<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 13, 1998.
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
BANC ONE CORPORATION
(Exact name of Registrant as specified in its charter)
<TABLE>
<S> <C> <C>
OHIO 6711 31-0738296
(State or other jurisdiction (Primary Standard Industrial (I.R.S. Employer
of Classification Code Number) Identification
incorporation or organization) No.)
</TABLE>
------------------------
100 EAST BROAD STREET, COLUMBUS, OHIO 43271,
(614) 248-5944
(Address, including zip code, and telephone number, including
area code, of Registrant's principal executive offices)
------------------------
STEVEN ALAN BENNETT
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
BANC ONE CORPORATION
DEPARTMENT OH1-0158
100 EAST BROAD STREET
COLUMBUS, OHIO 43271-0158
(614) 248-7590
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------------
WITH COPIES TO:
KENNETH L. WAGNER, ESQ. ANTHONY J. CORRERO, III, ESQ.
BANC ONE CORPORATION Correro Fishman Haygood Phelps Weiss
Department OH1-0158 Walmsley & Casteix, L.L.P.
100 East Broad Street 201 St. Charles Avenue
Columbus, Ohio 43271-0158 New Orleans, Louisiana 70170
------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
------------------------
If the securities being registered on this Form are being offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. / /
------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF AMOUNT TO OFFERING PRICE AGGREGATE REGISTRATION
SECURITIES TO BE REGISTERED BE REGISTERED(1) PER UNIT(2) OFFERING PRICE FEE(3)
<S> <C> <C> <C> <C>
Common Stock............................... 62,599,680 $55.36 $3,465,518,284.80 $1,022,327.90
</TABLE>
(1) Based on an estimate of the maximum number of shares of common stock of the
Registrant to be issued in connection with the merger (the "Merger") of
First Commerce Corporation ("FCC") with a wholly owned subsidiary of the
Registrant.
(2) Calculated in accordance with Rule 457(f)(1) based on the aggregate market
value on May 8, 1998 of the shares of FCC common stock expected to be
canceled in connection with the Merger and computed by dividing (i) the
product of (A) the average of the high and low prices of FCC common stock as
reported by The Nasdaq Stock Market on May 8, 1998 ($77.94) and (B)
44,460,000, representing the maximum number of shares of FCC common stock
expected to be canceled in connection with the Merger, by (ii) 62,599,680,
representing the maximum number of shares of common stock of the Registrant
to be issued in connection with the Merger.
(3) In accordance with Rule 457(b), $701,356.50 previously paid in connection
with filing of the Prospectus and Proxy Statement included herewith as
preliminary proxy material has been credited against the registration fee of
$1,022,327.90, leaving $320,971.40 payable in connection with the filing of
this Registration Statement.
------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
FIRST COMMERCE CORPORATION
201 ST. CHARLES AVENUE
NEW ORLEANS, LOUISIANA 70170
May 14, 1998
Dear Shareholders:
You are cordially invited to attend a special meeting of shareholders of
First Commerce Corporation ("FCC") on June 12, 1998 at the Grand Ballroom, the
Sheraton Hotel, 500 Canal Street, New Orleans, Louisiana, starting at 9:00 a.m.
local time.
At the meeting, you will be asked to consider and vote upon a proposal to
approve an agreement and plan of merger pursuant to which FCC would be acquired
by BANC ONE CORPORATION ("BANC ONE") and each outstanding share of FCC common
stock would be converted into 1.408 shares of BANC ONE common stock (the
"Exchange Rate"). Based on the closing price of BANC ONE common stock on May 12,
1998, the Exchange Rate results in $79.74 of market value in BANC ONE common
stock for each share of FCC common stock. However, the Exchange Rate is fixed
and the value of the consideration to be received by FCC shareholders upon
completion of the Merger will vary based on the market value of BANC ONE common
stock.
Your Board of Directors submits the proposed Merger to you after careful
review and consideration. We believe that the proposed Merger will enable FCC
shareholders to participate in the expanded opportunities for growth that
association with a larger, more geographically diversified, regional financial
organization makes possible. We are confident that the combined organization and
its shareholders will be well positioned to take advantage of future
opportunities as the financial institution industry continues to consolidate and
restructure.
YOUR BOARD OF DIRECTORS RECOMMENDS THAT SHAREHOLDERS VOTE IN FAVOR OF THE
AGREEMENT AND PLAN OF MERGER AT THE MEETING.
Shareholders are urged to read carefully the accompanying Prospectus and
Proxy Statement which contains detailed information concerning the matters to be
considered at the meeting.
Please mark, sign and date the enclosed proxy card and return it as soon as
possible in the enclosed postage paid envelope. If you attend the meeting, you
may vote in person if you wish, even if you have previously mailed your proxy
card.
Sincerely,
Ian Arnof
PRESIDENT AND CHIEF EXECUTIVE OFFICER
<PAGE>
FIRST COMMERCE CORPORATION
201 ST. CHARLES AVENUE
NEW ORLEANS, LOUISIANA 70170
------------------------
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON JUNE 12, 1998
------------------------
To the shareholders of
FIRST COMMERCE CORPORATION:
Notice is hereby given that a special meeting of shareholders of First
Commerce Corporation ("FCC") will be held on June 12, 1998 at 9:00 a.m. local
time at the Grand Ballroom, the Sheraton Hotel, 500 Canal Street, New Orleans,
Louisiana, to consider and vote upon the following matters:
(i) A proposal to approve an Agreement and Plan of Merger between FCC, BANC
ONE CORPORATION ("BANC ONE") and Delta Acquisition Corporation, a wholly
owned subsidiary of BANC ONE ("Delta"), pursuant to which FCC will merge
(the "Merger") with Delta and each outstanding share of FCC common stock
(together with any and all FCC preferred share purchase rights issued
under the FCC rights plan) will be converted into 1.408 shares of BANC
ONE common stock.
(ii) Such other business as may properly come before the meeting or any
adjournment thereof.
Only shareholders of record at the close of business on April 24, 1998 are
entitled to notice of and to vote at the meeting.
Dissenting shareholders who comply with the procedural requirements of the
Louisiana Business Corporation Law will be entitled to receive payment of the
fair cash value of their shares of FCC common stock if the Merger is effected
upon approval by less than 80% of the FCC common stock.
Your vote is important regardless of the number of shares you own. Whether
or not you plan to attend the meeting, PLEASE MARK, DATE AND SIGN THE ENCLOSED
PROXY CARD AND RETURN IT PROMPTLY IN THE ENCLOSED STAMPED ENVELOPE.
BY ORDER OF THE BOARD OF DIRECTORS
Michael A. Flick
SECRETARY
New Orleans, Louisiana
May 14, 1998
<PAGE>
PROSPECTUS
62,599,680 SHARES
BANC ONE CORPORATION
COMMON STOCK
------------------
FIRST COMMERCE CORPORATION
PROXY STATEMENT
FOR
SPECIAL MEETING OF SHAREHOLDERS
JUNE 12, 1998
------------------------
This Prospectus and Proxy Statement (the "Prospectus" or "Prospectus and
Proxy Statement") relates to a special meeting of shareholders (the "Meeting")
of First Commerce Corporation ("FCC"). At the Meeting, shareholders will
consider the proposed merger of FCC with a wholly owned subsidiary of BANC ONE
CORPORATION ("BANC ONE"). If the proposed merger (the "Merger") is completed,
each outstanding share of FCC common stock, $5.00 par value ("FCC Common
Stock"), together with any and all Rights issued pursuant to the FCC Rights
Plan, will be converted into shares of BANC ONE common stock, no par value ($5
stated value) per share ("BANC ONE Common Stock"), at the rate of 1.408 shares
of BANC ONE Common Stock for each share of FCC Common Stock. Based upon
information available as of the date hereof, immediately after the Merger
holders of FCC Common Stock are expected to hold approximately 8.6% of the
shares of outstanding BANC ONE Common Stock on a diluted basis. FCC shareholders
are entitled to dissenters' rights in connection with the Merger.
The Merger is subject to the approval of the holders of at least two-thirds
of the shares of FCC Common Stock present or represented by proxy at the Meeting
and to the satisfaction of certain other conditions, including obtaining the
approval of the Board of Governors of the Federal Reserve System.
On April 10, 1998, BANC ONE, First Chicago NBD Corporation, a Delaware
corporation ("First Chicago NBD"), and Hornet Reorganization Corporation, a
Delaware corporation ("Newco"), entered into an Agreement and Plan of
Reorganization pursuant to which BANC ONE and First Chicago NBD will be merged
seriatim with and into Newco, with Newco as the surviving corporation. If both
the Merger and the BANC ONE/ First Chicago NBD merger are completed, each share
of BANC ONE Common Stock received by a FCC shareholder pursuant to the Merger
ultimately would be converted into one share of Newco common stock pursuant to
the BANC ONE/First Chicago NBD merger. Based upon information available as of
the date hereof and assuming both the Merger and the BANC ONE/First Chicago NBD
merger are completed, holders of FCC Common Stock are expected to hold
approximately 5.1% of the shares of outstanding Newco common stock on a diluted
basis. Completion of the BANC ONE/First Chicago NBD merger is subject to a
number of conditions, including the approval of the shareholders of BANC ONE and
First Chicago NBD and the receipt of all requisite regulatory approvals. See
"RECENT DEVELOPMENTS--BANC ONE/First Chicago NBD Agreement."
This Prospectus and Proxy Statement does not cover any resales of BANC ONE
Common Stock received by affiliates of FCC upon completion of the Merger and no
person is authorized to make use of this Prospectus and Proxy Statement in
connection with any such resale.
The outstanding shares of BANC ONE Common Stock are, and the shares of BANC
ONE Common Stock offered hereby will be, listed and traded on the New York Stock
Exchange. The closing price of BANC ONE Common Stock on the New York Stock
Exchange on May 12, 1998 was $56.63.
------------------------
THIS PROSPECTUS AND PROXY STATEMENT AND THE PROXY CARD ARE FIRST
BEING MAILED TO FCC SHAREHOLDERS ON OR ABOUT MAY 14, 1998.
THESE SECURITIES ARE NOT SAVINGS OR DEPOSIT ACCOUNTS OR OTHER OBLIGATIONS OF
ANY BANK OR NONBANK SUBSIDIARY OF BANC ONE CORPORATION AND ARE NOT
INSURED BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, THE
BANK INSURANCE FUND OR ANY OTHER GOVERNMENTAL
AGENCY.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
THE DATE OF THIS PROSPECTUS AND PROXY STATEMENT IS MAY 14, 1998.
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION..................................................... 4
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE........................... 5
FORWARD-LOOKING STATEMENTS................................................ 6
SUMMARY................................................................... 7
Introduction............................................................ 7
Parties to the Merger................................................... 7
Structure of the Merger and Exchange Rate............................... 7
Vote Required; Recommendation of FCC Board.............................. 8
Opinion of FCC's Financial Advisor...................................... 8
Conditions to the Merger; Termination................................... 8
Regulatory Approvals.................................................... 9
Certain Federal Income Tax Consequences................................. 9
Accounting Treatment.................................................... 9
Interests of Certain Persons in the Merger.............................. 10
Option.................................................................. 10
Rights of Dissenting Shareholders....................................... 11
Comparison of Shareholder Rights........................................ 11
Recent Market Prices.................................................... 11
Selected Financial Data................................................. 12
Comparative Per Share Data.............................................. 13
RECENT DEVELOPMENTS....................................................... 15
BANC ONE/First Chicago NBD Agreement.................................... 15
BANC ONE First Quarter 1998 Financial Results........................... 17
FCC First Quarter 1998 Financial Results................................ 18
THE MEETING............................................................... 18
Matters to be Considered................................................ 18
Proxies................................................................. 18
Solicitation of Proxies................................................. 19
Record Date and Voting Rights........................................... 19
Recommendation of FCC Board............................................. 20
THE MERGER................................................................ 21
General................................................................. 21
Background of and FCC Reasons for the Merger............................ 21
Opinion of FCC's Financial Advisor...................................... 24
BANC ONE Reasons for the Merger......................................... 30
Structure of the Merger; Management After the Merger.................... 30
Conversion of FCC Common Stock; Treatment of FCC Stock Options and FCC
Debentures............................................................ 30
Exchange of Certificates; Fractional Shares............................. 31
Representations and Warranties.......................................... 31
Conduct of Business Pending the Merger.................................. 32
Conditions to the Merger; Amendment; Waiver............................. 34
Termination............................................................. 36
Regulatory Approvals.................................................... 38
Certain Federal Income Tax Consequences................................. 39
Accounting Treatment.................................................... 40
Employee Benefits and Plans............................................. 40
Stock Exchange Listing.................................................. 41
Expenses................................................................ 41
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Interests of Certain Persons in the Merger.............................. 41
Option.................................................................. 43
Restrictions on Resales by Affiliates................................... 45
Rights of Dissenting Shareholders....................................... 45
Transfer and Exchange Agents............................................ 46
COMPARISON OF SHAREHOLDER RIGHTS.......................................... 47
Description of BANC ONE Stock........................................... 47
Comparison of BANC ONE Common Stock and FCC Common Stock................ 50
INFORMATION ABOUT BANC ONE CORPORATION.................................... 55
General................................................................. 55
Market Prices of and Cash Dividends Declared on BANC ONE Common Stock... 55
Certain Regulatory Matters.............................................. 56
Management and Additional Information................................... 59
INFORMATION ABOUT FIRST COMMERCE CORPORATION.............................. 60
General................................................................. 60
Market Prices of and Cash Dividends Declared on FCC Common Stock........ 60
Management and Additional Information................................... 60
EXPERTS................................................................... 61
LEGAL MATTERS............................................................. 61
FUTURE SHAREHOLDER PROPOSALS.............................................. 61
APPENDIX A. Fairness Opinion of Keefe, Bruyette & Woods, Inc............. A-1
</TABLE>
3
<PAGE>
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND PROXY
STATEMENT IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS AND PROXY
STATEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE
RELIED UPON AS HAVING BEEN AUTHORIZED BY BANC ONE OR FCC. NEITHER THE DELIVERY
OF THIS PROSPECTUS AND PROXY STATEMENT NOR ANY SALE MADE HEREUNDER SHALL, UNDER
ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF BANC ONE OR FCC SINCE THE DATE HEREOF. THIS PROSPECTUS AND PROXY
STATEMENT IS NOT AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO PURCHASE
ANY SECURITY, OR THE SOLICITATION OF A PROXY, IN ANY JURISDICTION IN WHICH IT IS
UNLAWFUL TO MAKE SUCH OFFER, SOLICITATION OF AN OFFER OR PROXY SOLICITATION.
All information contained herein with respect to FCC has been provided by
FCC, and BANC ONE is relying upon the accuracy of that information. All
information contained herein with respect to BANC ONE has been provided by BANC
ONE, and FCC is relying upon the accuracy of that information.
AVAILABLE INFORMATION
Each of BANC ONE and FCC is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), and in
accordance therewith files reports, proxy statements and other information with
the Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the Public
Reference Room of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, and the Commission's Regional Offices at 500 West Madison Street, Suite
1400, Chicago, Illinois 60661 and Seven World Trade Center, Suite 1300, New
York, New York 10048. Copies of such material can be obtained from the Public
Reference Section of the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549 at prescribed rates. In addition, such material may be accessed
electronically at the Commission's site on the World Wide Web located at
http://www.sec.gov.
BANC ONE Common Stock is listed on the New York Stock Exchange ("NYSE") and
such reports, proxy statements and other information concerning BANC ONE can be
inspected at the offices of the NYSE, 20 Broad Street, New York, New York. FCC
Common Stock is included for quotation on The Nasdaq Stock Market and such
reports, proxy statements and other information concerning FCC can be inspected
at the offices of the National Association of Securities Dealers, Inc., 1735 K
Street, N.W., Washington, D.C. 20006.
BANC ONE has filed with the Commission a Registration Statement on Form S-4
(together with any amendments thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
BANC ONE Common Stock to be issued pursuant to the Merger. This Prospectus and
Proxy Statement does not contain all information set forth in the Registration
Statement and exhibits thereto. Such additional information may be inspected and
copied as set forth above. Statements contained in this Prospectus and Proxy
Statement or in any document incorporated into this Prospectus and Proxy
Statement by reference as to the contents of any contract or other document
referred to herein or therein are not necessarily complete, and in each instance
reference is made to the copy of such contract or document filed as an exhibit
to the Registration Statement or such other document, each such statement being
qualified in all respects by such reference.
4
<PAGE>
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
THIS PROSPECTUS AND PROXY STATEMENT INCORPORATES DOCUMENTS BY REFERENCE THAT
ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF ANY SUCH DOCUMENTS,
OTHER THAN EXHIBITS TO SUCH DOCUMENTS THAT ARE NOT SPECIFICALLY INCORPORATED BY
REFERENCE THEREIN, ARE AVAILABLE WITHOUT CHARGE TO ANY PERSON, INCLUDING ANY FCC
SHAREHOLDER, TO WHOM THIS PROSPECTUS AND PROXY STATEMENT IS DELIVERED UPON ORAL
OR WRITTEN REQUEST, IN THE CASE OF THE PLAN AND DOCUMENTS RELATING TO BANC ONE,
TO BANC ONE CORPORATION, DEPARTMENT OH1-0251, 100 EAST BROAD STREET, COLUMBUS,
OHIO 43271-0251, ATTENTION: INVESTOR RELATIONS, TELEPHONE NUMBER (614) 248-6889,
AND, IN THE CASE OF DOCUMENTS RELATING TO FCC, TO FIRST COMMERCE CORPORATION,
201 ST. CHARLES AVENUE, NEW ORLEANS, LOUISIANA 70170, ATTENTION: INVESTOR
RELATIONS, TELEPHONE NUMBER (504) 623-2900. IN ORDER TO ENSURE TIMELY DELIVERY
OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY JUNE 5, 1998.
The following documents filed by BANC ONE with the Commission under the
Exchange Act are incorporated herein by reference:
1. Annual Report on Form 10-K for the fiscal year ended December 31, 1997;
2. Current Reports on Form 8-K dated January 20, 1998 (filed January 26,
1998), April 10, 1998 (filed April 14, 1998) (as amended by Form 8-K/A
filed April 21, 1998) and April 21, 1998 (filed April 22, 1998); and
3. The description of BANC ONE Common Stock set forth in BANC ONE's
Registration Statement on Form 8-B dated May 1, 1989, including any
amendment or report filed for the purpose of updating such description.
The following documents filed by FCC with the Commission under the Exchange
Act are incorporated herein by reference:
1. Annual Report on Form 10-K for the fiscal year ended December 31, 1997
(as amended by Form 10-K/A filed April 30, 1998);
2. Current Reports on Form 8-K dated January 15, 1998 (filed January 20,
1998), January 20, 1998 (filed February 2, 1998), April 15, 1998 (filed
April 20, 1998) and April 16, 1998 (filed April 20, 1998); and
3. The description of FCC Common Stock set forth in Item 1 of FCC's
Applications for Registration on Form 8-A filed on November 9, 1972 and
December 22, 1976, as amended by a Form 8 filed on June 19, 1989, a Form
8-A filed on August 12, 1993, and a Form 8-A/A (No. 2) filed on May 3,
1996.
All documents filed by BANC ONE or FCC pursuant to Section 13(a), 13(c), 14
or 15(d) of the Exchange Act after the date hereof and prior to the Meeting
shall be deemed to be incorporated by reference in this Prospectus and Proxy
Statement and to be a part hereof from the respective dates of filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or superseded
for purposes of this Prospectus and Proxy Statement to the extent that such
statement is modified or superseded by a statement contained herein or in any
other subsequently filed document which also is or is deemed to be incorporated
by reference herein. Any such statement so modified or superseded shall not be
deemed, except as so modified or superseded, to constitute a part of this
Prospectus and Proxy Statement.
5
<PAGE>
FORWARD-LOOKING STATEMENTS
This Prospectus and Proxy Statement (including information included or
incorporated by reference herein) contains certain forward-looking statements
with respect to the financial condition, results of operations, plans,
objectives, future performance and business of each of BANC ONE and FCC, as well
as certain information relating to the Merger and the BANC ONE/First Chicago NBD
Merger (as hereinafter defined), including, without limitation (i) statements
relating to the cost savings estimated to result from the BANC ONE/First Chicago
NBD Merger, (ii) statements relating to revenues estimated to result from the
BANC ONE/First Chicago NBD Merger, (iii) statements relating to the
restructuring charges estimated to be incurred in connection with the BANC
ONE/First Chicago NBD Merger and (iv) statements preceded by, followed by or
that include the words "believes", "expects", "anticipates", "estimates" or
similar expressions. These forward-looking statements involve certain risks and
uncertainties. Actual results may differ materially from those contemplated by
such forward-looking statements due to, among others, the following factors: (a)
expected cost savings from the Merger and the BANC ONE/ First Chicago NBD Merger
may not be fully realized or realized within the expected time frame; (b)
revenues following the Merger and the BANC ONE/First Chicago NBD Merger may be
lower than expected, or deposit attrition, operating costs or customer loss and
business disruption following the Merger and the BANC ONE/First Chicago NBD
Merger may be greater than expected; (c) competitive pressures among depository
and other financial institutions may increase significantly; (d) costs or
difficulties related to the integration of the business of BANC ONE, FCC and/or
First Chicago NBD may be greater than expected; (e) changes in the interest rate
environment may reduce margins; (f) general economic or business conditions,
either nationally or in the states in which BANC ONE, FCC or First Chicago NBD
is doing business, may be less favorable than expected resulting in, among other
things, a deterioration in credit quality or a reduced demand for credit; (g)
legislative or regulatory changes may adversely affect the business in which
BANC ONE, FCC or First Chicago NBD is engaged; and (h) changes may occur in the
securities markets. See "AVAILABLE INFORMATION" and "INCORPORATION OF CERTAIN
DOCUMENTS BY REFERENCE."
6
<PAGE>
SUMMARY
THE FOLLOWING IS A BRIEF SUMMARY OF CERTAIN INFORMATION SET FORTH ELSEWHERE
IN THIS PROSPECTUS AND PROXY STATEMENT AND IS NOT INTENDED TO BE COMPLETE. THIS
SUMMARY IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE MORE DETAILED
INFORMATION CONTAINED ELSEWHERE IN THIS PROSPECTUS AND PROXY STATEMENT, THE
ACCOMPANYING APPENDIX AND THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN.
INTRODUCTION
This Prospectus and Proxy Statement is being furnished in connection with
the solicitation of proxies on behalf of the Board of Directors (the "FCC
Board") of First Commerce Corporation ("FCC"), to be voted at a special meeting
of FCC shareholders to be held on June 12, 1998 at 9:00 a.m. local time and at
any and all adjournments thereof (the "Meeting") to approve an Agreement and
Plan of Merger dated as of October 20, 1997 (the "Plan") between FCC, BANC ONE
CORPORATION ("BANC ONE") and Delta Acquisition Corporation ("Delta"), a wholly
owned subsidiary of BANC ONE.
PARTIES TO THE MERGER
FCC is a multi-bank holding company with six wholly owned bank subsidiaries
in Louisiana. At December 31, 1997, FCC had consolidated total assets of $9.5
billion, consolidated total deposits of $7.8 billion and consolidated total
stockholders' equity of $821.0 million. See "INFORMATION ABOUT FIRST COMMERCE
CORPORATION." Its principal executive offices are at 201 St. Charles Avenue,
29th Floor, New Orleans, Louisiana 70170 and its telephone number is (504)
623-1371.
BANC ONE is a multi-bank holding company that operates banking offices in
Arizona, Colorado, Illinois, Indiana, Kentucky, Louisiana, Ohio, Oklahoma,
Texas, Utah, West Virginia and Wisconsin. At December 31, 1997, BANC ONE had
consolidated total assets of $115.9 billion, consolidated total deposits of
$77.4 billion and consolidated total stockholders' equity of $10.4 billion.
Delta is a wholly owned subsidiary of BANC ONE formed under the laws of the
State of Ohio. See "INFORMATION ABOUT BANC ONE CORPORATION." BANC ONE's
principal office is at 100 East Broad Street, Columbus, Ohio 43271 and its
telephone number is (614) 248-5944.
On April 10, 1998, BANC ONE, First Chicago NBD Corporation, a Delaware
corporation ("First Chicago NBD"), and Hornet Reorganization Corporation, a
Delaware corporation ("Newco"), entered into an Agreement and Plan of
Reorganization pursuant to which BANC ONE and First Chicago NBD will be merged
seriatim with and into Newco, with Newco as the surviving corporation. If both
the Merger and the BANC ONE/First Chicago NBD merger are completed, each share
of BANC ONE Common Stock received by a FCC shareholder pursuant to the Merger
ultimately would be converted into one share of Newco common stock pursuant to
the BANC ONE/First Chicago NBD merger. Completion of the BANC ONE/First Chicago
NBD merger is subject to a number of conditions, including the approval of the
shareholders of BANC ONE and First Chicago NBD and the receipt of all requisite
regulatory approvals. See "RECENT DEVELOPMENTS--BANC ONE/First Chicago NBD
Agreement."
STRUCTURE OF THE MERGER AND EXCHANGE RATE
If the Merger becomes effective, each outstanding share of FCC Common Stock
(together with any and all Rights (as defined below)) will be converted into
1.408 shares of BANC ONE Common Stock (the "Exchange Rate"). Upon the completion
of the Merger, FCC will be merged with Delta and the separate corporate
existence of Delta will cease. FCC, as the surviving corporation in the Merger
and a wholly owned subsidiary of BANC ONE, will continue operations under the
name "Louisiana Banc One Corporation."
As used in this Prospectus and Proxy Statement, "Rights" means any and all
FCC preferred share purchase rights and related interests and rights associated
with each share of FCC Common Stock arising
7
<PAGE>
from, related to and/or issued pursuant to the Rights Agreement dated February
26, 1996 (the "FCC Rights Plan") between FCC and First Chicago Trust Company of
New York, as Rights Agent.
VOTE REQUIRED; RECOMMENDATION OF FCC BOARD
Holders of at least two-thirds of the FCC Common Stock present or
represented by proxy at the Meeting must vote for the Plan for the Merger to be
completed. FCC's directors and executive officers, together with their
affiliates, are entitled to vote approximately 14% of the FCC Common Stock at
the Meeting, and FCC believes that all of their shares will be voted for the
Plan. It is not necessary for the BANC ONE shareholders to approve the Plan.
However, BANC ONE, as the sole shareholder of Delta, has approved or will
approve the Plan. For information concerning voting by FCC shareholders on the
proposed Merger, see "THE MEETING."
The FCC Board has approved the Plan, believes that the Merger is in the best
interests of FCC and its shareholders and recommends that FCC shareholders vote
"FOR" the Plan.
OPINION OF FCC'S FINANCIAL ADVISOR
Keefe, Bruyette & Woods, Inc. ("KBW"), FCC's financial advisor, delivered
its oral opinion to the FCC Board on October 20, 1997 and its written opinion
dated May 12, 1998 to the effect that, as of the respective dates of the
opinions and based upon the procedures and subject to the assumptions made,
matters considered and limitations described therein, the Exchange Rate is fair
from a financial point of view to the FCC shareholders. KBW also reviewed the
terms of the proposed BANC ONE/First Chicago NBD Merger. The full text of KBW's
written opinion is attached as Appendix A hereto and shareholders are urged to
read it carefully. See "THE MERGER--Opinion of FCC's Financial Advisor" and
Appendix A to this Prospectus and Proxy Statement.
CONDITIONS TO THE MERGER; TERMINATION
Completion of the Merger is subject to satisfaction or waiver of various
conditions, including compliance by each party with its respective covenants and
confirmation by each party of its respective representations and warranties, the
absence of any material adverse change in the financial condition or business of
FCC or BANC ONE, the fulfillment of certain earnings tests and other matters.
See "THE MERGER--Conditions to the Merger; Amendment; Waiver."
The Plan may be terminated at any time prior to the effective time of the
Merger, whether before or after approval by the FCC shareholders, upon the
occurrence of any of the following: (i) if any material condition to either
party's obligations under the Plan is not or cannot be substantially satisfied
at the time or times contemplated thereby and such condition is not waived (each
party's right to terminate under this clause (i) relates only to conditions to
that party's obligations); (ii) in the event of a material breach by a party of
any representation, warranty, condition or agreement contained in the Plan that
is not cured within 30 days of the time that written notice of such breach is
received by such party from the other party 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 completed on or before October 19, 1998;
or (iv) if the FCC shareholders shall fail to approve the Merger and the Plan.
