<PAGE> 1
On letterhead of:
West Side Bancshares, Inc.
------------, 1995
Dear Shareholder:
We are pleased to invite you to attend the Special Meeting
of Shareholders (the "Special Meeting") of West Side Bancshares,
Inc. ("West Side") on ------------, 1995. The Special Meeting
will be held at the offices of Bank of the West, 2909 Sherwood
Way, San Angelo, Texas 76901, commencing at ------------ local
time.
At the Special Meeting, West Side shareholders will be asked
to approve the merger of West Side 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 West Side will be converted into 1.8472 shares of common
stock of Boatmen's, and cash in lieu of fractional shares.
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 West Side 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 West
Side 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 West Side
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
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> 2
WEST SIDE BANCSHARES, INC.
A TEXAS CORPORATION
NOTICE OF SPECIAL MEETING OF SHAREHOLDERS
TO BE HELD ON ------------, 1995
-----------------------------
The Special Meeting of Shareholders (the "Special Meeting")
of West Side Bancshares Inc. ("West Side") will be held on
- ------------, 1995, at ------------, local time, at the offices
of Bank of the West, 2909 Sherwood Way, San Angelo, Texas 76901,
for the purpose of considering and voting upon a proposal to
approve and adopt the Agreement and Plan of Merger dated November
14, 1994, attached as Appendix A to the accompanying Proxy
Statement/Prospectus, providing for the merger of West Side with
and into Boatmen's Texas, Inc., a Missouri corporation and
wholly-owned subsidiary of Boatmen's Bancshares, Inc.
Only the holders of common stock of West Side of record at
the close of business on ------------, 1995 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 West Side 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
San Angelo, Texas
- ------------, 1995
WEST SIDE SHAREHOLDERS SHOULD NOT SEND IN THEIR STOCK
CERTIFICATES UNTIL THEY RECEIVE THE LETTER OF TRANSMITTAL FORM
AND INSTRUCTIONS FOR SUBMITTING SUCH CERTIFICATES.
<PAGE> 3
Filed Pursuant to Rule 424(b)(3)
Registration Number 33-57641
WEST SIDE BANCSHARES, INC.
PROXY STATEMENT
----------------------
BOATMEN'S BANCSHARES, INC.
PROSPECTUS
This Proxy Statement/Prospectus ("Proxy Statement/Prospectus")
is being furnished to the shareholders of West Side Bancshares,
Inc., a Texas corporation ("West Side"), in connection with the
solicitation of proxies by the Board of Directors of West Side for
use at the Special Meeting of Shareholders of West Side to be held
at 3:00 p.m., local time, on March 24, 1995, at the offices of
Bank of the West, 2909 Sherwood Way, San Angelo, Texas (the
"Special Meeting").
At the Special Meeting, shareholders of West Side will
consider and vote upon the Agreement and Plan of Merger, dated
November 14, 1994 (the "Merger Agreement"), among West Side,
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 West Side with and into
Boatmen's-Texas (the "Merger"). Upon consummation of the Merger,
each issued and outstanding share of common stock of West Side
(other than shares held by any shareholder properly exercising
dissenters' rights) would be converted into the right to receive
1.8472 shares of common stock, par value $1.00 per share, of
Boatmen's and any attached rights ("Boatmen's Common"), plus cash
in lieu of any fractional share interests.
This Proxy Statement/Prospectus also constitutes a prospectus
of Boatmen's with respect to up to 615,100 shares of Boatmen's
Common issuable in the Merger to holders of common stock of West
Side. The outstanding shares of Boatmen's Common are, and the
shares of Boatmen's Common to be issued in the Merger will be,
included for quotation on the Nasdaq Stock Market's National Market
("Nasdaq"). The last reported sale price of Boatmen's Common on
Nasdaq on February 10, 1995, was $29.88.
This Proxy Statement/Prospectus and the accompanying form of
proxy are first being mailed to shareholders of West Side on or
about February 13, 1995 (the "Mailing Date").
The Proxy Statement/Prospectus does not cover any resales of
the Boatmen's Common offered hereby to be received by the
stockholders deemed to be "affiliates" of Boatmen's or West Side
upon consummation of the Merger. No person is authorized to make
use of this Proxy Statement/Prospectus in connection with such
resales.
THE SHARES OF BOATMEN'S COMMON ISSUABLE IN THE MERGER
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 PROXY STATEMENT/PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
-----------------------------------
THE SHARES OF BOATMEN'S COMMON 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 PROXY STATEMENT/PROSPECTUS IS FEBRUARY 13, 1995
<PAGE> 4
<TABLE>
TABLE OF CONTENTS
-----------------
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<S> <C>
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE . . . . . . . . . . . . . . . . . . . . 1
SUMMARY INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Introduction. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Boatmen's . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Boatmen's-Texas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
West Side . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
The Special Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Date, Time and Place of the Special Meeting . . . . . . . . . . . . . . . . 4
Matters to be Considered at the Special Meeting . . . . . . . . . . . . . . 4
Record Date for the Special Meeting . . . . . . . . . . . . . . . . . . . . 4
Vote Required to Approve Merger Agreement . . . . . . . . . . . . . . . . . 4
Certain Holders of West Side Common . . . . . . . . . . . . . . . . . . . . 5
Revocation of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
The Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Merger Consideration. . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Value of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Reasons for the Merger and Recommendation of the Boards of
Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Conditions to the Merger; Regulatory Approvals. . . . . . . . . . . . . . . 6
Conduct of Business Pending the Merger; Dividends . . . . . . . . . . . . . 6
Termination of the Merger Agreement . . . . . . . . . . . . . . . . . . . . 6
Payment Upon Occurrence of Certain Triggering Events. . . . . . . . . . . . 7
Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . . . 8
Accounting Treatment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Effective Time of the Merger. . . . . . . . . . . . . . . . . . . . . . . . 8
Interests of Certain Persons in the Merger. . . . . . . . . . . . . . . . . 8
Dissenters' Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Management and Operations After the Merger. . . . . . . . . . . . . . . . . . . . 9
Comparison of Shareholder Rights. . . . . . . . . . . . . . . . . . . . . . . . . 9
COMPARATIVE STOCK PRICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
SELECTED COMPARATIVE PER SHARE DATA . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
THE SPECIAL MEETING . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Date, Time and Place of Special Meeting . . . . . . . . . . . . . . . . . . . . . 15
Matters to be Considered at the Special Meeting . . . . . . . . . . . . . . . . . 15
Record Date for Special Meeting . . . . . . . . . . . . . . . . . . . . . . . . . 15
Vote Required to Approve the Merger Agreement . . . . . . . . . . . . . . . . . . 15
i
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<CAPTION>
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<S> <C>
Voting and Revocation of Proxies for Special Meeting. . . . . . . . . . . . . . . 16
Solicitation of Proxies for the Special Meeting . . . . . . . . . . . . . . . . . 16
Expenses for Preparation of Proxy Statement/Prospectus. . . . . . . . . . . . . . 16
Mailing Date of Proxy Statement/Prospectus. . . . . . . . . . . . . . . . . . . . 16
THE PARTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Boatmen's . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Pending Acquisitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Boatmen's-Texas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
West Side . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
THE MERGER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Background of the Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Reasons for the Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Recommendation of the Boards of Directors . . . . . . . . . . . . . . . . . . . . 20
Merger Consideration. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Form of the Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Conduct of Business Pending the Merger; Dividends . . . . . . . . . . . . . . . . 21
Conditions to Consummation of the Merger. . . . . . . . . . . . . . . . . . . . . 21
Regulatory Approvals. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Termination or Abandonment. . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Payment Upon Occurrence of Certain Triggering Events. . . . . . . . . . . . . . . 23
Dissenters' Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Exchange of West Side Stock Certificates; Fractional Shares . . . . . . . . . . . 25
Representations and Warranties of West Side, Boatmen's and
Boatmen's-Texas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Certain Other Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Business of West Side in Ordinary Course. . . . . . . . . . . . . . . . . . 27
Additional West Side Reserves, Accruals, Charges, and
Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Environmental Inspections . . . . . . . . . . . . . . . . . . . . . . . . . 28
Other West Side Agreements. . . . . . . . . . . . . . . . . . . . . . . . . 28
Boatmen's Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Waiver and Amendment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Expenses and Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . 30
Resale of Boatmen's Common. . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Interests of Certain Persons in the Merger. . . . . . . . . . . . . . . . . . . . 31
Insurance; Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . 31
Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Effective Time. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Accounting Treatment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Management and Operations After the Merger. . . . . . . . . . . . . . . . . . . . 32
Effect on Employee Benefit and Stock Plans. . . . . . . . . . . . . . . . . . . . 32
PRO FORMA FINANCIAL DATA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ii
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<CAPTION>
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<S> <C>
DESCRIPTION OF BOATMEN'S CAPITAL STOCK. . . . . . . . . . . . . . . . . . . . . . . . . 41
Boatmen's Common. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
Boatmen's Series B Preferred Stock. . . . . . . . . . . . . . . . . . . . . . . . 42
COMPARISON OF SHAREHOLDER RIGHTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
Shareholder Vote Required for Certain Transactions. . . . . . . . . . . . . . . . 43
Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Special Meetings of Shareholders; Shareholder Action by Written
Consent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
Notice of Shareholder Nominations of Directors. . . . . . . . . . . . . . . . . . 46
Shareholder Proposal Procedures . . . . . . . . . . . . . . . . . . . . . . . . . 46
Shareholder Rights Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Dissenters' Rights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Takeover Statutes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Liability of Directors; Indemnification . . . . . . . . . . . . . . . . . . . . . 50
Limitation of Liability of Directors. . . . . . . . . . . . . . . . . . . . . . . 52
Consideration of Non-Shareholder Interests. . . . . . . . . . . . . . . . . . . . 52
INFORMATION ABOUT WEST SIDE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
Business of West Side and Bank of the West. . . . . . . . . . . . . . . . . . . . 53
Management's Discussion and Analysis of Financial Condition
and Results of Operations of West Side and Subsidiaries. . . . . . . 54
Security Ownership of Certain Beneficial Owners and Management of
West Side. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76
LEGAL OPINION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78
Independent Auditors for Boatmen's. . . . . . . . . . . . . . . . . . . . . . . . 78
Independent Auditors for West Side. . . . . . . . . . . . . . . . . . . . . . . . 78
Presence at Special Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
SHAREHOLDER PROPOSALS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
FINANCIAL STATEMENTS OF WEST SIDE . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
APPENDICES
Merger Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
Excerpts of The Texas Business Corporation Act (Dissenters'
Rights). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
</TABLE>
iii
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NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION NOT CONTAINED IN THIS 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 OR WEST SIDE. THIS 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
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 Seven World Trade Center,
New York, New York 10048, and Suite 1400, Citicorp 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 shares of Boatmen's Common to
be issued pursuant to the Merger described herein. This 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 Proxy Statement/
Prospectus or in any document incorporated in this 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 -- Pending Acquisitions) pursuant
to the Exchange Act are incorporated by reference in this 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, June 30, 1994 and September 30, 1994;
1
<PAGE> 8
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 Reports on Form 8-K dated September 2,
1994 and January 20, 1995;
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, June 30, 1994 and September 30, 1994;
and
7. Worthen's Current Reports on Form 8-K dated June 24, 1994,
September 9, 1994 and January 24, 1995.
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 on or after
the date of this Proxy Statement/Prospectus and prior to the date of
the Special Meeting shall be deemed to be incorporated by reference in
this 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
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 Proxy Statement/Prospectus.
THIS 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, TO ANY PERSON, INCLUDING ANY
BENEFICIAL OWNER, TO WHOM THIS PROXY STATEMENT/PROSPECTUS IS
DELIVERED, UPON WRITTEN OR ORAL REQUEST 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 MARCH 17, 1995.
2
<PAGE> 9
SUMMARY INFORMATION
The following is a brief summary of certain information contained
elsewhere in this 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 Proxy Statement/Prospectus, the Appendices hereto and the
documents referred to herein. All information contained in this Proxy
Statement/Prospectus relating to Boatmen's and its subsidiaries has
been supplied by Boatmen's and all information relating to West Side
and its subsidiaries has been supplied by West Side. Shareholders are
urged to read this Proxy Statement/Prospectus and the Appendices
hereto in their entirety.
INTRODUCTION
This Proxy Statement/Prospectus relates to an Agreement and Plan
of Merger dated November 14, 1994 (the "Merger Agreement"), among West
Side Bancshares, Inc., a Texas corporation ("West Side"), 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 merger of West Side with and into Boatmen's-Texas (the "Merger").
As a result of the Merger, Boatmen's will retain beneficial ownership
of all of the issued and outstanding stock of Boatmen's-Texas, and the
separate corporate existence of West Side will cease.
In connection with the Merger, Boatmen's and Boatmen's-Texas have
caused Boatmen's First National Bank of Amarillo, a national banking
association and wholly-owned subsidiary of Boatmen's-Texas
("Boatmen's-Amarillo") and West Side has caused Bank of the West, San
Angelo, Texas, a Texas state-chartered banking association and wholly-
owned subsidiary of Westside Delaware Financial Corporation, a
Delaware corporation ("Westside-Delaware"), which, in turn, is a
wholly-owned subsidiary of West Side, to enter into an Agreement to
Merge, dated December 15, 1994 (the "Subsidiary Merger Agreement"),
which provides for, among other things, the merger of Bank of the West
with and into Boatmen's-Amarillo ("the "Subsidiary Bank Merger"). It
is anticipated that the Subsidiary Bank Merger and the Merger would be
consummated contemporaneously.
The summary set forth in this Proxy Statement/Prospectus of
certain provisions of the Merger Agreement is qualified in its
entirety by reference to the full text of the Merger Agreement, which
is incorporated by reference herein and attached as Appendix A to this
Proxy Statement/Prospectus.
THE PARTIES
BOATMEN'S
Boatmen's is a multi-bank holding company headquartered in
St. Louis, Missouri. At September 30, 1994, Boatmen's had
consolidated assets of approximately $28.3 billion and shareholders'
equity of approximately $2.2 billion, making it the largest bank
holding company in Missouri and among the 30 largest in the United
States. Boatmen's 45 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 $35.5 billion in assets under management at
September 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. For information regarding the
impact of the increasing interest rate environment on Boatmen's off-
balance sheet financial instruments, see "PRO FORMA FINANCIAL DATA." The
3
<PAGE> 10
principal executive offices of Boatmen's are at One Boatmen's Plaza,
800 Market Street, St. Louis, Missouri 63101 (telephone number
(314) 466-6000).
BOATMEN'S-TEXAS
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
September 30, 1994, Boatmen's-Texas had consolidated assets of
approximately $1.1 billion and shareholders' equity of approximately
$78 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).
WEST SIDE
West Side is a bank holding company headquartered in San Angelo,
Texas. West Side's wholly-owned subsidiary, Westside Delaware, owns
all of the outstanding capital stock of Bank of the West. The
businesses of West Side and Westside Delaware consist primarily of the
ownership, supervision and control of Bank of the West, a commercial
bank offering complete banking services to the commercial,
agricultural and residential areas that it serves. At September 30,
1994, West Side had consolidated assets of approximately $142 million
and shareholders' equity of approximately $11.5 million. The
principal executive offices of West Side and Bank of the West are at
2909 Sherwood Way, San Angelo, Texas 76901 (telephone number (915)
947-2700).
THE SPECIAL MEETING
DATE, TIME AND PLACE OF THE SPECIAL MEETING
The special meeting of shareholders of West Side (the "Special
Meeting") will be held at the offices of Bank of the West, 2909
Sherwood Way, San Angelo, Texas 76901, on March 24, 1995, at 3:00 p.m.,
local time.
MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING
At the Special Meeting, holders of common stock, par value $1.00
per share, of West Side ("West Side Common") will consider and vote
upon the approval of the Merger Agreement providing for, among other
things, the Merger of West Side with and into Boatmen's-Texas. In
addition, the holders of West Side Common may be asked to vote on a
proposal to adjourn or postpone the Special Meeting, which adjournment
or postponement could be used for the purpose, among others, of
allowing time for the solicitation of additional votes to approve the
Merger Agreement.
RECORD DATE FOR THE SPECIAL MEETING
The record date for the Special Meeting is February 10, 1995.
VOTE REQUIRED TO APPROVE MERGER AGREEMENT
Approval of the Merger Agreement will require the affirmative
vote of two-thirds (2/3) of the outstanding shares of West Side Common
entitled to vote thereon. Holders of West Side Common will be
entitled to one vote per share.
4
<PAGE> 11
CERTAIN HOLDERS OF WEST SIDE COMMON
As of the record date, the officers and directors of West Side
and their affiliates owned beneficially 208,157 shares (approximately
67%) of West Side Common, all of which are expected by management of
West Side to be voted in favor of the Merger Agreement. See
"INFORMATION ABOUT WEST SIDE -- Security Ownership of Certain
Beneficial Owners and Management of West Side."
REVOCATION OF PROXIES
Proxies for use at the Special Meeting accompany this Proxy
Statement/Prospectus. Any proxy given pursuant to this solicitation
may be revoked by the grantor at any time prior to the voting thereof
on the Merger Agreement by filing with the Secretary of West Side a
written revocation or a duly executed proxy bearing a later date. A
holder of West Side Common may withdraw his or her proxy at the
Special Meeting at any time before it is exercised by electing to vote
in person; however, attendance at the Special Meeting will not in and
of itself constitute a revocation of the proxy.
THE MERGER
MERGER CONSIDERATION
At the time the Merger is consummated (the "Effective Time"),
West Side will merge into Boatmen's-Texas and, as a result thereof,
each share of West Side 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 1.8472 shares of common stock, par value $1.00 per share, of
Boatmen's, 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, ("Boatmen's
Common") (such number of shares of Boatmen's Common, together with
any cash payment in lieu of fractional shares, as described herein,
is referred to herein as the "Merger Consideration"). For a
description of the Rights Agreement, see "COMPARISON OF SHAREHOLDER
RIGHTS -- Shareholder Rights Plan." No fractional shares of
Boatmen's Common will be issued and, in lieu thereof, holders of
shares of West Side Common who would otherwise be entitled to a
fractional share interest (after taking into account all shares of
West Side Common held by such holder) 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 ("Nasdaq") on the business day immediately
preceding the date on which the Effective Time occurs.
VALUE OF THE MERGER
Based on the Merger Consideration and the closing sales price of
Boatmen's Common as reported on Nasdaq on February 10, 1995, the Merger
had a per share value of $55.19 to holders of West Side Common, and the
approximate total value of the Merger Consideration to West Side
shareholders, was $18.37 million. The market value of the Merger
Consideration as stated above may increase or decrease depending on the
closing price of Boatmen's Common as reported on Nasdaq on the date on
which the Effective Time occurs. No assurance can be given as to the
market price of Boatmen's Common on the date on which the Effective
Time occurs.
REASONS FOR THE MERGER AND RECOMMENDATION OF THE BOARDS OF DIRECTORS
The Board of Directors of West Side has determined that the
Merger and the Merger Agreement, including the Merger Consideration,
are fair to, and in the best interests of, West Side, Bank of the West
5
<PAGE> 12
and their shareholders. The Board believes that a business
combination with a larger financial institution and more
geographically diversified regional bank holding company would, in
addition to providing significant shareholder value to all
shareholders, enable Bank of the West to compete more effectively in
its market area and participate in the expanded opportunities for
growth that the Merger and the Subsidiary Bank Merger will make
possible. Accordingly, the Board unanimously recommends that
shareholders of West Side vote for approval and adoption of the Merger
Agreement.
Certain members of the management and Board of Directors of West
Side have interests in the Merger that are in addition to the
interests of shareholders of West Side generally. See "THE MERGER --
Interests of Certain Persons in the Merger."
The Board of Directors of Boatmen's believes that the acquisition
of West Side and the merger of its banking subsidiary, Bank of the
West, into Boatmen's-Amarillo, would be a natural and desirable
addition to Boatmen's banking franchise in Texas.
CONDITIONS TO THE MERGER; REGULATORY APPROVALS
The Merger is subject to various conditions including, among
other things, (i) approval of the Merger Agreement by the requisite
two-thirds (2/3) vote of the shareholders of West Side; (ii) receipt
of regulatory approval from the Board of Governors of the Federal
Reserve System (the "Federal Reserve") with respect to the Merger;
(iii) receipt of an opinion of counsel on certain tax aspects of the
Merger; and (iv) the occurrence of no material adverse changes in the
businesses of Boatmen's or West Side. The Merger may not be
consummated until the 30th day after the date of Federal Reserve
approval; provided, however, that the Merger may be consummated after
the 15th day following the date of Federal Reserve approval if the
Federal Reserve has not received any adverse comments from the United
States Department of Justice relating to the competitive aspects of the
transaction and the Department of Justice has consented to such shorter
waiting period. An application for the required regulatory approval
of the Merger from the Federal Reserve has been filed and is pending.
CONDUCT OF BUSINESS PENDING THE MERGER; DIVIDENDS
Pursuant to the Merger Agreement, West Side 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 Merger Agreement. The Merger Agreement provides that West Side
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 Merger Agreement, except for the payment of its regular annual
dividend in the amount of $1.00 per share in January, 1995, which such
dividend has been declared and paid.
TERMINATION OF THE MERGER AGREEMENT
The Merger Agreement may be terminated at any time prior to the
Effective Time: (i) by either party if the Merger is not consummated
on or prior to November 14, 1995; (ii) by mutual agreement of
Boatmen's and West Side; (iii) by Boatmen's or West Side in the event
of a material breach by the other of any of its representations and
warranties or agreements under the Merger Agreement not cured within
thirty (30) 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 West
Side, Westside Delaware or Bank of the West 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 Merger Agreement; (vi) by
Boatmen's if certain reports of environmental inspection on
6
<PAGE> 13
the real properties of West Side to be obtained pursuant to the Merger
Agreement should disclose any contamination or presence of hazardous
wastes, the estimated clean up or other remedial cost of which exceeds
$100,000; (vii) by either party if any regulatory application filed in
connection with the Merger or the Subsidiary Bank Merger should be
finally denied or disapproved by the respective regulatory authority;
and (viii) by either party if the Merger is not approved by the
shareholders of West Side.
PAYMENT UPON OCCURRENCE OF CERTAIN TRIGGERING EVENTS
The Merger Agreement provides that upon the occurrence of one or
more Triggering Events (as described below), West Side shall pay to
Boatmen's the sum of $500,000.
As used in the Merger Agreement, the term "Triggering Event"
means any of the following events: (i) termination of the Merger
Agreement by Boatmen's upon a breach thereof by West Side, provided
that within eighteen (18) months of the date of such termination, an
event described in clause (iii) or (iv) of this sentence shall have
occurred; (ii) the failure of West Side's shareholders to approve the
Merger and the Merger Agreement at the Special Meeting; provided,
however, that the failure of West Side's shareholders to approve the
Merger and the 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 Nasdaq during the period of twenty (20) trading
days ending on the second trading day immediately preceding the
Mailing Date (the "Boatmen's Final Price"), is less than $28.00, 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 .15 from such
quotient; (iii) any person or group of persons (other than Boatmen's)
acquires, or has the right to acquire, thirty-four percent (34%) or
more of the outstanding shares of West Side Common (exclusive of any
shares of West Side Common sold directly or indirectly to such person
or group of persons by Boatmen's); and (iv) upon the entry by West
Side or Bank of the West 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 West Side or Bank of the West or to purchase or
acquire West Side or all or substantially all of West Side's or Bank
of the West's assets.
As used in the Merger Agreement, (a) "Index Group" means all of
the bank holding companies listed on Exhibit 7.09 to the 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 (20) trading days ending at the end of the
fifth trading day immediately preceding the closing date of the Merger
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 under applicable S.E.C. regulations)) in exchange for
its stock; (b) "Boatmen's Initial Price" means the closing price of a
share of Boatmen's Common as reported on Nasdaq on November 14, 1994;
(c) "Initial Index Price" means the weighted average (weighted in
accordance with the factors specified on Exhibit 7.09 to the 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 November 14,
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 (20)
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 Merger Agreement) of the Final Prices for all of
the companies comprising the Index Group.
7
<PAGE> 14
FEDERAL INCOME TAX CONSEQUENCES
The Merger is intended to qualify as a tax-free reorganization so
that no gain or loss would be recognized by Boatmen's or West Side,
and no gain or loss would be recognized by West Side 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
Merger is conditioned upon receipt by Boatmen's of an opinion of
Lewis, Rice & Fingersh, L.C., counsel to Boatmen's, that (i) the
Merger will constitute a reorganization within the meaning of Section
368(a) of the Internal Revenue Code of 1986, as amended, (ii) no gain
or loss will be recognized by the shareholders of West Side who
receive solely shares of Boatmen's Common, (iii) the basis of shares
of Boatmen's Common received by the shareholders of West Side will be
the same as the basis of shares of West Side 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 West Side Common exchanged therefor, provided such
shares were held as capital assets as of the Effective Time.
THE FOREGOING IS A GENERAL SUMMARY OF ALL OF THE MATERIAL FEDERAL
INCOME TAX CONSEQUENCES OF THE MERGER TO WEST SIDE SHAREHOLDERS,
WITHOUT REGARD TO THE PARTICULAR FACTS AND CIRCUMSTANCES OF EACH
SHAREHOLDER'S TAX SITUATION AND STATUS. EACH WEST SIDE SHAREHOLDER
SHOULD CONSULT HIS OR HER OWN TAX ADVISOR REGARDING ANY SUCH SPECIFIC
TAX SITUATION AND STATUS, INCLUDING THE APPLICATION AND EFFECT OF
FEDERAL, STATE, LOCAL AND FOREIGN LAWS AND THE POSSIBLE EFFECT OF
CHANGES IN FEDERAL AND OTHER TAX LAWS.
ACCOUNTING TREATMENT
The Merger will be accounted for by Boatmen's under the purchase
method of accounting in accordance with Accounting Principles Board
Opinion No. 16, "Business Combinations", as amended. Under this
method of accounting, the purchase price will be allocated to assets
acquired and liabilities assumed based on their estimated fair values
at the Effective Time. Income of the combined company will not
include income (or loss) of West Side prior to the Effective Time.
EFFECTIVE TIME OF THE MERGER
The Merger Agreement provides that the Merger will become
effective upon the filing of a Certificate of Merger with the
Secretary of State of the State of Missouri. It is presently
anticipated that the Merger and the Subsidiary Bank Merger will be
consummated contemporaneously during the first quarter of 1995, but no
assurance can be given that such timetable will be met.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Certain members of West Side's management and Board of Directors
have interests in the Merger that are in addition to the interests of
shareholders of West Side generally. These consist of provisions in the
Merger Agreement relating to indemnification and employee benefits.
It is presently anticipated that the executive officers of Bank of the
West will continue as officers of the San Angelo branch of Boatmen's-
Amarillo following the Subsidiary Bank Merger. There are no written
employment agreements with respect to such anticipated continued
employment.
For information about the percentage of West Side Common owned by
the directors and executive officers of West Side, see "INFORMATION
ABOUT WEST SIDE -- Security Ownership of Certain Beneficial Owners and
Management of West Side." None of the directors or executive officers
of West Side would own, on a pro forma basis giving effect to the
Merger, more than 1% of the issued and outstanding shares of Boatmen's
Common.
8
<PAGE> 15
DISSENTERS' RIGHTS
The rights of dissenting shareholders of West Side 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 West Side Common held immediately before the Merger is
consummated if such shareholder: (i) files a written objection to the
proposed Merger prior to the Special Meeting; (ii) does not vote his
or her shares in favor of approving the Merger Agreement; (iii) makes
written demand on West Side for payment of the fair value of his or
her shares within ten (10) days after Boatmen's mails or delivers
notice of the consummation of the Merger; (iv) submits his or her
certificates to Boatmen's within twenty (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 sixty (60) days of Boatmen's
offer to accept that offer or, within 120 days from the date of the
Merger, files a petition with the appropriate court for an appraisal.
See "THE MERGER -- Dissenters' Rights" and Appendix B hereto.
MANAGEMENT AND OPERATIONS AFTER THE MERGER
It is anticipated that, as of the Effective Time of the Merger,
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
Bank of the West will operate as branch offices of Boatmen's-Amarillo.
It is not anticipated that the management or Board of Directors of
Boatmen's, Boatmen's-Texas or Boatmen's-Amarillo will be affected as a
result of the Merger or the Subsidiary Bank Merger.
COMPARISON OF SHAREHOLDER RIGHTS
The rights of the shareholders of West Side Common and Boatmen's
Common differ in certain respects. The rights of the shareholders of
West Side who receive shares of Boatmen's Common in the 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 West Side, which is a
Texas corporation, 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. See "COMPARISON OF SHAREHOLDER
RIGHTS."
9
<PAGE> 16
<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. There is no
established trading market for West Side Common. The following
table sets forth the high and low last sale prices of Boatmen's
Common for the periods indicated, as reported on Nasdaq, and the
high and low trading prices of West Side Common known to management
of West Side. 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 "1993 Stock
Split").
<CAPTION>
Boatmen's West Side
Common Stock Common Stock
------------ ------------
High Low High Low
---- --- ---- ---
<S> <C> <C> <C> <C>
1992 First Quarter. . . . . . . $24.19 $21.19 $18.00 $18.00
Second Quarter . . . . . . 25.63 21.44 <F*> <F*>
Third Quarter. . . . . . . 26.63 25.00 18.00 18.00
Fourth Quarter . . . . . . 28.25 24.75 18.00 18.00
1993 First Quarter. . . . . . . 30.50 26.88 <F*> <F*>
Second Quarter . . . . . . 32.50 27.25 18.00 18.00
Third Quarter. . . . . . . 32.38 29.19 <F*> <F*>
Fourth Quarter . . . . . . 33.50 27.50 19.00 19.00
1994 First Quarter. . . . . . . 30.50 26.75 <F*> <F*>
Second Quarter . . . . . . 35.00 28.88 21.00 18.00
Third Quarter. . . . . . . 34.88 30.13 20.00 20.00
Fourth Quarter . . . . . . 31.13 26.25 <F*> <F*>
1995 First Quarter
(through February 10). . 30.88 27.25 35.00 35.00
<FN>
- -------------------------------------------
<F*> Management of West Side is not aware of any sales of shares
of West Side Common during the periods indicated. The most recent
transaction reported to management of West Side involving shares of
West Side Common took place on February 6, 1995, at a price per share
of $35.00.
</TABLE>
On November 14, 1994, the last trading day before the
announcement of the proposed Merger, the closing sale price of
Boatmen's Common as reported on Nasdaq was $29.125 per share. On
such date, the equivalent per share price for West Side Common,
calculated on the basis of the Merger Consideration, was $53.80.
