<PAGE> 1
Registration No. 33------
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------------
FORM S-4
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
-----------------------------
BOATMEN'S BANCSHARES, INC.
(Exact name of registrant as specified in its charter)
MISSOURI 6712 43-0672260
(State or other jurisdiction (Primary Standard (IRS Employer
of incorporation Industrial Classification Identification
or organization) Code Number) Number)
One Boatmen's Plaza
800 Market Street
St. Louis, Missouri 63101
(314) 466-7720
(Address, including zip code and telephone number, including area code, of
Registrant's principal executive offices)
-----------------------------
JAMES W. KIENKER
Executive Vice President and Chief Financial Officer
Boatmen's Bancshares, Inc.
One Boatmen's Plaza
800 Market Street
St. Louis, Missouri 63101
(314) 466-7718
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
-----------------------------
Copies to:
Thomas C. Erb, Esq. Charles E. Greef, Esq.
Lewis, Rice & Fingersh Jenkens & Gilchrist, P.C.
500 N. Broadway 1445 Ross Avenue, Suite 3200
St. Louis, Missouri 63102 Dallas, Texas 75202-2799
(314) 444-7600 (214) 855-4500
-----------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES
TO THE PUBLIC:
AS SOON AS PRACTICABLE AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
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. / /
-----------------------------
<TABLE>
CALCULATION OF REGISTRATION FEE
=============================================================================================================================
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE PER AGGREGATE OFFERING AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED(1) UNIT PRICE(2) REGISTRATION FEE
- -----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common stock, $1.00 par value(3) 763,254 $18.4703 $14,097,563.70 $4,861.23
=============================================================================================================================
<FN>
(1) Based upon the assumed maximum number of shares of common stock of
the Registrant issuable to holders of common stock of Dalhart
Bancshares, Inc., a Texas corporation ("Dalhart"), in the proposed
merger of Dalhart into Boatmen's Texas, Inc., a wholly-owned
subsidiary of the Registrant ("Boatmen's-Texas"), and the assumed
maximum number of shares of common stock of the Registrant issuable
to the minority holders of common stock of Citizens State Bank of
Dalhart ("Citizens Bank"), a Texas state-chartered banking
association and 93.17 percent-owned subsidiary of Dalhart Bancshares
of Delaware, Inc., a Delaware corporation and wholly-owned subsidiary
of Dalhart, in the proposed merger of Citizens Bank into Boatmen's
First National Bank of Amarillo, a national banking association and
wholly-owned subsidiary of Boatmen's-Texas ("Boatmen's-Amarillo").
(2) Solely for purposes of calculating the registration fee in accordance
with Rule 457(f)(2), the figure represents, as of June 30, 1994, the
sum of the book value of the Dalhart securities to be received by the
Registrant in the proposed merger of Dalhart into Boatmen's-Texas
($13,207,000.00) and the book value of the 6.83 percent minority
interest in Citizens Bank securities to be received by the Registrant
in the proposed merger of Citizens Bank into Boatmen's-Amarillo
($890,563.70).
(3) Each share includes one preferred share purchase right which may be
exercised upon the occurrence of certain triggering events.
</TABLE>
-----------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE
OR DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE
REGISTRANT SHALL FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT
THIS REGISTRATION STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, OR UNTIL THE
REGISTRATION STATEMENT SHALL BECOME EFFECTIVE ON SUCH DATE AS THE
COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
================================================================================
<PAGE> 2
<TABLE>
BOATMEN'S BANCSHARES, INC.
CROSS REFERENCE SHEET TO PROSPECTUS
<CAPTION>
FORM S-4 HEADING PROSPECTUS LOCATION
- --------------------------------------------------------------------------------
<S> <C>
1. Forepart of Registration Statement and
Outside Front Cover Page of Prospectus . Forepart of Registration
Statement and Outside
Front Cover Page of
Prospectus
2. Inside Front and Outside Back Cover Pages
of Prospectus. . . . . . . . . . . . . . Inside Front and Outside
Back Cover Pages of
Prospectus; Table of
Contents
3. Risk Factors, Ratio of Earnings to Fixed
Charges and Other Information. . . . . . Summary Information
4. Terms of the Transaction . . . . . . . . . Summary Information; The
Acquisition; Description
of Boatmen's Capital
Stock; Comparison of
Shareholder Rights
5. Pro Forma Financial Information. . . . . . Pro Forma Financial Data
6. Material Contacts with the Company Being
Acquired . . . . . . . . . . . . . . . . Summary Information; The
Acquisition
7. Additional Information Required for
Reoffering by Persons and Parties Deemed
to Be Underwriters . . . . . . . . . . . *
8. Interests of Named Experts and Counsel . . The Acquisition; Legal
Opinion; Experts
9. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities. . . . . . . . . . . . . . . *
10. Information with Respect to S-3
Registrants. . . . . . . . . . . . . . . Incorporation of Certain
Documents by Reference; The
Acquisition
11. Incorporation of Certain Information by
Reference. . . . . . . . . . . . . . . . Incorporation of Certain
Documents by Reference
12. Information with Respect to S-2 or S-3
Registrants. . . . . . . . . . . . . . . *
13. Incorporation of Certain Information by
Reference. . . . . . . . . . . . . . . . *
<FN>
- ----------------------------------------------
*Indicates item not applicable
<PAGE> 3
<CAPTION>
FORM S-4 HEADING PROSPECTUS LOCATION
- --------------------------------------------------------------------------------
14. Information with Respect to Registrants
Other than S-3 or S-2 Registrants. . . . *
15. Information with Respect to S-3 Companies. *
16. Information with Respect to S-2 or S-3
Companies. . . . . . . . . . . . . . . . *
17. Information with Respect to Companies
Other than S-3 or S-2 Companies. . . . . Summary Information; The
Acquisition; Information
About Dalhart and
Citizens Bank; Index to
Financial Statements of
Dalhart; Index to
Financial Statements of
Citizens Bank
18. Information if Proxies, Consents or
Authorizations are to be Solicited . . . Incorporation of Certain
Documents By Reference;
Summary Information; The
Special Meetings; The
Acquisition; Shareholder
Proposals
19. Information if Proxies, Consents or
Authorizations are not to be Solicited
or in an Exchange Offer. . . . . . . . . *
<FN>
- ----------------------------------------------
*Indicates item not applicable
</TABLE>
<PAGE> 4
DALHART BANCSHARES, INC.
AND
CITIZENS STATE BANK OF DALHART
JOINT PROXY STATEMENT
----------------------
BOATMEN'S BANCSHARES, INC.
PROSPECTUS
This Joint Proxy Statement/Prospectus ("Joint Proxy
Statement/Prospectus") is being furnished to the following:
1. Shareholders of Dalhart Bancshares, Inc., a Texas corporation
("Dalhart"), in connection with the solicitation of proxies by
the Board of Directors of Dalhart for use at the Special
Meeting of Shareholders of Dalhart (the "Dalhart Special
Meeting") to be held at ----------, local time, on ----------,
1994, at the offices of Citizens State Bank of Dalhart, 323
Denver Avenue, Dalhart, Texas, and any adjournments or
postponements thereof; and
2. Shareholders of Citizens State Bank of Dalhart ("Citizens
Bank"), a Texas banking association and 93.17 percent-owned
subsidiary of Dalhart Bancshares of Delaware, Inc., a Delaware
corporation and wholly-owned subsidiary of Dalhart ("Dalhart-
Delaware"), in connection with the solicitation of proxies by
the Board of Directors of Citizens Bank for use at the Special
Meeting of Shareholders of Citizens Bank (the "Citizens Bank
Special Meeting") to be held at ----------, local time, on
----------, 1994, at the offices of Citizens Bank, 323 Denver
Avenue, Dalhart, Texas, and any adjournments or postponements
thereof.
At the Dalhart Special Meeting, shareholders of Dalhart will
consider and vote upon the Agreement and Plan of Merger (the "Holding
Company Merger Agreement"), dated May 19, 1994, among Dalhart, Dalhart-
Delaware, Boatmen's Bancshares, Inc., a Missouri corporation
("Boatmen's"), and Boatmen's Texas, Inc., a Missouri corporation and
wholly-owned subsidiary of Boatmen's ("Boatmen's-Texas"), which provides
for, among other things, the proposed merger of Dalhart-Delaware with and
into Dalhart to be followed by the merger of Dalhart with and into
Boatmen's-Texas (the "Holding Company Merger"). Upon consummation of the
Holding Company Merger, each issued and outstanding share of common stock
of Dalhart (other than shares held by any shareholder properly exercising
dissenters' rights) will be converted into the right to receive shares of
common stock of Boatmen's as described herein.
At the Citizens Bank Special Meeting, shareholders of Citizens Bank
will consider and vote upon the Agreement to Merge (the "Subsidiary
Merger Agreement"), dated June 30, 1994, between Citizens Bank and
Boatmen's First National Bank of Amarillo, a national banking association
and wholly-owned subsidiary of Boatmen's-Texas ("Boatmen's-Amarillo"),
which provides for, among other things, the proposed merger of Citizens
Bank with and into Boatmen's-Amarillo (the "Subsidiary Bank Merger").
Upon consummation of the Subsidiary Bank Merger, each issued and
outstanding share of common stock of Citizens Bank (other than shares
held by any shareholder properly exercising dissenters' rights and shares
owned by Dalhart-Delaware) will be converted into the right to receive
shares of common stock of Boatmen's as described herein.
This Joint Proxy Statement/Prospectus also constitutes a prospectus
of Boatmen's with respect to up to 715,056 shares of common stock of
Boatmen's issuable in the Holding Company Merger to holders of common
stock of Dalhart and with respect to up to 48,198 shares of common stock
of Boatmen's issuable in the Subsidiary Bank Merger to holders of common
stock of Citizens Bank (other than Dalhart-Delaware).
This Joint Proxy Statement/Prospectus and the accompanying form of
proxy are first being mailed to shareholders of Dalhart and Citizens Bank
on or about ----------, 1994 (the "Mailing Date").
(Continued on Next Page)
<PAGE> 5
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 JOINT PROXY STATEMENT/PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------------------------
THE SHARES OF BOATMEN'S COMMON STOCK OFFERED HEREBY ARE NOT
SAVINGS ACCOUNTS, DEPOSITS OR OTHER OBLIGATIONS OF ANY
BANK OR SAVINGS ASSOCIATION AND ARE NOT INSURED BY THE
FEDERAL DEPOSIT INSURANCE CORPORATION, THE BANK INSURANCE
FUND OR ANY OTHER GOVERNMENTAL AGENCY.
-----------------------------------
THE DATE OF THIS JOINT PROXY STATEMENT/PROSPECTUS IS -----------, 1994
<PAGE> 6
<TABLE>
TABLE OF CONTENTS
-----------------
<CAPTION>
PAGE
----
<S> <C>
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . 1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . . 1
SUMMARY INFORMATION . . . . . . . . . . . . . . . . . . . . . . 3
Introduction. . . . . . . . . . . . . . . . . . . . . . . . 3
The Parties . . . . . . . . . . . . . . . . . . . . . . . . 3
The Special Meetings. . . . . . . . . . . . . . . . . . . . 4
The Dalhart Special Meeting (Applicable to Dalhart
Shareholders). . . . . . . . . . . . . . . . . . . 4
Date, Time and Place of Dalhart Special Meeting. . 4
Matters to be Considered at the Dalhart Special
Meeting . . . . . . . . . . . . . . . . . . . 5
Record Date for the Dalhart Special Meeting. . . . 5
Vote Required to Approve Holding Company Merger
Agreement . . . . . . . . . . . . . . . . . . 5
Certain Holders of Dalhart Common . . . . . . 5
The Citizens Bank Special Meeting (Applicable to
Citizens Bank Shareholders). . . . . . . . . . . . 5
Date, Time and Place of Citizens Bank Special
Meeting . . . . . . . . . . . . . . . . . . . 5
Matters to be Considered at the Citizens Bank
Special Meeting . . . . . . . . . . . . . . . 5
Record Date for the Citizens Bank Special
Meeting . . . . . . . . . . . . . . . . . . . 5
Vote Required to Approve Subsidiary Merger
Agreement . . . . . . . . . . . . . . . . . . 5
Certain Holders of Citizens Bank Common . . . 6
The Holding Company Merger (Applicable to Dalhart
Shareholders). . . . . . . . . . . . . . . . . . . . . 6
Dalhart Merger Consideration . . . . . . . . . . . . . 6
Escrow of Dalhart Merger Consideration . . . . . . . . 6
Stock Redemption Agreement; Stock Redemption
Termination Agreement. . . . . . . . . . . . . . . 7
Conditions to the Holding Company Merger; Regulatory
Approvals. . . . . . . . . . . . . . . . . . . . . 8
Conduct of Business Pending the Holding Company Merger;
Dividends. . . . . . . . . . . . . . . . . . . . . 8
Termination of the Holding Company Merger Agreement. . 8
Payment Upon Occurrence of Certain Triggering Events . 9
Dissenters' Rights . . . . . . . . . . . . . . . . . . 10
The Subsidiary Bank Merger (Applicable to Citizens Bank
Shareholders). . . . . . . . . . . . . . . . . . . . . 10
Citizens Bank Merger Consideration . . . . . . . . . . 10
Escrow of Citizens Bank Merger Consideration . . . . . 10
Conditions to the Subsidiary Bank Merger; Regulatory
Approvals. . . . . . . . . . . . . . . . . . . . . 11
Conduct of Business Pending the Subsidiary Bank Merger;
Dividends. . . . . . . . . . . . . . . . . . . . . 11
Termination of Subsidiary Merger Agreement . . . . . . 11
Dissenters' Rights . . . . . . . . . . . . . . . . . . 12
Value of the Acquisition. . . . . . . . . . . . . . . . . . 12
Reasons for the Acquisition and Recommendation of the
Boards of Directors. . . . . . . . . . . . . . . . . . 12
Management and Operations After the Acquisition . . . . . . 13
Accounting Treatment. . . . . . . . . . . . . . . . . . . . 13
Effective Time of the Acquisition . . . . . . . . . . . . . 13
Interests of Certain Persons in the Acquisition . . . . . . 13
Federal Income Tax Consequences . . . . . . . . . . . . . . 13
Comparison of Shareholder Rights. . . . . . . . . . . . . . 14
i
<PAGE> 7
<CAPTION>
PAGE
----
COMPARATIVE STOCK PRICES. . . . . . . . . . . . . . . . . . . . 15
SELECTED COMPARATIVE PER SHARE DATA . . . . . . . . . . . . . . 16
SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . 18
THE SPECIAL MEETINGS. . . . . . . . . . . . . . . . . . . . . . 22
The Dalhart Special Meeting (Applicable to Dalhart
Shareholders). . . . . . . . . . . . . . . . . . . . . 22
Date, Time and Place of Dalhart Special Meeting. . . . 22
Matters to be Considered at the Dalhart Special
Meeting. . . . . . . . . . . . . . . . . . . . . . 22
Record Date for Dalhart Special Meeting. . . . . . . . 22
Vote Required to Approve the Holding Company Merger
Agreement. . . . . . . . . . . . . . . . . . . . . 22
Voting and Revocation of Proxies for Dalhart Special
Meeting. . . . . . . . . . . . . . . . . . . . . . 23
Solicitation of Proxies for the Dalhart Special
Meeting. . . . . . . . . . . . . . . . . . . . . . 23
The Citizens Bank Special Meeting (Applicable to Citizens
Bank Shareholders) . . . . . . . . . . . . . . . . . . 23
Date, Time and Place of Citizens Bank Special Meeting. 23
Matters to be Considered at the Citizens Bank Special
Meeting. . . . . . . . . . . . . . . . . . . . . . 23
Record Date for Citizens Bank Special Meeting. . . . . 23
Vote Required to Approve the Subsidiary Merger
Agreement. . . . . . . . . . . . . . . . . . . . . 24
Voting and Revocation of Proxies for Citizens Bank
Special Meeting. . . . . . . . . . . . . . . . . . 24
Solicitation of Proxies for the Citizens Bank Special
Meeting. . . . . . . . . . . . . . . . . . . . . . 24
Expenses for Preparation of Joint Proxy
Statement/Prospectus . . . . . . . . . . . . . . . . . 25
Mailing Date of Joint Proxy Statement/Prospectus. . . . . . 25
THE PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Boatmen's Bancshares, Inc.. . . . . . . . . . . . . . . . . 25
General. . . . . . . . . . . . . . . . . . . . . . . . 25
Pending Acquisitions . . . . . . . . . . . . . . . . . 25
Boatmen's Texas, Inc. . . . . . . . . . . . . . . . . . . . 27
Boatmen's First National Bank of Amarillo . . . . . . . . . 27
Dalhart Bancshares, Inc.. . . . . . . . . . . . . . . . . . 27
Dalhart Bancshares of Delaware, Inc.. . . . . . . . . . . . 27
Citizens State Bank of Dalhart. . . . . . . . . . . . . . . 27
THE ACQUISITION . . . . . . . . . . . . . . . . . . . . . . . . 28
Background of the Acquisition . . . . . . . . . . . . . . . 28
Reasons for the Acquisition . . . . . . . . . . . . . . . . 29
Recommendation of the Boards of Directors . . . . . . . . . 29
The Holding Company Merger (Applicable to Dalhart
Shareholders). . . . . . . . . . . . . . . . . . . . . 29
Dalhart Merger Consideration . . . . . . . . . . . . . 29
Escrow of Dalhart Merger Consideration . . . . . . . . 30
Stock Redemption Agreement; Stock Redemption
Termination Agreement. . . . . . . . . . . . . . . 31
Form of the Holding Company Merger . . . . . . . . . . 32
Conduct of Business Pending the Holding Company Merger;
Dividends. . . . . . . . . . . . . . . . . . . . . 32
Conditions to Consummation of the Holding Company
Merger . . . . . . . . . . . . . . . . . . . . . . 32
Regulatory Approvals . . . . . . . . . . . . . . . . . 33
Termination or Abandonment . . . . . . . . . . . . . . 33
ii
<PAGE> 8
<CAPTION>
PAGE
----
Payment Upon Occurrence of Certain Triggering Events . 33
Dissenters' Rights . . . . . . . . . . . . . . . . . . 34
Exchange of Dalhart Stock Certificates; Fractional
Shares . . . . . . . . . . . . . . . . . . . . . . 36
Representations and Warranties of Dalhart, Dalhart-
Delaware, Boatmen's and Boatmen's-Texas. . . . . . 37
Certain Other Agreements . . . . . . . . . . . . . . . 38
No Solicitation. . . . . . . . . . . . . . . . . . . . 40
Indemnification and Insurance. . . . . . . . . . . . . 40
Waiver and Amendment . . . . . . . . . . . . . . . . . 41
Expenses and Fees. . . . . . . . . . . . . . . . . . . 41
The Subsidiary Bank Merger (Applicable to Citizens Bank
Shareholders). . . . . . . . . . . . . . . . . . . . . 41
Citizens Bank Merger Consideration . . . . . . . . . . 41
Escrow of Citizens Bank Merger Consideration . . . . . 42
Form of Subsidiary Bank Merger . . . . . . . . . . . . 43
Conduct of Business Pending the Subsidiary Bank Merger;
Limitations on Dividends and Sales of Assets . . . 43
Certain Conditions to Consummation of the Subsidiary
Bank Merger; Regulatory Approvals. . . . . . . . . 43
Termination or Abandonment . . . . . . . . . . . . . . 43
Dissenters' Rights . . . . . . . . . . . . . . . . . . 43
Exchange of Citizens Bank Stock Certificates;
Fractional Shares. . . . . . . . . . . . . . . . . 44
Board Composition. . . . . . . . . . . . . . . . . . . 44
Interests of Certain Persons in the Acquisition . . . . . . 44
Effective Time. . . . . . . . . . . . . . . . . . . . . . . 45
Federal Income Tax Consequences . . . . . . . . . . . . . . 45
Accounting Treatment. . . . . . . . . . . . . . . . . . . . 47
Management and Operations After the Acquisition . . . . . . 47
Effect on Employee Benefit Plans. . . . . . . . . . . . . . 47
Resale of Boatmen's Common. . . . . . . . . . . . . . . . . 47
PRO FORMA FINANCIAL DATA. . . . . . . . . . . . . . . . . . . . 49
DESCRIPTION OF BOATMEN'S CAPITAL STOCK. . . . . . . . . . . . . 57
Boatmen's Common. . . . . . . . . . . . . . . . . . . . . . 57
Boatmen's Series B Preferred Stock. . . . . . . . . . . . . 58
COMPARISON OF SHAREHOLDER RIGHTS. . . . . . . . . . . . . . . . 58
Shareholder Vote Required for Certain Transactions. . . . . 59
Special Meetings of Shareholders; Shareholder Action by
Written Consent. . . . . . . . . . . . . . . . . . . . 61
Notice of Shareholder Nominations of Directors. . . . . . . 62
Shareholder Proposal Procedures . . . . . . . . . . . . . . 62
Shareholder Rights Plan . . . . . . . . . . . . . . . . . . 62
Dissenters' Rights. . . . . . . . . . . . . . . . . . . . . 65
Takeover Statutes . . . . . . . . . . . . . . . . . . . . . 66
Liability of Directors; Indemnification . . . . . . . . . . 66
Consideration of Non-Shareholder Interests. . . . . . . . . 68
iii
<PAGE> 9
<CAPTION>
PAGE
----
INFORMATION ABOUT DALHART AND CITIZENS BANK . . . . . . . . . . 68
Business of Dalhart and Citizens Bank . . . . . . . . . . . 68
Management's Discussion and Analysis of Financial Condition
and Results of Operations of Dalhart . . . . . . . . . 69
Management's Discussion and Analysis of Financial Condition
and Results of Operations of Citizens Bank . . . . . .103
Security Ownership of Certain Beneficial Owners and
Management of Dalhart. . . . . . . . . . . . . . . . .138
Security Ownership of Certain Beneficial Owners and
Management of Citizens Bank. . . . . . . . . . . . . .140
LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . .141
LEGAL OPINION . . . . . . . . . . . . . . . . . . . . . . . . .141
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . .141
Independent Auditors for Boatmen's . . . . . . . . . . . .141
Independent Auditors for Dalhart and Citizens Bank. . . . .142
Presence at Special Meeting . . . . . . . . . . . . . . . .142
SHAREHOLDER PROPOSALS . . . . . . . . . . . . . . . . . . . . .142
INDEX TO FINANCIAL STATEMENTS OF DALHART. . . . . . . . . . . CF-1
INDEX TO FINANCIAL STATEMENTS OF CITIZENS BANK. . . . . . . . BF-1
EXHIBIT A . . . . . . . . . . . . . . . . . . . . . . . . . . .A-1
EXHIBIT B . . . . . . . . . . . . . . . . . . . . . . . . . . .B-1
EXHIBIT C . . . . . . . . . . . . . . . . . . . . . . . . . . .C-1
EXHIBIT D . . . . . . . . . . . . . . . . . . . . . . . . . . .D-1
EXHIBIT E . . . . . . . . . . . . . . . . . . . . . . . . . . .E-1
</TABLE>
iv
<PAGE> 10
NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS JOINT PROXY STATEMENT/PROSPECTUS
IN CONNECTION WITH THE OFFERING DESCRIBED HEREIN AND ANY SUCH
INFORMATION OR REPRESENTATION, IF GIVEN OR MADE, MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORIZED BY BOATMEN'S, DALHART OR CITIZENS
BANK. THIS JOINT PROXY STATEMENT/PROSPECTUS DOES NOT CONSTITUTE A
SOLICITATION OR AN OFFERING OF ANY SECURITIES OTHER THAN THE
REGISTERED SECURITIES TO WHICH IT RELATES OR IN ANY JURISDICTION TO
ANY PERSON TO WHOM IT WOULD BE UNLAWFUL TO MAKE SUCH OFFER OR
SOLICITATION IN SUCH JURISDICTION. THE DELIVERY OF THIS JOINT PROXY
STATEMENT/PROSPECTUS AT ANY TIME DOES NOT IMPLY THAT ANY INFORMATION
HEREIN IS CORRECT AS OF ANY TIME SUBSEQUENT TO ITS DATE.
AVAILABLE INFORMATION
Boatmen's 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
"S.E.C."). The reports, proxy statements and other information can
be inspected and copied at the public reference facilities of the
S.E.C., Room 1024, 450 Fifth Street, N.W., Washington, D.C. 20549,
and at the regional offices of the S.E.C. located at 7 World Trade
Center, New York, New York 10048, and Suite 1400, Northwestern Atrium
Center, 500 West Madison Street, Chicago, Illinois 60661, and copies
of such materials can be obtained from the public reference section
of the S.E.C. at 450 Fifth Street, N.W., Washington, D.C. 20549, at
prescribed rates. In addition, reports, proxy statements and other
information concerning Boatmen's may be inspected at the offices of
the National Association of Securities Dealers, Inc., 1735 K Street,
N.W., Washington, D.C. 20006.
Boatmen's has filed with the S.E.C. 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 common stock of Boatmen's to
be issued pursuant to the Holding Company Merger and the Subsidiary
Bank Merger described herein. This Joint Proxy Statement/Prospectus
does not contain all the information set forth in the Registration
Statement and the exhibits thereto. Such additional information may
be obtained from the S.E.C.'s principal office in Washington, D.C.
Statements contained in this Joint Proxy Statement/Prospectus or in
any document incorporated in this Joint Proxy Statement/Prospectus
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 where reference is made to the copy of such contract
or other document filed as an exhibit to the Registration Statement
or such other document, each such statement is qualified in all
respects by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed with the S.E.C. by Boatmen's (File
No. 1-3750) and Worthen Banking Corporation ("Worthen") (File No. 1-
8525) (see "THE PARTIES -- Boatmen's Bancshares, Inc. -- Pending
Acquisitions) pursuant to the Exchange Act are incorporated by
reference in this Joint Proxy Statement/Prospectus:
1. Boatmen's Annual Report on Form 10-K for the year ended
December 31, 1993;
2. Boatmen's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1994 and June 30, 1994;
1
<PAGE> 11
3. The description of the common stock of Boatmen's contained
in Boatmen's Registration Statement on Form 8-A under the
Exchange Act, as amended under cover of Form 8 dated
July 15, 1988, and the description of the preferred share
purchase rights contained in Boatmen's Registration
Statement on Form 8-A under the Exchange Act, filed
August 14, 1990;
4. Boatmen's Current Report on Form 8-K dated September 2,
1994;
5. Worthen's Annual Report on Form 10-K for the year ended
December 31, 1993;
6. Worthen's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1994 and June 30, 1994; and
7. Worthen's Current Reports on Form 8-K dated June 24, 1994
and September 9, 1994.
All documents and reports filed by Boatmen's and Worthen
pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act
after the date of this Joint Proxy Statement/Prospectus and prior to
the date of the special meetings of shareholders of Dalhart and
Citizens Bank shall be deemed to be incorporated by reference in this
Joint Proxy Statement/Prospectus and to be a part hereof from the
dates of filing of such documents or reports. 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 Joint Proxy Statement/Prospectus to the extent that
a statement contained herein or in any other subsequently filed
document which also is deemed to be incorporated by reference herein
modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Joint Proxy
Statement/Prospectus.
THIS JOINT PROXY STATEMENT/PROSPECTUS INCORPORATES DOCUMENTS
RELATING TO BOATMEN'S AND WORTHEN BY REFERENCE WHICH ARE NOT
PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (EXCLUDING
UNINCORPORATED EXHIBITS) ARE AVAILABLE, WITHOUT CHARGE UPON WRITTEN
OR ORAL REQUEST, TO ANY PERSON, INCLUDING ANY BENEFICIAL OWNER, TO
WHOM THIS JOINT PROXY STATEMENT/PROSPECTUS IS DELIVERED, TO KEVIN R.
STITT, DIRECTOR OF INVESTOR RELATIONS, BOATMEN'S BANCSHARES, INC.,
ONE BOATMEN'S PLAZA, 800 MARKET STREET, ST. LOUIS, MISSOURI 63101
(TELEPHONE NUMBER (314) 466-7662). IN ORDER TO ENSURE TIMELY
DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY
- ------------, 1994.
2
<PAGE> 12
SUMMARY INFORMATION
The following is a brief summary of certain information
contained elsewhere in this Joint Proxy Statement/Prospectus. The
following summary is not intended to be complete and is qualified in
all respects by the information appearing elsewhere herein or
incorporated by reference into this Joint Proxy Statement/Prospectus,
the Exhibits hereto and the documents referred to herein. All
information contained in this Joint Proxy Statement/Prospectus
relating to Boatmen's and its subsidiaries has been supplied by
Boatmen's and all information relating to Dalhart and its
subsidiaries has been supplied by Dalhart. Shareholders are urged
to read this Joint Proxy Statement/Prospectus and the Exhibits hereto
in their entirety.
INTRODUCTION
This Joint Proxy Statement/Prospectus relates to (i) an
Agreement and Plan of Merger dated May 19, 1994 (the "Holding Company
Merger Agreement"), among Dalhart Bancshares, Inc., a Texas
corporation ("Dalhart"), Dalhart Bancshares of Delaware, Inc., a
Delaware corporation and wholly-owned subsidiary of Dalhart
("Dalhart-Delaware"), Boatmen's Bancshares, Inc., a Missouri
corporation ("Boatmen's"), and Boatmen's Texas, Inc., a Missouri
corporation and wholly-owned subsidiary of Boatmen's, which provides
for, among other things, the merger (the "Holding Company Merger")
of Dalhart with and into Boatmen's-Texas, and (ii) an Agreement to
Merge, dated June 30, 1994 (the "Subsidiary Merger Agreement"), between
Citizens State Bank of Dalhart, a Texas state-chartered bank and 93.17
percent-owned subsidiary of Dalhart-Delaware ("Citizens Bank"), and
Boatmen's First National Bank of Amarillo, a national banking association
and wholly-owned subsidiary of Boatmen's-Texas ("Boatmen's-Amarillo"),
which provides for, among other things, the merger (the "Subsidiary Bank
Merger") of Citizens Bank with and into Boatmen's-Amarillo.
As a result of the Holding Company Merger and the Subsidiary
Bank Merger (which are referred to herein collectively as the
"Acquisition"), Boatmen's will effectively acquire beneficial ownership of
all of the issued and outstanding stock of Dalhart and Citizens Bank.
The summary set forth in this Joint Proxy Statement/Prospectus
of certain provisions of the Holding Company Merger Agreement and the
Subsidiary Merger Agreement is qualified in its entirety by reference
to the full text of the Holding Company Merger Agreement, which is
incorporated by reference herein and attached as Exhibit A to this
Joint Proxy Statement/Prospectus, and the full text of the Subsidiary
Merger Agreement, which is incorporated by reference herein and
attached as Exhibit B to this Joint Proxy Statement/Prospectus.
THE PARTIES
Boatmen's is a multi-bank holding company headquartered in
St. Louis, Missouri. At June 30, 1994, Boatmen's had consolidated
assets of approximately $27.6 billion and shareholders' equity of
$2.2 billion, making it the largest bank holding company in Missouri
and among the 30 largest in the United States. Boatmen's
49 subsidiary banks, including a federal savings bank, operate from
over 400 locations in Missouri, Arkansas, Illinois, Iowa, Kansas, New
Mexico, Oklahoma, Tennessee and Texas. Boatmen's also ranks among
the 16 largest providers of trust services in the nation, with
approximately $34.2 billion in assets under management at June 30,
1994. Boatmen's other principal businesses include a mortgage
banking company, a credit life insurance company, a credit card
company and an insurance agency. The principal executive offices
of Boatmen's are at One Boatmen's Plaza, 800 Market Street,
St. Louis, Missouri 63101 (telephone number (314) 466-6000).
3
<PAGE> 13
Boatmen's-Texas is a wholly-owned subsidiary of Boatmen's which,
in turn, owns all of the capital stock of Boatmen's-Amarillo. At
June 30, 1994, Boatmen's-Texas had consolidated assets of
approximately $1 billion and shareholders' equity of $77 million.
The principal executive offices of Boatmen's-Texas are at One
Boatmen's Plaza, 800 Market Street, St. Louis, Missouri 63101
(telephone number (314) 466-6000).
Boatmen's-Amarillo is a national banking association
headquartered in Amarillo, Texas, with nine offices located in
Amarillo, Canyon and Dumas, Texas. Boatmen's-Amarillo, which
commenced operations in 1890, was acquired by Boatmen's on
November 30, 1993. All of the outstanding capital stock of
Boatmen's-Amarillo is owned by Boatmen's-Texas. At June 30, 1994,
Boatmen's-Amarillo had assets of approximately $1 billion, deposits
of $665 million, and shareholders' equity of $74 million. Boatmen's-
Amarillo, the largest commercial bank in terms of assets, deposits
and earnings in its service area which includes northwestern Texas,
known as the "Panhandle", and portions of eastern New Mexico,
southwestern Kansas, southeastern Colorado and western Oklahoma,
offers a broad range of commercial and retail banking services as
well as other financial services to its customers. Deposit products
include certificates of deposit, individual retirement accounts and
other time deposits, checking and other demand deposit accounts,
savings accounts and money market accounts. Loans include commercial
and industrial, real estate, mortgage, consumer and agricultural.
Other products and services include full service brokerage, credit
cards, credit-related insurance, automatic teller machines, safe
deposit boxes and trust services. The principal executive offices
of Boatmen's-Amarillo are at Eighth & Taylor, Amarillo, Texas 79101
(telephone number (806) 378-1400).
Dalhart is a bank holding company headquartered in Dalhart,
Texas. Dalhart's wholly-owned subsidiary, Dalhart-Delaware, owns
93.17 percent of the outstanding capital stock of Citizens Bank. The
businesses of Dalhart and Dalhart-Delaware consist primarily of the
ownership, supervision and control of Citizens Bank. At June 30,
1994, Dalhart had consolidated assets of approximately $132 million
and shareholders' equity of $13 million.
Dalhart-Delaware is a bank holding company headquartered in
Wilmington, Delaware. Dalhart-Delaware owns 93.17 percent of the
outstanding capital stock of Citizens Bank. Under applicable Texas
law, the ownership of the stock of Citizens Bank by an intermediate
out-of-state holding company, such as Dalhart-Delaware, rather than
by Dalhart directly, eliminates the Texas franchise tax liability of
Dalhart.
Citizens Bank is a Texas state-chartered bank headquartered in
Dalhart, Texas. Citizens Bank operates from its main office in
Dalhart, Texas, and from its three branches in Amarillo, Childress
and Vega, Texas. Citizens Bank offers complete banking services to
the commercial and residential areas which it serves. At June 30,
1994, Citizens Bank had assets of approximately $131 million and
shareholders' equity of $13 million.
The principal executive offices of Dalhart, Dalhart-Delaware and
Citizens Bank are at 323 Denver Avenue, Dalhart, Texas 79022
(telephone number (806) 249-6421).
THE SPECIAL MEETINGS
THE DALHART SPECIAL MEETING (APPLICABLE TO DALHART SHAREHOLDERS)
Date, Time and Place of Dalhart Special Meeting
The special meeting of the shareholders of Dalhart (the "Dalhart
Special Meeting") will be held at the offices of Citizens Bank, 323
Denver Avenue, Dalhart, Texas 79022 on ------------, 1994, at
- -----------, local time.
4
<PAGE> 14
Matters to be Considered at the Dalhart Special Meeting
At the Dalhart Special Meeting, holders of common stock, par
value $10.00 per share, of Dalhart ("Dalhart Common") will consider
and vote upon approving the Holding Company Merger Agreement
providing for, among other things, the Holding Company Merger of
Dalhart with and into Boatmen's-Texas.
Record Date for the Dalhart Special Meeting
The record date for the Dalhart Special Meeting is ------------,
1994.
Vote Required to Approve Holding Company Merger Agreement
Approval and adoption of the Holding Company Merger Agreement
will require the affirmative vote of a majority of the outstanding
shares of Dalhart Common entitled to vote thereon. Holders of
Dalhart Common will be entitled to one vote per share.
Certain Holders of Dalhart Common
As of June 30, 1994, executive officers and directors of Dalhart
and their affiliates may be deemed to have owned beneficially 86,083
shares (approximately 86%) of Dalhart Common, all of which are expected
by management of Dalhart to be voted in favor of the Holding Company
Merger Agreement.
THE CITIZENS BANK SPECIAL MEETING (APPLICABLE TO CITIZENS BANK
SHAREHOLDERS)
Date, Time and Place of Citizens Bank Special Meeting
The special meeting of the shareholders of Citizens Bank (the
"Citizens Bank Special Meeting") will be held at the offices of
Citizens Bank, 323 Denver Avenue, Dalhart, Texas 79022 on
- ------------, 1994, at -----------, local time.
Matters to be Considered at the Citizens Bank Special Meeting
At the Citizens Bank Special Meeting, holders of common stock,
par value $100.00 per share, of Citizens Bank ("Citizens Bank
Common") will consider and vote upon approving the Subsidiary Merger
Agreement providing for, among other things, the Subsidiary Bank
Merger of Citizens Bank with and into Boatmen's-Amarillo.
Record Date for the Citizens Bank Special Meeting
The record date for the Citizens Bank Special Meeting is
- ------------, 1994.
Vote Required to Approve Subsidiary Merger Agreement
Approval and adoption of the Subsidiary Merger Agreement will
require the affirmative vote of two-thirds (2/3) of the outstanding
shares of Citizens Bank Common entitled to vote thereon. Holders of
Citizens Bank Common will be entitled to one vote per share.
5
<PAGE> 15
Certain Holders of Citizens Bank Common
As of June 30, 1994, Dalhart-Delaware and executive officers and
directors of Citizens Bank and their affiliates owned beneficially
18,943 shares (94.72%) of Citizens Bank Common, all of which are
expected by management of Citizens Bank to be voted in favor of the
Subsidiary Merger Agreement.
THE HOLDING COMPANY MERGER
(APPLICABLE TO DALHART SHAREHOLDERS)
Dalhart Merger Consideration
At the time the Holding Company Merger is consummated (the
"Effective Time"), Dalhart will merge into Boatmen's-Texas and, as a
result thereof, each share of Dalhart Common, other than shares any
holders of which have duly exercised and perfected their dissenters'
rights under the Texas Business Corporation Act (the "Texas Law"), will
be converted into 6.3599 shares (the "Dalhart Conversion Ratio") of
common stock, par value $1.00 per share, of Boatmen's ("Boatmen's
Common"), together with any rights attached thereto, under or by virtue
of the Rights Agreement, dated August 14, 1990, between Boatmen's and
Boatmen's Trust Company, as Rights Agent (as described on page 62 hereto)
(such number of shares, together with any cash payment in lieu of
fractional shares, as described herein, is referred to herein as the
"Dalhart Merger Consideration"). The Dalhart Conversion Ratio and the
Dalhart Merger Consideration are subject to possible increase as
described herein. In addition, a portion of the Dalhart Merger
Consideration is subject to an Escrow Agreement described herein. No
fractional shares of Boatmen's Common will be issued and, in lieu
thereof, holders of shares of Dalhart Common who would otherwise be
entitled to a fractional share interest (after taking into account all
shares of Dalhart Common held by such holder exclusive of any interest in
the Dalhart Escrow Shares (defined herein)) will be paid an amount in
cash equal to the product of such fractional share interest and the
closing price of a share of Boatmen's Common on the Nasdaq Stock
Market's National Market (the "Nasdaq") on the business day
immediately preceding the date on which the Effective Time occurs.
The Holding Company Merger Agreement provides that the Dalhart
Merger Consideration would be subject to possible increase should the
Effective Time occur after the record date for the payment of the
regular quarterly dividend on Boatmen's Common declared during the
fourth quarter of 1994 or the first quarter of 1995. In such event,
the Dalhart Merger Consideration will be increased by adding to the Dalhart
Conversion Ratio the quotient of (i) the product of (A) the amount of such
quarterly dividend or dividends, as the case may be, multiplied by (B)
6.3599, divided by (ii) the average closing price of a share of Boatmen's
Common on Nasdaq during the twenty trading days immediately preceding the
fifth calendar day immediately preceding the closing date of the Holding
Company Merger (the "Boatmen's Average Price")
In addition to the foregoing, the Holding Company Merger
Agreement provides for an adjustment to the Dalhart Conversion Ratio
should Dalhart receive or become entitled to receive prior to the
closing date of the Holding Company Merger (the "Closing Date"), the
proceeds of a $1,000,000 insurance policy on the life of a principal
shareholder of Dalhart. In such event, the Dalhart Conversion Ratio
will be increased by an amount equal to the quotient of $1,000,000
divided by the number of issued and outstanding shares of Dalhart
Common divided, again, by the Boatmen's Average Price. No assurance
can be given whether the Dalhart Merger Consideration would be
adjusted as described herein.
Escrow of Dalhart Merger Consideration
Dalhart, Dalhart-Delaware, Boatmen's, Boatmen's-Texas and Citizens
Bank will enter into an Escrow Agreement (the "Escrow Agreement"),
to provide for the escrow of a portion of the Dalhart Merger
6
<PAGE> 16
Consideration having a value of $929,550. The purpose of the
Escrow Agreement is to provide a reserve from the aggregate Dalhart
Merger Consideration for the satisfaction and payment of any judgment
on or settlement of certain pending litigation against Citizens Bank,
certain of its employees and others styled Western National Bank v.
------------------------
Citizens State Bank, Curtis Beard, Prestige Lending Corporation and
- -------------------------------------------------------------------
Robert P. Mulroy (District Court of Dallas County, Texas, Cause
- ----------------
No. 94-04206-L), (the "WNB" Claim"), and all costs and expenses
incurred in responding to and defending against the WNB Claim. The
WNB Claim alleges certain business torts against Citizens Bank and
others in connection with the generation of certain mortgage-related
business sought by the claimant, a competing financial institution.
See "LEGAL PROCEEDINGS."
Pursuant to the terms of the Holding Company Merger Agreement
and the Escrow Agreement, a portion of the Dalhart Merger
Consideration equal to the quotient of (a) the number of shares of
Boatmen's Common as equals the quotient of $929,550 divided by the
Boatmen's Average Price and (b) the number of shares of Dalhart
Common issued and outstanding immediately prior to the Effective Time
(which are held by shareholders who have not duly exercised and
perfected their dissenters' rights under the Texas Law), will be
issued and delivered by Boatmen's to the escrow agent on the Closing
Date (the "Dalhart Escrow Shares"). The balance of the Dalhart
Merger Consideration will be issued to the holders of Dalhart Common.
During the period in which the Dalhart Escrow Shares are held by the
escrow agent pursuant to the Escrow Agreement, shareholders of
Dalhart Common who would otherwise be entitled to receive the Dalhart
Escrow Shares but for the Escrow Agreement (the "Eligible Dalhart
Shareholders") will be entitled to receive their pro rata share of
any dividend or other distribution which may be paid on the Dalhart
Escrow Shares. In addition, such Eligible Dalhart Shareholder is
entitled to exercise all voting rights with regard to his or her pro
rata interest in the Dalhart Escrow Shares.
The Eligible Dalhart Shareholders are represented by a
Shareholders' Committee comprised of three individuals. The
Shareholders' Committee and Boatmen's-Amarillo, as successor by
merger with Citizens Bank, will consult with one another regarding
resolution of the WNB Claim.
Upon termination of the Escrow Agreement by reason of resolution
or termination of the WNB Claim, the Dalhart Escrow Shares, less a
certain number of the Dalhart Escrow Shares necessary to reflect the
cost and expense of defending the WNB Claim, would be distributed to
the Eligible Dalhart Shareholders. The full text of the Escrow
Agreement is attached as Exhibit C to this Joint Proxy
Statement/Prospectus and is incorporated herein by this reference.
Stock Redemption Agreement; Stock Redemption Termination Agreement
Dalhart and Catherine D. Koehler, a principal shareholder of
Dalhart, have entered into a Redemption Agreement, dated as of
January 8, 1993. The Redemption Agreement grants Dalhart an option
to repurchase Mrs. Koehler's shares of Dalhart Common upon her death.
To facilitate the possible repurchase of the shares of Dalhart Common
owned by Mrs. Koehler, Dalhart purchased, maintains and is the sole
beneficiary of a One Million Dollar ($1,000,000) whole-life insurance
policy on the life of Mrs. Koehler. As described herein, the Dalhart
Conversion Ratio is subject to adjustment should Dalhart receive or
become entitled to receive prior to the Closing Date the proceeds of
such policy. In connection with the transactions contemplated by the
Holding Company Merger Agreement, Dalhart and Mrs. Koehler have
entered into a Stock Redemption Termination Agreement, dated as of
May 19, 1994, pursuant to which the Redemption Agreement would be
terminated effective as of the Closing Date without the repurchase
of Mrs. Koehler's shares of Dalhart Common having been effected. Should
the Holding Company Merger Agreement be terminated, or should the
Holding Company Merger not be consummated by May 19, 1995, the Stock
Redemption Termination Agreement shall terminate and the Repurchase
Agreement shall commence in full force and effect. As discussed herein,
the obligations of Boatmen's to effect the Holding Company Merger and
the Subsidiary Bank Merger are subject to the continued enforceability and
7
<PAGE> 17
effectiveness of the Stock Redemption Termination Agreement. The Redemption
Agreement and the Stock Redemption Termination Agreement are attached as an
exhibit to the Holding Company Merger Agreement, attached as Exhibit A to
this Joint Proxy Statement/Prospectus.
Conditions to the Holding Company Merger; Regulatory Approvals
The Holding Company Merger is subject to various conditions
including, among other things, (i) approval of the Holding Company
Merger Agreement by the requisite majority vote of the shareholders
of Dalhart and approval of the Subsidiary Merger Agreement by the
requisite two-thirds (2/3) vote of shareholders of Citizens Bank;
(ii) receipt of regulatory approvals of the Holding Company Merger
from the Board of Governors of the Federal Reserve System (the
"Federal Reserve") and the Texas Department of Banking; (iii) receipt
of regulatory approvals of the Subsidiary Bank Merger from the Office
of the Comptroller of the Currency (the "O.C.C."); (iv) receipt of
a ruling from the Internal Revenue Service (the "I.R.S.") or opinion
of counsel on certain tax aspects of the Holding Company Merger;
(v) receipt of an accounting opinion to the effect that the Holding
Company Merger and the Subsidiary Bank Merger qualify for "pooling
of interests" accounting treatment; and (vi) the occurrence of no
material adverse changes in the businesses of Boatmen's or Dalhart.
The Holding Company Merger may not be consummated until the 30th day
after the date of Federal Reserve approval. Applications for the
required regulatory approval from the Federal Reserve and the Texas
Department of Banking, for approval of the Holding Company Merger,
and with the O.C.C., for approval of the Subsidiary Bank Merger, have
been filed and are pending.
Conduct of Business Pending the Holding Company Merger; Dividends
Pursuant to the Holding Company Merger Agreement, Dalhart has
agreed to carry on its business in the usual, regular and ordinary
course in substantially the same manner as conducted prior to the
execution of the Holding Company Merger Agreement. The Holding
Company Merger Agreement provides that Dalhart may not declare or pay
any dividend or make any other distribution to shareholders, whether
in cash, stock or other property, after the date of the Holding
Company Merger Agreement.
Termination of the Holding Company Merger Agreement
The Holding Company Merger Agreement may be terminated at any
time prior to the Effective Time: (i) by either party if the Holding
Company Merger is not consummated on or prior to May 19, 1995;
(ii) by mutual agreement of Boatmen's and Dalhart; (iii) by Boatmen's
or Dalhart in the event of a material breach by the other of any of
its representations and warranties or agreements under the Holding
Company Merger Agreement not cured within thirty days after notice
of such breach is given by the non-breaching party; (iv) by either
party in the event all the conditions to its obligations are not
satisfied or waived (and not cured within any applicable cure
period); (v) by Boatmen's in the event that Dalhart or Citizens Bank
becomes a party or subject to any new or amended written agreement,
memorandum of understanding, cease and desist order, imposition of
civil money penalties or other regulatory enforcement action or
proceeding with any federal or state agency charged with the
supervision or regulation of banks or bank holding companies after
the date of the Holding Company Merger Agreement (except with respect
to any such regulatory enforcement action that could be terminated
on or before the Closing Date through reasonable efforts of Boatmen's
and Dalhart and that would not require any capital infusion to be
made or other action having a financial effect materially adverse to
the financial benefits of the Holding Company Merger to Boatmen's);
and (vi) by Boatmen's if certain reports of environmental inspection
on the real properties of Dalhart to be obtained pursuant to the
Holding Company Merger Agreement should disclose any contamination
or presence of hazardous wastes, the estimated clean up or other
remedial cost of which exceeds $400,000.
8
<PAGE> 18
Payment Upon Occurrence of Certain Triggering Events
The Holding Company Merger Agreement provides that upon the
occurrence of one or more Triggering Events (as described herein),
Dalhart will pay to Boatmen's the sum of Seven Hundred Fifty Thousand
Dollars ($750,000).
As used herein, the term "Triggering Event" means any of the
following events: (i) termination of the Holding Company Merger
Agreement by Boatmen's upon a breach thereof by Dalhart (including,
without limitation, the entering into of an agreement between Dalhart
and any third party which is inconsistent with the transactions
contemplated by the Holding Company Merger Agreement), provided that
within twelve months of the date of such termination, either an event
described in clauses (iii), (iv) or (v) herein shall have occurred;
(ii) the failure of Dalhart's shareholders to approve the Holding
Company Merger and the Holding Company Merger Agreement at the
Dalhart Special Meeting; provided, however, that the failure of
Dalhart's shareholders to approve the Holding Company Merger and the
Holding Company Merger Agreement shall not be deemed a Triggering
Event if (a) the average of the daily closing prices of a share of
Boatmen's Common, as reported on the Nasdaq during the period of
twenty trading days ending at the end of the second trading day
immediately preceding the Mailing Date (the "Boatmen's Final Price"),
is less than $26.00, and (b) the number obtained by dividing the
Boatmen's Final Price by the Boatmen's Initial Price (as defined
herein), is less than the number obtained by dividing the Final Index
Price (as defined herein) by the Initial Index Price (as defined
herein) and subtracting .20 from such quotient; (iii) any person or
group of persons (other than Boatmen's) acquires, or has the right
to acquire, fifty percent (50%) or more of the outstanding shares of
Dalhart Common, exclusive of shares of Dalhart Common sold directly
or indirectly to such person or group of persons by Boatmen's;
(iv) expiration of the fifth day preceding the scheduled expiration
date of a tender or exchange offer by any person or group of persons
(other than Boatmen's and/or its affiliates) to purchase or acquire
securities of Dalhart if upon consummation of such offer, such person
or group of persons would own, control or have the right to acquire
fifty percent (50%) or more of the outstanding shares of Dalhart
Common; or (v) upon the entry by Dalhart or Citizens Bank into an
agreement or other understanding with a person or group of persons
(other than Boatmen's and/or its affiliates) for such person or group
of persons to acquire, merge or consolidate with Dalhart or Citizens
Bank or to purchase all or substantially all of Dalhart's or Citizens
Bank's assets.
As used herein, (a) "Index Group" means all of the bank holding
companies listed on Exhibit 7.09 to the Holding Company Merger
Agreement, the common stock of which is publicly traded and as to
which there is no pending publicly announced proposal at any time
during the period of twenty trading days ending at the end of the
fifth trading day immediately preceding the Closing Date for such
company to be acquired or to acquire another company (which would
constitute a "significant subsidiary" of such company as such term
is defined in Rule 1-02 of the S.E.C.'s Regulation S-X) in exchange
for its stock; (b) "Initial Boatmen's Price" means the closing price
of a share of Boatmen's Common on May 19, 1994; (c) "Initial Index
Price" means the weighted average (weighted in accordance with the
factors specified on Exhibit 7.09 to the Holding Company Merger
Agreement) of the per share closing prices of the common stock of the
bank holding companies comprising the Index Group, as reported on the
consolidated transactions reporting system for the market or exchange
on which such common stock is principally traded, on May 19, 1994;
(d) "Final Price" of any company belonging to the Index Group means
the average of the daily closing sale prices of a share of common
stock of such company, as reported in the consolidated transaction
reporting system for the market or exchange on which such common
stock is principally traded, during the period of twenty trading days
ending at the end of the second trading day immediately preceding the
Mailing Date; and (e) "Final Index Price" means the weighted average
(weighted in accordance with the factors specified on Exhibit 7.09
to the Holding Company Merger Agreement) of the Final Prices for all
of the companies comprising the Index Group.
9
<PAGE> 19
Dissenters' Rights
The rights of dissenting shareholders of Dalhart are governed by
the Texas Law, which provides, in certain situations, that a
shareholder will be entitled to receive the fair value of his or her
shares of Dalhart Common held immediately before the Holding Company
Merger is consummated if such shareholder: (i) files a written
objection to the proposed Holding Company Merger prior to the Dalhart
Special Meeting; (ii) does not vote his or her shares in favor of
approving the Holding Company Merger Agreement; (iii) makes written
demand on Dalhart for payment of the fair value of his or her shares
within ten days after Boatmen's mails or delivers notice of the
consummation of the Holding Company Merger; (iv) submits his or her
certificates to Boatmen's within 20 days of demanding payment for his
or her shares for notation thereon that such demand has been made;
and (v) either gives notice within 60 days of Boatmen's offer to
accept that offer or, within 120 days from the date of the Holding
Company Merger, files a petition with the appropriate court for an
appraisal.
THE SUBSIDIARY BANK MERGER
(APPLICABLE TO CITIZENS BANK SHAREHOLDERS)
Citizens Bank Merger Consideration
At the time the Subsidiary Bank Merger is consummated, Citizens
Bank will merge into Boatmen's-Amarillo and, as a result thereof,
each share of Citizens Bank Common, other than shares any holders of
which have duly exercised and perfected their dissenters' rights
under provisions of the Texas Banking Code (the "Texas Banking Law")
and the Texas Law, and other than shares held by Dalhart-Delaware,
will be converted into the right to receive 35.2840 shares (the
"Citizens Bank Conversion Ratio") of Boatmen's Common, together with
any rights attached thereto, under or by virtue of the Rights
Agreement, dated August 14, 1990, between Boatmen's and Boatmen's
Trust Company, as Rights Agent (as described on page 62 hereto),
(such number of shares, together with any cash payment in lieu of
fractional shares, as described herein, is referred to herein as the
"Citizens Bank Merger Consideration"). A portion of the Citizens
Bank Merger Consideration is subject to an Escrow Agreement described
herein. No fractional shares of Boatmen's Common will be issued and,
in lieu thereof, holders of shares of Citizens Bank Common who would
otherwise be entitled to a fractional share interest (after taking
into account all shares of Citizens Bank Common held by such holder
exclusive of any interest in the Citizens Bank Escrow Shares (defined
herein)) will be paid an amount in cash equal to the product of such
fractional share interest and the closing price of a share of
Boatmen's Common on the Nasdaq on the business day immediately
preceding the date on which the Effective Time occurs.
Escrow of Citizens Bank Merger Consideration
Dalhart, Dalhart-Delaware, Boatmen's, Boatmen's-Texas and
Citizens Bank will enter into an Escrow Agreement (the "Escrow
Agreement"), to provide for the escrow of a portion of the Citizens
Bank Merger Consideration having a value of $70,450. The purpose of
the Escrow Agreement is to provide a reserve from the aggregate
Citizens Bank Merger Consideration for the satisfaction and payment
of any judgment on or settlement of certain pending litigation
against Citizens Bank, certain of its employees and others styled
Western National Bank v. Citizens State Bank, Curtis Beard, Prestige
- --------------------------------------------------------------------
Lending Corporation and Robert R. Mulroy (District Court of Dallas
- ----------------------------------------
County, Texas, Cause No. 94-04206-L) (the "WNB Claim"), and all costs
and expenses incurred in responding to and defending against the WNB
Claim. The WNB Claim alleges certain business torts against Citizens
Bank and others in connection with the generation of certain
mortgage-related business sought by the claimant, a competing
financial institution. See "LEGAL PROCEEDINGS."
10
<PAGE> 20
Pursuant to the terms of the Subsidiary Bank Merger Agreement
and the Escrow Agreement, a portion of the Citizens Bank Merger
Consideration equal to the quotient of (a) the number of shares of
Boatmen's Common as equals the quotient of $70,450 divided by the
Boatmen's Average Price and (b) the number of shares of Citizens Bank
Common owned by shareholders of Citizens Bank (other than Dalhart-
Delaware) who have not duly exercised and perfected their dissenters'
rights under the Texas Banking Law and the Texas Law, will be issued
and delivered by Boatmen's to an escrow agent on the Closing Date
(the "Citizens Bank Escrow Shares"). The balance of the Citizens
Bank Merger Consideration will be issued to the holders of Citizens
Bank Common other than Dalhart-Delaware. During the period in which
the Citizens Bank Escrow Shares are held by the escrow agent pursuant
to the Escrow Agreement, shareholders of Citizens Bank Common who
would otherwise be entitled to receive the Citizens Bank Escrow
Shares but for the Escrow Agreement (the "Eligible Citizens Bank
Shareholders") will be entitled to receive their pro rata share of
any dividend or other distribution which may be paid on the Citizens
Bank Escrow Shares. In addition, each Eligible Citizens Bank
Shareholder is entitled to exercise all voting rights with respect
to his or her pro rata interest in the Citizens Bank Escrow Shares.
The Eligible Citizens Bank Shareholders are represented by a
Shareholders' Committee comprised of three individuals. The
Shareholders' Committee also represents the Eligible Dalhart
Shareholders. The Shareholders' Committee and Boatmen's-Amarillo,
as successor by merger with Citizens Bank, will consult with one
another regarding resolution of the WNB Claim.
Upon termination of the Escrow Agreement by reason of resolution
or termination of the WNB Claim, the Citizens Bank Escrow Shares,
less a certain number of the Citizens Bank Escrow Shares necessary
to reflect the cost and expense of defending the WNB Claim, would be
distributed to the Eligible Citizens Bank Shareholders. The full
text of the Escrow Agreement is attached as Exhibit C to this Joint
Proxy Statement/Prospectus and is incorporated herein by this
reference.
Conditions to the Subsidiary Bank Merger; Regulatory Approvals
The Subsidiary Bank Merger is subject to the prior or
simultaneous consummation of the Holding Company Merger contemplated
by the Holding Company Merger Agreement. The Subsidiary Bank Merger
is also subject to regulatory approval from the O.C.C. An
application has been filed with the O.C.C. for approval of the
Subsidiary Bank Merger and is pending.
Conduct of Business Pending the Subsidiary Bank Merger; Dividends
Pursuant to the Subsidiary Merger Agreement, Citizens Bank has
agreed to carry on its business in the ordinary course of business
and has agreed not to sell or otherwise dispose of any of the assets.
Except for the payment of a $91,800 dividend to its shareholders,
Citizens Bank is not permitted to declare or pay any other dividend
to its shareholders between the date of the Subsidiary Merger
Agreement and the Effective Time.
Termination of Subsidiary Merger Agreement
The Subsidiary Merger Agreement may be terminated prior to the
Effective Time: (i) by the mutual consent of the board of directors
of Citizens Bank and Boatmen's-Amarillo prior to or after the
approval of the shareholders of either party of the Subsidiary Bank
Merger; (ii) automatically if the Subsidiary Bank Merger is not
consummated by June 30, 1995, unless extended, in writing, prior to
such date by mutual action of the board of directors of Citizens
Bank and Boatmen's-Amarillo; and (iii) automatically in the event
that the Holding Company Merger Agreement is terminated without the
transactions contemplated thereby being consummated as provided
therein.
11
<PAGE> 21
Dissenters' Rights
Pursuant to provisions of the Texas Banking Law, the rights of
shareholders of a Texas banking association who dissent from a
proposed merger are procedurally identical to those of shareholders
of a business corporation governed by the Texas Law. Accordingly, the rights
of shareholders of Citizens Bank, a Texas banking association, who
dissent from the Subsidiary Bank Merger are identical to the rights
of dissenting shareholders of Dalhart, a Texas corporation.
Pursuant to the Texas Law, a shareholder will be entitled to
receive the fair value of his or her shares of Citizens Bank Common
held immediately before the Subsidiary Bank Merger is consummated if
such shareholder: (i) files a written objection to the proposed
Subsidiary Bank Merger prior to the Citizens Bank Special Meeting;
(ii) does not vote his or her shares in favor of approving the
Subsidiary Merger Agreement; (iii) makes written demand on Citizens
Bank for payment of the fair value of his or her shares within ten
days after Boatmen's mails or delivers notice of consummation of the
Subsidiary Bank Merger; (iv) submits his or her certificates to
Boatmen's within 20 days of demanding payment for his or her shares
for notation thereon that such demand has been made; and (v) either
gives notice within 60 days of Boatmen's offer to accept that offer
or, within 120 days from the date of the Subsidiary Bank Merger,
files a petition with the appropriate court for an appraisal.
VALUE OF THE ACQUISITION
Based on the Dalhart Conversion Ratio (without adjustment as
provided in the Holding Company Merger Agreement) and the closing
sales price of Boatmen's Common as reported on the Nasdaq on
- ------------, 1994, the Holding Company Merger had a per share value
of $--------- to holders of Dalhart Common, and the approximate total
value of the Dalhart Merger Consideration (without adjustment as
provided in the Holding Company Merger Agreement) to Dalhart
shareholders, including the value of the Dalhart Escrow Shares, was
$------ million. Based on the Citizens Bank Conversion Ratio and the
closing sales price of Boatmen's Common as reported on the Nasdaq on
the same date, the Subsidiary Bank Merger had a per share value of
$---------- to holders of Citizens Bank Common, and the approximate
total value of the Citizens Bank Merger Consideration to the minority
shareholders of Citizens Bank (i.e., all Citizens Bank shareholders
other than Dalhart-Delaware), including the value of the Citizens
Bank Escrow Shares, was $----------. Based upon the foregoing, the
total value of the Acquisition, as of such date, was $---- million.
REASONS FOR THE ACQUISITION AND RECOMMENDATION
OF THE BOARDS OF DIRECTORS
The Boards of Directors of Dalhart and Citizens Bank have
determined that the Holding Company Merger and the Holding Company
Merger Agreement, including the Dalhart Conversion Ratio, and the
Subsidiary Bank Merger and the Subsidiary Merger Agreement, including
the Citizens Bank Conversion Ratio, are fair to, and in the best
interests of, Dalhart, Citizens Bank and their shareholders. The
Boards believe that a business combination with a larger and more
geographically diversified regional bank holding company would, in
addition to providing significant shareholder value to all
shareholders, enable Citizens Bank to compete more effectively in its
market area and participate in the expanded opportunities for growth
that the Holding Company Merger and the Subsidiary Bank Merger will
make possible. Accordingly, the Boards unanimously recommend that
shareholders of Dalhart and Citizens Bank vote for approval and
adoption of the Holding Company Merger Agreement and the Subsidiary
Merger Agreement.
The Board of Directors of Boatmen's believes that the
acquisition of Dalhart and the merger of its banking subsidiary,
Citizens Bank, into Boatmen's-Amarillo, would be a natural and
desirable addition to Boatmen's banking franchise in the Panhandle
of North Texas.
12
<PAGE> 22
MANAGEMENT AND OPERATIONS AFTER THE ACQUISITION
It is anticipated that, as of the Effective Time of the Holding
Company Merger or thereafter, the Subsidiary Bank Merger will be
consummated. Boatmen's-Amarillo will be the surviving bank in the
Subsidiary Bank Merger. Upon consummation of the Subsidiary Bank
Merger, the present offices of Citizens Bank in Dalhart, Childress
and Vega, Texas will operate as branch offices of Boatmen's-Amarillo.
The branch of Citizens Bank in Amarillo, Texas will also be operated
as a branch of Boatmen's-Amarillo upon consummation of the Subsidiary
Bank Merger; however, it is anticipated that such branch would
eventually be closed and that the business of such branch would be
consolidated with an existing branch of Boatmen's-Amarillo located
in Amarillo, Texas. It is not anticipated that the management of
Boatmen's, Boatmen's-Texas or Boatmen's-Amarillo will be affected as
a result of the Holding Company Merger or the Subsidiary Bank Merger.
ACCOUNTING TREATMENT
The Holding Company Merger and the Subsidiary Bank Merger are
expected to qualify as a "pooling of interests" for accounting and
financial reporting purposes. The receipt of an opinion from
Boatmen's independent accountants, confirming that the Merger and the
Subsidiary Bank Merger will qualify for "pooling of interests"
accounting, is a condition to Boatmen's obligation to consummate the
Holding Company Merger. If such condition is not met, the Holding
Company Merger would not be consummated unless the condition were
waived by Boatmen's and the approval of Dalhart shareholders entitled
to vote on the Holding Company Merger were resolicited if such change
in accounting treatment were deemed material to the financial
condition and results of operations of Boatmen's on a pro forma
basis.
EFFECTIVE TIME OF THE ACQUISITION
The Holding Company Merger Agreement provides that the Holding
Company Merger will become effective upon the filing of a Certificate
of Merger with the Secretary of State of the State of Missouri, and
the Subsidiary Merger Agreement provides that the Subsidiary Bank
Merger will become effective on the date specified in the merger
approval to be issued by the O.C.C. It is presently anticipated that
the Holding Company Merger and the Subsidiary Bank Merger will be
consummated contemporaneously during the fourth quarter of 1994, but
no assurance can be given that such timetable will be met.
INTERESTS OF CERTAIN PERSONS IN THE ACQUISITION
Certain members of Dalhart's and Citizens Bank's management and
Board of Directors have interests in the Holding Company Merger and
the Subsidiary Bank Merger that are in addition to the interests of
shareholders of Dalhart and Citizens Bank generally. These include
provisions in the Holding Company Merger Agreement relating to
indemnification and employee benefits.
FEDERAL INCOME TAX CONSEQUENCES
The Acquisition is intended to qualify as two tax-free
reorganizations so that no gain or loss would be recognized by
Boatmen's, Dalhart or Citizens Bank, and no gain or loss would be
recognized by Dalhart or Citizens Bank shareholders, except in
respect of cash received for fractional shares and except for any
cash payments which might be received by such shareholders properly
exercising their dissenters' rights. Consummation of the Holding
Company Merger is conditioned upon receipt by Boatmen's of
13
<PAGE> 23
an opinion of its counsel that, if the Holding Company Merger
is consummated in accordance with the terms set forth in the
Holding Company Merger Agreement and the Subsidiary Bank Merger is
consummated in accordance with the terms set forth in the Subsidiary
Merger Agreement and assuming no adverse change in applicable law
(i) the Holding Company Merger and Subsidiary Bank Merger will constitute
a reorganization within the meaning of Section 368(a) of the Internal
Revenue Code of 1986, as amended ("Code"), (ii) no gain or loss will be
recognized by the shareholders of Dalhart or Citizens Bank who receive
shares of Boatmen's Common, (iii) the basis of shares of Boatmen's Common
received by the shareholders of Dalhart or Citizens Bank will be the
same as the basis of shares of Dalhart Common or Citizens Bank Common
exchanged therefor, and (iv) the holding period of the shares of
Boatmen's Common received by such shareholders will include the
holding period of the shares of Dalhart Common or Citizens Bank
Common exchanged therefor.
The opinions will be predicated upon the facts set forth in
the Holding Company Merger Agreement, the Subsidiary Merger
Agreement, representations of each of Dalhart, Dalhart-Delaware,
Citizens Bank, Boatmen's, Boatmen's-Texas and Boatmen's-Amarillo.
Furthermore, the opinions will be based on the existing provisions
of the Code, currently applicable regulations promulgated under the
Code, current published administrative positions of the I.R.S. such
as revenue rulings and revenue procedures, and existing judicial
decisions, all of which are subject to change either prospectively
or retroactively. Any change in such authorities may adversely
affect the opinions. Counsel has no obligation to update the
opinions for any deletions or additions to or modification of any
law applicable to the Holding Company Merger or the Subsidiary Bank
Merger.
The opinions will reflect the legal judgment of counsel solely
on the issues presented and discussed therein. The issues in this
matter are complex. There are no published cases, rulings,
regulations or administrative positions to support the opinions
with respect to the Subsidiary Bank Merger. Accordingly, there can
be no assurance that the I.R.S. will agree with the opinions
expressed, nor can there be assurance that a court of competent
jurisdiction will agree with such opinions.
IT IS RECOMMENDED THAT SHAREHOLDERS CONSULT THEIR OWN TAX
ADVISORS REGARDING THE FEDERAL, STATE AND FOREIGN INCOME TAX
CONSEQUENCES TO THEM OF THE HOLDING COMPANY MERGER AND/OR THE
SUBSIDIARY BANK MERGER AND ANY OTHER TAX CONSIDERATIONS WHICH
MAY BE APPLICABLE TO THEM.
COMPARISON OF SHAREHOLDER RIGHTS
The rights of the shareholders of Dalhart Common, Citizens Bank
Common and Boatmen's Common differ in certain respects. The rights
of the shareholders of Dalhart and Citizens Bank who receive shares
of Boatmen's Common in the Holding Company Merger and the Subsidiary
Bank Merger will be governed by the corporate law of Missouri, the
state in which Boatmen's is incorporated, and by Boatmen's Articles
of Incorporation, Bylaws and other corporate documents. The
governing law and documents of Boatmen's differ from those which
apply to Dalhart, which is a Texas corporation, and from those which
apply to Citizens Bank, which is a Texas banking association, in
several respects, including relative rights in connection with
certain redeemable preferred stock of Boatmen's presently issued and
outstanding; the shareholder votes required for certain business
combinations; removal of directors and amendments to the Articles of
Incorporation; certain rights pursuant to Boatmen's shareholder
rights plan; the circumstances under which a shareholder may dissent
from corporate action and receive fair value for his or her shares;
and rights of Boatmen's and its shareholders pursuant to certain
corporate takeover statutes.
14
<PAGE> 24
<TABLE>
COMPARATIVE STOCK PRICES
Shares of Boatmen's Common are traded in the over-the-counter
market and are listed on Nasdaq under the symbol BOAT. The following
table sets forth the high and low last sale prices of Boatmen's
Common for the periods indicated, as reported on Nasdaq. The
Boatmen's per share prices have been restated to reflect Boatmen's
2-for-1 stock split effected in the form of a 100% stock dividend
effective on October 1, 1993 (the "Stock Split"). There is no established
public trading market for Dalhart Common or Citizens Bank Common.
<CAPTION>
Boatmen's Dalhart Citizens Bank
Common Stock Common Stock Common Stock
--------------- --------------- ---------------
High Low High Low High Low
---- --- ---- --- ---- ---
<S> <C> <C> <C> <C> <C> <C>
1992 First Quarter . . . . $24.19 $21.19 * * * *
Second Quarter. . . . 25.63 21.44 * * * *
Third Quarter . . . . 26.63 25.00 * * * *
Fourth Quarter. . . . 28.25 24.75 * * * *
1993 First Quarter . . . . 30.50 26.88 * * * *
Second Quarter. . . . 32.50 27.25 * * * *
Third Quarter . . . . 32.38 29.19 * * * *
Fourth Quarter. . . . 33.50 27.50 * * * *
1994 First Quarter . . . . 30.50 26.75 * * * *
Second Quarter. . . . 35.00 28.88 * * * *
Third Quarter . . . . ----- ----- * * * *
Fourth Quarter
(through ______). . ----- ----- --- --- --- ---
<FN>
- -------------------------------------------
* Management of Dalhart and Citizens Bank are not aware of any sales
of shares of Dalhart Common or Citizens Common during the past three-year
period. The most recent transaction reported to management of Dalhart
involving shares of Dalhart Common took place on September 12, 1988, at a
price per share of $52.18, and the most recent transaction reported to
management of Citizens Bank involving shares of Citizens Bank Common took
place on March 7, 1989, at a price per share of $321.49.
</TABLE>
On May 18, 1994, the last trading day before the announcement of the
proposed Holding Company Merger, the closing sale price of Boatmen's Common
as reported on Nasdaq was $34.00 per share. On such date, the equivalent
per share price for Dalhart Common, which is calculated by multiplying the
specified closing sale price of Boatmen's Common by the Dalhart Conversion
Ratio, without any adjustment, was $216.24, and the equivalent per share
price for Citizens Bank Common, which is calculated by multiplying the
specified closing sale price of Boatmen's Common by the Citizens Bank
Conversion Ratio, was $1,199.66.
On ----------, 1994, the closing sale prices of Boatmen's Common as
reported on Nasdaq was $------ per share, the equivalent per share price
for Dalhart Common was $--------, and the equivalent per share price for
Citizens Bank was $--------. On such date there were approximately
- ---------- holders of record of Boatmen's Common, 32 holders of record of
Dalhart Common and 12 holders of record of Citizens Bank Common.
15
<PAGE> 25
SELECTED COMPARATIVE PER SHARE DATA(1)
(unaudited)
The following summary presents comparative historical, pro forma and pro
forma equivalent unaudited per share data for Boatmen's, Dalhart and
Citizens Bank. The pro forma amounts also give effect to the pending
acquisition of Worthen. See "PRO FORMA FINANCIAL DATA." The pro forma
amounts assume the Acquisition had been effective during the periods
presented and has been accounted for under the pooling of interests method.
For a description of pooling of interests accounting with respect to the
Acquisition, see "THE ACQUISITION--Accounting Treatment." The amounts
designated "Pro Forma Combined Per Boatmen's Share" represent the pro forma
results of the Acquisition, the amounts designated "Equivalent Pro Forma
Per Dalhart Share" are computed by multiplying the Pro Forma Combined Per
Boatmen's Share amounts by a factor of 6.3599 to reflect the Dalhart
Conversion Ratio (which equals 6.3599 shares of Boatmen's Common for each
share of Dalhart Common, subject to adjustment) (see "THE ACQUISITION--The
Holding Company Merger--Dalhart Conversion Ratio") and the amounts
designated "Equivalent Pro Forma Per Citizens Bank Share" are computed by
multiplying the Pro Forma Combined Per Boatmen's Share amounts by a factor
of 35.2840 to reflect the Citizens Bank Conversion Ratio (which equals
35.2840 shares of Boatmen's Common for each share of Citizens Bank Common,
subject to adjustment) (see "THE ACQUISITION--The Subsidiary Bank
Merger--Citizens Bank Conversion Ratio.") The data presented should be
read in conjunction with the historical financial statements and the
related notes thereto included herein or incorporated by reference herein,
and the pro forma financial statements included elsewhere in this Joint
Proxy Statement/Prospectus. See "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE," "FINANCIAL STATEMENTS OF DALHART," and "FINANCIAL STATEMENTS OF
CITIZENS BANK."
<TABLE>
<CAPTION>
Six Months Ended June 30, Year Ended December 31,
------------------------- -----------------------
1994 1993 1993 1992 1991
---- ---- ---- ---- ----
NET INCOME PER COMMON SHARE:
<S> <C> <C> <C> <C> <C>
Historical
Boatmen's. . . . . . . . . . $1.66 $1.54 $3.07 $2.29 $1.77
Dalhart. . . . . . . . . . . 8.44 11.24 24.44 14.72 12.57
Citizens Bank. . . . . . . . 46.55 67.80 140.40 87.70 72.20
Pro forma combined per
Boatmen's share. . . . . . . 1.62 1.45 2.91 2.25 1.78
Equivalent pro forma
per Dalhart share . . . . . 10.30 9.22 18.51 14.31 11.32
Equivalent pro forma
per Citizens Bank share. . . 57.16 51.16 102.68 79.39 62.81
DIVIDENDS PER COMMON SHARE:
Historical
Boatmen's. . . . . . . . . . $0.62 $0.56 $1.15 $1.09 $1.07
Dalhart. . . . . . . . . . . --- 7.50 7.50 --- 3.25
Citizens Bank. . . . . . . . 4.60 --- 28.75 22.50 27.50
Pro forma combined per
Boatmen's share (2). . . . . 0.62 0.56 1.15 1.09 1.07
Equivalent pro forma
per Dalhart share (3). . . . 3.94 3.56 7.31 6.93 6.81
Equivalent pro forma
per Citizens Bank share (4). 21.88 19.76 40.58 38.46 37.75
</TABLE>
16
<PAGE> 26
<TABLE>
<CAPTION>
Six Months Ended June 30, Year Ended December 31,
----------------------------------------------------
1994 1993 1993 1992 1991
------------------------------------------------
BOOK VALUE PER COMMON SHARE
(PERIOD END):
<S> <C> <C> <C> <C> <C>
Historical
Boatmen's. . . . . . . . . . $ 20.75 $ 19.18 $ 20.49 $ 18.20 $ 16.94
Dalhart. . . . . . . . . . . 132.07 113.47 126.66 109.72 95.00
Citizens Bank. . . . . . . . 651.95 582.40 626.25 514.60 449.40
Pro forma combined per
Boatmen's share. . . . . . . 20.20 18.61 19.89 17.66 16.30
Equivalent pro forma
per Dalhart share . . . . . 128.47 118.36 126.50 112.32 103.67
Equivalent pro forma
per Citizens Bank share. . . 712.74 656.64 701.80 623.12 575.13
<FN>
- --------------
(1) Reflects restatement of Boatmen's share amounts to give effect to the
Stock Split on October 1, 1993.
(2) Boatmen's pro forma dividends per share represent historical dividends
per share paid by Boatmen's.
(3) Represents historical dividends per share paid by Boatmen's multiplied
by the Dalhart Conversion Ratio, without adjustment.
(4) Represents historical dividends per share paid by Boatmen's multiplied
by the Citizens Bank Conversion Ratio.
</TABLE>
17
<PAGE> 27
SELECTED FINANCIAL DATA
The following tables present selected consolidated historical
financial data for Boatmen's, selected consolidated unaudited historical
financial data for Dalhart, selected unaudited historical financial data
for Citizens Bank and unaudited pro forma combined amounts reflecting the
Acquisition. The pro forma amounts assume the Acquisition had been
effective during the periods presented. The data presented are derived
from the consolidated financial statements of Boatmen's and Dalhart and
the financial statements of Citizens Bank and should be read in
conjunction with the more detailed information and financial statements
included herein or incorporated by reference in this Joint Proxy
Statement/Prospectus. The data should also be read in conjunction with
the unaudited pro forma financial statements included elsewhere in this
Joint Proxy Statement/Prospectus. See "INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE," "PRO FORMA FINANCIAL DATA," "FINANCIAL STATEMENTS OF
DALHART," and "FINANCIAL STATEMENTS OF CITIZENS BANK."
<TABLE>
BOATMEN'S BANCSHARES, INC.(1)
SELECTED FINANCIAL DATA
(UNAUDITED)
<CAPTION>
Six Months Ended June 30, Year Ended December 31,
------------------------- ------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
(income statement amounts in thousands except per share
data and balance sheet amounts in millions)
Summarized Income Statement:
- ---------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Interest Income. . . . . . . $505,137 $479,591 $981,580 $877,716 $742,532 $655,801 $629,603
Provision for Loan Losses. . . . 13,006 35,291 60,184 136,626 114,658 119,448 93,248
Noninterest Income . . . . . . . 259,857 234,596 493,251 452,082 355,704 297,002 276,899
Noninterest Expense. . . . . . . 487,117 448,318 950,421 871,928 752,367 651,962 605,426
Income Tax Expense . . . . . . . 91,245 71,609 146,807 92,518 60,013 36,363 43,695
Net Income . . . . . . . . . . . 173,626 158,969 317,419 228,726 171,198 145,030 164,133
Per Common Share Data(2):
- ------------------------
Net Income . . . . . . . . . . . $1.66 $1.54 $3.07 $2.29 $1.77 $1.58 $1.81
Cash Dividends Paid. . . . . . . 0.62 0.56 1.15 1.09 1.07 1.06 1.02
Stockholders' Equity
(period end) . . . . . . . . . 20.75 19.18 20.49 18.20 16.94 15.84 15.42
Financial Position at Period End:
- --------------------------------
Loans, Net of Unearned Income $15,701 $14,215 $14,826 $13,111 $12,316 $11,924 $11,593
Total Assets . . . . . . . . . . 27,583 25,502 26,654 24,281 23,003 22,795 19,541
Deposits . . . . . . . . . . . . 20,243 20,487 20,909 19,685 18,060 18,119 14,964
Long-Term Debt . . . . . . . . . 514 471 486 393 316 285 295
Stockholders' Equity . . . . . . 2,173 1,989 2,133 1,861 1,680 1,463 1,396
Selected Financial Ratios:
- -------------------------
Return on Average Assets . . . . 1.29% 1.31% 1.27% 0.99% 0.79% 0.73% 0.86%
Return on Average Common
Equity(3). . . . . . . . . . . 16.11 16.50 15.99 12.95 10.78 10.13 12.06
Net Interest Margin. . . . . . . 4.33 4.58 4.56 4.40 4.05 3.96 4.03
Nonperforming Assets as % of
Total Loans and Foreclosed
Property(4). . . . . . . . . . 1.58 2.28 1.90 2.92 3.92 3.93 3.38
Nonperforming Loans as % of Total
Loans. . . . . . . . . . . . . 0.91 1.33 1.17 1.96 2.54 3.18 2.67
Loan Reserve as % of Net Loans 2.19 2.32 2.30 2.30 2.05 1.92 1.71
Net Charge-Offs as % of Average
Loans. . . . . . . . . . . . . 0.15 0.21 0.24 0.80 0.84 0.76 1.00
Equity to Assets . . . . . . . . 7.88 7.80 8.00 7.67 7.30 6.42 7.14
Tangible Equity to Assets(5) . . 7.00 6.78 7.04 6.88 6.56 5.73 6.46
Tier 1 Risk-Based Capital(6) . . 10.53 10.47 10.67 10.39 10.10 --- ---
Total Risk-Based Capital(6). . . 14.07 14.38 14.42 13.75 13.17 --- ---
<FN>
- ---------------------------
(1) The information set forth in this table does not give effect to
the pending acquisitions of other financial institutions. See
"THE PARTIES -- Boatmen's Bancshares, Inc. -- Pending
Acquisitions."
(2) Reflects restatement of share amounts for the Stock Split
on October 1, 1993.
(3) Based on net income available to common shareholders.
(4) Nonperforming assets include nonaccrual loans, restructured
loans, loans past due 90 days or more and foreclosed property.
(5) Tangible equity to assets is defined as total equity less all
intangibles as a percentage of total tangible assets.
(6) Calculated using final 1992 risk based guidelines.
</TABLE>
18
<PAGE> 28
<TABLE>
DALHART BANCSHARES, INC.
SELECTED FINANCIAL DATA
(UNAUDITED)
<CAPTION>
Six Months Ended June 30, Year Ended December 31,
-------------------------- --------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
(income statement amounts in thousands except per share
data and balance sheet amounts in millions)
Summarized Income Statement:
- ---------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Interest Income $3,172 $3,113 $6,485 $5,257 $4,251 $3,751 $3,721
Provision for Loan Losses --- (400) (522) --- --- --- 143
Noninterest Income 320 289 718 578 492 356 409
Noninterest Expense 2,349 2,095 4,305 3,517 2,973 2,424 2,485
Minority Interest 64 93 192 120 99 95 80
Income Tax Expense 235 490 784 726 414 440 414
Net Income 844 1,124 2,444 1,472 1,257 1,148 1,008
Per Common Share Data:
- ---------------------
Net Income $8.44 $11.24 $24.44 $14.72 $12.57 $11.48 $10.08
Cash Dividends Paid --- 7.50 7.50 --- 3.25 --- ---
Stockholders' Equity (period end): 132.07 113.47 126.66 109.72 95.00 85.68 74.27
Financial Position at Period End:
- --------------------------------
Loans, Net of Unearned Income $63 $66 $81 $61 $54 $44 $44
Total Assets 132 153 150 130 125 105 92
Deposits 116 117 128 103 106 87 81
Long-Term Debt --- --- --- --- --- --- ---
Stockholders' Equity 13 11 13 11 10 9 7
Selected Financial Ratios:
- -------------------------
Return on Average Assets 1.21% 1.63% 1.69% 1.28% 1.18% 1.29% 1.13%
Return on Average Equity 12.90 20.55 21.14 14.31 14.27 15.15 12.49
Net Interest Margin 5.34 5.24 5.26 5.31 4.69 4.71 4.70
Nonperforming Assets as % of
Total Loans and Foreclosed
Property(1) 0.08 0.03 0.23 --- 0.01 0.42 1.79
Nonperforming Loans as % of
Total Loans 0.08 0.03 0.23 --- 0.01 0.42 1.79
Loan Reserve as % of Net Loans 1.41 1.66 1.09 2.43 2.56 2.97 2.04
Net Charge-Offs (recoveries) as % of
Average Loans (0.04) (0.04) 0.12 (0.17) (0.16) (0.98) 0.37
Equity to Assets 9.99 7.44 8.43 8.45 8.45 8.15 8.11
Tangible Equity to Assets(2) 8.47 5.99 7.03 7.15 6.19 6.72 6.40
Tier 1 Risk-Based Capital(3) 14.49 9.92 11.24 12.99 11.81 12.70 10.62
Total Risk-Based Capital(3) 15.55 11.14 12.12 14.25 13.07 13.97 11.87
<FN>
- ---------------------------
(1) Nonperforming assets include nonaccrual loans, restructured loans,
loans past due 90 days or more and foreclosed property.
(2) Tangible equity to assets is defined as total equity less all
intangibles as a percentage of total tangible assets.
(3) Calculated using final 1992 risk based guidelines.
</TABLE>
19
<PAGE> 29
<TABLE>
CITIZENS STATE BANK OF DALHART
SELECTED FINANCIAL DATA
(UNAUDITED)
<CAPTION>
Six Months Ended June 30, Year Ended December 31,
-------------------------- --------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
(income statement amounts in thousands except per share
data and balance sheet amounts in millions)
Summarized Income Statement:
- ---------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Interest Income $3,189 $3,138 $6,523 $5,269 $4,282 $3,813 3,858
Provision for Loan Losses --- (400) (522) --- --- --- 143
Noninterest Income 320 289 718 578 492 356 343
Noninterest Expense 2,297 1,981 4,171 3,367 2,916 2,336 2,404
Income Tax Expense 281 490 784 726 414 440 486
Net Income 931 1,356 2,808 1,754 1,444 1,393 1,168
Per Common Share Data:
- ---------------------
Net Income $46.55 $67.80 $140.40 $87.70 $72.20 $69.65 $58.40
Cash Dividends Paid 4.60 --- 28.75 22.50 27.50 30.00 74.40
Stockholders' Equity (period end): 651.95 582.40 626.25 514.60 449.40 404.80 365.45
Financial Position at Period End:
- --------------------------------
Loans, Net of Unearned Income $63 $66 $81 $61 $54 $44 $44
Total Assets 131 151 149 129 123 104 90
Deposits 116 117 128 103 106 87 81
Long-Term Debt --- --- --- --- --- --- ---
Stockholders' Equity 13 12 13 10 9 8 7
Selected Financial Ratios:
- -------------------------
Return on Average Assets 1.35% 1.98% 1.97% 1.54% 1.37% 1.59% 1.33%
Return on Average Equity 14.36 25.26 24.70 18.20 17.45 18.29 16.12
Net Interest Margin 5.36 5.27 5.29 5.32 4.72 4.88 4.78
Nonperforming Assets as % of
Total Loans and Foreclosed
Property(1) 0.08 0.03 0.23 --- 0.01 0.42 1.79
Nonperforming Loans as % of
Total Loans 0.08 0.03 0.23 --- 0.01 0.42 1.79
Loan Reserve as % of Net Loans 1.41 1.57 1.09 2.43 2.56 3.00 2.07
Net Charge-Offs (recoveries) as % of
Average Loans (0.04) (0.04) 0.12 (0.17) (0.16) (0.98) 0.37
Equity to Assets 9.97 7.71 8.42 8.01 7.28 7.82 8.12
Tangible Equity to Assets(2) 9.39 7.13 7.87 7.74 6.96 7.75 8.03
Tier 1 Risk-Based Capital(3) 14.90 11.87 11.63 13.05 12.26 13.57 12.26
Total Risk-Based Capital(3) 15.95 13.08 12.50 14.31 13.52 14.84 13.51
<FN>
- ---------------------------
(1) Nonperforming assets include nonaccrual loans, restructured loans, loans past
due 90 days or more and foreclosed property.
(2) Tangible equity to assets is defined as total equity less all intangibles as
a percentage of total tangible assets.
(3) Calculated using final 1992 risk based guidelines.
</TABLE>
20
<PAGE> 30
<TABLE>
BOATMEN'S BANCSHARES, INC.
AND
DALHART BANCSHARES, INC.
PRO FORMA COMBINED SELECTED FINANCIAL DATA(1)
(UNAUDITED)
<CAPTION>
Six Months Ended June 30, Year Ended December 31,
-------------------------- -----------------------------
1994 1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
(income statement amounts in thousands except per share
data and balance sheet amounts in millions)
Summarized Income Statement:
- ---------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net Interest Income . . . . . . . . . . . $578,714 $547,573 $1,120,883 $1,013,161 $855,746 $758,146 $726,399
Provision for Loan Losses . . . . . . . . 13,759 38,130 64,290 139,475 118,017 125,662 103,938
Noninterest Income. . . . . . . . . . . . 295,471 272,348 560,560 510,118 409,546 341,643 317,828
Noninterest Expense . . . . . . . . . . . 556,808 528,605 1,102,117 1,019,715 881,745 765,993 716,295
Income Tax Expense. . . . . . . . . . . . 105,319 78,534 162,923 99,954 64,339 39,248 45,325
Net Income. . . . . . . . . . . . . . . . 198,299 174,652 352,113 264,135 201,191 168,886 178,669
Per Common Share Data(2):
- ------------------------
Net Income. . . . . . . . . . . . . . . . $1.62 $1.45 $2.91 $2.25 $1.78 $1.57 $1.69
Cash Dividends Paid . . . . . . . . . . . 0.62 0.56 1.15 1.09 1.07 1.06 1.02
Stockholders' Equity (period end) 20.20 18.61 19.89 17.66 16.30 15.07 14.50
Financial Position at Period End:
- --------------------------------
Loans, Net of Unearned Income . . . . . . $17,546 $15,875 $16,619 $14,770 $13,831 $13,649 $13,071
Total Assets. . . . . . . . . . . . . . . 31,243 29,129 30,383 27,880 26,268 25,754 22,053
Deposits. . . . . . . . . . . . . . . . . 23,327 23,555 24,080 22,826 20,932 20,695 17,159
Long-Term Debt. . . . . . . . . . . . . . 557 514 530 430 344 317 335
Stockholders' Equity. . . . . . . . . . . 2,480 2,254 2,423 2,113 1,880 1,636 1,547
Selected Financial Ratios:
- -------------------------
Return on Average Assets 1.29% 1.25% 1.23% 0.99% 0.82% 0.76% 0.83%
Return on Average Common
Equity (3). . . . . . . . . . . . . . . 16.16 15.96 15.61 13.21 11.34 10.60 11.92
Net Interest Margin . . . . . . . . . . . 4.35 4.54 4.52 4.38 4.04 4.01 4.08
Nonperforming Assets as % of
Total Loans and Foreclosed
Property (4). . . . . . . . . . . . . . 1.51 2.20 1.84 2.79 3.73 3.75 3.41
Nonperforming Loans as % of
Total Loans . . . . . . . . . . . . . . 0.91 1.31 1.16 1.88 2.44 3.00 2.68
Loan Reserve as % of Net Loans. . . . . . 2.16 2.30 2.26 2.26 2.06 1.92 1.78
Net Charge-Offs as % of Average
Loans . . . . . . . . . . . . . . . . . 0.14 0.19 0.23 0.75 0.77 0.73 0.97
Equity to Assets. . . . . . . . . . . . . 7.94 7.74 7.97 7.58 7.16 6.35 7.01
Tangible Equity to Assets (5) . . . . . . 7.07 6.77 7.04 6.80 6.44 5.69 6.35
Tier 1 Risk-Based Capital (6) . . . . . . 10.82 10.68 10.90 10.55 10.12 --- ---
Total Risk-Based Capital (6). . . . . . . 14.13 14.33 14.37 13.73 13.05 --- ---
<FN>
- ---------------------------
(1) The information set forth in this table gives effect to the
pending acquisition of Worthen Banking Corporation which was
announced on August 18, 1994. See "PRO FORMA FINANCIAL DATA".
(2) Reflects restatement of share amounts for the Stock Split on
October 1, 1993.
(3) Based on net income available to common shareholders.
(4) Nonperforming assets include nonaccrual loans, restructured
loans, loans past due 90 days or more and foreclosed property.
(5) Tangible equity to assets is defined as total equity less all
intangibles as a percentage of total tangible assets.
(6) Calculated using final 1992 risk based guidelines.
</TABLE>
21
<PAGE> 31
THE SPECIAL MEETINGS
THE DALHART SPECIAL MEETING (APPLICABLE TO DALHART SHAREHOLDERS)
DATE, TIME AND PLACE OF DALHART SPECIAL MEETING
This Joint Proxy Statement/Prospectus is being furnished to
shareholders of Dalhart in connection with the solicitation of
proxies by the Board of Directors of Dalhart for use at the Dalhart
Special Meeting to be held at the offices of Citizens Bank at
323 Denver Avenue, Dalhart, Texas 79022 on ------------, 1994, at
- ------------, local time, and at any adjournment or postponement
thereof.
