<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of report (Date of earliest event reported): October 20, 1997
BANC ONE CORPORATION
(Exact Name of Registrant as Specified in Charter)
Ohio
(State or Other Jurisdiction of Incorporation)
1-8552 31-0738296
(Commission File Number) (IRS Employer Identification No.)
100 East Broad Street, Columbus, Ohio 43271
(Address of Principal Executive Offices)(Zip Code)
Registrant's telephone number, including area code: (614) 248-5944
N/A
(Former Name or Former Address, If Changed Since Last Report)
<PAGE> 2
ITEM 5. OTHER EVENTS
A. Earnings and Dividend Announcement.
On October 21, 1997, BANC ONE CORPORATION ("BANC ONE") issued a press
release announcing its earnings for the three-month and nine-month periods
ended September 30, 1997. A copy of such press release is filed as Exhibit 99.1
hereto and is incorporated by reference herein.
On October 21, 1997, BANC ONE's Board of Directors declared a fourth
quarter cash dividend of $0.38 per shares on BANC ONE common stock that is
payable on January 2, 1998 to shareholders of record as of the close of
business on December 15, 1997. BANC ONE's Board of Directors also declared a
cash dividend of $0.875 per share on BANC ONE's Series C $3.50 Cumulative
Convertible Preferred Stock that is payable on December 31, 1997 to
shareholders of record as of the close of business on December 15, 1997.
B. Proposed Merger with First Commerce Corporation.
On October 20, 1997, BANC ONE CORPORATION ("BANC ONE") entered into an
Agreement and Plan of Merger (the "Merger Agreement") with First Commerce
Corporation, a Louisiana corporation ("FCC"), and Delta Acquisition
Corporation, a wholly owned subsidiary of BANC ONE ("Delta"), pursuant to which
Delta will, subject to the conditions and upon the terms stated therein, merge
with and into FCC (the "Merger"). FCC will be the surviving corporation in the
Merger. In accordance with the Merger Agreement, each share of the common
stock, $5.00 par value, of FCC ("FCC Common Stock") outstanding immediately
prior to the effective time of the Merger (the "Effective Time") will at the
Effective Time be converted into the right to receive 1.28 shares of the common
stock, no par value, of BANC ONE ("BANC ONE Common Stock").
Consummation of the transactions contemplated by the Merger Agreement
is subject to the terms and conditions contained in the Merger Agreement,
including, among other things, approval of the Merger by FCC shareholders and
the receipt of certain regulatory approvals. The Merger is intended to
constitute a reorganization under Section 368(a) of the Internal Revenue Code
and to be accounted for as a pooling of interests. The Merger Agreement is
filed as Exhibit 99.2 hereto and its terms are incorporated herein by
reference.
Simultaneously with their execution and delivery of the Merger
Agreement, BANC ONE and FCC entered into a stock option agreement (the "Stock
Option Agreement") pursuant to which FCC granted BANC ONE the right, upon the
terms and subject to the conditions set forth therein, to purchase up to
9,689,000 shares of FCC Common Stock at a price of $64.00 per share. The Stock
Option Agreement is filed as Exhibit 99.3 hereto and its terms are incorporated
herein by reference.
A copy of the press release, dated October 20, 1997, issued by BANC
ONE relating to the Merger is filed as Exhibit 99.4 hereto and is incorporated
herein by reference.
2
<PAGE> 3
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND
EXHIBITS
(a) Financial Statements
None. The financial statements included in this report are
not required to be filed as part of this report.
(b) Pro Forma Financial Information
None.
(c) Exhibits
Exhibit 99.1 BANC ONE CORPORATION Press Release dated October
21, 1997 titled "Record Credit Card Growth and
Declining Charge-Offs Result in Record Third
Quarter and Nine Month Operating Earnings at
BANC ONE."
Exhibit 99.2 Agreement and Plan of Merger dated as of October
20, 1997 between First Commerce Corporation,
Delta Acquisition Corporation and BANC ONE
CORPORATION.
Exhibit 99.3 Option Agreement dated as of October 20, 1997 by
and between First Commerce Corporation and BANC
ONE CORPORATION.
Exhibit 99.4 BANC ONE CORPORATION Press Release dated October
20, 1997 titled "First Commerce in Louisiana
to Join BANC ONE CORPORATION."
3
<PAGE> 4
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
BANC ONE CORPORATION
(Registrant)
Date: October 29, 1997 By: /s/ Bobby L. Doxey
-------------------------
Bobby L. Doxey
Controller
4
<PAGE> 1
Exhibit 99.1
BANC ONE CORPORATION
100 East Broad Street
Columbus, Ohio 43271-0240
=================================
News Release
=================================
For further information contact:
Jay S. Gould (614) 248-0189
[LOGO] Jacqueline R. Spak (614) 248-1280
John Russell (614) 248-5989
FOR RELEASE: October 21, 1997
RECORD CREDIT CARD GROWTH AND DECLINING CHARGE-OFFS
RESULT IN RECORD THIRD QUARTER AND NINE MONTH OPERATING
EARNINGS AT BANC ONE
---------------------
BANC ONE CORPORATION, Columbus, Ohio (NYSE:ONE) reported earnings for the 1997
third quarter and nine months of $433.2 million ($0.73 per common share) and
$830.9 million ($1.40 per common share), respectively. This compares with
$412.8 million ($0.69 per common share) and $1.231 billion ($2.04 per common
share) in the same year-ago periods.
Adjusting for the impact of the 1997 first quarter announced accounting
adjustment by First USA related to the recognition of securitization gains,
third quarter operating earnings would have been a record $480.2 million, up 16
percent, or $0.81 per common share, up 17 percent, from the year-ago quarter.
On the same basis, and excluding the 1997 second quarter charges related to the
acquisition of First USA and other strategic initiatives, nine month operating
earnings would have been a record $1.3 billion, up 6 percent, or $2.21 per
common share, up 8 percent, from the same prior-year period.
John B. McCoy, Chairman and Chief Executive Officer of BANC ONE CORPORATION,
said, "This was a spectacular quarter for BANC ONE. Not only did we produce
strong earnings, but the operating ratios improved in most areas. We have
established great momentum and energy in loan growth, particularly in the
credit card business under First USA's management. We are also very much
encouraged by the decline in credit losses. We expect continued strong
performance for the remainder of 1997 and throughout 1998. We are also pleased
with the announcement that was made on October 20 that First Commerce in
Louisiana plans to join BANC ONE in early 1998."
Earnings strength was fueled by continued strong managed loan growth, a wider
managed net interest margin, and strong revenue growth which was partially
offset by higher expenses associated primarily with business development.
Average managed loans and leases increased during the 1997 third quarter at an
annualized rate of 13 percent. Managed loans include the total of on-balance
sheet loans, loans sold with servicing retained excluding securitized
mortgages, and loans held for sale. Average managed consumer loans, excluding
credit cards, increased at an 11 percent annualized rate.
During the 1997 third quarter, average managed credit card loans increased at
an annualized rate of 27 percent with a record 2.3 million
-more-
<PAGE> 2
BANC ONE
Page 2
new credit card accounts opened, exceeding the previous record of 2.2 million
set last quarter. At September 30, 1997, managed credit cards totaled $38.9
billion, up $2.8 billion from the end of the prior quarter with Cardmembers
totaling 40.4 million, up 2.6 million.
The managed net interest margin in the 1997 third quarter increased to 6.35
percent from 6.25 percent in the second quarter. This resulted from a
combination of factors, but primarily was attributable to a better earning
asset mix reflecting the planned sale of low-margin investment securities and
generation of higher-margin consumer and credit card loans.
Noninterest income totaled $1.1 billion, up $272.4 million from the 1997 second
quarter reflecting growth in a number of fee income businesses, but primarily
credit card servicing income and venture capital gains.
Noninterest expense totaled $1.5 billion, up $148.4 million from the second
quarter after excluding the second quarter's one-time charges primarily
reflecting higher business growth and development costs.
Net charge-offs during the 1997 third quarter totaled $289.4 million
representing 1.34 percent of average loans and leases, down from $293.8 million
or 1.42 percent in the second quarter. Net charge-offs on managed credit card
loans declined to 5.78 percent during the 1997 third quarter from 6.22 percent
in the prior quarter. Managed credit card delinquencies over 90 days declined
to 2.02 percent at September 30, 1997 from 2.11 percent at June 30, 1997.
Nonperforming assets at September 30, 1997 represented 0.58 percent of
period-end loans and leases, little changed from the 0.53 percent level at the
end of the second quarter. The September 30, 1997 allowance for loan and lease
losses, expressed as a percent of period-end loans and leases, was unchanged at
1.62 percent.
Capital levels remained strong. The September 30, 1997 total equity to assets
ratio was 8.92 percent, up 39 basis points from June 30, 1997, with the
tangible common equity to tangible assets ratio at 7.92 percent, up 40 basis
points.
BANC ONE CORPORATION had total managed assets of $142.9 billion, total assets
of $113.1 billion, and common equity of $9.9 billion at September 30, 1997.
BANC ONE operates banking centers in 12 states. BANC ONE also owns several
additional corporations that engage in a full range of financial services.
Information about BANC ONE's financial results and its products and services
can be accessed on the Internet at: http://www.bankone.com; through InvestQuest
at: http://www.investquest.com; or through Fax-on-demand at: (614) 844-3860.
#####
<PAGE> 3
For further information contact:
Jay S. Gould (614) 248-0189
Jacqueline R. Spak (614) 248-1280
1997 THIRD QUARTER
PERFORMANCE DISCUSSION AND FINANCIAL SUPPLEMENT
This discussion and analysis contains forward-looking statements that are
provided to assist in the understanding of anticipated future financial
performance. However, such performance involves risks and uncertainties which
may cause actual results to differ materially from those in such statements.
For a discussion of certain factors that may cause such forward-looking
statements to differ materially from actual results, see the 1996 Form 10-K.
DISCUSSION
Reported 1997 third quarter earnings were $433.2 million, or $0.73 per common
share, up 5 percent and 6 percent, respectively, from results in the third
quarter of last year of $412.8 million, or $0.69 per common share. For the
first nine months of 1997 reported earnings were $830.9 million or $1.40 per
common share, down from results in the same year-ago period of $1,230.8 million
or $2.04 per common share.
Excluding the impact of the previously announced accounting adjustment by First
USA related to the recognition of securitization gains, earnings in the 1997
third quarter would have been a record $480.2 million or $0.81 per common
share, up 16 percent and 17 percent, respectively, from the year-ago quarter.
On the same basis, and excluding the 1997 second quarter charges related to the
acquisition of First USA and other strategic initiatives, nine month earnings
would have been a record $1,306.7 million or $2.21 per common share, up 6
percent and 8 percent, respectively, from the same prior-year periods.
SUMMARY OF RESULTS - 1997 THIRD QUARTER
Performance highlights compared with the 1997 second quarter:
* Strong revenue growth.
* Solid managed loan growth.
* Higher managed net interest margin.
* Declining net charge-offs.
* Higher discretionary expenses.
Key quarterly and year-to-date performance ratios are listed below in Table 2.
Page 1
<PAGE> 4
TABLE 2 - KEY PERFORMANCE RATIOS
<TABLE>
<CAPTION>
Three Months Ending
-------------------
9/30/97 6/30/97 9/30/96
------- ------- -------
<S> <C> <C> <C>
Return on average assets (1) 1.51% 1.23% 1.58%
Return on average common equity (1) 17.66 13.95 17.49
Period end total equity to assets 8.92 8.53 8.92
Period end tangible common equity
to net assets 7.92 7.52 7.76
</TABLE>
(1) 1997 second quarter amounts exclude the $467.4 million pre-tax
($328.8 million after-tax) restructuring and merger-related charges.
"REPORTED" VS. "MANAGED" DISCUSSIONS
For funding and risk management purposes, BANC ONE securitizes loans and leases,
primarily in support of First USA's credit card activities. When securitized,
the loans are removed from the balance sheet with related net revenue derived
from these loans moving from net interest income and loan loss provision expense
to the noninterest income loan servicing category. This complicates the
understanding of underlying trends in net interest income, net interest margins,
noninterest income, as well as the underlying growth rates of balance sheet
"reported" loans and leases.
Therefore, to better understand underlying trends, it is helpful to review
selected results on a "managed" basis which adds to "reported" data on loans and
leases and loans held for sale, data on "securitized" loans. The following net
interest income and margin, loan growth, and credit card performance discussions
review "managed" results where this better characterizes the underlying trends
and performance.
REVENUE
During the 1997 third quarter revenue generation was strong. Revenue consists
of tax equivalent net interest income plus noninterest income. Revenue totaled
$2,479.1 million in the 1997 third quarter, up $282.4 million from second
quarter reflecting, among other activity, the beneficial impact of significant
securitization volume and venture capital results. For the first nine months of
1997, total revenue was $6,854.6 million, up $647.2 million or 10 percent from
the same prior-year period.
NET INTEREST INCOME AND MARGIN
Taxable equivalent net interest income in the 1997 third quarter was $1,376.2
million, up $10.0 million from the second quarter. Reported average earning
assets in the 1997 third quarter increased $423 million reflecting strong
growth in average loans and leases, which was partially
Page 2
<PAGE> 5
offset by the planned sales of investment securities. Refer to Table 3 for net
interest margin detail.
The managed net interest margin in the 1997 third quarter increased to 6.35
percent from 6.25 percent in the 1997 second quarter. This reflected a
combination of factors, but primarily the positive impact of the planned sale
of lower-margin investment securities, as well as the generation and repricing
of higher-margin managed consumer and credit card loans. The managed net funds
function, which represents the managed net interest margin less the provision
for loan losses expressed as a percent of average loans and leases, also
improved during the 1997 third quarter increasing to 4.43 percent from 4.32
percent in the second quarter after excluding that quarter's impact of the
$130.1 million provision charge associated with the First USA acquisition.
Compared with the year-ago quarter, the managed net interest margin and managed
net funds function increased 25 basis points and 10 basis points, respectively.
In contrast, the reported net interest margin declined slightly to 5.37 percent
in the 1997 third quarter from 5.41 percent in the prior quarter. Though the
change between quarters was also positively impacted by the planned sale of
lower-margin investment securities noted above, this benefit was more than
offset by the negative impact of the securitization of higher-margin credit
card loans, as well as significant growth in credit card balances at an
introductory rate late in the 1997 second quarter and throughout the 1997 third
quarter. Introductory rate loans typically make up the majority of the growth
of newly originated credit card loans and remain on the balance sheet until
securitized. The reported net funds function also declined slightly from the
1997 second quarter level after excluding that quarter's impact of the one-time
provision charge.
TABLE 3 - NET INTEREST MARGIN ANALYSIS
<TABLE>
<CAPTION>
($ in millions) Three Months Ending Three Months Ending
------------------------------- -------------------
9/30/97 6/30/97 Change 9/30/96 Change
------- ------- ------ ------- ------
<S> <C> <C> <C> <C> <C>
MANAGED
-------
Net interest margin 6.35% 6.25% 10 bp 6.10%(e) 25 bp
Net funds function 4.43% 4.32%(1) 11 bp 4.33%(e) 10 bp
REPORTED
--------
Net interest margin 5.37% 5.41% (4) bp 5.43% (6) bp
Net funds function 4.31% 4.36%(1) (5) bp 4.42% (11) bp
</TABLE>
(e) Estimated
(1) Excluding impact of $130.1 million of one-time provision
LOAN GROWTH
Table 4 shows a comprehensive view of trends in total managed loan and lease
growth.
On this basis, average managed loans and leases increased during the 1997 third
quarter at an annualized rate of 13 percent, up from 9 percent in the second
quarter. Credit card loan growth
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<PAGE> 6
was particularly strong as average managed loans increased at an annualized rate
of 27 percent. Average managed consumer loans, excluding credit cards, increased
at an 11 percent annualized rate led by solid growth in targeted portfolios such
as home equity loans, secured consumer finance loans, as well as auto leases.
Average wholesale loans increased slightly during the quarter.
TABLE 4 - MANAGED LOAN GROWTH ANALYSIS
<TABLE>
<CAPTION>
($ in billions) Annualized Loan Growth Rates (1)
--------------------------------
3Q97 3Q97 2Q97 1Q97 4Q96
Average vs. vs. vs. vs.
Outstandings 2Q97 1Q97 4Q96 3Q96
------------ ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Wholesale $ 34.1 1.0% 9.5% 5.4% 9.6%
Consumer 39.6 11.0 13.1 12.5 8.8
Credit card 37.6 26.6 3.5 27.3 24.9
----
Total $111.3 12.9% 8.8% 15.1% 14.2%
</TABLE>
(1) Growth rates reflect a restatement of prior periods to conform with
current period presentation; e.g. acquisitions, disposition, loan
purchases/sales, and reclassifications.
NONINTEREST INCOME
Noninterest income totaled $1,102.9 million in the 1997 third quarter, up
$272.4 million from the second quarter reflecting increases in a number of fee
activities. This included a $161.7 million increase in credit card loan
servicing income which was favorably impacted by the securitization of $6.1
billion of credit card receivables during the quarter. This high level of
securitizations does not represent a change in securitization philosophy as
some of the activity reflected an acceleration of issuance from the 1997 fourth
quarter into the third quarter to take advantage of the third quarter's
favorable asset backed securities markets. The all other income category
increased $108.5 million from second quarter levels reflecting a $72.2 million
increase in venture capital results.
Other categories posting increases over 1997 second quarter levels were
investment management and advisory activities ($6.6 million), service charges
on deposit accounts ($2.5 million), and securities brokerage fees ($3.3
million), which were partially offset by declines in mortgage banking income
($1.5 million), insurance ($4.8 million), and investment banking ($1.6
million).
NONINTEREST EXPENSE
Noninterest expense in the 1997 third quarter totaled $1,535.3 million, up
$148.4 million from the second quarter excluding that quarter's $337.3 million
restructuring charge. Salaries and related costs increased $52.6 million
attributable to a number of factors including, business growth throughout the
company as reflected in a 1.7 percent increase in full time equivalent staff
during the quarter, the July 1st timing of annual merit increases to
officer-level employees, and
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commissions related to business development activities including the quarter's
strong venture capital results.
Marketing and development costs increased $44.3 million reflecting a decision
to continue stepped-up marketing activities primarily associated with credit
card business development activities. Outside servicing and processing expense
increased $32.3 million mostly attributable to higher expenses at First USA,
and technology and consulting costs associated with deposit system
implementation and Year 2000-related activities. As anticipated, Project One
implementation costs continued to decline, totaling $29.5 million in the 1997
third quarter, down from $42.9 million in the prior quarter.
LOAN LOSS PROVISION EXPENSE AND CREDIT QUALITY
The provision for loan losses totaled $270.8 million during the 1997 third
quarter, up slightly from the prior quarter after excluding from that quarter
the $130.1 million one-time provision. Net charge-offs in the third quarter
totaled $289.4 million, down $4.4 million from the prior quarter and
represented 1.34 percent of average loans, down from 1.42 percent in the 1997
second quarter.
Table 5 shows net charge-off amounts and ratios expressed as an annualized
percent of average loan balances.
TABLE 5 - NET CHARGE-OFFS
<TABLE>
<CAPTION>
Three Months Ending
-------------------
($ in millions) September 30, 1997 June 30, 1997
------------------ -------------
Amount Percent Amount Percent
------ ------- ------ -------
<S> <C> <C> <C> <C>
Commercial $ 5.4 0.07% $ (1.9) (0.02)%
Real estate 10.1 0.24 9.6 0.25
Consumer (excluding credit card) 67.7 1.30 75.4 1.44
Credit Cards - reported 205.2 5.70 209.9 6.36
Leases 1.0 0.16 0.8 0.13
------ ------
Total $289.4 1.34% $293.8 1.42%
</TABLE>
Loans delinquent 90 days or more at September 30, 1997 totaled $640.8 million
and represented 0.77 percent of period-end loans and leases, up from $494.2
million or 0.58 percent at the end of the second quarter. Commercial loans
accounted for most of this increase and reflected a number of credits in the
process of being renewed where interest was current.
The September 30, 1997 allowance for loan losses represented 1.62 percent of
period-end loans and leases, unchanged from June 30, 1997, and provided
nonperforming loan coverage of 314 percent. Nonperforming assets at September
30, 1997 totaled $485.0 million, or 0.58 percent of period-end loans and
leases, compared with $450.1 million and 0.53 percent, respectively, at June
30, 1997.
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<PAGE> 8
CREDIT CARD PERFORMANCE
During the 1997 third quarter, average managed credit cards totaled $37.6
billion, up $2.5 billion or 27 percent on an annualized basis from the second
quarter. At September 30, 1997, managed credit cards totaled $38.9 billion, up
$2.8 billion from June 30, 1997.
The generation of new credit card business during the 1997 third quarter
remained very strong reflecting a decision to continue stepped-up marketing and
business development activities begun in the second quarter. First USA
continued to refine and strengthen its strategic emphasis on segmentation. In
the partnership area, a number of premier names were signed including Arizona
State, Yale University, University of Florida, University of Kentucky, AAU,
Holiday Inn, and New York Life. This activity contributed to a record 2.3
million new credit card accounts opened during the quarter, of which 2.0
million represented VISA/MasterCard accounts, exceeding the previous record of
2.2 million new accounts set last quarter, of which 1.9 million were
VISA/MasterCard relationships. At the end of the 1997 third quarter Cardmembers
totaled 40.4 million, up 2.6 million from the end of the June quarter.
Credit card asset quality trends improved during the 1997 third quarter and we
remain encouraged about future trends.
During the 1997 third quarter, the net charge-off ratio for the managed credit
card portfolio decreased to 5.78 percent from 6.22 percent in the prior
quarter.
A leading indicator of credit card net charge-offs are trends in delinquency
rates. The over 90 day delinquency rate on managed credit cards declined to
2.02 percent at September 30, 1997 from 2.11 percent at June 30, 1997.
Importantly, this represented the second consecutive quarter of decline from
the 2.39 percent peak at the end of March 1997. The 30 day delinquency rate on
managed credit cards increased to 4.85 percent from 4.76 percent at the end of
September 1997, but remained below the 5.22 percent peak at December 31, 1996.
CAPITAL
Capital levels remained strong. The September 30, 1997 total equity to assets
ratio was 8.92 percent, up 39 basis points from June 30, 1997, with the
tangible common equity to tangible assets ratio at 7.92 percent, up 40 basis
points.
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<PAGE> 9
FIRST COMMERCE CORPORATION ACQUISITION OVERVIEW
TRANSACTION SPECIFICS:
<TABLE>
<S> <C>
Announced: October 20, 1998
Fixed exchange rate: 1.28 shares of ONE for each share of
FCOM; tax free exchange
Shares issued: 55.358 million
Transaction Value: $3.055 billion
Price Multiples: 3.5X book
22.2X '97 FCOM EPS
19.9X '98 FCOM EPS
Anticipated closing: First quarter of 1998
Accounting: Pooling
Restructuring charge: Less than $100 million
Dilution: 1998: Less than 2% with a combination of
expense saves and/or revenue enhances
equivalent to 8% of the combined FCOM and
Bank One Louisiana noninterest expense.
1999: Non-dilutive with a combination of
expense saves and/or revenue enhances
equivalent to 25% of the combined FCOM and
Bank One Louisiana noninterest expense.
Divestitures: Minimal anticipated
</TABLE>
STRATEGIC CONSIDERATIONS
Consistent with our strategy of being one of the top three banks in the markets
we serve. Increases market share to #1 in the state with 27% market share, or
1.5 times greater than #2 Hibernia, and moves us up from #3 or 11% market
share. Results in #1 market share in key metropolitan markets: New Orleans,
Baton Rouge, Lafayette, Monroe, Lake Charles, Alexandria, and Shreveport. This
provides tremendous leverage to expand and grow the business, as well as
increase the operating efficiencies of technological, marketing, and brand
awareness investments.
Consistent with our strategy of acquiring customers as this adds 500,000 new
retail and commercial customers.
Provides a platform for leveraging existing skills, most notably credit card
and retail banking, into an existing market.