On February 10, 1995, the closing sale prices of Boatmen's
Common as reported on Nasdaq was $29.88 per share and the
equivalent per share price for West Side Common was $55.19. On
such date, there were approximately 29,500 and 230 holders of
record of Boatmen's Common and West Side Common, respectively.
10
<PAGE> 17
<TABLE>
SELECTED COMPARATIVE PER SHARE DATA<F1>
(unaudited)
The following summary presents comparative historical, pro forma
and pro forma equivalent unaudited per share data for Boatmen's and
West Side. The pro forma amounts also give effect to the pending
acquisition of Worthen Banking Corporation. See "THE
PARTIES--Boatmen's--Pending Acquisitions," and "PRO FORMA FINANCIAL
DATA." The pro forma amounts assume the Merger had been effective
during the periods presented and has been accounted for under the
purchase method of accounting. For a description of the purchase
method of accounting with respect to the Merger, see "THE
MERGER--Accounting Treatment." The amounts designated "Pro Forma
Combined Per Boatmen's Share" represent the pro forma results of
the Merger, the amounts designated "Equivalent Pro Forma Per West
Side Share" are computed by multiplying the Pro Forma Combined Per
Boatmen's Share amounts by a factor of 1.8472 to reflect the Merger
Consideration (which equals 1.8472 shares of Boatmen's Common for
each share of West Side Common). See "THE MERGER--Merger
Consideration." 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 Proxy
Statement/Prospectus. See "INCORPORATION OF CERTAIN DOCUMENTS BY
REFERENCE," "PRO FORMA FINANCIAL DATA," and "INDEX TO FINANCIAL
STATEMENTS OF WEST SIDE."
<CAPTION>
Nine Months Ended September 30, Year Ended
------------------------------- ----------
1994 1993 December 31, 1993
---- ---- -----------------
<S> <C> <C> <C>
NET INCOME PER COMMON SHARE:
Historical
Boatmen's . . . . . . . . . . . . $2.52 $2.32 $3.07
West Side . . . . . . . . . . . . 5.66 5.63 7.42
Pro forma combined per
Boatmen's share . . . . . . . . . 2.47 2.20 2.92
Equivalent pro forma
per West Side share . . . . . . . 4.56 4.06 5.39
DIVIDENDS PER COMMON SHARE:
Historical
Boatmen's . . . . . . . . . . . . $0.93 $0.84 $1.15
West Side . . . . . . . . . . . . 1.00 0.50 0.50
Pro forma combined per
Boatmen's share <F2>. . . . . . . 0.93 0.84 1.15
Equivalent pro forma
per West Side share <F3>. . . . . 1.72 1.55 2.12
BOOK VALUE PER COMMON SHARE
(PERIOD END):
Historical
Boatmen's . . . . . . . . . . . . $21.06 $19.66 $20.49
West Side . . . . . . . . . . . . 40.44 35.12 36.01
Pro forma combined per
Boatmen's share . . . . . . . . . 20.54 19.11 19.90
Equivalent pro forma
per West Side share . . . . . . . 37.94 35.30 36.76
<FN>
- --------------
<F1> Reflects restatement of Boatmen's share amounts to give effect
to the 1993 Stock Split.
<F2> Boatmen's pro forma dividends per share represent historical
dividends per share paid by Boatmen's.
<F3> Represents historical dividends per share paid by Boatmen's
calculated on the basis of the Merger Consideration.
</TABLE>
11
<PAGE> 18
SELECTED FINANCIAL DATA
The following tables present selected consolidated historical
financial data for Boatmen's, selected consolidated unaudited
historical financial data for West Side, and unaudited pro forma
combined amounts reflecting the Merger. The pro forma amounts
assume the Merger had been effective during the periods presented.
The data presented are derived from the consolidated financial
statements of Boatmen's and West Side and should be read in
conjunction with the more detailed information and financial
statements included herein or incorporated by reference in this
Proxy Statement/Prospectus. The data should also be read in
conjunction with the unaudited pro forma financial statements
included elsewhere in this Proxy Statement/Prospectus. See
"INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE," "PRO FORMA
FINANCIAL DATA" and "FINANCIAL STATEMENTS OF WEST SIDE."
<TABLE>
BOATMEN'S BANCSHARES, INC.<F1>
SELECTED FINANCIAL DATA
(UNAUDITED)
<CAPTION>
Nine Months Ended September 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)
<S> <C> <C> <C> <C> <C> <C> <C>
Summarized Income Statement:
- ---------------------------
Net Interest Income . . . . . . . . . $763,752 $727,847 $981,580 $877,716 $742,532 $655,801 $629,603
Provision for Loan Losses . . . . . . 19,906 48,331 60,184 136,626 114,658 119,448 93,248
Noninterest Income. . . . . . . . . . 390,535 366,389 493,251 452,082 355,704 297,002 276,899
Noninterest Expense . . . . . . . . . 732,282 696,620 950,421 871,928 752,367 651,962 605,426
Income Tax Expense. . . . . . . . . . 138,775 108,988 146,807 92,518 60,013 36,363 43,695
Net Income. . . . . . . . . . . . . . 263,324 240,297 317,419 228,726 171,198 145,030 164,133
Per Common Share Data<F2>:
- -------------------------
Net Income. . . . . . . . . . . . . . $2.52 $2.32 $3.07 $2.29 $1.77 $1.58 $1.81
Cash Dividends Paid . . . . . . . . . 0.93 0.84 1.15 1.09 1.07 1.06 1.02
Stockholders' Equity
(period end). . . . . . . . . . . . 21.06 19.66 20.49 18.20 16.94 15.84 15.42
Financial Position at Period End:
- --------------------------------
Loans, Net of Unearned Income $16,105 $14,600 $14,826 $13,111 $12,316 $11,924 $11,593
Total Assets. . . . . . . . . . . . . 28,292 26,169 26,654 24,281 23,003 22,795 19,541
Deposits. . . . . . . . . . . . . . . 20,484 20,533 20,909 19,685 18,060 18,119 14,964
Long-Term Debt. . . . . . . . . . . . 515 471 486 393 316 285 295
Stockholders' Equity. . . . . . . . . 2,207 2,041 2,133 1,861 1,680 1,463 1,396
Selected Financial Ratios:
- -------------------------
Return on Average Assets. . . . . . . 1.29% 1.30% 1.27% 0.99% 0.79% 0.73% 0.86%
Return on Average Common
Equity<F3>. . . . . . . . . . . . . 16.19 16.37 15.99 12.95 10.78 10.13 12.06
Net Interest Margin . . . . . . . . . 4.33 4.57 4.56 4.40 4.05 3.96 4.03
Nonperforming Assets as % of
Total Loans and Foreclosed
Property<F4>. . . . . . . . . . . . 1.58 2.12 1.90 2.92 3.92 3.93 3.38
Nonperforming Loans as % of Total
Loans . . . . . . . . . . . . . . . 0.96 1.28 1.17 1.96 2.54 3.18 2.67
Loan Reserve as % of Net Loans 2.16 2.34 2.30 2.30 2.05 1.92 1.71
Net Charge-Offs as % of Average
Loans . . . . . . . . . . . . . . . 0.13 0.21 0.24 0.80 0.84 0.76 1.00
Equity to Assets. . . . . . . . . . . 7.80 7.80 8.00 7.67 7.30 6.42 7.14
Tangible Equity to Assets<F5> 6.94 6.78 7.04 6.88 6.56 5.73 6.46
Tier 1 Risk-Based Capital<F6> 10.54 10.51 10.67 10.39 10.10 --- ---
Total Risk-Based Capital<F6>. . . . . 14.03 14.36 14.42 13.75 13.17 --- ---
<FN>
- ---------------------------
<F1> The information set forth in this table does not give effect to the
pending acquisitions of other financial institutions.
See "THE PARTIES -- Boatmen's -- Pending Acquisitions."
<F2> Reflects restatement of share amounts for the 1993 Stock Split.
<F3> Based on net income available to common shareholders.
<F4> Nonperforming assets include nonaccrual loans, restructured loans,
loans past due 90 days or more and foreclosed property.
<F5> Tangible equity to assets is defined as total equity less all
intangibles as a percentage of total tangible assets.
<F6> Calculated using final 1992 risk-based guidelines.
</TABLE>
12
<PAGE> 19
<TABLE>
WEST SIDE BANCSHARES, INC.
SELECTED FINANCIAL DATA
(UNAUDITED)
<CAPTION>
Nine Months Ended September 30, Year Ended December 31,
------------------------------- ---------------------------------------------------------
1994 1993 1993 1992 1991 1990 1989
---- ---- ---- ---- ---- ---- ----
(income statement and balance sheet amounts in thousands except per share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Summarized Income Statement:
- ---------------------------
Net Interest Income . . . . . . . . $4,431 $4,262 $5,653 $5,556 $4,615 $4,182 $3,958
Provision for Loan Losses . . . . . --- 60 60 497 530 778 605
Noninterest Income. . . . . . . . . 1,492 1,504 2,105 1,547 1,043 919 1,050
Noninterest Expense . . . . . . . . 3,335 3,116 4,387 4,125 3,678 3,265 3,425
Income Tax Expense. . . . . . . . . 882 937 1,072 679 418 220 134
Net Income<F1>. . . . . . . . . . . 1,706 1,653 2,239 1,802 1,032 838 844
Per Common Share Data:
- ---------------------
Net Income<F1>. . . . . . . . . . . $ 5.66 $ 5.63 $ 7.42 $ 6.14 $ 3.52 $ 2.86 $ 2.88
Cash Dividends Paid . . . . . . . . 1.00 0.49 0.49 --- --- --- ---
Stockholders' Equity (period end): 38.22 35.12 36.01 30.60 24.31 20.80 17.94
Financial Position at Period End:
- --------------------------------
Loans, Net of Unearned Income $ 71,554 $ 77,851 $ 69,734 $ 68,828 $ 66,477 $ 60,647 $ 65,409
Total Assets. . . . . . . . . . . . 142,108 142,866 139,572 126,267 124,092 112,202 105,283
Deposits. . . . . . . . . . . . . . 129,610 123,080 127,651 115,655 113,824 102,323 96,077
Long-Term Debt. . . . . . . . . . . --- 500 500 1,000 1,750 2,250 2,750
Stockholders' Equity. . . . . . . . 11,535 10,311 10,869 8,978 7,134 6,103 5,265
Selected Financial Ratios:
- -------------------------
Return on Average Assets. . . . . . 1.60% 1.64% 1.69% 1.44% 0.88% 0.77% 0.83%
Return on Average Equity. . . . . . 20.31 22.83 22.58 22.37 15.59 14.75 17.44
Net Interest Margin . . . . . . . . 4.53 4.58 4.47 4.89 4.39 4.32 4.31
Nonperforming Assets as % of
Total Loans and Foreclosed
Property<F2>. . . . . . . . . . . 0.68 1.63 1.16 2.72 3.86 5.11 4.01
Nonperforming Loans as % of
Total Loans . . . . . . . . . . . 0.42 0.88 0.88 1.61 2.18 2.80 2.66
Loan Reserve as % of Net Loans 1.66 1.74 1.80 1.99 1.61 1.60 1.49
Net Charge-Offs as % of Average
Loans . . . . . . . . . . . . . . 0.10 0.10 0.21 0.31 0.69 1.25 0.95
Equity to Assets. . . . . . . . . . 8.12 7.22 7.79 7.11 5.75 5.44 5.00
Tangible Equity to Assets<F3> . . . 8.12 7.22 7.79 7.11 5.75 5.44 5.00
Tier 1 Risk-Based Capital<F4> . . . 11.31 9.17 10.43 9.40 --- --- ---
Total Risk-Based Capital<F4>. . . . 12.41 10.31 11.60 10.65 --- --- ---
<FN>
- ---------------------------
<F1> Net income is shown before cumulative effect of change in accounting
principle.
<F2> Nonperforming assets include nonaccrual loans, restructured loans,
loans past due 90 days or more and foreclosed property.
<F3> Tangible equity to assets is defined as total equity less all
intangibles as a percentage of total tangible assets.
<F4> Calculated using final 1992 risk-based guidelines.
</TABLE>
13
<PAGE> 20
<TABLE>
BOATMEN'S BANCSHARES, INC.
AND
WEST SIDE BANCSHARES, INC.
PRO FORMA COMBINED SELECTED FINANCIAL DATA<F1>
(UNAUDITED)
<CAPTION>
Nine Months Ended September 30, Year Ended
------------------------------- ----------
1994 1993 December 31, 1993
---- ---- -----------------
(income statement amounts in thousands except per share
data and balance sheet amounts in millions)
<S> <C> <C> <C>
Summarized Income Statement:
- ---------------------------
Net Interest Income . . . . . . . . . . . . $874,128 $830,345 $1,120,051
Provision for Loan Losses . . . . . . . . . 20,956 52,170 64,872
Noninterest Income. . . . . . . . . . . . . 442,611 419,372 561,947
Noninterest Expense . . . . . . . . . . . . 835,755 811,773 1,102,415
Income Tax Expense. . . . . . . . . . . . . 159,756 121,287 163,315
Net Income<F2>. . . . . . . . . . . . . . . 300,272 264,487 351,396
Per Common Share Data<F2><F3>:
- ---------------------
Net Income. . . . . . . . . . . . . . . . . $2.47 $2.20 $2.92
Cash Dividends Paid . . . . . . . . . . . . 0.93 0.84 1.15
Stockholders' Equity (period end) 20.54 19.11 19.90
Financial Position at Period End:
- --------------------------------
Loans, Net of Unearned Income . . . . . . . $18,076 $16,290 $16,543
Total Assets. . . . . . . . . . . . . . . . 31,946 29,929 30,362
Deposits. . . . . . . . . . . . . . . . . . 23,575 23,736 24,080
Long-Term Debt. . . . . . . . . . . . . . . 558 515 531
Stockholders' Equity. . . . . . . . . . . . 2,509 2,309 2,410
Selected Financial Ratios:
- -------------------------
Return on Average Assets. . . . . . . . . . 1.30% 1.25% 1.23%
Return on Average Common
Equity<F4>. . . . . . . . . . . . . . . . 16.29 15.95 15.66
Net Interest Margin . . . . . . . . . . . . 4.35 4.52 4.52
Nonperforming Assets as % of
Total Loans and Foreclosed
Property<F5>. . . . . . . . . . . . . . . 1.49 2.07 1.85
Nonperforming Loans as % of
Total Loans . . . . . . . . . . . . . . . 0.92 1.27 1.17
Loan Reserve as % of Net Loans. . . . . . . 2.11 2.31 2.27
Net Charge-Offs as % of Average
Loans . . . . . . . . . . . . . . . . . . 0.12 0.19 0.23
Equity to Assets. . . . . . . . . . . . . . 7.85 7.71 7.94
Tangible Equity to Assets<F6> . . . . . . . 7.00 6.72 6.99
Tier 1 Risk-Based Capital<F7> . . . . . . . 10.75 10.60 10.81
Total Risk-Based Capital<F7>. . . . . . . . 14.00 14.18 14.28
<FN>
<F1> The information set forth in this table gives effect to the
pending acquisition of Worthen, which was announced on August 18,
1994. See "PRO FORMA FINANCIAL DATA."
<F2> Net income includes $868 thousand for the nine months ended
September 30, 1993 and year ended December 31, 1993, for the
cumulative effect of FAS No. 109 adoption at Worthen. Net income
includes $104 thousand for the nine months ended September 30,
1993 and year ended December 31, 1993, for the cumulative effect
of FAS No. 109 adoption at West Side. Net income also includes
amortization of goodwill which would result from the acquisition
of West Side as if the goodwill existed as of the earliest period
presented. Goodwill will approximate $6.1 million to be
amortized over 15 years.
<F3> Reflects restatement of share amounts for the 1993 Stock Split.
<F4> Based on net income available to common shareholders.
<F5> Nonperforming assets include nonaccrual loans, restructured
loans, loans past due 90 days or more and foreclosed property.
<F6> Tangible equity to assets is defined as total equity less all
intangibles as a percentage of total tangible assets.
<F7> Calculated using final 1992 risk-based guidelines.
</TABLE>
14
<PAGE> 21
THE SPECIAL MEETING
DATE, TIME AND PLACE OF SPECIAL MEETING
This Proxy Statement/Prospectus is being furnished to shareholders of
West Side Bancshares, Inc., a Texas corporation ("West Side"), in
connection with the solicitation of proxies by the Board of Directors of
West Side for use at the special meeting of shareholders to be held at the
offices of Bank of the West, 2909 Sherwood Way, San Angelo, Texas 76901 on
March 24, 1995, at 3:00 p.m., local time (the "Special Meeting").
MATTERS TO BE CONSIDERED AT THE SPECIAL MEETING
At the Special Meeting, the holders of common stock, par value $1.00
per share, of West Side ("West Side Common") will be asked to approve the
Agreement and Plan of Merger, dated November 14, 1994 (the "Merger
Agreement"), by and among West Side, 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"),
providing for, among other matters, the merger of West Side with and into
Boatmen's-Texas. In addition, the holders of West Side Common may be asked
to vote on a proposal to adjourn or postpone the Special Meeting which
adjournment or postponement could be used for the purpose, among others,
of allowing time for the solicitation of additional votes to approve the
Merger Agreement.
RECORD DATE FOR SPECIAL MEETING
The Board of Directors of West Side has fixed the close of business
on February 10, 1995, as the record date for the determination of holders
of shares of West Side Common to receive notice of and to vote at the
Special Meeting. On the record date, there were 312,637 shares of West
Side Common outstanding. Only holders of shares of West Side Common of
record on the record date are entitled to vote at the Special Meeting. No
shares of West Side Common can be voted at the Special Meeting unless the
record holder is present in person or represented by proxy at the Special
Meeting.
VOTE REQUIRED TO APPROVE THE MERGER AGREEMENT
The affirmative vote of two-thirds (2/3) of the outstanding shares of
West Side Common entitled to vote thereon is required to approve the Merger
Agreement. Each holder of West Side Common is entitled to one vote per
share of West Side Common. As of the record date, the directors and
executive officers of West Side and their affiliates have the power to vote
208,157 shares of West Side Common, or approximately sixty-seven percent
(67%) of the shares outstanding, all of which are expected by management
to be voted in favor of the Merger Agreement. For information regarding
the shares of West Side Common beneficially owned, directly or indirectly,
by certain shareholders, by each director and executive officer of West
Side, and by all directors and officers of West Side as a group, see
"INFORMATION ABOUT WEST SIDE -- Security Ownership of Certain Beneficial
Owners and Management of West Side." As of the record date, directors and
executive officers of Boatmen's did not own beneficially any shares of West
Side Common.
15
<PAGE> 22
VOTING AND REVOCATION OF PROXIES FOR SPECIAL MEETING
Proxies for use at the Special Meeting accompany this Proxy Statement/
Prospectus. A shareholder may use his or her proxy if he or she is unable
to attend the Special Meeting in person or wishes to have his or her shares
voted by proxy even if he or she does attend the Special Meeting. Shares
of West Side Common represented by a proxy properly signed and returned to
West Side at, or prior to, the Special Meeting, unless subsequently
revoked, will be voted at the 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 West Side
Common represented by such proxy will be voted FOR the Merger Agreement and
FOR any proposal regarding adjournment or postponement, if such a proposal
is made. Any proxy given pursuant to this solicitation may be revoked by
the grantor at any time prior to the voting thereof on the Merger Agreement
by filing with the Secretary of West Side a written revocation or a duly
executed proxy bearing a later date. A holder of West Side Common may
withdraw his or her proxy at the Special Meeting at any time before it is
exercised by electing to vote in person; however, attendance at the Special
Meeting will not in and of itself constitute a revocation of the proxy.
SOLICITATION OF PROXIES FOR THE SPECIAL MEETING
In addition to solicitation of proxies from shareholders of West Side
Common by use of the mail, proxies also may be solicited by personal
interview, telephone and wire by directors, officers and employees of West
Side, who will not be specifically compensated for such services. Except
as set forth below, all costs of soliciting proxies, assembling and mailing
the Proxy Statement/Prospectus and all papers which now accompany or
hereafter may supplement the same will be borne by West Side.
EXPENSES FOR PREPARATION OF PROXY STATEMENT/PROSPECTUS
Boatmen's and West Side have agreed to share in the expense of
preparing this Proxy Statement/Prospectus, and Boatmen's will bear the
entire cost of printing this Proxy Statement/Prospectus and all Securities
and Exchange Commission ("S.E.C.") and other regulatory filing fees
incurred in connection therewith.
MAILING DATE OF PROXY STATEMENT/PROSPECTUS
This Proxy Statement/Prospectus, the attached notice of Special
Meeting and the enclosed proxy card are first being sent to shareholders
of West Side on or about February 13, 1995 (the "Mailing Date").
THE PARTIES
BOATMEN'S
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 45 subsidiary banks, including
16
<PAGE> 23
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 September 30,
1994, Boatmen's had consolidated assets of approximately $28.3 billion
and total shareholders' equity of approximately $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 $35.5 billion at September 30, 1994. The trust operations,
with revenues in 1993 of $152.2 million, provide Boatmen's with a
significant source of noninterest income.
For information regarding the impact of the increasing interest rate
environment on Boatmen's off-balance sheet financial instruments, see "PRO
FORMA FINANCIAL DATA."
PENDING ACQUISITIONS
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 ("Worthen"), 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 (6) such 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 September 30,
1994, Worthen had consolidated assets of approximately $3.5 billion,
deposits of approximately $3.0 billion and loans of approximately $1.9
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 the common stock, $1.00 par value per share, of
Boatmen's and any attached rights ("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 subject to stock options). The shares of Boatmen's Common to be
issued in connection with the acquisition of Worthen would constitute
approximately 15.7 percent of the total number of shares of Boatmen's
Common outstanding as of the date hereof. 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. All requisite regulatory
approvals of Boatmen's acquisition of Worthen have been received. There
can be no assurance that the acquisition of Worthen will be consummated.
Consummation of the Merger is not 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 Bancorp, 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 Bank of South Central
Illinois. At September 30, 1994, Salem had consolidated assets of
approximately $79.2 million and shareholder's equity of approximately
17
<PAGE> 24
$4.5 million. Under the terms of the Agreement, Boatmen's would
exchange approximately 290,000 shares of Boatmen's Common for all of
the stock of Salem, which represents less than one percent (1%) of the
total number of share of Boatmen's Common outstanding as of the date
hereof, and pay approximately $700,000 in cash for certain minority
ownership interests in Community State Bank. The Salem acquisition,
which is subject to, among other things, approval by Salem's shareholders,
is expected to be completed in the first quarter of 1995. There can be no
assurance that the transaction will be consummated. Consummation of the
Merger is not conditioned upon consummation of the Salem acquisition.
First National Bank in Pampa. On November 15, 1994, Boatmen's
----------------------------
announced the execution of an Agreement and Plan of Merger, dated
November 14, 1994, to acquire, in exchange for shares of Boatmen's Common,
all of the issued and outstanding shares of capital stock of First National
Bank in Pampa ("Pampa"), a national banking association located in Pampa,
Texas. At September 30, 1994, Pampa had assets of approximately
$168 million and shareholders' equity of approximately $30 million. Under
the terms of the Agreement, Pampa would be merged with and into Boatmen's
First National Bank of Amarillo, a wholly-owned subsidiary of Boatmen's-
Texas ("Boatmen's-Amarillo"). Boatmen's would exchange approximately
1.35 million shares of Boatmen's Common for all of the stock of Pampa,
which represents less than two percent (2%) of the total number of shares
of Boatmen's Common outstanding as of the date hereof. The Pampa
acquisition, which is subject to, among other things, regulatory approval
and approval by Pampa's shareholders, is expected to be completed in the
second quarter of 1995. There can be no assurance that the transaction
will be consummated. Consummation of the Merger is not conditioned upon
consummation of the Pampa acquisition.
BOATMEN'S-TEXAS
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 September
30, 1994, Boatmen's-Texas had consolidated assets of approximately
$1.1 billion and shareholders' equity of approximately $78 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).
WEST SIDE
West Side, a Texas corporation, is a bank holding company
headquartered in San Angelo, Texas. West Side's wholly-owned subsidiary,
Westside Delaware, owns 100 percent of the outstanding capital stock of
Bank of the West. The businesses of West Side and Westside Delaware
consist primarily of the ownership, supervision and control of Bank of the
West, a commercial bank offering complete banking services to the
commercial, agricultural and residential areas which it serves. At
September 30, 1994, West Side had consolidated assets of approximately
$142 million and shareholders' equity of approximately $11.5 million. The
principal executive offices of West Side and Bank of the West are at 2909
Sherwood Way, San Angelo, Texas 76901 (telephone number (915) 947-2700).
18
<PAGE> 25
THE MERGER
BACKGROUND OF THE MERGER
The directors and principal stockholders of West Side have
consistently regarded their stock ownership as a long-term investment and,
therefore, historically have never sought or invited acquisition proposals.
More recently, however, in recognition of the fact that bank merger
and acquisition activity in Texas appeared to be increasing, the directors
and principal stockholders of West Side informally determined that
prospective cash offers would not be considered unless the amount of after-
tax proceeds from any such sale to be received by the stockholders could
be conservatively invested to both generate income equivalent to that
represented by West Side's historical dividends and provide the prospect
of further capital appreciation. It was further informally determined that
any stock-for-stock, tax-free acquisition proposal would be evaluated based
upon the current financial condition and future business prospects of the
potential acquiror, the current dividend being paid on the stock of the
acquiror, and whether the market value of the stock proposed to be offered
in exchange for West Side Common adequately reflected what the directors
and principal stockholders of West Side believed to be the intrinsic value
of West Side and Bank of the West.
The Board of Directors of West Side retained the professional services
of banking industry specialist Alex Sheshunoff and Company as consultants
in strategic planning activities to, among other things, assist in
considering and evaluating possible business combination opportunities.
As a result of these activities, Alex Sheshunoff and Company sought proposals
for a possible business combination from a select group of financial
institutions. Preliminary discussions were held with two potential acquirors,
including Boatmen's. Discussions with the other financial institution were
informal in nature, no firm offer was presented or discussed with the Board
of West Side, and no due diligence was conducted. Negotiations with Boatmen's
began in June 1994 and culminated in the Board's decision to authorize the
signing of definitive merger agreement on November 14, 1994.
REASONS FOR THE MERGER
The Board of Directors of West Side has determined that the Merger and
the Merger Agreement, including the Merger Consideration (as defined
herein), are fair to, and in the best interests of, West Side, Bank of the
West and their shareholders. In the course of reaching its determination,
the Board of Directors consulted with its legal counsel with respect to the
Merger Agreement and the legal duties of the Board, and issues related
thereto, as well as with senior management. Without assigning any relative
or specific weights, the Board of Directors considered a number of factors,
including the following material considerations:
a. West Side's business, results of operations, financial position
and prospects were it to remain independent;
b. Economic conditions and prospects for the markets in which Bank
of the West operates in light of, among other things,
intensifying competitive pressures in the financial services
industry in general and, in particular, the San Angelo, Texas
area;
19
<PAGE> 26
c. The consideration offered by Boatmen's in the Merger Agreement to
West Side's shareholders, the prospect for a higher current
trading value for their shares and better prospects for future
growth than if West Side were to remain independent, and the
greater market liquidity with respect to Boatmen's and other
potential shares than exists for West Side Common;
d. The management, business, results of operations and financial
condition and prospects of Boatmen's;
e. The expectation that a business combination with a larger and
more geographically diversified regional bank holding company
would enhance Bank of the West's competitiveness and ability to
serve its customers and the community in which it operates;
f. The historical dividends paid on West Side Common and Boatmen's
Common, and the increase in dividends which would result to West
Side shareholders from the Merger; and
g. The expectation that the Merger will be a tax-free transaction to
West Side shareholders, West Side and Boatmen's.
The Board of Directors of West Side believes that a business combination
with a larger financial institution and more geographically diversified
regional bank holding company would, in addition to providing significant
shareholder value to all shareholders, enable Bank of the West to compete
more effectively in its market area and participate in the expanded
opportunities for growth that the Merger and the Subsidiary Bank Merger
will make possible. Accordingly, the Board unanimously recommends that
shareholders of West Side vote for approval and adoption of the Merger
Agreement.
Certain members of the management and Board of Directors of West Side
have interests in the Merger that are in addition to the interests of
shareholders generally. See "THE MERGER -- Interests of Certain Persons
in the Merger."
The Board of Directors of Boatmen's believes that the acquisition of
West Side and the merger of its banking subsidiary, Bank of the West, into
Boatmen's-Amarillo, would be a natural and desirable addition to Boatmen's
banking franchise in Texas.
RECOMMENDATION OF THE BOARDS OF DIRECTORS
FOR THE REASONS SET FORTH ABOVE, THE BOARD OF DIRECTORS OF WEST SIDE
UNANIMOUSLY RECOMMENDS THAT THE HOLDERS OF WEST SIDE COMMON VOTE "FOR"
APPROVAL AND ADOPTION OF THE MERGER AGREEMENT.
MERGER CONSIDERATION
The Merger Agreement provides that each share of West Side Common,
other than shares held by any shareholder properly exercising dissenters'
rights under the Texas Business Corporation Act (the "Texas Law"), will
be converted, at the effective time of the Merger (the "Effective Time"),
into the right to receive 1.8472 shares of Boatmen's Common, including 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
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(see "COMPARISON OF SHAREHOLDER RIGHTS -- Shareholder Rights Plan"),
plus cash in lieu of fractional shares, as described herein (the "Merger
Consideration"). The Merger Consideration was determined through
negotiations, taking into account the relative value of Boatmen's Common
and West Side Common, between Boatmen's and West Side.
No fractional shares of Boatmen's Common will be issued. In the event
a holder of shares of West Side 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 closing price of a share
of Boatmen's Common on the Nasdaq Stock Market's National Market ("Nasdaq")
on the business day immediately preceding the date on which the Merger is
consummated.
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 prior to the Effective Time (a "Share
Adjustment"), then the number of shares of Boatmen's Common into which a
share of West Side Common would be converted pursuant to the Merger
Agreement will be appropriately and proportionately adjusted so that each
shareholder of West Side 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.
FORM OF THE MERGER
The Merger Agreement provides that West Side will merge into
Boatmen's-Texas, which is a wholly-owned subsidiary of Boatmen's, and
Boatmen's-Texas will be the surviving corporation in the Merger.
CONDUCT OF BUSINESS PENDING THE MERGER; DIVIDENDS
Pursuant to the Merger Agreement, West Side 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 Merger Agreement.