The Plan also may be terminated, and the Merger thereby abandoned (whether
before or after approval of the merger by the shareholder of Delta or by FCC's
shareholders), by the mutual written consent of the Boards of Directors of FCC,
BANC ONE and Delta at any time prior to the effective time of the Merger.
The Plan may also be terminated by FCC by majority vote of the FCC Board at
any time after the second business day before the closing date (the
"Determination Date"), if either: (x) (i) the average of the daily last sale
prices of a share of BANC ONE Common Stock (the "Average Closing Price"), as
reported
8
<PAGE>
on the NYSE Composite Transactions reporting system 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 shall be less than $45.15; and (ii)
(A) the number obtained by dividing the Average Closing Price by $50.17 shall be
less than (B) the number obtained by dividing the weighted average closing price
per share of the common stocks of a group of 18 bank holding companies by the
weighted average closing price per share of such bank holding companies on
October 17, 1997 and subtracting 0.10 from the quotient in this clause
(x)(ii)(B); or (y) the Average Closing Price shall be less than $43.15. If such
a termination notice is given by FCC, BANC ONE may at its option make certain
adjustments to the Exchange Rate, whereupon no termination shall have occurred
and the Plan shall remain in effect in accordance with its terms. See "THE
MERGER--Termination."
REGULATORY APPROVALS
The Merger is subject to the approval of the Board of Governors of the
Federal Reserve System (the "Federal Reserve"). Applications and notices with
respect to the Merger were filed with the Federal Reserve on January 21, 1998,
and copies were provided concurrently therewith to the Louisiana Commissioner of
Financial Institutions (the "Louisiana Commissioner") for informational
purposes. There can be no assurances that any governmental agency will approve
or take any other required action with respect to the Merger and, if approvals
are received or action is taken, there can be no assurance as to the date of
such approvals or action, that such approvals or actions will not be conditioned
upon such matters that would cause the parties to abandon the Merger or that no
actions will be brought challenging such approvals or action or, if such a
challenge is made, the result thereof. See "THE MERGER--Regulatory Approvals."
On May 4, 1998, the United States Department of Justice (the "Justice
Department") announced that it will advise the Federal Reserve that, subject to
divestiture of 25 branches operated by FCC in Calcasieu, Lincoln, Quachita and
Lafayette parishes, the Antitrust Division will not challenge the Merger. The
branches to be divested have total deposits of approximately $614 million. BANC
ONE believes that such divestitures will not be material to the financial
condition or results of operations of BANC ONE after the Effective Time.
CERTAIN FEDERAL INCOME TAX CONSEQUENCES
Completion of the Merger is conditioned upon receipt by FCC and BANC ONE of
an opinion dated as of the Effective Time from Coopers & Lybrand L.L.P. to the
effect that, among other things, no gain or loss will be recognized by FCC
shareholders for Federal income tax purposes as a result of the exchange of
their FCC Common Stock for BANC ONE Common Stock in the Merger, disregarding for
purposes of the opinion any cash received pursuant to the Merger in connection
with fractional share interests or the assertion of dissenters' rights. If the
opinion is unable to be obtained, each of BANC ONE and FCC expects that it would
assess the reasons for the failure to obtain such opinion and the anticipated
tax treatment of the Merger in view of such failure, and make a determination at
such time, consistent with the fiduciary duties of its Board of Directors and
its obligations under applicable law, as to whether such condition should be
waived. The vote of FCC shareholders would be resolicited if FCC determines to
waive such condition. As of the date of this Prospectus and Proxy Statement,
neither BANC ONE nor FCC has any intention of waiving the condition.
The tax consequences of the proposed transaction to FCC shareholders are
summarized under "THE MERGER--Certain Federal Income Tax Consequences."
ACCOUNTING TREATMENT
It is anticipated that BANC ONE will account for the Merger as a "pooling of
interests" under generally accepted accounting principles. It is a condition to
completion of the Merger that BANC ONE
9
<PAGE>
receive an opinion from Coopers & Lybrand L.L.P. to the effect that the Merger
may be properly accounted for as a "pooling of interests". In satisfaction of
such condition, BANC ONE intends to obtain a letter, dated as of the Closing
Date, from Coopers & Lybrand L.L.P. to the effect that they concur with the
conclusions of BANC ONE's and FCC's management that no conditions exist with
respect to each company that would preclude accounting for the Merger as a
"pooling of interests". See "THE MERGER--Accounting Treatment."
INTERESTS OF CERTAIN PERSONS IN THE MERGER
BANC ONE has agreed to indemnify FCC's directors and officers against claims
based on or arising out of the Plan and contemplated transactions, to maintain
FCC's indemnification obligations to them for at least ten years from the
effectiveness of the Merger, to provide indemnification rights to those of them
who continue as such after the Merger, and to indemnify them against claims
based on or arising out of allegations that this Prospectus and Proxy Statement,
and the Registration Statement, contain a misstatement or omission of material
fact.
The Merger will constitute a "change in control" of FCC within the meaning
of FCC's stock incentive plans and severance plans, and of employment agreements
between FCC and eight of its executive officers. As a result, under the
employment agreements and severance plans, if an executive officer's employment
is terminated under certain circumstances he or she will be entitled to be paid,
in the case of the employment agreements, a severance payment equal to three
times the amount of his or her annual compensation, and, in the case of the
severance plans, one or two times his or her compensation, and to continue to
receive health, insurance and other employee benefits. If severance payments are
required to be made pursuant to the employment agreements to each of the
executive officers (assuming a termination of service on May 31, 1998), the
amount of such severance payments with respect to Messrs. Arnof, Ryan, Wilson,
Flick and Gaines are currently estimated to be approximately $3,256,800,
$1,557,000, $1,539,000, $1,446,000 and $1,386,000, respectively, and with
respect to the other three executive officers are currently estimated to be
approximately $3,471,000, in the aggregate, together with associated gross-up
payments for taxes. It is anticipated that certain of the executive officers
will not continue in the employment of BANC ONE following completion of the
Merger and will, therefore, receive severance payments under the employment
agreements.
FCC maintains for the benefit of Messrs. Arnof, Ryan and Wilson a
supplemental retirement plan (the "SERP") which provides for a lump sum payment
if the beneficiary's employment is terminated under certain circumstances
following completion of the Merger. If lump sum payments are required to be made
pursuant to the SERP to each of such executive officers (assuming a termination
of service on May 31, 1998), the amount of such payments with respect to Messrs.
Arnof, Ryan and Wilson are currently estimated to be approximately $2,675,123,
$1,302,771 and $628,158, respectively.
Upon completion of the Merger, currently unexercisable options held by
executive officers to purchase up to 133,859 shares of FCC Common Stock will
become fully exercisable, and 107,630 unvested FCC restricted and performance
shares will become fully vested.
For information on these and other interests of FCC's management and the FCC
Board, see "THE MERGER--Interests of Certain Persons in the Merger."
OPTION
FCC has granted BANC ONE an irrevocable option (the "Option") to purchase,
under certain conditions, up to 9,689,000 shares of FCC Common Stock at a
purchase price of $64.00 per share. See "THE MERGER--Option." The Option might
have the effect of discouraging other persons interested in acquiring FCC from
making acquisition proposals. As of the date of this Prospectus and Proxy
Statement, the Option was not presently exercisable.
10
<PAGE>
RIGHTS OF DISSENTING SHAREHOLDERS
Shareholders who both object in writing to, and vote against, the Plan will
be entitled upon compliance with Section 131 of the Louisiana Business
Corporation Law (the "Louisiana Law") to be paid the fair cash value of their
shares as of the day before the Meeting, but only if the Merger is completed and
the Merger is approved by the holders of less than 80% of the FCC Common Stock.
A shareholder who perfects his or her dissenters' rights, upon filing a demand
for the fair cash value of his or her shares, will no longer have any rights as
a shareholder, including the right to pursue state law claims. See "THE
MERGER--Rights of Dissenting Shareholders."
COMPARISON OF SHAREHOLDER RIGHTS
The rights of BANC ONE shareholders are governed by BANC ONE's Articles of
Incorporation and Code of Regulations and the applicable provisions of the
General Corporation Law of the State of Ohio (the "Ohio Law"), while the rights
of FCC shareholders are governed by FCC's Articles of Incorporation and Bylaws
and the applicable provisions of the Louisiana Law. If the FCC shareholders
approve the Plan and the Merger is subsequently completed, holders of FCC Common
Stock will become holders of BANC ONE Common Stock. See "COMPARISON OF
SHAREHOLDER RIGHTS" for a discussion of the material differences in the rights
of the holders of FCC Common Stock and BANC ONE Common Stock.
RECENT MARKET PRICES
The following table sets forth the last sales price per share reported on
the NYSE Composite Transactions reporting system for shares of BANC ONE Common
Stock on October 17, 1997, the trading day immediately preceding public
announcement of the proposed Merger, and on May 12, 1998. It also sets forth the
last sales price per share reported by The Nasdaq Stock Market for shares of FCC
Common Stock on October 17, 1997 and on May 12, 1998. The FCC Equivalent
represents the last sales price of a share of BANC ONE Common Stock on such date
multiplied by the Exchange Rate. There can be no assurance as to the sales price
of a share of BANC ONE Common Stock on the effective date of the Merger.
<TABLE>
<CAPTION>
BANC ONE(1) FCC FCC EQUIVALENT(1)
--------------- --------- -----------------
<S> <C> <C> <C>
October 17, 1997.................................. $ 50.17 $ 58.13 $ 70.64
May 12, 1998...................................... $ 56.63 $ 79.13 $ 79.74
</TABLE>
- ------------------------
(1) Gives effect to the 10% stock dividend on BANC ONE Common Stock paid on
February 26, 1998 to shareholders of record as of February 12, 1998.
For additional information regarding the market prices of the BANC ONE
Common Stock and FCC Common Stock during the previous two years, see
"INFORMATION ABOUT BANC ONE CORPORATION--Market Prices of and Cash Dividends
Declared on BANC ONE Common Stock" and "INFORMATION ABOUT FIRST COMMERCE
CORPORATION--Market Prices of and Cash Dividends Declared on FCC Common Stock."
11
<PAGE>
SELECTED FINANCIAL DATA
The following table presents on a historical basis selected consolidated
financial data for each of BANC ONE and FCC for each of the years in the five
year period ended December 31, 1997. This financial data is based on and derived
from, and should be read in conjunction with, the historical consolidated
financial statements and the related notes thereto of BANC ONE and FCC,
respectively, incorporated herein by reference. See "AVAILABLE INFORMATION" and
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
SELECTED FINANCIAL DATA
(MILLIONS, EXCEPT PER SHARE)
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------------------------------------------
1997 1996 1995 1994 1993
------------ ------------ ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Total interest income and other income:
BANC ONE..................................... $ 13,219.1 $ 12,099.1 $ 10,363.3 $ 8,761.5 $ 8,194.1
FCC.......................................... 894.6 813.8 738.4 598.5 617.3
Income from continuing operations:
BANC ONE..................................... $ 1,305.7 $ 1,672.8 $ 1,445.2 $ 1,188.1 $ 1,263.3
FCC.......................................... 125.6 118.4 76.0 80.2 113.0
Income from continuing operations per common
share (basic):
BANC ONE(1).................................. $ 2.04 $ 2.60 $ 2.26 $ 1.82 $ 2.04
FCC.......................................... 3.24 3.05 1.90 2.02 2.91
Income from continuing operations per common
share (diluted):
BANC ONE(1).................................. $ 1.99 $ 2.52 $ 2.20 $ 1.80 $ 2.02
FCC.......................................... 3.10 2.89 1.87 1.98 2.75
Historical cash dividends declared per common
share:
BANC ONE(1).................................. $ 1.38 $ 1.24 $ 1.13 $ 1.03 $ 0.88
FCC.......................................... 1.60 1.45 1.25 1.10 0.85
Total assets (end of period):
BANC ONE..................................... $ 115,901.3 $ 112,153.5 $ 97,888.8 $ 95,283.4 $ 89,496.9
FCC.......................................... 9,507.3 9,190.1 8,530.8 7,966.5 8,038.7
Long-term borrowings (end of period):
BANC ONE..................................... $ 11,066.4 $ 6,827.8 $ 4,330.5 $ 2,938.6 $ 2,292.2
FCC.......................................... 390.8 80.7 88.3 90.1 92.5
Total stockholders' equity (end of period):
BANC ONE..................................... $ 10,376.0 $ 9,868.0 $ 9,051.4 $ 8,252.2 $ 7,748.3
FCC.......................................... 821.0 723.7 733.0 593.6 621.0
</TABLE>
- ------------------------
(1) Gives effect to all stock dividends and stock splits on BANC ONE Common
Stock, including the 10% stock dividends on BANC ONE Common Stock paid on
February 26, 1998.
12
<PAGE>
COMPARATIVE PER SHARE DATA
The following table sets forth (i) selected comparative per share data for
each of BANC ONE and FCC on a historical basis, (ii) selected unaudited pro
forma comparative per share data reflecting the consummation of the Merger and
(iii) selected unaudited pro forma comparative per share data reflecting the
consummation of the Merger and the proposed BANC ONE/First Chicago NBD Merger.
The unaudited pro forma comparative per share data assumes the Merger and the
BANC ONE/First Chicago NBD Merger had been consummated at the beginning of the
periods presented and has been prepared giving effect to the Merger and the BANC
ONE/First Chicago NBD Merger using the "pooling of interests" method of
accounting. See "THE MERGER--Accounting Treatment." The unaudited pro forma data
does not reflect any anticipated reorganization or restructuring expenses
resulting from the Merger. The FCC equivalent pro forma amounts are presented
with respect to each set of pro forma information.
Unaudited pro forma condensed combined financial information showing the
impact of the BANC ONE/First Chicago NBD Merger on the historical financial
position and results of operations of BANC ONE under the "pooling of interests"
method of accounting are set forth as Exhibit 99.7 to BANC ONE's Current Report
on Form 8-K dated April 10, 1998 (as amended by Form 8-K/A filed April 21,
1998), which is incorporated by reference herein. Such unaudited pro forma
financial information does not give effect to the Merger, as the acquisition is
not material to BANC ONE or the combined BANC ONE/First Chicago NBD on a pro
forma basis. See "RECENT DEVELOPMENTS--BANC ONE/First Chicago NBD Agreement."
The comparative per share data presented herein is based on and derived
from, and should be read in conjunction with, the historical consolidated
financial statements and the related notes thereto of BANC ONE, First Chicago
NBD and FCC, respectively, and the unaudited pro forma condensed combined
financial information referred to above, incorporated herein by reference. Pro
forma amounts are not necessarily indicative of results of operations or the
combined financial position that would have resulted had the Merger and/or the
BANC ONE/First Chicago NBD Merger been consummated at the beginning of the
periods indicated.
13
<PAGE>
<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1997 1996 1995
--------- --------- ---------
<S> <C> <C> <C>
BANC ONE(1)
Income from continuing operations per common share (basic):
Historical............................................................................... $ 2.04 $ 2.60 $ 2.26
Pro forma giving effect to the Merger.................................................... 2.06 2.57 2.19
Pro forma giving effect to the Merger and the BANC ONE/First Chicago NBD Merger.......... 2.48 2.64 2.17
Income from continuing operations per common share (diluted):
Historical............................................................................... $ 1.99 $ 2.52 $ 2.20
Pro forma giving effect to the Merger.................................................... 2.01 2.48 2.13
Pro forma giving effect to the Merger and the BANC ONE/First Chicago NBD Merger.......... 2.43 2.56 2.12
Cash dividends declared per common share
Historical............................................................................... $ 1.38 $ 1.24 $ 1.13
Pro forma giving effect to the Merger(2)................................................. 1.38 1.24 1.13
Pro forma giving effect to the Merger and the BANC ONE/First Chicago NBD Merger............ 1.38 1.24 1.13
Book value per common share as of end of period:
Historical............................................................................... $ 15.89
Pro forma giving effect to the Merger.................................................... 15.81
Pro forma giving effect to the Merger and the BANC ONE/First Chicago NBD Merger.......... 15.40
FCC
Income from continuing operations per common share (basic):
Historical............................................................................... $ 3.24 $ 3.05 $ 1.90
Equivalent pro forma giving effect to the Merger(3)...................................... 2.90 3.62 3.08
Equivalent pro forma giving effect to the Merger and the BANC ONE/First Chicago NBD
Merger(3).............................................................................. 3.49 3.72 3.06
Income from continuing operations per common share (diluted):
Historical............................................................................... $ 3.10 $ 2.89 $ 1.87
Equivalent pro forma giving effect to the Merger(3)...................................... 2.83 3.49 3.00
Equivalent pro forma giving effect to the Merger and the BANC ONE/First Chicago NBD
Merger(3).............................................................................. 3.42 3.60 2.98
Cash dividends declared per common share
Historical............................................................................... $ 1.60 $ 1.45 $ 1.25
Equivalent pro forma giving effect to the Merger(3)...................................... 1.94 1.75 1.59
Equivalent pro forma giving effect to the Merger and the BANC ONE/First Chicago NBD
Merger(3).............................................................................. 1.94 1.75 1.59
Book value per common share as of end of period:
Historical............................................................................... $ 21.03
Equivalent pro forma giving effect to the Merger(3)...................................... 22.26
Equivalent pro forma giving effect to the Merger and the BANC ONE/First Chicago NBD
Merger(3).............................................................................. 21.68
</TABLE>
- ------------------------------
(1) Gives effect to all stock dividends and stock splits on BANC ONE Common
Stock, including the 10% stock dividends on BANC ONE Common Stock paid on
February 26, 1998.
(2) The pro forma cash dividends per share represent historical dividends per
share paid by BANC ONE, adjusted to give effect to all stock dividends and
stock splits on BANC ONE Common Stock.
(3) The equivalent pro forma amounts are computed by multiplying the related pro
forma amounts by a factor of 1.408 to reflect the Exchange Rate.
14
<PAGE>
RECENT DEVELOPMENTS
BANC ONE/FIRST CHICAGO NBD AGREEMENT
On April 10, 1998, BANC ONE, First Chicago NBD and Newco entered into an
Agreement and Plan of Reorganization (the "BANC ONE/First Chicago NBD
Agreement") which provides for the combination of BANC ONE and First Chicago
NBD. In connection with the execution and delivery of the BANC ONE/First Chicago
NBD Agreement, BANC ONE and First Chicago NBD entered into customary stock
option agreements (the "BANC ONE/First Chicago NBD Stock Option Agreements")
pursuant to which BANC ONE granted to First Chicago NBD, and First Chicago NBD
granted to BANC ONE, an option to purchase up to 19.9% of the grantor's
outstanding shares of common stock at exercise prices (subject to antidilution
adjustments) of $94.00 (in the case of the option granted by First Chicago NBD)
and $61.75 (in the case of the option granted by BANC ONE). The BANC ONE/First
Chicago NBD Agreement and the BANC ONE/First Chicago NBD Stock Option
Agreements, as well as a joint press release and investor presentation with
respect to the proposed combination of BANC ONE and First Chicago NBD, are set
forth as exhibits to BANC ONE's Current Report on Form 8-K dated April 10, 1998
(as amended by Form 8-K/A filed April 21, 1998), which is incorporated by
reference herein, and the description of such agreements set forth herein is
qualified in its entirety by reference to the full text of such agreements.
Pursuant to the BANC ONE/First Chicago NBD Agreement, and subject to the
terms thereof, in a first step merger (the "First Step Merger"), BANC ONE will
merge with and into Newco, which will be the surviving corporation, and each
outstanding share of BANC ONE Common Stock, including shares of BANC ONE Common
Stock issued to FCC shareholders in connection with the completion of the
Merger, will be converted into one share of Newco common stock. Each stock
option to acquire BANC ONE Common Stock granted under BANC ONE's stock option
plans (collectively, the "BANC ONE Option Plans") that is outstanding and
unexercised immediately prior to the effective time of the First Step Merger
(including options to acquire shares of FCC Common Stock converted into BANC ONE
Common Stock in the Merger) will be converted automatically at such time into an
option to purchase Newco common stock and will continue to be governed by the
terms of the BANC ONE Option Plans, which will be assumed by Newco.
Further pursuant to the terms of the BANC ONE/First Chicago NBD Agreement,
and subject to the terms thereof, immediately after completion of the First Step
Merger, in a second-step merger (the "Second Step Merger" and, together with the
First Step Merger, the "BANC ONE/First Chicago NBD Merger"), First Chicago NBD
will merge with and into Newco, which will be the surviving corporation, and (i)
each outstanding share of common stock, par value $1.00 per share, of First
Chicago NBD (the "First Chicago NBD Common Stock") will be converted into 1.62
(the "BANC ONE/First Chicago NBD Exchange Ratio") shares of Newco common stock,
with cash being paid in lieu of fractional shares; (ii) each outstanding share
of First Chicago NBD Preferred Stock with Cumulative and Adjustable Dividends,
Series B, without par value ($100 stated value) ("First Chicago NBD Series B
Preferred"), will be converted into one share of Newco Preferred Stock with
Cumulative and Adjustable Dividends, Series B, without par value ($100 stated
value), which will have terms substantially identical to those of the First
Chicago NBD Series B Preferred, and (iii) each outstanding share of First
Chicago NBD Preferred Stock with Cumulative and Adjustable Dividends, Series C,
without par value ($100 stated value) ("First Chicago NBD Series C Preferred"),
will be converted into one share of Newco Preferred Stock with Cumulative and
Adjustable Dividends, Series C, without par value ($100 stated value), which
will have terms substantially identical to those of the First Chicago NBD Series
C Preferred. Additionally, at the effective time of the Second Step Merger, each
stock option to acquire First Chicago NBD Common Stock granted under First
Chicago NBD's stock option plans (collectively, the "First Chicago NBD Option
Plans") which is outstanding and unexercised immediately prior to such time will
be converted automatically at such time into an option to purchase Newco common
stock and will continue to be governed by the terms of the First Chicago NBD
Option Plans, which will be assumed by Newco. The number of shares of Newco
common stock subject to such options and the exercise price of such options will
be adjusted as
15
<PAGE>
provided in the BANC ONE/First Chicago NBD Agreement to give effect to the BANC
ONE/First Chicago NBD Exchange Ratio.
It is intended that the First Step Merger and the Second Step Merger shall
each constitute a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code of 1986, as amended (the "Code"), and that the BANC
ONE/First Chicago NBD Merger be accounted for as a "pooling of interests" under
generally accepted accounting principles.
Newco, as the surviving corporation in the BANC ONE/First Chicago NBD
Merger, will be incorporated in the State of Delaware. The Certificate of
Incorporation of Newco at the completion of the BANC ONE/First Chicago NBD
Merger (the "Newco Certificate") will be the certificate of incorporation of the
surviving corporation, and the By-Laws of Newco at the completion of the BANC
ONE/First Chicago NBD Merger (the "Newco By-Laws") will be the By-Laws of the
surviving corporation. The Newco Certificate and the Newco By-Laws will be
substantially similar to the First Chicago NBD Restated Certificate of
Incorporation (the "First Chicago NBD Certificate") and the First Chicago NBD
By-Laws, as amended (the "First Chicago NBD By-Laws"), respectively (except that
the Newco Certificate will provide that the name of the corporation shall be
"BANC ONE CORPORATION" and will authorize the issuance of 2.5 billion shares of
Newco common stock and 50 million shares of preferred stock of Newco, and the
Newco Certificate and By-Laws will provide for a board of directors of between
11 and 30 members), with such further modifications as are mutually agreed upon
by BANC ONE and First Chicago NBD. The First Chicago NBD Certificate is set
forth as Exhibit 3(A) to First Chicago NBD's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995, and the First Chicago NBD By-Laws are set
forth as Exhibit 3(B) to First Chicago NBD's Annual Report on Form 10-K for the
fiscal year ended December 31, 1997, and each is incorporated by reference
herein.
The Newco Board after the effective time of the BANC ONE/First Chicago NBD
Merger will initially be comprised of 22 directors, including John B. McCoy,
Chairman and Chief Executive Officer of BANC ONE, Richard J. Lehmann, President
and Chief Operating Officer of BANC ONE, Verne G. Istock, Chairman, President
and Chief Executive Officer of First Chicago NBD and David J. Vitale, Vice
Chairman of First Chicago NBD. Nine of the remaining directors of Newco will be
designated by BANC ONE, and the other nine directors of Newco will be designated
by First Chicago NBD. Following the effective time, Mr. Istock will be Chairman
of the Board of Directors of the combined company, Mr. McCoy will be President
and Chief Executive Officer of the combined company, and each of Messrs. Lehmann
and Vitale will be a Vice Chairman of the combined company.
Completion of the BANC ONE/First Chicago NBD Merger is subject to a number
of conditions, including the approval of the shareholders of BANC ONE and First
Chicago NBD and the receipt of all requisite regulatory approvals. While there
can be no assurance, it is expected that the BANC ONE/First Chicago NBD Merger
will close in the fourth quarter of calendar 1998.
While there can be no assurance, BANC ONE and First Chicago NBD currently
expect that the combined company will achieve approximately $1.205 billion in
annual pre-tax synergies as a result of the BANC ONE/First Chicago NBD Merger,
composed of $930 million in annual cost savings and $275 million in annual
revenue increases, and that the transaction will be accretive to earnings per
share begining in 1999. The expense savings will be derived principally from
cost reductions in the credit card, retail banking, commercial banking, capital
markets and indirect lending businesses of the combined company, in the
operations and technology budgets of the combined company and in its general and
administrative expenses, as well as through increased purchasing leverage with
certain suppliers to the combined company. Increased revenues are expected to
come principally in cross-selling opportunities involving the credit card,
retail banking and commercial banking businesses. The restructuring charge for
severance payments, facilities writedowns and other merger-related costs is
estimated to be $1.25 billion. Additional financial information concerning the
BANC ONE/First Chicago NBD Merger is contained in the joint press release and
investor presentation set forth as Exhibits 99.3 and 99.4 to BANC ONE's Current
Report
16
<PAGE>
on Form 8-K dated April 10, 1998 (as amended by Form 8-K/A filed April 21,
1998), which is incorporated by reference herein. See "FORWARD-LOOKING
STATEMENTS."
Unaudited pro forma condensed combined financial information showing the
impact of the BANC ONE/First Chicago NBD Merger on the historical financial
position and results of operations of BANC ONE under the "pooling of interests"
method of accounting are set forth as Exhibit 99.7 to BANC ONE's Current Report
on Form 8-K dated April 10, 1998 (as amended by Form 8-K/A filed April 21,
1998), which is incorporated by reference herein. Such unaudited pro forma
financial information does not give effect to the Merger, as the acquisition is
not material to BANC ONE or the combined BANC ONE/First Chicago NBD on a pro
forma basis.
FCC shareholders should understand that at the Meeting they are voting only
on the Merger, and that there is no assurance that the BANC ONE/First Chicago
NBD Merger will be completed. If FCC shareholders vote to approve the Merger and
the Merger is completed, such shareholders will become BANC ONE shareholders
without regard to whether the BANC ONE/First Chicago NBD Merger is ultimately
completed.
If the Merger is completed before the record date for the BANC ONE special
meeting of shareholders at which the BANC ONE/First Chicago NBD Merger will be
considered (the "BANC ONE Record Date"), FCC shareholders (as BANC ONE
shareholders following completion of the Merger) will have an opportunity to
vote on the BANC ONE/First Chicago NBD Merger. There can be no assurance,
however, that the Merger will be completed before such record date. As of the
date of this Prospectus and Proxy Statement, the BANC ONE Record Date had not
been set.
BANC ONE FIRST QUARTER 1998 FINANCIAL RESULTS
On April 21, 1998, BANC ONE announced unaudited results of its operations
for the three months ended March 31, 1998.