###
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<PAGE> 10
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
QUARTERLY RESULTS
- ----------------------------------------------------------------------------------------------------------------------------------
CONSOLIDATED KEY FINANCIAL HIGHLIGHTS September 30, June 30, September 30, Chg from
(millions, except per common share amounts) (unaudited) 1997 1997 1996 Prior Year
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EARNINGS AND DIVIDENDS
Net income $433.2 $15.8 $412.8 4.9%
Net income per common share 0.73 0.02 0.69 5.8%
Dividends per common share (1) 0.38 0.38 0.34 11.8%
KEY PERFORMANCE RATIOS (2)
Return on average assets 1.51% 0.06% 1.58%
Return on average common equity 17.66% 0.51% 17.49%
Return on average total equity 17.46% 0.63% 17.23%
Net interest margin (TE) 5.37% 5.41% 5.43%
Net funds function (TE) 4.31% 3.84% 4.42%
CAPITAL (3)
Tier I capital $8,463.1 $8,421.8 $8,803.6 -3.9%
Total qualifying capital 13,693.4 13,173.3 12,178.6 12.4%
Total risk adjusted assets 99,552.6 102,756.3 91,462.3 8.8%
Tier I capital ratio 8.50% 8.19% 9.63%
Total risk adjusted capital ratio 13.75% 12.82% 13.32%
Leverage ratio 7.59% 7.61% 8.52%
Average total equity to average assets 8.67% 8.90% 9.15%
Tangible common equity to net assets 7.92% 7.52% 7.76%
INTANGIBLES - PERIOD END
Goodwill $751.4 $762.1 $701.0 7.2%
Other intangibles 287.8 299.7 384.8 -25.2%
---------------------------------------------------
Total intangibles $1,039.2 $1,061.8 $1,085.8 -4.3%
COMMON STOCK DATA
Book value per common share $16.96 $16.62 $16.42 3.3%
Price per common share:
High 57.31 50.13 41.38
Low 47.56 39.13 31.25
Close 56.00 48.44 41.00 36.6%
</TABLE>
<TABLE>
<CAPTION>
YEAR TO DATE RESULTS
Nine Months Ended
----------------------------------------------------
CONSOLIDATED KEY FINANCIAL HIGHLIGHTS September 30, September 30, Chg from
(millions, except per common share amounts) (unaudited) 1997 1996 Prior Year
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
EARNINGS AND DIVIDENDS
Net income $830.9 $1,230.8 -32.5%
Net income per common share 1.40 2.04 -31.4%
Dividends per common share (1) 1.14 1.02 11.8%
KEY PERFORMANCE RATIOS (2)
Return on average assets 0.99% 1.58%
Return on average common equity 11.40% 17.61%
Return on average total equity 11.31% 17.33%
Net interest margin (TE) 5.44% 5.43%
Net funds function (TE) 4.20% 4.55%
CAPITAL
Average total equity to average assets 8.75% 9.13%
</TABLE>
(TE) = taxable equivalent
(1) As originally reported
(2) Annualized
(3) September 30, 1997 amounts are calculated based on preliminary data
Page 8
<PAGE> 11
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
QUARTERLY RESULTS
Three Months Ended
------------------------------------------------------
CONSOLIDATED STATEMENT OF INCOME September 30, June 30, September 30, Chg from
1997 1997 1996 Prior Year
(millions, except per common share amounts) (unaudited)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INTEREST INCOME $2,387.1 $2,359.8 $2,179.0 9.6%
INTEREST EXPENSE 1,023.8 1,007.4 902.6 13.4%
-------------------------------------------------------
NET INTEREST INCOME 1,363.3 1,352.4 1,276.4 6.8%
PROVISION FOR CREDIT LOSSES 270.8 395.8 240.3 12.7%
-------------------------------------------------------
Net interest income after provision for credit losses 1,092.5 956.6 1,036.1
NONINTEREST INCOME
Investment management and advisory activities 82.8 76.2 71.8 15.3%
Service charges on deposit accounts 177.3 174.8 165.8 6.9%
Loan processing and servicing income:
Mortgage banking 18.0 19.5 20.5 -12.2%
Credit card and merchant processing fees 44.7 44.5 72.5 -38.3%
Credit card servicing income 468.0 306.3 273.0 71.4%
Other loan servicing income 9.9 6.1 7.4 33.8%
--------------------------------------------------------
Total loan processing and servicing income 540.6 376.4 373.4 44.8%
Securities gains 10.8 17.1 1.6 N/A
Other income:
Insurance 38.5 43.3 31.3 23.0%
Securities brokerage 27.1 23.8 24.4 11.1%
Investment banking 11.5 13.1 6.6 74.2%
Other 214.3 105.8 162.9 31.6%
-------------------------------------------------------
Total other income 291.4 186.0 225.2 29.4%
-------------------------------------------------------
Total noninterest income 1,102.9 830.5 837.8 31.6%
NONINTEREST EXPENSE
Salaries and related costs 618.2 565.6 541.0 14.3%
Net occupancy expense, exclusive of depreciation 53.4 48.9 48.0 11.3%
Equipment expense 36.3 28.9 31.9 13.8%
Taxes other than income and payroll 24.9 25.4 19.7 26.4%
Depreciation 82.3 79.3 69.4 18.6%
Amortization of intangibles 31.8 31.5 34.3 -7.3%
Outside services and processing 225.0 192.7 165.1 36.3%
Marketing and development 244.6 200.3 101.4 141.2%
Communication and transportation 109.6 104.7 96.4 13.7%
Restructuring charges 0.0 337.3 0.0 N/A
Other 109.2 109.6 149.8 -27.1%
-------------------------------------------------------
Total noninterest expense 1,535.3 1,724.2 1,257.0 22.1%
-------------------------------------------------------
INCOME BEFORE INCOME TAXES 660.1 62.9 616.9 7.0%
Provision for income taxes 226.9 47.1 204.1 11.2%
-------------------------------------------------------
NET INCOME $433.2 $15.8 $412.8 4.9%
=======================================================
Net income per common share $0.73 $0.02 $0.69 5.8%
Common shares outstanding - period end (1) 584.8 581.5 568.2 2.9%
Weighted average common shares outstanding 592.3 583.2 592.8 -0.1%
</TABLE>
(1) Net of .7, 0, and 5.6 million treasury shares as of September 30, 1997,
June 30, 1997, and September 30, 1996 respectively.
Page 9
<PAGE> 12
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
YEAR TO DATE RESULTS
Nine Months Ended
-------------------------------------------------------
CONSOLIDATED STATEMENT OF INCOME September 30, September 30, Chg from
1997 1996 Prior Year
(millions, except per common share amounts) (unaudited)
- ------------------------------------------------------------------------------ ---------------------------------------
<S> <C> <C> <C>
INTEREST INCOME $7,071.0 $6,439.3 9.8%
INTEREST EXPENSE 2,997.5 2,646.4 13.3%
------------------- --------------------
NET INTEREST INCOME 4,073.5 3,792.9 7.4%
PROVISION FOR CREDIT LOSSES 938.5 623.1 50.6%
------------------- --------------------
Net interest income after provision for credit losses 3,135.0 3,169.8
NONINTEREST INCOME
Investment management and advisory activities 233.2 202.1 15.4%
Service charges on deposit accounts 518.1 483.8 7.1%
Loan processing and servicing income:
Mortgage banking 57.7 66.4 -13.1%
Credit card and merchant processing fees 127.2 206.7 -38.5%
Credit card servicing income 1,024.3 799.2 28.2%
Other loan servicing income 22.9 18.6 23.1%
------------------- --------------------
Total loan processing and servicing income 1,232.1 1,090.9 12.9%
Securities gains 43.1 7.2 N/A
Other income:
Insurance 123.6 98.4 25.6%
Securities brokerage 69.6 66.8 4.2%
Investment banking 33.9 26.2 29.4%
Other 487.0 391.1 24.5%
------------------- --------------------
Total other income 714.1 582.5 22.6%
------------------- --------------------
Total noninterest income 2,740.6 2,366.5 15.8%
NONINTEREST EXPENSE
Salaries and related costs 1,751.5 1,632.0 7.3%
Net occupancy expense, exclusive of depreciation 153.5 148.0 3.7%
Equipment expense 95.3 92.9 2.6%
Taxes other than income and payroll 73.4 69.5 5.6%
Depreciation 240.3 220.7 8.9%
Amortization of intangibles 93.2 108.5 -14.1%
Outside services and processing 609.2 484.6 25.7%
Marketing and development 574.9 296.5 93.9%
Communication and transportation 308.7 278.1 11.0%
Restructuring charges 337.3 0.0 N/A
Other 331.2 356.2 -7.0%
------------------- --------------------
Total noninterest expense 4,568.5 3,687.0 23.9%
------------------- --------------------
INCOME BEFORE INCOME TAXES 1,307.1 1,849.3 -29.3%
Provision for income taxes 476.2 618.5 -23.0%
------------------- --------------------
NET INCOME $830.9 $1,230.8 -32.5%
=================== ====================
Net income per common share $1.40 $2.04 -31.4%
Weighted average common shares outstanding 585.7 596.2 -1.8%
</TABLE>
Page 10
<PAGE> 13
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
QUARTERLY RESULTS
CONSOLIDATED BALANCE SHEET September 30, June 30, September 30, Chg from
1997 1997 1996 Prior Year
(millions, except per common share amounts) (unaudited)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Cash and due from banks $6,474.6 $6,364.7 $5,401.8 19.9%
Short-term investments 673.0 1,002.1 1,029.0 -34.6%
Loans held for sale 466.0 392.9 471.6 -1.2%
SECURITIES:
Securities held to maturity 723.1 760.1 4,047.7 -82.1%
Securities available for sale 14,704.2 14,405.5 14,568.0 0.9%
----------------------------------------------------
Total securities 15,427.3 15,165.6 18,615.7 -17.1%
LOANS AND LEASES:
Managed 112,514.3 109,429.1 98,792.4 13.9%
Securitized (29,773.3) (25,229.0) (22,208.1) 34.1%
----------------------------------------------------
Total loans and leases - reported 82,741.0 84,200.1 76,584.3 8.0%
Allowance for credit losses (1,343.6) (1,362.2) (1,131.5) 18.7%
----------------------------------------------------
Net loans and leases 81,397.4 82,837.9 75,452.8 7.9%
Other assets:
Bank premises and equipment, net 1,832.0 1,833.1 1,800.5 1.7%
Interest earned, not collected 902.5 833.8 713.4 26.5%
Other real estate owned 57.1 53.7 61.8 -7.6%
Excess of cost over net assets of affiliates
purchased 751.4 762.1 701.0 7.2%
Other 5,145.7 6,245.7 3,015.2 70.7%
----------------------------------------------------
Total other assets 8,688.7 9,728.4 6,291.9 38.1%
----------------------------------------------------
Total assets $113,127.0 $115,491.6 $107,262.8 5.5%
====================================================
LIABILITIES
DEPOSITS:
Non-interest bearing $17,287.1 $18,191.6 $15,384.3 12.4%
Interest bearing 58,495.1 58,772.3 57,785.7 1.2%
----------------------------------------------------
Total deposits 75,782.2 76,963.9 73,170.0 3.6%
Federal funds purchased and repurchase agreements 8,220.0 9,105.3 10,773.9 -23.7%
Other short-term borrowings 4,437.3 6,820.3 5,901.5 -24.8%
Long-term borrowings 11,370.9 9,972.2 5,080.2 123.8%
Accrued interest payable 503.2 520.1 406.1 23.9%
Other liabilities 2,723.9 2,260.3 2,361.8 15.3%
-----------------------------------------------------
Total liabilities 103,037.5 105,642.1 97,693.5 5.5%
-----------------------------------------------------
STOCKHOLDERS' EQUITY
Preferred stock 173.5 184.2 240.1 -27.7%
Common stock 2,927.6 2,907.6 2,869.2 2.0%
Capital in excess of aggregate stated value of common 4,052.5 4,054.3 4,336.6 -6.6%
Retained earnings 2,879.9 2,672.1 2,342.2 23.0%
Net unrealized holding gains (losses) on
securities available for sale 94.1 31.3 (12.9) N/A
Treasury stock (38.1) 0.0 (205.9) -81.5%
-----------------------------------------------------
Total stockholders' equity 10,089.5 9,849.5 9,569.3 5.4%
-----------------------------------------------------
Total liabilities and stockholders' equity $113,127.0 $115,491.6 $107,262.8 5.5%
=====================================================
</TABLE>
Page 11
<PAGE> 14
<TABLE>
<CAPTION>
BANC ONE CORPORATION AND SUBSIDIARIES QUARTERLY AVERAGE BALANCE SHEET, YIELDS & RATES (1) (2)
Third Quarter 1997 Second Quarter 1997 Third Quarter 1996
------------------------------------------------------------------------------------------------------
Average Income / Yield / Average Income / Yield / Average Income / Yield /
(millions) (unaudited) Balance Expense Rate Balance Expense Rate Balance Expense Rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Short term investments $757.5 $10.6 5.55% $792.2 $11.2 5.67% $618.2 $8.5 5.47%
Loans held for sale 419.8 7.9 7.47% 2,317.7 78.3 13.55% 457.2 9.0 7.83%
Securities: (4) (5)
Taxable 13,868.9 228.9 6.55% 16,137.3 264.8 6.58% 16,952.6 276.3 6.48%
Tax exempt 1,436.5 28.8 7.95% 1,465.9 30.3 8.29% 1,651.2 34.2 8.24%
----------------------- -------------------- -------------------
Total securities 15,305.4 257.7 6.68% 17,603.2 295.1 6.72% 18,603.8 310.5 6.64%
Loans and leases: (3)
Commercial 21,704.1 458.2 8.38% 21,183.5 447.5 8.47% 19,293.7 403.9 8.33%
Real estate - commercial 5,914.1 134.6 9.03% 6,007.2 136.6 9.12% 6,238.5 140.7 8.97%
Real estate - construction 4,037.3 98.9 9.72% 3,892.8 93.9 9.68% 3,321.3 80.7 9.67%
Real estate - residential 16,044.5 383.9 9.49% 14,760.7 351.4 9.55% 11,609.9 269.0 9.22%
Consumer, net 20,659.0 492.1 9.45% 20,955.4 494.0 9.46% 20,300.7 469.0 9.19%
Credit Card 14,281.7 508.1 14.11% 11,306.6 420.6 14.92% 12,131.7 463.4 15.20%
Leases, net 2,540.7 48.1 7.51% 2,421.9 45.0 7.45% 2,142.0 40.1 7.45%
----------------------- -------------------- -------------------
Total net loans and leases 85,181.4 2,123.9 9.89% 80,528.1 1,989.0 9.91% 75,037.8 1,866.8 9.90%
Total earning assets 101,664.1 $2,400.1 9.37% 101,241.2 $2,373.6 9.40% 94,717.0 $2,194.8 9.22%
Allowance for credit losses (1,361.0) (1,217.6) (1,115.0)
Other assets 13,182.6 12,477.8 10,528.8
------------ ------------ ------------
Total assets $113,485.7 $112,501.4 $104,130.8
============ ============= ============
Deposits:
Noninterest bearing $15,934.0 $15,342.0 $13,991.8
Interest bearing demand 1,515.7 $6.6 1.73% 1,677.3 $7.0 1.67% 2,131.1 $9.7 1.81%
Money market and savings 31,765.8 282.4 3.53% 30,826.6 269.6 3.51% 29,342.6 245.1 3.32%
Time deposits:
CD's less than $100,000 18,006.7 246.9 5.44% 18,128.4 249.5 5.52% 18,597.5 258.6 5.53%
CD's $100,000 and over:
Domestic 5,726.2 78.6 5.45% 5,817.1 80.1 5.52% 5,175.8 70.2 5.40%
Foreign 2,482.7 33.6 5.37% 2,148.3 29.3 5.47% 2,915.6 39.5 5.39%
----------------------- -------------------- -------------------
Total deposits 75,431.1 648.1 3.41% 73,939.7 635.5 3.45% 72,154.4 623.1 3.44%
Borrowed Funds:
Short-term 15,105.0 211.5 5.56% 17,043.2 233.1 5.49% 14,963.0 197.5 5.25%
Long-term 10,156.1 164.3 6.42% 8,776.4 138.8 6.34% 4,933.8 82.0 6.61%
----------------------- -------------------- -------------------
Total borrowed funds 25,261.1 375.8 5.90% 25,819.6 371.9 5.78% 19,896.8 279.5 5.59%
Total interest bearing
liabilities 84,758.2 $1,023.9 4.79% 84,417.3 $1,007.4 4.79% 78,059.4 $902.6 4.60%
Other liabilities 2,951.0 2,735.1 2,548.7
Preferred stock 176.2 188.9 240.5
Common equity (6) 9,666.3 9,818.1 9,290.4
------------ ------------- ------------
Total liabilities and equity $113,485.7 $112,501.4 $104,130.8
============ ============= ============
</TABLE>
(1) Fully taxable equivalent basis
(2) Certain prior period amounts have been reclassified for comparison
purposes
(3) Nonaccrual loans are included in loan balances
(4) Average securities balances are based on amortized historical cost,
excluding SFAS 115 adjustments to fair value which are included in
other assets.
(5) Fair value of total securities at September 30, 1997 approximates
$15,441
(6) Net unrealized holding gains (losses) on securities available for
sale, net of tax
<TABLE>
<S> <C> <C>
$64.7 ($23.4) ($38.4) .
============ ============= ============
</TABLE>
Page 12
<PAGE> 15
<TABLE>
<CAPTION>
BANC ONE CORPORATION AND SUBSIDIARIES YEAR TO DATE AVERAGE BALANCE SHEET, YIELDS & RATES (1) (2)
First Nine Months 1997 First Nine Months 1996
------------------------------------------- ------------------------------------------
Average Income / Yield / Average Income / Yield /
(millions) (unaudited) Balance Expense Rate Balance Expense Rate
- -------------------------------------------------------------------------------- ------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Short term investments $797.8 $33.0 5.53% $618.3 $26.3 5.68%
Loans held for sale 1,382.4 130.4 12.61% 581.8 33.2 7.62%
Securities: (4) (5)
Taxable 15,737.9 770.9 6.55% 17,622.2 857.2 6.50%
Tax exempt 1,491.7 91.0 8.16% 1,704.5 106.4 8.34%
---------------------------- ----------------------------
Total securities 17,229.6 861.9 6.69% 19,326.7 963.6 6.66%
Loans and leases: (3)
Commercial 21,018.3 1,317.6 8.38% 19,182.0 1,187.1 8.27%
Real estate - commercial 6,038.0 407.6 9.03% 6,108.9 410.0 8.97%
Real estate - construction 3,901.2 282.8 9.69% 3,112.6 229.2 9.84%
Real estate - residential 14,971.6 1,065.4 9.51% 11,306.8 782.3 9.24%
Consumer, net 20,572.7 1,473.2 9.57% 20,167.7 1,425.0 9.44%
Credit Card 12,836.6 1,405.7 14.64% 12,071.6 1,321.2 14.62%
Leases, net 2,425.9 134.0 7.39% 1,964.0 109.4 7.44%
---------------------------- ----------------------------
Total net loans and leases 81,764.3 6,086.3 9.95% 73,913.6 5,464.2 9.87%
Total earning assets 101,174.1 $7,111.6 9.40% 94,440.4 $6,487.3 9.18%
Allowance for credit losses (1,259.8) (1,091.9)
Other assets 12,345.4 10,512.5
-------------- --------------
Total assets $112,259.7 $103,861.0
============== ==============
Deposits:
Noninterest bearing $15,293.1 $14,069.2
Interest bearing demand 1,702.9 $21.1 1.66% 2,494.2 $34.1 1.83%
Money market and savings 30,895.4 804.6 3.48% 28,866.3 712.9 3.30%
Time deposits:
CD's less than $100,000 18,091.4 743.5 5.49% 19,142.2 795.7 5.55%
CD's $100,000 and over:
Domestic 5,854.4 240.1 5.48% 5,389.1 194.5 4.82%
Foreign 2,407.2 97.4 5.41% 2,209.9 88.5 5.35%
---------------------------- ----------------------------
Total deposits 74,244.4 1,906.7 3.43% 72,170.9 1,825.7 3.38%
Borrowed Funds:
Short-term 16,715.5 676.5 5.41% 14,906.6 587.0 5.26%
Long-term 8,653.8 414.4 6.40% 4,781.7 233.7 6.53%
---------------------------- ----------------------------
Total borrowed funds 25,369.3 1,090.9 5.75% 19,688.3 820.7 5.57%
Total interest bearing liabilities 84,320.6 $2,997.6 4.75% 77,790.0 $2,646.4 4.54%
Other liabilities 2,823.1 2,516.1
Preferred stock 188.6 243.7
Common equity (6) 9,634.3 9,242.0
-------------- --------------
Total liabilities and equity $112,259.7 $103,861.0
============== ==============
</TABLE>
(1) Fully taxable equivalent basis
(2) Certain prior period amounts have been reclassified for comparison
purposes
(3) Nonaccrual loans are included in loan balances
(4) Average securities balances are based on amortized historical cost,
excluding SFAS 115 adjustments to fair value which are included in
other assets.
(5) Fair value of total securities at September 30, 1997 approximates
$15,441
(6) Net unrealized holding gains (losses) on securities available for
sale, net of tax
<TABLE>
<S> <C> <C>
$13.6 $1.6 .
============== ==============
</TABLE>
Page 13
<PAGE> 16
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
MANAGED LOAN GROWTH ANALYSIS (1) (2) SEPTEMBER 30, 1997 GROWTH(3)
-------------------------------------------------------- ------------------------------
BALANCE SHEET
-------------------------- TOTAL
(millions) (unaudited) REPORTED HELD FOR SALE SECURITIZED MANAGED 3Q97 VS. 2Q97 3Q97 VS. 3Q96
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
PERIOD END BALANCES
WHOLESALE
Commercial loans and leases $24,433.5 $24,433.5 -2.9% 8.0%
Real estate - commercial 5,779.6 5,779.6 -16.4% -10.1%
Real estate - construction 4,110.2 4,110.2 14.2% 13.9%
-----------------------------------------------------
Total wholesale 34,323.3 34,323.3 -3.3% 5.1%
CONSUMER
Real estate - residential 5,159.4 $466.0 5,625.4 -9.3% -7.6%
Home equity 9,006.7 $184.7 9,191.4 21.8% 19.7%
Direct consumer 3,051.6 121.9 3,173.5 38.5% 24.6%
Indirect consumer 8,434.7 1,220.2 9,654.9 -0.2% -10.6%
Auto Lease 6,397.2 6,397.2 24.7% 70.3%
Student 1,745.7 779.3 2,525.0 -37.7% -6.3%
Other consumer 911.6 911.6 -15.8% 5.1%
Consumer finance 2,262.1 2,262.1 19.8% 78.0%
-----------------------------------------------------
Sub-total 36,969.0 466.0 2,306.1 39,741.1 8.1% 11.3%
Credit cards 11,448.7 27,467.2 38,915.9 30.3% 23.0%
-----------------------------------------------------
Total consumer 48,417.7 466.0 29,773.3 78,657.0 18.8% 16.8%
=====================================================
Total loans and leases $82,741.0 $466.0 $29,773.3 $112,980.3 11.8% 13.0%
=====================================================
</TABLE>
<TABLE>
<CAPTION>
AVERAGE BALANCES THREE MONTHS ENDING SEPTEMBER 30, 1997
-----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
WHOLESALE
Commercial loans and leases $24,217.6 $24,217.6 3.1% 8.5%
Real estate - commercial 5,914.1 5,914.1 -11.7% -7.3%
Real estate - construction 4,037.3 4,037.3 7.7% 18.0%
-----------------------------------------------------
Total wholesale 34,169.0 34,169.0 1.0% 6.4%
CONSUMER
Real estate - residential 5,239.2 $419.8 5,659.0 -5.0% -7.5%
Home equity 8,729.6 $189.2 8,918.8 26.4% 19.8%
Direct consumer 3,018.0 129.3 3,147.3 21.2% 22.0%
Indirect consumer 8,322.3 1,310.5 9,632.8 -14.5% -12.0%
Auto Lease 6,235.1 6,235.1 40.0% 73.0%
Student 1,984.5 794.9 2,779.4 -11.8% 4.1%
Other consumer 925.4 925.4 -6.7% 8.5%
Consumer finance 2,276.6 2,276.6 65.3% 92.6%
-----------------------------------------------------
Sub-total 36,730.7 419.8 2,423.9 39,574.4 11.0% 11.8%
Credit cards 14,281.7 23,321.9 37,603.6 26.6% 22.4%
-----------------------------------------------------
Total consumer 51,012.4 419.8 25,745.8 77,178.0 18.5% 16.7%
=====================================================
Total loans and leases $85,181.4 $419.8 $25,745.8 $111,347.0 12.9% 13.3%
=====================================================
</TABLE>
(1) Represents total of on-balance sheet loans, loans held for sale, and
securitized loans.
(2) Prior periods restated to conform with current period presentation;
e.g. acquisitions, dispositions, loan purchases/sales, and
reclassifications.