The Merger Agreement provides that West Side may not declare or pay a
dividend on the West Side Common or make any other distribution to
shareholders, whether in cash, stock or other property, after the date of
the Merger Agreement, except for the payment of its regular annual dividend
in the amount of $1.00 per share in January, 1995, which such dividend has
been declared and paid.
CONDITIONS TO CONSUMMATION OF THE MERGER
The Merger is subject to various conditions. Specifically, the
obligations of each party to effect the Merger are subject to the
fulfillment or waiver by each of the parties, at or prior to the date on
which the Merger is consummated (the "Closing Date") of the following
conditions: (i) the representations and warranties of the respective
parties to the Merger Agreement as set forth therein will be true and
correct in all material respects on the date thereof and as of the Closing
Date; (ii) each of the respective parties to the 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 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 Merger; (iv) all necessary regulatory
approvals and consents required to consummate the Merger, including the
approval of the shareholders of West Side, will have been obtained
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<PAGE> 28
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 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. or any securities agency; (vii)
Boatmen's will have received an opinion of Lewis, Rice & Fingersh, L.C.,
counsel to Boatmen's, to the effect that (a) the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Internal Revenue
Code of 1986, as amended (the "Code"), (b) no gain or loss will be
recognized by the holders of West Side Common upon receipt of the 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 West Side will be the same as the basis of shares of West Side Common
exchanged therefor, and (d) the holding period of the shares of Boatmen's
Common received by the shareholders of West Side will include the holding
period of the shares of West Side Common exchanged therefor, provided such
shares were held as capital assets as of the Effective Time; (viii) the
merger of Westside Delaware with and into West Side shall have been
consummated prior to the Closing Date; and (ix) the merger of Bank of the
West with and into Boatmen's-Amarillo (the "Subsidiary Bank Merger") shall
have been consummated on the Closing Date.
REGULATORY APPROVALS
The 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. Acquisitions subject to Federal Reserve approval
under the Bank Holding Company Act of 1956, such as the Merger, may not be
consummated until thirty (30) days after the date of the approval by the
Federal Reserve, during which period the United States Department of
Justice may in its discretion challenge the transaction under the antitrust
laws. If, however, the Federal Reserve has not received any adverse
comments from the United States Department of Justice relating to the
competitive aspects of the transaction and the Department of Justice has
consented to a shorter waiting period, then the Merger may be consummated
after the fifteenth (15th) day following the date of the approval by the
Federal Reserve. Application for the required regulatory approval from the
Federal Reserve has been filed and is pending. An application will be
filed with the Texas Department of Banking following acceptance of the
Federal Reserve application. In addition, an application has been filed
with the Office of the Comptroller of the Currency for approval of the
Subsidiary Bank Merger and is pending.
TERMINATION OR ABANDONMENT
The Merger Agreement may be terminated at any time prior to the
Effective Time: (i) by either party if the Merger is not consummated on
or prior to November 14, 1995; (ii) by mutual agreement of Boatmen's and
West Side; (iii) by Boatmen's or West Side in the event of a material
breach by the other of any of its representations and warranties or
agreements under the Merger Agreement not cured within thirty (30) 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 West Side or Bank of the West 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 Merger Agreement; (vi) by Boatmen's
if certain reports of environmental inspection on the real properties of
West Side to be obtained pursuant to the Merger Agreement should disclose
any contamination or presence of hazardous wastes, the estimated clean up
or other remedial cost of which exceeds $100,000,
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<PAGE> 29
as reasonably estimated by an environmental expert retained for such
purpose by Boatmen's and reasonably acceptable to West Side, or if the
cost of such actions and measures cannot be so reasonably estimated by
such expert with any reasonable degree of certainty; provided, however,
that Boatmen's must exercise such termination right within fifteen (15)
business days following receipt of such estimate or indication that the
cost of such actions and measures cannot be so reasonably estimated, and
provided further that termination of the Merger Agreement shall be
Boatmen's sole remedy in such event; (vii) by either party if any
regulatory application filed in connection with the Merger or the
Subsidiary Bank Merger should be finally denied or disapproved by the
applicable regulatory authority; and (viii) by either party, should the
shareholders of West Side not approve the Merger.
PAYMENT UPON OCCURRENCE OF CERTAIN TRIGGERING EVENTS
The Merger Agreement provides that upon the occurrence of one or more
Triggering Events (defined below), West Side shall pay to Boatmen's the sum
of $500,000.
As used in the Merger Agreement, the term "Triggering Event" means any
of the following events: (i) termination of the Merger Agreement by
Boatmen's upon a breach thereof by West Side, provided that within eighteen
(18) months of the date of such termination, either an event described in
clause (iii) or (iv) of this sentence shall have occurred; (ii) the failure
of West Side's shareholders to approve the Merger and the Merger Agreement
at the Special Meeting; provided, however, that the failure of West Side
shareholders to approve the Merger and the 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 Nasdaq during the period of
twenty (20) trading days ending on the second trading day immediately
preceding the Mailing Date (the "Boatmen's Final Price"), is less than
$28.00, 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)
acquires, or has the right to acquire, thirty-four percent (34%) or more
of the outstanding shares of West Side Common (exclusive of any shares of
West Side Common sold directly or indirectly to such person or group of
persons by Boatmen's); or (iv) upon the entry by West Side or Bank of the
West 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 West Side or Bank
of the West or to purchase or acquire West Side or all or substantially all
of West Side's or Bank of the West's assets.
As used in the Merger Agreement, (a) "Index Group" means all of the
bank holding companies listed on Exhibit 7.09 to the 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
(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 which would constitute a "significant subsidiary" of such
company (as such term is defined under applicable S.E.C. regulations) in
exchange for its stock; (b) "Boatmen's Initial Price" means the closing
price of a share of Boatmen's Common as reported on Nasdaq on November 14,
1994; (c) "Initial Index Price" means the weighted average (weighted in
accordance with the factors specified on Exhibit 7.09 to the 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 November 14, 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
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period of twenty (20) 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 Merger Agreement) of the Final Prices for
all of the companies comprising the Index Group.
DISSENTERS' RIGHTS
The rights of West Side shareholders who choose to dissent from the
Merger are governed by provisions of the Texas Law. An excerpt of the
Texas Law (Sections 5.11-5.13) is attached as Appendix B to the 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 ten (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 ten (10) days after the surviving corporation
mails or delivers notice to shareholders who have not voted in favor of the
merger and who have filed objections, 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, a copy of which is attached to the Proxy Statement/Prospectus
as Appendix B. 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 twenty (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 copy of which is attached to the Proxy Statement/
Prospectus as Appendix B.
A shareholder who votes for the merger, or does not file a written
---
objection stating an intent to assert dissenters' rights prior to the
shareholder's meeting at which the merger is voted upon, or does not demand
payment within ten (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 twenty (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 sixty (60) days after the
merger, the surviving corporation must pay that value for the shares within
ninety (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
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jurisdiction in the appropriate Texas State 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 grounds that 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 West Side Common are not listed and
traded on a national securities exchange. In addition, West Side has
substantially fewer than 2,000 record shareholders (230 as of the record
date for the Special Meeting).
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 shareholders of West
Side, and is qualified by reference to the excerpts of the Texas Law which
have been set forth in full as Appendix B to this 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 OF WEST SIDE LOSING ANY RIGHT HE OR SHE MAY
HAVE TO DISSENT FROM THE MERGER AND CLAIM FAIR VALUE FOR HIS OR HER SHARES
OF WEST SIDE COMMON.
EXCHANGE OF WEST SIDE STOCK CERTIFICATES; FRACTIONAL SHARES
The conversion of West Side 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 West Side Common (such
certificates, other than certificates held by shareholders exercising their
dissenters' rights, being collectively referred to herein as the "West Side
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, Boatmen's
Trust Company (the "Exchange Agent") will mail a transmittal letter and
instructions to each record holder of a West Side Certificate whose shares
were converted into the right to receive the Merger Consideration, advising
such holder of the number of shares of Boatmen's Common such holder is
entitled to receive pursuant to the Merger, of the amount of cash such
holder is due in lieu of a fractional share of Boatmen's Common, and
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of the procedures for surrendering such West Side 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 West Side
Certificates will pass, only upon proper delivery of the West Side
Certificates to the Exchange Agent and will be in such form and have such
other provisions as Boatmen's may reasonably specify. SHAREHOLDERS OF WEST
SIDE ARE REQUESTED NOT TO SURRENDER THEIR WEST SIDE CERTIFICATES FOR
EXCHANGE UNTIL SUCH LETTER OF TRANSMITTAL AND INSTRUCTIONS ARE RECEIVED.
The shares of Boatmen's Common into which West Side Common will be
converted in the Merger will be deemed to have been issued at the Effective
Time. Unless and until the West Side 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
West Side Common, which would otherwise be payable, will not be paid to the
holders of such West Side Certificates and, in such case, upon surrender
of the West Side 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 WEST SIDE, BOATMEN'S AND BOATMEN'S-TEXAS
The Merger Agreement contains various representations and warranties
of the parties thereto. These include, among other things, representations
and warranties by West Side, except as otherwise disclosed to Boatmen's,
as to: (i) its organization and good standing; (ii) its capitalization;
(iii) the due authorization and execution of the Merger Agreement by West
Side; (iv) the identity and ownership of Westside Delaware as its wholly-
owned subsidiary, and Bank of the West as a wholly-owned subsidiary of
Westside Delaware; (v) the accuracy of the financial statements of West
Side and its subsidiaries and of Bank of the West'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 West Side and its subsidiaries; (vii) the absence of certain
orders, agreements or memoranda of understanding between West Side or its
subsidiaries 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 Merger; and (xix) the
accuracy of information supplied by West Side in connection with the
Registration Statement, this 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 Merger
Agreement.
Boatmen's and Boatmen's-Texas' representations and warranties include,
among other things, those as to (i) their organization and good standing;
(ii) their capitalization; (iii) the due authorization and execution of the
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 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
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regulations; and (x) the accuracy of information supplied by Boatmen's and
Boatmen's-Texas in connection with the Registration Statement, this 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 Merger Agreement.
CERTAIN OTHER AGREEMENTS
Business of West Side in Ordinary Course. Pursuant to the Merger
----------------------------------------
Agreement, West Side has agreed, among other things, that it will conduct
its business and the business of Bank of the West 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 West Side Common or other capital stock, options,
warrants or other rights to subscribe for or purchase West Side Common, or
any other capital stock or any other securities convertible into or
exchangeable for any capital stock of West Side or its subsidiaries;
(ii) directly or indirectly redeem, purchase or otherwise acquire West Side
Common or any other capital stock of West Side or its subsidiaries;
(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) 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 or agree to borrow any 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
$1,000,000, or that would increase the aggregate credit outstanding to any
one borrower or group of affiliated borrowers to more than $1,000,000;
(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 West Side 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; (xvi) violate any law, statute, rule, governmental
regulation or order which will materially adversely affect the business,
financial condition or earnings of West Side and its subsidiaries;
(xvii) purchase any real or personal property or make any capital
expenditure in excess of $250,000; or (xviii) engage in any transaction or
take any action that would render untrue, in any material respect, any of
the representations and warranties made by West Side in the Merger
Agreement, if such representations or warranties were given as of the date
of such transaction or action.
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Additional West Side Reserves, Accruals, Charges, and Expenses. The
--------------------------------------------------------------
Merger Agreement acknowledges that while West Side 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 Merger Agreement
provides that Boatmen's and West Side will consult and cooperate with each
other prior to the Effective Time (i) to conform West Side's loan, accrual
and reserve policies to those of Boatmen's; (ii) to determine appropriate
accruals, reserves, and charges for West Side 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 Merger; and (iii) to determine
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 Merger. West Side 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
West Side, provided, however, that West Side is not required to take any
action which is inconsistent with generally accepted accounting principles.
Environmental Inspections. West Side has agreed to provide Boatmen's,
-------------------------
not later than 45 days after the date of the Merger Agreement, a report of
a phase one environmental investigation on certain real property owned or
leased by West Side or Bank of the West (which does not include leased
space in retail and similar establishments where the space leased comprises
less than 15% of the total space leased to all tenants of such property and
space leased for automatic teller machines) and, if required by the 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 West Side Agreements. In addition, West Side 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 West Side's representations or agreements in
the Merger Agreement or of the occurrence of any matter or event known to
and directly involving West Side (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 West Side 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 Merger or the Subsidiary
Bank Merger; (iii) use its best efforts to perform and fulfill all
conditions and obligations to be performed or fulfilled under the
Merger Agreement and to effect the Merger; (iv) permit Boatmen's
28
<PAGE> 35
reasonable access to West Side'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 Merger Agreement;
(v) cause Westside Delaware to enter into an agreement to merge with and
into West Side; and (vi) cause Bank of the West 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 Merger Agreement, Boatmen's has
--------------------
agreed, among other things, to (i) file all regulatory applications
required in order to consummate the Merger and the Subsidiary Bank Merger
and to keep West Side reasonably informed as to the status of such
applications and make available to West Side, upon reasonable request by
West Side from time to time, copies of such applications and
supplementally-filed materials; (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 to list on Nasdaq the shares of Boatmen's Common to be
issued in the Merger and any other filing required under the Securities
Exchange Act of 1934 relating to the Merger and related transactions;
(v) promptly notify West Side 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 Merger Agreement;
(vi) use its best efforts to perform and fulfill all conditions and
obligations to be performed or fulfilled under the Merger Agreement and to
effect the Merger; (vii) permit West Side 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
West Side may have a reasonable and legitimate interest in furtherance of
the transactions contemplated in the Merger Agreement; and (viii) cause
Boatmen's-Amarillo to enter into the Subsidiary Merger Agreement with Bank
of the West and take all other actions and cooperate with Bank of the West
in causing the Subsidiary Bank Merger to be effected. In addition, the
Merger Agreement states that Boatmen's shall provide certain employee
benefit plans and programs to the employees of West Side and Bank of the
West who continue their employment after the Effective Time.
NO SOLICITATION
The Merger Agreement provides that, unless and until the Merger
Agreement has been terminated, West Side 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 West Side and Bank of the West. West Side is required to promptly
advise Boatmen's of its receipt of, and the substance of, any such proposal
or inquiry.
WAIVER AND AMENDMENT
Prior to or at the Effective Time, any provision of the Merger
Agreement, including, without limitation, the conditions to consummation
of the 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 Merger Agreement
by the shareholders of West Side at the Special Meeting; provided, however,
that after any such approval, no such amendment or modification shall alter
the amount or change the form of the Merger Consideration or alter or
change any of the terms of the Merger Agreement if such alteration or
change would adversely affect the holders of West Side Common. It is
29
<PAGE> 36
anticipated that a condition to the obligations of West Side and Boatmen's
to consummate the Merger would be waived only in those circumstances where
the Board of Directors of West Side or Boatmen's, as the case may be, deems
such waiver to be in the best interests of such company and its
shareholders.
EXPENSES AND FEES
In the event the Merger Agreement is terminated or the Merger is
abandoned, all costs and expenses incurred in connection with the 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 (i) in the event the 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 part;
and (ii) in certain events, West Side will be required to pay a fee of
$500,000 to Boatmen's. See "THE MERGER -- Payment Upon Occurrence of
Certain Triggering Events."
FEDERAL INCOME TAX CONSEQUENCES
The Merger is expected to qualify as a reorganization 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 West Side Common will recognize no
gain or loss on the receipt of Boatmen's Common in the Merger.
Additionally, their aggregate basis in the shares of Boatmen's Common
received in the Merger, will be the same as their aggregate basis in their
shares of West Side Common converted in the Merger, 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 West Side Common converted in the Merger. 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.
Consummation of the Merger is conditioned upon receipt by Boatmen's
of an opinion of Lewis, Rice & Fingersh, L.C., counsel to Boatmen's, to the
effect that if the Merger is consummated in accordance with the terms set
forth in the Merger Agreement (i) the 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 West Side
Common upon receipt of the Merger Consideration (except for cash received
in lieu of fractional shares); (iii) the basis of shares of Boatmen's
Common received by the shareholders of West Side will be the same as the
basis of shares of West Side 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 West Side
Common exchanged therefor, provided such shares were held as capital assets
as of the Effective Time.
THE FOREGOING IS A GENERAL SUMMARY OF ALL OF THE MATERIAL FEDERAL
INCOME TAX CONSEQUENCES OF THE MERGER TO WEST SIDE SHAREHOLDERS, WITHOUT
REGARD TO THE PARTICULAR FACTS AND CIRCUMSTANCES OF EACH SHAREHOLDER'S TAX
SITUATION AND STATUS. EACH WEST SIDE SHAREHOLDER SHOULD CONSULT HIS OR HER
OWN TAX ADVISOR REGARDING ANY SUCH SPECIFIC TAX SITUATION AND STATUS,
30
<PAGE> 37
INCLUDING THE APPLICATION AND EFFECT OF FEDERAL, STATE, LOCAL AND FOREIGN
LAWS AND THE POSSIBLE EFFECT OF CHANGES IN FEDERAL AND OTHER TAX LAWS.
RESALE OF BOATMEN'S COMMON
The shares of Boatmen's Common issued pursuant to the Merger will be
freely transferable under the Securities Act except for shares issued to
any West Side shareholder who may be deemed to be an "affiliate" of West
Side or Boatmen's for purposes of Rule 145 under the Securities Act. The
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 Merger except in compliance
with the Securities Act. Persons who may be deemed to be affiliates of
West Side generally include individuals who, or entities which, control,
are controlled by or are under common control with West Side and will
include directors and certain officers of West Side and may include
principal shareholders of West Side. This 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 West Side.
INTERESTS OF CERTAIN PERSONS IN THE MERGER
Certain members of management and the Board of Directors of West Side
may be deemed to have interests in the Merger in addition to their
interests as shareholders of West Side generally. For information about
the percentage of West Side Common owned by the directors and executive
officers of West Side, see "INFORMATION ABOUT WEST SIDE -- Security
Ownership of Certain Beneficial Owners and Management of West Side." None
of the directors or executive officers of West Side would own, on a pro
forma basis giving effect to the Merger, more than 1% of the issued and
outstanding shares of Boatmen's Common.
Insurance; Indemnification. The Merger Agreement provides that
--------------------------
Boatmen's will provide the directors and officers of West Side and Bank of
the West, after the 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 (3) years will use its best efforts to continue West
Side'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 West Side. If the aggregate 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 aggregate premium equal to such
maximum amount. The Merger Agreement also provides that for a period of
six (6) years after the Effective Time Boatmen's will cause Boatmen's-
Texas, as the surviving corporation in the Merger, or any successor of
Boatmen's-Texas, to indemnify the present and former directors, officers,
employees and agents of West Side and Bank of the West against any
liability arising out of actions occurring prior to the Effective Time, to
the extent that such indemnification is then permitted under the Texas Law
and by West Side's Articles of Incorporation as in effect on the date of
the Merger Agreement, including provisions relating to advances of expenses
incurred in the defense of any action or suit.
Employee Benefits. The Merger Agreement contains certain provisions
-----------------
regarding employee benefits which are described under "THE MERGER -- Effect
on Employee Benefit and Stock Plans."
31
<PAGE> 38
No member of Boatmen's management or Boatmen's Board of Directors or
any other affiliate of Boatmen's has an interest in the Merger, other than
as a shareholder of Boatmen's generally.
EFFECTIVE TIME
The Merger Agreement provides that the Merger will become effective
upon the filing of a Certificate of Merger with the Secretary of State of
the State of Missouri. It is presently anticipated that the Merger and the
Subsidiary Bank Merger will be consummated contemporaneously in the first
quarter of 1995, but no assurance can be given that such timetable will be
met.
ACCOUNTING TREATMENT
The Merger will be accounted for by Boatmen's under the purchase
method of accounting in accordance with Accounting Principles Board Opinion
No. 16, "Business Combinations", as amended. Under this method of
accounting, the purchase price will be allocated to assets acquired and
liabilities assumed based on their estimated fair values at the Effective
Time. Income of the combined company will not include income (or loss) of
West Side prior to the Effective Time. See "PRO FORMA FINANCIAL DATA."
MANAGEMENT AND OPERATIONS AFTER THE MERGER
It is anticipated that, effective as of the Effective Time of the
Merger, Bank of the West will merge into Boatmen's-Amarillo. Boatmen's-
Amarillo will be the surviving bank in the Subsidiary Bank Merger.
Following consummation of the Subsidiary Bank Merger, the present offices
of Bank of the West will be operated as branch offices of Boatmen's-
Amarillo. It is not anticipated that the Board of Directors of Boatmen's,
Boatmen's-Texas or Boatmen's-Amarillo will be affected as a result of the
Merger or the Subsidiary Bank Merger. It is presently anticipated that the
executive officers of Bank of the West will continue as officers of the
San Angelo branch of Boatmen's-Amarillo following the Subsidiary Bank
Merger. There are no written employment agreements with respect to such
anticipated continued employment.
EFFECT ON EMPLOYEE BENEFIT AND STOCK PLANS
The Merger Agreement provides that each employee of West Side or its
subsidiaries 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 measuring
periods of time for vesting and any age or period of service requirements
for commencement of participation with respect to any employee benefit
plans in which former employees of West Side and Bank of West may
participate, credit each such employee with his or her term of service with
West Side and its subsidiaries.
Upon the effectiveness of the Merger, each outstanding option to
purchase shares of West Side Common (a "West Side Stock Option") issued
pursuant to the Westside Bancshares, Incorporated Incentive Stock Option
Plan, whether or not vested or exercisable, will be assumed by Boatmen's.
Each West Side Stock Option will be deemed to constitute an option to acquire,
on the same terms and conditions as were applicable under such West Side
Stock Option, such number of shares of Boatmen's Common as the holder
32
<PAGE> 39
of such West Side Stock Option would have been entitled to receive
pursuant to the Merger had such holder exercised such option in full
immediately prior to the Effective Time, at an exercise price per share
equal to (i) the aggregate exercise price of the shares of West Side Common
otherwise purchasable pursuant to such West Side Stock Option divided by
(ii) the number of full shares of Boatmen's Common deemed purchasable
pursuant to such West Side Stock Option as aforesaid.
PRO FORMA FINANCIAL DATA
The following unaudited pro forma combined condensed balance sheet as
of September 30, 1994, and the pro forma combined condensed statements of
income for the nine months ended September 30, 1994 and September 30, 1993,
and for the year ended December 31, 1993, give effect to the Merger based
on the historical consolidated financial statements of Boatmen's and West
Side and their subsidiaries under the assumptions and adjustments set forth
in the accompanying notes to the pro forma financial statements.
These pro forma statements assume the Merger was consummated at the
beginning of each period presented. The pro forma statements may not be
indicative of the results that actually would have occurred if the 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 and West Side either incorporated by reference herein or
contained elsewhere in this Proxy Statement/Prospectus. The pro forma
financial data gives effect to Boatmen's pending acquisition of Worthen,
but does not give effect to the pending acquisitions of other financial
institutions, which pending acquisitions are not material to Boatmen's
individually or in the aggregate. If such acquisitions were included as
of September 30, 1994, pro forma equity would be $2,564,858, pro forma net
income would be $304,557 and pro forma earnings per share would be $2.37.
See "THE PARTIES -- Boatmen's -- Pending Acquisitions."
The following pro forma combined condensed balance sheet and condensed
statements of income include:
(a) Boatmen's historical consolidated financial information before
the pending acquisitions of West Side and Worthen.
(b) Worthen's historical consolidated financial information. 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 -- 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, which have been designated herein as Boatmen's
Pro Forma.
(d) West Side historical consolidated financial information.
(e) The combined statements of Boatmen's, Worthen and West Side
consolidated, which have been designated herein as Pro Forma
Combined.
33
<PAGE> 40
<TABLE>
PRO FORMA COMBINED CONDENSED BALANCE SHEET
(Unaudited)
September 30, 1994
(In Thousands)
<CAPTION>
<Fb>
<Fa> WORTHEN <Fc> <Fd> <Fe>
BOATMEN'S BANKING BOATMEN'S WEST SIDE PRO FORMA
BANCSHARES, INC. CORPORATION PRO FORMA BANCSHARES, INC. ADJUSTMENTS COMBINED
---------------- ----------- --------- ---------------- ----------- ---------
<S> <C> <C> <C> <C> <C> <C>
ASSETS:
Cash and noninterest-bearing balances
due from banks $1,767,030 $ 185,393 $1,952,423 $6,993 ($17,200)<F2> $1,942,216
Short term investments 45,604 948 46,552 46,552
Securities
Held to Maturity 4,200,436 1,073,127 5,273,563 19,001 (477)<F4> 5,292,087
Available for Sale 4,107,319 140,906 4,248,225 35,107 4,283,332
Trading 25,600 25,600 25,600
Federal funds sold and securities
purchased under resale agreements 775,293 79,500 854,793 5,950 860,743
Loans, net of unearned 16,104,659 1,899,391 18,004,050 71,554 18,075,604
Less reserve for loan losses 347,060 33,483 380,543 1,187 381,730
-------------------------------------------------------------------------------------------
Loans, net 15,757,599 1,865,908 17,623,507 70,367 17,693,874
-------------------------------------------------------------------------------------------
Property and equipment 519,609 96,326 615,935 2,102 618,037
Intangibles 260,372 27,281 287,653 5,665 <F3>
Other assets 477 <F4> 293,795
833,135 54,366 887,501 2,588 890,089
-------------------------------------------------------------------------------------------
Total Assets $28,291,997 $3,523,755 $31,815,752 $142,108 ($11,535) $31,946,325
===========================================================================================
LIABILITIES AND EQUITY:
Noninterest-bearing deposits $ 4,318,661 $ 583,997 $ 4,902,638 $22,152 $4,924,810
Interest-bearing deposits 16,165,655 2,377,077 18,542,752 107,458 18,650,190
-------------------------------------------------------------------------------------------
Total deposits 20,484,316 2,961,074 23,445,390 129,610 23,575,000
-------------------------------------------------------------------------------------------
Federal funds purchased and other
short-term borrowings 4,722,198 187,786 4,909,984 4,909,984
Long-term debt 515,428 43,030 558,458 558,458
Capital lease obligation 38,575 1,794 40,369 40,369
Other liabilities 323,503 28,337 351,840 963 352,803
-------------------------------------------------------------------------------------------
Total liabilities 26,084,020 3,222,021 29,306,041 130,573 0 29,436,614
-------------------------------------------------------------------------------------------
Redeemable preferred stock 1,142 1,142 1,142
Stockholders' equity:
Common stock 104,789 17,346<F1> 122,135 458 (458)<F3> 122,135
Surplus 795,776 164,149<F1> 959,925 10,040 (10,040)<F3> 959,925
Retained earnings 1,362,914 123,318 1,486,232 6,371 (6,371)<F3> 1,486,232
Less: tresury stock (4,596) (17,200)<F2>
17,200 <F3>
4,596 <F3> 0
Unrealized net depreciation,
available for sale securities (56,644) (3,079) (59,723) (738) 738 <F3> (59,723)
-------------------------------------------------------------------------------------------
Total stockholders' equity 2,206,835 301,734 2,508,569 11,535 (11,535) 2,508,569
-------------------------------------------------------------------------------------------
Total liabilities and stockholders'
equity $28,291,997 $3,523,755 $31,815,752 $142,108 ($11,535) $31,946,325
===========================================================================================
Stockholders' equity per share $21.06 $20.54 $20.54
============ ============= =============
</TABLE>
34
<PAGE> 41
NOTES TO PRO FORMA CONDENSED BALANCE SHEET
1. Based on the exchange ratio of 1.0 share of Boatmen's Common
for each share of Worthen common stock, including stock
options, 17,345,566 additional shares of Boatmen's Common
would have been issued as of September 30, 1994, in the
acquisition of Worthen.
2. Reflects purchase of treasury shares by Boatmen's to be used
in the acquisition of West Side.
3. Reflects conversion of outstanding shares and 20,300 shares
subject to stock options of West Side Common using the
exchange ratio of 1.8472 shares of Boatmen's Common for each
outstanding share of West Side Common for a purchase price of
$17.2 million in shares to be issued from treasury shares
(615,000 at $28.00 per share), and recognition of goodwill.
4. Reflects the adjustment of West Side held to maturity
securities to market value upon acquisition.
5. It is anticipated that Worthen will record nonrecurring
charges in the first quarter of 1995 upon consummation of the
Worthen acquisition. Boatmen's estimates the total of such
charges will approximate $13 million on a pre-tax basis, or a
reduction of $0.08 in earnings per share for the quarter.
Accordingly, the effect of such charges is not reflected in
the pro forma statements as it is immaterial.
6. Interest rates increased steadily in 1994 which has increased
the importance of managing interest rate risk associated with
on-balance sheet and derivatives instruments. The overall
increase in interest rates is reflected in the prime rate
which increased from 6.0% at December 31, 1993 to the current
level of 8.5%. Based on the current interest rate outlook and
the asset/liability repricing structure, Boatmen's anticipates
relative stability in the net interest margin in the near
term.
Boatmen's interest rate risk policy is to maintain a stable
level of net interest income while also enhancing earnings
potential through limited risk positioning based on the forecast
of future interest rates. Interest rate risk exposure is
limited, by policy, to 5% of projected annual net income.
Adherence to these risk limits is controlled and monitored
through simulation modeling techniques that consider the impact
that alternative interest rate scenarios will have on Boatmen's
financial results.
An effective asset/liability management function is necessitated
by the interest rate risk inherent in Boatmen's core banking
activities. If no other action is taken, the behavior of the
core banking activity, which includes lending and deposit
activity, results in an asset-sensitive position. Accordingly,
to prudently manage the overall interest rate sensitivity
position, Boatmen's utilizes a combination of interest rate
swaps and on-balance sheet financial instruments to reduce the
natural asset sensitivity of the core banking activities.
The interest rate swap portfolio is currently being used to
modify the interest rate sensitivity of subordinated debt and to
alter the interest rate sensitivity of Boatmen's prime-based
loan portfolio. Boatmen's has accessed the capital markets
twice in recent years resulting in the issuance of $200 million
of fixed rate subordinated debt. The impact of adding long-term
debt to the balance sheet resulted in a movement towards being
more asset sensitive as proceeds were initially used to replace
short-term borrowings. Accordingly, to reduce the impact on
Boatmen's gap position, $200 million of interest rate swaps were
executed to convert fixed rate debt to a floating rate
instrument. Boatmen's prime based loan portfolio (approximately
$5.5 billion) is the primary cause of the large asset
sensitivity position of the core banking activity as it is
primarily funded by deposit liabilities that are less sensitive
to movements in market
35
<PAGE> 42
interest rates. As a means to alter the interest rate sensitivity
of the prime based portfolio, Boatmen's has used off-balance sheet
instruments to convert approximately $2.0 billion of prime based
loans to fixed rate instruments. Periodic correlation assessments
are performed to ensure that the swap instruments are effectively
modifying the interest rate characteristics of the prime based
loans and long-term debt. The interest rate swaps are not
leveraged in that they reset in step with rate movements within the
underlying index. Both interest swap programs were consistent with
management's objective of reducing the natural asset sensitivity
of the core banking activities.