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
--------------------
1998 1997
--------- ---------
(MILLIONS, EXCEPT
PER SHARE DATA)
<S> <C> <C>
Interest income........................................................ $ 2,301.0 $ 2,324.1
Income before income tax............................................... 762.2 584.1
Net income............................................................. 517.6 381.9
Net income per common share (basic)(1)................................. $ .80 $ .60
Net income per common share (diluted)(1)............................... $ .79 $ .58
Weighted average common shares outstanding (millions) (basic)(1)....... 643.1 622.6
Weighted average common shares outstanding (millions) (diluted)(1)..... 655.5 655.6
</TABLE>
- ------------------------
(1) Gives effect to the 10% stock dividend on BANC ONE Common Stock paid on
February 26, 1998 to shareholders of record as of February 12, 1998.
At March 31, 1998, BANC ONE had consolidated total assets of $116.3 billion,
consolidated total deposits of $77.9 billion and consolidated total
stockholders' equity of $10.5 billion. Additional information regarding BANC
ONE's results of operations for the three months and year ended March 31, 1998
and financial condition at March 31, 1998 is contained in BANC ONE's Current
Report on Form 8-K dated April 21, 1998, which is incorporated by reference
herein.
17
<PAGE>
FCC FIRST QUARTER 1998 FINANCIAL RESULTS
On April 16, 1998, FCC announced unaudited results of its operations for the
three months ended March 31, 1998.
<TABLE>
<CAPTION>
FOR THE THREE MONTHS
ENDED MARCH 31,
--------------------
1998 1997
--------- ---------
(THOUSANDS, EXCEPT
PER SHARE DATA)
<S> <C> <C>
Interest income............................................................ $ 176.5 $ 171.2
Income before income tax................................................... 45.5 43.3
Net income................................................................. 30.8 29.0
Net income per common share (basic)........................................ $ .78 $ .75
Net income per common share (diluted)...................................... $ .75 $ .73
Weighted average common shares outstanding (millions) (basic).............. 39.3 38.8
Weighted average common shares outstanding (millions) (diluted)............ 43.4 42.3
</TABLE>
At March 31, 1998, FCC had consolidated total assets of $9.5 billion,
consolidated total deposits of $7.7 billion and consolidated total stockholders'
equity of $863.8 million. Additional information regarding FCC's results of
operations for the three months and year ended March 31, 1998 and financial
condition at March 31, 1998 is contained in FCC's Current Report on Form 8-K
dated April 20, 1998, which is incorporated by reference herein.
THE MEETING
This Prospectus and Proxy Statement is first being mailed to the FCC
shareholders on or about May 14, 1998, and is accompanied by the notice of the
Meeting and a form of proxy that is solicited on behalf of the FCC Board for use
at the Meeting to be held on June 12, 1998, at 9:00 a.m. local time at the Grand
Ballroom, the Sheraton Hotel, 500 Canal Street, New Orleans, Louisiana, and at
any adjournments or postponements thereof.
MATTERS TO BE CONSIDERED
The purpose of the Meeting is to take action with respect to the approval of
the Plan and the transactions contemplated thereby. The holders of FCC Common
Stock may also be asked to vote upon a proposal to adjourn or postpone the
Meeting, which adjournment or postponement could be used for the purpose, among
others, of allowing additional time for the soliciting of additional votes to
approve the Plan.
PROXIES
The form of proxy for use at the Meeting accompanies this Prospectus and
Proxy Statement. A shareholder may use a proxy whether or not he or she intends
to attend the Meeting in person. The proxy may be revoked in writing by the
person giving it at any time before it is exercised by notice to the Secretary
of FCC, by executing and submitting a later dated proxy or by attending and
voting in person at the Meeting. All proxies validly submitted and not revoked
will be voted in the manner specified therein. IF NO SPECIFICATION IS MADE, THE
PROXIES WILL BE VOTED IN FAVOR OF APPROVAL OF THE PLAN.
The FCC Board is not aware of any other matters that may be presented for
action at the Meeting, but if other matters do properly come before the Meeting
it is intended that the shares represented by the accompanying proxy will be
voted by the persons named in the proxy in accordance with their best
18
<PAGE>
judgment, provided that no proxy that is voted against approval of the Plan will
be voted in favor of any adjournment or postponement of the Meeting for the
purpose of soliciting additional proxies.
SOLICITATION OF PROXIES
The entire cost of soliciting the proxies from the FCC shareholders will be
borne by FCC; provided, however, that BANC ONE has agreed to pay the printing
costs of this Prospectus and Proxy Statement and related materials. In addition
to the solicitation of proxies by mail, FCC will request banks, brokers and
other record holders to send proxies and proxy material to the beneficial owners
of the stock and secure their voting instructions, if necessary. FCC will
reimburse such record holders for their reasonable expenses in so doing. FCC has
also made arrangements with Corporate Investor Communications, Inc. to assist it
in soliciting proxies from banks, brokers and nominees and has agreed to pay
approximately $8,000 plus expenses for such services. If necessary, FCC may also
use several of its regular employees, who will not be specially compensated, to
solicit proxies from shareholders, either personally or by telephone, telegram,
facsimile or special delivery letter.
RECORD DATE AND VOTING RIGHTS
April 24, 1998 has been fixed as the Record Date for determination of
holders of FCC Common Stock entitled to notice of and to vote at the Meeting.
Accordingly, only holders of FCC Common Stock of record at the close of business
on the Record Date will be entitled to notice of and to vote at the Meeting. At
the close of business on the Record Date, there were 39,863,717 shares of FCC
Common Stock outstanding. The presence, in person or by proxy, of holders of a
majority of the FCC Common Stock is necessary to constitute a quorum at the
Meeting. Each share of FCC Common Stock outstanding on the FCC Record Date
entitles its holder to one vote.
Shares of FCC Common Stock present in person at the Meeting but not voting,
and shares of FCC Common Stock for which FCC has received proxies but with
respect to which holders of such shares have abstained, will be counted as
present at the Meeting for purposes of determining the presence or absence of a
quorum for the transaction of business and determining the voting power present
for purposes of the vote on the Plan. Brokers who hold shares of FCC Common
Stock in nominee or "street" name for customers who are the beneficial owners of
such shares are prohibited from giving a proxy to vote shares held for such
customers with respect to the matters to be considered and voted upon at the
Meeting without specific instructions from such customers. Shares represented by
proxies returned by a broker holding such shares in "street" name will be
counted for purposes of determining whether a quorum exists, even if such shares
are not voted in matters where discretionary voting by the broker is not allowed
("broker non-votes"), but broker non-votes will not be counted in determining
the voting power present with respect to the vote on the Plan.
Under the Louisiana Law and the FCC Articles of Incorporation (the "FCC
Articles"), approval of the Plan requires the affirmative vote of the holders of
two-thirds of the FCC Common Stock present or represented by proxy at the
Meeting.
BECAUSE APPROVAL OF THE PLAN REQUIRES THE AFFIRMATIVE VOTE OF THE HOLDERS OF
TWO-THIRDS OF THE FCC COMMON STOCK PRESENT OR REPRESENTED BY PROXY AT THE
MEETING, ABSTENTIONS WILL HAVE THE SAME EFFECT AS NEGATIVE VOTES. ACCORDINGLY,
THE FCC BOARD URGES THE HOLDERS OF FCC COMMON STOCK TO COMPLETE, DATE AND SIGN
THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN THE ENCLOSED, POSTAGE-PAID
ENVELOPE.
As of the Record Date, the directors and executive officers of FCC, together
with their affiliates, beneficially owned approximately 5,600,000 shares of FCC
Common Stock entitling them to exercise approximately 14% of the voting power of
FCC entitled to vote at the Meeting. It is currently expected
19
<PAGE>
that all of the directors' and executive officers' and their respective
affiliates' shares will be voted in favor of the Plan.
As of the Record Date, the banking and trust subsidiaries of BANC ONE, as
fiduciaries, custodians or agents, held a total of 18,960 shares of FCC Common
Stock, representing less than 1% of the total voting power of the outstanding
shares of the FCC Common Stock, under trust agreements and other instruments and
agreements. These entities maintained sole or shared voting power with respect
to 9,184 of such shares of FCC Common Stock.
Additional information with respect to beneficial ownership of FCC Common
Stock by persons and entities owning more than five percent of such stock and
more detailed information with respect to beneficial ownership of FCC Common
Stock by directors and executive officers of FCC is incorporated by reference to
FCC's Annual Report on Form 10-K for the year ended December 31, 1997. See
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
RECOMMENDATION OF FCC BOARD
The FCC Board has approved the Plan and the transactions contemplated
thereby. The FCC Board believes that the Plan is in the best interests of FCC
and its shareholders and recommends that the FCC Shareholders vote "FOR" the
approval of the Plan. See "THE MERGER--Background of and FCC Reasons for the
Merger."
20
<PAGE>
THE MERGER
THE FOLLOWING SUMMARY OF CERTAIN TERMS AND PROVISIONS OF THE PLAN AND THE
OPTION AGREEMENT IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE PLAN AND THE
OPTION AGREEMENT, WHICH ARE INCLUDED AS EXHIBITS TO THE CURRENT REPORT ON FORM
8-K, DATED OCTOBER 20, 1997, OF BANC ONE AND ARE INCORPORATED HEREIN BY
REFERENCE. SEE "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
GENERAL
The Plan provides for the merger of Delta with and into FCC, with FCC as the
surviving corporation. Upon the effectiveness of the Merger (the "Effective
Time") each of the outstanding shares of FCC Common Stock (together with any and
all Rights issued pursuant to the FCC Rights Plan) will be converted into 1.408
shares of BANC ONE Common Stock (the "Exchange Rate"), which shares of BANC ONE
Common Stock will be issued as a result of the Merger. The Exchange Rate has
been adjusted to give effect to the 10% stock dividend on BANC ONE Common Stock
paid on February 26, 1998, and is subject to further adjustments in certain
circumstances. An increase or decrease in the market price of BANC ONE Common
Stock will not affect the Exchange Rate or the number of shares of BANC ONE
Common Stock issuable in the Merger; therefore, the value of the consideration
to be received by FCC's shareholders in the Merger will increase if the market
price of BANC ONE Common Stock increases as of the Effective Time or decrease if
the market price of BANC ONE Common Stock decreases as of the Effective Time.
However, FCC has the right to terminate the Plan if the market price of BANC ONE
Common Stock is below certain thresholds and BANC ONE does not elect to increase
the Exchange Rate, as discussed under "--Termination."
Holders of at least two-thirds of the FCC Common Stock present or
represented by proxy at the Meeting must vote for the Plan for the Merger to be
completed. The closing of the Merger will (unless the parties agree otherwise)
take place on a date specified by BANC ONE (the "Closing Date"), which date
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
completion of the Merger by the Federal Reserve and the Louisiana Commissioner,
(ii) the date of the Meeting 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. 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 Merger will become effective as soon as possible after the
Closing Date in accordance with the Ohio Law and the Louisiana Law on the later
to occur of (x) the filing with the Secretary of State of the State of Ohio of a
Certificate of Merger and (y) the filing with the Secretary of State of the
State of Louisiana of a Certificate of Merger.
The Boards of Directors of BANC ONE, Delta and FCC have approved the Plan.
BANC ONE, as the sole shareholder of Delta, has approved or will approve the
Plan. Approval of the Plan by the shareholders of BANC ONE is not required for
completion of the Merger.
BACKGROUND OF AND FCC REASONS FOR THE MERGER
In late summer 1997, Ian Arnof, Chief Executive Officer of FCC, observed
that recent mergers of financial institutions were taking place at higher values
than had theretofore been the case, and noted statements of certain securities
analysts that a merger value for FCC could exceed $70 per share. Mr. Arnof
discussed these observations with several members of FCC's Executive Committee
(the "FCC Executive Committee") and at a meeting of the full FCC Executive
Committee on September 15, 1997. The FCC Executive Committee determined that a
transaction in which FCC shareholders would potentially receive in excess of $70
in value merited serious consideration by FCC and, accordingly, it authorized
Mr. Arnof to make informal contact on a confidential basis with certain
institutions that the FCC
21
<PAGE>
Executive Committee and Mr. Arnof believed were of a size to be capable of a
stock acquisition of an institution of the size of FCC and whose shares were
subjectively believed to represent an attractive investment.
Mr. Arnof then contacted John G. Duffy, a representative of KBW, and
requested that he make the contacts with the institutions directed by the FCC
Executive Committee and with certain other institutions suggested by Mr. Duffy.
Mr. Duffy proceeded to make these contacts and provided them with certain
information about FCC. He reported to Mr. Arnof that three of the institutions
expressed an interest in a transaction, and after consulting with Mr. Arnof (who
in turn consulted with certain members of the FCC Executive Committee), Mr.
Duffy asked each of these institutions for a more concrete expression of its
level of interest.
On October 9, after further discussions with the institutions expressing
interest and providing them with additional information about FCC, two
institutions presented acquisition proposals to Mr. Duffy which proposed
exchange values in excess of $70 per share. Mr. Arnof reported these proposals
to certain members of the FCC Executive Committee, and it was decided that these
proposals should be reviewed by the full FCC Board.
A meeting of the FCC Board was held on October 13, at which representatives
of KBW (including Mr. Duffy) and outside counsel were present. Mr. Arnof
reviewed with the FCC Board the actions that the FCC Executive Committee, he and
Mr. Duffy had taken. The KBW representatives then made a detailed presentation
of the two proposals, the business and prospects of the two institutions and
their securities as an investment, FCC's prospects as an independent entity and
other factors. Mr. Arnof described for the FCC Board his views regarding the two
proposals as well as FCC's future prospects as a stand-alone entity, including
the likelihood and timing of achieving value for the stockholders equal to or in
excess of the values proposed by the two institutions. Counsel then described to
the FCC Board the likely nonfinancial terms of a definitive agreement based upon
the terms of other recent agreements involving financial institutions, including
the likelihood that the acquiror would insist on a fixed rather than floating
exchange ratio and upon certain lock-up arrangements, including an option
similar to the Option Agreement.
After discussions, the FCC Board concluded that it would be in the best
interest of FCC to proceed to negotiate with the two institutions for the price
and other terms of a definitive agreement to present to the FCC Board for
consideration as soon as practicable, keeping in mind the need for the strictest
confidentiality.
During the remainder of the week of October 13, Mr. Arnof, Michael A. Flick,
FCC's Chief Administrative Officer, and Mr. Duffy engaged in negotiations with
the two institutions and scheduled simultaneous due diligence reviews in New
Orleans. During the course of these negotiations and due diligence sessions, it
became apparent to Messrs. Arnof, Flick and Duffy that because BANC ONE had an
existing presence in Louisiana that complemented FCC's presence in the state,
allowing BANC ONE to achieve significant cost savings in a merger that the other
institution could not, BANC ONE had greater capacity to increase its proposed
financial terms than the other institution. Moreover, discussions with the other
institution indicated that it was unlikely the other institution would be
willing to significantly improve its initial proposal. Accordingly, Messrs.
Arnof, Flick and Duffy concluded that the best opportunity to achieve a
desirable transaction was to request BANC ONE to provide its best offer in
exchange for a termination of discussions with the other institution.
Accordingly, on Wednesday, October 15, this proposition was presented to BANC
ONE, and, after further discussions, BANC ONE then proposed the current Exchange
Rate of 1.408 shares of BANC ONE Common Stock for each share of FCC Common
Stock. Discussions with the other institution were terminated, and it was
determined to recommend the Exchange Rate to the FCC Board. During this period
and the subsequent period up to the special FCC Board meeting referred to below,
Mr. Arnof consulted with several members of the FCC Board.
During the period from October 16 through October 20, Messrs. Arnof, Flick
and Duffy, together with outside counsel, negotiated the terms of the definitive
agreement. During these negotiations, BANC
22
<PAGE>
ONE proposed that contemporaneously with the definitive agreement FCC also enter
into the Option Agreement. When it became clear that BANC ONE viewed the Option
Agreement as an essential component of its willingness to enter into the
definitive agreement, the terms of the Option Agreement were negotiated, and Mr.
Arnof agreed to present the Option Agreement for consideration by the FCC Board.
The Plan and the Option Agreement were considered at a special FCC Board
meeting held on October 20. At that meeting, which was also attended by FCC's
executive management, and by representatives of KBW, FCC's outside counsel and
Arthur Andersen LLP, FCC's independent public accountants, the FCC Board
reviewed with management the events since its last meeting, and received
presentations from KBW on the financial terms of the definitive agreement,
comparable transactions, the potential of obtaining a greater exchange ratio
from other institutions, and on information about FCC and BANC ONE. Mr. Flick
and FCC's outside counsel described the non-financial terms of the Plan and the
Option Agreement, including the various proposals negotiated, and the
representative of Arthur Andersen LLP reported on its review of BANC ONE made at
FCC's request and certain accounting and tax considerations. The FCC Board was
advised that on the basis of the closing price of BANC ONE Common Stock on
Friday, October 17, the proposed Exchange Rate would result in a value of $70.64
per share for FCC shareholders. Management then recommended that FCC enter into
the Plan and the Option Agreement, and KBW advised the FCC Board that, in its
opinion, the Exchange Rate was fair to FCC and its shareholders from a financial
point of view. The FCC Board then unanimously resolved to enter into the Plan
and the Option Agreement, and they were executed promptly after the Board
Meeting.
In reaching its conclusion to approve the Plan and the Option Agreement, the
FCC Board considered a number of factors, including the following:
(a) Information with respect to FCC's financial condition on both a
historical and pro forma basis, future dividends, and the financial
prospects for FCC and its shareholders if FCC determined to remain a
stand-alone company.
(b) The opinion of KBW that, from a financial point of view, the terms
of the Merger as provided in the Plan were fair to FCC shareholders. See
"--Opinion of FCC's Financial Advisor."
(c) A comparison of the terms of the Plan with recent transactions
involving similar companies, including the premium to be paid to FCC
shareholders and how it compares with recent bank merger transactions
involving selling institutions with assets of similar size, as well as with
recent transactions involving Louisiana banks as sellers. On the basis of
the closing sales prices of FCC Common Stock and BANC ONE Common Stock on
October 17, 1998, the proposed Exchange Rate represented a 21.5% premium
over the price of FCC Common Stock.
(d) The terms of the proposed Plan, including the tax-free nature of the
Merger for FCC shareholders, the Exchange Rate and the Option Agreement.
(e) The effect on FCC's shareholders' value if FCC continued as a
stand-alone entity as compared to the effect of a merger with BANC ONE,
including a comparison of earnings per share and book value per share on a
pro forma basis. The FCC Board analyzed future dividends for FCC
shareholders and post-merger shareholder dividends. At the Exchange Rate,
FCC shareholders would receive an approximately 21% increase in dividends
over that paid by FCC in the fourth quarter of 1997.
(f) The interests of FCC and its shareholders as well as the social,
legal and economic effects on employees, customers and the community.
23
<PAGE>
OPINION OF FCC'S FINANCIAL ADVISOR
On October 7, 1997, FCC engaged KBW to act as its exclusive financial
advisor in connection with the Merger. FCC selected KBW because KBW is a
nationally recognized investment banking firm with substantial experience in
transactions similar to the Merger and is familiar with FCC and its business. As
part of its investment banking business, KBW is continually engaged in the
valuation of businesses and their securities in connection with mergers and
acquisitions.
As part of its engagement, representatives of KBW attended the meeting of
the FCC Board held on October 20, 1997 at which the FCC Board considered and
approved the Plan. At the October 20, 1997 meeting, KBW rendered an oral opinion
that, as of such date, the Exchange Rate was fair to the holders of shares of
FCC Common Stock from a financial point of view. Such opinion was reconfirmed in
writing as of May 12, 1998.
The full text of KBW's updated written opinion dated as of May 12, 1998 is
attached as Appendix A to this Prospectus and Proxy Statement and is
incorporated herein by reference. The description of the opinion set forth
herein is qualified in its entirety by reference to Appendix A. FCC shareholders
are urged to read the opinion in its entirety for a description of the
procedures followed, assumptions made, matters considered, and qualifications
and limitations on the review undertaken by KBW in connection therewith.
KBW'S OPINION IS DIRECTED TO THE FCC BOARD AND ADDRESSES ONLY THE EXCHANGE
RATE. IT DOES NOT ADDRESS THE UNDERLYING BUSINESS DECISION TO PROCEED WITH THE
MERGER AND DOES NOT CONSTITUTE A RECOMMENDATION TO ANY FCC SHAREHOLDER AS TO HOW
SUCH SHAREHOLDER SHOULD VOTE AT THE MEETING WITH RESPECT TO THE MERGER OR ANY
OTHER MATTER RELATED THERETO.
KBW has informed FCC that in arriving at its written opinion, KBW, among
other things: (1) reviewed FCC's Annual Reports on Form 10-K and related audited
financial information for the three fiscal years ended December 31, 1997 and
FCC's quarterly reports on Form 10-Q and related unaudited financial information
for the quarterly periods ended September 30, 1997, June 30, 1997 and March 31,
1997; (2) reviewed BANC ONE's Annual Reports on Form 10-K and related audited
financial information for the three fiscal years ended December 31, 1997 and
BANC ONE's quarterly reports on Form 10-Q and related unaudited financial
information for the quarterly periods ended September 30, 1997, June 30, 1997
and March 31, 1997; (3) reviewed certain limited financial information,
including financial forecasts, relating to the respective businesses, earnings,
assets and prospects of FCC and BANC ONE furnished to KBW by senior management
of FCC and BANC ONE; (4) conducted certain limited discussions with members of
senior management of FCC and BANC ONE concerning the respective businesses,
financial condition, earnings, assets, liabilities, operations, regulatory
condition, financial forecasts, contingencies and prospects of FCC and BANC ONE
and their respective views as to the future financial performance of FCC, BANC
ONE and the combined entity, as the case may be, following the Merger; (5)
reviewed the historical market prices and trading activity for FCC Common Stock
and BANC ONE Common Stock and compared them with that of certain publicly traded
companies which KBW deemed to be relevant; (6) compared the respective results
of operations of FCC and BANC ONE with those of certain companies which KBW
deemed to be relevant; (7) compared the proposed financial terms of the Merger
contemplated by the Plan with the financial terms of certain other mergers and
acquisitions which KBW deemed to be relevant; (8) considered, based upon
information provided by BANC ONE's senior management, the pro forma impact of
the Merger on the earnings and book value per share, consolidated capitalization
and certain balance sheet and profitability ratios of BANC ONE; (9) reviewed the
Plan; and (10) reviewed such other financial studies and analyses and performed
such other investigations and took into account such other matters as KBW deemed
necessary. In addition, KBW reviewed the BANC ONE/First Chicago NBD Agreement
pursuant to which BANC ONE and First Chicago NBD will merge with and into Newco,
and the Current Report on Form 8-K, dated as of April 10, 1998, as amended, of
BANC ONE to which the BANC ONE/First Chicago NBD Agreement is an exhibit, and
certain other publicly available information
24
<PAGE>
and financial data relating to First Chicago NBD and the BANC ONE/First Chicago
NBD Merger as KBW deemed appropriate.
In preparing its opinion, KBW, with FCC's consent, assumed and relied on the
accuracy and completeness of all financial and other information supplied or
otherwise made available to it by FCC and BANC ONE, including that contemplated
in the numbered items above, and KBW has not assumed responsibility for
independently verifying such information or undertaken an independent evaluation
or appraisal of the assets or liabilities, contingent or otherwise, of FCC, BANC
ONE or any of their subsidiaries, nor has it been furnished any such evaluation
or appraisal. KBW is not an expert in the evaluation of allowances for loan
losses, and, with FCC's consent, it has not made an independent evaluation of
the adequacy of the allowance for loan losses of FCC or BANC ONE, nor has it
reviewed any individual credit files relating to FCC or BANC ONE, and, with
FCC's consent, it assumed that the respective aggregate allowances for loan
losses for both FCC and BANC ONE are adequate to cover such losses and will be
adequate on a pro forma basis for the combined entity. In addition, it has not
conducted any physical inspection of the properties or facilities of FCC or BANC
ONE. With FCC's consent, KBW also assumed and relied upon the senior management
of FCC and BANC ONE as to the reasonableness and achievability of the financial
forecasts and projections (and the assumptions and bases therefor) provided to,
and discussed with, KBW. In that regard, KBW has assumed with FCC's consent that
such forecasts and projections, including without limitation, financial
forecasts, evaluations of contingencies, operating synergies resulting from the
Merger and projections regarding underperforming and non-performing assets, net
charge-offs, adequacy of reserves, future economic conditions and results of
operations reflect the best currently available estimates and judgments of the
senior management of FCC and BANC ONE and/or the combined entity, as the case
may be. KBW's opinion is predicated on the Merger receiving the tax and
accounting treatment contemplated in the Plan. KBW's opinion was necessarily
based on economic, market and other conditions as in effect on, and the
information made available to it as of, the date of its opinion.
KBW's opinion was rendered without regard to the necessity for, or level of,
any restrictions, obligations, undertakings or divestitures which may be imposed
or required in the course of obtaining regulatory approval for the Merger.
In connection with rendering its oral opinion on October 20, 1997, KBW
performed a variety of financial analyses, consisting of those summarized below.
The summary set forth below does not purport to be a complete description of the
analyses performed by KBW in this regard, although it describes all material
analyses performed by KBW. The preparation of a fairness opinion involves
various determinations as to the most appropriate and relevant methods of
financial analysis and the application of these methods to the particular
circumstances and, therefore, such an opinion is not readily susceptible to a
partial analysis or summary description. Accordingly, notwithstanding the
separate factors summarized below, KBW believes that its analyses must be
considered as a whole and that selecting portions of its analyses and factors
considered by it, without considering all analyses and factors, or attempting to
ascribe relative weights to some or all such analyses and factors, could create
an incomplete view of the evaluation process underlying KBW's opinion.
In performing its analyses, KBW made numerous assumptions with respect to
industry performance, general business and economic conditions and other
matters, many of which are beyond the control of BANC ONE, FCC and KBW. The
analyses performed by KBW are not necessarily indicative of actual values or
future results, which may be significantly more or less favorable than suggested
by such analyses. Such analyses were prepared solely as part of KBW's analysis
of the fairness to the FCC shareholders of the Exchange Rate and were provided
to the FCC Board in connection with the delivery of KBW's opinion. KBW gave the
various analyses described below approximately similar weight and did not draw
any specific conclusions from or with regard to any one method of analysis. With
respect to the comparison of selected companies analysis and the analysis of
selected merger transactions summarized below, no company utilized as a
comparison is identical to FCC or BANC ONE. Accordingly, an analysis of
comparable companies and comparable business combinations is not mathematical;
rather it involves
25
<PAGE>
complex considerations and judgments concerning the differences in financial and
operating characteristics of the companies and other factors that could affect
the public trading values or announced merger transaction values, as the case
may be, of the companies concerned. The analyses do not purport to be appraisals
or to reflect the process at which FCC and BANC ONE might actually be sold or
the prices at which any securities may trade at the present time or at any time
in the future. In addition, as described above, KBW's opinion is just one of
many factors taken into consideration by the FCC Board.
The projections furnished to KBW and used by it in certain of its analyses
were prepared by the senior management of FCC and BANC ONE. FCC and BANC ONE do
not publicly disclose internal management projections of the type provided to
KBW in connection with its review of the Merger, and as a result, such
projections were not prepared with a view towards public disclosure. The
projections were based on numerous variables and assumptions which are
inherently uncertain, including, without limitation, factors related to general
economic and competitive conditions, and accordingly, actual results could vary
significantly from those set forth in such projections.
The following is a summary of the material analyses presented by KBW to the
FCC Board on October 20, 1997 ("The KBW Report") in connection with its oral
opinion.
SUMMARY OF PROPOSAL. KBW calculated multiples which were based on the
assumed per share purchase price of $70.64 (derived by multiplying the Exchange
Rate of 1.408 by $50.17, the last reported sale price for the BANC ONE Common
Stock on the last day of trading prior to the public announcement of the
execution of the Plan). FCC's September 30, 1997 stated book value was $20.29,
tangible book value was $19.87, 1997 and 1998 earnings per share estimates
(provided by a nationally recognized composite earnings estimate service) were
$3.18 and $3.55, respectively, its trailing 12 months (September 30, 1996 to
September 30, 1997) earnings per share was $2.92, and its last reported sale
price was $58.13 per share. Based on this data, the price to stated book value
multiple was 3.48 times, the price to fully diluted tangible book value multiple
was 3.56 times, the price to the 1997 and 1998 earnings estimates per share was
22.2 and 19.9 times, respectively, the multiple of price to the trailing 12
months earnings was 24.2 times, and the deal price per share represented a 21.5%
premium over market price.
