, the rights
under any then outstanding Director Stock Option granted pursuant to the Plan
which are exercisable as of the date he ceases to be an Eligible Director shall
terminate upon the date determined as provided in Section 8.5. above, or three
months after such cessation date, whichever first occurs; provided, however,
that if he ceases to be an Eligible Director by reason of death, the
three-month period shall be extended to the sooner of twelve (12) months and
five (5) days or the expiration date of the Director Stock Option.
8.12 NONTRANSFERABILITY OF OPTIONS. No Option granted under the Plan may
be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, otherwise than by will or by the laws of descent and
distribution. All Options granted to a Participant or an Eligible Director
under the Plan shall be exercisable during his lifetime only by such
Participant or Eligible Director.
SECTION 9. STOCK APPRECIATION RIGHTS
9.1 GRANT OF STOCK APPRECIATION RIGHTS. Subject to the provisions of
Sections 6 and 7, Stock Appreciation Rights may be granted to Participants at
any time and from time to time as shall be determined by the Committee. An SAR
may be granted, in the discretion of the Committee, in any of the following
forms:
(a) In lieu of Options,
(b) In addition to Options,
(c) Upon lapse of Options, or
(d) Independent of Options.
9.2 EXERCISE OF SARS IN LIEU OF OPTIONS. SARs granted in lieu of Options
may be exercised for all or part of the shares of Stock subject to the related
Option upon the surrender of the right to exercise an equivalent number of
Options. The SAR may be exercised only with respect to the shares of Stock for
which its related Option is then exercisable. SARs granted in lieu of Options
will lapse in the event and to the extent that the related Option is exercised.
9.3 EXERCISE OF SARS IN ADDITION TO OPTIONS. SARs granted in addition to
Options shall be deemed to be exercised upon the exercise of the related
Options.
9.4 EXERCISE OF SARS UPON LAPSE OF OPTIONS. SARs granted upon lapse of
Options shall be deemed to have been exercised upon the lapse of the related
Options as to the number of shares of Stock subject to the Options.
9.5 EXERCISE OF SARS INDEPENDENT OF OPTIONS. SARs granted independent of
Options may be exercised upon whatever terms and conditions the Committee, in
its sole discretion, imposes upon the SARs.
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9.6 PAYMENT OF SAR AMOUNT. Upon exercise of the SAR, the holder shall be
entitled to receive payment of an amount (subject to Section 9.8 below)
determined by multiplying:
(a) The difference between the Fair Market Value of a share of Stock
at the date of exercise over the price fixed by the Committee at the date
of grant, by
(b) The number of shares with respect to which the SAR is exercised.
9.7 FORM AND TIMING OF PAYMENT. At the discretion of the Committee,
payment for SARs may be made in cash or stock, or in a combination thereof. If
payment is made in Stock, the value of such Stock shall be the Fair Market
Value determined as of the date of exercise.
9.8 LIMIT ON APPRECIATION. At the time of grant, the Committee may
establish, in its sole discretion, a maximum amount per share which will be
payable upon exercise of an SAR.
9.9 RULE 16B-3 REQUIREMENTS. Notwithstanding any other provision of the
Plan, the Committee may impose such conditions on exercise of an SAR
(including, without limitation, the right of the Committee to limit the time of
exercise to specified periods) as may be required to satisfy the requirements
of Rule 16b-3 (or any successor rule), under the Securities Exchange Act of
1934.
9.10 TERM OF SAR. The term of an SAR granted under the Plan shall not
exceed ten years and one day.
9.11 TERMINATION OF EMPLOYMENT. In the event the employment of a
Participant is terminated by reason of Death, Disability, Retirement, or any
other reason, any SARs outstanding shall terminate in the same manner as
specified for Options under Sections 8.9 and 8.10 herein.
9.12 NONTRANSFERABILITY OF SARS. No SAR granted under the Plan may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
otherwise than by will or by the laws of descent and distribution. Further, all
SARs granted to a Participant under the Plan shall be exercisable during his
lifetime only by such Participant.
SECTION 10. RESTRICTED STOCK AWARDS
10.1 GRANT OF RESTRICTED STOCK. Subject to the provisions of Sections 5
and 7, the Committee, at any time and from time to time, may award shares of
Restricted Stock under the Plan to such Participants and in such amounts as it
shall determine. Each Restricted Stock Award shall be evidenced by a Restricted
Stock Agreement that shall specify the Period or Periods of Restriction, the
number of Restricted Stock shares awarded, and such other provisions as the
Committee shall determine.
10.2 TRANSFERABILITY. Except as provided in this Section 10, the shares
of Restricted Stock awarded hereunder may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated for such period of time as
shall be determined by the Committee and shall be specified in the Restricted
Stock Agreement, or upon earlier satisfaction of other conditions as specified
by the Committee in its sole discretion and set forth in the Restricted Stock
Agreement.
10.3 OTHER RESTRICTIONS. The Committee shall impose such other
restrictions on any shares of Restricted Stock awarded pursuant to the Plan as
it may deem advisable including, without limitation, restrictions under
applicable federal or state securities or tax laws, and may legend the
certificates representing Restricted Stock to give appropriate notice of such
restrictions.
10.4 CERTIFICATE LEGEND. In addition to any legends placed on
certificates pursuant to Section 10.3 hereof, each certificate representing
shares of Restricted Stock granted pursuant to the Plan shall bear a legend
which is comparable to the following
"The sale or other transfer of this certificate or the shares of stock
represented by this certificate, whether voluntary, involuntary, or by
operation of law, is subject to certain restrictions on transfer and
other terms and conditions set forth in the BANC ONE CORPORATION 1989
Stock Incentive Plan and a Restricted Stock Agreement dated
, 19 . A copy of the Plan and such Restricted Stock
Agreement may be obtained from the Secretary of BANC ONE CORPORATION, 100
East Broad Street, Columbus, Ohio 43271-0261.
10.5 REMOVAL OF RESTRICTIONS. Except as otherwise provided in this
Section 10, shares of Restricted Stock covered by each Restricted Stock Award
made under the Plan shall become freely transferable by the
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Participant after the last day of the Period of Restriction. Once the shares
are released from the restrictions, the Participant shall be entitled to have
the legend required by Section 10.4 removed from his Stock certificates.
10.6 VOTING RIGHTS. During the Period of Restriction, Participants holding
shares of Restricted Stock awarded hereunder may exercise full voting rights
with respect to those shares.
10.7 DIVIDENDS AND OTHER DISTRIBUTIONS. During the Period of Restriction,
Participants holding shares of Restricted Stock awarded hereunder shall be
entitled to receive all dividends and other distributions paid with respect to
those shares while they are so held. If any such dividends or distributions are
paid in shares of Stock, the shares shall be subject to the same restrictions
on transferability as the shares of Restricted Stock with respect to which they
were paid.
10.8 TERMINATION OF EMPLOYMENT. In the event that a Participant
terminates his employment with the Corporation for any reason, any shares of
Restricted Stock still subject to restrictions at the date of such termination
automatically shall be forfeited and returned to the Corporation; provided,
however, that the Committee, in its sole discretion, at the time of such
retirement may with respect to some or all of the shares still subject to
restrictions at the time of said termination waive the automatic forfeiture,
and/or reduce the restrictions, and/or modify restrictions applicable to such
shares.
SECTION 11. PERFORMANCE SHARES
11.1 GRANT OF PERFORMANCE SHARES. Subject to the provisions of Sections 5
and 7, the Committee, at any time and from time to time, may grant Performance
Shares to such Participants and in such amounts as it shall determine. Each
grant of Performance Shares shall be in writing.
11.2 PERFORMANCE PERIOD. The period over which Performance Shares may be
earned shall begin on the first day of the fiscal year in which a grant occurs.
The length of the Performance Period for each grant shall be determined by the
Committee, in its sole discretion, but shall not be less than two years.
11.3 PERFORMANCE MEASUREMENT. At the beginning of each Performance
Period, Performance Objectives shall be established by the Chief Executive
Officer of the Corporation subject to Committee approval. The degree of
attainment of such Performance Objectives shall determine the number of the
Performance Shares payable at the end of the Performance Period, in accordance
with a schedule established by the Chief Executive Officer and approved by the
Committee at the beginning of the Performance Period.
The Committee may adjust the Performance Objectives during the Performance
Period if it is determined that changes in business conditions have materially
and unduly influenced the Corporation's ability to meet the Performance
Objectives.
11.4 PAYMENT OF AWARDS. All payments pursuant to Performance Share grants
shall be made as soon as practicable following the end of the applicable
Performance Period based upon the degree of attainment of the Performance
Objectives. Payments shall be made in Stock. The Committee shall review all
calculations of actual Performance Objective accomplishments and shall make any
adjustments in the computations to recognize material extraordinary or
nonrecurring items if, in the judgment of the Committee, the effect of such
adjustments is equitable and in conformity with the purposes of the Plan.
11.5 TERMINATION OF EMPLOYMENT DUE TO RETIREMENT. In the event that a
Participant terminates his employment with the Corporation because of Normal
Retirement during the Performance Period, the Participant shall be entitled to
a prorated award of Performance Shares as of the most recently completed full
fiscal year of the Performance Period. Payments of Performance Shares
determined in this manner shall be multiplied by a fraction, the numerator of
which is the number of full months which have elapsed since the commencement of
the Performance Period, and the denominator of which is the number of full
months in the particular Performance Period. Payment of Performance Shares in
this case shall be made as soon as practicable following the end of the fiscal
year of termination.
In the event that a Participant terminates his employment with the
Corporation because of Early Retirement, any Performance Shares outstanding at
the date of such Early Retirement automatically shall be forfeited; provided,
however, that the Committee may, in its sole discretion, determine a prorated
value for the Participant's then outstanding Performance Shares as it deems
appropriate. Payment of Performance Shares in this case shall be made as soon
as practicable following the end of the fiscal year of termination.
11.6 TERMINATION OF EMPLOYMENT DUE TO DEATH OR DISABILITY. In the event a
Participant terminates his employment with the Corporation because of Death or
Disability during the Performance Period, the
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<PAGE> 11
Participant shall be entitled to a prorated award of Performance Shares as of
the most recently completed full fiscal year of the Performance Period.
Payments of Performance Shares determined in this manner shall be multiplied by
a fraction, the numerator of which is the number of full months which have
elapsed since the commencement of the Performance Period, and the denominator
of which is the number of full months in the particular Performance Period.
Payment of Performance Shares in this case shall be made as soon as practicable
following the end of the fiscal year of termination.
11.7 TERMINATION OF EMPLOYMENT FOR REASONS OTHER THAN DEATH, DISABILITY,
OR RETIREMENT. In the event that a Participant terminates his employment with
the Corporation for any reason other than those set forth in Sections 11.5 and
11.6 hereof during the Performance Period, then any Performance Shares still
outstanding at the date of such termination automatically shall be forfeited;
provided, however, that, in the event of an involuntary termination of the
employment of a Participant by the Corporation the Committee may, in its sole
discretion, waive the automatic forfeiture of any or all such Performance
Shares as it deems appropriate, and pay a prorated award.
11.8 NONTRANSFERABILITY OF PERFORMANCE SHARES. No Performance Shares
granted under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, otherwise than by will or by the laws of
descent and distribution until the termination of the applicable Performance
Period. All rights with respect to Performance Shares granted to a Participant
under the Plan shall be exercisable during his lifetime only by such
Participant.
SECTION 12. PERFORMANCE AWARDS
12.1 GRANT OF PERFORMANCE AWARDS. Subject to the provisions of Sections 5
and 7, the Committee, at any time and from time to time, may grant Performance
Awards under the Plan to such Participants and in such amounts as it shall
determine. Each grant of Performance Awards shall be in writing.
12.2 PERFORMANCE PERIOD. The period over which Performance Awards may be
earned shall begin on the first day of the fiscal year in which a grant occurs.
The length of the Performance Period for each grant shall be determined by the
Committee in its sole discretion but shall not be less than two years.
12.3 PERFORMANCE MEASUREMENT. At the beginning of each Performance Period,
Performance Objectives shall be established by the Chief Executive Officer of
the Corporation subject to Committee approval. The degree of attainment of such
Performance Objectives shall determine the value of the Performance Awards at
the end of the Performance Period, in accordance with a schedule established by
the Chief Executive Officer and approved by the Committee at the beginning of
the Performance Period.
The Committee may adjust the Performance Objectives during the Performance
Period if it is determined that changes in business conditions have materially
and unduly influenced the Corporation's ability to meet the Performance
Objectives.
12.4 PAYMENT OF AWARDS. All payments pursuant to Performance Award grants
shall be made as soon as practicable following the end of the applicable
Performance Period based upon the degree of attainment of the Performance
Objectives. Payments shall be made in cash. The Committee shall review all
calculations of actual Performance Objective accomplishments and shall make any
adjustments in the computations to recognize material extraordinary or
nonrecurring items if, in the judgment of the Committee, the effect of such
adjustments is equitable and in conformity with the purposes of the Plan.
12.5 TERMINATION OF EMPLOYMENT DUE TO RETIREMENT. In the event that a
Participant terminates his employment with the Corporation because of Normal
Retirement during the Performance Period, the Participant shall be entitled to
a prorated award of Performance Awards as of the most recently completed full
fiscal year of the Performance Period. Payment of Performance Awards determined
in this manner shall be multiplied by a fraction, the numerator of which is the
number of full months which have elapsed since the commencement of the
Performance Period, and the denominator of which is the number of full months
in the particular Performance Period. Payment of Performance Awards in this
case shall be made as soon as practicable following the end of the fiscal year
of termination.
In the event that a Participant terminates his employment with the
Corporation because of Early Retirement, the Committee may, in its sole
discretion, determine a prorated value for the Participant's then outstanding
Performance Awards as it deems appropriate. Payment of Performance Awards in
this case shall be made as soon as practicable following the end of the fiscal
year of termination.
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12.6 TERMINATION OF EMPLOYMENT DUE TO DEATH OR DISABILITY. In the event a
Participant terminates his employment with the Corporation because of Death or
Disability during the Performance Period, the Participant shall be entitled to
a prorated award of Performance Awards as of the most recently completed full
fiscal year of the Performance Period. Payments of Performance Awards
determined in this manner shall be multiplied by a fraction, the numerator of
which is the number of full months which have elapsed since the commencement of
the Performance Period, and the denominator of which is the number of full
months in the particular Performance Period. Payment of Performance Awards in
this case shall be made as soon as practicable following the end of the fiscal
year of termination.
12.7 TERMINATION OF EMPLOYMENT FOR REASONS OTHER THAN DEATH, DISABILITY,
OR RETIREMENT. In the event that a Participant terminates his employment with
the Corporation for any reason other than those set forth in Sections 12.5 and
12.6 hereof during the Performance Period, then any Performance Awards still
outstanding at the date of such termination automatically shall be forfeited;
provided, however, that in the event of an involuntary termination of the
employment of a Participant by the Corporation the Committee may, in its sole
discretion, waive the automatic forfeiture of any or all such Performance
Awards as it deems appropriate and pay a prorated award.
12.8 NONTRANSFERABILITY OF PERFORMANCE AWARDS. No Performance Awards
granted under the Plan may be sold, transferred, pledged, assigned, or
otherwise alienated or hypothecated, otherwise than by will or by the laws of
descent and distribution until the termination of the applicable Performance
Period. All rights with respect to Performance Awards granted to a Participant
under the Plan shall be exercisable during his lifetime only by such
Participant.
SECTION 13. BENEFICIARY DESIGNATION
Each Participant under the Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Plan is to be paid in case of his death before he
receives any or all of such benefit. Each designation will revoke all prior
designations by the same Participant, shall be in a form prescribed by the
Committee, and will be effective only when filed by the Participant in writing
with the Committee during his lifetime. In the absence of any such designation,
benefits remaining unpaid at the Participant's death shall be paid to his
estate.
SECTION 14. RIGHTS OF EMPLOYEES
14.1 EMPLOYMENT. Nothing in the Plan shall interfere with or limit in any
way the right of the Corporation to terminate any Participant's employment at
any time, nor confer upon any Participant any right to continue in the employ
of the Corporation.
14.2 PARTICIPATION. No employee shall have a right to be selected as a
Participant, or, having been so selected, to be selected again as a
Participant.
SECTION 15. CHANGE IN CONTROL
15.1 IN GENERAL. In the event that (a) the Corporation is a party to a
merger or consolidation agreement, (b) the Corporation is a party to an
agreement to sell substantially all of its assets, or (c) there is a change in
control of the Corporation as defined in Section 15.3 below, the Committee may,
in its sole discretion, provide that all outstanding Awards shall become 100%
vested, that all outstanding Options and SARs shall become immediately
exercisable and that any Period of Restriction shall immediately lapse.
Performance Share and Performance Award values shall be computed as if the most
recently completed full fiscal year was the end of the Performance Period,
except that no Performance Share or Performance Award payable under this
Section, except as limited by Section 15.2 hereof, may be less than would have
been paid had the Corporation achieved 100% of its Performance Objectives.
15.2 LIMITATION ON PAYMENTS. If the receipt of amy payment under this
Section by any Participant shall, in the opinion of independent tax counsel of
recognized standing selected by the Corporation, result in the payment by such
Participant of any excise tax provided for in Section 280G and Section 4999 of
the Code, then the amount of such payment shall be reduced to the extent
required, in the opinion of independent tax counsel, to prevent the imposition
of such excise tax.
15.3 DEFINITION. For purposes of the Plan, a "change in control" shall
mean any of the following events;
(i) The acquisition of "beneficial ownership", as defined in Rule
13d-3 promulgated under the Securities Exchange Act of 1934 (the
"Exchange Act"), of twenty percent (20%) or more of the total
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voting capital Stock of the Corporation then issued and outstanding, by
any person, or "group", as defined in Section 13(d)(3) of the Exchange
Act, or
(ii) Individuals who were members of the Board of the Corporation
immediately prior to a meeting of the shareholders of the Corporation
involving a contest for the election of directors do not constitute a
majority of the Board immediately following such election, unless the
election of such new directors was recommended to the shareholders by
management of the Corporation.
The Board has final authority to determine the exact date on which a
change in control has been deemed to have occurred under (i) and (ii) above.
SECTION 16. AMENDMENT, MODIFICATION, AND TERMINATION OF PLAN
The Board may at any time terminate and, from time to time, may amend or
modify the Plan, provided, however, that no such action of the Board, without
approval of the shareholders, may:
(a) Increase the total amount of Stock which may be issued under the
Plan, except as provided in Subsections 5.1 and 5.3 of the Plan.
(b) Change the provisions of the Plan regarding the Option Price
except as permitted by Subsection 5.3.
(c) Materially increase the cost of the Plan or materially increase
the benefits to Participants.
(d) Extend the period during which Options, Stock Appreciation Rights,
Restricted Stock, Performance Shares, or Performance Awards may be
granted.
(e) Extend the maximum period after the date of grant during which
Options may be exercised.
No amendment, modification, or termination of the Plan shall in any
manner adversely affect any Options, Stock Appreciation Rights, Restricted
Stock, Performance Shares, or Performance Awards theretofore granted under the
Plan, without the consent of the Participant or the Eligible Director, as the
case may be.
SECTION 17. TAX WITHHOLDING
(a) The Corporation shall have the right to withhold from any payments
made under the Plan or to collect as a condition of payment, any taxes required
by law to be withheld. At any time when a Participant or an Eligible Director,
as the case may be, is required to pay to the Corporation an amount required to
be withheld under applicable income tax laws in connection with a distribution
of common stock or upon exercise of an Option or SAR, the Participant or an
Eligible Director, as the case may be, may satisfy this obligation in whole or
in part by electing (the "Election") to have the Corporation withhold from the
distribution shares of common stock having a value equal to the amount required
to be withheld. The value of the shares to be withheld shall be based on the
Fair Market Value of the common stock on the date that the amount of tax to be
withheld shall be determined ("Tax Date").
(b) Each Election must be made prior to the Tax Date. The Committee may
disapprove of any Election, may suspend or terminate the right to make
Elections, or may provide with respect to any grant that the right to make
Elections shall not apply to such Grant. An Election is irrevocable.
(c) If a Participant is an officer of the Corporation within the meaning
of Section 16 of the Securities Exchange Act of 1934 or if the person making
the Election is an Eligible Director, then an Election is subject to the
following additional restrictions:
(1) No Election shall be effective for a Tax Date which occurs within
six months of the grant of the award, except that this limitation shall
not apply in the event Death or Disability of the Participant or the
Eligible Director, as the case may be, occurs prior to the expiration of
the six-month period.
(2) The Election must be made either six months prior to the Tax Date
or must be made during a period beginning on the third business day
following the date of release for publication of the Corporation's
quarterly or annual summary statements of sales and earnings and ending
on the twelfth business day following such date.
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SECTION 18. INDEMNIFICATION
Each person who is or shall have been a member of the Committee or of the
Board shall be indemnified and held harmless by the Corporation against and
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him in connection with or resulting from any claim,
action, suit, or proceeding to which he may be a party or in which he may be
involved by reason of any action taken or failure to act under the Plan and
against and from any and all amounts paid by him in settlement thereof, with
the Corporation's approval, or paid by him in satisfaction of any judgment in
any such action, suit, or proceeding against him, provided he shall give the
Corporation an opportunity, at its own expense, to handle and defend the same
before he undertakes to handle and defend it on his own behalf. The foregoing
right of indemnification shall not be exclusive of any other rights of
indemnification to which such persons may be entitled under the Corporation's
Articles of Incorporation or Code of Regulations, as a matter of law, or
otherwise, or any power that the Corporation may have to indemnify them or hold
them harmless.
SECTION 19. REQUIREMENTS OF LAW
19.1 REQUIREMENTS OF LAW. The granting of Options, Stock Appreciation
Rights, Restricted Stock, Performance Shares, or Performance Awards, and the
issuance of shares of Stock upon the exercise of an Option shall be subject to
all applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.
19.2 GOVERNING LAW. The Plan, and all agreements hereunder, shall be
construed in accordance with and be governed by the laws of the State of Ohio.
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<PAGE> 1
EXHIBIT 10(b)1
AGREEMENT FOR RESTRICTED STOCK AWARD
under the
BANC ONE CORPORATION 1989 STOCK INCENTIVE PLAN
THIS AGREEMENT FOR RESTRICTED STOCK AWARD (the "Agreement") is between BANC ONE
CORPORATION, an Ohio Corporation, located at 100 East Broad Street, Columbus,
Ohio 43271-0261 ("BANC ONE") and who, as of MAY 3, 1993, which is the date of
this Agreement, is an employee of BANC ONE or a subsidiary of BANC ONE (the
"Employee"):
WHEREAS:
BANC ONE's Board of Directors adopted the BANC ONE CORPORATION 1989 Stock
Incentive Plan (the "Plan") on January 19, 1989, BANC ONE's Shareholders
approved the Plan on April 18, 1989, and a committee of BANC ONE's Board of
Directors designated in the Plan (the "Committee") has awarded shares of BANC
ONE Common Stock ("BANC ONE Common") to the Employee subject to certain
restrictions, terms and conditions (the "Restricted Stock Award") and has
approved execution of this Agreement which sets forth the restrictions, terms
and conditions of said Restricted Stock Award:
AGREEMENT:
In consideration of the mutual obligations contained herein, it is hereby
agreed by and between Employee and BANC ONE as follows:
1. RESTRICTED STOCK AWARD. BANC ONE hereby makes a Restricted Stock Award
as of the date of this Agreement to Employee of () shares of BANC ONE
Common in consideration of services to be rendered.
2. RESTRICTIONS ON TRANSFER. The shares of BANC ONE Common so received by
Employee by virtue of the Restricted Stock Award and any additional
shares attributable thereto received by Employee as a result of any
stock dividend, stock split, recapitalization, merger, reorganization
or similar event (collectively, the "Restricted Stock") shall be
subject to the restrictions set forth herein and may not be sold,
assigned, transferred, pledged or otherwise encumbered during the
Period of Restriction as hereinafter defined, except as permitted in
this Agreement. Subject to and in accordance with the terms and
conditions of the Agreement, the Period of Restriction shall commence
as of the date of this Agreement and shall terminate with respect to
the shares of the Restricted Stock on a graduated basis so that the
restrictions shall terminate and vesting shall occur with respect to
one-third of the shares of the Restricted Stock on the fourth
anniversary of the date of this Agreement, one-third of the shares of
the Restricted Stock on the sixth anniversary of the date of this
Agreement, and one-third of the shares of the Restricted Stock on the
eighth anniversary of the date of the Agreement.
3. FORFEITURE AND PROVISIONS.
(a) TERMINATION OF EMPLOYMENT. In the event Employee's employment
with BANC ONE is terminated, because of Employee's initiative,
because of dismissal for cause by the BANC ONE employer, or
because of any other reason or circumstances other than death or
disability as described under Section 3(c), any shares of
Restricted Stock still subject to restrictions at the date of
said termination automatically shall be forfeited and returned
to BANC ONE, provided, however, the Committee, in its sole
discretion may, with respect to some or all of the awarded
shares not vested at the time of said termination,
<PAGE> 2
waive such forfeiture and/or reduce or otherwise modify the
restrictions, with such waiver, reduction, or other modification
being subject to such other conditions as the Committee deems
appropriate, provided further, that the Employee or his legal
representative shall in any event pay to the Employee's former
BANC ONE employer the income taxes as required by Section 7 of
this Agreement within ten (10) days of when the Period of
Restriction applicable to shares awarded hereunder expires.
(b) TERMINATION DEFINED. References to BANC ONE in this Section 3
include BANC ONE's subsidiaries. A transfer of Employee's
employment between subsidiaries of BANC ONE or between any
subsidiary and BANC ONE shall not be considered a termination of
employment for purposes of this Agreement.
(c) TERMINATION BY DEATH OR DISABILITY. In the event the employment
of Employee by BANC ONE is terminated by reason of death or
disability after one year from the date on which this restricted
stock award was granted, all restrictions shall lapse and
immediate vesting shall occur with respect to any shares of
Restricted Stock still subject to restrictions at the date of
such death or disability provided that at the time of such death
or disability Employee was not subject to Termination fur Cause.
For the purpose of this Agreement, the term "Disability" means
the Employee's continuing inability because of physical and/or
mental factors to perform satisfactorily his employment duties
fur BANC ONE as of the date on which the Committee determines
Employee to be disabled in such manner and the phrase
"Termination fur Cause" means termination for any act of
misconduct which materially affects BANC ONE, its customers or
clients in a negative manner or termination fur any act of
dishonesty or breach of trust.
4. STOCK CERTIFICATES.
(a) Upon award of the Restricted Stock to Employee, one or more stock
certificates which evidence such shares of Restricted Stock shall
be issued by BANC ONE for the benefit of Employee. Each such
stock certificate shall be deposited with and held by BANC ONE or
its agent. Such certificate for shares of BANC ONE Common
resulting from any stock dividend, recapitalization, merger,
reorganization, or similar event shall also be deposited with and
held by BANC ONE or its agent. All such stock certificates and
shares evidenced thereby shall be subject to the forfeiture
provisions, limitations on transferability, and all other
restrictions herein contained. Stock powers in connection with
the Restricted Stock shall be endorsed by Employee in blank in
such number as requested by BANC ONE and shall be deposited with
BANC ONE.
(b) All Stock certificates for shares of Restricted Stock issued
during the Period of Restriction shall bear the following legend:
THE SALE OR OTHER TRANSFER OF THIS CERTIFICATE OR SHARES OF STOCK
REPRESENTED BY THIS CERTIFICATE, WHETHER VOLUNTARY, INVOLUNTARY,
OR BY OPERATION OF LAW, IS SUBJECT TO CERTAIN RESTRICTIONS ON
TRANSFER AND OTHER TERMS AND CONDITIONS SET FORTH IN THE BANC ONE
CORPORATION 1989 STOCK INCENTIVE PLAN AND AN AGREEMENT FOR
RESTRICTED STOCK AWARD DATES , 19 . A COPY OF
SAID PLAN AND SAID AGREEMENT MAY BE OBTAINED FROM EXECUTIVE
COMPENSATION, 100 EAST BROAD STREET, COLUMBUS, OHIO 43271-0163.
<PAGE> 3
(c) With regard to any shares of Restricted Stock which cease to be
subject to restrictions pursuant to Section 2, BANC ONE shall,
within ten (10) days of the date such shares cease to be subject
to restrictions, transfer such shares free of all restrictions
set forth in the Plan and this Agreement to Employee or, in the
event of such Employee's death subsequent to expiration of the
Period of Restriction, to Employee's legal representative, heir,
or legatee, provided, however, that such right of transfer shall
be subject to the payment of income taxes as required by Section
7 of this Agreement and to compliance with the other terms and
conditions of this Agreement.
5. SHAREHOLDER'S RIGHTS. Subject to the terms of this Agreement, during
the Period of Restriction, Employee shall have, with respect to the
Restricted Stock, the right to vote and the right to receive cash
dividends paid on the shares of Restricted Stock received under this
Restricted Stock Award.
6. REGULATORY COMPLIANCE. The issue and sale of shares of Restricted Stock
shall be subject to full compliance with all then applicable
requirements of law and the requirements of any stock exchange upon
which BANC ONE Common may be listed.
7. WITHHOLDING OF TAX. Distribution of shares of BANC ONE Common shall be
subject to the payment of any taxes required by law to be withheld as
follows;
(a) Employee agrees that, in the event the award and receipt of the
Restricted Stock or the expiration of restrictions thereon
results in the Employee's realization of income which for
federal, state, or local income tax purposes is, in the opinion
of counsel for BANC ONE, subject to withholding of tax at the
source of Employee's employer, Employee will pay to such
Employee's employer an amount equal to such withholding tax (or
such employer on behalf of BANC ONE may withhold such amount
from Employee's salary or from dividends paid by BANC ONE on
shares of the Restricted Stock). When an Employee is required
to pay to BANC ONE an amount required to be withheld under
applicable income tax laws in connection with such a
distribution of shares of BANC ONE Common, Employee may satisfy
this obligation in whole or in part by electing (the "Election")
to have BANC ONE withhold from the distribution shares of BANC
ONE Common having a value equal to the amount required to be
withheld. The value of the shares to be withheld shall be based
on the Fair Market Value of BANC ONE Common on the date that the
amount of tax to be withheld shall be determined (the "Tax
Date").
(b) Each Election must be made prior to the Tax Date. The Committee
may disapprove of any Election and it may suspend or terminate
the right to make Elections. An Election is irrevocable.
(c) If Employee is an officer of BANC ONE within the meaning of
Section 16 of the Securities Exchange Act of 1934 then in order
for such Election to be effective the Election is subject to the
following additional restrictions:
(1) No Election shall be effective for a Tax Date which
occurs within six months of the grant of the Award,
except that this limitation shall not apply in the event
Death or Disability of Employee occurs prior to the
expiration of the six month period.
<PAGE> 4
(2) The Election must be made either six months prior to the
Tax Date or must be made during a period beginning on the
third business day following the date of release for
publication of BANC ONE's quarterly or annual summary
statements of earnings and ending on the twelfth business
day following such date.
(d) In the event Employee does not make an Election in accordance
with this Section and if within ten (10) days of the expiration
of the Period of Restriction, Employee or his legal
representative has not paid to Employee's BANC ONE Employer the
income taxes contemplated and required by this Section, BANC ONE
may, in its sole discretion, sell or cause to be sold such
portion of the shares awarded under and subject to this Agreement
so as to satisfy the required withholding tax in connection with
said shares. In no event shall Employee or his legal
representative be entitled to receive or to sell or to otherwise
assert any claim against any of the shares of the Restricted
Stock until such time as payment for said income taxes has been
made.
8. INVESTMENT REPRESENTATION. Employee represents and agrees that if
Employee is awarded and receives the Restricted Stock at a time when
there is not in effect under the Securities Act of 1933 a registration
statement relating to the shares and there is not available for delivery
a prospectus meeting the requirements of Section 10(a)(3) of said Act,
(i) Employee will accept and receive such shares for the purpose of
investment and not with a view of their resale or distribution, (ii)
that upon such award and receipt, Employee will furnish to BANC ONE an
investment letter in form and substance satisfactory to BANC ONE, (iii)
prior to selling or offering for sale any such shares, Employee will
furnish BANC ONE with an opinion of counsel satisfactory to it to the
effect that such sale may lawfully be made and will furnish it with such
certificates as to factual matters as it may lawfully be made and will
furnish it with such certificates as to factual matters as it may
reasonably request, and (iv) that certificates representing such shares
may be marked with an appropriate legend describing such conditions
precedent to sale or transfer.
9. FEDERAL INCOME TAX ELECTION. Employee hereby acknowledges receipt of
advise that, pursuant to current Federal income tax laws, (i) Employee
has 30 days in which to elect to be taxed in the current taxable year on
the fair market value of the Restricted Stock in accordance with the
provisions of Internal Revenue Code Section 83(b) and, (ii) if no such
election is made, the taxable event will occur upon expiration of
restrictions on transfer at termination of the Restricted Period and the
tax will be measured by the fair market value of the Restricted Stock on
the date of the taxable event.
10. GOVERNING LAW. This Agreement shall be governed by and interpreted in
accordance with the laws of the State of Ohio.
11. SUCCESSORS. The rights under this Agreement are personal to Employee
and are not transferable except in the event of Employee's death to the
Employee's legal representatives, heirs or legatees. This Agreement
shall inure to the benefit of and be binding upon BANC ONE and its
successors and assigns.
12. PLAN. It is understood and agreed that the Plan shall control in the
event there is any conflict between the Plan and this Agreement and on
such matters as are not contained in this Agreement. Employee
acknowledges receipt of a copy of the Plan, the provisions of which are
incorporated herein by reference and made a part of this Agreement.
<PAGE> 5
IN WITNESS WHEREOF, this Agreement for Restricted Stock Award has been executed
and dated by the parties hereto as of this 3rd day of May, 1993.
BANC ONE CORPORATION
By:
----------------------------- ---------------------------
Roman J. Gerber (Signature of Employee)
Plan Administrator
100 East Broad Street
Columbus, Ohio 43271-0261
I hereby direct that all cash dividends to which I am entitled on my shares of
Restricted Stock under the foregoing Agreement as well as all notices and other
written communications in connection herewith be mailed to me at the following
address:
---------------------------------
(Employee Street Address)
---------------------------------
(Employee City, State & Zip)
---------------------------------
(Employee Social Security Number)
---------------------------------
(Signature of Employee)
<PAGE> 1
EXHIBIT 10(b)2
STOCK OPTION AGREEMENT
for
NON-QUALIFIED STOCK OPTIONS
under the
BANC ONE CORPORATION 1989 STOCK INCENTIVE PLAN
Stock Option Agreement made as of the 3rd day of May, 1993, ("Agreement"),
between BANC ONE CORPORATION, an Ohio corporation, located at 100 East Broad
Street, Columbus, Ohio 43271-0261 ("BANC ONE") and, currently an employee of
BANC ONE or a subsidiary of BANC ONE ("Employee").
WHEREAS, the BANC ONE CORPORATION 1989 Stock Incentive Plan (the "Plan") was
adopted by BANC ONE's Board of Directors on January 19, 1989, and was approved
by BANC ONE's Shareholders on April 18, 1989, and a committee of the Board of
Directors of BANC ONE designated in the Plan (the "Committee") has approved
this option to purchase shares of BANC ONE Common Stuck (the "Option") subject
to terms and conditions of the Plan and this Agreement;
NOW, THEREFORE, in consideration of the premises, mutual covenants hereinafter
set forth, and other good and valuable consideration, BANC ONE and Employee
agree as follows:
1. NUMBER OF OPTION SHARES AND PURCHASE PRICE. On the 3rd day of May,
1993, BANC ONE granted to the Employee, as a matter of separate
inducement and agreement, and not in lieu of salary or any other
compensation for services, the Option to purchase an aggregate of ()
shares of BANC ONE's Common Stock, no par value, $5.00 stated value
(the Option Shares), on the terms and conditions hereinafter set forth,
at the purchase price of $55.625 per share (the Option Price).
2. INCORPORATION OF PLAN. It is understood and agreed that the Plan shall
control in the event there is any conflict between the Plan and this
Agreement and on such matters as are not contained in this Agreement.
Employee acknowledges receipt of a copy of the Plan, the provisions of
which are incorporated herein by reference and made a part of this
Agreement.
3. EXERCISE OF OPTION.
(a) VESTING. The Option, i.e., the right to purchase the Option
Shares under this Agreement, shall become an accrued right to
purchase only if the Employee has been continuously employed by
BANC ONE and/or one or more of its subsidiaries from the date of
the Agreement to the date on which vesting occurs. Such accrued
right to purchase the Option Shares under this Agreement shall
vest on the fifth anniversary of the date of this Agreement or
on the Employee"s retirement after the Employee's sixty-fifth
birthday, whichever first occurs, provided however, each
exercise of the Option shall involve the purchase of not less
than one hundred of the Option Shares except when any unused
accrued right to purchase applies to less than one hundred
shares. The number and price of shares subject to such accrued
right to purchase shall be adjusted, as necessary, pursuant to
the provisions of Section 7 of this Agreement. Notice of such
exercise of the Option shall be given to BANC ONE by the
Employee in accordance with Section 6 of this Agreement.
<PAGE> 2
(b) OPTION PRICE. The Option Price upon exercise of any Option which
is exercisable shall be paid to BANC ONE in full at the time of
such exercise and such payment may be (i) in cash or its
equivalent or (ii) by tendering shares of previously acquired
shares of BANC ONE Common Stock having a Fair Market Value at
the time of exercise equal to the total Option Price or (iii) by
a combination of (i) and (ii). Such shares shall be issued as
fully paid and nonassessable shares.
(c) EXPIRATION OF OPTION. Notwithstanding any other provision of
this Agreement, the Option to purchase Option Shares under this
Agreement shall not be exercisable more than twenty years and
one day from the date of this Agreement.
4. TRANSFER OF OPTION. The Option shall not be transferable by the
Employee other than by will, or, if the Employee dies intestate, by the
laws of descent and distribution of the state of such Employee's
domicile at the time of death. The Option shall be exercisable during
the lifetime of the Employee only by the Employee. The Option may not
be assigned or hypothecated. Any attempted assignment, transfer,
pledge, hypothecation, or other disposition of the Option contrary to
the provisions hereof, and the levy of any attachment or similar
process upon the Option, shall be null and void and without effect.
BANC ONE shall have the right to terminate the Option, in the event of
any such assignment, transfer, pledge, hypothecation, other disposition
of the Option, or levy of attachment or similar process, by notice to
that effect to the person then entitled to exercise the Option,
provided, however, that termination of the Option hereunder shall not
prejudice any rights or remedies which BANC ONE or a subsidiary of BANC
ONE may have under this Agreement or otherwise.
5. OPTION RIGHTS UPON EMPLOYMENT TERMINATION
(a) TERMINATION FOR SPECIFIC REASONS. In the event the employment
of the Employee by BANC ONE or a subsidiary of BANC ONE is
terminated for any reason, any outstanding Option granted
pursuant to the Plan and any rights thereunder shall be
exercisable by the Employee (or in case of a deceased Employee
by his legal representative) only to the extent of the accrued
right to exercise such Option at the date of such termination;
provided, however, if such termination is by reason of death or
disability or, with the prior consent of the Committee, by
reason of resignation or retirement under the BANC ONE
CORPORATION Retirement Plan, and if at the date of such
termination the Employee had completed twelve (12) full months
of employment after the date of the Option grant the Committee
may, in its sole discretion, permit the exercise of all or any
portion of the Option not otherwise exercisable and may provide
that all or some portion of the Option shall not terminate upon
or by virtue of such employment termination. To the extent that
such Option is exercisable at termination or, as a result of
Committee approval, becomes exercisable at termination by reason
of death or disability, it must be exercised prior to the
expiration date of the Option or within twelve (12) months and
five (5) days after such date of termination of employment,
whichever period is shorter. To the extent that such Option is
exercisable at termination by reason of retirement under the
BANC ONE CORPORATION Retirement Plan, it must be exercised
within a period equal to the earlier of the expiration date of
the Option or tive years after retirement with years of service
at or after age 55 subject to termination of the exercise period
if, after retirement, the holder is employed by a competitor.
<PAGE> 3
(b) TERMINATION FOR OTHER REASONS. If the employment of the Employee
by BANC ONE or a subsidiary of BANC ONE shall terminate for any
reason other than one of those specified on Section 5(a) of this
Agreement, the rights under any then outstanding Option granted
pursuant to the Plan which, pursuant to the terms of the
Agreement between the Employee and BANC ONE, is exercisable as of
the date of such termination, shall terminate upon the expiration
date of the Option (as provided in Section 3(c) of this
Agreement) or three months after such date of termination of
employment, whichever first occurs. In its sole discretion, the
Committee may extend the three months up to twelve (12) months
and five (5) days, but in no event beyond the expiration date of
the Option.
6. PROCEDURE FOR EXERCISE OF OPTION. Subject to the terms and conditions
of this Agreement, the Option shall be exercisable only in accordance
with the following:
(a) The Option shall be exercisable by written notice to BANC ONE
which shall:
(1) state the election to exercise the Option and the number
of shares in respect of which it is being exercised,
(2) be signed by the person exercising the Option and, in the
event that the Option is being exercised by any person
other than the Employee, be accompanied by proof,
satisfactory to counsel for BANC ONE, of the right of such
person to exercise the Option, and
(3) be accompanied in accordance with Section 3(b) of this
Agreement by a check payable to the order of BANC ONE
and/or shares of previously acquired shares of BANC ONE
Common Stock in an amount equal to the total Option Price
of the Option Shares in respect of which the Option is
being exercised. In the case of a cashless exercise
through Banc One Securities, notification to Banc One
Securities of the intent to do an immediate sale of the
stock acquired through the exercise of the Option will
replace the check and/or shares required to accompany the
statement of election to exercise the Option.
(b) For all purposes of this Agreement, the date of the exercise of
the Option with respect to any particular shares shall be the
date on which such notice, proof (if required), and check and/or
shares in payment, all shall have been received by BANC ONE by
registered mail or personal delivery to BANC ONE's office at 100
East Broad Street, 6th floor, Columbus, Ohio 43271-0163,
attention of Executive Compensation, or at such other place as
BANC ONE shall therefore have designated by notice.
(c) The certificate or certificates for the shares as to which the
Option shall have been so exercised shall be registered in the
name of the person so exercising the Option and shall be
delivered to or upon the written order of the person exercising
the Option as soon as practicable after receipt by BANC ONE of
such notice, proof (if required), check and/or shares in full
payment of the Option Price and, if applicable, a check in full
payment of the necessary tax withholding as required by the Plan.
<PAGE> 4
7. ADJUSTMENTS TO OPTION SHARES. In the event that subsequent to the date
of this Agreement, the shares should, as a result of a stock split,
stock dividend, combination or exchange of shares, exchange for other
securities, reclassification, reorganization, redesignation, merger,
consolidation, recapitalization or other such change, be increased or
decreased or changed into or exchanged for a different number of kind of
shares of stock or other securities of BANC ONE or of another
corporation, then:
(a) there shall automatically be substituted for each share subject
to an unexercised Option (in whole or in part) granted under the
Agreement the number and kind of shares of stock or other
securities into which each outstanding share shall be changed or
for which each such share shall be exchanged,
(b) the option price per share or unit of securities shall be
increased or decreased proportionately so that the aggregate
purchase price for the securities subject to the Option shall
remain the same as immediately prior to such event, and
(c) BANC ONE shall make such other adjustments to the securities
subject to options and provisions of the Plan and this Agreement
as may be appropriate and equitable. Any such adjustment may
provide for the elimination of fractional shares.
8. CONDITIONS FOR EXERCISE OF OPTION. No Option granted under this
Agreement may be exercised in whole or in part:
(a) Until the Option Shares reserved for issuance upon the exercise
of such Option have been listed on any stock exchange on which
the shares may be listed; and
(b) Unless the Option Shares being the subject of this Agreement
shall have been registered under the Securities Act of 1933 (the
"Act"), or if such registration is not required, unless the
Employee exercising the Option shall have furnished BANC ONE with
an opinion of counsel acceptable to BANC ONE confirming that such
registration is not required, BANC ONE may waive the presentation
of an opinion of counsel but may require a written statement
signed by the Employee containing investment representations
satisfactory to BANC ONE and an agreement to accept such
restrictions on transfer of the Option Shares as BANC ONE may
reasonably impose so long as such shares have not been currently
registered under the Act; and
(c) Until the Option Shares subject to this Agreement shall have been
registered under any applicable blue sky laws.
9. TAX WITHHOLDING. BANC ONE has the right to withhold from any payments
made under the Plan or to collect as a condition of payment, any taxes
required by law to be withheld. At any time when the Employee is required
to pay to BANC ONE an amount required to be withheld under applicable
income tax laws upon exercise of an Option, the Employee may satisfy this
obligation in whole or in part by electing (the "Election") to have BANC
ONE withhold from the distribution Option Shares having a value equal to
the amount required to be withheld. The value of the Option Shares to be
withheld shall be based on the Fair Market Value of BANC ONE's Common
Stock on the date that the amount of tax to be withheld shall be
determined. The Election shall be made in accordance with the provisions
of the Plan.
<PAGE> 5
10. NOTICES. Each notice relating to this Agreement shall be in writing and
delivered in person or by registered mail to BANC ONE at its office, 100
East Broad Street, 6th Floor, Columbus, Ohio 43271-0163, attention
Executive Compensation. All notices to the Employee or any other person
then entitled to exercise the Option shall be delivered to the Employee
or such other person at the Employee's address specified below.
11. DETERMINATIONS OF BANC ONE FINAL. Any dispute or disagreement which
shall arise under, as a result of, or in any way relate to the
interpretation of construction of this Agreement shall be determined by
the Board of Directors of BANC ONE or by a Committee appointed by the
Board Directors of BANC ONE (or any successor corporation) under the
Plan. Any such determination made hereunder shall be final, binding, and
conclusive for all purposes.
12. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon each successor and assign of BANC ONE. All
obligations imposed upon the Employee, and all rights granted to BANC
ONE, hereunder or as stipulated in the Plan shall be binding upon the
Employee's heirs, legal representatives, and successors.
13. OBLIGATIONS OF BANC ONE. The liability of BANC ONE under the Plan and
this Agreement and any sale made hereunder is limited to the obligations
set forth herein with respect to such sale and no term or provision of
the Plan or this Agreement shall be construed to impose any liability on
BANC ONE in favor of the Employee with respect to any loss, cost, or
expense which the Employee may incur in connection with or arising out
of any transaction in connection therewith. Nothing in the Plan or this
Agreement shall confer upon the Employee any right to continue in the
employ of BANC ONE or of any subsidiary of BANC ONE, to be entitled to
any remuneration or benefits not set forth in the Plan or this
Agreement, or to interfere with or limit the right of BANC ONE or any
subsidiary at BANC ONE to terminate the Employee's employment at any
time.
14. GOVERNING LAW. This Agreement shall be governed by the laws of the State
of Ohio.
15. ENTIRE AGREEMENT. This Agreement supersedes any other agreement,
whether written or oral, that may have been made or entered into by BANC
ONE and/or any of its subsidiaries and the Employee relating to grant of
options and/or the right to purchase shares of BANC ONE Common Stock.
This Agreement constitutes the entire agreement by the parties, and
there are no agreements or commitments except as set forth herein.
16. CAPTIONS; COUNTERPARTS. The captions in this Agreement are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provisions of this Agreement.
This Agreement may be executed in duplicate, each of which shall
constitute one and the same instrument.
<PAGE> 6
IN WITNESS WHEREOF, this Stock Option Agreement has been executed and dated by
the Parties hereto as of this 3rd day of May, 1993.
BANC ONE CORPORATION
By:
- --------------------------------- -------------------------------
(Employee Signature) Roman J. Gerber
Plan Administrator
- --------------------------------- 100 East Broad Street
(Employee Street Address) Columbus, Ohio 43271-0261
- ---------------------------------
(Employee City, State, & ZIP)
- ---------------------------------
(Employee Social Security Number)
<PAGE> 1
EXHIBIT 10(b)3
STOCK OPTION AGREEMENT
for
INCENTIVE STOCK OPTIONS
under the
BANC ONE CORPORATION 1989 STOCK INCENTIVE PLAN
Stock Option Agreement made as of the 3rd day of May, 1993, ("Agreement"),
between BANC ONE CORPORATION, an Ohio corporation located at 100 East Broad
Street, Columbus, Ohio 43271-0261 ("BANC ONE") and, currently an employee of
BANC ONE or a subsidiary of BANC ONE ("Employee").
WHEREAS, the BANC ONE CORPORATION 1989 Stock Incentive Plan (the "Plan") was
adopted by BANC ONE's Board of Directors on January 19, 1989, and was approved
by BANC ONE's Shareholders on April 18, 1989, and a committee of the Board of
Directors of BANC ONE designated in the Plan (the "Committee") has approved
this option to purchase shares of BANC ONE Common Stock (the "Option") subject
to terms and conditions of the Plan and this Agreement;
NOW, THEREFORE, in consideration of the premises, mutual covenants hereinafter
set forth, and other good and valuable consideration, BANC ONE and Employee
agree as follows:
1. NUMBER OF OPTION SHARES AND PURCHASE PRICE. On the 3rd day of May, 1993
BANC ONE granted to the Employee, as a matter of separate inducement
and agreement, and not in lieu of salary or any other compensation for
services, the Option to purchase an aggregate of () shares of BANC
ONE's Common Stock, no par value, $5.00 stated value (the Option
Shares), on the terms and conditions hereinafter set forth, at the
purchase price of $55.625 per share (the Option Price).
2. INCORPORATION OF PLAN. It is understood and agreed that the Plan shall
control in the event there is any conflict between the Plan and this
Agreement and on such matters as are not contained in this Agreement.
Employee acknowledges receipt of a copy of the Plan, the provisions of
which are incorporated herein by reference and made a part of this
Agreement.
3. EXERCISE OF OPTION.
(a) VESTING. The Option, i.e., the right to purchase the Option
Shares under this Agreement, shall become an accrued right to
purchase only if the Employee has been continuously employed by
BANC ONE and/or one or more of its subsidiaries from the date of
the Agreement to the date on which vesting occurs. Such accrued
right to purchase the Option Shares under this Agreement shall
vest on the fifth anniversary of the date of this Agreement or
on the Employee's retirement after the Employee's sixty-fifth
birthday, whichever first occurs, provided however, each
exercise of the Option shall involve the purchase of not less
than one hundred of the Option Shares except when any unused
accrued right to purchase applies to less than one hundred
shares. The number and price of shares subject to such accrued
right to purchase shall be adjusted, as necessary, pursuant to
the provisions of Section 8 of this Agreement. Notice of such
exercise of the Option shall be given to BANC ONE by the
Employee in accordance with Section 6 of this Agreement.
<PAGE> 2
(b) OPTION PRICE. The Option Price upon exercise of any Option
which is exercisable shall be paid to BANC ONE in full at the
time of such exercise and such payment may be (i) in cash or its
equivalent or (ii) by tendering shares of previously acquired
shares of BANC ONE Common Stock having a Fair Market Value at
the time of exercise equal to the total Option Price or (iii) by
a combination of (i) and (ii). Such shares shall be issued as
fully paid and nonassessable shares.
(c) EXPIRATION OF OPTION. Notwithstanding any other provision of
this Agreement, the Option to purchase Option Shares under this
Agreement shall not be exercisable more than ten years and one
day from the date of this Agreement.
4. TRANSFER OF OPTION. The Option shall not be transferable by the
Employee other than by will, or, if the Employee dies intestate, by the
laws of descent and distribution of the state of such Employee's
domicile at the time of death. The Option shall be exercisable during
the lifetime of the Employee only by the Employee. The Option may not
be assigned or hypothecated. Any attempted assignment, transfer,
pledge, hypothecation, or other disposition of the Option contrary to
the provisions hereof, and the levy of any attachment or similar
process upon the Option, shall be null and void and without effect.
BANC ONE shall have the right to terminate the Option, in the event of
any such assignment, transfer, pledge, hypothecation, other disposition
of the Option, or levy of attachment or similar process, by notice to
that effect to the person then entitled to exercise the Option,
provided, however, that termination of the Option hereunder shall not
prejudice any rights or remedies which BANC ONE or a subsidiary of BANC
ONE may have under this Agreement or otherwise.
5. OPTION RIGHTS UPON EMPLOYMENT TERMINATION
(a) TERMINATION FOR SPECIFIC REASONS. In the event the employment
of the Employee by BANC ONE or a subsidiary of BANC ONE is
terminated for any reason, any outstanding Option granted
pursuant to the Plan and any rights thereunder shall be
exercisable by the Employee (or in case of a deceased Employee
by his legal representative) only to the extent of the accrued
right to exercise such Option at the date of such termination;
provided, however, if such termination is by reason of death or
disability or, with the prior consent of the Committee, by
reason of resignation or retirement under the BANC ONE
CORPORATION Retirement Plan, and if at the date of such
termination the Employee had completed twelve (12) full months
of employment after the date of the Option grant the Committee
may, in its sole discretion, permit the exercise of all or any
portion of the Option not otherwise exercisable and may provide
that all or some portion of the Option shall not terminate upon
or by virtue of such employment termination. To the extent that
such Option is exercisable at termination or, as a result of
Committee approval, becomes exercisable at termination it must
be exercised prior to the expiration date of the Option or
within twelve (12) months and five (5) days after such date of
termination of employment, whichever period is shorter.
However, in the case of Incentive Stock Options, the favorable
tax treatment prescribed under Section 422A of the Code shall
not be available if such Option is not exercised within the
required statutory period as specified in Section 422A.
<PAGE> 3
(b) TERMINATION FOR OTHER REASONS. If the employment of the Employee
by BANC ONE or a subsidiary of BANC ONE shall terminate for any
reason other than one of those specified on Section 5(a) of this
Agreement, the rights under any then outstanding Option granted
pursuant to the Plan which, pursuant to the terms of the
Agreement between the Employee and BANC ONE, is exercisable as of
the date of such termination, shall terminate upon the expiration
date of the Option (as provided in Section 3(c) of this
Agreement) or three months after such date of termination of
employment, whichever first occurs. In its sole discretion, the
Committee may extend the three months up to twelve (12) months
and five (5) days, but in no event beyond the expiration date of
the Option.
6. PROCEDURE FOR EXERCISE OF OPTION. Subject to the terms and conditions
of this Agreement, the Option shall be exercisable only in accordance
with the following:
(a) The Option shall be exercisable by written notice to BANC ONE
which shall:
(1) state the election to exercise the Option and the number
of shares in respect of which it is being exercised,
(2) be signed by the person exercising the Option and, in the
event that the Option is being exercised by any person
other than the Employee, be accompanied by proof,
satisfactory to counsel for BANC ONE, of the right of such
person to exercise the Option, and
(3) be accompanied in accordance with Section 3(b) of this
Agreement by a check payable to the order of BANC ONE
and/or shares of previously acquired shares of BANC ONE
Common Stock in an amount equal to the total Option Price
of the Option Shares in respect of which the Option is
being exercised.
(b) For all purposes of this Agreement, the date of the exercise of
the Option with respect to any particular shares shall be the
date on which such notice, proof (if required), and check and/or
shares in payment, all shall have been received by BANC ONE by
registered mail or personal delivery to BANC ONE's office at 100
East Broad Street, 6th floor, Columbus, Ohio 43271-0163,
attention of Executive Compensation, or at such other place as
BANC ONE shall therefore have designated by notice.
(c) The certificate or certificates for the shares as to which the
Option shall have been so exercised shall be registered in the
name of the person so exercising the Option and shall be
delivered to or upon the written order of the person exercising
the Option as soon as practicable after receipt by BANC ONE of
such notice, proof (if required), check and/or shares in full
payment of the Option Price and, if applicable, a check in full
payment of the necessary tax withholding as required by the Plan.
7. HOLDING PERIOD FOR OPTION SHARES PURCHASED. The Employee agrees to make
no disposition of any shares of BANC ONE Common Stock acquired by the
exercise of the Option, or any part thereof, herein granted, within two
years from the date of this Agreement. The Employee further agrees not
to sell, assign, or transfer any shares acquired as a result of the
exercise of this Option, or any part thereof, until after such shares
have been held by the Employee for one year.
<PAGE> 4
8. ADJUSTMENTS TO OPTION SHARES. In the event that subsequent to the date
of this Agreement, the shares should, as a result of a stock split,
stock dividend, combination or exchange of shares, exchange for other
securities, reclassification, reorganization, redesignation, merger,
consolidation, recapitalization or other such change, be increased or
decreased or changed into or exchanged for a different number of kind of
shares of stock or other securities of BANC ONE or of another
corporation, then:
(a) there shall automatically be substituted for each share subject
to an unexercised Option (in whole or in part) granted under the
Agreement the number and kind of shares of stock or other
securities into which each outstanding share shall be changed or
for which each such share shall be exchanged,
(b) the option price per share or unit of securities shall be
increased or decreased proportionately so that the aggregate
purchase price for the securities subject to the Option shall
remain the same as immediately prior to such event, and
(c) BANC ONE shall make such other adjustments to the securities
subject to options and provisions of the Plan and this Agreement
as may be appropriate and equitable. Any such adjustment may
provide for the elimination of fractional shares.
9. CONDITIONS FOR EXERCISE OF OPTION. No Option granted under this
Agreement may be exercised in whole or in part:
(a) Until the Option Shares reserved for issuance upon the exercise
of such Option have been listed on any stock exchange on which
the shares may be listed; and
(b) Unless the Option Shares being the subject of this Agreement
shall have been registered under the Securities Act of 1933 (the
"Act"), or if such registration is not required, unless the
Employee exercising the Option shall have furnished BANC ONE
with an opinion of counsel acceptable to BANC ONE confirming
that such registration is not required, BANC ONE may waive the
presentation of an opinion of counsel but may require a written
statement signed by the Employee containing investment
representations satisfactory to BANC ONE and an agreement to
accept such restrictions on transfer of the Option Shares as
BANC ONE may reasonably impose so long as such shares have not
been currently registered under the Act; and
(c) Until the Option Shares subject to this Agreement shall have
been registered under any applicable blue sky laws.
10. TAX WITHHOLDING. BANC ONE has the right to withhold from any payments
made under the Plan or to collect as a condition of payment, any taxes
required by law to be withheld. At any time when the Employee is required
to pay to BANC ONE an amount required to be withheld under applicable
income tax laws upon exercise of an Option, the Employee may satisfy this
obligation in whole or in part by electing (the "Election") to have BANC
ONE withhold from the distribution Option Shares having a value equal to
the amount required to be withheld. The value of the Option Shares to be
withheld shall be based on the Fair Market Value of BANC ONE's Common
Stock on the date that the amount of tax to be withheld shall be
determined. The Election shall be made in accordance with the provisions
of the Plan.
<PAGE> 5
11. NOTICES. Each notice relating to this Agreement shall be in writing and
delivered in person or by registered mail to BANC ONE at its office, 100
East Broad Street, 6th Floor, Columbus, Ohio 43271-0163, attention
Executive Compensation. All notices to the Employee or any other person
then entitled to exercise the Option shall be delivered to the Employee
or such other person at the Employee's address specified below.
12. DETERMINATIONS OF BANC ONE FINAL. Any dispute or disagreement which
shall arise under, as a result of, or in any way relate to the
interpretation of construction of this Agreement shall be determined by
the Board of Directors of BANC ONE or by a Committee appointed by the
Board Directors of BANC ONE (or any successor corporation) under the
Plan. Any such determination made hereunder shall be final, binding, and
conclusive for all purposes.
13. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of
and be binding upon each successor and assign of BANC ONE. All
obligations imposed upon the Employee, and all rights granted to BANC
ONE, hereunder or as stipulated in the Plan shall be binding upon the
Employee's heirs, legal representatives, and successors.
14. OBLIGATIONS OF BANC ONE. The liability of BANC ONE under the Plan and
this Agreement and any sale made hereunder is limited to the obligations
set forth herein with respect to such sale and no term or provision of
the Plan or this Agreement shall be construed to impose any liability on
BANC ONE in favor of the Employee with respect to any loss, cost, or
expense which the Employee may incur in connection with or arising out
of any transaction in connection therewith. Nothing in the Plan or this
Agreement shall confer upon the Employee any right to continue in the
employ of BANC ONE or of any subsidiary of BANC ONE, to be entitled to
any remuneration or benefits not set forth in the Plan or this
Agreement, or to interfere with or limit the right of BANC ONE or any
subsidiary at BANC ONE to terminate the Employee's employment at any
time.
15. GOVERNING LAW. This Agreement shall be governed by the laws of the State
of Ohio.
16. ENTIRE AGREEMENT. This Agreement supersedes any other agreement,
whether written or oral, that may have been made or entered into by BANC
ONE and/or any of its subsidiaries and the Employee relating to grant of
options and/or the right to purchase shares of BANC ONE Common Stock.
This Agreement constitutes the entire agreement by the parties, and
there are no agreements or commitments except as set forth herein.
17. CAPTIONS; COUNTERPARTS. The captions in this Agreement are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provisions of this Agreement. This
Agreement may be executed in duplicate, each of which shall constitute
one and the same instrument.
<PAGE> 6
IN WITNESS WHEREOF, this Stock Option Agreement has been executed and dated by
the Parties hereto as of this 3rd day of May, 1993.
BANC ONE CORPORATION
____________________________________ By:________________________________
(Employee Signature) Roman J. Gerber
Plan Administrator
____________________________________ 100 East Broad Street
(Employee Street Address) Columbus, Ohio 43271-0261
____________________________________
(Employee City, State, & ZIP)
____________________________________
(Employee Social Security Number)
<PAGE> 1
EXHIBIT 10(c)
1993 KMIC
EXECUTIVE COMPENSATION PROGRAMS
1993 KEY MANAGEMENT
INCENTIVE COMPENSATION PLAN
AND ADMINISTRATIVE GUIDELINES
<PAGE> 2
(THIS PAGE INTENTIONALLY LEFT BLANK.)
<PAGE> 3
1993 KMIC
ESTABLISHMENT AND PURPOSE:
BANC ONE CORPORATION hereby establishes the "Key Management Incentive
Compensation Plan" (the Plan) for key employees of the CORPORATION, its State
Holding Companies, and its Affiliates.
The purpose of the Plan is to promote the interest of the CORPORATION and its
shareholders by strengthening its ability to attract and retain key management
talent and to motivate superior levels of performance.
PLAN ADMINISTRATION:
The Plan is administered by the Personnel and Compensation Committee of the
Board of Directors of BANC ONE CORPORATION. Its findings and determinations
regarding this plan are official and final.
ELIGIBILITY AND PARTICIPATION:
Participation in the Plan is limited to those officers and other key employees
who, by the nature and scope of their positions, are materially responsible for
the management, growth, and success of BANC ONE's businesses. Participation
may be revoked at any time by the Plan Administrator. An employee whose
participation is revoked will be notified, in writing, of such revocation as
soon as practicable following such action.
Participation in the Plan will be determined on an annual basis. The following
matrix should be used to determine the number of participants eligible in each
affiliate.
<TABLE>
MINIMUM ASSET SIZE ($millions)
<CAPTION>
100 200 300 400 500 900 2,000 4,000 5,000
---------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Number of
Participants 1-3 2-5 3-5 3-7 4-8 5-10 8-15 10-25 15-35
- -------------------------------------------------------------------------------
(See Specific Positions below)
</TABLE>
- 1 - JANUARY, 1993
<PAGE> 4
ELIGIBILITY AND PARTICIPATION (CONT'D):
SPECIFIC POSITIONS:
The following guidelines should be used in determining Plan participants.
___________________________________________________________
| |
| The following positions, if they exist within the banking |
| affiliate, may be included in the participant number, |
| provided the total number of participants does not exceed |
| the guideline established for the bank's asset size as |
| shown above: |
| |
| Chief Executive Officer |
| Chief Operating Officer |
| Chief Financial Officer |
| Chief Credit Officer |
| Head of Retail Banking |
| Head of Corporate Banking |
| General Counsel |
| |
| In non-banking affiliates, the following positions |
| should be included: |
| |
| Chief Executive Officer |
| Chief Financial Officer |
| Key direct reports |
| Heads of major functions |
| |
| Corporate staff units and state holding companies should |
| have the following positions as participants: |
| |
| Major state-wide function heads |
| Major corporate-wide function heads |
| Key direct reports responsible for major function |
| segments |
|___________________________________________________________|
Employees approved for participation will be notified of their selection within
a reasonable time after approval.
MID-YEAR PARTICIPATION MODIFICATIONS:
An individual who becomes eligible to participate in the Plan during the Plan
year may be recommended and approved for a partial year of participation. In
such case, the participant's award shall be prorated based on the number of
full months of participation. However, the BANC ONE Chief Executive Officer
(CEO), subject to Corporate Compensation Committee approval, may authorize an
unreduced award.
The participation of a KMIC participant whose incentive category level is
changed during the Plan Year will be pro-rated between the respective base pay
and target award levels of each assignment.
- 2 -
<PAGE> 5
1993 KMIC
EXECUTIVE COMPENSATION PROGRAMS
AWARD DETERMINATION
TARGET AWARD LEVEL:
Target Award levels are expressed in terms of a percentage of Base Pay. Base
Pay is the salary earned while participating in the Plan.
At the beginning of the Plan Year, Target Award levels will be established for
each participant. The Target Award opportunity will vary in relation to the
participant's duties and responsibilities. The 1993 Target Award level
guidelines are shown below.
<TABLE>
<CAPTION>
GRADE
------------------------------------------------------------------------
Position 12 13 14 15 16 17 18 19 20
- --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CEOs,
Corporate, 15-20% 20-25% 25-30% 25-30% 25-30% 30-35% 30-35% 35-40% 40%
state-wide
- --------------------------------------------------------------------------------------
Other
Positions 10-15% 10-25% 15-25% 20-25% 20-25% 25-30% 25-30% 30-35% 30-35%
- --------------------------------------------------------------------------------------
<FN>
Please Note: PARTICIPANTS WHO ARE NEW TO THEIR POSITIONS SHOULD PARTICIPATE AT THE
LOWER END OF THE RANGE FOR THEIR GRADE, THUS ALLOWING FOR GROWTH OF
OPPORTUNITY AS THEY ESTABLISH AND PROVE THEMSELVES IN THEIR ROLE OVER
TIME.
</TABLE>
MAXIMUM AWARD LEVEL:
The maximum amount payable under the Plan is defined as a percentage of the
Target Award. The 1993 Maximum Award level is 150% of the Target Award.
CORPORATE PERFORMANCE MEASURE:
An overall Corporate performance threshold will be established by the BANC ONE
CEO for each Plan Year. The Corporate Performance threshold for 1993 includes a
5% increase in earnings over 1992 and an ROA of 1.15. These performance
thresholds must be met by the CORPORATION prior to any incentive awards being
paid.
COMPONENT PERFORMANCE MEASURES:
At the beginning of each Plan Year, each holding company CEO will establish
planned levels of performance at which 100% of the target award will be earned.
These perfornnance objectives will refiect a combination of key results at each
organizational level (Corporate, State, and Affiliate) and discretionary
performance goals. The Compensation Committee shall approve these performance
goals and may modify them at any time. Significant unanticipated, non-recurring
gains or losses in income may be considered for inclusion or exclusion in the
award calculations, depending upon the extent to which they have materially
infiuenced the CORPORATION's ability to meet the performance goals.
- 3 - JANUARY, 1993
<PAGE> 6
AWARD DETERMINATION (CONT'D):
For 1993, the matrices for computing awards may vary by holding company and
affiliate. The specifics of each plan are included in the attachments to this
document.
PAYMENT OF AWARDS:
At the end of each Plan Year, awards will be computed for each participant.
Award amounts may vary above or below the Target Award level based on the
assessment of performance results at each organizational level. A payout limit
expressed in tenns of a flat percentage of Net Income may be determined for
each organizational level by the Corporate Compensation Committee each Plan
Year.