In 1994, Boatmen's added new swap transactions with a notional
amount of $1.1 billion and $0.6 billion of swaps matured, such
that at September 30, 1994, interest rate swaps totaled
$2.3 billion. The swap portfolio increased net interest income
by approximately $16.3 million for the nine months of 1994,
adding 9 basis points to the net interest margin, compared to
$14.0 million or 9 basis points in the same period last year.
The swap portfolio is primarily comprised of contracts wherein
Boatmen's receives a fixed rate of interest while paying a
variable rate. The average rate received at September 30, 1994
was 5.46% compared to an average rate paid of 5.14%, and the
average remaining maturity of the total portfolio was less than
two years. The estimated fair value of the swap portfolio was
a negative $123 million at September 30, 1994, based on
discounted cash flow models. Given that these swaps are valued
using interest rates at quarter end, the estimated fair value is
not necessarily indicative of the future net interest potential
of the portfolio over its remaining life. Approximately 90% of
the portfolio is comprised of indexed amortizing swaps;
accordingly, the maturity distribution could lengthen if
interest rates were to increase from current levels. Assuming
short-term interest rates were to increase 200 basis points from
their current levels, the average maturity distribution of the
swap portfolio would increase from 2 years to approximately 4
years. In addition, the results from the simulation model
indicate that in a rising rate environment the net interest
contribution from the swap portfolio will lessen as the variable
component resets upward, but this should be offset by a higher
contribution from core banking activities. The increased
contribution from core banking activities will occur as variable
rate loans reprice upward coupled with an increased contribution
from administered rate liabilities, which are less sensitive to
rate movements.
While Boatmen's is primarily an end-user of derivative
instruments, it does serve in a limited capacity as an
intermediary to meet the financial needs of its customers. The
notional amount of the customer swap portfolio at September 30,
1994 totaled approximately $169 million. Interest rate risk
associated with this portfolio is controlled by entering into
offsetting positions with third parties.
Any future utilization of off-balance sheet financial
instruments will be determined based upon Boatmen's overall
interest rate sensitivity position and asset/liability
management strategies, which are designed to limit interest rate
risk exposure (earnings at risk position) to no more than 5% of
projected annual net income. Based on the current interest rate
sensitivity position, and assuming a gradual 100-200 basis point
increase in interest rates over the next 12 months, the
simulation model results indicate that Boatmen's earnings at
risk position is within established limits.
36
<PAGE> 43
<TABLE>
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
(UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 1994
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
WORTHEN
BOATMEN'S BANKING BOATMEN'S WEST SIDE PRO FORMA
BANCSHARES, INC. CORPORATION PRO FORMA BANCSHARES, INC. COMBINED
---------------- ----------- --------- ---------------- --------
<S> <C> <C> <C> <C> <C>
Interest Income $1,292,115 $162,142 $1,454,257 $7,027 $1,461,284
Interest Expense 528,363 56,197 584,560 2,596 587,156
-----------------------------------------------------------------------------------
Net Interest Income 763,752 105,945 869,697 4,431 874,128
Provision for loan losses 19,906 1,050 20,956 0 20,956
-----------------------------------------------------------------------------------
Net Interest Income after
provision for loan losses 743,846 104,895 848,741 4,431 853,172
Noninterest income 390,535 50,584 441,119 1,492 442,611
Noninterest expense 732,282 99,831 832,113 3,642 835,755
-----------------------------------------------------------------------------------
Income before income taxes 402,099 55,648 457,747 2,281 460,028
Income tax expense 138,775 20,099 158,874 882 159,756
-----------------------------------------------------------------------------------
Net income $263,324 $35,549 $298,873 $1,399 $300,272
===================================================================================
Net income available to
common shareholders $263,264 $35,549 $298,813 $1,399 $300,212
===================================================================================
Net income per common share $2.52 $2.46 $2.47
==================== ============== ==============
Average shares outstanding 104,673 121,693 121,693
==================== ============== ==============
See Notes to Pro Forma Combined Condensed Statements of Income
</TABLE>
37
<PAGE> 44
<TABLE>
PRO FORMA COMBINED CONDENSED STATEMENT OF INCOME
(UNAUDITED)
NINE MONTHS ENDED SEPTEMBER 30, 1993
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<CAPTION>
WORTHEN
BOATMEN'S BANKING BOATMEN'S WEST SIDE PRO FORMA
BANCSHARES, INC. CORPORATION PRO FORMA BANCSHARES, INC. COMBINED
---------------- ----------- --------- ---------------- --------
<S> <C> <C> <C> <C> <C>
Interest Income $1,201,695 $158,292 $1,359,987 $6,861 $1,366,848
Interest Expense 473,848 60,056 533,904 2,599 536,503
-----------------------------------------------------------------------------------
Net Interest Income 727,847 98,236 826,083 4,262 830,345
Provision for loan losses 48,331 3,779 52,110 60 52,170
-----------------------------------------------------------------------------------
Net Interest Income after
provision for loan losses 679,516 94,457 773,973 4,202 778,175
Noninterest income 366,389 51,479 417,868 1,504 419,372
Noninterest expense 696,620 111,730 808,350 3,423 811,773
-----------------------------------------------------------------------------------
Income before income taxes 349,285 34,206 383,491 2,283 385,774
Income tax expense 108,988 11,258 120,246 1,041 121,287
-----------------------------------------------------------------------------------
Net income $240,297 $22,948 $263,245 $1,242 $264,487
===================================================================================
Net income available to
common shareholders $240,233 $22,948 $263,181 $1,242 $264,423
===================================================================================
Net income per common share $2.32 $2.19 $2.20
==================== ============== ==============
Average shares outstanding 103,415 120,170 120,170
==================== ============== ==============
See Notes to Pro Forma Combined Condensed Statements of Income
</TABLE>
38
<PAGE> 45
<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 WEST SIDE 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 $9,091 $1,834,727
Interest Expense 631,974 79,264 711,238 3,438 714,676
-----------------------------------------------------------------------------------
Net Interest Income 981,580 132,818 1,114,398 5,653 1,120,051
Provision for loan losses 60,184 4,628 64,812 60 64,872
-----------------------------------------------------------------------------------
Net Interest Income after
provision for loan losses 921,396 128,190 1,049,586 5,593 1,055,179
Noninterest income 493,251 66,591 559,842 2,105 561,947
Noninterest expense 950,421 147,199 1,097,620 4,795 1,102,415
-----------------------------------------------------------------------------------
Income before income taxes 464,226 47,582 511,808 2,903 514,711
Income tax expense 146,807 15,332 162,139 1,176 163,315
-----------------------------------------------------------------------------------
Net income $317,419 $32,250 $349,669 $1,727 $351,396
===================================================================================
Net income available to
common shareholders $317,334 $32,350 $349,584 $1,727 $351,311
===================================================================================
Net income per common share $3.07 $2.91 $2.92
==================== ============== ==============
Average shares outstanding 103,490 120,307 120,307
==================== ============== ==============
See Notes to Pro Forma Combined Condensed Statements of Income
</TABLE>
39
<PAGE> 46
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. Approximately 615,100 shares of Boatmen's
Common will be issued in the acquisition of West Side;
however, a similar number of shares will be acquired as
treasury stock by Boatmen's resulting in no net increase in
shares outstanding relating to the West Side acquisition.
2. Net income includes $868 thousand for the nine months ended
September 30, 1993 and year ended December 31, 1993, for the
cumulative effect of FAS No. 109 adoption at Worthen. In
addition, net income includes $104 thousand for the nine
months ended September 30, 1993 and year ended December 31,
1993, for the cumulative effect of FAS No. 109 adoption at
West Side. Net income also includes amortization of goodwill
which would result from the acquisition of West Side as if
goodwill existed as of the earliest period presented. Goodwill
will approximate $6.1 million to be amortized over 15 years.
40
<PAGE> 47
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") and
1,500,000 shares are designated "Junior Participating Preferred
Stock, Series C", $1.00 stated par value per share (the "Boatmen's
Series C Preferred Stock").
As of January 31, 1995, approximately 110.0 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 Boatmen's Series C Preferred Stock were
reserved for issuance with no shares outstanding.
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. For a discussion of
the terms of Boatmen's Series C Preferred Stock, see "COMPARISON OF
SHAREHOLDER RIGHTS -- Shareholder Rights Plan."
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.
41
<PAGE> 48
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.
Preemptive Rights. The holders of Boatmen's Common have no
-----------------
preemptive right to acquire any additional unissued shares or
treasury shares of Boatmen's Common.
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. Except with
respect to the attached preferred share purchase rights, such
shares of Boatmen's Common do not have any redemption provisions.
See "COMPARISON OF SHAREHOLDER RIGHTS -- Shareholder Rights Plan."
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.
42
<PAGE> 49
COMPARISON OF SHAREHOLDER RIGHTS
The rights of holders of shares of Boatmen's Common are
governed by the General and Business Corporation 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 West Side
Common are governed by the Texas Law and by West Side's articles of
incorporation, bylaws and other corporate documents. The rights of
holders of shares of West Side Common differ in certain respects
from the rights which they would have as shareholders of Boatmen's.
A summary of the material differences between the respective rights
of holders of West Side Common and Boatmen's Common is set forth
herein.
SHAREHOLDER VOTE REQUIRED FOR CERTAIN TRANSACTIONS
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. West Side's articles
of incorporation and bylaws do not contain any specific provision
relating to the vote necessary to effect a business combination or
merger.
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 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
43
<PAGE> 50
if the votes cast against his or her removal would be sufficient to elect
him or her if then cumulatively voted at an election of the class of
directors of which he or she is a part. At a meeting called expressly
for that 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 or her election.
The Texas Law provides for the removal of directors only by
specific provisions of the articles of incorporation or bylaws at
a meeting specifically called for that purpose, which such removal
is approved, by not less than a majority of shareholders. West
Side's articles of incorporation do contain a provision regarding
the removal of directors which allows the removal of one or all
directors with or without cause by a majority of the shares then
entitled to vote at any election of directors at a meeting
expressly called for that purpose.
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. See "COMPARISON
OF SHAREHOLDER RIGHTS -- Takeover Statutes."
Article XII of Boatmen's Restated Articles of Incorporation
provides that Boatmen's may amend, alter, change or repeal
provisions of Restated Articles of Incorporation in the manner
provided by law, with the exception, however, of amendments to
those provisions of its Restated Articles relating to the
classification and number of directors, the approval of Business
Combinations, and the aforementioned exceptions set forth in
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 provision of the articles of incorporation, may
do so if the amendment directly affects their class or series of
stock.
The articles of incorporation of West Side do not include any
provision relating to amendments of the articles of incorporation.
44
<PAGE> 51
VOTING RIGHTS
Under the Missouri Law, unless otherwise provided in the
articles of incorporation, each outstanding share is entitled to
one vote on each matter submitted to a vote at a meeting of the
shareholders. However, the Missouri Law provides that, unless the
articles of incorporation provide otherwise, each shareholder is
entitled to cumulative voting when electing directors, which means
that each shareholder has the right to cast as many votes in the
aggregate equal to the number of votes held by such person
multiplied by the number of directors to be elected at the
election, and the person may cast the whole number of votes for one
candidate or distribute them in any manner he or she desires.
Boatmen's Bylaws provide that at all meetings of the
shareholders, unless otherwise provided in the Bylaws or Articles
of Incorporation, each share is entitled to one vote in each matter
submitted to a vote, but no share belonging to or hypothecated to
Boatmen's shall be voted. Additionally, Boatmen's Bylaws provide
for cumulative voting with regard to the election of directors.
Under the Texas Law, each outstanding share, regardless of
class, is entitled to one vote on each matter submitted to a vote
at a meeting of shareholders, except to the extent provided by the
articles of incorporation or as otherwise provided in the Texas
Law. The Texas Law does provide, however, for cumulative voting
for the election of directors unless expressly prohibited by the
articles of incorporation. West Side's articles of incorporation
specifically contain this prohibition.
SPECIAL MEETINGS OF SHAREHOLDERS; SHAREHOLDER ACTION BY WRITTEN
CONSENT
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 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.
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.
West Side's articles of incorporation do not so provide for such
action to be taken other than by unanimous written consent.
45
<PAGE> 52
West Side's bylaws provide that a special meeting of
shareholders may be called at any time by the President, and shall
be called by the President or Secretary at the written request of
a majority of the Board of Directors shareholders owning not less
than ten percent (10%) of all share entitled to vote at the
meeting. West Side'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.
NOTICE OF SHAREHOLDER NOMINATIONS OF DIRECTORS
Boatmen's Bylaws provide that a shareholder may nominate a
person for director only if he or she 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.
West Side's bylaws contain no provision with respect to the
nomination of directors.
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 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.
West Side's bylaws limit business transacted at special
meetings to the purpose or purposes stated in the notice for such
meeting.
SHAREHOLDER RIGHTS PLAN
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. 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 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,
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.
On August 14, 1990, Boatmen's Board of Directors 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 Boatmen's Series C Preferred Stock at a price of $110.00 per
46
<PAGE> 53
one one-hundredth share of Boatmen's Series C Preferred Stock
(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 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 a
share of Boatmen's Series C Preferred Stock 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 Boatmen's Rights and the number of one one-
hundredths of a share of Boatmen's Series C Preferred Stock
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.
Shares of Boatmen's Series C Preferred Stock purchasable upon
exercise of the Boatmen's Rights will not be redeemable. Each Preferred
Share will be entitled to a minimum preferential quarterly dividend
47
<PAGE> 54
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 shares of Boatmen's Series C
Preferred Stock 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 share
of Boatmen's Series C Preferred Stock 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 share of Boatmen's Series C Preferred Stock
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 Boatmen's Series C Preferred
Stock's dividend, liquidation and voting rights, the value of the
one one-hundredth interest in a share of Boatmen's Series C
Preferred Stock 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).
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 share of Boatmen's Series C Preferred
Stock will be issued (other than fractions which are integral
multiples of one one-hundredth of a share of Boatmen's Series C
Preferred Stock and which may, at the election of Boatmen's, be evidenced
by depositary receipts) and in lieu thereof, an adjustment in cash
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<PAGE> 55
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, 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 or she 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.
West Side does not have a shareholder rights plan.
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
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<PAGE> 56
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. See
"COMPARISON OF SHAREHOLDER RIGHTS -- Takeover Statutes." Because
Boatmen's is not merging directly with West Side, Boatmen's shareholders
will not be entitled to assert such rights in connection with the Merger.
Under the Texas Law, a shareholder of a Texas corporation is
entitled to receive payment for the fair value of his or her shares
under certain circumstances. However, unlike the Missouri Law, not
all Texas corporations are governed by the Texas Law with respect
to dissenters' rights. See "THE 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 to be subject to the provisions of this statute, 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 an "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.
The Texas Law does not contain a takeover statute or a
"control share acquisition" provision.
LIABILITY OF DIRECTORS; INDEMNIFICATION
Pursuant to the Missouri Law and the Texas Law, each
corporation may indemnify persons, including certain officers and
directors, in connection with liabilities arising from legal
proceedings resulting from such persons' service to the corporation
in certain circumstances. The respective Articles of Incorporation and
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<PAGE> 57
Bylaws of Boatmen's and West Side obligate each to indemnify
directors and certain officers. Each of Boatmen's and West Side
may also voluntarily undertake to indemnify certain persons acting
on the corporation's behalf in certain circumstances. While the
indemnification laws and provisions applicable to Boatmen's and
West Side are substantially similar in most material respects,
there are certain material differences, which differences are
discussed herein.
Section 351.355(1) and (2) of the Missouri Law 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
or she 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 or her in connection with such
action, suit or proceeding if he or she acted in good faith and in
a manner he or she reasonably believed to be in or not opposed to
the best interests of the corporation and, with respect to any
criminal action or proceeding, had no reasonable cause to believe
his or her 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 or
her 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 further 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 or she shall be indemnified against expenses, including
attorney's fees, actually and reasonably incurred in connection
with such action, suit or proceeding. Section 351.355 also
provides that a Missouri corporation may provide additional
indemnification to any person indemnifiable under subsection (1) or
(2) thereof, 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. The
Restated Articles of Incorporation of Boatmen's provide that it
shall indemnify its directors and certain of its executive officers
to the full extent specified in Section 351.355 and, in addition,
shall indemnify each of them against all expenses incurred in
connection with any claim by reason of service for or at the
request of Boatmen's in any of the capacities referred to in
Section 351.355 or arising out of his or her status in any such
capacity, provided that he or she may not be indemnified against
conduct finally adjudged to have been knowingly fraudulent,
deliberately dishonest or wilful misconduct, and that it may extend
to other officers, employees and agents such indemnification and
additional indemnification.
The Texas 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 or her duty
to the corporation, and will be limited to reasonable
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<PAGE> 58
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.
West Side's articles of incorporation do not mention
indemnification of its directors. In accordance with the Texas
Law, and pursuant to its bylaws, West Side will indemnify any
director against expenses actually and necessarily incurred by him
or her in connection with the defense of any action, suit or
proceeding, whether civil or criminal, in which he or she is made
party by reason of being or having been such director, except in
relation to matters as to which he or she shall be adjudged in such
action, suit or proceeding to be liable for negligence or
misconduct in performance of duty. Such indemnity shall include
reimbursement for the reasonable cost of settlement of any such
action, suit or proceeding it if shall be found by a majority of
the directors not involved in the matter in controversy, whether
or not a quorum, that it was in the best interests of the
corporation that such settlement be made, and that such director
was not guilty of negligence or misconduct in performance of duty.
LIMITATION OF LIABILITY OF DIRECTORS
The Missouri Law provides that a Missouri corporation may
include any provision in its articles of incorporation that is not
inconsistent with the law, but does not specifically prohibit or
allow a provision limiting the liability of directors in the
articles of incorporation of a Missouri corporation. Other than in
regard to the indemnification of directors, Boatmen's Articles of
Incorporation do not contain a provision regarding the liability
of directors.
The Texas Law provides that a Texas corporation may include
any provision in its articles of incorporation which are not
inconsistent with the Texas Law, including any provision which
under the Texas Law is required or permitted to be set forth in the
bylaws which the incorporators elect to set forth in the articles
of incorporation for the regulation of the internal affairs of the
corporation. West Side's articles of incorporation and bylaws
contain no provisions regarding the liability of directors.
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.
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<PAGE> 59
The Texas Law does not contain provisions comparable to those
described above.
INFORMATION ABOUT WEST SIDE
BUSINESS OF WEST SIDE AND BANK OF THE WEST
West Side was incorporated under the laws of the State Texas
on August 31, 1979 to become a bank holding company for West Side
National Bank. West Side National Bank, originally chartered in
July 1962, converted to a Texas state-chartered banking association
under the name Bank of the West IN 1982. Westside Delaware was
incorporated under the laws of the State of Delaware on
September 1, 1992 as a wholly-owned subsidiary of West Side. On
September 16, 1992, an Exchange Agreement was entered into by and
among West Side and Westside Delaware, pursuant to which Westside
Delaware acquired 300,000 shares (100%) of Bank of the West stock
from West Side in exchange for the issuance of 1,000 shares (100%)
of Westside Delaware.
Bank of the West offers complete banking services to the
commercial, agricultural and residential areas which it serves.
Services include commercial, real estate, and personal loans,
checking, savings and time deposits and other customer services
such as safe deposit facilities and fiduciary services. The
largest portion of Bank of the West's lending business is related
to the activities of small to medium sized businesses and local
community residents.
Bank of the West is subject to vigorous competition from other
banks and financial institutions in its principal service area,
which includes San Angelo, Texas. In making loans, Bank of the
West encounters substantial competition from banks and other
lending institutions, such as savings and loan associations,
insurance companies, finance companies, and credit unions. In
addition, Bank of the West competes for savings 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.
Bank of the West is subject to supervision, regulation and
examination by the Texas Department of Banking and the Federal
Deposit Insurance Corporation, and its deposits are insured by the
Federal Deposit Insurance Corporation. As a bank holding company,
West Side is regulated by the Federal Reserve.
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<PAGE> 60
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS OF WEST SIDE AND SUBSIDIARIES
INTRODUCTION
The following discussion and analysis is intended to review
the significant factors affecting the financial condition and
results of operations of West Side and its subsidiaries, Westside
Delaware and Bank of the West, for the three-year period ended
December 31, 1993 and the nine month periods ending September 30,
1994 and September 30, 1993.
FOR THE NINE MONTH PERIODS ENDED SEPTEMBER 30, 1994 AND 1993
RESULTS OF OPERATIONS
Net income for the nine months ended September 30, 1994 was
$1,706,000 as compared to $1,653,000 for the same nine month period
in 1993. Many areas of Bank of the West experienced gains over
last year, primarily those areas generating non-interest income,
such as the trust department and the investment center, and most
service-charge-related income is up.
<TABLE>
Primary comparative ratios for the periods ending
September 30, 1994 and September 30, 1993 reflect the following:
<CAPTION>
Return on Average Return on Average
Assets Equity
September 30, September 30,
------------- -------------
1994 1993 1994 1993
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Income 1.60% 1.64% 20.31% 22.83%
</TABLE>
Following is an analysis of the primary components of net
income for the nine months ended September 30, 1994 and
September 30, 1993.
NET INTEREST INCOME
Net interest income is the principal source of West Side's net
income and represents the difference between interest income and
interest expense. For the nine month period ended September 30,
1994, net interest income was $4,431,000, or an annualized net
interest margin of 4.53%. This compares with a net interest income
for the same nine month period in 1993 of $4,262,000, or an
annualized net interest margin of 4.58%.
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<PAGE> 61
<TABLE>
While actual interest income was up, interest expense was also
up, thereby narrowing the margin as reflected below:
<CAPTION>
Nine Months ended Nine Months ended
September 30, 1994 September 30, 1993
------------------ ------------------
(Dollars in Thousands)
<S> <C> <C>
Interest Income $7,027 $6,861
Less: Interest Expense (2,596) (2,599)
----- -----
Net Interest 4,431 4,262
Average Earning Assets $130,384 $123,932
Annualized Net Interest Margin 4.53% 4.58%
</TABLE>
<TABLE>
PROVISION FOR POSSIBLE LOAN LOSSES AND ALLOWANCE FOR POSSIBLE LOAN LOSSES
<CAPTION>
Nine Months ended Nine Months ended
September 30, 1994 September 30, 1993
------------------ ------------------
(Dollars in Thousands)
<S> <C> <C>
Balance at Beginning of Period $1,254 $1,339
Loans Charged Off (168) (176)
Recoveries 101 31
Provision for Loan Losses 60
Balance at End of Period $1,187 $1,254
===== =====
Loan Reserve to Total Loans 1.66% 1.80%
Loan Reserve to Non-Performing Loans 470% 493%
</TABLE>
The economy in San Angelo, Texas has steadily improved since
1989. Accordingly, all banks' loss experience, and especially Bank
of the West's loss experience, has improved. As a result, no
additional loss provisions to the Loan Reserve have been deemed
necessary since 1993.
The past two year's loss experience has been approximately
0.15% to 1% of loans. With a loss reserve of 1.71% of loans and
very nominal past dues (only 2.08% of loans past due at
September 30, 1994) and nominal non-performing loans, the loss
reserve is considered adequate at present.
<TABLE>
NON-PERFORMING LOANS
Non-performing loans are defined as loans delinquent 90 or
more days, nonaccrual loans, and restructured loans. Such assets
do not necessarily represent future losses to Bank of the West since
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<PAGE> 62
underlying collateral can be sold and/or the financial condition of
the borrower(s) may improve. The following table sets forth detail
regarding non-performing loans:
<CAPTION>
September 30, December 31, December 31,
------------- ------------ ------------
1994 1993 1992
---- ---- ----
(Dollars in Thousands)
<S> <C> <C> <C>
Non-Accrual Loans $258 $254 $1,054
Loans Past Due 90 Days or More 46 356 49
Foreclosed Assets 183 206 438
--- --- ---
Total Non-Performing Assets $487 $816 $1,541
=== === =====
Total Assets $142,423 $142,362 $126,527
Non Performing Assets/Total Assets .34% .57% 1.21%
</TABLE>
NON-INTEREST INCOME
Non-interest income at Bank of the West is comprised of 5
significant components as follows:
1) Deposit and service charge income
2) Mortgage department fee income
3) Trust department fee income
4) Investment center fee income
5) All other fees
Deposit and service charge income during the nine months ended
September 30, 1994 was $610,000 as compared to $587,000 for the
corresponding nine month period in 1993. This increase is
attributable to both growth and continued revision in service fees
and rates per transaction. Bank of the West remains highly
competitive in its fee structure and constantly monitors
competitive rates and fees of banks in the area to determine the
impact of any rate/fee adjustment.
<TABLE>
Mortgage department fee income is derived primarily from the
origination and sale of residential mortgage loans into the
secondary market and from certain in-house servicing of sold loans,
as well as fees on the origination of interim construction loans
for residential builders and customers. This area has experienced
a decline in fee income for the nine months ending September 30,
1994 as compared to the same period last year as follows:
<CAPTION>
September 30, 1994 September 30, 1993
------------------ ------------------
<S> <C> <C>
Total fee income for mortgage department $343,067 $435,674
</TABLE>
The primary reason for the decline has been the virtual
cessation of home refinancings which had built up this business over the
past two years. As interest rates for home loans have risen, the home
refinancing portion of this department's business has declined
considerably. Other significant lines
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<PAGE> 63
of business continue, however. Because of the relative robustness of
the local economy, new home construction and sales and financing of
existing homes continues to be good. Bank of the West participates
significantly in this function. In 1993, Bank of the West
originated over 45% of the total residential loans made and sold
into the secondary market by all banks in San Angelo, Texas. While
this stream of income has declined somewhat, corresponding staffing
cuts have been initiated by management to keep expenses in line
with the business cycle decline.
<TABLE>
The following table is provided to illustrate trends in number
of loans originated and other significant factors about the Bank of
the West's mortgage loan operations:
<CAPTION>
Nine Months ended
1990 1991 1992 1993 September 30, 1994
---- ---- ---- ---- ------------------
<S> <C> <C> <C> <C> <C>
Number of Loans Originated 150 178 352 417 265
Dollar Amount Originated (millions) $9 $11.7 $22.87 $26.3 $18
Number of Employees 9 12 12 12 8
Fees Originated per Employee $15,333 $17,333 $32,674 $41,507 $43,750
</TABLE>
Fee income for the trust department for the nine month period
ending September 30, 1994 was $222,000 as compared to $225,000
during the same period in 1993. Because of certain Internal
Revenue Code changes and other considerations, a number of pension/
profit sharing plans administered by the trust department were
terminated in early 1994. Management of that department has
undertaken to replace those assets under administration and in fact
has brought in over $3 million in new assets into the trust
department during 1994. Management believes this department is
poised for significant growth and profit contributions to Bank of
the West in the future. Total assets under management by the trust
department at September 30, 1994 were over $50,000,000 in either
(1) pension plans, (2) personal trusts, or (3) agency accounts. No
significant trust assets are on deposit in Bank of the West.
Fee Income from the investment center through the nine month
period ending September 30, 1994 totaled over $173,000. This
department has been recognized as a leader in sales volume of
mutual funds, annuities, and direct stocks and bonds to customers
of Bank of the West. Through the nine month period ending
September 30, 1993, this department had generated over $152,000.
Significant net profits after all direct and allocated expenses are
being contributed to Bank of the West from this activity.
All other fees and charges for the nine month period ending
September 30, 1994 totaled $215,000 as compared to $202,000 for the
corresponding period in 1993.
Overall, non-interest income for Bank of the West for the nine
month period ending September 30, 1994 was $1,555,000 as compared
to $1,576,000 for the corresponding period 1993.
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OTHER OPERATING EXPENSE
For the nine month period ending September 30, 1994,
compensation and benefits increased $101,000, or 6.07%, as compared
to the nine months ended September 30, 1993 primarily as a result
of normal wage increases and benefit costs. The actual number of
employees has been reduced. Direct salary expenses for officers
increased $15,000, or 2.4%, while direct salary expenses for all
other employees increased $67,000, or 10.0%.
Bank of the West's occupancy expenses were up $19,000 over the
corresponding nine month period last year, and equipment expenses
were up $2,000 (from $151,000 to $153,000). All other operating
expenses for the nine months ending September 30, 1994 were up
$108,000, or 10%, as compared to the corresponding nine month
period ending September 30, 1993.
Overall, total overhead expense of Bank of the West was
$3,330,000 versus $3,100,000 for the nine months ending
September 30, 1993. Expressed as a percentage of assets, overhead
for Bank of the West has continuously run below peer group averages
over the past five years.
<TABLE>
Overhead as a percentage of assets since 1989 is as follows:
<CAPTION>
1989 1990 1991 1992 1993 1994
---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Overhead as a percentage of assets 3.44% 3.34% 3.38% 3.27% 3.15% 3.14%<F1>
</TABLE>
INCOME TAXES
West Side and its subsidiaries, Westside Delaware and Bank of the
West, file a consolidated Federal Income Tax Return. Federal income tax
or benefit is allocated among the entities based on their respective
taxable income or loss included in the consolidated return.
FINANCIAL CONDITION
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.
[FN]
- --------------------
<F1> Annualized.
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<PAGE> 65
LOAN PORTFOLIO
<TABLE>
The following table presents loans outstanding at September 30, 1994
and December 31, 1993:
<CAPTION>
September 30, 1994 December 31, 1993
------------------ -----------------
Percent of Percent of
Amount Total Amount Total
------ ---------- ------ ----------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
Commercial and
Financial $19,681 27.50% $17,582 25.21%
Real Estate:
Non-farm/nonresidential 17,013 23.78 $13,851 19.86
Residential 16,228 22.68 16,341 23.43
Farmland, construction
and other 6,792 9.49 8,748 12.55
All Other Services & Ind. 2,795 3.91 4,523 6.49
Consumer 9,045 12.64 8,689 12.46
----- ----- ----- -----
Total $71,554 100.00% $69,734 100.00%
====== ======= ====== =======
</TABLE>
The loan portfolio experienced a growth of $1,820,000 (2.61%) from
December 31, 1993 to September 30, 1994.