(3) Annualized
Page 14
<PAGE> 17
BANC ONE CORPORATION AND SUBSIDIARIES
<TABLE>
<CAPTION>
QUARTERLY RESULTS
MANAGED CREDIT CARD DETAIL (1) Three Months Ended
-------------------------------------------------------------------------------
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
(millions) (unaudited) 1997 1997 1997 1996 1996
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
BANC ONE CORPORATION
- ---------------------------------------------------------------------------------------------------------------------------------
PERIOD END LOANS - MANAGED $38,915.9 $36,151.9 $34,783.8 $34,838.0 $32,590.7
- securitized (27,467.2) (22,636.3) (21,314.4) (20,414.5) (19,966.3)
-------------------------------------------------------------------------------
- reported 11,448.7 13,515.6 13,469.4 14,423.5 12,624.4
-------------------------------------------------------------------------------
QUARTERLY AVERAGE LOANS - MANAGED 37,603.6 35,123.2 34,882.7 33,370.5 31,687.8
- securitized (23,321.9) (21,882.5) (20,976.2) (19,708.8) (19,556.1)
-------------------------------------------------------------------------------
- reported 14,281.7 13,240.7 13,906.5 13,661.7 12,131.7
- ---------------------------------------------------------------------------------------------------------------------------------
NET CHARGE-OFFS - AMOUNT - MANAGED 548.1 544.2 485.1 470.8 418.3
- securitized (342.9) (334.3) (328.3) (292.0) (275.9)
-------------------------------------------------------------------------------
- reported 205.2 209.9 156.8 178.8 142.4
- RATE - MANAGED 5.78% 6.22% 5.63% 5.61% 5.25%
- securitized 5.83% 6.13% 6.35% 5.89% 5.61%
-------------------------------------------------------------------------------
- reported 5.70% 6.36% 4.57% 5.21% 4.67%
- ---------------------------------------------------------------------------------------------------------------------------------
DELINQUENCY RATE - 30+ DAYS - MANAGED 4.85% 4.76% 5.21% 5.22% 4.84%
- securitized 4.62% 4.83% 5.22% 5.48% 5.16%
-------------------------------------------------------------------------------
- reported 5.41% 4.68% 5.20% 4.84% 4.33%
-------------------------------------------------------------------------------
- 90+ DAYS - managed 2.02% 2.11% 2.39% 2.23% 1.98%
- securitized 1.92% 2.15% 2.40% 2.34% 2.09%
-------------------------------------------------------------------------------
- reported 2.27% 2.05% 2.35% 2.05% 1.85%
- ---------------------------------------------------------------------------------------------------------------------------------
CREDIT CARD CHARGE VOLUME - MANAGED 11,738.8 10,168.9 9,385.1 11,390.0 9,730.7
NEW ACCOUNTS OPENED - MANAGED 2,285.6 2,209.9 1,237.8 1,753.4 1,691.5
CREDIT CARDS ISSUED - MANAGED 40,371.5 37,739.0 37,994.8 37,808.2 37,226.3
ACCOUNTS ON FILE - MANAGED 30,117.8 29,427.0 29,564.8 29,326.7 28,837.8
=================================================================================================================================
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended
-------------------------------------------------------------------------------
Sep. 30, Jun. 30, Mar. 31, Dec. 31, Sep. 30,
CONSOLIDATED BANC ONE CREDIT QUALITY 1997 1997 1997 1996 1996
-------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Allowance for credit losses - period end $1,343.6 $1,362.2 $1,222.4 $1,197.7 $1,131.5
Nonperforming assets - period end:
Nonaccrual $427.0 $395.4 $371.9 $374.2 $415.2
Renegotiated 0.9 1.0 2.3 8.2 1.2
Other real estate owned 57.1 53.7 59.6 53.0 61.8
-------------------------------------------------------------------------------
Total nonperforming assets $485.0 $450.1 $433.8 $435.4 $478.2
Loans delinquent over 90 days $640.8 $494.2 $516.3 $483.9 $404.6
Gross charge-offs $363.4 $365.1 $332.7 $323.7 $268.0
Recoveries 74.0 71.3 85.4 64.0 58.5
-------------------------------------------------------------------------------
Net charge-offs $289.4 $293.8 $247.3 $259.7 $209.5
Allowance to ending loans and leases 1.62% 1.62% 1.55% 1.51% 1.48%
Allowance to nonperforming loans and leases 314.0% 343.6% 326.7% 313.2% 271.7%
Nonperforming assets to ending loans and leases (3) 0.58% 0.53% 0.53% 0.54% 0.62%
90 days delinquent to ending loans and leases (3) 0.77% 0.58% 0.63% 0.60% 0.53%
Net charge-offs to average loans and leases (2) (3) 1.34% 1.42% 1.24% 1.31% 1.10%
</TABLE>
(1) Includes credit card loans held for sale
(2) Annualized
(3) Includes loans held for sale
Page 15
<PAGE> 1
Exhibit 99.2
AGREEMENT and PLAN OF MERGER
between
FIRST COMMERCE CORPORATION
and
DELTA ACQUISITION CORPORATION
and
BANC ONE CORPORATION
<PAGE> 2
TABLE OF CONTENTS TO MERGER AGREEMENT
<TABLE>
<CAPTION>
Page
RECITALS
<S> <C>
Section 1. Merger...........................................................2
Section 2. Name.............................................................2
Section 3. Business.........................................................2
Section 4. Effective Time of Merger; Articles of Incorporation..............3
Section 5. Effect of Merger.................................................3
Section 6. Liabilities upon Merger..........................................4
Section 7. Conversion of Shares.............................................4
Section 8. Board of Directors; Employees; and Name Change...................9
Section 9. Employee Benefits and Stock Options.............................10
Section 10. Undertakings of the Parties.....................................10
Section 11. Dissenting Shareholders.........................................18
Section 12. Tax Opinion.....................................................19
Section 13. Representations and Warranties of BANC ONE......................20
Section 14. Representations and Warranties of DELTA .......................32
Section 15. Representations and Warranties of FCC...........................34
Section 16. Action by FCC Pending Effective Time............................48
Section 17. Action by BANC ONE Pending Effective Time.......................54
Section 18. Conditions to Obligations of BANC ONE and DELTA ...............55
Section 19. Conditions to Obligations of FCC................................59
Section 20. Conditions to Obligations of All Parties........................62
Section 21. Option to Purchase..............................................63
Section 22. Indemnification.................................................63
Section 23. Non-Survival of Representations and Warranties..................68
Section 24. Governing Law...................................................68
Section 25. Assignment......................................................68
Section 26. Satisfaction of Conditions; Termination.........................68
Section 27. Waivers; Amendments.............................................75
Section 28. Entire Agreement................................................76
Section 29. Captions; Counterparts..........................................76
Section 30. Notices.........................................................76
SIGNATURES..................................................................78
</TABLE>
EXHIBIT A - FCC Subsidiaries List
EXHIBIT B - Form of Affiliates Agreement
EXHIBIT C - Opinion of Counsel for FCC
EXHIBIT D - Opinion of Counsel for BANC ONE and DELTA
EXHIBIT E - Option Agreement
<PAGE> 3
AGREEMENT AND PLAN OF MERGER
AGREEMENT AND PLAN OF MERGER dated as of October 20, 1997 (hereinafter called
the "Merger Agreement"), between First Commerce Corporation (hereinafter called
"FCC"), Delta Acquisition Corporation (hereinafter called "DELTA") and BANC ONE
CORPORATION (hereinafter called "BANC ONE").
WITNESSETH:
FCC is a corporation duly organized under the laws of the State of Louisiana.
Its principal office is located at 201 St. Charles Avenue, 29th Floor, New
Orleans, Louisiana 70170. Except as set forth in Exhibit A hereto, FCC, or a
subsidiary of FCC, owns, beneficially and of record, all of the issued and
outstanding capital stock or other ownership interests of the banks listed in
Exhibit A hereto (the "Banks") and of the corporations, limited liability
companies and partnerships listed in Exhibit A hereto (collectively the
"Companies"). The Banks and the Companies are hereinafter sometimes referred to
collectively as the "Subsidiaries" and each, sometimes, as a "Subsidiary."
DELTA is a corporation duly organized under the laws of the State of Ohio. Its
principal office is located at 100 East Broad Street, Columbus, Ohio 43271.
BANC ONE is a corporation duly organized under the laws of the State of Ohio.
Its principal office is located at 100 East Broad Street, Columbus, Franklin
County, Ohio 43271.
The respective Boards of Directors of FCC, DELTA, and BANC ONE have each
approved this Merger Agreement and the consummation of the transactions
contemplated hereby and have approved the execution and delivery of this Merger
Agreement. This Merger Agreement provides for the merger of DELTA with and into
FCC upon the terms and conditions of this Merger Agreement (the "Merger"). FCC
will be the surviving corporation of the Merger. From and after
- 1 -
<PAGE> 4
the time the Merger shall become effective as set forth in Section 4 of this
Merger Agreement, and as and when required by this Merger Agreement, BANC ONE
will issue shares of its common stock, without par value ("BANC ONE Common") in
exchange for all of the issued and outstanding shares of FCC common stock,
$5.00 par value ("FCC Common"). It is understood by each of the parties hereto
that BANC ONE seeks, as a result of the Merger, to acquire FCC, the Banks and
the Companies and all of their respective operating assets and liabilities.
Subject to the terms and conditions of this Merger Agreement, all parties will
exert their reasonable best efforts to obtain such regulatory approvals and to
effect such other actions as are necessary or appropriate to consummate the
Merger.
In consideration of the premises, FCC, BANC ONE and DELTA hereby make this
Merger Agreement and prescribe the terms and conditions of the Merger and the
mode of carrying the Merger into effect as follows:
1. Merger. Subject to the terms and conditions hereinafter set forth,
DELTA shall be merged with and into FCC pursuant to and in accordance
with applicable provisions of the Louisiana Business Corporation Law
(the "Louisiana BCL") and the General Corporation Law of the State of
Ohio (the "Ohio GCL"), with the result that FCC shall be the surviving
corporation.
2. Name. The name of the surviving corporation (hereinafter called the
"Surviving Corporation" whenever reference is made to it as of the
Effective Time or thereafter) shall be "Louisiana Banc One
Corporation."
3. Business. The business of the Surviving Corporation shall be that of a
bank holding company. The Surviving Corporation shall exist by virtue
of, and be governed by the laws of, the State of Louisiana and shall
have its principal office at 201 St. Charles Avenue, 29th Floor, New
Orleans, Louisiana 70170.
- 2 -
<PAGE> 5
4. Effective Time of Merger; Articles of Incorporation. Certificates of
Merger shall be executed and filed with the Ohio Secretary of State
and the Louisiana Secretary of State pursuant to applicable provisions
of the Ohio GCL and the Louisiana BCL in order to cause the Merger to
become effective promptly after the Closing (as defined in Section
10(c)). The Merger shall become effective in accordance with
applicable provisions of the Ohio GCL and the Louisiana BCL on the
later to occur of (i) the filing with the Secretary of State of the
State of Ohio of a Certificate of Merger pursuant to Section 1701.81
of the Ohio GCL and (ii) the filing with the Secretary of State of the
State of Louisiana of a Certificate of Merger pursuant to Section
112(F) of the Louisiana BCL (the "Effective Time").
The Articles of Incorporation of FCC in effect as of the Effective
Time shall be the Articles of Incorporation of the Surviving
Corporation, except that Article I and Article III of said Articles of
Incorporation shall be amended, effective as of the Effective Time, to
be and read as follows:
Article I
Name: The name of this Corporation (hereinafter called the
"Corporation") is Louisiana Banc One Corporation.
Article III
Capital: The Corporation has authority to issue five hundred (500)
shares of no par value per share Common Stock.
The Bylaws of FCC in effect as of the Effective Time shall be the
Bylaws of the Surviving Corporation.
5. Effect of Merger. At the Effective Time, the separate corporate
existence of FCC and DELTA, respectively, shall, as provided in
applicable provisions of the Ohio GCL and the
- 3 -
<PAGE> 6
Louisiana BCL, be merged into and continued in FCC as the Surviving
Corporation, which shall be deemed to be the same corporation as FCC
and DELTA. All rights, franchises and interests of FCC and DELTA,
respectively, in and to every type of property, real, personal and
mixed, and choses in action, shall be transferred to and vested in FCC
as the Surviving Corporation by virtue of the Merger without any deed
or other transfer in the same manner and to the same extent as such
rights, franchises and interests were held or enjoyed by FCC an DELTA,
respectively, at the Effective Time, as provided in applicable
provisions of the Ohio GCL and the Louisiana BCL.
6. Liabilities upon Merger; Service of Process. The Surviving Corporation
shall be responsible for all of the liabilities of every kind and
description of FCC and DELTA existing as of the Effective Time.
The filing of a Certificate of Merger with the Secretary of State of
the State of Ohio, accompanied by such other documents as are required
by the Ohio GCL, shall operate as a consent by the Surviving
Corporation that it may be sued and served with process in the State
of Ohio in any suit, action or proceeding for the enforcement of any
obligation or liability of DELTA; and as an irrevocable appointment by
the Surviving Corporation of the Ohio Secretary of State as agent of
the Surviving Corporation to accept service of process in any
proceeding in the State of Ohio relating to any obligation of DELTA or
to enforce the rights of a dissenting shareholder of DELTA.
7. Conversion of Shares.
(a) At the Effective Time:
(i) Each share of FCC Common that is issued and
outstanding immediately prior to the Effective Time,
together with any and all FCC Common purchase rights
and related interests and rights (if not previously
redeemed) associated
- 4 -
<PAGE> 7
with each such share of FCC Common ("Rights")
arising from, related to and/or issued pursuant to
the Rights Agreement dated February 26, 1996 between
FCC and First Chicago Trust Company of New York, as
Rights Agent, (the FCC Rights Plan"), by virtue of
the Merger and without any action of the part of the
holder thereof shall thereupon be converted into
1.28 shares of BANC ONE Common subject, however, to
(i) the anti-dilution provisions of Section 7(e) of
this Merger Agreement and (ii) provisions set forth
in Section 7(c) with respect to fractional shares
(the "Exchange Rate").
(ii) The 500 shares of Common Stock of DELTA issued and
outstanding immediately prior to the Effective Time
shall, thereupon and without further notice, be
converted into and become issued and outstanding
shares of common stock of the Surviving Corporation,
all of which shall be owned of record by BANC ONE.
(iii) Any shares of FCC Common held by FCC as treasury
stock, together with any and all Rights associated
therewith arising from, related to and/or issued
pursuant to the FCC Rights Plan, immediately prior
to the Effective Time shall be canceled and shall
not represent capital stock of and/or any right or
interest with respect to BANC ONE or the Surviving
Corporation and shall not be exchanged for shares of
BANC ONE Common.
(iv) The Rights issued pursuant to the FCC Rights Plan
(if not previously redeemed) shall expire and
neither the Surviving Corporation nor BANC ONE shall
have any obligations with respect thereto.
(b) FCC's shareholders of record at the Effective Time, for the
shares of FCC Common then held by them, respectively, shall
be allocated and be entitled to receive (upon
- 5 -
<PAGE> 8
surrender for cancellation of certificates formerly
representing shares of FCC Common and Rights issued pursuant
to the FCC Rights Plan) certificates for shares of BANC ONE
Common as shall be equal to the number of shares of FCC
Common outstanding immediately prior to the Effective Time
multiplied by the Exchange Rate.
(c) No certificate for fractional shares of BANC ONE Common will
be issued by BANC ONE in connection with the exchange
contemplated by the Merger, but in lieu thereof, any holder
of FCC Common shall, upon surrender of the certificate or
certificates representing such FCC Common and Rights issued
pursuant to the FCC Rights Plan, be paid cash, without
interest, by BANC ONE for such fractional shares, if any, on
the basis of the BANC ONE Average Price (as hereinafter
defined). The BANC ONE Average Price shall mean the average
of the closing prices of BANC ONE Common on the New York
Stock Exchange ("NYSE") during the Valuation Period (as
hereinafter defined) as reported in The Wall Street Journal
for NYSE Composite Transactions. The term "Valuation Period"
shall mean the five consecutive NYSE trading days ending on
the fifth NYSE trading day immediately prior to the Closing
Date.
(d) Promptly after the Effective Time, and subject to the
provisions set forth above relating to fractional shares,
BANC ONE will, or will cause Harris Trust and Savings Bank,
as Exchange Agent for BANC ONE to, distribute to the former
holders of FCC Common (or their respective designees) in
exchange for and upon surrender for cancellation by such
holders of a certificate or certificates formerly
representing shares of FCC Common and Rights issued pursuant
to the FCC Rights Plan, the certificate(s) for shares of BANC
ONE Common in accordance with the Exchange Rate. At the
Effective Time, each certificate formerly representing FCC
Common and Rights issued pursuant to the FCC Rights Plan (if
not previously redeemed) shall
- 6 -
<PAGE> 9
be deemed for all purposes to evidence the ownership of the
number of shares of BANC ONE Common into which such shares
have been converted pursuant to the Exchange Rate; provided,
however, that, until such surrender of a holder's certificate
or certificates formerly representing shares of FCC Common
and Rights issued pursuant to the FCC Rights Plan, the holder
thereof shall not be entitled to receive any dividend or
other payment or distribution payable to holders of BANC ONE
Common. Upon such surrender (or, in lieu of surrender, other
provisions reasonably satisfactory to BANC ONE as are made as
set forth in the next following paragraph), there shall be
paid to the person entitled thereto the aggregate amount of
dividends or other payments or distributions (in each case
without interest) which became payable after the Effective
Time, to the extent not previously paid to such person, on
the whole shares of BANC ONE Common represented by the
certificates issued upon such surrender and exchange or in
accordance with such other provisions, as the case may be.
After the Effective Time the holders of certificates formerly
representing shares of FCC Common and Rights issued pursuant
to the FCC Rights Plan shall cease to have rights with
respect to such shares and to any related Rights and their
sole right shall be to exchange said certificates for shares
of BANC ONE Common and any fractional share and dividend or
other payment or distribution in accordance with this Merger
Agreement.
Certificates formerly representing shares of FCC Common and
Rights issued pursuant to the FCC Rights Plan surrendered for
cancellation by each shareholder entitled to exchange such
shares for shares of BANC ONE Common shall be accompanied by
such appropriate, executed letters of transmittal as BANC ONE
may reasonably require; provided, however, that if there be
delivered to BANC ONE by any person who is unable to produce
any such certificate formerly representing shares of FCC
Common and Rights issued pursuant to the FCC Rights Plan for
surrender (i) evidence to the reasonable satisfaction of BANC
ONE that any such
- 7 -
<PAGE> 10
certificate has been lost, wrongfully taken or destroyed, and
(ii) such security or indemnity as reasonably may be
requested by BANC ONE to save it harmless, and (iii) evidence
to the reasonable satisfaction of BANC ONE that such person
is the owner of the shares theretofore represented by each
certificate claimed by him to be lost, wrongfully taken or
destroyed and that he is the person who would be entitled to
present each such certificate and to receive shares of BANC
ONE Common pursuant to this Merger Agreement, then BANC ONE,
in the absence of actual notice to it that any shares
theretofore represented by any such certificate have been
acquired by a bona fide purchaser, shall deliver to such
person the certificate(s) representing shares of BANC ONE
Common (and any fractional share and dividend or other
payment or distribution) which such person would have been
entitled to receive upon surrender of each such lost,
wrongfully taken or destroyed certificate representing shares
of FCC Common.
(e) If prior to the Effective Time, (i) FCC shall declare a stock
dividend or distribution upon or subdivide, split up,
reclassify or combine FCC Common or declare a dividend, or
make a distribution, on FCC Common in any security
convertible into FCC Common or (ii) BANC ONE shall declare a
stock dividend or distribution upon or subdivide, split up,
reclassify or combine BANC ONE Common or declare a dividend,
or make a distribution, on BANC ONE Common in any security
convertible into BANC ONE Common, appropriate adjustment or
adjustments will be made in the Exchange Rate and other
factors used to determine or limit the Exchange Rate.
(f) Following the Merger, each $50.00 aggregate principal balance
of FCC's 12-3/4% Convertible Debentures due December 1, 2000
Series A and Series B (each a "FCC Debenture") that is
surrendered for conversion (which surrender shall remain the
option of the holder) shall, pursuant to the provisions of
those certain Trust
- 8 -
<PAGE> 11
Indentures dated as of September 27, 1985 (the "Indentures")
between FCC and RepublicBank Dallas, National Association, be
converted into that number of whole shares of BANC ONE Common
Stock as shall be calculated by multiplying (x) that number
of shares of FCC into which such FCC Debenture would have
been converted immediately prior to the Effective Time by (y)
the Exchange Rate. For purposes of the conversion of FCC
Debentures into BANC ONE Common Stock, the Exchange Rate
shall be adjusted, as appropriate, if BANC ONE shall declare
a stock dividend or distribution upon or subdivide, split up,
reclassify or combine BANC ONE Common or declare a dividend,
or make a distribution, on BANC ONE Common in any security
convertible into BANC ONE Common after such Exchange Rate is
determined. Notwithstanding the foregoing, following the
Effective Time BANC ONE, the Surviving Corporation and the
Debenture holders shall have such rights and obligations as
set forth in the Debentures and the related Indentures.
8. Board of Directors, Employees and Name Changes. The directors of the
Surviving Corporation immediately following the Effective Time and
until the next annual meeting of shareholders at which their
respective successors are elected and qualified shall be the directors
of FCC immediately prior to the Effective Time. The officers and
employees of the Surviving Corporation immediately following the
Effective Time shall be the officers and employees of FCC immediately
before the Effective Time. The directors, officers and employees of
the Subsidiaries immediately following the Effective Time shall be the
officers and employees of the respective Subsidiaries immediately
before the Effective Time.
FCC will cooperate with BANC ONE in the procurement of requisite
corporate and regulatory approvals and, if requested by BANC ONE, will
use its reasonable best efforts to take such other steps as are
appropriate and necessary to effect changes in the name of each of the
Subsidiaries to include the words "Bank One" or "Banc One" so that
such name
- 9 -
<PAGE> 12
changes will become effective at the Effective Time or such other time
subsequent to the Effective Time as may be requested by BANC ONE.
9. Employee Benefits and Stock Options. Following the Effective Time, the
stock options, if any, and employee benefit programs to be available
and applicable to the officers and employees of FCC and the
Subsidiaries shall be as described in and governed by a Letter
Agreement dated October 19, 1997 between FCC and BANC ONE (the
"Benefits Agreement").
10. Undertakings of the Parties. FCC, DELTA and BANC ONE further agree as
follows:
(a) This Merger Agreement shall be submitted to the shareholders
of FCC for approval at a meeting to be called and held in
accordance with applicable law and the Articles of
Incorporation and By-laws of FCC. Such shareholders' meeting
will be scheduled to be held at a time mutually acceptable to
FCC and BANC ONE approximately 30 to 45 days following the
mailing by FCC of its proxy statement to its shareholders,
which mailing will promptly follow the effective date of the
registration statement to be filed by BANC ONE with the
Securities and Exchange Commission (the "SEC") as provided in
Section 10(d). FCC and BANC ONE will cooperate with each
other in order to facilitate the preparation, filing and
clearance of the registration statement and the proxy
statement under federal and state securities laws to be used
with respect to such shareholders' meeting and the exchange
of shares as contemplated by this Merger Agreement. FCC's
obligation to submit this Merger Agreement to a vote at the
shareholders' meeting shall be subject to the receipt by FCC
of the opinion of Keefe, Bruyette & Woods, Inc. dated as of a
date not more than five days prior to the date of the Proxy
Statement/Prospectus with respect to the fairness of the
transaction to FCC's shareholders from a financial point of
view satisfactory in form and substance to FCC and its
counsel.
- 10 -
<PAGE> 13
(b) BANC ONE will promptly prepare and file an application
(believed in good faith by BANC ONE to be substantially
complete in form and substance) to the Board of Governors of
the Federal Reserve System (the "Board") under appropriate
provisions of Section 3 and Section 4 of the Bank Holding
Company Act of 1956, as amended, and to the Louisiana
Commissioner of Financial Institutions (the "Commissioner")
under appropriate provisions of Louisiana Interstate Banking
Law for prior approval of the Merger or the proposed
acquisition of FCC and the Subsidiaries by BANC ONE. FCC will
promptly furnish BANC ONE such information, appropriate
representations and documents as may be reasonably requested
by BANC ONE in connection therewith. BANC ONE will use its
reasonable best efforts to cause such applications to be
approved by the Board and the Commissioner, and to obtain
such other regulatory consents and approvals as may be
necessary to facilitate the Merger, in each case as soon as
possible. Before such applications are filed, BANC ONE will
provide FCC and its counsel with an opportunity to promptly
review drafts of all such applications and to comment on the
portions of such applications that contain information about
FCC. BANC ONE will promptly provide FCC and its counsel with
copies of all such applications as filed together with
correspondence to or from any such regulators related
thereto.
(c) The closing of the Merger (the "Closing") shall, unless
another date or place is agreed to in writing by the parties
hereto, take place at the offices of FCC set forth in Section
30(b) of this Agreement on that day specified by BANC ONE
which day shall be within the 15-day period commencing on the
first day after the later of (i) the expiration of any
required waiting period following the approval of the
consummation of the Merger by the Board and Commissioner,
(ii) the date of the meeting of shareholders of FCC to
approve the Merger or (iii) the business day following the
satisfaction or waiver of all conditions to the Merger other
than those to be satisfied by deliveries at the Closing. The
date on which the closing is to be
- 11 -
<PAGE> 14
held is herein referred to as the "Closing Date." If BANC ONE
fails to specify a Closing Date by the end of such 15-day
period, FCC will be entitled to specify the Closing Date. The
specifying party shall give the other at least two business
days advance notice of the date specified for the Closing.