Payment of Awards will be made in cash, subject to applicable withholding, as
soon as practicable after year-end results are reviewed and individual awards
are approved. Each Plan participant may elect to defer his/her award for
distribution in cash on a later date subject to the provisions of the BANC ONE
Incentive Compensation Deferral Plan.
TERMINATION OF EMPLOYMENT:
In the event a participant's employment is terminated due to death or total and
permanent disability (as determined by the Corporate Compensation Committee),
the participant's award will be reduced to refiect the partial year of
participation. This reduction will be determined by multiplying the award by a
fraction, the numerator of which is the months of participation through the
date of termination rounded up to whole months and the denominator of which is
twelve (12). The participant's award will be paid as soon as practicable
following the end of the Plan Year.
ln the event a participant's employment is terminated for reasons other than
death or disability, all rights to an award for the Plan Year will be
forfeited.
GENERAL PROVISIONS
A) The Plan may be modified, amended, or terminated at any time by
the Board of Directors. The existence of the Plan does not obligate
or bind BANC ONE CORPORATION or its affiliates to pay an award to any
participant (or beneficiary) nor does any participant (or beneficiary)
attain any vested, non-forfeitable right to an award until the award
has been finalized and approved for payment by the Board of Directors.
B) Any and all payments made under the Plan shall be subject to
applicable federal, state, or local taxes required by the law to be
withheld.
C) Amounts paid under this Plan will not be considered
compensation for purposes of other BANC ONE qualified benefit plans
unless specifically provided for in such plans. The treatment of these
amounts under any non-qualified benefit plans will be determined
according to the provisions of such plans.
-4-
<PAGE> 7
1993 KMIC
EXECUTIVE COMPENSATION PROGRAMS
GENERAL PROVISIONS (CONT'D):
D) If a participant has been designated as eligible to participate
in the BANC ONE lncentive Compensation Deferral Plan, an award or
portion thereof granted under the Plan may be deferred pursuant to the
terms of that plan, provided a timely deferral election is made by the
participant.
E) Except as specifically provided herein or as may otherwise be
required by law, no undistributed bonus amount payable to the
participant im the Plan may be sold, transferred, or assign or
encumbered, im whole or in part, by a participant, and any attempt to
so alienate or subject any such amount shall be void.
- 5 - JANUARY, 1993
<PAGE> 8
(This page intentionally left blank.)
- 6 -
<PAGE> 9
1993 KMIC
EXECUTIVE COMPENSATION PROGRAMS
BANC ONE CORPORATION PERFORMANCE CRITERIA
Holding Company CEOs
For policy committee-level holding company CEOs, 25% of the total performance
score will be based upon performance of the total CORPORATION, as determined by
Earnings Growth over 1992 and Return on Assets (ROA). The matrix shown below
shows the relationship between these two variables, and the percentage of the
25% that may be eamed as a result of the performance of the CORPORATION.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5% | 54% 58% 62% 66% 70% 78% 86% 94% 101% 104% 107% 110% 114% 117% 120% 123% 126% 130%
E 6% | 60% 64% 68% 72% 76% 84% 92% 100% 103% 106% 110% 113% 116% 119% 122% 126% 129% 132%
A 7% | 66% 70% 74% 78% 82% 90% 98% 102% 106% 109% 112% 115% 118% 122% 125% 128% 131% 134%
R 8% | 72% 76% 80% 84% 88% 96% 100% 105% 108% 111% 114% 118% 121% 124% 127% 130% 134% 137%
N 9% | 78% 82% 86% 90% 94% 101% 104% 107% 110% 114% 117% 120% 123% 126% 130% 133% 136% 139%
I 10% | 84% 88% 92% 96% 100% 103% 106% 110% 113% 116% 119% 122% 126% 129% 132% 135% 138% 142%
N 11% | 90% 94% 98% 101% 105% 108% 111% 114% 118% 121% 124% 127% 130% 134% 137% 140% 143% 146%
G 12% | 96% 100% 102% 103% 110% 113% 116% 119% 122% 126% 129% 132% 135% 138% 142% 145% 148% 150%
S 13% | 101% 102% 104% 106% 114% 118% 121% 124% 127% 130% 134% 137% 140% 143% 146% 150% 150% 150%
14% | 103% 105% 106% 108% 119% 122% 126% 129% 132% 135% 138% 142% 145% 148% 150% 150% 150% 150%
G 15% | 106% 107% 109% 110% 124% 127% 130% 134% 137% 140% 143% 146% 150% 150% 150% 150% 150% 150%
R 16% | 108% 110% 111% 113% 129% 132% 135% 138% 142% 145% 148% 150% 150% 150% 150% 150% 150% 150%
O 17% | 110% 116% 114% 115% 134% 137% 140% 143% 146% 150% 150% 150% 150% 150% 150% 150% 150% 150%
W 18% | 113% 122% 116% 118% 138% 142% 145% 148% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
T 19% | 115% 128% 118% 120% 143% 146% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
H 20% | 118% 134$ 121% 122% 148% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
|_________________________________________________________________________________________________________________________
1.15 1.20 1.25 1.30 1.35 1.40 1.45 1.50 1.55 1.60 1.65 1.70 1.75 1.80 1.85 1.90 1.95 2.00
ROA
</TABLE>
Fifty-six percent (56%) of the award will be based upon the overall performamce
of the holding company. A matrix such as the one shown above has been developed
for use in each holdimg company.
The remaining 19% of the award calculation for these participants will be based
upon individual performance as measured at management's discretion.
- 7 - JANUARY, 1993
<PAGE> 10
<TABLE>
EXAMPLE
<S> <C> <C>
- -------------------------------------
Base Pay: $250,000
- -------------------------------------------------------------------------------
Target Award: $125,000.00 (50% of Base Pay)
- -------------------------------------------------------------------------------
Award Opportunity: 25% BANC ONE CORPORATION Performane
56% Holding Company Performance
15% Individual Performance (Discretionary)
- -------------------------------------------------------------------------------
AWARD CALCULATION:
- -------------------------------------------------------------------------------
(1) Corporation Holding Co.
- -----------------------------------------------------
Earnings
Growth 14% 11%
------------------------------------------------
ROA 1.55% 1.50%
------------------------------------------------
Score from
Matrix 132% 114%
- -------------------------------------------------------------------------------
(2) WEIGHTED SCORES:
- -------------------------------------------------------------------------------
Score x Weighting = Result
--------------------------------------------------------------------------
Corporate 132% x 25% = 33.00%
--------------------------------------------------------------------------
Holding Co. 114% x 56% = 63.84%
--------------------------------------------------------------------------
Individual 100% x 19% = 19.00%
--------------------------------------------------------------------------
TOTAL 115.84%
- -------------------------------------------------------------------------------
(3) FINAL AWARD CALCULATION:
- -------------------------------------------------------------------------------
Target $125,000.00
-----------------------------------
Wtd Score x 115.84%
-----------------------------------
Award $144,800.00
-----------------------------------
</TABLE>
- 8 -
<PAGE> 11
1993 KMIC
EXECUTIVE COMPENSATION PROGRAMS
BANC ONE CORPORATION PERFORMANCE CRITERIA
Corporate Level Staff Participants
For corporate level staff participants (i.e., those who are part of the BANC
ONE CORPORATION holding company) 75% of the total performance score will be
based upon performance of the total CORPORATION, as determined by Earnings
Growth over 1992 and Return on Assets (ROA). The matrix shown below shows the
relationship between these two variables, and the percentage of the 75% that
may be earned as a result of the performance of the CORPORATION.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5% | 54% 58% 62% 66% 70% 78% 86% 94% 101% 104% 107% 110% 114% 117% 120% 123% 126% 130%
E 6% | 60% 64% 68% 72% 76% 84% 92% 100% 103% 106% 110% 113% 116% 119% 122% 126% 129% 132%
A 7% | 66% 70% 74% 78% 82% 90% 98% 102% 106% 109% 112% 115% 118% 122% 125% 128% 131% 134%
R 8% | 72% 76% 80% 84% 88% 96% 100% 105% 108% 111% 114% 118% 121% 124% 127% 130% 134% 137%
N 9% | 78% 82% 86% 90% 94% 101% 104% 107% 110% 114% 117% 120% 123% 126% 130% 133% 136% 139%
I 10% | 84% 88% 92% 96% 100% 103% 106% 110% 113% 116% 119% 122% 126% 129% 132% 135% 138% 142%
N 11% | 90% 94% 98% 101% 105% 108% 111% 114% 118% 121% 124% 127% 130% 134% 137% 140% 143% 146%
G 12% | 96% 100% 102% 103% 110% 113% 116% 119% 122% 126% 129% 132% 135% 138% 142% 145% 148% 150%
S 13% | 101% 102% 104% 106% 114% 118% 121% 124% 127% 130% 134% 137% 140% 143% 146% 150% 150% 150%
14% | 103% 105% 106% 108% 119% 122% 126% 129% 132% 135% 138% 142% 145% 148% 150% 150% 150% 150%
G 15% | 106% 107% 109% 110% 124% 127% 130% 134% 137% 140% 143% 146% 150% 150% 150% 150% 150% 150%
R 16% | 108% 110% 111% 113% 129% 132% 135% 138% 142% 145% 148% 150% 150% 150% 150% 150% 150% 150%
O 17% | 110% 116% 114% 115% 134% 137% 140% 143% 146% 150% 150% 150% 150% 150% 150% 150% 150% 150%
W 18% | 113% 122% 116% 118% 138% 142% 145% 148% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
T 19% | 115% 128% 118% 120% 143% 146% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
H 20% | 118% 134$ 121% 122% 148% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
|_________________________________________________________________________________________________________________________
1.15 1.20 1.25 1.30 1.35 1.40 1.45 1.50 1.55 1.60 1.65 1.70 1.75 1.80 1.85 1.90 1.95 2.00
ROA
</TABLE>
The remaining 25% of the award calculation for these participants will be based
upon individual performance as measured at management's discretion.
- 9 - JANUARY, 1993
<PAGE> 12
<TABLE>
EXAMPLE
<S> <C> <C>
- -------------------------------------
Base Pay: $200,000
- -------------------------------------------------------------------------------
Target Award: $100,000 (50% of Base Pay)
- -------------------------------------------------------------------------------
Award Opportunity: 75% BANC ONE CORPORATION Performane
25% Individual Performance (Discretionary)
- -------------------------------------------------------------------------------
AWARD CALCULATION:
- -------------------------------------------------------------------------------
(1) Corporation
- ---------------------------------
Earnings
Growth 14%
----------------------------
ROA 1.55%
----------------------------
Score from
Matrix 132%
- -------------------------------------------------------------------------------
(2) WEIGHTED SCORES:
- -------------------------------------------------------------------------------
Score x Weighting = Result
--------------------------------------------------------------------------
Corporate 132% x 75% = 99.0%
--------------------------------------------------------------------------
Individual 120% x 25% = 30.0%
--------------------------------------------------------------------------
TOTAL 129.0%
- -------------------------------------------------------------------------------
(3) FINAL AWARD CALCULATION:
- -------------------------------------------------------------------------------
Target $100,000
-----------------------------------
Wtd Score x 129.0%
-----------------------------------
Award $129,000
-----------------------------------
</TABLE>
- 10 -
<PAGE> 13
1993 KMIC
EXECUTIVE COMPENSATION PROGRAMS
Banc One Ohio Corporation
Performance Criteria
STATE/AFFILIATE PERFORMANCE:
For KMIC participants in Ohio, a portion of the total performance score will be
based upon performance of the state holding company and the performance of the
individual affiliate to which they belong. This measurement will be a
composite of Eamings Growth over 1992 and Return on Assets (ROA). The matrix
shown below shows the relationship between these two variables as they apply to
the holding company and the affiliate, respectively. No performance score for
the State or Affiliate criteria will be awarded if Earnings Growth does not
reach at least 5% AND ROA reaches at least 1.15%.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5% | 54% 58% 62% 66% 70% 78% 86% 94% 101% 104% 107% 110% 114% 117% 120% 123% 126% 130%
E 6% | 60% 64% 68% 72% 76% 84% 92% 100% 103% 106% 110% 113% 116% 119% 122% 126% 129% 132%
A 7% | 66% 70% 74% 78% 82% 90% 98% 102% 106% 109% 112% 115% 118% 122% 125% 128% 131% 134%
R 8% | 72% 76% 80% 84% 88% 96% 100% 105% 108% 111% 114% 118% 121% 124% 127% 130% 134% 137%
N 9% | 78% 82% 86% 90% 94% 101% 104% 107% 110% 114% 117% 120% 123% 126% 130% 133% 136% 139%
I 10% | 84% 88% 92% 96% 100% 103% 106% 110% 113% 116% 119% 122% 126% 129% 132% 135% 138% 142%
N 11% | 90% 94% 98% 101% 105% 108% 111% 114% 118% 121% 124% 127% 130% 134% 137% 140% 143% 146%
G 12% | 96% 100% 102% 103% 110% 113% 116% 119% 122% 126% 129% 132% 135% 138% 142% 145% 148% 150%
S 13% | 101% 102% 104% 106% 114% 118% 121% 124% 127% 130% 134% 137% 140% 143% 146% 150% 150% 150%
14% | 103% 105% 106% 108% 119% 122% 126% 129% 132% 135% 138% 142% 145% 148% 150% 150% 150% 150%
G 15% | 106% 107% 109% 110% 124% 127% 130% 134% 137% 140% 143% 146% 150% 150% 150% 150% 150% 150%
R 16% | 108% 110% 111% 113% 129% 132% 135% 138% 142% 145% 148% 150% 150% 150% 150% 150% 150% 150%
O 17% | 110% 116% 114% 115% 134% 137% 140% 143% 146% 150% 150% 150% 150% 150% 150% 150% 150% 150%
W 18% | 113% 122% 116% 118% 138% 142% 145% 148% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
T 19% | 115% 128% 118% 120% 143% 146% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
H 20% | 118% 134$ 121% 122% 148% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
|_________________________________________________________________________________________________________________________
1.15 1.20 1.25 1.30 1.35 1.40 1.45 1.50 1.55 1.60 1.65 1.70 1.75 1.80 1.85 1.90 1.95 2.00
ROA
</TABLE>
DIVISIONAL PERFORMANCE:
For non-CEO participants, a measurement of Division Performance may be
implemented. Scoring for this measurement is developed by the upstream
CEO/President based on divisional goals or budgets.
- 7 - JANUARY, 1993
<PAGE> 14
NIE/REVENUE %:
The performance score for the NIE/Revenue percentage will be determined using
the following NIE/Revenue table. The NIE/Revenue ratio must be less than 60%
to qualify for a score.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NIE/Revenue % 60% 59% 58% 57% 56% 55% 54% 53% 52% 51% 50%
Score 0% 15% 30% 45% 60% 75% 90% 105% 120% 135% 150%
</TABLE>
CREDIT QUALITY:
The performance score for the Credit Quality criteria will be determined using
the following table. The Credit Quality performance score is based on 1)
achieving BANC ONE CORPORATION standards of 50 basis points or less for
commercial charge-offs and 100 basis points or less for retail charge-offs; or
2) showing improvement in the following four credit quality categories: problem
loans, non-performing loans, total delinquencies, and total charge-offs.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Retail Charge-offs (bp) 120.0 116.0 112.0 108.0 104.0 100.0 87.5 75.0 62.5 50.0
Score 0.0 20.0 40.0 60.0 80.0 100.0 112.5 125.0 137.5 150.0
Commercial Charge-offs (bp) 60.0 58.0 56.0 54.0 52.0 50.0 45.0 40.0 35.0 30.0
Score 0.0 20.0 40.0 60.0 80.0 100.0 112.5 125.0 137.5 150.0
</TABLE>
DISCRETIONARY:
The performance score for individual performance will be at the discretion of
the upstream CEO and should consider personal contributions and such issues as
audit, loan review, and CRA review.
- 8 -
<PAGE> 15
1993 KMIC
EXECUTIVE COMPENSATION PROGRAMS
Banc One Ohio Corporation
Weighting Guidelines
In order to calculate a weighted performance score, a weighting factor must be
assigned to each of the performance criteria outlined in the preceding pages.
The weightings for participants are shown in the table below:
<TABLE>
<CAPTION>
Performance Category CEO/President Non-
Weightings CEO/President
Weightings
-----------------------------------------------------------------
<S> <C> <C>
State Earnings/ROA 15% 5 - 15%
Affiliate Earnings/ROA 35% 15 - 45%
Divisional Performance N/A 0 - 30%
NIE/Revenue Ratio 13% 0 - 13%
Credit Quality 17% 0 - 17%
Individual (Discretionary) 20% 20 - 50%
=================================================================
Total 100% 100%
</TABLE>
Additional guidelines for non-CEO/President participants include:
/ / The total weighting of the State, Affiliate, and Divisional
performance categories should equal 50%. The upstream CEO/President
determines these weightings in accordance with overall goals and
objectives.
/ / The remaining 50% weightimg should be allocated to each
applicable category. Total weightings may never exceed 100%.
- 9 - JANUARY, 1993
<PAGE> 16
<TABLE>
EXAMPLE
<S> <C> <C>
- -------------------------------------
Base Pay: $100,000
- -------------------------------------------------------------------------------
Target Award: $30,000 (30% of Base Pay)
- -------------------------------------------------------------------------------
Award Opportunity: 15% State Earnings/ROA
(Weightings) 35% Affiliate Earnings/ROA
13% Affiliate NIE/Revenue
17% Credit Quality
20% Individual Performance (Discretionary)
- -------------------------------------------------------------------------------
AWARD CALCULATION:
- -------------------------------------------------------------------------------
(1) STATE/AFFILIATE SCORES:
- -------------------------------------------------------------------------------
Category State Affiliate
- -----------------------------------------------------
Earnings
Growth 11% 7%
------------------------------------------------
ROA 1.50% 1.60%
------------------------------------------------
Score from
Matrix 114% 109%
- -------------------------------------------------------------------------------
(2) WEIGHTED SCORES:
- -------------------------------------------------------------------------------
Score x Weighting = Result
--------------------------------------------------------------------------
State 114% x 15% = 17.10%
--------------------------------------------------------------------------
Affiliate 109% x 35% = 38.15%
--------------------------------------------------------------------------
NIE/Revenue 75% x 13% = 9.75%
--------------------------------------------------------------------------
Credit Quality 75% x 17% = 12.75%
--------------------------------------------------------------------------
Individual 100% x 20% = 20.00%
--------------------------------------------------------------------------
TOTAL 97.75
- -------------------------------------------------------------------------------
(3) FINAL AWARD CALCULATION:
- -------------------------------------------------------------------------------
Target $30,000
-----------------------------------
Wtd Score x 97.75%
-----------------------------------
Award $29,325
-----------------------------------
</TABLE>
- 10 -
<PAGE> 17
1993 KMIC
EXECUTIVE COMPENSATION PROGRAMS
Banc One Wisconsin Corporation
Performance Criteria
STATE/AFFILIATE PERFORMANCE:
For KMIC participants in Wisconsin, a portion of the total performance score
will be based upon performance of the state holding company and the performance
of the individual affiliate to which they belong. This measurement will be a
composite of Eannings Growth over 1992 and Return on Assets (ROA). The matrix
shown below shows the relationship between these two variables as they apply to
the holding company and the affiliate, respectively. No performance score for
the State or Affiliate criteria will be awarded if Earnings Growth does not
reach at least 5% AND ROA reaches at least 1.15%.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5% | 54% 58% 62% 66% 70% 78% 86% 94% 101% 104% 107% 110% 114% 117% 120% 123% 126% 130%
E 6% | 60% 64% 68% 72% 76% 84% 92% 100% 103% 106% 110% 113% 116% 119% 122% 126% 129% 132%
A 7% | 66% 70% 74% 78% 82% 90% 98% 102% 106% 109% 112% 115% 118% 122% 125% 128% 131% 134%
R 8% | 72% 76% 80% 84% 88% 96% 100% 105% 108% 111% 114% 118% 121% 124% 127% 130% 134% 137%
N 9% | 78% 82% 86% 90% 94% 101% 104% 107% 110% 114% 117% 120% 123% 126% 130% 133% 136% 139%
I 10% | 84% 88% 92% 96% 100% 103% 106% 110% 113% 116% 119% 122% 126% 129% 132% 135% 138% 142%
N 11% | 90% 94% 98% 101% 105% 108% 111% 114% 118% 121% 124% 127% 130% 134% 137% 140% 143% 146%
G 12% | 96% 100% 102% 103% 110% 113% 116% 119% 122% 126% 129% 132% 135% 138% 142% 145% 148% 150%
S 13% | 101% 102% 104% 106% 114% 118% 121% 124% 127% 130% 134% 137% 140% 143% 146% 150% 150% 150%
14% | 103% 105% 106% 108% 119% 122% 126% 129% 132% 135% 138% 142% 145% 148% 150% 150% 150% 150%
G 15% | 106% 107% 109% 110% 124% 127% 130% 134% 137% 140% 143% 146% 150% 150% 150% 150% 150% 150%
R 16% | 108% 110% 111% 113% 129% 132% 135% 138% 142% 145% 148% 150% 150% 150% 150% 150% 150% 150%
O 17% | 110% 116% 114% 115% 134% 137% 140% 143% 146% 150% 150% 150% 150% 150% 150% 150% 150% 150%
W 18% | 113% 122% 116% 118% 138% 142% 145% 148% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
T 19% | 115% 128% 118% 120% 143% 146% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
H 20% | 118% 134$ 121% 122% 148% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
|_________________________________________________________________________________________________________________________
1.15 1.20 1.25 1.30 1.35 1.40 1.45 1.50 1.55 1.60 1.65 1.70 1.75 1.80 1.85 1.90 1.95 2.00
ROA
</TABLE>
DIVISIONAL PERFORMANCE:
For non-CEO participants, a measurement of Division Performance may be
implemented. Scoring for this measurement is developed by the upstream
CEO/President based on divisional goals or budgets.
- 7 - JANUARY, 1993
<PAGE> 18
NIE/REVENUE %:
The performance score for the NlE/Revenue percentage will be determined using
the following NIE/Revenue table. The NIE/Revenue ratio must be less than 60%
to qualify for a score.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NIE/Revenue % 60% 59% 58% 57% 56% 55% 54% 53% 52% 51% 50%
Score 0% 15% 30% 45% 60% 75% 90% 105% 120% 135% 150%
</TABLE>
CREDIT QUALITY:
The performance score for the Credit Quality criteria will be determined using
the following table. The Credit Quality performance score is based on 1)
achieving BANC ONE CORPORATION standards of 50 basis points or less for
commercial charge-offs and 100 basis points or less for retail charge-offs; or
2) showing improvement in the following four credit quality categories: problem
loans, non-performing loans, total delinquencies, and total charge-offs.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Retail Charge-offs (bp) 120.0 116.0 112.0 108.0 104.0 100.0 87.5 75.0 62.5 50.0
Score 0.0 20.0 40.0 60.0 80.0 100.0 112.5 125.0 137.5 150.0
Commercial Charge-offs (bp) 60.0 58.0 56.0 54.0 52.0 50.0 45.0 40.0 35.0 30.0
Score 0.0 20.0 40.0 60.0 80.0 100.0 112.5 125.0 137.5 150.0
</TABLE>
DISCRETIONARY:
The performance score for individual performance will be at the discretion of
the upstream CEO and should consider personal contributions and such issues as
audit, loan review, and CRA review.
- 8 -
<PAGE> 19
1993 KMIC
EXECUTIVE COMPENSATION PROGRAMS
Banc One Wisconsin Corporation
Weighting Guidelines
In order to calculate a weighted performance score, a weighting factor must be
assigned to each of the performance criteria outlined in the preceding pages.
The weightings for participants are shown in the table below:
<TABLE>
<CAPTION>
Performance Category CEO/President Non-
Weightings CEO/President
Weightings
-----------------------------------------------------------------
<S> <C> <C>
State Earnings/ROA 15% 5 - 15%
Affiliate Earnings/ROA 35% 15 - 45%
Divisional Performance N/A 0 - 30%
NIE/Revenue Ratio 13% 0 - 13%
Credit Quality 17% 0 - 17%
Individual (Discretionary) 20% 20 - 50%
=================================================================
Total 100% 100%
</TABLE>
Additional guidelines for non-CEO/President participants include:
/ / The total weighting of the State, Affiliate, and Divisional
performance categories should equal 50%. The upstream CEO/President
determines these weightings in accordance with overall goals and
objectives.
/ / The remaining 50% weightimg should be allocated to each
applicable category. Total weightings may never exceed 100%.
- 9 - JANUARY, 1993
<PAGE> 20
<TABLE>
EXAMPLE
<S> <C> <C>
- -------------------------------------
Base Pay: $100,000
- -------------------------------------------------------------------------------
Target Award: $30,000 (30% of Base Pay)
- -------------------------------------------------------------------------------
Award Opportunity: 15% State Earnings/ROA
(Weightings) 35% Affiliate Earnings/ROA
13% Affiliate NIE/Revenue
17% Credit Quality
20% Individual Performance (Discretionary)
- -------------------------------------------------------------------------------
AWARD CALCULATION:
- -------------------------------------------------------------------------------
(1) STATE/AFFILIATE SCORES:
- -------------------------------------------------------------------------------
Category State Affiliate
- -----------------------------------------------------
Earnings
Growth 11% 7%
------------------------------------------------
ROA 1.50% 1.60%
------------------------------------------------
Score from
Matrix 114% 109%
- -------------------------------------------------------------------------------
(2) WEIGHTED SCORES:
- -------------------------------------------------------------------------------
Score x Weighting = Result
--------------------------------------------------------------------------
State 114% x 15% = 17.10%
--------------------------------------------------------------------------
Affiliate 109% x 35% = 38.15%
--------------------------------------------------------------------------
NIE/Revenue 75% x 13% = 9.75%
--------------------------------------------------------------------------
Credit Quality 75% x 17% = 12.75%
--------------------------------------------------------------------------
Individual 100% x 20% = 20.00%
--------------------------------------------------------------------------
TOTAL 97.75%
- -------------------------------------------------------------------------------
(3) FINAL AWARD CALCULATION:
- -------------------------------------------------------------------------------
Target $30,000
-----------------------------------
Wtd Score x 97.75%
-----------------------------------
Award $29,325
-----------------------------------
</TABLE>
- 10 -
<PAGE> 21
1993 KMIC
EXECUTIVE COMPENSATION PROGRAMS
Banc One Indiana Corporation
Performance Criteria
STATE/AFFILIATE PERFORMANCE:
For KMIC participants in Indiana, a portion of the total performance score will
be based upon performance of the state holding company and the performance of
the individual affiliate to which they belong. This measurement will be a
composite of Eannings Growth over 1992 and Return on Assets (ROA). The matrix
shown below shows the relationship between these two variables as they apply to
the holding company and the affiliate, respectively. No performance score for
the State or Affiliate criteria will be awarded if Earnings Growth does not
reach at least 5% AND ROA reaches at least 1. 15%.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5% | 54% 58% 62% 66% 70% 78% 86% 94% 101% 104% 107% 110% 114% 117% 120% 123% 126% 130%
E 6% | 60% 64% 68% 72% 76% 84% 92% 100% 103% 106% 110% 113% 116% 119% 122% 126% 129% 132%
A 7% | 66% 70% 74% 78% 82% 90% 98% 102% 106% 109% 112% 115% 118% 122% 125% 128% 131% 134%
R 8% | 72% 76% 80% 84% 88% 96% 100% 105% 108% 111% 114% 118% 121% 124% 127% 130% 134% 137%
N 9% | 78% 82% 86% 90% 94% 101% 104% 107% 110% 114% 117% 120% 123% 126% 130% 133% 136% 139%
I 10% | 84% 88% 92% 96% 100% 103% 106% 110% 113% 116% 119% 122% 126% 129% 132% 135% 138% 142%
N 11% | 90% 94% 98% 101% 105% 108% 111% 114% 118% 121% 124% 127% 130% 134% 137% 140% 143% 146%
G 12% | 96% 100% 102% 103% 110% 113% 116% 119% 122% 126% 129% 132% 135% 138% 142% 145% 148% 150%
S 13% | 101% 102% 104% 106% 114% 118% 121% 124% 127% 130% 134% 137% 140% 143% 146% 150% 150% 150%
14% | 103% 105% 106% 108% 119% 122% 126% 129% 132% 135% 138% 142% 145% 148% 150% 150% 150% 150%
G 15% | 106% 107% 109% 110% 124% 127% 130% 134% 137% 140% 143% 146% 150% 150% 150% 150% 150% 150%
R 16% | 108% 110% 111% 113% 129% 132% 135% 138% 142% 145% 148% 150% 150% 150% 150% 150% 150% 150%
O 17% | 110% 116% 114% 115% 134% 137% 140% 143% 146% 150% 150% 150% 150% 150% 150% 150% 150% 150%
W 18% | 113% 122% 116% 118% 138% 142% 145% 148% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
T 19% | 115% 128% 118% 120% 143% 146% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
H 20% | 118% 134$ 121% 122% 148% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
|_________________________________________________________________________________________________________________________
1.15 1.20 1.25 1.30 1.35 1.40 1.45 1.50 1.55 1.60 1.65 1.70 1.75 1.80 1.85 1.90 1.95 2.00
ROA
</TABLE>
DIVISIONAL PERFORMANCE:
For non-CEO participants, a measurement of Division Performance may be
implemented. Scoring for this measurement is developed by the upstream
CEO/President based on divisional goals or budgets.
- 7 - JANUARY, 1993
<PAGE> 22
NIE/REVENUE %:
The performance score for the NIE/Revenue percentage will be determined using
the following NIE/Revenue table. The NIE/Revenue ratio must be less than 60%
to qualify for a score.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NIE/Revenue % 60% 59% 58% 57% 56% 55% 54% 53% 52% 51% 50%
Score 0% 15% 30% 45% 60% 75% 90% 105% 120% 135% 150%
</TABLE>
CREDIT QUALITY:
The performance score for the Credit Quality criteria will be determined using
the following table. The Credit Quality performance score is based on 1)
achieving BANC ONE CORPORATION standards of 50 basis points or less for
commercial charge-offs and 100 basis points or less for retail charge-offs; or
2) showing improvement in the following four credit quality categories: problem
loans, non-performing loans, total delinquencies, and total charge-offs.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Retail Charge-offs (bp) 120.0 116.0 112.0 108.0 104.0 100.0 87.5 75.0 62.5 50.0
Score 0.0 20.0 40.0 60.0 80.0 100.0 112.5 125.0 137.5 150.0
Commercial Charge-offs (bp) 60.0 58.0 56.0 54.0 52.0 50.0 45.0 40.0 35.0 30.0
Score 0.0 20.0 40.0 60.0 80.0 100.0 112.5 125.0 137.5 150.0
</TABLE>
DISCRETIONARY:
The performance score for individual performance will be at the discretion of
the upstream CEO and should consider personal contributions and such issues as
audit, loan review, and CRA review.
- 8 -
<PAGE> 23
1993 KMIC
EXECUTIVE COMPENSATION PROGRAMS
Banc One Indiana Corporation
Weighting Guidelines
In order to calculate a weighted performance score, a weighting factor must be
assigned to each of the performance criteria outlined in the preceding pages.
The weightings for participants are shown in the table below:
<TABLE>
<CAPTION>
Performance Category CEO/President Non-
Weightings CEO/President
Weightings
-----------------------------------------------------------------
<S> <C> <C>
State Earnings/ROA 15% 5 - 15%
Affiliate Earnings/ROA 35% 15 - 45%
Divisional Performance N/A 0 - 30%
NIE/Revenue Ratio 13% 0 - 13%
Credit Quality 17% 0 - 17%
Individual (Discretionary) 20% 20 - 50%
=================================================================
Total 100% 100%
</TABLE>
Additional guidelines for non-CEO/President participants include:
/ / The total weighting of the State, Affiliate, and Divisional
performance categories should equal 50%. The upstream CEO/President
determines these weightings in accordance with overall goals and
objectives.
/ / The remaining 50% weightimg should be allocated to each
applicable category. Total weightings may never exceed 100%.
- 9 - JANUARY, 1993
<PAGE> 24
<TABLE>
EXAMPLE
<S> <C> <C>
- -------------------------------------
Base Pay: $100,000
- -------------------------------------------------------------------------------
Target Award: $30,000 (30% of Base Pay)
- -------------------------------------------------------------------------------
Award Opportunity: 15% State Earnings/ROA
(Weightings) 35% Affiliate Earnings/ROA
13% Affiliate NIE/Revenue
17% Credit Quality
20% Individual Performance (Discretionary)
- -------------------------------------------------------------------------------
AWARD CALCULATION:
- -------------------------------------------------------------------------------
(1) STATE/AFFILIATE SCORES:
- -------------------------------------------------------------------------------
Category State Affiliate
- -----------------------------------------------------
Earnings
Growth 11% 7%
------------------------------------------------
ROA 1.50% 1.60%
------------------------------------------------
Score from
Matrix 114% 109%
- -------------------------------------------------------------------------------
(2) WEIGHTED SCORES:
- -------------------------------------------------------------------------------
Score x Weighting = Result
--------------------------------------------------------------------------
State 114% x 15% = 17.10%
--------------------------------------------------------------------------
Affiliate 109% x 35% = 38.15%
--------------------------------------------------------------------------
NIE/Revenue 75% x 13% = 9.75%
--------------------------------------------------------------------------
Credit Quality 75% x 17% = 12.75%
--------------------------------------------------------------------------
Individual 100% x 20% = 20.00%
--------------------------------------------------------------------------
TOTAL 97.75%
- -------------------------------------------------------------------------------
(3) FINAL AWARD CALCULATION:
- -------------------------------------------------------------------------------
Target $30,000
-----------------------------------
Wtd Score x 97.75%
-----------------------------------
Award $29,325
-----------------------------------
</TABLE>
- 10 -
<PAGE> 25
1993 KMIC
EXECUTIVE COMPENSATION PROGRAMS
Bank One, Texas, NA
Performance Criteria
STATE PERFORMANCE:
For KMIC participants in Texas, a portion of the total performance score will
be based upon performance of the state holding company's eannings growth and
Return on Assets (ROA). The matrix shown below shows the relationship between
these two variables. No performance score for the State criteria will be
awarded if Earnings Growth does not reach at least 5% AND ROA reaches at least
1.15%.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
5% | 54% 58% 62% 66% 70% 78% 86% 94% 101% 104% 107% 110% 114% 117% 120% 123% 126% 130%
E 6% | 60% 64% 68% 72% 76% 84% 92% 100% 103% 106% 110% 113% 116% 119% 122% 126% 129% 132%
A 7% | 66% 70% 74% 78% 82% 90% 98% 102% 106% 109% 112% 115% 118% 122% 125% 128% 131% 134%
R 8% | 72% 76% 80% 84% 88% 96% 100% 105% 108% 111% 114% 118% 121% 124% 127% 130% 134% 137%
N 9% | 78% 82% 86% 90% 94% 101% 104% 107% 110% 114% 117% 120% 123% 126% 130% 133% 136% 139%
I 10% | 84% 88% 92% 96% 100% 103% 106% 110% 113% 116% 119% 122% 126% 129% 132% 135% 138% 142%
N 11% | 90% 94% 98% 101% 105% 108% 111% 114% 118% 121% 124% 127% 130% 134% 137% 140% 143% 146%
G 12% | 96% 100% 102% 103% 110% 113% 116% 119% 122% 126% 129% 132% 135% 138% 142% 145% 148% 150%
S 13% | 101% 102% 104% 106% 114% 118% 121% 124% 127% 130% 134% 137% 140% 143% 146% 150% 150% 150%
14% | 103% 105% 106% 108% 119% 122% 126% 129% 132% 135% 138% 142% 145% 148% 150% 150% 150% 150%
G 15% | 106% 107% 109% 110% 124% 127% 130% 134% 137% 140% 143% 146% 150% 150% 150% 150% 150% 150%
R 16% | 108% 110% 111% 113% 129% 132% 135% 138% 142% 145% 148% 150% 150% 150% 150% 150% 150% 150%
O 17% | 110% 116% 114% 115% 134% 137% 140% 143% 146% 150% 150% 150% 150% 150% 150% 150% 150% 150%
W 18% | 113% 122% 116% 118% 138% 142% 145% 148% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
T 19% | 115% 128% 118% 120% 143% 146% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
H 20% | 118% 134$ 121% 122% 148% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
|_________________________________________________________________________________________________________________________
1.15 1.20 1.25 1.30 1.35 1.40 1.45 1.50 1.55 1.60 1.65 1.70 1.75 1.80 1.85 1.90 1.95 2.00
ROA
</TABLE>
AFFILIATE PERFORMANCE:
Affiliate performance is measured in a manner similar to that of the state
holding company. The primary difference is that (for 1993 only) the matrix
below is based upon TARGETED net operating earnings and ROA set for each
affiliate individually. The corporate matrix is used, except that the values
for the X and Y axes are based upon the targets rather than the corporate
levels. The following matrix illustrates how this is determined.
- 7 - JANUARY, 1993
<PAGE> 26
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
-5% | 54% 58% 62% 66% 70% 78% 86% 94% 101% 104% 107% 110% 114% 117% 120% 123% 126% 130%
E -4% | 60% 64% 68% 72% 76% 84% 92% 100% 103% 106% 110% 113% 116% 119% 122% 126% 129% 132%
A -3% | 66% 70% 74% 78% 82% 90% 98% 102% 106% 109% 112% 115% 118% 122% 125% 128% 131% 134%
R -2% | 72% 76% 80% 84% 88% 96% 100% 105% 108% 111% 114% 118% 121% 124% 127% 130% 134% 137%
N -1% | 78% 82% 86% 90% 94% 101% 104% 107% 110% 114% 117% 120% 123% 126% 130% 133% 136% 139%
I Target| 84% 88% 92% 96% 100% 103% 106% 110% 113% 116% 119% 122% 126% 129% 132% 135% 138% 142%
N +1% | 90% 94% 98% 101% 105% 108% 111% 114% 118% 121% 124% 127% 130% 134% 137% 140% 143% 146%
G +2% | 96% 100% 102% 103% 110% 113% 116% 119% 122% 126% 129% 132% 135% 138% 142% 145% 148% 150%
S +3% | 101% 102% 104% 106% 114% 118% 121% 124% 127% 130% 134% 137% 140% 143% 146% 150% 150% 150%
+4% | 103% 105% 106% 108% 119% 122% 126% 129% 132% 135% 138% 142% 145% 148% 150% 150% 150% 150%
G +5% | 106% 107% 109% 110% 124% 127% 130% 134% 137% 140% 143% 146% 150% 150% 150% 150% 150% 150%
R +6% | 108% 110% 111% 113% 129% 132% 135% 138% 142% 145% 148% 150% 150% 150% 150% 150% 150% 150%
O +7% | 110% 116% 114% 115% 134% 137% 140% 143% 146% 150% 150% 150% 150% 150% 150% 150% 150% 150%
W +8% | 113% 122% 116% 118% 138% 142% 145% 148% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
T +9% | 115% 128% 118% 120% 143% 146% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
H +10% | 118% 134$ 121% 122% 148% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150% 150%
|_________________________________________________________________________________________________________________________
-.20 -.15 -.10 -.05 Target +.05 +.10 +.15 +.20 +25 +.30 +.35 +.40 +.45 +.50 +.55 +.60 +.65
ROA
</TABLE>
NIE/REVENUE %:
The performance score for the NIE/Revenue percentage is determined using the
following NIE/Revenue table. The NIE/Revenue ratio must be less than the Plan to
qualify for a score.
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
NIE/Revenue % Target -1% -2% -3% -4% -5% -6% -7% -8% -9% -10%
Score 0% 15% 30% 45% 60% 75% 90% 105% 120% 135% 150%
</TABLE>
ASSET QUALITY:
The Texas Plan measures Asset quality in terms of:
A) Achieving improvement in Non-performing Loans, Problem Loans,
Total Delinquencies, and Total Net Charge-offs. (Achieving all four
catregories can result in up to a 75% payout.)
B) Obtaining Net Retail Charge-offs of less than 100 basis points
and Net Wholesale Charge-offs of less than 50 basis points. (Achieving
both of these objectives can result in up to a 75% payout for Asset
Quality. Achieving one or the other can result in up to a 37.5%
payout.)
DISCRETIONARY:
The performance score for individual performance will be at the discretion of
the upstream CEO and should consider personal contributions and such issues as
audit, loan review, and CRA review.
- 8 -
<PAGE> 27
1993 KMIC
EXECUTIVE COMPENSATION PROGRAMS
Bank One, Texas, NA
Weighting Guidelines
In order to calculate a weighted performance score, a weighting factor must be
assigned to each of the performance criteria outlined in the preceding pages.
The weightings for participants are shown in the table below:
<TABLE>
<CAPTION>
Performance Category CEO/President Non-
Weightings CEO/President
Weightings
-----------------------------------------------------------------
<S> <C> <C>
State Earnings/ROA 15% 5 - 15%
Affiliate Earnings/ROA 35% 15 - 45%
Divisional Performance N/A 0 - 30%
NIE/Revenue Ratio 13% 0 - 13%
Credit Quality 17% 0 - 17%
Individual (Discretionary) 20% 20 - 50%
=================================================================
Total 100% 100%
</TABLE>
Additional guidelines for non-CEO/President participants include:
/ / The total weighting of the State, Affiliate, and Divisional
performance categories should equal 50%. The upstream CEO/President
determines these weightings in accordance with overall goals and
objectives.
/ / The remaining 50% weightimg should be allocated to each
applicable category. Total weightings may never exceed 100%.
- 9 - JANUARY, 1993
<PAGE> 28
<TABLE>
EXAMPLE
<S> <C> <C>
- -------------------------------------
Base Pay: $100,000
- -------------------------------------------------------------------------------
Target Award: $30,000 (30% of Base Pay)
- -------------------------------------------------------------------------------
Award Opportunity: 15% State Earnings/ROA
(Weightings) 35% Affiliate Earnings/ROA
13% Affiliate NIE/Revenue
17% Credit Quality
20% Individual Performance (Discretionary)
- -------------------------------------------------------------------------------
AWARD CALCULATION:
- -------------------------------------------------------------------------------
(1) STATE/AFFILIATE SCORES:
- -------------------------------------------------------------------------------
Category State Affiliate
- -----------------------------------------------------
Earnings
Growth 11% 7%
------------------------------------------------
ROA 1.50% 1.60%
------------------------------------------------
Score from
Matrix 114% 109%
- -------------------------------------------------------------------------------
(2) WEIGHTED SCORES:
- -------------------------------------------------------------------------------
Score x Weighting = Result
--------------------------------------------------------------------------
State 114% x 15% = 17.10%
--------------------------------------------------------------------------
Affiliate 109% x 35% = 38.15%
--------------------------------------------------------------------------
NIE/Revenue 75% x 13% = 9.75%
--------------------------------------------------------------------------
Credit Quality 75% x 17% = 12.75%
--------------------------------------------------------------------------
Individual 100% x 20% = 20.00%
--------------------------------------------------------------------------
TOTAL 97.75%
- -------------------------------------------------------------------------------
(3) FINAL AWARD CALCULATION:
- -------------------------------------------------------------------------------
Target $30,000
-----------------------------------
Wtd Score x 97.75%
-----------------------------------
Award $29,325
-----------------------------------
</TABLE>
- 10 -
<PAGE> 1
EXHIBIT 10(d)
INCENTIVE COMPENSATION
DEFERRAL PLAN
EXECUTIVE COMPENSATION PROGRAMS
Summary
1. WHAT IS THE INCENTIVE COMPENSATION DEFERRAL PLAN (THE PLAN)?
The Plan is a means by which an officer may defer compensation which is awarded
under BANC ONE CORPORATION's Incentive Compensation Plan or any other
specialized incentive compensation plan with annual payments designated by the
Committee.
2. WHO IS ELIGIBLE TO PARTICIPATE IN THE PLAN?
Any officer of a BANC ONE CORPORATION or BANC ONE affiliate who:
(i) is designated by the Personnel and Compensation Committee of the
Board of Directors of BANC ONE CORPORATION as a participant in
BANC ONE CORPORATION's Incentive Compensation Plan or any other
designated specialized incentive plan with annual payments;
(ii) is awarded compensation under the Incentive Compensation Plan or
specialized incentive compensation plan; and
(iii) has a base salary as of December 31st of the preceding plan year
exceeds $100,000, shall be eligible to participate in the Plan by
deferring not less than $5,000 of such incentive compensation.
3. WHAT ARE THE TAX CONSEQUENCES OF DEFERRING INCENTIVE
COMPENSATION UNDER THE PLAN?
While tax liability relates to individual circumstances, the general federal
tax implications under CURRENT LAW are outlined below (although each eligible
officer is encouraged to seek personal tax advice concerning participation in
the Plan).
FEDERAL INCOME TAX
* No current tax is payable in the year of deferral on the amount
of incentive compensation deferred.
* Ordinary income tax is payable in the year in which the deferred
compensation is actually received.
- 1 - November, 1993
<PAGE> 2
Summary (Cont'd)
FEDERAL INCOME TAX (CONT'D)
* If the payout is made to the officer's beneficiary following
his death, there will be an income tax deduction for federal estate
taxes paid on the value of such deferred compensation benefits.
FEDERAL ESTATE TAXES
* In the event of death, the value of the officer's remaining
deferred compensation payments may generally be included in his or her
gross estate. If the beneficiary is the officer's spouse, the full
unlimited estate tax marital deduction will generally be applicable
under current law.
FICA
* Compensation that is voluntarily deferred is subject to FICA in
the year the compensation is earned.
STATE AND LOCAL TAXES
* State and local income or estate taxes may or may not apply to
your deferred compensation. You should consult your tax advisor to
determine state and local tax implications.
4. HOW IS THE INCENTIVE COMPENSATION DEFERRED UNDER THE PLAN INVESTED?
You must make an election to have BANC ONE CORPORATION invest incentive
compensation deferred on your behalf in any year in one or more of five
available investment portfolios:
ONE GROUP EQUITY INDEX PORTFOLIO: This portfolio is invested in
stocks that make up the Standard & Poor's Composite Stock Price Index.
ONE GROUP QUANTITATIVE EQUITY PORTFOLIO: This portfolio is
invested in equity securities selected under a quantitative value
discipline. The securities held in this portfolio are either traded on
a domestic securities exchange or quoted in the NASDAQ/NMS system.
ONE GROUP INCOME PORTFOLIO: This portfolio is invested in
quality debt obligations. These include corporate and municipal bonds
that are rated in the three highest rating groups (A, AA or AAA), U.S.
Government or agency obligations, mortgage-related securities, and
short-term cash equivalents.
-2-
<PAGE> 3
INCENTIVE COMPENSATION
DEFERRAL PLAN
EXECUTIVE COMPENSATION PROGRAMS
Summary (Cont'd)
ONE GROUP PRIME MONEY MARKET PORTFOLIO: This portfolio is
invested in high quality money market instruments and other high
quality short term instruments.
BANC ONE CORPORATION STOCK: This is a BANC ONE CORPORATION
STOCK PORTFOLIO invested in BANC ONE CORPORATION common stock and cash
or cash equivalent securities as appropriate. CASH DIVIDENDS PAID ON
THE SHARE HELD WILL BE REINVESTED IN ADDITIONAL BANC ONE CORPORATION
SHARES ON A TAX-FREE BASIS TO PARTICIPANTS.
* See the One Group prospectuses for a description of any current financial
data for the One Group Income Portfolio and One Group Equity Index Portfolio.
The One Group prospectuses have been previously provided to you or are enclosed
with this Summary and Explanation. The One Group prospectuses are made
available for informational purposes only and are not intended as an offering
or solicitation. Shares of the One Group Funds are not FDIC insured, and there
is no assurance that the One Group Portfolios will be able to maintain a stable
net asset value of $1.00 per share. The One Group Funds are sponsored by third
parties independent of BANC ONE CORPORATION and its affiliates, and shares of
the One Group Funds are not endorsed or guaranteed by and do not constitute
obligations of BANC ONE CORPORATION or its affiliates. The One Group Funds
will pay investment advisory fees to a BANC ONE CORPORATION affiliate as
described in the prospectuses.
5. IS PARTICIPATION IN THE PLAN SUBJECT TO MINIMUM AND MAXIMUM AMOUNTS?
The minimum amount of incentive compensation which may be deferred for any year
is $5,000. In addition the minimum amount of incentive compensation which may
be deferred and invested PER YEAR in any one portfolio is $1,000.
There is no maximum on the amount or percent of incentive compensation which
you may defer in any year. Your election must reflect a percentage of such
compensation or a specific amount of such compensation to be deferred. This
election will remain in effect from year to year into the future unless you
file a new election form or effectively cancel (in writing) the prior deferred
incentive compensation election before the commencement of any such fiscal
period.
The incentive compensation deferral form is structured so that each year you
may designate the percentage of your incentive compensation which is to be
invested in the separate investment portfolios subject to any minimum dollar
amounts you designate in accordance with applicable investment choice rules.
- 3 - November, 1993
<PAGE> 4
Summary (Cont'd)
6. MAY I ELECT TO DEFER ONLY A PORTION OF MY INCENTIVE COMPENSATION?
Yes. Only the portion of your incentive compensation appropriately elected for
deferral will be added to your Deferred Compensation Accounts. The remainder
of your incentive compensation will be paid to you in cash according to the
provisions of your incentive plan.
7. MAY MY CHOICE OF INVESTMENT PORTFOLIOS BE CHANGED?
1. A new investment election may be made with respect to incentive
compensation deferred in any future year.
2. Any participant who is NOT an INSIDER may transfer prior deferral
amounts from one portfolio to another in accordance with the
procedure set forth in paragraph 3 below. Any participant
who is an INSIDER may transfer prior balances among the One Group
portfolios, but may not make any transfers in or out of the BANC
ONE CORPORATION Stock Fund.
3. During the annual election period, you may also elect to transfer
prior deferral amounts from one portfolio to another effective
December 31st of the year in which the election is made. Your
election must be received by the Plan Administrator by the last
business day prior to December 31st in order to be
effective December 31st. Any such transfer will be valued as of
the last business day prior to December 31st. If you fail to make
the election, your account balance will remain invested as
previously elected, and you will not be eligible to transfer among
portfolios until the next annual election period.
8. HOW WILL I KNOW IF I AM AN INSIDER?
For purposes of this Plan, the term INSIDER shall include any Participant who
is:
1. a director or executive officer of BANC ONE CORPORATION,
2. a member of BANC ONE CORPORATION'S Policy Committee, or
3. designated as an INSIDER by BANC ONE CORPORATION.
-4-
<PAGE> 5
INCENTIVE COMPENSATION
DEFERRAL PLAN
EXECUTIVE COMPENSATION PROGRAMS
Summary (Cont'd)
9. HOW ARE INTEREST AND DIVIDENDS EARNED BY THE INVESTMENT
PORTFOLIOS TREATED?
Earnings in the equity, income, and money-market portfolios will be accumulated
and reinvested in the applicable portfolio. Dividends earned by BANC ONE
CORPORATION Stock Portfolio will be reinvested in BANC ONE CORPORATION common
stock. Plan members will not be taxed on earnings or BANC ONE CORPORATION
stock dividends until distributed in the form of cash from their deferred
account following retirement or termination of employment.
10. WHEN WILL MY DEFERRED COMPENSATION BE PAID TO ME?
Your deferred incentive compensation account will be paid to you commencing on
the January 1st on or following your retirement or termination from BANC ONE
CORPORATION or an affiliate. In the event you remain in the employ of BANC ONE
CORPORATION or an affiliate after age 65, your deferred incentive compensation
will be paid to you commencing on the January 1st on or following your 65th
birthday except in circumstances when you are requested to remain in employment
by unanimous action of the BANC ONE CORPORATION Board of Directors.
Any amounts due you from your interests in the BANC ONE CORPORATION stock
portfolio shall be paid to you in cash based upon the market value of a share
of BANC ONE CORPORATION Common Stock on the open market for the shares
attributable to your interests in the BANC ONE CORPORATION stock portfolio as
of the January lst as determined above. No shares of BANC ONE CORPORATION
stock will be issued to you in conjunction with the Plan.
Any amounts due you from your interests in any of the One Group Portfolios
shall be paid to you in cash based upon the market value of a share of such One
Group Portfolio on the open market for the shares attributable to your
interests in the One Group Portfolio as of the January 1st as determined above.
No shares of the One Group Portfolios will be issued to you in conjunction with
the Plan.
NOTE: Any Participant who terminated employment prior to
December 31, 1992, will receive a lump sum payment of the
Participant's entire remaining balance as of January 1, 1995,
regardless of the form previously elected by such Participant under
the terms of this Plan.
- 5 - November, 1993
<PAGE> 6
Summary (Cont'd)
11. WHEN MY DEFERRED COMPENSATION BECOMES PAYABLE, OVER WHAT PERIOD OF
TIME WILL IT BE PAID?
When you elect to defer compensation, you must also select the method of
payment of your deferred amounts. This selection entails a choice as between:
1. a lump sum payment; or
2. payment in equal annual installments over either five or ten
years.
This selection may be made during any annual election period. However, if you
fail to make an election for any deferral, your deferred amounts will be paid
in installments over ten years. Once you have elected a form of payment, such
form of payment shall apply to all amounts deferred by you under the Plan
unless you change your election prior to your termination of employment.
Changes may be made only during the annual election period.
The election for the deferral period applies only to payments which are made to
a Participant following retirement at age 65, early retirements as described in
the BANC ONE CORPORATION's qualified retirement plan, or termination of
employment as a result of disability. Payments following termination of
employment for any other reason shall be made in a lump sum only.
The deferral period for all active Participants who are not already receiving
payments will be automatically set at ten years or their previously elected
period for distribution, whichever is shorter.
The deferral period for all Participants who have terminated employment for
reasons other than retirement or disability and who are receiving payments
prior to January 1, 1995, will end on January 1, 1995, with the lump sum
payment described in the previous answer.
12. AM I PROTECTED IN THE EVENT MY EMPLOYMENT TERMINATES?
Your entire Deferred Compensation Account under the Plan is always 100% vested
irrespective of how or when you terminate employment. However, BANC ONE
CORPORATION may offset any amounts payable to a participant or beneficiary
under the Plan against any amounts which the participant may owe to BANC ONE
CORPORATlON or to an affiliate.
13. DO I NEED TO APPLY FOR DISTRIBUTION OF DEFERRED COMPENSATION AMOUNTS?
No. When you are entitled to a distribution of deferred compensation you will
be notified by the Plan Administrator and appropriate distribution procedures
arranged.
-6-
<PAGE> 7
INCENTIVE COMPENSATION
DEFERRAL PLAN
EXECUTIVE COMPENSATION PROGRAMS
Summary (Cont'd)
14. WHAT HAPPENS TO MY DEFERRED COMPENSATION ACCOUNT IN THE EVENT OF MY DEATH?
If you should die prior to receiving payment of your entire Deferred
Compensation Account, the remaining balance would be paid to your designated
beneficiary or beneficiaries. Such payment shall, in the discretion of the Plan
Committee, be made in the same form that you had elected for distribution of
your deferred compensation had you lived or in a lump sum settlement. You have
the right to change your beneficiary at any time.
15. MAY MY DEFERRED COMPENSATION DISTRIBUTION BE ACCELERATED UNDER ANY
CIRCUMSTANCES?
Yes. In order to provide flexibility in the event of unforeseen circumstances,
the Plan Committee, with the approval of the Personnel and Compensation
Committee of the Board of Directors of BANC ONE CORPORATION reserves the right
to accelerate the payment of Plan Deferred Compensation amounts without the
consent of the participant, his beneficiaries or his estate. In making such
determination the Committee may take into consideration the health, financial
circumstances, and family obligations of the Participant or other relevant
factors. In addition, the CORPORATION may, in its sole discretion, amend or
terminate this Plan, which may accelerate payment of your benefits. With
respect to a participant who is an INSIDER, no benefits shall be paid at the
discretion of the Plan Committee or the Corporation prior to the end of the
period ending six months after the last deferral made by such INSIDER.
16. MAY I ASSIGN OR PLEDGE MY DEFERRED COMPENSATION?
No. Deferred compensation may not be assigned to a third party or pledged as
collateral until after it is distributed to you. This restriction does not
affect your ability to name beneficiaries, nor does it affect the Corporation's
ability to offset your deferred compensation against any amount you might owe
the Corporation or its affiliates.
17. WILL I RECEIVE INFORMATION FROM TIME TO TIME AS TO MY
DEFERRAL ACCOUNT?
The Plan Administrator will prepare and issue semi-annually to each participant
a detailed statement concerning your incentive compensation which has been
deferred under the Plan.
- 7 -
NOVEMBER, 1993
<PAGE> 8
Summary (Cont'd)
18. WHO OWNS THE PORTFOLIOS IN WHICH MY COMPENSATION IS INVESTED?
So as to obtain the desired federal income tax deferral treatment, all benefits
under the Plan are payable solely from the general assets of BANC ONE
CORPORATION. The investment portfolios established pursuant to the Plan must
be the property of BANC ONE CORPORATION and the rights of participants and
beneficiaries under the Plan are those of an unsecured creditor for the
payments determined in accordance with the Plan.
19. HOW DOES MY DEFERRAL AFFECT MY RETIREMENT BENEFITS?
Any portion of your incentive compensation which is deferred cannot be used in
determining your retirement benefit or contribution amount under BANC ONE
CORPORATION's qualified retirement plans. In other words, that portion of your
incentive compensation which is deferred will not be taken into account when
your "final average compensation" is calculated for purposes of determining
your retirement benefit. "Final average compensation" is calculated on the
basis of the five consecutive years of the last ten years prior to retirement
in which your retirement compensation (salary plus bonus) was the highest.
However, if you are eligible to participate in BANC ONE CORPORATION's
Supplemental Executive Retirement Plan, your deferred incentive compensation
will be used to determine your retirement benefit under that plan.
20. HOW DOES MY DEFERRAL AFFECT OTHER BANC ONE CORPORATION BENEFIT PLANS?
Other BANC ONE CORPORATION benefit plans related to compensation, such as group
life insurance and long term disability benefits, are based upon your regular
salary and thus are not affected by deferral of payments of incentive
compensation amounts.
21. IS MY SOCIAL SECURITY AFFECTED BY MY DEFERRAL?
Generally, the amount of incentive compensation voluntarily deferred is
considered to be wages for FICA purposes in the year earned. Under current
rulings the receipt of such deferred compensation payments after retirement
should not reduce Social Security benefits under the "work test" rule.
- 8 -
<PAGE> 9
INCENTIVE COMPENSATION
DEFERRAL PLAN
EXECUTIVE COMPENSATION PROGRAMS
Summary (Cont'd)
22. HOW DO I SIGN UP FOR THE PLAN?
Eligible participants may enroll in the Plan by completing and returning to the
Plan Administrator the appropriate compensation deferral and beneficiary forms
(copies attached). Generally, a written election to defer compensation under
the Plan must be received by the Plan Administrator prior to the first day of
BANC ONE CORPORATION's fiscal year in which the deferred compensation is to be
earned in order to become effective in respect to such compensation. Elections
affecting incentive compensation to be earned as of December 31, 1994 must be
received by the Plan Administrator on or before December 31, 1993 (or within
one month of the employment date in respect to new officers who become eligible
for the Plan).
23. WERE CAN I GET MORE INFORMATION ABOUT THE PLAN?
The preceding questions and answers highlight the Plan. Actual plan provisions
are set forth in the plan document and will be available for your review. In
the event of inconsistencies between the questions and answers and the legal
plan document or any applicable laws or regulations, the provisions of the
Plan, laws and/or regulations shall govern. If you have any additional
questions about the Plan or need information about your deferrals or accounts
under the Plan, please contact the Plan Administrator by calling Jo Anne Rioli
Moeller, Vice President, Compensation at (614) 248-5952.
24. WHEN IS THE PLAN EFFECTIVE?
This Plan is effective as of January 1, 1982, and applies to deferrals of
incentive compensation earned on or after December 31, 1982.
- 9 - November, 1993
<PAGE> 10
BANC ONE CORPORATION INCENTIVE COMPENSATION DEFERRAL PLAN
PARTICIPATION ELECTION DIRECTION
- --------------------------------------------------------------------------
AGREEMENT MADE ON THIS _______ DAY OF DECEMBER, 1993 BETWEEN
___________________________________ AND BANC ONE CORPORATION.
(Full Employee Name)
THIS AGREEMENT IS SUBJECT TO ALL OF THE TERMS OF THE BANC ONE CORPORATION
INCENTIVE COMPENSATION DEFERRAL PLAN (THE "PLAN"). BY SIGNING THIS AGREEMENT, I
HEREBY MAKE THE FOLLOWING ELECTIONS:
1994 AWARD DEFERRAL
I ELECT TO DEFER RECEIPT OF THE FOLLOWING PERCENTAGE OR AMOUNT OF MY
INCENTIVE COMPENSATION AWARD, IF ANY, FOR 1994 PERFORMANCE:
1. / / _____% BUT NOT LESS THAN $5,000. OR
2. / / $____ NOT TO BE LESS THAN $5,000.
I UNDERSTAND THAT INCENTIVE COMPENSATION DEFERRED, IN ACCORDANCE WITH MY
ELECTION HEREUNDER, WILL BE ADMINISTERED UNDER THE BANC ONE CORPORATION
INCENTIVE COMPENSATION DEFERRAL PLAN. MY SELECTION OF AN INVESTMENT FUND(S) IS A
MATTER OF PERSONAL CHOICE AND IS NOT MADE ON THE BASIS OF ANY STATEMENTS MADE BY
BANC ONE REPRESENTATIVES. I ELECT THAT SUCH FUNDS BE INVESTED AS FOLLOWS:
<TABLE>
<S> <C> <C> <C> <C>
(1) (2) (3) (4) (5)
THE ONE GROUP sm THE ONE GROUP sm THE ONE GROUP sm THE ONE GROUP sm BANC
EQUITY QUANTITATIVE INCOME PRIME MONEY ONE
INDEX PORTFOLIO EQUITY PORTFOLIO PORTFOLIO PORTFOLIO STOCK PORTFOLIO
</TABLE>
NOTE: ANY AMOUNT OF LESS THAN $1,000 WILL BE ADDED TO THE FUND TO WHICH YOU HAVE
ALLOCATED THE LARGEST % OF DEFERRAL.
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
% % % % % = 100%
</TABLE>
JANUARY 1, 1994 FUNDS TRANSFER
Please move my current fund balance as indicated below:
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
ONE GROUP EQUITY
INDEX PORTFOLIO % % % % % = 100%
ONE GROUP QUANTITATIVE
EQUITY PORTFOLIO % % % % % = 100%
ONE GROUP INCOME
PORTFOLIO % % % % % = 100%
ONE GROUP PRIME MONEY
MARKET PORTFOLIO % % % % % = 100%
BANC ONE
STOCK PORTFOLIO % % % % % = 100%
</TABLE>
DEFERRAL DISTRIBUTION
I DIRECT THAT SUCH DISTRIBUTIONS FROM MY DEFERRED ACCOUNT(S) IN THE PLAN
BE PAID:
<TABLE>
<S> <C> <C> <C>
/ / IN A LUMP SUM. / / IN EQUAL ANNUAL INSTALLMENTS OVER: / / FIVE YEARS / / TEN YEARS
</TABLE>
I understand that once I have elected a distribution period for deferred
incentive compensation under the Plan that such period shall be applicable to
all installment payments to me under the Plan unless I elect a different
distribution period.
- --------------------------------------------------------------------------
I understand that compensation deferred, in accordance with my election
hereunder, will be administered by the Plan Administrator in a Deferred
Compensation Account in accordance with the provisions of the Plan and that my
rights, and those of my beneficiaries, shall be those of an unsecured creditor
of BANC ONE CORPORATION. I acknowledge that the Committee with the approval of
the Personnel and Compensation Committee of the Board of Directors of BANC ONE
CORPORATION or applicable Related Company reserves the right to accelerate
payment of deferred amounts under the Plan.
THE ELECTION DIRECTION FORM IS SUBJECT TO ALL OF THE TERMS AND CONDITIONS OF THE
PLAN, SHALL ONLY BECOME EFFECTIVE WHEN IT HAS BEEN APPROVED AND ACCEPTED BY THE
COMMITTEE AND SHALL REMAIN IN EFFECT WITH RESPECT TO SALARY AND/OR INCENTIVE
AWARDS, IF ANY, FOR SUBSEQUENT FISCAL YEARS OF BANC ONE CORPORATION OR RELATED
COMPANY UNLESS BEFORE THE COMMENCEMENT OF ANY SUCH FISCAL PERIOD A NEW OR
AMENDED ELECTION DIRECTION FORM IS FILED AND ACCEPTED OR THE ELECTION EFFECTIVE
THROUGH THIS FORM IS CANCELED.
- ------------------------------------- ------------------------------------
NAME OF EMPLOYER (AFFILIATE) SIGNATURE OF PARTICIPATING OFFICER
COMMITTEE ACTION:
The above Incentive Compensation Deferral Election is approved and accepted.
Dated:
--------------- By:
------------------------------
PLAN ADMINISTRATOR
B:KMIC-EDF
<PAGE> 1
of the Employee by the Company and its subsidiaries is "at will" and, prior
to a Change of Control of the Company or an announcement of a signed agreement
for such a Change of Control, may be terminated by the Employee, the Company or
any of its subsidiaries at any time.
(j) This Agreement may be executed in counterparts, any of which
shall be deemed to be an original.
IN WITNESS WHEREOF, the Employee has hereunto set the Employee's hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
Date:
--------------------- ---------------------------------------
1--
Date:
--------------------- Affiliated Bankshares of Colorado, Inc.
By
------------------------------------
Kent O. Olin, President and
Chief Executive Officer
- 7 -
<PAGE> 1
EXHIBIT 10(f)
EXECUTIVE AGREEMENT
[Name/address of
executive officer]
Dear Mr. _______________ :
Marine Corporation, East Old State Capital Plaza,
Springfield, Illinois 62701 (the "Company") considers the establishment
and maintenance of a sound and vital management to be essential to
protecting and enhancing the best interests of the Company and its
shareholders. In this connection, the Company recognizes that the
possibility of a change in control presently exists and may exist in the
future, and that such possibility, and the uncertainty and questions
which it may raise among management, may result in the departure or
distraction of management personnel to the detriment of the Company and
its shareholders. Accordingly, the Board of Directors of the Company
(the "Board") has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of
members of the Company's management, including yourself, to their
assigned duties without distraction in the face of the potentially
disturbing circumstances arising from the possibility of a change in
control of the Company.
In order to induce you to remain in the employ of the
Company and in consideration of your agreeing to remain in the employ of
the Company subject to the terms and conditions set forth below, this
letter agreement sets forth the severance benefits which the Company
agrees will be provided to you in the event your employment with the
Company is terminated within three (3) years of a "change in control of
the Company" (as defined in Section 2 hereof) under the circumstances
described below.
1. COMPANY'S RIGHT TO TERMINATE. During the term of this
Agreement, you agree that you will not voluntarily leave the employ of
the Company except as may be permitted hereunder and will continue to
perform your regular duties as ___________ of the Company.
Notwithstanding the foregoing, the Company may terminate your employment
at any time, subject to providing the benefits hereinafter specified in
accordance with the terms hereof.