ANALYSIS OF SELECTED MERGER TRANSACTIONS. KBW reviewed certain financial
data related to (1) comparable nationwide acquisitions of bank holding companies
with announced deal values greater than $500 million from the latest twelve
months, (2) the twenty largest holding company acquisitions by announced deal
value as of October 20, 1997, and (3) BANC ONE's previous acquisitions announced
after January 1, 1990. The following transactions comprised the three groups:
(1) NationsBank Corp./Barnett Banks Inc., First Union Corp./Signet Banking
Corp., Wachovia Corp./Central Fidelity, Wachovia Corp./ Jefferson Bankshares,
Huntington Bancshares/First Michigan Bank Corp., First Bank System/U.S. Bancorp,
Allied Irish Banks/Dauphin Deposit Corp., BANC ONE/Liberty Bancorp, Inc., BB&T
Corp./ United Carolina Bancshares and Mercantile Bancorp/Mark Twain Bancshares;
(2) NationsBank Corp./ Barnett Banks Inc., Wells Fargo/First Interstate,
Chemical Banking/Chase Manhattan Corp, NationsBank Corp./Boatmen's Bancshares,
First Bank System/U.S. Bancorp, Washington Mutual/Great Western Financial, First
Union Corp./First Fidelity Bancorp, First Chicago Corp./NBD Bancorp, Inc.,
BankAmerica/ Security Pacific, NCNB Corporation/C&S/Sovran, KeyCorp/Society
Corp., Fleet Financial Group/ Shawmut National, First Union Corp./Signet Banking
Corp., Fleet Financial Group/National Westminster, CoreStates Financial/Meridian
Bancorp, PNC Bank Corp./Midatlantic Corp., Wachovia Corp./Central Fidelity,
BankAmerica/Continental Bank, Chemical Banking/Manufacturers Hanover and
National City Corp./Integra Financial; (3) BANC ONE/First USA, Inc., Liberty
Bancorp, Inc., Premier Bancorp, First*Bank, Liberty National Bancorp, Capital
Bancorp, Parkdale Bank, Mid States Bancshares, Central Banking Group, Colorado
Western Bancorp, Ameribank Charleston, First Financial Assoc., United National
Bank, First Community Bancorp, Key Centurion Bancshares, Valley National Corp.,
Team Bancshares, Affiliated Bankshares, Jefferson Bancorp, First Security Corp.,
Bedford National Bank, First Illinois Corp., Marine Corporation and Four PNC
Banks.
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KBW calculated the average and median of group one's multiples of price to
the targets' earnings (trailing 12 months) as 21.6 times and 20.3 times,
respectively, compared to a multiple of 24.2 for the Merger; the average and
median premiums to the targets' stated book values of 293% and 283%,
respectively, compared to a premium of 348% associated with the Merger; the
average and median premiums to the target's tangible book value of 325% and
299%, respectively, compared to a premium of 356% associated with the Merger;
and the average and median premiums to the targets' core deposits (net of
tangible equity) of 22.8% and 21.5%, respectively, compared to 28.8% associated
with the Merger.
KBW calculated the average and median of group two's multiples of price to
the targets' earnings (trailing 12 months) as 21.7 times and 18.3 times,
respectively, compared to a multiple of 24.2 for the Merger; the average and
median premiums to the targets' stated book values of 230% and 209%,
respectively, compared to a premium of 348% associated with the Merger; the
average and median premiums to the target's tangible book value of 269% and
251%, respectively, compared to a premium of 356% associated with the Merger;
and the average and median premiums to the targets' core deposits (net of
tangible equity) of 17.1% and 17.0%, respectively, compared to 28.8% associated
with the Merger.
KBW calculated the average and median of group three's multiples of price to
the targets' earnings (trailing 12 months) as 16.6 times and 15.8 times,
respectively, compared to a multiple of 24.2 for the Merger; the average and
median premiums to the targets' stated book values of 192% and 183%,
respectively, compared to a premium of 348% associated with the Merger; the
average and median premiums to the target's tangible book value of 201% and
199%, respectively, compared to a premium of 356% associated with the Merger;
and the average and median premiums to the targets' core deposits (net of
tangible equity) of 10.0% and 10.3%, respectively, compared to 28.8% associated
with the Merger.
No company or transaction used as a comparison in the above analysis is
identical to FCC, BANC ONE or the Merger. Accordingly, an analysis of the
results of the foregoing is not mathematical; rather, it involves complex
considerations and judgments concerning differences in financial and operating
characteristics of the companies and other factors that could affect the public
trading value of the companies to which they are being compared.
SELECTED PEER GROUPS ANALYSES. KBW separately compared the financial
performance and market performance of FCC and BANC ONE based on various
financial measures of earnings performance, operating efficiency, capital
adequacy and asset quality and various measures of market performance, including
market/book values, price to earnings and dividend yields to those of selected
bank holding companies. For purposes of such analysis, the financial information
used by KBW was as of and for the quarter ended June 30, 1997. Market price
information was as of October 17, 1997. The companies in the FCC peer group were
SouthTrust Corp., Regions Financial Corp., AmSouth Bancorporation, First
Tennessee National Corp., Compass Bancshares, Inc., First American Corp.,
Hibernia Corp., Deposit Guaranty Corp., First Commercial Corp. and Whitney
Holding Corp. The companies in the BANC ONE peer group were The Chase Manhattan
Corporation, Citicorp, NationsBank Corp., BankAmerica Corp., J.P. Morgan &
Company, Inc., First Union Corp., Bankers Trust New York Corp., First Chicago
NBD Corp., Wells Fargo & Company, Norwest Corp., Fleet Financial Group, Inc.,
PNC Bank Corp., U.S. Bancorp, KeyCorp, BankBoston Corp., Wachovia Corp., Bank of
New York Company, Inc., Republic New York Corp., SunTrust Banks, Inc., National
City Corporation, CoreStates Financial Corp., Mellon Bank Corp., State Street
Corp., Comerica Inc., UnionBanCal Corp., SouthTrust Corp., and Northern Trust
Corp.
KBW's analysis showed the following concerning FCC's financial performance:
return on assets on an annualized basis was 1.44%, compared with an average of
1.32% and median of 1.37%; return on equity on an annualized basis was 17.85%,
compared with an average of 16.09% and median of 16.06%; net interest margin on
an annualized basis was 4.66%, compared with an average of 4.42% and median of
4.28%; efficiency ratio on an annualized basis was 56.34%, compared with an
average of 59.03% and median of 60.01%; ratio of equity to total assets was
8.17%, compared with an average of 8.34% and median of 8.49%; ratio of tangible
equity to total assets was 8.01%, compared with an average of 7.36% and median
of 7.30%; ratio of nonperforming assets to total assets was 0.39%, compared to
an average of 0.40% and
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median of 0.43%; and ratio of loan loss reserve to nonperforming loans was 259%,
compared to an average of 330% and median of 285%.
KBW's analysis further showed the following concerning FCC's market
performance: that FCC's price to earnings per share multiple based on 1997
estimated earnings was 18.28 times, compared to an average of 17.48 and median
of 17.43; price to earnings per share multiple based on 1998 estimated earnings
was 16.37 times, compared to an average of 15.78 and median of 15.77; that its
price to book value per share was 2.96 times, compared to an average of 2.82
times and median of 2.78 times; and its dividend yield was 2.75%, compared to an
average of 2.12% and median of 2.11%.
KBW's analysis showed the following concerning BANC ONE's financial
performance: return on assets on an annualized basis was 1.26%, compared with an
average of 1.31% and median of 1.33%; return on equity on an annualized basis
was 14.18%, compared with an average of 17.46% and median of 18.02%; net
interest margin on an annualized basis was 5.40%, compared with an average of
4.03% and median of 4.22%; efficiency ratio on an annualized basis was 56.29%,
compared with an average of 58.41% and median of 56.97%; ratio of equity to
total assets was 8.53%, compared with an average of 7.45% and median of 7.64%;
ratio of tangible equity to total assets was 7.68%, compared with an average of
6.13% and median of 6.14%; ratio of nonperforming assets to total assets was
0.39%, compared to an average of 0.45% and median of 0.41%; and ratio of loan
loss reserve to nonperforming loans was 344%, compared to an average of 370% and
median of 327%.
KBW's analysis further showed the following concerning BANC ONE's market
performance: that BANC ONE's price to earnings per share multiple based on 1997
estimated earnings was 19.10 times, compared to an average of 17.06 and median
of 16.42; price to earnings per share multiple based on 1998 estimated earnings
was 13.73 times, compared to an average of 14.99 and median of 14.43; that its
price to book value per share was 3.32 times, compared to an average of 3.05
times and median of 2.88 times; and its dividend yield was 2.75%, compared to an
average of 2.19% and median of 2.14%.
For purposes of the above calculations, all earnings estimates were based
upon the published estimates of a nationally recognized composite earnings
estimate service.
FINANCIAL IMPACT ANALYSIS. KBW performed pro forma merger analysis that
combined projected income statement and balance sheet information. Assumptions
regarding the accounting treatment, acquisition adjustments, cost savings and
revenue enhancements were used to calculate the financial impact that the Merger
would have on certain projected financial results of BANC ONE. This analysis was
based on analysts' and the respective managements' estimates of FCC and BANC
ONE's 1998 earnings per share. These projections were discussed with the
management of each of FCC and BANC ONE. The actual results achieved by BANC ONE
following the Merger will vary from the projected results, and the variations
may be material.
KBW calculated the impact of the Merger on BANC ONE's earnings per share.
For BANC ONE, this computation assumed the composite 1998 and 1999 earnings per
share estimates, respectively, of $4.02 and $4.50. For FCC, the assumptions were
1998 and 1999 earnings per share, respectively, of $3.55 and $3.92. For both
companies earnings growth rates of 8.00% in 2000, 2001 and 2002 were assumed.
Estimated pre-tax cuts of FCC's non-interest expenses of 25.00% in 1998, and
35.00% from 1999 through 2002 were assumed. The combined estimated earnings
stream including cost savings resulted in projected decreases of 0.63%, 0.05%,
0.10%, 0.15% and 0.20% in BANC ONE's 1998, 1999, 2000, 2001 and 2002 earnings
per share, respectively. KBW calculated that cost savings of 34.7% would be
necessary to eliminate dilution in 1998.
KBW calculated that based on the Exchange Rate of 1.408 shares of BANC ONE
Common Stock to each share of FCC Common Stock, FCC shareholders would own 8.7%
of the combined entity. Compared to an independent scenario based on the
Exchange Rate, earnings per share of FCC Common Stock would increase by 44.9%,
book value per share would increase by 8.2% and dividends per share would
increase by 21.6%.
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DISCOUNTED CASH FLOW ANALYSIS. KBW estimated the present value of the
future cash flows that would accrue to a holder of a share of FCC Common Stock
assuming the shareholder held the stock through the year 2002 and then sold it
at the end of year 2002. The analysis was based on several assumptions,
including an earnings per share of $3.55 in 1998 and a 50% dividend payout ratio
through the year 2002. A terminal value was calculated for 2002 by multiplying
FCC's projected 2002 earnings by a price/earnings multiple of 20.0 times
trailing earnings. KBW presented a table with a range of earnings per share
growth rates of 8.0% to 18.0% and a range of discount rates of 11.50% to 14.50%,
resulting in a range of present values for a share of FCC Common Stock of $56.05
to $88.87. These values were determined by adding (1) the present value of the
estimated future dividend stream that FCC could generate over the period
beginning January 1998 and ending in December 2002 and (2) the present value of
the "terminal value" of the FCC Common Stock.
KBW stated that the discounted cash flow analysis is a widely-used valuation
methodology but noted that it relies on numerous assumptions, including asset
and earnings growth rates, dividend payout rates, terminal values and discount
rates. The analysis did not purport to be indicative of the actual values or
expected values of FCC Common Stock.
In connection with its opinion attached as Appendix A to this Prospectus and
Proxy Statement, KBW performed procedures to update, as necessary, certain of
the analyses described above and reviewed the assumptions on which such analyses
described above were based and the factors considered in connection therewith.
As part of its update, KBW reviewed the financial impact of the proposed BANC
ONE/First Chicago NBD Merger. KBW did not perform any analyses in addition to
those described above in updating its October 20, 1997 opinion.
KBW has been retained by the FCC Board as an independent contractor to act
as financial adviser to FCC with respect to the Merger. KBW, as part of its
investment banking business, is continually engaged in the valuation of banking
businesses and their securities in connection with mergers and acquisitions,
negotiated underwritings, competitive biddings, secondary distributions of
listed and unlisted securities, private placements and valuations for estate,
corporate and other purposes. As specialists in the securities of banking
companies, KBW has experience in, and knowledge of, the valuation of banking
enterprises. In the ordinary course of its business as a broker-dealer, KBW may,
from time to time, purchase securities from, and sell securities to, FCC and
BANC ONE, and as a market maker in securities KBW may from time to time have a
long or short position in, and buy or sell, debt or equity securities of FCC and
BANC ONE for KBW's own account and for the accounts of its customers. KBW
previously served FCC as lead-manager for its 1992 offering of $47.75 million of
common stock, as lead-manager for its 1992 offering of $60 million of
convertible preferred stock, and as advisor for its 1995 acquisition of Central
Corporation, 1985 acquisition of City National Bancshares, Inc. and 1983
acquisition of New Orleans Bancshares, Inc. KBW previously served BANC ONE as
advisor on its 1997 announced western region branch sale to Community First
Bankshares, and served as advisor to Key Centurion Bancshares in its 1992 sale
to BANC ONE, Affiliated Bankshares of Colorado in its 1991 sale to BANC ONE, and
KNYB Bancshares, Inc. in its 1985 sale to BANC ONE.
FCC and KBW have entered into a letter agreement dated October 7, 1997
relating to the services to be provided by KBW in connection with the Merger.
FCC has agreed to pay KBW fees as follows: a cash fee of $500,000 following the
signing of the Plan and an additional cash fee of $500,000 after the mailing of
this Prospectus and Proxy Statement. In addition, FCC will pay to KBW at the
time of closing a cash fee ("Contingent Fee") equal to 0.275% of the market
value of the aggregate consideration offered in exchange for the outstanding
shares of FCC Common Stock in the Merger. Pursuant to the letter agreement, FCC
also agreed to reimburse KBW for reasonable out-of-pocket expenses and
disbursements incurred in connection with its retention and to indemnify against
certain liabilities, including liabilities under the federal securities laws.
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BANC ONE REASONS FOR THE MERGER
BANC ONE believes that the affiliation of FCC with BANC ONE will provide
BANC ONE with a meaningful expansion of BANC ONE's customer base and assets in
the State of Louisiana. Such expansion will provide BANC ONE with the
opportunity to realize increased economies of scale while serving new customers
with the expertise and assistance of the capable and experienced staff of FCC.
STRUCTURE OF THE MERGER; MANAGEMENT AFTER THE MERGER
Upon the completion of the Merger, Delta will be merged with and into FCC
and the separate corporate existence of Delta will cease. FCC, as the surviving
corporation in the Merger and a wholly owned subsidiary of BANC ONE, will
continue operations under the name "Louisiana Banc One Corporation." It is
expected that the FCC Articles and the FCC Bylaws in effect as of the Effective
Time shall, with minor exceptions, be the articles of incorporation and bylaws
of the surviving corporation.
Following completion of the Merger, it is expected that the following
persons will serve as executive officers of the surviving corporation: (i) Ian
Arnof, currently President and Chief Executive Officer of FCC, will serve as
Chairman of the surviving corporation; (ii) G. Lee Griffin, currently Chairman
and Chief Executive Officer of Bank One, Louisiana, N.A., will serve as
President and Chief Executive Officer of the surviving corporation; (iii) Ashton
J. Ryan, Jr., currently Senior Executive Vice President of FCC, will serve as
Vice Chairman of the surviving corporation; and (iv) Daryl G. Byrd, currently
commercial segment manager of FCC, will become President and Chief Executive
Officer of New Orleans operations for the surviving corporation. Except as
otherwise noted above, no determination has been made as to the persons who will
serve as directors or executive officers of the surviving corporation following
completion of the Merger.
CONVERSION OF FCC COMMON STOCK; TREATMENT OF FCC STOCK OPTIONS AND FCC
DEBENTURES
Upon completion of the Merger, the outstanding shares of FCC Common Stock
(together with any and all Rights issued pursuant to the FCC Rights Plan) will
be converted into shares of BANC ONE Common Stock at the Exchange Rate. Except
in the event that FCC or BANC ONE shall declare a stock dividend or distribution
upon or subdivide, split up, reclassify or combine their respective common stock
or declare a dividend, or make a distribution, on their respective common stock
in any security convertible into such common stock prior to the time the Merger
becomes effective, no further adjustments will be made in the Exchange Rate.
However, in the event of such a transaction, appropriate adjustment will be made
in the Exchange Rate.
Immediately upon the Effective Time, all unexercised stock options for
shares of FCC Common Stock issued to and held by such persons immediately prior
to the Effective Time shall be assumed by BANC ONE and converted into options to
purchase that number of shares of BANC ONE Common Stock equal to the number of
shares of FCC Common Stock subject to such unexercised options immediately prior
to the Effective Time multiplied by the Exchange Rate. The per share exercise
price of such options for shares of BANC ONE Common Stock shall be the exercise
price applicable to the options for shares of FCC Common Stock converted into
options for BANC ONE Common Stock divided by the Exchange Rate.
Following the Merger, each $26.67 aggregate principal balance of FCC's
12 3/4% Convertible Debentures due December 1, 2000 Series A and B (each, a "FCC
Debenture") that is surrendered for conversion shall, pursuant to the provisions
of the trust indentures dated as of September 27, 1985 (the "FCC Indentures")
between FCC and Bank of New York, as trustee, be converted into 1.408 shares of
BANC ONE Common Stock, except that no fractional shares of BANC ONE Common Stock
will be issued upon conversion of any FCC Debentures. 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
Stock or declare a dividend, or make a distribution, on BANC ONE Common Stock in
any security convertible into
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BANC ONE Common Stock after such Exchange Rate is determined. After the Merger
the number of shares of BANC ONE Common Stock into which the FCC Debentures are
convertible will be subject to antidilution provisions as provided in the FCC
Indentures. FCC Debentures not surrendered for conversion will be payable in
accordance with their original terms.
EXCHANGE OF CERTIFICATES; FRACTIONAL SHARES
Promptly after the Effective Time, instructions and forms will be furnished
to the FCC shareholders for use in exchanging their certificates representing
shares of FCC Common Stock and Rights issued pursuant to the FCC Rights Plan for
certificates for shares of BANC ONE Common Stock. If any certificate for shares
of BANC ONE Common Stock is to be issued in a name other than that in which the
certificate for shares of FCC Common Stock surrendered for exchange is
registered, the certificate so surrendered must be properly endorsed or
otherwise be in proper form for transfer and the person requesting such exchange
must pay to BANC ONE or its transfer agent any applicable transfer or other
taxes required by reason of the issuance of the certificate.
Until so surrendered, certificates formerly representing shares of FCC
Common Stock and Rights issued pursuant to the FCC Rights Plan will be deemed
for all purposes to evidence ownership of the number of shares of BANC ONE
Common Stock into which such shares have been converted. Dividends and other
distributions, if any, that become payable on BANC ONE Common Stock pending
exchange of certificates representing shares of FCC Common Stock and Rights
issued pursuant to the FCC Rights Plan will be retained by BANC ONE until
surrender of such certificates, at which time such dividends and distributions
will be paid, without interest, subject to applicable abandoned property laws.
In addition, after the Effective Time the holders of certificates formerly
representing shares of FCC Common Stock and Rights issued pursuant to the FCC
Rights Plan shall cease to have rights with respect to such shares and to any
related Rights (except such rights, if any, as holders of certificates
representing FCC Common Stock may have as dissenting shareholders), and, except
as aforesaid, their sole right shall be to exchange such certificates for shares
of BANC ONE Common Stock and any fractional share payment in accordance with the
Plan.
No fractional shares of BANC ONE Common Stock will be exchanged for shares
of FCC Common Stock. In lieu thereof, each shareholder of FCC having a
fractional interest resulting from the exchange of FCC Common Stock for BANC ONE
Common Stock will be paid by BANC ONE an amount in cash equal to the value of
such fractional interest based upon the average of the closing prices of BANC
ONE Common Stock on the NYSE during the Valuation Period (as defined below) as
reported in THE WALL STREET JOURNAL for NYSE Composite Transactions. As used
herein, "Valuation Period" means the five consecutive NYSE trading days ending
on the fifth NYSE trading day immediately prior to the Closing Date.
REPRESENTATIONS AND WARRANTIES
The Plan contains representations and warranties of BANC ONE and FCC as to,
among other things: (a) the corporate organization and existence of each party
and its subsidiaries; (b) the capitalization of each party and its subsidiaries;
(c) each party's financial statements; (d) each party's filings with the
Commission and other regulatory reports; (e) the due authorization, execution
and delivery of, and enforceability of, the Plan; (f) the corporate power and
authority of each party; (g) the compliance of the Plan with the organizational
documents of each party, applicable law and certain agreements; (h) the adequacy
of each party's reserves for loan and lease losses; (i) the absence of material
legal proceedings; (j) in the case of BANC ONE, the legality of the BANC ONE
Common Stock to be issued in connection with the Merger; (k) each party's title
to its assets and properties; (l) each party's compliance with applicable law;
(m) in the case of FCC, the absence of certain changes in its business and
capital structure since June 30, 1997; (n) each party's employee benefit plans
and related matters; (o) the filing and accuracy of each party's tax returns;
(p) each party's insurance coverage; (q) in the case of BANC ONE, the compliance
of this Prospectus and Proxy Statement with federal securities laws; (r) the
absence of
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claims under employment-related laws; (s) the absence of environmental
liabilities; (t) compliance with laws concerning accessability for individuals
with disabilities; (u) in the case of FCC, the inapplicability to the Merger of
the FCC Rights Plan; and (v) "pooling of interests" accounting treatment.
CONDUCT OF BUSINESS PENDING THE MERGER
Except as otherwise set forth in or contemplated by the Plan, each of BANC
ONE and FCC has agreed that from the date of the Plan until the Effective Time
it 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.
In addition, to the extent permitted by law, each of BANC ONE and FCC has
agreed to afford the other party, its officers and other authorized
representatives, such access to all its books, records, bank examination
reports, tax returns, leases, contracts and documents and those of its
subsidiaries and will furnish to the other party such information with respect
to its assets, earnings (in the case of BANC ONE) and business and those of its
subsidiaries as the other party may from time to time reasonably request in
connection with the Plan and the transactions contemplated thereby. FCC has also
agreed to promptly provide BANC ONE with copies of all material written
resolutions of the FCC Board or FCC shareholders, furnish BANC ONE with copies
of all monthly and other interim financial statements of FCC 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 (as defined below).
In addition, except as expressly contemplated by the Plan or permitted by
BANC ONE, FCC has agreed that from the date of the Plan until the earlier of the
Effective Time or the time that the Plan is terminated it will not, among other
things:
(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: (i) declare or pay any dividends or
make any distributions on shares of FCC Common Stock, except cash dividends
of $0.40 per share per quarter; and (ii) except as provided in the Plan,
declare or pay any dividends or make any distributions in any amount on FCC
Common Stock for the quarter in which the Effective Time shall occur and for
which quarter the holders of FCC Common Stock are entitled to receive
regular quarterly dividends on the shares of BANC ONE Common Stock into
which the shares of FCC Common Stock have been converted;
(b) issue, sell, or grant (or 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 Stock pursuant to FCC stock
option plans, (ii) the conversion of FCC Debentures and (iii) the Option;
(c) (i) enter into any new line of business or incur or agree to incur
any obligation or liability except liabilities and obligations (including
corporate debt issuances) incurred in the ordinary course of business,
except as may be directed by any regulatory agency; (ii) except as may be
directed by any regulatory agency or required by any law or regulation,
change its or its subsidiaries' lending, investment, liability management
and other material banking policies in any material respect; (iii) except in
the ordinary course of business and consistent with prior practice, grant
any general or uniform increase in the rates of pay of employees; (iv)
establish any new employee benefit plan or amend any existing plan (except
as required by law) 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 to BANC ONE, or any
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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;
(d) 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 LLP, 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;
(e) 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 the Plan and the events
contemplated by the Plan and (B) claims and/or causes of action arising from
or related to events which occurred prior to the Effective Time; or
(f) 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.
In addition, during the period from the date of the Plan until the Effective
Time, except as contemplated by the Plan, BANC ONE has agreed that it will not,
without the prior written permission of FCC:
(a) adopt or implement any amendment to its Articles of Incorporation
(the "BANC ONE Articles") or any plan of reorganization which would affect
in any manner the terms and provisions of the shares of BANC ONE Common
Stock or the rights of the holders of such shares or reclassify the BANC ONE
Common Stock;
(b) 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 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 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;
(c) 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; or
(d) 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 in the Plan shall limit the ability of BANC
ONE to exercise its rights under the Option.
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 Federal
Reserve, the Commission and the United States Department of Justice, that (i)
BANC ONE should not acquire certain assets or liabilities of FCC and its
subsidiaries and/or (ii) following the Merger BANC ONE or its subsidiaries
should not retain certain assets or liabilities of
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FCC, BANC ONE shall so notify FCC and identify those assets and/or liabilities,
if any, which BANC ONE proposes that it 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. BANC ONE initially committed to FCC that it would agree to any
such divestitures, up to an aggregate amount of $600,000,000, as may be required
by any such regulatory authority as a condition to the approval of the Merger by
such authority. BANC ONE has subsequently advised FCC that it will agree to any
such divestitures up to an aggregate amount of $620,000,000 and will consider
additional divestitures of amounts in excess of $620,000,000 if it is determined
that such greater divestitures are required by regulatory authorities as a
condition to the approval of the Merger. Divestitures of certain assets and
deposit liabilities will be required in connection with antitrust review by the
Federal Reserve and the Justice Department. See "THE MERGER--Regulatory
Approvals."
Each of FCC and BANC ONE, as the case may be, have agreed 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,
before immediately prior to the Effective Time or, with FCC Board approval,
following the Effective Time; (ii) no aspect of the divestiture shall be
inconsistent with any of the representations made to Coopers & Lybrand L.L.P. in
the request for its tax opinion as described in the Plan, 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 Stock to be received by the FCC shareholders; 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 reasonable 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.
CONDITIONS TO THE MERGER; AMENDMENT; WAIVER
Completion of the Merger is subject to satisfaction of a number of
conditions, including:
(1) the receipt of all necessary approvals of the transactions contemplated
by the Plan by governmental agencies and authorities, including the
Federal Reserve, and each of such approvals shall remain in full force
and effect at the Effective Time;
(2) there being no change in the consolidated financial condition,
aggregate net assets, shareholders' equity, business or operating
results of FCC and its subsidiaries, taken as a whole, or BANC ONE and
its subsidiaries, taken as a whole, from June 30, 1997 to the Effective
Time, that has had 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 FCC and its subsidiaries,
taken as a whole, or on the ability of BANC ONE or Delta, on the one
hand, or FCC to consummate the transactions contemplated by the Plan (a
"BANC ONE Material Adverse Effect" or a "FCC Material Adverse Effect,"
as the case may be);
(3) compliance by FCC, BANC ONE and Delta with their respective covenants
and confirmation of their respective representations and warranties as
set forth in the Plan;
(4) approval of the Plan and the Merger by the requisite affirmative vote
of the shareholders of FCC and Delta (See "--General");
(5) receipt by FCC and BANC ONE of the opinion, dated as of the Effective
Time, relative to the Federal income tax consequences of the Merger
referred to under the caption "--Certain Federal Income Tax
Consequences";
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(6) the shares of BANC ONE Common Stock to be issued in exchange for FCC
Common Stock shall have been approved for listing on the NYSE;
(7) the total number of shares of FCC Common Stock issued and outstanding
(not including treasury shares held by FCC), together with (a) the
total number of shares of FCC Common Stock related to outstanding
options and performance shares with respect to the FCC stock option
plans and (b) the total number of shares of FCC Common Stock which
would be issued immediately prior to the Effective Time assuming that
all of the FCC Debentures were then converted into FCC Common Stock
pursuant to the terms of the FCC Indentures, shall not be more than
44,460,000 shares;
(8) the holders of all credit agreements on which FCC or any of its
subsidiaries is the maker, issuer or guarantor and which contain
provisions which make the acquisition of FCC by or its merger with or
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;
(9) the opinion of KBW attached as Appendix A shall not have been withdrawn
prior to the Effective Time;
(10) the receipt by BANC ONE of an opinion from FCC's counsel to the effect
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 the Plan or the acquisition of shares of FCC Common
Stock by BANC ONE pursuant thereto, or completion of the Merger or
other transaction contemplated by the Plan 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 Stock, BANC ONE Common Stock
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; and
(11) Coopers & Lybrand L.L.P. shall have issued its written opinion, dated
as of the Closing Date, satisfactory, in good faith, to BANC ONE,
advising that the Merger may be properly accounted for as a "pooling of
interests."