MATURITY OF LOANS
<TABLE>
The following table sets forth the maturity composition of total loans
at September 30, 1994:
<CAPTION>
September 30, 1994
------------------
Percent of
Loans Total
----- ----------
(Dollars in Thousands)
<S> <C> <C>
In one year or less $48,039 67.14%
After one year through five years 20,595 28.78
After five years 2,920 4.08
------ ------
Total $71,554 100.00%
====== =======
</TABLE>
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<PAGE> 66
INTEREST SENSITIVITY
<TABLE>
<CAPTION>
September 30, 1994
------------------
Fixed Rate Variable Rate
---------- -------------
(Dollars in Thousands)
<S> <C> <C>
In one year or less $14,169 $34,164
After one year through five years 20,595 --
After five years 2,920 --
------- -------
Total $37,684 $34,164
======= =======
</TABLE>
At September 30, 1994, there were no commitments to lend additional
funds to borrowers whose loans were considered non-performing. The loan
portfolio does not include any loans to foreign countries, credit card
loans, or highly leveraged transaction loans.
Bank of the West primarily originates or participates in loans to
individuals and businesses in its local lending area defined as Tom Green
County, Texas and contiguous counties. Lending within the commercial and
real estate markets is distributed among a variety of industries and
activities to maintain a diversified loan portfolio.
Management closely monitors concentrations to single industries and
individual customers, and actively participates in the lending function of
the bank. Bank of the West has written policies that require security for
loans including liens on residential mortgage loans. In addition, policies
and procedures are in place to assess the credit worthiness of borrowers
for all loans and commitments. Borrowers' ability to honor their loan
contracts can be largely dependent upon the economic conditions within the
market area and on a national level.
Past due loans are managed aggressively. At September 30, 1994, total
loans past due over 30 days were 2.05%, down from 2.85% at the same date
in 1993, and 2.98% at the same date in 1992.
INVESTMENTS
Bank of the West's holding 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 of $5,950,000
at September 30, 1994 and $7,550,000 at December 31, 1993. Investment
securities increased from $50,386,000<F2> at December 31, 1993 to $54,108,000
at September 30, 1994.
[FN]
- ----------------------------
<F2> Includes $696,000 in participation certificates.
60
<PAGE> 67
SECURITIES PORTFOLIO
<TABLE>
The following table presents the composition of investments and the
change in each category for the periods presented:
<CAPTION> Change
September 30, December 31, --------------------------
1994 1993 Amount Percent
----------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C>
U.S. Government $24,764 $20,240 $4,524 $22.35%
U.S. Government Agencies 8,907 15,024 (6,117) (40.71)
Municipals and other tax-exempt 594 1,450 (856) (59.03)
Mortgage-backed securities 19,843 13,672 6,171 45.14
Corporate bonds and other -- -- -- --
----------------------------------------------------------
Total Investments $54,108 $50,386 $3,722 7.39%
==========================================================
</TABLE>
The market value of total investment securities was $53,631,000 and
$50,790,000 at September 30, 1994 and December 31, 1993, respectively.
61
<PAGE> 68
INVESTMENT SECURITIES - MATURITIES AND YIELDS
<TABLE>
The following table shows the maturities and yields for the various
forms of investment securities:
<CAPTION>
SEPTEMBER 30, 1994
MATURING
-----------------------------------------------------------------------------
AFTER ONE AFTER FIVE
IN ONE YEAR OR THROUGH THROUGH TEN
LESS FIVE YEARS 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. Government $4,959 4.16% $19,805 4.71% $ -- --% $ -- --%
U.S. Government agencies & corporations 4,044 5.34 2,935 5.94 1,928 5.90 -- --
Municipals and other tax exempt<F1> 255 12.69 255 10.08 84 10.44 -- --
Mortgage-backed securities 1,704 7.08 10,801 5.73 2,074 6.06 5,264 5.12
-----------------------------------------------------------------------------
$10,962 5.24% $33,796 5.19% $4,086 6.07% $5,264 5.12%
=============================================================================
<FN>
<F1> Yield presented on a tax-equivalent basis assuming a tax rate of 34%.
</TABLE>
DEPOSITS
The deposit base provides the major funding source for earning assets
of Bank of the West. Bank of the West has shown steady growth in deposits
and in overall market share of deposits in the City of San Angelo, Texas,
despite overall decline in bank deposits in the market over the past four
years.
<TABLE>
A review of overall bank deposits for the City of San Angelo, Texas
since 1991 follows:
<CAPTION>
Nine Months
ended
1991 1992 1993 9/30/94
--------------------------------------------
<S> <C> <C> <C> <C>
Total bank deposits $814 $767 $738 $712
(millions)
</TABLE>
62
<PAGE> 69
<TABLE>
During that same time period, Bank of the West experienced growth in
deposits as follows:
<CAPTION>
Nine Months
ended
1991 1992 1993 9/30/94
--------------------------------------------
<S> <C> <C> <C> <C>
Bank of the West
total deposits (millions) $114 $116 $128 $130
</TABLE>
<TABLE>
As a percent of total market share, Bank of the West has shown
significant growth in market penetration as follows:
<CAPTION>
Nine Months
ended
1991 1992 1993 9/30/94
--------------------------------------------
<S> <C> <C> <C> <C>
Bank of the West
market share (%) 14.0% 15.0% 17.3% 18.2%
</TABLE>
<TABLE>
The following table indicates the mix and levels of Bank of the West
deposits at September 30, 1994 as compared to December 31, 1993 and
December 31, 1992:
<CAPTION>
DEPOSIT MIX
SEPTEMBER 30, DECEMBER 31, DECEMBER 31,
1994 1993 1992
----------------------- ------------------------ ------------------------
AMOUNT PERCENT AMOUNT PERCENT AMOUNT PERCENT
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
$100,000 or more $26,406 (20.3%) $25,816 (20.2%) $24,534 (21.1%)
Money market
deposit accounts
and less than $100,000 56,932 (43.8) 54,891 (42.9) 53,203 (45.9)
NOW accounts and ATS 18,415 (14.2) 16,728 (13.0) 13,557 (11.6)
Savings Accounts 6,909 (5.3) 7,280 (5.7) 5,632 (4.9)
Demand 21,219 (16.4) 23,268 (18.2) 19,114 (16.5)
----------------------- ------------------------ ------------------------
Total Deposits $129,881 $127,983 $116,040
======= ======= =======
</TABLE>
Normal growth patterns are reflected in the mix of deposits over the
past three years. The only significant item of note would be the movement
out of demand deposits (non-interest bearing) as depositors have determined
to keep their money working at some level of interest earnings rate.
63
<PAGE> 70
SHORT-TERM BORROWINGS
West Side had no short-term borrowings at September 30, 1994.
CAPITAL
The strength of its capital position determines the ability of a
financial institution to take advantage of growth opportunities and to
handle unforeseen financial difficulties. Bank of the West's shareholder's
equity at September 30, 1994 was $11,387,155, an increase of $173,983 over
December 31, 1993 figures. This increase would have been even more
significant considering the effect of $800,000 in dividends which were paid
in early 1994 to pay off a holding company debt and to pay shareholder
dividends of $1.00 per share, and the revised accounting requirement for
securities portfolio valuations.
Bank of the West 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 less intangible assets. The
guidelines include a definition of capital and provide a framework for
calculating weighted risk assets by assigning assets and off-balance-sheet
instruments to broad risk categories. The risk-based capital standards are
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
shareholders' equity less intangible assets). Total capital includes the
allowance for loan losses limited to a maximum of 1.25% of risk weighted
assets.
<TABLE>
As the following table indicates, Bank of the West exceeded the
minimum risk-based and leverage ratios at September 30, 1994 and
December 31, 1993:
<CAPTION>
September 30, December 31, Minimum
1994 1993 Levels
------------- ------------ -------
(Dollars in Thousands)
<S> <C> <C> <C>
Capital Components:
Tier 1 Capital $12,125 $11,213
Total Capital 13,312 12,467
Assets:
Risk Weighted Assets and Off-Balance
Sheet Instruments $107,229 $107,481
Capital Ratios:
Tier 1 Based Capital 11.31% 10.43% 4.00%
Total Risk Based Capital 12.41% 11.60% 8.00%
</TABLE>
64
<PAGE> 71
FOR THE YEARS ENDED DECEMBER 31, 1993, 1992 AND 1991
RESULTS OF OPERATIONS
Net income for Bank of the West 1993 was $2,135,267, or $7.07 per
share. This compared to Bank of the West's profits of $1,802,000 in 1992
and $1,031,000 in 1991, or $6.14 per share in 1992 and $3.52 per share in
1991.
The increases in 1992 and 1993 resulted from improved net interest
margins, lower loan losses, and improved non-interest income sources,
including the addition of the Bank's investment center and increased income
from the Bank's mortgage department.
<TABLE>
Net income as a percent of average assets and average equity for Bank
of the West was:
<CAPTION>
Return on Average Assets Return on Average Equity
------------------------ ------------------------
December 31, December 31,
------------ ------------
1993 1992 1991 1993 1992 1991
-----------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net Income 1.60% 1.50% 0.98% 21.3% 20.0% 11.5%
</TABLE>
The following is an analysis of the primary components of net income
for the years 1993, 1992, and 1991.
NET INTEREST INCOME
Net interest income is the principal source of Bank of the West's net
income and represents the difference between interest income and interest
expense. The following schedules provide a summary concerning net interest
income, average balances, and the related interest rate/yields for the past
three years:
65
<PAGE> 72
<TABLE>
<CAPTION>
BANK OF THE WEST
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 $71,668 52.37% $6,560 9.15%
Taxable Securities 207 0.15 20 9.66
Nontaxable Securities 44,983 32.87 2,495 5.55
Federal Funds Sold 9,838 7.19 296 3.01
-----------------------------------------------------------
Total interest earning assets $126,696 92.59% 9,371 7.40%
-----------------------------------------------------------
Noninterest bearing assets:
Cash and due from banks $5,999 4.38%
Premises and equipment 2,136 1.56
Other assets 3,356 2.45
Reserve for loan losses (1,346) (0.98)
------------------------------
Total assets $136,841 100.00%
==============================
Interest-bearing liabilities:
Now Accounts $15,121 11.05% $295 1.95%
Savings 6,715 4.91 178 2.65
Money market accounts 18,375 13.43 479 2.61
Time deposits 60,977 44.56 2,402 3.94
Short term borrowings 0 0.00 0 0.00
----------------------------------------------------------
Total interest-bearing liabilities $101,188 73.95% 3,354 3.31%
----------------------------------------------------------
Non-interest bearing liabilities:
Demand deposits $20,938 15.30%
Other liabilities 4,199 3.07
------------------------------
Total liabilities 126,325 92.32%
Stockholders' equity 10,516 7.68%
------------------------------
Total liabilities and stockholders' equity $136,841 100.00%
==============================
Net interest income $6,017
=============
Interest rate spread 4.09%
=====
Net interest margin 4.75%
=====
</TABLE>
66
<PAGE> 73
<TABLE>
<CAPTION>
BANK OF THE WEST
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 $68,014 54.79% $6,835 10.05%
Taxable Securities 500 0.40 48 9.60
Nontaxable Securities 38,150 30.73 2,775 7.27
Federal Funds Sold 7,766 6.26 268 3.45
-----------------------------------------------------------
Total interest earning assets $114,430 92.19% 9,926 8.67%
-----------------------------------------------------------
Noninterest bearing assets:
Cash and due from banks $5,419 4.37%
Premises and equipment 2,247 1.81
Other assets 3,309 2.67
Reserve for loan losses (1,276) (1.03)
-----------------------------
Total assets $124,129 100.00%
=============================
Interest-bearing liabilities:
Now Accounts $11,922 9.60% $330 2.77%
Savings 5,459 4.40 181 3.32
Money market accounts 17,566 14.15 533 3.03
Time deposits 61,214 49.31 2,866 4.68
Short term borrowings 54 0.04 2 3.70
-----------------------------------------------------------
Total interest-bearing liabilities $96,215 77.51% 3,912 4.07%
-----------------------------------------------------------
Non-interest bearing liabilities:
Demand deposits $16,668 14.26%
Other liabilities 1,676 1.43
-----------------------------
Total liabilities 114,559 92.29%
Stockholders' equity 9,570 7.71%
-----------------------------
Total liabilities and stockholders'
equity $124,129 100.00%
=============================
Net interest income $6,014
============
Interest rate spread 4.60%
=====
Net interest margin 5.26%
=====
</TABLE>
67
<PAGE> 74
<TABLE>
<CAPTION>
BANK OF THE WEST
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 $64,519 55.20% $7,204 11.17%
Taxable Securities 803 0.69 49 6.10
Nontaxable Securities 33,667 28.80 2,916 8.66
Federal Funds Sold 7,299 6.24 394 5.40
-----------------------------------------------------------
Total interest earning assets $106,288 92.93% 10,563 9.94%
-----------------------------------------------------------
Noninterest bearing assets:
Cash and due from banks $5,580 4.77%
Premises and equipment 2,370 2.03
Other assets 3,662 3.13
Reserve for loan losses (1,013) (0.87)
-----------------------------
Total assets $116,887 100.00%
=============================
Interest-bearing liabilities:
Now Accounts $10,407 8.90% $480 4.61%
Savings 3,786 3.24 212 5.60
Money market accounts 17,607 15.06 959 5.45
Time deposits 61,459 52.58 3,977 6.47
Short term borrowings 87 0.07 5 5.75
-----------------------------------------------------------
Total interest-bearing liabilities $93,346 79.86% 5,633 6.03%
-----------------------------------------------------------
Non-interest bearing liabilities:
Demand deposits $13,488 11.54%
Other liabilities 1,656 1.42
-----------------------------
Total liabilities 108,490 92.82%
Stockholders' equity 83,976 7.18%
-----------------------------
Total liabilities and stockholders'
equity $116,887 100.00%
=============================
Net interest income $4,930
==========
Interest rate spread 3.91%
=====
Net interest margin 4.64%
=====
</TABLE>
68
<PAGE> 75
FINANCIAL CONDITION
INVESTMENTS
Bank of the West'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 primarily of Federal Funds sold had outstanding balances at
December 31, 1993 of $7,550,000, as compared to $8,875,000 at year end 1992
and $6,650,000 in 1991. The reasonably stable level of these overnight
investments reflect management's comfort with holding approximately 5% of
assets available for liquidity needs.
Since 1991, the par value of total investment securities have grown
from $38,152,000 to $49,645,000 at 1993, reflecting both the facts that
bank deposits had grown $13,890,000 or 12.25% and that loan demand had
decreased over the period.
SECURITIES PORTFOLIO
<TABLE>
The following table presents the composition of investments and the
change in each category for the periods presented:
<CAPTION>
1993 1992 1991
--------- --------- --------
PERCENT PERCENT PERCENT
BOOK OF TOTAL BOOK OF TOTAL BOOK OF TOTAL
VALUE SECURITIES VALUE SECURITIES VALUE SECURITIES
--------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C>
U.S. Government $20,240 40.17% $4,011 10.46% $6,042 15.67%
U.S. Government
Agencies and
Corporations 5,108 10.14 7,731 20.16 12,531 32.51
Municipals and other
tax-exempt 1,450 2.88 2,792 7.28 4,001 10.38
Mortgage-backed
securities 23,588 46.81 21,726 56.65 15,470 40.13
Corporate bonds and
other (Federated
Government Fund) -- -- 2,089 5.45 505 1.31
--------------------------------------------------------------------------------
Total Securities $50,386 100.00% $38,349 100.00% $38,549 100.00%
================================================================================
</TABLE>
69
<PAGE> 76
The market value of total investment securities was $50,790,000,
$38,781,000 and $39,076,000 at December 31, 1993, 1992, and 1991,
respectively.
During the periods shown, funds provided from maturities and
prepayments allowed for significant repositioning to increase the overall
quality of the portfolio and increase the percentage held in direct U.S.
government obligation. Mortgage-backed securities that had been purchased
for asset liability management purposes were replaced with more predictable
short-term governments.
INVESTMENT SECURITIES - MATURITIES AND YIELDS
<TABLE>
The following table shows the maturities and yields for the various
forms of investment securities:
<CAPTION>
DECEMBER 31, 1993
MATURING
-------------------------------------------------------------------------------------
AFTER ONE
THROUGH AFTER FIVE
IN ONE YEAR OR LESS FIVE YEARS THROUGH TEN YEARS AFTER TEN YEARS
-------------------------------------------------------------------------------------
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
-------------------------------------------------------------------------------------
(Dollars in Thousands)
<S> <C> <C> <C>
U.S. Government $1,000 4.62% $19,240 4.56% $ -- --% $ -- --%
U.S. Government
agencies &
corporations -- -- 1,059 4.26 4,049 7.03 -- --
Municipals and
other tax exempt<F1> 856 12.98 434 11.63 160 10.38 -- --
Mortgage-backed
securities 2,064 5.73 11,709 7.93 2,433 5.63 7,382 4.38
-------------------------------------------------------------------------------------
Total Investment
Securities $3,920 7.03% $32,442 5.86% $6,642 5.14% $7,382 4.38%
=====================================================================================
<FN>
<F1> Yield presented on a tax-equivalent basis assuming a tax rate of 34%.
</TABLE>
By maturity, 7.8% of the portfolio will mature within one year
and 72% will mature within five years.
PROVISION FOR POSSIBLE LOAN LOSSES
The provision for possible loan losses provides a reserve (the
allowance for loan losses) against which loan losses are charged as those
losses become evident. Management determines the appropriate level of the
allowance for loan losses on a quarterly basis. These quarterly analyses
take into consideration the results of an ongoing loan review and grading
process, the purpose of which is to determine the level of credit risk
within the portfolio at any given time.
70
<PAGE> 77
Utilizing the results of the loan review and grading process,
a specific portion of the reserve is allocated to those loans which
appear to represent a more than normal exposure to risk. In
addition, estimates are made for potential losses within the
acceptably graded loan portfolios of consumer loans, residential
mortgage loans, commercial real estate loans, and commercial loans
not otherwise specifically reviewed, based on historical loss
experience and other factors and trends.
A provision for loan loss expense was last made in 1993 when
$60,000 was provided to the allowance for loan losses. Provisions
in 1991 and 1992 were $530,000 and $497,000 respectively.
Following are tables setting forth the activity for loan
losses and the allocation of the allowance for possible loan
losses, along with certain ratios for non-performing loans and
total loans in 1991, 1992, and 1993:
<TABLE>
ALLOWANCES FOR POSSIBLE LOAN LOSSES
<CAPTION>
Years Ended December 31,
1993 1992 1991
---- ---- ----
(Dollars in Thousands)
<S> <C> <C> <C>
Balance at beginning of period $1,339 $1,049 $954
Loans charged off:
Commercial & Financial 115 184 449
Residential Real Estate 12 54 45
Consumer 49 51 13
----------------------------------
Total charge offs 176 289 507
----------------------------------
Recoveries:
Commercial & Financial (29) (78) (65)
Residential Real Estate -- (2) (2)
Consumer (2) (2) (5)
----------------------------------
Total recoveries (31) (82) (72)
----------------------------------
Net loans charged off 145 207 435
Provision for possible loan losses
charged against income 60 497 530
----------------------------------
Balance at end of period $1,254 $1,339 $1,049
==================================
Net charge offs/average loans 0.19% 0.30% 0.65%
Loan reserve/total loans 1.78% 1.92% 1.55%
Loan reserve/non-performing loans 205% 121% 72%
</TABLE>
71
<PAGE> 78
Non-performing 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
Bank of the West since underlying collateral can be sold, and the
financial condition of the borrowers may improve.
NON-PERFORMING ASSETS
<TABLE>
The following table sets forth the detail of non-performing
assets:
<CAPTION>
December 31,
------------
1993 1992 1991
---- ---- ----
(Dollars in Thousands)
<S> <C> <C> <C>
Non-Accrual Loans $254 $1,054 $1,428
Loans Past Due 90 Days or More 356 49 21
---- ------ ------
Total 610 1,103 1,449
Foreclosed Assets 206 438 1,088
---- ------ ------
Total Non-Performing Assets $816 $1,541 $2,537
==== ====== ======
Non-Performing Loans/Loans .87% 1.58% 2.14%
Non-Performing Assets to Loans Plus Foreclosed Assets 1.16% 2.20% 3.68%
Non-Performing Assets/Total Assets .58% 1.22% 2.04%
</TABLE>
<TABLE>
The following table compares the allowance for loan losses and
the total nonperforming loans at December 31, 1993, 1992, and 1991:
<CAPTION>
December 31,
------------
1993 1992 1991
---- ---- ----
(Dollars in Thousands)
<S> <C> <C> <C>
Allowance for Loan Losses $1,254 $1,339 $1,049
Non-Performing Loans 610 1,103 1,449
Allowance as a Percentage of Non-Performing Loans 205.65% 121.4% 72.4%
</TABLE>
Management attributes the improvement in non-performing assets
to a much improved economy in our primary market, greater focus on
the credit review process, and close monitoring of potential
problem customers.
Based on Bank of the West's loan review process, historical
loan loss experience, and economic conditions, management believes
the allowance for possible loan losses at December 31, 1993 is
adequate to cover potential losses in the loan portfolio.
72
<PAGE> 79
DEPOSITS
The deposit base provides the major funding source for
interest earning assets for most banks. Bank of the West's
deposits have shown continuous growth since 1991 as shown in the
table below. It should be recognized that this growth has occurred
while the overall deposit level of other local banks has contracted
due primarily to the competitive attractiveness of other financial
products. Most of the growth in deposits has been in the form of
demand accounts, NOW accounts, and savings accounts. These are
areas that are less rate sensitive and that tend to be more stable
in volatile rate environments. Bank of the West's certificates of
deposit in excess of $100,000 have been very stable due to the fact
that these represent local area relationships. There are no
brokered deposits in the bank.
<TABLE>
<CAPTION>
BANK OF THE WEST
DEPOSIT PORTFOLIO
DECEMBER 31,
-----------------------------------------------------------------------------------
1993 1992 1991
-------- -------- --------
===================================================================================
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>
Noninterest bearing $23,268 n/a% 18.18% $19,114 n/a% 16.47% $16,282 n/a% 14.30%
NOW Accounts 16,728 1.81 13.07 13,557 2.51 11.68 10,940 4.39 9.61
Savings Accounts 7,280 2.34 5.69 5,632 3.04 4.85 4,617 4.59 4.05
Money Market
Deposit Accounts 18,494 2.59 14.45 16,946 3.15 14.60 18,185 5.27 15.97
Time Deposits:
Less than $100,000 36,397 3.83 28.44 36,257 4.75 31.25 39,508 6.23 34.70
$100,000 or more 25,816 3.91 20.17 24,534 4.67 21.14 24,336 6.23 21.37
-----------------------------------------------------------------------------------
Total Deposits $127,983 2.62% 100.00% $116,040 3.37% 100.00% $113,868 4.95% 100.00%
===================================================================================
</TABLE>
73
<PAGE> 80
NON-INTEREST INCOME
<TABLE>
The balance of earnings of a banking institution are typically
generated through non-interest 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
DECEMBER 31, 1993/1992 1992/1991
------------ --------- ---------
1993 1992 1991 Amount % Amount %
---- ---- ---- ------ --- ------ ---
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C> <C> <C>
Service Charges-
Deposit Accounts $ 828 $ 631 $ 556 $ 197 31.2% $ 75 13.5%
Mortgage Dept.
Fee Income 593 522 325 71 13.6 197 60.6
Trust Dept.
Fee Income 285 248 183 37 14.9 65 35.5
Investment Center
Fee Income 202 64 -0- 138 215.6 n/a n/a
All Other Fee &
Charge Income 312 350 357 (38) 10.8 (7) 1.9
--- --- --- ---- ---- --- ---
Total Fee Income $2,220 $1,815 $1,421 $ 405 22.3% $ 394 27.7%
===== ====== ====== ====== ===== ====== =====
Gain on Sale of
Land (53) (81) 1 n/a n/a n/a n/a
Securities Gains or
(Losses) (19) (216) (60) n/a n/a n/a n/a
---- ----- ---- --- --- --- ---
Total Non Interest
Income $2,148 $1,518 $1,362 $ 630 41.5% $ 156 11.4%
====== ====== ====== ====== ===== ====== =====
</TABLE>
Non-interest income expanded significantly since 1991,
primarily the result of higher service charges and more accounts in
the bank, as well as lower earning credit rates applied to account
balances, thereby increasing service charges per account.
Also of significance were the increases experienced in the
Mortgage Loan Department as lower interest rates promoted home
refinancings and new home construction and sales activity.
Bank of the West's trust department continued its steady
growth in both assets administered and in fee income. The addition
of the Bank's investment center in mid-1992 added considerably to
the non-interest income.
74
<PAGE> 81
All "other fees and income" are down from a high in 1991 of
$357,000. The primary reason for the decline was the ultimate
liquidation of several parcels of repossessed real estate that had
been leased or rented. In 1991 alone, income from ORE (Other Real
Estate) totalled $116,000. As those properties were sold, those
income sources were removed from the Bank's other income. Removing
this single source of income would then reflect that ordinary
income sources such as credit card fees, safe deposit box fees,
research fees, credit life commissions, etc. increased through this
same time period.
Overall, non-interest income increased significantly from 1991
through 1993: from $1,421,000 to over $2,220,000 notwithstanding
certain gains and losses on sale of assets. Management believes
this level of non-interest income to be significantly above peer
group averages for banks of this size and to represent attractive
sources of additional income to Bank of the West.
<TABLE>
OTHER EXPENSES
<CAPTION>
Year Ended Change
December 31, Percentage Percentage
------------------------------------- ------------- -------------
1993 1992 1991 1993/1992 1992/1992
(Dollars in Thousands)
<S> <C> <C> <C> <C> <C>
Compensation & Employee
Benefits $2,540 $2,202 $1,876 15.3% 17.4%
Occupancy & Equipment Expense 470 486 504 (3.3) (3.6)
All Other Operating Expenses 1,361 1,416 1,292 (3.9) 9.6
----- ----- ----- ----- ---
Total Non-Interest Expense $4,371 $4,104 $3,672 6.5% 11.8%
====== ====== ====== ==== =====
</TABLE>
Total non-interest expenses (overhead) for Bank of the West
over the three year period 1991, 1992, and 1993 when expressed as
a percentage of assets were 3.38%, 3.27%, and 3.15% respectively.
Although growth of the bank caused the cost of operating the bank
to increase, the overhead ratio was reduced.
Personnel expenses were the largest contributor to these
increases, the result of both normal salary and compensation
increases and growth in the number of personnel during this time
frame. Additionally, certain officer's compensation was tied to
bank performance levels, and as the bank's profitability increased
compensation expenses increased.
Equipment and occupancy expenses actually decreased during
this time frame (1991-1993) as certain depreciation expenses on
older equipment ran out. All other operating expenses showed a
decline from 1992 through 1993 as expenses related to holding
foreclosed real estate and other related expenses (taxes, legal,
etc.) declined as those properties were liquidated.
FDIC assessments, and other types of insurance related (non-
controllable) expenses, are included in the "all other expense"
category. During the time frame 1991 to 1992, FDIC costs alone
increased $44,000 (19.2%), and from 1992 to 1993 FDIC costs
actually decreased by $2,000. This decrease was the result of Bank
of the West being identified in the best risk category for FDIC
premium assessment purposes.
75
<PAGE> 82
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT OF WEST SIDE
<TABLE>
The following table sets forth, as of the record date for the
Special Meeting, the names and addresses of each beneficial owner
of more than five percent (5%) of West Side Common known to the
Board of Directors of West Side, showing the amount and nature of
such beneficial ownership and the names of each director and
executive officer of West Side who owns shares of West Side Common,
the number of shares of West Side Common owned beneficially by each
director and executive officer and the number of shares of West
Side 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 Merger, more than
one percent (1%) of the issued and outstanding shares of Boatmen's
Common.
<CAPTION>
SHARES OF WEST SIDE COMMON
NAME AND ADDRESS<F1> BENEFICIALLY OWNED PERCENT OF CLASS
- ---------------- ------------------ ----------------
<S> <C> <C>
Fred Ball 4,022 1.29%
Frank Caraway 68,325<F2> 21.85%
P.O. Box 982
San Angelo, Texas 76902
Richard Crisp 4,914 1.57%
Bettie C. Gassiot 4,200 1.34%
Ron Giddiens 11,310 3.62%
A. L. Herrington 4,500 1.44%
Baugh Lewis 4,023 1.29%
J.E. Loveless 4,771 1.53%
Joe L. McManus 13,039 4.17%
Sylvan Polunsky 3,100 <F*>
Jack Reichert 17,019<F3> 5.44%
P.O. Box 1591
San Angelo, Texas 76902
Frank W. Rose 2,690 <F*>
Stephen Salmon 39,398<F4> 12.60%
2601 Douglas Drive
San Angelo, Texas 76904
Lewis O. Seibert 5,636<F5> 1.80%
76
<PAGE> 83
<CAPTION>
SHARES OF WEST SIDE COMMON
NAME AND ADDRESS<F1> BENEFICIALLY OWNED PERCENT OF CLASS
- ---------------- ------------------ ----------------
<S> <C> <C>
Joe B. Terrill 21,210 6.79%
Directors and Executive Officers of 208,157 66.58%
West Side as a Group (36 persons)
<FN>
- ----------------------------------
<F*> Represents less than one percent (1%) of the issued and
outstanding shares of West Side Common.
<F1> Addresses are provided only with respect to each beneficial
owner of more than five percent (5%) of West Side Common known
to the Board of Directors of West Side.
<F2> Includes 18,519 shares owned by Frank Mills Caraway, 18,519 shares
owned by Michael James Caraway, and 18,519 shares owned by
Deborah Caraway Williams.
<F3> Includes 5,475 shares owned in the name of Joella B. Reichert,
2,500 shares owned by Lida Lea Young, 2,500 shares owned by
Jacqueline Young, and 2,500 shares owned by Janet Gardiner.
Mr. Reichert was a significant member of Bank of the West's
former control group.
<F4> Includes 9,167 shares owned by Richard Salmon, 888 shares
owned by Jennifer Salmon, 888 shares owned by Julie Salmon,
7,918 shares owned by Nancy Salmon James, 3,577 shares owned by
Nick and Nancy James, 888 shares owned by Richard S. James,
2,688 shares owned by Mary Catherine James, and 2,688 shares
owned by Nicki Susan James.
<F5> Includes 4,000 shares owned by Larry Seibert.
<F6> Includes 6,802 shares owned by Harold Gibbs, 2,090 shares
owned by Joel Craig Terrill, 2,090 shares owned by Tamara Lynn
Terrill, 2,090 shares owned by Michael Burton Terrill, 500
shares owned by Joel Ryan Terrill and 2,090 shares owned by
Dela Jean Gibbs Terrill.