2. CHANGE IN CONTROL. No benefits shall be payable
hereunder unless there shall have been a change in control of the
Company, as set forth below, and your employment by the Company shall
thereafter have been terminated in accordance with Section 3 below
within three (3) years of such a change in control of the Company. For
purposes of this Agreement, a "change in control of the Company" shall
be deemed to have occurred on the date that a change in control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the "1934 Act") occurs; provided that, without
limitation, such a change in control of the Company shall be deemed to
have occurred on the date (i) any "person" (as such term is
<PAGE> 2
used in Sections 13(d) and 14(d) of the 1934 Act) is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the 1934 Act),
directly or indirectly, of securities of the Company representing 35% or
more of the combined voting power of the Company's then outstanding
securities; (ii) the shareholders of the Company approve (a) any
consolidation or merger of the Company in which the Company is not the
continuing or surviving corporation or pursuant to which securities of
the Company would be converted into cash, securities or other property,
other than a merger of the Company in which the holders of securities of
the Company immediately prior to the merger have the same proportionate
ownership of securities of the surviving corporation immediately after
the merger, or (b) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all, or
substantially all, of the assets of the Company, or (e) the adoption of
any plan or proposal for the liquidation or dissolution of the Company;
or (iii) any tender offer or exchange offer by any person (as defined in
Section 13(d) of the 1934 Act), corporation or other entity, other than
the Company, to acquire any securities of the Company for cash,
securities or any other consideration, expires provided, however, that
(a) at least a portion of such securities sought pursuant to the offer
in question is acquired and (b) after consummation of such offer, the
person, corporation or other entity is the "beneficial owner" (as
defined in Rule 13d-3 under the 1934 Act), directly or indirectly, of
securities of the Company representing 35% or more of the combined
voting power of the Company's then outstanding securities.
3. TERMINATION FOLLOWING CHANGE IN CONTROL. If any of
the events described in Section 2 hereof constituting a change in
control of the Company shall have occurred, you shall be entitled to the
benefits provided in Section 4 hereof upon the subsequent termination of
your employment within three (3) years of such a change in control of
the Company unless such termination is (a) because of your death or
Retirement, (b) by the Company for Cause or Disability or (c) by you
other than for Good Reason.
(i) Disability; Retirement.
(A) Termination by the Company of your employment
based on "Disability" shall mean termination because of your absence
from your duties with the Company on a full time basis for 130
consecutive business days, as a result of your incapacity due to
physical or mental illness, unless within thirty (30) days after Notice
of Termination (as hereinafter defined) is given following such absence
you shall have returned to the full time performance of your duties.
(B) Termination by the Company or you of your
employment based on "Retirement" shall mean termination in accordance
with the Company's retirement policy, including early retirement,
generally applicable to its salaried employees as in effect immediately
prior to a change in control of the Company or a substantially similar
retirement policy.
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<PAGE> 3
(ii) Cause. Termination by the Company of your employment for
"Cause" shall mean termination upon (A) the willful and continued
failure by you to substantially perform your duties with the Company
(other than any such failure resulting from your incapacity due to
physical or mental illness), after a demand for substantial performance
is delivered to you by the Chief Executive Officer of the Company or the
Compensation Committee of the Board, which specifically identifies the
manner in which the Chief Executive Officer or the Compensation
Committee believes that you have not substantially performed your
duties, or (B) an act or acts of dishonesty by you constituting a felony
under the laws of the State of Illinois and resulting or intended to
result directly or indirectly in gain or personal enrichment at the
expense of the Company to which you are not legally entitled. For
purposes of this paragraph, no act, or failure to act, on your part
shall be considered "willful" unless done, or omitted to be done, by you
not in good faith and without reasonable belief that your action or
omission was in the best interest of the Company.
Notwithstanding the foregoing, you shall not be deemed to
have been terminated for Cause unless and until there shall have been
delivered to you a copy of a Notice of Termination from the Chief
Executive Officer of the Company or the Compensation Committee of the
Board, after reasonable notice to you and an opportunity for you,
together with your counsel, to be heard before the Compensation
Committee of the Board (or, if there be no such Committee or such
Committee delivers the Notice of Termination, the Board of Directors),
finding that in the good faith opinion of such Committee (or the Board)
you were guilty of conduct set forth above in clauses (A) or (B) of the
first sentence of the preceding paragraph and specifying the partic-
ulars thereof in detail.
(iii) Good Reason. Termination by you of your employment for
"Good Reason" shall mean termination based on:
(A) subsequent to a change in control of the Company,
and without your express written consent, the assignment to you of any
duties inconsistent with your positions, duties, responsibilities and
status with the Company immediately prior to a change in control of the
Company, or a change in your reporting responsibilities, titles or
offices as in effect immediately prior to a change in control of the
Company, or any removal of you from or any failure to re-elect you to
any of such positions, except in connection with the termination of your
employment for Cause, Disability or Retirement or as a result of your
death or by you other than for Good Reason;
(B) subsequent to a change in control of the Company, a
reduction by the Company in your base salary as in effect on the date
hereof or as the same may be increased from time to time;
(C) subsequent to a change in control of the Company, a failure
by the Company to continue any bonus plans in which you are entitled to
participate immediately prior to such a change in control of the Company (the
"Bonus Plans") as the same may be modified from time to time, or a failure by
the Company to continue you as a participant in the Bonus Plans on at least the
same basis as you participate immediately prior to such a change in control of
the Company in accordance with the Bonus Plans;
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<PAGE> 4
(D) subsequent to a change in control of the Company, and
without your express written consent, the Company requires you to be based
anywhere other than in the city in which you were based immediately prior to
such a change in control of the Company, or requires you to be absent from such
city on the Company's business to an extent that is not consistent with your
present business travel obligations;
(E) subsequent to a change in control of the Company, the
failure by the Company to continue in effect any benefit or compensation
plan, stock ownership plan, stock purchase plan, stock option plan, life
insurance plan, health and accident plan, disability plan or retirement
plan in which you are participating at the time of such a change in
control of the Company (or plans providing you with substantially
similar benefits), the taking of any action by the Company which would
adversely affect your participation in or materially reduce your
benefits under any of such plans or deprive you of any material fringe
benefit, specifically including, but not limited to, any automobile
provided to you by the Company at the time of a change in control of the
Company enjoyed by you immediately prior to such a change in control of
the Company, or the failure by the Company to provide you with the
number of paid vacation days to which you are then entitled in
accordance with the Company's normal vacation policy in effect on the
date hereof;
(F) subsequent to a change in control of the Company, the
failure by the Company to obtain the assumption and the agreement to
perform this Agreement by any successor as contemplated in Section 7
hereof; or
(G) subsequent to a change in control of the Company, any
purported termination of your employment which is not effected pursuant
to a Notice of Termination satisfying the requirements of paragraph (iv)
below (and, if applicable, paragraph (ii) above); and for purposes of
this Agreement, no such purported termination shall be effective.
(iv) Notice of Termination. Any purported termination by
the Company pursuant to paragraph (i) or (ii) above or by you pursuant
to subparagraph (B) of paragraph (i) or paragraph (iii) above shall be
communicated by written Notice of Termination to the other party hereto.
For purposes of this Agreement, a "Notice of Termination" shall mean a
notice which shall indicate the specified termination provision in this
Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of your
employment under the provision so indicated.
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<PAGE> 5
(v) Date of Termination. "Date of Termination, shall
mean (A) if your employment is terminated for Disability, thirty (30)
days after Notice of Termination is given (provided that you shall not
have returned to the performance of your duties on a full-time basis
during such thirty (30) day period), (B) if your employment is
terminated pursuant to paragraph (ii) above, the date specified in the
Notice of Termination, and (C) if your employment is terminated for any
other reason, the date on which a Notice of Termination is given;
provided that if within thirty (30) days after any Notice of Termination
is given the party receiving such Notice of Termination notifies the
other party that a dispute exists concerning the termination, the Date
of Termination shall be the date on which the dispute is finally
determined, either by mutual written agreement of the parties, by a
binding and final arbitration award or by a final judgment, order or
decree of a court of competent jurisdiction entered upon such
arbitration award (the time for appeal therefrom having expired and no
appeal having been perfected).
4. CERTAIN BENEFITS UPON TERMINATION. If, after a
change in control of the Company shall have occurred, as defined in
Section 2 above, your employment by the Company shall be terminated
within three (3) years of such a change in control of the Company (a) by
the Company other than for Cause, Disability or Retirement or (b) by you
for Good Reason, then you shall be entitled to the benefits provided
below:
(i) the Company shall pay you your full base salary
through the Date of Termination at the rate in effect at the time Notice
of Termination is given plus credit for any vacation earned but not
taken and the amount, if any, of any bonus for a past fiscal year which
has not yet been awarded or paid to you under a Bonus Plan, if any;
(ii) in lieu of any further salary payments to you for
periods subsequent to the Date of Termination, the Company shall pay as
severance pay to you, in a lump sum amount within fifteen business days
of the Date of Termination, twice the amount of your full base salary at
the annual rate in effect at the time of Notice of Termination but in no
event shall such amount be less than twice the amount of your full base
salary at the annual rate in effect at the date of a change in control
of the Company increased by an amount at least equal to the percentage
increase, if any, in the U.S. City Average Consumer Price Index for
Urban Wage Earners and Clerical Workers during the preceding two
calendar year period. The Company may withhold from any payments under
the Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or governmental regulation or ruling;
(iii) the Company shall also pay to you, in a lump sum amount
within fifteen business days of the Date of Termination, twice the
amount of the average of the annual bonuses paid to you in the two
calendar years prior to the date of a change in control of the Company.
The Company may withhold from any payments under the Agreement all
federal, state, city or other taxes as shall be required pursuant to any
law or governmental regulation or ruling;
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<PAGE> 6
(iv) (A) the Company shall also pay to you, in a lump sum amount
within fifteen business days of the Date of Termination, twice the
amount of the annual dues payable to any civic, social, professional,
dining, country club or association or any other clubs or associations,
of which you are a member at the date of a change in control of the
Company and the annual dues of such club or association are either
directly paid by the Company or are paid to you by the Company as
reimbursement for your payment of such dues at the date of a change in
control of the Company.
(B) the Company shall also pay to you, in a lump sum
amount within fifteen business days of the Date of Termination, twice
the amount of the annual lease value, as defined in the Internal Revenue
Code, of any automobile provided to you by the Company or to which you
were entitled under the Company's automobile policy on the date of a
change in control of the Company. The Company shall also pay to you, in
a lump sum amount within fifteen business days of the Date of
Termination, twice the amount of the annual operating expenses of such
an automobile paid by the Company in the calendar year prior to the date
of a change in control of the Company;
(v) the Company shall maintain in full force and effect, for
your continued benefit until two (2) years after the Date of
Termination, all life insurance, medical, health and accident and
disability plans, programs or arrangements in which you were entitled to
participate immediately prior to the Date of Termination, provided that
your continued participation is possible under the general terms and
provisions of such plans and programs. In the event that your
participation in any such plan or program is barred, the Company shall
arrange to provide you with benefits substantially similar and no less
favorable to those which you are entitled to receive under such plans
and programs;
(vi) the Company shall provide to you for a period of up to
24 months from Notice of Termination an outplacement service, including
all related fees and expenses, from an outplacement firm mutually agreed
upon by you and the Company, to assist you in obtaining employment;
(vii) In the event that (i) the Company terminates, or seeks
to terminate this Agreement, alleging as justification for such
termination a material breach by you or a cause, or causes, set out in
paragraph 3(ii) hereof and you dispute such termination or attempted
termination, or (ii) you elect to terminate your service hereunder
pursuant to paragraph 3(iii) of this Agreement and the Company disputes
its obligation to provide any benefits described in this Executive
Agreement, the Company shall pay, or reimburse to you, all reasonable
costs incurred by you in such dispute, including attorneys' fees and
costs.
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<PAGE> 7
Further, such reasonable costs shall be paid to you
regardless of the outcome of the dispute; such reasonable costs shall be
paid above and beyond any payment pursuant to any settlement, agreement
or judgment resulting from such dispute; and any payment pursuant to any
settlement, agreement or judgment not made within fifteen business days
of the Date of Termination shall include accrued interest at the rate
equal to the prime rate as published in the Wall Street Journal from
time to time from the sixteenth business day after the Date of
Termination until such payment is made.
The reasonable fees and expenses of counsel selected
by you as hereinabove provided shall be paid or reimbursed to you by the
Company within 30 calendar days of presentation by you of a statement or
statements prepared by such counsel in accordance with its customary
practices.
You shall not be required to mitigate the amount of any
payment and the benefits provided for in this Section 4 by seeking other
employment or otherwise. The amount of any payment and the benefits
provided for in this Section 4 shall not be reduced by any compensation
and benefits received by you as the result of full-time employment by
another employer after the Date of Termination.
5. EXCISE TAX/GROSS-UP PROVISIONS. Notwithstanding
anything contained in this Agreement to the contrary, in the event any
payment to be made or benefit to be provided to you pursuant to this
Agreement (the "Termination Payments") will be subject to the tax (the
"Excise Tax") imposed by section 4999 of the Internal Revenue Code of
1986, as amended (the "Code"), the Company shall pay to you, within
fifteen business days of the Date of Termination, an additional lump sum
amount (the "Gross-Up Payment") such that the net amount retained by
you, after deduction of any Excise Tax on the Termination Payments and
any federal, state and local income tax and Excise Tax upon the Gross-Up
Payment provided for by this paragraph, shall be equal to the
Termination Payments. For purposes of determining whether any of the
Termination Payments will be subject to the Excise Tax and the amount of
such Excise Tax, (i) any other payments of benefits received or to be
received by you in connection with a change in control of the Company or
your termination of employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company,
any person whose actions result in a change in control or any person
affiliated with the Company or such person) shall be treated as
"parachute payments" within the meaning of section 28OG(b)(2) of the
Code, and all "excess parachute payments" within the meaning of section
28OG(b)(1) shall be treated as subject to the Excise Tax, unless in the
opinion of tax counsel selected by the Company's independent auditors
and acceptable to you such other payments or benefits (in whole or in
part) do not constitute parachute payments, or such excess parachute
payments (in whole or in part) represent reasonable compensation for
services actually rendered within the meaning of section 28OG(b)(4) of
the Code, (ii) the amount of the Termination Payments which shall be
treated as subject to the Excise Tax shall be equal to the lesser of (A)
the total amount of the Termination Payments or (B) the amount of
Termination Payments considered excess parachute payments within the
meaning of sections 28OG(b)(1) and (4) (after applying clause (i)), and
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<PAGE> 8
(iii) the value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Company's independent auditors in
accordance with the principles of sections 28OG(d)(3) and (4) of the
Code. For purposes of determining the amount of the Gross-Up Payment,
you shall be deemed to pay federal income taxes at the highest marginal
rate of federal income taxation in the calendar year in which the
Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rates of taxation in the state and locality of your
residence on the Date of Termination, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such
state and local taxes. In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account hereunder at
the time of termination of your employment, you shall repay to the
Company at the time that the amount of such reduction in Excise Tax is
finally determined the portion of the Gross-Up Payment attributable to
such reduction plus interest on the amount of such repayment at the rate
provided in section 1274(b)(2)(B) of the Code. In the event that the
Excise Tax is determined to exceed the amount taken into account
hereunder at the time of the termination of your employment (including
by reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall make
an additional gross-up payment in respect of such excess (plus any
interest and penalty payable to the Internal Revenue Service with
respect to such excess) at the time that the amount of such excess is
finally determined.
6. TERM OF AGREEMENT. This Agreement shall terminate
three (3) years after the date hereof unless prior thereto: (a) a change
in control of the Company, as defined in Section 2 hereof, shall have
occurred in which case the Agreement shall terminate three (3) years
after such a change in control of the Company or (b) the Board shall
have extended the term of this Agreement. The Board intends to review
this Agreement each year and, if appropriate, extend the term of the
Agreement for an additional year.
7. SUCCESSORS; BINDING AGREEMENT.
(i) The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company,
by agreement in form and substance satisfactory to you, to expressly
assume and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a
breach of this Agreement and shall entitle you to compensation from the
Company in the same amount and on the same terms as you would be
entitled hereunder if you terminated your employment for Good Reason,
except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business and/or
assets as aforesaid which executes and delivers the agreement provided
for in this Section 7 or which otherwise becomes bound by all the terms
and provisions of this Agreement by operation of law.
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<PAGE> 9
(ii) This Agreement shall inure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees.
If you should die while any amount would still be payable to you
hereunder if you had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of
this Agreement to your devisee, legatee or other designee or, if there
be no such designee, to your estate.
8. NOTICE. For the purposes of this Agreement, notices
and all other communications provided for in the Agreement shall be in
writing and shall be deemed to have been duly given when delivered or
mailed by certified or registered mail, return receipt requested,
postage prepaid, addressed to the respective addresses set forth on the
first page of this Agreement, provided that all notices to the Company
shall be directed to the attention of the Chief Executive Officer of the
Company with a copy to the Secretary of the Company, or to such other
address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be
effective only upon receipt.
9. MISCELLANEOUS. No provisions of this Agreement may
be modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing signed by you and such officer as may
be specifically designated by the Board of Directors of the Company. No
waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not expressly set forth in this
Agreement, provided, however, that this Agreement shall not supersede or
in any way limit the rights, duties or obligations you may have under
any other written agreement with the Company. The validity,
interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of Illinois.
10. VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall
remain in full force and effect.
11. COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which shall be deemed to be an original
but all of which together will constitute one and the same instrument.
12. ARBITRATION. Any dispute or controversy arising
under or in connection with this Agreement shall be settled exclusively
by arbitration in Springfield, Illinois in accordance with the rules of
the American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction.
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<PAGE> 10
If this letter correctly sets forth our agreement on the
subject matter hereof, kindly sign and return to the Company the
enclosed copy of this letter which will then constitute our agreement on
this subject.
Sincerely,
MARINE CORPORATION
By ___________________________________
Willard Bunn III
Chairman and Chief Executive Officer
______________________________
Executive Officer
Agreed to this ____ day
of ____________________, 1990.
<PAGE> 1
EXHIBIT 10(g)
BANC ONE
SUPPLEMENTAL EXECUTIVE SECURITY
SAVINGS PLAN
Effective January 1, 1987,
as amended effective October 20, 1992
<PAGE> 2
<TABLE>
<CAPTION>
BANC ONE
SUPPLEMENTAL EXECUTIVE SECURITY SAVINGS PLAN
TABLE OF CONTENTS
Page
<S> <C>
PURPOSE/EFFECTIVE DATE 1
ARTICLE 1 DEFINITIONS 2
Section 1.1 Basic 401(k) Plan 2
Section 1.2 Beneficiary 2
Section 1.3 Board 2
Section 1.4 Committee 2
Section 1.5 Compensation 2
Section 1.6 Corporation 2
Section 1.7 Deferral Agreement 2
Section 1.8 Deferred Accounts 2
Section 1.9 Employer 3
Section 1.10 For Cause 3
Section 1.11 Participant 3
Section 1.12 Plan Administrator 3
Section 1.13 Plan Year 3
Section 1.14 Subsidiary 3
Section 1.15 Surviving Spouse 3
ARTICLE II PARTICIPATION 4
Section 2.1 Eligibility 4
Section 2.2 Conditions of Participation 4
Section 2.3 Incorporation of the Basic 401(k) Plan 4
Section 2.4 Election to Defer Compensation 4
Section 2.5 Employer Matching Contributions 5
Section 2.6 Maximum Annual Additions 5
Section 2.7 Deferred Accounts 5
Section 2.8 Statement of Accounts 6
ARTICLE III BENEFIT DISTRIBUTIONS FROM THE PLAN 7
Section 3.1 Timing and Form of Distributions 7
Section 3.2 Acceleration of Benefit Payments 7
Section 3.3 Withholding and Deductions 8
Section 3.4 Beneficiary Designations 8
Section 3.5 Rights to Benefits 8
ARTICLE IV ADMINISTRATION 9
Section 4.1 Administrative Powers and Duties 9
Section 4.2 Committee Procedures 9
Section 4.3 Expenses 10
Section 4.4 Records 10
Section 4.5 Determinations 10
Section 4.6 Incapacity of Recipient 11
Section 4.7 Action by the Corporation 11
Section 4.8 Exemption from Liability/Indemnification 11
Section 4.9 Nonalienation of Benefits 12
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
BANC ONE
SUPPLEMENTAL EXECUTIVE SECURITY SAVINGS PLAN
TABLE OF CONTENTS
Page
<S> <C> <C>
ARTICLE V AMENDMENT OR TERMINATION 13
Section 5.1 Amendment or Termination 13
Section 5.2 Sale or Liquidation of an Employer 13
Section 5.3 Transfer Between Employers 13
ARTICLE VI GENERAL PROVISIONS 14
Section 6.1 General Conditions 14
Section 6.2 Rights to Benefits 14
Section 6.3 Offsets to Benefits 14
Section 6.4 Forfeitures of Benefits 15
Section 6.5 Corporate Successors 15
Section 6.6 ERISA Status 15
Section 6.7 Construction 15
Section 6.8 Controlling Law 15
Section 6.9 Effect of Invalidity of Provision 15
</TABLE>
<PAGE> 4
BANC ONE
SUPPLEMENTAL EXECUTIVE SECURITY SAVINGS PLAN
PURPOSE
The purpose of the BANC ONE Supplemental Executive Security Savings Plan (the
"Supplemental Plan"), adopted by the Board of Directors of BANC ONE CORPORATION
as of January 1, 1987, amended as of April 30, 1991 and hereby amended and
restated as of January 1, 1992 is to provide Participants with a supplemental
vehicle through which to defer compensation and receive Company matching
contributions in a manner similar to salary deferrals under the BANC ONE
Security Savings Plan (the Basic 401(k) Plan) in the following situations:
1. Deferral of Compensation in excess of either (i) the BANC ONE Security
Savings Plan annual $7,000 maximum pre-tax salary deferment limit (or
such other amount as prescribed by the Internal Revenue Code), or (ii)
BANC ONE Security Savings Plan salary deferral limits pursuant to
applicable Federal nondiscrimination requirements.
2. Deferral of Compensation following employment and prior to eligibility to
participate in the BANC ONE Security Savings Plan.
The Plan is a supplemental executive deferred compensation plan structured to
benefit Participants in a manner which provides incentive to improve the
profitability, competitiveness and growth of BANC ONE and its affiliates.
EFFECTIVE DATE
The Effective Date of this Plan is January 1, 1987.
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<PAGE> 5
ARTICLE I
DEFINITIONS
For the purpose of this Supplemental Plan, the following words and phrases
shall have the meanings indicated, unless the context clearly indicates
otherwise:
SECTION 1.1 - BASIC 401(K) PLAN
"Basic 401(k) Plan" means the BANC ONE Security Savings Plan, a qualified
401(k) savings plan, the terms of which are set forth in a plan document
originally effective April 1, 1986, as it may be amended or restated from time
to time.
SECTION 1.2 - BENEFICIARY
"Beneficiary" means the person, persons or entity designated by the Participant
to receive any benefits payable under the Supplemental Plan pursuant to Section
3.4.
SECTION 1.3 - BOARD
"Board" means the Board of Directors of BANC ONE CORPORATION.
SECTION 1.4 - COMMITTEE
"Committee" means the BANC ONE CORPORATION Personnel and Compensation
Committee, appointed pursuant to the Basic 401(k) Plan. The Committee is
authorized to establish Plan policy and review Plan discretionary decisions
pursuant to Article IV.
SECTION 1.5 - COMPENSATION
"Compensation" means remuneration in the form described in Section 1.13 of the
Basic 401(k) Plan.
SECTION 1.6 - CORPORATION
"Corporation" means BANC ONE CORPORATION, an Ohio corporation and to the extent
provided in Section 7.5, any successor corporation or other entity resulting
from a merger or consolidation into or with the Corporation or transfer or sale
of substantially all of the assets of the Corporation.
SECTION 1.7 - DEFERRAL AGREEMENT
"Deferral Agreement" means an agreement filed by a Participant to effect
deferrals of Compensation hereunder.
SECTION 1.8 - DEFERRED ACCOUNTS
"Deferred Accounts" means the accounts maintained by the Plan Administrator for
each Participant pursuant to Article II. Separate Deferred Accounts shall be
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<PAGE> 6
maintained for each Participant. More than one Deferred Account may be
maintained for each Participant as necessary to reflect the nature of the
account and various fund allocations. A Participant's Deferred Accounts shall
be utilized solely as a device for the measurement and determination of the
amounts to be paid to or on behalf of a Participant pursuant to this
Supplemental Plan. A Participant's Deferred Accounts shall not constitute or
be treated as a trust fund of any kind.
SECTION 1.9 - EMPLOYER
"Employer" means BANC ONE CORPORATION, and/or an applicable participating
Subsidiary or any successor to the business thereof.
SECTION 1.10 - FOR CAUSE
"For Cause" means termination of employment for any act of misconduct which
materially affects BANC ONE CORPORATION or its Subsidiaries, its customers or
clients in a negative manner or termination for any act of dishonesty or breach
of trust.
SECTION 1.11 - PARTICIPANT
"Participant" means a salaried employee of the Corporation or of a Subsidiary
of the Corporation (a) who is in a select group of management, (b) who is
eligible to defer Compensation hereunder by designation of the Chief Executive
Officer of BANC ONE CORPORATION, and (c) who elects to participate by filing a
Deferral Agreement as provided in Article II.
SECTION 1.12 - PLAN ADMINISTRATOR
"Plan Administrator" means the person appointed by the Corporation to represent
the Corporation in the administration of this Supplemental Plan pursuant to the
provisions of Article IV.
SECTION 1.13 - PLAN YEAR
"Plan Year" means a 12-month period commencing January 1 and ending the
following December 31.
SECTION 1.14 - SUBSIDIARY
"Subsidiary" means any corporation which is a member of the controlled group of
corporations of which BANC ONE CORPORATION is the common parent and any other
entity in which BANC ONE CORPORATION owns an 80% or greater interest.
SECTION 1.15 - SURVIVING SPOUSE
"Surviving Spouse" means a person who is married to a Participant at the date
of his death.
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ARTICLE II
PARTICIPATION
SECTION 2.1 - ELIGIBILITY
Eligibility for participation in this Supplemental Plan shall be determined by
the Chief Executive Officer of BANC ONE CORPORATION in his sole discretion, on
an individual basis. Any management employee of BANC ONE CORPORATION or its
Subsidiaries so designated to participate in this Supplemental Plan may elect
hereunder to defer future Compensation (as such term is defined in Section 1.13
of the Basic 401(k) Plan) in such amounts as the Participant could contribute
through salary deferral to the Basic 401(k) Plan: (i) if such Plan was not
subject to the $7,000 maximum pre-tax salary deferral limit (or such other
amount as prescribed by the Internal Revenue Code), or the salary deferral
limits prescribed by applicable Federal nondiscrimination requirements, or (ii)
the Participant could elect to participate in the Basic 401(k) Plan concurrent
with initial employment. Such deferral shall be effected through an applicable
Deferral Agreement delivered personally to the Plan Administrator or deposited
in the mail addressed to the Plan Administrator at the principal address of the
Corporation.
SECTION 2.2 - CONDITIONS OF PARTICIPATION
An individual shall not become a Participant hereunder until he or she
furnishes within a reasonable time limit established by the Plan Administrator
such completed and executed elections, Beneficiary designations, consents and
other documents and information prescribed by the Plan Administrator. Each
person upon becoming a Participant shall be deemed conclusively, for all
purposes, to have assented to the terms and provisions of this Supplemental
Plan and shall be bound thereby.
SECTION 2.3 - INCORPORATION OF THE BASIC 401(K) PLAN
The Basic 401(k) Plan, with any amendments thereto in effect, shall be attached
hereto and is hereby incorporated by reference into and shall be a part of this
Supplemental Plan as is set forth herein. Any amendment made to the Basic
401(k) Plan shall also be incorporated by reference into and from a part of
this Supplemental Plan, effective as of the effective date of such amendment.
The Basic 401(k) Plan, whenever referred to in this Supplemental Plan, shall
mean the Basic 401(k) Plan as it exists on the date any determination is made
of benefits payable under this Supplemental Plan. All terms used herein shall
have the meanings assigned to them under the provisions of the Basic 401(k)
Plan unless otherwise qualified by this Supplemental Plan.
SECTION 2.4 - ELECTION TO DEFER COMPENSATION
(a) Except within the 30-day period following the date the Supplemental Plan
is initially extended to a Participant, the election to defer 1-6% of
Compensation must be made before the beginning of the period of service
for which the Compensation is earned.
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(b) Once an election is made, it shall remain in effect until revoked in
writing by the Participant or the Corporation or pursuant to Section 5.1;
however each subsequent calendar year, a Plan Participant shall have the
opportunity to amend his or her existing elections, in writing in a new
Deferral Agreement, before December 31 of such year, the manner and
extent (within the limits of the Supplemental Plan) to which the
Participant's Compensation in respect to the subsequent calendar year
shall be deferred hereunder.
(c) A Participant who has made an effective election with respect to the
percentage of Compensation to be deferred for a calendar year, may not
change that percentage election after the calendar year has commenced;
provided, however, that the deferral under any Deferral Agreement may be
suspended or amended as provided in Section 5.1. The Participant may
change investment fund elections pursuant to provisions of the Basic
401(k) Plan.
SECTION 2.5 - EMPLOYER MATCHING CONTRIBUTIONS
Each Employer shall cause matching contributions (basic and supplemental) to be
credited to Participant's accounts under this Supplemental Plan in the same
manner and amount as if Compensation deferrals made pursuant to this
Supplemental Plan were permissible salary deferrals under the Basic 401(k)
Plan.
SECTION 2.6 - MAXIMUM ANNUAL ADDITIONS
Notwithstanding anything contained herein to the contrary, the total Annual
Additions (as defined in Section 5.6 of the Basic 401(k) Plan) to this
Supplemental Plan for a Participant shall not exceed the difference between (i)
and (ii):
(i) the lesser of $30,000 or twenty-five percent (25%) of the Participant's
Compensation from the Employers for such Plan Year, after the application
of the Salary Deferral Arrangements, or such other limits as may be
prescribed under the Internal Revenue Code and/or regulations thereunder;
(ii) Annual Additions for the Participant under the Basic 401(k) Plan for the
Plan Year.
The $30,000 limit set forth in the preceding sentence shall be subject to
annual adjustment by the Secretary of the Treasury or his delegate, in
accordance with regulations issued under Section 415(d) of the Internal Revenue
Code, to reflect increases in the cost of living.
SECTION 2.7 - DEFERRED ACCOUNTS
All Compensation which a Participant has elected to defer under the
Supplemental Plan, shall be credited to the Participant's Deferred Accounts in
dollars in the same manner as though contributed as permissible salary
deferrals to the Basic 401(k) Plan. Separate Deferred Accounts shall be
created and maintained by the Plan Administrator for each Participant to
reflect the appropriate allocation of deferred Compensation and Company
matching contributions to accounts and phantom investment funds as though
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maintained under the Basic 401(k) Plan. Such phantom investment funds may be
established solely for record keeping purposes, shall not be required to be
informally funded or held in specific investments or as separated assets and
shall meet all the requirements of Section 7.2 hereof as pertinent to
non-funded, non-qualified deferred compensation plans. Credits and charges
shall be made to the Deferred Accounts in a manner similar to that provided in
the Basic 401(k) Plan.
SECTION 2.8 - STATEMENT OF ACCOUNTS
The Plan Administrator shall provide each Participant (or Beneficiary as
applicable), as soon as practical after the close of each valuation period, a
statement in such form as the Corporation deems desirable, setting forth the
current Plan accounts and balances to the credit of the Participant.
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ARTICLE III
BENEFIT DISTRIBUTIONS FROM THE PLAN
SECTION 3.1 - TIMING AND FORM OF DISTRIBUTIONS
Distributions from this Supplemental Plan shall be made and administered in the
same manner and form and for the same reasons as if made under the Basic 401(k)
Plan with the following exceptions:
a) no distributions including, in-service withdrawals and loans, shall occur
prior to the date the Participant's employment with the Corporation or
its Subsidiaries terminates (by death or otherwise), except as provided
in Section 3.2 hereof; and
b) no distributions shall be made in shares of BANC ONE Stock.
Distributions from the BANC ONE Stock Fund shall be paid in cash based
upon the market value of a share of BANC ONE Common Stock on the open
market for the shares attributable to the Participant's interests in the
BANC ONE Stock Fund as of the last New York Stock Exchange trading day in
the valuation period in which the distribution is processed. No shares
of BANC ONE Stock will be issued in conjunction with the Supplemental
Plan.
c) distributions will be paid in a Lump Sum and processed with distributions
for the valuation period in which the Participant's termination of
employment (by death or otherwise) occurs. If an approved distribution
election form is not received by the 5th business day following the last
day of the valuation period in which termination of employment occurs,
distributions will be made from all funds in cash and appropriate taxes
will be withheld.
SECTION 3.2 - ACCELERATION OF BENEFIT PAYMENTS
The Corporation, with approval of the Personnel and Compensation Committee of
the Board, hereby reserves the right to accelerate the payment of Supplemental
Plan distributions without the consent of the Participant or the Participant's
Surviving Spouse, estate or any other person or persons claiming through or
under the Participant. In making such determinations, due consideration may be
given to the health, financial circumstances and family obligations of the
Participant. In this regard, the Participant may be consulted, however, he
shall have no voice in the decision reached nor any right to an accelerated
payment. The Corporation's determination shall be final and conclusive upon
the Participant and the Surviving Spouse.
Notwithstanding the foregoing, in the event of acceleration of payment to
Participants who have an interest in the BANC ONE Stock Fund, no accelerated
payment in cash attributable to such Fund shall be made until six months from
the most recent deferral of any income or matching contribution to the BANC ONE
Stock Fund.
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SECTION 3.3 - WITHHOLDING AND DEDUCTIONS
All benefit payments made by BANC ONE CORPORATION or any Employer under the
Supplemental Plan to any Participant or Beneficiary shall be subject to
applicable withholding and to such other deductions as shall at the time of
such payment be required under any income tax or other law, whether of the
United States or any other jurisdiction, and, in the case of payments to the
Beneficiary of a Participant, the delivery to the Plan Administrator of all
necessary waivers and other documents. To the extent that an Employer is
required to withhold any current taxes at the time of deferral of Compensation,
such amounts shall be taken out of the portion of the Participant's current
Compensation which is not deferred under this Supplemental Plan.
Determinations by the Plan Administrator as to withholding shall be binding on
the Participant and applicable Beneficiary(ies).
SECTION 3.4 - BENEFICIARY DESIGNATIONS
Each Participant who has Deferred Accounts hereunder may from time to time
designate any person or persons (who may be designated contingently or
successively and who may be an entity other than a natural person) as their
Beneficiary or Beneficiaries to whom Plan benefits are paid if the Participant
dies before receipt of all such benefits. Such Beneficiary designations shall
not be subject to the surviving spouse limitations/requirements applicable to
qualified plans. Each Beneficiary designation shall be filed in the form
prescribed by the Plan Administrator and will be effective only when filed with
the Plan Administrator during the Participant's lifetime. Each beneficiary
designation filed with the Plan Administrator will cancel all Beneficiary
designations previously filed with the Plan Administrator. The revocation of
a Beneficiary designation, no matter how effected, shall not require the consent
of any designated Beneficiary.
If any Participant is not survived by a Beneficiary as designated above, any
death benefit payable thereunder shall be paid to the surviving spouse, if
living or otherwise to the executor or administrator of the Participant's
estate.
SECTION 3.5 - RIGHTS TO BENEFITS
Nothing contained in this Supplemental Plan is intended to give or shall give
any spouse or former spouse of a Participant or any other person any right to
benefits under this Supplemental Plan by virtue of Code Sections 401(a)(11) and
417 (relating to qualified pre-retirement survivor annuities and qualified
joint and survivor annuities) or Code Sections 401(a)(13)(B) and 414(p)
(relating to qualified domestic relations orders) as amended.
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ARTICLE IV
ADMINISTRATION
SECTION 4.1 - ADMINISTRATIVE POWERS AND DUTIES
The Board of Directors of BANC ONE CORPORATION shall designate an officer of
the Corporation to be the Plan Administrator to have the primary administrative
responsibility with respect to the Supplemental Plan in coordination with and
under the direction of the Committee. The Committee and the Plan Administrator
shall together administer the Supplemental Plan and, in this connection, all
policy and discretionary decisions shall be the responsibility of the Committee
and all administrative functions shall be the responsibility of the Plan
Administrator who shall perform the same under the direction of the Committee.
The Committee shall interpret the provisions of the Supplemental Plan where
necessary and may adopt procedures for the administration of the Supplemental
Plan which are consistent with the provisions of the Supplemental Plan and the
rules adopted by the Committee.
The Committee may retain auditors, accountants, record keepers, legal counsel,
consultants and other counsel selected by it. Any Committee member may himself
act in any such capacity, and any such auditors, accountants, record keepers,
legal counsel, consultants and other counsel may be persons acting in the a
similar capacity for the Corporation and may be employees of the Corporation.
The opinion of any such auditor, accountant, record keeper, legal counsel,
consultant or other counsel shall be considered full and complete authority and
protection in respect to any action taken, suffered or omitted by the Committee
in good faith and in accordance with such opinion.
SECTION 4.2 - COMMITTEE PROCEDURES
No Committee member at any time hereunder who is a Participant shall have any
vote in any decision of the Committee made uniquely with respect to such
Committee member or such Committee member's benefits hereunder.
In the event of any disagreement among the Committee members at any time acting
hereunder and authorized to act with respect to any matter, the decision of a
majority of said Committee members authorized to act upon such matter shall be
controlling and shall be binding and conclusive upon all persons, including,
without in any manner limiting the generality of the foregoing, the other
Committee members, the Corporation, its directors, the Plan Administrator, all
persons at any time in the employ of the Corporation and its subsidiaries and
the Participants and their Beneficiaries and upon the respective successors,
assigns, executors, administrators, heirs, next-of-kin and distributees of all
the foregoing.
All action of the Committee hereunder may be taken with or without a meeting.
If taken without a meeting, the action shall be in writing and signed by the
Reviewing Member of the Committee.
Subject to the provisions of the first paragraph in this Section 4.2, each
additional and each successor Committee member at any time acting hereunder
shall have all the rights and powers (including discretionary rights and
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powers) and all of the privileges and immunities hereby conferred upon the
initial Committee members hereunder, and all of the duties and obligations so
imposed upon the initial Committee members hereunder.
Except as otherwise may be required by any applicable law, no Committee member
at any time acting hereunder shall be required to give any bond or other
security for the faithful performance of duties as such Committee member.
SECTION 4.3 - EXPENSES
The Corporation shall pay the reasonable expenses incurred in the
administration of the Supplemental Plan, including the fees and compensation of
the persons referred to in the second paragraph of Section 4.1. The
Corporation shall pay all other expenses incurred in the administration of the
Supplemental Plan.
Supplemental Plan benefits shall be payable by the Corporation from its general
assets. The cost of the Benefits shall be incurred by each Employer, who has
employees participating in this Supplemental Plan. Each such Employer will be
regularly assessed and obligated to remit to the Corporation the actuarially
determined amount for the Benefits. Such assessments shall be accumulated and
shall be maintained as general assets of the Corporation. The Corporation
shall maintain appropriate accountings and records for this Supplemental Plan.
SECTION 4.4 - RECORDS
The Corporation and the Plan Administrator shall each keep such records and
shall each reasonably give notice to the other of such information, as shall be
proper, necessary or desirable to effectuate the purposes of the Supplemental
Plan, including without in any manner limiting the generality of the foregoing,
records and information with respect to deferral elections, Deferred Accounts,
dates of employment and termination and determinations made hereunder. Neither
the Corporation nor the Plan Administrator shall be required to duplicate any
records kept by the other. To the extent that the Corporation and/or the Plan
Administrator shall prescribe forms for use by the Participants and their
Beneficiaries in communicating with the Corporation or the Plan Administrator,
as the case may be, and shall establish periods during which communications may
be received, they shall respectively be protected in disregarding any notice or
communication for which a form shall so have been prescribed and which shall
not be made in such form and any notice or communication for the receipt of
which a period shall so have been established and which shall not be received
during such period. The Corporation, the Plan Administrator and the Committee
shall respectively also be protected in acting upon any notice or other
communication purporting to be signed by any person and reasonably believed to
be genuine and accurate, including the Participant's current mailing address.
SECTION 4.5 - DETERMINATIONS
All determinations hereunder made by the Corporation or the Committee shall be
made in the sole and absolute discretion of the Corporation or of the
Committee, as the case may be.
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In the event that any disputed matter shall arise hereunder, including without
in any manner limiting the generality of the foregoing, any matter relating to
the eligibility of any person to participate under the Supplemental Plan, the
participation of any person under the Supplemental Plan, the amounts payable to
any person under the Supplemental Plan, the amounts payable to any person under
the Supplemental Plan and the applicability and the interpretation of the
provisions of the Supplemental Plan, the decision of the Committee upon such
matter shall be binding and conclusive upon all persons, including, without in
any manner limiting the generality of the foregoing, the Corporation, its
directors, the Plan Administrator, all persons at any time in the employ of the
Corporation, the Participants and their Beneficiaries and upon the respective
successors, assigns, executors, administrators, heirs, next-of-kin and
distributees of all the foregoing.
SECTION 4.6 - INCAPACITY OF RECIPIENT
If any person entitled to a benefit payment under the Supplemental Plan is
deemed by the Corporation to be incapable of personally receiving and giving a
valid receipt for such payment, then, unless and until claim therefore shall
have been made by a duly appointed guardian or other legal representative of
such person, the Corporation may provide for such payment or any part thereof
to be made to any other person or institution then contributing toward or
providing for the care and maintenance of such person. Any such payment shall
be a payment for the account of such person and shall completely discharge all
liability of the Corporation, the Committee, the Plan Administrator, and the
the Supplemental Plan therefor.
SECTION 4.7 - ACTION BY THE CORPORATION
Any action by the Corporation under this Supplemental Plan may be by resolution
of its Board of Directors, or by any person or persons duly authorized by
resolution of said Board to take such action.
SECTION 4.8 - EXEMPTION FROM LIABILITY/INDEMNIFICATION
The members of the Committee and the Plan Administrator, and each of them,
shall be free from all liability, joint or several, for their acts, omissions
and conduct, and for the acts, omissions and conduct of their duly appointed
agents, in the administration of the Supplemental Plan, except for those acts
or omissions and conduct resulting from willful misconduct or lack of good
faith.
The Corporation shall indemnify each member of the Committee, the Plan
Administrator and any other employee, officer or director of the Corporation
against any claims, loss, damage, expense and liability, by insurance or
otherwise, reasonably incurred by the individual in connection with any action
or failure to act by reason of membership on the Committee or performance of an
authorized duty or responsibility for or on behalf of the Corporation pursuant
to the Supplemental Plan unless the same is judicially determined to be the
result of the individual's gross negligence or willful misconduct. Such
indemnification by the Corporation shall be made only to the extent such
expense or liability is not payable to or on behalf of such person under any
liability insurance coverage. The foregoing right to indemnification shall be
in addition to any other rights to which any such person may be entitled as a
matter of law.
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SECTION 4.9 - NONALIENATION OF BENEFITS
Except as otherwise provided by law, no benefit, payment or distribution under
this Supplemental Plan shall be subject either to the claim of any creditor of
a Participant, Surviving Spouse or Beneficiary, or to attachment, garnishment,
levy, execution or other legal or equitable process, by any creditor of such
person, and no such person shall have any right to alienate, commute,
anticipate or assign (either at law or equity) all or any portion of any
benefit, payment or distribution under this Supplemental Plan.
The Supplemental Plan shall not in any manner be liable for or subject to the
debts, contracts, liabilities, engagements or torts of any person entitled to
benefits hereunder.
In the event that any Participant's benefits are garnisheed or attached by
order of any court, the Plan Administrator may elect to bring an action for a
declaratory judgment in a court of competent jurisdiction to determine the
proper recipient of the benefits to be paid by the Supplemental Plan. During
the pendency of said action, any benefits that become payable may be paid into
the court as they become payable, to be distributed by the court to the
recipient as it deems proper at the close of said action.
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ARTICLE V
AMENDMENT OR TERMINATION
SECTION 5.1 - AMENDMENT OR TERMINATION
The Corporation reserves the right in its sole discretion to amend or terminate
this Supplemental Plan at any time. In the event of a termination, the
Corporation in its sole discretion may pay Supplemental Retirement benefits to
those Participants participating in the Supplemental Plan on the date of such
termination, to the extent such Supplemental Retirement Benefits would be
otherwise payable as defined in Section 3.1 and 3.2, determined on the basis
that each Participant's presumed termination date was the date the Supplemental
Plan was terminated. However, no amendment or termination shall affect any
benefit then payable to the Participants or Beneficiaries under this
Supplemental Plan as determined prior to such effective date of the amendment
or termination.
In the event it should at any time be determined for any reason by an
applicable agency of the United States Government or by any court of applicable
jurisdiction that the Plan does not qualify under the exclusions of Section
201(2), Section 301(a)(3) and Section 401(a)(1) of ERISA, the Plan shall be
deemed terminated as of the date of such determination unless alternative
action is taken by the Board.
SECTION 5.2 - SALE OR LIQUIDATION OF AN EMPLOYER
In the event BANC ONE CORPORATION should sell or otherwise directly or
indirectly dispose of sufficient interest in an Employer so that it no longer
owns 80% of such Subsidiary, or an Employer is liquidated, BANC ONE CORPORATION
shall assume and guarantee payment of such Employer's remaining deferred
Compensation obligations under this Supplemental Plan.
SECTION 5.3 - TRANSFER BETWEEN EMPLOYERS
In the event that a Participant's employment is transferred from one Employer
to another Employer, the transfer shall not adversely affect the administration
of amounts then credited to the Deferred Account(s) of such Participant on or
as of the date of transfer. The Participant's new Employer shall become
obligated under the terms of the Supplemental Plan to pay any deferred
Compensation amounts credited to the Participant's Deferred Account(s) as of
the first day of valuation period in which the transfer occurs.
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ARTICLE VI
GENERAL PROVISION
SECTION 6.1 - GENERAL CONDITIONS
Except as otherwise expressly provided herein, all terms and conditions of the
Basic 401(k) Plan applicable to a Basic 401(k) Plan benefit shall also be
applicable to a Supplemental Plan benefit payable hereunder. Any Basic 401(k)
Plan benefit or any other benefit payable under the Basic Plan shall be paid
solely in accordance with the terms and conditions of the Basic 401(k) Plan and
nothing in this Supplemental Plan shall operate or be construed in any way to
modify, amend or affect the terms and provisions of the Basic 401(k) Plan.
SECTION 6.2 - RIGHT TO BENEFITS
The sole interest of each Participant and each Beneficiary of a Participant
under the Supplemental Plan shall be to receive the deferred Compensation
benefits provided herein as and when the same shall become due and payable in
accordance with the terms hereof and applicable elections hereunder and neither
any Participant nor any Beneficiary of any Participant shall have any right,
title or interest (legal or equitable) in or to any of the specific property or
assets of BANC ONE CORPORATION or any Employer. Nothing contained herein shall
be construed as providing for assets to be held in trust or escrow or any other
form of asset segregation for the Participant or for any other person or
persons to whom benefits are to be paid pursuant to the terms of this
Supplemental Plan. All benefits hereunder shall be paid solely from the
general assets of BANC ONE CORPORATION or applicable Employer and no Employer
shall maintain any separate fund or other separated assets of BANC ONE
CORPORATION or any Employer be deemed or construed through any of the
provisions of this Supplemental Plan to be held in trust for the benefit of any
Participant or designated Beneficiary(ies) or to be collateral security for the
performance of the obligations imposed by this Supplemental Plan on BANC ONE
CORPORATION or any Employer. The rights of any Participant hereunder and any
Beneficiary of the Participant shall be solely those of an unfunded and
unsecured creditor in respect to the promise of BANC ONE CORPORATION or any
Employer, as applicable, to pay money in the future. Nothing contained in the
Supplemental Plan shall constitute a guaranty by the Corporation or any other
entity or person that the assets of the Corporation will be sufficient to pay
any benefit hereunder.
SECTION 6.3 - OFFSETS TO BENEFITS
Notwithstanding any provisions of the Supplemental Plan to the contrary, the
Corporation may, in its sole and absolute discretion, enforce the right of
offset against any amounts to be paid to a Participant under the Supplemental
Plan attributable to Employer Matching Contributions and earnings thereon
against any debt of the Participant which has been reduced to judgement in
favor of BANC ONE CORPORATION or any of its Subsidiaries.
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SECTION 6.4 - FORFEITURE OF BENEFITS
Notwithstanding any provisions of the Supplemental Plan to the contrary,
benefits under this Supplemental Plan attributable to Employer Matching
Contributions and Earnings thereon shall be forfeited upon:
a) termination of employment prior to vesting under Basic 401(k) Plan; or
b) termination of the Participant's employment by the Corporation For Cause.
SECTION 6.5 - CORPORATE SUCCESSORS
The Supplemental Plan shall not be automatically terminated by a transfer or
sale of assets of the Corporation or by the merger or consolidation of the
Corporation into or with any other corporation or other entity when the
Corporation is not the surviving or continuing corporation, but the
Supplemental Plan shall be continued after such sale, merger or consolidation
only if and to the extent that the transferee, purchaser or successor entity
agrees to continue the Supplemental Plan. In the event that the Supplemental
Plan is terminated by the transferee, purchaser or successor entity, the
transferee, purchaser or successor entity shall be obligated to pay
Supplemental Plan benefits to those Participants participating in the
Supplemental Plan on the date of such termination, to the extent such
Supplemental Plan benefits would be otherwise payable as defined in Section 3.1
and 3.2, determined on the basis that each Participant's presumed retirement
date/termination date was the date the Supplemental Plan was terminated.
SECTION 6.6 - ERISA STATUS
This Plan shall constitute a plan which is unfunded and which is maintained
primarily for the purpose of providing deferred Compensation benefits for a
select group of management or Highly Compensated Employees within the meaning
of Section 202(2), 301(a)(3) and 401(a)(1) of ERISA and the ERISA reporting and
disclosure regulations.
SECTION 6.7 - CONSTRUCTION
In the construction of the Supplemental Plan, the masculine shall include the
feminine and the singular the plural in all cases where such meanings would be
appropriate.
SECTION 6.8 - CONTROLLING LAW
The law of the State of Ohio shall be the controlling state law in all matters
relating to the Plan and shall apply to the extent that it is not preempted by
the laws of the United States of America.
SECTION 6.9 - EFFECT OF INVALIDITY OF PROVISION
If any provision of this Plan is held invalid or unenforceable, such invalidity
or unenforceability shall not affect any other provisions hereof, and this Plan
shall be construed and enforced as if such provisions had not been included.
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IN WITNESS WHEREOF, this amended and restated Supplemental Plan shall be
effective as of January 1, 1992 and has been executed on behalf of the
Corporation by its duly appointed officer this 20th day of October, 1992.
BANC ONE CORPORATION
By:
-------------------------------------
Chief Executive Officer
CORPORATE SEAL
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EXHIBIT 10(h)
BANC ONE CORPORATION
SUPPLEMENTAL EMPLOYEES RETIREMENT PLAN
PURPOSE
The purpose of the BANC ONE CORPORATION Supplemental Employees Retirement Plan
(the "Supplemental Plan") which was originally known as the Benefits
Equalization Plan of First Banc Group of Ohio, Inc. and Its Subsidiaries
adopted by the Board of Directors of BANC ONE CORPORATION on October 24, 1977
and amended as of October 21, 1986, January 1, 1989 and April 20, 1992 and
hereby further amended and restated as of January 1, 1993 is solely to provide
retirement benefits, for employees of BANC ONE CORPORATION and its
Subsidiaries, who participate in the BANC ONE CORPORATION Retirement Plan (the
"Basic Retirement Plan"), in excess of the limitations on qualified retirement
plan benefits imposed by provisions of Sections 415, 401(a)(17) and 404(1) of
the Internal Revenue Code.
The Supplemental Employees Retirement Plan is a non-funded, supplemental
deferred compensation plan structured to benefit Participants in a manner
which provides incentive to improve the profitability, competitiveness and
growth of BANC ONE and its Subsidiaries.
EFFECTIVE DATE
The Effective Date of this amended Supplemental Employees Retirement Plan is
January 1, 1993.
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ARTICLE I
DEFINITIONS
For the purpose of this Supplemental Plan, the following terms shall have the
meanings hereinafter set forth unless the context clearly indicates otherwise:
SECTION 1.1 - BASIC RETIREMENT PLAN
"Basic Retirement Plan" means the BANC ONE CORPORATION Retirement Plan
established effective January 1, 1947 and amended as of January 1, 1969,
January 1, 1989, and various dates subsequent thereto, and hereafter amended
from time to time, or any successor thereto.
SECTION 1.2 - BASIC RETIREMENT PLAN BENEFIT
"Basic Retirement Plan Benefit" means the benefit payable to a Participant
pursuant to the Basic Retirement Plan based on Credited Service recognized by
said plan for benefit accrual, by reason of his termination of employment with
the Corporation and its Subsidiaries.
SECTION 1.3 - BASIC RETIREMENT PLAN SURVIVING SPOUSE BENEFIT
"Basic Retirement Plan Surviving Spouse Benefit" means the pre-retirement
determination of survivor's benefit made pursuant to Article VI of the Basic
Retirement Plan.
SECTION 1.4 - BENEFIT COMMENCEMENT DATE
"Benefit Commencement Date" means the first day of the second month following
the termination of employment or such later date as the Supplemental
Retirement Benefit can be determined on which the participant shall receive
payments under the Supplemental Plan.
SECTION 1.5 - BOARD
"Board" means the Board of Directors of BANC ONE CORPORATION.
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SECTION 1.6 - CODE
"Code" means the Internal Revenue Code of 1986 as amended from time to time,
and any regulations relating thereto.
SECTION 1.7 - CORPORATION
"Corporation" means BANC ONE CORPORATION, an Ohio corporation and, to the
extent provided in Section 6.5 below, any successor corporation or other
entity resulting from a merger or consolidation into or with the Corporation
or a transfer or sale of substantially all of the assets of the Corporation.
SECTION 1.8 - CREDITED SERVICE
"Credited Service" for benefit accrual shall mean the same as defined in
Article III of the Basic Retirement Plan.
SECTION 1.9 - EARLY RETIREMENT DATA
"Early Retirement Date," for a Participant who at termination of employment
had attained age 55 and completed 10 or more Years of Service, shall be the
first day of any month following termination of employment and prior to his
Normal Retirement Date.
SECTION 1.10 - FINAL AVERAGE COMPENSATION
One-twelfth (1/12) of the average of the highest consecutive five (5) years'
annual Compensation of the last ten (10) Plan Years worked immediately
preceding the Participant's Retirement or termination of employment whichever
first occurs. For a Participant who incurs an Approved Absence or who is
rehired after a Break in Service with his Pre-break Service restored, the Plan
Years prior to and following his Approved Absence or Break in Service shall be
considered consecutive Plan Years even though they were not contiguous. For
purposes of this Supplemental Plan, Compensation shall mean an employee's
basic salary or wage paid by the Corporation and its Subsidiaries plus fifty
percent (50%) of overtime, commissions, shift and other differential pay,
accrued bonuses, and compensation received as a result of periodic special
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<PAGE> 4
incentive programs. Compensation shall not include grants, awards or benefits
received under or attributable to incentive plans such as stock options, stock
appreciation rights, stock awards, or performance shares and compensation
shall not include life insurance, club memberships, or other benefits which
are provided by the Corporation or its Subsidiaries to the Participant and
which, for purposes of income or social security tax, constitute imputed
income to the Participant. With respect to an Employee who transferred
directly into the employ of the Corporation or its Subsidiaries from a Related
Company, applicable earnings for services rendered to the Related Company
shall be treated as Compensation from the Corporation for purposes of this
Supplemental Plan. Compensation shall also include any salary deferral
amounts under any employer plan qualified under Sections 125 or 401(k) of the
Internal Revenue Code.
Compensation shall also include 100% of any salary deferral amounts made by a
Participant under the BANC ONE Supplemental Executive Security Savings Plan
and 50% of bonus deferral amounts under the BANC ONE CORPORATION Key
Management Incentive Compensation Deferral Plan.
SECTION 1.11 - FOR CAUSE
"For Cause" means termination of employment for any act of misconduct which
materially affects BANC ONE CORPORATION or its Subsidiaries, its customers or
clients in a negative manner or termination for any act of dishonesty or
breach of trust.
SECTION 1.12 - LATE RETIREMENT DATE
"Late Retirement Date" means the first day of the month next following the
later of the Participant's Normal Retirement Date or actual termination of
employment with BANC ONE CORPORATION or its Subsidiaries.
SECTION 1.13 - NORMAL RETIREMENT DATE
"Normal Retirement Date" means the first day of the month next following the
Participant's 65th birthday.
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<PAGE> 5
SECTION 1.14 - PARTICIPANT
"Participant" means a salaried employee of the Corporation or of a Subsidiary
of the Corporation (a) who is in a select group of management or highly
compensated employees; (b) who is a participant under the Basic Retirement
Plan (or any successor to or replacement of the Basic Retirement Plan); and c)
who is eligible to receive a Basic Retirement Plan Benefit, the amount of
which is reduced by reason of any limitations on benefits by the application
of Sections 415, 401(a)(17) and 404(1) of the Code.
SECTION 1.15 - SERVICE
One year of "Service" is granted for each calendar year of employment during
which the Participant is compensated for 1000 or more hours, pursuant to
Article III of the Basic Retirement Plan.
SECTION 1.16 - SUPPLEMENTAL PLAN
"Supplemental Plan" means the BANC ONE CORPORATION Supplemental Employees
Retirement Plan as described herein.
SECTION 1.17 - SUPPLEMENTAL RETIREMENT BENEFIT
"Supplemental Retirement Benefit" means that benefit, if any, payable to a
Participant pursuant to this Supplemental Plan by reason of his termination of
employment with the Corporation or its Subsidiaries.
SECTION 1.18 - SUPPLEMENTAL SURVIVING SPOUSE BENEFIT
"Supplemental Surviving Spouse Benefit" means the benefit payable to a
Surviving Spouse pursuant to this Supplemental Plan.
SECTION 1.19 - SURVIVING SPOUSE
"Surviving Spouse" means a person who is married to a Participant at the date
of his death.
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<PAGE> 6
ARTICLE II
SUPPLEMENTAL RETIREMENT BENEFITS
SECTION 2.1 - ELIGIBILITY
To receive a benefit under this Supplemental Plan a Participant must qualify
for a benefit under the Basic Retirement Plan, have attained the age of 55
while in active service, completed 10 years of Credited Service and have
terminated his employment relationship with the Corporation or its
Subsidiaries. In no event shall an employee who is not entitled to benefits
under the Basic Retirement Plan be eligible for a benefit under this
Supplemental Plan.
SECTION 2.2 - INCORPORATION OF THE BASIC RETIREMENT PLAN
The Basic Retirement Plan, with any amendments thereto in effect, shall be
attached hereto and is hereby incorporated by reference into and shall be a
part of this Supplemental Plan as if set forth herein. Any amendment made to
the Basic Retirement Plan shall also be incorporated by reference into and
form a part of this Supplemental Plan, effective as of the effective date of
such amendment. The Basic Retirement Plan, whenever referred to in this
Supplemental Plan, shall mean the Basic Retirement Plan as it exists on the
date any determination is made of benefits payable under this Supplemental
Plan. All terms used herein shall have the meanings assigned to them under
the provisions of the Basic Retirement Plan unless otherwise qualified by this
Plan.
SECTION 2.3 - AMOUNT OF BENEFIT
A Participant who has met the eligibility requirements of Section 2.1 above
shall be entitled to receive a lump sum Supplemental Retirement Benefit
payable on the Benefit Commencement Date, in an amount equal to:
(a) the actuarial equivalent of the straight life annuity amount of the Basic
Retirement Plan Benefit to which the Participant would have been entitled
under the BANC ONE formula based on Credited Service under the Basic
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<PAGE> 7
Retirement Plan if such benefit were computed using the Final Average
Compensation without any limitations on benefits imposed by application of
Sections 415, 401(a)(17) or 404(1) of the Code;
MINUS
(b) the actuarial equivalent of the straight life annuity amount of the
respective Basic Retirement Benefit actually payable to the eligible
Participant under the Basic Retirement Plan.
The amounts described herein shall be determined by the same actuarial
adjustments as those specified in the Basic Retirement Plan and computed as of
the date of termination of employment of the Participation with the
Corporation and all of its Subsidiaries.
SECTION 2.4 - BENEFIT ELECTION AND APPROVAL OF CORPORATION
Participant may elect the Normal Retirement Date, the Late Retirement Date or
Early Retirement Date as defined in the Basic Retirement Plan. Subject to the
provisions of the Basic Retirement Plan, benefits commencing prior to the
Normal Retirement Date shall be actuarially reduced in accordance with
provisions of the Basic Retirement Plan which pertains to calculation of
benefit amounts.
SECTION 2.5 - VESTING
In the event that Participant remains an employee of BANC ONE CORPORATION or
any of its Subsidiaries after having attained the age of 55 and completed 10
years of Credited Service, his right to Supplemental Benefits shall thereafter
be vested, but no Supplemental Benefits shall be payable hereunder to or in
respect to him until the Benefit Commencement Date.
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<PAGE> 8
ARTICLE III
SUPPLEMENTAL SURVIVING SPOUSE BENEFIT
SECTION 3.1 - ELIGIBILITY FOR SUPPLEMENTAL SURVIVING SPOUSE BENEFIT
A Supplemental Surviving Spouse Benefit will be paid to the Surviving Spouse
under the terms of this Article, if:
a.) a Participant has attained the age of 55 while in active service,
b.) a Participant has at least ten (10) years of Credited Service, and
c.) a Participant dies while actively employed by BANC ONE CORPORATION or
one of its Subsidiaries.
SECTION 3.1 - AMOUNT OF BENEFIT
The amount of the Supplemental Surviving Spouse Benefit payable to a Surviving
Spouse shall be equal to:
(a) the amount of the Basic Retirement Plan Surviving Spouse Benefit to which
the Surviving Spouse would have been entitled under the BANC ONE formula
based on Credited Service under the Basic Retirement Plan if such benefit
were computed using the Final Average Compensation without giving effect
to any limitation on benefits imposed by application of Sections 415,
401(a)(17) or 404(1) of the Code;
MINUS
(b) the amount of the Basic Retirement Plan Surviving Spouse Benefit actually
payable to the Surviving Spouse under the Basic Retirement Plan.
SECTION 3.3 - FORM AND COMMENCEMENT OF BENEFIT
A Supplemental Surviving Spouse Benefit shall be computed as of the date of
Participant's death and payable in a lump sum on the Benefit Commencement
Date. The amount of the lump sum payment shall be determined by the same
actuarial adjustments as specified in the Basic Retirement Plan concerning
calculation of the Surviving Spouse Benefit.
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<PAGE> 9
SECTION 3.4 - RIGHTS TO BENEFITS
Nothing contained in this Supplemental Plan is intended to give or shall give
any spouse or former spouse of a Participant or any other person any right to
benefits under this Supplemental Plan by virtue of Code Sections 401(a)(11)
and 417 (relating to qualified pre-retirement survivor annuities and qualified
joint and survivor annuities) or Code Sections 401(a)(13)(B) and 414(p)
(relating to qualified domestic relations orders) as amended.
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<PAGE> 10
ARTICLE IV
ADMINISTRATION
SECTION 4.1 - ADMINISTRATIVE POWERS AND DUTIES
The Corporation shall have the primary administrative responsibility for the
Supplemental Plan including all policy and discretionary decisions. The
Corporation shall also interpret the provisions of the Supplemental Plan where
necessary and adopt procedures for the administration of the Supplemental
Plan. Any determination or decision by the Corporation shall be conclusive
and binding on all persons.
All provisions set forth in the Basic Retirement Plan with respect to the
administrative powers and duties of the Corporation, expenses of
administration, and procedures for filing claims shall also be applicable with
respect to the Supplemental Plan. The Corporation shall be entitled to
rely conclusively upon all tables, valuations, certificates, opinions and
reports furnished by any actuary, accountant, controller, counsel or other
person employed or engaged by the Corporation with respect to the Supplemental
Plan.
SECTION 4.2 - INDEMNIFICATION
To the extent permitted by law and as authorized in Section 4.2 herein, any
person, persons or entity authorized to act on behalf of the Corporation,
shall not be liable to any person for any action taken or omitted in
connection with the interpretation and administration of this Supplemental
Plan, unless attributable to his/their own gross negligence or willful
misconduct. The Corporation shall indemnify the said person, persons or
entity against any and all claims, losses, damages, expenses, including
counsel fees, incurred by him/them, and any liability, including any amounts
paid in settlement with his/their approval, arising from his/their action or
failure to act, except when the same is judicially determined to be
attributable to his/their gross negligence or willful misconduct.
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<PAGE> 11
SECTION 4.3 - RECORDS
The Corporation shall keep such records as shall be proper, necessary or
desirable to effectuate the purpose of the Plan. To the extent that the
Corporation shall prescribe forms for use by the Participants and their
Surviving Spouse in communicating with the Corporation and shall establish
periods during which communications must be received, it shall be protected in
disregarding any notice or communication for which a form shall so have been
prescribed and which shall not be made in such form and any notice or
communication for the receipt of which a period shall so have been established
and which shall not be received during such period. The Corporation shall
also be protected in acting upon any notice or other communication purporting
to be signed by any person and reasonably believed to be genuine and accurate,
including the Participant's current mailing address.
SECTION 4.4 - DETERMINATIONS
All determinations hereunder made by the Corporation shall be made in the sole
and absolute discretion of the Corporation.
In the event that any disputed matter shall arise hereunder, including,
without in any manner limiting the generality of the foregoing, any matter
relating to the eligibility of any person to participate under the
Supplemental Plan, the participation of any person under the Supplemental Plan
and, the amounts payable to any person under the Supplemental Plan and the
applicability and the interpretation of the provisions of the Supplemental
Plan, the decision of the Corporation upon such matter shall be binding and
conclusive upon all persons, including, without in any manner limiting the
generality of the foregoing, the Corporation, its directors, all persons at
any time in the employ of the Corporation, the Participants and their
Surviving Spouses and upon the respective successors, assigns, executors,
administrators, heirs, next-of-kin and distributees of all the foregoing.
SECTION 4.5 - INCAPACITY OF RECIPIENT
If any person entitled to a benefit payment under the Supplemental Plan is
deemed by the Corporation to be incapable of personally receiving and giving a
valid receipt for such payment, then, unless and until claim therefore shall
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<PAGE> 12
have been made by a duly appointed guardian or other legal representative of
such person, the Corporation may provide for such payment or any part thereof
to be made to any other person or institution then contributing toward or
providing for the care and maintenance of such person. Any such payment shall
be a payment for the account of such person and shall completely discharge all
liability of the Corporation and the Supplemental Plan therefor.
SECTION 4.6 - ACCELERATION OF BENEFIT PAYMENTS
The Corporation hereby reserves the right to accelerate the payment of
Supplemental Plan distributions without the consent of the Participant or the
Participant's Surviving Spouse, estate or any other person or persons claiming
through or under the Participant. In making such determinations, due
consideration may be given to the health, financial circumstances and family
obligations of the Participant. In this regard, the Participant may
be consulted, however, he shall have no voice in the decision reached nor any
right to an accelerated payment. The Corporation's determination shall
be final and conclusive upon the Participant and the Surviving Spouse.
SECTION 4.7 - ACTION BY THE CORPORATION
Any action by the Corporation under this Supplemental Plan may be by
resolution of its Board of Directors, or by any person, persons, or entity
duly authorized by resolution of said Board to take such action.
SECTION 4.7 - NONALIENATION OF BENEFITS
Except as otherwise provided by law, no benefit, payment or distribution under
this Supplemental Plan shall be subject either to the claim of any creditor of
a Participant or Surviving Spouse, or to attachment, garnishment, levy,
execution or other legal or equitable process, by any creditor of such person,
and no such person shall have any right to alienate, commute, anticipate or
assign (either at law or equity) all or any portion of any benefit, payment or
distribution under this Supplemental Plan.
The Supplemental Plan shall not in any manner be liable for or subject to the
debts, contracts, liabilities, engagement or torts of any person entitled to
benefits hereunder.
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<PAGE> 13
In the event that any Participant's benefits are garnished or attached by
order of any court, the Corporation may elect to bring an action for a
declaratory judgment in a court of competent jurisdiction to determine the
proper recipient of the benefits to be paid by the Supplemental Plan. During
the pendency of said action, any benefits that become payable may be paid into
the court as they become payable, to be distributed by the court to the
recipient as it deems proper at the close of said action.