(d) BANC ONE will promptly prepare and file with the SEC and use
its reasonable best efforts to cause to become effective as
soon as possible, a registration statement, including the
related prospectus, and including the proxy statement
referred to in Section 10(a), above (the "Proxy
Statement/Prospectus"), and any required amendments thereto
or supplements to any prospectus contained therein, relating
to the issuance of BANC ONE Common in the Merger as
contemplated by this Merger Agreement. Such registration
statement will not cover resales by any persons who may be
considered "underwriters" under Rule 145(c) of the Securities
Act of 1933, as amended (the "1933 Act"). FCC and its counsel
shall assist BANC ONE in the preparation of the Proxy
Statement/Prospectus and BANC ONE will provide FCC and its
counsel with an opportunity to prepare material particularly
related to FCC and matters with respect to disclosing the
background of the transaction and reasons for the
transaction. Before being filed with the SEC, BANC ONE will
provide FCC and its counsel with the opportunity to promptly
review such filing and comment thereon, which comments BANC
ONE will reasonably consider. BANC ONE will promptly provide
FCC and its counsel with copies of all SEC filings related to
the Proxy Statement/Prospectus and the Registration Statement
together with correspondence to or from the SEC related
thereto. BANC ONE shall use its reasonable best efforts to
have the shares of BANC ONE Common qualified or exempted from
qualification under all applicable state securities laws as
soon as possible. In the event that a stop order has been
issued, or threatened, by the SEC, that suspends or would
suspend the effectiveness of the registration statement,
- 12 -
<PAGE> 15
BANC ONE shall use its reasonable best efforts to promptly
remove, or cause not to be issued, any such stop order.
(e) BANC ONE will assume and pay, or will cause DELTA to pay, all
expenses incident to the obtaining of the requisite
regulatory consents and approvals. Without limiting the
generality of the foregoing, the expenses to be assumed and
paid by BANC ONE shall include (i) all legal and other
expenses and taxes incurred by BANC ONE incident to the
consummation of the Merger contemplated by this Merger
Agreement, (ii) all legal and other expenses incurred by BANC
ONE incident to the preparation and filing of the
applications to the Board and the Commissioner and other
requests for regulatory consents and approvals with the
appropriate bank regulatory agencies as set forth in or
contemplated by this Merger Agreement, (iii) all legal and
other expenses, if any, incurred in connection with the
registration of BANC ONE Common under federal and state
securities laws, and (iv) expenses associated with obtaining
the tax opinion contemplated by Section 12 of this Merger
Agreement. The expenses to be assumed and paid by BANC ONE
shall not include any legal or other expenses incurred by FCC
in the negotiation of this Merger Agreement, the examination
or review of documents for its own benefit, in connection
with its own corporate proceedings or to Keefe, Bruyette &
Woods, Inc. or to any other investment banker or advisor for
services rendered on its behalf. BANC ONE will pay the
expenses of reproducing the Proxy Statement/Prospectus. FCC
shall be responsible for its legal and accounting fees
associated with the Proxy Statement/Prospectus, including the
expenses and fees to Keefe, Bruyette & Woods, Inc. with
respect to any opinion expressed with respect to the fairness
of the Exchange Rate to the holders of FCC Common.
(f) All confidential information furnished by one party to
another party in connection with this Merger Agreement
(whether before or after the date of this Merger
- 13 -
<PAGE> 16
Agreement) and the transactions contemplated hereby will be
kept confidential by such other party and will be used by
such other party and its directors, officers, employees and
representatives of its advisors only in connection with this
Merger Agreement and the transactions contemplated hereby,
except to the extent that such information (i) is already
known to such other party when received, (ii) thereafter
becomes lawfully obtainable from other sources, otherwise
than in violation of this paragraph or similar duties or
provisions regarding confidentiality, or (iii) is, in the
reasonable opinion of legal counsel for such other party,
required to be disclosed in any document filed with the SEC,
the Board, the Commissioner or any other governmental agency
or authority, or in accordance with legal process.
(g) Each of BANC ONE and FCC will provide the other with copies
of all filings it makes with the SEC under the Securities
Exchange Act of 1934, as amended (the "1934 Act"), and the
1933 Act and the respective rules and regulations of the SEC
thereunder at the time such filings are made at any time
prior to the Effective Time. Insofar as any such filing
refers to or describes this Merger Agreement, the other party
hereto, or the transactions contemplated hereby, the filing
party will provide to the other party a draft thereof
reasonably in advance of making such filing, will provide the
other party and its counsel reasonable opportunity to comment
promptly on such filing and will give due consideration to
any comments of the other party and its counsel before making
such filing.
(h) BANC ONE and DELTA will furnish to FCC all information
concerning BANC ONE and DELTA reasonably required by FCC in
connection with the preparation of proxy solicitation
materials for use in soliciting proxies in connection with
the meeting of FCC's shareholders called for the purpose of
voting on the Merger and will promptly advise FCC if BANC ONE
determines that any of such information is or becomes false
or misleading in any material respect. FCC will furnish to
BANC
- 14 -
<PAGE> 17
ONE all information concerning FCC and the Subsidiaries
reasonably required by BANC ONE in connection with BANC ONE's
preparation of the registration statement (including the
related prospectus) and any required amendments or
supplements thereto, or in connection with other filings by
BANC ONE relating to the registration of its shares to be
issued in the Merger and will promptly advise BANC ONE if FCC
determines that any such information is or becomes false or
misleading in any material respect.
(i) No press release or other public disclosure of matters
related to this Merger Agreement or any of the transactions
contemplated hereby shall be made by FCC or BANC ONE unless
the other party shall have provided its prior consent to the
form and substance thereof; provided, however, that nothing
herein shall be deemed to prohibit any party hereto from
making any disclosure which its counsel deems necessary or
advisable in order to fulfill such party's disclosure
obligations imposed by law.
(j) As soon as possible after the execution of this Merger
Agreement, BANC ONE will vote all the shares of DELTA to
approve and adopt the proposal to merge FCC and DELTA at a
meeting of the shareholders of DELTA held for such purpose or
by means of a unanimous written consent of DELTA's
shareholders adopted in lieu of a meeting to approve the
Merger and approve this Merger Agreement.
(k) BANC ONE will vote, and will cause its subsidiaries to vote,
any shares of FCC Common held by it or any such subsidiary,
except for shares held in a fiduciary capacity, to approve
and adopt this Merger Agreement and the Merger at a meeting
of FCC shareholders held to approve the Merger and adopt this
Merger Agreement.
- 15 -
<PAGE> 18
(l) For not less than one year immediately following the
Effective Time, BANC ONE shall make available adequate
current public information about itself as that terminology
is used in and as required by Rule 144(c) of the SEC under
the 1933 Act.
(m) FCC will use its reasonable best efforts to cause each person
who, in the joint opinion of counsel for BANC ONE and FCC, is
at the Effective Time or was, at the time of FCC's
shareholders' meeting referred to in Section 10 hereof, an
"affiliate" of FCC (as that term is used in Rules 144 and 145
promulgated by the SEC under the 1933 Act), to execute and
deliver to BANC ONE a written agreement, in the form of
attached Exhibit B, that such person will not sell, pledge,
transfer or otherwise dispose of the shares of BANC ONE
Common to be received by such person in the Merger, except in
compliance with the applicable provisions of the 1933 Act.
(n) BANC ONE will initiate a pre-acquisition investigation and
review of the books, records and facilities of FCC and its
Subsidiaries and will complete such pre-acquisition
investigation as soon as reasonably possible but, in any
event, not more than 45 days after the date of this Merger
Agreement. BANC ONE shall advise FCC at the conclusion of
such pre-acquisition investigation of all matters then known
to BANC ONE which are either (i) inconsistent in any material
and adverse respect with any of the representations and
warranties of FCC contained in this Merger Agreement or (ii)
in the reasonable judgment of the Board of Directors of BANC
ONE, are either (x) of such significance as to materially and
adversely affect the financial condition or the results of
operations of FCC and the Subsidiaries on a consolidated
basis or (y) a material and adverse deviation from FCC's
audited financial statements for the year ended December 31,
1996 or FCC's unaudited financials for the six-month period
ended June 30, 1997. BANC ONE shall have the right to
terminate this Merger Agreement as set forth in Section
26(c).
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<PAGE> 19
(o) FCC will initiate a pre-acquisition investigation and review
of the books, records and facilities of BANC ONE and its
subsidiaries and will complete such pre-acquisition
investigation as soon as reasonably possible but, in any
event, not more than 45 days after the date of this Merger
Agreement. FCC shall advise BANC ONE at the conclusion of
such pre-acquisition investigation of all matters then known
to FCC which are either (i) inconsistent in any material and
adverse respect with any of the representations and
warranties of BANC ONE contained in this Merger Agreement or
(ii) in the reasonable judgment of the Board of Directors of
FCC, are either (x) of such significance as to materially and
adversely affect the financial condition or the results of
operations of BANC ONE and the subsidiaries on a consolidated
basis or (y) a material and adverse deviation from BANC ONE's
audited financial statements for the year ended December 31,
1996 or BANC ONE's unaudited financials for the six month
period ended June 30, 1997. FCC shall have the right to
terminate this Merger Agreement as set forth in Section
26(d).
(p) BANC ONE will use its reasonable best efforts to cause the
shares of BANC ONE Common to be issued to the shareholders of
FCC pursuant to this Merger Agreement to be listed on the
NYSE as of the Closing Date, subject only to issuance.
(q) FCC shall take all action, as necessary, with respect to the
FCC Rights Plan, to prevent the approval, execution, delivery
or implementation of this Merger Agreement or the
consummation of the Merger, or the acquisition of shares of
FCC Common by BANC ONE pursuant to the provisions of this
Merger Agreement from resulting in the grant, issuance or
triggering of any right or entitlement or the obligation to
grant or issue any interest in FCC Common, BANC ONE Common or
the common stock of the Surviving Corporation to any person
under the FCC Rights Plan or enabling or allowing any Right
or other interest associated with the FCC Rights Plan to be
exercised, distributed or triggered.
- 17 -
<PAGE> 20
(r) Prior to the Effective Time, BANC ONE will file with the SEC
and use its reasonable best efforts to cause to become
effective not later than the Effective Time, a registration
statement or registration statements on Form S-8 or other
appropriate form to register with the SEC the shares of BANC
ONE Common which may be issued to individuals upon the
exercise of stock options assumed by BANC ONE pursuant to the
Benefits Agreement and will use its reasonable best efforts
to cause such registration statement to remain in effect
until the exercise or expiration of all such options and/or
other stock-related benefits. BANC ONE shall use its
reasonable best efforts to have the shares of BANC ONE Common
which may be issued upon the exercise of such options
qualified or exempted from qualification from all applicable
state securities laws.
(s) If the Effective Time falls at a time that will not allow the
30-day reporting period contemplated by SEC Accounting Series
Releases 130 and 135 to occur during the first quarter of
1998, unless waived by FCC, BANC ONE will use its reasonable
best efforts to prepare and cause to be published, filed or
announced, as soon as reasonably possible, results covering
the first 30 days of combined post-Merger operations of BANC
ONE and FCC in the form of an effective registration
statement filed with the SEC, a report to the SEC on Form
8-K, or other public filing or announcement satisfying the
conditions set forth in SEC Accounting Series Releases 130
and 135.
11. Dissenting Shareholders. A shareholder of FCC Common who files
appropriate written objection pursuant to applicable law, thereafter
votes his/her shares against the Merger and otherwise perfects
applicable dissenters' or appraisal rights, if any, will be entitled
to such rights under the Louisiana BCL.
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<PAGE> 21
12. Tax Opinion. BANC ONE and FCC shall use their respective reasonable
best efforts to obtain from Coopers & Lybrand a written opinion
addressed to FCC, its shareholders and BANC ONE that, based upon the
Internal Revenue Code and regulations thereunder and rulings issued by
the Internal Revenue Service in transactions similar to those
contemplated by this Merger Agreement:
(a) The statutory Merger of DELTA with and into FCC will
constitute a reorganization within the meaning of Section
368(a)(1)(A) and Section 368(a)(2)(E) of the Internal Revenue
Code;
(b) No gain or loss will be recognized by BANC ONE or FCC as a
consequence of the transactions herein contemplated;
(c) No gain or loss will be recognized to the shareholders of FCC
on the exchange of their shares of FCC Common for shares of
BANC ONE Common (disregarding for this purpose any cash
received in lieu of fractional share interests);
(d) The Federal income tax basis of the BANC ONE Common received
by the shareholders of FCC Common for their shares of FCC
Common will be the same as the Federal income tax basis of
the FCC Common surrendered in exchange therefor (reduced by
any amount allocated to fractional share interests for which
cash is received); and
(e) The holding period of the BANC ONE Common received by a
shareholder of FCC will include the period for which the FCC
Common exchanged therefor was held, provided the exchanged
FCC Common was held as a capital asset by such shareholder on
the date of the exchange.
- 19 -
<PAGE> 22
13. Representations and Warranties of BANC ONE. BANC ONE represents and
warrants to FCC that, except as set forth in BANC ONE's disclosure
letter to FCC dated as of October 19, 1997 and delivered to FCC not
later than the time of the execution of this Merger Agreement (the
"BANC ONE Disclosure Letter"):
(a) BANC ONE is a corporation duly organized and validly existing
in good standing under the laws of the State of Ohio, is a
registered bank holding company under the Bank Holding
Company Act of 1956, as amended, and is qualified to do
business and is in good standing in the State of Ohio,
together with all other jurisdictions where it is both
required to so qualify and where the failure to so qualify
would have a material adverse effect on the business,
operations, financial condition or results of operations of
BANC ONE and its subsidiaries, taken as a whole, or on the
ability of BANC ONE to consummate the transactions
contemplated hereby (a "BANC ONE Material Adverse Effect"),
and BANC ONE has full power and authority (including all
licenses, franchises, permits and other governmental
authorizations which are legally required) to engage in the
businesses and activities now conducted by it and its
subsidiaries in all material respects. Neither BANC ONE nor
any of its subsidiaries is subject to any formal or informal
agreement or understanding with, nor are any of them subject
to any order of, any bank regulatory authority restricting or
prohibiting or attempting to restrict or prohibit any
activities or conduct of BANC ONE or any such subsidiary.
Subject only to obtaining the required regulatory approvals,
BANC ONE is, and at all times after the date of this Merger
Agreement to and including the Effective Time will be,
authorized to effect the Merger under applicable law. As of
June 30, 1997, the authorized capital stock of BANC ONE
consisted of (i) 950,000,000 shares of BANC ONE Common, of
which a total of 581,522,935 shares were issued and
outstanding and none were held by BANC ONE as treasury stock
and (ii) 35,000,000 shares of preferred stock without par
value, of which 3,683,614 shares were issued and outstanding
as Series C $3.50 Cumulative
- 20 -
<PAGE> 23
Convertible Preferred Stock. All of the issued and
outstanding shares of BANC ONE's capital stock are duly
authorized, validly issued, fully paid, nonassessable and
subject to no pre-emptive rights. Since June 30, 1997 BANC
ONE has issued approximately 3,318,530 additional shares of
BANC ONE Common and has issued no additional shares of
preferred stock.
(b) BANC ONE has furnished to FCC copies of the following
financial statements relating to BANC ONE and its
consolidated subsidiaries: (i) the audited Consolidated
Balance Sheets of BANC ONE as of December 31, 1996 and 1995
and the Consolidated Statements of Income, Shareholders'
Equity and Cash Flows for each of the years in the three-year
period ended December 31, 1996, together with the notes
thereto, as audited by Coopers & Lybrand, independent
auditors as included in BANC ONE's Annual Report on Form 10-K
for the year ended December 31, 1996 as filed with the SEC;
and (ii) the unaudited Consolidated Balance Sheet of BANC ONE
as at June 30, 1997 and the related unaudited Consolidated
Statements of Income, Shareholders' Equity and Cash Flows for
the quarter then ended, together with the notes thereto as
included in BANC ONE's Quarterly Report on Form 10-Q for the
quarter ended June 30, 1997, as filed with the SEC. Each of
the aforementioned financial statements, and all financial
statements included in Form 10-K or Forms 10-Q filed with the
SEC subsequent to the date of this Merger Agreement and prior
to the Effective Time will, present fairly, in accordance
with generally accepted accounting principles (applied on a
consistent basis except as disclosed in the footnotes
thereto), the consolidated financial position and results of
operations of BANC ONE as of the dates and for the periods
therein set forth. Such financial statements do not or will
not, as of the dates thereof, include any material asset or
omit any material liability, absolute or contingent, or other
fact, the inclusion or omission of which renders or would
render such financial statements, in light of the
circumstances under which they were made, misleading in any
material respect.
- 21 -
<PAGE> 24
Since June 30, 1997, there has not been any change in the
financial condition, results of operations or business of
BANC ONE and its subsidiaries that has had a BANC ONE
Material Adverse Effect.
(c) Since December 31, 1993, BANC ONE and each of its
subsidiaries has filed all reports, registrations and
statements, together with any required amendments thereto,
that any of them was required to file with (i) the SEC,
including, but not limited to, all Forms 10-K, Forms 10-Q,
Forms 8-K, annual reports and proxy statements, (ii) the
Board, (iii) the Federal Deposit Insurance Corporation (the
"FDIC"), (iv) the Office of the Comptroller of the Currency
(the "OCC") and (v) any applicable state securities or
banking authorities in all material respects. All such
reports and statements filed (and those to be filed in the
future) with any such regulatory body or authority are
collectively referred to in this Merger Agreement as the
"Reports." As of their respective dates, the Reports complied
or, if filed in the future, will comply, in all material
respects with the respective rules and regulations
promulgated by the SEC, the Board, the FDIC, the OCC and
state securities or banking authorities, and did not contain
at the time filed, and all Reports to be filed after the date
hereof and prior to the Effective Time will not contain at
the time filed, any untrue statement of a material fact or
omit to state a material fact required to be stated therein
or necessary in order to make the statements therein, in
light of the circumstances under which they were made, not
misleading.
(d) The Boards of Directors of BANC ONE and DELTA have duly
authorized the execution and delivery of this Merger
Agreement and approved the Merger as contemplated by this
Merger Agreement. No authorization of this Merger Agreement
or of the transactions hereby contemplated is required by the
shareholders of BANC ONE. BANC ONE and DELTA have all
requisite power and authority to enter into this Merger
Agreement and BANC ONE has and, after BANC ONE's vote
- 22 -
<PAGE> 25
of the shares of DELTA in favor of the Merger as contemplated
by Section 10(j), BANC ONE and DELTA will have the corporate
authority to consummate the transactions contemplated hereby.
Subject, with respect to DELTA, to approval by BANC ONE as
DELTA's sole shareholder, this Merger Agreement constitutes
the valid and legally binding and enforceable obligation of
each of BANC ONE and DELTA, and this Merger Agreement and the
consummation of the Merger have been duly authorized and
approved on behalf of BANC ONE and DELTA by all requisite
corporate action. Neither the execution and delivery of this
Merger Agreement nor, provided the required approvals are
obtained from the Board and the Commissioner, the
consummation of the Merger will conflict with, result in the
breach of, constitute a default under or accelerate the
performance provided by the terms of any law, or any rule or
regulation of any governmental agency or authority or any
judgment, order or decree of any court, bank regulatory
agency or other governmental agency to which BANC ONE or
DELTA is subject, any contract, agreement or instrument to
which BANC ONE or DELTA is a party or by which BANC ONE or
DELTA is bound or committed, or the Articles of Incorporation
or Code of Regulations of BANC ONE or DELTA, or constitute an
event which with the lapse of time or action by a third
party, could result in a default under any of the foregoing
or result in the creation of any lien, charge or encumbrance
upon any of the assets or properties of BANC ONE or DELTA or
upon any of the stock of BANC ONE or DELTA or adversely
affect the ability of BANC ONE or DELTA to consummate the
transactions contemplated hereby, except, in the case of
contracts, agreements or instruments, such defaults,
conflicts or breaches which either (i) will be cured or
waived prior to the Effective Time or (ii) if not so cured or
waived would not, in the aggregate, have a BANC ONE Material
Adverse Effect.
(e) The reserve for possible loan and lease losses shown on the
June 30, 1997 Consolidated Balance Sheet of BANC ONE is
adequate in all material respects under
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<PAGE> 26
the requirements of generally accepted accounting principles
to provide for possible losses, net of recoveries relating to
loans previously charged off, on loans outstanding
(including, without limitation, accrued interest receivable)
as of June 30, 1997.
(f) Except as disclosed in the financial statements referred to
in Section 13(b), there is no litigation, action, suit,
investigation or proceeding pending or, to the best of the
knowledge of BANC ONE and its executive officers after due
inquiry, overtly threatened against or affecting BANC ONE or
any of its subsidiaries or involving any of their respective
properties or assets, at law or in equity, before any
federal, state, municipal, local or other governmental
authority, which is reasonably likely to be resolved
adversely to the interest of BANC ONE or its subsidiaries
and, if so resolved, would have a BANC ONE Material Adverse
Effect or materially impair its ability to perform under this
Merger Agreement, and to the best of the knowledge of BANC
ONE and its executive officers after due inquiry, no one has
reasonable or valid grounds on which it reasonably can be
expected that anyone will assert or initiate any such
litigation, action, suit, investigation or proceeding against
BANC ONE or any of its subsidiaries.
(g) At the Effective Time and on such subsequent dates when the
former shareholders of FCC surrender their FCC share
certificates for cancellation and exchange, the shares of
BANC ONE Common to be exchanged with former shareholders of
FCC will have been duly authorized and validly issued by BANC
ONE and will be fully paid and nonassessable and subject to
no pre-emptive rights.
(h) BANC ONE and each of its subsidiaries have good and
marketable title to all their respective assets and
properties, whether real or personal, tangible or intangible,
including without limitation the capital stock of its
subsidiaries and all other assets and properties reflected in
BANC ONE's Consolidated Balance Sheet as of June 30,
- 24 -
<PAGE> 27
1997 or which would be reflected thereon if not fully
amortized or depreciated or acquired subsequent thereto
(except to the extent that such assets and properties have
been disposed of for fair value in the ordinary course of
business since June 30, 1997), and BANC ONE and its
subsidiaries as lessee have the right under valid and
subsisting leases to occupy, use, possess and control all
property leased by BANC ONE and its subsidiaries that is
material to them taken as a whole. Such assets and properties
are subject to no liens, mortgages, security interests,
encumbrances, pledges or charges of any kind, except (i) as
noted in said Consolidated Balance Sheet or the notes thereto
or, with respect to assets and properties acquired after June
30, 1997, as noted in BANC ONE's Consolidated Balance Sheet
or the notes thereto included in a periodic report filed with
the SEC; (ii) statutory liens for taxes not yet delinquent;
(iii) landlord's liens; (iv) minor defects and irregularities
in title and encumbrances which do not materially impair the
use thereof for the purposes for which they are held; and (v)
such liens, mortgages, security interests, encumbrances,
lease defects and charges as do not, in the aggregate, have a
BANC ONE Material Adverse Effect. At the Effective Time all
limitations affecting such properties will not, in the
aggregate, have a BANC ONE Material Adverse Effect.
(i) To the best of the knowledge of BANC ONE and its executive
officers after due inquiry, BANC ONE and its subsidiaries
have complied with all laws, regulations and orders
applicable to them and to the conduct of their businesses,
including without limitation all statutes, rules and
regulations pertaining to the conduct of banking activities,
except for violations which, together with any penalty which
results therefrom, have not had and will not have a BANC ONE
Material Adverse Effect. Neither BANC ONE nor any of its
subsidiaries is in default under, and no event has occurred
which, to the best of the knowledge of BANC ONE and its
executive officers, after due inquiry, is likely to result in
a default under the terms of any judgment, decree, order,
writ, rule or regulation of any governmental authority
- 25 -
<PAGE> 28
or court, whether federal, state or local and whether at law
or in equity, in each case where the default has had or is
likely to have a BANC ONE Material Adverse Effect.
(j) BANC ONE and DELTA have not incurred and will not incur
directly or indirectly any liability for brokerage, finders'
or investment bankers' fees or commissions in connection with
this Merger Agreement or the transactions contemplated
hereby.