MATTERS TO BE CONSIDERED AT THE DALHART SPECIAL MEETING
At the Dalhart Special Meeting, the shareholders of Dalhart will
be asked to approve the Holding Company Merger Agreement providing
for, among other matters, the merger of Dalhart with and into
Boatmen's-Texas.
RECORD DATE FOR DALHART SPECIAL MEETING
The Board of Directors of Dalhart has fixed the close of business
on ------------, 1994, as the record date for the determination of
holders of common stock, par value $10.00 per share, of Dalhart
("Dalhart Common") to receive notice of and to vote at the Dalhart
Special Meeting. On the record date, there were 100,000 shares of
Dalhart Common outstanding. Only holders of shares of Dalhart Common
of record on the record date are entitled to vote at the Dalhart
Special Meeting. No shares of Dalhart Common can be voted at the
Dalhart Special Meeting unless the record holder is present in person
or represented by proxy at the Dalhart Special Meeting.
VOTE REQUIRED TO APPROVE THE HOLDING COMPANY MERGER AGREEMENT
The affirmative vote of a majority of the outstanding shares of
Dalhart Common entitled to vote thereon is required to approve the
Holding Company Merger Agreement. Each holder of Dalhart Common is
entitled to one vote per share of Dalhart Common. As of the record
date, the directors and executive officers of Dalhart and their
affiliates have the power to vote a total of 86,083 shares of Dalhart
Common, or approximately eighty-six percent (86%) of the shares
outstanding, which are expected to be voted in favor of the Holding
Company Merger Agreement. For information regarding the shares of
Dalhart Common beneficially owned, directly or indirectly, by certain
shareholders, by each director and executive officer of Dalhart, and
by all directors and officers of Dalhart as a group, see "INFORMATION
ABOUT DALHART AND CITIZENS BANK -- Security Ownership of Certain
Beneficial Owners and Management of Dalhart." As of the record date,
directors and executives officers of Boatmen's did not own
beneficially any shares of Dalhart Common.
22
<PAGE> 32
VOTING AND REVOCATION OF PROXIES FOR DALHART SPECIAL MEETING
Proxies for use at the Dalhart Special Meeting accompany this
Joint Proxy Statement/Prospectus. A shareholder may use his or her
proxy if he or she is unable to attend the Dalhart Special Meeting in
person or wishes to have his or her shares voted by proxy even if he
or she does attend the Dalhart Special Meeting. Shares of Dalhart
Common represented by a proxy properly signed and returned to Dalhart
at, or prior to, the Dalhart Special Meeting, unless subsequently
revoked, will be voted at the Dalhart Special Meeting in accordance
with instructions thereon. If a proxy is properly signed and
returned and the manner of voting is not indicated on the proxy, any
shares of Dalhart Common represented by such proxy will be voted FOR
the Holding Company Merger Agreement. Any proxy given pursuant to
this solicitation may be revoked by the grantor at any time prior to
the voting thereof on the Holding Company Merger Agreement by filing
with the Secretary of Dalhart a written revocation or a duly executed
proxy bearing a later date. A holder of Dalhart Common may withdraw
his or her proxy at the Dalhart Special Meeting at any time before it
is exercised by electing to vote in person; however, attendance at
the Dalhart Special Meeting will not in and of itself constitute a
revocation of the proxy.
SOLICITATION OF PROXIES FOR THE DALHART SPECIAL MEETING
In addition to solicitation of proxies from shareholders of
Dalhart Common by use of the mail, proxies also may be solicited by
personal interview, telephone and wire by directors, officers and
employees of Dalhart, who will not be specifically compensated for
such services. All costs of soliciting proxies, assembling and
mailing the Joint Proxy Statement/Prospectus and all papers which now
accompany or hereafter may supplement the same will be borne by
Dalhart.
THE CITIZENS BANK SPECIAL MEETING (APPLICABLE TO CITIZENS BANK
SHAREHOLDERS)
DATE, TIME AND PLACE OF CITIZENS BANK SPECIAL MEETING
This Joint Proxy Statement/Prospectus is being furnished to
shareholders of Citizens Bank in connection with the solicitation of
proxies by the Board of Directors of Citizens Bank for use at the
Citizens Bank Special Meeting to be held at the offices of Citizens
Bank at 323 Denver Avenue, Dalhart, Texas 79022 on ------------,
1994, at ------------, local time, and at any adjournment or
postponement thereof.
MATTERS TO BE CONSIDERED AT THE CITIZENS BANK SPECIAL MEETING
At the Citizens Bank Special Meeting, the shareholders of
Citizens Bank will be asked to approve the Subsidiary Merger
Agreement providing for the merger of Citizens Bank with and into
Boatmen's-Amarillo.
RECORD DATE FOR CITIZENS BANK SPECIAL MEETING
The Board of Directors of Citizens Bank has fixed the close of
business on ------------, 1994, as the record date for the
determination of shareholders of Citizens Bank Common to receive
notice of and to vote at the Citizens Bank Special Meeting. On the
record date, there were 20,000 shares of Citizens Bank
23
<PAGE> 33
Common outstanding. Only holders of shares of common stock, par value
$100.00 per share, of Citizens Bank ("Citizens Bank Common") of
record on the record date are entitled to vote at the Citizens Bank
Special Meeting. No shares of Citizens Bank Common can be voted at
the Citizens Bank Special Meeting unless the record holder is present
in person or represented by proxy at the Citizens Bank Special
Meeting.
VOTE REQUIRED TO APPROVE THE SUBSIDIARY MERGER AGREEMENT
The affirmative vote of two-thirds (2/3) of the outstanding
shares of Citizens Bank Common entitled to vote thereon is required
to approve the Subsidiary Merger Agreement. Each holder of Citizens
Bank Common is entitled to one vote per share of Citizens Bank
Common. As of the record date for the Citizens Bank Special Meeting,
Dalhart-Delaware, a wholly-owned subsidiary of Dalhart, and executive
officers and directors of Citizens Bank and their affiliates held
18,943 or 94.72 percent, of the outstanding shares of Citizens Bank
Common. Accordingly, even without the vote of the remaining Citizens
Bank shareholders, Dalhart will have the ability to effectuate the
Subsidiary Bank Merger. For information regarding the shares of
Citizens Bank Common beneficially owned, directly or indirectly, by
certain shareholders, by each director and executive officer of
Citizens Bank, and by all directors and officers of Citizens Bank as
a group, see "INFORMATION ABOUT DALHART AND CITIZENS BANK -- Security
Ownership of Certain Beneficial Owners and Management of Citizens
Bank." As of the record date, directors and executive officers of
Boatmen's did not own beneficially any shares of Citizens Bank
Common.
VOTING AND REVOCATION OF PROXIES FOR CITIZENS BANK SPECIAL
MEETING
Proxies for use at the Citizens Bank Special Meeting accompany
this Joint Proxy Statement/Prospectus. A shareholder may use his or
her proxy if he or she is unable to attend the Citizens Bank Special
Meeting in person or wishes to have his or her shares voted by proxy
even if he or she does attend the Citizens Bank Special Meeting.
Shares of Citizens Bank Common represented by a proxy properly signed
and returned to Citizens Bank at, or prior to, the Citizens Bank
Special Meeting, unless subsequently revoked, will be voted at the
Citizens Bank Special Meeting in accordance with instructions
thereon. If a proxy is properly signed and returned and the manner
of voting is not indicated on the proxy, any shares of Citizens Bank
Common represented by such proxy will be voted FOR the Subsidiary
Merger Agreement. Any proxy given pursuant to this solicitation may
be revoked by the grantor at any time prior to the voting thereof on
the Subsidiary Merger Agreement by filing with the Secretary of
Citizens Bank a written revocation or a duly executed proxy bearing
a later date. A holder of Citizens Bank Common may withdraw his or
her proxy at the Citizens Bank Special Meeting at any time before it
is exercised by electing to vote in person; however, attendance at
the Citizens Bank Special Meeting will not in and of itself
constitute a revocation of the proxy.
SOLICITATION OF PROXIES FOR THE CITIZENS BANK SPECIAL MEETING
In addition to solicitation of proxies from shareholders of
Citizens Bank Common by use of the mail, proxies also may be
solicited by personal interview, telephone and wire by directors,
officers and employees of Citizens Bank, who will not be specifically
compensated for such services. All costs of soliciting proxies,
assembling and mailing the Joint Proxy Statement/Prospectus and all
papers which now accompany or hereafter may supplement the same will
be borne by Citizens Bank.
24
<PAGE> 34
EXPENSES FOR PREPARATION OF JOINT PROXY STATEMENT/PROSPECTUS
Boatmen's and Dalhart have agreed to share in the expense of
preparation of this Joint Proxy Statement/Prospectus, and Boatmen's
will bear the entire cost of printing this Joint Proxy
Statement/Prospectus and all S.E.C. and other regulatory filing fees
incurred in connection therewith.
MAILING DATE OF JOINT PROXY STATEMENT/PROSPECTUS
This Joint Proxy Statement/Prospectus, the attached notices of
Special Meeting and the enclosed proxy cards are first being sent to
shareholders of Dalhart and Citizens Bank on or about ------------,
1994.
THE PARTIES
BOATMEN'S BANCSHARES, INC.
General
Boatmen's is a multi-bank holding company headquartered in
St. Louis, Missouri. Its largest subsidiary, The Boatmen's National
Bank of St. Louis, was founded in 1847 and is the oldest bank west of
the Mississippi River. Boatmen's owns substantially all of the
capital stock of 49 subsidiary banks, including a federal savings
bank, which operate from over 400 banking locations in Missouri,
Arkansas, Illinois, Iowa, Kansas, New Mexico, Oklahoma, Tennessee and
Texas. Boatmen's other principal businesses include a trust company,
a mortgage banking company, a credit life insurance company, a credit
card bank and an insurance agency. At June 30, 1994, Boatmen's had
consolidated assets of $27.6 billion and total shareholders' equity
of $2.2 billion, making it one of the 30 largest bank holding
companies in the United States.
Boatmen's is among the sixteen largest providers of personal
trust services in the nation, providing personal trust services
primarily within its banks' market areas and institutional and
pension-related trust services on a national scale. Operating
principally through Boatmen's Trust Company, its subsidiaries and
trust departments of selected banks, the combined trust operations
had assets under management totaling approximately $34.2 billion at
June 30, 1994. The trust operations, with revenues in 1993 of
$152.2 million, provide Boatmen's with a significant source of
noninterest income.
Pending Acquisitions
National Mortgage Company. On July 7, 1994, Boatmen's entered into
-------------------------
an Agreement to acquire National Mortgage Company, headquartered in
Memphis, Tennessee. National Mortgage Company is a privately-owned, full
service mortgage banking company which originates home loans thorough 10
company-operated offices as well as through a network of over 300
correspondent locations located in Southern and Midwestern parts of
the United States. National Mortgage Company's 1993 originations
totalled $1.7 billion and its loan servicing portfolio was
approximately $13.1 billion at May 1, 1994. Under the terms of the
Agreement, Boatmen's would exchange approximately five million shares
of the common stock, par value $1.00 per share of Boatmen's
("Boatmen's Common") for all of the stock of National Mortgage
Company's parent corporations and affiliated entities. The shares of
Boatmen's Common to be issued in connection with the acquisition of
National Mortgage Company constitute less than five percent (5%) of
the outstanding shares of Boatmen's Common. When combined with
Boatmen's existing servicing portfolio, Boatmen's will rank among the 30
25
<PAGE> 35
largest mortgage companies in the country. The acquisition, which
is subject to, among other things, approval of the shareholders of
National Mortgage Company's parent corporations and regulatory
authorities, is expected to be completed in the fourth quarter of
1994. There can be no assurance that the transaction will be
consummated. Neither the Holding Company Merger nor the Subsidiary
Bank Merger are conditioned upon consummation of the National
Mortgage Company acquisition.
Worthen Banking Corporation. On August 18, 1994, Boatmen's entered
---------------------------
into an Agreement and Plan of Merger (the "Worthen Agreement") to acquire
Worthen Banking Corporation, the second largest banking organization in
Arkansas. Worthen is a publicly-held, multi-bank holding company
headquartered in Little Rock, Arkansas, operating 112 retail banking
offices throughout the State of Arkansas and six offices in the Austin,
Texas area. Through its non-banking subsidiaries, Worthen also operates,
among other businesses, a full service retail brokerage company, a
mortgage banking company and a trust company. At June 30, 1994, Worthen
had consolidated assets of approximately $3.5 billion, deposits of
approximately $3.0 billion and loans of approximately $1.8 billion.
The Board of Directors of Boatmen's believes that the acquisition of
Worthen and its banking subsidiaries would enhance its presence in
the State of Arkansas and would be a natural and desirable extension
of its banking franchise in the Central United States.
Under the terms of the Worthen Agreement, each share of Worthen
common stock, other than shares any holders of which have duly
perfected their dissenters' rights under the Arkansas Business
Corporation Act, will be converted into the right to receive one (1)
share of Boatmen's Common, plus cash in lieu of fractional shares.
Boatmen's would exchange approximately 17.3 million shares of
Boatmen's Common for all of the stock of Worthen (including shares
issued for stock options). The shares of Boatmen's Common to be
issued in connection with the acquisition of Worthen would constitute
approximately fifteen and one-half percent (15.5%) of the outstanding
shares of Boatmen's Common, assuming consummation of the acquisitions
of National Mortgage Company and Dalhart/Citizens Bank.
The acquisition of Worthen, which is expected to be completed in
the first quarter of 1995, is subject to various conditions including
approval of the Worthen Agreement by the requisite vote of the
shareholders of Worthen, receipt of a reaffirmation of the opinion of
PaineWebber, Inc., Worthen's investment banker, to the effect that
the transaction is fair to Worthen and its shareholders from a
financial point of view, and regulatory approvals of the Federal
Reserve, the Arkansas Commissioner of Financial Institutions and the
Texas Department of Banking. Regulatory applications are expected to
be filed in the near future.
There can be no assurance that all necessary regulatory approvals
will be obtained or that all conditions to the Worthen Agreement will
be satisfied such that the acquisition of Worthen will be
consummated. Neither the Holding Company Merger nor the Subsidiary
Bank Merger are conditioned upon consummation of the Worthen
acquisition.
Salem Community Bancorp, Inc. On September 23, 1994, Boatmen's
-----------------------------
announced the execution of an Agreement and Plan of Merger, dated September
1, 1994, to acquire Salem Community Bancorporation, Inc. ("Salem") and its
banking subsidiary, Community State Bank, Salem, Illinois. Salem would be
merged with and into a newly-formed acquisition subsidiary of Boatmen's and,
in connection therewith, Community State Bank would be merged with and into
Boatmen's National Bank of South Central Illinois. At June 30, 1994, Salem
had consolidated assets of approximately $78.4 million, deposits of
approximately $71.9 million and loans of approximately $50.2 million. Under
the terms of the Agreement, Boatmen's would exchange approximately 301,468
shares of Boatmen's Common for all of the stock of Salem and Community State
Bank. The Salem acquisition, which is subject to, among other things,
regulatory approval and approval by Salem's shareholders, is expected to be
completed in the first quarter of 1995. There can be no assurance
26
<PAGE> 36
that the transaction will be consummated. Neither the Holding Company Merger
nor the Subsidiary Bank Merger are conditioned upon consummation of the
Salem acquisition.
BOATMEN'S TEXAS, INC.
Boatmen's-Texas is a one bank holding company and wholly-owned
subsidiary of Boatmen's which will be used to facilitate the Holding
Company Merger. Boatmen's-Texas owns all of the outstanding capital
stock of Boatmen's-Amarillo.
BOATMEN'S FIRST NATIONAL BANK OF AMARILLO
Boatmen's-Amarillo is a national banking association
headquartered in Amarillo, Texas. Boatmen's-Amarillo, which
commenced operations in 1890, was acquired by Boatmen's on
November 30, 1993. All of the outstanding capital stock of
Boatmen's-Amarillo is owned by Boatmen's-Texas. At June 30, 1994,
Boatmen's-Amarillo had assets of approximately $1 billion, deposits
of $665 million and shareholders' equity of $74 million.
Boatmen's-Amarillo operates from nine offices, including one
mobile banking facility, in Amarillo, Canyon and Dumas, Texas.
Boatmen's-Amarillo, the largest commercial bank in terms of assets,
deposits and earnings on its service area which includes northwestern
Texas, known as the "Panhandle," and portions of eastern New Mexico,
southwestern Kansas, southeastern Colorado and western Oklahoma,
offers a broad range of commercial and retail banking services as
well as other financial services to its customers. Deposit products
include certificates of deposit, individual retirement accounts and
other line deposits, checking and other demand deposit accounts, NOW
and super NOW accounts, savings accounts and money market accounts.
Loans include commercial and industrial, real estate, mortgage,
consumer and agricultural. Other products and services include full
service brokerage, credit cards, credit-related insurance, automatic
teller machines, safe deposit boxes and trust services.
DALHART BANCSHARES, INC.
Dalhart is a bank holding company headquartered in Dalhart,
Texas. Dalhart's wholly-owned subsidiary, Dalhart-Delaware, owns
93.17 percent of the outstanding capital stock of Citizens Bank. The
businesses of Dalhart and Dalhart-Delaware consist primarily of the
ownership, supervision and control of Citizens Bank. At June 30,
1994, Dalhart had consolidated assets of approximately $132 million
and shareholders' equity of $13 million.
DALHART BANCSHARES OF DELAWARE, INC.
Dalhart-Delaware is a bank holding company headquartered in
Wilmington, Delaware. Dalhart-Delaware owns 93.17 percent of the
outstanding capital stock of Citizens bank. Under applicable Texas
law, the ownership of the stock of Citizens Bank by an intermediate
out-of-state holding company, such as Dalhart-Delaware, rather than
by Dalhart directly, eliminates the Texas franchise tax liability of
Dalhart.
CITIZENS STATE BANK OF DALHART
Citizens Bank is a Texas state-chartered bank headquartered in
Dalhart, Texas. Citizens Bank operates from its main office in
Dalhart, Texas, and from its three branches in Amarillo, Childress
and Vega, Texas. Citizens Bank offers complete banking services to
the commercial and residential areas which it serves. At June 30,
1994, Citizens Bank had assets of approximately $131 million and
shareholders' equity of $13 million.
THE ACQUISITION
BACKGROUND OF THE ACQUISITION
During the past fourteen years, the stock of Dalhart has been
closely held, with approximately eighty-five percent (85%) of its
stock held by the Koehler family. Following the death of R.E.
Koehler in 1986, the shares of Dalhart Common formerly held by R.E.
Koehler were distributed to several members of the Koehler family,
including his wife and children. The shares distributed to R.E.
Koehler's children, as well as a portion of the shares distributed to
his wife, are currently held in separate trusts for the benefit of
such persons, with John M. Koehler as trustee with respect to each
such trust. Since R.E. Koehler's death,
27
<PAGE> 37
John M. Koehler and the other children of R.E. Koehler have explored
various alternatives that would provide additional liquidity to such
shareholders for their investment in Dalhart.
During the same time period, as a result of the changes in the
banking industry and asset growth at Citizens Bank, management of
Dalhart and Citizens Bank were faced with a strategic choice as to
the future direction of Dalhart. Management of Dalhart recognized
that either (i) Citizens Bank would need to acquire or establish
additional locations in and around Amarillo, Texas, raise additional
equity capital and commit additional resources to back-office
operations (primarily in electronic data processing operations), or
(ii) Dalhart would need to locate an appropriate merger partner for
Dalhart and Citizens Bank. In light of the shareholders' desire for
additional liquidity, management of Dalhart believes the second
alternative would be most beneficial to the shareholders, customers
and employees of Dalhart and Citizens Bank.
In 1992, the Chairman of the Board and President of The First
National Bank of Amarillo initially discussed with the Chairman of
the Board of Dalhart and Citizens Bank a possible combination of The
First National Bank of Amarillo and Citizens Bank. Management of
both banks expressed an interest in such a combination due to
geographic proximity and similar loan practices and management
philosophies, but these preliminary discussions did not develop into
further negotiations.
In November 1993, Boatmen's acquired The First National Bank of
Amarillo and the bank changed its name to "Boatmen's First National
Bank of Amarillo" (defined herein as "Boatmen's-Amarillo"). After
execution of the definitive merger agreement with Boatmen's in July
1993, representatives of Boatmen's-Amarillo once again approached
management of Dalhart and Citizens Bank regarding a possible business
combination. Discussions continued through August 1993, and on
August 23, 1993, Boatmen's made a written offer proposing a merger
pursuant to which Boatmen's Common would be exchanged for that of
Dalhart Common and Citizens Bank Common. Such offer was not accepted
by Dalhart or Citizens Bank, but it did provide the basis for further
discussions among representatives of each of the organizations. The
parties continued discussions through year-end 1993, but discontinued
discussions at that time due to other matters requiring the attention
of the respective organizations.
Representatives of Boatmen's-Amarillo initiated contact with
management of Dalhart and Citizens Bank again in February 1994.
After further discussions and negotiations between the parties, a
revised offer was submitted by Boatmen's by letter dated March 28,
1994, which was accepted in principle subject to the conclusion of a
definitive agreement acceptable to both parties. The resulting
Holding Company Merger Agreement was executed as of May 19, 1994, and
the Subsidiary Merger Agreement was executed as of June 30, 1994.
Over the past two years, Dalhart has had preliminary discussions
or negotiations with several other potential acquirors. None of the
other acquirors, however, were able to satisfy the liquidity needs of
Dalhart's shareholders while offering satisfactory consideration for
the investment in Dalhart or Citizens Bank.
REASONS FOR THE ACQUISITION
The Boards of Directors of Dalhart and Citizens Bank have
determined that the Holding Company Merger and the Holding Company
Merger Agreement,
28
<PAGE> 38
including the Dalhart Conversion Ratio (as defined herein), and the
Subsidiary Bank Merger and the Subsidiary Merger Agreement, including the
Citizens Bank Conversion Ratio (as defined herein), are fair to, and in
the best interests of, Dalhart, Citizens Bank and their shareholders.
The Boards believe that a business combination with a larger and more
geographically diversified regional bank holding company would, in
addition to providing significant shareholder value to all shareholders,
enable Citizens Bank to compete more effectively in its market area and
participate in the expanded opportunities for growth that the Holding
Company Merger and the Subsidiary Bank Merger will make possible.
Accordingly, the Boards unanimously recommend that shareholders of
Dalhart and Citizens Bank vote for approval and adoption of the
Holding Company Merger Agreement and the Subsidiary Merger Agreement.
The Board of Directors of Boatmen's believes that the acquisition
of Dalhart and the merger of its banking subsidiary, Citizens Bank,
into Boatmen's-Amarillo, would be a natural and desirable addition to
Boatmen's banking franchise in the Panhandle of North Texas.
RECOMMENDATION OF THE BOARDS OF DIRECTORS
FOR THE REASONS SET FORTH ABOVE, THE BOARDS OF DIRECTORS OF
DALHART AND CITIZENS BANK UNANIMOUSLY RECOMMEND THAT THE HOLDERS OF
DALHART COMMON AND CITIZENS BANK COMMON VOTE "FOR" APPROVAL AND
ADOPTION OF THE HOLDING COMPANY MERGER AGREEMENT AND THE SUBSIDIARY
MERGER AGREEMENT, RESPECTIVELY.
THE HOLDING COMPANY MERGER (APPLICABLE TO DALHART SHAREHOLDERS)
DALHART MERGER CONSIDERATION
The Holding Company Merger Agreement provides that each share of
Dalhart Common, other than shares held by any shareholder properly
exercising dissenters' rights under the Texas Business Corporation
Act (the "Texas Law"), will be converted, in the Holding Company
Merger, into the right to receive 6.3599 shares of Boatmen's Common
(the "Dalhart Conversion Ratio"), together with any rights attached
thereto under or by virtue of the Rights Agreement, dated August 14,
1990, between Boatmen's and Boatmen's Trust Company, as Rights Agent
(as described on page 62 hereto), plus cash in lieu of fractional
shares (as described herein) (the "Dalhart Merger Consideration").
The Dalhart Conversion Ratio and the Dalhart Merger Consideration are
subject to possible increase as described herein. In addition, a
portion of the Dalhart Merger Consideration is subject to an escrow
agreement as described herein. The Dalhart Conversion Ratio,
including any adjustment thereto, was determined through
negotiations, taking into account the relative value of Boatmen's
Common and Dalhart Common, between Boatmen's and Dalhart.
No fractional shares of Boatmen's Common will be issued. In the
event a holder of shares of Dalhart Common would be entitled, in the
aggregate, to a fractional share interest in Boatmen's Common, then,
in lieu of issuing such fractional share, Boatmen's will pay to such
holder an amount of cash equal to such fraction multiplied by the
average closing price of a share of Boatmen's Common on the Nasdaq
Stock Market's National Market (the "Nasdaq") on the business day
immediately preceding the date on which the Holding Company Merger is
consummated (the "Effective Time").
The Holding Company Merger Agreement provides that the Dalhart
Merger Consideration would be subject to possible increase should the
Effective Time occur after the record date for the payment of the
29
<PAGE> 39
regular quarterly dividend on Boatmen's Common declared during the
fourth quarter of 1994 or the first quarter of 1995. In such case,
the Dalhart Merger Consideration would be increased by adding to the Dalhart
Conversion Ratio the quotient of (i) the product of (A) the amount of such
quarterly dividend or dividends, as the case may be, multiplied by (B)
6.3599, divided by (ii) the average closing price of a share of Boatmen's
Common on Nasdaq during the twenty trading days immediately preceding the
fifth calendar day immediately preceding the closing date (the "Closing
Date") of the Holding Company Merger (the "Boatmen's Average Price")
In addition to the foregoing, the Holding Company Merger
Agreement provides for a possible increase of the Dalhart Conversion
Ratio should Dalhart receive or become entitled to receive prior to
the Closing Date, the proceeds of $1,000,000 insurance policy on the
life of a principal shareholder of Dalhart presently owned by
Dalhart. In such event, the Dalhart Conversion Ratio would be
increased by an amount equal to the quotient of $1,000,000 divided by
the number of issued and outstanding shares of Dalhart Common
divided, again, by the Boatmen's Average Price. No assurance can be
given whether the Dalhart Merger Consideration would be adjusted as
described herein.
If, prior to the Effective Time, a share of Boatmen's Common
would be changed into a different number of shares of Boatmen's
Common or a different class of shares by reason of reclassification,
recapitalization, splitup, exchange of shares or readjustment, or if
a stock dividend thereon should be declared with a record date within
such period (a "Share Adjustment"), then the number of shares of
Boatmen's Common into which a share of Dalhart Common would be
converted pursuant to the Holding Company Merger Agreement will be
appropriately and proportionately adjusted so that each shareholder
of Dalhart will be entitled to receive such number of shares of
Boatmen's Common as such shareholder would have received pursuant to
such Share Adjustment had the record date thereof been immediately
following the Effective Time.
ESCROW OF DALHART MERGER CONSIDERATION
Dalhart, Dalhart-Delaware, Boatmen's, Boatmen's-Texas and
Citizens Bank will enter into an Escrow Agreement (the "Escrow
Agreement") to provide for the escrow of a portion of the Dalhart
Merger Consideration, as described herein. The purpose of the Escrow
Agreement is to provide a reserve from the aggregate Dalhart Merger
Consideration for the satisfaction and payment of any judgment on or
settlement of certain pending litigation against Citizens Bank,
certain of its employees and others styled Western National Bank v.
------------------------
Citizens State Bank, Curtis Beard, Prestige Lending Corporation and
- -------------------------------------------------------------------
Robert P. Mulroy (District Court of Dallas County, Texas, Cause
- ----------------
No. 94-04206-L), (the "WNB" Claim"), and all costs and expenses
incurred in responding to and defending against the WNB Claim. The
WNB Claim alleges that certain business torts against Citizens Bank
and others in connection with the generation of certain mortgage-
related business sought by the claimant, a competing financial
institution. See "LEGAL PROCEEDINGS."
Pursuant to the terms of the Holding Company Merger Agreement and
the Escrow Agreement, a portion of the Dalhart Merger Consideration
equal to the quotient of (a) the number of shares of Boatmen's Common
as equals the quotient of $929,550 divided by the Boatmen's Average
Price and (b) the number of shares of Dalhart Common issued and
outstanding immediately prior to the Effective Time which are held by
shareholders who have not duly exercised and perfected their
dissenters' rights under the Texas Law, will be issued and delivered
by Boatmen's to an escrow agent on the Closing Date (the "Dalhart
Escrow Shares"). The balance of the Dalhart Merger Consideration
will be issued to the holders of Dalhart Common. During the period
in which the Dalhart Escrow Shares are held by the escrow agent
pursuant to the Escrow Agreement, shareholders of Dalhart Common who
would otherwise be entitled to receive the Dalhart Escrow Shares but
for the Escrow Agreement (the "Eligible Dalhart Shareholders") will
be entitled to receive their pro rata share of any dividend or other
distribution which may be paid on the Dalhart
30
<PAGE> 40
Escrow Shares. In addition, such Eligible Dalhart Shareholder is
entitled to exercise all voting rights with regard to his or her
pro rata interest in the Dalhart Escrow Shares.
The Eligible Dalhart Shareholders are represented by a
Shareholders' Committee comprised of three individuals. The
Shareholders' Committee and Boatmen's-Amarillo, as successor by
merger with Citizens Bank, will consult with one another regarding
resolution of the WNB Claim.
Upon termination of the Escrow Agreement by reason of resolution
or termination of the WNB Claim, the Dalhart Escrow Shares, less such
number of the Dalhart Escrow Shares as have a value equal to the
amount of any judgment or settlement and all costs and expenses in
connection with the WNB Claim, would be distributed to the Eligible
Dalhart Shareholders. The full text of the Escrow Agreement is
attached as Exhibit C to this Joint Proxy Statement/Prospectus and is
incorporated herein by this reference.
STOCK REDEMPTION AGREEMENT; STOCK REDEMPTION TERMINATION
AGREEMENT
Dalhart and Catherine D. Koehler, a principal shareholder of
Dalhart, have entered into a Redemption Agreement, dated as of
January 8, 1993. The Redemption Agreement grants Dalhart an option
to repurchase Mrs. Koehler's shares of Dalhart Common upon her death.
To facilitate the possible repurchase of the shares of Dalhart Common
owned by Mrs. Koehler, Dalhart purchased, maintains and is the sole
beneficiary of a One Million Dollar ($1,000,000) whole-life insurance
policy on the life of Mrs. Koehler. As described herein, the Dalhart
Conversion Ratio is subject to adjustment should Dalhart receive or
become entitled to receive prior to the Closing Date the proceeds of
such policy.
In connection with the transactions contemplated by the Holding
Company Merger Agreement, Dalhart and Mrs. Koehler have entered into
a Stock Redemption Termination Agreement, dated as of May 19, 1994,
pursuant to which the Redemption Agreement would be terminated
effective as of the Closing Date without the repurchase of
Mrs. Koehler's shares of Dalhart Common having been effected. Should
the Holding Company Merger Agreement be terminated, or should the
Holding Company Merger not be consummated by May 19, 1995, the Stock
Redemption Termination Agreement shall terminate and the Redemption
Agreement shall continue in full force and effect. As discussed
herein, the obligations of Boatmen's to effect the Holding Company
Merger and the Subsidiary Bank Merger are subject to the continued
enforceability and effectiveness of the Stock Redemption Termination
Agreement. The Redemption Agreement and the Stock Redemption
Termination Agreement are attached as an exhibit to the Holding
Company Merger Agreement, attached as Exhibit A to this Joint Proxy
Statement/Prospectus.
FORM OF THE HOLDING COMPANY MERGER
The Holding Company Merger Agreement provides that Dalhart-Delaware
will merge into Dalhart and thereafter Dalhart will merge into Boatmen's-
Texas, which is a wholly owned subsidiary of Boatmen's, and Boatmen's-
Texas will be the surviving corporation.
CONDUCT OF BUSINESS PENDING THE HOLDING COMPANY MERGER; DIVIDENDS
Pursuant to the Holding Company Merger Agreement, Dalhart has
agreed to carry on its business in the usual, regular and ordinary
course in substantially the same manner as conducted prior to the
execution of the Holding Company Merger Agreement. The Holding
Company Merger Agreement provides that Dalhart may not declare or pay
a dividend on the Dalhart Common or make any other distribution to
shareholders, whether in cash, stock or other property, after the
date of the Holding Company Merger Agreement.
31
<PAGE> 41
CONDITIONS TO CONSUMMATION OF THE HOLDING COMPANY MERGER
The Holding Company Merger is subject to various conditions.
Specifically, the obligations of each party to effect the Holding
Company Merger are subject to the fulfillment or waiver by each of
the parties, at or prior to the Closing Date of the following
conditions: (i) the representations and warranties of the respective
parties to the Holding Company Merger Agreement set forth in the
Holding Company Merger Agreement will be true and correct in all
material respects on the date thereof and as of the Closing Date;
(ii) the respective parties to the Holding Company Merger Agreement
will have performed and complied in all material respects with all of
its obligations and agreements required to be performed prior to the
Closing Date; (iii) no party to the Holding Company Merger Agreement
will be subject to any order, decree or injunction of a court or
agency of competent jurisdiction which enjoins or prohibits the
consummation of the Holding Company Merger; (iv) all necessary
regulatory approvals and consents required to consummate the Holding
Company Merger and the Subsidiary Bank Merger, including the approval
of the shareholders of Dalhart and Citizens Bank, will have been
obtained and all waiting periods in respect thereof will have
expired; (v) each party will have received all required documents
from the other party; (vi) the Registration Statement relating to the
Boatmen's Common to be issued pursuant to the Holding Company Merger
will have become effective, and no stop order suspending the
effectiveness of the Registration Statement will have been issued and
no proceedings for that purpose will have been initiated or
threatened by the S.E.C.; and (vii) Boatmen's will have received a
ruling from the Internal Revenue Service (the "I.R.S.") or an opinion
of its counsel to the effect that (a) the Holding Company Merger and
the Subsidiary Bank Merger will constitute a reorganization within
the meaning of Section 368(a) of the Code, (b) no gain or loss will
be recognized by the holders of Dalhart Common upon receipt of the
Dalhart Merger Consideration or by the holders of Citizens Bank
Common upon receipt of the Citizens Bank Merger Consideration (except
for cash received in lieu of fractional shares), (c) the basis of
shares of Boatmen's Common received by the shareholders of Dalhart or
Citizens Bank will be the same as the basis of shares of Dalhart
Common or Citizens Bank Common exchanged therefor, and (d) the
holding period of the shares of Boatmen's Common received by the
shareholders of Dalhart and Citizens Bank will include the holding
period of the shares of Dalhart Common or Citizens Bank Common
exchanged therefor, provided such shares were held as capital assets
as of the Effective Time.
The obligations of Boatmen's and Boatmen's-Texas to effect the
Holding Company Merger are further subject to the conditions that
(i) Boatmen's will have received a letter from Ernst & Young to the
effect that the Holding Company Merger and the Subsidiary Bank Merger
qualify for "pooling of interests" accounting treatment;
(ii) Boatmen's will have received certain environmental inspection
reports required to be obtained on each of Dalhart's real properties
and Boatmen's will not have elected to exercise its termination
rights in connection therewith (which such rights are described
herein); (iii) the Subsidiary Bank Holding Company Merger shall have
been consummated on the Closing Date; (iv) that certain Stock
Redemption Termination Agreement between Dalhart and Catherine D.
Koehler, a copy of which is attached to the Holding Company Merger
Agreement, attached as Exhibit A to this Joint Proxy
Statement/Prospectus, shall be in full force and effect, and the
transactions contemplated thereby consummated on, the Closing Date;
and (v) Boatmen's shall be of the good faith reasonable judgment,
after consultation with Dalhart and its legal counsel, that the
potential loss, cost and expense arising from a certain contingent
liability is not significantly greater than the value of the shares
of Boatmen's Common deposited with the escrow agent.
REGULATORY APPROVALS
The Holding Company Merger is subject to the prior approval of
the Board of Governors of the Federal Reserve System (the "Federal
Reserve") and the Texas Department of Banking. The Holding Company
Merger may not be consummated until the 30th day after the date of
Federal Reserve approval.
32
<PAGE> 42
Applications for the required regulatory
approval from the Federal Reserve and the Texas Department of Banking
have been filed and are pending. In addition, an application has
been filed with the Office of the Comptroller of the Currency (the
"O.C.C.") for approval of the Subsidiary Bank Merger and is pending.
TERMINATION OR ABANDONMENT
The Holding Company Merger Agreement may be terminated at any
time prior to the Effective Time: (i) by either party if the Holding
Company Merger is not consummated on or prior to May 19, 1995;
(ii) by mutual agreement of Boatmen's and Dalhart; (iii) by Boatmen's
or Dalhart in the event of a material breach by the other of any of
its representations and warranties or agreements under the Holding
Company Merger Agreement not cured within thirty days after notice of
such breach is given by the non-breaching party; (iv) by either party
in the event all the conditions to its obligations are not satisfied
or waived (and not cured within any applicable cure period); (v) by
Boatmen's in the event that Dalhart or Citizens Bank becomes a party
or subject to any new or amended written agreement, memorandum of
understanding, cease and desist order, imposition of civil money
penalties or other regulatory enforcement action or proceeding with
any federal or state agency charged with the supervision or
regulation of banks or bank holding companies after the date of the
Holding Company Merger Agreement (except with respect to any such
regulatory enforcement action that could be terminated on or before
the Closing Date through reasonable efforts of Boatmen's and Dalhart
and that would not require any capital infusion to be made or other
action having a financial effect materially adverse to the financial
benefits of the Holding Company Merger to Boatmen's); (vi) by
Boatmen's if certain reports of environmental inspection on the real
properties of Dalhart to be obtained pursuant to the Holding Company
Merger Agreement should disclose any contamination or presence of
hazardous wastes, the estimated clean up or other remedial cost of
which exceeds $400,000; (vii) should any regulatory application filed
in connection with the Holding Company Merger or the Subsidiary Bank
Merger be finally denied or disapproved by the respective regulatory
authority; and (viii) by either party, should the shareholders of
Dalhart not approve the Holding Company Merger.
PAYMENT UPON OCCURRENCE OF CERTAIN TRIGGERING EVENTS
The Holding Company Merger Agreement provides that upon the
occurrence of one or more Triggering Events, Dalhart will pay to
Boatmen's the sum of Seven Hundred Fifty Thousand Dollars ($750,000).
As used herein, the term "Triggering Event" means any of the
following events: (i) termination of the Holding Company Merger
Agreement by Boatmen's upon a breach thereof by Dalhart (including,
without limitation, the entering into of an agreement between Dalhart
and any third party which is inconsistent with the transactions
contemplated by the Holding Company Merger Agreement), provided that
within twelve months of the date of such termination, either an event
described in clauses (iii), (iv) or (v) herein shall have occurred;
(ii) the failure of Dalhart's shareholders to approve the Holding
Company Merger and the Holding Company Merger Agreement at the
Dalhart Special Meeting; provided, however, that the failure of
Dalhart shareholders to approve the Holding Company Merger and the
Holding Company Merger Agreement shall not be deemed a Triggering
Event if (a) the average of the daily closing prices of a share of
Boatmen's Common, as reported on the Nasdaq during the period of
twenty trading days ending at the end of the second trading day
immediately preceding the Mailing Date (the "Boatmen's Final Price"),
is less than $26.00, and (b) the number obtained by dividing the
Boatmen's Final Price by the Boatmen's Initial Price (as defined
herein), is less than the number obtained by dividing the Final Index
Price (as defined herein) by the Initial Index Price (as defined
herein) and subtracting .20 from such quotient; (iii) any person or
group of persons (other than Boatmen's) acquires, or has the right to
acquire, fifty percent (50%)
33
<PAGE> 43
or more of the outstanding shares of
Dalhart Common, exclusive of shares of Dalhart Common sold directly
or indirectly to such person or group of persons by Boatmen's;
(iv) expiration of the fifth day preceding the scheduled expiration
date of a tender or exchange offer by any person or group of persons
(other than Boatmen's and/or its affiliates) to purchase or acquire
securities of Dalhart if upon consummation of such offer, such person
or group of persons would own, control or have the right to acquire
fifty percent (50%) or more of the outstanding shares of Dalhart
Common; or (v) upon the entry by Dalhart or Citizens Bank into an
agreement or other understanding with a person or group of persons
(other than Boatmen's and/or its affiliates) for such person or group
of persons to acquire, merge or consolidate with Dalhart or Citizens
Bank or to purchase all or substantially all of Dalhart's or Citizens
Bank's assets.
As used herein, (a) "Index Group" means all of the bank holding
companies listed on Exhibit 7.09 to the Holding Company Merger
Agreement, the common stock of which is publicly traded and as to
which there is no pending publicly announced proposal at any time
during the period of twenty trading days ending at the end of the
fifth trading day immediately preceding the Closing Date for such
company to be acquired or to acquire another company (which would
constitute a "significant subsidiary" of such company as such term is
defined in Rule 1-02 of the S.E.C.'s Regulation S-X) in exchange for
its stock; (b) "Initial Boatmen's Price" means the closing price of
a share of Boatmen's Common on May 19, 1994; (c) "Initial Index
Price" means the weighted average (weighted in accordance with the
factors specified on Exhibit 7.09 to the Holding Company Merger
Agreement) of the per share closing prices of the common stock of the
bank holding companies comprising the Index Group, as reported on the
consolidated transactions reporting system for the market or exchange
on which such common stock is principally traded, on May 19, 1994;
(d) "Final Price" of any company belonging to the Index Group means
the average of the daily closing sale prices of a share of common
stock of such company, as reported in the consolidated transaction
reporting system for the market or exchange on which such common
stock is principally traded, during the period of twenty trading days
ending at the end of the second trading day immediately preceding the
Mailing Date; and (e) "Final Index Price" means the weighted average
(weighted in accordance with the factors specified on Exhibit 7.09 to
the Holding Company Merger Agreement) of the Final Prices for all of
the companies comprising the Index Group.
DISSENTERS' RIGHTS
The rights of shareholders of a Texas corporation (Dalhart is a
Texas corporation) who choose to dissent from a proposed merger of
such corporation are governed by the Texas Law. An excerpt of the
Texas Law (Sections 5.11-5.13) is attached as Exhibit D to the Joint
Proxy Statement/Prospectus. Under the Texas Law, a shareholder of a
Texas corporation who wishes to assert dissenters' rights with
respect to a merger must file with the corporation, prior to the
shareholder's meeting at which the merger is to be voted upon, a
written objection stating that the shareholder's right to dissent
will be exercised if the merger is effected and giving the
shareholder's mailing address for receiving notice of the merger if
it becomes effective.
In addition, in order to dissent, the shareholder must not vote
in favor of the merger. It is not necessary that a shareholder vote
against the merger in order to dissent, so long as the shareholder
files a written objection in advance of the proposed action.
However, merely voting against the proposal, either by proxy or at
the shareholders' meeting, will not take the place of filing the
required written objection.
If the merger is effected and the dissenters' rights provisions
of the Texas Law are applicable to such merger, the surviving
corporation of such merger must, within 10 days thereafter, mail
notice thereof to each shareholder who has filed a written objection
and who has not voted in favor of the merger. Within 10 days after
the surviving corporation mails or delivers notice to shareholders
who have filed objections,
34
<PAGE> 44
each such shareholder who elects to dissent must make written demand for
the payment of the fair value of his or her shares in accordance with the
provisions of Article 5.12 of the Texas Law. Such written demand must
state the number and class of the shares owned by the shareholder and the
shareholder's estimate of the fair value of such shares. Also, within 20
days after demanding payment, the shareholder must submit the certificates
representing his or her shares to the surviving corporation for
notation on the certificate that such demand has been made in
accordance with the provisions of Article 5.13 of the Texas Law.
A shareholder who votes for the merger, or who does not demand
---
payment within 10 days after receiving notice of the effectiveness of
the merger, will be deemed to have waived his or her right to dissent
and will be bound by the terms of the merger. A shareholder who
fails to submit his or her certificate for notation of demand for
payment will, at the option of the surviving corporation, terminate
his or her right to dissent unless a court for good and sufficient
cause directs otherwise.
Within 20 days after receiving demand for payment from a
dissenting shareholder, the surviving corporation must (i) notify the
shareholder that it agrees to the amount claimed as the fair value of
the shares, or (ii) propose a different amount. If the surviving
corporation and the shareholder agree on a value within 60 days after
the merger, the surviving corporation must pay for the shares within
90 days after the merger. If the surviving corporation and the
dissenting shareholder do not so agree, either the surviving
corporation or such shareholder may file a petition in a court of
competent jurisdiction in the appropriate Texas district court within
120 days after the merger asking for a finding and determination of
the fair value of the shares owned by the dissenting shareholder.
All shareholders who properly dissent from a proposed merger
involving a Texas corporation in accordance with Article 5.12 of the
Texas Law, will lose all rights with respect to their shares except
the right to receive payment for the shares and the right to maintain
an appropriate action to obtain relief on the ground the merger would
be or was fraudulent. A shareholder may withdraw his or her demand
before payment is made for the shares or before a petition has been
filed asking for a finding and determination of the fair value of
such shares, but no demand may be withdrawn after such payment has
been made, or, unless the surviving corporation consents, after any
such petition has been filed.
If a shareholder withdraws his or her demand, or if neither party
timely files a petition asking for a determination of fair value of
the shares, such shareholder shall be bound by the terms of the
merger and restored to the status of shareholder.
The dissenters' rights provisions of the Texas Law described
herein are applicable to all proposed mergers involving Texas
corporations, except in those instances where (i) the shares of such
corporation are listed on a national securities exchange or (ii) such
shares are held of record by 2,000 holders or more. The shares of
Dalhart Common are not listed and traded on Nasdaq. In addition,
Dalhart has substantially fewer than 2,000 record shareholders (32 as
of the record date for the Dalhart Special Meeting).
If the holders of more than approximately ten percent (10%) of
the shares of Dalhart Common should exercise their dissenters'
rights, and the dissenters' rights provisions of the Texas Law were
found to be applicable to the Holding Company Merger, the Holding
Company Merger would not qualify as a "pooling of interests" for
accounting and financial reporting purposes and, therefore, Boatmen's
would not be obligated to consummate the Holding Company Merger.
Boatmen's has no present intention to waive this condition to its
obligation to consummate the Holding Company Merger.
The foregoing summary of the rights of shareholders to dissent
and demand payment for their shares does not purport to be a complete
statement of the Texas Law relating to the rights of dissenting
35
<PAGE> 45
shareholders of Dalhart, and is qualified by reference to the
excerpts of the Texas Law which have been set forth in full as
Exhibit D to this Joint Proxy Statement/Prospectus. Each dissenting
shareholder should consult with his or her own legal counsel
concerning the specific procedures and available remedies.
ANY FAILURE TO FOLLOW THE DETAILED PROCEDURES SET FORTH IN THE
TEXAS LAW MAY RESULT IN A SHAREHOLDER LOSING ANY RIGHT HE OR SHE MAY
HAVE TO DISSENT FROM THE HOLDING COMPANY MERGER AND CLAIM FAIR VALUE
FOR HIS OR HER SHARES.
EXCHANGE OF DALHART STOCK CERTIFICATES; FRACTIONAL SHARES
The conversion of Dalhart Common into Boatmen's Common (other
than any shares as to which dissenters' rights are properly
exercised) will occur by operation of law at the Effective Time.
After the Effective Time, certificates theretofore evidencing shares
of Dalhart Common (such certificates, other than certificates held by
shareholders exercising their dissenters' rights, are collectively
referred to herein as the "Dalhart Certificates"), which may be
exchanged for shares of Boatmen's Common will be deemed, for all
corporate purposes other than the payment of dividends and other
distributions on such shares, to evidence ownership of and
entitlement to receive such shares of Boatmen's Common.
As soon as reasonably practicable after the Effective Time, and
in no event more than 10 business days after the Effective Time,
Boatmen's Trust Company (the "Exchange Agent") will mail a
transmittal letter and instructions to each record holder of a
Dalhart Certificate whose shares were converted into the right to
receive the Dalhart Merger Consideration (less such holder's
beneficial interest in the shares of Boatmen's Common held pursuant
to the Escrow Agreement), advising such holder of the number of
shares of Boatmen's Common such holder is entitled to receive
pursuant to the Holding Company Merger, of the amount of cash such
holder is due in lieu of a fractional share of Boatmen's Common, and
of the procedures for surrendering such Dalhart Certificates in
exchange for a certificate for the number of whole shares of
Boatmen's Common, and a check for the cash amount (if any) such
holder is entitled to receive in lieu of fractional shares. The
letter of transmittal will also specify that delivery will be
effected, and risk of loss and title to the Dalhart Certificates will
pass, only upon proper delivery of the Dalhart Certificates to the
Exchange Agent and will be in such form and have such other
provisions as Boatmen's may reasonably specify. SHAREHOLDERS OF
DALHART ARE REQUESTED NOT TO SURRENDER THEIR DALHART CERTIFICATES FOR
EXCHANGE UNTIL SUCH LETTER OF TRANSMITTAL AND INSTRUCTIONS ARE
RECEIVED. The shares of Boatmen's Common into which Dalhart Common
will be converted in the Holding Company Merger will be deemed to
have been issued at the Effective Time. Unless and until the Dalhart
Certificates are surrendered, along with a duly executed letter of
transmittal, any other required documents and notification of the
holder's federal taxpayer identification number, dividends on the
shares of Boatmen's Common issuable with respect to such Dalhart
Common, which would otherwise be payable, will not be paid to the
holders of such Dalhart Certificates and, in such case, upon
surrender of the Dalhart Certificates, and a duly executed letter of
transmittal, any other required documents and notification of
taxpayer identification number, there will be paid any dividends on
such shares of Boatmen's Common which became payable between the
Effective Time and the time of such surrender and notification. No
interest on any such dividends will accrue or be paid.
REPRESENTATIONS AND WARRANTIES OF DALHART, DALHART-DELAWARE,
BOATMEN'S AND BOATMEN'S-TEXAS
The Holding Company Merger Agreement contains various
representations and warranties of the parties thereto. These
include, among other things, representations and warranties by
Dalhart and Dalhart-Delaware, except as otherwise disclosed to
Boatmen's, as to: (i) organization and good standing;
(ii) capitalization; (iii) the due authorization and execution of the
Holding Company Merger Agreement by
36
<PAGE> 46
each of Dalhart and Dalhart-Delaware; (iv) the identity and ownership of
their subsidiaries; (v) the accuracy of their financial statements and
Citizens Bank's filings with the Federal Deposit Insurance Corporation;
(vi) the absence of material adverse changes in the financial condition,
results of operations, business or prospects of Dalhart, Dalhart-
Delaware and Citizens Bank; (vii) the absence of certain orders,
agreements or memoranda of understanding between Dalhart, Dalhart-
Delaware or Citizens Bank and any federal or state agency charged
with the supervision or regulation of banks or bank holding
companies; (viii) the filing of tax returns and payment of taxes;
(ix) the absence of pending or threatened litigation or other such
actions; (x) agreements with employees, including employment
agreements; (xi) certain reports required to be filed with various
regulatory agencies; (xii) its loan portfolio; (xiii) employee
matters and ERISA; (xiv) title to its properties, the absence of
liens (except as specified) and insurance matters; (xv) environmental
matters; (xvi) compliance with applicable laws and regulations;
(xvii) the absence of undisclosed liabilities; (xviii) the absence of
brokerage commissions or similar finder's fees in connection with the
Holding Company Merger; (xix) title to and maintenance of a life
insurance policy on the life of Catherine D. Koehler; (xx) the
execution and effectiveness of a Stock Redemption Termination
Agreement between Catherine D. Koehler and Dalhart; and (xxi) the
accuracy of information supplied by Dalhart in connection with the
Registration Statement, this Joint Proxy Statement/Prospectus and any
other documents to be filed with the S.E.C. or any banking or other
regulatory authority in connection with the transactions contemplated
by the Holding Company Merger Agreement.
Boatmen's and Boatmen's-Texas' representations and warranties
include, among other things, those as to (i) organization and good
standing; (ii) capitalization; (iii) the due authorization and
execution of the Holding Company Merger Agreement by each of
Boatmen's and Boatmen's-Texas, and the absence of the need (except as
specified) for governmental or third party consents to the Holding
Company Merger; (iv) subsidiaries of Boatmen's; (v) the accuracy of
Boatmen's financial statements and filings with the S.E.C.; (vi) the
absence of material adverse changes in the financial condition,
results of operations or business of Boatmen's and its subsidiaries;
(vii) the absence of material pending or threatened litigation or
other such actions; (viii) certain reports required to be filed with
various regulatory agencies; (ix) compliance with applicable laws and
regulations; and (x) the accuracy of information supplied by
Boatmen's and Boatmen's-Texas in connection with the Registration
Statement, this Joint Proxy Statement/Prospectus and any other
documents to be filed with the S.E.C. or any banking or other
regulatory authority in connection with the transactions contemplated
by the Holding Company Merger Agreement.
CERTAIN OTHER AGREEMENTS
Business of Dalhart in Ordinary Course. Pursuant to the Holding
Company Merger Agreement, Dalhart has agreed, among other things,
that it will conduct its business and the business of its
subsidiaries and engage in transactions only in the usual, regular
and ordinary course as previously conducted, and that neither it nor
its subsidiaries will, without the prior written consent of Boatmen's
(which shall not be unreasonably withheld): (i) issue additional
Dalhart Common or common stock of Dalhart-Delaware ("Delaware
Common") or other capital stock, options, warrants or other rights to
subscribe for or purchase Dalhart Common, Delaware Common or any
other capital stock or any other securities convertible into or
exchangeable for any capital stock; (ii) directly or indirectly
redeem, purchase or otherwise acquire Dalhart Common or any other
capital stock; (iii) effect a reclassification, recapitalization,
splitup, exchange of shares, readjustment or other similar change in
any capital stock or otherwise reorganize or recapitalize;
(iv) change its certificate or articles of incorporation or
association, as the case may be, or bylaws; (v) (except as specified)
grant any increase (other than ordinary and normal increases
consistent with past practices) in the compensation payable or to
become payable to officers or salaried employees, grant any stock
options or, except as required by law, adopt or change any bonus,
insurance, pension, or other employee plan, payment or arrangement
made to, for or with any such officers or employees; (vi) borrow
37
<PAGE> 47
or agree to borrow any material amount of funds other than in the
ordinary course of business or directly or indirectly guarantee or
agree to guarantee any obligations of others; (vii) make or commit to
make any new loan or letter of credit or any new or additional
discretionary advance under any existing line of credit, in excess of
$2,000,000, or that would increase the aggregate credit outstanding
to any one borrower or group of affiliated borrowers to more than
$2,000,000; (viii) purchase or otherwise acquire any investment
security for its own account having an average remaining life
maturity greater than five years or any asset-backed securities other
than those issued or guaranteed by the Government National Mortgage
Association, the Federal National Mortgage Association or the Federal
Home Loan Mortgage Corporation; (ix) increase or decrease the rate of
interest paid on time deposits or certificates of deposit except in
accordance with past practices; (x) enter into any agreement,
contract or commitment having a term in excess of three months other
than letters of credit, loan agreements, and other lending, credit
and deposit agreements and documents made in the ordinary course of
business; (xi) mortgage, pledge, subject to lien or charge or
otherwise encumber any of its assets or properties except in the
ordinary course of business; (xii) cancel, accelerate or waive any
material indebtedness, claims or rights owing to Dalhart or its
subsidiaries except in the ordinary course of business; (xiii) sell
or otherwise dispose of any real property or any material amount of
personal property other than properties acquired in foreclosure or
otherwise in the ordinary collection of indebtedness; (xiv) foreclose
or otherwise take title to or possess any real property, other than
single family, non-agricultural residential property of one acre or
less, without first obtaining a phase one environmental report which
indicates that the property is free of hazardous, toxic or polluting
waste materials; (xv) commit any act or fail to do any act which will
result in a material breach of any agreement, contract or commitment,
or violate any law, statute, rule, governmental regulation or order,
which will adversely affect the business, financial condition or
earnings of Dalhart and its subsidiaries; (xvi) purchase any real or
personal property or make any capital expenditure in excess of
$250,000; or (xvii) engage in any transaction or take any action that
would render untrue, in any material respect, any of the
representations and warranties made by Dalhart and Dalhart-Delaware
in the Holding Company Merger Agreement, if such representations or
warranties were given as of the date of such transaction or action.
Additional Dalhart Reserves, Accruals, Charges, and Expenses.
The Holding Company Merger Agreement acknowledges that while Dalhart
believes it has established all reserves and taken all provisions for
possible loan losses required by generally accepted accounting
principles and applicable laws, rules and regulations, Boatmen's has
adopted different loan, accrual and reserve policies (including
different loan classifications and levels of reserves for possible
loan losses). Accordingly, the Holding Company Merger Agreement
provides that Boatmen's and Dalhart will consult and cooperate with
each other prior to the Effective Time (i) to conform Dalhart's loan,
accrual and reserve policies to those of Boatmen's; (ii) to determine
appropriate accruals, reserves, and charges for Dalhart to establish
and take in respect of excess equipment write-off or write-down of
various assets, and other appropriate charges and accounting
adjustments taking into account the parties' business plans following
the Holding Company Merger; and (iii) to determine the amount and the
timing for recognizing for financial accounting purposes the expenses
of the Holding Company Merger and the restructuring charges related
to or to be incurred in connection with the Holding Company Merger.
Dalhart has agreed to establish and take all such reserves, accruals,
and charges and recognize, for financial accounting purposes, such
expenses and charges, as requested by Boatmen's and at such times as
are mutually agreeable to Boatmen's and Dalhart, provided, however,
that Dalhart is not required to take any action which is not
consistent with generally accepted accounting principles.
Environmental Inspections. Dalhart has agreed to provide
Boatmen's, not later than 45 days after the date of the Holding
Company Merger Agreement, a report of a phase one environmental
investigation on certain real property owned or leased by Dalhart or
its subsidiaries (which does not include leased space in retail and
similar establishments and space leased for automatic teller
machines) and, if required by the
38
<PAGE> 48
phase one investigation in Boatmen's reasonable opinion, a report of a
phase two investigation on properties requiring such additional study.
Environmental investigations routinely are conducted by Boatmen's in
connection with transactions involving the acquisition of real property,
whether pursuant to the acquisition of a bank or other business or in its
ongoing business operations. These investigations are intended to
identify and quantify potential environmental risks of ownership,
such as contamination, which could lead to liability for clean-up
costs under the federal Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended, and other
applicable laws. A "phase one" investigation is an initial
environmental inquiry intended to identify areas of concern which
might require more in-depth assessment. The scope of a phase one
investigation varies depending on the environmental consultant
utilized and the property assessed, but will typically include
(i) visual inspection of the property; (ii) review of governmental
records to ascertain the presence of such things as "Superfund"
sites, underground storage tanks or landfills, etc. on or near the
site; (iii) review of all relevant site records such as air or water
discharge permits and hazardous waste manifests; and (iv) research
regarding previous owners and uses of the property as well as those
of surrounding properties. In bank or other business acquisition
transactions, Boatmen's policy is to obtain phase one environmental
investigations of real property to ensure that environmental problems
do not exist which could result in unacceptably high or
unquantifiable risk to Boatmen's and its shareholders.
Other Dalhart Agreements. In addition, Dalhart has agreed to
(i) give Boatmen's prompt written notice of any occurrence, or
impending or threatened occurrence, of any event or condition which
would cause or constitute a breach of any of Dalhart's
representations or agreements in the Holding Company Merger Agreement
or of the occurrence of any matter or event known to and directly
involving Dalhart (not including changes in conditions that affect
the banking industry generally) that is materially adverse to the
business, operations, properties, assets or condition (financial or
otherwise) of Dalhart and its subsidiaries; (ii) use its best efforts
to obtain all necessary consents in any material leases, licenses,
contracts, instruments and rights which require the consent of
another person for their transfer or assumption pursuant to the
Holding Company Merger; (iii) use its best efforts to perform and
fulfill all conditions and obligations to be performed or fulfilled
under the Holding Company Merger Agreement and to effect the Holding
Company Merger; (iv) permit Boatmen's reasonable access to Dalhart's
properties and to disclose and make available all books, documents,
papers and records relating to assets, stock ownership, properties,
operations, obligations and liabilities in which Boatmen's may have
a reasonable and legitimate interest in furtherance of the
transactions contemplated by the Holding Company Merger Agreement;
and (v) cause Citizens Bank to enter into the Subsidiary Merger
Agreement with Boatmen's-Amarillo and take all other actions and
cooperate with Boatmen's in causing the Subsidiary Bank Merger to be
effected.
Boatmen's Agreements. Pursuant to the Holding Company Merger
Agreement, Boatmen's has agreed, among other things, to (i) file all
regulatory applications required in order to consummate the Holding
Company Merger and the Subsidiary Bank Merger and to provide Dalhart
with copies of all such applications; (ii) file the Registration
Statement with the S.E.C. and use its best efforts to cause the
Registration Statement to become effective; (iii) timely file all
documents required to obtain all necessary blue sky permits and
approvals; (iv) prepare and file any other filings required under the
Exchange Act relating to the Holding Company Merger and related
transactions; (v) promptly notify Dalhart in writing should Boatmen's
have knowledge of any event or condition which would cause or
constitute a breach of any of its representations or agreements
contained in the Holding Company Merger Agreement; (vi) use its best
efforts to perform and fulfill all conditions and obligations to be
performed or fulfilled under the Holding Company Merger Agreement and
to effect the Holding Company Merger; (vii) permit Dalhart reasonable
access to all books, documents, papers and records relating to the
assets, stock ownership, properties, operations, obligations and
liabilities of Boatmen's in which Dalhart may have a reasonable and
legitimate interest in furtherance of the transactions contemplated
in the Holding Company Merger Agreement; and (viii) cause Boatmen's-
Texas to enter into the Subsidiary Merger Agreement with Citizens
39
<PAGE> 49
Bank and take all other actions and cooperate with Citizens Bank in
causing the Subsidiary Bank Merger to be effected. In addition, the
Holding Company Merger Agreement states that Boatmen's shall provide
certain employee benefit plans and programs to the employees of
Dalhart and its subsidiaries who continue their employment after the
Effective Time.
NO SOLICITATION
The Holding Company Merger Agreement provides that, unless and
until the Holding Company Merger Agreement has been terminated,
Dalhart will not solicit or encourage or, subject to the fiduciary
duties of its directors as advised by counsel, hold discussions or
negotiations with, or provide information to, any person in
connection with any proposal from any person relating to the
acquisition of all or a substantial portion of the business, assets
or stock of Dalhart or its subsidiaries. Dalhart is required to
promptly advise Boatmen's of its receipt of, and the substance of,
any such proposal or inquiry.
INDEMNIFICATION AND INSURANCE
Following the Effective Time, Boatmen's has agreed, among other
things, to (i) provide the directors and officers of Dalhart and its
subsidiaries with the same directors' and officers' liability
insurance coverage that Boatmen's provides to officers and directors
of its other banking subsidiaries generally and, in addition, for a
period of three years, to use its best efforts to continue Dalhart's
directors' and officers' liability insurance coverage with respect to
actions occurring prior to the Effective Time to the extent that such
coverage is obtainable for an aggregate premium not to exceed the
annual premium presently being paid by Dalhart (if the premium of
such insurance would exceed such maximum amount, Boatmen's has agreed
to use its best efforts to procure such level of insurance having the
coverage described herein as can be obtained for a premium equal to
such maximum amount); (ii) cause Boatmen's-Texas, as the surviving
corporation in the Holding Company Merger, for a period of six years
after the Effective Time, to indemnify and hold harmless the present
and former officers, directors, employees and agents of Dalhart and
its subsidiaries with respect to matters occurring on or prior to the
Effective Time to the full extent then permitted under the Missouri
General Business Corporation Act and Dalhart's Articles of
Incorporation as in effect on the date of the Holding Company Merger
Agreement, including provisions relating to advances of expenses
incurred in the defense of any action or suit; and (iii) cause any
successor or assignee of Boatmen's-Texas to assume the obligations
set forth in (i) and (ii) above, or, if Boatmen's-Texas should
liquidate, dissolve or otherwise wind up its business, then Boatmen's
shall assume such obligations.
WAIVER AND AMENDMENT
Prior to or at the Effective Time, any provision of the Holding
Company Merger Agreement, including, without limitation, the
conditions to consummation of the Holding Company Merger, may be
(i) waived, in writing by the party which is entitled to the benefits
thereof; or (ii) amended at any time by written agreement of the
parties, whether before or after approval of the Holding Company
Merger Agreement by the shareholders of Dalhart at the Dalhart
Special Meeting; provided, however, that after any such approval, no
such amendment or modification shall alter the amount or change the
form of the Dalhart Merger Consideration or alter or change any of
the terms of the Holding Company Merger Agreement if such alteration
or change would adversely affect the holders of Dalhart Common. It
is anticipated that a condition to the obligations of Dalhart and
Boatmen's to consummate the Holding Company Merger would be waived
only in those circumstances where the Board of Directors of Dalhart
or Boatmen's, as the case may be, deems such waiver to be in the best
interests of such company and its shareholders.
40
<PAGE> 50
EXPENSES AND FEES
In the event the Holding Company Merger Agreement is terminated
or the Holding Company Merger is abandoned, all costs and expenses
incurred in connection with the Holding Company Merger Agreement will
be paid by the party incurring such costs and expenses, and no party
shall have any liability to the other party for costs, expenses,
damages or otherwise, except that in the event the Holding Company
Merger Agreement is terminated on account of a willful breach of any
of the representations or warranties therein or any breach of the
agreements set forth therein, the non-breaching party is entitled to
seek damages against the breaching party.
THE SUBSIDIARY BANK MERGER (APPLICABLE TO CITIZENS BANK SHAREHOLDERS)
CITIZENS BANK MERGER CONSIDERATION
The Subsidiary Merger Agreement provides that each share of
Citizens Bank Common, other than shares held by any shareholder
properly exercising dissenters' rights under the Texas Banking Code
(the "Texas Banking Law") and shares held by Dalhart-Delaware, will
be converted, in the Subsidiary Bank Merger, into the right to
receive 35.2840 shares of Boatmen's Common (the "Citizens Bank
Conversion Ratio"), together with any rights attached thereto under
or by virtue of the Rights Agreement, dated August 14, 1990, between
Boatmen's and Boatmen's Trust Company, as Rights Agent (as described
on page 62), plus cash in lieu of fractional shares (as described
herein) (the "Citizens Bank Merger Consideration"). A portion of the
Citizens Bank Merger Consideration is subject to an Escrow Agreement
described herein. The Citizens Bank Conversion Ratio was determined
through negotiations, taking into account the relative value of
Boatmen's Common and Citizens Bank Common, between Boatmen's and
Citizens Bank.
No fractional shares of Boatmen's Common will be issued. In the
event a holder of shares of Citizens Bank Common would be entitled,
in the aggregate, to a fractional share interest in Boatmen's Common,
then in lieu of issuing such fractional share, Boatmen's will pay to
such holder an amount of cash equal to such fraction multiplied by
the average closing price of a share of Boatmen's Common on the
Nasdaq on the business day immediately preceding the date on which
the Effective Time occurs.
If, prior to the Effective Time, a share of Boatmen's Common
would be changed into a different number of shares of Boatmen's
Common or a different class of shares by reason of reclassification,
recapitalization, splitup, exchange of shares or readjustment, or if
a stock dividend thereon should be declared with a record date within
such period (a "Share Adjustment"), then the number of shares of
Boatmen's Common into which a share of Citizens Bank Common would be
converted pursuant to the Subsidiary Merger Agreement will be
appropriately and proportionately adjusted so that each shareholder
of Citizens Bank will be entitled to receive such number of shares of
Boatmen's Common as such shareholder would have received pursuant to
such Share Adjustment had the record date thereof been immediately
following the Effective Time.
ESCROW OF CITIZENS BANK MERGER CONSIDERATION
Dalhart, Dalhart-Delaware, Boatmen's, Boatmen's-Texas and
Citizens Bank will enter into an Escrow Agreement (the "Escrow
Agreement") to provide for the escrow of a portion of the Citizens
Bank Merger Consideration, as described herein. The purpose of the
Escrow Agreement is to provide a reserve from the aggregate Citizens
Bank Merger Consideration for the satisfaction and payment of any
judgment on or settlement of certain pending litigation against
Citizens Bank, certain of the employees and others styled
41
<PAGE> 51
Western National Bank v. Citizens State Bank, Curtis Beard, Prestige Lending
- ----------------------------------------------------------------------------
Corporation and Robert R. Mulroy (District Court of Dallas County,
- --------------------------------
Texas, Cause No. 94-04206-L) (the "WNB Claim"), and all costs and
expenses incurred in responding to and defending against the WNB
Claim. The WNB Claim alleges certain business torts against Citizens
Bank and others in connection with the generation of certain
mortgage-related business sought by the claimant, a competing
financial institution. See "LEGAL PROCEEDINGS."
Pursuant to the terms of the Subsidiary Bank Merger Agreement and
the Escrow Agreement, a portion of the Citizens Bank Merger
Consideration equal to the quotient of (a) the number of shares of
Boatmen's Common as equals the quotient of $70,450 divided by the
Boatmen's Average Price and (b) the number of shares of Citizens Bank
Common issued and outstanding immediately prior to the Effective Time
which are held by shareholders other than Dalhart-Delaware and who
have not duly exercised and perfected their dissenters' rights under
the Texas Law, will be issued and delivered by Boatmen's to an escrow
agent on the Closing Date (the "Citizens Bank Escrow Shares"). The
balance of the Citizens Bank Merger Consideration will be issued to
the holders of Citizens Bank Common. During the period in which the
Citizens Bank Escrow Shares are held by the escrow agent pursuant to
the Escrow Agreement, shareholders of Citizens Bank Common who would
otherwise be entitled to receive the Citizens Bank Escrow Shares but
for the Escrow Agreement (the "Eligible Citizens Bank Shareholders")
will be entitled to receive their pro rate share of any dividend or
other distribution which may be paid on the Citizens Bank Escrow
Shares. In addition, each Eligible Citizens Bank Shareholder is
entitled to exercise all voting rights with respect to his or her pro
rata interest in the Citizens Bank Escrow Shares.
The Eligible Citizens Bank Shareholders are to be represented by
a Shareholders' Committee comprised of three individuals. This
Shareholder's Committee also represents the Eligible Dalhart
Shareholders. The Shareholders' Committee and Boatmen's-Amarillo, as
successor by merger with Citizens Bank, will consult with one another
regarding resolution of the WNB Claim.
Upon termination of the Escrow Agreement by reason of resolution
or termination of the WNB Claim, the Citizens Bank Escrow Shares,
less such number of the Citizens Bank Escrow Shares as have a value
equal to the amount of any judgment or settlement and all costs and
expenses in connection with the WNB Claim, would be distributed to
the Eligible Citizens Bank Shareholders. The full text of the Escrow
Agreement is attached as Exhibit C to this Joint Proxy
Statement/Prospectus and is incorporated herein by this reference.
FORM OF SUBSIDIARY BANK MERGER
The Subsidiary Merger Agreement provides that Citizens Bank shall
merge with and into Boatmen's-Amarillo and Boatmen's-Amarillo will be
the surviving bank.
CONDUCT OF BUSINESS PENDING THE SUBSIDIARY BANK MERGER;
LIMITATIONS ON DIVIDENDS AND SALES OF ASSETS
Pursuant to the Subsidiary Merger Agreement, Citizens Bank has
agreed to carry on its business in the ordinary course of business.
Except for the payment of a dividend in the amount of $91,800, the
Subsidiary Merger Agreement provides that Citizens Bank may not
declare or pay any dividend to its shareholders between the date of
the Subsidiary Merger Agreement and the Effective Time. The
Subsidiary Merger Agreement also provides that, except as expressly
permitted in the Holding Company Merger Agreement, Citizens Bank may
not sell or otherwise dispose of any of its assets in any manner.
42
<PAGE> 52
CERTAIN CONDITIONS TO CONSUMMATION OF THE SUBSIDIARY BANK MERGER;
REGULATORY APPROVALS
The Subsidiary Bank Merger is conditioned upon the prior or
simultaneous consummation of the Holding Company Merger as
contemplated by the Holding Company Merger Agreement. The Subsidiary
Bank Merger is also subject to approval of the shareholders of
Citizens Bank and regulatory approval from the O.C.C. An application
has been filed with the O.C.C. for the approval of the Subsidiary
Bank Merger and is pending.
TERMINATION OR ABANDONMENT
The Subsidiary Merger Agreement may be terminated prior to the
Effective Time: (i) by the mutual consent of the board of directors
of Citizens Bank and Boatmen's-Amarillo before or after the approval
of the shareholders of either party of the Subsidiary Bank Merger;
(ii) automatically if the Subsidiary Bank Merger is not consummated
by June 30, 1995, unless extended, in writing, prior to such date by
mutual action of the boards of directors of Citizens Bank and
Boatmen's-Amarillo; and (iii) automatically in the event that the
Holding Company Merger Agreement is terminated without the
transactions contemplated thereby being consummated as provided
therein.
DISSENTERS' RIGHTS
The rights of shareholders of a Texas banking association
(Citizens Bank is a Texas banking association) who choose to dissent
from a proposed merger of such bank are governed by the Texas Banking
Law. An excerpt of the Texas Banking Law (Article 342-305), which is
attached as Exhibit E to this Joint Proxy Statement/Prospectus,
provides that a shareholder may dissent from a proposed merger by
following the procedure provided by Article 5.12 of the Texas Law.
That procedure is detailed under "THE ACQUISITION--The Holding
Company Merger--Dissenters' Rights" herein. However, the limitations
of Article 5.11 are not specifically incorporated into the Texas
Banking Law. These limitations concern the applicability of
dissenters' rights to mergers involving Texas corporations where the
shares of the corporation are not listed on a national securities
exchange or where there are not more than 2,000 shareholders of
record. In addition, the requirement of Article 5.13, that
shareholders must submit, within 20 days, the certificates
representing his or her shares to the surviving corporation for
notation that demand has been made, is not expressly incorporated by
Article 342-305 of the Texas Banking Law.
EXCHANGE OF CITIZENS BANK STOCK CERTIFICATES; FRACTIONAL SHARES
The conversion of Citizens Bank Common into Boatmen's Common
(other than any shares as to which dissenters' rights are properly
exercised and other than shares held by Dalhart-Delaware) will occur
by operation of law at the Effective Time. After the Effective Time,
certificates theretofore evidencing shares of Citizens Bank Common
(such certificate, other than certificates held by shareholders
exercising their dissenters' rights, are collectively referred to
herein as the "Citizens Bank Certificates") which may be exchanged
for shares of Boatmen's Common will be deemed, for all corporate
purposes other than the payment of dividends and other distributions
on such shares, to evidence ownership of and entitlement to receive
such shares of Boatmen's Common.
As soon as reasonably practicable after the Effective Time, and
in no event more than 10 business days after the Effective Time,
Boatmen's Trust Company (the "Exchange Agent") will mail a
transmittal letter and instructions to each record holder of a
Citizens Bank Certificate whose shares were converted into the right
to receive the Citizens Bank Merger Consideration (less such holder's
beneficial interest in the shares of Boatmen's Common held pursuant
to the Escrow Agreement), advising such holder of the number
43
<PAGE> 53
of shares of Boatmen's Common such holder is entitled to receive
pursuant to the Subsidiary Bank Merger, of the amount of cash such
holder is due in lieu of a fractional share of Boatmen's Common, and
of the procedures for surrendering such Citizens Bank Certificates in
exchange for a Certificate for the number of whole shares of
Boatmen's Common, and a check for the cash amount (if any) such
holder is entitled to receive in lieu of fractional shares. The
letter of transmittal will also specify that delivery will be
effected, and risk of loss and title to the Citizens Bank
Certificates will pass, only upon proper delivery of the Citizens
Bank Certificates to the Exchange Agent and will be in such form and
have such other provisions as Boatmen's may reasonably specify.
SHAREHOLDERS OF CITIZENS BANK ARE REQUESTED NOT TO SURRENDER THEIR
CITIZENS BANK CERTIFICATES FOR EXCHANGE UNTIL SUCH LETTER OF
TRANSMITTAL AND INSTRUCTIONS ARE RECEIVED. The shares of Boatmen's
Common into which Citizens Bank Common will be converted in the
Subsidiary Bank Merger will be deemed to have been issued at the
Effective Time. Unless and until the Citizens Bank Certificates are
surrendered, along with a duly executed letter of transmittal, any
other required documents and notification of the holder's federal
taxpayer identification number, dividends on the shares of Boatmen's
Common issuable with respect to such Citizens Bank Common, which
would otherwise be payable, will not be paid to the holders of such
Citizens Bank Certificates and, in such case, upon surrender of the
Citizens Bank Certificates, and a duly executed Letter of
Transmittal, any other required documents and notification of
taxpayer identification number, there will be paid any dividends on
such shares of Boatmen's Common which became payable between the
Effective Time and the time of such surrender and notification. No
interest on any such dividends will accrue or be paid.
BOARD COMPOSITION
The Subsidiary Merger Agreement provides that, following the
Subsidiary Bank Merger, the present board of directors of Boatmen's-
Amarillo will continue to serve as the Board of Directors of
Boatmen's-Amarillo (as the bank surviving in the Subsidiary Bank
Merger) until the next annual meeting or until such time as their
successors have been elected and qualified.
INTERESTS OF CERTAIN PERSONS IN THE ACQUISITION
Insurance; Indemnification. The Holding Company Merger Agreement
provides that Boatmen's will provide the directors and officers of
Dalhart and its subsidiaries, after the Holding Company Merger, with
the same directors' and officers' liability insurance coverage that
Boatmen's provides to directors and officers of its other banking
subsidiaries generally and, in addition, for a period of three years
will use its best efforts to continue Dalhart's directors' and
officers' liability insurance coverage with respect to actions
occurring prior to the Effective Time to the extent that such
coverage is obtainable for an aggregate premium not to exceed the
annual premium presently being paid by Dalhart. If the premium of
such insurance would exceed such maximum amount, Boatmen's will use
its best efforts to procure such level of insurance having the
coverage described herein as can be obtained for an premium equal to
such maximum amount. The Holding Company Merger Agreement also
provides that for a period of six years after the Effective Time
Boatmen's will cause Boatmen's-Texas, as the surviving corporation in
the Holding Company Merger, or any successor of Boatmen's-Texas, to
indemnify the present and former directors, officers, employees and
agents of Dalhart and its subsidiaries against any liability arising
out of actions occurring prior to the Effective Time, to the extent
that such indemnification is then permitted under the Missouri
General Business Corporation Act and by Dalhart's Articles of
Incorporation as in effect on the date of the Holding Company Merger
Agreement, including provisions relating to advances of expenses
incurred in the defense of any action or suit.
Employee Benefits. The Holding Company Merger Agreement contains
certain provisions regarding employee benefits which are described
under "THE ACQUISITION -- Effect on Employee Benefit Plans."
44
<PAGE> 54
No member of Boatmen's management or Boatmen's Board of Directors
or any other affiliate of Boatmen's has an interest in the Holding
Company Merger, other than as a shareholder of Boatmen's generally.
EFFECTIVE TIME
The Holding Company Merger Agreement provides that the Holding
Company Merger will become effective upon the filing of a Certificate
of Merger with the Secretary of State of the State of Missouri, and
the Subsidiary Merger Agreement provides that the Subsidiary Bank
Merger will become effective on the date specified in the merger
approval to be issued by the O.C.C. It is presently anticipated that
the Holding Company Merger and the Subsidiary Bank Merger will be
consummated contemporaneously in the fourth quarter of 1994, but no
assurance can be given that such timetable will be met.
FEDERAL INCOME TAX CONSEQUENCES
The Acquisition is expected to qualify as two reorganizations
under Section 368(a) of the Code. Except for shareholders perfecting
their dissenters' rights, and cash received in lieu of a fractional
share interest in Boatmen's Common, holders of shares of Dalhart
Common and Citizens Bank Common will recognize no gain or loss on the
receipt of Boatmen's Common in the Holding Company Merger and the
Subsidiary Bank Merger, respectively, their aggregate basis in the
shares of Boatmen's Common received in the Holding Company Merger and
the Subsidiary Bank Merger, respectively, will be the same as their
aggregate basis in their shares of Dalhart Common converted in the
Holding Company Merger, or their shares of Citizens Bank Common
converted in the Subsidiary Bank Merger, as the case may be, and,
provided the shares surrendered are held as a capital asset, the
holding period of the shares of Boatmen's Common received by them
will include the holding period of their shares of Dalhart Common
converted in the Holding Company Merger or their shares of Citizens
Bank Common converted in the Subsidiary Bank Merger, as the case may
be. Cash received in lieu of fractional share interests and cash
received by shareholders exercising their dissenters' rights will be
treated as a distribution in full payment of such fractional share
interests, or shares surrendered in exercise of dissenters' rights,
resulting in capital gain or loss or ordinary income, as the case may
be, depending upon each shareholder's particular situation. The merger
of Dalhart-Delaware with Dalhart is expected to qualify as a tax free
liquidation under Section 332 of the Code.
Consummation of the Holding Company Merger is conditioned upon
receipt by Boatmen's of an opinion of its counsel to the effect that if
the Holding Company Merger is consummated in accordance with the terms
set forth in the Holding Company Merger Agreement and the Subsidiary Bank
Merger is consummated in accordance with the terms set forth in the
Subsidiary Bank Merger Agreement and assuming no adverse change in
applicable law, (i) each of the Holding Company Merger and Subsidiary
Bank Merger will constitute a reorganization within the meaning of
Section 368(a) of the Code; (ii) no gain or loss will be recognized by
the holders of shares of Dalhart Common or Citizens Bank Common stock
upon receipt of the Dalhart Merger Consideration (except for cash
received in lieu of fractional shares), in the case of the Dalhart, and
the Citizens Bank Merger Consideration, in the case of Citizens Bank;
(iii) the basis of shares of Boatmen's Common received by the
shareholders of Dalhart or Citizens Bank will be the same as the basis of
shares of Dalhart Common or Citizens Bank Common exchanged therefor; and
(iv) the holding period of the shares of Boatmen's Common received by
such shareholders will include the holding period of the shares of
Citizens Bank Common or Dalhart Common exchanged therefor, provided such
shares were held as capital assets as of the Effective Time.
The opinions will be predicated upon the facts set forth in
the Holding Company Merger Agreement, the Subsidiary Merger
Agreement, representations of each of Dalhart, Dalhart-Delaware,
Citizens Bank, Boatmen's, Boatmen's-Texas and Boatmen's-Amarillo.
Furthermore, the opinions will be based on the existing provisions
of the Code, currently applicable regulations promulgated under the
Code, current published administrative positions of the I.R.S. such
as revenue rulings and revenue procedures, and existing judicial
decisions, all of which are subject to change either prospectively
or retroactively. Any change in such authorities may adversely
affect the opinions. Counsel has no obligation to update the
opinions for any deletions or additions to or modification of any
law applicable to the Holding Company Merger or the Subsidiary Bank
Merger.
The opinions will reflect the legal judgment of counsel solely
on the issues presented and discussed therein. The issues in this
matter are complex. There are no published cases, rulings,
regulations or administrative positions to support the opinions
with respect to the Subsidiary Bank Merger. Accordingly, there can
be no assurance that the I.R.S. will agree with the opinions
expressed, nor can there be assurance that a court of competent
jurisdiction will agree with such opinions.
45
<PAGE> 55
IT IS RECOMMENDED THAT SHAREHOLDERS CONSULT THEIR OWN TAX
ADVISORS REGARDING THE FEDERAL, STATE AND FOREIGN INCOME TAX
CONSEQUENCES TO THEM OF THE HOLDING COMPANY MERGER AND THE SUBSIDIARY
BANK MERGER AND ANY OTHER TAX CONSIDERATIONS WHICH MAY BE APPLICABLE
TO THEM.
ACCOUNTING TREATMENT
It is anticipated that the Acquisition will qualify as a "pooling
of interests" for accounting and financial reporting purposes. Under
this method of accounting, the assets and liabilities of Boatmen's,
Dalhart and Citizens Bank will be carried forward after the Effective
Time into the consolidated financial statements of Boatmen's at their
recorded amounts; the consolidated income of Boatmen's will include
income of Boatmen's, Dalhart and Citizens Bank for the entire fiscal
year in which the Acquisition occurs; and the separately reported
income of Boatmen's, Dalhart and Citizens Bank for prior periods will
be combined and restated as consolidated income of Boatmen's.
The Holding Company Merger Agreement provides that a condition
to Boatmen's obligation to consummate the Holding Company Merger is
its receipt of an opinion from Ernst & Young, the independent public
accountants for Boatmen's, to the effect that the Holding Company
Merger and the Subsidiary Bank Merger will qualify for "pooling of
interests" accounting treatment under Accounting Principles Board
Opinion No. 16 if consummated in accordance with the Holding Company
Merger Agreement and the Subsidiary Merger Agreement, respectively.
In the event such condition is not met, the Holding Company Merger
would not be consummated unless the condition was waived by Boatmen's
and the approval of Dalhart shareholders entitled to vote on the
Holding Company Merger was resolicited if such change in accounting
treatment were deemed material to the financial condition and results
of operations of Boatmen's on a pro forma basis.
MANAGEMENT AND OPERATIONS AFTER THE ACQUISITION
It is anticipated that, effective as of the Effective Time of the
Holding Company Merger or thereafter, Citizens Bank will merge into
Boatmen's-Amarillo. Boatmen's-Amarillo will be the surviving bank in
the Subsidiary Bank Merger. Upon consummation of the Subsidiary Bank
Merger, the present offices of Citizens Bank will be operated as
branch offices of Boatmen's-Amarillo. The branch of Citizens Bank in
Amarillo, Texas will also be operated as a branch of Boatmen's-
Amarillo upon consummation of the Subsidiary Bank Merger; however, it
is anticipated that such branch would eventually be closed and that
the business of such branch would be consolidated with an existing
branch of Boatmen's-Amarillo located in Amarillo, Texas. It is not
anticipated that the management of Boatmen's, Boatmen's-Texas or
Boatmen's-Amarillo will be affected as a result of the Holding
Company Merger or the Subsidiary Bank Merger.
EFFECT ON EMPLOYEE BENEFIT PLANS
The Holding Company Merger Agreement provides that each employee
of Dalhart and Citizens Bank who continues as an employee following
the Effective Time will be entitled, as a new employee of a
subsidiary of Boatmen's, to participate in certain employee benefit
and stock plans that may be in effect for employees of all of
Boatmen's subsidiaries, from time to time, on the same basis as
similarly situated employees of other Boatmen's subsidiaries, subject
to the right of Boatmen's to amend or terminate any such plans or
programs in its discretion. Boatmen's will, for purposes of vesting
and any age or period of service
46
<PAGE> 56
requirements for commencement of participation with respect to any employee
benefit plans in which former employees of Dalhart and its subsidiaries may
participate, credit each such employee with his or her term of service with
Dalhart and Citizens Bank.
RESALE OF BOATMEN'S COMMON
The shares of Boatmen's Common issued pursuant to the Acquisition
will be freely transferable under the Securities Act except for
shares issued to any Dalhart or Citizens Bank shareholder who may be
deemed to be an "affiliate" of Dalhart, Citizens Bank or Boatmen's
for purposes of Rule 145 under the Securities Act. The Holding
Company Merger Agreement provides that each such affiliate will enter
into an agreement with Boatmen's providing that such affiliate will
not transfer any shares of Boatmen's Common received in the Holding
Company Merger except in compliance with the Securities Act and will
make no disposition of any shares of Dalhart Common or Boatmen's
Common (or any interest therein) during the period commencing 30 days
prior to the Effective Time through the date on which financial
results covering at least 30 days of combined operations of Boatmen's
and Dalhart after the Holding Company Merger have been published.
This Joint Proxy Statement/Prospectus does not cover resales of
shares of Boatmen's Common received by any person who may be deemed
to be an affiliate of Dalhart or Citizens Bank. Persons who may be
deemed to be affiliates of Dalhart or Citizens Bank generally include
individuals who, or entities which, control, are controlled by or are
under common control with Dalhart or Citizens Bank and will include
directors and certain officers of Dalhart or Citizens Bank and may
include principal shareholders of Dalhart or Citizens Bank.
PRO FORMA FINANCIAL DATA
The following unaudited pro forma combined condensed balance
sheet as of June 30, 1994, and the pro forma combined condensed
statements of income for the six months ended June 30, 1994 and 1993,
and for each of the years in the three-year period ended December 31,
1993, give effect to the Acquisition based on the historical
consolidated financial statements of Boatmen's and its subsidiaries
and Dalhart and its subsidiaries under the assumptions and
adjustments set forth in the accompanying notes to the pro forma
financial statements.
The pro forma combined condensed balance sheet assumes the
Holding Company Merger and Subsidiary Bank Merger were consummated on
June 30, 1994, and the pro forma condensed statements of income
assume that the Holding Company Merger and the Subsidiary Bank Merger
were consummated on January 1 of each period presented. The pro
forma statements may not be indicative of the results that actually
would have occurred if the Holding Company Merger and the Subsidiary
Bank Merger had been in effect on the dates indicated or which may be
obtained in the future. The pro forma financial statements should be
read in conjunction with the historical consolidated financial
statements and notes thereto of Boatmen's, Dalhart and Citizens Bank
either incorporated by reference herein or contained elsewhere in
this Joint Proxy Statement/Prospectus.
The following pro forma combined condensed balance sheet and
condensed statements of income include:
(a) Boatmen's historical consolidated before the pending
acquisitions of Dalhart and Citizens Bank, and Worthen.
47
<PAGE> 57
(b) Worthen's historical consolidated. The Worthen acquisition
will be accounted for as a pooling of interests and is
expected to be completed in the first quarter of 1995. See
"THE PARTIES -- Boatmen's Bancshares, Inc. -- Pending
Acquisitions." Accordingly, historical financial data is
included for Worthen for all periods presented.
(c) The combined statements of Boatmen's and Worthen for the
periods described above have been designated herein as
Boatmen's Pro Forma.
(d) Dalhart historical consolidated. See Dalhart and Citizens
Bank Consolidating Condensed Balance Sheet on page 50.
(e) The combined statements of Boatmen's, Worthen and Dalhart
and Citizens Bank consolidated have been designated herein
as Pro Forma Combined.
48
<PAGE> 58
<TABLE>
PRO FORMA COMBINED CONDENSED BALANCE SHEET
(Unaudited)
June 30, 1994
(In Thousands)
<CAPTION>
(b)
(a) WORTHEN (c) (d) (e)
BOATMEN'S BANKING BOATMEN'S DALHART PRO FORMA
BANCSHARES, INC. CORPORATION PRO FORMA BANCSHARES, INC. ADJUSTMENTS COMBINED
---------------- ----------- --------- ---------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash and noninterest-bearing
balance due from banks $1,608,925 $224,425 $1,833,350 $6,444 $1,839,794
Short term investments 78,543 941 79,484 294 79,778
Securities
Held to Maturity 4,107,369 1,140,717 5,248,086 14,869 5,262,955
Available for Sale 4,424,239 157,845 4,582,084 39,764 4,621,848
Trading 25,026 25,026 25,026
Federal funds sold and
securities purchased
under resale agreements 392,865 42,300 435,165 2,350 437,515
Loans, net of unearned 15,701,434 1,809,541 17,510,975 63,060 17,574,035
Less reserve for loan losses 343,918 33,541 377,459 890 378,349
--------------------------------------------------------------------------------------------------
Loans, net 15,357,516 1,776,000 17,133,516 62,170 17,195,686
--------------------------------------------------------------------------------------------------
Property and equipment 516,165 96,207 612,372 2,151 614,523
Intangibles 261,066 27,645 288,711 2,191 290,902
Other assets 811,778 60,754 872,532 2,001 874,533
-------------------------------------------------------------------------------------------------
Total Assets $27,583,492 $3,526,834 $31,110,326 $132,234 $0 $31,242,560
==================================================================================================
LIABILITIES AND EQUITY:
Noninterest-bearing deposits $4,345,609 $580,268 $4,925,877 $23,561 $4,949,438
Interest-bearing deposits 15,897,073 $2,388,152 18,285,225 92,275 18,377,500
--------------------------------------------------------------------------------------------------
Total deposits 20,242,682 2,968,420 23,211,102 115,836 23,326,938
--------------------------------------------------------------------------------------------------
Federal funds purchased and
other short-term borrowings 4,333,668 180,383 4,514,051 1,522 4,515,573
Long-term debt 514,262 43,035 557,297 259 557,556
Capital lease obligation 38,791 1,850 40,641 40,641
Other liabilities 279,941 39,797 319,738 1,410 321,148
--------------------------------------------------------------------------------------------------
Total liabilities 25,409,344 3,233,485 28,642,829 119,027 28,761,856
--------------------------------------------------------------------------------------------------
Redeemable preferred stock 1,142 1,142 1,142
Stockholders' equity:
Common stock 104,722 17,340(1) 122,062 1,000 (316)(2) 122,746
Surplus 794,966 164,146(1) 959,112 1,215 316 (2) 960,643
Retained earnings 1,308,862 114,153 1,423,015 11,295 1,434,310
Unrealized net appreciation
(depreciation), available for
sale securities (35,544) (2,290) (37,834) (303) (38,137)
--------------------------------------------------------------------------------------------------
Total stockholder's equity 2,173,006 293,349 2,466,355 13,207 2,479,562
--------------------------------------------------------------------------------------------------
Total liabilities and
stockholders' equity $27,583,492 $3,526,834 $31,110,326 $132,234 $0 $31,242,560
==================================================================================================
Stockholders' equity per share $20.75 $20.20
=================== ============
<FN>
(1) Based on the exchange ratio of 1.0 share of Boatmen's Common for
each share of Worthen common stock, including stock options,
17,340,392 additional shares of Boatmen's Common would have been
issued as of June 30, 1994, in the acquisition of Worthen.