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<PAGE> 14
ARTICLE V
AMENDMENT OR TERMINATION
SECTION 5.1 - AMENDMENT AND TERMINATION
The Corporation reserves the right in its sole discretion to amend or
terminate this Supplemental Plan at any time. In the event of a termination,
the Corporation in its sole discretion may pay Supplemental Retirement
benefits to those Participants participating in the Supplemental Plan on the
date of such termination, to the extent such Supplemental Retirement Benefits
would be otherwise payable as defined in Section 2.1, 2.3 and 2.5, determined
on the basis that each Participant's presumed retirement date was the date the
Supplemental Plan was terminated. However, no amendment or termination shall
affect any Supplemental Retirement Benefit then being paid to Participants or
Surviving Spouses under this Supplemental Plan as determined prior to such
effective date of the amendment or termination.
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<PAGE> 15
ARTICLE VI
GENERAL PROVISIONS
SECTION 6.1 - GENERAL CONDITIONS
Except as otherwise expressly provided herein, all terms and conditions of the
Basic Retirement Plan applicable to a Basic Retirement Plan Benefit or a Basic
Retirement Plan Surviving Spouse Benefit shall also be applicable to a
Supplemental Retirement Benefit or a Supplemental Surviving Spouse Benefit
payable hereunder. Any Basic Retirement Plan Benefit or Basic Retirement Plan
Surviving Spouse Benefit or any other benefit payable under the Basic
Retirement Plan shall be paid solely in accordance with the terms and
conditions of the Basic Retirement Plan and nothing in this Supplemental Plan
shall operate or be construed in any way to modify, amend or affect the terms
and provisions of the Basic Retirement Plan.
SECTION 6.2 - RIGHTS TO BENEFITS
No Participant or Surviving Spouse shall have any right to a benefit under the
Supplemental Plan except in accordance with the terms of the Supplemental Plan.
No Participant, Surviving Spouse or any other person shall have any interest
in any particular assets of the Corporation by reason of the right to receive
a benefit under the Supplemental Plan and any such Participant, Surviving
Spouse or other person shall have only the rights of a general unsecured
creditor of the Corporation with respect to any rights under the Supplemental
Plan.
Nothing contained in the Supplemental Plan shall constitute a guaranty by the
Corporation or any other entity or person that the assets of the Corporation
will be sufficient to pay any benefit hereunder.
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<PAGE> 16
SECTION 6.3 - OFFSETS TO BENEFITS
Notwithstanding any provisions of the Supplemental Plan to the contrary, the
Corporation may, in its sole and absolute discretion, enforce the right of
offset against any amounts to be paid to a Participant under the Supplemental
Plan against any debt of the Participant which has been reduced to judgment in
favor of BANC ONE CORPORATION or any of its Subsidiaries.
SECTION 6.4 - FORFEITURE OF BENEFITS
Notwithstanding any provisions of this Supplemental Plan to the contrary,
benefits under this Supplemental Plan shall be forfeited upon:
a) termination of employment prior to: attaining the age of 55, having 10
years of Credited Service, and vesting under Basic Retirement Plan; or
b) death of a Participant who is not survived by a Surviving Spouse; or
c) termination of the Participant's employment by the Corporation For Cause;
or
d) the benefit is unclaimed pursuant to Section 6.7 below.
SECTION 6.4 - FORFEITURE OF BENEFITS
The Supplemental Plan shall not be automatically terminated by a transfer or
sale of assets of the Corporation or by the merger or consolidation of the
Corporation into or with any other corporation or other entity when the
Corporation is not the surviving or continuing corporation, but the
Supplemental Plan shall be continued after such sale, merger or consolidation
only if and to the extent that the transferee, purchaser or successor entity
agrees to continue the Supplemental Plan. In the event that the Supplemental
Plan is terminated by the transferee, purchaser or successor entity, the
transferee, purchaser or successor entity shall be obligated to pay
Supplemental Retirement Benefits to those Participants participating in the
Supplemental Plan on the date of such termination, to the extent such
Supplemental Retirement Benefits would be otherwise payable as defined in
Section 2.1, 2.3 and 2.5, determined on the basis that each Participant's
presumed retirement date/termination date was the date the Supplemental Plan
was terminated.
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<PAGE> 17
SECTION 6.6 - LIMITATIONS ON LIABILITY
Notwithstanding any of the preceding provisions of the Supplemental Plan,
neither the Corporation nor any individual acting as an employee or agent of
the Corporation shall be liable to any Participant, former Participant,
Surviving Spouse or any other person for any claim, loss, liability or expense
incurred in connection with the Supplemental Plan.
SECTION 6.7 - UNCLAIMED BENEFIT
Each Participant and Surviving Spouse of the Participant shall keep the
Corporation informed of his current address and the current address of his
spouse. The Corporation shall not be obligated to search for the whereabouts
of any person. If the location of a Participant is not made known to the
Corporation within three (3) years from the date on which payment of the
Participant's Supplemental Retirement Benefit may be made, payment may be made
as though the Participant had died at the end of the three-year period. If,
within one additional year after such three-year period has elapsed, or,
within three years after the actual death of a Participant, the Corporation is
unable to locate any Surviving Spouse of the Participant, then the Corporation
shall have no further obligation to pay any benefit hereunder to such
Participant or Surviving Spouse or any other person and such benefit shall be
irrevocably forfeited.
SECTION 6.8 - ERISA STATUS
This Supplemental Plan shall constitute a plan which is unfunded and which is
maintained solely for the purpose of providing benefits in excess of the
limits imposed by Code Section 415 to a select group of Employees within the
meaning of Section 202(2), 301(a)(3) and 401(a)(1) of ERISA and the ERISA
reporting and disclosure regulations.
SECTION 6.9 - CONSTRUCTION
In the construction of the Supplemental Plan, the masculine shall include the
feminine and the singular the plural in all cases unless qualified by the
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<PAGE> 18
context. Any headings used herein are included for ease of reference only and
are not to be construed so as to alter the terms hereof.
SECTION 6.10 - CONTROLLING LAW
The law of the State of Ohio shall be the controlling state law in all matters
relating to the Supplemental Plan and shall apply to the extent that it is not
preempted by the laws of the United States of America.
SECTION 6.11 - EFFECT OF INVALIDITY OF PROVISION
If any provision of this Supplemental Plan is held invalid or unenforceable,
such invalidity or unenforceability shall not affect any other provisions
hereof, and this Supplemental Plan shall be construed and enforced as if such
provision had not been included.
SECTION 6.12 - CONTINUED EMPLOYMENT
Nothing contained in this Supplemental Plan shall be construed as a contract
of employment between the Corporation or any Subsidiary and any Participant,
or as a right of any Participant to be continued in employment of the
Corporation or any Subsidiary or as a limitation on the right of the
Corporation or any Subsidiary to discharge any of its employees, with or
without cause.
SECTION 6.13 - STATUS OF PLAN
Nothing contained herein shall be construed as providing for assets to be held
in trust or escrow or any other form of asset segregation for the Participant
or for any other person or persons to whom benefits are to be paid pursuant to
the terms of this Supplemental Plan, the Participant's only interest hereunder
being the right to receive the benefits set forth herein. To the extent the
Participant or any other person acquires a right to receive benefits under
this Supplemental Plan, such right shall be no greater than the right of any
unsecured general creditor of the Corporation.
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<PAGE> 19
SECTION 6.14 - PAYMENTS AND EXPENSES
Supplemental Retirement Benefits and Supplemental Surviving Spouse Benefits
("Benefits") shall be payable by the Corporation from its general assets. The
cost of the Benefits shall be incurred by each BANC ONE CORPORATION Employer,
who has employees participating in this Supplemental Plan. Each such BANC ONE
CORPORATION Employer will be regularly assessed and obligated to remit to the
Corporation the actuarially determined amount for the Benefits. Such
assessments shall be accumulated and shall be maintained as general assets of
the Corporation. The Corporation shall maintain appropriate accountings and
records for this Supplemental Plan. The expenses of administrating this
Supplemental Plan shall be borne by Corporation.
IN WITNESS WHEREOF, this amended and restated Supplemental Plan shall be
effective as of January 1, 1993 and has been executed on behalf of the
Corporation by its duly appointed officer this ___ day of __________ , 1993.
BANC ONE CORPORATION
By
--------------------------
Chief Executive Officer
CORPORATE SEAL
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<PAGE> 1
EXHIBIT 10(i)
THE VALLEY NATIONAL BANK OF ARIZONA
SUPPLEMENTAL EXCESS BENEFIT
RETIREMENT PLAN
<PAGE> 2
<TABLE>
<CAPTION>
TABLE OF CONTENTS
Page
----
<S> <C>
ARTICLE ONE - PREAMBLE 1
ARTICLE TWO - CONSTRUCTION 1
ARTICLE THREE - ELIGIBILITY AND PARTICIPATION 2
ARTICLE FOUR - BENEFITS 2
ARTICLE FIVE - PAYMENT OF BENEFITS 3
ARTICLE SIX - FUNDING 4
ARTICLE SEVEN - ADMINISTRATION 4
ARTICLE EIGHT - AMENDMENT AND TERMINATION OF
THE PLAN 4
ARTICLE NINE - ASSIGNMENT 4
ARTICLE TEN - WITHHOLDING 5
ARTICLE ELEVEN - OTHER BENEFIT PLANS OF THE
BANK OR AFFILIATED COMPANIES 5
ARTICLE TWELVE - MISCELLANEOUS 5
</TABLE>
<PAGE> 3
THE VALLEY NATIONAL BANK OF ARIZONA
SUPPLEMENTAL EXCESS BENEFIT RETIREMENT PLAN
ARTICLE ONE
PREAMBLE
THE VALLEY NATIONAL BANK OF ARIZONA, a national
banking association, hereinafter referred to as the "Bank,"
previously adopted THE RETIREMENT PLAN FOR EMPLOYEES OF THE
VALLEY NATIONAL BANK OF ARIZONA, hereinafter referred to as
the "Retirement Plan" and the INVESTMENT INCENTIVE PLAN FOR
EMPLOYEES OF THE VALLEY NATIONAL BANK OF ARIZONA, hereinafter
referred to as the "Investment Incentive Plan." The Retire-
ment Plan and the Investment Incentive Plan are subject to
the benefit and contribution limitations of Section 415 of
the Internal Revenue Code, hereinafter referred to as the
"Code." By reason of the limitations of Section 415 of the
Code, as incorporated in the Retirement Plan and Investment
Incentive Plan, a Participant's benefits under such Plans may
be reduced from the benefits which would otherwise be payable
under such Plans in the absence of the benefit and contribu-
tion limitations of Section 415. The Employee Retirement
Income Security Act of 1974, hereinafter referred to as the
"Act" authorizes the Bank to establish an "excess benefit
plan" for the purpose of providing retirement benefits to
certain employees in excess of the benefits permitted under
the Plans by reason of Section 415 of the Code. Pursuant to
such authorization, the Bank adopted THE VALLEY NATIONAL BANK
OF ARIZONA SUPPLEMENTAL EXCESS BENEFIT RETIREMENT PLAN,
hereinafter referred to as the "Plan," effective January 1,
1983, to apply to Participants in the Retirement Plan. By
this amendment and restatement in the entirety, the Bank
hereby amends the Plan to extend coverage to Participants in
the Investment Incentive Plan effective as of January 1, 1983.
ARTICLE TWO
CONSTRUCTION
Terms capitalized in the Plan shall have the
meaning given in Article Two of the Retirement Plan and
Article Two of the Investment Incentive Plan, whichever is
applicable, governing definitions and construction, except
where such terms are otherwise defined in the Plan. If any
provision of the Plan is determined for any reason to be
invalid or unenforceable, the remaining provisions shall con-
tinue in full force and effect. All of the provisions of
<PAGE> 4
the Plan shall be construed and enforced according to the
laws of the State of Arizona, and shall be administered
according to the laws of such state, except as otherwise re-
quired by the Act, the Code or other applicable Federal law.
It is the intention of the Bank that the Plan, as adopted by
the Bank, shall constitute an "excess benefit plan" as de-
fined in Section 3(36) of the Act. Benefits under the Plan
shall be paid from the general assets of the Bank and/or
Affiliated Companies, and not from any trust fund or other
segregated fund. The Plan shall be construed in a manner
consistent with the Bank's intention.
ARTICLE THREE
ELIGIBILITY AND PARTICIPATION
The Executive Committee of the Board of Directors
of the Bank shall designate for participation in the Plan
Employees of the Bank and/or Affiliated Companies who are
Participants in the Retirement Plan and/or the Investment
Incentive Plan. Designation of participants in the Plan may
be made individually or by group designation, or both, as
determined by the Executive Committee. An Employee who is
eligible to participate in the Plan shall commence partici-
pation as of the first day of the Plan Year in which the
Executive Committee designates the Employee for participation
in the Plan. Such participation shall continue until the
Executive Committee informs the participant in writing that
he is no longer eligible to participate in the Plan.
ARTICLE FOUR
BENEFITS
Any participant in this Plan who is a Participant
of the Retirement Plan and who receives a benefit under the
Retirement Plan (or such participant's surviving spouse or
annuitant in the event of the participant's death) shall be
entitled to a monthly benefit payable hereunder in accordance
with ARTICLE FIVE of the Plan, equal to the excess, if any,
of (a) the amount of such participant's monthly benefit (or
the surviving spouse's or annuitant's monthly benefit if the
participant has died) under the Retirement Plan determined
without regard to the limitations of Section 4.3 of the
Retirement Plan and Section 415 of the Code, over (b) the
amount of such participant's monthly benefit (or the sur-
viving spouse's or annuitant's monthly benefit if the par-
ticipant has died) actually payable under the Retirement
Plan, as determined under the provisions of the Retirement
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<PAGE> 5
Plan, subject to Section 4.3 of the Retirement Plan and
Section 415 of the Code.
Any participant in this Plan who is a Participant
in the Investment Incentive Plan and who has Accounts under
the Investment Incentive Plan (or such participant's surviv-
ing spouse or designated beneficiary in the event of the
participant's death), shall be entitled to a benefit payable
hereunder in accordance with ARTICLE FIVE of the Plan, equal
to the excess, if any, of (a) the total amount which would be
allocated to the participant's Accounts under the Investment
Incentive Plan, without regard to the limitations of Section
415 of the Code as incorporated therein, over (b) the amount
actually allocated to the participant's Accounts under the
Investment Incentive Plan as a result of the limitations of
Section 415 of the Code as incorporated therein. The par-
ticipant shall be credited with interest on the amount so
determined at the currently prevailing rate credited to the
Money Market Fund of the Investment Incentive Plan as of each
Accounting Date under the Investment Incentive Plan.
Benefits payable under this Plan shall be payable
to a participant (or the participant's spouse, beneficiary or
other annuitant if the participant has died) in the same
manner and subject to all the same options, conditions,
privileges and restrictions as are applicable to the benefits
payable to the participant (or his spouse, beneficiary or
other annuitant) under the Retirement Plan and/or Investment
Incentive Plan, as though such benefits were payable under
the Retirement Plan and/or the Investment Incentive Plan,
without, however, taking into account the limitations of
Section 415 of the Code as set forth in the Retirement Plan
and the Investment Incentive Plan. An election of mode of
payment under the Retirement Plan and/or the Investment
Incentive Plan shall constitute an election under this Plan.
ARTICLE FIVE
PAYMENT OF BENEFITS
Benefits under the Plan shall become payable when
a participant (or his spouse, beneficiary or annuitant if
the participant has died) begins to receive payments under
the Retirement Plan and/or the Investment Incentive Plan, and
shall be payable by the Bank or the Affiliated Company that
employed that participant in the same manner and at the same
time as the benefits payable to the participant (or his spouse,
beneficiary or annuitant if the participant has died) under
the Retirement Plan and/or the Investment Incentive Plan, as
though such benefits were payable under the Retirement Plan
and/or the Investment Incentive Plan.
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<PAGE> 6
ARTICLE SIX
FUNDING
Benefits under the Plan shall be paid from the
general assets of the Bank and/or Affiliated Companies, and
shall not be segregated in a trust fund or otherwise funded
in any manner prior to the time of payment. The Bank and
Affiliated Companies may, in their sole discretion, accrue
and/or accumulate reserves to fund benefits under the Plan.
Such reserves, if any, shall constitute general assets of the
Bank and Affiliated Companies. No participant shall have any
vested rights hereunder nor any right hereunder to any specific
assets of the Bank and/or Affiliated Companies.
ARTICLE SEVEN
ADMINISTRATION
The Plan will be administered by the Committee
which administers the Retirement Plan. With respect to
administration of the Plan, the provisions of Article Eleven
of the Retirement Plan, governing the powers of the Commit-
tee, claim procedures and the scope of responsibility of the
Committee shall be fully applicable.
ARTICLE EIGHT
AMENDMENT AND TERMINATION OF THE PLAN
The Plan may be amended in whole or in part,
prospectively or retroactively, by action of the Bank's
Board of Directors, and may be terminated at any time by
action of the Bank's Board of Directors; provided, how-
ever, that no such amendment or termination shall reduce any
amount payable hereunder to the extent such amount accrued
prior to the date of amendment or termination.
ARTICLE NINE
ASSIGNMENT
No participant or beneficiary of a participant
shall have any right to assign, pledge, hypothecate, antici-
pate or any way create a lien on any amounts payable here-
under. No amounts payable hereunder shall be subject to
assignment or transfer or otherwise be alienable, either by
voluntary or involuntary act, or by operation of law, or sub-
ject to attachment, execution, garnishment, sequestration or
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<PAGE> 7
other seizure under any legal, equitable or other process, or
be liable in any way for the debts or defaults of partici-
pants and their beneficiaries.
ARTICLE TEN
WITHHOLDING
Any taxes required to be withheld from payments to
participants hereunder shall be deducted and withheld by the
Bank or the Affiliated Company making such payments.
ARTICLE ELEVEN
OTHER BENEFIT PLANS OF THE BANK OR AFFILIATED COMPANIES
Nothing contained in the Plan shall prevent a par-
ticipant (or his spouse, beneficiary or annuitant if the
participant has died), from receiving, in addition to any
payments provided for under the Plan, any payments provided
for under the Retirement Plan and/or the Investment Incentive
Plan, or which would otherwise be payable or distributable to
the participant (or to his spouse, beneficiary or annuitant
if he has died) under any plan, policy or arrangement of the
Bank or an Affiliated Company. Nothing in the Plan shall
be construed as preventing the Bank or an Affiliated Com-
pany from establishing any other or different plans providing
for current or deferred compensation for employees.
ARTICLE TWELVE
MISCELLANEOUS
Nothing contained in the Plan shall be construed
as a contract of employment between the Bank or an Affili-
ated Company and an employee, as a right of any employee to
be continued in the employment of the Bank or an Affili-
ated Company, or as a limitation of the right of the Bank
or an Affiliated Company to discharge any of its employees,
with or without cause.
All of the provisions of the Plan shall be binding
upon all persons who shall be entitled to any benefit here-
under, their heirs and personal representatives.
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<PAGE> 8
IN WITNESS WHEREOF, THE VALLEY NATIONAL BANK OF
ARIZONA has signed this instrument the 27th day of November, 1985.
THE VALLEY NATIONAL BANK OF
ARIZONA
By /s/ Leonard W. Huck
-------------------------------
Its President & CAO
---------------------------
"Bank"
Attest:
By /s/ G. E. Wright
--------------------------
Its Cashier
----------------------
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<PAGE> 9
FIRST AMENDMENT TO
THE VALLEY NATIONAL BANK OF ARIZONA
SUPPLEMENTAL EXCESS BENEFIT RETIREMENT PLAN
Effective in 1983, THE VALLEY NATIONAL BANK OF ARIZONA,
a national banking association (hereinafter referred to as the
"Bank") adopted THE VALLEY NATIONAL BANK OF ARIZONA SUPPLEMENTAL
EXCESS BENEFIT RETIREMENT PLAN (hereinafter referred to as the
"Plan") to benefit certain participants in the Retirement Plan
for Employees of The Valley National Bank of Arizona and the In-
vestment Incentive Plan for Employees of The Valley National Bank
of Arizona (hereinafter respectively referred to as the "Retire-
ment Plan" and the "Investment Incentive Plan." Effective Janu-
ary 1, 1987, certain provisions of the Internal Revenue Code en-
acted under the Tax Reform Act of 1986 will restrict contributions
on behalf of certain executives and key employees of the Bank
under the Investment Incentive Plan. By this Amendment, the Bank
desires to amend the Plan for the purpose of supplementing con-
tributions that may no longer be made under the Investment Incen-
tive Plan with benefits under this Plan. By this instrument,
the Bank accomplishes such amendment.
1. This Amendment shall be effective January 1, 1987.
Except as amended by this First Amendment, the Bank hereby rati-
fies the Plan as most recently restated November 27, 1985. Ex-
cept as amended herein, the Plan shall remain in full force and
effect.
<PAGE> 10
2. ARTICLE FOUR of the Plan is hereby deleted in its
entirety, and the following ARTICLE FOUR is inserted in lieu
thereof:
ARTICLE FOUR
BENEFITS
Any participant in this Plan who is a Participant in the
Retirement Plan and who receives a benefit under the Retirement
Plan (or such participant's surviving spouse or annuitant in the
event of the participant's death) shall be entitled to a monthly
benefit payable hereunder in accordance with ARTICLE FIVE of the
Plan, equal to the excess, if any, of (a) the amount of such par-
ticipant's monthly benefit (or the surviving spouse's or annui-
tant's monthly benefit if the participant has died) under the Re-
tirement Plan determined without regard to the limitations of Sec-
tion 4.3 of the Retirement Plan and Section 415 of the Code, over
(b) the amount of such participant's monthly benefit (or the sur-
viving spouse's or annuitant's monthly benefit if the participant
has died) actually payable under the Retirement Plan, as determined
under the provisions of the Retirement Plan, subject to Section
4.3 of the Retirement Plan and Section 415 of the Code.
Any participant in this Plan who is a Participant in the
Investment Incentive Plan and who has Accounts under the Invest-
ment Incentive Plan (or such participant's surviving spouse or
designated beneficiary in the event of the participant's death)
shall be entitled to a benefit payable hereunder in accordance
with ARTICLE FIVE of the Plan, equal to the excess, if any, of (a)
the total amount which would be allocated to the participant's Ac-
counts under the Investment Incentive Plan, without regard to the
limitations of Section 415 of the Code as incorporated therein,
over (b) the amount actually allocated to the participant's Ac-
counts under the Investment Incentive Plan as a result of the
limitations of Section 415 of the Code as incorporated therein.
The participant shall be credited with interest on the amount so
determined at the currently prevailing rate credited to the Money
Market Fund of the Investment Incentive Plan as of each Accounting
Date under the Investment Incentive Plan.
Any participant (or such participant's surviving spouse
or designated beneficiary in the event of the participant's death)
in this Plan who is a Participant in the Investment Incentive Plan
and who is unable to direct (or is subject to a refund of direc-
ted amounts) Pre-Tax Required Contributions (as defined in the In-
vestment Incentive Plan) under the Investment Incentive Plan in
the amount of six percent (6%) of Earnings (as defined in the In-
vestment Incentive Plan) by reason of the Seven Thousand Dollar
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<PAGE> 11
($7,000) limitation on such contributions under Section 402(g) of
the Code and the corresponding provisions of the Investment Incen-
tive Plan, or the "anti-discrimination" requirements of Section
401(k)(3) of the Code and the corresponding provisions of the In-
vestment Incentive Plan, shall be entitled to a benefit hereunder
in accordance with ARTICLE FIVE of the Plan equal to the amount
of Employer Contributions (as defined in the Investment Incentive
Plan) that would have been credited to such participant's Employer
Contributions Account (as defined in the Investment Incentive Plan)
as a matching contribution based on the Pre-Tax Required Contri-
butions the participant could have made in the absence of such limi-
tations, together with interest credited on such Employer Contri-
butions as though such Employer Contributions had been credited to
the Money Market Fund of the Investment Incentive Plan (and not
withdrawn) and adjusted as of each Accounting Date under the Invest-
ment Incentive Plan.
Benefits payable under this Plan shall be payable to a
participant (or the participant's spouse, beneficiary or other
annuitant if the participant has died) in the same manner and sub-
ject to all the same options, doncitions, privileges and restric-
tions as are applicable to the benefits payable to the participant
(or his spouse, beneficiary or other annuitant) under the Retire-
ment Plan and/or Investment Incentive Plan, as though such bene-
fits were payable under the Retirement Plan and/or the Investment
Incentive Plan, without, however, taking into account the limita-
tions of Section 415 of the Code as set forth in the Retirement
Plan and the Investment Incentive Plan. An election of mode of pay-
ment under the Retirement Plan and/or the Investment Incentive Plan
shall constitute an election under this Plan.
IN WITNESS WHEREOF, THE VALLEY NATIONAL BANK OF ARIZONA,
has signed this instrument this 31st day of December, 1986.
THE VALLEY NATIONAL BANK OF
ARIZONA
By /s/
--------------------------------
Its Chairman of the Board
---------------------------
ATTEST:
By /s/ G. E. Wright
-------------------------
Its Cashier
----------------------
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<PAGE> 12
RESOLUTION
WHEREAS, Section 415 of the Internal Revenue Code imposed certain
limitations on pension payments from the Retirement Plan for Employees of The
Valley National Bank of Arizona;
WHEREAS, The Board of Directors deems it to be in the best interest of
the Association to provide supplemental payments to certain executives of the
Association and its corporate affiliates, to be designated by the Executive
Committee of the Board of Directors;
NOW, THEREFORE, BE IT RESOLVED, That The Valley National Bank of
Arizona Supplemental Benefit Plan presented to this meeting be, and the same
hereby is, approved and adopted;
RESOLVED FURTHER, That the Chairman of the Board or the President of
this Association be, and he hereby is, authorized, empowered and directed, for
and on behalf of this Association, and in its corporate name, and as its
corporate act and deed, to execute the Supplemental Benefit Plan with such
changes, deletions or additions therein as he may approve, his execution
thereof to conclusively evidence his approval of such changes, deletions or
additions;
RESOLVED FURTHER, That the Executive Committee of the Board of
Directors of this Association shall designate for participation in said
Supplemental Benefit Plan such officers and other employees of this Association
and affiliated corporations as said Executive Committee shall determine, in its
sole and absolute discretion.
RESOLVED FURTHER, That the acts and deeds of the officers of this
Association and the Executive Committee necessary to carry out the intent and
purpose of these resolutions be, and the same hereby are, ratified, confirmed,
approved and adopted as the acts and deeds of this Association.
I, G. E. Wright, Vice President and Cashier of The Valley National
Bank of Arizona, hereby certify that the above is a true copy of a resolution
adopted by the Board of Directors of The Valley National Bank of Arizona at a
meeting held July 20, 1983.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the seal
of said Bank this 25th day of August, 1983.
/s/ G. E. Wright
--------------------------------
Vice President and Cashier
<PAGE> 13
RESOLUTION
WHEREAS, Section 415 of the Internal
Revenue Code of 1954 (the "Code") imposes certain
limitations on benefits payable from qualified
employee pension and profit sharing plans;
WHEREAS, The limitations of Section 415
of the Code will reduce the benefits payable to
certain executives and key employees of The Valley
National Bank of Arizona (the "Corporation") and
its corporate affiliates under the Retirement Plan
for Employees of The Valley National Bank of
Arizona (the "Retirement Plan") and the Investment
Incentive Plan for Employees of The Valley National
Bank of Arizona (the "Investment Incentive Plan");
WHEREAS, The Board of Directors of the
Corporation deems it to be in the best interest of
the Corporation and its corporate affiliates to
establish an "excess benefit plan" as defined in
Section 3(36) of the Employee Retirement Income
Security Act of 1974 under which certain executives
and key employees of the Corporation and its
corporate affiliates designated by the Executive
Committee of the Board of Directors will have their
benefit payments under the Retirement Plan and the
Investment Incentive Plan supplemented by payments
designed to ensure that the total benefits received
by such executives and key employees under the
Retirement Plan and the Investment Incentive Plan
and under the "excess benefit plan" will equal the
benefits to which the executives or key employees
would have been entitled under the Retirement Plan
and the Investment Incentive Plan in the absence of
the limitations of Section 415 of the Code;
WHEREAS, As a Supplemental Excess Benefit
Retirement Plan was adopted at a meeting on July
20, 1983;
WHEREAS, The Board of Directors now
desires to amend the Plan to extend its coverage to
executives and key employees whose benefits under
the Investment Incentive Plan will be reduced by
the limitations of Section 415 of the Code;
NOW THEREFORE BE IT RESOLVED, That the
Plan be amended to extend its coverage to certain
executives and key employees designated by the
Executive Committee of the Board of Directors of
the Corporation, whose company contribution alloca-
tions under the Investment Incentive Plan will be
reduced as a result of the limitations of Section
415 of the Code; and
<PAGE> 14
RESOLVED FURTHER, That said amendment
shall be effective as of January 1, 1983; and
RESOLVED FURTHER, That the President or a
Vice President be and hereby is authorized to
execute such amendments or revised plan documents
as in his opinion will carry out the objectives of
these resolutions; and
RESOLVED FURTHER, That the acts and deeds
of the officers of the Corporation necessary to
carry out the intent and purpose of these resolu-
tions be, and the same hereby are, ratified,
confirmed and adopted as the acts and deeds of the
Corporation.
I, G. E. Wright, Senior Vice President and Cashier of The
Valley National Bank of Arizona, do hereby certify that the fore-
going is a copy of a Resolution adopted by the Board of Directors of
The Valley National Bank of Arizona at a meeting held November 20,
1985, and entered on the minutes of the Bank.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
the seal of said Bank this 19th day of December, 1985.
/s/ G. E. Wright
------------------------------
Senior Vice President & Cashier
<PAGE> 1
EXHIBIT 10(j)
INTRODUCTION
American Fletcher Corporation ("Corporation") has
created a deferred compensation plan to provide you, as a
key management employee of the Corporation or one of its
affiliates, with the opportunity to custom-design your own
retirement income and family financial security planning.
The name of the plan is the American Fletcher Corporation
Deferred Compensation Plan ("Plan").
The purpose of this Summary is to explain the principal
provisions of the Plan. The actual Plan provisions are set out
in a more formal Plan document, a copy of which will be avail-
able for you. Failure to mention or describe any provision of
that document in this Summary does not change the full force and
effect of that provision as part of the Plan. In the case of any
discrepancy between this Summary and the Plan document, the
Plan document will govern.
-1-
<PAGE> 2
PRINCIPAL GOALS OF THE PLAN
- - Allow you to defer current income on a pre-tax
basis.
- - Provide you the opportunity to custom-design a
retirement plan in excess of and independent of
Social Security and any other retirement benefits
to which you may be entitled.
- - Increase the survivor benefits payable to your
family in the event of death.
- - Provide many of the same characteristics of a tax
shelter but without the associated risk.
- - Demonstrate in real terms the Corporation's
appreciation of your contribution to its success.
-2-
<PAGE> 3
PLAN OPERATION HIGHLIGHTS
As a selected management employee, you will be
given an opportunity to defer the receipt of income you
might otherwise expect to earn and receive in the future.
In return for the irrevocable election to defer,
you (or your beneficiary) will be entitled to received from
the Corporation a series of monthly payments as follows:
Pre-Retirement Retirement Benefit
Survivor Benefit (Age 65)
---------------- ------------------
180 Monthly Payments Monthly payments for
life (15 years certain)
To determine the benefits that will be payable to
you, if you retire at age 65, you should consult Table 1.
You should be aware, however, that the Corporation's
obligation to pay the benefit listed in Table I is subject
to the limitations described in this document, including the
Corporation's right to amend or terminate the Plan, which
right is described in the response to Question 28.
-3-
<PAGE> 4
FACTORS TO CONSIDER IN DECIDING WHETHER TO PARTICIPATE
Details of the Plan follow in a question and
answer format. Among the points to consider in making your
election to participate in the Plan are:
1. The extent to which the income payable
under the qualified retirement plans in which you
participate, Social Security, and other sources
will be adequate for your retirement needs.
2. What other opportunities exist to
accumulate financial resources for retirement on a
tax-advantaged basis.
3. How much current income you can afford
to defer and still have sufficient cash for your
immediate or short-term needs.
4. What the estimated needs of your
dependents are for survivor income.
5. What the cost of financing survivor
income benefits with after-tax income would be if
this Plan were not available.
6. The extent to which the income payable
as survivor benefits under the qualified
retirement plans in which you participate and
funds available from the Group Life Plan, as well
as your personal estate assets and Social
Security, will be sufficient for your survivors'
needs.
-4-
<PAGE> 5
QUESTIONS AND ANSWERS
1. HOW ARE RETIREMENT INCOME BENEFITS DETERMINED?
With the assistance of its consultant, the
Corporation has developed a system of benefits for
Plan participants. Those benefits are set out in
the Tables at the end of the Summary. Payment of
the amounts listed in the Tables, however, is
subject to the limitations described in the
following Questions and Answers.
2. WHO IS ELIGIBLE TO PARTICIPATE IN THE PLAN?
Any employee who is a participant of The
Performance Incentive Plan ("PIP").
3. HOW MUCH CAN BE DEFERRED?
The minimum amount that would otherwise be payable
to you during any calendar year that can be
deferred is $2,000. The maximum amount that would
otherwise be payable to you during any calendar
year that can be deferred is the greater of
$10,000 or 10% of your bonus and base salary
(without reduction on account of any election made
by you pursuant to this Plan or any other plan of
your employer). The amount of the deferral must
be an even multiple of $1,000.
4. WHAT SOURCES OF INCOME CAN BE DEFERRED?
You may defer either a portion of your PIP bonus,
your annual base salary, or a combination of both.
Before 1986, you will be given the opportunity to
defer a portion of your PIP bonus payable in 1986,
your 1986 base salary, and your PIP bonus payable
in 1987. Any election to defer your PIP bonus
payable in 1987 will be effective only if the
Corporation decides to permit the deferral of
amounts that would otherwise be paid in 1987.
After 1985, to the extent permitted by the
Executive Committee of American Fletcher National
Bank and Trust Company ("Executive Committee"),
you will be given an opportunity before the end of
-5-
<PAGE> 6
each calendar year to defer a portion of your PIP
bonus paid with respect to the following year, a
portion of your base salary for the following year,
or a combination of both.
5. WHEN WILL I BE ELIGIBLE FOR NORMAL RETIREMENT BENEFITS?
You will be eligible for normal retirement benefits
on your normal retirement date, which is the first
day of the calendar month coincident with or, if
none is coincident with, next following your sixty-
fifth (65th) birthday.
6. HOW ARE NORMAL RETIREMENT INCOME BENEFITS PAYABLE?
Normal retirement benefits are payable monthly for
life beginning on the first day of the month
following the later of the month in which you reach
age sixty-five (65) or the month in which you retire.
If you die before receiving 180 monthly payments,
your beneficiary will receive the balance of those
payments, until a total of 180 monthly payments
has been made. The annual amount of your normal
retirement benefit will be determined pursuant to
Table 1.
7. WHEN WILL I BE ELIGIBLE FOR EARLY RETIREMENT BENEFITS?
You will be eligible for early retirement benefits,
if you retire on an early retirement date. An
early retirement date with respect to any deferred
amount is any date on which you retire before your
normal retirement date, provided that you have
attained age fifty-five (55), and at least two full
calendar years have passed since the beginning of
the calendar year in which you deferred that amount.
8. HOW IS THE LEVEL OF BENEFIT PAYMENTS DETERMINED, IF I
AM ELIGIBLE FOR AN EARLY RETIREMENT BENEFIT?
Subject to the following provisions of this para-
graph, payment of your early retirement benefit
will be made in the same manner, at the same times,
and in the same amounts as if you had remained
employed until your normal retirement date. You
may, however, request that the Executive Committee
-6-
<PAGE> 7
cause distribution of your benefits to begin on
the first day of the month coincident with or, if
none is coincident with, next following your early
retirement date. The Executive Committee may grant
or deny your request in its discretion. If the
Executive Committee grants your request for early
distribution of Plan benefits, the amount of your
benefits will be reduced by five-twelfths (5/12ths)
of one percent (1%) for each full or partial month
by which the date on which payment of your benefit
begins precedes your normal retirement date.
9. HOW ARE BENEFITS DETERMINED, IF MY EMPLOYMENT IS
TERMINATED PRIOR TO AGE 65 BECAUSE OF DISABILITY?
For purposes of determining your benefits under
the Plan, you will be treated as if you were
employed during any period prior to your normal
retirement date, if you are disabled (as defined
by the American Fletcher Group LTD Plan) during
that period. Therefore, if you become disabled
and remain disabled until your normal retirement
date, you will be entitled to your normal retirement
benefit on your normal retirement date.
10. HOW ARE BENEFITS DETERMINED, IF MY EMPLOYMENT IS
TERMINATED PRIOR TO AN EARLY RETIREMENT DATE OTHER THAN
BY REASON OF DEATH OR DISABILITY?
If your employment is terminated prior to an early
retirement date (as defined in the response to
Question 7) other than by reason of death or
disability (as defined by the American Fletcher
Corporation Group LTD Plan), you will receive your
deferred amounts, plus interest as determined by
the Executive Committee from time to time; provided-,
however, that the interest rate used by the
Executive Committee will be not less than 10% per
annum.
11. IS IT POSSIBLE THAT MY CONDUCT SUBSEQUENT TO A DEFERRAL
WILL AFFECT THE AMOUNT OF THE BENEFIT TO WHICH I AM
ENTITLED UNDER THE PLAN?
Yes. Under certain circumstances, you may lose
your right to the benefits described elsewhere in
this Summary. If your employment is terminated as
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<PAGE> 8
a direct result of an act or acts of dishonesty
constituting a felony under the laws of the State
of Indiana and resulting or intended to result
directly or indirectly in your gain or enrichment
at the expense of the Company, you shall not be
entitled to the benefits described elsewhere in
this Summary. You shall be entitled, instead,
only to a return of your deferred amount, with
such interest, if any, as determined by the
Executive Committee.
12. UNDER WHAT CIRCUMSTANCES ARE PRE-RETIREMENT SURVIVOR
INCOME BENEFITS PAYABLE?
If you die while still employed as an eligible
participant or while you are deemed to be employed
because of your disability, pre-retirement survivor
income benefits will be payable to your beneficiary.
13. HOW ARE THE SURVIVOR INCOME BENEFITS DETERMINED?
If you are insurable at standard rates by an
insurance company selected the Corporation, survivor
income benefits are as specified in Table 1 without
reference either to your age at the time of your
death or the age of your designated beneficiary.
For example, if an age 45 participant deferred
$10,000, his beneficiary would be entitled to
receive $15,759 per year for fifteen years following
his death for a total of $236,250.
If you are not insurable at standard rates by the
insurance company selected by the Corporation,
survivor income benefits will be determined as
provided in the response to Question 25.
14. WILL A DETERIORATION IN MY HEALTH CAUSE A REDUCTION IN
SURVIVOR INCOME BENEFITS ATTRIBUTABLE TO PRIOR DEFERRALS?
No. Survivor income benefits attributable to prior
deferrals will remain unchanged.
15. WHEN WILL SURVIVOR INCOME BENEFITS BE PAID TO
DESIGNATED BENEFICIARIES, IF I DIE WHILE STILL EMPLOYED?
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<PAGE> 9
Benefits are payable monthly for fifteen years
beginning sixty (60) days following the date of
your death and receipt of a death certificate.
Pre-retirement survivor benefits with respect to a
deferred amount will not be payable should death
occur by reason of suicide within two years of the
deferral of that amount.
16. WHOM MAY I DESIGNATE AS MY BENEFICIARY UNDER THE PLAN?
You may designate one or more individuals or trusts,
as limited by the Staff Benefits and Retirement
Committee of American Fletcher National Bank and
Trust Company ("Administrative Committee") from
time to time.
17. WILL I BE ABLE TO CHANGE THE BENEFICIARIES FOR PRIOR
DEFERRALS?
Yes. You will be able to change beneficiaries for
prior deferrals by filing the appropriate form
with the Administrative Committee.
18. IS THERE ANY AGE LIMITATION FOR ELECTING TO DEFER INCOME?
You may not elect to defer any amount that would
otherwise be payable to you during a calendar year,
if you have attained age sixty-four (64) on or
before the first day of that calendar year.
19. WILL I BE ALLOWED TO DEFER COMPENSATION IN FUTURE YEARS?
Yes, assuming that you remain an eligible
participant and the Executive Committee determines,
in its sole discretion, that further deferrals
will be available.
20. HOW WILL THE CORPORATION MEET ITS OBLIGATIONS UNDER THE
PLAN?
The benefits payable under this Plan will be paid
from the general assets of the Corporation. Your
right to receive payment under the Plan is merely
a contractual right to payment, and the Plan does
-9-
<PAGE> 10
not give you any interest in or right to any of
the funds, property, or assets of the Corporation.
The Corporation reserves the right to invest
deferred amounts in any way that it deems
appropriate under the circumstances including the
use of the deferred amounts in the business of the
Corporation and/or the purchase of and payment for
life insurance contracts on the lives of
participants. If the Corporation elects to
purchase life insurance on any or all of the
participants, the Corporation shall be the applicant
for those policies and at all times shall be the
sole owner and beneficiary under the policies. At
no time will any participant have any interest,
directly or indirectly, in any life insurance
policies on his or her life issued to the
Corporation. Neither the amounts deferred nor any
earnings thereon will at any time be segregated
from the general assets of the Corporation.
21. IF THE CORPORATION CHOOSES TO PURCHASE INSURANCE, WHAT
FACTORS ARE CONSIDERED BY THE INSURANCE COMPANY TO
DETERMINE MY ELIGIBILITY FOR INSURANCE AT STANDARD RATES?
The insurance company will consider your current
health status, your health history, any dangerous
avocations in which you may engage, and, in some
cases, your family health history. A medical
examination may be requested by the insurance
carrier for some participants. Any examination
will be paid for by the insurance company.
22. WHEN WILL MEDICAL EXAMINATIONS BE SCHEDULED?
Examinations will be scheduled shortly after the
deferral elections have been completed and returned.
23. MUST I BE INSURABLE AT STANDARD RATES TO RECEIVE FULL
RETIREMENT INCOME BENEFITS?
No. Your insurability does not affect retirement
income benefits. Your insurability will affect
survivor income benefits as provided in the response
to Question 25.
-10-
<PAGE> 11
24. MAY I CHANGE MY DEFERRAL ELECTION, IF I AM NOT FOUND TO
BE INSURABLE AT STANDARD RATES?
No. Deferral elections are irrevocable after the
date established by the Executive Committee. A
determination by the insurance carrier of your
insurability status should not be expected until
after that date.
25. HOW ARE SURVIVOR INCOME BENEFITS DETERMINED, IF I AM
NOT INSURABLE AT STANDARD RATES?
Survivor income benefits will be equal to your
normal retirement benefit reduced by the reduction
factor from Table 2 for the age at which your death
occurs; provided, however, that the benefits may
not exceed the survivor income benefits for those
participants who are fully insurable at standard
rates, as specified in Table 1. Subject to the
limitation set out in the preceding sentence, the
longer you live, the higher the survivor income
benefit.
For example, if a 45-year-old participant defers
$10,000, his survivor income benefit is calculated
as follows:
<TABLE>
<CAPTION>
15 Year Annual
Age At Survivor Income Total Survivor
Death Benefit Income Benefit
------ --------------- --------------
<S> <C> <C>
46 $3,485 $52,275
50 4,696 70,440
55 6,548 98,220
60 10,045 150,675
</TABLE>
26. IF I AM NOT INSURABLE AT STANDARD RATES NOW BUT BECOME
INSURABLE AT STANDARD RATES IN THE FUTURE, WILL I QUALIFY
FOR UNREDUCED SURVIVOR BENEFITS FOR PRIOR DEFERRALS AT
THAT TIME?
It may be possible to receive unreduced survivor
income benefits for prior deferrals, if you become
insurable at standard rates at a future date.
-11-
<PAGE> 12
27. SHOULD I CANCEL OR REDUCE MY PRIVATE LIFE INSURANCE
COVERAGES IN VIEW OF THE SURVIVOR INCOME BENEFITS PAYABLE
UNDER THIS PLAN?
Probably not, but this depends on your financial
situation. Survivor income benefits payable under
the Plan may alleviate the need to increase your
life insurance coverage.
Survivor income benefits and personal life insurance
proceeds have certain fundamental differences.
Life insurance proceeds are often paid in a lump
sum at your death, are not subject to income
taxation, and may have been structured to avoid
estate taxation. Ordinary life insurance coverage
may be continued for the duration of your lifetime,
while survivor income benefits diminish and
eventually terminate as you receive your retirement
income benefits.
In the event that the deferred income benefits are
subject to reduction or elimination, you may be
presented with a problem, if you have reduced or
cancelled your life insurance coverage and are
then determined to be uninsurable.
28. IS THE PLAN SUBJECT TO REDUCTION OR ELIMINATION BY THE
CORPORATION?
The Corporation fully intends to pay the benefits
provided for under the Plan, but it reserves the
right to amend or terminate the Plan at any time.
No amendment or termination of the Plan, however,
may affect those participants or beneficiaries who
are receiving income payments at the time of the
amendment or termination.
If the Corporation terminates the Plan, the amounts
deferred plus interest as determined by the Executive
Committee will be paid to you in one lump sum payment
as soon as practicable following termination,
provided, however, that the interest rate used by
the Executive Committee may not be less than 10%
per annum.
No amendment to the Plan may diminish your rights
arising out of amounts deferred prior to the
amendment. Notwithstanding the preceding sentence,
the Corporation may reduce the interest rate used
-12-
<PAGE> 13
in determining normal retirement benefits; provided,
however, that the interest rate may not be reduced
below 10% per annum.
29. DOES THE PLAN AFFECT MY PARTICIPATION IN THE QUALIFIED
PLANS IN WHICH I PARTICIPATE?
The Employees' Retirement Plan of American Fletcher
National Bank and Trust Company and Affiliates;
the Employees' Retirement Plan of American Fletcher
Financial Services, Inc.; and the American Fletcher
Thrift Plan will provide (subject to approval of
the Internal Revenue Service) that your compensation,
for purposes of calculating contributions or
benefits under those plans, will not be reduced,
if you elect to defer a portion of your basic salary
under this Plan. If you elect to defer a portion
of your basic salary under this Plan, it is possible
that contributions made on your behalf to the
Employee Stock Ownership Plan of American Fletcher
Corporation and Affiliates will be reduced. In
addition, it is possible that deferrals under this
Plan will affect the aggregate amount of
contributions and benefits on your behalf under
the qualified plans in which you participate.
30. DO I OR MY BENEFICIARY HAVE THE RIGHT TO ASSIGN OR PLEDGE
MY FUTURE BENEFITS UNDER THE PLAN?
No. Neither you nor your beneficiary has the right
to transfer, assign, anticipate, or otherwise
encumber in advance any of the benefits that may
become payable under the Plan.
AMERICAN FLETCHER CORPORATION
-13-
<PAGE> 14
<TABLE>
TABLE 1
BENEFITS PER $1,000 DEFERRAL
<CAPTION>
ANNUAL
AMOUNT OF
NORMAL 15 YEARS TOTAL
RETIREMENT CERTAIN SURVIVOR SURVIVOR
AGE* BENEFIT TOTAL BENEFIT BENEFIT BENEFIT
- ---- ---------- ------------- -------- --------
<S> <C> <C> <C> <C>
30 10,449 156,735 3,803 57,045
31 9,251 138,765 3,642 54,630
32 8,190 122,850 3,488 52,320
33 7,252 108,780 3,341 50,115
34 6,420 96,300 3,200 48,000
35 5,685 85,275 3,065 45,975
36 5,004 75,060 2,930 43,950
37 4,405 66,075 2,802 42,030
38 3,878 58,170 2,679 40,185
39 3,414 51,210 2,561 38,415
40 3,005 45,075 2,449 36,735
41 2,746 41,190 2,242 33,630
42 2,509 37,635 2,053 30,795
43 2,292 34,380 1,879 28,185
44 2,094 31,410 1,720 25,800
45 1,913 28,695 1,575 23,625
46 1,712 25,680 1,406 21,090
47 1,532 22,980 1,255 18,825
48 1,370 20,550 1,120 16,800
49 1,226 18,390 1,000 15,000
50 1,097 16,455 893 13,395
51 984 14,760 825 12,375
52 883 13,245 762 11,430
53 792 11,880 704 10,560
54 710 10,650 651 9,765
55 637 9,555 602 9,030
56 564 8,460 538 8,070
57 499 7,485 481 7,215
58 442 6,630 430 6,450
59 391 5,865 385 5,775
60 346 5,190 344 5,160
61 321 4,815 329 4,935
62 298 4,470 315 4,725
63 277 4,155 301 4,515
<FN>
* Refers to age at beginning of calendar year in which
deferred amounts would have been received by executive in
absence of election to defer.
</TABLE>
<PAGE> 15
<TABLE>
TABLE 2
REDUCTION FACTORS FOR SURVIVOR INCOME BENEFITS FOR
PARTICIPANTS UNINSURABLE AT STANDARD RATES
<CAPTION>
GROSS
SURVIVOR
PAYMENT
AS % OF
AGE AT RETIREMENT
DEATH BENEFIT
------ ----------
<S> <C>
64 79.00%
63 71.33%
62 64.41%
61 58.15%
60 52.51%
59 48.20%
58 44.25%
57 40.62%
56 37.28%
55 34.23%
54 32.03%
53 29.97%
52 28.04%
51 26.24%
50 24.55%
49 22.79%
48 21.15%
47 19.63%
46 18.22%
45 16.91%
44 15.66%
43 14.50%
42 13.42%
41 12.43%
40 11.51%
39 10.65%
38 9.85%
37 9.11%
36 8.42%
35 7.79%
34 7.24%
33 6.73%
32 6.26%
31 5.82%
30 5.41%
</TABLE>
<PAGE> 16
<TABLE>
TABLE 3
ASSUMES ONE $10,000 DEFERRAL
<CAPTION>
ANNUAL
AMOUNT OF
NORMAL 15 YEARS TOTAL
RETIREMENT CERTAIN SURVIVOR SURVIVOR
AGE* BENEFIT TOTAL BENEFIT BENEFIT BENEFIT
---- ---------- ------------- -------- --------
<S> <C> <C> <C> <C>
30 104,485 1,567,275 38,028 570,420
31 92,508 1,387,620 36,421 546,315
32 81,904 1,228,560 34,883 523,245
33 72,516 1,087,740 33,409 501,135
34 64,204 963,060 31,998 479,970
35 56,846 852,690 30,648 459,720
36 50,041 750,615 29,303 439,545
37 44,051 660,765 28,017 420,255
38 38,779 581,685 26,789 401,835
39 34,137 512,055 25,613 384,195
40 30,052 450,780 24,491 367,365
41 27,456 411,840 22,420 336,300
42 25,085 376,275 20,525 307,875
43 22,919 343,785 18,790 281,850
44 20,940 314,100 17,202 258,030
45 19,133 286,995 15,749 236,235
46 17,118 256,770 14,058 210,870
47 15,316 229,740 12,549 188,235
48 13,704 205,560 11,202 168,030
49 12,262 183,930 9,999 149,985
50 10,972 164,580 8,927 133,905
51 9,840 147,600 8,248 123,720
52 8,826 132,390 7,622 114,330
53 7,917 118,755 7,044 105,660
54 7,101 106,515 6,509 97,635
55 6,370 95,550 6,016 90,240
56 5,637 84,555 5,379 80,685
57 4,990 74,850 4,811 72,165
58 4,417 66,255 4,302 64,530
59 3,909 58,635 3,848 57,720
60 3,461 51,915 3,442 51,630
61 3,212 48,180 3,292 49,380
62 2,983 44,745 3,150 47,250
63 2,769 41,535 3,013 45,195
<FN>
* Refers to age at beginning of calendar year in which
deferred amounts would have been received by executive in
absence of election to defer.
</TABLE>
<PAGE> 1
EXHIBIT 10 (k)
VALLEY NATIONAL CORPORATION
401 (+) trademark
EXECUTIVE DEFERRED COMPENSATION PLAN
Effective October 1, 1988
<PAGE> 2
<TABLE>
VALLEY NATIONAL CORPORATION
401 (+) trademark
EXECUTIVE DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE I PURPOSE 1
ARTICLE II DEFINITIONS
2.1 Account 1
2.2 Average Annual Deferral Amount 1
2.3 Beneficiary 1
2.4 Board 1
2.5 Change in Control of the Employer 2
2.6 Committee 3
2.7 Compensation 3
2.8 Deferral Commitment 3
2.9 Deferral Period 3
2.10 Determination Date 3
2.11 Early Retirement Date 3
2.12 Employer 3
2.13 Financial Hardship 3
2.14 Interest 4
2.15 Normal Retirement Date 4
2.16 Participant 4
2.17 Participation Agreement 4
2.18 Plan Benefit 4
2.19 Qualified 401(k) Plan 4
2.20 Qualified Pension Plan 4
2.21 Retirement 5
2.22 Retirement Account 5
2.23 Termination Account 5
2.24 Total and Permanent Disability 5
2.25 Additional Terms 5
ARTICLE III PARTICIPATION AND DEFERRAL COMMITMENTS
3.1 Eligibility and Participation 5
3.2 Form of Deferral; Minimum Deferral 6
3.3 Limitation on Deferral 6
3.4 Commitment Limited by Retirement 7
3.5 Modification of Deferral Commitment 7
</TABLE>
(i)
<PAGE> 3
<TABLE>
VALLEY NATIONAL CORPORATION
401 (+) trademark
EXECUTIVE DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
(Continued)
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE IV DEFERRED COMPENSATION ACCOUNTS
4.1 Types of Accounts 7
4.2 Elective Deferred Compensation 8
4.3 Matching Contributions 8
4.4 Determination of Accounts 8
4.5 Vesting of Accounts 9
4.6 Statement of Accounts 9
ARTICLE V PLAN BENEFITS
5.1 Retirement Benefit 9
5.2 Termination Benefit 9
5.3 Death Benefit 9
5.4 Early Withdrawal Option 10
5.5 Hardship Distributions 10
5.6 Form of Benefit Payment 10
5.7 Pension Make-Up Benefit 11
5.8 Withholding; Payroll Taxes 11
5.9 Commencement of Payments 11
5.10 Benefits Payable to Minor
or Incompetents 11
ARTICLE VI BENEFICIARY DESIGNATION
6.1 Beneficiary Designation 12
6.2 Amendments 12
6.3 No Beneficiary Designation 12
6.4 Effect of Payment 13
ARTICLE VII ADMINISTRATION
7.1 Committee; Duties 13
7.2 Agents 13
7.3 Binding Effect of Decisions 13
7.4 Indemnity of Committee 14
</TABLE>
(ii)
<PAGE> 4
<TABLE>
VALLEY NATIONAL CORPORATION
401 (+) trademark
EXECUTIVE DEFERRED COMPENSATION PLAN
TABLE OF CONTENTS
(Continued)
<CAPTION>
Page
----
<S> <C> <C>
ARTICLE VIII CLAIMS PROCEDURE
8.1 Claim 14
8.2 Denial of Claim 14
8.3 Review of Claim 14
8.4 Final Decision 14
ARTICLE IX AMENDMENT AND TERMINATION OF PLAN
9.1 Amendment 15
9.2 Employer's Right to Terminate 15
ARTICLE X MISCELLANEOUS
10.1 Unfunded Plan 16
10.2 Unsecured General Creditor 16
10.3 Trust Fund 16
10.4 Nonassignability 17
10.5 Not a Contract of Employment 17
10.6 Protective Provisions 17
10.7 Terms 17
10.8 Captions 17
10.9 Governing Law 17
10.10 Validity 18
10.11 Notice 18
10.12 Successors 18
</TABLE>
<PAGE> 5
VALLEY NATIONAL CORPORATION
401 (+) trademark
EXECUTIVE DEFERRED COMPENSATION PLAN
ARTICLE I
PURPOSE
The purpose of this 401(+)+TM Executive Deferred Compensation
Plan (hereinafter referred to as the "Plan") is to provide
current tax planning opportunities as well as supplemental funds
for retirement or death for select officers and key management
employees (and their beneficiaries) of Valley National
Corporation. It is intended that the Plan will aid in retaining
and attracting employees of exceptional ability by providing such
individuals with these benefits. This plan shall be effective as
of October 1, 1988.
ARTICLE II
DEFINITIONS
For purposes of this Plan, the following words and phrases
shall have the meanings indicated, unless the context clearly
indicates otherwise:
2.1 ACCOUNT. "Account" means either the Termination
Account or the Retirement Account maintained by the Employer in
accordance with Article IV with respect to any deferral of
Compensation pursuant to this Plan.
2.2 AVERAGE ANNUAL DEFERRAL AMOUNT. "Average Annual
Deferral Amount" means, with respect to any Participant, an
amount equal to the total dollar amount deferred or to be
deferred under all completed and uncompleted Salary and Bonus
Deferral Commitments made by a Participant, divided by the
number of Deferral Commitments entered into by the Participant.
2.3 BENEFICIARY. "Beneficiary" means the person, persons
or entity designated by the Participant, as provided in
Article VI, to receive any Plan benefits payable after a
Participant's death.
2.4 BOARD. "Board" means the Board of Directors of
Valley National Corporation.
PAGE 1 - 401(+) trademark EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 6
2.5 CHANGE IN CONTROL OF THE EMPLOYER. "Change in
Control" shall be deemed to have occurred at the time (1) a
report on Schedule 13D is filed with the Securities and Exchange
Commission pursuant to Section 13(d) of the Securities Exchange
Act of 1934 (the "Exchange Act") disclosing that any person
(within the meaning of Section 13(d) of the Exchange Act), other
than the Employer (or one of its subsidiaries) or any employee
benefit plan sponsored by the Employer (or one of its
subsidiaries), is the beneficial owner, directly or indirectly,
of 20 percent or more of the combined voting power of the then
outstanding securities of the Employer; (2) any person (within
the meaning of Section 13(d) of the Exchange Act), other than the
Employer (or one of its subsidiaries) or any employee benefit
plan sponsored by the Employer (or one of its subsidiaries),
shall purchase securities pursuant to a tender offer or exchange
offer to acquire any common stock of the Employer (or securities
convertible into common stock) for cash, securities or any other
consideration, provided that after consummation of the offer, the
person in question is the beneficial owner (as such term is
defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of 20 percent or more of the combined voting power of
the then outstanding securities of the Employer (as determined
under paragraph (d) of Rule 13d-3 under the Exchange Act, in the
case of rights to acquire common stock); (3) the stockholders of
the Employer shall approve:
(a) Any consolidation or merger of the Employer:
(i) in which the Employer is not the
continuing or surviving corporation,
(ii) pursuant to which shares of common stock
of the Employer would be converted into cash,
securities or other property, or
(iii) with a corporation which prior to such
consolidation or merger owned 20 percent or more of
the cumulative voting power of the then outstanding
securities of the Employer; or
(b) Any sale, lease, exchange or other transfer (in
one transaction or a series of related transactions) of all
or substantially all the assets of the Employer; or
(4) there shall have been a change in a majority of the members
of the Board of Directors of the company within a 12-month
period, unless the election or nomination for election by the
company's stockholders of each new director during such 12-month
period was approved by the vote of two-thirds of the directors
then still in office who were directors at the beginning of such
12-month period.
PAGE 2 - 401(+) trademark EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 7
AMENDED 2.6 COMMITTEE. "Committee" means the Investment
Compensation Committee of the Board of Directors appointed by the
Board to administer the Plan pursuant to Article VII. No member
of the Committee may participate in any decision regarding his or
her own benefit.
2.7 COMPENSATION. "Compensation" means the salary and
bonuses paid to an Employee-Participant during the calendar year
considered to be "wages" for purposes of federal income tax
withholding, before reduction for amounts deferred pursuant to
this Plan, the Valley Flex Benefits Plan, and the Investment
Incentive Plan or any other cash or deferred compensation
arrangement pursuant to Section 401(a) of the Internal Revenue
Code. Compensation does not include expense reimbursements, or
any form of non-cash compensation or benefits.
2.8 DEFERRAL COMMITMENT. "Deferral Commitment" means a
Salary Deferral Commitment or a Bonus Deferral Commitment made by
a Participant pursuant to Article III for which a separate
Participation Agreement has been entered into by the Participant.
2.9 DEFERRAL PERIOD. "Deferral Period" means each
calendar year or any portion thereof.
2.10 DETERMINATION DATE. "Determination Date" means the
last day of each calendar month.
DELETED 2.11 EARLY RETIREMENT DATE. "Early Retirement Date" means
the date on which the Participant actually terminates employment
or Board service following the first day of the month coinciding
with or next following a Participant's attainment of age fifty-
five (55) and his completion of fifteen (15) Years of Credited
Service, but prior to his Normal Retirement Date.
2.12 EMPLOYER. "Employer" means Valley National
Corporation, an Arizona corporation, and any affiliated or
subsidiary corporations designated by the Board, or any
successors to the businesses thereof.
2.13 FINANCIAL HARDSHIP. "Financial Hardship" means a
severe financial hardship to the Participant resulting from (a) a
sudden and unexpected illness or accident of the Participant or a
dependent (as defined in Section 152(a) of the Internal Revenue
Code) of the Participant; (b) loss of the Participant's property
due to casualty; or (c) other similar or extraordinary circum-
stances arising from events beyond the control of the
Participant. Notwithstanding the foregoing, the Committee may
not direct payment of any amounts credited to the Account of a
Participant to the extent that such hardship is or may be
relieved through reimbursement or compensation by insurance or
otherwise, by liquidation of the Participant's assets to the
extent that such liquidation would not cause severe financial
PAGE 3 - 401(+) trademark EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 8
hardship, or by the cessation of deferrals under the Plan. The
desire to send a Participant's child to college or the desire to
purchase a residence shall not be considered a Financial
Hardship.
2.14 INTEREST. "Interest" means, with respect to any
calendar month, either the Termination Rate or the Retirement
Rate as defined below:
(a) TERMINATION RATE means the monthly equivalent of
the annual yield of the Moody's Long Term Corporate Bond
Yield Index for the preceding calendar month as published by
Moody's Investor Service, Inc. (or any successor thereto)
or, if such index is no longer published, a substantially
similar index selected by the Board.
(b) RETIREMENT RATE means the monthly equivalent of
the effective annual yield on a Termination Account plus
three percentage (3%) points.
DELETED 2.15 NORMAL RETIREMENT DATE. "Normal Retirement Date"
means the first day of the month coinciding with or next
following the date on which a Participant attains age sixty-two
(62).
2.16 PARTICIPANT. "Participant" means any individual who
is participating or has participated in this Plan as provided in
Article III.
2.17 PARTICIPATION AGREEMENT. "Participation Agreement"
means the agreement entered into by a Participant with the
Committee prior to the beginning of the Deferral Period. A new
Participation Agreement shall be entered into by the Participant
with the Committee for each Deferral Commitment.
2.18 PLAN BENEFIT. "Plan Benefit" means the benefit
payable to a Participant as calculated in Article V.
2.19 QUALIFIED 401(K) PLAN. "Qualified 401(k) Plan"
means the Investment Incentive Plan, any successor salary
reduction plan, or a salary reduction plan maintained by an
affiliate of the Employer that qualifies under Section 401(a) of
the Internal Revenue Code by satisfying the requirements of
Section 401(k) of the Code.
2.20 QUALIFIED PENSION PLAN. "Qualified Pension Plan"
means the Retirement Plan for Employees of the Valley National
Bank of Arizona, any successor defined benefit plan maintained
by the Employer, or a defined benefit plan maintained by an
affiliate of the Employer that qualifies under Section 401(a) of
the Internal Revenue Code.
PAGE 4 - 401(+) trademark EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 9
AMENDED 2.21 RETIREMENT. "Retirement" means the severance of
employment with the Employer at the Participant's Normal
Retirement Date or Early Retirement Date as applicable.
Participants who, after retirement, become, or continue to be
members of the Board shall not be considered to be retired, for
purposes of this plan, until the severance of service as an
active Board member and as a Director Emeritus.
2.22 RETIREMENT ACCOUNT. "Retirement Account" means the
account maintained on the books of account of the Employer and
calculated pursuant to paragraph 4.5, using the Retirement Rate
as stated in paragraph 2.14(b).
2.23 TERMINATION ACCOUNT. "Termination Account" means the
account maintained on the books of account of the Employer and
calculated pursuant to paragraph 4.5, using the Termination Rate
as stated in paragraph 2.14(a).
2.24 TOTAL AND PERMANENT DISABILITY. "Total and Permanent
Disability" means a physical or mental condition that prevents
the Participant from satisfactorily performing the Participant's
usual duties for the Employer. The Committee shall determine the
existence of Disability and may rely on advice from a medical
examiner satisfactory to the Committee in making the
determination.
2.25 ADDITIONAL TERMS. In addition to the definitions set
out above, the following terms have been described throughout
this document in the sections indicated below:
<TABLE>
<S> <C>
Salary Deferral Commitment 3.2(a)
Bonus Deferral Commitment 3.2(b)
Initial Account Balance 4.2
Matching Contribution Credit 4.4
Pension Make-up Benefit 5.7
</TABLE>
ARTICLE III
PARTICIPATION AND DEFERRAL COMMITMENTS
3.1 ELIGIBILITY AND PROTECTION.
(a) ELIGIBILITY. Eligibility to participate in the
Plan is limited to a select group of management or highly
compensated employees recommended by the Committee from time
to time.
(b) PARTICIPATION. An eligible employee may elect
to participate in the Plan with respect to any Deferral
Period by submitting a Participation Agreement with the
Committee by December 15 of the calendar year immediately
PAGE 5 - 401(+) trademark EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 10
preceding the Deferral Period, provided that employees
making Bonus Deferral Commitments must do so prior to the
Board meeting in which a provisional or full payment of such
bonus is authorized. In the event that an individual first
becomes eligible to participate during a calendar year, a
Participation Agreement must be entered into with the
Committee no later than thirty (30) days following notifica-
tion of the individual by the Committee of his eligibility
to participate, and such Participation Agreement shall be
effective only with regard to Compensation earned or payable
following the submission of the Participation Agreement with
the Committee.
AMENDED 3.2 FORM OF DEFERRAL COMMITMENT. For each
Deferral Period, a Participant may make the following Deferral
Commitments in separate Participation Agreements:
(a) SALARY DEFERRAL COMMITMENT. A Participant may
elect to defer any portion of his base salary for the year
following the calendar year in which the Participation
Agreement is submitted. The amount to be deferred shall be
stated as a percentage of base salary but must not be less
than two thousand dollars ($2,000) during the Deferral
Period. The percentage of salary to be deferred may be
stated in one-half percent (1/2%) increments.
(b) BONUS DEFERRAL COMMITMENT. A Participant may
elect to defer all or a portion of the bonus amounts to be
paid by the Employer in the calendar year following the
calendar year in which the Participation Agreement is
submitted. The amount to be deferred shall be stated as a
flat dollar amount, as a percentage of the bonus, or as an
amount in excess of a stated dollar amount, but must not be
less than two thousand dollars ($2,000), unless the
Participant also elects to make a Salary Deferral
Commitment, in which case there shall be no minimum Bonus
Deferral Commitment.
In the event a Participant enters this Plan at any
time other than January 1 of any calendar year, the minimum
Deferral Commitment shall be a pro rata portion of the minimum
Deferral Commitment set forth in subparagraphs (a), (b) and (c)
above, based upon the full or partial months remaining in the
Deferral Period.
3.3 LIMITATION ON DEFERRAL. Notwithstanding paragraph
3.2, the Committee may increase the minimum deferral amount or
impose a maximum deferral amount from time to time by giving
proper written notice to all Participants.