(k) Each pension, stock bonus or purchase, profit-sharing,
retirement, health and welfare plan maintained by or covering
employees of BANC ONE or any subsidiary of BANC ONE (for
purposes of this paragraph hereinafter referred to
collectively as the "Plans") which purports to be a qualified
plan under Section 401(a) of the Code is so qualified. All of
the Plans which constitute employee pension benefit or
employee welfare benefit plans subject to the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"),
have been maintained in compliance in all material respects
with the applicable requirements of ERISA. All material
notices, reports and other filings required under applicable
law to be given or made to or with any governmental agency
with respect to the Plans have been timely filed or
delivered. BANC ONE and its executive officers, after due
inquiry, have no knowledge of (i) any circumstances which
would adversely affect the qualification of the Plans or
their compliance with the applicable requirements of ERISA,
or would result or have resulted in liability under Title IV
of ERISA or (ii) any "reportable event" (as such term is
defined in Section 4043(b) of ERISA) or any "prohibited
transaction" (as such term is defined in Section 406 of ERISA
and Section 4975(c) of the Code) which has occurred since the
date on which said sections became applicable to the Plans
and which could reasonably be expected to result in any
material liability of BANC ONE or any subsidiary to the
Pension Benefit Guaranty Corporation (the "PBGC"), the
Department of Treasury, the Department of Labor or any multi
employer plan. Those Plans which are defined benefit plans
within the meaning of
- 26 -
<PAGE> 29
ERISA meet the minimum funding standards set forth in the
Code and ERISA and the assets of such Plans equal or exceed
the current value of accrued benefits under such Plans on a
termination basis using PBGC interest rates as of the most
recent plan valuation dates. There are no pending or
threatened claims (other than claims for benefits in the
ordinary course), lawsuits or arbitrations which have been
asserted or instituted against the Plans, or against any
fiduciaries thereof with respect to their duties to the Plans
or the assets of any of the trusts under any of the Plans
which in either case could reasonably be expected to result
in any material liability of BANC ONE or any subsidiary to
the PBGC, Department of Treasury, Department of Labor or any
multi employer plan.
(l) Except where the failure to file would not have a BANC ONE
Material Adverse Effect, BANC ONE and/or its subsidiaries
have duly filed all federal, state, county and local income,
franchise, bank, excise, real and personal property and other
tax returns and reports (including, but not limited to, those
relating to social security, withholding, unemployment
insurance, and occupation, sales and use taxes and those
filed on a consolidated, combined or unitary basis) required
to have been filed by BANC ONE or its subsidiaries up to the
date hereof. All of the foregoing returns are true and
correct in all material respects, and BANC ONE and its
subsidiaries have paid or, prior to the Effective Time, will
pay all taxes, interest, additions to tax, and penalties
shown on such returns or reports as being due or (except to
the extent the same are contested in good faith and, if
material, summarized in the BANC ONE Disclosure Letter)
claimed to be due to any federal, state, county, local or
other taxing authority, and there is, and at the Effective
Time will be, no basis for any additional claim or assessment
which might have a BANC ONE Material Adverse Effect, except
for those being contested in good faith and summarized in the
BANC ONE Disclosure Letter. BANC ONE and its subsidiaries
have paid or made adequate provision in their financial
statements or on their books and records for all material
- 27 -
<PAGE> 30
taxes payable in respect of all periods ending on or before
the date hereof. BANC ONE and its subsidiaries have, and at
the Effective Time will have, no liability for any material
amount of taxes, interest, additions to tax, or penalties of
any nature whatsoever, except for those taxes which may have
arisen up to the Effective Time in the ordinary course of
business and are properly accrued on the books of BANC ONE
and its subsidiaries as of the Effective Time or are being
contested in good faith and have, if material, been
summarized in the BANC ONE Disclosure Letter.
(m) BANC ONE and its subsidiaries have in effect insurance
coverage with reputable insurers, which in respect of
amounts, premiums, types and risks insured, constitutes
reasonably adequate coverage against all risks customarily
insured against by bank holding companies and their
subsidiaries comparable in size and operations to BANC ONE
and its subsidiaries.
(n) Neither the Proxy Statement/Prospectus nor the related
registration statement nor any amendment or supplement
thereto that is filed with the SEC in connection with the
transactions contemplated hereby (except for any information
which has been or shall be supplied in writing by FCC
specifically for inclusion in the Proxy Statement/Prospectus
and registration statement and is so included as so supplied)
shall contain (in the case of information relating to the
Proxy Statement/Prospectus, at the time it is mailed and in
the case of information relating to the registration
statement at the time it becomes effective and in both cases
at the time of the meeting of FCC's shareholders held to
consider the proposed Merger) any untrue statement of a
material fact or shall omit to state any material fact
necessary to make the statements contained therein, in light
of the circumstances in which they are made, not misleading.
The registration statement and any amendments or supplements
thereto that are filed with the SEC in connection with the
transactions contemplated
- 28 -
<PAGE> 31
hereby will comply as to form in all material respects with
the provisions of the 1933 Act and the rules and regulations
promulgated thereunder.
(o) No employee of BANC ONE or any of its subsidiaries is
represented, for purposes of collective bargaining, by a
labor organization of any type. BANC ONE is unaware of any
efforts during the past five years to unionize or organize
any employees of BANC ONE or any of its subsidiaries, and no
claim related to such employees under the Fair Labor
Standards Act, National Labor Relations Act, Civil Rights Act
of 1964, Walsh-Healy Act, Davis Bacon Act, Civil Rights Act
of 1866, Age Discrimination in Employment Act, Equal Pay Act
of 1963, Executive Order No. 11246, Federal Unemployment Tax
Act, Vietnam Era Veterans Readjustment Act, Occupational
Safety and Health Act, or any state or local employment
related law, order, ordinance or regulation, and no unfair
labor practice, discrimination or wage-and-hour claim is
pending or, to the best of the knowledge of BANC ONE and its
executive officers after due inquiry, threatened against BANC
ONE or any of its subsidiaries which claim has had or is
reasonably likely to have a BANC ONE Material Adverse Effect.
(p) To the best of knowledge of BANC ONE and its executive
officers after due inquiry: (i) with respect to any
contaminant, pollutant, hazardous substance, hazardous waste,
hazardous pollutant, toxic pollutant, toxic waste or toxic
substance ("Contaminant"), there are no material actions,
proceedings or investigations pending or threatened before
any federal or state environmental regulatory body, or before
any federal or state court, alleging non-compliance with or
liability in connection with, by BANC ONE or any of its
subsidiaries, the Comprehensive Environmental Response,
Compensation and Liability Act, 42 U.S.C.Sections 9601 et
seq. ("CERCLA"), the Resource Conservation and Recovery Act,
42 U.S.C.Sections 6901 et seq. ("RCRA"), the Clean Water Act,
33 U.S.C.Sections 1251 et seq. ("CWA"), or the Clean Air Act,
42
- 29 -
<PAGE> 32
U.S.C. Sections 7401 et seq. ("CAA"), as each is amended from
time to time, or any other federal, state, local or municipal
statute, ordinance or regulation, or order, ruling or other
decision of any court, administrative agency or other
governmental authority relating to health or safety or
environmental protection (such statutes, ordinances,
regulations, orders, rulings and decisions, together,
"Environmental Laws"); (ii) there is no reasonable basis for
the institution of any material action, proceeding or
investigation against BANC ONE or any of its subsidiaries
under any Environmental Law; (iii) neither BANC ONE nor any
of its subsidiaries is responsible in any material respect
under any Environmental Law for any release by any person at
or in the vicinity of real property of any Contaminant,
caused by the spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, leaching, dumping
or disposing of any such hazardous substance into the
environment (collectively "Release"); (iv) neither BANC ONE
nor any of its subsidiaries is responsible for any material
costs of any response action required by virtue of any
Release of any Contaminant into the environment including,
without limitation, costs arising from investigation, removal
or remediation of Contaminants, security fencing, alternative
water supplies, temporary evacuation and housing and other
emergency assistance undertaken by any environmental
regulatory body or any other person; (v) BANC ONE and each of
its subsidiaries are, in all material respects, in compliance
with all applicable Environmental Laws; and (vi) no real
property owned or used by BANC ONE or any of its subsidiaries
contains any Contaminant including, without limitation, any
asbestos, PCBs or petroleum products or byproducts in any
form, the presence, location or condition of which (a) could
require remediation or other corrective action pursuant to
any Environmental Law in any material respect, or (b)
otherwise would pose any significant health or safety risk
unless remedial measures were taken.
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<PAGE> 33
(q) BANC ONE and/or its subsidiaries (i) have surveyed the
facilities where BANC ONE and its subsidiaries conduct their
businesses including, without limitation, automatic teller
machines (collectively, the "BANC ONE Facilities") for
compliance with the Americans with Disabilities Act and the
regulations issued thereunder (collectively, "ADA"); (ii)
have developed action plans to remove architectural barriers
including communication barriers that are structural in
nature from existing BANC ONE Facilities (collectively, the
"BANC ONE Barriers") when such removal is "readily
achievable," as that term is defined in ADA; (iii) have
finalized action plans for automatic teller machines ("ATMs")
in conformance with the Joint Final Rule of the Architectural
and Transportation Barriers Compliance Board ("ATBCB") and
the Department of Transportation, effective August 16, 1993;
(iv) have developed or will develop schedules for BANC ONE
Barrier removal from BANC ONE Facilities in such action plans
so that BANC ONE Barrier removal was complete on January 26,
1992 or will be completed as soon as practicable thereafter;
and (v) have removed all BANC ONE Barriers in BANC ONE
Facilities or will cause all BANC ONE Barriers to be removed
in accordance with such action plans. All "alterations" (as
such term is defined in ADA) to BANC ONE Facilities
undertaken after January 26, 1992 comply with ADA and the
ATBCB Accessibility Guidelines for Buildings and Facilities
("ADAAG"). Effective January 26, 1992, all plans and designs
for new construction to be utilized by BANC ONE and its
subsidiaries comply with ADA and ADAAG. To the best of the
knowledge of BANC ONE and its executive officers, after due
inquiry, no material investigations, proceedings, or
complaints, formal or informal, are pending or threatened
against BANC ONE and/or its subsidiaries in connection with
BANC ONE Facilities under ADA, ADAAG, or any other state or
federal law concerning accessibility for individuals with
disabilities.
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<PAGE> 34
(r) The statements made and the information included in the BANC
ONE Disclosure Letter and any attachments thereto shall be
deemed to constitute representations and warranties of BANC
ONE under this Merger Agreement to the same extent as if
herein set forth in full. Anything disclosed in the BANC ONE
Disclosure Letter or the attachments thereto shall be
considered to have been disclosed for purposes of all
representations, warranties and covenants under this Merger
Agreement.
(s) Neither BANC ONE nor, to BANC ONE's best knowledge, any of
its affiliates has taken or agreed to take any action that
would prevent BANC ONE from accounting for the transactions
to be effected pursuant to this Agreement as a "pooling of
interests" in accordance with generally accepted accounting
principles and applicable SEC regulations. As of the date of
this Agreement, BANC ONE has no reason to believe that the
Merger will not qualify as a "pooling of interests" for
accounting purposes.
14. Representations and Warranties of DELTA and of BANC ONE with respect
to DELTA. BANC ONE and DELTA represent and warrant to FCC that, except
as set forth in the BANC ONE Disclosure Letter:
(a) DELTA is a corporation duly organized and validly existing
under the laws of the State of Ohio and is qualified to do
business and is in good standing in the State of Ohio
together with all other jurisdictions where it is both
required to so qualify and the failure to so qualify would
have a material adverse effect on the business, operations,
financial condition or result of operations of DELTA or on
the ability of DELTA to consummate the transactions
contemplated hereby, and DELTA has full power and authority
(including all licenses, franchises, permits and other
governmental authorizations which are legally required) to
engage in the business and activities now conducted by it.
The authorized capital stock of DELTA is, and
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<PAGE> 35
at the Effective Time will be, 500 shares of common stock,
without par value, of which 500 shares are issued and
outstanding, all of which are, and at the Effective Time will
be, owned of record and beneficially by BANC ONE free and
clear of all liens, security interests or other encumbrances.
DELTA has no subsidiaries. DELTA has no material assets or
liabilities other than its obligations under this Merger
Agreement.
(b) The Board of Directors of DELTA has authorized execution of
this Merger Agreement and approved the acquisition of FCC as
contemplated by this Merger Agreement. DELTA has all
requisite power and corporate authority to enter into this
Merger Agreement and, after the approval of the Merger by
BANC ONE, DELTA will have the authority to consummate the
transactions contemplated hereby. Subject to shareholder
approval, this Merger Agreement will constitute the valid and
legally binding obligation of DELTA and this Merger Agreement
and the consummation hereof have been duly authorized and
approved on behalf of DELTA by all requisite corporate
action. Neither the execution and delivery of this Merger
Agreement nor, subject to DELTA shareholder approval and
provided the required approvals are obtained from the Board
and the Commissioner, the consummation of the Merger will
conflict with, result in the breach of, constitute a default
under or accelerate the performance provided by the terms of
any law, or any rule or regulation of any governmental agency
or authority or any judgment, order or decree of any court,
bank regulatory agency or other governmental agency to which
DELTA may be subject, any contract, agreement or instrument
to which DELTA is a party or by which DELTA is bound or
committed, or the Articles of Incorporation or Code of
Regulations of DELTA, or constitute an event which with the
lapse of time or action by a third party, could result in a
default under any of the foregoing or result in the creation
of any lien, charge or encumbrance upon any of the assets or
properties of
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<PAGE> 36
DELTA or adversely affect the ability of DELTA to consummate
the transactions contemplated hereby.
15. Representations and Warranties of FCC. FCC represents and warrants to
BANC ONE that, except as set forth in reports, proxy statements,
registration statements and other documents filed by FCC with the SEC
since December 31, 1996, including the exhibits thereto or
incorporated by reference therein and other information incorporated
by reference therein (the "FCC 1997 SEC Documents") or as set forth in
FCC's disclosure letter dated October 19, 1997, and any attachments or
schedules annexed thereto, and delivered to BANC ONE not later than
the time of BANC ONE's execution of this Merger Agreement (the "FCC
Disclosure Letter"):
(a) FCC is a corporation duly organized and validly existing in
good standing under the laws of the State of Louisiana, is a
registered bank holding company under the Bank Holding
Company Act of 1956, as amended, and is qualified to do
business and is in good standing in all jurisdictions where
it is both required to so qualify and where the failure to so
qualify would have a material adverse effect on the business,
operations, financial condition or results of operations of
FCC and the Subsidiaries taken as a whole, or on the ability
of FCC to consummate the transactions contemplated hereby (a
"FCC Material Adverse Effect") and FCC has full corporate
power and authority (including all licenses, franchises,
permits and other governmental authorizations which are
legally required) to engage in the businesses and activities
now conducted by it and the Subsidiaries in all material
respects. FCC is not subject to any formal or informal
agreement or understanding with, nor is it subject to any
order of, any bank regulatory authority restricting or
prohibiting or attempting to restrict or prohibit any
activities or conduct of FCC. As of the date hereof, FCC had
authorized capital stock consisting of 100,000,000 shares of
FCC Common, of which a total of 39,008,334 shares were issued
and outstanding, not
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<PAGE> 37
including 5,810 shares of treasury stock owned by FCC, and
5,000,000 shares of FCC Preferred, none of which were issued
and outstanding. All of the issued and outstanding shares of
FCC Common are duly authorized, validly issued, fully paid
and nonassessable and none are issued in violation of the
pre-emptive rights of any shareholder. There are no
outstanding options, warrants or commitments of any kind to
acquire FCC's capital stock and no rights plan or other
similar plan is related to FCC's capital stock except for (i)
options for not more than 1,927,434 shares of FCC Common
issued to officers and employees of FCC and its Subsidiaries
under The FCC 1985 Stock Option Plan, The Amended and
Restated 1992 Stock Incentive Plan and the FCC 1997 Stock
Option Plan (the "FCC Stock Option Plans"); (ii) the option
to be granted to BANC ONE pursuant to Section 21 of this
Agreement; (iii) Rights issued or issuable pursuant to the
FCC Rights Plan; (iv) conversion rights with respect to the
Debentures; and (v) 104,361 shares of FCC Common issuable as
performance shares under the FCC Amended and Restated 1992
Stock Incentive Plan.
(b) The following financial statements relating to FCC and the
Subsidiaries on a consolidated basis are incorporated by
reference into FCC's Form 10-K for the year ended December
31, 1996 or are included in FCC's Quarterly Report on Form
10-Q for the quarter ended June 30, 1997: (i) the audited
Consolidated Balance Sheet of FCC as of December 31, 1996 and
1995, and the Consolidated Statements of Income,
Stockholders' Equity and Cash Flows for each of the years in
the three-year period ended December 31, 1996, together with
the notes thereto, as audited by Arthur Andersen L.L.P.; and
(ii) the unaudited Consolidated Balance Sheet of FCC as at
June 30, 1997 and the related unaudited Consolidated
Statement of Income and Cash Flows for the quarter then
ended, together with the notes thereto as included in FCC's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1997 as filed with the SEC. Each of the aforementioned
financial statements, and all financial
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<PAGE> 38
statements included in Forms 10-K or Forms 10-Q filed with
the SEC subsequent to the date of this Merger Agreement and
prior to the Effective Time will, present fairly, in
accordance with generally accepted accounting principles
(applied on a consistent basis except as disclosed in the
footnotes thereto), the consolidated financial position and
results of operations of FCC as of the dates and for the
periods therein set forth. Such financial statements do not
or will not, as of the dates thereof, include any material
asset or omit any material liability, absolute or contingent,
or other fact, the inclusion or omission of which renders or
would render such financial statements, in light of the
circumstances under which they were made, misleading in any
material respect. Since June 30, 1997, there has not been
any change in the financial condition, results of operations
or business of FCC and the Subsidiaries that has had a FCC
Material Adverse Effect.
(c) Since December 31, 1993, FCC and each of its Subsidiaries has
filed all reports, registrations and statements, together
with any required amendments thereto, that any of them was
required to file with (i) the SEC, including, but not limited
to, all Forms 10-K, Forms 10-Q, Forms 8-K, annual reports and
proxy statements, (ii) the Board, (iii) the FDIC, (iv) the
OCC and (v) any applicable state securities or banking
authorities. All such reports and statements filed (and
those to be filed in the future) with any such regulatory
body or authority are collectively referred to in this Merger
Agreement as the "Reports." As of their respective dates, the
Reports complied or, if filed in the future, will comply,
with the respective rules and regulations promulgated by the
SEC, the Board, the FDIC, the OCC and state securities or
banking authorities in all material respects, and did not
contain at the time filed, and all Reports to be filed after
the date hereof and prior to the Effective Time will not
contain at the time filed, any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary in order to make the
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<PAGE> 39
statements therein, in light of the circumstances under which
they were made, not misleading.
(d) The Board of Directors of FCC has duly authorized the
execution and delivery of this Merger Agreement and approved
the Merger as contemplated by the Merger Agreement and will
recommend it to the FCC shareholders for adoption unless, in
the good faith judgment of the Board of Directors such
recommendation would be inconsistent with its fiduciary
duties. Subject to approval by the shareholders of FCC and
the contemplated regulatory approvals, this Merger Agreement
constitutes the valid, legally binding and enforceable
obligation of FCC and FCC has all requisite power and
authority to enter into this Merger Agreement and FCC has the
authority to consummate the transactions contemplated hereby
so that, provided all required corporate and regulatory
approvals are obtained, neither the execution and delivery of
this Merger Agreement nor the consummation of the Merger will
conflict with, result in the breach of, constitute a default
under or accelerate the performance provided by the terms of
any law, or any rule or regulation of any governmental agency
or authority or any judgment, order or decree of any court,
bank regulatory agency or other governmental agency to which
FCC is subject, any contract, agreement or instrument to
which FCC is a party or by which FCC is bound or committed,
assuming FCC's compliance with the provisions of its
Debentures related to mergers, or the Articles of
Incorporation or By-laws of FCC, or constitute an event which
with the lapse of time or action by a third party, could
result in the default under any of the foregoing or result in
the creation of any lien, charge or encumbrance upon any of
the assets or properties of FCC or upon any of FCC's capital
stock, except, in the case of contracts, agreements or
instruments, such defaults, conflicts or breaches which
either (i) will be cured or waived prior to the Effective
Time or (ii) if not so cured or waived would not, in the
aggregate, have a FCC Material Adverse Effect.
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<PAGE> 40
(e) The reserve for possible loan and lease losses shown on the
June 30, 1997 Consolidated Balance Sheet of FCC is adequate
in all material respects under the requirements of generally
accepted accounting principles to provide for possible
losses, net of recoveries relating to loans previously
charged off, on loans outstanding (including, without
limitation, accrued interest receivable) as of June 30, 1997.
(f) There is no litigation, action, suit, investigation or
proceeding pending or, to the best of the knowledge of FCC
and its executive officers after due inquiry, threatened
against or affecting FCC or any of its Subsidiaries or
involving any of their respective properties or assets, at
law or in equity, before any federal, state, municipal, local
or other governmental authority which is reasonably likely to
be resolved adversely to the interest of FCC or its
Subsidiaries and, if so resolved, would have a FCC Material
Adverse Effect, and to the best of the knowledge of FCC and
its executive officers after due inquiry, no one has
reasonable or valid grounds on which it reasonably can be
expected that anyone will assert or initiate any such
litigation, action, suit, investigation or proceeding against
FCC or any of the Subsidiaries.
(g) FCC and its Subsidiaries have good and marketable title to
all their respective assets and properties, whether real or
personal, tangible or intangible, including without
limitation the capital stock of its Subsidiaries and all
other assets and properties reflected in FCC's Consolidated
Balance Sheet as of June 30, 1997 or which would be reflected
thereon if not fully amortized or depreciated or acquired
subsequent thereto (except to the extent that such assets and
properties have been disposed of for fair value in the
ordinary course of business since June 30, 1997), and FCC and
its Subsidiaries as lessee have the right under valid and
subsisting leases to occupy, use, possess and control all
property leased by FCC and its Subsidiaries that is material
to them taken as a whole. Such assets and properties are
subject to no liens,
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<PAGE> 41
mortgages, security interests, encumbrances, pledges or
charges of any kind, except (i) as reflected in said
Consolidated Balance Sheet or the notes thereto or, with
respect to assets and properties acquired after June 30,
1997, as noted in FCC's Consolidated Balance Sheet or the
notes thereto included in a periodic report filed with the
SEC; (ii) statutory liens for taxes not yet delinquent; (iii)
landlord's liens; (iv) minor defects and irregularities in
title and encumbrances which do not materially impair the use
thereof for the purposes for which they are held; and (v)
such liens, mortgages, security interests, encumbrances,
lease defects and charges as do not, in the aggregate, have a
FCC Material Adverse Effect. At the Effective Time all
limitations affecting such properties will not, in the
aggregate, have a FCC Material Adverse Effect.
(h) To the best of the knowledge of FCC and its executive
officers after due inquiry, FCC and its Subsidiaries have
complied with all laws, regulations and orders applicable to
them and to the conduct of their businesses, including
without limitation all statutes, rules and regulations
pertaining to the conduct of banking activities, except for
violations which, together with any penalty which results
therefrom, have not had and will not have a FCC Material
Adverse Effect. Neither FCC nor any of its Subsidiaries is in
default under, and no event has occurred which, to the best
of the knowledge of FCC and its executive officers, after due
inquiry, is likely to result in a default under the terms of
any judgment, decree, order, writ, rule or regulation of any
governmental authority or court, whether federal, state or
local and whether at law or in equity, in each case where the
default has had or is likely to have a FCC Material Adverse
Effect.
(i) FCC has not, since June 30, 1997 to the date hereof, (i) sold
or issued any corporate debt securities, granted any option
for the purchase of capital stock or sold, issued, reissued
or increased its shares of its capital stock, except as may
be permitted
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<PAGE> 42
pursuant to Section 16(b) hereof or as incurred in carrying
out the transaction contemplated by this Merger Agreement;
(ii) declared or set aside or paid any dividend or other
distribution in respect of its capital stock, except as may
be permitted pursuant to Section 16(a) hereof; (iii) directly
or indirectly, purchased, redeemed or otherwise acquired any
shares of such stock; (iv) incurred any obligation or
liability (absolute or contingent) except obligations or
liabilities incurred in the ordinary course of business, or
mortgaged, pledged or subjected to lien or encumbrance on any
of its material assets or properties except in the ordinary
cause of business; (v) discharged or satisfied any material
lien or encumbrance or paid any material obligation or
liability (absolute or contingent), except in the ordinary
course of business; (vi) except such as have not or the
resolution of which will not have an FCC Material Adverse
Effect, sold, exchanged or otherwise disposed of any material
capital assets; (vii) made any extraordinary officers' salary
increase or wage increase, entered into any employment
contract with any officer or salaried employee or instituted
any employee welfare, bonus, stock option, profit-sharing,
retirement or similar plan or arrangement; (viii) suffered
any damage, destruction or loss, whether or not covered by
insurance, that has had a FCC Material Adverse Effect or
waived any rights of value which, in the aggregate, have had
a FCC Material Adverse Effect; (ix) entered or agreed to
enter into any agreement or arrangement granting any
preferential right to purchase any of its material assets,
properties or rights or requiring the consent of any party to
the transfer and assignment of any such material assets,
properties or rights; or (x) entered into any other material
transaction (other than in the ordinary course of business)
except as expressly contemplated by this Merger Agreement.