(2) Reflects conversion of outstanding shares of Dalhart Common using
the exchange ratio of 6.3599 shares of Boatmen's Common for each
outstanding share of acquiree, and 35.2840 shares of Boatmen's
Common for each outstanding share of Citizens Bank Common held by
minority shareholders.
</TABLE>
49
<PAGE> 59
<TABLE>
DALHART CONSOLIDATING CONDENSED BALANCE SHEET
(UNAUDITED)
JUNE 30, 1994
(IN THOUSANDS)
<CAPTION>
CITIZENS STATE
BANK OF DALHART DALHART
DALHART PARENT ELIMINATIONS BANCSHARES, INC.
-------------- ------- ------------ ----------------
<S> <C> <C> <C> <C>
ASSETS:
Cash and noninterest-bearing balance due
from banks $6,444 $24 ($24) $6,444
Short term investments 294 294
Securities
Held to Maturity 14,869 14,869
Available for Sale 39,764 39,764
Trading
Federal funds sold and securities purchased
under resale agreement 2,350 2,350
Loans, net of unearned 63,060 63,060
Less reserve for loans losses 890 890
-----------------------------------------------------------------------
Loans, net 62,170 62,170
-----------------------------------------------------------------------
Property and equipment 2,151 2,151
Intangibles 832 1,359 2,191
Other Assets 1,902 24,354 (24,255) 2,001
-----------------------------------------------------------------------
Total Assets $130,776 $25,737 ($24,279) $132,234
=======================================================================
LIABILITIES AND EQUITY:
Noninterest-bearing deposits $23,585 ($24) $23,561
Interest-bearing deposits 92,275 92,275
-----------------------------------------------------------------------
Total Deposits 115,860 (24) 115,836
-----------------------------------------------------------------------
Federal funds purchased and other short-term
borrowings 1,111 411 1,522
Long-term debt 259 259
Other liabilities 507 12 891 1,410
-----------------------------------------------------------------------
Total liabilities 117,737 423 867 119,027
-----------------------------------------------------------------------
Stockholder's equity:
Common stock 2,000 1,001 (2,001) 1,000
Surplus 6,000 8,291 (13,076) 1,215
Retained earnings 5,364 16,672 (10,741) 11,295
Unrealized net appreciation (depreciation),
available for sale securities (325) (650) 672 (303)
-----------------------------------------------------------------------
Total stockholder's equity 13,039 25,314 (25,146) 13,207
-----------------------------------------------------------------------
Total liabilities and stockholder's equity $130,776 $25,737 ($24,279) $132,234
=======================================================================
</TABLE>
50
<PAGE> 60
<TABLE>
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
(UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1994
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
WORTHEN
BOATMEN'S BANKING BOATMEN'S DALHART PRO FORMA
BANCSHARES, INC. CORPORATION PRO FORMA BANCSHARES, INC. COMBINED
---------------- ----------- --------- ---------------- ---------
<S> <C> <C> <C> <C> <C>
Interest Income $839,621 $106,870 $946,491 $4,565 $951,056
Interest Expense 334,484 36,465 370,949 1,393 372,342
-----------------------------------------------------------------------------------------
Net Interest Income 505,137 70,405 575,542 3,172 578,714
Provision for loan losses 13,006 753 13,759 0 13,759
-----------------------------------------------------------------------------------------
Net Interest Income after
provision for loan losses 492,131 69,652 561,783 3,172 564,955
Noninterest income 259,857 35,294 295,151 320 295,471
Noninterest expense 487,117 67,278 554,395 2,413 556,808
-----------------------------------------------------------------------------------------
Income before income taxes 264,871 37,668 302,539 1,079 303,618
Income tax expense 91,245 13,839 105,084 235 105,319
-----------------------------------------------------------------------------------------
Net income $173,626 $23,829 $197,455 $844 $198,299
=========================================================================================
Net income available to
common shareholders $173,586 $23,829 $197,415 $844 $198,259
=========================================================================================
Net income per common share $1.66 $1.62 $1.62
==================== =========== ===============
Average shares outstanding 104,631 121,644 122,328
==================== =========== ===============
<FN>
See Notes to Pro Forma Combined Condensed Statements of Income
</TABLE>
51
<PAGE> 61
<TABLE>
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
(UNAUDITED)
SIX MONTHS ENDED JUNE 30, 1993
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
WORTHEN
BOATMEN'S BANKING BOATMEN'S DALHART PRO FORMA
BANCSHARES, INC. CORPORATION PRO FORMA BANCSHARES, INC. COMBINED
---------------- ----------- --------- ---------------- ---------
<S> <C> <C> <C> <C> <C>
Interest Income $793,513 $105,071 $898,584 $4,619 $903,203
Interest Expense 313,922 40,202 354,124 1,506 355,630
-----------------------------------------------------------------------------------------
Net Interest Income 479,591 64,869 544,460 3,113 547,573
Provision for loan losses 35,291 3,239 38,530 (400) 38,130
-----------------------------------------------------------------------------------------
Net Interest Income after
provision for loan losses 444,300 61,630 505,930 3,513 509,443
Noninterest income 234,596 37,463 272,059 289 272,348
Noninterest expense 448,318 78,099 526,417 2,188 528,605
-----------------------------------------------------------------------------------------
Income before income taxes 230,578 20,994 251,572 1,614 253,186
Income tax expense 71,609 6,435 78,044 490 78,534
-----------------------------------------------------------------------------------------
Net income $158,969 $14,559 $173,528 $1,124 $174,652
=========================================================================================
Net income available to
common shareholders $158,925 $14,559 $173,484 $1,124 $174,608
=========================================================================================
Net income per common share $1.54 $1.45 $1.45
==================== ========== ===============
Average shares outstanding 103,282 120,009 120,693
==================== ========== ===============
<FN>
See Notes to Pro Forma Combined Condensed Statements of Income
</TABLE>
52
<PAGE> 62
<TABLE>
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
(UNAUDITED)
YEAR ENDED DECEMBER 31, 1993
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
WORTHEN
BOATMEN'S BANKING BOATMEN'S DALHART PRO FORMA
BANCSHARES, INC. CORPORATION PRO FORMA BANCSHARES, INC. COMBINED
---------------- ----------- --------- ---------------- ---------
<S> <C> <C> <C> <C> <C>
Interest Income $1,613,554 $212,082 $1,825,636 $9,607 $1,835,243
Interest Expense 631,974 79,264 711,238 3,122 714,360
-----------------------------------------------------------------------------------------
Net Interest Income 981,580 132,818 1,114,398 6,485 1,120,883
Provision for loan losses 60,184 4,628 64,812 (522) 64,290
-----------------------------------------------------------------------------------------
Net Interest Income after
provision for loan losses 921,396 128,190 1,049,586 7,007 1,056,593
Noninterest income 493,251 66,591 559,842 718 560,560
Noninterest expense 950,421 147,199 1,097,620 4,497 1,102,117
-----------------------------------------------------------------------------------------
Income before income taxes 464,226 47,582 511,808 3,228 515,036
Income tax expense 146,807 15,332 162,139 784 162,923
-----------------------------------------------------------------------------------------
Net income $317,419 $32,250 $349,669 $2,444 $352,113
=========================================================================================
Net income available to
common shareholders $317,334 $32,250 $349,584 $2,444 $352,028
=========================================================================================
Net income per common share $3.07 $2.91 $2.91
==================== ========== ===============
Average shares outstanding 103,490 120,307 120,991
==================== ========== ===============
<FN>
See Notes to Pro Forma Combined Condensed Statements of Income
</TABLE>
53
<PAGE> 63
<TABLE>
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
(UNAUDITED)
YEAR ENDED DECEMBER 31, 1992
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
WORTHEN
BOATMEN'S BANKING BOATMEN'S DALHART PRO FORMA
BANCSHARES, INC. CORPORATION PRO FORMA BANCSHARES, INC. COMBINED
---------------- ----------- --------- ---------------- ---------
<S> <C> <C> <C> <C> <C>
Interest Income $1,615,249 $229,968 $1,845,217 $8,411 $1,853,628
Interest Expense 737,533 99,780 837,313 3,154 840,467
-----------------------------------------------------------------------------------------
Net Interest Income 877,716 130,188 1,007,904 5,257 1,013,161
Provision for loan losses 136,626 2,849 139,475 0 139,475
-----------------------------------------------------------------------------------------
Net Interest Income after
provision for loan losses 741,090 127,339 868,429 5,257 873,686
Noninterest income 452,082 57,458 509,540 578 510,118
Noninterest expense 871,928 144,150 1,016,078 3,637 1,019,715
-----------------------------------------------------------------------------------------
Income before income taxes 321,244 40,647 361,891 2,198 364,089
Income tax expense 92,518 6,710 99,228 726 99,954
-----------------------------------------------------------------------------------------
Net income $228,726 $33,937 $262,663 $1,472 $264,135
=========================================================================================
Net income available to
common shareholders $228,638 $33,937 $262,575 $1,472 $264,047
=========================================================================================
Net income per common share $2.29 $2.25 $2.25
==================== ============ ===============
Average shares outstanding 100,017 116,606 117,290
==================== ============ ===============
<FN>
See Notes to Pro Forma Combined Condensed Statements of Income
</TABLE>
54
<PAGE> 64
<TABLE>
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
(UNAUDITED)
YEAR ENDED DECEMBER 31, 1991
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
WORTHEN
BOATMEN'S BANKING BOATMEN'S DALHART PRO FORMA
BANCSHARES, INC. CORPORATION PRO FORMA BANCSHARES, INC. COMBINED
---------------- ----------- --------- ---------------- ---------
<S> <C> <C> <C> <C> <C>
Interest Income $1,743,647 $240,693 $1,984,340 $9,171 $1,993,511
Interest Expense 1,001,115 131,730 1,132,845 4,920 1,137,765
-----------------------------------------------------------------------------------------
Net Interest Income 742,532 108,963 851,495 4,251 855,746
Provision for loan losses 114,658 3,359 118,017 0 118,017
-----------------------------------------------------------------------------------------
Net Interest Income after
provision for loan losses 627,874 105,604 733,478 4,251 737,729
Noninterest income 355,704 53,350 409,054 492 409,546
Noninterest expense 752,367 126,306 878,673 3,072 881,745
-----------------------------------------------------------------------------------------
Income before income taxes 231,211 32,648 263,859 1,671 265,530
Income tax expense 60,013 3,912 63,925 414 64,339
-----------------------------------------------------------------------------------------
Net income $171,198 $28,736 $199,934 $1,257 $201,191
=========================================================================================
Net income available to
common shareholders $171,109 $28,736 $199,845 $1,257 $201,102
=========================================================================================
Net income per common share $1.77 $1.78 $1.78
==================== ============ ===============
Average shares outstanding 96,895 112,376 113,060
==================== ============ ===============
</TABLE>
NOTES TO PRO FORMA COMBINED CONDENSED STATEMENTS OF INCOME
(Unaudited)
1. The change in average shares outstanding shown in the pro forma analysis
reflects the issuance of 1.0 shares of Boatmen's Common for each share of
Worthen Banking Corporation common stock. The average shares also reflect
the issuance of 6.3599 shares of Boatmen's Common for each outstanding
share of Dalhart and 35.2840 shares of Boatmen's Common for each
outstanding share of Citizens State Bank of Dalhart held by minority
shareholders.
55
<PAGE> 65
DESCRIPTION OF BOATMEN'S CAPITAL STOCK
Boatmen's Restated Articles of Incorporation currently authorize
the issuance of 150,000,000 shares of common stock, par value $1.00
per share, and 10,300,000 preferred shares, no par value per share,
of which 35,045 shares are designated "7% Cumulative Redeemable
Preferred Stock, Series B" $100.00 stated value per share (the
"Boatmen's Series B Preferred Stock").
As of ------------, 1994, approximately ---- million shares of
Boatmen's Common were issued and outstanding, 11,421 shares of
Boatmen's Series B Preferred Stock were issued and outstanding, and
1,500,000 shares of Junior Participating Preferred Stock, Series C,
stated value $1.00 per share (a "Preferred Share") were reserved for
issuance with none outstanding. For a description of the Preferred
Shares, see "COMPARISON OF SHAREHOLDER RIGHTS--Shareholder Rights
Plan."
With respect to the remaining authorized but unissued preferred
shares, Boatmen's Restated Articles of Incorporation provide that its
Board of Directors may, by resolution, cause such preferred shares to
be issued from time to time, in series, and fix the powers,
designations, preferences and relative, participating optional and
other rights and qualifications, limitations and restrictions of such
shares.
The following is a brief description of the terms of Boatmen's
Common and Boatmen's Series B Preferred Stock.
BOATMEN'S COMMON
Dividend Rights. The holders of Boatmen's Common are entitled
to share ratably in dividends when, as and if declared by the Board
of Directors of Boatmen's from funds legally available therefor, after
full cumulative dividends have been paid, or declared and funds
sufficient for the payment thereof set apart, on all shares of
Boatmen's Series B Preferred Stock, and any other class or series of
preferred stock ranking superior as to dividends to Boatmen's Common.
The ability of the subsidiary banks of Boatmen's to pay cash
dividends, which are expected to be Boatmen's principal source of
income, is restricted by applicable banking laws.
Voting Rights. Each holder of Boatmen's Common has one vote for
each share held on matters presented for consideration by the
shareholders, except that, in the election of directors, such
shareholders have cumulative voting rights which entitle each such
shareholder to the number of votes which equals the number of shares
held by the shareholder multiplied by the number of directors to be
elected. All such cumulative votes may be cast for one candidate for
election as a director or may be distributed among two or more
candidates.
Classification of Board of Directors. The Board of Directors of
Boatmen's is divided into three classes, and the directors are elected
by classes to three-year terms, so that approximately one-third (1/3)
of the directors of Boatmen's will be elected at each annual meeting
of the shareholders. Although it promotes stability and continuity
of the Board of Directors, classification of the Board of Directors
may have the effect of decreasing the number of directors that could
otherwise be elected by anyone who obtains a controlling interest in
Boatmen's Common and thereby could impede a change in control of
Boatmen's. Because fewer directors will be elected at each annual
meeting, such classification also will reduce the effectiveness of
cumulative voting as a means of establishing or increasing minority
representation on the Board of Directors.
56
<PAGE> 66
Preemptive Rights. The holders of Boatmen's Common have no
preemptive right to acquire any additional unissued shares or treasury
shares of Boatmen's.
Liquidation Rights. In the event of liquidation, dissolution or
winding up of Boatmen's, whether voluntary or involuntary, the holders
of Boatmen's Common will be entitled to share ratably in any of its
assets or funds that are available for distribution to its
shareholders after the satisfaction of its liabilities (or after
adequate provision is made therefor) and after preferences on any
outstanding preferred stock.
Assessment and Redemption. Shares of Boatmen's Common will be,
when issued, fully paid and non-assessable. Such shares do not have
any redemption provisions.
BOATMEN'S SERIES B PREFERRED STOCK
Dividend Rights. Holders of shares of Series B Preferred Stock
will be entitled to receive, when and as declared by the Board of
Directors, out of any funds legally available for such purpose,
cumulative cash dividends at an annual dividend rate per share of
seven percent (7%) of the stated value thereof, payable quarterly.
Dividends on Boatmen's Series B Preferred Stock are cumulative and no
dividends can be declared or paid on any shares of Boatmen's Common
unless full cumulative dividends on Boatmen's Series B Preferred Stock
have been paid, or declared and funds sufficient for the payment
thereof set apart.
Liquidation Rights. In the event of the dissolution and
liquidation of Boatmen's, the holders of Boatmen's Series B Preferred
Stock will be entitled to receive, after payment of the full
liquidation preference on shares of any class or series of preferred
stock ranking superior to Boatmen's Series B Preferred Stock (if any
such shares are then outstanding) but before any distribution on
shares of Boatmen's Common, liquidating dividends of $100.00 per share
plus accumulated dividends.
Redemption. Shares of Boatmen's Series B Preferred Stock are
redeemable, at the option of the holders thereof, at the redemption
price of $100.00 per share plus accumulated dividends, provided, that
(i) full cumulative dividends have been paid, or declared and funds
sufficient for payment set apart, upon any class or series of
preferred stock ranking superior to Boatmen's Series B Preferred
Stock; and (ii) Boatmen's is not then in default with respect to any
sinking or analogous fund or call for tenders obligation or agreement
for the purchase or any class or series of preferred stock ranking
superior to Boatmen's Series B Preferred Stock.
Voting Rights. Each share of Boatmen's Series B Preferred Stock
has equal voting rights, share for share, with each share of Boatmen's
Common.
Superior Stock. Boatmen's may, without the consent of holders
of Boatmen's Series B Preferred Stock, issue preferred stock with
superior or equal rights or preferences.
COMPARISON OF SHAREHOLDER RIGHTS
The rights of holders of shares of Boatmen's Common are governed
by the corporate law of Missouri (the "Missouri Law"), the state of
Boatmen's incorporation, and by Boatmen's Restated Articles of
Incorporation, Bylaws and other corporate documents. The rights of
holders of shares of Dalhart Common are governed by the Texas Law and
by Dalhart's Articles of Incorporation, Bylaws and other corporate
documents. The rights of holders of Citizens Bank Common are governed
by Texas Banking Law, and by
57
<PAGE> 67
Citizens Bank's Articles of Association,
Bylaws and other corporate documents. The rights of holders of shares
of Dalhart Common and Citizens Bank Common differ in certain respects
from the rights which they would have as shareholders of Boatmen's.
A summary of the material differences among the respective rights of
holders of Dalhart Common, Citizens Bank Common and Boatmen's Common
is set forth herein.
SHAREHOLDER VOTE REQUIRED FOR CERTAIN TRANSACTIONS
Overview. The Restated Articles of Incorporation and Bylaws of
Boatmen's contain certain provisions which mandate a greater
affirmative shareholder vote to approve certain types of transactions
and proposals than that otherwise required by the Missouri Law. The
Texas Law and the Texas Banking Law provides that the affirmative
vote of the holders of at least two-thirds (2/3) of a corporation's
and bank's outstanding shares entitled to vote thereon is required
with respect to certain corporate actions, including approval of the
Holding Company Merger Agreement and the Subsidiary Merger Agreement.
As permitted by the Texas Law, however, Dalhart's Articles of
Incorporation and Bylaws contains certain provisions which require
only the approval of a majority of outstanding shares for an action
of the corporation notwithstanding any such provision of the Texas Law
which may require more than a simple majority. Citizens Bank's
Articles of Association and Bylaws do not have a similar provision.
Business Combinations. Boatmen's Restated Articles of
Incorporation provide that, in addition to any affirmative vote
required by law, any "Business Combination" (as defined herein) will
require the affirmative vote of the holders of not less than eighty
percent (80%) of Boatmen's Common. Notwithstanding the foregoing,
however, Boatmen's Restated Articles of Incorporation also provide
that any such Business Combination may be approved by the affirmative
vote of shareholders as required by law if it has been approved by
seventy-five percent (75%) of the entire Board of Directors of
Boatmen's. The term "Business Combination" means (i) any merger or
consolidation of Boatmen's or any subsidiary of Boatmen's with (a) any
individual or entity who, together with certain affiliates or
associates, owns greater than five percent (5%) of Boatmen's Common
(a "Substantial Shareholder"); or (b) any other corporation which,
after such merger or consolidation, would be a Substantial
Shareholder, regardless of which entity survives; (ii) any sale,
lease, exchange, mortgage, pledge, transfer or other disposition (in
one transaction or a series of transactions) to or with any
Substantial Shareholder of all or substantially all of the assets of
Boatmen's or any of its subsidiaries; (iii) the adoption of any plan
or proposal for the liquidation of Boatmen's by or on behalf of a
Substantial Shareholder; or (iv) any transaction involving Boatmen's
or any of its subsidiaries, if the transaction would have the effect,
directly or indirectly, of increasing the proportionate share of the
outstanding shares of any class of equity or convertible securities
of Boatmen's of which a Substantial Shareholder is the beneficial
owner.
The Texas Law provides that any merger or consolidation must be
approved by the affirmative vote of holders of at least two-thirds
(2/3) of the outstanding shares of each corporation entitled to vote
thereon, unless the board of directors requires a greater vote or vote
by class or by series. Notwithstanding the foregoing, Texas Law
permits the articles of incorporation to specifically provide that the
act of the shareholders on matters with respect to which an
affirmative vote of holders of a specified portion of the shares
entitled to vote is required, shall be the affirmative vote of holders
of a specified portion, but not less than a majority of the shares
entitled to vote on that matter. Dalhart's Articles of Incorporation
provide that any action which, under the provisions of the Texas Law,
is required to be authorized or approved by the holders of any
specified fraction in excess of one-half (1/2) shall, notwithstanding
any such provisions of the Texas Law, be deemed effectively and
properly authorized or approved if authorized or approved by the vote
of the holders of more than fifty percent (50%) of the outstanding
shares entitled to vote thereon. This includes a vote to approve the
Holding Company Merger. The Texas Banking Law provides that the owners
58
<PAGE> 68
of record of not less than two-thirds of the capital stock of
any solvent state banking association may by vote or written consent
authorize its officers and directors or managers, as appropriate, to
take such action as may be necessary to merge with, reorganize or
convert to a national bank. The Articles and Bylaws of Citizens Bank
do not contain a provision reducing below two-thirds the affirmative
vote required to approve a business combination.
Removal of Directors. Boatmen's Restated Articles of
Incorporation and Bylaws provide that at a meeting called expressly
for that purpose, a director or the entire Board of Directors (other
than directors elected by holders of preferred stock pursuant to
certain special rights) may be removed without cause only upon the
affirmative vote of the holders of not less than eighty percent (80%)
of the shares entitled to vote generally in an election of directors.
Notwithstanding the foregoing, however, if less than the entire Board
of Directors is to be removed without cause, no one of the directors
may be removed if the votes cast against his removal would be
sufficient to elect him if then cumulatively voted at an election of
the class of directors of which he is a part. At a meeting called
expressly for that purpose, a director (other than those elected by
holders of preferred stock), may be removed by the shareholders for
cause by the affirmative vote of the holders of a majority of the
shares entitled to vote upon his election.
The Texas Law provides that each director shall hold office
during the term for which he is elected until his successor has been
elected and qualified, or until his earlier resignation or removal.
Under the Texas Law, the by-laws or articles of incorporation of a
corporation may provide that at any meeting of shareholders called
expressly for that purpose, any director or the entire board of
directors may be removed, with or without cause, by a vote of the
holders of a specified portion, but not less than a majority of the
shares then entitled to vote at the election of directors. If,
however, the corporation has cumulative voting and less than the
entire board is to be removed, no director may be removed if the votes
against his removal would be sufficient to elect him. The Bylaws of
Dalhart expressly provide that at any meeting of shareholders called
expressly for that purpose, any director or the entire board of
directors may be removed, with or without cause, by a vote of the
holders of a majority of the shares then entitled to vote in the
election of directors. As cumulative voting for the election of
directors is prohibited by Dalhart's Articles of Incorporation, the
Texas Law limitation on removal of less than the full board does not
apply.
The Texas Banking Law provides a director shall hold office until
the director's successor has been elected and qualified unless removed
according to the articles of association or the bylaws. The Articles
and Bylaws of Citizens Bank do not contain any provisions addressing
the removal of directors. Accordingly, a director of Citizens Bank
cannot be removed pursuant to its existing Articles of Association and
Bylaws.
Amendments to Articles of Incorporation. Under the Missouri Law,
a corporation may amend its articles of incorporation upon receiving
the affirmative vote of the holders of a majority of its voting
shares; provided, however, that if the corporation's articles of
incorporation or bylaws provide for cumulative voting in the election
of directors, the number of directors of the corporation may not be
decreased to less than three by amendment to the corporation's
articles of incorporation when the number of shares voting against the
proposal for decrease would be sufficient to elect a director if the
shares were voted cumulatively at an election of three directors; and
provided, further, that a proposed amendment which provides that
Section 351.407 of the Missouri Law does not apply to "control share
acquisitions" of shares of a corporation requires the affirmative vote
of the holders of two-thirds (2/3) of such corporation's voting
shares.
Article XII of Boatmen's Restated Articles of Incorporation
provides that Boatmen's may amend, alter, change or repeal provisions
of the Restated Articles of Incorporation in the manner provided by
law, with the exception, however, of the provisions of the Restated
Articles relating to the classification and number of directors, the
approval of Business Combinations, and the aforementioned exceptions to
59
<PAGE> 69
Article XII, which require the affirmative vote of the holders of
eighty percent (80%) of Boatmen's Common then entitled to vote at a
meeting of shareholders called for that purpose.
Under the Texas Law, an amendment to the articles of
incorporation of a Texas corporation is adopted upon receiving the
affirmative vote of the holders of at least two-thirds (2/3) of the
outstanding shares entitled to vote thereon, unless any class or
series of shares is entitled to vote thereon as a class, in which
event, the proposed amendment shall be adopted upon receiving the
affirmative vote of the holders of at least two-thirds (2/3) of the
shares within each class or series of outstanding shares entitled to
vote thereon as a class and of at least two-thirds (2/3) of the total
outstanding shares entitled to vote thereon. In addition, Texas Law
provides that the holders of outstanding shares of a class or series,
whether or not entitled to vote as a class or series thereon by
provisions of the articles of incorporation, may do so if the
amendment directly affects their class or series of stock.
The Articles of Incorporation of Dalhart do not include any
provision related to the amendment of the Articles of Incorporation.
The Texas Banking Law requires the owners of record of not less
than two-thirds of the capital stock to approve an amendment of the
articles of association. However, such amendment is subject to the
approval of the Banking Commissioner of the State of Texas (the
"Banking Commissioner").
The Articles of Citizens Bank do not include specific provisions
relating to their amendment.
SPECIAL MEETINGS OF SHAREHOLDERS; SHAREHOLDER ACTION BY WRITTEN
CONSENT
The Missouri Law provides that any action required or permitted
to be taken at a meeting of shareholders may be taken without a
meeting if a consent, in writing, setting forth the action taken is
signed by the holders of all of the shares entitled to vote on the
subject matter. Boatmen's Bylaws provide that a special meeting of
shareholders may be called by the Chairman of the Board or the
President or by resolution of the Board of Directors whenever deemed
necessary. The business transacted at any such special meeting will
be confined to the purpose or purposes specified in the notice
therefor and the matters germane thereto.
The Texas Law provides that a special meeting of shareholders may
be called by the board of directors or by persons authorized in the
articles of incorporation or the bylaws or by the holders of at least
ten percent (10%) of all of the shares entitled to vote at the
proposed special meeting, unless the articles of incorporation provide
for a number of shares greater than or less than ten percent (10%),
but in no event shall the articles of incorporation provide for a
number of shares greater than fifty percent (50%). Only business
within the purpose or purposes described in the notice of meeting may
be conducted at a special meeting of the shareholders. The Texas Law
also provides that, unless otherwise provided for in the articles of
incorporation, any action required or permitted to be taken at a
meeting of shareholders may be taken without a meeting if a consent,
in writing, setting forth the action taken is signed by the holders
of all shares entitled to vote on the subject matter. Under the Texas
Law, the articles of incorporation may also specifically allow for
such actions to be taken by written consent of the shareholders having
not less than the minimum number of votes necessary to authorize such
action at a meeting at which all shares entitled to vote thereon are
present. Dalhart's Articles of Incorporation do not so provide for
such action to be taken other than by unanimous written consent.
60
<PAGE> 70
Dalhart's Bylaws provide that a special meeting of shareholders
may be called at any time by the President, the Board of Directors or
the holders of not less than ten percent (10%) of all shares entitled
to vote at such meeting. Dalhart's Bylaws also require that any
action taken by written consent be signed by all of the shareholders
entitled to vote with respect to the subject matter of the consent.
The Texas Banking Law provides for special meetings of
shareholders as may be deemed necessary after notice as prescribed in
the bylaws. The Texas Banking Law also provides that any action
required or permitted therein to be taken at a meeting of the
shareholders of a Texas banking association may be taken without a
meeting if a consent in writing, setting forth the action taken, is
signed by all of the shareholders entitled to vote on the action.
Such consent has the same force and effect as a unanimous vote at a
meeting and this may be stated in articles or a document or instrument
filed with the Banking Commissioner.
The Bylaws of Citizens Bank state that special meetings of
shareholders may be called by the Board of Directors, by the
President, or by shareholders owning a majority in interest of the
shares of the bank at any time, and for any lawful purpose, by giving
notice thereof as required by law; or, when not so provided by law,
by giving at least thirty days notice of the time, place and object
of such meeting to each shareholder of record on the books of the
bank, in writing, addressed to his last known place of business and
deposited in the post office at least thirty days before the date for
which such meeting shall be called.
NOTICE OF SHAREHOLDER NOMINATIONS OF DIRECTORS
Boatmen's Bylaws provide that a shareholder may nominate a person
for director only if he delivers notice of such nomination to the
Secretary of Boatmen's, accompanied or promptly followed by such
supporting information as the Secretary of Boatmen's shall reasonably
request, not less than 75 days prior to the date of any annual meeting
or more than seven days after the mailing of notice of any special
meeting. Neither Dalhart's Articles of Incorporation nor Citizens
Bank's Articles of Association or Bylaws, nor the Texas Law or Texas
Banking Law contains a similar provision.
SHAREHOLDER PROPOSAL PROCEDURES
Boatmen's Bylaws provide that in order for any business to be
transacted at any meeting of the shareholders, other than business
proposed by or at the direction of the Board of Directors, notice
thereof must be received from the proposing shareholder by the
Secretary of Boatmen's, accompanied or promptly followed by such
supporting information as he shall reasonably request, not less than
75 days prior to the date of any annual meeting or more than seven
days after the mailing of notice of any special meeting. Neither
Dalhart's Articles of Incorporation or Bylaws nor Citizens Bank's
Articles of Association or Bylaws, nor the Texas Law or the Texas
Banking Law contains a similar provision.
SHAREHOLDER RIGHTS PLAN
Overview. Boatmen's has adopted a shareholder rights plan
pursuant to which holders of a share of Boatmen's Common also hold one
preferred share purchase right which may be exercised upon the
occurrence of certain "triggering events" specified in Boatmen's
shareholder rights plan. Neither Dalhart nor Citizens Bank has a
shareholder rights plan. Shareholder rights plans such as Boatmen's
plan, are intended to encourage potential hostile acquirors of a
"target" corporation to negotiate with the board of directors of the
target corporation in order to avoid occurrence of the "triggering
events" specified in such
61
<PAGE> 71
plans. Shareholder rights plans are
intended to give the directors of a target corporation the opportunity
to assess the fairness and appropriateness of a proposed transaction
in order to determine whether or not it is in the best interests of
the corporation and its shareholders. Notwithstanding these purposes
and intentions of shareholder rights plans, such plans, including that
of Boatmen's, could have the effect of discouraging a business
combination which shareholders believe to be in their best interests.
The provisions of the shareholder rights plan of Boatmen's are
discussed herein.
On August 14, 1990, the Board of Directors of Boatmen's declared
a dividend, payable on August 31, 1990 (the "Boatmen's Record Date"),
of one Preferred Share Purchase Right (a "Boatmen's Right") for each
outstanding share of Boatmen's Common. Each Boatmen's Right entitles
the registered holder to purchase from Boatmen's one one-hundredth
share of a Preferred Share at a price of $110.00 per one one-hundredth
Preferred Share (the "Boatmen's Purchase Price"), subject to
adjustment. The description and terms of the Boatmen's Rights are set
forth in a Rights Agreement (the "Boatmen's Rights Agreement") between
Boatmen's and Boatmen's Trust Company as Rights Agent (the "Rights
Agent"), and the following description is qualified in its entirety
by the Boatmen's Rights Agreement.
Until the earlier to occur of (i) ten days following a public
announcement that a person or group of affiliated or associated
persons (a "Boatmen's Acquiring Person") has acquired beneficial
ownership of twenty-percent (20%) or more of the outstanding shares
of Boatmen's Common; or (ii) ten business days (or such later date as
may be determined by action of the Board of Directors prior to such
time as any person becomes a Boatmen's Acquiring Person) following the
commencement of, or announcement of an intention to make, a tender or
exchange offer the consummation of which would result in the
beneficial ownership by a person or group of twenty percent (20%) or
more of such outstanding shares of Boatmen's Common (the earlier of
such dates being called the "Boatmen's Distribution Date"), the
Boatmen's Rights will be evidenced, with respect to any of the
Boatmen's Common share certificates outstanding as of the Boatmen's
Record Date, by such Boatmen's Common share certificates, with a copy
of a Summary of Rights attached thereto.
The Boatmen's Rights Agreement provides that until the Boatmen's
Distribution Date (or earlier redemption or expiration of the
Boatmen's Rights), the Boatmen's Rights will be transferred only with
shares of Boatmen's Common. New Boatmen's Common share certificates
issued after the Boatmen's Record Date, upon transfer or new issuance
of Boatmen's Common, including issuance of shares pursuant to the
Holding Company Merger, will contain a notation incorporating the
Boatmen's Rights Agreement by reference, and the surrender for
transfer of any certificates for Boatmen's Common outstanding as of
the Boatmen's Record Date, even without such notation or a copy of the
Summary of Rights being attached thereto, will also constitute the
transfer of the Boatmen's Rights associated with the Boatmen's Common
shares represented by such certificate. As soon as practicable
following the Boatmen's Distribution Date, separate certificates
evidencing the Boatmen's Rights (the "Boatmen's Right Certificates")
will be mailed to holders of record of Boatmen's Common as of the
close of business on the Boatmen's Distribution Date and such separate
Boatmen's Right Certificates alone will evidence the Boatmen's Rights.
The Boatmen's Rights are not exercisable until the Boatmen's
Distribution Date. The Boatmen's Rights will expire on August 14,
2000 (the "Final Expiration Date"), unless the Final Expiration Date
is extended or unless the Boatmen's Rights are earlier redeemed by
Boatmen's, in each case as described herein.
The Boatmen's Purchase Price payable, and the number of Preferred
Shares or other securities or property issuable, upon exercise of the
Boatmen's Rights are subject to adjustment from time to time upon the
occurrence of certain events in order to prevent dilution. In
addition, the number of outstanding
62
<PAGE> 72
Boatmen's Rights and the number
of one one-hundredths of a Preferred Share issuable upon exercise of
each Boatmen's Right are also subject to adjustment in the event of
a stock split of Boatmen's Common or a stock dividend on Boatmen's
Common payable in shares of Boatmen's Common or subdivisions,
consolidations or combinations of shares of Boatmen's Common
occurring, in any such case, prior to the Boatmen's Distribution Date.
Preferred Shares purchasable upon exercise of the Boatmen's
Rights will not be redeemable. Each Preferred Share will be entitled
to a minimum preferential quarterly dividend payment of $1.00 per
share and will be entitled to an aggregate dividend of 100 times the
dividend declared on each share of Boatmen's Common. In the event of
liquidation, the holders of the Preferred Shares will be entitled to
a minimum preferential liquidation payment of $100 per share and will
be entitled to an aggregate payment of 100 times the payment made on
each share of Boatmen's Common. Each Preferred Share will have 100
votes, voting together with the Boatmen's Common shares. Finally, in
the event of any merger, consolidation or other transaction in which
shares of Boatmen's Common are exchanged, each Preferred Share will
be entitled to receive 100 times the amount received on each share of
Boatmen's Common. The Boatmen's Rights are protected by customary
anti-dilution provisions.
Because of the nature of the Preferred Shares' dividend,
liquidation and voting rights, the value of the one one-hundredth
interest in a Preferred Share purchasable upon exercise of each
Boatmen's Right should approximate the value of one Boatmen's Common
share.
In the event that Boatmen's is acquired in a merger or other
business combination transaction or fifty percent (50%) or more of its
consolidated assets or earning power are sold, proper provision will
be made so that each holder of a Boatmen's Right will thereafter have
the right to receive, upon the exercise thereof at the then current
exercise price of the Boatmen's 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
Boatmen's Right. In the event that (i) any person or group of
affiliated or associated persons becomes the beneficial owner of
twenty percent (20%) or more of the outstanding shares of Boatmen's
Common (unless such person first acquires twenty percent (20%) or more
of the outstanding shares of Boatmen's Common by a purchase pursuant
to a tender offer for all of the Boatmen's Common for cash, which
purchase increases such person's beneficial ownership to eighty
percent (80%) or more of the outstanding Boatmen's Common); or
(ii) during such time as there is a Boatmen's Acquiring Person, there
shall be a reclassification of securities or a recapitalization or
reorganization of Boatmen's or other transaction or series of
transactions involving Boatmen's which has the effect of increasing
by more than one percent (1%) the proportionate share of the
outstanding shares of any class of equity securities of Boatmen's or
any of its subsidiaries beneficially owned by the Boatmen's Acquiring
Person, proper provision will be made so that each holder of a
Boatmen's Right, other than Boatmen's Rights beneficially owned by the
Boatmen's Acquiring Person (which will thereafter be void), will
thereafter have the right to receive upon exercise that number of
shares of Boatmen's Common having a market value of two times the
exercise price of the Boatmen's Right.
At any time after the acquisition by a Boatmen's Acquiring Person
of beneficial ownership of twenty percent (20%) or more of the
outstanding shares of Boatmen's Common, and prior to the acquisition
by such Boatmen's Acquiring Person of fifty percent (50%) or more of
the outstanding shares of Boatmen's Common, the Board of Directors of
Boatmen's may exchange the Boatmen's Rights (other than Boatmen's
Rights owned by such person or group which have become void), in whole
or in part, at an exchange ratio of one share of Boatmen's Common per
Boatmen's Right (subject to adjustment).
63
<PAGE> 73
With certain exceptions, no adjustment in the Boatmen's Purchase
Price will be required until cumulative adjustments require an
adjustment of at least one percent (1%) of the Boatmen's Purchase
Price. No fractional Preferred Shares will be issued (other than
fractions which are integral multiples of one one-hundredth of a
Preferred Share and which may, at the election of Boatmen's, be
evidenced by depositary receipts) and in lieu thereof, an adjustment
in cash will be made based on the market price of the shares of
Boatmen's Common on the last trading day prior to the date of
exercise.
At any time prior to the acquisition by a Boatmen's Acquiring
Person of beneficial ownership of twenty percent (20%) or more of the
outstanding shares of Boatmen's Common, the Boatmen's Board of
Directors may redeem the Boatmen's Rights in whole, but not in part,
at a price of $0.01 per Boatmen's Right (the "Boatmen's Redemption
Price"). The redemption of the rights may be made effective at such
time, on such basis, and with such conditions as the Board of
Directors of Boatmen's in its sole discretion may establish.
In addition, if a bidder who does not beneficially own more than
one percent (1%) of the shares of Boatmen's Common and all other
voting shares of Boatmen's (together the "Voting Shares") (and who has
not within the past year owned in excess of one percent (1%) of the
Voting Shares and, at a time he held a greater than one percent (1%)
stake, disclosed, or caused the disclosure of, an intention which
relates to or would result in the acquisition or influence of control
of Boatmen's) proposes to acquire all of the Voting Shares for cash
at a price which a nationally recognized investment banker selected
by such bidder states in writing is fair, and such bidder has obtained
written financing commitments (or otherwise has financing) and
complies with certain procedural requirements, then Boatmen's, upon
the request of the bidder, will hold a special shareholders meeting
to vote on a resolution requesting the Board of Directors to accept
the bidder's proposal. If a majority of the outstanding shares
entitled to vote on the proposal vote in favor of such resolution,
then for a period of 60 days after such meeting the Boatmen's Rights
will be automatically redeemed at the Boatmen's Redemption Price
immediately prior to the consummation of any tender offer for all of
such shares at a price per share in cash equal to or greater than the
price offered by such bidder; provided, however, that no redemption
will be permitted or required after the acquisition by any person or
group of affiliated or associated persons of beneficial ownership of
twenty percent (20%) or more of the outstanding shares of Boatmen's
Common. Immediately upon any redemption of the Boatmen's Rights, the
right to exercise the Boatmen's Rights will terminate and the only
right of the holders of Boatmen's Rights will be to receive the
Boatmen's Redemption Price.
The terms of the Boatmen's Rights may be amended by the Board of
Directors of Boatmen's without the consent of the holders of the
Boatmen's Rights, including an amendment to lower certain thresholds
described herein to not less than the greater of (i) any percentage
greater than the largest percentage of the outstanding shares of
Boatmen's Common then known to Boatmen's to be beneficially owned by
any person or group of affiliated or associated persons; or (ii) ten
percent (10%), except that from and after such time as any person
becomes a Boatmen's Acquiring Person no such amendment may adversely
affect the interests of the holders of the Boatmen's Rights.
Until a Boatmen's Right is exercised, the holder thereof, as
such, will have no rights as a shareholder of Boatmen's, including,
without limitation, the right to vote or to receive dividends.
DISSENTERS' RIGHTS
Under the Missouri Law, a shareholder of a corporation is
entitled to receive payment for the fair value of his or her shares if such
shareholder dissents from a sale or exchange of substantially all of the
64
<PAGE> 74
property and assets of the corporation, or a merger or
consolidation to which such corporation is a party. A shareholder is
also entitled to receive payment for the fair value of his or her
shares if such shareholder dissents from according voting rights to
"control shares" in a control share acquisition, as further described
herein. Because Boatmen's is not merging directly with Dalhart or
Dalhart-Delaware, Boatmen's shareholders will not be entitled to
assert such rights in connection with the Holding Company Merger.
Under both the Texas Law and the Texas Banking Law, a shareholder
of a Texas corporation or a Texas banking association is entitled to
receive payment for the fair value of his or her shares under certain
circumstances. See "THE ACQUISITION -- The Holding Company Merger --
Dissenters' Rights", "THE ACQUISITION -- The Subsidiary Bank
Merger -- Dissenters' Rights."
TAKEOVER STATUTES
The Missouri Law contains provisions regulating a broad range of
business combinations, such as a merger or consolidation, between a
Missouri corporation with shares of its stock registered under the
federal securities laws, or a corporation that makes an election, and
an "interested shareholder" (which is defined as any owner of twenty
percent (20%) or more of the corporation's stock) for five years after
the date on which such shareholder became an interested shareholder,
unless the stock acquisition which caused the person to become an
interested shareholder was approved in advance by the corporation's
board of directors. This so-called "five year freeze" provision is
effective even if all the parties should subsequently decide that they
wish to engage in a business combination. The Missouri Law also
contains a "control share acquisition" provision which effectively
denies voting rights to shares of a Missouri corporation acquired in
control share acquisitions unless a resolution granting such voting
rights is approved at a meeting of shareholders by affirmative
majority vote of (i) all outstanding shares entitled to vote at such
meeting voting by class if required by the terms of such shares; and
(ii) all outstanding shares entitled to vote at such meeting voting
by class if required by the terms of such shares, excluding all
interested shares. A control share acquisition is one by which a
purchasing shareholder acquires more than one-fifth (1/5), one-third
(1/3), or a majority, under various circumstances, of the voting power
of the stock of an "issuing public corporation." An "issuing public
corporation" is a Missouri corporation with (i) one hundred or more
shareholders; (ii) its principal place of business, principal office
or substantial assets in Missouri; and (iii) either (a) more than ten
percent (10%) of its shareholders resident in Missouri; (b) more than
ten percent (10%) of its shares owned by Missouri residents; or
(c) 10,000 shareholders resident in Missouri. Boatmen's meets the
statutory definition of issuing public corporation. Finally, if a
control share acquisition should be made of a majority or more of the
corporation's voting stock, and those shares are granted full voting
rights, shareholders are granted dissenters' rights.
Neither the Texas Law nor the Texas Banking Law contain a
takeover statute or a "control share acquisition" provision.
LIABILITY OF DIRECTORS; INDEMNIFICATION
Pursuant to the Missouri Law, the Texas Law and the Texas Banking
Law, each corporation or bank may indemnify certain officers and
directors in connection with liabilities arising from legal
proceedings resulting from such person's service to the corporation
in certain circumstances. The respective Articles of Incorporation
and Bylaws of Boatmen's and Dalhart obligate each to indemnify certain
directors and officers. However, Citizens Bank lacks any such
indemnity provision in its Bylaws or Articles of Association. Each
of Boatmen's and Dalhart may also voluntarily undertake to indemnify
certain persons acting on the
65
<PAGE> 75
corporation's behalf in certain
circumstances. While the indemnification laws and provisions
applicable to Boatmen's and Dalhart are substantially similar in most
material respects, there are certain material differences which are
discussed herein.
In accordance with the Missouri Law, and pursuant to its Restated
Articles of Incorporation, Boatmen's will indemnify its directors and
certain of its executive officers, and may indemnify other employees
or agents as it deems appropriate, against reasonably incurred
liabilities arising from any actual or threatened, pending or
completed action, suit, or proceeding by reason of the fact that the
indemnified person was a director, officer, employee or agent of
Boatmen's, or is or was serving at the request of Boatmen's as a
director, officer, employee, or agent of another entity or enterprise,
provided the indemnified person acted in good faith and in a manner
he reasonably believed to be in or not opposed to the best interests
of Boatmen's. With respect to any criminal action or proceeding, the
indemnified person must have had no reasonable cause to believe his
conduct was unlawful. In the case of an action or suit by or in the
right of Boatmen's, Boatmen's may not indemnify any person against
judgments or fines, or as to any claim, matter, or issue as to which
such person has been adjudged to be liable for negligence or
misconduct in the performance of his duty to Boatmen's, unless and
only to the extent that the court in which the action or suit was
brought determines upon application that such person is fairly and
reasonably entitled to indemnity for proper expenses. Boatmen's
Restated Articles of Incorporation also provide, as permitted by the
Missouri Law, for additional indemnification for persons indemnifiable
under the Missouri Law provided no such person shall thereby be
indemnified against conduct which was finally adjudged to have been
knowingly fraudulent, deliberately dishonest, or willful misconduct.
The Missouri Law also provides that to the extent a director, officer,
employee or agent of a Missouri corporation has been successful in the
defense of any action, suit or proceeding or any claim, issue or
matter therein, such corporation must indemnify such person for
expenses, including attorneys' fees, actually and reasonably incurred
in connection with such action, suit or proceeding.
The Texas Law, like the Missouri Law, authorizes corporations to
indemnify any party or threatened party to any threatened, pending or
completed action, suit or proceeding who is or was a director,
officer, employee or agent of the corporation and any person who is
or was serving at the request of the corporation as director, officer,
partner, venturer, proprietor, trustee, employee or agent of another
corporation or other enterprise if such individual acted in good faith
and reasonably believed that his or her conduct was in the
corporation's best interests. In the case of any criminal proceeding,
the individual must have no reasonable cause to believe that his or
her conduct was unlawful in order for the corporation to indemnify him
or her. The Texas Law provides that no indemnification shall be made
in respect of any claim, issue or matter as to which such person shall
have been adjudged liable where the defendant's conduct was judged to
be willful or intentional misconduct in the performance of his duty
to the corporation, and will be limited to reasonable expense actually
incurred in connection with the proceeding where the defendant is
found liable to the corporation or liable for receipt of improper
personal benefits. Whether such director, officer, employee or agent
acted properly is determined by a majority of a quorum of non-party
directors, independent legal counsel opinion or by the shareholders.
A corporation may pay expenses incurred by a director or officer
before final disposition of an action or proceeding, but the director
or officer must repay such expenses if it is determined that he or she
was not entitled to indemnification. The board of directors may
determine appropriate terms and conduct to pay an employee or agent.
The corporation may purchase insurance on a director, officer,
employee or agent for liability asserted against him or her whether
or not the corporation could indemnify that party.
The Texas Banking Law, like Missouri Law, also authorizes a
person to be indemnified or reimbursed by a state banking association
through action of its board for reasonable expenses actually incurred
in connection with any action, suit or proceeding to which he or she
is a party by reason of his or
66
<PAGE> 76
her being or having been a director,
officer or employee of said bank or having served as a director,
officer, partner, venturer, proprietor, trustee, agent, or similar
functionary of another foreign or domestic corporation, partnership,
joint venture, sole proprietorship, trust, employee benefit plan, or
other enterprise, at the request of the bank. The board may authorize
the bank to purchase insurance covering the indemnification of
directors, officers or employees and may prospectively indemnify
directors, officers, or employees. If there is a compromise of such
an action or threatened action, there shall be no indemnification or
reimbursement for the amount paid to settle the claim or for
reasonable expenses incurred in connection with such claim without the
vote, or written consent, of the owners of record of a majority of the
stock of the bank. No such person shall be indemnified or reimbursed
if he or she has been finally adjudged to have been guilty of, or
liable for, wilful misconduct, gross neglect of duty, or a criminal
act.
Dalhart's Articles of Incorporation provide that Dalhart shall
indemnify its directors under terms substantially similar to those
provided under the Texas Law. Dalhart's Articles of Incorporation
also provide that indemnification may be made to the extent that the
court in which such proceeding was brought shall determine upon
application that, despite the adjudication of liability but in view
of all of the circumstances of the case, such person is fairly and
reasonably entitled to indemnification for such expenses as the court
of appropriate jurisdiction shall deem proper.
Citizens Bank's Articles of Association and Bylaws contain no
provision for indemnification of directors, officers, employees or
others.
CONSIDERATION OF NON-SHAREHOLDER INTERESTS
The Missouri Law provides that in exercising business judgment
in consideration of acquisition proposals, a Missouri corporation's
board of directors may consider the following factors, among others:
(i) the consideration being offered; (ii) the existing political,
economic, and other factors bearing on security prices generally, or
the corporation's securities in particular; (iii) whether the
acquisition proposal may violate any applicable laws; (iv) social,
legal and economic effects on employees, suppliers, customers and
others having similar relationships with the corporation, and the
communities in which the corporation conducts its businesses; (v) the
financial condition and earning prospects of the person making the
acquisition proposal; and (vi) the competence, experience and
integrity of the person making the acquisition proposal.
Neither the Texas Law nor the Texas Banking Law contain
provisions comparable to those described herein.
INFORMATION ABOUT DALHART AND CITIZENS BANK
BUSINESS OF DALHART AND CITIZENS BANK
Dalhart was incorporated under the Texas Law in June 1981, to
become a bank holding company for its majority-owned subsidiary,
Citizens Bank. In April 1990, Dalhart exchanged its 93.17 percent of
the outstanding stock of Citizens Bank for 100 percent of the
outstanding stock of Dalhart-Delaware. Thus, Dalhart owns 100 percent
of Dalhart-Delaware, which, in turn, owns 93.17 percent of Citizens
Bank.
Citizens Bank was chartered on December 3, 1919, as a Texas
banking association. Dalhart-Delaware has no other subsidiaries and
operates strictly as a one-bank holding company for Citizens Bank.
Dalhart has no other subsidiaries and operates strictly as a holding
company for Dalhart-Delaware.
67
<PAGE> 77
Citizens Bank operates from a main office in Dalhart, Texas and
three branch locations in Amarillo, Childress, and Vega. All four
locations are located in the panhandle of Texas. The three branches
of Citizens Bank were acquired in 1988, 1991, and 1993, respectively.
Citizens Bank offers complete banking services to the commercial and
residential areas which it serves. Services include commercial,
agricultural, real estate, and personal loans, checking, savings and
time deposits and other customer services such as safe deposit
facilities. The largest portion of Citizens Bank's lending business
is related to agricultural activities.
Dalhart is subject to competition from other banks and financial
institutions located in its principal service areas around the above
noted towns in the panhandle of Texas. In making loans, Dalhart
encounters competition from banks and other lending institutions, such
as savings and loan associations, insurance companies, finance
companies, and credit unions. In addition, Dalhart competes for
deposit accounts with institutions offering various forms of fixed
income investments, particularly other banks, savings and loan
associations, credit unions, and money-market funds and securities
brokers.
Citizens Bank is subject to supervision, regulation, and
examination by the Texas Department of Banking and the Federal Deposit
Insurance Corporation. Deposits of Citizens Bank are insured by the
Federal Deposit Insurance Corporation. As a bank holding company,
Dalhart is regulated by the Federal Reserve.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF DALHART
This section presents an analysis of the consolidated financial
condition of Dalhart at June 30, 1994, December 31, 1993 and 1992, and
the consolidated results of operations for the six months ended June
30, 1994 and 1993, and for the years ended December 31, 1993, 1992 and
1991. This review should be read in conjunction with the consolidated
financial statements, notes to consolidated financial statements, and
financial data presented elsewhere in this Joint Proxy
Statement/Prospectus.
FOR THE SIX MONTHS ENDED JUNE 30, 1994 AND 1993
RESULTS OF OPERATIONS
Net income for the six months ended June 30, 1994 was $844,000
or $8.44 per share compared to $1,124,000 or $11.24 per share for the
six months ended June 30, 1993. The decrease in net income primarily
reflected a $400,000 negative provision for loan losses recorded in
1993 and higher noninterest expense resulting from the acquisition of
Citizens Bank's Vega branch in April 1993. Net income for the six
months ended June 30, 1994, as compared with the same period in the
previous year, on an annualized basis, as a percent of average assets
and average equity was:
<TABLE>
<CAPTION>
RETURN ON RETURN ON
AVERAGE ASSETS AVERAGE EQUITY
JUNE 30 JUNE 30
------- -------
1994 1993 1994 1993
------------------- -------------------
<S> <C> <C> <C> <C>
Net income 1.21% 1.63% 12.90% 20.55%
</TABLE>
During the six months ended June 30, 1993, the dividend payout
ratio (dividends declared divided by net income) was 66.73%. No
dividends were declared by Dalhart during the six months ended June
30, 1994.
68
<PAGE> 78
Following is an analysis of the primary components of net income
for the six months ended June 30, 1994 and 1993.
NET INTEREST INCOME
Net interest income is the principal source of Dalhart's net
income and represents the difference between interest income and
interest expense. The following schedule provides a summary of net
interest income, average earning asset balances and the related
interest rates/yields for the six month periods. Nonaccruing loans
are included in the interest-earning assets; interest income on such
loans is recorded when received.
Interest earning assets includes tax-exempt investments and the
related income is presented on a tax-equivalent basis assuming a tax
rate of 34% in 1994 and 1993. The amount of the tax-equivalent
adjustment was $222,000 and $219,000 for the six months ended June 30,
1994 and 1993, respectively.
69
<PAGE> 79
<TABLE>
<CAPTION>
JUNE 30, 1994
------------------------------------------------------
INTEREST AVERAGE
AVERAGE PERCENT OF INCOME/ YIELD/
BALANCE TOTAL ASSETS EXPENSE RATE
-----------------------------------------------------
(Dollars in Thousands)
Interest-earning assets:
<S> <C> <C> <C> <C>
Loans $70,959 50.82% $3,182 8.97%
Taxable securities 30,120 21.57 803 5.33
Nontaxable securities 17,429 12.48 652 7.48
FHLB Stock 2,292 1.64 47 4.10
Interest bearing deposits with
other banks 377 0.27 14 7.43
Federal funds sold 5,961 4.27 89 2.99
--------------------------------------------------
Total interest-earning assets $127,138 91.05% $4,787 7.53%
--------------------------------------------------
Noninterest-bearing assets:
Cash and due from banks $ 7,275 5.21%
Premises and equipment 2,242 1.61
Other assets 2,501 1.79
Goodwill 1,370 0.98
Allowance for loan losses (895) (0.64)
----------------------
Total assets $139,631 100.00%
=====================
Interest-bearing liabilities:
NOW accounts $ 25,054 17.94% $ 295 2.35%
Savings accounts 7,609 5.45 99 2.60
Money market accounts 16,844 12.06 224 2.66
Time deposits and individual
retirement accounts 45,470 32.57 739 3.25
Short-term borrowings 876 0.63 15 3.42
Notes payable 672 0.48 21 6.25
--------------------------------------------------
Total interest-bearing
liabilities $ 96,525 69.13% $1,393 2.89%
--------------------------------------------------
Noninterest-bearing liabilities:
Demand deposits $ 28,360 20.31%
Other liabilities 772 0.55
---------------------
Total liabilities 125,657 89.99
Minority interest 885 0.64
Stockholders' equity 13,089 9.37
---------------------
Total liabilities and stock-
holders' equity $139,631 100.00%
=====================
Net interest income $3,394
======
Interest rate spread 4.64%
====
Net interest margin 5.34%
====
</TABLE>
70
<PAGE> 80
<TABLE>
<CAPTION>
JUNE 30, 1993
------------------------------------------------------
INTEREST AVERAGE
AVERAGE PERCENT OF INCOME/ YIELD/
BALANCE TOTAL ASSETS EXPENSE RATE
-----------------------------------------------------
(Dollars in Thousands)
Interest-earning assets:
<S> <C> <C> <C> <C>
Loans $63,875 46.20% $2,861 8.96%
Taxable securities 37,941 27.44 1,166 6.15
Nontaxable securities 16,544 11.97 644 7.78
FHLB stock 999 0.72 17 3.40
Interest-bearing deposits with
other banks 1,586 1.15 63 7.94
Federal funds sold 6,350 4.59 87 2.74
---------------------------------------------------
Total interest-earning assets $127,295 92.07% $4,838 7.60%
--------------------------------------------------
Noninterest-bearing assets:
Cash and due from banks $ 6,839 4.95%
Premises and equipment 1,720 1.24
Other assets 2,477 1.79
Goodwill 1,419 1.03
Allowance for loan losses (1,490) (1.08)
-----------------------
Total assets $138,260 100.00%
=====================
Interest-bearing liabilities:
NOW accounts $ 22,790 16.48% $ 287 2.52%
Savings accounts 4,721 3.42 67 2.84
Money market accounts 15,377 11.12 210 2.73
Time deposits and individual
retirement accounts 43,098 31.17 713 3.31
Short-term borrowings 13,710 9.92 204 2.98
Notes payable 490 0.35 25 10.20
--------------------------------------------------
Total interest-bearing
liabilities $100,186 72.46% $1,506 3.01%
--------------------------------------------------
Noninterest-bearing liabilities:
Demand deposits $ 25,780 18.65%
Other liabilities 620 0.45
---------------------
Total liabilities 126,586 91.56
Minority interest 733 0.53
Stockholders' equity 10,941 7.91
---------------------
Total liabilities and stock-
holders' equity $138,260 100.00%
=====================
Net interest income $3,332
======
Interest rate spread 4.59%
====
Net interest margin 5.24%
====
</TABLE>
71
<PAGE> 81
The slight increase in net interest income from 1993 to 1994 for
the six month periods ending June 30 was primarily attributable to the
growth of the loan portfolio. In analyzing the details of these
changes, only three months activity for the Vega branch of Citizens Bank
is included in the 1993 results as it was purchased in April 1993.
Interest expense on deposits increased $80,000, including a $64,000
increase for Vega. The remaining increase of $16,000 is primarily due
to an increase in average deposits offset by decreasing interest rates.
The decrease in interest expense on borrowings of $193,000 resulted from
the repayment of borrowings during late 1993. These changes resulted
in a net decrease in interest expense of $113,000, representing a
decrease of 7.5% in the cost of funds.
Interest income on earning assets decreased $51,000, which is
partially due to the sale of investment securities to repay a portion
of the borrowings, as discussed herein. The net interest margin
increased from 5.24% to 5.34%. Average interest earning assets
decreased from $127,295,000 at June 30, 1993 to $127,138,000 at June 30,
1994. During the same period, average interest bearing liabilities
decreased from $100,186,000 at June 30, 1993 to $96,525,000 at June 30,
1994.
PROVISION FOR LOAN LOSSES AND ALLOWANCE FOR LOAN LOSSES
Following are tables of the activity for loan losses for the six
months ending June 30, 1994 and the year ending December 31, 1993:
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, DECEMBER 31,
1994 1993
----------------------------------------------
(Dollars in Thousands)
<S> <C> <C>
Balance at beginning of period $875 $1,479
Loans charged off:
Agricultural - -
Commercial and industrial 1 98
Residential real estate-mortgage - -
Consumer 5 20
----------------------------------------------
Total chargeoffs 6 118
----------------------------------------------
Recoveries:
Agricultural - 25
Commercial and industrial 19 5
Residential real estate-mortgage - -
Consumer 2 6
----------------------------------------------
Total recoveries 21 36
----------------------------------------------
Net loans recovered (charged off) 15 (82)
Negative provision for loan losses - (522)
----------------------------------------------
Balance at end of period $890 $ 875
==============================================
Net loan recoveries (chargeoffs) to average loans .04% (.12%)
Allowance to total loans 1.41% 1.09%
Allowance to nonperforming loans 1,745% 470%
</TABLE>
72
<PAGE> 82
The allowance for loan losses is not allocated to specific
categories of loans. However, based on Dalhart's review of remaining
collateral and/or financial condition of identified loans with
characteristically more than a normal degree of risk, historical loan
loss percentages, and economic conditions, management believes the
allowance for loan losses at June 30, 1994 is adequate to cover losses
inherent in the portfolio.
The economy in Dalhart's primary market area has steadily improved
in recent years. As a result, negative provisions to the allowance were
recorded in 1993. In addition, there was a net recovery of charged off
loans during the first six months of 1994, and nonperforming loans
decreased when one borrower repaid a majority of the principal
outstanding.
Nonperforming assets are defined as loans delinquent 90 or more
days, nonaccrual loans, restructured loans, and foreclosed assets. Such
assets do not necessarily represent future losses to Dalhart since
underlying collateral can be sold and the financial condition of the
borrowers may improve. The following table sets forth the detail of
nonperforming loans. Dalhart had no restructured loans or foreclosed
assets at any of the dates listed herein.
NONPERFORMING LOANS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31, JUNE 30,
1994 1993 1993
---------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C>
Nonaccrual loans $50 $185 $ -
Loans past due 90 days or more 1 1 23
---------------------------------------------------------------
Total nonperforming loans $51 $186 $23
===============================================================
</TABLE>
The nonaccrual loans at December 31, 1993 consisted of loans to two
borrowers. Of this amount, $135,000 was received in 1994 when the
borrower sold the collateral on one loan. Additionally, a partial
recovery was received on the previously charged off portion of this
loan. The remaining nonaccrual loan at June 30, 1994 is expected to
result in an additional chargeoff of approximately $20,000, although the
actual chargeoff is pending the receipt of a settlement from a third
party.
Dalhart's policy is to discontinue accruing interest on loans when
principal or interest is due and remains unpaid for 90 days or more,
unless the loan is well secured and in the process of collection.
Dalhart would have recognized additional interest income for the periods
ended June 30, 1994 and 1993 of approximately $11,000, and $7,000,
respectively, if contractual interest on these loans had been
recognized. This additional interest income would have been $17,000 for
the year ended December 31, 1993. Interest income totaling $6,000 was
actually collected on nonaccrual loans in the first six months of 1993,
and $9,000 was collected during the year ended December 31, 1993.
At June 30, 1994, there were no significant commitments to lend
additional funds to borrowers whose loans were considered nonperforming.
The loan portfolio does not include any loans to foreign countries
or highly leveraged transaction loans. Approximately 48% of the loans
at Dalhart on June 30, 1994 were for agricultural purposes. Commercial
loans to individuals and businesses in the local lending areas of the
four locations represented 35% of the
73
<PAGE> 83
loans. The remaining 17% consists
largely of residential real estate lending. Senior management closely
monitors concentrations to individual customers and actively
participates within their lending areas. Citizens Bank has written
policies that require security for loans including liens on residential
mortgage loans and certain of the other loans secured by real estate.
In addition, policies and procedures are in place to assess the
creditworthiness of borrowers for all loans and commitments. Borrowers'
abilities to honor their loan contracts can be largely dependent upon
weather conditions and economic conditions within their market areas and
on a national level.
Management attributes the low level of nonperforming assets to a
relatively stable economy in its primary market, strong efforts in the
credit review of potential borrowers, and close monitoring of potential
problem loans.
NONINTEREST INCOME
For the six months ended June 30, 1994, deposit service charge income
remained stable and other noninterest income increased $26,000 as
compared to the six months ended June 30, 1993. This increase included
an $11,000 increase at the Vega branch, which was acquired on April 1,
1993. An additional increase of $13,000 resulted from the sale of
fully-depreciated furniture and equipment.
There were no gains or losses on sales of investment securities for
the six months ended June 30, 1994 and 1993.
OTHER EXPENSES
Compensation and benefits increased $77,000 or 6.9% during the six
months ended June 30, 1994 as compared to the same period in 1993. This
increase is primarily due to including six months of expense from the
Vega branch in 1994 versus only three months expense in 1993. The
expense for the Vega branch increased $54,000 during this period.
Occupancy expense increased $99,000 or 45.2% with Vega branch costs
providing $17,000 of this increase. The remainder is primarily due to
increased depreciation expense associated with significant building
improvements and related equipment additions at the main bank in Dalhart
being placed in service in late 1993.
Other operating expenses increased $78,000 or 10.2% with only
negligible increases at the Vega branch. Attorney fees increased
$26,000 due to ongoing litigation related to one nonaccrual loan and
issues related to the pending sale of Dalhart. The Federal Deposit
Insurance Corporation assessment, which is based on the level of deposit
accounts, increased $26,000. Foreclosure expenses of $11,000 were
incurred and telephone expense increased $23,000. The remaining
increase was primarily due to an adjustment of $18,000 relating to
accounting errors in the investment portfolio and $29,000 in losses
recorded by the mortgage banking division. These losses were primarily
caused by Citizens Bank paying to buy down the interest rate for loans
originated for sale prior to the increase in interest rates in early
1994. Documentation errors delayed the settlement of loan sales beyond
the interest rate lock periods for the individual loans.
74
<PAGE> 84
INCOME TAXES
Dalhart files a consolidated Federal income tax return with Dalhart-
Delaware and Citizens Bank. Citizens Bank pays Federal income tax
expense to Dalhart based on the taxable income of Citizens Bank on a
stand-alone basis. Deferred income taxes are provided on certain
transactions which are reported for financial reporting purposes in
different periods than for income tax purposes.
A reconciliation of expected income tax expense, computed by applying
the effective Federal statutory rate of 34% to income before the
provision for income taxes, is as follows:
<TABLE>
<CAPTION>
JUNE 30,
--------------------------------------
1994 1993
--------------------------------------
(In Thousands)
<S> <C> <C>
Federal income taxes at statutory rate $ 389 $581
Less effect of tax exempt income (133) (136)
Amortization of intangibles 8 8
Life insurance expense - 25
Other (29) 12
--------------------------------------
Total provision for income taxes $ 235 $490
======================================
</TABLE>
FINANCIAL CONDITION
INVESTMENTS
On January 1, 1994, Dalhart adopted Statement of Financial Accounting
Standards No. 115, "Accounting for Certain Investments in Debt and
Equity Securities" ("SFAS 115"). Under SFAS 115, each security is
classified as either trading, available for sale, or held to maturity.
Dalhart has no securities held in a trading account. Investments held
to maturity are recorded at amortized cost. The securities available
for sale are recorded at their fair value. The after-tax difference
between amortized cost and fair value of securities available for sale
is recorded as "unrealized gain (loss) on securities" in the equity
section of the balance sheet. The tax impact is recorded as an
adjustment to the deferred tax liability.
75
<PAGE> 85
The following table presents the composition of investment securities and
the change in each category for the periods presented:
<TABLE>
<CAPTION>
CHANGE
JUNE 30, DECEMBER 31, -------------------------
1994 1993 AMOUNT PERCENT
--------------------------------- -------------------------
(Dollars in Thousands)
Held to Maturity:
<S> <C> <C> <C> <C>
U.S. Treasuries and
agencies $ 3,252 $ 2,357 $ 895 37.97%
Obligations of states
and political
subdivisions 9,462 18,822 (9,360) (49.73)
Mortgage-backed
securities 2,156 26,220 (24,064) (91.78)
--------------------------------- -------------------------
Total investments held
to maturity 14,870 47,399 (32,529) (68.63)
--------------------------------- -------------------------
Available for sale:
U.S. Treasuries and
agencies 590 - 590 n/a
Obligations of states
and political
subdivisions 7,252 - 7,252 n/a
Mortgage-backed
securities 29,593 - 29,593 n/a
--------------------------------- -------------------------
Total investments
available for sale 37,435 - 37,435 n/a
--------------------------------- -------------------------
Total investments $52,305 $47,399 $ 4,906 10.35%
================================= =========================
</TABLE>
Not included in the above table are other equity securities
consisting of Federal Home Loan Bank ("FHLB") stock, which is discussed
below.
Dalhart's holdings of short-term investments and scheduled maturities
of investment securities serve as a source of liquidity to meet
depositor and borrower fund requirements, in addition to being a
significant element of total interest income. Short-term investments,
consisting of Federal funds sold, had outstanding balances at June 30,
1994 of $2,350,000 and $4,025,000 at December 31, 1993. Investment
securities, excluding other equity securities, increased to $52,305,000
on June 30, 1994 from a December 31, 1993 balance of $47,399,000. This
includes an unrealized loss adjustment to the available for sale
securities recorded under SFAS 115. The market value of total
investment securities was $52,453,000 and $48,220,000 at June 30, 1994
and December 31, 1993, respectively.
76
<PAGE> 86
<TABLE>
INVESTMENT SECURITIES--MATURITIES AND YIELDS
The following table shows the maturities and yields for the
various forms of investment securities as of June 30, 1994:
<CAPTION>
AFTER ONE AFTER FIVE
IN ONE YEAR OR THROUGH THROUGH
LESS FIVE YEARS TEN YEARS AFTER TEN YEARS
-------------------------------------------------------------------------------------------
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
-------------------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasuries and agencies $1,603 7.18% $ 2,239 7.04% $ - -% $ - -%
Obligations of states and
political subdivisions(1) 3,698 7.38 11,695 7.14 1,189 9.04 132 9.51
Mortgage-backed securities(2) 4,196 7.02 20,855 6.17 2,951 5.76 3,747 4.34
-------------------------------------------------------------------------------------------
Total $9,497 7.19% $34,789 6.55% $4,140 6.70% $3,879 4.52%
===========================================================================================
<FN>
(1) Yield presented on a tax-equivalent basis assuming a tax rate of 34%.
(2) Included in maturity table based on their average remaining life or call date, if applicable.
</TABLE>
Other equity securities consisting of FHLB stock totaled $2,328,000
at June 30, 1994 and $2,281,000 at December 31, 1993. The dividends received
on this stock provided annualized returns of 4.10% for the first six months
of 1994 and 3.50% for 1993.
LOANS
The loan portfolio constitutes the major earning asset of most
bank holding companies and typically offers the best alternative
for obtaining the maximum interest spread above the cost of funds.
The overall economic strength of any bank holding company generally
parallels the quality and yield of its loan portfolio. The
following table presents loans outstanding at June 30, 1994 and
December 31, 1993.
77
<PAGE> 87
<TABLE>
LOAN PORTFOLIO
<CAPTION>
JUNE 30, DECEMBER 31,
1994 1993
------------------- -------------------
PERCENT PERCENT
AMOUNT OF TOTAL AMOUNT OF TOTAL
-----------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Agricultural $23,812 37.76% $33,007 40.94%
Commercial and industrial 15,142 24.01 19,123 23.72
Real estate:
Agricultural 6,393 10.14 6,288 7.80
Commercial 6,945 11.01 8,370 10.38
Residential 7,060 11.20 10,106 12.54
Construction and others 2,054 3.26 1,890 2.34
Consumer, net of
unearned income 1,540 2.44 1,733 2.15
Other 114 .18 104 .13
-----------------------------------------------------
Total $63,060 100.00% $80,621 100.00%
=====================================================
</TABLE>
The loan portfolio decreased by $17,561,000 or 21.78% from
December 31, 1993 to June 30, 1994. Agricultural loans tend to
repay during the first half of the year. As a result of market
conditions, the loan demand has decreased in this area, especially
for loans secured by cattle. A decrease of $3,046,000 was noted in
residential loans due to the decrease in mortgage banking
activities in Amarillo as a result of rising interest rates.
The following tables set forth the maturity composition and
interest sensitivity of total loans at June 30, 1994.
<TABLE>
MATURITY OF LOANS
<CAPTION>
JUNE 30, 1994
------------------------------------------------
LOANS PERCENT OF TOTAL
------------------------------------------------
(Dollars in Thousands)
<S> <C> <C>
In one year or less $59,649 94.59%
After one through five years 3,232 5.13
After five years 179 .28
------------------------------------------------
Total loans $63,060 100.00%
================================================
</TABLE>
78
<PAGE> 88
<TABLE>
MATURITY CLASSES
<CAPTION>
INTEREST SENSITIVITY
------------------------------------------------
FIXED VARIABLE
RATE RATE
------------------------------------------------
(In Thousands)
<S> <C> <C>
In one year or less $11,056 $48,593
After one through five years 3,232 -
After five years 179 -
------------------------------------------------
Total loans $14,467 $48,593
================================================
</TABLE>
DEPOSITS
The deposit base provides the major funding source for interest
earning assets of Dalhart. Dalhart's deposits have steadily risen
during the period from December 31, 1993 to June 30, 1994. Dalhart's
total average deposits were $123,337,000 for the six months ended June
30, 1994, an increase of $7,436,000 or 6.4% when compared to the year
ended December 31, 1993. Management believes that demand, savings and
certificates of deposit less than $100,000 represent a core base of
deposits while certificates of deposit in excess of $100,000 and public
funds are more interest rate sensitive and, thus, are not viewed as part
of the core deposit base. Because of these factors, management views the
growth of demand, savings and time certificates of deposit less than
$100,000 as more stable growth.
79
<PAGE> 89
<TABLE>
The following table indicates the mix and levels of deposits at
June 30, 1994 compared to December 31, 1993 and June 30, 1993.
<CAPTION>
JUNE 30, 1994 DECEMBER 31, 1993 JUNE 30, 1993
--------------------------------------------------------------------------------------------------
COST OF COST OF COST OF
AMOUNT FUNDS PERCENT AMOUNT FUNDS PERCENT AMOUNT FUNDS PERCENT
--------------------------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Demand and other
noninterest bearing $23,561 n/a% 20.34% $35,996 n/a% 28.06% $24,516 n/a% 20.99%
NOW accounts 24,639 2.50 21.27 24,379 2.50 19.00 23,145 2.50 19.82
Savings accounts 8,579 2.90 7.41 6,306 3.00 4.92 5,457 3.00 4.67
Money market deposit accounts 15,567 2.85 13.44 14,382 2.75 11.21 17,421 2.75 14.92
Certificates of deposit and
individual retirement
accounts(1):
Less than $100,000 32,407 3.43 27.98 34,308 3.26 26.75 35,975 3.29 30.81
$100,000 or more 11,083 3.55 9.56 12,904 3.23 10.06 10,264 3.29 8.79
--------------------------------------------------------------------------------------------------
Total Deposits $115,836 2.43% 100.00% $128,275 2.13% 100.00% $116,778 2.35% 100.00%
==================================================================================================
<FN>
(1) Interest rate information is not available for a breakdown for
certificates of deposit less than $100,000 and $100,000 or more on
June 30, 1993. Therefore, the average rate for all certificates
of deposit is listed for both classifications.
</TABLE>
<TABLE>
AMOUNT AND MATURITIES OF TIME DEPOSITS OF $100,000 OR MORE
The following table sets forth the amount and maturities of time
deposits of $100,000 or more as of June 30, 1994:
<CAPTION>
JUNE 30, PERCENT
1994 OF TOTAL
------------------------------------------------
(Dollars in Thousands)
<S> <C> <C>
Three months or less $ 6,135 55.36%
Over three through twelve months 4,848 43.74
Over twelve months 100 .90
------------------------------------------------
Total $11,083 100.00%
================================================
</TABLE>
80
<PAGE> 90
<TABLE>
SHORT-TERM BORROWINGS
Amounts and interest rates related to short-term borrowings at June
30, 1994 and December 31, 1993 were as follows:
<CAPTION>
JUNE 30, 1994 DECEMBER 31, 1993
----------------------------------------------
(Dollars in Thousands)
<S> <C> <C>
Federal funds purchased:
Outstanding balance at period-end $ - $ -
Average interest rate at period-end n/a% n/a%
Average outstanding during the period $ - $ 5,107
Weighted average interest rate n/a% 3.02%
Highest outstanding balance at any month-end $ - $10,275
Federal Home Loan Bank advances:
Outstanding balance at period-end $ - $ 6,000
Average interest rate at period-end n/a% 3.10%
Average outstanding during the period $ 355 $ 9,077
Weighted average interest rate 3.10% 3.08%
Highest outstanding balance at any month-end $ - $15,000
</TABLE>
LIQUIDITY AND RATE SENSITIVITY
Liquidity is the measure of Dalhart's ability to meet its
customers' present and future deposit withdrawals or increased loan
demand without unduly penalizing earnings. Interest rate sensitivity
involves the relationship between rate sensitive assets and liabilities
and is an indication of the probable effects of interest rate
fluctuations on Dalhart's net interest income. Dalhart manages both
liquidity and interest sensitivity through a GAP analysis report
prepared monthly.
Liquidity is provided for Citizens Bank by projecting credit demand
and other financial needs and then maintaining sufficient cash and
assets readily convertible into cash to meet these projected
requirements. Citizens Bank provided for its liquidity needs through
core deposits, maturing loans, and scheduled maturities of investments
in securities, and by maintaining adequate balances in Federal funds
sold. At June 30, 1994, cash and Federal funds sold amounted to
$8,794,000 or 6.65% of total assets. This is a decrease of $5,358,000
from December 31, 1993 when cash and Federal funds sold totaled
$14,152,000 or 9.42% of total assets. This level of cash and cash
equivalents is considered to be adequate in view of projected liquidity
needs.
Dalhart's liquidity is generally provided by dividends received
from Citizens Bank. These funds are available for the overhead expenses
and the payment of dividends to shareholders. Dividends paid by Citizens
Bank were $91,800 during the six months ended June 30, 1994, of which
93.17% were paid to Dalhart-Delaware and subsequently to Dalhart.
Interest rate-sensitive assets and liabilities are those with yields
or rates subject to change within a future time period due to maturity
or changes in market rates. An ongoing objective of Citizens Bank's
asset/liability management program is to match rate-adjustable assets and
liabilities at similar maturity horizons, so that changes in interest rates
will not result in wide fluctuations in net interest income. The rate
81
<PAGE> 91
sensitivity position is managed by matching funds acquired having a specific
maturity with loans, securities, or other liquid assets with similar maturities.
At June 30, 1994, $59,649,000 or 94.6%, of the loan portfolio will
reprice in one year or less. In addition, investment securities maturing
in one year or less of $9,497,000 and Federal funds sold of $2,350,000
bring total rate-sensitive assets maturing or repricing within one year
to $71,496,000. When matched with interest-bearing demand deposits,
savings deposits and time deposits of $100,000 or more maturing within
one year totaling $59,768,000, this represents a position which
management believes acceptable given the increasing interest rate
environment at June 30, 1994.
CAPITAL
The strength of its capital position determines the ability of a
financial institution to take advantage of growth opportunities and
handle unforeseen financial difficulties. Dalhart's stockholders' equity
at June 30, 1994 was $13,207,000, an increase of $541,000 or 4.3% from
the December 31, 1993 total of $12,666,000. The June 30, 1994
stockholders' equity includes Dalhart's equity in Citizens Bank's
unrealized loss on investment securities available for sale of $303,000.
The average equity to average assets ratios for the six months ended
June 30, 1994 and 1993, respectively, were 9.37% and 7.91%. These
ratios for the years ended December 31, 1993, 1992 and 1991,
respectively were 8.02%, 8.92%, and 8.27%.
Dalhart is subject to the issuance of capital adequacy guidelines
by its regulators, all of which have issued similar guidelines for the
measurement of capital adequacy. One measure is the leverage capital
ratio, which equals the ratio of ending total capital less intangible
assets to average total assets on a quarterly basis from the latest
Consolidated Reports of Income and Condition ("Call Report") less
intangible assets. The guidelines also include a definition of capital
and provide a framework for calculating risk weighted assets by
assigning assets and off-balance-sheet instruments to broad risk
categories. The risk-based capital standards establish a minimum ratio
of total capital to risk-weighted assets with a minimum of 4% when using
Tier 1 capital and a minimum of 8% when including total capital. Tier 1
capital is the sum of the core capital elements (common stockholders'
equity less intangible assets). Total capital includes the allowance for
loan losses limited to a maximum of 1.25% of risk-weighted assets.
82
<PAGE> 92
<TABLE>
As the following table indicates, Dalhart exceeded the minimum
risk-based and leverage ratios at June 30, 1994 and December 31, 1993:
<CAPTION>
JUNE 30, DECEMBER 31, MINIMUM
1994 1993 LEVELS
---------- ------------ -------
(Dollars in Thousands)
<S> <C> <C> <C>
Capital Components:
Tier 1 capital $ 12,209 $ 11,251
Total capital 13,099 12,126
Assets:
Risk-weighted assets and
off-balance-sheet instruments $84,229 $100,087
Capital ratios:
Leverage 8.09% 6.79% 3.00%
Tier 1 risk-based capital 14.49% 11.24% 4.00%
Total risk-based capital 15.55% 12.12% 8.00%
</TABLE>
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
RESULTS OF OPERATIONS
Net income for 1993 was $2,444,000 or $24.44 per share compared to
$1,472,000 or $14.72 per share in 1992 and $1,257,000 or $12.57 per
share in 1991. The earnings in 1993 included nine months of operations
for the Vega branch, earnings of which totalled $106,000. The earnings
in 1991 included income from the Amarillo branch for approximately 7.5
months.
The increase in net income from 1992 to 1993 was $972,000. Primary
sources of this increase were an increase in net interest income due to
an increase in earning assets, a $552,000 negative provision for loan
losses, and an increase of $61,000 in gains on sales of investment
securities. The remaining increase resulted from normal growth and a
decreasing interest rate environment.
The increase in net income from 1991 to 1992 was $215,000. The
primary sources of this increase were earning asset growth and increased
interest rate spread, which was partially offset by the inclusion of a
full year of expenses for the Amarillo branch in 1992.
83
<PAGE> 93
<TABLE>
The following tables compare net income as a percent of average
assets and average equity for the last three years:
<CAPTION>
RETURN ON RETURN ON
AVERAGE ASSETS AVERAGE EQUITY
---------------------- -----------------------
DECEMBER 31, DECEMBER 31,
1993 1992 1991 1993 1992 1991
---------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Net income 1.69% 1.28% 1.18% 21.14% 14.31% 14.27%
</TABLE>
During the years ended December 31, 1993 and 1991, respectively, the
dividend payout ratios (dividends declared divided by net income) were
30.69% and 25.86%. No dividends were declared by Dalhart during 1992.
Following are analyses and comments regarding net interest income,
noninterest income and expense, other expenses and income taxes for the
last three years. These comparisons provide additional details of the
increases in net income and include a discussion of the changes between
these periods.
NET INTEREST INCOME
Net interest income is the principal source of Dalhart's net income
and represents the difference between interest income and interest
expense. The following schedule provides a summary concerning net
interest income, average balances and the related interest rates/yields
for the past three years. Nonaccruing loans are included in the
interest-earning assets; interest income on such loans is recorded when
received.
Interest earning assets include tax exempt investments and the
related income is presented on a tax-equivalent basis assuming a tax
rate of 34%. The amount of the tax-equivalent adjustment was $461,000,
$334,000 and $332,000 for the years ended December 31, 1993, 1992 and
1991, respectively.
84
<PAGE> 94
<TABLE>
<CAPTION>
DECEMBER 31, 1993
------------------------------------------------------
INTEREST AVERAGE
AVERAGE PERCENT OF INCOME/ YIELD/
BALANCE TOTAL ASSETS EXPENSE RATE
------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Interest-earning assets:
Loans $70,308 48.75% $6,345 9.02%
Taxable securities 35,614 24.70 2,074 5.82
Nontaxable securities 17,935 12.44 1,356 7.56
FHLB stock 1,601 1.11 56 3.50
Interest-bearing deposits with
other banks 1,125 0.78 86 7.64
Federal funds sold 5,370 3.72 151 2.81
------------------------------------------------------
Total interest-earning assets $131,953 91.50% $10,068 7.63%
------------------------------------------------------
Noninterest-bearing assets:
Cash and due from banks $ 7,240 5.02%
Premises and equipment 1,967 1.37
Other assets 3,016 2.09
Goodwill 1,404 0.97
Allowance for loan losses (1,365) (0.95)
-------------------------
Total assets $144,215 100.00%
========================
Interest-bearing liabilities:
Now accounts $22,939 15.91% $ 577 2.52%
Savings accounts 5,302 3.68 155 2.92
Money market accounts 15,340 10.64 421 2.74
Time deposits and individual
retirement accounts 44,830 31.08 1,477 3.29
Short-term borrowings 14,656 10.16 449 3.06
Notes payable 521 0.36 43 8.25
------------------------------------------------------
Total interest-bearing
liabilities $103,588 71.83% $3,122 3.01%
------------------------------------------------------
Noninterest-bearing liabilities:
Demand deposits $27,490 19.06%
Other liabilities 800 0.55
------------------------
Total liabilities 131,878 91.44
Minority interest 776 0.54
Stockholders' equity 11,561 8.02
-------------------------
Total liabilities and stock-
holders' equity $144,215 100.00%
=========================
Net interest income $6,946
======
Interest rate spread 4.62%
====
Net interest margin 5.26%
====
</TABLE>
85
<PAGE> 95
<TABLE>
<CAPTION>
DECEMBER 31, 1992
----------------------------------------------------
INTEREST AVERAGE
AVERAGE PERCENT OF INCOME/ YIELD/
BALANCE TOTAL ASSETS EXPENSE RATE
----------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Interest-earning assets:
Loans $53,607 46.51% $4,997 9.32%
Taxable securities 32,234 27.97 2,349 7.29
Nontaxable securities 11,577 10.05 982 8.48
FHLB stock 26 0.02 1 3.85
Interest-bearing deposits with
other banks 3,129 2.71 239 7.64
Federal funds sold 4,720 4.10 177 3.75
--------------------------------------------------
Total interest-earning assets $105,293 91.36% $8,745 8.31%
--------------------------------------------------
Noninterest-bearing assets:
Cash and due from banks $ 6,790 5.89%
Premises and equipment 984 0.85
Other assets 2,179 1.89
Goodwill 1,453 1.26
Allowance for loan losses (1,443) (1.25)
---------------------
Total assets $ 115,256 100.00%
=====================
Interest-bearing liabilities:
Now accounts $18,159 15.76% $ 657 3.62%
Savings accounts 2,975 2.58 99 3.33
Money market accounts 14,958 12.98 427 2.85
Time deposits and individual
retirement accounts 42,658 37.01 1,778 4.17
Short-term borrowings 5,880 5.10 186 3.16
Notes payable 79 0.07 7 8.86
--------------------------------------------------
Total interest-bearing
liabilities $ 84,709 73.50% $3,154 3.72%
--------------------------------------------------
Noninterest-bearing liabilities:
Demand deposits $18,953 16.44%
Other liabilities 652 0.57
--------------------
Total liabilities 104,314 90.51
Minority interest 658 0.57
Stockholders' equity 10,284 8.92
---------------------
Total liabilities and stock-
holders' equity $115,256 100.00%
=====================
Net interest income $5,591
=====
Interest rate spread 4.59%
====
Net interest margin 5.31%
====
</TABLE>
86
<PAGE> 96
<TABLE>
<CAPTION>
DECEMBER 31, 1991
----------------------------------------------------
INTEREST AVERAGE
AVERAGE PERCENT OF INCOME/ YIELD/
BALANCE TOTAL ASSETS EXPENSE RATE
----------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Interest-earning assets:
Loans $42,213 39.61% $4,786 11.34%
Taxable securities 30,071 28.22 2,689 8.94
Nontaxable securities 10,342 9.70 977 9.45
FHLB stock --- --- --- ---
Interest-bearing deposits with
other banks 7,156 6.72 572 7.99
Federal funds sold 7,944 7.45 479 6.03
--------------------------------------------------
Total interest-earning assets $ 97,726 91.70% $9,503 9.72%
--------------------------------------------------
Noninterest-bearing assets:
Cash and due from banks $ 5,543 5.20%
Premises and equipment 868 0.82
Other assets 2,280 2.14
Goodwill 1,506 1.41
Allowance for loan losses (1,356) (1.27)
---------------------
Total assets $106,567 100.00%
=====================
Interest-bearing liabilities:
Now accounts $15,762 14.79% $ 922 5.85%
Savings accounts 2,100 1.97 111 5.29
Money market accounts 11,736 11.01 484 4.12
Time deposits and individual
retirement accounts 45,019 42.25 2,985 6.63
Short-term borrowings 6,843 6.42 387 5.66
Notes payable 407 0.38 31 7.62
--------------------------------------------------
Total interest-bearing
liabilities $ 81,867 76.82% $4,920 6.01%
--------------------------------------------------
Noninterest-bearing liabilities:
Demand deposits $14,580 13.68%
Other liabilities 744 0.70
---------------------
Total liabilities 97,191 91.20
Minority interest 565 0.53
Stockholders' equity 8,811 8.27
---------------------
Total liabilities and stock-
holders' equity $106,567 100.00%
=====================
Net interest income $4,583
=====
Interest rate spread 3.71%
====
Net interest margin 4.69%
====
</TABLE>
87
<PAGE> 97
<TABLE>
In summary, the above tables indicate the following trends:
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------
1993 1992 1991
--------------------------------
(Dollars in Thousands)
<S> <C> <C> <C>
Average earning assets $131,953 $105,293 $97,726
Increase from prior year 26,660 7,567
Average interest-bearing liabilities 103,588 84,709 81,867
Increase from prior year 18,879 2,842
Fully taxable equivalent net interest income 6,946 5,591 4,583
Increase from prior year 1,355 1,008
Net interest margin (net interest income
divided by average earning assets) 5.26% 5.31% 4.69%
</TABLE>
The increases in average earning assets and interest-bearing
liabilities were mainly a result of branch purchases and an improving
economy. The improvement in net interest margin in 1992 illustrates the
benefits of a declining interest rate environment nationally and in
Dalhart's primary market.
Net interest income is affected by the volume and rate of both
interest-earning assets and interest-bearing liabilities. The following
table depicts the dollar effect and rate changes for the different
categories of interest-earning assets and interest-bearing liabilities
and the resultant change in interest income and interest expense.
Nonperforming loans are included with loans in the table.
<TABLE>
<CAPTION>
1993 COMPARED TO 1992 COMPARED TO
1992 INCREASE 1991 INCREASE
(DECREASE) DUE TO (DECREASE) DUE TO
------------------------------- --------------------------------
Volume Rate(1) Net Volume Rate(1) Net
------------------------------- --------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest earned on:
Loans $1,557 $(209) $1,348 $1,292 $(1,081) $ 211
Taxable securities 246 (521) (275) 193 (533) (340)
Nontaxable securities 539 (165) 374 117 (112) 5
Federal Home Loan
Bank stock 61 (6) 55 0 1 1
Interest-bearing deposits
with other banks (153) 0 (153) (322) (11) (333)
Federal funds sold 24 (50) (26) (194) (108) (302)
------------------------------- --------------------------------
Total interest earning assets 2,274 (951) 1,323 1,086 (1,844) (758)
------------------------------- --------------------------------
</TABLE>
88
<PAGE> 98
<TABLE>
<CAPTION>
1993 COMPARED TO 1992 COMPARED TO
1992 INCREASE 1991 INCREASE
(DECREASE) DUE TO (DECREASE) DUE TO
------------------------------------ ------------------------------------
Volume Rate(1) Net Volume Rate(1) Net
------------------------------------ ------------------------------------
Interest paid on:
<S> <C> <C> <C> <C> <C> <C>
NOW accounts 173 (253) (80) 140 (405) (265)
Savings accounts 77 (21) 56 46 (58) (12)
Money market deposits 11 (17) (6) 133 (190) (57)
Time deposits and individual
retirement accounts 91 (392) (301) (157) (1,050) (1,207)
Short-term borrowings 277 (14) 263 (54) (147) (201)
Notes payable 39 (3) 36 (25) 1 (24)
------------------------------------ ------------------------------------
Total interest-bearing
liabilities 668 (700) (32) 83 (1,849) (1,766)
------------------------------------ ------------------------------------
Net interest income $1,606 $(251) $1,355 $1,003 $ 5 $1,008
==================================== ====================================
<FN>
(1) Changes in interest income and interest expense due to both rate
and volume are included in rate variances.