PAGE 6 - 401(+) trademark EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 11
3.4 COMMITMENT LIMITED BY RETIREMENT. If a Participant
intends to terminate employment due to Retirement prior to the
end of the Salary Deferral Period the Participant may elect,
with the Committee's consent, an alternative Deferral Commitment
as follows:
(a) If, at the time of entering into the
Participation Agreement with the Committee, the
Participant's Retirement occurs prior to the end of the
Deferral Period, the Participant may elect to defer over a
period which ends at the date of his intended Retirement.
The Minimum Deferral provided in paragraph 3.2 above shall
apply.
(b) If, subsequent to the entering into a
Participation Agreement with the Committee, the Participant
decides to terminate employment due to Retirement prior to
the end of the Deferral Period, the Participant may elect to
accelerate the deferral of the remaining balance of his
Deferral Commitment. The accelerated deferrals shall be
made over the period from the first day of the calendar year
following such election to the date of the Participant's
Retirement. However, the election to accelerate under this
alternative must be made prior to December 15 of the year
which precedes the calendar year(s) in which such remaining
balance is to be deferred.
3.5 MODIFICATION OF DEFERRAL COMMITMENT. A Deferral
Commitment shall be irrevocable except that notwithstanding the
minimum deferral amounts under Section 3.2, the Committee may permit a
Participant to reduce the amount to be deferred, or waive the
remainder of the Deferral Commitment, upon a finding that the
Participant has suffered a Financial Hardship.
ARTICLE IV
DEFERRED COMPENSATION ACCOUNTS
4.1 TYPES OF ACCOUNTS. A Retirement Account and a
Termination Account shall be maintained for each Participant, and
the Accounts shall be bookkeeping devices utilized for the sole
purpose of determining the benefits payable under the Plan and
shall not constitute a separate fund of assets. The amount of
the Elective Deferred Compensation, Matching Contribution Credit
and Interest thereon shall be credited to each of these Accounts.
The Employer shall be under no obligation to maintain specific
assets for the purpose of providing the benefits under this Plan.
The maintenance of the bookkeeping accounts provided in this
section shall not alter Employer's obligation under the Plan,
which is an unfunded and unsecured promise of Employer to pay
money in the future.
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<PAGE> 12
4.2 ELECTIVE DEFERRED COMPENSATION. The amount of
Compensation that a Participant elects to defer shall be deferred
from each payment of compensation and credited to the
Participant's Account as the non-deferred portion of the
compensation becomes or would have become payable. Any withhold-
ing of taxes or other amounts with respect to deferred
Compensation which is required by state, federal or local law
shall be calculated separately for Salary and Bonus Deferral
Commitments. The amounts required to be withheld shall be first
withheld from the non-deferred portion of the salary or bonus
which relates to the Deferral Commitment and, if insufficient,
shall then be drawn from the corresponding Deferral Commitments.
AMENDED 4.3 MATCHING CONTRIBUTIONS. Employer shall credit a
Matching Contribution to the Participant's Account equal to 60%
of the first 6% of Compensation deferred by the Participant under
this Plan and under the Qualified 401(k) Plan during a Deferral
Period, but not to exceed 3.6% of the Participant's Compensation
before such deferrals. The Matching Contribution credited to
this Plan shall be reduced by the amount, if any, Employer has
contributed as a matching contribution for the Participant to the
Qualified 401(k) Plan for the Deferral Period. The Matching
Contribution shall be credited to the Account as of the same day
corresponding matching contributions to the Qualified 401(k) Plan
are credited to accounts in that Plan. A Participant shall be
eligible to receive a Matching Contribution under this Plan with
respect to those amounts which, if not deferred, would have been
payable after the Participant is eligible to participate in the
Qualified 401(k) Plan.
The Employer may credit additional discretionary Matching
Contributions to Participants' Accounts at such time and in such
amounts as the Board shall determine. The amounts of the
Matching Contributions shall be determined as of the end of every
calendar year and shall be credited to such Participant's Account
at that time.
4.4 DETERMINATION OF ACCOUNTS. Each Participant's
Retirement Account and Termination Account as of each
Determination Date shall consist of the balance of the
Participant's Account as of the immediately preceding
Determination Date (including any Initial Account Balance), plus
the Participant's Elective Deferred Compensation credited, any
Matching Contribution Credit, and any Interest earned, minus the
amount of any distributions made since the immediately preceding
Determination Date. Interest earned shall be calculated as of
each Determination Date based upon the average daily balance of
the account since the preceding Determination Date and shall be
credited to the Participant's Account at that time.
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<PAGE> 13
4.5 VESTING OF ACCOUNTS. A Participant shall be 100%
vested at all times in the amounts deferred, any Matching
Contribution Credit and the appropriate Interest credited
thereon.
4.6 STATEMENT OF ACCOUNTS. The Committee shall submit to
each Participant, within one hundred twenty (120) days after the
close of each calendar year and at such other time as determined
by the Committee, a statement setting forth the balance to the
credit of each Account maintained for a Participant.
ARTICLE V
PLAN BENEFITS
5.1 RETIREMENT BENEFIT. The Employer shall pay a Plan
Benefit equal to the Participant's Retirement Account to each
Participant who:
(a) terminates employment by reason of Retirement
or Total and Permanent Disability,
(b) terminates within two years of Change in
Control for reason other than Death.
5.2 TERMINATION BENEFIT. The Employer shall pay a Plan
Benefit equal to the Participant's Termination Account to each
employee Participant who terminates employment for reasons other
than those listed in paragraphs 5.1 above and 5.3 below.
5.3 DEATH BENEFIT. Upon the death of a Participant, the
Employer shall pay to the Participant's Beneficiary an amount
determined as follows:
(a) If the Participant dies after termination of
employment or service with the Employer, the amount payable
shall be equal to the remaining unpaid balance of the
Participant's Account paid in the same manner being used
prior to the Participant's death.
(b) If the Participant dies prior to termination of
employment with the Employer, the amount payable shall be
the greater of:
(i) the sum of Participant's Retirement
Account balance; or
(ii) an amount equal to the Participant's
Average Annual Deferral Amount times ten (10).
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<PAGE> 14
5.4 EARLY WITHDRAWAL OPTION. Participants shall be
permitted to elect to withdraw amounts from their Accounts
subject to the following restrictions:
(a) TIMING OF ELECTION TO WITHDRAW. The election to
make an early withdrawal must be made at the same time the
Participant enters into a Participation Agreement for a
Deferral Commitment.
(b) AMOUNT OF WITHDRAWAL. The amount which a
Participant can elect to withdraw with respect of any
Deferral Commitment, shall be one hundred percent (100%) of
the amount of such Deferral Commitment without Interest.
(c) TIMING OF EARLY WITHDRAWALS. The amount elected
to be withdrawn shall be paid in a lump sum. In no event
shall the commencement of benefit payments under this
section be prior to the seventh (7th) anniversary of the
Deferral Commitment for which the Participant elected the
early withdrawal option.
Amounts paid to a Participant pursuant to this section shall
be treated as distributions from the Participant's account.
5.5 HARDSHIP DISTRIBUTIONS. Upon a finding that a
Participant has suffered a Financial Hardship, the Committee may,
in its sole discretion, make distributions from the Participant's
Account prior to the time specified for payment of benefits under
the Plan. The amount of such distribution shall be limited to
the amount reasonably necessary to meet the Participant's
requirements during the Financial Hardship.
AMENDED 5.6 FORM OF BENEFIT PAYMENT. The Plan Benefits shall be
paid in the form elected by the Participant on his Deferral
Commitment. The most recently filed election shall control the
form of benefit payment with respect to the Participant's entire
Account. If, upon termination, the Participant's most recent
election as to the form of benefit was made within one year of
such termination, then the prior election shall be used to
determine the form of payment. The methods of payment from which
a Participant may elect are limited to the following:
(a) Lump sum payment.
(b) Equal monthly installments of the Account and
Interest amortized over a period of 60, 120, 180, or 240
months. Interest on the unpaid balance shall be equal to
the Retirement Rate or Termination Rate, whichever is
applicable, and shall be credited monthly. Installments
PAGE 10 - 401(+) trademark EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 15
shall be redetermined each January 1, based on the
appropriate crediting rate as of the last day of the
preceding September, the remaining account balance, and the
remaining number of payment periods.
(c) Any other method which is actuarially equivalent
to the Participant's Account balance and is approved by the
Committee, in its sole discretion.
5.7 PENSION MAKE-UP BENEFIT. The Employer shall provide
to each Participant a separate benefit equal to the amount by
which the Participant's benefit under the Qualified Pension Plan
has been reduced as a result of deferrals under this Plan. The
amount of this benefit shall be the difference between:
(a) The Normal Benefit which would have been
available under the Qualified Pension Plan if no deferrals
had been made under this Plan; and
(b) the Normal Benefit actually available under the
Qualified Pension Plan.
The benefit shall be paid in the time and manner as
applicable to the Participant under the Qualified Pension Plan.
5.8 WITHHOLDING; PAYROLL TAXES. The Employer shall
withhold from payments made hereunder any taxes required to be
withheld from a Participant's wages for the federal or any state
or local government.
AMENDED 5.9 COMMENCEMENT OF PAYMENTS. Benefit payments shall
commence on the first day of the first month which begins not
less than sixty (60) days after Retirement, Termination, Total
and Permanent Disability or death. All subsequent payments shall
be made as of the first day of the month.
5.10 BENEFITS PAYABLE TO MINORS OR INCOMPETENTS. Every
person receiving or claiming benefits under the Plan shall be
conclusively presumed to be mentally competent and of age until
the date on which the Committee receives a written notice, in a
form and manner acceptable to the Committee, that such person is
incompetent or a minor, for whom a guardian or other person
legally vested with the care of his person or estate has been
appointed; provided, however, that if the Committee shall find
that any person to whom a benefit is payable under the Plan is
unable to care for his affairs because of incompetency, or is a
minor, any payment due (unless a prior claim therefor shall have
been made by a duly appointed legal representative) may be paid
PAGE 11 - 401(+) trademark EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 16
to the spouse, a child, a parent or a brother or sister, or to
any person or institution deemed by the Committee to have
incurred expenses for the person otherwise entitled to payment.
To the extent permitted by law, any such payment so made shall be
a complete discharge of liability therefor under the Plan.
In the event a guardian of the estate of any person
receiving or claiming benefits under the Plan shall be appointed
by a court of competent jurisdiction, benefit payments may be
made to such guardian, provided that proper proof of appointment
and continuing qualification is furnished in a form and manner
acceptable to the Committee. To the extent permitted by law, any
such payment so made shall be a complete discharge of any
liability therefor under the Plan.
ARTICLE VI
BENEFICIARY DESIGNATION
6.1 BENEFICIARY DESIGNATION. Each Participant shall have
the right, at any time, to designate any person or persons as his
Beneficiary or Beneficiaries (both principal as well as contin-
gent) to whom benefits under this Plan shall be paid in the
event of Participant's death prior to complete distribution of
the benefits due under the Plan. Each beneficiary designation
shall be in a written form prescribed by the Committee and will
be effective only when filed with the Committee during the
Participant's lifetime. To be effective, a designation of a
beneficiary other than the Participant's spouse shall require the
written consent of the spouse on the beneficiary designation form
filed with the Committee.
6.2 AMENDMENTS. Any Beneficiary designation may be
changed by a Participant without the consent of any designated
Beneficiary by the filing of a new Beneficiary Designation with
the Committee. The filing of a new Beneficiary Designation form
will cancel all Beneficiary Designations previously filed.
6.3 NO BENEFICIARY DESIGNATION. If any Participant fails
to designate a Beneficiary in the manner provided above, or if
the Beneficiary designated by a deceased Participant dies before
the Participant or before complete distribution of the
Participant's benefits, the Participant's Designated Beneficiary
shall be deemed to be the person in the first of the following
classes in which there is a survivor:
(a) the surviving spouse;
PAGE 12 - 401(+) trademark EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 17
(b) the Participant's children, except that if any
of the children predeceases the Participant but leave
issue surviving, then such issue shall take by right of
representation the share the parent would have taken if
living;
(c) the Participant's estate.
6.4 EFFECT OF PAYMENT. Payment to the deemed
Beneficiary shall completely discharge Employer's obligations
under this Plan.
ARTICLE VII
ADMINISTRATION
7.1 COMMITTEE; DUTIES. This Plan shall be administered
by the Compensation Committee of the Board of Directors. The
Committee may delegate some or all of its responsibilities for
the day-to-day operation of the Plan to an Administrative
Committee. Members of the Committee may be Participants under
this Plan. The Committee shall have responsibility for the
general administration of the Plan and for carrying out its
intent and provisions. The Committee shall have such powers and
duties as may be necessary to discharge its responsibilities.
These powers shall include, but not be limited to:
(a) Interpretation of the Plan provisions;
(b) Determination of amounts due to any Participant,
the rights of any Participant or Beneficiary under this
Plan, the right to require any necessary information from
any Participants or determine the amounts credited to
Participant's Accounts and Interest earned, and
(c) Any other activities deemed necessary or
helpful.
7.2 AGENTS. The Committee may, from time to time,
employ other agents and delegate to them such administrative
duties as it sees fit, and may from time to time consult with
counsel who may be counsel to the Employer.
7.3 BINDING EFFECT OF DECISIONS. The decision or action
of the Committee with respect to any question arising out of or
in connection with the administration, interpretation and appli-
cation of the Plan and the rules and regulations promulgated
hereunder shall be final and conclusive and binding upon all
persons having any Interest in the Plan.
PAGE 13 - 401(+) trademark EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 18
7.4 IMDEMNITY OF COMMITTEE. The Employer shall indemnify
and hold harmless the members of the Committee against any and
all claims, loss damage, expense or liability arising from any
action or failure to act with respect to this Plan, except in the
case of gross negligence or willful misconduct, to the extent the
claims, loss, damage or liability is not otherwise reimbursed by
insurance.
ARTICLE VIII
CLAIMS PROCEDURE
8.1 CLAIM. Any person claiming a benefit, requesting an
interpretation or ruling under the Plan, or requesting informa-
tion under the Plan shall present the request in writing to the
Committee, which shall respond in writing as soon as practicable.
8.2 DENIAL OF CLAIM. If the claim or request is denied,
the written notice of denial shall state:
(a) The reasons for denial, with specific reference
to the Plan provisions on which the denial is based.
(b) A description of any additional material or
information required and an explanation of why it is
necessary.
(c) An explanation of the Plan's claim review
procedure.
8.3 REVIEW OF CLAIM. Any person whose claim or request
is denied or who has not received a response within thirty (30)
days may request review by notice given in writing to the
Committee. The claim or request shall be reviewed by the
Committee who may, but shall not be required to, grant the
claimant a hearing. On review, the claimant may have representa-
tion, examine pertinent documents, and submit issues and comments
in writing.
8.4 FINAL DECISION. The decision on review shall
normally be made within sixty (60) days. If an extension of time
is required for a hearing or other special circumstances, the
claimant shall be notified and the time limit shall be one
hundred twenty (120) days. The decision shall be in writing
and shall state the reasons and the relevant plan provisions.
All decisions on review shall be final and bind all parties
concerned.
PAGE 14 - 4Ol(+) trademark EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 19
ARTICLE IX
AMENDMENT AND TERMINATION OF PLAN
9.1 AMENDMENT. The Board may at any time amend the Plan
in whole or in part, provided, however, that no amendment shall
be effective to decrease or restrict the amount accrued to the
date of Amendment in any Account maintained under the Plan. Any
change in the definition of "Interest" as defined herein shall be
made only upon the following terms and conditions:
(a) Any change in the Interest rate shall not become
effective until the first day of the calendar year which
follows the adoption of the amendment and providing at least
thirty (30) days' written notice of the amendment to the
Participant.
9.2 EMPLOYER'S RIGHT TO TERMINATE. The Board may at any
time partially or completely terminate the Plan if, in its
judgment, the tax, accounting, or other effects of the
continuance of the Plan, or potential payments thereunder would
not be in the best interests of the Employer.
(a) PARTIAL TERMINATION. The Board may partially
terminate the Plan by instructing the Committee not to
accept any additional Deferral Commitments. In the event of
such a Partial Termination, the Plan shall continue to
operate and be effective with regard to Deferral Commitments
entered into prior to the effective date of such Partial
Termination.
(b) COMPLETE TERMINATION. The Board may completely
terminate the Plan by instructing the Committee not to
accept any additional Deferral Commitments, and terminate
all ongoing Deferral Commitments. In the event of such a
Complete Termination, the Plan shall cease to operate and
the Committee shall pay out to each Participant the appro-
priate Account as if that Participant had terminated service
as of the effective date of such Complete Termination in
equal monthly installments over the period listed below
based on the Account balance:
<TABLE>
<CAPTION>
Appropriate Account Balance Payout Period
--------------------------- -------------
<S> <C>
Less than $10,000 2 Years
$10,000 but less than $50,000 5 Years
More than $50,000 10 Years
</TABLE>
PAGE 15 - 401(+) trademark EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 20
Interest earned on the unpaid balance in each
Participant's Account shall be the applicable Interest
rate on the Determination Date immediately preceding
the effective date of such Complete Termination.
ARTICLE X
MISCELLANEOUS
10.1 UNFUNDED PLAN. This Plan is intended to be an
unfunded plan maintained primarily to provide deferred
Compensation benefits for a select group of management employees
or highly compensated employees. This Plan is not intended to
create an investment contract, but to provide tax planning
opportunities and retirement benefits to eligible individuals who
have elected to participate in the Plan. Eligible individuals
are select members of management who, by virtue of their position
with the Employer, are uniquely informed as to the Employer's
operations and have the ability to materially affect the
Employer's profitability and operations.
10.2 UNSECURED GENERAL CREDITOR. Participants and their
Beneficiaries, heirs, successors and assigns shall have no legal
or equitable rights, Interest or claims in any property or assets
of Employer, nor shall they be Beneficiaries of, or have any
rights, claims or interests in any life insurance policies,
annuity contracts or the proceeds therefrom owned or which may be
acquired by Employer ("Policies"). Except as provided under
Section 10.3, such Policies or other assets of Employer shall not be
held under any trust for the benefit of Participants, their
Beneficiaries, heirs, successors or assigns, or held in any way
as collateral security for the fulfilling of the obligations of
Employer under this Plan. Any and all of Employer's assets and
Policies shall be, and remain, the general, unpledged,
unrestricted assets of Employer. Employer's obligation under the
Plan shall be that of an unfunded and unsecured promise of
Employer to pay money in the future.
10.3 TRUST FUND. The Employer shall be responsible for
the payment of all benefits provided under the Plan. At its
discretion, the Employer may establish one or more trusts, with
such trustees as the Board may approve, for the purpose of
providing for the payment of such benefits. Such trust or trusts
may be irrevocable, but the assets thereof shall be subject to
the claims of the Employer's creditors. To the extent any
benefits provided under the Plan are actually paid from any such
trust, the Employer shall have no further obligation with respect
thereto, but to the extent not so paid, such benefits shall
remain the obligation of, and shall be paid by, the Employer.
PAGE 16 - 401(+) trademark EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 21
10.4 NONASSIGNABILITY. Neither a Participant nor any
other person shall have any right to commute, sell, assign,
transfer, pledge, anticipate, mortgage or otherwise encumber,
transfer, hypothecate or convey in advance of actual receipt the
amounts, if any, payable hereunder, or any part thereof, which
are, and all rights to which are, expressly declared to be
unassignable and non-transferable. No part of the amounts
payable shall, prior to actual payment, be subject to seizure or
sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by a Participant or any other person,
nor be transferable by operation of law in the event of a
Participant's or any other person's bankruptcy or insolvency,
except to the extent provided under applicable law regarding
community property rights.
10.5 NOT A CONTRACT OF EMPLOYMENT. The terms and
conditions of this Plan shall not be deemed to constitute a
contract of employment between the Employer and the Participant,
and the Participant (or his Beneficiary) shall have no rights
against the Employer except as may otherwise be specifically
provided herein. Moreover, nothing in this Plan shall be deemed
to give a Participant the right to be retained in the service of
the Employer or to interfere with the right of the Employer to
discipline or discharge him at any time.
10.6 PROTECTIVE PROVISIONS. A Participant will cooperate
with the Employer by furnishing any and all information requested
by the Employer, in order to facilitate the payment of benefits
hereunder, and by taking such physical examinations as the
Employer may deem necessary and taking such other action as may
be requested by the Employer. Notwithstanding the other
provisions of this Plan, no death benefits in excess of the
Retirement Account balance shall be paid if death occurs as a
result of suicide.
10.7 TERMS. Whenever any words are used herein in the
masculine, they shall be construed as though they were used in
the feminine in all cases where they would so apply; and wherever
any words are used herein in the singular or in the plural, they
shall be construed as though they were used in the plural or the
singular, as the case may be, in all cases where they would so
apply.
10.8 CAPTIONS. The captions of the articles, sections and
paragraphs of thin Plan are for convenience only and shall not
control or affect the meaning or construction of any of its
provisions.
10.9 GOVERNING LAW. The provisions of this Plan shall be
construed and interpreted according to the laws of the State of
Arizona.
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<PAGE> 22
10.10 VALIDITY. In case any provision of this Plan shall
be held illegal or invalid for any reason, said illegality or
invalidity shall not affect the remaining parts hereof, but this
Plan shall be construed and enforced as if such illegal and
invalid provision had never been inserted herein.
10.11 NOTICE. Any notice or filing required or permitted
to be given to the Committee under the Plan shall be sufficient
if in writing and hand delivered, or sent by registered or
certified mail, to any member of the Committee, or Secretary of
the Employer. Such notice shall be deemed given as of the date
of delivery or, if delivery is made by mail, as of the date shown
on the postmark on the receipt for registration or certification.
10.12 SUCCESSORS. The provisions of this Plan shall bind
and inure to the benefit of the Employer and its successors and
assigns. The term successors as used herein shall include any
corporate or other business entity which shall, whether by
merger, consolidation, purchase or otherwise acquire all or
substantially all of the business and assets of the Employer, and
successors of any such corporation or other business entity.
IN WITNESS WHEREOF, and pursuant to resolution of the Board
of Directors of Valley National Corporation such corporation has
caused this instrument to be executed by its duly authorized
officers effective as of October 1, 1988.
VALLEY NATIONAL CORPORATION
By: /s/ Richard J. Lehmann
------------------------
President
By: /s/ William J. Ramsey
-------------------------
Secretary
Dated: December 1, 1988
----------------------
PAGE 18 - 401(+) trademark EXECUTIVE DEFERRED COMPENSATION PLAN
<PAGE> 23
AMENDMENT NO. 1
VALLEY NATIONAL CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
THIS AMENDMENT to the Valley National Corporation Executive
Deferred Compensation Plan (the "Plan") is made and entered into
this 20th day of December, 1989, by Valley National Corporation,
an Arizona Corporation, (the "Company");
WHEREAS, the Company has established the Plan as effective
October 1, 1988; and
WHEREAS, the Company desires to make certain changes; and
WHEREAS, pursuant to Section 9.1 of the Plan, the right to amend
the Plan is reserved to the Company; and
WHEREAS, the Company has approved the amendments to the Plan as
provided below;
NOW, THEREFORE, the Plan is hereby amended as follows:
FIRST: Section 2.6 shall be amended to read as follows:
2.6 COMMITTEE. "Committee" means the Compensation
Committee of the Board of Directors appointed by the Board to
administer the Plan pursuant to Article VII. No member of the
committee may participate in any decision regarding his or her
own benefit.
SECOND: Section 2.11 Early Retirement Date and Section 2.15
Normal Retirement Date shall be deleted in their entirety.
THIRD: Section 2.21 shall be amended to read as follows:
2.21 RETIREMENT. "Retirement" means the severance of
employment with the Employer at the Participant's Early,
Advanced, Normal or Late Retirement Date as applicable.
Participants who, after retirement, become, or continue to be
members of the Board shall not be considered to be retired, for
purposes of this plan, until the severance of service as an
active Board member and as a Director Emeritus.
(1)
<PAGE> 24
AMENDMENT NO. 1
VALLEY NATIONAL CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
(Continued)
For purposes of this provision:
(a) EARLY RETIREMENT DATE. "Early Retirement Date"
means the date on which the Participant attains the status
of early retirement under the personnel procedures of the
Employer.
(b) ADVANCED RETIREMENT DATE. "Advanced Retirement
Date" means the date on which the Participant actually
terminates employment following the first day of the month
coinciding with or next following a Participant's attainment
of age sixty-two (62), but prior to his Normal Retirement
Date.
(c) NORMAL RETIREMENT DATE. "Normal Retirement
Date" means the date on which the Participant actually
terminates employment following the first day of the month
coinciding with or next following a Participant's attainment
of age sixty-five (65).
(d) LATE RETIREMENT DATE. "Late Retirement Date"
means the date on which the Participant actually terminates
employment following the first day of any month following
the Participant's Normal Retirement Date.
FOURTH: Section 3.2(a) shall be amended to read as follows:
(a) SALARY DEFERRAL COMMITMENT. A Participant may
elect to defer any portion of his base salary for the year
following the calendar year in which the Participation
Agreement is submitted. The amount to be deferred shall be
stated as a flat dollar amount or as a percentage of base
salary but must not be less than two thousand dollars
($2,000) during the Deferral Period. The percentage of
salary to be deferred may be stated in one-half percent
(1/2%) increments.
(2)
<PAGE> 25
AMENDMENT NO. 1
VALLEY NATIONAL CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
(Continued)
FIFTH: Section 5.6 shall be amended by adding subsection (d) to
read as follows:
(d) Notwithstanding the form of payment elected by the
Participant, in the event the applicable account balance is
less than ten thousand dollars ($10,000) at the time payment
is to commence, the form of benefit payment shall be a lump
sum payment.
SIXTH: Section 5.9 shall be amended in its entirety to read as
follows:
5.9 COMMENCEMENT OF PAYMENTS. Benefit payments shall
commence no later than sixty (60) days following Retirement,
Termination, Total and Permanent Disability or death. All
subsequent payments shall be made as of the first day of the
month.
SEVENTH: Except as provided herein, all other Plan provisions
shall remain in full force and effect.
EIGHTH: The Amendment to the Plan provided for herein shall be
effective as of the 20th day of December, 1989.
IN WITNESS WHEREOF, the Company has caused this instrument to be
executed as of the day and year first above written.
VALLEY NATIONAL CORPORATION
By: /s/ Richard J. Lehmann
-------------------------
Richard J. Lehmann
Chairman of the Board and
Its: Chief Executive Officer
-------------------------
(3)
<PAGE> 26
AMENDMENT NO. 2
TO VALLEY NATIONAL CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
THIS AMENDMENT to the Valley National Corporation 401(+) trademark Executive
Deferred Compensation Plan (the "Plan") is made and entered into this 19th day
of November, 1991 by Valley National Corporation, an Arizona Corporation, (the
"Company");
WHEREAS the Company established the Plan as effective October 1, 1986.
WHEREAS the Company previously amended the Plan by execution of an amendment
No. 1; and
WHEREAS the Company desires to make an additional change; and
WHEREAS pursuant to Section 9.1 of the Plan, the right to amend the Plan is
reserved to the Company; and
WHEREAS the Company has approved the amendments to the Plan as provided below;
NOW THEREFORE the Plan is hereby amended as follows:
FIRST: Section 5.1 is hereby amended in its entirety to provide as
follows:
5.1 Retirement Benefit. The Employer shall pay a Plan Benefit
equal to the Participant's Retirement Account to each participant who:
(2) terminates employment by reason of Retirement or
Total and Permanent Disability,
(b) terminates employment within two years of Change
in Control tor a reason other than Death.
The Employer shall also pay a Plan Benefit equal to the
Participant's Retirement Account in the event that the "regulatory
capital ratio", as such a term is defined by the Office of the
Comptroller of the Currency, of The Valley National Bank of Arizona
becomes less than three Percent (3%).
SECOND: Section 5.9 is hereby amended in its entirety to provide as
follows:
5.9 Commencement of Payments. Benefit payments shall commence
on the first day of the first month which begins not less than
sixty (60)
<PAGE> 27
AMENDMENT NO.2
TO VALLEY NATIONAL CORPORATION
EXECUTIVE DEFERRED COMPENSATION PLAN
PAGE 2
days after Retirement, Termination, Total and Permanent
Disability or death. In the event that payment is due under
Section 5.1 on account of the change in regulatory capital
described in Section 5.1, benefit payments shall commence on the
first day of the first month which begins not less than sixty
(60) days after the later of (a) the effective date of such event
of (b) the date of determination by the Committee of such event.
All subsequent payments shall be made as of the first day of the
month.
THIRD: Except as provided herein, all other Plan Provisions shall remain
in full force and effect.
FOURTH: The Amendment to the Plan Provided for here in shall be effective
as of the 1st day of January, 1992.
IN WITNESS WHEREOF, the Company has caused this instrument to be executed as
of the day and year first above written.
VALLEY NATIONAL CORPORATION
BY:
----------------------------
ITS:
----------------------------
ATTEST:
BY:
-----------------------------
ITS:
----------------------------
<PAGE> 28
RESOLUTION
401(+) trademark
VALLEY NATIONAL CORPORATION
RESOLVED that the Valley National Corporation (the corporation) hereby
adopts Amendment No. 2 to the Corporation's 401(+)TM Executive Deferred
Compensation Plan, a copy of which is attached hereto as Amendment No. 2 and by
this reference is incorporated herein; and be it further
RESOLVED, that the President or a Vice President and the Secretary of
the Corporation be, and the same hereby are, authorized, empowered, and
directed to execute such amendment with such ehanges, modifications, additions
or deletions as they may approve, their execution thereof to evidence their
approval; be it further
RESOLVED, that the acts and deeds of the officers of the Corporation
necessary to carry out the intent and purposes of these resolutions be, and the
same hereby are ratified, confirmed and adopted as the acts and deeds of this
corporation.
---------------------------------------------------
PURPOSE: To amend the plan to pay a Plan Benefit equal to the Participant's
Retirement Account in the event that the "regulatory capital ratio", of The
Valley National Bank of Arizona becomes less than three percent (3%).
<PAGE> 1
<TABLE>
EXHIBIT 11
BANC ONE CORPORATION and Subsidiaries
STATEMENT REGARDING COMPUTATION OF EARNINGS PER COMMON SHARE
(000's, except per share amounts)
<CAPTION>
For the year ended December 31,
-----------------------------------
1993 1992 1991
---------- --------- --------
<S> <C> <C> <C>
PRIMARY:
Earnings:
Net income $ 1,139,980 $ 876,588 $ 664,288
Deduct: Dividends on preferred shares 17,714 19,703 16,039
----------- ---------- ----------
Net income available to common shareholders' $ 1,122,266 $ 856,885 $ 648,249
=========== ========== ==========
Shares:
Weighted average common shares outstanding 375,014 370,988 352,946
Add: Dilutive effect of outstanding options,
as determined by the application of the
treasury stock method 1,814 2,711 3,156
----------- ---------- ----------
Weighted average common shares outstanding,
as adjusted 376,828 373,699 356,102
=========== ========== ===========
PRIMARY EARNINGS PER COMMON SHARE $ 2.98 $ 2.29 $ 1.82
=========== ========== ===========
FULLY DILUTED:
Earnings:
Net income $ 1,139,980 $ 876,588 $ 664,288
=========== ========== ===========
Shares:
Weighted average common shares outstanding 375,014 370,988 352,946
Add: Dilutive effect of outstanding options,
as determined by the application of the
treasury stock method 1,875 2,881 3,612
Add: Conversion of preferred stock 9,110 10,838 9,393
----------- ---------- ----------
Weighted average common shares outstanding,
as adjusted 385,999 384,707 365,951
=========== ========== ===========
FULLY DILUTED EARNINGS PER COMMON SHARE $ 2.95 $ 2.28 $ 1.82
=========== ========== ===========
Share information restated to reflect the 5 for 4 stock split effective August 31, 1993
and the 10% common stock dividend effective February 10, 1994.
</TABLE>
<PAGE> 1
<TABLE>
EXHIBIT 12
BANC ONE CORPORATION AND SUBSIDIARIES
STATEMENT REGARDING COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES(2)
$(THOUSANDS)
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------------------------------------
1993 1992 1991 1990 1989
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Calculation excluding interest on
deposits
Earnings:
Income before taxes and change in
accounting principle and equity
in earnings of Bank One, Texas,
NA (1) $1,699,119 $1,281,222 $ 879,775 $ 687,029 $ 361,474
Fixed charges 329,874 304,443 394,563 435,768 439,339
Less Capitalized interest (852) (1,199) (1,732) (2,181) (2,338)
---------- ---------- ---------- ---------- ----------
$2,028,341 $1,584,466 $1,272,606 $1,120,616 $ 798,475
========== ========== ========== ========== ==========
Fixed charges:
Interest expense including
interest factor of capitalized
leases and amortization of
deferred debt expense $ 282,556 $ 263,412 $ 358,234 $ 403,418 $ 411,975
Portion of rental payments under
operating leases deemed to be
interest 47,319 41,031 38,929 32,950 27,364
---------- ---------- ---------- ---------- ----------
Fixed charges $ 329,874 $ 304,443 $ 394,563 $ 435,768 $ 439,339
========== ========== ========== ========== ==========
Ratio of earnings to fixed charges
excluding interest on deposits 8.15x 5.20x 3.23x 2.57x 1.82x
Calculation including interest on
deposits
Earnings:
Income before income taxes and
change in accounting principle
and equity in earnings of Bank
One, Texas, NA (1) $1,699,119 $1,281,222 $ 879,775 $ 687,029 $ 361,474
Fixed charges 1,693,019 2,162,694 2,762,687 2,910,253 2,698,125
Less: Capitalized interest (652) (1,199) (1,732) (2,181) (2,338)
---------- ---------- ---------- ---------- ----------
$3,391,486 $3,442,717 $3,640,730 $3,595,101 $3,057,281
========== ========== ========== ========== ==========
Fixed charges
As detailed above $ 329,674 $ 304,443 $ 394,563 $ 435,788 $ 439,339
Interest on deposits 1,363,145 1,858,251 2,368,124 2,474,485 2,258,786
---------- ---------- ---------- ---------- ----------
Fixed charges $1,693,019 $2,162,694 $2,762,687 $2,910,253 $2,698,125
========== ========== ========== ========== ==========
Ratio of earnings to fixed charges
including interest on deposits 2.00x 1.59x 1.32x 1.24x 1.13x
<FN>
- ---------------
(1) Results of Bank One, Texas, NA are consolidated beginning October 1, 1991
(2) Prior period balances have been restated to reflect the first quarter 1993
pooling of interests of Valley National Corporation and the second quarter
1993 poolings of interests of Key Centurion Bancshares, Inc. and First
Community Bancorp, Inc.
</TABLE>
<PAGE> 1
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
PERCENT
1993 1992 CHANGE
<S> <C> <C> <C>
------------------------------------------------------------------------------------
PER COMMON SHARE
Net income....................................... $ 2.98 $ 2.29 30.1%
Cash dividends................................... 1.07 .89 20.2
Stockholders' equity............................. 17.82 15.98 11.5
FOR THE YEAR $(millions)
-------------------
Total revenue.................................... $ 7,227 $ 7,358 (1.8)%
Net income....................................... 1,140 877 30.0
AT YEAR-END
Assets........................................... $79,919 $76,739 4.1%
Deposits......................................... 60,943 61,755 (1.3)
Total loans and leases........................... 53,846 47,809 12.6
Total equity..................................... $ 7,034 $ 6,242 12.7
Common shares outstanding (000).................. 380,687 374,339
Common stockholders of record.................... 71,384 58,114
Employees (full-time equivalent)................. 45,300 42,700
Banking offices.................................. 1,331 1,268
Shares and per share data reflect the 10% common stock
dividend effective February 10, 1994 and the five-shares-
for-four-shares stock split effective August 31, 1993.
Amounts have been restated to reflect the effect of three
1993 affiliations accounted for as poolings of interests.
</TABLE>
CORPORATE PROFILE
BANC ONE CORPORATION is a bank holding company, incorporated in Ohio. The
Corporation operates 81 affiliate banking organizations in Arizona, California,
Colorado, Illinois, Indiana, Kentucky, Michigan, Ohio, Oklahoma, Texas, Utah,
West Virginia and Wisconsin. BANC ONE CORPORATION also operates several
additional corporations that engage in data processing, venture capital,
investment and merchant banking, trust, brokerage, investment management,
equipment leasing, mortgage banking, consumer finance and insurance.
Inside Front Cover
<PAGE> 2
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
FINANCIAL STATEMENTS
REPORT OF INDEPENDENT ACCOUNTANTS
To the Stockholders and the Board of Directors
BANC ONE CORPORATION
We have audited the accompanying consolidated balance sheets
of BANC ONE CORPORATION and Subsidiaries as of December 31,
1993 and 1992, and the related statements of income, changes
in stockholders' equity and cash flows for each of the three
years in the period ended December 31, 1993. These financial
statements are the responsibility of management. Our
responsibility is to express an opinion on these financial
statements based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether
the financial statements are free of material misstatement. An
audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used
and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We
believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the consolidated
financial position of BANC ONE CORPORATION and Subsidiaries at
December 31, 1993 and 1992 and the results of operations and
cash flows for each of the three years in the period ended
December 31, 1993, in conformity with generally accepted
accounting principles.
As disclosed in Note 13 and Note 18 to the financial
statements, the Corporation changed its method of accounting
for income taxes and postretirement benefits other than
pensions in 1993.
COOPERS & LYBRAND
Columbus, Ohio
February 21, 1994
22
<PAGE> 3
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
DECEMBER 31,
-----------------------------
$(THOUSANDS, EXCEPT SHARE DATA) 1993 1992
<S> <C> <C>
-----------------------------------------------------------------------------------------------
ASSETS:
Cash and due from banks........................................ $ 4,757,475 $ 5,186,870
Short-term investments (including Eurodollar placements and
foreign negotiable certificates of deposit of $4,492 and
$299,578 at December 31, 1993 and 1992)...................... 931,959 2,267,310
SECURITIES:
Securities held for investment (market value approximates
$16,903,201 and $16,575,168 at December 31, 1993 and
1992)...................................................... 16,591,970 16,349,280
Securities held for sale (market value approximates $860,897
and $1,722,954 at December 31, 1993 and 1992).............. 815,941 1,658,735
------------- -----------
TOTAL SECURITIES 17,407,911 18,008,015
LOANS AND LEASES (net of unearned income of $676,980 and
$655,983 at December 31, 1993 and 1992)...................... 53,845,620 47,809,448
Reserve for loan and lease losses............................ 918,153 909,896
------------- -----------
NET LOANS AND LEASES..................................... 52,927,467 46,899,552
Collection pools............................................... 22,302 420,220
Other assets:
Bank premises and equipment, net............................. 1,387,218 1,313,044
Interest earned not collected................................ 624,185 598,119
Other real estate owned...................................... 193,158 288,252
Excess of cost over net assets of affiliates purchased....... 227,312 265,003
Other........................................................ 1,439,574 1,492,734
------------- -----------
Total other assets....................................... 3,871,447 3,957,152
------------- -----------
TOTAL ASSETS............................................. $ 79,918,561 $76,739,119
------------- -----------
------------- -----------
LIABILITIES:
DEPOSITS:
Non-interest bearing......................................... $ 13,674,976 $13,158,961
Interest bearing............................................. 47,268,205 48,595,644
------------- -----------
TOTAL DEPOSITS............................................. 60,943,181 61,754,605
Federal funds purchased and repurchase agreements.............. 6,744,437 4,631,394
Other short-term borrowings.................................... 2,020,176 1,383,927
Long-term borrowings........................................... 1,701,662 1,357,462
Accrued interest payable....................................... 222,946 258,671
Other liabilities.............................................. 1,252,521 1,111,474
------------- -----------
TOTAL LIABILITIES.......................................... 72,884,923 70,497,533
------------- -----------
Commitments and contingencies (Notes 14 and 17)
STOCKHOLDERS' EQUITY:
Preferred stock, 35,000,000 shares authorized:
Class B convertible, no par value, 373,076 shares issued and
outstanding, at December 31, 1992.......................... 9,700
Series C convertible, no par value, 4,998,000 and 5,000,000
shares issued and outstanding, at December 31, 1993 and
1992....................................................... 249,900 250,000
Common stockholders' equity:
Common stock, no par value, $5 stated value, 600,000,000
shares authorized, 380,687,187 and 272,246,801 shares
issued and outstanding, at December 31, 1993 and 1992,
respectively (December 31, 1993 shares reflect the 10%
stock dividend effective February 10, 1994 and the
five-shares-for-four-shares stock split effective August
31, 1993).................................................. 1,903,436 1,361,234
Capital in excess of aggregate stated value of common
stock...................................................... 3,833,611 3,009,221
Retained earnings............................................ 1,046,691 1,611,431
------------- -----------
TOTAL STOCKHOLDERS' EQUITY................................. 7,033,638 6,241,586
------------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................. $ 79,918,561 $76,739,119
------------- -----------
------------- -----------
</TABLE>
The accompanying notes are an integral part of the financial
statements.
23
<PAGE> 4
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF INCOME
for the three years ended December 31, 1993
<TABLE>
<CAPTION>
$(THOUSANDS, EXCEPT PER SHARE AMOUNTS) 1993 1992 1991
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
INTEREST INCOME:
Interest and fees on loans and leases..................................... $ 4,759,498 $4,638,246 $4,197,706
Interest and dividends on:
Taxable securities...................................................... 812,899 994,065 874,578
Tax exempt securities................................................... 118,426 132,178 162,546
Other interest income, including interest on Eurodollar placements and
foreign negotiable certificates of deposit of $2,415, $17,161, and
$22,316 in 1993, 1992, and 1991......................................... 37,255 116,470 184,105
Interest on Collection pools.............................................. 7,053 36,965 52,295
Interest on Note receivable from FDIC..................................... 18,808
------------ ---------- ----------
TOTAL INTEREST INCOME................................................... 5,735,131... 5,917,924 5,490,038
INTEREST EXPENSE:
Interest on deposits:
Demand and savings deposits............................................. 599,432 737,056 884,035
Time deposits........................................................... 763,713 1,121,195 1,484,089
Other borrowings.......................................................... 281,903 261,853 354,326
------------ ---------- ----------
TOTAL INTEREST EXPENSE.................................................. 1,645,048 2,120,104 2,722,450
------------ ---------- ----------
NET INTEREST INCOME..................................................... 4,090,083 3,797,820 2,767,588
Provision for loan and lease losses......................................... 368,507 604,131 586,239
------------ ---------- ----------
Net interest income after provision for loan and lease losses........... 3,721,576 3,193,689 2,181,349
OTHER INCOME:
Income from fiduciary activities.......................................... 211,796 205,120 184,506
Service charges on deposit accounts....................................... 432,296 413,494 308,937
Loan processing and service income........................................ 451,786 434,417 380,945
Securities gains.......................................................... 16,016 24,677 53,121
Income from management of Collection pools, net........................... 22,777 28,226 59,301
Equity in earnings of Bank One, Texas, NA, net of income tax.............. 57,012
Other..................................................................... 356,988 334,535 294,467
------------ ---------- ----------
TOTAL OTHER INCOME...................................................... 1,491,659 1,440,469 1,338,289
OTHER EXPENSES:
Salaries and related costs................................................ 1,618,342 1,511,310 1,209,872
Net occupancy expense, exclusive of depreciation.......................... 151,521 174,605 124,953
Equipment expense......................................................... 106,754 97,103 87,149
Taxes other than income and payroll....................................... 76,514 70,290 60,054
Depreciation and amortization............................................. 262,759 216,331 149,486
Outside services and processing........................................... 489,646 469,366 287,265
Marketing and development................................................. 148,401 119,810 94,570
Communication and transportation.......................................... 224,921 196,044 160,312
Other..................................................................... 435,258 498,077 466,202
------------ ---------- ----------
TOTAL OTHER EXPENSES.................................................... 3,514,116 3,352,936 2,639,863
------------ ---------- ----------
INCOME BEFORE INCOME TAXES AND CHANGE IN ACCOUNTING PRINCIPLE............... 1,699,119 1,281,222 879,775
Income tax provision:
Income excluding securities transactions.................................. (572,924) (396,244) (197,426)
Securities transactions................................................... (5,606) (8,390) (18,061)
------------ ---------- ----------
Provision for income taxes.............................................. (578,530) (404,634) (215,487)
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE........... 1,120,589 876,588 664,288
Cumulative effect of change in method of accounting for income taxes........ 19,391
------------ ---------- ----------
NET INCOME................................................................ $ 1,139,980 $ 876,588 $ 664,288
------------ ---------- ----------
------------ ---------- ----------
NET INCOME PER COMMON SHARE (AMOUNTS REFLECT THE 10% COMMON STOCK DIVIDEND
EFFECTIVE FEBRUARY 10, 1994 AND THE FIVE-SHARES-FOR-FOUR-SHARES STOCK
SPLIT EFFECTIVE AUGUST 31, 1993)
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING PRINCIPLE......... $ 2.93 $ 2.29 $ 1.82
Cumulative effect of change in method of accounting for income taxes.... .05
------------ ---------- ----------
NET INCOME PER COMMON SHARE................................................. $ 2.98 $ 2.29 $ 1.82
------------ ---------- ----------
------------ ---------- ----------
Weighted average common shares outstanding (000)............................ 376,828 373,699 356,102
------------ ---------- ----------
------------ ---------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
24
<PAGE> 5
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY
for the three years ended December 31, 1993
<TABLE>
<CAPTION>
CAPITAL IN
EXCESS OF
COMMON STOCK AGGREGATE
--------------------------
STATED VALUE TOTAL
STATED RETAINED
OF COMMON STOCKHOLDERS'
PREFERRED VALUE EARNINGS
$(THOUSANDS, EXCEPT PER SHARE AMOUNTS) STOCK SHARES STOCK EQUITY
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
BALANCE, DECEMBER 31, 1990................. $ 23,156 238,701,770 $1,193,508 $1,854,143 $ 1,443,846 $4,514,653
Net income............................... 664,288 664,288
Cash dividends:
Corporation:
Common ($.76 per share)(1)........... (186,968) (186,968)
Class B Preferred ($3.00 per
share)............................ (2,421) (2,421)
Series C Preferred ($2.54 per
share)............................ (12,639) (12,639)
Pooled affiliates...................... (43,434) (43,434)
Shares issued in acquisitions............ 1,019,632 5,098 20,702 25,800
Preferred stock offering, net of issuance
costs.................................. 250,000 (5,350) 244,650
Common stock offering, net of issuance
costs.................................. 7,625,000 38,125 280,965 319,090
Conversion of preferred into common...... (3,742) 351,749 1,759 1,983
Exercise of stock options, net of shares
purchased.............................. (57) (1) (2,792) (2,793)
Pooled affiliate stock issuance and
other.................................. 1,455,658 7,280 19,726 12,138 39,144
10% common stock dividend at fair market
value.................................. 17,330,839 86,654 773,389 (860,043)
--------- ----------- ---------- ---------- ----------- ----------
BALANCE, DECEMBER 31, 1991................. 269,414 266,484,591 1,332,423 2,942,766 1,014,767 5,559,370
Net income............................... 876,588 876,588
Cash dividends:
Corporation:
Common ($.89 per share)(1)........... (257,101) (257,101)
Class B Preferred ($3.00 per
share)............................ (1,486) (1,486)
Series C Preferred ($3.50 per
share)............................ (17,500) (17,500)
Pooled affiliates...................... (25,748) (25,748)
Shares issued in acquisitions............ 1,254,000 6,270 6,371 20,049 32,690
Conversion of preferred into common...... (9,714) 995,789 4,979 4,735
Exercise of stock options, net of shares
purchased.............................. 569,311 2,847 (22,486) (19,639)
Pooled affiliate stock issuance and
other.................................. 2,943,110 14,715 77,835 1,862 94,412
--------- ----------- ---------- ---------- ----------- ----------
BALANCE, DECEMBER 31, 1992................. 259,700 272,246,801 1,361,234 3,009,221 1,611,431 6,241,586
Net income............................... 1,139,980 1,139,980
Cash dividends:
Corporation:
Common ($1.07 per share)(1).......... (388,245) (388,245)
Class B Preferred ($.75 per share)... (216) (216)
Series C Preferred ($3.50 per
share)............................ (17,498) (17,498)
Pooled affiliates...................... (4,987) (4,987)
Shares issued in acquisitions............ 4,907,702 24,539 12,269 59,409 96,217
Conversion of preferred into common...... (9,800) 1,005,825 5,029 4,771
Exercise of stock options, net of shares
purchased.............................. (575,147) (2,876) (44,758) (47,634)
Pooled affiliate stock issuance and
other.................................. 304,452 1,521 12,062 852 14,435
Common stock split five-for-four,
effective August 31, 1993.............. 68,189,628 340,949 (340,949)
10% common stock dividend at fair market
value.................................. 34,607,926 173,040 1,180,995 (1,354,035)
--------- ----------- ---------- ---------- ----------- ----------
BALANCE, DECEMBER 31, 1993................. $ 249,900 380,687,187 $1,903,436 $3,833,611 $ 1,046,691 $7,033,638
--------- ----------- ---------- ---------- ----------- ----------
--------- ----------- ---------- ---------- ----------- ----------
</TABLE>
(1) Amounts reflect the effect of the 10% common stock dividends effective
February 14, 1992 and February 10, 1994, and the five-shares-for-four-shares
stock split effective August 31, 1993.
The accompanying notes are an integral part of the financial statements.
25
<PAGE> 6
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
CONSOLIDATED STATEMENT OF CASH FLOWS
for the three years ended December 31, 1993
<TABLE>
<CAPTION>
$(THOUSANDS) 1993 1992 1991
<S> <C> <C> <C>
----------------------------------------------------------------------------------------------
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
NET INCOME...................................... $1,139,980 $ 876,588 $ 664,288
Adjustments:
Provision for loan and lease losses......... 368,507 604,131 586,239
Depreciation and amortization............... 331,969 272,338 153,532
Net (increase) decrease in trading account
portfolio................................ (14,754) 52,411 (182,222)
Net increase in warehoused mortgage loans... (428,617) (406,340) (221,337)
Net change in deferred loan fees and
costs.................................... (8,835) (3,075) 6,581
Gain on sale of other assets................ (21,197) (28,845) (79,895)
Gain on sale of loans....................... (1,960) (14,536) (25,768)
Gain on sale of investment securities....... (16,016) (24,677) (53,121)
Net decrease in other assets................ 243,551 114,159 193,847
Net (decrease) increase in other
liabilities.............................. (131,480) (13,947) 21,697
Net change in deferred income taxes......... 42,849 (40,366) (11,097)
Cumulative effect of change in accounting
principle................................ (19,391)
Equity in earnings of Bank One, Texas,
NA....................................... (57,012)
---------- ----------- ----------
NET CASH PROVIDED BY OPERATING ACTIVITIES... 1,484,606 1,387,841 995,732
---------- ----------- ----------
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Purchase of securities held for sale............ (350,000)
Purchases of investment securities.............. (6,010,067) (10,682,930) (7,022,627)
Maturities of securities held for sale.......... 476,242
Maturities of investment securities............. 6,068,254 6,929,321 3,572,611
Proceeds from the sale of securities held for
sale.......................................... 716,764
Proceeds from the sales of investment
securities.................................... 83,525 1,369,257 3,092,568
Net increase in loans, excluding sales and
purchases..................................... (4,745,355) (2,784,492) (2,847,880)
Proceeds from the sales of loans................ 76,721 694,499 643,902
Purchases of loans and related premiums......... (768,264) (747,056) (369,410)
Net decrease in short-term investments.......... 1,410,165 2,430,144 336,252
Additions to bank premises and equipment........ (274,836) (268,364) (214,452)
Disposals of bank premises and equipment........ 38,643 38,529 40,450
Payments received on Collection pools........... 398,742 885,186 718,838
Net decrease in note receivable from FDIC....... 321,502
Cash acquired less purchase price of final 61%
interest in Bank One, Texas, NA............... 544,740
Net cash acquired in other acquisitions......... 36,148 247,327 307,082
Net decrease (increase) in mortgage servicing
rights........................................ 12,283 (53,819) (2,672)
All other investing activities, net............. (8,347) (3,520)
---------- ----------- ----------
NET CASH USED IN INVESTING ACTIVITIES....... (2,831,035) (1,950,745) (882,616)
---------- ----------- ----------
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Net increase in demand deposit, money market and
savings accounts.............................. 588,636 4,614,205 3,099,252
Net decrease in certificates of deposits........ (2,317,125) (4,949,369) (2,092,622)
Net increase (decrease) in short-term
borrowings.................................... 2,715,250 991,844 (379,426)
Proceeds from the issuance of long-term
borrowings.................................... 395,887 493,912 34,578
Repayment of long-term borrowings............... (51,687) (80,266) (99,952)
Proceeds from issuance of stock................. 563,740
Cash dividends paid............................. (379,418) (202,155) (234,230)
All other financing activities, net............. (34,509) 36,000 23,255
---------- ----------- ----------
NET CASH PROVIDED BY FINANCING ACTIVITIES... 917,034 904,171 914,595
---------- ----------- ----------
Increase (decrease) in cash and cash
equivalents................................... (429,395) 341,267 1,027,711
Cash and cash equivalents at January 1, ........ 5,186,870 4,845,603 3,817,892
---------- ----------- ----------
CASH AND CASH EQUIVALENTS AT DECEMBER 31, ...... $4,757,475 $ 5,186,870 $4,845,603
---------- ----------- ----------
---------- ----------- ----------
</TABLE>
See Note 22 for supplemental disclosures.
The accompanying notes are an integral part of the financial
statements.
26
<PAGE> 7
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
NOTES TO FINANCIAL STATEMENTS
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The following is a summary of significant accounting policies
followed in the preparation of the financial statements:
Basis of Presentation:
The accompanying prior period financial statements have been
restated for three affiliations described in Note 2, which
have been accounted for as poolings of interests. For purposes
of comparability, certain prior year amounts have been
reclassified to conform with current year presentation.
Principles of Consolidation:
"The Corporation" is defined as parent company only. "BANC
ONE" is defined as the Corporation and all significant
majority-owned subsidiaries. The consolidated financial
statements include the accounts of the Corporation and all
significant majority-owned subsidiaries (affiliates). See Note
2 for information relative to affiliations and pending
affiliations. Material intercompany accounts and transactions
have been eliminated. Through September 30, 1991, the income
statement of BANC ONE reflected BANC ONE's share of Bank One,
Texas, NA (Texas) net income in other income. Since October 1,
1991, Texas' assets and liabilities and the results of its
operations have been consolidated with BANC ONE.
Securities:
Securities purchased for trading purposes are held in the
trading portfolio at market value. Securities that are being
held for indefinite periods of time, including securities that
management intends to use as part of its asset/liability
strategy, or that may be sold in response to changes in
interest rates, changes in prepayment risk, the need to
increase regulatory capital or other similar factors, are
classified as held for sale and are carried at the lower of
cost or aggregate market value with any write-downs recorded
in the income statement. Other debt securities that management
has the ability and intent to hold to maturity are included in
the investment portfolio at cost, adjusted for amortization of
premium or accretion of discount using the interest method.
Marketable equity securities are valued at the lower of cost
or market. Gains and losses on securities are accounted for on
the trade date using the securities with the highest cost
factor unless specific securities are identified.
Bank Premises and Equipment:
Bank premises and equipment are stated at cost less
accumulated depreciation. Depreciation is provided principally
on the straight-line method over the estimated useful lives of
the assets. Upon the sale or other disposal of the assets, the
cost and related accumulated depreciation are removed from the
accounts and the resulting gain or loss is recognized.
Maintenance and repairs are charged to expense as incurred,
while renewals and betterments are capitalized. Software costs
for internally developed systems are expensed as incurred.
Software costs related to externally developed systems are
capitalized and include systems intended for internal and
external use.
Other Real Estate Owned:
Other real estate owned primarily represents properties
acquired by the Corporation's affiliates through customer loan
defaults. The real estate is stated at an amount equal to the
lesser of the loan balance prior to foreclosure, plus costs
incurred for improvements to the property, or fair value less
estimated selling costs of the property.
Provision for Loan and Lease Losses:
The provision for loan and lease losses charged to expense is
based upon each affiliate's past loan and lease loss
experience and an evaluation of potential losses in the
current loan and lease portfolios. In management's opinion,
the provision is sufficient to maintain the reserve for
possible loan and lease losses at a level that adequately
provides for potential losses.
27
<PAGE> 8
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
Income Recognition:
Income earned is recognized principally on the accrual basis
of accounting. Certain fees, principally service, are
recognized as income when billed. BANC ONE's policy provides
that commercial loans are placed on nonaccrual status after 90
days past due or when collection of interest and principal is
in doubt. Residential real estate loans are placed on
nonaccrual after 120 days past due or when deemed to be
uncollectible. At that point, the loans are written down to
the current value of the underlying collateral or estimated
recoverable value. For most installment loans, all accrued
interest and the remaining principal balance are charged off
at the earlier of when a loan reaches 120 days past due or
when deemed to be uncollectible. Credit card loans are charged
off when they are deemed uncollectible or reach 180 days past
due. Generally, when a loan is placed on nonaccrual status,
the Corporation's affiliates charge all previously accrued and
unpaid interest against income. In future periods, interest
will be included in income to the extent received only if
principal recovery is reasonably assured.
Loan origination fees and costs on defined maturity loans
are deferred and amortized into interest income using a method
which approximates the interest method over the estimated life
of the loan. Loan origination fees and costs on demand loans
are deferred and amortized into interest income on a
straight-line basis over a period which is consistent with the
understanding between BANC ONE and the borrower or, if no
understanding exists, over the estimated loan term. Loan
origination fees and costs on credit card and other revolving
loans are deferred and amortized into interest or other income
using a straight-line method, typically over a term of one
year. BANC ONE has net deferred fee income on credit cards of
$7.6 million and $8.6 million at December 31, 1993 and 1992,
respectively.
Direct Financing Leases:
The leasing operations of the affiliates consist of the
leasing of various types of equipment under leases principally
classified as direct financing leases and ranging in maturity
from two to 15 years. Interest and service charges, net of
initial direct costs, are deferred and reported as income in
decreasing amounts over the term of the lease so as to provide
an approximate constant yield on the outstanding principal
balance.
Purchase Method of Accounting:
Net assets of organizations acquired in purchase transactions
are recorded at fair value at date of acquisition. The excess
of cost over net assets of affiliates purchased is being
amortized using the straight-line and accelerated methods over
terms ranging from five to 40 years. Accumulated amortization
was $168 million at December 31, 1993 and $131 million at
December 31, 1992 and annual amortization was approximately
$37 million, $25 million and $25 million in 1993, 1992 and
1991, respectively. Core deposits and other identifiable
intangible assets are typically amortized on an accelerated
basis over the estimated periods benefited.
Derivative Financial Instruments:
BANC ONE enters into a variety of derivative financial
instruments as part of its interest rate risk management
strategy and in its customer service and trading activities.
The most frequently used derivative products are various types
of interest rate swaps. However, interest rate futures,
options, caps, floors and forwards are also utilized.
Derivatives are typically classified as either hedges,
synthetic alterations, anticipatory hedges or matched book
agreements. The criteria which must be satisfied for each of
these classifications are as follows: Hedge -(1) The asset or
liability to be hedged exposes BANC ONE, as a whole, to
interest rate risk; (2) The derivative acts to reduce the
interest rate risk by moving the institution closer to being
insensitive to interest rate changes; (3) The derivative is
designated and effective as a hedge of a balance sheet item.
Synthetic Alteration -(1) The asset or liability to be
converted exposes the institution, as a whole, to interest
rate risk; (2) The derivative is designated and effective as a
synthetic alteration of a balance sheet item. Anticipatory
Hedge -(1) Satisfy the criteria in Hedge above; (2) The
significant characteristics and expected terms of the
anticipated transaction must be identified; (3) It must be
probable that the anticipated transaction will occur. Matched
Book -There must be separate agreements that have offsetting
payment streams and the same maturity, repricing dates and
notional amounts.
28
<PAGE> 9
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
In order for a forward starting derivative to be accounted
for as either a hedge or a synthetic alteration, it must
satisfy the appropriate criteria above, as well as the
following additional criteria: (1) The start date of the
derivative must not extend beyond that point in time at which
BANC ONE believes its modeling systems produce reliable
interest rate sensitivity information; and (2) The related
balance sheet item must, from trade date to final maturity,
have sufficient balances for hedge/alteration. If the initial
assignment is changed, or should sufficient balances not be
available, the excess portion of the derivative must be marked
to market.
Accrual accounting is applied for derivatives classified
as described above and income and expense are recorded in the
same category as the related balance sheet item. The related
balance sheet item is generally a pool of similar products.
For interest rate futures, gains and losses are deferred and
amortized over the expected remaining life of the related
assets or liabilities. For matched book transactions, income
and expense are recorded in other income. Fees related to
derivatives are amortized on the interest method over the life
of the derivative.
If the amount of the particular balance sheet item being
hedged or altered falls below that of the related derivative,
the excess portion of the derivative is marked to market and
the resulting gain or loss is included in income. If a
derivative is terminated, the gain or loss is deferred and
amortized over the remaining original life of a synthetic
alteration or over the life of the hedged asset or liability
for a hedge.
Derivatives used in trading activities are carried at
market value. Any changes in market value are recognized in
trading account profits.
Statement of Cash Flows:
For purposes of reporting cash flows, cash and cash
equivalents include cash and due from banks.
Net Income Per Common Share:
Net income per common share is calculated by dividing net
income available to common stockholders (net income less
preferred dividends) by the average number of common shares
outstanding and any dilutive common stock equivalents for the
period.
Stock Split and Stock Dividend:
All per share and average share information has been restated
for the five-shares-for-four-shares common stock split
effective August 31, 1993 and the effect of the 10% common
stock dividend effective February 10, 1994, and is
appropriately noted as such in the accompanying financial
statements and notes thereto.
--------------------------------------------------------------
NOTE 2: AFFILIATIONS AND PENDING AFFILIATIONS
During the year ended December 31, 1993, the Corporation was a
party to business combinations with various operating entities
as detailed below. Share data below have been adjusted as
necessary to give effect to the five-shares-for-four-shares
common stock split effective August 31, 1993 and the 10%
common stock dividend effective February 10, 1994.
On May 3, 1993, the Corporation acquired all of the
outstanding shares of Key Centurion Bancshares, Inc. (Key
Centurion) of Charleston, West Virginia, in exchange for
14,778,101 shares of BANC ONE common stock. Key Centurion had
total assets of approximately $3.2 billion at December 31,
1992.
On May 3, 1993, the Corporation acquired all of the
outstanding shares of First Community Bancorp, Inc. (First
Community) of Rockford, Illinois, in exchange for 3,491,898
shares of BANC ONE common stock. First Community had total
assets of approximately $.8 billion at December 31, 1992.
On March 31, 1993, the Corporation acquired all of the
outstanding common shares of Valley National Corporation
(Valley) of Phoenix, Arizona, in exchange for 37,035,499
shares of BANC ONE common stock. Valley had total assets of
approximately $11.4 billion at December 31, 1992.
29
<PAGE> 10
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
The aforementioned acquisitions have been accounted for as
poolings of interests, and accordingly, the accompanying
financial statements have been restated. The following table
shows the effect of their results of operations for the
periods prior to combination:
<TABLE>
<CAPTION>
POOLED
$(THOUSANDS) BANC ONE AFFILIATES COMBINED
<S> <C> <C> <C>
-------------------------------------------------------------------------------
1993 Total revenue................. $6,964,749 $ 262,041 $$7,226,790
Net income.................... 1,097,279 42,701 1,139,980
1992 Total revenue................. 5,999,015 1,359,378 7,358,393
Net income.................... 781,284 95,304 876,588
1991 Total revenue................. 5,344,135 1,484,192 6,828,327
Net income.................... 591,883 72,405 664,288
</TABLE>
Merger expenses of $30.6 million related to the above
acquisitions were charged to expense during 1993. The
after-tax impact of these expenses on earnings per share was
$.07. Merger related expenses of $108.0 million were charged
to expense in 1992. The after-tax impact of these expenses on
earnings per share was $.20. Merger-related expenses in 1991
were not significant.
On December 31, 1993, the Corporation acquired all of the
outstanding common shares of The Central Banking Group, Inc.
(Central) of Oklahoma City, Oklahoma, in exchange for
2,770,360 shares of BANC ONE common stock. Central had total
assets of approximately $542 million at December 31, 1992.
On December 17, 1993, the Corporation acquired all of the
outstanding common shares of First Financial Associates, Inc.
(First Financial) of Kenosha, Wisconsin, in exchange for
2,174,361 shares of BANC ONE common stock. First Financial had
total assets of approximately $406 million at December 31,
1992.
On November 1, 1993, the Corporation acquired all of the
outstanding common shares of Colorado Western Bancorp. Inc.
(Colorado Western) of Montrose, Colorado, in exchange for
453,751 shares of BANC ONE common stock. Colorado Western had
total assets of approximately $74 million at December 31,
1992.
The acquisitions of Central, First Financial and Colorado
Western have been accounted for as poolings of interests,
however, the accompanying financial statements have not been
restated due to immateriality.
During April 1993, the Corporation acquired all of the
outstanding shares of United National Bank of Denton, Texas,
(Denton) for $3.95 million of cash. The acquisition was
accounted for as a purchase and the results of operations are
included in the consolidated statement of income from the date
of acquisition.
During the fourth quarter of 1993, the Corporation entered
into a definitive agreement to acquire Liberty National
Bancorp, Inc. (Liberty), located in Louisville, Kentucky. This
acquisition is expected to be completed in the third quarter
of 1994 and will be accounted for as a pooling of interests.
Liberty had $4.9 billion in total assets at December 31, 1993
and net income of $51.5 million, $45.6 million and $39.1
million in 1993, 1992 and 1991.
The Corporation has announced four other pending
acquisitions which are not significant in the aggregate.
On January 30, 1990, the Corporation and the Federal
Deposit Insurance Corporation (FDIC) entered into a series of
definitive agreements effective January 1, 1990, providing for
the Corporation to purchase Bank One, Texas, NA (Texas) over
time. Texas included the assets and liabilities of 20 former
MCorp affiliate banks. BANC ONE acquired the common stock of
Texas on various dates to October 28, 1991. Until October 1,
1991, because BANC ONE owned less than 50% of Texas and
because the FDIC controlled the Board of Directors of Texas,
BANC ONE accounted for Texas using the equity method. In using
this accounting method, BANC ONE included in its balance sheet
only its net investment in Texas which included its shares of
Texas' earnings and additional capital contributions. No
specific assets and liabilities of Texas were included.
Through September 30, 1991, the income statement of BANC ONE
included BANC ONE's share of Texas' net income in other
income. Since October 1, 1991, Texas' assets and liabilities
and the results of its operations have been consolidated with
BANC ONE. Financial assistance was provided by agencies of the
Federal government related to this transaction (Note 7).
See Note 22 for additional acquisition information.
30
<PAGE> 11
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
NOTE 3: SECURITIES AND DERIVATIVES
Securities
The following table illustrates the market values, maturities
and taxable equivalent yields of investment securities by type
at December 31, 1993. The securities classifications shown
below, and the accounting applied to these classifications,
are significantly different from those under Statement of
Financial Accounting Standards No. 115, Accounting for Certain
Investments in Debt and Equity Securities (SFAS 115), which
will be adopted by BANC ONE for financial periods commencing
January 1, 1994.
<TABLE>
<CAPTION>
MATURITIES OF 1993 SECURITIES(1)
-------------------------------------------------------------------------------------
SECURITIES 1999-
$(MILLIONS) 1994 1995 1996 1997 1998 2003
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
United States treasury and federal
agencies.................................