It is a condition to BANC ONE's and Delta's obligations to consummate the
Merger that, 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
herein, "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 Commission 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 the Plan; (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.
It is a condition to FCC's obligation to consummate the Merger that, 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
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BANC 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 herein, "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 consoli-
dated 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 Commission 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).
Any of the provisions of the Plan, including the foregoing conditions, may
be waived at any time by the party which is, or the shareholders of which are,
entitled to the benefits thereof. The Plan may be amended or modified in whole
or in part by a duly authorized written agreement of all the parties. However,
after the FCC shareholders have approved the Plan, FCC may only amend or modify
the Plan if, in the opinion of the FCC Board, such amendment or modification
will not have any material adverse effect on the benefits intended under the
Plan for the FCC shareholders, will not violate Section 112H(2) of the Louisiana
Law and will not require resolicitation of any proxies from such shareholders.
TERMINATION
The Plan may be terminated at any time prior to the Effective Time, whether
before or after approval by the FCC shareholders, by written notice from BANC
ONE to FCC, or from FCC to BANC ONE, as the case may be, upon the occurrence of
any of the following: (i) if any material condition to either party's
obligations under the Plan is not or cannot be substantially satisfied at the
time or times contemplated thereby and such condition is not waived (each
party's right to terminate under this clause (i) relates only to conditions to
that party's obligations); (ii) in the event of a material breach by a party of
any representation, warranty, condition or agreement contained in the Plan that
is not cured within 30 days of the time that written notice of such breach is
received by such party from the other party 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 completed on or before October 19, 1998;
or (iv) if the FCC shareholders shall fail to approve the Merger and the Plan.
The Plan also may be terminated, and the Merger thereby abandoned (whether
before or after approval of the merger by the shareholder of Delta or by FCC's
shareholders), by the mutual written consent of the Boards of Directors of FCC,
BANC ONE and Delta at any time prior to the Effective Time of the Merger.
The Plan may also be terminated by FCC by majority vote of the entire FCC
Board at any time after the second business day prior to the Closing Date (the
"Determination Date"), if either: (x) both of the following conditions are
satisfied: (i) the average of the daily last sale prices of a share of BANC ONE
Common Stock (the "Average Closing Price"), as reported on the NYSE Composite
Transactions reporting system 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 shall be less than $45.15; and (ii) (A) the number obtained
by dividing the Average Closing Price by the Starting Price (as defined below)
(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 defined
below) by the Index Price (as defined below) as of the Starting Date (as defined
below) 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 $43.15. The share prices in this paragraph have
been adjusted to give effect to the 10% stock dividend on BANC ONE Common Stock
paid on February 26, 1998, and are subject to further adjustments in certain
circumstances. If FCC elects to exercise its termination rights as described in
the preceding sentence, it shall give prompt written notice to
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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 after the Determination Date. 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 $45.15 and the Exchange Rate (as then in effect) and 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 $43.15 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 (calculated as described in the preceding sentence),
whereupon no termination shall have occurred and the Plan shall remain in effect
in accordance with its terms (except as the Exchange Rate shall have been so
modified), and any references in the Plan to "Exchange Rate" shall thereafter be
deemed to refer to the Exchange Rate as adjusted, and the Closing shall be
rescheduled to the date that is the second business day following the making of
such election.
For purposes of the preceding paragraph, the term: (a) "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; (b) "Index Group"
means the group of each of the 18 bank holding companies listed in Section 26(f)
of the Plan 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
(if 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 redistributed proportionately for purposes of determining the Index
Price); (c) "Index Price" on a given date means the weighted average (weighted
in accordance with the factors specified in the definition of "Index Group") of
the closing prices on such date of the common stock of the bank holding
companies comprising the Index Group; (d) "Starting Date" means October 17,
1997, the last full day on which the NYSE was open for trading prior to the
execution of the Plan; and (e) "Starting Price" means $50.17, the last sale
price per share of BANC ONE Common Stock on the Starting Date, as reported by
the NYSE Composite Transactions reporting system.
Whether or not FCC will have a right to terminate the Plan pursuant to the
foregoing paragraphs will not be known until the date that the Average Closing
Price can be determined. If such date were the date of this Prospectus and Proxy
Statement, no such right of termination would exist, based upon the prevailing
market price of BANC ONE Common Stock. The FCC Board has made no decision as to
whether it would exercise FCC's termination right if such right did arise, and
the BANC ONE Board has made no decision as to whether it would exercise its
correlative right to increase the Exchange Rate. If such a situation occurs,
each of the FCC Board and the BANC ONE Board would, consistent with its
fiduciary duties, take into account all relevant facts and circumstances as they
exist at such time and would consult with its financial advisors and legal
counsel. The fairness opinion of KBW received by FCC is dated as of April ,
1998 and is based on conditions in effect as of such date. Accordingly, such
opinion does not address the circumstances that might arise if the matters
contemplated by the previous paragraphs were to occur. In such event, FCC
intends that it would seek the reconfirmation of KBW with respect to the
fairness of the transaction, or the revised transaction, before proceeding with
the completion of the Merger, and it is a
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condition to the Merger that the fairness opinion of KBW not have been withdrawn
prior to the Effective Time.
Approval of the Plan by the FCC shareholders at the Meeting will confer on
the FCC Board the power, should the events described above occur, to elect to
consummate the Merger without any further action by, or resolicition of the
votes of, FCC shareholders. It is the current intention of the FCC Board that it
would not resolicit the votes of FCC shareholders if an increase in the Exchange
Rate occurs.
If the Plan is terminated otherwise than by a willful breach of any party to
the Plan, FCC, BANC ONE and Delta will each pay all of its own expenses incurred
incident to such transaction, except with respect to those expenses which the
Plan expressly provides will be paid by BANC ONE. See "--Expenses."
REGULATORY APPROVALS
Completion of the Merger is subject to the prior approval of the Federal
Reserve under Section 3 and Section 4 of the Bank Holding Company Act of 1956,
as amended (the "BHCA"). The BHCA requires that the Federal Reserve take into
consideration a number of factors, including the financial and managerial
resources and future prospects of the respective institutions and the
convenience and needs of the communities to be served. The BHCA prohibits the
Federal Reserve from approving the Merger if it would result in a monopoly or be
in furtherance of any combination or conspiracy to monopolize or attempt to
monopolize the business of banking in any part of the United States, or if its
effect in any section of the country may be to substantially lessen competition
or tend to create a monopoly, or if it would in any other manner be a restraint
of trade, unless the Federal Reserve finds that the anti-competitive effects of
the Merger are clearly outweighed in the public interest by the probable effect
of the transaction in meeting the convenience and needs of the communities to be
served. The Federal Reserve has the authority to deny an application if it
concludes that the combined organization would have an inadequate capital
position. The BHCA provides for the publication of notice and public comment on
the application and authorizes the regulatory agency to permit interested
parties to intervene in the proceedings.
Under the BHCA, the Merger may not be consummated until the 15th day
following the date of Federal Reserve approval, during which time the Justice
Department may challenge the Merger on antitrust grounds. The commencement of an
antitrust action would stay the effectiveness of the Federal Reserve's approval
unless a court specifically orders otherwise.
Applications and notices with respect to the Merger were filed with the
Federal Reserve on January 21, 1998, and copies were provided concurrently
therewith to the Louisiana Commissioner for informational purposes. There can be
no assurances that any governmental agency will approve or take any other
required action with respect to the Merger and, if approvals are received or
action is taken, there can be no assurance as to the date of such approvals or
action, that such approvals or actions will not be conditioned upon such matters
that would cause the parties to abandon the Merger or that no actions will be
brought challenging such approvals or action or, if such a challenge is made,
the result thereof.
On May 4, 1998, the Justice Department announced that it will advise the
Federal Reserve that, subject to divestiture of 25 branches operated by FCC in
Calcasieu, Lincoln, Quachita and Lafayette parishes, the Antitrust Division will
not challenge the Merger. The branches to be divested have total deposits of
approximately $614 million. BANC ONE believes that such divestitures will not be
material to the financial condition or results of operations of BANC ONE after
the Effective Time.
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CERTAIN FEDERAL INCOME TAX CONSEQUENCES
The following is a summary of certain material United States Federal income
tax consequences of the Merger, including certain consequences to holders of FCC
Common Stock who are citizens or residents of the United States and who hold
their shares as capital assets. It does not discuss all tax consequences that
may be relevant to FCC shareholders subject to special Federal income tax
treatment (such as insurance companies, dealers in securities, certain
retirement plans, financial institutions, tax exempt organizations or foreign
persons) or to FCC shareholders who acquired their shares of FCC Common Stock
pursuant to the exercise of employee stock options or otherwise as compensation.
The summary does not address the state, local or foreign tax consequences of the
Merger, if any.
Pursuant to the terms of the Plan, FCC and BANC ONE have received the
opinion of Coopers & Lybrand L.L.P. to the effect that, based upon the Internal
Revenue Code of 1986, as amended (the "Internal Revenue Code"), the regulations
thereunder and rulings issued by the Internal Revenue Service in transactions
similar to those contemplated by the Plan and assuming the Merger occurs in
accordance with the Plan and conditioned on the accuracy of certain
representations made by FCC, Delta and BANC ONE, for Federal income tax
purposes:
(1) The Merger will constitute a reorganization within the meaning of
Section 368(a) of the Internal Revenue Code;
(2) No gain or loss will be recognized by FCC or BANC ONE as a consequence
of the transactions contemplated by the Plan;
(3) No gain or loss will be recognized to the FCC shareholders on the
exchange of their shares of FCC Common Stock for shares of BANC ONE
Common Stock, except as described below with respect to cash received for
fractional share interests to which they may be entitled or pursuant to
the exercise of statutory dissenters' rights;
(4) The Federal income tax basis of the BANC ONE Common Stock to be received
by holders of FCC Common Stock for their shares of FCC Common Stock will
be the same as the Federal income tax basis of the FCC Common Stock
surrendered in exchange therefor (reduced by any amount allocated to
fractional share interests for which cash is received); and
(5) The holding period of the BANC ONE Common Stock received by a holder of
FCC Common Stock will include the period during which the FCC Common
Stock exchanged therefor was held, provided the exchanged FCC Common
Stock was held as a capital asset by such holder on the date of the
exchange.
A FCC shareholder who receives cash in lieu of a fractional share interest
in BANC ONE Common Stock will be treated as having received the cash in
redemption of the fractional share interest. The receipt of cash in lieu of a
fractional share interest should generally result in capital gain or loss to the
holder equal to the difference between the amount of cash received and the
portion of the holder's Federal income tax basis in the FCC Common Stock
allocable to the fractional share interest. Such capital gain or loss will be
long-term capital gain or loss (subject to a maximum 28% tax rate) if the
holder's holding period for the BANC ONE Common Stock received, determined as
set forth above, is longer than one year. If the holder's holding period is
greater than 18 months, such holder's capital gain or loss will be subject to a
maximum tax rate of 20%.
A dissenting shareholder who receives cash in exchange for shares of FCC
Common Stock will be treated as having received the cash as a distribution in
redemption of such shareholder's FCC Common Stock and will recognize capital
gain or loss equal to the difference between the amount of cash received and the
holder's Federal income tax basis in the shares. Such capital gain or loss will
be long-term capital gain or loss (subject to a maximum 28% tax rate) if the
holder's holding period for the FCC Common Stock redeemed is longer than one
year. If the holder's holding period is greater than 18 months, such holder's
capital gain or loss will be subject to a maximum tax rate of 20%.
Each party's obligation to complete the Merger is conditioned upon receipt
of the opinion, dated as of the Effective Time, of Coopers & Lybrand L.L.P.
substantially to the effect set forth above. If the opinion is
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unable to be obtained, each of BANC ONE and FCC expects that it would assess the
reasons for the failure to obtain such opinion and the anticipated tax treatment
of the Merger in view of such failure, and make a determination at such time,
consistent with the fiduciary duties of its Board of Directors and its
obligations under applicable law, as to whether such condition should be waived.
The vote of FCC shareholders would be resolicited in the event of the failure to
obtain a tax opinion substantially to the effect set forth above, if FCC
determines to waive such condition. As of the date of this Prospectus and Proxy
Statement, neither BANC ONE nor FCC has any intention of waiving the condition.
THE INCOME TAX DISCUSSION SET FORTH ABOVE IS INCLUDED FOR GENERAL
INFORMATION ONLY AND IS BASED ON THE INTERNAL REVENUE CODE (AND AUTHORITIES
THEREUNDER) AS IN EFFECT ON THE DATE OF THIS PROSPECTUS AND PROXY STATEMENT,
WITHOUT CONSIDERATION OF THE PARTICULAR FACTS OR CIRCUMSTANCES OF ANY
SHAREHOLDER. SHAREHOLDERS ARE URGED TO CONSULT WITH THEIR OWN TAX ADVISORS WITH
RESPECT TO THE FEDERAL INCOME TAX CONSEQUENCES OF THE MERGER IN THEIR PARTICULAR
SITUATIONS, AS WELL AS CONSEQUENCES UNDER ANY APPLICABLE STATE, LOCAL OR FOREIGN
TAX LAWS.
ACCOUNTING TREATMENT
It is anticipated that the Merger will be accounted for using the "pooling
of interests" method of accounting. Under such method of accounting, holders of
FCC Common Stock will be deemed to have combined their existing voting common
stock interest with that of holders of BANC ONE Common Stock by exchanging their
shares for shares of BANC ONE Common Stock. Accordingly, the book value of the
assets, liabilities and shareholders' equity of FCC, as reported on its
consolidated balance sheet, will be carried over to the consolidated balance
sheet of BANC ONE, and no goodwill will be created. BANC ONE will be able to
include in its consolidated income the consolidated income of FCC for the entire
fiscal year in which the Merger occurs; however, certain expenses incurred to
effect the Merger must be treated by BANC ONE as current charges against income
rather than adjustments to its balance sheet. In order for the Merger to qualify
for "pooling of interests" accounting treatment, among other things,
substantially all (90% or more) of the outstanding FCC Common Stock must be
exchanged for BANC ONE Common Stock.
BANC ONE and FCC's respective obligations to consummate the Merger are
conditioned upon the receipt by BANC ONE of an opinion from BANC ONE's
independent public accountants, Coopers & Lybrand L.L.P., to the effect that the
Merger qualifies for the "pooling of interests" method of accounting. In
satisfaction of such condition, BANC ONE intends to obtain a letter, dated as of
the Closing Date, from Coopers & Lybrand L.L.P. to the effect that they concur
with the conclusions of BANC ONE's and FCC's management that no conditions exist
with respect to each company that would preclude accounting for the Merger as a
"pooling of interests".
EMPLOYEE BENEFITS AND PLANS
Under the terms of a separate benefits agreement between FCC and BANC ONE,
FCC and BANC ONE have agreed that FCC's employee benefit policies and programs
(excluding any specific cash compensation arrangements) as in effect on the date
of the benefits agreement shall remain in force prior to the date on which FCC's
benefits are replaced with BANC ONE's benefits. Such replacement of benefits is
expected to occur no later than January 1, 1999, but may occur at an earlier
date if administratively convenient or necessary, as determined by BANC ONE. In
each case, the benefit plans of FCC will be terminated or merged into a BANC ONE
successor plan as provided in the benefits agreement. Notwithstanding the
foregoing, BANC ONE has agreed to honor each of FCC's employment agreements,
change in control severance plans and Director's Special Compensation Plan in
accordance with their terms.
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STOCK EXCHANGE LISTING
BANC ONE has agreed to use its reasonable best efforts to cause the shares
of BANC ONE Common Stock to be issued in the Merger to be approved for listing
on the NYSE, subject to official notice of issuance. It is a condition to
completion of the Merger that such shares of BANC ONE Common Stock be authorized
for listing on the NYSE, subject to official notice of issuance.
EXPENSES
The Plan provides that BANC ONE will assume and pay all expenses incident to
the obtaining of the requisite regulatory consents and approvals, including (i)
all legal and other expenses and taxes incurred by BANC ONE incident to the
consummation of the Merger, (ii) all legal and other expenses incurred by BANC
ONE incident to the preparation and filing of the applications to the Federal
Reserve and the Louisiana Commissioner and other requests for regulatory
consents and approvals with the appropriate bank regulatory agencies as set
forth in or contemplated by the Plan, (iii) all legal and other expenses, if
any, incurred in connection with the registration of BANC ONE Common Stock under
federal and state securities laws (including the expenses of reproducing this
Prospectus and Proxy Statement) and (iv) expenses associated with obtaining the
tax opinion contemplated by the Plan.
The expenses to be assumed and paid by BANC ONE do not include any legal or
other expenses incurred by FCC in the negotiation of the Plan, the examination
or review of documents for its own benefit, in connection with its own corporate
proceedings or to KBW or to any other investment banker or advisor for services
rendered on its behalf. FCC shall be responsible for its legal and accounting
fees associated with this Prospectus and Proxy Statement, including the expenses
and fees to KBW with respect to any opinion expressed with respect to the
fairness of the Exchange Rate to the holders of FCC Common Stock.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Certain members of FCC's management and the FCC Board may be deemed to have
interests in the Merger that are in addition to their interests as shareholders
of FCC generally. The FCC Board was aware of these interests and considered them
in approving the Plan.
OUTSTANDING STOCK-BASED AWARDS. All of the executive officers of FCC hold
stock options which, pursuant to the Plan, at the Effective Time will
automatically be assumed by BANC ONE and converted into exercisable options (i)
to purchase a number of shares of BANC ONE Common Stock as the holder would have
been entitled to receive in the Merger if the options had been exercised
immediately before the Effective Time and (ii) having an exercise price per
share of BANC ONE Common Stock based upon the exercise price per share of FCC
Common Stock under the original option adjusted to account for the Exchange
Rate.
Pursuant to FCC's stock incentive plans, no later than the Effective Time,
(i) all outstanding options to acquire shares of FCC Common Stock will become
immediately exercisable in full, (ii) all unvested shares of restricted FCC
Common Stock will become fully vested, and (iii) all unvested performance stock
units will become fully vested. As of the Record Date, Ian Arnof, Chief
Executive Officer of FCC, Ashton J. Ryan, Senior Executive Vice President of
FCC, Joseph V. Wilson, III, Senior Executive Vice President of FCC, Michael A.
Flick, Chief Administrative Officer of FCC, and Howard C. Gaines, Chairman of
First National Bank of Commerce (collectively, the "Named Executive Officers"),
held unexercisable options to purchase 41,432, 18,748, 18,048, 9,577 and 9,577
shares of FCC Common Stock, respectively, 22,792, 9,804, 9,568, 5,434 and 5,434
shares of unvested restricted FCC Common Stock, respectively, and 11,396, 4,902,
4,784, 2,716 and 2,716 unvested performance stock units, respectively. In
addition, as of the Record Date, all executive officers of FCC as a group held
unexercisable options to purchase an aggregate of 133,859 shares of FCC Common
Stock, 72,137 unvested restricted shares and 35,493 unvested performance units,
all of which will become fully vested.
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EXISTING EMPLOYMENT AGREEMENTS. FCC is a party to employment agreements
with the Named Executive Officers and three other FCC executive officers, which
provide in effect that each of such persons will be entitled, if his or her
employment is terminated under certain circumstances within two years of
completion of the Merger, to be paid or provided certain benefits, including a
severance payment equal to three times the amount of his or her annual
compensation and health, insurance and other employee benefits. If severance
payments are required to be made pursuant to the employment agreements to each
of the executive officers (assuming a termination of service on May 31, 1998),
the amount of such severance payments with respect to Messrs. Arnof, Ryan,
Wilson, Flick and Gaines are currently estimated to be approximately $3,256,800,
$1,557,000, $1,539,000, $1,446,000 and $1,386,000, respectively, and with
respect to the other three executive officers are currently estimated to be
approximately $3,471,000, in the aggregate, together with associated gross-up
payments for taxes. It is anticipated that certain of the executive officers
will not continue in the employment of BANC ONE following completion of the
Merger and will, therefore, receive severance payments under the employment
agreements.
Other FCC executive officers are also entitled to benefits under FCC's
Change in Control Severance Plan if their employment is terminated under certain
circumstances after the Merger.
FCC SUPPLEMENTAL RETIREMENT PLAN. FCC maintains for the benefit of Messrs.
Arnof, Ryan and Wilson a supplemental retirement plan (the "SERP"). If a
beneficiary's employment is terminated under certain circumstances following the
Merger his benefit automatically increases and he is entitled to be paid within
60 days a lump sum of the actuarial equivalent of what he would have received
had he remained in the employ of FCC with the increased benefit. If lump sum
payments are required to be made pursuant to the SERP to each of such executive
officers (assuming a termination of service on May 31, 1998), the amount of such
payments with respect to Messrs. Arnof, Ryan and Wilson are currently estimated
to be approximately $2,675,123, $1,302,771 and $628,158, respectively.
DIRECTORS' PHANTOM STOCK PLAN. Under the FCC Directors' Phantom Stock Plan,
each current director has been credited, as of the Record Date, with
approximately 300 shares of phantom FCC Common Stock, which, upon the Merger,
will result in a credit to his account of approximately 422 shares of phantom
BANC ONE Common Stock rather than phantom FCC Common Stock. Upon termination of
Board service with FCC, a director will be paid the value of the accumulated
phantom shares, including shares accumulated by crediting common stock dividends
to his or her account in additional phantom shares, determined by multiplying
the number of phantom shares accumulated by the fair market value of a share of
BANC ONE Common Stock on the date of termination of service.
INDEMNIFICATION. BANC ONE has agreed to indemnify each person who is now,
or will become at any time before the Effective Time, a director, officer,
employee, fiduciary or agent of FCC or any of its subsidiaries (the "Indemnified
Parties") against any claim based in whole or in part on, or arising in whole or
in part out of, or pertaining to, the Plan or any of the transactions
contemplated thereby and to promptly pay expenses (including attorneys' fees and
expenses) in advance of the final disposition of any such claim, other than any
claims involving the fraud, bad faith and/or reckless disregard of the
Indemnified Party or related to any claim brought by BANC ONE against any
Indemnified Party.
BANC ONE has also agreed to ensure that all rights to indemnification and
defense and all limitations of liability existing in favor of the Indemnified
Parties as provided in the FCC Articles or FCC Bylaws 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 of the
Plan or as such law is amended at a time before the Effective Time, with respect
to claims or liabilities arising from facts or events existing or occurring
before the Effective Time, for a period of not less than ten 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.
Indemnified Parties who continue their relationship with FCC after the
Effective Time shall also have indemnification of prospective application (i) to
which they may be entitled under the provisions of the FCC Articles, the FCC
Bylaws or similar governing documents of FCC and its subsidiaries, as
applicable,
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as in effect from time to time after the Effective Time and provisions of
applicable law as in effect from time to time after the Effective Time and (ii)
to which they may be afforded in agreements, if any, between BANC ONE and the
Indemnified Parties. Such agreements, if any, will be executed as soon as
practicable following the Effective Time, and will 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 otherwise available.
In addition, BANC ONE has agreed to indemnify FCC and its subsidiaries, and
each of their respective directors and officers, and each controlling person of
FCC within the meaning of the Securities Act, against any claims, insofar as
they arise out of or are based upon an untrue statement or alleged untrue
statement of a material fact made in this Prospectus and Proxy Statement 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 or on behalf of FCC or any of its
subsidiaries or, with respect to any other indemnified person, by that person.
OPTION
Concurrently with and as a condition to BANC ONE's execution and delivery of
the Plan, FCC and BANC ONE entered into an Option Agreement dated as of October
20, 1997 (the "Option Agreement") pursuant to which BANC ONE was granted the
Option to purchase up to 9,689,000 shares of FCC Common Stock at a price equal
to $64.00 per share. The type and number of shares of FCC Common Stock issuable
pursuant to the Option, and the exercise price per share, are subject to
adjustment in certain circumstances. The purchase price is the closing sales
price of a share of FCC Common Stock on The Nasdaq Stock Market on October 20,
1997, the date the Merger was announced. The Option becomes exercisable
following the occurrence of both a "Purchase Event" and an "Initial Triggering
Event", as those terms are defined below. The Option might have the effect of
discouraging other persons interested in acquiring FCC from making acquisition
proposals. As of the date of this Prospectus and Proxy Statement, no Purchase
Event or Initial Triggering Event has occurred and, therefore, the Option is not
presently exercisable.
The Option expires (such event being referred to as the "Option Termination
Event") if not exercised as permitted under the Option Agreement prior to the
earlier of (i) the Effective Time, (ii) BANC ONE or FCC receiving written notice
from the Federal Reserve or its staff to the effect that the exercise of the
Option pursuant to the terms of the Option Agreement is not consistent with
Section 3 of the Bank Holding Company Act of 1956, as amended, (iii) termination
of the Plan by BANC ONE in accordance with its provisions if such termination
occurs (A) prior to the occurrence of an Initial Triggering Event (as defined
below) 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 Plan in
accordance with the provisions thereof, (iv) the first business day after the
548th calendar day following termination of the Plan by BANC ONE in accordance
with its provisions, 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 Plan
by FCC in accordance with the terms thereof or (vi) termination of the Plan by
the mutual consent of the parties. If, in the case of (iv), the Option is
otherwise exercisable but cannot be exercised 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 20th 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.
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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 shares of
FCC Common Stock subject to the Option shall be in effect, (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 Plan, BANC ONE may exercise the
Option 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 below) 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. If BANC ONE wishes to exercise the Option, written notice of
such exercise shall be given to FCC within 30 days following such Purchase Event
specifying the number of shares of FCC Common Stock BANC ONE will purchase
pursuant to such exercise and a place and date for the closing of the 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.
For purposes of the Option 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 terms of the Plan
is jeopardized: (i) any person (other than BANC ONE or any BANC ONE subsidiary
or affiliate) shall have commenced a bona fide offer to purchase shares of FCC
Common Stock such that upon consummation of said offer such person would own or
control 10% or more of the outstanding shares of FCC Common Stock or shall have
entered into an agreement with FCC, or shall have filed an application or notice
with the Federal Reserve or any other federal or state regulatory agency for
clearance or approval to (A) merge or consolidate or 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, or
any subsidiary of FCC 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 Stock (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 Stock 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 Stock in addition to those beneficially owned
as of October 20, 1997; (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 Plan 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 Exchange Act in opposition to approval of
the Plan by FCC's shareholders; or (v) FCC shall have willfully breached any
provision of the Plan which breach would entitle BANC ONE to terminate the Plan,
such breach shall not have been cured pursuant to the terms of the Plan and FCC
shall not itself be entitled to terminate the Plan by reason of a breach thereof
by BANC ONE.
For purposes of the Option 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 Stock 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 Stock.
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RESTRICTIONS ON RESALES BY AFFILIATES
The shares of BANC ONE Common Stock to be issued to holders of FCC Common
Stock in the Merger have been registered under the Securities Act. Such shares
may be traded freely and without restriction by those shareholders not deemed to
be "affiliates" of FCC as that term is defined under the Securities Act. An
affiliate of FCC, as defined by the rules promulgated pursuant to the Securities
Act, is a person who directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with, FCC. Any subsequent
transfer of such shares, however, by any person who is an affiliate of FCC at
the time the Merger is submitted for vote of the holders of FCC Common Stock
will, under existing law, require either (i) the further registration under the
Securities Act of the shares of BANC ONE Common Stock to be transferred, (ii)
compliance with Rule 145 promulgated under the Securities Act (permitting
limited sales under certain circumstances) or (iii) the availability of another
exemption from registration. The foregoing restrictions are expected to apply to
the directors, executive officers and the holders of 10% or more of the FCC
Common Stock (and to certain relatives or the spouse of any such person and any
trusts, estates, corporations or other entities in which any such person has a
10% or greater beneficial or equity interest). Stop transfer instructions will
be given by BANC ONE to the transfer agent with respect to the BANC ONE Common
Stock to be received by persons subject to the restrictions described above, and
the certificates for such stock will be appropriately legended.