</TABLE>
During 1993, average interest earning assets increased
$26,660,000. This increase in volume accounted for increased
interest income of $2,274,000. Of this total, $1,557,000 can be
attributed to increased loan volume of $16,701,000. Nontaxable
securities increased $6,358,000 while taxable securities increased
$3,380,000. FHLB stock increased by $1,575,000 and the combined
Federal funds sold and interest bearing deposits in other banks
decreased by $1,354,000. These increases in the volume of average
assets were largely due to the purchase of the Vega branch in April
1993 and caused interest income to increase by $2,274,000 while
changes in interest rates on the average volume of interest earning
assets reduced interest income $951,000. The decrease in interest
income associated with reduced rates reflects the general decline
in the level of rates during 1993. The net effect of the volume
and rate changes associated with interest earning assets increased
interest income $1,323,000.
Average interest-bearing liabilities increased $18,879,000
during 1993. Of this increase, $8,776,000 represents increased
borrowings from the FHLB advances program. The remaining increase
is a general increase in deposits caused by the purchase of the
Vega branch. These changes in the volume of deposits caused a
$352,000 increase in interest expense while the increase in FHLB
and other borrowings increased interest expense by $316,000. The
decreasing interest rate environment caused a decrease in interest
expense of $700,000, creating a net decrease in interest expense of
$32,000 in 1993.
The net effect of changes in rate and volume on interest
earning assets and interest-bearing liabilities in 1993 increased
net interest income by $1,355,000.
During 1992, average interest earning assets increased
$7,567,000 and average interest-bearing liabilities increased
$2,842,000 resulting in a net increase of $1,008,000 in net
interest income. The most significant changes in average assets
were an increase in loans of $11,394,000, which was largely offset by
89
<PAGE> 99
a decrease in combined Federal funds sold and interest-bearing
deposits with other banks of $7,251,000. Taxable and nontaxable
securities increased $3,398,000. These changes in the mix of
average earning assets and the overall increase in balances
resulted in $1,086,000 additional interest income; however, reduced
yields in all categories, as experienced in the industry, decreased
interest income $1,844,000 for a net overall decrease of $758,000.
Average interest-bearing deposits increased $4,133,000 while
borrowings decreased $1,291,000. In general, deposits moved from
longer term time deposits to shorter term, less expensive, demand
accounts. In total, volume changes in average interest-bearing
liabilities caused a net increase in expense of $83,000.
Consistent with assets, the general and significant decline in
interest rates during 1992 on average liabilities resulted in a
very favorable $1,849,000 decrease in interest expense, creating a
net decrease in interest expense of $1,766,000 in 1992.
The major influence on net interest income was the growth in
the earning assets during both 1993 and 1992. The increase in
interest income of $1,323,000 or 15% in 1993 was primarily due to
growth in the loan portfolio. The interest expense remained
relatively stable as interest rate decreases offset the growth in
deposits and borrowings used to fund the asset growth. The
decrease in interest expense of $1,766,000 or 36% in 1992 more
than offset the decrease in interest income of $758,000 or 8%.
PROVISION FOR LOAN LOSSES AND ALLOWANCE FOR LOAN LOSSES
The provision for loan losses provides an allowance (the
allowance for loan losses) against which loan losses are charged as
those losses become evident. Management evaluates the appropriate
level of the allowance for loan losses on a monthly basis. The
analyses take into consideration the results of an ongoing loan
review process, the purpose of which is to determine the level of
credit risk within the portfolio and to ensure proper adherence to
underwriting and documentation standards. A specific portion of
the allowance is allocated to those loans which appear to represent
a more than normal exposure to risk. In addition, estimates are
made for potential losses on loans not specifically reviewed, based
on historical loan loss experience and other factors and trends.
No provision for loan losses was required for 1991 or 1992, and
a negative provision of $522,000 was recorded in 1993 based on
management's evaluation of the adequacy of the allowance for loan
losses. Factors that influenced management's determination that a
negative provision for loan losses was appropriate included (i) an
evaluation of each nonperforming, classified and potential problem
loan to ascertain an estimate of loss exposure based upon
circumstances then known to management, (ii) current economic
conditions and outlook, and (iii) an overall review of the loan
portfolio in light of past loan loss experience. Net chargeoffs
(loan losses charged against the allowance for loan losses less
recoveries of prior chargeoffs) for 1991 and 1992 were $67,000 and
$91,000, respectively. Net recoveries of $82,000 were realized for
1993.
Based on Dalhart's review of remaining collateral or financial
condition of identified loans with characteristically more than a
normal degree of risk, historical loan loss percentages and
economic conditions, management believes the allowance for loan
losses at December 31, 1993 is adequate to cover future possible
losses.
90
<PAGE> 100
Following are tables setting forth the activity for loan losses
and certain ratios to nonperforming loans and total loans for 1993,
1992 and 1991.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1993 1992 1991
----------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C>
Balance at beginning of period $1,479 $1,388 $1,321
Loans charged off:
Agricultural - - -
Commercial and industrial 98 10 22
Residential real estate-mortgage - - -
Consumer 20 15 9
----------------------------------------
Total chargeoffs 118 25 31
----------------------------------------
Recoveries:
Agricultural 25 84 49
Commercial and industrial 5 7 27
Residential real estate-mortgage - 10 17
Consumer 6 15 5
----------------------------------------
Total recoveries 36 116 98
----------------------------------------
Net loans recovered (charged off) (82) 91 67
Negative provision for loan losses (522) - -
----------------------------------------
Balance at end of period $875 $1,479 $1,388
========================================
Net loan recoveries (chargeoffs)
to average loans (.12%) .17% .16%
Allowance to total loans 1.09% 2.43% 2.56%
Allowance to nonperforming loans 470% 49,300% 23,133%
</TABLE>
The allowance for loan losses is not allocated to specific categories of
loans. However, based on Dalhart's review of remaining collateral
and/or financial condition of identified loans with
characteristically more than a normal degree of risk, historical
loan loss percentages, and economic conditions, management believes
the allowance for loan losses at December 31, 1993 is adequate to
cover losses inherent in the portfolio.
Nonperforming assets are defined as loans delinquent 90 or more days,
nonaccrual loans, restructured loans, and foreclosed assets. Such
assets do not necessarily represent future losses to Dalhart since
underlying collateral can be sold and the financial condition of
the borrowers may improve. The following table sets forth the
detail of nonperforming loans. Dalhart had no restructured loans
or foreclosed loans at any of the dates listed herein.
91
<PAGE> 101
NONPERFORMING LOANS
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------
1993 1992 1991
--------------------------------
(In Thousands)
<S> <C> <C> <C>
Nonaccrual loans $185 $ 1 $ 6
Loans past due 90 days or more 1 2 -
--------------------------------
Total nonperforming loans $186 $ 3 $ 6
================================
</TABLE>
The nonaccrual loans at December 31, 1993 consisted of loans
to two borrowers. Of this amount, $135,000 was received in 1994
when the borrower sold the collateral on one loan. Additionally,
a partial recovery was received on the previously charged off
portion of this loan. The remaining nonaccrual loan at December
31, 1993 is expected to result in an additional chargeoff of
approximately $20,000, although the actual chargeoff is pending the
receipt of a settlement from a third party.
At December 31, 1993, 1992 and 1991, there were no significant
commitments to lend additional funds to borrowers whose loans were
considered nonperforming.
Dalhart's policy is to discontinue accruing interest on loans
when principal or interest is due and remains unpaid for 90 days or
more, unless the loan is well secured and in the process of
collection. Dalhart would have recognized additional interest
income of approximately $17,000, $1,000 and $3,000 for 1993, 1992
and 1991, respectively, if contractual interest on these loans had
been recognized. The amount of interest actually collected and
included in income related to these loans was $9,000 in 1993 and
$1,000 in 1991. No interest payments were received on
nonperforming loans in 1992.
The loan portfolio does not include any loans to foreign
countries or highly leveraged transaction loans. Approximately 49%
of the loans at Dalhart on December 31, 1993 were for agricultural
purposes. Commercial loans to individuals and businesses in the
local lending areas of the four locations represented 34% of the
loans. The remaining 17% consists largely of residential real
estate lending. Senior management closely monitors concentrations
to individual customers and actively participates within their
lending areas. Dalhart's lending policies require security for
loans including liens on residential mortgage loans and certain of
the other loans secured by real estate. In addition, policies and
procedures are in place to assess the creditworthiness of borrowers
for all loans and commitments. Borrowers' abilities to honor their
loan contracts can be largely dependent upon weather conditions and
economic conditions within their market areas and on a national
level.
Management attributes the low level of nonperforming assets to
a relatively stable economy in its primary market, strong efforts
in the credit review of potential borrowers, and close monitoring
of potential problem loans.
92
<PAGE> 102
NONINTEREST INCOME
The balance of earnings of a banking institution are typically
generated through noninterest income from fees and service charges.
The following tables outline the components of this income source
for the years ended December 31, 1993, 1992 and 1991:
<TABLE>
<CAPTION>
YEAR ENDED CHANGE CHANGE
DECEMBER 31, 1993/1992 1992/1991
-------------------------------------------------------------------------------
1993 1992 1991 AMOUNT PERCENT AMOUNT PERCENT
-------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Service charges $532 $467 $423 $ 65 13.92% $44 10.40%
Other operating
income 101 87 53 14 16.09 34 64.15
-------------------------------------------------------------------------------
Subtotal 633 554 476 79 14.26% 78 16.39%
Securities gains 85 24 16 61 254.17 8 50.00
-------------------------------------------------------------------------------
Total noninterest
income $718 $578 $492 $140 24.22% $86 17.48%
===============================================================================
</TABLE>
As noted above, noninterest income increased each year due to
growth in all major categories. The growth in service charges is
due to the growth in deposit accounts, which provide a majority of
this income. The growth in other operating income is primarily due
to the increased mortgage banking activities in 1992 and 1993 due
to the lower interest rate environment.
Net gains on sales of securities increased each year due to
increased market value differences as interest rates declined.
During the last half of 1993, Dalhart sold mortgage-backed
securities to fund the repayment of FHLB advances.
OTHER EXPENSES
<TABLE>
<CAPTION>
YEAR ENDED CHANGE CHANGE
DECEMBER 31, 1993/1992 1992/1991
---------------------------------------------------------------------------------
1993 1992 1991 AMOUNT PERCENT AMOUNT PERCENT
---------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Compensation and
employee benefits $2,242 $1,919 $1,466 $324 16.88% $453 30.90%
Occupancy expense 505 458 439 47 10.26 19 4.33
FDIC assessment 229 221 177 8 3.62 44 24.86
Other expenses 1,328 919 891 409 44.50 28 3.14
---------------------------------------------------------------------------------
Total noninterest
expenses $4,305 $3,517 $2,973 $788 22.41% $544 18.30%
=================================================================================
</TABLE>
93
<PAGE> 103
Noninterest expense increased in 1993 due to the acquisition
of the Vega branch in April. The acquisition increased
compensation expense $192,000, occupancy expense $36,000, FDIC
assessment $8,000, and other expense $153,000 for a total increase
of $389,000 or 11.06% of total 1992 noninterest expenses.
The remaining increase in compensation expense during 1993 is
due to normal salary and benefits increases. The increase from
1991 to 1992 is partly due to only including approximately 7.5
months of Amarillo's expenses in 1991.
The increases in the FDIC assessment relate to the growth in
deposits from the above mentioned branch acquisitions.
Other expenses remained flat from 1991 and 1992 and increased
by $357,000 between 1992 and 1993. The increase in 1993 is
primarily due to the following increases in specific accounts at
Dalhart, which amount to $309,000 of the increase:
<TABLE>
<S> <C>
Attorney fees $31,000
Data processing fees 31,000
Telephone 44,000
Amortization of core deposit premium 45,000
External audit fees 47,000
Postage and printing costs 51,000
Miscellaneous losses and expenses 60,000
</TABLE>
Many of these increases resulted from the purchase of the Vega
branch. Attorney fees paid in 1992 were negligible while fees were
incurred in 1993 to complete the Vega purchase. No external
examination or audit was performed in 1992. The miscellaneous
losses resulted primarily from unlocated errors in the mortgage
banking department and stop payment checks. These errors resulted
from inadequate controls over loans in the "pipeline" between
origination and sale of the loan. The stop payment losses were due
to checks that were paid on the date the stop payment was accepted.
INCOME TAXES
Dalhart files a consolidated Federal income tax return with
Dalhart-Delaware and Citizens Bank. Citizens Bank pays Federal
income tax expense to Dalhart based on taxable income of Citizens
Bank on a stand-alone basis. Deferred income taxes are provided on
certain transactions which are reported for financial reporting
purposes in different periods than for income tax purposes.
94
<PAGE> 104
A reconciliation of expected income tax expense, computed by
applying the effective Federal statutory rate of 34% to income
before the provision for income taxes is as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
-------------------------------------------------
1993 1992 1991
-------------------------------------------------
(In Thousands)
<S> <C> <C> <C>
Federal income taxes at statutory rate $1,163 $788 $602
Less effect of tax exempt income (273) (204) (189)
Amortization of intangibles 17 17 17
Life insurance expense 25 29 -
Other, net - 96 (16)
-------------------------------------------------
Total provision for income taxes $ 932 $726 $414
=================================================
</TABLE>
Dalhart adopted Statement of Financial Accounting Standard No.
109, "Accounting for Income Taxes," during 1993. The effect was to
increase reported consolidated results of operations by $148,000.
FINANCIAL CONDITION
INVESTMENTS
Dalhart's holdings of short-term investments and scheduled
maturities of investment securities serve as a source of liquidity
to meet depositor and borrower fund requirements, in addition to
being a significant element of total interest income. Federal
funds sold had outstanding balances at December 31, 1993 of
$4,025,000 and $4,200,000 at December 31, 1992. Investment
securities at December 31, 1993 of $49,680,000 increased $1,630,000
as compared to December 31, 1992 of $51,310,000. This increase in
the balance of investment securities is due primarily to increased
nontaxable securities.
95
<PAGE> 105
SECURITIES PORTFOLIO
The following table presents the composition of investments at
each year-end:
<TABLE>
<CAPTION>
1993 1992 1991
--------------------------------------------------------------------------
PERCENT PERCENT PERCENT
OF TOTAL OF TOTAL OF TOTAL
AMOUNT SECURITIES AMOUNT SECURITIES AMOUNT SECURITIES
--------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasuries
and agencies $ 2,357 4.74% $ 4,256 8.29% $ 4,761 11.19%
Obligations of
states and politi-
cal subdivisions 18,822 37.89 13,433 26.17 10,177 23.92
Mortgage-backed
securities 26,220 52.78 32,401 63.14 27,508 64.65
Corporate bonds
and other 2,281 4.59 1,230 2.40 102 .24
--------------------------------------------------------------------------
Total securities $49,680 100.00% $51,320 100.00% $42,548 100.00%
==========================================================================
</TABLE>
The fair value of total investment securities was $50,501,000,
$51,740,000 and $42,721,000 at December 31, 1993, 1992 and 1991,
respectively. Included in corporate bonds and other is FHLB stock with
a book value which approximates fair value of $2,281,000 and $877,000
at December 31, 1993 and 1992, respectively.
On January 1, 1994, Dalhart adopted SFAS 115, which is discussed
in the analysis of the June 30, 1994 investments portfolio. The FHLB
stock is not included in the SFAS 115 classifications due to the lack
of a published market value and certain restrictions that limit the
marketability of this investment. This stock is included in the
securities totals at cost and labeled as "All other equity securities"
for reporting on the Call Report beginning in March 1994.
96
<PAGE> 106
INVESTMENT SECURITIES-MATURITIES AND YIELDS
The following table shows the components and yields for the various
forms of investment securities as of December 31, 1993:
<TABLE>
<CAPTION>
AFTER ONE AFTER FIVE
IN ONE THROUGH THROUGH
YEAR OR LESS FIVE YEARS TEN YEARS AFTER TEN YEARS
--------------------------------------------------------------------------------------------
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
--------------------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasuries
and agencies $ 1,503 6.93% $ 854 8.29% $ - -% $ - -%
Obligations of states
and political
subdivisions(1) 3,145 7.87 13,112 7.21 2,427 8.07 137 9.52
Mortgage-backed
securities 10,123 6.51 12,569 6.11 2,088 4.99 1,440 5.11
--------------------------------------------------------------------------------------------
Total investment
securities $14,771 6.84% $26,535 6.72% $4,515 6.65% $1,577 5.50%
============================================================================================
<FN>
(1) Yield presented on a tax-equivalent basis assuming a tax rate of
34%.
</TABLE>
As discussed above, FHLB stock of $2,281,000 at December 31, 1993
is not included in this table as it represents an equity security with
no stated maturity.
LOANS
The loan portfolio constitutes the major earning asset of most bank
holding companies and typically offers the best alternative for
obtaining the maximum interest spread above the cost of funds. The
overall economic strength of any bank holding company generally
parallels the quality and yield of its loan portfolio. Dalhart's total
loans outstanding on December 31, 1993, 1992 and 1991, are presented in
the following table:
97
<PAGE> 107
<TABLE>
<CAPTION>
December 31,
----------------------------------------------------------------------------------
1993 1992 1991
----------------------------------------------------------------------------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
----------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Agricultural $33,007 40.94% $22,121 36.42% $26,119 48.11%
Commercial and industrial 19,123 23.72 14,074 23.17 13,213 24.34
Real estate:
Agricultural 6,288 7.80 5,684 9.36 5,652 10.41
Commercial 8,370 10.38 7,468 12.30 4,789 8.82
Residential 10,106 12.54 9,313 15.33 2,093 3.86
Construction and others 1,890 2.34 215 .35 539 .99
Consumer, net of unearned
income 1,733 2.15 1,794 2.95 1,629 3.00
Other 104 .13 72 .12 256 .47
----------------------------------------------------------------------------------
Total $80,621 100.00% $60,741 100.00% $54,290 100.00%
==================================================================================
</TABLE>
The loan portfolio increased $19,880,000 or 32.7% from December 31,
1992 to December 31, 1993, primarily in agricultural and commercial
loans. An increase of $6,451,000 or 11.9% from 1991 to 1992, was
experienced primarily in real estate loans, due to a lower interest rate
environment increasing mortgage banking activities at the Amarillo
branch.
The following tables set forth the maturity composition and interest
sensitivity of total loans at December 31, 1993.
MATURITY OF LOANS
<TABLE>
<CAPTION>
DECEMBER 31, 1993
-------------------------------------
PERCENT
LOANS OF TOTAL
-------------------------------------
(Dollars in Thousands)
<S> <C> <C>
In one year or less $76,541 94.94%
After one through five years 4,063 5.04
After five years 17 .02
-------------------------------------
Total loans $80,621 100.00%
=====================================
</TABLE>
98
<PAGE> 108
MATURITY CLASSES
<TABLE>
<CAPTION>
INTEREST SENSITIVITY
--------------------------------------
FIXED VARIABLE
RATE RATE
--------------------------------------
(In Thousands)
<S> <C> <C>
In one year or less $17,856 $58,685
After one through five years 4,063 -
After five years 17 -
--------------------------------------
Total loans $21,936 $58,685
======================================
</TABLE>
DEPOSITS
The deposit base provides the major funding source for interest
earning assets of most bank holding companies. Dalhart's deposits have
increased steadily during the period from December 31, 1992 to
December 31, 1993. Dalhart's total average deposits were $115,901,000
in 1993, an increase of $18,198,000 over 1992. Generally, demand,
savings, and certificates of deposit less than $100,000 are recognized
as the core base of deposits while certificates of deposit in excess of
$100,000 and public funds are more interest rate sensitive and, thus,
are not considered part of the core deposit base. Because of these
factors, management views the growth in deposits other than certificates
of deposit of $100,000 or more as more stable growth. During 1993,
Dalhart's customers preferred NOW Accounts and money market accounts as
these types of deposits adjusted more quickly to rate changes than
certificates of deposit.
The following table indicates the mix and levels of deposits at
December 31, 1993 compared to December 31, 1992.
99
<PAGE> 109
<TABLE>
<CAPTION>
DECEMBER 31, DECEMBER 31,
1993 1992 CHANGE
-------------------------------------------------------------------------------------------
COST OF COST OF
AMOUNT FUNDS PERCENT AMOUNT FUNDS PERCENT AMOUNT PERCENT
-------------------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Demand and other
noninterest bearing $ 35,996 n/a% 28.06% $26,465 n/a% 25.77% $9,531 36.01%
NOW accounts 24,379 2.50 19.00 19,993 2.85 19.46 4,386 21.94
Savings accounts 6,306 3.00 4.92 4,182 3.00 4.07 2,124 50.79
Money market deposit
accounts 14,382 2.75 11.21 12,218 3.10 11.89 2,164 17.71
Certificates of deposit
including individual
retirement accounts(1):
Less than $100,000 34,308 3.26 26.75 29,817 3.43 29.03 4,491 15.06
$100,000 or more 12,904 3.23 10.06 10,043 3.43 9.78 2,861 28.49
-------------------------------------------------------------------------------------------
Total Deposits $128,275 2.13% 100.00% $102,718 2.38% 100.00% $25,557 24.88%
===========================================================================================
<FN>
(1) Interest rate information is not available for a breakdown of cost
of funds for certificates of deposits less than $100,000 and
$100,000 or more on December 31, 1992. Therefore, a combined rate
is being used.
</TABLE>
AMOUNT AND MATURITIES OF TIME DEPOSITS OF $100,000 OR MORE
The following table sets forth the amount and maturities of time
deposits of $100,000 or more at December 31, 1993:
<TABLE>
<CAPTION>
DECEMBER 31, PERCENT
1993 OF TOTAL
-------------------------------------------
(Dollars in Thousands)
<S> <C> <C>
Three months or less $8,693 67.37%
Over three through twelve
months 4,211 32.63
Over twelve months - -
-------------------------------------------
Total $12,904 100.00%
===========================================
</TABLE>
100
<PAGE> 110
SHORT-TERM BORROWINGS
Amounts and interest rates related to short-term borrowings at
December 31, 1993, 1992 , and 1991 were as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
1993 1992 1991
--------------------------------------
(Dollars in Thousands)
Federal funds purchased:
<S> <C> <C> <C>
Outstanding balance at year-end $ - $ 7,250 $7,175
Average interest rate at year-end n/a% 3.25% 4.19%
Average outstanding during the year $ 5,107 $ 5,584 $6,083
Weighted average interest rate 3.02% 3.43% 5.39%
Highest outstanding balance at any month-end $10,275 $ 8,100 $9,625
Federal Home Loan Bank advances:
Outstanding balance at year-end $ 6,000 $ 7,000 $ -
Average interest rate at year-end 3.10% 3.40% n/a%
Average outstanding during the year $ 9,077 $ 98 $ -
Weighted average interest rate 3.08% 3.40% n/a%
Highest outstanding balance at any month-end $15,000 $ 7,000 $ -
</TABLE>
LIQUIDITY AND RATE SENSITIVITY
Liquidity is the measure of Dalhart's ability to meet its customers'
present and future deposit withdrawals or increased loan demand without
unduly penalizing earnings. Interest rate sensitivity involves the
relationship between rate sensitive assets and liabilities and is an
indication of the probable effects of interest rate fluctuations on
Dalhart's net interest income. Dalhart manages both liquidity and
interest sensitivity through a GAP analysis report prepared monthly.
Liquidity is provided for Dalhart by projecting credit demand and
other financial needs and then maintaining sufficient cash and assets
readily convertible into cash to meet these projected requirements.
Dalhart provided for its liquidity needs through core deposits, maturing
loans, and scheduled maturities of investments in securities, and by
maintaining adequate balances in Federal funds sold. At December 31,
1993, cash and Federal funds sold amounted to $14,152,000 or 9.42% of
total assets. This is a decrease of $71,000 from December 31, 1992,
when cash and Federal funds sold totaled $14,613,000 or 11.25% of total
assets. This level of cash and cash equivalents is considered to be
adequate in view of projected liquidity needs.
Dalhart's liquidity is generally provided by dividends received from
Citizens Bank. These funds are available for the overhead expenses and
the payment of dividends to shareholders. Dividends paid by Citizens
Bank during 1993, 1992 and 1991 were $575,000, $450,000 and $550,000,
of which 93.17% were paid to Dalhart-Delaware and subsequently to
Dalhart.
Interest rate-sensitive assets and liabilities are those with yields
or rates subject to change within a future time period due to maturity
or changes in market rates. An ongoing objective of Dalhart's
asset/liability management program is to match rate-adjustable assets
and liabilities at similar maturity horizons, so that changes in
interest rates will not result in wide fluctuations in net interest
income. The rate
101
<PAGE> 111
sensitivity position is managed by matching funds
acquired having a specific maturity with loans, securities, or other
liquid assets with similar maturities.
At December 31, 1993, $76,541,000 or 94.94%, of the loan portfolio
repriced in one year or less. In addition, investment securities
maturing in one year or less of $14,771,000 and Federal funds sold of
$4,025,000 bring total rate-sensitive assets maturing or repricing
within one year to $95,337,000 or 71.44% of total interest-earning
assets. When matched with interest-bearing demand deposits, savings
deposits, and time deposits of $100,000 or more maturing within one year
of $57,971,000, this represented a position which management believed
appropriate given the increasing interest rate environment expected at
December 31, 1993.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF CITIZENS BANK
This section presents an analysis of the financial condition of
Citizens Bank at June 30, 1994, December 31, 1993 and 1992, and the
results of operations for the six months ended June 30, 1994 and 1993
and for the years ended December 31, 1993, 1992 and 1991. This review
should be read in conjunction with the financial statements of Citizens
Bank, notes to the financial statements, and financial data presented
elsewhere in this Joint Proxy Statement/Prospectus.
FOR THE SIX MONTHS ENDED JUNE 30, 1994 AND 1993
RESULTS OF OPERATIONS
Net income for the six months ended June 30, 1994 was $931,000 or
$46.55 per share compared to $1,356,000 or $67.80 per share for the six
months ended June 30, 1993. The decrease in net income primarily
reflected a $400,000 negative provision for loan losses recorded in 1993
and higher noninterest expense resulting from the acquisition of the
Vega branch in April 1993. Net income for the six months ended June 30,
1994, as compared with the same period in the previous year, on an
annualized basis, as a percent of average assets and average equity was:
<TABLE>
<CAPTION>
RETURN ON RETURN ON
AVERAGE ASSETS AVERAGE EQUITY
JUNE 30 JUNE 30
------------------- -------------------
1994 1993 1994 1993
------------------- -------------------
<S> <C> <C> <C> <C>
Net income 1.35% 1.98% 14.36% 25.26%
</TABLE>
For the six months ended June 30, 1994, the dividend payout ratio
(dividends declared divided by net income) was 9.88%. Citizens Bank
declared no dividends in the six months ended June 30, 1993.
Following is an analysis of the primary components of net income for
the six months ended June 30, 1994 and 1993.
NET INTEREST INCOME
Net interest income is the principal source of Citizens Bank's net
income and represents the difference between interest income and
interest expense. The following schedule provides a summary of net interest
102
<PAGE> 112
income, average earning asset balances and the related interest
rates/yields for the six month periods. Federal funds purchased and
sold are netted for this presentation. Nonaccruing loans are included
in the interest-earning assets; interest income on such loans is
recorded when received.
Interest earning assets includes tax-exempt investments and the
related income is presented on a tax-equivalent basis assuming a tax
rate of 34% in 1994 and 1993. The amount of the tax-equivalent
adjustment was $222,000 and $219,000 for the six months ended June 30,
1994 and 1993, respectively.
103
<PAGE> 113
<TABLE>
<CAPTION>
JUNE 30, 1994
------------------------------------------------------
INTEREST AVERAGE
AVERAGE PERCENT OF INCOME/ YIELD/
BALANCE TOTAL ASSETS EXPENSE RATE
-----------------------------------------------------
(Dollars in Thousands)
Interest-earning assets:
<S> <C> <C> <C> <C>
Loans $70,959 51.34% $3,182 8.97%
Taxable securities 30,120 21.79 803 5.33
Nontaxable securities 17,429 12.61 652 7.48
FHLB Stock 2,292 1.66 47 4.10
Interest bearing deposits with
other banks 377 0.27 14 7.43
Federal funds sold 5,961 4.31 89 2.99
------------------------------------------------
Total interest-earning assets $127,138 91.98% $4,787 7.53%
--------------------------------------------------
Noninterest-bearing assets:
Cash and due from banks $ 7,275 5.27%
Premises and equipment 2,242 1.62
Other assets 2,457 1.78
Allowance for loan losses (895) (0.65)
----------------------
Total assets $138,217 100.00%
=====================
Interest-bearing liabilities:
NOW accounts $ 25,054 18.13% $ 295 2.35%
Savings accounts 7,609 5.50 99 2.60
Money market accounts 16,844 12.19 224 2.66
Time deposits and individual
retirement accounts 45,470 32.90 739 3.25
Short-term borrowings 876 0.63 15 3.42
Notes payable 265 0.19 8 6.04
--------------------------------------------------
Total interest-bearing
liabilities $ 96,118 69.54% $1,380 2.87%
--------------------------------------------------
Noninterest-bearing liabilities:
Demand deposits $ 28,376 20.53%
Other liabilities 759 0.55
---------------------
Total liabilities 125,253 90.62
Stockholders' equity 12,964 9.38
---------------------
Total liabilities and stock-
holders' equity $138,217 100.00%
=====================
Net interest income $3,407
======
Interest rate spread 4.66%
====
Net interest margin 5.36%
====
</TABLE>
104
<PAGE> 114
<TABLE>
<CAPTION>
JUNE 30, 1993
------------------------------------------------------
INTEREST AVERAGE
AVERAGE PERCENT OF INCOME/ YIELD/
BALANCE TOTAL ASSETS EXPENSE RATE
-----------------------------------------------------
(Dollars in Thousands)
Interest-earning assets:
<S> <C> <C> <C> <C>
Loans $63,875 46.68% $2,861 8.96%
Taxable securities 37,941 27.73 1,166 6.15
Nontaxable securities 16,544 12.09 644 7.78
FHLB stock 999 0.73 17 3.40
Interest bearing deposits with
other banks 1,586 1.16 63 7.94
Federal funds sold 6,350 4.64 87 2.74
--------------------------------------------------
Total interest-earning assets $127,295 93.03% $4,838 7.60%
--------------------------------------------------
Noninterest-bearing assets:
Cash and due from banks $ 6,837 5.00%
Premises and equipment 1,720 1.26
Other assets 2,467 1.80
Allowance for loan losses (1,490) (1.09)
----------------------
Total assets $136,829 100.00%
=====================
Interest-bearing liabilities:
NOW accounts $ 22,790 16.65% $ 287 2.52%
Savings accounts 4,721 3.45 67 2.84
Money market accounts 15,377 11.24 210 2.73
Time deposits and individual
retirement accounts 43,098 31.50 713 3.31
Short-term borrowings 13,710 10.02 204 2.98
Notes payable --- --- --- ---
--------------------------------------------------
Total interest-bearing
liabilities $ 99,696 72.86% $1,481 2.97%
--------------------------------------------------
Noninterest-bearing liabilities:
Demand deposits $ 25,791 18.85%
Other liabilities 607 0.44
---------------------
Total liabilities 126,094 92.15
Stockholders' equity 10,735 7.85
---------------------
Total liabilities and stock-
holders' equity $136,829 100.00%
=====================
Net interest income $3,357
======
Interest rate spread 4.63%
====
Net interest margin 5.27%
====
</TABLE>
105
<PAGE> 115
The slight increase in net interest income from 1993 to 1994 for
the six month periods ending June 30 was primarily attributable to the
growth of the loan portfolio. In analyzing the details of these
changes, only three months activity for the Vega branch is included in
the 1993 results as it was purchased in April 1993. Interest expense
on deposits increased $80,000, including a $64,000 increase for Vega.
The remaining increase of $16,000 is primarily due to an increase in
average deposits offset by decreasing interest rates. The decrease in
interest expense on borrowings of $181,000 resulted from the repayment
of borrowings during late 1993. These changes resulted in a net
decrease in interest expense of $101,000, representing a decrease of
6.9% in the cost of funds.
Interest income on earning assets decreased $51,000, which is
partially due to the sale of investment securities to repay a portion
of the borrowings, as discussed above. The net interest margin
increased from 5.27% to 5.36%. Average interest earning assets
decreased from $127,295,000 at June 30, 1993 to $127,138,000 at June 30,
1994. During the same period, average interest bearing liabilities
decreased from $99,696,000 at June 30, 1993 to $96,118,000 at June 30,
1994.
PROVISION FOR LOAN LOSSES AND ALLOWANCE FOR LOAN LOSSES
Following are tables of the activity for loan losses for the six
months ending June 30, 1994 and the year ending December 31, 1993:
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
JUNE 30, DECEMBER 31,
1994 1993
----------------------------------------------
(Dollars in Thousands)
<S> <C> <C>
Balance at beginning of period $875 $1,479
Loans charged off:
Agricultural - -
Commercial and industrial 1 98
Residential real estate-mortgage - -
Consumer 5 20
----------------------------------------------
Total chargeoffs 6 118
----------------------------------------------
Recoveries:
Agricultural - 25
Commercial and industrial 19 5
Residential real estate-mortgage - -
Consumer 2 6
----------------------------------------------
Total recoveries 21 36
----------------------------------------------
Net loans recovered (charged off) 15 (82)
Negative provision for loan losses - (522)
----------------------------------------------
Balance at end of period $890 $ 875
==============================================
Net loan recoveries (chargeoffs) to average loans .04% (.12%)
Allowance to total loans 1.41% 1.09%
Allowance to nonperforming loans 1,745% 470%
</TABLE>
106
<PAGE> 116
The allowance for loan losses is not allocated to specific
categories of loans. However, based on Citizens Bank's review of
remaining collateral and/or financial condition of identified loans with
characteristically more than a normal degree of risk, historical loan
loss percentages, and economic conditions, management believes the
allowance for loan losses at June 30, 1994 is adequate to cover losses
inherent in the portfolio.
The economy in Citizens Bank's primary market area has steadily
improved in recent years. As a result, negative provisions to the
allowance were recorded in 1993. In addition, there was a net recovery
of charged off loans during the first six months of 1994, and
nonperforming loans decreased when one borrower repaid a majority of the
principal outstanding.
Nonperforming assets are defined as loans delinquent 90 or more
days, nonaccrual loans, restructured loans, and foreclosed assets. Such
assets do not necessarily represent future losses to Citizens Bank since
underlying collateral can be sold and the financial condition of the
borrowers may improve. The following table sets forth the detail of
nonperforming loans. Citizens Bank had no restructured loans or
foreclosed assets at any of the dates listed herein.
NONPERFORMING LOANS
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31, JUNE 30,
1994 1993 1993
---------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C>
Nonaccrual loans $50 $185 $ -
Loans past due 90 days or more 1 1 23
---------------------------------------------------------------
Total nonperforming loans $51 $186 $23
===============================================================
</TABLE>
The nonaccrual loans at December 31, 1993 consisted of loans to two
borrowers. Of this amount, $135,000 was received in 1994 when the
borrower sold the collateral on one loan. Additionally, a partial
recovery was received on the previously charged-off portion of this
loan. The remaining nonaccrual loan at June 30, 1994 is expected to
result in an additional chargeoff of approximately $20,000, although the
actual chargeoff is pending the receipt of a settlement from a third
party.
Citizens Bank's policy is to discontinue accruing interest on loans
when principal or interest is due and remains unpaid for 90 days or
more, unless the loan is well secured and in the process of collection.
Citizens Bank would have recognized additional interest income for the
periods ended June 30, 1994 and 1993 of approximately $11,000, and
$7,000, respectively, if contractual interest on these loans had been
recognized. This additional interest income would have been $17,000 for
the year ended December 31, 1993. Interest income totaling $6,000 was
actually collected on nonaccrual loans in the first six months of 1993,
and $9,000 was collected during the year ended December 31, 1993.
At June 30, 1994, there were no significant commitments to lend
additional funds to borrowers whose loans were considered nonperforming.
107
<PAGE> 117
The loan portfolio does not include any loans to foreign countries
or highly leveraged transaction loans. Approximately 48% of the loans
at Citizens Bank on June 30, 1994 were for agricultural purposes.
Commercial loans to individuals and businesses in the local lending
areas of the four locations represented 35% of the loans. The remaining
17% consists largely of residential real estate lending. Senior
management closely monitors concentrations to individual customers and
actively participates within their lending areas. Citizens Bank has
written policies that require security for loans including liens on
residential mortgage loans and certain of the other loans secured by
real estate. In addition, policies and procedures are in place to
assess the creditworthiness of borrowers for all loans and commitments.
Borrowers' abilities to honor their loan contracts can be largely
dependent upon weather conditions and economic conditions within their
market areas and on a national level.
Management attributes the low level of nonperforming assets to a
relatively stable economy in its primary market, strong efforts in the
credit review of potential borrowers, and close monitoring of potential
problem loans.
NONINTEREST INCOME
For the six months ended June 30, 1994, deposit service charge
income remained stable and other noninterest income increased $26,000
as compared to the six months ended June 30, 1993. This increase
included an $11,000 increase at the Vega branch, which was acquired on
April 1, 1993. An additional increase of $13,000 resulted from the sale
of fully-depreciated furniture and equipment.
There were no gains or losses on sales of investment securities for
the six months ended June 30, 1994 and 1993.
OTHER EXPENSES
Compensation and benefits increased $77,000 or 6.9% during the six
months ended June 30, 1994 as compared to the same period in 1993. This
increase is primarily due to including six months of expense from the
Vega branch in 1994 versus only three months expense in 1993. The
expense for the Vega branch increased $54,000 during this period.
Occupancy expense increased $97,000 or 44.8% with Vega branch costs
providing $17,000 of this increase. The remainder is primarily due to
increased depreciation expense associated with significant building
improvements and related equipment additions at the main bank in Dalhart
being placed in service in late 1993.
Other operating expenses increased $140,000 or 21.4% with only
negligible increases at the Vega branch. Attorney fees increased
$26,000 due to ongoing litigation related to one nonaccrual loan and
issues related to the pending sale of Dalhart. The Federal Deposit
Insurance Corporation assessment, which is based on the level of deposit
accounts, increased $26,000. Foreclosure expenses of $11,000 were
incurred and telephone expense increased $23,000. The remaining
increase was primarily due to an adjustment of $18,000 relating to
accounting errors in the investment portfolio and $29,000 in losses
recorded by the mortgage banking division. These losses were primarily
caused by Citizens Bank paying to buy down the interest rate for loans
originated for sale prior to the increase in interest rates in early
1994. Documentation errors delayed the settlement of loan sales beyond
the interest rate lock periods for the individual loans.
108
<PAGE> 118
INCOME TAXES
Dalhart files a consolidated Federal income tax return including
Dalhart-Delaware and Citizens Bank. Citizens Bank pays Federal income
tax expense to Dalhart based on the taxable income of Citizens Bank on
a stand-alone basis. Deferred income taxes are provided on certain
transactions which are reported for financial reporting purposes in
different periods than for income tax purposes.
A reconciliation of expected income tax expense for Citizens Bank,
computed by applying the effective Federal statutory rate of 34% to
income before the provision for income taxes is as follows:
<TABLE>
<CAPTION>
JUNE 30,
--------------------------------------
1994 1993
--------------------------------------
(In Thousands)
<S> <C> <C>
Federal income taxes at statutory rate $ 412 $628
Less effect of tax exempt income (133) (136)
Other 2 (2)
--------------------------------------
Total provision for income taxes $ 281 $490
======================================
</TABLE>
FINANCIAL CONDITION
INVESTMENTS
On January 1, 1994, Citizens Bank adopted Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" ("SFAS 115"). Under SFAS 115, each security
is classified as either trading, available for sale, or held to
maturity. Citizens Bank has no securities held in a trading account.
Investments held to maturity are recorded at amortized cost. The
securities available for sale are recorded at their fair value. The
after-tax difference between amortized cost and fair value of securities
available for sale is recorded as "unrealized gain (loss) on securities"
in the equity section of the balance sheet. The tax impact is recorded
as an adjustment to the deferred tax liability.
The following table presents the composition of investment securities
and the change in each category for the periods presented:
109
<PAGE> 119
<TABLE>
<CAPTION>
CHANGE
JUNE 30, DECEMBER 31, -------------------------
1994 1993 AMOUNT PERCENT
--------------------------------- -------------------------
(Dollars in Thousands)
Held to Maturity:
<S> <C> <C> <C> <C>
U.S. Treasuries and
agencies $ 3,252 $ 2,357 $ 895 37.97%
Obligations of states
and political
subdivisions 9,462 18,822 (9,360) (49.73)
Mortgage-backed
securities 2,156 26,220 (24,064) (91.78)
--------------------------------- -------------------------
Total investments held
to maturity 14,870 47,399 (32,529) (68.63)
--------------------------------- -------------------------
Available for sale:
U.S. Treasuries and
agencies 590 - 590 n/a
Obligations of states
and political
subdivisions 7,252 - 7,252 n/a
Mortgage-backed
securities 29,593 - 29,593 n/a
--------------------------------- -------------------------
Total investments
available for sale 37,435 - 37,435 n/a
--------------------------------- -------------------------
Total investments $52,305 $47,399 $ 4,906 10.35%
================================= =========================
</TABLE>
Not included in the above table are other equity securities
consisting of Federal Home Loan Bank ("FHLB") stock, which is discussed
herein.
Citizens Bank's holdings of short-term investments and scheduled
maturities of investment securities serve as a source of liquidity to
meet depositor and borrower fund requirements, in addition to being a
significant element of total interest income. Short-term investments,
consisting of Federal funds sold, had outstanding balances at June 30,
1994 of $2,350,000 and $4,025,000 at December 31, 1993. Investment
securities, excluding other equity securities, increased to $52,305,000
on June 30, 1994 from a December 31, 1993 balance of $47,399,000. This
includes an unrealized loss adjustment to the available for sale
securities recorded under SFAS 115. The market value of total
investment securities was $52,453,000 and $48,220,000 at June 30, 1994
and December 31, 1993, respectively.
110
<PAGE> 120
<TABLE>
INVESTMENT SECURITIES--MATURITIES AND YIELDS
The following table shows the maturities and yields for the various
forms of investment securities as of June 30, 1994:ao
<CAPTION>
IN ONE YEAR OR LESS AFTER ONE THROUGH AFTER FIVE THROUGH
FIVE YEARS TEN YEARS AFTER TEN YEARS
---------------------------------------------------------------------------------------------
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
---------------------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasuries
and agencies $1,603 7.18% $ 2,239 7.04% $ - -% $ - -%
Obligations of
states and
political subdivisions(1) 3,698 7.38 11,695 7.14 1,189 9.04 132 9.51
Mortgage-backed
securities 4,196 7.02 20,855 6.17 2,951 5.76 3,747 4.34
---------------------------------------------------------------------------------------------
Total investment
securities $9,497 7.19% $34,789 6.55% $4,140 6.70% $3,879 4.52%
=============================================================================================
<FN>
(1) Yield presented on a tax-equivalent basis assuming a tax rate of
34%.
(2) Included in maturity table based on their average remaining life
or call date, if applicable.
</TABLE>
Other equity securities consisting of FHLB stock totaled $2,328,000
at June 30, 1994 and $2,281,000 at December 31, 1993. The dividends
received on this stock provided annualized returns of 4.10% for the
first six months of 1994 and 3.50% for 1993.
LOANS
The loan portfolio constitutes the major earning asset of most
banks and typically offers the best alternative for obtaining the
maximum interest spread above the cost of funds. The overall economic
strength of any bank generally parallels the quality and yield of its
loan portfolio. The following table presents loans outstanding at June
30, 1994 and December 31, 1993.
111
<PAGE> 121
LOAN PORTFOLIO
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1994 1993
---------------------- ----------------------
PERCENT PERCENT
AMOUNT OF TOTAL AMOUNT OF TOTAL
-----------------------------------------------------------
<S> <C> <C> <C> <C>
Agricultural $23,812 37.76% $33,007 40.94%
Commercial and industrial 15,142 24.01 19,123 23.72
Real estate
Agricultural 6,393 10.14 6,288 7.80
Commercial 6,945 11.01 8,370 10.38
Residential 7,060 11.20 10,106 12.54
Construction and others 2,054 3.26 1,890 2.34
Consumer, net of unearned
income 1,540 2.44 1,733 2.15
Other 144 .18 104 .13
-----------------------------------------------------------
Total $63,060 100.00% $80,621 100.00%
===========================================================
</TABLE>
The loan portfolio decreased by $17,561,000 or 21.78% from
December 31, 1993 to June 30, 1994. Agricultural loans tend to repay
during the first half of the year. As a result of market conditions,
the loan demand has decreased in this area, especially for loans secured
by cattle. A decrease of $3,046,000 was noted in residential loans due
to the decrease in mortgage banking activities in Amarillo as a result
of rising interest rates.
The following tables set forth the maturity composition and
interest sensitivity of total loans at June 30, 1994.
MATURITY OF LOANS
<TABLE>
<CAPTION>
JUNE 30, 1994
---------------------------------------
LOANS PERCENT OF TOTAL
---------------------------------------
(Dollars in Thousands)
<S> <C> <C>
In one year or less $59,649 94.59%
After one through five years 3,232
After five years 179 5.13
.28
---------------------------------------
Total loans $63,060 100.00%
=======================================
</TABLE>
112
<PAGE> 122
MATURITY CLASSES
<TABLE>
<CAPTION>
INTEREST SENSITIVITY
--------------------------------------------
FIXED VARIABLE
RATE RATE
--------------------------------------------
(In Thousands)
<S> <C> <C>
In one year or less $11,056 $48,593
After one through five years 3,232 -
After five years 179 -
--------------------------------------------
Total loans $14,467 $48,593
============================================
</TABLE>
DEPOSITS
The deposit base provides the major funding source for interest
earning assets of Citizens Bank. Citizens Bank's average deposits have
steadily risen during the period from December 31, 1993 to June 30,
1994. Citizens Bank's total average deposits were $123,353,000 for the
six months ended June 30, 1994 an increase of $7,436,000 or 6.4% when
compared to the year ended December 31, 1993. Management believes that
demand, savings and certificates of deposit less than $100,000 represent
a core base of deposits while certificates of deposit in excess of
$100,000 and public funds are more interest rate sensitive and, thus,
are not viewed as part of the core deposit base. Because of these
factors, management views the growth of demand, savings and time
certificates of deposit less than $100,000 as more stable growth.
113
<PAGE> 123
The following table indicates the mix and levels of deposits at
June 30, 1994 compared to December 31, 1993 and June 30, 1993.
<TABLE>
<CAPTION>
JUNE 30, 1994 DECEMBER 31, 1993 JUNE 30, 1993
--------------------------------------------------------------------------------------------------
COST OF COST OF COST OF
AMOUNT FUNDS PERCENT AMOUNT FUNDS PERCENT AMOUNT FUNDS PERCENT
--------------------------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Demand and other
noninterest bearing $23,585 n/a% 20.36% $36,016 n/a% 28.07% $24,538 n/a% 21.01%
NOW accounts 24,639 2.50 21.27 24,379 2.50 19.00 23,145 2.50 19.81
Savings accounts 8,579 2.90 7.40 6,306 3.00 4.92 5,457 3.00 4.67
Money market deposit accounts 15,567 2.85 13.44 14,382 2.75 11.21 17,421 2.75 14.92
Certificates of deposit and
individual retirement
accounts(1):
Less than $100,000 32,407 3.43 27.97 34,308 3.26 26.74 35,975 3.29 30.80
$100,000 or more 11,083 3.55 9.56 12,904 3.23 10.06 10,264 3.29 8.79
--------------------------------------------------------------------------------------------------
Total Deposits $115,860 2.43% 100.00% $128,295 2.13% 100.00% $116,800 2.35% 100.00%
==================================================================================================
<FN>
(1) Interest rate information is not available for a breakdown for
certificates of deposit less than $100,000 and $100,000 or more on
June 30, 1993. Therefore, the average rate for all certificates of
deposit is listed for both classifications.
</TABLE>
<TABLE>
AMOUNT AND MATURITIES OF TIME DEPOSITS OF $100,000 OR MORE
The following table sets forth the amount and maturities of time
deposits of $100,000 or more as of June 30, 1994:
<CAPTION>
JUNE 30, PERCENT
1994 OF TOTAL
-----------------------------
(Dollars in Thousands)
<S> <C> <C>
Three months or less $ 6,135 55.36%
Over three through twelve months 4,848 43.74
Over twelve months 100 .90
-----------------------------
Total $11,083 100.00%
=============================
</TABLE>
114
<PAGE> 124
<TABLE>
SHORT-TERM BORROWINGS
Amounts and interest rates related to short-term borrowings at June
30, 1994 and December 31, 1993 were as follows:
<CAPTION>
JUNE 30, 1994 DECEMBER 31, 1993
----------------------------------------------
(Dollars in Thousands)
<S> <C> <C>
Federal funds purchased:
Outstanding balance at period-end $ - $ -
Average interest rate at period-end n/a% n/a%
Average outstanding during the period $ - $ 5,107
Weighted average interest rate n/a% 3.02%
Highest outstanding balance at any month-end $ - $10,275
Federal Home Loan Bank advances:
Outstanding balance at period-end $ - $ 6,000
Average interest rate at period-end n/a% 3.10%
Average outstanding during the period $ 355 $ 9,077
Weighted average interest rate 3.10% 3.08%
Highest outstanding balance at any month-end $ - $15,000
</TABLE>
LIQUIDITY AND RATE SENSITIVITY
Liquidity is the measure of Citizens Bank's ability to meet its
customers' present and future deposit withdrawals or increased loan
demand without unduly penalizing earnings. Interest rate sensitivity
involves the relationship between rate sensitive assets and liabilities
and is an indication of the probable effects of interest rate
fluctuations on Citizens Bank's net interest income. Citizens Bank
manages both liquidity and interest sensitivity through a GAP analysis
report prepared monthly.
Liquidity is provided for Citizens Bank by projecting credit demand
and other financial needs and then maintaining sufficient cash and
assets readily convertible into cash to meet these projected
requirements. Citizens Bank provided for its liquidity needs through
core deposits, maturing loans, and scheduled maturities of investments
in securities, and by maintaining adequate balances in Federal funds
sold. At June 30, 1994, cash and Federal funds sold amounted to
$8,794,000 or 6.72% of total assets. This is a decrease of $5,357,000
from December 31, 1993 when cash and Federal funds sold totaled
$14,151,000 or 9.51% of total assets. This level of cash and cash
equivalents is considered to be adequate in view of projected liquidity
needs.
Interest rate-sensitive assets and liabilities are those with
yields or rates subject to change within a future time period due to
maturity or changes in market rates. An ongoing objective of Citizens
Bank's asset/liability management program is to match rate-adjustable
assets and liabilities at similar maturity horizons, so that changes in
interest rates will not result in wide fluctuations in net interest
income. The rate sensitivity position is managed by matching funds
acquired having a specific maturity with loans, securities, or other
liquid assets with similar maturities.
At June 30, 1994, $59,649,000 or 94.6%, of the loan portfolio will
reprice in one year or less. In addition, investment securities maturing
in one year or less of $9,497,000 and Federal funds sold of $2,350,000
bring total rate-sensitive assets maturing or repricing within one year
to $71,496,000. When
115
<PAGE> 125
matched with interest-bearing demand deposits,
savings deposits and time deposits of $100,000 or more maturing within
one year totaling $59,768,000, this represents a position which
management believes acceptable given the increasing interest rate
environment at June 30, 1994.
CAPITAL
The strength of its capital position determines the ability of a
financial institution to take advantage of growth opportunities and
handle unforeseen financial difficulties. Citizens Bank's stockholders'
equity at June 30, 1994 was $13,039,000 an increase of $514,000 or 4.1%
from the December 31, 1993 total of $12,525,000. The June 30, 1994
stockholders' equity includes unrealized loss on investment securities
available for sale of $325,000. The average equity to average assets
ratio for the six months ended June 30, 1994 and 1993, respectively,
were 9.38% and 7.85%. These ratios for the years ended December 31,
1993, 1992 and 1991, respectively were 7.96%, 8.46%, and 7.87%.
Citizens Bank is subject to the issuance of capital adequacy
guidelines by its regulators, all of which have issued similar
guidelines for the measurement of capital adequacy. One measure is the
leverage capital ratio, which equals the ratio of ending total capital
less intangible assets to average total assets on a quarterly basis from
the latest Consolidated Reports of Income and Condition ("Call Report")
less intangible assets. The guidelines also include a definition of
capital and provide a framework for calculating risk-weighted assets by
assigning assets and off-balance-sheet instruments to broad risk
categories. The risk-based capital standards establish a minimum ratio
of total capital to risk-weighted assets with a minimum of 4% when using
Tier 1 capital and a minimum of 8% when including total capital. Tier 1
capital is the sum of the core capital elements (common stockholders'
equity less intangible assets). Total capital includes the allowance for
loan losses limited to a maximum of 1.25% of risk-weighted assets.
116
<PAGE> 126
<TABLE>
As the following table indicates, Citizens Bank exceeded the
minimum risk-based and leverage ratios at June 30, 1994 and December 31,
1993:
<CAPTION>
JUNE 30, DECEMBER 31, MINIMUM
1994 1993 LEVELS
---------- ------------ -------
(Dollars in Thousands)
<S> <C> <C> <C>
Capital Components:
Tier 1 capital $ 12,532 $ 11,638
Total capital 13,422 12,513
Assets:
Risk-weighted assets and
off-balance-sheet instruments $84,131 $100,072
Capital ratios:
Leverage 9.21% 7.61% 3.00%
Tier 1 risk-based capital 14.90% 11.63% 4.00%
Total risk-based capital 15.95% 12.50% 8.00%
</TABLE>
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
RESULTS OF OPERATIONS
Net income for 1993 was $2,808,000 or $140.40 per share compared
to $1,754,000 or $87.70 per share in 1992 and $1,444,000 or $72.20 per
share in 1991. The earnings in 1993 included nine months of operations
for the Vega branch, earnings of which totalled $106,000. The earnings
in 1991 included income from the Amarillo branch for approximately 7.5
months.
The increase in net income from 1992 to 1993 was $1,054,000.
Primary sources of this increase were an increase in net interest income
due to an increase in earning assets, a $552,000 negative provision for
loan losses, and an increase of $61,000 in gains on sales of investment
securities. The remaining increase resulted from normal growth and a
decreasing interest rate environment.
The increase in net income from 1991 to 1992 was $311,000. The
primary sources of this increase were the earning asset growth and
increased interest rate spread, which was partially offset by the
inclusion of a year of expenses for the Amarillo branch in 1992.
117
<PAGE> 127
<TABLE>
The following tables compare net income as a percent of average
assets and average equity for the last three years:
<CAPTION>
RETURN ON RETURN ON
AVERAGE ASSETS AVERAGE EQUITY
---------------------- -----------------------
DECEMBER 31, DECEMBER 31,
1993 1992 1991 1993 1992 1991
---------------------- -----------------------
<S> <C> <C> <C> <C> <C> <C>
Net income 1.97% 1.54% 1.37% 24.70% 18.20% 17.45%
</TABLE>
During the years ended December 31, 1993, 1992 and 1991,
respectively, the dividend payout ratios (dividends declared divided by
net income) were 20.48%, 25.66%, and 38.12%.
Following are analyses and comments regarding net interest income,
noninterest expense, other expenses and income taxes for the last three
years. These comparisons provide additional details of the increases
in net income and include a discussion of the changes between these
periods.
NET INTEREST INCOME
Net interest income is the principal source of Citizens Bank's net
income and represents the difference between interest income and
interest expense. The following schedule provides a summary concerning
net interest income, average balances and the related interest
rates/yields for the past three years. Nonaccruing loans are included
in the interest-earning assets; interest income on such loans is
recorded when received.
Interest earning assets include tax exempt investments and the
related income is presented on a tax-equivalent basis assuming a tax
rate of 34%. The amount of the tax-equivalent adjustment was $461,000,
$334,000 and $332,000 for the years ended December 31, 1993, 1992 and
1991, respectively.
118
<PAGE> 128
<TABLE>
<CAPTION>
DECEMBER 31, 1993
------------------------------------------------------
INTEREST AVERAGE
AVERAGE PERCENT OF INCOME/ YIELD/
BALANCE TOTAL ASSETS EXPENSE RATE
------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Interest-earning assets:
Loans $70,308 49.23% $6,345 9.02%
Taxable securities 35,614 24.94 2,074 5.82
Nontaxable securities 17,935 12.56 1,356 7.56
FHLB stock 1,601 1.12 56 3.50
Interest-bearing deposits with
other banks 1,125 0.79 86 7.64
Federal funds sold 5,370 3.76 151 2.81
----------------------------------------------------
Total interest-earning assets $131,953 92.40% $10,068 7.63%
----------------------------------------------------
Noninterest-bearing assets:
Cash and due from banks $7,239 5.07%
Premises and equipment 1,967 1.38
Other assets 3,006 2.11
Allowance for loan losses (1,365) (0.96)
-----------------------
Total assets $142,800 100.00%
=======================
Interest-bearing liabilities:
NOW accounts $22,939 16.07% $ 577 2.52%
Savings accounts 5,302 3.71 155 2.92
Money market accounts 15,340 10.74 421 2.74
Time deposits and individual
retirement accounts 44,830 31.40 1,477 3.29
Short-term borrowings 14,656 10.26 450 3.07
Notes payable 76 0.05 4 5.26
----------------------------------------------------
Total interest-bearing
liabilities $103,143 72.23% $3,084 2.99%
----------------------------------------------------
Noninterest-bearing liabilities:
Demand deposits $27,506 19.26%
Other liabilities 784 0.55
-----------------------
Total liabilities 131,433 92.04
Stockholders' equity 11,367 7.96
-----------------------
Total liabilities and stock-
holders' equity $142,800 100.00%
=======================
Net interest income $6,984
=====
Interest rate spread 4.64%
====
Net interest margin 5.29%
====
</TABLE>
119
<PAGE> 129
<TABLE>
<CAPTION>
DECEMBER 31, 1992
------------------------------------------------------
INTEREST AVERAGE
AVERAGE PERCENT OF INCOME/ YIELD/
BALANCE TOTAL ASSETS EXPENSE RATE
------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Interest-earning assets:
Loans $53,702 47.16% $4,997 9.31%
Taxable securities 32,234 28.30 2,349 7.29
Nontaxable securities 11,577 10.17 982 8.48
FHLB stock 26 0.02 1 3.85
Interest-bearing deposits with
other banks 3,129 2.75 239 7.64
Federal funds sold 4,720 4.14 177 3.75
----------------------------------------------------
Total interest-earning assets $105,388 92.54% $8,745 8.30%
----------------------------------------------------
Noninterest-bearing assets:
Cash and due from banks $ 6,788 5.96%
Premises and equipment 984 0.87
Other assets 2,168 1.90
Allowance for loan losses (1,443) (1.27)
-----------------------
Total assets $ 113,885 100.00%
=======================
Interest-bearing liabilities:
NOW accounts $18,159 15.95% $ 657 3.62%
Savings accounts 2,975 2.61 99 3.33
Money market accounts 14,958 13.13 427 2.85
Time deposits and individual
retirement accounts 42,658 37.46 1,778 4.17
Short-term borrowings 5,880 5.16 181 3.08
Notes payable --- --- --- ---
-------------------------------------------------
Total interest-bearing
liabilities $ 84,630 74.31% $3,142 3.71%
----------------------------------------------------
Noninterest-bearing liabilities:
Demand deposits $18,968 16.66%
Other liabilities 651 0.57
-----------------------
Total liabilities 104,249 91.54
Stockholders' equity 9,636 8.46
-----------------------
Total liabilities and stock-
holders' equity $113,885 100.00%
=======================
Net interest income $5,603
=====
Interest rate spread 4.59%
====
Net interest margin 5.32%
====
</TABLE>
120
<PAGE> 130
<TABLE>
<CAPTION>
DECEMBER 31, 1991
------------------------------------------------------
INTEREST AVERAGE
AVERAGE PERCENT OF INCOME/ YIELD/
BALANCE TOTAL ASSETS EXPENSE RATE
------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Interest-earning assets:
Loans $42,213 40.19% $4,786 11.34%
Taxable securities 30,071 28.63 2,689 8.94
Nontaxable securities 10,342 9.84 977 9.45
FHLB stock 0 0.00 0 0.00
Interest-bearing deposits with
other banks 7,156 6.81 572 7.99
Federal funds sold 7,944 7.56 479 6.03
----------------------------------------------------
Total interest-earning assets $ 97,726 93.03% $9,503 9.72%
----------------------------------------------------
Noninterest-bearing assets:
Cash and due from banks $ 5,541 5.27%
Premises and equipment 868 0.83
Other assets 2,265 2.16
Allowance for loan losses (1,356) (1.29)
-----------------------
Total assets $105,044 100.00%
=======================
Interest-bearing liabilities:
NOW accounts $15,762 15.01% $ 922 5.85%
Savings accounts 2,100 2.00 111 5.29
Money market accounts 11,736 11.17 484 4.12
Time deposits and individual
retirement accounts 45,019 42.86 2,985 6.63
Short-term borrowings 6,843 6.51 387 5.66
Notes payable --- --- --- ---
-------------------------------------------------
Total interest-bearing
liabilities $ 81,460 77.55% $4,889 6.00%
----------------------------------------------------
Noninterest-bearing liabilities:
Demand deposits $14,586 13.89%
Other liabilities 728 0.69
-----------------------
Total liabilities 96,774 92.13
Stockholders' equity 8,270 7.87
-----------------------
Total liabilities and stock-
holders' equity $105,044 100.00%
=======================
Net interest income $4,614
=====
Interest rate spread 3.72%
====
Net interest margin 4.72%
====
</TABLE>
121
<PAGE> 131
<TABLE>
In summary, the above tables indicate the following trends:
<CAPTION>
YEARS ENDED DECEMBER 31,
--------------------------------------
1993 1992 1991
--------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C>
Average earning assets $131,953 $105,388 $97,726
Increase from prior year 26,565 7,662
Average interest-bearing liabilities 103,143 84,630 81,460
Increase from prior year 18,513 3,170
Fully taxable equivalent net interest income 6,984 5,603 4,614
Increase from prior year 1,381 989
Net interest margin (net interest income
divided by average earning assets) 5.29% 5.32% 4.72%
</TABLE>
The increases in average earning assets and interest-bearing
liabilities were mainly a result of branch purchases and an improving
economy. The improvement in net interest margin in 1992 illustrates the
benefits of a declining interest rate environment nationally and in
Citizens Bank's primary market.
Net interest income is affected by the volume and rate of both
interest-earning assets and interest-bearing liabilities. The following
table depicts the dollar effect and rate changes for the different
categories of interest-earning assets and interest-bearing liabilities
and the resultant change in interest income and interest expense.
Nonperforming loans are included with loans in the table.
122
<PAGE> 132
<TABLE>
<CAPTION>
1993 COMPARED TO 1992 COMPARED TO
1992 INCREASE 1991 INCREASE
(DECREASE) DUE TO (DECREASE) DUE TO
------------------------------- --------------------------------
Volume Rate(1) Net Volume Rate(1) Net
------------------------------- --------------------------------
(In Thousands)
<S> <C> <C> <C> <C> <C> <C>
Interest earned on:
Loans $1,545 $(197) $1,348 $1,303 $(1,092) $ 211
Taxable securities 246 (521) (275) 193 (533) (340)
Nontaxable securities 539 (165) 374 117 (112) 5
Federal Home Loan
Bank stock 61 (6) 55 0 1 1
Interest-bearing deposits
with other banks (153) 0 (153) (322) (11) (333)
Federal funds sold 24 (50) (26) (194) (108) (302)
------------------------------- --------------------------------
Total interest earning assets 2,262 (939) 1,323 1,097 (1,855) (758)
------------------------------- --------------------------------
Interest earned on:
NOW accounts 173 (253) (80) 140 (405) (265)
Savings accounts 77 (21) 56 46 (58) (12)
Money market deposits 11 (17) (6) 133 (190) (57)
Time deposits and individual
retirement accounts 91 (392) (301) (157) (1,050) (1,207)
Short-term borrowings 270 (1) 269 (54) (152) (206)
Notes payable 0 4 4 0 0 0
------------------------------- --------------------------------
Total interest-bearing
liabilities 622 (680) (58) 108 (1,855) (1,747)
------------------------------- --------------------------------
Net interest income $1,640 $(259) $1,381 $ 989 $ 0 $ 989
=============================== ================================
<FN>
(1) Changes in interest income and interest expense due to both rate
and volume are included in rate variances
</TABLE>
During 1993, average interest earning assets increased $26,565,000.
This increase in volume accounted for increased interest income of
$2,262,000. Of this total, $1,545,000 can be attributed to increased
loan volume of $16,606,000. Nontaxable securities increased $6,358,000
while taxable securities increased $3,380,000. Federal Home Loan Bank
stock increased by $1,575,000 and the combined Federal funds sold and
interest bearing deposits in other banks decreased by $1,354,000. These
increases in the volume of average assets were largely due to the
purchase of the Vega branch in April 1993 and caused interest income to
increase by $2,262,000 while changes in interest rates on the average
volume of interest earning assets reduced interest income $939,000.
The decrease in interest income associated with reduced
123
<PAGE> 133
rates reflects the general decline in the level of rates during 1993.
The net effect of the volume and rate changes associated with interest
earning assets increased interest income $1,323,000.
Average interest-bearing liabilities increased $18,513,000 during
1993. Of this increase, $8,776,000 represents increased borrowings from
the Federal Home Loan Bank advances program. The remaining increase is
a general increase in deposits caused by the purchase of the Vega
branch. These changes in the volume of deposits caused a $352,000
increase in interest expense while the increase in FHLB and other
borrowings increased interest expense by $270,000. The decreasing
interest rate environment caused a decrease in interest expense of
$680,000, creating a net decrease in interest expense of $58,000 in
1993.
The net effect of changes in rate and volume on interest earning
assets and interest-bearing liabilities in 1993 increased net interest
income by $1,381,000.
During 1992, average interest earning assets increased $7,662,000
and average interest-bearing liabilities increased $3,170,000 resulting
in a net increase of $989,000 in net interest income. The most
significant changes in average assets were an increase in loans of
$11,489,000, which was largely offset by a decrease in combined Federal
funds sold and interest-bearing deposits with other banks of $7,251,000.
Taxable and nontaxable securities increased $3,398,000. These changes
in the mix of average earning assets and the overall increase in
balances resulted in $1,097,000 additional interest income; however,
reduced yields in all categories, as experienced in the industry,
decreased interest income $1,855,000 for a net overall decrease of
$758,000.
Average interest-bearing deposits increased $4,133,000 while
borrowings decreased $963,000. In general, deposits moved from longer
term time deposits to shorter term, less expensive, demand accounts.
In total, volume changes in average interest-bearing liabilities caused
a net increase in expense of $108,000. Consistent with assets, the
general and significant decline in interest rates during 1992 on average
liabilities resulted in a very favorable $1,855,000 decrease in interest
expense, creating a net decrease in interest expense of $1,747,000 in
1992.
The major influence on net interest income was the growth in the
earning assets during both 1993 and 1992. The increase in interest
income of $1,323,000 or 15% in 1993 was primarily due to growth in the
loan portfolio. The interest expense remained relatively stable as
interest rate decreases offset the growth in deposits and borrowings
used to fund the asset growth. The decrease in interest expense of
$1,747,000 or 36% in 1992 more than offset the decrease in interest
income of $758,000 or 8%.
PROVISION FOR LOAN LOSSES AND ALLOWANCE FOR LOAN LOSSES
The provision for loan losses provides an allowance (the allowance
for loan losses) against which loan losses are charged as those losses
become evident. Management evaluates the appropriate level of the
allowance for loan losses on a monthly basis. The analyses take into
consideration the results of an ongoing loan review process, the purpose
of which is to determine the level of credit risk within the portfolio
and to ensure proper adherence to underwriting and documentation
standards. A specific portion of the allowance is allocated to those
loans which appear to represent a more than normal exposure to risk.
In addition, estimates are made for potential losses on loans not
specifically reviewed, based on historical loan loss experience and
other factors and trends.
No provision for loan losses was required for 1991 or 1992, and a
negative provision of $522,000 was recorded in 1993 based on
management's evaluation of the adequacy of the allowance for loan
losses. Factors that influenced management's determination that a
negative provision for loan losses was appropriate
124
<PAGE> 134
included (i) an evaluation of each nonperforming, classified and potential
problem loan to ascertain an estimate of loss exposure based upon
upon circumstances then known to management, (ii) current economic
conditions and outlook, and (iii) an overall review of the loan
portfolio in light of past loan loss experience. Net chargeoffs (loan
losses charged against the allowance for loan losses less recoveries
of prior chargeoffs) for 1991 and 1992 were $67,000 and $91,000,
respectively. Net recoveries of $82,000 were realized for 1993.
Based on Citizens Bank's review of remaining collateral and
financial condition of identified loans with characteristically more
than a normal degree of risk, historical loan loss percentages and
economic conditions, management believes the allowance for loan losses
at December 31, 1993 is adequate to cover future possible losses.
Following are tables setting forth the activity for loan losses and
certain ratios to nonperforming loans and total loans for 1993, 1992 and
1991.
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------
1993 1992 1991
------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C>
Balance at beginning of period $1,479 $1,388 $1,321
Loans charged off:
Agricultural - - -
Commercial and industrial 98 10 22
Residential real estate-mortgage - - -
Consumer 20 15 9
------------------------------------------
Total chargeoffs 118 25 31
------------------------------------------
Recoveries:
Agricultural 25 84 49
Commercial and industrial 5 7 27
Residential real estate-mortgage - 10 17
Consumer 6 15 5
------------------------------------------
Total recoveries 36 116 98
------------------------------------------
Net loans recovered (charged off) (82) 91 67
Negative provision for loan losses (522) - -
------------------------------------------
Balance at end of period $ 875 $1,479 $1,388
==========================================
Net loan recoveries (chargeoffs)
to average loans (.12%) .17% .16%
</TABLE>
125
<PAGE> 135
<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------
1993 1992 1991
------------------------------------------
<S> <C> <C> <C>
Allowance to total loans 1.09% 2.43% 2.56%
Allowance to nonperforming loans 470% 49,300% 23,133%
</TABLE>
The allowance for loan losses is not allocated to specific
categories of loans. However, based on Citizens Bank's review of
remaining collateral and/or financial condition of identified loans with
characteristically more than a normal degree of risk, historical loan
loss percentages, and economic conditions, management believes the
allowance for loan losses at December 31, 1993 is adequate to cover
losses inherent in the portfolio.
Nonperforming assets are defined as loans delinquent 90 or more
days, nonaccrual loans, restructured loans, and foreclosed assets. Such
assets do not necessarily represent future losses to Citizens Bank since
underlying collateral can be sold and the financial condition of the
borrowers may improve. The following table sets forth the detail of
nonperforming loans. Citizens Bank had no restructured loans or
foreclosed assets at any of the dates listed herein.
NONPERFORMING LOANS
<TABLE>
<CAPTION>
DECEMBER 31,
---------------------------------
1993 1992 1991
---------------------------------
(In Thousands)
<S> <C> <C> <C>
Nonaccrual loans $185 $ 1 $ 6
Loans past due 90 days or more 1 2 -
---------------------------------
Total nonperforming loans $186 $ 3 $ 6
=================================
</TABLE>
The nonaccrual loans at December 31, 1993 consisted of loans to two
borrowers. Of this amount, $135,000 was received in 1994 when the
borrower sold the collateral on one loan. Additionally, a partial
recovery was received on the previously charged-off portion of this
loan. The remaining nonaccrual loan at December 31, 1993 is expected
to result in an additional chargeoff of approximately $20,000, although
the actual chargeoff is pending the receipt of a settlement from a third
party.
At December 31, 1993, 1992 and 1991, there were no significant
commitments to lend additional funds to borrowers whose loans were
considered nonperforming.
Citizens Bank's policy is to discontinue accruing interest on loans
when principal or interest is due and remains unpaid for 90 days or
more, unless the loan is well secured and in the process of collection.
Citizens Bank would have recognized additional interest income of
approximately $17,000, $1,000 and $3,000 for 1993, 1992 and 1991,
respectively, if contractual interest on these loans had been recognized.
126
<PAGE> 136
The amount of interest actually collected and included in
income related to these loans was $9,000 in 1993 and $1,000 in 1991.
No interest payments were received on nonperforming loans in 1992.
The loan portfolio does not include any loans to foreign countries
or highly leveraged transaction loans. Approximately 49% of the loans
at Citizens Bank on December 31, 1993 were for agricultural purposes.
Commercial loans to individuals and businesses in the local lending
areas of the four locations represented 34% of the loans. The remaining
17% consists largely of residential real estate lending. Senior
management closely monitors concentrations to individual customers and
actively participates within their lending areas. Citizens Bank's
lending policies require security for loans including liens on
residential mortgage loans and certain of the other loans secured by
real estate. In addition, policies and procedures are in place to
assess the creditworthiness of borrowers for all loans and commitments.
Borrowers' abilities to honor their loan contracts can be largely
dependent upon weather conditions and economic conditions within their
market areas and on a national level.
Management attributes the low level of nonperforming assets to a
relatively stable economy in its primary market, strong efforts in the
credit review of potential borrowers, and close monitoring of potential
problem loans.
<TABLE>
NONINTEREST INCOME
The balance of earnings of a banking institution are typically
generated through noninterest income from fees and service charges. The
following tables outline the components of this income source for the
years ended December 31, 1993, 1992 and 1991:
<CAPTION>
YEAR ENDED CHANGE CHANGE
DECEMBER 31, 1993/1992 1992/1991
----------------------------------------------------------------------
1993 1992 1991 AMOUNT PERCENT AMOUNT PERCENT
----------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Service charges $532 $467 $423 $ 65 13.92% $44 10.40%
Other operating
income 101 87 53 14 16.09 34 64.15
----------------------------------------------------------------------
Subtotal 633 554 476 79 14.26% 78 16.39%
Securities gains 85 24 16 61 254.17 8 50.00
----------------------------------------------------------------------
Total noninterest
income $718 $578 $492 $140 24.22% $86 17.48%
======================================================================
</TABLE>
As noted above, noninterest income increased each year due to
growth in all major categories. The growth in service charges is due
to the growth in deposit accounts, which provide a majority of this
income. The growth in other operating income is primarily due to the
increased mortgage banking activities in 1992 and 1993 due to the lower
interest rate environment.
127
<PAGE> 137
Net gains on sales of securities increased each year due to
increased market value differences as interest rates declined. During
the last half of 1993, Citizens Bank sold mortgage-backed securities to
fund the repayment of FHLB advances.
OTHER EXPENSES
<TABLE>
<CAPTION>
YEAR ENDED CHANGE CHANGE
DECEMBER 31, 1993/1992 1992/1991
----------------------------------------------------------------------
1993 1992 1991 AMOUNT PERCENT AMOUNT PERCENT
----------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Compensation and
employee benefits $2,243 $1,919 $1,466 $324 16.88% $453 30.90%
Occupancy expense 505 458 439 47 10.26 19 4.33
FDIC assessment 229 221 177 8 3.62 44 24.86%
Other expenses 1,194 769 834 425 55.27 (65) (7.79)
----------------------------------------------------------------------
Total noninterest
expenses $4,171 $3,367 $2,916 $804 23.87% $451 15.47%
======================================================================
</TABLE>
Noninterest expense increased in 1993 due to the acquisition of the
Vega branch in April. The acquisition increased compensation expense
$192,000, occupancy expense $36,000, FDIC assessment $8,000, and other
expense $153,000 for a total increase of $389,000 or 11.55% of total
1992 noninterest expenses.
The remaining increase in compensation expense during 1993 is due
to normal salary and benefits increases. The increase from 1991 to 1992
is partly due to only including approximately 7.5 months of Amarillo's
expenses in 1991.
The increases in the FDIC assessment relate to the growth in
deposits from the above mentioned branch acquisitions.
128
<PAGE> 138
Other expenses decreased slightly from 1991 and 1992 and increased
by $372,000 between 1992 and 1993. The increase in 1993 is primarily
due to the following increases in specific accounts at Citizens Bank,
which amount to $309,000 of the increase:
<TABLE>
<S> <C>
Attorney fees $31,000
Data processing fees 31,000
Telephone 44,000
Amortization of core deposit premium 45,000
External audit fees 47,000
Postage and printing costs 51,000
Miscellaneous losses and expenses 60,000
</TABLE>
Many of these increases resulted from the purchase of the Vega
branch. Attorney fees paid in 1992 were negligible while fees were
incurred in 1993 to complete the Vega purchase. No external examination
or audit was performed in 1992. The miscellaneous losses resulted
primarily from unlocated errors in the mortgage banking department and
stop payment checks. These errors resulted from inadequate controls
over loans in the "pipeline" between origination and sale of the loan.
The stop payment losses were due to checks that were paid on the date
the stop payment was accepted.
INCOME TAXES
Dalhart files a consolidated Federal income tax return including
Dalhart-Delaware and Citizens Bank. Citizens Bank pays Federal income
tax expense to Dalhart based on the taxable income of Citizens Bank on
a stand-alone basis. Deferred income taxes provided on certain
transactions which are reported for financial reporting purposes in
different periods than for income tax purposes.
A reconciliation of expected income tax expense for Citizens Bank,
computed by applying the effective Federal statutory rate of 34% to
income before the provision for income taxes is as follows:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------
1993 1992 1991
----------------------------------------------
(In Thousands)
<S> <C> <C> <C>
Federal income taxes at statutory rate $1,221 $843 $632
Less effect of tax exempt income (273) (204) (189)
Other, net (16) 87 (29)
----------------------------------------------
Total provision for income taxes $ 932 $726 $414
==============================================
</TABLE>
Citizens Bank adopted Statement of Financial Accounting Standard
No. 109, "Accounting for Income Taxes," during 1993. The effect was to
increase reported results of operations by $148,000.
129
<PAGE> 139
FINANCIAL CONDITION
INVESTMENTS
Citizens Bank's holdings of short-term investments and scheduled
maturities of investment securities serve as a source of liquidity to
meet depositor and borrower fund requirements, in addition to being a
significant element of total interest income. Federal funds sold had
outstanding balances at December 31, 1993 of $4,025,000 and $4,200,000
at December 31, 1992. Investment securities at December 31, 1993 of
$49,680,000 increased $1,630,000 as compared to December 31, 1992 of
$51,310,000. This increase in the balance of investment securities is
due primarily to increased nontaxable securities.
SECURITIES PORTFOLIO
The following table presents the composition of investments at each
year-end:
<TABLE>
<CAPTION>
1993 1992 1991
---------------------------------------------------------------------------------
PERCENT PERCENT PERCENT
OF TOTAL OF TOTAL OF TOTAL
AMOUNT SECURITIES AMOUNT SECURITIES AMOUNT SECURITIES
---------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
U.S. Treasuries
and agencies $ 2,357 4.74% $ 4,256 8.29% $ 4,761 11.19%
Obligations of
states and
political
subdivisions 18,822 37.89 13,433 26.17 10,177 23.92
Mortgage-backed
securities 26,220 52.78 32,401 63.14 27,508 64.65
Corporate bonds
and other 2,281 4.59 1,230 2.40 102 .24
---------------------------------------------------------------------------------
Total securities $49,680 100.00% $51,320 100.00% $42,548 100.00%
=================================================================================
</TABLE>
The fair value of total investment securities was $50,501,000,
$51,740,000 and $42,721,000 at December 31, 1993, 1992 and 1991,
respectively. Included in corporate bonds and other is FHLB stock with
a book value which approximates fair value of $2,281,000 and $877,000
at December 31, 1993 and 1992, respectively.
130
<PAGE> 140
On January 1, 1994, Citizens Bank adopted SFAS 115, which is
discussed in the analysis of the June 30, 1994 investments portfolio.
The FHLB stock is not included in the SFAS 115 classifications due to
the lack of a published market value and certain restrictions that limit
the marketability of this investment. This stock is included in the
securities totals at cost and labeled as "All other equity securities"
for reporting on the Call Report beginning in March 1994.
INVESTMENT SECURITIES-MATURITIES AND YIELDS
The following table shows the components and yields for the various
forms of investment securities as of December 31, 1993:
<TABLE>
<CAPTION>
AFTER ONE AFTER FIVE
IN ONE THROUGH THROUGH
YEAR OR LESS FIVE YEARS TEN YEARS AFTER TEN YEARS
-------------------------------------------------------------------------------------------------------------
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
-------------------------------------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
U.S. Treasuries
and agencies $1,503 6.93% $ 854 8.29% $ - -% $ - -%
Obligations of
states and
political
subdivisions(1) 3,145 7.87 13,112 7.21 2,427 8.07 137 9.52
Mortgage-backed
securities 10,123 6.51 12,569 6.11 2,088 4.99 1,440 5.11
-------------------------------------------------------------------------------------------------------------
Total investment
securities $14,771 6.84% $26,535 6.72% $4,515 6.65% $1,577 5.50%
=============================================================================================================
<FN>
(1) Yield presented on a tax-equivalent basis assuming a tax rate of
34%.
</TABLE>
Certain mortgage-backed securities were sold during 1993 due to the
accelerated prepayments of principal caused by decreasing interest rates
and to repay FHLB advances.
As discussed above, FHLB stock of $2,281,000 at December 31, 1993
is not included in this table as it represents an equity security with
no stated maturity.
131
<PAGE> 141
LOANS
The loan portfolio constitutes the major earning asset of most
banks and typically offers the best alternative for obtaining the
maximum interest spread above the cost of funds. The overall economic
strength of any bank generally parallels the quality and yield of its
loan portfolio. Citizens Bank's total loans outstanding on December 31,
1993, 1992 and 1991, are presented in the following table:
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------------------------------------------------------
1993 1992 1991
----------------------------------------------------------------------------------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
----------------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
Agricultural $33,007 40.94% $22,121 36.42% $26,119 48.11%
Commercial and industrial 19,123 23.72 14,074 23.17 13,213 24.34
Real estate:
Agricultural 6,288 7.80 5,684 9.36 5,652 10.41
Commercial 8,370 10.38 7,468 12.30 4,789 8.82
Residential 10,106 12.54 9,313 15.33 2,093 3.86
Construction and others 1,890 2.34 215 .35 539 .99
Consumer, net of unearned
income 1,733 2.15 1,794 2.95 1,629 3.00
Other 104 .13 72 .12 256 .47
----------------------------------------------------------------------------------------
Total $80,621 100.00% $60,741 100.00% $54,290 100.00%
========================================================================================
</TABLE>
The loan portfolio increased $19,880,000 or 32.7% from December 31,
1992 to December 31, 1993, primarily in agricultural and commercial
loans. An increase of $6,451,000 or 11.9% was experienced from 1991 to
1992, primarily in real estate loans, due to a lower interest rate
environment increasing mortgage banking activities at the Amarillo
branch.
The following tables set forth the maturity composition and
interest sensitivity of total loans at December 31, 1993.
MATURITY OF LOANS
<TABLE>
<CAPTION>
DECEMBER 31, 1993
-----------------------------------------------
PERCENT
LOANS OF TOTAL
-----------------------------------------------
(Dollars in Thousands)
<S> <C> <C>
In one year or less $76,541 94.94%
After one through five years 4,063
After five years 17 5.04
.02
===============================================
Total loans $80,621 100.00%
</TABLE>
132
<PAGE> 142
MATURITY CLASSES
<TABLE>
<CAPTION>
INTEREST SENSITIVITY
---------------------------------------------------
FIXED VARIABLE
RATE RATE
---------------------------------------------------
(In Thousands)
<S> <C> <C>
In one year or less $17,856 $58,685
After one through five years 4,063 -
After five years 17 -
----------------------------------------------------
Total loans $21,936 $58,685
====================================================
</TABLE>
DEPOSITS
The deposit base provides the major funding source for interest
earning assets of most banks. Citizens Bank's deposits have increased
steadily during the period from December 31, 1992 to December 31, 1993.
Citizens Bank's total average deposits were $115,917,000 in 1993, an
increase of $18,199,000 over 1992. Generally, demand, savings, and
certificates of deposit less than $100,000 are recognized as the core
base of deposits while certificates of deposit in excess of $100,000 and
public funds are more interest rate sensitive and, thus, are not
considered part of the core deposit base. Because of these factors,
management views the growth in deposits other than certificates of
deposit of $100,000 or more as more stable growth. During 1993,
Citizens Bank's customers preferred NOW Accounts and money market
accounts as these types of deposits adjusted more quickly to rate
changes than certificates of deposit.
133
<PAGE> 143
The following table indicates the mix and levels of deposits at
December 31, 1993 compared to December 31, 1992.
<TABLE>
<CAPTION>
DECEMBER 31, 1993 DECEMBER 31, 1992 CHANGE
-------------------------------------------------------------------------------------------------------
COST OF COST OF
AMOUNT FUNDS PERCENT AMOUNT FUNDS PERCENT AMOUNT PERCENT
-------------------------------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Demand and other
noninterest bearing $36,016 n/a% 28.07% $26,465 n/a% 25.77% $9,551 36.09%
NOW accounts 24,379 2.50 19.00 19,993 2.85 19.46 4,386 21.94
Savings accounts 6,306 3.00 4.92 4,182 3.00 4.07 2,124 50.79
Money market deposit
accounts 14,382 2.75 11.21 12,218 3.10 11.89 2,164 17.71
Certificates of deposit
including retirement
accounts(1):
Less than $100,000 34,308 3.26 26.74 29,817 3.43 29.03 4,491 15.06
$100,000 or more 12,904 3.23 10.06 10,043 3.43 9.78 2,861 28.49
-------------------------------------------------------------------------------------------------------
Total Deposits $128,295 2.13% 100.00% $102,718 2.38% 100.00% $25,557 24.88%
=======================================================================================================
<FN>
(1) Interest rate information is not available for a breakdown of cost
of funds for certificates of deposits less than $100,000 and
$100,000 or more on December 31, 1992. Therefore, a combined rate
is being used.
</TABLE>
AMOUNT AND MATURITIES OF TIME DEPOSITS OF $100,000 OR MORE
The following table sets forth the amount and maturities of time
deposits of $100,000 or more at December 31, 1993:
<TABLE>
<CAPTION>
DECEMBER 31, PERCENT
1993 OF TOTAL
------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C>
Three months or less $8,693 67.37%
Over three through twelve
months 4,211 32.63
Over twelve months - -
------------------------------------------------------
Total $12,904 100.00%
======================================================
</TABLE>
134
<PAGE> 144
SHORT-TERM BORROWINGS
Amounts and interest rates related to short-term borrowings at June
30, 1994 and December 31, 1993, 1992, and 1991 were as follows:
<TABLE>
<CAPTION>
December 31,
1993 1992 1991
-------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C>
Federal funds purchased:
Outstanding balance at year-end n/a% $7,250 $7,175
Average interest rate at year-end 3.25% 4.19%
Average outstanding during the year $ 5,107 $5,584 $6,083
Weighted average interest rate 3.02% 3.43% 5.39%
Highest outstanding balance at any month-end $10,275 $8,100 $9,625
Federal Home Loan Bank advances:
Outstanding balance at year-end $ 6,000 $7,000 $ -
Average interest rate at year-end 3.10% 3.40% n/a%
Average outstanding during the year $ 9,077 $ 98 $ -
Weighted average interest rate 3.08% 3.40% n/a%
Highest outstanding balance at any month-end $15,000 $7,000 $ -
</TABLE>
LIQUIDITY AND RATE SENSITIVITY
Liquidity is the measure of Citizens Bank's ability to meet its
customers' present and future deposit withdrawals or increased loan
demand without unduly penalizing earnings. Interest rate sensitivity
involves the relationship between rate sensitive assets and liabilities
and is an indication of the probable effects of interest rate
fluctuations on Citizens Bank's net interest income. Citizens Bank
manages both liquidity and interest sensitivity through a GAP analysis
report prepared monthly.
Liquidity is provided for Citizens Bank by projecting credit demand
and other financial needs and then maintaining sufficient cash and
assets readily convertible into cash to meet these projected
requirements. Citizens Bank provided for its liquidity needs through
core deposits, maturing loans, and scheduled maturities of investments
in securities, and by maintaining adequate balances in Federal funds
sold. At December 31, 1993 cash and Federal funds sold amounted to
$14,151,000 or 9.75% of total assets. This is an increase of $5,612,000
from December 31, 1992 when cash and Federal funds sold totaled
$8,539,000 or 6.87% of total assets. This level of cash and cash
equivalents is considered to be adequate in view of projected liquidity
needs.
Interest rate-sensitive assets and liabilities are those with
yields or rates subject to change within a future time period due to
maturity or changes in market rates. An ongoing objective of Citizens
Bank's asset/liability management program is to match rate-adjustable
assets and liabilities at similar maturity horizons, so that changes in
interest rates will not result in wide fluctuations in net interest
income. The rate sensitivity position is managed by matching funds
acquired having a specific maturity with loans, securities, or other
liquid assets with similar maturities.
At December 31, 1993, $76,541,000 or 94.94%, of the loan portfolio
repriced in one year or less. In addition, investment securities
maturing in one year or less of $14,771,000 and Federal funds sold of
$4,025,000 bring total rate-sensitive assets maturing or repricing
within one year to $95,337,000 or 72.25% of total interest-earning
assets. When matched with interest-bearing demand deposits, savings
deposits, and time deposits of
135
<PAGE> 145
$100,000 or more maturing within one year of $57,971,000, this represented
a position which management believed appropriate given the increasing
interest rate environment expected at December 31, 1993.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF
DALHART
The following table sets forth, as of June 30, 1994, the names and
addresses of each beneficial owner of more than five percent (5%) of
Dalhart Common known to the Board of Directors of Dalhart, showing the
amount and nature of such beneficial ownership and the names of each
director and executive officer of Dalhart who owns shares of Dalhart
Common, the number of shares of Dalhart Common owned beneficially by
each director and executive officer and the number of shares of Dalhart
Common owned beneficially by all directors and executive officers as a
group. None of the shareholders listed herein would own, on a pro forma
basis, giving effect to the Acquisition, more than one percent (1%) of
the issued and outstanding shares of Boatmen's Common.
<TABLE>
<CAPTION>
SHARES OF DALHART COMMON
NAME AND ADDRESS(1) BENEFICIALLY OWNED PERCENT OF CLASS
- ------------------- ------------------ ----------------
<S> <C> <C>
E.C. Caddell(2) 1,270 1.2%
Louise Conley(3) 10,119 10.1%
1201 Southwest 9th
Perryton, Texas 79070
Joan Graham(4) 9,429 9.4%
c/o Mike Koehler
P.O. Box 1151
Dalhart, Texas 79022
Hugh L. Gordon(5) 700 *
Doyle Hanbury(6) 1,520 1.5%
Catherine D. Koehler(7) 18,722 18.7%
P.O. Box 743
Dalhart, Texas 79022
James R. Koehler(8) 9,429 9.4%
c/o Mike Koehler
P.O. Box 1151
Dalhart, Texas 79022
John M. "Mike" Koehler(9) 81,943 81.9%
P.O. Box 1151
Dalhart, Texas 79022
William R. Koehler(10) 6,000 6.0%
c/o Mike Koehler
P.O. Box 1151
Dalhart, Texas 79022
136
<PAGE> 146
<CAPTION>
SHARES OF DALHART COMMON
NAME AND ADDRESS(1) BENEFICIALLY OWNED PERCENT OF CLASS
- ------------------- ------------------ ----------------
Richard Leon Seagraves(11) 650 *
Mary Catherine Schooler(12) 10,229 10.2%
c/o Mike Koehler
P.O. Box 1151
Dalhart, Texas 79022
Directors and Executive Officers 86,083 86.1%
of Dalhart as a Group (5 persons)
<FN>
- --------------------------------------
* Represents less than one percent (1%) of the issued and outstanding
shares of Dalhart Common.
1 Addresses are provided only with respect to each beneficial owner
of more than five percent (5%) of Dalhart Common known to the Board
of Directors of Dalhart.
2 Mr. Caddell serves as a director of Dalhart.
3 Includes 690 shares held by Mrs. Conley individually, 6,000 shares
held by the Louis Trammel Trust, and 3,429 shares by Mrs. Conley
individually but subject to the Koehler Family Voting Agreement,
dated as of December 29, 1988, granting the right to vote such
shares solely to John M. Koehler (the "Voting Trust")
4 Includes 6,000 shares held by the Teresa Joan Koehler Graham Trust
and 3,429 shares by Mrs. Graham individually, but subject to the
Voting Trust.