Book value............................. $ 1,387 $ 775 $ 1,238 $ 3,063 $ 100 $ 106
Market value........................... 1,397 787 1,259 3,126 102 111
Taxable equivalent yield............... 6.32% 6.00% 5.30% 5.55% 6.10% 8.07%
Mortgage and asset-backed securities:
Government
Book value.......................... 454 479 714 887 438 284
Market value........................ 459 486 717 889 443 287
Taxable equivalent yield............ 6.18% 6.16% 4.89% 4.37% 5.22% 5.22%
Other:
Book value.......................... 812 949 846 614 429 73
Market value........................ 819 954 852 617 428 73
Taxable equivalent yield............ 5.15% 4.71% 4.82% 5.11% 4.42% 4.16%
Tax exempt
Book value............................. 526 259 176 268 154 598
Market value........................... 531 272 186 290 168 649
Taxable equivalent yield............... 6.61% 10.34% 9.89% 10.58% 10.13% 9.05%
Other
Book value............................. 56 13 37 7 6 11
Market value........................... 54 13 37 7 6 11
Taxable equivalent yield............... 5.59% 6.34% 4.07% 5.62% 7.16% 9.25%
Securities held for sale(2)
Book value............................. 28 48 244 216 115 162
Market value........................... 28 50 256 230 122 172
Taxable equivalent yield............... 4.12% 7.41% 8.70% 8.99% 8.76% 8.81%
TOTAL BOOK VALUE.......................... $ 3,263 $ 2,523 $ 3,255 $ 5,055 $ 1,242 $ 1,234
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
TOTAL MARKET VALUE........................ $ 3,288 $ 2,562 $ 3,307 $ 5,159 $ 1,269 $ 1,303
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
TAXABLE EQUIVALENT YIELD.................. 6.02% 6.02% 5.57% 5.70% 5.96% 7.76%
----- ----- ----- ----- ----- -----
----- ----- ----- ----- ----- -----
<CAPTION>
ENDING BALANCES AT
DECEMBER 31,
SECURITIES -------------------------------------------
$(MILLIONS) 2004+ 1993 1992 1991
<S> <<C> <C> <C> <C>
- ------------------------------------------
United States treasury and federal
agencies.................................
Book value............................. $ 60 $ 6,729 $ 7,385 $ 4,014
Market value........................... 60 6,842 7,414 4,137
Taxable equivalent yield............... 6.12% 5.77%
Mortgage and asset-backed securities:
Government
Book value.......................... 378 3,634 3,696 6,085
Market value........................ 379 3,660 3,720 6,292
Taxable equivalent yield............ 4.88% 5.16%
Other:
Book value.......................... 37 3,760 3,098 3,118
Market value........................ 37 3,780 3,116 3,179
Taxable equivalent yield............ 3.27% 4.84%
Tax exempt
Book value............................. 128 2,109 1,799 2,047
Market value........................... 134 2,230 1,910 2,169
Taxable equivalent yield............... 8.71% 8.92%
Other
Book value............................. 230 360 371 346
Market value........................... 263 391 415 360
Taxable equivalent yield............... 6.30% 6.05%
Securities held for sale(2)
Book value............................. 3 816 1,659
Market value........................... 3 861 1,723
Taxable equivalent yield............... 7.59% 8.57%
TOTAL BOOK VALUE.......................... $ 836 $ 17,408 $ 18,008 $ 15,610
--- ----------- ----------- -----------
--- ----------- ----------- -----------
TOTAL MARKET VALUE........................ $ 876 $ 17,764 $ 18,298 $ 16,137
--- ----------- ----------- -----------
--- ----------- ----------- -----------
TAXABLE EQUIVALENT YIELD.................. 5.88% 5.96% 6.53% 8.54%
--- ----------- ----------- -----------
--- ----------- ----------- -----------
</TABLE>
(1) Reflects estimated maturity.
(2) Includes primarily mortgage-backed and asset-backed securities.
31
<PAGE> 12
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
The following tables illustrate net realized gains on securities sold or called
and unrealized gains and losses on securities held:
<TABLE>
<CAPTION>
UNREALIZED
GAIN (LOSS)
AS OF
DECEMBER 31,
REALIZED GAIN (LOSS) DURING 1993 1993
--------------------------------------------------------------------- ------------
TOTAL NET
BOOK REALIZED REALIZED REALIZED UNREALIZED
$(MILLIONS) VALUE PROCEEDS GAINS LOSSES GAIN GAINS
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
United States treasury and federal
agencies................................. $ 70 $ 72 $ 2 $ 2 $ 127
Mortgage-backed and asset-backed
securities:
Government............................. 34
Other.................................. 27
Tax exempt................................ 98 99 2 $ (1) 1 125
Other..................................... 99 110 12 (1) 11 35
Securities held for sale.................. 715 717 4 (2) 2 45
----- ----- ---------- ---------- --------- ------------
Total..................................... $ 982 $ 998 $ 20 $ (4) $ 16 $ 393
----- ----- ---------- ---------- --------- ------------
----- ----- ---------- ---------- --------- ------------
<CAPTION>
NET
UNREALIZED UNREALIZED
$(MILLIONS) LOSSES GAIN
<S> <<C> <C>
- ------------------------------------------
United States treasury and federal
agencies................................. $ (14) $ 113
Mortgage-backed and asset-backed
securities:
Government............................. (8) 26
Other.................................. (7) 20
Tax exempt................................ (4) 121
Other..................................... (4) 31
Securities held for sale.................. 45
------------ ------------
Total..................................... $ (37) $ 356
------------ ------------
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
UNREALIZED
GAIN (LOSS)
AS OF
DECEMBER 31,
REALIZED GAIN (LOSS) DURING 1992 1992
--------------------------------------------------------------------- ------------
TOTAL NET
BOOK REALIZED REALIZED REALIZED UNREALIZED
$(MILLIONS) VALUE PROCEEDS GAINS LOSSES GAIN GAINS
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
United States treasury and federal
agencies................................. $ 871 $ 887 $ 16 $ 16 $ 95
Mortgage-backed and asset-backed
securities:
Government............................. 48 48 36
Other.................................. 156 157 2 $ (1) 1 26
Tax exempt................................ 165 166 2 (1) 1 118
Other..................................... 161 168 10 (3) 7 44
Securities held for sale.................. 67
----- ----- ---------- ---------- --------- ------------
Total..................................... $ 1,401 $ 1,426 $ 30 $ (5) $ 25 $ 386
----- ----- ---------- ---------- --------- ------------
----- ----- ---------- ---------- --------- ------------
<CAPTION>
NET
UNREALIZED UNREALIZED
$(MILLIONS) LOSSES GAIN
<S> <<C> <C>
- ------------------------------------------
United States treasury and federal
agencies................................. $ (66) $ 29
Mortgage-backed and asset-backed
securities:
Government............................. (12) 24
Other.................................. (8) 18
Tax exempt................................ (7) 111
Other..................................... 44
Securities held for sale.................. (3) 64
------------ ------------
Total..................................... $ (96) $ 290
------------ ------------
------------ ------------
</TABLE>
<TABLE>
<CAPTION>
UNREALIZED
GAIN (LOSS)
AS OF
DECEMBER 31,
REALIZED GAIN (LOSS) DURING 1991 1991
--------------------------------------------------------------------- ------------
TOTAL NET
BOOK REALIZED REALIZED REALIZED UNREALIZED
$(MILLIONS) VALUE PROCEEDS GAINS LOSSES GAIN GAINS
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
United States treasury and federal
agencies................................. $ 1,124 $ 1,147 $ 24 $ (1) $ 23 $ 124
Mortgage-backed and asset-backed
securities:
Government............................. 771 786 19 (4) 15 211
Other.................................. 128 130 2 2 65
Tax exempt................................ 657 670 17 (4) 13 131
Other..................................... 368 368 9 (9) 14
----- ----- ---------- ---------- --------- ------------
Total..................................... $ 3,048 $ 3,101 $ 71 $ (18) $ 53 $ 545
----- ----- ---------- ---------- --------- ------------
----- ----- ---------- ---------- --------- ------------
<CAPTION>
NET
UNREALIZED UNREALIZED
$(MILLIONS) LOSSES GAIN
<S> <<C> <C>
- ------------------------------------------
United States treasury and federal
agencies................................. $ (1) $ 123
Mortgage-backed and asset-backed
securities:
Government............................. (4) 207
Other.................................. (4) 61
Tax exempt................................ (9) 122
Other..................................... 14
------------ ------------
Total..................................... $ (18) $ 527
------------ ------------
------------ ------------
</TABLE>
32
<PAGE> 13
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
Derivatives
Information is provided below for each significant derivative
product type. The derivatives with which BANC ONE is involved
are primarily related to interest rate swaps. These rate swaps
generally involve the exchange of fixed and floating rate
interest payments based on an underlying notional amount.
Generic swaps' notional amounts do not change for the life of
the contract. Amortizing swaps' notional amounts and lives
change based on certain interest rate indices. Generally, as
rates fall the notional amounts decline more rapidly and as
rates increase notional amounts decline more slowly. A key
assumption in the information below is that rates remain
constant at December 31, 1993 levels. To the extent that rates
change, both the maturity and variable interest rate
information will change. The basis swaps are contracts where
BANC ONE receives an amount based on London inter-bank offered
rate (LIBOR), subject to certain defined caps, and pays an
amount based on prime. Accrual of interest on Forward starting
swaps starts at a predetermined future date. These swaps are
intended to maintain a targeted level of interest rate
sensitivity by replacing items which are maturing or
amortizing.
The notional amounts shown below represent an agreed upon
amount on which calculations of amounts to be exchanged are
based. They do not represent direct credit exposures. BANC
ONE's credit exposure is limited to the net difference between
the calculated pay and receive amounts on each transaction
which is generally netted and paid quarterly. BANC ONE's
policy is to obtain, on at least a monthly basis, sufficient
collateral from swap counterparties to secure receipt of all
amounts due. A more complete discussion of the credit risk of
derivatives is provided in Management's Discussion and
Analysis.
There were $16.4 million and $16.9 million of deferred
premiums received and mark-to-market adjustments at December
31, 1993 and 1992 respectively. There were no past due
amounts, nor were there any reserves for credit losses on
derivatives, as of these dates. The following table
illustrates the maturities and weighted average rates of 1993
derivative products by type.
<TABLE>
<CAPTION>
MATURITIES OF 1993 DERIVATIVE PRODUCTS(1)
---------------------------------------------------------------------------------------------
MATURITY(1) 1999-
$(MILLIONS) 1994 1995 1996 1997 1998 2003
<S> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
Receive fixed generic swaps
Notional value............... $ 647 $ 5,098 $ 8 $ 30 $ 750
Weighted average receive
rate....................... 6.59 % 5.23% 6.82% 4.95% 6.97%
Weighted average pay rate.... 3.43 3.32 3.50 3.50 3.70
Receive fixed amortizing swaps
Notional value............... 8,501 5,793 638 $ 90 16 13
Weighted average receive
rate....................... 5.94 % 5.36% 7.24% 7.23% 8.64% 8.82%
Weighted average pay rate.... 3.37 3.40 3.35 3.47 3.42 3.27
Pay fixed swaps
Notional value............... 646 318 272 267 109 7
Weighted average receive
rate....................... 3.52 % 3.48% 3.38% 3.49% 3.50% 3.38%
Weighted average pay rate.... 7.09 5.00 5.76 6.07 5.30 8.82
Basis swaps
Notional value............... 2,400 3,140 16
Weighted average receive
rate....................... 3.41% 3.42% 3.58%
Weighted average pay rate.... 3.34 3.39 4.58
Forward starting swaps
Notional value............... 6,000 1,500
Weighted average receive
rate....................... 4.90% 5.10%
Weighted average pay rate.... 3.38 3.38
Other derivative products
Notional value............... 569 121 1,833 13 29 31
------------ ------------ ------------ ------------ ------------ --------
Total notional value........... $ 10,363 $ 17,330 $ 6,651 $ 3,510 $ 200 $ 801
------------ ------------ ------------ ------------ ------------ --------
------------ ------------ ------------ ------------ ------------ --------
Total weighted average rates on
swaps:
Receive rate................. 5.82 % 5.13% 4.45% 3.52% 4.25% 6.97%
------------ ------------ ------------ ------------ ------------ --------
------------ ------------ ------------ ------------ ------------ --------
Pay rate..................... 3.62 % 3.40% 3.49% 3.60% 4.74% 3.74%
------------ ------------ ------------ ------------ ------------ --------
------------ ------------ ------------ ------------ ------------ --------
<CAPTION>
DECEMBER
31,
$(MILLIONS) 2004+ 1993
<S> <C><C> <C>
- -------------------------------
Receive fixed generic swaps
Notional value............... $ 150 $ 6,683
Weighted average receive
rate....................... 5.82% 5.57%
Weighted average pay rate.... 3.50 3.38
Receive fixed amortizing swaps
Notional value............... 3 15,054
Weighted average receive
rate....................... 8.82% 5.78%
Weighted average pay rate.... 3.27 3.38
Pay fixed swaps
Notional value............... 1,619
Weighted average receive
rate....................... 3.48%
Weighted average pay rate.... 6.17
Basis swaps
Notional value............... 5,556
Weighted average receive
rate....................... 3.42%
Weighted average pay rate.... 3.37
Forward starting swaps
Notional value............... 7,500
Weighted average receive
rate....................... 4.94%
Weighted average pay rate.... 3.38
Other derivative products
Notional value............... 2 2,598
-------- -----------
Total notional value........... $ 155 $ 39,010
-------- -----------
-------- -----------
Total weighted average rates on
swaps:
Receive rate................. 5.88% 5.11%
-------- -----------
-------- -----------
Pay rate..................... 3.50% 3.50%
-------- -----------
-------- -----------
</TABLE>
(1) Other derivative products include interest rate collars, caps and floors,
futures, exchange-traded options, swap options and currency swaps. Average
rates are not meaningful for these products.
33
<PAGE> 14
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
Activity in derivative products for 1993, 1992 and 1991 is summarized as
follows:
<TABLE>
<CAPTION>
GENERIC AMORTIZING OTHER
NOTIONAL AMOUNTS RECEIVE RECEIVE PAY FORWARD DERIVATIVE
$(MILLIONS) FIXED FIXED FIXED BASIS STARTING PRODUCTS TOTAL
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
Balance, December 31, 1990........ $ 775 $ 2,339 $ 937 $ 550 $ 117 $ 2,861 $ 7,579
Additions......................... 3,000 6,797 509 10,306
Maturities/amortization........... (372 ) (799) (322) (1,493)
Terminations...................... (3,102 ) (3,102)
Forward starting becoming
effective....................... 117 (117)
Other (net)....................... 11 2,753 277 (290) 2,751
------- ---------- ------- ------- -------- ---------- -------
Balance, December 31, 1991........ 312 11,207 1,401 550 2,571 16,041
Additions......................... 500 1,852 501 11,306 14,159
Maturities/amortization........... (86 ) (5,973) (182) (350) (6,591)
Forward starting becoming
effective....................... 2,851 1,005 (3,856)
Other (net)....................... 60 229 (296) (74) (81)
------- ---------- ------- ------- -------- ---------- -------
Balance, December 31, 1992........ 786 10,166 2,429 200 7,450 2,497 23,528
Additions......................... 456 5,272 1,312 5,540 12,000 658 25,238
Maturities/amortization........... (165 ) (5,878) (1,488) (205) (1,057) (8,793)
Terminations...................... (650) (650) (1,300)
Forward starting becoming
effective....................... 5,250 6,050 (11,300)
Other (net)....................... 356 94 16 21 (650) 500 337
------- ---------- ------- ------- -------- ---------- -------
Balance, December 31, 1993........ $6,683 $ 15,054 $ 1,619 $ 5,556 $ 7,500 $ 2,598 $39,010
------- ---------- ------- ------- -------- ---------- -------
------- ---------- ------- ------- -------- ---------- -------
</TABLE>
Unrealized gains and losses in derivative products at December 31, 1993 and 1992
are summarized as follows:
<TABLE>
<CAPTION>
UNREALIZED GAIN (LOSS) AS OF DECEMBER
31, 1993
---------------------------------------
TOTAL NET
NOTIONAL UNREALIZED UNREALIZED UNREALIZED
$(MILLIONS) AMOUNT GAINS LOSSES GAIN (LOSS)
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
Generic receive fixed............................ $ 6,683 $ 119 $ (8) $ 111
Amortizing receive fixed......................... 15,054 159 (17) 142
Pay fixed........................................ 1,619 (33) (33)
Basis............................................ 5,556 10 (14) (4)
Forward starting................................. 7,500 2 (57) (55)
Other derivative products........................ 2,598 43 (1) 42
------------- --------- --------- -----------
Total............................................ $ 39,010 $ 333 $ (130) $ 203
------------- --------- --------- -----------
------------- --------- --------- -----------
</TABLE>
<TABLE>
<CAPTION>
UNREALIZED GAIN (LOSS) AS OF DECEMBER
31, 1992
---------------------------------------
TOTAL NET
NOTIONAL UNREALIZED UNREALIZED UNREALIZED
$(MILLIONS) AMOUNT GAINS LOSSES GAIN (LOSS)
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------
Generic receive fixed............................ $ 786 $ 35 $ $ 35
Amortizing receive fixed......................... 10,166 201 (3) 198
Pay fixed........................................ 2,429 10 (63) (53)
Forward starting................................. 7,450 69 (5) 64
Other derivative products........................ 2,697 22 (11) 11
------------- --------- --------- -----------
Total............................................ $ 23,528 $ 337 $ (82) $ 255
------------- --------- --------- -----------
------------- --------- --------- -----------
</TABLE>
34
<PAGE> 15
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
NOTE 4: LOANS AND LEASES
The composition of the loan and lease portfolio at December
31, 1993 and 1992 is summarized as follows:
<TABLE>
<CAPTION>
$(THOUSANDS) 1993 1992
<S> <C> <C>
-------------------------------------------------------------------------------------
Commercial, financial and agricultural................ $ 14,000,724 $13,466,539
Real estate:
Commercial.......................................... 4,432,848 4,322,811
Construction........................................ 1,632,137 1,436,983
Residential......................................... 10,705,172 9,689,885
Consumer (net of unearned income of $349,038 and
$321,817 at December 31, 1993 and 1992)............. 15,961,028 12,899,362
Credit card........................................... 6,050,750 5,026,983
Leases (net of unearned income of $327,942 and
$334,166 at December 31, 1993 and 1992)............. 1,062,961 966,885
------------- -----------
Total loans and leases................................ $ 53,845,620 $47,809,448
------------- -----------
------------- -----------
</TABLE>
- --------------------------------------------------------------------------------
NOTE 5: RESERVE FOR LOAN AND LEASE LOSSES
Activity in the reserve for loan and lease losses for 1993,
1992 and 1991 is summarized as follows:
<TABLE>
<CAPTION>
$(THOUSANDS) 1993 1992 1991
<S> <C> <C> <C>
------------------------------------------------------------------------------------------
Balance, beginning of period................. $ 909,896 $ 869,878 $ 674,111
Acquired reserves:
Texas...................................... 122,106
Other...................................... 13,523 6,130 44,844
Allowance applicable to loans transferred
(to) from the Collection pools(1).......... 689 (1,881)
Provision for loan and lease losses.......... 368,507 604,131 586,239
Losses charged to the reserve................ (567,335) (732,402) (682,663)
Recoveries................................... 193,562 161,470 127,122
----------- ---------- ----------
Net losses charged to the reserve............ (373,773) (570,932) (555,541)
----------- ---------- ----------
Balance, end of period....................... $ 918,153 $ 909,896 $ 869,878
----------- ---------- ----------
----------- ---------- ----------
</TABLE>
(1) Through January 31, 1992, eligible loans could be
transferred to the Collection pools, net of the reserve
originally funded by the FDIC. See Note 7 regarding
transfer of loans to Collection pools.
35
<PAGE> 16
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
NOTE 6: BANK PREMISES AND EQUIPMENT
The major categories of banking premises and equipment and
accumulated depreciation at December 31, 1993 and 1992 are
summarized as follows:
<TABLE>
<CAPTION>
$(THOUSANDS) 1993 1992
<S> <C> <C>
-----------------------------------------------------------------------------------
Land.................................................. $ 194,814 $ 189,201
Building.............................................. 904,978 878,568
Equipment............................................. 1,183,735 1,008,410
Leasehold improvements................................ 232,397 224,919
------------ ----------
2,515,924 2,301,098
Less accumulated depreciation and amortization........ 1,128,706 988,054
------------ ----------
Banking premises and equipment, net................... $ 1,387,218 $1,313,044
------------ ----------
------------ ----------
</TABLE>
- --------------------------------------------------------------------------------
NOTE 7: COLLECTION POOLS
The Collection pools were established in accordance with
agreements between BANC ONE and the Federal Deposit Insurance
Corporation (FDIC) to account for and administer specified
assets. Under the terms of the agreements, the banks were
permitted to transfer certain low quality assets to the
Collection pools. The ability to transfer loans and other
assets to the FDIC expired January 31, 1992. Generally, loans
transferred to the Collection pools were recorded at fair
market value. The difference between book value (including
accrued interest and fees) and fair market value was
reimbursed to the banks by the FDIC. A net amount of $7
million was returned to the FDIC in 1992. Reimbursement from
the FDIC for the difference between book value and fair market
value totaled $50 million for 1991.
The FDIC retains all risk of collecting the assets
transferred into the Collection pools. The FDIC receives the
benefit generated from the collection or operation of the pool
assets and reimburses the Bank for the costs of funding the
pool assets, the expense of managing and collecting the pool
assets, and the net amount of charge-offs, write-downs and
recoveries. The net amounts related to these activities
totaled $25 million, $41 million and $101 million reimbursable
by the FDIC for 1993, 1992 and 1991, respectively. The
expenses reimbursed by the FDIC are excluded from BANC ONE's
operating results.
The FDIC is obligated to purchase all assets remaining in
the Collection pools by March 2, 1995. The Bank, at its
option, has the right to require the FDIC to purchase all
assets in the Collection pools prior to the final settlement
dates.
BANC ONE receives fees from the FDIC for managing the
Collection pools ranging from 1% to 5% of net cash
collections. Fees totaling $14 million, $28 million and $59
million for 1993, 1992 and 1991, respectively, were earned.
Based upon achieving certain operating performance levels,
BANC ONE may be eligible for performance bonuses at the end of
the service contracts.
36
<PAGE> 17
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
NOTE 8: DEPOSITS
The major categories of deposits at December 31, 1993 and 1992
are as follows:
<TABLE>
<CAPTION>
$(THOUSANDS) 1993 1992
<S> <C> <C>
-------------------------------------------------------------------------------------
Non-interest bearing.................................. $ 13,674,976 $13,158,961
Interest bearing:
Demand.............................................. 8,756,427 8,429,622
Savings............................................. 7,482,859 6,550,393
Money market accounts............................... 11,230,239 11,856,116
Time................................................ 19,798,680 21,759,513
------------- -----------
Total interest bearing deposits....................... 47,268,205 48,595,644
------------- -----------
Total deposits........................................ $ 60,943,181 $61,754,605
------------- -----------
------------- -----------
</TABLE>
- --------------------------------------------------------------------------------
NOTE 9: SHORT-TERM BORROWINGS
Information pertaining to BANC ONE's short-term borrowings for
1993, 1992 and 1991 is summarized below:
<TABLE>
<CAPTION>
DEMAND
NOTES
PAYABLE
U.S.
FEDERAL TREASURY
COMMERCIAL FUNDS REPURCHASE AND
$(THOUSANDS) PAPER PURCHASED AGREEMENTS OTHER
<S> <C> <C> <C> <C>
-------------------------------------------------------------------------------------
1993:
Ending balance................ $1,114,688 $3,038,064 $3,706,373 $905,488
Highest month-end balance..... 1,366,573 3,038,064 3,706,373 905,488
Average daily balance......... 1,082,887 1,950,532 2,777,069 298,768
Weighted average interest
rate:
As of year-end.............. 3.21% 3.14% 2.84% 2.86%
Paid during year............ 3.48 3.35 2.68 2.87
1992:
Ending balance................ $ 993,065 $1,559,638 $3,071,756 $390,862
Highest month-end balance..... 1,061,782 1,706,981 3,745,169 650,852
Average daily balance......... 843,168 1,469,215 2,504,928 380,165
Weighted average interest
rate:
As of year-end.............. 3.52% 2.96% 2.78% 3.04%
Paid during year............ 4.09 3.96 3.11 3.43
1991:
Ending balance................ $ 671,386 $1,398,581 $2,318,043 $630,851
Highest month-end balance..... 671,386 2,397,830 2,508,144 744,230
Average daily balance......... 392,530 1,857,701 1,991,012 487,159
Weighted average interest
rate:
As of year-end.............. 4.79% 4.21% 4.27% 3.84%
Paid during year............ 6.60 6.12 5.23 5.73
</TABLE>
Federal funds purchased and securities sold under
agreements to repurchase represent primarily overnight
borrowings. The commercial paper of the Corporation and
certain affiliates is supported by multiple lines of credit of
the Corporation, renewable annually with unaffiliated banks.
These facilities total approximately $1.6 billion and carry
annual commitment fees of .19%. In early January 1994, BANC
ONE created a $4 billion bank note facility.
37
<PAGE> 18
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
NOTE 10: LONG-TERM BORROWINGS
Long-term borrowings as of December 31, 1993 and 1992 included
certain restrictions described below and consisted of the
following:
<TABLE>
<CAPTION>
$(THOUSANDS) 1993 1992
<S> <C> <C> <C>
--------------------------------------------------------------------------------------
Parent Company: 7.25% Subordinated Notes............ $ 345,224 $ 344,899
8.74% Subordinated Notes............ 169,851 169,836
10.00% Subordinated Notes........... 197,208 197,136
9.875% Subordinated Notes........... 195,410 195,109
Affiliates: 6.625% Subordinated Notes........... 248,280
6.00% Subordinated Notes............ 147,607
7.375% Subordinated Notes........... 149,083 149,013
Fixed rate Swiss franc bonds........ 50,507 50,532
Revolving Line of Credit............ 20,280 23,280
9.875% Notes........................ 79,500 79,500
11.75% Notes........................ 51,701 51,701
Other............................... 47,011 96,456
------------ ----------
$ 1,701,662 $1,357,462
------------ ----------
------------ ----------
</TABLE>
Certain debt instruments in the above table have been
synthetically altered using receive fixed interest rate swaps.
Accordingly, the effective interest rate paid on these
instruments is considerably lower as indicated in the average
balance sheet on page 56.
During September 1993, an affiliate of the Corporation
sold $150 million of 6.00% Subordinated Notes due 2005. The
notes require interest to be paid semiannually and are not
subject to redemption prior to maturity.
During April 1993, three of the Corporation's affiliates
sold $250 million of 6.625% Subordinated Notes due 2003. The
notes require interest to be paid semiannually and are not
subject to redemption prior to maturity.
In November 1992, an affiliate of the Corporation issued
$150 million of 7.375% Subordinated Notes due November 30,
2002. The notes require interest to be paid semiannually and
are not subject to redemption prior to maturity.
In August 1992, the Corporation issued $350 million of
7.25% Subordinated Notes due August 1, 2002. The Corporation
may issue and offer an additional $350 million from time to
time in one or more series of its unsecured subordinated debt
securities. In September 1991, the Corporation issued $170
million of 8.74% Subordinated Notes due September 15, 2003 and
in August 1990 it issued $200 million of 10.00% Subordinated
Notes due August 15, 2010. During March 1989, the Corporation
issued $200 million of 9.875% Subordinated Notes due March 1,
2009. The notes require interest to be paid semiannually and
are not subject to redemption prior to maturity. The note
agreements impose limitations on the creation of liens on
voting stock of bank affiliates, as well as place restrictions
on certain dispositions of principal bank affiliates.
In April 1991, an affiliate entered into an unsecured
revolving credit agreement providing up to $40 million until
May 15, 1993, at which time it was renewed for an additional
two year period. Interest is payable quarterly at fluctuating
rates based on, at the Corporation's option, the agent bank's
prime minus .5%, the Fed funds rate plus .8% or the London
interbank offered rate plus 1.25% with daily, and at least
quarterly repricing. At December 31, 1993, the rate on the
revolving credit agreement was 4.30%.
In March 1986, an affiliate of the Corporation entered
into 9.875% notes, maturing March 1, 2016, that are subject to
early redemption at the option of the affiliate beginning in
1996. Commencing in 2002, mandatory annual payments in the
amount of $4,000,000 are required to be made to a sinking fund
established for repayment of these notes.
In 1985, an affiliate of the Corporation issued 110
million Swiss franc bonds (U.S. $51 million) that mature in
1995. The fixed coupon rate of 5.50%, paid annually, has an
effective rate of 11.52% because, concurrent with the
issuance, the affiliate entered into a Swiss franc/U.S. dollar
currency swap to hedge the Swiss franc liability and
effectively convert the issue to U.S. dollar financing. The
affiliate may redeem all, but not part, of the outstanding
bonds at par. The bond issuance agreement is guaranteed by the
Corporation.
38
<PAGE> 19
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
In April 1985, an affiliate of the Corporation entered
into 11.75% notes maturing April 15, 1995.
The aggregate minimum annual retirements of long-term
borrowings for the years 1994 through 1998 are as follows:
<TABLE>
<CAPTION>
PARENT
$(THOUSANDS) AFFILIATES COMPANY
<S> <C> <C>
------------------------------------------------------------------------
1994......................................... $ 7,632
1995......................................... 134,709
1996......................................... 2,797
1997......................................... 8,812
1998......................................... 792
Thereafter................................... 639,227 $907,693
------------ --------
$793,969 $907,693
------------ --------
------------ --------
</TABLE>
- --------------------------------------------------------------------------------
NOTE 11: STOCK OFFERINGS, STOCK DIVIDENDS AND CONVERTIBLE
PREFERRED
On July 20, 1993, the Corporation declared a
five-shares-for-four-shares common stock split, effective
August 31, 1993. On January 25, 1994 and January 22, 1992, the
Corporation declared 10% common stock dividends effective
February 10, 1994 and February 14, 1992. Accordingly, all
common share data below includes the effect of the stock split
and stock dividends.
On April 21, 1993, the Corporation called all of the
outstanding shares of the Class B preferred stock for
redemption. All but a minor amount of Class B preferred shares
were converted to common stock.
In November 1991, the Corporation issued 13.0 million
shares of common stock. 1.5 million of the shares related to
the acquisition of four Ohio banks from Central Trust
Corporation (CT), an affiliate of PNC Financial Corporation.
The $319 million net proceeds from the 11.5 million shares
were used for investments in and advances to affiliate banks
and non-bank subsidiaries and the retirement of commercial
paper.
On April 11, 1991, the Corporation issued 5 million
shares of Series C cumulative convertible preferred stock. The
$245 million net proceeds were used for acquisitions and
investments in and extensions of credit to the Corporation's
affiliates. At December 31, 1993, the Corporation's Series C
cumulative convertible preferred stock outstanding was
4,998,000 shares. Each of the Series C preferred shares can be
converted into 1.75362 shares of the Corporation's common
stock. Cumulative quarterly dividends are paid on the Series C
preferred shares at an annual rate of $3.50 per share. The
Series C preferred shares are redeemable beginning April 15,
1995 at an initial call price of $52.10 per share, declining
to $50.00 per share in 2001.
- --------------------------------------------------------------------------------
NOTE 12: DIVIDEND AND CAPITAL RESTRICTIONS (ALSO SEE NOTE
10)
Payment of dividends by the bank affiliates and certain other
non-bank affiliates is subject to various national and/or
state regulatory restrictions. The amount of dividends
available from the non-bank affiliates which are subject to
dividend restrictions is regulated by the governing agency to
which they report.
At December 31, 1993, total stockholders' equity of the
banking affiliates approximated $6.7 billion, of which $1.2
billion was available for payment of dividends without
approval by the applicable regulatory authority.
BANC ONE is required to maintain minimum amounts of
capital to total "risk weighted" assets, as defined by bank
regulations. BANC ONE is required to have minimum Tier 1 and
total capital ratios of 4.00% and 8.00%, respectively. BANC
ONE's actual ratios at December 31, 1993 were 10.51% and
14.19%, respectively. BANC ONE's leverage ratio at December
31, 1993 was 8.66%.
39
<PAGE> 20
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
NOTE 13: INCOME TAXES
The Corporation and its affiliates file a consolidated federal
income tax return and income tax expense is apportioned among
all companies based upon their taxable income or loss and tax
credits.
The effective income tax rate is below the statutory rate
due to the following:
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
-----------------------------------------------------------------------------------------
Statutory tax rate........................................... 35.0% 34.0% 34.0%
Increase (reduction) in tax rate resulting from:
State income taxes, net of federal income tax benefit...... 2.4 1.4 2.1
Tax exempt interest........................................ (3.4) (4.9) (8.8)
Equity income from Texas................................... (2.2)
Other, net................................................. 1.1 (.6)
----- ---- -----
Actual tax rate.............................................. 34.0% 31.6% 24.5%
----- ---- -----
----- ---- -----
</TABLE>
BANC ONE adopted Statement of Financial Accounting
Standards No. 109, "Accounting for Income Taxes," effective
January 1, 1993. The statement requires the use of the asset
and liability approach for the financial accounting and
reporting for income taxes. As permitted under the new rule,
prior years' financial statements have not been restated. The
cumulative effect of this adoption was an increase in net
income of $19.4 million ($.05 per share).
Components of the provision for income taxes follow:
<TABLE>
<CAPTION>
$(THOUSANDS) 1993 1992 1991
<S> <C> <C> <C>
-------------------------------------------------------------------------------------------------
Total deferred federal tax............................. $ 16,299 $ (13,893) $ (16,515)
Federal amount currently payable....................... 499,344 390,849 204,156
Total deferred state tax............................... 6,919 1,851 3,662
State amount currently payable......................... 55,968 25,827 24,184
---------- --------- ---------
Total provision for income taxes....................... $ 578,530 $ 404,634 $ 215,487
---------- --------- ---------
---------- --------- ---------
</TABLE>
Deferred tax assets and liabilities as of December 31,
1993 consisted of the following:
<TABLE>
<S> <C>
Deferred tax assets:
Loan loss reserve......................................... $ 345,568
Accrued liabilities....................................... 71,148
Other..................................................... 48,174
----------
464,890
----------
Deferred tax liabilities:
Leased assets and depreciation............................ (377,461)
Other..................................................... (59,870)
----------
(437,331)
----------
Net deferred tax asset...................................... $ 27,559
----------
----------
</TABLE>
Deferred income taxes are determined separately for each
separate taxable entity of the Corporation in each tax
jurisdiction. For each separate tax paying component, all
deferred tax assets and liabilities are netted and presented
in a single amount, which is included in other assets or other
liabilities on the balance sheet, as follows:
<TABLE>
<S> <C>
Other assets:
Federal deferred tax assets............................... $ 41,550
State deferred tax assets................................. 11,330
----------
52,880
----------
Other liabilities:
Federal deferred tax liabilities.......................... (5,448)
State deferred tax liabilities............................ (19,873)
----------
(25,321)
----------
Net deferred tax asset...................................... $ 27,559
----------
----------
</TABLE>
- --------------------------------------------------------------------------------
NOTE 14: FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK
In the normal course of business, BANC ONE is a party to
financial instruments with off-balance sheet risk to meet the
financing needs of its customers and to reduce its own
exposure to fluctuations in interest rates. These off-balance
sheet instruments include commitments to extend credit,
letters of credit, bond purchase agreements, caps and floors
on interest rates, futures contracts, options, forward rate
agreements, and interest rate swaps, both of an amortizing and
non-amortizing nature. These instruments involve, to varying
degrees, elements of credit and interest rate risk in excess
of the amount recognized in the balance sheet.
40
<PAGE> 21
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
The contract or notional amounts of these off-balance sheet
financial instruments reflect the extent of involvement BANC
ONE has in the particular classes of these instruments.
<TABLE>
<CAPTION>
CONTRACT OR
NOTIONAL AMOUNT
-------------------
$(MILLIONS) 1993 1992
<S> <C> <C>
----------------------------------------------------------------------------------
Financial instruments whose contract amounts represent credit
risk:
Commitments to extend credit............................... $38,785 $34,750
Standby letters of credit.................................. 2,598 2,860
Commercial and other letters of credit..................... 224 198
Financial instruments whose notional or contract amounts
exceed the amount of credit risk:
Futures contracts.......................................... $ 212 $ 1,246
Interest rate swap agreements.............................. 36,412 21,031
Currency swap agreements................................... 80 80
Collars.................................................... 125 139
Caps....................................................... 181 24
Floors..................................................... 1,500 1,000
Options.................................................... 500 8
</TABLE>
Commitments to extend credit are agreements to lend to a
customer provided there is no violation of any condition
established in the contract. Commitments generally have fixed
expiration dates or other termination clauses and may require
payment of a fee. Since many of the commitments are expected
to or typically expire without being drawn upon, the total
commitment amount does not necessarily represent future cash
requirements. At December 31, 1993, BANC ONE had $38.8 billion
of loan commitments outstanding, including approximately $23.5
billion of credit card commitments and $6.8 billion of other
loan commitments expiring within one year. The same amounts
for 1992 were $34.8 billion, $22.0 billion and $7.5 billion,
respectively. The exposure to credit loss in the event of
nonperformance by the other party to these commitments is
represented by the contractual amount. Loan commitments,
including credit cards, are subject to market risk resulting
from fluctuations in interest rates. BANC ONE applies the same
credit policies in making commitments as it does for
on-balance sheet instruments, mainly by evaluating each
customer's creditworthiness on a case by case basis. The
amount of collateral obtained, if deemed necessary by BANC ONE
upon extension of credit, is based on management's credit
evaluation of the borrower. The collateral held varies, but
may include accounts receivable, inventories, investments,
property, plant and equipment and income-producing commercial
properties.
Letters of credit are conditional commitments issued by
BANC ONE guaranteeing payment on drafts drawn in accordance
with the terms of the documents. Commercial letters of credit
are used to facilitate trade or commerce with the drafts being
drawn when the underlying transaction is consummated. Standby
letters of credit guarantee the performance of a customer to a
third party. These guarantees are primarily issued to support
public and private borrowing arrangements, including
commercial paper, bond financing and similar transactions. The
credit risk involved in issuing letters of credit is
essentially the same as that involved in extending loan
commitments to customers. BANC ONE uses the same credit
policies in making these conditional obligations as it does
for on-balance sheet instruments. Collateral held for those
commitments where deemed necessary varies, but may include
accounts receivable, inventories, investments and real estate.
Except for short-term guarantees that expire within one year,
most guarantees extend for more than five years and expire in
decreasing amounts through the year 2023.
Interest rate swap agreements generally involve the
exchange of fixed and floating rate interest payments without
the exchange of the underlying notional amount on which the
interest payments are calculated. BANC ONE has entered into
interest rate swap agreements that hedge or synthetically
alter assets and liabilities to manage the impact of
fluctuating interest rates on earnings and market value. The
credit risk associated with interest rate swap agreements
revolves around the ability of the counterparty to perform its
payment obligation under the agreement. BANC ONE establishes
limits and typically demands collateral from the counterparty
to further minimize its credit risk. See Note 3 to the
financial statements for further discussion of financial
instruments whose contract or notional amounts exceed credit
risk.
41
<PAGE> 22
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
BANC ONE has entered into several securitizations of
loans. The risk associated with these transactions is limited
to the on-balance sheet spread account (approximately $65
million). The remaining market and credit risk is transferred
to the purchaser and the credit enhancer.
Concentrations of Credit Risk
A substantial portion of the mortgage-backed securities held
by BANC ONE are FNMA, FHLMC and GNMA pass-through securities
which are directly or inherently backed by the full faith and
credit of the United States government.
At December 31, 1993 and 1992, respectively, BANC ONE had
$3.1 billion and $3 billion of loans to real estate operators,
managers and developers which represented 15.36% and 15.51% of
commercial, financial and agricultural, commercial real estate
and construction loans. There were no other significant
concentrations.
BANC ONE's real estate loans and loan commitments are
primarily for properties located throughout the Midwest and
Southwest. Repayment of these loans is dependent in part upon
the economic conditions in those regions. BANC ONE evaluates
each customer's creditworthiness on a case by case basis. BANC
ONE requires collateral on all real estate loans which consist
primarily of residential and income-producing properties.
BANC ONE's credit card loans, installment loans and
related loan commitments are located throughout the United
States. Repayment of these loans is dependent in part upon the
economic conditions in each area. BANC ONE has approximately
14.7 million credit card accounts with an average outstanding
balance of $412 and an average unfunded commitment of $1,600
per account. BANC ONE does not require collateral on credit
card loans, due to the low average balance of each loan. The
average balance per loan of the consumer loan portfolio is
$8,888. Collateral typically required includes automobiles and
other equipment.
- --------------------------------------------------------------------------------
NOTE 15: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL
INSTRUMENTS
Provided below is the information required by Statement of
Financial Accounting Standards No. 107, Disclosures about Fair
Value of Financial Instruments (SFAS 107). These amounts
represent estimates of fair values at a point in time.
Significant estimates regarding economic conditions, loss
experience, risk characteristics associated with particular
financial instruments and other factors were used for the
purposes of this disclosure. These estimates are subjective in
nature and involve matters of judgment. Therefore, they cannot
be determined with precision. Changes in the assumptions could
have a material impact on the amounts estimated.
While the estimated fair value amounts are designed to
represent estimates of the amounts at which these instruments
could be exchanged in a current transaction between willing
parties, many of BANC ONE's financial instruments lack an
available trading market as characterized by willing parties
engaging in an exchange transaction. In addition, it is BANC
ONE's intent to hold most of its financial instruments to
maturity and therefore it is not probable that the fair values
shown will be realized in a current transaction.
The estimated fair values disclosed do not reflect the
value of assets and liabilities that are not considered
financial instruments. In addition, the value of long-term
relationships with depositors (core deposit intangibles) and
other customers (credit card intangibles) are not reflected.
The value of these items is significant.
Because of the wide range of valuation techniques and the
numerous estimates which must be made, it may be difficult to
make reasonable comparisons of BANC ONE's fair value
information to that of other financial institutions. It is
important that the many uncertainties discussed above be
considered when using the estimated fair value disclosures and
to realize that because of these uncertainties, the aggregate
fair value amount should in no way be construed as
representative of the underlying value of BANC ONE.
CASH AND DUE FROM BANKS AND SHORT-TERM INVESTMENTS. Cash
and short-term instruments are by definition short-term and do
not present any unanticipated credit issues. Therefore, the
carrying amount is a reasonable estimate of fair value.
SECURITIES. The estimated fair values of securities are
provided in Note 3 to the financial statements. These are
based on quoted market prices, when available. If a quoted
market price is not available, fair value is estimated using
quoted market prices for similar securities.
42
<PAGE> 23
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
LOANS. The carrying amount (total outstandings excluding
equipment leases, other leases classified as consumer loans,
unearned income and reserve for loan losses) and estimated
fair value of loans outstanding at December 31, 1993 are $50.4
billion and $51.7 billion, respectively, and $45.1 billion and
$46.3 billion, respectively, at December 31, 1992. In order to
determine the fair values for loans, the loan portfolio was
segmented based on loan type, credit quality and repricing
characteristics. For certain variable rate loans with no
significant credit concerns and frequent repricings, estimated
fair values are based on the carrying values. The fair values
of other loans are estimated using discounted cash flow
analyses. The discount rates used in these analyses are
generally based on origination rates for similar loans of
comparable credit quality. However, where appropriate,
adjustments have been made so as to more accurately reflect
market rates. Maturity estimates are based on historical
experience with prepayments and current economic and lending
conditions. The estimated fair value of credit card
receivables is based on the present value of cash flows
arising from receivables outstanding and does not include the
value associated with the relationships BANC ONE has with its
credit card customers. It therefore reflects neither the value
associated with new receivables created by customers nor the
value associated with the fee income from credit card
relationships. These values are significant.
COLLECTION POOLS. The carrying amount of the Collection
pools is a reasonable estimate of the fair value.
SHORT-TERM BORROWINGS. Short-term borrowings reprice
frequently and, therefore, the carrying amount is a reasonable
estimate of fair value.
LONG-TERM BORROWINGS. The carrying amount and estimated
fair value of the long-term borrowings outstanding at December
31, 1993 are $1.7 billion and $1.9 billion, respectively, and
$1.4 billion and $1.5 billion, respectively, at December 31,
1992. For publicly traded debt, estimated fair values are
based on quoted market prices. Where such prices are not
available, fair value is estimated using quoted market prices
for similar instruments.
DEPOSITS. The carrying amount and estimated fair value of
deposits outstanding at December 31, 1993 are $60.9 billion
and $61.0 billion, respectively, and $61.8 billion and $62.0
billion, respectively, at December 31, 1992. Under SFAS 107,
the fair value of deposits with no stated maturity is equal to
the amount payable on demand. Therefore, the fair value
estimates for these products do not reflect the benefits that
BANC ONE receives from the low-cost, long-term funding they
provide. These benefits are significant. The estimated fair
values of fixed rate time deposits are based on discounted
cash flow analyses. The discount rates used in these analyses
are based on market rates currently offered for deposits of
similar remaining maturities. Because of the repricing
characteristics and the competitive nature of BANC ONE's rates
offered on variable rate time deposits, the carrying amount is
a reasonable estimate of the fair value.
DERIVATIVES. The estimated fair values of derivatives
hedging or altering assets and liabilities are shown in Note 3
and are not reflected in the fair value of related balance
sheet items as discussed in this note. Carrying amounts for
derivatives, which represent accrued or deferred income and
fees arising from these financial instruments, are immaterial.
Where such prices do not exist, these values are based on
dealer quotes and generally represent an estimate of the
amount that BANC ONE would receive or pay to terminate the
agreement at the reporting date, taking into account current
interest rates and the current creditworthiness of the
counterparties. Where possible, these estimated fair values
are based on quoted market prices.
COMMITMENTS TO EXTEND CREDIT, STANDBY LETTERS OF CREDIT
AND LETTERS OF CREDIT. Pricing of these financial instruments
is based on the credit quality and relationship, fees,
interest rates, probability of funding and compensating
balance and other covenants or requirements. Loan commitments
generally have fixed expiration dates, are variable rate and
contain termination and other clauses which provide for relief
from funding in the event that there is a significant
deterioration in the credit quality of the customer. Many loan
commitments are expected to, and typically do, expire without
being drawn upon. Approximately 78% of BANC ONE's commitments
to lend expire within one year, of these 78% relate to
commitments to lend on credit cards. The rates and terms of
BANC ONE's commitments to lend, standby letters of credit and
letters of credit are competitive with others in the various
markets in which BANC ONE operates. The carrying amounts are
reasonable estimates of the fair value of these financial
instruments. Carrying amounts which are comprised of the
unamortized fee income and, where necessary, reserves for any
expected credit losses from these financial instruments, are
immaterial.
43
<PAGE> 24
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
NOTE 16: LEASES
BANC ONE utilizes certain bank premises and equipment under
long-term leases expiring at various dates. In certain cases,
these leases contain renewal options and generally provide
that BANC ONE will pay for insurance, taxes and maintenance.
As of December 31, 1993, the future minimum rental
payments required under noncancelable operating leases with
initial terms in excess of one year are as follows:
<TABLE>
<CAPTION>
OPERATING
$(THOUSANDS) LEASES
<S> <C>
------------------------------------------------------------------------------------
Year ending December 31
1994................................................................... $ 94,884
1995................................................................... 86,795
1996................................................................... 70,506
1997................................................................... 60,165
1998................................................................... 52,229
Later years.............................................................. 412,286
---------
Total minimum lease payments............................................. $776,865
---------
---------
</TABLE>
Rental expense under operating leases approximated $143
million in 1993, $123 million in 1992 and $113 million in
1991.
- --------------------------------------------------------------------------------
NOTE 17: PLEDGED SECURITIES AND CONTINGENT LIABILITIES
As of December 31, 1993, investment securities having a book
value of $6.1 billion were pledged as collateral for
repurchase agreements sold, and as collateral for governmental
and trust deposits in accordance with federal and state
requirements.
The Corporation's bank affiliates are required to maintain
average balances with the Federal Reserve Bank. The average
required reserve balances were $1,008 million and $980 million
for 1993 and 1992, respectively.
In October 1993, a purported class-action lawsuit was
filed against Bank One, Columbus, NA (Columbus), H & R Block,
Inc. and other financial institutions in the United States
District Court for the Northern District of Alabama, Western
Division. This lawsuit, among other things, alleges that
Columbus assessed usurious and unconscionable interest rates
in connection with its income tax refund anticipation loan
program. This lawsuit is brought on behalf of a purported
class of individuals who, during the past six years, had their
taxes prepared by H & R Block, Inc., and received refund
anticipation loans from Columbus or the other unrelated
co-defendant financial institutions. This lawsuit seeks
various forms of relief including injunctive relief,
unspecified compensatory and punitive damages and attorneys'
fees. Columbus has denied any liability. Management believes
that an adverse decision in this case would not be material to
BANC ONE's consolidated financial position.
The dismissal of a purported class action lawsuit against
Columbus by the Court of Common Pleas of Philadelphia County,
Pennsylvania is on appeal to the Pennsylvania Superior Court.
This case was one of many class action lawsuits brought
against credit card issuing banks challenging whether such
banks can impose various types of fees allowed by the state
where they are located on cardholders residing in other states
that allegedly limit or prohibit such fees. Even if this
lawsuit were ultimately decided adversely to Columbus,
management believes that such determination would not be
material to BANC ONE's consolidated financial position. There
can be no assurance that bank affiliates of BANC ONE will not
be named as defendants in future similar lawsuits.
44
<PAGE> 25
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
Substantial damages have been awarded by courts against
BANC ONE subsidiaries in two other unrelated cases. In October
1993, the Federal District Court for the Southern District of
New York entered a judgment for approximately $27 million
against Bank One, Arizona, NA (formerly Valley National Bank)
based upon alleged violations by Valley National Bank of the
Employee Retirement Income Security Act of 1974. BANC ONE was
aware of this case prior to its acquisition of Valley National
Bank. In November 1993, the Probate Court of Dallas County,
Texas entered a judgment of approximately $26 million against
Bank One, Texas, NA (Texas) based on an alleged breach of
fiduciary duties associated with the handling of a personal
trust. These judgments, which are being appealed, even if
upheld will not have a material adverse effect on BANC ONE's
consolidated financial position.
The Corporation and certain of its affiliates have been
named as defendants in various other legal proceedings.
Management believes that liabilities arising from these
proceedings, if any, will not have a material adverse effect
on the consolidated financial position of BANC ONE.
- --------------------------------------------------------------------------------
NOTE 18: EMPLOYEE BENEFIT PLANS
BANC ONE has various non-contributory pension plans covering
substantially all employees. The retirement benefits are based
on length of service and the employee's highest five years of
compensation during the last 10 years of service. BANC ONE's
funding policy is to contribute amounts necessary to meet the
minimum funding requirements set forth in the Employee
Retirement Income Security Act of 1974.
The following table sets forth the plans' funded status.
Accrued pension cost at December 31, 1993 and 1992 includes
$10.0 million and $7.1 million, respectively, for BANC ONE's
non-qualified, unfunded supplemental pension plans.
<TABLE>
<CAPTION>
$(THOUSANDS) 1993 1992
<S> <C> <C>
-------------------------------------------------------------------------------------
Accumulated benefit obligation, including vested benefits of
$400,585 in 1993 and $291,319 in 1992...................... $ 433,857 $311,282
--------- --------
--------- --------
Projected benefit obligation for service rendered to date.... 617,733 453,312
Plan assets at fair value.................................... 465,991 418,119
--------- --------
Projected benefit obligation in excess of plan assets........ (151,742) (35,193)
Unrecognized net loss (gain) from past experience different
from that assumed and effects of changes in assumptions.... 64,883 (40,908)
Unrecognized prior service cost.............................. 9,584 10,319
Unrecognized net asset at January 1, 1987, being amortized
over periods of 10 to 19 years............................. (16,514) (17,698)
--------- --------
Accrued pension cost......................................... $ (93,789) $(83,480)
--------- --------
--------- --------
</TABLE>
The plan assets consist of primarily listed stock, U.S.
Treasury securities and mutual funds. Listed stocks include
863,459 shares of the Corporation's common stock, as adjusted
for the five-for-four-stock split effective August 31, 1993
and the 10% stock dividend effective February 10, 1994. The
fair value of the Corporation's stock was $30.8 million at
December 31, 1993. No purchases of the Corporation's common
stock have been made and 726,393 shares have been sold during
1993. The Corporation's shares were sold primarily to comply
with generally accepted fiduciary responsibilities that allow
no more than a certain level of employer securities in
comparison to other investments. Dividends received in 1993 on
the Corporation's common stock totaled $1.5 million.
45
<PAGE> 26
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
Net periodic pension cost for BANC ONE for 1993, 1992 and
1991 included the following components (1991 expense includes
$1.6 million for Texas prior to October 1, 1991, which is not
included in BANC ONE's Consolidated Statement of Income):
<TABLE>
<CAPTION>
$(THOUSANDS) 1993 1992 1991
<S> <C> <C> <C>
---------------------------------------------------------------
Service cost -- benefits
earned during the
period................. $ 42,008 $ 33,943 $ 29,801
Interest cost on
projected benefit
obligation............. 39,355 32,696 28,786
Actual return on plan
assets................. (28,955) (30,443) (83,940)
Net amortization and
deferral............... (13,024) (8,712) 52,571
-------------- -------------- --------------
Net periodic pension
cost................... $ 39,384 $ 27,484 $ 27,218
-------------- -------------- --------------
-------------- -------------- --------------
Actuarial assumptions:
Weighted average
discount rate for
projected benefit
obligation.......... 7.00% TO 7.50% 8.00% to 8.75% 8.00% to 8.75%
Weighted average rate
of compensation
increase............ 5.00% TO 6.00% 5.00% to 7.00% 6.00% to 7.00%
Expected long-term rate
of return on plan
assets.............. 7.00% TO 9.75% 8.00% to 9.75% 8.50% to 9.75%
</TABLE>
Postretirement Benefits Other Than Pension
BANC ONE currently sponsors a defined benefit postretirement
plan that covers salaried employees. The plan provides
medical, dental and life insurance benefits. Benefits are
available to retired employees with more than 10 years of
service who retire under the normal or early retirement
provisions of the BANC ONE Retirement Plan. The medical and
dental benefits are contributory, while the life insurance is
non-contributory.
On January 1, 1993, BANC ONE adopted Statement of
Financial Accounting Standards No. 106, "Employers' Accounting
for Postretirement Benefits other than Pensions." The Standard
requires, among other things, that employers use the accrual
method of accounting for the cost of providing such benefits.
Previously, BANC ONE accounted for such benefits on a cash
basis. BANC ONE has elected to amortize the transition
obligation of $113.6 million over a 20-year period.
Accordingly, there was no cumulative effect of adopting this
standard. BANC ONE prefunds retiree medical benefits to the
extent such benefits are deductible for federal income tax
purposes; however, these assets are not restricted as to use
for such benefits and therefore do not meet the definition of
plan assets.
46
<PAGE> 27
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
The following table sets forth the status of BANC ONE's
postretirement benefit obligation.
<TABLE>
<CAPTION>
$(THOUSANDS) 1993
----------------------------------------------------------------------------------
<S> <C>
Accumulated postretirement benefit obligation:
Retirees.............................................................. $ 57,765
Fully eligible active plan participants............................... 28,088
Other active plan participants........................................ 32,882
--------
Accumulated postretirement benefit obligation in excess of plan
assets................................................................ 118,735
Unrecognized net gain................................................... 10,924
Unrecognized transition obligation...................................... (107,938)
--------
Accrued postretirement benefit cost..................................... $ 21,721
--------
--------
</TABLE>
Net periodic cost for postretirement health care and life
insurance benefits during 1993 includes the following:
<TABLE>
<CAPTION>
$(THOUSANDS) 1993
---------------------------------------------------------------------------------
<S> <C>
Service cost -- benefits earned during the period....................... $ 3,840
Interest cost on accumulated postretirement benefit obligation.......... 9,582
Amortization of unrecognized transition obligation...................... 5,670
-------
Net periodic postretirement benefit cost................................ $19,092
-------
-------
</TABLE>
Postretirement benefit expense was $7.3 million and $4.9
million in 1992 and 1991, respectively.
The weighted average discount rate used in determining
the accumulated postretirement benefit obligation at December
31, 1993 was 7.5%.
For measurement purposes, an 11% annual rate of increase
in the cost of covered health care benefits was assumed for
1994; the rate was assumed to decrease gradually to 5.0% in
the year 2000 and thereafter. A one-percentage point increase
in the health care cost trend rate in each year would increase
the accumulated postretirement benefit obligation as of
December 31, 1993 by $13.7 million, or 11.5%, and would
increase the aggregate of the service cost and interest cost
components of net periodic postretirement benefit cost for
1993 by $1.3 million, or 9.7%.
BANC ONE sponsors various 401(K) plans which include
substantially all of its employees. BANC ONE is required to
make contributions to the plans in varying amounts. For 1993,
1992 and 1991, the expense related to these plans was $30.5
million, $27.6 million and $15.9 million, respectively.
47
<PAGE> 28
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
NOTE 19: STOCK OPTIONS
On April 18, 1989, the Corporation adopted the 1989 Stock
Incentive Plan (which is in addition to a stock option plan
approved by its shareholders on April 24, 1984, and amended
December 16, 1986), which provides incentive and non-qualified
options and stock awards to certain key employees. The options
are not exercisable for at least one year from the date of
grant and are thereafter exercisable for such periods as the
Board of Directors, or a committee thereof, specify (which may
not exceed 10 years for incentive stock options or 20 years
for non-qualified stock options), provided that the optionee
has remained in the employment of the Corporation or its
affiliates. The Board or the committee may accelerate the
exercise period for an option upon the optionee's disability,
retirement or death. All options expire at the end of the
exercise period. BANC ONE makes no recognition in the balance
sheet of the options until such options are exercised and no
amounts applicable thereto are reflected in net income. All
options were granted at 100% of fair market value.
All options reflect the effect of the
five-shares-for-four-shares stock split effective August 31,
1993 and the 10% common stock dividend effective February 10,
1994.
Options of acquired entities are converted to BANC ONE
options at the time of acquisition. These shares are included
in the amounts shown below.
Outstanding stock options are considered common stock
equivalents in the computation of earnings per share.
Activity in the plans for 1993 and 1992 is summarized as
follows:
<TABLE>
<CAPTION>
1993
------------------------ 1992
NUMBER OF NUMBER OF
SHARES OPTION PRICE SHARES OPTION PRICE
--------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Outstanding at beginning of year...... 4,461,352 $ 3.03-32.82 8,456,602 $ 2.04-36.82
Granted............................. 880,612 36.36-41.82 676,217 17.12-32.82
Exercised........................... (751,254) 3.03-24.95 (4,350,456) 2.04-27.55
Cancelled........................... (184,855) 9.39-40.45 (321,011) 3.74-36.82
--------- ----------
Outstanding at end of year............ 4,405,855 4.48-41.82 4,461,352 3.03-32.82
--------- ----------
--------- ----------
Exercisable at end of year............ 977,283 4.48-40.45 1,472,397 3.03-25.62
--------- ----------
--------- ----------
Available for future grant under the
1989 Stock Incentive Plan........... 622,769 1,583,531
--------- ----------
--------- ----------
</TABLE>
- --------------------------------------------------------------------------------
NOTE 20: RELATED PARTY TRANSACTIONS
Certain BANC ONE executive officers, directors and their
related interests are loan customers of the Corporation's
banking affiliates. The Securities and Exchange Commission has
determined with respect to the Corporation and five
significant subsidiaries (as defined by the SEC) that
disclosure of borrowings by directors and executive officers
and certain of their related interests should be made, if the
loans are greater than 5% of stockholders' equity, in the
aggregate. No disclosure was required at December 31, 1993 or
1992.
As discussed in Note 2, Texas became a wholly owned
affiliate of BANC ONE on October 28, 1991. The related party
disclosures below relate to the period of time prior to that
date.
BANC ONE received management fee income of $12 million
during the nine months ended September 30, 1991, from Texas.
BANC ONE also received $25 million in income for servicing
certain loans for Texas during this same time period.
During 1991, an affiliate had $116 million of net expenses
reimbursed by the FDIC through a Collection pool. An affiliate
also paid $7 million in expenses to Texas during 1991. The
FDIC reimbursement and its related expenses are shown net in
BANC ONE's consolidated income statement.
48
<PAGE> 29
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
NOTE 21: PARENT COMPANY FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
DECEMBER 31,
BALANCE SHEET ---------------------------
$(THOUSANDS) 1993 1992
<S> <C> <C>
---------------------------------------------------------------------------------------------
ASSETS:
Cash and due from banks...................................... $ 1,001 $ 739
Short-term investments....................................... 299,207 553,083
Investment in majority owned affiliates:
Banking.................................................... 6,570,901 5,784,531
Non-banking................................................ 242,625 247,716
Advances due from affiliates:
Banking.................................................... 203,000 216,250
Non-banking................................................ 559,255 394,955
Amounts due from unaffiliated entities....................... 65,000 65,000
Securities................................................... 47,113 31,167
Securities held for sale..................................... 20,000
Excess of cost over net assets of affiliates purchased (net
of accumulated amortization of $22,839 and $20,582)........ 35,468 33,534
Other assets................................................. 141,910 127,059
------------ ----------
TOTAL ASSETS............................................... $ 8,185,480 $7,454,034
------------ ----------
------------ ----------
LIABILITIES:
Commercial paper............................................. $ 98,805 $ 199,000
Notes payable to affiliates:
Banking.................................................... 17,500
Non-banking................................................ 31,825 20,945
Long-term debt............................................... 907,693 906,980
Other liabilities............................................ 113,519 68,023
------------ ----------
TOTAL LIABILITIES.......................................... 1,151,842 1,212,448
------------ ----------
Commitments and contingencies
TOTAL STOCKHOLDERS' EQUITY................................. 7,033,638 6,241,586
------------ ----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY................. $ 8,185,480 $7,454,034
------------ ----------
------------ ----------
</TABLE>
49
<PAGE> 30
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
STATEMENT OF INCOME
for the three years ended December 31,
$(THOUSANDS, EXCEPT PER SHARE AMOUNTS) 1993 1992 1991
<S> <C> <C> <C>
--------------------------------------------------------------------------------------------------
INCOME:
Dividends from affiliates:
Banking............................................ $ 662,868 $ 483,655 $ 213,000
Non-banking........................................ 15,000 10,866 217
Management and other fees from affiliates............ 99,783 58,019 49,312
Interest income...................................... 46,297 67,907 59,211
Equity in earnings of Bank One, Texas, NA, net of
income tax......................................... 57,012
Other income......................................... 11,425 6,184 1,471
Securities gains (losses)............................ 152 (227) (478)
------------ --------- ---------
TOTAL INCOME....................................... 835,525 626,404 379,745
------------ --------- ---------
EXPENSE:
Interest............................................. 62,853 73,545 62,818
Salaries and benefits................................ 53,762 31,873 28,425
Other................................................ 94,755 83,171 60,424
------------ --------- ---------
TOTAL EXPENSE...................................... 211,370 188,589 151,667
------------ --------- ---------
Income before income taxes and equity in undistributed
earnings of consolidated affiliates.................. 624,155 437,815 228,078
Income tax (expense) benefit:
Income excluding securities transactions........... 15,712 21,011 18,526
Securities transactions............................ (53) 77 163
------------ --------- ---------
Income before equity in undistributed earnings of
consolidated affiliates.............................. 639,814 458,903 246,767
Equity in undistributed earnings of consolidated
affiliates........................................... 500,166 417,685 417,521
------------ --------- ---------
NET INCOME......................................... $ 1,139,980 $ 876,588 $ 664,288
------------ --------- ---------
------------ --------- ---------
NET INCOME PER COMMON SHARE (AMOUNTS REFLECT THE 10%
COMMON STOCK DIVIDEND EFFECTIVE FEBRUARY 10, 1994 AND
THE FIVE-SHARES-FOR-FOUR-SHARES STOCK SPLIT EFFECTIVE
AUGUST 31, 1993)
INCOME BEFORE CUMULATIVE EFFECT OF CHANGE IN
ACCOUNTING PRINCIPLE............................... $ 2.93 $ 2.29 $ 1.82
Cumulative effect of change in method of accounting
for income taxes................................. .05
------------ --------- ---------
NET INCOME PER COMMON SHARE............................ $ 2.98 $ 2.29 $ 1.82
------------ --------- ---------
------------ --------- ---------
Weighted average common shares outstanding (000)....... 376,828 373,699 356,102
------------ --------- ---------
------------ --------- ---------
</TABLE>
50
<PAGE> 31
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
STATEMENT OF CASH FLOWS
for the three years ended December 31,
<TABLE>
<CAPTION>
$(THOUSANDS) 1993 1992 1991
<S> <C> <C> <C>
------------------------------------------------------------------------------------------------
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES:
NET INCOME......................................... $ 1,139,980 $ 876,588 $ 664,288
Adjustments:
Equity in undistributed earnings of
consolidated affiliates..................... (500,166) (417,685) (417,521)
Non-cash dividends received.................... (170,001) (37,321)
Depreciation and amortization.................. 10,786 8,973 4,485
(Gain) loss from sale of securities............ (152) 227 478
Net change in trading accounts................. (19,777)
Net change in other assets..................... (14,753) 34,003 13,523
Net change in other liabilities................ 37,144 11,904 20,017
Equity in earnings of Bank One, Texas, NA...... (57,012)
------------ --------- ---------
NET CASH PROVIDED BY OPERATING ACTIVITIES... 483,061 476,689 228,258
------------ --------- ---------
CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES:
Net (increase) decrease in short-term
investments...................................... 238,876 95,306 (575,551)
Purchases of investment securities................. (14,884) (22,367) (15,000)
Maturities and sales of investment securities...... 35,890 10,745 5,603
Net increase in loans.............................. (154,545) (142,399) (188,845)
Additions to premises and equipment................ (4,585) (23,561) (2,425)
Net decrease in note receivable from FDIC.......... 321,502
Net increase in investment in majority-owned
affiliates, excluding Bank One, Texas, NA........ (34,849) (69,750) (9,030)
Net increase in investment in Bank One, Texas,
NA............................................... (384,363)
Other investing activities......................... 519 (496) 10
------------ --------- ---------
NET CASH PROVIDED BY (USED IN) INVESTING
ACTIVITIES................................ 66,422 (152,522) (848,099)
------------ --------- ---------
CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Net increase (decrease) in commercial paper........ (100,195) (366,150) 330,053
Net decrease in short-term notes payable........... (6,620) (3,530)
Proceeds from the issuance of long-term
borrowings....................................... 344,667 22,500
Repayments of long-term borrowings................. (7,500) (50,147)
Proceeds from stock offerings...................... 563,740
Cash dividends paid................................ (405,959) (276,087) (243,989)
All other financing activities, net................ (36,447) (15,492) (2,358)
------------ --------- ---------
NET CASH (USED IN) PROVIDED BY FINANCING
ACTIVITIES................................ (549,221) (324,092) 619,799
------------ --------- ---------
Increase (decrease) in cash and cash
equivalents............................... 262 75 (42)
CASH AND CASH EQUIVALENTS AT JANUARY 1,............ 739 664 706
------------ --------- ---------
Cash and cash equivalents at December 31,.......... $ 1,001 $ 739 $ 664
------------ --------- ---------
------------ --------- ---------
</TABLE>
See Note 22 for supplemental disclosure.
The Corporation's investment in affiliates represents the
total equity of all the Parent Company's significant
majority-owned consolidated subsidiaries, using the equity
method of accounting for investments.