Commission guidelines regarding qualifying for the "pooling of interests"
method of accounting also limit sales of shares of the acquiring and acquired
company by affiliates of either company in a business combination. Commission
guidelines indicate further that the "pooling of interests" method of accounting
will generally not be challenged on the basis of sales by affiliates of the
acquiring or acquired company if such affiliates do not dispose of any of the
shares of the corporation they own or shares of a corporation they receive in
connection with a merger during the period beginning 30 days before the merger
and ending when financial results covering at least 30 days of post-merger
operations of the combined entity have been published.
FCC has agreed in the Plan to use its reasonable best efforts to cause each
person who is an affiliate (for purposes of Rule 145 and for purposes of
qualifying the Merger for "pooling of interests" accounting treatment) of FCC to
deliver to BANC ONE a written agreement intended to ensure compliance with the
Securities Act and preserve the ability to treat the Merger as a "pooling of
interests."
BANC ONE has agreed in the Plan to use its reasonable best efforts to
prepare and cause to be published, filed or announced, as soon as reasonably
possible after the Effective Time, results covering the first 30 days of
combined post-Merger operations of BANC ONE and FCC as contemplated by and in
accordance with the terms of the Commission's Accounting Series Releases 130 and
135.
RIGHTS OF DISSENTING SHAREHOLDERS
Unless the Plan is approved by the holders of at least 80% of the FCC Common
Stock, Section 131 of the Louisiana Law ("Section 131") allows a FCC shareholder
who objects to the Merger and who complies with the provisions of that section
to dissent and, if the Merger is effected, to have paid to him in cash the fair
cash value of his shares of FCC Common Stock as of the day before the Meeting,
as determined by agreement between the shareholder and FCC or by the Civil
District Court for the Parish of Orleans if the shareholder and FCC are unable
to agree. Such fair cash value would be payable only when and if the Merger is
completed, and would be paid without interest. If the Plan is approved by the
holders of 80% or more of the FCC Common Stock, an FCC shareholder will not be
entitled to dissenters' rights.
To exercise the right of dissent, a shareholder must (i) file with FCC a
written objection to the Plan prior to or at the Meeting and (ii) also vote his
or her shares (in person or by proxy) against the Plan at the Meeting. Neither a
vote against the Plan nor a specification in a proxy to vote against the Plan
will in and of itself constitute the necessary written objection to the Plan.
Moreover, by voting in favor of, or refraining or abstaining from voting on, the
Plan, or by returning the enclosed proxy without instructing the proxy holders
to vote against the Plan, a shareholder waives his or her rights under Section
131. The right to dissent may be exercised only by the record holders of the
shares and not by persons who hold shares only beneficially. A beneficial owner
who wishes to dissent should have the record ownership of the shares
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transferred to his or her name or instruct the record holder to follow the
Section 131 procedures on his or her behalf.
If the Plan is approved by less than 80% of the total voting power of FCC,
and the Merger is completed, notice of the completion of the Merger will be
given to each FCC shareholder who both filed a written objection to and voted
against the Plan in compliance with Section 131. Within 20 days after the
mailing of such notice, the shareholder must file with FCC a written demand for
payment for his shares at their fair cash value as of the day before the date of
the Meeting and must state the amount demanded and a post office address to
which FCC may reply. He must also deposit the certificate(s) formerly
representing his shares of FCC Common Stock in escrow with a bank or trust
company located in Orleans Parish, Louisiana. The certificate(s) must be duly
endorsed and transferred to FCC upon the sole condition that they be delivered
to FCC upon payment of the fair cash value of the shares in accordance with
Section 131. With the above-mentioned demand, the shareholder must also deliver
to FCC the written acknowledgment of such bank or trust company that it holds
the certificate(s), duly endorsed as described above.
Unless the shareholder objects to and votes against the Plan, demands
payment, endorses and deposits the certificates and delivers the required
acknowledgment in accordance with the procedures and within the time periods set
forth above, the shareholder will conclusively be presumed to have acquiesced to
the Merger and will forfeit any right to seek payment pursuant to Section 131.
If FCC does not agree to the amount demanded by the shareholder, or does not
agree that payment is due, it will, within 20 days after receipt of such demand
and acknowledgment, notify such shareholder in writing of either (i) the value
it will agree to pay or (ii) its belief that no payment is due. If the
shareholder does not agree to accept the offered amount, or disagrees with FCC's
assertion that no payment is due, such shareholder must, within 60 days after
receipt of such notice, file suit against FCC in the Civil District Court for
the Parish of Orleans for a judicial determination of the fair cash value of the
shares. Any shareholder entitled to file such a suit may, within such 60-day
period, but not thereafter, intervene as a plaintiff in such suit filed against
FCC by another shareholder of FCC for a judicial determination of the fair cash
value of such other shareholder's shares. If a shareholder fails to bring or to
intervene in such a suit within the applicable 60-day period, such shareholder
will be deemed to have consented to accept FCC's statement that no payment is
due or, if FCC does not contend that no payment is due, to accept the amount
specified by FCC in its notice of disagreement.
If, upon the filing of any such suit or intervention, FCC deposits with the
court the amount, if any, which it specified in its notice of disagreement, and
if in that notice FCC offered to pay such amount to the shareholder on demand,
then the costs (not including legal fees) of the suit or intervention will be
taxed against the shareholder if the amount finally awarded to him or her,
exclusive of interest and costs, is equal to or less than the amount so
deposited; otherwise, the costs (not including legal fees) will be taxed against
FCC.
Upon filing a demand for the fair cash value of his or her shares, a
shareholder ceases to have any rights of a shareholder except the rights created
by Section 131. The shareholder's demand may be withdrawn voluntarily at any
time before FCC gives its notice of disagreement, but thereafter only with the
written consent of FCC. If the shareholder's demand is properly withdrawn, or if
the shareholder otherwise loses his or her dissenters' rights, such shareholder
will be restored to his or her rights as a shareholder as of the time of filing
of his or her demand for fair cash value.
Dissenting FCC shareholders should send any communications regarding their
rights to Michael A. Flick, Secretary, First Commerce Corporation, 201 St.
Charles Avenue, 29th Floor, New Orleans, Louisiana 70170, or P.O. Box 60279, New
Orleans, Louisiana 70160. All such communications should be signed by or on
behalf of the dissenting shareholder in the form in which his or her shares are
registered on the books of FCC.
TRANSFER AND EXCHANGE AGENTS
Harris Trust and Savings Bank, Chicago, Illinois, serves as Transfer Agent
and as Registrar for BANC ONE Common Stock. Harris Trust and Savings Bank will
act as Exchange Agent in connection with the
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Merger. First Chicago Trust Company of New York acts as Transfer Agent and
Registrar for FCC Common Stock.
COMPARISON OF SHAREHOLDER RIGHTS
Upon the conversion of their shares of FCC Common Stock into shares of BANC
ONE Common Stock pursuant to the Merger, the shareholders of FCC, a Louisiana
corporation, will become shareholders of BANC ONE, an Ohio corporation. The
following is a description of BANC ONE capital stock, including the BANC ONE
Common Stock to be issued in the Merger, and a summary of certain differences
between the rights of holders of FCC Common Stock and the rights of holders of
BANC ONE Common Stock.
DESCRIPTION OF BANC ONE STOCK
GENERAL. The authorized capital stock of BANC ONE consists of 950,000,000
shares of BANC ONE Common Stock and 35,000,000 shares of preferred stock,
without par value ("BANC ONE Preferred Stock"), divided into 10,000,000 shares
of Class A Preferred Stock ("Class A Preferred Stock"), 1,000,000 shares of
Class B Convertible Preferred Stock ("Class B Preferred Stock") and 24,000,000
shares of Class C Preferred Stock ("Class C Preferred Stock") of which the
Series C $3.50 Cumulative Convertible Preferred Stock, consisting of 5,000,000
authorized shares, has been designated ("Series C Preferred Stock"). As of
December 31, 1997, there were issued and outstanding 2,707,917 shares of Series
C Preferred Stock and there were issued 645,956,436 shares of BANC ONE Common
Stock (including 1,421,331 shares of treasury stock). On April 16, 1998, BANC
ONE redeemed all of the outstanding shares of Series C Preferred Stock at the
redemption price of $51.05 per share plus the amount of any dividends accrued
and unpaid thereon to such date.
The following summary of the terms of BANC ONE's capital stock does not
purport to be complete and is qualified in its entirety by reference to the
applicable provisions of the Ohio Law and the BANC ONE Articles.
COMMON STOCK. Holders of BANC ONE Common Stock are entitled to receive
dividends out of funds legally available therefor as and if declared by the BANC
ONE Board of Directors (the "BANC ONE Board") provided that, so long as any
shares of BANC ONE Preferred Stock are outstanding, no dividends (other than
dividends payable in BANC ONE Common Stock) or other distributions (including
redemptions and purchases) may be made with respect to the BANC ONE Common Stock
unless full cumulative dividends on the shares of BANC ONE Preferred Stock have
been paid.
Holders of shares of BANC ONE Common Stock are entitled to one vote for each
share for the election of directors and on all other matters. Holders of BANC
ONE Common Stock vote together as a class with holders of Class A Preferred
Stock and Class B Preferred Stock. Generally, holders of Class C Preferred Stock
have no voting rights.
The issued and outstanding shares of BANC ONE Common Stock are fully paid
and nonassessable. The holders of BANC ONE Common Stock are not entitled to
preemptive rights or conversion or redemption rights. The holders of BANC ONE
Common Stock do not have cumulative voting rights in the election of directors.
In the event of the voluntary or involuntary dissolution, liquidation or
winding up of BANC ONE, holders of BANC ONE Common Stock will be entitled to
receive, pro rata, after satisfaction in full of the prior rights of creditors
(including holders of BANC ONE's indebtedness) and holders of BANC ONE Preferred
Stock, all the remaining assets of BANC ONE available for distribution.
PREFERRED STOCK. The BANC ONE Board has the authority to issue shares of
Class A and Class C Preferred Stock in one or more series and to fix the
designations, number of shares, dividends, redemption rights, sinking fund
requirements, liquidation prices, conversion rights and other rights,
qualifications, limitations or restrictions thereon (except voting rights) as
the BANC ONE Board may from time to time be permitted by law to fix or change.
The terms of the Class B Preferred Stock are fixed in BANC ONE's Articles.
Currently, no shares of BANC ONE Preferred Stock are outstanding.
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SPECIAL VOTING REQUIREMENTS FOR CERTAIN TRANSACTIONS. Under the Ohio Law, a
merger or consolidation by an Ohio corporation generally requires the
affirmative vote of holders of shares representing at least two-thirds of the
shareholder voting power of the corporation, unless the corporation's articles
of incorporation provide for approval by a different proportion not less than a
majority. The BANC ONE Articles generally require only approval of holders of a
majority of the outstanding shares for such transactions.
Article Eleventh of the BANC ONE Articles incorporates, to a large extent,
the provisions of the Ohio control share acquisition statute (the "Ohio Control
Share Statute"), as set forth in Section 1701.831 of the Ohio Revised Code.
Article Eleventh sets forth procedures for obtaining shareholder consent of
"control share acquisitions" subject to the right of the BANC ONE Board to
screen out proposals that do not meet certain standards set forth in Article
Eleventh. Article Eleventh defines a "control share acquisition" as any
acquisition, directly or indirectly, of shares of BANC ONE which, when added to
all other shares of BANC ONE owned or controlled by the acquiror, would entitle
the acquiror, alone or with others, to exercise or direct the exercise of voting
power in BANC ONE in the election of directors within any of the following
ranges of voting power: (i) one-fifth or more but less than one-third; (ii)
one-third or more but less than a majority; and (iii) a majority or more. A
bank, broker, nominee, trustee or other person who acquires shares in the
ordinary course of business for the benefit of others in good faith and not for
the purpose of circumventing Article Eleventh shall be deemed to have voting
power only of shares in respect of which such person would be able to exercise
or direct the exercise of votes without further instruction from others at a
meeting of shareholders called under Article Eleventh. A control share
acquisition which meets certain criteria set forth in Article Eleventh as
determined by the BANC ONE Board must be presented to a meeting of the
shareholders of BANC ONE and approved by the affirmative vote of the holders of
both (a) a majority of the voting power represented at the meeting and (b) a
majority of that portion of such voting power excluding any "interested shares";
that is, those shares held by the acquiring person, officers of BANC ONE and
employees of BANC ONE who are also directors. Article Eleventh may be amended by
a vote of 85% of the votes entitled to be cast by all holders of voting stock.
The BANC ONE Articles also include a "fair price" provision that is designed
to provide reasonable assurances to shareholders that in the event any
shareholder or group of shareholders acquires 20% or more of BANC ONE's voting
stock (the "Acquiror") and then seeks to acquire all or part of the remaining
voting stock through a merger or other transaction which would force a change or
termination of the other shareholders' ownership interests (a "Business
Combination"), such other shareholders must receive consideration at least
equivalent to the highest price paid by the Acquiror in acquiring its 20% stock
interest, unless the Business Combination is approved either (i) by a majority
of directors who are unrelated to the Acquiror or (ii) by the affirmative vote
of 75% of all the votes entitled to be cast by all holders of voting stock and
67% of the votes entitled to be cast by all holders of voting stock held by
shareholders other than the Acquiror ("Special Shareholder Vote").
This provision operates by requiring that after an Acquiror emerges, any
Business Combination which has the effect of requiring shareholders to surrender
their shares must satisfy one of the following conditions:
(i) FAIR CONSIDERATION TO SHAREHOLDERS. The terms of the Business
Combination must provide for payment of consideration which is at least
equivalent to the highest price paid to other shareholders by the
Acquiror in acquiring its 20% stock position and must be approved by
shareholders as otherwise required by applicable law; or
(ii) UNRELATED DIRECTOR APPROVAL. The Business Combination must be
approved as fair to shareholders by a majority of the directors who
are not affiliated with the Acquiror and who were directors before the
Acquiror acquired its 20% stock position or who were nominated or
elected to succeed such directors by the other unaffiliated directors
("Unrelated Directors") and must be approved by shareholders as
otherwise required by applicable law; or
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(iii) SPECIAL SHAREHOLDER VOTE. The Business Combination must be approved
by a Special Shareholder Vote.
Article Tenth of the BANC ONE Articles, which contains this provision, may
be amended only by a vote of 85% of the votes entitled to be cast by all holders
of voting stock, unless the amendment is approved unanimously by the Unrelated
Directors, in which case only majority shareholder approval would be required.
Chapter 1704 of the Ohio Revised Code (the "Ohio Statute") is similar to the
"fair price" provision contained in the BANC ONE Articles. The Ohio Statute
prohibits an "Issuing Public Corporation" from engaging in a "Chapter 1704
Transaction" with an "Interested Shareholder" for a period of three years
following the date on which the person becomes an Interested Shareholder unless,
prior to such date, the directors of the Issuing Public Corporation approve
either the Chapter 1704 Transaction or the acquisition of shares pursuant to
which such person became an Interested Shareholder. After the initial three-year
moratorium has expired, an Issuing Public Corporation may engage in a Chapter
1704 Transaction if (i) the acquisition of shares pursuant to which the person
became an Interested Shareholder received the prior approval of the board of
directors of the Issuing Public Corporation, (ii) the Chapter 1704 Transaction
is approved by the affirmative vote of the holders of shares representing at
least two-thirds of the voting power of the Issuing Public Corporation and by
the holders of at least a majority of voting shares which are not beneficially
owned by an Interested Shareholder or an affiliate or associate of an Interested
Shareholder, or (iii) the Chapter 1704 Transaction meets certain statutory tests
designed to ensure that it be economically fair to all shareholders.
For this purpose, an "Issuing Public Corporation" is any Ohio corporation
with 50 or more shareholders that has its principal place of business, principal
executive offices or substantial assets within the State of Ohio. BANC ONE
currently is an Issuing Public Corporation. An "Interested Shareholder" is any
person who is the beneficial owner of a sufficient number of shares to allow
such person, directly or indirectly, alone or with others, including affiliates
and associates, to exercise or direct the exercise of 10% of the voting power of
the Issuing Public Corporation. A "Chapter 1704 Transaction" includes any
merger, consolidation, combination or majority share acquisition between or
involving an Issuing Public Corporation and an Interested Shareholder or an
affiliate or associate of an Interested Shareholder. A Chapter 1704 Transaction
also includes certain transfers of property, dividends and issuance or transfers
of shares, from or by an Issuing Public Corporation or a subsidiary of an
Issuing Public Corporation to, with or for the benefit of an Interested
Shareholder or an affiliate or associate of an Interested Shareholder unless
such transaction is in the ordinary course of business of the Issuing Public
Corporation on terms no more favorable to the Interested Shareholder than those
acceptable to third parties as demonstrated by contemporaneous transactions.
Finally, Chapter 1704 Transactions include certain transactions which (i)
increase the proportionate share ownership of an Interested Shareholder, (ii)
result in the adoption of a plan or proposal for the dissolution, winding up of
the affairs or liquidation of the Issuing Public Corporation if such plan is
proposed by or on behalf of the Interested Shareholder or (iii) pledge or extend
the credit or financial resources of the Issuing Public Corporation to or for
the benefit of the Interested Shareholder.
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COMPARISON OF BANC ONE COMMON STOCK AND FCC COMMON STOCK
The rights of BANC ONE shareholders are governed by the BANC ONE Articles
and Code of Regulations (the "BANC ONE Regulations") and the applicable
provisions of the Ohio Law, while the rights of FCC shareholders are governed by
the FCC Articles and FCC Bylaws and the applicable provisions of the Louisiana
Law. If the FCC shareholders approve the Plan and the Merger is subsequently
completed, holders of FCC Common Stock will become holders of BANC ONE Common
Stock. The following comparison of the rights of holders of BANC ONE Common
Stock and FCC Common Stock is based on current terms of the governing documents
of the respective companies and on the current provisions of applicable state
law.
The rights of holders of FCC Common Stock and holders of BANC ONE Common
Stock are similar in several respects: each shareholder is entitled to one vote
for each share held on all matters submitted to a vote of shareholders and
neither is entitled to cumulative voting rights in connection with the election
of directors, each shareholder is entitled to receive pro rata any assets
distributed to shareholders upon liquidation, dissolution or winding up of the
affairs of the company (after all creditors have been satisfied and requisite
preferential amounts are paid to the holders of outstanding preferred stock),
and shareholders are not entitled to preemptive rights to subscribe for or
purchase any stock or other securities in proportion to their respective
holdings upon the offering or sale by BANC ONE or FCC of such securities to
others. Although it is impracticable to note all the differences between the
Ohio Law and the Louisiana Law generally and all of the differences between the
applicable governing documents of BANC ONE and FCC, the following is intended to
be a summary of certain significant differences between the rights of holders of
BANC ONE Common Stock and the rights of holders of FCC Common Stock.
DIVIDENDS. Under the Ohio Law, dividends may be paid out of surplus,
including both earned surplus and capital surplus, in cash, property or shares
of the corporation, provided that such dividend payments are not in violation of
the rights of any other class of securities and are not made when the
corporation is insolvent or there is reasonable ground to believe that by such
payment it will be rendered insolvent. The Louisiana Law with respect to the
payment of dividends is substantially the same, except that a Louisiana
corporation is permitted to pay dividends, notwithstanding the absence of
surplus, out of its net profits for the then current year, the preceding fiscal
year or both, unless at the time, or as a result of such dividends, liabilities
exceed assets or the net assets are less than the amount payable upon
liquidation to any class of securities with a preferential right to participate
in assets in the event of liquidation. The payment of dividends by bank holding
companies also is subject to certain regulatory constraints.
DISSENTERS' RIGHTS. Under the Ohio Law, the shareholders of an Ohio
corporation that is being merged into a surviving or new corporation, and the
shareholders of an Ohio corporation that is the surviving corporation of a
merger on which such shareholders are entitled to vote, have the right to
dissent from the merger and, if certain procedural requirements are satisfied,
to receive, in lieu of the merger consideration, a payment equal to the fair
cash value of such shareholders' shares as of the day preceding the shareholder
vote. Shareholders of an Ohio corporation are also entitled to exercise
dissenters' rights in connection with the lease, sale, exchange, transfer or
other disposition of all or substantially all of the assets of such corporation
and in connection with certain amendments to such corporation's articles of
incorporation.
The Louisiana Law with respect to dissenters' rights upon a merger and upon
the sale or other disposition of all of a corporation's assets is substantially
the same, except that dissenters' rights are not available if either (i) the
shares entitled to be voted are listed on a national securities exchange or
designated as a national market system security on an inter-dealer quotation
system by the National Association of Securities Dealers (unless the articles of
incorporation of the corporation provide otherwise) and such shares are
converted by the merger solely into shares of the surviving or new corporation
or (ii) the transaction is approved by at least 80% of the total voting power
entitled to vote thereon. The
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Louisiana Law does not provide for dissenters' rights in connection with
amendments to a Louisiana corporation's articles of incorporation. See "THE
MERGER--Rights of Dissenting Shareholders."
DIRECTORS. Neither BANC ONE nor FCC has a classified board, with the result
that directors serve for one year terms and the entire board of directors is
elected annually.
To qualify for election to the BANC ONE Board, an individual must own a
substantial number of shares of BANC ONE's capital stock, and must not also
serve as a director or officer of or in any other management relationship for
any financial institution that is in competition with BANC ONE or any of its
subsidiaries. Neither the Louisiana Law nor FCC's governing documents impose any
similar requirements on FCC directors.
Directors of BANC ONE may be removed, with or without cause, by the
affirmative vote of a majority of the voting power present at a meeting of BANC
ONE shareholders. FCC directors may be removed from office, with or without
cause, by the affirmative vote of a majority of the total voting power of FCC.
Both the Louisiana Law and the FCC Bylaws provide that the FCC Board may
declare vacant the office of a director (i) if he is interdicted or adjudicated
an incompetent, (ii) an action is filed by or against him, or any entity of
which he is employed as his principal business activity, under the bankruptcy
laws of the United States, (iii) in the sole opinion of the FCC Board he becomes
incapacitated by illness or other infirmity so that he is unable to perform his
duties for a period of six months or longer, or (iv) he ceases at any time to
have the qualifications required by law, the FCC Articles or the FCC Bylaws.
Neither the Ohio Law nor BANC ONE's governing documents contain similar
provisions.
CONTROL SHARE AND FAIR PRICE PROVISIONS. The FCC Articles do not contain a
provision similar to the provision of the BANC ONE Articles relating to control
share acquisitions. However, the Louisiana Law contains a control share
acquisition statute similar to that under the Ohio Law which is substantially
replicated in the BANC ONE Articles. See "--Description of BANC ONE
Stock--Special Voting Requirements for Certain Transactions." A merger under
either the Ohio Law or the Louisiana Law pursuant to an agreement to which the
corporation being acquired is a party, such as the Merger, is not subject to the
control share acquisition provision included in the BANC ONE Articles or to the
Ohio or Louisiana control share acquisition statutes.
Like the BANC ONE Articles, the Louisiana Law contains fair price provisions
for business combinations. However, the provisions of the Louisiana Law are
triggered if any shareholder or group of shareholders acquires 10% or more of
FCC's outstanding capital stock (a "Related Person") entitled to vote on certain
business combinations, rather than 20% in the case of BANC ONE, and the
supermajority vote that may be required to approve the business combination or
amend the provisions is both (i) 80% of the total voting power of FCC voting as
a class and (ii) two-thirds of the total voting power other than voting power
held by the Related Person, rather than, in the case of BANC ONE, both (x) 75%
of the total voting power voting as a class and (y) 67% of the total voting
power other than voting power held by the Related Person. See "--Amendment of
Governing Documents."
In addition to being subject to the laws of Louisiana and Ohio,
respectively, FCC and BANC ONE, as bank holding companies, are subject to
various provisions of federal law with respect to mergers, consolidations and
certain other corporate transactions.
EVALUATION OF TENDER OFFERS AND BUSINESS COMBINATIONS. The Louisiana Law
provides that the FCC Board, when evaluating a tender offer or an offer to make
a tender offer or exchange offer or to effect a merger or consolidation, may
consider certain enumerated factors in exercising its judgment in determining
what is in the best interest of FCC and its shareholders. For this purpose, the
FCC Board may consider, among other things, not only the consideration being
offered in relation to the then current market price of FCC's outstanding
capital stock, but also the market price for FCC's outstanding capital stock
over a period of years, the estimated price that might be achieved in a
negotiated sale of FCC as a whole or in
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part or through orderly liquidation, the premiums over market price for the
securities of other corporations in similar transactions, current political,
economic and other factors bearing on securities prices and FCC's financial
condition and future prospects. The FCC Board may also evaluate the business and
financial conditions and earnings prospects of the acquiring party or parties,
and the possible effect of such conditions upon FCC and its subsidiaries and the
communities in which FCC and its subsidiaries do business, and the competence,
experience and integrity of the acquiring party or parties and its or their
management.
The Ohio Law includes a provision which permits directors, in determining
whether any matter is in the best interests of the corporation, to take into
consideration the interests of the corporation's employees, suppliers, creditors
and customers, the economy of the state and the nation, community and societal
considerations and the long-term and short-term interests of the corporation and
its shareholders, including the possibility that such interests may be best
served by the continued independence of the corporation.
AMENDMENT OF GOVERNING DOCUMENTS. The FCC Articles may be amended by the
affirmative vote of two-thirds of the voting power present or represented by
proxy at a shareholders' meeting, except that amendments to the limitation of
liability and indemnification provisions in the FCC Articles require the
affirmative vote of 80% of the voting power. The BANC ONE Articles may be
amended by the affirmative vote of the holders of a majority of the voting power
of BANC ONE, except that amendments to the "control share acquisition" and "fair
price" provisions require the affirmative vote of 85% of the total voting power.
See "COMPARATIVE RIGHTS OF SHAREHOLDERS--Description of BANC ONE Capital
Stock--Special Voting Requirements for Certain Transactions."
The FCC Bylaws may be amended or repealed or new bylaws may be adopted by
the affirmative vote of a majority of the members of the FCC Board present at a
meeting if notice of such action is contained in the notice of such meeting;
provided, however, that no notice shall be necessary for any proposed amendment
adopted by a vote of more than three-fourths of the directors then in office.
The BANC ONE Regulations may only be amended by the affirmative vote of a
majority of the voting power represented by the outstanding voting stock of BANC
ONE present in person or by proxy at an annual or special meeting called for
such purpose.
RIGHTS AGREEMENT. FCC has adopted the Rights Agreement pursuant to which
FCC has issued one preferred share purchase right (a "Right") for each
outstanding share of FCC Common Stock and has authorized the issuance of one
Right with respect to each share of FCC Common Stock that shall become
outstanding between March 11, 1996 (the "Rights Agreement Record Date") and the
earliest of the Distribution Date, the Redemption Date and the Final Expiration
Date (as such terms are hereinafter defined). Each Right entitles the registered
holder to purchase from FCC one one-hundredth of a share of Series A Junior
Participating Preferred Stock, no par value (the "FCC Preferred Shares"), of FCC
at a price of $105.00 per one one-hundredth of a Preferred Share (the "Purchase
Price"), subject to adjustment.
The Rights are not exercisable until the earlier to occur of (i) 10 days
following a public announcement that a person or group of affiliated or
associated persons (an "Acquiring Person") have acquired beneficial ownership of
10% or more of the outstanding FCC Common Stock or (ii) 10 business days (or
such later date as may be determined by action of the FCC Board prior to such
time as any person or group of affiliated persons becomes an Acquiring Person)
following the commencement of, or announcement of an intention to make, a tender
offer or exchange offer the consummation of which would result in the beneficial
ownership by a person or group of 10% or more of the outstanding FCC Common
Stock (the earlier of such dates being called the "Distribution Date"). The
Rights will expire on March 11, 2006 (the "Final Expiration Date"), unless the
Final Expiration Date is extended or unless the Rights are earlier redeemed or
exchanged by FCC, in each case, as described below.