5 Mr. Gordon serves as a director of Dalhart.
6 Mr. Hanbury serves as Vice President and a director of Dalhart.
7 Includes 12,707 shares held by Mrs. Koehler individually and 6,015
shares held by the Catherine D. Koehler Q-Tip Trust.
8 Includes 6,000 shares held by the James R. Koehler Trust and 3,429
shares held by Mr. Koehler individually but subject to the Voting
Trust.
9 Mr. Koehler serves as the President and a director of Dalhart.
Includes 17,733 shares held by Mr. Koehler individually, 647 shares
held by each of Kelsey Koehler, Kortney Koehler and Justin Koehler,
Mr. Koehler's minor children, pursuant to the Uniform Gifts to
Minors Act, with voting power held by Mr. Koehler. Also includes
6,015 shares held by the Catherine D. Koehler Q-Tip Trust, of which
Mr. Koehler serves as a co-trustee, but has the sole power to vote
such shares. Also includes 6,000 shares held by each of the Louise
Trammel Trust, the Teresa Joan Koehler Graham Trust, the James R.
Koehler Trust, the John M. Koehler Trust, the William R. Koehler
Trust and the Mary Catherine Schooler Trust, each of which
Mr. Koehler serves as a co-trustee, but has the sole power to vote
such shares. Also includes 20,254 shares governed by the Voting
Trust, with voting power under the Voting Trust held solely by
Mr. Koehler.
10 Includes 6,000 shares held by the William R. Koehler Trust.
11 Mr. Seagraves serves as a director of Dalhart.
12 Includes 6,000 shares held by the Mary Catherine Schooler Trust,
3,429 shares held individually subject to the Voting Trust and 800
shares held by Schooler Properties, Ltd., a Texas limited
partnership, subject to the Voting Trust.
</TABLE>
137
<PAGE> 147
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF
CITIZENS BANK
The following table sets forth, as of June 30, 1994, the name and
address of each beneficial owner of more than five percent (5%) of the
outstanding shares of Citizens Bank Common known to the Board of
Directors of Citizens Bank, showing the amount and nature of such
beneficial ownership and the number of shares of Citizens Bank Common
owned beneficially by each director and executive officer of Citizens
Bank and by all directors and officers of Citizens Bank as a group.
None of the shareholders listed herein would own, on a pro forma basis
giving effect to the Acquisition, more than one percent (1%) of the
issued and outstanding shares of Boatmen's Common.
<TABLE>
<CAPTION>
SHARES OF CITIZENS BANK COMMON
NAME AND ADDRESS AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP PERCENT OF CLASS
- ---------------- -----------------------------------------
<S> <C> <C>
Dalhart Bancshares of
Delaware, Inc. 18,643 93.2%
1209 Orange Street
Wilmington, Delaware 19801
John M. Koehler1 300 *
Officers and Directors of 300 *
Citizens Bank as a group
(1 person)
<FN>
- --------------------------------------
* Represents less than 1% of the issued and outstanding shares of
Citizens Bank.
1 Mr. Koehler is the President, CEO and Chairman of the Board of
Citizens Bank.
</TABLE>
138
<PAGE> 148
LEGAL PROCEEDINGS
Citizens Bank is involved in litigation in the normal course of its
business. Of the matters of pending litigation outstanding on the date
hereof involving Dalhart or Citizens Bank, except as described below,
none would have, in the opinion of management, either singularly or in
the aggregate, a material adverse effect upon the financial statements
of Dalhart or Citizens Bank.
In May 1994, Western National Bank, Amarillo, Texas ("Western")
filed suit against Citizens Bank, Curtis Beard (Senior Vice President
of Citizens Bank and a former officer and director of Western), Prestige
Lending Corporation and its President, Robert P. Mulry. Mike Koehler
(President of Dalhart and Citizens Bank) was subsequently added as a
defendant. The Western suit alleges that Mr. Beard breached fiduciary
duties to Western by divulging confidential information regarding
Western's mortgage lending activities to Citizens and that Mr. Beard
interfered with Western's business relations with customers of Western.
Western also alleges that a civil conspiracy existed among all of the
defendants to interfere with Western's business relations with third
parties and to use confidential information obtained by Mr. Beard for
the benefit of Citizens Bank. No dollar figure of damages was alleged
in Western's complaint. Citizens Bank, Mr. Beard and Mr. Koehler intend
to vigorously defend this litigation.
Because this was filed recently, no depositions and very little
discovery has been conducted with respect to this case as of the date
of this Joint Proxy Statement/Prospectus. Consequently, as of the date
of this Joint Proxy Statement/Prospectus, it is impossible to determine
the likelihood of a favorable or unfavorable outcome. Citizens Bank
does carry directors and officers liability insurance, and has placed
its insurance carrier on notice of this claim.
LEGAL OPINION
The legality of the securities offered hereby will be passed upon
by Lewis, Rice & Fingersh. Partners of Lewis, Rice & Fingersh and
attorneys employed by them owned, directly or indirectly, as of
August 19, 1994, 72,279 shares of Boatmen's Common.
EXPERTS
INDEPENDENT AUDITORS FOR BOATMEN'S
The consolidated financial statements of Boatmen's incorporated by
reference in Boatmen's Annual Report (Form 10-K) for the year ended
December 31, 1993 have been audited by Ernst & Young LLP,
independent auditors, as set forth in their report thereon included
therein and incorporated herein by reference. Such consolidated
financial statements are incorporated herein by reference in reliance
upon such report given upon the authority of such firm as experts in
accounting and auditing.
The consolidated income statement and statements of changes in
shareholders' equity and cash flows of First Interstate of Iowa, Inc.
and subsidiaries for the year ended December 31, 1991, incorporated by
reference herein have been incorporated by reference herein in reliance
upon the report of KPMG Peat Marwick LLP, independent certified
public accountants, incorporated by reference herein, and upon the
authority of said firm as experts in accounting and auditing.
The consolidated statements of operations, changes in stockholders'
equity and cash flows of Sunwest Financial Services, Inc. and
subsidiaries for the year ended December 31, 1991, incorporated by
reference herein have been incorporated by reference herein in reliance
upon the report of KPMG Peat Marwick LLP,
139
<PAGE> 149
independent certified public accountants, incorporated by reference herein,
and upon the authority of said firm as experts in accounting and auditing.
The consolidated statements of income, stockholders' equity and
cash flows of First Amarillo Bancorporation, Inc. and subsidiaries for
the year ended December 31, 1991, incorporated by reference herein have
been incorporated herein in reliance upon the report of KPMG Peat
Marwick LLP, independent certified public accountants, incorporated
by reference herein, and upon the authority of said firm as experts in
accounting and auditing.
The consolidated balance sheets of Worthen and subsidiaries as of
December 31, 1993 and 1992 and the related consolidated statements of
earnings, stockholders' equity and cash flows for each of the years in
the three-year period ended December 31, 1993, incorporated by reference
herein have been incorporated by reference herein in reliance upon the
reports of KPMG Peat Marwick LLP and Frost & Company, independent certified
public accountants, incorporated by reference herein, and upon the
authority of said firms as experts in accounting and auditing. The report
of KPMG Peat Marwick LLP refers to a change in the method of accounting
for income taxes in 1993.
INDEPENDENT AUDITORS FOR DALHART AND CITIZENS BANK
The consolidated financial statements of Dalhart at December 31,
1993 and for the year then ended, and the financial statements of
Citizens Bank at December 31, 1993 and for the year then ended,
appearing in this Joint Proxy Statement/Prospectus and Registration
Statement have been audited by GRA, Thompson, White & Co., P.A.,
independent auditors, as set forth in their report thereon appearing
elsewhere herein, and are included in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.
PRESENCE AT SPECIAL MEETING
Representatives of GRA, Thompson, White & Co., P.A. are expected to
be present at the Special Meeting with the opportunity to make a
statement if they desire to do so and to respond to appropriate
questions.
SHAREHOLDER PROPOSALS
Shareholder proposals for the annual meeting of Boatmen's
shareholders to be held in April, 1995 must be received by Boatmen's no
later than November 10, 1994, and must meet the requirements established
by the S.E.C. for shareholder proposals. Shareholder proposals for the
1996 annual meeting of Boatmen's must be received by Boatmen's on a date
to be determined and announced in Boatmen's Proxy Statement for its 1995
annual meeting.
Upon receipt of any such proposal Boatmen's will determine whether
or not to include such proposal in the Proxy Statement and proxies in
accordance with the S.E.C.'s regulations governing the solicitation of
proxies.
---------------
140
<PAGE> 150
<TABLE>
INDEX TO FINANCIAL STATEMENTS OF DALHART
DALHART BANCSHARES, INC. AND SUBSIDIARY:
<CAPTION>
Page
----
<S> <C>
Financial Statements:
---------------------
Report of Independent Auditors. . . . . . . . . . . . . . . . . . . .CF-2
Consolidated Balance Sheets as of June 30, 1994 (Unaudited),
December 31, 1993 and December 31, 1992 (Unaudited). . . . . . .CF-3
Consolidated Statements of Earnings for the Six Months Ended
June 30, 1994 (Unaudited) and 1993 (Unaudited) and for
the Years Ended December 31, 1993, 1992 (Unaudited) and
1991 (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . .CF-5
Consolidated Statements of Stockholders' Equity for the Six Months
Ended June 30, 1994 (Unaudited) and for the Years Ended
December 31, 1993, 1992 (Unaudited) and 1991 (Unaudited) . . . .CF-7
Consolidated Statements of Cash Flows for the Six Months Ended
June 30, 1994 (Unaudited) and 1993 (Unaudited) and
the Years Ended December 31, 1993, 1992 (Unaudited) and
1991 (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . .CF-8
Notes to Consolidated Financial Statements. . . . . . . . . . . . . CF-10
</TABLE>
CF-1
<PAGE> 151
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Dalhart Bancshares, Inc.
We have audited the accompanying consolidated balance sheet of Dalhart
Bancshares, Inc. and Subsidiary, as of December 31, 1993, and the
related consolidated statements of earnings, stockholders' equity, and
cash flows for the year then ended. These consolidated financial
statements are the responsibility of management. Our responsibility is
to express an opinion on these consolidated financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the consolidated financial
position of Dalhart Bancshares, Inc. and Subsidiary at December 31,
1993, and the consolidated results of their operations and their cash
flows for the year then ended, in conformity with generally accepted
accounting principles.
GRA, Thompson, White & Co., P.A.
July 14, 1994
CF-2
<PAGE> 152
<TABLE>
DALHART BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<CAPTION>
JUNE 30, DECEMBER 31,
------------- ----------------------
1994 1993 1992
-------------------------------------
(Unaudited) (Unaudited)
(In Thousands)
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents:
Noninterest bearing deposits
and cash $6,444 $10,127 $8,541
Federal funds sold 2,350 4,025 4,200
-------------------------------------
Total cash and cash equivalents 8,794 14,152 12,741
-------------------------------------
Interest bearing deposits in other
banks 294 390 1,872
Investment securities (estimated
market value $52,453, $48,220
and $50,863, respectively) 52,305 47,399 50,443
Loans, less allowance for loan
losses of $890, $875 and
$1,479, respectively 62,170 79,746 59,262
Premises and equipment, net 2,151 2,275 1,345
Accrued interest receivable 1,723 1,534 1,377
Stock in Federal Home Loan Bank 2,328 2,281 867
Excess of cost over fair value of
assets acquired 2,190 2,269 1,809
Other assets 279 157 182
------------------------------------
Total Assets $132,234 $150,203 $129,898
====================================
CF-3
<PAGE> 153
DALHART BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS (CONTINUED)
<CAPTION>
JUNE 30, DECEMBER 31,
----------------------------------------
1994 1993 1992
----------------------------------------
(Unaudited) (Unaudited)
(In Thousands)
LIABILITIES AND STOCKHOLDERS'
EQUITY
Liabilities
Deposits $115,836 $128,275 $102,718
Federal funds purchased -- -- 7,250
Other borrowings 1,781 7,787 7,829
Accrued interest payable 293 302 264
Other liabilities 226 318 162
----------------------------------------
Total liabilities 118,136 136,682 118,223
----------------------------------------
Commitments
Minority interest 891 855 703
----------------------------------------
Stockholders' equity
Common stock, $10 par value;
200,000 shares authorized;
100,000 shares issued and
outstanding 1,000 1,000 1,000
Capital surplus 1,215 1,215 1,215
Retained earnings 11,295 10,451 8,757
Unrealized net loss in
securities available for sale (303) -- --
----------------------------------------
Total stockholders' equity 13,207 12,666 10,972
----------------------------------------
Total Liabilities and
Stockholders' Equity $132,234 $150,203 $129,898
========================================
The accompanying notes are an integral part
of these consolidated financial statements
</TABLE>
CF-4
<PAGE> 154
<TABLE>
DALHART BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF EARNINGS
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------------------------------------------------------
1994 1993 1993 1992 1991
---------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Interest income:
Loans, including fees $3,182 $2,861 $6,345 $4,997 $4,786
Federal funds sold 89 87 151 177 479
Investment securities 1,294 1,671 3,111 3,237 3,906
---------------------------------------------------------
Total interest income 4,565 4,619 9,607 8,411 9,171
---------------------------------------------------------
Interest expense:
Deposits 1,357 1,277 2,630 2,961 4,502
Federal funds purchased -- 100 145 165 367
Other borrowed funds 36 129 347 28 51
---------------------------------------------------------
Total interest expense 1,393 1,506 3,122 3,154 4,920
---------------------------------------------------------
Net interest income 3,172 3,113 6,485 5,257 4,251
Provision for loan losses -- (400) (522) -- --
---------------------------------------------------------
Net interest income after
provision for loan losses 3,172 3,513 7,007 5,257 4,251
---------------------------------------------------------
Other income:
Service charges 257 252 532 467 423
Gain on sales of
investment securities -- -- 85 24 16
Other operating income 63 37 101 87 53
---------------------------------------------------------
Total other income 320 289 718 578 492
---------------------------------------------------------
Other expenses:
Compensation and
benefits 1,187 1,110 2,243 1,919 1,466
Occupancy expense 318 219 505 458 439
Federal Deposit
Insurance premium 133 107 229 221 177
Other operating expenses 711 659 1,328 919 891
---------------------------------------------------------
Total other expenses $2,349 $2,095 $4,305 $3,517 $2,973
---------------------------------------------------------
CF-5
<PAGE> 155
<CAPTION>
DALHART BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF EARNINGS (CONTINUED)
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
---------------------------------------------------------
1994 1993 1993 1992 1991
---------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In thousands, except per share amounts)
Earnings before income
taxes, minority interest
and cumulative effect of
change in accounting
principle $1,143 $1,707 $3,420 $2,318 $1,770
Income tax expense 235 490 932 726 414
---------------------------------------------------------
Earnings before minority
interest and cumulative
effect of change in
accounting principle 908 1,217 2,488 1,592 1,356
Minority interest (64) (93) (192) (120) (99)
---------------------------------------------------------
Earnings before cumulative
effect of change in
accounting principle 844 1,124 2,296 1,472 1,257
Cumulative effect of change
in accounting for income
taxes -- -- 148 -- --
---------------------------------------------------------
Net Earnings $ 844 $1,124 $2,444 $1,472 $1,257
=========================================================
Earnings per share:
Earnings before cumulative
effect of change in
accounting principle $8.44 $11.24 $22.96 $14.72 $12.57
Cumulative effect of
change in accounting
for income taxes -- -- 1.48 -- --
---------------------------------------------------------
Net Earnings $8.44 $11.24 $24.44 $14.72 $12.57
=========================================================
The accompanying notes are an integral part
of these consolidated financial statements
</TABLE>
CF-6
<PAGE> 156
<TABLE>
DALHART BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
<CAPTION>
UNREALIZED
NET LOSS IN
SECURITIES
AVAILABLE TOTAL
COMMON CAPITAL RETAINED FOR STOCKHOLDERS'
STOCK SURPLUS EARNINGS SALE EQUITY
----------------------------------------------------------------------------------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1990
(unaudited) $1,000 $1,215 $6,353 $ -- $8,568
Net earnings (unaudited) -- -- 1,257 -- 1,257
Dividends - $3.25 per share
(unaudited) -- -- (325) -- (325)
----------------------------------------------------------------------------------
Balance, December 31, 1991
(unaudited) 1,000 1,215 7,285 -- 9,500
Net earnings (unaudited) -- -- 1,472 -- 1,472
----------------------------------------------------------------------------------
Balance, December 31, 1992
(unaudited) 1,000 1,215 8,757 -- 10,972
Net earnings -- -- 2,444 -- 2,444
Dividends - $7.50 per share -- -- (750) -- (750)
----------------------------------------------------------------------------------
Balance, December 31, 1993 1,000 1,215 10,451 -- 12,666
Net earnings (unaudited) -- -- 844 -- 844
Unrealized net loss in
securities available for sale
(unaudited) -- -- -- (303) (303)
----------------------------------------------------------------------------------
Balance, June 30, 1994
(unaudited) $1,000 $1,215 $11,295 $(303) $13,207
==================================================================================
The accompanying notes are an integral part
of these consolidated financial statements
</TABLE>
CF-7
<PAGE> 157
<TABLE>
DALHART BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------
1994 1993 1993 1992 1991
----------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In Thousands)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 844 $ 1,124 $ 2,444 $ 1,472 $ 1,257
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation and amortization 240 134 363 230 267
Provision for loan losses -- (400) (522) -- --
Gain on sale of investment
securities -- -- (85) (24) (16)
Net amortization of
premium and discount on
investment securities 121 159 343 215 55
Change in:
Accrued interest receivable (189) (498) (157) 34 112
Other assets (122) (712) (580) (8) (237)
Accrued interest payable (9) 41 38 (185) (152)
Other liabilities 63 154 156 52 74
Minority interest 36 93 152 89 61
----------------------------------------------------------------------
Net cash provided by
operating activities 984 95 2,152 1,875 1,421
----------------------------------------------------------------------
INVESTING ACTIVITIES
Purchases of investment securities (11,079) (16,517) (18,725) (23,966) (23,955)
Proceeds from sales and
maturities of investment securities 5,641 3,332 21,579 18,463 16,344
Net decrease (increase) in loans 17,576 (5,156) (19,962) (6,359) (9,846)
Acquisitions of premises and
equipment (36) (791) (1,148) (604) (153)
----------------------------------------------------------------------
Net cash provided by (used in)
investing activities 12,102 (19,132) (18,256) (12,466) (17,610)
----------------------------------------------------------------------
CF-8
<PAGE> 158
DALHART BANCSHARES, INC.
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
----------------------------------------------------------------------
1994 1993 1993 1992 1991
----------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In Thousands)
FINANCING ACTIVITIES
Increase (decrease) in deposits (12,439) 14,060 25,557 (3,379) 19,118
------
Net increase (decrease) in
Federal funds purchased -- 200 (7,250) 75 (150)
-----
Increase (decrease) in other
borrowings (6,005) 7,695 (42) 7,269 (487)
-----
Dividends paid -- (750) (750) -- (325)
-----
----------------------------------------------------------------------
Net cash provided by (used in)
financing activities $(18,444) $21,205 $17,515 $ 3,965 $18,156
----------------------------------------------------------------------
Net increase (decrease) in cash and
cash equivalents (5,358) 2,168 1,411 (6,626) 1,967
Cash and cash equivalents,
beginning of period 14,152 12,741 12,741 19,367 17,400
----------------------------------------------------------------------
Cash and cash equivalents, end of
period $ 8,794 $14,909 $14,152 $12,741 $19,367
======================================================================
Supplemental disclosure of cash
flow information:
Interest paid $1,508 $1,465 $3,187 $3,339 $5,072
Income taxes paid 290 419 739 620 458
Equity adjustment for net
unrealized loss in securities
available for sale 303 -- -- -- --
The accompanying notes are an integral part
of these consolidated financial statements
</TABLE>
CF-9
<PAGE> 159
DALHART BANCSHARES, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the
accounts of Dalhart Bancshares, Inc. (Bancshares),
Dalhart Bancshares of Delaware, Inc., and Citizens
State Bank of Dalhart (Bank). All significant
intercompany transactions have been eliminated.
Citizens State Bank of Dalhart is a majority-owned
(93.17%) subsidiary of Dalhart Bancshares of Delaware,
Inc., which in turn is a wholly-owned subsidiary of
Dalhart Bancshares, Inc.
b. CASH EQUIVALENTS
Cash equivalents include noninterest bearing deposits,
amounts due from banks and Federal funds sold.
c. INVESTMENT SECURITIES
Investment securities are stated at cost, adjusted for
amortization of premiums or accretion of discounts.
Gains and losses on sales of securities are determined
on a specific identification method.
Effective January 1, 1994, Bank adopted Statement of
Financial Accounting Standard No. 115, "Accounting for
Certain Investments in Debt and Equity Securities"
(SFAS No. 115) which requires that investments be
classified in three categories and accounted for as
follows: held-to-maturity securities reported at
amortized cost, trading securities reported at fair
value, with unrealized gains and losses included in
earnings, and available-for-sale securities reported at
fair value, with unrealized gains and losses shown as
a separate component of stockholders' equity.
The effect of adopting this standard resulted in the
reporting of an unrealized loss on available-for-sale
securities as of June 30, 1994 of approximately
$493,000.
d. LOANS
Loans are stated at outstanding principal balances.
Interest income on loans is credited to operations
based on the principal amount outstanding.
Loans are placed on nonaccrual status when management
believes that the borrower's financial condition, after
giving consideration to economic and business
conditions and collection efforts, is such that
collection of interest is doubtful.
Interest income is recognized on the accrual method.
The accrual of interest is reduced or discontinued if
collectibility of such is considered doubtful, and all
previously accrued but unpaid interest is reversed at
that time.
CF-10
<PAGE> 160
DALHART BANCSHARES, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
e. ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is established through a
provision for loan losses charged to expense. Loans
are charged against the allowance for loan losses when
management believes that the collectibility of the
principal is unlikely. The allowance is an amount that
management believes will be adequate to absorb losses
on existing loans that may become uncollectible, based
on evaluations of the collectibility of loans and prior
loan loss experience. The evaluations take into
consideration such factors as changes in the nature and
volume of the loan portfolio, overall portfolio
quality, review of specific problem loans, and current
economic conditions and trends that may affect the
borrower's ability to pay.
f. PREMISES AND EQUIPMENT
Premises and equipment are stated at cost, less
accumulated depreciation. Depreciation is computed
using the straight-line and accelerated methods based
on the estimated useful lives of the related assets.
g. INCOME TAXES
Bancshares and its subsidiary file consolidated income
tax returns. Income tax expense or benefit is
allocated to its subsidiary on the basis of its taxable
income or loss included in the consolidated return.
Deferred income taxes are provided on certain
transactions which are reported for financial reporting
purposes in different periods than for income tax
purposes. Bancshares adopted Statement of Financial
Accounting Standard No. 109, "Accounting for Income
Taxes," during 1993. The impact of this change in
accounting principle has been reported separately in
the 1993 statement of income.
h. EARNINGS PER SHARE
Earnings per share computations are based on the
weighted average number of common shares outstanding
during the year.
i. TRUST DEPARTMENT ASSETS
Property (other than cash deposits) held in fiduciary
or agency capacities for customers is not included in
the accompanying consolidated financial statements
since such items are not assets of Bancshares or its
subsidiary.
CF-11
<PAGE> 161
DALHART BANCSHARES, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
2. INVESTMENT SECURITIES
<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
-------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
DECEMBER 31, 1993
U.S. Treasury and agency
securities $ 2,357 $ 111 $ (5) $ 2,463
Obligations of states and
political subdivisions 18,822 475 (24) 19,273
Mortgage-backed securities 26,220 311 (47) 26,484
-------------------------------------------------------------------------
$47,399 $ 897 $ (76) $48,220
=========================================================================
DECEMBER 31, 1992 (UNAUDITED)
U.S. Treasury and agency
securities $ 4,256 $ 191 $ (39) $ 4,408
Obligations of states and
political subdivisions 13,433 243 (62) 13,614
Mortgage-backed securities 32,401 310 (223) 32,488
Corporate bonds 353 - - 353
-------------------------------------------------------------------------
$50,443 $ 744 $ (324) $50,863
=========================================================================
</TABLE>
CF-12
<PAGE> 162
DALHART BANCSHARES, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
2. INVESTMENT SECURITIES (CONTINUED)
The amortized cost and estimated market value of debt securities
by contractual maturity, as of December 31, 1993, are shown
below. Expected maturities will differ from contractual
maturity because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
Mortgage-backed securities are included in the maturity table
below based on their average remaining life or call date, if
applicable.
<TABLE>
<CAPTION>
ESTIMATED
AMORTIZED MARKET
COST VALUE
-------------------------------------
(In thousands)
<S> <C> <C>
Due in one year or less $ 14,772 $ 14,930
Due after one year through five years 26,535 26,969
Due after five years through ten years 4,515 4,668
Due after ten years 1,577 1,653
-------------------------------------
$47,399 $48,220
=====================================
</TABLE>
At December 31, 1993 and 1992, investment securities with
carrying values aggregating approximately $13,178,000 and
$7,342,000, respectively, and market values of approximately
$13,493,000 and $7,664,000, respectively, were pledged as
collateral on public and trust funds on deposit and for other
purposes required by law or written agreement.
CF-13
<PAGE> 163
DALHART BANCSHARES, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
3. LOANS AND ALLOWANCE FOR LOAN LOSSES
The carrying amounts by category consisted of the following
(in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------------
1993 1992
--------------------------------------------
(Unaudited)
<S> <C> <C>
Loans:
Commercial, real estate
and agricultural $ 69,673 $ 52,513
Installment 1,557 1,617
Mortgage 9,111 6,363
Other 443 441
--------------------------------------------
80,784 60,934
Less:
Allowance for loan losses (875) (1,479)
Unearned discount (163) (193)
--------------------------------------------
Net loans $79,746 $59,262
============================================
</TABLE>
An analysis of the changes in the allowance for loan losses follows
(in thousands):
<TABLE>
<CAPTION>
1993 1992 1991
------------------------------------------------------
(Unaudited)
<S> <C> <C> <C>
Balance at beginning of year $ 1,479 $ 1,388 $ 1,321
Provision credited to income (522) - -
Loan recoveries 36 116 98
Loan charge-offs (118) (25) (31)
------------------------------------------------------
Balance at end of year $ 875 $ 1,479 $ 1,388
======================================================
</TABLE>
CF-14
<PAGE> 164
DALHART BANCSHARES, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
3. LOANS AND ALLOWANCE FOR LOAN LOSSES (CONTINUED)
The Bank had floating rate loans which reprice at least quarterly
totaling approximately $56,584,000 and approximately $2,008,000 in
floating rate loans which reprice at least annually.
The aggregate amounts of loans on which the accrual of interest had
been reduced or discontinued amounted to approximately $185,000 and
$1,000 at December 31, 1993 and 1992, respectively. The related
amounts received and recognized as interest income on these loans
were approximately $9,000 and $0 for the years ended December 31,
1993 and 1992, respectively. If the contractual interest on these
loans had been recognized, such income would have been
approximately $26,000 and $1,000 for the years ended December 31,
1993 and 1992, respectively. Loans which were contractually past
due ninety days or more as to the payment of principal or interest
amounted to $0 and approximately $2,000 at December 31, 1993 and
1992, respectively.
4. BANK PREMISES AND EQUIPMENT
A summary of bank premises and equipment follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------------
1993 1992
--------------------------------------
(Unaudited)
<S> <C> <C>
Land $ 178 $ 177
Buildings and improvements 2,380 1,800
Furniture, fixtures and equipment 1,638 1,080
Bank automobiles 112 97
--------------------------------------
4,308 3,154
Accumulated depreciation (2,033) (1,809)
--------------------------------------
$2,275 $1,345
======================================
</TABLE>
CF-15
<PAGE> 165
DALHART BANCSHARES, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
5. DEPOSITS
Deposits are summarized as follows (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------
1993 1992
----------------------------------------
(Unaudited)
<S> <C> <C>
Demand:
Noninterest-bearing $ 35,996 $ 25,591
----------------------------------------
Interest-bearing:
NOW 23,227 17,243
Super NOW 1,152 3,625
Money market 14,382 12,218
----------------------------------------
38,761 33,086
----------------------------------------
Savings 6,306 4,182
Time 47,212 39,859
----------------------------------------
$128,275 $102,718
========================================
</TABLE>
Time deposits include certificates of deposit of $100,000 and over
totaling approximately $12,904,000 and $10,043,000 as of December
31, 1993 and 1992, respectively.
6. OTHER BORROWINGS
Other borrowings are summarized below (in thousands):
<TABLE>
<CAPTION>
DECEMBER 31,
----------------------------------------
1993 1992
----------------------------------------
(Unaudited)
<S> <C> <C>
Advances from the Federal Home
Loan Bank of Dallas:
Short term $ 6,000 $ 7,000
Long Term 270 -
Treasury tax and loan note option 1,117 829
Other note payable 400 -
----------------------------------------
$ 7,787 $ 7,829
========================================
</TABLE>
CF-16
<PAGE> 166
DALHART BANCSHARES, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
6. OTHER BORROWINGS (CONTINUED)
Short term Federal Home Loan Bank (FHLB) advances are borrowings
due within 30 days. The interest rate on FHLB advances outstanding
is 3.1% and 3.4% at December 31, 1993 and 1992, respectively. The
advances are collateralized by all stock in the FHLB and by pledged
mortgage-backed securities with carrying values of approximately
$6,901,000 and $7,114,000 and market values of approximately
$6,922,000 and $7,107,000 at December 31, 1993 and 1992,
respectively.
The long term FHLB advance bears interest at 5.37% and is due
October 10, 2003. Annual principal obligations due for each of the
five years subsequent to 1993 are approximately $20,000, $23,000,
$24,000, $25,000, and $27,000.
The treasury tax and loan note option is secured by investment
securities with carrying values of approximately $1,102,000 and
$1,104,000 and market values of approximately $1,178,000 and
$1,199,000 at December 31, 1993 and 1992, respectively.
The other note payable represents an unsecured short-term borrowing
by Bancshares due within one year. The note payable is to an
unrelated individual bearing interest at prime and maturing January
11, 1994. Upon maturity, this note was renewed through January 11,
1995.
7. INCOME TAXES
The current and deferred portions of income tax expense (benefit)
are as follows (in thousands):
<TABLE>
<CAPTION>
1993 1992 1991
-------------------------------------------
(Unaudited)
<S> <C> <C> <C>
Current $ 765 $ 660 $ 457
Deferred 167 66 (43)
-------------------------------------------
Total $ 932 $ 726 $ 414
===========================================
</TABLE>
CF-17
<PAGE> 167
DALHART BANCSHARES, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
7. INCOME TAXES (CONTINUED)
A reconciliation of the provision for Federal income tax
expense to income tax expense computed by applying the
Federal statutory rate of 34% to income before Federal income
tax expense is as follows (in thousands):
<TABLE>
<CAPTION>
1993 1992 1991
-----------------------------------------------
(Unaudited)
<S> <C> <C> <C>
Provision for Federal income taxes
at the statutory rate $1,163 $ 788 $ 602
Tax exempt income (273) (204) (189)
Amortization of intangibles 17 17 17
Life insurance expense 25 29 --
Other, net -- 96 (16)
-----------------------------------------------
Total $ 932 $ 726 $ 414
===============================================
</TABLE>
The components of the deferred tax asset and liabilities at
December 31, 1993 are as follows (in thousands):
<TABLE>
<S> <C>
Deferred tax asset:
Intangibles $ 23
----------
Deferred tax liabilities:
Depreciation 43
Allowance for loan losses 36
Securities discount accretion 20
----------
Total deferred tax liabilities 99
----------
Net deferred tax liability $ 76
==========
</TABLE>
CF-18
<PAGE> 168
DALHART BANCSHARES, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
8. FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
Financial instruments which represent off-balance-sheet credit risk
consist of open commitments to extend credit in the normal course
of business which are not reflected in the accompanying
consolidated financial statements.
At December 31, 1993 and 1992, open commitments to extend credit
amounted to approximately $30,011,000 and $26,829,000,
respectively, and letters of credit totalled approximately $305,000
and $120,000, respectively. Such agreements require the Bank to
lend to a customer as long as there is no violation of any
condition established in the contract. Commitments generally have
fixed expiration dates or other termination clauses. Since many
of the commitments are expected to expire without being fully drawn
upon, the total commitment amounts do not necessarily represent
future cash requirements. The Bank evaluates each customer's
credit worthiness on a case-by-case basis. The amount of
collateral obtained (if deemed necessary by the Bank upon extension
of credit) is based on management's credit evaluation of the
customer. Collateral held varies, but may include accounts
receivable, inventory, property, plant and equipment, and income-
producing commercial properties.
The Bank's mortgage department originates mortgage loans to be sold
into the secondary market. At December 31, 1993 and 1992, loans
held for sale by the Bank amounted to approximately $9,111,000 and
$6,363,000, respectively. There are no unrealized gains or losses
on these loans as the Bank obtains purchase commitments from
investors at the time the interest rate is determined with each
borrower and prior to the advancement of funds.
Additionally, the Bank has entered into correspondent loan purchase
agreements with several third-party mortgage companies. In
summary, the third-party companies promise to purchase all loans
originated by the Bank if the loans meet the requirements set forth
in the agreement. However, certain agreements contain a repurchase
provision requiring the Bank to buy back any loans for a specified
period of time after the sale that meet certain conditions set
forth in the agreement. At December 31, 1993 and 1992, loans
totaling approximately $6,172,000 and $1,835,000, respectively,
have been sold under these agreements which have remaining buy back
potential to the Bank.
9. CONCENTRATION OF CREDIT RISK
The Bank grants commercial, agribusiness and residential loans to
customers in the Dalhart, Amarillo, Childress, and Vega, Texas
areas. Although the Bank has a diversified loan portfolio, a
substantial portion of the Bank's debtors' ability to honor their
contracts is dependent upon the agribusiness economic sector.
10. LEASE COMMITMENTS
Rental expense related to premises amounted to approximately
$58,000, $63,000, and $18,000 for the years ended December 31,
1993, 1992 and 1991, respectively. The Bank is obligated under a
noncancellable operating lease agreement which ends August 31,
1994. Future minimum rental payments required in 1994 are
approximately $38,000.
CF-19
<PAGE> 169
DALHART BANCSHARES, INC.
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
11. RELATED PARTY TRANSACTIONS
Certain directors, executive officers and principal stockholders
of Bancshares and its subsidiary, and businesses in which they have
significant interests, maintain normal depository arrangements with
the Bank and have borrowed funds from the Bank. In management's
opinion, these arrangements are all on substantially the same
terms, including interest rates and collateral, as those prevailing
for comparable transactions with unrelated parties and do not
involve more than the normal risk of collectibility or present
other unfavorable features.
At December 31, 1993 and 1992, direct loans to such parties
aggregated approximately $1,220,000 and $2,050,000, respectively.
12. EMPLOYEE BENEFITS
The Bank has a profit sharing plan in effect for employees over 20
1/2 years of age who have completed six months of service.
Contributions under the plan are discretionary and determined
annually by the Board of Directors. Contributions charged to
expense amounted to approximately $80,000, $112,000 and $85,000 for
the years ended December 31, 1993, 1992 and 1991, respectively.
13. SUBSEQUENT EVENT
On May 19, 1994, Bancshares and the Bank entered into merger
agreements with Boatmen's Bancshares, Inc. and certain of its
subsidiaries ("Boatmen's"). At December 31, 1993, Boatmen's had
consolidated assets of $26.7 billion and stockholders' equity of
$2.1 billion. Boatmen's operates from over 425 locations in
Missouri, Arkansas, Illinois, Iowa, Kansas, New Mexico, Oklahoma,
Tennessee and Texas. The merger agreements call for the
stockholders of Bancshares and the Bank to exchange their stock for
shares of Boatmen's common stock. Included in the merger agreement
are various conditions which, among other things, restrict
Bancshares and the Bank from paying any dividends or distributions
to stockholders and impose certain limitations on the Bank's
lending and investment decisions. The merger is contingent upon
approval of various regulatory agencies and the stockholders of
Bancshares and Bank and, if approved, is expected to be consummated
in the fourth quarter of 1994.
14. PENDING LITIGATION
The Bank and certain of its officers are named as defendants in a
suit filed in May 1994. The suit is not specific as to the amount
of damages suffered by the plaintiff. The Bank and its officers
intend to vigorously defend their positions. As discovery
procedures have only recently commenced, it is difficult, in the
opinion of management, to evaluate whether this involves a material
loss contingency. Therefore, no reserve has been recorded by
either Bancshares or Bank.
CF-20
<PAGE> 170
<TABLE>
INDEX TO FINANCIAL STATEMENTS OF CITIZENS BANK
CITIZENS STATE BANK OF DALHART:
<CAPTION>
Page
----
Financial Statements:
--------------------
<S> <C>
Report of Independent Auditors. . . . . . . . . . . . . . . . . . . . . .BF-2
Balance Sheets as of June 30, 1994 (Unaudited),
December 31, 1993 and December 31, 1992 (Unaudited) . . . . . . . .BF-3
Statements of Earnings for the Six Months Ended
June 30, 1994 (Unaudited) and 1993 (Unaudited) and for
the Years Ended December 31, 1993, 1992 (Unaudited) and
1991 (Unaudited). . . . . . . . . . . . . . . . . . . . . . . . . .BF-5
Statements of Stockholders' Equity for the Six Months Ended
June 30, 1994 (Unaudited) and for the Years Ended
December 31, 1993, 1992 (Unaudited) and 1991 (Unaudited). . . . . .BF-7
Statements of Cash Flows for the Six Months Ended
June 30, 1994 (Unaudited) and 1993 (Unaudited) and
the Years Ended December 31, 1993, 1992 (Unaudited) and
1991 (Unaudited). . . . . . . . . . . . . . . . . . . . . . . . . .BF-8
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . BF-10
</TABLE>
BF-1
<PAGE> 171
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Stockholders
Citizens State Bank of Dalhart
We have audited the accompanying balance sheet of Citizens State Bank
of Dalhart as of December 31, 1993, and the related statements of
earnings, stockholders' equity, and cash flows for the year then ended.
These financial statements are the responsibility of management. Our
responsibility is to express an opinion on these financial statements
based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well
as evaluating the overall financial statement presentation. We believe
that our audit provides a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the financial position of Citizens
State Bank of Dalhart at December 31, 1993, and the results of its
operations and its cash flows for the year then ended, in conformity
with generally accepted accounting principles.
GRA, Thompson, White & Co., P.A.
July 14, 1994
BF-2
<PAGE> 172
<TABLE>
CITIZENS STATE BANK OF DALHART
BALANCE SHEETS
<CAPTION>
JUNE 30, DECEMBER 31,
--------------------------------------------------------------------
1994 1993 1992
--------------------------------------------------------------------
(Unaudited) (Unaudited)
(In Thousands)
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents:
Noninterest bearing deposits and
cash $ 6,444 $ 10,126 $ 8,539
Federal funds sold 2,350 4,025 4,200
--------------------------------------------------------------------
Total cash and cash equivalents 8,794 14,151 12,739
--------------------------------------------------------------------
Interest bearing deposits in other
banks 294 390 1,872
Investment securities (estimated market
value $52,453, $48,220 and $50,863,
respectively) 52,305 47,399 50,443
Loans, less allowance for loan losses of
$890, $875 and $1,479, respectively 62,170 79,746 59,322
Premises and equipment, net 2,151 2,275 1,345
Accrued interest receivable 1,723 1,534 1,377
Stock in Federal Home Loan Bank 2,328 2,281 867
Excess of cost over fair value of assets
acquired 832 887 378
Other assets 179 141 172
--------------------------------------------------------------------
Total Assets $130,776 $148,804 $128,515
====================================================================
BF-3
<PAGE> 173
CITIZENS STATE BANK OF DALHART
BALANCE SHEETS (CONTINUED)
<CAPTION>
JUNE 30, DECEMBER 31,
--------------------------------------------------------------------
1994 1993 1992
--------------------------------------------------------------------
(Unaudited) (Unaudited)
(In Thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Deposits $115,860 $128,295 $102,718
Federal funds purchased -- -- 7,250
Other borrowings 1,370 7,387 7,829
Accrued interest payable 281 279 264
Other liabilities 226 318 162
--------------------------------------------------------------------
Total liabilities 117,737 136,279 118,223
--------------------------------------------------------------------
Stockholders' equity
Common stock, $100 par value;
20,000 shares authorized, issued
and outstanding 2,000 2,000 2,000
Capital surplus 6,000 6,000 6,000
Retained earnings 5,364 4,525 2,292
Unrealized net loss in securities
available for sale (325) -- --
--------------------------------------------------------------------
Total stockholders' equity 13,039 12,525 10,292
--------------------------------------------------------------------
Total Liabilities and
Stockholders' Equity $130,776 $148,804 $128,515
====================================================================
The accompanying notes are an integral part
of these financial statements
</TABLE>
BF-4
<PAGE> 174
<TABLE>
CITIZENS STATE BANK OF DALHART
STATEMENTS OF EARNINGS
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------
1994 1993 1993 1992 1991
------------------------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Interest income:
Loans, including fees $3,187 $2,861 $6,345 $4,997 $4,786
Federal funds sold 89 87 151 177 479
Investment securities 1,294 1,671 3,111 3,237 3,906
------------------------------------------------------------------------------------
Total interest income 4,570 4,619 9,607 8,411 9,171
------------------------------------------------------------------------------------
Interest expense:
Deposits 1,357 1,277 2,630 2,961 4,502
Federal funds purchased -- 100 145 165 367
Other borrowed funds 24 104 309 16 20
------------------------------------------------------------------------------------
Total interest expense 1,381 1,481 3,084 3,142 4,889
------------------------------------------------------------------------------------
Net interest income 3,189 3,138 6,523 5,269 4,282
Provision for loan losses -- (400) (522) -- --
------------------------------------------------------------------------------------
Net interest income after
provision for loan
losses 3,189 3,538 7,045 5,269 4,282
------------------------------------------------------------------------------------
Other income:
Service charges 257 252 532 467 423
Gain on sales of investment
securities -- -- 85 24 16
Other operating income 63 37 101 87 53
------------------------------------------------------------------------------------
Total other income 320 289 718 578 492
------------------------------------------------------------------------------------
Other expenses:
Compensation and benefits 1,187 1,110 2,243 1,919 1,466
Occupancy expense 318 219 505 458 439
Federal Deposit Insurance
premium 133 107 229 221 177
Other operating expenses 659 545 1,194 769 834
------------------------------------------------------------------------------------
BF-5
<PAGE> 175
CITIZENS STATE BANK OF DALHART
STATEMENTS OF EARNINGS (CONTINUED)
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------
1994 1993 1993 1992 1991
------------------------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In thousands, except per share amounts)
Total other expenses $2,297 $1,981 $4,171 $3,367 $2,916
------------------------------------------------------------------------------------
Earnings before income taxes
and cumulative effect of
change in accounting
principle $1,212 $1,846 $3,592 $2,480 $1,858
Income tax expense 281 490 932 726 414
------------------------------------------------------------------------------------
Earnings before cumulative
effect of change in
accounting principle 931 1,356 2,660 1,754 1,444
Cumulative effect of change
in accounting for income
taxes -- -- 148 -- --
------------------------------------------------------------------------------------
Net Earnings $ 931 $1,356 $2,808 $1,754 $1,444
====================================================================================
Earnings per share:
Earnings before cumulative
effect of change in
accounting principle $46.55 $67.80 $133.00 $87.70 $72.20
Cumulative effect of
change in accounting
for income taxes -- -- 7.40 -- --
------------------------------------------------------------------------------------
Net Earnings $46.55 $67.80 $140.40 $87.70 $72.20
====================================================================================
The accompanying notes are an integral part
of these financial statements
</TABLE>
BF-6
<PAGE> 176
<TABLE>
CITIZENS STATE BANK OF DALHART
STATEMENTS OF STOCKHOLDERS' EQUITY
<CAPTION>
UNREALIZED
NET LOSS IN
SECURITIES TOTAL
COMMON CAPITAL RETAINED AVAILABLE FOR STOCKHOLDERS'
STOCK SURPLUS EARNINGS SALE EQUITY
------------------------------------------------------------------------------------
(In thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1990
(unaudited) $2,000 $4,000 $2,094 $ -- $8,094
Net earnings (unaudited) -- -- 1,444 -- 1,444
Dividends - $27.50 per share
(unaudited) -- -- (550) -- (550)
------------------------------------------------------------------------------------
Balance, December 31, 1991
(unaudited) 2,000 4,000 2,988 -- 8,988
Net earnings (unaudited) -- -- 1,754 -- 1,754
Dividends - $22.50 per share
(unaudited) -- -- (450) -- (450)
Transfer -- 2,000 (2,000) -- --
------------------------------------------------------------------------------------
Balance, December 31, 1992
(unaudited) 2,000 6,000 2,292 -- 10,292
Net earnings -- -- 2,808 -- 2,808
Dividends - $28.75 per share -- -- (575) -- (575)
------------------------------------------------------------------------------------
Balance, December 31, 1993 2,000 6,000 4,525 -- 12,525
Net earnings (unaudited) -- -- 931 -- 931
Dividends - $4.60 per share
(unaudited) -- -- (92) -- (92)
Unrealized net loss in securities
available for sale (unaudited) -- -- -- (325) (325)
------------------------------------------------------------------------------------
Balance, June 30, 1994
(unaudited) $2,000 $6,000 $5,364 $ (325) $13,039
====================================================================================
The accompanying notes are an integral part
of these financial statements
</TABLE>
BF-7
<PAGE> 177
<TABLE>
CITIZENS STATE BANK OF DALHART
STATEMENTS OF CASH FLOWS
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------
1994 1993 1993 1992 1991
------------------------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In thousands)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 931 $ 1,356 $ 2,808 $ 1,754 $ 1,444
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 215 108 313 180 216
Provision for loan losses -- (400) (522) -- --
Gain on sale of investment
securities -- -- (85) (24) (16)
Net amortization of premium
and discount on
investment securities 121 159 343 215 55
Change in:
Accrued interest receivable (189) (498) (157) 34 112
Other assets (38) (712) (573) (8) (241)
Accrued interest payable 2 16 15 (185) (120)
Other liabilities 75 154 156 52 74
------------------------------------------------------------------------------------
Net cash provided by
operating activities 1,117 183 2,298 2,018 1,524
------------------------------------------------------------------------------------
INVESTING ACTIVITIES
Purchases of investment
securities (11,079) (16,517) (18,725) (23,966) (23,955)
Proceeds from sales and
maturities of investment
securities 5,608 3,332 21,579 18,463 16,344
Net decrease (increase) in loans 17,576 (5,096) (19,902) (6,040) (10,226)
Acquisitions of premises and
equipment (36) (791) (1,148) (604) (153)
------------------------------------------------------------------------------------
Net cash provided by (used in)
investing activities 12,069 (19,072) (18,196) (12,147) (17,990)
------------------------------------------------------------------------------------
BF-8
<PAGE> 178
CITIZENS STATE BANK OF DALHART
STATEMENTS OF CASH FLOWS (CONTINUED)
<CAPTION>
SIX MONTHS ENDED
JUNE 30, YEAR ENDED DECEMBER 31,
------------------------------------------------------------------------------------
1994 1993 1993 1992 1991
------------------------------------------------------------------------------------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
(In thousands)
FINANCING ACTIVITIES
Increase (decrease) in deposits (12,435) 14,082 25,577 (3,390) 19,128
Net increase (decrease) in
Federal funds purchased -- 200 (7,250) 75 (150)
Increase (decrease) in other
borrowings (6,016) 6,775 (442) 7,269 3
Dividends paid (92) -- (575) (450) (550)
------------------------------------------------------------------------------------
Net cash provided by (used in)
financing activities $(18,543) $ 21,507 $ 17,310 $ 3,504 $ 18,431
------------------------------------------------------------------------------------
Net increase (decrease) in cash
and cash equivalents (5,357) 2,168 1,412 (6,625) 1,965
Cash and cash equivalents,
beginning of period 14,151 12,739 12,739 19,364 17,399
------------------------------------------------------------------------------------
Cash and cash equivalents, end of
period $ 8,794 $14,907 $14,151 $12,739 $19,364
====================================================================================
Supplemental disclosure of cash
flow information:
Interest paid $1,484 $1,465 $3,171 $3,326 $5,008
Income taxes paid 290 419 739 620 458
Equity adjustment for net
unrealized loss in securities
available for sale 325 -- -- -- --
The accompanying notes are an integral part
of these financial statements
</TABLE>
BF-9
<PAGE> 179
CITIZENS STATE BANK OF DALHART
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
a. PRINCIPLES OF CONSOLIDATION
Citizens State Bank of Dalhart (Bank) is a majority-
owned (93.17%) subsidiary of Dalhart Bancshares of
Delaware, Inc., which in turn is a wholly-owned
subsidiary of Dalhart Bancshares, Inc. (Bancshares).
The accompanying financial statements represent the
Bank only and are not consolidated.
b. CASH EQUIVALENTS
Cash equivalents include noninterest bearing deposits,
amounts due from banks and Federal funds sold.
c. INVESTMENT SECURITIES
Investment securities are stated at cost, adjusted for
amortization of premiums or accretion of discounts.
Gains and losses on sales of securities are determined
on a specific identification method.
Effective January 1, 1994, Bank adopted Statement of
Financial Accounting Standard No. 115, "Accounting for
Certain Investments in Debt and Equity Securities"
(SFAS No. 115) which requires that investments be
classified in three categories and accounted for as
follows: held-to-maturity securities reported at
amortized cost, trading securities reported at fair
value, with unrealized gains and losses included in
earnings, and available-for-sale securities reported at
fair value, with unrealized gains and losses shown as
a separate component of stockholders' equity.
The effect of adopting this standard resulted in the
reporting of an unrealized loss on available-for-sale
securities as of June 30, 1994 of approximately
$493,000.
d. LOANS
Loans are stated at outstanding principal balances.
Interest income on loans is credited to operations
based on the principal amount outstanding.
Loans are placed on nonaccrual status when management
believes that the borrower's financial condition, after
giving consideration to economic and business
conditions and collection efforts, is such that
collection of interest is doubtful.
Interest income is recognized on the accrual method.
The accrual of interest is reduced or discontinued if
collectibility of such is considered doubtful, and all
previously accrued but unpaid interest is reversed at
that time.
BF-10
<PAGE> 180
CITIZENS STATE BANK OF DALHART
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)
e. ALLOWANCE FOR LOAN LOSSES
The allowance for loan losses is established through a
provision for loan losses charged to expense. Loans
are charged against the allowance for loan losses when
management believes that the collectibility of the
principal is unlikely. The allowance is an amount that
management believes will be adequate to absorb losses
on existing loans that may become uncollectible, based
on evaluations of the collectibility of loans and prior
loan loss experience. The evaluations take into
consideration such factors as changes in the nature and
volume of the loan portfolio, overall portfolio
quality, review of specific problem loans, and current
economic conditions and trends that may affect the
borrower's ability to pay.
f. PREMISES AND EQUIPMENT
Premises and equipment are stated at cost, less
accumulated depreciation. Depreciation is computed
using the straight-line and accelerated methods based
on the estimated useful lives of the related assets.
g. INCOME TAXES
Bancshares and the Bank file consolidated income tax
returns. Income tax expense or benefit is allocated to
the Bank on the basis of its taxable income or loss
included in the consolidated return. Deferred income
taxes are provided on certain transactions which are
reported for financial reporting purposes in different
periods than for income tax purposes. Bank adopted
Statement of Financial Accounting Standard No. 109,
"Accounting for Income Taxes," during 1993. The impact
of this change in accounting principle has been
reported separately in the 1993 statement of income.
h. EARNINGS PER SHARE
Earnings per share computations are based on the
weighted average number of common shares outstanding
during the year.
i. TRUST DEPARTMENT ASSETS
Property (other than cash deposits) held in fiduciary
or agency capacities for customers is not included in
the accompanying financial statements since such items
are not assets of the Bank.
BF-11
<PAGE> 181
CITIZENS STATE BANK OF DALHART
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
2. INVESTMENT SECURITIES
<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED MARKET
COST GAINS LOSSES VALUE
--------------------------------------------------------------------------------
(In Thousands)
<S> <C> <C> <C> <C>
DECEMBER 31, 1993
U.S. Treasury and agency
securities $ 2,357 $111 $ (5) $ 2,463
Obligations of states and
political subdivisions 18,822 475 (24) 19,273
Mortgage-backed securities 26,220 311 (47) 26,484
--------------------------------------------------------------------------------
$47,399 $897 $ (76) $48,220
================================================================================
DECEMBER 31, 1992 (UNAUDITED)
U.S. Treasury and agency
securities $ 4,256 $191 $ (39) $ 4,408
Obligations of states and
political subdivisions 13,433 243 (62) 13,614
Mortgage-backed securities 32,401 310 (223) 32,488
Corporate bonds 353 -- -- 353
--------------------------------------------------------------------------------
$50,443 $744 $(324) $50,863
================================================================================
</TABLE>
BF-12
<PAGE> 182
CITIZENS STATE BANK OF DALHART
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
2. INVESTMENT SECURITIES (CONTINUED)
<TABLE>
The amortized cost and estimated market value of debt securities
by contractual maturity, as of December 31, 1993, are shown
below. Expected maturities will differ from contractual
maturity because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.
Mortgage-backed securities are included in the maturity table
below based on their average remaining life or call date, if
applicable.
<CAPTION>
ESTIMATED
AMORTIZED MARKET
COST VALUE
-----------------------------
(In thousands)
<S> <C> <C>
Due in one year or less $14,772 $14,930
Due after one year through five years 26,535 26,969
Due after five years through ten years 4,515 4,668
Due after ten years 1,577 1,653
-----------------------------
$47,399 $48,220
=============================
</TABLE>
At December 31, 1993 and 1992, investment securities with
carrying values aggregating approximately $13,178,000 and
$7,342,000, respectively, and market values of approximately
$13,493,000 and $7,664,000, respectively, were pledged as
collateral on public and trust funds on deposit and for other
purposes required by law or written agreement.
BF-13
<PAGE> 183
CITIZENS STATE BANK OF DALHART
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
3. LOANS AND ALLOWANCE FOR LOAN LOSSES
<TABLE>
The carrying amounts by category consisted of the following (in thousands):
<CAPTION>
DECEMBER 31,
---------------------------------------------
1993 1992
---------------------------------------------
(Unaudited)
<S> <C> <C>
Loans:
Commercial, real estate and
agricultural $69,673 $52,513
Installment 1,557 1,617
Mortgage 9,111 6,363
Other 443 501
---------------------------------------------
80,784 60,994
Less:
Allowance for loan losses (875) (1,479)
Unearned discount (163) (193)
---------------------------------------------
Net loans $79,746 $59,322
=============================================
</TABLE>
<TABLE>
An analysis of the changes in the allowance for loan losses follows
(in thousands):
<CAPTION>
1993 1992 1991
---------------------------------------------
(Unaudited)
<S> <C> <C> <C>
Balance at beginning of year $1,489 $1,388 $1,321
Provision credited to income (522) -- --
Loan recoveries 36 116 98
Loan charge-offs (118) (25) (31)
---------------------------------------------
Balance at end of year $ 875 $1,479 $1,388
=============================================
</TABLE>
BF-14
<PAGE> 184
CITIZENS STATE BANK OF DALHART
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
3. LOANS AND ALLOWANCE FOR LOAN LOSSES (CONTINUED)
The Bank had floating rate loans which reprice at least
quarterly totaling approximately $56,584,000 and approximately
$2,008,000 in floating rate loans which reprice at least
annually.
The aggregate amounts of loans on which the accrual of interest
had been reduced or discontinued amounted to approximately
$185,000 and $1,000 at December 31, 1993 and 1992,
respectively. The related amounts received and recognized as
interest income on these loans were approximately $9,000 and $0
for the years ended December 31, 1993 and 1992, respectively.
If the contractual interest on these loans had been recognized,
such income would have been approximately $26,000 and $1,000
for the years ended December 31, 1993 and 1992, respectively.
Loans which were contractually past due ninety days or more as
to the payment of principal or interest amounted to $0 and
approximately $2,000 at December 31, 1993 and 1992,
respectively.
4. BANK PREMISES AND EQUIPMENT
<TABLE>
A summary of bank premises and equipment follows (in thousands):
<CAPTION>
DECEMBER 31,
-------------------------
1993 1992
-------------------------
(Unaudited)
<S> <C> <C>
Land $ 178 $ 177
Buildings and improvements 2,380 1,800
Furniture, fixtures and equipment 1,638 1,080
Bank automobiles 112 97
-------------------------
4,308 3,154
Accumulated depreciation (2,033) (1,809)
-------------------------
$ 2,275 $ 1,345
=========================
</TABLE>
BF-15
<PAGE> 185
CITIZENS STATE BANK OF DALHART
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
5. DEPOSITS
<TABLE>
Deposits are summarized as follows (in thousands):
<CAPTION>
DECEMBER 31,
-----------------------------------
1993 1992
-----------------------------------
(Unaudited)
<S> <C> <C>
Demand:
Noninterest-bearing $ 36,016 $ 25,591
-----------------------------------
Interest-bearing:
NOW 23,227 17,243
Super NOW 1,152 3,625
Money market 14,382 12,218
-----------------------------------
38,761 33,086
-----------------------------------
Savings 6,306 4,182
Time 47,212 39,859
-----------------------------------
$128,295 $102,718
===================================
</TABLE>
Time deposits include certificates of deposit of $100,000 and
over totaling approximately $12,904,000 and $10,043,000 as of
December 31, 1993 and 1992, respectively.
6. OTHER BORROWINGS
<TABLE>
Other borrowings are summarized below (in thousands):
<CAPTION>
DECEMBER 31,
-----------------------------------
1993 1992
-----------------------------------
(Unaudited)
<S> <C> <C>
Advances from the Federal Home
Loan Bank of Dallas:
Short term $6,000 $7,000
Long Term 270 --
Treasury tax and loan note option 1,117 829
-----------------------------------
$7,387 $7,829
===================================
</TABLE>
BF-16
<PAGE> 186
CITIZENS STATE BANK OF DALHART
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
6. OTHER BORROWINGS (CONTINUED)
Short term Federal Home Loan Bank (FHLB) advances are
borrowings due within 30 days. The interest rate on FHLB
advances outstanding is 3.1% and 3.4% at December 31, 1993 and
1992, respectively. The advances are collateralized by all
stock in the FHLB and by pledged mortgage-backed securities
with carrying values of approximately $6,901,000 and $7,114,000
and market values of approximately $6,922,000 and $7,107,000 at
December 31, 1993 and 1992, respectively.
The long term FHLB advance bears interest at 5.37% and is due
October 10, 2003. Annual principal obligations due for each of
the five years subsequent to 1993 are approximately $20,000,
$23,000, $24,000, $25,000, and $27,000.
The treasury tax and loan note option is secured by investment
securities with carrying values of approximately $1,102,000 and
$1,104,000 and market values of approximately $1,178,000 and
$1,199,000 at December 31, 1993 and 1992, respectively.
7. INCOME TAXES
<TABLE>
The current and deferred portions of income tax expense
(benefit) are as follows (in thousands):
<CAPTION>
1993 1992 1991
------------------------------------
(Unaudited)
<S> <C> <C> <C>
Current $ 779 $ 669 $ 473
Deferred 153 57 (59)
------------------------------------
Total $ 932 $ 726 $ 414
====================================
</TABLE>
BF-17
<PAGE> 187
CITIZENS STATE BANK OF DALHART
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
7. INCOME TAXES (CONTINUED)
<TABLE>
A reconciliation of the provision for Federal income tax
expense to income tax expense computed by applying the Federal
statutory rate of 34% to income before Federal income tax
expense is as follows (in thousands):
<CAPTION>
1993 1992 1991
----------------------------
(Unaudited)
<S> <C> <C> <C>
Provision for Federal income taxes
at the statutory rate $1,221 $ 843 $ 632
Tax exempt income (273) (204) (189)
Other, net (16) 87 (29)
----------------------------
Total $ 932 $ 726 $ 414
============================
</TABLE>
<TABLE>
The components of the deferred tax asset and liabilities at
December 31, 1993 are as follows (in thousands):
<S> <C>
Deferred tax asset:
Intangibles $ 23
---------
Deferred tax liabilities:
Depreciation 43
Allowance for loan losses 36
Securities discount accretion 20
---------
Total deferred tax liabilities 99
---------
Net deferred tax liability $ 76
=========
</TABLE>
BF-18
<PAGE> 188
CITIZENS STATE BANK OF DALHART
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
8. FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK
Financial instruments which represent off-balance-sheet credit
risk consist of open commitments to extend credit in the normal
course of business which are not reflected in the accompanying
financial statements.
At December 31, 1993 and 1992, open commitments to extend
credit amounted to approximately $30,011,000 and $26,829,000,
respectively, and letters of credit totalled approximately
$305,000 and $120,000, respectively. Such agreements require
the Bank to lend to a customer as long as there is no violation
of any condition established in the contract. Commitments
generally have fixed expiration dates or other termination
clauses. Since many of the commitments are expected to expire
without being fully drawn upon, the total commitment amounts
do not necessarily represent future cash requirements. The
Bank evaluates each customer's credit worthiness on a case-by-
case basis. The amount of collateral obtained (if deemed
necessary by the Bank upon extension of credit) is based on
management's credit evaluation of the customer. Collateral
held varies, but may include accounts receivable, inventory,
property, plant and equipment, and income-producing commercial
properties.
The Bank's mortgage department originates mortgage loans to be
sold into the secondary market. At December 31, 1993 and 1992,
loans held for sale by the Bank amounted to approximately
$9,111,000 and $6,363,000, respectively. There are no
unrealized gains or losses on these loans as the Bank obtains
purchase commitments from investors at the time the interest
rate is determined with each borrower and prior to the
advancement of funds.
Additionally, the Bank has entered into correspondent loan
purchase agreements with several third-party mortgage
companies. In summary, the third-party companies promise to
purchase all loans originated by the Bank if the loans meet the
requirements set forth in the agreement. However, certain
agreements contain a repurchase provision requiring the Bank
to buy back any loans for a specified period of time after the
sale that meet certain conditions set forth in the agreement.
At December 31, 1993 and 1992, loans totaling approximately
$6,172,000 and $1,835,000, respectively, have been sold under
these agreements which have remaining buy back potential to the
Bank.
9. CONCENTRATION OF CREDIT RISK
The Bank grants commercial, agribusiness and residential loans
to customers in the Dalhart, Amarillo, Childress, and Vega,
Texas areas. Although the Bank has a diversified loan
portfolio, a substantial portion of the Bank's debtors' ability
to honor their contracts is dependent upon the agribusiness
economic sector.
10. LEASE COMMITMENTS
Rental expense related to premises amounted to approximately
$58,000, $63,000, and $18,000 for the years ended December 31,
1993, 1992 and 1991, respectively. The Bank is obligated under
a noncancellable operating lease agreement which ends August
31, 1994. Future minimum rental payments required in 1994 are
approximately $38,000.
BF-19
<PAGE> 189
CITIZENS STATE BANK OF DALHART
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993 (AUDITED), 1992 AND 1991 (UNAUDITED)
11. RELATED PARTY TRANSACTIONS
Certain directors, executive officers and principal
stockholders of the Bank, and businesses in which they have
significant interests, maintain normal depository arrangements
with the Bank and have borrowed funds from the Bank. In
management's opinion, these arrangements are all on
substantially the same terms, including interest rates and
collateral, as those prevailing for comparable transactions
with unrelated parties and do not involve more than the normal
risk of collectibility or present other unfavorable features.
At December 31, 1993 and 1992, direct loans to such parties
aggregated approximately $1,220,000 and $2,050,000,
respectively.
12. EMPLOYEE BENEFITS
The Bank has a profit sharing plan in effect for employees over
20 1/2 years of age who have completed six months of service.
Contributions under the plan are discretionary and determined
annually by the Board of Directors. Contributions charged to
expense amounted to approximately $80,000, $112,000 and $85,000
for the years ended December 31, 1993, 1992 and 1991,
respectively.
13. SUBSEQUENT EVENT
On May 19, 1994, Bancshares and the Bank entered into merger
agreements with Boatmen's Bancshares, Inc. and certain of its
subsidiaries ("Boatmen's"). At December 31, 1993, Boatmen's
had consolidated assets of $26.7 billion and stockholders'
equity of $2.1 billion. Boatmen's operates from over 425
locations in Missouri, Arkansas, Illinois, Iowa, Kansas, New
Mexico, Oklahoma, Tennessee and Texas. The merger agreements
call for the stockholders of Bancshares and the Bank to
exchange their stock for shares of Boatmen's common stock.
Included in the merger agreement are various conditions which,
among other things, restrict Bancshares and the Bank from
paying any dividends or distributions to stockholders and
impose certain limitations on the Bank's lending and investment
decisions. The merger is contingent upon approval of various
regulatory agencies and the stockholders of Bancshares and Bank
and, if approved, is expected to be consummated in the fourth
quarter of 1994.
14. PENDING LITIGATION
The Bank and certain of its officers are named as defendants
in a suit filed in May 1994. The suit is not specific as to
the amount of damages suffered by the plaintiff. The Bank and
its officers intend to vigorously defend their positions. As
discovery procedures have only recently commenced, it is
difficult, in the opinion of management, to evaluate whether
this involves a material loss contingency. Therefore, no
reserve has been recorded by either Bancshares or Bank.
BF-20
<PAGE> 190
EXHIBIT A
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
AGREEMENT AND PLAN OF MERGER
by and among
DALHART BANCSHARES, INC.,
a Texas corporation,
and
DALHART BANCSHARES OF DELAWARE, INC.
a Delaware corporation,
and
BOATMEN'S BANCSHARES, INC.,
a Missouri corporation,
and
BOATMEN'S TEXAS, INC.,
a Missouri corporation,
Dated May 19, 1994
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE> 191
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
----
<S> <C>
ARTICLE ONE TERMS OF THE MERGER & CLOSING. . . . . . . . . . . . . . . .A-1
Section 1.01. The Mergers. . . . . . . . . . . . . . . . . . . . . . .A-1
Section 1.02. Merging Corporations . . . . . . . . . . . . . . . . . .A-1
Section 1.03. Surviving Corporation. . . . . . . . . . . . . . . . . .A-1
Section 1.04. Effect of the Mergers. . . . . . . . . . . . . . . . . .A-1
Section 1.05. Conversion of Shares . . . . . . . . . . . . . . . . . .A-1
Section 1.06. The Closing. . . . . . . . . . . . . . . . . . . . . . .A-3
Section 1.07. Closing Date . . . . . . . . . . . . . . . . . . . . . .A-3
Section 1.08. Escrow . . . . . . . . . . . . . . . . . . . . . . . . .A-3
Section 1.09. Closing Deliveries . . . . . . . . . . . . . . . . . . .A-3
Section 1.10. Exchange Procedures; Surrender of Certificates . . . . .A-5
ARTICLE TWO REPRESENTATIONS OF COMPANY AND DALHART-DELAWARE. . . . . . .A-6
Section 2.01. Organization and Capital Stock . . . . . . . . . . . . .A-6
Section 2.02. Authorization; No Defaults . . . . . . . . . . . . . . .A-7
Section 2.03. Subsidiaries . . . . . . . . . . . . . . . . . . . . . .A-7
Section 2.04. Financial Information. . . . . . . . . . . . . . . . . .A-7
Section 2.05. Absence of Changes . . . . . . . . . . . . . . . . . . .A-8
Section 2.06. Regulatory Enforcement Matters . . . . . . . . . . . . .A-8
Section 2.07. Tax Matters. . . . . . . . . . . . . . . . . . . . . . .A-8
Section 2.08. Litigation . . . . . . . . . . . . . . . . . . . . . . .A-8
Section 2.09. Employment Agreements. . . . . . . . . . . . . . . . . .A-8
Section 2.10. Reports. . . . . . . . . . . . . . . . . . . . . . . . .A-9
Section 2.11. Loan Portfolio . . . . . . . . . . . . . . . . . . . . .A-9
Section 2.12. Employee Matters and ERISA . . . . . . . . . . . . . . .A-9
Section 2.13. Title to Properties; Insurance . . . . . . . . . . . . A-10
Section 2.14. Environmental Matters. . . . . . . . . . . . . . . . . A-11
Section 2.15. Compliance with Law. . . . . . . . . . . . . . . . . . A-11
Section 2.16. Undisclosed Liabilities. . . . . . . . . . . . . . . . A-11
Section 2.17. Brokerage. . . . . . . . . . . . . . . . . . . . . . . A-11
Section 2.18. Insurance Policy on Life of Catherine D. Koehler . . . A-11
Section 2.19. Stock Redemption Termination Agreement . . . . . . . . A-12
Section 2.20. Statements True and Correct. . . . . . . . . . . . . . A-12
ARTICLE THREE REPRESENTATIONS OF BOATMEN'S AND BOATMEN'S-TEXAS . . . . . A-12
Section 3.01. Organization and Capital Stock . . . . . . . . . . . . A-12
Section 3.02. Authorization. . . . . . . . . . . . . . . . . . . . . A-13
Section 3.03. Subsidiaries . . . . . . . . . . . . . . . . . . . . . A-13
Section 3.04. Financial Information. . . . . . . . . . . . . . . . . A-13
Section 3.05. Absence of Changes . . . . . . . . . . . . . . . . . . A-14
Section 3.06. Litigation . . . . . . . . . . . . . . . . . . . . . . A-14
Section 3.07. Reports. . . . . . . . . . . . . . . . . . . . . . . . A-14
Section 3.08. Compliance With Law. . . . . . . . . . . . . . . . . . A-14
Section 3.09. Statements True and Correct. . . . . . . . . . . . . . A-14
A-i
<PAGE> 192
ARTICLE FOUR AGREEMENTS OF COMPANY. . . . . . . . . . . . . . . . . . . A-15
Section 4.01. Business in Ordinary Course. . . . . . . . . . . . . . A-15
Section 4.02. Breaches . . . . . . . . . . . . . . . . . . . . . . . A-17
Section 4.03. Subsidiary Bank Merger . . . . . . . . . . . . . . . . A-17
Section 4.04. Submission to Shareholders . . . . . . . . . . . . . . A-17
Section 4.05. Consents to Contracts and Leases . . . . . . . . . . . A-18
Section 4.06. Conforming Accounting and Reserve Policies;
Restructuring Expenses . . . . . . . . . . . . . . . . A-18
Section 4.07. Consummation of Agreement. . . . . . . . . . . . . . . A-18
Section 4.08. Environmental Reports. . . . . . . . . . . . . . . . . A-19
Section 4.09. Restriction on Resales . . . . . . . . . . . . . . . . A-19
Section 4.10. Access to Information. . . . . . . . . . . . . . . . . A-19
ARTICLE FIVE AGREEMENTS OF BOATMEN'S AND BOATMEN'S-TEXAS. . . . . . . . A-20
Section 5.01. Regulatory Approvals and Registration Statement. . . . A-20
Section 5.02. Breaches . . . . . . . . . . . . . . . . . . . . . . . A-20
Section 5.03. Consummation of Agreement. . . . . . . . . . . . . . . A-21
Section 5.04. Directors and Officers' Liability Insurance and
Indemnification. . . . . . . . . . . . . . . . . . . . A-21
Section 5.05. Employee Benefits. . . . . . . . . . . . . . . . . . . A-21
Section 5.06. Subsidiary Bank Merger . . . . . . . . . . . . . . . . A-22
Section 5.07. Access to Information. . . . . . . . . . . . . . . . . A-22
ARTICLE SIX CONDITIONS PRECEDENT TO THE MERGER . . . . . . . . . . . . A-22
Section 6.01. Conditions to Boatmen's Obligations. . . . . . . . . . A-22
Section 6.02. Conditions to Company's and Dalhart-Delaware's
Obligations. . . . . . . . . . . . . . . . . . . . . . A-24
ARTICLE SEVEN TERMINATION OR ABANDONMENT . . . . . . . . . . . . . . . . A-24
Section 7.01. Mutual Agreement . . . . . . . . . . . . . . . . . . . A-24
Section 7.02. Breach of Representations or Agreements. . . . . . . . A-24
Section 7.03. Environmental Reports. . . . . . . . . . . . . . . . . A-25
Section 7.04. Failure of Conditions. . . . . . . . . . . . . . . . . A-25
Section 7.05. Approval Denial. . . . . . . . . . . . . . . . . . . . A-25
Section 7.06. Shareholder Approval Denial. . . . . . . . . . . . . . A-25
Section 7.07. Regulatory Enforcement Matters . . . . . . . . . . . . A-25
Section 7.08. Automatic Termination. . . . . . . . . . . . . . . . . A-25
Section 7.09. Termination Fee. . . . . . . . . . . . . . . . . . . . A-25
ARTICLE EIGHT GENERAL. . . . . . . . . . . . . . . . . . . . . . . . . . A-27
Section 8.01. Confidential Information . . . . . . . . . . . . . . . A-27
Section 8.02. Publicity. . . . . . . . . . . . . . . . . . . . . . . A-28
Section 8.03. Return of Documents. . . . . . . . . . . . . . . . . . A-28
Section 8.04. Notices. . . . . . . . . . . . . . . . . . . . . . . . A-28
Section 8.05. Liabilities. . . . . . . . . . . . . . . . . . . . . . A-29
Section 8.06. Nonsurvival of Representations, Warranties and
Agreements . . . . . . . . . . . . . . . . . . . . . . A-29
Section 8.07. Entire Agreement . . . . . . . . . . . . . . . . . . . A-29
Section 8.08. Headings and Captions. . . . . . . . . . . . . . . . . A-29
Section 8.09. Waiver, Amendment or Modification. . . . . . . . . . . A-29
Section 8.10. Rules of Construction. . . . . . . . . . . . . . . . . A-29
Section 8.11. Counterparts . . . . . . . . . . . . . . . . . . . . . A-30
Section 8.12. Successors and Assigns . . . . . . . . . . . . . . . . A-30
Section 8.13. Governing Law; Assignment. . . . . . . . . . . . . . . A-30
A-ii
<PAGE> 193
EXHIBIT 1.09(a) - Company's Legal Opinion Matters
EXHIBIT 1.09(b) - Boatmen's Legal Opinion Matters
EXHIBIT 2.19 - Stock Redemption Termination Agreement
EXHIBIT 4.03 - Bank Merger Agreement
EXHIBIT 4.09 - Affiliates Agreements
EXHIBIT 7.09 - Index Group
A-iii
<PAGE> 194
AGREEMENT AND PLAN OF MERGER
----------------------------
This is an AGREEMENT AND PLAN OF MERGER (this "Agreement") made
May 19, 1994, by and among BOATMEN'S BANCSHARES, INC., a Missouri
corporation, ("Boatmen's"), BOATMEN'S TEXAS, INC., a Missouri
corporation ("Boatmen's-Texas"), DALHART BANCSHARES, INC., a Texas
corporation, ("Company") and DALHART BANCSHARES OF DELAWARE, INC., a
Delaware corporation which is a wholly-owned subsidiary of Company
("Dalhart-Delaware").
In consideration of the premises and the mutual terms and
provisions set forth in this Agreement, the parties agree as follows.
ARTICLE ONE
-----------
TERMS OF THE MERGER & CLOSING
-----------------------------
SECTION 1.01. THE MERGERS. Pursuant to the terms and provisions
------------ -----------
of this Agreement and the Texas Business Corporation Act (the "Texas
Corporate Law"), The General and Business Corporation Law of Missouri
(the "Missouri Corporate Law"), and the Delaware General Corporation
Law (the "Delaware Corporate Law"), Company and Dalhart-Delaware
shall merge with and into Boatmen's-Texas (individually a "Merger",
and collectively the "Mergers").
SECTION 1.02. MERGING CORPORATIONS. Company and Dalhart-
------------ --------------------
Delaware each shall be a merging corporation under its respective
Merger and the respective corporate identity and existence of each,
separate and apart from Boatmen's-Texas, shall cease on consummation
of the Mergers.
SECTION 1.03. SURVIVING CORPORATION. Boatmen's-Texas shall be
------------ ---------------------
the surviving corporation in each of the Mergers. No changes in the
articles of incorporation of Boatmen's-Texas shall be effected by the
Mergers.
SECTION 1.04. EFFECT OF THE MERGERS. Each of the Mergers shall
------------ ---------------------
have all of the effects provided by the Missouri Corporate Law, and,
as applicable, the Delaware Corporate Law or the Texas Corporate Law.
SECTION 1.05. CONVERSION OF SHARES.
------------ --------------------
(a) At the Effective Time (as defined in Section 1.07 below),
each share of common stock, par value $10.00, of Company ("Company
Common") issued and outstanding immediately prior to the Effective
Time, other than any shares the holders of which have duly exercised
and perfected their dissenters' rights under the Texas Corporate Law,
shall be converted into the right to receive, subject to the
provisions of subsection (b) below, 6.3599 (the "Conversion Ratio")
shares of common stock, par value $1.00 per share, of Boatmen's (the
"Boatmen's Common") (together with any cash payment in lieu of
fractional shares, as provided below, the "Merger Consideration").
A portion of the Merger Consideration equal to the quotient of (A)
divided by (B), where (A) equals the number of Escrow Shares (as
defined in Section 1.08), and (B) equals the number of shares of
Company Common issued and outstanding immediately prior to the
Effective Time which are held by shareholders who have not duly
exercised and perfected their dissenters' rights under the Texas
Corporate Law, shall be issued and delivered on the Closing Date (as
defined in Section
A-1
<PAGE> 195
1.06 hereof) by Boatmen's to the Escrow Agent (as defined in Section 1.08
hereof) pursuant to the provisions of Section 1.08 hereof and the balance
thereof shall be issuable to the holders of the Company Common as provided
in Section 1.10 hereof. No fractional shares of Boatmen's Common shall be
issued and, in lieu thereof, holders of shares of Company Common who would
otherwise be entitled to a fractional share interest in Boatmen's Common
(after taking into account all shares of Company Common held by such
holder exclusive of any beneficial interest in the Escrow Shares) shall be
paid an amount in cash equal to the product of such fractional share
interest and the closing price of a share of Boatmen's Common on the
National Association of Securities Dealers Automated Quotation System
- - National Market System ("Nasdaq") on the business day immediately
preceding the date on which the Effective Time occurs. If the
Effective Time does not occur on or before the record date for the
payment of the regular quarterly dividend on Boatmen's Common
declared during the fourth quarter of 1994 or the first quarter of
1995, then, notwithstanding the foregoing, the number of shares of
Boatmen's Common included in the Merger Consideration shall be
increased by adding to the Conversion Ratio the quotient of (i) the
product of (A) the amount of such quarterly dividend or dividends, as the
case may be, multiplied by (B) 6.3599, divided by (ii) the average closing
price of a share of Boatmen's Common on Nasdaq during the twenty trading
days immediately preceding the fifth calendar day immediately preceding the
Closing Date.
(b) Should Catherine D. Koehler not survive the Closing Date and
on account of her death the Company shall have received or as of the
Closing (as defined in Section 1.06 below) shall be entitled to
receive a death benefit of not less than One Million Dollars
($1,000,000) of life insurance proceeds under Guardian Life Insurance
Company Policy No. 3710687, then the Conversion Ratio shall be
increased by an amount equal to the quotient of (i) $1,000,000
divided by (ii) the number of shares of Company Common issued and
outstanding as of the Closing divided, again, by (iii) the average
per share closing price of a share of Boatmen's Common, as reported
on Nasdaq for the twenty (20) business days immediately preceding the
fifth calendar day prior to the Closing Date (the "Boatmen's Average
Price").
(c) At the Effective Time, all of the shares of Company Common,
by virtue of the Mergers and without any action on the part of the
holders thereof, shall no longer be outstanding and shall be canceled
and retired and shall cease to exist, and each holder of any
certificate or certificates which immediately prior to the Effective
Time represented outstanding shares of Company Common (the
"Certificates") shall thereafter cease to have any rights with
respect to such shares, except the right of such holders to receive,
without interest, the Merger Consideration upon the surrender of such
Certificate or Certificates in accordance with Section 1.10 hereof.
(d) At the Effective Time, all of the shares of common stock,
par value $1.00, of Dalhart-Delaware ("Delaware Common"), by virtue
of the Mergers and without any action on the part of the holders
thereof, shall be converted into one hundred (100) shares of
Boatmen's-Texas common stock, and each holder of any certificate or
certificates which immediately prior to the Effective Time
represented outstanding shares of Delaware Common shall thereafter
cease to have any rights with respect to such shares.
(e) At the Effective Time, each share of Company Common and
Delaware Common, if any, held in the treasury of Company or Dalhart-
Delaware, respectively, or by any direct or indirect subsidiary of
Company or Dalhart-Delaware (other than shares held in trust accounts
for the benefit of others or in other fiduciary, nominee or similar
capacities) immediately prior to the Effective Time shall be
canceled.
(f) Each share of common stock, par value $1.00 per share, of
Boatmen's-Texas outstanding immediately prior to the Effective Time
shall remain outstanding unaffected by each of the Mergers.
A-2
<PAGE> 196
(g) If between the date hereof and the Effective Time a share of
Boatmen's Common shall be changed into a different number of shares
of Boatmen's Common or a different class of shares by reason of
reclassification, recapitalization, splitup, exchange of shares or
readjustment, or if a stock dividend thereon shall be declared with
a record date within such period, then the number of shares of
Boatmen's Common into which a share of Company Common will be
converted pursuant to subsection (a) above will be appropriately and
proportionately adjusted so that each shareholder of Company shall be
entitled to receive such fraction of a share or such number of shares
of Boatmen's Common as such shareholder would have received pursuant
to such reclassification, recapitalization, splitup, exchange of
shares or readjustment or as a result of such stock dividend had the
record date therefor been immediately following the Effective Time of
each of the Mergers.
(h) If holders of Company Common dissent from the Agreement and
Merger under the Texas Corporate Law, any issued and outstanding
shares of Company Common held by a dissenting holder shall not be
converted as described in this Section 1.05 but from and after the
Effective Time shall represent only the right to receive such
consideration as may be determined to be due to such dissenting
holder pursuant to the Texas Corporate Law; provided, however, that
each share of Company Common outstanding immediately prior to the
Effective Time and held by a dissenting holder who shall, after the
Effective Time, withdraw his demand for appraisal or lose his right
of appraisal shall have only such rights as are provided under the
Texas Corporate Law.
SECTION 1.06. THE CLOSING. The closing of each of the Mergers
------------ -----------
(the "Closing") shall take place at the main offices of Boatmen's, or
at such other location as the parties may agree, at 10:00 A.M.
Central Time on the Closing Date described in Section 1.07 of this
Agreement.
SECTION 1.07. CLOSING DATE. At Boatmen's election, the Closing
------------ ------------
shall take place on (i) the last business day of, or (ii) the first
business day of the month following, or (iii) the last business day
of the earliest month which is the second month of a calendar quarter
following, in each case, the month during which each of the
conditions in Sections 6.01(d) and 6.02(d) is satisfied or waived by
the appropriate party or on such other date after such satisfaction
or waiver as Company and Boatmen's may agree (the "Closing Date").
Each of the Mergers shall be effective upon the issuance of a
Certificate of Merger by the Secretary of State of the State of
Missouri (the "Effective Time" with respect to each such Merger),
which the parties shall use their best efforts to cause to occur on
the Closing Date.
SECTION 1.08. ESCROW. On the Closing Date, Boatmen's shall
------------ ------
issue in the name of and deliver to the escrow agent (the "Escrow
Agent") named in that certain Escrow Agreement to be executed on the
Closing Date among the Escrow Agent, Bank (as defined in Section 2.04
hereof) and the parties to this Agreement (the "Escrow Agreement"),
such number of shares of Boatmen's Common (the "Escrow Shares") as
equals the quotient of $929,550 divided by the Boatmen's Average
Price.
SECTION 1.09. CLOSING DELIVERIES.
------------ ------------------
(a) At the Closing, Company and/or Dalhart-Delaware, as may be
applicable, shall deliver to Boatmen's and Boatmen's-Texas:
(i) a certified copy of the Articles of Incorporation of
Company and each of its subsidiaries;
A-3
<PAGE> 197
(ii) a Certificate or Certificates signed by an appropriate
officer of each of Company and Dalhart-Delaware stating that,
with respect to Company or Dalhart-Delaware, as may be
applicable, (A) each of the representations and warranties
contained in Article Two is true and correct in all material
respects at the time of the Closing with the same force and
effect as if such representations and warranties had been made
at Closing, and (B) all of the conditions set forth in
Section 6.01(b) have been satisfied or waived as provided
therein;
(iii) a certified copy of the resolutions of each of
Company's and Dalhart-Delaware's Board of Directors and
respective shareholders, as required for valid approval of the
execution of this Agreement and the consummation of each of the
Mergers and the other transactions contemplated hereby;
(iv) Certificate of the Texas Secretary of State, dated a
recent date, stating that Company is in good standing;
(v) Certificate of the Delaware Secretary of State, dated
a recent date, stating that Dalhart-Delaware is in good standing;
(vi) the certificate or certificates representing all of the
outstanding shares of Delaware Common;
(vii) a legal opinion of counsel for Company, in form
reasonably acceptable to Boatmen's counsel, opining with respect
to the matters listed on Exhibit 1.09(a) hereto; and
(viii) the Escrow Agreement executed by Company, Dalhart-
Delaware, Bank and three shareholders of Company and/or Bank who
shall have been designated by Company and Bank to serve as the
"Shareholders' Committee" pursuant to the Escrow Agreement.
(b) At the Closing, Boatmen's shall deliver to Company:
(i) a Certificate signed by an appropriate officer of
Boatmen's and Boatmen's-Texas stating that (A) each of the
representations and warranties contained in Article Three is true
and correct in all material respects at the time of the Closing
with the same force and effect as if such representations and
warranties had been made at Closing and (B) all of the conditions
set forth in Section 6.02(b) and 6.02(d) (but only with respect
to approvals other than by the Company's shareholders) have been
satisfied;
(ii) a certified copy of the resolutions of Boatmen's
Executive Committee authorizing the execution of this Agreement
and the consummation of the transactions contemplated hereby;
(iii) a certified copy of the resolutions of Boatmen's-
Texas's Board of Directors and shareholder, as required for valid
approval of the execution of this Agreement and the consummation
of the transactions contemplated hereby;
(iv) a legal opinion of counsel for Boatmen's, in form
reasonably acceptable to Company's counsel, opining with respect
to the matters listed on Exhibit 1.09(b) hereto.
(v) the Escrow Agreement executed by Boatmen's.
A-4
<PAGE> 198
SECTION 1.10. EXCHANGE PROCEDURES; SURRENDER OF CERTIFICATES.
------------ ----------------------------------------------
(a) Boatmen's Trust Company, St. Louis, Missouri, shall act as
Exchange Agent in each of the Mergers (the "Exchange Agent").
(b) As soon as reasonably practicable, and in no event more than
ten (10) business days after the Effective Time, the Exchange Agent
shall mail to each record holder of any Certificate or Certificates
whose shares were converted into the right to receive the Merger
Consideration, a letter of transmittal (which shall specify that
delivery shall be effected, and risk of loss and title to the
Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent and shall be in such form and have
such other provisions as Boatmen's may reasonably specify) (each such
letter, the "Merger Letter of Transmittal") and instructions for use
in effecting the surrender of the Certificates in exchange for the
Merger Consideration less such holder's beneficial interest in the
Escrow Shares (the "Net Merger Consideration"). Upon surrender to
the Exchange Agent of a Certificate, together with a Merger Letter of
Transmittal duly executed and any other required documents, the
holder of such Certificate shall be entitled to receive in exchange
therefor solely the Net Merger Consideration. No interest on the Net
Merger Consideration issuable upon the surrender of the Certificates
shall be paid or accrued for the benefit of holders of Certificates.
If the Net Merger Consideration is to be issued to a person other
than a person in whose name a surrendered Certificate is registered,
it shall be a condition of issuance that the surrendered Certificate
shall be properly endorsed or otherwise in proper form for transfer
and that the person requesting such issuance shall pay to the
Exchange Agent any required transfer or other taxes or establish to
the satisfaction of the Exchange Agent that such tax has been paid or
is not applicable.
(c) At any time following six months after the Effective Time,
Boatmen's shall be entitled to terminate the Exchange Agent
relationship, and thereafter holders of Certificates shall be
entitled to look only to Boatmen's (subject to abandoned property,
escheat or other similar laws) with respect to the Net Merger
Consideration issuable upon surrender of their Certificates.
(d) No dividends that are otherwise payable on shares of
Boatmen's Common constituting the Net Merger Consideration shall be
paid to persons entitled to receive such shares of Boatmen's Common
until such persons surrender their Certificates. Upon such
surrender, there shall be paid to the person in whose name the shares
of Boatmen's Common shall be issued any dividends which shall have
become payable with respect to such shares of Boatmen's Common
(without interest and less the amount of taxes, if any, which may
have been imposed thereon), between the Effective Time and the time
of such surrender. Dividends payable on shares of Boatmen's Common
held pursuant to the Escrow Agreement shall be paid to the Escrow
Agent and distributed pursuant to the terms and provisions of the
Escrow Agreement.
ARTICLE TWO
-----------
REPRESENTATIONS OF COMPANY AND DALHART-DELAWARE
-----------------------------------------------
Company and Dalhart-Delaware, as applicable, hereby make the
following representations and warranties:
A-5
<PAGE> 199
SECTION 2.01. ORGANIZATION AND CAPITAL STOCK.
------------ ------------------------------
(a) Company is a corporation duly organized, validly existing
and in good standing under the laws of the State of Texas and has the
corporate power to own all of its property and assets, to incur all
of its liabilities and to carry on its business as now being
conducted.
(b) The authorized capital stock of Company consists of 200,000
shares of Company Common, of which, as of the date hereof, 100,000
shares are issued and outstanding. All of the issued and outstanding
shares of Company Common are duly and validly issued and outstanding
and are fully paid and non-assessable. None of the outstanding
shares of Company Common has been issued in violation of any
preemptive rights of the current or past stockholders of Company.
Except as disclosed in Section 2.01(b) of that certain confidential
writing delivered by Company to Boatmen's and executed by both
Company and Boatmen's concurrently with the delivery and execution of
this Agreement (the "Disclosure Schedule"), each Certificate
representing shares of Company Common issued by Company in
replacement of any Certificate theretofore issued by it which was
claimed by the record holder thereof to have been lost, stolen or
destroyed was issued by Company only upon receipt of an affidavit of
lost stock certificate and indemnity agreement of such shareholder
indemnifying Company against any claim that may be made against it on
account of the alleged loss, theft or destruction of any such
Certificate or the issuance of such replacement Certificate.
(c) Dalhart-Delaware is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and has the corporate power to own all of its property and assets, to
incur all of its liabilities and to carry on its business as now
being conducted.
(d) The authorized capital stock of Dalhart-Delaware consists of
1,000 shares of Delaware Common, of which, as of the date hereof,
1,000 shares are issued and outstanding and are owned by Company.
All of the issued and outstanding shares of Delaware Common are duly
and validly issued and outstanding and are fully paid and non-
assessable. None of the outstanding shares of Delaware Common has
been issued in violation of any preemptive rights of the current or
past shareholders of Dalhart-Delaware. Except as disclosed in
Section 2.01(d) of the Disclosure Schedule, each certificate
representing shares of Delaware Common issued by Dalhart-Delaware in
replacement of any certificate theretofore issued by it which was
claimed by the record holder thereof to have been lost, stolen or
destroyed was issued by Dalhart-Delaware only upon receipt of an
affidavit of lost stock certificate and indemnity agreement of such
shareholder indemnifying Dalhart-Delaware against any claim that may
be made against it on account of the alleged loss, theft or
destruction of any such certificate or the issuance of such
replacement certificate.
(e) Except as set forth in subsections 2.01(b) and 2.01(d),
there are no shares of capital stock or other equity securities of
Company or Dalhart-Delaware issued or outstanding and there are no
outstanding options, warrants, rights to subscribe for, calls, or
commitments of any character whatsoever relating to, or securities or
rights convertible into or exchangeable for, shares of the capital
stock of Company or Dalhart-Delaware or contracts, commitments,
understandings or arrangements by which either Company or Dalhart-
Delaware is or may be obligated to issue additional shares of its
capital stock or options, warrants or rights to purchase or acquire
any additional shares of its capital stock.