(j) Neither FCC nor any of its Subsidiaries is a party to or
bound by any material written or oral (i) employment or
consulting contract which is not terminable by FCC or its
Subsidiaries on 60 days or less notice, (ii) employee bonus,
deferred compensation,
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<PAGE> 43
pension, stock bonus or purchase, profit-sharing, retirement
or stock option plan, (iii) other employee benefit or welfare
plan, or (iv) other executory material agreements as defined
by the instructions to Exhibit 10 under Item 601 of SEC
Regulation S-K. All FCC pension, stock bonus or purchase,
profit-sharing, retirement, health and welfare plans are
hereinafter referred to as the "Plans." Those Plans intended
to be qualified plans under Section 401(a) of the Code meet
any applicable requirements for favorable tax treatment under
the Code. All of the Plans which constitute employee pension
benefit plans or employee welfare plans subject to ERISA have
been maintained in compliance in all material respects with
the applicable requirements of ERISA. All material notices,
reports and other filings required under applicable law to be
given or made to or with any governmental agency with respect
to the Plans have been timely filed or delivered. FCC and its
executive officers after due inquiry have no knowledge of (i)
any circumstances which would adversely affect the
qualification of the Plans or their compliance with the
applicable requirements of ERISA or would result or have
resulted in liability under Title IV of ERISA or (ii) any
unreported "reportable event" (as such term is defined in
Section 4043(b) of ERISA) or any "prohibited transaction" (as
such term is defined in Section 406 of ERISA and Section
4975(c) of the Code) which has occurred since the date on
which said sections became applicable to the Plans and which
could reasonably be expected to result in any material
liability of FCC or any Subsidiary to the PBGC, the
Department of Treasury, the Department of Labor or any
multiemployer plan. Those Plans which are defined benefit
plans within the meaning of ERISA meet the minimum funding
standards set forth in the Internal Revenue Code and ERISA
and the assets of such Plans equal or exceed the current
value of accrued benefits on a termination basis under such
Plans on a termination basis using PBGC interest rates as of
the most recent plan valuation date. There are no pending or
threatened claims (other than claims for benefits in the
ordinary course and pursuant to domestic relations orders),
lawsuits or arbitrations which have been
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<PAGE> 44
asserted or instituted against the Plans, or against any
fiduciaries thereof with respect to their duties to the Plans
or the assets of any of the trusts under any of the Plans
which in either case could reasonably be expected to result
in any material liability of FCC or any of its Subsidiaries
to the PBGC, the Department of Treasury, the Department of
Labor or any multiemployer plan.
(k) Except where the failure to file would not have a FCC
Material Adverse Effect, FCC and/or its Subsidiaries have
duly filed all federal, state, county and local income,
franchise, bank, excise, real and personal property and other
tax returns and reports (including, but not limited to, those
relating to social security, withholding, unemployment
insurance, and occupation, sales, and use taxes and those
filed on a consolidated, combined or unitary basis) required
to have been filed by FCC or its Subsidiaries up to the date
hereof. FCC has made available to BANC ONE a copy of its
Federal income tax return for the years 1996 and 1995 and, if
applicable, undertakes to provide BANC ONE with a copy of its
Federal income tax return for the year 1997 when the same
becomes available. All of the foregoing returns are true and
correct in all material respects, and FCC and its
Subsidiaries have paid or, prior to the Effective Time, will
pay all taxes, interest, additions to tax, and penalties
shown on such returns or reports as being due or (except to
the extent the same are contested in good faith and, if
material, summarized in the FCC Disclosure Letter) claimed to
be due to any federal, state, county, local or other taxing
authority, and there is, and at the Effective Time will be,
no basis for any additional claim or assessment which might
have a FCC Material Adverse Effect, except for those being
contested in good faith and summarized in the FCC Disclosure
Letter. FCC and its Subsidiaries have paid or made adequate
provision in their financial statements or on their books and
records for all material taxes payable in respect of all
periods ending on or before the date hereof. FCC and its
Subsidiaries have, and at the Effective Time will have, no
liability for any material amount of taxes, interest,
additions to
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<PAGE> 45
tax, or penalties of any nature whatsoever, except for those
taxes which may have arisen up to the Effective Time in the
ordinary course of business and are properly accrued on the
books of FCC and the Subsidiaries as of the Effective Time or
are being contested in good faith and have, if material, been
summarized in the FCC Disclosure Letter.
(l) FCC and the Subsidiaries have in effect insurance coverage
with reputable insurers which in respect of amounts,
premiums, types and risks insured, constitutes reasonably
adequate coverage against all risks customarily insured
against by bank holding companies and their subsidiaries
comparable in size and operations to FCC and the
Subsidiaries.
(m) FCC has not incurred and will not incur any liability for
brokerage, finders' or investment bankers' fees or
commissions in connection with this Merger Agreement or the
transactions contemplated hereby except for fees to Keefe,
Bruyette & Woods, Inc. as set forth in that certain letter
dated October 7, 1997 between FCC and Keefe, Bruyette &
Woods, Inc. which letter shall be included as an exhibit to
the FCC Disclosure Letter.
(n) To the best of FCC's knowledge, neither FCC nor any
Subsidiary is a party to any written or oral loan agreement,
note or borrowing arrangement in violation of any law,
regulation or rule of any governmental authority and which
violation could, to the best of FCC's knowledge after due
inquiry, have a FCC Material Adverse Effect.
(o) None of the information provided by FCC to BANC ONE for
inclusion in the Proxy Statement/Prospectus or related
registration statement or any amendment or supplement thereto
(to the extent so included as so provided) shall contain (in
the case of information relating to the Proxy
Statement/Prospectus, at the time it is
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<PAGE> 46
mailed and in the case of information relating to the
registration statement, at the time it becomes effective, and
in both cases at the time of the meeting of FCC's
shareholders held to consider the proposed Merger) any untrue
statement of a material fact or shall omit to state any
material fact necessary to make the statements contained
therein, in light of the circumstances in which they are
made, not misleading. The Proxy Statement/Prospectus that is
filed with the SEC in connection with the meeting of the
shareholders of FCC will comply as to form in all material
respects with the provisions of the 1934 Act and the rules
and regulations promulgated thereunder.
(p) Neither FCC nor any Subsidiary is, as of the date hereof, a
party to any material contract and/or any material credit
agreement as obligor, maker, issuer or guarantor and which
contract or agreement contains covenants which make the
acquisition of FCC or any Subsidiary by or merger with
another entity a condition of default or acceleration.
(q) Attached hereto as Exhibit A is FCC's Subsidiaries List which
sets forth the complete legal name of each Subsidiary and of
any other entity in which FCC and/or any Subsidiary owns or
controls 5% or more of its capital or voting stock or similar
interest, a designation of the laws under which each is
incorporated or organized, the percentage interest owned by
FCC or a Subsidiary in each such entity, the activities
conducted by each entity. Except as set forth in Exhibit A,
FCC has no Subsidiaries or interests of 5% or more of the
capital or voting stock of any entity, except any entity in
which such interest is owned or controlled in a fiduciary
capacity. Each of the Subsidiaries and other entities set
forth on Exhibit A is a corporation, limited liability
company or similar entity duly organized and validly existing
in good standing under the laws of the United States or the
state of its incorporation and has full power and authority
(including all licenses, franchises, permits and other
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<PAGE> 47
governmental authorizations which are legally required) to
engage in the businesses and activities now conducted by it
and is duly qualified to do business and is in good standing
in all jurisdictions where the failure to so qualify
(together with all such failures) would have a FCC Material
Adverse Effect. Except as may be set forth in Exhibit A, FCC
owns beneficially and of record all the outstanding shares of
capital stock of each Subsidiary and entity listed on Exhibit
A, which stock is fully paid and non-assessable, except as
provided by law. Neither FCC nor any Subsidiary listed on
Exhibit A is a party to any partnership or joint venture
except as may be set forth and described in Exhibit A.
(r) No employee of FCC or any of its Subsidiaries is represented,
for purposes of collective bargaining, by a labor
organization of any type. FCC is unaware of any efforts
during the past five years to unionize or organize any
employees of FCC or any of its Subsidiaries, and no claim
related to such employees under the Fair Labor Standards Act,
National Labor Relations Act, Civil Rights Act of 1964,
Walsh-Healy Act, Davis Bacon Act, Civil Rights Act of 1866,
Age Discrimination in Employment Act, Equal Pay Act of 1963,
Executive Order No. 11246, Federal Unemployment Tax Act,
Vietnam Era Veterans Readjustment Act, Occupational Safety
and Health Act, or any state or local employment related law,
order, ordinance or regulation, and no unfair labor practice,
discrimination or wage-and-hour claim is pending or, to the
best of the knowledge of FCC and its executive officers after
due inquiry, threatened against FCC or its Subsidiaries,
which claim has had or is reasonably likely to have a FCC
Material Adverse Effect.
(s) To the best of the knowledge of FCC and its executive
officers after due inquiry: (i) with respect to any
Contaminant, there are no material actions, proceedings or
investigations pending or threatened before any federal or
state environmental regulatory body, or before any federal or
state court, alleging non-compliance with
- 45 -
<PAGE> 48
or liability in connection with, by FCC or any Subsidiary,
CERCLA or any other Environmental Laws; (ii) there is no
reasonable basis for the institution of any material action,
proceeding or investigation against FCC or any Subsidiary
under any Environmental Law; (iii) neither FCC nor any
Subsidiary is responsible in any material respect under any
Environmental Law for any Release; (iv) neither FCC nor any
Subsidiary is responsible for any material costs of any
response action required by virtue of any Release of any
Contaminant into the environment including, without
limitation, costs arising from investigation, removal or
remediation of Contaminants, security fencing, alternative
water supplies, temporary evacuation and housing and other
emergency assistance undertaken by any environmental
regulatory body or any other person; (v) FCC and each
Subsidiary is, in all material respects, in compliance with
all applicable Environmental Laws; and (vi) no real property
owned or used by FCC or any Subsidiary contains any
Contaminant including, without limitation, any asbestos, PCBs
or petroleum products or byproducts in any form, the
presence, location or condition of which (a) could require
remediation or other corrective action pursuant to any
Environmental Law in any material respect, or (b) otherwise
would pose any significant health or safety risk unless
remedial measures were taken.
(t) FCC and/or the Subsidiaries (i) have surveyed the facilities
where FCC and its Subsidiaries conduct their businesses
including, without limitation, ATMs (collectively, the "FCC
Facilities") for compliance with ADA; (ii) have developed
action plans to remove architectural barriers including
communication barriers that are structural in nature from
existing FCC Facilities (collectively, the "FCC Barriers")
when such removal is "readily achievable," as that term is
defined in ADA; (iii) have finalized action plans for ATMs in
conformance with the Joint Final Rule of the ATBCB and the
Department of Transportation, effective August 16, 1993; (iv)
have developed or will develop schedules for FCC Barrier
removal from FCC Facilities in such action plans so that FCC
Barrier removal was complete on January
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<PAGE> 49
26, 1992 or will be completed as soon as practicable
thereafter; and (v) have removed all FCC Barriers in FCC
Facilities or will cause all FCC Barriers to be removed in
accordance with such action plans. All "alterations" (as such
term is defined in ADA) to FCC Facilities undertaken after
January 26, 1992 comply with ADA and the ADAAG. Effective
January 26, 1992, all plans and designs for new construction
to be utilized by FCC and the Subsidiaries comply with ADA
and ADAAG. To the best of FCC's knowledge, after due inquiry,
no material investigations, proceedings, or complaints,
formal or informal, are pending or threatened against FCC
and/or the Subsidiaries in connection with FCC Facilities
under ADA, ADAAG, or any other state or federal law
concerning accessibility for individuals with disabilities.
(u) The statements made in the FCC 1997 SEC Documents and the FCC
Disclosure Letter and any attachments thereto shall be deemed
to constitute representations and warranties of FCC under
this Merger Agreement to the same extent as if herein set
forth in full. Anything disclosed in the FCC 1997 SEC
Documents and/or the FCC Disclosure Letter or the attachments
thereto shall be considered to have been disclosed for
purposes of all representations, warranties and covenants
under this Merger Agreement.
(v) FCC has taken or has the legal right to take all action with
respect to the FCC Rights Plan so that the execution of this
Merger Agreement and the consummation of the merger and other
transactions, as contemplated by the Merger Agreement, did
not and will not result in the grant, issuance or triggering
of any right or entitlement or the obligation to grant or
issue any interest in FCC Common, BANC ONE Common or the
common stock of the Surviving Corporation to any person under
the FCC Rights Plan or enabling or allowing any Right
associated with the FCC Rights Plan to be exercised,
distributed or triggered at any time.
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<PAGE> 50
(u) Neither FCC nor, to FCC's best knowledge, any of its
affiliates has taken or agreed to take any action that would
prevent BANC ONE from accounting for the transactions to be
effected pursuant to this Agreement as a "pooling of
interests" in accordance with generally accepted accounting
principles and applicable SEC regulations. As of the date of
this Agreement, FCC has no reason to believe that the Merger
will not qualify as a "pooling of interests" for accounting
purposes.
16. Action by FCC Pending Effective Time. FCC agrees that from the date of
this Merger Agreement until the earlier of the Effective Time or the
time that this Merger Agreement is terminated, except as stated in
FCC's Disclosure Letter and except with prior written permission of
BANC ONE, which, in any case covered by Section 16(d) hereof, shall
not be unreasonably withheld:
(a) Beginning with the fourth calendar quarter of 1997 and for
each succeeding calendar quarter thereafter prior to that
calendar quarter in which the Effective Time shall occur, FCC
(i) will not declare or pay any dividends or make any
distributions on shares of FCC Common, except cash
dividends of $0.40 per share per quarter;
(ii) except as hereinbelow provided, will not declare or
pay any dividends or make any distributions in any
amount on its FCC Common for the quarter in which
the Effective Time shall occur and for which quarter
the shareholders of FCC Common are entitled to
receive regular quarterly dividends on the shares of
BANC ONE Common into which the shares of FCC Common
have been converted. It is the intent of this part
(ii) to provide that the holders of FCC Common will
receive either the payment of cash dividends on
their
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<PAGE> 51
shares of FCC Common or the payment of cash
dividends as the holders of shares of BANC ONE
Common received in exchange for the shares of FCC
Common for the calendar quarter during which the
Effective Time shall occur, but will not receive and
will not become entitled to receive for the same
calendar quarter both the payment of a cash dividend
as shareholders of FCC and the payment of a cash
dividend as the holders of the shares of BANC ONE
Common received in exchange for the shares of FCC
Common. In the event that FCC does not declare and
pay cash dividends on its FCC Common in a particular
calendar quarter because of FCC's reasonable
expectation that the Effective Time would occur in
said calendar quarter wherein the holders of FCC
Common would have become entitled to receive cash
dividends for such calendar quarter on the shares of
BANC ONE Common to have been exchanged for the
shares of FCC Common, and the Effective Time does
not in fact occur effective in said calendar
quarter, then, as a result thereof, FCC shall be
entitled to declare and pay a cash dividend (within
the limitations of this Section 16) on said shares
of FCC Common for said calendar quarter as soon as
reasonably practicable. For purposes of the
foregoing, provided that FCC and BANC ONE continue
to declare dividends and establish record dates
related thereto which are consistent with their
respective past practices, a dividend is "for" the
quarter in which the record date occurs. Neither
party will significantly change its established
pattern of record and payable dates. If BANC ONE
chooses to close after the first available date and
that choice causes FCC shareholders to receive the
FCC dividend rather than the BANC ONE dividend for
that quarter, then the dividend that FCC may elect
to pay on each share of FCC Common may be the amount
of the cash dividend paid by BANC ONE on each share
of BANC ONE Common multiplied by the Exchange Rate.
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<PAGE> 52
The declaration of any dividends within the limitations of
this Section 16(a) shall remain within the discretion of the
Board of Directors of FCC.
(b) FCC will not (and will not contract or agree to) issue, sell,
or grant any warrant, option, phantom stock option, stock
appreciation right or commitment of any kind for or related
to or acquire (or contract or agree to acquire) for value any
shares of its capital stock or otherwise effect any change in
connection with its equity capitalization, except as related
to (i) the outstanding stock options and performance shares
which have been granted requiring the issuance or purchase of
not more than 1,927,434 and 104,361 shares, respectively, of
FCC Common pursuant to the FCC Stock Option Plans and (ii)
the option to be granted to BANC ONE pursuant to Section 21
of this Merger Agreement.
(c) Except as otherwise set forth in or contemplated by this
Merger Agreement, FCC will carry on its businesses in
substantially the same manner as heretofore, keep in full
force and effect insurance comparable in amount and scope of
coverage to that now maintained by it and use its reasonable
best efforts to maintain and preserve its business
organization intact.
(d) Neither FCC nor any Subsidiary will (i) enter into any new
line of business, except as may be disclosed in the FCC
Disclosure Letter, or incur or agree to incur any obligation
or liability except liabilities and obligations (including
corporate debt issuances) incurred in the ordinary course of
business, except as may be directed by any regulatory agency;
(ii) except as may be directed by any regulatory agency or
required by any law or regulation, change its or the
Subsidiaries' lending, investment, liability management and
other material banking policies in any material respect;
(iii) except in the ordinary course of business and
consistent with prior practice, grant any
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<PAGE> 53
general or uniform increase in the rates of pay of employees;
(iv) establish any new employee benefit plan or amend any
existing plan (except as required by law) so as to increase
by any significant amount the benefits payable thereunder;
(v) incur or commit to any capital expenditures other than in
the ordinary course of business (which will in no event
include the establishment of new branches or any other
facilities, other than those currently planned and previously
disclosed in the FCC Disclosure Letter, or any capital
expenditures in excess of $250,000 for any individual project
for any purpose); or (vi) merge into, consolidate with permit
any other corporation to be merged or consolidated with it or
any of its Subsidiaries or acquire part of or all the assets
or stock of any other corporation or person or commit or
agree to any such merger, consolidation or acquisition.
(e) FCC will not change its or its Subsidiaries' methods of
accounting in effect at December 31, 1996, except as required
by changes in generally accepted accounting principles as
concurred in by Arthur Andersen L.L.P., or change any of its
methods of reporting income and deductions for Federal income
tax purposes from those employed in the preparation of FCC's
federal income tax returns for the taxable years ending
December 31, 1996 and 1995, except as required by changes in
law or as may be agreed to in settling any examinations by
the Internal Revenue Service.
(f) To the extent permitted by law, FCC will afford BANC ONE, its
officers and other authorized representatives, such access to
all books, records, bank examination reports, tax returns,
leases, contracts and documents of FCC and its Subsidiaries
and will furnish to BANC ONE such information with respect to
the assets and business of FCC and its Subsidiaries as BANC
ONE may from time to time reasonably request in connection
with this Merger Agreement and the transactions contemplated
hereby.
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<PAGE> 54
(g) FCC will promptly provide BANC ONE with copies of all
material written resolutions of FCC's Board of Directors or
shareholders, furnish BANC ONE with copies of all monthly and
other interim financial statements of FCC of the type
referred to in Section 15(b) as they become available, and
keep BANC ONE fully informed concerning all trends and
developments which in the reasonable opinion of FCC may have
a FCC Material Adverse Effect.
(h) FCC, its Subsidiaries and their respective officers,
directors and employees will not contract for or acquire, at
the expense of FCC or any of its Subsidiaries, a policy or
policies providing for insurance coverage for directors,
officers and/or employees of FCC and/or its Subsidiaries for
any period subsequent to the Effective Time for events
occurring before or after the Effective Time; provided,
however, that FCC may (i) renew, extend or replace existing
policies in the ordinary course consistent with past
practices for periods of not greater than one year and (ii)
acquire a policy which provides coverage through the date
that is three years after the Effective Time for those
directors, officers and/or employees of FCC and/or its
Subsidiaries who are presently provided coverage by policies
obtained by FCC with respect to (a) events related to this
Merger Agreement and the events contemplated by this Merger
Agreement and (b) claims and/or causes of action arising from
or related to events which occurred prior to the Effective
Time.
(i) If BANC ONE shall determine, in order to secure the necessary
approvals or advisory opinions of or to minimize possible
objections to the Merger by government regulatory agencies,
including, but not limited to the Board, the Commission and
the United States Department of Justice, that (i) BANC ONE
should not acquire certain assets of FCC and its Subsidiaries
and/or (ii) following the Merger BANC ONE or its subsidiaries
should not retain certain assets or liabilities of FCC, BANC
ONE shall so notify FCC and identify those assets and/or
liabilities, if any, which BANC
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<PAGE> 55
ONE proposes that BANC ONE should not acquire or retain. BANC
ONE shall thereafter determine which assets and/or
liabilities, if any, should be sold or assigned by FCC and
its Subsidiaries and/or by BANC ONE and its subsidiaries.
Each of FCC and BANC ONE, as the case may be, agree to enter
into binding agreements or cause its subsidiaries to enter
into such agreements reasonably acceptable to BANC ONE, to
divest itself of the assets and/or liabilities so designated,
subject to such regulatory approvals as may be required;
provided, however, that (i) the effectiveness of any such
agreement entered into by FCC and/or its Subsidiaries shall
be subject to the condition that said divestiture shall not
be consummated, except with the approval of FCC, (a) before
immediately prior to the Effective Time or, (b) with Board
approval, following the Effective Time; (ii) no aspect of the
divestiture shall be inconsistent with any of the
representations made to Coopers & Lybrand in the request for
its tax opinion as described in Section 12 of this Agreement,
any amendment or supplement thereto, and any condition of any
tax opinion issued to the parties prior to the divestiture
and relating to the Merger; (iii) such disposition or
divestiture shall not affect the Exchange Rate or number of
shares of BANC ONE Common to be received by the shareholders
of FCC; and (iv) FCC shall not be required to (and BANC ONE
shall not, without FCC's prior approval) divulge to any
purchaser information which, in FCC's reasonably judgment,
would place it at a competitive disadvantage with such
purchaser, and in any event such purchaser shall, before
receiving any confidential information, have executed a
confidentiality agreement in a form approved by FCC.
(i) FCC will not take any action that would prevent or impede the
Merger from qualifying (i) for "pooling of interests"
accounting treatment or (ii) as a reorganization within the
meaning of Section 368 of the Code.
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<PAGE> 56
17. Action by BANC ONE Pending Effective Time. BANC ONE agrees that from
the date of this Agreement until the Effective Time, except as stated
in the BANC ONE Disclosure Letter and except with prior written
permission of FCC:
(a) BANC ONE will not adopt or implement any amendment to its
Articles of Incorporation or any plan of reorganization which
would affect in any manner the terms and provisions of the
shares of BANC ONE Common or the rights of the holders of
such shares or reclassify the BANC ONE Common.
(b) Except as otherwise set forth in or contemplated by this
Merger Agreement, BANC ONE will carry on its businesses in
substantially the same manner as heretofore, keep in full
force and effect insurance comparable in amount and scope of
coverage to that now maintained by it and use its reasonable
best efforts to maintain and preserve its business
organization intact.
(c) BANC ONE will not change its methods of accounting in effect
at December 31, 1996, except as required by changes in
generally accepted accounting principles as concurred in with
Coopers & Lybrand, its independent auditors, or change any of
its methods of reporting income and deductions for federal
income tax purposes from those employed in the preparation of
the federal income tax returns of BANC ONE for the taxable
years ending December 31, 1996 and 1995, except as required
by changes in law.
(d) To the extent permitted by law, BANC ONE will afford FCC, its
officers and other authorized representatives, such access to
all books, records, bank examination reports, tax returns,
leases, contracts and documents of BANC ONE and its
subsidiaries and will furnish to FCC such information with
respect to the assets, earnings and business of BANC ONE and
its subsidiaries as FCC may from time to
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<PAGE> 57
time reasonably request in connection with this Merger
Agreement and the transactions contemplated hereby.
(e) BANC ONE agrees that while this Merger Agreement is in effect
it will not acquire, or enter into negotiations to acquire,
directly or indirectly, any bank located in Louisiana with
deposits in excess of $1.5 billion without the written
consent of FCC, which consent will not be unreasonably
withheld.
(f) BANC ONE will not take any action that would prevent or
impede the Merger from qualifying (i) for "pooling of
interests" accounting treatment or (ii) as a reorganization
within the meaning of Section 368 of the Code; provided,
however, that nothing contained herein shall limit the
ability of BANC ONE to exercise its rights under the option
to be granted to BANC ONE pursuant to Section 21 of the
Agreement.
18. Conditions to Obligations of BANC ONE and DELTA. The obligations of
BANC ONE and DELTA to effect the Merger are subject, unless waived by
BANC ONE, to the satisfaction on or prior to the Closing of the
following conditions:
(a) There shall not have been any change in the consolidated
financial condition, aggregate net assets, shareholders'
equity, business or operating results of FCC and its
Subsidiaries, taken as a whole, from June 30, 1997 to the
Effective Time that has had a FCC Material Adverse Effect.
(b) FCC shall not have paid cash dividends from September 30,
1997 to the Effective Time except as permitted under this
Merger Agreement.