</TABLE>
77
<PAGE> 84
LEGAL OPINION
The legality of the securities offered hereby will be passed
upon by Lewis, Rice & Fingersh, L.C. Members of Lewis, Rice &
Fingersh, L.C. and attorneys employed by them owned, directly or
indirectly, as of January 31, 1995, 72,394 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, 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 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 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 WEST SIDE
The consolidated financial statements of West Side at
December 31, 1993, 1992, 1991 and for the years then ended
appearing in this Proxy Statement/Prospectus and Registration
Statement have been audited
78
<PAGE> 85
by Oliver, Rainey & Wojtek, LLP, independent certified public accountants,
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 Oliver, Rainey & Wojtek LLP 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 have been received by
Boatmen's by November 11, 1994, in order to have been considered for
inclusion in the 1995 proxy statement. Shareholder proposals for
the 1996 annual meeting of Boatmen's must meet the requirements
established by the S.E.C. for shareholder proposals and must be
received by Boatmen's on a date to be determined and announced in
Boatmen's proxy statement for its 1995 annual meeting in order to
be considered for inclusion in the 1996 proxy statement.
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.
---------------
79
<PAGE> 86
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
December 31, 1993, 1992 and 1991
<PAGE> 87
FINANCIAL STATEMENTS
OF
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
----
<S> <C>
Independent Auditors' Report F-3
Consolidated Balance Sheet F-4
Consolidated Statement of Income F-6
Consolidated Statement of Cash Flows F-8
Consolidated Statements of Changes in Stockholders' Equity F-10
Notes to Financial Statements F-11
</TABLE>
F-2
<PAGE> 88
T. Richey Oliver, CPA OLIVER, RAINEY & WOJTEK, L.L.P.
Sharon M. Rainey, CPA A Registered Limited Liability Partnership
C. Gordon Rainey, CPA CERTIFIED PUBLIC ACCOUNTANTS
Jerry W. Wojtek, CPA 300 BANK OF THE WEST BUILDING
- ---------------------------- 2909 SHERWOOD WAY
Becky B. Bookter, CPA SAN ANGELO, TEXAS 76901
Jeffrey J. Bozeman, CPA (915) 942-6713
Karen M. Coates, CPA FAX (915) 944-9591 Members
Todd A. Engel, CPA Texas Society of CPA's
Jeffrey G. McCormick, CPA American Institute of CPA's
Richard D. Procter, CPA
INDEPENDENT AUDITORS' REPORT
Board of Directors
West Side Bancshares, Inc., West Side Delaware
Financial Corporation, Inc. and Bank of the West
San Angelo, Texas
We have audited the accompanying consolidated balance sheet of
West Side Bancshares, Inc., and Subsidiaries and the accompanying
balance sheets of West Side Bancshares, Inc., (Holding Company),
West Side Delaware Financial Corporation, Inc., (Intermediate
Holding Company) and Bank of the West as of December 31, 1993, and
the related statements of income, stockholders' equity, and cash
flows for the year then ended. These financial statements are the
responsibility of the Bank's 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 consolidated
financial position of West Side Bancshares, Inc. and Subsidiaries,
the financial position of West Side Bancshares, Inc., (Holding
Company), West Side Delaware Financial Corporation, Inc.
(Intermediate Holding Company) and Bank of the West as of
December 31, 1993, and the results of their operations and their
cash flows for the year then ended in conformity with generally
accepted accounting principles.
/s/ Oliver, Rainey & Wojtek, L.L.P.
San Angelo, Texas
February 1, 1994
F-3
<PAGE> 89
<TABLE>
<CAPTION>
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
September 30, December 31,
1994 1993 1992
------------------ ---------- -----------
(Unaudited)
(In Thousands)
<S> <C> <C> <C>
ASSETS
Cash and cash equivalents
Non-interest bearing deposits and cash $ 6,993 $ 8,904 $ 5,170
Federal funds sold 5,950 7,550 8,875
-------- -------- --------
Total cash and cash equivalents 12,943 16,454 14,045
-------- -------- --------
Investments securities (estimated market
value $53,631, $50,094 and $35,590 at
September 30, 1994, December 31, 1993 and
1992, respectively) 54,108 49,690 37,304
-------- -------- --------
FHLMC participation certificates -0- 696 1,045
-------- -------- --------
Loans
Commercial 22,262 20,186 22,525
Installment - net of unearned interest of 5,425 5,375 5,465
$414 at September 30, 1994, $590 and $789 at
December 31, 1993 and 1992, respectively
Real Estate 36,354 33,844 33,255
Student 5 1,272 1,389
Mortgage 5,259 6,513 5,591
Single pay consumer 2,200 2,065 1,987
Overdrafts 49 479 85
Industrial Revenue Bonds -0- -0- 290
-------- -------- --------
71,554 69,734 70,587
Less allowance for possible loan losses (1,187) (1,254) (1,339)
-------- -------- --------
Net Loans 70,367 68,480 69,248
-------- -------- --------
Premises and equipment, net 2,102 2,136 2,179
Accrued interest receivable 1,319 1,149 1,139
Other real estate owned 183 206 438
Other assets 1,086 761 869
-------- -------- --------
Total assets $142,108 $139,572 $126,267
======== ======== ========
See accompanying notes.
F-4
<PAGE> 90
<CAPTION>
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Continued)
September 30, December 31,
1994 1993 1992
------------------ ---------- -----------
(Unaudited)
(In Thousands)
<S> <C> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Demand and other non-interest bearing $ 22,152 $ 23,802 $ 18,750
NOW accounts 16,889 15,542 13,194
Savings and money market investment accounts 27,045 26,091 22,918
Time - $100 and over 26,406 25,816 24,309
Other time 37,118 36,399 36,484
-------- -------- --------
Total deposits 129,610 127,650 115,655
-------- -------- --------
Accrued interest, taxes and expenses 963 554 634
Other borrowed funds -0- 500 1,000
-------- -------- --------
Total liabilities 130,573 128,704 117,289
-------- -------- --------
Stockholder's equity
Common stock, 500,000 shares authorized,
par value $1.00; 458,000 shares issued and
outstanding at September 30, 1994 and
December 31, 1993; 450,000 shares issued
and outstanding December 31, 1992 458 458 450
Capital Surplus 10,040 10,040 9,978
Retained earnings 6,371 4,966 3,154
Reserve for equity losses -0- -0- (8)
Reserve for AFS gains/losses (738) -0- -0-
-------- -------- --------
16,131 15,464 13,574
Less treasury stock, at cost - 156,563 shares (4,596) (4,596) (4,596)
-------- -------- --------
Total Stockholders' equity 11,535 10,868 8,978
-------- -------- --------
Total Liabilities and Stockholders' Equity $142,108 $139,572 $126,267
======== ======== ========
See accompanying notes.
</TABLE>
F-5
<PAGE> 91
<TABLE>
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
Nine Months ended
September 30, Year ended December 31,
1994 1993 1993 1992 1991
------ ------ ------ ------ ------
(Unaudited) (Unaudited)
(In Thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Interest Income:
Loans, including fees $ 4,691 $ 4,733 $ 6,256 $ 6,523 $ 6,953
Other investments 177 224 399 401 597
Investment securities 2,159 1,904 2,436 2,623 2,851
------ ------ ------ ------ ------
Total interest income 7,027 6,861 9,091 9,556 10,401
------ ------ ------ ------ ------
Interest expense:
Deposits 2,596 2,522 3,354 3,910 5,628
Federal funds purchased -0- -0- -0- -0- 5
Other interest -0- 77 84 90 153
------ ------ ------ ------ ------
Total interest expense 2,596 2,599 3,438 4,000 5,786
------ ------ ------ ------ ------
Net interest income 4,431 4,262 5,653 5,556 4,615
Provision for possible loan losses -0- (60) (60) (497) (530)
------ ------ ------ ------ ------
Net interest income after
provision for possible loan
losses 4,431 4,202 5,593 5,059 4,085
------ ------ ------ ------ ------
Other Income:
Service charges 622 600 845 649 575
Gains (Loss) on sale of
investment securities -0- -0- (19) (116) (221)
Trust fees 222 225 285 248 183
Origination and servicing fees 367 445 600 524 327
Other operating income 281 234 394 242 179
------ ------ ------ ------ ------
Total other income 1,492 1,504 2,105 1,547 1,043
------ ------ ------ ------ ------
Other expenses:
Compensation and benefits 1,764 1,663 2,540 2,201 1,876
Occupancy expense 238 219 360 266 266
Other operating expenses 1,333 1,234 1,487 1,658 1,536
------ ------ ------ ------ ------
Total other expenses 3,335 3,116 4,387 4,125 3,678
------ ------ ------ ------ ------
See accompanying notes.
F-6
<PAGE> 92
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Continued)
<CAPTION>
Nine Months ended
September 30, Year ended December 31,
1994 1993 1993 1992 1991
------ ------ ------ ------ ------
(Unaudited) (Unaudited)
(In Thousands, except per share amounts)
<S> <C> <C> <C> <C> <C>
Income before taxes and change
in accounting principle $ 2,588 $ 2,590 $ 3,311 $ 2,481 $ 1,450
Income taxes (882) (937) (1,072) (679) (418)
------ ------ ------ ------ ------
Income before cumulative effect
of change in accounting
principle 1,706 1,653 2,239 1,802 1,032
Cumulative effect of change in
accounting principle -0- -0- (104) -0- -0-
------ ------ ------ ------ ------
Net income $ 1,706 $ 1,653 $ 2,135 $ 1,802 $ 1,032
====== ====== ====== ====== ======
Earnings per share:
Income before cumulative
effect of change in accounting
principle 5.66 5.63 7.42 6.14 3.52
Cumulative effect of change in
accounting principle -0- -0- (.35) -0- -0-
------ ------ ------ ------ ------
Net income 5.66 5.63 7.07 6.14 3.52
==== ==== ==== ==== ====
See accompanying notes.
</TABLE>
F-7
<PAGE> 93
<TABLE>
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
<CAPTION>
Nine Months ended
September 30, Year ended December 31,
1994 1993 1993 1992 1991
-------- -------- -------- -------- --------
(Unaudited) (Unaudited)
(In Thousands)
<S> <C> <C> <C> <C> <C>
OPERATING ACTIVITIES
Net income $ 1,706 $ 1,653 $ 2,135 $ 1,802 $ 1,032
Adjustments to reconcile
net income to cash provided by
operating activities:
Depreciation and amortization 164 186 221 241 266
Provision for possible loan losses -0- 60 60 497 530
(Gain) Loss on sale of investment
securities -0- 2 19 116 221
(Gain) Loss on sale of other real
estate 4 37 53 -0- -0-
Loss on sale of premises -0- -0- -0- -0- 1
Net amortization (accretion) of
premium and discount on
investment securities 109 148 254 186 66
Decrease (Increase) in accrued
interest receivable (170) (115) (10) 64 287
Decrease (Increase) in other
assets (383) 88 343 (138) 49
Increase (Decrease) in accrued
and other liabilities 409 346 (257) (551) 157
------- -------- -------- ------- --------
Net cash provided by operating
activities 1,839 2,405 2,818 2,217 2,609
------- -------- -------- ------- --------
INVESTING ACTIVITIES
Purchases of investment securities (5,265) (26,323) (36,655) (8,238) (9,312)
Proceeds from sales of investment
securities -0- 19,335 24,003 7,931 3,660
Net decrease in Federal funds sold 1,600 (1,450) 1,325 (2,225) (2,150)
Net decrease (increase) in loans (1,911) (99) 143 (2,035) (6,085)
Capital expenditures (129) (205) (240) (115) (188)
Net proceeds from sales of premises -0- 2 2 -0- -0-
Proceeds from sale or other real
estate and repossessions 100 405 571 520 351
Net change in FHLMC participation
certificates 696 196 348 197 152
------- -------- -------- ------- --------
Net cash used in investing activities (4,909) (8,139) (10,503) (3,965) (13,572)
------- -------- -------- ------- --------
See accompanying notes.
F-8
<PAGE> 94
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOW
(Continued)
<CAPTION>
Nine Months ended
September 30, Year ended December 31,
1994 1993 1993 1992 1991
-------- -------- -------- -------- --------
(Unaudited) (Unaudited)
(In Thousands)
<S> <C> <C> <C> <C> <C>
FINANCING ACTIVITIES
Increase in deposits $ 1,960 $ 7,425 $ 11,996 $ 1,832 $ 11,501
Exercise of stock options -0- -0- 70 -0- -0-
Payment of other borrowed funds (500) (500) (500) (750) (500)
Dividends paid (301) (147) (147) -0- -0-
Decrease in Federal funds purchased -0- -0- -0- (200) (300)
------- -------- -------- ------- --------
Net cash provided by financing
activities 1,159 6,778 11,419 882 10,701
------- -------- -------- ------- --------
Net increase (decrease) in cash and
cash equivalents (1,911) 1,044 3,734 (866) (262)
Cash and cash equivalents,
beginning of period 8,904 5,170 5,170 6,036 6,298
------- -------- -------- ------- --------
Cash and cash equivalents,
end of period $ 6,993 $ 6,214 $ 8,904 $ 5,170 $ 6,036
======= ======== ======== ======= ========
Transfer of loans to real
estate owned $ 39 $ 637 $ 698 $ 229 $ 118
Interest paid 2,597 2,620 3,466 4,199 5,922
Income taxes paid 737 392 989 -0- -0-
Income taxes received -0- -0- -0- 54 54
See accompanying notes.
</TABLE>
F-9
<PAGE> 95
<TABLE>
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(In Thousands)
<CAPTION>
AFS
Common Capital Treasury Equity Security Retained
Stock Surplus Stock Reserve Reserve Earnings
--------- ---------- ----------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance December 31, 1990 $ 450 $ 2,326 $ (4,596) $ -0- $ -0- $ 7,922
Net Income
--------- ---------- ----------- ---------- --------- ---------
Balance December 31, 1991 450 2,326 (4,596) -0- -0- 8,954
Net Income 1,802
Prior period adjustment 50
Unrealized loss in mutual funds (8,247)
Investment in West Side Delaware
Financial Corporation, Inc. 7,652 (7,652)
--------- ---------- ----------- ---------- --------- ---------
Balance December 31, 1992 450 9,978 (4,596) (8,247) -0- 3,154
Net Income 2,135
Dividends paid (147)
Prior period adjustment (176)
Unrealized loss in mutual funds (10,954)
Redemption of mutual funds 19,201
Exercise of incentive stock option 8 62
--------- ---------- ----------- ---------- --------- ---------
Balance December 31, 1993 458 10,040 (4,596) -0- -0- 4,966
Net income (unaudited) 1,706
Dividends paid (unaudited) (301)
Unrealized loss in AFS Securities
(unaudited) (738)
--------- ---------- ----------- --------- --------- ---------
Balance September 30, 1994
(unaudited) $ 458 $ 10,040 $(4,596) $ -0- $ (738) $ 6,371
======== ========= =========== ========= ========= =========
See accompanying notes.
</TABLE>
F-10
<PAGE> 96
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS EXPRESSED IN THOUSANDS, EXCEPT SHARE AMOUNTS)
Note 1 - Significant Accounting Policies
-------------------------------
The accounting and reporting policies of West Side
Bancshares, Inc. (Holding Company) and Subsidiaries,
Westside Delaware Financial Corporation, Inc., and Bank
of the West, conform to generally accepted accounting
principles and prevailing practices within the banking
industry. The assets and liabilities are carried
principally on the historical cost basis utilizing the
accrual basis of accounting.
Consolidation
-------------
Each of the consolidated financial statements presented
includes the accounts of West Side Bancshares, Inc., and
Subsidiaries, Westside Delaware Financial Corporation,
Inc., and Bank of the West. All significant intercompany
accounts and transactions have been eliminated upon
consolidation.
Investment Securities
---------------------
Investment securities are those securities which the Bank
has the ability and intent to hold to maturity. These
securities are stated at cost adjusted for amortization
of premium and accretion of discount, computed by the
interest method. Generally, such securities are sold
only to meet liquidity needs. Gains and losses on the
sale of investment securities are computed on the basis
of specific identification of the adjusted cost of each
security. The Bank had no trading account securities.
(Also see Note 3.)
Loans
-----
Loans are stated at the amount of the unpaid principal,
reduced by unearned discount and an allowance for loan
losses. Interest on installment loans is recorded as
income on scheduled payment dates by use of the rule of
78's which approximates the interest method. Interest on
commercial and real estate loans is recognized on the
principal amount outstanding.
Loans on which the accrual of interest has been
discontinued are designated as non accrual loans.
Accrual of interest on loans is discontinued when
reasonable doubt exists as to the full, timely collection
of interest or principal. When a loan is placed on
nonaccrual status, all interest previously accrued but
not collected is reversed against current period interest
income. Income on such loans is then recognized only to
the extent that the cash is received and where the future
collection of principal is probable. Interest accruals
are resumed on such loans only when they are brought
fully current with respect to interest and principal and
when, in the judgment of management, the loans are
estimated to be fully collectible as to both principal
and interest. (Also see Note 7.)
F-11
<PAGE> 97
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS EXPRESSED IN THOUSANDS, EXCEPT SHARE AMOUNTS)
Note 1 - Significant Accounting Policies - Continued
-------------------------------------------
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 principal
is unlikely. The allowance is an amount that management
believes will be adequate to absorb possible losses on
existing loans that may become uncollectible, based on
evaluation of the collectibility of loans and prior 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 that may
affect the borrower's ability to pay.
Other Real Estate
-----------------
Real estate acquired by foreclosure is carried in other
assets at the lower of the recorded investment in the
property or its fair value. Prior to foreclosure, the
value of the underlying loan is written down to the fair
market value of the real estate to be acquired by a
charge to the loan allowance for loan losses, if
necessary. Any subsequent write-downs are charged
against operating expenses. Operating expense of such
properties, net of related income, are included in other
expenses. Losses on their disposition are included in
other expenses.
Statement of Cash Flows
-----------------------
For purposes of reporting cash flows, cash and cash
equivalents include cash and due from banks.
Fixed Assets
------------
Fixed assets are stated at cost less accumulated
depreciation computed on the straight-line and
accelerated methods over the estimated useful lives of
assets. Accelerated methods are used for certain classes
of fixed assets for federal income tax purposes: thus, a
deferred tax liability is created as discussed in Note 6.
Income Taxes
------------
Provisions for income taxes are based on amounts reported
in the statements of income (after exclusion of non-
taxable income such as interest on state and municipal
securities) and include deferred taxes on temporary
differences in the recognition of income and expense for
tax and financial statement purposes. Deferred taxes are
computed on the liability method as prescribed in SFAS
109, "Accounting for Income Taxes." (Also see Note 15.)
F-12
<PAGE> 98
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS EXPRESSED IN THOUSANDS, EXCEPT SHARE AMOUNTS)
Note 1 - Significant Accounting Policies - Continued
-------------------------------------------
Off-Balance-Sheet Financial Instruments
---------------------------------------
In the ordinary course of business the Bank has entered
into off-balance-sheet financial instruments consisting
of commitments to extend credit, commercial letters of
credit, standby letters of credit and mortgages loans
sold on the secondary market with recourse. Such
financial instruments are recorded in the financial
statements when they become payable. (Also see Note 15.)
Note 2 - Holding Company and Intermediate Holding Company
------------------------------------------------
Effective December 31, 1980, West Side Bancshares, Inc.
acquired 100% of the outstanding shares of Bank of the
West. Bank of the West shareholders were issued West
Side Bancshares, Inc. stock on a one-for-one basis.
Effective September 16, 1992, West Side Bancshares, Inc.
acquired 100% of the outstanding shares of Westside
Delaware Financial Corporation, Inc. by exchanging 100%
of the outstanding shares of Bank of the West.
Note 3 - Investment Securities
---------------------
Presented below is a summary of the carrying amounts and
approximate market values of
investment securities at December 31, 1993.
<TABLE>
<CAPTION>
Carrying Unrealized Unrealized Market
Amount Gains Losses Value
-------- ---------- ---------- ------
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 20,240 $ 102 $ 10 $ 20,332
U.S. Government agencies 28,000 334 83 28,251
Obligations of state and
political subdivisions 1,450 61 -0- 1,511
---------- --------- --------- ----------
Total $ 49,690 $ 497 $ 93 $ 50,094
========== ========= ========= ==========
</TABLE>
The carrying amounts and approximate market values of
investment securities at December 31, 1993, by contractual
maturity, are shown below. Expected maturities will differ
from contractual maturities because borrowers may have the
right to call or prepay obligations with or without call or
prepayment penalties.
F-13
<PAGE> 99
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS EXPRESSED IN THOUSANDS, EXCEPT SHARE AMOUNTS)
Note 3 - Investment Securities - Continued
---------------------------------
<TABLE>
<CAPTION>
Carrying Market
Amount Value
----------- -----------
<S> <C> <C>
Due in one year or less $ 2,048 $ 2,067
Due after one year through five years 20,733 20,831
Due after five years through ten years 4,209 4,330
Due after ten years -0- -0-
Mortgage-backed securities 22,700 22,867
----------- -----------
Total $ 49,690 $ 50,095
=========== ===========
</TABLE>
Gross losses of $19 were realized on sales of investment
securities in 1993.
At December 31, 1993, securities with a book value of
$46,477 and a market value of $6,590 were pledged to secure
various deposits.
Presented below is a summary of the carrying amount and
approximate market values of investment securities at
December 31, 1992. (The schedule does not include the
original cost and the estimated market value of equity
securities in the amount of $2,089 and $2,098,
respectively).
<TABLE>
<CAPTION>
Carrying Unrealized Unrealized Market
Amount Gains Losses Value
----------- -------------- -------------- ------------
<S> <C> <C> <C> <C>
U.S. Treasury securities $ 4,011 $ 39 $ 22 $ 4,028
U.S. Government agencies 28,074 365 138 28,301
Obligations of state and
political subdivisions 2,791 126 -0- 2,918
Corporate bonds 339 5 -0- 343
----------- -------------- -------------- ------------
Total $ 35,215 $ 535 $ 160 $ 35,590
=========== ============== ============== ============
</TABLE>
The carrying amount and approximate market values of
investment securities at December 31, 1992, by contractual
maturity, are shown below. Expected maturities will differ
from contractual maturities because borrowers may have the
right to call or prepay obligations with or without call of
prepayment penalties.
F-14
<PAGE> 100
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS EXPRESSED IN THOUSANDS, EXCEPT SHARE AMOUNTS)
Note 3 - Investment Securities - Continued
---------------------------------
<TABLE>
<CAPTION>
Carrying Market
Amount Value
------------ ----------
<S> <C> <C>
Due in one year or less $ 4,684 $ 4,728
Due after one year through five years 2,230 2,284
Due after five years through ten years 4,306 4,268
Due after ten years 993 993
Mortgage-backed securities 23,038 23,317
------------ ----------
Total $ 35,215 $ 35,590
============ ==========
</TABLE>
Gross gains of $9 and gross losses of $125 were realized on
sales of investment securities in 1992.
At October 31, 1992, securities with a book value of $5,378
and a market value of $5,606 were pledged to secure various
deposits.
Note 4 - Fixed Assets
------------
<TABLE>
Fixed assets by classification and the related
accumulated depreciation are summarized as follows:
<CAPTION>
Accumulated Book
1993 Description Cost Depreciation Value
---------------- ---------- ---------------- ----------
<S> <C> <C> <C>
Land $ 621 $ -0- $ 621
Buildings 2,538 1,299 1,233
Furniture and Fixtures 2,028 1,794 234
Automobiles 83 35 48
---------- ---------------- ----------
$ 5,264 $ 3,128 $ 2,136
========== ================ ==========
</TABLE>
F-15
<PAGE> 101
Note 4 - Fixed Assets - Continued
------------------------
Depreciation expense amounted to $220 in 1993.
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS EXPRESSED IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<TABLE>
<CAPTION>
Accumulated Book
1992 Description Cost Depreciation Value
---------------- ---------- ---------------- ----------
<S> <C> <C> <C>
Land $ 621 $ -0- $ 621
Buildings 2,474 1,189 1,285
Furniture and Fixtures 1,924 1,699 226
Automobiles 76 29 47
---------- ---------------- ----------
$ 5,095 $ 2,917 $ 2,179
========== ================ ==========
</TABLE>
Depreciation expense amounted to $241 in 1992.
Note 5 - Profit Sharing Plan
-------------------
The Bank maintains a profit sharing plan that covers
substantially all of its full-time employees. The Bank's
Board of Directors annually determines the amount of the
Bank's contribution in accordance with the terms of the
plan. The contribution for 1993, 1992 and 1991 amounted
to $133, $120, and $114, respectively.
The Bank also maintains a Thrift plan. This plan allows
employees to make elective voluntary contributions based
on a percentage of their compensation. In accordance
with the terms of the plan, the Bank then matches the
employees' contribution. The Bank's contribution for
1993, 1992 and 1991 amounted to $56, $51, and $46,
respectively.
Note 6 - Federal Income Tax
------------------
Applicable consolidated income taxes for financial
reporting purposes differ from the amount computed by
applying the statutory federal income tax rate for the
reasons noted in the table below:
F-16
<PAGE> 102
<TABLE>
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS EXPRESSED IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<CAPTION>
1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Tax at statutory federal income tax rate $ 1,126 $ 843 $ 493
Increases (decreases) in taxes resulting from:
Disallowed interest expense to carry tax-
exempt securities 3 7 17
Deferred directors' fees 14 11 12
Nondeductible write downs of other real estate owned 12 66 43
Nondeductible meals and entertainment 1 1 1
Interest on non-accrual loans 18 -0- -0-
Non-deductible penalties 1 -0- -0-
Tax-exempt interest income (60) (88) (131)
Cash value of directors life insurance (5) -0- (3)
Depreciation (26) (13) (14)
Provision for loan losses (29) 99 31
Additional basis in other real estate sold (47) (120) -0-
-------- -------- --------
Current federal income tax expense $ 1,008 $ 806 $ 449
======== ======== ========
</TABLE>
The components of deferred income taxes are principally
related to the allowance for loan losses, depreciation and
write downs of other real estate to market.
Note 7 - Loans and Allowance for Loan Losses
-----------------------------------
Loans on which the accrual of interest has been
discontinued or reduced amounted to $254, $1,054 and
$1,428 at December 31, 1993, 1992, and 1991,
respectively. If interest on those loans had been
accrued, such income would have approximated $20 for
1993, $85 for 1992, and $58 for 1991.
Note 7 - Loans and Allowance for Loan Losses - Continued
-----------------------------------
A summary of transactions in the allowance for loan
losses is as follows:
F-17
<PAGE> 103
<TABLE>
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS EXPRESSED IN THOUSANDS, EXCEPT SHARE AMOUNTS)
<CAPTION>
1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Balance - January 1 $ 1,339 $ 1,049 $ 954
Recoveries 31 82 71
Provision for loan losses 60 497 530
Actual charge-offs (176) (289) (506)
-------- -------- --------
Balance - December 31, $ 1,254 $ 1,339 $ 1,049
======== ======== ========
</TABLE>
Note 8 - Occupancy Expense
-----------------
<TABLE>
Occupancy expense consists of the following:
<CAPTION>
1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Insurance $ 15 $ 14 $ 13
Depreciation 204 120 112
Taxes 53 50 66
Repairs, maintenance and supplies 19 15 15
Contract services and supplies 41 41 37
Utilities 82 80 78
-------- -------- --------
Total 414 320 321
Less rents received 54 54 55
-------- -------- --------
Net occupancy expense $ 360 $ 266 $ 266
======== ======== ========
</TABLE>
Note 9 - Contingencies
-------------
In the normal course of business, there are outstanding
various contingent liabilities in the form of letters of
credit, which are not reflected in the accompanying
financial statements. The Bank issued letters of credit
in the amount of $1,225, $710 and $965 at December 31,
1993, 1992, and 1991, respectively, which are not
included in the financial statements. Management of the
Bank does not anticipate material losses as a result of
these transactions.
Note 10 - Related Party Transactions
--------------------------
In the ordinary course of business, the Bank makes loans
to its directors and their associates and several of its
officers on substantially the same terms, including
interest rates and collateral, as those prevailing for
comparable transactions with other customers. Loans
outstanding, both direct and indirect, to directors and
officers of the Bank totaled $2,086, $2,456 and $2,129 at
December 31, 1993, 1992, and 1991, respectively.
F-18
<PAGE> 104
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS EXPRESSED IN THOUSANDS, EXCEPT SHARE AMOUNTS)
Note 11 - Deferred Compensation
---------------------
The Bank has established deferred compensation plans
through the use of key-man life insurance for key
directors and officers which provide for payment upon
retirement, death, or disability.
Note 12 - Treasury Stock
--------------
In 1985, West Side Bancshares, Inc. repurchased 256,563
shares of common stock at a cost of $7,532. This stock
was placed into treasury utilizing the cost method of
accounting in accordance with generally accepted
accounting principles. Of the total number of shares
repurchased, 100,000 shares were offered to existing
shareholders at $22.50 per share on a subscription basis.
All of the subscriptions were exercised during 1985.
<TABLE>
Note 13 - Borrowed Funds
--------------
The following notes were incurred in connection with the
repurchase of the 256,563 shares of common stock
mentioned in Note 12.
<CAPTION>
December 31,
Description 1993 1992 1991
----------- -------- -------- --------
<S> <C> <C> <C>
Payable to Frank Caraway: $1,750,000
at Nations Bank of Texas, N.A. prime
rate less 1/2 of 1% rate of interest;
secured by all shares of capital stock of
Westside Delaware Financial
Corporation, Inc.
Date of Note: March 31, 1991
Maturity Date: March 31, 1997 $ 500 $ 1,000 $ 1,750
======== ======== ========
</TABLE>
<TABLE>
Note 13 - Borrowed Funds - Continued
--------------------------
Maturities on the note at December 31, 1993 are as
follows:
<CAPTION>
<S> <C>
March 31, 1996 $ 97
March 31, 1997 403
----
Total $500
====
</TABLE>
F-19
<PAGE> 105
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS EXPRESSED IN THOUSANDS, EXCEPT SHARE AMOUNTS)
The note originated with Republic Bank, Texas in April,
1985 with an original amount of $5,000. On October 31,
1990, board member Frank Caraway purchased the note from
Republic Bank's successor, NationsBank of Texas. The
transaction was approved by the Federal Reserve.
Note 14 - Participation Certificates
--------------------------
Federal Home Loan Mortgage participation certificates
represent an undivided interest in groups of
conventional residential mortgages in which both
principal and interest are guaranteed by the FHLMC.