SECTION 2.02. AUTHORIZATION; NO DEFAULTS. Each of Company's and
------------ --------------------------
Dalhart-Delaware's Board of Directors has, by all appropriate action,
approved this Agreement and each of the Mergers and authorized the
execution hereof on its behalf by its duly authorized officers and
the performance by Company and Dalhart-Delaware of their respective
obligations hereunder. Nothing in the articles of incorporation or
A-6
<PAGE> 200
bylaws of either Company or Dalhart-Delaware, as amended, or any
other agreement, instrument, decree, proceeding, law or regulation
(except as specifically referred to in or contemplated by this
Agreement) by or to which it or any of their subsidiaries are bound
or subject would prohibit or inhibit Company and Dalhart-Delaware
from consummating this Agreement and each of the Mergers on the terms
and conditions herein contained. This Agreement has been duly and
validly executed and delivered by each of Company and Dalhart-
Delaware and constitutes a legal, valid and binding obligation of
each of Company and Dalhart-Delaware, enforceable against Company and
Dalhart-Delaware in accordance with its terms. Company and its
subsidiaries are neither in default under nor in violation of any
provision of their articles of incorporation, bylaws, or any
promissory note, indenture or any evidence of indebtedness or
security therefor, lease, contract, purchase or other commitment or
any other agreement which is material to Company and its subsidiaries
taken as a whole.
SECTION 2.03. SUBSIDIARIES. Each of Company's and/or Dalhart-
------------ ------------
Delaware's banking subsidiaries and other direct or indirect
subsidiaries, including Dalhart-Delaware (hereinafter referred to
collectively as the Company's "subsidiaries") the name and
jurisdiction of incorporation of which is disclosed in Section 2.03
of the Disclosure Schedule, is duly organized, validly existing and
in good standing under the laws of the jurisdiction of its incorpo-
ration and has the corporate power to own its respective properties
and assets, to incur its respective liabilities and to carry on its
respective business as now being conducted. The number of issued and
outstanding shares of capital stock of each such subsidiary is set
forth in Section 2.03 of the Disclosure Schedule, all of which
shares, except as otherwise there specified (by inclusion of a list
of the names, addresses and number of shares held by each such other
shareholder of a subsidiary) are owned by Company or Company's
subsidiaries, as the case may be, free and clear of all liens,
encumbrances, rights of first refusal, options or other restrictions
of any nature whatsoever. There are no options, warrants or rights
outstanding to acquire any capital stock of any of Company's
subsidiaries and no person or entity has any other right to purchase
or acquire any unissued shares of stock of any of Company's
subsidiaries, nor does any such subsidiary have any obligation of any
nature with respect to its unissued shares of stock. Except as may
be disclosed in Section 2.03 of the Disclosure Schedule, neither
Company nor any of Company's subsidiaries is a party to any
partnership or joint venture or owns an equity interest in any other
business or enterprise.
SECTION 2.04. FINANCIAL INFORMATION. The audited consolidated
------------ ---------------------
balance sheets of Company and its subsidiaries as of December 31,
1993 and 1992 and related consolidated income statements and
statements of changes in shareholders' equity and of cash flows for
the three years ended December 31, 1993, together with the notes
thereto, and the unaudited consolidated balance sheets of Company and
its subsidiaries as of March 31, 1994 and March 31, 1993 and the
related unaudited consolidated income statements and statements of
changes in shareholders' equity and cash flows for the three months
then ended, and the year-end and quarterly Reports of Condition and
Report of Income of Citizens State Bank of Dalhart (the "Bank") for
1993 and March 31, 1994, as filed with the Federal Deposit Insurance
Corporation ("FDIC") (together, the "Company Financial Statements"),
have been prepared in accordance with generally accepted accounting
principles applied on a consistent basis (except as may be disclosed
therein and except for regulatory reporting differences required by
the Bank's reports) and fairly present the consolidated financial
position and the consolidated results of operations, changes in
shareholders' equity and cash flows of the respective entity and its
respective consolidated subsidiaries as of the dates and for the
periods indicated (subject, in the case of interim financial
statements, to normal recurring year-end adjustments, none of which
will be material).
SECTION 2.05. ABSENCE OF CHANGES. Since December 31, 1993,
------------ ------------------
there has not been any material adverse change in the financial
condition, the results of operations or the business of Company and its
A-7
<PAGE> 201
subsidiaries taken as a whole, nor have there been any events or
transactions having such a material adverse effect which should be
disclosed in order to make the Company Financial Statements not
misleading. Since October 26, 1992, there has been no material
adverse change in the financial condition, the results of operations
or the business of the Bank except for any such changes as may be
disclosed in the Bank's Reports of Condition and Income filed with
the FDIC since such date and prior to the date hereof.
Notwithstanding the foregoing, any provision for loan losses taken by
Company and its subsidiaries pursuant to Section 4.06 hereof shall
not, in and of itself, be deemed to be a material adverse change in
the financial condition, the results of operations or the business or
prospects of Company and its subsidiaries taken as a whole.
SECTION 2.06. REGULATORY ENFORCEMENT MATTERS. Except as may be
------------ ------------------------------
disclosed in Section 2.06 of the Disclosure Schedule, neither Company
nor any of its subsidiaries is subject to, or has received any notice
or advice that it may become subject to, any order, agreement,
memorandum of understanding or other regulatory enforcement action or
proceeding with or by any federal or state agency charged with the
supervision or regulation of banks or bank holding companies or
engaged in the insurance of bank deposits or any other governmental
agency having supervisory or regulatory authority with respect to
Company or any of its subsidiaries.
SECTION 2.07. TAX MATTERS. Company and its subsidiaries have
------------ -----------
filed all federal, state and material local tax returns due in
respect of any of their businesses or properties in a timely fashion
and have paid or made provision for all amounts due shown on such
returns. All such returns fairly reflect the information required to
be presented therein. All provisions for accrued but unpaid taxes
contained in the Company Financial Statements were made in accordance
with generally accepted accounting principles and in the aggregate do
not materially fail to provide for potential tax liabilities.
SECTION 2.08. LITIGATION. Except as may be disclosed in
------------ ----------
Section 2.08 of the Disclosure Schedule, there is no litigation,
claim or other proceeding pending or, to the knowledge of Company,
threatened, against Company or any of its subsidiaries, or of which
the property of Company or any of its subsidiaries is or would be
subject.
SECTION 2.09. EMPLOYMENT AGREEMENTS. Except as may be disclosed
------------ ---------------------
in Section 2.09 of the Disclosure Schedule, neither Company nor any
of its subsidiaries is a party to or bound by any contract for the
employment, retention or engagement, or with respect to the
severance, of any officer, employee, agent, consultant or other
person or entity which, by its terms, is not terminable by Company or
such subsidiary on thirty (30) days written notice or less without
the payment of any amount by reason of such termination. A true,
accurate and complete copy of each written agreement disclosed in
Section 2.09 of the Disclosure Schedule and any and all amendments or
supplements thereto is included as an exhibit thereto.
SECTION 2.10. REPORTS. Except as may be disclosed in
------------ -------
Section 2.10 of the Disclosure Schedule, Company and each of its
subsidiaries has filed all reports and statements, together with any
amendments required to be made with respect thereto, that it was
required to file with (i) the Board of Governors of the Federal
Reserve System (the "Federal Reserve Board"), (ii) the FDIC,
(iii) the Finance Commission of the State of Texas and any other
state securities or banking authorities having jurisdiction, and
(iv) any other governmental authority with jurisdiction over Company
or any of its subsidiaries. As of their respective dates, each of
such reports and documents, including any financial statements,
exhibits and schedules thereto, complied in all material respects
with the relevant statutes, rules and regulations enforced or
promulgated by the regulatory authority with which they were filed,
and did not contain any untrue statement of a
A-8
<PAGE> 202
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading.
SECTION 2.11. LOAN PORTFOLIO. Except as may be disclosed in
------------ --------------
Section 2.11 of the Disclosure Schedule, (i) all loans and discounts
shown on the Company Financial Statements at December 31, 1993 or
which were entered into after December 31, 1993, but before the
Closing Date were and will be made in all material respects for good,
valuable and adequate consideration in the ordinary course of the
business of Company and its subsidiaries, in accordance in all
material respects with sound banking practices, and are not subject
to any material known defenses, setoffs or counterclaims, including
without limitation any such as are afforded by usury or truth in
lending laws, except as may be provided by bankruptcy, insolvency or
similar laws or by general principles of equity; (ii) the notes or
other evidences of indebtedness evidencing such loans and all forms
of pledges, mortgages and other collateral documents and security
agreements are and will be, in all material respects, enforceable,
valid, true and genuine and what they purport to be; and
(iii) Company and its subsidiaries have complied and will prior to
the Closing Date comply with all laws and regulations relating to
such loans, or to the extent there has not been such compliance, such
failure to comply will not materially interfere with the collection
of any such loan.
SECTION 2.12. EMPLOYEE MATTERS AND ERISA.
------------ --------------------------
(a) Except as may be disclosed in Section 2.12(a) of the
Disclosure Schedule, neither Company nor any of its subsidiaries has
entered into any collective bargaining agreement with any labor
organization with respect to any group of employees of Company or any
of its subsidiaries and to the knowledge of Company there is no
present effort nor existing proposal to attempt to unionize any group
of employees of Company or any of its subsidiaries.
(b) Except as may be disclosed in Section 2.12(b) of the
Disclosure Schedule, (i) Company and its subsidiaries are and have
been in material compliance with all applicable laws respecting
employment and employment practices, terms and conditions of
employment and wages and hours, including, without limitation, any
such laws respecting employment discrimination and occupational
safety and health requirements, and neither Company nor any of its
subsidiaries is engaged in any unfair labor practice; (ii) there is
no material unfair labor practice complaint against Company or any
subsidiary pending or, to the knowledge of Company, threatened before
the National Labor Relations Board; (iii) there is no labor dispute,
strike, slowdown or stoppage actually pending or, to the knowledge of
Company, threatened against or directly affecting Company or any
subsidiary; and (iv) neither Company nor any subsidiary has
experienced any material work stoppage or other material labor
difficulty during the past five years.
(c) Except as may be disclosed in Section 2.12(c) of the
Disclosure Schedule, neither Company nor any subsidiary maintains,
contributes to or participates in or has any liability under any
employee benefit plans, as defined in Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or any
nonqualified employee benefit plans or deferred compensation, bonus,
stock or incentive plans, or other employee benefit or fringe benefit
programs for the benefit of former or current employees of Company or
any subsidiary (the "Employee Plans"). To the knowledge of Company,
no present or former employee of Company or any subsidiary has been
charged with breaching nor has breached a fiduciary duty under any of
the Employee Plans. Neither Company nor any of its subsidiaries
participates in, nor has it in the past five years participated in,
nor has it any present or future obligation or liability under, any
multiemployer plan (as defined at Section 3(37) of ERISA). Except as
may be separately disclosed in Section 2.12(c) of the Disclosure
Schedule, neither Company nor any subsidiary maintains,
A-9
<PAGE> 203
contributes to, or participates in, any plan that provides health, major
medical, disability or life insurance benefits to former employees of
Company or any subsidiary.
(d) Neither Company nor any of its subsidiaries maintain, nor
have any of them maintained for the past ten years, any Employee
Plans subject to Title IV of ERISA or Section 412 of the Code. No
reportable event (as defined in Section 4043 of ERISA) has occurred
with respect to any Employee Plans as to which a notice would be
required to be filed with the Pension Benefit Guaranty Corporation.
No claim is pending, and Company has not received notice of any
threatened or imminent claim with respect to any Employee Plan (other
than a routine claim for benefits for which plan administrative
review procedures have not been exhausted) for which Company or any
of its subsidiaries would be liable after December 31, 1993, except
as will be reflected on the Company Financial Statements. After
December 31, 1993, Company and its subsidiaries will not have any
liabilities for excise taxes under Sections 4971, 4975, 4976, 4977,
4979 or 4980B of the Internal Revenue Code of 1986, as amended (the
"Code") or for a fine under Section 502 of ERISA with respect to any
Employee Plan. All Employee Plans have in all material respects been
operated, administered and maintained in accordance with the terms
thereof and in compliance with the requirements of all applicable
laws, including, without limitation, ERISA and the Code.
SECTION 2.13. TITLE TO PROPERTIES; INSURANCE. Company and its
------------ ------------------------------
subsidiaries have marketable title, insurable at standard rates, free
and clear of all liens, charges and encumbrances (except taxes which
are a lien but not yet payable and liens, charges or encumbrances
reflected in the Company Financial Statements and easements, rights-
of-way, and other restrictions which are not material and further
excepting in the case of Other Real Estate Owned ("O.R.E.O."), as
such real estate is internally classified on the books of Company or
its subsidiaries, rights of redemption under applicable law) to all
of their real properties. All leasehold interests for real property
and any material personal property used by Company and its
subsidiaries in their businesses are held pursuant to lease
agreements which are valid and enforceable in accordance with their
terms. All such properties comply in all material respects with all
applicable private agreements, zoning requirements and other
governmental laws and regulations relating thereto and there are no
condemnation proceedings pending or, to the knowledge of Company,
threatened with respect to such properties. Company and its
subsidiaries have valid title or other ownership rights under
licenses to all material intangible personal or intellectual property
used by Company or its subsidiaries in their business, free and clear
of any claim, defense or right of any other person or entity which is
material to such property, subject only to rights of the licensors
pursuant to applicable license agreements, which rights do not
materially adversely interfere with the use of such property. All
material insurable properties owned or held by Company and its
subsidiaries are insured by financially sound and reputable insurers
in such amounts and against fire and other risks insured against by
extended coverage and public liability insurance, as is customary
with bank holding companies of similar size.
SECTION 2.14. ENVIRONMENTAL MATTERS. As used in this Agreement,
------------ ---------------------
"Environmental Laws" means all local, state and federal
environmental, health and safety laws and regulations in all
jurisdictions in which Company and its subsidiaries have done
business or owned, leased or operated property, including, without
limitation, the Federal Resource Conservation and Recovery Act, the
Federal Comprehensive Environmental Response, Compensation and
Liability Act, the Federal Clean Water Act, the Federal Clean Air
Act, and the Federal Occupational Safety and Health Act.
Except as may be disclosed in Section 2.14 of the Disclosure
Schedule, neither the conduct nor operation of Company or its
subsidiaries nor any condition of any property presently or
previously owned, leased or operated by any of them violates or
violated Environmental Laws in any respect material to the business
of Company and its subsidiaries and no condition or event has
occurred with respect to any of them
A-10
<PAGE> 204
or any such property that, with notice or the passage of time, or both,
would constitute a violation material to the business of Company and its
subsidiaries of Environmental Laws or obligate (or potentially obligate)
Company or its subsidiaries to remedy, stabilize, neutralize or otherwise
alter the environmental condition of any such property where the aggregate
cost of such actions would be material to Company and its
subsidiaries. Except as may be disclosed in Section 2.14 of the
Disclosure Schedule, neither Company nor any of its subsidiaries has
received any notice from any person or entity that Company or its
subsidiaries or the operation or condition of any property ever
owned, leased or operated by any of them are or were in violation of
any Environmental Laws or that Company or its subsidiaries are
responsible (or potentially responsible) for remedying, or the
cleanup of, any pollutants, contaminants, or hazardous or toxic
wastes, substances or materials at, on or beneath any such property.
SECTION 2.15. COMPLIANCE WITH LAW. Company and its subsidiaries
------------ -------------------
have all licenses, franchises, permits and other governmental
authorizations that are legally required to enable them to conduct
their respective businesses in all material respects and are in
compliance in all material respects with all applicable laws and
regulations.
SECTION 2.16. UNDISCLOSED LIABILITIES. Company and its
------------ -----------------------
subsidiaries do not have any material liability, whether known or
unknown, whether asserted or unasserted, whether absolute or
contingent, whether accrued or unaccrued, whether liquidated or
unliquidated, and whether due or to become due (and there is no past
or present fact, situation, circumstance, condition or other basis
for any present or future action, suit or proceeding, hearing,
charge, complaint, claim or demand against Company or its
subsidiaries giving rise to any such liability), except (i) for
liabilities set forth in the Company Financial Statements, and (ii)
as may be disclosed in Section 2.16 of the Disclosure Schedule.
SECTION 2.17. BROKERAGE. There are no existing claims or
------------ ---------
agreements for brokerage commissions, finders' fees, or similar
compensation in connection with the transactions contemplated by this
Agreement payable by Company or its subsidiaries.
SECTION 2.18. INSURANCE POLICY ON LIFE OF CATHERINE D. KOEHLER.
------------ ------------------------------------------------
Company is the owner and sole beneficiary of a whole-life insurance
policy issued by Guardian Life Insurance Company (policy number
3710687) in the principal amount of One Million Dollars ($1,000,000)
on the life of Catherine D. Koehler (the "Policy"). Company has paid
all premiums with respect to the Policy and will continue to pay all
premiums through the Effective Time, and the Policy is in full force
and effect in accordance with its terms and provisions and is free
and clear of any liens or claims with respect to the cash surrender
value and death benefits payable thereunder, except as provided in
that certain Stock Redemption Agreement dated January 8, 1993 between
Company and Catherine D. Koehler (the "Redemption Agreement"), which
Redemption Agreement is being modified as provided in Section 2.19
hereof.
SECTION 2.19. STOCK REDEMPTION TERMINATION AGREEMENT. Company
------------ --------------------------------------
and Catherine D. Koehler have entered into a Stock Redemption
Termination Agreement of even date herewith in substantially the form
attached hereto as Exhibit 2.19 which is in full force and effect and
enforceable in accordance with its terms and pursuant to which, on
the Closing Date, (i) that certain Redemption Agreement, dated
January 8, 1993, between Company and Catherine D. Koehler, a copy of
which is attached as an exhibit to Exhibit 2.19 shall be terminated,
and (ii) Catherine D. Koehler, if she survives the Closing Date,
shall purchase the Policy from Company at the cash surrender value of
the Policy at date of purchase.
SECTION 2.20. STATEMENTS TRUE AND CORRECT. None of the
------------ ---------------------------
information supplied or to be supplied by Company or its subsidiaries
for inclusion in (i) the Registration Statement (as defined in
Section 4.07),
A-11
<PAGE> 205
(ii) the Proxy Statement/Prospectus (as defined in Section 4.04) and (iii)
any other documents to be filed with the S.E.C. or any banking or other
regulatory authority in connection with the transactions contemplated
hereby, will, at the respective times such documents are filed, and, in
the case of the Registration Statement, when it becomes effective, and
with respect to the Proxy Statement/Prospectus, when first mailed to the
stockholders of the Company and the Bank, be false or misleading with
respect to any material fact, or omit to state any material fact necessary
in order to make the statements therein not misleading, or, in the case of
the Proxy Statement/Prospectus or any amendment thereof or supplement
thereto, at the time of the Stockholders' Meeting (as defined in
Section 4.03), be false or misleading with respect to any material
fact, or omit to state any material fact necessary to correct any
statement in any earlier communication with respect to the
solicitation of any proxy for the Stockholders' Meeting. All
documents that Company is responsible for filing with the S.E.C. or
any other regulatory authority in connection with the transactions
contemplated hereby will comply as to form in all material respects
with the provisions of applicable law and the applicable rules and
regulations thereunder.
ARTICLE THREE
-------------
REPRESENTATIONS OF BOATMEN'S AND BOATMEN'S-TEXAS
------------------------------------------------
Boatmen's and Boatmen's-Texas hereby make the following
representations and warranties:
SECTION 3.01. ORGANIZATION AND CAPITAL STOCK.
------------ ------------------------------
(a) Boatmen's is a corporation duly incorporated, validly
existing, and in good standing under the laws of the State of
Missouri with full corporate power and authority to carry on its
business as it is now being conducted. Boatmen's-Texas is a
corporation duly incorporated, validly existing, and in good standing
under the laws of the State of Missouri with full corporate power and
authority to carry on its business as it is now being conducted.
(b) The authorized capital stock of Boatmen's consists of
(i) 150,000,000 shares of Boatmen's Common, of which, as of March 8,
1994, 104,197,976 shares were issued and outstanding, and
(ii) 10,300,000 Cumulative Preferred Shares, no par value per share,
of which 35,045 shares are designated "7% Cumulative Redeemable
Preferred Stock, Series B", $100.00 stated value per share (the
"Boatmen's Series B Preferred Stock") and 1,250,000 shares are
designated "Junior Participating Preferred Stock, Series C", no par
value per share (the "Boatmen's Series C Preferred Stock"). No
shares of the Boatmen's Series C Preferred Stock are issued and
outstanding and 11,551 shares of the Boatmen's Series B Preferred
Stock were issued and outstanding as of March 8, 1994. All of the
issued and outstanding shares of Boatmen's Common and Boatmen's
Series B Preferred Stock are duly and validly issued and outstanding
and are fully paid and non-assessable. None of the outstanding
shares of Boatmen's Common has been issued in violation of any
preemptive rights of the current or past stockholders of Boatmen's.
As of April 30, 1994, Boatmen's had outstanding options and other
rights to acquire not more than 3,753,625 shares of Boatmen's Common
and no shares of the Boatmen's Series B Preferred Stock or the
Boatmen's Series C Preferred Stock.
(c) Boatmen's-Texas has authorized capital of one hundred
thousand (100,000) shares of common stock, par value one dollar
($1.00) per share (the "Boatmen's-Texas Common"). As of the date
hereof, 2,000 shares of Boatmen's-Texas Common are issued and
outstanding, fully paid and non-assessable and owned by Boatmen's.
A-12
<PAGE> 206
(d) The shares of Boatmen's Common that are to be issued to the
stockholders of Company pursuant to the Merger have been duly
authorized and, when so issued in accordance with the terms of this
Agreement, will be validly issued and outstanding, fully paid and
nonassessable, with no personal liability attaching to the ownership
thereof.
SECTION 3.02. AUTHORIZATION. The Executive Committee of
------------ -------------
Boatmen's and the Board of Directors of Boatmen's-Texas have, by all
appropriate action, approved this Agreement and each of the Mergers
and authorized the execution hereof on their behalf by their
respective duly authorized officers and the performance by such
respective entity of their obligations hereunder. Nothing in the
articles of incorporation or bylaws of Boatmen's or Boatmen's-Texas,
as amended, or any other agreement, instrument, decree, proceeding,
law or regulation (except as specifically referred to in or
contemplated by this Agreement) by or to which either of them or any
of their subsidiaries are bound or subject would prohibit or inhibit
Boatmen's or Boatmen's-Texas from entering into and consummating this
Agreement and each of the Mergers on the terms and conditions herein
contained. This Agreement has been duly and validly executed and
delivered by Boatmen's and Boatmen's-Texas and constitutes a legal,
valid and binding obligation of Boatmen's and Boatmen's-Texas,
enforceable against Boatmen's and Boatmen's-Texas in accordance with
its terms and no other corporate acts or proceedings are required to
be taken by Boatmen's or Boatmen's-Texas to authorize the execution,
delivery and performance of this Agreement. Except for the requisite
approvals of the Federal Reserve Board and the Finance Commission of
the State of Texas, no notice to, filing with, authorization by, or
consent or approval of, any federal or state regulatory authority is
necessary for the execution and delivery of this Agreement or
consummation of each of the Mergers by Boatmen's or Boatmen's-Texas.
SECTION 3.03. SUBSIDIARIES. Each of Boatmen's significant
------------ ------------
subsidiaries (as such term is defined under S.E.C. regulations) and
Boatmen's-Texas is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its incorporation and
has the corporate power to own its respective properties and assets,
to incur its respective liabilities and to carry on its respective
business as now being conducted.
SECTION 3.04. FINANCIAL INFORMATION. The consolidated balance
------------ ---------------------
sheets of Boatmen's and its subsidiaries as of December 31, 1993 and
1994 and related consolidated statements of income, changes in
stockholders' equity and cash flows for the three years ended
December 31, 1993, together with the notes thereto, included in
Boatmen's 10-K for the year ended 1993, as currently on file with the
S.E.C. (the "Boatmen's Financial Statements"), have been prepared in
accordance with generally accepted accounting principles applied on
a consistent basis (except as disclosed therein) and fairly present
the consolidated financial position and the consolidated results of
operations, changes in stockholders' equity and cash flows of
Boatmen's and its consolidated subsidiaries as of the dates and for
the periods indicated (subject, in the case of interim financial
statements, to normal recurring year-end adjustments, none of which
will be material).
SECTION 3.05. ABSENCE OF CHANGES. Since December 31, 1993,
------------ ------------------
there has not been any material adverse change in the financial
condition, the results of operations or the business of Boatmen's and
its subsidiaries taken as a whole, nor have there been any events or
transactions having such a material adverse effect which should be
disclosed in order to make the Boatmen's Financial Statements not
misleading.
SECTION 3.06. LITIGATION. There is no litigation, claim or
------------ ----------
other proceeding pending or, to the knowledge of Boatmen's,
threatened, against Boatmen's or any of its subsidiaries, or of which
the property
A-13
<PAGE> 207
of Boatmen's or any of its subsidiaries is or would be subject which if
adversely determined would have a material adverse effect on the business
of Boatmen's and its subsidiaries taken as a whole.
SECTION 3.07. REPORTS. Boatmen's and each of its significant
------------ -------
subsidiaries has filed all reports and statements, together with any
amendments required to be made with respect thereto, that it was
required to file with (i) the S.E.C., (ii) the Federal Reserve Board,
(iii) the O.C.C., (iv) the Federal Deposit Insurance Corporation,
(v) any state securities or banking authorities having jurisdiction,
(vi) Nasdaq and (vii) any other governmental authority with
jurisdiction over Boatmen's or any of its significant subsidiaries.
As of their respective dates, each of such reports and documents, as
amended, including the financial statements, exhibits and schedules
thereto, complied in all material respects with the relevant
statutes, rules and regulations enforced or promulgated by the
regulatory authority with which they were filed, and did not contain
any untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they
were made, not misleading.
SECTION 3.08. COMPLIANCE WITH LAW. Boatmen's and its
------------ -------------------
significant subsidiaries have all licenses, franchises, permits and
other governmental authorizations that are legally required to enable
them to conduct their respective businesses in all material respects
and are in compliance in all material respects with all applicable
laws and regulations.
SECTION 3.09. STATEMENTS TRUE AND CORRECT. None of the
------------ ---------------------------
information supplied or to be supplied by Boatmen's or Boatmen's-
Texas for inclusion in (i) the Registration Statement (as defined
below), (ii) the Proxy Statement/Prospectus (as defined below) and
(iii) any other documents to be filed with the S.E.C. or any banking
or other regulatory authority in connection with the transactions
contemplated hereby, will, at the respective times such documents are
filed, and, in the case of the Registration Statement, when it
becomes effective, and with respect to the Proxy Statement/
Prospectus, when first mailed to the stockholders of Company, be
false or misleading with respect to any material fact, or omit to
state any material fact necessary in order to make the statements
therein not misleading, or, in the case of the Proxy Statement/
Prospectus or any amendment thereof or supplement thereto, at the
time of the Stockholders' Meeting, be false or misleading with
respect to any material fact, or omit to state any material fact
necessary to correct any statement in any earlier communication with
respect to the solicitation of any proxy for the Stockholders'
Meeting. All documents that Boatmen's is responsible for filing with
the S.E.C. or any other regulatory authority in connection with the
transactions contemplated hereby will comply as to form in all
material respects with the provisions of applicable law and any rules
and regulations thereunder.
ARTICLE FOUR
------------
AGREEMENTS OF COMPANY
---------------------
SECTION 4.01. BUSINESS IN ORDINARY COURSE.
------------ ---------------------------
(a) Company shall not declare or pay any dividend or make any
other distribution to shareholders, whether in cash, stock or other
property, after the date of this Agreement.
(b) Company shall, and shall cause each of its subsidiaries to,
continue to carry on after the date hereof its respective business
and the discharge or incurrence of obligations and liabilities, only
in the usual, regular and ordinary course of business, as heretofore
conducted, and by way of amplification and not
A-14
<PAGE> 208
limitation, Company and each of its subsidiaries will not, without the
prior written consent of Boatmen's (which shall not be unreasonably
withheld):
(i) issue any Company Common or Delaware Common or other
capital stock or any options, warrants, or other rights to
subscribe for or purchase Company Common or Delaware Common or
any other capital stock or any securities convertible into or
exchangeable for any capital stock; or
(ii) directly or indirectly redeem, purchase or otherwise
acquire any Company Common or any other capital stock of Company
or its subsidiaries; or
(iii) effect a reclassification, recapitalization, splitup,
exchange of shares, readjustment or other similar change in or
to any capital stock or otherwise reorganize or recapitalize; or
(iv) change its certificate or articles of incorporation or
association, as the case may be, or bylaws; or
(v) except as disclosed in Section 4.01 of the Disclosure
Schedule, grant any increase (other than ordinary and normal
increases consistent with past practices) in the compensation
payable or to become payable to officers or salaried employees,
grant any stock options or, except as required by law, adopt or
make any change in any bonus, insurance, pension, or other
Employee Plan, agreement, payment or arrangement made to, for or
with any of such officers or employees; or
(vi) borrow or agree to borrow any amount of funds except
in the ordinary course of business, or directly or indirectly
guarantee or agree to guarantee any obligations of others; or
(vii) make or commit to make any new loan or letter of credit
or any new or additional discretionary advance under any existing
line of credit, in principal amounts in excess of $2,000,000 or
that would increase the aggregate credit outstanding to any one
borrower (or group of affiliated borrowers) to more than
$2,000,000 (excluding for this purpose any accrued interest or
overdrafts), without the prior written consent of Boatmen's,
acting through its Executive Vice President-Loan Administration
or such other designee as Boatmen's may give notice of to
Company; or
(viii) purchase or otherwise acquire any investment security
for its own account having an average remaining life to maturity
greater than five years or any asset-backed securities other than
those issued or guaranteed by the Government National Mortgage
Association, the Federal National Mortgage Association or the
Federal Home Loan Mortgage Corporation; or
(ix) increase or decrease the rate of interest paid on time
deposits, or on certificates of deposit, except in a manner and
pursuant to policies consistent with Company's past practices;
or
(x) enter into any agreement, contract or commitment out
of the ordinary course of business or having a term in excess of
three (3) months other than letters of credit, loan agreements,
deposit agreements, and other lending, credit and deposit
agreements and documents made in the ordinary course of business;
or
(xi) except in the ordinary course of business, place on any
of its assets or properties any mortgage, pledge, lien, charge,
or other encumbrance; or
A-15
<PAGE> 209
(xii) except in the ordinary course of business, cancel or
accelerate any material indebtedness owing to Company or its
subsidiaries or any claims which Company or its subsidiaries may
possess or waive any material rights of substantial value; or
(xiii) sell or otherwise dispose of any real property or any
material amount of any tangible or intangible personal property
other than properties acquired in foreclosure or otherwise in the
ordinary collection of indebtedness to Company and its
subsidiaries; or
(xiv) foreclose upon or otherwise take title to or possession
or control of any real property without first obtaining a phase
one environmental report thereon which indicates that the
property is free of pollutants, contaminants or hazardous or
toxic waste materials; provided, however, that Company and its
subsidiaries shall not be required to obtain such a report with
respect to single family, non-agricultural residential property
of one acre or less to be foreclosed upon unless it has reason
to believe that such property might contain any such waste
materials or otherwise might be contaminated; or
(xv) commit any act or fail to do any act which will cause
a breach of any agreement, contract or commitment and which will
have a material adverse effect on Company's and its subsidiaries'
business, financial condition, or earnings;
(xvi) violate any law, statute, rule, governmental
regulation, or order, which violation might have a material
adverse effect on Company's and its subsidiaries' business,
financial condition, or earnings; or
(xvii) purchase any real or personal property or make any
other capital expenditure where the amount paid or committed
therefor is in excess of $250,000.
(c) Company and its subsidiaries shall not, without the prior
written consent of Boatmen's, engage in any transaction or take any
action that would render untrue in any material respect any of the
representations and warranties of Company and Dalhart-Delaware
contained in Article Two hereof, if such representations and
warranties were given as of the date of such transaction or action.
(d) Company shall promptly notify Boatmen's in writing of the
occurrence of any matter or event known to and directly involving
Company, which would not include any changes in conditions that
affect the banking industry generally, that is materially adverse to
the business, operations, properties, assets, or condition (financial
or otherwise) of Company and its subsidiaries taken as a whole.
(e) Company shall not, on or before the earlier of the Closing
Date or the date of termination of this Agreement, solicit or
encourage, or, subject to the fiduciary duties of its directors as
advised by counsel, hold discussions or negotiations with or provide
any information to, any person in connection with, any proposal from
any person for the acquisition of all or any substantial portion of
the business, assets, shares of Company Common or other securities of
Company and its subsidiaries. Company shall promptly advise
Boatmen's of its receipt of any such proposal or inquiry concerning
any possible such proposal, and the substance of such proposal or
inquiry.
SECTION 4.02. BREACHES. Company shall, in the event it has
------------ --------
knowledge of the occurrence, or impending or threatened occurrence,
of any event or condition which would cause or constitute a breach
(or would have caused or constituted a breach had such event occurred
or been known prior to the date hereof)
A-16
<PAGE> 210
of any of its representations or agreements contained or referred to
herein, give prompt written notice thereof to Boatmen's and use its best
efforts to prevent or promptly remedy the same.
SECTION 4.03. SUBSIDIARY BANK MERGER. Company and/or Dalhart-
------------ ----------------------
Delaware shall cause Bank to enter into the form of Subsidiary Bank
Merger Agreement, attached hereto as Exhibit 4.03, with Boatmen's
First National Bank of Amarillo ("First Amarillo," which is a wholly
owned subsidiary of Boatmen's-Texas) and take all other actions
(including voting its shares of Bank in favor of the Subsidiary Bank
Merger Agreement) and cooperate with Boatmen's, Boatmen's-Texas and
First Amarillo in causing such merger (the "Subsidiary Bank Merger")
to be effected.
SECTION 4.04. SUBMISSION TO SHAREHOLDERS. Company and Dalhart-
------------ --------------------------
Delaware shall cause to be duly called and held, on a date mutually
selected by Boatmen's and Company, a special meeting of the
shareholders of Company (the "Stockholders' Meeting"), a special
meeting of the shareholders of Dalhart-Delaware, and a special
meeting of the shareholders of Bank ("Bank Stockholders' Meeting")
for submission of this Agreement and each of the Mergers and the
Subsidiary Bank Merger Agreement and Subsidiary Bank Merger,
respectively, for approval of such shareholders as required by law.
In connection with the Stockholders' Meeting and Bank Stockholders'
Meeting, (i) Company shall cooperate and assist Boatmen's in
preparing and filing a Proxy Statement/Prospectus (the "Proxy
Statement/Prospectus") with the S.E.C. and Company and Bank shall
mail it to its respective stockholders, (ii) Company shall furnish
Boatmen's all information concerning itself, Dalhart-Delaware and
Bank that Boatmen's may reasonably request in connection with such
Proxy Statement/Prospectus, and (iii) the Board of Directors of each
of Company, Dalhart-Delaware and Bank shall (subject to compliance
with their fiduciary duties as advised by counsel) recommend to its
respective stockholders the approval of this Agreement and each of
the Mergers and the Subsidiary Bank Merger Agreement and Subsidiary
Bank Merger, as the case may be, and use their best efforts to obtain
such respective stockholder approval.
SECTION 4.05. CONSENTS TO CONTRACTS AND LEASES. Company shall
------------ --------------------------------
use its best efforts to obtain all necessary consents with respect to
all interests of Company and its subsidiaries in any material leases,
licenses, contracts, instruments and rights which require the consent
of another person for their transfer or assumption pursuant to the
Merger, if any.
SECTION 4.06. CONFORMING ACCOUNTING AND RESERVE POLICIES;
------------ -------------------------------------------
RESTRUCTURING EXPENSES.
- ----------------------
(a) Notwithstanding that the Company believes that it and its
subsidiaries have established all reserves and taken all provisions
for possible loan losses required by generally accepted accounting
principles and applicable laws, rules and regulations, the Company
recognizes that Boatmen's may have adopted different loan, accrual
and reserve policies (including loan classifications and levels of
reserves for possible loan losses). From and after the date of this
Agreement to the Effective Time, the Company and Boatmen's shall
consult and cooperate with each other with respect to conforming, as
specified in a written notice from Boatmen's to the Company, based
upon such consultation and as hereinafter provided, the loan, accrual
and reserve policies of Company and its subsidiaries to those
policies of Boatmen's.
(b) In addition, from and after the date of this Agreement to
the Effective Time, the Company and Boatmen's shall consult and
cooperate with each other with respect to determining, as specified
in a written notice from Boatmen's to the Company, based upon such
consultation and as hereinafter provided, appropriate accruals,
reserves and charges to establish and take in respect of excess
equipment write-off or write-down of various assets and other
appropriate charges and accounting adjustments taking into account
the parties' business plans following the Mergers.
A-17
<PAGE> 211
(c) The Company and Boatmen's shall consult and cooperate with
each other with respect to determining, as specified in a written
notice from Boatmen's to the Company, based upon such consultation
and as hereinafter provided, the amount and the timing for
recognizing for financial accounting purposes the expenses of the
Merger and the restructuring charges related to or to be incurred in
connection with the Mergers.
(d) At the request of Boatmen's, the Company shall establish and
take such reserves and accruals as Boatmen's shall request to conform
the Company's loan, accrual and reserve policies to Boatmen's
policies, shall establish and take such accruals, reserves and
charges in order to implement such policies in respect of excess
facilities and equipment capacity, severance costs, litigation
matters, write-off or write-down of various assets and other
appropriate accounting adjustments, and to recognize for financial
accounting purposes such expenses of the Mergers and restructuring
charges related to or to be incurred in connection with the Mergers,
in each case at such times as are mutually agreeable to Boatmen's and
Company; provided, however, that the Company shall not be required to
take any such action that is not consistent with generally accepted
accounting principles.
(e) No accrual or other adjustment made by Company pursuant to
the provisions of this Section 4.06 shall constitute an
acknowledgment by Company or create any implication, for any purpose,
that such accrual or adjustment was necessary for any purpose other
than to comply with the provisions of this Section 4.06.
SECTION 4.07. CONSUMMATION OF AGREEMENT. Each of Company and
------------ -------------------------
Dalhart-Delaware shall use its best efforts to perform and fulfill
all conditions and obligations on its part to be performed or
fulfilled under this Agreement and to effect each of the Mergers in
accordance with the terms and provisions hereof. Company and
Dalhart-Delaware shall furnish to Boatmen's in a timely manner all
information, data and documents in the possession of Company and
Dalhart-Delaware requested by Boatmen's as may be required to obtain
any necessary regulatory or other approvals of the Merger or to file
with the S.E.C. a registration statement on Form S-4 (the
"Registration Statement") relating to the shares of Boatmen's Common
which may be issued to the shareholders of Company pursuant to the
Merger and this Agreement and shall otherwise cooperate fully with
Boatmen's to carry out the purpose and intent of this Agreement.
SECTION 4.08. ENVIRONMENTAL REPORTS. Company shall provide to
------------ ---------------------
Boatmen's, as soon as reasonably practical, but not later than 45
days after the date hereof, a report of a phase one environmental
investigation on all real property owned, leased or operated by
Company or its subsidiaries as of the date hereof (other than space
in retail and similar establishments leased by the Company for
automatic teller machines) and within ten days after the acquisition
or lease of any real property acquired or leased by Company or its
subsidiaries after the date hereof (other than space in retail and
similar establishments leased or operated by the Company for
automatic teller machines), except as otherwise provided in
Section 4.01(b)(xiv). If required by the phase one investigation in
Boatmen's reasonable opinion, Company shall provide to Boatmen's a
report of a phase two investigation on properties requiring such
additional study. Boatmen's shall have 15 business days from the
receipt of any such phase two investigation report to notify Company
of any objection to the contents of such report. Should the cost of
taking all remedial and corrective actions and measures (i) required
by applicable law, or (ii) recommended or suggested by such report or
reports or prudent in light of serious life, health or safety
concerns, in the aggregate, exceed the sum of Four Hundred Thousand
Dollars ($400,000) as reasonably estimated by an environmental expert
retained for such purpose by Boatmen's and reasonably acceptable to
Company, or if the cost of such actions and measures cannot be so
reasonably estimated by such expert to be $400,000 or less with any
reasonable degree of certainty, then Boatmen's shall have the right
pursuant to Section 7.03 hereof, for a period of 10 business days
following
A-18
<PAGE> 212
receipt of such estimate or indication that the cost of such actions and
measures can not be so reasonably estimated, to terminate this Agreement,
which shall be Boatmen's sole remedy in such event.
SECTION 4.09. RESTRICTION ON RESALES. Company shall obtain and
------------ ----------------------
deliver to Boatmen's, at least 31 days prior to the Closing Date, the
signed agreement, in the form of Exhibit 4.09 hereto, of each person
who may reasonably be deemed an "affiliate" of Company or Bank within
the meaning of such term as used in Rule 145 under the Securities Act
of 1933, as amended (the "Securities Act"), regarding (i) compliance
with the provisions of such Rule 145, and (ii) compliance with the
requirements of Accounting Principles Board Opinion No. 16 regarding
the disposition of shares of Company Common or Boatmen's Common (or
reduction of risk with respect thereto) until such time as financial
results covering at least 30 days of post-Merger combined operations
have been published.
SECTION 4.10. ACCESS TO INFORMATION. Company shall permit
------------ ---------------------
Boatmen's reasonable access in a manner which will avoid undue
disruption or interference with Company's normal operations to its
properties and shall disclose and make available to Boatmen's all
books, documents, papers and records relating to its assets, stock
ownership, properties, operations, obligations and liabilities,
including, but not limited to, all books of account (including the
general ledger), tax records, minute books of directors' and
stockholders' meetings, organizational documents, material contracts
and agreements, loan files, filings with any regulatory authority,
accountants' workpapers (if available and subject to the respective
independent accountants' consent), litigation files, plans affecting
employees, and any other business activities or prospects in which
Boatmen's may have a reasonable and legitimate interest in
furtherance of the transactions contemplated by this Agreement.
Company shall deliver to Boatmen's within ten (10) days after the
date hereof a true, accurate and complete copy of each written plan
or program disclosed in Section 2.12(c) of the Disclosure Schedule
and, with respect to each such plan or program, all (i) amendments or
supplements thereto, (ii) summary plan descriptions, (iii) lists of
all current participants and all participants with benefit
entitlements, (iv) contracts relating to plan documents,
(v) actuarial valuations for any defined benefit plan, (vi)
valuations for any plan as of the most recent date,
(vii) determination letters from the Internal Revenue Service,
(viii) the most recent annual report filed with the Internal Revenue
Service, (ix) registration statements on Form S-8 and prospectuses,
and (x) trust agreements. Boatmen's will hold any such information
which is nonpublic in confidence in accordance with the provisions of
Section 8.01 hereof.
ARTICLE FIVE
------------
AGREEMENTS OF BOATMEN'S AND BOATMEN'S-TEXAS
-------------------------------------------
SECTION 5.01. REGULATORY APPROVALS AND REGISTRATION STATEMENT.
------------ -----------------------------------------------
Boatmen's shall file all regulatory applications required in order to
consummate the Mergers and the Subsidiary Bank Merger, including but
not limited to the necessary applications for the prior approval of
the Federal Reserve Board, the Finance Commission of the State of
Texas and the Office of the Comptroller of the Currency, and if
deemed necessary by Boatmen's a private ruling request with the
Internal Revenue Service regarding the federal income tax
consequences of the Mergers and the Subsidiary Bank Merger.
Boatmen's shall provide to Company a copy of such applications and,
if applicable, the ruling request and all correspondence pertaining
thereto contemporaneously with the filing or receipt of same.
Boatmen's shall file with the S.E.C. the Registration Statement
relating to the shares of Boatmen's Common to be issued to the
stockholders of Company and Bank pursuant to this Agreement and shall
use its best efforts to cause the Registration Statement to become
effective. At the time the Registration Statement becomes effective,
the Registration Statement shall comply in all material respects with
the provisions of the Securities Act and the
A-19
<PAGE> 213
published rules and regulations thereunder, and shall not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not false or misleading, and at the time of mailing thereof to the
stockholders of Company and Bank, at the time of the Stockholders' Meeting
and Bank Stockholders' Meeting and at the Effective Time the Proxy
Statement/Prospectus included as part of the Registration Statement,
as amended or supplemented by any amendment or supplement, shall not
contain any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein not false or
misleading. Boatmen's shall timely file all documents required to
obtain all necessary Blue Sky permits and approvals, if any, required
to carry out the transactions contemplated by this Agreement, shall
pay all expenses incident thereto and shall use its best efforts to
obtain such permits and approvals on a timely basis. Boatmen's shall
promptly and properly prepare and file any other filings required
under the Securities Exchange Act of 1934 (the "Exchange Act")
relating to the Mergers and the transactions contemplated herein.
SECTION 5.02. BREACHES. Boatmen's shall, in the event it has
------------ --------
knowledge of the occurrence, or impending or threatened occurrence,
of any event or condition which would cause or constitute a breach
(or would have caused or constituted a breach had such event occurred
or been known prior to the date hereof) of any of its representations
or agreements contained or referred to herein, give prompt written
notice thereof to Company and use its best efforts to prevent or
promptly remedy the same.
SECTION 5.03. CONSUMMATION OF AGREEMENT. Boatmen's and
------------ -------------------------
Boatmen's-Texas shall use their respective best efforts to perform
and fulfill all conditions and obligations on their part to be
performed or fulfilled under this Agreement and to effect each of the
Mergers in accordance with the terms and conditions of this
Agreement.
SECTION 5.04. DIRECTORS AND OFFICERS' LIABILITY INSURANCE AND
------------ -----------------------------------------------
INDEMNIFICATION.
- ---------------
(a) Following the Effective Time, Boatmen's will provide the
directors and officers of Company and its subsidiaries with the same
directors' and officers' liability insurance coverage that Boatmen's
provides to directors and officers of its other banking subsidiaries
generally, and, in addition, for a period of three years will use its
best efforts to continue the Company's directors' and officers'
liability insurance coverage with respect to actions occurring prior
to the Effective Time to the extent that such coverage is obtainable
for an aggregate premium not to exceed the annual premium presently
being paid by Company. If the premium of such insurance would exceed
such maximum amount, Boatmen's shall use its best efforts to procure
such level of insurance as can be obtained for a premium equal to
such maximum amount.
(b) For six years after the Effective Time, Boatmen's shall
cause the Surviving Corporation (the survivor of each of the Mergers
of Company, Dalhart-Delaware and Boatmen's-Texas following the
Effective Time, the "Surviving Corporation") to indemnify, defend and
hold harmless the officers, directors, employees and agents of
Company and its subsidiaries (each, an "Indemnified Party") at the
Effective Time, regardless of whether or not such persons are
employed thereafter, against all losses, expenses, claims, damages or
liabilities arising out of actions or omissions occurring on or prior
to the Effective Time (including, without limitation, the
transactions contemplated by this Agreement and the Subsidiary Bank
Merger Agreement) to the full extent then permitted under the
Missouri Corporate Law and by the Company's Articles of Incorporation
as in effect on the date hereof, including provisions relating to
advances of expenses incurred in the defense of any action or suit.
(c) If after the Effective Time the Surviving Corporation or any
of its successors or assigns (i) shall consolidate with or merge into
any other corporation or entity and shall not be the continuing or
A-20
<PAGE> 214
surviving corporation or entity of such consolidation or merger or
(ii) shall transfer all or substantially all of its properties and
assets to any individual, corporation or other entity, then and in
each such case, proper provision shall be made so that the successors
and assigns of the Surviving Corporation shall assume any remaining
obligations set forth in this Section 5.04. If the Surviving
Corporation shall liquidate, dissolve or otherwise wind up its
business, then Boatmen's shall indemnify, defend and hold harmless
each Indemnified Party to the same extent and on the same terms that
the Surviving Corporation was so obligated pursuant to this
Section 5.04.
SECTION 5.05. EMPLOYEE BENEFITS. Boatmen's shall, with respect
------------ -----------------
to each person who remains an employee of Company or its subsidiaries
following the Closing Date (each a "Continued Employee"), provide the
benefits described in this Section 5.05. Subject to the right of
subsequent amendment, modification or termination in Boatmen's sole
discretion, each Continued Employee shall be entitled, as a new
employee of a subsidiary of Boatmen's, to participate in such
employee benefit plans, as defined in Section 3(3) of ERISA, or any
non-qualified employee benefit plans or deferred compensation, stock
option, bonus or incentive plans, or other employee benefit or fringe
benefit programs that may be in effect generally for employees of all
of Boatmen's subsidiaries (the "Boatmen's Plans"), if and as a
Continued Employee shall be eligible and, if required, selected for
participation therein under the terms thereof and otherwise shall not
be participating in a similar plan which is maintained by the Company
or its subsidiaries after the Effective Time. Company employees
shall participate therein on the same basis as similarly situated
employees of other Boatmen's subsidiaries. All such participation
shall be subject to the terms of such plans as may be in effect from
time to time and this Section 5.05 is not intended to give Continued
Employees any rights or privileges superior to those of other
employees of Boatmen's subsidiaries. Boatmen's may terminate or
modify all Employee Plans and Boatmen's obligation under this
Section 5.05 shall not be deemed or construed so as to provide
duplication of similar benefits but, subject to that qualification,
Boatmen's shall, for purposes of vesting and any age or period of
service requirements for commencement of participation with respect
to any Boatmen's Plans in which Continued Employees may participate,
credit each Continued Employee with his or her term of service with
Company and its subsidiaries.
SECTION 5.06. SUBSIDIARY BANK MERGER. Boatmen's-Texas shall
------------ ----------------------
cause First Amarillo to enter into the form of Subsidiary Bank Merger
Agreement, attached hereto as Exhibit 4.03, with Bank and take all
other actions (including voting its shares of First Amarillo in favor
of the Subsidiary Bank Merger) and cooperate with Bank in causing the
Subsidiary Bank Merger to be effected.
SECTION 5.07. ACCESS TO INFORMATION. Boatmen's shall permit
------------ ---------------------
Company reasonable access in a manner which will avoid undue
disruption or interference with Boatmen's normal operations to its
properties and shall disclose and make available to Company all
books, documents, papers and records relating to its assets, stock
ownership, properties, operations, obligations and liabilities,
including, but not limited to, all books of account (including the
general ledger), tax records, minute books of directors' and
stockholders' meetings, organizational documents, material contracts
and agreements, loan files, filings with any regulatory authority,
accountants' workpapers (if available and subject to the respective
independent accountants' consent), litigation files, plans affecting
employees, and any other business activities or prospects in which
Company may have a reasonable and legitimate interest in furtherance
of the transactions contemplated by this Agreement. Company will
hold any such information which is nonpublic in confidence in
accordance with the provisions of Section 8.01 hereof.
A-21
<PAGE> 215
ARTICLE SIX
-----------
CONDITIONS PRECEDENT TO THE MERGER
----------------------------------
SECTION 6.01. CONDITIONS TO BOATMEN'S OBLIGATIONS. Boatmen's
------------ -----------------------------------
and Boatmen's-Texas's obligations to effect each of the Mergers shall
be subject to the satisfaction (or waiver by Boatmen's) prior to or
on the Closing Date of the following conditions:
(a) The representations and warranties made by Company and
Dalhart-Delaware in this Agreement shall be true in all material
respects on and as of the Closing Date with the same effect as though
such representations and warranties had been made or given on and as
of the Closing Date;
(b) Company and Dalhart-Delaware shall have performed and
complied in all material respects with all of its obligations and
agreements required to be performed prior to the Closing Date under
this Agreement;
(c) No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition preventing the
consummation of each of the Mergers shall be in effect, nor shall any
proceeding by any bank regulatory authority or other person seeking
any of the foregoing be pending. There shall not be any action
taken, or any statute, rule, regulation or order enacted, entered,
enforced or deemed applicable to either of the Mergers which makes
the consummation of the Merger illegal;
(d) All necessary regulatory approvals, consents, authorizations
and other approvals required by law for consummation of each of the
Mergers and the Subsidiary Bank Merger shall have been obtained and
all waiting periods required by law shall have expired;
(e) Boatmen's shall have received the environmental reports
required by Section 4.08 hereof, and shall not have elected, pursuant
to Section 7.03 hereof, to terminate and cancel this Agreement;
(f) Boatmen's shall have received all documents required to be
received from Company and Dalhart-Delaware on or prior to the Closing
Date, all in form and substance reasonably satisfactory to Boatmen's;
(g) Boatmen's shall have received an opinion letter, dated as of
the Closing Date, from Ernst & Young, its independent public
accountants, to the effect that each of the Mergers and the
Subsidiary Bank Merger will qualify for pooling of interests
accounting treatment under Accounting Principles Board Opinion No. 16
if closed and consummated in accordance with this Agreement and the
Bank Merger Agreement, respectively;
(h) That certain Stock Redemption Termination Agreement between
Company and Catherine D. Koehler as more fully described in
Section 2.19 hereof shall be in full force and effect as of, and the
transactions contemplated thereby consummated on, the Closing Date;
(i) The Registration Statement shall be effective under the
Securities Act and no stop orders suspending the effectiveness of the
Registration Statement shall be in effect or proceedings for such
purpose pending before or threatened by the S.E.C;
A-22
<PAGE> 216
(j) Boatmen's shall have received a ruling of the Internal
Revenue Service or an opinion of its counsel to the effect that if
the Merger is consummated in accordance with the terms set forth in
this Agreement and the Subsidiary Bank Merger is consummated in
accordance with the terms set forth in the Subsidiary Bank Merger
Agreement, (i) the Merger and Subsidiary Bank Merger will constitute
a reorganization within the meaning of Section 368(a) of the Code;
(ii) no gain or loss will be recognized by the holders of shares of
Company Common or Bank common stock upon receipt of Merger
Consideration (except for cash received in lieu of fractional
shares), in the case of Company, and the shares of Boatmen's Common
issuable pursuant to the Subsidiary Bank Merger Agreement, in the
case of Bank; (iii) the basis of shares of Boatmen's Common received
by the stockholders of Company or Bank will be the same as the basis
of shares of Company Common or Bank common stock exchanged therefor;
and (iv) the holding period of the shares of Boatmen's Common
received by such stockholders will include the holding period of the
shares of Company Common or Bank common stock exchanged therefor,
provided such shares were held as capital assets as of the Effective
Time;
(k) The Subsidiary Bank Merger shall be consummated on the
Closing Date; and
(l) Boatmen's shall be of the good faith reasonable judgment,
after consultation with Company and Company's counsel, that the
potential loss, cost and expense arising from the contingent
liability described in the Escrow Agreement is not significantly
greater than the value of the Escrow Shares.
SECTION 6.02. CONDITIONS TO COMPANY'S AND DALHART-DELAWARE'S
------------ ----------------------------------------------
OBLIGATIONS. Company's and Dalhart-Delaware's obligation to effect
- -----------
the Merger shall be subject to the satisfaction (or waiver by Company
or Dalhart-Delaware) prior to or on the Closing Date of the following
conditions:
(a) The representations and warranties made by Boatmen's and
Boatmen's-Texas in this Agreement shall be true in all material
respects on and as of the Closing Date with the same effect as though
such representations and warranties had been made or given on the
Closing Date;
(b) Boatmen's and Boatmen's-Texas shall have performed and
complied in all material respects with all of their obligations and
agreements hereunder required to be performed prior to the Closing
Date under this Agreement;
(c) No temporary restraining order, preliminary or permanent
injunction or other order issued by any court of competent
jurisdiction or other legal restraint or prohibition preventing the
consummation of the Merger shall be in effect, nor shall any
proceeding by any bank regulatory authority or other governmental
agency seeking any of the foregoing be pending. There shall not be
any action taken, or any statute, rule, regulation or order enacted,
entered, enforced or deemed applicable to the Merger which makes the
consummation of the Merger illegal;
(d) All necessary regulatory approvals, consents, authorizations
and other approvals, including the requisite approval of this
Agreement and the Merger by the shareholders of Company and Dalhart-
Delaware, required by law for consummation of the Merger shall have
been obtained and all waiting periods required by law shall have
expired;
(e) Company shall have received all documents required to be
received from Boatmen's on or prior to the Closing Date, all in form
and substance reasonably satisfactory to Company;
A-23
<PAGE> 217
(f) The Registration Statement shall be effective under the
Securities Act and no stop orders suspending the effectiveness of the
Registration Statement shall be in effect or proceedings for such
purpose pending before or threatened by the S.E.C.; and
(g) Company shall have received from Boatmen's a copy of the
ruling of the Internal Revenue Service or the opinion of Boatmen's
counsel contemplated by Section 6.01(i) of this Agreement.
ARTICLE SEVEN
-------------
TERMINATION OR ABANDONMENT
--------------------------
SECTION 7.01. MUTUAL AGREEMENT. This Agreement may be
------------ ----------------
terminated by the mutual written agreement of the parties at any time
prior to the Closing Date, regardless of whether shareholder approval
of this Agreement and the Merger by the shareholders of Company and
Dalhart-Delaware shall have been previously obtained.
SECTION 7.02. BREACH OF REPRESENTATIONS OR AGREEMENTS. In the
------------ ---------------------------------------
event that there is a material breach in any of the representations
and warranties or agreements of Boatmen's or Company, which breach is
not cured within thirty (30) days after notice to cure such breach is
given to the breaching party by the non-breaching party, then the
non-breaching party, regardless of whether shareholder approval of
this Agreement and the Merger shall have been previously obtained,
may terminate and cancel this Agreement by providing written notice
of such action to the other party hereto.
SECTION 7.03. ENVIRONMENTAL REPORTS. Boatmen's may terminate
------------ ---------------------
this Agreement to the extent provided by Section 4.08 and this
Section 7.03 by giving written notice thereof to Company.
SECTION 7.04. FAILURE OF CONDITIONS. In the event that any of
------------ ---------------------
the conditions to the obligations of either party are not satisfied
or waived on or prior to the Closing Date, and if any applicable cure
period provided in Section 7.02 hereof has lapsed, then such party
may, regardless of whether shareholder approval of this Agreement and
the Merger shall have been previously obtained, terminate and cancel
this Agreement by delivery of written notice of such action to the
other party on such date.
SECTION 7.05. APPROVAL DENIAL. If any regulatory application
------------ ---------------
filed pursuant to Section 5.01 hereof should be finally denied or
disapproved by the respective regulatory authority, then this
Agreement thereupon shall be deemed terminated and canceled;
provided, however, that a request for additional information or
undertaking by Boatmen's, as a condition for approval, shall not be
deemed to be a denial or disapproval so long as Boatmen's diligently
provides the requested information or undertaking. In the event an
application is denied pending an appeal, petition for review, or
similar such act on the part of Boatmen's (hereinafter referred to as
the "appeal") then the application will be deemed denied unless
Boatmen's prepares and timely files such appeal and continues the
appellate process for purposes of obtaining the necessary approval.
SECTION 7.06. SHAREHOLDER APPROVAL DENIAL. If the Merger is not
------------ ---------------------------
approved by the requisite vote of the stockholders of Company at the
Stockholders' Meeting, then either party may terminate this
Agreement.
A-24
<PAGE> 218
SECTION 7.07. REGULATORY ENFORCEMENT MATTERS. In the event that
------------ ------------------------------
Company or any of its subsidiaries shall become a party or subject to
any new or amended written agreement, memorandum of understanding,
cease and desist order, imposition of civil money penalties or other
regulatory enforcement action or proceeding with any federal or state
agency charged with the supervision or regulation of banks or bank
holding companies ("Regulatory Enforcement Action") after the date of
this Agreement, then Boatmen's may terminate this Agreement;
provided, however, that Boatmen's may not terminate this Agreement
pursuant to this Section 7.07 on account of any Regulatory
Enforcement Action which, through reasonable efforts of Company
and/or Boatmen's, could be terminated on or before the Closing Date
without requiring any capital infusion to be made or other action
having a financial effect materially adverse to the financial
benefits of the Merger to Boatmen's.
SECTION 7.08. AUTOMATIC TERMINATION. If the Closing Date does
------------ ---------------------
not occur on or prior to the expiration of the first anniversary of
the date of this Agreement, then this Agreement may be terminated by
either party by giving written notice to the other.
SECTION 7.09. TERMINATION FEE.
------------ ----------------
(a) Upon the occurrence of one or more of the following events
(a "Triggering Event"), Company shall pay to Boatmen's the sum of
Seven Hundred Fifty Thousand Dollars ($750,000):
(i) upon termination of this Agreement by Boatmen's upon
a breach thereof by Company (including, without limitation, the
entering into of an agreement between Company and any third party
which is inconsistent with the transactions contemplated by this
Agreement), provided that within twelve (12) months of the date
of such termination, an event described in clause (iii), (iv) or
(v) below shall have occurred;
(ii) the failure of Company's shareholders to approve the
Merger and this Agreement at a meeting called for such purpose;
provided, however, that the failure of the Company's shareholders
to approve the Merger and this Agreement at a meeting called for
such purpose shall not be deemed a Triggering Event if: (A) the
average of the daily closing prices of a share of Boatmen's
Common, as reported on Nasdaq during the period of twenty (20)
trading days ending on the second trading day immediately
preceding the date of mailing to the shareholders of the Company
notice of a meeting to vote upon this Agreement and the Merger,
together with the Proxy Statement/Prospectus relating thereto
(the "Mailing Date") (the "Boatmen's Final Price"), is less than
$26.00; and (B) the number obtained by dividing the Boatmen's
Final Price by the Boatmen's Initial Price (as defined below),
is less than the number obtained by dividing the Final Index
Price (as defined below) by the Initial Index Price (as defined
below) and subtracting .20 from such quotient.
(iii) any person or group of persons (other than Boatmen's)
shall acquire, or have the right to acquire, 50% or more of the
outstanding shares of Company Common, (exclusive of any shares
of Company Common sold directly or indirectly to such person or
group of persons by Boatmen's);
(iv) expiration of the fifth day preceding the scheduled
expiration date of a tender or exchange offer by any person or
group of persons (other than Boatmen's and/or its affiliates) to
purchase or acquire securities of Company if upon consummation
of such offer, such person or group of persons would own, control
or have the right to acquire 50% or more of the Company Common;
and
A-25
<PAGE> 219
(v) upon the entry by Company or Bank into an agreement or
other understanding with a person or group of persons (other than
Boatmen's and/or its affiliates) for such person or group of
persons to acquire, merge or consolidate with Company or Bank or
to purchase or acquire Company or Bank or all or substantially
all of Company's or Bank's assets.
(b) As used in this Section 7.09:
(i) "person" and "group of persons" shall have the meanings
conferred thereon by Section 13(d) of the Exchange Act.
(ii) The "Index Group" shall mean all of those companies
listed on Exhibit 7.09, the common stock of which is publicly
traded and as to which there is no pending publicly announced
proposal at any time during the period of 20 trading days ending
at the end of the fifth trading day immediately preceding the
Closing Date for such company to be acquired or to acquire
another company in exchange for its stock where, in such later
case, such company to be acquired would be a significant
subsidiary of such acquiring company (as such term is defined in
Section 3.03 hereof). In the event that any such company or
companies are so removed from the Index Group, the weights
attributed to the remaining companies shall be adjusted
accordingly.
(iii) The "Initial Boatmen's Price" shall be the closing
price of a share of Boatmen's Common on the date of this
Agreement. The "Initial Index Price" shall mean the weighted
average (weighted in accordance with the factors listed on
Exhibit 7.09) of the per share closing prices of the common stock
of the companies comprising the Index Group, as reported on the
consolidated transactions reporting system for the market or
exchange on which such common stock is principally traded, on the
date of this Agreement.
(iv) The "Final Price" of any company belonging to the Index
Group shall mean the average of the daily closing sale prices of
a share of common stock of such company, as reported in the
consolidated transaction reporting system for the market or
exchange on which such common stock is principally traded, during
the period of 20 trading days ending on the end of the second
trading day immediately preceding the Mailing Date.
(v) The "Final Index Price" shall mean the weighted average
(weighted in accordance with the factors listed on Exhibit 7.09)
of the Final Prices for all of the companies comprising the Index
Group.
If Boatmen's or any company included in the Index Group declares
a stock dividend or effects a reclassification, recapitalization,
split-up, combination, exchange of shares or similar transaction
between the date of this Agreement and the end of the fifth
trading day immediately preceding the Closing Date, the closing
prices for the common stock of such company shall be
appropriately adjusted for the purposes of the definitions above
so as to be comparable to the prices on the date of this
Agreement.
Company shall notify Boatmen's promptly in writing upon its
becoming aware of the occurrence of any Triggering Event.
A-26
<PAGE> 220
ARTICLE EIGHT
-------------
GENERAL
-------
SECTION 8.01. CONFIDENTIAL INFORMATION. The parties acknowledge
------------ ------------------------
the confidential and proprietary nature of the "Information" (as
herein described) which has heretofore been exchanged and which will
be received from each other hereunder and agree to hold and keep, and
to instruct their respective agents, representatives, shareholders,
affiliates, employees and consultants to hold and keep, such
Information confidential. Such Information will include any and all
financial, technical, commercial, marketing, customer or other
information concerning the business, operations and affairs of a
party that may be provided to the other, irrespective of the form of
the communications, by such party's employees or agents. Such
Information shall not include information which is or becomes
generally available to the public other than as a result of a
disclosure by a party or its representatives in violation of this
Agreement. The parties agree that the Information will be used
solely for the purposes contemplated by this Agreement and that such
Information will not be disclosed to any person other than employees
and agents of a party who are directly involved in evaluating the
transaction. The Information shall not be used in any way
detrimental to a party, including use directly or indirectly in the
conduct of the other party's business or any business or enterprise
in which such party may have an interest, now or in the future, and
whether or not now in competition with such other party.
SECTION 8.02. PUBLICITY. Boatmen's and Company shall cooperate
------------ ---------
with each other in the development and distribution of all news
releases and other public disclosures concerning this Agreement and
the Merger and shall not issue any news release or make any other
public disclosure without the prior consent of the other party,
unless such is required by law upon the written advice of counsel or
is in response to published newspaper or other mass media reports
regarding the transaction contemplated hereby, in which such latter
event the parties shall consult with each other regarding such
responsive public disclosure.
SECTION 8.03. RETURN OF DOCUMENTS. Upon termination of this
------------ -------------------
Agreement without the Merger becoming effective, each party (i) shall
deliver to the other originals and all copies of all Information made
available to such party, (ii) will not retain any copies, extracts or
other reproductions in whole or in part of such Information, and
(iii) will destroy all memoranda, notes and other writings prepared
by either party based on the Information.
SECTION 8.04. NOTICES. Any notice or other communication shall
------------ -------
be in writing and shall be deemed to have been given or made on the
date of delivery, in the case of hand delivery, or three (3) business
days after deposit in the United States Registered Mail, postage
prepaid, or upon receipt if transmitted by facsimile telecopy or any
other means, addressed (in any case) as follows:
(a) if to Boatmen's:
Boatmen's Bancshares, Inc.
One Boatmen's Plaza
800 Market Street
St. Louis, Missouri 63102
Attention: Mr. Gregory L. Curl
Facsimile: 314/466-5645
A-27
<PAGE> 221
with a copy to:
Lewis, Rice & Fingersh
500 North Broadway, Suite 2000
St. Louis, Missouri 63102
Attention: Thomas C. Erb, Esq.
Facsimile: 314/241-6056
and
(b) if to Company:
Dalhart Bancshares, Inc.
323 Denver Avenue
Dalhart, Texas 79022
Attention: Mr. Mike Koehler
Facsimile: 806/249-5863
with copies to:
Jenkens & Gilchrist, P.C.
1445 Ross Avenue, Suite 3200
Dallas, Texas 75202-2799
Attention: Charles E. Greef, Esq.
Facsimile: 214/855-4300
or to such other address as any party may from time to time designate
by notice to the others.
SECTION 8.05. LIABILITIES. In the event that this Agreement is
------------ -----------
terminated pursuant to the provisions of Article Seven hereof, no
party hereto shall have any liability to any other party for costs,
expenses, damages or otherwise; provided, however, that,
notwithstanding the foregoing, in the event that this Agreement is
terminated pursuant to Section 7.02 hereof on account of a willful
breach of any of the representations and warranties set forth herein
or any breach of any of the agreements set forth herein, then the
non-breaching party shall be entitled to recover appropriate damages
from the breaching party.
SECTION 8.06. NONSURVIVAL OF REPRESENTATIONS, WARRANTIES AND
------------ ----------------------------------------------
AGREEMENTS. Except for, and as provided in, this Section 8.06, no
- ----------
representation, warranty or agreement contained in this Agreement
shall survive the Effective Time or the earlier termination of this
Agreement. The agreements set forth in the Escrow Agreement and in
Sections 1.08, 1.10, 5.04 and 5.05 shall survive the Effective Time
and the agreements set forth in Sections 7.09, 8.01, 8.02, 8.03 and
8.05 shall survive the Effective Time or the earlier termination of
this Agreement.
SECTION 8.07. ENTIRE AGREEMENT. This Agreement, the Escrow
------------ ----------------
Agreement and the Subsidiary Bank Merger Agreement constitute the
entire agreement between the parties and supersedes and cancels any
and all prior discussions, negotiations, undertakings, agreements in
principle and other agreements between the parties relating to the
subject matter hereof.
A-28
<PAGE> 222
SECTION 8.08. HEADINGS AND CAPTIONS. The captions of Articles
------------ ---------------------
and Sections hereof are for convenience only and shall not control or
affect the meaning or construction of any of the provisions of this
Agreement.
SECTION 8.09. WAIVER, AMENDMENT OR MODIFICATION. The conditions
------------ ---------------------------------
of this Agreement which may be waived may only be waived by notice to
the other party waiving such condition. The failure of any party at
any time or times to require performance of any provision hereof
shall in no manner affect the right at a later time to enforce the
same. This Agreement may be amended or modified by the parties
hereto, at any time before or after approval of the Agreement by the
shareholders of Company; provided, however, that after any such
approval no such amendment or modification shall alter the amount or
change the form of the Merger Consideration contemplated by this
Agreement to be received by shareholders of Company or alter or
change any of the terms of this Agreement if such alteration or
change would adversely affect the holders of Company Common. This
Agreement not be amended or modified except by a written document
duly executed by the parties hereto.
SECTION 8.10. RULES OF CONSTRUCTION. Unless the context
------------ ---------------------
otherwise requires: (a) a term has the meaning assigned to it;
(b) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles;
(c) "or" is not exclusive; and (d) words in the singular may include
the plural and in the plural include the singular.
SECTION 8.11. COUNTERPARTS. This Agreement may be executed in
------------ ------------
two or more counterparts, each of which shall be deemed an original
and all of which shall be deemed one and the same instrument.
SECTION 8.12. SUCCESSORS AND ASSIGNS. This Agreement shall be
------------ ----------------------
binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns. There shall be no third party
beneficiaries hereof.
SECTION 8.13. GOVERNING LAW; ASSIGNMENT. This Agreement shall
------------ -------------------------
be governed by the laws of the State of Missouri, except to the
extent that the Texas Corporate Law and the Delaware Corporate Law
must govern aspects of the Merger procedures, and applicable federal
laws and regulations. This Agreement may not be assigned by either
of the parties hereto.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
DALHART BANCSHARES, INC.
[SEAL]
By: /s/ Mike Koehler
--------------------------------------------
Mike Koehler
Chairman, CEO, President
ATTEST:
/s/ Doyle Hanbury
- -----------------------------
Senior Vice President
A-29
<PAGE> 223
DALHART BANCSHARES OF DELAWARE, INC.
[SEAL]
By: /s/ M. A. Ferrucci
--------------------------------------------
M. A. Ferrucci
President
ATTEST:
/s/ A. M. Horne
- ----------------------------
Secretary
BOATMEN'S BANCSHARES, INC.
[SEAL]
By: /s/ Gregory L. Curl
-------------------------------------------
Gregory L. Curl
Executive Vice President
ATTEST:
/s/ Philip N. McCarty
- -----------------------------
Secretary
BOATMEN'S-TEXAS, INC.
[SEAL]
By:/s/ Gregory L. Curl
--------------------------------------------
Gregory L. Curl
Executive Vice President
ATTEST:
/s/ David L. Foulk
- ------------------------------
Assistant Secretary
A-30
<PAGE> 224
EXHIBIT 1.09(A)
---------------
COMPANY'S LEGAL OPINION MATTERS
1. The due incorporation, valid existence and good standing of
Company under the laws of the State of Texas, its power and authority
to own and operate its properties and to carry on its business as now
conducted, and its power and authority to enter into the Agreement,
to merge with Boatmen's-Texas in accordance with the terms of the
Agreement and to consummate the transactions contemplated by the
Agreement.
2. The due organization of Bank as a Texas state bank and the
valid existence of Bank under the laws of the State of Texas, its
power and authority to own and operate its properties and the
possession of all licenses, permits and authorizations necessary to
carry on its business as now conducted.
3. The due incorporation or organization, valid existence and
good standing of each of the subsidiaries of Company (other than
Bank) and any subsidiary of any such subsidiary listed in Section
2.03 of the Disclosure Schedule, their power and authority to own and
operate their properties, the possession of all licenses, permits and
authorizations necessary to carry on their respective businesses as
now conducted.
4. With respect to Company, (i) the number of authorized, and
100,000 issued and outstanding shares of capital stock of Company
immediately prior to the Closing, (ii) the nonexistence of any
violation of the preemptive or subscription rights of any person,
(iii) the nonexistence of any outstanding options, warrants, or other
rights to acquire, or securities convertible into, any equity
security of Company, (iv) the nonexistence of any obligation,
contingent or otherwise, to reacquire any shares of capital stock of
Company, and (v) the nonexistence of any outstanding stock
appreciation, phantom stock or similar rights.
5. With respect to Dalhart-Delaware, (i) the number of
authorized, and 100,000 issued and outstanding shares of capital
stock of Company immediately prior to the Closing, (ii) the
nonexistence of any violation of the preemptive or subscription
rights of any person, (iii) the nonexistence of any outstanding
options, warrants, or other rights to acquire, or securities
convertible into, any equity security of Company, (iv) the
nonexistence of any obligation, contingent or otherwise, to reacquire
any shares of capital stock of Company, and (v) the nonexistence of
any outstanding stock appreciation, phantom stock or similar rights.
6. With respect to Bank, (i) the number of authorized, issued
and outstanding shares of capital stock of Bank immediately prior to
the Closing, (ii) the nonexistence of any violation of the preemptive
or subscription rights of any person, (iii) the nonexistence of any
outstanding options, warrants, or other rights to acquire, or
securities convertible into, any equity securities of such Bank,
(iv) the nonexistence of any obligation, contingent or otherwise, to
reacquire any shares of capital stock of Bank, and (v) the
nonexistence of any outstanding stock appreciation, phantom stock or
similar rights.
7. Company's valid ownership of and title to 1,000 shares of
the 1,000 shares of outstanding capital stock of Dalhart-Delaware,
free and clear of liens, security interests and encumbrances.
8. Dalhart-Delaware's valid ownership of and title to 18,634
shares of the 20,000 shares of outstanding capital stock of Bank,
free and clear of liens, security interests and encumbrances.
A-31
<PAGE> 225
9. The number of authorized, issued and outstanding shares of
capital stock of the subsidiaries listed in Section 2.03 of the
Disclosure Schedule, and the ownership by Company or Bank of all
outstanding shares thereof, free and clear of any claims, liens,
security interests and encumbrances.
10. The due and proper performance of all corporate acts and
other proceedings necessary or required to be taken by Company and
Dalhart-Delaware to authorize the execution, delivery and performance
of the Agreement, the due execution and delivery of the Agreement by
Company and Dalhart-Delaware, and the Agreement as a valid and
binding obligation of the Company and Dalhart-Delaware, enforceable
against Company and Dalhart-Delaware in accordance with its terms
(subject to the provisions of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium or similar laws affecting the
enforceability of creditors' rights generally from time to time in
effect, and equitable principles relating to the granting of specific
performance and other equitable remedies as a matter of judicial
discretion).
11. The due and proper performance of all corporate acts and
other proceedings necessary or required to be taken by Bank to
authorize the execution, delivery and performance of the Subsidiary
Bank Merger Agreement, the due execution and delivery of the
Subsidiary Bank Merger Agreement by Bank, and the Subsidiary Bank
Merger Agreement as a valid and binding obligation of Bank,
enforceable against Bank in accordance with its terms (subject to the
provisions of bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or similar laws affecting the
enforceability of creditors' rights generally from time to time in
effect, and equitable principles relating to the granting of specific
performance and other equitable remedies as a matter of judicial
discretion).
12. The execution of the Agreement by Company and Dalhart-
Delaware, and the consummation of the Merger and the other
transactions contemplated therein, does not violate or cause a
default under their articles of incorporation or bylaws, or any
statute, regulation or rule or any judgment, order or decree against
or any material agreement binding upon Company or Dalhart-Delaware.
13. The execution of the Subsidiary Bank Merger Agreement by
Bank, and the consummation of the Subsidiary Bank Merger and the
other transactions contemplated therein, does not violate or cause a
default under its charter or bylaws, or any statute, regulation or
rule or any judgment, order or decree against or any material
agreement binding upon Bank.
14. The receipt of all required consents, approvals, orders or
authorizations of, or registrations, declaration or filings with or
notices to, any court, administrative agency or commission or other
governmental authority or instrumentality, domestic or foreign, or
any other person or entity required to be obtained or made by
Company, Dalhart-Delaware, Bank and the other subsidiaries in
connection with the respective execution and delivery of the
Agreement and the Subsidiary Bank Merger Agreement or the
consummation of the transactions contemplated therein.
15. The nonexistence of any material actions, suits,
proceedings, orders, investigations or claims pending or threatened
against or affecting Company, Dalhart-Delaware, Bank or their
subsidiaries which, if adversely determined, would have a material
adverse effect upon their respective properties or assets or the
transactions contemplated by the Agreement and the Subsidiary Bank
Merger Agreement.
A-32
<PAGE> 226
EXHIBIT 1.09(B)
---------------
BOATMEN'S LEGAL OPINION MATTERS
1. The due incorporation, valid existence and good standing of
Boatmen's and Boatmen's-Texas under the laws of the State of
Missouri, and their respective power and authority to enter into the
Agreement and, with respect to Boatmen's, the Subsidiary Bank Merger
Agreement, and to consummate the transactions contemplated thereby.
2. The due organization, valid existence and good standing of
First Amarillo under the laws of the United States, and its power and
authority to enter into the Subsidiary Bank Merger Agreement and to
merge with Bank and to consummate the other transactions contemplated
by the Subsidiary Bank Merger Agreement.
3. The due and proper performance of all corporate acts and
other proceedings required to be taken by Boatmen's and Boatmen's-
Texas to authorize the execution, delivery and performance of the
Agreement, the due execution and delivery of the Agreement by
Boatmen's and Boatmen's-Texas, and the Agreement as a valid and
binding obligation of Boatmen's and Boatmen's-Texas enforceable
against Boatmen's and Boatmen's-Texas in accordance with its terms
(subject to the provisions of bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting the enforceability of creditors'
rights generally from time to time in effect, and equitable
principles relating to the granting of specific performance and other
equitable remedies as a matter of judicial discretion).
4. The due and proper performance of all corporate acts and
other proceedings required to be taken by First Amarillo and
Boatmen's to authorize the execution, delivery and performance of the
Subsidiary Bank Merger Agreement, the due execution and delivery of
the Subsidiary Bank Merger Agreement by First Amarillo and Boatmen's,
and the Subsidiary Bank Merger Agreement as a valid and binding
obligation of First Amarillo and Boatmen's enforceable against First
Amarillo and Boatmen's in accordance with its terms (subject to the
provisions of bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting the enforceability of creditors' rights
generally from time to time in effect, and equitable principles
relating to the granting of specific performance and other equitable
remedies as a matter of judicial discretion).
5. The due authorization and, when issued to the stockholders
of Company and Bank in accordance with the terms of the Agreement and
the Subsidiary Bank Merger Agreement, the valid issuance of the
shares of Boatmen's Common to be issued pursuant to the Merger and
the Subsidiary Bank Merger, such shares being fully paid and
nonassessable, with no personal liability attaching to the ownership
thereof.
6. The execution and delivery of the Agreement by Boatmen's and
Boatmen's-Texas, and the consummation of the transactions
contemplated therein, as neither conflicting with, in breach of or in
default under, resulting in the acceleration of, creating in any
party the right to accelerate, terminate, modify or cancel, or
violate, any provision of Boatmen's and Boatmen's-Texas' respective
articles of incorporation or bylaws, or any statute, regulation,
rule, judgment, order or decree binding upon Boatmen's or Boatmen's-
Texas which would be materially adverse to the business of Boatmen's
and its subsidiaries taken as a whole.
A-33
<PAGE> 227
7. The execution and delivery of the Subsidiary Bank Merger
Agreement by First Amarillo and Boatmen's, and the consummation of
the transactions contemplated therein, as neither conflicting with,
in breach of or in default under, resulting in the acceleration of,
creating in any party the right to accelerate, terminate, modify or
cancel, or violate, any provision of First Amarillo's charter or
bylaws, or any statute, regulation, rule, judgment, order or decree
binding upon First Amarillo which would be materially adverse to the
business of First Amarillo.
8. The receipt of all required consents, approvals, orders or
authorizations of, or registrations, declarations or filings with or
without notices to, any court, administrative agency or commission or
other governmental authority or instrumentality, domestic or foreign,
or any other person or entity required to be obtained or made by or
with respect to Boatmen's, Boatmen's-Texas or First Amarillo in
connection with the execution and delivery of the Agreement and/or
the Subsidiary Bank Merger Agreement, as the case may be, or the
consummation of the transactions contemplated by the Agreement and/or
the Subsidiary Bank Merger Agreement, as the case may be.
A-34
<PAGE> 228
EXHIBIT 2.14
------------
STOCK REDEMPTION TERMINATION AGREEMENT
THIS STOCK REDEMPTION TERMINATION AGREEMENT (this "Agreement")
is made and entered into as of the 19th day of May, 1994, by and
between Dalhart Bancshares, Inc., a Texas corporation (the "Company")
and Catherine D. Koehler, an individual resident of the State of
Texas ("Koehler").
W I T N E S S E T H:
-------------------
WHEREAS, the Company, Dalhart Bancshares of Delaware, Inc.
("Dalhart Delaware"), Boatmen's Bancshares, Inc., a Missouri
corporation ("BBI") and Boatmen's-Texas, Inc., a Missouri corporation
("BTI") have entered into that certain Agreement and Plan of Merger,
dated as of May 19, 1994 (the "Merger Agreement"), providing for the
merger (the "Merger") of each of the Company and Dalhart Delaware
with and into BTI, with the shareholders of the Company receiving
shares of BBI's common stock in exchange for their shares of the
Company's common stock, par value $10.00 per share (the "Common
Stock") outstanding as of the date of consummation of the Merger (the
"Closing Date");
WHEREAS, the Company and Koehler have previously entered into
that certain Stock Repurchase Agreement, dated as of January 8, 1993
(the "Repurchase Agreement"), a copy of which is attached hereto as
Exhibit A, providing for the Company to repurchase shares of Common
- ---------
Stock owned by Koehler (the "Koehler Shares") upon the terms and
conditions set forth therein;
WHEREAS, the Company has purchased a whole-life insurance policy
(policy number 3710687, issued by The Guardian Life Insurance
Company) on the life of Koehler (the "Policy"), in order to provide
the proceeds necessary to repurchase the Koehler Shares; and
WHEREAS, to induce BBI to enter into the Merger Agreement,
Company and Koehler have agreed to modify their obligations with
respect to the Repurchase Agreement as set forth in this Agreement.
NOW THEREFORE, for and in consideration of the foregoing and of
the mutual covenants and agreements contained herein, and other good
and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally
bound hereby acknowledged, the parties hereto, intending to be
legally bound hereby, do undertake, promise, covenants and agree as
follows:
1. Payment of Premiums on the Policy. The Company shall
---------------------------------
continue to pay all premiums due on the Policy from the date of this
Agreement until the Closing Date.
2. Treatment of the Repurchase Agreement and the Policy at the
-----------------------------------------------------------
Closing. On the Closing Date, the Repurchase Agreement shall
- -------
terminate (without the purchase of the Koehler Shares by the Company
having been effected) and all rights and obligations of each party
thereto shall terminate and expire. At the closing of the merger,
the parties hereto shall execute and deliver, each to the other and
to BBI, a certificate acknowledging termination of the Repurchase
Agreement. Upon receipt of such certificates on the Closing Date,
Koehler shall have the right, but not the obligation, to purchase the
Policy at its cash surrender value at the Closing Date, payable in
cash to the Company at the Closing.
A-35
<PAGE> 229
3. Treatment of the Repurchase Agreement and the Policy Upon
---------------------------------------------------------
Death of Koehler Prior to the Closing. If Koehler dies prior to the
- -------------------------------------
Closing, on the Closing Date and prior to the Repurchase Agreement
having been terminated pursuant to Section 2 hereof, the Repurchase
Agreement shall terminate and all rights and obligations of each
party thereto shall terminate and expire. The Company shall be
entitled to retain the proceeds of the Policy and BBI shall be
obligated to issue additional shares of BBI stock to the holders of
Company Common Stock as provided in Section 1.05(b) of the Merger
Agreement.
4. Treatment if Merger Agreement is Terminated. If the Merger
-------------------------------------------
Agreement is terminated in accordance with its terms, or if the
Merger is not consummated by May 19, 1995, this Agreement shall
terminate and the Repurchase Agreement shall continue in full force
and effect.
5. Binding Effect Assignment: Amendment. This Agreement shall
------------------------------------
be binding upon and inure to the benefit of the parties hereto and
their respective heirs, legal representatives, successors and
assigns, but no party to this Agreement shall assign this Agreement,
by operation of law or otherwise, in whole or in part, without the
prior written consent of the other party hereto. Any assignment made
or attempted in violation of this Section 5 shall be void and of no
effect. This Agreement may be amended, modified or supplemented only
by an instrument in writing executed by the party against which
enforcement of the amendment, modification or supplement is sought.
6. Further Cooperation. The parties agree that they will, at
-------------------
any time and from time to time after the Closing Date, upon request
by the other and without further consideration, do, perform, execute,
acknowledge and deliver all such further acts, deeds, assignments,
assumptions, transfers, conveyances, certificates and assurances as
may be reasonably required in order to fully consummate the
transactions contemplated hereby in accordance with this Agreement or
to carry out and perform any undertaking made by the parties
hereunder.
7. Severability. In the event that any provision of this
------------
Agreement is held to be illegal, invalid or unenforceable under
present or future laws, then (a) such provision shall be fully
severable and this Agreement shall be construed and enforced as if
such illegal, invalid or unenforceable provision were not a part
hereof, (b) the remaining provisions of this Agreement shall remain
in full force and effect and shall not be affected by such illegal,
invalid or unenforceable provision or by its severance from this
Agreement; and (c) there shall be added automatically as a part of
this Agreement a provision as similar in terms to such illegal,
invalid or unenforceable provision as may be possible and still be
legal, valid and enforceable.
8. Governing Law. This Agreement shall be construed in
-------------
accordance with and governed by the laws of the State of Texas
(including those laws relating to choice of law) applying to
contracts entered into and to be performed within the State of Texas,
without regard for the provisions thereof regarding choice of law.
Venue for any cause of action arising from this Agreement shall lie
in Dalhart, Texas.
9. Specific Performance. Each party hereto acknowledges that
--------------------
the other party would be irreparably damaged and would not have an
adequate remedy at law for money damages in the event that any of the
covenants contained in this Agreement were not performed in
accordance with its terms or otherwise were materially breached.
Each of the parties hereto therefore agrees that, without the
necessity of proving actual damages or posting bond or other
security, the other party shall be entitled to temporary and/or
permanent injunction or injunctions to prevent breaches of such
performance and to specific enforcement of such covenants in addition
to any other remedy to which they may be entitled, at law or in
equity.
A-36
<PAGE> 230
10. Attorneys' Fees and Costs. In the event attorneys' fees or
-------------------------
other costs are incurred to secure performance of any of the
obligations herein provided for, or to establish damages for the
breach thereof, or to obtain any other appropriate relief, whether by
way of prosecution or defense, the prevailing party shall be entitled
to recover reasonable attorneys' fees and costs incurred therein.
11. Rules of Construction. The descriptive headings in this
---------------------
Agreement are inserted for convenience of reference only and are not
intended to be part of or to affect the meaning or interpretation of
this Agreement. Each use herein of the masculine, neuter or feminine
gender shall be deemed to include the other genders, Each use herein
of the plural shall include the singular and vice versa, in each
case as the context requires or as it is otherwise appropriate. The
word "or" is used in the inclusive sense. All sections referred to
herein are sections of this Agreement.
12. Multiple Counterparts. This Agreement may be executed in
---------------------
multiple counterparts, each of which shall be deemed an original, and
all counterparts hereof so executed by the parties hereto, whether or
not such counterpart shall bear the execution of each of the parties
hereto, shall be deemed to be, and shall be construed as, one and the
same Agreement. A telecopy or facsimile transmission of a signed
counterpart of this Agreement shall be sufficient to bind the party
or parties s whose signature(s) appear thereon.
IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the day and year first above written.
DALHART BANCSHARES, INC.
By: /s/ Mike Koehler
-----------------------------------------
Mike Koehler, Chairman of the Board
/s/ Catherine D. Koehler
-----------------------------------------
Catherine D. Koehler
A-37
<PAGE> 231
EXHIBIT 4.03
------------
AGREEMENT TO MERGE
between
CITIZENS STATE BANK OF DALHART
and
BOATMEN'S FIRST NATIONAL BANK OF AMARILLO
under the charter and with the title of
BOATMEN'S FIRST NATIONAL BANK OF AMARILLO
and joined in by
BOATMEN'S BANCSHARES, INC.
THIS AGREEMENT TO MERGE (this "Subsidiary Bank Merger Agreement")
made between CITIZENS STATE BANK OF DALHART (hereinafter referred to
as "Bank"), a banking association organized under the laws of the
State of Texas, being located at 323 Denver Avenue, Dalhart, County
of Dallon, in the State of Texas, with a capital of $2,000,000
divided into 20,000 shares of common stock, each of $100.00 par
value, surplus of $6,000,000, and undivided profits, including
capital reserves of approximately $4,525,000, as of December 31,
1993, and BOATMEN'S FIRST NATIONAL BANK OF AMARILLO (hereinafter
referred to as "First Amarillo"), a national banking association
organized under the laws of the United States, being located at
Eighth & Taylor, Amarillo, County of Potter, in the State of Texas,
with a capital of $20,258,000 divided into ------------ shares of
common stock, each of $------ par value, surplus of approximately
$20,443,000, and undivided profits, including capital reserves of
$34,681,000, as of December 31, 1993, each acting pursuant to a
resolution of its board of directors adopted by the vote of a
majority of its directors, pursuant to the authority given by and in
accordance with the provisions of Texas law in the case of Bank and
the Act of November 7, 1918, as amended, 12 U.S.C. 215(a), in the
case of First Amarillo, and joined in by Boatmen's Bancshares, Inc.,
a Missouri corporation ("Boatmen's"), witnesseth as follows:
SECTION 1.
Bank shall be merged with and into First Amarillo under the charter
of the latter (the "Subsidiary Bank Merger").
SECTION 2.
The name of the receiving association (hereinafter referred to as the
"surviving association") shall be Boatmen's First National Bank of
Amarillo.
A-38
<PAGE> 232
SECTION 3.
The business of the surviving association shall be that of a national
banking association. This business shall be conducted by the
surviving association at its main office which shall continue to be
located at Eighth & Taylor, Amarillo, Texas, and at its legally
established branches (including the existing locations of Bank).
SECTION 4.
The amount of the capital stock of the surviving association shall be
$20,258,000 divided into ----------- shares of common stock, each of
$------- par value, and at the time the merger shall become
effective, the surviving association shall have a surplus of
approximately $------------, and undivided profits, including capital
reserves, which represents the combined capital and surplus
structures of the merging banks as stated in the preamble of this
Subsidiary Bank Merger Agreement; adjusted however, for normal
earnings and expenses and any permitted dividends between
December 31, 1993, and the effective time of the merger.
SECTION 5.
All assets as they exist at the effective time of the merger shall
pass to and vest in the surviving association without any conveyance
or other transfer. The surviving association shall be responsible
for all of the liabilities of every kind and description, including
liabilities arising from the operation of the trust departments of
Bank and First Amarillo existing as of the effective time of the
merger.
SECTION 6.
Bank shall contribute to the surviving association acceptable assets
having a book value, over and above its liability to its creditors,
of at least $------------, and having an estimated fair value over
and above its liability to its creditors, of at least $------------
or ------% of the estimated fair value of excess acceptable assets
over and above liabilities to creditors, of the surviving
association; adjusted, however, for normal earnings and expenses
between December 31, 1993 and the effective time of the merger.
At the effective time of the merger, First Amarillo shall have on
hand acceptable assets having a book value, over and above its
liability to its creditors, of at least $------------, and having an
estimated fair value, over and above its liability to its creditors,
of at least $------------ or ------% of the estimated fair value of
excess acceptable assets over and above liabilities to creditors, of
the surviving association; adjusted, however, for normal earnings and
expenses and dividends between December 31, 1993 and the effective
time of the merger.