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<PAGE> 58
(c) All representations by FCC contained in this Merger Agreement
shall be true at, or as of, the Closing Date as though such
representations were made at and as of said date, except for
(i) changes contemplated by the Merger Agreement, (ii)
representations as of a specified time other than the Closing
Date, which shall be true at such specified time (provided,
however, that the representation of FCC contained in Section
15(e) shall be true in all material respects as applied to
the Consolidated Balance Sheet of FCC included in the most
recently available quarterly or annual report to FCC
shareholders and/or FCC's report to the SEC on Form 10-Q or
Form 10-K as of the close of the most recent calendar quarter
prior to the Effective Time and the reserve for possible loan
and lease losses included therein, as though each reference
to "June 30, 1997" in such section were a reference to the
last day of the most recent calendar quarter prior to the
Effective Time), and (iii) inaccuracies or breaches which do
not, individually or in the aggregate, have a FCC Material
Adverse Effect.
(d) BANC ONE shall have received the opinion of legal counsel for
FCC, dated as of the Closing Date, substantially to the
effect set forth in Exhibit C hereto, together with a copy of
the Articles of Incorporation, as amended, of FCC certified
by the Secretary of State of the State of Louisiana and a
copy of the charter documents, as amended, of each Subsidiary
and, for FCC and each Subsidiary, Certificates of Good
Standing dated as of a date not more than 20 days prior to
the Closing Date from the Louisiana Secretary of State, the
OCC, Commissioner or other appropriate government or
regulatory official.
(e) FCC shall have performed, in all material respects, all
agreements and conditions required by this Merger Agreement
to be performed and satisfied by it at or prior to the
Closing Date.
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<PAGE> 59
(f) As of the close of the most recent calendar quarter (or if
the Effective Time shall occur within 20 days following the
close of a calendar quarter, then as of the next preceding
calendar quarter) cumulative net income reported by FCC since
September 30, 1997 shall be greater than or equal to the
amount calculated by multiplying (x) $30,571,000 by (y) the
number of full calendar quarters which have passed since
September 30, 1997 and for which earnings have been reported
by FCC as of such date, times (z) 0.9. As used in this
Section, "reported" means reported on FCC's financial
statements prepared in accordance with generally accepted
accounting principles applied on a basis consistent with
FCC's financial statements for the years ended December 31,
1996 and 1995, as included in FCC's reports to the SEC on
Forms 10-K or FCC's annual reports to shareholders, subject
to any subsequent adjustments required to be reported whether
or not such adjustments have, as yet, been reported with the
following adjustments, if any, net of related income tax
savings and costs, which were reflected in net income for the
relevant period(s) added back into or deducted from net
income for the applicable period: (i) investment banking
expenses and outside legal and accounting fees and any other
expenses associated with or resulting from the transactions
contemplated by this Agreement; (ii) gains or losses on sales
of assets outside of the ordinary course of business; (iii)
stock-based incentive expenses in excess of $2,740,000 per
quarter ($1,781,000 per quarter after tax); and (iv) any
other expenses upon which BANC ONE and FCC shall mutually
agree.
(g) The total number of shares of FCC Common issued and
outstanding (not including treasury shares held by FCC),
together with (i) the total number of shares of FCC Common
related to outstanding options and performance shares with
respect to The FCC Stock Option Plans and (ii) the total
number of shares of FCC Common which would be issued
immediately prior to the Effective Time assuming that all of
the
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<PAGE> 60
FCC Debentures were then converted into FCC Common pursuant
to the terms of the Indentures, shall not be more than
44,460,000 shares.
(h) The holders of all credit agreements on which FCC or any of
the Subsidiaries is the maker, issuer or guarantor and which
contain provisions which make the acquisition of FCC by or
merger into another entity a condition of default or
acceleration, which default or acceleration would have a FCC
Material Adverse Effect, shall have provided BANC ONE with a
written waiver of all such default or acceleration
provisions.
(i) FCC shall have furnished BANC ONE a certificate, signed on
its behalf by the Chairman or President and the Secretary or
an Assistant Secretary of FCC and dated as of the Closing
Date, certifying as to the form of and adoption of
resolutions of the Board and shareholders of FCC approving
the Merger Agreement and the Merger, respectively, and to the
effect that the conditions described in Paragraphs (a), (b),
(c), (e), (f) and (g) of this Section 18 have been satisfied.
(j) BANC ONE shall have received the opinion of Correro Fishman
Haygood Phelps Weiss Walmsley & Casteix, L.L.P., New Orleans,
Louisiana, legal counsel for FCC, dated as of the Closing
Date, opining that in the opinion of such counsel FCC has
taken action with respect to the FCC Rights Plan appropriate
to prevent the approval, execution or delivery of this Merger
Agreement or the acquisition of shares of FCC Common by BANC
ONE pursuant hereto, or consummation of the Merger or other
transaction contemplated by this Merger Agreement from
resulting in the grant, issuance or triggering of any right
or entitlement or the obligation to grant or issue any
interest in FCC Common, BANC ONE Common or the common stock
of the Surviving Corporation to any person under the FCC
Rights Plan or enabling or
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<PAGE> 61
allowing any right associated with the FCC Rights Plan to be
exercised, distributed or triggered.
(k) Coopers & Lybrand shall have issued its written opinion,
dated as of the Closing Date, satisfactory, in good faith, to
BANC ONE, advising that the transaction herein contemplated
may be properly accounted for as a pooling of interests;
provided, however, that this condition shall be deemed to
have been waived by BANC ONE if the inability to obtain such
opinion arises out of, or results directly or indirectly
from, any action taken by BANC ONE, DELTA or any of their
respective subsidiaries contrary to that contemplated by this
Merger Agreement.
19. Conditions to Obligations of FCC. The obligations of FCC to effect the
Merger are subject, unless waived by FCC, to the satisfaction on or
prior to the Closing of the following conditions:
(a) There shall not have been any change in the consolidated
financial condition, aggregate net assets, shareholders'
equity, business, or operating results of BANC ONE and its
subsidiaries, taken as a whole, from June 30, 1997 to the
Effective Time that has had a BANC ONE Material Adverse
Effect.
(b) All representations by BANC ONE and DELTA contained in this
Merger Agreement shall be true at, or as of, the Closing Date
as though such representations were made at and as of said
date, except for changes (i) contemplated by this Merger
Agreement, (ii) representations as of a specified time other
than the Closing Date, which shall be true in all material
respects at such specified time (provided, however, that the
representation of BANC ONE contained in Section 13(e) shall
be true in all material respects as applied to the
Consolidated Balance Sheet of BANC ONE included in the most
recently available quarterly or annual report to BANC ONE's
shareholders
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<PAGE> 62
and/or BANC ONE's report to the SEC on Form 10-Q or Form 10-K
as of the close of the most recent calendar quarter prior to
the Effective Time and the reserve for possible loan and
lease losses included therein, as though each reference to
"June 30, 1997" in such section were a reference to the last
day of the most recent calendar quarter prior to the
Effective Time), and (iii) inaccuracies or breaches which do
not, individually or in the aggregate, have a BANC ONE
Material Adverse Effect. The representation and warranty of
BANC ONE in Section 13(g) shall be true and correct on the
Closing Date.
(c) FCC shall have received the opinion of counsel for BANC ONE
and DELTA, (i) on and dated the date on which the
registration statement described in Section 10(d) of this
Merger Agreement shall have become effective as described in
Section 20(c) of this Merger Agreement, substantially to the
effect of paragraphs numbered 6, 7 and 8 of Exhibit D hereto
and (ii) on and dated as of the Closing Date substantially to
the effect set forth in Exhibit D hereto, together with
copies of the Articles of Incorporation of each of BANC ONE
and DELTA certified by the Secretary of State of the State of
Ohio and copies of such other charter documents and
Certificates of Good Standing of BANC ONE and DELTA dated as
of a date not more than 20 days prior to the day of the
Closing Date from the Ohio Secretary of State as FCC shall
reasonably require.
(d) BANC ONE and DELTA shall have performed, in all material
respects, all agreements and conditions required by this
Merger Agreement to be performed and satisfied by it at or
prior to the Closing Date.
(e) As of the close of the most recent calendar quarter (or if
the Effective Time shall occur within 20 days following the
close of a calendar quarter, then as of the close of the next
preceding calendar quarter) cumulative net income reported by
BANC
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<PAGE> 63
ONE since June 30, 1997 shall be greater than or equal to the
amount calculated by multiplying (x) $394,000,000 by (y) the
number of full calendar quarters which have passed since June
30, 1997 and for which earnings have been reported by BANC
ONE as of such date, times (z) 0.9. As used in this Section,
"reported" means reported on BANC ONE's consolidated
financial statements prepared in accordance with generally
accepted accounting principles applied on a basis consistent
with BANC ONE's consolidated financial statements for the
years ended December 31, 1996 and 1995, as included in BANC
ONE's reports to the SEC on Forms 10-K or BANC ONE's annual
reports to shareholders subject to any subsequent adjustments
required to be reported to the SEC whether or not such
adjustments have, as yet, been reported with the effect of
any changes in accounting principles required to be adopted
by BANC ONE by any regulatory authority or under generally
accepted accounting principles, if any, net of related income
tax savings and costs, which were reflected in net income for
the relevant period(s) added back into or deducted from net
income for the relevant period(s).
(f) BANC ONE shall have furnished FCC a certificate, signed by
the Chairman or President or an Executive Vice President and
by the Secretary or Assistant Secretary of BANC ONE and dated
as of the Closing Date certifying as to the form of and
adoption of the resolutions of the Board of BANC ONE
approving the Merger Agreement and the Merger, and to the
effect that the conditions described in Paragraphs (a), (b),
(d), (e), (g) and (h) of this Section 19 have been satisfied
as to it.
(g) This Merger Agreement and the Merger shall have been duly
approved and adopted by the requisite affirmative vote of
BANC ONE as the sole shareholder of DELTA or by the unanimous
written consent of BANC ONE as the sole shareholder of DELTA.
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<PAGE> 64
(h) The shares of BANC ONE Common to be issued to the holders of
FCC Common shall have been approved for listing on the NYSE.
(i) FCC shall have received the opinion of Keefe, Bruyette &
Woods, Inc. dated as of a date not more than five days prior
to the date of the Proxy Statement/Prospectus with respect to
the fairness of the transaction to FCC's shareholders from a
financial point of view satisfactory in form and substance to
FCC and its counsel, and such opinion shall not have been
withdrawn prior to the Effective Time.
20. Conditions to Obligations of All Parties. In addition to the
provisions of Sections 18 and 19 hereof, the obligations of BANC ONE
and FCC to effect the Merger shall be subject to the satisfaction of
the following conditions on or prior to the Effective Time:
(a) The parties hereto shall have received all necessary
approvals of governmental agencies and authorities of the
transactions contemplated by this Merger Agreement and each
of such approvals shall remain in full force and effect at
the Effective Time. BANC ONE shall notify FCC promptly upon
receipt of all necessary governmental approvals.
(b) At the Effective Time, (i) no party hereto shall be subject
to any order, decree or injunction of a court or governmental
agency of competent jurisdiction which enjoins or prohibits
the consummation of the Merger; (ii) no statute, rule,
regulation, order, injunction or decree shall have been
enacted, entered, promulgated or enforced by any governmental
authority which prohibits or makes illegal consummation of
the Merger; and (iii) there shall have been no stop order
issued or threatened by the SEC that suspends or would
suspend the effectiveness of the registration statement, and
no proceeding by the SEC shall have been commenced, pending
or overtly threatened for such purpose.
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<PAGE> 65
(c) The registration statement required to be filed by BANC ONE
pursuant to Section 10(d) of this Merger Agreement shall have
become effective by an order of the SEC, and the shares of
BANC ONE Common to be exchanged in the Merger shall have been
qualified or exempted under all applicable state securities
laws.
(d) This Merger Agreement and the Merger shall have been duly
approved and adopted by the requisite affirmative vote of the
shareholders of FCC.
(e) Coopers & Lybrand shall have issued its written opinion,
dated as of the Closing Date, satisfactory to FCC and BANC
ONE, respectively, substantially to the effect set forth in
clauses (a) through (e) of Section 12 of this Merger
Agreement and there shall exist as of, at or immediately
prior to the Effective Time, no facts or circumstances which
would render such opinion inapplicable in any respect to the
transactions to be consummated hereunder.
21. Option to Purchase
By not later than October 20, 1997, FCC shall grant to BANC ONE an
option to purchase shares of FCC Common in substantially the form of
Exhibit E and shall execute and deliver to BANC ONE an option
agreement in substantially the form of said Exhibit E.
22. Indemnification.
(a) In the event of any threatened or actual claim, action, suit,
proceeding or investigation, whether formal or informal and
whether civil, administrative or criminal, including, without
limitation, any such claim, action, suit, proceeding or
investigation pursuant to which any person who is now, or has
been at any time prior
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<PAGE> 66
to the date hereof, or who becomes prior to the Effective
Time, a director, officer, employee, fiduciary or agent of
FCC or any of its Subsidiaries (the "Indemnified Parties")
is, or is threatened to be, made a party or a witness, based
in whole or in part on, or arising in whole or in part out
of, or pertaining to, this Merger Agreement or any of the
transactions contemplated hereby (a "Merger Related Event"),
whether in any case asserted or arising before or after the
Effective Time, the parties hereto agree to cooperate and use
their reasonable best efforts to defend against and respond
to such claim, action, suit, proceedings or investigation.
With respect to any Merger Related Event, and conditioned
upon the Merger becoming effective, BANC ONE shall indemnify,
defend and hold harmless, as and to the fullest extent
permitted by applicable law, each Indemnified Party against
any and all losses, claims, damages, liabilities, costs,
expenses (including attorneys' fees and expenses), judgments
and fines, and amounts paid in settlement, in connection with
any such threatened or actual claim, action, suit,
proceedings or investigation; provided, however, that BANC
ONE shall not be liable for any settlement effected without
its prior written consent (which consent shall not be
unreasonably withheld). In the event of any such threatened
or actual claim, action, suit, proceedings or investigation
(whether asserted or arising before or after the Effective
Time), (i) BANC ONE shall promptly pay expenses (including
attorney's fees and expenses) in advance of the final
disposition of any claim, suit, proceedings or investigation
to each Indemnified Party to the fullest extent permitted by
applicable law, and (ii) BANC ONE shall use its reasonable
best efforts to vigorously defend any such matter; provided,
however, that BANC ONE's obligations as herein set forth
shall not apply to any losses, claims, damages, liabilities,
costs, expenses, judgments, fines and amounts paid in
settlement by any Indemnified Party involving the fraud, bad
faith and/or reckless disregard of such Indemnified Party or
related to any threatened or actual claim, action, suit,
proceedings or investigation brought by BANC ONE against any
Indemnified Party. Any Indemnified Party wishing to claim
indemnification and defense under this
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<PAGE> 67
Section 22(a) shall, upon the earlier to occur of (A)
receiving actual notice of any such claim, action, suit,
proceeding or investigation, (B) otherwise learning of such
claim, action, suit, proceeding or investigation or (C)
receiving other information which would give a reasonably
prudent person reason to believe that such a claim, action,
suit, proceeding or investigation had or might be brought,
notify BANC ONE thereof as soon as reasonably practicable
thereafter. BANC ONE's obligations pursuant to this Section
22(a) are conditioned upon BANC ONE being given prompt
written notice of any such claim, action, suit, proceeding or
investigation, together with the right to control and direct
the investigation, defense and/or settlement of each such
matter, and further provided that the Indemnified Party shall
reasonably cooperate with BANC ONE in connection therewith.
(b) BANC ONE shall insure that all rights to indemnification and
defense and all limitations of liability existing in favor of
the Indemnified Parties as provided in any of FCC's Articles
of Incorporation or By-laws or similar governing documents of
any of its Subsidiaries, or in indemnity agreements between
FCC and an Indemnified Party as in effect as of October 1,
1997, or as otherwise provided for or allowed under
applicable law as in effect as of the date hereof or as such
law is amended at a time prior to the Effective Time, with
respect to claims or liabilities arising from facts or events
existing or occurring prior to the Effective Time, shall
survive the Merger and shall continue in full force and
effect, without any amendment thereto, for a period of not
less than ten (10) years from the Effective Time; provided,
however, that all rights to indemnification in respect of any
claim asserted or made within such period shall continue
until the final disposition of such claim.
(c) From and after the Effective Time, persons who, immediately
prior to the Effective Time, served as the directors,
officers and employees of FCC and its Subsidiaries, who,
following the Effective Time, continue as directors, officers
and/or employees
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<PAGE> 68
of the Surviving Corporation or one of its subsidiaries,
shall have indemnification and defense rights having
prospective application only, except, however, for the
indemnification and defense rights set forth in paragraphs
(a), (b) and (f) of this Section 22. These prospective
indemnification and defense rights shall consist of (i) such
rights to which directors, officers and employees are
entitled under the provisions of the Articles of
Incorporation, By-laws or similar governing documents of the
Surviving Corporation and its subsidiaries, as applicable, as
in effect from time to time after the Effective Time, as
applicable, and provisions of applicable law as in effect
from time to time after the Effective Time and (ii) those
indemnification and defense rights set forth in agreements,
if any, between BANC ONE and the directors and executive
officers of the Surviving Corporation and its subsidiaries.
Such agreements, if any, which shall be executed as soon as
practicable following the Effective Time, shall provide
certain indemnification and defense rights that are
comparable to those provided to directors, officers and
employees of BANC ONE and its subsidiaries generally, but
which rights may be greater or lesser than the
indemnification and defense rights available in clause (i)
above.
(d) The obligations of BANC ONE and DELTA provided under
paragraphs (a), (b) and (f) of this Section 22 are intended
to be the joint and several obligations of BANC ONE and the
Surviving Corporation and to benefit, and be enforceable
against BANC ONE and the Surviving Corporation directly by
the Indemnified Parties, and shall be binding on all
respective successors and permitted assigns of BANC ONE and
the Surviving Corporation. The indemnifications provided for
in clauses (a), (b) and (f) of this Section 22 are separate
from and independent of one another, such that failure to
qualify for one of them shall not of itself constitute a
failure to qualify for any other of them.
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<PAGE> 69
(e) In the event BANC ONE or the Surviving Corporation or any of
its successors or assigns (i) consolidates with or merges
into any other person and shall not be the continuing or
surviving corporation or entity of such consolidation or
merger, or (ii) transfers or conveys all or substantially all
of its properties and assets to any person, then, and in each
such case, proper provision shall be made so that the
successors and assigns of BANC ONE or the Surviving
Corporation, as the case may be, assume the obligations set
forth in this Section 22.
(f) BANC ONE will indemnify and hold harmless FCC and its
Subsidiaries, and each of their respective directors and
officers, and each controlling person of FCC within the
meaning of the 1933 Act, against any claims, suits,
proceedings, investigations or other actions ("Claims"), and
any related losses, damages, costs, expenses, liabilities or
judgments, whether joint, several or solidary, insofar as
they arise out of or are based upon an untrue statement or
alleged untrue statement of a material fact made in the Proxy
Statement/Prospectus or the related registration statement,
or an omission or alleged omission therefrom of a material
fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not
misleading, and will reimburse each such person promptly as
incurred for legal and other expenses reasonably incurred in
connection with investigating or defending any such claims;
provided that BANC ONE will not be liable to the extent that
any such Claim arises out of or is based upon any such untrue
statement or omission or alleged untrue statement or omission
made in reliance on and in conformity with information
furnished to BANC ONE by FCC or any of its Subsidiaries or,
with respect to any other indemnified person, by that person.
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<PAGE> 70
23. Non-Survival of Representations and Warranties. The respective
representations and warranties of FCC, BANC ONE and DELTA contained in
this Merger Agreement shall not survive the Effective Time, except
that BANC ONE's representation and warranty in Section 13(g) will
survive for the benefit of the shareholders of FCC.
24. Governing Law. This Merger Agreement shall be construed and
interpreted according to the applicable laws of the State of
Louisiana, except as the laws of the State of Ohio are expressly
applicable to the Merger.
25. Assignment. This Merger Agreement and all of the provisions hereof
shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and permitted assigns, but neither
this Merger Agreement nor any of the rights, interests, or obligations
hereunder shall be assigned by any of the parties hereto without the
prior written consent of the other parties.
26. Satisfaction of Conditions; Termination.
(a) BANC ONE and DELTA agree to use their reasonable best efforts
to obtain satisfaction of the conditions of this Merger
Agreement insofar as they relate to BANC ONE and DELTA, and
FCC agrees to use its reasonable best efforts to obtain the
satisfaction of the conditions of this Merger Agreement
insofar as they relate to FCC, and in each case as soon as
possible.
(b) At any time prior to the Effective Time, whether before or
after approval of the Merger by BANC ONE, as the sole
shareholder of DELTA, or by FCC's shareholders, this Merger
Agreement may be terminated upon the occurrence of any of the
following by written notice from BANC ONE to FCC (authorized
by the
- 68 -
<PAGE> 71
Board of Directors of BANC ONE), or by written notice from
FCC to BANC ONE (authorized by the Board of Directors of
FCC), as the case may be:
(i) By BANC ONE, if any material condition to the
obligations of BANC ONE and/or DELTA set forth in
Section 18 or 20 is not or cannot be substantially
satisfied at the time or times contemplated thereby
and such condition is not waived by BANC ONE, or by
FCC, if any material condition to the obligations of
FCC set forth in Section 19 or 20 is not or cannot
be substantially satisfied at the time or times
contemplated thereby and such condition is not
waived by FCC;
(ii) In the event of a material breach by the other of
any representation, warranty, condition or agreement
contained in this Merger Agreement that is not cured
within 30 days of the time that written notice of
such breach is received by such other party from the
party giving notice, but only if, in the case of a
material breach of any representation or warranty,
all such breaches constitute a FCC Material Adverse
Effect (if BANC ONE is the party seeking to
terminate) or a BANC ONE Material Adverse Effect (if
FCC is the party seeking to terminate);
(iii) If the Merger shall not have been consummated on or
before October 19, 1998; or
(iv) If the shareholders of FCC shall fail to approve the
Merger and this Merger Agreement at the
shareholders' meeting that is called for that
purpose.
(c) In the event that the pre-acquisition investigation and
review described in Section 10(n) of this Merger Agreement
discloses matters which both (A) are either (i)
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<PAGE> 72
inconsistent in any material respect with any of the
representations and warranties of FCC contained in this
Agreement or (ii) in the reasonable judgment of the Board of
Directors of BANC ONE, either (x) are of such significance as
to materially and adversely affect the financial condition or
the results of operations of FCC and its Subsidiaries on a
consolidated basis or (y) deviate materially and adversely
from FCC's audited financial statements for the year ended
December 31, 1996 or FCC's unaudited financials for the six
month period ended June 30, 1997, and (B) in any such case
constitute a FCC Material Adverse Effect, then BANC ONE may
elect to terminate this Merger Agreement by giving written
notice of termination to FCC within seven days of the
conclusion of such pre-acquisition investigation.
(d) In the event that the pre-acquisition investigation and
review described in Section 10(o) of this Merger Agreement
discloses matters which both (A) are either (i) inconsistent
in any material respect with any of the representations and
warranties of BANC ONE contained in this Agreement or (ii) in
the reasonable judgment of the Board of Directors of FCC,
either (x) are of such significance as to materially and
adversely affect the financial condition or the results of
operations of BANC ONE and its subsidiaries on a consolidated
basis or (y) deviate materially and adversely from BANC ONE's
audited financial statements for the year ended December 31,
1996 or BANC ONE's unaudited financials for the six month
period ended June 30, 1997, and (B) in any such case
constitute a BANC ONE Material Adverse Effect, then FCC may
elect to terminate this Merger Agreement by giving written
notice of termination to FCC within seven days of the
conclusion of such pre-acquisition investigation.
(e) This Merger Agreement may be terminated and abandoned
(whether before or after approval of the Merger by the
shareholder of DELTA or by FCC's shareholders) by
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<PAGE> 73
mutual written consent of FCC, DELTA and BANC ONE authorized
by their respective Boards of Directors.