Note 15 - Financial Instruments With Off-Balance-Sheet Risk
-------------------------------------------------
Bank of the West is a party to financial instruments
with off-balance-sheet risk: i.e., standby letters of
credit, and unused lines of credit, in the normal course
of business to meet the financing needs of its
customers. Those instruments involve, to varying
degrees, elements of credit risk in excess of the amount
recognized in the balance sheet. The contract or
notional amounts of those instruments reflect the extent
of involvement the Bank has in particular classes of
financial instruments.
The Bank's exposure to credit loss in the event of
nonperformance by the other party to the financial
instrument for standby letters of credit and commitments
to extend credit is represented by the contractual
notional amount of those instruments. The Bank uses the
same credit policies in making commitments and
conditional obligations as it does for on-balance-sheet
instruments.
<TABLE>
Note 15 - Financial Instruments With Off-Balance-Sheet Risk - Continued
-------------------------------------------------------------
The amounts of commitments at December 31, 1993, 1992
and 1991 are summarized as follows:
<CAPTION>
1993 1992 1991
-------- -------- --------
<S> <C> <C> <C>
Unused lines of credit - real estate
and commercial loans $ 9,603 $ 5,199 $ 920
Standby letters of credit 1,225 710 965
Mortgage loans sold in the secondary
market with recourse 1,639 -0- -0-
-------- -------- --------
Total $12,467 $ 5,909 $ 1,885
======== ======== ========
</TABLE>
F-20
<PAGE> 106
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS EXPRESSED IN THOUSANDS, EXCEPT SHARE AMOUNTS)
Unused lines of credit are agreements 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 and may require payment of a fee.
Since many of the commitments are expected to expire
without being drawn upon, the total commitment amounts
do not necessarily represent future cash requirements.
The Bank evaluates each customer's creditworthiness on
a case-by-case basis. The amount of the collateral
obtained, if deemed necessary by the Bank upon extension
of credit, is based on management's credit evaluation of
the counterparties. Collateral held varies but may
include accounts receivable, inventory, property, plant,
and equipment, and income-producing commercial
properties.
Standby letters of credit are conditional commitments
issued by the Bank to guarantee the performance of a
customer to a third party. Those guarantees are
primarily issued to support public and private borrowing
arrangements, including commercial paper, bond
financing, and similar transactions. The credit risk
involved in issuing letters of credit is essentially the
same as that involved in extending loan facilities to
customers.
The Bank holds various items as collateral supporting
those commitments for which collateral is deemed
necessary; e.g., certificates of deposit, notes,
automobiles, inventory, and equipment. In each of these
commitments, the letter of credit is 100%
collateralized.
Note 16 - Significant Group Concentrations of Credit Risk
-----------------------------------------------
Bank of the West grants agribusiness, commercial ,
consumer, and residential loans to customers principally
in the West Texas area. Although the Bank has a
diversified loan portfolio, a substantial portion of its
debtors' ability to honor their contracts is dependent
upon the agribusiness economic sector.
Note 17 - Stock Options
-------------
On December 16, 1983, an incentive stock option plan was
adopted by the Board of Directors. The Plan allowed for
the issuance of 50,000 shares over a ten year period,
with the option price equal to the market value at the
date on which the options are granted. Under the plan,
40,500 shares have been granted prior to December 31,
1993. The options must be exercised within ten years
from the date of the grant. During the year ended
December 31, 1993, options were exercised for the
issuance of 8,400 shares at the option price of $8.36
per share.
F-21
<PAGE> 107
WEST SIDE BANCSHARES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS - CONTINUED
DECEMBER 31, 1993, 1992 AND 1991
(DOLLARS EXPRESSED IN THOUSANDS, EXCEPT SHARE AMOUNTS)
Note 18 - Regulatory Matters
------------------
The Bank, as a state bank, is subject to the dividend
restrictions set forth by the Texas Banking Code. Since
the Bank maintains "certified surplus" (as defined) in
excess of "capital" (as defined), there are currently no
dividend restrictions requiring approval of the State of
Texas Banking Commissioner.
Note 19 - Prior Period Adjustment
-----------------------
The prior period adjustments represent a refund of 1988,
1989, and 1990 federal income taxes as a result of the
filing of amended Form 1120's, Corporation Federal
Income Tax Returns and an assessment by the Internal
Revenue Service for additional taxes due of 1989 federal
income taxes.
Note 20 - Change in Accounting Principle
------------------------------
Effective January 1, 1993, West Side Bancshares, Inc.
adopted Statement of Financial Accounting Standards
No. 109, Accounting for Income Taxes. The cumulative
effect of the change in accounting principle is included
in determining net income for 1993. Financial
statements for prior years have not been restated.
F-22
<PAGE> 108
APPENDIX A
===============================================================================
AGREEMENT AND PLAN OF MERGER
by and among
WEST SIDE BANCSHARES, INC.
a Texas corporation
and
BOATMEN'S BANCSHARES, INC.
a Missouri corporation
and
BOATMEN'S TEXAS, INC.
a Missouri corporation
Dated November 14, 1994
===============================================================================
<PAGE> 109
<TABLE>
TABLE OF CONTENTS
<CAPTION>
Page
----
<S> <C>
ARTICLE ONE - TERMS OF THE MERGER & CLOSING . . . . . . . . . . . . . . . . . . . . . . . . . .A-1
Section 1.01. The Merger. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-1
Section 1.02. Merging Corporation . . . . . . . . . . . . . . . . . . . . . . . . .A-1
Section 1.03. Surviving Corporation . . . . . . . . . . . . . . . . . . . . . . . .A-1
Section 1.04. Effect of the Merger. . . . . . . . . . . . . . . . . . . . . . . . .A-1
Section 1.05. Conversion of Shares. . . . . . . . . . . . . . . . . . . . . . . . .A-1
Section 1.06. The Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-2
Section 1.07. Exchange Procedures; Surrender of
Certificates. . . . . . . . . . . . . . . . . . . . . . . . . . . .A-2
Section 1.08. Closing Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-3
Section 1.09. Actions At Closing. . . . . . . . . . . . . . . . . . . . . . . . . .A-3
ARTICLE TWO - REPRESENTATIONS OF WEST SIDE. . . . . . . . . . . . . . . . . . . . . . . . . . .A-4
Section 2.01. Organization and Capital Stock. . . . . . . . . . . . . . . . . . . .A-4
Section 2.02. Authorization; No Defaults. . . . . . . . . . . . . . . . . . . . . .A-5
Section 2.03. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-5
Section 2.04. Financial Information . . . . . . . . . . . . . . . . . . . . . . . .A-5
Section 2.05. Absence of Changes. . . . . . . . . . . . . . . . . . . . . . . . . .A-6
Section 2.06. Regulatory Enforcement Matters. . . . . . . . . . . . . . . . . . . .A-6
Section 2.07. Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-6
Section 2.08. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-6
Section 2.09. Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . .A-6
Section 2.10. Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-7
Section 2.11. Loan Portfolio. . . . . . . . . . . . . . . . . . . . . . . . . . . .A-7
Section 2.12. Employee Matters and ERISA. . . . . . . . . . . . . . . . . . . . . .A-7
Section 2.13. Title to Properties; Insurance. . . . . . . . . . . . . . . . . . . .A-8
Section 2.14. Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . .A-8
Section 2.15. Compliance with Law . . . . . . . . . . . . . . . . . . . . . . . . .A-9
Section 2.16. Brokerage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .A-9
Section 2.17. No Undisclosed Liabilities. . . . . . . . . . . . . . . . . . . . . .A-9
Section 2.18. Statements True and Correct . . . . . . . . . . . . . . . . . . . . .A-9
ARTICLE THREE - REPRESENTATIONS OF BOATMEN'S AND BOATMEN'S-TEXAS. . . . . . . . . . . . . . . A-10
Section 3.01. Organization and Capital Stock. . . . . . . . . . . . . . . . . . . A-10
Section 3.02. Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . A-10
Section 3.03. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . . . . . A-11
Section 3.04. Financial Information . . . . . . . . . . . . . . . . . . . . . . . A-11
Section 3.05. Absence of Changes. . . . . . . . . . . . . . . . . . . . . . . . . A-11
Section 3.06. Litigation. . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-11
Section 3.07. Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-11
Section 3.08. Compliance With Law . . . . . . . . . . . . . . . . . . . . . . . . A-12
Section 3.09. Statements True and Correct . . . . . . . . . . . . . . . . . . . . A-12
A-i
<PAGE> 110
ARTICLE FOUR - AGREEMENTS OF WEST SIDE. . . . . . . . . . . . . . . . . . . . . . . . . . . . A-12
Section 4.01. Business in Ordinary Course . . . . . . . . . . . . . . . . . . . . A-12
Section 4.02. Breaches. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-14
Section 4.03. Submission to Shareholders. . . . . . . . . . . . . . . . . . . . . A-14
Section 4.04. Consents to Contracts and Leases. . . . . . . . . . . . . . . . . . A-15
Section 4.05. Conforming Accounting and Reserve Policies;
Restructuring Expenses. . . . . . . . . . . . . . . . . . . . . . A-15
Section 4.06. Consummation of Agreement . . . . . . . . . . . . . . . . . . . . . A-16
Section 4.07. Environmental Reports . . . . . . . . . . . . . . . . . . . . . . . A-16
Section 4.08. Restriction on Resales. . . . . . . . . . . . . . . . . . . . . . . A-16
Section 4.09. Access to Information . . . . . . . . . . . . . . . . . . . . . . . A-16
Section 4.10. Subsidiary Bank Merger. . . . . . . . . . . . . . . . . . . . . . . A-17
Section 4.11. Subsidiary Holding Company Merger . . . . . . . . . . . . . . . . . A-17
ARTICLE FIVE - AGREEMENTS OF BOATMEN'S AND BOATMEN'S-TEXAS. . . . . . . . . . . . . . . . . . A-17
Section 5.01. Regulatory Approvals and Registration Statement. . . . . . . . . . .A-17
Section 5.02. Breaches. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-18
Section 5.03. Consummation of Agreement . . . . . . . . . . . . . . . . . . . . . A-18
Section 5.04. Stock Options . . . . . . . . . . . . . . . . . . . . . . . . . . . A-18
Section 5.05. Directors and Officers' Liability Insurance
and Indemnification . . . . . . . . . . . . . . . . . . . . . . . A-19
Section 5.06. Employee Benefits . . . . . . . . . . . . . . . . . . . . . . . . . A-20
Section 5.07. Access to Information . . . . . . . . . . . . . . . . . . . . . . . A-20
ARTICLE SIX - CONDITIONS PRECEDENT TO THE MERGER. . . . . . . . . . . . . . . . . . . . . . . A-20
Section 6.01. Conditions to Boatmen's Obligations . . . . . . . . . . . . . . . . A-20
Section 6.02. Conditions to West Side's Obligations . . . . . . . . . . . . . . . A-21
ARTICLE SEVEN - TERMINATION OR ABANDONMENT. . . . . . . . . . . . . . . . . . . . . . . . . . A-22
Section 7.01. Mutual Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . A-22
Section 7.02. Breach of Agreements. . . . . . . . . . . . . . . . . . . . . . . . A-22
Section 7.03. Environmental Reports . . . . . . . . . . . . . . . . . . . . . . . A-22
Section 7.04. Failure of Conditions . . . . . . . . . . . . . . . . . . . . . . . A-22
Section 7.05. Regulatory Approval Denial. . . . . . . . . . . . . . . . . . . . . A-22
Section 7.06. Shareholder Approval Denial . . . . . . . . . . . . . . . . . . . . A-23
Section 7.07. Regulatory Enforcement Matters. . . . . . . . . . . . . . . . . . . A-23
Section 7.08. Fall-Apart Date . . . . . . . . . . . . . . . . . . . . . . . . . . A-23
Section 7.09. Termination Fee . . . . . . . . . . . . . . . . . . . . . . . . . . A-23
Section 7.10. Due Diligence Review. . . . . . . . . . . . . . . . . . . . . . . . A-24
ARTICLE EIGHT - GENERAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-25
Section 8.01. Confidential Information. . . . . . . . . . . . . . . . . . . . . . A-25
Section 8.02. Publicity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-25
Section 8.03. Return of Documents . . . . . . . . . . . . . . . . . . . . . . . . A-25
Section 8.04. Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-25
Section 8.05. Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-26
Section 8.06. Nonsurvival of Representations, Warranties
and Agreements. . . . . . . . . . . . . . . . . . . . . . . . . . A-26
Section 8.07. Entire Agreement. . . . . . . . . . . . . . . . . . . . . . . . . . A-26
Section 8.08. Headings and Captions . . . . . . . . . . . . . . . . . . . . . . . A-26
A-ii
<PAGE> 111
Section 8.09. Waiver, Amendment or Modification . . . . . . . . . . . . . . . . . A-27
Section 8.10. Rules of Construction . . . . . . . . . . . . . . . . . . . . . . . A-27
Section 8.11. Counterparts. . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
Section 8.12. Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . . A-27
Section 8.13. Severability. . . . . . . . . . . . . . . . . . . . . . . . . . . . A-27
Section 8.14. Governing Law; Assignment . . . . . . . . . . . . . . . . . . . . . A-27
EXHIBIT 1.09(a) - Company's Legal Opinion Matters
EXHIBIT 1.09(b) - Boatmen's Legal Opinion Matters
EXHIBIT 4.09 - Form of Affiliate's Letter
</TABLE>
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<PAGE> 112
AGREEMENT AND PLAN OF MERGER
----------------------------
This is an AGREEMENT AND PLAN OF MERGER (this "Agreement")
made November 14, 1994, by and among WEST SIDE BANCSHARES, INC., a
Texas corporation ("West Side"), 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").
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 MERGER. Pursuant to the terms and
------------ ----------
provisions of this Agreement and the General and Business
Corporation Law of Missouri (the "Missouri Corporate Law") and the
Texas Business Corporation Act (the "Texas Corporate Law"), West
Side shall merge with and into Boatmen's-Texas (the "Merger").
SECTION 1.02. MERGING CORPORATION. West Side shall be the
------------ -------------------
merging corporation under the Merger and its corporate identity and
existence, separate and apart from Boatmen's-Texas, shall cease on
consummation of the Merger.
SECTION 1.03. SURVIVING CORPORATION. Boatmen's-Texas shall
------------ ---------------------
be the surviving corporation in the Merger. No changes in the
articles of incorporation of Boatmen's-Texas shall be effected by
the Merger.
SECTION 1.04. EFFECT OF THE MERGER. The Merger shall have
------------ --------------------
all of the effects provided by this Agreement, the Missouri
Corporate Law and the Texas Corporate Law.
SECTION 1.05. CONVERSION OF SHARES.
------------ --------------------
(a) At the Effective Time (as defined in Section 1.08 hereof),
each share of common stock, par value $1.00, of West Side (the
"West Side Common") issued and outstanding immediately prior to the
Effective Time, other than shares the holders of which have duly
exercised and perfected their dissenters' rights under the
Corporate Law, shall be converted into the right to receive 1.8472
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").
No fractional shares of Boatmen's Common shall be issued and, in
lieu thereof, holders of shares of West Side Common who would
otherwise be entitled to a fractional share interest (after taking
into account all shares of West Side Common held by such holder)
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 Nasdaq Stock Market's National Market
("Nasdaq") on the business day immediately preceding the date on
which the Effective Time occurs (the "Fractional Share Value").
(b) At the Effective Time, all of the shares of West Side
Common, by virtue of the 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
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<PAGE> 113
to the Effective Time represented outstanding shares of West Side
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 1.07.
(c) At the Effective Time, each share of West Side Common, if
any, held in the treasury of West Side or by any direct or indirect
subsidiary of West Side (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.
(d) Each share of common stock of Boatmen's-Texas outstanding
immediately prior to the Effective Time shall remain outstanding
unaffected by the Merger.
(e) 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 West Side Common shall be
converted pursuant to subsection (a) above shall be appropriately
and proportionately adjusted so that each shareholder of West Side
shall be entitled to receive 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 the
Merger.
(f) If holders of West Side Common are entitled to dissent
from the Agreement and Merger under the Texas Corporate Law, any
issued and outstanding shares of West Side 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 West Side 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 to dissent shall have only
such rights as are provided under the Texas Corporate Law.
SECTION 1.06. THE CLOSING. The closing of the Merger (the
------------ -----------
"Closing") shall take place at a location mutually agreeable to the
parties at 10:00 A.M. Central Time on the Closing Date described in
Section 1.08 of this Agreement.
SECTION 1.07. EXCHANGE PROCEDURES; SURRENDER OF CERTIFICATES.
------------ ----------------------------------------------
(a) Boatmen's Trust Company, St. Louis, Missouri, shall act
as Exchange Agent in the Merger (the "Exchange Agent").
(b) As soon as reasonably practicable 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. Upon
surrender to the Exchange Agent of a Certificate, together with a
Merger Letter of Transmittal duly executed and any other required
documents,
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<PAGE> 114
the holder of such Certificate shall be entitled to receive in
exchange therefor solely the Merger Consideration. No interest on
the Merger Consideration issuable upon the surrender of
the Certificates shall be paid or accrued for the benefit of
holders of Certificates. If the 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) No dividends that are otherwise payable on shares of
Boatmen's Common constituting the 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.
SECTION 1.08. 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 West Side and Boatmen's may
agree (the "Closing Date"). The Merger shall be effective upon the
filing of Articles of Merger with the Secretary of State of the
State of Missouri (the "Effective Time"), which the parties shall
use their best efforts to cause to occur on the Closing Date.
SECTION 1.09. ACTIONS AT CLOSING.
------------ -------------------
(a) At the Closing, West Side shall deliver to Boatmen's and
Boatmen's-Texas:
(i) a certified copy of the Articles of Incorporation of
West Side and each of its subsidiaries;
(ii) a Certificate signed by an appropriate officer of
West Side stating that (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 West Side's
Board of Directors and shareholders, as required for valid
approval of the execution of this Agreement and the
consummation of the Merger and the other transactions
contemplated hereby;
(iv) Certificate of the Texas Secretary of State, dated
a recent date, stating that West Side is in good standing; and
(v) a legal opinion from counsel for West Side, in form
reasonably acceptable to Boatmen's counsel, opining with
respect to the matters listed on Exhibit 1.09(a) hereto.
(b) At the Closing, Boatmen's shall deliver to West Side:
A-3
<PAGE> 115
(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 excluding the approval of West Side's
shareholders) have been satisfied;
(ii) a certified copy of the resolutions of Boatmen's
Executive Committee or Board of Directors and Boatmen's-Texas
Board of Directors authorizing, in each case, 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; and
(iv) a legal opinion from counsel for Boatmen's, in form
reasonable acceptable to West Side's counsel, opining with
respect to the matters listed on Exhibit 1.09(b) hereto.
ARTICLE TWO
-----------
REPRESENTATIONS OF WEST SIDE
----------------------------
West Side hereby makes the following representations and
warranties:
SECTION 2.01. ORGANIZATION AND CAPITAL STOCK.
------------ ------------------------------
(a) West Side 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. West Side is a bank holding company registered
with the Board of Governors of the Federal Reserve System under the
Bank Holding Company Act of 1956.
(b) The authorized capital stock of West Side consists of
500,000 shares of West Side Common, of which, as of the date
hereof, 301,837 shares are issued and outstanding and 156,563
shares are held as treasury stock. All of the issued and
outstanding shares of West Side Common are duly and validly issued
and outstanding and are fully paid and non-assessable. None of the
outstanding shares of West Side Common has been issued in violation
of any preemptive rights of the current or past shareholders of
West Side. As of the date hereof, West Side had reserved 50,000
shares of West Side Common for issuance under West Side's Stock
Option Plan (as defined in Section 5.04 hereof). As of the date
hereof, West Side had outstanding employee stock options
representing the right to acquire 31,100 shares of West Side Common
pursuant to the Stock Option Plan.
(c) Except as set forth in subsection 2.01(b) above, there are
no shares of capital stock or other equity securities of West Side
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 West Side Common or other capital stock
of West Side or contracts, commitments, understandings or
arrangements by which West Side 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
A-4
<PAGE> 116
capital stock. Except as disclosed in Section 2.01(c) of that
certain confidential writing delivered by West Side to Boatmen's and
executed by both West Side and Boatmen's concurrently with the
delivery and execution of this Agreement (the "Disclosure
Schedule"), each Certificate representing shares of West Side
Common issued by West Side 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 West
Side only upon receipt of an affidavit of lost stock certificate
and indemnity agreement of such shareholder indemnifying West Side
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.
SECTION 2.02. AUTHORIZATION; NO DEFAULTS. West Side's Board
------------ --------------------------
of Directors has, by all appropriate action, approved this Agree-
ment and the Merger and authorized the execution hereof on its
behalf by its duly authorized officers and the performance by West
Side of its obligations hereunder. Nothing in the articles of
incorporation or bylaws of West Side, 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 its subsidiaries are bound
or subject would prohibit or materially inhibit West Side from
consummating this Agreement and the Merger on the terms and
conditions herein contained. This Agreement has been duly and
validly executed and delivered by West Side and constitutes a
legal, valid and binding obligation of West Side, enforceable
against West Side in accordance with its terms. West Side 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 West Side and its
subsidiaries taken as a whole.
SECTION 2.03. SUBSIDIARIES. West Side's wholly-owned
------------ ------------
subsidiary, Westside Delaware Financial Corporation, a Delaware
corporation ("Westside Delaware"), and its wholly-owned banking
subsidiary, Bank of the West, a Texas state bank ("Bank"), and West
Side's other direct or indirect subsidiaries (collectively,
including Westside Delaware and the Bank, the "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 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. 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 may be otherwise there
noted) are owned by West Side or West Side's subsidiaries, as the
case may be and as there disclosed, free and clear of all liens,
encumbrances, rights of first refusal, options or other restric-
tions of any nature whatsoever, except as may be disclosed in
Section 2.03 of the Disclosure Schedule. There are no options,
warrants or rights outstanding to acquire any capital stock of any
of West Side's subsidiaries and no person or entity has any other
right to purchase or acquire any unissued shares of stock of any of
West Side'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 West Side nor any of West Side'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 West Side and its subsidiaries as of
December 31, 1992 and December 31, 1993 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 sheet of West Side and its subsidiaries as of June 30, 1994
and the related unaudited consolidated income statements and
statements of charges in shareholders' equity and cash flows for
the six months then ended and the year-end and quarterly Reports of
Condition and Report of Income of the Bank for 1993 and June 30,
1994, respectively,
A-5
<PAGE> 117
as currently on file with the Federal Deposit Insurance Corporation
(the "F.D.I.C.") (together, the "West Side 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 in all material respects 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, if
any, 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 or prospects
of West Side 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 West Side
Financial Statements not misleading. Since the date of the most
recent F.D.I.C. examination report regarding the Bank, there has
been no material adverse change in the financial condition, the
results of operations or the business or prospects of the Bank.
Notwithstanding the foregoing, any changes for which West Side or
its subsidiaries, including the Bank, make provisions or other
adjustments solely on account of and pursuant to Section 4.05
hereof shall not be deemed to be a material adverse change.
SECTION 2.06. REGULATORY ENFORCEMENT MATTERS. Except as may
------------ ------------------------------
be disclosed in Section 2.06 of the Disclosure Schedule, neither
West Side nor any of its subsidiaries is subject to, or has
received any notice or advice that it may become subject to, any
order, agreement or memorandum of understanding with 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 West Side or any of its subsidiaries.
SECTION 2.07. TAX MATTERS. West Side and its subsidiaries
------------ -----------
have filed all federal, state and local tax returns due in respect
of any of their businesses or properties in a timely fashion and
have paid or made provision, as reflected in the West Side
Financial Statements, for all amounts due shown on such returns.
All such returns fairly reflect the information required to be pre-
sented therein. All provisions for accrued but unpaid taxes
contained in the West Side Financial Statements were made in
accordance with generally accepted accounting principles and in the
aggregate do not materially fail to provide for al existing and
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 West
Side, threatened, against West Side or any of its subsidiaries, or
of which the property of West Side or any of its subsidiaries is or
would be subject. Any litigation, claim or other proceeding so
disclosed in Section 2.08 of the Disclosure Schedule which is
material to West Side and its subsidiaries taken as a whole is
there stated to be a material matter.
SECTION 2.09. EMPLOYMENT AGREEMENTS. Except as may be
------------ ---------------------
disclosed in Section 2.09 of the Disclosure Schedule, neither West
Side 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, consul-
tant or other person or entity which, by its terms, is not termi-
nable by West Side 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 such
agreement which is in writing is included in Section 2.09 of the
Disclosure Schedule.
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<PAGE> 118
SECTION 2.10. REPORTS. Except as may be disclosed in
------------ -------
Section 2.10 of the Disclosure Schedule, West Side and each of its
subsidiaries has filed all reports and statements, together with
any amendments required to be made with respect thereto, if any,
that it was required to file with (i) the Board of Governors of the
Federal Reserve System (the "Federal Reserve Board"), (ii) the
F.D.I.C., (iii) the Finance Commission of the State of Texas, and
(iv) any other governmental authority with jurisdiction over West
Side or any of its subsidiaries. As of their respective dates,
each of such reports and documents, 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 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 West Side Financial Statements or which were
entered into after the date of the most recent balance sheet
included in the West Side Financial Statements were and will be
made in all material respects for good, valuable and adequate
consideration in the ordinary course of the business of West Side
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) West Side 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 such
loans.
SECTION 2.12. EMPLOYEE MATTERS AND ERISA.
------------ --------------------------
(a) Except as may be disclosed in Section 2.12(a) of the
Disclosure Schedule, neither West Side nor any of its subsidiaries
has entered into any collective bargaining agreement with any labor
organization with respect to any group of employees of West Side or
any of its subsidiaries and to the knowledge of West Side there is
no present effort nor existing proposal to attempt to unionize any
group of employees of West Side or any of its subsidiaries.
(b) Except as may be disclosed in Section 2.12(b) of the
Disclosure Schedule, (i) West Side 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 West Side
nor any of its subsidiaries is engaged in any unfair labor
practice; (ii) there is no material unfair labor practice complaint
against West Side or any subsidiary pending or, to the knowledge of
West Side, threatened before the National Labor Relations Board;
(iii) there is no labor dispute, strike, slowdown or stoppage
actually pending or, to the knowledge of West Side, threatened
against or directly affecting West Side or any subsidiary; and
(iv) neither West Side 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 West Side 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
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plans, or other employee benefit or fringe benefit programs for the
benefit of former or current employees of West Side or any
subsidiary (the "Employee Plans"). To the knowledge of West Side,
no present or former employee of West Side or any subsidiary has
been charged with breaching nor has breached a fiduciary duty under
any of the Employee Plans. Neither West Side 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 disclosed in Section 2.12(c) of the
Disclosure Schedule, neither West Side nor any subsidiary maintains,
contributes to, or participates in, any plan that provides health,
major medical, disability or life insurance benefits to former
employees of West Side or any subsidiary.
(d) Neither West Side 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 West Side 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 West Side or any of its subsidiaries would be
liable after December 31, 1993, except as is reflected on the West
Side Financial Statements. After December 31, 1993, West Side and
its subsidiaries will not have any liabilities for excise taxes
under Sections 4971, 4975, 4976, 4977, 4979 or 4980B of 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. Except as may
------------ ------------------------------
be disclosed in Section 2.13 of the Disclosure Schedule, (i) West
Side 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 West Side 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 West Side or its subsidiaries, rights of
redemption under applicable law) to all of their real properties;
(ii) all leasehold interests for real property and any material
personal property used by West Side and its subsidiaries in their
businesses are held pursuant to lease agreements which are valid
and enforceable in accordance with their terms; (iii) 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 West Side, threatened
with respect to such properties; (iv) West Side and its
subsidiaries have valid title or other ownership rights under
licenses to all material intangible personal or intellectual
property used by West Side 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; and (v) all material insurable properties owned or
held by West Side and its subsidiaries are adequately 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 West Side 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
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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 West Side 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 West Side and its subsidiaries and no condition has existed or
event has occurred with respect to any of them or any such property
that, with notice or the passage of time, or both, would constitute
a violation material to the business of West Side and its
subsidiaries of Environmental Laws or obligate (or potentially
obligate) West Side 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 West Side and its subsidiaries. Except as may be
disclosed in Section 2.14 of the Disclosure Schedule, neither West
Side nor any of its subsidiaries has received any notice from any
person or entity that West Side 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 any of them are responsible (or
potentially responsible) for the cleanup or other remediation 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. West Side and its sub-
------------ -------------------
sidiaries have all licenses, franchises, permits and other gov-
ernmental 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. BROKERAGE. Except as may be disclosed in
------------ ---------
Section 2.16 of the Disclosure Statement, 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 West Side or its
subsidiaries.
SECTION 2.17. NO UNDISCLOSED LIABILITIES. West Side 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 West Side or
its subsidiaries giving rise to any such liability), except (i) for
liabilities set forth in the West Side Financial Statements,
(ii) normal fluctuation in the amount of the liabilities referred
to in clause (i) above occurring in the ordinary course of business
of West Side and its subsidiaries since the date of the most recent
balance sheet included in the West Side Financial Statements, none
of which such fluctuation is materially adverse to West Side and
its subsidiaries taken as a whole and (iii) as may be disclosed in
Section 2.17 of the Disclosure Schedule.
SECTION 2.18. STATEMENTS TRUE AND CORRECT. None of the
------------ ---------------------------
information supplied or to be supplied by West Side or its
subsidiaries for inclusion in (i) the Registration Statement (as
defined in Section 4.06 hereof), (ii) the Proxy
Statement/Prospectus (as defined in Section 4.03 hereof) and
(iii) any other documents to be filed with the S.E.C., Nasdaq 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 West
Side and at the time of such stockholder meeting, contain any
untrue statement of a material fact, or omit to state any material
fact necessary in order to make the statements made therein, in
light of the circumstances under which they are made, not
misleading. All documents that West Side is responsible for filing
with any regulatory authority in
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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 is a bank holding
company registered with the Board of Governors of the Federal
Reserve System under the Bank Holding Company Act of 1956.
Boatmen's-Texas is a corporation duly incorporated, validly
existing, and in good standing under the laws of the State of
Arkansas 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
July 31, 1994, 104,739,985 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 11,421 shares of the Boatmen's Series B
Preferred Stock were issued and outstanding as of July 31, 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 July 31, 1994, Boatmen's had outstanding options
and other rights to acquire not more than 3,426,552 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.