SECTION 7.
(a) Each share of common stock, par value $100.00, of Bank
issued and outstanding immediately prior to the Effective Time (the
"Bank Common"), other than shares the holders of which have duly
exercised and perfected their dissenters' rights under applicable
Texas law, shall be converted into the right to receive 35.2840
shares (the "Bank Conversion Ratio") of common stock, stated value
$1.00 per share,
A-39
<PAGE> 233
of Boatmen's (the "Boatmen's Common"). The shares of Boatmen's Common to
be issued pursuant to the Bank Conversion Ratio, together with any cash
payment in lieu of fractional shares, as provided below, is hereinafter
referred to as the "Bank Merger Consideration". A portion of the Bank
Merger Consideration payable to the shareholders of Bank other than
Dalhart Bancshares of Delaware, Inc. (the "Minority Shareholders") equal
to the quotient of (A) divided by (B), where (A) equals the number of Bank
Escrow Shares (as defined in Section 7(i) hereof), and (B) equals the
number of shares of Bank Common owned by Minority Shareholders who have
not duly exercised and perfected their dissenters' rights under
applicable Texas law, shall be issued and delivered on the Closing
Date (as defined in Section 1.06 of the Holding Company Merger
Agreement referred to in Section 11 hereof) by Boatmen's to the
Escrow Agent (as defined in Section 7(i) hereof) pursuant to the
provisions of Section 7(i) hereof and the balance thereof shall be
issuable to the Minority Shareholders and Dalhart Bancshares of
Delaware, Inc. as provided in Section 7(f). No fractional shares of
Boatmen's Common shall be issued and, in lieu thereof, holders of
shares of Bank Common who would otherwise be entitled to a fractional
share interest in Boatmen's Common (after taking into account all
shares of Bank Common held by such holder exclusive, with respect to
Minority Shareholders, of any beneficial interest in the Bank Escrow
Shares) shall be paid an amount in cash equal to the product of such
fractional share interest and the closing price of a share of
Boatmen's Common on the National Association of Securities Dealers
Automated Quotation System - National Market System ("Nasdaq") on the
business day immediately preceding the date on which the Effective
Time occurs. Of the capital stock of First Amarillo, Boatmen's-
Texas, Inc., a Texas corporation and wholly-owned subsidiary of
Boatmen's ("Boatmen's-Texas") which is the sole shareholder of the
presently outstanding 2,794,184 shares of common stock of First
Amarillo, each of $7.25 par value, shall retain its present rights in
such shares unaffected by the Subsidiary Bank Merger.
(b) At the effective time, all of the shares of Bank Common, by
virtue of the Subsidiary Bank Merger and without any action on the
part of the holders thereof, shall no longer be outstanding and shall
be canceled and retired and shall cease to exist, and each holder of
any certificate or certificates which immediately prior to the
effective time represented outstanding shares of Bank Common (the
"Certificates") shall thereafter cease to have any rights with
respect to such shares, except the right of such holders to receive,
without interest, the Bank Merger Consideration upon the surrender of
such Certificate or Certificates.
(c) If between the date hereof and the effective time a share of
Boatmen's Common shall be changed into a different number of shares
of Boatmen's Common or a different class of shares (a "Share
Adjustment"), by reason of reclassification, recapitalization,
splitup, exchange of shares or readjustment, or if a stock dividend
thereon shall be declared with a record date within such period, then
the number of shares of Boatmen's Common into which a share of Bank
Common shall be converted pursuant to subsection (a) above shall be
appropriately and proportionately adjusted so that each shareholder
of Bank shall be entitled to receive such number of shares of
Boatmen's Common as such shareholder would have received pursuant to
such share adjustment had the record date therefor been immediately
following the effective time of the merger.
(d) If holders of Bank Common dissent from the Subsidiary Bank
Merger Agreement and Subsidiary Bank Merger and demand appraisal of
their shares under applicable Texas law, any issued and outstanding
shares of Bank Common held by a dissenting holder shall not be
converted into Bank Merger Consideration as described herein but from
and after the effective time shall represent only the right to
receive such consideration as may be determined to be due to such
dissenting holder pursuant to the applicable law; provided, however,
that each share of Bank Common outstanding immediately prior to the
A-40
<PAGE> 234
effective time and held by a dissenting holder who shall, after the
effective time, withdraw his demand for appraisal or lose his right
of appraisal shall have only such rights as are provided under
applicable law.
(e) Boatmen's Trust Company shall act as Exchange Agent in the
Subsidiary Bank Merger (the "Exchange Agent").
(f) As soon as reasonably practicable, and in no event later
than ten (10) business days after the Effective Time, the Exchange
Agent shall mail to each record holder of any Certificate or
Certificates whose shares were converted into the right to receive
the Bank Merger Consideration, a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent and shall be in such form and have
such other provisions as Boatmen's may reasonably specify) (each such
letter, the "Subsidiary Bank Merger Letter of Transmittal") and
instructions for use in effecting the surrender of the Certificates
in exchange for the Bank Merger Consideration less, in the case of
Minority Shareholders, such holder's beneficial interest in the Bank
Escrow Shares (the "Net Bank Merger Consideration"). Upon surrender
to the Exchange Agent of a Certificate, together with a Subsidiary
Bank Merger Letter of Transmittal duly executed and any other
required documents, the holder of such Certificate shall be entitled
to receive in exchange therefor solely the Net Bank Merger
Consideration. No interest on the Net Bank Merger Consideration
issuable upon the surrender of the Certificates shall be paid or
accrued for the benefit of holders and Certificates. If the Net Bank
Merger Consideration is to be issued to a person other than a person
in whose name a surrendered Certificate is registered, it shall be a
condition of issuance that the surrendered Certificate shall be
properly endorsed or otherwise in proper form for transfer and that
the person requesting such issuance shall pay to the Exchange Agent
any required transfer or other taxes or establish to the satisfaction
of the Exchange Agent that such tax has been paid or is not
applicable.
(g) At any time following six months after the Effective Time,
Boatmen's shall be entitled to terminate the Exchange Agent
relationship, and thereafter holders of Certificates shall be
entitled to look only to Boatmen's (subject to abandoned property,
escheat or other similar laws) with respect to the Net Bank Merger
Consideration issuable upon surrender of their Certificates.
(h) No dividends that are otherwise payable on shares of
Boatmen's Common constituting the Net Bank Merger Consideration shall
be paid to persons entitled to receive such shares of Boatmen's
Common until such persons surrender their Certificates. Upon such
surrender, there shall be paid to the person in whose name the shares
of Boatmen's Common shall be issued any dividends which shall have
become payable with respect to such shares of Boatmen's Common
(without interest and less the amount of taxes, if any, which may
have been imposed thereon), between the Effective Time and the time
of such surrender. Dividends payable on shares of Boatmen's Common
held pursuant to the Escrow Agreement shall be paid to the Escrow
Agent and distributed pursuant to the terms and provisions of the
Escrow Agreement.
(i) On the Closing Date, Boatmen's shall issue in the name of
and deliver to the escrow agent (the "Escrow Agent") named in that
certain Escrow Agreement to be executed on the Closing Date among the
Escrow Agent, Bank and the parties to the Holding Company Merger
Agreement (the "Escrow Agreement"), such number of shares of
Boatmen's Common (the "Bank Escrow Shares") as equals the quotient of
$70,450 divided by the average per share closing price of a share of
Boatmen's Common, as reported on Nasdaq for the twenty (20) business
days immediately preceding the fifth calendar day prior to the
Closing Date.
A-41
<PAGE> 235
SECTION 8.
Bank shall not declare or pay any dividend to its shareholder between
the date of this Subsidiary Bank Merger Agreement and the time at
which the merger shall become effective except that Bank may pay a
dividend in the amount of $91,800 during the pendency of the
transaction. Except as expressly permitted in Section 4.01(b) of
that certain Agreement and Plan of Merger of even date herewith among
Boatmen's, Boatmen's-Texas, Dalhart Bancshares, Inc., a Texas
corporation, and Dalhart Bancshares of Delaware, Inc., a Delaware
corporation and parent corporation of Bank, (the "Holding Company
Merger Agreement") Bank shall not sell or otherwise dispose of any of
its assets or take any actions out of the ordinary course of
business.
SECTION 9.
The present board of directors of First Amarillo shall continue to
serve as the Board of Directors of the surviving association until
the next annual meeting or until such time as their successors have
been elected and have qualified. The signage located at the present
offices of Bank after the Closing Date shall, if not inconsistent
with or violative of applicable laws and regulations, include usage
of the name "Citizens Boatmen's Bank".
SECTION 10.
Effective as of the time this merger shall become effective as
specified in the merger approval to be issued by the Comptroller of
the Currency, the articles of association of the resulting bank shall
read in their entirety as set forth in Exhibit A attached hereto and
incorporated herein by reference.
SECTION 11.
This Subsidiary Bank Merger Agreement may be terminated by mutual
agreement of the boards of directors of all parties hereto before or
after any shareholder group has taken affirmative action. Since time
is of the essence to this Subsidiary Bank Merger Agreement, if for
any reason the merger shall not have been consummated by the first
anniversary of the date hereof, this Subsidiary Bank Merger Agreement
shall terminate automatically as of that date unless extended, in
writing, prior to this date by mutual action of the boards of
directors of the parties. Notwithstanding the foregoing, in the
event that the Holding Company Merger Agreement is terminated without
the transactions contemplated thereby being consummated as provided
therein, this Subsidiary Bank Merger Agreement shall also be
terminated and shall be of no further force and effect and no party
shall have any liability to any other party.
SECTION 12.
This Subsidiary Bank Merger Agreement shall be approved and confirmed
by the shareholders of each of the merging banks; and, subject to
Section 13 of this Subsidiary Bank Merger Agreement, the merger shall
become effective at the time specified in a merger approval issued by
the Comptroller of the Currency of the United States.
A-42
<PAGE> 236
SECTION 13.
Anything herein to the contrary notwithstanding, the obligations of
the merging banks under this Subsidiary Bank Merger Agreement are
subject to and conditioned upon the prior or simultaneous
consummation of the transactions contemplated by the Holding Company
Merger Agreement. The merger of Bank into First Amarillo
contemplated herein shall be consummated on a date on or after the
closing date of the transactions contemplated by the Holding Company
Merger Agreement.
WITNESS, the signatures and seals of said merging banks this
- ------ day of May, 1994, each set by its President and attested to by
its Cashier or Secretary, pursuant to a resolution of its board of
directors, acting by a majority and the signatures of a majority of
each of its board of directors.
A-43
<PAGE> 237
BOATMEN'S FIRST NATIONAL BANK OF
AMARILLO
Attest:
-----------------------------------------------
Donald E. Powell, President
- ------------------------
Secretary
(Seal of Bank)
------------------------------------
W. H. Attebury
------------------------------------
Bert Ballengee
------------------------------------
Danny Conklin
------------------------------------
Don T. Curtis
------------------------------------
Gene Edwards
------------------------------------
Carl Hare
------------------------------------
Bill Helton
------------------------------------
John Logsdon
------------------------------------
Wales H. Madden, Jr.
------------------------------------
John C. Maynard
------------------------------------
Jay J. O'Brien
A-44
<PAGE> 238
------------------------------------
Patrick Oles
------------------------------------
Donald E. Powell
------------------------------------
J. Avery Rush
------------------------------------
John M. Shelton, III
------------------------------------
A. C. Smith
------------------------------------
Ray A. Snead, Jr.
------------------------------------
Wayne P. Sturdivant
------------------------------------
Irvin Wall
Directors of Boatmen's First National Bank of
Amarillo
A-45
<PAGE> 239
CITIZENS STATE BANK OF DALHART
Attest:
By:
-------------------------------------------
Mike Koehler, President
/s/ Rita Gergen
- ------------------------------
Rita Gergen
Cashier
(Seal of Bank)
------------------------------------
Mike Koehler
------------------------------------
Leon Seagraves
------------------------------------
Hugh Gordon
------------------------------------
E. C. Caddell
------------------------------------
Gene Rahall
------------------------------------
Doyle Hanbury
------------------------------------
William E. Semmelbeck
Directors of Citizens State Bank of Dalhart
A-46
<PAGE> 240
BOATMEN'S BANCSHARES, INC.
By:--------------------------------------------
A-47
<PAGE> 241
EXHIBIT 4.09
------------
-------------------, 1994
Boatmen's Bancshares, Inc.
One Boatmen's Plaza
800 Market Street
St. Louis, Missouri 63101
Re: Agreement and Plan of Merger, dated as of May 19, 1994 (the
"Merger Agreement"), by and among Dalhart Bancshares, Inc.
("Company"), Boatmen's Bancshares, Inc. ("Boatmen's"), and
Boatmen's Texas, Inc. ("Boatmen's-Texas")
Gentlemen:
I have been advised that I may be deemed to be an affiliate of
the Company, as that term is defined for purposes of paragraphs (c)
and (d) of Rule 145 ("Rule 145") of the Rules and Regulations of the
Securities and Exchange Commission (the "Commission") promulgated
under the Securities Act of 1933, as amended (the "Securities Act").
Pursuant to the terms and conditions of the Merger Agreement,
each share of common stock of the Company owned by me as of the
effective time of the merger contemplated by the Merger Agreement
(the "Merger") may be converted into the right to receive shares of
common stock of Boatmen's and cash in lieu of any fractional share.
As used in this letter, the shares of common stock of the Company
owned by me as of ------------------------- (the date 30 days prior
to the anticipated effective time of the Merger) are referred to as
the "Pre-Merger Shares" and the shares of common stock of Boatmen's
which may be received by me in the Merger in exchange for my Pre-
Merger Shares are referred to as the "Post-Merger Shares." This
letter is delivered to Boatmen's pursuant to Section 4.08 of the
Merger Agreement.
A. I represent and warrant to Boatmen's and agree that:
1. I shall not make any sale, transfer or other
disposition of the Post-Merger Shares I receive pursuant to the
Merger in violation of the Securities Act or the Rules and
Regulations of the Commission promulgated thereunder.
2. I understand that the issuance of the Post-Merger
Shares to me pursuant to the Merger will be registered with the
Commission under the Securities Act. I also understand that
because I may be deemed an "affiliate" of Company and because any
distributions by me of the Post-Merger Shares will not be
registered under the Securities Act, such Post-Merger Shares must
be held by me unless (i) the sale, transfer or other distribution
has been registered under the Securities Act, (ii) the sale,
transfer or other distribution of such Post-Merger Shares is made
in accordance with the provisions of Rule 145, or (iii) in the
opinion of counsel acceptable to Boatmen's some other exemption
from registration under the Securities Act is available with
respect to any such proposed distribution, sale, transfer or
other disposition of such Post-Merger Shares.
A-48
<PAGE> 242
Boatmen's Bancshares, Inc.
- ---------------------, 1994
3. In no event will I sell the Pre-Merger Shares or the
Post-Merger Shares, as the case may be, or otherwise transfer or
reduce my risk relative to the Pre-Merger Shares or Post-Merger
Shares, as the case may be, during the period beginning 30 days
prior to the date on which the Merger is consummated and ending
on the date that Boatmen's has published financial results
covering at least 30 days of the combined operations of Boatmen's
and the Company.
B. I understand and agree that:
1. Stop transfer instructions will be issued with respect
to the Post-Merger Shares and there will be placed on the
certificates representing such Post-Merger Shares, or any
certificate delivered in substitution therefor, a legend stating
in substance:
"The shares represented by this Certificate were issued in
a transaction to which Rule 145 under the Securities Act of
1933, as amended, applied. The shares represented by this
certificate may be transferred only in accordance with the
terms of a letter agreement dated -----------------, 1994,
by the registered holder in favor of Boatmen's Bancshares,
Inc., a copy of which agreement is on file at the principal
offices of Boatmen's Bancshares, Inc."
2. Unless the transfer by me of Post-Merger Shares is a
sale made in compliance with the provisions of Rule 145(d) or
made pursuant to an effective registration statement under the
Securities Act, Boatmen's reserves the right to place the
following legend on the Certificates issued to my transferee:
"The shares represented by this Certificate have not been
registered under the Securities Act of 1933, as amended, and
were acquired from a person who received such shares in a
transaction to which Rule 145 under the Securities Act of
1933, as amended, applied. The shares have not been
acquired by the holder with a view to, or for resale in
connection with, any distribution thereof within the meaning
of the Securities Act of 1933, as amended, and may not be
sold, pledged or otherwise transferred unless the shares
have been registered under the Securities Act of 1933, as
amended, or an exemption from registration is available."
I understand and agree that the legends set forth in paragraphs
1 and 2 above shall be removed by delivery of substitute Certificates
without any legend if I deliver to Boatmen's a copy of a letter from
the staff of the Commission, or an opinion of counsel in form and
substance satisfactory to Boatmen's, to the effect that no such
legend is required for the purpose of the Securities Act.
I have carefully read this letter and the Merger Agreement and
understand the requirements of each and the limitations imposed upon
the distribution, sale, transfer or other disposition of Pre-Merger
Shares or Post-Merger Shares by me.
Very truly yours,
A-49
<PAGE> 243
EXHIBIT 7.09
------------
</TABLE>
<TABLE>
INDEX GROUP
-----------
<CAPTION>
NAME WEIGHTING FACTORS
- ---- -----------------
<S> <C>
BancOne Corp. 15.29%
Bancorp Hawaii, Inc. 2.34%
CoreStates Financial Corp. 4.06%
First Bank System, Inc. 3.68%
First Fidelity Bancorporation 4.05%
Firstar Corporation 2.70%
Fleet/Norstar Financial Group, Inc. 6.07%
Huntington Bancshares Incorporated 2.11%
Meridian Bancorp, Inc. 1.93%
Comerica 3.88%
NBD Bancorp, Inc. 5.78%
Northern Trust Corporation 3.05%
Norwest Corporation 8.19%
PNC Financial Corp. 9.08%
Republic New York Corporation 3.62%
State Street Boston Corporation 4.02%
SunTrust Banks, Inc. 8.20%
U.S. Bancorp 3.56%
Wachovia Corporation 8.39%
----
TOTAL: 100.00%
</TABLE>
A-50
<PAGE> 244
EXHIBIT B
AGREEMENT TO MERGE
between
CITIZENS STATE BANK OF DALHART
and
BOATMEN'S FIRST NATIONAL BANK OF AMARILLO
under the charter and with the title of
BOATMEN'S FIRST NATIONAL BANK OF AMARILLO
and joined in by
BOATMEN'S BANCSHARES, INC.
THIS AGREEMENT TO MERGE (this "Subsidiary Bank Merger Agreement")
made between CITIZENS STATE BANK OF DALHART (hereinafter referred to
as "Bank"), a banking association organized under the laws of the
State of Texas, being located at 323 Denver Avenue, Dalhart, County
of Dallam, in the State of Texas, with a capital of $2,000,000
divided into 20,000 shares of common stock, each of $100.00 par
value, surplus of $6,000,000, and undivided profits, including
capital reserves of approximately $5,051,000, as of March 31, 1994,
and BOATMEN'S FIRST NATIONAL BANK OF AMARILLO (hereinafter referred
to as "First Amarillo"), a national banking association organized
under the laws of the United States, being located at Eighth &
Taylor, Amarillo, County of Potter, in the State of Texas, with a
capital of $20,258,000 divided into 2,794,184 shares of common stock,
each of $7.25 par value, surplus of approximately $20,443,000, and
undivided profits, including capital reserves of $36,591,000, as of
March 31, 1994, each acting pursuant to a resolution of its board of
directors adopted by the vote of a majority of its directors,
pursuant to the authority given by and in accordance with the
provisions of Texas law in the case of Bank and the Act of
November 7, 1918, as amended, 12 U.S.C. 215(a), in the case of First
Amarillo, and joined in by Boatmen's Bancshares, Inc., a Missouri
corporation ("Boatmen's"), witnesseth as follows:
SECTION 1.
Bank shall be merged with and into First Amarillo under the charter
of the latter (the "Subsidiary Bank Merger").
B-1
<PAGE> 245
SECTION 2.
The name of the receiving association (hereinafter referred to as the
"surviving association") shall be Boatmen's First National Bank of
Amarillo.
SECTION 3.
The business of the surviving association shall be that of a national
banking association. This business shall be conducted by the
surviving association at its main office which shall continue to be
located at Eighth & Taylor, Amarillo, Texas, and at its legally
established branches (including the existing locations of Bank).
SECTION 4.
The amount of the capital stock of the surviving association shall be
$20,258,000 divided into 2,794,184 shares of common stock, each of
$7.25 par value, and at the time the merger shall become effective,
the surviving association shall have a surplus of approximately
$28,443,000 and undivided profits, including capital reserves, which
represents the combined capital and surplus structures of the merging
banks as stated in the preamble of this Subsidiary Bank Merger
Agreement; adjusted however, for normal earnings and expenses and any
permitted dividends between March 31, 1994, and the effective time of
the merger.
SECTION 5.
All assets as they exist at the effective time of the merger shall
pass to and vest in the surviving association without any conveyance
or other transfer. The surviving association shall be responsible
for all of the liabilities of every kind and description, including
liabilities arising from the operation of the trust departments of
Bank and First Amarillo existing as of the effective time of the
merger.
SECTION 6.
Bank shall contribute to the surviving association acceptable assets
having a book value, over and above its liability to its creditors,
of at least $13,051,000; adjusted, however, for normal earnings and
expenses between March 31, 1994 and the effective time of the merger,
for allowances of cash payments, if any, permitted under this
Agreement and any unrecognized gain on the sale of investment
securities.
At the effective time of the merger, First Amarillo shall have on
hand acceptable assets having a book value, over and above its
liability to its creditors, of at least $77,292,000; adjusted,
however, for normal earnings and expenses and dividends between
March 31, 1994 and the effective time of the merger, for allowances
of cash payments, if any, permitted under this Agreement and any
unrecognized gain on the sale of investment securities.
B-2
<PAGE> 246
SECTION 7.
(a) Each share of common stock, par value $100.00, of Bank
issued and outstanding immediately prior to the Effective Time (the
"Bank Common"), other than shares the holders of which have duly
exercised and perfected their dissenters' rights under applicable
Texas law, shall be converted into the right to receive 35.2840
shares (the "Bank Conversion Ratio") of common stock, stated value
$1.00 per share, of Boatmen's (the "Boatmen's Common"). The shares
of Boatmen's Common to be issued pursuant to the Bank Conversion
Ratio, together with any cash payment in lieu of fractional shares,
as provided below, is hereinafter referred to as the "Bank Merger
Consideration". A portion of the Bank Merger Consideration payable
to the shareholders of Bank other than Dalhart Bancshares of
Delaware, Inc. (the "Minority Shareholders") equal to the quotient of
(A) divided by (B), where (A) equals the number of Bank Escrow Shares
(as defined in Section 7(i) hereof), and (B) equals the number of
shares of Bank Common owned by Minority Shareholders who have not
duly exercised and perfected their dissenters' rights under
applicable Texas law, shall be issued and delivered on the Closing
Date (as defined in Section 1.06 of the Holding Company Merger
Agreement referred to in Section 11 hereof) by Boatmen's to the
Escrow Agent (as defined in Section 7(i) hereof) pursuant to the
provisions of Section 7(i) hereof and the balance thereof shall be
issuable to the Minority Shareholders and Dalhart Bancshares of
Delaware, Inc. as provided in Section 7(f). No fractional shares of
Boatmen's Common shall be issued and, in lieu thereof, holders of
shares of Bank Common who would otherwise be entitled to a fractional
share interest in Boatmen's Common (after taking into account all
shares of Bank Common held by such holder exclusive, with respect to
Minority Shareholders, of any beneficial interest in the Bank Escrow
Shares) shall be paid an amount in cash equal to the product of such
fractional share interest and the closing price of a share of
Boatmen's Common on the National Association of Securities Dealers
Automated Quotation System - National Market System ("Nasdaq") on the
business day immediately preceding the date on which the Effective
Time occurs. Of the capital stock of First Amarillo, Boatmen's-
Texas, Inc., a Texas corporation and wholly-owned subsidiary of
Boatmen's ("Boatmen's-Texas") which is the sole shareholder of the
presently outstanding 2,794,184 shares of common stock of First
Amarillo, each of $7.25 par value, shall retain its present rights in
such shares unaffected by the Subsidiary Bank Merger.
(b) At the effective time, all of the shares of Bank Common, by
virtue of the Subsidiary Bank Merger and without any action on the
part of the holders thereof, shall no longer be outstanding and shall
be canceled and retired and shall cease to exist, and each holder of
any certificate or certificates which immediately prior to the
effective time represented outstanding shares of Bank Common (the
"Certificates") shall thereafter cease to have any rights with
respect to such shares, except the right of such holders to receive,
without interest, the Bank Merger Consideration upon the surrender of
such Certificate or Certificates.
(c) If between the date hereof and the effective time a share of
Boatmen's Common shall be changed into a different number of shares
of Boatmen's Common or a different class of shares (a "Share
Adjustment"), by reason of reclassification, recapitalization,
splitup, exchange of shares or readjustment, or if a stock dividend
thereon shall be declared with a record date within such period, then
the number of shares of Boatmen's Common into which a share of Bank
Common shall be converted pursuant to subsection (a) above shall be
appropriately and proportionately adjusted so that each shareholder
of Bank shall be entitled to receive such number of shares of
Boatmen's Common as such shareholder would have received pursuant to
such share adjustment had the record date therefor been immediately
following the effective time of the merger.
B-3
<PAGE> 247
(d) If holders of Bank Common dissent from the Subsidiary Bank
Merger Agreement and Subsidiary Bank Merger and demand appraisal of
their shares under applicable Texas law, any issued and outstanding
shares of Bank Common held by a dissenting holder shall not be
converted into Bank Merger Consideration as described herein but from
and after the effective time shall represent only the right to
receive such consideration as may be determined to be due to such
dissenting holder pursuant to the applicable law; provided, however,
that each share of Bank Common outstanding immediately prior to the
effective time and held by a dissenting holder who shall, after the
effective time, withdraw his demand for appraisal or lose his right
of appraisal shall have only such rights as are provided under
applicable law.
(e) Boatmen's Trust Company shall act as Exchange Agent in the
Subsidiary Bank Merger (the "Exchange Agent").
(f) As soon as reasonably practicable, and in no event later
than ten (10) business days after the Effective Time, the Exchange
Agent shall mail to each record holder of any Certificate or
Certificates whose shares were converted into the right to receive
the Bank Merger Consideration, a letter of transmittal (which shall
specify that delivery shall be effected, and risk of loss and title
to the Certificates shall pass, only upon proper delivery of the
Certificates to the Exchange Agent and shall be in such form and have
such other provisions as Boatmen's may reasonably specify) (each such
letter, the "Subsidiary Bank Merger Letter of Transmittal") and
instructions for use in effecting the surrender of the Certificates
in exchange for the Bank Merger Consideration less, in the case of
Minority Shareholders, such holder's beneficial interest in the Bank
Escrow Shares (the "Net Bank Merger Consideration"). Upon surrender
to the Exchange Agent of a Certificate, together with a Subsidiary
Bank Merger Letter of Transmittal duly executed and any other
required documents, the holder of such Certificate shall be entitled
to receive in exchange therefor solely the Net Bank Merger
Consideration. No interest on the Net Bank Merger Consideration
issuable upon the surrender of the Certificates shall be paid or
accrued for the benefit of holders and Certificates. If the Net Bank
Merger Consideration is to be issued to a person other than a person
in whose name a surrendered Certificate is registered, it shall be a
condition of issuance that the surrendered Certificate shall be
properly endorsed or otherwise in proper form for transfer and that
the person requesting such issuance shall pay to the Exchange Agent
any required transfer or other taxes or establish to the satisfaction
of the Exchange Agent that such tax has been paid or is not
applicable.
(g) At any time following six months after the Effective Time,
Boatmen's shall be entitled to terminate the Exchange Agent
relationship, and thereafter holders of Certificates shall be
entitled to look only to Boatmen's (subject to abandoned property,
escheat or other similar laws) with respect to the Net Bank Merger
Consideration issuable upon surrender of their Certificates.
(h) No dividends that are otherwise payable on shares of
Boatmen's Common constituting the Net Bank Merger Consideration shall
be paid to persons entitled to receive such shares of Boatmen's
Common until such persons surrender their Certificates. Upon such
surrender, there shall be paid to the person in whose name the shares
of Boatmen's Common shall be issued any dividends which shall have
become payable with respect to such shares of Boatmen's Common
(without interest and less the amount of taxes, if any, which may
have been imposed thereon), between the Effective Time and the time
of such surrender. Dividends payable on shares of Boatmen's Common
held pursuant to the Escrow Agreement shall be paid to the Escrow
Agent and distributed pursuant to the terms and provisions of the
Escrow Agreement.
(i) On the Closing Date, Boatmen's shall issue in the name of
and deliver to the escrow agent (the "Escrow Agent") named in that
certain Escrow Agreement to be executed on the Closing Date among the
Escrow Agent, Bank and the parties to the Holding Company Merger
Agreement (the "Escrow
B-4
<PAGE> 248
Agreement"), such number of shares of Boatmen's Common (the "Bank Escrow
Shares") as equals the quotient of $70,450 divided by the average per
share closing price of a share of Boatmen's Common, as reported on Nasdaq
for the twenty (20) business days immediately preceding the fifth calendar
day prior to the Closing Date.
SECTION 8.
Bank shall not declare or pay any dividend to its shareholder between
the date of this Subsidiary Bank Merger Agreement and the time at
which the merger shall become effective except that Bank may pay a
dividend in the amount of $91,800 during the pendency of the
transaction. Except as expressly permitted in Section 4.01(b) of
that certain Agreement and Plan of Merger dated May 19, 1994 among
Boatmen's, Boatmen's-Texas, Dalhart Bancshares, Inc., a Texas
corporation, and Dalhart Bancshares of Delaware, Inc., a Delaware
corporation and parent corporation of Bank, (the "Holding Company
Merger Agreement") Bank shall not sell or otherwise dispose of any of
its assets or take any actions out of the ordinary course of
business.
SECTION 9.
The present board of directors of First Amarillo shall continue to
serve as the Board of Directors of the surviving association until
the next annual meeting or until such time as their successors have
been elected and have qualified. The signage located at the present
offices of Bank after the Closing Date shall, if not inconsistent
with or violative of applicable laws and regulations, include usage
of the name "Citizens Boatmen's Bank".
SECTION 10.
Effective as of the time this merger shall become effective as
specified in the merger approval to be issued by the Comptroller of
the Currency, the articles of association of the resulting bank shall
read in their entirety as set forth in Exhibit A attached hereto and
incorporated herein by reference.
SECTION 11.
This Subsidiary Bank Merger Agreement may be terminated by mutual
agreement of the boards of directors of all parties hereto before or
after any shareholder group has taken affirmative action. Since time
is of the essence to this Subsidiary Bank Merger Agreement, if for
any reason the merger shall not have been consummated by the first
anniversary of the date hereof, this Subsidiary Bank Merger Agreement
shall terminate automatically as of that date unless extended, in
writing, prior to this date by mutual action of the boards of
directors of the parties. Notwithstanding the foregoing, in the
event that the Holding Company Merger Agreement is terminated without
the transactions contemplated thereby being consummated as provided
therein, this Subsidiary Bank Merger Agreement shall also be
terminated and shall be of no further force and effect and no party
shall have any liability to any other party.
B-5
<PAGE> 249
SECTION 12.
This Subsidiary Bank Merger Agreement shall be approved and confirmed
by the shareholders of each of the merging banks; and, subject to
Section 13 of this Subsidiary Bank Merger Agreement, the merger shall
become effective at the time specified in a merger approval issued by
the Comptroller of the Currency of the United States.
SECTION 13.
Anything herein to the contrary notwithstanding, the obligations of
the merging banks under this Subsidiary Bank Merger Agreement are
subject to and conditioned upon the prior or simultaneous
consummation of the transactions contemplated by the Holding Company
Merger Agreement. The merger of Bank into First Amarillo
contemplated herein shall be consummated on a date on or after the
closing date of the transactions contemplated by the Holding Company
Merger Agreement.
WITNESS, the signatures and seals of said merging banks this 30th
day of June, 1994, each set by its President and attested to by its
Cashier or Secretary, pursuant to a resolution of its board of
directors, acting by a majority and the signatures of a majority of
each of its board of directors.
B-6
<PAGE> 250
BOATMEN'S FIRST NATIONAL BANK OF
AMARILLO
Attest:
/s/ Donald E. Powell
-----------------------------------------------
Donald E. Powell, President
/s/ Jim C. Wilhite
- ---------------------------
Secretary
(Seal of Bank)
/s/ W. H. Attebury
-----------------------------------------
W. H. Attebury
/s/ Bert Ballengee
-----------------------------------------
Bert Ballengee
/s/ Danny Conklin
-----------------------------------------
Danny Conklin
/s/ Don T. Curtis
-----------------------------------------
Don T. Curtis
/s/ Gene Edwards
-----------------------------------------
Gene Edwards
/s/ Carl Hare
-----------------------------------------
Carl Hare
/s/ Bill Helton
-----------------------------------------
Bill Helton
/s/ John Logsdon
-----------------------------------------
John Logsdon
/s/ Wales H. Madden, Jr.
-----------------------------------------
Wales H. Madden, Jr.
/s/ John C. Maynard
-----------------------------------------
John C. Maynard
/s/ Patrick Oles
-----------------------------------------
Patrick Oles
B-7
<PAGE> 251
/s/ Donald E. Powell
-----------------------------------------
Donald E. Powell
/s/ J. Avery Rush, Jr.
-----------------------------------------
J. Avery Rush, Jr.
/s/ John M. Shelton, III
-----------------------------------------
John M. Shelton, III
/s/ Ray A. Snead, Jr.
-----------------------------------------
Ray A. Snead, Jr.
/s/ Wayne P. Sturdivant
-----------------------------------------
Wayne P. Sturdivant
Directors of Boatmen's First National Bank of
Amarillo
B-8
<PAGE> 252
CITIZENS STATE BANK OF DALHART
Attest:
By: /s/ Mike Koehler
-------------------------------------------
Mike Koehler, President
- -----------------------------------
Secretary
(Seal of Bank)
/s/ Mike Koehler
-----------------------------------------
Mike Koehler
/s/ Leon Seagraves
-----------------------------------------
Leon Seagraves
/s/ Hugh Gordon
-----------------------------------------
Hugh Gordon
/s/ E. C. Caddell
-----------------------------------------
E. C. Caddell
/s/ Gene Rahall
-----------------------------------------
Gene Rahall
/s/ Doyle Hanbury
-----------------------------------------
Doyle Hanbury
/s/ William E. Semmelbeck
-----------------------------------------
William E. Semmelbeck
/s/ Dee Miller
-----------------------------------------
Dee Miller
Directors of Citizens State Bank of Dalhart
B-9
<PAGE> 253
BOATMEN'S BANCSHARES, INC.
By: /s/ Gregory L. Curl
-------------------------------------------
Gregory L. Curl
Vice Chairman
B-10
<PAGE> 254
EXHIBIT A
TO MERGER AGREEMENT
ARTICLES OF AMENDMENT
TO THE ARTICLES OF ASSOCIATION
OF
THE FIRST NATIONAL BANK OF AMARILLO
Article First of the Articles of Association of The First
National Bank of Amarillo is hereby amended in its entirety to read
as follows:
"FIRST. The title of this Association shall be BOATMEN'S
-----
FIRST NATIONAL BANK OF AMARILLO."
IN WITNESS WHEREOF, we have hereunto set our hands and do hereby
certify that the foregoing is a true and accurate copy of the
Articles of Amendment to the Articles of Association of The First
National Bank of Amarillo, duly adopted by the sole shareholder of
the Association on the 28 day of October, 1993.
/s/ Don Powell
-----------------------------------------------
Don Powell
President and Chief Executive Officer
/s/ Jim C. Wilhite
-----------------------------------------------
Secretary
STATE OF TEXAS )
) SS.
COUNTY OF POTTER )
On this 28 day of October, 1993, before me, a Notary Public in
and for the said state, personally appeared Don Powell and Jim
Wilhite to me known to be the persons named in and who executed the
foregoing instrument, and acknowledged that they executed the same as
their voluntary act and deed.
/s/ Beth Schoon
-----------------------------------------------
Notary Public
B-11
<PAGE> 255
ARTICLES OF ASSOCIATION
OF
THE FIRST NATIONAL BANK OF AMARILLO
**********************************************
For the purpose of organizing an Association to carry on the
business of banking under the laws of the United States, the
undersigned do enter into the following Articles of Association:
FIRST. The title of this Association shall be THE FIRST NATIONAL
-----
BANK OF AMARILLO.
SECOND. The main office of the Association shall be in Amarillo,
------
County of Potter, State of Texas. The general business of the
Association shall be conducted at its main office and its branches.
THIRD. The Board of Directors of this Association shall consist
-----
of not less than five (5) nor more than twenty-five (25)
shareholders, the exact number to be fixed and determined from time
to time by resolution of a majority of the full Board of Directors or
by resolution of the shareholders at any annual or special meeting
thereof. Each director shall own $1,000 equity interest in this
national bank or in a company which has control of the bank. Amount
of the specified interest conforms to the requirements of 12 U.S.C.
Section 72 as amended March 31, 1980. Any vacancy in the Board of
Directors may be filled by action of the Board of Directors.
FOURTH. There shall be an annual meeting of the shareholders,
------
the purpose of which shall be the election of Directors and the
transaction of whatever other business may be brought before said
meeting. It shall be held at the main office or other convenient
place as the Board of Directors may designate, on the day of each
year specified therefor in the Bylaws, but if no election is held on
that day, it may be held on any subsequent day according to such
lawful rules as may be prescribed by the Board of Directors.
FIFTH. The authorized amount of capital stock of this
-----
Association shall be TWO MILLION SEVEN HUNDRED NINETY-FOUR THOUSAND
ONE HUNDRED EIGHTY-FOUR (2,794,184) shares of common stock of the par
value of SEVEN AND 25/100 DOLLARS ($7.25) each; but said capital
stock may
B-12
<PAGE> 256
be increased or decreased from time to time, in accordance
with the provisions of the laws of the United States.
No holder of shares of the capital stock of any class of the
Association shall have any preemptive or preferential right of
subscription to any shares of any class of stock of the Association,
whether now or hereafter authorized, or to any obligations
convertible into stock of the Association, issued, or sold, nor any
right of subscription to any thereof other than such, if any, as the
Board of Directors, in its discretion may from time to time determine
and at such price as the Board of Directors may from time to time
fix.
The Association, at any time and from time to time, may authorize
and issue debt obligations, whether or not subordinated, without the
approval of the shareholders.
SIXTH. The Board of Directors shall appoint one of its members
-----
President of this Association, who shall be Chairman of the Board,
unless the Board appoints another director to be Chairman. The Board
of Directors shall have the power to appoint one or more Vice
Presidents; and to appoint a Cashier and such other officers and
employees as may be required to transact the business of this
Association.
The Board of Directors shall have the power to define the duties
of the officers and employees of the Association; to fix the salaries
to be paid to them; to dismiss them; to require bonds from them and
to fix the penalty thereof; to regulate the manner in which any
increase of the capital of the Association shall be made; to manage
and administer the business and affairs of the Association; to make
all Bylaws that it may be lawful for them to make; and generally to
do and perform all acts that it may be legal for a Board of Directors
to do and perform.
SEVENTH. The Board of Directors shall have the power to change
-------
the location of the main office to any other place within the limits
of Amarillo, Texas, without the approval of the shareholders but
subject to the approval of the Comptroller of the Currency; and shall
have the power to establish or change the location of any branch or
branches of the Association to any other location, without the
approval of the shareholders but subject to the approval of the
Comptroller of the Currency.
B-13
<PAGE> 257
EIGHTH. The corporate existence of this Association shall
------
continue until terminated in accordance with the laws of the United
States.
NINTH. The Board of Directors of this Association, or any ten
-----
(10) or more shareholders owning, in the aggregate, not less than ten
percent (10%) of the stock of this Association, may call a special
meeting of the shareholders at any time. Unless otherwise provided
by the laws of the United States, a notice of the time, place, and
purpose of every annual and special meeting of the shareholders shall
be given by first-class mail, postage prepaid, mailed at least ten
(10) days prior to the date of such meeting to each shareholder of
record at his/her address as shown upon the books of this
Association.
TENTH. Any person, his/her heirs, executors, or administrators,
-----
shall be indemnified or reimbursed by the Association for judgements,
penalties, fines, settlements and reasonable expenses actually
incurred in connection with any action, suit or proceeding, civil or
criminal, to which he/she or they shall be made a party by reason of
his/her being or having been a director, officer, or employee of the
Association or of any firm, corporation, or organization which he/she
served in any such capacity at the request of the Association but if
the proceeding is brought by or in behalf of the Association, the
indemnification shall be limited to reasonable expenses incurred by
the person in connection with the proceeding; provided, however, that
-------- -------
no person shall be so indemnified or reimbursed in relation to any
matter in such action, suit, or proceedings as to which he/she shall
finally be adjudged to have been guilty of or liable for gross
negligence, willful misconduct or criminal acts in the performance of
his/her duties to the Association; and, provided further, that no
----------------
person shall be indemnified or reimbursed in relation to any matter
in such action, suit, or proceeding which has been made the subject
of a compromise settlement except with the approval of a court of
competent jurisdiction, or the holders of record of a majority of the
outstanding shares of the Association, or the Board of Directors,
acting by vote of directors not parties to the same or substantially
the same action, suit, or proceeding, constituting a majority of the
whole number of directors. The
B-14
<PAGE> 258
foregoing right of indemnification or reimbursement shall not be
exclusive of other rights to which such person, his/her heirs, executors,
or administrators, may be entitled as a matter of law.
The Association may, upon the affirmative vote of a majority of
its Board of Directors, purchase insurance for the purpose of
indemnifying its directors, officers and other employees to the
extent that such indemnification is allowed in the preceding
paragraph. Such insurance may, but need not, be for the benefit of
all directors, officers, or employees.
ELEVENTH. These Articles of Association may be amended at any
--------
regular or special meeting of the shareholders by the affirmative
vote of the holders of a majority of the stock of this Association,
unless the vote of the holders of a greater amount of stock is
required by law, and in that case by the vote of the holders of such
greater amount.
B-15
<PAGE> 259
EXHIBIT C
ESCROW AGREEMENT
This is an ESCROW AGREEMENT ("Escrow Agreement") made -------,
1994, by and among BOATMEN'S BANCSHARES, INC., a Missouri corporation
("Boatmen's"), BOATMEN'S TEXAS, INC., a Missouri corporation
("Boatmen's-Texas"), DALHART BANCSHARES, INC., a Texas corporation
("Company"), DALHART BANCSHARES OF DELAWARE, INC., a Delaware
corporation which is a wholly-owned subsidiary of Company ("Dalhart-
Delaware"), CITIZENS STATE BANK OF DALHART, a banking association
organized under the laws of the State of Texas ("Citizens"), and
- -----------------, a ----------------, as escrow agent hereunder (the
"Escrow Agent").
RECITALS
A. Boatmen's, Boatmen's-Texas, Company and Dalhart-Delaware are
parties to that certain Agreement and Plan of Merger dated May 19,
1994 (the "Agreement"). The Agreement generally provides for the
acquisition by merger of Company and Dalhart-Delaware by Boatmen's.
Section 1.08 of the Agreement provides that a portion of the shares
of Boatmen's Common constituting the Merger Consideration equal to
the quotient of $929,550 divided by the Boatmen's Average Price (the
"Company Escrow Shares") are to be held and distributed as provided
in this Escrow Agreement.
B. Citizens and Boatmen's First National Bank of Amarillo, a
wholly-owned subsidiary of Boatmen's-Texas ("First Amarillo"), are
parties to that certain Agreement to Merge dated June 30, 1994 (the
"Subsidiary Merger Agreement"). The Subsidiary Merger Agreement
generally provides for the merger of Citizens with and into First
Amarillo. Section 7(i) of the Subsidiary Merger Agreement provides
that a portion of the shares of Boatmen's Common constituting the
Bank Merger Consideration (as defined in the Subsidiary Merger
Agreement) equal to the quotient of $70,450 divided by the Boatmen's
Average Price (the "Bank Escrow Shares") are to be held and
distributed as provided in this Escrow Agreement.
C. The purpose of this Escrow Agreement is to provide a reserve
from the aggregate Merger Consideration and the Bank Merger
Consideration for the satisfaction and payment of any judgment on or
settlement of certain pending litigation styled Western National Bank
---------------------
v. Citizens State Bank, Curtis Beard, Prestige Lending Corporation
- ------------------------------------------------------------------
and Robert P. Mulroy (District Court of Dallas County, Texas, Cause
- --------------------
No. 94-04206-L) (the "WNB Claim"), and all costs and expenses
incurred in responding to and defending against the WNB Claim.
D. All terms used in this Escrow Agreement with initial capital
letters which are not otherwise defined herein shall have the meaning
ascribed thereto in the Agreement.
In consideration of the premises and the mutual terms and
provisions set forth in this Escrow Agreement and the Agreement, the
parties agree as follows.
C-1
<PAGE> 260
ARTICLE ONE
ESCROW SHARES
SECTION 1.01. DEPOSIT OF ESCROW SHARES. On the Closing Date,
------------ ------------------------
Boatmen's shall deposit the Company Escrow Shares and the Bank Escrow
Shares with Escrow Agent as provided in the Agreement and the
Subsidiary Merger Agreement, respectively. The Company Escrow Shares
and the Bank Escrow Shares are referred to herein collectively as the
"Escrow Shares."
SECTION 1.02. HOLDING OF ESCROW SHARES/PAYMENT OF DIVIDENDS.
------------ ---------------------------------------------
The Escrow Shares shall be held and distributed pursuant to the terms
hereof and may not be sold by Escrow Agent. All cash dividends which
may be paid on the Company Escrow Shares from time to time shall be
immediately paid out to the Non-Dissenting Company Shareholders (as
defined below) in accordance with their percentage interests (the
"Company Shareholder Percentage Interests"), which as to any
shareholder of Company who did not obtain an appraisal of their
shares of Company Common on account of the Mergers under the Texas
Corporate Law (a "Non-Dissenting Company Shareholder") shall be
determined by dividing (i) the number of shares of Company Common
held by such Non-Dissenting Company Shareholder at the Effective
Time, by (ii) the total number of shares of Company Common held by
all Non-Dissenting Company Shareholders at the Effective Time. All
cash dividends which may be paid on the Bank Escrow Shares from time
to time shall be immediately paid out to the Non-Dissenting Bank
Shareholders (as defined below) in accordance with their percentage
interests (the "Bank Shareholder Percentage Interests"), which as to
any Minority Shareholder (as defined in the Subsidiary Merger
Agreement) of Bank who did not obtain an appraisal of their shares of
Bank Common on account of the Subsidiary Bank Merger (as defined in
the Subsidiary Merger Agreement) under applicable Texas law (a "Non-
Dissenting Bank Shareholder") shall be determined by dividing (i) the
number of shares of Bank Common held by such Non-Dissenting Bank
Shareholder at the Effective Time, by (ii) the total number of shares
of Bank Common held by all Non-Dissenting Bank Shareholders at the
Effective Time.
SECTION 1.03. VOTING OF ESCROW SHARES. The Non-Dissenting
------------ -----------------------
Company Shareholders shall be entitled to exercise all voting rights
attendant to the Company Escrow Shares in accordance with the Company
Shareholder Percentage Interests and the Non-Dissenting Bank
Shareholders shall be entitled to exercise all voting rights
attendant to the Bank Escrow Shares in accordance with the Bank
Shareholder Percentage Interests. Escrow Agent shall distribute any
notices of meetings of shareholders of Boatmen's and proxy
solicitation materials which Escrow Agent receives to the Non-
Dissenting Company Shareholders and the Non-Dissenting Bank
Shareholders and otherwise cooperate with the Non-Dissenting Company
Shareholders and the Non-Dissenting Bank Shareholders in causing the
Escrow Shares to be voted in accordance with their directions.
ARTICLE TWO
GENERAL DUTIES OF ESCROW AGENT;
SHAREHOLDERS' COMMITTEE
SECTION 2.01. GENERAL DISTRIBUTION DUTIES OF ESCROW AGENT.
------------ -------------------------------------------
Escrow Agent shall hold the Escrow Shares as agent for the parties
hereto and shall distribute the Escrow Shares only in accordance with
the terms and provisions of this Escrow Agreement. Promptly upon
receipt, from time to time, of proper Instructions (as described
below) Escrow Agent shall distribute the Escrow Shares, or any
portion thereof, as such Instructions shall direct.
C-2
<PAGE> 261
SECTION 2.02. SHAREHOLDERS' COMMITTEE.
------------ -----------------------
(a) There is hereby irrevocably constituted and appointed a
committee (the "Shareholders' Committee") to act as the respective
agent, representative, and attorney-in-fact of the Non-Dissenting
Company Shareholders and the Non-Dissenting Bank Shareholders for all
purposes and with respect to all matters arising under this Escrow
Agreement. The powers and authority of the Shareholders' Committee
shall include, but not be limited to, the power and authority to
amend and vary this Escrow Agreement as permitted herein, to give and
accept notices hereunder, to enter into any agreement or other
instrument with respect to the defense or settlement of the WNB Claim
or with respect to any judgment with respect thereto, to enter into
one or more agreements or other instruments in furtherance of their
duties under this Escrow Agreement, to maintain or defend any actions
or claims on behalf of the Non-Dissenting Company Shareholders and
the Non-Dissenting Bank Shareholders, and to otherwise exercise all
rights and privileges necessary and appropriate to carry out the
purposes and intent of this Escrow Agreement.
(b) The initial members of the Shareholders' Committee shall be
- ------------, -------------, and --------------. In the event any
member of the Shareholders' Committee becomes unable or unwilling to
serve for any reason, then the remaining members of the Shareholders'
Committee shall appoint a successor. All decisions of the
Shareholders' Committee shall be made by a majority vote. Any
written Instruction, agreement or notice of the Shareholders'
Committee delivered to Boatmen's or Escrow Agent shall be deemed
valid and binding if signed by a majority of the Shareholders'
Committee.
(c) The members of the Shareholders' Committee shall receive no
compensation for their services.
(d) The Shareholders' Committee shall be entitled to rely on any
communication or document which they believe to be genuine. No
member of the Shareholders' Committee nor any of his employees,
attorneys and other agents shall be liable for any action or omission
on their respective parts except for willful misconduct. The members
of the Shareholders' Committee are acting as a convenience to the
Non-Dissenting Company Shareholders and the Non-Dissenting Bank
Shareholders and shall have no duties or liabilities beyond those
expressly assumed by them in this Escrow Agreement. The
Shareholders' Committee shall not be required to make any inquiry or
investigation concerning any matter other than those expressly
contemplated hereunder, nor shall the Shareholders' Committee be
deemed to have made any representation or warranty of any kind to any
Non-Dissenting Company Shareholder or any Non-Dissenting Bank
Shareholder.
ARTICLE THREE
DEFENSE OF WNB CLAIM;
PAYMENT OF WNB COSTS AND EXPENSES
SECTION 3.01. DEFENSE OF WNB CLAIM. After the Effective Time,
------------ --------------------
Boatmen's shall cause Citizens or First Amarillo, as successor by
merger with Citizens (collectively, "Bank"), to consult and confer
with the Shareholders' Committee, and endeavor to agree, regarding
the defense and settlement of the WNB Claim on an ongoing basis
throughout the period during which Escrow Shares are held under this
Escrow Agreement. If, however, Bank and the Shareholders' Committee
shall fail to agree upon any defense strategy, selection of counsel
or any other aspect of the defense or settlement of the WNB Claim,
then the decision of Bank shall be binding and controlling for all
purposes; provided, however, that Bank shall not settle or enter into
-------- -------
any agreement to settle the WNB Claim without the prior written
agreement of the
C-3
<PAGE> 262
Shareholders' Committee; and provided, further, however, that Bank shall
-------- ------- -------
appeal to the first appropriate appellate court any judgments entered on
the WNB Claim where proper grounds exist therefor unless the Shareholders'
Committee shall agree in writing that such appeal need not be taken.
SECTION 3.02. PAYMENT OF WNB COSTS AND EXPENSES. Bank shall
------------ ---------------------------------
pay, as incurred, all costs and expenses of responding to and
defending the WNB Claim, including without limitation attorneys'
fees, court costs, deposition expenses, expert witness fees, appeal
bonds, other expenses incidental to litigation, and the fees of
Escrow Agent described in Section 5.01 hereof (the "WNB Costs and
Expenses"). Bank shall, upon request by the Shareholders' Committee
from time to time, advise the Shareholders' Committee of the amount
of WNB Costs and Expenses incurred as of the date of such request and
provide the Shareholders' Committee with supporting documentation
(such as legal fee statements, invoices, etc.).
ARTICLE FOUR
TERMINATION OF ESCROW AGREEMENT;
DISTRIBUTION OF ESCROW SHARES
SECTION 4.01. TERMINATION OF ESCROW AGREEMENT. This Escrow
------------ -------------------------------
Agreement shall terminate, and all remaining Escrow Shares shall be
distributed to the parties entitled thereto as provided in Section
4.03 hereof, upon (i) the rendering of a final and non-appealable
judgment on the WNB Claim (or, if such judgment is not final and non-
appealable, Bank and the Shareholders' Committee shall have agreed in
writing that no appeal shall be taken thereof); or (ii) the
settlement or other final resolution or termination of the WNB Claim
which includes, as an unconditional term thereof, the release of Bank
and its successors from all liability with respect to the WNB Claim.
SECTION 4.02. INTERIM DISTRIBUTION PRIOR TO TERMINATION OF
------------ -------------------------------------------
ESCROW AGREEMENT. If Bank should receive a bona fide written offer
- ----------------
from Western National Bank to settle the WNB Claim for a specific,
absolute amount and such offer includes, as an unconditional term
thereof, the release of Bank and its successors from all liability
with respect to the WNB Claim (a "Settlement Offer") and Bank (after
consultation with the Shareholders' Committee) shall determine not to
accept such Settlement Offer, then Bank and the Shareholders'
Committee shall deliver joint written Instructions to Escrow Agent
directing Escrow Agent to distribute to the Non-Dissenting Company
Shareholders and the Non-Dissenting Bank Shareholders as soon as
practicable, but in no event more than 10 business days after the
receipt of such Instructions, such number of Escrow Shares as shall
equal the product of (A) multiplied by (B), where (A) equals the
total number of Escrow Shares and (B) equals a fraction, the
numerator of which shall equal the difference between $1,000,000 and
115% of the amount of the Settlement Offer, and the denominator of
which shall equal $1,000,000 (the "Interim Distribution"). Escrow
Agent shall distribute (i) 92.955% of the Interim Distribution to the
Non-Dissenting Company Shareholders pro rata in accordance with their
Company Shareholder Percentage Interests, and (ii) 7.045% of the
Interim Distribution to the Non-Dissenting Bank Shareholders pro rata
in accordance with their Bank Shareholder Percentage Interests.
SECTION 4.03. DISTRIBUTION UPON TERMINATION OF ESCROW AGREEMENT.
------------ -------------------------------------------------
Upon the termination of this Escrow Agreement as provided in Section
4.01 hereof, Bank and the Shareholders' Committee shall deliver joint
written Instructions to Escrow Agent directing Escrow Agent to
distribute to Boatmen's as soon as practicable, but in no event more
than 10 business days after the receipt of such Instructions, such
number of Escrow Shares as shall equal the product of (A) multiplied
by (B), where (A) equals the total number of Escrow Shares (without
reduction for any Interim Distribution which may have been made
pursuant to
C-4
<PAGE> 263
Section 4.02 hereof), and (B) equals a fraction, the numerator of which
shall equal the sum of (i) 50% of the first $150,000 paid or payable by
Bank for any judgment on, or settlement of, the WNB Claim and all WNB
Costs and Expenses, and (ii) 100% of all such amounts paid or payable by
Bank in excess of $150,000, and (B) the denominator of which shall equal
$1,000,000 (the "Bank Distribution"). Escrow Agent shall promptly
distribute (i) 92.955% of any remaining Escrow Shares held by Escrow Agent
after the Bank Distribution to the Non-Dissenting Company Shareholders pro
rata in accordance with their Company Shareholder Percentage Interests,
and (ii) 7.045% of any remaining Escrow Shares held by Escrow Agent after
the Bank Distribution to the Non-Dissenting Bank Shareholders pro
rata in accordance with their Bank Shareholder Percentage Interests.
SECTION 4.04. NO FRACTIONAL SHARES. The number of Escrow Shares
------------ --------------------
to be distributed by Escrow Agent pursuant to this Article Four shall
be rounded by Escrow Agent, in its sole discretion, to whole shares
so that no party shall receive a fractional share interest in the
Escrow Shares.
ARTICLE FIVE
PROVISIONS CONCERNING ESCROW AGENT
SECTION 5.01. COMPENSATION. In consideration of its obligations
------------ ------------
and duties hereunder, Escrow Agent shall be entitled to receive its
standard fees as agreed upon from time to time by Boatmen's and the
Shareholders' Committee. Such compensation shall be paid by Bank as
such compensation shall be earned and become due and one-half of such
compensation shall be deemed a WNB Cost and Expense.
SECTION 5.02. RESPONSIBILITY OF ESCROW AGENT. Escrow Agent
------------ ------------------------------
shall have no duties or obligations other than as stated herein and
shall be protected in acting upon notices, Instructions, agreements,
certificates or other written communications, not only as to the due
execution and the validity and effectiveness of their provisions, but
also as to the truth of any information therein contained which it
shall in good faith believe to be valid. In the event that Escrow
Agent receives conflicting Instructions or is in doubt with respect
to any matter with respect to any Instructions, Escrow Agent may, at
any time, upon notice to Boatmen's and the Shareholders' Committee,
either (a) hold the Escrow Shares until otherwise directed by an
order, decree or judgment of a court of competent jurisdiction which,
by lapse of time or otherwise, shall no longer be or shall not be
subject to appeal or review or (b) deposit the Escrow Shares in any
court of competent jurisdiction pending the final determination of
any dispute among the parties hereto. Escrow Agent shall have no
responsibility or liability to any person, whether or not a party to
this Escrow Agreement, for any act or omission of any kind so long as
it has acted in good faith upon the terms and provisions of this
Escrow Agreement or any Instructions or other written communications
hereafter delivered to it as contemplated by this Escrow Agreement.
SECTION 5.03. INDEMNIFICATION. Escrow Agent shall be
------------ ---------------
indemnified and held harmless by Bank against any and all costs,
losses, claims, damages, liabilities and expenses, including
reasonable costs of investigations, court costs, attorneys' fees, and
disbursements, which may be imposed upon Escrow Agent in connection
with its acceptance of appointment as Escrow Agent hereunder,
including any litigation arising from this Escrow Agreement involving
the subject matter hereof, and all such costs, expenses, and
disbursements shall be for the account of the escrow created hereby
and one-half of such costs, expenses and disbursements shall be
deemed a WNB Cost and Expense.
C-5
<PAGE> 264
SECTION 5.04. LEGAL ACTION. Escrow Agent shall have no
------------ ------------
obligation to take any legal action in connection with this Escrow
Agreement or towards its enforcement, or to appear in, prosecute or
defend any action or legal proceeding which would or might involve it
in any costs, expense, loss or liability unless adequate security and
indemnity shall be furnished.
ARTICLE SIX
MISCELLANEOUS
SECTION 6.01. AMENDMENTS. This Escrow Agreement may only be
------------ ----------
amended by a document in writing executed by the parties hereto.
SECTION 6.02. NOTICES. Any notices, communications or
------------ -------
Instructions required or permitted hereunder shall be in writing and
shall be deemed to have been given or made on the date of delivery,
in the case of hand delivery, or three business days after it is sent
by United States Registered Mail, postage prepaid, or upon receipt if
transmitted by any other means, addressed (in any case) as follows:
(a) if to Boatmen's (or Bank):
Boatmen's Bancshares, Inc.
One Boatmen's Plaza
800 Market Street
St. Louis, Missouri 63102
Attn: Gregory L. Curl
-and-
Boatmen's First National Bank of Amarillo
Eighth & Taylor
Amarillo, Texas 79101
Attn: Donald E. Powell
with a copy to:
Thomas C. Erb, Esq.
Lewis, Rice & Fingersh
500 North Broadway, Ste. 2000
St. Louis, Missouri 63102
(b) if to the Shareholders' Committee:
------------------------
------------------------
------------------------
C-6
<PAGE> 265
------------------------
------------------------
------------------------
------------------------
------------------------
------------------------
with a copy to:
------------------------
------------------------
------------------------
(c) if to Escrow Agent:
------------------------
------------------------
------------------------
(d) or, in each case, to such other address as may be
specified in writing to each of the parties hereto.
SECTION 6.03. SUCCESSORS AND ASSIGNS. This Escrow Agreement
------------ ----------------------
shall be binding upon the parties and each of its successors and
assigns. Nothing contained in this Escrow Agreement, express or
implied, is intended to confer upon any person other than the parties
hereto and their respective successors and assigns and the Non-
Dissenting Company Shareholders and Non-Dissenting Bank Shareholders,
as aforesaid, any rights or remedies under or by reason of this
Escrow Agreement, except that Boatmen's shall have the right to act
through any of its subsidiaries, including Bank or any successor
thereto, and such subsidiary shall be deemed to have all the rights
and powers of Boatmen's hereunder.
SECTION 6.04. COUNTERPARTS. This Escrow Agreement may be
------------ ------------
executed simultaneously in any number of counterparts, each of which
shall be deemed an original but all of which together shall
constitute one and the same instrument.
SECTION 6.05. GOVERNING LAW. This agreement shall be construed
------------ -------------
and governed by the laws of the State of Texas.
IN WITNESS WHEREOF, the parties hereto have hereunto set their
hands all on the day and year first above written.
BOATMEN'S BANCSHARES, INC.
By---------------------------------
Gregory L. Curl
Executive Vice President
C-7
<PAGE> 266
BOATMEN'S-TEXAS, INC.
By---------------------------------
Gregory L. Curl
Executive Vice President
DALHART BANCSHARES, INC.
By---------------------------------
--------------------
--------------------
DALHART BANCSHARES OF DELAWARE, INC.
By---------------------------------
--------------------
--------------------
C-8
<PAGE> 267
CITIZENS STATE BANK OF DALHART
By---------------------------------
--------------------
--------------------
--------------------------
By---------------------------------
--------------------
--------------------
THE FOREGOING ESCROW AGREEMENT IS HEREBY ACKNOWLEDGED AND JOINED
IN AS OF THE DATE FIRST ABOVE WRITTEN BY THE UNDERSIGNED SHAREHOLDERS'
COMMITTEE:
------------------------------------
-----------------------
------------------------------------
-----------------------
------------------------------------
-----------------------
C-9
<PAGE> 268
EXHIBIT D
EXCERPTS OF TEXAS BUSINESS CORPORATION ACT (DISSENTERS' RIGHTS)
5.11 RIGHTS OF DISSENTING SHAREHOLDERS IN THE EVENT OF
CERTAIN CORPORATE ACTIONS.-A. Any shareholder of a domestic
corporation shall have the right to dissent from any of the following
corporate actions:
(1) Any plan of merger to which the corporation is a party if
shareholder approval is required by Article 5.03 or 5.16 of this Act
and the shareholder holds shares of a class or series that was
entitled to vote thereon as a class or otherwise;
(2) Any sale, lease, exchange or other disposition (not
including any pledge, mortgage, deed of trust or trust indenture
unless otherwise provided in the articles of incorporation) of all,
or substantially all, the property and assets, with or without good
will, of a corporation requiring the special authorization of the
shareholders as provided by this Act;
(3) Any plan of exchange pursuant to Article 5.02 of this Act in
which the shares of the corporation of the class or series held by
the shareholder are to be acquired.
B. Notwithstanding the provisions of Section A of this Article,
a shareholder shall not have the right to dissent from any plan of
merger in which there is a single surviving or new domestic or
foreign corporation, or from any plan of exchange, if (1) the shares
held by the shareholder are part of a class shares of which are
listed on a national securities exchange, or are held of record by
not less than 2,000 holders, on the record date fixed to determine
the shareholders entitled to vote on the plan of merger or the plan
of exchange, and (2) the shareholder is not required by the terms of
the plan of merger or the plan of exchange to accept for his shares
any consideration other than (a) shares of a corporation that,
immediately after the effective time of the merger or exchange, will
be part of a class or series of shares of which are (i) listed, or
authorized for listing upon official notice of issuance, on a
national securities exchange, or (ii) held of record by not less than
2,000 holders, and (b) cash in lieu of fractional shares otherwise
entitled to be received. (Last amended by Ch. 901 L. '91, eff.
8-26-91.)
5.12 PROCEDURE FOR DISSENT BY SHAREHOLDERS AS TO SAID
CORPORATE ACTION.-A. Any shareholder of any domestic corporation who
has the right to dissent from any of the corporate actions referred
to in Article 5.11 of this Act may exercise that right to dissent
only by complying with the following procedures:
(1) (a) With respect to proposed corporate action that is
submitted to a vote of shareholders at a meeting, the shareholder
shall file with the corporation, prior to the meeting, a written
objection to the action, setting out that the shareholder's right to
dissent will be exercised if the action is effective and giving the
shareholder's address, to which notice thereof shall be delivered or
mailed in that event. If the action is effected and the shareholder
shall not have voted in favor of the action, the corporation, in the
case of action other than a merger, or the surviving or new
corporation (foreign or domestic) or other entity that is liable to
discharge the shareholder's right of dissent, in the case of a
merger, shall, within ten (10) days after the action is effected,
deliver or mail to the shareholder written notice that the action has
been effected, and the shareholder may, within ten (10) days from the
delivery or mailing of the notice, make written
D-1
<PAGE> 269
demand on the existing, surviving, or new corporation (foreign or
domestic) or other entity, as the case may be, for payment of the fair
value of the shareholder's shares. The fair value of the shares shall be
the value thereof as of the day immediately preceding the meeting,
excluding any appreciation or depreciation in anticipation of the
proposed action. The demand shall state the number and class of the
shares owned by the shareholder and the fair value of the shares as
estimated by the shareholder. Any shareholder failing to make demand
within the ten (10) day period shall be bound by the action.
(b) With respect to proposed corporate action that is approved
pursuant to Section A of Article 9.10 of this Act, the corporation,
in the case of action other than a merger, and the surviving or new
corporation (foreign or domestic) or other entity that is liable to
discharge the shareholder's right of dissent, in the case of a
merger, shall, within ten (10) days after the date the action is
effected, mail to each shareholder of record as of the effective date
of the action notice of the fact and date of the action and that the
shareholder may exercise the shareholder's right to dissent from the
action. The notice shall be accompanied by a copy of this Article
and any articles or documents filed by the corporation with the
Secretary of State to effect the action. If the shareholder shall
not have consented to the taking of the action, the shareholder may,
within twenty (20) days after the mailing of the notice, make written
demand on the existing, surviving, or new corporation (foreign or
domestic) or other entity, as the case may be, for payment of the
fair value of the shareholder's shares. The fair value of the shares
shall be the value thereof as of the date the written consent
authorizing the action was delivered to the corporation pursuant to
Section A of Article 9. 10 of this Act, excluding any appreciation or
depreciation in anticipation of the action. The demand shall state
the number and class of shares owned by the dissenting shareholder
and the fair value of the shares as estimated by the shareholder.
Any shareholder failing to make demand within the twenty (20) day
period shall be bound by the action.
(2) Within twenty (20) days after receipt by the existing,
surviving, or new corporation (foreign or domestic) or other entity,
as the case may be, of a demand for payment made by a dissenting
shareholder in accordance with Subsection (1) of this Section, the
corporation (foreign or domestic) or other entity shall deliver or
mail to the shareholder a written notice that shall either set out
that the corporation (foreign or domestic) or other entity accepts
the amount claimed in the demand and agrees to pay that amount within
ninety (90) days after the date on which the action was effected,
and, in the case of shares represented by certificates, upon the
surrender of the certificates duly endorsed, or shall contain an
estimate by the corporation (foreign or domestic) or other entity of
the fair value of the shares, together with an offer to pay the
amount of that estimate within ninety (90) days after the date on
which the action was effected, upon receipt of notice within sixty
(60) days after that date from the shareholder that the shareholder
agrees to accept that amount and, in the case of shares represented
by certificates, upon the surrender of the certificates duly
endorsed.
(3) If, within sixty (60) days after the date on which the
corporate action was effected, the value of the shares is agreed upon
between the shareholder and the existing, surviving, or new
corporation (foreign or domestic) or other entity, as the case may
be, payment for the shares shall be made within ninety (90) days
after the date on which the action was effected and, in the case of
shares represented by certificates, upon surrender of the
certificates duly endorsed. Upon payment of the agreed value, the
shareholder shall cease to have any interest in the shares or in the
corporation.
B. If, within the period of sixty (60) days after the date on
which the corporate action was effected, the shareholder and the
existing, surviving, or new corporation (foreign or domestic) or
other entity, as the case may be, do not so agree, then the
shareholder or the corporation (foreign or domestic) or other entity
may, within sixty (60) days after the expiration of the sixty (60)
day period, file a petition
D-2
<PAGE> 270
in any court of competent jurisdiction in the county in which the
principal office of the domestic corporation is located, asking for a
finding and determination of the fair value of the shareholder's shares.
Upon the filing of any such petition by the shareholder, service of a copy
thereof shall be made upon the corporation (foreign or domestic) or other
entity, which shall, within ten (10) days after service, file in the
office of the clerk of the court in which the petition was filed a list
containing the names and addresses of all shareholders of the domestic
corporation who have demanded payment for their shares and with whom
agreements as to the value of their shares have not been reached by the
corporation (foreign or domestic) or other entity. If the petition
shall be filed by the corporation (foreign or domestic) or other
entity, the petition shall be accompanied by such a list. The clerk
of the court shall give notice of the time and place fixed for the
hearing of the petition by registered mail to the corporation
(foreign or domestic) or other entity and to the shareholders named
on the list at the addresses therein stated. The forms of the
notices by mail shall be approved by the court. All shareholders
thus notified and the corporation (foreign or domestic) or other
entity shall thereafter be bound by the final judgment of the court.
C. After the hearing of the petition, the court shall determine
the shareholders who have complied with the provisions of this
Article and have become entitled to the valuation of and payment for
their shares, and shall appoint one or more qualified appraisers to
determine that value. The appraisers shall have power to examine any
of the books and records of the corporation the shares of which they
are charged with the duty of valuing, and they shall make a
determination of the fair value of the shares upon such investigation
as to them may seem proper. The appraisers shall also afford a
reasonable opportunity to the parties interested to submit to them
pertinent evidence as to the value of the shares. The appraisers
shall also have such power and authority as may be conferred on
Masters in Chancery by the Rules of Civil Procedure or by the order
of their appointment.
D. The appraisers shall determine the fair value of the shares
of the shareholders adjudged by the court to be entitled to payment
for their shares and shall file their report of that value in the
office of the clerk of the court. Notice of the filing of the report
shall be given by the clerk to the parties in interest. The report
shall be subject to exceptions to be heard before the court both upon
the law and the facts. The court shall by its judgment determine the
fair value of the shares of the shareholders entitled to payment for
their shares and shall direct the payment of that value by the
existing, surviving, or new corporation (foreign or domestic) or
other entity, together with interest thereon, beginning 91 days after
the date on which the applicable corporate action from which the
shareholder elected to dissent was effected to the date of such
judgment, to the shareholders entitled to payment. The judgment
shall be payable to the holders of uncertificated shares immediately
but to the holders of shares represented by certificates only upon,
and simultaneously with, the surrender to the existing, surviving, or
new corporation (foreign or domestic) or other entity, as the case
may be, of duly endorsed certificates for those shares. Upon payment
of the judgment, the dissenting shareholders shall cease to have any
interest in those shares or in the corporation. The court shall
allow the appraisers a reasonable fee as court costs, and all court
costs, shall be allotted between the parties in the manner that the
court determines to be fair and equitable.
E. Shares acquired by the existing, surviving, or new
corporation (foreign or domestic) or other entity, as the case may
be, pursuant to the payment of the agreed value of the shares or
pursuant to payment of the judgment entered for the value of the
shares, as in this Article provided, shall, in the case of a merger,
be treated as provided in the plan of merger and, in all other cases,
may be held and disposed of by the corporation as in the case of
other treasury shares.
D-3
<PAGE> 271
F. The provisions of this Article shall not apply to a merger
if, on the date of the filing of the articles of merger, the
surviving corporation is the owner of all the outstanding shares of
the other corporations, domestic or foreign, that are parties to the
merger.
G. In the absence of fraud in the transaction, the remedy
provided by this Article to a shareholder objecting to any corporate
action referred to in Article 5.11 of this Act is the exclusive
remedy for the recovery of the value of his shares or money damages
to the shareholder with respect to the action. If the existing,
surviving, or new corporation (foreign or domestic) or other entity,
as the case may be, complies with the requirements of this Article,
any shareholder who fails to comply with the requirements of this
Article shall not be entitled to bring suit for the recovery of the
value of his shares or money damages to the shareholder with respect
to the action. (Last amended by Ch. 215, L. '93, eff. 9-1-93.)
5.13 PROVISIONS AFFECTING REMEDIES OF DISSENTING
SHAREHOLDERS.-A. Any shareholder who has demanded payment for his
shares in accordance with either Article 5.12 or 5.16 of this Act
shall not thereafter be entitled to vote or exercise any other rights
of a shareholder except the right to receive payment for his shares
pursuant to the provisions of those articles and the right to
maintain an appropriate action to obtain relief on the ground that
the corporate action would be or was fraudulent, and the respective
shares for which payment has been demanded shall not thereafter be
considered outstanding for the purposes of any subsequent vote of
shareholders.
B. Upon receiving a demand for payment from any dissenting
shareholder, the corporation shall make an appropriate notation
thereof in its shareholder records. Within twenty (20) days after
demanding payment for his shares in accordance with either Article
5.12 or 5.16 of this act, each holder of certificates representing
shares so demanding payment shall submit such certificates to the
corporation for notation thereon that such demand has been made. The
failure of holders of certificated shares to do so shall, at the
option of the corporation, terminate such shareholder's rights under
Articles 5.12 and 5.16 of this Act unless a court of competent
jurisdiction for good and sufficient cause shown shall otherwise
direct. If uncertificated shares for which payment has been demanded
or shares represented by a certificate on which notation has been so
made shall be transferred, any new certificate issued therefor shall
bear similar notation together with the name of the original
dissenting holder of such shares and a transferee of such shares
shall acquire by such transfer no rights in the corporation other
than those which the original dissenting shareholder had after making
demand for payment of the fair value thereof.
C. Any shareholder who has demanded payment for his shares in
accordance with either Article 5.12 or 5.16 of this Act may withdraw
such demand at any time before payment for his shares or before any
petition has been filed pursuant to Article 5.12 or 5.16 of this Act
asking for a finding and determination of the fair value of such
shares, but no such demand may be withdrawn after such payment has
been made or, unless the corporation shall consent thereto, after any
such petition has been filed. If, however, such demand shall be
withdrawn as hereinbefore provided, or if pursuant to Section B of
this Article the corporation shall terminate the shareholder's rights
under Article 5.12 or 5.16 of this Act, as the case may be, or if no
petition asking for a finding and determination of fair value of such
shares by a court shall have been filed within the time provided in
Article 5.12 or 5.16 of this Act, as the case may be, or if after the
hearing of a petition filed pursuant to Article 5.12 or 5.16, the
court shall determine that such shareholder is not entitled to the
relief provided by those articles, then, in any such case, such
shareholder and all persons claiming under him shall be conclusively
presumed to have approved and ratified the corporate action from
which he dissented and shall be bound thereby, the right of such
shareholder to be paid the fair value of his shares shall cease, and
his status as a shareholder shall be restored without prejudice to any
D-4
<PAGE> 272
corporate proceedings which may have been taken during the
interim, and such shareholder shall be entitled to receive any
dividends or other distributions made to shareholders in the interim.
(Last amended by Ch. 215, L. '93, eff. 9-1-93.)
D-5
<PAGE> 273
EXHIBIT E
EXCERPTS OF TEXAS BANKING CODE (DISSENTERS' RIGHTS)
ART. 342-305. MERGER--TRUST POWERS
Any two or more state banks, or if national banks are hereafter
authorized by the laws of the United States to participate in such a
merger, any one or more state banks and any one or more national
banks domiciled in this State, or any state bank and any state or
federal savings and loan association or state or federal savings bank
authorized by the laws of this state or the United States to
participate in a merger, may, with the approval of the Banking
Commissioner and the written consent of the owners of record of two-
thirds of the capital of each of said institutions, be merged. Said
merging institutions shall file with the Banking Commissioner:
(1) A statement of the plan of merger approved by the board of
directors or managers, as appropriate, of each merging institution,
by a majority vote of the qualified directors or managers.
(2) Certificate of merger stating the facts required by Article
30 or Article 62, as appropriate, of this chapter and executed and
acknowledged by a majority of the qualified directors or managers of
each merging institution.
The Banking Commissioner shall thereupon investigate the
condition of the merging institutions and if the Commissioner finds
that the state bank which will result from the merger (hereafter
called the "resulting bank") will be solvent and its capital
unimpaired; that it will have adequate capital structure; that such
merger does not violate the anti-trust laws of this state; and that
the resulting bank has in all respects complied with the laws of this
State relative to the incorporation of State banks, the Commissioner
may approve such merger, and, if the Commissioner so approves, the
Commissioner shall deliver to the resulting bank a certified copy of
the certificate of merger, which certificate shall constitute the
charter and articles of association of the resulting bank. The
resulting bank shall be deemed a continuation in entity and identity
of each of the institutions involved in the merger; shall be subject
to all the liabilities, obligations, duties and relations of each
merging institution; and shall without the necessity of any
conveyance, assignment or transfer become the owner of all of the
assets of every kind and character formerly belonging to the merging
institutions; further, provided, that if any merging institution
shall at the time of the merger be acting as trustee, guardian,
executor, administrator, or in any other fiduciary capacity, the
resulting bank shall, without the necessity of any judicial action or
action by the creator of such trust, continue such office, trust or
fiduciary relationship and shall perform all of the duties and
obligations and exercise all of the powers and authority connected
with or incidental to such fiduciary relationship in the same manner
as though the resulting bank had been originally named or designated
as such fiduciary.
The naming or designating by a testator, or the creator of a
living trust, of any one of the merging institutions to act as
trustee, guardian, executor or in any other fiduciary capacity shall
be considered the naming or designating of the bank resulting from
the merger.
A stockholder may dissent from the merger by following the
procedure provided by Article 5.12, Texas Business Corporation Act.
That procedure applies to a merger under this article, as if the
state bank were a corporation organized under the Texas Business
Corporation Act.
E-1
<PAGE> 274
Amended by Acts 1985, 69th Leg., ch. 639, Section 7, eff. Aug. 26, 1985;
Acts 1989, 71st Leg., ch. 780, Section 33, eff. Sept. 1, 1989.
Redesignated as Chapter III, Art. 5 and amended by Acts 1993, 73rd
Leg., ch. 765, Section 3, eff. Aug. 30, 1993. Amended by Acts 1993, 73rd
Leg., ch. 944, Section 2, eff. Aug. 30, 1993.
E-2
<PAGE> 275
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 351.355(1) and (2) of The General and Business
Corporation Law of the State of Missouri provides that a corporation
may indemnify any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or
proceeding by reason of the fact that he is or was a director,
officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as director, officer, employee or
agent of another corporation, partnership, joint venture, trust or
other enterprise, against expenses, judgments, fines and amounts paid
in settlement actually and reasonably incurred by him in connection
with such action, suit or proceeding if he acted in good faith and in
a manner he reasonably believed to be in or not opposed to the best
interests of the corporation and, with respect to any criminal action
or proceeding, had no reasonable cause to believe his conduct was
unlawful, except that, in the case of an action or suit by or in the
right of the corporation, the corporation may not indemnify such
persons against judgments and fines and no person shall be
indemnified as to any claim, issue or matter as to which such person
shall have been adjudged to be liable for negligence or misconduct in
the performance of his duty to the corporation, unless and only to
the extent that the court in which the action or suit was brought
determines upon application that such person is fairly and reasonably
entitled to indemnity for proper expenses. Section 351.355(3)
provides that, to the extent that a director, officer, employee or
agent of the corporation has been successful in the defense of any
such action, suit or proceeding or any claim, issue or matter
therein, he shall be indemnified against expenses, including
attorney's fees, actually and reasonably incurred in connection with
such action, suit or proceeding. Section 351.355(7) provides that a
Missouri corporation may provide additional indemnification to any
person indemnifiable under subsection (1) or (2), provided such
additional indemnification is authorized by the corporation's
articles of incorporation or an amendment thereto or by a
shareholder-approved by-law or agreement, and provided further that
no person shall thereby be indemnified against conduct which was
finally adjudged to have been knowingly fraudulent, deliberately
dishonest or willful misconduct. Article XIII of the Restated
Articles of Incorporation of registrant provides that registrant
shall extend to its directors and certain of its executive officers
the indemnification specified in subsections (1) and (2) and the
additional indemnification authorized in subsection (7) and that it
may extend to other officers, employees and agents such
indemnification and additional indemnification.
Pursuant to a policy of directors' and officers' liability
insurance, with total annual limits of $55 million, registrant's
officers and directors are insured, subject to the limits, retention,
exceptions and other terms and conditions of such policy, against
liability for any actual or alleged error, misstatement, misleading
statement, act or omission, or neglect or breach of duty by the
directors or officers of registrant in the discharge of their duties
solely in their capacity as directors or officers of registrant,
individually or collectively, or any matter claimed against them
solely by reason of their being directors or officers of registrant.
II-1
<PAGE> 276
ITEM 21. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES.
(a) The following exhibits are filed as part of this
Registration Statement:
(2)(a) Agreement and Plan of Merger, dated May 19, 1994,
by and among Dalhart Bancshares, Inc., Dalhart
Bancshares of Delaware, Inc., Boatmen's
Bancshares, Inc. and Boatmen's Texas, Inc.
(Exhibit A to Joint Proxy Statement/Prospectus).
The Registrant agrees to furnish supplementally a
copy of any omitted schedule to the Commission
upon request;
(2)(b) Agreement to Merge, dated June 30, 1994, between
Boatmen's First National Bank of Amarillo and
Citizens State Bank of Dalhart, and joined by
Boatmen's Bancshares, Inc. (Exhibit B to Joint
Proxy Statement/Prospectus);
(2)(c) Escrow Agreement, dated ------------, 1994, by and
among Boatmen's Bancshares, Inc., Boatmen's Texas,
Inc., Dalhart Bancshares, Inc., Dalhart Bancshares
of Delaware, Inc., Citizens State Bank of Dalhart
and ------------ (Exhibit C to Joint Proxy
Statement/Prospectus);
(3)(a) Restated Articles of Incorporation of Boatmen's
Bancshares, Inc.;
(3)(b) Statement in Change of Registered Agent of Boatmen's
Bancshares, Inc.;
(3)(c) Amended Bylaws of Boatmen's Bancshares, Inc.;
(5) Opinion of Lewis, Rice & Fingersh regarding legality;
(8) Form of Opinion of Lewis, Rice & Fingersh regarding
federal income tax consequences;
(23)(a) Consent of Ernst & Young LLP;
(23)(b) Consent of GRA, Thompson, White & Co., P.A.;
(23)(c) Consent of KPMG Peat Marwick LLP;
(23)(d) Consent of KPMG Peat Marwick LLP;
(23)(e) Consent of KPMG Peat Marwick LLP;
(23)(f) Consent of KPMG Peat Marwick LLP;
(23)(g) Consent of Frost & Company;
(23)(h) Consent of Lewis, Rice & Fingersh (in opinion
regarding legality);
(23)(i) Consent of Lewis, Rice & Fingersh (in opinion
regarding federal income tax consequences);
II-2
<PAGE> 277
(24) Power of Attorney;
(99)(a) Form of Proxy Card for Dalhart Bancshares, Inc.
Special Meeting;
(99)(b) Form of Letter to Shareholders of Dalhart
Bancshares, Inc. to accompany Joint Proxy
Statement/Prospectus;
(99)(c) Form of Notice of Dalhart Bancshares, Inc. Special
Meeting;
(99)(d) Form of Proxy Card for Citizens State Bank of
Dalhart Special Meeting;
(99)(e) Form of Letter to Shareholders of Citizens State
Bank of Dalhart to accompany Joint Proxy
Statement/Prospectus;
(99)(f) Form of Notice of Citizens State Bank of Dalhart
Special Meeting;
(99)(g) Excerpts of the Texas Business Corporation Act
(Dissenters' Rights) (Exhibit D to Joint Proxy
Statement/Prospectus);
(99)(h) Excerpts of the Texas Banking Code (Dissenters'
Rights) (Exhibit E to Joint Proxy
Statement/Prospectus).
The following exhibits are incorporated herein by reference:
(2)(d) Agreement and Plan of Merger, dated August 18,
1994, by and among Worthen Banking Corporation,
Boatmen's Bancshares, Inc. and BBI Acquisition
Co.;
(4) Rights Agreement, dated as of August 14, 1990, of
Boatmen's Bancshares, Inc.;
Note: No long-term debt instrument issued by Boatmen's
Bancshares, Inc. exceeds 10% of the consolidated total
assets of Boatmen's Bancshares, Inc. and its
subsidiaries. In accordance with paragraph 4(iii) of
Item 601 of Regulation S-K, Boatmen's Bancshares, Inc.
will furnish to the S.E.C. upon request copies of
long-term debt instruments and related agreements.
(b) No financial statement schedules are required to be filed
herewith pursuant to Item 21(b) or (c) of this Form.
ITEM 22. UNDERTAKINGS.
(1) The undersigned Registrant hereby undertakes as follows:
That prior to any public reoffering of the securities registered
hereunder through the use of a prospectus which is a part of this
registration statement, by any person or party who is deemed to be an
underwriter within the meaning of Rule 145(c), the issuer undertakes
that such reoffering prospectus will contain the information called
for by the applicable registration form with respect to reofferings
by persons who may be deemed underwriters, in addition to the
information called for by the other Items of the applicable form.
II-3
<PAGE> 278
(2) The undersigned Registrant undertakes that every prospectus
(i) that is filed pursuant to paragraph (1) immediately preceding, or
(ii) that purports to meet the requirements of Section 10(a)(3) of
the Securities Act of 1933, as amended, and is used in connection
with an offering of securities subject to Rule 415, will be filed as
a part of an amendment to the registration statement and will not be
used until such amendment is effective, and that, for purposes of
determining any liability under the Securities Act of 1933, as
amended, 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) The undersigned Registrant hereby undertakes to respond to
requests for information that is incorporated by reference into the
prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form, within
one business day of receipt of such request, and to send the
incorporated documents by first class mail or other equally prompt
means. This includes information contained in documents filed
subsequent to the effective date of the registration statement
through the date of responding to the request.
(4) The undersigned Registrant hereby undertakes to supply by
means of a post-effective amendment all information concerning a
transaction, and the company being acquired involved therein, that
was not the subject of and included in the registration statement
when it became effective.
(5) The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of
1933, as amended, each filing of the Registrant's annual report
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange
Act of 1934, as amended (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of
the Securities Exchange Act of 1934, as amended) that is incorporated
by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(6) Insofar as indemnification for liabilities arising under the
Securities Act of 1933, as amended, may be permitted to directors,
officers and controlling persons of the Registrant pursuant to the
foregoing provisions (see Item 20 -- Indemnification of Directors and
Officers), or otherwise, the Registrant has been advised that in the
opinion of the Securities and Exchange Commission such
indemnification is against public policy expressed in the Securities
Act of 1933, as amended, and is, therefore, unenforceable. In the
event that a claim for indemnification against such liabilities
(other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is
asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction
the question whether such indemnification by it is against public
policy as expressed in the Securities Act of 1933, as amended, and
will be governed by the final adjudication of such issue.
II-4
<PAGE> 279
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as
amended, the Registrant has duly caused this Registration Statement
to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of St. Louis, State of Missouri, on
September 9, 1994.
BOATMEN'S BANCSHARES, INC.
By /s/ Andrew B. Craig, III
------------------------------------------------------
Andrew B. Craig, III
Chairman of the Board and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, as
amended, this Registration Statement has been signed by the following
persons in the capacities indicated on September 12, 1994.
<TABLE>
<C> <S>
/s/ Andrew B. Craig, III
- ------------------------------------ Chairman of the Board and Chief Executive
Andrew B. Craig, III Officer (principal executive officer)
/s/ James W. Kienker
- ------------------------------------ Executive Vice President and Chief Financial Officer
James W. Kienker (principal financial and accounting officer)
*
- ------------------------------------ President and Director
Samuel B. Hayes, III
*
- ----------------------------------- Vice Chairman and Director
John Peters MacCarthy
*
- ----------------------------------- Director
Richard L. Battram
*
- ----------------------------------- Director
B. A. Bridgewater, Jr.
*
- ----------------------------------- Director
William E. Cornelius
II-5
<PAGE> 280
*
- ----------------------------------- Director
Ilus W. Davis
*
- ----------------------------------- Director
John E. Hayes, Jr.
*
- ----------------------------------- Director
Lee M. Liberman
*
- ----------------------------------- Director
William E. Maritz
*
- ----------------------------------- Director
Andrew E. Newman
*
- ----------------------------------- Director
Jerry E. Ritter
*
- ----------------------------------- Director
William P. Stiritz
*
- ----------------------------------- Director
Albert E. Suter
*
- ----------------------------------- Director
Dwight D. Sutherland
*
- ----------------------------------- Director
Theodore C. Wetterau
/s/ James W. Kienker
- -----------------------------------
*Attorney-in-fact
</TABLE>
II-6
<PAGE> 281
INDEX TO EXHIBITS
Number Exhibit
- ------ -------
(2)(a) Agreement and Plan of Merger, dated May 19, 1994,
by and among Dalhart Bancshares, Inc., Dalhart
Bancshares of Delaware, Inc., Boatmen's
Bancshares, Inc. and Boatmen's Texas, Inc.
(Exhibit A to the Joint Proxy
Statement/Prospectus).
(2)(b) Agreement to Merge, dated June 30, 1994, between
Boatmen's First National Bank of Amarillo and
Citizens State Bank of Dalhart, and joined by
Boatmen's Bancshares, Inc. (Exhibit B to the Joint
Proxy Statement/Prospectus).
(2)(c) Escrow Agreement, dated ---------------, 1994, by and
among Boatmen's Bancshares, Inc., Boatmen's Texas,
Inc., Dalhart Bancshares, Inc., Dalhart Bancshares of
Delaware, Inc., Citizens State Bank of Dalhart and
----------------------- (Exhibit C to Joint Proxy
Statement/Prospectus);
(2)(d) Agreement and Plan of Merger, dated August 18, 1994, by
and among Worthen Banking Corporation, Boatmen's
Bancshares, Inc. and BBI Acquisition Co., Inc., is
incorporated herein by reference from the Boatmen's
Bancshares, Inc. Current Report on Form 8-K, dated
September 2, 1994.
(3)(a) Restated Articles of Incorporation of Boatmen's
Bancshares, Inc.
(3)(b) Statement of Change of Registered Agent of Boatmen's
Bancshares, Inc.
(3)(c) Amended Bylaws of Boatmen's Bancshares, Inc.
(4) Rights Agreement, dated as of August 14, 1990, of
Boatmen's Bancshares, Inc., is incorporated herein by
reference from the Boatmen's Bancshares, Inc.
Registration Statement on Form 8-A, dated August 14,
1990.
(5) Opinion of Lewis, Rice & Fingersh regarding legality.
(8) Form of Opinion of Lewis, Rice & Fingersh regarding
federal income tax consequences.
(23)(a) Consent of Ernst & Young LLP.
(23)(b) Consent of GRA, Thompson, White & Co., P.A.
(23)(c) Consent of KPMG Peat Marwick LLP.
(23)(d) Consent of KPMG Peat Marwick LLP.
(23)(e) Consent of KPMG Peat Marwick LLP.
(23)(f) Consent of KPMG Peat Marwick LLP.
(23)(g) Consent of Frost & Company.
(23)(h) Consent of Lewis, Rice & Fingersh (in opinion regarding
legality).
<PAGE> 282
Number Exhibit
- ------ -------
(23)(i) Consent of Lewis, Rice & Fingersh (in opinion
regarding federal income tax consequences).
(24) Power of Attorney.
(99)(a) Form of Proxy Card for Dalhart Bancshares, Inc. Special
Meeting.
(99)(b) Form of Letter to Shareholders of Dalhart Bancshares, Inc.
to accompany Joint Proxy Statement/Prospectus.
(99)(c) Form of Notice of Dalhart Bancshares, Inc. Special Meeting.