(f) By FCC if its Board of Directors so determines by a vote of a
majority of the members of its entire Board, at any time
after the Determination Date, as hereinafter defined, is
known and prior to the conclusion of the Closing, if either
(x) both of the following conditions are satisfied:
(i) the Average Closing price shall be less than $49.67,
and
(ii) (A) the number obtained by dividing the Average
Closing Price, as hereinafter defined, by the
Starting Price, as hereinafter defined, (such number
being referred to herein as the "BANC ONE Ratio")
shall be less than (B) the number obtained by
dividing the Average Index Price, as hereinafter
defined, by the Index Price of the Starting Date, as
those terms are hereinafter defined, and subtracting
0.10 from the quotient in this clause (x)(ii)(B)
(such number being referred to herein as the "Index
Ratio"); or
(y) the Average Closing Price shall be less than $47.46; subject,
however, to the following four sentences. If FCC elects to exercise
its termination right pursuant to the immediately preceding sentence,
it shall give prompt written notice to BANC ONE which notice shall
specify which of the clauses (x) or (y) is applicable (or if both
would be applicable, which clause is being invoked); provided that
such notice or election to terminate may be withdrawn at any time
within the aforementioned period. During the five business day period
commencing with its receipt of such notice, BANC ONE shall have the
option in the case of a failure to satisfy the condition in clause
(x), of adjusting the Exchange Rate to equal the lesser of (i) a
number equal to a quotient (rounded to the nearest one-thousandth),
the numerator of which is the product of $49.67, and the Exchange Rate
(as then in effect) and
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<PAGE> 74
the denominator of which is the Average Closing Price, and (ii) a
number equal to a quotient (rounded to the nearest one-thousandth),
the numerator of which is the Index Ratio multiplied by the Exchange
Rate (as then in effect) and the denominator of which is the BANC ONE
Ratio. During such five business day period, BANC ONE shall have the
option, in the case of a failure to satisfy the condition in clause
(y), to elect to increase the Exchange Rate to equal a number equal to
a quotient (rounded to the nearest one-thousandth), the numerator of
which is the product of $47.46 and the Exchange Rate (as then in
effect) and the denominator of which is the Average Closing Price. If
BANC ONE makes an election contemplated by either of the two preceding
sentences within such five business day period, it shall give prompt
written notice to FCC of such election and the revised Exchange Rate,
whereupon no termination shall have occurred pursuant to this Section
26(f) and this Agreement shall remain in effect in accordance with its
terms (except as the Exchange Rate shall have been so modified), any
references in this Agreement to "Exchange Rate" shall thereafter be
deemed to refer to the Exchange Rate as adjusted pursuant to this
Section 26(f), and the Closing shall be rescheduled to the date that
is the second business day following the making of such election.
For purposes of this Section 26(f), the following terms shall have the
meanings indicated:
"Average Closing Price" means the average of the daily last
sale prices of BANC ONE Common stock as reported on the NYSE
Composite Transactions reporting system (as reported in The
Wall Street Journal or, if not reported therein, in another
mutually agreed upon authoritative source) for the five
consecutive full trading days in which such shares are traded
on the NYSE ending at the close of trading on the
Determination Date.
"Average Index Price" means the average of the Index Prices
for the five consecutive full NYSE trading days ending at the
close of trading on the Determination Date.
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<PAGE> 75
"Determination Date" means the second business day prior to
the Closing Date.
"Index Group" means the group of each of the 18 bank holding
companies listed below, the common stock of all of which
shall be publicly traded and as to which there shall not have
been since the Starting Date and before the Determination
Date, any public announcement of a proposal for such company
to be acquired or for such company to acquire another company
or companies in transactions with a value exceeding 25% of
the acquiror's market capitalization. In the event that the
common stock of any such company ceases to be publicly traded
or such an announcement is made, such company will be removed
from the Index Group, and the weights (which have been
determined based on the number of outstanding shares of
common stock) redistributed proportionately for purposes of
determining the Index Price.
The 18 bank holding companies and the weights attributed to
them are as follows:
<TABLE>
<CAPTION>
Bank Holding Company Weighting
-------------------- ---------
<S> <C>
Citicorp 14.60%
BankAmerica Corporation 12.19
Chase Manhattan Corp. 11.76
First Union Corporation 6.46
Wells Fargo & Company 5.82
US Bancorp 5.63
Norwest Corporation 5.46
First Chicago 5.02
Bank of New York Company, Inc. 4.27
Fleet Financial Group, Inc. 3.72
PNC Bank Corp. 3.50
CoreStates 3.46
SunTrust 3.34
KeyCorp 3.19
National City Corp 2.98
Mellon Bank Corporation 2.98
BankBoston 2.86
Wachovia Corporation 2.76
</TABLE>
- 73 -
<PAGE> 76
<TABLE>
<S> <C>
Total 100.0%
</TABLE>
"Index Price" on a given date means the weighted average (weighted
in accordance with the factors listed above) of the closing prices
on such date of the companies composing the Index Group.
"Starting Date" means the last full day on which the NYSE was open
for trading prior to the execution of this Agreement.
"Starting Price" shall mean the last sale price per share of BANC
ONE Common Stock on the Starting Date, as reported by the NYSE
Composite Transactions reporting system (as reported in The Wall
Street Journal or, if not reported therein, in another mutually
agreed upon authoritative source.)
If any company belonging to the Index Group or BANC ONE declares or
effects a stock dividend, reclassification, recapitalization,
split-up, combination, exchange of shares or similar transaction
between the Starting Date and the Determination Date, the prices
for the common stock of such company or BANC ONE shall be
appropriately adjusted for the purposes of applying this Section
26(f).
(g) In the event of termination of this Merger Agreement for any
reason, including, but not limited to, the failure to receive
the approval of FCC's shareholders, the failure to receive or
the withdrawal prior to the Effective Time of the Keefe
Bruyette & Woods, Inc. described in Section 19(i) of this
Merger Agreement, or termination pursuant to the provisions
of Section 26(c) or (d), (i) this Merger Agreement shall
cease and terminate and the acquisition of FCC shall not be
consummated pursuant to the terms of this Merger Agreement.
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<PAGE> 77
Additionally, in the event of termination of this Merger
Agreement caused otherwise than by a willful breach of this
Merger Agreement that continues despite notice, none of BANC
ONE, DELTA nor FCC shall have any liability to any other
party under this Merger Agreement of any nature whatever,
except for (i) obligations to pay expenses expressly assumed
by BANC ONE in Section 10(e) and (ii) the obligations of the
parties with respect to confidential information as set forth
in Section 10(f), which obligations shall survive any such
termination.
(h) If termination of this Merger Agreement shall be judicially
determined to have been caused by willful breach of this
Merger Agreement that continues despite notice, in addition
to other remedies at law or equity for breach of this Merger
Agreement, the party so found to have willfully breached this
Merger Agreement shall indemnify the other parties for their
respective costs, fees and expenses of their counsel,
accountants and other experts and advisors as well as fees
and expenses incident to negotiation, preparation and
execution of this Merger Agreement and related documentation
and their shareholders' meetings and consents.
27. Waivers; Amendments. Any of the provisions of this Merger Agreement
may be waived at any time by the party which is, or the shareholders
of which are, entitled to the benefit thereof. This Merger Agreement
may be amended or modified in whole or in part by an agreement in
writing executed in the same manner (but not necessarily by the same
persons) as this Merger Agreement and which makes reference to this
Merger Agreement; provided, however, such amendment or modification
may be made only following due authorization by the respective Boards
of Directors of FCC, DELTA and BANC ONE; provided, further, however,
that after a favorable vote by the shareholders of FCC any such action
shall be taken by FCC only if, in the opinion of its Board of
Directors, such amendment or modification will not have any material
adverse effect on the benefits intended under this Merger Agreement
for the
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<PAGE> 78
shareholders of FCC, will not violate Section 112H(2) of the Louisiana
BCL, and will not require resolicitation of any proxies from such
shareholders.
28. Entire Agreement. Subject to the exceptions noted in this Section 28,
this Merger Agreement supersedes any other agreement, whether written
or oral, that may have been made or entered into by FCC, DELTA and
BANC ONE or by any officer or officers of such parties relating to the
acquisition of the business or the capital stock of FCC and/or its
Subsidiaries by BANC ONE or DELTA. Except for the BANC ONE Disclosure
Letter and any attachments thereto, the FCC Disclosure Letter and any
attachments thereto, and the Benefits Agreement addressing benefit
plans and policies, this Merger Agreement and the exhibits hereto
constitute the entire agreement by the parties, and there are no
agreements or commitments except as set forth herein and therein.
29. Captions; Counterparts. The captions in this Merger Agreement are for
convenience only and shall not be considered a part of or affect the
construction or interpretation of any provision of this Merger
Agreement. This Merger Agreement may be executed in several
counterparts, each of which shall constitute one and the same
instrument.
30. Notices. Any notice or other communication given under this Merger
Agreement shall be in writing, and shall be deemed duly delivered when
received upon delivery either (i) by hand, (ii) by telegram or
facsimile transmission, (iii) by a nationally recognized overnight
courier service, or (iv) by registered or certified mail, postage
prepaid, addressed as set forth below.
(a) If to BANC ONE, to:
BANC ONE CORPORATION
Attention of: Chief Executive Officer
100 East Broad Street
Columbus, Ohio 43271
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<PAGE> 79
With a copy to:
BANC ONE CORPORATION
Attention of: Steven Alan Bennett
General Counsel
100 East Broad Street
Columbus, Ohio 43271
(b) If to FCC, to:
First Commerce Corporation.
Attention of: Chief Executive Officer
201 St. Charles Avenue, 29th Floor
New Orleans, Louisiana 70170
With a copy to:
Anthony J. Correro, III
Correro Fishman Haygood Phelps Weiss
Walmsley & Casteix, L.L.P.
201 St. Charles Avenue
New Orleans, Louisiana 70170
(c) If to DELTA, to:
Delta Acquisition Corporation
Attention of: William P. Boardman
President
100 East Broad Street
Columbus, Ohio 43271
- 77 -
<PAGE> 80
IN WITNESS WHEREOF, this Merger Agreement has been executed the day and year
first above written.
BANC ONE CORPORATION
ATTEST:
/s/ Charles F. Andrews By: /s/ William P. Boardman
- -------------------------- ----------------------------
William P. Boardman
Senior Executive Vice President
First Commerce Corporation
ATTEST:
/s/ Michael A. Flick By: /s/ Ian Arnof
- -------------------------- ----------------------------
Ian Arnof
President and Chief Executive Officer
Delta Acquisition Corporation
ATTEST:
/s/ Charles F. Andrews By: /s/ William P. Boardman
- -------------------------- ----------------------------
William P. Boardman
President
-78-
<PAGE> 1
Exhibit 99.3
Option Agreement
Option Agreement, dated as of October 20, 1997 (this "Agreement"), by and
between First Commerce Corporation, a corporation organized under the laws of
the State of Louisiana ("FCC") and BANC ONE CORPORATION, a corporation
organized under the laws of the State of Ohio ("BANC ONE").
W I T N E S S E T H :
WHEREAS, FCC and BANC ONE have executed an Agreement and Plan of Merger dated
as of October 20, 1997 (the "Merger Agreement") providing for the merger of FCC
with and into a subsidiary of BANC ONE, pursuant to which BANC ONE will acquire
FCC;
WHEREAS, Section 22 of the Merger Agreement provides that FCC will execute and
deliver an option agreement, substantially in the form of this Agreement, to
BANC ONE prior to the close of business October 20, 1997;
NOW THEREFORE, in consideration of said Merger Agreement and their mutual
promises and obligations, the parties hereto adopt and make this Agreement as
follows:
1. FCC hereby grants to BANC ONE an irrevocable option (the "Option") to
purchase in accordance with the terms of this Option Agreement for the
sum of $64.00 per share (the "Per Share Price") in cash up to
9,689,000 authorized but unissued shares of FCC Common (the "Optioned
Shares"). The Option shall expire (such event being referred to
herein as the "Option Termination Event") if not exercised as
permitted under this Agreement prior to the earlier of (i) at the time
the merger of FCC with a subsidiary of BANC ONE becomes effective as
set forth and defined in Section 4 of the Merger Agreement (the
"Effective Time"), (ii) BANC ONE or FCC receiving written notice from
the Board of Governors of the Federal Reserve System (the "Board") or
its staff to the effect that the exercise of the Option pursuant to
the terms of this Agreement is not consistent with Section 3 of the
Bank Holding Company Act of 1956, as amended, (iii) termination of the
Merger Agreement by BANC ONE in accordance with the provisions of
Section 26 of the Merger Agreement if such termination occurs (A)
prior to the occurrence of an Initial Triggering Event (as hereinafter
defined) or (B) following the occurrence of an Initial Triggering
Event if, at the time of such termination by BANC ONE, FCC was
entitled to terminate the Merger Agreement in accordance with the
provisions of Section 26 thereof , (iv) the first business day after
the five hundred and forty-eighth calendar day following termination
of the Merger Agreement by BANC ONE in accordance with the provisions
of Section 26 thereof, if such termination follows the occurrence of
an Initial Triggering Event, provided that the Option shall in all
events expire not later than 24 months after such Initial Triggering
Event, (v) termination of the Merger Agreement by FCC in accordance
with the provisions of Section 26 thereof, or (vi) termination of the
Merger Agreement by mutual consent of BANC ONE and FCC. If, in the
case of (iv), the Option is otherwise exercisable but cannot be
exercised
<PAGE> 2
on such day solely because of any injunction, order or similar
restraint issued by a court of competent jurisdiction, the Option
shall expire on the twentieth business day after such injunction,
order or restraint shall have been dissolved or when such injunction,
order or restraint shall have become permanent and no longer subject
to appeal, as the case may be.
2. Provided that (i) no preliminary or permanent injunction or other
order issued by any Federal or state court of competent jurisdiction
in the United States prohibiting the exercise of the Option or the
delivery of the Optioned Shares shall be in effect and (ii) any such
exercise shall otherwise be subject to compliance with applicable law
and (iii) BANC ONE is not then in material breach of the Merger
Agreement, BANC ONE may exercise the Option, subject to the
limitations herein set forth, in whole or in part at any time or from
time to time after the occurrence of both (and not merely one of) an
Initial Triggering Event and a Purchase Event (as defined in Section 4
of this Agreement) if, but only if, both the Initial Triggering Event
and the Purchase Event shall have occurred prior to the occurrence of
an Option Termination Event. In the event that BANC ONE wishes to
exercise the Option, BANC ONE shall give written notice of such
exercise (the date of such notice being herein called the "Notice
Date") within 30 days following such Purchase Event to FCC specifying
the number of Optioned Shares it will purchase pursuant to such
exercise and a place and date for the closing of such purchase which
date shall be within 45 days following the receipt of the last of any
required regulatory approvals, but in any event, within 365 days of
the Purchase Event, subject to reasonable extensions in order for BANC
ONE to obtain required regulatory approvals.
3. At any closing of the exercise of the Option, (i) BANC ONE will make
payment to FCC of the aggregate price for the Optioned Shares in
immediately available funds, in an amount equal to the product of the
Per Share Price multiplied by the number of Optioned Shares being
purchased at such closing and (ii) FCC will deliver to BANC ONE a duly
executed certificate or certificates representing the number of
Optioned Shares so purchased, registered in the name of BANC ONE or
its nominee in the denominations designated by BANC ONE in its notice
of exercise. Unless counsel for FCC and BANC ONE agree that such
shares are not "restricted shares" under federal and/or state
securities laws, certificates for such shares shall bear a legend to
that effect.
4. For purposes of this Agreement, an "Initial Triggering Event" shall
have occurred at such time as one of the following events shall have
occurred and BANC ONE shall have promptly determined in good faith
(and shall have promptly notified FCC in writing of such
determination) that there is a reasonable likelihood that, as a result
of the occurrence of any of the following events, consummation of the
Merger pursuant to the term of this Merger Agreement is jeopardized:
(i) any person as defined in Sections 3(a)(9) or 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "1934 Act") (other
than BANC ONE or any BANC ONE subsidiary or affiliate) shall have
commenced a bona fide offer to purchase shares of FCC Common such
that, upon consummation of said offer, such person would own or
control 10% or more of the outstanding shares of FCC Common, or shall
have entered into an agreement with FCC, or shall have filed an
application or notice with the Board or any other federal or state
regulatory agency for clearance or approval, to (A) merge or
consolidate or
<PAGE> 3
enter into any similar transaction, with FCC, (B) purchase, lease or
otherwise acquire all or substantially all of the assets of FCC or (C)
purchase or otherwise acquire (including by way of merger,
consolidation, share exchange or any similar transaction) securities
representing 10% or more of the voting power of FCC; (ii) any person
(other than BANC ONE, any BANC ONE subsidiary or affiliate, any
subsidiary of FCC ("FCC Subsidiary") in a fiduciary capacity) or any
current shareholder of FCC which has beneficial ownership of 10% or
more of the outstanding shares of FCC Common (a "Current 10%
Shareholder") shall have acquired beneficial ownership or the right to
acquire beneficial ownership of 10% or more of the outstanding shares
of FCC Common (the term "beneficial ownership" for purposes of this
Agreement having the meaning assigned thereto in Section 13(d) of the
1934 Act) or, in the case of a Current 10% Shareholder, said Current
10% Shareholder shall have acquired beneficial ownership or the right
to acquire beneficial ownership of 10% or more of the outstanding
shares of FCC Common in addition to those beneficially owned as of the
date hereof; (iii) any person (other than BANC ONE or any BANC ONE
subsidiary or affiliate) shall have made a bona fide proposal to FCC
after the date of the Merger Agreement by public announcement or
written communication that is the subject of public disclosure or
regulatory report or filing to (A) acquire FCC by merger,
consolidation, purchase of all or substantially all of its assets or
any other similar transaction, or (B) make an offer described in
clause (i), above; (iv) any person shall have solicited proxies in a
proxy solicitation subject to Regulation 14A under the 1934 Act in
opposition to approval of the Merger Agreement by FCC's shareholders;
or (v) FCC shall have willfully breached any provision of the Merger
Agreement, which breach would entitle BANC ONE to terminate the Merger
Agreement, such breach shall not have been cured pursuant to the terms
of the Merger Agreement and FCC shall not itself be entitled to
terminate the Merger Agreement by reason of a breach thereof by BANC
ONE. For purposes of this Agreement, a "Purchase Event" shall have
occurred at such time as (i) any person (other than BANC ONE or any
BANC ONE subsidiary or affiliate) acquires beneficial ownership of 50%
or more of the then-outstanding shares of FCC Common, or (ii) FCC
enters into an agreement with another person (other than BANC ONE or
any BANC ONE subsidiary) pursuant to which such person is entitled to
acquire 50% or more of the then-outstanding shares of FCC Common.
5. If between the date of the Merger Agreement and the Effective Time,
the shares of FCC Common shall be changed into a different number of
shares by reason of any reclassification, recapitalization, split-up,
combination or exchange of shares, or if a stock dividend thereon
shall be declared with a record date within said period (an "Event"),
the number of Optioned Shares and the Per Share Price shall be
adjusted appropriately so as to restore BANC ONE to its rights
hereunder, including, without limitation, its right to purchase that
number of additional shares (the "Additional Optioned Shares")
representing ownership of the voting power of the capital stock of FCC
(in addition to shares of FCC Common acquired other than pursuant to
any exercise of the Option) so that the ratio of (x) the sum of (A)
the Optioned Shares (including such Additional Optioned Shares, if
any, calculated as a result of one or more earlier Events) plus (B)
the Additional Optioned Shares, over the total number of shares of FCC
Common issued and outstanding after each such Event, shall be equal to
the ratio of (y) the sum of (C) 9,689,000 plus (D) such Additional
Optioned Shares, if any, calculated as a result of one or more earlier
Events, over the total number of shares of FCC Common issued
<PAGE> 4
and outstanding immediately prior to each such Event, at an adjusted
per share purchase price equal to the Per Share Price multiplied by a
fraction, the numerator of which shall be equal to the number of
shares of FCC Common purchasable prior to the adjustment and the
denominator of which shall be equal to the number of shares of FCC
Common purchasable after the adjustment; provided, however, that
nothing in this Option shall be construed as permitting FCC to take
any action or enter into any transaction prohibited by this Agreement.
6. FCC shall, if requested by BANC ONE, as expeditiously as possible file
a registration statement on a form of general use under the Securities
Act of 1933, as amended, if necessary in order to permit the sale or
other disposition of the shares of FCC Common that have been acquired
upon exercise of the Option in accordance with the intended method of
sale or other disposition requested by BANC ONE. BANC ONE shall
provide all information reasonably requested by FCC for inclusion in
any registration statement to be filed hereunder. FCC will use its
reasonable best efforts to cause such registration statement first to
become effective and then to remain effective for such period not in
excess of two hundred and seventy calendar days from the day such
registration statement first becomes effective as may be reasonably
necessary to effect such sales or other dispositions. The registration
effected under this Section 6 shall be at FCC's expense except for all
filing and agency fees and commissions and underwriting discounts and
commissions attributable to the sale of such securities and fees and
disbursements of BANC ONE's counsel related thereto, which amounts
shall be borne by BANC ONE. In no event shall FCC be required to
effect more than one registration hereunder. The filing of any
registration statement hereunder may be delayed for such period of
time as may reasonably be required if FCC determines that any such
filing or the offering of any such shares of FCC Common would (i)
impede, delay or otherwise interfere with any financing, offer or sale
of FCC Common or any other securities of FCC, or (ii) require
disclosure of material information which, if disclosed at that time,
would be materially harmful to the interests of FCC and its
shareholders. If requested by BANC ONE in connection with any such
registration, FCC will become a party to any underwriting agreement
relating to the sale of such shares, but only to the extent of
obligating itself in respect of representations, warranties,
indemnities and other agreements customarily required of issuers.
Neither this Option Agreement nor the Option are assignable by BANC
ONE. BANC ONE and FCC agree to use their respective reasonable efforts
to cause, and to cause any underwriters of any sale or other
disposition to cause, any sale or other disposition of the Optioned
Shares and any Additional Optioned Shares to be effected on a widely
distributed basis.
7. Notices. All notices and other communications hereunder may be made by
mail, hand-delivery or by courier service. If notices and other
communications are made by nationally recognized overnight courier
service for overnight delivery, such notice shall be deemed to have
been given one business day after being forwarded to such a nationally
recognized overnight courier service for overnight delivery. All
notices and other communications hereunder given to any party shall be
communicated to the remaining party to this Agreement by mail or by
hand-delivery in the same manner as herein provided.
(a) If to BANC ONE, to:
<PAGE> 5
BANC ONE CORPORATION
Attention of: Chief Executive Officer
100 East Broad Street
Columbus, Ohio 43271
With a copy to:
BANC ONE CORPORATION
Attention of: Steven A. Bennett
General Counsel
100 East Broad Street
Columbus, Ohio 43271
(b) First Commerce Corporation.
Attention of: Chief Executive Officer
201 St. Charles Avenue, 29th Floor
New Orleans, Louisiana 70170
With a copy to:
Anthony J. Correro, III
Correro Fishman Haygood Phelps Weiss
Walmsley & Casteix, L.L.P.
201 St. Charles Avenue
New Orleans, Louisiana 70170
<PAGE> 6
IN WITNESS WHEREOF, this Agreement has been executed the day and year first
above written.
BANC ONE CORPORATION
ATTEST:
/s/ Charles F. Andrews By: /s/ William P. Boardman
- -------------------------- ----------------------------
William P. Boardman
its Senior Executive Vice President
First Commerce Corporation.
ATTEST:
/s/ Michael A. Flick By: /s/ Ian Arnof
- -------------------------- ----------------------------
Ian Arnof
its President and Chief
Executive Officer
<PAGE> 1
EXHIBIT 99.4
BANC ONE CORPORATION
100 East Broad Street
Columbus, Ohio 43271-0210
=================================================
NEWS RELEASE
=================================================
For further information contact:
First Commerce:
Holly Hobson (504) 623-2917 (Analysts/Investors)
[BANC ONE LOGO] Ed Marshall (504) 623-1872 (Media)
BANC ONE: John A. Russell (614) 248-5989
FOR RELEASE: October 20, 1997
FIRST COMMERCE IN LOUISIANA TO JOIN BANC ONE CORPORATION
-----------------------
BANC ONE CORPORATION (NYSE:ONE) and First Commerce Corporation (NASDAQ:FCOM), a
multi-bank holding company headquartered in New Orleans, Louisiana jointly
announced today that they have signed a definitive agreement for the merger of
First Commerce with BANC ONE CORPORATION. The announcement was made by John
B. McCoy, Chairman and Chief Executive Officer of BANC ONE, and Ian Arnof,
President and Chief Executive Officer of First Commerce Corporation.
Terms of the agreement call for First Commerce Corporation shareholders to
receive 1.28 shares of BANC ONE stock for each share of First Commerce. The
value of the transaction is approximately $3 billion based on BANC ONE's
closing share price on Friday, October 17, 1997.
McCoy said, "This is an important affiliation for use in that our stated
objective is to be one of the top three banks in the markets we serve.
BANC ONE currently operates Bank One, Louisiana which has assets of
approximately $5.5 billion. Combined, these two affiliates will become the
largest bank in Louisiana as well as the largest in five of the top six markets
in the state."
Arnof said, "We are very pleased to be joining BANC ONE. The combination of our
Louisiana franchises creates a very strong organization and certainly makes
sense in light of the consolidation taking place in our industry today. This
association will permit us to play an even more significant role in the strong
economic growth we are experiencing in Louisiana." It is anticipated that First
Commerce will join with Bank One, Louisiana at the end of the first quarter
of 1998.
First Commerce had assets of approximately $9.3 billion at the end of the third
quarter of 1997 and operates six Louisiana banks in Alexandria, Baton Rouge,
Lafayette, Lake Charles, Monroe and New Orleans.
BANC ONE CORPORATION had managed total assets of $140.7 billion and common
equity of $9.7 billion at June 30, 1997. BANC ONE currently operates more
than 1,200 offices in 12 states. BANC ONE also owns several additional
corporations that engage in a full range of financial services. Information
about BANC ONE's financial results and its products and services can
be accessed on the Internet at: http://www.bankone.com and through
InvestQuest at http://www.investquest.com or Fax-on-demand (614) 844-3860.
#####