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FCC Preferred Shares purchasable upon exercise of the Rights will not be
redeemable. Each FCC Preferred Share will be entitled to a minimum preferential
quarterly dividend payment of $1 per share but will be entitled to an aggregate
dividend of 100 times the dividend declared per share of FCC Common Stock. In
the event of liquidation, the holders of the FCC Preferred Shares will be
entitled to a minimum preferential liquidation payment of $100 per share but
will be entitled to an aggregate payment of 100 times the payment made per share
of FCC Common Stock. Each FCC Preferred Share will have 100 votes, voting
together with the FCC Common Stock. Finally, in the event of any merger,
consolidation or other transaction in which shares of FCC Common Stock are
exchanged, each FCC Preferred Share will be entitled to receive 100 times the
amount received per share of FCC Common Stock. These rights are protected by
customary antidilution provisions.
If FCC is acquired in a merger or other business combination transaction or
50% or more of its consolidated assets or earning power are sold after a person
or group has become an Acquiring Person, proper provision will be made so that
each holder of a Right will thereafter have the right to receive, upon the
exercise thereof at the then current exercise price of the Right, that number of
shares of common stock of the acquiring company which at the time of such
transaction will have a market value of two times the exercise price of the
Right. If any person or group of affiliated or associated persons becomes an
Acquiring Person, proper provision shall be made so that each holder of a Right,
other than Rights beneficially owned by the Acquiring Person (which will
thereafter be void), will thereafter have the right to receive upon exercise
that number of shares of FCC Common Stock having a market value of two times the
exercise price of the Right.
At any time after any person or group becomes an Acquiring Person and prior
to the acquisition by such person or group of 50% or more of the outstanding FCC
Common Stock, the FCC Board may exchange the Rights (other than Rights owned by
such person or group which will have become void), in whole or in part, at an
exchange ratio of one share of FCC Common Stock, or one one-hundredth of an FCC
Preferred Share (or of a share of a class or series of FCC's preferred stock
having equivalent rights, preferences and privileges), per Right (subject to
adjustment). At any time prior to such time as any person becomes an Acquiring
Person, the FCC Board may redeem the Rights in whole, but not in part, at a
price of $.01 per Right (the "Redemption Price"). The redemption of the Rights
may be made effective at such time on such basis with such conditions as the FCC
Board in its sole discretion may establish. Immediately upon any redemption of
the Rights, the right to exercise the Rights will terminate and the only right
of the holders of Rights will be to receive the Redemption Price.
The terms of the Rights may be amended by the FCC Board without the consent
of the holders of the Rights, except that from and after such time as any person
or group of affiliated or associated persons becomes an Acquiring Person no such
amendment may adversely affect the interests of the holders of the Rights. Until
a Right is exercised, the holder thereof, as such, will have no rights as a
shareholder of FCC, including, without limitation, the right to vote or to
receive dividends.
When both the Option and the Merger were approved by the FCC Board, the FCC
Board also took action so that BANC ONE is not considered an Acquiring Person
under the Rights Agreement.
BANC ONE has not implemented the same or any similar arrangement, but could
do so without further action of its shareholders.
LIABILITY OF OFFICERS AND DIRECTORS. Under both the Ohio Law and the
Louisiana Law, shareholders are entitled to bring suit, generally in an action
on behalf of the corporation, to recover damages caused by breaches of the duty
of care and the duty of loyalty owed to a corporation and its shareholders by
directors and, to a certain extent, officers. The Ohio Law has codified the
traditional business judgment rule. The Ohio Law provides that the business
judgment presumption of good faith may only be overcome by clear and convincing
evidence, rather than the preponderance of the evidence standard applicable in
most states.
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The Louisiana Law permits corporations to include provisions in their
articles of incorporation that limit personal liability for monetary damages
resulting from breaches of the duty of care, subject to certain exceptions, and
both the Ohio Law and the Louisiana Law permit corporations to indemnify
officers and directors in certain circumstances for their expenses and
liabilities incurred in connection with defending pending or threatened suits,
as more fully described below.
LIMITATION OF LIABILITY. The FCC Articles include a provision that
eliminates the liability of directors and officers to FCC and its shareholders
for monetary damages resulting from breaches of fiduciary duty as a director or
officer, provided that such provision shall not limit the liability of a
director or officer for (i) any breach of the duty of loyalty to FCC or its
shareholders; (ii) acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law; (iii) liability for
unlawful distributions of FCC's assets to, or redemption or repurchase of FCC's
shares from FCC shareholders, under and to the extent provided in La. R.S.
12:92D; or (d) any transaction from which he derived an improper personal
benefit. The provision may be amended or repealed only upon the affirmative vote
of at least 80% of the total voting power and no amendment or repeal of this
provision will adversely affect the elimination or limitation of liability of a
director or officer with respect to any action or inaction occurring prior to
the time of such amendment or repeal. The FCC Articles also authorize the FCC
Board to enter into contracts with directors and officers providing for this
limitation of liability. See "--Indemnification and Insurance." Neither the Ohio
Law nor BANC ONE's governing documents contain such provisions.
INDEMNIFICATION AND INSURANCE. Under the Ohio Law and the Louisiana Law,
corporations are permitted, and in some circumstances required, to indemnify,
among others, current and prior officers, directors, employees or agents of the
corporation for expenses and liabilities incurred by such parties in connection
with defending pending or threatened suits instituted against them in their
corporate capacities, provided certain specified standards of conduct are
determined to have been met. Both the Ohio Law and the Louisiana Law further
permit corporations to grant indemnification rights more expansive than those
permitted by statute and to purchase insurance for indemnifiable parties against
any liability asserted against or incurred by such parties in their corporate
capacities. In addition, both the Ohio Law and the Louisiana Law contain express
authorization for corporations to establish trust funds, insurance subsidiaries
or other forms of self-insurance for the benefit of its officers, directors,
employees and agents.
The FCC Articles confirm the authority of the FCC Board to (i) adopt bylaws
or resolutions, or cause FCC to enter into contracts, providing for
indemnification of directors, officers and other persons, and (ii) cause the
corporation to exercise its powers to procure directors' and officers' liability
insurance. These provisions may be amended or repealed only by the affirmative
vote of 80% of the total voting power of FCC.
The FCC Bylaws expressly provide for indemnification of directors and
officers to the fullest extent permitted by law against any costs incurred in
connection with any threatened, pending or completed claim, action, suit or
proceeding because of his or her service as a director or officer of FCC.
The BANC ONE Regulations provide that BANC ONE may indemnify directors,
officers, employees and agents to the fullest extent permitted by law against
costs incurred in connection with any threatened, pending or completed claim,
action, suit or proceeding because of such person's service as a director,
officer, employee or agent of BANC ONE.
Each of BANC ONE and FCC has entered into indemnification contracts with its
directors and certain of its officers that, among other things, provide the
contracting director or officer with certain procedural and substantive rights
to indemnification. Such indemnification rights apply to acts or omissions of
such persons, whether such acts or omissions occurred before or after the
effective date of the contract. See "MERGER--Interests of Certain Persons in the
Merger."
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INFORMATION ABOUT BANC ONE CORPORATION
GENERAL
BANC ONE is a multi-bank holding company that, at December 31, 1997,
operated banking offices in Arizona, Colorado, Illinois, Indiana, Kentucky,
Louisiana, Ohio, Oklahoma, Texas, Utah, West Virginia and Wisconsin. BANC ONE
also owns nonbank subsidiaries that engage in credit card and merchant
processing, consumer and education finance, mortgage banking, insurance, venture
capital, investment and merchant banking, trust, brokerage, investment
management, equipment leasing and data processing. At December 31, 1997, BANC
ONE had consolidated total assets of $115.9 billion, consolidated total deposits
of $77.4 billion and consolidated total stockholders' equity of $10.4 billion.
At December 31, 1997, no single affiliate bank accounted for more than 20% of
BANC ONE's consolidated total assets.
Since its formation in 1968, BANC ONE has acquired over 100 banking
institutions. BANC ONE continues to explore opportunities to acquire banks and
nonbank companies permitted by the Bank Holding Company Act of 1956, as amended
(the "BHCA"). Discussions are continually being carried on relating to such
acquisitions. It is not presently known whether, or on what terms, such
discussions will result in further acquisitions. It is the policy of BANC ONE
not to comment on such discussions or possible acquisitions until a definitive
agreement with respect thereto has been reached.
BANC ONE is a legal entity separate and distinct from its affiliate banks
and its nonbanking subsidiaries (collectively, the "affiliates"). Accordingly,
the right of BANC ONE, and thus the right of BANC ONE's creditors and
shareholders, to participate in any distribution of the assets or earnings of
any affiliate is necessarily subject to the prior claims of creditors of the
affiliate except to the extent that claims of BANC ONE in its capacity as a
creditor may be recognized. The principal sources of BANC ONE's revenues are
dividends and fees from its affiliates. See "--Certain Regulatory
Matters--Dividend Restrictions" for a discussion of the restrictions on the
affiliate banks' ability to pay dividends to BANC ONE.
BANC ONE is incorporated in Ohio and has functioned as a multi-bank holding
company since 1968. Its executive offices are located at 100 East Broad Street,
Columbus, Ohio 43271, and its telephone number is (614) 248-5944.
MARKET PRICES OF AND CASH DIVIDENDS DECLARED ON BANC ONE COMMON STOCK
BANC ONE Common Stock is, and the shares offered hereby will be, listed on
the NYSE and traded under the symbol "ONE." The following table sets forth, for
the periods indicated, the high and low reported closing sale prices per share
of BANC ONE Common Stock on the NYSE Composite Transactions reporting system and
cash dividends declared per share of BANC ONE Common Stock. The cash dividend
and stock price information has been adjusted to reflect all stock dividends and
stock splits on
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BANC ONE Common Stock, including the 10% stock dividends on BANC ONE Common
Stock paid on February 26, 1998 and March 6, 1996.
<TABLE>
<CAPTION>
PRICE RANGE OF
COMMON STOCK
-------------------- DIVIDENDS
HIGH LOW DECLARED
--------- --------- -----------
<S> <C> <C> <C>
1996
- ---------------------------------------------------------------
First Quarter................................................ $ 35.00 $ 29.04 $ .31
Second Quarter............................................... 34.32 29.89 .31
Third Quarter................................................ 37.62 28.41 .31
Fourth Quarter............................................... 43.53 36.71 .31
1997
- ---------------------------------------------------------------
First Quarter................................................ $ 44.77 $ 35.80 $ .345
Second Quarter............................................... 45.57 35.57 .345
Third Quarter................................................ 52.10 43.24 .345
Fourth Quarter............................................... 54.37 43.01 .345
1998
- ---------------------------------------------------------------
First Quarter................................................ $ 63.94 $ 44.66 $ .38
Second Quarter (through May 12, 1998)........................ 65.63 55.13 .38
</TABLE>
The timing and amount of future dividends will depend upon earnings, cash
requirements, the financial condition of BANC ONE and its subsidiaries,
applicable government regulations and other factors deemed relevant by the BANC
ONE Board. As described under "--Certain Regulatory Matters-- Dividend
Restrictions," various state and federal laws limit the ability of affiliate
banks to pay dividends to BANC ONE.
The BANC ONE/First Chicago NBD Agreement provides that, during the period
from April 10, 1998 to the effective time of the BANC ONE/First Chicago NBD
Merger, BANC ONE will not make, declare or pay any dividend, or make any other
distribution on any shares of BANC ONE Common Stock, except for regular
quarterly cash dividends at a rate not in excess of $0.38 per share.
CERTAIN REGULATORY MATTERS
The following discussion sets forth certain of the material elements of the
regulatory framework applicable to bank holding companies and their subsidiaries
and provides certain specific information relevant to BANC ONE. This regulatory
framework is intended primarily for the protection of depositors and the federal
deposit insurance funds and not for the protection of security holders. To the
extent that the following information describes statutory and regulatory
provisions, it is qualified in its entirety by reference to those provisions. A
change in the statutes, regulations or regulatory policies applicable to BANC
ONE or its subsidiaries may have a material effect on the business of BANC ONE.
GENERAL. As a bank holding company, BANC ONE is subject to regulation under
the BHCA, and to inspection, examination and supervision by the Federal Reserve.
Under the BHCA, bank holding companies generally may not acquire the ownership
or control of more than 5% of the voting shares or substantially all the assets
of any company, including a bank, without the Federal Reserve's prior approval.
In addition, bank holding companies generally may engage, directly or
indirectly, only in banking and such other activities as are determined by the
Federal Reserve to be closely related to banking.
Various governmental requirements, including Sections 23A and 23B of the
Federal Reserve Act, limit borrowings by BANC ONE and its nonbank subsidiaries
from BANC ONE's affiliate banks, and also limit various other transactions
between BANC ONE and its nonbank subsidiaries, on the one hand, and BANC
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ONE's affiliate banks, on the other. For example, Section 23A limits to no more
than 10% of its total capital the aggregate outstanding amount of any bank's
loans and other "covered transactions" with any particular nonbank affiliate,
and limits to no more than 20% of its total capital the aggregate outstanding
amount of any bank's covered transactions with all of its nonbank affiliates.
Section 23A also generally requires that a bank's loans to its nonbank
affiliates be secured, and Section 23B generally requires that a bank's
transactions with its nonbank affiliates be on arms' length terms.
Most of BANC ONE's affiliate banks are national banking associations and, as
such, are subject to regulation primarily by the Office of the Comptroller of
the Currency ("OCC") and, secondarily, by the Federal Deposit Insurance
Corporation ("FDIC") and the Federal Reserve. BANC ONE's state-chartered banks
also are subject to regulation by the FDIC and the Federal Reserve and, in
addition, by their respective state banking departments. BANC ONE and its
subsidiaries also are affected by the fiscal and monetary policies of the
federal government and the Federal Reserve, and by various other governmental
requirements and regulations.
LIABILITY FOR BANK SUBSIDIARIES. The Federal Reserve has a policy to the
effect that a bank holding company is expected to act as a source of financial
and managerial strength to each of its subsidiary banks and to maintain
resources adequate to support each such subsidiary bank. This support may be
required at times when BANC ONE may not have the resources to provide it. In
addition, Section 55 of the National Bank Act permits the OCC to order the pro
rata assessment of shareholders of a national bank whose capital has become
impaired. If a shareholder fails within three months to pay such an assessment,
the OCC can order the sale of the shareholder's stock to cover the deficiency.
In the event of a bank holding company's bankruptcy, any commitment by the bank
holding company to a federal bank regulatory agency to maintain the capital of a
subsidiary bank would be assumed by the bankruptcy trustee and entitled to
priority of payment.
Any depository institution insured by the FDIC can be held liable for any
loss incurred, or reasonably expected to be incurred, by the FDIC in connection
with (i) the default of a commonly controlled FDIC-insured depository
institution or (ii) any assistance provided by the FDIC to a commonly controlled
FDIC-insured depository institution in danger of default. "Default" is defined
generally as the appointment of a conservator or receiver and "in danger of
default" is defined generally as the existence of certain conditions indicating
that a "default" is likely to occur in the absence of regulatory assistance.
Also, if such a default occurred with respect to a bank, any loans to the bank
from its parent holding company would be subordinate in right of payment to
payment of the bank's depositors and certain of its other obligations.
CAPITAL REQUIREMENTS. BANC ONE is subject to capital requirements and
guidelines imposed by the Federal Reserve, which are substantially similar to
the capital requirements and guidelines imposed by the Federal Reserve, the OCC
and the FDIC on the depository institutions within their respective
jurisdictions. These capital requirements establish higher capital standards for
depository institutions and bank holding companies that assume greater credit
risks. For this purpose, a depository institution's or holding company's assets
and certain specified off-balance sheet commitments are assigned to four risk
categories, each weighted differently based on the level of credit risk that is
ascribed to such assets or commitments. A depository institutions's or holding
company's capital, in turn, is divided into two tiers: core ("Tier 1") capital,
which includes common equity, non-cumulative perpetual preferred stock and
related surplus (excluding auction rate issues), and minority interests in
equity accounts of consolidated subsidiaries, less goodwill, certain
identifiable intangible assets and certain other assets; and supplementary
("Tier 2") capital, which includes, among other items, perpetual preferred stock
not meeting the Tier 1 definition, mandatory convertible securities,
subordinated debt and allowances for loan and lease losses, subject to certain
limitations, less certain required deductions.
BANC ONE, like other bank holding companies, currently is required to
maintain Tier 1 and total capital (the sum of Tier 1 and Tier 2 capital) equal
to at least 4% and 8% of its total risk-weighted assets, respectively. At
December 31, 1997, BANC ONE met both requirements, with Tier 1 and total capital
equal to 8.50% and 13.11% of its total risk-weighted assets, respectively.
57
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The Federal Reserve also requires bank holding companies to maintain a
minimum "leverage ratio" (Tier 1 capital to adjusted total assets) of 3%, if the
holding company has the highest regulatory rating and meets certain other
requirements, or of 3% plus an additional cushion of at least 100 to 200 basis
points if the holding company does not meet these requirements. At December 31,
1997, BANC ONE's leverage ratio was 7.91%.
The Federal Reserve may set capital requirements higher than the minimums
noted above for holding companies whose circumstances warrant it. For example,
holding companies experiencing or anticipating significant growth may be
expected to maintain capital ratios including tangible capital positions well
above the minimum levels.
The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), among other things, identifies five capital categories for insured
depository institutions (well capitalized, adequately capitalized,
undercapitalized, significantly undercapitalized and critically
undercapitalized) and requires the respective Federal regulatory agencies to
implement systems for "prompt corrective action" for insured depository
institutions that do not meet minimum capital requirements within such
categories. FDICIA imposes progressively more restrictive constraints on
operations, management and capital distributions, depending on the category in
which an institution is classified. Failure to meet the capital guidelines could
also subject a depository institution to capital raising requirements. An
"undercapitalized" depository institution must develop a capital restoration
plan and its parent holding company must guarantee that bank's compliance with
the plan. The liability of the parent holding company under any such guarantee
is limited to the lesser of 5% of the depository institution's assets at the
time it became "undercapitalized" or the amount needed to comply with the plan.
Furthermore, in the event of the bankruptcy of the parent holding company, such
guarantee would take priority over the parent's general unsecured creditors. In
addition, FDICIA requires the various regulatory agencies to prescribe certain
non-capital standards for safety and soundness relating generally to operations
and management, asset quality and executive compensation and permits regulatory
action against a financial institution that does not meet such standards.
The Federal Reserve, the FDIC and the OCC have adopted rules to incorporate
market and interest rate risk components into their risk-based capital
standards.
DIVIDEND RESTRICTIONS. Various federal and state statutory provisions limit
the amount of dividends BANC ONE's affiliate banks can pay to BANC ONE without
regulatory approval. The approval of the appropriate bank regulator is required
for any dividend by a national bank or by a state-chartered bank that is a
member of the Federal Reserve System (a "state member bank") if the total of all
dividends declared by the bank in any calendar year would exceed the total of
its net profits, as defined by regulatory agencies, for such year combined with
its retained net profits for the preceding two years. In addition, a national
bank or a state member bank may not pay a dividend in an amount greater than its
net profits then on hand. At December 31, 1997, $0.6 billion of the total
stockholders' equity of the affiliate banks was available for payment of
dividends to BANC ONE without approval by the applicable regulatory authority.
In addition, federal bank regulatory authorities have authority to prohibit
BANC ONE's affiliate banks from engaging in an unsafe or unsound practice in
conducting their business. The payment of dividends, depending upon the
financial condition of the bank in question, could be deemed to constitute such
an unsafe or unsound practice. The ability of BANC ONE's affiliate banks to pay
dividends in the future is presently, and could be further, influenced by bank
regulatory policies and capital guidelines.
DEPOSIT INSURANCE ASSESSMENTS. The deposits of each of BANC ONE's affiliate
banks are insured up to regulatory limits by the FDIC and, accordingly, are
subject to deposit insurance assessments to maintain the Bank Insurance Fund
("BIF") and Savings Association Insurance Fund ("SAIF") administered by the
FDIC. The FDIC has adopted regulations establishing a permanent risk-related
deposit insurance assessment system. Under this system, the FDIC places each
insured bank in one of nine risk categories based on (a) the bank's
capitalization and (b) supervisory evaluations provided to the FDIC by the
institution's
58
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primary federal regulator. Each insured bank's insurance assessment rate is then
determined by the risk category in which it is classified by the FDIC.
Effective January 1, 1997, the annual insurance premiums on bank deposits
insured by the BIF and SAIF vary between $0.00 per $100 of deposits for banks
classified in the highest capital and supervisory evaluation categories to $0.27
per $100 of deposits for banks classified in the lowest capital and supervisory
evaluation categories.
The Deposit Insurance Funds Act of 1996 ("DIFA") provides for assessments to
be imposed on insured depository institutions with respect to deposits insured
by the BIF and the SAIF (in addition to assessments currently imposed on
depository institutions with respect to BIF- and SAIF-insured deposits) to pay
for the cost of Financing Corporation ("FICO") funding. The FDIC established the
FICO assessment rates effective January 1, 1997 at $0.013 per $100 annually for
BIF-assessable deposits and $0.0648 per $100 annually for SAIF-assessable
deposits. The FICO assessments do not vary depending upon a depository
institution's capitalization or supervisory evaluations. BANC ONE's affiliate
banks held approximately $6.6 billion of SAIF-assessable deposits as of December
31, 1997.
DEPOSITOR PREFERENCE STATUTE. Federal legislation has been enacted
providing that deposits and certain claims for administrative expenses and
employee compensation against an insured depository institution would be
afforded a priority over other general unsecured claims against such
institution, including federal funds and letters of credit, in the "liquidation
or other resolution" of the institution by any receiver.
BROKERED DEPOSITS. Under FDIC regulations, no FDIC-insured depository
institution can accept brokered deposits unless it (a) is well capitalized, or
(b) is adequately capitalized and receives a waiver from the FDIC. In addition,
these regulations prohibit any depository institution that is not well
capitalized from (i) paying an interest rate on deposits in excess of 75 basis
points over certain prevailing market rates or (ii) offering "pass through"
deposit insurance on certain employee benefit plan accounts unless it provides
certain notice to affected depositors.
INTERSTATE BANKING. Under the Riegle-Neal Interstate Banking and Branching
Efficiency Act of 1994 ("Riegle-Neal"), subject to certain concentration limits,
(a) bank holding companies such as BANC ONE are permitted, beginning September
29, 1995, to acquire banks and bank holding companies located in any state; (b)
any bank that is a subsidiary of a bank holding company is permitted, again
beginning September 29, 1995, to receive deposits, renew time deposits, close
loans, service loans and receive loan payments as an agent for any other bank
subsidiary of that holding company; and (c) banks are permitted, beginning June
1, 1997, to acquire branch offices outside their home states by merging with
out-of-state banks, purchasing branches in other states, and establishing de
novo branch offices in other states; provided that, in the case of any such
purchase or opening of individual branches, the host state has adopted
legislation "opting in" to those provisions of Riegle-Neal; and provided that,
in the case of a merger with a bank located in another state, the host state has
not adopted legislation "opting out" of that provision of Riegle-Neal. BANC ONE
might use Riegle-Neal to acquire banks in additional states and to consolidate
its affiliate banks under a smaller number of separate charters.
MANAGEMENT AND ADDITIONAL INFORMATION
Certain information relating to the executive compensation, various benefit
plans (including stock option plans), voting securities and the principal
holders thereof, certain relationships and related transactions and other
related matters as to BANC ONE is incorporated by reference or set forth in BANC
ONE's Annual Report on Form 10-K for the year ended December 31, 1997,
incorporated herein by reference. FCC shareholders desiring copies of such
documents may contact BANC ONE at its address or telephone number indicated
under "INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE."
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INFORMATION ABOUT FIRST COMMERCE CORPORATION
GENERAL
FCC is a multi-bank holding company with six wholly owned bank subsidiaries
in Louisiana: First National Bank of Commerce in New Orleans, City National Bank
of Baton Rouge, The First National Bank of Lafayette, Central Bank of Monroe,
The First National Bank of Lake Charles and Rapides Bank & Trust Company in
Alexandria. At December 31, 1997, FCC had consolidated total assets of $9.5
billion, consolidated total deposits of $7.8 billion and consolidated total
stockholders' equity of $821.0 million.
FCC's six banks accounted for substantially all of the assets of FCC at
December 31, 1997, and substantially all of the net income for the year ended
December 31, 1997. The banks offer customary services of banks of similar size
and similar markets, including numerous types of interest-bearing and
noninterest-bearing deposit accounts, commercial and consumer loans, trust
services, correspondent banking services and safe deposit facilities.
FCC has a number of non-bank subsidiaries, none of which, individually or in
the aggregate with other non-bank subsidiaries, account for a significant amount
of assets, revenues or earnings.
MARKET PRICES OF AND CASH DIVIDENDS DECLARED ON FCC COMMON STOCK
FCC Common Stock is traded on The Nasdaq Stock Market under the symbol
"FCOM." The following table sets forth, for the periods indicated, the high and
low reported closing sale prices per share of FCC Common Stock as reported on
The Nasdaq Stock Market and cash dividends declared per share of FCC Common
Stock. FCC's ability to pay dividends in the future is subject to the Plan. See
"MERGER-- Conduct of Business Pending the Merger."
<TABLE>
<CAPTION>
PRICE RANGE OF
COMMON STOCK
-------------------- DIVIDENDS
HIGH LOW DECLARED
--------- --------- -----------
<S> <C> <C> <C>
1996
- ---------------------------------------------------------------
First Quarter................................................ $ 34.25 $ 30.25 $ .35
Second Quarter............................................... 36.00 32.25 .35
Third Quarter................................................ 36.63 33.25 .35
Fourth Quarter............................................... 39.88 34.88 .40
1997
- ---------------------------------------------------------------
First Quarter................................................ $ 46.38 $ 38.25 $ .40
Second Quarter............................................... 48.25 39.00 .40
Third Quarter................................................ 57.38 43.38 .40
Fourth Quarter............................................... 71.88 55.38 .40
1998
- ---------------------------------------------------------------
First Quarter................................................ $ 88.38 $ 61.00 $ .40
Second Quarter (through May 12, 1998)........................ 90.75 76.00 .135
</TABLE>
MANAGEMENT AND ADDITIONAL INFORMATION
Certain information relating to the executive compensation, various benefit
plans (including stock option plans), voting securities and the principal
holders thereof, certain relationships and related transactions and other
related matters as to FCC is incorporated by reference or set forth in FCC's
Annual Report on Form 10-K for the year ended December 31, 1997, incorporated
herein by reference. FCC
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shareholders desiring copies of such documents may contact FCC at its address or
telephone number indicated under "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE."
EXPERTS
The consolidated financial statements of BANC ONE and its subsidiaries,
included in the Annual Report on Form 10-K of BANC ONE for the fiscal year ended
December 31, 1997 have been audited by Coopers & Lybrand L.L.P., independent
accountants, as set forth in their report dated February 12, 1998 accompanying
such financial statements, and are incorporated herein by reference in reliance
upon the report of such firm, which report is given upon their authority as
experts in accounting and auditing.
The consolidated financial statements of FCC and its subsidiaries, included
in the Annual Report on Form 10-K of FCC for the fiscal year ended December 31,
1997 have been audited by Arthur Andersen LLP, independent public accountants,
as indicated in their report with respect thereto and have been incorporated
herein by reference in reliance upon the authority of said firm as experts in
accounting and auditing in giving said report.
Any financial statements and schedules hereinafter incorporated by reference
in the Registration Statement of which this Prospectus and Proxy Statement is a
part that have been audited and are the subject of a report by independent
accountants will be so incorporated by reference in reliance upon such reports
given upon the authority of such firms as experts in accounting and auditing to
the extent covered by consents filed with the Commission.
LEGAL MATTERS
The validity of the BANC ONE Common Stock offered hereby has been passed
upon by Steven Alan Bennett, Senior Vice President, General Counsel and
Secretary of BANC ONE. Mr. Bennett owns a number of shares of BANC ONE Common
Stock and holds options to purchase additional shares of BANC ONE Common Stock.