(d) The shares of Boatmen's Common that are to be issued to
the stockholders of West Side 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 or
------------ -------------
Board of Directors of Boatmen's and the Board of Directors of
Boatmen's-Texas will have, by the end of the Due Diligence Period
(as defined in Section 7.10 hereof), unless this Agreement is
theretofore terminated pursuant to the provisions of Article Seven
hereof, by all appropriate action, approved this Agreement and the
Merger and authorized the execution hereof on their behalf by their
respective duly authorized officers and the performance by such
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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 the Merger 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 (including any approvals by the shareholders of Boatmen's or
further approval of the sole shareholder of Boatmen's-Texas) to
authorize the execution, delivery and performance of this
Agreement. Except for the requisite approval 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 bank regulatory authority is necessary for
the execution and delivery of this Agreement or consummation of the
Merger 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 audited
------------ ---------------------
consolidated balance sheets of Boatmen's and its subsidiaries as of
December 31, 1992 and 1993 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 Form 10-K for the year ended
December 31, 1993, as currently on file with the S.E.C., and the
unaudited consolidated balance sheet of Boatmen's and its
subsidiaries as of June 30, 1994 and the related unaudited
consolidated income statements and statements of changes in
shareholders' equity and cash flows for the six months then ended
included in Boatmen's Quarterly Reports on Form 10-Q for the
quarter then ended, as currently on file with the S.E.C. (together,
the "Boatmen's Financial Statements"), have been prepared in
accordance with generally accepted accounting principles applied on
a consistent basis (except as may be disclosed therein) and fairly
present in all material respects 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 of Boatmen's or any of its subsidiaries is or
would be subject which is material to Boatmen's and its
subsidiaries taken as a whole.
SECTION 3.07. REPORTS. Boatmen's and each of its significant
------------ -------
subsidiaries has filed all material 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 Office of the Comptroller of the
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Currency, (iv) the F.D.I.C., (v) any applicable state banking or
securities 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
in Section 4.06 hereof), (ii) the Proxy Statement/Prospectus (as
defined in Section 4.03 hereof) and (iii) any other documents to be
filed with the S.E.C., Nasdaq, or any banking, blue sky 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 West
Side and at the time of such stockholders meeting, contain any
untrue statement of a material fact, or omit to state any material
fact necessary in order to make the statements made therein, in
light of the circumstances under which they are made, not
misleading. All documents that Boatmen's is responsible for filing
with the S.E.C., Nasdaq 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 WEST SIDE
-----------------------
SECTION 4.01. BUSINESS IN ORDINARY COURSE.
------------ ---------------------------
(a) West Side 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 except for the
payment of its regular annual dividend in the amount of $1.00 per
share in January, 1995.
(b) West Side 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 lia-
bilities, only in the usual, regular and ordinary course of
business, as heretofore conducted, and by way of amplification and
not limitation, West Side and each of its subsidiaries will not,
without the prior written consent of Boatmen's (which shall not be
unreasonably withheld):
(i) issue any West Side Common or other capital stock or
any options, warrants, or other rights to subscribe for or
purchase West Side Common or any other capital stock or any
securities convertible into or exchangeable for any capital
stock of West Side or any of its subsidiaries (except for the
issuance of West Side Common pursuant to the valid exercise of
West Side Stock Options, as defined in Section 5.04 hereof,
which are outstanding on the date of this Agreement); or
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(ii) directly or indirectly redeem, purchase or otherwise
acquire any West Side Common or any other capital stock of
West Side 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) 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
$1,000,000 or that would increase the aggregate credit
outstanding to any one borrower (or group of affiliated
borrowers) to more than $1,000,000 (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 West Side; 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 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
(xii) except in the ordinary course of business, cancel or
accelerate any material indebtedness owing to West Side or its
subsidiaries or any claims which West Side 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 West
Side and its subsidiaries; or
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(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 West Side 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 West Side'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 West Side'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) West Side 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 West Side contained in
Article Two hereof, if such representations and warranties were
given as of the date of such transaction or action.
(d) West Side shall promptly notify Boatmen's in writing of
the occurrence of any matter or event known to and directly
involving West Side, 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 West Side and its
subsidiaries taken as a whole.
(e) West Side 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 West Side
Common or other securities of West Side and its subsidiaries. West
Side shall promptly (which for this purpose shall mean within
twenty-four hours) advise Boatmen's of its receipt of any such
proposal or inquiry concerning any possible such proposal, the
substance of such proposal or inquiry, and the identity of such
person.
SECTION 4.02. BREACHES. West Side 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 Boatmen's and use its best efforts
to prevent or promptly remedy the same.
SECTION 4.03. SUBMISSION TO SHAREHOLDERS. West Side shall
------------ --------------------------
cause to be duly called and held, on a date mutually selected by
Boatmen's and West Side, a special meeting of its shareholders (the
"Shareholders' Meeting") for submission of this Agreement and the
Merger for approval of such West Side shareholders as required by
the Texas Corporate Law. In connection with the Shareholders'
Meeting, (i) West Side shall cooperate and assist Boatmen's in
preparing and filing a Proxy Statement/Prospectus (the
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"Proxy Statement/Prospectus") with the S.E.C. and West Side shall
mail it to its shareholders, (ii) West Side shall furnish Boatmen's
all information concerning itself that Boatmen's may reasonably
request in connection with such Proxy Statement/Prospectus, and
(iii) the Board of Directors of West Side shall (subject to
compliance with its fiduciary duties as advised by counsel)
recommend to its shareholders the approval of this Agreement and the
Merger contemplated hereby and use its best efforts to obtain such
shareholder approval.
SECTION 4.04. CONSENTS TO CONTRACTS AND LEASES. West Side
------------ --------------------------------
shall obtain all necessary consents with respect to all interests
of West Side 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 4.05. CONFORMING ACCOUNTING AND RESERVE POLICIES;
------------ -------------------------------------------
RESTRUCTURING EXPENSES.
- ----------------------
(a) Notwithstanding that West Side 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, West Side
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, West Side and Boatmen's shall
consult and cooperate with each other with respect to conforming,
as specified in a written notice from Boatmen's to West Side, based
upon such consultation and as hereinafter provided, the loan,
accrual and reserve policies of West Side and its subsidiaries to
those policies of Boatmen's.
(b) In addition, from and after the date of this Agreement to
the Effective Time, West Side and Boatmen's shall consult and
cooperate with each other with respect to determining, as specified
in a written notice from Boatmen's to West Side, 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 Merger.
(c) West Side and Boatmen's shall consult and cooperate with
each other with respect to determining, as specified in a written
notice from Boatmen's to West Side, 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 Merger.
(d) At the request of Boatmen's, West Side shall establish and
take such reserves and accruals as Boatmen's shall request to
conform West Side'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 Merger and restructuring
charges related to or to be incurred in connection with the Merger,
in each case at such times as are mutually agreeable to Boatmen's
and West Side; provided, however, that it is the objective of
Boatmen's and West Side that such reserves, accruals and charges be
taken as at or prior to December 31, 1994, and, in all events, not
later than as of immediately prior to the Closing Date, provided
that West Side shall not be required to take any such action that
is not consistent with generally accepted accounting principles.
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(e) No accrual or other adjustment made by West Side pursuant
to the provisions of this Section 4.05 shall constitute an
acknowledgment by West Side 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
4.05.
SECTION 4.06. CONSUMMATION OF AGREEMENT. West Side shall use
------------ -------------------------
its best efforts to perform and fulfill all conditions and obli-
gations on its part to be performed or fulfilled under this
Agreement and to effect the Merger in accordance with the terms and
provisions hereof. West Side shall furnish to Boatmen's in a
timely manner all information, data and documents in the possession
of West Side 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 to be issued to the shareholders of West Side 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 4.07. ENVIRONMENTAL REPORTS. West Side shall provide
------------ ---------------------
to Boatmen's, as soon as reasonably practical, but not later than
forty-five (45) days after the date hereof, a report of a phase one
environmental investigation on all real property owned, leased or
operated by West Side or its subsidiaries as of the date hereof
(but excluding space in retail and similar establishments leased by
West Side for automatic teller machines or bank branch facilities
where the space leased comprises less than 15% of the total space
leased to all tenants of such property) and within ten (10) days
after the acquisition or lease of any real property acquired or
leased by West Side or its subsidiaries after the date hereof (but
excluding space in retail and similar establishments leased by West
Side for automatic teller machines or bank branch facilities where
the space leased comprises less than 15% of the total space leased
to all tenants of such property), except as otherwise provided in
Section 4.01(b)(xiv). If required by the phase one investigation
in Boatmen's reasonable opinion, West Side shall provide to
Boatmen's a report of a phase two investigation on properties
requiring such additional study. Boatmen's shall have fifteen (15)
business days from the receipt of any such phase two investigation
report to notify West Side of any dissatisfaction with the contents
of such report. Should the cost of taking all remedial or other
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 One Hundred Thousand Dollars
($100,000) as reasonably estimated by an environmental expert
retained for such purpose by Boatmen's and reasonably acceptable to
West Side, or if the cost of such actions and measures cannot be so
reasonably estimated by such expert to be such amount 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 fifteen (15)
business days following 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 4.08. RESTRICTION ON RESALES. West Side shall obtain
------------ ----------------------
and deliver to Boatmen's, at least thirty-one (31) days prior to
the Closing Date, the signed agreement, in the form of Exhibit 4.08
hereto, of each person who may reasonably be deemed an "affiliate"
of West Side 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 West Side Common or Boatmen's Common (or reduction of risk with
respect thereto) until such time as financial results covering at
least thirty (30) days of post-Merger combined operations have been
published.
SECTION 4.09. ACCESS TO INFORMATION. West Side shall permit
------------ ---------------------
Boatmen's reasonable access in a manner which will avoid undue
disruption or interference with West Side's normal operations to its
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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 (but only to the extent that such review would not
result in a material waiver of the attorney-client or attorney work
product privileges under the rules of evidence), 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.
West Side shall deliver to Boatmen's within ten (10) business 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.
SECTION 4.10. SUBSIDIARY BANK MERGER. Upon the request of
------------ ----------------------
Boatmen's, West Side shall cause the Bank to enter into a merger
agreement with Boatmen's First National Bank of Amarillo, a wholly-
owned subsidiary of Boatmen's-Texas, and take all other actions and
cooperate with Boatmen's in causing such merger (the "Subsidiary
Bank Merger") to be effected. Such subsidiary bank merger
agreement shall provide, in addition to customary terms for mergers
of subsidiary banks in transactions such as this: (i) for
consummation of such Subsidiary Bank Merger on a date on or after
the Closing Date, as may be selected by Boatmen's; and (ii) that
the obligations of the Bank thereunder are conditioned on the prior
or simultaneous consummation of the Merger pursuant to this
Agreement.
SECTION 4.11. SUBSIDIARY HOLDING COMPANY MERGER. West Side
------------ ---------------------------------
shall cause Westside Delaware to merge with and into West Side, in
accordance with the provisions of Section 5.16 of the Texas
Corporate Law and applicable provisions of the Delaware General
Corporation Law, which merger shall become effective immediately
prior to the Effective Time.
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 Merger, including but not
limited to the necessary applications for the prior approval of the
Federal Reserve Board and the Finance Commission of the State of
Texas. Boatmen's shall keep West Side reasonably informed as to
the status of such applications and make available to West Side,
upon reasonable request by West Side from time to time, copies of
such applications and any supplementally filed materials.
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
shareholders of West Side 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
published rules and regulations thereunder, and shall not contain
any untrue statement of a material fact or omit to state a material
fact
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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 shareholders of West Side, at the time of
the Shareholders' 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 (i) any application required to list
on Nasdaq the shares of Boatmen's Common to be issued pursuant to
the Merger, and (ii) any filings required under the Securities
Exchange Act of 1934 (the "Exchange Act") relating to the Merger
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 West Side 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 the
Merger in accordance with the terms and conditions of this
Agreement.
SECTION 5.04. STOCK OPTIONS.
------------ -------------
(a) At the Effective Time, each outstanding option to purchase
shares of West Side Common (an "West Side Stock Option") issued
pursuant to the Westside Bancshares, Incorporated Incentive Stock
Option Plan (the "Stock Option Plan") whether or not exercisable or
vested, shall be assumed by Boatmen's as hereinafter provided.
Each West Side Stock Option shall be deemed to constitute an option
to acquire, on the same terms and conditions as were applicable
under such West Side Stock Option, the same number of full shares
of Boatmen's Common as the holder of such West Side Stock Option
would have been entitled to receive pursuant to the Merger had such
holder exercised such option in full immediately prior to the
Effective Time, at a price per share equal to (y) the aggregate
exercise price for West Side Common otherwise purchasable pursuant
to such West Side Stock Option divided by (z) the number of full
shares of Boatmen's Common deemed purchasable pursuant to such West
Side Stock Option. In no event shall Boatmen's be required to
issue fractional shares of Boatmen's Common.
(b) As soon as practicable after the Effective Time, Boatmen's
shall deliver to each holder of West Side Stock Options appropriate
notices setting forth such holders' rights pursuant to the Stock
Option Plan, and the agreements evidencing the grants of such West
Side Stock Options shall continue in effect on the same terms and
conditions (subject to the conversion required by this Section 5.04
after giving effect to the Merger and the assumption by Boatmen's
as set forth above). To the extent necessary to effectuate the
provisions of this Section 5.04, Boatmen's may deliver new or
amended agreements reflecting the terms of each West Side Stock
Option assumed by Boatmen's and amend the Stock Option Plan to
reflect the terms hereof.
(c) As soon as practicable after the Effective Time, Boatmen's
shall file with the S.E.C. a registration statement on an
appropriate form with respect to the shares of Boatmen's Common
subject to
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such options and shall use its best efforts to maintain
the effectiveness of such registration statement or registration
statements (and maintain the current status of the prospectus or
prospectuses with respect thereto) for so long as such options
remain outstanding.
(d) Any other provision of this Agreement to the contrary
notwithstanding, it is understood that the holders (the
"Optionees") of vested West Side Stock Options shall be permitted,
if and to the extent permissible under applicable law and the terms
and provisions of the Stock Option Plan, to exercise all or part of
such West Side Stock Options after the Effective Time by tendering
to the Exchange Agent, in the manner contemplated by Section 1.07
hereof, shares of West Side Common owned by such optionees as of
the Effective Time in payment of the exercise price stipulated by
the West Side Stock Option, with each tendered share of West Side
Common being valued for purposes of calculating such exercise price
at an amount equal to the product of 1.8472 multiplied by the
Fractional Share Value, and upon tender of such shares of West Side
Common, accompanied by written notice by the Optionee of his intent
to exercise such West Side Stock Option, together with certificates
representing the tendered shares, duly endorsed for transfer in
payment of the exercise price for such option, Boatmen's, acting
through the Exchange Agent, shall issue shares of Boatmen's Common
to such Optionee in an amount equal to the number of shares of
Boatmen's Common into which such West Side Stock Option would have
been converted as contemplated by paragraph (a) of this Section
5.04.
SECTION 5.05. DIRECTORS AND OFFICERS' LIABILITY INSURANCE AND
------------ -----------------------------------------------
INDEMNIFICATION.
- ---------------
(a) Following the Effective Time, Boatmen's will provide the
directors and officers of West Side 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 West Side'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 West Side. If the aggregate
premium of such insurance would exceed such maximum amount,
Boatmen's shall use its best efforts to procure such level of
insurance having the coverage described above as can be obtained
for an aggregate premium equal to such maximum amount.
(b) For six years after the Effective Time, Boatmen's shall
cause the Surviving Corporation (the survivor of the Merger of West
Side and Boatmen's-Texas following the Effective Time, the
"Surviving Corporation") to indemnify, defend and hold harmless the
present and former officers, directors, employees and agents of
West Side and its subsidiaries (each, an "Indemnified Party")
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) to the full extent then permitted
under the Texas Corporate Law and by West Side'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 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
5.05. If the Surviving Corporation shall liquidate, dissolve or
otherwise wind up its business, then Boatmen's shall indemnify,
defend and hold harmless each
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<PAGE> 131
Indemnified Party to the same extent and on the same terms that the
Surviving Corporation was so obligated pursuant to this Section
5.05.
SECTION 5.06. EMPLOYEE BENEFITS. Boatmen's shall, with
------------ -----------------
respect to each person who remains an employee of West Side or its
subsidiaries following the Closing Date (each a "Continued
Employee"), provide the benefits described in this Section 5.06.
Subject to the right of subsequent amendment or termination in
Boatmen's 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 and otherwise shall not be
participating in a similar plan maintained by West Side after the
Effective Time. West Side employees will be eligible to
participate on the same basis as similarly situated employees of
other Boatmen's subsidiaries. All such participation shall be
subject to such terms of such plans as may be in effect from time
to time and this Section 5.06 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 except insofar as benefits thereunder
shall have vested on the Closing Date and cannot be modified and
Boatmen's obligation under this Section 5.06 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 West Side and its
subsidiaries.
SECTION 5.07. ACCESS TO INFORMATION. Boatmen's shall permit
------------ ---------------------
West Side 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 West Side all
information regarding Boatmen's and its subsidiaries and their
business activities or prospects in which West Side may have a
reasonable and legitimate interest in furtherance of the
transactions contemplated by this Agreement. West Side will hold
any such information which is nonpublic in confidence in accordance
with the provisions of Section 8.01 hereof.
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 the Merger 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 West Side 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) West Side 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 (an
"Injunction") preventing the
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<PAGE> 132
consummation of the Merger 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 the Merger which makes the
consummation of the Merger illegal;
(d) All necessary regulatory approvals, consents,
authorizations and other approvals required by law for consummation
of the Merger shall have been obtained and all waiting periods
required by law shall have expired;
(e) Boatmen's shall have received all documents required to
be received from West Side on or prior to the Closing Date, all in
form and substance reasonably satisfactory to Boatmen's;
(f) 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 the 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;
(g) 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. or any
state securities agency; and
(h) Boatmen's shall have received an opinion of its counsel
to the effect that if the Merger is consummated in accordance with
the terms set forth in this Agreement (i) the 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 West Side Common upon receipt of Merger Consideration
(except for cash received in lieu of fractional shares); (iii) the
basis of shares of Boatmen's Common received by the shareholders of
West Side will be the same as the basis of shares of West Side
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 West Side Common
exchanged therefor, provided such shares were held as capital
assets as of the Effective Time.
SECTION 6.02. CONDITIONS TO WEST SIDE'S OBLIGATIONS. West
------------ -------------------------------------
Side's obligation to effect the Merger shall be subject to the
satisfaction (or waiver by West Side) 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 (an
"Injunction") 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;
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<PAGE> 133
(d) All necessary regulatory approvals, consents,
authorizations and other approvals, including the requisite
approval of this Agreement and the Merger by the shareholders of
West Side, required by law for consummation of the Merger shall
have been obtained and all waiting periods required by law shall
have expired;
(e) West Side 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 West Side;
(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. or any
state securities agency; and
(g) West Side shall have received a copy of the opinion of
Boatmen's counsel contemplated by Section 6.01(h) of this
Agreement.
ARTICLE SEVEN
-------------
TERMINATION OR ABANDONMENT
--------------------------
SECTION 7.01. MUTUAL AGREEMENT. This Agreement may be
------------ ----------------
terminated by the mutual written agreement of Boatmen's and West
Side at any time prior to the Closing Date, regardless of whether
approval of this Agreement and the Merger by the shareholders of
West Side shall have been previously obtained.
SECTION 7.02. BREACH OF AGREEMENTS. In the event that there
------------ --------------------
is a material breach in any of the representations and warranties
or agreements of Boatmen's or West Side, 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 approval of this Agreement
and the Merger by the shareholders of West Side 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 4.07 and this
Section 7.03 by giving written notice thereof to West Side.
SECTION 7.04. FAILURE OF CONDITIONS. In the event 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 approval of this Agreement and the
Merger by the shareholders of West Side 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. REGULATORY 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.
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.
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<PAGE> 134
SECTION 7.06. SHAREHOLDER APPROVAL DENIAL. If this Agreement
------------ ---------------------------
and the Merger is not approved by the requisite vote of the
shareholders of West Side at the Shareholders' Meeting, then either
party may terminate this Agreement.
SECTION 7.07. REGULATORY ENFORCEMENT MATTERS. In the event
------------ ------------------------------
that West Side 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 after the date of
this Agreement, then Boatmen's may terminate this Agreement.
SECTION 7.08. FALL-APART DATE. If the Closing Date does not
------------ ---------------
occur on or prior to September 15, 1994, then this Agreement may be
terminated by either party by giving written notice thereof to the
other.
SECTION 7.09. TERMINATION FEE.
------------ ---------------
(a) Upon the occurrence of one or more of the following events
(a "Triggering Event"), West Side shall pay to Boatmen's the sum of
Five Hundred Thousand Dollars ($500,000).
(i) upon termination of this Agreement by Boatmen's upon
a breach thereof by West Side (including, without limitation,
the entering into of an agreement between West Side and any
third party which is inconsistent with the transactions
contemplated by this Agreement), provided that within eighteen
(18) months of the date of such termination, an event
described in clause (iii) or (iv) below shall have occurred;
(ii) the failure of West Side's shareholders to approve
the Merger and this Agreement at a meeting called for such
purpose; provided, however, that the failure of the West
Side'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 West Side 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 $28.00; 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 .15 from such quotient.
(iii) any person or group of persons (other than Boatmen's)
shall acquire, or have the right to acquire, 34% or more of
the outstanding shares of West Side Common, (exclusive of any
shares of West Side Common sold directly or indirectly to such
person or group of persons by Boatmen's);
(iv) upon the entry by West Side 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 West
Side or Bank or to purchase or acquire West Side or Bank or
all or substantially all of West Side's or Bank's assets.
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<PAGE> 135
(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.
SECTION 7.10. DUE DILIGENCE REVIEW. In accordance with
------------ --------------------
Section 4.09 hereof, West Side shall provide Boatmen's full and
complete access to its books, records and staff and those of its
subsidiaries to facilitate Boatmen's due diligence review of West
Side and its subsidiaries, exclusive of a review of asset quality
which Boatmen's has completed prior to the date of this Agreement.
If Boatmen's, in its sole and absolute discretion, should not be
satisfied with the results of such due diligence review (exclusive
of the asset quality of West Side and its subsidiaries) then
Boatmen's may terminate this Agreement by providing written notice
thereof to West Side on or before the thirtieth (30th) day after
the date of this Agreement (the "Due Diligence Period").
A-24
<PAGE> 136
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 the same 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 West Side 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 it reasonably believes such is required by law
upon the 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 give
reasonable notice, and to the extent practicable, 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 shall
deliver to the other originals and all copies of all Information
made available to such party and will not retain any copies,
extracts or other reproductions in whole or in part of such
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: Gregory L. Curl, Vice Chairman
Facsimile: 314/466-5645
A-25
<PAGE> 137
with a copy to:
Lewis, Rice & Fingersh
500 North Broadway, Suite 2000
St. Louis, Missouri 63102
Attention: Thomas C. Erb
Facsimile: 314/241-6056
and
(b) if to West Side:
West Side Bancshares, Inc.
2909 Sherwood Way
San Angelo, Texas 76901
Attention: Mr. Joe L. McManus, CEO
Facsimile: 915/944-0274
with copies to:
Ford & Ferraro, L.L.P.
98 San Jacinto Blvd., Suite 2000
Austin, Texas 78701
Attention: Joseph M. Ford
Facsimile: 512/477-5267
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 Sections 1.07, 5.04, 5.05
and 5.06 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 constitutes
------------ ----------------
the entire agreement between the parties and supersedes and cancels
any and all prior discussions, negotiations, undertakings,
agreements in principle or other agreements between the parties
relating to the subject matter hereof.
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.
A-26
<PAGE> 138
SECTION 8.09. WAIVER, AMENDMENT OR MODIFICATION. The con-
------------ ---------------------------------
ditions 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 West Side;
provided, however, that after any such approval no such amendment
or modification shall reduce the amount or change the form of the
Merger Consideration contemplated by this Agreement to be received
by shareholders of West Side. 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: (i) a term has the meaning assigned to it;
(ii) an accounting term not otherwise defined has the meaning
assigned to it in accordance with generally accepted accounting
principles; (iii) "or" is not exclusive; and (iv) 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. SEVERABILITY. In the event that any provisions
------------ ------------
of this Agreement or any portion thereof shall be finally
determined to be unlawful or unenforceable, such provision or
portion thereof shall be deemed to be severed from this Agreement,
and every other provision, and any portion of a provision, that is
not invalidated by such determination, shall remain in full force
and effect. To the extent that a provision is deemed unenforceable
by virtue of its scope but may be made enforceable by limitation
thereof, such provision shall be enforceable to the fullest extent
permitted under the laws and public policies of the State whose
laws are deemed to cover enforceability. It is declared to be the
intention of the parties that they would have executed the
remaining provisions without including any that may be declared
unenforceable.
SECTION 8.14. GOVERNING LAW; ASSIGNMENT. This Agreement
------------ -------------------------
shall be governed by the laws of the State of Missouri, except to
the extent that the Missouri Corporate Law and the Corporate Law
must govern aspects of the Merger procedures and shareholder rights
related thereto, 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.
WEST SIDE BANCSHARES, INC.
By /s/ Joe L. McManus
----------------------------
Joe L. McManus
Chief Executive Officer
A-27
<PAGE> 139
BOATMEN'S BANCSHARES, INC.
By /s/ Gregory L. Curl
----------------------------
Gregory L. Curl
Vice Chairman
BOATMEN'S-TEXAS, INC.
By:/s/ Gregory L. Curl
----------------------------
Gregory L. Curl
Executive Vice President
A-28
<PAGE> 140
EXHIBIT 1.09(a)
---------------
WEST SIDE'S LEGAL OPINION MATTERS
1. The due incorporation, valid existence and good standing
of West Side 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 incorporation or organization, valid existence and
good standing of each of the other subsidiaries of West Side 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.
3. With respect to West Side, (i) the number of authorized,
issued and outstanding shares of capital stock of West Side on the
Closing Date, (ii) the nonexistence of any violation of the
preemptive or subscription rights of any person, (iii) the number
of outstanding Stock Options, warrants, or other rights to acquire,
or securities convertible into, any equity security of West Side,
(iv) the nonexistence of any obligation, contingent or otherwise,
to reacquire any shares of capital stock of West Side, and (v) the
nonexistence of any outstanding stock appreciation, phantom stock
or similar rights, except as disclosed in the Agreement.
4. With respect to West Side's subsidiaries, (i) the number
of authorized, issued and outstanding shares of capital stock on
the Closing Date and the ownership of all issued shares by West
Side, (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
subsidiary, (iv) the nonexistence of any obligation, contingent or
otherwise, to reacquire any shares of capital stock of such
subsidiary, and (v) the nonexistence of any outstanding stock
appreciation, phantom stock or similar rights.
5. The due and proper performance of all corporate acts and
other proceedings necessary or required to be taken by West Side to
authorize the execution, delivery and performance of the Agreement,
the due execution and delivery of the Agreement by West Side, and
the Agreement as a valid and binding obligation of West Side,
enforceable against West Side 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).
6. The execution of the Agreement by West Side, and the
consummation of the Merger and the other transactions contemplated
therein, does not violate or cause a default under West Side's
articles of incorporation or bylaws, or any statute, regulation or
rule or any judgment, order or decree against or any material
agreement binding upon West Side or its subsidiaries.
7. To the best knowledge of such counsel, the receipt of all
required consents, approvals (including the requisite approval of
the shareholders of West Side), orders or authorizations of, or
registrations, declaration or filings with or notices to, any
court, administrative agency or commission or
A-Ex. 1.09(a)-1
<PAGE> 141
other governmental authority or instrumentality, domestic or
foreign, or any other person or group of persons or entity required
to be obtained or made by West Side or its subsidiaries in
connection with the execution and delivery of the Agreement or the
consummation of the transactions contemplated therein.
8. The due and proper performance of all corporate acts and
other proceedings necessary or required to be taken by West Side
and Westside Delaware to effect the merger of Westside Delaware
with and into West Side.
9. If requested by Boatmen's pursuant to Section 4.10 of the
Agreement, the due and proper performance of all corporate acts and
other proceedings necessary or required to be taken by the Bank to
authorize the execution, delivery and performance of the Agreement
to Merge with Boatmen's First National Bank of Amarillo, and the
Agreement to Merge as a valid and binding obligation of the Bank,
enforceable against the 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).
10. To the best knowledge of such counsel, the nonexistence
of any material actions, suits, proceedings, orders, investigations
or claims pending or threatened against or affecting West Side or
its subsidiaries which, if adversely determined, would have a
material adverse effect upon their respective properties or assets
or the transactions contemplated by the Agreement.
A-Ex. 1.09(a)-2
<PAGE> 142
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 to consummate the transactions contemplated thereby.
2. The due and proper performance of all corporate acts and
other proceedings required to be taken by each of Boatmen's and
Boatmen's-Texas to authorize the execution, delivery and
performance of the Agreement, their due execution and delivery of
the Agreement, 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).
3. The due authorization and, when issued to the shareholders
of West Side in accordance with the terms of the Agreement, the
valid issuance of the shares of Boatmen's Common to be issued
pursuant to the Merger, such shares being fully paid and
nonassessable, with no personal liability attaching to the
ownership thereof.
4. The execution and delivery of the Agreement by 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 Boatmen's articles of incorporation or bylaws, or any
statute, regulation, rule, judgment, order or decree binding upon
Boatmen's which would be materially adverse to the business of
Boatmen's and its subsidiaries taken as a whole.
5. To the best knowledge of such counsel, 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 or Boatmen's-Texas in connection with the
execution and delivery of the Agreement or the consummation of the
transactions contemplated by the Agreement.
A-Ex. 1.09(b)-1
<PAGE> 143
EXHIBIT 4.08
------------
-------------------, 199--
Boatmen's Bancshares, Inc.
One Boatmen's Plaza
800 Market Street
St. Louis, Missouri 63101
Attention: Gregory L. Curl
Vice Chairman
Re: Agreement and Plan of Merger, dated as of November --,
1994 (the "Merger Agreement"), by and among West Side
Bancshares, Inc. ("West Side"), 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
West Side, 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 West Side 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 West Side
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 West Side 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-Ex. 4.08-1
<PAGE> 144
Boatmen's Bancshares, Inc.
- --------------------, 1994
Page 2
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 West Side.
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-Ex. 4.08-2
<PAGE> 145
EXHIBIT 7.09
------------
<TABLE>
<CAPTION>
INDEX GROUP
-----------
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-Ex. 7.09-1
<PAGE> 146
APPENDIX B
----------
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 or her 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
demand on the existing, surviving, or new corporation (foreign or
domestic) or other entity, as the case may
B-1
<PAGE> 147
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 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
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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.
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.
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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 or her 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 or her 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
or her 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 or her 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 or her 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 or her
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 or her
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 or her shall be
conclusively presumed to have approved and ratified the corporate
action from which he or she dissented and shall be bound thereby,
the right of such shareholder to be paid the fair value of his or
her shares shall cease, and his or her status as a shareholder
shall be restored without prejudice to any 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.)
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