51
<PAGE> 32
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
NOTE 22: SUPPLEMENTAL DISCLOSURES FOR STATEMENTS OF CASH
FLOWS
Supplemental disclosures of noncash investing and financing
activities, and additional disclosures, are as follows:
<TABLE>
<CAPTION>
$(THOUSANDS) 1993 1992 1991
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Common stock issued in purchase acquisitions........... $ 25,800
----------
----------
Consolidated:
Transfer of assets (from) to Collection pools........ $ 824 $ (27,770) $ 110,151
---------- ---------- ----------
---------- ---------- ----------
Exchange of note receivable from FDIC for additional
investment in Texas................................ $ 94,748
----------
----------
Transfer from loans to other real estate owned....... $ 124,500 $ 244,145 $ 292,140
---------- ---------- ----------
---------- ---------- ----------
Loans issued to facilitate the sale of OREO
properties......................................... $ 37,353
----------
----------
Net trade date accounting entries for investment
transactions....................................... $ 156,803 $ 50,229 $ 387,645
---------- ---------- ----------
---------- ---------- ----------
Other, net........................................... $ 1,310 $ 16,677
---------- ----------
---------- ----------
Parent company:
Transfer of investments in majority-owned affiliates
to other majority-owned affiliates................. $ 22,298 $ 37,321 $ 12,662
---------- ---------- ----------
---------- ---------- ----------
Subordinated debt passed through to bank
affiliates......................................... $ 170,000
----------
----------
Net trade date accounting entries for investment
transactions....................................... $ 5,000 $ 22,750 $ 27,750
---------- ---------- ----------
---------- ---------- ----------
Forgiveness of affiliate debt, merger of affiliate
into parent, and other............................. $ 243,906 $ 230,524
---------- ----------
---------- ----------
Additional disclosures:
Consolidated:
Interest paid...................................... $1,683,529 $2,257,790 $2,648,593
---------- ---------- ----------
---------- ---------- ----------
Income taxes paid.................................. $ 521,097 $ 387,895 $ 303,222
---------- ---------- ----------
---------- ---------- ----------
Parent company:
Interest paid...................................... $ 62,983 $ 62,956 $ 59,272
---------- ---------- ----------
---------- ---------- ----------
</TABLE>
In addition to the noncash investing activities stated
above, in 1991 BANC ONE purchased all of the common stock of
CT for $25 million in common stock, $170 million in
subordinated debt and $57 million in cash, and the remaining
61% of the common stock of Texas from the FDIC for $384
million in cash.
<TABLE>
<CAPTION>
$(THOUSANDS) CT TEXAS
-----------------------------------------------------------------------------------------------
<S> <C> <C>
Fair value of assets acquired, including cash and cash
equivalents...................................................... $2,083,551 $13,966,154
Value ascribed to acquired goodwill................................ 43,115
Cash paid.......................................................... (56,801) (384,363)
Common stock issued................................................ (25,000)
Subordinated debt issued........................................... (169,766)
Investment in Bank One, Texas, NA at October 1, 1991............... (504,313)
---------- -----------
Liabilities assumed............................................ $1,875,099 $13,077,478
---------- -----------
---------- -----------
</TABLE>
In fourth quarter 1993, the Corporation exchanged common
stock for all of the common stock of Colorado Western; First
Financial and Central. Due to the immateriality of these
transactions, prior period financial statements have not been
restated. These amounts are not reflected in the financial
statements.
On September 1, 1992, the Corporation exchanged common
stock for all of the common stock of the Bedford National
Bank, Bedford, IN and Jefferson Bancorp, Inc., Peoria, IL in
transactions accounted for as poolings of interests. Due to
immateriality, prior period financial statements have not been
restated. These amounts are not reflected in the financial
statements.
--------------------------------------------------------------
NOTE 23: INDUSTRY SEGMENT REPORTING
BANC ONE CORPORATION operates principally in a single business
segment offering general commercial banking services.
52
<PAGE> 33
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
FIVE YEAR PERFORMANCE SUMMARY(1)
(unaudited)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARLY AVERAGE
BALANCES YEAR-END BALANCES
BALANCE --------------------- -----------------------
SHEET TOTAL COMMON LONG-TERM TOTAL
$(MILLIONS) YEAR ASSETS EQUITY DEBT ASSETS
<S> <C> <C> <C> <C> <C>
-----------------
1993 $ 74,716 $6,301 $ 1,702 $ 79,919
1992 72,753 5,632 1,357 76,739
1991 60,122 4,796 944 73,840
1990 52,496 4,164 810 56,610
1989 46,423 3,561 624 48,111
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
DATA PER
COMMON
SHARE(2) YEAR NET INCOME
<S> <C> <C> <C> <C> <C>
-----------------
1993 $ 2.98
1992 2.29
1991 1.82
1990 1.56
1989 1.02
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME AND
EXPENSES TOTAL NET
$(MILLIONS) YEAR INCOME INCOME
<S> <C> <C> <C> <C> <C>
-----------------
1993 $7,226.8 $1,140.0
1992 7,358.4 876.6
1991 6,828.3 664.3
1990 6,152.0 536.1
1989 5,473.1 319.5
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
RETURN ON
OPERATING AVERAGE
RATIOS YEAR ASSETS
<S> <C> <C> <C> <C> <C>
-----------------
1993 1.53%
1992 1.20
1991 1.10
1990 1.02
1989 .69
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE
RETURN ON COMMON
EQUITY COMMON EQUITY TO
RATIOS YEAR EQUITY ASSETS
<S> <C> <C> <C> <C> <C>
-----------------
1993 17.81% 8.43 %
1992 15.21 7.74
1991 13.52 7.98
1990 12.78 7.93
1989 8.87 7.67
</TABLE>
(1) Balances have been restated to reflect the effect of three
affiliations accounted for as poolings of interests.
(2) Amounts have been restated to reflect the 10% stock
dividends effective February 10, 1994 and February 14,
1992 and the five-for-four stock split effective August
31, 1993.
53
<PAGE> 34
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
TEN YEAR PERFORMANCE SUMMARY
(unaudited)
AS ORIGINALLY REPORTED
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
YEARLY AVERAGE BALANCES YEAR-END BALANCES
BALANCE ------------------------------------- ------------------------------------------------------
SHEET TOTAL COMMON EARNING LOANS AND LONG-TERM TOTAL
$(MILLIONS) YEAR ASSETS EQUITY ASSETS LEASES DEPOSITS DEBT ASSETS
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
1993 $74,716 $6,301 $66,326 $53,846 $60,943 $1,702 $79,919
1992 58,249 4,685 52,114 38,722 48,465 1,198 61,417
1991 33,861 3,103 30,184 30,197 37,057 703 46,293
1990 27,654 2,590 24,568 20,363 22,316 581 30,336
1989 25,518 2,145 22,945 17,909 20,952 372 26,552
1988 23,484 1,906 21,054 17,325 19,502 379 25,274
1987 17,538 1,372 15,651 12,934 14,478 266 18,730
1986 16,299 1,178 14,482 11,549 13,371 170 17,372
1985 9,539 703 8,412 6,687 8,141 92 10,823
1984 8,088 574 7,119 5,865 7,407 97 9,106
1983 6,153 435 5,387 4,357 5,937 100 7,270
Annual Growth:
1993/92 28.27% 34.49% 27.27% 39.06% 25.75% 42.07% 30.13%
Compound Growth:
5 Years 26.05 27.02 25.80 25.46 25.59 35.04 25.89
10 Years 28.36 30.64 28.54 28.59 26.22 32.77 27.09
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME TOTAL
BEFORE MARKET
DATA PER NET SECURITIES CASH BOOK STOCK CAPITAL
COMMON SHARE(1) YEAR INCOME TRANSACTIONS DIVIDENDS VALUE PRICE $(MILLIONS)
<S> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
1993 $2.98 $2.95 $1.07 $17.82 $35.57 13,542
1992 2.38 2.35 .89 15.53 38.64 12,331
1991 2.12 2.12 .76 13.96 34.80 8,833
1990 1.83 1.84 .69 11.97 18.35 4,408
1989 1.66 1.67 .63 10.35 19.46 4,239
1988 1.56 1.54 .55 9.37 13.37 2,876
1987 1.19 1.16 .49 8.27 13.12 2,360
1986 1.16 1.07 .45 7.51 12.50 2,082
1985 1.10 1.07 .38 6.63 12.79 1,491
1984 .95 .95 .33 5.64 8.49 929
1983 .85 .85 .28 4.89 7.75 802
Annual Growth:
1993/92 25.21% 25.53% 20.22% 14.75% (7.95) 9.82%
Compound Growth:
5 Years 13.82 13.88 14.24 13.72 21.62 36.33
10 Years 13.37 13.25 14.35 13.80 16.46 32.66
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE COMMON
SHARES SHARES STOCK DIVIDEND YEAR-END
COMMON OUTSTANDING TRADED COMMON SPLITS AND PAYOUT PRICE/
STOCK DATA YEAR (000) (000) SHAREHOLDERS DIVIDENDS RATIO EARNINGS
<S> <C> <C> <C> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------------------
1993 376,828 163,327 71,384 5:4 36% 11.9x
1992 319,224 113,186 58,114 10% 37 16.2
1991 220,823 69,241 43,935 36 16.4
1990 209,356 63,717 44,572 10% 38 10.1
1989 178,913 54,155 43,437 37 11.7
1988 177,939 42,347 43,892 10% 35 8.5
1987 144,387 38,297 37,693 42 11.0
1986 137,828 21,457 36,855 10% 39 10.7
1985 93,850 8,270 24,748 3:2 34 11.6
1984 88,925 4,116 24,998 10% 34 8.9
1983 78,418 5,361 21,529 3:2 34 9.1
</TABLE>
54
<PAGE> 35
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
$(MILLIONS)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INCOME
NET BEFORE
INCOME AND TOTAL INTEREST OTHER OTHER SECURITIES NET
EXPENSES YEAR INCOME INCOME (2) INCOME (3) EXPENSE TRANSACTIONS INCOME
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
1993 $7,226.8 $4,169.6 $1,475.6 $3,514.1 $1,129.6 $1,140.0
1992 5,999.0 3,240.1 1,156.9 2,663.6 772.7 781.3
1991 4,154.1 1,838.5 844.3 1,486.2 529.3 529.5
1990 3,506.9 1,309.3 706.7 1,102.7 424.3 423.4
1989 3,163.0 1,193.7 513.5 967.4 365.3 362.9
1988 2,734.5 1,142.0 452.3 893.1 332.9 340.2
1987 1,959.6 907.3 284.0 666.5 203.5 208.9
1986 1,847.4 830.4 250.8 608.5 185.3 199.8
1985 1,192.2 523.2 158.1 361.2 127.6 130.4
1984 1,049.5 448.6 117.0 305.9 107.7 108.0
1983 743.2 311.6 89.0 231.7 83.8 83.3
Annual Growth:
1993/92 20.47% 28.69% 27.55% 31.93% 46.19% 45.90%
Compound Growth:
5 Years 21.45 29.56 26.68 31.52 27.68 27.36
10 Years 25.54 29.61 32.42 31.25 29.71 29.90
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
EMPLOYEES
(FT EQUIV. NET INCOME
RETURN ON NET OTHER PER $MILLION ) PER FT
OPERATING AVERAGE INTEREST INCOME TO OVERHEAD (4) OF EQUIV.
RATIOS YEAR ASSETS MARGIN (2) EXPENSE (3) RATIO ASSETS EMPLOYEE(5)
<S> <C> <C> <C> <C> <C> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
1993 1.53% 6.29% 42.0% 62.2% .57 $25,165
1992 1.34 6.22 43.4 60.6 .53 23,912
1991 1.56 6.09 56.8 55.4 .59 21,449
1990 1.53 5.33 64.1 54.7 .63 19,871
1989 1.42 5.20 53.1 56.7 .67 20,388
1988 1.45 5.42 50.6 56.0 .67 20,166
1987 1.19 5.80 42.6 55.9 .74 15,064
1986 1.23 5.73 41.2 56.3 .73 15,790
1985 1.37 6.22 43.8 53.0 .79 15,167
1984 1.33 6.30 38.2 54.1 .87 13,666
1983 1.35 5.78 38.4 57.8 .95 12,001
Average:
5 Years 1.48% 5.83% 51.88% 57.92% .60% $22,162
10 Years 1.40 5.86 47.58 56.49 .68 19,066
</TABLE>
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
AVERAGE LONG-TERM
RETURN ON COMMON DEBT TO TOTAL
EQUITY COMMON EQUITY TO COMMON MARKET TO RETURN TO
RATIOS YEAR EQUITY ASSETS EQUITY BOOK VALUE INVESTORS(6)
<S> <C> <C> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
1993 17.81% 8.43% 25.1% 199.6% (5.4)%
1992 16.26 8.04 24.2 248.9 13.9
1991 16.58 9.16 19.8 249.2 95.0
1990 16.24 9.36 20.2 153.3 (2.0)
1989 16.79 8.41 16.5 187.9 50.5
1988 17.69 8.12 18.8 142.7 5.8
1987 15.12 7.82 17.9 158.5 8.6
1986 16.49 7.23 13.6 166.4 .8
1985 17.77 7.37 11.9 193.1 56.1
1984 17.84 7.10 15.7 150.6 14.1
1983 18.42 7.06 19.7 158.6 4.0
Average:
5 Years 16.74% 8.68% 21.16% 207.78% 25.39%(7)
10 Years 16.86 8.10 18.37 185.02 20.39(7)
</TABLE>
(1) Amounts reflect all stock dividends and stock splits.
(2) Fully taxable equivalent basis.
(3) Excluding security transactions.
(4) Other expense divided by net interest income(2) plus other income excluding
securities income.
(5) 1990 and 1991 net income exclude equity in earnings of Bank One, Texas, NA.
(6) Market change year to year with dividends reinvested.
(7) Calculation is 5-and 10-year compound growth.
55
<PAGE> 36
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
FIVE YEAR SUMMARY -- AVERAGE BALANCES, INCOME AND EXPENSE, YIELDS AND RATES(1)
(unaudited)
<TABLE>
<CAPTION>
1993 1992
----------------------------------------- --------------------------
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/
$(THOUSANDS) BALANCE EXPENSE RATE BALANCE EXPENSE
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------
ASSETS:
Short-term investments........................... $ 1,217,525 $ 41,705 3.43% $ 3,076,328 $ 122,176
SECURITIES:
Taxable........................................ 14,447,681 814,511 5.64 14,532,291 996,749
Tax exempt..................................... 1,802,653 173,354 9.62 1,851,242 196,283
------------- ------------ ----------- ----------
TOTAL SECURITIES............................... 16,250,334 987,865 6.08 16,383,533 1,193,032
LOANS AND LEASES:(2)
Commercial, financial and agricultural......... 13,289,060 1,094,658 8.24 13,646,090 1,153,945
Real estate.................................... 15,828,739 1,395,253 8.81 14,370,011 1,334,817
Consumer, net.................................. 14,396,788 1,367,747 9.50 12,114,891 1,304,757
Credit card.................................... 5,072,169 839,769 16.56 4,482,553 777,818
Leases, net.................................... 980,842 80,560 8.21 969,473 85,788
Reserve for loan and lease losses.............. (928,698) (912,678)
------------- ------------ ----------- ----------
NET LOANS AND LEASES............................. 48,638,900 4,777,987 9.82 44,670,340 4,657,125
Note receivable from FDIC........................
Collection pools................................. 219,239 7,053 3.22 870,296 36,965
------------- ------------ ----------- ----------
TOTAL EARNING ASSETS............................. 66,325,998 5,814,610 8.77 65,000,497 6,009,298
Other assets..................................... 8,390,097 7,752,900
------------- -----------
TOTAL ASSETS..................................... $ 74,716,095 $72,753,397
------------- -----------
------------- -----------
LIABILITIES:
DEPOSITS:
Demand-non-interest bearing.................. $ 12,096,716 $11,052,125
Demand-interest bearing...................... 8,174,202 126,282 1.54 7,632,919 166,139
Savings...................................... 6,972,812 174,332 2.50 5,359,923 172,684
Money market savings accounts................ 11,411,974 298,818 2.62 11,999,212 398,233
Time deposits:
CD's less than $100,000...................... 16,551,492 615,714 3.72 18,737,882 917,586
CD's -- $100,000 and over:
Domestic................................... 3,392,918 129,135 3.81 4,240,650 186,175
Foreign.................................... 536,102 18,864 3.52 417,994 17,434
------------- ------------ ----------- ----------
TOTAL DEPOSITS................................... 59,136,216 1,363,145 2.31 59,440,705 1,858,251
BORROWED FUNDS:
Short-term..................................... 6,109,256 185,994 3.04 5,197,476 183,617
Long-term...................................... 1,552,309 95,909 6.18 1,035,443 78,236
------------- ------------ ----------- ----------
TOTAL BORROWED FUNDS............................. 7,661,565 281,903 3.68 6,232,919 261,853
------------- ------------ ----------- ----------
TOTAL INTEREST BEARING LIABILITIES............... 54,701,065 1,645,048 3.01 54,621,499 2,120,104
Other liabilities................................ 1,364,026 1,182,754
------------- -----------
TOTAL LIABILITIES................................ 68,161,807 66,856,378
Preferred stock.................................. 253,385 264,811
Common stockholders' equity...................... 6,300,903 5,632,208
------------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY....... $ 74,716,095 $72,753,397
------------- -----------
------------- -----------
NET INTEREST INCOME.............................. 4,169,562 6.29 3,889,194
Provision for loan and lease losses.............. (368,507) (.56) (604,131)
------------ ------ ----------
NET FUNDS FUNCTION............................... $ 3,801,055 5.73% $3,285,063
------------ ------ ----------
------------ ------ ----------
<CAPTION>
YIELD/
$(THOUSANDS) RATE
<S> <C>
- -----------------------------------------------------------------------------------------------------------------
ASSETS:
Short-term investments........................... 3.97%
SECURITIES:
Taxable........................................ 6.86
Tax exempt..................................... 10.60
TOTAL SECURITIES............................... 7.28
LOANS AND LEASES:(2)
Commercial, financial and agricultural......... 8.46
Real estate.................................... 9.29
Consumer, net.................................. 10.77
Credit card.................................... 17.35
Leases, net.................................... 8.85
Reserve for loan and lease losses..............
NET LOANS AND LEASES............................. 10.43
Note receivable from FDIC........................
Collection pools................................. 4.25
TOTAL EARNING ASSETS............................. 9.25
Other assets.....................................
TOTAL ASSETS.....................................
LIABILITIES:
DEPOSITS:
Demand-non-interest bearing..................
Demand-interest bearing...................... 2.18
Savings...................................... 3.22
Money market savings accounts................ 3.32
Time deposits:
CD's less than $100,000...................... 4.90
CD's -- $100,000 and over:
Domestic................................... 4.39
Foreign.................................... 4.17
TOTAL DEPOSITS................................... 3.13
BORROWED FUNDS:
Short-term..................................... 3.53
Long-term...................................... 7.56
TOTAL BORROWED FUNDS............................. 4.20
TOTAL INTEREST BEARING LIABILITIES............... 3.88
Other liabilities................................
TOTAL LIABILITIES................................
Preferred stock..................................
Common stockholders' equity......................
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY.......
NET INTEREST INCOME.............................. 5.98
Provision for loan and lease losses.............. (.93)
-----
NET FUNDS FUNCTION............................... 5.05%
-----
-----
</TABLE>
(1) Fully taxable equivalent basis.
(2) Nonaccrual loans are included in loan balances.
56
<PAGE> 37
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
1991 1990 1989
- ------------------------------------------- ------------------------------------------- ---------------------------
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/ AVERAGE INCOME/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE BALANCE EXPENSE
<S> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------------
$ 3,117,471 $ 187,705 6.02% $ 1,903,707 $ 157,899 8.29% $ 1,388,729 $ 127,987
10,457,918 877,632 8.39 8,230,173 729,006 8.86 6,848,551 596,744
2,127,049 237,096 11.15 2,420,696 275,941 11.40 2,500,907 289,260
- ----------- ----------- ----------- ----------- ----------- -----------
12,584,967 1,114,728 8.86 10,650,869 1,004,947 9.44 9,349,458 886,004
12,990,753 1,288,359 9.92 12,563,043 1,365,744 10.87 12,138,618 1,400,797
11,519,845 1,176,832 10.22 9,821,646 1,059,823 10.79 8,422,240 916,693
8,830,660 1,062,524 12.03 8,056,766 988,354 12.27 7,675,165 929,642
3,214,961 596,921 18.57 2,336,425 438,537 18.77 2,208,161 405,790
896,164 96,231 10.74 878,049 98,085 11.17 835,352 93,801
(735,826) (694,354) (588,846)
- ----------- ----------- ----------- ----------- ----------- -----------
36,716,557 4,220,867 11.50 32,961,575 3,950,543 11.99 30,690,690 3,746,723
213,502 18,808 8.81 383,178 33,758 8.81
850,834 52,295 6.15 667,675 48,896 7.32
- ----------- ----------- ----------- ----------- ----------- -----------
53,483,331 5,594,403 10.46 46,567,004 5,196,043 11.16 41,428,877 4,760,714
6,638,588 5,928,842 4,994,276
- ----------- ----------- -----------
$60,121,919 $52,495,846 $46,423,153
- ----------- ----------- -----------
- ----------- ----------- -----------
$ 7,878,567 $ 6,867,733 $ 6,199,056
5,225,517 216,611 4.15 4,372,017 203,394 4.65 3,934,952 192,698
3,489,320 170,209 4.88 3,135,751 168,919 5.39 2,891,261 155,236
9,891,702 497,215 5.03 7,665,030 466,518 6.09 6,930,709 431,345
17,194,090 1,177,730 6.85 15,361,435 1,237,015 8.05 12,076,972 1,036,813
4,558,868 289,948 6.36 4,955,236 388,228 7.83 5,348,849 433,820
274,728 16,411 5.97 137,149 10,411 7.59 91,361 8,874
- ----------- ----------- ----------- ----------- ----------- -----------
48,512,792 2,368,124 4.88 42,494,351 2,474,485 5.82 37,473,160 2,258,786
4,728,402 271,858 5.75 4,233,435 330,012 7.80 3,722,861 321,610
866,595 82,662 9.54 697,890 71,411 10.23 869,047 88,416
- ----------- ----------- ----------- ----------- ----------- -----------
5,594,997 354,520 6.34 4,931,325 401,423 8.14 4,591,908 410,026
- ----------- ----------- ----------- ----------- ----------- -----------
46,229,222 2,722,644 5.89 40,557,943 2,875,908 7.09 35,866,012 2,668,812
1,015,587 882,303 772,346
- ----------- ----------- -----------
55,123,376 48,307,979 42,837,414
202,704 23,720 24,953
4,795,839 4,164,147 3,560,786
- ----------- ----------- -----------
$60,121,919 $52,495,846 $46,423,153
- ----------- ----------- -----------
- ----------- ----------- -----------
2,871,759 5.37 2,320,135 4.98 2,091,902
(586,239) (1.10) (450,440) (.96) (600,362)
----------- ----------- ----------- ----------- -----------
$ 2,285,520 4.27% $ 1,869,695 4.02% $ 1,491,540
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
<CAPTION>
COMPOUND ANNUAL
- ----------- ------------------------
AVERAGE YIELD/ AVERAGE INCOME/
BALANCE RATE BALANCE EXPENSE
<S> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------
$ 3,117,471 9.22% (3.17)% (17.90)%
10,457,918 8.71 19.53 11.57
2,127,049 11.57 (7.87) (10.94)
- -----------
12,584,967 9.48 13.48 4.82
12,990,753 11.54 2.49 (1.85)
11,519,845 10.88 15.15 11.81
8,830,660 12.11 15.27 10.32
3,214,961 18.38 17.64 16.34
896,164 11.23 6.51 (1.56)
(735,826
- -----------
36,716,557 12.21 10.83 7.56
213,502
850,834
- -----------
53,483,331 11.49 11.12 6.67
6,638,588 11.94
- -----------
$60,121,919 11.21
- -----------
- -----------
$ 7,878,567 14.25
5,225,517 4.90 16.75 (6.48)
3,489,320 5.37 19.27 3.59
9,891,702 6.22 8.94 (6.23)
17,194,090 8.59 9.40 (5.26)
4,558,868 8.11 (6.63) (17.69)
274,728 9.71 31.56 8.79
- -----------
48,512,792 6.03 10.56 (6.38)
4,728,402 8.64 12.94 (5.18)
866,595 10.17 15.10 4.21
- -----------
5,594,997 8.93 13.36 (2.55)
- -----------
46,229,222 7.44 10.19 (5.79)
1,015,587 13.42
- -----------
55,123,376 10.91
202,704 57.56
4,795,839 13.92
- -----------
$60,121,919 11.21%
- -----------
- -----------
5.05 15.89
(1.45) 2.52
-----------
3.60% 17.89%
-----------
-----------
</TABLE>
57
<PAGE> 38
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
RESERVE FOR LOAN AND LEASE LOSSES
(unaudited)
<TABLE>
<CAPTION>
COMMERCIAL,
FINANCIAL
AND REAL CREDIT TOTAL
$(THOUSANDS) AGRICULTURAL ESTATE CONSUMER CARD LEASES UNALLOCATED RESERVES
<S> <C> <C> <C> <C> <C> <C> <C>
- ---------------------------------
BALANCE, DECEMBER 31, 1988....... $ 179,066 $ 96,276 $ 96,107 $ 86,358 $ 9,269 $ 59,273 $526,349
Acquired reserves.............. 7,424 10,148 2,499 121 32 266 20,490
Provision, 1989................ 135,444 221,509 118,117 75,907 13,768 35,617 600,362
Losses......................... (160,450) (165,868) (133,700) (104,190) (16,855) (581,063)
Recoveries..................... 33,196 5,191 39,987 20,575 6,073 105,022
----------- -------- ---------- -------- ------- ----------- --------
Net losses..................... (127,254) (160,677) (93,713) (83,615) (10,782) (476,041)
----------- -------- ---------- -------- ------- ----------- --------
BALANCE, DECEMBER 31, 1989....... 194,680 167,256 123,010 78,771 12,287 95,156 671,160
Allowance applicable to loans
transferred to the Collection
pools........................ (820) (1,845) (77) (2,742)
Acquired reserves.............. 6,463 8,770 5,594 13,994 30 2,897 37,748
Provision, 1990................ 192,487 49,691 94,460 103,384 9,390 1,028 450,440
Losses......................... (207,220) (102,563) (141,538) (126,093) (16,656) (594,070)
Recoveries..................... 35,845 6,478 42,182 22,362 4,708 111,575
----------- -------- ---------- -------- ------- ----------- --------
Net losses..................... (171,375) (96,085) (99,356) (103,731) (11,948) (482,495)
----------- -------- ---------- -------- ------- ----------- --------
BALANCE, DECEMBER 31, 1990....... 221,435 127,787 123,631 92,418 9,759 99,081 674,111
Allowance applicable to loans
transferred to the Collection
pools........................ (1,168) (681) (32) (1,881)
Acquired reserves.............. 54,104 36,584 31,571 32,527 933 11,231 166,950
Provision, 1991................ 159,370 91,671 119,706 205,958 13,330 (3,796) 586,239
Losses......................... (213,353) (91,747) (175,160) (182,127) (20,276) (682,663)
Recoveries..................... 36,162 6,688 53,519 25,176 5,577 127,122
----------- -------- ---------- -------- ------- ----------- --------
Net losses..................... (177,191) (85,059) (121,641) (156,951) (14,699) (555,541)
----------- -------- ---------- -------- ------- ----------- --------
BALANCE, DECEMBER 31, 1991....... 256,550 170,302 153,235 173,952 9,323 106,516 869,878
Allowance applicable to loans
transferred from the
Collection pools............. 652 36 1 689
Acquired reserves.............. 2,345 2,283 1,380 119 3 6,130
Provision, 1992................ 166,754 28,937 148,655 207,688 14,693 37,404 604,131
Losses......................... (181,603) (92,231) (203,977) (239,858) (14,733) (732,402)
Recoveries..................... 50,195 11,821 64,645 28,692 6,117 161,470
----------- -------- ---------- -------- ------- ----------- --------
Net losses..................... (131,408) (80,410) (139,332) (211,166) (8,616) (570,932)
----------- -------- ---------- -------- ------- ----------- --------
BALANCE, DECEMBER 31, 1992....... $ 294,893 121,148 $163,939 170,593 15,403 143,920 909,896
Acquired reserves.............. 2,201 4,221 2,033 2,322 2,746 13,523
Provision, 1993................ (46,086) 88,769 79,177 246,636 4,434 (4,423) 368,507
Losses......................... (91,862) (62,342) (152,119) (249,442) (11,570) (567,335)
Recoveries..................... 69,508 13,028 72,020 34,125 4,881 193,562
----------- -------- ---------- -------- ------- ----------- --------
Net losses..................... (22,354) (49,314) (80,099) (215,317) (6,689) (373,773)
----------- -------- ---------- -------- ------- ----------- --------
BALANCE, DECEMBER 31, 1993....... $ 228,654 $164,824 $165,050 $204,234 $13,148 $ 142,243 $918,153
----------- -------- ---------- -------- ------- ----------- --------
----------- -------- ---------- -------- ------- ----------- --------
</TABLE>
58
<PAGE> 39
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
LOAN AND LEASE ANALYSIS
(unaudited)
<TABLE>
<CAPTION>
$(THOUSANDS) 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C>
- ----------------------------------------
ENDING LOAN AND LEASE BALANCES:
Commercial, financial and
agricultural....................... $14,000,724 $13,466,539 $14,668,863 $12,698,559 $12,099,159
Real estate........................... 16,770,157 15,449,679 13,850,620 10,128,211 8,539,967
Consumer, net......................... 15,961,028 12,899,362 10,465,705 8,236,489 7,752,795
Credit card........................... 6,050,750 5,026,983 4,617,543 2,620,616 2,190,229
Leases, net........................... 1,062,961 966,885 956,130 972,834 926,633
----------- ----------- ----------- ----------- -----------
TOTAL LOANS AND LEASES.................. $53,845,620 $47,809,448 $44,558,861 $34,656,709 $31,508,783
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Nonperforming assets and delinquencies:
Non-accrual loans..................... $ 403,433 $ 541,208 $ 736,057 $ 752,663 $ 697,919
Renegotiated loans.................... 6,871 27,782 21,677 23,899 48,280
Other real estate owned............... 193,158 288,252 375,554 341,118 259,885
----------- ----------- ----------- ----------- -----------
TOTAL NONPERFORMING ASSETS.............. $ 603,462 $ 857,242 $ 1,133,288 $ 1,117,680 $ 1,006,084
----------- ----------- ----------- ----------- -----------
----------- ----------- ----------- ----------- -----------
Loans delinquent 90 days or more (not
included in non-accrual).............. $ 203,973 $ 208,092 $ 287,446 $ 187,356 $ 186,413
Loans classified as doubtful(1)......... 58,681 76,488 201,659 182,792 146,292
Interest foregone on nonperforming loans
(after tax)(2)........................ $ 25,778 $ 34,382 $ 45,054 $ 54,489 $ 53,549
RESERVE AND LOSS RATIOS:
Ending reserve to ending balances:
Commercial, financial and
agricultural....................... 1.63% 2.19% 1.75% 1.74% 1.61%
Real estate........................... .98 .78 1.23 1.26 1.96
Consumer, net......................... 1.03 1.27 1.46 1.50 1.59
Credit card........................... 3.38 3.39 3.77 3.53 3.60
Leases, net........................... 1.24 1.59 .98 1.00 1.33
TOTAL LOANS AND LEASES.................. 1.71 1.90 1.95 1.95 2.13
Net charge-offs to average balances:
Commercial, financial and
agricultural....................... .17 .96 1.36 1.36 1.05
Real estate........................... .31 .56 .74 .98 1.91
Consumer, net......................... .56 1.15 1.38 1.23 1.22
Credit card........................... 4.25 4.71 4.88 4.44 3.79
Leases, net........................... .68 .89 1.64 1.36 1.29
Total loans and leases.................. .75 1.25 1.48 1.43 1.52
Recoveries to gross charge-offs......... 34.12 22.05 18.62 18.78 18.08
To ending loans and leases:
Nonperforming assets.................. 1.12 1.79 2.54 3.23 3.19
Loans delinquent 90 days or more...... .38% .44% .65% .54% .59%
</TABLE>
(1) Defined as loans with a high loss possibility after collateral liquidation
based on existing facts, market conditions and value. These loans are
provided for in the reserve for loan losses, as appropriate. Any interest
income recognized on these loans is immaterial.
(2) The amount of gross interest on nonperforming loans that would have been
recorded during 1993 and 1992 if the loans had been current throughout the
year totaled $59 million and $74 million, respectively. Of this amount, $20
million and $22 million of interest was actually recorded on nonperforming
loans during 1993 and 1992, respectively. Texas is included in these amounts
for the whole year of 1991 even though it was consolidated beginning October
1, 1991.
59
<PAGE> 40
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
CONSOLIDATED QUARTERLY FINANCIAL DATA
(unaudited)
<TABLE>
<CAPTION>
QUARTERS
-------------------------------------------------------------------------------
1993 1992
--------------------------------------------------- -----------------------
$(MILLIONS, EXCEPT PER SHARE DATA) FOURTH THIRD SECOND FIRST FOURTH THIRD
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------
KEY AVERAGE BALANCES:
Taxable securities.................... $ 14,664 $ 13,624 $ 14,224 $ 15,288 $ 16,346 $ 14,726
Tax exempt securities................. 1,901 1,769 1,780 1,770 1,778 1,765
--------- --------- --------- --------- --------- ---------
TOTAL SECURITIES........................ 16,565 15,393 16,004 17,058 18,124 16,491
Commercial loans...................... 13,519 13,170 13,163 13,187 13,541 13,486
Real estate loans..................... 16,391 15,982 15,826 15,148 15,125 14,431
Consumer loans, net................... 15,483 14,704 13,909 13,561 12,704 12,204
Credit card loans..................... 5,505 5,144 4,862 4,772 4,616 4,449
Leases, net........................... 1,034 963 957 966 979 988
Loan and lease reserve................ (915) (922) (948) (931) (914) (924)
--------- --------- --------- --------- --------- ---------
NET LOANS AND LEASES.................... 51,017 49,041 47,769 46,703 46,051 44,634
Collection pools...................... 52 169 286 375 566 742
Other earning assets.................. 852 1,220 1,219 1,555 1,881 2,749
TOTAL EARNING ASSETS.................... 68,486 65,823 65,278 65,691 66,622 64,616
TOTAL ASSETS............................ 77,041 74,226 73,686 73,868 74,649 72,196
Demand deposits:
Non-interest bearing................ 12,921 12,113 11,975 11,447 11,929 10,916
Interest bearing.................... 8,444 8,138 8,098 8,011 7,929 7,330
Savings deposits...................... 18,534 18,370 18,336 18,345 18,076 17,690
Time deposits......................... 20,059 19,941 20,585 21,296 22,075 22,745
--------- --------- --------- --------- --------- ---------
TOTAL DEPOSITS.......................... 59,958 58,562 58,994 59,099 60,009 58,681
Borrowed funds:
Short-term.......................... 7,216 6,133 5,357 5,731 6,041 5,302
Long-term........................... 1,705 1,586 1,557 1,357 1,259 1,076
--------- --------- --------- --------- --------- ---------
TOTAL BORROWED FUNDS.................... 8,921 7,719 6,914 7,088 7,300 6,378
TOTAL INTEREST BEARING LIABILITIES...... 55,958 54,168 53,933 54,740 55,380 54,143
Preferred stock......................... 250 250 255 259 261 264
Common stockholders' equity............. $ 6,457 $ 6,384 $ 6,216 $ 6,044 $ 5,840 $ 5,731
MARGIN ANALYSIS(2):
(as a percent of average earning
assets)
Interest income..................... 8.40% 8.65% 8.81% 9.23% 8.74% 9.05%
Interest expense.................... 2.33 2.43 2.51 2.66 2.86 3.04
--------- --------- --------- --------- --------- ---------
Net interest income................. 6.07 6.22 6.30 6.57 5.88 6.01
Provision for loan and lease
losses............................ .62 .59 .36 .65 .77 .79
--------- --------- --------- --------- --------- ---------
Net funds function.................. 5.45 5.63 5.94 5.92 5.11 5.22
KEY OPERATING RATIOS:
Return on average assets.............. 1.47 1.52 1.53 1.58 1.10 1.35
Return on average common equity....... 17.32 17.43 17.91 18.94 13.69 16.71
Return on average total equity........ 16.93 17.04 17.48 18.46 13.41 16.31
Average common equity to assets....... 8.38 8.60 8.44 8.18 7.82 7.94
Average total equity to assets........ 8.71 8.94 8.78 8.53 8.17 8.30
CREDIT ANALYSIS:
Net charge-offs to average loans and
leases.............................. .89 .81 .67 .63 1.11 1.28
Ending reserves to loans and leases... 1.71 1.80 1.86 1.97 1.90 1.97
As a percent of ending loans and
leases:
Nonperforming assets................ 1.12 1.29 1.49 1.73 1.79 2.06
Loans delinquent 90 or more
days(3)........................... .38 .42 .43 .42 .44 .47
COMMON STOCK:
Average shares outstanding (000)(1)... 377,736 376,943 376,613 375,813 375,791 373,937
Shares traded (000)................... 54,635 39,072 35,563 34,057 29,738 27,762
Per share data(1)
Net income.......................... $ .75 $ .75 $ .73 $ .75 $ .54 $ .63
Cash dividends...................... .28 .28 .26 .25 .24 .23
Book value.......................... 17.82 17.35 16.89 16.45 15.98 15.63
Stock price:
High.............................. 39.77 42.19 44.73 42.27 38.91 34.27
Low............................... 32.27 34.55 36.73 36.36 31.82 30.64
Close............................. $ 35.57 $ 37.73 $ 40.91 $ 42.00 $ 38.64 $ 32.60
PREFERRED STOCK, SERIES C:
Shares traded (000)................... 2,082 1,712 1,827 1,093 1,349 1,034
High................................ $ 74.63 $ 73.25 $ 81.75 $ 78.50 $ 72.75 $ 66.50
Low................................. 66.63 72.75 70.50 69.50 64.13 62.50
Close............................... $ 68.75 $ 73.25 $ 77.00 $ 78.50 $ 72.75 $ 64.75
<CAPTION>
$(MILLIONS, EXCEPT PER SHARE DATA) SECOND FIRST
<S> <C> <C>
- ----------------------------------------
KEY AVERAGE BALANCES:
Taxable securities.................... $ 13,506 $ 13,531
Tax exempt securities................. 1,877 1,986
--------- ---------
TOTAL SECURITIES........................ 15,383 15,517
Commercial loans...................... 13,539 13,484
Real estate loans..................... 14,395 14,036
Consumer loans, net................... 11,815 11,825
Credit card loans..................... 4,366 4,398
Leases, net........................... 1,004 936
Loan and lease reserve................ (921) (891)
--------- ---------
NET LOANS AND LEASES.................... 44,198 43,788
Collection pools...................... 976 1,201
Other earning assets.................. 3,855 3,887
TOTAL EARNING ASSETS.................... 64,412 64,393
TOTAL ASSETS............................ 71,991 72,109
Demand deposits:
Non-interest bearing................ 10,730 10,541
Interest bearing.................... 7,230 7,050
Savings deposits...................... 17,516 17,096
Time deposits......................... 23,787 25,029
--------- ---------
TOTAL DEPOSITS.......................... 59,263 59,716
Borrowed funds:
Short-term.......................... 4,919 4,573
Long-term........................... 898 933
--------- ---------
TOTAL BORROWED FUNDS.................... 5,817 5,506
TOTAL INTEREST BEARING LIABILITIES...... 54,350 54,681
Preferred stock......................... 266 269
Common stockholders' equity............. $ 5,546 $ 5,415
MARGIN ANALYSIS(2):
(as a percent of average earning
assets)
Interest income..................... 9.32% 9.89%
Interest expense.................... 3.36 3.81
--------- ---------
Net interest income................. 5.96 6.08
Provision for loan and lease
losses............................ .76 1.40
--------- ---------
Net funds function.................. 5.20 4.68
KEY OPERATING RATIOS:
Return on average assets.............. 1.36 1.02
Return on average common equity....... 17.25 13.17
Return on average total equity........ 16.81 12.90
Average common equity to assets....... 7.70 7.51
Average total equity to assets........ 8.07 7.88
CREDIT ANALYSIS:
Net charge-offs to average loans and
leases.............................. 1.03 1.60
Ending reserves to loans and leases... 2.05 2.05
As a percent of ending loans and
leases:
Nonperforming assets................ 2.21 2.37
Loans delinquent 90 or more
days(3)........................... .54 .59
COMMON STOCK:
Average shares outstanding (000)(1)... 373,119 371,850
Shares traded (000)................... 34,743 20,943
Per share data(1)
Net income.......................... $ .64 $ .48
Cash dividends...................... .21 .21
Book value.......................... 15.18 14.75
Stock price:
High.............................. 34.55 36.36
Low............................... 30.73 30.75
Close............................. $ 33.18 $ 33.73
PREFERRED STOCK, SERIES C:
Shares traded (000)................... 1,654 2,414
High................................ $ 66.50 $ 69.00
Low................................. 61.75 63.00
Close............................... $ 64.63 $ 65.50
</TABLE>
(1) Amounts have been restated for the 10% common stock dividend effective
February 10, 1994 and the five-shares-for-four-shares stock split effective
August 31, 1993.
(2) Fully taxable equivalent basis.
(3) Excluding nonperforming loans.
60
<PAGE> 41
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
CONSOLIDATED QUARTERLY FINANCIAL DATA
(unaudited)
<TABLE>
<CAPTION>
QUARTERS
-------------------------------------------------------------------------------
1993 1992
--------------------------------------------------- -----------------------
$(MILLIONS) FOURTH THIRD SECOND FIRST FOURTH THIRD
<S> <C> <C> <C> <C> <C> <C>
- ----------------------------------------
CONDENSED INCOME STATEMENT:
Interest income(2)
Taxable securities.................... $ 192.61 $ 187.08 $ 204.19 $ 230.64 $ 251.58 $ 244.86
Tax exempt securities................. 43.52 42.59 43.53 43.71 47.01 47.16
--------- --------- --------- --------- --------- ---------
Securities income....................... 236.13 229.67 247.72 274.35 298.59 292.02
Commercial loans...................... 270.64 274.93 276.02 273.07 261.43 284.85
Real estate loans..................... 352.73 353.39 349.75 339.39 350.62 329.30
Consumer loans........................ 340.01 329.61 328.23 369.90 311.37 315.19
Credit card loans..................... 222.28 215.43 201.15 200.90 201.00 193.75
Leases................................ 20.62 19.72 19.73 20.49 20.08 21.96
--------- --------- --------- --------- --------- ---------
Loan and lease income................... 1,206.28 1,193.08 1,174.88 1,203.75 1,144.50 1,145.05
Collection pool income................ .32 1.37 2.21 3.15 4.87 7.52
Other earning assets.................. 7.64 10.80 9.66 13.61 16.29 24.60
TOTAL INTEREST INCOME................... 1,450.37 1,434.92 1,434.47 1,494.86 1,464.25 1,469.19
Demand deposits....................... 31.00 29.67 34.63 30.99 35.06 36.56
Savings deposits...................... 115.57 117.31 117.88 122.40 129.76 133.52
Time deposits:
CD's under $100,000................. 135.07 151.36 158.73 170.55 203.73 208.50
CD's $100,000 and over.............. 41.28 32.09 34.98 39.64 42.26 52.26
--------- --------- --------- --------- --------- ---------
TOTAL INTEREST ON DEPOSITS.............. 322.92 330.43 346.22 363.58 410.81 430.84
Borrowed funds:
Short-term.......................... 53.54 47.85 40.63 43.97 45.74 43.75
Long-term........................... 25.65 24.99 22.53 22.74 22.74 18.90
--------- --------- --------- --------- --------- ---------
TOTAL INTEREST ON BORROWED FUNDS........ 79.19 72.84 63.16 66.71 68.48 62.65
--------- --------- --------- --------- --------- ---------
TOTAL INTEREST EXPENSE.................. 402.11 403.27 409.38 430.29 479.29 493.49
--------- --------- --------- --------- --------- ---------
Net interest income..................... 1,048.26 1,031.65 1,025.09 1,064.57 984.96 975.70
Provision for loan and lease losses..... 107.03 97.53 58.41 105.55 128.40 128.03
--------- --------- --------- --------- --------- ---------
Net funds function...................... 941.23 934.12 966.68 959.02 856.56 847.67
Other income:
Service charges on deposits........... 111.42 107.66 105.91 107.31 109.99 104.03
Fiduciary income...................... 54.24 52.82 53.59 51.14 51.37 51.42
Loan processing and service income.... 124.67 118.04 112.98 96.09 115.18 110.00
Securities transactions............... 5.51 2.97 .11 7.43 (.19) 3.91
Income from management of Collection
pools, net.......................... 6.46 6.53 6.33 3.46 5.26 6.89
Other non-interest income............. 94.59 92.25 93.64 76.50 83.68 94.75
--------- --------- --------- --------- --------- ---------
TOTAL OTHER INCOME...................... 396.89 380.27 372.56 341.93 365.29 371.00
OTHER EXPENSE:
Salaries and benefits................. 403.98 412.86 406.97 394.53 398.11 381.04
Other non-interest expense............ 483.15 450.24 479.08 483.31 503.10 466.62
--------- --------- --------- --------- --------- ---------
TOTAL OTHER EXPENSE..................... 887.13 863.10 886.05 877.84 901.21 847.66
Taxable equivalent adjustment........... 19.42 20.59 18.37 21.07 21.79 22.44
--------- --------- --------- --------- --------- ---------
Income before income taxes and
cumulative effect of change in
accounting principle.................. 431.57 430.70 434.82 402.04 298.85 348.57
Income tax (provision) benefit:
Income excluding securities
transactions........................ (143.39) (144.68) (152.84) (131.95) (93.29) (101.53)
Securities transactions............... (1.93) (1.11) (.04) (2.60) .07 (1.33)
--------- --------- --------- --------- --------- ---------
Income before cumulative effect of
change in accounting principle........ 286.25 284.91 281.94 267.49 205.63 245.71
Cumulative effect of change in method of
accounting for income taxes........... 19.39
--------- --------- --------- --------- --------- ---------
Net income........................ $ 286.25 $ 284.91 $ 281.94 $ 286.88 $ 205.63 $ 245.71
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
Net income available to common
stockholders'......................... $ 281.88 $ 280.54 $ 277.57 $ 282.29 $ 200.97 $ 240.78
--------- --------- --------- --------- --------- ---------
--------- --------- --------- --------- --------- ---------
<CAPTION>
$(MILLIONS) SECOND FIRST
<S> <C> <C>
- ----------------------------------------
CONDENSED INCOME STATEMENT:
Interest income(2)
Taxable securities.................... $ 238.58 $ 261.68
Tax exempt securities................. 50.22 51.95
--------- ---------
Securities income....................... 288.80 313.63
Commercial loans...................... 304.34 303.33
Real estate loans..................... 328.51 326.38
Consumer loans........................ 310.27 367.92
Credit card loans..................... 189.14 193.94
Leases................................ 22.29 21.46
--------- ---------
Loan and lease income................... 1,154.55 1,213.03
Collection pool income................ 10.91 13.66
Other earning assets.................. 38.59 42.70
TOTAL INTEREST INCOME................... 1,492.85 1,583.02
Demand deposits....................... 43.10 51.42
Savings deposits...................... 147.82 159.81
Time deposits:
CD's under $100,000................. 237.51 267.85
CD's $100,000 and over.............. 45.95 63.15
--------- ---------
TOTAL INTEREST ON DEPOSITS.............. 474.38 542.23
Borrowed funds:
Short-term.......................... 46.35 47.76
Long-term........................... 17.41 19.20
--------- ---------
TOTAL INTEREST ON BORROWED FUNDS........ 63.76 66.96
--------- ---------
TOTAL INTEREST EXPENSE.................. 538.14 609.19
--------- ---------
Net interest income..................... 954.71 973.83
Provision for loan and lease losses..... 122.55 225.15
--------- ---------
Net funds function...................... 832.16 748.68
Other income:
Service charges on deposits........... 100.21 99.27
Fiduciary income...................... 50.58 51.75
Loan processing and service income.... 102.80 106.43
Securities transactions............... 6.61 14.34
Income from management of Collection
pools, net.......................... 9.78 6.31
Other non-interest income............. 85.14 70.97
--------- ---------
TOTAL OTHER INCOME...................... 355.12 349.07
OTHER EXPENSE:
Salaries and benefits................. 368.28 363.88
Other non-interest expense............ 440.97 430.94
--------- ---------
TOTAL OTHER EXPENSE..................... 809.25 794.82
Taxable equivalent adjustment........... 23.34 23.82
--------- ---------
Income before income taxes and
cumulative effect of change in
accounting principle.................. 354.69 279.11
Income tax (provision) benefit:
Income excluding securities
transactions........................ (109.54) (91.89)
Securities transactions............... (2.25) (4.87)
--------- ---------
Income before cumulative effect of
change in accounting principle........ 242.90 182.35
Cumulative effect of change in method of
accounting for income taxes...........
--------- ---------
Net income........................ $ 242.90 $ 182.35
--------- ---------
--------- ---------
Net income available to common
stockholders'......................... $ 237.89 $ 177.25
--------- ---------
--------- ---------
</TABLE>
61
<PAGE> 42
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
RATE-VOLUME ANALYSIS(1, 2)
(unaudited)
<TABLE>
<CAPTION>
1993-92 1992-91 1991-90
------------------------------------- -------------------------------------- ------------------------
CHANGE IN CHANGE IN CHANGE IN
INCOME/ RATE VOLUME INCOME/ RATE VOLUME INCOME/ RATE
$(THOUSANDS) EXPENSE EFFECT EFFECT EXPENSE EFFECT EFFECT EXPENSE EFFECT
<S> <C> <C> <C> <C> <C> <C> <C> <C>
- -------------------
EARNING ASSETS:
Short-term
investments.... $ (80,471) $(14,787) $(65,684) $ (65,529 ) $(63,084) $ (2,445) $ 29,806 $(51,507)
Securities:
Taxable.......... (182,238) (176,461) (5,777) 119,117 (180,002) 299,119 148,626 (40,332)
Tax exempt....... (22,929) (17,859) (5,070) (40,813 ) (11,247) (29,566) (38,845) (5,947)
----------- -------- -------- ---------- -------- ---------- ----------- --------
Total
securities..... (205,167) (194,320) (10,847) 78,304 (191,249) 269,553 109,781 (46,279)
Loans and
leases:(3)
Commercial....... (59,287) (29,553) (29,734) (134,414 ) (196,932) 62,518 (77,385) (122,608)
Real estate...... 60,436 (71,035) 131,471 157,985 (114,171) 272,156 117,009 (58,381)
Consumer, net.... 62,990 (164,990) 227,980 242,233 (120,406) 362,639 74,170 (19,582)
Credit card...... 61,951 (36,681) 98,632 180,897 (41,404) 222,301 158,384 (4,724)
Leases, net...... (5,228) (6,230) 1,002 (10,443 ) (17,879) 7,436 (1,854) (3,842)
----------- -------- -------- ---------- -------- ---------- ----------- --------
Net loans and
leases........... 120,862 (308,489) 429,351 436,258 (490,792) 927,050 270,324 (209,137)
Note receivable
from FDIC........ (18,808 ) (18,808) (14,950)
Collection pool.... (29,912) (7,319) (22,593) (15,330 ) (16,502) 1,172 3,399 (8,620)
----------- -------- -------- ---------- -------- ---------- ----------- --------
TOTAL EARNING
ASSETS........... (194,688) (524,915) 330,227 414,895 (761,627) 1,176,522 398,360 (315,543)
INTEREST BEARING
LIABILITIES:
Demand-interest
bearing.......... (39,857) (51,111) 11,254 (50,472 ) (127,016) 76,544 13,217 (23,498)
Savings:
Regular
savings...... 1,648 (43,577) 45,225 2,475 (69,913) 72,388 1,290 (16,802)
Money market
savings...... (99,415) (80,687) (18,728) (98,982 ) (191,181) 92,199 30,697 (90,113)
Time deposits:
CD's less than
$100,000..... (301,872) (203,345) (98,527) (260,144 ) (358,554) 98,410 (59,285) (196,822)
CD's --
$100,000 and
over:
Domestic... (57,040) (22,697) (34,343) (103,773 ) (84,688) (19,085) (98,280) (68,917)
Foreign.... 1,430 (2,994) 4,424 1,023 (5,892) 6,915 6,000 (2,611)
----------- -------- -------- ---------- -------- ---------- ----------- --------
Total deposits..... (495,106) (404,411) (90,695) (509,873 ) (837,244) 327,371 (106,361) (398,763)
Borrowed funds:
Short-term....... 2,377 (27,385) 29,762 (88,241 ) (113,119) 24,878 (58,154) (93,690)
Long-term........ 17,673 (16,194) 33,867 (4,426 ) (18,900) 14,474 11,251 (5,075)
----------- -------- -------- ---------- -------- ---------- ----------- --------
Total borrowed
funds............ 20,050 (43,579) 63,629 (92,667 ) (132,019) 39,352 (46,903) (98,765)
----------- -------- -------- ---------- -------- ---------- ----------- --------
Total interest
bearing
liabilities...... (475,056) (447,990) (27,066) (602,540 ) (969,263) 366,723 (153,264) (497,528)
----------- -------- -------- ---------- -------- ---------- ----------- --------
Net interest
income........... $ 280,368 $(76,925) $357,293 $1,017,435 $207,636 $ 809,799 $ 551,624 $181,985
----------- -------- -------- ---------- -------- ---------- ----------- --------
----------- -------- -------- ---------- -------- ---------- ----------- --------
<CAPTION>
VOLUME
$(THOUSANDS) EFFECT
<S> <C>
- -------------------
EARNING ASSETS:
Short-term
investments.... $ 81,313
Securities:
Taxable.......... 188,958
Tax exempt....... (32,898)
--------
Total
securities..... 156,060
Loans and
leases:(3)
Commercial....... 45,223
Real estate...... 175,390
Consumer, net.... 93,752
Credit card...... 163,108
Leases, net...... 1,988
--------
Net loans and
leases........... 479,461
Note receivable
from FDIC........ (14,950)
Collection pool.... 12,019
--------
TOTAL EARNING
ASSETS........... 713,903
INTEREST BEARING
LIABILITIES:
Demand-interest
bearing.......... 36,715
Savings:
Regular
savings...... 18,092
Money market
savings...... 120,810
Time deposits:
CD's less than
$100,000..... 137,537
CD's --
$100,000 and
over:
Domestic... (29,363)
Foreign.... 8,611
--------
Total deposits..... 292,402
Borrowed funds:
Short-term....... 35,536
Long-term........ 16,326
--------
Total borrowed
funds............ 51,862
--------
Total interest
bearing
liabilities...... 344,264
--------
Net interest
income........... $369,639
--------
--------
</TABLE>
(1) Fully taxable equivalent basis.
(2) The unallocated portion of the total change has been prorated into rate and
volume components.
(3) Interest income on loans and leases include $129 million and $118 million of
credit card fees in 1993 and 1992, respectively. Other fees included in
interest income are not material.
62
<PAGE> 43
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
MANAGEMENT'S DISCUSSION AND ANALYSIS
INTRODUCTION
Included in this review are the following sections:
<TABLE>
<S> <C>
I. Overview of Operations
II. Net Interest Income
III. Other Income, Other Expense and Income Taxes
IV. Asset Quality
V. Asset Liability Management
VI. Comparison of 1992 Versus 1991
</TABLE>
This discussion should be read in conjunction with the
financial statements, notes and tables included elsewhere in
this report. Definitions of terms used in this discussion
include:
Average Balances:
All average balances are calculated on the basis of daily
averages. Interim period annualizations are based on actual
days in the relevant period.
The Corporation, BANC ONE:
The Corporation refers to the parent company only whereas BANC
ONE refers to the Corporation and majority-owned subsidiaries
(affiliates).
Fully Taxable Equivalent Basis (FTE):
Income on earning assets, which is subject to either a reduced
rate or zero rate of income tax, adjusted to give effect to
the statutory federal income tax rate of 35% and adjusted for
non-deductible carrying costs, where applicable. Where
appropriate, yield calculations include these adjustments.
Net Interest Income:
Interest and related fee income on earning assets (FTE basis
where appropriate) reduced by total interest expense on
interest bearing liabilities.
Net Interest Margin:
Net interest income on an FTE basis expressed as a percent of
average earning assets.
Net Funds Function:
Net interest income reduced by the provision for loan and
lease losses.
Tangible Capital:
The sum of common stockholders' equity and convertible
preferred stock less intangible assets.
Tangible Capital Ratio:
Tangible capital divided by total assets less intangible
assets.
63
<PAGE> 44
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
I. OVERVIEW OF OPERATIONS
Net income for 1993 was $1,140 million, or $2.98 per share
increasing from $877 million, or $2.29 per share in 1992. All
prior period results are restated to include the three
significant poolings of interests acquisitions described in
Note 2. Prior period per share amounts have been restated for
the five-for-four-stock split effective August 31, 1993 and
the 10% common stock dividend effective February 10, 1994.
Factors contributing to the 1993 earnings increase include
improved net interest margin, partially resulting from a $1.3
billion dollar increase in average earning assets from 1992, a
lower loan loss provision due to improved credit quality and
increased earnings from 1993 acquisitions. The favorable
impact of the above items was partly offset by increased data
processing expenses and expenses related to the expansion of
non-bank subsidiaries. Details of changes in net income per
common share are presented in Table 1.
Key performance measures improved considerably from 1992
and remained very strong in comparison to industry standards.
Return on average assets increased to 1.53% from 1.20% in
1992.
Return on average common equity increased to 17.81% during
1993 compared to 15.21% for 1992. The increase resulted
primarily from strong earnings. The ending ratio of tangible
capital to net assets increased to 7.99% in 1993 from 7.18% in
1992. The increase was predominantly due to strong earnings.
--------------------------------------------------------------
Table 1 ANALYSIS OF NET INCOME PER COMMON SHARE
<TABLE>
<CAPTION>
1992-93 1991-92 1990-91
---------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net income per common share, prior year............ $2.29 $1.82 $1.56
Increase/(decrease) from changes in:
Earning asset volume............................. .33 3.38 2.27
Other effects of net interest income............. .42 (.53) (.65)
Provision for loan and lease losses.............. .63 (.05) (.40)
Other income, excluding securities
transactions.................................. .16 .36 .64
Securities transactions.......................... (.02) (.08) .13
Other expense.................................... (.41) (1.99) (1.43)
Provision for federal income taxes, including
$.05 benefit per common share for cumulative
effect
of accounting change in 1993.................. (.41) (.53) (.19)
------- ------- -------
Subtotal........................................... 2.99 2.38 1.93
Change in average common shares.................... (.02) (.08) (.07)
Change in preferred stock dividend................. .01 (.01) (.04)
------- ------- -------
Net income per common share........................ $2.98 $2.29 $1.82
------- ------- -------
------- ------- -------
</TABLE>
--------------------------------------------------------------
64
<PAGE> 45
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
II. NET INTEREST INCOME
Average interest-earning assets increased to $66.3 billion in
1993 from $65.0 billion in 1992. The growth was due primarily
to an increase in installment, credit card and real estate
loans.
The net interest margin increased in 1993 to 6.29% from
5.98% in 1992. Correspondingly, net interest income increased
by $280 million from 1992 to 1993.
Both the cost of funds and the yield on average earning
assets continued to decline during 1993. The national market
decline in interest rates contributed to a 48 basis point
decline in the yield on average earning assets and a 77 basis
point decrease on the average rate paid on deposits and
borrowed funds for the year ended December 31, 1993. The
larger decline in funding costs is principally a result of the
widening of the spread between loans and their respective
funding sources coupled with changes in BANC ONE's funding
mix, including a higher concentration of savings accounts and
non-interest bearing demand deposit accounts. BANC ONE's net
interest margin has benefited from the favorable rate
environment. In the future, the spread between prime and fed
funds rates may return to historical lower levels. In such
circumstances, BANC ONE's net interest margin would be
expected to contract as declines in earning asset yields
(resulting from loan payoffs and security maturities) may
occur faster than the reduction in rates paid on deposits.
--------------------------------------------------------------
Table 2 RATE AND YIELD ANALYSIS
<TABLE>
<CAPTION>
1993 1992 1991
<S> <C> <C> <C>
---------------------------------------------
Earning asset yield.......................... 8.77% 9.25% 10.46%
Cost of deposits and other borrowed funds.... 2.46% 3.23% 5.03%
</TABLE>
--------------------------------------------------------------
Off-Balance Sheet Instruments and Securities
The use of swaps increased interest income by $230 million or
35 basis points in 1993 and $176 million or 28 basis points in
1992. Correspondingly, swaps decreased deposit and other
borrowing costs by $216 million or 40 basis points in 1993 and
$156 million or 28 basis points in 1992. The additional
earnings from the use of swaps effectively alters on-balance
sheet yields and costs and must be viewed in the context of
total interest rate risk management (see discussion beginning
on page 70). As interest rates rise, growth in income on
earning assets is expected to offset the reduction of swap
income.
The shift in composition of the securities portfolio
continued to be toward United States treasury, federal agency
obligations and variable rate securities (primarily
mortgage-backed and asset-backed securities), out of higher
yielding fixed rate federal agency and private label
collateralized mortgage-backed securities. One effect of this
was a reduction of volatility of effective maturities.
Loan Portfolio
Interest income on loans increased by $120.9 million in 1993
over 1992. Average total loans and leases increased to $49.6
billion for 1993 up from $45.6 billion. The overall yield
dropped to 9.8% for 1993 from 10.4%. Although loan yields
dropped during 1993, the decrease was mitigated by the change
in mix resulting from the growth of higher-yielding retail
loans, including residential real estate, consumer and credit
card loans. The percentage of retail loans to total loans
outstanding increased to 60.8% at December 31, 1993 from 57.8%
a year ago. Retail loans are expected to grow faster than
commercial loans during 1994 as BANC ONE continues to focus
its efforts in this area. Although the rates on retail loans
decreased slightly during 1993, they typically are not as
sensitive to short-term interest rate fluctuations as other
earning assets. The yield on the consumer loan portfolio was
enhanced by the income tax refund anticipation loan ("RAL")
program which was introduced in 1990. During the first quarter
of 1993, BANC ONE originated approximately $2.4 billion of
such loans. These very short-term, high-yielding loans had an
average balance during the first quarter of 1993 and 1992 of
$264 and $329 million, respectively.
65
<PAGE> 46
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
As shown in Table 3, the loan portfolio continues to
reflect BANC ONE's policy of avoiding concentrations in any
one industry.
--------------------------------------------------------------
Table 3 LOAN CONCENTRATIONS(1)
<TABLE>
<CAPTION>
1993 1992
------------------------- ----------------
BALANCE AT PERCENT OF BALANCE AT
$(MILLIONS) YEAR-END LOANS (1) YEAR-END
<CAPTION>
1993 1992
------------------------- ----------------
BALANCE AT PERCENT OF BALANCE AT PERCENT OF
$(MILLIONS) YEAR-END LOANS (1) YEAR-END LOANS(1)
----------------------------------------------
Real estate operators, managers and
developers.................................. $3,082 15.36% $2,983
Retail--building, food, auto, clothing and
general..................................... 1,574 7.84 1,112
Mortgage banking, finance companies, financial
institutions and brokers.................... 1,336 6.66 983
Oil and mining................................ 1,082 5.39 806
Construction contractors...................... 1,041 5.19 968
Holding and investment companies.............. 848 4.23 767
Services--miscellaneous....................... 808 4.03 1,086
Wholesale trade--durables..................... 807 4.02 897
Agriculture, forestry, fishing................ 640 3.19 676
Health services............................... 577 2.88 636
<CAPTION>
----------------------------------------------
<S> <C>
Real estate operators, managers and
developers.................................. 15.51%
Retail--building, food, auto, clothing and
general..................................... 5.78
Mortgage banking, finance companies, financial
institutions and brokers.................... 5.11
Oil and mining................................ 4.19
Construction contractors...................... 5.03
Holding and investment companies.............. 3.99
Services--miscellaneous....................... 5.65
Wholesale trade--durables..................... 4.67
Agriculture, forestry, fishing................ 3.52
Health services............................... 3.31
</TABLE>
(1) Includes commercial, financial and agricultural,
commercial real estate and construction loans.
--------------------------------------------------------------
BANC ONE's foreign loans totaled less than 1% of total
loans at December 31, 1993 and 1992.
Table 4 depicts the maturities of certain loans at
December 31, 1993. Demand loans and loans having no stated
maturity are classified as being due within one year. Loans
which have adjustable rates are shown in their maturity
category by their scheduled principal repayment dates rather
than the dates at which they are repriced.
--------------------------------------------------------------
Table 4 MATURITY SCHEDULE FOR LOANS AT DECEMBER 31, 1993
<TABLE>
<CAPTION>
COMMERCIAL,
FINANCIAL & REAL ESTATE,
AGRICULTURAL CONSTRUCTION
------------------- ---------------------
$(MILLIONS) FIXED VARIABLE FIXED VARIABLE
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1994................................... $1,826 $ 6,295 $ 131 $1,003
1995 through 1998...................... 1,341 3,333 77 372
After 1998............................. 433 773 18 31
------ -------- -------- --------
$3,600 $ 10,401 $ 226 $1,406
------ -------- -------- --------
------ -------- -------- --------
</TABLE>
--------------------------------------------------------------
Deposits and Borrowed Funds
Total average interest-bearing funds reflect increases in
short-term borrowings and long-term debt. The current rate
environment has influenced consumers to move from longer-term
time deposits to more liquid demand and savings deposits. The
ratio of average non-interest bearing funding sources to total
funding sources increased to 18.1% in 1993 from 16.8% in 1992.
Deposit growth is expected to lag asset growth during 1994 as
consumers become increasingly able to disintermediate funds
conveniently to other forms of investment. In an effort to
capitalize on this trend, BANC ONE has continued its rollout
of Personal Investment Centers (PIC's) in existing branch
locations to provide easier customer access to various
investment products and services. The development of these and
other non-banking activities is expected to provide additional
earnings in the future and enhance customer relationships.
Average borrowed funds balances increased by 22.9% and the
related interest expense on them grew by only 7.7%, from 1992
to 1993, causing the yield to decrease to 3.68% for 1993 from
4.20% in 1992. To fund earning asset growth, BANC ONE depended
more on short-term borrowings, primarily federal funds
purchased. As noted in Table 8 on page 74, large liability
dependence increased to 16.96% in 1993 from 12.49% in 1992,
but remains well below corporate policy limits of 30%. The
cost of borrowed funds decreased further during 1993 through
the use of interest rate swaps.
66
<PAGE> 47
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
The increase in long-term debt reflects the issuance of
the $250 million of 10-year non-callable subordinated bank
notes issued in April 1993, and $150 million of 12-year
non-callable subordinated bank notes issued in September 1993.
Of the $1.7 billion long-term debt outstanding at December 31,
1993, $1.6 billion qualifies for Tier II capital under risk
based capital guidelines.
- --------------------------------------------------------------------------------
III. OTHER INCOME, OTHER EXPENSE AND INCOME TAXES
Other income, excluding securities transactions, as a percent
of average assets increased to 1.98%, or $1.5 billion, in 1993
from 1.89%, or $1.4 billion, in 1992. This increase was
primarily the result of increased fee income, including income
from fiduciary activities, service charges on deposit accounts
and loan processing and service income.
Loan processing and service income, the largest component
of other income, increased $17.4 million in 1993 from a year
ago. The increase over 1992 was partially attributable to
increased refinancings and mortgage servicing income due to
the low interest rate environment that existed in 1993.
Mortgage loans serviced for others by BANC ONE were
approximately $14.0 billion at December 31, 1993 and $12.7
billion at December 31, 1992. Credit card merchant processing
and interchange income increased approximately $20.2 million
in 1993 over 1992 as a result of increased accounts and
transaction volumes. As securitized credit card balances
amortized, with BANC ONE retaining the balances resulting from
new charges on these accounts, a shift from loan processing
and service income primarily to net interest income has
occurred and will continue.
Fee income on fiduciary activities and service charges on
deposit accounts increased $25.5 million in 1993 over 1992.
BANC ONE continues to place emphasis on these areas.