(99)(d) Form of Proxy Card for Citizens State Bank of Dalhart
Special Meeting.
(99)(e) Form of Letter to Shareholders of Citizens State Bank of
Dalhart to accompany Joint Proxy Statement/Prospectus.
(99)(f) Form of Notice of Citizens State Bank of Dalhart Special
Meeting.
(99)(g) Excerpts of the Texas Business Corporation Act (Dissenters'
Rights) (Exhibit D to Joint Proxy Statement/Prospectus).
(99)(h) Excerpts of the Texas Banking Code (Dissenters' Rights)
(Exhibit E to Joint Proxy Statement/Prospectus).
----------------------------------------
*Only pages of the manually signed original of the Registration
Statement are numbered sequentially.
<PAGE> 1
EXHIBIT (3)(A)
--------------
<PAGE> 2
RESTATED ARTICLES OF INCORPORATION
OF
BOATMEN'S BANCSHARES, INC.
On June 14, 1994, Restated Articles of Incorporation, as set
forth below, were adopted pursuant to Section 351.106(1) R.S.Mo.,
1990, as amended, by the affirmative vote of a majority of the Board
of Directors of Boatmen's Bancshares, Inc., a Missouri corporation.
The following Restated Articles of Incorporation correctly set forth
without change the corresponding provisions of the Articles of
Incorporation as theretofore amended and supersede the original
Articles of Incorporation and all amendments thereto.
ARTICLE I
The name of the corporation is Boatmen's Bancshares, Inc.
ARTICLE II
The address of its registered office in the State of Missouri is
One Boatmen's Plaza, 800 Market Street, St. Louis, Missouri 63101,
and the name of its registered agent at such address is Philip N.
McCarty.
ARTICLE III
The aggregate number of shares of all classes which this
corporation shall have authority to issue is One Hundred Sixty
Million Three Hundred Thousand (160,300,000) shares, of which One
Hundred Fifty Million (150,000,000) shares shall be common shares of
a par value of One Dollar ($1.00) each and Ten Million Three Hundred
Thousand (10,300,000) shares shall be preferred shares without par
value. The powers, designations, preferences and relative,
participating, optional and other rights, and qualifications,
limitations and restrictions thereof, are as follows:
COMMON SHARES: Subject to the rights of the preferred shares,
established as hereinafter set forth, the common shares shall have
all such powers and rights as provided by The General and Business
Corporation Law of Missouri and as are customarily attendant to such
shares; and
PREFERRED SHARES: Except with respect to the 7% Cumulative
Redeemable Preferred Stock, Series B (Stated Value $100.00 Per
Share), as to which the powers, designations, preferences and
relative, participating, optional and other rights, and
qualifications, limitations and restrictions thereof, are set forth
below, the Board of Directors of the corporation is hereby expressly
authorized to cause the preferred shares to be issued from time to
time, in series, and to provide, by resolution adopted prior to the
issue of shares of a particular series, the powers, designations,
preferences and relative, participating, optional and other rights
(including special rights to elect two (2) Directors), and
qualifications, limitations and restrictions thereof and all other
matters with respect thereto, as may be so provided for under The
General and Business Corporation Law of Missouri, as amended from
time to time.
7% CUMULATIVE REDEEMABLE PREFERRED STOCK, SERIES B
1. Designation. The designation of this series is "7%
Cumulative Redeemable Preferred Stock, Series B" (hereinafter
referred to as the "Series B Preferred Stock") and the number of
shares constituting such series is Thirty-Five Thousand and Forty-
Five (35,045). Shares of Series B Preferred Stock shall have a
stated value of $100.00 per share.
<PAGE> 3
2. Dividends. The holders of record of the shares of the
Series B Preferred Stock shall be entitled to receive, when and as
declared by the Board of Directors of the corporation, out of any
funds legally available for such purpose, cumulative cash dividends
at an annual dividend rate per share of 7% of the stated value
thereof, which amount is $7.00 per annum, per share, and no more.
Such dividends shall be payable each calendar quarter at the rate of
$1.75 per share on such dates as shall be fixed by resolution of the
Board of Directors of the corporation. The date from which dividends
on such shares shall be cumulative shall be the first day after said
shares are issued. Accumulations of dividends shall not bear
interest. No cash dividend shall be declared, paid or set apart for
any shares of common stock unless all dividends on all shares of the
Series B Preferred Stock at the time outstanding for all past
dividend periods and for the then current dividend shall have been
paid, or shall have been declared and a sum sufficient for the
payment thereof, shall have been set apart. Subject to the foregoing
provisions of this paragraph (2), cash dividends or other cash
distributions as may be determined by the Board of Directors of the
corporation, may be declared and paid upon the shares of the common
stock of the corporation from time to time out of funds legally
available therefor, and the shares of the Series B Preferred Stock
shall not be entitled to participate in any such cash dividend or
other such cash distribution so declared and paid or made on such
shares of common stock.
3. Redemption. From and after October 31, 1988, any holder
may, by written request, call upon the corporation to redeem all or
any part of said holder's shares of said Series B Preferred Stock at
a redemption price of $100.00 per share plus accumulated unpaid
dividends to the date said request for redemption is received by the
corporation and no more (the "Redemption Price"). Any such request
for redemption shall be accompanied by the certificates for which
redemption is requested, duly endorsed or with appropriate stock
power attached, in either case with signature guaranteed. Upon
receipt by the corporation of any such request for redemption from
any holder of the Series B Preferred Stock, the corporation shall
forthwith redeem said stock at the Redemption Price, provided that:
(i) full cumulative dividends have been paid or declared and set
apart for payment upon all shares of any series of preferred stock
ranking superior to the Series B Preferred Stock as to dividends or
other distributions (collectively the "Superior Stock"); and (ii) the
corporation is not then in default or in arrears with respect to any
sinking or analogous fund or call for tenders obligation or agreement
for the purchase, redemption or retirement of any shares of Superior
Stock. In the event that, upon receipt of a request for redemption,
either or both of the conditions set forth in clauses (i) and (ii)
above are not met, the corporation shall forthwith return said
request to the submitting shareholder along with a statement that the
corporation is unable to honor such request and explanation of the
reasons therefor. From and after the receipt by the corporation of
a request for redemption from any holder of said Series B Preferred
Stock, which request may be honored consistent with the foregoing
provisions, all rights of such holder in the Series B Preferred Stock
for which redemption is requested shall cease and terminate, except
only the right to receive the Redemption Price thereof, but without
interest.
4. Liquidation Preference. In the event of any voluntary or
involuntary liquidation, dissolution or winding up of the
corporation, the holders of the Series B Preferred Stock shall be
entitled to receive, subject to the provisions of paragraph 7 and
before any payment shall be made to the holders of the shares of
common stock, the amount of $100.00 each share, plus accumulated
dividends. After payment to the holders of the Series B Preferred
Stock of the full amount as aforesaid, the holders of the Series B
Preferred Stock as such shall have no right or claim to any of the
remaining assets which shall be distributed ratably to the holders of
the corporation's common stock. If, upon any such liquidation,
dissolution or winding up, the assets available therefore are not
sufficient to permit payments to the holders of Series B Preferred
Stock of the full amount as aforesaid, then subject to the provisions
of paragraph 7, the holders of the Series B Preferred Stock then
outstanding shall share ratably in the distribution of assets in
accordance with the sums which would be payable if such holders were
to receive the full amounts as aforesaid.
2
<PAGE> 4
5. Sinking Fund. There shall be no sinking fund applicable to
the shares of Series B Preferred Stock.
6. Conversion. The shares of Series B Preferred Stock shall
not be convertible into any shares of common stock or any other class
of shares, nor exchanged for any shares of common stock or any other
class of shares.
7. Superior Stock. The corporation may issue stock with
preferences superior or equal to the shares of the Series B Preferred
Stock without the consent of the holders thereof.
8. Voting Rights. Each share of the Series B Preferred Stock
shall be entitled to equal voting rights, share for share, with
each share of the common stock of the corporation.
ARTICLE IV
No holder of stock of the corporation shall be entitled as a
matter of right to subscribe for or purchase any part of any new or
additional issue of stock, or securities convertible into stock, of
any class whatsoever, whether now or hereafter authorized, and all
such additional shares of stock or other securities convertible into
stock may be issued and disposed of by the Board of Directors to such
person or persons and on such terms and for such consideration (so
far as may be permitted by law) as the Board of Directors, in its
absolute discretion, may deem advisable.
ARTICLE V
The number and class of shares to be issued before the
corporation shall commence business shall be one hundred (100) shares
of common stock with a par value of Ten Dollars ($10.00) per share.
The consideration to be paid therefor and the capital with which the
corporation shall commence business shall be One Thousand Dollars
($1,000.00). The corporation shall not commence business until
consideration of the value of at least One Thousand Dollars
($1,000.00) has been received for the issuance of shares.
ARTICLE VI
The name and place of residence of the incorporators are as
follows:
Names Residences
---------------------------------------
Arthur Blumeyer 41 Washington Terrace
St. Louis, Missouri
W. E. Burtelow 3999 Holly Hills Blvd.
St. Louis, Missouri
P. W. Herzog 43 Clermont Lane
Ladue Village
St. Louis County, Missouri
3
<PAGE> 5
ARTICLE VII
The number of Directors to constitute the Board of Directors
shall be twenty-seven (27); provided, however, that such number may
be fixed, from time to time, at not less than a minimum of fifteen
(15) nor more than a maximum (subject to the rights of the holders of
preferred shares as set forth below) of twenty-seven (27), by, or in
the manner provided in, the Bylaws of the corporation, and any such
change shall be reported to the Secretary of State of Missouri within
thirty (30) calendar days of such change. The Directors shall be
divided into three classes: Class I, Class II and Class III. Such
classes shall be as nearly equal in number as possible. The term of
office of the initial Class I Directors shall expire at the annual
meeting of shareholders of the corporation in 1988; the term of
office of the initial Class II Directors shall expire at the annual
meeting of shareholders of the corporation in 1986; and the term of
office of the initial Class III Directors shall expire at the annual
meeting of shareholders of the corporation in 1987; or in each case
when their respective successors are elected and have qualified. At
each annual election held after 1984, the Directors chosen to succeed
those whose terms then expire shall be identified as being of the
same class as the Directors they succeed and shall be elected for a
term of three (3) years expiring at the third succeeding annual
meeting or thereafter when their respective successors are elected
and have qualified. If the number of Directors is changed, any
increase or decrease in Directors shall be apportioned among the
classes so as to maintain all classes as nearly equal in number as
possible, and any additional Director elected to any class shall hold
office for a term which shall expire with the term of the directors
in such class. Notwithstanding the foregoing provisions respecting
the maximum number of directors and the terms of office and
classification of Directors, during any period when the holders of
preferred shares, voting as a class, have the special right to elect
two (2) Directors pursuant to Article III hereof, then and during the
time as such special right continues: (a) if the number of Directors
constituting the Board of Directors is in excess of twenty (20) then
the Board of Directors shall be decreased to twenty (20) in number;
and (b) the Board of Directors shall then be increased by two (2)
Directors who shall be elected by the holders of preferred shares
pursuant to such special right, voting as a class, at the next annual
meeting of shareholders, for a term of one (1) year until the next
annual meeting of shareholders and the election of their successors
by the holders of the preferred shares, or until the earlier
termination of such special right of the holders of preferred shares
to elect such Directors, all as provided for in Article III hereof.
At a meeting called expressly for that purpose, a Director of the
corporation or the entire Board of Directors (other than a Director
or Directors elected by the holders of preferred shares voting as a
class pursuant to their special right) may be removed without cause
only upon the affirmative vote of the holders of not less than eighty
percent (80%) of the shares entitled to vote generally in the
election of Directors; provided, however, that, if less than the
entire Board of Directors is to be so removed without cause, no one
of the Directors may be removed if the votes cast against such
Director's removal would be sufficient to elect such Director if then
cumulatively voted at an election of the class of Directors of which
such Director is a part. At a meeting called expressly for that
purpose, a Director (other than a Director elected by the holders of
preferred shares voting as a class pursuant to their special right)
may be removed by the shareholders for cause by the affirmative vote
of the holders of a majority of the shares entitled to vote upon his
election.
ARTICLE VIII
The duration of the corporation shall be perpetual.
4
<PAGE> 6
ARTICLE IX
The corporation is formed for the following purposes:
1. To purchase, subscribe for or otherwise acquire and own,
hold as an investment or otherwise, use, sell, assign, deal in,
transfer, mortgage, pledge, exchange or otherwise dispose of, alone
or in syndicates or otherwise in conjunction with others, shares of
capital stock, bonds, debentures, notes, evidences of indebtedness
and other securities, contracts or obligations of any corporation,
association, partnership, entity, or governmental, municipal or
public authority, domestic or foreign, and to pay therefor in whole
or in part, in cash or by exchanging therefor shares of the capital
stock, bonds, debentures, debenture stock, notes or other obligations
of this corporation or any other corporation, and while the owner or
holder of any such property to receive, collect and dispose of the
interest, dividends and income arising from such property, and to
possess and exercise in respect thereof all the rights, powers and
privileges of ownership, including all voting powers of any
securities so owned;
2. To purchase or otherwise acquire the whole or any part of
the property, assets, business, goodwill or rights and to undertake
or assume the whole or any part of the bonds, mortgages, franchises,
leases, contracts, indebtedness, guaranties, liabilities and
obligations of any person, firm, association, corporation or
organization, and to pay for the same or any part or combination
thereof in cash, shares of the capital stock, bonds, debentures,
debenture stock, notes, and other obligations of this corporation or
otherwise, or by undertaking and assuming the whole or any part of
the liabilities or obligations of the transferor; and to hold or in
any manner dispose of the whole or any part of the property and
assets so acquired or purchased, and to conduct in any lawful manner
the whole or any part of the business so acquired and to exercise all
the powers necessary or convenient in and about the conduct,
management and carrying on of such business;
3. To purchase or otherwise acquire, hold, sell, pledge,
transfer or otherwise dispose of, and to reissue or cancel the shares
of its own capital stock or any securities or other obligations of
this corporation;
4. To promote or assist financially, by loan, subsidy,
guaranty, contribution to capital or surplus, or otherwise,
corporations, syndicates, partnerships, individuals or associations
of all kinds, foreign or domestic, and in connection therewith to
execute mortgages, deeds of trust, other forms of encumbrances,
contracts and other types of written instruments;
5. To purchase or otherwise acquire and own, hold, lease,
develop, sell, exchange or otherwise use, deal in or dispose of,
mortgage or otherwise encumber, real property or any interest therein
and to purchase or otherwise acquire and own, hold, build, construct,
erect, manage, operate, repair, restore, and to dispose of by sale,
lease, mortgage or otherwise, buildings and structures of all types;
6. To purchase or otherwise acquire and own, hold, lease,
sell, or otherwise use, deal in or dispose of, mortgage or otherwise
encumber personal property of every kind and description or any
interest therein, and to operate, manage and maintain the same;
7. To acquire, own, hold, buy, sell, transfer and otherwise
dispose of patents and patent rights, trademarks and trade names,
copyrights, licenses, franchises, permits and other evidences of
right;
5
<PAGE> 7
8. In general to carry on any other lawful business whatsoever
in connection with the foregoing or which is calculated, directly or
indirectly, to promote the interest of the corporation or to enhance
the value of its properties;
9. To have and to exercise all powers necessary or incident to
carrying out its corporate purposes, to exercise all other powers
permitted by law, and to possess and enjoy all rights and powers
which now or at any time hereafter may be granted to or exercised by
a corporation of this character.
ARTICLE X
The Board of Directors shall have the power to make, alter,
amend or repeal the Bylaws of the corporation from time to time.
ARTICLE XI
The approval of any Business Combination shall, in addition to
any affirmative vote required by law, require the affirmative vote of
the holders of not less than eighty percent (80%) of the common
shares of the corporation then entitled to vote generally in the
election of directors of the corporation; provided, however, that any
such Business Combination may be approved on the affirmative vote
required by law if such Business Combination is approved by not less
than seventy-five percent (75%) of the entire Board of Directors of
the corporation. As used herein the term "Business Combination"
shall mean:
(i) Any merger or consolidation of the corporation or any
subsidiary of the corporation with (a) any Substantial Shareholder or
(b) any other corporation which, after such merger or consolidation,
would be a Substantial Shareholder, regardless of which entity
survives;
(ii) Any sale, lease, exchange, mortgage, pledge, transfer or
other disposition (in one transaction or a series of transactions) to
or with any Substantial Shareholder of all or substantially all of
the assets of the corporation or any subsidiary of the corporation,
or both;
(iii) The adoption of any plan or proposal for the liquidation
of the corporation proposed by or on behalf of a Substantial
Shareholder; or
(iv) Any transaction involving the corporation or any of its
subsidiaries, including the issuance or transfer of any securities
of, any reclassification of securities of, or any recapitalization
of, the corporation or any of its subsidiaries, or any merger or
consolidation of the corporation with any of its subsidiaries
(whether or not involving a Substantial Shareholder), if the
transaction would have the effect, directly or indirectly, of
increasing the proportionate share of the outstanding shares of any
class of equity or convertible securities of the corporation or any
subsidiary, of which a Substantial Shareholder is the Beneficial
Owner.
As used herein, the term "Substantial Shareholder" shall mean
and include any individual, corporation, partnership or other person
or entity which, together with its "Affiliates" and "Associates" (as
such terms were defined as of February 29, 1984 in Rule 12b-2 under
the Securities Exchange Act of 1934), is the "Beneficial Owner" (as
determined in accordance with the criteria set forth as of
February 29, 1984 under Rule 13d-3 under the Securities Exchange Act
of 1934) in the aggregate of more than five percent (5%) of the
outstanding shares of the corporation entitled to vote generally in
an election of Directors; and any Affiliate or Associate of any such
individual, corporation, partnership or other person or entity.
6
<PAGE> 8
ARTICLE XII
The corporation reserves the right to amend, alter, change or
repeal any provisions contained in these Articles of Incorporation in
the manner now or hereafter prescribed by law, and all rights
conferred upon shareholders herein are granted subject to this
reservation; provided, however, that any amendment, alteration or
repeal of the provisions of Article VII, Article XI or this proviso
to Article XII shall, in addition to any affirmative vote required by
law, require the affirmative vote of the holders of eighty percent
(80%) of the common shares of the corporation then entitled to vote
at a meeting of shareholders called for such purpose.
ARTICLE XIII
(1) The corporation shall indemnify each of its Directors, its
Chairman of the Board, its Vice Chairman of the Board, its President
and its Vice Presidents to the full extent specified by Section
351.355 of the Revised Statutes of Missouri, as amended from time to
time, (the "Indemnification Statute") and, in addition, shall
indemnify each of them against all expenses (including without
limitation all attorneys' fees, judgments, fines and amounts paid in
settlement) incurred by him in connection with any claim (including,
without limitation, any threatened, pending or completed action, suit
or proceeding, whether civil, criminal, administrative or
investigative and whether or not by or in the right of any
corporation) by reason of the fact that he is or was serving the
corporation or at the request of the corporation in any of the
capacities referred to in the Indemnification Statute or arising out
of his status in any such capacity, provided that the corporation
shall not indemnify any person from or on account of such person's
conduct which was finally adjudged to have been knowingly fraudulent,
deliberately dishonest or willful misconduct.
(2) The corporation may, to such extent as it deems appropriate
and as may be permitted by the Indemnification Statute, indemnify any
other person referred to in the Indemnification Statute against any
such expenses incurred by him in connection with any such claim by
reason of the fact that he is or was serving the corporation or at
the request of the corporation in any of such capacities or arising
out of his status in any such capacity.
(3) The corporation is authorized to give or supplement any of
the aforesaid indemnifications by bylaw, agreement or otherwise and
fund them by insurance to the extent it deems appropriate. Amounts
to be paid under this Article shall be disbursed at such times and
upon such procedures as the corporation shall determine. All such
indemnification shall continue as to any person who has ceased to
serve in any of the aforesaid capacities and shall inure to the
benefit of the heirs, devisees and personal representatives of such
person. Indemnification given under section (1) or given or
supplemented under this section (3) of this Article XIII shall
survive elimination or modification of this Article with respect to
any such expenses incurred in connection with claims arising out of
acts or omissions occurring prior to such elimination or modification
and persons to whom such indemnification is given shall be entitled
to rely upon such indemnification as a contract with the corporation.
7
<PAGE> 9
IN WITNESS WHEREOF, these Restated Articles of Incorporation
have been executed in duplicate on behalf of said corporation this
14th day of June, 1994.
BOATMEN'S BANCSHARES, INC.
By/s/ Andrew B. Craig, III
---------------------------------------------
Andrew B. Craig, III
Chairman of the Board,
President and Chief Executive
Officer
(SEAL)
By/s/ Philip N. McCarty
--------------------------------------------
Philip N. McCarty
Secretary
ATTEST:
/s/ Philip N. McCarty
- --------------------------------------
Philip N. McCarty
Secretary
STATE OF MISSOURI )
) SS.
CITY OF ST. LOUIS )
I, Susan M. Hill, a notary public, do hereby certify that on
this 14th day of June, 1994, personally appeared before me Andrew B.
Craig, III and Philip N. McCarty, who, being by me first duly sworn,
declared that they are, respectively, the Chairman of the Board,
President and Chief Executive Officer and Secretary of Boatmen's
Bancshares, Inc., that they signed the foregoing document as,
respectively, Chairman of the Board, President and Chief Executive
Officer and Secretary of the corporation, and that the statements
therein contained are true.
(NOTARIAL SEAL)
/s/ Susan M. Hill
------------------------------------------
Susan M. Hill
Notary Public
My Commission expires: September 9, 1994.
8
<PAGE> 1
State of Missouri
Judith K. Moriarty, Secretary of State
P.O. Box 778, Jefferson City, MO 65102
Corporation Division
Statement of Change of Registered Agent
or Registered Office
Charter No. 00068086
The undersigned corporation or limited partnership, organized and
existing under the laws of the State of Missouri for the purpose of
changing its registered agent "The General and Business Corporation
Act of Missouri," or the "Missouri Uniform Limited Partnership
Law," represents that:
(1) The name of the corporation is:
Boatmen's Bancshares, Inc.
(2) The name of its registered agent before this change is:
Philip N. McCarty
(3) The name of the new registered agent is:
David L. Foulk
(4) The address, including street number, if any, of its
registered office before this change is:
One Boatmen's Plaza, 800 Market St., St. Louis, MO 63101
(5) Its registered office (including street number, if any change
is to be made) is hereby CHANGED TO:
Not Applicable
(6) The address of its registered office and the address of the
business office of its registered agent, as changed will be
identical.
(7) Such change was authorized by resolution duly adopted by the
board of directors of the corporation or by the limited
partnership.
IN WITNESS WHEREOF, the undersigned corporation or limited
partnership has caused this report to be executed in its name by
its President or Vice President of the corporation, or General
Partner of the limited partnership, and attested to by the
assistant secretary if a corporation on the 10th day of August,
1994.
Boatmen's Bancshares, Inc.
Name of corporation or limited partnership
By: /s/ Andrew B. Craig, III
-----------------------------------------------------------
Chairman of the Board & Chief Executive Officer
Attest:
/s/ David L. Foulk
- -------------------------------------
Secretary or Assistant Secretary
of corporation
State of Missouri )
) ss.
City of St. Louis )
I, Susan M. Hill, a Notary Public, do hereby certify that on
the 10th day of August, 1994, personally appeared before me Andrew
B. Craig, III who declares he is the Chairman of the Board & Chief
Executive Officer of the corporation, or a General Partner of the
limited partnership, executing the foregoing document, and being
first duly sworn, acknowledged that he signed the foregoing
document in the capacity therein set forth and declared that the
statements therein contained are true.
/s/ Susan M. Hill
-------------------------------------------------------
Notary Public
My commission expires September 9, 1994
<PAGE> 1
EXHIBIT (3)(C)
--------------
<PAGE> 2
AMENDED BYLAWS
OF
BOATMEN'S BANCSHARES, INC.
ARTICLE I
Offices
The general offices of the Corporation shall be in the City of
St. Louis, State of Missouri, unless the Board of Directors shall
otherwise determine. The Corporation may also have other offices,
both within and without the State of Missouri.
ARTICLE II
Shareholders Meetings
Section 1. Annual Meeting. The annual meeting of the
--------------
shareholders of the Corporation for the election of Directors and for
the transaction of such other business as may properly come before
the meeting shall be held on the fourth Tuesday in April, in each
year, if not a legal holiday, and if a legal holiday, then on the
next succeeding business day. The annual meeting of shareholders
shall be held at the general offices of the Corporation in St. Louis,
Missouri, and shall be convened at ten o'clock A.M. unless the Board
of Directors shall specify a different place or time at which the
meeting shall be convened.
Section 2. Special Meetings. Special meetings of the
----------------
shareholders may be called by the Chairman of the Board or the
President or by resolution of the Board of Directors whenever deemed
necessary. The business transacted at any special meeting of the
shareholders shall be confined to the purpose or purposes specified
in the notice therefor and to matters germane thereto.
Section 3. Notice. Notice of each meeting of the shareholders
------
stating the place, the date and the hour of the meeting and, in the
case of a special meeting, the purpose or purposes for which the
meeting is called shall be mailed or caused to be mailed not less
than ten (10) days nor more than fifty (50) days before the date of
the meeting by or at the direction of the Secretary (otherwise as
permitted by law) to each shareholder of record entitled to vote at
such meeting at his address as it appears on the records of the
Corporation. Notice may be waived by a writing signed by the
shareholder, or by his duly authorized attorney, either before or
after the time of such meeting, and the presence of any shareholder
in person or by proxy at any meeting shall constitute a waiver of
notice of such meeting except where a shareholder attends a meeting
for the express purpose of objecting, at the beginning of the
meeting, to the transaction of any business because the meeting is
not lawfully called or convened. In order for any nomination for
Director to be entertained at any meeting or for any business to be
transacted at any annual meeting of the shareholders, other than
nominations or business made or proposed by or at the direction of
the Board of Directors, notice thereof must be received from the
nominating or proposing shareholder by the Secretary of the
Corporation, accompanied or promptly followed by such supporting
information as he shall reasonably request, not less than seventy-
five (75) days prior to the date of any annual meeting or more than
seven (7) days after the mailing of notice of any special meeting.
Section 4. Quorum. A majority of the outstanding shares
------
entitled to vote at a meeting represented in person or by proxy shall
constitute a quorum at a meeting of the shareholders. Every decision
of a majority of the shares present, in person or by proxy, entitled
to vote, provided a quorum is present, shall be valid as a corporate
act unless by reason of the particular nature of such action a
different vote is required by law or by the Articles of Incorporation
of the Corporation.
<PAGE> 3
Section 5. Adjournment. Any meeting of shareholders may
-----------
adjourn from time to time until its business is completed. In the
absence of a quorum, a majority of the shares represented, in person
or by proxy, shall have the right successively to adjourn the meeting
to a specified date not more than ninety (90) days after such
adjournment. Any business which may have been transacted at the
meeting at which the adjournment is taken may be transacted at the
adjourned meeting. No notice need be given of an adjourned meeting
if the time and place thereof are announced at the meeting at which
the adjournment is taken.
Section 6. Voting. At all meetings of the shareholders,
------
subject to the provisions of the Articles of Incorporation of the
Corporation and these Bylaws, each outstanding share shall be
entitled to one vote on each matter submitted to a vote, but no share
belonging or hypothecated to the Corporation shall be voted. In all
elections for Directors of the Corporation, each shareholder shall
have the right to cast as many votes in the aggregate as shall equal
the number of voting shares held by him or her in the Corporation,
multiplied by the number of Directors to be elected by the class to
which he or she belongs at such election, and each shareholder may
cast the whole number of votes, either in person or by proxy, for one
candidate or distribute them among two or more candidates.
Section 7. Proxies. A shareholder may vote either in person or
-------
by proxy executed in writing by the shareholder or by his duly
authorized attorney-in-fact. Every proxy must be filed with the
Secretary of the Corporation at the meeting at which the same is to
be used, and until so filed, it cannot be used at such meeting. No
proxy shall be valid after the expiration of eleven (11) months from
its date unless the person executing it shall have specified therein
the length of time for which said proxy is to continue in force.
Section 8. List of Shareholders. At least ten (10) days before
--------------------
each meeting of the shareholders, the Secretary of the Corporation
shall make a complete list of the shareholders entitled to vote at
such meeting, arranged in alphabetical order, and showing the address
of each shareholder and the number of shares registered in the name
of each shareholder. Such list shall be kept on file for a period of
ten (10) days prior to such meeting in the registered office of the
Corporation and shall be subject to inspection by any shareholder at
any time during usual business hours. Such list shall also be
produced and kept open at the time and place of the meeting during
the whole time thereof and may be inspected by any shareholder who is
present.
Section 9. Inspectors. At any meeting of the shareholders at
----------
which Directors are to be elected or a vote of the shareholders is to
be taken on any proposition, the Chairman of the meeting may appoint
not less than two persons, who are not Directors, inspectors to
receive and canvass the votes given at such meeting, and certify the
results to him. In all cases where the right to vote upon any share
or shares shall be questioned, it shall be the duty of the
inspectors, if any, or persons conducting the vote to require the
transfer books of the Corporation as evidence of shares held and the
question shall be determined in accordance with said transfer books.
Section 10. Presiding Officer. The Chairman of the Board shall
-----------------
preside at all meetings of the shareholders and shall act as Chairman
thereof. In his absence, the Board of Directors may designate a
substitute Chairman to preside at any meeting of shareholders. At
any meeting of shareholders, the Chairman of such meeting may, from
time to time during such meeting, appoint a temporary Chairman to
preside at such meeting.
2
<PAGE> 4
ARTICLE III
Board of Directors
Section 1. Powers and Number. The property and business of the
-----------------
Corporation shall be controlled and managed by the Board of
Directors. The number of Directors to constitute the Board of
Directors shall be sixteen (16); provided, however, that such number
may be fixed, from time to time, at not less than a minimum of
fifteen (15) nor more than a maximum of twenty-seven (27), by
amendment of these Bylaws, and any such change shall be reported to
the Secretary of State of the State of Missouri within thirty (30)
calendar days of such change.
Section 2. Classes of Directors, Election and Term of Office.
-------------------------------------------------
The Directors shall be divided into three classes: Class I, Class II
and Class III. Such classes shall be as nearly equal in number as
possible. The term of office of the initial Class I Directors
expired at the annual meeting of shareholders of the Corporation in
1985; the term of office of the initial Class II Directors expired at
the annual meeting of shareholders of the Corporation in 1986; and
the term of office of the initial Class III Directors expired at the
annual meeting of shareholders of the Corporation in 1987. At each
annual election, the Directors chosen to succeed those whose terms
then expire shall be identified as being of the same class as the
Directors they succeed and shall be elected for a term of three (3)
years expiring at the third succeeding annual meeting or thereafter
when their respective successors are elected and have qualified. If
the number of Directors is changed, any increase or decrease in
Directors shall be apportioned among the classes so as to maintain
all classes as nearly equal in number as possible, and any additional
Director elected to any class shall hold office for a term which
shall expire with the term of the Directors in such class.
Section 3. Removal of Directors. At a meeting called expressly
--------------------
for that purpose, a Director of the Corporation or the entire Board
of Directors may be removed without cause only upon the affirmative
vote of the holders of not less than eighty percent (80%) of the
shares entitled to vote generally in the election of Directors;
provided, however, that, if less than the entire Board of Directors
is to be so removed without cause, no one of the Directors may be
removed if the votes cast against such Director's removal would be
sufficient to elect such Director if then cumulatively voted at an
election of the class of Directors of which such Director is a part.
At a meeting called expressly for the purpose, a Director may be
removed by the shareholders for cause by the affirmative vote of the
holders of a majority of the shares entitled to vote upon his
election.
Section 4. Vacancies. In case of vacancies occurring on the
---------
Board of Directors, any such vacancy may be filled by a vote of a
majority of the surviving or remaining Directors then in office.
Such Director as may be elected by the Board of Directors to fill a
vacancy shall hold office for the unexpired term of the Director
whose place shall be vacated or until the election and qualification
of his successor.
Section 5. Annual Meeting. The annual meeting of the Directors
--------------
for the purpose of electing officers and transacting such other
business as may come before the meeting shall be held immediately
following the annual meeting of shareholders or at such time as shall
be fixed by the vote of the shareholders at the annual meeting or at
any special meeting at which an election of Directors shall occur.
Alternatively, the annual meeting shall be at such time as shall be
fixed by the consent in writing of all the Directors or at such time
as shall be fixed by an officer authorized to call special meetings
of the Board of Directors.
Section 6. Regular Meetings. A regular meeting of the Board of
----------------
Directors shall be held during each calendar quarter of each year on
such day thereof as shall be determined by the Chairman of the Board.
3
<PAGE> 5
Section 7. Special Meetings. Special meetings of the Board of
----------------
Directors may be called by the Chairman of the Board or the acting
chief executive officer.
Section 8. Notice of Meetings. No notice shall be required to
------------------
be given of the annual meeting of the Board of Directors if it is
held immediately following the annual meeting of shareholders or if
a majority of the whole Board shall have been present at the meeting
of shareholders. Otherwise, notice of the annual meeting of the
Board of Directors shall be given as is provided below for regular or
special meetings. Notice of every regular or special meeting of the
Board of Directors, stating the date, time, and place of the meeting,
shall be given by or at the direction of the Secretary to each
Director by mailing, or sending by telegraph or other electronic
means, a written notice to the Director, addressed to his last known
place of business, not less than three days before the date of the
meeting, in the case of mailing, or twenty-four hours before the hour
of the meeting, in the case of such other sending, or by contacting
the Director in person or by telephone not less than six hours before
the hour of the meeting.
Section 9. Waiver of Notice. Any Director may waive notice of
----------------
any meeting of the Board of Directors by a writing signed by him,
either before or after the time of such meeting. Any Director
present in person at any meeting shall be deemed to have thereby
waived notice of such meeting except where such attendance is for the
express purpose of objecting to the transaction of any business
because the meeting is not lawfully called or convened.
Section 10. Quorum. A majority of the full Board of Directors
------
as prescribed by these Bylaws shall be required to be present at any
meeting to constitute a quorum for the transaction of business and,
except as otherwise specifically provided in these Bylaws, the
concurring vote of at least a majority of the Directors at a meeting
at which a quorum is present shall be required to determine all
questions coming before the Board. In the absence of a quorum, the
Directors present shall have the right successively to adjourn the
meeting to a specified date and no notice need be given of such
adjournment.
Section 11. Presiding Officer. The Chairman of the Board shall
-----------------
preside at all meetings of the Board of Directors. In his absence,
the Board of Directors may designate a substitute Chairman to preside
at any meeting of the Board of Directors. At a meeting of the Board
of Directors, the presiding officer may, from time to time during
such meeting, appoint a temporary Chairman to preside at such
meeting.
Section 12. Minutes and Statements. The Board of Directors
----------------------
shall cause to be kept a complete record of their meetings and acts,
and of the proceedings of the shareholders. The business and
proceedings of the Board shall, however, be kept confidential.
Section 13. Powers of the Board. In addition to the power and
-------------------
authority conferred upon them by law, the Board of Directors may
exercise all such powers of the Corporation and do all such lawful
things as are not by law prohibited or limited.
Section 14. Advisory Directors. The Board of Directors of the
------------------
Corporation shall have the power at any time, and from time to time,
to appoint one or more advisory directors (hereinafter referred to as
"Advisory Directors"), who shall advise and counsel the Board.
Advisory Directors shall not be, nor shall they have any of the
duties, responsibilities or liabilities of, Directors of the
Corporation or members of the Board of Directors or of any committees
thereof, but may attend meetings of the Board with no right to vote
at such meetings.
4
<PAGE> 6
Section 15. Compensation of Directors and Advisory Directors.
------------------------------------------------
The Compensation to be paid the Directors of the Corporation and
Advisory Directors for services at all meetings of the Board of
Directors shall be determined from time to time by the Board of
Directors.
ARTICLE IV
Committees
Section 1. Committees. The Board of Directors may, upon
----------
recommendation of the Chairman of the Board, by resolution adopted by
a majority of the whole Board, designate two or more Directors to
constitute such Committee or Committees as the Board shall deem
advisable and shall designate Directors to constitute the Committees
provided for in the following Sections of this Article IV. Each such
Committee, to the extent provided in such resolution, shall have and
exercise all of the authority of the Board of Directors in the
management of the Corporation; provided that the designation of such
Committee or Committees and the delegation thereto of authority shall
not operate to relieve the Board of Directors, or any member thereof,
of any responsibility imposed upon it or him by law.
Section 2. Executive Committee. The Board of Directors may
-------------------
designate five or more Directors to constitute an Executive
Committee, which Committee shall have and exercise all of the
authority of the Board of Directors in the management of the
Corporation. The Chairman of the Board shall be a member of such
Committee and shall act as Chairman thereof; at least three other
members of such Committee shall be Directors who are not officers or
employees of the Corporation.
Section 3. Audit Committee. The Board of Directors shall
---------------
designate three or more Directors to constitute an Audit Committee,
of which no officer or employee of the Corporation shall be a member,
and who shall be appointed by the Board annually or more often. The
Audit Committee shall have and exercise all of the authority of the
Board of Directors with respect to the review and examination of the
financial affairs of the Corporation and its subsidiaries. It shall
also be the duty of the Audit Committee to nominate the independent
auditors of the Corporation for appointment by the Board of
Directors; to arrange for and review the Corporation's annual audit;
to ratify all accountants' fees rendered during the year; to review
the scope and results of internal audit controls and procedures; and
to provide for independent review of the adequacy of the Corpora-
tion's system of internal control.
Section 4. Compensation Committee. The Board of Directors
----------------------
shall designate three or more Directors to constitute a Compensation
Committee, of which no officer or employee of the Corporation shall
be a member, and who shall be appointed by the Board annually or more
often. The Compensation Committee shall have and exercise all of the
authority of the Board of Directors with respect to the selection and
review of the competency and effectiveness of management of the
Corporation and its subsidiaries; the review of the soundness and
adequacy of compensation programs, including fringe programs,
compliance with regulations and the like; the approval of salaries of
Corporation officers and the review of salaries of senior top
management of its subsidiaries; and the formulation of policy on and
administration of special Corporation programs such as stock option
plans, executive incentive plans, stock purchase plans for employees
and the like.
Section 5. Nominating Committee. The Board of Directors shall
--------------------
designate three or more Directors to constitute a Nominating
Committee, of which no officer or employee of the Corporation shall
be a member, and who shall be appointed by the Board annually or more
often. The Nominating Committee shall recommend to the Board a slate
of nominees for directors to be presented on behalf of the Board for
election by shareholders at each annual meeting of the Corporation
and shall recommend to the Board persons to fill vacancies on the
Board.
5
<PAGE> 7
Section 6. Compensation of Committee Members. The Board of
---------------------------------
Directors shall determine the compensation to be paid to each member
of any Committee appointed by it for service on such committee.
Section 7. Notice of Meetings. Notice of Committee meetings
------------------
shall be given in the same manner as notices of meetings of the Board
of Directors.
ARTICLE V
Officers
Section 1. Required Officers. The Corporation shall have a
-----------------
Chairman of the Board, a President and a Secretary, all of whom shall
be chosen by the Board of Directors. The Chairman of the Board and
President shall be chosen from among the Directors. Any two offices
may be held by the same person.
Section 2. Other Officers. The Board of Directors may, upon
--------------
the recommendation of the Chairman of the Board or otherwise, appoint
such other officers as it may deem necessary, who shall have such
authority and perform such duties as from time to time may be
prescribed by the Chairman of the Board or the Board of Directors.
Section 3. Tenure of Office and Removal. The tenure of office
----------------------------
of each of the officers of the Corporation, subject to prior removal,
shall be until the close of the next annual meeting of the
shareholders following his election and until the election of his
successor. Any officer may be removed at any time prior to the
expiration of his term by affirmative vote of a majority of the
Directors. If the office of any officer of the Corporation becomes
vacant, the Board of Directors may choose a successor for such
officer who shall hold office for such term as may be prescribed by
the Board of Directors but no longer than the unexpired portion of
the term of the officer whose place is vacant and until his successor
shall have been duly elected.
Section 4. Powers and Duties. The Chairman of the Board
-----------------
shall be the chief executive officer of the Corporation. Such
chief executive officer shall have general executive powers in
conducting the affairs of the Corporation, as well as the specific
powers conferred by these Bylaws. He shall have the power to
suspend any officer and to dismiss any other employee of the
Corporation when he shall deem it proper. He shall exercise all
powers of the Board of Directors pertaining to the management of
the business of the Corporation between meetings of the Board of
Directors and the Executive Committee and such further powers and
duties as may be conferred upon him by these Bylaws and the Board
of Directors or the Executive Committee from time to time. He
shall have the power to appoint an acting chief executive officer
to serve between meetings of the Board of Directors and the
Executive Committee in the event that he is unable to serve. The
Chairman of the Board shall be a member of all Committees appointed
by the Board of Directors, except the Audit Committee, the
Compensation Committee, and the Nominating Committee, unless
excused by the Board from being a member thereof.
The President shall have such powers and duties as may be
assigned to him by the Chairman of the Board or the Board of
Directors or the Executive Committee from time to time.
The Secretary shall keep accurate minutes of all meetings of
the shareholders and of the Board of Directors and shall attend to
the giving of all notices required to be given under these Bylaws.
He shall be custodian of the corporate records and seal of the
Corporation and he or an Assistant Secretary shall have the
authority to affix the seal to any documents requiring such and to
attest the same. He shall also perform
6
<PAGE> 8
such other duties as may be assigned to him from time to time by the
Chairman of the Board or the Board of Directors or any Committee thereof.
Otherwise, all other officers shall have such powers and
duties in the management of the business, property and affairs of
the Corporation as generally pertain to their respective offices,
as well as such powers and duties as may from time to time be
conferred by the Chairman of the Board or the Board of Directors or
any Committee thereof.
Section 5. Compensation. The compensation of all senior
------------
officers of the Corporation shall be fixed by or pursuant to the
authority of the Board of Directors.
Section 6. Officers' Bonds. The Board of Directors may require
---------------
any officer or officers to furnish the Corporation a bond in such sum
and in form and with security satisfactory to the Board of Directors
for the faithful performance of the duties of the offices.
ARTICLE VI
Certificate of Stock and Transfers
Section 1. Forms and Execution of Certificates. The shares of
-----------------------------------
stock of the Corporation shall be represented by certificates (except
fractional shares which may be represented by certificates or, in the
discretion of the Board of Directors, scrip) and .shall be signed by
the Chairman of the Board, the President or a Vice President and by
the Secretary or an Assistant Secretary or the Treasurer or an
Assistant Treasurer, and sealed with the seal of the Corporation.
Any and all such signatures may be facsimile and such seal may be
facsimile, engraved or printed. In case any such officer, transfer
agent or registrar who has signed or whose facsimile signature has
been placed upon any such certificate shall cease to be such officer,
transfer agent or registrar before such certificate is issued, such
certificate may nevertheless be issued by the Corporation with the
same effect as if such officer, transfer agent or registrar were such
officer, transfer agent or registrar at the date of its issue.
Section 2. Transfer of Stock. Shares of stock, after
-----------------
certificates thereof have been issued, shall be transferable only on
the stock transfer books of the Corporation which shall be in the
possession of the Secretary or a transfer agent or registrar for the
Corporation. No transfer shall be valid against the Corporation
until the same is so entered upon its books and the old certificate
is surrendered for cancellation.
Section 3. Transfer and Registration Agents. The Board of
--------------------------------
Directors may appoint a transfer agent or agents who shall have and
exercise supervision over the transfer of shares of stock and the
issuance of stock certificates, subject to such conditions and
regulations as the Board of Directors may prescribe; and the Board of
Directors may appoint a registrar who shall register all transfers of
shares of stock and the issuance of stock certificates, subject to
such conditions and regulations as the Board may prescribe.
Section 4. Fixing of Record Date. The Board of Directors shall
---------------------
have power to fix in advance a date, not exceeding seventy (70) days
preceding the date of any meeting of stockholders, or the date for
the payment of any dividend, or the date for the allotment or rights,
or the date when any change or conversion or exchange of shares shall
go into effect, as a record date for the determination of the
shareholders entitled to notice of, and to vote at, any such meeting,
and any adjournment thereof, or entitled to receive payment of any
such dividend, or to any such allotment of rights, or to exercise the
rights in respect of any such change, conversion or exchange of
shares, and in such case such shareholders and only such shareholders
as shall be shareholders of record on the date so fixed shall be
entitled to notice of, and to vote at, such meeting, and any
adjournment thereof, or to receive payment of such dividend, or to
receive such allotment
7
<PAGE> 9
of rights, or to exercise such rights, as the case may be, notwithstanding
any transfer of any stock on the books of the Corporation after any such
record date fixed as aforesaid. If the Board of Directors does not set a
record date for the determination of the stockholders entitled to notice
of, and to vote at, a meeting of shareholders, only the shareholders who
are shareholders of record at the close of business on the twentieth day
preceding the date of the meeting shall be entitled to notice of, and
to vote at, the meeting, and any adjournment of the meeting.
ARTICLE VII
Miscellaneous Provisions
Section 1. Fiscal Year. The fiscal year of the Corporation
-----------
shall cover such period of twelve calendar months as the Board of
Directors may determine. In the absence of any such determination,
the accounts of the Corporation shall be kept on a calendar year
basis.
Section 2. Consents. Any action which is required to be or may
--------
be taken at a meeting of the Directors or by the Executive Committee
or any other Committee of the Directors may be taken without a
meeting if consents in writing, setting forth the action so taken,
are signed by all of the Directors or by all members of the Committee
as the case may be. The consent shall have the same force and effect
as a unanimous vote at a meeting duly held and may be stated as such
in any certificate or document filed under the General and Business
Corporation Law of Missouri. The Secretary shall file the consents
with the minutes of the meetings of the Board of Directors or of the
Committee as the case may be.
Section 3. Tele-participation at Meetings. Members of the
------------------------------
Board of Directors or any Committee designated by the Board of
Directors may participate in a meeting of the Board of Directors or
of any Committee by means of a conference telephone or similar
communications equipment whereby all persons participating in the
meeting can hear each other, and participation in the meeting in this
manner shall constitute presence in person at the meeting.
Section 4. Amendments to Bylaws. The Board of Directors shall
--------------------
have the power to make, alter, amend or repeal the Bylaws of the
Corporation from time to time.
8
<PAGE> 1
EXHIBIT (5)
-----------
<PAGE> 2
LEWIS, RICE & FINGERSH
A PARTNERSHIP INCLUDING PARTNERSHIPS AND INDIVIDUALS
ATTORNEYS AT LAW
500 N. BROADWAY, SUITE 2000
SAINT LOUIS, MISSOURI 63102-2147
TEL (314) 444-7600
FAX (314) 241-6056
September 26, 1994
Boatmen's Bancshares, Inc.
One Boatmen's Plaza
800 Market Street
St. Louis, Missouri 63101
Re: Registration Statement on Form S-4
Dear Sirs:
In connection with a certain Registration Statement on Form S-
4 (the "Registration Statement") filed with the Securities and
Exchange Commission pursuant to the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations promulgated
thereunder, you have requested that we furnish you our opinion as
to the legality of the shares of the common stock, $1.00 par value
(the "Common Stock"), of Boatmen's Bancshares, Inc. (the "Company")
registered thereunder, which Common Stock is to be issued pursuant
to (1) a Plan and Agreement of Merger (the "Holding Company Merger
Agreement"), dated May 19, 1994 among the Company, Dalhart
Bancshares, Inc., Dalhart Bancshares of Delaware, Inc. and
Boatmen's Texas, Inc. and (ii) an Agreement to Merge (the
"Subsidiary Merger Agreement") dated June 30, 1994 between
Boatmen's First National Bank of Amarillo and Citizens State Bank
of Dalhart, and joined by the Company.
As counsel to the Company, we have participated in the
preparation of the Registration Statement. We have examined and
are familiar with the Company's Restated Articles of Incorporation,
Bylaws, as amended, records of corporate proceedings and such other
information and documents as we have deemed necessary or
appropriate.
Based upon the foregoing, we are of the opinion that the
Common Stock has been duly authorized and will, when issued as
contemplated in the Registration Statement, the Holding Company
Merger Agreement and the Subsidiary Merger Agreement, be validly
issued, fully paid and non-assessable.
We consent to the use of this opinion as an Exhibit to the
Registration Statement.
Very truly yours,
LEWIS, RICE & FINGERSH
/s/ Lewis, Rice & Fingersh
<PAGE> 1
EXHIBIT (8)
-----------
<PAGE> 2
LEWIS, RICE & FINGERSH
A PARTNERSHIP INCLUDING PARTNERSHIPS AND INDIVIDUALS
ATTORNEYS AT LAW
500 N. BROADWAY, SUITE 2000
SAINT LOUIS, MISSOURI 63102-2147
TEL (314) 444-7600
FAX (314) 241-6056
____________________, 1994
Board of Directors
Boatmen's Bancshares, Inc.
800 Market Street
St. Louis, Missouri 63102
Board of Directors
Boatmen's Texas, Inc.
800 Market Street
St. Louis, Missouri 63102
Attention: Gregory L. Curl, Vice Chairman
Board of Directors
Dalhart Bancshares, Inc.
323 Denver Avenue
Dalhart, Texas 79022
Attention: John M. Koehler, President
RE: MERGERS OF DALHART BANCSHARES, INC. INTO BOATMEN'S TEXAS,
INC. AND CITIZENS STATE BANK OF DALHART INTO BOATMEN'S
FIRST NATIONAL BANK OF AMARILLO
Gentlemen:
You have requested our opinions as to the federal income tax
consequences of (i) the proposed merger (the "Holding Company
Merger") of Dalhart Bancshares, Inc. ("Dalhart") into Boatmen's
Texas, Inc. ("AcquisitionCo") pursuant to the Agreement and Plan of
Merger, dated May 19, 1994 by and among Boatmen's Bancshares, Inc.
("Boatmen's"), Dalhart, Dalhart Bancshares of Delaware, Inc. and
AcquisitionCo, as amended ("Holding Company Merger Agreement"), and
(ii) the proposed merger ("Subsidiary Merger") of Citizens State
Bank of Dalhart ("Bank") into Boatmen's First National Bank of
Amarillo ("Subsidiary") pursuant to the Agreement to Merge, dated
June 30, 1994, as amended ("Subsidiary Merger Agreement") between
Bank and Subsidiary.
In issuing the opinions set forth in this letter, we have
relied upon (1) the factual representations made by Boatmen's,
AcquisitionCo, Subsidiary, Dalhart, Dalhart-Delaware and Bank in
written statements each dated,_____________, respectively (the
"Representations"), (2) the Holding Company Merger Agreement, (3)
the Subsidiary Merger Agreement and (4) the facts, information and
documentation set forth in the Registration Statement on Form S-4
of Boatmen's filed with the Securities and Exchange Commission in
connection with the Merger, as amended ("Registration Statement").
The opinions set forth in this letter are predicated upon our
understanding of the facts set forth in the Holding Company Merger
<PAGE> 3
Agreement, the Subsidiary Merger Agreement, the Representations,
and the Registration Statement. Any change in such facts may
adversely affect our opinions. Furthermore, as explained below,
our opinions are based upon our understanding of the existing
provisions of the Code, currently applicable regulations
promulgated under the Code, current published administrative
positions of the Internal Revenue Service such as revenue rulings
and revenue procedures, and existing judicial decisions, all of
which are subject to change either prospectively or retroactively.
Any change in such authorities may adversely affect our opinions.
We assume no obligation to update our opinions for any deletions or
additions to or modification of any law applicable to the Holding
Company Merger or the Subsidiary Merger.
The following opinions reflect our legal judgment solely on
the issues presented and discussed herein. The issues in this
matter are complex. There are no published cases, rulings,
regulations or administrative positions to support the opinions set
forth herein with respect to the Subsidiary Merger. Accordingly,
we cannot assure you that the Internal Revenue Service will agree
with the opinions expressed herein, nor can we assure you that a
court of competent jurisdiction will agree with such opinions.
Opinions Regarding Subsidiary Merger
- ------------------------------------
In view of the foregoing and in view of the complexity of the
issues and based on the limited amount of reliable authority
described above and on our review of the Subsidiary Merger
Agreement, the Representations, and the Registration Statement, and
assuming that the transactions described therein are completed as
described, our opinions as to federal income tax consequences of
the Subsidiary Merger are as follows.
1. The Subsidiary Merger will constitute a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code
of 1986, as amended.
2. Pursuant to Section 354(a)(1) of the Code, no gain or
loss will be recognized by shareholders of Bank who exchange all of
their Bank common stock, solely for shares of Boatmen's voting
common stock.
3. Pursuant to Section 358(a)(1) of the Code, the basis of
the Boatmen's common stock received by those shareholders of Bank
receiving solely Boatmen's common stock (including any fractional
share to which such shareholder would be entitled) will be the
same, in each instance, as the basis of the Bank common stock
surrendered in exchange therefor.
4. Pursuant to Section 1223(1) of the Code, the holding
period of Boatmen's common stock received by the shareholders of
2
<PAGE> 4
Bank (including any fractional shares to which they may be
entitled) will include, in each instance, the period during which
Bank common stock surrendered in exchange therefor was held,
provided that such stock is held as a capital asset in the hands of
such shareholders on the date of the exchange.
Opinions Regarding the Holding Company Merger
Based on our review of the Holding Company Merger Agreement,
the Representations, and the Registration Statement, and assuming
that the transactions described therein are completed as described,
our opinions as to federal income tax consequences of the Holding
Company Merger are as follows.
1. The Holding Company Merger will constitute a reorganiza-
tion within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended.
2. Pursuant to Section 354(a)(1) of the Code, no gain or
loss will be recognized by shareholders of Dalhart who exchange all
of their Dalhart common stock, solely for shares of Boatmen's
voting common stock.
3. Pursuant to Section 358(a)(1) of the Code, the basis of
the Boatmen's common stock received by those shareholders of
Dalhart receiving solely Boatmen's common stock (including any
fractional share to which such shareholder would be entitled) will
be the same, in each instance, as the basis of the Dalhart common
stock surrendered in exchange therefor.
4. Pursuant to Section 1223(1) of the Code, the holding
period of Boatmen's common stock received by the shareholders of
Dalhart (including any fractional shares to which they may be
entitled) will include, in each instance, the period during which
the Dalhart common stock surrendered in exchange therefor was held,
provided that such stock is held as a capital asset in the hands of
such shareholders on the date of the exchange.
We express no opinion with regard to the federal income tax
consequences of the Holding Company Merger and Subsidiary Merger
not addressed expressly by the above opinions. In addition, we
express no opinion as to any state or local tax consequences with
respect to these transactions.
The shareholders of Dalhart and Bank should consult with a
qualified tax advisor with respect to any reporting requirements
which may be applicable, or any other tax considerations not
expressly mentioned herein.
We consent to the use of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
LEWIS, RICE & FINGERSH
3
<PAGE> 1
EXHIBIT (23)(A)
---------------
Consent of Ernst & Young LLP
We consent to the reference to our firm under the caption "Experts"
in the Registration Statement (Form S-4) and related Prospectus of
Boatmen's Bancshares, Inc. for the registration of 763,254 shares
of its common stock and to the incorporation by reference therein
of our report dated January 20, 1994, with respect to the
consolidated financial statements of Boatmen's Bancshares, Inc.
incorporated by reference in its Annual Report (Form 10-K) for the
year ended December 31, 1993, filed with the Securities and
Exchange Commission.
ERNST & YOUNG LLP
St. Louis, Missouri
September 21, 1994
<PAGE> 1
EXHIBIT (23)(B)
---------------
CONSENT OF INDEPENDENT AUDITORS
We consent to the reference to our firm under the caption "Experts"
in the Registration Statement (Form S-4) of Boatmen's Bancshares,
Inc. We also consent to the inclusion of our reports dated July
14, 1994, with respect to (i) the consolidated balance sheet of
Dalhart Bancshares, Inc. and Subsidiary as of December 31, 1993,
and the related consolidated statements of earnings, stockholders'
equity and cash flows for the year then ended, and (ii) the balance
sheet of Citizens State Bank of Dalhart as of December 31, 1993,
and the related statements of earnings, stockholders' equity and
cash flows for the year then ended.
GRA, Thompson, White & Co., P.A.
Merriam, Kansas
September 21, 1994
<PAGE> 1
EXHIBIT (23)(C)
---------------
CONSENT OF KPMG PEAT MARWICK LLP
The Board of Directors
Boatmen's Bancshares, Inc.
We consent to the incorporation by reference in the registration
statement on Form S-4 of boatmen's Bancshares, Inc. of our report
dated January 31, 1992, relating to the consolidated income
statement and statements of changes in stockholders' equity and
cash flows of First Interstate of Iowa, Inc. and subsidiaries for
the year ended December 31, 1991, which report appears in the
December 31, 1993 annual report on Form 10-K of Boatmen's
Bancshares, Inc., and to the reference to our firm under the
heading "Experts" in the joint proxy statement/prospectus.
\s\ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Des Moines, Iowa
September 21, 1994
<PAGE> 1
EXHIBIT (23)(D)
---------------
CONSENT OF KPMG PEAT MARWICK LLP
The Board of Directors
Boatmen's Bancshares, Inc.
We consent to the incorporation by reference in the registration
statement on Form S-4 of Boatmen's Bancshares, Inc. of our report
dated March 5, 1992, relating to the consolidated statements of
operations, changes in stockholders' equity and cash flows of
Sunwest Financial Services, Inc. and subsidiaries for the year
ended December 31, 1991, which report appears in the December 31,
1993 annual report on Form 10-K of Boatmen's Bancshares, Inc., and
to the reference to our firm under the heading "Experts" in the
Joint Proxy Statement/Prospectus.
\s\ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Albuquerque, New Mexico
September 21, 1994
<PAGE> 1
EXHIBIT (23)(E)
---------------
Exhibit 23(e)
CONSENT OF KPMG PEAT MARWICK LLP
The Board of Directors
Boatmen's Banchsares, Inc.
We consent to the incorporation by reference in the registration
statement on Form S-4 of Boatmen's Bancshares, Inc. of our report
dated January 24, 1992, except for Note 23 which is as of February
24, 1992, relating to the consolidated statements of income,
stockholders' equity and cash flows of First Amarillo
Bancorporation, Inc. and subsidiaries for the year ended December
31, 1991, which report appears in the December 31, 1993 annual
report on Form 10-K of boatmen's Bancshares, Inc. We also consent
to the reference to our firm under the heading "Experts" in the
Joint Proxy Statement/Prospectus.
\s\ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Amarillo, Texas
September 22, 1994
<PAGE> 1
EXHIBIT (23)(F)
---------------
CONSENT OF KPMG PEAT MARWICK LLP
The Board of Directors and Shareholders
Boatmen's Bancshares, Inc.:
We consent to the incorporation by reference in the registration
statement on Form S-4 of Boatmen's Bancshares, Inc. of our reports
dated February 25, 1994, with respect to the consolidated balance
sheets of Worthen Banking Corporation and subsidiaries as of
December 31, 1993 and 1992 and the related consolidated statements
of earnings, stockholders' equity and cash flows and related
schedule for each of the years in the three-year period ended
December 31, 1993, which reports appear in the December 31, 1993
Annual Report on Form 10-K of Worthen Banking Corporation which is
included as an exhibit to the Boatmen's Bancshares, Inc. Form 8-K
dated September 3, 1994. Our report refers to a change in the
method of accounting for income taxes in 1993.
We also consent to the reference to our firm under the heading
"Experts" in the Joint Proxy Statement/Prospectus.
\s\ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Little Rock, Arkansas
September 22, 1994
<PAGE> 1
EXHIBIT (23)(G)
---------------
Consent of Independent Auditors
The Board of Directors and Stockholders
Worthen Banking Corporation
We hereby consent to the incorporation by reference in
Registration Statement Number 33-________________ on Form S-4 of
Boatmen's Bancshares, Inc. of our report dated January 22, 1993,
relating to the consolidated and parent only balance sheets of The
Union of Arkansas Corporation and Subsidiaries as of December 31,
1992 and the related consolidated and parent only statements of
income, retained earnings and cash flows for the two year period
then ended (not presented separately herein) which report appears
in Exhibit 99 in the December 31, 1993 Annual Report on Form 10-K
of Worthen Banking Corporation.
Frost & Company
Certified Public Accountants
Little Rock
September 22, 1994
<PAGE> 1
EXHIBIT (24)
------------
<PAGE> 2
POWER OF ATTORNEY
1933 ACT REGISTRATION STATEMENT
of
BOATMEN'S BANCSHARES, INC.
KNOW ALL MEN BY THESE PRESENTS, That the person whose
signature appears below hereby constitutes and appoints JAMES W.
KIENKER, the true and lawful attorney-in-fact and agent for him and
in his name, place or stead, in any and all capacities, to sign and
file, or cause to be signed and filed, with the Securities and
Exchange Commission (the "Commission"), any registration statement
or statements on Form S-4 under the Securities Act of 1933, as
amended, relating to the issuance of common stock of Boatmen's
Bancshares, Inc. in connection with the Agreement and Plan of
Merger, dated May 19, 1994, by and among Dalhart Bancshares, Inc.,
Dalhart Bancshares of Delaware, Inc., Boatmen's Bancshares, Inc.
and Boatmen's Texas, Inc., and any and all amendments and
supplements thereto, before or after effectiveness of such
statements, and any and all other documents required to be filed
with the Commission in connection therewith, granting unto said
attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done as fully and to all intents and purposes as the undersigned
might or could do in person, and ratifying and confirming all that
said attorney-in-fact and agent may lawfully do or cause to be done
by virtue hereof.
Dated: September 9, 1994
/s/ B. A. Bridgewater, Jr.
-----------------------------------------
B. A. Bridgewater, Jr.
<PAGE> 3
POWER OF ATTORNEY
1933 ACT REGISTRATION STATEMENT
of
BOATMEN'S BANCSHARES, INC.
KNOW ALL MEN BY THESE PRESENTS, That the person whose
signature appears below hereby constitutes and appoints JAMES W.
KIENKER, the true and lawful attorney-in-fact and agent for him and
in his name, place or stead, in any and all capacities, to sign and
file, or cause to be signed and filed, with the Securities and
Exchange Commission (the "Commission"), any registration statement
or statements on Form S-4 under the Securities Act of 1933, as
amended, relating to the issuance of common stock of Boatmen's
Bancshares, Inc. in connection with the Agreement and Plan of
Merger, dated May 19, 1994, by and among Dalhart Bancshares, Inc.,
Dalhart Bancshares of Delaware, Inc., Boatmen's Bancshares, Inc.
and Boatmen's Texas, Inc., and any and all amendments and
supplements thereto, before or after effectiveness of such
statements, and any and all other documents required to be filed
with the Commission in connection therewith, granting unto said
attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done as fully and to all intents and purposes as the undersigned
might or could do in person, and ratifying and confirming all that
said attorney-in-fact and agent may lawfully do or cause to be done
by virtue hereof.
Dated: September 8, 1994
/s/ Richard L. Battram
-----------------------------------------
Richard L. Battram
<PAGE> 4
POWER OF ATTORNEY
1933 ACT REGISTRATION STATEMENT
of
BOATMEN'S BANCSHARES, INC.
KNOW ALL MEN BY THESE PRESENTS, That the person whose
signature appears below hereby constitutes and appoints JAMES W.
KIENKER, the true and lawful attorney-in-fact and agent for him and
in his name, place or stead, in any and all capacities, to sign and
file, or cause to be signed and filed, with the Securities and
Exchange Commission (the "Commission"), any registration statement
or statements on Form S-4 under the Securities Act of 1933, as
amended, relating to the issuance of common stock of Boatmen's
Bancshares, Inc. in connection with the Agreement and Plan of
Merger, dated May 19, 1994, by and among Dalhart Bancshares, Inc.,
Dalhart Bancshares of Delaware, Inc., Boatmen's Bancshares, Inc.
and Boatmen's Texas, Inc., and any and all amendments and
supplements thereto, before or after effectiveness of such
statements, and any and all other documents required to be filed
with the Commission in connection therewith, granting unto said
attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done as fully and to all intents and purposes as the undersigned
might or could do in person, and ratifying and confirming all that
said attorney-in-fact and agent may lawfully do or cause to be done
by virtue hereof.
Dated: September 8, 1994
/s/ William E. Cornelius
-----------------------------------------
William E. Cornelius
<PAGE> 5
POWER OF ATTORNEY
1933 ACT REGISTRATION STATEMENT
of
BOATMEN'S BANCSHARES, INC.
KNOW ALL MEN BY THESE PRESENTS, That the person whose
signature appears below hereby constitutes and appoints JAMES W.
KIENKER, the true and lawful attorney-in-fact and agent for him and
in his name, place or stead, in any and all capacities, to sign and
file, or cause to be signed and filed, with the Securities and
Exchange Commission (the "Commission"), any registration statement
or statements on Form S-4 under the Securities Act of 1933, as
amended, relating to the issuance of common stock of Boatmen's
Bancshares, Inc. in connection with the Agreement and Plan of
Merger, dated May 19, 1994, by and among Dalhart Bancshares, Inc.,
Dalhart Bancshares of Delaware, Inc., Boatmen's Bancshares, Inc.
and Boatmen's Texas, Inc., and any and all amendments and
supplements thereto, before or after effectiveness of such
statements, and any and all other documents required to be filed
with the Commission in connection therewith, granting unto said
attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done as fully and to all intents and purposes as the undersigned
might or could do in person, and ratifying and confirming all that
said attorney-in-fact and agent may lawfully do or cause to be done
by virtue hereof.
Dated: September 9, 1994
/s/ Andrew B. Craig, III
-----------------------------------------
Andrew B. Craig, III
<PAGE> 6
POWER OF ATTORNEY
1933 ACT REGISTRATION STATEMENT
of
BOATMEN'S BANCSHARES, INC.
KNOW ALL MEN BY THESE PRESENTS, That the person whose
signature appears below hereby constitutes and appoints JAMES W.
KIENKER, the true and lawful attorney-in-fact and agent for him and
in his name, place or stead, in any and all capacities, to sign and
file, or cause to be signed and filed, with the Securities and
Exchange Commission (the "Commission"), any registration statement
or statements on Form S-4 under the Securities Act of 1933, as
amended, relating to the issuance of common stock of Boatmen's
Bancshares, Inc. in connection with the Agreement and Plan of
Merger, dated May 19, 1994, by and among Dalhart Bancshares, Inc.,
Dalhart Bancshares of Delaware, Inc., Boatmen's Bancshares, Inc.
and Boatmen's Texas, Inc., and any and all amendments and
supplements thereto, before or after effectiveness of such
statements, and any and all other documents required to be filed
with the Commission in connection therewith, granting unto said
attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done as fully and to all intents and purposes as the undersigned
might or could do in person, and ratifying and confirming all that
said attorney-in-fact and agent may lawfully do or cause to be done
by virtue hereof.
Dated: September 9, 1994
/s/ Ilus W. Davis
-----------------------------------------
Ilus W. Davis
<PAGE> 7
POWER OF ATTORNEY
1933 ACT REGISTRATION STATEMENT
of
BOATMEN'S BANCSHARES, INC.
KNOW ALL MEN BY THESE PRESENTS, That the person whose
signature appears below hereby constitutes and appoints JAMES W.
KIENKER, the true and lawful attorney-in-fact and agent for him and
in his name, place or stead, in any and all capacities, to sign and
file, or cause to be signed and filed, with the Securities and
Exchange Commission (the "Commission"), any registration statement
or statements on Form S-4 under the Securities Act of 1933, as
amended, relating to the issuance of common stock of Boatmen's
Bancshares, Inc. in connection with the Agreement and Plan of
Merger, dated May 19, 1994, by and among Dalhart Bancshares, Inc.,
Dalhart Bancshares of Delaware, Inc., Boatmen's Bancshares, Inc.
and Boatmen's Texas, Inc., and any and all amendments and
supplements thereto, before or after effectiveness of such
statements, and any and all other documents required to be filed
with the Commission in connection therewith, granting unto said
attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done as fully and to all intents and purposes as the undersigned
might or could do in person, and ratifying and confirming all that
said attorney-in-fact and agent may lawfully do or cause to be done
by virtue hereof.
Dated: September 12, 1994
/s/ John E. Hayes, Jr.
-----------------------------------------
John E. Hayes, Jr.
<PAGE> 8
POWER OF ATTORNEY
1933 ACT REGISTRATION STATEMENT
of
BOATMEN'S BANCSHARES, INC.
KNOW ALL MEN BY THESE PRESENTS, That the person whose
signature appears below hereby constitutes and appoints JAMES W.
KIENKER, the true and lawful attorney-in-fact and agent for him and
in his name, place or stead, in any and all capacities, to sign and
file, or cause to be signed and filed, with the Securities and
Exchange Commission (the "Commission"), any registration statement
or statements on Form S-4 under the Securities Act of 1933, as
amended, relating to the issuance of common stock of Boatmen's
Bancshares, Inc. in connection with the Agreement and Plan of
Merger, dated May 19, 1994, by and among Dalhart Bancshares, Inc.,
Dalhart Bancshares of Delaware, Inc., Boatmen's Bancshares, Inc.
and Boatmen's Texas, Inc., and any and all amendments and
supplements thereto, before or after effectiveness of such
statements, and any and all other documents required to be filed
with the Commission in connection therewith, granting unto said
attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done as fully and to all intents and purposes as the undersigned
might or could do in person, and ratifying and confirming all that
said attorney-in-fact and agent may lawfully do or cause to be done
by virtue hereof.
Dated: September 9, 1994
/s/ Samuel B. Hayes, III
-----------------------------------------
Samuel B. Hayes, III
<PAGE> 9
POWER OF ATTORNEY
1933 ACT REGISTRATION STATEMENT
of
BOATMEN'S BANCSHARES, INC.
KNOW ALL MEN BY THESE PRESENTS, That the person whose
signature appears below hereby constitutes and appoints JAMES W.
KIENKER, the true and lawful attorney-in-fact and agent for him and
in his name, place or stead, in any and all capacities, to sign and
file, or cause to be signed and filed, with the Securities and
Exchange Commission (the "Commission"), any registration statement
or statements on Form S-4 under the Securities Act of 1933, as
amended, relating to the issuance of common stock of Boatmen's
Bancshares, Inc. in connection with the Agreement and Plan of
Merger, dated May 19, 1994, by and among Dalhart Bancshares, Inc.,
Dalhart Bancshares of Delaware, Inc., Boatmen's Bancshares, Inc.
and Boatmen's Texas, Inc., and any and all amendments and
supplements thereto, before or after effectiveness of such
statements, and any and all other documents required to be filed
with the Commission in connection therewith, granting unto said
attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done as fully and to all intents and purposes as the undersigned
might or could do in person, and ratifying and confirming all that
said attorney-in-fact and agent may lawfully do or cause to be done
by virtue hereof.
Dated: September 9, 1994
/s/ Lee M. Liberman
-----------------------------------------
Lee M. Liberman
<PAGE> 10
POWER OF ATTORNEY
1933 ACT REGISTRATION STATEMENT
of
BOATMEN'S BANCSHARES, INC.
KNOW ALL MEN BY THESE PRESENTS, That the person whose
signature appears below hereby constitutes and appoints JAMES W.
KIENKER, the true and lawful attorney-in-fact and agent for him and
in his name, place or stead, in any and all capacities, to sign and
file, or cause to be signed and filed, with the Securities and
Exchange Commission (the "Commission"), any registration statement
or statements on Form S-4 under the Securities Act of 1933, as
amended, relating to the issuance of common stock of Boatmen's
Bancshares, Inc. in connection with the Agreement and Plan of
Merger, dated May 19, 1994, by and among Dalhart Bancshares, Inc.,
Dalhart Bancshares of Delaware, Inc., Boatmen's Bancshares, Inc.
and Boatmen's Texas, Inc., and any and all amendments and
supplements thereto, before or after effectiveness of such
statements, and any and all other documents required to be filed
with the Commission in connection therewith, granting unto said
attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done as fully and to all intents and purposes as the undersigned
might or could do in person, and ratifying and confirming all that
said attorney-in-fact and agent may lawfully do or cause to be done
by virtue hereof.
Dated: September 9, 1994
/s/ William E. Maritz
-----------------------------------------
William E. Maritz
<PAGE> 11
POWER OF ATTORNEY
1933 ACT REGISTRATION STATEMENT
of
BOATMEN'S BANCSHARES, INC.
KNOW ALL MEN BY THESE PRESENTS, That the person whose
signature appears below hereby constitutes and appoints JAMES W.
KIENKER, the true and lawful attorney-in-fact and agent for him and
in his name, place or stead, in any and all capacities, to sign and
file, or cause to be signed and filed, with the Securities and
Exchange Commission (the "Commission"), any registration statement
or statements on Form S-4 under the Securities Act of 1933, as
amended, relating to the issuance of common stock of Boatmen's
Bancshares, Inc. in connection with the Agreement and Plan of
Merger, dated May 19, 1994, by and among Dalhart Bancshares, Inc.,
Dalhart Bancshares of Delaware, Inc., Boatmen's Bancshares, Inc.
and Boatmen's Texas, Inc., and any and all amendments and
supplements thereto, before or after effectiveness of such
statements, and any and all other documents required to be filed
with the Commission in connection therewith, granting unto said
attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done as fully and to all intents and purposes as the undersigned
might or could do in person, and ratifying and confirming all that
said attorney-in-fact and agent may lawfully do or cause to be done
by virtue hereof.
Dated: September 8, 1994
/s/ John Peters MacCarthy
-----------------------------------------
John Peters MacCarthy
<PAGE> 12
POWER OF ATTORNEY
1933 ACT REGISTRATION STATEMENT
of
BOATMEN'S BANCSHARES, INC.
KNOW ALL MEN BY THESE PRESENTS, That the person whose
signature appears below hereby constitutes and appoints JAMES W.
KIENKER, the true and lawful attorney-in-fact and agent for him and
in his name, place or stead, in any and all capacities, to sign and
file, or cause to be signed and filed, with the Securities and
Exchange Commission (the "Commission"), any registration statement
or statements on Form S-4 under the Securities Act of 1933, as
amended, relating to the issuance of common stock of Boatmen's
Bancshares, Inc. in connection with the Agreement and Plan of
Merger, dated May 19, 1994, by and among Dalhart Bancshares, Inc.,
Dalhart Bancshares of Delaware, Inc., Boatmen's Bancshares, Inc.
and Boatmen's Texas, Inc., and any and all amendments and
supplements thereto, before or after effectiveness of such
statements, and any and all other documents required to be filed
with the Commission in connection therewith, granting unto said
attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done as fully and to all intents and purposes as the undersigned
might or could do in person, and ratifying and confirming all that
said attorney-in-fact and agent may lawfully do or cause to be done
by virtue hereof.
Dated: September 8, 1994
/s/ Andrew E. Newman
-----------------------------------------
Andrew E. Newman
<PAGE> 13
POWER OF ATTORNEY
1933 ACT REGISTRATION STATEMENT
of
BOATMEN'S BANCSHARES, INC.
KNOW ALL MEN BY THESE PRESENTS, That the person whose
signature appears below hereby constitutes and appoints JAMES W.
KIENKER, the true and lawful attorney-in-fact and agent for him and
in his name, place or stead, in any and all capacities, to sign and
file, or cause to be signed and filed, with the Securities and
Exchange Commission (the "Commission"), any registration statement
or statements on Form S-4 under the Securities Act of 1933, as
amended, relating to the issuance of common stock of Boatmen's
Bancshares, Inc. in connection with the Agreement and Plan of
Merger, dated May 19, 1994, by and among Dalhart Bancshares, Inc.,
Dalhart Bancshares of Delaware, Inc., Boatmen's Bancshares, Inc.
and Boatmen's Texas, Inc., and any and all amendments and
supplements thereto, before or after effectiveness of such
statements, and any and all other documents required to be filed
with the Commission in connection therewith, granting unto said
attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done as fully and to all intents and purposes as the undersigned
might or could do in person, and ratifying and confirming all that
said attorney-in-fact and agent may lawfully do or cause to be done
by virtue hereof.
Dated: September 9, 1994
/s/ Jerry E. Ritter
-----------------------------------------
Jerry E. Ritter
<PAGE> 14
POWER OF ATTORNEY
1933 ACT REGISTRATION STATEMENT
of
BOATMEN'S BANCSHARES, INC.
KNOW ALL MEN BY THESE PRESENTS, That the person whose
signature appears below hereby constitutes and appoints JAMES W.
KIENKER, the true and lawful attorney-in-fact and agent for him and
in his name, place or stead, in any and all capacities, to sign and
file, or cause to be signed and filed, with the Securities and
Exchange Commission (the "Commission"), any registration statement
or statements on Form S-4 under the Securities Act of 1933, as
amended, relating to the issuance of common stock of Boatmen's
Bancshares, Inc. in connection with the Agreement and Plan of
Merger, dated May 19, 1994, by and among Dalhart Bancshares, Inc.,
Dalhart Bancshares of Delaware, Inc., Boatmen's Bancshares, Inc.
and Boatmen's Texas, Inc., and any and all amendments and
supplements thereto, before or after effectiveness of such
statements, and any and all other documents required to be filed
with the Commission in connection therewith, granting unto said
attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done as fully and to all intents and purposes as the undersigned
might or could do in person, and ratifying and confirming all that
said attorney-in-fact and agent may lawfully do or cause to be done
by virtue hereof.
Dated: September 8, 1994
/s/ William P. Stiritz
-----------------------------------------
William P. Stiritz
<PAGE> 15
POWER OF ATTORNEY
1933 ACT REGISTRATION STATEMENT
of
BOATMEN'S BANCSHARES, INC.
KNOW ALL MEN BY THESE PRESENTS, That the person whose
signature appears below hereby constitutes and appoints JAMES W.
KIENKER, the true and lawful attorney-in-fact and agent for him and
in his name, place or stead, in any and all capacities, to sign and
file, or cause to be signed and filed, with the Securities and
Exchange Commission (the "Commission"), any registration statement
or statements on Form S-4 under the Securities Act of 1933, as
amended, relating to the issuance of common stock of Boatmen's
Bancshares, Inc. in connection with the Agreement and Plan of
Merger, dated May 19, 1994, by and among Dalhart Bancshares, Inc.,
Dalhart Bancshares of Delaware, Inc., Boatmen's Bancshares, Inc.
and Boatmen's Texas, Inc., and any and all amendments and
supplements thereto, before or after effectiveness of such
statements, and any and all other documents required to be filed
with the Commission in connection therewith, granting unto said
attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done as fully and to all intents and purposes as the undersigned
might or could do in person, and ratifying and confirming all that
said attorney-in-fact and agent may lawfully do or cause to be done
by virtue hereof.
Dated: September 9, 1994
/s/ Albert E. Suter
-----------------------------------------
Albert E. Suter
<PAGE> 16
POWER OF ATTORNEY
1933 ACT REGISTRATION STATEMENT
of
BOATMEN'S BANCSHARES, INC.
KNOW ALL MEN BY THESE PRESENTS, That the person whose
signature appears below hereby constitutes and appoints JAMES W.
KIENKER, the true and lawful attorney-in-fact and agent for him and
in his name, place or stead, in any and all capacities, to sign and
file, or cause to be signed and filed, with the Securities and
Exchange Commission (the "Commission"), any registration statement
or statements on Form S-4 under the Securities Act of 1933, as
amended, relating to the issuance of common stock of Boatmen's
Bancshares, Inc. in connection with the Agreement and Plan of
Merger, dated May 19, 1994, by and among Dalhart Bancshares, Inc.,
Dalhart Bancshares of Delaware, Inc., Boatmen's Bancshares, Inc.
and Boatmen's Texas, Inc., and any and all amendments and
supplements thereto, before or after effectiveness of such
statements, and any and all other documents required to be filed
with the Commission in connection therewith, granting unto said
attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done as fully and to all intents and purposes as the undersigned
might or could do in person, and ratifying and confirming all that
said attorney-in-fact and agent may lawfully do or cause to be done
by virtue hereof.
Dated: September 9, 1994
/s/ Dwight D. Sutherland
-----------------------------------------
Dwight D. Sutherland
<PAGE> 17
POWER OF ATTORNEY
1933 ACT REGISTRATION STATEMENT
of
BOATMEN'S BANCSHARES, INC.
KNOW ALL MEN BY THESE PRESENTS, That the person whose
signature appears below hereby constitutes and appoints JAMES W.
KIENKER, the true and lawful attorney-in-fact and agent for him and
in his name, place or stead, in any and all capacities, to sign and
file, or cause to be signed and filed, with the Securities and
Exchange Commission (the "Commission"), any registration statement
or statements on Form S-4 under the Securities Act of 1933, as
amended, relating to the issuance of common stock of Boatmen's
Bancshares, Inc. in connection with the Agreement and Plan of
Merger, dated May 19, 1994, by and among Dalhart Bancshares, Inc.,
Dalhart Bancshares of Delaware, Inc., Boatmen's Bancshares, Inc.
and Boatmen's Texas, Inc., and any and all amendments and
supplements thereto, before or after effectiveness of such
statements, and any and all other documents required to be filed
with the Commission in connection therewith, granting unto said
attorney-in-fact and agent, full power and authority to do and
perform each and every act and thing requisite and necessary to be
done as fully and to all intents and purposes as the undersigned
might or could do in person, and ratifying and confirming all that
said attorney-in-fact and agent may lawfully do or cause to be done
by virtue hereof.
Dated: September 8, 1994
/s/ Theodore C. Wetterau
-----------------------------------------
Theodore C. Wetterau
<PAGE> 1
EXHIBIT (99)(A)
---------------
<PAGE> 2
PROXY
SPECIAL MEETING OF SHAREHOLDERS
DALHART BANCSHARES, INC.
------------, 1994
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE COMPANY
The undersigned shareholder of Dalhart Bancshares, Inc., a
Texas corporation (the "Company"), hereby appoints ------------,
- ------------, and ------------, and any of them, with full power to
act alone, as proxies, each with full power of substitution and
revocation, to vote all shares of common stock of the Company which
the undersigned is entitled to vote at the Special Meeting of
Shareholders to be held at the offices of Citizens State Bank of
Dalhart, 323 Denver Avenue, Dalhart, Texas 79022, on ------------,
1994, at ------------ local time, and at any adjournment or
adjournments thereof, with all powers the undersigned would possess
if personally present, as follows:
Proposal to approve an Agreement and Plan of Merger,
dated May 19, 1994, by and among Dalhart Bancshares,
Inc., Dalhart Bancshares of Delaware, Inc., Boatmen's
Bancshares, Inc., a Missouri corporation ("Boatmen's"),
and Boatmen's Texas, Inc., a Missouri corporation and
wholly owned subsidiary of Boatmen's.
------ FOR ------ AGAINST ------ ABSTAIN
The undersigned hereby ratifies and confirms that all said proxies,
or any of them or their substitutes, may lawfully do or cause to be
done by virtue hereof, and acknowledges receipt of the notice of
said meeting and the Joint Proxy Statement/Prospectus accompanying
it.
THIS PROXY WILL BE VOTED AS SPECIFIED BY YOU ABOVE. IF NO
SPECIFICATION IS MADE, YOUR SHARES WILL BE VOTED "FOR" THE PROPOSAL
DESCRIBED ABOVE.
Dated -----------------, 1994
---------------------------------------
Please insert date of signing.
Sign exactly as name appears at
left. Where stock is issued in
two or more names, all should
sign. If signing as attorney,
administrator, executor, trustee
or guardian, give full title as
such. A corporation should sign
by an authorized officer and affix
seal.
<PAGE> 1
EXHIBIT (99)(B)
---------------
<PAGE> 2
On letterhead of:
Dalhart Bancshares, Inc.
------------, 1994
Dear Shareholder:
We are pleased to invite you to attend the Special Meeting of
Shareholders (the "Special Meeting") of Dalhart Bancshares, Inc.
("Dalhart") on ------------, 1994. The Special Meeting will be
held at the offices of Citizens State Bank of Dalhart, 323 Denver
Avenue, Dalhart, Texas 79022, commencing at ------------ a.m. local
time.
At the Special Meeting, Dalhart shareholders will be asked to
approve the merger of Dalhart with a subsidiary of Boatmen's
Bancshares, Inc. ("Boatmen's"). The merger terms provide that upon
consummation of the merger each outstanding share of common stock
of Dalhart will be converted into 6.3599 shares of common stock of
Boatmen's, and cash in lieu of fractional shares, subject to the
escrow arrangement described in the Joint Proxy
Statement/Prospectus, a copy of which is enclosed herewith.
Your Board of Directors submits this proposed merger to you
after careful review and consideration. We believe that this
proposed merger will provide significant value to all shareholders,
enabling holders of Dalhart common stock to participate in the
expanded opportunities for growth that association with a larger,
more geographically-diversified super-regional financial
organization makes possible and position Dalhart and its
shareholders to take advantage of future opportunities as the
banking industry continues to consolidate and restructure.
Accordingly, the Board has unanimously approved the merger as being
in the best interests of Dalhart and its shareholders and
recommends that you vote in favor of the merger at the Special
Meeting.
Shareholders are urged to read carefully the accompanying
Joint Proxy Statement/Prospectus which contains detailed
information concerning the matters to be acted upon at the Special
Meeting.
Your participation in the meeting, in person or by proxy, is
important. Therefore, we ask that you 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 Special Meeting,
you may vote in person if you wish, even if you have previously
mailed in your proxy card.
Sincerely,
<PAGE> 1
EXHIBIT 99(C)
-------------
<PAGE> 2
DALHART BANCSHARES, INC.
A TEXAS CORPORATION
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON ------------, 1994
-------------------------------
The Special Meeting of Shareholders (the "Special Meeting") of
Dalhart Bancshares, Inc. ("Dalhart") will be held on ------------,
1994, at ------------, local time, at the offices of Citizens State
Bank of Dalhart, 323 Denver Avenue, Dalhart, Texas 79022, for the
following purpose:
To consider and vote upon a proposal to approve
and adopt the Agreement and Plan of Merger dated
May 19, 1994, attached as Exhibit A to the
accompanying Joint Proxy Statement/Prospectus,
providing for the merger of Dalhart with and into
Boatmen's Texas, Inc., a Texas corporation and
wholly owned subsidiary of Boatmen's Bancshares,
Inc.
Only the holders of common stock of Dalhart of record at the
close of business on ------------, 1994 are entitled to notice of
and to vote at the Special Meeting or at any adjournments or
postponements thereof.
EACH SHAREHOLDER IS URGED TO COMPLETE AND RETURN PROMPTLY THE
ACCOMPANYING PROXY WHETHER OR NOT HE OR SHE PLANS TO ATTEND THE
SPECIAL MEETING. The prompt return of your signed proxy will help
assure a quorum and aid Dalhart in reducing the expense of
additional proxy solicitation. The giving of such proxy does not
affect your right to vote in person in the event you attend the
Special Meeting.
By Order of the Board of Directors
Secretary
Dalhart, Texas
- ------------, 1994
DALHART SHAREHOLDERS SHOULD NOT SEND IN THEIR STOCK CERTIFICATES
UNTIL THEY RECEIVE THE LETTER OF TRANSMITTAL FORM AND INSTRUCTIONS
FOR SUBMITTING SUCH CERTIFICATES.
<PAGE> 1
EXHIBIT (99)(D)
---------------
<PAGE> 2
PROXY
SPECIAL MEETING OF SHAREHOLDERS
CITIZENS STATE BANK OF DALHART
------------, 1994
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS OF THE BANK
The undersigned shareholder of Citizens State Bank of Dalhart,
a Texas banking association (the "Citizens Bank"), hereby appoints
- ------------, ------------, and ------------, and any of them, with
full power to act alone, as proxies, each with full power of
substitution and revocation, to vote all shares of common stock of
Citizens Bank which the undersigned is entitled to vote at the
Special Meeting of Shareholders to be held at the offices of
Citizens Bank located at 323 Denver Avenue, Dalhart, Texas 79022,
on ------------, 1994, at ------------ local time, and at any
adjournment or adjournments thereof, with all powers the
undersigned would possess if personally present, as follows:
Proposal to approve an Agreement to Merge, dated June 30
1994, between Citizens Bank and Boatmen's First National
Bank of Amarillo, a national banking association, and
joined by Boatmen's Bancshares, Inc., a Missouri
corporation.
------ FOR ------ AGAINST ------ ABSTAIN
The undersigned hereby ratifies and confirms that all said proxies,
or any of them or their substitutes, may lawfully do or cause to be
done by virtue hereof, and acknowledges receipt of the notice of
said meeting and the Joint Proxy Statement/Prospectus accompanying
it.
THIS PROXY WILL BE VOTED AS SPECIFIED BY YOU ABOVE. IF NO
SPECIFICATION IS MADE, YOUR SHARES WILL BE VOTED "FOR" THE PROPOSAL
DESCRIBED ABOVE.
Dated -----------------, 1994
---------------------------------------
Please insert date of signing.
Sign exactly as name appears at
left. Where stock is issued in
two or more names, all should
sign. If signing as attorney,
administrator, executor, trustee
or guardian, give full title as
such. A corporation should sign
by an authorized officer and affix
seal.
<PAGE> 1
EXHIBIT (99)(E)
---------------
<PAGE> 2
On letterhead of:
Citizens State Bank of Dalhart
------------, 1994
Dear Shareholder:
We are pleased to invite you to attend the Special Meeting of
Shareholders (the "Special Meeting") of Citizens State Bank of
Dalhart ("Citizens Bank)" on ------------, 1994. The Special
Meeting will be held at the offices of Citizens Bank located at
323 Denver Avenue, Dalhart, Texas 79022, commencing at ------------
a.m. local time.
At the Special Meeting, Citizens Bank shareholders will be
asked to approve the merger of Citizens Bank with Boatmen's First
National Bank of Amarillo a subsidiary of Boatmen's Bancshares,
Inc. ("Boatmen's"). The merger terms provide that upon
consummation of the merger each outstanding share of common stock
of Citizens Bank will be converted into 35.2840 shares of common
stock of Boatmen's, and cash in lieu of fractional shares, subject
to the escrow arrangement described in the Joint Proxy
Statement/Prospectus, a copy of which is enclosed herewith.
Your Board of Directors submits this proposed merger to you
after careful review and consideration. We believe that this
proposed merger will provide significant value to all shareholders,
enabling holders of Citizens Bank common stock to participate in
the expanded opportunities for growth that association with a
larger, more geographically-diversified super-regional financial
organization makes possible and position Citizens Bank and its
shareholders to take advantage of future opportunities as the
banking industry continues to consolidate and restructure.
Accordingly, the Board has unanimously approved the merger as being
in the best interests of Citizens Bank and its shareholders and
recommends that you vote in favor of the merger at the Special
Meeting.
Shareholders are urged to read carefully the accompanying
Joint Proxy Statement/Prospectus which contains detailed
information concerning the matters to be acted upon at the Special
Meeting.
Your participation in the meeting, in person or by proxy, is
important. Therefore, we ask that you 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 Special Meeting,
you may vote in person if you wish, even if you have previously
mailed in your proxy card.
Sincerely,
<PAGE> 1
EXHIBIT (99)(F)
---------------
<PAGE> 2
CITIZENS STATE BANK OF DALHART
A TEXAS STATE BANK
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON ------------, 1994
-------------------------------
The Special Meeting of Shareholders (the "Special Meeting") of
Citizens State Bank of Dalhart ("Citizens Bank") will be held on
- ------------, 1994, at ------------, local time, at the offices of
Citizens Bank, 323 Denver Avenue, Dalhart, Texas 79022, for the
following purpose:
To consider and vote upon a proposal to approve
and adopt the Agreement to Merge dated June 30,
1994, attached as Exhibit B to the accompanying
Joint Proxy Statement/Prospectus, providing for
the merger of Citizens Bank with and into
Boatmen's First National Bank of Amarillo, a
national banking association and a subsidiary of
Boatmen's Bancshares, Inc.
Only the holders of common stock of Citizens Bank of record at
the close of business on ------------, 1994 are entitled to notice
of and to vote at the Special Meeting or at any adjournments or
postponements thereof.
EACH SHAREHOLDER IS URGED TO COMPLETE AND RETURN PROMPTLY THE
ACCOMPANYING PROXY WHETHER OR NOT HE OR SHE PLANS TO ATTEND THE
SPECIAL MEETING. The prompt return of your signed proxy will help
assure a quorum and aid Citizens Bank in reducing the expense of
additional proxy solicitation. The giving of such proxy does not
affect your right to vote in person in the event you attend the
Special Meeting.
By Order of the Board of Directors
Secretary
Dalhart, Texas
- ------------, 1994
CITIZENS BANK SHAREHOLDERS SHOULD NOT SEND IN THEIR STOCK
CERTIFICATES UNTIL THEY RECEIVE THE LETTER OF TRANSMITTAL FORM AND
INSTRUCTIONS FOR SUBMITTING SUCH CERTIFICATES.