Certain legal matters will be passed upon for FCC by Correro Fishman Haygood
Phelps Weiss Walmsley & Casteix, L.L.P., New Orleans, Louisiana.
FUTURE SHAREHOLDER PROPOSALS
If the Merger is not completed, the only shareholder proposals eligible to
be considered for inclusion in the proxy materials for the 1998 annual meeting
of FCC will be those which have been duly submitted to the Secretary of FCC
within a reasonable time before the date proxy materials for the meeting are
sent to shareholders, and under the FCC Bylaws, not later than 10 days from the
date of giving notice of the date of the annual meeting in order to be
considered at the 1998 annual meeting.
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[LOGO]
APPENDIX A
May 12, 1998
Board of Directors
First Commerce Corporation
201 St. Charles Avenue
New Orleans, LA 70160
Members of the Board:
You have requested our opinion as investment bankers as to the fairness,
from a financial point of view, to the shareholders of First Commerce
Corporation ("First Commerce") of the exchange ratio in the proposed merger (the
"Merger") of First Commerce with Delta Acquisition Corporation ("Delta"), a
wholly owned subsidiary of BANC ONE CORPORATION ("BANC ONE"), pursuant to the
Agreement and Plan of Merger dated as of October 20, 1997 between First
Commerce, Delta and BANC ONE (the "Agreement"). Under the terms of the Merger
and as adjusted to reflect antidilution provisions, each outstanding share of
common stock of First Commerce will be exchanged for 1.408 shares of common
stock of BANC ONE (the "Exchange Ratio"). Keefe, Bruyette & Woods, Inc. ("KBW")
was informed by First Commerce, and assumed for purposes of its opinion, that
the Merger and the BANC ONE/FCN Merger (as defined herein) would be accounted
for as a pooling-of-interests under generally accepted accounting principles and
that the Merger and the BANC ONE/FCN Merger will otherwise be consummated on the
terms contemplated by the Agreement and the FCN Agreement (as defined herein),
respectively.
KBW as part of its investment banking business is continually engaged in the
valuation of banking businesses and their securities in connection with mergers
and acquisitions, negotiated underwritings, competitive biddings, secondary
distributions of listed and unlisted securities, private placements and
valuations for estate, corporate and other purposes. As specialists in the
securities of banking companies we have experience in, and knowledge of, the
valuation of banking enterprises. In the ordinary course of our business as a
broker-dealer, we may, from time to time, purchase securities from, and sell
securities to, First Commerce and BANC ONE and as a market maker in securities,
we may from time to time have a long or short position in, and buy or sell, debt
or equity securities of First Commerce and BANC ONE for our own account and for
the accounts of our customers. To the extent we have any such position as of the
date of this opinion it has been disclosed to First Commerce. We have acted as a
financial advisor to the Board of Directors of First Commerce in rendering this
fairness opinion and will receive a fee from First Commerce for our services.
In connection with this opinion, we have reviewed, among other things, the
Agreement and the related stock option agreement; the Registration Statement on
Form S-4 to be filed by BANC ONE in connection with the Merger, Annual Reports
to Stockholders of First Commerce and BANC ONE for the three years ended
December 31, 1997; certain interim reports to stockholders and Quarterly Reports
on Form 10-Q of First Commerce and BANC ONE, and certain internal financial
analyses and forecasts for First Commerce and BANC ONE prepared by management.
We also have held discussions with members
A-1
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[LOGO]
First Commerce Corporation
Board of Directors
Page 2
of the senior management of First Commerce and BANC ONE regarding the past and
current business operations, regulatory relationships, financial condition and
future prospects of their respective companies. In addition, we have compared
certain financial and stock market information for First Commerce and BANC ONE
with similar information for certain other companies the securities of which are
publicly traded, reviewed the financial terms of certain recent business
combinations in the banking industry and performed such other studies and
analyses as we considered appropriate. Further, we have reviewed the Agreement
and Plan of Reorganization, dated as of April 10, 1998 (the "FCN Agreement") by
and among BANC ONE, First Chicago NBD Corporation ("FCN") and Hornet
Reorganization Corporation ("Newco"), pursuant to which BANC ONE and FCN will
merge (the "BANC ONE/FCN Merger") with and into Newco, and the Current Report on
Form 8-K, dated as of April 10, 1998, as amended, of BANC ONE to which the FCN
Agreement is an exhibit, and certain other publicly available information and
financial data relating to FCN and the BANC ONE/FCN Merger as we have deemed
appropriate.
In conducting our review and arriving at our opinion, we have relied upon
and assumed the accuracy and completeness of all of the financial and other
information provided to us or publicly available and we have not assumed any
responsibility for independently verifying any of such information. We have
relied upon the management of First Commerce and BANC ONE as to the
reasonableness and achievability of the financial and operating forecasts and
projections (and the assumptions and bases therefor) provided to us, and we have
assumed that such forecasts and projections reflect the best currently available
estimates and judgments of Banc One and that such forecasts and projections, and
the projections and pro forma information made publicly available by BANC ONE
relating to the BANC ONE/FCN Merger, will be realized in the amounts and in the
time periods currently estimated by such management. We have also assumed that
the aggregate allowances for loan losses for First Commerce, BANC ONE and FCN
are adequate to cover such losses. In rendering our opinion, we have not made or
obtained any evaluations or appraisals of the property of First Commerce, BANC
ONE or FCN, nor have we examined any individual credit files.
We have considered such financial and other factors as we have deemed
appropriate under the circumstances, including among others the following: (i)
the historical and current financial position and results of operations of First
Commerce, BANC ONE and FCN; (ii) the assets and liabilities of First Commerce,
BANC ONE and FCN; and (iii) the nature and terms of certain other merger
transactions involving banks and bank holding companies. We have also taken into
account our assessment of general economic, market and financial conditions and
our experience in other transactions, as well as our experience in securities
valuation and our knowledge of the banking industry generally. Our opinion is
necessarily based upon conditions as they exist and can be evaluated on the date
hereof and the information made available to us through the date hereof.
Based upon and subject to the foregoing, it is our opinion that, as of the
date hereof, the Exchange Ratio pursuant to the Agreement is fair, from a
financial point of view, to the common shareholders of First Commerce.
Very truly yours,
[SIG]
KEEFE, BRUYETTE & WOODS, INC.
A-2
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF OFFICERS AND DIRECTORS.
Section 1701.13(E) of the Ohio General Corporation Law sets forth provisions
which define the extent to which a corporation may indemnify directors, officers
and employees. Those provisions have been adopted by the Registrant in Article V
of the Registrant's Code of Regulations. Article V provides for the
indemnification or the purchase of insurance for the benefit of the directors,
officers, employees and agents of the Registrant in the event such persons are
subject to legal action as a result of actions in their capacities as directors,
officers, employees or agents of the Registrant. The Registrant has entered into
indemnification agreements with its directors and executive officers that
provide for indemnification unless the indemnitee's conduct is finally adjudged
by a court to be knowingly fraudulent, deliberately dishonest or willful
misconduct. The Registrant may indemnify other officers, employees or agents
provided such persons acted in good faith and in a manner which they reasonably
believed to be in or not opposed to the best interest of the Registrant or, with
respect to criminal actions, had no reason to believe was unlawful.
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
The following exhibits are filed herewith except those indicated which have
been filed previously as shown below and which are incorporated herein by
reference.
<TABLE>
<S> <C>
2.1 Agreement and Plan of Merger dated as of October 20, 1997 between First Commerce
Corporation, Delta Acquisition Corporation and the Registrant (incorporated by
reference to Exhibit 99.2 to the Registrant's Current Report on Form 8-K dated
October 20, 1997).
2.2 Option Agreement dated as of October 20, 1997 between First Commerce Corporation and
the Registrant (incorporated by reference to Exhibit 99.3 to the Registrant's
Current Report on Form 8-K dated October 20, 1997).
2.3 Agreement and Plan of Reorganization dated as of April 10, 1998 by and among the
Registrant, First Chicago NBD Corporation and Hornet Reorganization Corporation
(incorporated by reference to Exhibit 2.1 to the Registrant's Current Report on Form
8-K dated April 10, 1998 (as amended by Form 8-K/A filed April 21, 1998)).
2.4 Stock Option Agreement dated as of April 10, 1998 by and between First Chicago NBD
Corporation, as issuer, and the Registrant, as grantee (incorporated by reference to
Exhibit 99.1 to the Registrant's Current Report on Form 8-K dated April 10, 1998 (as
amended by Form 8-K/A filed April 21, 1998)).
2.5 Stock Option Agreement dated as of April 10, 1998 by and between the Registrant, as
issuer, and, First Chicago NBD Corporation, as grantee (incorporated by reference to
Exhibit 99.2 to the Registrant's Current Report on Form 8-K dated April 10, 1998 (as
amended by
Form 8-K/A filed April 21, 1998)).
3.1 Amended Articles of Incorporation of the Registrant (incorporated by reference from
Exhibit 3.1 to the Registrant's Current Report on Form 8-K dated June 27, 1997).
3.2 Code of Regulations of the Registrant (incorporated by reference from Exhibit 3.2 of
the Registrant's Annual Report on Form 10-K for the year ended December 31, 1991).
4.1 Form of Common Stock Certificate of the Registrant (incorporated by reference from
Exhibit 4.1 to the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1989).
5 Opinion of Steven Alan Bennett, Esq., Senior Vice President, General Counsel and
Secretary for the Registrant, regarding the legality of securities being offered,
including consent.
</TABLE>
II-1
<PAGE>
<TABLE>
<S> <C>
8 Opinion of Coopers & Lybrand L.L.P. regarding the Federal income tax consequences of
the Merger.
23.1 Consent of Coopers & Lybrand L.L.P. relating to the audited financial statements of
the Registrant.
23.2 Consent of Coopers & Lybrand L.L.P. relating to their opinion regarding the Federal
income tax consequences of the Merger.
23.3 Consent of Arthur Andersen LLP relating to the audited financial statements of First
Commerce Corporation.
23.4 Consent of Arthur Andersen LLP relating to the audited financial statements of First
Chicago NBD Corporation.
23.5 Consent of Steven Alan Bennett, Esq., Senior Vice President, General Counsel and
Secretary for the Registrant (included in Exhibit 5 hereto).
23.6 Consent of Keefe, Bruyette & Woods, Inc.
24 Powers of Attorney (included elsewhere in Part II of this Registration Statement).
99.1 Form of Proxy to be used by First Commerce Corporation.
99.2 First Chicago NBD Corporation Restated Certificate of Incorporation (incorporated by
reference to Exhibit 3(A) to the First Chicago NBD Corporation Annual Report on Form
10-K for the fiscal year ended December 31, 1995 (File No. 1-7127).
99.3 First Chicago NBD Corporation By-laws (incorporated by reference to Exhibit 3(B) to
the First Chicago NBD Corporation Annual Report on Form 10-K for the fiscal year
ended December 31, 1997 (File No. 1-7127).
</TABLE>
ITEM 22. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this registration statement: (i) to include
any prospectus required by Section 10(a)(3) of the Securities Act of 1933;
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement (notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20% change in the maximum aggregate offering
price set forth in the "Calculation of Registration Fee" table in the
effective registration statement); and (iii) to include any material
information with respect to the plan of distribution not previously
disclosed in the registration statement or any material change to such
information in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
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<PAGE>
(4) That, for purposes of determining any liability under the Securities
Act of 1933, each filing of the Registrant's annual report pursuant to
Section 13(a) or 15(d) of the Securities Exchange Act of 1934 that is
incorporated by reference in this registration statement shall be deemed to
be a new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(5) That prior to any public reoffering of the securities registered
hereunder through use of a prospectus which is a part of this registration
statement, by any person or party who is deemed to be an underwriter within
the meaning of Rule 145(c), the registrant undertakes that such reoffering
prospectus will contain the information called for by the applicable
registration form with respect to reofferings by persons who may be deemed
underwriters, in addition to the information called for by the other items
of the applicable form.
(6) That every prospectus (i) that is filed pursuant to paragraph (5)
above, or (ii) that purports to meet the requirements of Section 10(a)(3) of
the Securities Act of 1933 and is used in connection with an offering of
securities subject to Rule 415, will be filed as a part of an amendment to
this registration statement and will not be used until such amendment has
become effective, and that for the purpose of determining liabilities under
the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to
be the initial bona fide offering thereof.
(7) Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and
controlling persons of the Registrant pursuant to the foregoing provisions,
or otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public
policy as expressed in the Securities Act of 1933 and is, therefore,
unenforceable. If a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or paid by a
director, officer or controlling person of the Registrant in the successful
defense of any action, suit or proceeding) is asserted by such director,
officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the
matter has been settled by controlling precedent, submit to a court of
appropriate jurisdiction the question whether such indemnification by it is
against public policy as expressed in the Act and will be governed by the
final adjudication of such issue.
(8) To respond to requests for information that is incorporated by
reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this
form, within one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt means.
This includes information contained in documents filed subsequent to the
effective date of the registration statement through the date of responding
to the request.
(9) To supply by means of a post-effective amendment all information
concerning a transaction, and the company being acquired involved therein,
that was not the subject of and included in this registration statement when
it became effective.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing this Registration Statement and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in the City of Columbus, State of Ohio, on May 12, 1998.
<TABLE>
<S> <C> <C>
BANC ONE CORPORATION
By: /s/ STEVEN ALAN BENNETT
-----------------------------------------
Steven Alan Bennett
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
</TABLE>
POWER OF ATTORNEY
We, the undersigned officers and directors of BANC ONE CORPORATION, hereby
severally constitute and appoint Steven Alan Bennett, William P. Boardman, Bobby
L. Doxey, Richard D. Lodge or Michael J. McMennamin and each of them our true
and lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution, for us and in our stead, in any and all capacities, to sign any
and all amendments (including post-effective amendments) to this Registration
Statement and all documents relating thereto, and any subsequent registration
statement filed by BANC ONE CORPORATION pursuant to Rule 462(b) of the
Securities Act of 1933, and to file the same, with all exhibits thereto, and
other documents in connection therewith, with the Securities and Exchange
Commission granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
necessary or advisable to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or their
substitute or substitutes, may lawfully do or cause to be done by virtue hereof.
WITNESS our hands and common seal on the dates set forth below.
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED:
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
/s/ JOHN B. MCCOY Chairman of the Board
- ------------------------------ (Principal Executive May 12, 1998
John B. McCoy Officer and Director)
/s/ RICHARD J. LEHMANN
- ------------------------------ President and Director May 12, 1998
Richard J. Lehmann
/s/ MICHAEL J. MCMENNAMIN Executive Vice President
- ------------------------------ (Principal Financial May 12, 1998
Michael J. McMennamin Officer)
/s/ WILLIAM C. LEITER
- ------------------------------ Controller (Principal May 12, 1998
William C. Leiter Accounting Officer)
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ -------------------------- -------------------
<C> <S> <C>
/s/ BENNETT DORRANCE
- ------------------------------ Director May 12, 1998
Bennett Dorrance
/s/ CHARLES E. EXLEY
- ------------------------------ Director May 12, 1998
Charles E. Exley
/s/ JOHN R. HALL
- ------------------------------ Director May 12, 1998
John R. Hall
/s/ LABAN P. JACKSON, JR.
- ------------------------------ Director May 12, 1998
Laban P. Jackson, Jr.
/s/ JOHN G. MCCOY
- ------------------------------ Director May 12, 1998
John G. McCoy
/s/ THEKLA R. SHACKELFORD
- ------------------------------ Director May 12, 1998
Thekla R. Shackelford
/s/ ALEX SHUMATE
- ------------------------------ Director May 12, 1998
Alex Shumate
/s/ FREDERICK P. STRATTON,
JR.
- ------------------------------ Director May 12, 1998
Frederick P. Stratton, Jr.
/s/ JOHN C. TOLLESON
- ------------------------------ Director May 12, 1998
John C. Tolleson
/s/ ROBERT D. WALTER
- ------------------------------ Director May 12, 1998
Robert D. Walter
</TABLE>
II-5
<PAGE>
EXHIBIT INDEX
<TABLE>
<S> <C>
Exhibit 5 Opinion of Steven Alan Bennett, Esq., Senior Vice President,
General Counsel and Secretary for the Registrant, regarding
the legality of securities being offered, including consent.
Exhibit 8 Opinion of Coopers & Lybrand L.L.P. regarding the Federal income
tax consequences of the Merger.
Exhibit 23.1 Consent of Coopers & Lybrand L.L.P. relating to the audited
financial statements of the Registrant.
Exhibit 23.2 Consent of Coopers & Lybrand L.L.P. relating to their opinion
regarding the Federal income tax consequences of the Merger.
Exhibit 23.3 Consent of Arthur Andersen LLP relating to the audited financial
statements of First Commerce Corporation.
Exhibit 23.4 Consent of Arthur Andersen LLP relating to the audited financial
statements of First Chicago NBD Corporation.
Exhibit 23.6 Consent of Keefe, Bruyette & Woods, Inc.
Exhibit 99.1 Form of Proxy to be used by First Commerce Corporation.
</TABLE>
<PAGE>
EXHIBIT 5
May 12, 1998
To: The Board of Directors of
BANC ONE CORPORATION
This opinion is being provided by the undersigned, as General Counsel of BANC
ONE CORPORATION ("BANC ONE"). In such capacity I, or attorneys under my
supervision, have represented BANC ONE in connection with the Registration
Statement on Form S-4 (the "Registration Statement") to be filed by BANC ONE
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended. The Registration Statement relates to the issuance of up to 62,599,680
shares of the common stock, no par value ($5 stated value) per share, of BANC
ONE (the "Shares") in connection with the proposed merger (the "Merger") of
First Commerce Corporation ("FCC") with Delta Acquisition Corporation ("Delta"),
a wholly owned subsidiary of BANC ONE, pursuant to the terms of the Agreement
and Plan of Merger dated as of October 20, 1997 among BANC ONE, FCC and Delta
(the "Merger Agreement").
In rendering the opinions set forth below, I or attorneys under my supervision
have examined originals, or copies certified or otherwise identified to my
satisfaction, of such documents, corporate records and other instruments as I
have deemed necessary or appropriate for the purposes of this opinion, including
without limitation the Merger Agreement.
Based upon and subject to the foregoing and after examination of such matters of
law as I have deemed applicable or relevant to this opinion, I am of the opinion
that, upon effectiveness of the Registration Statement and the satisfaction of
certain conditions provided for in the Merger Agreement, the Shares, when issued
and delivered pursuant to the provisions of the Merger Agreement and upon
consummation of the Merger, will be validly issued, fully paid and
non-assessable.
<PAGE>
The Board of Directors of
BANC ONE CORPORATION
May 12, 1998
Page 2
The opinions expressed herein are limited to the laws of the State of Ohio and
the federal laws of the United States of America. I hereby consent to (i) the
use and filing of this opinion as an exhibit to the Registration Statement and
to the reference to this opinion under the heading "Legal Matters" in any
prospectus filed in connection with the Registration Statement and (ii) the
incorporation by reference of this opinion into a subsequent registration
statement filed by BANC ONE pursuant to Rule 462(b) under the Securities Act
relating to the offering covered by the Registration Statement. In giving such
consent, I do not thereby admit that I come within the category of persons whose
consent is required under Section 7 of the Securities Act of 1933 or the General
Rules and Regulations thereunder.
Very truly yours,
/s/ Steven Alan Bennett
Steven Alan Bennett
Senior Vice President, General Counsel
and Secretary
<PAGE>
May 11, 1998
BANC ONE CORPORATION
100 East Broad Street
Columbus, 01143271-0252
Re: Agreement and Plan of Merger, dated October 20, 1997, between First
Commerce Corporation, Delta Acquisition Corporation, and Banc One
Corporation
Dear Ladies and Gentlemen:
We have acted as tax advisors to BANC ONE CORPORATION, an Ohio corporation
(hereinafter the "Parent"), in connection with the proposed merger ("Merger") of
Delta Acquisition Corporation, an Ohio corporation ("Sub"), with and into First
Commerce Corporation, a Louisiana corporation ("Target"), pursuant to the terms
of the Agreement and Plan of Merger, dated October 20, 1997 ("Merger
Agreement"), by and among Parent, Sub, and Target. As a result of such role, you
requested we render an opinion as to the Federal income tax consequences for
Target shareholders, Target, and Parent. Such is provided herein.
In connection with this opinion, we have examined and are familiar with
originals or copies, certified or otherwise identified to our satisfaction, of
(i) the Merger Agreement, and (ii) any other documents we deemed necessary or
appropriate to enable us to render the opinion below. In our examination, we
have assumed the authenticity of all signatures, the legal capacity of all
natural persons, the authenticity of all documents submitted to us as originals,
the conformity to original documents of all documents submitted to us as
certified, conformed or photostatic copies, and the authenticity of the
originals of such copies. In rendering the opinion set forth below, we have
relied upon certain written representations and covenants of Parent, Sub, and
Target, which are annexed hereto.
Our opinion is based on the relevant provisions of the Internal Revenue Code of
1986, as amended (the "Code"), the regulations thereunder, and the judicial and
administrative interpretations thereof. There are no assurances that the
conclusions reached herein will be accepted by the Internal Revenue Service or
judicial authorities if challenged. Any legislative, regulatory, administrative,
or judicial decisions subsequent to the date of this opinion may have an impact
on the validity of our conclusions. Unless you specifically request otherwise,
we will not update our opinion for changes to the law, regulations, or the
judicial and administrative interpretations thereof.
<PAGE>
Based upon and subject to the foregoing, we are of the opinion that the Merger
will, under current law, constitute a tax-free reorganization under Section
368(a) of the Code, and Parent and Target will each be a party to the
reorganization within the meaning of Section 368(b) of the Code. As a tax-free
reorganization, the Merger will have the following Federal income tax
consequences for Target shareholders, Target and Parent:
1. No gain or loss will be recognized by holders of common stock, par value
of $5.00 per share, of Target ("Target Common Stock") as a result of the
exchange of such shares for shares of Parent common stock ("Parent Common
Stock"), without par value, pursuant to the Merger, except that gain or
loss will be recognized on the receipt of cash, if any, received in lieu of
fractional shares or by dissenting shareholders in perfection of their
dissenting rights. The payment of cash to Target shareholders in lieu of
fractional share interests or to dissenting shareholders in perfection of
their dissenting rights of Parent Common Stock will be treated for
federal income tax purposes as if the fractional shares were distributed as
part of the exchange and then were redeemed by Parent. These cash payments
will be treated as distributions in full payment in exchange for the stock
redeemed as provided by Section 302(a) of the Code.
2. The tax basis of the shares of Parent Common Stock received by each
shareholder of Target will equal the tax basis of such shareholder's shares
of Target Common Stock (reduced by any amount allocable to fractional share
interests for which cash is received) exchanged in the Merger.
3. The holding period for the shares of Parent Common Stock received by
each shareholder of Target will include the holding period for the shares
of Target Common Stock of such shareholder exchanged in the Merger provided
that Target Common Stock was held as a capital asset on the date of
exchange.
4. Parent will not recognize gain or loss as a result of the Merger.
5. Target will not recognize gain or loss as a result of the Merger.
Except as set forth above, we express no opinion as to the tax consequences to
any party, whether Federal, state, local, or foreign, of the Merger, or of any
transactions related to or contemplated by the Merger. This opinion is being
furnished only to you in connection with the Merger and solely for your benefit
in connection therewith including the use of such opinion within the related
Form S-4 Registration Statement. It may not be used or relied upon for any other
purpose, and it may not be circulated, quoted or otherwise referred to for any
other purpose without our express written consent.
Very Truly Yours,
/s/ Coopers & Lybrand L.L.P.
Coopers & Lybrand L.L.P.
2
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in the Registration Statement
on Form S-4 of BANC ONE CORPORATION of our report dated February 12, 1998 on our
audits of the consolidated financial statements of BANC ONE CORPORATION as of
December 31, 1997 and 1996, and for each of the three years in the period ended
December 31, 1997, included in BANC ONE CORPORATION's Annual Report on Form 10-K
for the year ended December 31, 1997.
We also consent to the reference to our firm under the caption "Experts".
COOPERS & LYBRAND L.L.P.
Columbus, Ohio
May 12, 1998
<PAGE>
CONSENT OF TAX ADVISORS
We consent to the inclusion in the Registration Statement on Form S-4 of
BANC ONE CORPORATION of our tax opinion dated May 11, 1998 regarding the
Agreement and Plan of Merger, dated October 20, 1997 between First Commerce
Corporation, Delta Acquisition Corporation, and Banc One Corporation and to all
references to us included in such Registration Statement.
COOPERS & LYBRAND L.L.P.
Columbus, Ohio
May 11, 1998
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation
by reference in this registration statement of our report dated January 13, 1998
included in First Commerce Corporation's Form 10-K for the year ended December
31, 1997 and to all references to our Firm included in this registration
statement.
ARTHUR ANDERSEN LLP
New Orleans, Louisiana
May 11, 1998
<PAGE>
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement of our report dated
January 15, 1998 on the consolidated financial statements of First Chicago
NBD Corporation included in this Registration Statement on Form S-4 dated
May 11, 1998, and to all references to our Firm included in this registration
statement.
ARTHUR ANDERSEN LLP
Chicago, Illinois
May 11, 1998
<PAGE>
May 12, 1998
CONSENT OF KEEFE, BRUYETTE & WOODS, INC.
We hereby consent to the use of our opinion letter to the Board of
Directors of First Commerce Corporation, included as Appendix A to the
Prospectus and Proxy Statement which forms part of the Registration Statement
on Form S-4 relating to the proposed merger of First Commerce Corporation and
Banc One Corporation and to the references to such opinion therein.
In giving such consent, we do not admit that we come within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules and regulations of the Securities and Exchange
Commission thereunder, nor do we hereby admit that we are experts within the
meaning of the term "experts" as used in the Securities Act of 1933, as amended,
or the rules and regulations of the Securities and Exchange Commission
thereunder.
KEEFE, BRUYETTE & WOODS, INC.
by: /s/ John G. Duffy
------------------------------------------
Name: John G. Duffy
Title: Executive Vice President
<PAGE>
[front of proxy card]
FIRST COMMERCE CORPORATION
PROXY SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
FOR THE SPECIAL MEETING OF SHAREHOLDERS ON JUNE 12, 1998
The undersigned hereby appoints Thomas L. Callicutt, Jr. and Holly E. Hobson or
either of them, proxies for the undersigned, with full power of substitution, to
vote all shares of Common Stock of First Commerce Corporation that the
undersigned is entitled to vote at the special meeting of shareholders to be
held June 12, 1998, and any adjournments thereof.
1. A proposal to approve an Agreement and Plan of Merger between FCC, BANC ONE
CORPORATION ("BANC ONE") and Delta Acquisition Corporation, a wholly owned
subsidiary of BANC ONE ("Delta"), pursuant to which FCC will merge with
Delta and each outstanding share of FCC common stock (together with any and
all FCC preferred share purchase rights issued under the FCC rights plan)
will be converted into 1.408 shares of BANC ONE common stock.
FOR ____ AGAINST ____ ABSTAIN ____
2. Such other business as may properly come before the meeting or any
reconvention thereof.
[reverse of proxy card]
This proxy will be voted as specified. IF NO SPECIFIC DIRECTIONS ARE GIVEN,
THIS PROXY WILL BE VOTED FOR PROPOSAL NO. 1 AND IN ACCORDANCE WITH THE
RECOMMENDATION OF THE BOARD OF DIRECTORS OF FCC ON ANY OTHER BUSINESS AS MAY
PROPERLY COME BEFORE THE MEETING OR ANY ADJOURNMENT THEREOF.
Dated: ________________________________, 1998
_____________________________________________
(Signature of Shareholder)
_____________________________________________
(Signature of additional Shareholder, if any)
PLEASE SIGN EXACTLY AS NAME APPEARS HEREON. JOINT OWNERS SHOULD EACH SIGN.
WHEN SIGNING AS ATTORNEY, EXECUTOR, ADMINISTRATOR, TRUSTEE OR GUARDIAN, PLEASE
GIVE FULL TITLE AS SUCH.
THE SIGNER HEREBY REVOKES ALL AUTHORIZATIONS HERETOFORE GIVEN BY THE SIGNER TO
VOTE AT THE MEETING OR ANY ADJOURNMENTS THEREOF.