Income from management of Collection pools continued to
decline during 1993 as the pools decreased in size. The
balance of the on-balance sheet Collection pools decreased
from $420 million at year-end 1992 to $22 million at year-end
1993. In addition to on-balance sheet pools, BANC ONE serviced
approximately $4 billion of off-balance sheet pools. Income
from off-balance sheet pools is not expected to decline in
1994, while income from on-balance sheet pools will be
immaterial.
Other miscellaneous income increased $22.5 million in
1993 over 1992. The increase was due to income earned on the
cash surrender value of corporate-owned life insurance and
continued increases in insurance annuity commissions and
investment banking fees.
Other expenses as a percent of average assets increased
to 4.70% or $3.5 billion in 1993 from 4.61% or $3.4 billion in
1992. During 1993, BANC ONE continued to invest in strategic
systems which will become the enabling platform for operating
efficiencies, improved customer service and product delivery.
The focus of these investments was in Triumph(R), a joint
project with Andersen Consulting to develop a financial card
processing system, and in the Strategic Banking System(TM)
(SBS), a project in concert with Electronic Data Systems to
develop a comprehensive banking system for the future.
The following table illustrates the line item impact of
merger-related expenses for the years indicated.
--------------------------------------------------------------
Table 5 MERGER-RELATED EXPENSES
<TABLE>
<CAPTION>
$(MILLIONS) 1993 1992 1991
--------------------------------------------------------------------------------------
<S> <C> <C> <C>
Salaries and related costs.................................... $ 6 $ 32
Net occupancy expense, exclusive of depreciation.............. 2 19
Equipment expense............................................. 1
Depreciation and amortization................................. 1 2
Outside services and processing............................... 9 31 $ 4
Marketing and development..................................... 4
Other......................................................... 9 23 1
---- ---- ----
Total......................................................... $ 31 $108 $ 5
---- ---- ----
---- ---- ----
</TABLE>
67
<PAGE> 48
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
Salaries and related expense increased $107.0 million
from 1992 to 1993. The increase reflects higher headcount and
pay rates, increased benefits including the impact of
providing a higher level of 401(k) benefits, adoption of the
accrual method of accounting for postretirement medical
coverage ($11.8 million), higher performance bonuses due to
stronger earnings in 1993 and an increase in volume-related
commissions. Although in-market acquisitions have allowed BANC
ONE to reduce headcount at certain banking affiliates, the
development of nationwide credit card portfolios, the opening
of Personal Investment Centers and additional resources for
technological development have resulted in an overall increase
in headcount. These increases were partially offset by the $26
million decrease in severance and other merger-related
expenses from 1992 to 1993 as noted in Table 5.
Net occupancy expense, exclusive of depreciation
decreased $23.1 million in 1993 from 1992. The reduction in
expense reflects the substantially higher merger-related costs
($17 million) in 1992 as noted in Table 5, associated with
elimination of duplicate facilities. In addition, the decrease
in 1993 included the $7.8 million impact of favorable
renegotiations of an affiliate building lease.
Equipment expense increased $9.7 million in 1993 over
1992. The majority of the increase related to hardware and
software rental and maintenance contracts entered into to meet
the demands of the growing affiliate network.
Depreciation and amortization increased $46.4 million in
1993 over 1992. Approximately $22.0 million of the increase is
attributable to increased depreciation on data processing
equipment purchased to support Triumph, SBS, branch automation
and technological enhancements of existing equipment.
Additionally, the Corporation wrote off approximately $17.8
million of goodwill to provide for consistent amortization
methods among all BANC ONE entities and approximately $5.5
million relating to the consolidation and closure of three
credit card processing facilities.
Outside services and processing increased $20.3 million
in 1993 over 1992. The increase is primarily due to software
development related to Triumph and branch automation, which
include fees paid to temporary employees during peak workload
periods. In addition, outside processing and interchange
increased with the growth in loan servicing income and growth
of earning assets. This increase was partially offset by a $22
million decrease in merger-related expenses as noted in Table
5.
Marketing and development expense increased $28.6 million
in 1993 over 1992. Approximately $17 million of the increase
is attributed to a media campaign to stimulate brand awareness
in the markets served by the Corporation. The remaining
increase reflects the rise in community-based marketing
activity and the costs associated with higher levels of direct
mail marketing particularly in support of growth in credit
card programs. Direct mail expense increased to assist in
reaching nationwide markets in an efficient manner.
Communication and transportation expense increased $28.9
million in 1993 over 1992. The increase includes additional
travel-related expenses associated with data processing
conversions and mergers and a general increase in volume from
the growing affiliate network.
Other miscellaneous expenses decreased $62.8 million in
1993 from 1992. Included in these amounts are other real
estate owned (OREO) expenses, which declined $56.3 million
from 1992 to $34.4 million. This decrease relates primarily to
necessary write-downs in 1992 and the decline in the OREO
balance in 1993. The decline in OREO was partially offset by
an increase in litigation reserves during 1993. Additionally,
merger-related expenses decreased from 1992 to 1993 by $14
million as noted in Table 5.
68
<PAGE> 49
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
The provision for income taxes increased to 34.0% of
pretax income in 1993 from 31.6% in 1992. The primary reasons
for the changes to the effective tax rate are the increase in
the federal statutory rate as discussed below, the continued
decline in tax free investments and increased income in states
imposing income taxes. BANC ONE adopted Statement of Financial
Accounting Standards (SFAS) No. 109 on January 1, 1993
requiring certain technical changes in accounting for income
taxes. These changes resulted in the recognition of a $19.4
million tax benefit in the first quarter of 1993. The federal
income tax law, enacted August 10, 1993, caused a net decrease
in income tax expense in the third quarter of $4.9 million.
This net decrease consisted of an increase in current expense
of $12.7 million due to the increase in federal tax rates from
34% to 35%, a decrease in expense of $4.6 million relating to
the revaluation of BANC ONE's net deferred tax asset as
required under SFAS 109 and a decrease in expense of $13
million, reflecting the cumulative impact of the deductibility
of amortization of intangible assets acquired after July 25,
1991, as allowed by the new law.
In May 1993, the Financial Accounting Standards Board
(FASB) issued SFAS 114 regarding accounting by creditors for
impaired loans. BANC ONE does not expect a material impact
from adoption of SFAS 114, which is required by January 1,
1995. Also in May 1993, the FASB issued SFAS 115, Accounting
for Certain Investments in Debt and Equity Securities. BANC
ONE adopted SFAS No. 115 on January 1, 1994. Under the new
statement, BANC ONE is required to classify investment
securities into one of three categories: held to maturity,
available for sale or trading. Securities held to maturity are
measured at amortized cost while available for sale and
trading securities are measured at fair value. Unrealized
holding gains and losses for trading securities will be
included in earnings. Unrealized holding gains and losses for
available-for-sale securities will be excluded from earnings
but reported net of applicable income taxes as a separate
component of stockholders' equity. Unrealized net gains of
$83.2 million existed at January 1, 1994 in securities
classified as available for sale. The FASB also issued SFAS
112 regarding employers' accounting for postemployment
benefits and SFAS 116 regarding contributions received and
contributions made. BANC ONE adopted SFAS 112 effective
January 1, 1994 and SFAS 116 is consistent with BANC ONE's
current policies. SFAS 112 will not result in a significant
impact to BANC ONE.
- --------------------------------------------------------------------------------
IV. ASSET QUALITY
BANC ONE's process for monitoring asset quality includes
detailed, monthly analyses of delinquencies, nonperforming
assets and potential problem loans for each affiliate bank.
These analyses are used by bank management, state holding
company and loan review personnel and corporate credit
officers to identify problem credits and any adverse trends as
early as possible. Management extensively monitors and
improves credit policies, including policies related to
appraisals, assessing the financial condition of borrowers,
restrictions on out-of-area lending and avoidance of loan
concentrations.
BANC ONE has no significant concentration of credit to
any single industry, borrower or area of the country. The loan
portfolio consists of many small loans to diverse businesses
located throughout the markets served by BANC ONE affiliates.
There were only five customers having borrowing relationships
greater than $50 million outstanding at year-end, with the
largest being $81 million. As BANC ONE expands its
geographical coverage, its loan-monitoring system and credit
policies, including underwriting standards, are implemented
immediately. Centralized management of problem assets with
active programs for resolution and disposition of foreclosed
properties, as well as implementation of BANC ONE's internal
loan monitoring system at newly acquired affiliates, has
reduced the level of nonperforming assets. New loan volume
increased throughout 1993 as economic conditions in many of
BANC ONE's markets improved. Management has established
rigorous credit standards and believes that new loan volume is
of generally high quality with risk appropriately priced. In
addition, credit card solicitations continue to be
concentrated on higher credit quality individuals which should
result in lower levels of charge-offs than BANC ONE
experienced in years prior to 1992.
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BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
The following table presents the major components of the
decrease in nonperforming assets from December 31, 1992 to
December 31, 1993:
NONPERFORMING ASSETS ACTIVITY:
<TABLE>
<CAPTION>
$(MILLIONS) AMOUNT
<S> <C> <C>
--------------------------------------------------------------------------
NON-ACCRUAL LOANS ACTIVITY:
Non-accrual additions............................................ $ 395.0
Loans returned to accrual and payments received.................. (314.1)
Reduction due to transfers to OREO and other..................... (72.2)
Charge-offs...................................................... (145.0)
Other, net....................................................... (1.5)
-------
Decrease......................................................... $(137.8)
-------
-------
OTHER REAL ESTATE OWNED (OREO) ACTIVITY:
Transfers from loans............................................. $ 124.5
Write-downs...................................................... (26.4)
Sales and other.................................................. (193.2)
-------
Decrease......................................................... $ (95.1)
-------
-------
</TABLE>
The provision for loan and lease losses decreased to
$368.5 million for 1993 from $604.1 million for 1992. The
decrease can be attributed to general improvement in all areas
of asset quality, including net charge-offs which declined
$195.1 million. The level of nonperforming assets declined as
a result of the recovering national economy and management's
continual monitoring of problem loans, and refinement of
credit policies as discussed above. Consequently,
nonperforming assets as a percentage of ending loans decreased
to 1.12% from 1.79% in 1992.
Loans classified as doubtful decreased from $76.5 million
at December 31, 1992 to $58.7 million at December 31, 1993.
The decrease related to improved economic and business
conditions and the immediate implementation of BANC ONE
standards in the new affiliate network, as discussed above.
The adequacy of the reserve for loan and lease losses is
assessed based upon the above credit quality and other
pertinent loan portfolio information. The reserve to ending
loans stood at 1.71% at December 31, 1993, down from 1.90% at
December 31, 1992. During the same period, the ratio of
reserves to nonperforming loans increased from 160% at
December 31, 1992 to 224% at December 31, 1993. The reserve
for loan losses is consistent with the current composition of
the portfolio and reflects the risks management sees under
present economic conditions. As the economy continues to
improve, BANC ONE expects to see continued loan growth which
will require appropriate adjustments to reserves.
- --------------------------------------------------------------------------------
V. ASSET LIABILITY MANAGEMENT
BANC ONE's Asset Liability Management (ALM) process takes a
coordinated approach to the management of liquidity, capital
and interest rate risk. The following discussion describes
certain key elements of this process, including BANC ONE's use
of securities and derivatives to manage risk.
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- --------------------------------------------------------------------------------
BANC ONE's Natural Asset Sensitivity
BANC ONE, like many regional banks, tends to be
asset-sensitive. Asset repricings and maturities tend to be
shorter than liabilities. This natural "asset-sensitive"
mismatch reflects customer loan and deposit preferences. As a
result, if interest rates are declining, margins will narrow
as assets reprice downward faster than liabilities, with the
reverse being true when rates are increasing. A simplistic way
to represent this natural sensitivity is through an adjusted
repricing gap report, with all discretionary investments
placed in months zero to three and by excluding as
discretionary all off-balance sheet derivatives. The
information below shows BANC ONE's natural interest rate
sensitivity that results from the remaining core bank loans,
deposits and borrowings:
--------------------------------------------------------------
Table 6 "CORE BANK" GAP
<TABLE>
<CAPTION>
WITHIN FOUR TO TOTAL TWO TO OVER
THREE TWELVE YEAR FIVE FIVE
$(MILLIONS) MONTHS MONTHS ONE YEARS YEARS TOTAL
<S> <C> <C> <C> <C> <C> <C>
----------------------------------------------------------------------------------------
ASSETS:
Net loans and leases....... $25,757 $ 7,605 $ 33,362 $16,154 $ 3,434 $52,950
Total investments(1)....... 18,340 18,340 18,340
------- ------- -------- ------- -------- -------
Total earning assets....... 44,097 7,605 51,702 16,154 3,434 71,290
Non earning assets......... 152 152 8,477 8,629
------- ------- -------- ------- -------- -------
Total assets............... $44,249 $ 7,605 $ 51,854 $16,154 $ 11,911 $79,919
------- ------- -------- ------- -------- -------
------- ------- -------- ------- -------- -------
LIABILITIES AND EQUITY:
Non-maturity deposits...... $12,566 $ 2,528 $ 15,094 $ 5,645 $ 20,418 $41,157
CD's less than $100,000.... 4,153 5,927 10,080 5,299 360 15,739
CD's $100,000 and over..... 2,720 622 3,342 670 35 4,047
Borrowings................. 8,735 4 8,739 180 1,547 10,466
Non paying liabilities..... 199 12 211 1,265 1,476
------- ------- -------- ------- -------- -------
Total liabilities.......... 28,373 9,093 37,466 11,794 23,625 72,885
Equity..................... 7,034 7,034
------- ------- -------- ------- -------- -------
Total liabilities and
equity................... $28,373 $ 9,093 $ 37,466 $11,794 $ 30,659 $79,919
------- ------- -------- ------- -------- -------
------- ------- -------- ------- -------- -------
Total GAP.................. $15,876 $(1,488) $ 14,388 $ 4,360 $(18,748)
------- ------- -------- ------- -------- -------
------- ------- -------- ------- -------- -------
Cumulative GAP............. $15,876 $14,388 $ 14,388 $18,748
------- ------- -------- ------- -------- -------
------- ------- -------- ------- -------- -------
</TABLE>
(1) Includes short-term investments and securities.
--------------------------------------------------------------
BANC ONE's one-year repricing gap is a positive $14.4
billion. This indicates that without the term structure of
investment securities and derivatives, BANC ONE is naturally
asset-sensitive, which is consistent with recent years. If
nothing were done to manage this natural sensitivity, BANC
ONE's earnings stream would have been at risk as rates fell
during the last few years.
To manage this risk, BANC ONE uses investment securities
and derivatives to lengthen the average life of its assets and
shorten the life of liabilities. Below is a more complete
gap/duration table illustrating this by incorporating the
impact of these investments/swaps with the natural
asset-sensitive gap shown above. This has been done in two
steps. First, investment securities with their actual maturity
structure have been added to the left side of the table. The
effective duration for each loan and deposit category is then
calculated. This results in an average effective duration of
assets and liabilities without swaps. The assets have a
shorter overall effective duration of 1.45 years versus 1.84
years for the liabilities. After including investment
securities, but still excluding derivatives, BANC ONE remains
asset-sensitive. The right side of the table includes swaps to
synthetically alter the loan and deposit average lives. The
effective durations begin to converge with an effective
duration of assets at 1.73 years and the effective duration of
liabilities of 1.51
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BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
years. The combined effects of investments and derivatives
reduce the exposure of the natural asset sensitivity and
minimize potential earnings risks as detailed in Table 7.
--------------------------------------------------------------
Table 7
<TABLE>
<CAPTION>
ON BALANCE SHEET COMBINED ON & OFF
----------------------------- OFF BALANCE SHEET ---------------------
AS OF DECEMBER EFFECTIVE ---------------------- ADJUSTED
31, 1993 DURATION NOTIONAL NET ADJUSTED EFFECTIVE
$(MILLIONS) BALANCE RATE YEARS AMOUNT(1) SPREAD RATE DURATION
<S> <C> <C> <C> <C> <C> <C> <C>
-----------------
ASSETS:
Variable rate
prime loans.... $16,179 6.75% .29Yrs. $15,133 2.07 % 8.73% 1.74Yrs.
Other variable
loans/investments... 14,963 7.01 .19 7.01 .19
------- ---------
Total variable
rate assets.... 31,142 6.90 .24 15,133 2.07 7.91 1.00
Fixed rate
loans.......... 27,889 9.64 2.19 58 (5.15 ) 9.63 2.19
Other fixed
investments.... 12,259 6.82 2.95 1,205 (1.49 ) 6.67 2.82
------- ---------
Total fixed rate
assets......... 40,148 8.78 2.42 1,263 (1.66 ) 8.73 2.38
Other assets..... 8,629 1.34 1.34
------- ---------
Total assets..... $79,919 7.10 1.45 $16,396 1.78 7.47 1.73
------- ---------
------- ---------
LIABILITIES:
Contractually
repriceable.... $27,479 2.41 2.08 $ 5,638 1.98 2.00 1.73
Variable
deposits/borrowings... 10,250 2.76 .05 198 (8.90 ) 2.93 .08
------- ---------
Total variable
liabilities.... 37,729 2.51 1.53 5,836 1.61 2.26 1.28
Total fixed
liabilities.... 20,003 4.61 1.49 8,624 2.33 3.61 .75
Non-interest
bearing DDA.... 13,677 3.42 3.42
------- ---------
Total
deposits/borrowings... 71,409 2.62 1.88 14,460 2.04 2.21 1.54
Other
liabilities.... 1,476 .06 .06
------- ---------
Total
liabilities.... $72,885 2.57% 1.84 $14,460 2.04 % 2.17% 1.51
------- ---------
------- ---------
</TABLE>
(1) $5.6 billion of basis swaps are excluded from variable
rate prime notional amounts, but included in effective
duration calculations.
--------------------------------------------------------------
In functioning as financial intermediaries for their
customers, BANC ONE affiliate banks are exposed to interest
rate risks. BANC ONE's Funds Management is charged with
monitoring and managing these risks, as well as ensuring all
banks have adequate liquidity. The following two sections
provide an explanation of two major components of interest
rate risk that BANC ONE manages. The discussion is followed by
a more detailed discussion of investment securities and
derivatives, the key risk management tools utilized by BANC
ONE.
Earnings Sensitivity Risk
The first component of interest rate risk BANC ONE actively
manages is called earnings sensitivity risk (ESR). ESR is the
risk that as interest rates change, BANC ONE's forecasted
earnings will change. More specifically, ESR is defined as the
percentage change in forecasted earnings over a 12-month
period for a specified change in forecasted interest rates.
BANC ONE routinely forecasts or simulates earnings (net
income) over a three-year period to measure ESR. BANC ONE has
established guidelines which indicate the amount of short-term
earnings sensitivity it is willing to tolerate over a one and
two year period for given changes in interest rates.
The earnings simulations incorporate assumptions about
loan and deposit repricings and volumes through various
interest rate cycles. These assumptions are continually
monitored and updated as market conditions change. Major
assumptions include loan and deposit growth and mix changes,
pricing spreads, lags in prime loan repricings and spread and
volume elasticities of the interest and non-interest bearing
deposit accounts, regular savings and money market accounts. A
significant portion of consumer deposits do not reprice on a
contractual basis. These deposit balances have been
distributed over a number of periods to reflect those portions
of such accounts that are expected to reprice fully with
market rates over the simulation periods. The
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BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
assumptions are based upon historical experience with the
bank's individual markets and customers. Management expects to
continue the same pricing methodology in response to the
marketplace. However, markets and consumer behavior do change,
and adjustments are necessary as customer preferences,
competitive market conditions, liquidity, loan growth rates
and mix change.
During 1993, for a gradual 1% increase in interest rates,
BANC ONE's maximum 12-month ESR position was a reduction in
earnings (negative) 3.8%; BANC ONE's minimum and ending
positions were negative 2.1% and negative 2.6%, respectively,
well within established guidelines.
Basis Risk
The second component of interest rate risk BANC ONE actively
manages is basis risk. Basis risk is defined as the risk that
the spread between prime loan rates and short-term funding
rates, such as fed funds or LIBOR, will narrow. At December
31, 1993, BANC ONE had approximately $16 billion of prime rate
related loans which were, in effect, funded with LIBOR, fed
funds or other wholesale type liabilities. This risk has been
reduced by entering into $5.5 billion of basis swaps in which
BANC ONE pays prime, less a spread, and receives a LIBOR-based
amount which is subject to certain contractually defined caps.
For the last six years, the spread between prime rate and
LIBOR has averaged 1.91%. At year-end, the spread was 2.63%
and the spread averaged 2.70% during 1993.
Using Securities and Derivatives to Manage Interest Rate Risk
The mix of securities and derivatives is greatly influenced by
macroeconomic conditions which affect underlying core asset
sensitivity, deposit and loan mix and loan growth rates. In
response to changing macroeconomic conditions, BANC ONE uses
securities and interest rate swaps as comparable and often
fungible tools.
As a rule, whenever economic growth slows, loan growth
subsides and bank investment in securities increases, as
excess liquidity is stored up on the balance sheet. In turn,
as the economy expands, loan growth increases and securities
growth declines, liquidity is drawn down from the balance
sheet to support growth. This pattern has been fairly
consistent over time. One of the functions of ALM is to manage
this natural flow of funds and increase the security and/or
swap portfolios to effectively manage this process.
During the first half of 1993, BANC ONE experienced low
loan growth and high liquidity, accompanied by a wide spread
between short-term and long-term interest rates. These
conditions generated incremental earnings opportunities for
BANC ONE as liability sensitivity was increased in the absence
of credit demand.
Derivatives have certain advantages when used for ALM:
higher economic returns than securities; more customizable
instruments in terms of duration choices and interest rate
behavior replication; more favorable regulatory capital
treatment and operationally more efficient to arrange and
maintain. Whether BANC ONE utilizes interest rate swaps, on
which it receives a fixed rate and pays a variable rate, or it
purchases securities, which earn a fixed rate and are financed
by paying a floating rate, BANC ONE's rate risk position can
be equally well managed. However, it is the interplay between
liquidity, capital, economic conditions and returns which will
determine the final mix of securities and swaps (or other
derivatives) used to manage the structural interest rate risk.
During 1993, variable rate securities and derivatives
were used as primary interest rate risk management tools. This
combination was intended to warehouse liquidity and
efficiently use capital. The shift in composition of the
long-term securities portfolio continued to be toward United
States Treasury and federal agency obligations, out of higher
yielding federal agency and private label collateralized
mortgage-backed securities (CMO's). During 1993, $24.6 billion
in notional amount of new swaps were initiated. Of the $24.6
billion of new swaps, $7.5 billion replaced maturities, $5.5
billion were used to adjust for basis risk, $3.2 billion
related to new affiliates and $8.4 billion was required to
offset increasing asset sensitivity in BANC ONE.
Note 3 to the financial statements, Securities and
Derivatives, provides more details regarding the balances,
rates and activities associated with these products.
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BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
Derivative Credit Risk
The notional amount of derivative contracts does not represent
direct credit exposure. BANC ONE's direct credit exposure is
limited to the net difference between the calculated pay and
receive amounts on each transaction, which is generally netted
and settled quarterly, and the ability of the counterparty to
perform its payment obligation under the agreement. BANC ONE
has very stringent policies governing derivative activities
and typically demands collateral from the counterparty to
further minimize credit risk. The methods used to determine
counterparties and credit lines are established in conjunction
with the Chief Credit Officer of BANC ONE and are reviewed and
approved annually. The counterparties used are only high
quality credits.
There were no past due amounts or reserves for possible
credit losses at December 31, 1993 related to derivative
transactions, nor were there any charge-offs during the three
years ended December 31, 1993.
Liquidity Management
One of the principal methods BANC ONE uses to manage its
liquidity position is to maintain a level of deposits larger
than $100,000 at the lowest practicable level. This
compliments BANC ONE's policy of keeping a relatively
unlevered balance sheet. BANC ONE's policy is that large
liability dependence be no greater than 30%. In practice, BANC
ONE manages the position at much lower levels.
As of December 31, 1993, large liability dependence was
16.96%, an increase of 4.47% from the prior year, as increased
loan and security growth was funded with short-term
borrowings.
--------------------------------------------------------------
Table 8 LIQUIDITY
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
$(MILLIONS) 1993 1992
<S> <C> <C>
------------------------------------------------------------------------------------
Earning assets net of money market investments...... $ 70,358 $ 65,328
Large liabilities:
Net national market liabilities..................... $ 2,973 $ 1,177
As a percent of net earning assets.................. 4.23% 1.80%
Total net large liabilities......................... $ 11,932 $ 8,162
As a percent of net earning assets.................. 16.96% 12.49%
</TABLE>
--------------------------------------------------------------
This large liability dependence ratio is significantly
lower than many other banks. The usage of derivatives has
served as an effective tool in creating and managing this
liquidity. In the past, when banks experienced an influx of
longer-term deposits they would purchase similar term assets
in order to manage the incremental interest rate risk from
this deposit growth. These assets frequently had limited
liquidity and utilized regulatory capital. BANC ONE has found
that such deposits can be better offset from an interest rate
risk management perspective with derivatives, allowing the
excess cash to be invested in shorter, less capital-intensive
securities or to pay off short-term borrowings and shrink the
size of the balance sheet. This type of activity increases
core liquidity while maintaining the bank's rate risk
position, usually reducing the amount of regulatory capital
required and concurrently creating incremental net interest
income.
BANC ONE has a number of significant sources of
liquidity. The first and most reliable source is "On-Books
Liquidity". Substantial funding can be extracted from the
$17.4 billion investment portfolio by the sale of securities
classified as held for sale, repurchase agreements and by not
reinvesting maturities. The second source of liquidity is a
geographically diverse network of 81 affiliate banks in 13
states, providing access to a substantial retail network of
over 1,300 branches. A third source of liquidity is the
ability to acquire large liabilities in local affiliates. A
fourth source of liquidity is the ability to access large
liabilities in the national marketplace.
BANC ONE's size and high credit quality ratings have made
available numerous external funding sources. BANC ONE banks
issued $400 million of subordinated debt in 1993. A medium
74
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BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
term note program of $1.7 billion is also available, as are
lines of credit totaling $1.6 billion. In early January 1994,
BANC ONE created a $4 billion bank note facility. BANC ONE
also maintains an extensive contingency funding plan. The
various sources of liquidity available to BANC ONE provide
ample long-term as well as short-term funding alternatives.
Capital
To the extent possible, BANC ONE continues to use common stock
as consideration in acquisitions so that stockholders' equity
is increased as assets are acquired. As of December 31, 1993,
BANC ONE had entered into five definitive agreements to
acquire bank holding companies that will be accounted for as
poolings of interests. The transactions will result in the
issuance of approximately 26 million shares of common stock,
as adjusted for the 10% stock dividend effective February 10,
1994. BANC ONE generally issues shares in acquisitions in an
amount such that little or no dilution to earnings per share
results based on expected earnings from the target. Based on
current estimates, no dilution of 1994 earnings per share is
expected from these acquisitions.
On January 25, 1994, the Board of Directors approved the
purchase of up to 10 million shares of BANC ONE common stock
to be used specifically for the acquisition of Premier
Bancorp, Inc. (Premier), in Baton Rouge, Louisiana. BANC ONE
has an option to purchase Premier between June 30, 1995 and
March 31, 1997 for a purchase price of 125% of the common
stock book value (subject to certain adjustments) of Premier.
BANC ONE has long had a policy of maintaining superior
capital ratios. BANC ONE's policies require it to maintain, at
a minimum, a capital position that meets the federal
regulators "well-capitalized" classification. Total equity to
assets at December 31, 1993 of 8.80% has increased 67 basis
points, from 8.13% a year ago. This increase was caused by
BANC ONE's strong earnings in 1993. Risk based Tier I and
Total Capital Levels are 10.51% and 14.19% respectively, both
significantly above regulatory capital requirements. BANC ONE
matches dividend increases with earnings increases so that
dividends paid out average between 30% and 40% of net income.
Based on net income per common share and BANC ONE's historical
common dividends per share, the dividend payout ratio was 36%
and 37% in 1993 and 1992, respectively. Payout ratios based on
BANC ONE's historical net income per common share are
presented on the Ten Year Performance Summary.
- --------------------------------------------------------------------------------
VI. COMPARISON OF 1992 VERSUS 1991
Overview of Operations -- Net income for 1992 was $877
million, or $2.29 per share, increasing from $664 million, or
$1.82 per share in 1991. All results have been restated to
include all acquisitions accounted for as poolings of
interests. Bank One, Texas, NA ("Texas") was accounted for
under the equity method until October 1, 1991, and
consolidated with BANC ONE since that date. In addition, all
per share amounts have been restated for a five-for-four-stock
split effective August 31, 1993 and two 10% common stock
dividends effective February 14, 1992 and February 10, 1994.
The 1992 earnings increase is primarily due to improved
net interest margin and credit quality, partially offset by
merger-related expenses as noted in Table 5.
Return on average assets increased to 1.20% from 1.10% in
1991. Consolidation of Texas for the three months in 1991
reduced 1991's return on assets.
Return on average common equity increased to 15.21% in
1992 from 13.52% for 1991. The increase resulted from strong
net income, slightly offset by the impact of a larger capital
base as a result of the issuance of $319 million in common
stock in November 1991. The ending ratio of tangible capital
to net assets increased to 7.18% in 1992 from 6.50% in 1991.
The increase was predominately due to strong earnings.
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BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
Net Interest Income -- Average interest-earning assets
increased to $65.0 billion in 1992 from $53.5 billion in 1991.
Texas caused approximately $8.2 billion of the increase. The
remaining growth is due primarily to an increase in
installment, credit card and real estate loans.
Net interest margin increased in 1992 to 5.98% from 5.37%
in 1991. Correspondingly, net interest income (FTE) increased
by $1,017 million. Table 9 presents a rate volume analysis
(FTE) which illustrates the rate impact of the increase as
well as a breakout between the volume increase related solely
to Texas.
--------------------------------------------------------------
Table 9 ANALYSIS OF CHANGES IN NET INTEREST INCOME
<TABLE>
<CAPTION>
YEAR-ENDED DECEMBER 31, 1992 OVER 1991
--------------------------------------------------
VOLUME
---------------------
$(THOUSANDS) TEXAS OTHER RATE TOTAL
<S> <C> <C> <C> <C>
--------------------------------------------------------------------------------------------------
Increase (decrease) in interest income:
Short-term investments..................... $ 11,552 $(13,997) $ (63,084) $ (65,529)
Securities................................. 197,257 72,296 (191,249) 78,304
Loans and leases........................... 468,553 458,497 (490,792) 436,258
Other...................................... (17,636) (16,502) (34,138)
-------- -------- --------- ----------
Total........................................ 677,362 499,160 (761,627) 414,895
Increase (decrease) in interest expense:
Deposits................................... 220,881 106,490 (837,244) (509,873)
Other borrowings........................... 8,579 30,773 (132,019) (92,667)
-------- -------- --------- ----------
Total........................................ 229,460 137,263 (969,263) (602,540)
-------- -------- --------- ----------
Increase in net interest income.............. $447,902 $361,897 $ 207,636 $1,017,435
-------- -------- --------- ----------
-------- -------- --------- ----------
</TABLE>
--------------------------------------------------------------
The decrease in interest rates since late 1991, coupled
with interest rate swaps, led to a 121 basis point decline in
the yield on average earning assets and a 180 basis point
decrease in the average rate paid on deposits and borrowed
funds for the year ended December 31, 1992. BANC ONE's net
interest margin increased due to favorable changes in mix,
including a higher concentration of savings accounts and
non-interest bearing demand deposit accounts as sources of
funds and higher balances invested in higher yielding consumer
loans and credit cards.
Off-Balance Sheet Instruments, Securities, Short-term
Investments -- The use of swaps increased interest income by
$176 million or 28 basis points and decreased deposit and
other borrowing costs by $156 million or 29 basis points in
1992.
Loan Portfolio -- As noted in Table 9, interest income on
loans increased by $436.3 million in 1992 over 1991. Of this
increase, $468.6 million related to Texas and was partially
offset by a decline in current rates. Average total loans and
leases increased to $45.6 billion for 1992 up from $37.5
billion for 1991. The overall yield dropped to 10.4% for 1992
from 11.5% for 1991.
The yield on the installment loan portfolio was enhanced
by the RAL program which was introduced in 1990. During the
first quarter of 1992 and 1991, BANC ONE originated
approximately $2.9 billion and $1.5 billion, respectively, of
such loans. The very short-term, high-yielding loans had an
average balance during the first quarter of 1992 and 1991 of
$329 million and $180 million, respectively.
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BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
Deposits and Borrowed Funds -- Total average
interest-bearing funds included increases in short-term
borrowings, long-term debt and deposits. The current rate
environment has influenced consumers to move from longer-term
time deposits to more liquid demand and savings deposits.
Average borrowed funds increased by 11.4% from 1991 to
1992, while interest expense on these borrowings decreased
26.1% in 1992 from 1991. As noted in Table 9, the increase in
average balances is primarily related to Texas. The decrease
in interest expense was due to the declining rates on
short-term borrowings, which decreased to 3.53% in 1992 from
5.75% in 1991. The effective rate on borrowed funds further
decreased during both 1992 and 1991 as a result of the use of
interest rate swaps.
The increase in long-term debt was caused by the issuance
of $350 million of 10-year non-callable bank Subordinated
Notes issued by the Corporation in August 1992 and $150
million of 10-year non-callable bank Subordinated Notes issued
by an affiliate of the Corporation in November 1992. Of the
$1.4 billion long-term debt outstanding at December 31, 1992,
$1.2 billion qualified for Tier II capital under risk-based
capital guidelines.
Other Income, Other Expense and Income Taxes -- Net
non-interest expense (excluding securities transactions) as a
percent of average assets increased to 2.66% in 1992 from
2.25% in 1991.
The significant increase is primarily due to the
accounting for Texas. The following table shows the
fluctuations in other income and other expense between 1992
and 1991 for Texas and the remainder of BANC ONE, excluding
Texas.
--------------------------------------------------------------
Table 10 ANALYSIS OF CHANGES IN OTHER INCOME AND OTHER
EXPENSE
<TABLE>
<CAPTION>
$ CHANGE, 1992-1991
----------------------------------------
BANK ONE,
TEXAS, NA, ALL BANC ONE
NET OTHER TOTAL
<S> <C> <C> <C>
---------------------------------------------------------------------------------------
Other income(1)
Income from fiduciary activities........... $ 6,060 $ 14,554 $ 20,614
Service charges on deposit accounts........ 64,143 40,414 104,557
Loan processing and service income......... 8,016 45,456 53,472
Income from management of Collection pools,
net..................................... (31,075) (31,075 )
Other...................................... 27,951 12,117 40,068
------------ -------- ----------
Total other income...................... $106,170 $ 81,466 $ 187,636
------------ -------- ----------
------------ -------- ----------
Other expenses:
Salaries and related costs................. $150,031 $151,407 $ 301,438
Net occupancy expense, exclusive of
depreciation............................ 29,735 19,917 49,652
Equipment expense.......................... 8,624 1,330 9,954
Taxes other than income and payroll........ 2,111 8,125 10,236
Depreciation and amortization.............. 29,605 37,240 66,845
Outside services and processing............ 40,440 141,661 182,101
Marketing and development.................. 13,695 11,545 25,240
Communication and transportation........... 19,105 16,627 35,732
Other...................................... 24,579 7,296 31,875
------------ -------- ----------
Total other expenses.................... 317,925 395,148 713,073
------------ -------- ----------
Net non-interest expense................ $211,755 $313,682 $ 525,437
------------ -------- ----------
------------ -------- ----------
</TABLE>
(1) Excludes income from securities transactions and equity in
earnings of Bank One, Texas NA.
--------------------------------------------------------------
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BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
Other income totaled $1.4 billion in 1992, up from $1.3
billion in 1991. This increase was primarily the result of
increased fee income, including income from fiduciary
activities, service charges on deposit accounts and loan
processing and service income.
Loan processing and service income, the largest component
of other income, increased $53.5 million in 1992 from 1991.
The increase resulted primarily from increased mortgage
banking activity, interchange and merchant processing income
and annual fee income. Mortgage loans serviced for others by
BANC ONE were approximately $12.7 billion at December 31, 1992
and $8.6 billion at December 31, 1991.
Fee income on trust activities and service charges on
deposit accounts increased $125.2 million from year to year.
BANC ONE has placed continued emphasis on these areas
generating increased volume.
Income from management of Collection pools declined
during 1992 as the pools decreased in size. The balance of the
on-balance sheet Collection pools decreased from $1.3 billion
at December 31, 1991 to $420 million at year-end 1992.
Other miscellaneous income increased $40.1 million. The
increase was due to increased investment banking fees,
insurance commissions and gains on sale of credit card
portfolios.
Other expenses totaled $3.4 billion in 1992 and $2.6
billion in 1991. The increase reflects the accounting for
Texas as previously mentioned and increased volume of activity
from the growing affiliate network.
Salaries and related costs increased $301.4 million in
1992 over 1991. The increase of salaries relates to
merger-related costs for 1992 acquisitions, an increase in pay
rates, higher cost of providing benefits, higher performance
bonuses and an increase in volume-related commissions.
Net occupancy expenses, exclusive of depreciation,
increased $49.7 million. The changes in expense between years
reflect the recognition of substantially higher merger-related
costs in 1992, associated with elimination of duplicate
facilities.
Depreciation and amortization increased $66.8 million in
1992 over 1991. The increase reflected depreciation of data
processing equipment and amortization of purchased software,
amortization of core deposit intangibles and credit card
premiums from 1992 and 1991 acquisitions and the depreciation
on new equipment acquired to manage the BANC ONE entities.
Outside services and processing increased $182.1 million
from year to year. The increase included $27.5 million of
non-recurring fees relating to acquisitions, increased
merchant processing expenses and consulting fees. In addition,
appraisal fees increased as BANC ONE complied with regulations
requiring more frequent appraisal of collateral property. Fees
paid to temporary employees increased during peak workload
periods.
Marketing and development increased $25.2 million in 1992
over 1991. The majority of the increase reflects the rise in
community-based marketing activity and the costs associated
with higher levels of direct mail marketing, particularly in
support of growth in credit card programs. Increases in 1992
over 1991 also include increases for program media and
production costs related to the "Whatever it takes" campaign.
78
<PAGE> 59
BANC ONE CORPORATION and Subsidiaries
- --------------------------------------------------------------------------------
Communication and transportation increased $35.7 million.
The increase includes additional travel-related expenses
associated with data processing conversions and mergers and a
general increase in volume from the growing affiliate network.
Other miscellaneous expenses increased $31.9 million in
1992 over 1991. The increase represents merger-related
expenses of $22.0 million (see Table 5) and a $12.7 million
increase in Federal Deposit Insurance Corporation insurance
premiums due to higher premium rates, offset by a decrease in
OREO expenses and write-downs.
The provision for income taxes increased to 31.6% of
pretax income in 1992 from 24.5% in 1991. The primary reasons
for the changes to the effective tax rate are the continued
decline in tax free investments and increased state tax rates,
as well as Texas being accounted for under the equity method
(net of tax) until October 1, 1991, and consolidated with BANC
ONE since that date.
Asset Quality -- The provision for loan and lease losses
increased to $604.1 million in 1992 compared to $586.2 million
for 1991. The increased provision reflected increased net
charge-offs for the year as well as an increase in loans
outstanding, the high level of reserves and the inclusion of
Texas for the fourth quarter only, in 1991. The level of
nonperforming assets continued to decline as a result of the
recovering national economy and management's continual
monitoring and refinement of credit policies. Accordingly,
nonperforming assets as a percentage of ending loans decreased
to 1.79% in 1992 from 2.54% in 1991.
The reserve to ending loans decreased to 1.90% at
December 31, 1992 from 1.95% at December 31, 1991. During the
same period, the ratio of reserves to nonperforming loans
increased from 115% in 1991 to 160% in 1992.
Capital -- BANC ONE strives to maintain high levels of
equity. Total equity to assets at December 31, 1992 of 8.13%
has increased 60 basis points over December 31, 1991, due to
BANC ONE's strong earnings in 1992.
BANC ONE also maintained its high levels of equity during
1991. Average total equity to assets of 8.31% in 1991
increased 33 basis points over the previous year. These
increases were caused by BANC ONE's strong earnings in 1991,
as well as the equity issuances discussed earlier.
79
<PAGE> 60
BANC ONE CORPORATION and Subsidiaries
<TABLE>
MARKET PRESENCE BY STATE
<S> <C>
ARIZONA
- ----------------------------------------------------------------------
Bank One, Arizona, NA
CALIFORNIA
- ----------------------------------------------------------------------
Bank One, Fresno, NA
COLORADO
- ----------------------------------------------------------------------
Bank One, Boulder, NA Bank One, Greeley, NA
Bank One, Colorado Springs, NA Bank One, Western Colorado, NA
Bank One, Denver, NA First National Bank of Montrose
Bank One, Fort Collins/
Loveland, NA
ILLINOIS
- ----------------------------------------------------------------------
Bank One, Bloomington-Normal Bank One, Peoria
Bank One, Champaign-Urbana Bank One, Rockford, NA
Bank One, Chicago, NA Bank One, Springfield
INDIANA
- ----------------------------------------------------------------------
Bank One, Bloomington, NA Bank One, Marion, NA
Bank One, Crawfordsville, NA Bank One, Merrillville, NA
Bank One, Indianapolis, NA Bank One, Rensselaer, NA
Bank One, Lafayette, NA Bank One, Richmond, NA
KENTUCKY
- ----------------------------------------------------------------------
Bank One, Lexington, NA Bank One, Pikeville, NA
MICHIGAN
- ----------------------------------------------------------------------
Bank One, East Lansing Bank One, Sturgis
Bank One, Fenton, NA Bank One, Ypsilanti, NA
OHIO
- ----------------------------------------------------------------------
Bank One, Akron, NA Bank One, Fremont, NA
Bank One, Athens, NA Bank One, Lima, NA
Bank One, Cambridge, NA Bank One, Mansfield
Bank One, Cincinnati, NA Bank One, Marietta, NA
Bank One, Cleveland, NA Bank One, Marion
Bank One, Columbus, NA Bank One, Portsmouth, NA
Bank One, Coshocton, NA Bank One, Sidney, NA
Bank One, Dayton, NA Bank One, Steubenville, NA
Bank One, Dover, NA Bank One, Youngstown, NA
OKLAHOMA
- ----------------------------------------------------------------------
Bank One, Oklahoma City
TEXAS
- ----------------------------------------------------------------------
Bank One, Texas, NA Greenville/Commerce
serving markets in: Houston
Abilene Levelland
Amarillo Longview
Arlington Marshall
Austin Midland
Beaumont/Orange/Port Arthur Odessa
Brenham San Antonio
Corsicana/Athens Sherman/Denison
Dallas Tyler/Canton
Denton Waco/Temple
Fort Worth Wichita Falls
Fredericksburg
UTAH
- ----------------------------------------------------------------------
Bank One, Utah, NA
WEST VIRGINIA
- ----------------------------------------------------------------------
Bank One, West Virginia, Bank One, West Virginia,
Beckley, NA Logan, NA
Bank One, West Virginia, Bank One, West Virginia,
Boone, NA New Martinsville, NA
Bank One, West Virginia, Bank One, West Virginia,
Buckhannon, NA Nicholas County
Bank One, West Virginia, Bank One, West Virginia,
Charles Town Philippi, NA
Bank One, West Virginia, Bank One, West Virginia,
Charleston, NA St. Albans, NA
Bank One, West Virginia, Bank One, West Virginia,
Clarksburg, NA Wayne County
Bank One, West Virginia, Bank One, West Virginia,
Huntington, NA Wheeling, NA
Bank One, West Virginia, Bank One, West Virginia,
Lincoln, NA Williamson, NA
WISCONSIN
- ----------------------------------------------------------------------
Bank One, Antigo Bank One, Madison
Bank One, Appleton, NA Bank One, Milwaukee, NA
Bank One, Beaver Dam Bank One, Monroe
Bank One, Elkhorn, NA Bank One, Oshkosh, NA
Bank One, Fond du Lac Bank One, Racine, NA
Bank One, Green Bay Bank One, Stevens Point, NA
Bank One, Janesville, NA Bank One, West Bend
Bank One, Kenosha, NA
OTHER AFFILIATES
BANC ONE DIVERSIFIED SERVICES CORPORATION
- ----------------------------------------------------------------------
Banc One Credit Card Services Company
Banc One Leasing Corporation
Finance One Corporation
Banc One Financial Services, Inc.
Banc One Mortgage Corporation
Banc One POS Services Company
BANC ONE INVESTOR SERVICES GROUP
- ----------------------------------------------------------------------
Banc One Insurance Group
Banc One Investment Advisors Corporation
Banc One Securities Corporation
Bank One Trust companies
- ----------------------------------
Banc One Capital Corporation
Banc One Community Development Corporation
Banc One Funds Management Company
Banc One Management and Consulting Corporation
Banc One Services Corporation
Banc One Financial Card Services Corporation
PENDING AFFILIATES
- ----------------------------------------------------------------------
Parkdale Bank, Beaumont, Texas
Mid States Bancshares, Inc., Moline, Illinois
Capital Bancorp, Salt Lake City, Utah
Liberty National Bancorp, Inc., Louisville, Kentucky
American Holding Company, Highland Park, Illinois
(CERTAIN PENDING AFFILIATES ARE SUBJECT TO SHAREHOLDER AND REGULATORY APPROVAL.)
</TABLE>
<PAGE> 1
<TABLE>
EXHIBIT 22
SUBSIDIARIES OF BANC ONE CORPORATION (AS OF 12/31/93)
(100% OWNERSHIP UNLESS OTHERWISE INDICATED)
<CAPTION>
JURISDICTION OF NAME IN WHICH
INCORPORATION OR BUSINESS IS
NAME OF SUBSIDIARY ORGANIZATION CONDUCTED
- ------------------------------ ---------------- -------------
<S> <C> <C>
BANC ONE OHIO CORPORATION (f) SAME
BANK ONE, AKRON, N.A. (a) " "
BANC ONE AKRON SERVICE CORP. (f) " "
BANK ONE, ATHENS, N.A. (a) " "
ATHENS SERVICE CORP. (m) " "
BANK ONE, CAMBRIDGE, N.A. (a) " "
BANK ONE, CINCINNATI, N.A. (a) " "
BANC ONE CINCINNATI AUTOLEASE CORP. (f) " "
BANK ONE, CLEVELAND, N.A. (a) " "
BANK ONE, COLUMBUS, N.A. (a) " "
BANC ONE INVESTMENT ADVISORS CORP. (f) " "
BANC ONE VEHICLE FINANCE CORP. (f) " "
BOC REALTY, INC. (f) " "
BOC TOLEDO, INC. (f) " "
BOC MIDWEST, INC. (f) " "
BOC FLORIDA, INC. (f) " "
BOC SOUTHERN, INC. (f) " "
BOC AFFILIATES, INC. (f) " "
BANC ONE ACCEPTANCE CORP. (f) " "
BOX LEASING CORP. (f) " "
ICF INVESTMENT CORP. (f) " "
BANC ONE COMPENSATION SERVICES CORP. (80%) (f) " "
29160 CENTER RIDGE CO., INC. (f) " "
MARIETTA HOTEL CO. (f) " "
GULF SHORES CONDOMINIUMS (f) " "
MAUMEE RIVER HOTEL CORP. (f) " "
BANK ONE, COSHOCTON, N.A. (a) " "
BANK ONE, DAYTON, N.A. (a) " "
BANC ONE DAYTON SERVICE CORP. (f) " "
BANK ONE, DOVER, N.A. (a) " "
BANK ONE, EAST LANSING (c) " "
BANK ONE, FENTON, N.A. (a) " "
BANK ONE, FREMONT, N.A. (a) " "
BANK ONE LIMA, N.A. (a) " "
BANC ONE WAPAKONETA SERVICE CORP. (e) " "
BANK ONE, MARION (b) " "
BANK ONE, MANSFIELD (b) " "
BANC ONE TRAVEL CORP. (f) " "
BANK ONE, MARIETTA, N.A. (99.99%) (a) " "
BANK ONE, PORTSMOUTH, N.A. (a) " "
BANK ONE, SIDNEY, N.A. (a) " "
BANK ONE, STEUBENVILLE, N.A. (a) " "
BANC ONE LOAN SERVICES CORP. (k) " "
BANK ONE, STURGIS (c) " "
</TABLE>
- 1 -
<PAGE> 2
<TABLE>
<CAPTION>
JURISDICTION OF NAME IN WHICH
INCORPORATION OR BUSINESS IS
NAME OF SUBSIDIARY ORGANIZATION CONDUCTED
- ------------------------------ ---------------- --------------
<S> <C> <C>
BANK ONE OHIO TRUST COMPANY, N.A. (a) " "
BANK ONE, YOUNGSTOWN, N.A. (a) " "
BANC ONE FINANCIAL SERVICES CORP.
OF PENNSYLVANIA (k) " "
BANK ONE, YPSILANTI, N.A. (a) " "
BANK ONE, LEXINGTON, N.A. (a) " "
FIRST SECURITY FINANCIAL SERVICES CORP.
OF KENTUCKY (d) " "
FIRST PROPERTY DEVELOPMENT CO. (d) " "
SECURITY PROPERTY DEVELOPMENT CO. (d) " "
BANC ONE ARIZONA CORPORATION (g) " "
BANK ONE, FRESNO, N.A. (a) " "
CALIFORNIA VALLEY SECURITIES, INC. (y) " "
BANK ONE, ARIZONA, N.A. (a) " "
AMERICAN INSURANCE AGENCY, INC. (g) " "
ARIZONA TRUST DEED CORP. (g) " "
BANC ONE ARIZONA LEASING CORP. (g) " "
BANC ONE ARIZONA INVESTMENT
SERVICES CORP. (g) " "
BANCSTAR, INC. (g) " "
SUN COUNTRY FINANCIAL CORP. (g) " "
SUN COUNTRY LEASING CORP. (g) " "
VALLEY BANK BUILDING, INC. (g) " "
VALLEY NATIONAL FINANCIAL
SERVICES CO. (g) " "
VALLEY NATIONAL INVESTORS, INC. (g) " "
WESTERN SECURITY LIFE
INSURANCE CO. (g) " "
BANK ONE, UTAH, N.A. (a) " "
CONCHO INSURANCE AGENCY, INC. (g) " "
BANC ONE ARIZONA INVESTMENT
CORP. (g) " "
BANC ONE COLORADO CORPORATION (l) " "
BANK ONE, WESTERN COLORADO, N.A. (a) " "
BANK ONE, BOULDER, N.A. (a) " "
BANK ONE, COLORADO SPRINGS, N.A. (a) " "
BANK ONE, FORT COLLINS/LOVELAND, N.A. (a) " "
BANK ONE, GREELEY, N.A. (a) " "
BANK ONE, DENVER, N.A. (a) " "
AFFILIATED BANKS BUILDING CO. (l) " "
AFFILIATED BANKS SERVICE CO. (l) " "
FIRST NATIONAL BANK OF MONTROSE (a) " "
BANC ONE ILLINOIS CORPORATION (q) " "
BANK ONE, PEORIA (r) " "
JEFFERSON INVESTMENT SERVICES, INC. (q) " "
</TABLE>
- 2 -
<PAGE> 3
<TABLE>
<CAPTION>
JURISDICTION OF NAME IN WHICH
INCORPORATION OR BUSINESS IS
NAME OF SUBSIDIARY ORGANIZATION CONDUCTED
- ------------------------------ ---------------- -------------
<S> <C> <C>
BANK ONE, BLOOMINGTON-NORMAL (r) " "
BANK ONE, ROCKFORD, N.A. (a) " "
NORTHERN ILLINOIS DEVELOPMENT
CORP. (30%) (q) " "
FIRST ROCKFORD COMMUNITY
DEVELOPMENT CORP. (q) " "
BANK ONE, SPRINGFIELD (r) " "
MCU CORPORATION (q) " "
BANK ONE, CHAMPAIGN-URBANA (r) " "
BANK ONE, CHICAGO, N.A. (a) " "
FIRST BANCORP CREDIT LIFE
INSURANCE CO. (g) " "
BANC ONE INDIANA CORPORATION (e) " "
AMERICAN FLETCHER REALTY CORPORATION (e) " "
BANK ONE, BLOOMINGTON, N.A. (a) " "
BANK ONE, CRAWFORDSVILLE, N.A. (a) " "
BANK ONE, INDIANAPOLIS, N.A. (a) " "
BANC ONE EQUIPMENT FINANCE, INC. (e) " "
BANK SERVICE CORP. OF INDIANA (33-1/3%) (e) " "
BANC ONE INDIANAPOLIS AUTO LEASE, INC. (e) " "
BIL INTERNATIONAL HOLDINGS, INC. (e) " "
BO-UA FSC, INC. (e) " "
BO-FE FSC, INC. (e) " "
BANK ONE, LAFAYETTE, N.A. (a) " "
BANK ONE, MARION, INDIANA, N.A. (a) " "
BANK ONE, MERRILLVILLE, N.A. (a) " "
BANK ONE, RENSSELLAER, N.A. (a) " "
BANK ONE, RICHMOND, N.A. (a) " "
BANC ONE TEXAS CORPORATION (f) " "
BANC ONE TEXAS SERVICE CORPORATION (f) " "
BANK ONE, TEXAS, N.A. (a) " "
FREEDOM BANK, GLEN ROSE, N.A. (95.5%) (a) " "
SOUTHMORE-TATAR CO. (p) " "
PSB LAND CO., INC. (p) " "
ANBORE, INC. (p) " "
BSW AIRCRAFT LEASING CORP. (p) " "
CITY INVESTMENT CO. (p) " "
COMMONWEALTH ASSETS, INC. (p) " "
GREATER SOUTHWEST REALTY CORP. (p) " "
HOUSTON MBH NO. 1, INC. (p) " "
HOUSTON MBH NO. 2, INC. (p) " "
HOUSTON MBH NO. 3, INC. (p) " "
PRESTON FORUM HOLDINGS, INC. (p) " "
</TABLE>
- 3 -
<PAGE> 4
<TABLE>
<CAPTION>
JURISDICTION OF NAME IN WHICH
INCORPORATION OR BUSINESS IS
NAME OF SUBSIDIARY ORGANIZATION CONDUCTED
- ------------------------------ ---------------- -------------
<S> <C> <C>
LAWNWOOD LAND CO. (p) " "
MBA ENERGY, INC. (p) " "
MLEASE CORP. (p) " "
MORROW ENTERPRISES ASSETS, INC. (p) " "
MBH RAILCARS, INC. (p) " "
OREGON, INC. (p) " "
MBANK ENERGY MANAGEMENT, INC. (p) " "
OREGON LOUISIANA, INC. (p) " "
OREGON RAT I, INC. (p) " "
OREGON RAT II, INC. (p) " "
OREGON RAT III, INC. (p) " "
OREGON TEXAS ONE, INC. (p) " "
OREGONE WEST, INC. (p) " "
CP-1, INC. (p) " "
CP-2, INC. (p) " "
METROPOLITAN HOLDINGS, INC. (p) " "
BANC ONE CARD SERVICES CORP. (h) " "
TEXAS INVESTMENT HOLDING CORP. (p) " "
BANC ONE TEXAS LEASING CORP. (p) " "
TEAM BROKERAGE, INC. (p) " "
TEAM LIFE INSURANCE CO. (p) " "
TEAMVEST, INC. (p) " "
TEAM BANK SERVICES, INC. (p) " "
BAY OPERATING CO., INC. (p) " "
POST OAK OPERATING, INC. (p) " "
WEST U21, INC. (p) " "
FREER PROPERTIES, INC. (p) " "
INDIAN PRODUCTION CO., INC. (p) " "
TAB ASSETS CORP. (p) " "
TEXAS LYRIC CORP. (p) " "
12603 SOUTHWEST FREEWAY, INC. (p) " "
TEXAS ASSET ACQUISITION CORP. (p) " "
BANC ONE WEST VIRGINIA CORPORATION (m) " "
BANK ONE, WEST VIRGINIA, CHARLESTON, N.A. (a) " "
BANK ONE, WEST VIRGINIA, ST. ALBANS, N.A. (a) " "
BANK ONE, WEST VIRGINIA, BECKLEY, N.A. (a) " "
BANK ONE, WEST VIRGINIA, LOGAN, N.A. (a) " "
BANK ONE, WEST VIRGINIA, WILLIAMSON, N.A. (a) " "
BANK ONE, WEST VIRIGNIA, BOONE, N.A. (a) " "
BANK ONE, WEST VIRGINIA, NICHOLAS COUNTY, INC. (x) " "
BANK ONE, WEST VIRGINIA, BUCKHANNAN, N.A. (a) " "
BANK ONE, WEST VIRGINIA, LINCOLN, N.A. (a) " "
BANK ONE, WEST VIRGINIA, WHEELING, N.A. (a) " "
BANK ONE, WEST VIRGINIA, NEWS MARTINSVILLE, N.A. (a) " "
BANK ONE, WEST VIRGINIA, HUNTINGTON, N.A. (a) " "
BANK ONE, WEST VIRGINIA, CLARKSBURG, N.A. (a) " "
BANK ONE, WEST VIRGINIA, PHILIPPI, N.A. (a) " "
BANK ONE, WEST VIRGINIA, WAYNE COUNTY, INC. (x) " "
BANK ONE, PIKEVILLE, N.A. (a) " "
</TABLE>
- 4 -
<PAGE> 5
<TABLE>
<CAPTION>
JURISDICTION OF NAME IN WHICH
INCORPORATION OR BUSINESS IS
NAME OF SUBSIDIARY ORGANIZATION CONDUCTED
- ------------------------------ ---------------- -------------
<S> <C> <C>
BANK ONE, WEST VIRGINIA, CHARLES TOWN, INC. (x) " "
RELIABLE MORTGAGE CO. (m) " "
FIRST NATIONAL REALTY CO., INC. (m) " "
HOBBS REALTY CORP., INC. (m) " "
BANC ONE OKLAHOMA CORPORATION (z) " "
THE FRIENDLY BANK OF OKLAHOMA CITY (aa) " "
THE CENTRAL BANK OF OKLAHOMA CITY (aa) " "
CENTRAL BUILDING CORPORATION (z) " "
CENTRAL FINANCIAL LIFE INSURANCE CO. (g) " "
BANC ONE WISCONSIN CORPORATION (j) " "
BANC ONE BUILDING MANAGEMENT CORPORATION (j) " "
BANK ONE, STEVENS POINT, N.A. (a) " "
STEVENS POINT INVESTMENT HOLDING CORP. (n) " "
BANK ONE, ANTIGO (i) " "
ANTIGO INVESTMENT HOLDING COMPANY (n) " "
BANK ONE, BEAVER DAM (i) " "
BEAVER DAM INVESTMENT HOLDING COMPANY (n) " "
BANK ONE, ELKHORN, N.A. (n) " "
ELKHORN INVESTMENT HOLDING COMPANY (n) " "
BANC ONE INTERNATIONAL SERVICES CORPORATION (j) " "
BANK ONE, JANESVILLE, N.A. (a) " "
JANESVILLE INVESTMENT HOLDING CO. (n) " "
BANK ONE, MADISON (i) " "
MADISON INVESTMENT HOLDING CO. (n) " "
BANK ONE, MILWAUKEE, N.A. (a) " "
BANC ONE VENTURE CORP. (j) " "
MILWAUKEE INVESTMENT HOLDING CO. (n) " "
BANC ONE WISCONSIN BANKCARD CORP. (j) " "
BANC ONE WISCONSIN INVESTMENT
SERVICES CORP. (j) " "
BANC ONE MEZZANINE CAPITAL CORP. (j) " "
BANC ONE WISCONSIN LEASING CORP. (j) " "
BOMOREO, INC. (j) " "
BANK ONE, MONROE (l) " "
MONROE INVESTMENT HOLDING COMPANY (n) " "
BANK ONE, RACINE, N.A. (a) " "
RACINE INVESTMENT HOLDING COMPANY (n) " "
BANK ONE, WEST BEND (l) " "
WEST BEND INVESTMENT HOLDING CORP. (n) " "
BANC ONE INSURANCE SERVICES CORP. (j) " "
HIGHWAY "P" MOTEL, INC. (j) " "
BANK ONE WISCONSIN TRUST CO., N.A. (a) " "
WITRUST INVESTMENT HOLDING CO. (j) " "
BANK ONE, APPLETON, N.A. (a) " "
APPLETON INVESTMENT HOLDING CO. (n) " "
BANK ONE, FOND DU LAC (l) " "
FOND DU LAC INVESTMENT HOLDING CO. (n) " "
</TABLE>
- 5 -
<PAGE> 6
<TABLE>
<CAPTION>
JURISDICTION OF NAME IN WHICH
INCORPORATION OR BUSINESS IS
NAME OF SUBSIDIARY ORGANIZATION CONDUCTED
- ------------------------------ ---------------- -------------
<S> <C> <C>
BANK ONE, GREEN BAY (l) " "
GREEN BAY INVESTMENT HOLDING CO. (n) " "
BANK ONE, OSHKOSH, N.A. (99.53%) (a) " "
OSHKOSH INVESTMENT HOLDING CO. (n) " "
BANK ONE, KENOSHA, N.A. (a) " "
FNBK INVESTMENTS, INC. (j) " "
BANC ONE DIVERSIFIED SERVICES CORPORATION (f) " "
BANC ONE SECURITIES CORP. (f) " "
FIRST SECURITY BROKERAGE
CO. OF KENTUCKY (d) " "
BANC ONE COMMUNITY DEVELOPMENT CORP. (f) " "
BANC ONE COMMUNITY
DEVELOPMENT/WISCONSIN CORP. (f) " "
FINANCE ONE CORP. (f) " "
BANC ONE FLORIDA CORP. (f) " "
BANC ONE LEASING CO. OF FLORIDA (f) " "
BANC ONE LEASING CORP. (f) " "
FM LEASING CORP. (l) " "
BANC ONE MORTGAGE CORP. (h) " "
BANC ONE REALTY COLUMBUS CORP. (f) " "
BANC ONE SERVICES CORP. (f) " "
BANC ONE FINANCIAL CARD
SERVICES CORP. (f) " "
BANC ONE SERVICES FSC-I, INC. (cc) " "
ELECTRONIC PAYMENT SERVICES,
INC. (30.99996%) (h) " "
BUYPASS CORP. (w) " "
MONEY ACCESS SERVICE, INC. (h) " "
MAC NEW ENGLAND, INC. (u) " "
METROTELLER SYSTEMS, INC. (v) " "
TRI-STATE NETWORK, INC. (k) " "
GREEN MACHINE NETWORK CORP. (f) " "
BANC ONE FINANCIAL SERVICES, INC. (e) " "
GUARDIAN AGENCY, INC. (e) " "
GUARDIAN AGENCY OF
BLOOMINGTON, INC. (e) " "
GUARDIAN AGENCY OF
GREENCASTLE, INC. (e) " "
GUARDIAN AGENCY OF
DELPHI, INC. (e) " "
GUARDIAN AGENCY OF
FORT WAYNE, INC. (e) " "
GUARDIAN AGENCY OF
LEBANON, INC. (e) " "
GUARDIAN AGENCY OF
RUSHVILLE, INC. (e) " "
GUARDIAN AGENCY OF
VALPARAISO, INC. (e) " "
</TABLE>
- 6 -
<PAGE> 7
<TABLE>
<CAPTION>
JURISDICTION OF NAME IN WHICH
INCORPORATION OR BUSINESS IS
NAME OF SUBSIDIARY ORGANIZATION CONDUCTED
- ------------------------------ ---------------- -------------
<S> <C> <C>
BENEFICIAL INSURANCE
AGENCY, INC. (e) " "
BANC ONE CONSUMER DISCOUNT CO.,
A NON-BANKING AFFILIATE OF
BANC ONE CORPORATION (e) " "
BANC ONE FINANCIAL SERVICES
OF MINNESOTA, INC. (s) " "
BANC ONE CAPITAL CORP. (f) " "
BANC ONE CAPITAL PARTNERS CORP. (f) " "
BANC ONE CAPITAL PARTNERS II CORP. (f) " "
BANC ONE CAPITAL PARTNERS III CORP (f) " "
BANC ONE CAPITAL PARTNERS II
LIMITED PARTNERSHIP (80%) (bb) " "
BANC ONE LIFE INSURANCE CO. (g) " "
FIRST COLORADO BANKSHARES INSURANCE CO. (l) " "
AFFILIATED BANKSHARES INSURANCE AGENCY, INC. (l) " "
BOCC FUNDING CORP. (f) " "
BANC ONE MANAGEMENT AND
CONSULTING CORP. (f) " "
BANC ONE NEW HAMPSHIRE
ASSET MANAGEMENT CORP. (f) " "
BONNET RESOURCES CORP. (f) " "
PINE VALLEY RESOURCES CORP. (f) " "
TARFIVE, INC. (p) " "
TARSIX, INC. (p) " "
JR-1, INC. (p) " "
JR-2, INC. (p) " "
REALTY ALLIANCE OF TEXAS, LTD.
(PINE VALLEY IS GENERAL PARTNER
AND BANK ONE, TEXAS, N.A. IS
A LIMITED PARTNER) (t) " "
TARTWO, INC. (p) " "
TARTHREE, INC. (p) " "
TARFOUR, INC. (p) " "
SUBSIDIARY CONSULTANTS, INC. (p) " "
BANC ONE AMARYLLIS ASSET
MANAGEMENT CORP. (f) " "
BANC ONE BETA ASSET
MANAGEMENT CORP. (f) " "
FAMCO SERVICES, INC. (p) " "
FAMCO SERVICES II, INC. (p) " "
FAMCO SERVICES III, INC. (p) " "
BANC ONE BETA CORPORATION (f) " "
PREMIER ACQUISITION CORPORATION (f) " "
STERLING ASSURANCE COMPANY (f) " "
</TABLE>
- 7 -
<PAGE> 8
<TABLE>
<CAPTION>
JURISDICTION OF NAME IN WHICH
INCORPORATION OR BUSINESS IS
NAME OF SUBSIDIARY ORGANIZATION CONDUCTED
- ------------------------------ ---------------- -------------
<S> <C> <C>
AARON ACQUISITION CORPORATION (d) " "
BANC ONE INTERIM CORPORATION (f) " "
BANC ONE CAPITAL HOLDINGS CORPORATION (f) " "
<FN>
_______________________
(a) A national banking association
(b) An Ohio banking corporation
(c) A Michigan banking corporation
(d) A Kentucky corporation
(e) An Indiana corporation
(f) An Ohio corporation
(g) An Arizona corporation
(h) A Delaware corporation
(i) A Wisconsin banking corporation
(j) A Wisconsin corporation
(k) A Pennsylvania corporation
(l) A Colorado corporation
(m) A West Virginia corporation
(n) A Nevada corporation
(o) A Louisiana corporation
(p) A Texas corporation
(q) An Illinois corporation
(r) An Illinois banking corporation
(s) A Minnesota corporation
(t) A Texas limited partnership
(u) A New Hampshire corporation
(v) A New York corporation
(w) A Georgia corporation
(x) A West Virginia banking corporation
(y) A California corporation
(z) An Oklahoma corporation
(aa) An Oklahoma banking corporation
(bb) An Ohio partnership
(cc) A U.S. Virgin Islands corporation
</TABLE>
- 8 -
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the registration statements
listed below of BANC ONE CORPORATION of our report dated February 21, 1994 on
our audit of the consolidated financial statements of BANC ONE CORPORATION and
Subsidiaries as of December 31, 1993 and 1992, and for the years ended December
31, 1993, 1992 and, 1991, which report is included in this Annual Report on
Form 10-K.
Registration Statements on Form S-8
Registration Numbers:
..33-61760
..33-61758
..33-60424
..33-50117
..33-10822
..33-20990
..33-27849
..33-34294
..33-37400
..33-40041
..33-45473
..33-46189
..33-53752
..33-54100
..33-55172
..33-55174
COOPERS & LYBRAND
Columbus, Ohio
March 9, 1994
